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Acquisitions and Dispositions | 9 Months Ended
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Sep. 30, 2015
Notes to Financial Statements [Abstract] |
Acquisitions and Dispositions | NOTE B – ACQUISITIONS Acquisition of Compressor Systems, Inc. On August 4, 2014, a subsidiary of CCLP acquired all of the outstanding capital stock of CSI for $825.0 million cash (the "CSI Acquisition"). Prior to the acquisition, CSI owned one of the largest fleets of natural gas compressor packages in the United States. Headquartered in Midland, Texas, CSI fabricates, sells, and maintains natural gas compressors and provides a full range of compression products and services that covers compression needs throughout the entire natural gas production and transportation cycle to natural gas and oil producing clients. CSI derives revenues through three primary business lines: compression and related services, equipment and parts sales, and aftermarket services. Strategically, the acquisition affords the Compression Division the opportunity to capture significant synergies associated with its product and service offerings and its fabrication operations, to further penetrate new and existing markets, and to achieve administrative efficiencies and other strategic benefits. Our allocation of the purchase price to the estimated fair value of CSI's net assets is as follows (in thousands):
Current assets | $ | 101,411 |
Property and equipment | 571,706 |
Intangible assets | 68,000 |
Goodwill | 161,387 |
Total assets acquired | 902,504 |
Current liabilities | 77,504 |
Total liabilities assumed | 77,504 |
Net assets acquired | $ | 825,000 |
The allocation of purchase price includes approximately $161.4 million allocated to deductible goodwill recorded, and is supported by the strategic benefits discussed above that are expected to be generated from the acquisition. Adjustments to the allocation of purchase price affecting inventory, property, plant, and equipment, intangible assets, and other current assets and liabilities have been reflected in the accompanying consolidated balance sheets as of September 30, 2015 and December 31, 2014. The adjustment to the previously presented goodwill balance as of December 31, 2014 was $0.1 million. These adjustments to the allocation of purchase price for long-lived assets did not have a material impact on the depreciation and amortization of these assets. The acquired property, plant, and equipment is stated at fair value, and depreciation of the acquired property, plant, and equipment is computed using the straight-line method over the estimated useful lives of each asset. Buildings are depreciated using useful lives of 15 to 30 years. Machinery and equipment is depreciated using useful lives of 2 to 20 years. Automobiles and trucks are depreciated using useful lives of 3 to 4 years. The acquired intangible assets represent approximately $33.7 million for the trademark/trade name, approximately $21.4 million for customer relationships, and approximately $12.9 million of other intangible assets that are stated at estimated fair value and are amortized on a straight-line basis over their estimated useful lives, ranging from 2 to 15 years. These identified intangible assets are recorded net of approximately $9.7 million of accumulated amortization as of September 30, 2015. For the three and nine month periods ended September 30, 2014, our revenues, depreciation and amortization, and pretax earnings included $61.0 million, $9.6 million, and $6.4 million, respectively, associated with the CSI Acquisition after the closing on August 4, 2014. In addition, CSI Acquisition-related costs of approximately $2.1 million and $3.0 million were incurred during the three and nine month periods ended September 30, 2014, respectively, consisting of external legal fees and due diligence costs. These costs have been recognized in general and administrative expenses in the consolidated statements of operations. Approximately $16.6 million of deferred financing costs related to the CSI Acquisition were incurred as of the acquisition date and included in Other Assets and is being amortized over the term of the related debt. An additional $9.3 million of interim financing costs related to the CSI Acquisition were incurred and reflected in other expense during the nine months ended September 30, 2014. Pro Forma Financial Information The pro forma information presented below has been prepared to give effect to the acquisition of CSI as if the transaction had occurred at the beginning of the periods presented. The pro forma information includes the impact from the allocation of the acquisition purchase price on depreciation and amortization. The pro forma information is presented for illustrative purposes only and is based on estimates and assumptions we deemed appropriate. The following pro forma information is not necessarily indicative of the historical results that would have been achieved if the acquisition transactions had occurred in the past, and our operating results may have been different from those reflected in the pro forma information below. Therefore, the pro forma information should not be relied upon as an indication of the operating results that we would have achieved if the transaction had occurred at the beginning of the period presented or the future results that we will achieve after the transaction.
| Three Months Ended September 30, |  | Nine Months Ended September 30,
| 2014 |  | 2014
| (In Thousands, Except Per Share Amounts)
Revenues | $ | 343,920 |  |  | $ | 969,615 |
Depreciation, amortization, and accretion | $ | 38,622 |  |  | $ | 113,238 |
Gross profit | $ | 41,544 |  |  | $ | 130,720 |
Net income (loss) | $ | (3,431 | ) |  | $ | (14,725 | )
Net income (loss) attributable to TETRA stockholders | $ | (5,637 | ) |  | $ | (20,180 | )
Per share information: |  |  |
Net income (loss) attributable to TETRA stockholders |  |  |
Basic | $ | (0.07 | ) |  | $ | (0.26 | )
Diluted | $ | (0.07 | ) |  | $ | (0.26 | )

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