CJ 2017 Annual Report

Years Ending December 31, 2018 $ 9,076 2019 5,737 2020 4,719 2021 3,523 2022 3,498 Thereafter 2,487 $ 29,040 C&J ENERGY SERVICES, INC. AND SUBSIDIARIES NOTES TO CONSOLIDATED FINANCIAL STATEMENTS 108 Note 11 - Employee Benefit Plans The Company maintains a contributory profit sharing plan under a 401(k) arrangement which covers all employees meeting certain eligibility requirements. Eligible employees can make annual contributions to the plan up to the maximum amount allowed by current federal regulations, but no more than 80.0% of compensation as noted in the plan document. The Company’s 401(k) contributions for the years ended December 31, 2017 and 2015 totaled $3.3 million and $4.8 million, respectively. Due to the continued market downturn and the Company's Chapter 11 Proceeding during 2016, no 401(k) contributions were made by the Company throughout 2016. Note 12 - Mergers and Acquisitions 2017 Acquisition of O-Tex On November 30, 2017, the Company acquired all of the outstanding equity interest of O-Tex for approximately $271.9 million, consisting of cash of approximately $132.5 million and 4.42 million shares of the Company's common stock with a fair value of $138.2 million. The Company also acquired the remaining 49.0% non-controlling interest in an O-Tex subsidiary for $1.25 million. O-Tex specializes in both primary and secondary downhole specialty cementing services in most major U.S. shale plays. This strategic transaction immediately expands C&J’s cementing business with enhanced capabilities and strengthens the Company’s position as a leading oilfield services provider with a best-in-class well construction, intervention and completions platform. The O-Tex transaction was accounted for using the acquisition method of accounting for business combinations. In applying the acquisition method of accounting, the Company was required to determine the accounting acquirer which was deemed to be the party possessing the controlling financial interest. The Company determined that C&J possessed the controlling financial interest. The preliminary purchase price was allocated to the net assets acquired based upon their estimated fair values, as shown below (in thousands). The estimated fair values of certain assets and liabilities, including property plant and equipment, other intangible assets, and contingencies required significant judgments and estimates. As a result, the provisional measurements below are preliminary and subject to change during the measurement period and such changes could be material. Valuations are not complete due to the timing of the acquisition during the second half of the fourth quarter. C&J continues to assess the fair values of the assets acquired and liabilities assumed. All of the goodwill associated with the O-Tex transaction was allocated to the Completion Services reporting unit. The preliminary purchase price was allocated to the net assets acquired based upon their estimated fair values, as follows (in thousands):