CJ 2017 Annual Report

C L E A R F O C U S Strategy Supports Focus on Returns One of the most significant changes made in creating the new C&J is a strategy that supports our focus on meaningful quality returns, not just top-line growth. Concentrating on our core competencies and most profitable opportunities is central to this strategy. With a primary growth focus on well construction and intervention, well completion and well support services in the continental U.S., we made selective acquisitions and divestitures to advance our strategy. In addition to the O-Tex acquisition, which elevated C&J’s cementing business to one of the largest and most heavily concentrated in the continental U.S., we divested certain non-core businesses. Our focused efforts included selling our equipment manufacturing, specialty chemicals and Canadian rig-services business, as well as closing our Middle East operations. The sale of our Canadian rig services, which closed in late October, divested a marginal business that was subject to extreme cyclicality and also provided cash to pursue the growth of our more profitable core businesses. Focus on Technology Our commitment to research and technology development sets us apart from our peers. By focusing on product enhancements that increase our operational capabilities while driving efficiency and delivering cost savings, we improve our competitive position. We also develop technologies that expand our product offerings and enable us to capture profits that previously went to competitors. During 2017, growing demand from our Completion Services division, as well as an expanding product portfolio, drove a significant increase in shipments of perforating products and fracturing-equipment controls. Our Research & Technology (R&T) business was able to supply products to our wireline business that added more than $8 million in EBITDA, as well as to provide controls for our fracturing equipment that saved almost $3 million in upfront capital costs. This, coupled with sales of R&T products to third parties, delivered financial benefits in excess of our R&T spend. Better Business Management A restructuring of our business systems replaced seven different enterprise resource-planning systems with a new, consolidated system. We began this ambitious undertaking in 2016, completed it in 2017 and have continued to make improvements that will maximize the benefits. For many years to come, these efforts will pay off in greater business efficiency, improved controls and more timely delivery of crucial information. 6 C&J ENERGY SERVICES R&T Yields ROI Added >$8 million EBITDA to our wireline business Saved nearly $3 million in upfront fracturing capital costs