CJ 2017 Annual Report

Years Ended December 31, 2016 2015 $ Change Completion Services: Revenue $ 599,787 $ 1,261,398 $ (661,611) Operating income (loss) $ (306,614) $ (882,786) $ 576,172 Well Support Services: Revenue $ 363,768 $ 459,265 $ (95,497) Operating income (loss) $ (377,707) $ (31,253) $ (346,454) Other Services: Revenue $ 7,587 $ 28,226 $ (20,639) Operating income (loss) $ (51,778) $ (69,129) $ 17,351 Corporate / Elimination: Operating income (loss) $ (133,909) $ (115,154) $ (18,755) Combined: Revenue $ 971,142 $ 1,748,889 $ (777,747) Costs and expenses: Direct costs 947,255 1,523,194 (575,939) Selling, general and administrative expenses 229,267 239,697 (10,430) Research and development 7,718 16,704 (8,986) Depreciation and amortization 217,440 276,353 (58,913) Impairment Expense 436,395 791,807 (355,412) Loss on disposal of assets 3,075 (544) 3,619 Operating income (870,008) (1,098,322) 228,314 Other income (expense): Interest expense, net (157,465) (82,086) (75,379) Other income (expense), net 9,504 8,773 731 Total other expenses, net (147,961) (73,313) (74,648) Income before income taxes (1,017,969) (1,171,635) 153,666 Reorganization items 55,330 — 55,330 Income tax expense (129,010) (299,093) 170,083 Net income $ (944,289) $ (872,542) $ (71,747) Revenue Revenue decreased $777.7 million, or 44.5%, for the year ended December 31, 2016, as compared to the year ended December 31, 2015. The decrease in revenue was primarily due to (i) a decrease of $661.6 million in our Completion Services segment as a result of significantly lower utilization and pricing levels across this segment caused by the extremely competitive market environment given the severe decline in U.S. onshore drilling and completion activity, partially offset by the fact that Completion Services revenue for the corresponding prior year period only included the Nabors Merger completion and production services business (the "C&P Business") revenue from the Merger Effective Time to December 31, 2015. The $95.5 million decrease in revenue in our Well Support Services segment was primarily due to the unprecedented low levels of customer activity during 2016 in areas that typically maintain moderate levels of well support services activity, partially offset by the fact that revenue for the corresponding prior year period only included C&P Business Well Support Services revenue from the Merger Effective Time to December 31, 2015. The $20.6 million decrease in our Other Services segment was primarily due to continued weak demand for our services driven by the low commodity prices characterizing this severe, prolonged industry downturn. 50