Operating Results for the Year Ended December 31, 2013 Compared to the Years Ended December 31, 2012 and 2011  Services Revenue Product Sales Revenue Cost of Services, excluding depreciation Cost of Product Sales, excluding depreciation General and Administrative Expense 19 General and administrative expenses include corporate management and centralized administrative services that benefit our operations.  General and administrative expenses were $52.0 million for 2013, which represents 4.8% of revenue, a slight increase compared to  4.4% of revenue in 2012. General and administrative expenses as a percent of revenue were 4.5% in 2011. The increase during 2013  was primarily attributable to increases in compensation costs, including variable compensation. Cost of product sales increased to $218.0 million for 2013 from $208.7 million for 2012 and $198.1 million for 2011. As a percentage  of product sales revenue, cost of sales decreased to 70.8% for 2013 compared to 72.7% for 2012 and up from 69.3% for 2011. The  decrease in cost of sales as a percentage of product sales revenue was primarily due to the growing demand for our new technologies  which led to an overall increase in sales, which improved absorption of our fixed cost structure. The increase in cost of sales as a percentage of product sales revenue in 2012, as compared to 2011, was primarily due to the substantial increase in the cost of raw  materials, especially specialty steel, in the second half of 2011 which increased our cost of product sales in 2012 as these raw mate- rials were converted to finished goods which were subsequently sold. Cost of services increased to $445.0 million for 2013 from $413.1 million for 2012 and $395.3 million for 2011. As a percentage of  services revenue, cost of services decreased to 58.1% in 2013 from 59.5% in 2012 and 63.6% in 2011. The margin improvement is a result of higher sales, including a better mix of projects aimed at more complex reservoirs, over the fixed cost structure. Product sales revenue increased to $308.1 million for 2013, from $287.2 million for 2012 and $285.9 million for 2011. The increase  in revenue from 2012 to 2013, was driven primarily by the continued successful introduction of new technologies such as our new  completion systems for optimizing completions and stimulations of horizontal wells, including our HTD-BLAST $_{ }$TM  and KODIAK  TM Enhanced Perforating Systems, and our permanent reservoir monitoring systems, primarily in the Canadian market. The increase in  revenue from 2011 to 2012 was due to greater market penetration of our patented and proprietary completion systems. Services revenue increased to $765.4 million for 2013  from $693.9 million for 2012 and $621.8 million for  2011. The increase in services revenue from 2012  to 2013 was primarily due to our continued focus  on existing fields and fields under development, as  opposed to increasingly volatile and downward trends  in exploration efforts. The increase in services revenue  from 2011 to 2012 was primarily due to our contin- ued focus on worldwide crude-oil related and large  natural gas plays for liquefaction projects, especially  those related to the development of deepwater fields  offshore West and East Africa, eastern South America,  the eastern Mediterranean, and the Gulf of Mexico. We evaluate our operating results by analyzing  revenue, operating income and net income margin  (defined as net income divided by total revenue).  Since we have a relatively fixed cost structure,  increases in revenue generally translate into higher  operating income results as well as net income  margin percentages. Results for the years ended  December 31, 2013, 2012 and 2011 are summarized in the following chart: $ 0 $ 200 $ 400 $ 600 $ 800 $ 12,00 $ 1,000 0% 5% 10% 15% 20% 25% 30% 2013 Revenue (in millions) Operating Income (in millions) Net Income Margin (%) Income and Margin Analysis 2012 2011