What changed in this filing

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Item 1A. Risk Factors

2025-02-27 compared with 2024-02-29 · 113 added, 115 removed, 389 unchanged (37% of the section changed)

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This summary should be read in connection with the Risk Factors more fully described below and should not be relied upon as an exhaustive summary of the material risks facing our business.

• Risks Related to Our Macroeconomic-Business Environment

◦ Certain of our customers’ spending may be directly, and our business may be indirectly, affected by (i) volatile or low oil, metallurgical (met) coal, natural gas or iron ore prices;

(ii) increasing production costs;

or (iii) unsuccessful exploration results.

◦ The effects of public health crises, pandemics and epidemics may materially affect how we and our customers are operating our and their businesses.

• Risks Related to Our Customers

◦ Certain of our customers’ spending may be directly, and our business may be indirectly, affected by (i) volatile or low met coal, oil, natural gas or iron ore prices;

(ii) elevated or increasing production costs;

or (iii) unsuccessful exploration results.

◦ Our customers and their operations are exposed to a number of unique operating risks and challenges.

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◦ Employee and customer labor problems could adversely affect us.

◦ Failure to develop or maintain positive relationships with the Indigenous people in the areas where we operate could adversely affect our business.

◦ Development of permanent infrastructure in the areas where we locate our assets could negatively impact our business.

◦ A failure to maintain food safety or comply with government regulations related to food and beverages or serving alcoholic beverages may subject us to liability.

◦ The majority of our major Canadian lodges are located on land subject to leases.

◦ We are susceptible to seasonal earnings volatility due to adverse weather conditions in our regions of operations.

◦ Failure to maintain positive relationships with the Indigenous people in the areas where we operate could adversely affect our business.

◦ Development of permanent infrastructure in the areas where we locate our assets could negatively impact our business.

◦ We are susceptible to seasonal earnings volatility due to seasonal weather patterns in our regions of operations.

◦ We may be subject to risks associated with the transportation, installation and demobilization of mobile accommodations.

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◦ Loss of key members of our management could adversely affect our business.

◦ The effects of public health crises, pandemics and epidemics may materially affect how we and our customers are operating our and their businesses.

• Financial/Accounting Risks

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Risk Factors:

Risks Related to Our Macroeconomic Business Environment

Certain of our customers’ spending may be directly, and our business may be indirectly, affected by (i) volatile or low oil, metallurgical (met) coal, natural gas or iron ore prices;

(ii) increasing production costs;

Risks Related to Our Customers

Certain of our customers’ spending may be directly, and our business may be indirectly, affected by (i) volatile or low met coal, oil, natural gas or iron ore prices;

(ii) elevated or increasing production costs;

or (iii) unsuccessful exploration results.

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Our business typically supports customer projects that are capital intensive and require several years to generate first production, with production lasting for decades.

The economic analyses conducted by our customers in Canadian oil sands, Australian mining and global liquefied natural gas (LNG) investment areas have historically assumed a relatively conservative longer-term price outlook for production from such projects to determine economic viability.

The economic analyses conducted by our customers in Australian mining, Canadian oil sands and global LNG investment areas have historically assumed a relatively conservative longer-term price outlook for production from such projects to determine economic viability.

The willingness of natural resources companies to explore, develop and produce depends largely upon the availability of attractive resource prospects and the prevailing view of future commodity prices, and expenditures by our natural resources customers generally lag changes in commodity prices by at least three to six months.

Prices for oil, met coal, LNG, iron ore and other natural resources are subject to large fluctuations in response to changes in global supply of and demand for these commodities.

Prices for met coal, oil, LNG, iron ore and other natural resources are subject to large fluctuations in response to changes in global supply of and demand for these commodities.

Other factors beyond our control that affect commodity prices include:

• worldwide economic activity including growth in and demand for oil, coal and other natural resources, particularly from developing countries, such as China and India;

• worldwide economic activity including growth in and demand for coal, oil and other natural resources, particularly from developing countries, such as China and India;

• the level of activity, spending and natural resource developments in Australia and Canada;

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• global weather conditions, natural disasters and global health concerns;

• geopolitical events such as the ongoing Russia/Ukraine and Israel/Hamas conflicts;

• global reduction in demand for fossil fuels due to international efforts to address climate change;

• geopolitical events such as the ongoing Russia/Ukraine and Middle East conflicts;

• the impact on global demand for fossil fuels due to international efforts to address climate change;

• rapid technological change and the timing and extent of energy resource development, including hydraulic fracturing of horizontally drilled wells in shale discoveries and LNG;

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Should the price of WTI decline or the WCS discount to WTI widen further, our oil sands customers may delay or eliminate additional investments, reduce their spending in the oil sands region or curtail or shut-down existing operations.

The effects of public health crises, pandemics and epidemics may materially affect how we and our customers are operating our and their businesses.

Public health crises, pandemics and epidemics, such as the COVID-19 pandemic, have adversely impacted and may in the future adversely impact, worldwide economic activity, including the operations of natural resources companies in Canada, Australia and the U.S.

and the worldwide demand for oil and natural gas.

Other effects of such public health crises, pandemics and epidemics include significant volatility and disruption of the global financial markets;

continued volatility of commodity prices and related uncertainties around OPEC+ production;

disruption of operations resulting from decreased customer demand and labor shortages;

supply chain disruptions or equipment shortages;

reduced capital spending by oil and gas companies;

and employee impacts from illness, travel restrictions, including border closures, and other community response measures.

The extent to which our business operations and financial results may be affected by such public health crises, pandemics and epidemics depends on various factors beyond our control, such as the duration, severity and sustained geographic impact of the outbreak;

the impact and effectiveness of governmental actions to contain and treat such outbreaks, including government policies and restrictions;

vaccine hesitancy, vaccine mandates, and voluntary or mandatory quarantines;

and the global response surrounding such uncertainties.

Risks Related to Our Customers

Further, the Trump Administration has announced and is in the process of implementing several new tariffs, including a 10% tariff on energy resources imported to the United States from Canada.

Implementation of tariffs could have adverse impact on our Canadian customers profit margins, which may in turn reduce their spending on our accommodations and services.

Our customers and their operations are exposed to a number of unique operating risks and challenges which could also adversely affect us.

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• capital project cost overruns and cost inflation;

• risks associated with the natural resources industry being subject to laws and regulations, including those governing air and greenhouse gas emissions, as well as various regulatory approvals, including a government agency failing to grant an approval or failing to renew an existing approval, or the approval or renewal not being provided by the government agency in a timely manner or the government agency granting or renewing an approval subject to materially onerous conditions;

• risks associated with the natural resources industry being subject to laws and regulations, including those governing air and GHG emissions, as well as various regulatory approvals, including a government agency failing to grant an approval or failing to renew an existing approval, or the approval or renewal not being provided by the government agency in a timely manner or the government agency granting or renewing an approval subject to materially onerous conditions;

• risks to land titles, mining titles and use thereof as a result of native title claims;

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• interruptions to the operations of our customers caused by governmental action, industrial accidents, disputes or public health emergencies;

• reduce operating costs to increase profitability.

We depend on several significant customers.

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For a more detailed explanation of our customers, see “Business” in Item 1 of this annual report.

Our failure to retain our current customers, renew our existing customer contracts and obtain new customer contracts, or the termination of existing contracts, could adversely affect our business.

Failure to retain our current customers, renew our existing customer contracts and obtain new customer contracts, or the termination of existing contracts, could adversely affect our business.

Our success depends on our ability to retain our current customers, renew or replace our existing customer contracts and obtain new business.

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Finally, while we periodically review our compliance with contract terms and provisions, if customers were to dispute our contract determinations, the resolution of such disputes in a manner adverse to our interests, including customers withholding payments or modification of payment terms, could negatively affect sales and operating results.

We did not renew the land lease associated with our McClelland Lake Lodge in Alberta, Canada, which expired in June 2023, in order to support our customer’s intent to mine the land where the lodge was located.

In addition, the accompanying hospitality services contract at McClelland Lake Lodge expired in July 2023;

however, we continued to provide hospitality services to the customer at our other owned lodges through January 31, 2024 under a short-term take-or-pay commitment.

We completed the sale of the McClelland Lake Lodge assets in January 2024.

Revenues associated with the 2023 room commitments at the lodge through July 2023 were approximately C$39 million.

Customer contract cancellations, reduced customer utilization, the failure to renew a significant number of our existing contracts or the failure to obtain new business would have a material adverse effect on our business and results of operations.

Due to the significant geographic concentration of our business, adverse events in areas where we operate could negatively impact our business, and our geographic concentration could limit the number of customers seeking our services.

Because of the concentration of our business in three relatively small geographic areas:

the oil sands region of Alberta, Canada, the coal producing, Bowen Basin region of Queensland, Australia and the iron ore producing, Pilbarra region of Western Australia, we have increased exposure in these areas to political, regulatory, environmental, labor, climate or natural disasters such as forest fires or flooding, events or developments that could disproportionately impact our operations and financial results.

For example, in 2011 and 2017, cyclones and resulting flooding threatened our villages in Australia.

Because of the concentration of our business in three relatively small geographic areas, the oil sands region of Alberta, Canada, the coal producing, Bowen Basin region of Queensland, Australia and the iron ore producing, Pilbara region of Western Australia, we have increased exposure in these areas to political, regulatory, environmental, labor, climate or natural disasters such as forest fires or flooding, events or developments that could disproportionately impact our operations and financial results.

For example, in 2011 and 2017, cyclones and resulting flooding threatened our villages in Queensland, Australia.

Similarly, in 2011 and 2016, forest fires in northern Alberta impacted areas near our Canadian oil sands lodges.

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In addition, a limited number of potential customers operate in the areas in which our business is located, and occupancy at each of our lodges may be constrained by the radius which potential customers are willing to transport their workers.

Our geographic concentration could limit the number of customers seeking our services, and as to any single lodge or village, we

may have few potential customers.

Our geographic concentration could limit the number of customers seeking our services, and as to any single lodge or village, we may have few potential customers.

Therefore, we are subject to volatility in occupancy in any location based on the capital spending plans of a limited number of customers, based on their changing decisions as to whether to outsource or use their own company-owned accommodations and whether other potential customers move into that lodge’s radius.

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business as a result of the economic disruption caused by COVID-19, and experienced a corresponding decrease in our occupancy and profitability.

Continued volatility in commodity price levels, any future global health crises, inflationary pressures, actions taken by OPEC+ to adjust production levels, geopolitical events such as the ongoing Russia/Ukraine and Israel/Hamas conflicts, and regulatory implications on such prices, among other factors, could cause our Canadian oil sands and pipeline customers to reduce production, delay expansionary and maintenance spending and defer additional investments in their oil sands assets, which would cause a decrease in customer demand for our accommodations.

Volatility in commodity price levels, any future global health crises, inflationary pressures, actions taken by OPEC+ to adjust production levels, geopolitical events such as the ongoing Russia/Ukraine and Middle East conflicts, and regulatory implications on such prices, among other factors, could cause our Canadian oil sands and pipeline customers to reduce production, delay expansionary and maintenance spending and defer additional investments in their oil sands assets, which would cause a decrease in customer demand for our accommodations.

Increased operating costs and limited cost recovery through pricing or contract terms may constrain our ability to make a profit.

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For example, substantial increases in the cost of fuel and utilities have historically resulted in cost increases in our lodges and villages.

In the last eighteen months, we have experienced a significant increase in our food costs due to global inflationary pressures.

While inflation has stabilized, and while we have been able to pass some of the increased costs onto our customers, we expect to continue to experience increases in our food costs from time to time due to increasing fuel prices, rising global food demand, other general inflationary pressures and rising supply chain issues affecting supply of goods.

In addition, food

prices can fluctuate as a result of foreign exchange rates and temporary changes in supply, including as a result of incidences of wildfires or severe weather such as droughts, heavy rains and late freezes, or other climate effects.

Over the past few years, we experienced, and may continue to experience, increases in our food costs from time to time due to increasing fuel prices, rising global food demand, other general inflationary pressures and rising supply chain issues affecting supply of goods.

In addition, food prices can fluctuate as a result of foreign exchange rates and temporary changes in supply, including as a result of incidences of wildfires or severe weather such as droughts, heavy rains and late freezes, or other climate effects.

Climate and natural disaster events, such as forest fires or flooding, have the ability to impact local crop production, limiting supply and therefore having an upward pressure on food prices.

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A shortage of skilled labor could also result in higher wages due to more expensive temporary hire labor resources that would increase our labor costs, which could negatively affect our profitability.

For example, we have recently been impacted by increased staff costs as a result of hospitality labor shortages in Australia due to low levels of immigration into Australia and, specifically, an acute shortage of skilled labor.

For example, within the past few years we have been impacted by increased staff costs as a result of hospitality labor shortages in Australia due to low levels of immigration into Australia and, specifically, an acute shortage of skilled labor.

The reduced levels of immigration and shortage of skilled labor subsequently led to an increased reliance on more expensive temporary labor hire resources and negatively affected our profitability.

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While our multi-year contracts often provide for annual escalation in our room rates for food, labor and utility inflation, we may be unable to fully recover costs, or the recovery may be delayed, and such increases would negatively impact our profitability on contracts that do not contain such inflation protections.

Further, the U.S.

and other countries from time to time may impose tariffs that affect the goods or raw materials we or our customers use or the products our customers provide.

Any new tariffs impacting us or our customers could result in a cost increase in operating our lodges and villages or impact the demand for the services that we provide.

Employee and customer labor problems could adversely affect us.

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In recent years, we experienced, and expect to continue to experience, a shortage of labor for certain functions, inflationary pressures on wages, and an increasingly competitive labor market.

The extent and duration of the effect of these labor market challenges are subject to numerous factors, including geopolitical events such as the ongoing Russia/Ukraine and Israel/Hamas conflicts, availability of qualified persons in the markets where we and our contracted service providers operate, inflation and unemployment levels within these markets and our reputation within the labor market.

The extent and duration of the effect of these labor market challenges are subject to numerous factors, including geopolitical events such as the ongoing Russia/Ukraine and Middle East conflicts, availability of qualified persons in the markets where we and our contracted service providers operate, inflation and unemployment levels within these markets and our reputation within the labor market.

Inefficient operations or further increased labor costs resulting from these labor market challenges could negatively impact our profitability and could damage our reputation with our customers.

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Collective bargaining agreements in our Canadian operations have individual expiration dates, but in no case extend beyond 2028.

Enterprise bargaining agreements in our Australian operations cover certain employees working at our villages in Queensland, New South Wales and Western Australia, as well as certain employees working at our integrated services customer-owned sites in Western Australia and South Australia.

These agreements either have individual expiration dates or continue until either party seeks to have such agreement cancelled, but in no case extend beyond 2024.

Failure to develop or maintain positive relationships with the Indigenous people in the areas where we operate could adversely affect our business.

A component of our business strategy is based on developing and maintaining positive relationships with the Indigenous people and communities in the areas where we operate.

These relationships are important to our operations and our customers who desire to work on traditional Indigenous lands.

The inability to develop and maintain relationships and to be in compliance with local requirements could have an adverse effect on our business and results of operations.

Development of permanent infrastructure in the areas where we locate our assets could negatively impact our business.

We specialize in providing hospitality services for workforces in remote areas which often lack the infrastructure typically available in nearby towns and cities.

If permanent towns, cities and municipal infrastructure develop, grow or otherwise become available in the regions of Australia where we operate, the oil sands region of northern Alberta, Canada or the west coast of British Columbia, then demand for our hospitality services could decrease as customer employees move to the region and choose to utilize permanent housing and food service.

A failure to maintain food safety or comply with government regulations related to food and beverages or serving alcoholic beverages may subject us to liability.

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If we are found to be in breach of a lease, we could lose the right to use the property.

In addition, our leases generally have an initial term of ten years and will expire between 2024 and 2030 unless extended.

In addition, our leases generally have an initial term of ten years and unless extended will expire between 2025 and 2030 with the exception of one lease that expires in 2049.

Unless we can extend the terms of these leases before their expiration, as to which no assurance can be given, we will lose our right to operate our facilities located on these properties upon expiration of the leases.

In that event, we would be required to remove our accommodations assets and remediate the site at our own cost, which could be material.

We did not renew an expiring land lease associated with our McClelland Lake Lodge in Alberta, Canada, which expired in June 2023, in order to support our customer’s intent to mine the land where the lodge was located.

As of December 31, 2023, we had an asset retirement obligation (ARO) liability related to the McClelland Lake Lodge on our balance sheet of $0.3 million.

For example, we did not renew an expiring land lease associated with our McClelland Lake Lodge in Alberta, Canada, which expired in June 2023, in order to support our customer’s intent to mine the land where the lodge was located.

Our assets associated with our McClelland Lake Lodge were demobilized, for which we recognized $15.4 million in demobilization costs, and completely removed from the existing site in the first quarter of 2024.

In addition, we completed the sale of the McClelland Lake Lodge assets in January 2024.

As of December 31, 2024, we had asset retirement obligation liabilities on our balance sheet of $14.1 million.

Consistent with U.S.

generally accepted accounting principles, this liability is the estimated present value of the amount of required asset removal and site remediation costs related to the retirement of assets at this location in 2023.

As of December 31, 2023, we had other ARO liabilities on our balance sheet of $16.2 million.

generally accepted accounting principles, these liabilities are the estimated present value of the amount of required asset removal and site remediation costs related to the retirement of assets.

Should the remediation requirement be accelerated, our near term cash obligation could be significantly larger than the liability currently on our balance sheet and could negatively impact our cash flows and liquidity.

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If we are unable to renew our leases or permits on similar terms, it may have an adverse effect on our business and results of operations.

We are susceptible to seasonal earnings volatility due to adverse weather conditions in our regions of operations.

We are susceptible to seasonal earnings volatility due to seasonal weather patterns in our regions of operations.

Our operations are directly affected by seasonal differences in weather in the areas in which we operate.

During the Australian rainy season, generally between the months of November and April, our operations in Queensland and the northern parts of Western Australia can be affected by cyclones, monsoons and resultant flooding.

A portion of our Canadian operations is conducted during the winter months when the winter freeze in remote regions is required for exploration and production activity to occur.

The spring thaw in these frontier regions restricts operations in the spring months and, as a result, adversely affects our operations and our ability to provide services in the second quarter.

Additionally, the areas in which we operate are susceptible to wildfires.

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If any of these conditions occur, our operations could be interrupted and our earnings may be adversely impacted.

Failure to maintain positive relationships with the Indigenous people in the areas where we operate could adversely affect our business.

A component of our business strategy is based on developing and maintaining positive relationships with the Indigenous people and communities in the areas where we operate.

These relationships are important to our operations and customers who desire to work on traditional Indigenous lands.

The inability to develop and maintain relationships and to be in compliance with local requirements could have an adverse effect on our business and results of operations.

Development of permanent infrastructure in the areas where we locate our assets could negatively impact our business.

We specialize in providing hospitality services for workforces in remote areas which often lack the infrastructure typically available in nearby towns and cities.

If permanent towns, cities and municipal infrastructure develop, grow or otherwise become available in the oil sands region of northern Alberta, Canada, the west coast of British Columbia or regions of Australia where we operate, then demand for our hospitality services could decrease as customer employees move to the region and choose to utilize permanent housing and food service.

We may be subject to risks associated with the transportation, installation and demobilization of mobile accommodations.

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Our business could be negatively impacted by security threats, including cybersecurity threats and other disruptions.

We face various security threats, including cybersecurity threats to gain unauthorized access to sensitive information or to render data or systems unusable or hold them for ransom;

threats to the safety of our employees;

threats to the security of our facilities and infrastructure or third-party facilities and infrastructure;

and threats from terrorist acts.

We face various security threats, including cybersecurity threats to our data and systems and those of third-party service providers, threats to the safety of our employees, threats to the security of our facilities and infrastructure or third-party facilities and infrastructure and threats from terrorist acts.

Although we utilize various procedures and controls to monitor these threats and mitigate our exposure to such threats, including cybersecurity insurance, there can be no assurance that these procedures and controls will be sufficient in preventing security threats from materializing, including attempts to gain unauthorized access to sensitive information or to render data or systems unusable or hold them for ransom.

If any of these events were to materialize, they could lead to losses of sensitive information, critical infrastructure, personnel or capabilities essential to our operations and could have a material adverse effect on our reputation, competitive position, financial position, results of operations or cash flows.

In addition, such events could result in litigation, regulatory action and potential liability, including liability under laws that protect the privacy of personal information, as well as the costs and operational consequences of implementing further data protection measures.

Cybersecurity attacks in particular develop and evolve rapidly, including from emerging technologies, such as advanced forms of artificial intelligence.

Such attacks include, but are not limited to, malicious software, attempts to gain unauthorized access to data, ransomware attacks and other electronic security breaches that could lead to disruptions in critical systems, unauthorized release of or denial of access to confidential or otherwise protected information and corruption of data.

Cybersecurity threats in particular develop and evolve rapidly, including from emerging technologies, such as advanced forms of artificial intelligence.

Due to evolving cybersecurity threats, it has and will continue to be difficult to prevent, detect, mitigate, and remediate cybersecurity incidents.

Such threats include, but are not limited to, malicious software, attempts to gain unauthorized access to data, ransomware attacks and other electronic security breaches that could lead to disruptions in critical systems, unauthorized release of or denial of access to confidential or otherwise protected information and corruption of data.

We have experienced, and expect to continue to confront, efforts by hackers and other third parties to gain unauthorized access or deny access to, or otherwise disrupt, our information systems and networks.

While we have not experienced a material cybersecurity incident in the last three years, a material cybersecurity incident could have a material adverse effect on our business, financial condition, results of operations or liquidity.

While we have not experienced a material cybersecurity incident in the last three years, a material cybersecurity incident could result in increased costs to prevent, respond to or mitigate cybersecurity incidents, damage to our brand or reputation, or otherwise result in a material adverse effect on our business, financial condition, results of operations or liquidity.

Moreover, a delay in or failure to detect a cybersecurity incident, or the full extent of an incident, could exacerbate the effects of the incident.

In addition, we are subject to evolving laws and regulations governing data protection and the unauthorized disclosure of confidential information, which are evolving and can vary significantly by jurisdiction.

Such laws and regulations may pose increasingly complex compliance challenges and elevate our compliance costs.

Any failure by us to comply with these laws and regulations, including as a result of a cybersecurity or data protection incident, could result in a loss of sensitive information, litigation, regulatory action and potential liability.

Further, we may incur additional costs or operational impacts related to the prevention, response or remediation of a cybersecurity or data protection incident, and such costs may not fully be covered by insurance coverage or indemnified by other means.

Our business could be disrupted by any failure of our information systems.

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Any such failure could harm our business, results of operations and financial condition.

In addition, the delay or failure to implement information system upgrades and new systems effectively could disrupt our business, distract management’s focus and attention from business operations and growth initiatives, and increase our implementation

and operating costs, any of which could materially adversely affect our operations and operating results.

Furthermore, these technologies may require refinements and upgrades, which may require significant investment by us.

As various systems and technologies become outdated or new technology is required, we may not be able to replace or introduce them as quickly as needed or in a cost- effective and timely manner.

As various systems and technologies become outdated or new technology is required, we may not be able to replace or introduce them as quickly as

needed or in a cost- effective and timely manner.

As a result, we may not achieve the benefits we may have been anticipating from any new technology or system .

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We do not maintain “key man” life insurance for any of our officers.

The effects of public health crises, pandemics and epidemics may materially affect how we and our customers are operating our and their businesses.

Public health crises, pandemics and epidemics, such as the COVID-19 pandemic, have adversely impacted, and may in the future adversely impact, worldwide economic activity, including the operations of natural resources companies in Australia, Canada and the U.S.

and the worldwide demand for natural resources.

Other effects of such public health crises, pandemics and epidemics include significant volatility and disruption of the global financial markets;

volatility of commodity prices and related uncertainties around OPEC+ production;

disruption of operations resulting from decreased customer demand and labor shortages;

supply chain disruptions or equipment shortages;

reduced capital spending by oil and gas companies;

and employee impacts and labor shortages from illness, travel restrictions, including border closures, and other community response measures.

the impact and effectiveness of governmental actions to contain and treat such outbreaks, including government policies and restrictions;

the availability of effective vaccines and other treatments;

vaccine hesitancy, vaccine mandates, and voluntary or mandatory quarantines;

and the global response surrounding such uncertainties.

Financial/Accounting Risks

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dollar, and we are exposed to currency exchange risk primarily between the U.S.

dollar and the Canadian and Australian dollars.

dollar and the Australian and Canadian dollars.

For the year ended December 31, 2024, 99% of our revenues originated from subsidiaries outside of the U.S.

and were denominated in either the Canadian dollar or the Australian dollar.

and were denominated in either the Australian dollar or the Canadian dollar.

As a result, a material decrease in the value of these currencies relative to the U.S.

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Even a partially uninsured or underinsured claim, if successful and of significant size, could have a material adverse effect on our results of operations or consolidated financial position.

In addition, we are insured under the insurance policies of Oil States International, Inc.

In addition, we are insured under certain insurance policies of Oil States International, Inc.

(Oil States) for occurrences prior to the completion of our spin-off from Oil States in May 2014 (the Spin-Off).

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In addition, overpayment of an acquisition could cause potential impairments which could affect our results of operations.

We expect to gain certain business, financial and strategic advantages as a result of business combinations we undertake, including synergies and operating efficiencies.

Our forward-looking statements assume that we will successfully integrate our business acquisitions and realize these intended benefits.

The success of any acquisitions we make depends, in large part, on our ability to realize the anticipated benefits, including operating synergies from combining our businesses, which were previously operated independently, and retaining and integrating key employees, vendors and customers from the acquired businesses.

An inability to realize expected strategic advantages as a result of the acquisition would negatively affect the anticipated benefits of the acquisition.

We expect to gain certain business, financial and strategic advantages as a result of business combinations or asset acquisitions we undertake, including synergies and operating efficiencies.

Our forward-looking statements assume that we will successfully integrate our acquisitions and realize these intended benefits.

For example, on February 18, 2025, we entered into a definitive purchase agreement with a private seller to acquire four villages with 1,340 rooms in Australia’s Bowen Basin and the associated long-term customer contracts.

The Proposed Acquisition is anticipated to close in the second quarter of 2025, subject to the receipt of required regulatory approvals and the satisfaction of other closing conditions.

The success of the Proposed Acquisition and any other acquisitions we make depends, in large part, (i) on the risk that any such acquisition may not be completed in a timely manner or at all, which may adversely affect our business and the price of our common shares, and (ii) our ability to realize the anticipated benefits, including operating synergies from integrating these assets, which were previously operated independently, and retaining key employees, vendors and customers associated with the acquired assets.

An inability to successfully integrate the acquired assets or businesses and to realize expected strategic advantages as a result of any acquisition, including the Proposed Acquisition, would negatively affect the anticipated benefits of such acquisition.

Additionally, an acquisition may bring us into businesses we have not previously conducted or geographies in which we have not previously operated and expose us to additional business risks that are different from those we have previously experienced.

Our future success depends, in part, upon our ability to manage this expanded business, which will pose substantial challenges for our management, including challenges related to the management and monitoring of new operations and associated increased costs and complexity.

and associated increased costs and complexity.

If we fail to manage any of these risks successfully, our business could be harmed.

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Our indebtedness could restrict our operations and make us more vulnerable to adverse economic conditions.

As of December 31, 2023, we had approximately $65.6 million outstanding under the revolving portion of our Syndicated Facility Agreement (Credit Agreement), $1.4 million of outstanding letters of credit and an additional $133.1 million in remaining capacity to borrow under the revolving portion of the Credit Agreement.

As of December 31, 2024, we had approximately $43.3 million outstanding under the revolving portion of our Syndicated Facility Agreement (as then amended to date, the Credit Agreement), $1.1 million of outstanding letters of credit and an additional $197.0 million in remaining capacity to borrow under the revolving portion of the Credit Agreement.

If market or other economic conditions remain depressed or further deteriorate, our borrowing capacity may be reduced.

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Our ability to service our debt, including repaying outstanding borrowings under our Credit Agreement at maturity, will depend upon, among other things, our future financial and operating performance, which will be affected by prevailing economic conditions and financial, business, regulatory and other factors, some of which are beyond our control.

acquisitions, investments and/or capital expenditures, selling assets, restructuring or refinancing our indebtedness or seeking additional equity capital.

If our business does not generate sufficient cash flows from operations to enable us to meet our obligations under our indebtedness, we will be forced to take actions such as reducing or delaying business activities, including dividend payments and share repurchases, acquisitions, investments and/or capital expenditures, selling assets, restructuring or refinancing our indebtedness or seeking additional equity capital.

We may not be able to effect any of these remedies on satisfactory terms or at all, which could have a material adverse effect on our business, financial condition, results of operations and cash flows.

Legal and Regulatory Risks

We do business in Canada and Australia, whose political and regulatory environments and compliance regimes differ from those in the U.S.

A significant portion of our revenue is attributable to operations in Canada and Australia.

We do business in Australia and Canada, whose political and regulatory environments and compliance regimes differ from those in the U.S.

A significant portion of our revenue is attributable to operations in Australia and Canada.

These activities accounted for 99% of our consolidated revenue in the year ended December 31, 2024.

Risks associated with our operations in Canada and Australia include, but are not limited to, (i) different taxing regimes;

Risks associated with our operations in Australia and Canada include, but are not limited to, (i) different taxing regimes;

(ii) changing political conditions at the federal, provincial or state level;

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“Business - Government Regulation” of this annual report for a more detailed description of our risks associated with environmental laws and regulations.

It should also be noted that scientists have concluded that increasing concentrations of greenhouse gases (GHG) in the earth’s atmosphere may produce climate changes that have significant physical effects, such as increased frequency and severity of storms, droughts, and floods and other climatic events.

It should also be noted that scientists have concluded that increasing concentrations of GHG in the earth’s atmosphere may produce climate changes that have significant physical effects, such as increased frequency and severity of storms, droughts, and floods and other climatic events.

Any failure by us to comply with applicable environmental laws and regulations may result in governmental authorities taking actions against our business that could adversely impact our business and results of operations, including the issuance of administrative, civil and criminal penalties;

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We may be exposed to certain regulatory and financial risks related to climate change and other ESG-related matters.

Climate change and other ESG-related matters are receiving increasing attention from the media, scientists and legislators alike, which has resulted in legislative, regulatory and other initiatives, including international agreements, to reduce greenhouse gas emissions, such as carbon dioxide and methane, and proposed regulations to increase climate change reporting obligations.

Climate change and other ESG-related matters are receiving increasing attention from the media, scientists and legislators alike, which has resulted in legislative, regulatory and other initiatives, including international agreements, to reduce GHG emissions, such as carbon dioxide and methane, and proposed regulations to increase climate change reporting obligations.

Significant focus is being made on companies that are active producers of fossil fuels, or companies which serve such producers.

Efforts have been made and continue to be made in the international community toward the adoption of international treaties or protocols that would address global climate change issues and impose reductions of hydrocarbon-based fuels.

There are a number of legislative and regulatory proposals to address greenhouse gas emissions, including increased fuel efficiency standards, carbon taxes or cap and trade systems, restrictive permitting, and incentives for renewable energy, which are in various phases of discussion or implementation.

Moreover, such legislation, regulations and proposals are subject to frequent

change by regulatory authorities.

The outcome of Canadian, Australian and U.S.

There are a number of legislative and regulatory proposals to address GHG emissions, including increased fuel efficiency standards, carbon taxes or cap and trade systems, restrictive permitting and incentives for renewable energy, which are in various phases of discussion or implementation.

Moreover, such legislation, regulations and proposals are subject to frequent change by regulatory authorities.

The outcome of Australian, Canadian and U.S.

federal, regional, provincial and state actions to address global climate change could result in a variety of regulatory programs including potential new regulations, additional charges to fund energy efficiency activities or other regulatory actions.

These actions could both (i) directly impact us due to increased costs associated with our operations and (ii) indirectly impact us due to increased costs of and/or reduced demand for our customers' operations and resulting reduced demand for our services.

Any adoption of these or similar proposals by Canadian, Australian or U.S.

federal, regional, provincial, state or local governments mandating a substantial reduction in greenhouse gas emissions could have far-reaching and significant impacts on the energy industry, including negatively impacting the price of oil relative to other energy sources, reducing demand for hydrocarbons and other minerals or limiting drilling or mining in the areas in which we operate.

Although it is not possible at this time to predict how legislation or new regulations that may be adopted to address greenhouse gas emissions would impact our business, any such future laws and regulations could result in increased compliance costs or additional operating restrictions, and could have a material adverse effect on our business or demand for our services.

Any adoption of these or similar proposals by Australian, Canadian or U.S.

federal, regional, provincial, state or local governments mandating a substantial reduction in GHG emissions could have far-reaching and significant impacts on the energy industry, including negatively impacting the price of oil relative to other energy sources, reducing demand for hydrocarbons and other minerals or limiting drilling or mining in the areas in which we operate.

Although it is not possible at this time to predict how legislation or new regulations that may be adopted to address GHG emissions would impact our business, any such future laws and regulations could result in increased compliance costs or additional operating restrictions and could have a material adverse effect on our business or demand for our services.

In addition, there have also been efforts in recent years to influence the investment community, including investment advisors and certain sovereign wealth, pension and endowment funds promoting divestment of fossil fuel equities and pressuring lenders to limit funding to companies engaged in the extraction of fossil fuel reserves.

Such environmental activism and initiatives aimed at limiting climate change and reducing air pollution could interfere with our business activities, operations and ability to access capital and assess acquisitions.

Furthermore, members of the investment community, as well as political advocacy groups, are increasing their focus on ESG practices and disclosures by public companies, and concerns over climate change have resulted in, and are expected to continue to result in, the adoption of regulatory requirements for climate-related disclosures.

As a result, we may continue to face increasing pressure regarding our ESG disclosures and practices, and mandatory reporting obligations could increase our compliance burden and costs.

Furthermore, many members of the investment community, as well as political advocacy groups, are increasing their focus on ESG practices and disclosures by public companies, and concerns over climate change have resulted in, and are expected to continue to result in, the adoption of regulatory requirements

relating to climate-related disclosures.

As a result, we may continue to face increasing pressure regarding and focus on our ESG disclosures and practices, and mandatory reporting obligations could increase our compliance burden and costs.

We publish an annual ESG Report, which outlines our progress and ongoing efforts to advance our ESG initiatives.

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If our ESG disclosures and practices do not meet regulatory, investor or other stakeholder expectations and standards, which continue to evolve, it could have a material adverse effect on our business or demand for our services.

At the same time, some stakeholders and regulators have increasingly expressed or pursued opposing views, legislation, and investment expectations with respect to ESG, including the enactment or proposal of “anti-ESG” legislation or policies.

At the same time, some stakeholders and regulators have increasingly expressed or pursued opposing views, legislation, and investment expectations with respect to ESG, including criticizing companies for their ESG disclosures and practices and enacting or proposing “anti-ESG” legislation or policies.

By publishing our annual ESG Report, our business may also face increased scrutiny related to ESG activities and be unable to satisfy all stakeholders.

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has imposed an excise tax on U.S.

domestic corporations repurchasing stock, our share repurchase program is not currently subject to this tax.

domestic corporations repurchasing stock, our share repurchase program is not subject to this tax.

A similar 2% tax has been imposed in Canada, effective January 1, 2024, which applies to us and may impact the tax efficiency of our share repurchase program.

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Provisions contained in our articles and applicable Canadian and British Columbia laws could discourage a take-over attempt, which may reduce or eliminate the likelihood of a change of control transaction and, therefore, the ability of our shareholders to sell their shares for a premium.

Provisions contained in our articles provide for a classified Board, limitations on the removal of directors, limitations on shareholder proposals at meetings of shareholders and limitations on shareholder action by written consent, which could make it more difficult for a third-party to acquire control of us.

Provisions contained in our articles provide for a classified Board (which will be phased out by the 2027 annual general meeting of shareholders), limitations on the removal of directors, limitations on shareholder proposals at meetings of shareholders and limitations on shareholder action by written consent, which could make it more difficult for a third-party to acquire control of us.

Our articles, subject to the corporate law of British Columbia, also authorize our Board to issue series of preferred shares without shareholder approval.

If our Board elects to issue preferred

shares, it could increase the difficulty for a third-party to acquire us, which may reduce or eliminate our shareholders’ ability to sell their common shares at a premium.

If our Board elects to issue preferred shares, it could increase the difficulty for a third-party to acquire us, which may reduce or eliminate our shareholders’ ability to sell their common shares at a premium.

In addition, in Canada, we may become subject to applicable securities laws, including National Instrument 62-104 Take-Over Bids and Issuer Bids of the Canadian Securities Administrators, which provide a heightened threshold for shareholder acceptance of third-party acquisition offers and could discourage take-over attempts that could result in a premium over the market price for our common shares.

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The impact of these factors, individually and in the aggregate, is difficult to predict, in part because the occurrence of any number of the events or circumstances described in such factors may be (and, in fact, often seem to be) interrelated, and the impact to us of the occurrence of any one of these events or circumstances could be compounded or, alternatively, reduced, offset or more than offset, by the occurrence of one or more of the other events or circumstances described in such factors.

Canada’s tax rules under the Income Tax Act (Canada) (the Canadian Tax Act) allow for favorable tax treatment related to the repatriation of certain dividends from foreign affiliates.

If it becomes necessary or desirable to repatriate earnings from subsidiaries, repatriating earnings could, in certain circumstances, give rise to the imposition of potentially significant withholding taxes by the jurisdictions in which such amounts were earned, without our receiving the benefit of any offsetting tax credits, which could adversely impact our effective tax rate and cash flows.

Generally, Canada’s tax rules under the Income Tax Act (Canada) (the Canadian Tax Act) may allow for favorable tax treatment related to the repatriation of certain dividends from certain foreign affiliates.

If it becomes necessary or desirable to repatriate earnings from our foreign subsidiaries, repatriating earnings could, in certain circumstances, give rise to the imposition of potentially significant withholding taxes by the jurisdictions in which such amounts were earned, without our receiving the benefit of any offsetting tax credits in Canada, which could adversely impact our effective tax rate and cash flows.

These tax rules are complicated and could change over time.

Any such changes could have a material impact on our overall tax rate.

Canada has also introduced tax rules governing “foreign affiliate dumping” in the Canadian Tax Act that can have adverse tax consequences in respect of non-Canadian business activities and investments for Canadian corporations that are controlled by non-Canadian corporations.

These rules would have a negative impact on us to the extent that we became controlled by a non-Canadian resident corporation.

These rules would have a negative impact on us to the extent that we became controlled by a non-Canadian person or group of non-Canadian persons.

We remain subject to changes in tax law (in various jurisdictions) and other factors that could impact our effective tax rate.

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We will therefore make estimates and judgments based on our knowledge and understanding of applicable tax laws and tax treaties, and the application of those tax laws and tax treaties to our business, in determining our consolidated tax provision.

The final outcome of any audits by taxation authorities may differ from

the estimates and assumptions we may use in determining our consolidated tax provisions and accruals.

The final outcome of any audits by taxation authorities may differ from the estimates and assumptions we may use in determining our consolidated tax provisions and accruals.

This could result in a material adverse effect on our consolidated income tax provision, financial condition and the net income for the period in which such determinations are made.

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For example, the OECD has proposed a two-pillar plan to reform international taxation, with proposals to ensure a fairer distribution of profits among countries and to impose a floor on tax competition through the introduction of a global minimum tax.

As a result, the tax laws in the U.S.

and other countries in which we and our affiliates do business could change on a prospective or retroactive basis (or both), and any such changes could materially adversely affect us.

The tax laws of countries in which we and our affiliates do business have already begun to change based on this two-pillar plan and could change further on a prospective or retroactive basis (or both), and any such changes could materially adversely affect us.

Future potential changes to U.S.

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federal income tax purposes.

For example, members of Congress from time to time have proposed changes to the Internal Revenue Code, and the U.S.

members of Congress from time to time have proposed changes to the Internal Revenue Code, and the U.S.

Treasury has taken and may continue to take regulatory action, in connection with inversion transactions.

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Compared sentence by sentence after normalising whitespace, quotation marks, case and digits, so re-formatting and restated figures do not read as changed language. Wording changes appear as one removal and one addition. The current filing and the prior one are authoritative.

What changed 10-K

Item 1A. Risk Factors