Segment and Related Information

Our Company consists of two reportable segments, which offer different products and services to a relatively homogenous customer base. The reportable segments include: Fluids Systems and Mats and Integrated Services. All intercompany revenues and related profits have been eliminated.

Fluids Systems — Our Fluids Systems business provides drilling fluids products and technical services to customers in the North America, EMEA, Latin America, and Asia Pacific regions. We offer customized solutions for highly technical drilling projects involving complex subsurface conditions, such as horizontal, directional, geologically deep or deep water drilling. These projects require increased monitoring and critical engineering support of the fluids system during the drilling process.

We also have industrial mineral grinding operations for barite, a critical raw material in drilling fluids products, which serve to support our activity in the North American drilling fluids market. We use the resulting products in our drilling fluids business, and also sell them to third party users, including other drilling fluids companies. We also sell a variety of other minerals, principally to third party industrial (non-oil and gas) markets.

Mats and Integrated Services — Our Mats and Integrated Services segment manufactures our DURA-BASE^® Advanced Composite Mats for use in our rental operations as well as for third party sales. Our mats provide environmental protection and ensure all-weather access to sites with unstable soil conditions. We provide mat rentals to customers in the E&P, electrical transmission & distribution, pipeline, solar, petrochemical and construction industries across the U.S., Canada and United Kingdom. We also offer location construction and related services to customers, primarily in the U.S. Gulf Coast region. In addition, we sell composite mats to customers outside of the U.S. and to domestic customers outside of the oil and gas exploration market.

Summarized financial information concerning our reportable segments is shown in the following tables:



	Year Ended December 31,
(In thousands)	2016			2015			2014

Revenues
Fluids systems	$	395,461		$	581,136		$	965,049
Mats and integrated services	76,035			95,729			153,367
Total revenues	$	471,496		$	676,865		$	1,118,416

Depreciation and amortization
Fluids systems	$	20,746		$	22,108		$	22,934
Mats and integrated Services	14,227			18,869			15,507
Corporate office	2,982			2,940			2,734
Total depreciation and amortization	$	37,955		$	43,917		$	41,175

Operating income (loss)
Fluids systems	$	(43,631	)	$	(86,770	)	$	95,600
Mats and integrated services	14,741			24,949			70,526
Corporate office	(28,323		)	(37,278		)	(35,530		)
Operating income (loss)	$	(57,213	)	$	(99,099	)	$	130,596

Segment Assets
Fluids Systems	$	522,488		$	549,827		$	778,148
Mats and Integrated Services	164,515			172,415			175,318
Corporate	111,180			126,651			54,206
Total Assets	$	798,183		$	848,893		$	1,007,672

Capital Expenditures
Fluids Systems	$	32,310		$	40,533		$	36,626
Mats and Integrated Services	4,637			27,456			64,101
Corporate	1,493			1,415			5,215
Total Capital Expenditures	$	38,440		$	69,404		$	105,942

The Consolidated Statements of Cash Flows include $0.9 million in depreciation and amortization expense and capital expenditures of $1.0 million for 2014 related to the Environmental Services business sold in 2014 that are classified as discontinued operations.

In response to the significant declines in industry activity in North America, we implemented cost reduction programs in 2015 including workforce reductions, reduced discretionary spending, and temporary salary freezes for substantially all employees, including executive officers. In September 2015, we also implemented a voluntary early retirement program with certain eligible employees in the United States. As a result of the further declines in activity in the first half of 2016, we implemented further cost reduction actions including additional workforce reductions and beginning in March 2016, a temporary salary reduction for a significant number of North American employees, including executive officers, suspension of the Company’s matching contribution to the U.S. defined contribution plan as well as a reduction in cash compensation paid to our Board of Directors in order to further align our cost structure to activity levels.

As part of these cost reduction programs, we reduced our North American employee base by 626 (approximately 48%) from the first quarter 2015 through the third quarter of 2016, including reductions of 436 employees in 2015 and 190 employees in the first nine months of 2016. As a result of these termination programs, we recognized charges for employee termination costs as shown in the table below:



	Year Ended December 31,
(In thousands)	2016		2015
Cost of revenues	$	3,647	$	5,664
Selling, general and administrative expenses	925		2,499
Total employee termination costs	$	4,572	$	8,163

Fluids systems	$	4,125	$	7,218
Mats and integrated services	285		717
Corporate office	162		228
Total employee termination costs	$	4,572	$	8,163

Accrued employee termination costs at December 31, 2016 and 2015 were $0.3 million and $3.3 million, respectively.

Our 2016 and 2015 operating losses include net charges of $14.8 million and $80.5 million, respectively, resulting from the reduction in value of certain assets, the wind-down of our operations in Uruguay and the resolution of certain wage and hour litigation claims. The Fluids Systems segment operating results included $15.5 million and $75.5 million of these charges in 2016 and 2015, respectively. The remaining $0.7 million benefit and $5.0 million charge was included in Corporate Office expenses in 2016 and 2015, respectively, related to the resolution of certain wage and hour litigation claims.

The $15.5 million of Fluids Systems charges in 2016 includes $6.9 million of non-cash impairments in the Asia Pacific region resulting from the continuing unfavorable industry market conditions and the deteriorating outlook for the region, $4.1 million of charges for the reduction in carrying values of certain inventory, primarily resulting from lower of cost or market adjustments and $4.5 million of charges in the Latin America region associated with the wind-down of our operations in Uruguay, including $0.5 million to write-down property, plant and equipment. The $6.9 million of impairments in the Asia Pacific region includes a $3.8 million charge to write-down property, plant and equipment to its estimated fair value and a $3.1 million charge to fully impair the customer related intangible assets in the region.

The $75.5 million of Fluids Systems charges in 2015 includes $70.7 million of non-cash charges for the impairment of goodwill, following our November 1, 2015 annual evaluation, a $2.6 million non-cash impairment of assets, following our decision to exit a facility, and a $2.2 million charge to reduce the carrying value of diesel-based drilling fluid inventory, resulting from lower of cost or market adjustments.

In 2016, a total of $6.7 million of these charges are reported in impairments and other charges with the remaining $8.1 million reported in cost of revenues including the $4.1 million of charges for the write-down of inventory and $4.0 million of the Uruguay exit costs. In 2015, a total of $78.3 million of these charges are reported in impairments and other charges with the remaining $2.2 million of charges for the write-down of inventory being reported in cost of revenues.

As described in Note 1, we revised our estimated useful lives and end of life residual values for composite mats included in our rental fleet as of January 1, 2016 resulting in a decrease in depreciation expense of approximately $6.1 million for the year ended December 31, 2016.

The following table sets forth geographic information for our operations. Revenues by geographic location are determined based on the operating location from which services are rendered or products are sold. Long-lived assets include property, plant and equipment and other long-term assets based on the country in which the assets are located.



	Year Ended December 31,
(In thousands)	2016		2015		2014

Revenue
United States	$	214,026	$	384,147	$	748,845
Canada	34,176		52,851		79,516
Algeria	80,936		65,272		58,417
All Other EMEA	96,654		109,252		118,827
Latin America	41,035		47,240		85,244
Asia Pacific	4,669		18,103		27,567
Total Revenue	$	471,496	$	676,865	$	1,118,416

Long-Lived Assets
United States	$	274,746	$	275,109	$	294,762
Canada	3,922		552		10,044
EMEA	48,047		50,759		55,560
Latin America	4,842		4,543		6,635
Asia Pacific	1,939		9,731		25,991
Total Long-Lived Assets	$	333,496	$	340,694	$	392,992

For 2016, revenue from Sonatrach, our primary customer in Algeria, was approximately 14% of consolidated revenues. For 2015 and 2014, no single customer accounted for more than 10% of our consolidated revenues.