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 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, ~~2011.~~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.

~~Reorganization~~

On October 25, 2011, Insituform Technologies, LLC (formerly known as Insituform Technologies, Inc.) reorganized by creating a new holding company structure (the “Corporate Reorganization”). The new parent company, Aegion Corporation (“Aegion”), includes Insituform Technologies, LLC (“Insituform”) as a wholly owned direct subsidiary. As part of the Corporate Reorganization, Insituform’s outstanding shares of 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 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 Corporate Reorganization, and the rights, privileges and interests of Insituform’s former stockholders remain the same with respect to the new holding company. Additionally, as a result of the Corporate Reorganization, Aegion is deemed the successor registrant to Insituform under the Securities Exchange Act of 1934, as amended (the “Exchange Act”), and shares of Aegion common stock are deemed registered under Section 12(g) of the Exchange Act.

Overview

We are a global leader in infrastructure protection and maintenance, providing proprietary technologies and services toto: (i) protect against the corrosion of industrial ~~pipelines~~pipelines; (ii) rehabilitate and ~~for the rehabilitation and strengthening of sewer,~~strengthen water, wastewater, energy and mining piping systems and buildings, bridges, tunnels and waterfront ~~structures. We offer one~~structures; and (iii) utilize integrated professional services in engineering, procurement, construction, maintenance, and turnaround services for a broad range of ~~the broadest portfolios of cost-effective solutions for rehabilitating aging or deteriorating infrastructure and protecting new infrastructure 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 ~~100~~80 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 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 as well as other infrastructure such as buildings, bridges, tunnels, railways and waterfront structures.~~

~~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~~largest independent consulting corrosion protection services for industrial pipelines and rehabilitating and strengthening other infrastructure in most geographic locations. Our business has also incorporated extensive research and development activities.

~~Recent Acquisitions/Strategic Initiatives~~

~~Energy and Mining Segment Expansion~~

~~In early 2009, we expanded our operations~~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. In February 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 provides cost-effective solutions to energy~~cathodic protection and ~~infrastructure companies primarily in~~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 ~~North America. Bayou’s products~~Asia Pacific.

Construction and ~~services~~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 ~~internal~~its industry-leading safety record, a strong reputation for reliability and ~~external~~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 ~~coating,~~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 ~~weighting and insulation. Bayou also provides specialty fabrication and services for offshore deep-water installations, including project management and logistics.~~

~~In March 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)~~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 ~~material sales; (iii) construction~~is a less disruptive and ~~installation; (iv) inspection, monitoring and maintenance; and (v) coatings. Corrpro’s specialty~~more environmentally friendly method for pipe repairs. As mentioned above, we have maintained our leadership position in the ~~corrosion control~~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 ~~cathodic~~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 ~~an electrochemical process that prevents corrosion in new~~for water and wastewater pipes, oil and gas pipelines, as well as commercial and governmental structures and ~~stops~~transportation infrastructure.

Strategic Initiatives and Key Acquisitions to Support our Diversification Strategy

We operate in three distinct markets: energy and 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 ~~corrosion process~~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 ~~existing structures.~~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 ~~October 2009,~~March 2012, 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.~~organized United Special Technical Services LLC (“USTS”), ~~through our~~a joint venture ~~Bayou Perma-Pipe Canada, Ltd.~~located in the Sultanate of Oman between our United Pipeline Systems division and Special Technical Services LLC, an Omani company (“~~BPPC”~~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%) ~~majority~~equity interest in ~~BPPC. BPPC serves as our pipe coating~~USTS and ~~insulation operations in Canada.~~

~~In February 2010, we expanded our pipe coating services through~~STS holds the formation of Delta Double Jointing L.L.C. (“Bayou Delta”) through which we offer 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 Bayou Coating, L.L.C. (“Bayou Coating”), which the Company, through its Bayou subsidiary, holds a~~ forty-nine percent (49%) equity interest.

USTS initiated operations in the second quarter of 2012.

In ~~April~~October 2011, we organized UPS-Aptec Limited, 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 the Caribbean. We hold a fifty-one percent (51%) majority interest in Bayou Wasco, while Wasco Energy Ltd.~~Kingdom between United Pipeline Systems International, Inc., a subsidiary of ~~Wah Seong Corporation Berhad~~our Company (“~~Wasco Energy”~~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 ~~interest. Bayou Wasco is expected to commence providing insulation services by late 2012.~~

In April 2011, we also expanded our Corrpro and United Pipeline Systems (“UPS”) operations in Asia and Australia through our joint venture, WCU Corrosion Technologies Pte. Ltd., located in Singapore (“WCU”). WCU will offer our Tite Liner® ~~process in the oil and gas sector and onshore corrosion services, in each of Asia and Australia. We hold a~~ forty-nine percent (49%) ~~ownership interest in WCU, while Wasco Energy owns~~. On October 21, 2011, the ~~remaining interest. WCU immediately began marketing its products and services.~~

~~In June 2011, we created a~~ joint venture was awarded a $67.3 million contract for the installation of high-density polyethylene liners in ~~Saudi Arabia between Corrpro and Saudi Trading & Research Co., Ltd. (“STARC”). Based~~approximately 135 miles of slurry pipelines located in ~~Al-Khobar, Saudi Arabia since 1992, STARC delivers a wide range of products and services for its clients~~Morocco. The project began in the ~~oil, gas, power~~fourth quarter of 2011 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, will provide 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 will serve as a platform for the continued expansion of our Energy and Mining groupwas substantially completed in the ~~Middle East. Corrpower commenced providing corrosion protections services in early 2012.~~

~~In June 2011, we acquired all~~second half of the outstanding stock of CRTS, Inc., an Oklahoma company (“CRTS”). CRTS delivers patented and proprietary internal and external coating services and equipment for new pipeline construction projects from offices in North America, the Middle East and Brazil. The purchase price was $24.0 million in cash at closing with CRTS shareholders able to earn up to an additional $15.0 million upon the achievement of certain performance targets over the three-year period ending December 31, 2013. ~~The purchase was funded by borrowings against our old line of credit.~~

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 ~~October~~June 2011, we ~~organized UPS-Aptec Limited,~~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 ~~United~~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 ~~between United Pipeline Systems International, Inc.,~~of Saudi Arabia, including engineering, product and material sales, construction, installation, inspection, monitoring and maintenance. The joint venture serves as a ~~subsidiary~~platform for the continued expansion of our ~~Company (“UPS-International”),~~Energy and Allied Pipeline Technologies, SA (“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 (“HDPE”) liners in approximately 135 miles of slurry pipelines located in Morocco. The project beganMining group in the ~~fourth quarter of 2011 and is expected to be completed by~~Middle East. Corrpower commenced providing corrosion prevention services in early ~~2013.~~2012.

In ~~December~~April 2011, we ~~entered into an agreement with Special Technical Services LLC (“STS”), based in the Sultanate of Oman, to form~~organized a joint venture, ~~United Special Technical Services~~Bayou Wasco Insulation, LLC (“~~USTS”~~Bayou Wasco”), to provide insulation services primarily for projects located in the ~~Sultanate~~United States, Central America, the Gulf of ~~Oman,~~ ~~for~~Mexico and the ~~purpose of executing pipeline, piping and flowline high-density polyethylene lining services throughout the Middle East and Northern Africa. Pursuant to the agreement, we will~~Caribbean. We hold a fifty-one percent (51%) ~~equity~~majority interest in ~~USTS~~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 ~~STS will~~United Pipeline Systems operations in Asia and Australia through our joint venture, WCU Corrosion Technologies Pte. Ltd., located in Singapore (“WCU”). WCU offers our Tite Liner^® process in the oil and gas sector and onshore corrosion services, in each of Asia and Australia. We hold ~~the other~~a forty-nine percent (49%) ownership interest in WCU, while Wasco Energy owns the remaining interest. WCU immediately began marketing its products and services.

On February 20, 2014, we received formal notice from our equity ~~interest. We expect USTS~~partner in Bayou Coating, L.L.C. (“Bayou Coating”), Stupp Brothers Inc. (“Stupp”), that Stupp was exercising its option to acquire our 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 ~~operational by~~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 ~~2012.~~2013 in connection with such indication, recognized a non-cash charge of $2.7 million

~~We believe~~ ($1.8 million post-tax) related to the ~~CRTS and Hockway acquisitions~~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 ~~Bayou Wasco, WCU, Corrpower, UPS-APTec Limited~~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 ~~USTS joint ventures~~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 ~~accelerate our growth throughout~~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 ~~Middle East and strengthen the technical resources of our Energy and Mining platform.~~

~~Sewer and Water Rehabilitation Acquisitions~~

two-year period from June 26, 2013 to June 30, 2015.

In ~~June 2009,~~November 2012, we acquired the outstanding shares of our joint venture partner, ~~VSL International~~SPML Infra Limited (“SPML”), an unaffiliated Indian contractor, in Insituform ~~Pacific Pty~~Pipeline Rehabilitation Private Limited (“~~Insituform-Australia”~~Insituform-India”) ~~and Insituform Asia Limited (“Insituform-Hong Kong”), our former Australian and Hong Kong joint ventures, respectively,~~ in order to ~~expand~~continue to pursue business opportunities in India involving CIPP installations and third party tube sales, as well as to promote our ~~operations in both Australia~~other products and ~~Hong Kong. These entities perform sewer and water pipeline rehabilitation~~ services.

The purchase price was 20,000 Indian Rupee. In ~~December 2009,~~addition, we acquired ~~the twenty-five percent (25%) noncontrolling~~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 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 operation and third-party sales.Company.

In January 2010, we acquired our Singaporean CIPP licensee, Insitu Envirotech (S.E. Asia) Pte Ltd (“Insituform-Singapore”). Insituform-Singapore performs sewer rehabilitation services in Southeast Asia.

~~New~~ Commercial and Structural ~~Reportable~~ Segment

In April, 2012, we purchased Fyfe Group’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 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 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 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 ~~new~~ credit facility. We were also granted a one-year exclusive negotiating right to acquire Fyfe Group’s Asian, European and Latin American operations at a purchase price to be agreed upon by the parties at the time of exercise of the right. Fyfe NA, based in San Diego, California, is a pioneer and industry leader in the development, manufacture and installation of ~~fiber reinforced polymer (“FRP”)~~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®~~Tyfo^® Fibrwrap^® System, the first ~~and most comprehensive~~ carbon 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.~~

On January 4, 2012, the Company 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. The purchase price was $2.3 million in cash at closing with the sellers able to earn an additional payout both annually upon achievement of certain performance targets over the three-year period ending December 31, 2014 (the “Fyfe LA earnout”) and upon completion of 2011 and 2012 audited financials based upon a multiple of EBITDA calculation. Fyfe LA provides Fibrwrap installation services throughout Latin America, as well as provides product and engineering support to installers and applicators of the FRP systems in Latin America. The purchase price was funded out of the Company’s cash balances. Fyfe LA will be included in our Commercial and Structural reportable segment.

We are in current negotiations, pursuant to the one-year exclusive negotiating right provided as part of the Fyfe NA transaction, to acquire Fyfe Group’s Asian operations (“Fyfe Asia”) and Fyfe Group’s European operations (“Fyfe Europe”). We currently expect these transactions to close during the first and second quarters of 2012, respectively.

We believe that the Fyfe NA and Fyfe LA acquisitions and the pending acquisitions of Fyfe Asia and Fyfe Europe are solid bases for the establishment of our new Commercial and Structural reporting segment and will expand our overall product and service offering with respect to a broader group of infrastructure assets.

Available Information

Our website is 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

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 HDPE liner that is installed in an industrial pipeline using the Tite Liner^®process. The Safetyliner^™ liner is normally used in natural gas or 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^™ liner also has been used in pipelines as a leak detection system and for dual containment in mine water pipelines.

The ~~Fusion-Bonded Epoxy (“FBE”) 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 ~~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 isprovides a ~~metal alloy used~~unique solution for ~~cathodic protection~~preventing corrosion of steel ~~reinforced~~reinforcements in 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.

~~Sewer~~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.~~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+~~150 psi. The InsituMain^® System has also been certified as complying with ANSI/NSF Standard 61.

Our InsituGuard^®,InsituFlex^® and InsituFold^® ~~Processes~~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 ~~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~~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~~process is ~~an ANSI/NSF 61 certified~~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.

~~In Europe, our~~ 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~~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~~Tyfo^® processes are methods ~~of reinforcing~~applying high strength fiber fabric to strengthen structures and the ~~attachment among~~connections between structural components, ~~therefore~~thereby strengthening, repairing and restoring masonry, concrete, steel and wooden structures. The Fibrwrap^® and ~~TYFO~~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 ~~fiber reinforced polymer.~~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 ~~FibrBot~~FastWrap™ product ~~is a machine for applying~~and process relates to carbon fiber ~~to structures~~and epoxy composite material in sheet form for ~~strengthening.~~strengthening and reinforcement of load-bearing components of buildings and transportation infrastructure.

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

Operations

We operate in three distinct markets: energy and mining; water and wastewater; and commercial and structural services. Management organizes 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 are organized into ~~five~~four reportable segments: Energy and ~~Mining,~~Mining; North American ~~Sewer~~Water and Wastewater; International Water ~~Rehabilitation, European Sewer~~ and ~~Water Rehabilitation, Asia-Pacific Sewer and Water Rehabilitation~~Wastewater; and Commercial and Structural. WeEach segment is regularly ~~review~~reviewed and evaluate our reportable segments. Market changes between the segments are typically independent of each other, unless a macroeconomic event affects the sewer and water 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. Prior toevaluated separately.

During the third quarter of ~~2011,~~2013, we ~~considered Water Rehabilitation to be~~acquired Brinderson. Brinderson is a ~~separate~~leading integrated service provider of maintenance, construction, engineering and turnaround activities for the upstream and downstream oil and gas markets. For reportable ~~segment. Based on an internal~~segment purposes, management reorganization, we have combined previously reported water rehabilitation results for all periods presented, which have not been material, with the geographically separated sewer rehabilitation segments. In connection withreports Brinderson in our ~~acquisition of Fyfe NA, we have designated the Commercial~~Energy and ~~Structural reportable~~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~~Energy and ~~mining~~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. A significant portion of our commercial and structural rehabilitation and strengthening projects is performed under contracts with 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

Our energy and mining operations perform maintenance rehabilitation and corrosion protection services for ~~industrial, mineral,~~ 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 ~~(UPS~~(Corrpro based in Houston, Texas, United Pipeline Systems based in Durango, Colorado, Bayou based in New Iberia, Louisiana, ~~Corrpro based in Houston, Texas,~~ CRTS based in Tulsa, Oklahoma, ~~and~~ Hockway based in the United ~~Kingdom~~Arab Emirates and ~~United Arab Emirates)~~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.

~~UPS performs pipeline rehabilitation services using our proprietary Tite Liner~~® process. Our Bayou business performs internal and external pipeline coating, lining, weighting and insulation, as well as specialty fabrication and services for offshore deep-water installations, including project management and logistics. Our Corrpro business performs fully-integrated corrosion ~~protection~~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.

~~Sewer~~Water and ~~Water~~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 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~~Water and ~~Water Rehabilitation~~Wastewater operations, including research and development, engineering, training and financial support systems, are headquartered in Chesterfield, Missouri. ~~During 2011, tube~~Tube manufacturing and processing facilities for North America ~~were~~are maintained in 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.~~subsidiaries. The results from these operations are included in our ~~European Sewer~~International Water and ~~Water Rehabilitation and Asia-Pacific Sewer and Water 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.

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 Kingdom, Spain and Hong Kong through our existing operations.

Commercial and Structural Operations

Our commercial and structural operations perform rehabilitation and strengthening of pipelines, buildings, bridges, tunnels and waterfront structures throughout the United States and Canada through Fibrwrap Construction Services, headquartered in Ontario, ~~California.~~California, in our Asian markets through our wholly owned subsidiaries and through our joint ventures in Borneo and Indonesia and in our Latin American markets through our joint ventures in Chile, Colombia, Costa Rica and Peru. Through Fyfe Co., headquartered in San Diego, California, we design and manufacture the FRP composite systems used in these applications. Our wholly-owned Fyfe ~~entity~~entities located in El Salvador, ~~provides~~Singapore, Japan, Malaysia and Hong Kong and our Fyfe joint ventures in Borneo and Indonesia, provide product and engineering services throughout Latin America ~~while~~and Asia-Pacific. Our current ~~licensees~~licensee in ~~Singapore, Hong Kong and~~ Greece ~~provide~~provides product and services throughout ~~Asia,~~ the Middle East and Europe.

Licensees

We have granted licenses for the Insituform^® CIPP process covering exclusive and non-exclusive territories, to non-affiliated licensees that provide pipe repair and rehabilitation services throughout their respective licensed territories. The licenses generally grant to the licensee the right to utilize our know-how and the patent rights (where such rights exist) relating to the subject process, and to use our copyrights and trademarks. These licenses have an average term of ten years with a right to renew.

In addition, we license our laterals patent portfolio to nine licensees in the United States for use in the United States and Canada. These licenses are effective until the patents in the portfolio expire.

Our licensees generally are obligated to pay a royalty at a specified rate. Any improvements or modifications a licensee may make in the subject process during the term of the license agreement generally becomes our property or is licensed to us. Should a licensee fail to meet its royalty obligations or other material obligations, we may terminate the license at our discretion. Licensees, upon prior notice to us, may generally terminate the license for certain specified reasons. We may vary the terms of agreements entered into with new licensees according to prevailing conditions.

Fyfe Co. has entered into arrangements in Europe ~~and Asia~~ granting certain third parties the exclusive right to distribute, sell and market Fyfe products in Europe, North Africa, the Middle East, ~~Russia~~ and ~~Asia Pacific.~~Russia. Fyfe Co. also provides a non-exclusive right to use Fyfe’s intellectual property to certain third parties for the purpose of installation and application of the FRP systems throughout these territories. Additionally our ~~subsidiary,~~wholly-owned Fyfe ~~– Latin America S.A. de C.V., which was acquired on January 4, 2012 and is based~~entities located in El Salvador, ~~provides~~Singapore, Japan, Malaysia and Hong Kong and our Fyfe joint ventures in Borneo and Indonesia, provide design, product and engineering support to installers and applicators of the FRP systems in Latin ~~America.~~America and Asia-Pacific. Our joint ventures in Latin America and Asia-Pacific are granted the non-exclusive right to use Fyfe products in their respective territories. Fyfe Co. also periodically licenses on a project-by-project basis its patented technology to both affiliated and third party installers.

Ownership Interests in Operating Licensees and Joint Ventures

Through our subsidiary, INA Acquisition Corp., we hold a fifty-five percent (55%) equity interest in United Pipeline de Mexico S.A. de C.V., our licensee of the Tite Liner^® process in Mexico. The remaining ownership interest in United Pipeline de Mexico S.A. de C.V. is held by Miller Pipeline de Mexico S.A. de C.V., an unaffiliated Mexican company.

Through our subsidiary, ~~Insituform Technologies~~United Pipeline Systems Limited, ~~(Canada),~~ we hold a fifty-one percent (51%) equity interest in ~~BPPC.~~Bayou Perma-Pipe Canada, Ltd. (“BPPC”), our Canadian coating joint venture. The remaining interest is held by Perma-Pipe Canada, Inc., a subsidiary of MFRI, Inc., an unaffiliated U.S. company. This joint venture serves as our pipe coating and insulation operation in Canada.

Through our Bayou subsidiary, we currently hold a forty-nine percent (49%) equity interest in Bayou Coating. The remaining interest is held by Stupp Brothers, Inc. (“Stupp”), a U.S. company. Bayou Coating provides pipe coating services from its facility in Baton Rouge, Louisiana, and is adjacent to and services the Stupp pipe mill in Baton Rouge. ~~Starting in January~~On February 20, 2014, ~~and solely during the month of January in each calendar year thereafter,~~we received formal notice from Stupp ~~has the~~that it is exercising its option to acquire ~~(i)~~our equity interests in Bayou Coating at forty-nine percent (49%) of the ~~assets~~book value of Bayou Coating, ~~at their~~as of December 31, 2013, with such book value ~~as of the end of the prior fiscal year (determined~~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 ~~fiscal year), or (ii)~~option and, in the ~~equity interest~~second quarter of ~~Bayou~~2013 in ~~Bayou Coating at forty-nine percent (49%)~~connection with such indication, we 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.

The non-cash charge represents our current estimate of the difference between the carrying value of ~~Bayou Coating.~~

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.

Through ~~our~~ Bayou, ~~subsidiary,~~ we hold a fifty-nine percent (59%) equity interest in Delta Double Jointing, LLC (“Bayou ~~Delta~~Delta”) through which we offer pipe jointing and other services for the steel-coated pipe industry. The remaining forty-one percent (41%) is currently held by Bayou ~~Coating, in which the Company,~~Coating. As stated above, we currently hold through ~~its~~ Bayou ~~subsidiary, holds~~ a forty-nine percent (49%) equity interest ~~as stated above.~~

in Bayou Coating, but Stupp has exercised its option to acquire such forty-nine percent (49%) equity interest. We currently hold an option to acquire the forty-one percent (41%) interest in Bayou Delta and, on February 20, 2014, provided notice to Stupp regarding our intent to exercise such option. We currently anticipate closing on the acquisition of such forty-one percent (41%) interest in Bayou Delta on March 31, 2014.

Through our subsidiary, Energy & Mining Holding Company, LLC, we hold a fifty-one percent (51%) equity interest in Bayou Wasco through which we will provide insulation services primarily for projects located in the United States, Central America, the Gulf of Mexico and the Caribbean. The other forty-nine percent (49%) equity interest is held by Wasco ~~Energy.~~

Energy, a leading insulation coatings provider based in Malaysia.

Through our subsidiary, Insituform Technologies Netherlands B.V. (“ITNBV”), we hold a forty-nine percent (49%) ownership interest in WCU, located in ~~Singapore, through which we will offer~~Singapore. WCU offers our Tite Liner^® process and our Corrpro^® products and services in the oil and gas sector and onshore corrosion services, in ~~each of~~ Asia and Australia. The other fifty-one percent (51%) equity interest is held by Wasco Energy.

Through our subsidiary, Corrpro Canada, Inc., we hold a seventy-percent (70%) equity interest in Corrpower based in Saudi Arabia, through which we will provide fully integrated corrosion ~~protection~~prevention products and services to government and private sector clients throughout the Kingdom of Saudi Arabia. The other thirty-percent (30%) equity interest is held by STARC, based in Al-Khobar, Saudi Arabia.

Through our subsidiary, UPS International, we hold a fifty-one percent (51%) equity interest in UPS-Aptec Limited, located in the United Kingdom through which we ~~will~~ provide HDPE liner installation ~~services.~~services solely with respect to UPS-Aptec’s contract in Morocco. The other forty-nine percent (49%) equity interest is held by APTec.

~~We have entered into an agreement with STS, based~~Through our subsidiary, ITNBV, we hold a fifty-one percent (51%) equity interest in ~~the Sultanate of Oman, to form a joint venture,~~ USTS located in the Sultanate of Oman for the purpose of executing pipeline, piping and ~~flowline~~flow line HDPE lining services throughout the Middle East and Northern Africa. ~~We will hold a fifty-one percent (51%) equity interest in USTS through our subsidiary, ITNBV, and STS will hold the~~The other forty-nine percent (49%) equity ~~interest. We expect STS~~interest is held by STS.

Prior to ~~be operational by the second quarter of 2012.~~

~~We hold~~June 2013, we held one-half of the equity interests in Insituform Rohrsanierungstechniken GmbH (“Insituform-Germany”), through our subsidiary, Insituform Technologies Limited (UK). Insituform-Germany provides sewer rehabilitation services in Germany and, through its subsidiaries, in Slovakia and Hungary. We ~~license~~licensed certain trademarks to Insituform-Germany for use in Germany, Hungary and Slovakia. The remaining interest in Insituform-Germany iswas held by Per Aarsleff A/S, an unaffiliated Danish contractor.

In June 2013, we sold our fifty percent (50%~~We previously~~) interest in Insituform-Germany. Insituform-Germany. 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 number of contractual joint ventures to develop joint bids on contracts for pipeline rehabilitation projects in India. The joint venture partner for each of these joint ventures is SPML Infra Limited (formerly Subhash Projects and Marketing Ltd.) (“SPML”), an ~~unaffiliated~~ ~~Indian contractor. The joint ventures hold the contracts~~tube supply agreement with the ~~owner and subcontract that portion~~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 ~~work requiring the Insituform~~® ~~CIPP process~~two-year period from June 26, 2013 to Insituform Pipeline Rehabilitation Private Limited, an entity majority owned by us, and minority owned by SPML (“Insituform-India”). Our more recent contracts in India are between the owner and Insituform-India.June 30, 2015.

Through our ~~recent~~Fyfe acquisition ~~of Fyfe LA,~~in Latin America in 2012, we hold ~~equity~~controlling interests in joint ventures in Chile, ~~Colombia,~~ Costa Rica and Peru. Through our subsidiary, Fibrwrap Construction Latin America S.A., we hold (i) a fifty-five percent (55%) equity interest in Fibrwrap Construction Chile S.A. with the other forty-five percent (45%) equity interest held by TecnoAV S.A.; (ii) a fifty-one percent (51%) equity interest in ~~Fibrwrap Construction Colombia S.A.S. with the other forty-nine percent (49%) equity interest held by Carlos Aurelio Hernandez Barragan; (iii) a fifty-one percent (51%) equity interest in~~ Grupo Meltzer Fibrwrap Costa Rica S.A. in Costa Rica with the other forty-nine percent (49%) equity interest held by Constructora Meltzer S.A.; and ~~(iv)~~(iii) a fifty-one percent (51%) equity interest in Fibrwrap Construction Peru S.A.C. with the other forty-nine percent (49%) equity interest held by Top Consult Ingenieria. These joint ventures provide structural retrofitting services throughout their respective territories.

~~We are~~Through our Fyfe acquisition in ~~current negotiations, pursuant to the one-year exclusive negotiating right provided as part of the Fyfe NA transaction, to acquire~~Asia-Pacific in 2012, we hold controlling interests in joint ventures in Borneo and Indonesia. Through our subsidiary, Fyfe Asia Pte. Ltd. we hold (i) a fifty-one percent (51%) equity interest Fyfe Borneo Sdn Bhd., with the other forty-nine percent (49%) equity interest held by C. Tech Sdn Bhd and (ii) a fifty-five percent (55%) equity interest in PT Fyfe ~~Europe. We currently expect these transactions to close during~~Fibrwrap Indonesia, with the ~~first and second quarters of 2012, respectively.~~

other forty-five percent (45%) equity interest held by PT Graha Citra Anugerah Lestari.

We have previously entered into teaming and other cooperative arrangements in various geographic regions throughout the world in order to develop cooperative bids on contracts for our HDPE pipeline rehabilitation and cathodic protection businesses. Typically, the arrangements provide for each participant to complete its respective scope of work, and we are not required to complete the other participant’s scope of work. We continue to investigate opportunities for expanding our business through such arrangements.

We previously entered into contractual joint ventures in other geographic regions in order to develop joint bids on contracts for our pipeline rehabilitation business. Typically, the joint venture entity holds the contract with the owner and subcontracts portions of the work to the joint venture partners. As part of the subcontracts, the partners usually provide bonds to the joint venture. We could be required to complete our joint venture partner’s portion of the contract if the partner were unable to complete its portion and a bond is not available. We continue to investigate opportunities for expanding our business through such arrangements.

Product Development

By using our own laboratories and ~~test~~testing facilities, as well as outside consulting organizations and academic institutions, we continue to develop improvements to our proprietary processes, including the materials used and the methods of manufacturing and installing liners and for protecting and rehabilitating pipelines, buildings, bridges, tunnels and other infrastructure. During the years ended December 31, ~~2011, 2010~~2013, 2012 and ~~2009,~~2011, we spent ~~$2.2~~$2.6 million, ~~$2.7~~$1.8 million and ~~$2.6~~$2.2 million, respectively, on research and development related activities, including engineering.

Customers and Marketing

We offer our products and services to highly diverse markets worldwide. We service municipal, state and federal governments, as well as corporate customers, in numerous industries including energy, oil and gas, mining, general and industrial construction, infrastructure (buildings, bridges, tunnels, railways, etc.), water and wastewater, pipelines, transportation, maritime and defense. Our products and services are currently utilized and performed in more than ~~100~~80 countries across six continents.

We offer our energy and mining platform solutions worldwide to energy and mining and other customers to protect new and existing pipelines and other structures. The marketing of sewer pipeline rehabilitation technologies is focused primarily on the municipal wastewater markets worldwide. We offer our water rehabilitation products to municipal and corporate customers. We offer our commercial and structural products worldwide to certain certified third party installers and applicators and market our installation services to municipal, state, federal and corporate customers worldwide. No customer accounted for more than 10% of our consolidated revenues during the years ended December 31, ~~2011, 2010~~2013, 2012 or ~~2009.~~

2011.

To help shape decision-making at every step, we use a highly-trained, multi-level sales force structured around target markets and key accounts, focusing on engineers, consultants, administrators, technical staff and public officials. Due to the technical nature of our products and services, many of our sales personnel have engineering or technical expertise and experience. We also produce sales literature and presentations, participate in trade shows and execute other marketing programs for our own sales force and those of unaffiliated licensees. Our unaffiliated licensees are responsible for marketing and sales activities in their respective territories. See “Licensees” and “Ownership Interests in Operating Licensees and Joint Ventures” above for a description of our licensing operations and for a description of investments in licensees.

We generally invoice our 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.

Contract Backlog

Contract backlog is our expectation of revenues to be generated from received, signed and uncompleted contracts, the cancellation of which is not ~~currently anticipated.~~anticipated at the time of reporting. The Company assumes that these signed contracts are funded. For its government or municipal contracts, the Company’s customers generally obtain funding through local budgets or pre-approved bond financing. The Company has not undertaken a process to verify funding status of these contracts and, therefore, cannot reasonably estimate what portion, if any, of its contracts in backlog have not been funded. However, the Company has little history of signed contracts being canceled due to the lack of funding. Contract backlog excludes any term contract amounts for which there isare not specific and determinable work ~~released~~releases and projects where we have been advised that we are the low bidder, but have not formally been awarded the contract.

The following table sets forth our consolidated backlog by segment ~~as of December 31, 2011, 2010 and 2009, respectively.~~(in millions):

December 31,
2011 2010 2009
(in millions)

Energy and Mining $ 256.4 $ 146.1 $ 180.2
North American Sewer and Water Rehabilitation 130.0 159.5 188.6
European Sewer and Water Rehabilitation 20.7 23.3 37.2
Asia-Pacific Sewer and Water Rehabilitation 37.5 79.8 57.4
Commercial and Structural 19.6 – –
Total $ 464.2 $ 408.7 $ 463.4



	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


⁽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, 2011 during 2012. See “Risk Factors” in Item 1A~~agreed upon contractual rates.

Within our Water and ~~“Management’s Discussion~~Wastewater segments, all of our projects are performed through our wholly-owned subsidiaries and ~~Analysis~~a substantial majority of ~~Financial Condition and Results of Operations” in Item 7 of this report for further discussion regarding backlog.~~those projects are fixed price contracts with individual municipalities across the world.

Manufacturing and Suppliers

The product and service revenues for our ~~UPS~~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 ~~business~~businesses are derived principally from internal and external pipeline coating, lining, weighting and insulation. Bayou ~~also provides specialty fabrication services for offshore deep-water installations, including project management and logistics. 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 ~~fusion-bonded epoxy,~~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;~~Oklahoma, Edmonton, Alberta, ~~Canada;~~Canada, Great Britain, Dubai and ~~the United Kingdom.~~Saudi Arabia. In addition, we manufacture our own line of rectifiers and other power supplies in ~~Canada.~~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.

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 principal raw materials used by Fyfe Co. in the manufacture of FRP composite materials are carbon, glass, resins, fabric, and epoxy raw materials. Fabric and epoxies are the largest materials purchased, which are currently purchased through a select group of suppliers, although these and the other materials are available from a number of vendors. The weaving of FRP fiber components into woven fabric is done at our facility in La Conner, Washington. Fyfe Co. manufactures the unique ~~epoxy resin~~epoxies from basic chemicals at our San Diego, California facility. Epoxy resin repackaging is then done at our San Diego, California facility and the specialized blending is usually done on each job site. Fyfe Co. also sells finished materials throughout the United States and worldwide to our affiliates and certain certified third party installers and applicators.

Our pricing of raw materials is subject to fluctuations in the underlying commodity prices. See “Commodity Risk” in Item 7A of this report for detail on our management of the risks associated with such price fluctuations.

Patents and Proprietary Technologies

For our energy and mining operations, we hold ~~eight~~seven issued patents and ~~one~~two pending ~~patent~~patents in the United States and 17seven 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 ~~three~~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, ~~2011,~~2013, we held 3128 United States patents relating to the Insituform^® CIPP process, the last of which will expire in ~~2027.~~2031. As of December 31, ~~2011,~~2013, we had ~~two~~three 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, ~~2011,~~2013, there were ~~144~~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 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 1420 issued patents and ~~five~~six pending patents in the United States and nine issued and ~~seven~~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 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 proprietary processes, ~~our continued commitment to support and develop our processes,~~ the strength of our trademarks and our degree of market penetration should enable us to continue to compete effectively in the pipeline rehabilitation, energy and mining and infrastructure protection 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 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.

In our Energy and Mining segment, Corrpro operates in the highly-competitive field of cathodic protection for corrosion control. While this market is highly competitive, because there are relatively few barriers to entry, Corrpro is the 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 cathodic protection.

The process of utilizing HDPE liners is one of the more prevalent methods to protect pipelines servicing the energy and mining industries. United Pipeline Systems is recognized worldwide as a leader in the 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.

The process of utilizing HDPE liners is one of the more prevalent methods to protect pipelines servicing the energy and mining industries. UPS is a leader in the HDPE market. Because of relatively high barriers to entry, due to necessary technological capabilities, UPS tends to compete with a small number of specialty firms globally, nationally and regionally. We expect that our recent joint ventures, UPS-Aptec Limited and WCU, will provide greater worldwide opportunities for us in the HDPE market.

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-sized firms regionally and numerous small firms regionally and locally. We believe that our recent acquisition of Hockway and our new joint venture, WCU, will provide greater product and services offerings worldwide in the cathodic protection market.

In the trenchless sewer rehabilitation market, the CIPP process is the preferred ~~method and we are a leader in this field, but this is a highly competitive market both in the United States and abroad. Relatively~~method. Because relatively few significant barriers to entry exist in ~~the markets in which we operate and, as a result,~~this market, any organization ~~that has~~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.

In water rehabilitation, dig and replace is still the preferred method for the majority of ~~customers, although there is growing acceptance for various trenchless alternatives.~~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 structural retrofitting, but is gaining rapid acceptance in the construction and retrofitting industry. Fibrwrap Construction has been performing successful installations of FRP systems for 2324 years. With its proprietary technologies relating to both products and application, Fyfe Co. is a leader in the FRP market and Fibrwrap Construction is one of the most experienced installers of the FRP system and has ana well established reputation. ~~Given~~In this field, there are significant barriers to entry, including testing requirements, experience, intellectual property and certifications. Fyfe has teamed with a number of universities around the world to 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 companies on a regional or national level, ~~that often~~most of which do not provide the full spectrum of services provided by Fyfe Co. and Fibrwrap Construction.

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 infrastructure installation, strengthening and rehabilitation.

Seasonality

Our operations can be affected by seasonal variations 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, ~~2011,~~2013, we had approximately ~~3,000~~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 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 in~~ 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 businesses face significant competition in the industries in which they operate.

~~Our business~~Many of our products and services face direct competition from companies offering similar products or services. Competition places downward pressure on our contract prices and profit margins. Intense competition is ~~dependent~~expected to continue in these markets. However, we believe our diversification strategy of entering and expanding our offerings in high return markets and our focus on ~~obtaining work through a competitive bidding process.~~

improved efficiencies is the key to maintaining our market share and growth rates in these markets. If we are unable to 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, ~~and~~with a limited number of large firms globally and a large number of smaller firms regionally in the cathodic protection ~~industry.~~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 ~~a number of~~ 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~~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 ~~markets,~~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 markets,~~Although we compete with many smaller firms on a local or regional level, and with several larger firms on the global and national ~~levels.~~

~~In general, the energy and mining and sewer and water rehabilitations markets in which~~levels, we operate are highly competitive. Most of our products and services 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, and we face challenges in our abilityhave been able to maintain ~~strong growth rates. If~~our presence as the global leader in this field. In water rehabilitation, there are more significant barriers to entry, since it is strictly regulated. In this market, we ~~are unable to meet these competitive challenges, we could lose market share to our competitors and experience an overall reduction in our profits.~~

compete with a smaller number of specialty contractors around the world.

Our success and growth strategy depend 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, 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 of our customer base. 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.

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 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, 2011, approximately 73.4% 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 change order should be recognized at all and, if recognition is appropriate, what dollar amount of the change order should be recognized. Due to factors that we may not anticipate at the time of recognition, however, revenues ultimately received on these 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.

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.

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.

Federal and state legislative and regulatory initiatives as well as governmental reviews relating to hydraulic fracturing could result in increased costs and additional operating restrictions or delays that could adversely affect our Energy and Mining customers.

Federal, state and local legislative and regulatory initiatives relating to hydraulic fracturing could result in increased costs and additional operating restrictions or delays in the production of oil and natural gas, including from the developing shale plays. Our Energy and Mining segment services oil and gas companies in the shale plays and we foresee strong market opportunities here. A decline in drilling of new wells and related servicing activities caused by these initiatives could adversely affect our financial position, results of operations and cash flows.

Cyclical downturns in the mining, oil and natural gas industries, or in the 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 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;

the level of mining, drilling and production activity;

the discovery rate of new oil and gas reserves;

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

~~With our Corporate Reorganization, our parent company is now a holding company with no significant 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 the laws of the states and countries in which we operate.

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 certificate of incorporation provides that we have authority to issue 125,000,000 shares of common stock. As of December 31, ~~2011, 39,352,375~~2013, 37,983,114 shares of common stock were issued and outstanding.

Provisions in our certificate of incorporation 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 certificate of incorporation provides that our board of 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 of 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 certificate of incorporation provides that subject to the rights of the holders of any class or series of preferred stock set forth in our certificate of incorporation, 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 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 of 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 of 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.

We face a variety of risks associated with acquiring and integrating new business operations that could have a significant negative impact on our business, financial condition and results of operations.

On June 30, 2011, we acquired CRTS, Inc. to expand our internal and external coating capabilities. On August 2, 2011, we purchased the assets of Hockway Limited and the capital stock of Hockway Middle East FZE to expand our cathodic protection capabilities. On August 31, 2011, we acquired the North American business of Fyfe Group, LLC through which we have established our Commercial and Structural business segment, and subsequently purchased the Latin American business of Fyfe Group in January 2012. We also recently entered into joint ventures in order to expand our energy and mining business in Asia, Australia, the Middle East, North Africa, the United States and Central America. We may in the future pursue other strategic acquisitions and joint ventures that we believe would expand our product offerings and capabilities or complement these businesses. Any acquisition that we make will be accompanied by the risks commonly encountered in acquisitions of businesses and formation of new business relationships. The process of integrating different organizational cultures, business practices, information systems, business philosophies and management strategies as well as products or technologies may create unforeseen operating difficulties and expenditures. We may have difficulty integrating and assimilating the operations and personnel of any acquired companies, realizing anticipated synergies and maximizing the financial and strategic position of the combined enterprise. We may also have difficulty in managing and controlling businesses that are geographically distant from our corporate offices. The process of integrating acquired businesses and managing strategic alliances may also result in a diversion of management’s attention and cause an interruption of, or loss of momentum in, our activities. We may assume unknown liabilities that could have a material adverse effect on our business, financial condition and results of operations. As a result of these risks, the anticipated benefits of these acquisitions may not be fully realized, if at all, and the acquisitions could have a material adverse effect on our business, financial condition and results of operations.

In addition, there is no assurance that we will continue to locate suitable acquisition targets or that we will be able to consummate any such transactions on terms and conditions acceptable to us. The current credit markets may make it more difficult and costly to finance acquisitions. Acquisitions may also bring us into businesses we have not previously conducted and expose us to additional business risks that are different than those we have traditionally experienced.

~~We may be unable to recognize the benefits of our corporate reorganization.~~

Management expects to derive certain benefits from the 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 actual results and experience to differ materially from those anticipated, resulting in an inability to realize the expected benefits of the Corporate Reorganization and our Company’s ability to execute its plans and strategies.

Item 1B. Unresolved Staff Comments.

None.

Item 2. Properties.

Our wholly-owned subsidiary, Bayou Welding Works, L.L.C. owns a pipe yard in New Iberia, Louisiana. CCSI, another wholly-owned subsidiary, owns properties in Bakersfield, California and Conroe, Texas that are used as office space and operational facilities. Our subsidiary, Bayou Coating, owns a manufacturing facility in Baton Rouge, Louisiana. Our subsidiary, Bayou 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, BPPC, 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, ~~UPS,~~United Pipeline Systems, owns an office and shop facility as well as additional property in Durango, Colorado. In addition, our wholly-owned Canadian subsidiary, ~~Insituform Technologies~~United Pipeline Systems Limited, ~~(“ITL”),~~ owns an operating facility in Edmonton, Alberta, Canada ~~used by ITL and UPS~~ 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.

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 felt liner manufacturing facility is ~~located.~~

located and leases a facility for its glass liner manufacturing.

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 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	53	55	President and Chief Executive Officer
David F. Morris	50	52	Senior Vice President, Chief Administrative Officer, General Counsel and Secretary
David A. Martin	44	46	Senior Vice President and Chief Financial Officer
Brian J. Clarke	52	54	Senior Vice President – Business Integration
Kenneth L. Young	60	62	Vice President and Treasurer
Laura M. Villa	42	44	Vice President – Human Resources

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 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 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.

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 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.

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

Our common shares, $.01 par value, are traded on The Nasdaq Global Select Market under the symbol “AEGN”. The following table sets forth the range of quarterly high and low sales prices for the years ended December 31, ~~2011~~2013 and ~~2010,~~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

2011
2013
First Quarter	$	30.00	$	24.00	$	26.10	$	21.51
Second Quarter		27.16		18.10	24.03		19.72
Third Quarter		22.86		11.39	25.00		21.21
Fourth Quarter		16.53		10.45	24.09		19.67

2010
2012
First Quarter	$	28.37	$	19.94	$	20.25	$	15.75
Second Quarter		28.38		19.10	18.50		14.49
Third Quarter		25.51		18.52	22.00		16.96
Fourth Quarter		28.52		21.06	22.39		17.32

During the quarter ended December 31, ~~2011,~~2013, we did not offer any equity securities that were not registered under the Securities Act of 1933, as amended. As of February 20, ~~2012,~~2014, the number of holders of record of our common stock was ~~564.~~

506.

Holders of common stock are entitled to receive dividends as and when they may be declared by our board of directors. Our present policy is to retain earnings to provide for the operation and expansion of our business. However, our board of 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 our debt 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, ~~2011~~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)

Equity compensation plans approved by security holders (1)
1,703,256 $ 19.09 2,079,558
Equity compensation plans not approved by security holders (2)
221,489 14.55 –
Total 1,924,745 $ 18.26 2,079,558



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)
Equity compensation plans approved by security holders ⁽¹⁾	1,859,907	$	20.18	3,003,484
Equity compensation plans not approved by security holders ⁽²⁾	118,397	14.55		—
Total	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 ~~989,315~~1,090,427 stock options, ~~540,025~~555,025 stock awards and ~~173,916~~214,455 deferred and restricted stock units outstanding at December 31, ~~2011.~~2013.

⁽²⁾

On April 14, 2008, we granted J. Joseph Burgess 118,397 non-qualified 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 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 2009 Employee Equity Incentive Plan. At December 31, ~~2011,~~2013, 118,397 stock options ~~and 103,092 shares of restricted stock~~ were outstanding pursuant to these awards.

Issuer Purchases of Equity Securities

Total Number of Shares (or Units) Purchased (1)(2)
Average Price Paid per Share (or Unit)
Total Number of Shares (or Units) Purchased as Part of Publicly Announced Plans or Programs(1)

Maximum Number (or Approximate Dollar Value) of Shares (or Units) that May Yet Be Purchased Under the Plans or Programs(1)(3)

October 28 – October 31, 2011 159,300 $ 15.54 159,300 $ 7,524,963
November 1-30, 2011 167,296 15.16 166,600 5,000,000
Total 326,596 $ 15.34 325,900 $ 5,000,000
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)~~	~~This share repurchase program was publicly announced on October 10, 2011. Our~~
⁽¹⁾	In December 2012, our board of directors ~~approved~~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. The authorization allows us~~stock to ~~purchase up to $5.0 million of our common stock~~be made during the fourth quarter of 2011 and up to $5.0 million of our common stock during 2012. We engaged Merrill Lynch, Pierce, Fenner & Smith as our exclusive broker to execute the stock purchase program under a trading plan that was established in accordance with Rule 10b5-1balance of the ~~Securities Exchange Act of 1934. The plan expires June 30, 2012 unless earlier terminated by either party.~~2013 calendar year. We simultaneously executed an amendment to our credit facility to allow for the repurchase. Once repurchased, we immediately retired the shares.

~~(2)~~

~~Our~~

⁽³⁾

In September 2013, our board of directors ~~also~~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. ~~In 2011, participants~~The total number of shares purchased includes shares surrendered to us to pay the exercise price and/or to satisfy tax withholding obligations in ~~our equity plans surrendered 696 shares~~connection with stock swap exercises of ~~previously issued common~~employee stock ~~in satisfaction of tax obligations arising from~~options and/or the vesting of restricted stock ~~awards under such plans.~~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.~~

~~(3)~~

~~During January 2012, we acquired 310,035 shares for $5.0 million ($16.13 average price per share) through~~vested or the ~~open market repurchase program.~~stock option was exercised. Once repurchased, we immediately retired the shares.

Performance Graph

The following performance graph compares the total stockholder return on our common stock to the S&P 500 Index and a selected peer group index for the past five years. ~~The selected~~In 2013, we changed our peer group ~~corresponds~~index, which is comprised of the following companies (collectively, the “New Peer Group”):

Michael Baker Corporation

Layne Christensen Company

MYR Group, Inc.

Primoris Services Corporation

Robbins & Myers, Inc.

Valmont Industries, Inc.

Kennametal, Inc.

LB Foster Company

Tetra Tech, Inc.

Matrix Service Company

Dril-Quip, Inc.

Team, Inc.

Willbros Group, Inc.

Helix Energy Solutions Group

Newpark Resources

Tesco Corporation

This change in composite was made in order to ~~the~~establish a peer group ~~utilized by~~that we believed more closely identified with our ~~Compensation Committee to review~~businesses and ~~set executive compensation.~~industries and provided a better comparison of returns. The compensation committee of our board of directors also reviews data for this peer group in establishing the compensation of our executive officers.

For the year ended December 31, 2012, the composite group index used for the comparison was ~~selected by our Compensation Committee based upon input from~~comprised of the ~~Committee’s independent compensation consultant and from management and based on~~following companies ~~of comparable size and complexity in Aegion’s industries.~~(collectively, the “Old Peer Group”):

Michael Baker Corporation

Layne Christensen Company

Granite Construction, Inc.

MasTec, Inc.

MYR Group, Inc.

Primoris Services Corporation

Robbins & Myers, Inc.

Valmont Industries, Inc.

Sterling Construction Company, Inc.

Dycom Industries, Inc.

Kennametal, Inc.

LB Foster Company

Tetra Tech, Inc.

Matrix Service Company

Dril-Quip, Inc.

Team, Inc.

Willbros Group, Inc.

·	~~Michael Baker Corporation~~

·	~~Layne Christensen Company~~

·	~~Granite Construction, Inc.~~

·	~~MasTec, Inc.~~

·	~~ENGlobal Corporation~~

·	~~Sterling Construction Company, Inc.~~

·	~~Dycom Industries, Inc.~~

·	~~Kennametal, Inc.~~

·	~~Global Industries, Ltd.~~

·	~~Tetra Tech, Inc.~~

·	~~Matrix Service Company~~

·	~~Dril-Quip, Inc.~~

·	~~Team, Inc.~~

·	~~Willbros Group, Inc.~~

The graph assumes that $100 was invested in our common stock and each index on December 31, ~~2006~~2008 and that all dividends, if any, were reinvested.

Comparison of Five-Year Cumulative Return


	2006		2007		2008		2009		2010		2011		2008		2009		2010		2011		2012		2013
Aegion Corporation	$	100.00	$	57.23	$	76.13	$	87.85	$	102.51	$	59.31	$	100.00	$	115.39	$	134.64	$	77.91	$	112.70	$	111.17
S&P 500 Total Returns		100.00		105.50		66.47		84.05		96.72		98.76	100.00		126.46		145.51		148.59		172.37		228.19
Peer Group		100.00		123.92		79.10		96.66		112.82		102.41
Old Peer Group													100.00		125.22		148.67		143.91		178.04		223.43
New Peer Group													100.00		139.84		169.64		166.76		200.42		253.45

Notwithstanding anything set forth in any of our previous filings under the Securities Act of 1933 or the Securities Exchange Act of 1934 which might incorporate future filings, including this Annual Report on Form 10-K, in whole or in part, the preceding performance graph shall not be deemed incorporated by reference into any such filings.

Item 6. Selected Financial Data.

The selected financial data set forth below has been derived from our consolidated financial statements contained in “Item 8. Financial Statements and Supplementary Data” of this report on Form 10-K and previously published historical financial statements not included in this report on Form 10-K. The selected financial data set forth below should be read in conjunction with “Management’s Discussion and Analysis of Financial Condition and Results of Operations” and our consolidated financial statements, including the footnotes, contained in this report.

	Years Ended December 31,
	2011(1) (2)		2010			2009(3) (4)			2008			2007(5)
	(In thousands, except per share amounts)														Years Ended December 31,
INCOME STATEMENT DATA:
															2013⁽¹⁾⁽²⁾			2012⁽³⁾⁽⁴⁾			2011⁽⁵⁾⁽⁶⁾			2010			2009⁽⁷⁾⁽⁸⁾
															(In thousands, except per share amounts)
INCOME STATEMENT DATA⁽¹⁰⁾:
Revenues	$	938,585	$	914,975		$	726,866		$	536,664		$	495,570		$	1,091,420		$	1,016,831		$	925,766		$	905,259		$	720,405
Operating income		44,537		87,035			49,117			33,882			13,530		66,882			81,803			45,707			87,525			50,799
Income from continuing operations (6)		26,547		60,562			30,241			24,076			12,866
Income from continuing operations ⁽⁹⁾															50,812			54,374			27,134			60,973			31,977
Loss from discontinued operations		—		(100	)		(4,070	)		(2,436	)		(10,323	)	(6,461		)	(1,713		)	(587		)	(511		)	(5,806		)
Net income (6)		26,547		60,462			26,171			21,640			2,543
Net income ⁽⁹⁾															44,351			52,661			26,547			60,462			26,171
Basic earnings (loss) per share:
Income from continuing operations (6)		0.67		1.55			0.81			0.87			0.47
Income from continuing operations ⁽⁹⁾															1.31			1.38			0.68			1.55			0.86
Loss from discontinued operations		—		(0.01	)		(0.11	)		(0.09	)		(0.38	)	(0.17		)	(0.04		)	(0.01		)	(0.01		)	(0.16		)
Net income (6)		0.67		1.54			0.70			0.78			0.09
Net income ⁽⁹⁾															1.14			1.34			0.67			1.54			0.70
Diluted earnings (loss) per share:
Income from continuing operations (6)		0.67		1.54			0.81			0.86			0.47
Income from continuing operations ⁽⁹⁾															1.30			1.37			0.68			1.54			0.85
Loss from discontinued operations		—		(0.01	)		(0.11	)		(0.09	)		(0.38	)	(0.17		)	(0.04		)	(0.01		)	(0.01		)	(0.15		)
Net income (6)		0.67		1.53			0.70			0.77			0.09

Net income ⁽⁹⁾															1.13			1.33			0.67			1.53			0.70
BALANCE SHEET DATA:
Cash and cash equivalents	$	106,129	$	114,829		$	106,064		$	99,321		$	78,961		$	158,045		$	133,676		$	105,292		$	114,444		$	105,878
Working capital, net of cash		219,137		178,262			125,088			115,681			117,862		225,358			202,469			219,974			178,647			125,276
Current assets		517,985		466,586			405,006			324,672			309,289
Current assets⁽¹¹⁾															603,858			560,661			517,985			466,586			405,006
Property, plant and equipment, net		168,945		164,486			150,896			72,210			76,714		182,303			183,163			166,614			162,167			148,381
Total assets		1,124,964		933,310			866,583			553,529			555,781
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		26,541		13,028			12,742			938			1,097		22,024			33,775			26,541			13,028			12,742
Long-term debt, less current maturities		222,868		91,715			101,500			65,000			65,000		366,616			221,848			222,868			91,715			101,500
Total liabilities		475,975		306,603			312,772			178,317			185,882
Total liabilities⁽¹¹⁾															635,997			501,774			475,975			306,603			312,772
Total stockholders’ equity		640,732		617,332			548,341			372,200			367,182		709,368			699,316			640,732			617,332			548,341



	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

~~Aegion Corporation and Subsidiaries~~

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

1. DESCRIPTION OF BUSINESS

Aegion Corporation is a global leader in infrastructure protection and maintenance, providing proprietary technologies and 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 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 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 infrastructure and protecting new infrastructure from corrosion worldwide. Management believes the depth and breadth of its products and services within the Energy and Mining, Commercial and Structural and Water and Wastewater platforms make it a leading “one-stop” provider for the world’s infrastructure rehabilitation and protection needs.

On October 25, 2011, Insituform Technologies, LLC (formerly known as Insituform Technologies, Inc. (“Insituform”)) reorganized by creating a new holding company structure (the “Corporate Reorganization”). The new parent company, Aegion Corporation (“Aegion” or the “Company”), includes Insituform as a ~~wholly owned~~ direct, wholly-owned subsidiary. As part of the Corporate Reorganization, Insituform’s outstanding shares of 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 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 Corporate Reorganization, and the rights, privileges and interests of Insituform’s former stockholders ~~remain~~remained the same with respect to the new holding company. Additionally, as a result of the Corporate Reorganization, Aegion is deemed the successor registrant to Insituform under the Securities Exchange Act of 1934, as amended (the “Exchange Act”), and shares of Aegion common stock are deemed registered under Section 12(g) of the Exchange Act.

Aegion Corporation is a global leader in infrastructure protection, providing proprietary technologies and services to protect against the corrosion of industrial pipelines and for the rehabilitation and strengthening of sewer, water, energy and mining piping systems and buildings, bridges, tunnels and waterfront structures. The Company offers one of the broadest portfolios of cost-effective solutions for rehabilitating aging or deteriorating infrastructure and protecting new infrastructure from corrosion. The Company’s business activities include research and development, manufacturing, distribution, installation, coating and insulation, cathodic protection and licensing. The Company’s products and services are currently utilized and performed in more than 100 countries across six continents. The Company believes that the depth and breadth of its products and services platform make it a leading comprehensive provider for the world’s infrastructure rehabilitation and protection needs.

Acquisitions/Strategic ~~Initiatives~~

Initiatives/Divestitures

Energy and Mining Segment ~~Expansion~~

~~In early 2009, the Company expanded its operations in the energy and mining sector to include pipe coating and cathodic protection services. In February 2009,~~On July 1, 2013, the Company acquired the ~~business~~equity interests of ~~The Bayou Companies, LLC~~Brinderson, L.P., a California limited partnership, General Energy Services, a California corporation, and ~~its related entities (“Bayou”~~Brinderson Constructors, Inc., a California corporation (collectively, “Brinderson”). The ~~Company’s Bayou business provides cost-effective solutions~~transaction purchase price 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 ~~energy and infrastructure companies primarily~~account for cash held in the ~~Gulf~~business at closing. The cash purchase price was funded by borrowings under the Company’s new $650.0 million senior secured credit facility as discussed in Note 5. Brinderson is a leading integrated service provider of ~~Mexico~~maintenance, construction, engineering and ~~North America. Bayou’s products~~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.

During the second quarter of 2013, the Company’s Board of Directors approved a 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 ~~include internal~~from its facility in New Iberia, Louisiana. Financial results for BWW were part of the Company’s Energy and ~~external pipeline coating, lining, weighting~~Mining segment for financial reporting purposes. BWW ceased bidding new work and ~~insulation. Bayou~~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 ~~provides specialty fabrication~~recognized additional non-cash impairment charges for equipment and ~~services~~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), which also was recorded in the second quarter of 2013. The Company expects the cash liquidation value to approximate net asset value. Net asset value is determined using recorded amounts for ~~offshore deep-water installations, including project management~~assets and ~~logistics.~~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 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 ~~2009,~~2012, the Company ~~acquired Corrpro Companies, Inc. and its subsidiaries~~organized United Special Technical Services LLC (“~~Corrpro”~~USTS”)~~. The Company’s 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 specialtyjoint venture located in the ~~corrosion control market is cathodic protection,~~Sultanate of Oman between United Pipeline Systems and Special Technical Services LLC, an ~~electrochemical process that prevents corrosion in new structures~~Omani company (“STS”), for the purpose of executing pipeline, piping and ~~stops~~flow line high-density polyethylene lining services throughout the ~~corrosion process for existing structures.~~

~~In October 2009, the Company expanded its coating~~Middle East and insulation services in Canada with its 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, while Perma-Pipe Canada, Inc. owns~~USTS and STS holds the remaining forty-nine percent (49%) equity interest. ~~BPPC serves~~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 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, the Company paid $2.1 million to the sellers relating to a portion of the performance target being met for 2012. During 2013 and 2012, the Company 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 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 ~~pipe coating~~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, ~~insulation operations~~ in ~~Canada.~~

~~In February 2010,~~the second quarter of 2013 in connection with such indication, the Company ~~expanded~~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 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 investment on the balance sheet and the amount the Company will receive in connection with the exercise. The Company does not expect any additional material impacts to its ~~pipe coating services through~~consolidated balance sheet related to the ~~formation~~consummation of Stupp’s exercise of this option.

Through Bayou, the Company 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 April 2011, the Company 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 the Caribbean. The Company holds a fifty-one percent (51%) majority interest in Bayou ~~Wasco, while Wasco Energy Ltd.~~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 ~~subsidiary~~gain on the sale of ~~Wah Seong Corporation Berhad~~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 (“~~Wasco Energy”~~CIPP”)~~, owns~~ liners during the ~~remaining interest. Bayou Wasco is expected~~two-year period from June 26, 2013 to ~~commence providing insulation services by late 2012.~~June 30, 2015.

Commercial and Structural Segment

In April ~~2011,~~2012, the Company ~~also expanded its Corrpro and United Pipeline Systems~~purchased Fyfe Group LLC’s Asian operations (“~~UPS”) operations in Asia and Australia through its joint venture, WCU Corrosion Technologies Pte. Ltd., located in Singapore (“WCU”). WCU will offer the Company’s Tite Liner~~® process in the oil and gas sector and onshore corrosion services, in each of Asia and Australia. The Company holds a forty-nine percent (49%) ownership interest in WCU, while Wasco Energy owns the remaining interest. WCU immediately began marketing its products and services.

In June 2011, the Company 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”Fyfe Asia”), which is seventy percent (70%) owned by Corrpro and thirty percent (30%) owned by STARC, will provide 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 will serve as a platform for the continued expansion of the Company’s Energy and Mining group in the Middle East. Corrpower commenced providing corrosion protections services in early 2012.

~~In June 2011, the Company acquired~~included all of the ~~outstanding stock~~equity interests of ~~CRTS, Inc.~~Fyfe Asia Pte. Ltd, a Singaporean entity (and its interest in two joint ventures located in Borneo and Indonesia), ~~an Oklahoma company (“CRTS”). CRTS delivers patented~~Fyfe (Hong Kong) Limited, Fibrwrap Construction (M) Sdn Bhd, a Malaysian entity, Fyfe Japan Co. Ltd., a Japanese entity, and ~~proprietary internal~~Fibrwrap Construction Pte. Ltd and ~~external coating~~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 ~~equipment for new pipeline construction projects from offices~~engineering support to installers and applicators of fiber reinforced polymer systems in ~~North America, the Middle East and Brazil.~~Asia. The cash purchase price was $24.0 million in cash at closing with CRTS shareholders able to earn up to an additional $15.0 million upon the achievement of certain performance targets over the three-year period ending December 31, 2013 (the “CRTS earnout”). The purchase price paid at closing was ~~funded by borrowings against the Company’s prior line of credit, as discussed in Note 5.~~

In August 2011, the Company purchased the assets of Hockway Limited and the capital stock of Hockway Middle East FZE, based in the United Kingdom and United Arab Emirates, respectively (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 components and is included in the Company’s Energy and Mining reportable segment. The purchase price was $4.6$40.7 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 (the “Hockway earnout”). The purchase price was funded out of the Company’s cash ~~balances.~~balances and by borrowing $18.0 million against the Company’s line of credit.

In ~~October 2011,~~January 2012, the Company ~~organized UPS-Aptec Limited, a joint venture in~~purchased Fyfe Group LLC’s Latin American operations (“Fyfe LA”), which included all of the ~~United Kingdom between United Pipeline Systems International, Inc.~~equity interests of Fyfe Latin America S.A., a ~~subsidiary~~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 ~~(“UPS-International”), and Allied Pipeline Technologies, SA (“APTec”). UPS-International owns fifty-one percent (51%)~~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 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 (HDPE) liners in approximately 135 miles of slurry pipelines located in Morocco. The project began in the fourth quarter of 2011 and is expectedcontingent consideration arrangement to be ~~completed by early 2013.~~

zero, which is based on Level 3 inputs as defined in Note 10.

In December 2011, the Company entered into an agreement with Special Technical Services LLC (“STS”), based in the Sultanate of Oman (“STS”), to form a joint venture, United Special Technical Services LLC (“USTS”), located in the Sultanate of Oman, for the purpose of executing pipeline, piping and flowline high-density polyethylene lining services throughout the Middle East and Northern Africa. Pursuant to the agreement, the Company will hold a fifty-one percent (51%) equity interest in USTS and STS will hold the other forty-nine percent (49%) equity interest. The Company expects STS to be operational by the second quarter of 2012.

The Company believes its recent acquisitions of CRTS and Hockway and the Bayou Wasco, WCU, Corrpower, UPS-APTec Limited and USTS joint ventures will accelerate the Company’s Energy and Mining group’s growth throughout the Middle East and strengthen the technical resources of the Energy and Mining platform.

~~Sewer and Water Rehabilitation Acquisitions~~

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

In December 2009, the Company acquired the twenty-five percent (25%) noncontrolling interest in its 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 its European sewer rehabilitation operation and third-party sales.

In January 2010, the Company acquired its Singaporean CIPP licensee, Insitu Envirotech (S.E. Asia) Pte Ltd (“Insituform-Singapore”). Insituform-Singapore performs sewer rehabilitation services in Southeast Asia.

~~New Commercial and Structural Reportable Segment~~

On August ~~31,~~ 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 ~~new~~ credit facility. The Company was also granted a one-year exclusive negotiating right to acquire Fyfe Group’s Asian, European and Latin American operations at a purchase price to be agreed upon by the parties at the time of exercise of the right. 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®~~Tyfo^® Fibrwrap^® System, the first ~~and most comprehensive carbon~~ 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.

On January 4, 2012, the Company 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 Salvador entity, and Fibrwrap Construction Latin America S.A., a Panamanian entity. The purchase price was $2.3 million in cash at closing with the sellers able to earn an additional payout both annually upon achievement of certain performance targets over the three-year period ending December 31, 2014 (the “Fyfe LA earnout”) and upon completion of 2011 and 2012 audited financials based upon a multiple of EBITDA calculation. Fyfe LA provides Fibrwrap installation services throughout Latin America, as well as provides product and engineering support to installers and applicators of the FRP systems in Latin America. The purchase price was funded out of the Company’s cash balances. Fyfe LA will be included in the Company’s Commercial and Structural reportable segment. The Company has not completed its initial assessment of purchase price accounting for this entity due to the timing of the acquisition.

The Company is in current negotiations, pursuant to the one-year exclusive negotiating right provided as part of the Fyfe NA transaction, to acquire Fyfe Group’s Asian operations (“Fyfe Asia”) and Fyfe Group’s European operations (“Fyfe Europe”). The Company currently expects these transactions to close during the first and second quarters of 2012, respectively.

Purchase Price Accounting

The Company ~~has substantially completed~~accounts for its ~~preliminary accounting for the CRTS, Hockway and Fyfe NA~~ acquisitions in accordance with ~~the guidance included in~~ FASB ASC 805, Business Combinations~~(“FASB ASC 805”)~~. The Company ~~has recorded~~records finite-lived intangible assets at their ~~preliminarily~~ determined fair value related to ~~non-compete agreements,~~ customer relationships, backlog, trade names and trademarks and patents and other acquired technologies. The acquisitions ~~resulted~~generally result in goodwill related to, among other things, growth ~~opportunities.~~opportunities and synergies. The goodwill associated with the ~~CRTS~~Brinderson acquisition ~~is not deductible for tax purposes. The $0.4 million of goodwill associated with the purchase of the assets of Hockway Limited~~ is deductible for tax purposes. The ~~goodwill associated with the~~Company completed its accounting for Fyfe ~~NA acquisition is deductible for tax purposes. Additionally, the Company recorded expenses of $6.4 million for costs incurred related to the acquisitions of CRTS, Hockway~~LA and Fyfe ~~NA and other current and former identified acquisition targets that were either abandoned or not completed~~Asia during ~~2011.~~

~~The contingent consideration arrangements discussed above require~~ the Company to pay the former shareholders of CRTS and Hockway, respectively, additional payouts based on the achievement of certain performance targets over their respective three-year periods. The potential undiscounted amount of all future payments that the Company could be required to make under the contingent consideration arrangements is between $0 and $16.5 million. As of December 31, 2011, the Company calculated the fair value of the contingent consideration arrangement to be $14.8 million for CRTS and $1.5 million for Hockway. In accordance with ~~FASB ASC 820,~~ ~~Fair Value Measurements~~ ~~(“FASB ASC 820”)~~, the Company determined that the CRTS earnout and Hockway earnout are derived from significant unobservable inputs (“Level 3 inputs”). Key assumptions include the use of a discount rate and a probability-adjusted level of profit derived from each entity.

~~CRTS contributed $6.4 million and $0.2 million, respectively, of revenue and losses during for the 184-day period~~quarters ended December 31, ~~2011, as~~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, ~~was completed on June 30, 2011. Hockway contributed $2.1 million~~there might be changes, none of which are expected to be material to the financial statements.

The Fyfe LA, Fyfe Asia and ~~less than $0.1 million, respectively, of revenue~~Brinderson acquisitions made the following contributions to the Company’s revenues and ~~losses for~~profits during the ~~151-day period~~years ended December 31, ~~2011, as the acquisition was completed on August 2, 2011. Fyfe NA contributed $17.1 million~~ 2013 and ~~$0.7 million, respectively, of revenue and losses for the 122-day period ended December 31, 2011, as the acquisition was completed on August 31, 2011.~~ 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 ~~these~~the Fyfe LA, Fyfe Asia and Brinderson acquisitions had occurred ~~on January 1, 2010~~at the beginning of the year preceding their acquisition (in ~~thousands, except share amounts)~~thousands):

Year Ended
December 31,
2011 2010

Revenues $ 976,621 $ 987,610
Net income(1)
29,531 69,923



	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 ~~2010.~~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 ~~consideration recorded to acquire each business at its respective acquisition date (in thousands):~~

CRTS Hockway
Fyfe NA(1)
Total
Cash $ 24,000 $ 4,606 $ 118,313 $ 146,919
Estimated fair value of earnout payments to shareholders 14,760 1,454 – 16,214
Total consideration recorded $ 38,760 $ 6,060 $ 118,313 $ 163,133

~~(1)~~

~~Includes the cash purchase price at closing of $115.8 million plus a preliminary working capital adjustment to the sellers of $2.5 million, of which $1.8 million was paid in 2011.~~

The Company has completed an initial purchase price accounting of the CRTS, Hockway and Fyfe NA acquisitions. As the Company completes its final accounting for these acquisitions, there may be changes, some of which may be material, to this initial accounting. The following table summarizes the preliminary fair value of identified assets and liabilities of the Brinderson and Fyfe Asia acquisitions at their respective acquisition dates ~~based on the initial analyses~~ (in thousands):

CRTS Hockway Fyfe NA
Cash $ 361 $ 536 $ 1,096
Receivables and cost and estimated earnings in excess of billings 2,365 1,993 16,019
Inventories 21 623 5,977
Prepaid expenses and other current assets 175 228 792
Property, plant and equipment 5,350 324 1,064
Identified intangible assets 26,220 2,200 53,768
Accounts payable, accrued expenses and billings in excess of cost and estimated earnings (2,830 ) (1,826 ) (3,642 )
Deferred tax liabilities (11,395 ) – –
Total identifiable net assets $ 20,267 $ 4,078 $ 75,074

Total consideration recorded $ 38,760 $ 6,060 $ 118,313
Less: total identifiable net assets 20,267 4,078 75,074
Goodwill at December 31, 2011 $ 18,493 $ 1,982 $ 43,239



	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 ~~2011, after~~ the ~~transactions’ respective~~first quarter of 2013 relative to the acquisition ~~dates~~of Fyfe Asia as the Company ~~continued~~finalized its purchase price ~~accounting:~~accounting, subject to final working capital adjustments and settlement of escrow accounts (in thousands):

CRTS Hockway Fyfe NA
Total identifiable net assets at acquisition date $ 19,883 $ 4,551 $ 69,704
Receivables and cost and estimated earnings in excess of billings – (409 ) –
Inventories – (64 ) –
Property, plant and equipment 4,033 – (85 )
Identifiable intangible assets (3,105 ) – 5,633
Accounts payable, accrued expenses and billings in excess of cost and estimated earnings (300 ) – (916 )
Deferred tax liabilities (244 ) – –
Other adjustments – – 738
Total identifiable net assets at December 31, 2011 20,267 4,078 75,074

Goodwill at acquisition dates $ 18,017 $ 1,524 $ 46,082
Increase (decrease) in goodwill related to acquisitions 476 458 (2,843 )
Goodwill at December 31, 2011 $ 18,493 $ 1,982 $ 43,239



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

~~During~~The following adjustments were made during the ~~second half~~fourth quarter of ~~2011, the fair value of the CRTS earnout liability was increased by $0.9 million due to a change in the preliminary valuation. The adjustments~~2013 relative to the ~~CRTS purchase price allocated to property, plant and equipment, intangible assets and changes to working capital resulted from a change in~~acquisition of Brinderson as the ~~preliminary valuation and purchase price allocation. The~~ Company ~~has~~ substantially completed its purchase price accounting ~~for the acquisition of CRTS with the exception of income taxes and other certain items, some of which may be material.~~(in thousands):

During the fourth quarter of 2011, the fair value of the Hockway earnout liability was decreased by $0.1 million due to a change in the preliminary valuation. The adjustments to the Hockway purchase price allocated to working capital resulted from the final working capital settlement that occurred during the fourth quarter of 2011. The Company has substantially completed its purchase price accounting for the acquisition of Hockway with the exception of income taxes and other certain items, some of which may be material.



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

The adjustments to the Fyfe NA purchase price allocated to intangible assets and changes to working capital resulted from a change in the preliminary valuation and purchase price allocation. During the fourth quarter of 2011, the Company identified an additional $2.5 million of consideration for the seller as a result of the preliminary closing working capital calculation exceeding the targeted closing working capital in the purchase agreement, of which $1.8 million was paid during 2011. The final working capital calculation will be completed in the first quarter of 2012 and may result in an additional adjustment to the purchase price. The Company has substantially completed its purchase price accounting for the acquisition of Fyfe NA with the exception of income taxes, the final working capital adjustments and other certain items, some of which may be material.

2. ~~SUMMARY OF~~ ACCOUNTING POLICIES

Principles of Consolidation

The consolidated financial statements include the accounts of the Company, its wholly-owned subsidiaries and 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~~.eliminated. Additionally, certain prior year amounts have been reclassified to conform to the current 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

During the second quarter of 2011, the Company identified immaterial errors related to certain long term assets, primarily goodwill, that were being translated at historical foreign currency exchange rates instead of current exchange rates. The Company evaluated these errors and determined that the impact to previously issued financial statements was not material. To correct the identified foreign currency translation errors, the Company has revised prior period financial statements. As a result of this revision, total assets and stockholders’ equity as of December 31, 2010 on the consolidated balance sheet were revised from the previously reported amounts of $921.8 million and $615.2 million to $933.3 million and $626.7 million, respectively. Additionally, stockholders’ equity as of December 31, 2008 on the consolidated statement of equity was revised from the previously reported amount of $371.0 million to $375.2 million. For the years ended December 31, 2010 and 2009, total comprehensive income as presented on the consolidated statement of equity was revised from the previously reported $58.7 million and $36.6 million to $60.0 million and $42.7 million, respectively.

These translation errors also resulted in an immaterial misstatement of reported depreciation expense in prior periods. In addition, the Company was incorrectly eliminating foreign currency gains or losses upon remeasurement of certain intercompany transactions rather than recording these gains or losses in earnings. To correct these errors, a cumulative after-tax adjustment of $0.2 million (pre-tax increase to depreciation expense of $2.2 million and a pre-tax increase to foreign currency gain of $2.0 million), or $0.00 per share, was recorded in the quarter ended June 30, 2011.

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.

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

As of December 31, 2013 and 2012, the ~~activity during any given period is~~Company had $0.6 million and $14.3 million, respectively, related to ~~the~~ currency translation ~~adjustment.~~

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 ~~$2.2~~$2.6 million, ~~$2.7~~$1.8 million and ~~$2.6~~$2.2 million for the years ended December 31, ~~2011, 2010~~2013, 2012 and ~~2009,~~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 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 vesting 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 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/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, a provision for the expected loss is recorded in the period in which the loss becomes evident. ~~At December 31, 2011, 2010 and 2009, the Company had provided $0.9 million, $0.8 million and $0.3 million, respectively, for expected losses on contracts.~~ 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.

~~Bayou~~ Any revenue recognized is ~~party~~only to ~~certain contracts that provide for multiple value-added coating and welding services to customer pipe for use in pipelines~~the extent costs have been recognized in the ~~energy and mining industries, which~~period. Additionally, the Company ~~considers to be~~expenses all costs for unpriced change orders in the period in which they are incurred.

Revenues from Brinderson are derived mainly from multiple ~~deliverables. The Company recognizes revenue for each deliverable~~engineering and construction type contracts, as ~~a separate unit~~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 ~~accounting under~~pricing provisions: time and materials, cost plus fixed fee and fixed price. Although the ~~accounting guidance~~terms 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 has~~vary, most are made pursuant to cost reimbursable contracts on a ~~readily determined selling price~~time and ~~qualifies as~~materials basis under which revenues are recorded based on costs incurred at agreed upon contractual rates. Brinderson also performs services on a ~~separate unit of accounting. Performance of each~~cost plus fixed fee basis under which revenues are recorded based upon costs incurred at agreed upon rates and a proportionate amount of the ~~deliverables is observable due to~~fixed fee or percentage stipulated in the ~~nature of the services. Customer inspection typically occurs at the completion of each service before another service is performed.~~

contract.

Earnings per Share

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

2011 2010 2009
Weighted average number of common shares used for basic EPS 39,362,138 39,040,386 37,134,295
Effect of dilutive stock options, restricted stock and deferred stock units (Note 7) 336,317 373,494 379,232
Weighted average number of common shares and dilutive potential common stock used in diluted EPS 39,698,455 39,413,880 37,513,527



	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 ~~189,202, 265,268~~318,026, 223,536 and ~~408,515~~189,202 stock options in ~~2011, 2010~~2013, 2012 and ~~2009,~~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 extend beyond one year from time to time. As of December 31, 2011, retainage receivables aged greater than 365 days approximated nine percent of the total retainage balance and collectibility was assessed as described 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 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 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 ~~2011, 2010~~2013, 2012 or ~~2009.~~

2011.

Goodwill

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, ~~2011.~~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 reporting unit relative to expected, historical or forecasted future operating results;

·	~~significant underperformance of a reporting unit relative to expected, historical or projected future operating results;~~

significant negative industry or economic trends;

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

significant changes in the strategy for a reporting unit including extended slowdowns in a segment’s market;

·	~~significant changes in the 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 decrease in~~ ~~the Company’s~~ ~~market capitalization below its book value for an extended period of time; 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 ~~was~~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~~Water and Wastewater, European Water ~~Rehabilitation, European Sewer~~ and Wastewater, Asia-Pacific Water ~~Rehabilitation, Asia-Pacific Sewer~~ and ~~Water Rehabilitation, UPS,~~Wastewater, United Pipeline Systems, Bayou, Corrpro, CRTS, ~~Hockway~~Brinderson and 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 ~~NA.~~

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 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~~estimated future cash flows is one of the ~~implied fair value~~most significant assumptions utilized under the income approach. Management determines the appropriate discount rate for each of athe 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 ~~is less than~~has a different risk profile based on the ~~related carrying value.~~nature of its operations, including market-based factors, the WACC for each reporting unit may differ. Accordingly, the 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 ~~2011~~2013 goodwill review included: (i) ~~five-year compounding~~ annual revenue growth rates generally ranging from 3%2% to ~~15%~~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%1% to 3.5%~~; and (v) discount rates ranging from 16.5% to 18.0%~~. If actual results differ from estimates used in these calculations, ~~the Company~~we could incur future impairment charges.

During the ~~Company’s~~ assessment of its reporting units’ fair values in relation to their respective carrying values, at the ~~Company had~~high end, five ~~reporting units that~~ had a fair value in excess of 30% of their carrying value and, at the low end, two were within ~~15%~~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 ~~$198.0~~$72.9 million. ~~Three~~

As with all of ~~these~~its reporting units, ~~within 15% are Fyfe NA, Hockway and CRTS, all of which were acquired in 2011. Accordingly, it is expected~~the Company continuously monitors potential triggering events that ~~their fair values would approximate their carrying values. The remaining four reporting units had a fair value in excess of 20% of their carrying value. The total goodwill recorded at the~~may cause an interim impairment ~~testing date for these reporting units was $54.0 million.~~

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 forty-nine percent (49%) of the value of Bayou Coating.~~Note 1.

Investments in entities in which the Company does not have control or is not the primary beneficiary of a variable interest entity, and for which the Company has 20% to 50% ownership ~~and~~or has the ability to exert significant influence, are accounted for by the equity method. At December 31, ~~2011~~2013 and ~~2010,~~2012, the investments in affiliated companies on the Company’s consolidated balance ~~sheet~~sheets were ~~$26.7~~$9.1 million and ~~$28.0~~$19.2 million, respectively. These investments in affiliated companies contained certain intangible assets and goodwill of $10.0 million and $10.6 million at December 31, 2011 and 2010, respectively, related to Bayou Coating associated with the acquisition of Bayou. During 2011 and 2010, the Company recorded $0.6 million and $0.7 million, respectively, in amortization expense on the equity earnings in affiliated companies line of the income statement in relation to these intangibles.

Net income presented below for ~~2011~~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~~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, equity in earnings of affiliated companies include the Company’s portion of the earnings of Insituform-Hong Kong and Insituform-Australia. 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, ~~2011~~2013 and ~~2010~~2012 and for each of the years in the three-year period ended December 31, ~~2011~~2013 are summarized in the following tables ~~below~~ (in thousands):


					December 31,
Balance sheet data	2011		2010		2013		2012⁽¹⁾

Current assets	$	34,159	$	38,977	$	10,220	$	32,752
Non-current assets		22,209		22,279	10,022		22,495
Current liabilities		16,839		18,589	1,743		16,006
Non-current liabilities					—		484


Income statement data	2011		2010		2009		2013 ⁽¹⁾		2012		2011

Revenues	$	134,716	$	134,884	$	108,567
Revenue							$	89,157	$	141,233	$	134,716
Gross profit		29,651		36,095		25,029	27,336		40,342		29,651
Net income		12,512		19,497		6,062	17,946		22,009		12,512
Equity in earnings of affiliated companies		3,471		7,291		1,192	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 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;

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 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.

Based on its evaluation of the above factors and judgments, as of December 31, ~~2011,~~2013, the Company consolidated any VIEs in which it was the primary beneficiary. Also, as of December 31, ~~2011,~~2013, the Company had significant interests in certain VIEs primarily through its joint venture arrangements for which 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 ~~2011.~~2013.

Financial data for ~~the~~ consolidated variable interest entities at December 31, ~~2011~~2013 and ~~2010~~2012 and for each of the years in the three-year period ended December 31, ~~2011~~2013 are summarized in the following tables (in thousands):


					December 31,
Balance sheet data	2011		2010		2013		2012

Current assets	$	40,525	$	47,304	$	55,651	$	65,251
Non-current assets		19,005		18,529	47,606		47,086
Current liabilities		23,566		29,814	33,886		45,604
Non-current liabilities					25,020		23,169



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

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



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



PART I

	Item 1.	Business	~~Business~~	2

	Item 1A.		Risk Factors	14 16

	Item 1B.		Unresolved Staff Comments	22 26

	Item 2.	Properties	~~Properties~~	22 26

	Item 3.		Legal Proceedings	23 27

	Item 4.		Mine Safety Disclosure	23 27

	Item 4A.		Executive Officers of the Registrant	23 27

PART II


	Item 5.		Market for Registrant’s Common Equity, Related Stockholder Matters and Issuer Purchases of Equity Securities	24 29

	Item 6.		Selected Financial Data	27 33

	Item 7.		Management’s Discussion and Analysis of Financial Condition and Results of Operations	28 34

	Item 7A.		Quantitative and Qualitative Disclosures about Market Risk	44 50

	Item 8.		Financial Statements and Supplementary Data	46 52

INDEX TO CONSOLIDATED FINANCIAL STATEMENTS		46 52

	Item 9.		Changes in and Disagreements with Accountants on Accounting and Financial Disclosure	83 88

	Item 9A.		Controls and Procedures	83 88

	Item 9B.		Other Information	83 88

PART III


	Item 10.		Directors, Executive Officers and Corporate Governance	84 89

	Item 11.		Executive Compensation	84 89

	Item 12.		Security Ownership of Certain Beneficial Owners and Management and Related Stockholder Matters	84 89

	Item 13.		Certain Relationships and Related Transactions, and Director Independence	84 89

	Item 14.		Principal Accountant Fees and Services	84 89

PART IV


	Item 15.		Exhibits and Financial Statement Schedules	85 90

SIGNATURES		86 91


(dollars in thousands)							Increase (Decrease)											Increase (Decrease)
	2011			2010			$			%		2013			2012			$			%
Revenues	$	938,585		$	914,975		$	23,610		2.6	%	$	1,091,420		$	1,016,831		$	74,589		7.3	%
Gross profit		203,124			229,580			(26,456	)	(11.5	)	247,021			243,754			3,267			1.3
Gross profit margin		21.6	%		25.1	%		n/a		(3.5	)	22.6		%	24.0		%	n/a			(140	)bp
Operating expenses		151,764			144,245			7,519		5.2		178,483			168,846			9,637			5.7
Reversal of earnout		(1,700	)		(1,700	)		—		—
Earnout reversal												(4,175		)	(10,019		)	(5,844		)	(58.3	)
Acquisition-related expenses		6,372			—			6,372		n/m		5,831			3,124			2,707			86.7
Restructuring charges		2,151			—			2,151		n/m
Operating income		44,537			87,035			(42,498	)	(48.8	)	66,882			81,803			(14,921		)	(18.2	)
Operating margin		4.7	%		9.5	%		n/a		(4.8	)	6.1		%	8.0		%	n/a			(190	)bp
Income from continuing operations		26,547			60,562			(34,015	)	(56.2	)	52,007			58,562			(6,555		)	(11.2	)



(dollars in thousands)							Increase (Decrease)
	2012			2011			$			%
Revenues	$	1,016,831		$	925,766		$	91,065		9.8	%
Gross profit	243,754			202,679			41,075			20.3
Gross profit margin	24.0		%	21.9		%	n/a			210	bp
Operating expenses	168,846			150,149			18,697			12.5
Earnout reversal	(10,019		)	(1,700		)	8,319			489.4
Acquisition-related expenses	3,124			6,372			(3,248		)	(51.0	)
Restructuring changes	—			2,151			(2,151		)	(100.0	)
Operating income	81,803			45,707			36,096			79.0
Operating margin	8.0		%	4.9		%	n/a			310	bp
Income from continuing operations	58,562			28,257			30,305			107.2

þ

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



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

~~Commission File Number: 0-10786~~

Aegion Corporation
(Exact name of registrant as specified in its charter)


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


⁽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.

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

~~(4)~~
⁽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.


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


⁽¹¹⁾	Includes current assets, total assets and total liabilities of discontinued operations.


																										2013 vs 2012								2012 vs 2011
(dollars in thousands)							2011 vs. 2010								2010 vs. 2009											Increase (Decrease)								Increase (Decrease)
							Increase (Decrease)								Increase (Decrease)
	2011			2010			$			%		2009			$			%		2013			2012			$			%		2011			$			%
Revenues	$	433,230		$	382,246		$	50,984		13.3	%	$	241,678		$	140,568		58.2	%	$	562,119		$	513,975		$	48,144		9.4	%	$	420,411		$	93,564		22.3	%
Gross profit		109,753			105,309			4,444		4.2			67,185			38,124		56.7		127,563			127,605			(42		)	—		109,308			18,297			16.7
Gross profit margin		25.3	%		27.6	%		n/a		(2.3	)		27.8	%		n/a		(0.2	)	22.7		%	24.8		%	n/a			(210	)bp	26.0		%	n/a			(120	)bp
Operating expenses		72,982			65,888			7,094		10.8			48,713			17,175		35.3		87,226			77,265			9,961			12.9		71,367			5,898			8.3
Reversal of earnout		(1,700	)		(1,700	)		—		—			(1,600	)		(100	)	6.3
Earnout reversal																				(3,889		)	(9,654		)	(5,765		)	(59.7	)	(1,700		)	7,954			467.9
Acquisition-related expenses		2,682			—			2,682		n/m			8,472			(8,472	)	(100.0	)	5,831			—			5,831			n/m		2,682			(2,682		)	n/m
Restructuring charges		778			—			778		n/m			676			(676	)	(100.0	)	—			—			—			—		778			(778		)	n/m
Operating income		35,011			41,121			(6,110	)	(14.9	)		10,924			30,197		276.4		38,395			59,994			(21,599		)	(36.0	)	36,181			23,813			65.8
Operating margin		8.1	%		10.8	%		n/a		(2.7	)		4.5	%		n/a		6.3		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)(6)	Total		2012		2013		2014		2015		2016		Thereafter


															Payments Due by Period
Cash Obligations ^{(1) (2) (3) (4) (5)}															Total		2014		2015		2016		2017		2018		Thereafter
Long-term debt and notes payable	$	249,409	$	26,541	$	32,243	$	37,500	$	40,625	$	112,500	$	-	$	388,640	$	22,024	$	31,131	$	30,625	$	40,500	$	264,360	$	—
Interest on long-term debt		23,148		6,714		5,805		4,894		3,854		1,881	��	-	33,292		8,576		7,955		7,144		6,346		3,271		—
Operating leases		38,139		12,897		9,992		7,424		4,781		2,115		930	51,268		17,559		13,509		8,940		5,457		3,082		2,721
Total contractual cash obligations	$	310,696	$	46,152	$	48,040	$	49,818	$	49,260	$	116,496	$	930	$	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⁾	Interest on long-term debt was calculated using the current annualized rate on our long-term debt as discussed in Note 5 to the consolidated financial statements contained in this report.

~~(3)~~
⁽³⁾	At December 31, ~~2011,~~2013, we had ~~$16.3~~$0.7 million in earnout and contingent liabilities that are expected to be paid out byin the ~~end~~first quarter of ~~2013. See Note 1 to the consolidated financial statements contained in this report for further detail regarding earnout liabilities associated with our 2011 acquisitions.~~2014.


⁽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.

~~(5)~~
⁽⁵⁾	There were no material purchase commitments at December 31, ~~2011.~~2013.



Energy and Mining	$	77.4	$	138.6
North American Sewer and Water Rehabilitation		101.8
European Sewer and Water Rehabilitation		21.8
Asia-Pacific Sewer and Water Rehabilitation		5.7
North American Water and Wastewater			101.6
International Water and Wastewater			28.5
Commercial and Structural		43.2	65.5
Total goodwill	$	249.9	$	334.2



Management’s Report on Internal Control Over Financial Reporting	47 53

Report of Independent Registered Public Accounting Firm	48 54

Consolidated Statements of Income for the Years Ended December 31, ~~2011, 2010~~2013, 2012 and ~~2009~~2011	49 55

Consolidated ~~Balance Sheets,~~Statements of Comprehensive Income for the Years Ended December 31, ~~2011~~2013, 2012 and ~~2010~~2011	50 56

Consolidated Balance Sheets at December 31, 2013 and 2012	57

Consolidated Statements of Equity for the Years Ended December 31, ~~2011, 2010~~2013, 2012 and ~~2009~~2011	41 58

Consolidated Statements of Cash Flows for the Years Ended December 31, ~~2011, 2010~~2013, 2012 and ~~2009~~2011	52 59

Notes to Consolidated Financial Statements	53 60



/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)

	December 31, 2011		December 31, 2010
Assets
Current assets
Cash and cash equivalents	$	106,129	$	114,829
Restricted cash		82		745
Receivables, net		228,313		178,994
Retainage		33,933		28,726
Costs and estimated earnings in excess of billings		67,683		69,544
Inventories		54,540		42,524
Prepaid expenses and other current assets		27,305		30,031
Current assets of discontinued operations		—		1,193
Total current assets		517,985		466,586
Property, plant & equipment, less accumulated depreciation		168,945		164,486
Other assets
Goodwill		249,888		190,120
Identified intangible assets, less accumulated amortization		149,655		73,147
Investments		26,680		27,989
Deferred income tax assets		5,418		4,115
Other assets		6,393		4,260
Total other assets		438,034		299,631
Non-current assets of discontinued operations		—		2,607

Total Assets	$	1,124,964	$	933,310

Liabilities and Equity
Current liabilities
Accounts payable		72,326		74,820
Accrued expenses		69,417		73,035
Billings in excess of costs and estimated earnings		24,435		12,612
Current maturities of long-term debt and line of credit		26,541		13,028
Total current liabilities		192,719		173,495
Long-term debt, less current maturities		222,868		91,715
Deferred income tax liabilities		38,167		32,330
Other non-current liabilities		22,221		9,063
Total liabilities		475,975		306,603

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 39,352,375 and 39,246,015, respectively		394		392
Additional paid‑in capital		260,680		251,578
Retained earnings		373,796		347,249
Accumulated other comprehensive income		5,862		18,113
Total stockholders' equity		640,732		617,332
Non-controlling interests		8,257		9,375
Total equity		648,989		626,707

Total Liabilities and Equity	$	1,124,964	$	933,310


⁽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.

Aegion Corporation and Subsidiaries Consolidated Statements of Equity For the Years Ended December 31, 2011, 2010 and 2009 (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, December 31, 2008		27,977,785		$	280		$	109,235		$	260,616	$	(2,154	)	$	3,012		$	370,989
Foreign currency translation revision (See Note 2)													4,223						4,223
BALANCE (Revised) Dec. 31, 2008		27,977,785		$	280		$	109,235		$	260,616	$	2,069		$	3,012		$	375,212
Net income		–			–			–			26,171		–			1,154			27,325		$	27,325
Issuance of common stock, including tax benefits		10,573,540			106			130,297			–		–			–			130,403			–
Restricted stock and stock units issued		429,725			4			–			–		–			–			4			–
Issuance of shares pursuant to deferred stock units		21,645			–			–			–		–			–			–			–
Forfeitures of restricted stock		(68,751	)		(1	)		–			–		–			–			(1	)		–
Equity-based compensation expense		–			–			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 derivatives		–			–			–			–		16,533			327			16,860			16,860
Total comprehensive income																						44,185
Less: total comprehensive income attributable to noncontrolling interests																						(1,481	)
Total comprehensive income attributable to common stockholders																					$	42,704
BALANCE December 31, 2009		38,933,944		$	389		$	242,563		$	286,787	$	18,602		$	5,470		$	553,811
Net income		–			–			–			60,462		–			1,418			61,880		$	61,880
Issuance of common stock, including tax benefits		132,485			1			2,302			–		–			–			2,303			–
Restricted shares issued		184,656			2			–			–		–			–			2
Issuance of shares pursuant to restricted stock units		32,156			–			–			–		–			–			–			–
Issuance of shares pursuant to deferred stock units		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 derivatives		–			–			–			–		(489	)		307			(182	)		(182	)
Total comprehensive income																						61,698
Less: total comprehensive income attributable to noncontrolling interests																						(1,725	)
Total comprehensive income attributable to common stockholders																					$	59,973
BALANCE December 31, 2010		39,246,015		$	392		$	251,578		$	347,249	$	18,113		$	9,375		$	626,707
Net income (loss)		–			–			–			26,547		–			1,123			27,670		$	27,670
Issuance of common stock, including tax benefits		128,052			1			3,610			–		–			–			3,611			–
Restricted shares issued		168,018			2			–			–		–			–			2			–
Issuance of shares in connection with Fyfe Group acquisition		246,760			2			3,998			–		–			–			4,000			–
Issuance of shares pursuant to restricted stock units		9,934			–			–			–		–			–			–			–
Issuance of shares pursuant to deferred stock units		20,640			–			–			–		–			–			–			–
Forfeitures of restricted shares		(140,448	)		–			–			–		–			–			–			–
Stock repurchase program		(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 derivatives		–			–			–			–		(12,251	)		(1,126	)		(13,377	)		(13,377	)
Total comprehensive income																						14,293
Less: total comprehensive income attributable to noncontrolling interests																						3
Total comprehensive income attributable to common stockholders																					$	14,296
BALANCE December 31, 2011		39,352,375		$	394		$	260,680		$	373,796	$	5,862		$	8,257		$	648,989



	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

	Year Ended
	December 31,
	2011		2010

Revenues	$	976,621	$	987,610
Net income(1)		29,531		69,923