ThirdQuarter2016Earnings

November1,2016

SafeHarbor
ThePrivateSecuritiesLitigationReformActof1995providesasafeharborforforwardlookingstatements.The
CompanymakesforwardlookingstatementsinthispresentationthatrepresenttheCompanysbeliefsor
expectationsaboutfutureeventsorfinancialperformance.Theseforwardlookingstatementsarebasedon
informationcurrentlyavailabletotheCompanyandonmanagementsbeliefs,assumptions,estimatesand
projectionsandarenotguaranteesoffutureeventsorresults.Whenusedinthispresentation,thewords
anticipate,estimate,believe,plan,intend,may,willandsimilarexpressionsareintendedtoidentify
forwardlookingstatements,butarenottheexclusivemeansofidentifyingsuchstatements.Suchstatementsare
subjecttoknownandunknownrisks,uncertaintiesandassumptions,includingthosereferredtointheRiskFactors
sectionoftheCompanysAnnualReportonForm10KfortheyearendedDecember31,2015asfiledwiththe
SecuritiesandExchangeCommissiononFebruary29,2016andintheCompanyssubsequentlyfiledreports.Inlight
oftheserisks,uncertaintiesandassumptions,theforwardlookingeventsdiscussedmaynotoccur.Inaddition,the
Companysactualresultsmayvarymateriallyfromthoseanticipated,estimated,suggestedorprojected.Exceptas
requiredbylaw,theCompanydoesnotassumeadutytoupdateforwardlookingstatements,whetherasaresultof
newinformation,futureeventsorotherwise.Investorsshould,however,reviewadditionaldisclosuresmadebythe
CompanyfromtimetotimeinitsfilingswiththeSecuritiesandExchangeCommission.Pleaseusecautionanddonot
placerelianceonforwardlookingstatements.AllforwardlookingstatementsmadebytheCompanyinthis
presentationarequalifiedbythesecautionarystatements.
Inaddition,someofthemarketandindustrydataandforecastsincludedinthispresentationarebasedupon
independentindustrysources.Althoughwebelievethattheseindependentsourcesarereliable,wehavenot
independentlyverifiedtheaccuracyandcompletenessofthisinformation.
Aegion,Fibrwrap,Tyfo,TiteLinerandUndergroundSolutionsandourothertrademarksreferencedhereinare
theregisteredandunregisteredtrademarksofAegionCorporationanditsaffiliates.

AegionsQ316financialresultswerelargely
inlinewithinternalexpectations
AegionConsolidated
EarningsperDilutedShare
Q3'15
Q3'16

$0.40

$0.44

$0.34

InfrastructureSolutions
Recordplatformrevenuesandoperatingincomewereprimarilytheresultof
recordperformanceintheNorthAmericanCIPPmarketandstrong
performanceintheAsiaPacificregion

CorrosionProtection
$0.32

Returnedtoprofitabilitybecauseofincreasedactivityforcathodic
protectionservicesinNorthAmerica;however,limitedupstreampipe
coatingandliningactivitiesinNorthAmericaandunanticipatedcostson
aninternationalfieldcoatingprojectnegativelyimpactedoperating
incomebyapproximately$7million

EnergyServices
Returnedtoprofitabilityaftercompletingthedownsizingofthe
upstreamoperationsinCentralCalifornia
GAAPEPS

AdjustedEPS

Adjusted(nonGAAP)reconciliationcanbe
foundintheappendixofthispresentation

2016Restructuring
Expectannualizedcostreductionstoreachapproximately$17million,
mostofwhichistoberecognizedin2016

Outlook

ExpectationsforstrongperformanceinQ416willleadtoexpectedadjusted
2H16EPSlargelyinlinewiththeprioryearperiodbecauseoffavorablemarket
conditionsinAegionscoreendmarkets

Favorableendmarketsandthesuccessfulexecutionofthelargedeepwater
pipecoatingandinsulationprojectcreateafoundationforsignificantearnings
growthin2017

AstrongQ416isexpectedtoresultina
recordyearforInfrastructureSolutions
InfrastructureSolutions2016FullYearOutlook
InfrastructureSolutions
ContractBacklog
$millionUSD

$348

$312
10%

September30,
2015

September30,
2016

Reportedbacklogdeclined10%becauseofunusually
strongordersduring1H15
BacklogremainedinlinewithbacklogasofJune30,
2016indicatingacontinuedstrongposition

InsituformCIPP

Expectmodestrevenueandoperatingincomegrowth,
includingthecontributionfromUndergroundSolutions
ExpectstrongQ416performancedueto:
Favorablemarketconditionsandstrongbackloginthe
NorthAmericawastewaterCIPPmarket,thelargest
marketforInfrastructureSolutions
Contributionfromtheinternationalmarkets,primarily
AsiaPacific,becauseofastrongerbacklogposition
Costreductionsfromthe2016Restructuringexpectedto
reach$3million,mostofwhichistoberealizedin2016

Initial2017Outlook
FavorableconditionsexpectedtocontinueintheNorthAmerican
waterandwastewaterpipelinerehabilitationmarkets

Tyfo/Fibrwrap

FusiblePVC

CorrosionProtectionexpectedtohavestrongerperformanceinQ416
CorrosionProtection
ContractBacklog

$millionUSD

$254
$185

+38%

September30, September30,
2015
2016

CorrosionProtection2016FullYearOutlook
Backlogincludesa deepwater pipe
coatingandinsulationcontract
initiallyvaluedatover$130
million

Expectrevenuestobeinlinewith2015,butasmalldeclinein
operatingincomeduetochallengingupstreammarketconditions
andtheabsenceofrevenuesandprofitsfromtheCanadianpipe
coatingJV,whichwassoldinFebruary2016

Backlogforcathodicprotection
services,primarilyinthe
midstreammarket,remainsata
highlevel

StrongperformanceexpectedinQ416:
Pipecoatingandinsulationproductionforthelarge
deepwater project
Strongbacklogforcathodicprotectionservices
Improvedbacklogpositionintheupstreammarket

September30,2016backlog
reflectsthenegativeimpactfrom
amoredifficultupstreammarket

Costreductionsfromthe2016Restructuringexpectedtoreach
$8million,mostofwhichistoberealizedin2016

Initial2017Outlook
Amorefavorableoutlookisexpectedbecauseofimproving
conditionsforNorthAmericacathodicprotectionservices,
executionofthelargedeepwater pipecoatingandinsulation
projectandexpectationsforamorestableupstreammarket

CathodicProtectionServices

PipeCoating&Insulation

TiteLiner

RoboticInteriorWeldCoating

EnergyServicesexpectsimprovedperformancein2H16after
completingthedownsizingofitsupstreamoperations
EnergyServices
ContractBacklog

$millionUSD

$213
$26

$177

$187

EnergyServicesFullYear2016Outlook
Backlogdeclinereflectsthe
downsizingofEnergyServices
upstreamoperationsin
CentralCaliforniaandreduced
turnaroundactivities

17%

September30,
2015

ImprovedperformanceexpectedinQ416:
Downstreamsegmentremainsfavorablewithsteady
demandformaintenanceservicesintheWestCoastrefining
market
Severalturnaroundsunderway,butlessthanintheprior
yearquarter

September30,
2016

DownsizedUpstream

Revenuesexpectedtobenear$250millionwithsignificantly
improvedoperatingmarginsinQ416

Remaining

EnergyServicesbacklogrepresentsestimated12monthsunrecognizedrevenuestoberealized
underlongtermmasterserviceagreementsandothersignedcontracts.Contractsthatareupfor
renewalarenotincludedinthenext12monthsbacklogpasttherenewaldate.

2016Restructuringexpectedtoreduceannualcostsby
approximately$6million,mostofwhichistoberealizedin2016

Initial2017Outlook
ExpectimprovedmarketconditionsintheU.S.WestCoastrefinery
marketfordaytodaymaintenanceandturnaroundservices

Mechanicalmaintenanceservices,primarilypiping,electrical&instrumentationmaintenance,engineering,smallcapitalconstructionandturnaroundsupportservices

Strategyforsustainablegrowthexpectedto
drivegrowthinEPS,cashflowandROIC

Lowtomiddoubledigit
EPSGrowth
(ThreeyearCAGR)

ThreeyearTargets
OperatingCashFlow
>200%ofNetIncome

ROICNear9%

FreeCashFlow>100%
ofNetIncome

Aegionconsolidatedlongrangeplanexpectations

Q316revenueperformancereflectscontinuing
challengesintheupstreamenergymarket
InfrastructureSolutions RecordrevenuesintheNorthAmericanCIPPmarket
$158.6

$149.6

Significantheadwindin2016fromtheabsenceofa$13millionindustrialpressurepipeprojectcompleted
duringQ315andchallengesincertaininternationalCIPPmarkets,primarilyinEurope

+6.0%
Q3'15

HighsingledigitrevenuegrowthintheNorthAmericanCIPPmarket,whichaccountedforover70%of
platformrevenues

Q3'16

InUSDmillions

CorrosionProtection
$121.4
$95.1
21.7%
Q3'15

Q3'16

RevenuesforcathodicprotectionservicesinNorthAmerica,asignificantportionofplatformrevenues,
grewlowsingledigitsandrevenuesforTiteLinerpipelineprotectioninNorthAmericagrewsignificantly
Internationalactivityslowedinthequarteraftersubstantiallycompletingofanumberoflargerprojects
earlierin2016

InUSDmillions

Q315 included$7millioninrevenuesfromtheCanadianpipecoatingJV,whichwassoldinFebruary2016

EnergyServices

Favorabledownstreammaintenanceactivitiesoffsetbydownsizedupstreamoperationsand
reducedturnaroundactivity

$85.6
$54.9
35.9%
Q3'15

Q3'16

InUSDmillions

Increasedrevenuesfromcathodicprotectionservicespartiallyoffsetreducedactivityin
upstreamandminingmarkets

DownsizedupstreamoperationactivitiesinCentralCaliforniaaccountedforoverhalf oftherevenue
decline
Revenuesinthedownstreammarketdeclinedbecauseofreducedturnaroundactivitycomparedtothe
prioryearquarterandtheabsenceonetimerefinerycleanupservicescompletedin2015
Revenuemixnowapproximately85%/15%downstreamversusupstream

3Q16adjustedgrossmarginimpactedbytheabsenceofhighermargin
upstreamactivityandalargeindustrialFRPpipelinerehabilitationproject
InfrastructureSolutions
26.8%

CorrosionProtection
22.7%

25.6%
120bps

Q3'15

EnergyServices

320bps

Q3'15

Q3'16

Continuedstrongperformance
inN.A.CIPPmarket
Grossmarginsdeclinedbecauseof:
AbsenceinQ316ofa$13million,
highmargin,TyfoFibrwrapFRP
industrialpressurepipeproject
completedin2015
Challengesincertaininternational
CIPPmarkets,primarilyinEurope
StrongperformanceintheN.A.
wastewaterCIPPmarkethelpedto
maintaingrossmarginsatahighlevel

+40bps

Q3'16

Q3'15

Morechallengingupstreammarketoffsets
resultsfromimprovingU.S.midstreammarket
Grossmarginsdeclinedbecauseof:
LimitedGulfCoastpipecoatingactivity
LowermarginsintheCanadianenergy
market
Unanticipatedcostsoncertain
internationalfieldcoatingprojects

Q3'16

Improvedmarginsaftercompletion
ofupstreamdownsizing
Grossmarginsexpandedbecauseof
improvedlaborutilization,whichoffseta
reducedlevelofhighermarginturnaround
activities

Grossmarginsforcathodicprotection
servicesintheU.S.wereinlinewiththeprior
yearquarter
GrossmarginsexpandedforTiteLiner
installationsintheU.S.

FRP=fiberreinforcedpolymer

13.4%

13.0%

19.5%

Adjusted(nonGAAP)reconciliationcanbefoundintheappendixofthispresentation

Recordcashbalanceatyearend2015helpedtofund
severalacquisitionsandsharerepurchasesin2016
AegionSources/UsesofCash

FirstNineMonthsof2016vs.2015
Cashflowfromoperatingactivities

$212

$36
$32

$13

Provided$37millioncomparedto$69millionin2015
Strongcashflowin2015fromthewinddownofcertainAsian
CIPPcontractingoperations
DSOsdecreasedapproximately3 days,excludingpaymentsfor
thelargedeepwater pipecoatingandinsulationproject,because
ofafocusedefforttoimprovecashcollections

$37
$37
$7
$96

Accountspayableandaccruedexpenseswerea$42millionuse
ofcashcomparedtoa$7millionsourceofcashduetoincreased
vendorpayments

$113

Cashflowfrominvestingactivities

Strategicacquisitionstotaled$96million,including$85millionplus
purchaseoftaxNOLstoacquireUndergroundSolutionsonFebruary
18,2016

CAPEXwas$10.3millionhigherthantheprioryearperiodbecause
ofconstructionofaplantforthedeepwater pipeinsulationcoating
project

Netproceedsof$6.6millionfromthesaleoftheCompanys51%
interestinaCanadianpipecoatingfacilityJVinFebruary2016

InUSDMillions

Cashflowfromfinancingactivities

10

Debtrepaymentsof$13.1millionperthetermsofAegionscredit
agreement

Repurchasedapproximately1.9millionsharesofAegioncommon
stockfor$36.6million,includingrepurchasesassociatedwiththe
managementincentiveequityplan

Appendix

11

Aegionthirdquarterandfirstninemonthfinancialresults
SelectedfinancialresultsforthequartersandninemonthperiodsendedSeptember30,2016and2015 Adjusted1 (nonGAAP)

(inUSDthousands,exceptmarginsandpershareinformation)

3Q2016

3Q2015

Change

YTD2016

YTD2015

Change

Revenues

$ 308,524 $ 356,595

(13.5)% $ 900,118 $ 1,002,857

(10.2)%

AdjustedGrossProfit

66,448

78,782

(15.7)% 185,669

(12.0)%

21.5 %

22.1 %

AdjustedOperatingIncome

19,419

26,785

AdjustedOperatingMargin

6.3 %

7.5 %

AdjustedGrossMargin

60bp

211,007

20.6 %

21.0 %

(27.5)% 41,868

57,233

120bp

4.7 %

40bp
(26.8)%

5.7 %

100bp

SegmentAdjustedOperatingIncome
InfrastructureSolutions

$ 18,504 $ 17,645 $859 $ 45,689 $ 43,568 $ 2,121

CorrosionProtection

690

7,343

(6,653) (3,755) 8,780

(12,535)

EnergyServices

225

1,797

(1,572) (66) 4,885

(4,951)

$ 11,280 $ 16,196

(30.4)% $ 23,597 $ 34,072

(30.7)%

$0.32 $0.44

(27.2)% $0.67 $0.92

(27.8)%

Adjusted Net Income

(Attributable to Aegion Corporation)

Adjusted Diluted Earnings per Share

(Attributable to Aegion Corporation)

ReportedConsolidatedBacklog $ 743.9 $ 746.1

1

(0.3)%

AdjustedfinancialresultsaredefinedasGAAPresultsexcludingnonrecurringitems(nonGAAP).SeereconciliationtoGAAPinthefollowingpages.
Prioryearreportedbacklogincludescertaininternationalmarketsthatwerepartofthe2014RealignmentandRestructuringinitiative.

A1

2016thirdquarternonGAAPreconciliation
All financial data presented is from continuing operations

(inUSDthousands,exceptpershareinformation)

AsReported
(GAAP)

Restructuring
Charges 1

AcquisitionRelated
Reversalof
2
Expenses
ContingencyReserve3

CostofRevenues $242,206 $(130) $

AsAdjusted
(NonGAAP)

$ 242,076

66,448

2,336

47,029

AcquisitionRelatedCharges 324 (324)

GrossProfit 66,318 130

OperatingExpenses 45,277 (584)
RestructuringCharges 212 (212)

OperatingIncome 20,505 926 324

OtherIncome/(Expense) 288 (1)

(2,336) 19,419

287

IncomebeforeTaxes 17,005 925 324

(2,336) 15,918

TaxesonIncome 5,218 499 79

(878) 4,918

Income
(attributable to Aegion Corporation)

$12,067 $426 $245 $ (1,458) $ 11,280

DilutedEarningsperShare $0.34 $0.01 $0.01 $ (0.04) $ 0.32

(1)

IncludesthefollowingnonGAAPadjustments:(i)pretaxrestructuringchargesforcostofrevenuesof$130relatedtothewriteoffofcertainotherassets;(ii)pretaxrestructuringchargesfor
operatingexpensesof$584relatedtowinddownandotherrestructuringrelatedcharges;(iii)pretaxrestructuringchargesof$212relatedtoemployeeseverance,extensionofbenefits,
employmentassistanceprogramsandearlyleaseterminationcostsinaccordancewithASC420,ExitorDisposalCostObligations,andrecordedasRestructuringchargesintheConsolidated
StatementsofOperations;and(iv)pretaxrestructuringchargesforotherexpenseof$1relatedtothereleaseofcumulativecurrencytranslationadjustments.Thevastmajorityofrestructuring
chargesrelatetothe2016Restructuring.

(2)

IncludesnonGAAPadjustmentsrelatedtoexpensesincurredinconnectionwiththeCompanysacquisitionsofUndergroundSolutions,selectedassetsofFyfeEurope,theCIPPbusinessofLeif
M.JensenA/SandConcreteSolutions,andotherpotentialacquisitionactivitypursuedbytheCompanyduringthequarter.

(3)

IncludesthereversalofapretaxcontingencyreserveestablishedaspartoftheopeningbalancesheetfortheacquisitionofBrinderson L.P.

NetincomeIncludesnoncontrollinginterests.

A2

2015thirdquarternonGAAPreconciliation
All financial data presented is from continuing operations

(inUSDthousands,exceptpershareinformation)

AsReported
(GAAP)

Restructuring

Acquisition
RelatedExpenses

CostofRevenues $279,474 $ (1,661) $

GrossProfit 77,121

AsAdjusted
(NonGAAP)
$ 277,813

1,661

78,782
51,997

OperatingExpenses

51,554

443

AcquisitionRelatedCharges

457

(457)

RestructuringCharges

172

(172)

OperatingIncome

24,938

1,390 457

26,785

OtherIncome/(Expense) (359) 66

(293)

IncomebeforeTaxes

21,460

1,498 457

23,415

TaxesonIncome

6,237

325 184

6,746

Income
(attributable to Aegion Corporation)

$14,750 $ 1,173 $ 273 $ 16,196

DilutedEarningsperShare $0.40 $ 0.03 $ 0.01 $ 0.44

(1)

IncludesthefollowingnonGAAPadjustments:(i)pretaxrestructuringchargesforcostofrevenuesof$1,661relatedtothewriteoffofcertainotherassets;(ii)pretaxrestructuring
chargesforoperatingexpensesof($443)relatedtothereversalofreservesforpotentiallyuncollectiblereceivablesandother restructuringrelatedcharges;(iii)pretaxrestructuring
chargesof$172relatedtoemployeeseverance,extensionofbenefits,employmentassistanceprogramsandearlyleasetermination costsinaccordancewithASC420,ExitorDisposalCost
Obligations,andrecordedasRestructuringchargesintheConsolidatedStatementsofOperations;and(iv)pretaxrestructuringchargesof$108relatedtothewriteoffofcertainother
assets.

(2)

IncludesnonGAAPadjustmentsrelatedtoexpensesincurredinconnectionwithpotentialacquisitionactivitypursuedbytheCompanyduringthequarter.

NetincomeIncludesnoncontrollinginterests.

A3

InfrastructureSolutionsthirdquarternonGAAPreconciliation

(inUSDthousands)

QuarterEndedSeptember30,2016
AsReported
(GAAP)

(1)

Adjustments

AsAdjusted
(NonGAAP)

QuarterEndedSeptember30,2015
AsReported
(GAAP)

(2)

Adjustments

AsAdjusted
(NonGAAP)

InfrastructureSolutions
Revenues $158,562 $

$158,562

$149,606 $

$149,606

CostofRevenues 117,996

117,996

111,178

(1,661) 109,517

GrossProfit 40,566

40,566

38,428

1,661

40,089

416

22,062

22,001

443

22,444

OperatingExpenses 21,646
AcquisitionRelatedCharges 324

(324)

RestructuringCharges 23

(23)

172

(172)

OperatingIncome $18,573 $ (69) $18,504

$16,255 $1,390 $17,645

(1) IncludesnonGAAPadjustmentsrelatedto:(i)pretaxrestructuringchargesassociatedwiththewriteoffofcertainotherassets,severanceandbenefitrelatedcosts,
andotherrestructuringcharges;and(ii)acquisitionexpensesincurredprimarilyinconnectionwiththeCompanysacquisitionsofUndergroundSolutions,selected
assetsofFyfeEurope,theCIPPbusinessofLeifM.JensenA/SandConcreteSolutions.
(2) IncludesnonGAAPadjustmentsrelatedtopretaxrestructuringchargesassociatedwiththewriteoffofcertainotherassets,reversalof reservesforpotentially
uncollectiblereceivables,earlyleaseterminationcosts,severanceandbenefitrelatedcosts,andotherrestructuringcharges.

A4

CorrosionProtectionthirdquarternonGAAPreconciliation

(inUSDthousands)

QuarterEndedSeptember30,2016
AsReported
(GAAP)

(1)

Adjustments

AsAdjusted
(NonGAAP)

QuarterEndedSeptember30,2015
AsReported
(GAAP)

Adjustments

AsAdjusted
(NonGAAP)

CorrosionProtection
Revenues $95,084 $
CostofRevenues 76,710
GrossProfit 18,374
OperatingExpenses 17,842
RestructuringCharges 19

$95,084

$121,392 $

$121,392

(130) 76,580

93,797

93,797

130

18,504

27,595

27,595

(28) 17,814

20,252

20,252

(19)

OperatingIncome(Loss) $513 $177 $690

$6,886 $457 $7,343

(1) IncludesnonGAAPadjustmentsrelatedtopretaxrestructuringchargesassociatedwiththewriteoffofcertainotherassets,severanceandbenefitrelatedcosts,
andotherrestructuringcharges.
(2) IncludesnonGAAPadjustmentsrelatedtoexpensesincurredinconnectionwithpotentialacquisitionactivitypursuedbytheCompanyduringthequarter.

A5

EnergyServicesthirdquarternonGAAPreconciliation

(inUSDthousands)

QuarterEndedSeptember30,2016
AsReported
(GAAP)

(1)

Adjustments

AsAdjusted
(NonGAAP)

QuarterEndedSeptember30,2015
AsReported
(GAAP)

Adjustments

AsAdjusted
(NonGAAP)

EnergyServices
Revenues $54,878 $

$54,878

$85,597 $

$85,597

CostofRevenues 47,500

47,500

74,499

74,499

GrossProfit 7,378

7,378

11,098

11,098

1,364

7,153

9,301

9,301

OperatingExpenses 5,789
RestructuringCharges 170

(170)

OperatingIncome(Loss) $1,419 $ (1,194) $225

$1,797 $

$1,797

(1) IncludesnonGAAPadjustmentsrelatedto:(i)pretaxrestructuringchargesassociatedwiththewriteoffofcertainotherassets,earlyleaseterminationcosts,severance
andbenefitrelatedcosts,andotherrestructuringcharges;and(ii)reversalofapretaxcontingencyreserveestablishedaspartoftheopeningbalancesheetforthe
acquisitionofBrindersonL.P.

A6

2016firstninemonthsnonGAAPreconciliation
All financial data presented is from continuing operations

(inUSDthousands,exceptpershareinformation)

AsReported
(GAAP)

Restructuring
Charges 1

AcquisitionRelated
Reversalof
Expenses 2
ContingencyReserve3

CostofRevenues $718,196 $ (175) $(3,572) $

GrossProfit 181,922

175

OperatingExpenses 146,808

(5,343)

AsAdjusted
(NonGAAP)
$ 714,449

3,572

185,669

2,336

143,801

AcquisitionRelatedCharges 2,059

(2,059)

RestructuringCharges 8,544

(8,544)

OperatingIncome 24,511

14,062

5,631 (2,336) 41,868

InterestExpense (11,081)

(11,081)

OtherIncome/(Expense) (1,183) 248

(935)

Income(Loss)beforeTaxes 12,444

14,310

5,631 (2,336) 30,049

Taxes(Benefit)onIncome(Loss) 1,413

4,873

1,710 (878) 7,118

$11,697 $ 9,437

$3,921 $(1,458) $ 23,597

DilutedEarnings(Loss)perShare $0.33 $ 0.27

$0.11 $(0.04) $ 0.67

Net Income (Loss)

(attributable to Aegion Corporation)

(1)

IncludesthefollowingnonGAAPadjustments:(i)pretaxrestructuringchargesforcostofrevenuesof$175relatedtothewriteoffofcertainotherassets;(ii)pretaxrestructuringchargesfor
operatingexpensesof$5,343relatedtowinddownandotherrestructuringrelatedcharges;(iii)pretaxrestructuringchargesof$8,544relatedtoemployeeseverance,extensionofbenefits,
employmentassistanceprogramsandearlyleaseterminationcostsinaccordancewithASC420,ExitorDisposalCostObligations,andrecordedasRestructuringchargesintheConsolidated
StatementsofOperations;and(iv)pretaxrestructuringchargesforotherexpenseof$248relatedtothereleaseofcumulativecurrencytranslationadjustments.Thevastmajorityofrestructuring
chargesrelatetothe2016Restructuring.

(2)

IncludesthefollowingnonGAAPadjustments:(i)inventorystepupexpenseof$3,572forcostofrevenuesrecognizedaspartoftheaccountingforbusinesscombinationsinconnectionwiththe
CompanysacquisitionofUndergroundSolutions;and(ii)expensesof$2,059incurredinconnectionwiththeCompanysacquisitionsofUndergroundSolutions,selectedassetsofFyfeEurope,the
CIPPbusinessofLeifM.JensenA/SandConcreteSolutions,andotherpotentialacquisitionactivitypursuedbytheCompanyduringtheperiod.

(3)

IncludesthereversalofapretaxcontingencyreserveestablishedaspartoftheopeningbalancesheetfortheacquisitionofBrinderson L.P.

NetincomeIncludesnoncontrollinginterests.

A7

2015firstninemonthsnonGAAPreconciliation
All financial data presented is from continuing operations

(inUSDthousands,exceptpershareinformation)

CostofRevenues

AsReported
(GAAP)

Restructuring

Acquisition
RelatedExpenses

AsAdjusted
(NonGAAP)

794,493

(2,643)

791,850

GrossProfit 208,364

2,643

211,007

157,964

(4,190)

153,774

DefinitelivedIntangibleAssetImpairment

OperatingExpenses

AcquisitionRelatedCharges

780

(780)

RestructuringCharges

1,034

(1,034)

OperatingIncome

48,586

7,867 780

137,416,433

InterestExpense (9,365) 126

(9,239)

OtherIncome/(Expense) (2,360) 2,736

376

IncomebeforeTaxes

37,090

10,729 780

48,599

TaxesonIncome

11,647

1,917 313

13,877

Income
(attributable to Aegion Corporation)

$24,793 $ 8,812 $ 467 $ 34,072

DilutedEarningsperShare $0.67 $ 0.24 $ 0.01 $ 0.92

(1)

IncludesthefollowingnonGAAPadjustments:(i)pretaxrestructuringchargesforcostofrevenuesof$2,643relatedtothewriteoffofcertainotherassets;(ii)pretaxrestructuring
chargesforoperatingexpensesof$4,190relatedtoreservesforpotentiallyuncollectiblereceivablesandotherrestructuringrelatedcharges;(iii)pretaxrestructuringchargesof$1,034
relatedtoemployeeseverance,extensionofbenefits,employmentassistanceprogramsandearlyleaseterminationcostsinaccordancewithASC420,ExitorDisposalCostObligations,and
recordedasRestructuringchargesintheConsolidatedStatementsofOperations;and(iv)pretaxrestructuringchargesof$2,862relatedprimarilytothewriteoffofcertainotherassets,
includingthelossonthesaleoftheCompanysCIPPcontractingoperationinFrance.

(2)

IncludesnonGAAPadjustmentsrelatedtoexpensesincurredinconnectionwiththeCompanysacquisitionofSchultzMechanicalContractors andotherpotentialacquisitionactivity
pursuedbytheCompanyduringtheperiod.

NetincomeIncludesnoncontrollinginterests.

A8

InfrastructureSolutionsfirstninemonthsnonGAAPreconciliation
(inUSDthousands)

NineMonthsEndedSeptember30,2016
AsReported
(GAAP)

Adjustments1

AsAdjusted
(NonGAAP)

NineMonthsEndedSeptember30,2015
AsReported
(GAAP)

Adjustments1

AsAdjusted
(NonGAAP)

InfrastructureSolutions
Revenues $434,523 $
CostofRevenues 325,038

$434,523

$421,170 $

$421,170

(3,558) 321,480

315,096

(2,643) 312,453

GrossProfit 109,485

3,558

113,043

106,074

2,643

OperatingExpenses 67,348

67,354

69,339

(4,190) 65,149

108,717

AcquisitionRelatedCharges 2,059

(2,059)

RestructuringCharges 2,630

(2,630)

1,034

(1,034)

OperatingIncome $37,448 $8,241 $45,689

$35,701 $7,867 $43,568

(1) IncludesnonGAAPadjustmentsrelatedto:(i)pretaxrestructuringchargesassociatedwiththewriteoffofcertainotherassets,severanceandbenefit
relatedcosts,andotherrestructuringcharges;(ii)inventorystepupexpenserecognizedinconnectionwiththeCompanysacquisitionofUnderground
Solutions;and(iii)acquisitionexpensesincurredprimarilyinconnectionwiththeCompanysacquisitionsofUndergroundSolutions,selectedassetsof
FyfeEurope,theCIPPbusinessofLeifM.JensenA/SandConcreteSolutions.
(2) IncludesnonGAAPadjustmentsrelatedtopretaxrestructuringchargesassociatedwithreservesforpotentiallyuncollectiblereceivables,earlylease
terminationcosts,severanceandbenefitrelatedcosts,andotherrestructuringcharges.

A9

CorrosionProtectionfirstninemonthsnonGAAPreconciliation

(inUSDthousands)

NineMonthsEndedSeptember30,2016
AsReported
(GAAP)

Adjustments1

AsAdjusted
(NonGAAP)

NineMonthsEndedSeptember30,2015
AsReported
(GAAP)

Adjustments1

AsAdjusted
(NonGAAP)

CorrosionProtection
Revenues $281,939 $
CostofRevenues 229,263
GrossProfit 52,676
OperatingExpenses 57,058
AcquisitionRelatedCharges
RestructuringCharges 3,244

$281,939

$329,157 $

$329,157

(189) 229,074

258,846

258,846

189

52,865

70,311

70,311

(438) 56,620

61,531

61,531

457

(457)

(3,244)

OperatingIncome(Loss) $ (7,626) $3,871 $ (3,755) $8,323 $457 $8,780

(1) IncludesnonGAAPadjustmentsrelatedtopretaxrestructuringchargesassociatedwiththewriteoffofcertainotherassets,severanceandbenefit
relatedcosts,andotherrestructuringcharges.
(2) IncludesnonGAAPadjustmentsrelatedtoexpensesincurredinconnectionwithpotentialacquisitionactivitypursuedbytheCompanyduringthe
period.

A10

EnergyServicesfirstninemonthsnonGAAPreconciliation

(inUSDthousands)

NineMonthsEndedSeptember30,2016
AsReported
(GAAP)

Adjustments1

AsAdjusted
(NonGAAP)

NineMonthsEndedSeptember30,2015
AsReported
(GAAP)

Adjustments1

AsAdjusted
(NonGAAP)

EnergyServices
Revenues $183,656 $

$183,656

$252,530 $

$252,530

CostofRevenues 163,895

163,895

220,551

220,551

GrossProfit 19,761

19,761

31,979

31,979

(2,575) 19,827

27,094

27,094

323

(323)

OperatingExpenses 22,402
AcquisitionRelatedCharges
RestructuringCharges 2,670

(2,670)

OperatingIncome(Loss) $ (5,311) $5,245 $ (66) $4,562 $323 $4,885

(1) IncludesnonGAAPadjustmentsrelatedto:(i)pretaxrestructuringchargesassociatedwiththewriteoffofcertainotherassets,earlyleasetermination
costs,severanceandbenefitrelatedcosts,andotherrestructuringcharges;and(ii)reversalofapretaxcontingencyreserveestablishedaspartofthe
openingbalancesheetfortheacquisitionofBrindersonL.P.
(2) IncludesnonGAAPadjustmentsrelatedtoexpensesincurredinconjunctionwiththeCompanysacquisitionofSchultzMechanicalContractors.

A11