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Long-Term Debt and Other Borrowings | 12 Months Ended
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Dec. 31, 2015
Notes to Financial Statements [Abstract] |
Long-Term Debt and Other Borrowings | NOTE G – LONG-TERM DEBT AND OTHER BORROWINGS Our consolidated capital structure changed significantly during 2014 as a result of the CSI Acquisition. Because of the increased level of consolidated debt, it is important to consider TETRA's capital structure and CCLP's capital structure separately, as we have no cross default provisions, cross collateralization provisions, or cross guarantees with CCLP's debt, nor does CCLP with our debt. CCLP is not a restricted subsidiary or guarantor under any of our debt or credit agreements. Long-term debt consists of the following:
|  |  | December 31, 2015 |  | December 31, 2014
|  |  | (In Thousands)
TETRA |  | Scheduled Maturity |  |  |
Bank revolving line of credit facility |  | September 30, 2019 | $ | 22,850 |  |  | $ | 90,000 |
5.90% Senior Notes, Series 2006-A |  | April 30, 2016 | — |  |  | 90,000 |
6.56% Senior Notes, Series 2008-B |  | April 30, 2015 | — |  |  | 90,000 |
5.09% Senior Notes, Series 2010-A |  | December 15, 2017 | 46,944 |  |  | 65,000 |
5.67% Senior Notes, Series 2010-B |  | December 15, 2020 | 18,056 |  |  | 25,000 |
4.00% Senior Notes, Series 2013 |  | April 29, 2020 | 35,000 |  |  | 35,000 |
11.00% Senior Notes, Series 2015 (presented net of the unamortized discount of $4.9 million as of December 31, 2015) |  | November 5, 2022 | 120,071 |  |  | — |
Senior Secured Notes |  | April 1, 2019 | 50,000 |  |  | — |
European bank credit facility |  |  | — |  |  | — |
Other |  |  | 50 |  |  | 74 |
TETRA total debt |  |  | 292,971 |  |  | 395,074 |
Less current portion |  |  | (50 | ) |  | (90,074 | )
TETRA total long-term debt |  |  | $ | 292,921 |  |  | $ | 305,000 |
CCLP |  |  |  |  | — |
CCLP Bank Credit Facility |  | August 4, 2019 | 235,000 |  |  | 195,000 |
CCLP 7.25% Senior Notes (presented net of the unamortized discount of $4.5 million as of December 31, 2015 and $5.0 million as of December 31, 2014) |  | August 15, 2022 | 345,481 |  |  | 344,961 |
CCLP total debt |  |  | 580,481 |  |  | 539,961 |
Less current portion |  |  | — |  |  | — |
CCLP total long-term debt |  |  | 580,481 |  |  | 539,961 |
Consolidated total long-term debt |  |  | $ | 873,402 |  |  | $ | 844,961 |
Scheduled maturities for the next five years and thereafter are as follows:
|  | December 31, 2015
|  | (In Thousands)
|  | TETRA |  | CCLP |  | Consolidated
2016 |  | $ | — |  |  | $ | — |  |  | $ | — |
2017 |  | 46,944 |  |  | — |  |  | 46,944 |
2018 |  | — |  |  | — |  |  | — |
2019 |  | 72,850 |  |  | 235,000 |  |  | 307,850 |
2020 |  | 53,056 |  |  | — |  |  | 53,056 |
Thereafter |  | 120,071 |  |  | 345,481 |  |  | 465,552 |
Total maturities |  | $ | 292,921 |  |  | $ | 580,481 |  |  | $ | 873,402 |
Our Long-Term Debt We are in compliance with all covenants and conditions under our long-term debt agreements as of December 31, 2015. Our continuing ability to comply with these financial covenants depends largely upon our ability to generate adequate cash flow. Historically, our financial performance has been more than adequate to meet these covenants. Due to the decreased demand for certain of our products and services by our customers in response to decreased oil and natural gas prices, we have taken strategic cost reduction efforts, including headcount reductions, deferral of wage increases, wage reductions, and other efforts to reduce costs and generate cash to mitigate the reduced demand for our products and services. In addition, certain of our businesses have seen increased activity and profitability levels, despite current oil and natural gas prices. Based on our projections for each of the quarterly periods in 2016 and including the impact of these cost reduction efforts and expected activity levels on future estimated operating cash flows, we anticipate that we will have sufficient liquidity to maintain compliance with the financial covenants under our long-term debt agreements through December 31, 2016. Our Bank Credit Facility On September 30, 2014, we entered into an amendment (the "Third Amendment") of our bank credit facility (the "Credit Agreement"). The Third Amendment amended our credit facility, which was scheduled to expire on October 29, 2015, by extending the maturity date of the credit facility until September 30, 2019 and decreasing the revolving commitment from $278 million to $225 million. The Third Amendment also revised certain financial covenants and the range of applicable interest rate spreads. The facility remains unsecured and guaranteed by certain of our material domestic subsidiaries. In connection with the reduction of the commitment capacity as part of the Third Amendment, we charged approximately $0.1 million of unamortized deferred financing costs to expense. As of December 31, 2015 we had a balance of approximately $22.9 million outstanding on the amended revolving credit facility, as well as $7.6 million in letters of credit and guarantees against the $225 million availability under the amended revolving credit facility, leaving a net availability of approximately $194.6 million. Under the Credit Agreement, the revolving credit facility is unsecured and guaranteed by certain of our material U.S. subsidiaries (excluding CCLP and its subsidiaries). Borrowings generally bear interest at the British Bankers Association LIBOR rate plus 1.50% to 2.75%, depending on one of our financial ratios. The weighted average interest rate on borrowings outstanding under the Credit Agreement as of December 31, 2015, was 3.5% per annum. We pay a commitment fee ranging from 0.225% to 0.500% on unused portions of the facility. The Credit Agreement contains customary covenants and other restrictions, including certain financial ratio covenants based on our levels of debt and interest cost compared to a defined measure of our operating cash flows over a twelve month period. In addition, the Credit Agreement includes limitations on aggregate asset sales, individual acquisitions, and aggregate annual acquisitions and capital expenditures. Access to our revolving credit line is dependent upon our compliance with the financial ratio covenants set forth in the Credit Agreement. These financial ratios include a minimum interest charge coverage ratio (ratio of a defined measure of earnings to interest) of 3.0 and a maximum leverage ratio (ratio of debt and letters of credit outstanding to a defined measure of earnings) of 3.25. The maximum leverage ratio decreases to 3.0 as of March 31, 2016. Consolidated net earnings under the credit facility is defined as the aggregate of our net income (or loss) and our consolidated restricted subsidiaries (which does not include CCLP), including cash dividends and distributions (not the return of capital) received from persons other than consolidated restricted subsidiaries (including CCLP) and after allowances for taxes for such period determined on a consolidated basis in accordance with U.S. generally accepted accounting principles ("GAAP"), excluding certain items more specifically described therein. At December 31, 2015, our leverage ratio was 1.86 to 1. Deterioration of these financial ratios could result in a default by us under the Credit Agreement and, if not remedied, could result in termination of the Credit Agreement and acceleration of any outstanding balances. CCLP is an unrestricted subsidiary and is not a borrower or a guarantor under our Credit Agreement. The Credit Agreement includes cross-default provisions relating to any other indebtedness (excluding indebtedness of CCLP) greater than a defined amount. Our Credit Agreement also contains a covenant that restricts us from paying dividends in the event of a default or if such payment would result in an event of default. Our Senior Unsecured Notes On November 20, 2015, pursuant to the 2015 Senior Note Purchase Agreement with GSO Tetra Holdings LP, an unrelated third party, we issued and sold $125.0 million in aggregate principal amount of our Series 2015 Senior Notes. Immediately after the closing and funding, we applied a portion of the $119.7 million proceeds from the sale of the Series 2015 Senior Notes (consisting of $125.0 million aggregate principal amount net of a $5.0 million discount and certain financing costs) to repay all of the indebtedness for borrowed money outstanding under our Credit Agreement. In December 2015, we applied the remaining portion of the proceeds, together with other funds to (i) pay the $25.0 million purchase price for 2010 Senior Notes accepted for purchase pursuant to the Tender Offer, (ii) prepay in full all amounts owed in respect of the outstanding Series 2006-A Senior Notes due April 30, 2016, and (iii) pay other fees and expenses associated with the transactions contemplated under the 2015 Senior Note Purchase Agreement. The Series 2015 Senior Notes bear interest at the fixed rate of 11.0% and mature on November 5, 2022. Interest on the Series 2015 Senior Notes is due quarterly on March 15, June 15, September 15, and December 15 of each year, commencing on March 15, 2016. We may prepay the Series 2015 Senior Notes, in whole or in part at a prepayment price equal to (i) prior to November 20, 2018, 100% of the principal amount so prepaid, plus accrued and unpaid interest and a “make-whole” prepayment amount, (ii) during the period commencing on November 20, 2018, and ending on November 19, 2019, 104% of the principal amount so prepaid, plus accrued and unpaid interest, (iii) during the period commencing on November 20, 2019 and ending on November 19, 2020, 102% of the principal amount so prepaid, plus accrued and unpaid interest, (iv) during the period commencing on November 20, 2020, and ending on November 19, 2021, 101% of the principal amount so prepaid, plus accrued and unpaid interest, and (v) on or after November 20, 2021, 100% of the principal amount so prepaid, plus accrued and unpaid interest. Each of our Senior Notes (the "Senior Unsecured Notes") was sold in the United States to accredited investors pursuant to an exemption from the Securities Act of 1933. The Senior Unsecured Notes are unsecured and are guaranteed by substantially all of our wholly owned U.S. subsidiaries. The 2015 Senior Note Purchase Agreement and the Note Purchase Agreements (together, "the Senior Unsecured Note Purchase Agreements"), contain customary covenants that limit our ability and the ability of certain of our restricted subsidiaries to, among other things: incur or guarantee additional indebtedness; incur or create liens; merge or consolidate or sell substantially all of our assets; engage in a different business; enter into transactions with affiliates; and make certain payments. In addition, the Senior Unsecured Note Purchase Agreements require us to maintain certain financial ratios, including a maximum leverage ratio (ratio of debt and letters of credit outstanding to a defined measure of earnings) of 3.5. Consolidated net earnings under the Senior Unsecured Note Purchase Agreements is the aggregate of our net income (or loss) and our consolidated restricted subsidiaries, including cash dividends and distributions (not the return of capital) received from persons other than consolidated restricted subsidiaries (such as CCLP) and after allowances for taxes for such period determined on a consolidated basis in accordance with GAAP, excluding certain items more specifically described therein. Under these Senior Unsecured Note Purchase Agreements, the financial ratio requirements include a minimum interest coverage ratio of 2.5 and a maximum leverage ratio of 3.5. At December 31, 2015, our leverage ratio was 1.86 to 1. The maximum leverage ratio is further defined in our Senior Unsecured Note Purchase Agreements. Deterioration of the financial ratios could result in a default by us under the Senior Unsecured Note Purchase Agreements and, if not remedied, could result in termination of the Senior Unsecured Note Purchase Agreements and acceleration of any outstanding balances. CCLP is an unrestricted subsidiary and is not a borrower or a guarantor under our Senior Unsecured Note Purchase Agreements. The Senior Unsecured Note Purchase Agreements contain the following cross-default provisions. If we or any of our restricted subsidiaries (i) fails to make any payment when due beyond any applicable grace period under any indebtedness of at least $20.0 million, (ii) defaults in the performance of or compliance with any term of any indebtedness in an aggregate outstanding principal amount of at least $20.0 million or of any mortgage, indenture or other agreement relating to such indebtedness or any other condition exists, and as a result of such default or condition such indebtedness is accelerated and declared due and payable before its stated maturity or before its regularly scheduled dates for payment, or (iii) become obligated to purchase or repay indebtedness before its regular maturity or before its regularly scheduled dates of payment in an aggregate outstanding principal amount of at least $20.0 million or one or more persons have the right to require us or any of our subsidiaries to purchase or repay such indebtedness. Upon the occurrence and during the continuation of an event of default under the Senior Unsecured Note Purchase Agreements, the Senior Unsecured Notes may become immediately due and payable, either automatically or by declaration of holders of more than 50% in principal amount of the Senior Unsecured Notes at the time outstanding. We are in compliance with all covenants and conditions of the Senior Unsecured Note Purchase Agreements as of December 31, 2015. In April 2015, we utilized the proceeds from the issuance of the Senior Secured Notes (see discussion below) along with borrowings under our Credit Agreement to repay the 2008-B Senior Notes. In December 2015, we prepaid in full all amounts owed in respect of the outstanding Series 2006-A Senior Notes, due April 30, 2016, including a $1.6 million "make-whole" prepayment premium in accordance with the Master Note Purchase Agreement. In December 2015, and pursuant to a Tender Offer that commenced on November 5, 2015, we purchased for cash $25.0 million aggregate principal amount of certain of the outstanding 2010 Senior Notes, consisting of $18.1 million of the Series 2010-A Senior Notes and $6.9 million of the Series 2010-B Senior Notes. The offered consideration for 2010 Senior Notes was an amount of cash equal to $100,000 per $100,000 principal amount of 2010 Senior Notes tendered prior to December 7, 2015, and accepted for purchase by us, plus accrued and unpaid interest. Our Senior Secured Notes On April 30, 2015, and pursuant to a Note Purchase Agreement dated March 18, 2015, with Wells Fargo Energy Capital, Inc., in its capacity as noteholder representative for the noteholders (the "Noteholder Representative"), and Wells Fargo Energy Capital, Inc., in its capacity as the sole initial purchaser (the "Senior Secured Note Purchase Agreement"), we issued and sold $50.0 million aggregate principal amount of Senior Secured Notes due April 1, 2017 (the "Senior Secured Notes"). In February 2016, we repaid $10.0 million of the amount outstanding under the Senior Secured Notes. The Senior Secured Notes were sold in a private placement exempt from the registration requirements of the Securities Act of 1933, as amended (the "Securities Act"). The proceeds from these Senior Secured Notes were used to provide a portion of the funds necessary to repay the $90.0 million principal amount of the Series 2008-B Senior Notes that matured on April 30, 2015. The Senior Secured Notes are secured by our accounts receivable (excluding CCLP's accounts receivable) and our common units in CCLP, and the related Note Purchase Agreement includes financial covenants consistent with those applicable to our existing bank revolving credit facility. On November 5, 2015, we entered into the Second Amendment (the “Second Amendment”) to the Note Purchase Agreement that, conditioned upon the closing and funding of the issuance of the Series 2015 Senior Notes, (i) provided for the extension of the maturity date of the Senior Secured Notes from April 1, 2017 to April 1, 2019, (ii) amended certain definitions in the Note Purchase Agreement and (iii) required us to pay an extension fee . The principal portion of each of the Senior Secured Notes consists of tranches that bear interest at LIBOR, as defined in the Note Purchase Agreement, plus an applicable margin ("LIBOR Tranches") and tranches that bear interest at the Base Rate plus an applicable margin ("Base Rate Tranches"), as we may request in accordance with the Note Purchase Agreement. The initial Senior Secured Notes consist of a LIBOR Tranche and the interest rate at closing and as of December 31, 2015, is 5.75% per annum. We may convert the LIBOR Tranche into a Base Rate Tranche in accordance with the Note Purchase Agreement. The Note Purchase Agreement contains customary covenants and default and cross default provisions consistent with the agreements governing our other TETRA indebtedness. CCLP Long-Term Debt CCLP Bank Credit Facility On August 4, 2014, in connection with the CSI Acquisition, CCLP entered into a credit agreement (the "CCLP Credit Agreement"), and it borrowed $210.0 million, which was used to fund, in part, CCLP's $825.0 million CSI Acquisition purchase price. In addition, the CCLP Credit Agreement borrowings were used to pay fees and expenses related to the CSI Acquisition, the CCLP Senior Notes offering, and the CCLP Credit Agreement, and to repay the $38.1 million balance outstanding under CCLP's previous revolving credit facility dated October 15, 2013, (the "Previous CCLP Credit Agreement"), which was then terminated. As a result, approximately $0.8 million of unamortized deferred financing costs associated with that terminated Previous CCLP Credit Agreement was charged to earnings and reflected in other expense during 2014. Under the CCLP Credit Agreement, CCLP and CSI Compressco Sub Inc. are named as the borrowers, and all obligations under the CCLP Credit Agreement are guaranteed by all of CCLP's existing and future, direct and indirect, domestic restricted subsidiaries (other than domestic subsidiaries that are wholly owned by foreign subsidiaries). We are not a borrower or a guarantor under the CCLP Credit Agreement. The CCLP Credit Agreement includes a maximum credit commitment of $400.0 million and included within such amount is availability for letters of credit (with a sublimit of $20.0 million) and swingline loans (with a sublimit of $60.0 million). The amount of borrowings under the CCLP Credit Agreement is subject to certain limitations, including borrowing limitations as a result of financial covenants. During the year ended December 31, 2014, CCLP incurred financing costs of approximately $7.3 million related to the CCLP Credit Agreement. These costs are included in Other Assets and are being amortized over the term of the CCLP Credit Agreement. As of December 31, 2015, CCLP had a balance outstanding of $235.0 million, had approximately $1.6 million letters of credit and performance bonds, and had availability under the CCLP Credit Agreement of approximately $163.4 million. The CCLP Credit Agreement is available to provide CCLP's working capital needs, letters of credit, and for general partnership purposes, including capital expenditures and potential future expansions or acquisitions. So long as CCLP is not in default, the CCLP Credit Agreement can also be used to fund CCLP’s quarterly distributions at the option of the board of directors of CCLP's general partner (provided, that after giving effect to such distributions, the borrowers will be in compliance with the financial covenants). All obligations under the CCLP Credit Agreement and the guarantees of those obligations are secured, subject to certain exceptions, by a first lien security interest in substantially all of CCLP's assets and the assets of its existing and future domestic subsidiaries, and all of the capital stock of its existing and future subsidiaries (limited in the case of foreign subsidiaries, to 65% of the voting stock of first tier foreign subsidiaries). Borrowings under the CCLP Credit Agreement bear interest at a rate per annum equal to, at CCLP's option, either (a) LIBOR (adjusted to reflect any required bank reserves) for an interest period equal to one, two, three, or six months (as selected by CCLP), plus a leverage-based margin or (b) a base rate plus a leverage-based margin; such base rate shall be determined by reference to the highest of (1) the prime rate of interest per annum announced from time to time by Bank of America, N.A., (2) the Federal Funds rate plus 0.50% per annum, and (3) LIBOR (adjusted to reflect any required bank reserves) for a one month interest period on such day plus 1.00% per annum. LIBOR based loans will have an applicable margin that will range between 1.75% and 2.50% per annum and base rate loans will have an applicable margin that will range between 0.75% and 1.50% per annum, each based on CCLP's consolidated total leverage ratio when financial statements are delivered. The weighted average interest rate on borrowings outstanding under the CCLP Credit Agreement as of December 31, 2015, was 3.50% per annum. In addition to paying interest on outstanding principal under the CCLP Credit Agreement, CCLP is required to pay a commitment fee in respect of the unutilized commitments of from 0.375% to 0.50% per annum, paid quarterly in arrears, based on CCLP's consolidated total leverage ratio. CCLP is also required to pay a customary letter of credit fee equal to the applicable margin on revolving credit LIBOR loans, fronting fees, and other fees, agreed to with the administrative agent and lenders. The CCLP Credit Agreement requires CCLP to maintain (i) a minimum consolidated interest coverage ratio (ratio of consolidated earnings before interest, taxes, depreciation, and amortization ("EBITDA") to consolidated interest charges) of 3.0 to 1.0, (ii) a maximum consolidated total leverage ratio (ratio of consolidated total indebtedness to consolidated EBITDA) of 5.5 to 1.0 (with step downs to 5.0 to 1.0), and (iii) a maximum consolidated secured leverage ratio (consolidated secured indebtedness to consolidated EBITDA) of 4.0 to 1.0, in each case, as of the last day of each fiscal quarter, calculated on a trailing four quarters basis. At December 31, 2015, CCLP's leverage ratio was 4.56 to 1. In addition, the CCLP Credit Agreement includes customary negative covenants that, among other things, limit CCLP's ability to incur additional debt, incur or permit certain liens to exist, or make certain loans, investments, acquisitions, or other restricted payments. The CCLP Credit Agreement provides that CCLP can make distributions to holders of its common units, but only if there is no default or event of default under the facility. CCLP is in compliance with all covenants and conditions of its Credit Agreement as of December 31, 2015. CCLP's continuing ability to comply with its financial covenants depends largely upon its ability to generate adequate cash flow. Historically, CCLP's financial performance has been more than adequate to meet these covenants, and CCLP expects this trend to continue. However, given the expected decreased demand for certain of CCLP's products and services by its customers in response to decreased oil and natural gas prices, CCLP has taken strategic cost reduction efforts, including headcount reductions, deferral of wage increases, wage reductions, and other efforts to reduce costs and generate cash in anticipation of the reduced demand for its products and services. Based on CCLP's projections for each of the quarterly periods in 2016 and including the impact of these cost reduction efforts to increase operating cash flows, CCLP anticipates that it will be in compliance with the financial covenants under its Credit Agreement through December 31, 2016. CCLP 7.25% Senior Notes In August 2014, CCLP, and CSI Compressco Finance Inc., a Delaware corporation and indirect wholly owned subsidiary of CCLP (CSI Compressco Finance and, together with CCLP, the "Issuers"), issued $350.0 million aggregate principal amount of the Issuers’ 7.25% Senior Notes due 2022 (the "CCLP Senior Notes") in a private offering (the "Offering") exempt from the registration requirements under the Securities Act of 1933, as amended (the "Securities Act") pursuant to a Note Purchase Agreement dated July 29, 2014. The CCLP Senior Notes were subsequently registered through a public exchange offer that closed on July 20, 2015. The obligations under the CCLP Senior Notes are jointly and severally, and fully and unconditionally, guaranteed on a senior unsecured basis by each of CCLP’s domestic restricted subsidiaries (other than CSI Compressco Finance) that guarantee CCLP’s other indebtedness (the "Guarantors" and together with the Issuers, the "Obligors"). The CCLP Senior Notes and the subsidiary guarantees thereof (together, the "CCLP Securities") were issued pursuant to an indenture described below. The Obligors issued the CCLP Securities pursuant to the Indenture dated as of August 4, 2014, (the "Indenture") by and among the Obligors and U.S. Bank National Association, as trustee (the "Trustee"). The CCLP Senior Notes accrue interest at a rate of 7.25% per annum. Interest on the CCLP Senior Notes is payable semi-annually in arrears on February 15 and August 15 of each year, beginning February 15, 2015. The CCLP Senior Notes are scheduled to mature on August 15, 2022. The Indenture contains customary covenants restricting CCLP’s ability and the ability of its restricted subsidiaries to: (i) pay dividends and make certain distributions, investments and other restricted payments; (ii) incur additional indebtedness or issue certain preferred shares; (iii) create certain liens; (iv) sell assets; (v) merge, consolidate, sell or otherwise dispose of all or substantially all of its assets; (vi) enter into transactions with affiliates; and (vii) designate its subsidiaries as unrestricted subsidiaries under the Indenture. The Indenture also contains customary events of default and acceleration provisions relating to such events of default, which provide that upon an event of default under the Indenture, the Trustee or the holders of at least 25% in aggregate principal amount of the CCLP Senior Notes then outstanding may declare all amounts owing under the CCLP Senior Notes to be due and payable.

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