What changed in this filing

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Item 1. Financial Statements

2021-11-01 compared with 2021-07-29 · 204 added, 179 removed, 550 unchanged (41% of the section changed)

Financial Statements

OIL STATES INTERNATIONAL, INC.

AND SUBSIDIARIES

UNAUDITED CONSOLIDATED STATEMENTS OF OPERATIONS

(In Thousands, Except Per Share Amounts)

Three Months Ended June 30, Six Months Ended June 30,

Three Months Ended September 30, Nine Months Ended September 30,

2021 2020 2021 2020

29 unchanged sentences

(In Thousands)

Three Months Ended June 30, Six Months Ended June 30,

Three Months Ended September 30, Nine Months Ended September 30,

2021 2020 2021 2020

8 unchanged sentences

(In Thousands, Except Share Amounts)

September 30,

2021 December 31, 2020

39 unchanged sentences

(In Thousands)

Three Months Ended June 30, 2021 Common

Three Months Ended September 30, 2021 Common

Stock Additional

4 unchanged sentences

Stockholders'

Balance, March 31, 2021 $ 738 $ 1,100,077 $ 329,750 $ ( 72,914 ) $ ( 625,489 ) $ 732,162

Balance, June 30, 2021 $ 739 $ 1,101,959 $ 314,479 $ ( 69,754 ) $ ( 625,489 ) $ 721,934

Net loss — — ( 13,042 ) — — ( 13,042 )

5 unchanged sentences

Adoption of ASU 2020-06 — — — — — —

Balance, June 30, 2021 $ 739 $ 1,101,959 $ 314,479 $ ( 69,754 ) $ ( 625,489 ) $ 721,934

Six Months Ended June 30, 2021 Common

Balance, September 30, 2021 $ 739 $ 1,103,507 $ 301,437 $ ( 75,592 ) $ ( 625,584 ) $ 704,507

Nine Months Ended September 30, 2021 Common

Stock Additional

12 unchanged sentences

Adoption of ASU 2020-06 — ( 25,683 ) 16,233 — — ( 9,450 )

Balance, June 30, 2021 $ 739 $ 1,101,959 $ 314,479 $ ( 69,754 ) $ ( 625,489 ) $ 721,934

Balance, September 30, 2021 $ 739 $ 1,103,507 $ 301,437 $ ( 75,592 ) $ ( 625,584 ) $ 704,507

The accompanying notes are an integral part of these financial statements.

3 unchanged sentences

(In Thousands)

Three Months Ended June 30, 2020 Common Stock Additional Paid-In Capital Retained Earnings Accumulated Other Comprehensive Loss Treasury Stock Total Stockholders' Equity

Balance, March 31, 2020 $ 732 $ 1,115,677 $ 392,669 $ ( 82,537 ) $ ( 623,909 ) $ 802,632

Three Months Ended September 30, 2020 Common Stock Additional Paid-In Capital Retained Earnings Accumulated Other Comprehensive Loss Treasury Stock Total Stockholders' Equity

Balance, June 30, 2020 $ 733 $ 1,117,771 $ 368,043 $ ( 83,767 ) $ ( 623,911 ) $ 778,869

Net loss — — ( 19,969 ) — — ( 19,969 )

4 unchanged sentences

Surrender of stock to settle taxes on restricted stock awards — — — — ( 8 ) ( 8 )

Balance, June 30, 2020 $ 733 $ 1,117,771 $ 368,043 $ ( 83,767 ) $ ( 623,911 ) $ 778,869

Six Months Ended June 30, 2020 Common Stock Additional Paid-In Capital Retained Earnings Accumulated Other Comprehensive Loss Treasury Stock Total Stockholders' Equity

Balance, September 30, 2020 $ 733 $ 1,119,860 $ 348,074 $ ( 80,410 ) $ ( 623,919 ) $ 764,338

Nine Months Ended September 30, 2020 Common Stock Additional Paid-In Capital Retained Earnings Accumulated Other Comprehensive Loss Treasury Stock Total Stockholders' Equity

Balance, December 31, 2019 $ 726 $ 1,114,521 $ 797,710 $ ( 67,746 ) $ ( 621,244 ) $ 1,223,967

5 unchanged sentences

Surrender of stock to settle taxes on restricted stock awards — — — — ( 2,675 ) ( 2,675 )

Balance, June 30, 2020 $ 733 $ 1,117,771 $ 368,043 $ ( 83,767 ) $ ( 623,911 ) $ 778,869

Balance, September 30, 2020 $ 733 $ 1,119,860 $ 348,074 $ ( 80,410 ) $ ( 623,919 ) $ 764,338

The accompanying notes are an integral part of these financial statements.

3 unchanged sentences

(In Thousands)

Six Months Ended June 30,

Nine Months Ended September 30,

Cash flows from operating activities:

30 unchanged sentences

( 125,952 ) ( 20,078 )

Other debt and finance lease activity, net 119 ( 165 )

Other debt and finance lease repayments, net ( 55 ) ( 337 )

Payment of financing costs ( 7,785 ) ( 962 )

1 unchanged sentence

due to vesting of stock awards ( 1,595 ) ( 2,675 )

Net cash flows provided by (used in) financing activities ( 19,112 ) 4,991

Net cash flows used in financing activities ( 19,387 ) ( 56,983 )

Effect of exchange rate changes on cash and cash equivalents ( 307 ) ( 214 )

2 unchanged sentences

Cash and cash equivalents, end of period $ 67,561 $ 79,701

Cash paid for:

Cash paid (received) for:

Interest $ 2,785 $ 5,716

7 unchanged sentences

The accompanying unaudited condensed consolidated financial statements of Oil States International, Inc.

and its subsidiaries (referred to in this report as "we" or the "Company") have been prepared pursuant to the rules and regulations of the Securities and Exchange Commission (the "Commission") pertaining to interim financial information.

Certain information in footnote disclosures normally included with financial statements prepared in accordance with U.S.

generally accepted accounting principles ("GAAP") have been condensed or omitted pursuant to these rules and regulations.

and its subsidiaries (the "Company") have been prepared pursuant to the rules and regulations of the Securities and Exchange Commission pertaining to interim financial information.

Certain information in footnote disclosures normally included with financial statements prepared in accordance with generally accepted accounting principles ("GAAP") have been condensed or omitted pursuant to these rules and regulations.

The unaudited financial statements included in this report reflect all the adjustments, consisting of normal recurring adjustments, which the Company considers necessary for a fair statement of the results of operations for the interim periods covered and for the financial condition of the Company at the date of the interim balance sheet.

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It is therefore difficult for management to assess or predict with precision the broad future effect of this health crisis on the global economy, the energy industry or the Company.

During 2020 and the first half of 2021, the Company recorded asset impairments, severance and restructuring charges in response to these developments as further discussed in Note 3, "Asset Impairments and Other Restructuring Items." As additional information becomes available, events or circumstances change and strategic operational decisions are made by management, further adjustments may be required which could have a material adverse impact on the Company's consolidated financial position, results of operations and cash flows.

During 2020 and the first nine months of 2021, the Company recorded asset impairments, severance and restructuring charges in response to these developments as further discussed in Note 3, "Asset Impairments and Other Restructuring Items." As additional information becomes available, events or circumstances change and strategic operational decisions are made by management, further adjustments may be required which could have a material adverse impact on the Company's consolidated financial position, results of operations and cash flows.

The preparation of condensed consolidated financial statements in conformity with GAAP requires the use of estimates and assumptions by management in determining the reported amounts of assets and liabilities and disclosures of contingent assets and liabilities at the date of the condensed consolidated financial statements and the reported amounts of revenues and expenses during the reporting period.

8 unchanged sentences

As permitted under the standard, the Company adopted the guidance on January 1, 2021, using the modified retrospective transition method.

Adoption of the standard resulted in a $ 12.2 million increase in the net carrying value of the 2023 Notes, a $ 2.7 million decrease in deferred income taxes and an $ 9.5 million net decrease in stockholders' equity.

Adoption of the standard resulted in a $ 12.2 million increase in the net carrying value of the 2023 Notes, a $ 2.7 million decrease in deferred income taxes and a $ 9.5 million net decrease in stockholders' equity.

The effective interest rate associated with the 2023 Notes after adoption decreased from approximately 6 % to approximately 2 %, which compares to the contractual interest rate of 1.50 %.

8 unchanged sentences

shale play regions.

While the prices of and demand for crude oil have increased significantly since reaching record low levels in April 2020, with crude oil inventory levels moderating, uncertainty remains regarding the timing of demand recovery to pre-COVID-19 levels.

These conditions have and may continue to result in adverse impacts on certain customers' liquidity and financial position, leading to further spending reductions, delays in the collection of amounts owed and in certain instances, non-payment of amounts owed.

While the prices of and demand for crude oil have increased significantly since reaching record low levels in April 2020, uncertainty remains regarding the timing of demand recovery to pre-COVID-19 levels and operators' willingness to invest in U.S.

land-based drilling, completion and production activities given regulatory pressures around environmental, social and governance considerations.

Following these March 2020 events, the Company immediately implemented significant cost reduction initiatives.

9 unchanged sentences

Severance and restructuring costs 112 — 548 — 660 139 521

The Company further reduced its workforce and closed additional facilities in the United States during the second quarter of 2020, and recorded the following charges (in thousands):

During the second and third quarters of 2020, the Company further reduced its workforce and closed additional facilities in the United States and continued to assess the carrying value of its assets based on the industry outlook regarding demand for and pricing of its products and services, and recorded the following charges (in thousands):

Offshore/ Manufactured Products Downhole Technologies Well Site Services Corporate Pre-tax Total Tax After-tax Total

2 unchanged sentences

Severance and restructuring costs 322 1,315 3,544 216 5,397 1,133 4,264

During the first and second quarters of 2021, the Company continued its restructuring efforts, closed additional facilities in the United States and continued to assess the carrying value of its assets based on the industry outlook regarding demand for and pricing of its products and services, and recorded the following charges (in thousands):

Third quarter 2020

Impairments of inventories (Note 4)

$ — $ 5,921 $ — $ — $ 5,921 $ 1,243 $ 4,678

Severance and restructuring costs 288 — — — 288 60 228

OIL STATES INTERNATIONAL, INC.

AND SUBSIDIARIES

NOTES TO UNAUDITED CONDENSED CONSOLIDATED

FINANCIAL STATEMENTS

During the first nine months of 2021, the Company continued its restructuring efforts, closed additional facilities in the United States and continued to assess the carrying value of its assets based on management actions and the industry outlook regarding demand for and pricing of its products and services, and recorded the following charges (in thousands):

Offshore/ Manufactured Products Downhole Technologies Well Site Services Corporate Pre-tax Total Tax After-tax Total

3 unchanged sentences

Second quarter 2021

Impairment of operating lease assets $ — $ — $ 2,794 $ — $ 2,794 $ 587 $ 2,207

Restructuring costs (1)

Impairments of operating lease assets $ — $ — $ 2,794 $ — $ 2,794 $ 587 $ 2,207

Severance and restructuring costs (1)

— 203 2,351 — 2,554 536 2,018

Third quarter 2021

Impairment of inventories (Note 4)

$ — $ 2,113 $ — $ — $ 2,113 $ 444 $ 1,669

Severance and restructuring costs 256 129 352 — 737 154 583

____________________

(1) Includes recognition of $ 1.9 million in additional lease-related liabilities associated with the exit of a long-term lease supporting the Well Site Services segment.

OIL STATES INTERNATIONAL, INC.

AND SUBSIDIARIES

NOTES TO UNAUDITED CONDENSED CONSOLIDATED

FINANCIAL STATEMENTS

Additionally, during the three and six months ended June 30, 2021, the Company recognized $ 2.8 million and $ 7.6 million, respectively, in aggregate reductions to payroll tax expense (within cost of revenues and selling, general and administrative expense) as part of the Coronavirus Aid, Relief and Economic Security Act (the "CARES Act") employee retention credit program.

Additionally, during the three and nine months ended September 30, 2021, the Company recognized $ 1.2 million and $ 8.8 million, respectively, in aggregate reductions to payroll tax expense (within cost of revenues and selling, general and administrative expense) as part of the Coronavirus Aid, Relief and Economic Security Act (the "CARES Act") employee retention credit program.

The Company continues to evaluate any and all benefits potentially available to it under the CARES Act.

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The Company therefore recognized non-cash goodwill impairment charges totaling $ 406.1 million in the first quarter of 2020, as presented in further detail in the table above.

The Company performed its annual quantitative assessment of goodwill as of December 1, 2020, which indicated that the fair value of the Offshore/Manufactured Products segment was greater than its carrying amount and no additional provision for impairment was required.

The Company's remaining goodwill within the segment totaled approximately $ 76.5 million as of June 30, 2021 and December 31, 2020.

Long-lived Assets

The Company also assesses the carrying value of long-lived assets, including property, plant and equipment, operating lease assets and other intangible assets held by each of its segments (reporting units).

As a result of the March 2020 assessment, the Company concluded that certain drilling-related property and equipment held by the Well Site Services segment was impaired and recognized a non-cash fixed asset impairment charge of $ 5.2 million in the first quarter of 2020.

During the first and second quarters of 2021, the Well Site Services segment recognized non-cash fixed and operating lease asset impairment charges of $ 0.7 million and $ 2.8 million, respectively, associated with the closure of additional facilities coupled with other management actions.

During the second quarter of 2021, the segment also recorded an additional $ 1.9 million charge associated with the exit of a leased facility.

Should, among other events and circumstances, global economic and industry conditions deteriorate, the COVID-19 pandemic business and market disruptions worsen, the outlook for future operating results and cash flow for any of the Company's reporting units decline, income tax rates increase or regulations change, costs of equity or debt capital increase, valuations for comparable public companies or comparable acquisition valuations decrease, or management implement strategic decisions based on industry conditions, the Company may need to recognize additional impairment losses in future periods.

OIL STATES INTERNATIONAL, INC.

2 unchanged sentences

FINANCIAL STATEMENTS

The Company's remaining goodwill within the segment totaled approximately $ 76.5 million as of September 30, 2021 and December 31, 2020.

Long-lived Assets

During the nine months ended September 30, 2021, the Well Site Services segment recognized non-cash fixed and operating lease asset impairment charges of $ 3.4 million associated with the closure of additional facilities coupled with other management actions.

During the nine months ended September 30, 2021, the segment also recorded an additional $ 1.9 million charge associated with the exit of a leased facility.

Should, among other events and circumstances, global economic and industry conditions deteriorate, the COVID-19 pandemic business and market disruptions continue, the outlook for future operating results and cash flow for any of the Company's segments decline, income tax rates increase or regulations change, climate and environmental regulations change, costs of equity or debt capital increase, valuations for comparable public companies or comparable acquisition valuations decrease, or management implement strategic decisions based on industry conditions, the Company may need to recognize additional impairment losses in future periods.

Details of Selected Balance Sheet Accounts

Additional information regarding selected balance sheet accounts as of June 30, 2021 and December 31, 2020 is presented below (in thousands):

Additional information regarding selected balance sheet accounts as of September 30, 2021 and December 31, 2020 is presented below (in thousands):

September 30,

2021 December 31,

8 unchanged sentences

Allowance for doubtful accounts as a percentage of total accounts receivable 4 % 5 %

September 30,

2021 December 31,

Deferred revenue (contract liabilities) $ 42,512 $ 43,384

As of June 30, 2021, accounts receivable, net in the United States and the United Kingdom represented 64 % and 20 %, respectively, of the total.

No other country or single customer accounted for more than 10% of the Company's total accounts receivable as of June 30, 2021.

For the six months ended June 30, 2021, the $ 17.8 million net decrease in contract assets was primarily attributable to $ 33.3 million transferred to accounts receivable, which was partially offset by $ 15.4 million in revenue recognized during the period.

Deferred revenue (contract liabilities) increased by $ 1.8 million in the first half of 2021, primarily reflecting $ 7.2 million in new customer billings which were not recognized as revenue during the period, partially offset by the recognition of $ 5.4 million of revenue that was deferred at the beginning of the period.

The following provides a summary of activity in the allowance for doubtful accounts for the six months ended June 30, 2021 and 2020 (in thousands):

Six Months Ended June 30,

As of September 30, 2021, accounts receivable, net in the United States and the United Kingdom represented 77 % and 12 %, respectively, of the total.

No other country or single customer accounted for more than 10% of the Company's total accounts receivable as of September 30, 2021.

For the nine months ended September 30, 2021, the $ 13.4 million net decrease in contract assets was primarily attributable to $ 34.6 million transferred to accounts receivable, which was partially offset by $ 21.1 million in revenue recognized during the period.

Deferred revenue (contract liabilities) decreased by $ 0.9 million in the first nine months of 2021, primarily reflecting the recognition of $ 6.1 million of revenue that was deferred at the beginning of the period, partially offset by $ 5.3 million in new customer billings which were not recognized as revenue during the period.

OIL STATES INTERNATIONAL, INC.

AND SUBSIDIARIES

NOTES TO UNAUDITED CONDENSED CONSOLIDATED

FINANCIAL STATEMENTS

The following provides a summary of activity in the allowance for doubtful accounts for the nine months ended September 30, 2021 and 2020 (in thousands):

Nine Months Ended September 30,

Allowance for doubtful accounts – January 1 $ 8,304 $ 8,745

2 unchanged sentences

Other 136 1,158

Allowance for doubtful accounts – June 30 $ 7,698 $ 10,262

Allowance for doubtful accounts – September 30 $ 6,260 $ 10,200

September 30,

2021 December 31,

7 unchanged sentences

The Company recorded impairment charges totaling $ 25.2 million in the first quarter of 2020 to reduce the carrying value of inventories to their estimated net realizable value following the March 2020 decline in crude oil prices, which reduced the near-term utility of certain goods within the Offshore/Manufactured Products and Well Site Services segments.

OIL STATES INTERNATIONAL, INC.

AND SUBSIDIARIES

NOTES TO UNAUDITED CONDENSED CONSOLIDATED

FINANCIAL STATEMENTS

During the third quarter of 2020, the Company recorded an impairment charge of $ 5.9 million to reduce the carrying value of inventories within the Downhole Technologies segment to their estimated net realizable value based on changes in expectations regarding the near-term utility, customer demand and market pricing of certain goods.

The Company recorded an impairment charge of $ 2.1 million in the third quarter of 2021 to reduce the carrying value of inventories within the Downhole Technologies segment to their estimated net realizable value based primarily on management's decision to exit a product offering.

September 30,

2021 December 31,

10 unchanged sentences

$ 340,384 $ 383,562

For the three months ended June 30, 2021 and 2020, depreciation expense was $ 15.6 million and $ 18.5 million, respectively.

Depreciation expense was $ 32.0 million and $ 38.6 million for the six months ended June 30, 2021 and 2020, respectively.

June 30, 2021 December 31, 2020

For the three months ended September 30, 2021 and 2020, depreciation expense was $ 14.7 million and $ 18.0 million, respectively.

Depreciation expense was $ 46.7 million and $ 56.6 million for the nine months ended September 30, 2021 and 2020, respectively.

OIL STATES INTERNATIONAL, INC.

AND SUBSIDIARIES

NOTES TO UNAUDITED CONDENSED CONSOLIDATED

FINANCIAL STATEMENTS

September 30, 2021 December 31, 2020

Amount Accumulated

8 unchanged sentences

$ 300,683 $ 109,838 $ 190,845 $ 313,960 $ 108,211 $ 205,749

For the three months ended June 30, 2021 and 2020, amortization expense was $ 5.3 million and $ 6.1 million, respectively.

Amortization expense was $ 10.5 million and $ 12.5 million for the six months ended June 30, 2021 and 2020, respectively.

For the three months ended September 30, 2021 and 2020, amortization expense was $ 4.9 million and $ 6.2 million, respectively.

Amortization expense was $ 15.4 million and $ 18.7 million for the nine months ended September 30, 2021 and 2020, respectively.

September 30,

2021 December 31,

5 unchanged sentences

$ 33,865 $ 29,727

September 30,

2021 December 31,

11 unchanged sentences

FINANCIAL STATEMENTS

Net Loss Per Share

The table below provides a reconciliation of the numerators and denominators of basic and diluted net loss per share for the three and six months ended June 30, 2021 and 2020 (in thousands, except per share amounts):

Three Months Ended

June 30, Six Months Ended

2021 2020 2021 2020

Net loss $ ( 15,271 ) $ ( 24,626 ) $ ( 31,081 ) $ ( 429,667 )

Income attributable to unvested restricted stock awards — — — —

Numerator for basic net loss per share ( 15,271 ) ( 24,626 ) ( 31,081 ) ( 429,667 )

Effect of dilutive securities:

Unvested restricted stock awards — — — —

Numerator for diluted net loss per share $ ( 15,271 ) $ ( 24,626 ) $ ( 31,081 ) $ ( 429,667 )

Denominators:

Weighted average number of common shares outstanding 61,335 60,987 61,252 60,879

Weighted average number of unvested restricted stock awards outstanding ( 1,018 ) ( 1,148 ) ( 1,045 ) ( 1,132 )

Denominator for basic and diluted net loss per share 60,317 59,839 60,207 59,747

Net loss per share:

Basic $ ( 0.25 ) $ ( 0.41 ) $ ( 0.52 ) $ ( 7.19 )

Diluted ( 0.25 ) ( 0.41 ) ( 0.52 ) ( 7.19 )

The calculation of diluted net loss per share for the three and six months ended June 30, 2021 excluded 437 thousand shares and 468 thousand shares, respectively, issuable pursuant to outstanding stock options, due to their antidilutive effect.

The calculation of diluted net loss per share for the three and six months ended June 30, 2020 excluded 596 thousand shares and 613 thousand shares, respectively, issuable pursuant to outstanding stock options, due to their antidilutive effect.

Additionally, shares issuable upon conversion of both the 2023 Notes and the 2026 Notes were excluded due to, among other factors, their antidilutive effect.

Long-term Debt

As of June 30, 2021 and December 31, 2020, long-term debt consisted of the following (in thousands):

As of September 30, 2021 and December 31, 2020, long-term debt consisted of the following (in thousands):

September 30,

2021 December 31,

9 unchanged sentences

____________________

(1) Presented net of $ 0.6 million of unamortized debt issuance costs as of December 31, 2020.

Unamortized debt issuance costs of $ 3.1 million as of June 30, 2021 are presented in Other noncurrent assets.

(2) The outstanding principal amount of the 2026 Notes was $ 135.0 million as of June 30, 2021.

(3) The outstanding principal amount of the 2023 Notes was $ 26.0 million and $ 157.4 million as of June 30, 2021 and December 31, 2020, respectively.

OIL STATES INTERNATIONAL, INC.

AND SUBSIDIARIES

NOTES TO UNAUDITED CONDENSED CONSOLIDATED

FINANCIAL STATEMENTS

(1) Presented net of $ 0.6 million of unamortized deferred financing costs as of December 31, 2020.

Unamortized deferred financing costs of $ 2.9 million as of September 30, 2021 are presented in Other noncurrent assets.

(2) The outstanding principal amount of the 2026 Notes was $ 135.0 million as of September 30, 2021.

(3) The outstanding principal amount of the 2023 Notes was $ 26.0 million and $ 157.4 million as of September 30, 2021 and December 31, 2020, respectively.

Revolving Credit Facilities

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Borrowings under the ABL Agreement bear interest at a rate equal to the London Interbank Offered Rate ("LIBOR") plus a margin of 2.75 % to 3.25 % and subject to a LIBOR floor rate of 0.50 %, or at a base rate plus a margin of 1.75 % to 2.25 %, in each case based on average borrowing availability.

The Company must also pay a quarterly commitment fee of 0.375 % to 0.50 % per annum, based on unused commitments under the ABL Agreement.

Quarterly, the Company must also pay a commitment fee of 0.375 % to 0.50 % per annum, based on unused commitments under the ABL Agreement.

The ABL Agreement places restrictions on the Company's ability to incur additional indebtedness, grant liens on assets, pay dividends or make distributions on equity interests, dispose of assets, make investments, repay other indebtedness (including the 2023 Notes and the 2026 Notes), engage in mergers, and other matters, in each case, subject to certain exceptions.

The ABL Agreement contains customary default provisions, which, if triggered, could result in acceleration of all amounts then outstanding.

The ABL Agreement also requires the Company to satisfy and maintain a fixed charge coverage ratio of not less than 1.0 to 1.0 for specified periods of time in the event that availability under the ABL Agreement is less than the greater of 15 % of the borrowing base and $ 14.1 million or if an event of default has occurred and is continuing.

As of June 30, 2021, the Company had $ 17.3 million of outstanding letters of credit, but no borrowings outstanding under the ABL Agreement.

The total amount available to be drawn as of June 30, 2021 was $ 50.3 million, calculated based on the current borrowing base less outstanding borrowings, if any, and letters of credit.

As of June 30, 2021, the Company was in compliance with its debt covenants under the ABL Agreement.

Former Facility

The Company's former senior secured revolving credit facility was governed by a credit agreement which was scheduled to mature on January 30, 2022.

The ABL Agreement also requires the Company to satisfy and maintain a fixed charge coverage ratio of not less than 1.0 to 1.0 for specified periods of time:

in the event that availability under the ABL Agreement is less than the greater of 15 % of the borrowing base and $ 14.1 million;

to complete certain specified transactions;

or if an event of default has occurred and is continuing.

OIL STATES INTERNATIONAL, INC.

AND SUBSIDIARIES

NOTES TO UNAUDITED CONDENSED CONSOLIDATED

FINANCIAL STATEMENTS

As of September 30, 2021, the Company had $ 16.5 million of outstanding letters of credit, but no borrowings outstanding under the ABL Agreement.

The total amount available to be drawn as of September 30, 2021 was $ 61.4 million, calculated based on the current borrowing base less outstanding borrowings, if any, and letters of credit.

As of September 30, 2021, the Company was in compliance with its debt covenants under the ABL Agreement.

Former Revolving Credit Facility

Until its termination on February 10, 2021, the Company's former senior secured revolving credit facility was governed by a credit agreement which was scheduled to mature on January 30, 2022.

On June 17, 2020, the Company entered into an omnibus amendment to the credit agreement, under which lender commitments were reduced in exchange for the suspension of certain financial covenants through March 30, 2021.

13 unchanged sentences

(2) Based on unused commitments under the credit agreement.

OIL STATES INTERNATIONAL, INC.

AND SUBSIDIARIES

NOTES TO UNAUDITED CONDENSED CONSOLIDATED

FINANCIAL STATEMENTS

On March 19, 2021, the Company issued $ 135.0 million aggregate principal amount of the 2026 Notes pursuant to an indenture, dated as of March 19, 2021 (the "2026 Indenture"), between the Company and Wells Fargo Bank, National Association, as trustee.

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The Company used $ 120.0 million of the cash proceeds to purchase $ 125.0 million principal amount of the outstanding 2023 Notes at a discount, with the balance added to cash on-hand.

The 2026 Notes bear interest at a rate of 4.75 % per year until maturity.

The 2026 Notes bear interest at a rate of 4.75 % per year and will mature on April 1, 2026, unless earlier repurchased, redeemed or converted.

Interest is payable semi-annually in arrears on April 1 and October 1 of each year.

Additional interest and special interest may accrue on the 2026 Notes under certain circumstances as described in the 2026 Indenture.

The 2026 Notes will mature on April 1, 2026, unless earlier repurchased, redeemed or converted.

The initial conversion rate is 95.3516 shares of the Company's common stock per $1,000 principal amount of 2026 Notes (equivalent to an initial conversion price of approximately $ 10.49 per share of common stock).

2 unchanged sentences

Noteholders may convert their 2026 Notes, at their option, only in the following circumstances:

(1) during any calendar quarter commencing after the calendar quarter ending on June 30, 2021, if the last reported sale price per share of the Company's common stock exceeds 130 % of the conversion price for each of at least 20 trading days during the 30 consecutive trading days ending on, and including, the last trading day of the immediately preceding calendar quarter;

(1) if the last reported sale price per share of the Company's common stock exceeds 130 % of the conversion price for each of at least 20 trading days during the 30 consecutive trading days ending on, and including, the last trading day of the immediately preceding calendar quarter;

(2) during the five consecutive business days immediately after any five consecutive trading day period (such five consecutive trading day period, the "measurement period") in which the trading price per $1,000 principal amount of the 2026 Notes for each trading day of the measurement period was less than 98 % of the product of the last reported sale price per share of the Company's common stock on such trading day and the conversion rate on such trading day;

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If the Company elects to deliver cash or a combination of cash and shares of common stock, then the consideration due upon conversion will be based on a defined observation period.

The 2026 Notes will be redeemable, in whole or in part, at the Company's option on or after April 6, 2024, at a cash redemption price equal to the principal amount of the 2026 Notes to be redeemed, plus accrued and unpaid interest, if any, to, but excluding, the redemption date, but only if the last reported sale price per share of common stock exceeds 130 % of the conversion price on each of at least 20 trading days during the 30 consecutive trading days ending on, and including, the trading day immediately before the date the Company sends the related redemption notice.

If specified change in control events involving the Company as defined in the 2026 Indenture occur, then noteholders may require the Company to repurchase their 2026 Notes at a cash repurchase price equal to the principal amount of the 2026 Notes to be repurchased, plus accrued and unpaid interest.

Additionally, the 2026 Indenture contains certain events of default, including certain defaults by the Company with respect to other indebtedness of at least $ 40.0 million.

As of June 30, 2021, none of the conditions allowing holders of the 2026 Notes to convert, or requiring the Company to repurchase the 2026 Notes, had been met.

OIL STATES INTERNATIONAL, INC.

2 unchanged sentences

FINANCIAL STATEMENTS

Additionally, the 2026 Indenture contains certain events of default, including certain defaults by the Company with respect to other indebtedness of at least $ 40.0 million.

As of September 30, 2021, none of the conditions allowing holders of the 2026 Notes to convert, or requiring the Company to repurchase the 2026 Notes, had been met.

On January 30, 2018, the Company issued $ 200.0 million aggregate principal amount of the 2023 Notes, pursuant to an indenture, dated as of January 30, 2018 (the "2023 Indenture"), between the Company and Wells Fargo Bank, National Association, as trustee.

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The Company's intent is to repay the principal amount of the Notes in cash and settle the conversion feature in shares of the Company's common stock.

The initial carrying amount of the 2023 Notes recorded in the consolidated balance sheet was less than their $ 200 million principal amount, in accordance with then-applicable accounting principles, reflective of the estimated fair value of a similar debt instrument that did not have a conversion feature.

The initial carrying amount of the 2023 Notes recorded in the consolidated balance sheet was less than their principal amount, in accordance with then-applicable accounting principles, reflective of the estimated fair value of a similar debt instrument that did not have a conversion feature.

The Company recorded the value of the conversion feature as a debt discount, which was amortized as interest expense over the term of the 2023 Notes, with a similar amount allocated to additional paid-in capital.

1 unchanged sentence

See Note 2, "Recent Accounting Pronouncement," for discussion of ASU 2020-06, which changed the Company's method of accounting for the 2023 Notes upon adoption.

The following table provides details with respect to the carrying amount of the 2023 Notes in the consolidated balance sheets as of June 30, 2021 and December 31, 2020 (in thousands):

The following table provides details with respect to the carrying amount of the 2023 Notes in the consolidated balance sheets as of September 30, 2021 and December 31, 2020 (in thousands):

September 30,

2021 December 31,

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Net carrying amount of the equity component n.a.

The following table presents the Company's purchases of outstanding 2023 Notes during the three- and six-month periods ended June 30, 2021 and 2020, with non-cash gains included within other income, net (in thousands):

Principal Amount Carrying Value of Liability Cash Paid Non-cash Gain Recognized

Three months ended June 30,

OIL STATES INTERNATIONAL, INC.

AND SUBSIDIARIES

NOTES TO UNAUDITED CONDENSED CONSOLIDATED

FINANCIAL STATEMENTS

The following table presents the Company's purchases of outstanding 2023 Notes during the three and nine months ended September 30, 2021 and 2020, with non-cash gains included within other income, net (in thousands):

Principal Amount Carrying Value of Liability Cash Paid Non-cash Gains Recognized

Three Months Ended September 30,

2021 $ — $ — $ — $ —

2020 17,200 15,425 9,483 5,942

Six months ended June 30,

Nine Months Ended September 30,

2021 $ 131,400 $ 129,974 $ 125,952 $ 4,022

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Since December 31, 2018, the Company has purchased a cumulative $ 174.0 million principal amount of the outstanding 2023 Notes for $ 152.8 million in cash.

OIL STATES INTERNATIONAL, INC.

AND SUBSIDIARIES

NOTES TO UNAUDITED CONDENSED CONSOLIDATED

FINANCIAL STATEMENTS

Promissory Note

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The Company has incurred settlement costs and expenses of $ 7.5 million related to such indemnification claims, and believes that the maturity date of such note is extended until the resolution of such indemnity claims and that it is permitted to set-off the principal amount owed by the amount of such costs and expenses.

Accordingly, the Company has reduced the carrying amount of such note in the consolidated balance sheet to $ 17.5 million as of June 30, 2021, which is its current best estimate of what is owed after set-off for such indemnification matters.

Accordingly, the Company has reduced the carrying amount of such note in the consolidated balance sheet to $ 17.5 million as of September 30, 2021, which is its current best estimate of what is owed after set-off for such indemnification matters.

See Note 13, "Commitments and Contingencies."

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The Company believes that the carrying values of these instruments, other than the 2023 Notes and 2026 Notes, on the accompanying consolidated balance sheets approximate their fair values.

The estimated fair value of the 2023 Notes as of June 30, 2021 was $ 24.4 million based on quoted market prices (a Level 2 fair value measurement), which compares to the principal amount of $ 26.0 million.

The estimated fair value of the 2026 Notes as of June 30, 2021 was $ 146.0 million based on quoted market prices (a Level 2 fair value measurement), which compares to the principal amount of $ 135.0 million.

The estimated fair value of the 2023 Notes as of September 30, 2021 was $ 24.6 million based on quoted market prices (a Level 2 fair value measurement), which compares to the principal amount of $ 26.0 million.

The estimated fair value of the 2026 Notes as of September 30, 2021 was $ 132.9 million based on quoted market prices (a Level 2 fair value measurement), which compares to the principal amount of $ 135.0 million.

Stockholders' Equity

The following table provides details with respect to the changes to the number of shares of common stock, $ 0.01 par value, outstanding during the first six months of 2021 (in thousands):

The following table provides details with respect to the changes to the number of shares of common stock, $ 0.01 par value, outstanding during the first nine months of 2021 (in thousands):

Shares of common stock outstanding – December 31, 2020 61,005

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Shares withheld for taxes on vesting of stock awards and transferred to treasury ( 238 )

Shares of common stock outstanding – June 30, 2021 61,399

As of June 30, 2021 and December 31, 2020, the Company had 25,000,000 shares of preferred stock, $ 0.01 par value, authorized, with no shares issued or outstanding.

Shares of common stock outstanding – September 30, 2021 61,376

As of September 30, 2021 and December 31, 2020, the Company had 25,000,000 shares of preferred stock, $ 0.01 par value, authorized, with no shares issued or outstanding.

OIL STATES INTERNATIONAL, INC.

AND SUBSIDIARIES

NOTES TO UNAUDITED CONDENSED CONSOLIDATED

FINANCIAL STATEMENTS

Accumulated Other Comprehensive Loss

Accumulated other comprehensive loss, reported as a component of stockholders' equity, decreased from $ 71.4 million at December 31, 2020 to $ 69.8 million at June 30, 2021, due to changes in currency exchange rates.

Accumulated other comprehensive loss is primarily related to fluctuations in the currency exchange rates compared to the U.S.

dollar which are used to translate certain of the international operations of the Company's operating segments.

For the six months ended June 30, 2021 and 2020, currency translation adjustments recognized as a component of other comprehensive loss were primarily attributable to the United Kingdom and Brazil.

As of June 30, 2021, the exchange rate for the British pound and the Brazilian real compared to the U.S.

dollar strengthened by 1 % and 4 %, respectively, compared to the exchange rates at December 31, 2020, contributing to other comprehensive income of $ 1.6 million reported for the six months ended June 30, 2021.

During the first six months of 2020, the exchange rate for the British pound and the Brazilian real compared to the U.S.

dollar weakened by 6 % and 27 %, respectively, compared to the exchange rate at December 31, 2019, contributing to other comprehensive loss of $ 16.0 million reported for the six months ended June 30, 2020.

Accumulated other comprehensive loss, reported as a component of stockholders' equity, increased from $ 71.4 million at December 31, 2020 to $ 75.6 million at September 30, 2021, due to changes in currency exchange rates.

Accumulated other comprehensive loss is primarily related to fluctuations in currency exchange rates compared to the U.S.

dollar as used to translate certain of the international operations of the Company's operating segments.

For the nine months ended September 30, 2021 and 2020, currency translation adjustments recognized as a component of other comprehensive loss were primarily attributable to the United Kingdom and Brazil.

As of September 30, 2021, the exchange rate for the British pound and the Brazilian real compared to the U.S.

dollar weakened by 1 % and 5 %, respectively, compared to the exchange rates at December 31, 2020, contributing to other comprehensive loss of $ 4.2 million reported for the nine months ended September 30, 2021.

During the first nine months of 2020, the exchange rate for the British pound and the Brazilian real compared to the U.S.

dollar weakened by 2 % and 29 %, respectively, compared to the exchange rate at December 31, 2019, contributing to other comprehensive loss of $ 12.7 million reported for the nine months ended September 30, 2020.

For the three months ended September 30, 2021, the Company's income tax benefit was $ 3.5 million on a pre-tax loss of $ 16.6 million.

This compares to an income tax benefit of $ 7.7 million on a pre-tax loss of $ 27.6 million, which included certain non-deductible expenses, for the three months ended September 30, 2020.

For the nine months ended September 30, 2021, the Company's income tax benefit was $ 9.1 million on a pre-tax loss of $ 53.2 million, which included certain non-deductible expenses.

This compares to an income tax benefit of $ 54.1 million on a pre-tax loss of $ 503.7 million, which included non-cash goodwill charges (approximately $ 313.1 million) and other expenses that are not deductible for income tax purposes, for the nine months ended September 30, 2020.

The impact of these non-deductible expenses in 2020 was partially offset by a $ 16.4 million discrete tax benefit related to the carryback of U.S.

net operating losses under the CARES Act.

Net Loss Per Share

The table below provides a reconciliation of the numerators and denominators of basic and diluted net loss per share for the three and nine months ended September 30, 2021 and 2020 (in thousands, except per share amounts):

Three Months Ended

September 30, Nine Months Ended

September 30,

2021 2020 2021 2020

Net loss $ ( 13,042 ) $ ( 19,969 ) $ ( 44,123 ) $ ( 449,636 )

Income attributable to unvested restricted stock awards — — — —

Numerator for basic net loss per share ( 13,042 ) ( 19,969 ) ( 44,123 ) ( 449,636 )

Effect of dilutive securities:

Unvested restricted stock awards — — — —

Numerator for diluted net loss per share $ ( 13,042 ) $ ( 19,969 ) $ ( 44,123 ) $ ( 449,636 )

Denominators:

Weighted average number of common shares outstanding 61,378 61,028 61,294 60,928

Weighted average number of unvested restricted stock awards outstanding ( 1,001 ) ( 1,157 ) ( 1,030 ) ( 1,140 )

Denominator for basic and diluted net loss per share 60,377 59,871 60,264 59,788

Net loss per share:

Basic $ ( 0.22 ) $ ( 0.33 ) $ ( 0.73 ) $ ( 7.52 )

Diluted ( 0.22 ) ( 0.33 ) ( 0.73 ) ( 7.52 )

OIL STATES INTERNATIONAL, INC.

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FINANCIAL STATEMENTS

The calculation of diluted net loss per share for the three and nine months ended September 30, 2021 excluded 394 thousand shares and 444 thousand shares, respectively, issuable pursuant to outstanding stock options, due to their antidilutive effect.

The calculation of diluted net loss per share for the three and nine months ended September 30, 2020 excluded 560 thousand shares and 595 thousand shares, respectively, issuable pursuant to outstanding stock options, due to their antidilutive effect.

Additionally, shares issuable upon conversion of both the 2023 Notes and the 2026 Notes were excluded due to, among other factors, their antidilutive effect.

Long-Term Incentive Compensation

The following table presents a summary of activity for stock options, service-based restricted stock awards and performance-based stock unit awards for the six months ended June 30, 2021 (in thousands):

The following table presents a summary of activity for stock options, service-based restricted stock awards and performance-based stock unit awards for the nine months ended September 30, 2021 (in thousands):

Stock Options Service-based Restricted Stock Performance-based Stock Units

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Forfeited ( 142 ) ( 59 ) ( 42 )

Outstanding – June 30, 2021 396 1,040 420

Outstanding – September 30, 2021 388 993 420

Weighted average grant date fair value (2021 awards) $ — $ 6.78 $ 6.84

The restricted stock program consists of a combination of service-based restricted stock and performance-based stock units.

Service-based restricted stock awards generally vest on a straight-line basis over their term, which is generally three years .

Performance-based restricted stock awards generally vest at the end of a three-year period, with the number of shares ultimately issued under the program dependent upon achievement of predefined specific performance measures.

Service-based restricted stock awards generally vest on a straight-line basis over a term of three years .

Performance-based stock awards generally vest at the end of a three-year period, with the number of shares ultimately issued under the program dependent upon achievement of predefined specific performance objectives.

The performance objective for performance-based awards granted in 2021 is the Company's cumulative EBITDA over a three-year period.

The performance objective for outstanding awards granted in 2020 and 2019 is the Company's EBITDA growth rate over a three-year period.

In the event the predefined targets are exceeded for any performance-based award, additional shares up to a maximum of 200 % of the target award may be granted.

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If the actual performance falls below the threshold performance level, no restricted shares will vest.

The performance measure for outstanding awards granted in 2019 and 2020 is the Company's EBITDA growth rate over a three-year period.

The performance measure for outstanding awards granted in 2021 is the Company's cumulative EBITDA over a three-year period.

During the first quarters of 2021 and 2020, the Company issued conditional long-term cash incentive awards ("Cash Awards") of $ 1.5 million and $ 1.5 million (adjusted for forfeitures), respectively, with the ultimate dollar amount to be awarded ranging from zero to a maximum of $ 3.1 million for the 2021 Cash Award and from zero to a maximum of $ 3.0 million for the 2020 Cash Award.

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The obligations, if any, related to the Cash Awards are classified as liabilities and recognized over the vesting period.

Stock-based compensation expense recognized during the three and six months ended June 30, 2021 totaled $ 1.9 million and $ 4.7 million, respectively.

Stock-based compensation expense recognized during the three and six months ended June 30, 2020 totaled $ 2.1 million and $ 3.3 million, respectively.

As of June 30, 2021, there was $ 9.6 million of pre-tax compensation costs related to service-based and performance-based stock awards, which will be recognized in future periods as vesting conditions are satisfied.

Stock-based compensation expense recognized during the three and nine months ended September 30, 2021 totaled $ 1.5 million and $ 6.3 million, respectively.

Stock-based compensation expense recognized during the three and nine months ended September 30, 2020 totaled $ 2.1 million and $ 5.3 million, respectively.

As of September 30, 2021, there was $ 7.5 million of pre-tax compensation costs related to service-based and performance-based stock awards, which will be recognized in future periods as vesting conditions are satisfied.

On May 11, 2021, the Company’s stockholders approved the Amended and Restated Equity Participation Plan of Oil States International, Inc., which provided for a 4.5 million increase in the number of shares authorized for issuance under the plan.

For the three months ended June 30, 2021, the Company's income tax benefit was $ 3.2 million on a pre-tax loss of $ 18.5 million, which included certain non-deductible expenses.

This compares to an income tax benefit of $ 6.9 million on a pre-tax loss of $ 31.5 million, which included certain non-deductible expenses, for the three months ended June 30, 2020.

For the six months ended June 30, 2021, the Company's income tax benefit was $ 5.5 million on a pre-tax loss of $ 36.6 million, which included certain non-deductible expenses.

This compares to an income tax benefit of $ 46.4 million on a pre-tax loss of $ 476.1 million, which included non-cash goodwill charges (approximately $ 313.1 million) and other expenses that are not deductible for income tax purposes, for the six months ended June 30, 2020.

The impact of these non-deductible expenses in 2020 was partially offset by a $ 14.8 million discrete tax benefit related to the carryback of U.S.

net operating losses under the CARES Act.

OIL STATES INTERNATIONAL, INC.

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Offshore/Manufactured Products, Downhole Technologies and Well Site Services.

Financial information by operating segment for the three and six months ended June 30, 2021 and 2020 is summarized in the following tables (in thousands).

Financial information by operating segment for the three and nine months ended September 30, 2021 and 2020 is summarized in the following tables (in thousands).

Revenues Depreciation and amortization Operating income (loss) Capital expenditures Total assets

Three Months Ended June 30, 2021

Three Months Ended September 30, 2021

Offshore/Manufactured Products $ 69,003 $ 5,662 $ 1,764 $ 677 $ 525,894

Downhole Technologies (1)

Well Site Services (1)

25,527 4,226 ( 5,035 ) 378 275,095

Well Site Services 45,998 9,531 ( 5,250 ) 2,203 210,601

Corporate — 238 ( 7,618 ) 408 80,309

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Revenues Depreciation and amortization Operating income (loss) Capital expenditures Total assets

Three Months Ended June 30, 2020

Three Months Ended September 30, 2020

Offshore/Manufactured Products $ 78,674 $ 5,401 $ 3,875 $ 686 $ 541,661

Downhole Technologies (2)

Well Site Services (2)

18,713 5,701 ( 12,594 ) 78 294,768

Well Site Services 37,372 12,930 ( 13,872 ) 1,579 253,881

Corporate — 219 ( 8,249 ) 19 90,476

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________________

(1) Operating loss included non-cash operating lease asset impairment charges of $ 2.8 million.

(2) Operating loss included a non-cash fixed asset impairment charge of $ 3.0 million.

(1) Operating loss included a non-cash inventory impairment charge of $ 2.1 million.

(2) Operating loss included a non-cash inventory impairment charge of $ 5.9 million.

Revenues Depreciation and amortization Operating income (loss) Capital expenditures Total assets

Six Months Ended June 30, 2021

Nine Months Ended September 30, 2021

Offshore/Manufactured Products $ 206,520 $ 16,688 $ 7,645 $ 1,932 $ 525,894

Downhole Technologies (1)

77,717 13,136 ( 8,945 ) 658 275,095

Well Site Services (2)

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Revenues Depreciation and amortization Operating income (loss) Capital expenditures Total assets

Six Months Ended June 30, 2020

Nine Months Ended September 30, 2020

Offshore/Manufactured Products (3)

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________________

(1) Operating loss included a non-cash inventory impairment charge of $ 2.1 million.

(2) Operating loss included non-cash fixed and lease asset impairment charges of $ 3.4 million.

(3) Operating loss included non-cash goodwill and inventory impairment charges of $ 86.5 million and $ 16.2 million, respectively.

(3) Operating loss included a non-cash goodwill impairment charge of $ 192.5 million.

(4) Operating loss included non-cash goodwill and inventory impairment charges of $ 192.5 million and $ 5.9 million, respectively.

(5) Operating loss included non-cash goodwill, inventory and fixed asset impairment charges of $ 127.1 million, $ 9.0 million and $ 8.2 million, respectively.

See Note 3, "Asset Impairments and Other Restructuring Items," and Note 4, "Details of Selected Balance Sheet Accounts," for further discussion of these and other charges and benefits recognized in first six months of 2021 and 2020.

OIL STATES INTERNATIONAL, INC.

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FINANCIAL STATEMENTS

The following tables provide supplemental disaggregated revenue from contracts with customers by operating segment for the three and six months ended June 30, 2021 and 2020 (in thousands):

The following tables provide supplemental disaggregated revenue from contracts with customers by operating segment for the three and nine months ended September 30, 2021 and 2020 (in thousands):

Offshore/Manufactured Products Downhole Technologies Well Site Services Total

2021 2020 2021 2020 2021 2020 2021 2020

Three months ended June 30

Three Months Ended September 30

Major revenue categories -

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2021 2020 2021 2020 2021 2020 2021 2020

Six months ended June 30

Nine Months Ended September 30

Major revenue categories -

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$ 206,520 $ 264,782 $ 77,717 $ 74,743 $ 127,604 $ 161,173 $ 411,841 $ 500,698

Revenues from products and services transferred to customers over time accounted for approximately 61 % and 63 % of consolidated revenues for each of the six months ended June 30, 2021 and 2020, respectively.

Revenues from products and services transferred to customers over time accounted for approximately 63 % and 62 % of consolidated revenues for the nine months ended September 30, 2021 and 2020, respectively.

The balance of revenues for the respective periods relates to products and services transferred to customers at a point in time.

As of June 30, 2021, the Company had $ 158 million of remaining backlog related to contracts with an original expected duration of greater than one year .

Approximately 33 % of this remaining backlog is expected to be recognized as revenue over the remaining six months of 2021, with an additional 33 % in 2022 and the balance thereafter.

Commitments and Contingencies

During the first half of 2021, the distribution of COVID-19 vaccines progressed and many government-imposed restrictions were relaxed or rescinded.

However, the effect of the COVID-19 pandemic and related economic, business and market disruptions remains uncertain.

The most direct and immediate impact that the Company has experienced and expects to continue to experience from the COVID-19 pandemic is decreased demand for and pricing of its products and services due to lower activity levels by its customers resulting from the reduction in the demand for crude oil.

While the prices of and demand for crude oil have recovered from the lows seen in the initial stages of the pandemic, further outbreaks or the emergence of new strains of the COVID-19 virus could result in the reimposition of domestic and international regulations directing individuals to stay at home, limiting travel, requiring facility closures and imposing quarantines.

Widespread reimposition of these or similar restrictions could result in reductions in the price of and demand for crude oil and thus, the demand for the Company's products and services, as well as delays in or inability of the Company to fulfill its contractual obligations to customers, logistic constraints, increases in the Company's costs, workforce shortages and unavailability of raw materials.

The Company continues to monitor the effect of COVID-19 on its employees, customers, critical suppliers and other stakeholders.

The ultimate duration of the COVID-19 pandemic, the resulting governmental restrictions and the related impact on the prices of and the demand for crude oil and the U.S.

and global economy and capital markets remains uncertain.

As of September 30, 2021, the Company had $ 153.2 million of remaining backlog related to contracts with an original expected duration of greater than one year .

Approximately 21 % of this remaining backlog is expected to be recognized as revenue over the remaining three months of 2021, with an additional 38 % recognized in 2022 and the balance thereafter.

OIL STATES INTERNATIONAL, INC.

2 unchanged sentences

FINANCIAL STATEMENTS

Commitments and Contingencies

During the first nine months of 2021, the distribution of COVID-19 vaccines progressed and many government-imposed restrictions were relaxed or rescinded.

However, the effect of the COVID-19 pandemic and related economic, business and market disruptions remains uncertain.

The most direct and immediate impacts that the Company continues to experience is decreased demand for and pricing of its products and services due to lower activity levels by its customers resulting from the reduction in the demand for crude oil, market pressures driving increased capital discipline and, to a lesser extent, supply chain disruptions.

Widespread implementation of these or similar restrictions could result in reductions in the prices of and demand for crude oil and thus, the demand for the Company's products and services, as well as delays in or inability of the Company to fulfill its contractual obligations to customers, logistic constraints, increases in the Company's costs, workforce shortages and unavailability of raw materials.

The Company continues to monitor the effect of COVID-19 on its employees, customers, critical suppliers and other stakeholders.

The ultimate duration of the COVID-19 pandemic, the resulting governmental restrictions and the related impact on the prices of and the demand for crude oil and the United States and global economy and capital markets remains uncertain.

The Company is a party to various pending or threatened claims, lawsuits and administrative proceedings seeking damages or other remedies concerning its commercial operations, products, employees and other matters, including occasional claims by individuals alleging exposure to hazardous materials as a result of the Company's products or operations.

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Additionally, the Company believes that its agreements with the Seller allow it to set-off such amounts against payments due under the $ 25.0 million promissory note and that, because the Company has asserted indemnification claims, the maturity date of such note is extended until the resolution of such claims.

Accordingly, the Company reduced the carrying amount of such note in its consolidated balance sheets to $ 17.5 million as of June 30, 2021, which is the Company's current best estimate of what is owed after set-off for such indemnification matters.

Accordingly, the Company reduced the carrying amount of such note in its consolidated balance sheet to $ 17.5 million as of September 30, 2021, which is the Company's current best estimate of what is owed after set-off for such indemnification matters.

In August 2020, the Seller filed a breach of contract suit against the Company and one of its wholly-owned subsidiaries in federal court alleging that payments due under the promissory note are required to be, but have not been, repaid in accordance with the terms of the note.

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On February 15, 2021, the Seller dismissed the federal lawsuit without prejudice and refiled its lawsuit in state court.

On September 20, 2021, a motion by the Seller for partial summary judgement was dismissed.

The Company denies the validity of these breach of contract claims and plans to vigorously defend against this lawsuit.

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Management's Discussion and Analysis of Financial Condition and Results of Operations" and "Part II, Item 7A.

Quantitative and Qualitative Disclosures about Market Risk" included in our 2020 Annual Report on Form 10-K filed with the Securities and Exchange Commission on February 22, 2021 as well as "Part II.

Risk Factors" included in this Quarterly Report on Form 10-Q.

Quantitative and Qualitative Disclosures about Market Risk" included in our 2020 Annual Report on Form 10-K filed with the Securities and Exchange Commission (the "SEC") on February 22, 2021.

You can typically identify "forward-looking statements" by the use of forward-looking words such as "may," "will," "could," "project," "believe," "anticipate," "expect," "estimate," "potential," "plan," "forecast," "proposed," "should," "seek," and other similar words.

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While we believe we are providing forward-looking statements expressed in good faith and on a reasonable basis, there can be no assurance that actual results will not differ from such forward-looking statements.

The following are important factors that could cause actual results to differ materially from those expressed in any forward-looking statement made by, or on behalf of, our Company:

The following are important factors that could cause actual results to differ materially from those expressed in any forward-looking statement made by, or on behalf of, us:

• public health crises, such as the Coronavirus Disease 2019 ("COVID-19") pandemic, which has negatively impacted the global economy, and correspondingly, demand for crude oil;

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• political, economic and litigation efforts to restrict or eliminate certain oil and natural gas exploration, development and production activities due to concerns over the threat of climate change;

• the availability of and access to attractive oil and natural gas field prospects, which may be affected by governmental actions or actions of other parties which may restrict drilling and completion activities;

• the availability of and access to attractive oil and natural gas field prospects, which may be affected by governmental actions or actions of other parties restricting drilling and completion activities;

• general global economic conditions;

• global weather conditions and natural disasters;

• global weather conditions and natural disasters, such as Hurricane Ida which negatively impacted our and our customers operations in southeast Louisiana and the Gulf of Mexico in September 2021;

• changes in tax laws and regulations;

• supply chain disruptions;

• the impact of tariffs and duties on imported materials and exported finished goods;

3 unchanged sentences

• our ability to develop new competitive technologies and products;

• our ability to increase prices to our customers as our costs increase;

• inflation, including our ability to increase prices to our customers as our costs increase;

• fluctuations in currency exchange rates;

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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-Q

Item 1. Financial Statements