10-Q

UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549

__________________________________

FORM 10-Q

__________________________________

(Mark One)

x QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934

For the quarterly period ended: March 31, 2016

or

¨ TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934

For the transition period from                      to                     .

Commission File Number: 001-33816

__________________________________

__________________________________

Delaware	26-0287117
(State or other jurisdiction of incorporation or organization)	(I.R.S. Employer Identification No.)

14624 N. Scottsdale Rd., Suite 300, Scottsdale, Arizona 85254

(602) 903-7802

(Address, including zip code, and telephone number, including area code, of registrant’s principal executive offices)

__________________________________

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

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

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

Large accelerated filer	¨	Accelerated filer	x
Non-accelerated filer	¨  (Do not check if a smaller reporting company)	Smaller reporting company	¨

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

The number of shares outstanding of the registrant’s common stock as of April 26, 2016 was 31,052,076.

TABLE OF CONTENTS

PART I —FINANCIAL INFORMATION		5
Item 1.	Condensed Consolidated Financial Statements	5
	Condensed Consolidated Balance Sheets as of March 31, 2016 and December 31, 2015	5
	Condensed Consolidated Statements of Operations for the Three Months Ended March 31, 2016 and 2015	6
	Condensed Consolidated Statements of Cash Flows for the Three Months Ended March 31, 2016 and 2015	7
	Notes to Condensed Consolidated Financial Statements	8
Item 2.	Management’s Discussion and Analysis of Financial Condition and Results of Operations	30
Item 3.	Quantitative and Qualitative Disclosures About Market Risk	40
Item 4.	Controls and Procedures	41
PART II – OTHER INFORMATION		42
Item 1.	Legal Proceedings	42
Item 1A.	Risk Factors	42
Item 2.	Unregistered Sales of Equity Securities and Use of Proceeds	45
Item 3.	Defaults Upon Senior Securities	45
Item 4.	Mine Safety Disclosures	45
Item 5.	Other Information	45
Item 6.	Exhibits	46

2

Forward-Looking Statements

In addition to historical information, this Quarterly Report on Form 10-Q contains certain "forward-looking statements" within the meaning of Section 27A of the United States Securities Act of 1933, as amended, or the “Securities Act,” and Section 21E of the United States Securities Exchange Act of 1934, as amended, or the “Exchange Act,” that involve many risks and uncertainties. These statements relate to our expectations for future events and time periods. All statements other than statements of historical fact are statements that could be deemed to be forward-looking statements, including, but not limited to, statements regarding:

• future financial performance and growth targets or expectations;

• market and industry trends and developments, including the current decline in oil and natural gas prices;

• the potential benefits of our completed and any future merger, acquisition, disposition, restructuring, and financing transactions;

• the expected timing for completion of the restructuring transactions described herein and in our other filings with the SEC; and

• the expected effect of the restructuring transactions.

You can identify these and other forward-looking statements by the use of words such as “anticipates,” “expects,” “intends,” “plans,” “predicts,” “believes,” “seeks,” “estimates,” “may,” “might,” “will,” “should,” “would,” “could,” “potential,” “future,” “continue,” “ongoing,” “forecast,” “project,” “target” or similar expressions, and variations or negatives of these words.

These forward-looking statements are based on information available to us as of the date of this Quarterly Report and our current expectations, forecasts and assumptions, and involve a number of risks and uncertainties. Accordingly, forward-looking statements should not be relied upon as representing our views as of any subsequent date. Future performance cannot be ensured, and actual results may differ materially from those in the forward-looking statements. Some factors that could cause actual results to differ include:

• failure to complete all aspects of our restructuring transactions, including the note conversion, rights offering and implementation of the management incentive plan;

• financial results that may be volatile and may not reflect historical trends due to, among other things, changes in commodity prices or general market conditions, acquisition and disposition activities, fluctuations in consumer trends, pricing pressures, changes in raw material or labor prices or rates related to our business and changing regulations or political developments in the markets in which we operate;

• risks associated with our indebtedness, including our ability to manage our liquidity needs and to comply with covenants under our credit facilities, including the indentures governing our notes;

• risks associated with our capital structure, including our ability to refinance or restructure our indebtedness to access necessary funding under our existing or future credit facilities and to generate sufficient operating cash flow to meet our debt service obligations;

• changes in customer drilling, completion and production activities and capital expenditure plans, including impacts due to low oil and/or natural gas prices or the economic or regulatory environment;

• difficulties in identifying and completing acquisitions and divestitures, and differences in the type and availability of consideration or financing for such acquisitions and divestitures;

• difficulties in completing any refinancing or restructuring transactions;

• difficulties in successfully executing our growth initiatives, including difficulties in permitting, financing and constructing pipelines and waste treatment assets and in structuring economically viable agreements with potential customers, joint venture partners, financing sources and other parties;

• our ability to attract, motivate and retain key executives and qualified employees in key areas of our business;

• fluctuations in prices, transportation costs and demand for commodities such as oil and natural gas;

• risks associated with the operation, construction and development of saltwater disposal wells, solids and liquids treatment assets, landfills and pipelines, including access to additional locations and rights-of-way, unscheduled

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delays or inefficiencies and reductions in volume due to micro- and macro-economic factors or the availability of less expensive alternatives;

• risks associated with our ability to collect outstanding receivables as a result of liquidity constraints on our customers resulting from low oil and/or natural gas prices;

• the availability of less favorable credit and payment terms due to the downturn in our industry and our financial condition, including more stringent or costly payment terms from our vendors and additional requirements from sureties to collateralize our performance bonds with letters of credit, which may further constrain our liquidity and reduce availability under our revolving credit facility;

• risks associated with new technologies and the impact on our business;

• the effects of competition in the markets in which we operate, including the adverse impact of competitive product announcements or new entrants into our markets and transfers of resources by competitors into our markets;

• changes in economic conditions in the markets in which we operate or in the world generally, including as a result of political uncertainty;

• reduced demand for our services due to regulatory or other influences related to extraction methods such as hydraulic fracturing, shifts in production among shale areas in which we operate or into shale areas in which we do not currently have operations or the loss of key customers;

• the impact of changes in laws and regulation on waste management and disposal activities, including those impacting the delivery, storage, collection, transportation treatment and disposal of waste products, as well as the use or reuse of recycled or treated products or byproducts;

• control of costs and expenses;

• present and possible future claims, litigation or enforcement actions or investigations;

• natural disasters, such as hurricanes, earthquakes and floods, or acts of terrorism, or extreme weather conditions, that may impact our corporate headquarters, assets, including wells or pipelines, distribution channels, or which otherwise disrupt our or our customers’ operations or the markets we serve;

• the threat or occurrence of international armed conflict;

• the unknown future impact on our business from legislation and governmental rulemaking, including the Affordable Care Act, the Dodd-Frank Wall Street Reform and Consumer Protection Act and the rules to be promulgated thereunder;

• risks involving developments in environmental or other governmental laws and regulations in the markets in which we operate and our ability to effectively respond to those developments including laws and regulations relating to oil and natural gas extraction businesses, particularly relating to water usage, and the disposal, transportation and treatment of liquid and solid wastes; and

• other risks identified in this Quarterly Report or referenced from time to time in our filings with the United States Securities and Exchange Commission.

You are cautioned not to place undue reliance on any forward-looking statements, which speak only as of the date of this Quarterly Report. Except as required by law, we do not undertake any obligation to update or release any revisions to these forward-looking statements to reflect any events or circumstances, whether as a result of new information, future events, changes in assumptions or otherwise, after the date hereof.

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PART I—FINANCIAL INFORMATION

Item  1. Financial Statements.

NUVERRA ENVIRONMENTAL SOLUTIONS, INC. AND SUBSIDIARIES

CONDENSED CONSOLIDATED BALANCE SHEETS

(In thousands)

(Unaudited)

	March 31,			December 31,
	2016			2015
				(Note 1)
Assets
Cash and cash equivalents	$	30		$	39,309
Restricted cash	4,450			4,250
Accounts receivable, net of allowance for doubtful accounts of $3.5 and $3.5 million at March 31, 2016 and December 31, 2015, respectively	30,857			42,188
Inventories	2,715			2,985
Prepaid expenses and other receivables	4,011			3,377
Other current assets	5,744			2,372
Total current assets	47,807			94,481
Property, plant and equipment, net of accumulated depreciation of $219.2 and $209.1 million at March 31, 2016 and December 31, 2015, respectively	391,775			406,188
Equity investments	3,745			3,750
Intangibles, net	16,214			16,867
Other assets	572			1,333
Total assets	$	460,113		$	522,619
Liabilities and Shareholders' Deficit
Accounts payable	$	7,269		$	6,907
Accrued liabilities	34,252			29,843
Current portion of contingent consideration	8,500			8,628
Current portion of long-term debt	463,164			499,709
Total current liabilities	513,185			545,087
Deferred income taxes	295			270
Long-term portion of debt	8,015			11,758
Other long-term liabilities	3,735			3,775
Total liabilities	525,230			560,890
Commitments and contingencies
Shareholders' deficit:
Common stock	30			30
Additional paid-in capital	1,370,298			1,369,921
Treasury stock	(19,807		)	(19,800		)
Accumulated deficit	(1,415,638		)	(1,388,422		)
Total shareholders' deficit	(65,117		)	(38,271		)
Total liabilities and shareholders' deficit	$	460,113		$	522,619

The accompanying notes are an integral part of these statements.

5

NUVERRA ENVIRONMENTAL SOLUTIONS, INC. AND SUBSIDIARIES

CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS

(In thousands, except per share amounts)

(Unaudited)

	Three Months Ended
	March 31,
	2016			2015
Revenue:
Non-rental revenue	$	44,026		$	107,010
Rental revenue	2,949			12,102
Total revenue	46,975			119,112
Costs and expenses:
Direct operating expenses	38,617			87,999
General and administrative expenses	7,452			12,700
Depreciation and amortization	15,845			17,482
Other, net	—			683
Total costs and expenses	61,914			118,864
Operating (loss) income	(14,939		)	248
Interest expense, net	(12,045		)	(12,588		)
Other income, net	158			321
Loss on extinguishment of debt	(390		)	—
Loss from continuing operations before income taxes	(27,216		)	(12,019		)
Income tax (expense) benefit	(55		)	24
Loss from continuing operations	(27,271		)	(11,995		)
Income from discontinued operations, net of income taxes	55			921
Net loss attributable to common shareholders	$	(27,216	)	$	(11,074	)
Net loss per common share attributable to common shareholders:
Basic and diluted loss from continuing operations	$	(0.98	)	$	(0.44	)
Basic and diluted income from discontinued operations	—			0.03
Net loss per basic and diluted common share	$	(0.98	)	$	(0.41	)
Weighted average shares outstanding used in computing net loss per basic and diluted common share	27,907			27,412

The accompanying notes are an integral part of these statements.

6

NUVERRA ENVIRONMENTAL SOLUTIONS, INC. AND SUBSIDIARIES

CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS

(In thousands)

(Unaudited)

	Three Months Ended
	March 31,
	2016			2015
Cash flows from operating activities:
Net loss	$	(27,216	)	$	(11,074	)
Adjustments to reconcile net loss to net cash provided by operating activities:
Income from discontinued operations, net of income taxes	—			(921		)
Gain on the sale of TFI	(55		)	—
Depreciation and amortization of intangible assets	15,845			17,482
Amortization of deferred financing costs and debt discounts, net	1,157			1,247
Stock-based compensation	368			789
Gain on disposal of property, plant and equipment	(1,057		)	(654		)
Bad debt expense	217			732
Loss on extinguishment of debt	390			—
Deferred income taxes	25			1
Other, net	(88		)	(418		)
Changes in operating assets and liabilities:
Accounts receivable	11,114			21,688
Prepaid expenses and other receivables	(634		)	(1,273		)
Accounts payable and accrued liabilities	4,924			6,949
Other assets and liabilities, net	(2,425		)	202
Net cash provided by operating activities from continuing operations	2,565			34,750
Net cash provided by operating activities from discontinued operations	—			867
Net cash provided by operating activities	2,565			35,617
Cash flows from investing activities:
Proceeds from the sale of property, plant and equipment	1,449			1,968
Purchases of property, plant and equipment	(1,421		)	(6,163		)
Increase in restricted cash	(200		)	—
Net cash used in investing activities from continuing operations	(172		)	(4,195		)
Net cash used in investing activities from discontinued operations	—			(161		)
Net cash used in investing activities	(172		)	(4,356		)
Cash flows from financing activities:
Proceeds from revolving credit facility	12,409			—
Payments on revolving credit facility	(51,968		)	(7,000		)
Payments for deferred financing costs	(426		)	—
Payments on vehicle financing and other financing activities	(1,687		)	(1,436		)
Net cash used in financing activities from continuing operations	(41,672		)	(8,436		)
Net cash provided by financing activities from discontinued operations	—			38
Net cash used in financing activities	(41,672		)	(8,398		)
Net (decrease) increase in cash and cash equivalents	(39,279		)	22,863
Cash and cash equivalents - beginning of period	39,309			15,416
Cash and cash equivalents - end of period	30			38,279
Less: cash and cash equivalents of discontinued operations - end of period	—			2,793
Cash and cash equivalents of continuing operations - end of period	$	30		$	35,486
Supplemental disclosure of cash flow information:
Cash paid for interest	$	928		$	949
Cash paid for taxes, net	2			94

The accompanying notes are an integral part of these statements.

7

NUVERRA ENVIRONMENTAL SOLUTIONS, INC. AND SUBSIDIARIES

NOTES TO THE CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

(Unaudited)

Note 1 - Basis of Presentation

The accompanying condensed consolidated financial statements of Nuverra Environmental Solutions, Inc. and its subsidiaries (collectively, “Nuverra,” the “Company,” “we,” “us,” or “our”) are unaudited, pursuant to the rules and regulations of the United States Securities and Exchange Commission ("SEC"). Our condensed consolidated balance sheet as of December 31, 2015, included herein, has been derived from audited financial statements, but does not include all disclosures required by accounting principles generally accepted in the United States of America (or "GAAP"). Certain information and footnote disclosures normally included in financial statements prepared in accordance with GAAP have been condensed or omitted pursuant to such rules and regulations. In our opinion, the condensed consolidated financial statements include the normal, recurring adjustments necessary for the fair statement of the results for the interim periods. These financial statements should be read in conjunction with the audited consolidated financial statements, including the notes thereto, contained in our Annual Report on Form 10-K for the year ended December 31, 2015, filed with the SEC on March 11, 2016.

All dollar and share amounts in the footnote tabular presentations are in thousands, except per share amounts and unless otherwise noted. Unless stated otherwise, any reference to statement of operations items in these accompanying condensed consolidated financial statements refers to results from continuing operations.

Reclassifications

Certain reclassifications and adjustments have been made to prior period amounts in the accompanying condensed consolidated statements of operations and cash flows and notes thereto in order to conform to the current year’s presentation including:

• Certain similar line items in the condensed consolidated statement of cash flows for the three months ended March 31, 2015 have been combined to conform to the current year presentation.

• In June 2015, we purchased the remaining interest in Appalachian Water Services, LLC (“AWS”), previously a 51% owned non-guarantor subsidiary, and have recast the tables in Note 16 to reflect AWS as a part of the Guarantor Subsidiaries for the three months endedMarch 31, 2015.

• As of January 1, 2016, and further discussed below under "Significant Accounting Policies," we retrospectively adopted, for all comparative periods presented, ASU 2015-03, Simplifying the Presentation of Debt Issuance Costs, and ASU 2015-15, Presentation and Subsequent Measurement of Debt Issuance Costs Associated with Line-of-Credit Arrangements. As a result, $7.9 million and $8.7 million of unamortized debt issuance costs related to our 2018 Notes have been reclassified from “Other assets” to “Current portion of long-term debt” on the condensed consolidated balance sheets as of March 31, 2016 and December 31, 2015, respectively. Additionally, as the debt associated with our asset-based revolving credit facility is presented as short-term, the related debt issuance costs of $2.1 million and $2.2 million as of March 31, 2016 and December 31, 2015, respectively, have been reclassified from "Other assets" to "Other current assets" on the condensed consolidated balance sheets. Further, the total assets for the Corporate segment reported in Note 14 have been adjusted for this reclass.

Going Concern

Our consolidated financial statements have been prepared assuming that we will continue as a going concern, which contemplates continuity of operations, realization of assets, and liquidation of liabilities in the normal course of business. As reflected in the condensed consolidated financial statements, we had an accumulated deficit at March 31, 2016, and a net loss for the three months endedMarch 31, 2016 and 2015. These factors, coupled with our large outstanding debt balance, raise substantial doubt about our ability to continue as a going concern. We are attempting to restructure our debt, generate sufficient revenues and reduce costs; however, our cash position may not be sufficient to support our daily operations if we are not successful. While we are currently executing a comprehensive strategy to restructure our indebtedness, improve liquidity and reduce costs, including cash interest expense, to sustain operations through the prolonged depression in oil and natural gas prices and the corresponding impact on our business operations, there can be no assurances to that effect. Our ability to continue as a going concern is dependent upon our ability to complete the transactions associated with our comprehensive strategy to restructure our indebtedness and to generate sufficient liquidity to meet our obligations and operating needs. While we were, and remain, in compliance with our existing debt arrangements, we recognize that absent an improvement in oil prices or a reduction in our indebtedness and cash interest expense, we do not have enough liquidity, including cash on hand, to service our debt, operations, and pay-down debt to avoid covenant violations. See the "Restructuring Support Agreement" discussion in Note 8 and the "Subsequent Events Related to Restructuring" discussion in Note 17 for details on management's financing strategy to restructure our debt in 2016.

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The consolidated financial statements do not include any adjustments related to the recoverability and classification of recorded asset amounts or the amounts and classification of liabilities that might be necessary should we be unable to continue as a going concern.

Significant Accounting Policies

As of January 1, 2016, we retrospectively adopted, for all comparative periods presented, ASU 2015-03, Simplifying the Presentation of Debt Issuance Costs, and ASU 2015-15, Presentation and Subsequent Measurement of Debt Issuance Costs Associated with Line-of-Credit Arrangements. The amendments in ASU 2015-03 require that debt issuance costs related to a recognized debt liability be presented in the balance sheet as a direct deduction from the carrying amount of that debt liability, consistent with debt discounts. In order to conform to the current financial statement presentation, $7.9 million and $8.7 million of unamortized debt issuance costs related to our 2018 Notes have been reclassified from “Other assets” to “Current portion of long-term debt” on the condensed consolidated balance sheets as of March 31, 2016 and December 31, 2015, respectively. The guidance in ASU 2015-15 prescribes that deferred initial up-front commitment fees paid by a borrower to a lender represent the benefit of being able to access capital over the contractual term, and therefore, meet the definition of an asset, while debt issuance costs in the scope of ASU 2015-03 do not. As such, we will continue to present the costs associated with our asset-based revolving credit facility as an asset. Deferred issuance costs associated with our asset-based revolving credit facility of $2.1 million and $2.2 million as of March 31, 2016 and December 31, 2015, respectively, are included in “Other current assets” on the condensed consolidated balance sheets as this debt is considered short-term.

On March 10, 2016, we entered into an amendment to our guaranty and security agreement related to our asset-based revolving credit facility ("ABL Facility"), which is described in further detail in Note 8 under "ABL Facility Amendments." This amendment implemented a daily cash sweep of our collection lockbox and depository accounts, the proceeds of which are required to be applied against the outstanding balance of the ABL Facility. As a result of the sweep occurring one day in arrears, we had an ending balance of $0.2 million in our collection lockbox and depository accounts on March 31, 2016, which we have classified as "Restricted cash" on the condensed consolidated balance sheet as this cash is not available for operations and was subsequently swept by the lender on April 1, 2016.

There have been no other material changes or developments in our significant accounting policies or evaluation of accounting estimates and underlying assumptions or methodologies from those disclosed in our Annual Report on Form 10-K for the year ended December 31, 2015.

Note 2 - Recently Issued Accounting Pronouncements

In May 2014, the Financial Accounting Standards Board ("FASB") issued Accounting Standards Update ("ASU") No. 2014-09, Revenue from Contracts with Customers (Topic 606) (“ASU 2014-09”). The amendments in this update will be added to the ASC as Topic 606, Revenue from Contracts with Customers, and replaces the guidance in Topic 605. The underlying principle of the guidance in this update is that a business or other organization will recognize revenue to depict the transfer of promised goods or services to customers in an amount that reflects what it expects to receive in exchange for the goods or services. This new revenue standard also calls for more detailed disclosures and provides guidance for transactions that weren’t addressed completely, such as service revenue and contract modifications which may be applied retrospectively or modified retrospectively. In August 2015, the FASB issued ASU No. 2015-14, Revenue from Contracts with Customers (Topic 606): Deferral of the Effective Date ("ASU 2015-14"). The guidance in ASU 2015-14 delays the effective date for the new revenue recognition guidance outlined in ASU 2014-09 to reporting periods beginning after December 15, 2017, which for us is the reporting period starting January 1, 2018. We are reviewing the guidance in ASU 2014-09 and have not yet assessed the impact, if any, on our consolidated financial statements and have not determined our method of adoption.

In August 2014, the FASB issued ASU No. 2014-15, Disclosure of Uncertainties about an Entity’s Ability to Continue as a GoingConcern (“ASU 2014-15”). ASU 2014-15 requires management to evaluate whether there is substantial doubt about an entity’s ability to continue as a going concern and to provide related footnote disclosures. In doing so, companies will have reduced diversity in the timing and content of footnote disclosures than under today’s guidance. ASU 2014-15 is effective for reporting periods beginning after December 15, 2016, which for us is the reporting period starting January 1, 2017, with early adoption permitted. We are reviewing the guidance in ASU 2014-15 and evaluating the impact this new guidance may have on our consolidated financial statements.

In February 2016, the FASB issued ASU No. 2016-02, Leases (Topic 842) ("ASU 2016-02"), which requires an entity that is a lessee to recognize the assets and liabilities arising from leases on the balance sheet. This guidance also requires disclosures

9

about the amount, timing and uncertainty of cash flows arising from leases. This guidance is effective for annual reporting periods beginning after December 15, 2018, and interim periods within those annual periods, using a modified retrospective approach. Early adoption of ASU 2016-09 is permitted. We are evaluating the effect that ASU 2016-02 will have on our consolidated financial statements and related disclosures. Based upon the current effective date, the new guidance would first apply to our reporting period starting January 1, 2019.

In March 2016, the FASB issued ASU No. 2016-09, Compensation-Stock Compensation- Improvements to Employee Share-Based Payment Accounting ("ASU 2016-09"), which involves several aspects of the accounting for share-based payment transactions, including the income tax consequences, classification of awards as either equity or liabilities, and classification on the statement of cash flows.  Under the new standard, income tax benefits and deficiencies are to be recognized as income tax expense or benefit in the income statement and the tax effects of exercised or vested awards should be treated as discrete items in the reporting period in which they occur.  An entity should also recognize excess tax benefits regardless of whether the benefit reduces taxes payable in the current period.  Excess tax benefits should be classified along with other income tax cash flows as an operating activity.  In regards to forfeitures, the entity may make an entity-wide accounting policy election to either estimate the number of awards that are expected to vest or account for forfeitures when they occur. ASU 2016-09 is effective for fiscal years beginning after December 15, 2016, including interim periods within that reporting period, however early adoption is permitted.  We are currently evaluating the guidance in ASU 2016-09 to determine our adoption method and the effect it will have on our consolidated financial statements. 

Note 3 - Earnings Per Common Share

Basic and diluted loss per common share from continuing operations, basic and diluted loss per common share from discontinued operations and net loss per basic and diluted common share have been computed using the weighted average number of shares of common stock outstanding during the period.

For the three months endedMarch 31, 2016 and 2015, no shares of common stock underlying stock options, restricted stock, or other common stock equivalents were included in the computation of diluted earnings per common share ("EPS") from continuing operations because the inclusion of such shares would be antidilutive based on the net losses from continuing operations reported for those periods. Accordingly, for the three month periods ended March 31, 2016 and 2015, no shares of common stock underlying stock options, restricted stock, or other common stock equivalents were included in the computations of diluted EPS from income from discontinued operations or diluted EPS from net loss per common share, because such shares were excluded from the computation of diluted EPS from continuing operations for those periods.

The following table presents the calculation of basic and diluted net loss per common share:

	Three Months Ended
	March 31,
	2016			2015
Numerator:
Loss from continuing operations	$	(27,271	)	$	(11,995	)
Income from discontinued operations	55			921
Net loss attributable to common shareholders	$	(27,216	)	$	(11,074	)
Denominator:
Weighted average shares—basic	27,907			27,412
Common stock equivalents	—			—
Weighted average shares—diluted	27,907			27,412
Basic and diluted loss per common share from continuing operations	$	(0.98	)	$	(0.44	)
Basic and diluted income per common share from discontinued operations	—			0.03
Net loss per basic and diluted common share	$	(0.98	)	$	(0.41	)
Anti-dilutive stock-based awards excluded	706			879

See Note 17 on "Subsequent Events Related to Restructuring" for a discussion on the number of shares of common stock we expect to be outstanding after completing the debt restructuring plan.

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Note 4 - Intangible Assets

Intangible assets consist of the following:

	March 31, 2016								December 31, 2015
	Gross Carrying Amount		Accumulated Amortization			Net		Remaining Useful Life (Years)	Gross Carrying Amount		Accumulated Amortization			Net		Remaining Useful Life (Years)
Customer relationships	$	11,731	$	(7,219	)	$	4,512	5.5	$	11,731	$	(6,865	)	$	4,866	6.0
Disposal permits	1,269		(492		)	777		4.9	1,269		(451		)	818		5.2
Customer contracts	17,352		(6,427		)	10,925		10.5	17,352		(6,169		)	11,183		11.0
	$	30,352	$	(14,138	)	$	16,214	8.9	$	30,352	$	(13,485	)	$	16,867	9.3

The remaining weighted average useful lives shown are calculated based on the net book value and remaining amortization period of each respective intangible asset.

Note 5 - Impairment of Long-Lived Assets

Long-lived assets, such as property, plant and equipment and purchased intangibles subject to amortization, are reviewed for impairment whenever events or changes in circumstances indicate that the carrying amount of such assets may not be recoverable. There were no indicators of potential impairment for the three months ended March 31, 2016 and 2015.

If reduced customer activity levels decrease demand for our services for a prolonged period of time, or if we make downward adjustments to our projections, our actual cash flows could be less than our estimated cash flows, which could result in future impairment charges for long-lived assets.

Note 6 - Fair Value Measurements

Measurements

Fair value represents an exit price that would be received to sell an asset or paid to transfer a liability in an orderly transaction between market participants. As such, fair value is a market-based measurement that should be determined based on assumptions that market participants would use in pricing an asset or liability. GAAP establishes a three-tier fair value hierarchy, which prioritizes the inputs used in measuring fair value as follows:

• Level 1 — Observable inputs such as quoted prices in active markets that are accessible at the measurement date for identical assets or liabilities;

• Level 2 — Inputs, other than the quoted prices in active markets, that are observable either directly or indirectly; and

• Level 3 — Unobservable inputs in which there is little or no market data, which require the reporting entity to develop its own assumptions.

Assets and liabilities measured at fair value on a recurring basis and the fair value hierarchy of the valuation techniques we utilized to determine such fair value included significant unobservable inputs (Level 3) and were as follows:

	Fair Value
As of March 31, 2016
Assets - Cost method investment	$	3,169
Liabilities - Contingent consideration	8,500
As of December 31, 2015
Assets - Cost method investment	$	3,169
Liabilities - Contingent consideration	8,628

Contingent Consideration

We are liable for certain contingent consideration payments in connection with the performance of various acquisitions. The fair values of the contingent consideration obligations were determined using a probability-weighted income approach at the

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acquisition date and are revalued at each reporting date or more frequently if circumstances dictate based on changes in the discount periods and rates, changes in the timing and amount of the revenue estimates and changes in probability assumptions with respect to the likelihood of achieving the performance measurements upon which the obligations are based. Contingent consideration is reported as "Current portion of contingent consideration" in the condensed consolidated balance sheets as we expect to make all remaining payments within one year. Changes to the fair value of contingent consideration are recorded as "Other income, net" in the condensed consolidated statements of operations. The fair value measurement is based on significant inputs not observable in the market, which are referred to as Level 3 inputs.

Changes to contingent consideration obligations during the three months endedMarch 31, 2016 and the year ended December 31, 2015 were as follows:

	March 31, 2016			December 31, 2015
Balance at beginning of period	$	8,628		$	9,824
Cash payments	—			(909		)
Changes in fair value of contingent consideration, net	(128		)	(287		)
Current portion of contingent consideration	$	8,500		$	8,628

Other

In addition to our assets and liabilities that are measured at fair value on a recurring basis, we are required by GAAP to measure certain assets and liabilities at fair value on a nonrecurring basis after initial recognition. Generally, assets, liabilities and reporting units are measured at fair value on a nonrecurring basis as a result of impairment reviews and any resulting impairment charge. In connection with our impairment review of long-lived assets, we measure the fair value of our asset groups for those asset groups deemed not recoverable, based on Level 3 inputs consisting of the discounted future cash flows associated with the use and eventual disposition of the asset group.

Cost method investments are measured at fair value on a nonrecurring basis when deemed necessary, using observable inputs such as trading prices of the stock, as well as using discounted cash flows, incorporating adjusted available market discount rate information and our estimates for liquidity risk.

Note 7 - Accrued Liabilities

Accrued liabilities consisted of the following at March 31, 2016 and December 31, 2015:

	March 31, 2016		December 31, 2015
Accrued payroll and employee benefits	$	2,392	$	5,839
Accrued insurance	6,000		5,896
Accrued legal and environmental costs	1,714		1,531
Accrued taxes	1,200		1,514
Accrued interest	18,365		8,516
Accrued operating costs	2,192		4,233
Accrued other	2,389		2,314
Total accrued liabilities	$	34,252	$	29,843

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Note 8 - Debt

Debt consisted of the following at March 31, 2016 and December 31, 2015:

			March 31, 2016							December 31, 2015
	Interest Rate	Maturity Date	Unamortized Deferred Financing Costs (g)		Fair Value of Debt (f)		Carrying Value of Debt			Carrying Value of Debt
ABL Facility (a)	2.94%	Jan. 2018	$	2,109	$	62,273	$	62,273		$	101,832
2018 Notes (b)	9.875%	Apr. 2018	7,862		96,000		400,000			400,000
Vehicle financings (c)	1.52%	Various	—		11,114		11,114			12,303
Note payable (d)	4.25%	Apr. 2019	—		6,063		6,063			6,492
Total debt			$	9,971	$	175,450	479,450			520,627
Original issue discount (e)							(578		)	(639		)
Original issue premium (e)							169			187
Deferred financing costs presented with debt (g)							(7,862		)	(8,708		)
Total debt, net							471,179			511,467
Less: current portion (h)							(463,164		)	(499,709		)
Long-term portion of debt							$	8,015		$	11,758

_____________________

(a) The interest rate presented represents the interest rate on the $100.0 million ABL Facility at March 31, 2016.

(b) The interest rate presented represents the coupon rate on our outstanding $400.0 million aggregate principal amounts of 9.875% Senior Notes due 2018 (the “2018 Notes”), excluding the effects of deferred financing costs, original issue discounts and original issue premiums. Including the impact of these items, the effective interest rate on the 2018 Notes is approximately 11.0%. Interest payments are due semi-annually on April 15 and October 15 of each year.

(c) Vehicle financings consist of capital lease arrangements related to fleet purchases with a weighted-average annual interest rate of approximately 1.52% and which mature in varying installments between 2016 and 2020. Capital lease obligations were $11.1 million and $12.3 million, respectively, at March 31, 2016 and December 31, 2015, respectively.

(d) During the three months ended June 30, 2015, we settled our $11.0 million financing obligation to acquire the remaining 49% interest in AWS from the non-controlling interest holder with a $4.0 million cash payment and a $7.4 million note payable with principal and interest due in equal quarterly installments through April 2019.

(e) The issuance discount represents the unamortized difference between the $250.0 million aggregate principal amount of the 2018 Notes issued in April 2012 and the proceeds received upon issuance (excluding interest and fees). The issuance premium represents the unamortized difference between the proceeds received in connection with the November 2012 issuance of the 2018 Notes (excluding interest and fees) and the $150.0 million aggregate principal amount thereunder.

(f) The estimated fair value of our 2018 Notes is based on quoted market prices as of March 31, 2016. Our ABL Facility and vehicle financings bear interest at rates commensurate with market rates and therefore their respective carrying values approximate fair value.

(g) As discussed previously in Note 1, upon retrospective adoption of ASU 2015-03, we have reclassified the deferred financing costs associated with the 2018 Notes to be presented in the balance sheet as a direct deduction from the carrying amount of the debt liability as of March 31, 2016 and December 31, 2015. In accordance with ASU 2015-15, the deferred financing costs related to the ABL Facility continue to be presented as an asset, and are included in "Other current assets" on the condensed consolidated balance sheets as of March 31, 2016 and December 31, 2015.

(h) As a result of the probability of breaching one of the financial covenants if we are not successful at restructuring our debt (see "Restructuring Support Agreement" later in this section), the carrying value of the ABL Facility and the 2018 Notes was reclassified to current liabilities in the consolidated balance sheet as of March 31, 2016 and December 31, 2015.

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For a discussion of material changes and developments in our debt and its principal terms, see our discussion below regarding the "ABL Facility Amendments" and "Restructuring Support Agreement," in addition to the discussion in Note 17 on "Subsequent Events Related to Restructuring."

Indebtedness

We are highly leveraged and a substantial portion of our liquidity needs result from debt service requirements and from funding our costs of operations and capital expenditures, including acquisitions.

ABL Facility Amendments

On March 10, 2016, we entered into a Consent and Fifth Amendment to Amended and Restated Credit Agreement (the “Fifth ABL Facility Amendment”) and a Third Amendment to Amended and Restated Guaranty and Security Agreement (the "Third GSA Amendment") by and among Wells Fargo Bank, National Association as agent ("Agent"), the Lenders named therein (the “Lenders”), and the Company. Under the Fifth ABL Facility Amendment, the Lenders consented to the inclusion of a “going concern” qualification in the opinion from our registered public accounting firm, which is included in our Annual Report on Form 10-K for the fiscal year ended December 31, 2015. Under the Third GSA Amendment, we consented to and implemented a daily cash sweep of our collection lockbox and depository accounts, the proceeds of which are required to be applied against the outstanding balance of the ABL Facility. The Third GSA Amendment also requires the segregation of all receipts and disbursements in separate bank accounts and limits the end of day balance in our operating bank account to an amount not to exceed $1.0 million.

On March 24, 2016, in connection with the previously announced Restructuring Support Agreement to implement a proposed debt restructuring and recapitalization plan (the “Restructuring”), we entered into a Sixth Amendment to Amended and Restated Credit Agreement (the “Sixth ABL Facility Amendment”) by and among the Agent, the Lenders and the Company. Among other terms and conditions, the Sixth ABL Facility Amendment amends the ABL Facility as follows:

• Reduces the maximum revolver commitments from $125.0 million to $100.0 million;

• Replaces the leverage ratio financial maintenance covenant with a new minimum EBITDA financial maintenance covenant that will be tested monthly;

• Amends the definition of “EBITDA” for purposes of the financial maintenance covenant to provide allowances for certain unusual or non-recurring fees, costs and expenses, with testing monthly beginning in April 2016;

• Amends the definition of “Borrowing Base” (i) to set the eligible equipment advance rates based on net book value at 60% and on Net Orderly Liquidation Value (as defined in the ABL Facility) at 80% and (ii) to cap Borrowing Base availability attributable to eligible equipment at 75%;

• Increases the default rate upon the occurrence and continuation of an event of default from 2% to 4%;

• Increases the applicable margin on LIBOR Rate and Base Rate Loans (each as defined in the ABL Facility) and the unused line fee;

• Eliminates our ability to voluntarily reduce the commitments without termination of the ABL Facility;

• Requires us to apply proceeds from the Restructuring transactions and related agreements to pay down the ABL Facility;

• Amends the definition of “Permitted Disposition” to permit the sale of our equity investment in Underground Solutions, Inc., discussed further in Note 13, and to expand the permitted disposition general basket (which excludes the sale of machinery and equipment in the ordinary course of business) from $5.0 million to $7.5 million;

• Applies a Permitted Disposition Reserve of 50% against our availability for net cash proceeds in excess of $7.5 million made on or after March 10, 2016 for sales specifically related to the Permitted Disposition general basket; and

• Amends certain definitions in connection with the Restructuring transactions, including “Change of Control”, “Permitted Indebtedness”, and “Permitted Liens”.

In addition, we agreed to certain make-whole fees that would be payable to the Lenders upon early termination of the ABL Facility as a result of acceleration, bankruptcy or otherwise, unless amounts outstanding under the ABL Facility are paid in full. In connection with the Sixth ABL Facility Amendment we incurred amendment fees of approximately $0.6 million which were capitalized as deferred financing costs during the three months ended March 31, 2016. Further, we wrote off a portion of the unamortized deferred financing costs associated with our ABL Facility of approximately $0.4 million during the three months ended March 31, 2016.

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See the "ABL Facility Amendments" discussion in Note 17 on "Subsequent Events Related to Restructuring" for details on the Seventh Amendment to Amended and Restated Credit Agreement (the "Seventh ABL Facility Amendment").

Financial Covenants and Borrowing Limitations

The ABL Facility, as amended, requires, and any future credit facilities will likely require, us to comply with specified financial ratios that may limit the amount we can borrow under our ABL Facility. A breach of any of the covenants under the indenture governing the 2018 Notes (the “Indenture”) or the ABL Facility, as applicable, could result in a default. Our ability to satisfy those covenants depends principally upon our ability to meet or exceed certain positive operating performance metrics including, but not limited to, earnings before interest, taxes, depreciation and amortization, or EBITDA, and ratios thereof, as well as certain balance sheet ratios. Any debt agreements we enter into in the future may further limit our ability to enter into certain types of transactions.

The ABL Facility contains certain financial covenants, including a fixed charge coverage ratio and a minimum EBITDA covenant. The fixed charge coverage ratio, which only applies if excess availability under the ABL Facility falls below 12.5% of the maximum revolver amount, requires the ratio of adjusted EBITDA (as defined by the ABL Facility) less capital expenditures to fixed charges (as defined) to be at least 1.1 to 1.0. The fixed charge coverage ratio covenant could have the effect of limiting our availability under the ABL Facility, as additional borrowings would be prohibited if, after giving pro forma effect thereto, we would be in violation of such covenant. The minimum EBITDA covenant requires us to meet a stated year-to-date EBITDA target (as defined by the ABL Facility) beginning April 30, 2016 and continuing each month thereafter through December 31, 2016 at which time the target is reset. As of March 31, 2016, we remained in compliance with our debt covenants and availability was $26.3 million; however, our ratio of adjusted EBITDA to fixed charges was less than 1.1 to 1.0 (as calculated pursuant to the ABL Facility). As such, our net availability was reduced by 12.5% of the maximum revolver amount, or $12.5 million, resulting in approximately $13.8 million of net availability as of March 31, 2016. As of March 31, 2016 we were not required to meet a minimum EBITDA target. For the four months ending April 30, 2016 we are required to have minimum EBITDA of approximately $2.1 million.

During the three months ended March 31, 2016, the Agent for the ABL Facility commenced a borrowing base redetermination involving a valuation of the net orderly liquidation value of our eligible machinery and equipment by a third party specialist. As a result, the lenders applied an $18.0 million reserve against our availability based on the estimated decline to our borrowing base. Due to the application of this reserve against our availability and due to the implementation of the daily sweep of our lockbox and depository bank accounts, we made cumulative payments of $52.0 million during the three months ended March 31, 2016, offset by borrowings of $12.4 million, thus reducing the amount outstanding under the ABL Facility to $62.3 million as of March 31, 2016.

The ABL Facility's borrowing base limitations are based upon eligible accounts receivable and equipment. If the value of our eligible accounts receivable or equipment decreases for any reason, or if some portion of our accounts receivable or equipment is deemed ineligible under the terms of our ABL Facility, the amount we can borrow under the ABL Facility could be reduced. These limitations could have a material adverse impact on our liquidity and financial condition. In addition, the administrative agent for our ABL Facility has the periodic right to commission appraisals of the assets comprising our borrowing base, and we are obligated to reimburse the cost of up to four appraisals including one field examination, during any 12 consecutive months. If an appraisal results in a reduction of the borrowing base, we may be required to repay a portion of the amount outstanding under the ABL Facility in order to remain in compliance with applicable borrowing limitations. At March 31, 2016 we had $13.8 million of net availability under the ABL Facility. During the remainder of 2016, we expect further deterioration to our ABL borrowing base due to declining accounts receivable and downward pressure on the orderly liquidation values of our machinery and equipment. During the three months ended March 31, 2016, we made payments of $52.0 million against the outstanding balance of the ABL Facility a portion of which was made to cover the borrowing base deterioration. There can be no assurance that we will have sufficient cash on hand or other sources of liquidity to make any such future repayments if necessary.

The Indenture governing the 2018 Notes contains restrictive covenants on the incurrence of senior secured indebtedness. To the extent that the fixed charge coverage ratio (as defined in the Indenture) is below 2.0 to 1.0, the Indenture prohibits our incurrence of new senior secured indebtedness under the ABL Facility or any other secured credit facility, at that point in time, to the greater of $150.0 million and the amount of debt as restricted by the secured leverage ratio, which is the ratio of secured debt to EBITDA, of 2.0 to 1.0, as determined pursuant to the Indenture. The 2.0 to 1.0 fixed charge coverage ratio and secured leverage ratio are incurrence covenants, not maintenance covenants. The covenants do not require repayment of existing borrowings incurred previously in accordance with the covenants, but rather limits new borrowings during any such period. As a result of the Sixth ABL Facility Amendment, our ability to incur new borrowings under the ABL Facility is limited to a maximum of $100.0 million irrespective of the permitted availability of up to $150.0 million under the 2018 Notes.

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See the "Exchange Offer" and "Term Loan" discussions in Note 17 on "Subsequent Events Related to Restructuring" for details on the exchange offer for the 2018 Notes, the consent related thereto, the 2021 Notes and the new term loan.

The covenants described above are subject to important exceptions and qualifications. The continued effect of low oil and natural gas prices will negatively impact our compliance with our covenants, and we cannot guarantee that we will satisfy those requirements. If we do not obtain a long term waiver for any breached covenants, such breach would result in a default under the Indenture, ABL Facility or other debt obligations, or any future credit facilities we may enter into, which could allow all amounts outstanding thereunder to be declared immediately due and payable, subject to the terms and conditions of the documents governing such indebtedness. If we were unable to repay the accelerated amounts, our secured lenders could proceed against the collateral granted to them to secure such indebtedness. This would likely in turn trigger cross acceleration and cross-default rights under any other credit facilities and indentures. If the amounts outstanding under the 2018 Notes or any other indebtedness outstanding at such time were to be accelerated or were the subject of foreclosure actions, we cannot guarantee that our assets would be sufficient to repay in full the money owed to the lenders or to our other debt holders. We cannot guarantee that we will be granted waivers or amendments to the Indenture governing the 2018 Notes, the ABL Facility or such other debt obligations if for any reason we are unable to comply with our obligations thereunder. Any such limitations on borrowing under our ABL Facility could have a material adverse impact on our liquidity.

Restructuring Support Agreement

On March 11, 2016, we entered into a Restructuring Support Agreement with holders of more than 80% of the 2018 Notes relating to a restructuring transaction (the “Restructuring”), subject to the satisfaction of certain closing conditions including shareholder approval and minimum noteholder participation, pursuant to which, among other terms and conditions: (i) the exchange up to $368.6 million aggregate principal amount of the 2018 Notes for new second lien secured notes due 2021 (the “2021 Notes”), (ii) the exchange of approximately $31.4 million aggregate principal amount of the 2018 Notes for our common stock at a volume-weighted, market-average conversion price per share which were purchased on the open market during the year ended December 31, 2015 by an entity controlled by Mr. Mark D. Johnsrud, our Chief Executive Officer and Chairman of the board of directors, (iii) a new $24.0 million principal amount “last out” first lien term loan due 2018 (the “Term Loan”) which was funded by certain holders of the 2018 Notes with annual interest at 13% to be paid in-kind by increasing the principal amount payable thereunder and due at maturity, and (iv) the issuance of warrants to purchase up to 15% of our outstanding common stock, at an exercise price of $0.01 per share, to the lenders under the Term Loan and certain holders of the 2018 Notes that participated in the exchange offer. In addition, as part of the Restructuring, Mr. Johnsrud agreed to backstop a $5.0 million equity rights offering (the “Rights Offering”) that is expected to be completed in the second quarter of 2016. The net proceeds of the Term Loan and the Rights Offering are to be used to pay down a portion of the outstanding balance on the ABL Facility, which will be available for re-borrowing subject to any borrowing base limitations and compliance with other applicable terms and conditions under the ABL Facility.

Interest on the 2021 Notes will be payable semiannually on April 15 and October 15 of each year beginning on October 15, 2016, and will be paid in-kind by increasing the principal amount payable thereunder and due at maturity and/or in cash as follows: (i) interest payable on October 15, 2016 will be paid in-kind at a rate of 12.5% per annum, (ii) interest payable in 2017 will be paid 50% in-kind and 50% in cash at a rate of 10% per annum, (iii) interest payable on April 15, 2018 and thereafter will be paid in cash at a rate of 10% per annum until maturity. The liens securing the 2021 Notes will be contractually subordinated to the liens on such assets securing the ABL Facility and the Term Loan. Both the conversion of Mr. Johnsrud’s 2018 Notes to equity and the Rights Offering are subject to shareholder approval of amendments to our Amended and Restated Certificate of Incorporation, as amended ("Certificate of Incorporation"), to provide for the issuance of sufficient additional shares of common stock.

As described previously under "ABL Facility Amendments," on March 24, 2016 in connection with the Restructuring we entered into the Sixth ABL Facility Amendment. See Note 17 on "Subsequent Events Related to Restructuring" for a discussion of material changes and developments after March 31, 2016 with respect to the Restructuring.

The Restructuring and the transactions contemplated thereby are subject to additional terms and conditions. We provide no assurances that we will be able to successfully consummate the Restructuring or other alternatives to restructure our existing indebtedness, in which case we may need to restructure under the Bankruptcy Code.

Note 9 - Restructuring and Exit Costs

In March 2015, we initiated a plan to restructure our business in certain shale basins and reduce costs, including an exit from the Mississippian ("MidCon") shale area and the Tuscaloosa Marine Shale logistics business. Additionally, we closed certain yards within the Northeast and Southern divisions and transferred many of the related assets to our other operating locations,

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primarily in the Eagle Ford shale basin. The total costs of the restructuring recognized in 2015 were approximately $7.1 million. There were no costs incurred during the three months endedMarch 31, 2016. We recorded $0.7 million during the three months endedMarch 31, 2015.

The charges are characterized as "Other, net" in the accompanying condensed consolidated statements of operations. Such costs consisted of the following:

	Three Months Ended		Three Months Ended
	March 31, 2016		March 31, 2015
Severance and termination benefits	$	—	$	240
Asset impairment charge	—		—
Contract termination costs and exit costs	—		443
Total restructuring and exit costs	$	—	$	683

For the three months endedMarch 31, 2015, approximately $0.6 million and $0.1 million of the total charge was recorded in the Southern and Northeast operating segments, respectively. The liability totaled approximately $0.2 million as of March 31, 2016 and is included as "Accrued liabilities" in the condensed consolidated balance sheets. A rollforward of the restructuring and exit cost accruals from December 31, 2015 through March 31, 2016 is as follows:

	Employee Termination Costs (a)		Lease Exit Costs (b)			Other Exit Costs (c)		Total
Restructuring and exit costs accrued at December 31, 2015	$	—	$	180		$	—	$	180
Restructuring and exit-related costs	—		—			—		—
Cash payments	—		(12		)	—		(12		)
Restructuring and exit costs accrued at March 31, 2016	$	—	$	168		$	—	$	168

_____________________

(a) Employee termination costs consist primarily of severance and related costs.

(b) Lease exit costs consist primarily of costs that will continue to be incurred under non-cancellable operating leases for their remaining term without benefit to us.

(c) Other exit costs include costs related to the movement of vehicles and rental fleet in connection with the exit from certain shale areas.

Note 10 - Income Taxes

The following table shows the components of the income tax benefit for the periods indicated:

	Three Months Ended
	March 31,
	2016			2015
Current income tax (expense) benefit	$	(30	)	$	25
Deferred income tax expense	(25		)	(1		)
Total income tax (expense) benefit	$	(55	)	$	24

The effective income tax expense rate for the three months endedMarch 31, 2016 was 0.2%, which differs from the federal statutory benefit rate of 35.0% primarily due to the increase in the valuation allowance on deferred tax assets resulting from current year losses.

The effective income tax benefit rate for the three months endedMarch 31, 2015 was 0.2%, which differs from the federal statutory rate of 35.0% primarily due to the increase in the valuation allowance on deferred tax assets resulting from current year losses.

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We have significant deferred tax assets, consisting primarily of net operating losses (“NOLs”), which have a limited life, generally expiring between the years 2029 and 2036 and capital losses, which have a five year carryforward expiring in 2020. We regularly assess the available positive and negative evidence to estimate if sufficient future taxable income will be generated to use the existing deferred tax assets. A significant piece of objective negative evidence evaluated was the cumulative losses incurred this year and in recent years. Such objective evidence limits the ability to consider other subjective evidence such as our projections for future taxable income.

In light of our continued losses, at March 31, 2016 we determined that our deferred tax liabilities were not sufficient to fully realize our deferred tax assets. Accordingly, a valuation allowance continues to be required against the portion of our deferred tax assets that is not offset by deferred tax liabilities. Accordingly, we expect our effective income tax rate to be near zero for 2016.

Note 11 - Share-based Compensation

We may grant stock options, stock appreciation rights, restricted common stock and restricted stock units, performance shares and units, other stock-based awards and cash-based awards to our employees, directors, consultants and advisors pursuant to the Nuverra Environmental Solutions, Inc. 2009 Equity Incentive Plan (as amended, the “2009 Plan”).

The total grants awarded during the three months endedMarch 31, 2016 and March 31, 2015 are presented in the table below:

	Three Months Ended
	March 31,
	2016	2015
Stock option grants	—	703
Restricted stock grants	—	—
Restricted stock unit grants	1	151
Total grants under the 2009 Plan	1	854

The total stock-based compensation cost included in "General and administrative expenses" in the accompanying condensed consolidated statements of operations was as follows:

	Three Months Ended
	March 31,
	2016		2015
Stock options	$	84	$	148
Restricted stock	85		101
Restricted stock units	199		540
Total stock-based compensation expense	$	368	$	789

Note 12 - Legal Matters

Environmental Liabilities

We are subject to the environmental protection and health and safety laws and related rules and regulations of the United States and of the individual states, municipalities and other local jurisdictions where we operate. Our continuing operations are subject to rules and regulations promulgated by the Texas Railroad Commission, the Texas Commission on Environmental Quality, the Louisiana Department of Natural Resources, the Louisiana Department of Environmental Quality, the Ohio Department of Natural Resources, the Pennsylvania Department of Environmental Protection, the North Dakota Department of Health, the North Dakota Industrial Commission, Oil and Gas Division, the North Dakota State Water Commission, the Montana Department of Environmental Quality and the Montana Board of Oil and Gas, among others. These laws, rules and regulations address environmental, health and safety and related concerns, including water quality and employee safety. We have installed safety, monitoring and environmental protection equipment such as pressure sensors and relief valves, and have established reporting and responsibility protocols for environmental protection and reporting to such relevant local environmental protection departments as required by law.

We believe we are in material compliance with all applicable environmental protection laws and regulations in the United States and the states in which we operate. We believe that there are no unrecorded liabilities as of the periods reported herein in

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connection with our compliance with applicable environmental laws and regulations. The condensed consolidated balance sheets at March 31, 2016 and December 31, 2015 included accruals totaling $0.5 million and $0.3 million, respectively, for various environmental matters.

Litigation

There are various lawsuits, claims, investigations and proceedings that have been brought or asserted against us, which arise in the ordinary course of business, including actions with respect to securities and shareholder class actions, personal injury, vehicular and industrial accidents, commercial contracts, legal and regulatory compliance, securities disclosure, labor and employment, and employee benefits and environmental matters, the more significant of which are summarized below. We record a provision for these matters when it is both probable that a liability has been incurred and the amount of the loss can be reasonably estimated. Any provisions are reviewed at least quarterly and are adjusted to reflect the impact and status of settlements, rulings, advice of counsel and other information and events pertinent to a particular matter.

We believe that we have valid defenses with respect to legal matters pending against us. Based on our experience, we also believe that the damage amounts claimed in the lawsuits disclosed below are not necessarily a meaningful indicator of our potential liability. Litigation is inherently unpredictable, and it is possible that our results of operations or cash flow could be materially affected in any particular period by the resolution of one or more of the legal matters pending against us. We do not expect that the outcome of other current claims and legal actions not discussed below will have a material adverse effect on our consolidated financial position, results of operations or cash flows.

Shareholder Litigation

2013 Class Action

In September 2013, two separate but substantially similar putative class action lawsuits were commenced in Federal court against us and certain of our current and former officers and directors alleging that we, along with the individual defendants, made certain material misstatements and/or omissions relating to our operations and financial condition which caused the price of our shares to fall. By order dated October 29, 2013, the two putative class actions were consolidated and a consolidated complaint was filed. Defendants filed a motion to dismiss these claims in May 2014, and such motion was granted by the Court on November 17, 2014, whereby the forgoing class action was dismissed without prejudice. Plaintiffs were permitted by the Court to file a motion to amend the complaint and did so on December 8, 2014. Defendants filed their opposition to plaintiffs' motion to amend the complaint on December 22, 2014. On March 12, 2015, the Court issued an order denying plaintiffs' motion to amend the complaint as to certain claims, but granting plaintiffs' motion as to other claims. Plaintiffs filed an amended complaint on March 19, 2015, and on March 23, 2015, we filed a motion to dismiss the amended complaint for failure to comply with the Court’s March 12, 2015 order. Both parties filed subsequent pleadings. On June 24, 2015, the Court granted our motion to dismiss plaintiffs' amended consolidated class action complaint and dismissed the case with prejudice. On July 24, 2015, plaintiffs filed a notice of appeal to the Ninth Circuit Court of Appeals. The appeal was voluntarily dismissed by plaintiffs on November 5, 2015, thereby concluding this litigation.

2013 Derivative Cases

In September and October 2013, three separate but substantially similar shareholder derivative lawsuits were commenced in Federal court against us and certain of our current and former officers and directors alleging that members of our board of directors failed to prevent the issuance of certain misstatements and omissions and asserting claims for breach of fiduciary duty, waste of corporate assets and unjust enrichment. Defendants filed a motion to dismiss these claims in February 2014. On September 15, 2014, the Court dismissed the consolidated cases following its dismissal of the consolidated complaint and plaintiffs' failure to amend. Also in October 2013, two identical shareholder derivative lawsuits were commenced in Arizona state court against us and certain of our current officers and directors alleging breach of fiduciary duty, waste of corporate assets and unjust enrichment. By order dated January 28, 2014, these two actions were consolidated, and defendants filed a motion to dismiss these claims in June 2014. On July 22, 2014, the parties filed a joint stipulation to dismiss these cases with prejudice, which was granted by the Court on August 1, 2014, and no settlement payment was made. In the first quarter of 2015, we received a written demand from one of the plaintiffs in the derivative lawsuits requesting that the board of directors commence an independent investigation of certain matters and take appropriate action to recover for us any damages to which we may be entitled as a result of alleged breaches of fiduciary duties by certain of our current and former officers and directors. The board appointed a special committee to conduct such an investigation, which it did with the assistance of independent professionals. The investigation concluded with a finding that there had been no actionable wrongdoing and a recommendation that the Company not act further with respect to the shareholder demand.

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AWS Arbitration Demand

On April 28, 2015, the holder of the non-controlling interest in AWS issued to us a Demand for Arbitration pursuant to the terms of the AWS operating agreement, relating to alleged breaches by us of certain of our obligations under the operating agreement. We entered into a settlement of this matter with the non-controlling interest holder in June 2015 whereby we purchased the remaining interest in AWS for $4.0 million in cash and a $7.4 million note payable with principal and interest due in equal quarterly installments through April 2019. If we fail to meet the payment terms of this obligation, or if we become insolvent or declare bankruptcy, all remaining outstanding balances on the note payable would become immediately due and payable.  If such an acceleration were to occur, we would request a waiver from the non-controlling interest holder, but there can be no assurance that such waiver would be forthcoming or that we would have sufficient available liquidity to make any required repayment.

Note 13 - Related Party and Affiliated Company Transactions

Termination of Aircraft Lease Agreement

During the three months ended March 31, 2016, the aircraft lease agreement with an entity owned and controlled by Mark D. Johnsrud, our Chief Executive Officer and Chairman of our board of directors, was terminated. During the three months ended March 31, 2016, reimbursements payable to the entity in exchange for use of the aircraft, in the aggregate amount of $45 thousand, were paid in full. There were no remaining reimbursements payable to the entity as of March 31, 2016.

There have been no significant changes to the other related party transactions with Mr. Johnsrud for apartment rentals, purchases of fresh water for resale and use of land where certain of our saltwater disposal wells are situated as described in Note 19 to the consolidated financial statements in our 2015 Annual Report on Form 10-K.

Cost Method Investment - Underground Solutions, Inc.

On February 18, 2016, Aegion Corporation (or "Aegion") announced the completion of the acquisition of Underground Solutions, Inc. (or "UGSI"), an entity in which we held an approximate 7% equity interest, whereby Aegion paid approximately $85.0 million to acquire UGSI. Our total proceeds will be approximately $5.2 million. In April of 2016, we received proceeds of $5.0 million, with the remaining $0.2 million of proceeds held back and deposited in an escrow account. We will be entitled to these additional proceeds, subject to certain working capital adjustments and indemnity claims, over the course of the next 18 months. The net proceeds of $5.2 million exceeded our cost basis of approximately $3.2 million. As such, we will recognize a net gain on the sale of approximately $1.9 million, which includes approximately $0.1 million in costs incurred by us in the closing, during the three months ended June 30, 2016.

Note 14 - Segments

We evaluate business segment performance based on income (loss) before income taxes exclusive of corporate general and administrative costs and interest expense, which are not allocated to the segments. Our shale solutions business is comprised of three operating divisions, which we consider to be operating and reportable segments of our continuing operations: (1) the Northeast division comprising the Marcellus and Utica Shale areas, (2) the Southern division comprising the Haynesville, Eagle Ford, and Permian Basin Shale areas and (3) the Rocky Mountain division comprising the Bakken Shale area. Corporate/Other includes certain corporate costs and certain other corporate assets.

As discussed in Note 9, in March 2015, we initiated a plan to restructure our business in certain shale basins and reduce costs, including an exit from the Mississippian (or "MidCon") shale area. As a result, revenues for the MidCon shale area were included in the Southern division and costs associated with revenue generating activities of the MidCon shale area were included in the Southern division for the three months ended March 31, 2015. As a result of our restructuring in the MidCon, some remaining operating expenses for shut-down activities, as well as depreciation and amortization, were included in the Southern division during the three months March 31, 2016.

20

Financial information for our reportable segments related to continuing operations is presented below.

	Rocky Mountain			Northeast			Southern			Corporate/ Other			Total
Three months ended March 31, 2016
Revenue	$	24,905		$	12,777		$	9,293		$	—		$	46,975
Direct operating expenses	19,558			11,568			7,491			—			38,617
General and administrative expenses	1,852			1,190			920			3,490			7,452
Depreciation and amortization	8,079			3,883			3,814			69			15,845
Operating loss	(4,584		)	(3,864		)	(2,932		)	(3,559		)	(14,939		)
Loss from continuing operations before income taxes	(4,652		)	(3,931		)	(2,926		)	(15,707		)	(27,216		)
As of March 31, 2016
Total assets (a)	246,530			72,916			123,028			17,639			460,113
Three months ended March 31, 2015
Revenue	69,410			27,313			22,389			—			119,112
Direct operating expenses	48,425			21,496			18,078			—			87,999
General and administrative expenses	2,056			1,904			2,078			6,662			12,700
Depreciation and amortization	8,737			3,927			4,648			170			17,482
Operating income (loss)	10,192			(98		)	(3,014		)	(6,832		)	248
Income (loss) from continuing operations before income taxes	10,097			13			(2,935		)	(19,194		)	(12,019		)
As of December 31, 2015
Total assets (a)	263,871			76,472			128,482			53,794			522,619

_____________________

(a)    Total assets exclude intercompany receivables eliminated in consolidation.

Note 15 - Discontinued Operations

Our former industrial solutions operating and reportable segment, Thermo Fluids, Inc. ("TFI"), has been classified as discontinued operations since the sale process with various prospective acquirers began in fourth quarter of 2013. In February, 2015, we entered into a definitive agreement with Safety-Kleen, Inc. ("Safety-Kleen"), a subsidiary of Clean Harbors, Inc., whereby Safety-Kleen agreed to acquire TFI for $85.0 million in an all-cash transaction, subject to working capital adjustments.

On April 11, 2015, we completed the TFI disposition with Safety-Kleen as contemplated by the previously disclosed purchase agreement. Pursuant to the purchase agreement, $4.3 million of the purchase price was deposited into an escrow account to satisfy our indemnification obligations under the purchase agreement and is captured as "Restricted cash" in our condensed consolidating balance sheet. Any remaining balance in the escrow account will be released to us 18 months following the closing date, unless both parties mutually agree to release the remaining balance prior to such date. Pursuant to the purchase agreement, the purchase price paid at closing was adjusted based upon an estimated working capital adjustment, which is subject to post-closing reconciliation, to reflect TFI’s actual working capital (calculated in accordance with the purchase agreement) on the closing date. After giving effect to the indemnity escrow, the estimated working capital adjustment and the payment of transaction fees and other expenses, the amount of net cash proceeds used to reduce the outstanding balance under the ABL Facility on the closing date was approximately $74.6 million. The post-closing working capital reconciliation is still in process and may result in an increase or decrease in our final net cash proceeds and the final loss on the sale of TFI.

We classified TFI as discontinued operations in our condensed consolidated statements of operations for the three months endedMarch 31, 2016 and 2015.     We recorded income related to the sale of TFI of $0.1 million and $0.9 million as a component of "Income from discontinued operations, net of income taxes" in our consolidated statements of operations for the three months endedMarch 31, 2016 and 2015, respectively.

The following table provides selected financial information of discontinued operations related to TFI (and includes TFI's results through the sale on April 11, 2015):

21

	Three Months Ended
	March 31,
	2016		2015
Revenue	$	—	$	17,497
Income from discontinued operations before income taxes	$	—	$	1,186
Income tax expense	—		(265		)
Income from discontinued operations - before sale	$	—	$	921
Income on sale of TFI	55		—
Income from discontinued operations	$	55	$	921

Note 16 - Subsidiary Guarantors

Our obligations under the 2018 Notes are jointly and severally, fully and unconditionally guaranteed by certain of our subsidiaries. Pursuant to the terms of the Indenture, the guarantees are full and unconditional, but are subject to release under the following circumstances:

• in connection with any sale, disposition or transfer of all or substantially all of the assets to a person that is not the Company or a subsidiary guarantor;

• in connection with any sale, disposition or transfer of all of the capital stock of that subsidiary guarantor to a person that is not the Company or a subsidiary guarantor;

• if we designate any restricted subsidiary that is a subsidiary guarantor to be an unrestricted subsidiary; or

• upon legal defeasance or the discharge of our obligations under the Indenture.

Although the guarantees are subject to release under the above described circumstances, we have concluded they are still deemed full and unconditional for purposes of Rule 3-10 of Regulation S-X because these circumstances are customary, and accordingly, we concluded that we may rely on Rule 3-10 of Regulation S-X, as the other requirements of Rule 3-10 have been met.

See "Subsequent Events Related to Restructuring" in Note 17 for details on additional guaranty obligations for our subsidiaries.

The following tables present consolidating financial information for Nuverra Environmental Solutions, Inc. (“Parent”) and its 100% wholly-owned subsidiaries (the “Guarantor Subsidiaries”) as of March 31, 2016 and December 31, 2015 and for the three months endedMarch 31, 2016 and 2015. In June 2015, we purchased the remaining interest in AWS, previously a 51% owned non-guarantor subsidiary, and have recast the tables to reflect AWS as a part of the Guarantor Subsidiaries for the three months endedMarch 31, 2015. During the three months ended December 31, 2015, Nuverra Rocky Mountain Pipeline, LLC (or "RMP") was released from all obligations including as guarantor. However, because RMP's individual results are not material as there are no active contracts for new pipelines, we have not separately presented RMP as a Non-Guarantor, but rather continued to include RMP in the Guarantor Subsidiaries column. These condensed consolidating financial statements have been prepared from our financial information on the same basis of accounting as our condensed consolidated financial statements. The principal elimination entries relate to investments in subsidiaries and intercompany balances and transactions.

22

CONDENSED CONSOLIDATING BALANCE SHEET

MARCH 31, 2016

(Unaudited)

	Parent			Guarantor Subsidiaries			Eliminations			Consolidated
ASSETS
Cash and cash equivalents	$	808		$	(778	)	$	—		$	30
Restricted cash	4,250			200			—			4,450
Accounts receivable, net	—			30,857			—			30,857
Deferred income taxes	—			—			—			—
Other current assets	7,275			5,195			—			12,470
Total current assets	12,333			35,474			—			47,807
Property, plant and equipment, net	2,546			389,229						391,775
Equity investments	32,033			576			(28,864		)	3,745
Intangible assets, net	—			16,214			—			16,214
Other	405,619			80,677			(485,724		)	572
Total assets	$	452,531		$	522,170		$	(514,588	)	$	460,113
LIABILITIES AND SHAREHOLDERS' DEFICIT
Accounts payable	$	1,610		$	5,659		$	—		$	7,269
Accrued liabilities	23,048			11,204			—			34,252
Current portion of contingent consideration	—			8,500			—			8,500
Current portion of long-term debt	454,003			9,161			—			463,164
Total current liabilities	478,661			34,524			—			513,185
Deferred income taxes	(32,473		)	32,768			—			295
Long-term portion of debt	—			8,015			—			8,015
Other long-term liabilities	71,460			417,999			(485,724		)	3,735
Total shareholders' deficit	(65,117		)	28,864			(28,864		)	(65,117		)
Total liabilities and shareholders' deficit	$	452,531		$	522,170		$	(514,588	)	$	460,113

23

CONDENSED CONSOLIDATING BALANCE SHEET

DECEMBER 31, 2015

	Parent			Guarantor Subsidiaries			Eliminations			Consolidated
ASSETS
Cash and cash equivalents	$	40,660		$	(1,351	)	$	—		$	39,309
Restricted cash	4,250			—			—			4,250
Accounts receivable, net	—			42,188			—			42,188
Other current assets	2,654			6,080			—			8,734
Total current assets	47,564			46,917			—			94,481
Property, plant and equipment, net	2,609			403,579			—			406,188
Equity investments	43,542			581			(40,373		)	3,750
Intangible assets, net	—			16,867			—			16,867
Other	404,620			72,137			(475,424		)	1,333
Total assets	$	498,335		$	540,081		$	(515,797	)	$	522,619
LIABILITIES AND SHAREHOLDERS' DEFICIT
Accounts payable	$	172		$	6,735		$	—		$	6,907
Accrued liabilities	13,824			16,019			—			29,843
Current portion of contingent consideration	—			8,628			—			8,628
Current portion of long-term debt	492,671			7,038			—			499,709
Total current liabilities	506,667			38,420			—			545,087
Deferred income taxes	(32,488		)	32,758			—			270
Long-term portion of debt	—			11,758			—			11,758
Other long-term liabilities	62,427			416,772			(475,424		)	3,775
Total shareholders' deficit	(38,271		)	40,373			(40,373		)	(38,271		)
Total liabilities and shareholders' deficit	$	498,335		$	540,081		$	(515,797	)	$	522,619

24

CONDENSED CONSOLIDATING STATEMENTS OF OPERATIONS

THREE MONTHS ENDED MARCH 31, 2016

(Unaudited)

	Parent			Guarantor Subsidiaries			Eliminations		Consolidated
Revenue	$	—		$	46,975		$	—	$	46,975
Costs and expenses:
Direct operating expenses	—			38,617			—		38,617
General and administrative expenses	3,490			3,962			—		7,452
Depreciation and amortization	69			15,776			—		15,845
Total costs and expenses	3,559			58,355			—		61,914
Operating loss	(3,559		)	(11,380		)	—		(14,939		)
Interest expense, net	(11,758		)	(287		)	—		(12,045		)
Other income, net	—			163			—		163
Loss from equity investments	(11,532		)	(5		)	11,532		(5		)
Loss on extinguishment of debt	(390		)	—			—		(390		)
Loss from continuing operations before income taxes	(27,239		)	(11,509		)	11,532		(27,216		)
Income tax expense	(32		)	(23		)	—		(55		)
Loss from continuing operations	(27,271		)	(11,532		)	11,532		(27,271		)
Income from discontinued operations, net of income taxes	55			—			—		55
Net loss attributable to common shareholders	$	(27,216	)	$	(11,532	)	$	11,532	$	(27,216	)

25

CONDENSED CONSOLIDATING STATEMENTS OF OPERATIONS

THREE MONTHS ENDED MARCH 31, 2015

(Unaudited)

	Parent			Guarantor Subsidiaries			Eliminations			Consolidated
Revenue	$	—		$	119,112		$	—		$	119,112
Costs and expenses:
Direct operating expenses	—			87,999			—			87,999
General and administrative expenses	6,662			6,038			—			12,700
Depreciation and amortization	170			17,312			—			17,482
Other, net	—			683			—			683
Total costs and expenses	6,832			112,032			—			118,864
Operating (loss) income	(6,832		)	7,080			—			248
Interest expense, net	(12,362		)	(226		)	—			(12,588		)
Other income, net	—			342			—			342
Income (loss) from equity investments	8,083			(21		)	(8,083		)	(21		)
(Loss) income from continuing operations before income taxes	(11,111		)	7,175			(8,083		)	(12,019		)
Income tax benefit (expense)	37			(13		)	—			24
(Loss) income from continuing operations	(11,074		)	7,162			(8,083		)	(11,995		)
Income from discontinued operations, net of income taxes	—			921			—			921
Net (loss) income attributable to common shareholders	$	(11,074	)	$	8,083		$	(8,083	)	$	(11,074	)

26

CONDENSED CONSOLIDATING STATEMENT OF CASH FLOWS

THREE MONTHS ENDED MARCH 31, 2016

(Unaudited)

	Parent			Guarantor Subsidiaries			Consolidated
Cash flows from operating activities:
Net cash provided by operating activities from continuing operations	$	115		$	2,450		$	2,565
Net cash used in operating activities from discontinued operations	—			—			—
Net cash provided by operating activities	115			2,450			2,565
Cash flows from investing activities:
Proceeds from the sale of property and equipment	25			1,424			1,449
Purchase of property, plant and equipment	—			(1,421		)	(1,421		)
Increase in restricted cash	—			(200		)	(200		)
Net cash provided by (used in) investing activities from continuing operations	25			(197		)	(172		)
Net cash used in investing activities from discontinued operations	—			—			—
Net cash provided by (used in) investing activities	25			(197		)	(172		)
Cash flows from financing activities:
Proceeds from revolving credit facility	12,409			—			12,409
Payments on revolving credit facility	(51,968		)	—			(51,968		)
Payments for deferred financing costs	(426		)	—			(426		)
Payments on vehicle financing and other financing activities	(7		)	(1,680		)	(1,687		)
Net cash used in financing activities from continuing operations	(39,992		)	(1,680		)	(41,672		)
Net cash used in financing activities from discontinued operations	—			—			—
Net cash used in financing activities	(39,992		)	(1,680		)	(41,672		)
Net (decrease) increase in cash	(39,852		)	573			(39,279		)
Cash and cash equivalents - beginning of period	40,660			(1,351		)	39,309
Cash and cash equivalents - end of period	808			(778		)	30
Less: cash and cash equivalents of discontinued operations - end of period	—			—			—
Cash and cash equivalents of continuing operations - end of period	$	808		$	(778	)	$	30

27

CONDENSED CONSOLIDATING STATEMENT OF CASH FLOWS

THREE MONTHS ENDED MARCH 31, 2015

(Unaudited)

	Parent			Guarantor Subsidiaries			Consolidated
Cash flows from operating activities:
Net cash provided by operating activities from continuing operations	$	27,658		$	7,092		$	34,750
Net cash provided by operating activities from discontinued operations	—			867			867
Net cash provided by operating activities	27,658			7,959			35,617
Cash flows from investing activities:
Proceeds from the sale of property and equipment	255			1,713			1,968
Purchase of property, plant and equipment	—			(6,163		)	(6,163		)
Net cash provided by (used in) investing activities from continuing operations	255			(4,450		)	(4,195		)
Net cash used in investing activities from discontinued operations	—			(161		)	(161		)
Net cash provided by (used in) investing activities	255			(4,611		)	(4,356		)
Cash flows from financing activities:
Payments on revolving credit facility	(7,000		)	—			(7,000		)
Payments on vehicle financing and other financing activities	(75		)	(1,361		)	(1,436		)
Net cash used in financing activities from continuing operations	(7,075		)	(1,361		)	(8,436		)
Net cash provided by financing activities from discontinued operations	—			38			38
Net cash used in financing activities	(7,075		)	(1,323		)	(8,398		)
Net increase in cash	20,838			2,025			22,863
Cash and cash equivalents - beginning of period	13,801			1,615			15,416
Cash and cash equivalents - end of period	34,639			3,640			38,279
Less: cash and cash equivalents of discontinued operations - end of period				(2,793		)	(2,793		)
Cash and cash equivalents of continuing operations - end of period	$	34,639		$	847		$	35,486

28

Note 17 - Subsequent Events Related to Restructuring

On April 15, 2016, we closed (i) our exchange offer (the “Exchange Offer”) relating to our 2018 Notes, (ii) a new $24.0 million principal amount first-lien term loan due 2018 (the “Term Loan”) and (iii) related transactions as part of a comprehensive restructuring of our outstanding indebtedness pursuant to the Restructuring Support Agreement.

Exchange Offer

Pursuant to the Exchange Offer, we offered to exchange our new Second-Lien Notes Due 2021 (the “2021 Notes”) and shares of our common stock at a conversion price per share of $0.32 (the “Conversion Price”) for any and all of our 2018 Notes validly tendered and not properly withdrawn at or prior to the expiration date, with the exception of approximately $31.4 million in principal 2018 Notes owned by an entity controlled by Mark D. Johnsrud, our Chairman of the Board and Chief Executive Officer. We settled the Exchange Offer on April 15, 2016 by delivering to tendering holders of the 2018 Notes (i) $327.2 million in aggregate principal amount of the new 2021 Notes to those tendering holders electing to exchange for 2021 Notes and $0.9 million in shares of common stock converted at the Conversion Price to those tendering holders electing to exchange for common stock and (ii) a pro rata share (based on the aggregate principal amount of the 2018 Notes validly tendered) of penny warrants sufficient to purchase 10% of shares of our common stock (the "Exchange Warrants"). In addition, the 2018 Notes held by an entity controlled by Mr. Johnsrud were cancelled and will be converted to shares of our common stock at the Conversion Price upon shareholder approval of an increase in the number of shares of our common stock authorized to be issued by the Company (the "Johnsrud Note Conversion").

In connection with the issuance of the new 2021 Notes, we entered into a new Indenture that governs the terms of the new 2021 Notes, dated as of April 15, 2016, between the Company, Wilmington Savings Fund Society, FSB, as Trustee, and the Guarantors party thereto. Pursuant to the new Indenture, the 2021 Notes will mature on April 15, 2021. Interest will be paid in kind semi-annually by increasing the principal amount payable and due at maturity and/or in cash as follows: interest payable on October 15, 2016 will be paid in kind at an annual rate of 12.5%; interest payable after October 15, 2016 but on or before April 15, 2018 will be paid at a rate of 10% with 50% in kind and 50% in cash; interest payable after April 15, 2018 will be paid in cash at a rate of 10% until maturity. As a result, our annual cash interest payment obligations have been reduced by approximately $17.8 million for the remainder of 2016, $17.9 million for 2017 and $8.6 million through April 15, 2018. The 2021 Notes are secured by junior liens on the same collateral as our ABL Facility and rank equal in right of payment to all senior indebtedness and senior to all subordinated indebtedness of the Company. The 2021 Notes are guaranteed by our subsidiaries.

Upon settlement of the Exchange Offer, there remained outstanding approximately $40.4 million aggregate principal amount of 2018 Notes. Ongoing semi-annual interest expense with respect to the remaining 2018 Notes is approximately $2.0 million. In addition, based on the completion of the Exchange Offer, consents from each exchanging holder of the 2018 Notes for the waiver of certain provisions of the 2018 Notes Indenture became effective. The consents, among other things, waive substantially all of the restrictive covenants in the 2018 Notes Indenture and potential defaults arising from non-compliance with such waived covenants.

Term Loan

Concurrent to the Exchange Offer we entered into the Term Loan funded by certain holders of the 2018 Notes that were also parties to the Restructuring Support Agreement. The Term Loan accrues interest at a rate of 13% per annum to be paid in kind by increasing the principal amount payable thereunder. Principal including the paid in kind interest is due April 15, 2018. The Term Loan is subject to a minimum EBITDA covenant that is identical in all respects to the minimum EBITDA covenant applicable to the ABL Facility. To the extent actual EBITDA (as defined by the Term Loan) falls short of the minimum EBITDA targets, the Term Loan accrues interest at rate of 17%. The Term Loan is secured by junior liens on the same collateral as our ABL Facility and guaranteed by our subsidiaries. In connection with the Term Loan, we entered into a warrant agreement with the lenders under the Term Loan, pursuant to which, as a commitment fee for entering into the Term Loan, the lenders received warrants to purchase up to 5% of our then-outstanding stock at an exercise price of $0.01 per share (the "Term Loan Warrants"). The Exchange Warrants and the Term Loan Warrants (collectively, the "Warrants") contain anti-dilution provisions which adjust the number of shares issuable upon exercise thereof in certain circumstances, including adjustments intended to preserve the proportion of outstanding common stock into which such Warrants are exercisable after giving effect to the Johnsrud Note Conversion and the Rights Offering described below.

29

Proceeds from the Term Loan were applied to pay down a portion of the outstanding balance of the ABL Facility and were reborrowed by the Company to fund the scheduled interest payment on the 2018 Notes and pay related transaction fees and expenses.

ABL Facility Amendments

On April 15, 2016, we also entered into a Seventh Amendment to Amended and Restated Credit Agreement, dated April 15, 2016 (the “Seventh ABL Facility Amendment”), by and among the Agent, the Lenders and the Company to make conforming amendments in connection with the restructuring transactions. Among other terms and conditions, the Seventh Amendment amends the ABL Facility to: (i) require that the we apply excess proceeds from asset sales to pay down the ABL Facility; (ii) prohibit us from optionally prepaying or acquiring other indebtedness, making any payment on subordinated indebtedness, or amending certain agreements and documents; and (iii) amend certain definitions in the ABL Facility.

Rights Offering

As part of the debt restructuring plan, we will also pursue an equity rights offering (the “Rights Offering”), in which all holders of our common stock will be granted the right to participate. Each shareholder who participates in the Rights Offering will have the right to subscribe for a pro rata share of $5.0 million of common stock exercisable at a 20% discount to the Conversion Price. We expect to complete the Rights Offering in the second quarter of 2016, subject to shareholder approval of an amendment to our Certificate of Incorporation to provide for the issuance of sufficient additional shares of common stock. We expect to hold a Special Meeting of Shareholders in the second quarter of 2016 to approve the amendment to our Certificate of Incorporation. Additionally, Mr. Johnsrud has agreed to backstop the proposed Rights Offering by committing to purchase rights that are not exercised by other shareholders in order to ensure that the Company receives the additional liquidity. On April 15, 2016, the Company and Mr. Johnsrud entered into an Escrow Agreement, pursuant to which Mr. Johnsrud deposited $5.0 million for the purpose of securing Mr. Johnsrud’s backstop obligations under the Rights Offering. Upon consummation of the Johnsrud Note Conversion and the Rights Offering and after giving effect to the other components of the debt restructuring plan (including adjustment to the number of shares issuable upon exercise of the Warrants), we expect to have approximately 176 million shares of outstanding common stock on a fully-diluted basis, excluding shares issuable in connection with the management incentive plan contemplated by the Restructuring Support Agreement.

Net proceeds from the Rights Offering will be used to pay down the ABL Facility, which will then be available for further drawdowns, subject to any borrowing base limitations and compliance with other applicable terms and conditions under the ABL Facility.

The Restructuring and the transactions contemplated thereby are subject to additional terms and conditions. We provide no assurances that we will be able to successfully consummate the Restructuring or other alternatives to restructure our existing indebtedness, in which case we may need to restructure under the Bankruptcy Code.

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

Special Note about Forward-Looking Statements

This Management’s Discussion and Analysis of Financial Condition and Results of Operations should be read in conjunction with the accompanying unaudited Condensed Consolidated Financial Statements and related notes thereto. See “Forward-Looking Statements” on page 3 of this Quarterly Report and “Risk Factors” included herein on page 42 and in our filings with the SEC for a description of important factors that could cause actual results to differ from expected results.

Company Overview

Nuverra Environmental Solutions, Inc. (“Nuverra,” the “Company,” “we,” “us,” or “our”) is among the largest companies in the United States dedicated to providing comprehensive, full-cycle environmental solutions to customers focused on the development and ongoing production of oil and natural gas from shale formations. Nuverra’s strategy is to provide one-stop, total environmental solutions, including delivery, collection, treatment, recycling, and disposal of water, wastewater, waste fluids, hydrocarbons, and restricted solids that are part of the drilling, completion, and ongoing production of shale oil and natural gas.

We operate in shale basins where customer exploration and production (“E&P”) activities are predominantly focused on shale oil and natural gas as follows:

• Oil shale areas: includes our operations in the Bakken, Eagle Ford and Permian Basin Shale areas.

30

• Natural gas shale areas: includes our operations in the Marcellus, Utica and Haynesville Shale areas.

Nuverra supports its customers’ demand for diverse, comprehensive and regulatory compliant environmental solutions required for the safe and efficient drilling, completion and production of oil and natural gas from shale formations. Current services, as well as prospective services in which Nuverra has made investments, include (i) fluid logistics via water procurement, delivery, collection, storage, treatment, recycling and disposal, (ii) solid drilling waste collection, treatment, recycling and disposal, (iii) permanent and portable pipeline facilities, water infrastructure services and equipment rental services, and (iv) other ancillary services for E&P companies focused on the extraction of oil and natural gas resources.

To meet our customers’ environmental needs, Nuverra utilizes a broad array of assets to provide comprehensive environmental solutions. Our logistics assets include trucks and trailers, temporary and permanent pipelines, temporary and permanent storage facilities, ancillary rental equipment, treatment facilities, and liquid and solid waste disposal sites. We continue to expand our suite of solutions to customers who demand environmental compliance and accountability from their service providers.

As a result of our historical acquisition activity to expand our presence in existing shale basins, access new markets and to expand the breadth and scope of services we provide, we have accumulated a large level of indebtedness. Due to the continued decline in oil and natural gas prices, and the resulting decrease in drilling and completion activities, there is less demand for our services. The decrease in demand for our services, which we expect to continue throughout 2016, impacts our overall liquidity and our ability to generate sufficient cash to meet our debt obligations and operating needs. Additionally, if the decrease in demand for our services continues for a prolonged period of time, or if we make downward adjustments to our projections, our actual cash flows could be less than our estimated cash flows, which could result in future impairment charges for long-lived assets.

In response to our financial results and concerns about long-term liquidity, we reviewed various options to restructure our balance sheet to improve our overall capital structure. As a result, our Board, with assistance from our advisors, developed a comprehensive plan to restructure our indebtedness, intended to improve liquidity, defer cash interest expense, and preserve value for holders of our common stock. See Note 8 and Note 17 of the Notes to the Condensed Consolidated Financial Statements for a further discussion of our restructuring transactions.

Trends Affecting Our Operating Results

Our results are driven by demand for our services, which are in turn affected by E&P spending trends in the shale areas in which we operate, in particular the level of drilling activity (which impacts the amount of environmental waste products being managed) and active wells (which impacts the amount of produced water being managed). In general, drilling activity in the oil and natural gas industry is affected by the market prices (or anticipated prices) for those commodities. Persistent low natural gas prices over the past several years have resulted in dramatically reduced drilling activity in “dry” gas shale areas such as the Haynesville and Marcellus Shale areas where natural gas is the predominant natural resource. In addition, the low natural gas prices have in the past caused many natural gas producers to curtail capital budgets and these cuts in spending curtailed drilling programs, as well as discretionary spending on well services in certain shale areas, and accordingly reduced demand for our services in these areas. Drilling and completion activities in the oil and "wet" gas basins such as the Eagle Ford, Permian Basin, Utica and Bakken shale areas experienced a dramatic decline in oil prices that began in the fourth quarter of 2014, which substantially reduced drilling and completion activity in these areas. Accordingly, our customer base reduced their capital programs and drilling and completion activity levels in 2015. We continued to see decreased activity levels in the three months ended March 31, 2016, and anticipate that the decrease in demand for our services will continue throughout the remainder of 2016.

Our results are also driven by a number of other factors, including (i) our available inventory of equipment, which we have built through acquisitions and capital expenditures over the past several years, (ii) transportation costs, which are affected by fuel costs, (iii) utilization rates for our equipment, which are also affected by the level of our customers’ drilling and production activities and competition, and our ability to relocate our equipment to areas in which oil and natural gas exploration and production activities are growing, (iv) the availability of qualified drivers (or alternatively, subcontractors) in the areas in which we operate, particularly in the Bakken and Marcellus/Utica Shale areas, (v) labor costs, which have been generally increasing through the periods discussed due to tight labor market conditions and increased government regulation, including the Affordable Care Act, (vi) developments in governmental regulations, (vii) seasonality and weather events and (viii) our health, safety and environmental performance record.

The following table summarizes our total revenues, loss from continuing operations before income taxes, loss from continuing operations and EBITDA (defined below) for the three months ended March 31, 2016 and 2015 (in thousands):

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	Three Months Ended
	March 31,
	2016			2015
Revenue - from predominantly oil shale areas (a)	$	28,469		$	87,437
Revenue - from predominantly gas shale areas (b)	18,506			31,675
Total revenue	$	46,975		$	119,112
Loss from continuing operations before income taxes	$	(27,216	)	$	(12,019	)
Loss from continuing operations	(27,271		)	(11,995		)
EBITDA (c, d)	674			18,051

_________________________

(a) Represents revenues that are derived from predominantly oil-rich areas consisting of the Bakken, Eagle Ford and Permian Basin Shale areas. Note that the Utica Shale area was previously included in the oil shale areas until the three months ended September 30, 2015 when it was reclassified as a gas shale area.

(b) Represents revenues that are derived from predominantly gas-rich areas consisting of the Marcellus, Utica and Haynesville Shale areas. Note that the Utica Shale area was previously included in the oil shale areas until the three months ended September 30, 2015 when it was reclassified as a gas shale area.

(c) Defined as consolidated net income (loss) from continuing operations before net interest expense, income taxes and depreciation and amortization. EBITDA is not a recognized measure under generally accepted accounting principles in the United States (or “GAAP”). See the reconciliation between loss from continuing operations and EBITDA under “Liquidity and Capital Resources—EBITDA”.

(d) The Company's debt covenants referred to in Note 8 of the Notes to the Condensed Consolidated Financial Statements are based on EBITDA adjusted for certain items as defined.

The results reported in the accompanying condensed consolidated financial statements should not be regarded as necessarily indicative of results that may be expected for the entire year. The condensed consolidated financial statements should be read in conjunction with the audited consolidated financial statements, including the notes thereto, contained in our 2015 Annual Report on Form 10-K.

For trends affecting our business and the markets in which we operate see “Trends Affecting Our Operating Results” in the preceding paragraphs, “Risk Factors — Risks Related to Our Company” in Part I, Item 1A of our 2015 Annual Report on Form 10-K, and the Risk Factors identified on page 42 herein.

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Results of Operations

Three Months Ended March 31, 2016 Compared to the Three Months Ended March 31, 2015

The following table sets forth for each of the periods indicated our statements of operations data and expresses revenue and expense data as a percentage of total revenues for the periods presented (dollars in thousands):  

	Three Months Ended						Percent of Revenue
	March 31,						March 31,				Increase (Decrease)
	2016			2015			2016		2015		2016 vs 2015
Non-rental revenue	$	44,026		$	107,010		93.7	%	89.8	%	$	(62,984	)	(58.9	)%
Rental revenue	2,949			12,102			6.3	%	10.2	%	(9,153		)	(75.6	)%
Total revenue	46,975			119,112			100.0	%	100.0	%	(72,137		)	(60.6	)%
Costs and expenses:
Direct operating expenses	38,617			87,999			82.2	%	73.9	%	(49,382		)	(56.1	)%
General and administrative expenses	7,452			12,700			15.9	%	10.7	%	(5,248		)	(41.3	)%
Depreciation and amortization	15,845			17,482			33.7	%	14.7	%	(1,637		)	(9.4	)%
Other, net	—			683			—	%	0.6	%	(683		)	(100.0	)%
Total costs and expenses	61,914			118,864			131.8	%	99.8	%	(56,950		)	(47.9	)%
Operating (loss) income	(14,939		)	248			(31.8	)%	0.2	%	(15,187		)	(6,123.8	)%
Interest expense, net	(12,045		)	(12,588		)	(25.6	)%	(10.6	)%	543			(4.3	)%
Other income, net	158			321			0.3	%	0.3	%	(163		)	(50.8	)%
Loss on extinguishment of debt	(390		)	—			(0.8	)%	—	%	—			100.0	%
Loss from continuing operations before income taxes	(27,216		)	(12,019		)	(57.9	)%	(10.1	)%	(15,197		)	126.4	%
Income tax (expense) benefit	(55		)	24			(0.1	)%	—	%	(79		)	(329.2	)%
Loss from continuing operations	(27,271		)	(11,995		)	(58.1	)%	(10.1	)%	(15,276		)	127.4	%
Income from discontinued operations, net of income taxes	55			921			0.1	%	0.8	%	(866		)	(94.0	)%
Net loss attributable to common shareholders	$	(27,216	)	$	(11,074	)	(57.9	)%	(9.3	)%	$	(16,142	)	145.8	%

Non-Rental Revenue

Non-rental revenue consists of fees charged to customers for the sale and transportation of fresh water and saltwater by our fleet of logistics assets and/or through water midstream assets owned by us to customer sites for use in drilling and completion activities and from customer sites to remove and dispose of flowback and produced water originating from oil and gas wells. Non-rental revenue also includes fees for solids management services. Non-rental revenue for the three months ended March 31, 2016 was $44.0 million, down $63.0 million, or 58.9%, from $107.0 million in the prior year period. Lower drilling and completion activities during the quarter in all divisions, as well as pricing pressures, led to lower non-rental revenue as compared to the same period in the prior year. The primary driver of the decreased demand was a 61% decline in average operating oil rigs from those operating in the same period in the prior year.

Rental Revenue

Rental revenue consists of fees charged to customers for use of equipment owned by us over the term of the rental as well as other fees charged to customers for items such as delivery and pickup. Rental revenue for the three months ended March 31, 2016 was $2.9 million, down $9.2 million, or 75.6%, from $12.1 million in the prior year period. The decrease was the result of lower utilization of the Company’s equipment rental fleet in conjunction with reductions in drilling and completion activities due to the depression in oil prices.

Direct Operating Expenses

Direct operating expenses for the three months ended March 31, 2016 decreased $49.4 million to $38.6 million compared to the prior year period. The decrease in direct operating expenses is attributable to lower revenues as a result of decreased activities, as well as our continued focus on our cost-management initiatives implemented during 2015. Direct operating expenses in the

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three months ended March 31, 2016 and March 31, 2015 included gains on the sale of assets of approximately $1.1 million and $0.7 million, respectively.

General and Administrative Expenses

General and administrative expenses for the three months ended March 31, 2016 amounted to $7.5 million, down $5.2 million from $12.7 million in the prior year period. The decrease is primarily due to lower compensation and benefit expenses as a result of headcount reductions in response to the decrease in drilling and completion activities. Additionally, there were lower professional fees as a result of our cost-management initiatives.

Depreciation and Amortization

Depreciation and amortization for the three months ended March 31, 2016 was $15.8 million, down $1.6 million, or 9.4%, from $17.5 million in the prior year period. The decrease is primarily attributable to a lower depreciable asset base as we have reduced capital spending as a result of lower oil prices and decreased activities by our customers. Additionally, we continue to sell underutilized or non-core assets.

Other, net

We recorded charges of approximately $0.7 million in the three months endedMarch 31, 2015 related to our plan to restructure our business in certain shale basins and reduce costs, including an exit from the Mississippian (or "MidCon") shale area and the Tuscaloosa Marine Shale logistics business. There were no costs incurred during the three months endedMarch 31, 2016 related to the exit of the MidCon shale area and Tuscaloosa Marine Shale logistics business.

Interest Expense, net

Interest expense, net during the three months ended March 31, 2016 was $12.0 million, slightly lower than the $12.6 million in the prior year period primarily due to lower borrowings on the ABL Facility.

Other Income, net

Other income, net was $0.2 million for the three months ended March 31, 2016 compared to $0.3 million in the prior year period.

Loss on extinguishment of debt

In connection with our Restructuring Support Agreement, during the three months ended March 31, 2016 we amended our ABL Facility, reducing the maximum revolver commitments from $125.0 million to $100.0 million. As a result, we wrote-off a portion of the unamortized deferred financing costs associated with the ABL Facility. See "Liquidity and Capital Resources - ABL Facility Amendments" for further discussion on the amendment.

Income Taxes

Income tax expense was $55.0 thousand in the three months ended March 31, 2016, compared to an income tax benefit of $24.0 thousand in the prior year period. As described below, the primary item impacting income taxes for the three-month period ended March 31, 2016 was the valuation allowance against our deferred tax assets.

We have significant deferred tax assets, consisting primarily of net operating losses (“NOLs”), which have a limited life, generally expiring between the years 2029 and 2036 and capital losses, which have a five year carryforward expiring in 2020. Management regularly assesses the available positive and negative evidence to estimate if sufficient future taxable income will be generated to use the existing deferred tax assets. A significant piece of objective negative evidence evaluated was the cumulative losses incurred this quarter and in recent years. Such objective evidence limits the ability to consider other subjective evidence such as our projections for future taxable income.

In light of our continued losses, at March 31, 2016 we determined that our deferred tax liabilities were not sufficient to fully realize our deferred tax assets. Accordingly, a valuation allowance continues to be required against the portion of our deferred tax assets that is not offset by deferred tax liabilities. Accordingly, we expect our effective income tax rate to be near zero for 2016.

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Liquidity and Capital Resources

Cash Flows and Liquidity

Our primary source of capital is from cash generated by our operations and to a lesser extent from borrowings available under our ABL Facility, with additional sources of capital in prior years from debt and equity accessed through the capital markets. Our historical acquisition activity was highly capital intensive and required significant investments in order to expand our presence in existing shale basins, access new markets and to expand the breadth and scope of services we provide. Additionally, we have historically issued equity as consideration in acquisition transactions. Our sources of capital for 2016 are expected to be from cash generated by our operations, restructuring transactions, and borrowings under our ABL Facility to the extent our borrowing base and financial covenants permit such borrowings. Other sources of cash may include asset sales, sale/leaseback transactions, additional debt or equity financing and reductions in our operating costs.

At March 31, 2016, our total indebtedness was $479.5 million. We have incurred operating losses of $27.3 million and $12.0 million for the three months endedMarch 31, 2016 and 2015, respectively. Cash provided by operating activities was $2.6 million for the three months endedMarch 31, 2016. At March 31, 2016, we had cash and cash equivalents of $30.0 thousand, and $13.8 million of net availability under the ABL Facility.

Our consolidated financial statements have been prepared assuming that we will continue as a going concern, which contemplates continuity of operations, realization of assets, and liquidation of liabilities in the normal course of business. As reflected in the condensed consolidated financial statements, we had an accumulated deficit at March 31, 2016, and a net loss for the three months endedMarch 31, 2016 and 2015. These factors, coupled with our large outstanding debt balance, raise substantial doubt about our ability to continue as a going concern. We are attempting to restructure our debt, generate sufficient revenues and reduce costs; however, our cash position may not be sufficient to support our daily operations if we are not successful. While we are currently executing a comprehensive strategy to restructure our indebtedness, improve liquidity and reduce costs, including cash interest expense, to sustain operations through the prolonged depression in oil and natural gas prices and the corresponding impact on our business operations, there can be no assurances to that effect. Our ability to continue as a going concern is dependent upon our ability to complete the transactions associated with our comprehensive strategy to restructure our indebtedness and to generate sufficient liquidity to meet our obligations and operating needs. While we were, and remain, in compliance with our existing debt arrangements, we recognize that absent an improvement in oil prices or a reduction in our indebtedness and cash interest expense, we do not have enough liquidity, including cash on hand, to service our debt, operations, and pay-down debt to avoid covenant violations. See the "Restructuring Support Agreement" discussion later in this section and Note 17 of the Notes to the Condensed Consolidated Financial Statements on "Subsequent Events Related to Restructuring" for details on management's financing strategy to restructure our indebtedness in 2016.

Given the current macro environment and depressed oil and natural gas prices, we anticipate lower revenues throughout 2016 and reductions in costs from operations. During 2016, we expect to use cash on hand and liquidity from our restructuring transactions to repay a portion of our ABL Facility in order to maintain compliance with our ABL Facility financial covenants and to cover any deterioration to our ABL Facility borrowing base due to declining accounts receivable and downward pressure on the orderly liquidation values of our machinery and equipment. In the event our cash on hand is not adequate to cover any shortfall, we would be required to seek alternate sources of debt at higher rates of interest, and such debt may not be available to us.

The following table summarizes our sources and uses of cash from continuing operations for the three months endedMarch 31, 2016 and 2015 (in thousands):

	Three Months Ended
	March 31,
Net cash provided by (used in) continuing operations:	2016			2015
Operating activities	$	2,565		34,750
Investing activities	(172		)	(4,195		)
Financing activities	(41,672		)	(8,436		)
Net (decrease) increase in cash and cash equivalents from continuing operations	$	(39,279	)	$	22,119

As of March 31, 2016, we had cash and cash equivalents of $30.0 thousand, a decrease of $39.3 million from December 31, 2015. The primary reason for the decrease in cash and cash equivalents is due to payments of $52.0 million on our ABL Facility and the execution of an amendment to our guaranty and security agreement related to our ABL Facility in March 2016, which is described in further detail later in this section under "ABL Facility Amendments." This amendment implemented a daily cash sweep of our collection lockbox and depository accounts, the proceeds of which are required to be applied against the

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outstanding balance of the ABL Facility. We had an ending balance of $0.2 million in our collection lockbox and depository accounts on March 31, 2016, which we have classified as "Restricted cash" on the condensed consolidated balance sheet as this cash is not available for operations and was subsequently swept by the lender on April 1, 2016. The amendment also requires the segregation of all receipts and disbursements in separate bank accounts and limits the end of day balance in our operating bank account to an amount not to exceed $1.0 million.

Operating Activities

Net cash provided by operating activities was $2.6 million for the three months endedMarch 31, 2016. The net loss from continuing operations, after adjustments for non-cash items, used cash of $10.4 million, compared to cash provided of $7.2 million in the corresponding 2015 period. Changes in operating assets and liabilities provided $13.0 million in cash primarily due to a decrease in accounts receivable as a result of lower activity levels and billings in the current year and an increase in accounts payable and accrued liabilities, offset by increases in prepaid expenses and other assets. The non-cash items and other adjustments included $15.8 million of depreciation and amortization of intangible assets, amortization of deferred financing costs and debt discounts of $1.2 million, write-off of deferred financing costs of $0.4 million and stock-based compensation of $0.4 million, partially offset by a $1.1 million gain on disposal of property, plant and equipment.

Net cash provided by operating activities was $34.8 million for the three months endedMarch 31, 2015. The net loss from continuing operations, after adjustments for non-cash items, provided cash of $7.2 million. Changes in operating assets and liabilities provided $27.6 million primarily due to a decrease in accounts receivable as a result of increased efforts on collections and an increase in accrued liabilities, which was partially offset by an increase in prepaid expenses and other receivables. The non-cash items and other adjustments included $17.5 million of depreciation and amortization of intangible assets, amortization of deferred financing costs and debt discounts of $1.2 million and stock-based compensation of $0.8 million, partially offset by a $0.7 million gain on disposal of property, plant and equipment.

Investing Activities

Net cash used in investing activities was $0.2 million for the three months endedMarch 31, 2016, which primarily consisted of $1.4 million of purchases of property, plant and equipment and a $0.2 million increase in restricted cash as a result of the new daily sweep of our collection lockbox and depository accounts as discussed above, offset by $1.4 million of proceeds from the sale of property, plant and equipment.

Net cash used in investing activities was $4.2 million for the three months endedMarch 31, 2015 and consisted primarily of $6.2 million of purchases of property, plant and equipment, offset by $2.0 million of proceeds from the sale of property, plant and equipment.

Financing Activities

Net cash used in financing activities was $41.7 million for the three months endedMarch 31, 2016 and was comprised of $52.0 million of payments under ABL Facility and $1.7 million of payments on vehicle financing and other financing activities, offset by $12.4 million in proceeds from borrowings on our ABL Facility.

Net cash used by financing activities was $8.4 million for the three months endedMarch 31, 2015 and consisted of $7.0 million of payments under our ABL Facility, and $1.4 million of payments on vehicle financing and other financing activities.

Capital Expenditures

Our capital expenditure program is subject to market conditions, including customer activity levels, commodity prices, industry capacity and specific customer needs. Due to the difficult 2016 macro environment and the corresponding impact of depressed oil and natural gas prices, we have sought to maximize liquidity by limiting our capital expenditures to only those deemed critical to our ongoing operations and those necessary to support our key growth initiatives. In addition, we offset the cash impact of these expenditures by selling underutilized or non-core assets. Cash required for capital expenditures (related to continuing operations) for the three months endedMarch 31, 2016 totaled $1.4 million compared to $6.2 million for the three months endedMarch 31, 2015. These capital expenditures were partially offset by proceeds received from the sale of under-utilized or non-core assets of $1.4 million and $2.0 million in the three months endedMarch 31, 2016 and 2015, respectively. Historically, a portion of our transportation-related capital requirements were financed through capital leases, which are excluded from the capital expenditures figures cited above. Such equipment additions under capital leases totaled approximately $2.9 million for the three months endedMarch 31, 2015. We had no new equipment additions under capital leases in the three months endedMarch 31, 2016. We continue to focus on improving the utilization of our existing assets and optimizing the allocation of resources in the various shale areas in which we operate. Our planned capital expenditures for the remainder of 2016 are expected to be financed through cash flow from operations, borrowings under existing or new credit facilities if available, issuances of debt or equity, capital leases, other financing structures, or a combination of the foregoing.

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Indebtedness

We are highly leveraged and a substantial portion of our liquidity needs result from debt service requirements and from funding our costs of operations and capital expenditures, including acquisitions. As of March 31, 2016, we had $479.5 million ($479.0 million net of unamortized discount and premium) of indebtedness outstanding, consisting of $400.0 million of 2018 Notes, $62.3 million under the ABL Facility, and $17.2 million of capital leases for vehicle financings and a note payable for the purchase of the remaining interest in AWS.

For a discussion of material changes and developments in our debt and its principal terms, see our discussion below regarding the "ABL Facility Amendments" and "Restructuring Support Agreement," in addition to the discussion in Note 17 of the Notes to the Condensed Consolidated Financial Statements on "Subsequent Events Related to Restructuring."

ABL Facility Amendments

On March 10, 2016, we entered into a Consent and Fifth Amendment to Amended and Restated Credit Agreement (the “Fifth ABL Facility Amendment”) and a Third Amendment to Amended and Restated Guaranty and Security Agreement (the "Third GSA Amendment") by and among Wells Fargo Bank, National Association as agent ("Agent"), the Lenders named therein (the “Lenders”), and the Company. Under the Fifth ABL Facility Amendment, the Lenders consented to the inclusion of a “going concern” qualification in the opinion from our registered public accounting firm, which is included in our Annual Report on Form 10-K for the fiscal year ended December 31, 2015. Under the Third GSA Amendment, we consented to and implemented a daily cash sweep of our collection lockbox and depository accounts, the proceeds of which are required to be applied against the outstanding balance of the ABL Facility. The Third GSA Amendment also requires the segregation of all receipts and disbursements in separate bank accounts and limits the end of day balance in our operating bank account to an amount not to exceed $1.0 million.

On March 24, 2016, in connection with the previously announced Restructuring Support Agreement to implement a proposed debt restructuring and recapitalization plan (the “Restructuring”), we entered into a Sixth Amendment to Amended and Restated Credit Agreement (the “Sixth ABL Facility Amendment”) by and among the Agent, the Lenders and the Company. Among other terms and conditions, the Sixth ABL Facility Amendment amends the ABL Facility as follows:

• Reduces the maximum revolver commitments from $125.0 million to $100.0 million;

• Replaces the leverage ratio financial maintenance covenant with a new minimum EBITDA financial maintenance covenant that will be tested monthly;

• Amends the definition of “EBITDA” for purposes of the financial maintenance covenant to provide allowances for certain unusual or non-recurring fees, costs and expenses, with testing monthly beginning in April 2016;

• Amends the definition of “Borrowing Base” (i) to set the eligible equipment advance rates based on net book value at 60% and on Net Orderly Liquidation Value (as defined in the ABL Facility) at 80% and (ii) to cap Borrowing Base availability attributable to eligible equipment at 75%;

• Increases the default rate upon the occurrence and continuation of an event of default from 2% to 4%;

• Increases the applicable margin on LIBOR Rate and Base Rate Loans (each as defined in the ABL Facility) and the unused line fee;

• Eliminates our ability to voluntarily reduce the commitments without termination of the ABL Facility;

• Requires us to apply proceeds from the Restructuring transactions and related agreements to pay down the ABL Facility;

• Amends the definition of “Permitted Disposition” to permit the sale of our equity investment in Underground Solutions, Inc., discussed further in Note 13, and to expand the permitted disposition general basket (which excludes the sale of machinery and equipment in the ordinary course of business) from $5.0 million to $7.5 million;

• Applies a Permitted Disposition Reserve of 50% against our availability for net cash proceeds in excess of $7.5 million made on or after March 10, 2016 for sales specifically related to the Permitted Disposition general basket; and

• Amends certain definitions in connection with the Restructuring transactions, including “Change of Control”, “Permitted Indebtedness”, and “Permitted Liens”.

In addition, we agreed to certain make-whole fees that would be payable to the Lenders upon early termination of the ABL Facility as a result of acceleration, bankruptcy or otherwise, unless amounts outstanding under the ABL Facility are paid in full.

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In connection with the Sixth ABL Facility Amendment we incurred amendment fees of approximately $0.6 million which were capitalized as deferred financing costs during the three months ended March 31, 2016. Further, we wrote off a portion of the unamortized deferred financing costs associated with our ABL Facility of approximately $0.4 million during the three months ended March 31, 2016.

See the "ABL Facility Amendments" discussion in Note 17 of the Notes to the Condensed Consolidated Financial Statements on "Subsequent Events Related to Restructuring" for details on the Seventh Amendment to Amended and Restated Credit Agreement (the "Seventh ABL Facility Amendment").

Financial Covenants and Borrowing Limitations

The ABL Facility, as amended, requires, and any future credit facilities will likely require, us to comply with specified financial ratios that may limit the amount we can borrow under our ABL Facility. A breach of any of the covenants under the indenture governing the 2018 Notes (the “Indenture”) or the ABL Facility, as applicable, could result in a default. Our ability to satisfy those covenants depends principally upon our ability to meet or exceed certain positive operating performance metrics including, but not limited to, earnings before interest, taxes, depreciation and amortization, or EBITDA, and ratios thereof, as well as certain balance sheet ratios. Any debt agreements we enter into in the future may further limit our ability to enter into certain types of transactions.

The ABL Facility contains certain financial covenants, including a fixed charge coverage ratio and a minimum EBITDA covenant. The fixed charge coverage ratio, which only applies if excess availability under the ABL Facility falls below 12.5% of the maximum revolver amount, requires the ratio of adjusted EBITDA (as defined by the ABL Facility) less capital expenditures to fixed charges (as defined) to be at least 1.1 to 1.0. The fixed charge coverage ratio covenant could have the effect of limiting our availability under the ABL Facility, as additional borrowings would be prohibited if, after giving pro forma effect thereto, we would be in violation of such covenant. The minimum EBITDA covenant requires us to meet a stated year-to-date EBITDA target (as defined by the ABL Facility) beginning April 30, 2016 and continuing each month thereafter through December 31, 2016 at which time the target is reset. As of March 31, 2016, we remained in compliance with our debt covenants and availability was $26.3 million; however, our ratio of adjusted EBITDA to fixed charges was less than 1.1 to 1.0 (as calculated pursuant to the ABL Facility). As such, our net availability was reduced by 12.5% of the maximum revolver amount, or $12.5 million, resulting in approximately $13.8 million of net availability as of March 31, 2016. As of March 31, 2016 we were not required to meet a minimum EBITDA target. For the four months ending April 30, 2016 we are required to have minimum EBITDA of approximately $2.1 million.

During the three months ended March 31, 2016, the Agent for the ABL Facility commenced a borrowing base redetermination involving a valuation of the net orderly liquidation value of our eligible machinery and equipment by a third party specialist. As a result, the lenders applied an $18.0 million reserve against our availability based on the estimated decline to our borrowing base. Due to the application of this reserve against our availability and due to the implementation of the daily sweep of our collection lockbox and depository bank accounts, we made cumulative payments of $52.0 million during the three months ended March 31, 2016, offset by borrowings of $12.4 million, thus reducing the amount outstanding under the ABL Facility to $62.3 million as of March 31, 2016.

The ABL Facility's borrowing base limitations are based upon eligible accounts receivable and equipment. If the value of our eligible accounts receivable or equipment decreases for any reason, or if some portion of our accounts receivable or equipment is deemed ineligible under the terms of our ABL Facility, the amount we can borrow under the ABL Facility could be reduced. These limitations could have a material adverse impact on our liquidity and financial condition. In addition, the administrative agent for our ABL Facility has the periodic right to commission appraisals of the assets comprising our borrowing base, and we are obligated to reimburse the cost of up to four appraisals including one field examination, during any 12 consecutive months. If an appraisal results in a reduction of the borrowing base, we may be required to repay a portion of the amount outstanding under the ABL Facility in order to remain in compliance with applicable borrowing limitations. At March 31, 2016 we had $13.8 million of net availability under the ABL Facility. During the remainder of 2016, we expect further deterioration to our ABL borrowing base due to declining accounts receivable and downward pressure on the orderly liquidation values of our machinery and equipment. During the three months ended March 31, 2016, we made payments of $52.0 million against the outstanding balance of the ABL Facility a portion of which was made to cover the borrowing base deterioration. There can be no assurance that we will have sufficient cash on hand or other sources of liquidity to make any such future repayments if necessary.

The Indenture governing the 2018 Notes contains restrictive covenants on the incurrence of senior secured indebtedness. To the extent that the fixed charge coverage ratio (as defined in the Indenture) is below 2.0 to 1.0, the Indenture prohibits our incurrence of new senior secured indebtedness under the ABL Facility or any other secured credit facility, at that point in time, to the greater of $150.0 million and the amount of debt as restricted by the secured leverage ratio, which is the ratio of secured

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debt to EBITDA, of 2.0 to 1.0, as determined pursuant to the Indenture. The 2.0 to 1.0 fixed charge coverage ratio and secured leverage ratio are incurrence covenants, not maintenance covenants. The covenants do not require repayment of existing borrowings incurred previously in accordance with the covenants, but rather limits new borrowings during any such period. As a result of the Sixth ABL Facility Amendment, our ability to incur new borrowings under the ABL Facility is limited to a maximum of $100.0 million irrespective of the permitted availability of up to $150.0 million under the 2018 Notes.

See the "Exchange Offer" and "Term Loan" discussions in Note 17 of the Notes to the Condensed Consolidated Financial Statements on "Subsequent Events Related to Restructuring" for details on the exchange offer for the 2018 Notes, the consent related thereto, the 2021 Notes and the new term loan.

The covenants described above are subject to important exceptions and qualifications. The continued effect of low oil and natural gas prices will negatively impact our compliance with our covenants, and we cannot guarantee that we will satisfy those requirements. If we do not obtain a long term waiver for any breached covenants, such breach would result in a default under the Indenture, ABL Facility or other debt obligations, or any future credit facilities we may enter into, which could allow all amounts outstanding thereunder to be declared immediately due and payable, subject to the terms and conditions of the documents governing such indebtedness. If we were unable to repay the accelerated amounts, our secured lenders could proceed against the collateral granted to them to secure such indebtedness. This would likely in turn trigger cross acceleration and cross-default rights under any other credit facilities and indentures. If the amounts outstanding under the 2018 Notes or any other indebtedness outstanding at such time were to be accelerated or were the subject of foreclosure actions, we cannot guarantee that our assets would be sufficient to repay in full the money owed to the lenders or to our other debt holders. We cannot guarantee that we will be granted waivers or amendments to the Indenture governing the 2018 Notes, the ABL Facility or such other debt obligations if for any reason we are unable to comply with our obligations thereunder. Any such limitations on borrowing under our ABL Facility could have a material adverse impact on our liquidity.

Restructuring Support Agreement

On March 11, 2016, we entered into a Restructuring Support Agreement with holders of more than 80% of the 2018 Notes relating to a restructuring transaction (the “Restructuring”), subject to the satisfaction of certain closing conditions including shareholder approval and minimum noteholder participation, pursuant to which, among other terms and conditions: (i) the exchange up to $368.6 million aggregate principal amount of the 2018 Notes for new second lien secured notes due 2021 (the “2021 Notes”), (ii) the exchange of approximately $31.4 million aggregate principal amount of the 2018 Notes for our common stock at a volume-weighted, market-average conversion price per share which were purchased on the open market during the year ended December 31, 2015 by an entity controlled by Mr. Mark D. Johnsrud, our Chief Executive Officer and Chairman of the board of directors, (iii) a new $24.0 million principal amount “last out” first lien term loan due 2018 (the “Term Loan”) which was funded by certain holders of the 2018 Notes with annual interest at 13% to be paid in-kind by increasing the principal amount payable thereunder and due at maturity, and (iv) the issuance of warrants to purchase up to 15% of our outstanding common stock, at an exercise price of $0.01 per share, to the lenders under the Term Loan and certain holders of the 2018 Notes that participated in the exchange offer. In addition, as part of the Restructuring, Mr. Johnsrud agreed to backstop a $5.0 million equity rights offering (the “Rights Offering”) that is expected to be completed in June 2016. The net proceeds of the Term Loan and the Rights Offering are to be used to pay down a portion of the outstanding balance on the ABL Facility, which will be available for re-borrowing subject to any borrowing base limitations and compliance with other applicable terms and conditions under the ABL Facility.

Interest on the 2021 Notes will be payable semiannually on April 15 and October 15 of each year beginning on October 15, 2016, and will be paid in-kind by increasing the principal amount payable thereunder and due at maturity and/or in cash as follows: (i) interest payable on October 15, 2016 will be paid in-kind at a rate of 12.5% per annum, (ii) interest payable in 2017 will be paid 50% in-kind and 50% in cash at a rate of 10% per annum, (iii) interest payable on April 15, 2018 and thereafter will be paid in cash at a rate of 10% per annum until maturity. The liens securing the 2021 Notes will be contractually subordinated to the liens on such assets securing the ABL Facility and the Term Loan. Both the conversion of Mr. Johnsrud’s 2018 Notes to equity and the Rights Offering are subject to shareholder approval of amendments to our Amended and Restated Certificate of Incorporation, as amended ("Certificate of Incorporation"), to provide for the issuance of sufficient additional shares of common stock.

As described previously under "ABL Facility Amendments," on March 24, 2016 in connection with the Restructuring we entered into the Sixth ABL Facility Amendment. See Note 17 of the Notes to the Condensed Consolidated Financial Statements on "Subsequent Events Related to Restructuring" for a discussion of material changes and developments after March 31, 2016 with respect to the Restructuring.

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The Restructuring and the transactions contemplated thereby are subject to additional terms and conditions. We provide no assurances that we will be able to successfully consummate the Restructuring or other alternatives to restructure our existing indebtedness, in which case we may need to restructure under the Bankruptcy Code.

Off Balance Sheet Arrangements

As of March 31, 2016, we did not have any off-balance-sheet arrangements other than operating leases that have or are reasonably likely to have a current or future effect on the our financial condition, changes in financial condition, revenue or expenses, results of operation, liquidity, capital expenditure or capital resources that are material to investors, as defined in Item 303(a)(4)(ii) of SEC Regulation S-K.

EBITDA

As a supplement to the financial statements in this Quarterly Report on Form 10-Q, which are prepared in accordance with GAAP, we also present EBITDA. EBITDA is consolidated net income (loss) from continuing operations before net interest expense, income taxes and depreciation and amortization. We present EBITDA because we believe this information is useful to financial statement users in evaluating our financial performance. We also use EBITDA to evaluate our financial performance, make business decisions, including developing budgets, managing expenditures, forecasting future periods, and evaluating capital structure impacts of various strategic scenarios. EBITDA is not a measure of performance calculated in accordance with GAAP, may not necessarily be indicative of cash flow as a measure of liquidity or ability to fund cash needs, and there are material limitations to its usefulness on a stand-alone basis. EBITDA does not include reductions for cash payments for our obligations to service our debt, fund our working capital and pay our income taxes. In addition, certain items excluded from EBITDA such as interest, income taxes, depreciation and amortization are significant components in understanding and assessing our financial performance. All companies do not calculate EBITDA in the same manner and our presentation may not be comparable to those presented by other companies. Financial statement users should use EBITDA in addition to, and not as an alternative to, net income (loss) as defined under and calculated in accordance with GAAP.

The table below provides a reconciliation between loss from continuing operations, as determined in accordance with GAAP, and EBITDA (in thousands):

	Three Months Ended
	March 31,
	2016			2015
Loss from continuing operations	$	(27,271	)	$	(11,995	)
Depreciation and amortization	15,845			17,482
Interest expense, net	12,045			12,588
Income tax expense (benefit)	55			(24		)
EBITDA	$	674		$	18,051

Critical Accounting Policies

There have been no significant changes to our Critical Accounting Policies in the three months endedMarch 31, 2016 from those disclosed in “Item 7. Management’s Discussion and Analysis of Financial Condition and Results of Operations” in our 2015 Annual Report on Form 10-K.

Recently Issued Accounting Pronouncements

See Note 2 in the Notes to the Condensed Consolidated Financial Statements included in this Quarterly Report on Form 10-Q for a description of accounting pronouncements recently issued that could potentially impact our consolidated financial statements.

Item  3. Quantitative and Qualitative Disclosures about Market Risk

There have been no material changes in our quantitative and qualitative disclosures about market risk from those disclosed in “Item 7A. Quantitative and Qualitative Disclosures about Market Risk” in our 2015 Annual Report on Form 10-K.

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Item 4.    Controls and Procedures

Disclosure Controls and Procedures

As of the end of the period covered by this Quarterly Report, we performed an evaluation, under the supervision and with the participation of our Chief Executive Officer (Principal Executive Officer and Principal Financial Officer), of our disclosure controls and procedures (as defined in Rule 13a-15(e) or 15d-15(e) of the United States Securities Exchange Act of 1934, as amended (the “Exchange Act”)). Based upon that evaluation, our Chief Executive Officer concluded that our disclosure controls and procedures were effective at that time to provide reasonable assurance that the information required to be disclosed in our reports filed with the SEC under the Exchange Act, are recorded, processed, summarized and reported within the time periods specified in the SEC’s rules and forms, and are accumulated and communicated to our management, including the Chief Executive Officer, as appropriate to allow timely decisions regarding required disclosure.

Changes in Internal Control over Financial Reporting

There were no changes in our internal control over financial reporting during the three months ended March 31, 2016 that materially affected, or were reasonably likely to materially affect, our internal control over financial reporting.

As disclosed in our Form 8-K filed on April 1, 2016, our Chief Financial Officer resigned from that position effective April 1, 2016. As a result, there have been changes in the individuals responsible for executing the controls; however, we continue to execute our business processes under the same controls and we do not believe this organizational change materially affects, or is reasonably likely to materially affect, our internal control over financial reporting.

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PART II—OTHER INFORMATION

Item  1. Legal Proceedings.

See “Legal Matters” in Note 12 of the Notes to the Condensed Consolidated Financial Statements for a description of our material legal proceedings.

Item  1A. Risk Factors.

Risk Factors Related To Our Common Stock

Our common stock is particularly subject to volatility because of the industry in which we operate.

The market prices of securities of companies involved in the oil and gas industry have been depressed and extremely volatile, and have experienced fluctuations that have often been unrelated or disproportionate to the operating performance of such companies. These broad market fluctuations could adversely affect the market price of our common stock.

There is no assurance that an active public trading market will continue.

There can be no assurance that an active public trading market for our common stock will be sustained. If for any reason an active public trading market does not continue, purchasers of the shares of our common stock may have difficulty in selling their securities should they desire to do so and the price of our common stock may decline.

If securities analysts do not publish research or reports about our business or if they downgrade our stock, the price of our stock could decline.

The trading market for our shares of common stock could rely in part on the research and reporting that industry or financial analysts publish about us or our business. We do not control these analysts. Furthermore, if one or more of the analysts who do cover us downgrades our stock, the price of our stock could decline. If one or more of these analysts ceases coverage of our company, we could lose visibility in the market, which in turn could cause our stock price to decline.

Future sales by us or our existing shareholders could depress the market price of our common stock.

If we or our existing stockholders sell a large number of shares of our common stock, the market price of our common stock could decline significantly. Further, even the perception in the public market that we or our existing stockholders might sell shares of common stock could depress the market price of the common stock.

The exercise of our warrants may result in substantial dilution and may depress the market price of our common stock.

As of April 26, 2016, we had outstanding 31,052,076 shares of common stock and also (i) 1.8 million shares of our common stock issuable under employee benefit plans, (ii) the Exchange Warrants exercisable for 3,653,185 shares of our common stock at an exercise price equal to $0.01 per share, and (iii) the First Lien Term Loan (or "FLTL") Warrants exercisable for 1,826,593 shares of our common stock at an exercise price of $0.01 per share. If the shares issuable under employee stock purchase plans are issued or the Warrants are exercised and the shares of common stock are issued pursuant to the employee stock purchase plans or upon such exercise are sold, our common shareholders may experience substantial dilution and the market price of our shares of common stock could decline. Further, the perception that such securities might be exercised could adversely affect the market price of our shares of common stock. In addition, holders of the Warrants are likely to exercise them when, in all likelihood, we could obtain additional capital on terms more favorable to us than those provided by the Warrants. Further, during the time that the foregoing securities are outstanding, they may adversely affect the terms on which we could obtain additional capital.

The completion of our comprehensive plan to restructure our outstanding indebtedness, including the conversion of Mr. Johnsrud’s 2018 Notes to equity and the Rights Offering, will result in substantial dilution to our existing shareholders.

We are currently executing a plan to restructure our outstanding indebtedness. The completion of our plan to restructure our indebtedness, including the conversion of Mr. Johnsrud’s 2018 Notes and the Rights Offering, will result in substantial dilution to our existing shareholders. As part of the exchange offer for our 2018 Notes, we will convert approximately $31.4 million aggregate principal amount of the 2018 Notes for our common stock at a conversion price per share of $0.32 (the “Conversion

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Price”) which were held by an entity controlled by Mr. Mark D. Johnsrud, our Chief Executive Officer and Chairman of the board of directors.  Mr. Johnsrud will receive approximately 98.3 million shares for the conversion of his 2018 Notes.  In addition, as part of our debt restructuring plan, we will also pursue an equity rights offering (the “Rights Offering”), in which all holders of our common stock will be granted the right to participate. Each shareholder who participates in the Rights Offering will have the right to subscribe for a pro rata share of $5.0 million of common stock exercisable at a 20% discount to the Conversion Price. We expect to complete the Rights Offering in the second quarter of 2016. Mr. Johnsrud agreed to backstop the Rights Offering. We plan to issue approximately 20.3 million shares of common stock in connection with the Rights Offering, which includes the backstop fee that will be paid to Mr. Johnsrud in the form of approximately 790 thousand shares of common stock. Both the conversion of Mr. Johnsrud’s 2018 Notes to equity and the Rights Offering are subject to shareholder approval of amendments to our Amended and Restated Certificate of Incorporation, as amended, to provide for the issuance of sufficient additional shares of common stock.

Our shareholders will suffer substantial dilution in their percentage ownership as a result of the conversion of Mr. Johnsrud’s 2018 Notes to equity.  In addition, shareholders who do not fully exercise their subscription rights in the Rights Offering, or exercise less than all of their rights, will suffer further dilution in their percentage ownership of our common stock relative to such other shareholders who fully exercise their subscription rights or a greater proportion of their subscription rights. In addition, if the Rights Offering subscription price of $0.256 is less than the market value per share of our common stock, then our shareholders will experience an immediate dilution of the aggregate net market value of their shares as a result of the Rights Offering. The amount of any decrease in net market value is not predictable because it is not known at this time what the market value per share will be on the expiration date of the Rights Offering.

Risk Factors Related To Our Indebtedness

Our ABL Facility contains a minimum EBITDA covenant requiring us to meet a stated year-to-date EBITDA target. Factors beyond our control could result in our failure to comply with such EBITDA covenant. Failure to comply with such covenant would result in an event of default under our ABL Facility.

Our ABL facility contains a minimum EBITDA financial maintenance covenant that will be tested monthly. The minimum EBITDA covenant requires us to meet a stated year-to-date EBITDA target (as defined by the ABL Facility) beginning April 30, 2016 and continuing each month thereafter through December 31, 2016 at which time the target is reset. Our ability to meet our minimum EBITDA covenant will depend upon our future operating performance, which will be affected by prevailing economic conditions and financial, business and other factors, certain of which are beyond our control. As our minimum EBITDA covenant is tested monthly on a year-to-date basis beginning April 30, 2016, unanticipated results with respect to any given monthly period may have an adverse effect on compliance with such covenant. There can be no assurances that we will maintain compliance with the minimum EBITDA covenant under our ABL Facility.

If we fail to comply with our minimum EBITDA financial maintenance covenant, we would request a waiver from the lenders or may be required to repay the outstanding balance of the ABL Facility. Failure to obtain a waiver or cure the default through repayment of the facility would create an event of cross default under our other credit facilities and indentures, including the Term Loan and the Indentures governing the 2018 Notes and 2021 Notes. There can be no assurance that the lenders will grant a waiver, and we currently do not have sufficient liquidity, including cash on hand, to repay the outstanding balance of the ABL facility.

We may not be able to generate a sufficient amount of cash flow to meet our debt service obligations or to fund our other liquidity needs, which could adversely affect our ability to raise additional capital to fund operations or limit our ability to react to changes in the economy.

Our ability to make scheduled payments or to refinance our obligations with respect our indebtedness will depend on our financial and operating performance which, in turn, is subject to prevailing economic conditions and to certain financial, competitive, business and other factors, including the availability of financing in the banking and capital markets as well as the other risks described herein, all of which are beyond our control. If our cash flow and capital resources are insufficient to fund our debt service obligations and our other commitments, we could face substantial liquidity problems and may be forced to reduce or delay scheduled expansions and capital expenditures, sell material assets or operations, obtain additional capital or restructure our debt. In addition, we cannot assure you that our operating performance, cash flow and capital resources will be sufficient for payment of our debt in the future. If we are unable to meet our debt obligations or to fund our other liquidity needs, we will need to restructure or refinance all or a portion of our debt, which could cause us to default on our debt obligations and impair our liquidity. Any refinancing of our indebtedness could be at higher interest rates and may require us to comply with more onerous covenants, which could further restrict our business operations. In the event that we are required to dispose of material assets or operations or

43

restructure our debt to meet our debt service and other obligations, we cannot provide assurance that we could effect any of these actions on a timely basis, on commercially reasonable terms or at all, or that these actions would be sufficient to meet our capital requirements. In addition, the terms of our existing or future debt agreements may restrict us from effecting certain or any of these alternatives.

If we cannot make scheduled payments on our debt, we will be in default and, as a result:

• our debt holders could declare all outstanding principal and interest to be due and payable; and

• we could be forced into bankruptcy or liquidation.

Our substantial indebtedness could have important consequences, including the following:

• it may limit our ability to borrow money for our debt service requirements or other purposes;

• a substantial portion of our cash flow will be dedicated to the repayment of our indebtedness and will not be available for other purposes;

• it may limit our flexibility in planning for, or reacting to, changes in our operations or business;

• we are and will be more highly leveraged than some of our competitors, which may place us at a competitive disadvantage;

• it may make us more vulnerable to downturns in our business or the economy;

• it may restrict us from making strategic acquisitions, introducing new technologies or exploiting business opportunities; and

• it may limit, along with the financial and other restrictive covenants in our indebtedness, among other things, our ability to borrow additional funds or dispose of assets.

The terms of our the Indentures governing the 2018 Notes and the 2021 Notes, the ABL Facility and the Term Loan may restrict our current and future operations, particularly our ability to respond to changes in our business or to take certain actions.

The terms of our Indentures governing the 2018 Notes and 2021 Notes (the “Indentures”), the ABL Facility and the Term Loan contain, and the terms of any of other future indebtedness would likely contain, a number of restrictive covenants that impose certain operating and other restrictions.

Our Indentures, the ABL Facility and the Term Loan include covenants that, among other things, restrict our ability to:

• incur additional debt;

• pay dividends, redeem stock or make other distributions;

• make other restricted payments and investments;

• create liens;

• enter into sale and leaseback transactions;

• merge, consolidate or transfer or dispose of substantially all of our assets; and

• enter into certain types of transactions with affiliates.

A breach of any of the restrictive covenants in our Indentures would result in a default and, as a result:

• our debt holders could declare all outstanding principal and interest to be due and payable; and

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• we could be forced into bankruptcy or liquidation.

The operating and financial restrictions and covenants in those agreements and any future financing agreements may adversely affect our ability to finance future operations or capital needs or to engage in other business activities.

Our ability to meet our obligations under our indebtedness depends in part on our earnings and cash flows and those of our subsidiaries and on our ability and the ability of our subsidiaries to pay dividends or advance or repay funds to us.

We conduct all of our operations through our subsidiaries. Consequently, our ability to service our debt is dependent, in large part, upon the earnings from the businesses conducted by our subsidiaries. Our subsidiaries are separate and distinct legal entities and have no obligation to pay any amounts to us, whether by dividends, loans, advances or other payments. The ability of our subsidiaries to pay dividends and make other payments to us depends on their earnings, capital requirements and general financial conditions and is restricted by, among other things, applicable corporate and other laws and regulations as well as, in the future, agreements to which our subsidiaries may be a party.

We may recognize a significant amount of cancellation of indebtedness, which we refer to as “COD” income, as a result of the transactions contemplated by the Exchange Offer and the Restructuring Transactions.

The exchange of the 2018 Notes for the 2021 Notes pursuant to the Exchange Offer and other Restructuring Transactions are expected result in COD income to us for United States federal income tax purposes. Because the amount of COD income to be recognized by us depends in part on the fair market value (and, thus, the issue price) of instruments that were issued on the date of the exchange, the precise amount of COD income resulting from the exchange of the 2018 Notes could not be determined prior to the date of the exchange. However, we generally anticipate that any COD income that we recognize in the Exchange Offer will be offset, at least in part, by our existing net operating losses, or “NOLs,” and certain other tax attributes. To the extent that our existing NOLs and other tax attributes are not sufficient to offset fully any COD income, we may incur a cash tax liability from such COD income. In this regard, we may incur a cash tax liability for “alternative minimum tax” even if we otherwise have sufficient NOLs to offset all of the COD income from the Exchange Offer and Restructuring Transactions.

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

None.

Item 3. Defaults Upon Senior Securities.

None.

Item 4. Mine Safety Disclosures

Not applicable.

Item  5. Other Information.

None.

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Item 6. Exhibits.

The following exhibits are filed or furnished with this Quarterly Report on Form 10-Q.

Exhibit Number	Description
10.1	First Amendment to Executive Employment Agreement, dated January 25, 2016, between the Nuverra Environmental Solutions, Inc. and Mark D. Johnsrud (incorporated herein by reference to Exhibit 10.1 to the Company’s Current Report on Form 8-K filed with the SEC on January 25, 2016).
10.2*	Employment Agreement, dated February 5, 2016, between Nuverra Environmental Solutions, Inc. and Joseph M. Crabb.
10.3	Consent and Fifth Amendment to Amended and Restated Credit Agreement, dated March 10, 2016, by and among Wells Fargo Bank, National Association, the Lenders named therein, and Nuverra Environmental Solutions, Inc. (incorporated herein by reference to Exhibit 10.1 to the Company’s Current Report on Form 8-K filed with the SEC on March 14, 2016).
10.4	Third Amendment to Amended and Restated Guaranty and Security Agreement, dated March 10, 2016, by and among Nuverra Environmental Solutions, Inc., certain subsidiaries of Nuverra Environmental Solutions, Inc. named therein, and Wells Fargo Bank, National Association (incorporated herein by reference to Exhibit 10.2 to the Company’s Current Report on Form 8-K filed with the SEC on March 14, 2016).
10.5	Restructuring and Support Agreement, dated March 11, 2016, by and among Nuverra Environmental Solutions, Inc., certain subsidiaries of Nuverra Environmental Solutions, Inc., the Supporting Holders, and Mark D. Johnsrud (incorporated herein by reference to Exhibit 10.3 to the Company’s Current Report on Form 8-K filed with the SEC on March 14, 2016).
10.6	Sixth Amendment to Amended and Restated Credit Agreement, dated March 24, 2016, by and among Wells Fargo Bank, National Association, the Lenders named therein, and Nuverra Environmental Solutions, Inc. (incorporated herein by reference to Exhibit 10.1 to the Company’s Current Report on Form 8-K filed with the SEC on March 29, 2016).
31.1*	Certification of Chief Executive Officer Pursuant to 18 U.S.C. Section 1350, as adopted pursuant to Section 302 of the Sarbanes-Oxley Act of 2002.
31.2*	Certification of Chief Financial Officer Pursuant to 18 U.S.C. Section 1350, as adopted pursuant to Section 302 of the Sarbanes-Oxley Act of 2002.
32.1*	Certification of Chief Executive Officer and Chief Financial Officer Pursuant to 18 U.S.C. Section 1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002.
101.INS*	XBRL Instance Document.
101.SCH*	XBRL Taxonomy Extension Schema Document.
101.CAL*	XBRL Taxonomy Extension Calculation Linkbase Document.
101.DEF*	XBRL Taxonomy Extension Definition Linkbase Document.
101.LAB*	XBRL Taxonomy Extension Label Linkbase Document.
101.PRE*	XBRL Taxonomy Extension Presentation Linkbase Document.

_______________

* Filed herewith.

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SIGNATURES

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

Date: May 9, 2016
/s/ Mark D. Johnsrud
Name:	Mark D. Johnsrud
Title:	President and Chief Executive Officer
	(Principal Executive Officer and Principal Financial Officer)

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EX-10.2

Exhibit 10.2

EMPLOYMENT AGREEMENT

This EMPLOYMENT AGREEMENT (the “Agreement” or “Employment Agreement”) dated February 5, 2016 (“Effective Date”) between Joseph M. Crabb (“Employee”) and Nuverra Environmental Solutions, Inc. f/k/a Heckmann Corporation (the “Company”) provides:

WHEREAS, the Company wishes to obtain the future services of Employee, and Employee is willing to continue to provide services to the Company; and

WHEREAS, Employee wishes to have the protection provided for in this Agreement and, in exchange for such protection, is willing to give to the Company, under certain circumstances, a covenant not to compete and a release of all liability.

NOW, THEREFORE, the parties hereto agree as follows:

1.    Previous Agreement Superseded. Any previous employment agreement between the parties is hereby superseded, replaced in its entirety and considered null and void.

2.    Definitions.

a.    “Board of Directors” means the Board of Directors of the Company.

b.    “Cause” means any one (1) or more of the following:

(i)    Employee’s conviction of, or plea of guilty or nolo contendere to, any felony or a crime involving embezzlement, conversion of property or moral turpitude;

(ii)    A finding by a majority of the Board of Directors of Employee’s fraud, embezzlement or conversion of the Company’s property or Employee’s material and intentional unauthorized use, misappropriation, distribution or diversion of tangible or intangible asset or corporate opportunity of the Company;

(iii)    A finding by a majority of the Board of Directors of Employee’s knowing breach of any of Employee’s fiduciary duties to any company in the Company Group or the Company’s stockholders or making of an intentional misrepresentation or omission which breach, misrepresentation or omission would reasonably be expected to have a material adverse effect on the business relationship, the business, properties, assets, operations, condition (financial or other) or prospects of any company in the Company Group;

(iv)    Employee’s alcohol or substance abuse, which materially interferes with Employee’s ability to discharge the duties, responsibilities and obligations prescribed by this Agreement as determined by a majority of the Board of Directors;

(v)    Employee’s material and knowing failure to observe or comply with law applicable to the business of the Company as an officer or employee of the Company which would reasonably be expected to have a material adverse effect on the

- 1 -

business relationship, the business, properties, assets, operations, condition (financial or other), or prospects of any company in the Company Group as determined by a majority of the Board of Directors;

(vi)    Employee’s gross insubordination, negligence, recklessness or willful misconduct relating to the business or affairs of the Company that results in material harm to the Company or its operation, properties, reputation, goodwill or business relationships as determined by a majority of the Board of Directors,

provided that (x) any finding or determination made by the Board of Directors concerning the existence of Cause must be made in good faith and not for purposes of evading the Company’s obligations hereunder; and (y) a finding or determination of Cause by the Board of Directors may not be made unless, prior to determining that Cause exists, the Employee shall be given written notice stating in reasonable detail the facts and circumstances deemed by the Company to constitute Cause, and thirty (30) days from receipt of such notice Employee has failed to cure the facts and circumstances set forth in such notice.

c.    “Change of Control” means:

(i)    any sale, lease, exchange, disposition or other transfer (in one (1) transaction or series of related transactions) of all or substantially all of the Company’s assets to any person or group of related persons under Section 13(d) of the Securities and Exchange Act of 1934 (“Group”);

(ii)    the Company’s shareholders approve and complete any plan or proposal for the liquidation, dissolution, bankruptcy or assignment for the benefit of creditors of the Company;

(iii)    any person or Group becomes the beneficial owner, directly or indirectly, of shares representing more than 50% of the aggregate voting power of the issued and outstanding stock entitled to vote in the election of directors of the Company (“Voting Stock”) and such person or Group has the power and authority to vote such shares;

(iv)    any person or Group acquires sufficient shares of Voting Stock to elect a majority of the members of the Board of Directors; or

(v)    the completion of a reorganization, merger, consolidation or similar corporate transaction, or series of related transactions, the result of which is the holders of the Company’s stock immediately before the completion of the transaction fail to hold, directly or indirectly, immediately after the transaction, more than 50% of the Voting Stock determined immediately after such transaction(s);

provided, however, that with respect to subsections (iii) and (iv) above, a “Change of Control” shall not be deemed to have occurred in the event Mark D. Johnsrud, the Company’s Chairman and Chief Executive Officer, becomes the beneficial owner, directly or indirectly, of shares of stock of the Company representing more than 50% of the Voting Stock or acquires sufficient shares of Voting Stock to elect a majority of the members of the Board of Directors (Johnsrud’s Increased Beneficial Ownership”), provided that the Company remains publicly traded following Johnsrud’s Increased Beneficial Ownership. For purposes of this

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section, “publicly traded” means (i) the Company’s common stock is traded on a national securities exchange (as defined in Section 6 of the Securities Exchange Act of 1934, as amended (the “Exchange Act”)), and (ii) the Company’s common stock, as a class, is registered under Section 12 of the Exchange Act.

Notwithstanding anything to the contrary herein, the fact that a transaction or event is defined as a Change of Control for purposes of this Agreement shall not evidence or infer that the transaction or event constitutes a change of control for purposes of, including but not limited to, any determination or definition of any licensing agency or for determining the duties of the Company’s Board of Directors under applicable corporate law.

d.    “COBRA” means Section 4980B of the Code and Part 6 of Subtitle B of Title I of the Employee Retirement Income Security Act of 1974, as amended, and any similar state law.

e.    “Code” means the Internal Revenue Code of 1986, as amended, and the regulations promulgated thereunder.

f.    “Company Group” shall mean the entities listed on Schedule 1.

g.    “Compete” shall mean to directly or indirectly own, operate, manage, join, control, be employed by, be a consultant to, invest in, or become a director, officer, agent, partner, member, independent contractor or shareholder of any Competitive Business, as defined below. As used in this Agreement, “Compete” does not include purely passive investments in any publicly traded company so long as Employee does not directly or indirectly own, acquire or obtain options to acquire, 5% or more of any class of shares in such company.

h.    “Competitive Business” means any environmental solutions business conducted in connection with oil or gas exploration or production which provides transportation, treatment, recycling, or disposal, relating to water, wastewater, drilling mud, drilling wastes, or related products or services as advertised on the Company’s website from time to time, and any other related services the Company plans to provide to the Company’s customers as demonstrated in the Company’s internal strategic plans or other internal planning-related documentation or in the event such planned services have been presented to or considered by the Company’s Board of Directors or the Company’s officers, unless the Board of Directors or officer, as applicable, have abandoned or made a determination not to pursue such plans.

i.    “Confidential Information” means any confidential information including, without limitation, any study, data, calculations, software, storage media or other compilation of information, patent, patent application, copyright, “know-how”, trade secrets, customer or prospective customer lists or information, details of client, consultant, vendor, supplier or manufacturer contracts, pricing policies, operational methods, marketing plans or strategies, product development techniques or plans, business acquisition plans or any portion or phase of any scientific or technical information, ideas, discoveries, designs, computer programs (including source or object codes), processes, procedures, formulae, improvements or other proprietary or intellectual property of any company in the Company Group, whether or not in written or tangible form, and whether or not registered, and including all files, records, manuals, books, catalogues, memoranda, notes, summaries, plans, reports, records, documents and other evidence thereof. Notwithstanding the foregoing, the term Confidential Information does not include, and

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there shall be no obligation hereunder with respect to, information that is or becomes generally available to the public other than as a result of a disclosure by the Employee not permissible hereunder.

j.    “Disability” means Employee is either:

(i)    determined to be totally disabled by the Social Security Administration; or

(ii)    determined to be disabled pursuant to the Company’s disability plans for a period of at least six (6) months in any twelve (12) month period.

k.    “Good Reason,” when used with reference to a voluntary termination by Employee of Employee’s employment with the Company, shall mean any of the following conditions, provided Employee provides the Company with actual notice of the condition giving rise to the termination within sixty (60) days of Employee’s knowledge of the initial existence of the condition, provides the Company with the opportunity to cure within thirty (30) days of the notice, and terminates employment within one hundred twenty days (120) of Employee’s first obtaining knowledge of the initial existence of the condition:

(i)    A material diminution in Employee’s authority, duties or responsibilities; provided that, a material diminution of Employee’s authority, duties or responsibilities shall be deemed to have occurred if Employee ceases to have such authorities, duties or responsibilities with respect to the entity which is the ultimate parent entity of the Company Group following a Change of Control; or

(ii)    A requirement that Employee report to any person or entity other than the Board of Directors or the CEO of the Company; or

(i)    A material change in the geographic location at which the Employee must perform the services, including a change in the location of the Company’s principal office which requires Employee’s ordinary commuting distance to increase by fifty (50) or more miles; or

(ii)    Any other action or inaction that constitutes a material breach by the Company of this Agreement and such breach is not cured as set forth above.

l.    “Market” means the United States. If a court, arbitrator or arbitration panel finds that this definition of Market is unreasonable, then the Market will be considered to mean all states in which the Company has provided services to a customer. If a court, arbitrator or arbitration panel finds the definition of Market contained in the preceding sentence is unreasonable, then the Market shall mean all states in which the Company has provided services to a customer during the twelve (12) month period prior to the Termination Date.

m.    “Position” means the particular position of Executive Vice President, Chief Legal Officer and Corporate Secretary.

n.    “Regulations” means any laws, ordinances, regulations or rules of any governmental, regulatory or administrative body, agent or authority, any court or judicial authority, or any public, private or industry regulatory authority.

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o.    “Specified Employee” means any Company employee that the Company determines is a Specified Employee within the meaning of Section 409A of the Code and the regulatory and other guidance promulgated thereunder (“Code Section 409A”). The Company shall determine whether an employee is a Specified Employee by applying reasonable, objectively determinable identification procedures compliant with Code Section 409A.

p.    “Term of Employment” means the period commencing on the Effective Date and terminating in accordance with this Agreement.

q.    “Termination Date” shall mean the last day of Employee’s employment with the Company.

3.    Nature of Employment. Subject to the terms of this Agreement, the Company hereby agrees to continue to employ Employee in the Position, and Employee hereby agrees to accept the continuation of such employment in the Position, for the Term of Employment under this Agreement.

4.    Extent of Employment. While employed:

a.    Employee shall perform the duties of the Position faithfully and to the best of Employee’s ability at the principal offices of the Company or in such locations as may be designated from time to time by the Company or as may be necessary to fulfill the duties of the Position, except for reasonable travel in connection with the Company’s business incident to the performance of Employee’s duties. Such duties shall include, but not be limited to, those typical of the Chief Legal Officer of a public reporting company with equity securities listed and traded on a national securities exchange and such other duties as may be reasonably specified from time to time by the Board of Directors or the CEO of the Company. Employee shall report to the CEO of the Company, or as otherwise directed by the Board of Directors.

b.    Employee shall abide by the policies, rules, customs, and usages as established by or existing at the Company.

c.    Employee shall devote all of Employee’s business time, energy and skill as may be reasonably necessary for the performance of the duties, responsibilities, and obligations of the Position. With the approval of the CEO or the Board of Directors, which shall not be unreasonably withheld, Employee may serve (i) in any capacity with any civic, educational or charitable organization and/or (ii) as a member of the board of directors of no more than two (2) companies (other than the Company), in each case provided such services do not interfere with Employee’s obligations to the Company.

d.    Employee shall not knowingly breach or violate any Regulations or rules of any governmental or regulatory body in any material respect and shall not act in any manner which might reasonably be expected to have a material adverse effect on the ongoing business, properties, assets, operations, condition (financial or other), business relationships or prospects of any company in the Company Group.

e.    Employee shall not commit or engage in any conduct, through action or omission, which would constitute any of the offenses set forth in the definition of “Cause” under this Agreement.

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f.    Employee agrees to live in the Phoenix, Arizona metropolitan area.

5.    Compensation. While Employee is employed by the Company, the Company shall pay Employee:

a.    Base Salary. A base salary, paid in accordance with the Company’s normal payroll schedule, at a rate of $400,000 per annum (the “Base Salary”). The Board of Directors or its Compensation Committee, as applicable, shall annually, and in its sole discretion, determine whether the Base Salary should be increased and, if so, in what amount.

b.    Equity‑Based Compensation. In the discretion of the Board, the Employee may receive grants of restrictive shares of the Company’s stock, stock options, and other equity-based compensation, which shall be subject to the terms of any applicable plan, award agreements or other instruments pursuant to which such equity-based compensation is issued to the Company’s executives. Vesting terms will be determined at the date of grant.

c.    Incentive Plans. Employee shall be eligible to participate in and receive benefits under the Company’s executive incentive plans in accordance with and subject to the terms of such plans, including, without limitation, the Nuverra Environmental Solutions, Inc. 2009 Equity Incentive Plan and the Company’s 2014 Executive Incentive Plan (the “EIP”) and 2014 Senior Executive Incentive Plan (the “SEIP”) (collectively, the “Incentive Plans”), which may be adopted, amended or terminated from time to time in the Company’s discretion. Employee’s participation level in such plans (determined on a percentage of salary basis) shall not be less than the participation level of other named executive officers of the Company other than the CEO (subject to any applicable performance and/or vesting criteria).

d.    Clawback. The provisions of Section 5.b and 5.c shall be subject to any clawback policy required by applicable Regulations of the Securities and Exchange Commission and adopted by the Company in accordance with such Regulations.

6.    Reimbursement of Expenses. While Employee is employed, the Company shall reimburse Employee for reasonably documented travel expenses, entertainment and other expenses reasonably incurred by Employee in connection with the performance of the duties of the Position and, in each case, according to the reasonable rules, policies, customs and procedures promulgated by the Company from time to time. All reimbursements shall be made within thirty (30) days of Employee’s submission of any reasonably documented expense reimbursement claim, but no later than the last day of the year immediately following the year in which the expense was incurred. The amount of expenses eligible for reimbursement provided during one (1) taxable year shall not affect the amount of expenses eligible for reimbursement or in-kind benefits provided during any other taxable year. Employee may not elect to receive cash or any other benefit in lieu of the reimbursements provided by this Section.

7.    Benefits. While Employee is employed, the Employee shall be entitled to perquisites and benefits established from time to time, at the sole discretion of the Board of Directors for the Position, including without limitation, health, short and long term disability, pension and life insurance benefits consistent with past practice, or as increased from time to time; provided that the perquisites and benefits provided to Employee shall be at least substantially equal to those provided to any other officer of the Company.

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8.    Termination of Employment for Cause or without Good Reason. At any time during the Term of Employment, the Company may terminate Employee’s employment for Cause effective upon the giving to Employee a written notice of termination. If Employee’s employment is terminated for Cause or Employee voluntarily terminates Employee’s employment without Good Reason, Employee shall be entitled to:

a.    Payment of accrued and unpaid base salary and unused vacation through the Termination Date in accordance with applicable law;

b.    Reimbursement for expenses incurred through the Termination Date as set forth in Section 6.

9.    Termination of Employment without Cause, for Good Reason, upon Change of Control, or due to the Death or Disability of Employee. During the Term of Employment, the Company may terminate Employee’s employment without Cause and without providing notice to Employee, and Employee may terminate Employee’s employment with the Company for Good Reason. Employee’s death or Disability shall cause a termination of Employee’s employment.

a.     Termination Without Cause or For Good Reason -- No Change of Control. During the Term of Employment, if Employee is terminated by the Company without Cause or if Employee terminates Employee’s employment for Good Reason, either of which occurs without a Change of Control, Employee shall be entitled to the following items within sixty (60) days following the Termination Date (except as provided in Section 9.a.(iii) below) so long as Employee has signed and not revoked the Release described in Section 12 below during such sixty (60) day period (provided, however, consistent with Section 12, if the sixty (60) day period begins in one calendar year and ends in a second calendar year, payments will be made in the second calendar year):

(i)    The Company shall provide the items set forth in Section 8.a. and 8.b. above.

(ii)    The Company shall pay to Employee a lump sum severance pay amount equal to the sum of (aa) twelve (12) months of the Base Salary in effect immediately prior to the Termination Date, and (bb) twelve (12) months of the Company’s COBRA premiums in effect on the Termination Date (based on Employee’s coverage status under the Company’s group health plan on the Termination Date).

(iii)    The Company shall pay Employee a lump sum amount equal to at least one hundred percent (100%) of the bonus or bonuses attributable to the fiscal year during which the Termination Date occurs if such bonus or bonuses would have been earned and paid but for the termination of Employee’s employment. Notwithstanding the requirement stated in this Section 9.a. above to provide amounts within sixty (60) days following the Termination Date, the payment required under this Section 9.a.(iii) shall be paid to Employee on the same date as such fiscal year bonuses are paid to the Company’s active employees in the next year, which is the date Employee would have received such bonus payment had Employee remained continuously employed by the Company.

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(iv)    Acceleration in full, effective as of the Termination Date, of the vesting and or exercisability of all then outstanding equity awards (excluding such portion of any equity awards (A) whose vesting is based on performance-based criteria and (B) that is intended to constitute “qualified performance-based compensation” within the meaning of Section 162(m) of the Code (other than options granted at fair market value) (each, a “Performance-Based Award”)) held by Employee. The time-based vesting and exercisability (if any) of all Performance-Based Awards held by Employee shall accelerate effective as of the Termination Date, and any Performance-Based Award shall become vested and exercisable only if the applicable performance-based criteria are satisfied at the end of the applicable period relating to such award, at which time such Performance-Based Award shall become fully vested and exercisable. The term of any option that is treated as a Performance-Based Award shall include any period referred to in the preceding sentence during which the option shall not be terminated. Any Performance-Based Award for which the performance criteria are not satisfied within the applicable performance period shall terminate at the end of such period.

(v)    Employee’s participation in and/or coverage under all other employee benefit plans, programs or arrangements sponsored or maintained by the Company shall cease to be effective as of the Termination Date, unless such benefit, program or plan is inalienable under the law.

b.    Termination Without Cause or For Good Reason -- Change of Control. During the Term of Employment, if Employee is terminated by the Company without Cause or if Employee terminates Employee’s employment for Good Reason, either of which occurs within twelve (12) months after a Change of Control, or if Employee is terminated by the Company without Cause within six (6) months prior to a Change of Control if such termination was in contemplation of such Change in Control, Employee shall be entitled to the following items within sixty (60) days following the Termination Date so long as Employee has signed and not revoked the release described in Section 12 below during such sixty (60) day period (provided, however, consistent with Section 12, if the sixty (60) day period begins in one calendar year and ends in a second calendar year, payments will be made in the second calendar year):

(i)    Except as provided in Section 9.b.(iii) and (iv), all of the payments and benefits as set forth in Section 9.a. above;

(ii)    An additional lump sum severance payment equal the sum of (aa) 1.9 times the Base Salary in effect immediately prior to the Termination Date, and (bb) twelve (12) months of the Company’s COBRA premiums in effect on the Termination Date (based on Employee’s coverage status under the Company’s group health plan on the Termination Date);

(iii)    In lieu of payment pursuant to Section 9.a.(iii), a lump sum payment equal to one hundred percent (100%) of all bonuses attributable to the fiscal year during which the Termination Date occurs at target; and

(iv)    Acceleration in full, effective as of the Termination Date, of all Performance-Based Awards regardless of whether or not such Performance-Based Awards would become vested and exercisable pursuant to Section 9.a.(iv).

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c.    Disability. Unless otherwise prohibited by law, Employee’s employment with the Company will terminate on the effective date of Employee’s Disability. The effective date of Employee’s Disability, which will be Employee’s Termination Date for purposes of this Section 9.c., is the last day of the third (3^rd) month on which Employee receives disability benefits pursuant to a Company sponsored disability plan or the day on which Employee is determined to be totally disabled by the Social Security Administration. Employee shall be entitled to the following items within sixty (60) days following the Termination Date of Employee’s employment termination due to Disability, so long as Employee has signed and not revoked the release described in Section 12 below during such sixty (60) day period ( provided, however, consistent with Section 12, if the sixty (60) day period begins in one calendar year and ends in a second calendar year, payments will be made in the second calendar year):

(i)    All the payments and benefits set forth in Section 9.a.(i), (iv) and (v); and

(ii)    Disability benefits under the applicable plan or practice.

d.    Death. If Employee dies during the Term of Employment , Employee’s estate shall be entitled to the following items:

(iii)    All the payments and benefits set forth in Section 9.a.(i), (iv) and (v); and

(iv)    Employee’s dependents, if any, who are covered by the Company’s group health plan at the time of Employee’s death shall be eligible for the COBRA continuation coverage.

e.    If any payment or benefit Employee would receive under this Agreement, when combined with any other payment or benefit Employee receives pursuant to the termination of Employee’s employment with the Company (“Payment”), would:

(i)    constitute a “parachute payment” within the meaning of Section 280G of the Code, and

(ii)    but for this sentence, be subject to the excise tax imposed by Section 4999 of the Code (the “Excise Tax”), then such Payment shall be whichever of the following amounts, taking into account the applicable federal, state and local employment taxes, income taxes, and the Excise Tax, results in Employee’s receipt, on an after-tax basis, of the greater amount of the Payment notwithstanding that all or some portion of the Payment may be subject to the Excise Tax:

(a)the full amount of such Payment; or

(a)    such lesser amount (with cash payments being reduced) as would result in no portion of the Payment being subject to the Excise Tax.

(iii)    All determinations required to be made under this Section 9.f., including whether and to what extent the Payments shall be reduced and the assumptions to be utilized in arriving at such determination, shall be made by a national independent accounting firm registered with the Public Company Accounting Oversight Board as will

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be designated by the Company (the “Accounting Firm”). The Accounting Firm shall provide detailed supporting calculations both to Employee and the Company at such time as is requested by the Company. All fees and expenses of the Accounting Firm shall be borne solely by the Company. For purposes of making the calculations required by this Section 9.f., the Accounting Firm may make reasonable assumptions and approximations concerning applicable taxes and may rely on reasonable, good-faith interpretations concerning the application of Sections 280G and 4999 of the Code.

(iv)    To the extent any reduction of the Payments becomes necessary pursuant to this Section 9.e., the reduction first shall apply to amounts payable pursuant to this Section 9, or pursuant to any other arrangement, that are not subject to Section 409A of the Code. If the amount of the necessary reduction exceeds the amount of the payments described in the preceding sentence, the reduction will then apply on a proportional basis to amounts payable to Employee that are subject to the requirements of Section 409A of the Code.

f.    Notwithstanding any other provision of this Agreement to the contrary, neither the time nor the schedule of any payment under this Agreement may be accelerated or subject to a further deferral except as provided in 26 C.F.R. § 1.409A-3(j)(4) or to the extent such payment constitutes a “short-term deferral” within the meaning of Code Section 409A.

g.    The Employee does not have any right to make any election regarding the time or form of any payment due under this Agreement.

h.    If the Company fails to make any payment under this Agreement, either intentionally or unintentionally, within the time period specified in this Agreement, but the payment is made within the same calendar year, such payment will be treated as made within the time period specified in the Agreement pursuant to 26 C.F.R. § 1.409A-3(d). In addition, if a payment is not made due to a dispute with respect to such payment, the payment may be delayed in accordance with 26 C.F.R. § 1.409A-3(g).

i.    For purposes of this Agreement, Employee’s Termination Date shall be the date on which Employee incurs a “Separation from Service.” For this purpose, the term “Separation from Service” means either (1) the termination of Employee’s employment with the Company and all affiliates, or (2) a permanent reduction in the level of bona fide services that Employee provides to the Company and all affiliates to an amount that is 20% or less of the average level of bona fide services that Employee provided to the Company and all affiliates in the immediately preceding thirty-six (36) months, with the level of bona fide services to be calculated in accordance with regulations issued by the United States Treasury Department pursuant to Section 409A of the Code.

Employee’s relationship is treated as continuing while Employee is on military leave, sick leave, or other bona fide leave of absence (if the period of such leave does not exceed six (6) months, or if longer, so long as Employee’s right to reemployment with the Company or an affiliate is provided either by statute or contract). If Employee’s period of leave exceeds six (6) months and Employee’s right to reemployment is not provided either by statute or by contract, the relationship between Employee and the Company is deemed to terminate on the first (1^st) day immediately following the expiration of such six (6) month period. Whether a termination has occurred will be determined based on all of the facts and circumstances.

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For purposes of this paragraph, the term “affiliate” shall have the meaning set forth in 26 C.F.R. § 1.409A-1(h)(3) (which generally requires 50% common ownership).

If Employee is providing services to the Company in more than one (1) capacity, for example as both an employee and a member of the Board of Directors or an independent contractor for the Company, Employee must terminate employment with or services to the Company in all capacities in order to have a Separation from Service for purposes of this Agreement.

j.    This Agreement shall be administered in compliance with Section 409A of the Code or an exception thereto, including, without limitation, the short-term deferral exception within the meaning of 26 C.F.R.§1.409A-1(b)(4) and separation pay due to involuntary separation from service within the meaning of 26 C.F.R.§1.409A-1(b)(9)(iii). Each provision of the Agreement shall be interpreted, to the extent possible, to comply with Section 409A or an exception thereto. Payments pursuant to this section are intended to constitute separate payments for purposes of 26 C.F.R. § 1.409A-2(b)(2).

Notwithstanding any of the foregoing, if the Employee is a Specified Employee on the Termination Date, all payments and benefits that constitute nonqualified deferred compensation within the meaning of Code Section 409A that do not satisfy the requirements of an exception to Code Section 409A, if any, that are to be made following the fifteenth (15^th) day of the third (3^rd) month of the Employee’s taxable year following the Employee’s taxable year in which the Termination Date occurred, but before the date which is six (6) months following the Termination Date, shall be delayed and paid in a lump-sum on the first (1^st) day of the seventh (7^th) month following the Employee’s Termination Date or, if earlier, the date the Employee dies following the Termination Date.

10.    Mitigation or Reduction of Benefits. In the event of termination of employment as set forth in Section 9 above, Employee shall not be required to mitigate the amount of any payment provided for in that Section by seeking other employment or otherwise. Except as otherwise specifically set forth herein, the amount of any payment or benefits provided in Section 9 shall not be reduced by any compensation or benefits or other amounts paid to or earned by Employee as the result of employment by another employer after the Termination Date.

11.    Effect of Change of Control on Existing Equity Awards. Notwithstanding any provision to the contrary contained in any plan or agreement evidencing an equity award granted to Employee by the Company (unless such plan or agreement expressly disclaims this Section 11) and except as otherwise provided by Section 9.h, in the event of a Change of Control in which both (a) the surviving, continuing, successor, or purchasing corporation or other business entity or parent thereof, as the case may be (the “Acquiring Corporation”), does not assume or continue the Company’s rights and obligations under such then-outstanding equity awards of Employee or substitute for such then-outstanding equity awards of Employee substantially equivalent in fair market value of equity awards for the Acquiring Corporation’s capital stock, and (b) the Company does not cancel such equity awards of Employee in exchange for payment to Employee with respect to each vested and unvested share underlying such equity award in cash or other property having a fair market value equal to the fair market value of the consideration to be paid per share of common stock of the Company pursuant to the Change of Control transaction (less the exercise price per share subject to the award, if applicable), then the

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vesting, exercisability and settlement of such equity awards which are not assumed, continued, substituted for or canceled in exchange for payment by the Company shall be accelerated in full effective immediately prior to but conditioned upon the consummation of the Change of Control, provided that Employee remains an employee of the Company immediately prior to the Change of Control.

12.    Release. In order to receive payments and benefits described in Section 9, other than those provided in Section 8 and those provided in the event of Employee’s death, Employee must execute a Release substantially in the form attached as Exhibit A, and that Release must become effective by Employee not revoking it. If Employee fails to sign the Release within the period provided in the Release, or if Employee revokes the Release within the seven (7) day revocation period provided therein, Employee will forfeit any right to the payments and benefits described in Section 9. As a general rule, Employee shall receive the Release from the Company on or before Employee’s Termination Date, but in no event will Employee receive the Release more than ten (10) days following Employee’s Termination Date. Notwithstanding anything in this Agreement to the contrary, if the period during which Employee may consider and revoke the Release spans two (2) calendar years, any payments to which Employee is entitled pursuant to Sections 9.a.(ii), 9.b.(ii) and 9.c.(i) shall be made in the second (2^nd) calendar year.

13.    Covenant Not to Compete. In consideration of this Agreement, and the employment under it, the parties agree to the following Covenant Not to Compete.

a.    Post-Termination Restrictions. Employee acknowledges that the services provided under this Agreement give Employee the opportunity to have special knowledge of the Company, its Confidential Information, and the capabilities of individuals employed by or affiliated with the Company. Employee further acknowledges that interference with those business or employment relationships with the Company would cause irreparable injury to the Company. Consequently, Employee covenants and agrees as follows:

(v)    Non-Competition. From the Effective Date hereof until twelve (12) months after the Termination Date, without the express written approval of a majority of the Board of Directors, Employee will not directly or indirectly, Compete against Company anywhere in the Market.

(vi)    Non-Solicitation. From the effective date hereof until twelve (12) months after the Termination Date (which shall not be reduced by (a) any period of violation of this Agreement by Employee or (b) if the Company is the prevailing party in any litigation to enforce its rights under this Section 13, the period which is required for such litigation), Employee will not, without the express prior written approval of a majority of the Board of Directors, directly or indirectly: (i) recruit, solicit or otherwise induce or influence any proprietor, partner, stockholder, lender, director, officer, employee, sales agent, joint venturer, investor, lessor, customer, agent, representative or any other person which has a business relationship with the Company or had a business relationship with the Company within the twelve (12) month period preceding the date of the incident in question, to discontinue, reduce or modify such employment, agency or business relationship with the Company; or (ii) employ or seek to employ or cause any Competitive Business to employ or seek to employ any person or agent who is then (or was at any time within twelve (12) months prior to the date the Employee or the Competitive Business employs or seeks to employ such person) employed or retained by

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the Company. Notwithstanding the foregoing, nothing herein shall prevent the Employee from providing a personal letter of recommendation to an employee of the Company with respect to a future or any other employment opportunity.

b.    Acknowledgment Regarding Restrictions. Employee recognizes and agrees that the restraints contained in Section 13 (both separately and in total) are reasonable and should be fully enforceable in view of the high level positions Employee has had with the Company, and the Company’s legitimate interests in protecting its Confidential Information and its goodwill and relationships. Employee specifically hereby acknowledges and confirms that Employee is willing and intends to, and will, abide fully by the terms of Section 13 of this Agreement. Employee further agrees that the Company would not have adequate protection if Employee were permitted to work in a Competitive Business in violation of the terms of this Agreement since the disclosure of Confidential Information is inevitable and the Company would be unable to verify whether its Confidential Information was being disclosed and/or misused. Employee further specifically acknowledges that the scope and term of this Section 13 would not preclude Employee from earning a living in an occupation or position with an entity that is not a Competitive Business.

c.    Company’s Right to Cease and Recoup Payments and Obtain Injunctive Relief. In the event of a breach or imminent breach of any of Employee’s duties or obligations under this Agreement, provided the Company has provided Employee with written notice specifying the breach or imminent breach and Employee has failed to cure such breach or has committed such imminent breach within five (5) calendar days of such notice, the Company shall be entitled to immediately cease all payments and benefits to Employee under Section 9 and, in the event of an actual breach, require Employee to disgorge and repay to Company all payments and benefits previously paid to or conferred upon Employee under Section 9 of this Agreement after the commencement of Employee’s breach. Employee agrees that if Employee breaches any duties or obligations Employee has under Section 13 and/or Section 14 of this Agreement, that, except for sums set forth in Section 8, Employee has no right to any money or benefits under Section 9 of this Agreement and that Employee must return any money paid to Employee under that section. In addition to any other legal or equitable remedies the Company may have (including any right to damages that it may suffer), the Company shall be entitled to temporary, preliminary and permanent injunctive relief restraining such breach or imminent breach without being required to post a bond, surety or other security therefor. Employee hereby expressly acknowledges that the harm which might result to Company’s business as a result of noncompliance by Employee with any of the provisions of this Agreement would be largely irreparable. Each party undertakes and agrees that if she/it breaches or threatens to breach the Agreement, she/it shall be liable for any attorneys’ fees and costs incurred by the other party in enforcing its rights hereunder.

d.    Employee Agreement to Disclose this Agreement. Employee agrees to disclose the terms of this Agreement to any potential future employer, and Employee consents to the Company’s disclosure of the terms of this Agreement to any potential future employer.

e.    Survival. The terms of this entire Section 13 shall survive the termination of Employee’s employment under this Agreement regardless of who terminates employment or the reasons therefore.

- 13 -

14.    Confidential Information.

a.    During and after the Term of Employment, Employee will not, directly or indirectly, in one (1) or a series of transactions, disclose to any person, or use or otherwise exploit for the Employee’s own benefit or for the benefit of anyone other than the Company, any Confidential Information, whether prepared by Employee or not; provided, however, that any Confidential Information may be disclosed (i) to officers, representatives, employees and agents of the Company who need to know such Confidential Information in order to perform the services or conduct the operations required or expected of them in the business, and (ii) in good faith by the Employee in connection with the performance of Employee’s duties hereunder to persons who are authorized to receive such information by the Company. Employee shall use Employee’s best efforts to prevent the removal of any Confidential Information from the premises of the Company, except as required in Employee’s normal course of employment by the Company. Employee shall use Employee’s best efforts to cause all persons or entities to whom any Confidential Information shall be disclosed by Employee hereunder to observe the terms and conditions set forth herein as though each such person or entity was bound hereby. Employee shall have no obligation hereunder to keep confidential any Confidential Information, if and to the extent disclosure of any such information is specifically required by law or requested by a governmental agency; provided, however, that in the event disclosure is required by applicable law or requested by a governmental agency, the Employee shall provide the Company with prompt notice of such requirement or request, prior to making any disclosure, so that the Company may seek an appropriate protective order. At the request of the Company, Employee agrees to deliver to the Company, at any time during the Term of Employment, or thereafter, all Confidential Information which Employee may possess or control. Employee agrees that all Confidential Information of the Company (whether now or hereafter existing) conceived, discovered or made by Employee during the Term of Employment exclusively belongs to the Company (and not to Employee). Employee will promptly disclose such Confidential Information to the Company and perform all actions reasonably requested by the Company to establish and confirm such exclusive ownership.

b.    The terms of this entire Section 14 shall survive the termination of Employee’s employment under this Agreement regardless of who terminates employment or the reasons therefore.

15.    Indemnification and Insurance. Employee will be covered under the Company’s insurance policies and, subject to applicable law, will be provided indemnification to the maximum extent permitted by applicable law and by the Company’s bylaws, Certificate of Incorporation and standard form of Indemnification Agreement, if any, with such insurance coverage and indemnification to be in accordance with the Company’s standard practices for senior executive officers but on terms no less favorable than provided to other Company senior executive officers.

16.    Notice. All notices hereunder shall be in writing and shall be deemed to have been duly given (a) when delivered personally or by courier, or (b) on the third (3^rd) business day following the mailing thereof by registered or certified mail, postage prepaid, or (c) on the first (1^st) business day following the mailing thereof by overnight delivery service, in each case addressed as set forth below:

- 14 -

If to the Company:

Nuverra Environmental Solutions, Inc.

14624 North Scottsdale Road, Suite 300

Scottsdale, Arizona 85254

Attention: Chief Executive Officer

With a copy to:

Nuverra Environmental Solutions, Inc.

14624 North Scottsdale Road, Suite 300

Scottsdale, Arizona 85254

Attention: Vice President of Human Resources

If to Employee:

Joseph M. Crabb

11621 South 71^st Street

Tempe, Arizona 85284

Any party may change the address to which notices are to be addressed by giving the other party written notice in the manner herein set forth.

17.    Agreement to Arbitrate. Except with respect to an action the Company to enforce the terms of Sections 13 or 14, which may be commenced and venued in the state or federal courts located in Phoenix, Arizona, all disputes or claims regarding this Agreement, Employee’s employment with the Company or the termination of Employee’s employment shall be submitted for resolution exclusively to binding arbitration under the Employment Arbitration Rules of the American Arbitration Association in Maricopa County, Arizona. The parties shall bear their own attorneys’ fees, and shall bear equally the expenses of the arbitral proceedings, including without limitation the fees of the arbitrator.

18.    Successors; Binding Agreement.

a.    The Company will require any successor (whether direct or indirect, by purchase, merger, consolidation or otherwise) to all or substantially all of the business and/or assets of the Company, upon or prior to such succession, to expressly assume and agree to perform this Agreement in the same manner and to the same extent that the Company would have been required to perform it if no such succession had taken place. A copy of such assumption and agreement shall be delivered to Employee promptly after its execution by the successor. Failure of the Company to obtain such agreement upon or prior to the effectiveness of any such succession shall be deemed to be a material breach of this Agreement. As used in this Agreement, “Company” shall mean the Company as hereinbefore defined and any successor to its business and/or assets as aforesaid which executes and delivers the agreement provided for in this Section 18 or which otherwise becomes bound by the terms and provisions of this Agreement by operation of law.

- 15 -

b.    This Agreement is personal to Employee, and Employee may not assign or delegate any part of Employee’s rights or duties hereunder to any other person, except that this Agreement shall inure to the benefit of, and be enforceable by, Employee’s legal representatives, executors, administrators, heirs and beneficiaries.

19.    Severability. If any provision of this Agreement or the application thereof to any person or circumstance shall to any extent be held to be invalid or unenforceable, the remainder of this Agreement and the application of such provision to persons or circumstances other than those as to which it is held invalid or unenforceable shall not be affected thereby, and each provision of this Agreement shall be valid and enforceable to the fullest extent permitted by law. A court, arbitrator or arbitration panel may reasonably modify this Agreement by rewriting it and/or may “blue-pencil” this Agreement by striking things out.

20.    Headings. The headings in this Agreement are inserted for convenience of reference only and shall not in any way affect the meaning or interpretation of this Agreement.

21.    Counterparts. This Agreement may be executed in one (1) or more identical counterparts, each of which shall be deemed an original but all of which together shall constitute one (1) and the same instrument.

22.    Waiver. Neither any course of dealing nor any failure or neglect of either party hereto in any instance to exercise any right, power or privilege hereunder or under law shall constitute a waiver of such right, power or privilege or of any other right, power or privilege or of the same right, power or privilege in any other instance. Without limiting the generality of the foregoing, Employee’s continued employment without objection shall not constitute Employee’s consent to, or a waiver of, Employee’s rights with respect to any circumstances constituting Good Reason. All waivers by either party hereto must be contained in a written instrument signed by the party to be charged therewith.

23.    Entire Agreement. This instrument constitutes the entire agreement of the parties in this matter and shall supersede any other agreement between the parties, oral or written, concerning the same subject matter.

24.    Amendment. This Agreement may be amended only by a writing which makes express reference to this Agreement as the subject of such amendment and which is signed by Employee and by the Chairman of the Compensation Committee of the Board of Directors or the Chairman’s designee.

25.    Governing Law. This Agreement shall be interpreted in accordance with and governed by the laws of the State of Delaware, without regard for any conflict/choice of law principles.

26.    Taxes. All payments and benefits under this Agreement are subject to applicable tax withholdings, and the tax treatment of such payments and benefits is not warranted or guaranteed by the Company. Neither the Company nor its affiliates shall be liable for any taxes, penalties, or other monetary amounts owed by Employee or any other person as a result of any payments or the provision of any benefits under this Agreement.

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[Signatures appear on following page.]

- 17 -

IN WITNESS WHEREOF, Employee and the Company have executed this Agreement as of the day and year first above written.

NUVERRA ENVIRONMENTAL SOLUTIONS, INC.

By:	/s/ Mark D. Johnsrud
Its:	February 5, 2016

EMPLOYEE:

 /s/ Joseph M. Crabb

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SCHEDULE 1

Companies in the Company Group consist of:

Nuverra Environmental Solutions, Inc.

Heckmann Water Resources Corp

Heckmann Water Resources (CVR), Inc.

HEK Water Solutions, LLC

1960 Well Services, LLC

Appalachian Water Services, LLC

Badlands Powers Fuels, LLC

Badlands Leasing, LLC

Badlands Leasing, LLC

Nuverra Rocky Mountain Pipeline, LLC

Landtech Enterprises, LLC

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Exhibit A
RELEASE

This RELEASE (the “Release”) dated, is by and between {*} (“Employee”) and {Nuverra Environmental solutions, Inc.}, Inc., (“Company”);

WHEREAS, the Company and Employee are parties to an Employment Agreement dated {*} (the “Employment Agreement”), which provides certain protection to Employee during employment and upon termination of employment; and

WHEREAS, the execution of this Release is a condition precedent to, and material inducement to, the Company’s provision of certain benefits under the Employment Agreement;

NOW, THEREFORE, the parties hereto agree as follows:

1.Mutual Promises. The Company undertakes the obligations contained in the Employment Agreement, which are in addition to any compensation to which Employee might otherwise be entitled, in exchange for Employee’s promises and obligations contained herein. The Company’s obligations are undertaken in lieu of any other employment benefits.

2.Release of Claims; Agreement Not to File Suit.

a.Employee, for and on behalf of him or herself and his/her heirs, beneficiaries, executors, administrators, successors, assigns and anyone claiming through or under any of the foregoing, agrees to, and does, release and forever discharge the Company and its subsidiaries and affiliates, each of their shareholders, directors, officers, employees, agents and representatives, and its successors and assigns (collectively, the “Company Released Persons”), from any and all matters, claims, demands, damages, causes of action, debts, liabilities, controversies, judgments and suits of every kind and nature whatsoever, foreseen or unforeseen, known or unknown, which have arisen or could arise from matters which occurred prior to the date of this Release, which matters include without limitation: (i) the matters covered by the Employment Agreement and this Release, and (ii) Employee’s employment, and/or termination from employment with the Company.

b.Employee, for and on behalf of him or herself and his/her heirs, beneficiaries, executors, administrators, successors, assigns, and anyone claiming through or under any of the foregoing, agrees that Employee will not file or otherwise submit any arbitration demand, claim, complaint, or action to any court, organization, or judicial forum (nor will Employee permit any person, group of persons, or organization to take such action on Employee’s behalf) against any Company Released Person arising out of any actions or non-actions on the part of any Company Released Person arising out of the parties’ employment relationship before the date of this Release or any action taken after the date of this Release pursuant to the Employment Agreement. Employee further agrees that in the event that any person or entity should bring such a charge, claim, complaint, or action on Employee’s behalf, Employee hereby waives and forfeits any right to recovery under said claim and will exercise every good faith effort to have such claim dismissed.

c.The charges, claims, complaints, matters, demands, damages, and causes of action referenced in Sections 2(a) and 2(b) include, but are not limited to: (i) any breach of an actual or implied contract of employment between Employee and any Company Released Person, (ii) any

-1-

claim of unjust, wrongful, or tortious discharge (including, but not limited to, any claim of fraud, negligence, retaliation for whistle blowing, or intentional infliction of emotional distress), (iii) any claim of defamation or other common law action, or (iv) any claims of violations arising under the Civil Rights Act of 1964, as amended, 42 U.S.C. §§2000e et seq., the Age Discrimination in Employment Act, 29 U.S.C. §§621 et seq., the Americans with Disabilities Act of 1990, 42 U.S.C. §§12101 et seq., the Fair Labor Standards Act of 1938, as amended, 29 U.S.C. §§201 et seq., the Rehabilitation Act of 1973, as amended, 29 U.S.C. §§701 et seq., the Family and Medical Leave Act, or any other relevant federal, state, or local statutes or ordinances, or any claims for pay, vacation pay, insurance, or welfare benefits or any other benefits of employment with any Company Released Person arising from events occurring prior to the date of this Release other than those payments and benefits specifically provided herein.

d.This Release shall not affect Employee’s right to any governmental benefits payable under any Social Security or Worker’s Compensation law now or in the future.

e.This Release does not affect Employee’s right to participate in any federal, state or local investigation by any governmental agency or to challenge the validity of this Agreement. Further, this Release is not intended to be a release of any claims under the Arizona Minimum Wage Act.

f.This Release does not release any claim for payments under Section 9 of the Agreement or any (i) rights of indemnification pursuant to applicable law, Company Bylaws, or any agreement with the Company or (ii) Employee’s rights under any applicable insurance policy with the Company.

3.Release of Benefit Claims. Employee, for and on behalf of him or herself and his/her heirs, beneficiaries, executors, administrators, successors, assigns and anyone claiming through or under any of the foregoing, further releases and waives any claims for pay, vacation pay, insurance or welfare benefits or any other benefits of employment with any Company Released Person arising from events occurring prior to the date of this Release other than claims to the payments and benefits specifically provided for in the Employment Agreement and claims for benefits which are not subject to waiver under the law.

4.Revocation Period; Knowing and Voluntary Agreement. Employee acknowledges that he/she is knowingly and voluntarily waiving and releasing any rights he/she may have under the Age Discrimination in Employment Act, as amended, (“ADEA”). Employee also acknowledges that the consideration given for the waiver and release in the preceding Section is in addition to anything of value to which he/she would be entitled to without this Agreement. Employee further acknowledges that Employee is advised by this writing, as required by the ADEA, that: (a) this waiver and release do not apply to any rights or claims that may arise after execution date of this Agreement; (b) Employee has been advised of having had the right to consult with an attorney prior to signing this Agreement; (c) Employee has twenty-one (21) days to consider this Agreement (although Employee may choose to voluntarily execute this Agreement earlier); (d) Employee has seven (7) days following the signing of this Agreement by the parties to revoke the Agreement; and (e) this Agreement shall not be effective until the date upon which the revocation period has expired, which shall be the eighth (8^th) day after this Agreement is executed by the Employee.

-2-

5.Nondisparagement. Neither Employee nor the Company will knowingly and materially make any false statements regarding the Company or Employee, respectively, and the Company, in its official statements, will not knowingly and materially make false statements regarding Employee. Notwithstanding the foregoing, nothing contained in this Agreement will be deemed to restrict Employee, the Company or any of the Company’s current or former officers and/or directors from providing information to any governmental or regulatory agency (or in any way limit the content of any such information) to the extent they are requested or required to provide such information pursuant to applicable law or regulation.

6.Severability. If any provision of this Release or the application thereof to any person or circumstance shall to any extent be held to be invalid or unenforceable, the remainder of this Release and the application of such provision to persons or circumstances other than those as to which it is held invalid or unenforceable shall not be affected thereby, and each provision of this Release shall be valid and enforceable to the fullest extent permitted by law.

7.Headings. The headings in this Release are inserted for convenience of reference only and shall not in any way affect the meaning or interpretation of this Release.

8.Counterparts. This Release may be executed in one (1) or more identical counterparts, each of which shall be deemed an original but all of which together shall constitute one (1) and the same instrument.

9.Entire Agreement. This Release and related Employment Agreement constitutes the entire agreement of the parties in this matter and shall supersede any other agreement between the parties, oral or written, concerning the same subject matter.

10.Governing Law. This Release shall be governed by, and construed and enforced in accordance with, the laws of the State of Arizona, without reference to the conflict of laws rules of such State.

IN WITNESS WHEREOF, Employee and the Company have executed this Release as of the day and year first above written.

NUVERRA ENVIRONMENTAL SOLUTIONS, INC.

By:

Its:

EMPLOYEE:

{*}

-3-

EX-31.1

Exhibit 31.1

Certification of Chief Executive Officer Pursuant to 18 U.S.C. Section 1350,

As Adopted Pursuant to Section 302 of the Sarbanes-Oxley Act of 2002

I, Mark D. Johnsrud, certify that:

1. I have reviewed this report on Form 10-Q for the period ended March 31, 2016 of Nuverra Environmental Solutions, Inc.

2. Based on my knowledge, this report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this report.

3. Based on my knowledge, the financial statements, and other financial information included in this report, fairly present in all material respects the financial condition, results of operations and cash flows of the registrant as of, and for, the periods presented in this report.

4. The registrant’s other certifying officer and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in Exchange Act Rules 13a-15(e) and 15d-15(e)) and internal control over financial reporting (as defined in Exchange Act Rules 13a-15(f) and 15d-15(f)) for the registrant and have:

a) Designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under our supervision, to ensure that material information relating to the registrant, including its consolidated subsidiaries, is made known to us by others within those entities, particularly during the period in which this report is being prepared;

b) Designed such internal control over financial reporting, or caused such internal control over financial reporting to be designed under our supervision, to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles;

c) Evaluated the effectiveness of the registrant’s disclosure controls and procedures and presented in this report our conclusions about the effectiveness of the disclosure controls and procedures, as of the end of the period covered by this report based on such evaluation; and

d) Disclosed in this report any change in the registrant’s internal control over financial reporting that occurred during the registrant’s most recent fiscal quarter (the registrant’s fourth fiscal quarter in the case of an annual report) that has materially affected, or is reasonably likely to materially affect, the registrant’s internal control over financial reporting.

5. The registrant’s other certifying officer and I have disclosed, based on our most recent evaluation of internal control over financial reporting, to the registrant’s auditors and the audit committee of the registrant’s board of directors (or persons performing the equivalent functions):

a) All significant deficiencies and material weaknesses in the design or operation of internal controls over financial reporting which are reasonably likely to adversely affect the registrant’s ability to record, process, summarize and report financial information; and

b) Any fraud, whether or not material, that involves management or other employees who have a significant role in the registrant’s internal control over financial reporting.

Date: May 9, 2016

By:	/s/ Mark D. Johnsrud
Name:	Mark D. Johnsrud
Title:	President and Chief Executive Officer (Principal Executive Officer)

EX-31.2

Exhibit 31.2

Certification of Chief Financial Officer Pursuant to 18 U.S.C. Section 1350,

As Adopted Pursuant to Section 302 of the Sarbanes-Oxley Act of 2002

I, Mark D. Johnsrud, certify that:

1. I have reviewed this report on Form 10-Q for the period ended March 31, 2016 of Nuverra Environmental Solutions, Inc.

2. Based on my knowledge, this report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this report.

3. Based on my knowledge, the financial statements, and other financial information included in this report, fairly present in all material respects the financial condition, results of operations and cash flows of the registrant as of, and for, the periods presented in this report.

4. The registrant’s other certifying officer and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in Exchange Act Rules 13a-15(e) and 15d-15(e)) and internal control over financial reporting (as defined in Exchange Act Rules 13a-15(f) and 15d-15(f)) for the registrant and have:

a) Designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under our supervision, to ensure that material information relating to the registrant, including its consolidated subsidiaries, is made known to us by others within those entities, particularly during the period in which this report is being prepared;

b) Designed such internal control over financial reporting, or caused such internal control over financial reporting to be designed under our supervision, to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles;

c) Evaluated the effectiveness of the registrant’s disclosure controls and procedures and presented in this report our conclusions about the effectiveness of the disclosure controls and procedures, as of the end of the period covered by this report based on such evaluation; and

d) Disclosed in this report any change in the registrant’s internal control over financial reporting that occurred during the registrant’s most recent fiscal quarter (the registrant’s fourth fiscal quarter in the case of an annual report) that has materially affected, or is reasonably likely to materially affect, the registrant’s internal control over financial reporting.

5. The registrant’s other certifying officer and I have disclosed, based on our most recent evaluation of internal control over financial reporting, to the registrant’s auditors and the audit committee of the registrant’s board of directors (or persons performing the equivalent functions):

a) All significant deficiencies and material weaknesses in the design or operation of internal control over financial reporting which are reasonably likely to adversely affect the registrant’s ability to record, process, summarize and report financial information; and

b) Any fraud, whether or not material, that involves management or other employees who have a significant role in the registrant’s internal control over financial reporting.

Date: May 9, 2016

By:	/s/ Mark D. Johnsrud
Name:	Mark D. Johnsrud
Title:	President and Chief Executive Officer (Principal Financial Officer)

EX-32.1

Exhibit 32.1

Certification of CEO and CFO Pursuant to 18 U.S.C. Section 1350,

As Adopted Pursuant to Section 906 of the Sarbanes-Oxley Act of 2002

In connection with the report of Nuverra Environmental Solutions, Inc. (the “Company”) on Form 10-Q for the period ended March 31, 2016 as filed with the Securities and Exchange Commission on the date hereof, we, the undersigned, certify, pursuant to 18 U.S.C. Section 1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002, to the best of our knowledge, that:

(1) The report fully complies with the requirements of Section 13(a) of the Securities Exchange Act of 1934 as amended; and

(2) The information contained in the report fairly presents, in all material respects, the financial condition and results of operations of the Company.

Date: May 9, 2016

By:	/s/ Mark D. Johnsrud
Name:	Mark D. Johnsrud
Title:	President and Chief Executive Officer (Principal Executive Officer and Principal Financial Officer)

This certification accompanies this report pursuant to Section 906 of the Sarbanes-Oxley Act of 2002 and shall not be deemed filed by the Company for purposes of Section 18 of the Securities Exchange Act of 1934, as amended or otherwise subject to liability pursuant to that section. The certification shall not be deemed to be incorporated by reference into any filing under the Securities Act or the Exchange Act, except to the extent that the Company specifically incorporates it by reference.

A signed original of this written statement required by Section 906 has been provided to the Secretary of the Company and will be retained by the Office of General Counsel of the Company and furnished to the Securities and Exchange Commission or its staff upon request.

XML

Document and Entity Information - shares	3 Months Ended
	Mar. 31, 2016	Apr. 26, 2016
Document And Entity Information [Abstract]
Document Type	10-Q
Amendment Flag	false
Document Period End Date	Mar. 31, 2016
Document Fiscal Year Focus	2016
Document Fiscal Period Focus	Q1
Trading Symbol	NES
Entity Registrant Name	Nuverra Environmental Solutions, Inc.
Entity Central Index Key	0001403853
Current Fiscal Year End Date	--12-31
Entity Filer Category	Accelerated Filer
Entity Common Stock, Shares Outstanding		31,052,076

XML

Condensed Consolidated Balance Sheets - USD ($) $ in Thousands		Mar. 31, 2016	Dec. 31, 2015
Assets
Cash and cash equivalents		$ 30	$ 39,309
Restricted cash		4,450	4,250
Accounts receivable, net of allowance for doubtful accounts of $3.5 and $3.5 million at March 31, 2016 and December 31, 2015, respectively		30,857	42,188
Inventories		2,715	2,985
Prepaid expenses and other receivables		4,011	3,377
Other current assets		5,744	2,372
Total current assets		47,807	94,481
Property, plant and equipment, net of accumulated depreciation of $219.2 and $209.1 million at March 31, 2016 and December 31, 2015, respectively		391,775	406,188
Equity investments		3,745	3,750
Intangibles, net		16,214	16,867
Other assets		572	1,333
Total assets	[1]	460,113	522,619
Liabilities and Shareholders' Deficit
Accounts payable		7,269	6,907
Accrued liabilities		34,252	29,843
Current portion of contingent consideration		8,500	8,628
Current portion of long-term debt	[2]	463,164	499,709
Total current liabilities		513,185	545,087
Deferred income taxes		295	270
Long-term portion of debt		8,015	11,758
Other long-term liabilities		3,735	3,775
Total liabilities		$ 525,230	$ 560,890
Commitments and contingencies
Shareholders' deficit:
Common stock		$ 30	$ 30
Additional paid-in capital		1,370,298	1,369,921
Treasury stock		(19,807)	(19,800)
Accumulated deficit		(1,415,638)	(1,388,422)
Total shareholders' deficit		(65,117)	(38,271)
Total liabilities and shareholders' deficit		$ 460,113	$ 522,619

[1] Total assets exclude intercompany receivables eliminated in consolidation.

[2] As a result of the probability of breaching one of the financial covenants if we are not successful at restructuring our debt (see "Restructuring Support Agreement" later in this section), the carrying value of the ABL Facility and the 2018 Notes was reclassified to current liabilities in the consolidated balance sheet as of March 31, 2016 and December 31, 2015.

XML

Condensed Consolidated Balance Sheets (Parenthetical) - USD ($) $ in Millions	Mar. 31, 2016	Dec. 31, 2015
Statement of Financial Position [Abstract]
Accounts receivable, allowance for doubtful accounts	$ 3.5	$ 3.5
Property, plant and equipment, accumulated depreciation	$ 219.2	$ 209.1

XML

Condensed Consolidated Statements of Operations (Unaudited) - USD ($) shares in Thousands, $ in Thousands	3 Months Ended
	Mar. 31, 2016	Mar. 31, 2015
Revenue:
Non-rental revenue	$ 44,026	$ 107,010
Rental revenue	2,949	12,102
Total revenue	46,975	119,112
Costs and expenses:
Direct operating expenses	38,617	87,999
General and administrative expenses	7,452	12,700
Depreciation and amortization	15,845	17,482
Other, net	0	683
Total costs and expenses	61,914	118,864
Operating (loss) income	(14,939)	248
Interest expense, net	(12,045)	(12,588)
Other income, net	158	321
Loss on extinguishment of debt	(390)	0
Loss from continuing operations before income taxes	(27,216)	(12,019)
Income tax (expense) benefit	(55)	24
Loss from continuing operations	(27,271)	(11,995)
Income from discontinued operations, net of income taxes	55	921
Net loss attributable to common shareholders	$ (27,216)	$ (11,074)
Net loss per common share attributable to common shareholders:
Basic and diluted loss from continuing operations (usd per share)	$ (0.98)	$ (0.44)
Basic and diluted income from discontinued operations (usd per share)	0.00	0.03
Net loss per basic and diluted common share (usd per share)	$ (0.98)	$ (0.41)
Weighted average shares outstanding used in computing net loss per basic and diluted common share (in shares)	27,907	27,412

XML

Condensed Consolidated Statements of Cash Flows (Unaudited) - USD ($) $ in Thousands	3 Months Ended
	Mar. 31, 2016	Mar. 31, 2015
Cash flows from operating activities:
Net loss	$ (27,216)	$ (11,074)
Adjustments to reconcile net loss to net cash provided by operating activities:
Income from discontinued operations, net of income taxes	0	(921)
Gain on the sale of TFI	(55)	0
Depreciation and amortization of intangible assets	15,845	17,482
Amortization of deferred financing costs and debt discounts, net	1,157	1,247
Stock-based compensation	368	789
Gain on disposal of property, plant and equipment	(1,057)	(654)
Bad debt expense	217	732
Loss on extinguishment of debt	(390)	0
Deferred income taxes	25	1
Other, net	(88)	(418)
Changes in operating assets and liabilities:
Accounts receivable	11,114	21,688
Prepaid expenses and other receivables	(634)	(1,273)
Accounts payable and accrued liabilities	4,924	6,949
Other assets and liabilities, net	(2,425)	202
Net cash provided by operating activities from continuing operations	2,565	34,750
Net cash provided by operating activities from discontinued operations	0	867
Net cash provided by operating activities	2,565	35,617
Cash flows from investing activities:
Proceeds from the sale of property, plant and equipment	1,449	1,968
Purchases of property, plant and equipment	(1,421)	(6,163)
Increase in restricted cash	(200)	0
Net cash used in investing activities from continuing operations	(172)	(4,195)
Net cash used in investing activities from discontinued operations	0	(161)
Net cash used in investing activities	(172)	(4,356)
Cash flows from financing activities:
Proceeds from revolving credit facility	12,409	0
Payments on revolving credit facility	(51,968)	(7,000)
Payments for deferred financing costs	(426)	0
Payments on vehicle financing and other financing activities	(1,687)	(1,436)
Net cash used in financing activities from continuing operations	(41,672)	(8,436)
Net cash provided by financing activities from discontinued operations	0	38
Net cash used in financing activities	(41,672)	(8,398)
Net (decrease) increase in cash and cash equivalents	(39,279)	22,863
Cash and cash equivalents - beginning of period	39,309	15,416
Cash and cash equivalents - end of period	30	38,279
Less: cash and cash equivalents of discontinued operations - end of period	0	2,793
Cash and cash equivalents of continuing operations - end of period	30	35,486
Supplemental disclosure of cash flow information:
Cash paid for interest	928	949
Cash paid for taxes, net	$ 2	$ 94

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Basis of Presentation

3 Months Ended

Mar. 31, 2016

Organization, Consolidation and Presentation of Financial Statements [Abstract]

Basis of Presentation

Basis of Presentation

The accompanying condensed consolidated financial statements of Nuverra Environmental Solutions, Inc. and its subsidiaries (collectively, “Nuverra,” the “Company,” “we,” “us,” or “our”) are unaudited, pursuant to the rules and regulations of the United States Securities and Exchange Commission ("SEC"). Our condensed consolidated balance sheet as of December 31, 2015, included herein, has been derived from audited financial statements, but does not include all disclosures required by accounting principles generally accepted in the United States of America (or "GAAP"). Certain information and footnote disclosures normally included in financial statements prepared in accordance with GAAP have been condensed or omitted pursuant to such rules and regulations. In our opinion, the condensed consolidated financial statements include the normal, recurring adjustments necessary for the fair statement of the results for the interim periods. These financial statements should be read in conjunction with the audited consolidated financial statements, including the notes thereto, contained in our Annual Report on Form 10-K for the year ended December 31, 2015, filed with the SEC on March 11, 2016.

All dollar and share amounts in the footnote tabular presentations are in thousands, except per share amounts and unless otherwise noted. Unless stated otherwise, any reference to statement of operations items in these accompanying condensed consolidated financial statements refers to results from continuing operations.

Reclassifications

Certain reclassifications and adjustments have been made to prior period amounts in the accompanying condensed consolidated statements of operations and cash flows and notes thereto in order to conform to the current year’s presentation including:

• Certain similar line items in the condensed consolidated statement of cash flows for the three months ended March 31, 2015 have been combined to conform to the current year presentation.

• In June 2015, we purchased the remaining interest in Appalachian Water Services, LLC (“AWS”), previously a 51% owned non-guarantor subsidiary, and have recast the tables in Note 16 to reflect AWS as a part of the Guarantor Subsidiaries for the three months endedMarch 31, 2015.

• As of January 1, 2016, and further discussed below under "Significant Accounting Policies," we retrospectively adopted, for all comparative periods presented, ASU 2015-03, Simplifying the Presentation of Debt Issuance Costs, and ASU 2015-15, Presentation and Subsequent Measurement of Debt Issuance Costs Associated with Line-of-Credit Arrangements. As a result, $7.9 million and $8.7 million of unamortized debt issuance costs related to our 2018 Notes have been reclassified from “Other assets” to “Current portion of long-term debt” on the condensed consolidated balance sheets as of March 31, 2016 and December 31, 2015, respectively. Additionally, as the debt associated with our asset-based revolving credit facility is presented as short-term, the related debt issuance costs of $2.1 million and $2.2 million as of March 31, 2016 and December 31, 2015, respectively, have been reclassified from "Other assets" to "Other current assets" on the condensed consolidated balance sheets. Further, the total assets for the Corporate segment reported in Note 14 have been adjusted for this reclass.

Going Concern

Our consolidated financial statements have been prepared assuming that we will continue as a going concern, which contemplates continuity of operations, realization of assets, and liquidation of liabilities in the normal course of business. As reflected in the condensed consolidated financial statements, we had an accumulated deficit at March 31, 2016, and a net loss for the three months endedMarch 31, 2016 and 2015. These factors, coupled with our large outstanding debt balance, raise substantial doubt about our ability to continue as a going concern. We are attempting to restructure our debt, generate sufficient revenues and reduce costs; however, our cash position may not be sufficient to support our daily operations if we are not successful. While we are currently executing a comprehensive strategy to restructure our indebtedness, improve liquidity and reduce costs, including cash interest expense, to sustain operations through the prolonged depression in oil and natural gas prices and the corresponding impact on our business operations, there can be no assurances to that effect. Our ability to continue as a going concern is dependent upon our ability to complete the transactions associated with our comprehensive strategy to restructure our indebtedness and to generate sufficient liquidity to meet our obligations and operating needs. While we were, and remain, in compliance with our existing debt arrangements, we recognize that absent an improvement in oil prices or a reduction in our indebtedness and cash interest expense, we do not have enough liquidity, including cash on hand, to service our debt, operations, and pay-down debt to avoid covenant violations. See the "Restructuring Support Agreement" discussion in Note 8 and the "Subsequent Events Related to Restructuring" discussion in Note 17 for details on management's financing strategy to restructure our debt in 2016.

The consolidated financial statements do not include any adjustments related to the recoverability and classification of recorded asset amounts or the amounts and classification of liabilities that might be necessary should we be unable to continue as a going concern.

Significant Accounting Policies

As of January 1, 2016, we retrospectively adopted, for all comparative periods presented, ASU 2015-03, Simplifying the Presentation of Debt Issuance Costs, and ASU 2015-15, Presentation and Subsequent Measurement of Debt Issuance Costs Associated with Line-of-Credit Arrangements. The amendments in ASU 2015-03 require that debt issuance costs related to a recognized debt liability be presented in the balance sheet as a direct deduction from the carrying amount of that debt liability, consistent with debt discounts. In order to conform to the current financial statement presentation, $7.9 million and $8.7 million of unamortized debt issuance costs related to our 2018 Notes have been reclassified from “Other assets” to “Current portion of long-term debt” on the condensed consolidated balance sheets as of March 31, 2016 and December 31, 2015, respectively. The guidance in ASU 2015-15 prescribes that deferred initial up-front commitment fees paid by a borrower to a lender represent the benefit of being able to access capital over the contractual term, and therefore, meet the definition of an asset, while debt issuance costs in the scope of ASU 2015-03 do not. As such, we will continue to present the costs associated with our asset-based revolving credit facility as an asset. Deferred issuance costs associated with our asset-based revolving credit facility of $2.1 million and $2.2 million as of March 31, 2016 and December 31, 2015, respectively, are included in “Other current assets” on the condensed consolidated balance sheets as this debt is considered short-term.

On March 10, 2016, we entered into an amendment to our guaranty and security agreement related to our asset-based revolving credit facility ("ABL Facility"), which is described in further detail in Note 8 under "ABL Facility Amendments." This amendment implemented a daily cash sweep of our collection lockbox and depository accounts, the proceeds of which are required to be applied against the outstanding balance of the ABL Facility. As a result of the sweep occurring one day in arrears, we had an ending balance of $0.2 million in our collection lockbox and depository accounts on March 31, 2016, which we have classified as "Restricted cash" on the condensed consolidated balance sheet as this cash is not available for operations and was subsequently swept by the lender on April 1, 2016.

There have been no other material changes or developments in our significant accounting policies or evaluation of accounting estimates and underlying assumptions or methodologies from those disclosed in our Annual Report on Form 10-K for the year ended December 31, 2015.

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Recently Issued Accounting Pronouncements

3 Months Ended

Mar. 31, 2016

Accounting Policies [Abstract]

Recently Issued Accounting Pronouncements

Recently Issued Accounting Pronouncements

In May 2014, the Financial Accounting Standards Board ("FASB") issued Accounting Standards Update ("ASU") No. 2014-09, Revenue from Contracts with Customers (Topic 606) (“ASU 2014-09”). The amendments in this update will be added to the ASC as Topic 606, Revenue from Contracts with Customers, and replaces the guidance in Topic 605. The underlying principle of the guidance in this update is that a business or other organization will recognize revenue to depict the transfer of promised goods or services to customers in an amount that reflects what it expects to receive in exchange for the goods or services. This new revenue standard also calls for more detailed disclosures and provides guidance for transactions that weren’t addressed completely, such as service revenue and contract modifications which may be applied retrospectively or modified retrospectively. In August 2015, the FASB issued ASU No. 2015-14, Revenue from Contracts with Customers (Topic 606): Deferral of the Effective Date ("ASU 2015-14"). The guidance in ASU 2015-14 delays the effective date for the new revenue recognition guidance outlined in ASU 2014-09 to reporting periods beginning after December 15, 2017, which for us is the reporting period starting January 1, 2018. We are reviewing the guidance in ASU 2014-09 and have not yet assessed the impact, if any, on our consolidated financial statements and have not determined our method of adoption.

In August 2014, the FASB issued ASU No. 2014-15, Disclosure of Uncertainties about an Entity’s Ability to Continue as a GoingConcern (“ASU 2014-15”). ASU 2014-15 requires management to evaluate whether there is substantial doubt about an entity’s ability to continue as a going concern and to provide related footnote disclosures. In doing so, companies will have reduced diversity in the timing and content of footnote disclosures than under today’s guidance. ASU 2014-15 is effective for reporting periods beginning after December 15, 2016, which for us is the reporting period starting January 1, 2017, with early adoption permitted. We are reviewing the guidance in ASU 2014-15 and evaluating the impact this new guidance may have on our consolidated financial statements.

In February 2016, the FASB issued ASU No. 2016-02, Leases (Topic 842) ("ASU 2016-02"), which requires an entity that is a lessee to recognize the assets and liabilities arising from leases on the balance sheet. This guidance also requires disclosures about the amount, timing and uncertainty of cash flows arising from leases. This guidance is effective for annual reporting periods beginning after December 15, 2018, and interim periods within those annual periods, using a modified retrospective approach. Early adoption of ASU 2016-09 is permitted. We are evaluating the effect that ASU 2016-02 will have on our consolidated financial statements and related disclosures. Based upon the current effective date, the new guidance would first apply to our reporting period starting January 1, 2019.

In March 2016, the FASB issued ASU No. 2016-09, Compensation-Stock Compensation- Improvements to Employee Share-Based Payment Accounting ("ASU 2016-09"), which involves several aspects of the accounting for share-based payment transactions, including the income tax consequences, classification of awards as either equity or liabilities, and classification on the statement of cash flows.  Under the new standard, income tax benefits and deficiencies are to be recognized as income tax expense or benefit in the income statement and the tax effects of exercised or vested awards should be treated as discrete items in the reporting period in which they occur.  An entity should also recognize excess tax benefits regardless of whether the benefit reduces taxes payable in the current period.  Excess tax benefits should be classified along with other income tax cash flows as an operating activity.  In regards to forfeitures, the entity may make an entity-wide accounting policy election to either estimate the number of awards that are expected to vest or account for forfeitures when they occur. ASU 2016-09 is effective for fiscal years beginning after December 15, 2016, including interim periods within that reporting period, however early adoption is permitted.  We are currently evaluating the guidance in ASU 2016-09 to determine our adoption method and the effect it will have on our consolidated financial statements.

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Earnings Per Common Share

3 Months Ended

Mar. 31, 2016

Earnings Per Share [Abstract]

Earnings Per Common Share

Earnings Per Common Share

Basic and diluted loss per common share from continuing operations, basic and diluted loss per common share from discontinued operations and net loss per basic and diluted common share have been computed using the weighted average number of shares of common stock outstanding during the period.

For the three months endedMarch 31, 2016 and 2015, no shares of common stock underlying stock options, restricted stock, or other common stock equivalents were included in the computation of diluted earnings per common share ("EPS") from continuing operations because the inclusion of such shares would be antidilutive based on the net losses from continuing operations reported for those periods. Accordingly, for the three month periods ended March 31, 2016 and 2015, no shares of common stock underlying stock options, restricted stock, or other common stock equivalents were included in the computations of diluted EPS from income from discontinued operations or diluted EPS from net loss per common share, because such shares were excluded from the computation of diluted EPS from continuing operations for those periods.

The following table presents the calculation of basic and diluted net loss per common share:

	Three Months Ended
	March 31,
	2016			2015
Numerator:
Loss from continuing operations	$	(27,271	)	$	(11,995	)
Income from discontinued operations	55			921
Net loss attributable to common shareholders	$	(27,216	)	$	(11,074	)
Denominator:
Weighted average shares—basic	27,907			27,412
Common stock equivalents	—			—
Weighted average shares—diluted	27,907			27,412
Basic and diluted loss per common share from continuing operations	$	(0.98	)	$	(0.44	)
Basic and diluted income per common share from discontinued operations	—			0.03
Net loss per basic and diluted common share	$	(0.98	)	$	(0.41	)
Anti-dilutive stock-based awards excluded	706			879

See Note 17 on "Subsequent Events Related to Restructuring" for a discussion on the number of shares of common stock we expect to be outstanding after completing the debt restructuring plan.

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Intangible Assets

3 Months Ended

Mar. 31, 2016

Goodwill and Intangible Assets Disclosure [Abstract]

Intangible Assets

Intangible Assets

Intangible assets consist of the following:

	March 31, 2016								December 31, 2015
	Gross Carrying Amount		Accumulated Amortization			Net		Remaining Useful Life (Years)	Gross Carrying Amount		Accumulated Amortization			Net		Remaining Useful Life (Years)
Customer relationships	$	11,731	$	(7,219	)	$	4,512	5.5	$	11,731	$	(6,865	)	$	4,866	6.0
Disposal permits	1,269		(492		)	777		4.9	1,269		(451		)	818		5.2
Customer contracts	17,352		(6,427		)	10,925		10.5	17,352		(6,169		)	11,183		11.0
	$	30,352	$	(14,138	)	$	16,214	8.9	$	30,352	$	(13,485	)	$	16,867	9.3

The remaining weighted average useful lives shown are calculated based on the net book value and remaining amortization period of each respective intangible asset.

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Impairment of Long-Lived Assets

3 Months Ended

Mar. 31, 2016

Goodwill and Intangible Assets Disclosure [Abstract]

Impairment of Long-Lived Assets

Impairment of Long-Lived Assets

Long-lived assets, such as property, plant and equipment and purchased intangibles subject to amortization, are reviewed for impairment whenever events or changes in circumstances indicate that the carrying amount of such assets may not be recoverable. There were no indicators of potential impairment for the three months ended March 31, 2016 and 2015.

If reduced customer activity levels decrease demand for our services for a prolonged period of time, or if we make downward adjustments to our projections, our actual cash flows could be less than our estimated cash flows, which could result in future impairment charges for long-lived assets.

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Fair Value Measurements

3 Months Ended

Mar. 31, 2016

Fair Value Disclosures [Abstract]

Fair Value Measurements

Fair Value Measurements

Measurements

Fair value represents an exit price that would be received to sell an asset or paid to transfer a liability in an orderly transaction between market participants. As such, fair value is a market-based measurement that should be determined based on assumptions that market participants would use in pricing an asset or liability. GAAP establishes a three-tier fair value hierarchy, which prioritizes the inputs used in measuring fair value as follows:

• Level 1 — Observable inputs such as quoted prices in active markets that are accessible at the measurement date for identical assets or liabilities;

• Level 2 — Inputs, other than the quoted prices in active markets, that are observable either directly or indirectly; and

• Level 3 — Unobservable inputs in which there is little or no market data, which require the reporting entity to develop its own assumptions.

Assets and liabilities measured at fair value on a recurring basis and the fair value hierarchy of the valuation techniques we utilized to determine such fair value included significant unobservable inputs (Level 3) and were as follows:

	Fair Value
As of March 31, 2016
Assets - Cost method investment	$	3,169
Liabilities - Contingent consideration	8,500
As of December 31, 2015
Assets - Cost method investment	$	3,169
Liabilities - Contingent consideration	8,628

Contingent Consideration

We are liable for certain contingent consideration payments in connection with the performance of various acquisitions. The fair values of the contingent consideration obligations were determined using a probability-weighted income approach at the acquisition date and are revalued at each reporting date or more frequently if circumstances dictate based on changes in the discount periods and rates, changes in the timing and amount of the revenue estimates and changes in probability assumptions with respect to the likelihood of achieving the performance measurements upon which the obligations are based. Contingent consideration is reported as "Current portion of contingent consideration" in the condensed consolidated balance sheets as we expect to make all remaining payments within one year. Changes to the fair value of contingent consideration are recorded as "Other income, net" in the condensed consolidated statements of operations. The fair value measurement is based on significant inputs not observable in the market, which are referred to as Level 3 inputs.

Changes to contingent consideration obligations during the three months endedMarch 31, 2016 and the year ended December 31, 2015 were as follows:

	March 31, 2016			December 31, 2015
Balance at beginning of period	$	8,628		$	9,824
Cash payments	—			(909		)
Changes in fair value of contingent consideration, net	(128		)	(287		)
Current portion of contingent consideration	$	8,500		$	8,628

Other

In addition to our assets and liabilities that are measured at fair value on a recurring basis, we are required by GAAP to measure certain assets and liabilities at fair value on a nonrecurring basis after initial recognition. Generally, assets, liabilities and reporting units are measured at fair value on a nonrecurring basis as a result of impairment reviews and any resulting impairment charge. In connection with our impairment review of long-lived assets, we measure the fair value of our asset groups for those asset groups deemed not recoverable, based on Level 3 inputs consisting of the discounted future cash flows associated with the use and eventual disposition of the asset group.

Cost method investments are measured at fair value on a nonrecurring basis when deemed necessary, using observable inputs such as trading prices of the stock, as well as using discounted cash flows, incorporating adjusted available market discount rate information and our estimates for liquidity risk.

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Accrued Liabilities

3 Months Ended

Mar. 31, 2016

Payables and Accruals [Abstract]

Accrued Liabilities

Accrued Liabilities

Accrued liabilities consisted of the following at March 31, 2016 and December 31, 2015:

	March 31, 2016		December 31, 2015
Accrued payroll and employee benefits	$	2,392	$	5,839
Accrued insurance	6,000		5,896
Accrued legal and environmental costs	1,714		1,531
Accrued taxes	1,200		1,514
Accrued interest	18,365		8,516
Accrued operating costs	2,192		4,233
Accrued other	2,389		2,314
Total accrued liabilities	$	34,252	$	29,843

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Debt

3 Months Ended

Mar. 31, 2016

Debt Disclosure [Abstract]

Debt

Debt

Debt consisted of the following at March 31, 2016 and December 31, 2015:

			March 31, 2016							December 31, 2015
	Interest Rate	Maturity Date	Unamortized Deferred Financing Costs (g)		Fair Value of Debt (f)		Carrying Value of Debt			Carrying Value of Debt
ABL Facility (a)	2.94%	Jan. 2018	$	2,109	$	62,273	$	62,273		$	101,832
2018 Notes (b)	9.875%	Apr. 2018	7,862		96,000		400,000			400,000
Vehicle financings (c)	1.52%	Various	—		11,114		11,114			12,303
Note payable (d)	4.25%	Apr. 2019	—		6,063		6,063			6,492
Total debt			$	9,971	$	175,450	479,450			520,627
Original issue discount (e)							(578		)	(639		)
Original issue premium (e)							169			187
Deferred financing costs presented with debt (g)							(7,862		)	(8,708		)
Total debt, net							471,179			511,467
Less: current portion (h)							(463,164		)	(499,709		)
Long-term portion of debt							$	8,015		$	11,758

_____________________

(a) The interest rate presented represents the interest rate on the $100.0 million ABL Facility at March 31, 2016.

(b) The interest rate presented represents the coupon rate on our outstanding $400.0 million aggregate principal amounts of 9.875% Senior Notes due 2018 (the “2018 Notes”), excluding the effects of deferred financing costs, original issue discounts and original issue premiums. Including the impact of these items, the effective interest rate on the 2018 Notes is approximately 11.0%. Interest payments are due semi-annually on April 15 and October 15 of each year.

(c) Vehicle financings consist of capital lease arrangements related to fleet purchases with a weighted-average annual interest rate of approximately 1.52% and which mature in varying installments between 2016 and 2020. Capital lease obligations were $11.1 million and $12.3 million, respectively, at March 31, 2016 and December 31, 2015, respectively.

(d) During the three months ended June 30, 2015, we settled our $11.0 million financing obligation to acquire the remaining 49% interest in AWS from the non-controlling interest holder with a $4.0 million cash payment and a $7.4 million note payable with principal and interest due in equal quarterly installments through April 2019.

(e) The issuance discount represents the unamortized difference between the $250.0 million aggregate principal amount of the 2018 Notes issued in April 2012 and the proceeds received upon issuance (excluding interest and fees). The issuance premium represents the unamortized difference between the proceeds received in connection with the November 2012 issuance of the 2018 Notes (excluding interest and fees) and the $150.0 million aggregate principal amount thereunder.

(f) The estimated fair value of our 2018 Notes is based on quoted market prices as of March 31, 2016. Our ABL Facility and vehicle financings bear interest at rates commensurate with market rates and therefore their respective carrying values approximate fair value.

(g) As discussed previously in Note 1, upon retrospective adoption of ASU 2015-03, we have reclassified the deferred financing costs associated with the 2018 Notes to be presented in the balance sheet as a direct deduction from the carrying amount of the debt liability as of March 31, 2016 and December 31, 2015. In accordance with ASU 2015-15, the deferred financing costs related to the ABL Facility continue to be presented as an asset, and are included in "Other current assets" on the condensed consolidated balance sheets as of March 31, 2016 and December 31, 2015.

(h) As a result of the probability of breaching one of the financial covenants if we are not successful at restructuring our debt (see "Restructuring Support Agreement" later in this section), the carrying value of the ABL Facility and the 2018 Notes was reclassified to current liabilities in the consolidated balance sheet as of March 31, 2016 and December 31, 2015.

For a discussion of material changes and developments in our debt and its principal terms, see our discussion below regarding the "ABL Facility Amendments" and "Restructuring Support Agreement," in addition to the discussion in Note 17 on "Subsequent Events Related to Restructuring."

Indebtedness

We are highly leveraged and a substantial portion of our liquidity needs result from debt service requirements and from funding our costs of operations and capital expenditures, including acquisitions.

ABL Facility Amendments

On March 10, 2016, we entered into a Consent and Fifth Amendment to Amended and Restated Credit Agreement (the “Fifth ABL Facility Amendment”) and a Third Amendment to Amended and Restated Guaranty and Security Agreement (the "Third GSA Amendment") by and among Wells Fargo Bank, National Association as agent ("Agent"), the Lenders named therein (the “Lenders”), and the Company. Under the Fifth ABL Facility Amendment, the Lenders consented to the inclusion of a “going concern” qualification in the opinion from our registered public accounting firm, which is included in our Annual Report on Form 10-K for the fiscal year ended December 31, 2015. Under the Third GSA Amendment, we consented to and implemented a daily cash sweep of our collection lockbox and depository accounts, the proceeds of which are required to be applied against the outstanding balance of the ABL Facility. The Third GSA Amendment also requires the segregation of all receipts and disbursements in separate bank accounts and limits the end of day balance in our operating bank account to an amount not to exceed $1.0 million.

On March 24, 2016, in connection with the previously announced Restructuring Support Agreement to implement a proposed debt restructuring and recapitalization plan (the “Restructuring”), we entered into a Sixth Amendment to Amended and Restated Credit Agreement (the “Sixth ABL Facility Amendment”) by and among the Agent, the Lenders and the Company. Among other terms and conditions, the Sixth ABL Facility Amendment amends the ABL Facility as follows:

• Reduces the maximum revolver commitments from $125.0 million to $100.0 million;

• Replaces the leverage ratio financial maintenance covenant with a new minimum EBITDA financial maintenance covenant that will be tested monthly;

• Amends the definition of “EBITDA” for purposes of the financial maintenance covenant to provide allowances for certain unusual or non-recurring fees, costs and expenses, with testing monthly beginning in April 2016;

• Amends the definition of “Borrowing Base” (i) to set the eligible equipment advance rates based on net book value at 60% and on Net Orderly Liquidation Value (as defined in the ABL Facility) at 80% and (ii) to cap Borrowing Base availability attributable to eligible equipment at 75%;

• Increases the default rate upon the occurrence and continuation of an event of default from 2% to 4%;

• Increases the applicable margin on LIBOR Rate and Base Rate Loans (each as defined in the ABL Facility) and the unused line fee;

• Eliminates our ability to voluntarily reduce the commitments without termination of the ABL Facility;

• Requires us to apply proceeds from the Restructuring transactions and related agreements to pay down the ABL Facility;

• Amends the definition of “Permitted Disposition” to permit the sale of our equity investment in Underground Solutions, Inc., discussed further in Note 13, and to expand the permitted disposition general basket (which excludes the sale of machinery and equipment in the ordinary course of business) from $5.0 million to $7.5 million;

• Applies a Permitted Disposition Reserve of 50% against our availability for net cash proceeds in excess of $7.5 million made on or after March 10, 2016 for sales specifically related to the Permitted Disposition general basket; and

• Amends certain definitions in connection with the Restructuring transactions, including “Change of Control”, “Permitted Indebtedness”, and “Permitted Liens”.

In addition, we agreed to certain make-whole fees that would be payable to the Lenders upon early termination of the ABL Facility as a result of acceleration, bankruptcy or otherwise, unless amounts outstanding under the ABL Facility are paid in full. In connection with the Sixth ABL Facility Amendment we incurred amendment fees of approximately $0.6 million which were capitalized as deferred financing costs during the three months ended March 31, 2016. Further, we wrote off a portion of the unamortized deferred financing costs associated with our ABL Facility of approximately $0.4 million during the three months ended March 31, 2016.

See the "ABL Facility Amendments" discussion in Note 17 on "Subsequent Events Related to Restructuring" for details on the Seventh Amendment to Amended and Restated Credit Agreement (the "Seventh ABL Facility Amendment").

Financial Covenants and Borrowing Limitations

The ABL Facility, as amended, requires, and any future credit facilities will likely require, us to comply with specified financial ratios that may limit the amount we can borrow under our ABL Facility. A breach of any of the covenants under the indenture governing the 2018 Notes (the “Indenture”) or the ABL Facility, as applicable, could result in a default. Our ability to satisfy those covenants depends principally upon our ability to meet or exceed certain positive operating performance metrics including, but not limited to, earnings before interest, taxes, depreciation and amortization, or EBITDA, and ratios thereof, as well as certain balance sheet ratios. Any debt agreements we enter into in the future may further limit our ability to enter into certain types of transactions.

The ABL Facility contains certain financial covenants, including a fixed charge coverage ratio and a minimum EBITDA covenant. The fixed charge coverage ratio, which only applies if excess availability under the ABL Facility falls below 12.5% of the maximum revolver amount, requires the ratio of adjusted EBITDA (as defined by the ABL Facility) less capital expenditures to fixed charges (as defined) to be at least 1.1 to 1.0. The fixed charge coverage ratio covenant could have the effect of limiting our availability under the ABL Facility, as additional borrowings would be prohibited if, after giving pro forma effect thereto, we would be in violation of such covenant. The minimum EBITDA covenant requires us to meet a stated year-to-date EBITDA target (as defined by the ABL Facility) beginning April 30, 2016 and continuing each month thereafter through December 31, 2016 at which time the target is reset. As of March 31, 2016, we remained in compliance with our debt covenants and availability was $26.3 million; however, our ratio of adjusted EBITDA to fixed charges was less than 1.1 to 1.0 (as calculated pursuant to the ABL Facility). As such, our net availability was reduced by 12.5% of the maximum revolver amount, or $12.5 million, resulting in approximately $13.8 million of net availability as of March 31, 2016. As of March 31, 2016 we were not required to meet a minimum EBITDA target. For the four months ending April 30, 2016 we are required to have minimum EBITDA of approximately $2.1 million.

During the three months ended March 31, 2016, the Agent for the ABL Facility commenced a borrowing base redetermination involving a valuation of the net orderly liquidation value of our eligible machinery and equipment by a third party specialist. As a result, the lenders applied an $18.0 million reserve against our availability based on the estimated decline to our borrowing base. Due to the application of this reserve against our availability and due to the implementation of the daily sweep of our lockbox and depository bank accounts, we made cumulative payments of $52.0 million during the three months ended March 31, 2016, offset by borrowings of $12.4 million, thus reducing the amount outstanding under the ABL Facility to $62.3 million as of March 31, 2016.

The ABL Facility's borrowing base limitations are based upon eligible accounts receivable and equipment. If the value of our eligible accounts receivable or equipment decreases for any reason, or if some portion of our accounts receivable or equipment is deemed ineligible under the terms of our ABL Facility, the amount we can borrow under the ABL Facility could be reduced. These limitations could have a material adverse impact on our liquidity and financial condition. In addition, the administrative agent for our ABL Facility has the periodic right to commission appraisals of the assets comprising our borrowing base, and we are obligated to reimburse the cost of up to four appraisals including one field examination, during any 12 consecutive months. If an appraisal results in a reduction of the borrowing base, we may be required to repay a portion of the amount outstanding under the ABL Facility in order to remain in compliance with applicable borrowing limitations. At March 31, 2016 we had $13.8 million of net availability under the ABL Facility. During the remainder of 2016, we expect further deterioration to our ABL borrowing base due to declining accounts receivable and downward pressure on the orderly liquidation values of our machinery and equipment. During the three months ended March 31, 2016, we made payments of $52.0 million against the outstanding balance of the ABL Facility a portion of which was made to cover the borrowing base deterioration. There can be no assurance that we will have sufficient cash on hand or other sources of liquidity to make any such future repayments if necessary.

The Indenture governing the 2018 Notes contains restrictive covenants on the incurrence of senior secured indebtedness. To the extent that the fixed charge coverage ratio (as defined in the Indenture) is below 2.0 to 1.0, the Indenture prohibits our incurrence of new senior secured indebtedness under the ABL Facility or any other secured credit facility, at that point in time, to the greater of $150.0 million and the amount of debt as restricted by the secured leverage ratio, which is the ratio of secured debt to EBITDA, of 2.0 to 1.0, as determined pursuant to the Indenture. The 2.0 to 1.0 fixed charge coverage ratio and secured leverage ratio are incurrence covenants, not maintenance covenants. The covenants do not require repayment of existing borrowings incurred previously in accordance with the covenants, but rather limits new borrowings during any such period. As a result of the Sixth ABL Facility Amendment, our ability to incur new borrowings under the ABL Facility is limited to a maximum of $100.0 million irrespective of the permitted availability of up to $150.0 million under the 2018 Notes.

See the "Exchange Offer" and "Term Loan" discussions in Note 17 on "Subsequent Events Related to Restructuring" for details on the exchange offer for the 2018 Notes, the consent related thereto, the 2021 Notes and the new term loan.

The covenants described above are subject to important exceptions and qualifications. The continued effect of low oil and natural gas prices will negatively impact our compliance with our covenants, and we cannot guarantee that we will satisfy those requirements. If we do not obtain a long term waiver for any breached covenants, such breach would result in a default under the Indenture, ABL Facility or other debt obligations, or any future credit facilities we may enter into, which could allow all amounts outstanding thereunder to be declared immediately due and payable, subject to the terms and conditions of the documents governing such indebtedness. If we were unable to repay the accelerated amounts, our secured lenders could proceed against the collateral granted to them to secure such indebtedness. This would likely in turn trigger cross acceleration and cross-default rights under any other credit facilities and indentures. If the amounts outstanding under the 2018 Notes or any other indebtedness outstanding at such time were to be accelerated or were the subject of foreclosure actions, we cannot guarantee that our assets would be sufficient to repay in full the money owed to the lenders or to our other debt holders. We cannot guarantee that we will be granted waivers or amendments to the Indenture governing the 2018 Notes, the ABL Facility or such other debt obligations if for any reason we are unable to comply with our obligations thereunder. Any such limitations on borrowing under our ABL Facility could have a material adverse impact on our liquidity.

Restructuring Support Agreement

On March 11, 2016, we entered into a Restructuring Support Agreement with holders of more than 80% of the 2018 Notes relating to a restructuring transaction (the “Restructuring”), subject to the satisfaction of certain closing conditions including shareholder approval and minimum noteholder participation, pursuant to which, among other terms and conditions: (i) the exchange up to $368.6 million aggregate principal amount of the 2018 Notes for new second lien secured notes due 2021 (the “2021 Notes”), (ii) the exchange of approximately $31.4 million aggregate principal amount of the 2018 Notes for our common stock at a volume-weighted, market-average conversion price per share which were purchased on the open market during the year ended December 31, 2015 by an entity controlled by Mr. Mark D. Johnsrud, our Chief Executive Officer and Chairman of the board of directors, (iii) a new $24.0 million principal amount “last out” first lien term loan due 2018 (the “Term Loan”) which was funded by certain holders of the 2018 Notes with annual interest at 13% to be paid in-kind by increasing the principal amount payable thereunder and due at maturity, and (iv) the issuance of warrants to purchase up to 15% of our outstanding common stock, at an exercise price of $0.01 per share, to the lenders under the Term Loan and certain holders of the 2018 Notes that participated in the exchange offer. In addition, as part of the Restructuring, Mr. Johnsrud agreed to backstop a $5.0 million equity rights offering (the “Rights Offering”) that is expected to be completed in the second quarter of 2016. The net proceeds of the Term Loan and the Rights Offering are to be used to pay down a portion of the outstanding balance on the ABL Facility, which will be available for re-borrowing subject to any borrowing base limitations and compliance with other applicable terms and conditions under the ABL Facility.

Interest on the 2021 Notes will be payable semiannually on April 15 and October 15 of each year beginning on October 15, 2016, and will be paid in-kind by increasing the principal amount payable thereunder and due at maturity and/or in cash as follows: (i) interest payable on October 15, 2016 will be paid in-kind at a rate of 12.5% per annum, (ii) interest payable in 2017 will be paid 50% in-kind and 50% in cash at a rate of 10% per annum, (iii) interest payable on April 15, 2018 and thereafter will be paid in cash at a rate of 10% per annum until maturity. The liens securing the 2021 Notes will be contractually subordinated to the liens on such assets securing the ABL Facility and the Term Loan. Both the conversion of Mr. Johnsrud’s 2018 Notes to equity and the Rights Offering are subject to shareholder approval of amendments to our Amended and Restated Certificate of Incorporation, as amended ("Certificate of Incorporation"), to provide for the issuance of sufficient additional shares of common stock.

As described previously under "ABL Facility Amendments," on March 24, 2016 in connection with the Restructuring we entered into the Sixth ABL Facility Amendment. See Note 17 on "Subsequent Events Related to Restructuring" for a discussion of material changes and developments after March 31, 2016 with respect to the Restructuring.

The Restructuring and the transactions contemplated thereby are subject to additional terms and conditions. We provide no assurances that we will be able to successfully consummate the Restructuring or other alternatives to restructure our existing indebtedness, in which case we may need to restructure under the Bankruptcy Code.

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Restructuring and Exit Costs

3 Months Ended

Mar. 31, 2016

Restructuring and Related Activities [Abstract]

Restructuring and Exit Costs

Restructuring and Exit Costs

In March 2015, we initiated a plan to restructure our business in certain shale basins and reduce costs, including an exit from the Mississippian ("MidCon") shale area and the Tuscaloosa Marine Shale logistics business. Additionally, we closed certain yards within the Northeast and Southern divisions and transferred many of the related assets to our other operating locations, primarily in the Eagle Ford shale basin. The total costs of the restructuring recognized in 2015 were approximately $7.1 million. There were no costs incurred during the three months endedMarch 31, 2016. We recorded $0.7 million during the three months endedMarch 31, 2015.

The charges are characterized as "Other, net" in the accompanying condensed consolidated statements of operations. Such costs consisted of the following:

	Three Months Ended		Three Months Ended
	March 31, 2016		March 31, 2015
Severance and termination benefits	$	—	$	240
Asset impairment charge	—		—
Contract termination costs and exit costs	—		443
Total restructuring and exit costs	$	—	$	683

For the three months endedMarch 31, 2015, approximately $0.6 million and $0.1 million of the total charge was recorded in the Southern and Northeast operating segments, respectively. The liability totaled approximately $0.2 million as of March 31, 2016 and is included as "Accrued liabilities" in the condensed consolidated balance sheets. A rollforward of the restructuring and exit cost accruals from December 31, 2015 through March 31, 2016 is as follows:

	Employee Termination Costs (a)		Lease Exit Costs (b)			Other Exit Costs (c)		Total
Restructuring and exit costs accrued at December 31, 2015	$	—	$	180		$	—	$	180
Restructuring and exit-related costs	—		—			—		—
Cash payments	—		(12		)	—		(12		)
Restructuring and exit costs accrued at March 31, 2016	$	—	$	168		$	—	$	168

_____________________

(a) Employee termination costs consist primarily of severance and related costs.

(b) Lease exit costs consist primarily of costs that will continue to be incurred under non-cancellable operating leases for their remaining term without benefit to us.

(c) Other exit costs include costs related to the movement of vehicles and rental fleet in connection with the exit from certain shale areas.

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Income Taxes

3 Months Ended

Mar. 31, 2016

Income Tax Disclosure [Abstract]

Income Taxes

Income Taxes

The following table shows the components of the income tax benefit for the periods indicated:

	Three Months Ended
	March 31,
	2016			2015
Current income tax (expense) benefit	$	(30	)	$	25
Deferred income tax expense	(25		)	(1		)
Total income tax (expense) benefit	$	(55	)	$	24

The effective income tax expense rate for the three months endedMarch 31, 2016 was 0.2%, which differs from the federal statutory benefit rate of 35.0% primarily due to the increase in the valuation allowance on deferred tax assets resulting from current year losses.

The effective income tax benefit rate for the three months endedMarch 31, 2015 was 0.2%, which differs from the federal statutory rate of 35.0% primarily due to the increase in the valuation allowance on deferred tax assets resulting from current year losses.

We have significant deferred tax assets, consisting primarily of net operating losses (“NOLs”), which have a limited life, generally expiring between the years 2029 and 2036 and capital losses, which have a five year carryforward expiring in 2020. We regularly assess the available positive and negative evidence to estimate if sufficient future taxable income will be generated to use the existing deferred tax assets. A significant piece of objective negative evidence evaluated was the cumulative losses incurred this year and in recent years. Such objective evidence limits the ability to consider other subjective evidence such as our projections for future taxable income.

In light of our continued losses, at March 31, 2016 we determined that our deferred tax liabilities were not sufficient to fully realize our deferred tax assets. Accordingly, a valuation allowance continues to be required against the portion of our deferred tax assets that is not offset by deferred tax liabilities. Accordingly, we expect our effective income tax rate to be near zero for 2016.

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Share-based Compensation

3 Months Ended

Mar. 31, 2016

Disclosure of Compensation Related Costs, Share-based Payments [Abstract]

Share-based Compensation

Share-based Compensation

We may grant stock options, stock appreciation rights, restricted common stock and restricted stock units, performance shares and units, other stock-based awards and cash-based awards to our employees, directors, consultants and advisors pursuant to the Nuverra Environmental Solutions, Inc. 2009 Equity Incentive Plan (as amended, the “2009 Plan”).

The total grants awarded during the three months endedMarch 31, 2016 and March 31, 2015 are presented in the table below:

	Three Months Ended
	March 31,
	2016	2015
Stock option grants	—	703
Restricted stock grants	—	—
Restricted stock unit grants	1	151
Total grants under the 2009 Plan	1	854

The total stock-based compensation cost included in "General and administrative expenses" in the accompanying condensed consolidated statements of operations was as follows:

	Three Months Ended
	March 31,
	2016		2015
Stock options	$	84	$	148
Restricted stock	85		101
Restricted stock units	199		540
Total stock-based compensation expense	$	368	$	789

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Legal Matters

3 Months Ended

Mar. 31, 2016

Commitments and Contingencies Disclosure [Abstract]

Legal Matters

Legal Matters

Environmental Liabilities

We are subject to the environmental protection and health and safety laws and related rules and regulations of the United States and of the individual states, municipalities and other local jurisdictions where we operate. Our continuing operations are subject to rules and regulations promulgated by the Texas Railroad Commission, the Texas Commission on Environmental Quality, the Louisiana Department of Natural Resources, the Louisiana Department of Environmental Quality, the Ohio Department of Natural Resources, the Pennsylvania Department of Environmental Protection, the North Dakota Department of Health, the North Dakota Industrial Commission, Oil and Gas Division, the North Dakota State Water Commission, the Montana Department of Environmental Quality and the Montana Board of Oil and Gas, among others. These laws, rules and regulations address environmental, health and safety and related concerns, including water quality and employee safety. We have installed safety, monitoring and environmental protection equipment such as pressure sensors and relief valves, and have established reporting and responsibility protocols for environmental protection and reporting to such relevant local environmental protection departments as required by law.

We believe we are in material compliance with all applicable environmental protection laws and regulations in the United States and the states in which we operate. We believe that there are no unrecorded liabilities as of the periods reported herein in connection with our compliance with applicable environmental laws and regulations. The condensed consolidated balance sheets at March 31, 2016 and December 31, 2015 included accruals totaling $0.5 million and $0.3 million, respectively, for various environmental matters.

Litigation

There are various lawsuits, claims, investigations and proceedings that have been brought or asserted against us, which arise in the ordinary course of business, including actions with respect to securities and shareholder class actions, personal injury, vehicular and industrial accidents, commercial contracts, legal and regulatory compliance, securities disclosure, labor and employment, and employee benefits and environmental matters, the more significant of which are summarized below. We record a provision for these matters when it is both probable that a liability has been incurred and the amount of the loss can be reasonably estimated. Any provisions are reviewed at least quarterly and are adjusted to reflect the impact and status of settlements, rulings, advice of counsel and other information and events pertinent to a particular matter.

We believe that we have valid defenses with respect to legal matters pending against us. Based on our experience, we also believe that the damage amounts claimed in the lawsuits disclosed below are not necessarily a meaningful indicator of our potential liability. Litigation is inherently unpredictable, and it is possible that our results of operations or cash flow could be materially affected in any particular period by the resolution of one or more of the legal matters pending against us. We do not expect that the outcome of other current claims and legal actions not discussed below will have a material adverse effect on our consolidated financial position, results of operations or cash flows.

Shareholder Litigation

2013 Class Action

In September 2013, two separate but substantially similar putative class action lawsuits were commenced in Federal court against us and certain of our current and former officers and directors alleging that we, along with the individual defendants, made certain material misstatements and/or omissions relating to our operations and financial condition which caused the price of our shares to fall. By order dated October 29, 2013, the two putative class actions were consolidated and a consolidated complaint was filed. Defendants filed a motion to dismiss these claims in May 2014, and such motion was granted by the Court on November 17, 2014, whereby the forgoing class action was dismissed without prejudice. Plaintiffs were permitted by the Court to file a motion to amend the complaint and did so on December 8, 2014. Defendants filed their opposition to plaintiffs' motion to amend the complaint on December 22, 2014. On March 12, 2015, the Court issued an order denying plaintiffs' motion to amend the complaint as to certain claims, but granting plaintiffs' motion as to other claims. Plaintiffs filed an amended complaint on March 19, 2015, and on March 23, 2015, we filed a motion to dismiss the amended complaint for failure to comply with the Court’s March 12, 2015 order. Both parties filed subsequent pleadings. On June 24, 2015, the Court granted our motion to dismiss plaintiffs' amended consolidated class action complaint and dismissed the case with prejudice. On July 24, 2015, plaintiffs filed a notice of appeal to the Ninth Circuit Court of Appeals. The appeal was voluntarily dismissed by plaintiffs on November 5, 2015, thereby concluding this litigation.

2013 Derivative Cases

In September and October 2013, three separate but substantially similar shareholder derivative lawsuits were commenced in Federal court against us and certain of our current and former officers and directors alleging that members of our board of directors failed to prevent the issuance of certain misstatements and omissions and asserting claims for breach of fiduciary duty, waste of corporate assets and unjust enrichment. Defendants filed a motion to dismiss these claims in February 2014. On September 15, 2014, the Court dismissed the consolidated cases following its dismissal of the consolidated complaint and plaintiffs' failure to amend. Also in October 2013, two identical shareholder derivative lawsuits were commenced in Arizona state court against us and certain of our current officers and directors alleging breach of fiduciary duty, waste of corporate assets and unjust enrichment. By order dated January 28, 2014, these two actions were consolidated, and defendants filed a motion to dismiss these claims in June 2014. On July 22, 2014, the parties filed a joint stipulation to dismiss these cases with prejudice, which was granted by the Court on August 1, 2014, and no settlement payment was made. In the first quarter of 2015, we received a written demand from one of the plaintiffs in the derivative lawsuits requesting that the board of directors commence an independent investigation of certain matters and take appropriate action to recover for us any damages to which we may be entitled as a result of alleged breaches of fiduciary duties by certain of our current and former officers and directors. The board appointed a special committee to conduct such an investigation, which it did with the assistance of independent professionals. The investigation concluded with a finding that there had been no actionable wrongdoing and a recommendation that the Company not act further with respect to the shareholder demand.

AWS Arbitration Demand

On April 28, 2015, the holder of the non-controlling interest in AWS issued to us a Demand for Arbitration pursuant to the terms of the AWS operating agreement, relating to alleged breaches by us of certain of our obligations under the operating agreement. We entered into a settlement of this matter with the non-controlling interest holder in June 2015 whereby we purchased the remaining interest in AWS for $4.0 million in cash and a $7.4 million note payable with principal and interest due in equal quarterly installments through April 2019. If we fail to meet the payment terms of this obligation, or if we become insolvent or declare bankruptcy, all remaining outstanding balances on the note payable would become immediately due and payable.  If such an acceleration were to occur, we would request a waiver from the non-controlling interest holder, but there can be no assurance that such waiver would be forthcoming or that we would have sufficient available liquidity to make any required repayment.

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Related Party and Affiliated Company Transactions

3 Months Ended

Mar. 31, 2016

Related Party Transactions [Abstract]

Related Party and Affiliated Company Transactions

Related Party and Affiliated Company Transactions

Termination of Aircraft Lease Agreement

During the three months ended March 31, 2016, the aircraft lease agreement with an entity owned and controlled by Mark D. Johnsrud, our Chief Executive Officer and Chairman of our board of directors, was terminated. During the three months ended March 31, 2016, reimbursements payable to the entity in exchange for use of the aircraft, in the aggregate amount of $45 thousand, were paid in full. There were no remaining reimbursements payable to the entity as of March 31, 2016.

There have been no significant changes to the other related party transactions with Mr. Johnsrud for apartment rentals, purchases of fresh water for resale and use of land where certain of our saltwater disposal wells are situated as described in Note 19 to the consolidated financial statements in our 2015 Annual Report on Form 10-K.

Cost Method Investment - Underground Solutions, Inc.

On February 18, 2016, Aegion Corporation (or "Aegion") announced the completion of the acquisition of Underground Solutions, Inc. (or "UGSI"), an entity in which we held an approximate 7% equity interest, whereby Aegion paid approximately $85.0 million to acquire UGSI. Our total proceeds will be approximately $5.2 million. In April of 2016, we received proceeds of $5.0 million, with the remaining $0.2 million of proceeds held back and deposited in an escrow account. We will be entitled to these additional proceeds, subject to certain working capital adjustments and indemnity claims, over the course of the next 18 months. The net proceeds of $5.2 million exceeded our cost basis of approximately $3.2 million. As such, we will recognize a net gain on the sale of approximately $1.9 million, which includes approximately $0.1 million in costs incurred by us in the closing, during the three months ended June 30, 2016.

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Segments

3 Months Ended

Mar. 31, 2016

Segment Reporting [Abstract]

Segments

Segments

We evaluate business segment performance based on income (loss) before income taxes exclusive of corporate general and administrative costs and interest expense, which are not allocated to the segments. Our shale solutions business is comprised of three operating divisions, which we consider to be operating and reportable segments of our continuing operations: (1) the Northeast division comprising the Marcellus and Utica Shale areas, (2) the Southern division comprising the Haynesville, Eagle Ford, and Permian Basin Shale areas and (3) the Rocky Mountain division comprising the Bakken Shale area. Corporate/Other includes certain corporate costs and certain other corporate assets.

As discussed in Note 9, in March 2015, we initiated a plan to restructure our business in certain shale basins and reduce costs, including an exit from the Mississippian (or "MidCon") shale area. As a result, revenues for the MidCon shale area were included in the Southern division and costs associated with revenue generating activities of the MidCon shale area were included in the Southern division for the three months ended March 31, 2015. As a result of our restructuring in the MidCon, some remaining operating expenses for shut-down activities, as well as depreciation and amortization, were included in the Southern division during the three months March 31, 2016.

Financial information for our reportable segments related to continuing operations is presented below.

	Rocky Mountain			Northeast			Southern			Corporate/ Other			Total
Three months ended March 31, 2016
Revenue	$	24,905		$	12,777		$	9,293		$	—		$	46,975
Direct operating expenses	19,558			11,568			7,491			—			38,617
General and administrative expenses	1,852			1,190			920			3,490			7,452
Depreciation and amortization	8,079			3,883			3,814			69			15,845
Operating loss	(4,584		)	(3,864		)	(2,932		)	(3,559		)	(14,939		)
Loss from continuing operations before income taxes	(4,652		)	(3,931		)	(2,926		)	(15,707		)	(27,216		)
As of March 31, 2016
Total assets (a)	246,530			72,916			123,028			17,639			460,113
Three months ended March 31, 2015
Revenue	69,410			27,313			22,389			—			119,112
Direct operating expenses	48,425			21,496			18,078			—			87,999
General and administrative expenses	2,056			1,904			2,078			6,662			12,700
Depreciation and amortization	8,737			3,927			4,648			170			17,482
Operating income (loss)	10,192			(98		)	(3,014		)	(6,832		)	248
Income (loss) from continuing operations before income taxes	10,097			13			(2,935		)	(19,194		)	(12,019		)
As of December 31, 2015
Total assets (a)	263,871			76,472			128,482			53,794			522,619

_____________________

(a)    Total assets exclude intercompany receivables eliminated in consolidation.

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Discontinued Operations

3 Months Ended

Mar. 31, 2016

Discontinued Operations and Disposal Groups [Abstract]

Discontinued Operations

Discontinued Operations

Our former industrial solutions operating and reportable segment, Thermo Fluids, Inc. ("TFI"), has been classified as discontinued operations since the sale process with various prospective acquirers began in fourth quarter of 2013. In February, 2015, we entered into a definitive agreement with Safety-Kleen, Inc. ("Safety-Kleen"), a subsidiary of Clean Harbors, Inc., whereby Safety-Kleen agreed to acquire TFI for $85.0 million in an all-cash transaction, subject to working capital adjustments.

On April 11, 2015, we completed the TFI disposition with Safety-Kleen as contemplated by the previously disclosed purchase agreement. Pursuant to the purchase agreement, $4.3 million of the purchase price was deposited into an escrow account to satisfy our indemnification obligations under the purchase agreement and is captured as "Restricted cash" in our condensed consolidating balance sheet. Any remaining balance in the escrow account will be released to us 18 months following the closing date, unless both parties mutually agree to release the remaining balance prior to such date. Pursuant to the purchase agreement, the purchase price paid at closing was adjusted based upon an estimated working capital adjustment, which is subject to post-closing reconciliation, to reflect TFI’s actual working capital (calculated in accordance with the purchase agreement) on the closing date. After giving effect to the indemnity escrow, the estimated working capital adjustment and the payment of transaction fees and other expenses, the amount of net cash proceeds used to reduce the outstanding balance under the ABL Facility on the closing date was approximately $74.6 million. The post-closing working capital reconciliation is still in process and may result in an increase or decrease in our final net cash proceeds and the final loss on the sale of TFI.

We classified TFI as discontinued operations in our condensed consolidated statements of operations for the three months endedMarch 31, 2016 and 2015.     We recorded income related to the sale of TFI of $0.1 million and $0.9 million as a component of "Income from discontinued operations, net of income taxes" in our consolidated statements of operations for the three months endedMarch 31, 2016 and 2015, respectively.

The following table provides selected financial information of discontinued operations related to TFI (and includes TFI's results through the sale on April 11, 2015):

	Three Months Ended
	March 31,
	2016		2015
Revenue	$	—	$	17,497
Income from discontinued operations before income taxes	$	—	$	1,186
Income tax expense	—		(265		)
Income from discontinued operations - before sale	$	—	$	921
Income on sale of TFI	55		—
Income from discontinued operations	$	55	$	921

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Subsidiary Guarantors

3 Months Ended

Mar. 31, 2016

Condensed Financial Information of Parent Company Only Disclosure [Abstract]

Subsidiary Guarantors

Subsidiary Guarantors

Our obligations under the 2018 Notes are jointly and severally, fully and unconditionally guaranteed by certain of our subsidiaries. Pursuant to the terms of the Indenture, the guarantees are full and unconditional, but are subject to release under the following circumstances:

• in connection with any sale, disposition or transfer of all or substantially all of the assets to a person that is not the Company or a subsidiary guarantor;

• in connection with any sale, disposition or transfer of all of the capital stock of that subsidiary guarantor to a person that is not the Company or a subsidiary guarantor;

• if we designate any restricted subsidiary that is a subsidiary guarantor to be an unrestricted subsidiary; or

• upon legal defeasance or the discharge of our obligations under the Indenture.

Although the guarantees are subject to release under the above described circumstances, we have concluded they are still deemed full and unconditional for purposes of Rule 3-10 of Regulation S-X because these circumstances are customary, and accordingly, we concluded that we may rely on Rule 3-10 of Regulation S-X, as the other requirements of Rule 3-10 have been met.

See "Subsequent Events Related to Restructuring" in Note 17 for details on additional guaranty obligations for our subsidiaries.

The following tables present consolidating financial information for Nuverra Environmental Solutions, Inc. (“Parent”) and its 100% wholly-owned subsidiaries (the “Guarantor Subsidiaries”) as of March 31, 2016 and December 31, 2015 and for the three months endedMarch 31, 2016 and 2015. In June 2015, we purchased the remaining interest in AWS, previously a 51% owned non-guarantor subsidiary, and have recast the tables to reflect AWS as a part of the Guarantor Subsidiaries for the three months endedMarch 31, 2015. During the three months ended December 31, 2015, Nuverra Rocky Mountain Pipeline, LLC (or "RMP") was released from all obligations including as guarantor. However, because RMP's individual results are not material as there are no active contracts for new pipelines, we have not separately presented RMP as a Non-Guarantor, but rather continued to include RMP in the Guarantor Subsidiaries column. These condensed consolidating financial statements have been prepared from our financial information on the same basis of accounting as our condensed consolidated financial statements. The principal elimination entries relate to investments in subsidiaries and intercompany balances and transactions.

CONDENSED CONSOLIDATING BALANCE SHEET

MARCH 31, 2016

(Unaudited)

	Parent			Guarantor Subsidiaries			Eliminations			Consolidated
ASSETS
Cash and cash equivalents	$	808		$	(778	)	$	—		$	30
Restricted cash	4,250			200			—			4,450
Accounts receivable, net	—			30,857			—			30,857
Deferred income taxes	—			—			—			—
Other current assets	7,275			5,195			—			12,470
Total current assets	12,333			35,474			—			47,807
Property, plant and equipment, net	2,546			389,229						391,775
Equity investments	32,033			576			(28,864		)	3,745
Intangible assets, net	—			16,214			—			16,214
Other	405,619			80,677			(485,724		)	572
Total assets	$	452,531		$	522,170		$	(514,588	)	$	460,113
LIABILITIES AND SHAREHOLDERS' DEFICIT
Accounts payable	$	1,610		$	5,659		$	—		$	7,269
Accrued liabilities	23,048			11,204			—			34,252
Current portion of contingent consideration	—			8,500			—			8,500
Current portion of long-term debt	454,003			9,161			—			463,164
Total current liabilities	478,661			34,524			—			513,185
Deferred income taxes	(32,473		)	32,768			—			295
Long-term portion of debt	—			8,015			—			8,015
Other long-term liabilities	71,460			417,999			(485,724		)	3,735
Total shareholders' deficit	(65,117		)	28,864			(28,864		)	(65,117		)
Total liabilities and shareholders' deficit	$	452,531		$	522,170		$	(514,588	)	$	460,113

CONDENSED CONSOLIDATING BALANCE SHEET

DECEMBER 31, 2015

	Parent			Guarantor Subsidiaries			Eliminations			Consolidated
ASSETS
Cash and cash equivalents	$	40,660		$	(1,351	)	$	—		$	39,309
Restricted cash	4,250			—			—			4,250
Accounts receivable, net	—			42,188			—			42,188
Other current assets	2,654			6,080			—			8,734
Total current assets	47,564			46,917			—			94,481
Property, plant and equipment, net	2,609			403,579			—			406,188
Equity investments	43,542			581			(40,373		)	3,750
Intangible assets, net	—			16,867			—			16,867
Other	404,620			72,137			(475,424		)	1,333
Total assets	$	498,335		$	540,081		$	(515,797	)	$	522,619
LIABILITIES AND SHAREHOLDERS' DEFICIT
Accounts payable	$	172		$	6,735		$	—		$	6,907
Accrued liabilities	13,824			16,019			—			29,843
Current portion of contingent consideration	—			8,628			—			8,628
Current portion of long-term debt	492,671			7,038			—			499,709
Total current liabilities	506,667			38,420			—			545,087
Deferred income taxes	(32,488		)	32,758			—			270
Long-term portion of debt	—			11,758			—			11,758
Other long-term liabilities	62,427			416,772			(475,424		)	3,775
Total shareholders' deficit	(38,271		)	40,373			(40,373		)	(38,271		)
Total liabilities and shareholders' deficit	$	498,335		$	540,081		$	(515,797	)	$	522,619

CONDENSED CONSOLIDATING STATEMENTS OF OPERATIONS

THREE MONTHS ENDED MARCH 31, 2016

(Unaudited)

	Parent			Guarantor Subsidiaries			Eliminations		Consolidated
Revenue	$	—		$	46,975		$	—	$	46,975
Costs and expenses:
Direct operating expenses	—			38,617			—		38,617
General and administrative expenses	3,490			3,962			—		7,452
Depreciation and amortization	69			15,776			—		15,845
Total costs and expenses	3,559			58,355			—		61,914
Operating loss	(3,559		)	(11,380		)	—		(14,939		)
Interest expense, net	(11,758		)	(287		)	—		(12,045		)
Other income, net	—			163			—		163
Loss from equity investments	(11,532		)	(5		)	11,532		(5		)
Loss on extinguishment of debt	(390		)	—			—		(390		)
Loss from continuing operations before income taxes	(27,239		)	(11,509		)	11,532		(27,216		)
Income tax expense	(32		)	(23		)	—		(55		)
Loss from continuing operations	(27,271		)	(11,532		)	11,532		(27,271		)
Income from discontinued operations, net of income taxes	55			—			—		55
Net loss attributable to common shareholders	$	(27,216	)	$	(11,532	)	$	11,532	$	(27,216	)

CONDENSED CONSOLIDATING STATEMENTS OF OPERATIONS

THREE MONTHS ENDED MARCH 31, 2015

(Unaudited)

	Parent			Guarantor Subsidiaries			Eliminations			Consolidated
Revenue	$	—		$	119,112		$	—		$	119,112
Costs and expenses:
Direct operating expenses	—			87,999			—			87,999
General and administrative expenses	6,662			6,038			—			12,700
Depreciation and amortization	170			17,312			—			17,482
Other, net	—			683			—			683
Total costs and expenses	6,832			112,032			—			118,864
Operating (loss) income	(6,832		)	7,080			—			248
Interest expense, net	(12,362		)	(226		)	—			(12,588		)
Other income, net	—			342			—			342
Income (loss) from equity investments	8,083			(21		)	(8,083		)	(21		)
(Loss) income from continuing operations before income taxes	(11,111		)	7,175			(8,083		)	(12,019		)
Income tax benefit (expense)	37			(13		)	—			24
(Loss) income from continuing operations	(11,074		)	7,162			(8,083		)	(11,995		)
Income from discontinued operations, net of income taxes	—			921			—			921
Net (loss) income attributable to common shareholders	$	(11,074	)	$	8,083		$	(8,083	)	$	(11,074	)

CONDENSED CONSOLIDATING STATEMENT OF CASH FLOWS

THREE MONTHS ENDED MARCH 31, 2016

(Unaudited)

	Parent			Guarantor Subsidiaries			Consolidated
Cash flows from operating activities:
Net cash provided by operating activities from continuing operations	$	115		$	2,450		$	2,565
Net cash used in operating activities from discontinued operations	—			—			—
Net cash provided by operating activities	115			2,450			2,565
Cash flows from investing activities:
Proceeds from the sale of property and equipment	25			1,424			1,449
Purchase of property, plant and equipment	—			(1,421		)	(1,421		)
Increase in restricted cash	—			(200		)	(200		)
Net cash provided by (used in) investing activities from continuing operations	25			(197		)	(172		)
Net cash used in investing activities from discontinued operations	—			—			—
Net cash provided by (used in) investing activities	25			(197		)	(172		)
Cash flows from financing activities:
Proceeds from revolving credit facility	12,409			—			12,409
Payments on revolving credit facility	(51,968		)	—			(51,968		)
Payments for deferred financing costs	(426		)	—			(426		)
Payments on vehicle financing and other financing activities	(7		)	(1,680		)	(1,687		)
Net cash used in financing activities from continuing operations	(39,992		)	(1,680		)	(41,672		)
Net cash used in financing activities from discontinued operations	—			—			—
Net cash used in financing activities	(39,992		)	(1,680		)	(41,672		)
Net (decrease) increase in cash	(39,852		)	573			(39,279		)
Cash and cash equivalents - beginning of period	40,660			(1,351		)	39,309
Cash and cash equivalents - end of period	808			(778		)	30
Less: cash and cash equivalents of discontinued operations - end of period	—			—			—
Cash and cash equivalents of continuing operations - end of period	$	808		$	(778	)	$	30

CONDENSED CONSOLIDATING STATEMENT OF CASH FLOWS

THREE MONTHS ENDED MARCH 31, 2015

(Unaudited)

	Parent			Guarantor Subsidiaries			Consolidated
Cash flows from operating activities:
Net cash provided by operating activities from continuing operations	$	27,658		$	7,092		$	34,750
Net cash provided by operating activities from discontinued operations	—			867			867
Net cash provided by operating activities	27,658			7,959			35,617
Cash flows from investing activities:
Proceeds from the sale of property and equipment	255			1,713			1,968
Purchase of property, plant and equipment	—			(6,163		)	(6,163		)
Net cash provided by (used in) investing activities from continuing operations	255			(4,450		)	(4,195		)
Net cash used in investing activities from discontinued operations	—			(161		)	(161		)
Net cash provided by (used in) investing activities	255			(4,611		)	(4,356		)
Cash flows from financing activities:
Payments on revolving credit facility	(7,000		)	—			(7,000		)
Payments on vehicle financing and other financing activities	(75		)	(1,361		)	(1,436		)
Net cash used in financing activities from continuing operations	(7,075		)	(1,361		)	(8,436		)
Net cash provided by financing activities from discontinued operations	—			38			38
Net cash used in financing activities	(7,075		)	(1,323		)	(8,398		)
Net increase in cash	20,838			2,025			22,863
Cash and cash equivalents - beginning of period	13,801			1,615			15,416
Cash and cash equivalents - end of period	34,639			3,640			38,279
Less: cash and cash equivalents of discontinued operations - end of period				(2,793		)	(2,793		)
Cash and cash equivalents of continuing operations - end of period	$	34,639		$	847		$	35,486

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Subsequent Events Related to Restructuring

3 Months Ended

Mar. 31, 2016

Subsequent Events [Abstract]

Subsequent Events Related to Restructuring

Subsequent Events Related to Restructuring

On April 15, 2016, we closed (i) our exchange offer (the “Exchange Offer”) relating to our 2018 Notes, (ii) a new $24.0 million principal amount first-lien term loan due 2018 (the “Term Loan”) and (iii) related transactions as part of a comprehensive restructuring of our outstanding indebtedness pursuant to the Restructuring Support Agreement.

Exchange Offer

Pursuant to the Exchange Offer, we offered to exchange our new Second-Lien Notes Due 2021 (the “2021 Notes”) and shares of our common stock at a conversion price per share of $0.32 (the “Conversion Price”) for any and all of our 2018 Notes validly tendered and not properly withdrawn at or prior to the expiration date, with the exception of approximately $31.4 million in principal 2018 Notes owned by an entity controlled by Mark D. Johnsrud, our Chairman of the Board and Chief Executive Officer. We settled the Exchange Offer on April 15, 2016 by delivering to tendering holders of the 2018 Notes (i) $327.2 million in aggregate principal amount of the new 2021 Notes to those tendering holders electing to exchange for 2021 Notes and $0.9 million in shares of common stock converted at the Conversion Price to those tendering holders electing to exchange for common stock and (ii) a pro rata share (based on the aggregate principal amount of the 2018 Notes validly tendered) of penny warrants sufficient to purchase 10% of shares of our common stock (the "Exchange Warrants"). In addition, the 2018 Notes held by an entity controlled by Mr. Johnsrud were cancelled and will be converted to shares of our common stock at the Conversion Price upon shareholder approval of an increase in the number of shares of our common stock authorized to be issued by the Company (the "Johnsrud Note Conversion").

In connection with the issuance of the new 2021 Notes, we entered into a new Indenture that governs the terms of the new 2021 Notes, dated as of April 15, 2016, between the Company, Wilmington Savings Fund Society, FSB, as Trustee, and the Guarantors party thereto. Pursuant to the new Indenture, the 2021 Notes will mature on April 15, 2021. Interest will be paid in kind semi-annually by increasing the principal amount payable and due at maturity and/or in cash as follows: interest payable on October 15, 2016 will be paid in kind at an annual rate of 12.5%; interest payable after October 15, 2016 but on or before April 15, 2018 will be paid at a rate of 10% with 50% in kind and 50% in cash; interest payable after April 15, 2018 will be paid in cash at a rate of 10% until maturity. As a result, our annual cash interest payment obligations have been reduced by approximately $17.8 million for the remainder of 2016, $17.9 million for 2017 and $8.6 million through April 15, 2018. The 2021 Notes are secured by junior liens on the same collateral as our ABL Facility and rank equal in right of payment to all senior indebtedness and senior to all subordinated indebtedness of the Company. The 2021 Notes are guaranteed by our subsidiaries.

Upon settlement of the Exchange Offer, there remained outstanding approximately $40.4 million aggregate principal amount of 2018 Notes. Ongoing semi-annual interest expense with respect to the remaining 2018 Notes is approximately $2.0 million. In addition, based on the completion of the Exchange Offer, consents from each exchanging holder of the 2018 Notes for the waiver of certain provisions of the 2018 Notes Indenture became effective. The consents, among other things, waive substantially all of the restrictive covenants in the 2018 Notes Indenture and potential defaults arising from non-compliance with such waived covenants.

Term Loan

Concurrent to the Exchange Offer we entered into the Term Loan funded by certain holders of the 2018 Notes that were also parties to the Restructuring Support Agreement. The Term Loan accrues interest at a rate of 13% per annum to be paid in kind by increasing the principal amount payable thereunder. Principal including the paid in kind interest is due April 15, 2018. The Term Loan is subject to a minimum EBITDA covenant that is identical in all respects to the minimum EBITDA covenant applicable to the ABL Facility. To the extent actual EBITDA (as defined by the Term Loan) falls short of the minimum EBITDA targets, the Term Loan accrues interest at rate of 17%. The Term Loan is secured by junior liens on the same collateral as our ABL Facility and guaranteed by our subsidiaries. In connection with the Term Loan, we entered into a warrant agreement with the lenders under the Term Loan, pursuant to which, as a commitment fee for entering into the Term Loan, the lenders received warrants to purchase up to 5% of our then-outstanding stock at an exercise price of $0.01 per share (the "Term Loan Warrants"). The Exchange Warrants and the Term Loan Warrants (collectively, the "Warrants") contain anti-dilution provisions which adjust the number of shares issuable upon exercise thereof in certain circumstances, including adjustments intended to preserve the proportion of outstanding common stock into which such Warrants are exercisable after giving effect to the Johnsrud Note Conversion and the Rights Offering described below.

Proceeds from the Term Loan were applied to pay down a portion of the outstanding balance of the ABL Facility and were reborrowed by the Company to fund the scheduled interest payment on the 2018 Notes and pay related transaction fees and expenses.

ABL Facility Amendments

On April 15, 2016, we also entered into a Seventh Amendment to Amended and Restated Credit Agreement, dated April 15, 2016 (the “Seventh ABL Facility Amendment”), by and among the Agent, the Lenders and the Company to make conforming amendments in connection with the restructuring transactions. Among other terms and conditions, the Seventh Amendment amends the ABL Facility to: (i) require that the we apply excess proceeds from asset sales to pay down the ABL Facility; (ii) prohibit us from optionally prepaying or acquiring other indebtedness, making any payment on subordinated indebtedness, or amending certain agreements and documents; and (iii) amend certain definitions in the ABL Facility.

Rights Offering

As part of the debt restructuring plan, we will also pursue an equity rights offering (the “Rights Offering”), in which all holders of our common stock will be granted the right to participate. Each shareholder who participates in the Rights Offering will have the right to subscribe for a pro rata share of $5.0 million of common stock exercisable at a 20% discount to the Conversion Price. We expect to complete the Rights Offering in the second quarter of 2016, subject to shareholder approval of an amendment to our Certificate of Incorporation to provide for the issuance of sufficient additional shares of common stock. We expect to hold a Special Meeting of Shareholders in the second quarter of 2016 to approve the amendment to our Certificate of Incorporation. Additionally, Mr. Johnsrud has agreed to backstop the proposed Rights Offering by committing to purchase rights that are not exercised by other shareholders in order to ensure that the Company receives the additional liquidity. On April 15, 2016, the Company and Mr. Johnsrud entered into an Escrow Agreement, pursuant to which Mr. Johnsrud deposited $5.0 million for the purpose of securing Mr. Johnsrud’s backstop obligations under the Rights Offering. Upon consummation of the Johnsrud Note Conversion and the Rights Offering and after giving effect to the other components of the debt restructuring plan (including adjustment to the number of shares issuable upon exercise of the Warrants), we expect to have approximately 176 million shares of outstanding common stock on a fully-diluted basis, excluding shares issuable in connection with the management incentive plan contemplated by the Restructuring Support Agreement.

Net proceeds from the Rights Offering will be used to pay down the ABL Facility, which will then be available for further drawdowns, subject to any borrowing base limitations and compliance with other applicable terms and conditions under the ABL Facility.

The Restructuring and the transactions contemplated thereby are subject to additional terms and conditions. We provide no assurances that we will be able to successfully consummate the Restructuring or other alternatives to restructure our existing indebtedness, in which case we may need to restructure under the Bankruptcy Code.

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Basis of Presentation Basis of Presentation (Policies)

3 Months Ended

Mar. 31, 2016

Organization, Consolidation and Presentation of Financial Statements [Abstract]

Basis of Presentation

Basis of Presentation

The accompanying condensed consolidated financial statements of Nuverra Environmental Solutions, Inc. and its subsidiaries (collectively, “Nuverra,” the “Company,” “we,” “us,” or “our”) are unaudited, pursuant to the rules and regulations of the United States Securities and Exchange Commission ("SEC"). Our condensed consolidated balance sheet as of December 31, 2015, included herein, has been derived from audited financial statements, but does not include all disclosures required by accounting principles generally accepted in the United States of America (or "GAAP"). Certain information and footnote disclosures normally included in financial statements prepared in accordance with GAAP have been condensed or omitted pursuant to such rules and regulations. In our opinion, the condensed consolidated financial statements include the normal, recurring adjustments necessary for the fair statement of the results for the interim periods. These financial statements should be read in conjunction with the audited consolidated financial statements, including the notes thereto, contained in our Annual Report on Form 10-K for the year ended December 31, 2015, filed with the SEC on March 11, 2016.

All dollar and share amounts in the footnote tabular presentations are in thousands, except per share amounts and unless otherwise noted. Unless stated otherwise, any reference to statement of operations items in these accompanying condensed consolidated financial statements refers to results from continuing operations.

Reclassifications

Reclassifications

Certain reclassifications and adjustments have been made to prior period amounts in the accompanying condensed consolidated statements of operations and cash flows and notes thereto in order to conform to the current year’s presentation including:

• Certain similar line items in the condensed consolidated statement of cash flows for the three months ended March 31, 2015 have been combined to conform to the current year presentation.

• In June 2015, we purchased the remaining interest in Appalachian Water Services, LLC (“AWS”), previously a 51% owned non-guarantor subsidiary, and have recast the tables in Note 16 to reflect AWS as a part of the Guarantor Subsidiaries for the three months endedMarch 31, 2015.

• As of January 1, 2016, and further discussed below under "Significant Accounting Policies," we retrospectively adopted, for all comparative periods presented, ASU 2015-03, Simplifying the Presentation of Debt Issuance Costs, and ASU 2015-15, Presentation and Subsequent Measurement of Debt Issuance Costs Associated with Line-of-Credit Arrangements. As a result, $7.9 million and $8.7 million of unamortized debt issuance costs related to our 2018 Notes have been reclassified from “Other assets” to “Current portion of long-term debt” on the condensed consolidated balance sheets as of March 31, 2016 and December 31, 2015, respectively. Additionally, as the debt associated with our asset-based revolving credit facility is presented as short-term, the related debt issuance costs of $2.1 million and $2.2 million as of March 31, 2016 and December 31, 2015, respectively, have been reclassified from "Other assets" to "Other current assets" on the condensed consolidated balance sheets. Further, the total assets for the Corporate segment reported in Note 14 have been adjusted for this reclass.

Recently Issued Accounting Pronouncements

Recently Issued Accounting Pronouncements

In May 2014, the Financial Accounting Standards Board ("FASB") issued Accounting Standards Update ("ASU") No. 2014-09, Revenue from Contracts with Customers (Topic 606) (“ASU 2014-09”). The amendments in this update will be added to the ASC as Topic 606, Revenue from Contracts with Customers, and replaces the guidance in Topic 605. The underlying principle of the guidance in this update is that a business or other organization will recognize revenue to depict the transfer of promised goods or services to customers in an amount that reflects what it expects to receive in exchange for the goods or services. This new revenue standard also calls for more detailed disclosures and provides guidance for transactions that weren’t addressed completely, such as service revenue and contract modifications which may be applied retrospectively or modified retrospectively. In August 2015, the FASB issued ASU No. 2015-14, Revenue from Contracts with Customers (Topic 606): Deferral of the Effective Date ("ASU 2015-14"). The guidance in ASU 2015-14 delays the effective date for the new revenue recognition guidance outlined in ASU 2014-09 to reporting periods beginning after December 15, 2017, which for us is the reporting period starting January 1, 2018. We are reviewing the guidance in ASU 2014-09 and have not yet assessed the impact, if any, on our consolidated financial statements and have not determined our method of adoption.

In August 2014, the FASB issued ASU No. 2014-15, Disclosure of Uncertainties about an Entity’s Ability to Continue as a GoingConcern (“ASU 2014-15”). ASU 2014-15 requires management to evaluate whether there is substantial doubt about an entity’s ability to continue as a going concern and to provide related footnote disclosures. In doing so, companies will have reduced diversity in the timing and content of footnote disclosures than under today’s guidance. ASU 2014-15 is effective for reporting periods beginning after December 15, 2016, which for us is the reporting period starting January 1, 2017, with early adoption permitted. We are reviewing the guidance in ASU 2014-15 and evaluating the impact this new guidance may have on our consolidated financial statements.

In February 2016, the FASB issued ASU No. 2016-02, Leases (Topic 842) ("ASU 2016-02"), which requires an entity that is a lessee to recognize the assets and liabilities arising from leases on the balance sheet. This guidance also requires disclosures about the amount, timing and uncertainty of cash flows arising from leases. This guidance is effective for annual reporting periods beginning after December 15, 2018, and interim periods within those annual periods, using a modified retrospective approach. Early adoption of ASU 2016-09 is permitted. We are evaluating the effect that ASU 2016-02 will have on our consolidated financial statements and related disclosures. Based upon the current effective date, the new guidance would first apply to our reporting period starting January 1, 2019.

In March 2016, the FASB issued ASU No. 2016-09, Compensation-Stock Compensation- Improvements to Employee Share-Based Payment Accounting ("ASU 2016-09"), which involves several aspects of the accounting for share-based payment transactions, including the income tax consequences, classification of awards as either equity or liabilities, and classification on the statement of cash flows.  Under the new standard, income tax benefits and deficiencies are to be recognized as income tax expense or benefit in the income statement and the tax effects of exercised or vested awards should be treated as discrete items in the reporting period in which they occur.  An entity should also recognize excess tax benefits regardless of whether the benefit reduces taxes payable in the current period.  Excess tax benefits should be classified along with other income tax cash flows as an operating activity.  In regards to forfeitures, the entity may make an entity-wide accounting policy election to either estimate the number of awards that are expected to vest or account for forfeitures when they occur. ASU 2016-09 is effective for fiscal years beginning after December 15, 2016, including interim periods within that reporting period, however early adoption is permitted.  We are currently evaluating the guidance in ASU 2016-09 to determine our adoption method and the effect it will have on our consolidated financial statements.

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Earnings Per Common Share (Tables)

3 Months Ended

Mar. 31, 2016

Earnings Per Share [Abstract]

Schedule of Earnings Per Share, Basic and Diluted

The following table presents the calculation of basic and diluted net loss per common share:

	Three Months Ended
	March 31,
	2016			2015
Numerator:
Loss from continuing operations	$	(27,271	)	$	(11,995	)
Income from discontinued operations	55			921
Net loss attributable to common shareholders	$	(27,216	)	$	(11,074	)
Denominator:
Weighted average shares—basic	27,907			27,412
Common stock equivalents	—			—
Weighted average shares—diluted	27,907			27,412
Basic and diluted loss per common share from continuing operations	$	(0.98	)	$	(0.44	)
Basic and diluted income per common share from discontinued operations	—			0.03
Net loss per basic and diluted common share	$	(0.98	)	$	(0.41	)
Anti-dilutive stock-based awards excluded	706			879

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Intangible Assets (Tables)

3 Months Ended

Mar. 31, 2016

Goodwill and Intangible Assets Disclosure [Abstract]

Intangible Assets

Intangible assets consist of the following:

	March 31, 2016								December 31, 2015
	Gross Carrying Amount		Accumulated Amortization			Net		Remaining Useful Life (Years)	Gross Carrying Amount		Accumulated Amortization			Net		Remaining Useful Life (Years)
Customer relationships	$	11,731	$	(7,219	)	$	4,512	5.5	$	11,731	$	(6,865	)	$	4,866	6.0
Disposal permits	1,269		(492		)	777		4.9	1,269		(451		)	818		5.2
Customer contracts	17,352		(6,427		)	10,925		10.5	17,352		(6,169		)	11,183		11.0
	$	30,352	$	(14,138	)	$	16,214	8.9	$	30,352	$	(13,485	)	$	16,867	9.3

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Fair Value Measurements (Tables)

3 Months Ended

Mar. 31, 2016

Fair Value Disclosures [Abstract]

Assets and Liabilities Measured at Fair Value on a Recurring Basis and Fair Value Hierarchy of the Valuation Techniques

Assets and liabilities measured at fair value on a recurring basis and the fair value hierarchy of the valuation techniques we utilized to determine such fair value included significant unobservable inputs (Level 3) and were as follows:

	Fair Value
As of March 31, 2016
Assets - Cost method investment	$	3,169
Liabilities - Contingent consideration	8,500
As of December 31, 2015
Assets - Cost method investment	$	3,169
Liabilities - Contingent consideration	8,628

Changes to Contingent Consideration

Changes to contingent consideration obligations during the three months endedMarch 31, 2016 and the year ended December 31, 2015 were as follows:

	March 31, 2016			December 31, 2015
Balance at beginning of period	$	8,628		$	9,824
Cash payments	—			(909		)
Changes in fair value of contingent consideration, net	(128		)	(287		)
Current portion of contingent consideration	$	8,500		$	8,628

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Accrued Liabilities (Tables)

3 Months Ended

Mar. 31, 2016

Payables and Accruals [Abstract]

Accrued Liabilities

Accrued liabilities consisted of the following at March 31, 2016 and December 31, 2015:

	March 31, 2016		December 31, 2015
Accrued payroll and employee benefits	$	2,392	$	5,839
Accrued insurance	6,000		5,896
Accrued legal and environmental costs	1,714		1,531
Accrued taxes	1,200		1,514
Accrued interest	18,365		8,516
Accrued operating costs	2,192		4,233
Accrued other	2,389		2,314
Total accrued liabilities	$	34,252	$	29,843

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Debt (Tables)

3 Months Ended

Mar. 31, 2016

Debt Disclosure [Abstract]

Debt

Debt consisted of the following at March 31, 2016 and December 31, 2015:

			March 31, 2016							December 31, 2015
	Interest Rate	Maturity Date	Unamortized Deferred Financing Costs (g)		Fair Value of Debt (f)		Carrying Value of Debt			Carrying Value of Debt
ABL Facility (a)	2.94%	Jan. 2018	$	2,109	$	62,273	$	62,273		$	101,832
2018 Notes (b)	9.875%	Apr. 2018	7,862		96,000		400,000			400,000
Vehicle financings (c)	1.52%	Various	—		11,114		11,114			12,303
Note payable (d)	4.25%	Apr. 2019	—		6,063		6,063			6,492
Total debt			$	9,971	$	175,450	479,450			520,627
Original issue discount (e)							(578		)	(639		)
Original issue premium (e)							169			187
Deferred financing costs presented with debt (g)							(7,862		)	(8,708		)
Total debt, net							471,179			511,467
Less: current portion (h)							(463,164		)	(499,709		)
Long-term portion of debt							$	8,015		$	11,758

_____________________

(a) The interest rate presented represents the interest rate on the $100.0 million ABL Facility at March 31, 2016.

(b) The interest rate presented represents the coupon rate on our outstanding $400.0 million aggregate principal amounts of 9.875% Senior Notes due 2018 (the “2018 Notes”), excluding the effects of deferred financing costs, original issue discounts and original issue premiums. Including the impact of these items, the effective interest rate on the 2018 Notes is approximately 11.0%. Interest payments are due semi-annually on April 15 and October 15 of each year.

(c) Vehicle financings consist of capital lease arrangements related to fleet purchases with a weighted-average annual interest rate of approximately 1.52% and which mature in varying installments between 2016 and 2020. Capital lease obligations were $11.1 million and $12.3 million, respectively, at March 31, 2016 and December 31, 2015, respectively.

(d) During the three months ended June 30, 2015, we settled our $11.0 million financing obligation to acquire the remaining 49% interest in AWS from the non-controlling interest holder with a $4.0 million cash payment and a $7.4 million note payable with principal and interest due in equal quarterly installments through April 2019.

(e) The issuance discount represents the unamortized difference between the $250.0 million aggregate principal amount of the 2018 Notes issued in April 2012 and the proceeds received upon issuance (excluding interest and fees). The issuance premium represents the unamortized difference between the proceeds received in connection with the November 2012 issuance of the 2018 Notes (excluding interest and fees) and the $150.0 million aggregate principal amount thereunder.

(f) The estimated fair value of our 2018 Notes is based on quoted market prices as of March 31, 2016. Our ABL Facility and vehicle financings bear interest at rates commensurate with market rates and therefore their respective carrying values approximate fair value.

(g) As discussed previously in Note 1, upon retrospective adoption of ASU 2015-03, we have reclassified the deferred financing costs associated with the 2018 Notes to be presented in the balance sheet as a direct deduction from the carrying amount of the debt liability as of March 31, 2016 and December 31, 2015. In accordance with ASU 2015-15, the deferred financing costs related to the ABL Facility continue to be presented as an asset, and are included in "Other current assets" on the condensed consolidated balance sheets as of March 31, 2016 and December 31, 2015.

(h) As a result of the probability of breaching one of the financial covenants if we are not successful at restructuring our debt (see "Restructuring Support Agreement" later in this section), the carrying value of the ABL Facility and the 2018 Notes was reclassified to current liabilities in the consolidated balance sheet as of March 31, 2016 and December 31, 2015.

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Restructuring and Exit Costs (Tables)

3 Months Ended

Mar. 31, 2016

Restructuring and Related Activities [Abstract]

Restructuring and Related Costs

A rollforward of the restructuring and exit cost accruals from December 31, 2015 through March 31, 2016 is as follows:

	Employee Termination Costs (a)		Lease Exit Costs (b)			Other Exit Costs (c)		Total
Restructuring and exit costs accrued at December 31, 2015	$	—	$	180		$	—	$	180
Restructuring and exit-related costs	—		—			—		—
Cash payments	—		(12		)	—		(12		)
Restructuring and exit costs accrued at March 31, 2016	$	—	$	168		$	—	$	168

_____________________

(a) Employee termination costs consist primarily of severance and related costs.

(b) Lease exit costs consist primarily of costs that will continue to be incurred under non-cancellable operating leases for their remaining term without benefit to us.

(c) Other exit costs include costs related to the movement of vehicles and rental fleet in connection with the exit from certain shale areas.

Such costs consisted of the following:

	Three Months Ended		Three Months Ended
	March 31, 2016		March 31, 2015
Severance and termination benefits	$	—	$	240
Asset impairment charge	—		—
Contract termination costs and exit costs	—		443
Total restructuring and exit costs	$	—	$	683

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Income Taxes (Tables)

3 Months Ended

Mar. 31, 2016

Income Tax Disclosure [Abstract]

Components of (Expense) Benefit for Income Taxes

The following table shows the components of the income tax benefit for the periods indicated:

	Three Months Ended
	March 31,
	2016			2015
Current income tax (expense) benefit	$	(30	)	$	25
Deferred income tax expense	(25		)	(1		)
Total income tax (expense) benefit	$	(55	)	$	24

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Share-based Compensation (Tables)

3 Months Ended

Mar. 31, 2016

Disclosure of Compensation Related Costs, Share-based Payments [Abstract]

Disclosure of Share-based Compensation Arrangements by Share-based Payment Award

The total grants awarded during the three months endedMarch 31, 2016 and March 31, 2015 are presented in the table below:

	Three Months Ended
	March 31,
	2016	2015
Stock option grants	—	703
Restricted stock grants	—	—
Restricted stock unit grants	1	151
Total grants under the 2009 Plan	1	854

The total stock-based compensation cost included in "General and administrative expenses" in the accompanying condensed consolidated statements of operations was as follows:

	Three Months Ended
	March 31,
	2016		2015
Stock options	$	84	$	148
Restricted stock	85		101
Restricted stock units	199		540
Total stock-based compensation expense	$	368	$	789

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Segments (Tables)

3 Months Ended

Mar. 31, 2016

Segment Reporting [Abstract]

Financial Information for Reportable Segments

Financial information for our reportable segments related to continuing operations is presented below.

	Rocky Mountain			Northeast			Southern			Corporate/ Other			Total
Three months ended March 31, 2016
Revenue	$	24,905		$	12,777		$	9,293		$	—		$	46,975
Direct operating expenses	19,558			11,568			7,491			—			38,617
General and administrative expenses	1,852			1,190			920			3,490			7,452
Depreciation and amortization	8,079			3,883			3,814			69			15,845
Operating loss	(4,584		)	(3,864		)	(2,932		)	(3,559		)	(14,939		)
Loss from continuing operations before income taxes	(4,652		)	(3,931		)	(2,926		)	(15,707		)	(27,216		)
As of March 31, 2016
Total assets (a)	246,530			72,916			123,028			17,639			460,113
Three months ended March 31, 2015
Revenue	69,410			27,313			22,389			—			119,112
Direct operating expenses	48,425			21,496			18,078			—			87,999
General and administrative expenses	2,056			1,904			2,078			6,662			12,700
Depreciation and amortization	8,737			3,927			4,648			170			17,482
Operating income (loss)	10,192			(98		)	(3,014		)	(6,832		)	248
Income (loss) from continuing operations before income taxes	10,097			13			(2,935		)	(19,194		)	(12,019		)
As of December 31, 2015
Total assets (a)	263,871			76,472			128,482			53,794			522,619

_____________________

(a)    Total assets exclude intercompany receivables eliminated in consolidation.

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Discontinued Operations (Tables)

3 Months Ended

Mar. 31, 2016

Discontinued Operations and Disposal Groups [Abstract]

Schedule of Disposal Groups, Including Discontinued Operations, Income Statement, Balance Sheet and Additional Disclosures

The following table provides selected financial information of discontinued operations related to TFI (and includes TFI's results through the sale on April 11, 2015):

	Three Months Ended
	March 31,
	2016		2015
Revenue	$	—	$	17,497
Income from discontinued operations before income taxes	$	—	$	1,186
Income tax expense	—		(265		)
Income from discontinued operations - before sale	$	—	$	921
Income on sale of TFI	55		—
Income from discontinued operations	$	55	$	921

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Subsidiary Guarantors (Tables)

3 Months Ended

Mar. 31, 2016

Condensed Financial Information of Parent Company Only Disclosure [Abstract]

Condensed Consolidating Balance Sheet

CONDENSED CONSOLIDATING BALANCE SHEET

MARCH 31, 2016

(Unaudited)

	Parent			Guarantor Subsidiaries			Eliminations			Consolidated
ASSETS
Cash and cash equivalents	$	808		$	(778	)	$	—		$	30
Restricted cash	4,250			200			—			4,450
Accounts receivable, net	—			30,857			—			30,857
Deferred income taxes	—			—			—			—
Other current assets	7,275			5,195			—			12,470
Total current assets	12,333			35,474			—			47,807
Property, plant and equipment, net	2,546			389,229						391,775
Equity investments	32,033			576			(28,864		)	3,745
Intangible assets, net	—			16,214			—			16,214
Other	405,619			80,677			(485,724		)	572
Total assets	$	452,531		$	522,170		$	(514,588	)	$	460,113
LIABILITIES AND SHAREHOLDERS' DEFICIT
Accounts payable	$	1,610		$	5,659		$	—		$	7,269
Accrued liabilities	23,048			11,204			—			34,252
Current portion of contingent consideration	—			8,500			—			8,500
Current portion of long-term debt	454,003			9,161			—			463,164
Total current liabilities	478,661			34,524			—			513,185
Deferred income taxes	(32,473		)	32,768			—			295
Long-term portion of debt	—			8,015			—			8,015
Other long-term liabilities	71,460			417,999			(485,724		)	3,735
Total shareholders' deficit	(65,117		)	28,864			(28,864		)	(65,117		)
Total liabilities and shareholders' deficit	$	452,531		$	522,170		$	(514,588	)	$	460,113

CONDENSED CONSOLIDATING BALANCE SHEET

DECEMBER 31, 2015

	Parent			Guarantor Subsidiaries			Eliminations			Consolidated
ASSETS
Cash and cash equivalents	$	40,660		$	(1,351	)	$	—		$	39,309
Restricted cash	4,250			—			—			4,250
Accounts receivable, net	—			42,188			—			42,188
Other current assets	2,654			6,080			—			8,734
Total current assets	47,564			46,917			—			94,481
Property, plant and equipment, net	2,609			403,579			—			406,188
Equity investments	43,542			581			(40,373		)	3,750
Intangible assets, net	—			16,867			—			16,867
Other	404,620			72,137			(475,424		)	1,333
Total assets	$	498,335		$	540,081		$	(515,797	)	$	522,619
LIABILITIES AND SHAREHOLDERS' DEFICIT
Accounts payable	$	172		$	6,735		$	—		$	6,907
Accrued liabilities	13,824			16,019			—			29,843
Current portion of contingent consideration	—			8,628			—			8,628
Current portion of long-term debt	492,671			7,038			—			499,709
Total current liabilities	506,667			38,420			—			545,087
Deferred income taxes	(32,488		)	32,758			—			270
Long-term portion of debt	—			11,758			—			11,758
Other long-term liabilities	62,427			416,772			(475,424		)	3,775
Total shareholders' deficit	(38,271		)	40,373			(40,373		)	(38,271		)
Total liabilities and shareholders' deficit	$	498,335		$	540,081		$	(515,797	)	$	522,619

Condensed Consolidating Statement of Operations

CONDENSED CONSOLIDATING STATEMENTS OF OPERATIONS

THREE MONTHS ENDED MARCH 31, 2016

(Unaudited)

	Parent			Guarantor Subsidiaries			Eliminations		Consolidated
Revenue	$	—		$	46,975		$	—	$	46,975
Costs and expenses:
Direct operating expenses	—			38,617			—		38,617
General and administrative expenses	3,490			3,962			—		7,452
Depreciation and amortization	69			15,776			—		15,845
Total costs and expenses	3,559			58,355			—		61,914
Operating loss	(3,559		)	(11,380		)	—		(14,939		)
Interest expense, net	(11,758		)	(287		)	—		(12,045		)
Other income, net	—			163			—		163
Loss from equity investments	(11,532		)	(5		)	11,532		(5		)
Loss on extinguishment of debt	(390		)	—			—		(390		)
Loss from continuing operations before income taxes	(27,239		)	(11,509		)	11,532		(27,216		)
Income tax expense	(32		)	(23		)	—		(55		)
Loss from continuing operations	(27,271		)	(11,532		)	11,532		(27,271		)
Income from discontinued operations, net of income taxes	55			—			—		55
Net loss attributable to common shareholders	$	(27,216	)	$	(11,532	)	$	11,532	$	(27,216	)

CONDENSED CONSOLIDATING STATEMENTS OF OPERATIONS

THREE MONTHS ENDED MARCH 31, 2015

(Unaudited)

	Parent			Guarantor Subsidiaries			Eliminations			Consolidated
Revenue	$	—		$	119,112		$	—		$	119,112
Costs and expenses:
Direct operating expenses	—			87,999			—			87,999
General and administrative expenses	6,662			6,038			—			12,700
Depreciation and amortization	170			17,312			—			17,482
Other, net	—			683			—			683
Total costs and expenses	6,832			112,032			—			118,864
Operating (loss) income	(6,832		)	7,080			—			248
Interest expense, net	(12,362		)	(226		)	—			(12,588		)
Other income, net	—			342			—			342
Income (loss) from equity investments	8,083			(21		)	(8,083		)	(21		)
(Loss) income from continuing operations before income taxes	(11,111		)	7,175			(8,083		)	(12,019		)
Income tax benefit (expense)	37			(13		)	—			24
(Loss) income from continuing operations	(11,074		)	7,162			(8,083		)	(11,995		)
Income from discontinued operations, net of income taxes	—			921			—			921
Net (loss) income attributable to common shareholders	$	(11,074	)	$	8,083		$	(8,083	)	$	(11,074	)

Condensed Consolidating Statement of Cash Flows

CONDENSED CONSOLIDATING STATEMENT OF CASH FLOWS

THREE MONTHS ENDED MARCH 31, 2016

(Unaudited)

	Parent			Guarantor Subsidiaries			Consolidated
Cash flows from operating activities:
Net cash provided by operating activities from continuing operations	$	115		$	2,450		$	2,565
Net cash used in operating activities from discontinued operations	—			—			—
Net cash provided by operating activities	115			2,450			2,565
Cash flows from investing activities:
Proceeds from the sale of property and equipment	25			1,424			1,449
Purchase of property, plant and equipment	—			(1,421		)	(1,421		)
Increase in restricted cash	—			(200		)	(200		)
Net cash provided by (used in) investing activities from continuing operations	25			(197		)	(172		)
Net cash used in investing activities from discontinued operations	—			—			—
Net cash provided by (used in) investing activities	25			(197		)	(172		)
Cash flows from financing activities:
Proceeds from revolving credit facility	12,409			—			12,409
Payments on revolving credit facility	(51,968		)	—			(51,968		)
Payments for deferred financing costs	(426		)	—			(426		)
Payments on vehicle financing and other financing activities	(7		)	(1,680		)	(1,687		)
Net cash used in financing activities from continuing operations	(39,992		)	(1,680		)	(41,672		)
Net cash used in financing activities from discontinued operations	—			—			—
Net cash used in financing activities	(39,992		)	(1,680		)	(41,672		)
Net (decrease) increase in cash	(39,852		)	573			(39,279		)
Cash and cash equivalents - beginning of period	40,660			(1,351		)	39,309
Cash and cash equivalents - end of period	808			(778		)	30
Less: cash and cash equivalents of discontinued operations - end of period	—			—			—
Cash and cash equivalents of continuing operations - end of period	$	808		$	(778	)	$	30

CONDENSED CONSOLIDATING STATEMENT OF CASH FLOWS

THREE MONTHS ENDED MARCH 31, 2015

(Unaudited)

	Parent			Guarantor Subsidiaries			Consolidated
Cash flows from operating activities:
Net cash provided by operating activities from continuing operations	$	27,658		$	7,092		$	34,750
Net cash provided by operating activities from discontinued operations	—			867			867
Net cash provided by operating activities	27,658			7,959			35,617
Cash flows from investing activities:
Proceeds from the sale of property and equipment	255			1,713			1,968
Purchase of property, plant and equipment	—			(6,163		)	(6,163		)
Net cash provided by (used in) investing activities from continuing operations	255			(4,450		)	(4,195		)
Net cash used in investing activities from discontinued operations	—			(161		)	(161		)
Net cash provided by (used in) investing activities	255			(4,611		)	(4,356		)
Cash flows from financing activities:
Payments on revolving credit facility	(7,000		)	—			(7,000		)
Payments on vehicle financing and other financing activities	(75		)	(1,361		)	(1,436		)
Net cash used in financing activities from continuing operations	(7,075		)	(1,361		)	(8,436		)
Net cash provided by financing activities from discontinued operations	—			38			38
Net cash used in financing activities	(7,075		)	(1,323		)	(8,398		)
Net increase in cash	20,838			2,025			22,863
Cash and cash equivalents - beginning of period	13,801			1,615			15,416
Cash and cash equivalents - end of period	34,639			3,640			38,279
Less: cash and cash equivalents of discontinued operations - end of period				(2,793		)	(2,793		)
Cash and cash equivalents of continuing operations - end of period	$	34,639		$	847		$	35,486

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Basis of Presentation (Detail) - USD ($) $ in Millions	5 Months Ended
	May. 31, 2015	Mar. 31, 2016	Dec. 31, 2015
Non-Guarantor Subsidiaries
Error Corrections and Prior Period Adjustments Restatement [Line Items]
Subsidiary ownership percentage	51.00%
Asset Based Revolving Credit Facility
Error Corrections and Prior Period Adjustments Restatement [Line Items]
Restricted Cash and Cash Equivalents		$ 0.0
Accounting Standards Update 2015-03 | 2018 Notes | Other Assets
Error Corrections and Prior Period Adjustments Restatement [Line Items]
Deferred Finance Costs, Net		(7.9)	$ (8.7)
Accounting Standards Update 2015-03 | 2018 Notes | Long-term Debt
Error Corrections and Prior Period Adjustments Restatement [Line Items]
Deferred Finance Costs, Net		7.9	8.7
Accounting Standards Update 2015-03 | Revolving Credit Facility | Other Assets
Error Corrections and Prior Period Adjustments Restatement [Line Items]
Deferred Finance Costs, Net		(2.1)	(2.2)
Accounting Standards Update 2015-03 | Revolving Credit Facility | Other Assets
Error Corrections and Prior Period Adjustments Restatement [Line Items]
Deferred Finance Costs, Net		$ 2.1	$ 2.2

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Earnings Per Common Share (Detail) - USD ($) $ / shares in Units, $ in Thousands	3 Months Ended
	Mar. 31, 2016	Mar. 31, 2015
Net Income (Loss) Attributable to Parent [Abstract]
Loss from continuing operations	$ (27,271)	$ (11,995)
Income from discontinued operations, net of income taxes	55	921
Net loss attributable to common shareholders	$ (27,216)	$ (11,074)
Weighted Average Number of Shares Outstanding Reconciliation [Abstract]
Weighted average shares—basic (in shares)	27,907,000	27,412,000
Common stock equivalents (in shares)	0	0
Weighted average shares—diluted (in shares)	27,907,000	27,412,000
Basic and diluted loss per common share from continuing operations (usd per share)	$ (0.98)	$ (0.44)
Basic and diluted income per common share from discontinued operations (usd per share)	0.00	0.03
Net loss per basic and diluted common share (usd per share)	$ (0.98)	$ (0.41)
Antidilutive stock-based awards excluded (in shares)	706,000	879,000
Continuing Operations
Weighted Average Number of Shares Outstanding Reconciliation [Abstract]
Weighted average shares—diluted (in shares)	0	0
Discontinued Operations
Weighted Average Number of Shares Outstanding Reconciliation [Abstract]
Weighted average shares—diluted (in shares)	0	0

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Intangible Assets (Detail) - USD ($) $ in Thousands	3 Months Ended	12 Months Ended
	Mar. 31, 2016	Dec. 31, 2015
Finite-Lived Intangible Assets [Line Items]
Gross Carrying Amount	$ 30,352	$ 30,352
Accumulated Amortization	(14,138)	(13,485)
Net	$ 16,214	$ 16,867
Remaining Useful Life (Years)	8 years 11 months	9 years 3 months
Customer relationships
Finite-Lived Intangible Assets [Line Items]
Gross Carrying Amount	$ 11,731	$ 11,731
Accumulated Amortization	(7,219)	(6,865)
Net	$ 4,512	$ 4,866
Remaining Useful Life (Years)	5 years 6 months	6 years
Disposal permits
Finite-Lived Intangible Assets [Line Items]
Gross Carrying Amount	$ 1,269	$ 1,269
Accumulated Amortization	(492)	(451)
Net	$ 777	$ 818
Remaining Useful Life (Years)	4 years 11 months	5 years 2 months
Customer contracts
Finite-Lived Intangible Assets [Line Items]
Gross Carrying Amount	$ 17,352	$ 17,352
Accumulated Amortization	(6,427)	(6,169)
Net	$ 10,925	$ 11,183
Remaining Useful Life (Years)	10 years 6 months	11 years

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Impairment of Ling-Lived Assets (Details) - USD ($)	3 Months Ended
	Mar. 31, 2016	Mar. 31, 2015
Goodwill and Intangible Assets Disclosure [Abstract]
Impairment of long-lived assets held-for-use	$ 0	$ 0

XML

Fair Value Measurements - Measured on a Recurring Basis (Detail) - USD ($) $ in Thousands	Mar. 31, 2016	Dec. 31, 2015
Fair Value Disclosures [Abstract]
Assets - Cost method investment	$ 3,169	$ 3,169
Liabilities - Contingent consideration	$ 8,500	$ 8,628

XML

Fair Value Measurements - Changes to Contingent Consideration (Detail) - Contingent consideration - USD ($) $ in Thousands	3 Months Ended	12 Months Ended
	Mar. 31, 2016	Dec. 31, 2015
Fair Value, Liabilities Measured on Recurring Basis, Unobservable Input Reconciliation, Calculation [Roll Forward]
Balance at beginning of period	$ 8,628	$ 9,824
Changes in fair value of contingent consideration, net	(128)	(287)
Current portion of contingent consideration	8,500	8,628
Cash
Fair Value, Liabilities Measured on Recurring Basis, Unobservable Input Reconciliation, Calculation [Roll Forward]
Contingent consideration liability settlement	$ 0	$ (909)

XML

Accrued Liabilities (Detail) - USD ($) $ in Thousands	Mar. 31, 2016	Dec. 31, 2015
Payables and Accruals [Abstract]
Accrued payroll and employee benefits	$ 2,392	$ 5,839
Accrued insurance	6,000	5,896
Accrued legal and environmental costs	1,714	1,531
Accrued taxes	1,200	1,514
Accrued interest	18,365	8,516
Accrued operating costs	2,192	4,233
Accrued other	2,389	2,314
Total accrued liabilities	$ 34,252	$ 29,843

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Debt - Schedule of Debt (Detail) - USD ($)		1 Months Ended	3 Months Ended
		Jun. 30, 2015	Mar. 31, 2016		Jun. 30, 2015	Dec. 31, 2015	Nov. 30, 2012	Apr. 30, 2012
Debt Instrument [Line Items]
Interest Rate			1.52%
Unamortized Deferred Financing Costs (g)	[1]		$ (9,971,000)
Fair Value of Debt	[2]		175,450,000
Long term debt			479,450,000			$ 520,627,000
Original issue discount	[3]		(578,000)			(639,000)
Original issue premium	[3]		169,000			187,000
Total debt, net			471,179,000			511,467,000
Less: current portion	[4]		(463,164,000)			(499,709,000)
Long-term portion of debt			8,015,000			11,758,000
Capital lease obligations, noncurrent			$ 11,100,000			$ 12,300,000
Appalachian Water Services
Debt Instrument [Line Items]
Business acquisition equity interest issuable, value		$ 11,000,000			$ 11,000,000
Percentage of ownership interest to be acquired					49.00%
Payments to acquire businesses, gross		4,000,000
Notes payable, fair value disclosure		$ 7,400,000			$ 7,400,000
Asset Based Revolving Credit Facility
Debt Instrument [Line Items]
Interest Rate	[5]		2.94%			2.45%
Maturity Date	[5]		2018-01
Maturity Date	[5]		Jan. 2018
Unamortized Deferred Financing Costs (g)	[1],[5]		$ (2,109,000)
Fair Value of Debt	[2],[5]		62,273,000
Long term debt	[5]		62,273,000			$ 101,832,000
Line of credit facility, maximum borrowing capacity			$ 100,000,000
2018 Notes
Debt Instrument [Line Items]
Interest Rate	[6]		9.875%			9.875%
Maturity Date	[6]		2018-04
Maturity Date	[6]		Apr. 2018
Unamortized Deferred Financing Costs (g)	[1]		$ (7,862,000)	[6]		$ (8,708,000)
Fair Value of Debt	[2],[6]		96,000,000
Long term debt	[6]		400,000,000			$ 400,000,000
Face amount			$ 400,000,000				$ 150,000,000.0	$ 250,000,000.0
Interest rate, effective percentage			11.00%
Vehicle Financings
Debt Instrument [Line Items]
Interest Rate	[7]		1.52%			3.86%
Maturity Date	[7]		Various
Unamortized Deferred Financing Costs (g)	[1],[7]		$ 0
Fair Value of Debt	[2],[7]		11,114,000
Long term debt	[7]		$ 11,114,000			$ 12,303,000
Notes Payable, Other Payables
Debt Instrument [Line Items]
Interest Rate	[8]		4.25%			4.25%
Maturity Date	[8]		2019-04
Maturity Date	[8]		Apr. 2019
Unamortized Deferred Financing Costs (g)	[1],[8]		$ 0
Fair Value of Debt	[2],[8]		6,063,000
Long term debt	[8]		$ 6,063,000			$ 6,492,000

[1] As discussed previously in Note 1, upon retrospective adoption of ASU 2015-03, we have reclassified the deferred financing costs associated with the 2018 Notes to be presented in the balance sheet as a direct deduction from the carrying amount of the debt liability as of March 31, 2016 and December 31, 2015. In accordance with ASU 2015-15, the deferred financing costs related to the ABL Facility continue to be presented as an asset, and are included in "Other current assets" on the condensed consolidated balance sheets as of March 31, 2016 and December 31, 2015.

[2] The estimated fair value of our 2018 Notes is based on quoted market prices as of March 31, 2016. Our ABL Facility and vehicle financings bear interest at rates commensurate with market rates and therefore their respective carrying values approximate fair value.

[3] The issuance discount represents the unamortized difference between the $250.0 million aggregate principal amount of the 2018 Notes issued in April 2012 and the proceeds received upon issuance (excluding interest and fees). The issuance premium represents the unamortized difference between the proceeds received in connection with the November 2012 issuance of the 2018 Notes (excluding interest and fees) and the $150.0 million aggregate principal amount thereunder.

[4] As a result of the probability of breaching one of the financial covenants if we are not successful at restructuring our debt (see "Restructuring Support Agreement" later in this section), the carrying value of the ABL Facility and the 2018 Notes was reclassified to current liabilities in the consolidated balance sheet as of March 31, 2016 and December 31, 2015.

[5] The interest rate presented represents the interest rate on the $100.0 million ABL Facility at March 31, 2016.

[6] The interest rate presented represents the coupon rate on our outstanding $400.0 million aggregate principal amounts of 9.875% Senior Notes due 2018 (the “2018 Notes”), excluding the effects of deferred financing costs, original issue discounts and original issue premiums. Including the impact of these items, the effective interest rate on the 2018 Notes is approximately 11.0%. Interest payments are due semi-annually on April 15 and October 15 of each year.

[7] Vehicle financings consist of capital lease arrangements related to fleet purchases with a weighted-average annual interest rate of approximately 1.52% and which mature in varying installments between 2016 and 2020. Capital lease obligations were $11.1 million and $12.3 million, respectively, at March 31, 2016 and December 31, 2015, respectively.

[8] During the three months ended June 30, 2015, we settled our $11.0 million financing obligation to acquire the remaining 49% interest in AWS from the non-controlling interest holder with a $4.0 million cash payment and a $7.4 million note payable with principal and interest due in equal quarterly installments through April 2019.

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Debt - Additional Information (Detail)		3 Months Ended
		Mar. 31, 2016 USD ($)	Apr. 30, 2016 USD ($)	Apr. 15, 2016 USD ($)	Feb. 01, 2016 USD ($)	Dec. 31, 2015 USD ($)	Nov. 30, 2012 USD ($)	Apr. 30, 2012 USD ($)
Debt Instrument [Line Items]
Long term debt		$ 479,450,000				$ 520,627,000
Debt instrument fixed charge coverage ratio minimum		1.1
Senior Loans
Debt Instrument [Line Items]
Line of credit facility, maximum borrowing capacity		$ 150,000,000.0
Credit Agreement | Asset Based Loan Facility
Debt Instrument [Line Items]
Line of credit facility, excess availability threshold for fixed charge coverage ratio to take effect, percent		12.50%
Line of credit facility, maximum borrowing capacity		$ 26,300,000
Line of credit facility, remaining borrowing capacity		12,500,000
Line of credit borrowing (less than $5 million)		13,760,000.00
Asset Based Revolving Credit Facility Amendment Four
Debt Instrument [Line Items]
Line of credit facility, maximum borrowing capacity		100,000,000.0
2018 Notes
Debt Instrument [Line Items]
Long term debt	[1]	$ 400,000,000				$ 400,000,000
Debt instrument fixed charge coverage ratio minimum		2.0
Face amount		$ 400,000,000					$ 150,000,000.0	$ 250,000,000.0
2018 Notes | Maximum
Debt Instrument [Line Items]
Face amount					$ 24,000,000.0
Subsequent Event | Credit Agreement | Asset Based Loan Facility
Debt Instrument [Line Items]
Minimum EBITDA requirement			$ 2,100,000
Subsequent Event | 2018 Notes
Debt Instrument [Line Items]
Face amount				$ 40,400,000

[1] The interest rate presented represents the coupon rate on our outstanding $400.0 million aggregate principal amounts of 9.875% Senior Notes due 2018 (the “2018 Notes”), excluding the effects of deferred financing costs, original issue discounts and original issue premiums. Including the impact of these items, the effective interest rate on the 2018 Notes is approximately 11.0%. Interest payments are due semi-annually on April 15 and October 15 of each year.

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Debt - Events Related to Restructuring (Details) - USD ($)		3 Months Ended	12 Months Ended
		Mar. 31, 2016	Dec. 31, 2015	Apr. 15, 2018	Dec. 31, 2017	Oct. 15, 2016	Apr. 15, 2016	Mar. 10, 2016	Feb. 01, 2016	Nov. 30, 2012	Apr. 30, 2012
Debt Instrument [Line Items]
Interest Rate		1.52%
Exercise price of warrants or rights									$ 0.01
Back stop amount									$ 5,000,000
2018 Notes
Debt Instrument [Line Items]
Troubled debt restructuring, debtor, percent of debt subject to restructuring (more than)									80.00%
Face amount		$ 400,000,000								$ 150,000,000.0	$ 250,000,000.0
Interest Rate	[1]	9.875%	9.875%
Notes 2021
Debt Instrument [Line Items]
Interest Rate		13.00%	13.00%					17.00%
Interest paid in-kind, paid in year two		50.00%	50.00%
Interest paid in cash, paid in year two		50.00%	50.00%
Subsequent Event
Debt Instrument [Line Items]
Back stop amount							$ 5,000,000
Subsequent Event | 2018 Notes
Debt Instrument [Line Items]
Troubled debt restructuring, debtor, current period, aggregate principal amount							327,200,000
Face amount							40,400,000
Subsequent Event | Notes 2021
Debt Instrument [Line Items]
Face amount							$ 24,000,000.0
Maximum | 2018 Notes
Debt Instrument [Line Items]
Troubled debt restructuring, debtor, current period, aggregate principal amount									$ 368,600,000.0
Face amount									$ 24,000,000.0
Chief Executive Officer | 2018 Notes
Debt Instrument [Line Items]
Notes payable, related parties, noncurrent		$ 31,400,000	$ 31,400,000
Common Class A
Debt Instrument [Line Items]
Percent of securities called by warrants or rights, percent									15.00%
Common Class A | Subsequent Event
Debt Instrument [Line Items]
Percent of securities called by warrants or rights, percent							10.00%
Common Class A | Subsequent Event | 2018 Notes
Debt Instrument [Line Items]
Troubled debt restructuring, debtor, current period, aggregate principal amount							$ 900,000
Common Class A | Subsequent Event | Notes 2021
Debt Instrument [Line Items]
Percent of securities called by warrants or rights, percent							5.00%
Scenario, Forecast | Notes 2021
Debt Instrument [Line Items]
Interest Rate				10.00%	10.00%	12.50%

[1] The interest rate presented represents the coupon rate on our outstanding $400.0 million aggregate principal amounts of 9.875% Senior Notes due 2018 (the “2018 Notes”), excluding the effects of deferred financing costs, original issue discounts and original issue premiums. Including the impact of these items, the effective interest rate on the 2018 Notes is approximately 11.0%. Interest payments are due semi-annually on April 15 and October 15 of each year.

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Debt - ABL Facility Amendments (Details) - USD ($)	1 Months Ended	2 Months Ended	3 Months Ended
	Nov. 30, 2015	Mar. 10, 2016	Mar. 31, 2016	Dec. 31, 2015	Mar. 24, 2016
Wells Fargo Bank | Asset Based Loan Facility
Line of Credit Facility [Line Items]
Permitted disposition	$ 5,000,000
Third GSA Amendment [Member] | Wells Fargo Bank
Line of Credit Facility [Line Items]
Line of Credit Facility, Maximum Daily Bank Cash Balance		$ 1,000,000.0
Credit Agreement | Asset Based Loan Facility
Line of Credit Facility [Line Items]
Line of credit facility, maximum borrowing capacity			$ 26,300,000
Increase (decrease) in borrowing capacity			18,000,000
Credit Agreement | Wells Fargo Bank | Asset Based Loan Facility
Line of Credit Facility [Line Items]
Proceeds from lines of credit			12,400,000
Repayments of lines of credit		$ 52,000,000	52,000,000
Asset Based Revolving Credit Facility
Line of Credit Facility [Line Items]
Line of credit facility, maximum borrowing capacity			$ 100,000,000
Fourth ABL Facility Amendment | Wells Fargo Bank | Asset Based Loan Facility
Line of Credit Facility [Line Items]
Line of credit facility, maximum borrowing capacity	$ 125,000,000
Debt Instrument, default fee, percent	2.00%
Sixth ABL Facility Amendment
Line of Credit Facility [Line Items]
Ultimate orderly liquidation value advance rate					60.00%
Eligible equipment NOVL advance rate					80.00%
Borrowing based availability attributable to eligible equipment					75.00%
Debt instrument, fee amount	$ 600,000.0
Write off of deferred debt issuance cost				$ 400,000
Sixth ABL Facility Amendment | Wells Fargo Bank | Asset Based Loan Facility
Line of Credit Facility [Line Items]
Line of credit facility, maximum borrowing capacity					$ 100,000,000
Debt Instrument, default fee, percent					4.00%
Permitted disposition	$ 7,500,000
Permitted disposition reserve			50.00%

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Restructuring and Exit Costs - Additional Information (Details) - USD ($)	3 Months Ended
	Mar. 31, 2016	Mar. 31, 2015	Dec. 31, 2015
Restructuring Cost and Reserve [Line Items]
Restructuring, expected cost	$ 7,100,000
Other, net	0	$ 683,000
Restructuring reserve			$ 180,000
Accrued Liabilities
Restructuring Cost and Reserve [Line Items]
Restructuring reserve	$ 168,000
Southern
Restructuring Cost and Reserve [Line Items]
Other, net		600,000
Northeast
Restructuring Cost and Reserve [Line Items]
Other, net		$ 100,000

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Restructuring and Exit Costs - Schedule of Restructuring and Exit Costs (Details) - USD ($)	3 Months Ended
	Mar. 31, 2016	Mar. 31, 2015
Restructuring and Related Activities [Abstract]
Severance and termination benefits	$ 0	$ 240,000
Contract termination costs and exit costs	0	443,000
Asset impairment charge	0	0
Total restructuring and exit costs	$ 0	$ 683,000

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Restructuring and Exit Costs - Restructuring Reserve (Details) - USD ($)		3 Months Ended
		Mar. 31, 2016	Mar. 31, 2015
Restructuring Reserve [Roll Forward]
Restructuring and exit costs accrued at December 31, 2015		$ 180,000
Restructuring and exit-related costs		0	$ 683,000
Cash payments		(12,000)
Employee Severance
Restructuring Reserve [Roll Forward]
Restructuring and exit costs accrued at December 31, 2015	[1]	0
Restructuring and exit-related costs	[1]	0
Cash payments	[1]	0
Restructuring and exit costs accrued at March 31, 2016	[1]	0
Facility Closing
Restructuring Reserve [Roll Forward]
Restructuring and exit costs accrued at December 31, 2015	[2]	180,000
Restructuring and exit-related costs	[2]	0
Cash payments	[2]	(12,000)
Restructuring and exit costs accrued at March 31, 2016	[2]	168,000
Other Restructuring
Restructuring Reserve [Roll Forward]
Restructuring and exit costs accrued at December 31, 2015	[3]	0
Restructuring and exit-related costs	[3]	0
Cash payments	[3]	0
Restructuring and exit costs accrued at March 31, 2016	[3]	$ 0

[1] Employee termination costs consist primarily of severance and related costs.

[2] Lease exit costs consist primarily of costs that will continue to be incurred under non-cancellable operating leases for their remaining term without benefit to us.

[3] Other exit costs include costs related to the movement of vehicles and rental fleet in connection with the exit from certain shale areas.

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Income Taxes - Components of (Expense) Benefit for Income Taxes (Detail) - USD ($) $ in Thousands	3 Months Ended
	Mar. 31, 2016	Mar. 31, 2015
Current Income Tax Expense (Benefit), Continuing Operations [Abstract]
Current income tax (expense) benefit	$ (30)	$ 25
Deferred income tax expense	(25)	(1)
Total income tax (expense) benefit	$ (55)	$ 24

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Income Taxes - Additional Information (Detail)	3 Months Ended
	Mar. 31, 2016	Mar. 31, 2015
Income Tax Disclosure [Abstract]
Effective income tax benefit rate (near zero for 2015)	0.20%	0.20%
Federal statutory rate	35.00%	35.00%

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Share-based Compensation (Detail) - USD ($) shares in Thousands, $ in Thousands	3 Months Ended
	Mar. 31, 2016	Mar. 31, 2015
Share-based Compensation Arrangement by Share-based Payment Award [Line Items]
Stock option grants (in shares)	0	703
Total grants under the 2009 Plan (in shares)	1	854
Stock-based compensation	$ 368	$ 789
Stock options
Share-based Compensation Arrangement by Share-based Payment Award [Line Items]
Stock-based compensation	$ 84	$ 148
Restricted stock
Share-based Compensation Arrangement by Share-based Payment Award [Line Items]
Grants in period (in shares)	0	0
Stock-based compensation	$ 85	$ 101
Restricted stock units
Share-based Compensation Arrangement by Share-based Payment Award [Line Items]
Grants in period (in shares)	1	151
Restricted stock units	$ 199	$ 540

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Legal Matters (Detail) shares in Thousands, $ in Millions			1 Months Ended			2 Months Ended	3 Months Ended
	Mar. 04, 2014 shares	Mar. 04, 2013 USD ($)	Jun. 30, 2015 USD ($)	Oct. 31, 2013 lawsuit	Sep. 30, 2013 lawsuit	Oct. 31, 2013 lawsuit	Mar. 31, 2015 plaintiff	Mar. 31, 2016 USD ($)	Dec. 31, 2015 USD ($)
Loss Contingencies [Line Items]
Environmental accrual								$ 0.5	$ 0.3
Legal settlement, attorney fees, shares | shares	267
Payments for legal settlements, attorney fees		$ 4.5
Legal settlement, escrow | shares	533
Appalachian Water Services
Loss Contingencies [Line Items]
Payments to acquire businesses, gross			$ 4.0
Notes payable, fair value disclosure			$ 7.4
Twenty Thirteen Shareholder Derivative Actions
Loss Contingencies [Line Items]
Number of lawsuits | lawsuit				2	2	3
Number of plaintiffs | plaintiff							1

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Related Party and Affiliated Company Transactions (Details) - USD ($)		1 Months Ended	3 Months Ended
	Feb. 18, 2016	Apr. 30, 2016	Jun. 30, 2016	Mar. 31, 2016	Dec. 31, 2009
Underground Solutions Inc
Business Acquisition [Line Items]
Business acquisition, percentage of voting interests acquired					7.00%
Subsequent Event | Underground Solutions Inc
Business Acquisition [Line Items]
Proceeds from sale of business		$ 5,000,000
Escrow Deposits Related to Property Sales		200,000
Expected Noncash Proceeds from Divestiture of Interest in Consolidated Subsidiaries		5,200,000
Cost method investment cost basis		$ 3,200,000
Aegion Corporation | Underground Solutions Inc
Business Acquisition [Line Items]
Proceeds from sale of business	$ 85,000,000
Scenario, Forecast | Underground Solutions Inc
Business Acquisition [Line Items]
Gain (Loss) on disposition of business			$ 1,900,000
Cost-method Investments, Closing Costs Incurred			$ 100,000
3721 Aircraft | Chief Executive Officer
Business Acquisition [Line Items]
Related Party Costs				$ 45,000
Related Party Transaction, Purchases from Related Party				$ 0

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Segments - Additional Information (Detail)	Mar. 31, 2016 operating_division
Segment Reporting [Abstract]
Number of operating divisions	3

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Segments - Financial Information for Reportable Segments (Detail) - USD ($) $ in Thousands		3 Months Ended
		Mar. 31, 2016	Mar. 31, 2015	Dec. 31, 2015
Segment Reporting Information [Line Items]
Revenue		$ 46,975	$ 119,112
Direct operating expenses		38,617	87,999
General and administrative expenses		7,452	12,700
Depreciation and amortization		15,845	17,482
Operating loss		(14,939)	248
Loss from continuing operations before income taxes		(27,216)	(12,019)
Total assets (a)	[1]	460,113		$ 522,619
Operating Segments | Rocky Mountain
Segment Reporting Information [Line Items]
Revenue		24,905	69,410
Direct operating expenses		19,558	48,425
General and administrative expenses		1,852	2,056
Depreciation and amortization		8,079	8,737
Operating loss		(4,584)	10,192
Loss from continuing operations before income taxes		(4,652)	10,097
Total assets (a)	[1]	246,530		263,871
Operating Segments | Northeast
Segment Reporting Information [Line Items]
Revenue		12,777	27,313
Direct operating expenses		11,568	21,496
General and administrative expenses		1,190	1,904
Depreciation and amortization		3,883	3,927
Operating loss		(3,864)	(98)
Loss from continuing operations before income taxes		(3,931)	13
Total assets (a)	[1]	72,916		76,472
Operating Segments | Southern
Segment Reporting Information [Line Items]
Revenue		9,293	22,389
Direct operating expenses		7,491	18,078
General and administrative expenses		920	2,078
Depreciation and amortization		3,814	4,648
Operating loss		(2,932)	(3,014)
Loss from continuing operations before income taxes		(2,926)	(2,935)
Total assets (a)	[1]	123,028		128,482
Corporate, Non-Segment
Segment Reporting Information [Line Items]
Revenue		0	0
Direct operating expenses		0	0
General and administrative expenses		3,490	6,662
Depreciation and amortization		69	170
Operating loss		(3,559)	(6,832)
Loss from continuing operations before income taxes		(15,707)	$ (19,194)
Total assets (a)	[1]	$ 17,639		$ 53,794

[1] Total assets exclude intercompany receivables eliminated in consolidation.

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Discontinued Operations - Additional Information (Detail) - USD ($) $ in Thousands		3 Months Ended
	Apr. 11, 2015	Mar. 31, 2016	Mar. 31, 2015	Feb. 28, 2015
Income Statement, Balance Sheet and Additional Disclosures by Disposal Groups, Including Discontinued Operations [Line Items]
Cash and cash equivalents		$ 0	$ 2,793
Disposal Group, Not Discontinued Operation, Gain (Loss) on Disposal		55	0
Income (loss) from discontinued operations		$ 55	$ 921
TFI
Income Statement, Balance Sheet and Additional Disclosures by Disposal Groups, Including Discontinued Operations [Line Items]
Consideration				$ 85,000
Escrow deposit	$ 4,300
Period after closing date escrow will be released	18 months
Cash and cash equivalents	$ 74,600

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Discontinued Operations - Financial Information of Discontinued Operations (Detail) - USD ($) $ in Thousands	3 Months Ended
	Mar. 31, 2016	Mar. 31, 2015
Income Statement, Balance Sheet and Additional Disclosures by Disposal Groups, Including Discontinued Operations [Line Items]
Income from discontinued operations - before sale	$ 0	$ 921
Income from discontinued operations	55	921
TFI
Income Statement, Balance Sheet and Additional Disclosures by Disposal Groups, Including Discontinued Operations [Line Items]
Revenue	0	17,497
Income from discontinued operations before income taxes	0	1,186
Income tax expense	0	(265)
Income from discontinued operations - before sale	0	921
Income on sale of TFI	55	0
Income from discontinued operations	$ 55	$ 921

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Subsidiary Guarantors - Additional Information (Detail)	3 Months Ended		5 Months Ended	12 Months Ended
	Mar. 31, 2016	Mar. 31, 2015	May. 31, 2015	Dec. 31, 2015
Guarantor Subsidiaries
Condensed Financial Statements, Captions [Line Items]
Subsidiary ownership percentage	100.00%	100.00%		100.00%
Non-Guarantor Subsidiaries
Condensed Financial Statements, Captions [Line Items]
Subsidiary ownership percentage			51.00%

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Subsidiary Guarantors - Condensed Consolidating Balance Sheet (Detail) - USD ($) $ in Thousands		Mar. 31, 2016	Dec. 31, 2015	Mar. 31, 2015
Assets
Cash and cash equivalents		$ 30	$ 39,309	$ 35,486
Restricted cash		4,450	4,250
Accounts receivable, net		30,857	42,188
Deferred income taxes		0
Other current assets		12,470	8,734
Total current assets		47,807	94,481
Property, plant and equipment, net		391,775	406,188
Equity investments		3,745	3,750
Intangibles, net		16,214	16,867
Other assets		572	1,333
Total assets	[1]	460,113	522,619
Liabilities and Shareholders' Deficit
Accounts payable		7,269	6,907
Accrued liabilities		34,252	29,843
Current portion of contingent consideration		8,500	8,628
Current portion of long-term debt	[2]	463,164	499,709
Total current liabilities		513,185	545,087
Deferred income taxes		295	270
Long-term portion of debt		8,015	11,758
Other long-term liabilities		3,735	3,775
Total shareholders' deficit		(65,117)	(38,271)
Total liabilities and shareholders' deficit		460,113	522,619
Reportable Legal Entities | Nuverra Environmental Solutions Inc. (Parent)
Assets
Cash and cash equivalents		808	40,660	34,639
Restricted cash		4,250	4,250
Accounts receivable, net		0	0
Deferred income taxes		0
Other current assets		7,275	2,654
Total current assets		12,333	47,564
Property, plant and equipment, net		2,546	2,609
Equity investments		32,033	43,542
Intangibles, net		0	0
Other assets		405,619	404,620
Total assets		452,531	498,335
Liabilities and Shareholders' Deficit
Accounts payable		1,610	172
Accrued liabilities		23,048	13,824
Current portion of contingent consideration		0	0
Current portion of long-term debt		454,003	492,671
Total current liabilities		478,661	506,667
Deferred income taxes		(32,473)	(32,488)
Long-term portion of debt		0	0
Other long-term liabilities		71,460	62,427
Total shareholders' deficit		(65,117)	(38,271)
Total liabilities and shareholders' deficit		452,531	498,335
Reportable Legal Entities | Guarantor Subsidiaries
Assets
Cash and cash equivalents		(778)	(1,351)	$ 847
Restricted cash		200	0
Accounts receivable, net		30,857	42,188
Deferred income taxes		0
Other current assets		5,195	6,080
Total current assets		35,474	46,917
Property, plant and equipment, net		389,229	403,579
Equity investments		576	581
Intangibles, net		16,214	16,867
Other assets		80,677	72,137
Total assets		522,170	540,081
Liabilities and Shareholders' Deficit
Accounts payable		5,659	6,735
Accrued liabilities		11,204	16,019
Current portion of contingent consideration		8,500	8,628
Current portion of long-term debt		9,161	7,038
Total current liabilities		34,524	38,420
Deferred income taxes		32,768	32,758
Long-term portion of debt		8,015	11,758
Other long-term liabilities		417,999	416,772
Total shareholders' deficit		28,864	40,373
Total liabilities and shareholders' deficit		522,170	540,081
Consolidation, Eliminations
Assets
Cash and cash equivalents		0	0
Restricted cash		0	0
Accounts receivable, net		0	0
Deferred income taxes		0
Other current assets		0	0
Total current assets		$ 0	0
Property, plant and equipment, net			0
Equity investments		$ (28,864)	(40,373)
Intangibles, net		0	0
Other assets		(485,724)	(475,424)
Total assets		(514,588)	(515,797)
Liabilities and Shareholders' Deficit
Accounts payable		0	0
Accrued liabilities		0	0
Current portion of contingent consideration		0	0
Current portion of long-term debt		0	0
Total current liabilities		0	0
Deferred income taxes		0	0
Long-term portion of debt		0	0
Other long-term liabilities		(485,724)	(475,424)
Total shareholders' deficit		(28,864)	(40,373)
Total liabilities and shareholders' deficit		$ (514,588)	$ (515,797)

[1] Total assets exclude intercompany receivables eliminated in consolidation.

[2] As a result of the probability of breaching one of the financial covenants if we are not successful at restructuring our debt (see "Restructuring Support Agreement" later in this section), the carrying value of the ABL Facility and the 2018 Notes was reclassified to current liabilities in the consolidated balance sheet as of March 31, 2016 and December 31, 2015.

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Subsidiary Guarantors - Condensed Consolidating Statement of Operations (Detail) - USD ($) $ in Thousands	3 Months Ended
	Mar. 31, 2016	Mar. 31, 2015
Condensed Income Statements, Captions [Line Items]
Revenue	$ 46,975	$ 119,112
Costs and expenses:
Direct operating expenses	38,617	87,999
General and administrative expenses	7,452	12,700
Depreciation and amortization	15,845	17,482
Other, net	0	683
Total costs and expenses	61,914	118,864
Operating (loss) income	(14,939)	248
Interest expense, net	(12,045)	(12,588)
Other income, net	163	342
Loss from equity investments	(5)	(21)
Loss on extinguishment of debt	(390)	0
Loss from continuing operations before income taxes	(27,216)	(12,019)
Income tax (expense) benefit	(55)	24
Loss from continuing operations	(27,271)	(11,995)
Income from discontinued operations, net of income taxes	55	921
Net loss attributable to common shareholders	(27,216)	(11,074)
Reportable Legal Entities | Nuverra Environmental Solutions Inc. (Parent)
Condensed Income Statements, Captions [Line Items]
Revenue	0	0
Costs and expenses:
Direct operating expenses	0	0
General and administrative expenses	3,490	6,662
Depreciation and amortization	69	170
Other, net		0
Total costs and expenses	3,559	6,832
Operating (loss) income	(3,559)	(6,832)
Interest expense, net	(11,758)	(12,362)
Other income, net	0	0
Loss from equity investments	(11,532)	8,083
Loss on extinguishment of debt	(390)
Loss from continuing operations before income taxes	(27,239)	(11,111)
Income tax (expense) benefit	(32)	37
Loss from continuing operations	(27,271)	(11,074)
Income from discontinued operations, net of income taxes	55	0
Net loss attributable to common shareholders	(27,216)	(11,074)
Reportable Legal Entities | Guarantor Subsidiaries
Condensed Income Statements, Captions [Line Items]
Revenue	46,975	119,112
Costs and expenses:
Direct operating expenses	38,617	87,999
General and administrative expenses	3,962	6,038
Depreciation and amortization	15,776	17,312
Other, net		683
Total costs and expenses	58,355	112,032
Operating (loss) income	(11,380)	7,080
Interest expense, net	(287)	(226)
Other income, net	163	342
Loss from equity investments	(5)	(21)
Loss on extinguishment of debt	0
Loss from continuing operations before income taxes	(11,509)	7,175
Income tax (expense) benefit	(23)	(13)
Loss from continuing operations	(11,532)	7,162
Income from discontinued operations, net of income taxes	0	921
Net loss attributable to common shareholders	(11,532)	8,083
Consolidation, Eliminations
Condensed Income Statements, Captions [Line Items]
Revenue	0	0
Costs and expenses:
Direct operating expenses	0	0
General and administrative expenses	0	0
Depreciation and amortization	0	0
Other, net		0
Total costs and expenses	0	0
Operating (loss) income	0	0
Interest expense, net	0	0
Other income, net	0	0
Loss from equity investments	11,532	(8,083)
Loss on extinguishment of debt	0
Loss from continuing operations before income taxes	11,532	(8,083)
Income tax (expense) benefit	0	0
Loss from continuing operations	11,532	(8,083)
Income from discontinued operations, net of income taxes	0	0
Net loss attributable to common shareholders	$ 11,532	$ (8,083)

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Subsidiary Guarantors - Condensed Consolidating Statement of Cash Flows (Detail) - USD ($) $ in Thousands	3 Months Ended
	Mar. 31, 2016	Mar. 31, 2015	Dec. 31, 2015
Cash flows from operating activities:
Net cash provided by operating activities from continuing operations	$ 2,565	$ 34,750
Net cash provided by operating activities from discontinued operations	0	867
Net cash provided by operating activities	2,565	35,617
Cash flows from investing activities:
Proceeds from the sale of property and equipment	1,449	1,968
Purchase of property, plant and equipment	(1,421)	(6,163)
Increase in restricted cash	(200)	0
Net cash used in investing activities from continuing operations	(172)	(4,195)
Net cash used in investing activities from discontinued operations	0	(161)
Net cash used in investing activities	(172)	(4,356)
Cash flows from financing activities:
Proceeds from revolving credit facility	12,409	0
Payments on revolving credit facility	(51,968)	(7,000)
Payments for deferred financing costs	(426)	0
Payments on vehicle financing and other financing activities	(1,687)	(1,436)
Net cash used in financing activities from continuing operations	(41,672)	(8,436)
Net cash provided by financing activities from discontinued operations	0	38
Net cash used in financing activities	(41,672)	(8,398)
Net (decrease) increase in cash and cash equivalents	(39,279)	22,863
Cash and cash equivalents - beginning of period	39,309	15,416
Cash and cash equivalents - end of period	30	38,279
Less: cash and cash equivalents of discontinued operations - end of period	0	(2,793)
Cash and cash equivalents of continuing operations - end of period	30	35,486	$ 39,309
Reportable Legal Entities | Nuverra Environmental Solutions Inc. (Parent)
Cash flows from operating activities:
Net cash provided by operating activities from continuing operations	115	27,658
Net cash provided by operating activities from discontinued operations	0	0
Net cash provided by operating activities	115	27,658
Cash flows from investing activities:
Proceeds from the sale of property and equipment	25	255
Purchase of property, plant and equipment	0	0
Increase in restricted cash	0
Net cash used in investing activities from continuing operations	25	255
Net cash used in investing activities from discontinued operations	0	0
Net cash used in investing activities	25	255
Cash flows from financing activities:
Proceeds from revolving credit facility	12,409
Payments on revolving credit facility	(51,968)	(7,000)
Payments for deferred financing costs	(426)
Payments on vehicle financing and other financing activities	(7)	(75)
Net cash used in financing activities from continuing operations	(39,992)	(7,075)
Net cash provided by financing activities from discontinued operations	0	0
Net cash used in financing activities	(39,992)	(7,075)
Net (decrease) increase in cash and cash equivalents	(39,852)	20,838
Cash and cash equivalents - beginning of period	40,660	13,801
Cash and cash equivalents - end of period	808	$ 34,639
Less: cash and cash equivalents of discontinued operations - end of period	0
Cash and cash equivalents of continuing operations - end of period	808	$ 34,639	40,660
Reportable Legal Entities | Guarantor Subsidiaries
Cash flows from operating activities:
Net cash provided by operating activities from continuing operations	2,450	7,092
Net cash provided by operating activities from discontinued operations	0	867
Net cash provided by operating activities	2,450	7,959
Cash flows from investing activities:
Proceeds from the sale of property and equipment	1,424	1,713
Purchase of property, plant and equipment	(1,421)	(6,163)
Increase in restricted cash	(200)
Net cash used in investing activities from continuing operations	(197)	(4,450)
Net cash used in investing activities from discontinued operations	0	(161)
Net cash used in investing activities	(197)	(4,611)
Cash flows from financing activities:
Proceeds from revolving credit facility	0
Payments on revolving credit facility	0	0
Payments for deferred financing costs	0
Payments on vehicle financing and other financing activities	(1,680)	(1,361)
Net cash used in financing activities from continuing operations	(1,680)	(1,361)
Net cash provided by financing activities from discontinued operations	0	38
Net cash used in financing activities	(1,680)	(1,323)
Net (decrease) increase in cash and cash equivalents	573	2,025
Cash and cash equivalents - beginning of period	(1,351)	1,615
Cash and cash equivalents - end of period	(778)	3,640
Less: cash and cash equivalents of discontinued operations - end of period	0	(2,793)
Cash and cash equivalents of continuing operations - end of period	$ (778)	$ 847	$ (1,351)

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Subsequent Events Related to Restructuring (Details) - USD ($)			3 Months Ended		6 Months Ended	12 Months Ended
		Apr. 15, 2016	Jun. 30, 2016	Mar. 31, 2016	Jun. 30, 2016	Dec. 31, 2015	Apr. 15, 2018	Dec. 31, 2017	Oct. 15, 2016	Mar. 10, 2016	Feb. 01, 2016	Nov. 30, 2012	Apr. 30, 2012
Restructuring Cost and Reserve [Line Items]
Interest Rate				1.52%
Back stop amount											$ 5,000,000
Scenario, Forecast
Restructuring Cost and Reserve [Line Items]
Common stock potentially issuable, aggregate amount					$ 5,000,000.0
Discount to the conversion price, percent			20.00%
Common stock, value, outstanding, fully diluted basis, excluding shares issuable in connection with management incentive plan			$ 176,000,000		$ 176,000,000
Notes 2021
Restructuring Cost and Reserve [Line Items]
Interest Rate				13.00%		13.00%				17.00%
Interest paid in-kind, paid in year two				50.00%		50.00%
Interest paid in cash, paid in year two				50.00%		50.00%
Notes 2021 | Scenario, Forecast
Restructuring Cost and Reserve [Line Items]
Interest Rate							10.00%	10.00%	12.50%
2018 Notes
Restructuring Cost and Reserve [Line Items]
Interest Rate	[1]			9.875%		9.875%
Face amount				$ 400,000,000								$ 150,000,000.0	$ 250,000,000.0
Chief Executive Officer | 2018 Notes
Restructuring Cost and Reserve [Line Items]
Notes payable, related parties, noncurrent				$ 31,400,000		$ 31,400,000
Subsequent Event
Restructuring Cost and Reserve [Line Items]
Back stop amount		$ 5,000,000
Subsequent Event | Notes 2021
Restructuring Cost and Reserve [Line Items]
Debt instrument, convertible, conversion price		$ 0.32
Increase (decrease) in interest payment obligation, remainder of the year		$ 17,800,000
Increase (decrease) in interest payment obligation, payable in year two		17,900,000
Increase (decrease) in interest payment obligation, payable in year three		8,600,000
Face amount		24,000,000.0
Subsequent Event | 2018 Notes
Restructuring Cost and Reserve [Line Items]
Troubled debt restructuring, debtor, current period, aggregate principal amount		327,200,000
Face amount		40,400,000
Interest expense		$ 2,000,000
Common Class A
Restructuring Cost and Reserve [Line Items]
Percent of securities called by warrants or rights, percent											15.00%
Common Class A | Subsequent Event
Restructuring Cost and Reserve [Line Items]
Percent of securities called by warrants or rights, percent		10.00%
Common Class A | Subsequent Event | Notes 2021
Restructuring Cost and Reserve [Line Items]
Debt instrument, convertible, conversion price		$ 0.01
Percent of securities called by warrants or rights, percent		5.00%
Common Class A | Subsequent Event | 2018 Notes
Restructuring Cost and Reserve [Line Items]
Troubled debt restructuring, debtor, current period, aggregate principal amount		$ 900,000

[1] The interest rate presented represents the coupon rate on our outstanding $400.0 million aggregate principal amounts of 9.875% Senior Notes due 2018 (the “2018 Notes”), excluding the effects of deferred financing costs, original issue discounts and original issue premiums. Including the impact of these items, the effective interest rate on the 2018 Notes is approximately 11.0%. Interest payments are due semi-annually on April 15 and October 15 of each year.