OIL STATES INTERNATIONAL, INC 10-K

Item 9A. Controls and Procedures (i) Evaluation of Disclosure Controls and Procedures As of the end of the period covered by this Annual Report on Form 10‑K, we carried out an evaluation, under the supervision and with the participation of our management, including our Chief Executive Officer and Chief Financial Officer, of the effectiveness of the design and operation of our disclosure controls and procedures (as defined in Rules 13a-15(e) and 15d-15(e)) of the Exchange Act. Our disclosure controls and procedures are designed to provide reasonable assurance that the information required to be disclosed by us in reports that we file under the Exchange Act is accumulated and communicated to our management, including our Chief Executive Officer and Chief Financial Officer, as appropriate, to allow timely decisions regarding required disclosure and is recorded, processed, summarized and reported within the time periods specified in the rules and forms of the SEC. Based upon that evaluation, our Chief Executive Officer and Chief Financial Officer concluded that our disclosure controls and procedures were effective as of December 31, 2024 at the reasonable assurance level. Pursuant to section 906 of The Sarbanes-Oxley Act of 2002, our Chief Executive Officer and Chief Financial Officer have provided certain certifications to the SEC. These certifications accompanied this report when filed with the SEC, but are not set forth herein. (ii) Internal Control over Financial Reporting (a) Management’s annual report on internal control over financial reporting. Our management is responsible for establishing and maintaining adequate internal control over financial reporting as defined in Rules 13a-15(f) and 15d-15(f) under the Exchange Act. Our internal control over financial reporting is a process designed to provide reasonable assurance regarding the reliability of financial reporting and the preparation of consolidated financial statements for external purposes in accordance with GAAP. Our internal control over financial reporting includes those policies and procedures that (i) pertain to the maintenance of records that, in reasonable detail, accurately and fairly reflect the transactions and dispositions of our assets; (ii) provide reasonable assurance that transactions are recorded as necessary to permit preparation of financial statements in accordance with GAAP, and that our receipts and expenditures are being made only in accordance with authorizations of management and our directors; and (iii) provide reasonable assurance regarding prevention or timely detection of unauthorized acquisition, use or disposition of our assets that could have a material effect on the Consolidated Financial Statements. Because of its inherent limitations, internal control over financial reporting may not prevent or detect misstatements. Also, projections of any evaluation of effectiveness to future periods are subject to the risk that controls may become inadequate because of changes in conditions, or that the degree of compliance with the policies or procedures may deteriorate. Accordingly, even effective internal control over financial reporting can only provide reasonable assurance of achieving their control objectives. -48- Under the supervision and with the participation of our management, including our Chief Executive Officer and Chief Financial Officer, an assessment of the effectiveness of our internal control over financial reporting as of December 31, 2024 was conducted. In making this assessment, management used the criteria set forth by the Committee of Sponsoring Organizations of the Treadway Commission (“COSO”) in Internal Control–Integrated Framework (2013 Framework). Based on our assessment we believe that, as of December 31, 2024, our internal control over financial reporting is effective based on those criteria. The effectiveness of Oil States’ internal control over financial reporting as of December 31, 2024 has been audited by Ernst & Young LLP, an independent registered public accounting firm, as described below. (b) Attestation report of the registered public accounting firm. The attestation report of Ernst & Young LLP, our independent registered public accounting firm, on our internal control over financial reporting is set forth in this Annual Report on Form 10‑K on page 58 and is incorporated herein by reference. (c) Changes in internal control over financial reporting. There have been no changes in our internal control over financial reporting (as that term is defined in Rules 13a-15(f) and 15d-15(f) under the Exchange Act) that occurred during our fourth fiscal quarter ended December 31, 2024, that has materially affected, or is reasonably likely to materially affect, our internal control over financial reporting. Item 9B. Other Information During the three months ended December 31, 2024, no director or executive officer adopted or terminated a “Rule 10b5-1 trading arrangement” or “non-Rule 10b5-1 trading arrangement” (as each is defined in Item 408 of Regulation S-K) related to securities of our company. -49- PART III Item 10. Directors, Executive Officers and Corporate Governance (1) Information concerning directors, including our audit committee financial experts, is incorporated by reference to our Definitive Proxy Statement for the 2025 Annual Meeting of Stockholders, under “Election of Directors.” (2) Information with respect to executive officers is incorporated by reference to our Definitive Proxy Statement for the 2025 Annual Meeting of Stockholders, under “Executive Officers.” (3) Information concerning Section 16(a) beneficial ownership reporting compliance is incorporated by reference to our Definitive Proxy Statement for the 2025 Annual Meeting of Stockholders, under “Section 16(a) Beneficial Ownership Reporting Compliance,” to the extent such disclosure is required. (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. Item 11. Executive Compensation The information required by Item 11 hereby is incorporated by reference to such information as set forth in our Definitive Proxy Statement for the 2025 Annual Meeting of Stockholders. Item 12. Security Ownership of Certain Beneficial Owners and Management and Related Stockholder Matters The information required by Item 12 hereby is incorporated by reference to such information as set forth in our Definitive Proxy Statement for the 2025 Annual Meeting of Stockholders. Item 13. Certain Relationships and Related Transactions, and Director Independence The information required by Item 13 hereby is incorporated by reference to such information as set forth in our Definitive Proxy Statement for the 2025 Annual Meeting of Stockholders. Item 14. Principal Accounting Fees and Services Information concerning principal accounting fees and services and the audit committee’s preapproval policies and procedures is incorporated by reference to our Definitive Proxy Statement for the 2025 Annual Meeting of Stockholders, under “Audit Fee Disclosure.” -50- PART IV Item 15. Exhibits, Financial Statement Schedules (a) Index to Financial Statements, Financial Statement Schedules and Exhibits (1) Financial Statements: Reference is made to the index set forth on page 55 of this Annual Report on Form 10‑K. (2) Financial Statement Schedules: No schedules have been included herein because the information required to be submitted has been included in the Consolidated Financial Statements or the Notes thereto, or the required information is inapplicable. (3) Index of Exhibits: See Index of Exhibits, below, for a list of those exhibits filed herewith, which index also includes and identifies management contracts or compensatory plans or arrangements required to be filed as exhibits to this Annual Report on Form 10‑K by Item 601 of Regulation S‑K. (b) Index of Exhibits Exhibit No. Description 3.1 — Amended and Restated Certificate of Incorporation (incorporated by reference to Exhibit 3.1 to the Company's Quarterly Report on Form 10‑Q for the quarter ended June 30, 2023, as filed with the SEC on July 27, 2023 (File No. 001‑16337)). 3.2 — Fifth Amended and Restated Bylaws of Oil States International, Inc. (incorporated by reference to Exhibit 3.2 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. 001‑16337)). 4.1 — Form of common stock certificate (incorporated by reference to Exhibit 4.1 to the Company’s Registration Statement on Form S‑1, as filed with the SEC on November 7, 2000 (File No. 333‑43400)). 4.3 — Indenture, dated March 19, 2021, by and among Oil States International, Inc. and Wells Fargo Bank, National Association, as trustee, relating to the 4.75% Convertible Senior Notes due 2026 (incorporated by reference to Exhibit 4.1 to the Company’s Current Report on Form 8-K, as filed with the Commission on March 22, 2021 (File No. 001-16337)). 4.4 — Description of Common Stock (incorporated by reference to Exhibit 4.4 to the Company’s Annual Report on Form 10-K for the year ended December 31, 2019, as filed with the SEC on February 21, 2020 (File No. 001-16337)). 10.1+ — Amended and Restated Equity Participation Plan of Oil States International, Inc. (incorporated by reference to Exhibit 4.4 to the Company’s Registration Statement on Form S-8, as filed with the SEC on May 28, 2021 (File No. 333‑2565777)). 10.2 — Form of Deferred Stock Award Election under the Company’s Amended and Restated Equity Participation Plan. (incorporated by Reference to Exhibit 10.2 to the Company’s Annual Report on Form 10‑K for the year ended December 31, 2021, as filed with the SEC on February 22, 2022 (File No. 001‑16337)). 10.3 — Form of Deferred Stock Grant Notice and Agreement under the Company’s Amended and Restated Equity Participation Plan. (incorporated by Reference to Exhibit 10.3 to the Company’s Annual Report on Form 10‑K for the year ended December 31, 2021, as filed with the SEC on February 22, 2022 (File No. 001‑16337)). 10.4+ — Deferred Compensation Plan effective January 1, 2012 (incorporated by reference to Exhibit 10.1 to the Company’s Quarterly Report on Form 10‑Q for the quarter ended March 31, 2013, as filed with the SEC on April 25, 2013 (File No. 001‑16337)). 10.5+ — Annual Incentive Compensation Plan, dated January 1, 2017 (incorporated by reference to Exhibit 10.4 to the Company’s Annual Report on Form 10‑K for the year ended December 31, 2016, as filed with the SEC on February 17, 2017 (File No. 001‑16337)). 10.6+ — Executive Agreement between Oil States International, Inc. and Cindy B. Taylor (incorporated by Reference to Exhibit 10.9 to the Company’s Annual Report on Form 10‑K for the year ended December 31, 2000, as filed with the SEC on March 30, 2001 (File No. 001‑16337)). 10.7+ — Form of Change of Control Severance Plan for Selected Members of Management (incorporated by reference to Exhibit 10.11 of the Company’s Registration Statement on Form S‑1, as filed with the SEC on December 12, 2000 (File No. 333‑43400)). 10.8 — Asset-based Credit Agreement, dated as of February 10, 2021, among Oil States International, Inc., as Borrower, the Lenders from time to time party thereto, and Wells Fargo Bank, National Association as Agent (incorporated by reference to Exhibit 10.1 to the Company’s Current Report on Form 8-K, as filed with the SEC on February 12, 2021 (File No. 001-16337)). -51- 10.9 — 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. 001-16337)). 10.10 — 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. 001‑16337)). 10.11 — 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. 001‑16337)). 10.12+ — Form of Director Stock Option Agreement under the Company’s 2001 Equity Participation Plan (incorporated by reference to Exhibit 10.18 to the Company’s Annual Report on Form 10‑K for the year ended December 31, 2004, as filed with the SEC on March 2, 2005 (File No. 001‑16337)). 10.13+ — Form of Employee Nonqualified Stock Option Agreement under the Company’s Amended and Restated Equity Participation Plan (incorporated by reference to Exhibit 4.7 to the Company’s Registration Statement on Form S-8, as filed with the SEC on May 28, 2021 (File No. 333‑2565777)). 10.14+ — Form of Restricted Stock Agreement under the Company’s Amended and Restated Equity Participation Plan (incorporated by reference to Exhibit 4.5 to the Company’s Registration Statement on Form S-8, as filed with the SEC on May 28, 2021 (File No. 333‑2565777)). 10.15+ — 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. 001-16337)). 10.16+ — 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. 001-16337)). 10.17+ — Non-Employee Director Compensation Summary (incorporated by reference to Exhibit 10.21 to the Company’s Report on Form 8‑K as filed with the SEC on November 15, 2006 (File No. 001‑16337)). 10.18+ — Form of Non-Employee Director Restricted Stock Agreement under the Company’s Amended and Restated Equity Participation Plan (incorporated by reference to Exhibit 4.6 to the Company’s Registration Statement on Form S-8, as filed with the SEC on May 28, 2021 (File No. 333‑2565777)). 10.19+ — Amendment to the Executive Agreement of Cindy Taylor, effective January 1, 2009 (incorporated by reference to Exhibit 10.21 to the Company’s Annual Report on Form 10‑K for the year ended December 31, 2008, as filed with the SEC on February 20, 2009 (File No. 001‑16337)). 10.20+ — Executive Agreement between Oil States International, Inc. and named executive officer (Lloyd A. Hajdik) effective December 9, 2013 (incorporated by reference to Exhibit 10.31 to the Company’s Annual Report on Form 10‑K for the year ended December 31, 2013, as filed with the SEC on February 25, 2014 (File No. 001‑16337)). 10.21+ — Executive Agreement between Oil States International, Inc. and named executive officer (Philip S. Moses) effective July 1, 2015 (incorporated by reference to Exhibit 10.1 to the Company’s Current Report on Form 8‑K, as filed with the SEC on July 8, 2015 (File No. 001‑16337)). 10.22+ — Executive Agreement between Oil States International, Inc. and named executive officer (Brian E. Taylor) effective May 10, 2022 (incorporated by reference to Exhibit 10.1 to the Company’s Current Report on Form 8‑K, as filed with the SEC on May 13, 2022 (File No. 001‑16337)). 10.23+ — 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. 001-16337)). 1 9.1 * — O il States International, Inc. Insider Trading Policy 21.1* — List of subsidiaries of the Company. 23.1* — Consent of Independent Registered Public Accounting Firm. 24.1* — Powers of Attorney for Directors. 31.1* — Certification of Chief Executive Officer of Oil States International, Inc. pursuant to Rules 13a‑14(a) or 15d‑14(a) under the Securities Exchange Act of 1934. -52- 31.2* — Certification of Chief Financial Officer of Oil States International, Inc. pursuant to Rules 13a‑14(a) or 15d‑14(a) under the Securities Exchange Act of 1934. 32.1** — Certification of Chief Executive Officer of Oil States International, Inc. pursuant to Rules 13a‑14(b) or 15d‑14(b) under the Securities Exchange Act of 1934. 32.2** — Certification of Chief Financial Officer of Oil States International, Inc. pursuant to Rules 13a‑14(b) or 15d‑14(b) under the Securities Exchange Act of 1934. 97.1 — 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. 001-16337)). 101.INS* — XBRL Instance Document 101.SCH* — XBRL Taxonomy Extension Schema Document 101.CAL* — XBRL Taxonomy Extension Calculation Linkbase Document 101.DEF* — XBRL Taxonomy Extension Definition Linkbase Document 101.LAB* — XBRL Taxonomy Extension Label Linkbase Document 101.PRE* — XBRL Taxonomy Extension Presentation Linkbase Document 104.1* — Cover Page Interactive Data File (embedded within the Inline XBRL document) --------- * Filed herewith. ** Furnished herewith. + Management contracts or compensatory plans or arrangements. Item 16. Form 10-K Summary None. -53- SIGNATURES Pursuant to the requirements of Section 13 or 15(d) of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned, thereunto duly authorized on February 21, 2025. OIL STATES INTERNATIONAL, INC. By /s/ Cindy B. Taylor Cindy B. Taylor President and Chief Executive Officer Pursuant to the requirements of the Securities Exchange Act of 1934, this report has been signed by the following persons on behalf of the registrant in the capacities indicated on February 21, 2025. Signature Title * Chair of the Board Robert L. Potter /s/ Cindy B. Taylor Director, President & Chief Executive Officer Cindy B. Taylor (Principal Executive Officer) /s/ Lloyd A. Hajdik Executive Vice President, Chief Financial Officer Lloyd A. Hajdik and Treasurer (Principal Financial Officer) /s/ Brian E. Taylor Senior Vice President, Controller and Chief Accounting Officer Brian E. Taylor (Principal Accounting Officer) * Director Denise Castillo-Rhodes * Director Lawrence R. Dickerson * Director Darrell E. Hollek * Director Hallie A. Vanderhider * Director E. Joseph Wright *By: /s/ Lloyd A. Hajdik Lloyd A. Hajdik, pursuant to a power of attorney filed as Exhibit 24.1 to this Annual Report on Form 10-K -54- INDEX TO CONSOLIDATED FINANCIAL STATEMENTS Report of Independent Registered Public Accounting Firm on Consolidated Financial Statements (PCAOB ID: 42 ) 56 Report of Independent Registered Public Accounting Firm on the Company’s Internal Control Over Financial Reporting 58 Consolidated Statements of Operations 59 Consolidated Statements of Comprehensive Income (Loss) 60 Consolidated Balance Sheets 61 Consolidated Statements of Stockholders’ Equity 62 Consolidated Statements of Cash Flows 63 Notes to Consolidated Financial Statements 64 -55- Report of Independent Registered Public Accounting Firm To the Stockholders and the Board of Directors of Oil States International, Inc. Opinion on the Financial Statements We have audited the accompanying consolidated balance sheets of Oil States International, Inc. and subsidiaries (the Company) as of December 31, 2024 and 2023, the related consolidated statements of operations, comprehensive income (loss), stockholders’ equity and cash flows for each of the three years in the period ended December 31, 2024, and the related notes (collectively referred to as the “consolidated financial statements”). In our opinion, the consolidated financial statements present fairly, in all material respects, the financial position of the Company at December 31, 2024 and 2023, and the results of its operations and its cash flows for each of the three years in the period ended December 31, 2024, in conformity with U.S. generally accepted accounting principles. We also have audited, in accordance with the standards of the Public Company Accounting Oversight Board (United States) (PCAOB), the Company’s internal control over financial reporting as of December 31, 2024, based on criteria established in Internal Control–Integrated Framework issued by the Committee of Sponsoring Organizations of the Treadway Commission (2013 framework) and our report dated February 21, 2025 expressed an unqualified opinion thereon. Basis for Opinion These financial statements are the responsibility of the Company’s management. Our responsibility is to express an opinion on the Company’s financial statements based on our audits. We are a public accounting firm registered with the PCAOB and are required to be independent with respect to the Company in accordance with the U.S. federal securities laws and the applicable rules and regulations of the Securities and Exchange Commission and the PCAOB. We conducted our audits in accordance with the standards of the PCAOB. Those standards require that we plan and perform the audit to obtain reasonable assurance about whether the financial statements are free of material misstatement, whether due to error or fraud. Our audits included performing procedures to assess the risks of material misstatement of the financial statements, whether due to error or fraud, and performing procedures that respond to those risks. Such procedures included examining, on a test basis, evidence regarding the amounts and disclosures in the financial statements. Our audits also included evaluating the accounting principles used and significant estimates made by management, as well as evaluating the overall presentation of the financial statements. We believe that our audits provide a reasonable basis for our opinion. 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. -56- 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 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 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. To assess management’s estimated costs, we performed audit procedures that included, among others, agreeing the estimates to supporting documentation; conducting interviews with project personnel; observing selected project review meetings; performing observations of select projects to observe progress; 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 We have served as the Company’s auditor since 2000. Houston, Texas February 21, 2025 -57- Report of Independent Registered Public Accounting Firm To the Stockholders and the Board of Directors of Oil States International, Inc. Opinion on Internal Control Over Financial Reporting We have audited Oil States International, Inc. and subsidiaries’ internal control over financial reporting as of December 31, 2024, based on criteria established in Internal Control–Integrated Framework issued by the Committee of Sponsoring Organizations of the Treadway Commission (2013 framework) (the COSO criteria). In our opinion, Oil States International, Inc. and subsidiaries (the Company) maintained, in all material respects, effective internal control over financial reporting as of December 31, 2024, based on the COSO criteria. We also have audited, in accordance with the standards of the Public Company Accounting Oversight Board (United States) (PCAOB), the consolidated balance sheets of the Company as of December 31, 2024 and 2023, the related consolidated statements of operations, comprehensive income (loss), stockholders’ equity and cash flows for each of the three years in the period ended December 31, 2024 and the related notes, and our report dated February 21, 2025 expressed an unqualified opinion thereon. Basis for Opinion The Company’s management is responsible for maintaining effective internal control over financial reporting and for its assessment of the effectiveness of internal control over financial reporting included in the accompanying management’s annual report on internal control over financial reporting. Our responsibility is to express an opinion on the Company’s internal control over financial reporting based on our audit. We are a public accounting firm registered with the PCAOB and are required to be independent with respect to the Company in accordance with the U.S. federal securities laws and the applicable rules and regulations of the Securities and Exchange Commission and the PCAOB. We conducted our audit in accordance with the standards of the PCAOB. Those standards require that we plan and perform the audit to obtain reasonable assurance about whether effective internal control over financial reporting was maintained in all material respects. Our audit included obtaining an understanding of internal control over financial reporting, assessing the risk that a material weakness exists, testing and evaluating the design and operating effectiveness of internal control based on the assessed risk, and performing such other procedures as we considered necessary in the circumstances. We believe that our audit provides a reasonable basis for our opinion. Definition and Limitations of Internal Control Over Financial Reporting A company’s internal control over financial reporting is a process designed to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles. A company’s internal control over financial reporting includes those policies and procedures that (1) pertain to the maintenance of records that, in reasonable detail, accurately and fairly reflect the transactions and dispositions of the assets of the company; (2) provide reasonable assurance that transactions are recorded as necessary to permit preparation of financial statements in accordance with generally accepted accounting principles, and that receipts and expenditures of the company are being made only in accordance with authorizations of management and directors of the company; and (3) provide reasonable assurance regarding prevention or timely detection of unauthorized acquisition, use, or disposition of the company’s assets that could have a material effect on the financial statements. Because of its inherent limitations, internal control over financial reporting may not prevent or detect misstatements. Also, projections of any evaluation of effectiveness to future periods are subject to the risk that controls may become inadequate because of changes in conditions, or that the degree of compliance with the policies or procedures may deteriorate. /s/ Ernst & Young LLP Houston, Texas February 21, 2025 -58- OIL STATES INTERNATIONAL, INC. AND SUBSIDIARIES CONSOLIDATED STATEMENTS OF OPERATIONS (In Thousands, Except Per Share Amounts) Year Ended December 31, 2024 2023 2022 Revenues: Products $ 402,565 $ 418,550 $ 385,564 Services 290,023 363,733 352,142 692,588 782,283 737,706 Costs and expenses: Product costs 314,628 328,815 307,371 Service costs 221,573 278,073 271,185 Cost of revenues (exclusive of depreciation and amortization expense presented below) 536,201 606,888 578,556 Selling, general and administrative expense 95,009 94,185 96,038 Depreciation and amortization expense 54,708 60,778 67,334 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 ) 694,277 759,119 734,801 Operating income (loss) ( 1,689 ) 23,164 2,905 Interest expense ( 8,801 ) ( 9,570 ) ( 10,571 ) Interest income 1,070 1,381 291 Other income, net 1,568 849 3,315 Income (loss) before income taxes ( 7,852 ) 15,824 ( 4,060 ) Income tax provision ( 3,406 ) ( 2,933 ) ( 5,480 ) Net income (loss) $ ( 11,258 ) $ 12,891 $ ( 9,540 ) Net income (loss) per share: Basic $ ( 0.18 ) $ 0.20 $ ( 0.15 ) Diluted ( 0.18 ) 0.20 ( 0.15 ) Weighted average number of common shares outstanding: Basic 62,004 62,690 61,638 Diluted 62,004 63,152 61,638 The accompanying notes are an integral part of these financial statements. -59- OIL STATES INTERNATIONAL, INC. AND SUBSIDIARIES CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME (LOSS) (In Thousands) Year Ended December 31, 2024 2023 2022 Net income (loss) $ ( 11,258 ) $ 12,891 $ ( 9,540 ) Other comprehensive income (loss): Currency translation adjustments ( 9,548 ) 8,957 ( 12,977 ) Other — — 67 Total other comprehensive income (loss) ( 9,548 ) 8,957 ( 12,910 ) Comprehensive income (loss) $ ( 20,806 ) $ 21,848 $ ( 22,450 ) The accompanying notes are an integral part of these financial statements. -60- OIL STATES INTERNATIONAL, INC. AND SUBSIDIARIES CONSOLIDATED BALANCE SHEETS (In Thousands, Except Share Amounts) December 31, 2024 December 31, 2023 ASSETS Current assets: Cash and cash equivalents $ 65,363 $ 47,111 Accounts receivable, net 194,336 203,211 Inventories, net 214,836 202,027 Prepaid expenses and other current assets 23,691 35,648 Total current assets 498,226 487,997 Property, plant, and equipment, net 266,871 280,389 Operating lease assets, net 19,537 21,970 Goodwill, net 69,709 79,867 Other intangible assets, net 125,862 153,010 Other noncurrent assets 24,903 23,253 Total assets $ 1,005,108 $ 1,046,486 LIABILITIES AND STOCKHOLDERS’ EQUITY Current liabilities: Current portion of long-term debt $ 633 $ 627 Accounts payable 57,708 67,546 Accrued liabilities 36,861 44,227 Current operating lease liabilities 7,284 6,880 Income taxes payable 2,818 1,233 Deferred revenue 52,399 36,757 Total current liabilities 157,703 157,270 Long-term debt 124,654 135,502 Long-term operating lease liabilities 17,989 18,346 Deferred income taxes 5,350 7,717 Other noncurrent liabilities 18,758 18,106 Total liabilities 324,454 336,941 Stockholders’ equity: Common stock, $ .01 par value, 200,000,000 shares authorized, 78,605,848 shares and 77,218,765 shares issued, respectively 786 772 Additional paid-in capital 1,137,949 1,129,240 Retained earnings 273,660 284,918 Accumulated other comprehensive loss ( 79,532 ) ( 69,984 ) Treasury stock, at cost, 17,112,853 and 13,892,049 shares, respectively ( 652,209 ) ( 635,401 ) Total stockholders’ equity 680,654 709,545 Total liabilities and stockholders’ equity $ 1,005,108 $ 1,046,486 The accompanying notes are an integral part of these financial statements. -61- OIL STATES INTERNATIONAL, INC. AND SUBSIDIARIES CONSOLIDATED STATEMENTS OF STOCKHOLDERS’ EQUITY (In Thousands) Common Stock Additional Paid-In Capital Retained Earnings Accumulated Other Comprehensive Loss Treasury Stock Total Stockholders’ Equity Balance, December 31, 2021 $ 739 $ 1,105,135 $ 281,567 $ ( 66,031 ) $ ( 625,584 ) $ 695,826 Net loss — — ( 9,540 ) — — ( 9,540 ) Currency translation adjustment (excluding intercompany advances) — — — ( 15,258 ) — ( 15,258 ) Currency translation adjustment on intercompany advances — — — 2,281 — 2,281 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 Surrender of stock to settle taxes on restricted stock awards — — — — ( 1,002 ) ( 1,002 ) Balance, December 31, 2022 766 1,122,292 272,027 ( 78,941 ) ( 626,586 ) 689,558 Net income — — 12,891 — — 12,891 Currency translation adjustment (excluding intercompany advances) — — — 6,822 — 6,822 Currency translation adjustment on intercompany advances — — — 2,135 — 2,135 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 Net loss — — ( 11,258 ) — — ( 11,258 ) Currency translation adjustments (excluding intercompany advances) — — — ( 2,768 ) — ( 2,768 ) Currency translation adjustments on intercompany advances — — — ( 6,780 ) — ( 6,780 ) Stock-based compensation expense 14 8,709 — — — 8,723 Surrender of stock to settle taxes on restricted stock awards — — — — ( 2,596 ) ( 2,596 ) Stock repurchases — — — — ( 14,212 ) ( 14,212 ) Balance, December 31, 2024 $ 786 $ 1,137,949 $ 273,660 $ ( 79,532 ) $ ( 652,209 ) $ 680,654 The accompanying notes are an integral part of these financial statements. -62- OIL STATES INTERNATIONAL, INC. AND SUBSIDIARIES CONSOLIDATED STATEMENTS OF CASH FLOWS (In Thousands) Year Ended December 31, 2024 2023 2022 Cash flows from operating activities: Net income (loss) $ ( 11,258 ) $ 12,891 $ ( 9,540 ) Adjustments to reconcile net income (loss) to net cash provided by operating activities: Depreciation and amortization expense 54,708 60,778 67,334 Impairment of goodwill 10,000 — — Impairments of intangible assets 10,787 — — Impairments of operating lease assets 3,767 — — 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 (benefit) ( 2,356 ) 226 2,020 Gains on disposals of assets ( 18,333 ) ( 4,075 ) ( 2,856 ) Gains on extinguishment of convertible senior notes ( 515 ) — ( 176 ) Other, net ( 452 ) ( 1,001 ) 2,066 Changes in operating assets and liabilities, net of effect from acquired business: Accounts receivable 5,191 17,132 ( 35,443 ) Inventories ( 14,704 ) ( 19,793 ) ( 17,364 ) Accounts payable and accrued liabilities ( 19,382 ) ( 11,743 ) 18,183 Deferred revenue 15,642 ( 8,033 ) 1,554 Other operating assets and liabilities, net 2,579 1,441 ( 1,654 ) Net cash flows provided by operating activities 45,894 56,575 32,862 Cash flows from investing activities: Capital expenditures ( 37,508 ) ( 30,653 ) ( 20,266 ) Proceeds from disposition of property and equipment 5,594 5,253 5,877 Proceeds from disposition of assets held for sale 35,070 — — Acquisition of business, net of cash acquired — — ( 8,125 ) Other, net ( 454 ) ( 186 ) ( 211 ) Net cash flows provided by (used in) investing activities 2,702 ( 25,586 ) ( 22,725 ) Cash flows from financing activities: Revolving credit facility borrowings 22,739 35,816 10,090 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 ) Payment of promissory note to seller of GEODynamics, Inc. — — ( 10,000 ) Other debt and finance lease repayments ( 652 ) ( 457 ) ( 732 ) Payment of financing costs ( 1,178 ) ( 128 ) ( 105 ) Purchases of treasury stock ( 14,212 ) ( 6,867 ) — Shares added to treasury stock as a result of net share settlements due to vesting of stock awards ( 2,596 ) ( 1,948 ) ( 1,002 ) Net cash flows used in financing activities ( 29,484 ) ( 26,715 ) ( 20,289 ) Effect of exchange rate changes on cash and cash equivalents ( 860 ) 819 ( 682 ) Net change in cash and cash equivalents 18,252 5,093 ( 10,834 ) Cash and cash equivalents, beginning of period 47,111 42,018 52,852 Cash and cash equivalents, end of period $ 65,363 $ 47,111 $ 42,018 Cash paid for: Interest $ 7,439 $ 7,867 $ 8,339 Income taxes, net 3,847 1,263 534 The accompanying notes are an integral part of these financial statements. -63- Table of Contents OIL STATES INTERNATIONAL, INC. AND SUBSIDIARIES NOTES TO CONSOLIDATED FINANCIAL STATEMENTS 1. Organization and Basis of Presentation The Consolidated Financial Statements include the accounts of Oil States International, Inc. (“Oil States” or the “Company”) and its consolidated subsidiaries. Investments in unconsolidated affiliates, in which the Company is able to exercise significant influence, are accounted for using the equity method. All significant intercompany accounts and transactions between the Company and its consolidated subsidiaries have been eliminated in the accompanying Consolidated Financial Statements. 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, 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. 2. Summary of Significant Accounting Policies Use of Estimates The preparation of consolidated financial statements in conformity with generally accepted accounting principles 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 Consolidated Financial Statements and the reported amounts of revenues and expenses during the reporting period. Examples of such estimates include, but are not limited to, revenue and income recognized over time, goodwill and long-lived asset impairments, valuation allowances recorded on deferred tax assets, reserves on inventory, allowances for doubtful accounts, settlement of litigation and potential future adjustments related to contractual indemnification and other agreements. Actual results could materially differ from those estimates. Cash and Cash Equivalents All highly liquid investments purchased with an original maturity of three months or less are classified as cash equivalents. Fair Value of Financial Instruments The Company’s financial instruments consist of cash and cash equivalents, investments, receivables, payables and debt instruments. The Company believes that the carrying values of these instruments, other than the 2026 Notes (as defined below), on the accompanying consolidated balance sheets approximate their fair values. The estimated fair value of the 2026 Notes as of December 31, 2024 was $ 121.7 million based on quoted market prices (a Level 2 fair value measurement), which compares to the principal amount of $ 123.5 million. Inventories Inventories consist of consumable oilfield products, manufactured equipment, spare parts for manufactured equipment, and work-in-process. Inventories also include raw materials, labor, subcontractor charges, manufacturing overhead and supplies and are carried at the lower of cost or net realizable value. The cost of inventories is determined on an average cost or specific-identification method. 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. -64- OIL STATES INTERNATIONAL, INC. AND SUBSIDIARIES NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued) 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. Expenditures for repairs and maintenance are charged to expense when incurred. Expenditures for major renewals and betterments, which extend the useful lives of existing equipment, are capitalized and depreciated. Upon retirement or disposition of property and equipment, the cost and related accumulated depreciation are removed from the accounts and any resulting gain or loss is recognized in the statements of operations. Goodwill Goodwill represents the excess of the purchase price for acquired businesses over the allocated fair value of related net assets, reduced by historical impairments. 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. 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. Management estimates the fair value of each reporting unit and compares that fair value to its recorded carrying value. Management utilizes, depending on circumstances, a combination of valuation methodologies including a market approach and an income approach, as well as guideline public company comparables. Projected cash flows are discounted using a long-term weighted average cost of capital for each reporting unit based on estimates of investment returns that would be required by a market participant. As part of the process of assessing goodwill for potential impairment, the total market capitalization of the Company is compared to the sum of the fair values of all reporting units to assess the reasonableness of aggregated fair values. 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 -65- OIL STATES INTERNATIONAL, INC. AND SUBSIDIARIES NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued) 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 The Company amortizes the cost of long-lived assets, including finite-lived intangible assets, over their estimated useful life. 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 values 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. 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 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. Leases 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. The Company recognizes the right to use identified assets under operating leases (with an initial term of greater than 12 months) as operating lease assets and the related obligations to make payments under the lease arrangements as operating lease liabilities. Finance lease obligations, which are not material, are classified within long-term debt while related assets are included within property, plant and equipment. Lease assets and liabilities are recorded at the commencement date based on the present value of lease payments over the lease term. The Company has lease agreements with lease and non-lease components, which are generally accounted for as a single lease component. Most of the Company’s leases do not provide an implicit interest rate. 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. 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. The exercise of lease renewal options is at the Company’s sole discretion. The depreciable lives of lease-related assets and leasehold improvements are limited by the expected lease term. Certain operating lease agreements include rental payments adjusted periodically for inflation. The Company’s operating lease agreements do not contain any material residual value guarantees or material restrictive covenants. While the Company rents or subleases certain real estate to third parties, such amounts are not material. Cash outflows related to operating leases are presented within cash flows from operations. Research and Development Costs Costs incurred internally in researching and developing products are charged to expense until technological feasibility has been established for the product. 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. -66- OIL STATES INTERNATIONAL, INC. AND SUBSIDIARIES NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued) Foreign Currency and Other Comprehensive Loss A portion of revenues, earnings and net investments in operations outside the United States are exposed to changes in currency exchange rates. The Company seeks to manage its currency exchange risk in part through operational means, including managing expected local currency revenues in relation to local currency costs and local currency assets in relation to local currency liabilities. In order to reduce exposure to fluctuations in currency exchange rates, the Company may enter into currency exchange agreements with financial institutions. As of December 31, 2024 and 2023, the Company had no outstanding foreign currency forward purchase contracts. Gains and losses resulting from balance sheet translation of international operations where the local currency is the functional currency are included as a component of accumulated other comprehensive loss within stockholders’ equity and represent substantially all of the accumulated other comprehensive loss balance. Remeasurements of intercompany advances denominated in a currency other than the functional currency of the entity that are of a long-term investment nature are recognized as a separate component of other comprehensive loss within stockholders’ equity. Gains and losses resulting from balance sheet remeasurements of assets and liabilities denominated in a different currency than the functional currency, other than intercompany advances that are of a long-term investment nature, are included in the consolidated statements of operations within “other operating income, net” as incurred and were not material during the periods presented. Revenue and Cost Recognition The Company’s revenue contracts may include one or more promises to transfer a distinct good or service to the customer, which is referred to as a “performance obligation,” and to which revenue is allocated. The Company recognizes revenue and the related cost when, or as, the performance obligations are satisfied. The majority of significant contracts for custom engineered products have a single performance obligation as no individual good or service is separately identifiable from other performance obligations in the contracts. For contracts with multiple distinct performance obligations, the Company allocates revenue to the identified performance obligations in the contract. The Company’s product sales terms do not include significant post-performance obligations. The Company’s performance obligations may be satisfied at a point in time or over time as work progresses. Revenues from products and services transferred to customers at a point in time accounted for approximately 33 %, 34 % and 35 % of consolidated revenues for the years ended December 31, 2024, 2023 and 2022, respectively. The majority of the Company’s revenue recognized at a point in time is derived from short-term contracts for standard products. Revenue on these contracts is recognized when control over the product has transferred to the customer. Indicators the Company considers in determining when transfer of control to the customer occurs include: right to payment for the product, transfer of legal title to the customer, transfer of physical possession of the product, transfer of risk and customer acceptance of the product. Revenues from products and services transferred to customers over time accounted for approximately 67 %, 66 % and 65 % of consolidated revenues for the years ended December 31, 2024, 2023 and 2022, respectively. 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 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). Contract costs include labor, material and overhead. Management believes this method is the most appropriate measure of progress on large contracts. Billings on such contracts in excess of costs incurred and estimated profits are classified as a contract liability (deferred revenue). Costs incurred and estimated profits in excess of billings on these contracts are recognized as a contract asset (a component of accounts receivable). Contract estimates for project-related contracts involving custom engineered products are based on various assumptions to project the outcome of future events that may span several years. 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. -67- OIL STATES INTERNATIONAL, INC. AND SUBSIDIARIES NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued) 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. The Company recognizes adjustments in estimated costs and profits on contracts in the period the adjustment is identified. Revenue and profit in future periods of contract performance are recognized using the adjusted estimate. If at any time the estimate of contract profitability indicates an anticipated loss will be incurred on the contract, the full loss is recognized in the period it is identified. Product costs and service costs include all direct material and labor costs and those costs related to contract performance, such as indirect labor, supplies, tools and repairs. As disclosed in the consolidated statements of operations, product costs and service costs exclude depreciation and amortization expense and impairment of fixed assets, which are separately presented. Selling, general and administrative costs are charged to expense as incurred. Taxes assessed by a governmental authority that are both imposed on and concurrent with a specific revenue-producing transaction, and that are collected by the Company from a customer, are excluded from revenue. Shipping and handling costs associated with outbound freight after control over a product has transferred to a customer are accounted for as a fulfillment cost and are included in cost of products. As of December 31, 2024, the Company had $ 209.4 million of remaining backlog related to contracts with an original expected duration of greater than one year . Approximately 54 % of this remaining backlog is expected to be recognized as revenue in 2025 and the balance thereafter. Income Taxes The Company follows the liability method of accounting for income taxes. 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. The Company accounts for the U.S. tax effect of global intangible low-taxed income earned by foreign subsidiaries in the period that such income is earned. The Company records a valuation allowance in the reporting period when management believes that it is more likely than not that any deferred tax asset will not be realized. This assessment requires analysis of changes in tax laws as well as available positive and negative evidence, including consideration of losses in recent years, reversals of temporary differences, forecasts of future income and assessment of future business and tax planning strategies. 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, 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. 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 Based on the nature of its customer base, the Company does not believe that it has any significant concentrations of credit risk other than its concentration in the worldwide oil and gas industry. Note 14, “Segments and Related Information,” provides further information with respect to the Company’s geographic revenues and significant customers. The Company evaluates the credit-worthiness of significant customers’ financial condition and, generally, the Company does not require significant collateral from its customers. -68- OIL STATES INTERNATIONAL, INC. AND SUBSIDIARIES NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued) Allowances for Doubtful Accounts The Company maintains allowances for estimated losses resulting from the inability of the Company’s customers to make required payments. Determination of the collectability of amounts due from customers requires management to make judgments regarding future events and trends. Allowances for doubtful accounts are established through an assessment of the Company’s portfolio on an individual customer and consolidated basis taking into account current and expected future market conditions and trends. This process consists of a thorough review of historical collection experience, current aging status of customer accounts, and financial condition of the Company’s customers as well as political and economic factors in countries of operations and other customer-specific factors. Based on a review of these factors, the Company establishes or adjusts allowances for trade and unbilled receivables as well as contract assets. If the financial condition of the Company’s customers were to deteriorate further, adversely affecting their ability to make payments, additional allowances may be required. If a customer receivable is deemed to be uncollectible, the receivable is charged-off against allowance for doubtful accounts. Earnings per Share Basic earnings per share (“EPS”) on the face of the accompanying consolidated statements of operations is computed by dividing the net income or loss applicable to the Company’s common stockholders by the weighted average shares of outstanding common stock. The calculation of diluted EPS is similar to basic EPS, except that the denominator includes dilutive common stock equivalents and the income or loss in the numerator excludes the impact, if any, of dilutive common stock equivalents. Diluted EPS includes the effect, if dilutive, of the Company’s outstanding stock options, restricted stock and convertible securities under the treasury stock method. Currently issued and outstanding shares of restricted stock remain subject to vesting requirements. The Company is required to compute EPS amounts under the two class method in periods with earnings. Holders of shares of unvested restricted stock are entitled to the same liquidation and dividend rights as holders of outstanding common stock and are thus considered participating securities. Under applicable accounting guidance, undistributed earnings, if any, for each period are allocated based on the participation rights of both the common stockholders and holders of any participating securities as if earnings for the respective periods had been distributed. Because both the liquidation and dividend rights are identical, undistributed earnings are allocated on a proportionate basis. Stock-Based Compensation The fair value of share-based payments is estimated using the quoted market price of the Company’s common stock and pricing models as of the date of grant as further discussed in Note 12, “Long-Term Incentive Compensation.” 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. In addition to service-based awards, the Company issues performance-based awards, which are conditional based upon Company performance. Performance-based award expense, and ultimate vesting, is recognized in an amount that depends on the Company’s probable achievement of specified performance objectives. Guarantees 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. As of December 31, 2024, the maximum potential amount of future payments that the Company could be required to make under these guarantee agreements (letters of credit) was $ 15.9 million. The Company has not recorded any liability in connection with these guarantee arrangements. The Company does not believe, based on historical experience and information currently available, that it is likely that any material amounts will be required to be paid under these guarantee arrangements. Accounting for Contingencies The Company has contingent liabilities and future claims for which estimates of the amount of the eventual cost to liquidate such liabilities are accrued. These liabilities and claims sometimes involve threatened or actual litigation where damages have been quantified and an assessment of exposure has been made and recorded in an amount estimated to cover the expected loss. 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 -69- OIL STATES INTERNATIONAL, INC. AND SUBSIDIARIES NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued) in settlement. Examples of areas with important estimates of future liabilities include duties, income taxes, litigation, insurance claims and contractual claims and obligations. Recent Accounting Pronouncements From time to time, new accounting pronouncements are issued by the Financial Accounting Standards Board (the “FASB”), which are adopted by the Company as of the specified effective date. 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. 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. 3. Acquisition 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. The purchase price of $ 8.1 million (net of cash acquired) was funded with cash-on-hand. Under the terms of the purchase agreement, the Company may be entitled to indemnification for certain matters occurring prior to the acquisition. The E-Flow transaction was accounted for using the acquisition method of accounting, based on the Company’s estimates of the fair value of assets acquired (primarily long-lived intangible assets and goodwill) and liabilities assumed in the acquisition. 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. 4. 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: Goodwill $ — $ — $ 10,000 $ — $ 10,000 Intangible assets — 10,787 — — 10,787 Operating lease assets — 3,280 487 — 3,767 Facility consolidation and exit, and other charges 3,364 7,442 123 34 10,963 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 ) Pre-tax totals $ 3,364 $ 24,262 $ 10,610 $ ( 15,797 ) 22,439 Income tax provision 430 After-tax total $ 22,009 -70- OIL STATES INTERNATIONAL, INC. AND SUBSIDIARIES NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued) 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.” 5. Details of Selected Balance Sheet Accounts Additional information regarding selected balance sheet accounts as of December 31, 2024 and 2023 is presented below (in thousands): December 31, 2024 December 31, 2023 Accounts receivable, net: Trade $ 128,167 $ 128,405 Unbilled revenue 22,242 27,756 Contract assets 40,101 46,746 Other 6,440 4,801 Total accounts receivable 196,950 207,708 Allowance for doubtful accounts ( 2,614 ) ( 4,497 ) $ 194,336 $ 203,211 Allowance for doubtful accounts as a percentage of total accounts receivable 1 % 2 % December 31, 2024 December 31, 2023 Deferred revenue (contract liabilities) $ 52,399 $ 36,757 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. A summary of activity in allowance for doubtful accounts for the years ended December 31, 2024, 2023 and 2022 is provided in Note 16, “Valuation Allowances.” For the majority of contracts with customers, the Company receives payments based upon established contractual terms as products are delivered and services are performed. The Company’s larger project-related contracts within the Offshore Manufactured Products segment often provide for customer payments as milestones are achieved. Contract assets relate to the Company’s right to consideration for work completed but not billed as of December 31, 2024 and 2023 on certain project-related contracts within the Offshore Manufactured Products segment. Contract assets are transferred to unbilled or trade receivables when the right to consideration becomes unconditional. 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 -71- OIL STATES INTERNATIONAL, INC. AND SUBSIDIARIES NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued) 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, 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. 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 year. December 31, 2024 December 31, 2023 Inventories, net: Finished goods and purchased products $ 110,850 $ 103,599 Work in process 34,539 30,546 Raw materials 108,421 109,627 Total inventories 253,810 243,772 Allowance for excess or obsolete inventory ( 38,974 ) ( 41,745 ) $ 214,836 $ 202,027 Estimated Useful Life (years) December 31, 2024 December 31, 2023 Property, plant and equipment, net: Land $ 28,721 $ 30,624 Buildings and leasehold improvements 1 – 40 219,990 221,803 Machinery and equipment 2 – 28 240,955 246,522 Completion-related equipment 2 – 10 134,593 159,110 Office furniture and equipment 1 – 10 36,128 36,115 Vehicles 3 – 10 47,315 52,140 Construction in progress 26,846 7,829 Property, plant and equipment $ 734,548 $ 754,143 Accumulated depreciation ( 467,677 ) ( 473,754 ) $ 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 2024 and 2023. -72- OIL STATES INTERNATIONAL, INC. AND SUBSIDIARIES NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued) For the years ended December 31, 2024, 2023 and 2022, depreciation expense was $ 38.3 million, $ 43.6 million and $ 47.0 million, respectively. December 31, 2024 December 31, 2023 Other noncurrent assets: Deferred compensation plan $ 18,245 $ 17,255 Deferred financing costs 1,619 1,109 Deferred income taxes 1,964 2,211 Other 3,075 2,678 $ 24,903 $ 23,253 December 31, 2024 December 31, 2023 Accrued liabilities: Accrued compensation $ 22,350 $ 27,131 Accrued taxes, other than income taxes 1,234 2,076 Insurance liabilities 3,383 3,839 Accrued interest 1,555 1,690 Accrued commissions 3,237 3,060 Other 5,102 6,431 $ 36,861 $ 44,227 6. Goodwill and Other Intangible Assets Goodwill 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 Products Downhole Technologies Total Balance as of December 31, 2022 (1) $ 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 ) Balance as of December 31, 2024 (1) $ 69,709 $ — $ 69,709 ____________________ (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.” -73- OIL STATES INTERNATIONAL, INC. AND SUBSIDIARIES NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued) Other Intangible Assets The following table presents the gross carrying amount and the related accumulated amortization for major intangible asset classes as of December 31, 2024 and 2023 (in thousands): 2024 2023 Gross Carrying Amount Accumulated Amortization Net Carrying Amount Gross Carrying Amount Accumulated Amortization Net Carrying Amount Other intangible assets: Customer relationships $ 122,859 $ 55,534 $ 67,325 $ 141,342 $ 56,499 $ 84,843 Patents/Technology/Know-how 70,206 39,699 30,507 70,113 34,541 35,572 Tradenames and other 47,729 19,699 28,030 52,505 19,910 32,595 $ 240,794 $ 114,932 $ 125,862 $ 263,960 $ 110,950 $ 153,010 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 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 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. 7. Long-term Debt As of December 31, 2024 and 2023, long-term debt consisted of the following (in thousands): December 31, 2024 December 31, 2023 Revolving credit facility (1) $ — $ — 2026 Notes (2) 122,505 133,037 Other debt and finance lease obligations 2,782 3,092 Total debt 125,287 136,129 Less: Current portion ( 633 ) ( 627 ) Total long-term debt $ 124,654 $ 135,502 ____________________ (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 $ 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): 2025 633 2026 123,085 2027 613 2028 656 2029 48 Thereafter 252 $ 125,287 -74- OIL STATES INTERNATIONAL, INC. AND SUBSIDIARIES NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued) Revolving Credit Facility 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”). 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. customer accounts receivable and inventory and provides for a $ 50.0 million sub-limit for the issuance of letters of credit. 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. 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. 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 2026 Notes discussed below), 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 repayment 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 (i) in the event that availability under the ABL Agreement is less than the greater of (a) 15 % of the borrowing base and (b) $ 14.1 million; (ii) to complete certain specified transactions; or (iii) if an event of default has occurred and is continuing. As of December 31, 2024, the Company had no borrowings outstanding under the ABL Facility and $ 15.9 million of outstanding letters of credit. The total amount available to be drawn as of December 31, 2024 was $ 57.2 million, calculated based on the current borrowing base less outstanding borrowings, if any, and letters of credit. As of December 31, 2024, the Company was in compliance with its debt covenants under the ABL Agreement. 2026 Notes 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 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 -75- OIL STATES INTERNATIONAL, INC. AND SUBSIDIARIES NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued) 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. 2023 Notes 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 In connection with the 2018 acquisition of GEODynamics, Inc., the Company issued a $ 25.0 million promissory note (the "GEO Note") that bore interest at 2.50 % per annum and was scheduled to mature on July 12, 2019. Prior to settlement on July 1, 2022, the carrying amount of the GEO Note was $ 17.5 million, which was the Company’s then-current best estimate of what was owed after set-off for certain indemnification matters. On July 1, 2022, the Company paid $ 10.0 million in cash and issued approximately 1.9 million shares of its common stock (having a market value of $ 10.3 million) to extinguish the GEO Note along with accrued interest of $ 2.2 million. 8. Operating Leases Operating Lease Assets The following table presents the carry value of operating lease assets in the Company’s consolidated balance sheets as of December 31, 2024 and 2023 (in thousands): 2024 2023 Operating lease assets, net $ 19,537 $ 21,970 Operating lease asset additions are offset by a corresponding increase to operating lease liabilities and do not impact the consolidated statement of cash flows at commencement. The non-cash effect of operating lease additions in 2024, 2023 and 2022 totaled $ 1.1 million, $ 1.3 million and $ 0.4 million, respectively. The following table provides details regarding the components of operating lease expense based on the initial term of underlying agreements for the years ended December 31, 2024, 2023 and 2022 (in thousands): 2024 2023 2022 Operating lease expense components: Leases with initial term of greater than 12 months $ 8,588 $ 8,481 $ 8,325 Leases with initial term of 12 months or less 4,159 4,852 4,718 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.” -76- OIL STATES INTERNATIONAL, INC. AND SUBSIDIARIES NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued) Operating Lease Liabilities The following table provides the scheduled maturities of operating lease liabilities as of December 31, 2024 (in thousands): 2025 $ 8,797 2026 6,807 2027 5,712 2028 4,248 2029 2,459 Thereafter 1,329 Total lease payments 29,352 Less: Imputed interest ( 4,079 ) Present value of operating lease liabilities 25,273 Less: Current portion ( 7,284 ) Total long-term operating lease liabilities $ 17,989 Weighted-average remaining lease term (years) 4.0 Weighted-average discount rate 6 % 9. Stockholders’ Equity 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 2024 and 2023 (in thousands): Issued Treasury Stock Outstanding Shares of common stock outstanding – December 31, 2022 76,588 12,684 63,904 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 Restricted stock awards, net of forfeitures 1,387 — 1,387 Shares withheld for taxes on vesting of stock awards — 411 ( 411 ) Purchases of treasury stock — 2,810 ( 2,810 ) Shares of common stock outstanding – December 31, 2024 78,606 17,113 61,493 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. 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. -77- OIL STATES INTERNATIONAL, INC. AND SUBSIDIARIES NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued) Accumulated Other Comprehensive Loss Accumulated other comprehensive loss, reported as a component of stockholders’ equity, primarily relates to fluctuations in currency exchange rates against the U.S. dollar as used to translate certain of the international operations of the Company’s operating segments. 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 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. 10. Income Taxes Consolidated income (loss) before income taxes for the years ended December 31, 2024, 2023 and 2022 consisted of the following (in thousands): 2024 2023 2022 United States $ ( 27,024 ) $ 3,793 $ ( 22,489 ) Foreign 19,172 12,031 18,429 Total $ ( 7,852 ) $ 15,824 $ ( 4,060 ) Components of income tax provision for the years ended December 31, 2024, 2023 and 2022 consisted of the following (in thousands): 2024 2023 2022 Current: United States $ — $ — $ 155 U.S. state 555 1,135 1,191 Foreign 5,207 1,572 2,114 5,762 2,707 3,460 Deferred: United States ( 1,822 ) 2,061 266 U.S. state ( 281 ) ( 721 ) ( 12 ) Foreign ( 253 ) ( 1,114 ) 1,766 ( 2,356 ) 226 2,020 Total income tax provision $ 3,406 $ 2,933 $ 5,480 -78- OIL STATES INTERNATIONAL, INC. AND SUBSIDIARIES NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued) A reconciliation of the U.S. 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 U.S. statutory income tax provision (benefit) $ ( 1,649 ) $ 3,323 $ ( 853 ) Impairment of goodwill 1,619 — — Effect of foreign income taxed at different rates 1,400 ( 425 ) 1,895 Foreign income subject to U.S. taxes 1,214 931 1,876 Utilization of U.S. foreign tax credits ( 1,373 ) ( 1,460 ) ( 291 ) State income taxes, net of federal benefits 502 962 89 Changes in valuation allowances against tax assets (see Note 16) 760 ( 2,010 ) 19 Non-deductible compensation 1,449 1,390 627 Other, net ( 516 ) 222 2,118 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): 2024 2023 Deferred tax assets: Foreign tax credit carryforwards $ 3,423 $ 12,614 Net operating loss carryforwards 14,147 21,065 R&D credit carryforwards 3,880 2,895 Inventories 8,456 11,523 Operating lease liabilities 4,337 4,334 Employee benefits 4,292 4,442 Deferred revenue 8,088 6,437 Other 7,835 7,569 Gross deferred tax asset 54,458 70,879 Valuation allowance (see Note 16) ( 22,088 ) ( 29,638 ) Net deferred tax asset 32,370 41,241 Deferred tax liabilities: Property, plant and equipment ( 8,895 ) ( 14,337 ) Intangible assets ( 21,009 ) ( 26,542 ) Operating lease assets ( 3,108 ) ( 3,632 ) Other ( 2,744 ) ( 2,236 ) Deferred tax liability ( 35,756 ) ( 46,747 ) Net deferred tax liability $ ( 3,386 ) $ ( 5,506 ) 2024 2023 Balance sheet classification: Other non-current assets $ 1,964 $ 2,211 Deferred tax liability ( 5,350 ) ( 7,717 ) Net deferred tax liability $ ( 3,386 ) $ ( 5,506 ) 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. As of December 31, 2024 and 2023, the Company had recorded valuation allowances of $ 13.9 million and $ 17.7 million, respectively, primarily with respect to foreign and U.S. state NOL carryforwards. -79- OIL STATES INTERNATIONAL, INC. AND SUBSIDIARIES NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued) As of December 31, 2024 and 2023, the Company’s foreign tax credit carryforwards totaled $ 3.4 million and $ 12.6 million, respectively. 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. These returns are subject to examination or audit and possible adjustment as a result of assessments by taxing authorities. The Company believes that it has recorded sufficient tax liabilities and does not expect that the resolution of any examination or audit of its tax returns will have a material adverse effect on its consolidated operating results, financial condition or liquidity. Tax years subsequent to 2013 (except for 2016) remain open to U.S. federal tax audit. Foreign subsidiary federal tax returns subsequent to 2018 are subject to audit by various foreign tax authorities. The total amount of unrecognized tax benefits as of December 31, 2024 and 2023 was nil . The Company accrues interest and penalties related to unrecognized tax benefits as a component of the Company’s provision for income taxes. As of December 31, 2024 and 2023, the Company had no accrued interest expense or penalties. 11. Net Income (Loss) Per Share The table below provides a reconciliation of the numerators and denominators of basic and diluted net income (loss) per share for the years ended December 31, 2024, 2023 and 2022 (in thousands, except per share amounts): 2024 2023 2022 Numerators: Net income (loss) $ ( 11,258 ) $ 12,891 $ ( 9,540 ) Less: Income attributable to unvested restricted stock awards — ( 251 ) — Numerator for basic net income (loss) per share ( 11,258 ) 12,640 ( 9,540 ) Effect of dilutive securities: Unvested restricted stock awards — 2 — Numerator for diluted net income (loss) per share $ ( 11,258 ) $ 12,642 $ ( 9,540 ) Denominators: Weighted average number of common shares outstanding 63,497 63,934 62,842 Less: Weighted average number of unvested restricted stock awards outstanding ( 1,493 ) ( 1,244 ) ( 1,204 ) Denominator for basic net income (loss) per share 62,004 62,690 61,638 Effect of dilutive securities: Performance share units — 462 — Denominator for diluted net income (loss) per share 62,004 63,152 61,638 Net income (loss) per share: Basic $ ( 0.18 ) $ 0.20 $ ( 0.15 ) Diluted ( 0.18 ) 0.20 ( 0.15 ) The calculation of diluted net income (loss) per share for the years ended December 31, 2024, 2023 and 2022 excluded 88 thousand shares, 172 thousand shares and 277 thousand shares, respectively, issuable pursuant to outstanding stock options, due to their antidilutive effect. Additionally, shares issuable upon conversion of the 2026 Notes were excluded due to, among other factors, the Company’s share price. -80- OIL STATES INTERNATIONAL, INC. AND SUBSIDIARIES NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued) 12. 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. Stock-based compensation expense recognized during the years ended December 31, 2024, 2023 and 2022 totaled $ 8.7 million, $ 7.0 million and $ 6.9 million, respectively. Restricted Stock Awards The restricted stock program consists of a combination of service-based restricted stock and performance-based restricted stock. The number of performance-based restricted shares ultimately issued under the program is dependent upon achievement of predefined specific performance objectives based on the Company’s cumulative EBITDA 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. Conversely, if actual performance falls below the predefined target, the number of shares vested is reduced. If the actual performance falls below the threshold performance level, no restricted shares will vest. Service-based restricted stock awards generally vest on a straight-line basis over a three-year term. The following table presents changes in restricted stock awards and related information for the year ended December 31, 2024 (shares in thousands): Service-based Restricted Stock Performance- and Service-based Stock Units Number of Shares Weighted Average Grant Date Fair Value Number of Units Weighted Average Grant Date Fair Value Total Number of Restricted Shares and Units Unvested, December 31, 2023 1,233 $ 7.74 927 $ 7.17 2,160 Granted 993 5.88 317 5.77 1,310 Performance adjustment (1) — — 233 5.12 233 Vested ( 663 ) 7.36 ( 444 ) 6.87 ( 1,107 ) Forfeited ( 50 ) 6.69 — — ( 50 ) Unvested, December 31, 2024 1,513 $ 6.72 1,033 $ 6.41 2,546 ____________________ (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. As of December 31, 2024, there was $ 7.3 million of total compensation costs related to unvested restricted stock awards not yet recognized, which is expected to be recognized over a weighted average vesting period of 1.4 years. 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. Long-Term Cash Incentive Awards The Company issued conditional long-term cash incentive awards (“Cash Awards”) totaling $ 1.5 million in both 2024 and 2023. The performance measure for these Cash Awards is relative total stockholder return compared to a peer group of companies measured over a three-year period. The ultimate dollar amount to be awarded for each annual grant ranges from zero to a maximum of $ 3.1 million, but is limited to the targeted award value if the Company’s total stockholder return is negative over the respective performance period. Obligations related to these Cash Awards are classified as liabilities and recognized over the vesting period. -81- OIL STATES INTERNATIONAL, INC. AND SUBSIDIARIES NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued) 13. Retirement Plans Defined Contribution Plans The Company sponsors defined contribution plans, including a 401(k) retirement savings plan (the “401(k) Plan”). Participation in these plans is available to substantially all employees. Effective January 1, 2022, the Company resumed matching contributions to the Company’s 401(k) Plan and Deferred Compensation Plan (defined below) – which were suspended in 2020 in response to the significant decline in industry activity levels due to the COVID-19 pandemic. The Company recognized expenses of $ 6.3 million, $ 7.0 million and $ 3.4 million primarily related to matching contributions under its various defined contribution plans during the years ended December 31, 2024, 2023 and 2022, respectively. Deferred Compensation Plan The Company also maintains a nonqualified deferred compensation plan (the “Deferred Compensation Plan”) that permits eligible directors and employees to elect to defer the receipt of all or a portion of their directors’ fees or salary and annual bonuses. The Deferred Compensation Plan permits the Company to make discretionary contributions to an employee’s account. Since inception of the plan, this discretionary contribution provision has been limited to a matching of the employee’s contributions on a basis equivalent to matching permitted under the Company’s 401(k) Plan, but not subject to the IRS limitations on match-eligible compensation. The vesting of Company contributions to participant accounts is equivalent to the vesting requirements of the Company’s 401(k) Plan. The assets of the Deferred Compensation Plan are held in a Rabbi Trust (the “Trust”) and, therefore, are available to satisfy the claims of the Company’s creditors in the event of bankruptcy or insolvency of the Company. Participants have the ability to direct the plan administrator to invest the assets in their individual accounts, including any discretionary contributions made by the Company, in a selection of funds consistent with those in the Company’s 401(k) Plan. Distributions from the Deferred Compensation Plan are made in cash based upon the participants’ specific deferral payment elections. As of December 31, 2024, Trust assets and amounts payable to plan participants totaled $ 18.2 million, which are classified as “other noncurrent assets” and “other noncurrent liabilities” in the Company’s consolidated balance sheet. The fair value of the investments held by the Trust was based on quoted market prices in active markets (a Level 1 fair value measurement). 14. Segments and Related Information 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. The Offshore Manufactured Products segment designs, manufactures and markets capital equipment utilized on floating production systems, subsea pipeline infrastructure, and offshore drilling rigs and vessels, along with short-cycle and other products. 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. 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 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). -82- OIL STATES INTERNATIONAL, INC. AND SUBSIDIARIES NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued) 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 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) Total Revenues $ 397,900 $ 163,902 $ 130,786 $ — $ 692,588 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 ) 332,621 187,127 151,690 22,839 694,277 Operating income (loss) $ 65,279 $ ( 23,225 ) $ ( 20,904 ) $ ( 22,839 ) $ ( 1,689 ) Capital expenditures $ 18,428 $ 17,920 $ 1,140 $ 20 $ 37,508 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. -83- OIL STATES INTERNATIONAL, INC. AND SUBSIDIARIES NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued) Year Ended December 31, 2023 Offshore Manufactured Products (1) Completion and Production Services (2) Downhole Technologies (3) Corporate Total Revenues $ 381,711 $ 242,633 $ 157,939 $ — $ 782,283 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 ) 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 Corporate Total Revenues $ 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 Total assets $ 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. 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 Completion and Production Services segment -84- OIL STATES INTERNATIONAL, INC. AND SUBSIDIARIES NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued) 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 Completion and Production Services Downhole Technologies 2024 2023 2022 2024 2023 2022 2024 2023 2022 Project-driven: Products $ 232,867 $ 235,080 $ 189,842 $ — $ — $ — $ — $ — $ — Services 123,906 112,742 98,968 — — — — — — Total project-driven 356,773 347,822 288,810 — — — — — — Military and other products 41,127 33,889 33,560 — — — — — — Short-cycle: Products — — — — — — 128,571 149,581 162,161 Services — — — 163,902 242,633 231,189 2,215 8,358 21,986 Total short-cycle — — — 163,902 242,633 231,189 130,786 157,939 184,147 $ 397,900 $ 381,711 $ 322,370 $ 163,902 $ 242,633 $ 231,189 $ 130,786 $ 157,939 $ 184,147 Financial information by geographic location for the years ended December 31, 2024, 2023 and 2022, is summarized below (in thousands). Revenues are attributable to countries based on the location of the entity selling the products or performing the services and include export sales. Long-lived assets are attributable to countries based on the physical location of the operations and its operating assets and do not include intercompany receivable balances. United States United Kingdom Singapore Other Total 2024 Revenues from unaffiliated customers $ 484,945 $ 103,814 $ 38,835 $ 64,994 $ 692,588 Long-lived assets 354,487 75,014 16,090 36,388 481,979 2023 Revenues from unaffiliated customers $ 594,808 $ 81,643 $ 48,131 $ 57,701 $ 782,283 Long-lived assets 407,457 79,607 6,485 41,687 535,236 2022 Revenues from unaffiliated customers $ 571,008 $ 82,687 $ 34,380 $ 49,631 $ 737,706 Long-lived assets 443,818 76,377 14,218 41,531 575,944 15. Commitments and Contingencies 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. Although the Company can give no assurance about the outcome of pending legal and administrative proceedings and the effect such outcomes may have on the Company, management believes that any ultimate liability resulting from the outcome of such proceedings, to the extent not otherwise covered by insurance, will not have a material adverse effect on the Company’s consolidated financial position, results of operations or liquidity. -85- OIL STATES INTERNATIONAL, INC. AND SUBSIDIARIES NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued) 16. Valuation Allowances Activity in the valuation accounts was as follows (in thousands): Balance at Beginning of Period Charged to Costs and Expenses Deductions (net of recoveries) Translation and Other, Net Balance at End of Period Year Ended December 31, 2024: Allowance for doubtful accounts receivable $ 4,497 $ 933 $ ( 2,792 ) $ ( 24 ) $ 2,614 Allowance for excess or obsolete inventory 41,745 3,108 ( 5,804 ) ( 75 ) 38,974 Valuation allowance on deferred tax assets (1) 29,638 760 ( 8,023 ) ( 287 ) 22,088 Year Ended December 31, 2023: Allowance for doubtful accounts receivable $ 5,226 $ ( 336 ) $ ( 428 ) $ 35 $ 4,497 Allowance for excess or obsolete inventory 37,681 5,229 ( 1,437 ) 272 41,745 Valuation allowance on deferred tax assets (2) 36,749 ( 2,010 ) ( 5,020 ) ( 81 ) 29,638 Year Ended December 31, 2022: Allowance for doubtful accounts receivable $ 4,471 $ 2,066 $ ( 1,266 ) $ ( 45 ) $ 5,226 Allowance for excess or obsolete inventory 40,440 3,739 ( 5,911 ) ( 587 ) 37,681 Valuation allowance on deferred tax assets 37,643 19 ( 1,027 ) 114 36,749 ________________ (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. -86-