$7.6 million of pre-tax charges ($7.3 million after-tax) in the Fluids Systems segment associated with the impairment of intangible and other long-lived assets in the Asia Pacific region and the impairment of inventory in North America.
$0.9 million of pre-tax charges ($0.6 million after-tax) associated with workforce reductions, primarily in the North America Fluids Systems business.
$1.1 million of pre-tax charges ($0.7 million after-tax) associated with the write-off of capitalized financing costs, resulting from the second quarter 2016 termination of our previous $150 million revolving credit facility.
As described in the attached Non-GAAP Earnings Reconciliation, the second quarter of 2016 adjusted net loss was $5.3 million, or $0.06 per share, compared to an adjusted net loss of $12.3 million, or $0.15 per share, in the first quarter of 2016, and an adjusted net loss of $2.1 million, or $0.02 per share, in the second quarter of 2015.
Paul Howes, Newpark's President and Chief Executive Officer, stated, "Despite the continuing sharp decline in North American drilling activity, consolidated revenues were up slightly on a sequential basis, benefiting from strong international fluids performance, and the continued penetration of non-exploration markets in our Mats business. North American fluids revenues declined by 34% sequentially, reflecting the continued softening of U.S. drilling activity and the impact of spring break-up in Canada. However, the North American declines were largely offset by growth in the international markets, including an $11 million revenue contribution from the recently-completed ultra-deepwater project in Uruguay and increased activity in Kuwait. The Fluids segment operating margin improved sequentially, largely reflecting the impact of North American cost reduction actions taken during the previous quarter and the stronger international contribution.
"In the Mats segment, we are continuing to make meaningful progress in our efforts to penetrate new markets, which have served to offset the continued softening in North American exploration activity. Mats segment revenues increased 21% sequentially, largely driven by a $4 million increase in mat sales activity.
"Meanwhile, we continued to strengthen our balance sheet, building our cash position in the quarter while continuing to fund our strategic deepwater infrastructure investments," added Howes. "Benefiting from the recovery of U.S. taxes paid in previous years, our cash balance increased to $93 million at the end of the second quarter. As previously announced, we also recently completed our transition to a $90 million asset-based lending facility, which provides us with additional available liquidity through the cycle, and strengthening our position to manage the maturity of our Convertible Notes."
The Fluids Systems segment generated revenues of $96.2 million in the second quarter of 2016 compared to $98.7 million in the first quarter of 2016 and $140.3 million in the second quarter of 2015. Segment operating loss was $11.9 million in the second quarter of 2016, compared to a $15.2 million loss in the first quarter of 2016 and a $0.2 million loss in the second quarter of 2015. Segment results for the second quarter of 2016 included a total of $8.3 million of charges, including impairments of intangible and other long-lived assets in the Asia Pacific region, as well as costs associated with workforce reductions and the impairment of inventory in North America.
The Mats and Integrated Services segment generated revenues of $19.2 million in the second quarter of 2016 compared to $15.9 million in the first quarter of 2016 and $23.3 million in the second quarter of 2015. Segment operating income was $4.0 million in the second quarter of 2016 compared to operating income of $3.7 million in the first quarter of 2016, and $6.6 million in the second quarter of 2015. Segment operating income in 2016 is benefiting from a reduction in depreciation expense associated with our mat rental fleet, reflecting increases in estimated useful lives and residual values. This change in estimate reduced depreciation expense by $1.5 million in the second quarter of 2016 and $1.6 million in the first quarter of 2016.
Newpark has scheduled a conference call to discuss second quarter 2016 results, which will be broadcast live over the Internet, on Friday, July 29, 2016 at 10:00 a.m. Eastern Time / 9:00 a.m. Central Time. To participate in the call, dial (412) 902-0030 and ask for the Newpark conference call at least 10 minutes prior to the start time, or access it live over the Internet at www.newpark.com. For those who cannot listen to the live call, a replay will be available through August 12, 2016 and may be accessed by dialing (201) 612-7415 and using pass code 13638973#. Also, an archive of the webcast will be available shortly after the call at www.newpark.com for 90 days.
This news release contains forward-looking statements within the meaning of the Private Securities Litigation Reform Act that are based on management's current expectations, estimates and projections. All statements that address expectations or projections about the future, including Newpark's strategy for growth, product development, market position, expected expenditures and financial results are forward-looking statements. Some of the forward-looking statements may be identified by words like "expects," "anticipates," "plans," "intends," "projects," "indicates," and similar expressions. These statements are not guarantees of future performance and involve a number of risks, uncertainties and assumptions. Many factors, including those discussed more fully elsewhere in this release and in documents filed with the Securities and Exchange Commission by Newpark, particularly its Annual Report on Form 10-K for the year ended December 31, 2015, as well as others, could cause results to differ materially from those expressed in, or implied by, these statements. These risk factors include, but are not limited to, risks related to the worldwide oil and natural gas industry, our customer concentration and reliance on the U.S. exploration and production market, the cost and continued availability of borrowed funds including noncompliance with debt covenants, our international operations, operating hazards present in the oil and natural gas industry, our ability to execute our business strategy and make successful business acquisitions and capital investments, the availability of raw materials and skilled personnel, our market competition, legal and regulatory matters, including environmental regulations, inherent limitations of insurance coverage, potential impairments of long-lived intangible assets, technological developments in our industry, our exposure to cybersecurity breaches or business system disruptions, and the impact of severe weather, particularly in the U.S. Gulf Coast. Newpark's filings with the Securities and Exchange Commission can be obtained at no charge at www.sec.gov, as well as through our website at www.newpark.com.
Note: For all periods presented, we excluded all potentially dilutive stock options and restricted stock as well as the assumed conversion of the Senior Notes in calculating diluted earnings per share as the effect was anti-dilutive due to the net losses incurred for these periods.
To help understand the Company's financial performance, the Company has supplemented its financial results that it provides in accordance with generally accepted accounting principles ("GAAP") included in this press release with non-GAAP financial measures. Management believes that these non-GAAP financial measures are helpful in understanding the Company's financial performance. Such non-GAAP financial measures include "Adjusted net loss" and "Adjusted net loss per diluted share" which have been adjusted for items that the Company believes are infrequent or not indicative of ongoing operating performance. Management believes that the exclusion of these items from the historical results of operations enables management to evaluate more effectively the Company's operations over the prior periods and to identify operating trends that could be obscured by the excluded items.
The methods the Company uses to produce these non-GAAP financial measures may differ from methods used by other companies. The foregoing non-GAAP financial measures should be considered in addition to, not as a substitute for, financial measures prepared in accordance with GAAP, as more fully discussed in the Company's financial statements and filings with the Securities and Exchange Commission.
(a) Represents the tax effects of the aggregate adjustments during the period. For the three months ended June 30, 2016, our Australian subsidiary is generating a pre-tax loss, for which the recording of a tax benefit is not permitted. As a result, there is no tax benefit associated with the impairment of intangibles and other long-lived assets in the Asia Pacific region. For the three months ended June 30, 2015, the provision for income taxes also includes a tax adjustment of $1.7 million to impair previously-recorded deferred tax assets in Australia.