Select Water Solutions (WTTR) risk factors, FY2025 10-K

Risks Related to Our Business Operations

1. 01Our business depends on capital spending by the oil and gas industry in the U.S. and reductions in capital spending could have a material adverse effect on our liquidity, results of operations and financial condition26% rewritten
2. 02Political instability or armed conflict in crude oil or natural gas producing regions could have a material adverse impact on our business, financial condition or future results34% rewritten
3. 03OPEC+ policy decisions could have a material adverse impact on our business, financial condition or future results48% rewritten
4. 04The failure to successfully integrate acquired assets or operations in the expected time frame or at all may adversely affect our future results80% rewritten
5. 05Changes in U.S. and international trade policies, such as the imposition of tariffs, particularly involving China, may adversely impact our business and operating results86% rewritten
6. 06Restrictions on the ability to procure water or changes in water sourcing or disposal requirements could add costs or decrease the demand for our water-related services
7. 07The adoption of more stringent trucking legislation or regulations may increase our costs and could have an adverse effect on our liquidity, results of operations, and financial condition
8. 08The IRA 2022 could accelerate the transition to new energy sources and could impose new costs on our customers’ operations58% rewritten
9. 09We may be unable to implement price increases or maintain existing prices on our core services
10. 10We may be subject to claims for personal injury and property damage, which could materially adversely affect our financial condition and results of operations
11. 11We operate in a highly competitive industry, which may intensify as our competitors expand their operations, thereby causing us to lose market share, and which could negatively affect our ability to expand our operations
12. 12Our operations involve risks that may increase our operating costs, which could reduce our profitability
13. 13Delays or restrictions in obtaining permits by us for our operations or by our E&P customers for their operations could impair our business
14. 14We are subject to cybersecurity risks. A cyber incident or systems failure could occur and result in information theft, data corruption, operational disruption and/or financial loss
15. 15Technology advancements in well completion and service technologies, including those involving the replacement of water in fracturing fluid, could have a material adverse effect on our business, financial condition and results of operations
16. 16We may be adversely affected by uncertainty in the global financial markets and a worldwide economic downturn
17. 17Seasonal weather conditions and natural disasters could severely disrupt normal operations and harm our business
18. 18Disruptions in the transportation services of logistics companies transporting wastewater and other oilfield products could have an adverse effect on our results
19. 19A significant increase in fuel prices may adversely affect our transportation costs, which could have a material adverse effect on our results of operations and financial condition
20. 20Our industry typically experiences a high rate of employee turnover

Risks Related to Customers and Suppliers

1. 21Disruptions in production at our chemical manufacturing facilities may have a material adverse impact on our business, results of operations and/or financial condition
2. 22Consolidation of our customers and competitors may impact our results of operationsNew
3. 23Unsatisfactory safety performance may negatively affect our E&P customer relationships and, to the extent we fail to retain existing customers or attract new customers, adversely impact our revenues
4. 24Constraints in the supply of equipment used in providing services to our customers and replacement parts for such could affect our ability to execute our growth strategies
5. 25Significant price volatility or interruptions in supply of our raw materials for our chemicals business may result in increased costs that we may be unable to pass on to our customers, which could reduce profitability

Risks Related to Compliance with Regulations

1. 26Our chemical products are subject to stringent chemical control laws that could result in increased costs on our business
2. 27In the future, we may face increased obligations relating to the closing of our wastewater disposal facilities and may be required to provide an increased level of financial assurance to guarantee that the appropriate closure activities will occur for a wastewater disposal facility
3. 28State and federal legislation and regulatory initiatives relating to our disposal operations and seismicity could harm our business51% rewritten
4. 29Changes to applicable tax laws and regulations or exposure to additional tax liabilities could adversely affect our operating results and cash flows
5. 30We are subject to environmental and occupational health and safety laws and regulations that may expose us to significant liabilities for penalties, damages or costs of remediation or compliance
6. 31Increasing attention to sustainability and environmental matters may impact our businessNew

Risks Related to Our Capital Structure

1. 32We may not be able to continue to pay or maintain our cash dividends and the failure to do so may negatively affect our share price
2. 33We may incur indebtedness or issue additional equity securities to execute our long-term growth strategy, which may reduce our profitability or result in significant dilution to our stockholders
3. 34Our Sustainability-Linked Credit Facility subjects us to various financial and other restrictive covenants. These restrictions may limit our operational or financial flexibility and could subject us to potential defaults under our Sustainability-Linked Credit Facility
4. 35Future sales of our equity securities, or the perception that such sales may occur, may depress our share price, and any additional capital raised through the sale of equity or convertible securities may dilute your ownership in us
5. 36Provisions in our amended and restated certificate of incorporation and amended and restated bylaws and Delaware law may discourage a takeover attempt even if a takeover might be beneficial to our stockholders
6. 37Our amended and restated certificate of incorporation contains a provision renouncing our interest and expectancy in certain corporate opportunities, which could adversely affect our business or prospects
7. 38We may issue preferred stock whose terms could adversely affect the voting power or value of our Class A common stock26% rewritten
8. 39choice of forum provisions contained in our amended and restated certificate of incorporation to be inapplicable or unenforceable, including with respect to claims arising under the U.S. federal securities lawsNew

Risks Related to Our Organizational Structure

1. 40We are a holding company. Our sole material asset consists of SES Holdings LLC Units, and accordingly, we are dependent upon distributions and payments from SES Holdings to pay taxes, pay dividends, make payments under the Tax Receivable Agreements and cover our corporate and other overhead expenses
2. 41We will be required to make payments under the Tax Receivable Agreements for certain tax benefits we may claim, and the amounts of such payments could be significant29% rewritten
3. 42In certain cases, payments under the Tax Receivable Agreements may be accelerated and/or significantly exceed the actual benefits, if any, we realize in respect of the tax attributes subject to the Tax Receivable Agreements25% rewritten
4. 43Our ability to use certain of our current and future NOL carryforwards may be limited and could adversely affect our operating results and cash flows
5. 44Our investment in AV Farms could be materially and adversely affected by our lack of sole decision-making authority, our reliance on our co-investors’ financial condition, and disputes between our co-investors and usNew

General Risks

1. 45We may not be able to finance future growth of our operations or future acquisitions, which could adversely affect our operations and financial position50% rewritten
2. 46control environment over an acquired business; potential losses of key employees and customers of the acquired business; risks of entering markets in which we have limited prior experience; and increases in our expenses and working capital requirementsNew
3. 47We may be required to take write-downs of the carrying values of our long-lived assets and finite-lived intangible assets41% rewritten
4. 48We may be required to take a write-down of the carrying value of goodwill