Segment and Related Information

Our Company consists of two reportable segments, which offer different products and services to a relatively homogeneous 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 drilling in deep water. These projects require increased monitoring and critical engineering support of the fluids system during the drilling process. In addition, our Fluids Systems offering is expanding into adjacent areas to drilling fluids, including completion and stimulation chemistry, which are typically utilized by customers following 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 provides composite mat rentals, site construction and related site services to customers in various markets including oil and gas exploration and production (“E&P”), electrical transmission & distribution, pipeline, solar, petrochemical and construction across North America and Europe. We also sell composite mats to customers outside of the U.S. and to domestic customers outside of the E&P market. We manufacture 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. The November 2017 acquisition of WSG expanded our range of site construction and related services we offer our customers across the U.S. to include a variety of complementary services to our composite matting systems, including access road construction, site planning and preparation, environmental protection, fluids and spill storage/containment, erosion control, and site restoration services.

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



	Year Ended December 31,
(In thousands)	2017			2016			2015

Revenues
Fluids systems	$	615,803		$	395,461		$	581,136
Mats and integrated services	131,960			76,035			95,729
Total revenues	$	747,763		$	471,496		$	676,865

Depreciation and amortization
Fluids systems	$	21,566		$	20,746		$	22,108
Mats and integrated Services	14,991			14,227			18,869
Corporate office	3,200			2,982			2,940
Total depreciation and amortization	$	39,757		$	37,955		$	43,917

Operating income (loss)
Fluids systems	$	27,580		$	(43,631	)	$	(86,770	)
Mats and integrated services	40,491			14,741			24,949
Corporate office	(36,635		)	(28,323		)	(37,278		)
Operating income (loss)	$	31,436		$	(57,213	)	$	(99,099	)

Segment Assets
Fluids Systems	$	611,455		$	522,488		$	549,827
Mats and Integrated Services	260,931			164,515			172,415
Corporate	30,330			111,180			126,651
Total Assets	$	902,716		$	798,183		$	848,893

Capital Expenditures
Fluids Systems	$	17,589		$	32,310		$	40,533
Mats and Integrated Services	11,956			4,637			27,456
Corporate	1,826			1,493			1,415
Total Capital Expenditures	$	31,371		$	38,440		$	69,404

As a result of the significant declines in industry activity in North America in 2015 and early 2016, we implemented cost reduction programs including workforce reductions, reduced discretionary spending, 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 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

The temporary reduction in salaries, suspension of the Company’s matching contribution to the U.S. defined contribution plan and reduction in cash compensation paid to our Board of Directors were lifted in the second quarter of 2017.

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 included $6.9 million of non-cash impairments in the Asia Pacific region resulting from the continuing unfavorable industry market conditions and outlook for the region in 2016, $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 included 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 included $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)	2017		2016		2015

Revenue
United States	$	460,872	$	214,026	$	384,147
Canada	55,600		34,176		52,851
Algeria	87,975		80,936		65,272
All Other EMEA	102,247		96,654		109,252
Latin America	36,988		41,035		47,240
Asia Pacific	4,081		4,669		18,103
Total Revenue	$	747,763	$	471,496	$	676,865

Long-Lived Assets
United States	$	337,190	$	274,746	$	275,109
Canada	3,993		3,922		552
EMEA	46,269		48,047		50,759
Latin America	2,354		4,842		4,543
Asia Pacific	3,120		1,939		9,731
Total Long-Lived Assets	$	392,926	$	333,496	$	340,694

For 2016, revenue from Sonatrach, our primary customer in Algeria, was approximately 14% of consolidated revenues. For 2017 and 2015 no single customer accounted for more than 10% of our consolidated revenues.