What changed in this filing

/stocks — the workspaceLOADING

Item 9A. Controls and Procedures

2025-02-21 compared with 2024-02-21 · 292 added, 198 removed, 906 unchanged (35% of the section changed)

31 unchanged sentences

(4) Information concerning corporate governance and our code of ethics is incorporated by reference to our Definitive Proxy Statement for the 2025 Annual Meeting of Stockholders, under “Corporate Governance.”

(5) Information concerning our insider trading policy is incorporated by reference to our Definitive Proxy Statement for the 2025 Annual Meeting of Stockholders, under “Compensation Discussion and Analysis.” A copy of our insider trading policy is filed with this Annual Report on Form 10-K as Exhibit 19.1.

Executive Compensation

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— Second Amendment to Credit Agreement, dated December 13, 2022, among Oil States International, Inc., as Borrower, the Lenders from time to time hereto, and Wells Fargo Bank, National Association as Agent (incorporated by reference to Exhibit 10.9 to the Company’s Annual Report on Form 10-K for the year ended December 31, 2022, as filed with the SEC on February 17, 2023 (File No.

— Third Amendment to Credit Agreement, dated February 16, 2024, among Oil States International, Inc., as Borrower, the Lenders from time to time hereto, and Wells Fargo Bank, National Association as Agent (incorporated by reference to Exhibit 10.10 to the Company’s Annual Report on Form 10‑K for the year ended December 31, 2013, as filed with the SEC on February 21, 2014 (File No.

— Form of Indemnification Agreement (incorporated by reference to Exhibit 10.14 to the Company’s Quarterly Report on Form 10‑Q for the quarter ended September 30, 2004, as filed with the SEC on November 5, 2004 (File No.

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333‑2565777)).

— Form of Performance Award Agreement under the Company’s Amended and Restated Equity Participation Plan (incorporated by reference to Exhibit 4.8 to the Company’s Registration Statement on Form S-8, as filed with the SEC on May 28, 2021 (File No.

333‑2565777)).

— Form of Performance Award Agreement under the Company’s Amended and Restated Equity Participation Plan (incorporated by reference to Exhibit 10.1 to the Company's Quarterly Report on Form 10-Q for the quarter ended March 31, 2024, as filed with the SEC on April 26, 2024 (File No.

— Form of Cash Award Agreement (incorporated by reference to Exhibit 10.4 to the Company’s Quarterly Report on Form 10-Q for the quarter ended March 31, 2021, as filed with the SEC on April 29, 2021 (File No.

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— Annual Incentive Compensation Plan, dated January 1, 2020 (incorporated by reference to Exhibit 10.1 to the Company’s Quarterly Report on Form 10-Q for the quarter ended March 31, 2020, as filed with the SEC on May 1, 2020 (File No.

— O il States International, Inc.

Insider Trading Policy

— List of subsidiaries of the Company.

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pursuant to Rules 13a‑14(b) or 15d‑14(b) under the Securities Exchange Act of 1934.

— In centive-Based Compensation Recoupment Policy

— In centive-Based Compensation Recoupment Policy (incorporated by reference to Exhibit 97.1 to the Company’s Annual Report on Form 10-K for the year ended December 31, 202 3 , as filed with the SEC on February 21 , 202 4 (File No.

101.INS* — XBRL Instance Document

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Signature Title

* Chairman of the Board

* Chair of the Board

Taylor Director, President & Chief Executive Officer

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We believe that our audits provide a reasonable basis for our opinion.

Critical Audit Matter

The critical audit matter communicated below is a matter arising from the current period audit of the financial statements that was communicated or required to be communicated to the audit committee and that:

(1) relates to accounts or disclosures that are material to the financial statements and (2) involved our especially challenging, subjective or complex judgments.

The communication of the critical audit matter does not alter in any way our opinion on the consolidated financial statements, taken as a whole, and we are not, by communicating the critical audit matter below, providing a separate opinion on the critical audit matter or on the accounts or disclosures to which it relates.

Critical Audit Matters

The critical audit matters communicated below are matters arising from the current period audit of the financial statements that were communicated or required to be communicated to the audit committee and that:

(1) relate to accounts or disclosures that are material to the financial statements and (2) involved our especially challenging, subjective or complex judgments.

The communication of the critical audit matters does not alter in any way our opinion on the consolidated financial statements, taken as a whole, and we are not, by communicating the critical audit matters below, providing a separate opinion on the critical audit matters or on the accounts or disclosures to which they relate.

Product revenues recognized over-time on project-driven contracts

Description of the Matter

As discussed in Note 2 to the consolidated financial statements, the Company recognizes product revenue over time for certain project-driven contracts using an input method such as the percentage of costs incurred to date relative to total estimated costs at completion for each contract (cost-to-cost method).

Auditing management’s calculation of product revenues recognized under the cost-to-cost method was complex and subjective due to the significant estimation required in determining the estimated costs remaining on the project.

As discussed in Note 2 to the consolidated financial statements, the Company recognizes revenue over time for certain project-driven contracts using an input method such as the percentage of costs incurred to date relative to total estimated costs at completion for each contract (cost-to-cost method).

Auditing management’s calculation of revenues recognized under the cost-to-cost method was complex and subjective due to the significant estimation required in determining the estimated costs remaining on the project.

In particular, the estimates of remaining costs associated with materials and labor are sensitive and may be impacted by factors outside of the Company’s control.

How We Addressed the Matter in Our Audit

We obtained an understanding, evaluated the design, and tested the operating effectiveness of controls over the Company’s process for recognizing product revenues over-time on project-driven contracts, including management’s review of the estimated costs to complete and associated revenues.

We obtained an understanding, evaluated the design, and tested the operating effectiveness of controls over the Company’s process for recognizing revenues over-time on project-driven contracts, including management’s review of the estimated costs to complete and associated revenues.

To test the Company’s estimate of the progress towards completion of its projects, we performed audit procedures that included, among others, testing the significant assumptions discussed above to develop the estimated cost to complete and testing the completeness and accuracy of the underlying data.

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and performing lookback analyses to historical actual costs to assess management’s ability to estimate.

Recoverability of long-lived assets – Downhole Technologies segment

Description of the Matter

As discussed in Note 2 to the consolidated financial statements, the recoverability of the carrying values of long-lived assets is assessed at the asset group level whenever, in management’s judgment, events or changes in circumstances indicate that the carrying value of such asset groups may not be recoverable based on estimated undiscounted future cash flows.

If this assessment indicates that the carrying value will not be recoverable, an impairment loss equal to the excess of the carrying value over the fair value of the asset group is recognized.

Auditing the Company’s assessment of the recoverability of the long-lived tangible and intangible assets of an asset group within the Downhole Technologies segment was complex due to the degree of judgment required in evaluating management’s significant assumptions, primarily forecasted revenue and margin within the asset group, which are sensitive to and affected by economic, industry and company-specific factors.

How We Addressed the Matter in Our Audit

We obtained an understanding, evaluated the design and tested the operating effectiveness of controls addressing the risk of material misstatement relating to the Company's process for assessing the asset group for impairment.

This included testing management’s review controls over the quantitative data and assumptions used in the undiscounted cash flow recoverability assessment, including the underlying data used to perform the assessment.

To test the recoverability assessment and the undiscounted future cash flows of the long-lived assets of an asset group within the Downhole Technologies segment, we performed audit procedures that included, among others, testing the significant assumptions and the underlying data used by the Company in its assessment, including assessing the completeness and accuracy of such underlying data.

We compared the forecasted revenue used by management to external forecasted spending trends in the industry, analyst forecasted commodity prices and historical performance.

We assessed the reasonableness of forecasted margins by comparing to historical performance taking into consideration changes in forecasted product mix and cost saving initiatives.

We performed a lookback analysis to historical revenue and margin to assess management’s ability to estimate.

We performed sensitivity analyses of significant assumptions to evaluate the change in the undiscounted cash flows that would result from changes in the significant assumptions.

/s/ Ernst & Young LLP

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Depreciation and amortization expense 54,708 60,778 67,334

Impairments of fixed and lease assets — — 4,166

Impairment of goodwill 10,000 — —

Impairments of intangible assets 10,787 — —

Impairments of operating lease assets 3,767 — —

Other operating income, net ( 16,195 ) ( 2,732 ) ( 7,127 )

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Income (loss) before income taxes ( 7,852 ) 15,824 ( 4,060 )

Income tax (provision) benefit ( 2,933 ) ( 5,480 ) 9,341

Income tax provision ( 3,406 ) ( 2,933 ) ( 5,480 )

Net income (loss) $ ( 11,258 ) $ 12,891 $ ( 9,540 )

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Currency translation adjustments ( 9,548 ) 8,957 ( 12,977 )

Release of currency translation adjustments on liquidation of an international operation — — 9,320

Other — 67 78

Total other comprehensive income (loss) ( 9,548 ) 8,957 ( 12,910 )

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Balance, December 31, 2021 $ 739 $ 1,105,135 $ 281,567 $ ( 66,031 ) $ ( 625,584 ) $ 695,826

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

Net loss — — ( 9,540 ) — — ( 9,540 )

1 unchanged sentence

Currency translation adjustment on intercompany advances — — — 2,281 — 2,281

Release of currency translation adjustments on liquidation of an international operation — — — 9,320 — 9,320

Other comprehensive income — — — 67 — 67

Issuance of common stock in connection with settlement of disputes with seller of GEODynamics, Inc.

19 10,313 — — — 10,332

Stock-based compensation expense 8 6,844 — — — 6,852

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Balance, December 31, 2022 766 1,122,292 272,027 ( 78,941 ) ( 626,586 ) 689,558

Net loss — — ( 9,540 ) — — ( 9,540 )

— — 12,891 — — 12,891

Currency translation adjustment (excluding intercompany advances) — — — 6,822 — 6,822

Currency translation adjustment on intercompany advances — — — 2,135 — 2,135

Other comprehensive income — — — 67 — 67

Issuance of common stock in connection with settlement of disputes with seller of GEODynamics, Inc.

19 10,313 — — — 10,332

Stock-based compensation expense 6 6,948 — — — 6,954

Surrender of stock to settle taxes on restricted stock awards — — — — ( 1,948 ) ( 1,948 )

Stock repurchases

— — — — ( 6,867 ) ( 6,867 )

Balance, December 31, 2023 772 1,129,240 284,918 ( 69,984 ) ( 635,401 ) 709,545

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Depreciation and amortization expense 54,708 60,778 67,334

Impairments of inventories — — 3,581

Impairments of fixed and lease assets — — 4,166

Impairment of goodwill

Impairments of intangible assets

Impairments of operating lease assets

Stock-based compensation expense 8,723 6,954 6,852

Amortization of deferred financing costs 1,497 1,798 1,886

Deferred income tax provision 226 2,020 ( 8,639 )

Deferred income tax provision (benefit) ( 2,356 ) 226 2,020

Gains on disposals of assets ( 18,333 ) ( 4,075 ) ( 2,856 )

1 unchanged sentence

( 515 ) — ( 176 )

Release of foreign currency translation adjustments on liquidation of an international operation — — 9,320

Other, net ( 452 ) ( 1,001 ) 2,066

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Proceeds from disposition of property and equipment

5,594 5,253 5,877

Proceeds from disposition of assets held for sale

Acquisition of business, net of cash acquired

— — ( 8,125 )

Other, net ( 454 ) ( 186 ) ( 211 )

Net cash flows used in investing activities ( 25,586 ) ( 22,725 ) ( 6,626 )

Net cash flows provided by (used in) investing activities 2,702 ( 25,586 ) ( 22,725 )

Cash flows from financing activities:

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Revolving credit facility repayments ( 22,739 ) ( 35,816 ) ( 10,090 )

Purchases of 4.75 % convertible senior notes

( 10,846 ) — —

Repayment of 1.50 % convertible senior notes

— ( 17,315 ) ( 8,450 )

Issuance of 4.75 % convertible senior notes

Payment of promissory note to seller of GEODynamics, Inc.

3 unchanged sentences

Purchases of treasury stock

( 14,212 ) ( 6,867 ) —

Shares added to treasury stock as a result of net share settlements

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The presentation of certain prior-year amounts in the Notes to the Company’s Consolidated Financial Statements have been conformed to the current-year presentation.

The Company operates through three business segments – Offshore/Manufactured Products, Well Site Services and Downhole Technologies – and, through its subsidiaries, is a leading provider of specialty products and services to oil and gas and industrial companies around the world.

The Company operates through three business segments – Offshore Manufactured Products, Completion and Production Services (previously referred to as Well Site Services) and Downhole Technologies – and, through its subsidiaries, is a leading provider of specialty products and services to oil and gas and industrial companies around the world.

The Company operates in a substantial number of the world’s active resource intensive regions, including:

onshore and offshore United States, West Africa, the North Sea, the Middle East, South America and Southeast and Central Asia.

In the first quarter of 2024, certain short-cycle, consumable product operations historically reported within the Offshore Manufactured Products segment (legacy frac plug and elastomer products) were integrated into the Downhole Technologies segment to better align with the underlying activity demand drivers and current segment management structure, as well as provide for additional operational synergies.

Historical segment financial data and disaggregated revenue information as of and for the years ended December 31, 2023 and 2022, as presented in Note 14, “Segments and Related Information,” were conformed with the 2024 segment presentation.

Additionally, following the sale of its remaining U.S.

land-based drilling rigs and the exit of the flowback and well testing service offering in the third quarter of 2024, the Company’s Well Site Services segment name was changed to the Completion and Production Services segment.

Summary of Significant Accounting Policies

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A reserve for excess and/or obsolete inventory is maintained based on the age, turnover, condition, expected near-term utility and market pricing of the goods.

Property, Plant, and Equipment

Property, plant, and equipment are recorded at cost, or at estimated fair market value at acquisition date if acquired in a business combination, and depreciation is computed, for assets owned or recorded under a finance lease, using the straight-line method over the estimated useful lives of the assets, after allowing for estimated salvage value where applicable.

Leasehold improvements are capitalized and amortized over the lesser of the life of the lease or the estimated useful life of the asset.

OIL STATES INTERNATIONAL, INC.

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NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

Property, Plant, and Equipment

Leasehold improvements are capitalized and amortized over the lesser of the life of the lease or the estimated useful life of the asset.

Expenditures for repairs and maintenance are charged to expense when incurred.

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In accordance with current accounting guidance, the Company does not amortize goodwill, but rather assesses goodwill for impairment annually (as of December 1) and when an event occurs or circumstances change that indicate the carrying amounts may not be recoverable.

Following the goodwill impairments recognized by the Company in 2020, only the Offshore/Manufactured Products segment has remaining goodwill.

The Company’s December 1, 2023 qualitative assessment identified no events or changes in circumstances which indicated that, more likely than not, the $ 79.9 million carrying value of goodwill on the balance sheet of the Offshore/Manufactured Products segment was recoverable.

The Company’s December 1, 2022 and 2021 quantitative assessments of goodwill for impairment indicated that the fair value of the Offshore/Manufactured Products reporting unit was greater than its carrying amount at each date and no impairments were required in either period.

When a quantitative assessment of goodwill is necessary, each reporting unit with goodwill on its balance sheet is assessed separately using relevant events and circumstances.

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If the carrying amount of a reporting unit exceeds its fair value, goodwill is considered impaired and an impairment loss is recorded based on the excess of the carrying amount over the reporting unit’s fair value.

In connection with the first quarter 2024 realignment of the composition of two of its reportable segments discussed in Note 1, “Organization and Basis of Presentation,” goodwill of $ 10.0 million was reassigned from the Offshore Manufactured Products segment to the Downhole Technologies segment based on estimated relative fair values.

The Company performed an interim quantitative assessment of goodwill recorded within the Offshore Manufactured Products segment as of February 29, 2024 (prior to realignment) which indicated that the fair value of the reporting unit exceeded its carrying value.

The Company also performed an interim quantitative assessment of goodwill transferred to the Downhole Technologies segment (subsequent to the realignment).

This interim assessment indicated that the fair value of the reporting unit was less than its carrying amount and the Company concluded that goodwill reassigned to the Downhole Technologies business was fully impaired.

The Company therefore recognized a non-cash goodwill impairment charge totaling $ 10.0 million in the first quarter of 2024.

This impairment charge did not impact the Company’s liquidity position, debt covenants or cash flows.

Management used a combination of valuation methodologies including the income approach and guideline public company comparables.

The fair values of each of the Company’s reporting units were determined using significant unobservable inputs (Level 3 fair value measurements).

The income approach estimates fair value by discounting the Company’s forecasts of future cash flows by a discount rate (expected return) that a market participant is expected to require on its investment.

Significant assumptions and estimates used in the income approach include, among others, estimated future net annual cash flows and discount rates for each reporting unit, current and anticipated market conditions, estimated growth rates and historical data.

These estimates rely upon significant management judgment.

Following the goodwill impairments recognized by the Company in 2020 and 2024, only the Offshore Manufactured Products segment has remaining goodwill.

The Company’s December 1, 2024 qualitative assessment identified no events or changes in circumstances which indicated that, more likely than not, the $ 70 million carrying value of goodwill on the balance sheet of the Offshore Manufactured Products segment was not recoverable.

The Company’s December 1, 2023 and 2022

OIL STATES INTERNATIONAL, INC.

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NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

assessments of goodwill for impairment indicated that the fair value of the Offshore Manufactured Products reporting unit was greater than its carrying amount at each date and no impairments were required in either period.

Long-Lived Assets

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The fair value of the asset group is based on appraised values, prices of similar assets (if available), or discounted cash flows.

As further discussed in Note 5, “Details of Selected Balance Sheet Accounts,” and Note 8, “Operating Leases,” the Company recognized non-cash asset impairment charges totaling $ 4.2 million in 2021 to reduce the carrying value of certain equipment and facilities (owned and leased) to their estimated realizable value.

No additional impairment losses were recorded during the periods presented.

As further discussed in Note 4, “Asset Impairments and Other Charges and Credits” and Note 8, “Operating Leases,” the Company recognized non-cash operating lease impairments, associated with the closure of certain facilities, totaling $ 3.8 million in 2024 to reduce the carrying value of the related operating lease assets to their estimated realizable value.

Additionally, the Company recognized non-cash intangible impairment charges of $ 10.8 million associated with the exit of a service offering.

During 2024, events and circumstances also indicated that the long-lived tangible and intangible assets of an asset group within the Downhole Technologies segment (totaling $ 147 million as of December 31, 2024) may not be recoverable.

Management assessed the carrying value of the long-lived assets of this group by comparing its estimates of undiscounted future cash flows to the carrying value of the assets.

This assessment indicated that the asset group’s long-lived assets were recoverable.

Accordingly, no additional long-lived asset impairment losses were recorded in 2024.

However, management actions, competitive market conditions or industry cyclicality and downturns may result in future changes to the Company’s estimates of projected cash flows, or their timing, and could potentially cause future impairment to the values of its long-lived assets, including finite-lived intangible assets.

The Company leases a portion of its facilities, office space, equipment and vehicles under contracts which provide it with the right to control identified assets.

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Therefore, the Company’s incremental borrowing rate, based on available information at the lease commencement date, is used to determine the present value of lease payments.

OIL STATES INTERNATIONAL, INC.

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NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

Most of the Company’s operating leases include one or more options to renew, with renewal terms that can extend the lease term from one to 20 years.

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Research and development expenses totaled $ 5.2 million, $ 4.5 million and $ 3.5 million in 2024, 2023 and 2022, respectively, and are reported within cost of revenues in the accompanying consolidated statements of operations.

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NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

Foreign Currency and Other Comprehensive Loss

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The majority of the Company’s revenue recognized over time is for services provided under short-term contracts, with revenue recognized as the customer receives and consumes the services.

In addition, the Company manufactures certain products to individual customer

OIL STATES INTERNATIONAL, INC.

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NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

specifications under short-term contracts for which control passes to the customer as the performance obligations are fulfilled and for which revenue is recognized over time.

In addition, the Company manufactures certain products to individual customer specifications under short-term contracts for which control passes to the customer as the performance obligations are fulfilled and for which revenue is recognized over time.

For significant project-related contracts involving custom engineered products within the Offshore Manufactured Products segment (also referred to as “project-driven products”), revenues are typically recognized over time using an input measure such as the percentage of costs incurred to date relative to total estimated costs at completion for each contract (cost-to-cost method).

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Changes in assumptions that may affect future project costs and margins include production efficiencies, the complexity of the work to be performed and the availability and costs of labor, materials and subcomponents.

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NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

As a significant change in one or more of these estimates could affect the profitability of the Company’s contracts, contract-related estimates are reviewed regularly.

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Under this method, deferred income taxes are recorded based upon the differences between the financial reporting and tax bases of assets and liabilities and are measured using the enacted tax rates and laws in effect at the time the underlying assets or liabilities are recovered or settled.

The effect on deferred taxes of a change in tax rates is recognized in the period that includes the enactment date.

As of December 31, 2024, the Company’s total investment in foreign subsidiaries (except for its Canadian and Cyprus operations) is considered to be permanently reinvested outside of the United States.

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During 2024, 2023 and 2022, the Company recorded adjustments to valuation allowances primarily with respect to foreign and U.S.

state net operating loss (“NOL”) carryforwards as well as U.S.

foreign tax credit carryforwards.

state net operating loss (“NOL”) carryforwards, U.S.

tax credit carryforwards and other deferred tax assets.

The calculation of tax liabilities involves assessing uncertainties regarding the application of complex tax regulations.

Uncertain tax positions are accounted for using a recognition threshold and a measurement attribute for the financial statement recognition and measurement of tax positions taken or expected to be taken in a tax return.

For those benefits to be recognized,

OIL STATES INTERNATIONAL, INC.

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NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

a tax position must be more-likely-than-not to be sustained upon examination by taxing authorities.

If management ultimately determines that payment of these amounts is unnecessary, the liability is reversed and a tax benefit is recognized during the period in which management determines that the liability is no longer necessary.

An additional charge is recorded as a provision for taxes in the period in which management determines that the recorded tax liability is less than the expected ultimate assessment.

The Company recognizes the effect of income tax positions only if those positions are more-likely-than-not to be sustained upon examination by taxing authorities.

Recognized income tax positions are measured as the largest amount that is greater than 50 percent likely to be realized.

Changes in recognition or measurement are reflected in the period in which the change in judgment occurs.

Receivables and Concentration of Credit Risk

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The Company evaluates the credit-worthiness of significant customers’ financial condition and, generally, the Company does not require significant collateral from its customers.

OIL STATES INTERNATIONAL, INC.

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NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

Allowances for Doubtful Accounts

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Performance-based award expense, and ultimate vesting, is recognized in an amount that depends on the Company’s probable achievement of specified performance objectives.

OIL STATES INTERNATIONAL, INC.

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NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

Some product sales in the Offshore/Manufactured Products segment are sold with an assurance warranty, generally ranging from 12 to 18 months.

Parts and labor are covered under the terms of the warranty agreement.

Warranty provisions are estimated based upon historical experience by product, configuration and geographic region.

During the ordinary course of business, the Company also provides standby letters of credit or other guarantee instruments to certain parties as required for certain transactions initiated by either the Company or its subsidiaries.

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Other claims or liabilities have been estimated based on their fair value or management’s experience in such matters and, when appropriate, the advice of outside counsel or other outside experts.

Upon the ultimate resolution of these uncertainties, future reported financial results will be impacted by the difference between the accruals and actual amounts paid in settlement.

Upon the ultimate resolution of these uncertainties, future reported financial results will be impacted by the difference between the accruals and actual amounts paid

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in settlement.

Examples of areas with important estimates of future liabilities include duties, income taxes, litigation, insurance claims and contractual claims and obligations.

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Management believes that the impact of recently issued standards, which are not yet effective, will not have a material impact on the Company’s Consolidated Financial Statements upon adoption.

In August 2020, the FASB issued updated guidance to simplify the accounting for convertible instruments and contracts in an entity’s own equity (referred to as “ASU 2020-06”).

This guidance eliminated the requirement that the carrying value of convertible debt instruments, such as the Company’s 1.50 % convertible senior notes due 2023 (the “2023 Notes”), be allocated between debt and equity components.

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 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 %.

As further discussed in Note 7, “Long-term Debt,” the 2023 Notes matured and were repaid in full on February 15, 2023.

The Company has expanded its reportable segment disclosures provided in Note 14, “Segments and Related Information,” in accordance with the FASB guidance (“Accounting Standards Update 2023-07”) issued in November 2023.

On April 14, 2022, the Company acquired E-Flow Control Holdings Limited (“E-Flow”), a U.K.-based global provider of fully integrated handling, control, monitoring and instrumentation solutions.

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E-Flow’s results of operations have been included in the Company’s consolidated financial statements and have been reported within the Offshore Manufactured Products segment subsequent to the closing of the acquisition.

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NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

Asset Impairments and Other Charges and Benefits

During 2023, the Offshore/Manufactured Products segment recognized facility consolidation charges totaling $ 2.5 million in connection with the ongoing consolidation and relocation of certain manufacturing and service facilities and the relocation of related equipment, which is included in “Other operating income, net.” Additionally, during 2023, the Well Site Services segment recognized $ 0.6 million in costs associated with the defense of certain patents, which are included in “Selling, general and administrative expense.”

In August 2022, the Offshore/Manufactured Products segment settled outstanding litigation against certain service providers in exchange for cash totaling $ 6.9 million.

In connection with this settlement, the Company recognized a gain of $ 6.1 million (net of legal and other related costs) in 2022, which is included in “other operating income, net.”

During 2021, the Company continued its restructuring efforts which began in 2020 due to the COVID-19 pandemic, closing facilities in the United States and assessing 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 Well Site Services Downhole Technologies Corporate Pre-tax Total Tax After-tax Total

Asset Impairments and Other Charges and Credits

In 2023, the Company implemented initiatives to reduce future costs, which continued throughout 2024.

These management actions included the consolidation, relocation and exit of certain manufacturing and service locations, the exit of certain service offerings, reductions in the Company’s workforce in the United States as well as the realignment of operations within two of the Company’s reportable segments.

The Company has also incurred legal and other related costs to enforce certain patents related to its proprietary technologies.

As a result of these events, actions and assessments, the Company recorded the following charges and credits in 2024 (in thousands):

Offshore Manufactured Products Completion and Production Services Downhole Technologies Corporate Total

Impairments of:

Fixed assets (Note 5)

$ — $ — $ 10,000 $ — $ 10,000

Operating lease assets (Note 8)

Intangible assets

— 10,787 — — 10,787

Inventories (Note 5)

Operating lease assets

— 3,280 487 — 3,767

Severance and restructuring costs (1)

Facility consolidation and exit, and other charges

3,364 7,442 123 34 10,963

Release of foreign currency translation adjustments on liquidation of an international operation

Patent defense costs — 2,753 — — 2,753

Gains on disposition of property held for sale

— — — ( 15,316 ) ( 15,316 )

Gains on extinguishment of debt

— — — ( 515 ) ( 515 )

(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.

Additionally, during 2021, the Company recognized $ 8.8 million 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 employee retention credit program.

Pre-tax totals

$ 3,364 $ 24,262 $ 10,610 $ ( 15,797 ) 22,439

Income tax provision

After-tax total

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During 2024, in response to further reductions in customer activity in the United States, management made strategic decisions to exit its underperforming flowback and well testing service offering and sell the related equipment and inventory.

Management also decided to exit eight leased facilities.

As a result of these events and actions, the Company recorded non-cash intangible asset (customer relationships and tradenames) impairment charges of $ 10.8 million associated with the exit of this service offering and operating lease impairments of $ 3.8 million related to facility closures.

Additionally, the equipment and inventory of the exited service offering in the Completion and Production Services segment was reclassified to assets held for sale, and transferred from property, plant and equipment and inventory to prepaid and other current assets.

The carrying value of assets held for sale totaled $ 6.5 million as of December 31, 2024.

During 2023, the Offshore Manufactured Products segment recognized facility consolidation charges totaling $ 2.5 million in connection with the ongoing consolidation and relocation of certain manufacturing and service facilities and the relocation of related equipment, which is included in “Other operating income, net.” Additionally, during 2023, the Completion and Production Services segment recognized $ 0.6 million in costs associated with the defense of certain patents, which are included in “Selling, general and administrative expense.”

In 2022, the Offshore Manufactured Products segment settled outstanding litigation against certain service providers in exchange for cash totaling $ 6.9 million.

In connection with this settlement, the Company recognized a gain of $ 6.1 million (net of legal and other related costs) in 2022, which is included in “other operating income, net.”

Details of Selected Balance Sheet Accounts

Additional information regarding selected balance sheet accounts as of December 31, 2023 and December 31, 2022 is presented below (in thousands):

Additional information regarding selected balance sheet accounts as of December 31, 2024 and 2023 is presented below (in thousands):

2024 December 31,

8 unchanged sentences

Allowance for doubtful accounts as a percentage of total accounts receivable 1 % 2 %

OIL STATES INTERNATIONAL, INC.

AND SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

2024 December 31,

Deferred revenue (contract liabilities) $ 52,399 $ 36,757

As of December 31, 2023, accounts receivable, net in the United States, the United Kingdom and Singapore represented 66 %, 12 % and 11 %, respectively, of the total.

As of December 31, 2024, accounts receivable, net in the United States and the United Kingdom represented 61 % and 19 %, respectively, of the total.

No other country or single customer accounted for more than 10% of the Company’s total accounts receivable as of December 31, 2024.

4 unchanged sentences

Contract assets are transferred to unbilled or trade receivables when the right to consideration becomes unconditional.

Contract liabilities primarily relate to advance consideration received from customers (i.e.

Contract liabilities primarily relate to advance consideration from customers (i.e.

milestone payments) for contracts for project-driven products as well as others which require significant advance investment in materials.

Consistent with industry practice, the Company classifies assets and liabilities related to long-term contracts as current, even though some of these amounts may not be realized within one year.

Consistent with industry practice, the Company classifies

OIL STATES INTERNATIONAL, INC.

AND SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

assets and liabilities related to long-term contracts as current, even though some of these amounts may not be realized within one year.

All contracts are reported on the consolidated balance sheets in a net asset (contract asset) or liability (deferred revenue) position on a contract-by-contract basis at the end of each reporting period.

In the normal course of business, the Company also receives advance consideration from customers on many other short-term, smaller product and service contracts which is deferred and recognized as revenue once the related performance obligation is satisfied.

For the year ended December 31, 2023, the $ 4.1 million net increase in contract assets was primarily attributable to $ 44.3 million in revenue recognized during the period, which was partially offset by $ 40.2 million transferred to accounts receivable.

Deferred revenue (contract liabilities) decreased by $ 8.0 million in 2023, primarily reflecting the recognition of $ 17.6 million of revenue that was deferred at the beginning of the period, partially offset by $ 9.3 million in new customer billings which were not recognized as revenue during the period.

For the year ended December 31, 2022, the $ 2.8 million net increase in contract assets was primarily attributable to $ 34.8 million in revenue recognized during the year, which was partially offset by $ 31.7 million transferred to accounts receivable.

For the year ended December 31, 2024, the $ 6.6 million net decrease in contract assets was primarily attributable to $ 45.3 million transferred to accounts receivable, which was partially offset by $ 38.5 million in revenue recognized during the period.

Deferred revenue (contract liabilities) increased by $ 15.6 million in 2024, primarily reflecting $ 32.5 million in new customer billings which were not recognized as revenue during the year, partially offset by the recognition of $ 16.5 million of revenue that was deferred at the beginning of the period.

For the year ended December 31, 2023, the $ 4.1 million net increase in contract assets was primarily attributable to $ 44.3 million in revenue recognized during the year, which was partially offset by $ 40.2 million transferred to accounts receivable.

2024 December 31,

6 unchanged sentences

$ 214,836 $ 202,027

During 2021, the Company recorded impairment charges totaling $ 3.6 million to reduce the carrying value of inventories to their estimated net realizable value based primarily on management’s decision to exit certain product and service offerings.

OIL STATES INTERNATIONAL, INC.

AND SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

Useful Life (years) December 31,

11 unchanged sentences

$ 266,871 $ 280,389

During 2024, certain equipment inventory in the Completion and Production Services segment was reclassified as held for sale assets, and transferred from property, plant and equipment, and inventory, to prepaid and other current assets.

The carrying value of these assets totaled $ 6.5 million as of December 31, 2024.

During 2023, certain facilities in the Offshore Manufactured Products segment were reclassified as held for sale assets, and transferred from property, plant and equipment to prepaid and other current assets.

These facilities were sold in 2024.

The carrying value of these facilities totaled $ 17.2 million as of December 31, 2023.

Additionally, the Company sold certain idle facilities and equipment and retired other fully-depreciated completion-related equipment during 2023.

Additionally, the Company sold certain idle facilities and equipment and retired other fully-depreciated completion-related equipment during 2024 and 2023.

OIL STATES INTERNATIONAL, INC.

AND SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

For the years ended December 31, 2024, 2023 and 2022, depreciation expense was $ 38.3 million, $ 43.6 million and $ 47.0 million, respectively.

During 2021, the Well Site Services segment recognized non-cash impairment charges of $ 1.4 million to reduce the carrying value of certain of the segment’s fixed assets to their estimated realizable value.

2024 December 31,

14 unchanged sentences

$ 36,861 $ 44,227

OIL STATES INTERNATIONAL, INC.

AND SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

Goodwill and Other Intangible Assets

Changes in the carrying amount of goodwill recorded within the Offshore/Manufactured Products segment for the years ended December 31, 2023 and 2022 were as follows (in thousands):

Changes in the carrying amount of goodwill, by operating segment, for the years ended December 31, 2024 and 2023 were as follows (in thousands):

Offshore Manufactured

Downhole Technologies Total

Balance as of December 31, 2022 (1)

Goodwill acquired 4,146

$ 79,282 — 79,282

Foreign currency translation 585 — 585

Balance as of December 31, 2023 (1)

79,867 — 79,867

Goodwill associated with transferred operations (2)

( 10,000 ) 10,000 —

Impairment of goodwill (2)

— ( 10,000 ) ( 10,000 )

Foreign currency translation ( 158 ) — ( 158 )

1 unchanged sentence

$ 69,709 $ — $ 69,709

(1) Net of accumulated impairment losses of $ 86.5 million.

____________________

(1) Net of accumulated impairment losses of $ 96.5 million as of December 31, 2024 and $ 86.5 million as of December 31, 2023 and 2022.

(2) For further discussion, see Note 2 “Summary of Significant Accounting Policies.”

OIL STATES INTERNATIONAL, INC.

AND SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

Other Intangible Assets

10 unchanged sentences

Amortization expense was $ 16.4 million, $ 17.2 million and $ 20.3 million in the years ended December 31, 2024, 2023 and 2022, respectively.

The weighted average remaining amortization period for all intangible assets, other than goodwill, was 10.0 years as of December 31, 2023 and 10.6 years as of December 31, 2022.

The weighted average remaining amortization period for finite-lived intangible assets was 9.5 years as of December 31, 2024 and 10.0 years as of December 31, 2023.

Amortization expense is expected to total approximately $ 15 million in 2025 through 2027, $ 14 million in 2028 and $ 13 million in 2029.

As of December 31, 2023 and 2022, no impairment of other intangible assets was required.

As further discussed in Note 4, “Asset Impairments and Other Charges and Credits,” during 2024 the Company made a strategic decision to exit an underperforming service offering within the Completion and Production Services segment.

As a result of this action, the segment recognized non-cash impairment charges of $ 9.1 million related to customer relationships and $ 1.7 million related to tradenames.

In 2023, no impairment of other intangible assets was required.

Long-term Debt

As of December 31, 2023 and December 31, 2022, long-term debt consisted of the following (in thousands):

As of December 31, 2024 and 2023, long-term debt consisted of the following (in thousands):

2024 December 31,

2 unchanged sentences

122,505 133,037

2023 Notes (3)

Other debt and finance lease obligations 2,782 3,092

4 unchanged sentences

(1) Unamortized deferred financing costs of $ 1.6 million and $ 1.1 million as of December 31, 2024 and December 31, 2023, respectively, are presented in other noncurrent assets.

(2) The outstanding principal amount of the 2026 Notes was $ 135.0 million as of December 31, 2023 and December 31, 2022.

(3) The 2023 Notes matured and were repaid in full on February 15, 2023.

(2) The outstanding principal amount of the 2026 Notes was $ 123.5 million and $ 135.0 million as of December 31, 2024 and December 31, 2023, respectively .

Scheduled maturities of total debt as of December 31, 2024, are as follows (in thousands):

Thereafter 252

OIL STATES INTERNATIONAL, INC.

1 unchanged sentence

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

Scheduled maturities of total debt as of December 31, 2023, are as follows (in thousands):

Thereafter 252

Revolving Credit Facility

On February 10, 2021, the Company entered into a senior secured credit facility, which provides for a $ 125.0 million asset-based revolving credit facility (as amended, the “ABL Facility”), under which credit availability is subject to a borrowing base calculation.

The Company has a senior secured credit facility, which provides for a $ 125.0 million asset-based revolving credit facility (as amended, the “ABL Facility”), under which credit availability is subject to a borrowing base calculation.

The ABL Facility is governed by a credit agreement, as amended, with Wells Fargo Bank, National Association, as administrative agent and the lenders and other financial institutions from time to time party thereto (as amended, the “ABL Agreement”).

On February 16, 2024, the Company amended the ABL Facility to extend the maturity date to February 16, 2028 with a springing maturity 91 days prior to the maturity of any outstanding indebtedness with a principal amount in excess of $ 17.5 million.

In February 2024, the Company amended the ABL Facility to extend the maturity date to February 16, 2028, with a springing maturity 91 days prior to the maturity of any outstanding indebtedness with a principal amount in excess of $ 17.5 million.

The ABL Agreement provides funding based on a borrowing base calculation that includes eligible U.S.

1 unchanged sentence

Borrowings under the ABL Agreement are secured by a pledge of substantially all of the Company’s domestic assets (other than real property) and the stock of certain foreign subsidiaries.

Since December 13, 2022, borrowings under the ABL Agreement bear interest at a rate equal to the Secured Overnight Financing Rate (subject to a floor rate of 0 %) plus a margin of 2.75 % to 3.25 %, or at a base rate plus a margin of 1.75 % to 2.25 %, in each case based on average borrowing availability.

Borrowings under the ABL Agreement bear interest at a rate equal to the Secured Overnight Financing Rate (subject to a floor rate of 0 %) plus a margin of 2.75 % to 3.25 %, or at a base rate plus a margin of 1.75 % to 2.25 %, in each case based on average borrowing availability.

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.

8 unchanged sentences

The Company issued $ 135.0 million aggregate principal amount of its 4.75 % convertible senior notes due 2026 (the “2026 Notes”) pursuant to an indenture, dated as of March 19, 2021 (the “2026 Indenture”), between the Company and Computershare Trust Company, National Association, as successor trustee.

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.

The following table provides a summary of the Company's purchases of outstanding 2026 Notes during the year ended December 31, 2024, with non-cash gains reported within other income, net (in thousands):

Principal Amount Carrying Value of Liability Cash Paid Non-cash

Pre-tax Gains Recognized

Year Ended December 31, 2024

$ 11,500 $ 11,361 $ 10,846 $ 515

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

The conversion rate, and thus the conversion price, may be adjusted under certain circumstances as described in the 2026 Indenture.

The Company’s intent is to repay the principal amount of the 2026 Notes in cash and settle the conversion feature (if any) in shares of the Company’s

OIL STATES INTERNATIONAL, INC.

1 unchanged sentence

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

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

The conversion rate, and thus the conversion price, may be adjusted under certain circumstances as described in the 2026 Indenture.

The Company’s intent is to repay the principal amount of the 2026 Notes in cash and settle the conversion feature (if any) in shares of the Company’s common stock.

common stock.

As of December 31, 2024, none of the conditions allowing holders of the 2026 Notes to convert, or requiring us to repurchase the 2026 Notes, had been met.

On January 30, 2018, the Company issued $ 200.0 million aggregate principal amount of its 1.50 % convertible senior notes due 2023 (the "2023 Notes") pursuant to an indenture, dated as of January 30, 2018.

The 2023 Notes bore interest at a rate of 1.50 % per year, and matured and were repaid in full on February 15, 2023.

The following table provides a summary of the Company's purchases of outstanding 2023 Notes during the years ended December 31, 2023, 2022 and 2021, with non-cash gains reported within other income, net (in thousands):

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

Year Ended December 31,

2023 $ 17,315 $ 17,315 $ 17,315 $ —

2022 8,654 8,626 8,450 176

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

On January 30, 2018, the Company issued $ 200.0 million aggregate principal amount of its 1.50 % convertible senior notes due 2023 (the "2023 Notes").

The 2023 Notes bore interest at a rate of 1.50 % per year, and the outstanding principal amount of $ 17.3 million matured and was repaid in full on February 15, 2023.

Promissory Note

14 unchanged sentences

Total operating lease expense $ 12,747 $ 13,333 $ 13,043

During 2024, the Completion and Production Services and Downhole Technologies segments recognized non-cash operating lease asset impairment charges of $ 3.3 million and $ 0.5 million, respectively, associated with the closure of certain leased facilities.

For further discussion, see Note 4, “Asset Impairments and Other Charges and Credits.”

OIL STATES INTERNATIONAL, INC.

1 unchanged sentence

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

During 2021, the Well Site Services segment recognized non-cash operating lease asset impairment charges of $ 2.8 million associated with the closure of certain leased facilities.

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

Operating Lease Liabilities

10 unchanged sentences

Common and Preferred Stock

The following table provides details with respect to the changes to the number of shares of common stock, $ 0.01 par value, outstanding during 2023 (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 2024 and 2023 (in thousands):

Issued Treasury Stock Outstanding

Shares of common stock outstanding – December 31, 2022 76,588 12,684 63,904

Issuance of common stock to seller of GEODynamics, Inc.

1,910 — 1,910

Restricted stock awards, net of forfeitures 631 — 631

Shares withheld for taxes on vesting of stock awards — 206 ( 206 )

Purchases of treasury stock — 1,002 ( 1,002 )

Shares of common stock outstanding – December 31, 2023 77,219 13,892 63,327

3 unchanged sentences

Shares of common stock outstanding – December 31, 2024 78,606 17,113 61,493

As of December 31, 2023 and December 31, 2022, the Company had 25,000,000 shares of preferred stock, $ 0.01 par value, authorized, with no shares issued or outstanding.

As of December 31, 2024 and 2023, the Company had 25,000,000 shares of preferred stock, $ 0.01 par value, authorized, with no shares issued or outstanding.

On February 16, 2023, the Company’s Board of Directors authorized $ 25.0 million for the repurchase of the Company’s common stock, par value $ 0.01 per share, through February 2025.

Over the balance of 2023, the Company repurchased 1,001,753 shares of common stock under the program at a total cost of $ 6.9 million.

The amount remaining under the Company’s share repurchase authorization as of December 31, 2023 was $ 18.1 million.

On October 24, 2024, the Company’s Board of Directors terminated the Company’s existing common stock repurchase program and replaced it with a new $ 50.0 million common stock repurchase authorization, which expires in October 2026.

Subject to applicable securities laws, such purchases will be at such times and in such amounts as the Company deems appropriate.

During the year ended December 31, 2024, the Company purchased 2.8 million shares of common stock under the programs at a total cost of $ 14.2 million.

The amount remaining under the Company’s current share repurchase authorization as of December 31, 2024 was $ 41.3 million.

OIL STATES INTERNATIONAL, INC.

4 unchanged sentences

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

Accumulated other comprehensive loss decreased from $ 78.9 million at December 31, 2022 to $ 70.0 million at December 31, 2023.

Accumulated other comprehensive loss increased from $ 70.0 million at December 31, 2023 to $ 79.5 million at December 31, 2024.

For the years ended December 31, 2024 and 2023, currency translation adjustments recognized as a component of other comprehensive income (loss) were primarily attributable to the United Kingdom and Brazil.

During 2023, the exchange rates for the British pound and the Brazilian real strengthened by 6 % and 8 %, respectively, compared to the U.S.

dollar, contributing to other comprehensive income of $ 9.0 million.

During 2022, the exchange rate for the British pound weakened by 11 % compared to the U.S.

dollar while the Brazilian real strengthened by 6 % compared to the U.S.

During the year ended December 31, 2024, the exchange rates for the British pound and the Brazilian real weakened by 1 % and 22 %, respectively, compared to the U.S.

dollar, contributing to other comprehensive loss of $ 9.5 million.

During the year ended December 31, 2023, the exchange rates for the British pound and the Brazilian real strengthened by 6 % and 8 %, respectively, compared to the U.S.

dollar, contributing to other comprehensive income of $ 9.0 million.

Consolidated income (loss) before income taxes for the years ended December 31, 2024, 2023 and 2022 consisted of the following (in thousands):

3 unchanged sentences

Total $ ( 7,852 ) $ 15,824 $ ( 4,060 )

The 2021 foreign losses before income taxes included the reclassification of $ 9.3 million in historical currency translation adjustments upon the liquidation of an international operation, which were not deductible for income tax purposes.

Components of income tax provision (benefit) for the years ended December 31, 2023, 2022 and 2021 consisted of the following (in thousands):

Components of income tax provision for the years ended December 31, 2024, 2023 and 2022 consisted of the following (in thousands):

2024 2023 2022

7 unchanged sentences

( 2,356 ) 226 2,020

Total income tax provision (benefit) $ 2,933 $ 5,480 $ ( 9,341 )

Total income tax provision $ 3,406 $ 2,933 $ 5,480

OIL STATES INTERNATIONAL, INC.

2 unchanged sentences

A reconciliation of the U.S.

statutory income tax benefit to the total income tax provision (benefit) for the years ended December 31, 2023, 2022 and 2021 is as follows:

statutory income tax provision (benefit) to the total income tax provision for the years ended December 31, 2024, 2023 and 2022 is as follows:

2024 2023 2022

statutory income tax provision (benefit) $ ( 1,649 ) $ 3,323 $ ( 853 )

Impairment of goodwill

Effect of foreign income taxed at different rates 1,400 ( 425 ) 1,895

8 unchanged sentences

Non-deductible compensation 1,449 1,390 627

Other non-deductible expenses, net

( 516 ) 222 2,118

Release of foreign currency translation adjustments on liquidation of an international operation — — 1,957

Total income tax provision (benefit) $ 2,933 $ 5,480 $ ( 9,341 )

Total income tax provision $ 3,406 $ 2,933 $ 5,480

The significant items giving rise to the deferred tax assets and liabilities as of December 31, 2024 and 2023 are as follows (in thousands):

2 unchanged sentences

Net operating loss carryforwards 14,147 21,065

R&D credit carryforwards

Inventories 8,456 11,523

8 unchanged sentences

Deferred tax liabilities:

Tax over book depreciation ( 14,337 ) ( 21,077 )

Property, plant and equipment

( 8,895 ) ( 14,337 )

Intangible assets ( 21,009 ) ( 26,542 )

7 unchanged sentences

Net deferred tax liability $ ( 3,386 ) $ ( 5,506 )

The Company had $ 10.7 million of U.S.

federal NOL carryforwards as of December 31, 2023, which can be carried forward indefinitely.

The Company’s U.S.

state NOL carryforwards as of December 31, 2023 totaled $ 184.6 million, of which $ 8.6 million are attributable to the acquired GEODynamics operations and are subject to certain limitation provisions.

The Company had U.S.

state NOL carryforwards as of December 31, 2024 totaling $ 161.1 million, of which $ 8.9 million were attributable to the acquired GEODynamics operations and subject to certain limitation provisions.

As of December 31, 2024, the Company had NOL carryforwards related to certain of its international operations totaling $ 27.9 million, of which $ 7.4 million can be carried forward indefinitely.

5 unchanged sentences

As of December 31, 2024 and 2023, the Company’s foreign tax credit carryforwards totaled $ 3.4 million and $ 12.6 million, respectively.

During 2023, $ 5.0 million of the Company’s foreign tax credits expired, and the offsetting valuation allowances were reduced.

The remaining foreign tax credits will expire in varying amounts from 2024 to 2029.

During 2024 and 2023, $ 4.3 million and $ 5.0 million, respectively, of the Company’s foreign tax credits expired, and the offsetting valuation allowances were reduced.

The remaining foreign tax credits will expire, if unused, in varying amounts from 2025 to 2029.

As of December 31, 2024 and 2023, the Company had recorded valuation allowances of $ 3.4 million and $ 11.9 million, respectively, with respect to foreign tax credit carryforwards.

As of December 31, 2024 and 2023, the Company’s U.S.

research and development tax credit carryforwards totaled $ 3.9 million and $ 2.9 million, respectively, which will expire, if unused, between 2032 and 2044.

As of December 31, 2024, the Company had a valuation allowance of $ 2.0 million ( nil as of December 31, 2023) with respect to research and development tax credit carryforwards.

The Company files tax returns in the jurisdictions in which they are required.

28 unchanged sentences

Additionally, shares issuable upon conversion of the 2026 Notes were excluded due to, among other factors, the Company’s share price.

Long-Term Incentive Compensation

The Company measures the cost of employee services received in exchange for an award of equity instruments based on the grant-date fair value of the award.

The fair value of service-based restricted stock awards is determined by the quoted

OIL STATES INTERNATIONAL, INC.

1 unchanged sentence

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

market price of the Company’s common stock on the date of grant.

Long-Term Incentive Compensation

The Company measures the cost of employee services received in exchange for an award of equity instruments based on the grant-date fair value of the award.

The fair value of service-based restricted stock awards is determined by the quoted market price of the Company’s common stock on the date of grant.

The resulting cost, net of estimated forfeitures, is recognized over the period during which an employee is required to provide service in exchange for the awards, usually the vesting period.

18 unchanged sentences

____________________

(1) Reflects an adjustment to the number of shares issued in 2024 upon vesting of the 2021 performance-based stock awards.

(1) Reflects an adjustment to the number of shares issuable upon vesting of the 2022 performance-based stock awards.

The total fair value of restricted stock awards that vested in 2024, 2023 and 2022 was $ 4.9 million, $ 4.7 million and $ 5.5 million, respectively.

1 unchanged sentence

As of December 31, 2024, approximately 2.0 million shares were available for future grant under the Company’s Amended and Restated Equity Participation Plan.

Stock Options

No options were awarded or exercised in 2023, 2022 or 2021.

As of December 31, 2023, the Company had 158 thousand stock options outstanding and exercisable, with exercise prices ranging from $ 42.29 to $ 58.54 and a weighted-average contractual life of 7 months.

Long-Term Cash Incentive Awards

23 unchanged sentences

Segments and Related Information

The Company’s reportable segments represent strategic business units that offer different products and services.

They are managed separately as each business requires different technologies and marketing strategies.

Recent acquisitions, except for the acquisition of GEODynamics, have been direct extensions to existing business segments.

The Company’s three reportable segments represent strategic components that are managed separately as each business requires different technologies and marketing strategies.

The Company’s chief operating decision maker (“CODM”) is its President and Chief Executive Officer.

The CODM uses segment operating income (loss) to assess segment performance and enable decisions regarding strategic initiatives, capital investments and personnel across the three segments.

Accounting policies of the segments are the same as those described in the summary of significant accounting policies.

1 unchanged sentence

Driven principally by longer-term customer investments for offshore oil and natural gas projects, project-driven product revenues include flexible bearings, advanced connector systems, high-pressure riser systems, managed pressure drilling systems, deepwater mooring systems, cranes, subsea pipeline products and blow-out preventer stack integration.

Short-cycle products manufactured by the segment include valves, elastomers and other specialty products generally used in the land-based drilling and completion markets.

Other products manufactured and offered by the segment include a variety of products for use in industrial, military, alternative energy and other applications outside the oil and gas industry.

The segment also offers a broad line of complementary, value-added services including specialty welding, fabrication, cladding and machining services, offshore installation services, and inspection and repair services.

The Well Site Services segment provides a broad range of equipment and services that are used to drill for, establish and maintain the flow of oil and natural gas from a well throughout its life cycle.

In this segment, operations primarily include completion-focused equipment and services.

The segment provides solutions to its customers using its completion tools, drilling rigs and highly-trained personnel throughout its service offerings which include wireline support, frac stacks, isolation tools, downhole and extended reach activity, well testing and flowback operations, sand control and land drilling.

The Downhole Technologies segment provides oil and gas perforation systems and downhole tools in support of completion, intervention, wireline and well abandonment operations.

This segment designs, manufactures and markets its consumable engineered products to oilfield service as well as exploration and production companies, which are completing

The Completion and Production Services segment provides a broad range of equipment and services that are used to establish and maintain the flow of oil and natural gas from a well throughout its life cycle.

In this segment, operations primarily include completion-focused equipment and services and, to a much lesser extent, land drilling services in the United States (prior to the sale of its remaining drilling rigs in August 2024).

The segment provides solutions to its customers using its completion tools and highly-trained personnel throughout its service offerings which include wireline support, frac stacks, isolation tools, downhole and extended reach activity, and well testing and flowback operations (prior to the exit of the services offering in the third quarter of 2024).

OIL STATES INTERNATIONAL, INC.

1 unchanged sentence

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

complex wells with longer lateral lengths, increased frac stages and more perforation clusters to increase unconventional well productivity.

The Downhole Technologies segment primarily provides oil and gas perforation systems and downhole tools in support of completion, intervention, wireline and well abandonment operations.

This segment designs, manufactures and markets its consumable engineered products to oilfield service as well as exploration and production companies, which are completing complex wells with longer lateral lengths, increased frac stages and more perforation clusters to increase unconventional well productivity.

Corporate information includes corporate expenses, such as those related to corporate governance, stock-based compensation and other infrastructure support, as well as impacts from corporate-wide decisions for which individual operating units are not evaluated.

Financial information by business segment for each of the three years ended December 31, 2023, 2022 and 2021, is summarized in the following table (in thousands):

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

Financial information by operating segment for each of the three years ended December 31, 2024, 2023 and 2022, is summarized in the following tables (in thousands):

Year Ended December 31, 2024

Offshore Manufactured Products (1)

Completion and Production Services (2)

Downhole Technologies (3)

Corporate (4)

$ 397,900 $ 163,902 $ 130,786 $ — $ 692,588

Well Site Services (2)

Costs and expenses:

Cost of revenues (exclusive of depreciation and amortization expense presented below) 279,754 141,393 115,054 — 536,201

Selling, general and administrative expense 37,029 10,813 9,427 37,740 95,009

Depreciation and amortization expense 15,205 22,143 16,808 552 54,708

Impairment of goodwill — — 10,000 — 10,000

Impairments of intangible assets — 10,787 — — 10,787

Impairments of operating lease assets — 3,280 487 — 3,767

Other operating (income) loss, net

633 ( 1,289 ) ( 86 ) ( 15,453 ) ( 16,195 )

Downhole Technologies (3)

332,621 187,127 151,690 22,839 694,277

Corporate — 636 ( 41,132 ) 468 54,782

Total $ 782,283 $ 60,778 $ 23,164 $ 30,653 $ 1,046,486

Offshore/Manufactured Products (4)

Operating income (loss) $ 65,279 $ ( 23,225 ) $ ( 20,904 ) $ ( 22,839 ) $ ( 1,689 )

Capital expenditures

$ 18,428 $ 17,920 $ 1,140 $ 20 $ 37,508

Well Site Services 231,189 28,564 4,865 12,963 206,632

Downhole Technologies 124,794 17,628 ( 6,669 ) 1,271 255,550

Corporate — 691 ( 40,559 ) 175 45,441

Total $ 737,706 $ 67,334 $ 2,905 $ 20,266 $ 1,064,392

Offshore/Manufactured Products $ 298,729 $ 22,190 $ 15,447 $ 4,628 $ 541,346

Well Site Services (5)

Total assets (as of December 31)

$ 510,374 $ 152,485 $ 265,240 $ 77,009 $ 1,005,108

________________

(1) Operating income included $ 3.4 million of facility consolidation and other charges.

(2) Operating loss included $ 24.3 million of asset impairment, facility consolidation and exit, patent defense and other charges

(3) Operating loss included $ 10.6 million of asset impairment and other charges

(4) Operating loss included a net gain of $ 15.3 million associated with the sale of a previously idled facility.

OIL STATES INTERNATIONAL, INC.

AND SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

Year Ended December 31, 2023

Offshore Manufactured Products (1)

Completion and Production Services (2)

Downhole Technologies (3)

$ 381,711 $ 242,633 $ 157,939 $ — $ 782,283

Corporate — 808 ( 32,258 ) 1,011 76,060

Total $ 573,161 $ 80,741 $ ( 64,792 ) $ 17,517 $ 1,085,748

Costs and expenses:

Cost of revenues (exclusive of depreciation and amortization expense presented below) 274,591 196,158 136,139 — 606,888

Selling, general and administrative expense 34,430 9,417 9,457 40,881 94,185

Depreciation and amortization expense 16,357 25,318 18,467 636 60,778

Other operating (income) loss, net

44 ( 2,141 ) ( 250 ) ( 385 ) ( 2,732 )

(1) Operating income included $ 2.5 million of facility consolidation charges.

325,422 228,752 163,813 41,132 759,119

Operating income (loss) $ 56,289 $ 13,881 $ ( 5,874 ) $ ( 41,132 ) $ 23,164

Capital expenditures

$ 9,235 $ 19,125 $ 1,825 $ 468 $ 30,653

Total assets (as of December 31)

$ 521,923 $ 191,630 $ 278,151 $ 54,782 $ 1,046,486

________________

(1) Operating income included $ 2.5 million of facility consolidation and other charges.

(2) Operating income included $ 0.6 million in costs associated with the defense of certain patents.

(3) Operating loss included $ 3.2 million in provisions for excess and obsolete inventories.

Year Ended December 31, 2022

Offshore Manufactured Products (1)

Completion and Production Services

Downhole Technologies

$ 322,370 $ 231,189 $ 184,147 $ — $ 737,706

Costs and expenses:

Cost of revenues (exclusive of depreciation and amortization expense presented below) 239,433 187,052 152,071 — 578,556

Selling, general and administrative expense 36,351 10,525 9,081 40,081 96,038

Depreciation and amortization expense 17,972 28,564 20,107 691 67,334

Other operating (income) loss, net

( 7,083 ) 183 ( 14 ) ( 213 ) ( 7,127 )

286,673 226,324 181,245 40,559 734,801

Operating income (loss) $ 35,697 $ 4,865 $ 2,902 $ ( 40,559 ) $ 2,905

Capital expenditures

$ 5,069 $ 12,963 $ 2,059 $ 175 $ 20,266

$ 512,363 $ 206,632 $ 299,956 $ 45,441 $ 1,064,392

________________

(1) Operating income included a $ 6.1 million gain on settlement of outstanding litigation.

(5) Operating loss included inventory and fixed and operating lease asset impairment charges of $ 1.5 million and $ 4.2 million, respectively.

(6) Operating loss included an inventory impairment charge of $ 2.1 million.

See Note 4, “Asset Impairments and Other Charges and Benefits,” Note 5, “Details of Selected Balance Sheet Accounts,” and Note 8, “Operating Leases” for further discussion of these and other charges and benefits.

No customer individually accounted for greater than 10% of the Company’s 2023, 2022 or 2021 consolidated revenues or individually accounted for greater than 10% of the Company’s consolidated accounts receivable at December 31, 2023.

See Note 4, “Asset Impairments and Other Charges and Credits,” Note 5, “Details of Selected Balance Sheet Accounts,” and Note 8, “Operating Leases” for further discussion of these and other charges and benefits.

No customer individually accounted for greater than 10% of the Company’s 2024, 2023 or 2022 consolidated revenues or individually accounted for greater than 10% of the Company’s consolidated accounts receivable as of December 31, 2024.

The Company’s Offshore Manufactured Products segment has numerous facilities around the world that generate both product and service revenues, and it is common for the segment to provide both installation and other services for products it manufactures.

While substantially all depreciation and amortization expense for the Offshore Manufactured Products segment relates to cost of revenues, it does not segregate or capture depreciation or amortization expense between product and service cost.

For the Downhole Technologies segment, substantially all depreciation and amortization expense relates to cost of products while substantially all depreciation and amortization expense for the Well Site Services segment relates to cost of services.

Operating income (loss) excludes equity in net income of unconsolidated affiliates, which is immaterial and not reported separately herein.

OIL STATES INTERNATIONAL, INC.

1 unchanged sentence

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

relates to cost of services.

Operating income (loss) excludes equity in net income of unconsolidated affiliates, which is immaterial and not reported separately herein.

The following tables provide supplemental disaggregated revenue from contracts with customers by operating segment for the years ended December 31, 2024, 2023 and 2022 (in thousands):

Offshore/Manufactured Products Well Site Services Downhole Technologies

Offshore Manufactured Products

Completion and Production Services

Downhole Technologies

2024 2023 2022 2024 2023 2022 2024 2023 2022

36 unchanged sentences

Valuation allowance on deferred tax assets (2)

36,749 ( 2,010 ) ( 5,020 ) ( 81 ) 29,638

Year Ended December 31, 2022:

3 unchanged sentences

________________

(1) As further discussed in Note 10, “Income Taxes,” the $ 5.0 million reduction in the valuation allowance on deferred tax assets is attributable to the expiration of foreign tax credit carryforwards in 2023.

(1) As further discussed in Note 10, “Income Taxes,” the $ 8.0 million reduction in the valuation allowance on deferred tax assets in 2024 was primarily attributable to the expiration of foreign tax credit carryforwards as well as reductions in other deferred tax assets.

(2) As further discussed in Note 10, “Income Taxes,” the $ 5.0 million reduction in the valuation allowance on deferred tax assets was attributable to the expiration of foreign tax credit carryforwards in 2023.

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 9A. Controls and Procedures