UNITED STATES
SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549

FORM 10-Q

(Mark One)

þ		QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934

o		TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934

Commission file number: 001-16337

OIL STATES INTERNATIONAL, INC.

(Exact name of registrant as specified in its charter)

Delaware		76-0476605
(State or other jurisdiction of		(I.R.S. Employer
incorporation or organization)		Identification No.)
Three Allen Center, 333 Clay Street, Suite 4620,
Houston, Texas		77002
(Address of principal executive offices)		(Zip Code)

(713) 652-0582

(Registrant’s telephone number, including area code)

None

(Former name, former address and former fiscal year,

if changed since last report)

Indicate by check mark whether the registrant (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days. YES þ NO o

Indicate by check mark whether the registrant has submitted electronically and posted on its corporate Web site, if any, every Interactive Data File required to be submitted and posted pursuant to Rule 405 of Regulation S-T (§232.405 of this chapter) during the preceding 12 months (or for such shorter period that the registrant was required to submit and post such files) YES þ NO o

Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer or a smaller reporting company. See the definitions of “accelerated filer,” “large accelerated filer” and “smaller reporting company in Rule 12b-2 of the Exchange Act. (Check one):

Large Accelerated Filer þ		Accelerated Filer o		Non-Accelerated Filer o (Do not check if a smaller reporting company)		Smaller Reporting Company o

Indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Exchange Act). YES o NO þ

The Registrant had 51,331,134 shares of common stock, par value $0.01, outstanding and 3,302,071 shares of treasury
stock as of July 29, 2011.

 

 

OIL STATES INTERNATIONAL, INC.

INDEX

		Page No.
Part I — FINANCIAL INFORMATION
Item 1. Financial Statements:
Condensed Consolidated Financial Statements
Unaudited Condensed Consolidated Statements of Income for the Three and Six Month Periods Ended June 30, 2011 and 2010			3
Consolidated Balance Sheets — June 30, 2011 (unaudited) and December 31, 2010			4
Unaudited Condensed Consolidated Statements of Cash Flows for the Six Months Ended June 30, 2011 and 2010			5
Notes to Unaudited Condensed Consolidated Financial Statements			6-15
Cautionary Statement Regarding Forward — Looking Statements			16
Item 2. Management’s Discussion and Analysis of Financial Condition and Results of Operations			16-26
Item 3. Quantitative and Qualitative Disclosures About Market Risk			26
Item 4. Controls and Procedures			26-27
Part II — OTHER INFORMATION
Item 1. Legal Proceedings			27
Item 1A. Risk Factors			27
Item 6. Exhibits			27
(a) Index of Exhibits			27-28
Signature Page			29
EX-31.1
EX-31.2
EX-32.1
EX-32.2
EX-101 INSTANCE DOCUMENT
EX-101 SCHEMA DOCUMENT
EX-101 CALCULATION LINKBASE DOCUMENT
EX-101 LABELS LINKBASE DOCUMENT
EX-101 PRESENTATION LINKBASE DOCUMENT
EX-101 DEFINITION LINKBASE DOCUMENT

PART I — FINANCIAL INFORMATION

ITEM 1.		Financial Statements

OIL STATES INTERNATIONAL, INC. AND SUBSIDIARIES

UNAUDITED CONDENSED CONSOLIDATED STATEMENTS OF INCOME
(In Thousands, Except Per Share Amounts)

		THREE MONTHS ENDED								SIX MONTHS ENDED
		JUNE 30,								JUNE 30,
		2011				2010				2011				2010
Revenues		$	820,317			$	594,532			$	1,580,758			$	1,126,877
Costs and expenses:
Cost of sales and services			616,778				469,482				1,191,176				875,992
Selling, general and administrative expenses			42,765				37,183				86,472				72,336
Depreciation and amortization expense			45,238				30,600				90,390				61,678
Other operating (income) expense			373				(486	)			2,781				(687	)
			705,154				536,779				1,370,819				1,009,319
Operating income			115,163				57,753				209,939				117,558
Interest expense, net of capitalized interest			(12,532	)			(3,500	)			(22,781	)			(6,971	)
Interest income			235				103				1,248				181
Other income/(expense)			490				(158	)			684				634
Income before income taxes			103,356				54,198				189,090				111,402
Income tax expense			(28,887	)			(16,590	)			(52,270	)			(33,379	)
Net income			74,469				37,608				136,820				78,023
Less: Net income attributable to noncontrolling interest			226				131				500				303
Net income attributable to Oil States International, Inc.		$	74,243			$	37,477			$	136,320			$	77,720
Net income per share attributable to Oil States International, Inc. common stockholders
Basic		$	1.45			$	0.75			$	2.67			$	1.55
Diluted		$	1.34			$	0.71			$	2.48			$	1.49
Weighted average number of common shares outstanding:
Basic			51,231				50,146				51,083				50,021
Diluted			55,270				52,455				55,061				52,188

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

OIL STATES INTERNATIONAL, INC. AND SUBSIDIARIES

CONSOLIDATED BALANCE SHEETS
(In Thousands)

		JUNE 30,				DECEMBER 31,
		2011				2010
		(UNAUDITED)
ASSETS
Current assets:
Cash and cash equivalents		$	123,304			$	96,350
Accounts receivable, net			552,024				478,739
Inventories, net			592,679				501,435
Prepaid expenses and other current assets			29,350				23,480
Total current assets			1,297,357				1,100,004
Property, plant, and equipment, net			1,436,714				1,252,657
Goodwill, net			491,507				475,222
Other intangible assets, net			137,961				139,421
Other noncurrent assets			61,515				48,695
Total assets		$	3,425,054			$	3,015,999
LIABILITIES AND STOCKHOLDERS’ EQUITY
Current liabilities:
Accounts payable and accrued liabilities		$	315,672			$	304,739
Income taxes			7,429				4,604
Current portion of long-term debt and capitalized leases			192,556				181,175
Deferred revenue			54,598				60,847
Other current liabilities			6,541				2,810
Total current liabilities			576,796				554,175
Long-term debt and capitalized leases			884,750				731,732
Deferred income taxes			90,774				81,198
Other noncurrent liabilities			21,012				19,961
Total liabilities			1,573,332				1,387,066
Stockholders’ equity:
Oil States International, Inc. stockholders’ equity:
Common stock			546				541
Additional paid-in capital			531,618				508,429
Retained earnings			1,264,453				1,128,133
Accumulated other comprehensive income			150,264				84,549
Treasury stock			(96,201	)			(93,746	)
Total Oil States International, Inc. stockholders’ equity			1,850,680				1,627,906
Noncontrolling interest			1,042				1,027
Total stockholders’ equity			1,851,722				1,628,933
Total liabilities and stockholders’ equity		$	3,425,054			$	3,015,999

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

OIL STATES INTERNATIONAL, INC. AND SUBSIDIARIES

UNAUDITED CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS
(In Thousands)

		SIX MONTHS
		ENDED JUNE 30,
		2011				2010
Cash flows from operating activities:
Net income		$	136,820			$	78,023
Adjustments to reconcile net income to net cash provided by operating activities:
Depreciation and amortization			90,390				61,678
Deferred income tax provision (benefit)			10,788				(4,909	)
Excess tax benefits from share-based payment arrangements			(6,198	)			(985	)
Non-cash compensation charge			7,198				6,848
Accretion of debt discount			3,823				3,560
Amortization of deferred financing costs			2,914				526
Other, net			(889	)			(1,748	)
Changes in operating assets and liabilities, net of effect from acquired businesses:
Accounts receivable			(66,481	)			561
Inventories			(88,781	)			(51,066	)
Accounts payable and accrued liabilities			7,802				26,840
Taxes payable			9,977				(5,344	)
Other current assets and liabilities, net			(10,728	)			(28,129	)
Net cash flows provided by operating activities			96,635				85,855
Cash flows from investing activities:
Acquisitions of businesses, net of cash acquired			(212	)			—
Capital expenditures, including capitalized interest			(230,253	)			(76,077	)
Other, net			(850	)			1,853
Net cash flows used in investing activities			(231,315	)			(74,224	)
Cash flows from financing activities:
Revolving credit borrowings and (repayments), net			(428,682	)			—
6 1/2% senior notes issued			600,000				—
Term loan repayments			(7,494	)			—
Debt and capital lease repayments			(587	)			(255	)
Issuance of common stock from share-based payment arrangements			9,792				7,288
Excess tax benefits from share-based payment arrangements			6,198				985
Payment of financing costs			(12,640	)			—
Other, net			(2,456	)			(1,363	)
Net cash flows provided by financing activities			164,131				6,655
Effect of exchange rate changes on cash			(2,399	)			(5,005	)
Net increase in cash and cash equivalents from continuing operations			27,052				13,281
Net cash used in discontinued operations — operating activities			(98	)			(75	)
Cash and cash equivalents, beginning of period			96,350				89,742
Cash and cash equivalents, end of period		$	123,304			$	102,948

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

OIL STATES INTERNATIONAL, INC. AND SUBSIDIARIES

NOTES TO UNAUDITED CONDENSED CONSOLIDATED
FINANCIAL STATEMENTS

1. ORGANIZATION AND BASIS OF PRESENTATION

     The accompanying unaudited condensed consolidated financial statements of Oil States International, Inc. and its wholly-owned subsidiaries (referred to in this report as we or the Company) have been prepared pursuant to the rules and regulations of the Securities and Exchange Commission (the Commission) pertaining to interim financial information. Certain information in footnote disclosures normally included in financial statements prepared in accordance with U.S. generally accepted accounting principles (GAAP) have been condensed or omitted pursuant to these rules and regulations. The unaudited financial statements included in this report reflect all the adjustments, consisting of normal recurring adjustments, which the Company considers necessary for a fair presentation of the results of operations for the interim periods covered and for the financial condition of the Company at the date of the interim balance sheet. Results for the interim periods are not necessarily indicative of results for the full year.

     The preparation of consolidated financial statements in conformity with GAAP requires the use of estimates and assumptions by management in determining the reported amounts of assets and liabilities and disclosures of contingent assets and liabilities at the date of the consolidated financial statements and the reported amounts of revenues and expenses during the reporting period. If the underlying estimates and assumptions, upon which the financial statements are based, change in future periods, actual amounts may differ from those included in the accompanying condensed consolidated financial statements.

     The financial statements included in this report should be read in conjunction with the Company’s audited financial statements and accompanying notes included in its Annual Report on Form 10-K for the year ended December 31, 2010 (the 2010 Form 10-K).

2. 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. Unless otherwise discussed, management believes that the impact of recently issued standards, which are not yet effective, will not have a material impact on the Company’s consolidated financial statements upon adoption.

     In June 2011, the FASB issued amendments to disclosure requirements for the presentation of comprehensive income. This guidance eliminates the option to present components of other comprehensive income as part of the statement of changes in stockholders’ equity. The amendments require that all nonowner changes in stockholders’ equity be presented either in a single continuous statement of comprehensive income or in two separate but consecutive statements. In the two-statement approach, the first statement should present total net income and its components followed consecutively by a second statement that should present total other comprehensive income, the components of other comprehensive income, and the total of comprehensive income. The amendments should be applied retrospectively. For public entities, the amendments are effective for fiscal years, and interim periods within those years, beginning after December 15, 2011. Early adoption is permitted, because compliance with the amendments is already permitted. The amendments do not require any transition disclosures.

3. DETAILS OF SELECTED BALANCE SHEET ACCOUNTS

     Additional information regarding selected balance sheet accounts is presented below (in thousands):

		JUNE 30,				DECEMBER 31,
		2011				2010
Accounts receivable, net:
Trade		$	426,712			$	365,988
Unbilled revenue			124,038				113,389
Other			4,147				3,462
Total accounts receivable			554,897				482,839
Allowance for doubtful accounts			(2,873	)			(4,100	)
		$	552,024			$	478,739

		JUNE 30,				DECEMBER 31,
		2011				2010
Inventories, net:
Tubular goods		$	377,845			$	332,720
Other finished goods and purchased products			78,324				71,266
Work in process			56,401				45,662
Raw materials			89,224				60,241
Total inventories			601,794				509,889
Allowance for obsolescence			(9,115	)			(8,454	)
		$	592,679			$	501,435

		ESTIMATED				JUNE 30,				DECEMBER 31,
		USEFUL LIFE				2011				2010
Property, plant and equipment, net:
Land						$	46,424			$	43,411
Buildings and leasehold improvements		1-40 years					209,074				193,617
Machinery and equipment		2-29 years					330,657				311,217
Accommodations assets		3-15 years					952,413				840,002
Rental tools		4-10 years					179,789				166,245
Office furniture and equipment		1-10 years					38,946				36,325
Vehicles		2-10 years					87,913				82,783
Construction in progress							204,308				113,773
Total property, plant and equipment							2,049,524				1,787,373
Accumulated depreciation							(612,810	)			(534,716	)
						$	1,436,714			$	1,252,657

		JUNE 30,				DECEMBER 31,
		2011				2010
Accounts payable and accrued liabilities:
Trade accounts payable		$	241,479			$	224,543
Accrued compensation			38,421				47,760
Insurance liabilities			9,708				8,615
Accrued taxes, other than income taxes			8,132				4,887
Liabilities related to discontinued operations			2,170				2,268
Other			15,762				16,666
		$	315,672			$	304,739

4. EARNINGS PER SHARE

     The calculation of earnings per share attributable to the Company is presented below (in thousands, except per share amounts):

		THREE MONTHS ENDED								SIX MONTHS ENDED
		JUNE 30,								JUNE 30,
		2011				2010				2011				2010
Basic earnings per share:
Net income attributable to Oil States International, Inc.		$	74,243			$	37,477			$	136,320			$	77,720
Weighted average number of shares outstanding			51,231				50,146				51,083				50,021
Basic earnings per share		$	1.45			$	0.75			$	2.67			$	1.55
Diluted earnings per share:
Net income attributable to Oil States International, Inc.		$	74,243			$	37,477			$	136,320			$	77,720
Weighted average number of shares outstanding			51,231				50,146				51,083				50,021
Effect of dilutive securities:
Options on common stock			679				631				703				615
2 3/8% Convertible Senior Subordinated Notes			3,200				1,507				3,094				1,364
Restricted stock awards and other			160				171				181				188
Total shares and dilutive securities			55,270				52,455				55,061				52,188
Diluted earnings per share		$	1.34			$	0.71			$	2.48			$	1.49

     Our calculation of diluted earnings per share for the three and six months ended June 30, 2011 excludes 178,855 shares and 177,702 shares, respectively, issuable pursuant to outstanding stock options and restricted stock awards due to their antidilutive effect. Our calculation of diluted earnings per share for the three and six months ended June 30, 2010 excludes 466,315 shares and 434,891 shares, respectively, issuable pursuant to outstanding stock options and restricted stock awards due to their antidilutive effect.

5. BUSINESS ACQUISITIONS AND GOODWILL

     On December 30, 2010, we acquired all of the ordinary shares of The MAC Services Group Limited (The MAC), through a Scheme of Arrangement (the Scheme) under the Corporations Act of Australia. The MAC is headquartered in Sydney, Australia and supplies accommodations services to the Australian natural resources market. Under the terms of the Scheme, each shareholder of The MAC received $3.95 (A$3.90) per share in cash. This price represents a total purchase price of $638 million, net of cash acquired plus debt assumed of $87 million. The Company funded the acquisition with cash on hand and borrowings available under our five-year, $1.05 billion senior secured bank facilities. The MAC’s operations have been included as part of our accommodations segment beginning in 2011.

     The following unaudited pro forma supplemental financial information presents the consolidated results of operations of the Company and The MAC as if the acquisition of The MAC had occurred on January 1, 2010. The Company has adjusted historical financial information to give effect to pro forma items that are directly attributable to the acquisition and are expected to have a continuing impact on the consolidated results. These items include adjustments to record the incremental amortization and depreciation expense related to the increase in fair values of the acquired assets, interest expense related to borrowings under the Company’s senior credit facilities to fund the acquisition and to reclassify certain items to conform to the Company’s financial reporting presentation. The unaudited pro forma results do not purport to be indicative of the results of operations had the transaction occurred on the date indicated or of future results for the combined entities (in thousands, except per share data):

		Three Months Ended				Six Months Ended
		June 30, 2010				June 30, 2010
		(Unaudited)
Revenues		$	621,203			$	1,178,856
Net income attributable to Oil States International, Inc.			37,828				77,571
Net income per share attributable to Oil States International, Inc. common stockholders
Basic		$	0.75			$	1.55
Diluted		$	0.72			$	1.49

     Included in the pro forma results above for the three and six months ended June 30, 2010 are (1) depreciation of the increased recorded value of property, plant and equipment acquired as part of The MAC, totaling $2.2 million and $4.4 million, respectively, net of tax, or $0.04 and $0.08 per diluted share, respectively; (2) amortization expense for intangibles acquired as part of the purchase of The MAC, totaling $1.5 million and $3.0 million, respectively, net of tax, or $0.03 and $0.06 per diluted share, respectively; and (3) interest expense of $2.7 million and $5.4 million, respectively, net of tax, or $0.05 and $0.10 per diluted share, respectively.

     On December 20, 2010, we also acquired all of the operating assets of Mountain West Oilfield Service and Supplies, Inc. and Ufford Leasing LLC (Mountain West) for total consideration of $47.1 million and estimated contingent consideration of $4.0 million. Headquartered in Vernal, Utah, with operations in the Rockies and the Bakken Shale region, Mountain West provides remote site workforce accommodations to the oil and gas industry. Mountain West has been included in the accommodations segment since its date of acquisition.

     On October 5, 2010, we purchased all of the equity of Acute Technological Services, Inc. (Acute) for total consideration of $30.2 million. Headquartered in Houston, Texas and with additional operations in Brazil, Acute provides metallurgical and welding innovations to the oil and gas industry in support of critical, complex subsea component manufacturing and deepwater riser fabrication on a global basis. Acute has been included in the offshore products segment since its date of acquisition.

     During the three and six months ended June 30, 2011, the Company recognized $0.3 million and $1.4 million, respectively, of costs in connection with the acquisitions that were expensed.

     Changes in the carrying amount of goodwill for the six month period ended June 30, 2011 are as follows (in thousands):

		Well Site Services
						Drilling
		Rental				and												Offshore				Tubular
		Tools				Other				Subtotal				Accommodations				Products				Services				Total
Balance as of December 31, 2009
Goodwill		$	169,311			$	22,767			$	192,078			$	58,358			$	85,599			$	62,863			$	398,898
Accumulated Impairment Losses			(94,528	)			(22,767	)			(117,295	)			—				—				(62,863	)			(180,158	)
			74,783				—				74,783				58,358				85,599				—				218,740
Goodwill acquired			—				—				—				239,080				15,242				—				254,322
Foreign currency translation and other changes			723				—				723				1,624				(187	)			—				2,160
			75,506				—				75,506				299,062				100,654				—				475,222
Balance as of December 31, 2010
Goodwill			170,034				22,767				192,801				299,062				100,654				62,863				655,380
Accumulated Impairment Losses			(94,528	)			(22,767	)			(117,295	)			—				—				(62,863	)			(180,158	)
			75,506				—				75,506				299,062				100,654				—				475,222
Goodwill acquired			—				—				—				503				198				—				701
Foreign currency translation and other changes			457				—				457				14,973				154				—				15,584
			75,963				—				75,963				314,538				101,006				—				491,507
Balance as of June 30, 2011
Goodwill			170,491				22,767				193,258				314,538				101,006				62,863				671,665
Accumulated Impairment Losses			(94,528	)			(22,767	)			(117,295	)			—				—				(62,863	)			(180,158	)
		$	75,963			$	—			$	75,963			$	314,538			$	101,006			$	—			$	491,507

6. DEBT

     As of June 30, 2011 and December 31, 2010, long-term debt consisted of the following (in thousands):

		June 30,				December 31,
		2011				2010
		(Unaudited)
U.S. revolving credit facility, which matures December 10, 2015, with available commitments up to $500 million and with an average interest rate of 2.8% for the six month period ended June 30, 2011		$	—			$	345,600
U.S. term loan, which matures December 10, 2015, of $200 million; 1.25% of aggregate principal repayable per quarter in 2011, 2.5% per quarter thereafter; average interest rate of 2.6% for the six month period ended June 30, 2011			195,000				200,000
Canadian revolving credit facility, which matures December 10, 2015, with available commitments up to $250 million and with an average interest rate of 3.9% for the six month period ended June 30, 2011			—				62,538
Canadian term loan, which matures December 10, 2015, of $100 million; 1.25% of aggregate principal repayable per quarter in 2011, 2.5% per quarter thereafter; average interest rate of 3.7% for the six month period ended June 30, 2011			101,524				100,955
Australian revolving credit facility, which matures October 15, 2013, of A$75 million			—				25,305
6 1/2% senior unsecured notes — due June 2019			600,000				—
2 3/8% contingent convertible senior subordinated notes, net — due 2025			166,931				163,108
Subordinated unsecured notes payable to sellers of businesses, fixed interest rate of 6%, which mature in 2012			4,000				4,000
Capital lease obligations and other debt			9,851				11,401
Total debt			1,077,306				912,907
Less: Current maturities			192,556				181,175
Total long-term debt and capitalized leases		$	884,750			$	731,732

     On June 1, 2011, the Company sold $600 million aggregate principal amount of 6 1/2% senior unsecured notes (6 1/2% Notes) due 2019 through a private placement to qualified institutional buyers.

     The 6 1/2% Notes are senior unsecured obligations of the Company and guaranteed by our U.S. subsidiaries (the Guarantors) which bear interest at a rate of 6 1/2% per annum and mature on June 1, 2019. At any time prior to June 1, 2014, the Company may redeem up to 35% of the 6 1/2% Notes at a redemption price of 106.500% of the principal amount, plus accrued and unpaid interest to the redemption date, with the proceeds of certain equity offerings. Prior to June 1, 2014, the Company may redeem some or all of the 6 1/2% Notes for cash at a redemption price equal to 100% of their principal amount plus an applicable make-whole premium and accrued and unpaid interest to the redemption date. On and after June 1, 2014, the Company may redeem some or all of the 6 1/2% Notes at redemption prices (expressed as percentages of principal amount), plus accrued and unpaid interest to the redemption date. The percentages of the principal amount are as follows:

Twelve Month Period Beginning		% of Principal
June 1,		Amount
2014			104.875	%
2015			103.250	%
2016			101.625	%
2017			100.000	%

     In connection with the note offering, the Company, the Guarantors of the 6 1/2% Notes and the initial purchasers entered into a registration rights agreement at the closing of the offering. Pursuant to the registration rights agreement, the Company and the Guarantors agreed that they will, subject to certain exceptions, use commercially reasonable efforts to file with the Commission and cause to become effective a registration statement relating to an offer to exchange the 6 1/2% Notes for an issue of Commission-registered 6 1/2% Notes with identical terms. If the exchange offer is not completed on or before the date that is 365 days after the closing date of this offering (the Target Registration Date), then the Company agreed to pay each holder of the 6 1/2% Notes liquidated damages in the form of additional interest in an amount equal to 0.25% per annum of the principal amount of notes held by such holder, with respect to the first 90 days after the Target Registration Date (which rate shall be increased by an additional 0.25% per annum for each subsequent 90-day period that such liquidated damages continue to accrue), in each case until the exchange offer is completed or the shelf registration statement is declared effective or is no longer required to be effective; provided, however, that at no time will the amount of liquidated damages accruing exceed in the aggregate 0.5% per annum. The maximum additional interest potentially payable pursuant to this provision would be $2.6 million.

      The Company utilized approximately $515 million of the net proceeds of the 6 1/2% Notes offering in June 2011 to repay borrowings under its senior secured credit facilities. The remaining net proceeds of approximately $75 million were utilized for general corporate purposes.

     As of June 30, 2011, we classified the $175.0 million principal amount of our 2 3/8% Contingent Convertible Senior Subordinated Notes (2 3/8% Notes), net of unamortized discount, as a current liability because certain contingent conversion thresholds based on the Company’s stock price were met at that date and, as a result, 2 3/8% Note holders could present their notes for conversion during the quarter following the June 30, 2011 measurement date. If a 2 3/8% Note holder chooses to present their notes for conversion during a future quarter prior to the first put/call date in July 2012, they will receive cash up to $1,000 for each 2 3/8% Note plus Company common stock for any excess valuation over $1,000 using the conversion rate of the 2 3/8% Notes of 31.496 multiplied by the Company’s average common stock price over a ten trading day period following presentation of the 2 3/8% Notes for conversion. The future convertibility and resultant balance sheet classification of this liability will be monitored at each quarterly reporting date and will be analyzed dependent upon market prices of the Company’s common stock during the prescribed measurement periods.

     The following table presents the carrying amount of our 2 3/8% Notes in our consolidated balance sheets (in thousands):

		June 30, 2011				December 31, 2010
Carrying amount of the equity component in additional paid-in capital		$	28,449			$	28,449
Principal amount of the liability component		$	175,000			$	175,000
Less: Unamortized discount			8,069				11,892
Net carrying amount of the liability component		$	166,931			$	163,108

Unamortized Discount — 2 3/8% Notes

     The effective interest rate is 7.17% for our 2 3/8% Notes. Interest expense on the 2 3/8% Notes, excluding amortization of debt issue costs, was as follows (in thousands):

		Three months ended								Six months ended
		June 30,								June 30,
		2011				2010				2011				2010
Interest expense		$	2,968			$	2,835			$	5,901			$	5,638

		June 30, 2011
Remaining period over which discount will be amortized		1.0 years
Conversion price		$	31.75
Number of shares to be delivered upon conversion (1)			3,321,836
Conversion value in excess of principal amount (in thousands) (1)		$	265,448
Derivative transactions entered into in connection with the convertible notes		None

     On July 13, 2011, The MAC entered into a A$150 million revolving loan facility governed by a Facility Agreement (the Facility Agreement) between The MAC and National Australia Bank Limited and guaranteed by the Company. The Facility Agreement amends The MAC’s existing A$75 million revolving loan facility on substantially the same terms, including the maturity date of the Facility Agreement of November 30, 2013. As of June 30, 2011, there were no borrowings outstanding under the Australian facility.

     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 our 2 3/8% Notes, our 6 1/2% Notes and our debt under our revolving credit facilities, on the accompanying consolidated balance sheets approximate their fair values.

     The fair values of our 2 3/8% and 6 1/2% Notes are estimated based on quoted prices in active markets (Level 1 fair value measurements). The carrying and fair values of these notes were as follows (in thousands):

						June 30, 2011								December 31, 2010
		Interest				Carrying				Fair				Carrying				Fair
		Rate				Value				Value				Value				Value
6 1/2% Notes
Principal amount due 2019			6 1/2	%		$	600,000			$	606,750			$	—			$	—
2 3/8% Notes
Principal amount due 2025			2 3/8	%		$	175,000			$	440,767			$	175,000			$	354,057
Less: unamortized discount							8,069				—				11,892				—
Net value						$	166,931			$	440,767			$	163,108			$	354,057

     As of June 30, 2011, the Company had approximately $123.3 million of cash and cash equivalents and $727.4 million of the Company’s $1.0 billion U.S. and Canadian credit facilities available for future financing needs. The Company also had availability totaling A$75 million under its Australian credit facility. As of June 30, 2011, we had $18.5 million of outstanding letters of credit under these credit facilities.

     Interest expense on the condensed consolidated statements of income is net of capitalized interest of $1.0 million and $2.5 million, respectively, for the three and six months ended June 30, 2011 and less than $0.1 million for the same periods in 2010.

7. COMPREHENSIVE INCOME AND CHANGES IN COMMON STOCK OUTSTANDING

     Comprehensive income for the three and six months ended June 30, 2011 and 2010 was as follows (in thousands):

		THREE MONTHS								SIX MONTHS
		ENDED JUNE 30,								ENDED JUNE 30,
		2011				2010				2011				2010
Net income		$	74,469			$	37,608			$	136,820			$	78,023
Other comprehensive income:
Foreign currency translation adjustment			35,052				(23,788	)			65,715				(15,203	)
Total other comprehensive income/(loss)			35,052				(23,788	)			65,715				(15,203	)
Comprehensive income			109,521				13,820				202,535				62,820
Comprehensive income attributable to noncontrolling interest			(226	)			(131	)			(500	)			(303	)
Comprehensive income attributable to Oil States International, Inc.		$	109,295			$	13,689			$	202,035			$	62,517

     The increases in other comprehensive income in the three and six months ended June 30, 2011 compared to the same periods in 2010 were due primarily to the translation of our net Canadian and Australian accommodations assets at varying exchange rates.

Stock Activity

Shares of common stock outstanding — January 1, 2011			50,838,863
Shares issued upon exercise of stock options and vesting of stock awards			510,685
Shares withheld for taxes on vesting of restricted stock awards and transferred to treasury			(32,923	)
Shares of common stock outstanding — June 30, 2011			51,316,625

8. STOCK BASED COMPENSATION

     During the first six months of 2011, we granted restricted stock awards totaling 210,134 shares valued at a total of $15.8 million. Of the restricted stock awards granted in the first six months of 2011, a total of 193,550 awards vest in four equal annual installments starting in February 2012. A total of 184,700 stock options with a ten-year term were awarded in the six months ended June 30, 2011 with an average exercise price of $75.37 and will vest in four equal annual installments starting in February 2012.

     Stock based compensation pre-tax expense recognized in the six month periods ended June 30, 2011 and 2010 totaled $7.2 million and $6.8 million, or $0.10 and $0.10 per diluted share after tax, respectively. Stock based compensation pre-tax expense recognized in the three month periods ended June 30, 2011 and 2010 totaled $3.8 million and $3.1 million, or $0.05 and $0.04 per diluted share after tax, respectively. The total fair value of restricted stock awards that vested during the six months ended June 30, 2011 and 2010 was $12.2 million and $7.4 million, respectively. At June 30, 2011, $31.1 million of compensation cost related to unvested stock options and restricted stock awards attributable to future performance had not yet been recognized.

9. INCOME TAXES

     Income tax expense for interim periods is based on estimates of the effective tax rate for the entire fiscal year. The Company’s income tax provision for the three and six months ended June 30, 2011 totaled $28.9 million, or 27.9% of pretax income, and $52.3 million, or 27.6% of pretax income, respectively, compared to $16.6 million, or 30.6% of pretax income, and $33.4 million, or 30.0% of pretax income, respectively, for the three and six months ended June 30, 2010. The decrease in the effective tax rate from the prior year was largely the result of foreign sourced income in 2011 being taxed at lower statutory rates compared to 2010.

10. SEGMENT AND RELATED INFORMATION

     In accordance with current accounting standards regarding disclosures about segments of an enterprise and related information, the Company has identified the following reportable segments: well site services, accommodations, offshore products and tubular services. The Company’s reportable segments represent strategic business units that offer different products and services. They are managed separately because each business requires different technology and marketing strategies. Most of the businesses were initially acquired as a unit, and the management at the time of the acquisition was retained. Subsequent acquisitions have been direct extensions to

our business segments. The separate business lines within the well site services segment have been disclosed to provide additional detail for that segment. Results of a portion of our accommodations segment supporting traditional oil and natural gas drilling activities are somewhat seasonal with increased activity occurring in the winter drilling season.

     Financial information by business segment for each of the three and six months ended June 30, 2011 and 2010 is summarized in the following table (in thousands):

														Equity in
		Revenues from				Depreciation								income/(loss) of
		unaffiliated				and				Operating				unconsolidated				Capital
Three months ended June 30, 2011		customers				amortization				income (loss)				affiliates				expenditures				Total assets
Well site services —
Rental tools		$	112,658			$	10,299			$	25,103			$	—			$	18,654			$	410,370
Drilling services			40,998				4,806				6,370				—				5,754				116,672
Total well site services			153,656				15,105				31,473				—				24,408				527,042
Accommodations			202,943				26,195				57,750				(1	)			106,873				1,700,385
Offshore products			131,742				3,358				18,770				(228	)			3,519				588,472
Tubular services			331,976				377				16,956				231				2,780				521,675
Corporate and eliminations			—				203				(9,786	)			—				64				87,480
Total		$	820,317			$	45,238			$	115,163			$	2			$	137,644			$	3,425,054

														Equity in
		Revenues from				Depreciation								income/(loss) of
		unaffiliated				and				Operating				unconsolidated				Capital
Three months ended June 30, 2010		customers				amortization				income (loss)				affiliates				expenditures				Total assets
Well site services —
Rental tools		$	79,119			$	10,405			$	10,395			$	—			$	10,446			$	351,981
Drilling services			34,137				6,198				(1,070	)			—				3,546				114,071
Total well site services			113,256				16,603				9,325				—				13,992				466,052
Accommodations			121,956				10,707				31,300				—				20,029				615,982
Offshore products			106,005				2,770				16,087				—				1,942				484,852
Tubular services			253,315				341				9,297				34				2,752				405,654
Corporate and eliminations			—				179				(8,256	)			—				188				22,473
Total		$	594,532			$	30,600			$	57,753			$	34			$	38,903			$	1,995,013

														Equity in
		Revenues from				Depreciation								income/(loss) of
		unaffiliated				and				Operating				unconsolidated				Capital
Six months ended June 30, 2011		customers				amortization				income (loss)				affiliates				expenditures				Total assets
Well site services —
Rental tools		$	220,189			$	20,095			$	49,493			$	—			$	35,495			$	410,370
Drilling services			74,103				9,739				8,605				—				12,922				116,672
Total well site services			294,292				29,834				58,098				—				48,417				527,042
Accommodations			400,041				52,748				106,723				2				168,915				1,700,385
Offshore products			260,184				6,692				35,520				(228	)			7,574				588,472
Tubular services			626,241				728				30,002				279				5,151				521,675
Corporate and eliminations			—				388				(20,404	)			—				196				87,480
Total		$	1,580,758			$	90,390			$	209,939			$	53			$	230,253			$	3,425,054

														Equity in
		Revenues from				Depreciation								income/(loss) of
		unaffiliated				and				Operating				unconsolidated				Capital
Six months ended June 30, 2010		customers				amortization				income (loss)				affiliates				expenditures				Total assets
Well site services —
Rental tools		$	146,622			$	20,915			$	14,772			$	—			$	17,026			$	351,981
Drilling services			64,538				12,862				(3,052	)			—				4,537				114,071
Total well site services			211,160				33,777				11,720				—				21,563				466,052
Accommodations			267,489				21,283				78,668				—				45,441				615,982
Offshore products			208,998				5,575				28,708				—				5,980				484,852
Tubular services			439,230				685				15,512				64				2,843				405,654
Corporate and eliminations			—				358				(17,050	)			—				250				22,473
Total		$	1,126,877			$	61,678			$	117,558			$	64			$	76,077			$	1,995,013

11. 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, including warranty and product liability claims and occasional claims by individuals alleging exposure to hazardous materials as a result of its products or operations. Some of these claims relate to matters occurring prior to its acquisition of businesses, and some relate to businesses it has sold. In certain cases, the Company is entitled to indemnification from the sellers of businesses, and in other cases, it has indemnified the buyers of businesses from it. Although the Company can give no assurance about the outcome of pending legal and administrative proceedings and the effect such outcomes may have on it, management believes that any ultimate liability resulting from the outcome of such proceedings, to the extent not otherwise provided for or covered by insurance, will not have a material adverse effect on its consolidated financial position, results of operations or liquidity.

This quarterly report on Form 10-Q contains “certain forward-looking statements” within the meaning of Section 27A of the Securities Act of 1933 and Section 21E of the Securities Exchange Act of 1934 (the Exchange Act). The Private Securities Litigation Reform Act of 1995 provides safe harbor provisions for forward-looking information. Some of the information in the quarterly report may contain “forward-looking statements.” The “forward-looking statements” can be identified by the use of forward-looking terminology including “may,” “expect,” “anticipate,” “estimate,” “continue,” “believe,” or other similar words. Actual results could differ materially from those projected in the forward-looking statements as a result of a number of important factors. For a discussion of important factors that could affect our results, please refer to “Part I, Item 1A. Risk Factors” and the financial statement line item discussions set forth in “Item 7. Management’s Discussion and Analysis of Financial Condition and Results of Operations” included in our 2010 Form 10-K filed with the Commission on February 22, 2011. Should one or more of these risks or uncertainties materialize, or should the assumptions prove incorrect, actual results may differ materially from those expected, estimated or projected. Our management believes these forward-looking statements are reasonable. However, you should not place undue reliance on these forward-looking statements, which are based only on our current expectations and are not guarantees of future performance. All subsequent written and oral forward-looking statements attributable to us or to persons acting on our behalf are expressly qualified in their entirety by the foregoing. Forward-looking statements speak only as of the date they are made, and we undertake no obligation to publicly update or revise any of them in light of new information, future events or otherwise.

In addition, in certain places in this quarterly report, we refer to reports published by third parties that purport to describe trends or developments in the energy industry. The Company does so for the convenience of our stockholders and in an effort to provide information available in the market that will assist the Company’s investors in a better understanding of the market environment in which the Company operates. However, the Company specifically disclaims any responsibility for the accuracy and completeness of such information and undertakes no obligation to update such information.

ITEM 2. Management’s Discussion and Analysis of Financial Condition and Results of Operations

     You should read the following discussion and analysis together with our condensed consolidated financial statements and the notes to those statements included elsewhere in this quarterly report on Form 10-Q.

Overview

     We provide a broad range of products and services to the oil and gas industry through our accommodations, offshore products, well site services and tubular services business segments. In our accommodations segment, we also support the mining industry in Australia. Demand for our products and services is cyclical and substantially dependent upon activity levels in the oil and gas and mining industries, particularly our customers’ willingness to spend capital on the exploration for and development of oil, natural gas, coal and mineral reserves. Our customers’ spending plans are generally based on their outlook for near-term and long-term commodity prices. As a result, demand for our products and services is highly sensitive to current and expected commodity prices. Activity for our accommodations and offshore products segments is primarily tied to the long-term outlook for commodity prices. In contrast, activity for our well site services and tubular services segments responds more rapidly to shorter-term movements in oil and natural gas prices and, specifically, changes in North American drilling and completion activity. Other factors that can affect our business and financial results include the general global economic environment and regulatory changes in the U.S. and internationally.

Our Business Segments

     Our accommodations business is predominantly located in northern Alberta, Canada and Queensland, Australia and derives most of its business from resource companies who are developing and producing oil sands and coal resources and, to a lesser extent, other mineral resources. A significant portion of our accommodations segment revenues is generated by our large-scale lodge and village facilities. Where traditional accommodations and infrastructure are not accessible or cost effective, our semi-permanent lodge and village facilities provide comprehensive accommodations services similar to those found in an urban hotel. We typically contract our facilities to our customers on a fee per day covering lodging and meals that is based on the duration of their needs which can range

from several months to several years. In addition, we provide shorter-term remote site accommodations in smaller configurations utilizing our modular, mobile camp assets.

     Generally, our customers for oil sands and mining accommodations are making multi-billion dollar investments to develop their prospects, which have estimated reserve lives of 10 to 30 years and, consequently, these investments are dependent on those customers’ longer-term view of commodity demand and prices. Oil sands development activity has increased in the past year and has had a positive impact on our accommodations segment. Recent announcements have led to extensions of existing accommodations contracts and incremental accommodations contracts for us in Canada. In addition, several major oil companies and national oil companies have acquired oil sands leases over the past twelve months that should bode well for future oil sands investment and, as a result, demand for oil sands accommodations. Our Australian accommodations business is significantly influenced by increased metallurgical coal demand, especially from China and India. We are expanding our Australian accommodations manufacturing capacity to meet increasing demand and prospects for increased customer room demands are likely.

     Another factor that influences the financial results for our accommodations segment is the exchange rate between the U.S. dollar and the Canadian dollar and, to a lesser extent, the exchange rate between the U.S. dollar and the Australian dollar. Our accommodations segment has derived a majority of its revenues and operating income in Canada denominated in Canadian dollars. These revenues and profits are translated into U.S. dollars for U.S. GAAP financial reporting purposes. For the first six months of 2011, the Canadian dollar was valued at an average exchange rate of U.S. $1.02 compared to U.S. $0.97 for the first six months of 2010, an increase of 5%. This strengthening of the Canadian dollar had a positive impact on the translation of earnings generated from our Canadian subsidiaries and, therefore, the financial results of our accommodations segment.

     Our offshore products segment is also influenced significantly by our customers’ longer term outlook for energy prices and provides highly engineered products for offshore oil and natural gas drilling and production systems and facilities. Sales of our offshore products and services depend primarily upon development of infrastructure for offshore production systems and subsea pipelines, repairs and upgrades of existing offshore drilling rigs and construction of new offshore drilling rigs and vessels. In this segment, we are particularly influenced by global deepwater drilling and production spending, which are driven largely by our customers’ longer-term outlook for oil and natural gas prices.

     New order activity in our offshore products segment was limited beginning in the fourth quarter of 2008 and continued to decline throughout 2009 due to project postponements, cancellations and deferrals by customers as a result of the global economic recession and reduced oil prices. This reduction in order activity led to declines in our offshore products backlog and decreased revenues and profits in the first six months of 2010. With the improvement in oil prices over the last two years along with the improved outlook for long-term oil demand, we began experiencing increased bidding and quoting activity for our offshore products in the second half of 2010 and continuing throughout the first six months of 2011. As a result of this increased activity, our backlog in offshore products has increased from $215.7 million as of June 30, 2010 to $518.6 million as of June 30, 2011, a 140% increase.

     Our well site services and tubular services segments are significantly influenced by drilling and completion activity primarily in the U.S. and, to a lesser extent, Canada. Over the past several years, this activity has been primarily driven by spending for natural gas exploration and production, particularly in the shale play regions of the U.S. using horizontal drilling and completion techniques. However, with the rise in oil prices, lower natural gas prices and the advancement of horizontal drilling and completion techniques, activity in North America is beginning to shift to a greater proportion of oil and liquids rich gas drilling. The oil rig count in the U.S. now totals approximately 1,000 rigs, the highest count in over 20 years, comprising approximately 53% of total U.S. drilling activity.

     In our well site services segment, we provide rental tools and land drilling services. Demand for our drilling services is driven by land drilling activity in West Texas, where we primarily drill oil wells, and in the Rocky Mountains area in the U.S., where we drill both oil and natural gas wells. Our rental tools business provides equipment and service personnel utilized in the completion and initial production of new and recompleted wells. Activity for the rental tools business is dependant primarily upon the level and complexity of drilling, completion and workover activity throughout North America.

     Through our tubular services segment, we distribute a broad range of casing and tubing used in the drilling and completion of oil and natural gas wells primarily in North America. Accordingly, sales and gross margins in our tubular services segment depend upon the overall level of drilling activity, the types of wells being drilled, movements in global steel input prices and the overall industry level of oil country tubular goods (OCTG) inventory and pricing. Historically, tubular services’ gross margin generally expands during periods of rising OCTG prices and contracts during periods of decreasing OCTG prices.

     Demand for our tubular services, land drilling and rental tool businesses is highly correlated to changes in the drilling rig count in the U.S. and, to a much lesser extent, Canada. The table below sets forth a summary of North American rig activity, as measured by Baker Hughes Incorporated, for the periods indicated.

		Average Drilling Rig Count for
		Three Months Ended								Six Months Ended
		June 30,				June 30,				June 30,				June 30,
		2011				2010				2011				2010
U.S. Land			1,799				1,469				1,744				1,385
U.S. Offshore			31				39				29				42
Total U.S.			1,830				1,508				1,773				1,427
Canada			188				166				387				318
Total North America			2,018				1,674				2,160				1,745

     The average North American rig count for the three months ended June 30, 2011 increased by 344 rigs, or 21%, compared to the three months ended June 30, 2010 largely due to growth in the U.S. land rig count.

     Steel and steel input prices influence the pricing decisions of our OCTG suppliers, thereby influencing the pricing and margins of our tubular services segment. OCTG marketplace supply and demand has become more balanced recently compared to the 2008 to 2009 period. Increased supplies of OCTG have met the increased demand caused by expanded drilling activity. Recent global steel prices have increased affecting the raw material costs of our OCTG suppliers. To date, we have incurred modest OCTG price increases, which we have been able to pass through to our customers. The OCTG Situation Report indicates that industry OCTG inventory levels peaked in the first quarter of 2009 at approximately twenty months’ supply on the ground and have trended down to approximately five to six months’ supply currently, which is considered closer to a normalized level measured against historical levels.

     During 2010, U.S. mills began increasing production and imports of steel have increased in the first part of 2011, particularly goods imported from Canada and Korea followed by India, Mexico and Japan. We believe this increase in supply has been in response to the approximately 21% year-over-year increase in the drilling rig count in the U.S.

Other Factors that Influence our Business

     While global demand for oil and natural gas are significant factors influencing our business generally, certain other factors also influence our business, such as the pace of worldwide economic growth and recovery in U.S. Gulf of Mexico drilling following the government imposed drilling moratorium.

     We have witnessed unprecedented events in the U.S. Gulf of Mexico as a result of the Macondo well incident and resultant oil spill. As a result of the incident, in May 2010, the Bureau of Ocean Energy Management, Regulation and Enforcement, or BOEMRE, of the U.S. Department of the Interior implemented a moratorium on certain drilling activities in water depths greater than 500 feet in the U.S. Gulf of Mexico that effectively shut down new deepwater drilling activities in 2010. The moratorium was lifted during October 2010. However, the BOEMRE issued Notices to Lessees and Operators (NTLs), implemented additional safety and certification requirements applicable to plans for drilling activities in the U.S. waters, imposed additional requirements with respect to development and production activities in the U.S. waters, and delayed the approval of applications to drill in both deepwater and shallow-water areas. Despite the rescission of the moratorium, offshore drilling activity is being delayed by adjustments in operating procedures, compliance certifications, and lead times for permits and inspections, as a result of changes in the regulatory environment. In addition, there have been a variety of proposals to change existing laws and regulations that could affect offshore development and production. Uncertainties and delays caused by the new regulatory environment have and are expected to continue to have an overall negative effect on Gulf of Mexico drilling activity and, to a certain extent, the financial results of all of our business segments.

     We continue to monitor the global economy, the demand for crude oil, coal and natural gas prices and the resultant impact on the capital spending plans and operations of our customers in order to plan our business. We currently expect that our 2011 capital expenditures will total approximately $650 million compared to 2010 capital expenditures of $182 million. Our 2011 capital expenditures include funding to expand several of our Canadian and Australian accommodations facilities, to add incremental equipment in our rental tools segment, to increase our fleet of modular, mobile camp assets in Canada and the U.S. and to complete projects in progress at December 31, 2010, including (i) the construction of the Henday Lodge accommodations facility in the Canadian oil sands, (ii) continued expansion of our Wapasu Creek, Beaver River and Athabasca Lodge accommodations facilities in the Canadian oil sands and (iii) ongoing maintenance capital requirements. In our well site services segment, we continue to monitor industry capacity additions and will make future capital expenditure decisions based on a careful evaluation of both the market outlook and industry fundamentals. In our tubular services segment, we remain focused on industry inventory levels, future drilling and completion activity and OCTG prices.

Consolidated Results of Operations (in millions)

		THREE MONTHS ENDED																SIX MONTHS ENDED
		JUNE 30,																JUNE 30,
										Variance																Variance
										2011 vs. 2010																2011 vs. 2010
		2011				2010				$				%				2011				2010				$				%
Revenues
Well site services -
Rental tools		$	112.7			$	79.1			$	33.6				42	%		$	220.2			$	146.6			$	73.6				50	%
Drilling services			41.0				34.2				6.8				20	%			74.1				64.6				9.5				15	%
Total well site services			153.7				113.3				40.4				36	%			294.3				211.2				83.1				39	%
Accommodations			202.9				121.9				81.0				66	%			400.1				267.5				132.6				50	%
Offshore products			131.7				106.0				25.7				24	%			260.2				209.0				51.2				24	%
Tubular services			332.0				253.3				78.7				31	%			626.2				439.2				187.0				43	%
Total		$	820.3			$	594.5			$	225.8				38	%		$	1,580.8			$	1,126.9			$	453.9				40	%
Product costs; service and other costs (“Cost of sales and service”)
Well site services -
Rental tools		$	70.4			$	50.0			$	20.4				41	%		$	137.7			$	95.3			$	42.4				44	%
Drilling services			29.2				28.4				0.8				3	%			54.4				53.4				1.0				2	%
Total well site services			99.6				78.4				21.2				27	%			192.1				148.7				43.4				29	%
Accommodations			108.5				73.2				35.3				48	%			216.8				155.0				61.8				40	%
Offshore products			98.2				77.7				20.5				26	%			194.8				155.9				38.9				25	%
Tubular services			310.5				240.2				70.3				29	%			587.5				416.4				171.1				41	%
Total		$	616.8			$	469.5			$	147.3				31	%		$	1,191.2			$	876.0			$	315.2				36	%
Gross margin
Well site services -
Rental tools		$	42.3			$	29.1			$	13.2				45	%		$	82.5			$	51.3			$	31.2				61	%
Drilling services			11.8				5.8				6.0				103	%			19.7				11.2				8.5				76	%
Total well site services			54.1				34.9				19.2				55	%			102.2				62.5				39.7				64	%
Accommodations			94.4				48.7				45.7				94	%			183.3				112.5				70.8				63	%
Offshore products			33.5				28.3				5.2				18	%			65.4				53.1				12.3				23	%
Tubular services			21.5				13.1				8.4				64	%			38.7				22.8				15.9				70	%
Total		$	203.5			$	125.0			$	78.5				63	%		$	389.6			$	250.9			$	138.7				55	%
Gross margin as a percentage of revenues
Well site services -
Rental tools			38	%			37	%											37	%			35	%
Drilling services			29	%			17	%											27	%			17	%
Total well site services			35	%			31	%											35	%			30	%
Accommodations			47	%			40	%											46	%			42	%
Offshore products			25	%			27	%											25	%			25	%
Tubular services			6	%			5	%											6	%			5	%
Total			25	%			21	%											25	%			22	%