Discontinued Operations

6 Months Ended

Jun. 30, 2021

Discontinued Operations and Disposal Groups [Abstract]

DISCONTINUED OPERATIONS

On January 29, 2021, we entered into the Purchase and Sale Agreement with Spartan Energy Partners, LP (“Spartan”) pursuant to which we sold the general partner of CSI Compressco, including the IDRs in CSI Compressco and approximately 23.1% of the outstanding limited partner interests in CSI Compressco, in exchange for the combination of $13.4 million in cash paid at closing, $0.5 million in cash payable on the six-month anniversary of the closing and $3.1 million in contingent consideration in the form of cash and/or CSI Compressco common units if CSI Compressco achieves certain financial targets on or before December 31, 2022. Throughout this Quarterly Report, we refer to the transaction with Spartan as the “GP Sale.” As a result of these transactions, we no longer consolidate CSI Compressco as of January 29, 2021. We recognized a primarily non-cash accounting gain of $120.6 million during the six-month period ended June 30, 2021 related to the GP Sale. The gain is included in income (loss) from discontinued operations, net of taxes in our consolidated statement of operations. We will also continue to provide back-office support to CSI Compressco under a Transition Services Agreement for up to one year until CSI Compressco has completed a full separation from our back-office support functions. Our interest in CSI Compressco and the general partner represented substantially all of our Compression Division.

In addition, on March 1, 2018, we closed a series of related transactions that resulted in the disposition of our Offshore Division, consisting of our Offshore Services and Maritech segments. Our former Compression and Offshore Divisions are reported as discontinued operations for all periods presented. Our consolidated balance sheets and consolidated statements of operations report discontinued operations separate from continuing operations. Our consolidated statements of comprehensive income, statements of equity and statements of cash flows combine continuing and discontinued operations. Our current-year consolidated statement of operations, statement of comprehensive income, statement of equity and statement of cash flows include CSI Compressco activity for January 1 through January 29. Our consolidated statements of cash flows for the six-month periods ended June 30, 2021 and June 30, 2020 included $3.0 million and $11.2 million, respectively, of capital expenditures related to our former Compression division, as well as $271.8 million of proceeds from long-term debt, $273.9 million of payments of long-term debt, $3.6 million from proceeds from sale of property, plant and equipment, and $1.4 million from amortization of deferred financing discounts, costs and gains for the six-month period ended June 30, 2020. Our current-year results do not include CSI Compressco depreciation or amortization as the assets were considered held for sale. A summary of financial information related to our discontinued operations is as follows:

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

(in thousands)


	Three Months Ended June 30, 2021
	Compression		Offshore Services		Total
Major classes of line items constituting loss from discontinued operations



General and administrative expense	$	—	$	5	$	5

Other expense, net	121		—		121
Pretax loss from discontinued operations	(121)		(5)		(126)





Loss from discontinued operations attributable to TETRA stockholders					$	(126)


	Three Months Ended June 30, 2020
	Compression		Offshore Services		Total
Major classes of line items constituting loss from discontinued operations
Revenue	$	96,371	$	—	$	96,371
Cost of revenues	62,768		(274)		62,494
Depreciation, amortization, and accretion	20,116		—		20,116
Impairments and other charges	8,977		—		8,977
General and administrative expense	10,152		111		10,263
Interest expense, net	12,982		—		12,982
Other expense, net	4,380		—		4,380
Pretax income (loss) from discontinued operations	(23,004)		163		(22,841)


Income tax provision					947
Total loss from discontinued operations					(23,788)
Loss from discontinued operations attributable to noncontrolling interest					15,781
Loss from discontinued operations attributable to TETRA stockholders					$	(8,007)


	Six Months Ended June 30, 2021
	Compression		Offshore Services		Total
Major classes of line items constituting income from discontinued operations
Revenue	$	18,968	$	—	$	18,968
Cost of revenues	11,474		28		11,502


General and administrative expense	2,795		—		2,795
Interest expense, net	4,336		—		4,336
Other expense, net	15		—		15
Pretax income (loss) from discontinued operations	348		(28)		320
Pretax gain on disposal of discontinued operations					120,574
Total pretax income from discontinued operations					120,894
Income tax provision					30
Total income from discontinued operations					120,864
Income from discontinued operations attributable to noncontrolling interest					(333)
Income from discontinued operations attributable to TETRA stockholders					$	120,531


	Six Months Ended June 30, 2020
	Compression		Offshore Services		Total
Major classes of line items constituting loss from discontinued operations
Revenue	$	186,610	$	—	$	186,610
Cost of revenues	117,347		(334)		117,013
Depreciation, amortization, and accretion	40,025		—		40,025
Impairments and other charges	14,348		—		14,348
General and administrative expense	20,341		316		20,657
Interest expense, net	25,546		—		25,546
Other expense, net	4,798		—		4,798
Pretax (loss) income from discontinued operations	(35,795)		18		(35,777)


Income tax provision					1,379
Total income from discontinued operations					(37,156)
Loss from discontinued operations attributable to noncontrolling interest					24,615
Loss from discontinued operations attributable to TETRA stockholders					$	(12,541)

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

(in thousands)


	June 30, 2021
	Offshore Services		Maritech		Total









Carrying amounts of major classes of liabilities included as part of discontinued operations
Trade payables	$	1,223	$	—	$	1,223

Accrued liabilities and other	150		228		378


Total liabilities associated with discontinued operations	$	1,373	$	228	$	1,601


	December 31, 2020
	Compression		Offshore Services		Maritech		Total
Carrying amounts of major classes of assets included as part of discontinued operations
Cash and cash equivalents	$	16,577	$	—	$	—	$	16,577
Trade receivables	43,837		—		—		43,837
Inventories	31,220		—		—		31,220
Other current assets	5,231		—		—		5,231
Property, plant, and equipment	551,401		—		—		551,401
Other assets	61,740		—		—		61,740
Total assets associated with discontinued operations	$	710,006	$	—	$	—	$	710,006

Carrying amounts of major classes of liabilities included as part of discontinued operations
Trade payables	$	19,766	$	1,222	$	—	$	20,988
Unearned Income	269		—		—		269
Accrued liabilities and other	36,318		352		228		36,898
Long-term debt, net	638,631		—		—		638,631
Other liabilities	37,253		—		—		37,253
Total liabilities associated with discontinued operations	$	732,237	$	1,574	$	228	$	734,039