

PART I
	~~Item 1. Business~~	1

	~~Item 1A. Risk Factors~~	10

	~~Item 1B. Unresolved Staff Comments~~	18

	~~Item 2. Properties~~	18

	~~Item 3. Legal Proceedings~~	18

	~~Item 4. [Reserved]~~

Item 1.	Business	2

Item 1A.	Risk Factors	16

Item 1B.	Unresolved Staff Comments	26

Item 2.	Properties	26

Item 3.	Legal Proceedings	27

Item 4.	Mine Safety Disclosure	27

Item 4A.	Executive Officers of the Registrant	19 27

PART II

	~~Item 5. Market for Registrant’s Common Equity, Related Stockholder Matters~~	20
	~~and Issuer Purchases of Equity Securities~~

Item 5.	~~Item 6. Selected Financial Data~~ Market for Registrant’s Common Equity, Related Stockholder Matters and Issuer Purchases of Equity Securities	23 29

Item 6.	Selected Financial Data	33

Item 7.	Management’s Discussion and Analysis of Financial Condition and Results of Operations	24 34

	Item 7A.	Quantitative and Qualitative Disclosures about Market Risk	42 50

	Item 8.	Financial Statements and Supplementary Data	44 52

		INDEX TO CONSOLIDATED FINANCIAL STATEMENTS	44 52

	Item 9.	Changes in and Disagreements with Accountants on Accounting and Financial Disclosure	78 88

	Item 9A.	Controls and Procedures	78 88

	Item 9B.	Other Information	78 88

PART III

	~~Item 10. Directors, Executive Officers and Corporate Governance~~	79

Item 10.	~~Item 11.~~ Directors, Executive ~~Compensation~~Officers and Corporate Governance	79 89

Item 11.	Executive Compensation	89

Item 12.	Security Ownership of Certain Beneficial Owners and Management and Related Stockholder Matters	79 89

	Item 13.	Certain Relationships and Related Transactions, and Director Independence	79 89

	Item 14.	Principal Accountant Fees and Services	79 89

PART IV

	~~Item 15. Exhibits and Financial Statement Schedules~~	80

~~SIGNATURES~~Item 15.	81 Exhibits and Financial Statement Schedules	90

SIGNATURES		91

Note About Forward-Looking Information

The Private Securities Litigation Reform Act of 1995 provides a “safe harbor” for forward-looking statements. ~~The Company makes~~We make forward-looking statements in this Annual Report on Form 10-K that represent ~~the Company’s~~our beliefs or expectations about future events or financial performance. These forward-looking statements are based on information currently available to ~~the Company~~us and on management’s beliefs, assumptions, estimates and projections and are not guarantees of future events or results. When used in this report, the words “anticipate,” “estimate,” “believe,” “plan,” “intend,” “may,” “will” and similar expressions are intended to identify forward-looking statements, but are not the exclusive means of identifying such ~~state ments.~~statements. Such statements are subject to known and unknown risks, uncertainties and assumptions, including those referred to in the “Risk Factors” section of this Annual Report on Form 10-K for the year ended December 31, ~~2010.~~2013. In light of these risks, uncertainties and assumptions, the forward-looking events discussed may not occur. In addition, our actual results may vary materially from those anticipated, estimated, suggested or projected. Except as required by law, we do not assume a duty to update forward-looking statements, whether as a result of new information, future events or otherwise. Investors should, however, review additional disclosures made by ~~the Company~~us from time to time in ~~its~~our periodic filings with the Securities and Exchange Commission. Please use caution and do not place reliance on forward-looking statements. All forward-looking statements made by ~~the Company~~us in this Annual Report on Form 10-K are qualified by these cautionary statements.

PART I

Item 1. ~~Business.~~Business

Unless otherwise indicated, the terms “Aegion Corporation,” “Aegion,” “the Company,” “we,” “our” and “us” are used in this report to refer to Aegion Corporation or one more of our consolidated subsidiaries or to all of them taken as a whole. We are incorporated in the State of Delaware. We maintain executive offices at 17988 Edison Avenue, Chesterfield, Missouri 63005. Our telephone number is (636) 530-8000 or toll free at (800) 325-1159. Our website address is Aegion.com. Our common shares, $.01 par value, are traded on The Nasdaq Global Select Market under the symbol “AEGN”. Our fiscal year ends on December 31 of each calendar year.

Overview

We are a ~~leading worldwide provider of~~global leader in infrastructure protection and maintenance, providing proprietary technologies and services ~~for rehabilitating sewer,~~to: (i) protect against the corrosion of industrial pipelines; (ii) rehabilitate and strengthen water, wastewater, energy and mining piping systems and ~~the corrosion protection~~buildings, bridges, tunnels and waterfront structures; and (iii) utilize integrated professional services in engineering, procurement, construction, maintenance, and turnaround services for a broad range of ~~industrial pipelines. We offer one of the broadest portfolios of cost-effective solutions for rehabilitating aging or deteriorating pipelines and protecting new pipelines from corrosion.~~energy related industries. Our business activities include ~~research and development,~~ manufacturing, distribution, maintenance, construction, installation, coating and insulation, cathodic protection, research and development and licensing. Our acquisition of Brinderson, L.P. and related entities (“Brinderson”) on July 1, 2013 opens new markets for us through the maintenance, engineering and construction services for downstream and upstream facilities in the North American oil and gas market. Our products and services are currently utilized and performed in more than 7080 countries across six continents. We believe that the depth and breadth of our products and services ~~platform~~ make us a leading “one-stop” provider for the world’s ~~pipeline~~infrastructure rehabilitation and protection needs.

Our Company is primarily built on the premise that it is possible to use technology to extend the structural design life and maintain, if not improve, the performance of infrastructure, mostly pipe. We are proving that this expertise can be applied in a variety of markets to protect pipelines in oil, gas, mining, wastewater, water applications and extending this to the rehabilitation and maintenance of commercial structures. Many types of infrastructure must be protected from the corrosive and abrasive materials that pass through or near them. Our expertise in non-disruptive corrosion engineering and abrasion protection is now wide-ranging, opening new markets for growth. We have ~~been~~a long history of product development and intellectual property management. We manufacture most of the engineered solutions we create as well as the specialized equipment required to install them. Finally, decades of experience give us an ~~innovator~~advantage in understanding municipal, energy, mining, industrial and commercial customers. Strong customer relationships and brand recognition allow us to support the ~~markets we serve since our inception. In 1971, we~~expansion of existing and innovative technologies into new high growth end markets.

We originally incorporated in Delaware in 1980 to act as the exclusive United States licensee of the Insituform^® cured-in-place pipe (“CIPP”) process, which Insituform’s founder invented ain 1971. The Insituform^® CIPP process served as the first trenchless technology for rehabilitating sewer pipelines ~~that enables~~and has enabled municipalities and private industry to avoid the extraordinary expense and extreme disruption that can result from conventional “dig-and-replace” methods. For over 40 years, we have maintained our leadership position in the CIPP market from manufacturing, to technological innovations and market share.

In order to strengthen our ability to service the emerging demands of the infrastructure protection market and to better position our Company for sustainable growth, we embarked on a diversification strategy in 2009 to expand our product and service portfolio

and our geographical reach. Through a series of strategic initiatives and key acquisitions, we now possess a broad portfolio of cost-effective solutions for rehabilitating and maintaining aging or deteriorating infrastructure and protecting new infrastructure from corrosion worldwide.

We are organized into four reportable segments: Energy and Mining; North American Water and Wastewater; International Water and Wastewater; and Commercial and Structural. We regularly review and evaluate our reportable segments. Market changes between the segments are typically independent of each other, unless a macroeconomic event affects the water and wastewater rehabilitation markets, the oil, mining and gas markets and the commercial and structural markets concurrently. These changes exist for a variety of reasons, including, but not limited to, local economic conditions, weather-related issues and levels of government funding.

Our ~~platform has grown~~long-term strategy consists of:

expanding our position in the growing and profitable energy and mining sector through organic growth, selective acquisitions of companies, formation of strategic alliances and by conducting complimentary product and technology acquisitions;

capitalizing on energy and mining opportunities afforded by “nested” customer relationships — fostering growth across our subsidiaries, increasing cross selling opportunities and generating a greater stream of recurring revenues, thereby reducing project volatility;

optimizing our water and wastewater rehabilitation operations by: (i) improving project execution, cost management practices, including the reduction of redundant fixed costs, and product mix; (ii) identifying opportunities to ~~include~~streamline key management functions and processes to improve our profitability; and (iii) strongly emphasizing higher return manufacturing operations;

growing market opportunities in the commercial and structural infrastructure sector through: (i) continued customer acceptance of current products and ~~services for the~~technologies; (ii) expansion of our product and service offerings with respect to protection, rehabilitation and restoration of a broader group of infrastructure assets; and (iii) leveraging our premier brand and experience of successfully innovating and delivering technologies and services through selective acquisitions of companies and technologies and through strategic alliances; and

expanding all of our businesses in key emerging markets such as Asia and the Middle East.

Today our diverse portfolio of full service solutions includes:

Cathodic Protection and Coating Services for Corrosion Control and Infrastructure Rehabilitation: Through our subsidiary, Corrpro Companies, Inc. (“Corrpro”) and its affiliated companies, we offer corrosion protection solutions, most notably through cathodic protection, a time tested pipeline corrosion mitigation technology that is mandated by regulatory rules in many types of ~~new and existing water, oil, gas, mineral and chemical pipelines.~~

~~We were incorporated in Delaware in 1980, under the name Insituform of North America, Inc. We were originally formed to act as the exclusive licensee of the Insituform~~® cured-in-place pipe (“CIPP”) process in most of the United States. When we acquired our licensor in 1992, our name changed to Insituform Technologies, Inc. Around that same time, we also acquired United Pipeline Systems Inc.pipeline systems, through which we provide ~~polyethylene pipe lining solutions. Our business model has evolved from purely licensing technology~~engineering and ~~manufacturing materials to performing~~inspection services by National Association of Corrosion Engineers International (NACE) trained and certified inspectors (one of the ~~entire Insituform~~® CIPP process and other trenchless technologies and rehabilitating and performing corr osion protection services for industrial pipelines in most geographic locations. Our business has also incorporated extensive research and development activities.

~~Recent Acquisitions/Strategic Initiatives~~

~~In early 2009, we expanded our operations~~largest independent consulting corrosion engineering organizations in the ~~energy~~world), project management, training, research, testing and ~~mining sector~~design, consultation and installation services to ~~include pipe coating~~the following markets: pipeline, refinery, above and underground storage tanks, water/wastewater structures, concrete infrastructure and offshore and marine structures. Corrpro also offers a full line of superior quality corrosion control and cathodic protection ~~services. On February 20, 2009,~~materials, which are ANSI/NSF 61 classified for drinking water system components. Through our acquisition of Hockway Middle East FZE in 2011, we ~~acquired~~have expanded our cathodic protection capabilities in the ~~business~~Middle East. Hockway offers a complete cathodic protection package from initial investigative survey through engineering design, manufacture of equipment, site installation and commissioning of systems with subsequent planned operational inspection and maintenance.

Through our subsidiary, The Bayou Companies, LLC and its related entities (“Bayou”), we provide products and services to protect pipes primarily for the oil and gas industries from corrosion and to provide flow assurance. We accomplish this through external and internal coatings utilizing fusion bonded epoxy (FBE), concrete for buoyancy reduction, extruded polyethylene for additional protection, insulation coating for thermal control and field joint coating for corrosion protection of fittings, values and other primary sources for metal corrosion. Bayou also provides custom coating services on pipe bends, fittings, fabricated spools, valves and short runs of straight pipe for oil, gas and potable water services, as well as onshore or offshore fabrication and welding services. We also offer a proprietary robotic pipe coating and inspection technology for internal and external welded pipe field joints and rebar coating through our subsidiary CRTS, Inc. (“CRTS”).

Our ~~Bayou business~~cathodic protection and coatings products are applicable worldwide, with a focus on the Gulf of Mexico, the Canada Oil Sands, North America shale plays, the Middle East and Asia Pacific.

Construction and Maintenance of Upstream and Downstream Facilities: Through our Brinderson subsidiary, we are a leading integrated service provider of maintenance, construction, engineering and turnaround activities for the upstream and downstream oil and gas markets. Primarily focused on serving large oil and gas customers in California, Brinderson’s competitive advantages include its industry-leading safety record, a strong reputation for reliability and quality and comprehensive solutions

needed for major refinery maintenance, repairs and retrofits. These core competencies position Brinderson to meet the growing demand for non-discretionary operating and maintenance expenditures.

HDPE Pipe Lining for Corrosion Control, Abrasion Protection and Pipeline Rehabilitation: Through our subsidiary United Pipeline Systems, Inc. (“United Pipeline Systems”), we provide polyethylene pipe lining solutions to the oil and gas, mining and chemical industrial pipeline markets. United Pipeline Systems proprietary high-density polyethylene (HDPE) Tite Liner^® installation system provides chemical, corrosion and erosion resistance for numerous pipeline applications. Our HDPE system can rehabilitate pipelines for a fraction of the cost and time associated with industrial pipeline replacement and has application in the rehabilitation of pressure pipes in the municipal marketplace. We offer our HDPE lining protection products and services worldwide, with a strategic focus of expanding our presence in key end markets with sustainable capital spend on oil, gas and mining activities.

Rehabilitation of Water and Wastewater Pipelines: Through our Insituform^® family of companies, we offer the manufacture and installation of cost-effective solutions to remediate operational, health, regulatory and environmental problems resulting from aging and defective water and wastewater pipelines. Our Insituform^® CIPP product is a jointless, seamless pipe-within-a-pipe with the capability to rehabilitate pipes in various diameters. Our Insituform^® CIPP process provides a more affordable alternative to dig-and-replace methods and is a less disruptive and more environmentally friendly method for pipe repairs. As mentioned above, we have maintained our leadership position in the CIPP market through our ISO 9001:2008 certified manufacturing to technological innovations and market share for the past 40 years. Our Insituform^® portfolio of products and services are utilized worldwide.

Fiber Reinforced Polymer Systems for Rehabilitation and Strengthening: Through our subsidiaries, Fyfe Co. LLC and Fibrwrap Construction Services, Inc. and other affiliated companies, we offer the manufacture and installation of fiber reinforced polymer (FRP) systems for strengthening, repair and restoration of masonry, concrete, steel and wooden infrastructures applicable worldwide. Our infrastructure markets include large diameter pipelines, buildings, transportation assets, industrial developments, and waterfront structures, of which the pipeline market currently makes up the largest share. One of the key features of the Fibrwrap^® technology is its capability to withstand seismic and force loads, providing a unique advantage over conventional rehabilitation methods. Fibrwrap^® systems consist of the proprietary (or patented) and specialized Tyfo^® carbon, glass, aramid and hybrid lightweight and low profile woven fabrics combined with the proprietary Tyfo^® resin and epoxy polymers which, in unique combination, create the tested, proven and certified Fibrwrap^® advanced composite systems. Fibrwrap^® systems are specifically engineered, manufactured and installed to solve a host of structural deficiencies or demands in existing structures. We offer personalized technical support to our customers through a highly trained structural engineering team that assists in all phases of a potential project, from the initial design to implementation and installation. While the majority of our Fibrwrap business is in North America, where we believe there is a fast growing addressable market, there is a strong and growing acceptance of our products and services internationally, specifically in the Asia-Pacific region.

Corporate Reorganization

Recognizing that the breadth of our offerings expanded beyond our flagship Insituform^® brand, which constituted less than half of our revenue in 2011, we reorganized Insituform Technologies, Inc. (“Insituform”), our parent company at the time, into a new holding company structure (“Corporate Reorganization”) in October 2011. Aegion became the new parent company and Insituform became a wholly owned subsidiary of Aegion. Other expected benefits to be derived from the new holding company structure include improved tax efficiencies, facilitation of cost-effective repatriations of cash to the United States and better management of legal liabilities. Aegion reflects our mission of extending our leadership capabilities to furnish products and services to provide long-term protection for water and wastewater pipes, oil and gas pipelines, as well as commercial and governmental structures and transportation infrastructure.

Strategic Initiatives and Key Acquisitions to Support our Diversification Strategy

We operate in three distinct markets: energy and ~~infrastructure companies~~mining; water and wastewater; and commercial and structural services. Management organizes itself around differences in products and services, as well as by geographic areas. Within the water and wastewater market, we operate in two distinct geographies: North America and internationally outside of North America. As such, we organized into four reportable segments: Energy and Mining; North American Water and Wastewater; International Water and Wastewater; and Commercial and Structural. Each segment is regularly reviewed and evaluated separately.

During the first quarter of 2013, we re-organized our Water and Wastewater businesses to bring all of its operations under one central leadership team. We hired a Senior Vice President-Global Water and Wastewater and a Vice President of International Water and Wastewater. The Vice President of International Water and Wastewater is responsible for the European Water and Wastewater operations as well as the Asia-Pacific Water and Wastewater operations and reports directly to the Senior Vice President-Global Water and Wastewater. In connection with this management re-organization, we combined our European Water and Wastewater and Asia-Pacific Water and Wastewater reportable segments into one reportable segment titled International Water and Wastewater.

Energy and Mining Segment

On July 1, 2013, we acquired Brinderson, a leading integrated service provider of maintenance, construction, engineering and turnaround activities for the upstream and downstream oil and gas markets. Primarily focused on serving large oil and gas customers in California, Brinderson’s competitive advantages include its industry-leading safety record, a strong reputation for reliability and quality and comprehensive solutions needed for upstream oil field and downstream major refinery maintenance, repairs and retrofits. These core competencies position Brinderson to meet the growing demand for non-discretionary operating and maintenance expenditures. The transaction purchase price was $150.0 million, which resulted in a cash purchase price at closing of $147.6 million after preliminary working capital adjustments and an adjustment to account for cash held in the business at closing. The cash purchase price was funded by the Company’s new $650.0 million senior secured credit facility as discussed in Note 5 to the consolidated financial statements contained in this report.

During the second quarter of 2013, our Board of Directors approved a plan of liquidation for our Bayou Welding Works (“BWW”) business in an effort to improve our overall financial performance and align the operations with our long-term strategic initiatives. BWW provided specialty welding and fabrication services from its facility in New Iberia, Louisiana. Financial results for BWW were part of our Energy and Mining segment for financial reporting purposes. BWW ceased bidding new work and substantially completed all ongoing projects during the second quarter of 2013. As a result of the closure of BWW, we recognized a pre-tax, non-cash charge of approximately $3.9 million ($2.4 million after-tax, or $0.06 per diluted share) to reflect the impairment of goodwill and intangible assets. We also recognized additional non-cash impairment charges for equipment and other assets of approximately $1.1 million on a pre-tax basis ($0.7 million on an after-tax basis, or $0.02 per diluted share). We expect the cash liquidation value to approximate net asset value. Net asset value is determined using recorded amounts for assets and liabilities, which are based on Level 3 inputs as defined in Note 10 to the consolidated financial statements contained in this report. We also incurred cash charges to exit the business of approximately $0.1 million on a pre-tax and post-tax basis, which included property, equipment and vehicle lease termination and buyout costs, employee termination benefits and retention incentives, among other ancillary shut-down expenses. Final liquidation of BWW’s assets is expected to occur by year-end 2014.

In March 2012, we organized United Special Technical Services LLC (“USTS”), a joint venture located in the Sultanate of Oman between our United Pipeline Systems division and Special Technical Services LLC, an Omani company (“STS”), for the purpose of executing pipeline, piping and flow line high-density polyethylene lining services throughout the Middle East and Northern Africa. We hold a fifty-one percent (51%) equity interest in USTS and STS holds the remaining forty-nine percent (49%) equity interest. USTS initiated operations in the second quarter of 2012.

In October 2011, we organized UPS-Aptec Limited, a joint venture in the United Kingdom between United Pipeline Systems International, Inc., a subsidiary of our Company (“UPS-International”), and Allied Pipeline Technologies, SA, a Chilean company (“APTec”). UPS-International owns fifty-one percent (51%) of the joint venture and APTec owns the remaining forty-nine percent (49%). On October 21, 2011, the joint venture was awarded a $67.3 million contract for the installation of high-density polyethylene liners in approximately 135 miles of slurry pipelines located in Morocco. The project began in the fourth quarter of 2011 and was substantially completed in the second half of 2013.

In August 2011, we purchased the assets of Hockway Limited, a company organized under the laws of England, and the capital stock of Hockway Middle East FZE (formerly known as Hockway Middle East FZC), a company organized under the laws of the United Arab Emirates (collectively, “Hockway”). Hockway was established in the United Kingdom in 1975 to service the cathodic protection requirements of British engineers working in the Middle East. In 2009, Hockway established operations in Dubai, United Arab Emirates. Hockway provides both onshore and offshore cathodic protection services in addition to manufacturing a wide array of cathodic protection products. The purchase price was $4.6 million in cash at closing with Hockway shareholders able to earn up to an additional $1.5 million upon the achievement of certain performance targets over the three-year period ending December 31, 2013. These performance targets were not achieved and no earnout was due to sellers. The original purchase price was funded out of the Company’s cash balances.

In June 2011, we acquired all of the outstanding stock of CRTS, Inc. (“CRTS”). The purchase price at closing included a provision whereby CRTS shareholders would be able to earn up to an additional $15.0 million upon the achievement of certain performance targets over the three-year period ended December 31, 2013 (the “CRTS earnout”). During 2013, we paid $2.1 million to the sellers relating to a portion of the performance target being met for 2012. During 2013 and 2012, we also reversed $3.9 million and $8.2 million, respectively, related to the CRTS earnout, due to operating results being below the target amounts in the purchase agreement. As of December 31, 2013, the Company calculated the remaining fair value of the contingent consideration arrangement to be $0.7 million, which is based on Level 3 inputs as defined in Note 10 to the consolidated financial statements contained in this report.

In June 2011, we created a joint venture in Saudi Arabia between Corrpro and Saudi Trading & Research Co., Ltd. (“STARC”). Based in Al-Khobar, Saudi Arabia since 1992, STARC delivers a wide range of products and services for its clients in the oil, gas, power and desalination industries. The joint venture, Corrpower International Limited (“Corrpower”), which is seventy percent (70%) owned by Corrpro and thirty percent (30%) owned by STARC, provides a fully integrated corrosion protection product and

service offering to government and private sector clients throughout the Kingdom of Saudi Arabia, including engineering, product and material sales, construction, installation, inspection, monitoring and maintenance. The joint venture serves as a platform for the continued expansion of our Energy and Mining group in the Middle East. Corrpower commenced providing corrosion prevention services in early 2012.

In April 2011, we organized a joint venture, Bayou Wasco Insulation, LLC (“Bayou Wasco”), to provide insulation services primarily for projects located in the United States, Central America, the Gulf of Mexico and North America. Bayou’s products and services include internal and external pipeline coating, lining, weighting and insulation. Bayou also provides specialty fabrication and services for offshore deepwater installations, including project management and logistics.

On March 31, 2009, we acquired Corrpro Companies, Inc. and its subsidiaries (“Corrpro”). Our Corrpro business offers a comprehensive line of fully-integrated corrosion protection products and services including: (i) engineering; (ii) product and material sales; (iii) construction and installation; (iv) inspection, monitoring and maintenance; and (v) coatings. Corrpro’s specialty in the ~~corrosion control market is cathodic protection, an electrochemical process that prevents corrosion in new structures and stops the corrosion process for existing structures.~~

On June 30, 2009, we acquired the shares of our joint venture partner, VSL International Limited, in Insituform Pacific Pty Limited (“Insituform-Australia”) and Insituform Asia Limited (“Insituform-Hong Kong”), our former Australian and Hong Kong joint ventures, respectively, in order to expand our operations in both Australia and Hong Kong. These entities perform sewer and water pipeline rehabilitation services.

On October, 30, 2009, we expanded our coating and insulation services in Canada with our acquisition of the pipe coating and insulation facility and related assets of Garneau, Inc., through our joint venture Bayou Perma-Pipe Canada, Ltd. (“BPPC”).Caribbean. We hold a fifty-one percent (51%) majority interest in ~~BPPC. BPPC serves as our pipe coating~~Bayou Wasco, while Wasco Energy Ltd., a subsidiary of Wah Seong Corporation Berhad (“Wasco Energy”), owns the remaining interest.

In April 2011, we also expanded Corrpro and ~~insulation~~United Pipeline Systems operations in ~~Canada.~~

~~On December 3, 2009, we acquired~~Asia and Australia through our joint venture, WCU Corrosion Technologies Pte. Ltd., located in Singapore (“WCU”). WCU offers our Tite Liner^® process in the twenty-five percent (25%) noncontrolling interest in our European CIPP tube manufacturing operation, now known as Insituform Linings Limited (“Insituform Linings”) that had been owned by Per Aarsleff A/S, a Danish company. Insituform Linings manufactures CIPP tube for our European sewer rehabilitation operationoil and ~~third-party sales.~~

On January 29, 2010, we acquired our Singapore CIPP licensee, Insitu Envirotech (S.E. Asia) Pte Ltd (“Insituform-Singapore”), in order to expand our Singapore operations. Insituform-Singapore performs sewer rehabilitationgas sector and onshore corrosion services, in ~~Southeast Asia.~~

~~In February 2010, we expanded our pipe coating services through the formation~~each of ~~Delta Double Jointing L.L.C. (“Bayou Delta”) through which we offer pipe jointing~~Asia and ~~other services for the steel-coated pipe industry. The Company, through its Bayou subsidiary, owns~~Australia. We hold a ~~fifty-nine~~forty-nine percent ~~(59%~~(49%) ownership interest in ~~Bayou Delta with~~WCU, while Wasco Energy owns the remaining ~~forty-one percent (41%) ownership belonging to~~interest. WCU immediately began marketing its products and services.

On February 20, 2014, we received formal notice from our equity partner in Bayou Coating, L.L.C. (“Bayou Coating”), ~~which the Company, through~~Stupp Brothers Inc. (“Stupp”), that Stupp was exercising its option to acquire our equity interests in Bayou ~~subsidiary, holds a~~Coating at forty-nine percent (49%) of the book value of Bayou Coating, as of December 31, 2013, with such book value to be determined on the basis of Bayou Coating’s federal information tax return for 2013. We currently expect this transaction to close on March 31, 2014. We had previously received an indication from Stupp of its intent to exercise such option and, in the second quarter of 2013 in connection with such indication, recognized a non-cash charge of $2.7 million ($1.8 million post-tax) related to the goodwill allocated to the joint venture as part of the purchase price accounting associated with our 2009 acquisition of The Bayou Companies, LLC (“Bayou”). The non-cash charge represents our current estimate of the difference between the carrying value of the investment on our balance sheet and the amount we will receive in connection with the exercise. We do not expect any additional material impacts to our consolidated balance sheet related to the consummation of Stupp’s exercise of this option.

International Water and Wastewater Segment

In June 2013, we sold our fifty percent (50%) interest in Insituform Rohrsanierungstechniken GmbH (“Insituform-Germany”) to Per Aarsleff A/S, a Danish company (“Aarsleff”). Insituform-Germany, a company that was jointly owned by Aegion and Aarsleff, is active in the business of no-dig pipe rehabilitation in Germany, Slovakia and Hungary. The sale price was €14 million, approximately $18.3 million. The sale resulted in a gain on the sale of approximately $11.3 million (net of $0.5 million of transaction expenses) recorded in other income (expense) on the consolidated statement of operations. In connection with the sale, Insituform-Germany also entered into a tube supply agreement with the Company whereby Insituform-Germany will purchase on an annual basis at least GBP 2.3 million, approximately $3.6 million, of felt cured-in-place pipe (“CIPP”) liners during the two-year period from June 26, 2013 to June 30, 2015.

In November 2012, we acquired the outstanding shares of our joint venture partner, SPML Infra Limited (“SPML”), an unaffiliated Indian contractor, in Insituform Pipeline Rehabilitation Private Limited (“Insituform-India”) in order to continue to pursue business opportunities in India involving CIPP installations and third party tube sales, as well as to promote our other products and services. The purchase price was 20,000 Indian Rupee. In addition, we acquired SPML’s interest in four contractual joint ventures we had previously entered into with SPML in India for a purchase price of 5,000 Indian Rupee. Insituform-India is now a wholly owned subsidiary of our Company.

Commercial and Structural Segment

In April, 2012, we purchased Fyfe Group’s Asian operations (“Fyfe Asia”), which included all of the equity ~~interest.~~interests of Fyfe Asia Pte. Ltd, a Singaporean entity (and its interest in two joint ventures located in Borneo and Indonesia), Fyfe (Hong Kong) Limited, Fibrwrap Construction (M) Sdn Bhd, a Malaysian entity, Fyfe Japan Co. Ltd, a Japanese entity, and Fibrwrap Construction Pte. Ltd and Technologies & Art Pte. Ltd., Singaporean entities. Customers in India and China are served through a product supply and license arrangement. Fyfe Asia provides Fibrwrap^® installation services throughout Asia, as well as provides product and engineering support to installers and applicators of fiber reinforced polymer systems in Asia. The cash purchase price at closing was $40.7 million. The purchase price was funded out of our cash balances and by borrowing $18.0 million against our line of credit.

In January 2012, we purchased Fyfe Group’s Latin American operations (“Fyfe LA”), which included all of the equity interests of Fyfe Latin America S.A., a Panamanian entity (and its interest in various joint ventures located in Peru, Costa Rica, Chile and Colombia), Fyfe - Latin America S.A. de C.V., an El Salvadorian entity, and Fibrwrap Construction Latin America S.A., a Panamanian entity. Fyfe LA provides Fibrwrap^® installation services throughout Latin America, as well as product and engineering support to installers and applicators of fiber reinforced polymer systems in Latin America. The cash purchase price at closing was $2.3 million and was funded out of our cash balances. During the first quarter of 2012, we paid the sellers an additional $1.1 million based on a preliminary working capital adjustment. An annual payout can be earned based on the achievement of certain performance targets in each year over the three-year period ending December 31, 2014. No annual payout has been earned to date

as the performance targets have not been met. As ~~used~~of December 31, 2013, we calculated the fair value of the contingent consideration arrangement to be zero, which is based on Level 3 inputs as defined in Note 10 to the consolidated financial statements contained in this ~~Annual Report~~report.

In August 2011, we purchased the North American business of Fyfe Group, LLC (“Fyfe NA”) for a purchase price at closing of $115.8 million, subject to working capital adjustments calculated from an agreed upon target, which was funded by borrowings from our credit facility. Fyfe NA, based in San Diego, California, is a pioneer and industry leader in the development, manufacture and installation of FRP systems for the structural repair, strengthening and restoration of pipelines (water, wastewater, oil and gas), buildings (commercial, federal, municipal, residential and parking structures), bridges and tunnels and waterfront structures. Fyfe NA has a comprehensive portfolio of patented and other proprietary technologies and products, including its Tyfo^® Fibrwrap^® System, the first carbon fiber solution on ~~Form 10-K,~~ the ~~terms “Company”~~market that complies with 2009 International Building Code requirements. Fyfe NA’s product and ~~“Insituform Technologies” refer to Insituform Technologies, Inc.~~service offering also includes pipeline rehabilitation, concrete repair, epoxy injection, corrosion mitigation and ~~unless the context otherwise requires, its direct and indirect wholly-owned subsidiaries.~~specialty coatings services.

Available Information

Our website is ~~www.insituform.com~~www.aegion.com. We make available on this website under “Investors – SEC,” free of charge, our proxy statements used in conjunction with stockholder meetings, annual reports on Form 10-K, quarterly reports on Form 10-Q, current reports on Form 8-K and Section 16 beneficial ownership reports (as well as any amendments to those reports) as soon as reasonably practicable after we electronically file such material with, or furnish it to, the Securities and Exchange Commission. In addition, our Code of Ethics for our Chief Executive Officer, Chief Financial Officer and senior financial employees, our Code of Conduct applicable to all of our officers, directors and employees, our Corporate Governance Guidelines and our Board committee charters are available, free of charge, on our website under “Investors – Corporate Governance.” In addition, paper copies of these documents will be furnished to any stockholder, upon request, free of charge.

Technologies

~~Sewer and Water Rehabilitation~~

~~Our~~ ~~Insituform~~® ~~CIPP Process~~ for the rehabilitation of sewers, pipelines and other conduits utilizes a custom-manufactured tube, or liner, made of synthetic fiber. After the tube is saturated (impregnated) with a thermosetting resin mixture, it is installed in the host pipe by various processes, and the resin is then cured, by heat using hot water or steam, forming a new rigid pipe within a pipe.

~~Our~~ ~~iPlus Infusion~~® ~~Process~~ is a trenchless method used for the rehabilitation of small-diameter sewer pipelines, whereby a felt liner is continuously impregnated with liquid, thermosetting resin through a proprietary process, after which the liner is pulled into the host pipe, inflated with air and cured with steam.

~~Our~~ ~~iPlus~~® ~~Composite Process~~ is a trenchless method used for the rehabilitation of large-diameter sewer pipelines, where the felt liner is reinforced with carbon or glass fiber, impregnated with liquid, thermosetting resin, inverted into place and cured with hot water or steam.

~~Our~~ ~~InsituMain~~® ~~System~~ ~~is a cured-in-place pipe solution for pressure pipes. The InsituMain~~® ~~System is for water mains and force mains up to 54-inches in diameter, can negotiate bends and is pressure-rated up to 150+ psi. The InsituMain~~® ~~System has also been certified as complying with ANSI/NSF Standard 61.~~

~~Our~~ ~~InsituGuard~~®, ~~InsituFlex~~®~~andInsituFold~~®~~Processes~~ are methods of rehabilitating transmission and distribution water mains using high-density polyethylene liners (“HDPE”). Inserted into a new or existing pipeline by our proprietary installation processes, the liners are continuous and installed tightly against the inner wall of the host pipe, thereby isolating the flow stream from the host pipe wall and eliminating internal corrosion.

~~Our~~ ~~Thermopipe~~® ~~Lining System~~ is a polyester-reinforced polyethylene lining system for the rehabilitation of distribution water mains. The factory-folded “C” shape liner is winched into the host pipe from a reel and reverted with air and steam. Once inflated and heated, the liner forms a close-fit within the host pipe, creating a jointless, leak-free lining system.

~~Our~~ ~~iTAP~~® ~~Process~~ is a robotic method for reinstating service connections from inside a relined pipe. Traditionally, service connections are restored by excavating each service connection when a water distribution main is renewed with a trenchless process. The iTAP® ~~process provides a non-disruptive solution to reconnect service lines from inside a relined pipe.~~

~~Our~~ ~~Insituform RPP~~™ ~~Process~~ is a trenchless technology used for the rehabilitation of sewer force mains and industrial pressure pipelines. The felt tube is reinforced with glass and impregnated with liquid, thermosetting resin, after which it is inverted with water and cured with hot water to form a structural, jointless pipe within the host pipe.

~~Our~~ ~~Insituform~~ ~~PPL~~® ~~Process~~ is an ANSI/NSF 61 certified trenchless technology used for the rehabilitation of drinking water and industrial pressure pipelines. A glass-reinforced liner is impregnated with an epoxy resin, inverted with water and cured with hot water to form a jointless pipe lining within the host pipe.

~~Sliplining~~ is a method used to push or pull a new pipeline into an old one. With segmented sliplining, short segments of pipe are joined to form the new pipe. For gravity sewer rehabilitation, these short segments can often be joined in a manhole or access structure, eliminating the need for a large pulling pit.

~~In Europe, our~~ ~~UV/Glass Lining System~~ is a cured in place pipe solution for small- to medium-diameter pipes utilizing a glass fiber tube that is impregnated with a resin sensitive to ultraviolet light or steam curing. The tube is inverted into the host pipe, inflated by air and cured via an ultraviolet light source or steam.

Pipeline System Rehabilitation and Protection – Energy and Mining

Our Tite Liner^® process is a method of lining new and existing pipe with a corrosion and abrasion resistant high-density polyethylene pipe.

Our Safetyliner^™ product is a grooved ~~high-density polyethylene~~HDPE liner that is installed in an industrial pipeline using the Tite ~~Liner®~~Liner^® process. The Safetyliner^™ liner is normally used in natural gas or ~~CO2~~CO2 pipelines to allow release of gas that permeates the HDPE liner. If gas is allowed to build in the annular space under normal operating conditions, the line can be susceptible to collapse upon sudden changes in operating pressures. The ~~Safetyliner™~~Safetyliner^™ liner also has been used in pipelines as a leak detection system and for dual containment in mine water pipelines.

The ~~Fusion-Bonded Epoxy Process~~FBE application process utilizes heat to melt a dry powder ~~fusion-bonded epoxy~~FBE coating material into liquid form. The liquid material wets and flows onto the steel pipe and solidifies through a process called cross-linking. Once cooled, this “fusion-bonded” epoxy cannot return to its original state and forms a corrosion protection barrier on the interior or exterior surface of the pipe.

Our InnerGard^™ product is an internal ~~fusion bond epoxy~~FBE coating that provides corrosion protection for water injection lines and reduces costs compared to alloy pipe.

Our Enventure^™ product is an internal lubricity coating for solid expandable downhole tubulars.

The Cathodic Protection process is an electrochemical process that prevents corrosion for new structures and stops the corrosion process for existing structures. Cathodic protection prevents the release of energy and reversion to its unrefined state by the cathode, the structure being protected, through the passing of an electrical current from an electrode, called an anode, placed near or connected to the cathode. In this process, the anode corrodes, sacrificing itself to protect the integrity of the cathode. Structures commonly protected by this process include oil and gas pipelines, offshore platforms, above and underground storage tanks, ships, electric power plants, bridges, parking garages, transit systems and water and wastewater treatment equipment.

Our CoatCheck^™ product includes instruments for measuring pipe joint and surface treatment quality parameters.

Our CorrFlex®^®System is a linear anode system installed parallel to pipelines, often times to prevent stress corrosion cracking that can lead to ruptures on high pressure gas transmission pipelines.

Our CorrSpray^® product provides a unique solution for preventing corrosion of steel reinforcements in concrete structures.

Our ~~CorrSpray~~® ~~product is a metal alloy used for cathodic protection of steel reinforced concrete structures.~~

~~Our~~ Green Rectifier™^® system is an ecologically friendly method of cathodic protection using solar panels and a wind generator to power the cathodic protection process.

Our Grid System^™ has set the global standard for preventing releases from external corrosion of at grade storage tanks containing oil and petroleum products, thereby ensuring safe operations and protection of the environment.

Our AC Interference Mitigation (ACIM) solution protects pipeline operators and the public from electrical hazards when pipelines share space on rights-of-way with overhead electric transmission lines. Beginning with advanced predictive modeling, we then design mitigation schemes and provide systems to protect people and the pipeline.

Water and Wastewater Rehabilitation

Our Insituform^®CIPP Process for the rehabilitation of sewers, pipelines and other conduits utilizes a custom-manufactured tube, or liner, made of synthetic fiber. After the tube is saturated (impregnated) with a thermosetting resin mixture, it is installed in the host pipe by various processes, and the resin is then cured, by heat using hot water or steam, forming a new rigid pipe within a pipe.

Our iPlus^®Infusion^®Process is a trenchless method used for the rehabilitation of small-diameter sewer pipelines, whereby a felt liner is continuously impregnated with liquid, thermosetting resin through a proprietary process, after which the liner is pulled into the host pipe, inflated with air and cured with steam.

Our iPlus^®Composite Process is a trenchless method used for the rehabilitation of large-diameter sewer pipelines, where the felt liner is reinforced with carbon or glass fiber, impregnated with liquid, thermosetting resin, inverted into place and cured with hot water or steam.

Our InsituMain^®System is a cured-in-place pipe solution for pressure pipes. The InsituMain^® System is for water mains and force mains up to 54-inches in diameter, can negotiate bends and is pressure-rated up to 150 psi. The InsituMain^® System has also been certified as complying with ANSI/NSF Standard 61.

Our InsituGuard^®,InsituFlex^®andInsituFold^®processes are methods of rehabilitating transmission and distribution water mains using HDPE liners. Inserted into a new or existing pipeline by our proprietary installation processes, the liners are continuous and installed tightly against the inner wall of the host pipe, thereby isolating the flow stream from the host pipe wall and eliminating internal corrosion.

Our Thermopipe^®Lining System is a polyester-reinforced polyethylene lining system for the rehabilitation of distribution water mains. The factory-folded “C” shape liner is winched into the host pipe from a reel and reverted with air and steam. Once inflated and heated, the liner forms a close-fit within the host pipe, creating a jointless, leak-free lining system.

Our Insituform RPP^™ process is a trenchless technology used for the rehabilitation of sewer force mains and industrial pressure pipelines. The felt tube is reinforced with glass and impregnated with liquid, thermosetting resin, after which it is inverted with water and cured with hot water to form a structural, jointless pipe within the host pipe.

Our InsituformPPL^® process is a trenchless technology certified to NSF/ANSI Standard 61 used for the rehabilitation of drinking water and industrial pressure pipelines. A glass-reinforced liner is impregnated with an epoxy or vinyl ester resin, inverted with water and cured with hot water to form a jointless pipe lining within the host pipe.

Sliplining is a method used to push or pull a new pipeline into an old one. With segmented sliplining, short segments of pipe are joined to form the new pipe. For gravity sewer rehabilitation, these short segments can often be joined in a manhole or access structure, eliminating the need for a large pulling pit.

Our Sealing Method process is a method for providing re-connection to a ferrule of a service line from within the bore of a lined host pipe.

Our UV/Glass Lining System is a cured in place pipe solution for small- to medium-diameter pipes utilizing a glass fiber tube that is impregnated with a resin sensitive to ultraviolet light or steam curing. The tube is pulled into place in the host pipe, inflated by air and cured via an ultraviolet light source or steam.

Infrastructure Rehabilitation and Strengthening – Commercial and Structural

Our Fibrwrap^® and Tyfo^® processes are methods applying high strength fiber fabric to strengthen structures and the connections between structural components, thereby strengthening, repairing and restoring masonry, concrete, steel and wooden structures. The Fibrwrap^® and Tyfo^® products are construction and engineering materials comprising hybrid fiber/epoxy composites used for retrofitting or repairing structures.

Our Blast Glass^® product and process relates to glass fabric used on a blast-resistant building or structure having reinforced connections between concrete structural panels and adjacent support members providing for increased structural stability under fluctuating loads, such as during a blast or explosion.

Our Nano-Nano^® product is a polymer resin used in the manufacture of resin or fiber composites.

Our FibrBundle^® process relates to devices, systems and methods for reinforcing pipes and other structures, thus reinforcing the interior of pipes using FRP. The FibrBundle^® products are non-metal building materials, namely, tows of carbon fibers for strengthening bridges, buildings and other structures.

Our FibrPipeWrap™ product and process relates to the construction and civil engineering material in the nature of hybrid fiber/epoxy composites used for retrofitting or repairing structures.

Our FastWrap™ product and process relates to carbon fiber and epoxy composite material in sheet form for strengthening and reinforcement of load-bearing components of buildings and transportation infrastructure.

See “Patents” below for more information concerning these technologies.

Operations

We ~~have five principal operating segments: North American Sewer Rehabilitation, European Sewer Rehabilitation, Asia-Pacific Sewer Rehabilitation, Water Rehabilitation~~operate in three distinct markets: energy and ~~Energy~~mining; water and ~~Mining. These segments have been determined based on the types of~~wastewater; and commercial and structural services. Management organizes around differences in products ~~sold~~ and services, ~~performed by each segment,~~ as well as by geographic ~~region,~~areas. Within the water and ~~each~~wastewater market, we operate in two distinct geographies: North America and internationally outside of North America. As such, we are organized into four reportable segments: Energy and Mining; North American Water and Wastewater; International Water and Wastewater; and Commercial and Structural. Each segment is regularly reviewed and evaluated separately. ~~Our services are utilized by municipal~~

During the third quarter of 2013, we acquired Brinderson. Brinderson is a leading integrated service provider of maintenance, construction, engineering and ~~industrial entities to improve or maintain existing pipelines, to construct or expand operating capabilities~~turnaround activities for the upstream and ~~to comply with health, safety~~downstream oil and ~~environmental regulations.~~

gas markets. For reportable segment purposes, management reports Brinderson in our Energy and Mining segment.

Our operations are generally project-oriented. Projects may range in duration from just a few days to several years, which can be performed as one-time contracts or as part of longer term agreements. These contracts are usually obtained through competitive bidding or negotiations and require performance at a fixed price or time and materials basis. Our Energy and Mining projects are generally performed under contracts with industrial entities. A majority of our ~~sewer~~water and ~~water~~wastewater rehabilitation installation projects are performed under contracts with municipal ~~entities while~~entities. A significant portion of our ~~energy~~commercial and ~~mining~~structural rehabilitation and strengthening projects ~~are generally~~is performed under contracts with ~~industrial entities.~~the public sector. Independent contractors may be utilized to perform portions of the work on any given project that we provide.

Energy and Mining Operations

~~Sewer~~Our energy and mining operations perform maintenance rehabilitation and corrosion protection services for oil and gas, industrial, and mineral piping systems and structures. We also offer products for gas release and leak detection systems. Our worldwide energy and mining operations are headquartered in Chesterfield, Missouri. These operations are conducted through our various subsidiaries (Corrpro based in Houston, Texas, United Pipeline Systems based in Durango, Colorado, Bayou based in New Iberia, Louisiana, CRTS based in Tulsa, Oklahoma, Hockway based in the United Arab Emirates and Brinderson based in Costa Mesa, California). Certain of our energy and mining operations outside of the United States are conducted through our wholly-owned subsidiaries in the United Kingdom, Portugal, Chile, Canada, Argentina, Brazil and the United Arab Emirates and through our joint ventures in Canada, Mexico, Oman, Singapore, Saudi Arabia and Morocco.

Our Corrpro business performs fully-integrated corrosion prevention services including: (i) engineering; (ii) product and material sales; (iii) construction and installation; (iv) inspection, monitoring and maintenance; and (v) coatings. United Pipeline Systems performs pipeline rehabilitation services using our proprietary Tite Liner^® process. Our Bayou business performs internal and external pipeline coating, lining, weighting and insulation services, as well as specialty fabrication services for offshore deep-water installations, including project management and logistics. Our CRTS business specializes in the application of internal and external corrosion coatings services and equipment for new pipeline construction projects. Our Hockway business performs cathodic protection, engineering and design, manufacturing, maintenance and installation services to the oil and gas markets. Brinderson provides maintenance, construction, engineering and turnaround activities for the upstream and downstream oil and gas markets.

Our Brinderson business performs engineering, procurement, construction, maintenance and turnaround services primarily to the upstream and downstream oil and gas markets.

Water and Wastewater Rehabilitation Operations

Our sewer rehabilitation activities are conducted principally through installation and other construction operations performed directly by ~~us or~~ our subsidiaries. In certain geographic regions, we have granted licenses to unaffiliated companies. As described under “Ownership Interests in Operating Licensees and Joint Ventures” below, we also have entered into contractual joint ventures from time to time to capitalize on our trenchless rehabilitation processes. Under these contractual joint venture relationships, work is bid by the joint venture entity and subcontracted to the joint venture partners or to third parties. The joint venture partners are primarily responsible for their subcontracted work, but both joint venture partners are liable to the customer for all of the work. Revenues and associated costs are recorded ~~usin g~~using percentage-of-completion accounting for our subcontracted portion of the total contract only. Our principal sewer rehabilitation activities are conducted in North America ~~directly by us or~~ through our wholly-owned subsidiaries. Our North American ~~Sewer Rehabilitation~~Water and Wastewater operations, including research and development, engineering, training and financial support systems, are headquartered in Chesterfield, Missouri. ~~During 2010, tube~~Tube manufacturing and processing facilities for North America ~~were~~are maintained in ~~nine~~eight locations, geographically dispersed throughout the United States and Canada.

We also conduct Insituform^® CIPP process rehabilitation operations worldwide through our wholly-owned subsidiaries and through direct and indirect joint venture relationships. We announced the decision to close our operations in Belgium, Poland and Romania during the fourth quarter of 2009 as part of our European restructuring activities, which has allowed us to concentrate our resources in geographies where we believe that we can realize a desired return on our investment.subsidiaries. The results from these operations are included in our ~~European Sewer Rehabilitation~~International Water and ~~Asia-Pacific Sewer Rehabilitation~~Wastewater operating ~~segments, as appropriate.~~segment. We utilize multifunctional robotic devices developed by our French subsidiary in connection with the inspection and repair of pipelines. We also maintain a manufacturing facility in Wellingborough, United Kingdom to support our ~~European operation,~~International operations and through which ~~is headquartered near Paris, France.~~we sell liners to third parties.

~~Water Rehabilitation Operations~~

In addition to sewer rehabilitation, we have performed water rehabilitation operations since 2006 using our Insituform Blue^® product portfolio. Under the Insituform Blue^® brand, we are able to restore water pipes using our InsituMain^®, InsituGuard^®, InsituFlex^®, InsituFold^® and Thermopipe^® lining ~~systems throughout~~systems. We conduct water rehabilitation operations in North America, Australia, the Netherlands, the United ~~Kin gdom~~Kingdom, Spain and Hong Kong through our existing operations.


⁽¹⁾	All periods presented exclude Bayou Welding Works (“BWW”) backlog, as this business was discontinued in the second quarter of 2013.

⁽²⁾

December 31, 2013 includes $268.3 million in backlog from Brinderson and represents expected revenues to be realized under long-term Master Service Agreements (“MSAs”) and other signed contracts. If the remaining term of these arrangements exceeds 12 months, the unrecognized revenues attributable to such arrangements included in backlog are limited to only the next 12 months of expected revenues.

Although backlog represents only those contracts and MSAs that are considered to be firm, there can be no assurance that cancellation or scope adjustments will not occur with respect to such contracts. ~~We expect~~

Within our Energy and Mining and Commercial and Structural segments, certain contracts are performed through our variable interest entities, in which we own a controlling portion of the entity. As of December 31, 2013, 2.8% and 0.9% of our Energy and Mining hard backlog and Commercial and Structural backlog, respectively, related to ~~perform~~these variable interest entities. With the exception of Brinderson, a substantial majority of our contracts in these two segments are fixed price contracts with individual private businesses and municipal and federal government entities across the ~~backlog reported above~~world. Brinderson, on the other hand, generally enters into cost reimbursable contracts that are based on costs incurred at ~~December 31, 2010 during 2011. See “Risk Factors” in Item 1A~~agreed upon contractual rates.

Within our Water and Wastewater segments, all of ~~this report for further discussion regarding backlog.~~our projects are performed through our wholly-owned subsidiaries and a substantial majority of those projects are fixed price contracts with individual municipalities across the world.

Manufacturing and Suppliers

The product and service revenues for our United Pipeline Systems business are derived primarily from the manufacturing and installation of polyethylene liners inside pipelines. The raw material used for these liners is extruded HDPE pipe. It has been our practice to purchase this material from a selective group of suppliers; however, we believe that it is readily available from many other sources. We manufacture most of the proprietary equipment and many of the consumable items used in Tite Liner^® system installations in our own facilities in Canada, the United States and Chile.

Product and service revenues for our Bayou businesses are derived principally from internal and external pipeline coating, lining, weighting and insulation. Bayou facilities are located in New Iberia, Louisiana; Conroe, Texas; Bakersfield, California; and Camrose, Alberta, Canada. The primary raw materials used in the coating process include FBE, paint, concrete, iron ore, sand and gravel. Although our historical practice has been to purchase materials from a limited number of suppliers, we believe that the raw materials used in the coating process are typically available from multiple sources.

Product and material revenues for our Corrpro business are derived principally from the sale of products that are purchased from select outside vendors or from assembling components that are sourced from suppliers. We conduct light assembly for a number of our Corrpro products in our production facilities in Sand Springs, Oklahoma, Edmonton, Alberta, Canada, Great Britain, Dubai and Saudi Arabia. In addition, we manufacture our own line of rectifiers and other power supplies in Canada, the United Kingdom and Saudi Arabia. The primary products and raw materials used by our Corrpro businesses include zinc, aluminum, magnesium and other metallic anodes, as well as wire and cable. We maintain relationships with our vendors for these products and are not dependent on any single vendor to meet our supply needs.

We maintain our North American Insituform^® CIPP process liner manufacturing facility in Batesville, Mississippi. In Europe, we manufacture and sell Insituform^® CIPP process liners from our plant located in Wellingborough, United Kingdom.

Although raw materials used in Insituform^® CIPP process products are typically available from multiple sources, our historical practice has been to purchase materials from a limited number of suppliers. We maintain our own felt manufacturing facility in Batesville, Mississippi. Substantially all of our fiber requirements are purchased from two sources, but there are alternate vendors readily available. We source our resin supply from multiple vendors. We also manufacture certain equipment used in our Insituform^® CIPP business.

We believe that the sources of supply for our Insituform^® CIPP operations in North America, Europe and Asia-Pacific are adequate for our needs. ~~Our pricing of raw materials is subject to fluctuations in the underlying commodity prices.~~

We sell Insituform^® CIPP process liners and related products to third parties and certain licensees on a project to project basis. In Europe, in addition to sales made on a project toby project basis, we have entered into supply agreements with various third parties to supply them with Insituform^® CIPP process liners and related products.

The ~~product~~principal raw materials used by Fyfe Co. in the manufacture of FRP composite materials are carbon, glass, resins, fabric, and ~~service revenues for our United Pipeline Systems business~~epoxy raw materials. Fabric and epoxies are ~~derived primarily from~~ the ~~installation~~largest materials purchased, which are currently purchased through a select group of ~~polyethylene liners inside pipelines. The raw material used for~~suppliers, although these ~~liners is extruded high density polyethylene pipe. It has been our practice to purchase this material~~and the other materials are available from a ~~selective group~~number of ~~suppliers; however, we believe that it~~vendors. The weaving of FRP fiber components into woven fabric is ~~readily available~~done at our facility in La Conner, Washington. Fyfe Co. manufactures the unique epoxies from ~~many other sources. We manufacture most of~~basic chemicals at our San Diego, California facility. Epoxy resin repackaging is then done at our San Diego, California facility and the ~~proprietary equipment and many of the consumable items used in Tite Liner~~® ~~installations in our own facilities in Canada,~~specialized blending is usually done on each job site. Fyfe Co. also sells finished materials throughout the United States and ~~Chile.~~worldwide to our affiliates and certain certified third party installers and applicators.

Product and service revenues for our Bayou business are derived principally from internal and external pipeline coating, lining, weighting and insulation. Bayou also provides specialty fabrication services for offshore deepwater installations, including project management and logistics. Bayou facilities are located in New Iberia, Louisiana; Conroe, Texas; and Camrose, Alberta, Canada. The primaryOur pricing of raw materials ~~used~~is subject to fluctuations in the ~~coating process include fusion-bonded epoxy, paint, concrete, iron ore, sand and gravel. Although~~underlying commodity prices. See “Commodity Risk” in Item 7A of this report for detail on our ~~historical practice has been to purchase materials from a limited number~~management of ~~suppliers, we believe that~~ the ~~raw materials used in the coating process are typically available from multiple sources.~~

Product and material revenues for our Corrpro business are derived principally from the sale of products that are purchased from select outside vendors or from assembling components that are sourced from suppliers. We conduct light assembly for a number of our Corrpro products in our production facilities in Sand Springs, Oklahoma; Edmonton, Alberta, Canada; and the United Kingdom. In addition, we manufacture our own line of rectifiers and other power supplies in Canada. The primary products and raw materials used by our Corrpro businesses include zinc, aluminum, magnesium and other metallic anodes, as well as wire and cable. We maintain relationshipsrisks associated with ~~our vendors for these products and are not dependent on any single vendor to meet our supply needs.~~such price fluctuations.

Patents and Proprietary Technologies

For our energy and mining operations, we hold seven issued patents and two pending patents in the United States and seven issued patents in foreign jurisdictions that relate to our cathodic protection business operated through our Corrpro and Hockway subsidiaries and interior surface coating inspection business operated through our CRTS subsidiary. We have one issued patent in the United States, and 16 pending patents in foreign jurisdictions that relate to the Tite Liner^® process, although we believe that the success of our Tite Liner^® process business depends primarily upon our proprietary know-how and our installation, marketing and sales skills. The success of our pipeline coatings process operating through our Bayou subsidiaries depends primarily on our know-how and manufacturing expertise as well as our marketing and sales skills.

As of December 31, ~~2010,~~2013, we held 5928 United States patents relating to the Insituform^® CIPP process, the last of which will expire in ~~2027.~~2031. As of December 31, ~~2010,~~2013, we had 12three pending United States non-provisional patent applications relating to the Insituform^® CIPP process.

We have obtained and are pursuing patent protection in our principal foreign markets covering various aspects of the Insituform^® CIPP process. As of December 31, ~~2010,~~2013, there were ~~152~~187 issued foreign patents and utility models relating to the Insituform^® CIPP processes, and ~~104~~45 applications pending in foreign jurisdictions. Of these applications, ~~four~~two are pending before the European Patent Office (designating all 3438 member states) ~~and one is a Patent Cooperation Treaty application that covers multiple jurisdictions in Europe and throughout the world.~~. The specifications and/or rights granted in relation to each patent will vary from jurisdiction to jurisdiction. In addition, as a result of ~~differenc es~~differences in the nature of the work performed and in the climate of the countries in which the work is carried out, ~~not every licensee uses each patent, and~~ we do not necessarily seek patent protection for all of our inventions in every jurisdiction in which we do business. We have elected to maintain certain internally developed technologies, know-how and inventions as trade secrets. We have entered into confidentiality agreements with employees, consultants and third parties to whom we disclose confidential information. Although there can be no assurance that these measures will suffice to prevent unauthorized disclosure or use or that third parties will not develop similar technologies, we believe it would take substantial time and resources to independently develop such technologies.

For our commercial and structural operations, we hold 20 issued patents and six pending patents in the United States and nine issued and 42 pending patents in foreign jurisdictions that relate to our FRP strengthening business operated through our Fyfe and Fibrwrap subsidiaries. Of these applications, three are Patent Cooperation Treaty applications that cover multiple jurisdictions in Europe and throughout the world.

There can be no assurance that the validity of our patents will not be successfully challenged. Our business could be adversely affected by increased competition upon expiration of the patents or if one or more of our ~~Insituform~~® ~~CIPP process~~ patents were adjudicated to be invalid or inadequate in scope to protect our operations. We believe in either case that our long experience with the ~~Insituform~~® ~~CIPP process, our continued commitment to support and develop the Insituform~~® ~~CIPP process,~~proprietary processes, the strength of our ~~trademark~~trademarks and our degree of market penetration should enable us to continue to compete effectively in the pipeline ~~re habilitation market.~~

~~For our~~rehabilitation, energy and mining ~~operations, we hold 12 issued patents~~ and ~~one pending patent in the United States and 17 issued patents in foreign jurisdictions that relate to our cathodic~~infrastructure protection ~~business operated through our Corrpro subsidiaries.~~

~~We have one issued patent in the United States, and three pending patents in foreign jurisdictions that relate to the Tite Liner~~® ~~process business, operated through our United Pipeline Systems division, although we believe that the success of our Tite Liner~~® process business depends primarily upon our proprietary know-how and our installation, marketing and sales skills. The success of our pipeline coatings process operating through our Bayou subsidiaries depends primarily on our know-how and manufacturing expertise as well as our marketing and sales skills.

markets.

See “Risk Factors” in Item 1A of this report for further discussion.

Competition

The markets in which we operate are highly competitive, primarily on the basis of price, quality of service and capacity to perform. Most of our products face direct competition from competitors offering similar or essentially equivalent products or services. In addition, customers can select a variety of methods to meet their ~~pipe~~infrastructure installation, strengthening and rehabilitation needs, as well as their coating and cathodic protection needs, including a number of methods that we do not offer.

~~Specifically,~~In our Energy and Mining segment, Corrpro operates in the ~~sewer rehabilitation~~highly-competitive field of cathodic protection for corrosion control. While this market ~~CIPP~~is highly competitive, because there are relatively few barriers to entry, Corrpro is the ~~preferred method~~recognized market leader in North America in this field. Competitors include a limited number of large firms, which provide services nationally, and in some instances, globally, although more prevalent are a number of small- and medium-sized firms with a more limited

portfolio of products and services, which are only provided on a regional or local level. Corrpro’s competitive advantage is its broad depth of high-quality cathodic protection offerings, including its cost effective engineering, pipeline integrity construction and coating services, which are provided to customers worldwide. With our 2011 acquisition of Hockway and the creation of our new joint ventures, WCU and Corrpower, we are expanding our position as a leader in ~~this field, but this~~cathodic protection.

The process of utilizing HDPE liners is ~~a highly competitive market both in~~one of the ~~United States and abroad. Relatively few significant barriers~~more prevalent methods to entry exist in the markets in which we operate and, as a result, any organization that has adequate financial resources and access to technical expertise may become a competitor and, as such, there are numerous companies with which we compete. Worldwide, we compete with numerous smaller firms on local or regional levels and with several larger firms on the national level.

In the water rehabilitation segment, dig and replace is still the preferred method for the majority of customers, although there is growing acceptance for various trenchless alternatives. Currently, CIPP is utilized in less than five percent of water pipeline rehabilitation jobs in the United States. Because this is a much more specialized field, with more barriers to entry, including strict government mandates, we compete primarily with a handful of global and national specialty contractors.

Inprotect pipelines servicing the energy and mining ~~segment,~~industries. United Pipeline Systems is recognized worldwide as a leader in the ~~fusion-bonded epoxy (“FBE”)~~HDPE market, having provided HDPE solutions on six continents. And, because of barriers to entry, due to necessary technological capabilities, United Pipeline Systems tends to only compete with a small number of specialty firms globally, nationally and regionally. Through our focused efforts on expanding our services worldwide, United Pipeline Systems enjoys significant name recognition and substantial market share in this industry in the key energy and mining regions of the world. We expect our recent joint ventures, UPS-Aptec Limited and WCU, to further strengthen our position as a worldwide leader in the HDPE market.

Brinderson operates in a fragmented and intensely competitive field of plant engineering, maintenance and construction services in the downstream petroleum refining industry, as well as performing work in the industrial and natural gas, gas processing and compression, and upstream petroleum markets. Brinderson competes with local, regional, national and international contractors and service providers. Competitors vary with the markets that are served with few competitors competing in all of the geographic markets we serve or in all of the services we provide. Contracts are generally awarded based on safety performance, reputation for quality, price, schedule, and client satisfaction.

The FBE process is one of the standard methods for pipe coating. Bayou has a ~~strong~~ presence in the North American FBE coating market. Because the pipe coating industry is very capital intensive, Bayou usually competes with a small number of global and national companies. However, Bayou also competes on a project-specific basis with small firms on local or regional jobs. These regional firms are often steel mills that have coatings plants onsite to provide for their internal coatings needs, but these firms will outsource their coatings services if projects are within their geographic reach. Competition from these regional firms on more than a project basis is unlikely as these firms tend to be restricted geographically due to their shipping limitations.

CRTS has strong presence in the field of FBE coating and is an industry leader in inner diameter (ID) robotic coatings while our wholly-owned subsidiary, Commercial Coatings Services International, LLC (“CCSI”), is a leader in outer diameter (OD) coatings. Because of these specialized fields, CRTS and CCSI usually compete with a small number of specialty providers.

In the trenchless sewer rehabilitation market, the CIPP process is the preferred method. Because relatively few significant barriers to entry exist in this market, any organization with adequate financial resources and access to technical expertise may become a competitor. As such, there are numerous companies with which we compete. Worldwide, we compete with numerous smaller firms on local or regional levels and with several larger firms on the global and national levels. Despite the number of competitors, Insituform, as the worldwide pioneer of this technology, has maintained its role as a global market leader, both in the United States and abroad.

~~The~~In water rehabilitation, dig and replace is still the preferred method for the majority of customers. Currently, CIPP is utilized in less than five percent of water pipeline rehabilitation jobs in the United States. Because this is a much more specialized field, with more barriers to entry, including strict government mandates, we compete primarily with a handful of global and national specialty contractors.

In our Commercial and Structural segment, the FRP process competes against traditional methods of ~~utilizing high-density polyethylene (“HDPE”) liners~~structural retrofitting, but is ~~one~~gaining rapid acceptance in the construction and retrofitting industry. Fibrwrap Construction has been performing successful installations of ~~the more prevalent methods~~FRP systems for 24 years. With its proprietary technologies relating to ~~protect pipelines servicing the energy~~both products and ~~mining industries. Our United Pipeline Systems division~~application, Fyfe Co. is a leader in the ~~HDPE market. Because~~FRP market and Fibrwrap Construction is one of ~~relatively high~~the most experienced installers of the FRP system and has a well established reputation. In this field, there are significant barriers to entry, ~~due~~including testing requirements, experience, intellectual property and certifications. Fyfe has teamed with a number of universities around the world to ~~necessary technological capabilities, United Pipeline Systems tends~~conduct extensive product testing. In addition, Fyfe has dedicated significant resources to obtaining technical market acceptance of its proprietary products. As a result, Fyfe has received a number of certifications, including NSF certification for its Tyfo® Fibrwrap® system, International Code Council - Evaluation Service (ICC-ES) PMG-1040 product certification and 2006 IBC compliance for its Tyfo® pipe system for pipe strengthening and an ICC-ES Evaluation Report (ESR-2103), indicating compliance with ICC-AC125 guidelines for FRP strengthening. Because of the significant barriers to entry, Fyfe Co. and Fibrwrap Construction tend to compete with a small number of ~~specialty firms globally, nationally~~companies on a regional or national level, most of which do not provide the full spectrum of services provided by Fyfe Co. and ~~regionally.~~Fibrwrap Construction.

The cathodic protection industry is highly competitive as there are relatively few barriers to entry. Corrpro competes with a limited number of large firms globally and nationally, a number of medium firms regionally and numerous small firms regionally and locally.

There can be no assurance as to the success of our processes in competition with these companies and alternative technologies for pipe installation and rehabilitation, coating, cathodic protection and ~~cathodic protection.~~
infrastructure installation, strengthening and rehabilitation.

Seasonality

Our operations can be affected by seasonal ~~variations. Seasonal~~ variations ~~over the past five years have been minimal; however,~~and our results tend to be stronger in the second and third quarters of each year due to milder weather. We are more likely to be impacted by weather extremes, such as excessive rain, hurricanes or

monsoons, snow and ice or frigid temperatures, which may cause temporary, short-term anomalies in our operational performance in certain localized geographic regions. However, these impacts usually have not been material to our operations as a whole. See “Risk Factors” in Item 1A of this report for further discussion.

Employees

As of December 31, ~~2010,~~2013, we had approximately ~~3,200~~5,400 employees. Certain of our subsidiaries ~~and divisions~~ are parties to collective bargaining agreements covering an aggregate of approximately ~~200~~1,000 employees. We generally consider our relations with our employees and unions to be good.

Insurance and Bonding

We are required to carry insurance and provide bonding in connection with certain projects and, accordingly, maintain comprehensive insurance policies, including workers’ compensation, general and automobile liability and property coverage. We believe that we presently maintain adequate insurance coverage for all operations. We have also arranged bonding capacity for bid, performance and payment bonds. Typically, the cost of a performance bond is less than 1% of the contract value. We are required to indemnify the surety companies against losses from third-party claims of customers and subcontractors. The indemnification obligations are collateralized by unperfected liens on our assets and the assets of those subsidiaries that are parties to the applicable indemnification agreement.

Government Regulation

We are required to comply with all applicable United States federal, state and local, and all applicable foreign statutes, regulations and ordinances. In addition, our installation and other operations have to comply with various relevant occupational safety and health regulations, transportation regulations, code specifications, permit requirements and bonding and insurance requirements, as well as with fire regulations relating to the storage, handling and transporting of flammable materials. Our manufacturing and coatings facilities, as well as our installation and other operations, are subject to federal and state environmental protection regulations, none of which presently have any material effect on our capital expenditures, earnings or competitive position in connection with our present business. However, although our ~~installatio n~~installation and other operations have established monitoring programs and safety procedures, further restrictions could be imposed on the manner in which installation and other activities are conducted, on equipment used in installation and other activities, on volatile organic compounds and hazardous air pollutant emissions from our paintings and coatings processes and on the use of solvents or the thermosetting resins used in the Insituform^® CIPP process.

The use of both thermoplastics and thermosetting resin materials in contact with drinking water is strictly regulated in most countries. In the United States, a consortium led by NSF International, under arrangements with the United States Environmental Protection Agency (“EPA”), establishes minimum requirements for the control of potential human health effects from substances added indirectly to water via contact with treatment, storage, transmission and distribution system components, by defining the maximum permissible concentration of materials that may be leached from such components into drinking water, and methods for testing them. Our lining and coating products for drinking water use are NSF/ANSI Standard 61 compliant, including Fyfe’s entire Tyfo^® Fibrwrap^® system and Insituform’s full range of water pipe lining products. In ~~April 1997, the Insituform PPL~~addition, United Pipeline Systems’ HDPE TiteLiner^® ~~liner was~~ system is certified ~~by NSF~~to NSF/ANSI Standard 61. Corrpro’s corrosion control products are NSF/ANSI 61 classified for ~~use i n~~ drinking water systems ~~followed in April 1999 by NSF certification of the Insituform RPP~~™ ~~liner~~and its cathodic protection solutions for ~~such use. In 2009, we launched our InsituMain~~® ~~system~~water storage tanks and ~~in that same year, we received certification approval to NSF/ANSI~~water treatment units are compliant with AWWA Standard ~~61 for use in drinking water applications. Our drinking water lining products also are NSF certified.~~D104 and NACE recommended practices. NSF assumes no liability for use of any products, and NSF’s arrangements with the EPA do not constitute the EPA’s endorsement of NSF, NSF’s policies or its standards. Dedicated equipment is needed in connection with use of these products in drinking water applications.

Item 1A. Risk Factors.

You should carefully consider the following risks and other information contained or incorporated by reference into this Annual Report on Form 10-K when evaluating our business and financial condition and an investment in our common stock. Should any of the following risks or uncertainties develop into actual events, such developments could have material adverse effects on our business, financial condition, cash flows and results of operations.

Our ~~business is dependent on obtaining work through a competitive bidding process.~~

~~The markets~~businesses face significant competition in the industries in which ~~we operate are highly competitive. Most~~they operate.

Many of our products and services ~~including the Insituform® CIPP process,~~ face direct competition from companies offering similar ~~or essentially equivalent~~ products or services. Competition places downward pressure on our contract prices and profit margins. Intense competition is expected to continue in these markets. However, we believe our diversification strategy of entering and expanding our offerings in high return markets and ~~we face challenges~~our focus on improved efficiencies is the key to maintaining our market share and growth rates in ~~our ability to maintain strong growth rates.~~these markets. If we are unable to ~~meet these competitive challenges,~~realize our objectives, we could lose market share to our competitors and experience an overall reduction in our profits.

In our energy and mining operations, we compete primarily with a small number of global and national companies in the pipe coating industry, with specialty firms in the pipeline protection industry, with a limited number of large firms globally and a large number of smaller firms regionally in the cathodic protection industry and with a limited number of regional and national companies

in the oil and gas engineering, procurement, construction, maintenance and turnaround industries. In addition, customers can select a variety of methods to meet their pipe installation, rehabilitation, coating and cathodic protection needs, including methods that we do not offer. However, because of the breadth of high quality products and services we offer, we maintain a significant market presence and enjoy brand-name recognition worldwide in each of these fields.

In the ~~Sewer Rehabilitation segments,~~water and wastewater rehabilitation markets, we face competition from companies providing similar products and services as well as companies providing other methods of rehabilitation that we do not offer, including traditional dig-and-replace, which is still the preferred method in the water rehabilitation market. In the trenchless wastewater rehabilitation market, CIPP is the preferred method. In the trenchless wastewater market, few significant barriers to entry exist and, as a result, any organization that has the financial resources and access to technical expertise and bonding may become a competitor. ~~In these segments,~~Although we compete with many smaller firms on a local or regional level, and with several larger firms on ~~a national level.~~

In the ~~Water Rehabilitation segment, we compete primarily with~~ global and national ~~specialty contractors. Even though~~levels, we have been able to maintain our presence as the global leader in this ~~is a more specialized field than sewer~~field. In water rehabilitation, there are ~~few proprietary technologies~~more significant barriers to entry, since it is strictly regulated. In this market, we compete with a smaller number of specialty contractors around the world.

In our Commercial and Structural segment, the FRP process competes against traditional methods of structural retrofitting, but is gaining rapid acceptance in the construction and retrofitting industry. Fibrwrap has been performing successful installations of FRP systems for 24 years. In the FRP field, together Fyfe and Fibrwrap are one of the only companies offering manufacturing, engineering and technical expertise, as well extensive installation experience. Given there are significant barriers to entry, including testing requirements, experience, intellectual property and certifications, in manufacturing we only compete with a handful of FRP suppliers and in installation, we compete with a number of FRP installers. If any of our competitors were to become fully-integrated like us or ~~other barriers which prevent other companies from entering~~if new entrants in the market were to develop strong installation and manufacturing expertise this could adversely impact our ability to grow revenues in this market.

Our success and growth strategy depend on our senior management and our ability to attract and retain qualified personnel.

InWe depend on our senior management for the ~~Energy~~success and ~~Mining segment,~~future growth of the operations and revenues of our company, and the loss of any member of our senior management could have an adverse impact on our operations. Such a loss may be a distraction to senior management as we ~~compete primarily~~search for a qualified replacement, could result in significant recruiting, relocation, training and other costs and could cause operational inefficiencies as a replacement becomes familiar with ~~a small number of global~~our business and national companies in the pipe coating industry, with specialty firms in the pipeline protection industry, and a limited number of large firms globally and a large number of smaller firms regionally in the cathodic protection industry. operations.

In addition, ~~customers can select~~we use a ~~variety~~multi-level sales force structured around target markets and key accounts, focusing on marketing our products and services to engineers, consultants, administrators, technical staff and elected officials. We are dependent on our personnel to continue to develop improvements to our proprietary processes, including materials used and the methods of ~~methods to meet their pipe installation, rehabilitation,~~manufacturing, installing, strengthening, coating and cathodic protection and we require quality field personnel to effectively and profitably perform our work. Our success in attracting and retaining qualified personnel is dependent on the resources available in individual geographic areas and the impact on the labor supply of general economic conditions, as well as our ability to provide a competitive compensation package and work environment. Our failure to attract, train, integrate, engage and retain qualified personnel could have a significant effect on our financial condition and results of operations.

Our business depends upon the maintenance of our proprietary technologies and information.

We depend upon our proprietary technologies and information, many of which are no longer subject to patent protection. We rely principally upon trade secret and copyright laws to protect our proprietary technologies. We regularly enter into confidentiality agreements with our key employees, customers and potential customers and limit access to and distribution of our trade secrets and other proprietary information. These measures may not be adequate to prevent misappropriation of our technologies or to assure that our competitors will not independently develop technologies that are substantially equivalent or superior to our technologies. In addition, the laws of other countries in which we operate may not protect our proprietary rights to the same extent as the laws of the United States. We are also subject to the risk of adverse claims and litigation alleging infringement of intellectual property rights.

Our efforts to develop new products and services or enhance existing products and services involve substantial research, development and marketing expenses, and the resulting new or enhanced products or services may not generate sufficient revenues to justify such expenses.

Our future success will depend in part on our ability to anticipate and respond to changing technologies and customer requirements by enhancing our existing products and services. We will need to develop and introduce, on a timely and cost-effective basis, new products, features and services that address the needs ~~including~~of our customer base. As a ~~number~~result of ~~methods~~these efforts, we may be required to expend substantial research, development and marketing resources, and the time and expense required to develop a new product or service or enhance an existing product or service are difficult to predict. We cannot assure that we dowill succeed in developing, introducing and marketing new products or services or product or service enhancements. In addition, we cannot be certain that any new or enhanced product or service will generate sufficient revenues to justify the expenses and resources devoted to this product diversification effort.

Acquisitions and investments could result in operating difficulties, dilution and other harmful consequences that may adversely impact our business and results of operations.

Acquisitions are an important element of our overall corporate strategy and use of capital, and these transactions could be material to our financial condition and results of operations. We expect to continue to evaluate and enter into discussions regarding a wide array of potential strategic transactions. The process of integrating an acquired company, business or technology has created, and will continue to create, unforeseen operating difficulties and expenditures. The areas where we face risks include:

Diversion of management time and focus from operating our business to acquisition integration challenges.

Failure to successfully further develop the acquired business or technology.

Implementation or remediation of controls, procedures and policies at the acquired company.

Integration of the acquired company’s accounting, human resource and other administrative systems, and coordination of product, engineering and sales and marketing functions.

Transition of operations, users and customers onto our existing platforms.

Failure to obtain required approvals on a timely basis, if at all, from governmental authorities, or conditions placed upon approval, under competition and antitrust laws which could, among other things, delay or prevent us from completing a transaction, or otherwise restrict our ability to realize the expected financial or strategic goals of an acquisition.

In the case of foreign acquisitions, the need to integrate operations across different cultures and languages and to address the particular economic, currency, political and regulatory risks associated with specific countries.

Cultural challenges associated with integrating employees from the acquired company into our organization, and retention of employees from the businesses we acquire.

Liability for activities of the acquired company before the acquisition, including patent and trademark infringement claims, violations of laws, commercial disputes, tax liabilities, and other known and unknown liabilities.

Litigation or other claims in connection with the acquired company, including claims from terminated employees, customers, former stockholders or other third parties.

Our failure to address these risks or other problems encountered in connection with our past or future acquisitions and investments could cause us to fail to realize the anticipated benefits of such acquisitions or investments, incur unanticipated liabilities, and harm our business generally.

Our acquisitions could also result in dilutive issuances of our equity securities, the incurrence of debt, the assumption of contingent liabilities, amortization expenses, impairment of goodwill and purchased long-lived assets, and restructuring charges, any of which could harm our financial condition or results of operations. Also, the anticipated benefit of many of our acquisitions may not ~~offer.~~materialize.

Our backlog is an uncertain indicator of our future earnings.

Our backlog, which at December 31, 2013 was approximately $759.0 million, inclusive of Brinderson, is subject to unexpected adjustments and cancellation. The revenues projected in this backlog may not be realized or, if realized, may not result in profits. We may be unable to complete some projects included in our backlog in the estimated time and, as a result, such projects could remain in backlog for extended periods of time. To the extent that we experience project cancellation or scope adjustments, we could face a reduction in the dollar amount of our backlog and the revenues that we actually receive from such backlog. In addition, one or more of our multi-year contracts have in the past and may in the future contribute a material portion of our backlog in any one year. The loss of business from any one of these significant customers could have a material adverse effect on our business or results of operations.

The preparation of our consolidated financial statements requires us to make estimates and judgments, which are subject to an inherent degree of uncertainty and which may differ from actual results.

Our consolidated financial statements are prepared in accordance with accounting principles generally accepted in the United States, which require us to make estimates and judgments that affect the reported amounts of assets, liabilities, revenues and expenses and related disclosure of contingent assets and liabilities. Some accounting policies require the application of significant judgment by management in selecting the appropriate assumptions for calculating financial estimates. By their nature, these estimates and judgments are subject to an inherent degree of uncertainty and actual results may differ from these estimates and judgments under different assumptions or conditions, which may have an adverse effect on our financial condition or results of operations in subsequent periods.

Our use of the percentage-of-completion method of accounting could result in a reduction or reversal of previously recorded results.

We employ the percentage-of-completion method of accounting for our construction projects. This methodology recognizes revenues and profits over the life of a project based on costs incurred to date compared to total estimated project costs. Revisions to revenues and profits are made once amounts are known and can be reasonably estimated. Given the uncertainties associated with some of our contracts, it is possible for actual costs to vary from estimates previously made. Revisions to estimates could result in the reversal of revenues and gross profit previously recognized. For the year ended December 31, 2013, approximately 75% of our revenues were derived from percentage-of-completion accounting.

We may experience cost overruns on our projects.

We typically conduct our business under guaranteed maximum price or fixed price contracts, where we bear a significant portion of the risk for cost overruns. Under such contracts, prices are established in part on cost and scheduling estimates, which are based on a number of assumptions, including assumptions about future economic conditions, prices and availability of materials and other exigencies. Our profitability depends heavily on our ability to make accurate estimates. Inaccurate estimates, or changes in other circumstances, such as unanticipated technical problems, difficulties obtaining permits or approvals, changes in local laws or labor conditions, weather delays, cost of raw materials or our suppliers’ or subcontractors’ inability to perform could result in substantial losses, as such changes adversely affect the revenue and gross profit recognized on each project.

~~The preparation of our consolidated financial statements requires us to make estimates and judgments, which are subject to an inherent degree of uncertainty and which may differ from actual results.~~

~~Our use of the percentage-of-completion method of accounting could result in a reduction or reversal of previously recorded results.~~

We employ the percentage-of-completion method of accounting for our construction projects. This methodology recognizes revenues and profits over the life of a project based on costs incurred to date compared to total estimated project costs. Revisions to revenues and profits are made once amounts are known and can be reasonably estimated. Given the uncertainties associated with some of our contracts, it is possible for actual costs to vary from estimates previously made. Revisions to estimates could result in the reversal of revenues and gross profit previously recognized. For the year ended December 31, 2010, approximately 72% of our revenues were derived from percentage-of-completion accounting.

Our recognition of revenues from change orders, extra work or variations in the scope of work could be subject to reversal in future periods.

We recognize revenues from change orders, extra work or variations in the scope of work as set forth in our written contracts with our clients when management believes that realization of these revenues is probable and the recoverable amounts can be reasonably estimated. We also factor in all other information that we possess with respect to the change order to determine whether the ~~claim~~change order should be recognized at all and, if recognition is appropriate, what dollar amount of the ~~claim~~change order should be recognized. Due to factors that we may not anticipate at the time of recognition, however, revenues ultimately received on these ~~claims~~change orders could be less than revenues that we recognized in a prior reporting period or periods, which could require us in subsequent reporting periods to reduce or reverse revenues and gross profit previously recognized.

~~Our success and growth strategy depends on our senior management and our ability to attract and retain qualified personnel.~~

We depend on our senior management for the success and future growth of the operations and revenues of our Company, and the loss of any member of our senior management could have an adverse impact on our operations. Such a loss may be a distraction to senior management as we search for a qualified replacement, could result in significant recruiting, relocation, training and other costs and could cause operational inefficiencies as a replacement becomes familiar with our business and operations.

In addition, we use a multi-level sales force structured around target markets and key accounts, focusing on marketing our products and services to engineers, consultants, administrators, technical staff and elected officials; we are dependent on our personnel to continue to develop improvements to our proprietary processes, including materials used and the methods of manufacturing, installation, coating and cathodic protection; and we require quality field personnel to effectively and profitably perform our work. Our success in attracting and retaining qualified personnel is dependent on the resources available in individual geographic areas and the impact on the labor supply of general economic conditions, as well as our ability to provide a competitive compensation package and work environment. Our failure to attract, train, int egrate and retain qualified personnel could have a significant effect on our financial condition and results of operations.

~~Extreme weather conditions may adversely affect our operations.~~

We are likely to be impacted by weather extremes, such as excessive rain or hurricanes, typhoons, snow and ice or frigid temperatures, which may cause temporary, short-term anomalies in our operational performance in certain localized geographic regions. Although we can make no assurances as to the future, historically, these impacts have not been material to our operations as a whole. Delays and other weather impacts could adversely affect our ability to meet project deadlines and may increase a project’s cost and decrease its profitability.

~~Certain of our Bayou facilities are located in a region that may be affected by natural disasters.~~

Certain of our Bayou facilities are located on the Gulf Coast in Louisiana. This region is subject to increased hurricane activity that can result in substantial flooding. Our Bayou facilities have in the past experienced damage due to winds and floods. Although we maintain flood loss insurance where necessary, a hurricane, flood or other natural disaster could result in significant damage to our facilities, recovery costs and interruption to certain of our operations.

~~Business operations could be adversely affected by terrorism.~~

The threat of, or actual acts of, terrorism may affect our operations around the world in unpredictable ways and may force an increase in security measures and cause disruptions in supplies and markets. If any of our facilities, including our manufacturing facilities, or if any of the projects we are working on, particularly in the energy and mining sector, were to be a direct target, or an indirect casualty, of an act of terrorism, our operations could be adversely affected. Corresponding instability in the financial markets as a result of terrorism also could adversely affect the ability to raise needed capital.

We may be liable to complete the work of our joint venture partners under our joint venture arrangements.

We enter into contractual joint ventures in order to develop joint bids on certain contracts. The success of these joint ventures depends largely on the satisfactory performance by our joint venture partners of their obligations under the joint venture. Under these joint venture arrangements, we may be required to complete our joint venture partner’s portion of the contract if the partner is unable to complete its portion and a bond is not available. In such case, the additional obligations could result in reduced profits or, in some cases, significant losses for us with respect to the joint venture.

~~A substantial portion of our raw materials is from a limited number of vendors, and we are subject to market fluctuations in the prices of certain commodities.~~

We purchase the majority of our fiber requirements for tube manufacturing from two sources. We believe, however, that alternate sources are readily available, and we continue to negotiate with other supply sources. The manufacture of the tubes used in our rehabilitation business is dependent upon the availability of resin, a petroleum-based product. We currently have qualified four resin suppliers from which we intend to purchase the majority of our resin requirements for our North American operations. For our European operations, we currently have qualified six resin suppliers and for our Asia-Pacific operations, we currently have qualified six resin suppliers. We believe that these and other sources of resin supply are readily available. Historically, resin prices have fluctu ated on the basis of the prevailing prices of oil, and we anticipate that prices will continue to be heavily influenced by the events affecting the oil market.

The primary products and raw materials used by our Corrpro operations include zinc, aluminum, magnesium and other metallic anodes, as well as wire and cable. We believe that Corrpro has multiple sources available for these raw materials and is not dependent on any single vendor to meet its supply needs. The prices of these raw materials have historically been affected by the prices of energy, petroleum, steel and other commodities, tariffs and duties on imported materials and foreign currency and exchange rates. A significant increase in the prices of these raw materials could adversely affect our results of operations.

In addition, we purchase a significant volume of fuel to operate our trucks and equipment. At present, we do not engage in any type of hedging activities to mitigate the risks of fluctuating market prices for oil or fuel. A significant increase in the price of oil could cause an adverse effect on our cost structure that we may not be able to recover from our customers.

International trade tariffs and restrictions in the steel market may adversely affect our Bayou business.

The business of our subsidiary, Bayou, is heavily dependent on providing products and services to customers that import steel pipe into the United States from the international markets. To the extent that trade tariffs and other restrictions imposed by the United States increase the price of, or limit the amount of, steel pipe imported into the United States, the demand from Bayou’s customers for Bayou’s products and services will be diminished, which will adversely affect Bayou’s revenues and profitability.

~~Our business depends upon the maintenance of our proprietary technologies~~Federal and ~~information.~~

~~We depend upon our proprietary technologies~~state legislative and ~~information, most of which are no longer subject~~regulatory initiatives as well as governmental reviews relating to patent protection. We rely principally upon trade secret and copyright laws to protect our proprietary technologies. We regularly enter into confidentiality agreements with our key employees, customers and potential customers and limit access to and distribution of our trade secrets and other proprietary information. These measures may not be adequate to prevent misappropriation of our technologies or to assure that our competitors will not independently develop technologies that are substantially equivalent or superior to our technologies. In addition, the laws of other countries in which we operate may not protect our proprietary rights to the same extent as the laws of the United States. We are also subject to the risk of adverse claims and litigation alleging infringement of intellectual property rights.

~~We are subject to a number of restrictive debt covenants under our senior notes and line of credit facility.~~

At December 31, 2010, we had $65.0 million in senior notes outstanding due April 2013. On March 31, 2009, we entered into a $115.0 million credit facility with a lending syndicate headed by Bank of America, N.A., which expires on March 31, 2012. The credit facility consists of a $65.0 million revolving line of credit and a $50.0 million three-year term loan. The entire amount of the term loan was drawn on March 31, 2009, in connection with our acquisition of Corrpro. At December 31, 2010, $32.5 million of the term loan was outstanding. At December 31, 2010, we had $16.6 million in letters of credit issued and outstanding and no other outstanding borrowings under our revolving line of credit. Our senior notes and our credit facility contain certain restrictive debt covenants and other customary events of default. These covenants limit the amount and type of debt we can incur and fixed charges as a measure of operating cash flow. Our ability to comply with these restrictive covenants may be affected by the factors described in this “Risk Factors” section of this Annual Report on Form 10-K and other factors outside our control. Failure to comply with one or more of these restrictive covenants mayhydraulic fracturing could result in ~~an event of default.~~increased costs and additional operating restrictions or delays that could adversely affect our Energy and Mining customers.

~~Upon an event of default, if not waived by our lenders, our lenders may declare all amounts outstanding as due~~Federal, state and ~~payable. At December 31, 2010, we were~~local legislative and regulatory initiatives relating to hydraulic fracturing could result in ~~compliance with all of our debt covenants as required under the senior notes~~increased costs and ~~credit facility. If we are unable to comply with the restrictive covenants~~additional operating restrictions or delays in the ~~future, we would be required to obtain amendments or waivers~~production of oil and natural gas, including from ~~our lenders or secure another source of financing. If our current lenders accelerate~~ the maturity of our indebtedness, we may not have sufficient capital available at that time to pay the amounts due to our lenders on a timely basis. In addition, these restrictive covenants may prevent us from engaging in transactions that benefit us, including responding to changing businessdeveloping shale plays. Our Energy and ~~economic conditions~~Mining segment services oil and ~~taking advantage of attractive business opportunities.~~

Our senior notes can be repaid at any time at par value plus a make-whole payment. The make-whole payment is calculated as the present value of the remaining interest payments discounted at a reinvestment rate equal to the yield on the United States Treasury security with a maturity equal to the average life to maturity plus 50 basis points. At December 31, 2010, this make-whole payment would have approximated $7.1 million.

~~Our sewer and water rehabilitation revenues are substantially dependent on municipal government spending.~~

Many of our customers are municipal governmental agencies and, as such, we are dependent on municipal spending. Spending by our municipal customers can be affected by local political circumstances, budgetary constraints and other factors. Consequently, future municipal spending may not be allocated to projects that would benefit our business or may not be allocatedgas companies in the ~~amounts or for the size~~shale plays and we foresee strong market opportunities here. A decline in drilling of ~~the projects that we anticipated. A decrease in municipal spending on such projects would~~new wells and related servicing activities caused by these initiatives could adversely ~~impact~~affect our ~~revenues,~~financial position, results of operations and cash flows.

Cyclical downturns in the mining, oil and natural gas industries, or in the ~~oilfield~~oil field, refinery and mining services businesses, may have a material adverse effect on our financial condition or results of operations.

The mining, oil and natural gas industries are highly cyclical. Demand for the majority of our ~~oilfield~~oil field, refinery and mining products and services is substantially dependent on the level of expenditures by the mining, oil and natural gas industries for the exploration, development and production of mined minerals, crude oil and natural gas reserves, which are sensitive to the prices of these commodities and generally dependent on the industry’s view of future mined mineral, oil and natural gas prices. There are numerous factors affecting the supply of and demand for our products and services, which include, but are not limited to:

market prices of mined minerals, oil and natural gas and expectations about future prices;

cost of producing mined minerals, oil and natural gas;

Ÿ	~~market prices of mined minerals, oil and natural gas and expectations about future prices;~~

the level of mining, drilling and production activity;

the discovery rate of new oil and gas reserves;

Ÿ	~~cost of producing mined minerals, oil and natural gas;~~

mergers, consolidations and downsizing among our clients;

coordination by the Organization of Petroleum Exporting Countries (OPEC);

Ÿ	~~the level of mining, drilling and production activity;~~

the impact of commodity prices on the expenditure levels of our clients;

financial condition of our client base and their ability to fund capital and maintenance expenditures;

Ÿ	~~the discovery rate of new oil and gas reserves;~~

adverse weather conditions;

civil unrest in oil-producing countries;

Ÿ	~~mergers, consolidations~~level of consumption of minerals, oil, natural gas and petrochemicals by consumers; and ~~downsizing among our clients;~~

Ÿ	~~coordination by the Organization of Petroleum Exporting Countries (OPEC);~~

Ÿ	~~the impact of commodity prices on the expenditure levels of our clients;~~

Ÿ	~~financial condition of our client base and their ability to fund capital and maintenance expenditures;~~

Ÿ	~~adverse weather conditions;~~

Ÿ	~~civil unrest in oil-producing countries;~~

Ÿ	~~level of consumption of minerals, oil, natural gas and petrochemicals by consumers; and~~

Ÿ	availability of services and materials for our clients to grow their capital expenditures.

The mining, oil and natural gas industries have historically experienced periodic downturns, which have been characterized by diminished demand for our ~~oilfield~~oil field, refinery and mining pipeline protection products and services and downward pressure on the prices we charge. A significant downturn in the mining, oil and/or natural gas industries could result in a reduction in demand for ~~oilfield~~oil field and refinery services and could adversely affect our operating results.

Our operations could be adversely impacted by the continuing effects from the U.S. government regulations on offshore drilling projects.

~~The U.S. governmental and regulatory~~In response to the Deepwater Horizon ~~rig explosion and resulting oil spill could adversely impact our U.S. operations.~~

~~The April 20, 2010 Deepwater Horizon drilling rig explosion and the related oil spill~~incident in the U.S. Gulf of Mexico in April 2010, the U.S. government implemented various new regulations intended to improve offshore drilling safety and environmental protection and increase liability for oil spills in the federal waters of the outer continental shelf. These new regulations increased the complexity of the drilling permit process and have delayed the receipt of drilling permits in both deepwater and shallow-water areas since the incident.

While there has ~~significantly~~been an increase in the number of drilling permits issued, and ~~adversely disrupted~~drilling activity is recovering, we cannot predict what the continuing effects from the U.S. government regulations on offshore deepwater drilling projects may have on offshore oil and gas exploration ~~activities~~and development activity, or what actions may be taken by our customers in the Gulf of Mexico. On May 28, 2010, the United States Department of the Interior issued an order imposing a six-month moratorium on all offshore deepwater drilling projects. On October 12, 2010, the Department of the Interior announced it was lifting the moratorium. After a six-month investigation, on January 11, 2011, the National Oil Spill Commission issued a report calling for tougher laws on offshore drilling. Although the moratorium has been lifted, the conditions for lifting the moratorium, further oversight, adoption of new safety requirements and policies regarding the approval of drilling permits, the restrictions on development and production activities in the Gulf of Mexico, and legislative efforts to increase or remove liability caps for claims of damages from oil spills could continue to have a significant impact on the offshore exploration and production industry and companies that serve that industry.

~~Our~~our Energy and Mining segment ~~provides services~~or other industry participants in response to ~~this region. Although we cannot predict the long-term impact on our U.S. operations, a reduction in~~these regulations. This could reduce demand for ~~the Company’s~~our services, ~~in this region~~which could have an adverse impact on certain aspects of our business.

Our operations could be adversely impacted by new California legislation related to downstream work performed in California refineries.

In our energy and mining operations, our Brinderson operation may face challenges with the addition of section 25536.7 to the California Health and Safety Code on January 1, 2014. The law introduces new requirements for refineries and outside contractors at covered facilities when construction, alteration, demolition, installation, repair or maintenance work is performed at the covered facility. The law imposes the following new requirements:

all subject workers must be paid the applicable prevailing wage rate;

all subject workers must be either “skilled journeymen” or “registered apprentices”; and

commencing January 1, 2014, at least 30% of skilled journeypersons on the project must be graduates of certified apprenticeship programs, which percentage increases to 45% on January 1, 2015 and 60% on January 1, 2016.

The new requirements only pertain to contracts entered into, extended or renewed after January 1, 2014. Brinderson currently has long term contracts in place with its major downstream clients, but its operations may be adversely impacted to become fully compliant with Section 25536.7 of the California Health and Safety Code when the contracts expire.

Operational disruptions caused by political instability and conflict in the Middle East could adversely impact our current operations and plans of expansion in the Middle East.

Our Energy and Mining segment currently operates in the Middle East and continues to focus efforts on accelerating expansion into the Middle East. Political and social unrest in the Middle East, as well as the potential for catastrophic events such as abrupt political change, terrorist acts and conflicts or wars may cause damage or disruption to the economy, financial markets and our current and prospective customers in the Middle East.

The general downturn in U.S. and global economic conditions, and specifically a downturn in the municipal bond market, may reduce our business prospects and decrease our revenues and cash flows.

Our business is affected by general economic conditions. Any extended weakness in the U.S. ~~economy~~and global economies could reduce our business prospects and could cause decreases in our revenues and operating cash flows. Specifically, a downturn in the municipal bond market caused by an actual downgrade of monoline insurers could result in our municipal customers being required to spend municipal funds previously allocated to projects that would benefit our business to pay off outstanding bonds.

We conduct manufacturing, sales and distribution operations on a worldwide basis and are subject to a variety of risks associated with doing business outside the United States.

We maintain significant international operations, including operations in Canada, Europe, Asia-Pacific, Australia, the Middle East, South America and Latin America. For the years ended December 31, ~~2010~~2013, 2012 and ~~2009, 33.9%~~2011, approximately 38.4%, 42.1% and 41.7%, respectively, of our revenues were derived from international operations. We expect a significant portion of our revenues and profits to come from international operations and joint ventures for the foreseeable future and to continue to grow over time.

As a result, we are subject to a number of risks and complications associated with international manufacturing, sales, services and other operations. These include:

difficulties in enforcing agreements and collecting receivables through some foreign legal systems;

Ÿ	~~difficulties in enforcing agreements and collecting receivables through some foreign legal systems;~~

foreign customers with longer payment cycles than customers in the United States;

tax rates in certain foreign countries that exceed those in the United States and foreign earnings subject to withholding requirements;

Ÿ	~~foreign customers with longer payment cycles than customers in the United States;~~

tax laws that restrict our ability to use tax credits, offset gains or repatriate funds;

tariffs, exchange controls or other trade restrictions including transfer pricing restrictions when products produced in one country are sold to an affiliated entity in another country;

Ÿ	~~tax rates in certain foreign countries that exceed those in the United States and foreign earnings subject to withholding requirements;~~

abrupt changes in foreign government policies and regulations;

unsettled political conditions;

Ÿ	~~tax laws that restrict our ability to use tax credits, offset gains, or repatriate funds;~~

difficulties in enforcing intellectual property rights or weaker intellectual property right protections in some countries;

hostility from local populations, particularly in the Middle East; and

Ÿ	~~tariffs, exchange controls or other trade restrictions including transfer pricing restrictions when products produced in one country are sold to an affiliated entity in another country;~~

difficulties associated with compliance with a variety of laws and regulations governing international trade, including the Foreign Corrupt Practices Act.

Ÿ	~~abrupt changes in foreign government policies and regulations;~~

Ÿ	~~unsettled political conditions;~~

Ÿ	~~difficulties in enforcing intellectual property rights or weaker intellectual property right protections in some countries;~~

Ÿ	~~hostility from local populations, particularly in the Middle East; and~~

Ÿ	~~difficulties associated with compliance with a variety of laws and regulations governing international trade, including the Foreign Corrupt Practices Act.~~

To the extent that our international operations are affected by these unexpected and adverse foreign economic and political conditions, we may experience project disruptions and losses that could significantly reduce our revenues and profits.

Implementation and achievement of international growth objectives also may be impeded by political, social and economic uncertainties or unrest in countries in which we conduct operations or market or distribute our products. In addition, compliance with multiple, and potentially conflicting, international laws and regulations, import and export limitations, anti-corruption laws and exchange controls may be difficult, burdensome or expensive.

For example, we are subject to compliance with various laws and regulations, including the Foreign Corrupt Practices Act and similar anti-bribery laws, which generally prohibit companies and their intermediaries from making improper payments to officials for the purpose of obtaining or retaining business. While our employees and agents are required to comply with these laws, we cannot assure you that our internal policies and procedures will always protect us from violations of these laws, despite our commitment to legal compliance and corporate ethics. The occurrence or allegation of these types of risks may adversely affect our business, performance, prospects, value, financial condition and results of operations.

Our business may be adversely impacted by work stoppages, staffing shortages and other labor matters.

Our Brinderson business has approximately 2,400 employees, approximately 2,300 of whom are located in California, where employees predominantly are represented by unions. Although we believe that our relations with our employees are good and we have had no strikes or work stoppages, no assurances can be made that we will not experience these and other types of conflicts with labor unions, works councils, other groups representing employees, or our employees in general, or that any future negotiations with our labor unions will not result in significant increases in the cost of labor. None of our Brinderson employees participate in multi-employer benefit plans.

The loss of one or more of our significant customers could adversely affect us.

One or more customers have in the past and may in the future contribute a material portion of our revenues in any one year. Because these significant customers generally contract with us for specific projects or for specific periods of time, we may lose these customers from year to year as the projects or maintenance contracts are completed. The loss of business from any one of these customers could have a material adverse effect on our business or results of operations.

We may incur significant costs in providing services in excess of original project scope without having an approved change order.

After commencement of a contract, we may perform, without the benefit of an approved change order from the customer, additional services requested by the customer that were not contemplated in our contract price for various reasons, including customer changes or incomplete or inaccurate engineering, changes in project specifications and other similar information provided to us by the customer. Our construction contracts generally require the customer to compensate us for additional work or expenses incurred under these circumstances.

A failure to obtain adequate compensation for these matters could require us to record in the current period an adjustment to revenue and profit recognized in prior periods under the percentage-of-completion accounting method. Any such adjustments, if substantial, could have a material adverse effect on our results of operations and financial condition, particularly for the period in which such adjustments are made. We can provide no assurance that we will be successful in obtaining, through negotiation, arbitration, litigation or otherwise, approved change orders in an amount adequate to compensate us for our additional work or expenses.

Our profitability could be negatively impacted if we are not able to maintain appropriate utilization of our workforce.

The extent to which we utilize our workforce affects our profitability. If we under utilize our workforce, our project gross margins and overall profitability suffer in the short-term. If we over utilize our workforce, we may negatively impact safety, employee satisfaction and project execution, which could result in a decline of future project awards. The utilization of our workforce is impacted by numerous factors including:

our estimate of the headcount requirements for various units based upon our forecast of the demand for our products and services;

our ability to maintain our talent base and manage attrition;

our ability to schedule our portfolio of projects to efficiently utilize our employees and minimize downtown between project assignments; and

our need to invest time and resources into functions such as training, business development, employee recruiting, and sales that are not chargeable to customer projects.

An inability to attract and retain qualified personnel, and in particular, engineers, project managers, linemen and skilled craft workers, could impact our ability to perform on our contracts, which could harm our business and impair our future revenues and profitability.

Our ability to attract and retain qualified engineers, project managers, linemen, skilled craftsmen and other experienced professionals in accordance with our needs is an important factor in our ability to maintain profitability and grow our business. The market for these professionals is competitive, particularly during periods of economic growth when the supply is limited. We cannot provide any assurance that we will be successful in our efforts to retain or attract qualified personnel when needed. Therefore, when we anticipate or experience growing demand for our services, we may incur additional cost to maintain a professional staff in excess of our current contract needs in an effort to have sufficient qualified personnel available to address this anticipated demand. If we do incur additional compensation and benefit costs, our customer contracts may not allow us to pass through these costs.

Competent and experienced engineers, project managers, and craft workers are especially critical to the profitable performance of our contracts, particularly on our fixed-price contracts where superior design and execution of the project can result in profits greater than originally estimated or where inferior design and project execution can reduce or eliminate estimated profits or even result in a loss. Our project managers are involved in most aspects of contracting and contract execution including:

supervising the bidding process, including providing estimates of significant cost components, such as material and equipment needs, and the size, productivity and composition of the workforce;

negotiating contracts;

supervising project performance, including performance by our employees, subcontractors and other third-party suppliers and vendors

estimating costs for completion of contracts that is used to estimate amounts that can be reported as revenues and earnings on the contract under the percentage-of-completion method of accounting;

negotiating requests for change orders and the final terms of approved change orders; and

determining and documenting claims by us for increased costs incurred due to the failure of customers, subcontractors and other third- party suppliers of equipment and materials to perform on a timely basis and in accordance with contract terms.

We have international operations that are subject to foreign economic and political uncertainties and foreign currency fluctuation.

Global financial and credit markets have been, and continue to be, unstable and unpredictable. Worldwide economic conditions have been weak and may deteriorate further. For example, the credit issues in the European Union as a result of the sovereign debt crisis and other factors have affected economies worldwide. The instability of the markets and weakness of the economy could continue to affect the demand for our services, the financial strength of our customers and suppliers, their ability or willingness to do business with us, our willingness to do business with them, and/or our suppliers’ and customers’ ability to fulfill their obligations to us and/or the ability of us, our customers or our suppliers to obtain credit. These factors could adversely affect our operations, earnings and financial condition.

~~From time to time,~~A significant portion of our contracts ~~may be~~and revenues are denominated in foreign currencies, which ~~will~~may result in additional risk of fluctuating currency values and exchange rates, hard currency shortages and controls on currency exchange. Changes in the value of foreign currencies could increase our U.S. dollar costs for, or reduce our U.S. dollar revenues from, our foreign operations. Any increased costs or reduced revenues as a result of foreign currency fluctuations could affect our profits.

Our Water and Wastewater Rehabilitation revenues are substantially dependent on municipal government spending.

~~Our backlog is an uncertain indicator~~Many of our customers are municipal governmental agencies and, as such, we are dependent on municipal spending. Spending by our municipal customers can be affected by local political circumstances, budgetary constraints and other factors. Consequently, future municipal spending may not be allocated to projects that would benefit our business or may not be allocated in the amounts or for the size of the projects that we anticipated. A decrease in municipal spending on such projects would adversely impact our revenues, results of operations and cash flows.

The execution of our growth strategy is dependent upon the continued availability of third-party financing arrangements for our customers.

The economic climate has resulted in tighter credit markets, which has adversely affected our customers’ ability to secure the financing necessary to proceed or continue with pipe or other infrastructure installation, rehabilitation, strengthening, coating and cathodic protection projects. Our customers’ or potential customers’ inability to secure financing for projects could result in the delay, cancellation or downsizing of new projects or the suspension of projects already under contract, which could cause a decline in the demand for our services and negatively impact our revenues and earnings.

A substantial portion of our raw materials is from a limited number of vendors, and we are subject to market fluctuations in the prices of certain commodities.

We purchase the majority of our fiber requirements for tube manufacturing from two sources. We believe, however, that alternate sources are readily available, and we continue to negotiate with other supply sources. The manufacture of the tubes used in our rehabilitation business is dependent upon the availability of resin, a petroleum-based product. We currently have qualified four resin suppliers from which we intend to purchase the majority of our resin requirements for our North American operations. For our European operations, we currently have qualified six resin suppliers and for our Asia-Pacific operations, we currently have qualified six resin suppliers.We believe that these and other sources of resin supply are readily available. Historically, resin prices have fluctuated on the basis of the prevailing prices of oil, and we anticipate that prices will continue to be heavily influenced by the events affecting the oil market.

The primary products and raw materials used by our Commercial and Structural segment in the manufacture of FRP composite systems are carbon, glass, resins, fabric, and epoxy raw materials. Carbon and epoxies are the largest materials purchased, which are currently purchased through a select group of suppliers, although we believe these and the other materials are available from a number of vendors. The price of epoxy historically is affected by the price of oil. In addition, a number of factors such as

worldwide demand, labor costs, energy costs, import duties and other trade restrictions may influence the price of these raw materials.

We also purchase a significant volume of fuel to operate our trucks and equipment. At present, we do not engage in any type of hedging activities to mitigate the risks of fluctuating market prices for oil or fuel. A significant increase in the price of oil could cause an adverse effect on our cost structure that we may not be able to recover from our customers.

Extreme weather conditions may adversely affect our operations.

We are likely to be impacted by weather extremes, such as excessive rain or hurricanes, typhoons, snow and ice or frigid temperatures, which may cause temporary, short-term anomalies in our operational performance in certain localized geographic regions. Our ~~backlog, which at December 31, 2010 was approximately $408.7 million,~~Water and Wastewater Rehabilitation segments are particularly sensitive to weather extremes. Delays and other weather impacts could adversely affect our ability to meet project deadlines and may increase a project’s cost and decrease its profitability.

Certain of our facilities are located in regions that may be affected by natural disasters.

Certain of our Bayou facilities are located on the Gulf Coast in Louisiana. This region is subject to ~~unexpected adjustments~~increased hurricane activity that can result in substantial flooding. Our Bayou facilities have in the past experienced damage due to winds and ~~cancellation.~~ floods. Although we maintain flood loss insurance where necessary, a hurricane, flood or other natural disaster could result in significant damage to our facilities, recovery costs and interruption to certain of our operations.

Our Brinderson business serves large oil and gas customers in California and is headquartered in Costa Mesa, California with operations throughout California, near major earthquake faults. Furthermore, our Fyfe/Fibrwrap business has substantial operations in California near major earthquake faults. While we carry earthquake insurance, a catastrophic event that results in the destruction or disruption of any of our critical business or information technology systems or our clients’ facilities could harm our ability to conduct normal business operations and our operating results.

Business operations could be adversely affected by terrorism.

The ~~revenues projected~~threat of, or actual acts of, terrorism may affect our operations around the world in ~~this backlog~~unpredictable ways and may ~~not be realized~~force an increase in security measures and cause disruptions in supplies and markets. If any of our facilities, including our manufacturing facilities, or if ~~realized, may not result in profits. We may be unable to complete some~~any of the projects ~~included in our backlog~~we are working on, particularly in the ~~estimated time~~energy and asmining sector, were to be a ~~result, such projects~~direct target, or an indirect casualty, of an act of terrorism, our operations could ~~remain~~be adversely affected. Corresponding instability in the backlog for extended periods of time. To the extent that we experience project cancellation or scope adjustments, we could face a reduction in the dollar amount of our backlog and the revenues that we actually receive from such backlog.

~~Our bonding capacity may be limited in certain circumstances.~~

A significant portion of our projects require us to procure a bond to secure performance. From time to time, it may be difficult to find sureties who will provide the contract-required bonding at acceptable rates for reasons beyond our control (for example,financial markets as a result of ~~changing political or economic conditions in a foreign country). With respect to our joint ventures,~~terrorism also could adversely affect our ability to ~~obtain~~raise capital.

We may be subject to information technology system failures, network disruptions, cybersecurity attacks and breaches in data security, which could disrupt our operations and could result in a ~~bond also may~~loss of assets.

We depend on information technology as an enabler to improve the ~~credit and performance risks~~effectiveness of our ~~joint venture partners, some~~operations and to interface with our customers, as well as to maintain financial accuracy and efficiency. Information technology system failures, including suppliers’ or vendors’ system failures, could disrupt our operations by causing transaction errors, processing inefficiencies, delays or cancellation of ~~whom~~customer orders, the loss of customers, impediments to the manufacture or shipment of products, other business disruptions, the loss of or damage to intellectual property through security breach or the loss of employee personal information. These events could impact our customers, employees and reputation and lead to financial losses from remediation actions, loss of business or potential liability or an increase in expense, all of which may ~~not be as financially strong as we are. Our inability to obtain bonding on favorable terms could~~ have a material adverse effect on our business.

We place a high priority on developing new products and services, as well as enhancing our existing products and services. As a result of these efforts, we may be required to expend substantial research, development and marketing resources, and the time and expense required to develop a new product or service or enhance an existing product or service are difficult to predict. We cannot assure that we will succeed in developing, introducing and marketing new products or services or product or service enhancements. In addition, we cannot be certain that any new or enhanced product or service will generate sufficient revenues to justify the expenses and resources devoted to this product diversification effort.

We occasionally access the financial markets to finance a portion of our working capital requirements and support our liquidity needs. Our ability to access these markets may be adversely affected by factors beyond our control and could negatively impact our ability to finance our operations, meet certain obligations or implement our operating strategy.

We occasionally borrow under our existing credit facility to fund operations, including working capital investments. Market disruptions such as those experienced in the United States and abroad have materially impacted liquidity in the credit and debt markets, making financing terms for borrowers less attractive and, in certain cases, resulting in the unavailability of certain types of financing. ~~Continued uncertainty~~Uncertainty in the financial markets may negatively impact our ability to access additional financing or to refinance our existing credit facility or existing debt arrangements on favorable terms or at all, which could negatively affect our ability to fund current and future expansion as well as future acquisitions and development. These disruptions may include turmoil in the financial services industry, volatility in the markets where our outstanding securities trade and general economic downturns in the areas where we do business. If we are unable to access funds at competitive rates, or if our short-term or long-term borrowing costs increase, our ability to finance our operations, meet our short-term obligations and implement our operating strategy could be adversely affected.

We are subject to a number of restrictive debt covenants under our line of credit facility.

In July 2013, the Company entered into a new $650.0 million senior secured credit facility (the “Credit Facility”) with a syndicate of banks. Bank of America, N.A. served as the administrative agent. Merrill Lynch Pierce Fenner & Smith Incorporated,

JPMorgan Securities LLC and U.S. Bank National Association acted as joint lead arrangers and joint book managers in the syndication. The ~~execution~~Credit Facility consists of a $300.0 millionfive-year revolving line of credit and a $350.0 millionfive-year term loan facility, each with a maturity date of July 1, 2018. At December 31, 2013, $341.3 million of the term loan and $35.5 million of the line of credit was outstanding. Our Credit Facility contains certain restrictive covenants, which restrict our ability to, among other things, incur additional indebtedness, incur certain liens on our assets or sell assets, make investments and make other restricted payments. Our Credit Facility also requires us to maintain specified financial ratios under certain conditions and satisfy financial condition tests. Our ability to meet those financial ratios and tests and otherwise comply with our financial covenants may be affected by the factors described in this “Risk Factors” section of this report and other factors outside our control, and we may not be able to continue to meet those ratios, tests and covenants. Our ability to generate sufficient cash from operations to meet our debt obligations will depend upon our future operating performance, which will be affected by general economic, financial, competitive, business and other factors beyond our control. A breach of any of these covenants, ratios, tests or restrictions, as applicable, or any inability to pay interest on, or principal of, our ~~growth strategy is dependent upon the continued availability of third-party financing arrangements for our customers.~~

The recent economic climate has resulted in tighter credit markets, which could adversely affect our customers’ ability to secure the financing necessary to proceed or continue with pipe installation, rehabilitation, coating or cathodic protection projects. Our customers’ or potential customers’ inability to secure financing for projectsoutstanding debt as it becomes due could result in an event of default. Upon an event of default, if not waived by our lenders, our lenders may declare all amounts outstanding as due and payable.

At December 31, 2013, we were in compliance with all of our debt covenants as required under the ~~delay, cancellation~~Credit Facility. If we are unable to comply with the restrictive covenants in the future, we would be required to obtain amendments or ~~downsizing~~waivers from our lenders or secure another source of ~~new projects or~~financing. If our current lenders accelerate the ~~suspension~~maturity of ~~projects already~~our indebtedness, we may not have sufficient capital available at that time to pay the amounts due to our lenders on a timely basis. In addition, these restrictive covenants may prevent us from engaging in transactions that benefit us, including responding to changing business and economic conditions and taking advantage of attractive business opportunities.

As a holding company, Aegion depends on its operating subsidiaries to meet its financial obligations.

Aegion Corporation is a holding company with no significant operating assets. Our subsidiaries conduct all of our operations and own substantially all of our assets. Our cash flow and our ability to meet our obligations depends on the cash flow of our subsidiaries. In addition, the payments of funds in the form of dividends, intercompany payments, tax sharing payments and other forms may be subject to restrictions under ~~contract,~~the laws of the states and countries in which we operate.

We may be unable to recognize the benefits of our Corporate Reorganization.

Management expects to derive certain benefits from the 2011 Corporate Reorganization, including limiting legal liabilities, reorganizing our various operating subsidiaries in a more tax efficient manner, facilitating a more cost-effective repatriation of cash to the United States from foreign operations and optimizing management and operations. A variety of known and unknown risks, uncertainties and other factors could cause ~~a decline~~actual results and experience to differ materially from those anticipated, resulting in an inability to realize the ~~demand for~~expected benefits of the Corporate Reorganization and our ~~services~~Company’s ability to execute its plans and ~~negatively impact our revenues and earnings.~~

strategies.

The market price of our common stock is highly volatile and may result in investors selling shares of our common stock at a loss.

The trading price of our common stock is highly volatile and subject to wide fluctuations in price in response to various factors, many of which are beyond our control, including:

actual or anticipated variations in quarterly operating results;

Ÿ	~~actual or anticipated variations in quarterly operating results;~~

changes in financial estimates by securities analysts that cover our stock or our failure to meet these estimates;

conditions or trends in the U.S. sewer rehabilitation market;

Ÿ	~~changes in financial estimates by securities analysts that cover our stock or our failure to meet these estimates;~~

conditions or trends in mined materials, oil and natural gas markets;

changes in municipal and corporate spending practices;

Ÿ	~~conditions or trends in the U.S. sewer rehabilitation market;~~

a downturn of the municipal bond market or lending markets generally;

changes in market valuations of other companies operating in our industries;

Ÿ	~~conditions or trends in mined materials, oil~~announcements by us or our competitors of a significant acquisition or divestiture; and ~~natural gas markets;~~

Ÿ	~~changes in municipal and corporate spending practices;~~

Ÿ	~~a downturn of the municipal bond market or lending markets generally;~~

Ÿ	~~changes in market valuations of other companies operating in our industries;~~

Ÿ	~~announcements by us or our competitors of a significant acquisition or divestiture; and~~

Ÿ	additions or departures of key personnel.

In addition, the stock market in general and the Nasdaq Global Select Market in particular have experienced extreme price and volume fluctuations that may be unrelated or disproportionate to the operating performance of listed companies. Industry factors may seriously harm the market price of our common stock, regardless of our operating performance. Such stock price volatility could result in investors selling shares of our common stock at a loss.

Future sales of our common stock or equity-linked securities in the public market could adversely affect the trading price of our common stock and our ability to raise funds in new stock offerings.

Sales of substantial numbers of additional shares of our common stock or any shares of our preferred stock, including sales of shares in connection with any future acquisitions, or the perception that such sales could occur, may have a harmful effect on prevailing market prices for our common stock and our ability to raise additional capital in the financial markets at a time and price favorable to us. We may issue equity securities in the future for a number of reasons, including to finance our operations and business strategy, to adjust our ratio of debt to equity, to satisfy obligations upon exercise of outstanding warrants or options or for other reasons. Our ~~restated~~ certificate of incorporation ~~as amended,~~ provides that we have authority to issue 125,000,000 shares of common stock. As of December 31, ~~2010, 39,246,015~~2013, 37,983,114 shares of ~~com mon~~common stock were issued and outstanding.

Provisions in our ~~restated~~ certificate of incorporation ~~as amended,~~ could make it more difficult for a third party to acquire us or could adversely affect the rights of holders of our common stock or the market price of our common stock.

Our ~~restated~~ certificate of incorporation ~~as amended,~~ provides that our ~~Board~~board of ~~Directors~~directors has the authority, without any action of our stockholders, to issue up to 2,000,000 shares of preferred stock. Preferred stock may be issued upon such terms and with such designations as our ~~Board~~board of ~~Directors~~directors may fix in its discretion, including with respect to: the payment of dividends upon our liquidation, dissolution or winding up; voting rights that dilute the voting power of our common stock; dividend rates; redemption or conversion rights; liquidation preferences; or voting rights.

In addition, our ~~restated~~ certificate of incorporation ~~as amended,~~ provides that subject to the rights of the holders of any class or series of preferred stock set forth in our ~~restated~~ certificate of incorporation, ~~as amended,~~ the certificate of designation relating to such class or series of preferred stock, or as otherwise required by law, any stockholder action may be taken only at a meeting of stockholders and may not be effected by any written consent by such stockholders. The affirmative vote of the holders of at least 80% of the capital stock entitled to vote for the election of directors is required to amend, repeal or adopt any provision inconsistent with such arrangement.

These provisions could potentially be used to discourage attempts by others to obtain control of our ~~Company~~company through merger, tender offer, proxy, consent or otherwise by making such attempts more difficult or more costly, even if the offer may be considered beneficial by our stockholders. These provisions also may make it more difficult for stockholders to take action opposed by our ~~Board~~board of ~~Directors~~directors or otherwise adversely affect the rights of holders of our common stock or the market price of our common stock.

We do not intend to pay cash dividends on our common stock in the foreseeable future.

We do not anticipate paying cash dividends on our common stock in the foreseeable future. Our present policy is to retain earnings to provide for the operation and expansion of our business. Any payment of cash dividends will depend upon our earnings, financial condition, cash flows, financing agreements and other factors deemed relevant by our ~~Board~~board of ~~Directors.~~directors. Furthermore, under the terms of certain debt arrangements to which we are a party, we are subject to certain limitations on paying dividends. However, we carefully review this policy regularly and could initiate dividends in the future, depending on appropriate circumstances.

Item 1B. Unresolved Staff Comments.

None.

Item 2. Properties.

~~We own our executive offices located in Chesterfield, Missouri, a suburb of St. Louis, at 17988 Edison Avenue. We also own our research and development and training facilities in Chesterfield.~~

We own a liner manufacturing facility and a contiguous felt manufacturing facility in Batesville, Mississippi. Insituform Linings, our United Kingdom manufacturing company, owns certain premises in Wellingborough, United Kingdom, where its liner manufacturing facility is located.

Our wholly-owned subsidiary, Bayou Welding Works, L.L.C. owns a pipe yard in New Iberia, Louisiana. Commercial Coating Services International, LLC, another wholly-owned subsidiary, owns properties in Bakersfield, California and Conroe, Texas that are used as office space. Our subsidiary, Bayou Coating, L.L.C., owns a manufacturing facility in Baton Rouge, Louisiana. Our subsidiary, The Bayou Companies, LLC, leases approximately 217 acres from the Port of Iberia and other property owners in Louisiana of which certain portions have been subleased to our other Bayou subsidiaries.

~~Our joint venture subsidiary, Bayou Perma-Pipe Canada, Ltd., owns a pipe coating and insulation facility in Camrose, Alberta, Canada.~~

Corrpro, our wholly-owned subsidiary, owns certain office and warehouse space in Medina, Ohio. Its subsidiary, Corrpro Canada Inc., also owns certain premises in Edmonton, Alberta, Canada and Estevan, Saskatchewan, Canada used for office and warehouse space. In addition, our Corrpro subsidiary in the United Kingdom, Corrpro Companies Europe Ltd., owns an office and production facility in Stockton-on-Tees, United Kingdom.

Our wholly-owned subsidiary, United Pipeline Systems, owns an office and shop facility as well as additional property in Durango, Colorado. In addition, our wholly-owned Canadian subsidiary, United Pipeline Systems Limited, owns an operating facility in Edmonton, Alberta, Canada for office space and manufacturing.

Our wholly-owned subsidiary, Bayou, owns a pipe yard in New Iberia, Louisiana. Our joint venture, Bayou Coating, owns a manufacturing facility in Baton Rouge, Louisiana. Our subsidiary, Bayou leases approximately 236 acres from the Port of Iberia and other property owners in Louisiana of which certain portions have been subleased to our other Bayou subsidiaries.

Our joint venture, BPPC, owns a pipe coating and insulation facility in Camrose, Alberta, Canada.

CCSI, another wholly-owned subsidiary, owns properties in Bakersfield, California and Conroe, Texas that are used as office space and operational facilities.

Our wholly-owned subsidiary, Brinderson, leases an office in Costa Mesa, California for its headquarters and also leases various operational facilities throughout the Western United States.

We own our executive offices located in Chesterfield, Missouri, a suburb of St. Louis, at 17988 Edison Avenue. We also own our research and development and training facilities in Chesterfield.

Fyfe Co., our wholly-owned subsidiary, leases an office and a manufacturing facility in San Diego, California and Fibrwrap Construction Services, our wholly-owned subsidiary, leases an office and warehouse space in Ontario, California.

We own or lease various operational facilities in the United States, Canada, Europe, Latin America, South America, Asia-Pacific, Australia and ~~Asia-Pacific.~~

~~The~~the Middle East and the foregoing facilities are regarded by management as adequate for the current requirements of our business.

Item 3. Legal Proceedings.

We are involved in certain actions incidental to the conduct of our business and affairs. Management, after consultation with legal counsel, does not believe that the outcome of any such actions, individually and in the aggregate, will have a material adverse effect on our consolidated financial condition, results of operations or cash flows.

Item 4. Mine Safety Disclosure.

None.

Item 4A. Executive Officers of the Registrant.

Our executive officers, and their respective ages and positions with us, are as follows:



J. Joseph Burgess	52	55	President and Chief Executive Officer
David F. Morris	49	52	Senior Vice President, Chief Administrative Officer, General Counsel and Secretary
David A. Martin	43	46	Senior Vice President and Chief Financial Officer
Brian J. Clarke	51	54	Senior Vice President – Business Integration
~~Holly S. Sharp~~Kenneth L. Young	39	62	Vice President and Treasurer
Laura M. Villa		44	Vice President – Human Resources ~~and Environmental, Health and Safety~~
~~Kenneth L. Young~~	59	~~Vice President and Treasurer~~

J. Joseph Burgess has served as our President and Chief Executive Officer since April 2008. Mr. Burgess previously served as President and Chief Executive Officer of Veolia Water North America (a leading provider of water and wastewater services to municipal, federal and industrial customers) from 2005 until joining our Company in 2008. Prior ~~to that,~~thereto, he was Chief Operating Officer of Veolia Water North America from 2003 to 2005 and Vice President and General Manager for the Northeast business center from 2002 to 2003. Previously, he was Executive Vice President for Water Systems Operations for Ogden Projects (later renamed Covanta Water; a subsidiary of Ogden Corporation that specialized in waste-to-energy projects for municipalities) from 1998 to ~~2003.~~

2002.

David F. Morris serves as our Senior Vice President, Chief Administrative Officer, General Counsel and Secretary. Mr. Morris served as our Vice President, General Counsel and Secretary beginning in January 2005 through April 2007, at which time he was promoted to Senior Vice President. Mr. Morris became our Chief Administrative Officer in August 2007. From March 1993 until January 2005, Mr. Morris was an attorney with the law firm of Thompson Coburn LLP, St. Louis, Missouri, most recently as a partner in its corporate and securities practice areas. Mr. Morris also served as Senior Vice President, Associate General Counsel and Secretary of Unified Financial Services, Inc., a diversified financial services company, from December 1999 to March 2004.

David A. Martin serves as our Senior Vice President and Chief Financial Officer. Mr. Martin served as our Vice President and Chief Financial Officer from August 2007 through April 2009, at which time he was promoted to Senior Vice President. Previously, he was Vice President and ~~Controller since January 2006. Mr. Martin also served as our~~ Corporate Controller ~~for two years, following two~~ and ~~one-half years as~~ finance director of our European operations. Mr. Martin joined our Company in 1993 from the accounting firm of BDO Seidman, LLP, where he was a senior accountant.

Brian J. Clarke joined ~~Insituform~~our Company on February 14, 2011 and serves as our Senior Vice President – Business Integration. He most recently served as Executive Vice President, Business Support and General Counsel, as well as Chief Financial Officer and Chief Legal Officer, of Veolia Water North America (a leading provider of water and wastewater services to municipal, federal and industrial customers) from 2003 until he joined our Company. Mr. Clarke served as Vice President and General Counsel for the North American operations of United States Filter Corporation from 1999 to 2003. Previously, Mr. Clarke was a partner of Seyfarth, Shaw, Fairweather & Geraldson from 1997 to 1999.

~~Holly S. Sharp has served as our Vice President – Human Resources and Environmental, Health and Safety since June 2008. Previously, she served as our Senior Director~~ – Human Resources and Environmental, Health and Safety and Director of Human Resources for our former tunneling operations. Prior to joining our Company in 2004, Ms. Sharp was Director of Labor Relations for Rental Service Corporation, a North American construction equipment rental company.

Kenneth L. Young has served as our Vice President and Treasurer since April 2009. Prior to joining ~~Insituform,~~our Company, he served as the Chief Financial Officer, Secretary and Treasurer for Huttig Building Products, Inc. (a building supply distributor), ~~a public company based in St. Louis, Missouri,~~ from 2005 to 2009. Prior to that, he served as Corporate Treasurer for MEMC Electronic Materials ~~a public company based in St. Louis, Missouri,~~ from 1989 to 2005.

Laura M. Villa joined our Company as Vice President – Human Resources on February 22, 2012. From 2007 through 2012, Ms. Villa was an attorney for our Company, specializing in employment and labor law, human resources and corporate compliance. Prior thereto, Ms. Villa served as Director of Human Resources at bioMérieux, Inc. (a multinational biotechnology company) from 2003 to 2006 and as General Counsel from 2000 to 2003.

PART II

Item 5. Market for Registrant’s Common Equity, Related Stockholder Matters and Issuer Purchases of Equity Securities.

~~The Company’s~~Our common shares, $.01 par value, are traded on The Nasdaq Global Select Market under the symbol ~~“INSU”~~“AEGN”. The following table sets forth the range of quarterly high and low sales prices for the years ended December 31, ~~2010~~2013 and ~~2009,~~2012, as reported on The Nasdaq Global Select Market. Quotations represent prices between dealers and do not include retail mark-ups, mark-downs or commissions.


Period	High	Low	High		Low

2010
2013
First Quarter	$ 28.37	$ 19.94	$	26.10	$	21.51
Second Quarter	28.38	19.10	24.03		19.72
Third Quarter	25.51	18.52	25.00		21.21
Fourth Quarter	28.52	21.06	24.09		19.67

2009
2012
First Quarter	$ 21.28	$ 11.42	$	20.25	$	15.75
Second Quarter	17.35	13.03	18.50		14.49
Third Quarter	20.50	15.10	22.00		16.96
Fourth Quarter	24.22	16.81	22.39		17.32

During the quarter ended December 31, ~~2010~~2013, we did not ~~make any repurchases of our common stock, nor~~ offer any equity securities that were not registered under the Securities Act of 1933, as amended. As of February ~~21, 2011,~~20, 2014, the number of holders of record of our common stock was ~~869.~~

506.

Holders of common stock are entitled to receive dividends as and when they may be declared by our ~~Board~~board of ~~Directors.~~directors. Our present policy is to retain earnings to provide for the operation and expansion of our business. However, our ~~Board~~board of ~~Directors~~directors will review our dividend policy from time to time and will consider our earnings, financial condition, cash flows, financing agreements and other relevant factors in making determinations regarding future dividends, if any. Under the terms of ~~certain~~our debt ~~arrangements~~arrangement to which we are a party, we are subject to certain limitations on paying dividends. See “Management’s Discussion and Analysis of Financial Condition and Results of Operations – Liquidity and Capital Resources – Long-Term Debt” for further discussion of such limitations.

The following table provides information as of December 31, ~~2010~~2013 with respect to the shares of common stock that may be issued under our existing equity compensation plans:

Equity Compensation Plan Information


Plan Category	Number of securities to be issued upon exercise of outstanding options, warrants and rights (a)	Weighted-average exercise price of outstanding options, warrants and rights (b)	Number of securities remaining available for future issuance under equity compensation plans (excluding securities reflected in column (a)) (c)	Number of securities to be issued upon exercise of outstanding options, warrants and rights (a)	Weighted-average exercise price of outstanding options, warrants and rights (b)		Number of securities remaining available for future issuance under equity compensation plans (excluding securities reflected in column (a)) (c)
Equity compensation plans approved by security holders (1)	1,976,416	$ 17.61	2,022,872	1,859,907	$	20.18	3,003,484
Equity compensation plans not approved by security holders (2)	274,273	14.55	–	118,397	14.55		—
Total	2,250,689	$ 17.24	2,022,872	1,978,304	$	19.84	3,003,484

~~__________________~~


⁽¹⁾	The number of securities to be issued upon exercise of granted/awarded options, warrants and rights includes ~~1,080,119~~1,090,427 stock options, ~~732,979~~555,025 stock awards and ~~163,318~~214,455 deferred and restricted stock units outstanding at December 31, ~~2010.~~2013.

⁽²⁾

On April 14, 2008, ~~the Company~~we granted J. Joseph Burgess a118,397 non-qualified stock ~~option to purchase 118,397 shares of the Company’s common stock,~~options, a performance-based award of 52,784 shares of restricted stock and a one-time award of 103,092 shares of restricted stock in connection with his appointment as ~~the Company’s~~our President and Chief Executive Officer. These awards were issued as “inducement grants” under the rules of the Nasdaq Global Select Market and, as such, were not issued pursuant to our ~~2006~~2009 Employee Equity Incentive Plan. At December 31, 2013, 118,397 stock options were outstanding pursuant to these awards.

Issuer Purchases of Equity Securities

The following table provides information regarding repurchases made by us of our common stock during the year ended December 31, 2013, pursuant to share repurchase programs approved by our Board of Directors.



	Total Number of Shares (or Units) Purchased	Average Price Paid per Share (or Unit)		Total Number of Shares (or Units) Purchased as Part of Publicly Announced Plans or Programs	Maximum Number (or Approximate Dollar Value) of Shares (or Units) that May Yet Be Purchased Under the Plans or Programs
January 2013 ^{(1) (4)}	125,165	$	22.76	124,163	$	2,169,389
February 2013 ^{(1) (4)}	66,073	23.19		18,100	1,759,575
March 2013 ⁽¹⁾	8,800	22.87		8,800	1,558,081
April 2013 ^{(2) (4)}	71,713	22.03		70,869	—
May 2013 ^{(2) (4)}	267,559	22.77		266,800	4,310,286
June 2013 ⁽²⁾	157,000	22.71		157,000	357,555
July 2013^{(2) (4)}	16,081	23.27		15,367	—
August 2013	—	—		—	—
September 2013 ⁽³⁾	121,161	23.27		121,161	7,180,115
October 2013 ⁽³⁾⁽⁴⁾	311,608	22.81		247,200	1,520,638
November 2013 ⁽³⁾	72,994	20.83		72,994	—
December 2013 ⁽⁴⁾	231	21.05		—	—
Total	1,218,385	$	22.69	1,102,454	$	—


⁽¹⁾	In December 2012, our board of directors authorized the repurchase of up to $5.0 million of our common stock to be made during 2013. This amount constituted the then maximum open market repurchases currently authorized in any calendar year under the terms of our credit facility. Once repurchased, we immediately retired the shares.


⁽²⁾	In May 2013, our board of directors authorized the repurchase of up to $10.0 million of our common stock to be made during the balance of the 2013 calendar year. We simultaneously executed an amendment to our credit facility to allow for the repurchase. Once repurchased, we immediately retired the shares.

⁽³⁾

In September 2013, our board of directors authorized the repurchase of up to an additional $10.0 million of our common stock to be made during the balance of the 2013 calendar year. This amount represented half of the potential maximum open market repurchases authorized in any calendar year under the terms of the Credit Facility given the covenants currently applicable to the Company. Once repurchased, we immediately retire the shares.

⁽⁴⁾

In connection with approval of our old credit facility and new Credit Facility, our board of directors approved the purchase of up to $5.0 million and $10.0 million, respectively, of our common stock in each calendar year in connection with our equity compensation programs for employees and directors. The total number of shares purchased includes shares surrendered to us to pay the exercise price and/or to satisfy tax withholding obligations in connection with stock swap exercises of employee stock options and/or the vesting of restricted stock issued to employees and directors, totaling 115,931 shares for year ended December 31, 2013. The deemed price paid was the closing price of our common stock on the Nasdaq Global Select Market on the date that the restricted stock vested or the stock option was exercised. Once repurchased, we immediately retired the shares.

INDEX TO CONSOLIDATED FINANCIAL STATEMENTS



Management’s Report on Internal Control Over Financial Reporting	45 53

Report of Independent Registered Public Accounting Firm	46 54

Consolidated Statements of Income for the Years Ended December 31, ~~2010, 2009~~2013, 2012 and ~~2008~~2011	47 55

Consolidated ~~Balance Sheets,~~Statements of Comprehensive Income for the Years Ended December 31, ~~2010~~2013, 2012 and ~~2009~~2011	48 56

Consolidated Balance Sheets at December 31, 2013 and 2012	57

Consolidated Statements of ~~Stockholders’~~ Equity for the Years Ended December 31, ~~2010, 2009~~2013, 2012 and ~~2008~~2011	49 58

Consolidated Statements of Cash Flows for the Years Ended December 31, ~~2010, 2009~~2013, 2012 and ~~2008~~2011	50 59

Notes to Consolidated Financial Statements	51 60

Management’s Report on Internal Control Over Financial Reporting

The Company’s management is responsible for establishing and maintaining adequate internal control over financial reporting, as such term is defined in Exchange Act Rule 13a-15(f).

Under the supervision and with the participation of Company management, including the Chief Executive Officer (the principal executive officer) and the Chief Financial Officer (the principal financial officer), an evaluation was performed of the effectiveness of the Company’s internal control over financial reporting as of December 31, ~~2010.~~2013. In performing this evaluation, management employed the criteria set forth by the Committee of Sponsoring Organizations of the Treadway Commission in Internal Control – Integrated ~~Framework.~~Framework (1992).

Based on the criteria set forth in Internal Control – Integrated Framework(1992), management, including the Company’s Chief Executive Officer and its Chief Financial Officer, has concluded that the Company’s internal control over financial reporting was effective as of December 31, ~~2010.~~2013.

The scope of management’s evaluation did not include our recent acquisition of Brinderson, L.P. Brinderson, L.P. is a wholly-owned subsidiary whose total assets and total revenues represented 12.9% and 9.9%, respectively, of the related consolidated financial statement amounts as of and for the year ended December 31, 2013.

Company management does not expect that its system of internal control over financial reporting and procedures will prevent all misstatements due to inherent limitations. Therefore, management’s assessment provides reasonable, but not absolute, assurance that misstatements will be prevented and/or detected by the established internal control and procedures over financial reporting.

The effectiveness of the Company’s internal control over financial reporting as of December 31, ~~2010~~2013 has been audited by PricewaterhouseCoopers LLP, an independent registered public accounting firm, as stated in its report which appears herein.



/s/ J. Joseph Burgess
J. Joseph Burgess President and Chief Executive Officer (Principal Executive Officer)



/s/ David A. Martin
David A. Martin Senior Vice President and Chief Financial Officer (Principal Financial Officer)

Report of Independent Registered Public Accounting Firm

To the Board of Directors and Stockholders of ~~Insituform Technologies, Inc.,~~Aegion Corporation:

In our opinion, the accompanying consolidated balance sheets and the related consolidatedstatements of operations, comprehensive income, ~~stockholders’~~ equity and cash flows present fairly, in all material respects, the financial position of ~~Insituform Technologies, Inc.~~Aegion Corporation and its subsidiaries at December 31, ~~2010~~2013 and ~~2009,~~2012, and the results of their operations and their cash flows for each of the three years in the period ended December 31, ~~2010~~2013 in conformity with accounting principles generally accepted in the United States of America. Also, in our opinion, the Company maintained, in all material respects, effective internal control over financial reporting as of December 31, ~~2010,~~2013, based on criteria established in Internal Control - Integrated Framework (1992) issued by the Committee of Sponsoring Organizations of the Treadway Commission (COSO). The Company’s ~~ma nagement~~management is responsible for these financial statements, for maintaining effective internal control over financial reporting and for its assessment of the effectiveness of internal control over financial reporting, included in the accompanying Management’s Report on Internal Control ~~over~~Over Financial Reporting. Our responsibility is to express opinions on these financial statements and on the Company’s internal control over financial reporting based on our integrated audits. We conducted our audits in accordance with the standards of the Public Company Accounting Oversight Board (United States). Those standards require that we plan and perform the audits to obtain reasonable assurance about whether the financial statements are free of material misstatement and whether effective internal control over financial reporting was maintained in all material respects. Our audits of the financial statements included examining, on a test basis, evidence supporting the amounts and disclosures in the financial ~~st atements,~~statements, assessing the accounting principles used and significant estimates made by management, and evaluating the overall financial statement presentation. Our audit of internal control over financial reporting included obtaining an understanding of internal control over financial reporting, assessing the risk that a material weakness exists, and testing and evaluating the design and operating effectiveness of internal control based on the assessed risk. Our audits also included performing such other procedures as we considered necessary in the circumstances. We believe that our audits provide a reasonable basis for our opinions.

A company’s internal control over financial reporting is a process designed to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles. A company’s internal control over financial reporting includes those policies and procedures that (i) pertain to the maintenance of records that, in reasonable detail, accurately and fairly reflect the transactions and dispositions of the assets of the company; (ii) provide reasonable assurance that transactions are recorded as necessary to permit preparation of financial statements in accordance with generally accepted accounting principles, and that receipts and expenditures of the company are being made only in accordance with ~~authoriz ations~~authorizations of management and directors of the company; and (iii) provide reasonable assurance regarding prevention or timely detection of unauthorized acquisition, use, or disposition of the company’s assets that could have a material effect on the financial statements.

Because of its inherent limitations, internal control over financial reporting may not prevent or detect misstatements. Also, projections of any evaluation of effectiveness to future periods are subject to the risk that controls may become inadequate because of changes in conditions, or that the degree of compliance with the policies or procedures may deteriorate.

As described in Management’s Report on Internal Control Over Financial Reporting, management has excluded Brinderson, L.P. from its assessment of internal control over financial reporting as of December 31, 2013 because this entity was acquired by the Company in purchase business combination during 2013. We have also excluded Brinderson, L.P. from our audit of internal control over financial reporting. Brinderson, L.P. is a wholly-owned subsidiary whose total assets and total revenues represented 12.9% and 9.9%, respectively, of the related consolidated financial statement amounts as of and for the year ended December 31, 2013.

/s/ PricewaterhouseCoopers LLP

~~PricewaterhouseCoopers LLP~~

Saint Louis, Missouri

February 28, ~~2011~~2014

~~Insituform Technologies, Inc. and Subsidiaries~~AEGION CORPORATION AND SUBSIDIARIES

~~Consolidated Statements of Income~~

~~For the Years Ended December 31, 2010, 2009 and 2008~~CONSOLIDATED STATEMENTS OF OPERATIONS

(Inin thousands, except per share amounts)

2010 2009 2008
Revenues $ 914,975 $ 726,866 $ 536,664
Cost of revenues 685,395 536,275 407,067
Gross profit 229,580 190,591 129,597
Operating expenses 144,245 130,555 95,715
Acquisition-related expenses (credit) (1,700 ) 6,894 –
Restructuring charges – 4,025 –
Operating income 87,035 49,117 33,882
Other income (expense):
Interest expense (8,691 ) (8,296 ) (5,398 )
Interest income 332 520 3,761
Other (947 ) 1,423 1,627
Total other expense (9,306 ) (6,353 ) (10 )
Income before taxes on income 77,729 42,764 33,872
Taxes on income 23,040 12,561 8,625
Income before equity in earnings (losses) of affiliated companies 54,689 30,203 25,247
Equity in earnings (losses) of affiliated companies, net of tax 7,291 1,192 (246 )
Income before discontinued operations 61,980 31,395 25,001
Loss from discontinued operations, net of tax (100 ) (4,070 ) (2,436 )
Net income 61,880 27,325 22,565
Less: net income attributable to noncontrolling interests (1,418 ) (1,154 ) (925 )
Net income attributable to common stockholders $ 60,462 $ 26,171 $ 21,640

Earnings per share attributable to common stockholders:
Basic:
Income from continuing operations $ 1.55 $ 0.81 $ 0.87
Loss from discontinued operations (0.01 ) (0.11 ) (0.09 )
Net income $ 1.54 $ 0.70 $ 0.78
Diluted:
Income from continuing operations $ 1.54 $ 0.81 $ 0.86
Loss from discontinued operations (0.01 ) (0.11 ) (0.09 )
Net income $ 1.53 $ 0.70 $ 0.77



	2013			2012			2011
Revenues	$	1,091,420		$	1,016,831		$	925,766
Cost of revenues	844,399			773,077			723,087
Gross profit	247,021			243,754			202,679
Operating expenses	178,483			168,846			150,149
Earnout reversal	(4,175		)	(10,019		)	(1,700		)
Acquisition-related expenses	5,831			3,124			6,372
Restructuring charges	—			—			2,151
Operating income	66,882			81,803			45,707
Other income (expense):
Interest expense	(13,169		)	(10,071		)	(14,973		)
Interest income	325			505			334
Other	4,964			(1,371		)	1,902
Total other expense	(7,880		)	(10,937		)	(12,737		)
Income before taxes on income	59,002			70,866			32,970
Taxes on income	12,154			18,663			8,184
Income before equity in earnings of affiliated companies	46,848			52,203			24,786
Equity in earnings of affiliated companies	5,159			6,359			3,471
Income from continuing operations	52,007			58,562			28,257
Loss from discontinued operations	(6,461		)	(1,713		)	(587		)
Net income	45,546			56,849			27,670
Non-controlling interests	(1,195		)	(4,188		)	(1,123		)
Net income attributable to Aegion Corporation	$	44,351		$	52,661		$	26,547

Earnings per share attributable to Aegion Corporation:
Basic:
Income from continuing operations	$	1.31		$	1.38		$	0.68
Loss from discontinued operations	(0.17		)	(0.04		)	(0.01		)
Net income	$	1.14		$	1.34		$	0.67
Diluted:
Income from continuing operations	$	1.30		$	1.37		$	0.68
Loss from discontinued operations	(0.17		)	(0.04		)	(0.01		)
Net income	$	1.13		$	1.33		$	0.67

The accompanying notes are an integral part of the consolidated financial statements.

~~Insituform Technologies, Inc. and Subsidiaries~~AEGION CORPORATION AND SUBSIDIARIES

~~Consolidated Balance Sheets~~

~~As of December 31, 2010 and 2009~~CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME

(~~In thousands, except share information)~~in thousands)

December 31,
   2010

December 31,
   2009

Assets
Current assets
     Cash and cash equivalents $ 114,829 $ 106,064
     Restricted cash 745 1,339
Receivables, net 178,994 147,835
Retainage 28,726 22,656
Costs and estimated earnings in excess of billings 69,544 64,821
Inventories 42,524 32,125
Prepaid expenses and other assets 30,031 28,977
Current assets of discontinued operations 1,193 1,189
Total current assets 466,586 405,006
Property, plant and equipment, less accumulated depreciation
160,529 148,435
Other assets
Goodwill 182,141 180,506
Identified intangible assets, less accumulated amortization 73,170 78,311
Investments in affiliated companies 28,379 27,581
Deferred income tax assets 4,115 4,324
Other assets 4,260 8,827
Total other assets 292,065 299,549
Non-current assets of discontinued operations 2,607 3,304

Total Assets $ 921,787 $ 856,294

Liabilities and Equity
Current liabilities
     Accounts payable and accrued expenses $ 147,812 $ 148,075
     Billings in excess of costs and estimated earnings 12,612 12,697
     Current maturities of long-term debt, line of credit and notes payable 13,028 12,742
     Current liabilities of discontinued operations 43 339
Total current liabilities 173,495 173,853
Long-term debt, less current maturities
91,715 101,500
Deferred income tax liabilities 32,330 24,570
Other liabilities 8,916 12,849
Non-current liabilities of discontinued operations 150 –
Total liabilities 306,606 312,772

Stockholders’ equity
Preferred stock, undesignated, $.10 par – shares authorized 2,000,000; none outstanding – –
Common stock, $.01 par – shares authorized 125,000,000 and 60,000,000; shares issued
  and outstanding 39,246,015 and 38,933,944
392 389
Additional paid-in capital 251,578 242,563
Retained earnings 347,249 286,787
Accumulated other comprehensive income 6,587 8,313
Total stockholders’ equity before noncontrolling interests 605,806 538,052
     Noncontrolling interests
9,375 5,470
Total equity 615,181 543,522

Total Liabilities and Equity $ 921,787 $ 856,294

~~The accompanying notes are an integral part of the consolidated financial statements.~~



	2013			2012			2011
Net income	$	45,546		$	56,849		$	27,670
Other comprehensive income:
Currency translation adjustments	(13,428		)	9,691			(12,691		)
Pension activity, net of tax⁽¹⁾	38			154			(551		)
Deferred loss on hedging activity, net of tax⁽²⁾	(255		)	(134		)	(135		)
Total comprehensive income	31,901			66,560			14,293
Less: comprehensive income attributable to noncontrolling interests	(749		)	(4,501		)	3
Comprehensive income attributable to Aegion Corporation	$	31,152		$	62,059		$	14,296

__________________________


⁽¹⁾	Amounts presented net of tax of $11, $46, and $(184) for the years ended December 31, 2013, 2012, and 2011, respectively.


⁽²⁾	Amounts presented net of tax of $(168), $(89) and $(88) for the years ended December 31, 2013, 2012 and 2011, respectively.

~~Insituform Technologies, Inc. and Subsidiaries~~

~~Consolidated Statements of Stockholders’ Equity~~

~~For the Years Ended December 31, 2010, 2009 and 2008~~

~~(In thousands, except number of shares)~~

                Common Stock

            Shares                          $

Additional
Paid-In
Capital

Retained
Earnings

Accumulated
Other
Comprehensive
Income (Loss)

Non-
controlling
Interests

Total
Stockholders’
Equity

Comprehensive
Income

BALANCE Dec. 31, 2007 27,470,623 $ 275 $ 104,332 $ 238,976 $ 8,958 $ 2,717 $ 355,258
Net income – – – 21,640 – 925 22,565 $ 22,565
Issuance of common stock 47,950 (0 ) 887 – – – 887 –
Issuance of shares pursuant to deferred stock
  unit awards
58,953 1 (452 ) – – – (451 ) –
Restricted stock and stock units issued 471,679 5 (5 ) – – – – –
Forfeitures of restricted stock (71,420 ) (1 ) (1 ) – – – (2 ) –
Equity based compensation – – 4,474 – – – 4,474 –
Currency translation adjustment and derivative transactions – – – – (11,112 ) (630 ) (11,742 ) (11,742 )
Total comprehensive income 10,823
Less: total comprehensive income attributable
  to non-controlling interests
(295 )
Total comprehensive income attributable to common stockholders $ 10,528
BALANCE Dec. 31, 2008 27,977,785 $ 280 $ 109,235 $ 260,616 $ (2,154 ) $ 3,012 $ 370,989
Net income – – – 26,171 – 1,154 27,325 $ 27,325
Issuance of common stock 10,573,540 106 130,291 – – – 130,397 –
Restricted stock and stock units issued 429,725 4 – – – – 4 –
Issuance of shares pursuant to deferred stock
  unit awards
21,645 – – – – – – –
Forfeitures of restricted stock (68,751 ) (1 ) – – – – (1 ) –
Equity-based compensation – – 4,839 – – – 4,839 –
Dividend to non-controlling interests – – – – – (959 ) (959 ) –
Purchase of Insituform Linings – – (1,808 ) – – (2,171 ) (3,979 ) –
Investments by non-controlling interests – – – – – 4,107 4,107 –
Currency translation adjustment and derivative transactions – – 6 – 10,467 327 10,800 10,800
Total comprehensive income 38,125
Less: total comprehensive income attributable
  to non-controlling interests
(1,481 )
Total comprehensive income attributable to common stockholders $ 36,644
BALANCE Dec. 31, 2009 38,933,944 $ 389 $ 242,563 $ 286,787 $ 8,313 $ 5,470 $ 543,522
Net income – – – 60,462 – 1,418 61,880 $ 61,880
Issuance of common stock 132,485 1 2,302 – – – 2,303 –
Restricted stock issued 184,656 2 – 2
Issuance of shares pursuant to restricted stock units 32,156 – – – – – – –
Issuance of shares pursuant to deferred stock
  unit awards
9,231 – – – – – – –
Forfeitures of restricted stock (46,457 ) – – – – – – –
Equity based compensation expense – – 6,713 – – – 6,713 –
Distribution to non-controlling interests – – – – – (398 ) (398 ) –
Investments by non-controlling interests – – – – – 2,578 2,578 –
Currency translation adjustment and derivative transactions – – – – (1,726 ) 307 (1,419 ) (1,419 )
Total comprehensive income 60,461
Less: total comprehensive income attributable
  to non-controlling interests
(1,725 )
Total comprehensive income attributable to common stockholders $ 58,736
BALANCE Dec. 31, 2010 39,246,015 $ 392 $ 251,578 $ 347,249 $ 6,587 $ 9,375 $ 615,181

The accompanying notes are an integral part of the consolidated financial statements.

~~Insituform Technologies, Inc. and Subsidiaries~~AEGION CORPORATION AND SUBSIDIARIES

~~Consolidated Statements of Cash Flows~~

~~For the Years Ended December 31, 2010, 2009 and 2008~~CONSOLIDATED BALANCE SHEETS

(~~In thousands)~~in thousands, except share amounts)

2010 2009 2008
Cash flows from operating activities:

Net income $ 61,880 $ 27,325 $ 22,565
Loss from discontinued operations (100 ) (4,070 ) (2,436 )
Income from continuing operations 61,980 31,395 25,001
Adjustments to reconcile to net cash provided by operating activities:
Depreciation and amortization 30,732 28,440 17,307
(Gain) loss on sale of fixed assets 73 641 (1,607 )
Equity-based compensation expense 6,713 4,839 4,474
Deferred income taxes 8,024 3,994 2,780
Equity in earnings of affiliated companies (7,291 ) (1,192 ) 246
Other (1,886 ) (3,998 ) 1,065
Changes in operating assets and liabilities:
Restricted cash 538 567 354
Return on equity method investments 7,803 2,537 –
Receivables net, retainage and costs and estimated earnings in excess of billings (39,214 ) (19,363 ) (9,921 )
Inventories (9,677 ) 954 635
Prepaid expenses and other assets (539 ) 8,991 (11,104 )
Accounts payable and accrued expenses (3,781 ) 491 12,629
Net cash provided by operating activities of continuing operations 53,475 58,296 41,859
Net cash provided by (used in) operating activities of discontinued operations (446 ) 6,162 1,558
Net cash provided by operating activities 53,029 64,458 43,417

Cash flows from investing activities:

Capital expenditures (36,858 ) (21,837 ) (15,022 )
Proceeds from sale of fixed assets 482 1,855 1,786
Purchase of remaining interests in Hong Kong and Australian joint ventures – (278 ) –
Patent expenditures (1,346 ) (2,705 ) (3,489 )
Purchase of Garneau, Inc. assets – (11,346 ) –
Purchase of Singapore licensee (1,257 ) – –
Proceeds from net foreign investment hedges – 6,818 –
Purchase of Bayou and Corrpro, net of cash acquired – (209,714 ) –
Net cash used in investing activities of continuing operations (38,979 ) (237,207 ) (16,725 )
Net cash provided by investing activities of discontinued operations – 798 1,339
Net cash used in investing activities (38,979 ) (236,409 ) (15,386 )

Cash flows from financing activities:

Proceeds from issuance of common stock, including tax effect of stock option
exercises
2,302 128,998 871
Distributions/dividends to noncontrolling interests (398 ) (959 ) –
Proceeds from notes payable 1,986 2,637 2,582
Principal payments on notes payable (1,808 ) (4,159 ) (2,742 )
Investments by noncontrolling interests 2,578 4,107 –
Purchase of noncontrolling interests in Insituform Linings – (3,979 ) –
Principal payments on long-term debt (10,000 ) (7,500 ) –
Proceeds from long-term debt – 53,700 –
Net cash provided by (used in) financing activities (5,340 ) 172,845 711
Effect of exchange rate changes on cash 55 5,849 (8,382 )
Net increase in cash and cash equivalents for the period 8,765 6,743 20,360
Cash and cash equivalents, beginning of year 106,064 99,321 78,961
Cash and cash equivalents, end of year $ 114,829 $ 106,064 $ 99,321

Supplemental disclosures of cash flow information:

Cash paid for:

Interest $ 7,046 $ 8,173 $ 4,307
Net income taxes paid 19,001 7,143 1,229



	December 31,
	2013		2012
Assets
Current assets
Cash and cash equivalents	$	158,045	$	133,676
Restricted cash	483		382
Receivables, net	231,775		232,854
Retainage	30,831		30,172
Costs and estimated earnings in excess of billings	79,999		67,740
Inventories	58,768		59,123
Prepaid expenses and other current assets	38,522		27,728
Current assets of discontinued operations	5,435		8,986
Total current assets	603,858		560,661
Property, plant & equipment, less accumulated depreciation	182,303		183,163
Other assets
Goodwill	334,180		272,294
Identified intangible assets, less accumulated amortization	209,283		159,629
Investments	9,101		19,181
Deferred income tax assets	6,957		7,989
Other assets	14,315		8,153
Total other assets	573,836		467,246
Non-current assets of discontinued operations	2,921		6,824
Total Assets	$	1,362,918	$	1,217,894

Liabilities and Equity
Current liabilities
Accounts payable	$	80,417	$	74,724
Accrued expenses	90,966		79,580
Billings in excess of costs and estimated earnings	24,978		31,552
Current maturities of long-term debt and line of credit	22,024		33,775
Current liabilities of discontinued operations	2,070		4,885
Total current liabilities	220,455		224,516
Long-term debt, less current maturities	366,616		221,848
Deferred income tax liabilities	38,217		39,790
Other non-current liabilities	10,512		15,620
Non-current liabilities of discontinued operations	197		—
Total liabilities	635,997		501,774

(See Commitments and Contingencies: Note 9)

Equity
Preferred stock, undesignated, $.10 par – shares authorized 2,000,000; none outstanding	—		—
Common stock, $.01 par – shares authorized 125,000,000; shares issued and outstanding 37,983,114 and 38,952,561, respectively	380		390
Additional paid-in capital	236,128		257,209
Retained earnings	470,808		426,457
Accumulated other comprehensive income	2,052		15,260
Total stockholders’ equity	709,368		699,316
Non-controlling interests	17,553		16,804
Total equity	726,921		716,120
Total Liabilities and Equity	$	1,362,918	$	1,217,894

The accompanying notes are an integral part of the consolidated financial statements.

AEGION CORPORATION AND SUBSIDIARIES

CONSOLIDATED STATEMENTS OF EQUITY

(in thousands, except number of shares)



	Common Stock					Additional Paid-In Capital			Retained Earnings		Accumulated Other Comprehensive Income			Non- Controlling Interests			Total Equity
	Shares		Amount			Additional Paid-In Capital			Retained Earnings		Accumulated Other Comprehensive Income			Non- Controlling Interests			Total Equity
BALANCE, December 31, 2010	39,246,015		$	392		$	251,578		$	347,249	$	18,113		$	9,375		$	626,707
Net income	—		—			—			26,547		—			1,123			27,670
Issuance of common stock upon stock option exercises, including tax benefit	128,052		1			3,610			—		—			—			3,611
Restricted shares issued	168,018		2			—			—		—			—			2
New shares issued	246,760		2			3,998			—		—			—			4,000
Issuance of shares pursuant to restricted stock units	9,934		—			—			—		—			—			—
Issuance of shares pursuant to deferred stock unit awards	20,640		—			—			—		—			—			—
Forfeitures of restricted shares	(140,448	)	—			—			—		—			—			—
Repurchase of common stock	(326,596	)	(3		)	(4,997		)	—		—			—			(5,000		)
Equity-based compensation expense	—		—			6,491			—		—			—			6,491
Investment by non-controlling interests	—		—			—			—		—			546			546
Distribution to non-controlling interests	—		—			—			—		—			(1,661		)	(1,661		)
Currency translation adjustment and derivative transactions, net	—		—			—			—		(12,251		)	(1,126		)	(13,377		)
BALANCE, December 31, 2011	39,352,375		$	394		$	260,680		$	373,796	$	5,862		$	8,257		$	648,989

Net income	—		—			—			52,661		—			4,188			56,849
Issuance of common stock upon stock option exercises, including tax benefit	52,676		1			1,175			—		—			—			1,176
Restricted shares issued	239,523		2			—			—		—			—			2
Issuance of shares pursuant to restricted stock units	15,177		—			—			—		—			—			—
Issuance of shares pursuant to deferred stock unit awards	34,132		—			—			—		—			—			—
Forfeitures of restricted shares	(36,325	)	—			—			—		—			—			—
Repurchase of common stock	(704,997	)	(7		)	(12,301		)	—		—			—			(12,308		)
Equity-based compensation expense	—		—			6,767			—		—			—			6,767
Investment by non-controlling interests	—		—			—			—		—			4,939			4,939
Purchase of non-controlling interests	—		—			888			—		—			(893		)	(5		)
Currency translation adjustment and derivative transactions, net	—		—			—			—		9,398			313			9,711
BALANCE, December 31, 2012	38,952,561		$	390		$	257,209		$	426,457	$	15,260		$	16,804		$	716,120

Net income	—		—			—			44,351		—			1,195			45,546
Issuance of common stock upon stock option exercises, including tax benefit	29,511		—			899			—		—			—			899
Restricted shares issued	435,025		4			—			—		—			—			4
Issuance of shares pursuant to restricted stock units	13,761		—			—			—		—			—			—
Issuance of shares pursuant to deferred stock unit awards	7,029		—			—			—		—			—			—
Forfeitures of restricted shares	(236,388	)	(2		)	—			—		—			—			(2		)
Repurchase of common stock	(1,218,385	)	(12		)	(27,636		)	—		—			—			(27,648		)
Equity-based compensation expense	—		—			5,647			—		—			—			5,647
Currency translation adjustment and derivative transactions, net	—		—			9			—		(13,208		)	(446		)	(13,645		)
BALANCE, December 31, 2013	37,983,114		$	380		$	236,128		$	470,808	$	2,052		$	17,553		$	726,921

The accompanying notes are an integral part of the consolidated financial statements.

AEGION CORPORATION AND SUBSIDIARIES

CONSOLIDATED STATEMENTS OF CASH FLOWS

(in thousands)



	2013			2012			2011
Cash flows from operating activities:
Net income	$	45,546		$	56,849		$	27,670
Loss from discontinued operations	6,461			1,713			587
	52,007			58,562			28,257
Adjustments to reconcile to net cash provided by operating activities:
Depreciation and amortization	40,329			37,658			35,532
Gain on sale of fixed assets	(816		)	(397		)	(373		)
Equity-based compensation expense	5,647			6,767			6,491
Deferred income taxes	(2,675		)	(3,004		)	(2,648		)
Equity in earnings of affiliated companies	(5,159		)	(6,359		)	(3,471		)
Debt issuance costs	1,964			—			—
Earnout reversal	(4,175		)	(10,019		)	(1,700		)
Gain on sale of interests in German joint venture	(11,771		)	—			—
Loss (gain) on foreign currency transactions	2,425			1,049			(1,155		)
Other	1,588			(4,793		)	(2,915		)
Changes in operating assets and liabilities (net of acquisitions):
Restricted cash	(102		)	(299		)	663
Return on equity of affiliated companies	10,691			11,034			7,018
Receivables net, retainage and costs and estimated earnings in excess of billings	8,222			7,875			(37,236		)
Inventories	(736		)	(3,376		)	(5,974		)
Prepaid expenses and other assets	(9,685		)	2,754			2,495
Accounts payable and accrued expenses	2,604			12,634			(789		)
Other operating	(2,293		)	865			(2,046		)
Net cash provided by operating activities of continuing operations	88,065			110,951			22,149
Net cash provided by (used in) operating activities of discontinued operations	(3,761		)	(230		)	735
Net cash provided by operating activities	84,304			110,721			22,884

Cash flows from investing activities:
Capital expenditures	(26,085		)	(44,738		)	(21,271		)
Proceeds from sale of fixed assets	3,435			4,401			755
Patent expenditures	(2,032		)	(552		)	(1,130		)
Sale of interests in German joint venture	18,300			—			—
Purchase of Brinderson, net of cash acquired	(143,763		)	—			—
Purchase of Fyfe Latin America, net of cash acquired	—			(3,048		)	—
Purchase of Fyfe Asia, net of cash acquired	—			(38,841		)	—
Purchase of CRTS, Hockway and Fyfe North America, net of cash required	—			516			(144,134		)
Net cash used in investing activities of continuing operations	(150,145		)	(82,262		)	(165,780		)
Net cash provided by (used in) investing activities of discontinued operations	845			(1,156		)	(283		)
Net cash used in investing activities	(149,300		)	(83,418		)	(166,063		)

Cash flows from financing activities:
Proceeds from issuance of common stock upon stock option exercises, including tax effects	594			1,178			3,610
Issuance of common stock in connection with acquisition of Fyfe North America	—			—			4,000
Repurchase of common stock	(27,648		)	(12,308		)	(5,000		)
Investments from noncontrolling interests	—			4,939			546
Purchase of or distributions to noncontrolling interests	(287		)	(5		)	(1,661		)
Payment of earnout related to acquisition of CRTS, Inc.	(2,112		)	—			—
Credit facility financing fees	(5,013		)	—			(4,320		)
Proceeds from notes payable	1,541			7,160			354
Principal payments on notes payable	(183		)	(2,768		)	(1,499		)
Proceeds from line of credit	—			26,000			—
Proceeds from long-term debt	385,500			983			250,000
Principal payments on long-term debt	(253,500		)	(25,000		)	(103,750		)
Net cash provided by financing activities	98,892			179			142,280
Effect of exchange rate changes on cash	(9,527		)	65			(7,801		)
Net increase (decrease) in cash and cash equivalents for the period	24,369			27,547			(8,700		)
Cash and cash equivalents, beginning of period	133,676			106,129			114,829
Cash and cash equivalents, end of period	$	158,045		$	133,676		$	106,129

Supplemental disclosures of cash flow information:
Cash paid for:
Interest	$	8,700		$	7,945		$	17,231
Net income taxes paid	11,630			18,456			10,077

The accompanying notes are an integral part of the consolidated financial statements.

AEGION CORPORATION AND SUBSIDIARIES

~~Insituform Technologies, Inc. and Subsidiaries~~

~~Notes to Consolidated Financial Statements~~NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

1. DESCRIPTION OF BUSINESS

~~Insituform Technologies, Inc., a Delaware corporation (the “Company”),~~Aegion Corporation is a ~~leading worldwide provider of~~global leader in infrastructure protection and maintenance, providing proprietary technologies and ~~services for rehabilitating sewer,~~services: (i) to protect against the corrosion of industrial pipelines; (ii) to rehabilitate and strengthen water, wastewater, energy and mining piping systems and buildings, bridges, tunnels and waterfront structures; and (iii) to utilize integrated professional services in engineering, procurement, construction, maintenance and turnaround services for a broad range of energy related industries. The Company’s business activities include manufacturing, distribution, maintenance, construction, installation, coating and insulation, cathodic protection, research and development and licensing. The Company’s acquisition of Brinderson, L.P. and related entities (“Brinderson”) on July 1, 2013 opens new markets for the ~~corrosion protection of industrial pipelines.~~Company through the maintenance, engineering and construction services for downstream and upstream facilities in the North American oil and gas market. The Company’s products and services are currently utilized and performed in more than 80 countries across six continents. The Company ~~offers~~believes that the depth and breadth of its products and services platform make us a leading “one-stop” provider for the world’s infrastructure rehabilitation and protection needs.

The Company is primarily built on the premise that it is possible to use technology to extend the structural design life and maintain, if not improve, the performance of a pipe. The Company is proving that this expertise can be applied in a variety of markets to protect pipelines in oil, gas, mining, wastewater and water applications and extending this to the rehabilitation of commercial structures. Many types of infrastructure must be protected from the corrosive and abrasive materials that pass through or near them. The Company’s expertise in non-disruptive corrosion engineering and abrasion protection is now wide-ranging, opening new markets for growth. The Company has a long history of product development and intellectual property management. The Company manufactures most of the engineered solutions it creates as well as the specialized equipment required to install them. Finally, decades of experience give the Company an advantage in understanding municipal, energy, mining, industrial and commercial customers. Strong customer relationships and brand recognition allow the Company to support the expansion of existing and innovative technologies into new high growth end markets.

The Company originally incorporated in Delaware in 1980 to act as the exclusive United States licensee of the Insituform^® cured-in-place pipe (“CIPP”) process, which Insituform’s founder invented in 1971. The Insituform^® CIPP process served as the first trenchless technology for rehabilitating sewer pipelines and has enabled municipalities and private industry to avoid the extraordinary expense and extreme disruption that can result from conventional “dig-and-replace” methods. For the past 40 years, the Company has maintained its leadership position in the CIPP market from manufacturing, to technological innovations, and market share.

In order to strengthen the Company’s ability to service the emerging demands of the infrastructure protection market and to better position the Company for sustainable growth, the Company embarked on a diversification strategy in 2009 to expand its product and service portfolio and its geographical reach. Through a series of strategic initiatives and complementary acquisitions, the Company now possesses one of the broadest portfolios of cost-effective solutions for rehabilitating aging or deteriorating ~~pipelines~~infrastructure and protecting new ~~pipelines~~infrastructure from ~~corrosion. The Company’s business activities include research~~corrosion worldwide. Management believes the depth and ~~development, manufacturing, distribution, installation, coating and insulation, cathodic protection and licensing. The Company’s~~breadth of its products and services ~~are currently utilized~~within the Energy and ~~performed in more than 70 countries across six continents.~~

~~Acquisitions/Strategic Initiatives~~

~~During~~Mining, Commercial and Structural and Water and Wastewater platforms make it a leading “one-stop” provider for the ~~first quarter of 2009, the Company acquired two companies that significantly expanded the range of products~~world’s infrastructure rehabilitation and ~~services the Company offers in the energy and mining sector.~~

protection needs.

On ~~February 20, 2009, the Company acquired the business of The Bayou Companies,~~October 25, 2011, Insituform Technologies, LLC ~~and its related entities~~(formerly known as Insituform Technologies, Inc. (“~~Bayou”~~Insituform”)) and the noncontrolling interests of certain subsidiaries of Bayou. Bayou provides cost-effective solutions to energy and infrastructure companies primarily in the Gulf of Mexico and North America. Bayou’s products and services include internal and external pipeline coating, lining, weighting, insulation, project management and logistics. Bayou also provides specialty fabrication services for offshore deepwater installations. The purchase price for Bayou was $127.9 million in cash. Pursuant to the acquisition agreement, the Company agreed to pay up to an additional $7.5 million plus 50% of Bayou’s excess earnings if the Bayou business achieves certain financial performance targets overreorganized by creating a ~~three-year period~~new holding company structure (the ~~“earnout”~~“Corporate Reorganization”). The ~~Company recorded its estimate of~~new parent company, Aegion Corporation (“Aegion” or the ~~fair value of the Bayou earnout at $5.0 million~~“Company”), includes Insituform as a direct, wholly-owned subsidiary. As part of the ~~acquisition accounting in March 2009. In the third quarter~~Corporate Reorganization, Insituform’s outstanding shares of ~~2009, the Company revised its estimate~~common stock (and associated attached preferred stock rights) were automatically converted, on a share for share basis, into identical shares of Aegion common stock (and associated attached preferred stock rights).

Upon effectiveness of the ~~fair value~~Corporate Reorganization, Aegion’s certificate of incorporation, bylaws, executive officers and board of directors were identical to Insituform’s in effect immediately prior to the Bayou earnout to $3.4 million and reduced operating expenses in the third quarter of 2009 by $1.6 million. In the third quarter of 2010, based on year-to-date results for Bayou, the Company revised its estimate of the fair value of the Bayou earnout to $1.7 million and reduced operating expenses in the third quarter of 2010 by $1.7 million. The aggregate purchase price for the noncontrolling interests was $8.5 million and consisted of $4.5 million in cash, a $1.5 million promissory note and 149,016 shares of the Company’s common stock with a value of $2.5 million. The Company used proceeds from its equity offering completed in February 2009 to fund the cash purchase price for Bayou and a portion of the purchase price for the noncontrolling i nterests.

~~On March 31, 2009, the Company acquired Corrpro Companies, Inc. (“Corrpro”). Corrpro is a premier provider of corrosion protection and pipeline maintenance services in North America~~Corporate Reorganization, and the ~~United Kingdom. Corrpro’s comprehensive line~~rights, privileges and interests of fully-integrated corrosion protection products and services includes: engineering; product and material sales; construction and installation; inspection, monitoring and maintenance; and coatings. The purchase price for Corrpro consisted of cash consideration paidInsituform’s former stockholders remained the same with respect to the Corrpro shareholders of $65.2 million. In addition, the Company repaid $26.3 million of indebtedness of Corrpro. The total acquisition cost for Corrpro was approximately $91.5 million. The Company paid the purchase price for Corrpro with borrowings under its credit facility entered into in March 2009, along with cash on h and.

~~The Company performed an evaluation of the guidance included in FASB ASC 280,~~ ~~Segment Reporting~~ ~~(“FASB ASC 280”), and FASB ASC 350,~~ ~~Intangibles – Goodwill and Other~~ (“FASB ASC 350”). Based on that evaluation, the Company included Bayou and Corrpro as part of its Energy and Mining reportable segment. See Note 9 for additional information regarding the Company’s segments.

~~In accordance with FASB ASC 805,~~ ~~Business Combinations~~ ~~(“FASB ASC 805”)~~, the Company expensed all costs related to the acquisitions in the first quarter of 2009. The total costs related to the Bayou and Corrpro acquisitions were $8.2 million, which consisted of acquisition costs of $7.3 million and severance costs for certain Corrpro employees of $0.9 million. For presentation purposes, the Company included the $1.7 million and $1.6 million reductions in earnout discussed above as a reduction to the acquisition-related expenses line on the consolidated statement of income in 2010 and 2009, respectively. In addition, the Company incurred $1.2 million in costs directly related to its stock offering. The se costs were recorded as a reduction to additional paid-in capital on the consolidated balance sheet.

Bayou contributed revenues and net income to the Company for the period from February 20, 2009 through December 31, 2009 of $66.4 million and $0.5 million, respectively. Corrpro contributed revenues and net income to the Company for the period from March 31, 2009 through December 31, 2009 of $132.9 million and $6.6 million, respectively. The following unaudited pro forma summary presents combined information of the Company as if these business combinations had occurred on January 1, 2008 (in thousands):

Twelve Months Ended
December 31,

2009 (1)
2008

Revenues $ 778,059 $ 857,552
Net income(2)
8,358 45,755

~~_________~~

~~(1)~~

Includes $9.7 million of expense items related to after-tax acquisition-related costs incurred by the Company, Bayou and Corrpro and $8.2 million of after-tax expenses related to mark-to-market of Corrpro warrants prior to the acquisition, early termination fees and the write-off of deferred financing fees related to previously outstanding Corrpro debt.

~~(2)~~

~~Includes amortization of identified intangibles and depreciation of the excess of fair value of acquired fixed assets over their pre-acquired recorded value from purchase price allocation.~~

~~The following table summarizes the consideration transferred to acquire Bayou and Corrpro at the respective acquisition date (in thousands):~~

Bayou Corrpro
Cash and repayment of debt $ 132,419 $ 91,549
Issuance of Insituform shares to Bayou’s noncontrolling interest shareholders 2,500 –
Six-month note payable to noncontrolling interest shareholders 1,500 –
Estimated earnout payments to Bayou shareholders 5,000 –
Net working capital adjustment to purchase price (722 ) –
Total consideration transferred $ 140,697 $ 91,549

The Company has completed its purchase price accounting of the acquisitions in accordance with the guidance included in FASB ASC 805. The following table summarizes the amounts of identified assets acquired and liabilities assumed from Bayou and Corrpro at their respective acquisition date fair value, as well as the fair value of the noncontrolling interests in Bayou at the acquisition date (in thousands):

     Bayou       Corrpro
Cash $ 68 $ 14,186
Receivables and cost and estimated earnings in excess of billings 17,543 31,824
Inventories 3,349 10,498
Prepaid expenses and other current assets 556 2,886
Property, plant and equipment 50,816 14,966
Identified intangible assets 32,111 38,786
Investments 21,286 –
Other assets 59 11,169
    Accounts payable, accrued expenses and billings in excess of cost and estimated earnings (8,191 ) (30,747 )
Other long-term liabilities (8,002 ) (25,028 )
Total identifiable net assets
$ 109,595 $ 68,540

Total consideration transferred $ 140,697 $ 91,549
Less:  total identifiable net assets 109,595 68,540
Goodwill $ 31,102 $ 23,009

On June 30, 2009, the Company acquired the shares of its joint venture partner, VSL International Limited (“VSL”), in Insituform Asia Limited (“Insituform-Hong Kong”), the Company’s Hong Kong joint venture, and Insituform Pacific Pty Limited (“Insituform-Australia”), the Company’s Australian joint venture, in order to expand the Company’s operations in both Hong Kong and Australia. Prior to these acquisitions, the Company owned fifty percent (50%) of the shares in each entity and VSL owned the other fifty percent (50%) interest in each entity. The aggregate purchase price for VSL’s fifty percent (50%) interests in both companies was approximately $0.3 million.

~~The Company recorded $3.4 million of goodwill in its Asia-Pacific Sewer Rehabilitation segment~~new holding company. Additionally, as a result of the ~~Insituform-Hong Kong~~Corporate Reorganization, Aegion is deemed the successor registrant to Insituform under the Securities Exchange Act of 1934, as amended (the “Exchange Act”), and ~~Insituform-Australia transactions.~~shares of Aegion common stock are deemed registered under Section 12(g) of the Exchange Act.

Acquisitions/Strategic Initiatives/Divestitures

Energy and Mining Segment

On July 1, 2013, the Company acquired the equity interests of Brinderson, L.P., a California limited partnership, General Energy Services, a California corporation, and Brinderson Constructors, Inc., a California corporation (collectively, “Brinderson”). The ~~goodwill amount exceeds the aggregate~~transaction purchase price ~~because~~was $150.0 million, which resulted in a cash purchase price at closing was $147.6 million after preliminary working capital adjustments and an adjustment to account for cash held in the business at closing. The cash purchase price was funded by borrowings under the Company’s ~~investment~~new $650.0 million senior secured credit facility as discussed in ~~Insituform-Hong Kong~~Note 5. Brinderson is a leading integrated service provider of maintenance, construction, engineering and ~~Insituform-Australia prior~~turnaround activities for the upstream and downstream oil and gas markets. Primarily focused on serving large oil and gas customers in California, Brinderson’s competitive advantages include its industry-leading safety record, a strong reputation for reliability and quality and comprehensive solutions needed for upstream oil field and downstream major refinery maintenance, repairs and retrofits. These core competencies position Brinderson to meet the ~~acquisitions was~~growing demand for non-discretionary operating and maintenance expenditures.

During the second quarter of 2013, the Company’s Board of Directors approved a ~~deficit.~~plan of liquidation for its Bayou Welding Works (“BWW”) business in an effort to improve the Company’s overall financial performance and align the operations with its long-term strategic initiatives. BWW provided specialty welding and fabrication services from its facility in New Iberia, Louisiana. Financial results for BWW were part of the Company’s Energy and Mining segment for financial reporting purposes. BWW ceased bidding new work and substantially completed all ongoing projects during the second quarter of 2013. As a result of the closure of BWW, Aegion recognized a pre-tax, non-cash charge of approximately $3.9 million ($2.4 million after-tax, or $0.06 per diluted share) to reflect the impairment of goodwill and intangible assets. The Company also ~~contributed~~recognized additional ~~capital into these entities in order to allow Insituform-Hong Kong~~non-cash impairment charges for equipment and ~~Insituform-Australia to make payments to VSL in relation to~~other assets of approximately ~~$1.5~~$1.1 million of intercompany debt. In addition, the Company took responsibility to provide support under its credit facility for Insituform-Hong Kong’s and Insituform-Australia’s existing working capital and performance bonding needs. The Company has completed its final purchase price account ing for the acquisitions. In accordance with FASB ASC 805, the Company expensed all costs related to these acquisitions on a pre-tax basis ($0.7 million on an after-tax basis, or $0.02 per diluted share), which also was recorded in the second quarter of ~~2009. As~~2013. The Company expects the cash liquidation value to approximate net asset value. Net asset value is determined using recorded amounts for assets and liabilities, which are based on Level 3 inputs as defined in Note 10. The Company also incurred cash charges to exit the business of approximately $0.1 million on a ~~result~~pre-tax and post-tax basis, which included property, equipment and vehicle lease termination and buyout costs, employee termination benefits and retention incentives, among other ancillary shut-down expenses. Final liquidation of BWW’s assets is expected to occur by year-end 2014.

In March 2012, the ~~acquisitions, the financial statements of Insituform-Hong Kong and Insituform-Australia are included~~Company organized United Special Technical Services LLC (“USTS”), a joint venture located in the ~~Company’s consolidated financial statements at December 31, 2009. For all periods prior to June 30, 2009,~~Sultanate of Oman between United Pipeline Systems and Special Technical Services LLC, an Omani company (“STS”), for the ~~Company accounted for these entities using~~purpose of executing pipeline, piping and flow line high-density polyethylene lining services throughout the ~~equity method of accounting.~~

~~On October, 30, 2009, the Company expanded its coating~~Middle East and ~~insulation services in Canada with the acquisition of the pipe coating and insulation facility and related assets of Garneau, Inc. through its joint venture Bayou Perma-Pipe Canada, Ltd. (“BPPC”).~~Northern Africa. The Company holds a fifty-one percent (51%) ~~majority~~equity interest in ~~BPPC through its wholly-owned Canadian subsidiary, Insituform Technologies Limited.~~USTS and STS holds the remaining forty-nine percent (49%) equity interest. USTS initiated operations in the second quarter of 2012.

In June 2011, the Company acquired all of the outstanding stock of CRTS, Inc. (“CRTS”). The ~~aggregate~~ purchase price ~~was $11.3~~at closing included a provision whereby CRTS shareholders would be able to earn up to an additional $15.0 million upon the achievement of ~~which~~certain performance targets over the three-year period ended December 31, 2013 (the “CRTS earnout”). During 2013, the Company paid ~~$5.8 million. In accordance with FASB ASC 805,~~$2.1 million to the sellers relating to a portion of the performance target being met for 2012. During 2013 and 2012, the Company ~~expensed all costs~~also reversed $3.9 million and $8.2 million, respectively, related to the ~~acquisition~~CRTS earnout, due to operating results being below the target amounts in the ~~fourth~~purchase agreement. As of December 31, 2013, the Company calculated the fair value of the contingent consideration arrangement to be $0.7 million, which is based on Level 3 inputs as defined in Note 10.

On February 20, 2014, the Company received formal notice from its equity partner in Bayou Coating, L.L.C. (“Bayou Coating”), Stupp Brothers Inc. (“Stupp”), that Stupp is exercising its option to acquire the Company’s equity interests in Bayou Coating at forty-nine percent (49%) of the book value of Bayou Coating, as of December 31, 2013, with such book value to be determined on the basis of Bayou Coating’s federal information tax return for 2013. The Company currently expects this transaction to close on March 31, 2014. The Company had previously received an indication from Stupp of its intent to exercise such option and, in the second quarter of ~~2009. The~~2013 in connection with such indication, the Company ~~did not record any goodwill~~recognized a non-cash charge of $2.7 million ($1.8 million post-tax) related to ~~this purchase. As a result of~~ the ~~acquisition,~~goodwill allocated to the ~~financial statements of BPPC are included in the Company’s consolidated financial statements subsequent to October 30, 2009.~~

~~On December 3, 2009, the Company acquired the twenty-five percent (25%) noncontrolling interest in its European CIPP tube manufacturing operation, now known~~joint venture as Insituform Linings Limited (“Insituform Linings”). The aggregate purchase price for the remaining twenty-five percent (25%) interest in Insituform Linings was $3.9 million. The Company did not record any goodwill related to this purchase and the excesspart of the purchase price ~~over~~accounting associated with the 2009 acquisition of The Bayou Companies, LLC (“Bayou”). The non-cash charge represents the Company’s current estimate of the difference between the carrying value of the ~~noncontrolling interest was recorded as a reduction to equity.~~

~~On January 29, 2010,~~investment on the balance sheet and the amount the Company ~~acquired~~will receive in connection with the exercise. The Company does not expect any additional material impacts to its ~~Singapore licensee, Insitu Envirotech (S.E. Asia) Pte Ltd, in order~~consolidated balance sheet related to ~~expand its Singapore operations. The purchase price was $1.3 million. This entity is now a wholly-owned subsidiary.~~the consummation of Stupp’s exercise of this option.

~~In February 2010,~~Through Bayou, the Company ~~expanded its pipe coating services through the formation of~~holds a fifty-nine percent (59%) equity interest in Delta Double Jointing, ~~L.L.C.~~LLC (“Bayou Delta”) through which the Company offers pipe jointing and other services for the steel-coated pipe industry. The ~~Company, through its Bayou subsidiary, owns a fifty-nine percent (59%) ownership interest in Bayou Delta with the~~ remaining forty-one percent (41%) ~~ownership belonging to~~is currently held by Bayou ~~Coating, L.L.C. (“Bayou Coating”), which~~Coating. As stated above, the Company currently holds through ~~its~~ Bayou ~~subsidiary, holds~~ a forty-nine percent (49%) equity interest in Bayou Coating, but Stupp has exercised its option to acquire such forty-nine percent (49%) equity interest. The Company currently holds an option to acquire the forty-one percent (41%) interest in Bayou Delta and, on February

20, 2014, provided notice to Stupp regarding the Company's intent to exercise such option. The Company currently anticipates closing on the acquisition of such forty-one percent (41%) interest in Bayou Delta on March 31, 2014.

International Water and Wastewater Segment

In June 2013, the Company sold its fifty percent (50%) interest in Insituform Rohrsanierungstechniken GmbH (“Insituform-Germany”) to Per Aarsleff A/S, a Danish company (“Aarsleff”). Insituform-Germany, a company that was jointly owned by Aegion and Aarsleff, is active in the business of no-dig pipe rehabilitation in Germany, Slovakia and Hungary. The sale price was €14 million, approximately $18.3 million. The sale resulted in a gain on the sale of approximately $11.3 million (net of $0.5 million of transaction expenses) recorded in other income (expense) on the consolidated statement of operations. In connection with the sale, Insituform-Germany also entered into a tube supply agreement with the Company whereby Insituform-Germany will purchase on an annual basis at least GBP 2.3 million, approximately $3.6 million, of felt cured-in-place pipe (“CIPP”) liners during the two-year period from June 26, 2013 to June 30, 2015.

Commercial and Structural Segment

In April 2012, the Company purchased Fyfe Group LLC’s Asian operations (“Fyfe Asia”), which included all of the equity interests of Fyfe Asia Pte. Ltd, a Singaporean entity (and its interest in two joint ventures located in Borneo and Indonesia), Fyfe (Hong Kong) Limited, Fibrwrap Construction (M) Sdn Bhd, a Malaysian entity, Fyfe Japan Co. Ltd., a Japanese entity, and Fibrwrap Construction Pte. Ltd and Technologies & Art Pte. Ltd., Singaporean entities. Customers in India and China are served through a product supply and license arrangement. Fyfe Asia provides Fibrwrap^® installation services throughout Asia, as well as provides product and engineering support to installers and applicators of fiber reinforced polymer systems in Asia. The cash purchase price at closing was $40.7 million. The purchase price was funded out of the Company’s cash balances and by borrowing $18.0 million against the Company’s line of credit.

In January 2012, the Company purchased Fyfe Group LLC’s Latin American operations (“Fyfe LA”), which included all of the equity interests of Fyfe Latin America S.A., a Panamanian entity (and its interest in various joint ventures located in Peru, Costa Rica, Chile and Colombia), Fyfe – Latin America S.A. de C.V., an El Salvadorian entity, and Fibrwrap Construction Latin America S.A., a Panamanian entity. Fyfe LA provides Fibrwrap^® installation services throughout Latin America, as well as product and engineering support to installers and applicators of fiber reinforced polymer systems in Latin America. The cash purchase price at closing was $2.3 million and funded out of the Company’s cash balances. During the first quarter of 2012, the Company paid the sellers an additional $1.1 million based on a preliminary working capital adjustment. An annual payout can be earned based on the achievement of certain performance targets in each year over the three-year period ending December 31, 2014. No annual payout has been earned to date as the performance targets have not been met. As of December 31, 2013, the Company calculated the fair value of the contingent consideration arrangement to be zero, which is based on Level 3 inputs as defined in Note 10.

In August 2011, the Company purchased the North American business of Fyfe Group, LLC (“Fyfe NA”) for a purchase price at closing of $115.8 million (subject to working capital adjustments calculated from an agreed upon target), which was funded by borrowings under the Company’s credit facility. Fyfe NA, based in San Diego, California, is a pioneer and industry leader in the development, manufacture and installation of fiber reinforced polymer (FRP) systems for the structural repair, strengthening and restoration of pipelines (water, wastewater, oil and gas), buildings (commercial, federal, municipal, residential and parking structures), bridges and tunnels and waterfront structures. Fyfe NA has a comprehensive portfolio of patented and other proprietary technologies and products, including its Tyfo^® Fibrwrap^® System, the first fiber solution on the market that complies with 2009 International Building Code requirements. Fyfe NA’s product and service offering also includes pipeline rehabilitation, concrete repair, epoxy injection, corrosion mitigation and specialty coatings services. This purchase resulted in a new reportable segment for the Company, the Commercial and Structural segment.

Purchase Price Accounting

The Company accounts for its acquisitions in accordance with FASB ASC 805, Business Combinations. The Company records finite-lived intangible assets at their determined fair value related to customer relationships, backlog, trade names and trademarks and patents and other acquired technologies. The acquisitions generally result in goodwill related to, among other things, growth opportunities and synergies. The goodwill associated with the Brinderson acquisition is deductible for tax purposes. The Company completed its accounting for Fyfe LA and Fyfe Asia during the quarters ended December 31, 2012 and March 31, 2013, respectively, subject to final working capital adjustments and settlement of escrow accounts. At December 31, 2013, the Company substantially completed its accounting for Brinderson with the exception of final working capital adjustments. As the Company completes its final accounting for this acquisition, there might be changes, none of which are expected to be material to the financial statements.

The Fyfe LA, Fyfe Asia and Brinderson acquisitions made the following contributions to the Company’s revenues and profits during the years ended December 31, 2013 and 2012 (in thousands):



	2013				2012
	Brinderson		Fyfe Asia/ Fyfe LA		Brinderson		Fyfe Asia/ Fyfe LA
Revenues	$	108,233	$	16,986	$	—	$	12,894
Net income ⁽¹⁾	4,838		1,091		—		781

_____________________


⁽¹⁾	Net income includes an allocation of corporate expenses that is not necessarily an indication of the entity’s operations on a stand alone basis.

The following unaudited pro forma summary presents combined information of the Company as if the Fyfe LA, Fyfe Asia and Brinderson acquisitions had occurred at the beginning of the year preceding their acquisition (in thousands):



	Years Ended December 31,
	2013		2012
Revenues	$	1,201,521	$	1,239,825
Net income ⁽¹⁾	49,410		65,995

_____________________


⁽¹⁾	Includes pro-forma adjustments for purchase price depreciation and amortization as if those intangibles were recorded as of January 1 of the year preceding the respective acquisition date.

Total cash consideration recorded to acquire Fyfe Asia was $40.1 million. This amount included purchase price at closing of $40.7 million less a working capital adjustment of $0.6 million. The transaction purchase price to acquire Brinderson was $150.0 million, which resulted in a cash purchase price at closing of $147.6 million after preliminary working capital adjustments and an adjustment to account for cash held in the business at closing.

The following table summarizes the fair value of identified assets and liabilities of the Brinderson and Fyfe Asia acquisitions at their respective acquisition dates (in thousands):



	Brinderson			Fyfe Asia
Cash	$	3,842		$	1,303
Receivables and cost and estimated earnings in excess of billings	28,353			9,022
Prepaid expenses and other current assets	655			1,262
Property, plant and equipment	6,848			938
Identified intangible assets	60,210			14,130
Other assets	1,071			—
Accounts payable, accrued expenses and billings in excess of cost and estimated earnings	(16,122		)	(4,109		)
Deferred tax liabilities	—			(2,410		)
Total identifiable net assets	$	84,857		$	20,136

Total consideration	$	147,605		$	40,144
Less: total identifiable net assets	84,857			20,136
Goodwill at December 31, 2013	$	62,748		$	20,008

The following adjustments were made during the first quarter of 2013 relative to the acquisition of Fyfe Asia as the Company finalized its purchase price accounting, subject to final working capital adjustments and settlement of escrow accounts (in thousands):



Total identifiable net assets at December 31, 2012	$	20,342
Accounts payable, accrued expenses and billings in excess of cost and estimated earnings	206
Total identifiable net assets at December 31, 2013	$	20,136

Goodwill at December 31, 2012	$	19,802
Increase in goodwill related to acquisition	206
Goodwill at December 31, 2013	$	20,008

The following adjustments were made during the fourth quarter of 2013 relative to the acquisition of Brinderson as the Company substantially completed its purchase price accounting (in thousands):



Total identifiable net assets at July 1, 2013	$	84,907
Accounts payable, accrued expenses and billings in excess of cost and estimated earnings	50
Total identifiable net assets at December 31, 2013	$	84,857

Goodwill at July 1, 2013	$	62,698
Increase in goodwill related to acquisition	50
Goodwill at December 31, 2013	$	62,748

2. ~~SUMMARY OF~~ ACCOUNTING POLICIES

Principles of Consolidation

The consolidated financial statements include the accounts of the Company, its wholly-owned subsidiaries and ~~its~~ majority-owned subsidiaries in which the Company is deemed to be the primary beneficiary. ~~For contractual joint ventures, the Company recognizes revenue, costs and profits on its portion of the contract using percentage-of-completion accounting.~~ All significant intercompany transactions and balances have been eliminated. The prior periods (2009 and 2008) statements of cash flows have been modified to present patent expenditures as investing activities rather than operating activities. The effect of this modification was to increase net cash provided by operating activities by the prior period amount shown as patent-related expenditures. Additionally, certain prior year amounts have been reclassified to conform to the current ~~ye ar~~year presentation.

Accounting Estimates

The preparation of financial statements in conformity with accounting principles generally accepted in the United States requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities and disclosure

of contingent assets and liabilities at the date of the financial statements and the reported amounts of revenues and expenses during the reporting period. Actual results could differ from those estimates.

Foreign Currency Translation

For the Company’s international subsidiaries, the local currency is generally the functional currency. Assets and liabilities of these subsidiaries are translated into U.S. dollars using rates in effect at the balance sheet date while revenues and expenses are translated into U.S. dollars using average exchange rates. The cumulative translation adjustment resulting from changes in exchange rates are included in the consolidated balance sheets as a component of accumulated other comprehensive income (loss) in total stockholders’ equity. Net foreign exchange transaction gains (losses) are included in other income (expense) in the consolidated statements of operations.

53The Company’s accumulated other comprehensive income is comprised of three main components: (i) currency translation; (ii) derivatives; and (iii) gains and losses associated with the Company’s defined benefit plan in the United Kingdom.

As of December 31, 2013 and 2012, the Company had $0.6 million and $14.3 million, respectively, related to currency translation adjustments, $1.2 million and $0.8 million, respectively, related to derivative transactions and $0.2 million and $0.2 million, respectively, related to pension activity in accumulated other comprehensive income.

Research and Development

The Company expenses research and development costs as incurred. Research and development costs of $2.6 million, $1.8 million and $2.2 million for the years ended December 31, 2013, 2012 and 2011, respectively, are included in operating expenses in the accompanying consolidated statements of income.

Taxation

The Company provides for estimated income taxes payable or refundable on current year income tax returns as well as the estimated future tax effects attributable to temporary differences and carryforwards, based upon enacted tax laws and tax rates, and in accordance with FASB ASC 740, Income Taxes (“FASB ASC 740”). FASB ASC 740 also requires that a valuation allowance be recorded against any deferred tax assets that are not likely to be realized in the future. Refer to Note 8 for additional information regarding taxes on income.

Equity-Based Compensation

The Company records expense for equity-based compensation awards, including ~~stock appreciation rights,~~ restricted shares of common stock, performance awards, stock options and stock units based on the fair value recognition provisions contained in FASB ASC 718, Compensation – Stock Compensation(“ (“FASB ASC 718”). The Company records the expense using a straight-line basis over the ~~three-year~~ vesting ~~period.~~period of the award. Fair value of stock option awards is determined using an option pricing model. Assumptions regarding volatility, expected term, dividend yield and risk-free rate are required for valuation of stock option awards. Volatility and expected term assumptions are based on the Company’s historical experience. The risk-free rate is based on a U.S. Treasury note ~~wit h~~with a maturity similar to the option award’s expected term. Fair value of restricted stock, restricted stock unit and deferred stock unit awards is determined using the Company’s closing stock price on the award date. The shares of restricted stock and restricted stock units that are awarded are subject to performance ~~and~~and/or service restrictions. The Company makes forfeiture rate assumptions in connection with the valuation of restricted stock and restricted stock unit awards that could be different than actual experience. During 2012, the Company introduced three-year performance based stock unit awards for a number of its key employees. These awards are subject to performance and service restrictions. The awards contain financial targets for each year in the three-year performance period as well as cumulative totals. These awards have a threshold, target and maximum amount of shares that can be awarded based on the Company’s financial results for each year and cumulative three-year period. The awards allow an employee to earn back a portion of the shares that were unearned in a prior year, if cumulative performance targets are met. Discussion of the Company’s application of FASB ASC 718 is described in Note 7.

Revenues

Revenues include construction, engineering and installation revenues that are recognized using the percentage-of-completion method of accounting in the ratio of costs incurred to estimated final costs. Revenues from change orders, extra work and variations in the scope of work are recognized when it is probable that they will result in additional contract revenue and when the amount can be reliably estimated. During 2013, the Company recorded revenue related to claims in its discontinued operations, which has been determined to be probable and reasonably estimated. The amount of this revenue is immaterial to the Company’s consolidated financial statements. Contract costs include all direct material and labor costs and those indirect costs related to contract performance, such as indirect labor, supplies, tools and equipment costs. The Company expenses all pre-contract costs in the period these costs are incurred. Since the financial reporting of these contracts depends on estimates, which are assessed continually during the term of these contracts, recognized revenues and profit are subject to revisions as the contract progresses to completion. Revisions in profit estimates are reflected in the period in which the facts that give rise to the revision become known. If material, the effects of any changes in estimates are disclosed in the notes to the consolidated financial statements.

When estimates indicate that a loss will be incurred on a contract, ~~on completion,~~ a provision for the expected loss is ~~record ed~~recorded in the period in which the loss becomes evident. ~~At December 31, 2010, 2009 and 2008, the Company had provided $0.8 million, $0.3 million and $0.2 million, respectively, for expected losses on contracts.~~ Revenues from change orders, extra work and variations in the scope of work ~~and claims~~ are recognized when it is probable that they will result in additional contract revenue and when the amount can be reliably estimated. ~~Revenues for~~Any revenue recognized is only to the ~~year ended December 31, 2008 include $8.0 million of royalty revenues pursuant to a settlement agreement.~~

~~Bayou is party to certain contracts that provide for multiple value-added coating and welding services to customer pipe for use in pipelines~~extent costs have been recognized in the ~~energy and mining industries, which~~period. Additionally, the Company ~~considers to be multiple deliverables. The Company recognizes revenue~~expenses all costs for ~~each deliverable as a separate unit of accounting under the accounting guidance of FASB ASC 605,~~ ~~Revenue Recognition~~ (“~~FASB ASC 605~~”). Each service, or deliverable, the Company provides under these contracts could be performed without the other services. Additionally, each service is separately p riced, has stand-alone value and the fair value of each service can be readily determined. Performance of each of the deliverables is observable due to the nature of the services. Customer inspection typically occurs at the completion of each service before another service is performed.

~~Research and Development~~

The Company expenses research and development costs as incurred. Research and development costs of $2.7 million, $2.6 million and $3.0 million for the years ended December 31, 2010, 2009 and 2008, respectively, are included in operating expensesunpriced change orders in the ~~accompanying consolidated statements of income.~~period in which they are incurred.

~~Taxation~~

~~The Company provides for estimated income taxes payable or refundable on current year income tax returns~~Revenues from Brinderson are derived mainly from multiple engineering and construction type contracts, as well as maintenance contracts, under multi-year long-term Master Service Agreements and alliance contracts. Brinderson enters into contracts with its customers that contain three principal types of pricing provisions: time and materials, cost plus fixed fee and fixed price. Although the ~~estimated future tax effects attributable~~terms of these contracts vary, most are made pursuant to ~~temporary differences~~cost reimbursable contracts on a time and ~~carryforwards,~~materials basis under which revenues are recorded based on costs incurred at agreed upon contractual rates. Brinderson also performs services on a cost plus fixed fee basis under which revenues are recorded based upon ~~enacted tax laws and tax~~costs incurred at agreed upon rates and ~~in accordance with FASB ASC 740,~~ ~~Income Taxes~~ ~~(“FASB ASC 740”). FASB ASC 740 also requires that~~ a ~~valuation allowance be recorded against any deferred tax assets that are not likely to be realized~~proportionate amount of the fixed fee or percentage stipulated in the ~~future. Refer to Note 8 for additional information regarding taxes on income.~~contract.

Earnings ~~Per~~per Share

Earnings per share have been calculated using the following share information:

           2010          2009          2008
Weighted average number of common shares used for basic EPS 39,040,386 37,134,295 27,537,702
Effect of dilutive stock options, stock appreciation rights,
  restricted stock and deferred stock units (Note 7)
373,494 379,232 642,229
Weighted average number of common shares and dilutive
  potential common stock used in diluted EPS
39,413,880 37,513,527 28,179,931



	2013	2012	2011
Weighted average number of common shares used for basic EPS	38,692,658	39,222,737	39,362,138
Effect of dilutive stock options and restricted and deferred stock unit awards	389,684	313,654	336,317
Weighted average number of common shares and dilutive potential common stock used in dilutive EPS	39,082,342	39,536,391	39,698,455

The Company excluded ~~265,268, 408,515~~318,026, 223,536 and ~~491,083~~189,202 stock options in ~~2010, 2009~~2013, 2012 and ~~2008,~~2011, respectively, from the diluted earnings per share calculations for the Company’s common stock because they were anti-dilutive as their exercise prices were greater than the average market price of common shares for each period.

Classification of Current Assets and Current Liabilities

The Company includes in current assets and current liabilities certain amounts realizable and payable under construction contracts that may extend beyond one year. The construction periods on projects undertaken by the Company generally range from less than one month to 24 months.

Cash, Cash Equivalents and Restricted Cash

The Company classifies highly liquid investments with original maturities of 90 days or less as cash equivalents. Recorded book values are reasonable estimates of fair value for cash and cash equivalents. Restricted cash consists of payments from certain customers placed in escrow in lieu of retention in case of potential issues regarding future job performance by the Company or advance customer payments and compensating balances for bank undertakings in Europe. Restricted cash is similar to retainage and is therefore classified as a current asset, consistent with the Company’s policy on retainage.

~~Retainage~~

Many of the contracts under which the Company performs work contain retainage provisions. Retainage refers to that portion of revenue earned by the Company but held for payment by the customer pending satisfactory completion of the project. Unless reserved, the Company believes that all amounts retained by customers under such provisions are fully collectible. Retainage on active contracts is classified as a current asset regardless of the term of the contract. Retainage is generally collected within one year of the completion of a contract, although collection can take up to two years. As of December 31, 2010, retainage receivables aged greater than 365 days approximated six percent of the total retainage balance and collectibility was assessed as de scribed in the allowance for doubtful accounts section below.

~~Allowance for Doubtful Accounts~~

Management makes estimates of the uncollectibility of accounts receivable and retainage. The Company records an allowance based on specific accounts to reduce receivables, including retainage, to the amount that is expected to be collected. The specific allowances are reevaluated and adjusted as additional information is received. After all reasonable attempts to collect the receivable or retainage have been explored, the account is written off against the allowance.

Inventories

Inventories are stated at the lower of cost (first-in, first-out) or market. Actual cost is used to value raw materials and supplies. Standard cost, which approximates actual cost, is used to value work-in-process, finished goods and construction materials. Standard cost includes direct labor, raw materials and manufacturing overhead based on normal capacity. For certain businesses within our Energy and Mining segment, the Company uses actual costs or average costs for all classes of inventory.

Retainage

Many of the contracts under which the Company performs work contain retainage provisions. Retainage refers to that portion of revenue earned by the Company but held for payment by the customer pending satisfactory completion of the project. The Company generally invoices its customers periodically as work is completed. Under ordinary circumstances, collection from municipalities is made within 60 to 90 days of billing. In most cases, 5% to 15% of the contract value is withheld by the municipal owner pending satisfactory completion of the project. Collections from other customers are generally made within 30 to 45 days of billing. Unless reserved, the Company believes that all amounts retained by customers under such provisions are fully collectible. Retainage on active contracts is classified as a current asset regardless of the term of the contract. Retainage is generally collected within one year of the completion of a contract, although collection can extend beyond one year from time to time. As of December 31, 2013, retainage receivables aged greater than 365 days approximated 12% of the total retainage balance and collectibility was assessed as described in the allowance for doubtful accounts section below.

Allowance for Doubtful Accounts

Long-Lived Assets

Property, plant and equipment ~~goodwill~~ and other identified intangibles (primarily customer relationships, patents and acquired technologies, trademarks, licenses, contract backlog and non-compete agreements) are recorded at cost and, except for goodwill and certain trademarks, are depreciated or amortized on a straight-line basis over their estimated useful lives. Changes in circumstances such as technological advances, changes to the Company’s business model or changes in the Company’s capital strategy can result in the actual useful lives differing from the Company’s estimates. If the Company determines that the useful life of its property, plant and equipment or its identified intangible assets should be changed, the Company would depreciate or amortize the net book value in excess of the salvage value over its revised remaining useful life, thereby increasing or decreasing depreciation or amortization ~~ex pense.~~

expense.

Long-lived assets, including property, plant and equipment and other intangibles, are reviewed for impairment whenever events or changes in circumstances indicate that the carrying amount of an asset may not be recoverable. Such impairment tests are based on a comparison of undiscounted cash flows to the recorded value of the asset. The estimate of cash flow is based upon, among other things, assumptions about expected future operating performance. The Company’s estimates of undiscounted cash flow may differ from actual cash flow due to, among other things, technological changes, economic conditions, changes to its business model or changes in its operating performance. If the sum of the undiscounted cash flows (excluding interest) is less than the carrying value, the Company recognizes an impairment loss, measured as the amount by which the carrying value exceeds the fair value of the asset. The Company did not identify any long-lived assets of its continuing operations as being impaired during ~~2010, 2009~~2013, 2012 or ~~2008.~~

2011.

Goodwill

~~The Company’s recorded goodwill by reportable segment was as follows at December 31, 2010 and 2009 (in millions):~~

2010 2009
North American Sewer Rehabilitation $ 102.3 $ 102.3
European Sewer Rehabilitation 19.8 19.8
Asia-Pacific Sewer Rehabilitation 5.0 3.4
Energy and Mining 55.0 55.0
Total goodwill
$ 182.1 $ 180.5

~~The following table presents a reconciliation of the beginning and ending balances of the Company’s goodwill at December 31, 2010 and 2009 (in millions):~~

2010 2009
Beginning balance $ 180.5 $ 123.0
Additions to goodwill through acquisitions(1)(2)
1.6 57.5
Goodwill at end of period(3)
$ 182.1 $ 180.5

~~_____________________~~

~~(1)~~

~~During 2010, the Company recorded goodwill of $1.6 million related to the acquisition of its licensee in Singapore.~~

~~(2)~~

During 2009, the Company recorded goodwill of $54.1 million related to the acquisitions of Bayou and Corrpro and $3.4 million related to the acquisition of its joint venture partner’s interests in Insituform-Australia and Insituform-Hong Kong.

~~(3)~~

~~The Company does not have any accumulated impairment charges.~~

Under FASB ASC 350, Intangibles–Goodwill and Other(“ (“FASB ASC 350”), the Company assesses recoverability of goodwill on an annual basis or when events or changes in circumstances indicate that the carrying amount of goodwill may not be recoverable. The annual assessment was last completed as of October 1, ~~2010.~~2013. See Note 4 for additional information regarding goodwill by operating segment. Factors that could potentially trigger an interim impairment review include (but are not limited to):

●	significant underperformance of a ~~segment relative to expected, historical or projected future operating results;~~

●	~~significant negative industry or economic trends;~~

●	~~significant changes in the strategy for a segment including extended slowdowns in a segment’s market;~~

●	~~a decrease in the Company’s market capitalization below its book value for an extended period of time; and~~

●	~~a significant change in regulations.~~

~~If the sum of the discounted cash flows is less than the carrying value, an impairment charge will be recognized to the extent that the implied fair value of the goodwill balances for each~~ reporting unit ~~is less than~~relative to expected, historical or forecasted future operating results;

significant negative industry or economic trends;

significant changes in the ~~related carrying value.~~strategy for a reporting unit including extended slowdowns in a segment’s market;

a decrease in the Company’s market capitalization below its book value; and

a significant change in regulations.

In accordance with the provisions of FASB ASC 350, the Company determined the fair value of its reporting units at the annual impairment assessment date and compared such fair value to the carrying value of those reporting units to determine if there were any ~~indication~~indications of goodwill impairment. ~~The~~For 2013, the Company’s reporting units for purposes of assessing goodwill ~~are~~were North American ~~Sewer Rehabilitation,~~Water and Wastewater, European ~~Sewer Rehabilitation,~~Water and Wastewater, Asia-Pacific ~~Sewer Rehabilitation, UPS,~~Water and Wastewater, United Pipeline Systems, Bayou, Corrpro, CRTS, Brinderson and ~~Corrpro.~~

the Commercial and Structural group. For purposes of its goodwill testing in 2013, the Company had nine reporting units; however, it aggregated Fyfe North America, Fyfe Asia and Fyfe Latin America, which are all part of the Commercial and Structural reporting segment, to form a single reporting unit. During the Company’s annual impairment testing in 2013, it tested goodwill for impairment for all three Fyfe reporting units individually and in the aggregate, in addition to testing the goodwill associated with the other eight reporting units. There were no indications of impairment of goodwill noted during this testing. Going forward, the Company’s annual impairment test will be performed at the Commercial and Structural reporting unit level.

Fair value of reporting units is determined using a combination of two valuation methods: a market approach and an income approach with each method given equal weight in determining the fair value assigned to each reporting unit. Absent an indication of fair value from a potential buyer or similar specific transaction, the Company believes the use of these two methods provides a reasonable estimate of a reporting unit’s fair value. Assumptions common to both methods are operating plans and economic ~~projections,~~outlooks, which are used to ~~project~~forecast future revenues, earnings and ~~after tax~~after-tax cash flows for each reporting unit. These assumptions are applied consistently for both methods.

The market approach estimates fair value by first determining earnings before interest, taxes, depreciation and amortization (“EBITDA”) multiples for comparable publicly-traded companies with similar characteristics of the reporting unit. The EBITDA

multiples for comparable companies isare based upon current enterprise value. The enterprise value is based upon current market capitalization and includes a ~~15%~~ control premium. Management believes this approach is appropriate because it provides a fair value estimate using multiples from entities with operations and economic characteristics comparable to the Company’s reporting units.

The income approach is based on ~~projected~~forecasted future (debt-free) cash flows that are discounted to present value using factors that consider timing and risk of future cash flows. Management believes this approach is appropriate because it provides a fair value estimate based upon the reporting unit’s expected long-term operating cash flow performance. Discounted cash flow projections are based on financial forecasts developed from operating plans and economic ~~projections,~~outlooks, growth rates, estimates of future expected changes in operating margins, terminal value growth rates, future capital expenditures and changes in working capital requirements.

Estimates of discounted cash flows may differ from actual cash flows due to, among other things, changes in economic conditions, changes to business models, changes in the Company’s weighted average cost of capital or changes in operating performance. ~~An impairment charge will be recognized~~

The discount rate applied to the ~~extent that the implied fair value~~estimated future cash flows is one of the ~~goodwill balances~~most significant assumptions utilized under the income approach. Management determines the appropriate discount rate for each of the Company’s reporting units based on the Weighted Average Cost of Capital (“WACC”) for each individual reporting unit. The WACC takes into account both the pre-tax cost of debt and cost of equity (a major component of the cost of equity is the current risk-free rate on twenty year U.S. Treasury bonds). As each reporting unit has a different risk profile based on the nature of its operations, including market-based factors, the WACC for each reporting unit ~~is less than~~may differ. Accordingly, the ~~related carrying value.~~WACCs were adjusted, as appropriate, to account for company specific risk premiums. The discount rates used for calculating the fair values in our October 2013 goodwill review were commensurate with the risks associated with each reporting unit and ranged from 13.0% to 16.5%.

~~Significant~~Other significant assumptions used in the Company’s October ~~2010~~2013 goodwill review included: (i) ~~five- to eight-year compound~~ annual revenue growth rates generally ranging from 2% to ~~35%~~17%; (ii) sustained or slightly increased gross margins; (iii) peer group EBITDA multiples; and (iv) terminal values for each reporting unit using a long-term growth rate of ~~3%; and (iii) discount rates ranging from 13.0% to17.0%~~1% to 3.5%. If actual results differ from estimates used in these calculations, ~~the Company~~we could incur future impairment charges.

During the ~~Company’s~~ assessment of ~~the~~its reporting units’ fair values in relation to their respective carrying values, ~~all six reporting units~~at the high end, five had a fair value in excess of ~~20%~~30% of their carrying value and, at the low end, two were within 10% percent of their carrying value. These two reporting units were Bayou and Fyfe North America, whose fair value exceeded their carrying value by 2.8% and 5.4%, respectively. Due to a lack of project activity available in the Gulf of Mexico market, customer-driven project delays and discontinued operations, the fair value of the Bayou reporting unit decreased $32.3 million, or 17.2%, from the prior year analysis. The impairment analysis includes an annual revenue growth rate of 10%; however, only a modest increase in revenue is contemplated in year one, but at a level that is still below our five-year average, and higher growth rates thereafter due to visibility of larger bidding opportunities in the Gulf of Mexico. The analysis also assumes a weighted average cost of capital of 13.5% and a long-term growth rate of 3%. For Fyfe North America, the values derived from both the income approach and market approach decreased from the prior year analysis; however, the overall fair value of the reporting unit increased 2.7% from the prior year due to a difference in working capital levels as of the valuation dates. The assumptions used in the impairment analysis include an annual revenue growth rate of 17%, due to the low revenue levels achieved in 2013, a weighted average cost of capital of 16.0% and a long-term growth rate of 3.5%. The total value of goodwill recorded at the impairment testing date for these two reporting units was $72.9 million.

As with all of its reporting units, the Company continuously monitors potential triggering events that may cause an interim impairment valuation.

Investments in Affiliated Companies

In June 2013, the Company sold its fifty percent (50%) interest in Insituform-Germany to Aarsleff. Insituform-Germany, a company that was jointly owned by Aegion and Aarsleff, is active in the business of no-dig pipe rehabilitation in Germany, Slovakia and Hungary. The sale price was €14 million, approximately $18.3 million. The sale resulted in a gain on the sale of approximately $11.3 million (net of $0.5 million of transaction expenses) recorded in other income (expense) on the consolidated statement of operations. In connection with the sale, Insituform-Germany also entered into a tube supply agreement with the Company whereby Insituform-Germany will purchase on an annual basis at least GBP 2.3 million, approximately $3.6 million, of felt cured-in-place pipe (“CIPP”) liners during the two-year period from June 26, 2013 to June 30, 2015.

The Company, ~~holds one-half of the equity interests in Insituform Rohrsanierungstechniken GmbH (“Insituform-Germany”),~~ through ~~our indirect~~its subsidiary, Insituform Technologies ~~Limited (UK). Through its Bayou subsidiary, the Company holds~~Netherlands BV, owns a forty-nine percent ~~(49%~~(49%) ofequity interest in WCU Corrosion Technologies Pte. Ltd. (“WCU”). WCU offers the Company’s Tite Liner^® process in the oil and gas sector and onshore corrosion services in Asia and Australia.

The Company, through its subsidiary, Bayou, owns a forty-nine percent (49%) equity interest in Bayou ~~Coating, LLC (“Bayou Coating”). Starting in January 2014, and solely during the month of January in each calendar year thereafter, the Company’s equity partner in~~Coating. Bayou Coating ~~has~~provides pipe coating services from its facility in Baton Rouge, Louisiana, and is adjacent to and services the ~~option to acquire (i) the assets~~Stupp pipe mill in Baton Rouge. See discussion of Bayou Coating ~~at their book value as of the end of the prior fiscal year (determined on the basis of Bayou Coating’s federal information tax return for such fiscal year), or (ii) the equity interest of Bayou~~ in ~~Bayou Coating at 49% of the value of Bayou Coating.~~Note 1.

Investments in entities in which the Company does not have ~~significant~~ control ~~nor meet~~or is not the ~~characteristics~~primary beneficiary of a variable interest entity, and for which the Company has 20% to 50% ownership or has the ability to exert significant influence, are accounted for by the equity method. At December 31, ~~2010~~2013 and ~~2009,~~2012, the investments in affiliated companies on the Company’s consolidated balance ~~sheet~~sheets were ~~$28.4~~$9.1 million and ~~$27.6~~$19.2 million, respectively. These investments in affiliated companies contained certain intangible assets of $8.0 million and $8.7 million at December 31, 2010 and 2009, respectively, related to Bayou Coating associated with the acquisition of Bayou. During 2010 and 2009, the Company recorded $0.7 million and $0.8 million, respectively, in amortization expense on the equity earnings in affiliated companies line of the income statement in relation to these intan gibles.

Net income presented below for ~~2010~~the years ended December 31, 2013 and 2012 includes Bayou Coating’s forty-one percent ~~(41%~~(41%) interest in Delta Double Jointing, LLC (“Bayou ~~Delta,~~Delta”), which is eliminated for purposes of determining the Company’s equity in earnings of affiliated companies because Bayou Delta is consolidated in the Company’s financial statements as a result of its additional ownership through another Company subsidiary.

The Company’s equity in earnings of affiliated companies for all periods presented below ~~include acquisition related~~includes acquisition-related depreciation and amortization expense and ~~are~~is net of income taxes associated with these earnings. Additionally, for the six months ended June 30, 2009 and the twelve months ended December 31, 2008, equity in earnings of affiliated companies include the Company̵ 7;s portion of the earnings of Insituform-Hong Kong and Insituform-Asia. The remaining interests in these entities were acquired on June 30, 2009 as discussed in Note 1.

Financial data for these investments in affiliated companies at December 31, ~~2010~~2013 and ~~2009~~2012 and for each of the years in the three-year period ended December 31, ~~2010~~2013 are summarized in the following tables (in thousands):

Balance sheet data 2010 2009

Current assets $ 38,977 $ 38,094
Non-current assets 22,279 23,900
Current liabilities 18,589 19,581

Income statement data 2010 2009 2008

Revenue $ 134,884 $ 108,567 $ 107,158
Gross profit 36,095 25,029 20,806
Net income 19,497 6,062 2,859
Equity in earnings of affiliated companies 7,291 1,192 (246 )



	December 31,
Balance sheet data	2013		2012⁽¹⁾
Current assets	$	10,220	$	32,752
Non-current assets	10,022		22,495
Current liabilities	1,743		16,006
Non-current liabilities	—		484



Income statement data	2013 ⁽¹⁾		2012		2011
Revenue	$	89,157	$	141,233	$	134,716
Gross profit	27,336		40,342		29,651
Net income	17,946		22,009		12,512
Equity in earnings of affiliated companies	5,159		6,359		3,471

_____________________

⁽¹⁾ Includes the financial data of Insituform-Germany through the date of its sale in June 2013.

Investments in Variable Interest Entities

The Company evaluates all transactions and relationships with variable interest entities (“VIE”) to determine whether the Company is the primary beneficiary of the entities in accordance with FASB ASC 810, ~~Consolidation~~ ~~(“FASB ASC 810”)~~Consolidation..

The Company’s overall methodology for evaluating transactions and relationships under the VIE requirements includes the following two steps:

determine whether the entity meets the criteria to qualify as a VIE; and

●

~~determine whether the entity meets the criteria to qualify as a VIE; and~~

●

determine whether the Company is the primary beneficiary of the VIE.

In performing the first step, the significant factors and judgments that the Company considers in making the determination as to whether an entity is a VIE include:

the design of the entity, including the nature of its risks and the purpose for which the entity was created, to determine the variability that the entity was designed to create and distribute to its interest holders;

●

the nature of the Company’s involvement with the entity;

●

~~the nature of the Company’s involvement with the entity;~~

whether control of the entity may be achieved through arrangements that do not involve voting equity;

●

~~whether control of the entity may be achieved through arrangements that do not involve voting equity;~~

whether there is sufficient equity investment at risk to finance the activities of the entity; and

●

~~whether there is sufficient equity investment at risk to finance the activities of the entity; and~~

●

whether parties other than the equity holders have the obligation to absorb expected losses or the right to receive residual returns.

If the Company identifies a VIE based on the above considerations, it then performs the second step and evaluates whether it is the primary beneficiary of the VIE by considering the following significant factors and judgments:

whether the entity has the power to direct the activities of a variable interest entity that most significantly impact the entity’s economic performance; and

whether the entity has the obligation to absorb losses of the entity that could potentially be significant to the variable interest entity or the right to receive benefits from the entity that could potentially be significant to the variable interest entity.

●

~~whether the entity has the~~ ~~power to direct the activities of a variable interest entity that most significantly impact the entity’s economic performance; and~~

●

~~whether the entity has t~~he obligation to absorb losses of the entity that could potentially be significant to the variable interest entity or the right to receive benefits from the entity that could potentially be significant to the variable interest entity.

Based on its evaluation of the above factors and judgments, as of December 31, ~~2010,~~2013, the Company consolidated any VIEs in which it was the primary beneficiary. Also, as of December 31, ~~2010,~~2013, the Company had significant interests in certain VIEs primarily through its joint venture arrangements for which ~~it did not have controlling financial interests and, accordingly,~~the Company was not the primary beneficiary. ~~There~~Other than the sale of Insituform-Germany discussed in Note 1, there have been no changes in the status of the Company’s VIE or primary beneficiary designations ~~that occurred~~ during ~~2010.~~2013.

~~The Company develops joint bids on certain contracts with its joint venture partners. The success~~Financial data for consolidated variable interest entities at December 31, 2013 and 2012 and for each of the ~~joint venture depends largely on~~years in the ~~satisfactory performance of~~three-year period ended December 31, 2013 are summarized in the following tables (in thousands):



	December 31,
Balance sheet data	2013		2012
Current assets	$	55,651	$	65,251
Non-current assets	47,606		47,086
Current liabilities	33,886		45,604
Non-current liabilities	25,020		23,169



Income statement data	2013		2012		2011
Revenue	$	85,908	$	107,821	$	55,792
Gross profit	12,998		19,625		12,005
Net income	1,892		3,622		1,959

The Company’s joint venture partner of its obligations under the contract. The Company may be required to complete its joint venture partner’s portion of the contract if the joint venture partner were unable to complete its portion and a bond was not available. In such case, the additional obligations could result in reduced profits or, in some cases, significant losses for the Company’s joint ventures. The Company currently assesses the impact of these joint ventures to its consolidated financial position, financial performance and cash flows to be immaterial.

~~Foreign Currency Translation~~

~~Results of operations for foreign~~non-consolidated variable interest entities are ~~translated~~accounted for using the ~~average exchange rates during the period. Current assets~~equity method of accounting and ~~liabilities are translated to U.S. dollars using the exchange rates~~discussed further under “Investments in ~~effect at the balance sheet date, and the related translation adjustments are reported as a separate component of stockholders’ equity.~~

Affiliated Companies” above.

Newly Adopted Accounting Pronouncements

~~FASB ASC 810 establishes accounting~~ASU No. 2013-1 updates standard ASU No. 2011-11 and ~~reporting standards for minority interests, which~~provides guidance to implement the balance sheet offsetting disclosures that require the presentation of gross and net information about transactions that are ~~recharacterized as noncontrolling interests. FASB ASC 810 was revised so that noncontrolling interests~~(1) offset in the financial statements or (2) subject to an enforceable master netting arrangement or similar agreement, regardless of whether the transactions are classified as a component of equity separate from the parent’s equity; purchases or sales of equity interests that do not result in a change in control are accounted for as equity transactions; net income attributable to the noncontrolling interest are included in consolidated net incomeactually offset in the statement of ~~operations;~~financial position. The disclosure requirements are effective for annual reporting periods beginning on or after January 1, 2013, and ~~upon a loss~~interim periods within those annual periods. Refer to Note 10 for discussion of ~~control,~~ the ~~interest sold, as well as any interest retained, is recorded at fair value, with any gain~~new accounting pronouncement.

ASU No. 2013-2 generally provides guidance to improve the reporting of reclassifications out of accumulated other comprehensive income to various components in the income statement. This standard requires an entity to present either parenthetically on the face of the financial statements or ~~loss recognized~~ in ~~earnings. This revision~~the notes, significant amounts reclassified from each component of accumulated other comprehensive income and the income statement line items affected by the reclassification. ASU 2013-2 was effective for ~~the~~fiscal years, and interim periods within those years, beginning after December 15, 2012. The Company as of January 1, 2009. It applies prospectively, except for th e presentation and disclosure requirements, for which it applies retroactively. In addition, FASB ASC 810, amends the consolidation guidance applicable to variable interest entities. The amendments significantly affected the overall consolidation analysis under FASB ASC 810. This phase of FASB ASC 810 became effective for the Company on January 1, 2010 and did not impact the Company’s consolidation conclusions for its variable interest entities.

In January 2010, the FASB issued an amendment to the fair value measurement and disclosure standard improving disclosures about fair value measurements. This amended guidance requires separate disclosure of significant transfers in and out of Levels 1 and 2 and the reasons for the transfers. The amended guidance also requires that in the Level 3 reconciliation, the information about purchases, sales, issuances and settlements be disclosed separately on a gross basis rather than as one net number. The guidance for the Level 1 and 2 disclosures was adopted on January 1, 2010, and did not have a material impact on the Company’s consolidated financial position, results of operations or cash flows. The guidance for the activity in Level 3 disclosures isevaluated this pronouncement effective January 1, ~~2011,~~2013 and determined reclassifications out of accumulated other comprehensive income to various components in the Company anticipates that it will not have a materi al impact on the Company’s consolidated financial position, results of operations or cash flows as the amended guidance provides only disclosure requirements. The Company had no significant transfers between Level 1, 2 or 3 inputs during 2010. Additionally, for purposes of financial reporting, the Company has determined that the carrying value of cash and cash equivalents, accounts receivable, accounts payable and accrued expenses, approximates fair value dueincome statement is immaterial to the ~~short maturities of these instruments.~~

In October 2009, the FASB issued ASU No. 2009-13, “Multiple-Deliverable Revenue Arrangements.” This ASU establishes the accounting and reporting guidance for arrangements including multiple revenue-generating activities and provides amendmentsfinancial statements to the ~~criteria~~Company. Refer to Note 10 for separating deliverables and measuring and allocating arrangement consideration to one or more units of accounting. The amendments also establish a selling price hierarchy for determining the selling price of a deliverable. Significantly enhanced disclosures are also required to provide information about a vendor’s multiple-deliverable revenue arrangements, including information about the nature and terms, significant deliverables, and its performance within arrangements. The amendments also require providing information about the significant judgments made and changes to those judgments and about how the applicationdiscussion of the relative selling-price method affects the timing or amount of revenue recognition. These principals become effective for the Company for periods after January 1, 2011, on a prospective basis. The Company is currently evaluating the impact of the effect of adopting these standards on future financial periods.new accounting pronouncement.

3. SUPPLEMENTAL BALANCE SHEET INFORMATION

Allowance for Doubtful Accounts

Activity in the allowance for doubtful accounts is summarized as follows for the years ended December 31 (in thousands):


	2010			2009		2008
									2013			2012			2011
Balance, at beginning of year	$	2,405		$	1,700	$	2,418		$	2,953		$	3,077		$	2,536
Charged to expense		451			396		46		1,043			428			397
Write-offs and adjustments		(88	)		309		(764	)	(555		)	(552		)	144
Balance, at end of year	$	2,768		$	2,405	$	1,700		$	3,441		$	2,953		$	3,077

Costs and Estimated Earnings on Uncompleted Contracts

Costs and estimated earnings on uncompleted contracts consisted of the following at December 31 (in thousands):

2010 2009

Costs incurred on uncompleted contracts $ 569,856 $ 495,691
Estimated earnings to date 120,595 139,885
Subtotal 690,451 635,576
Less – billings to date (633,519 ) (583,452 )
Total $ 56,932 $ 52,124
Included in the accompanying balance sheets:
Costs and estimated earnings in excess of billings 69,544 64,821
Billings in excess of costs and estimated earnings (12,612 ) (12,697 )
Total $ 56,932 $ 52,124



	2013			2012
Costs incurred on uncompleted contracts	$	740,403		$	664,662
Estimated earnings to date	141,413			183,850
Subtotal	881,816			848,512
Less – billings to date	(826,795		)	(812,324		)
Total	$	55,021		$	36,188
Included in the accompanying balance sheets:
Costs and estimated earnings in excess of billings	79,999			67,740
Billings in excess of costs and estimated earnings	(24,978		)	(31,552		)
Total	$	55,021		$	36,188

Costs and estimated earnings in excess of billings represent work performed that could not be billed either due to contract stipulations or the required contractual documentation has not been finalized. Substantially all unbilled amounts are expected to be billed and collected within one year.

Inventories

Inventories are summarized as follows at December 31 (in thousands):

2010 2009

Raw materials and supplies $ 10,317 $ 7,551
Work-in-process 5,171 3,324
Finished products 9,167 6,245
Construction materials 17,869 15,005
Total $ 42,524 $ 32,125



	2013		2012
Raw materials and supplies	$	19,680	$	16,250
Work-in-process	8,217		8,876
Finished products	12,518		18,056
Construction materials	18,353		15,941
Total	$	58,768	$	59,123

Property, Plant and Equipment

Property, plant and equipment consisted of the following at December 31 (in thousands):


	Estimated Useful Lives (Years)		2010			2009
									Estimated Useful Lives (Years)			2013			2012
Land and land improvements			$	12,582		$	12,379					$	11,964		$	11,437
Buildings and improvements		5 – 40		63,350			59,943		5	—	40	63,870			64,604
Machinery and equipment		4 – 10		159,174			142,386		4	—	10	185,307			177,383
Furniture and fixtures		3 – 10		15,323			13,188		3	—	10	25,848			16,933
Autos and trucks		3 – 10		46,029			38,869		3	—	10	52,145			50,119
Construction in progress				8,921			5,764					31,012			35,507
Subtotal				305,379			272,529					370,146			355,983
Less – Accumulated depreciation				(144,850	)		(124,094	)				(187,843		)	(172,820		)
Total			$	160,529		$	148,435					$	182,303		$	183,163

Depreciation expense was ~~$24.3~~$28.0 million, ~~$22.6~~$27.1 million and ~~$15.7~~$28.6 million for the years ended December 31, ~~2010, 2009~~2013, 2012 and ~~2008,~~2011, respectively.

~~Accounts Payable and~~ Accrued Expenses

~~Accounts payable and accrued~~Accrued expenses consisted of the following at December 31 (in thousands):

2010 2009

Accounts payable – trade $ 106,172 $ 102,985
Estimated casualty and healthcare liabilities 16,930 16,894
Job costs 15,353 16,321
Compensation and bonus accruals 7,029 9,260
Interest 834 894
Job loss reserves 782 348
Total $ 147,100 $ 146,702

~~Casualty Insurance and Healthcare Liabilities~~

The Company obtains actuarial estimates of its casualty insurance liabilities on a quarterly basis and adjusts its reserves accordingly. Estimated casualty insurance and healthcare benefits liabilities are summarized as follows at December 31 (in thousands):

2010 2009

Casualty insurance $ 15,662 $ 14,799
Healthcare benefits 1,268 2,095
Total $ 16,930 $ 16,894



	2013		2012
Vendor and other accrued expenses	$	36,778	$	32,394
Estimated casualty and healthcare liabilities	13,775		12,899
Job costs	13,843		14,077
Accrued compensation	15,942		12,943
Income tax payable and deferred income taxes	10,628		7,267
Total	$	90,966	$	79,580

4. ~~ACQUIRED~~GOODWILL AND INTANGIBLE ASSETS

Goodwill

The following table presents a reconciliation of the beginning and ending balances of the Company’s goodwill at January 1, 2013 and December 31, 2013 (in millions):

~~Amortized intangible~~



	Energy and Mining ⁽¹⁾⁽²⁾			North American Water and Wastewater			International Water and Wastewater		Commercial and Structural ⁽³⁾			Total
Beginning balance at January 1, 2013	$	76.7		$	101.9		$	28.1	$	65.6		$	272.3
Additions to goodwill through acquisitions	62.7			—			—		0.2			62.9
Foreign currency translation	(0.8		)	(0.3		)	0.4		(0.3		)	(1.0		)
Goodwill at December 31, 2013	$	138.6		$	101.6		$	28.5	$	65.5		$	334.2

__________________________

⁽¹⁾

During the second quarter of 2013, the Company approved a plan of liquidation with respect to BWW and, in connection therewith, recorded a write-down of the $1.4 million of goodwill associated with BWW, which operation now is reported as discontinued. Consequently, the goodwill associated with BWW is no longer included in this table. Additionally, all prior year balances have been retrospectively adjusted. For further information, see Note 11.


⁽²⁾	During 2013, the Company recorded an increase of goodwill of $62.7 million related to the Brinderson acquisition.


⁽³⁾	During 2013, the Company recorded an increase of goodwill of $0.2 million related to the Fyfe Asia acquisition.

Intangible Assets

Intangible assets at December 31, 2013 and 2012 were as follows (in thousands):



	As of December 31, 2013 ⁽¹⁾⁽²⁾								As of December 31, 2012
	Weighted Average Useful Lives (Years)	Gross Carrying Amount		Accumulated Amortization			Net Carrying Amount		Gross Carrying Amount		Accumulated Amortization			Net Carrying Amount
License agreements	6	$	3,917	$	(2,977	)	$	940	$	3,925	$	(2,821	)	$	1,104
Backlog	0	4,745		(4,745		)	—		4,756		(4,756		)	—
Leases	13	2,067		(477		)	1,590		2,067		(331		)	1,736
Trademarks	16	21,394		(4,167		)	17,227		21,290		(3,317		)	17,972
Non-competes	5	1,140		(753		)	387		710		(710		)	—
Customer relationships	14	182,703		(28,287		)	154,416		123,301		(18,912		)	104,389
Patents and acquired technology	17	57,419		(22,696		)	34,723		55,672		(21,244		)	34,428
		$	273,385	$	(64,102	)	$	209,283	$	211,721	$	(52,091	)	$	159,629

__________________________

⁽¹⁾

During the second quarter of 2013, the Company approved a plan of liquidation with respect to BWW and, in connection therewith, recorded a write-down of the $2.5 million of intangible assets associated with BWW, which operation now is reported as discontinued. Consequently, the intangible assets and accumulated amortization associated with BWW are no longer included in this table. Additionally, all prior year balances have been retrospectively adjusted. For further information, see Note 11.


⁽²⁾	During the third quarter of 2013, the Company recorded $59.8 million in customer relationships to be amortized over a weighted average life of 15 years and $0.4 million in non-compete agreements to be amortized over a weighted average life of 5 years related to the acquisition of Brinderson, as discussion in Note 1.

As of December 31, 2010 As of December 31, 2009

Weighted
Average
Useful
Lives
(Years)

     Gross
     Carrying
     Amount

Accumulated
Amortization

   Net
   Carrying
   Amount

    Gross
    Carrying
    Amount

Accumulated
Amortization

     Net
     Carrying
     Amount

License agreements 9 $ 3,894 $ (2,465 ) $ 1,429 $ 3,894 $ (2,302 ) $ 1,592
Contract backlog    <1 3,010 (2,999 ) 11 3,010 (1,737 ) 1,273
Leases 20 1,237 (95 ) 1,142 1,237 (44 ) 1,193
Trademarks and tradenames 18 14,400 (1,290 ) 13,110 14,400 (569 ) 13,831
Non-compete agreements 1 740 (589 ) 151 740 (257 ) 483
Customer relationships 15 53,307 (6,530 ) 46,777 53,307 (3,276 ) 50,031
Patents 16 25,519 (14,969 ) 10,550 24,173 (14,265 ) 9,908
   Total $ 102,107 $ (28,937 ) $ 73,170 $ 100,761 $ (22,450 ) $ 78,311

Amortization expense was ~~$6.4~~$12.2 million ~~$5.7~~, $10.5 million and ~~$0.7~~$6.9 million for the years ended December 31, ~~2010, 2009~~2013, 2012 and ~~2008,~~2011, respectively. Estimated amortization expense by year is as follows (in thousands):

~~For year ending December 31, 2011~~	~~$ 4,719~~
~~For year ending December 31, 2012~~	~~4,579~~
~~For year ending December 31, 2013~~	~~4,574~~
~~For year ending December 31, 2014~~	~~4,574~~
~~For year ending December 31, 2015~~	~~4,574~~



2014	$	14,606
2015	14,606
2016	14,602
2017	14,565
2018	14,488

5.	LONG-TERM DEBT AND CREDIT FACILITY

Long-term debt, term note and notes payable consisted of the following at December 31 (in thousands):

	2010		2009
6.54% Senior Notes, Series 2003-A, due April 24, 2013	$	65,000	$	65,000
Term note, current annualized rate 3.28% due March 31, 2012		32,500		42,500
Other notes with interest rates from 5.0% to 10.5%		7,243		6,742

					2013		2012
Term note, current annualized rate 2.21% due July 1, 2018					$	341,250	$	—
Original term note, due August 31, 2016					—		218,750
Line of credit, 2.17% in 2013 and 2.49% in 2012					35,500		26,000
Other notes with interest rates from 3.3% to 6.5%					11,890		10,873
Subtotal		104,743		114,242	388,640		255,623
Less – Current maturities and notes payable		13,028		12,742	22,024		33,775
Total	$	91,715	$	101,500	$	366,616	$	221,848

Principal payments required to be made for each of the next five years ~~and thereafter~~ are summarized as follows (in thousands):


Year	Amount		Amount
2011	$	13,028
2012		26,715
2013		65,000
2014		–	$	22,024
2015		–	31,131
2016			30,625
2017			40,500
2018			264,360
Total	$	104,743	$	388,640

Financing Arrangements

In July 2013, in connection with the Brinderson acquisition, the Company entered into a new $650.0 million senior secured credit facility (the “Credit Facility”) with a syndicate of banks. Bank of America, N.A. served as the administrative agent. Merrill Lynch Pierce Fenner & Smith Incorporated, JPMorgan Securities LLC and U.S. Bank National Association acted as joint lead arrangers and joint book managers in the syndication of the new credit facility. The Credit Facility consists of a $300.0 millionfive-year revolving line of credit and a $350.0 millionfive-year term loan facility, each with a maturity date of July 1, 2018. The Company borrowed the entire term loan and drew $35.5 million against the revolving line of credit from the Credit Facility on July 1, 2013 for the following purposes: (1) to pay the $147.6 million cash purchase price for the Company’s acquisition of Brinderson, L.P., which closed on July 1, 2013; (2) to retire $232.3 million in indebtedness outstanding under the Company’s prior credit facility; and (3) to fund expenses associated with the Credit Facility and the Brinderson acquisition. Additionally, the Company used $7.0 million of its cash on hand to fund these transactions. This Credit Facility replaced the Company’s $500.0 million credit facility entered into on August 31, 2011 (the “Old Credit Facility”).

At Generally, interest will be charged on the principal amounts outstanding under the Credit Facility at the British Bankers Association LIBOR rate plus an applicable rate ranging from 1.25% to 2.25% depending on the Company’s consolidated leverage ratio. The Company can also opt for an interest rate equal to a base rate (as defined in the credit documents) plus an applicable rate, which also is based on the Company’s consolidated leverage ratio. The applicable one month LIBOR borrowing rate (LIBOR plus Company’s applicable rate) as of December 31, ~~2010~~2013 was approximately 2.68%.

The Company’s indebtedness at December 31, 2013 consisted of $341.3 million outstanding from the $350.0 million term loan under the Credit Facility and ~~2009,~~$35.5 million on the line of credit under the Credit Facility. Additionally, the Company and Wasco Coatings UK Ltd. (“Wasco Energy”), a subsidiary of Wah Seong Corporation, loaned Bayou Wasco Insulation, LLC (“Bayou

Wasco”), a joint venture between the Company and Wasco Energy, an aggregate of $14.0 million for the purchase of capital assets in 2012 and 2013, of which $6.9 million (representing funds loaned by Wasco Energy) was designated as third-party debt in the consolidated financial statements. In February 2014, the Company and Wasco Energy agreed to a five-year term on the funds loaned; therefore, the amounts have been reclassified to long-term debt as of December 31, 2013. In connection with the formation of Bayou Perma-Pipe Canada, Ltd. (“BPPC”), the Company and Perma-Pipe Canada, Inc. loaned BPPC an aggregate of $8.0 million for the purchase of capital assets and for operating purposes. Additionally, during January 2012, the Company and Perma-Pipe Canada, Inc. agreed to loan BPPC an additional $6.2 million for the purchase of capital assets increasing the total to $14.2 million. Of such amount, $4.9 million was designated as third-party debt in the Company’s consolidated financial statements. The Company also held $0.1 million of third party notes and bank debt at December 31, 2013.

As of December 31, 2013, the Company had $18.2 million in letters of credit issued and outstanding under the Credit Facility. Of such amount, $10.2 million was collateral for the benefit of certain of our insurance carriers and $8.0 million was for letters of credit or bank guarantees of performance or payment obligations of foreign subsidiaries.

The Company’s indebtedness at December 31, 2012 consisted of $218.8 million outstanding from an original $250.0 million term loan under the Old Credit Facility and $26.0 million on the line of credit under the Old Credit Facility. Additionally, the Company and Wasco Energy loaned Bayou Wasco $11.0 million for the purchase of capital assets in 2012, of which $5.5 million (representing funds loaned by Wasco Energy) was designated as third-party debt in the consolidated financial statements. In connection with the formation of BPPC, the Company and Perma-Pipe Canada, Inc. loaned BPPC an aggregate of $8.0 million for the purchase of capital assets and for operating purposes. Additionally, during January 2012, the Company and Perma-Pipe Canada, Inc. agreed to loan BPPC an additional $6.2 million for the purchase of capital assets increasing the total to $14.2 million. As of December 31, 2012, $4.1 million of the additional $6.2 million had been funded. As of December 31, 2012, $5.2 million of such total amount (representing funds loaned by Perma-Pipe Canada Inc.) was designated as third-party debt in the consolidated financial statements. The Company also held $0.1 million of third party notes and bank debt at December 31, 2012.

At December 31, 2013 and 2012, the estimated fair value of the Company’s long-term debt was approximately ~~$106.0~~$380.1 million and ~~$114.5~~$253.6 million, respectively. Fair value was estimated using market rates for debt of similar risk and ~~maturity.~~maturity and a discounted cash flow model, which are based on Level 3 inputs as defined in Note 10.

~~Financing Arrangements~~

~~On March 31, 2009,~~In July 2013, the Company entered into an interest rate swap agreement, for a notional amount of $175.0 million that is set to expire in July 2016. The notional amount of this swap mirrors the amortization of a $175.0 million portion of the Company’s $350.0 million term loan drawn from the Credit ~~Agreement~~Facility. The swap requires the Company to make a monthly fixed rate payment of 0.87% calculated on the amortizing $175.0 million notional amount, and provides for the Company to receive a payment based upon a variable monthly LIBOR interest rate calculated on the amortizing $175.0 million notional amount. The annualized borrowing rate of the swap at December 31, 2013 was approximately 2.17%. The receipt of the monthly LIBOR-based payment offsets a variable monthly LIBOR-based interest cost on a corresponding $175.0 million portion of the Company’s term loan from the Credit Facility. This interest rate swap is used to partially hedge the interest rate risk associated with ~~Bank~~the volatility of ~~America, N.A.,~~monthly LIBOR rate movement, and will be accounted for as ~~Administrative Agent, Fifth Third Bank, U.S. Bank, National Association, Compass Bank, JPMorgan Chase Bank, N.A., Associated Bank, N.A. and Capital One, N.A (the “Credit Facility”).~~ a cash flow hedge.

The Credit Facility is unsecured and initially consisted of a $50.0 million term loan and a $65.0 million revolving line of credit, each with a maturity date of March 31, 2012. The Company has the ability to increase the amount of the borrowing commitment under the Credit Facility by up to $25.0 million in the aggregate upon the consent of the lenders.



Delaware		45-3117900
(State or other jurisdiction of incorporation or organization)		(I.R.S. Employer Identification No.)

17988 Edison Avenue, Chesterfield, Missouri		63005-1195
(Address of principal executive offices)		(Zip Code)

Registrant’s telephone number, including area code: (636) 530-8000



Large accelerated filer x	Accelerated filer ¨	Non-accelerated filer ¨	Smaller reporting company ¨



	December 31, 2013		December 31, 2012		December 31, 2011
Energy and Mining ^{(1) (2)}	$	429.1	$	240.8	$	253.8
North American Water and Wastewater	241.9		185.0		130.0
International Water and Wastewater	38.2		56.6		58.2
Commercial and Structural	49.8		50.8		19.6
Total backlog	$	759.0	$	533.2	$	461.6

	December 31,
	2010		2009		2008
	(In millions)

North American Sewer Rehabilitation	$	155.7	$	180.9	$	150.8
European Rehabilitation		23.3		37.2		25.2
Asia-Pacific Sewer Rehabilitation		79.8		57.4		46.2
Water Rehabilitation		3.8		7.7		8.2
Energy and Mining		146.1		180.2		18.7
Total	$	408.7	$	463.4	$	249.1

	2005		2006		2007		2008		2009		2010
Insituform Technologies, Inc.	$	100.00	$	133.51	$	76.40	$	101.64	$	117.28	$	136.86

													2008		2009		2010		2011		2012		2013
Aegion Corporation													$	100.00	$	115.39	$	134.64	$	77.91	$	112.70	$	111.17
S&P 500 Total Returns		100.00		115.79		122.16		76.97		97.33		112.00	100.00		126.46		145.51		148.59		172.37		228.19
Old Peer Group		100.00		123.23		206.85		101.53		114.82		129.23	100.00		125.22		148.67		143.91		178.04		223.43
New Peer Group		100.00		123.47		159.10		90.40		113.61		131.11	100.00		139.84		169.64		166.76		200.42		253.45

þ

x	ANNUAL REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934

	For the fiscal year ended December 31, 2013



¨	TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934

	For the transition period from to

	Years Ended December 31,
	2010			2009(1) (2)			2008			2007(3)			2006
	(In thousands, except per share amounts)
INCOME STATEMENT DATA(4):
Revenues	$	914,975		$	726,866		$	536,664		$	495,570		$	527,419
Operating income		87,035			49,117			33,882			13,530			36,311
Income from continuing operations		60,562			30,241			24,076			12,866			26,303
Loss from discontinued operations		(100	)		(4,070	)		(2,436	)		(10,323	)		(1,625	)
Net income		60,462			26,171			21,640			2,543			24,678
Basic earnings (loss) per share:
Income from continuing operations		1.55			0.81			0.87			0.47			0.97
Loss from discontinued operations		(0.01	)		(0.11	)		(0.09	)		(0.38	)		(0.06	)
Net income		1.54			0.70			0.78			0.09			0.91
Diluted earnings (loss) per share:
Income from continuing operations		1.54			0.81			0.86			0.47			0.96
Loss from discontinued operations		(0.01	)		(0.11	)		(0.09	)		(0.38	)		(0.06	)
Net income		1.53			0.70			0.77			0.09			0.90

BALANCE SHEET DATA:
Unrestricted cash and cash equivalents	$	114,829		$	106,064		$	99,321		$	78,961		$	96,389
Working capital, net of unrestricted cash		178,262			125,088			115,681			117,862			77,466
Current assets(5)		466,586			405,006			324,672			309,289			310,364
Property, plant and equipment		160,529			148,435			71,423			73,368			76,432
Total assets(5)		921,787			856,294			549,306			541,140			550,069
Current maturities of long-term debt and notes payable		13,028			12,742			938			1,097			16,814
Long-term debt, less current maturities		91,715			101,500			65,000			65,000			65,046
Total liabilities(5)		306,606			312,772			178,317			185,882			209,277
Total stockholders’ equity		605,806			538,052			367,977			352,241			338,611



	Years Ended December 31,
	2013⁽¹⁾⁽²⁾			2012⁽³⁾⁽⁴⁾			2011⁽⁵⁾⁽⁶⁾			2010			2009⁽⁷⁾⁽⁸⁾
	(In thousands, except per share amounts)
INCOME STATEMENT DATA⁽¹⁰⁾:
Revenues	$	1,091,420		$	1,016,831		$	925,766		$	905,259		$	720,405
Operating income	66,882			81,803			45,707			87,525			50,799
Income from continuing operations ⁽⁹⁾	50,812			54,374			27,134			60,973			31,977
Loss from discontinued operations	(6,461		)	(1,713		)	(587		)	(511		)	(5,806		)
Net income ⁽⁹⁾	44,351			52,661			26,547			60,462			26,171
Basic earnings (loss) per share:
Income from continuing operations ⁽⁹⁾	1.31			1.38			0.68			1.55			0.86
Loss from discontinued operations	(0.17		)	(0.04		)	(0.01		)	(0.01		)	(0.16		)
Net income ⁽⁹⁾	1.14			1.34			0.67			1.54			0.70
Diluted earnings (loss) per share:
Income from continuing operations ⁽⁹⁾	1.30			1.37			0.68			1.54			0.85
Loss from discontinued operations	(0.17		)	(0.04		)	(0.01		)	(0.01		)	(0.15		)
Net income ⁽⁹⁾	1.13			1.33			0.67			1.53			0.70
BALANCE SHEET DATA:
Cash and cash equivalents	$	158,045		$	133,676		$	105,292		$	114,444		$	105,878
Working capital, net of cash	225,358			202,469			219,974			178,647			125,276
Current assets⁽¹¹⁾	603,858			560,661			517,985			466,586			405,006
Property, plant and equipment, net	182,303			183,163			166,614			162,167			148,381
Total assets⁽¹¹⁾	1,362,918			1,217,894			1,124,964			933,310			866,583
Current maturities of long-term debt and notes payable	22,024			33,775			26,541			13,028			12,742
Long-term debt, less current maturities	366,616			221,848			222,868			91,715			101,500
Total liabilities⁽¹¹⁾	635,997			501,774			475,975			306,603			312,772
Total stockholders’ equity	709,368			699,316			640,732			617,332			548,341


⁽¹⁾	2013 results include expenses of $5.8 million related to our acquisition of Brinderson and other targets.


⁽²⁾	2013 results include amounts from our acquisition of Brinderson from its acquisition date of July 1, 2013.


⁽³⁾	2012 results include expenses of $3.1 million related to our acquisitions of Fyfe LA, Fyfe Asia and other targets.


⁽⁴⁾	2012 results include amounts from our acquisitions of Fyfe LA and Fyfe Asia from their acquisition dates of January 4, 2012 and April 5, 2012, respectively.


⁽⁶⁾	2011 results include amounts from our acquisitions of CRTS, Hockway, Fyfe NA from their acquisition dates of June 30, 2011, August 2, 2011 and August 31, 2011, respectively.

~~(2)~~
⁽⁸⁾	2009 results include amounts from our acquisitions of Bayou and Corrpro from their acquisition dates of February 20, 2009 and March 31, 2009, respectively.

~~(3)~~	~~Includes $17.9 million of exit charges recorded in 2007 in connection with the closure of our tunneling business.~~
⁽⁹⁾	All periods presented include amounts attributable to Aegion Corporation.

~~(4)~~
⁽¹⁰⁾	All amounts have been restated for the impact of discontinued operations.

~~(5)~~
⁽¹¹⁾	Includes current assets, total assets and total liabilities of discontinued ~~operations for all periods.~~operations.

●	~~expanding all of our businesses in key emerging markets such as India and Asia;~~
●	growing our water rehabilitation business by leveraging our premier brand and experience of successfully innovating and delivering technologies and services and through selective acquisitions of companies and technologies;
●	expanding our position in the growing and profitable ~~energy and mining sector through organic growth, selective acquisitions of companies and by conducting complimentary product and technology acquisitions;~~
●	~~and~~ streamlining our rehabilitation operations in North America and in Europe by improving project execution, cost management practices, including the reduction of redundant fixed costs, and product mix; and by identifying opportunities to streamline key management functions and processes to improve our profitability.



(dollars in thousands)							Increase (Decrease)
	2013			2012			$			%
Revenues	$	1,091,420		$	1,016,831		$	74,589		7.3	%
Gross profit	247,021			243,754			3,267			1.3
Gross profit margin	22.6		%	24.0		%	n/a			(140	)bp
Operating expenses	178,483			168,846			9,637			5.7
Earnout reversal	(4,175		)	(10,019		)	(5,844		)	(58.3	)
Acquisition-related expenses	5,831			3,124			2,707			86.7
Operating income	66,882			81,803			(14,921		)	(18.2	)
Operating margin	6.1		%	8.0		%	n/a			(190	)bp
Income from continuing operations	52,007			58,562			(6,555		)	(11.2	)



							2013 vs 2012								2012 vs 2011
(dollars in thousands)							Increase (Decrease)								Increase (Decrease)
	2013			2012			$			%		2011			$			%
Revenues	$	562,119		$	513,975		$	48,144		9.4	%	$	420,411		$	93,564		22.3	%
Gross profit	127,563			127,605			(42		)	—		109,308			18,297			16.7
Gross profit margin	22.7		%	24.8		%	n/a			(210	)bp	26.0		%	n/a			(120	)bp
Operating expenses	87,226			77,265			9,961			12.9		71,367			5,898			8.3
Earnout reversal	(3,889		)	(9,654		)	(5,765		)	(59.7	)	(1,700		)	7,954			467.9
Acquisition-related expenses	5,831			—			5,831			n/m		2,682			(2,682		)	n/m
Restructuring charges	—			—			—			—		778			(778		)	n/m
Operating income	38,395			59,994			(21,599		)	(36.0	)	36,181			23,813			65.8
Operating margin	6.8		%	11.7		%	n/a			(490	)bp	8.6		%	n/a			310	bp



	December 31, 2013		December 31, 2012
	(in thousands)
Cash and cash equivalents	$	158,045	$	133,676
Restricted cash	483		382

Payments Due by Period
Cash Obligations(1)(2)(3)(4)(5)	Total		2011		2012		2013		2014		2015		Thereafter

Long-term debt	$	101,715	$	10,000	$	26,715	$	65,000	$	-	$	-	$	-

															Payments Due by Period
Cash Obligations ^{(1) (2) (3) (4) (5)}															Total		2014		2015		2016		2017		2018		Thereafter
Long-term debt and notes payable															$	388,640	$	22,024	$	31,131	$	30,625	$	40,500	$	264,360	$	—
Interest on long-term debt		12,198		5,436		4,637		2,125		-		-		-	33,292		8,576		7,955		7,144		6,346		3,271		—
Operating leases		40,277		13,258		10,804		7,206		4,499		2,855		1,655	51,268		17,559		13,509		8,940		5,457		3,082		2,721
Total contractual cash obligations	$	154,190	$	28,694	$	42,156	$	74,331	$	4,499	$	2,855	$	1,655	$	473,200	$	48,159	$	52,595	$	46,709	$	52,303	$	270,713	$	2,721


⁽¹⁾	Cash obligations are not discounted. See Notes 5 and 9 to the consolidated financial statements contained in this report regarding our long-term debt and credit facility and commitments and contingencies, respectively.

~~(2)~~	~~In March 2009, we borrowed~~
⁽²⁾	Interest on long-term debt was calculated using the ~~entire amount of $50.0 million term loan, of which $32.5 million was outstanding at~~ current annualized rate on our long-term debt as discussed in Note 5 to the consolidated financial statements contained in this report.

~~(3)~~
⁽⁴⁾	Liabilities related to Financial Accounting Standards Board Accounting Standards Codification 740, Income Taxes, have not been included in the table above because we are uncertain as to if or when such amounts may be settled.

~~(4)~~
⁽⁵⁾	There were no material purchase commitments at December 31, ~~2010.~~2013.


North American Sewer Rehabilitation	$	102.3
European Sewer Rehabilitation		19.8
Asia-Pacific Sewer Rehabilitation		5.0
Energy and Mining		55.0
Total goodwill	$	182.1

	December 31, 2010		December 31, 2009

Assets
Current assets
Cash and cash equivalents	$	114,829	$	106,064
Restricted cash		745		1,339
Receivables, net		178,994		147,835
Retainage		28,726		22,656
Costs and estimated earnings in excess of billings		69,544		64,821
Inventories		42,524		32,125
Prepaid expenses and other assets		30,031		28,977
Current assets of discontinued operations		1,193		1,189
Total current assets		466,586		405,006
Property, plant and equipment, less accumulated depreciation		160,529		148,435
Other assets
Goodwill		182,141		180,506
Identified intangible assets, less accumulated amortization		73,170		78,311
Investments in affiliated companies		28,379		27,581
Deferred income tax assets		4,115		4,324
Other assets		4,260		8,827
Total other assets		292,065		299,549
Non-current assets of discontinued operations		2,607		3,304

Total Assets	$	921,787	$	856,294

Liabilities and Equity
Current liabilities
Accounts payable and accrued expenses	$	147,812	$	148,075
Billings in excess of costs and estimated earnings		12,612		12,697
Current maturities of long-term debt, line of credit and notes payable		13,028		12,742
Current liabilities of discontinued operations		43		339
Total current liabilities		173,495		173,853
Long-term debt, less current maturities		91,715		101,500
Deferred income tax liabilities		32,330		24,570
Other liabilities		8,916		12,849
Non-current liabilities of discontinued operations		150		–
Total liabilities		306,606		312,772

Stockholders’ equity
Preferred stock, undesignated, $.10 par – shares authorized 2,000,000; none outstanding		–		–
Common stock, $.01 par – shares authorized 125,000,000 and 60,000,000; shares issued and outstanding 39,246,015 and 38,933,944		392		389
Additional paid-in capital		251,578		242,563
Retained earnings		347,249		286,787
Accumulated other comprehensive income		6,587		8,313
Total stockholders’ equity before noncontrolling interests		605,806		538,052
Noncontrolling interests		9,375		5,470
Total equity		615,181		543,522

Total Liabilities and Equity	$	921,787	$	856,294

	Common Stock Shares $						Additional Paid-In Capital			Retained Earnings		Accumulated Other Comprehensive Income (Loss)			Non- controlling Interests			Total Stockholders’ Equity			Comprehensive Income
BALANCE Dec. 31, 2007		27,470,623		$	275		$	104,332		$	238,976	$	8,958		$	2,717		$	355,258
Net income		–			–			–			21,640		–			925			22,565		$	22,565
Issuance of common stock		47,950			(0	)		887			–		–			–			887			–
Issuance of shares pursuant to deferred stock unit awards		58,953			1			(452	)		–		–			–			(451	)		–
Restricted stock and stock units issued		471,679			5			(5	)		–		–			–			–			–
Forfeitures of restricted stock		(71,420	)		(1	)		(1	)		–		–			–			(2	)		–
Equity based compensation		–			–			4,474			–		–			–			4,474			–
Currency translation adjustment and derivative transactions		–			–			–			–		(11,112	)		(630	)		(11,742	)		(11,742	)
Total comprehensive income																						10,823
Less: total comprehensive income attributable to non-controlling interests																						(295	)
Total comprehensive income attributable to common stockholders																					$	10,528
BALANCE Dec. 31, 2008		27,977,785		$	280		$	109,235		$	260,616	$	(2,154	)	$	3,012		$	370,989
Net income		–			–			–			26,171		–			1,154			27,325		$	27,325
Issuance of common stock		10,573,540			106			130,291			–		–			–			130,397			–
Restricted stock and stock units issued		429,725			4			–			–		–			–			4			–
Issuance of shares pursuant to deferred stock unit awards		21,645			–			–			–		–			–			–			–
Forfeitures of restricted stock		(68,751	)		(1	)		–			–		–			–			(1	)		–
Equity-based compensation		–			–			4,839			–		–			–			4,839			–
Dividend to non-controlling interests		–			–			–			–		–			(959	)		(959	)		–
Purchase of Insituform Linings		–			–			(1,808	)		–		–			(2,171	)		(3,979	)		–
Investments by non-controlling interests		–			–			–			–		–			4,107			4,107			–
Currency translation adjustment and derivative transactions		–			–			6			–		10,467			327			10,800			10,800
Total comprehensive income																						38,125
Less: total comprehensive income attributable to non-controlling interests																						(1,481	)
Total comprehensive income attributable to common stockholders																					$	36,644
BALANCE Dec. 31, 2009		38,933,944		$	389		$	242,563		$	286,787	$	8,313		$	5,470		$	543,522
Net income		–			–			–			60,462		–			1,418			61,880		$	61,880
Issuance of common stock		132,485			1			2,302			–		–			–			2,303			–
Restricted stock issued		184,656			2			–											2
Issuance of shares pursuant to restricted stock units		32,156			–			–			–		–			–			–			–
Issuance of shares pursuant to deferred stock unit awards		9,231			–			–			–		–			–			–			–
Forfeitures of restricted stock		(46,457	)		–			–			–		–			–			–			–
Equity based compensation expense		–			–			6,713			–		–			–			6,713			–
Distribution to non-controlling interests		–			–			–			–		–			(398	)		(398	)		–
Investments by non-controlling interests		–			–			–			–		–			2,578			2,578			–
Currency translation adjustment and derivative transactions		–			–			–			–		(1,726	)		307			(1,419	)		(1,419	)
Total comprehensive income																						60,461
Less: total comprehensive income attributable to non-controlling interests																						(1,725	)
Total comprehensive income attributable to common stockholders																					$	58,736
BALANCE Dec. 31, 2010		39,246,015		$	392		$	251,578		$	347,249	$	6,587		$	9,375		$	615,181

	Twelve Months Ended
	December 31,
	2009 (1)		2008

Revenues	$	778,059	$	857,552
Net income(2)		8,358		45,755

	Bayou			Corrpro
Cash and repayment of debt	$	132,419		$	91,549
Issuance of Insituform shares to Bayou’s noncontrolling interest shareholders		2,500			–
Six-month note payable to noncontrolling interest shareholders		1,500			–
Estimated earnout payments to Bayou shareholders		5,000			–
Net working capital adjustment to purchase price		(722	)		–
Total consideration transferred	$	140,697		$	91,549

	2010		2009
Beginning balance	$	180.5	$	123.0
Additions to goodwill through acquisitions(1)(2)		1.6		57.5
Goodwill at end of period(3)	$	182.1	$	180.5

	2010		2009

Accounts payable – trade	$	106,172	$	102,985
Estimated casualty and healthcare liabilities		16,930		16,894
Job costs		15,353		16,321
Compensation and bonus accruals		7,029		9,260
Interest		834		894
Job loss reserves		782		348
Total	$	147,100	$	146,702

	2010		2009

Casualty insurance	$	15,662	$	14,799
Healthcare benefits		1,268		2,095
Total	$	16,930	$	16,894