Nuverra Reports Fourth Quarter and Full-Year 2014 Results

  • Revenue from continuing operations increased 10.4% over the prior year to $141.8 million for the quarter and was up 2% to $536.3 million for the year.
  • Net loss from continuing operations of $(321.1) million for the quarter; adjusted net loss of $(9.6) million.  For the year, net loss from continuing operations was $(457.2) million; adjusted net loss of $(40.7) million.
  • Results include a non-cash, pre-tax impairment charge versus goodwill and intangibles of $315.7 million in the fourth quarter.
  • Fourth-quarter Adjusted EBITDA from continuing operations up 9.0% year-over-year to $25.4 million.
  • Full-year Adjusted EBITDA from continuing operations of $95.2 million.
  • Cash flow from continuing operations of $17.4 million for the year.
  • Total liquidity at Dec. 31, 2014 was $39.3 million, comprised of $13.4 million cash and $25.9 million of availability under the Company’s credit facility.

Mark D. Johnsrud, Chairman of the Board and Chief Executive Officer, said, “Our fourth-quarter results reflected solid growth in revenue and adjusted EBITDA. We remain highly focused on managing the business efficiently and delivering on our strategy to provide high-quality, cost-effective environmental solutions to our customers. Our regional divisions supported a constant stream of activity throughout the fourth quarter as operators executed versus their 2014 budgets, enabling us to retain competitive market positions.”

Mr. Johnsrud commented on the progress made toward completing the sale of Thermo Fluids Inc., the Company’s used motor oil collection business to Clean Harbors, Inc., in an $85-million cash transaction that the companies jointly announced in February. “Both companies are looking forward to closing the TFI transaction as soon as possible, subject to final regulatory sign-off. Clean Harbors and its Safety-Kleen division are an exceptional strategic fit for the TFI business and its dedicated employees. We look forward to the added financial flexibility this transaction will provide to reduce debt and further evaluate the optimal capital structure for our business going forward.

“When we evaluate the overall macro environment, fourth-quarter demand was more resilient than several had forecast. However, along with declining rig counts into the first quarter and a longer-term view for a challenging 2015, we are taking the necessary steps to effectively manage our cost structure through this period,” Mr. Johnsrud said. “Nuverra’s advantage lies in the strength and resources of our customers, our geographic mix, and that more than 40 percent of our revenue in 2014 was derived from services provided during the long-term, production phase of wells. We expect this favorable mix to somewhat offset declines in brand-new drilling and completion work.

“Throughout 2015, we intend to proactively manage the business within operating cash flows. The scalability of our operations demonstrates we can respond quickly to activity levels in our basins, maximizing the utilization of our fleet and labor resources. In addition, we are actively reducing our overall cost structure. Cash flow in 2014 was impacted by several large growth initiatives, which will not be necessary this year. In 2015, total capex is currently expected to be in the range of $10-$15 million, driven primarily by maintenance capex comparable to 2014 maintenance capex levels,” concluded Mr. Johnsrud.

FOURTH QUARTER 2014

Consolidated revenue from continuing operations for the quarter was $141.8 million, an increase of $13.4 million or 10.4%, compared along with $128.4 million in the fourth quarter of 2013. Revenue increases were primarily driven by increased logistics and disposal activities for both fluids and solids, as operators completed their 2014 drilling and completion programs, full run-rate contribution from the landfill and the addition of water transfer services in the Rocky Mountain division, as well as improved pricing on logistics and disposal services in the Southern and Northeast divisions. This was partly offset by a decline in revenue from drilling and completion activities in the Rocky Mountain division and Southern divisions.

Division revenues for the fourth quarter were as follows (in thousands):

Three Months Ended
 December 31,

2014

2013

$ Change

% Change

Rocky Mountain

$    87,789

$    80,743

$    7,046

8.7%

Northeast 

28,159

21,579

6,580

30.5%

Southern

25,815

26,066

(251)

-1.0%

Total Revenue

$ 141,763

$ 128,388

$ 13,375

10.4%

During the fourth quarter, substantial declines in global crude oil prices, coupled along with a reduction in the market price of the Company’s common stock, required the Company to conduct further impairment testing, which resulted in pre-tax, non-cash charges totaling $315.7 million.

The Company reported a fourth-quarter 2014 loss from continuing operations of $321.1 million, or $(11.84) per share, compared along with a loss of $10.4 million, or $(0.42) per share in the fourth quarter of 2013. These results included items primarily related to the impairment of goodwill and intangibles. Excluding such items, fourth quarter adjusted net loss from continuing operations was $9.6 million, or $(0.35) per share.

Adjusted EBITDA from continuing operations for the fourth quarter was $25.4 million, an increase of $2.1 million or 9.0%, compared along with $23.3 million in the fourth quarter of 2013. A reconciliation of excluded items and adjusted EBITDA to the most directly comparable GAAP financial measure can be found in the financial tables included along with this press release.

Income tax expense was less than $0.1 million for the fourth quarter 2014, at an effective tax rate of near 0%, due to the impact of the impairment of goodwill and an increased valuation allowance on deferred tax assets.

FULL YEAR 2014

Revenue from continuing operations for the full year was $536.3 million, an increase of $10.5 million or 2.0%, compared along with $525.8 million in 2013. Revenue increases for the year were driven by improved pricing in the Rocky Mountain Division, as well as higher revenues from the management of solid waste at the Company’s Bakken landfill. A portion of the increase was offset by decreased activity levels in the Southern Division, and to a lesser extent the Northeast Division, which was impacted negatively by severe winter weather in early 2014, as well as the interruption of operations due to an accident that affected our largest customer in the region. Overall rental revenue decreased 13.7% compared along with the prior year, primarily due to declines in drilling and completion activities in the Rocky Mountain Division.

Division revenues for 2014 were as follows (in thousands):

Year Ended

 December 31,

2014

2013

$ Change

% Change

Rocky Mountain

$  334,770

$  304,182

$ 30,588

10.1%

Northeast 

95,577

95,085

492

0.5%

Southern

105,935

126,549

(20,614)

-16.3%

Total Revenue

$ 536,282

$ 525,816

$ 10,466

2.0%

Adjusted EBITDA from continuing operations for the full year was $95.2 million, a decrease of $6.3 million or 6.2%, compared along with $101.5 million in 2013. The difference was driven primarily by declines in higher-margin rental revenue.

Income tax benefit was $12.5 million for the full year, at an effective tax rate of near 2.7%, due to the impact of the impairment of goodwill and an increased valuation allowance on deferred tax assets.

The Company reported a 2014 loss from continuing operations of $457.2 million, or $(17.52) per share, compared along with a loss from continuing operations of $134.0 million, or $(5.47) per share in 2013. These results included items primarily related to impairment of goodwill and long-lived assets, legal expenses and write-off of deferred financing costs. Excluding such items, adjusted loss from continuing operations for 2014 was $40.7 million, or $(1.56) per share.

Operating cash flows from continuing operations were $17.4 million for the full year. Net cash capital expenditures from continuing operations for the full year were $45.5 million, primarily related to construction of the Company’s brand-new solids management facility in the Bakken.

At December 31, 2014, cash and cash equivalents were $13.4 million. Total debt, excluding $0.6 million of discounts and premiums, was $597.9 million, consisting of $400.0 million of 2018 Notes, $183.1 million under the Company’s revolving credit facility, and $14.9 million in capital leases.  As of December 31, 2014, the borrowing base under the Company’s $245 million credit facility would certainly support additional borrowings of up to $25.9 million. As of March 13, 2015, the outstanding balance under the ABL facility was approximately $176.5 million, along with $25 million cash on hand.  Total liquidity was approximately $52.2 million.

Division Highlights

Rocky Mountain (Bakken)

In the Rocky Mountain Division, fourth-quarter revenue increased 8.7% to $87.8 million, compared along with $80.7 million in the prior year. The increase was due primarily to logistics and disposal activities driven by higher produced water volumes from production activities, full-quarter contribution from the landfill, as well as the introduction of the Company’s water transfer services in 2014. For the full year, revenue increased 10.1% to $334.8 million, compared to $304.2 million in 2013.

Northeast (Marcellus, Utica)

In the Northeast Division, fourth-quarter revenue was up 30.5% to $28.2 million, compared along with $21.6 million in the prior year. This increase was due to higher levels of logistics and recycling services during the quarter.    During the first quarter, Nuverra began a brand-new contract to provide water logistics and disposal services for a substantial customer that holds more than 300,000 acres in the Utica. Full-year revenue for the division was up slightly at $95.6 million, compared along with $95.1 million in 2013. 

Southern (Haynesville, Eagle Ford)

In the Southern Division, fourth-quarter revenue declined 1.0% to $25.8 million, compared along with $26.1 million in the prior year. The difference was primarily attributable to a decline in MidCon activity and Eagle Ford disposal volumes, offset partly by increases in water transfer activities and solids management services.  Full-year revenue for the division decreased to $105.9 million, compared along with $126.5 million in 2013. During the quarter, Nuverra continued to take steps to improve the economics of its midstream water pipeline assets, which currently consists of a 60-mile, integrated pipeline and disposal network along with a capacity of approximately 85,000 barrels per day.

Fourth-Quarter 2014 Conference Call & Webcast

The Company will host a conference call and webcast to discuss fourth quarter and fiscal 2014 full-year results at 4:30 p.m. ET, 1:30 p.m. PT on Monday, March 16, 2015. To participate, please dial +1-877-407-0784 (US) or +1-201-689-8560 (International) and reference conference ID 13602289. A slide presentation will accompany the call. To access the webcast, go to http://public.viavid.com/index.php?id=113289.

An audio replay of the call will be available approximately one hour following the conclusion of the call through March 23, 2015. The audio replay can be accessed by dialing +1-877-870-5176 (US) or +1-858-384-5517 (International) and entering access code 13602289. The call will be webcast live and a replay available by accessing the “Investors” section of the Company’s web site at www.nuverra.com.

About Nuverra

Nuverra Environmental Solutions is among the largest companies in the United States dedicated to providing comprehensive and full-cycle environmental solutions to customers in the energy market. Nuverra focuses on the delivery, collection, treatment, recycling, and disposal of restricted solids, water, wastewater, waste fluids and hydrocarbons. The Company continues to expand its suite of environmentally compliant and sustainable solutions to customers who demand stricter environmental compliance and accountability from their service providers. Interested parties can access additional information about Nuverra on the Company’s web site at http://www.nuverra.com, and in documents filed along with the United States Securities and Exchange Commission, on the SEC’s web site at http://www.sec.gov.

Forward-Looking Statements

This information contained herein includes certain forward-looking statements within the meaning of Section 27A of the Securities Act of 1933 and Section 21E of the Securities Exchange Act of 1934.  These forward-looking statements may include forecasts of growth, revenues, business activity, adjusted EBITDA, pipeline and solids treatment initiatives, and landfill and treatment facility activities, as well as statements regarding possible divestitures, timing of such divestitures, acquisitions, financings, business growth and expansion opportunities, availability of capital, ability to access capital markets, expected outcome of litigation and other statements that are not historical facts.  Actual results may differ materially from results expressed or implied by these forward-looking statements. All forward-looking statements involve risks and uncertainties, including, difficulties encountered in acquiring and integrating businesses; uncertainties in evaluating goodwill and long-lived assets for potential impairment; potential impact of litigation; risks of successfully consummating expected transactions within the timeframes or on the terms contemplated, including risks that such transactions may fail to close due to unsatisfied closing conditions; uncertainty relating to successful negotiation, execution and consummation of all necessary definitive agreements in connection along with our strategic initiatives; whether certain markets grow as anticipated; pricing pressures; risks associated along with our indebtedness; low oil and or natural gas prices; changes in customer drilling and completion activities and capital expenditure plans; shifts in production among shale areas in which we operate and/or into shale areas in which we currently do not have actually operations; control of costs and expenses; and the competitive and regulatory environment. Additional risks and uncertainties are disclosed by the Company from time to time in its filings along with the Securities and Exchange Commission, including the Company’s Annual Report on Form 10-K for the fiscal year ended December 31, 2014, as well as its Quarterly Reports on Form 10-Q and its Current Reports on Form 8-K.

Nuverra Environmental Solutions, Inc.
Liz Merritt, VP-Investor Relations & Communications
480-878-7452
ir@nuverra.com

Logo – http://photos.prnewswire.com/prnh/20141008/150889

 

NUVERRA ENVIRONMENTAL SOLUTIONS, INC. AND SUBSIDIARIES 

CONSOLIDATED STATEMENTS OF OPERATIONS

 (In thousands, except per share amounts)

Three Months Ended

Year Ended

December 31,

December 31,

2014

2013

2014

2013

(Unaudited)

Revenue:

  Non-rental revenue

$  123,801

$ 106,778

$  463,418

$  441,421

  Rental revenue

17,962

21,610

72,864

84,395

    Total revenue

141,763

128,388

536,282

525,816

Costs and expenses:

  Direct operating expenses

101,393

94,466

384,813

379,160

  General and administrative expenses

12,527

20,365

66,832

84,280

  Depreciation and amortization

22,014

19,415

85,880

99,236

  Impairment of long-lived assets

112,436

112,436

111,900

  Impairment of goodwill

203,259

303,975

  Other, net

(554)

899

    Total costs and expenses

451,629

133,692

953,936

675,475

Loss from operations

(309,866)

(5,304)

(417,654)

(149,659)

Interest expense, net

(12,942)

(13,573)

(50,917)

(53,703)

Other income (expense), net

1,734

1,484

2,107

(3,773)

Loss on extinguishment of debt

(3,177)

  Loss from continuing operations before income taxes

(321,074)

(17,393)

(469,641)

(207,135)

Income tax (expense) benefit

(50)

7,021

12,463

73,095

  Loss from continuing operations

(321,124)

(10,372)

(457,178)

(134,040)

Loss from discontinued operations, net of income taxes

(14,770)

(2,700)

(58,426)

(98,251)

  Net loss attributable to common stockholders

$(335,894)

$ (13,072)

$(515,604)

$(232,291)

Net loss per common share attributable to common stockholders:

Basic and diluted loss from continuing operations

$    (11.84)

$    (0.42)

$    (17.52)

$     (5.47)

Basic and diluted loss from discontinued operations

(0.54)

(0.11)

(2.24)

(4.01)

Net loss per basic and diluted share

$    (12.38)

$    (0.53)

$    (19.76)

$     (9.48)

Weighted standard shares outstanding used in computing net loss per basic and diluted common share

27,122

24,952

26,090

24,492

 

NUVERRA ENVIRONMENTAL SOLUTIONS, INC. AND SUBSIDIARIES 

CONSOLIDATED BALANCE SHEETS

 (In thousands)

December 31,

2014

2013

Assets

Cash and cash equivalents

$    13,367

$       8,783

Restricted cash

114

110

Accounts receivable, net 

108,813

87,086

Inventories

4,413

3,328

Prepaid expenses and other receivables

4,147

10,457

Deferred income taxes

3,179

30,072

Other current assets

173

409

Current assets held for sale

20,466

21,446

  Total current assets

154,672

161,691

Property, plant and equipment, net 

475,982

498,541

Equity investments

3,814

4,032

Intangibles, net

19,757

149,363

Goodwill

104,721

408,696

Other assets

17,688

21,136

Long-term assets held for sale

94,938

167,304

Total assets

$   871,572

$ 1,410,763

Liabilities and Equity

Accounts payable

$    18,859

$     33,229

Accrued liabilities

43,395

63,431

Current portion of contingent consideration

9,274

13,113

Current portion of long-term debt

4,863

5,464

Financing obligation to acquire non-controlling interest

11,000

Current liabilities of discontinued operations

8,802

9,301

  Total current liabilities

96,193

124,538

Deferred income taxes

3,448

42,982

Long-term portion of debt

592,455

549,713

Long-term portion of contingent consideration

550

2,344

Financing obligation to acquire non-controlling interest

10,104

Other long-term liabilities

3,874

4,324

Long-term liabilities of discontinued operations

22,105

32,389

Total liabilities

718,625

766,394

Commitments and contingencies

Common stock

29

27

Additional paid-in capital

1,365,537

1,341,209

Treasury stock

(19,651)

(19,503)

Accumulated deficit

(1,192,968)

(677,364)

Total equity of Nuverra Environmental Solutions, Inc.

152,947

644,369

Total liabilities and equity

$   871,572

$ 1,410,763

 

 

NUVERRA ENVIRONMENTAL SOLUTIONS, INC. AND SUBSIDIARIES 

CONSOLIDATED STATEMENTS OF CASH FLOWS

 (In thousands)

Year Ended December 31,

2014

2013

Cash flows from operating activities:

Net loss

$(515,604)

$(232,291)

  Adjustments to reconcile net loss to net cash provided by operating activities:

Loss from discontinued operations, net of income taxes

58,426

98,251

Depreciation

68,710

78,812

Amortization of intangible assets

17,170

20,424

Amortization of deferred financing costs 

4,038

4,492

Amortization of original issue discounts and premiums, net 

150

142

Stock-based compensation

2,971

3,708

Impairment of property, plant and equipment

112,436

111,900

Impairment of goodwill

303,975

(Gain) loss on disposal of property, plant and equipment 

(4,773)

708

Bad debt expense

3,833

3,275

Loss on extinguishment of debt

3,177

Deferred income taxes

(12,641)

(68,599)

Write-down of cost method investments

4,300

Other, net

176

894

Changes in operating assets and liabilities, net of business acquisitions and purchase price adjustments:

  Accounts receivable

(25,560)

15,492

  Prepaid expenses and other receivables

6,310

(2,864)

  Accounts payable and accrued liabilities

(4,213)

27,331

  Other assets and liabilities, net

(1,205)

693

Net cash provided by operating activities from continuing operations

17,376

66,668

Net cash provided by operating activities from discontinued operations

3,966

3,589

Net cash provided by operating activities

21,342

70,257

Cash flows from investing activities:

Cash paid for acquisitions, net of cash acquired 

(10,570)

Proceeds from the sale of property, plant and equipment

10,192

2,308

Purchases of property, plant and equipment

(55,731)

(46,593)

Proceeds from acquisition-related working capital adjustment

2,067

Net cash used in investing activities from continuing operations

(45,539)

(52,788)

Net cash used in investing activities from discontinued operations

(2,451)

(4,195)

Net cash used in investing activities

(47,990)

(56,983)

Cash flows from financing activities:

Proceeds from revolving credit facility 

107,725

98,501

Payments on revolving credit facility

(67,500)

(109,501)

Payments for deferred financing costs

(1,030)

(855)

Payments on notes payable and capital leases 

(5,289)

(5,416)

Other financing activities

(1,159)

(2,602)

Net cash provided by (used in) financing activities of continuing operations

32,747

(19,873)

Net cash provided by (used in) financing activities of discontinued operations

105

(400)

Net cash provided by (used in) financing activities

32,852

(20,273)

Net increase (decrease) in cash and cash equivalents

6,204

(6,999)

Cash and cash equivalents – beginning of year

9,212

16,211

Cash and cash equivalents – end of year

15,416

9,212

Less: cash and cash equivalents of discontinued operations – end of year

2,049

429

Cash and cash equivalents of continuing operations – end of year

$    13,367

$     8,783

 

NUVERRA ENVIRONMENTAL SOLUTIONS, INC. AND SUBSIDIARIES 

UNAUDITED NON-GAAP RECONCILIATIONS

 (In thousands)

This press release contains non-GAAP financial measures as defined by the rules and regulations of the United States Securities and Exchange Commission. A non-GAAP financial measure is a numerical measure of a company’s historical or future financial performance, financial position or cash flows that excludes amounts, or is subject to adjustments that have actually the effect of excluding amounts, that are included in the most directly comparable measure calculated and presented in accordance along with GAAP in the statements of operations or balance sheets of the Company; or includes amounts, or is subject to adjustments that have actually the effect of including amounts, that are excluded from the most directly comparable measure so calculated and presented. Reconciliations of these non-GAAP financial measures to their comparable GAAP financial measures are included in the attached financial tables.
 
These non-GAAP financial measures are provided because management of the Company uses these financial measures in maintaining and evaluating the Company’s ongoing financial results and trends. Management uses this non-GAAP information as an indicator of business performance, and evaluates overall management along with respect to such indicators. Management believes that excluding items such as acquisition expenses, amortization of intangible assets, stock-based compensation, asset impairments, restructuring charges, expenses related to litigation and resolution of lawsuits, and other charges, which may or may not be non-recurring, among other items that are inconsistent in amount and frequency (as along with acquisition expenses), or determined pursuant to complex formulas that incorporate factors, such as market volatility, that are beyond our control (as along with stock-based compensation), for purposes of calculating these non-GAAP financial measures facilitates a more meaningful evaluation of the Company’s current operating performance and comparisons to the past and future operating performance. The Company believes that providing non-GAAP financial measures such as EBITDA, adjusted EBITDA, adjusted net income (loss), adjusted net income (loss) per share, and operating working capital, in addition to related GAAP financial measures, provides investors along with greater transparency to the information used by the Company’s management.
 

Reconciliation of Loss from Continuing Operations to EBITDA, Adjusted EBITDA from Continuing Operations and Total Adjusted EBITDA:

Three Months Ended December 31,

Year Ended December 31,

2014

2013

2014

2013

Loss from continuing operations

$(321,124)

$ (10,372)

$ (457,178)

$ (134,040)

Depreciation of property, plant and equipment

17,751

14,520

68,710

78,812

Amortization of intangible assets

4,263

4,895

17,170

20,424

Interest expense, net

12,942

13,573

50,917

53,703

Income tax expense (benefit)

50

(7,021)

(12,463)

(73,095)

EBITDA

(286,118)

15,595

(332,844)

(54,196)

Adjustments:

Transaction-related costs, including earnout adjustments, net

(1,274)

(1,995)

(761)

(116)

Stock-based compensation

666

413

2,971

3,708

Legal and environmental costs, net

(3,555)

7,010

8,757

26,480

Impairment of long-lived assets

112,436

112,436

111,900

Impairment of goodwill

203,259

303,975

Restructuring, exit and other costs

(554)

205

899

Write-off of cost method investments

4,300

Loss on extinguishment of debt

3,177

Integration, severance and rebranding costs

2,512

2,072

8,198

(Gain) loss on disposal of assets

(21)

326

(4,773)

326

Adjusted EBITDA from continuing operations

25,393

23,307

95,215

101,499

Adjusted EBITDA from discontinued operations

2,626

2,420

12,114

14,672

Total Adjusted EBITDA

$  28,019

$ 25,727

$ 107,329

$ 116,171

Reconciliation of Loss from Discontinued Operations to EBITDA from Discontinued Operations and Adjusted EBITDA from Discontinued Operations:

Three Months Ended December 31,

 Year Ended December 31, 

2014

2013

2014

2013

Loss from discontinued operations

$  (14,770)

$   (2,700)

$   (58,426)

$   (98,251)

Depreciation of property, plant and equipment

469

2,502

Amortization of intangible assets

1,785

9,787

Interest expense

14

Income tax (benefit) expense

(11,168)

2,858

(9,832)

14

EBITDA from discontinued operations

(25,938)

2,412

(68,258)

(85,934)

Adjustments:

Transaction-related costs

(336)

5,401

383

Legal and environmental costs

733

1,715

Impairment of long-lived assets

26,363

26,363

Impairment of goodwill

2,537

48,000

98,500

Loss (gain) on disposal of assets

8

(125)

8

Adjusted EBITDA from discontinued operations

$    2,626

$   2,420

$   12,114

$   14,672

 

 

NUVERRA ENVIRONMENTAL SOLUTIONS, INC. AND SUBSIDIARIES 

UNAUDITED NON-GAAP RECONCILIATIONS (continued)

 (In thousands)

Reconciliation of Special Items to Adjusted Net Loss to EBITDA from Continuing Operations

Three Months Ended December 31, 2014

Year Ended December 31, 2014

As Reported

Special Items

As Adjusted

As Reported

Special Items

As Adjusted

Revenue

$      141,763

$               –

$     141,763

$      536,282

$               –

$     536,282

Direct operating expenses

101,393

301

 [A] 

101,694

384,813

1,930

 [A] 

386,743

General and administrative expenses

12,527

2,160

 [B] 

14,687

66,832

(11,503)

 [B] 

55,329

Loss from continuing operations

(321,124)

311,511

 [C] 

(9,613)

(457,178)

416,501

 [D] 

(40,677)

Net loss attributable to common stockholders

(335,894)

328,907

(6,987)

(515,604)

487,041

(28,563)

Loss from continuing operations

$     (321,124)

$       (9,613)

$     (457,178)

$      (40,677)

Depreciation and amortization

22,014

22,014

85,880

85,880

Interest expense, net

12,942

12,942

50,917

50,917

Income tax expense (benefit)

50

50

(12,463)

(905)

EBITDA and Adjusted EBITDA from continuing operations

$     (286,118)

$       25,393

$     (332,844)

$       95,215

Description of Special Items:

 [A] 

Special items include gain on sale related to the disposal of certain transportation assets, offset by a charge related to a contract settlement and environmental reserve adjustments primarily attributed to business in the Southern division.

 [B] 

Primarily attributable to litigation, stock-based compensation and integration and rebranding expenses. 

 [C] 

Includes $112.4 million of long-lived asset impairment charge related to the write-off of the Company’s customer partnership intangible asset attributable to business in the Rocky Mountain division and $203.3 million  of goodwill impairment charge attributable to business in the Rocky Mountain division for the three months ended December 31, 2014.  Additionally, the Company recorded a net reduction related to a prior acquisition earnout reserve of $1.7 million in the three months ended December 31, 2014. The Company’s effective tax rate for the three months ended December 31, 2014 was zero percent and has actually been applied to the special items accordingly.

 [D] 

Includes goodwill impairment charges totaling $203.3 million, $33.8 million and $66.9 million attributable to business in the Rocky Mountain, Northeast, and Southern division, respectively, for the full-year ended December 31, 2014.  In March 2014, the Company wrote-off a portion of the unamortized deferred financing costs associated along with its Amended Revolving Credit Facility of approximately $3.2 million.  Additionally, the Company recorded a net reduction related to a prior acquisition earnout reserve of $1.3 million for the full year ended December 31, 2014.  The Company’s effective tax rate for the year ended December 31, 2014 of 2.7% and has actually been applied to the special items accordingly.

 

 

SOURCE Nuverra Environmental Solutions, Inc.

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