UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
 
__________________________________
FORM 11-K
__________________________________
 
x
ANNUAL REPORT PURSUANT TO SECTION 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934
For the Year Ended December 31, 2014
OR
¨
TRANSITION REPORT PURSUANT TO SECTION 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934
For the transition period from (not applicable)
Commission file number: 001-33816
 
A.
Full title of the plan and the address of the plan, if different from that of the issuer named below:
Nuverra 401(k) Plan
B.
Name of issuer of the securities held pursuant to the plan and the address of its principal executive office:
Nuverra Environmental Solutions, Inc.
14624 N. Scottsdale Road, Suite 300
Scottsdale, AZ 85254








REQUIRED INFORMATION
The Nuverra 401(k) Plan (the “Plan”) is subject to the Employee Retirement Income Security act of 1974 (“ERISA”). Therefore, in lieu of the requirements of Items 1-3 of Form 11-K, the financial statements and schedule of the Plan for the year ended December 31, 2014, which have been prepared in accordance with the financial reporting requirements of ERISA, are attached hereto as Exhibit 99.1 and incorporated herein by this reference.
The following exhibits are filed with this report:
 
 
 
 
Exhibit
Number
 
Description
 
 
 
 
23.1
 
Consent of Independent Registered Public Accounting Firm
 
 
 
 
99.1
 
Nuverra 401(k) Plan Financial Statements For the Year Ended December 31, 2014 and From Inception (August 1, 2013) to December 31, 2013 and Schedule For the Year Ended December 31, 2014






SIGNATURES
Pursuant to the requirements of the Securities Exchange Act of 1934, the trustees (or other persons who administer the Plan) have duly caused this annual report to be signed on its behalf by the undersigned hereunto duly authorized.
 
 
 
 
 
 
 
 
 
 
 
 
NUVERRA ENVIRONMENTAL SOLUTIONS 401(k) PLAN
 
 
 
 
Date: June 29, 2015
 
 
 
By:
 
/s/ Dan Pon
 
 
 
 
Name:
 
Dan Pon
 
 
 
 
Title:
 
Vice President of Human Resources, on behalf of the Plan Administrator







Exhibit 23.1

CONSENT OF INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM

We consent to the incorporation by reference in Registration Statement (Nos. 333-159086, 333-182068, and 333-190678) on Form S-8 of our report dated June 24, 2015 appearing in this Annual Report on Form 11-K of Nuverra 401(k) Plan for the year ended December 31, 2014.

/s/ CliftonLarsonAllen LLP
Phoenix, Arizona
June 24, 2015







Exhibit 99.1

NUVERRA 401(k) PLAN

FINANCIAL STATEMENTS AND SUPPLEMENTAL SCHEDULE

FOR THE YEAR ENDED DECEMBER 31, 2014 AND
FROM INCEPTION (AUGUST 1, 2013) TO DECEMBER 31, 2013





NUVERRA 401(k) PLAN
TABLE OF CONTENTS
 
 
 
 
Page
Report of Independent Registered Public Accounting Firm
Statements of Net Assets Available for Benefits as of December 31, 2014 and 2013
Statements of Changes in Net Assets Available for Benefits for the Year Ended December 31, 2014 and From Inception (August 1, 2013) to December 31, 2013
Notes to Financial Statements
Supplemental Schedule
Schedule H, Line 4(i) - Schedule of Assets (Held at End of Year)





Report of Independent Registered Public Accounting Firm
Employee Benefits Administrative Committee
Nuverra 401(k) Plan
Scottsdale, Arizona

We have audited the accompanying statements of net assets available for benefits of Nuverra 401(k) Plan (the Plan) as of December 31, 2014 and 2013, and the related statements of changes in net assets available for benefits for the year ended December 31, 2014 and the period from inception (August 1, 2013) to December 31, 2013. These financial statements are the responsibility of the Plan's management. Our responsibility is to express an opinion on these financial statements based on our audit.

We conducted our audit in accordance with the standards of the Public Company Accounting Oversight Board (United States). Those standards require that we plan and perform the audit to obtain reasonable assurance about whether the financial statements are free of material misstatement. The Plan is not required to have, nor were we engaged to perform, an audit of its internal control over financial reporting. Our audit included consideration of internal control over financial reporting as a basis for designing audit procedures that are appropriate in the circumstances, but not for the purpose of expressing an opinion on the effectiveness of the Plan’s internal control over financial reporting. Accordingly, we express no such opinion. An audit includes examining, on a test basis, evidence supporting the amounts and disclosures in the financial statements. An audit also includes assessing the accounting principles used and significant estimates made by management, as well as evaluating the overall financial statement presentation. We believe that our audit provides a reasonable basis for our opinion.

In our opinion, the financial statements referred to above present fairly, in all material respects, the net assets available for benefits of Nuverra 401(k) Plan as of December 31, 2014 and 2013, and the changes in net assets available for benefits for the year ended December 31, 2014 and the period from inception (August 1, 2013) to December 31, 2013 in conformity with accounting principles generally accepted in the United States of America.

The supplemental schedule of assets (held at end of year) (supplemental information) has been subjected to audit procedures performed in conjunction with the audit of the Plan's financial statements. The supplemental information is the responsibility of the Plan's management. Our audit procedures included determining whether the supplemental information reconciles to the financial statements or the underlying accounting and other records, as applicable, and performing procedures to test the completeness and accuracy of the information presented in the supplemental information. In forming our opinion on the supplemental information, we evaluated whether the supplemental information, including its form and content, is presented in conformity with the Department of Labor's Rules and Regulations for Reporting and Disclosure under the Employee Retirement Income Security Act of 1974. In our opinion, the supplemental information is fairly stated, in all material respects, in relation to the financial statements as a whole.
/s/ CliftonLarsonAllen LLP

Phoenix, Arizona
June 24, 2015
 


3



NUVERRA 401(K) PLAN
STATEMENTS OF NET ASSETS AVAILABLE FOR BENEFITS

 
December 31,
 
2014
 
2013
ASSETS
 
 
 
 
 
 
 
INVESTMENTS (at Fair Value)
 
 
 
Collective Fund
$
492,381

 
$
709,420

Mutual Funds
21,296,209

 
15,954,642

Equities
1,798,678

 
424,039

Total Investments
23,587,268

 
17,088,101

 
 
 
 
RECEIVABLES
 
 
 
Company Match Contributions
1,234,194

 
938,794

Notes Receivable from Participants
1,014,195

 
679,332

Total Receivables
2,248,389

 
1,618,126

 
 
 
 
Total Assets
25,835,657

 
18,706,227

 
 
 
 
LIABILITIES
 
 
 
 
 
 
 
PAYABLES
 
 
 
Administrative Expenses Payable
19,988

 
16,868

Excess Contributions Payable

 
20,201

Total Liabilities
19,988

 
37,069

 
 
 
 
NET ASSETS REFLECTING INVESTMENTS AT FAIR VALUE
25,815,669

 
18,669,158

 
 
 
 
Adjustment from Fair Value to Contract Value for
 
 
 
  Fully Benefit-Responsive Investment Contracts
(6,831
)
 
(5,630
)
 
 
 
 
NET ASSETS AVAILABLE FOR BENEFITS
$
25,808,838

 
$
18,663,528



4



NUVERRA 401(K) PLAN
STATEMENTS OF CHANGES IN NET ASSETS AVAILABLE FOR BENEFITS
FOR THE YEAR ENDED DECEMBER 31, 2014 AND FROM INCEPTION (AUGUST 1, 2013)
TO DECEMBER 31, 2013

 
2014
 
2013
ADDITIONS TO NET ASSETS ATTRIBUTED TO:
 
 
 
 
 
 
 
INVESTMENT (LOSS) INCOME
 
 
 
Net (Depreciation) Appreciation in Fair Value of Investments
$
(1,689,743
)
 
$
760,637

Interest and Dividends
387,242

 
267,397

Total Investment (Loss) Income
(1,302,501
)
 
1,028,034

 
 
 
 
INTEREST INCOME ON NOTES RECEIVABLE
 
 
 
  FROM PARTICIPANTS
22,494

 
7,020

 
 
 
 
CONTRIBUTIONS
 
 
 
Employee 401(k) Deferral
6,243,526

 
2,459,354

Employee Roth Deferral
126,534

 
26,763

Rollover Contributions
1,221,422

 

Company Match
4,412,069

 
940,897

Total Contributions
12,003,551

 
3,427,014

 
 
 
 
Total Additions
10,723,544

 
4,462,068

 
 
 
 
DEDUCTIONS FROM NET ASSETS ATTRIBUTED TO:
 
 
 
 
 
 
 
BENEFITS PAID TO PARTICIPANTS
3,482,239

 
846,923

 
 
 
 
EXCESS CONTRIBUTIONS PAYABLE

 
20,201

 
 
 
 
ADMINISTRATIVE EXPENSES
95,995

 
31,672

 
 
 
 
Total Deductions
3,578,234

 
898,796

 
 
 
 
NET INCREASE PRIOR TO TRANSFER
7,145,310

 
3,563,272

TRANSFER FROM OTHER PLAN

 
15,100,256

NET INCREASE
7,145,310

 
18,663,528

 
 
 
 
NET ASSETS AVAILABLE FOR BENEFITS:
 
 
 
 
 
 
 
Beginning of Period
18,663,528

 

 
 
 
 
End of Period
$
25,808,838

 
$
18,663,528



5



NUVERRA 401(K) PLAN
NOTES TO FINANCIAL STATEMENTS
DECEMBER 31, 2014
NOTE  1
DESCRIPTION OF PLAN
The following description of the Nuverra 401(k) Plan (the “Plan”) provides only general information. Participants should refer to the Plan document for a more complete description of the Plan’s provisions.
General
The Plan is a defined contribution plan that was established on August 1, 2013 to provide benefits to eligible employees. The Plan is subject to the Employee Retirement Income Security Act of 1974 (ERISA). The Employee Benefits Administrative Committee is responsible for the oversight of the Plan.
Eligibility
Any employee who is at least eighteen years old shall be eligible to participate in the salary deferral arrangement in the Plan following completion of sixty days of service. Employees enter the Plan on the first day of the month following the completion of the eligibility requirement. Employees who were eighteen years old and employed on August 1, 2013 were automatically eligible to participate in the Plan.
Contributions
The Plan includes a salary deferral arrangement allowed under Section 401(k) of the Internal Revenue Code (IRC). Eligible participants are permitted to elect to have a percentage of their compensation contributed as pre-tax 401(k) or Roth contributions to the Plan. The Plan includes an auto-enrollment provision whereby all newly eligible employees are automatically enrolled in the Plan unless they affirmatively elect not to participate in the Plan. Automatically enrolled participants have their deferral rate set at 3% of eligible compensation, and their contributions invested in the designated default fund until changed by the participant. Participants who have attained age 50 before the end of the Plan year are eligible to make catch-up contributions.
Nuverra Environmental Solutions, Inc. (“the Company”) may, at its discretion, elect to make a qualified matching contribution to the Plan. For the year ended December 31, 2014 and the five months ended December 31, 2013, the Company’s matching contribution was 100% of the first 3% of employee contributions and 50% of the next 2% of the employee contribution. In March 2015, the Company suspended its matching contribution to the Plan. The Company may re-establish its matching contributions any time at its discretion.
Participants may also contribute amounts representing distributions from other qualified defined benefit or defined contribution plans (rollover). Participants direct the investment of contributions into various investment options offered by the Plan. Contributions are subject to certain Internal Revenue Service (IRS) limitations.
 
Participant Accounts
Each participant’s account is credited with the participant’s contributions, the Company’s matching contribution, and earnings or losses on the participant’s investments in the Plan. Participant accounts are charged with an allocation of administrative expenses that are paid by the Plan. Allocations are based on participant earnings or account balances, or participant transactions, as defined. The benefit to which a participant is entitled is the benefit that can be provided by the participant’s vested account.
Vesting
Participants are immediately vested in their contributions plus actual earnings thereon. Vesting in the Company matching contribution portion of their accounts, plus actual earnings thereon, is based on years of credited service. A participant is 100% vested after three years of credited service. Notwithstanding the above, a participant is fully vested upon reaching normal retirement age, death, or permanent disability.
Notes Receivable from Participants
Participants may borrow from their fund accounts a minimum of $500 up to a maximum equal to the lesser of $50,000 or 50% of their vested account balance. The notes are secured by the balance in the participant’s account

6



and bear interest at a rate commensurate with local prevailing rates as determined quarterly by the Plan administrator. Principal and interest is paid ratably through payroll deductions.
Benefit Payments
Upon termination of service, death, disability, or retirement, a participant may elect to receive the value of the vested interest in his or her account in the form of a lump sum distribution. The Plan allows for in-service distributions if a participant reaches age 65 and hardship distributions subject to Plan provisions. If a participant terminates employment and the participant’s account balance does not exceed $1,000, the Plan administrator will authorize the benefit payment without the participant’s consent.
Forfeited Accounts
Forfeited non-vested accounts are first used to reduce administrative expenses and then are used to reduce future Company contributions. Forfeited non-vested accounts as of December 31, 2014 and 2013 totaled $68,999 and $381,729, respectively. There were $76,602 and $245,000 of forfeitures used to pay administrative expenses (including accrued expenses) and employer contributions (including contributions receivable), respectively, for the year ended December 31, 2014. There were $25,275 and $665,569 of forfeitures used to pay administrative expenses (including accrued expenses) and employer contributions (including contributions receivable), respectively, for the five months ended December 31, 2013.
Diversification
Diversification is offered to participants so that they may have the opportunity to move the value of their investment in the Company’s stock into investments which are more diversified. Participants are entitled to make an election to diversify up to 100% of the value of the Company’s stock in their account.
 
NOTE 2
SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES
Basis of Accounting
The financial statements of the Plan are prepared on the accrual basis of accounting.
Investment contracts held by a defined contribution plan are required to be reported at fair value. However, contract value is the relevant measurement attribute for that portion of the net assets available for benefits of a defined contribution plan attributable to fully benefit-responsive investment contracts because contract value is the amount participants would receive if they were to initiate permitted transactions under the terms of the Plan. The statement of net assets available for benefits presents the fair value of the investment contract as well as the adjustment of the fully benefit-responsive investment contract from fair value to contract value. The statement of changes in net assets available for benefits is prepared using the contract value basis for fully benefit-responsive investment contracts.
Use of Estimates
The preparation of financial statements in accordance with accounting principles generally accepted in the United States of America requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities and changes therein, and disclosure of contingent assets and liabilities. Actual results could differ from those estimates.
Investment Valuation and Income Recognition
The Plan’s investments are reported at fair value. Fair value is the price that would be received to sell an asset or paid to transfer a liability in an orderly transaction between market participants at the measurement date. The Plan’s Investment Committee determines the Plan’s valuation policies utilizing information provided by the investment advisers, custodians, and insurance company. See Note 4 for discussion of fair value measurements.
Purchases and sales of securities are recorded on a trade-date basis. Interest income is recorded on the accrual basis. Dividends are recorded on the ex-dividend date. Net appreciation (depreciation) includes the Plan’s gains and losses on investments bought and sold as well as held during the year.

7



Notes Receivable from Participants
Notes receivable from participants are measured at their unpaid principal balance plus any accrued but unpaid interest. Interest income is recorded on the accrual basis. Related fees are recorded as administrative expenses and are expensed when they are incurred. No allowance for credit losses has been recorded as of December 31, 2014 and 2013. If a participant ceases to make note repayments and the Plan administrator deems the participant note to be in default, the participant note balance is reduced and a benefit payment is recorded.
 
Benefit Payments
Benefits are recorded when paid.
Administrative Expenses
Certain expenses of maintaining the Plan are paid directly by the Company and are excluded from these financial statements. Fees related to the administration of notes receivable from participants and benefit payments are charged directly to the participant’s account and are included in administrative expense. Investment-related expenses are included in net appreciation of fair value of investments.
Subsequent Events
The Plan Administrator has evaluated other events and transactions occurring after the date of the statement of net assets through the date the financial statements were issued, and noted no other events that were subject to recognition or disclosure.
NOTE  3
INVESTMENTS
The following presents investments that represent 5% or more of the Plan’s net assets as of December 31, 2014 and 2013 were as follows:
 
 
2014
 
2013
Vanguard Target Retirement 2030
$
7,124,575

 
$
5,161,668

Vanguard Target Retirement 2020
6,091,234

 
5,211,507

Vanguard Target Retirement 2040
3,569,859

 
2,682,374

Vanguard Target Retirement 2050
2,501,757

 
1,690,703

During 2014 and 2013, the Plan’s investments (including gains and losses on investments bought and sold, as well as held during the year) (depreciated) appreciated as follows:
 
 
2014
 
2013
Collective Fund
$
5,552

 
$
5,502

Mutual Funds
489,859

 
727,808

Equities
(2,185,154
)
 
27,327

Total Net (Depreciation) Appreciation in Fair Value of Investments
$
(1,689,743
)
 
$
760,637

NOTE 4
FAIR VALUE OF INVESTMENTS
Financial Accounting Standards Board (FASB) Accounting Standards Codification (ASC) 820, Fair Value Measurements and Disclosures, provides the framework for measuring fair value. That framework provides a fair value hierarchy that prioritizes the inputs to valuation techniques used to measure fair value. The hierarchy gives the highest priority to unadjusted quoted prices in active markets for identical assets or liabilities (Level 1) and the lowest priority to unobservable inputs (Level 3). The three levels of the fair value hierarchy are described as follows:
Level 1: Inputs to the valuation methodology are unadjusted quoted prices for identical assets or liabilities in active markets that the Plan has the ability to access.
 
Level 2: Inputs to the valuation methodology include:

8



quoted prices for similar assets or liabilities in active markets;
quoted prices for identical or similar assets or liabilities in inactive markets;
inputs other than quoted prices that are observable for the asset or liability;
inputs that are derived principally from or corroborated by observable market data by correlation or other means.
If the asset or liability has a specified (contractual) term, the Level 2 input must be observable for substantially the full term of the asset or liability.
Level 3: Inputs to the valuation methodology are unobservable and significant to the fair market value measurement.
The asset or liability’s fair value measurement level within the fair value hierarchy is based on the lowest level of any input that is significant to the fair value measurement. Valuation techniques maximize the use of relevant observable inputs and minimize the use of unobservable inputs.
Following is a description of the valuation methodologies used for assets measured at fair value.
Mutual Funds: Valued at the daily closing price as reported by the fund. Mutual funds held by the Plan are open-end mutual funds that are registered with the Securities and Exchange Commission. These funds are required to publish their daily net asset value (NAV and to transact at that price). The mutual funds held by the Plan are deemed to be actively traded.
Collective Fund: Valued at the net asset value (NAV) of units of a bank collective trust. The NAV, as provided by the trustee, is used as a practical expedient to estimate fair value. The NAV is based on the fair value of the underlying investments held by the fund less its liabilities. This practical expedient is not used when it is determined to be probable that the fund will sell the investment for an amount different than the reported NAV. Participant transactions (purchased and sales) may occur daily. Were the Plan to initiate a full redemption of the collective trust, the investment advisor reserves the right to temporarily delay withdrawal from the trust in order to ensure that securities liquidations will be carried out in an orderly business manner.
Company Common Stock Funds: Unitized employer stock funds which allow participants the benefits of being invested in Company common stock while allowing for daily trading, similar to a mutual fund. The fund is comprised of the underlying Company stock and a short-term cash component. The short-term cash component provides liquidity for daily trading. The value of a unit reflects the combined fair value of the underlying stock and fair value of the short-term cash position. The fair value of the common stock portion of the fund is based on the closing price as of the last day of the year of the stock on its primary exchange times the number of shares held in the fund. After determining the fair value of the stock portion of the fund, the fair value of the cash position, accrued dividends, expenses and/or other liabilities are calculated and the total (i.e. shareholder equity) is divided by the number of outstanding units. This is the daily net asset value (NAV).

9



The following tables set forth by level, within the fair value hierarchy, the Plan’s assets at fair value as of December 31, 2014:  
 
 
Level 1
 
Level 2
 
Level 3
 
Total
Collective Fund:
 
 
 
 
 
 
 
 
Preservation Fund
 
$

 
$
492,381

 
$

 
$
492,381

Mutual Funds:
 
 

 
 

 
 

 
 

Target Date Funds
 
19,729,064

 

 

 
19,729,064

Fixed Funds
 
149,848

 

 

 
149,848

Growth Funds
 
438,510

 

 

 
438,510

Index Funds
 
348,845

 

 

 
348,845

International Funds
 
106,925

 

 

 
106,925

Value Funds
 
523,017

 

 

 
523,017

Total Mutual Funds
 
21,296,209

 

 

 
21,296,209

Common Stock:
 
 

 
 

 
 

 
 

Nuverra Environmental Solutions
 
1,798,678

 

 

 
1,798,678

Total Investments at Fair Value
 
$
23,094,887

 
$
492,381

 
$

 
$
23,587,268


The following tables set forth by level, within the fair value hierarchy, the Plan’s assets at fair value as of December 31, 2013:
 
 
Level 1
 
Level 2
 
Level 3
 
Total
Collective Fund:
 
 
 
 
 
 
 
 
Preservation Fund
 
$

 
$
709,420

 
$

 
$
709,420

Mutual Funds:
 
 

 
 

 
 

 
 

Target Date Funds
 
15,163,804

 

 

 
15,163,804

Fixed Funds
 
74,795

 

 

 
74,795

Growth Funds
 
237,747

 

 

 
237,747

Index Funds
 
115,344

 

 

 
115,344

International Funds
 
74,853

 

 

 
74,853

Value Funds
 
288,099

 

 

 
288,099

Total Mutual Funds
 
15,954,642

 

 

 
15,954,642

Common Stock:
 
 

 
 

 
 

 
 

Nuverra Environmental Solutions
 
424,039

 

 

 
424,039

Total Investments at Fair Value
 
$
16,378,681

 
$
709,420

 
$

 
$
17,088,101


10



    
The following tables set forth additional disclosures for the fair value measurement of investments in certain entities that calculate net asset value per share (or its equivalent) as of December 31, 2014:
 
 
Fair Value
 
Unfunded
 
Redemption
 
Redemption
Investment Type
 
2014
 
Commitments
 
Frequency
 
Notice Period
Collective Fund:
 
 
 
 
 
 
 
 
Preservation Fund
 
$
492,381

 
$

 
Daily
 
Daily
The following tables set forth additional disclosures for the fair value measurement of investments in certain entities that calculate net asset value per share (or its equivalent) as of December 31, 2013:
 
 
Fair Value
 
Unfunded
 
Redemption
 
Redemption
Investment Type
 
2013
 
Commitments
 
Frequency 
 
Notice Period
Collective Fund:
 
 
 
 
 
 
 
 
Preservation Fund
 
$
709,420

 
$

 
Daily
 
Daily
The collective fund’s (the “Fund”) objective is to maintain safety of principal while obtaining a consistent, low volatility return superior to other high quality alternatives over a full interest rate cycle. To achieve this, the Fund actively manages a diversified portfolio of investment contracts, and the associated portfolio of the underlying assets. However, there is no assurance that this objective can be achieved. All investment contract issuers and securities utilized by the Fund must be rated investment grade by one of the Nationally Recognized Statistical Rating Organizations at the time of purchase.
NOTE  5
RISKS AND UNCERTAINTIES
The Plan invests in various investment securities. Investment securities are exposed to various risks such as interest rate, market, and credit risks. Due to the level of risk associated with certain investment securities, it is at least reasonably possible that changes in the values of the investment securities will occur in the near term and that such changes could materially affect participants’ account balances and the amounts reported in the statement of net assets available for benefits.
 
NOTE 6
PLAN TERMINATION
Although it has not expressed any intent to do so, the Company has the right under the Plan to discontinue contributions at any time and to terminate the Plan subject to the provisions of ERISA. In the event of Plan termination, the participants would become 100% vested in their Company contributions.
NOTE  7
PLAN TAX STATUS
The Plan is placing reliance on an opinion letter dated March 31, 2008 received from the IRS on the prototype plan indicating that the Plan is qualified under Section 401 of the IRC and is therefore not subject to tax under current income tax law. The prototype Plan has been amended since receiving the opinion letter. However, the Plan administrator believes that the Plan is designed, and is currently being operated, in compliance with the applicable requirements of the IRC and, therefore, believes that the Plan is qualified, and the related trust is tax-exempt.
Accounting principles generally accepted in the United States of America require Plan management to evaluate tax positions taken by the Plan and recognize a tax liability (or asset) if the organization has taken an uncertain position that more likely than not would not be sustained upon examination by the IRS. The Plan is subject to routine audits by taxing jurisdictions; however, there are currently no audits for any tax periods in progress.
NOTE  8
PARTY-IN-INTEREST TRANSACTIONS
The plan investments are managed by Wells Fargo and include investments in Company common stock. Wells Fargo is the trustee as defined by the Plan and, therefore, the investment transactions qualify as party-in-interest transactions. Fees incurred by the Plan for the investment management services are included in net appreciation in fair value of the investment, as they are paid through revenue sharing, rather than a direct payment. The Plan

11



sponsor pays directly any other fees related to the Plan’s operations. The quarterly administrative fees to maintain the Plan are paid to Wells Fargo either through forfeitures or directly by the Company.
NOTE  9
TRANSFER OF ASSETS INTO THE PLAN
The $15,100,256 of assets transferred into the Plan represents assets previously held in the Badlands Power Fuels LLC 401(k) Plan. In July of 2013, the Badlands Power Fuels LLC 401(k) Plan resolved to merge with and into the Plan. This change was effective as of August 1, 2013.
 
NOTE 10
RECONCILIATION OF FINANCIAL STATEMENTS TO FORM 5500
The differences between the information reported in the financial statements and the information reported on the Form 5500 arise primarily from presenting the financial statements on the accrual basis of accounting and Form 5500 on the cash basis.
The following is a reconciliation of net assets available for benefits per the financial statements to the Form 5500 as of December 31, 2014 and 2013:
 
2014
 
2013
Net Assets Available for Benefits per the Financial Statements
$
25,808,838

 
$
18,663,528

Add: Administrative Expenses Payable
19,988

 
16,868

Add: Excess Contributions Payable

 
20,201

Less: Employer Match Receivable from Participants
(1,234,194
)
 
(938,794
)
Less: Deemed Distributions Not Yet Offset

 
(7,553
)
Net Assets Available for Benefits per the the Form 5500
$
24,594,632

 
$
17,754,250

The following is a reconciliation of net increase per the financial statements to the Form 5500 for the year ended December 31, 2014 and from inception to December 31, 2013:
 
 
2014
 
2013
Net Increase per the Financial Statements
$
7,145,310

 
$
3,563,272

Add: Current Year Administrative Expenses Payable
19,988

 
16,868

Less: Prior Year Administrative Expenses Payable
(16,868
)
 

Add: Current Year Excess Contributions Payable

 
20,201

Less: Prior Year Excess Contributions Payable
(20,201
)
 

Add: Other Differences

 
513

Less: Current Year Employer Contributions Receivable
(1,234,194
)
 
(938,794
)
Add: Prior Year Employer Contributions Receivable
938,794

 

Less: Current Year Deemed Distributions Not Yet Offset

 
(7,553
)
Add: Prior Year Deemed Distributions Not Yet Offset
7,553

 

Net Increase per Form 5500
$
6,840,382

 
$
2,654,507


 



12



NUVERRA 401(K) PLAN
SCHEDULE H, LINE 4(i) - SCHEDULE OF ASSETS (HELD AT END OF YEAR)
DECEMBER 31, 2014
(a)
 
(b)
 
(c)
 
(d)
 
(e)
 
 
Identity of Issue,
 
 
 
 
 
 
 
 
Borrower, Lessor or
 
 
 
 
 
Current
 
 
Similar Party
 
Description of Investment
 
Cost **
 
Value
 
 
 
 
Collective Fund:
 
 
 
 
*
 
Wells Fargo
 
Stable Return Fund N (at Contract Value)
 
 
 
$
485,550

 
 
 
 
 
 
 
 
 
 
 
 
 
Mutual Funds:
 
 
 
 
 
 
Vanguard
 
Target Retirement 2030
 
 
 
7,124,575

 
 
Vanguard
 
Target Retirement 2020
 
 
 
6,091,234

 
 
Vanguard
 
Target Retirement 2040
 
 
 
3,569,859

 
 
Vanguard
 
Target Retirement 2050
 
 
 
2,501,757

 
 
Vanguard
 
Target Retirement 2010
 
 
 
441,639

 
 
T. Rowe Price
 
Blue Chip Growth
 
 
 
292,601

 
 
JP Morgan
 
Mid Cap Value (Instl)
 
 
 
236,811

 
 
Goldman Sachs
 
Small Cap Value
 
 
 
150,399

 
 
Metropolitan West
 
Total Return Bond I
 
 
 
149,848

 
 
John Hancock
 
Disciplined Value R5
 
 
 
135,807

 
 
Vanguard
 
Small Cap Index/Signal
 
 
 
122,161

 
 
Harbor
 
International/Inst
 
 
 
106,925

 
 
Vanguard
 
500 Index Fund/Signal
 
 
 
94,123

 
 
Janus
 
Enterprise Fund Class I
 
 
 
90,552

 
 
Vanguard
 
Mid-Cap Index/Signal
 
 
 
65,731

 
 
Vanguard
 
Total Intl Stock Index Signal
 
 
 
59,601

 
 
Artisan
 
Small Cap Fund
 
 
 
55,357

 
 
Vanguard
 
Target Retirement Income
 
 
 
7,229

 
 
 
 
   Total Mutual Funds
 
 
 
21,296,209

 
 
 
 
 
 
 
 
 
 
 
 
 
Common Stock:
 
 
 
 
*
 
 
 
Nuverra Environmental Solutions, Inc.
 
 
 
1,798,678

 
 
 
 
 
 
 
 
 
*
 
Participants
 
Participant Loans
 
 
 
 
 
 
 
 
   Rates at 3.25%
 
 
 
1,014,195

 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
$
24,594,632

 
 
 
 
 
 
 
 
 
* Indicates Party-in-Interest
 
 
 
 
 
 
**Cost omitted for participant-directed accounts
 
 
 
 



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