##### Table of Contents



UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
 Washington, D.C. 20549
 FORM 10-Q
  þ
    
    QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934
 For the quarterly period ended March 31, 2010
 OR
 o
    
    TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934
 For the transition period from  to
 Commission file number: 1-16337
 OIL STATES INTERNATIONAL, INC.
 
  Delaware
    
    76-0476605(State or other jurisdiction of
    
    (I.R.S. Employerincorporation or organization)
    
    Identification No.)Three Allen Center, 333 Clay Street, Suite 4620,Houston, Texas
    
    77002(Address of principal executive offices)
    
    (Zip Code)
  
  
  þ o
  o o
  Large Accelerated Filer þ
    
    Accelerated Filer o
    
    Non-Accelerated Filer o
    
    Smaller Reporting Company o(Do not check if a smaller reporting company)
  o þ




---



##### 



Page No.Part I  FINANCIAL INFORMATIONItem 1. Financial Statements:Condensed Consolidated Financial StatementsUnaudited Condensed Consolidated Statements of Income for the Three Month Periods
Ended March 31, 2010 and 2009
    
    
    3Consolidated Balance Sheets  March 31, 2010 (unaudited) and December 31, 2009
    
    
    4Unaudited Condensed Consolidated Statements of Cash Flows for the Three Months Ended
March 31, 2010 and 2009
    
    
    5Notes to Unaudited Condensed Consolidated Financial Statements
    
    
    6  12Item 2. Managements Discussion and Analysis of Financial Condition and Results of Operations
    
    
    13  21Item 3. Quantitative and Qualitative Disclosures About Market Risk
    
    
    21Item 4. Controls and Procedures
    
    
    21Part II  OTHER INFORMATIONItem 1. Legal Proceedings
    
    
    21  22Item 1A. Risk Factors
    
    
    22Item 2. Unregistered Sales of Equity Securities and Use of Proceeds and Issuer Purchases of Equity Securities
    
    
    22Item 3. Defaults Upon Senior Securities
    
    
    22Item 4. (Removed and Reserved)
    
    
    22Item 5. Other Information
    
    
    22Item 6. Exhibits
    
    
    22(a) Index of Exhibits
    
    
    22  23Signature Page
    
    
    24EX-10.26EX-31.1EX-31.2EX-32.1EX-32.2
  2




---



##### Table of Contents



THREE MONTHS ENDEDMARCH 31,2010
    
    
    2009Revenues
    
    $
    532,345
    
    
    $
    667,098Costs and expenses:Cost of sales and services
    
    
    406,510
    
    
    
    520,209Selling, general and administrative expenses
    
    
    35,153
    
    
    
    34,646Depreciation and amortization expense
    
    
    31,078
    
    
    
    28,022Other operating income
    
    
    (201
    )
    
    
    (676
    )472,540
    
    
    
    582,201Operating income
    
    
    59,805
    
    
    
    84,897Interest expense
    
    
    (3,470
    )
    
    
    (4,245
    )Interest income
    
    
    78
    
    
    
    318Equity in earnings of unconsolidated affiliates
    
    
    29
    
    
    
    460Other income
    
    
    762
    
    
    
    162Income before income taxes
    
    
    57,204
    
    
    
    81,592Income tax expense
    
    
    (16,789
    )
    
    
    (25,346
    )Net income
    
    
    40,415
    
    
    
    56,246Less: Net income attributable to noncontrolling interest
    
    
    172
    
    
    
    118Net income attributable to Oil States International, Inc.
    
    $
    40,243
    
    
    $
    56,128Net income per share attributable to Oil States International,
Inc. common stockholdersBasic
    
    $
    0.81
    
    
    $
    1.13Diluted
    
    $
    0.78
    
    
    $
    1.13Weighted average number of common shares outstanding:Basic
    
    
    49,896
    
    
    
    49,517Diluted
    
    
    51,920
    
    
    
    49,664
 
 3




---



##### Table of Contents



MARCH 31,
    
    
    DECEMBER 31,2010
    
    
    2009(UNAUDITED)ASSETSCurrent assets:Cash and cash equivalents
    
    $
    77,326
    
    
    $
    89,742Accounts receivable, net
    
    
    396,841
    
    
    
    385,816Inventories, net
    
    
    471,306
    
    
    
    423,077Prepaid expenses and other current assets
    
    
    16,020
    
    
    
    26,933Total current assets
    
    
    961,493
    
    
    
    925,568Property, plant, and equipment, net
    
    
    764,467
    
    
    
    749,601Goodwill, net
    
    
    219,779
    
    
    
    218,740Investments in unconsolidated affiliates
    
    
    5,195
    
    
    
    5,164Other noncurrent assets
    
    
    32,162
    
    
    
    33,313Total assets
    
    $
    1,983,096
    
    
    $
    1,932,386LIABILITIES AND STOCKHOLDERS EQUITYCurrent liabilities:Accounts payable and accrued liabilities
    
    $
    218,263
    
    
    $
    208,541Income taxes
    
    
    4,706
    
    
    
    14,419Current portion of long-term debt
    
    
    158,069
    
    
    
    464Deferred revenue
    
    
    72,811
    
    
    
    87,412Other current liabilities
    
    
    4,557
    
    
    
    4,387Total current liabilities
    
    
    458,406
    
    
    
    315,223Long-term debt
    
    
    14,998
    
    
    
    164,074Deferred income taxes
    
    
    54,316
    
    
    
    55,332Other noncurrent liabilities
    
    
    15,806
    
    
    
    15,691Total liabilities
    
    
    543,526
    
    
    
    550,320Stockholders equity:Oil States International, Inc. stockholders equity:Common stock
    
    
    534
    
    
    
    531Additional paid-in capital
    
    
    478,234
    
    
    
    468,428Retained earnings
    
    
    1,000,358
    
    
    
    960,115Accumulated other comprehensive income
    
    
    52,700
    
    
    
    44,115Treasury stock
    
    
    (93,289
    )
    
    
    (92,341
    )Total Oil States International, Inc. stockholders equity
    
    
    1,438,537
    
    
    
    1,380,848Noncontrolling interest
    
    
    1,033
    
    
    
    1,218Total stockholders equity
    
    
    1,439,570
    
    
    
    1,382,066Total liabilities and stockholders equity
    
    $
    1,983,096
    
    
    $
    1,932,386
 
 4




---



##### Table of Contents



THREE  MONTHSENDED MARCH 31,2010
    
    
    2009Cash flows from operating activities:Net Income
    
    $
    40,415
    
    
    $
    56,246Adjustments to reconcile net income to net cash provided by operating activities:Depreciation and amortization
    
    
    31,078
    
    
    
    28,022Deferred income tax provision (benefit)
    
    
    (2,514
    )
    
    
    97Excess tax benefits from share-based payment arrangements
    
    
    (683
    )
    
    
    Equity in earnings of unconsolidated subsidiaries, net of dividends
    
    
    (29
    )
    
    
    (460
    )Non-cash compensation charge
    
    
    3,699
    
    
    
    2,901Accretion of debt discount
    
    
    1,764
    
    
    
    1,642(Gain) loss on disposal of assets
    
    
    (902
    )
    
    
    40Other, net
    
    
    (241
    )
    
    
    703Changes in working capital
    
    
    (59,303
    )
    
    
    8,590Net cash flows provided by operating activities
    
    
    13,284
    
    
    
    97,781Cash flows from investing activities:Capital expenditures
    
    
    (37,175
    )
    
    
    (32,670
    )Proceeds from note receivable
    
    
    
    
    
    
    21,166Other, net
    
    
    1,520
    
    
    
    (2,706
    )Net cash flows used in investing activities
    
    
    (35,655
    )
    
    
    (14,210
    )Cash flows from financing activities:Revolving credit borrowings (repayments)
    
    
    6,843
    
    
    
    (72,560
    )Debt repayments
    
    
    (137
    )
    
    
    (111
    )Issuance of common stock
    
    
    5,426
    
    
    
    Excess tax benefits from share-based payment arrangements
    
    
    683
    
    
    
    Other, net
    
    
    (947
    )
    
    
    (275
    )Net cash flows provided by (used in) financing activities
    
    
    11,868
    
    
    
    (72,946
    )Effect of exchange rate changes on cash
    
    
    (1,874
    )
    
    
    (410
    )Net increase (decrease) in cash and cash equivalents from continuing operations
    
    
    (12,377
    )
    
    
    10,215Net cash used in discontinued operations  operating activities
    
    
    (39
    )
    
    
    (74
    )Cash and cash equivalents, beginning of period
    
    
    89,742
    
    
    
    30,199Cash and cash equivalents, end of period
    
    $
    77,326
    
    
    $
    40,340Non-cash financing activities:Reclassification of 2 3/8% contingent convertible senior notes to current liabilities
    
    $
    157,623
    
    
    $
    
 
 5




---



##### Table of Contents



OIL STATES INTERNATIONAL, INC. AND SUBSIDIARIES
 
 NOTES TO UNAUDITED CONDENSED CONSOLIDATED
FINANCIAL STATEMENTS
 1. ORGANIZATION AND BASIS OF PRESENTATION
    2. RECENT ACCOUNTING PRONOUNCEMENTS
     6




---



##### Table of Contents



3. DETAILS OF SELECTED BALANCE SHEET ACCOUNTS
  MARCH 31,
    
    
    DECEMBER 31,2010
    
    
    2009Accounts receivable, net:Trade
    
    $
    310,295
    
    
    $
    287,148Unbilled revenue
    
    
    89,092
    
    
    
    102,527Other
    
    
    1,939
    
    
    
    1,087Total accounts receivable
    
    
    401,326
    
    
    
    390,762Allowance for doubtful accounts
    
    
    (4,485
    )
    
    
    (4,946
    )$
    396,841
    
    
    $
    385,816
 MARCH 31,
    
    
    DECEMBER 31,2010
    
    
    2009Inventories, net:Tubular goods
    
    $
    311,288
    
    
    $
    265,717Other finished goods and purchased products
    
    
    69,213
    
    
    
    66,489Work in process
    
    
    41,513
    
    
    
    43,729Raw materials
    
    
    57,818
    
    
    
    55,421Total inventories
    
    
    479,832
    
    
    
    431,356Inventory reserves
    
    
    (8,526
    )
    
    
    (8,279
    )$
    471,306
    
    
    $
    423,077
 ESTIMATED
    
    
    MARCH 31,
    
    
    DECEMBER 31,USEFUL LIFE
    
    
    2010
    
    
    2009Property, plant and equipment, net:Land
    
    
    
    
    
    $
    19,610
    
    
    $
    19,426Buildings and leasehold improvements
    
    1-50 years
    
    
    169,246
    
    
    
    165,526Machinery and equipment
    
    2-29 years
    
    
    303,130
    
    
    
    301,900Accommodations assets
    
    3-15 years
    
    
    410,531
    
    
    
    383,332Rental tools
    
    4-10 years
    
    
    152,161
    
    
    
    151,050Office furniture and equipment
    
    1-10 years
    
    
    29,657
    
    
    
    29,817Vehicles
    
    2-10 years
    
    
    72,831
    
    
    
    72,142Construction in progress
    
    
    
    
    
    
    76,958
    
    
    
    65,652Total property, plant and equipment
    
    
    
    
    
    
    1,234,124
    
    
    
    1,188,845Less: Accumulated depreciation
    
    
    
    
    
    
    (469,657
    )
    
    
    (439,244
    )$
    764,467
    
    
    $
    749,601
 MARCH 31,
    
    
    DECEMBER 31,2010
    
    
    2009Accounts payable and accrued liabilities:Trade accounts payable
    
    $
    164,057
    
    
    $
    145,200Accrued compensation
    
    
    24,578
    
    
    
    35,834Accrued insurance
    
    
    7,889
    
    
    
    8,133Accrued taxes, other than income taxes
    
    
    7,284
    
    
    
    4,216Reserves related to discontinued operations
    
    
    2,372
    
    
    
    2,411Other
    
    
    12,083
    
    
    
    12,747$
    218,263
    
    
    $
    208,541
 4. EARNINGS PER SHARE
  7




---



##### Table of Contents



THREE MONTHS ENDEDMARCH 312010
    
    2009Basic earnings per share:Net income attributable to Oil States International, Inc.
    
    $
    40,243
    
    
    $
    56,128Weighted average number of shares outstanding
    
    
    49,896
    
    
    
    49,517Basic earnings per share
    
    $
    0.81
    
    
    $
    1.13Diluted earnings per share:Net income attributable to Oil States International, Inc.
    
    $
    40,243
    
    
    $
    56,128Weighted average number of shares outstanding
    
    
    49,896
    
    
    
    49,517Effect of dilutive securities:Options on common stock
    
    
    599
    
    
    
    1042 3/8% Convertible Senior Subordinated Notes
    
    
    1,220
    
    
    
    Restricted stock awards and other
    
    
    205
    
    
    
    43Total shares and dilutive securities
    
    
    51,920
    
    
    
    49,664Diluted earnings per share
    
    $
    0.78
    
    
    $
    1.13
  5. BUSINESS ACQUISITIONS AND GOODWILL
   Drilling

    
    
    TotalRental
    
    
    and
    
    
    Well Site
    
    
    
    
    
    
    Offshore
    
    
    TubularTools
    
    
    Other
    
    
    Services
    
    
    Accommodations
    
    
    Products
    
    
    Services
    
    
    TotalBalance as of December 31, 2008Goodwill
    
    $
    166,841
    
    
    $
    22,767
    
    
    $
    189,608
    
    
    $
    53,526
    
    
    $
    85,074
    
    
    $
    62,863
    
    
    $
    391,071Accumulated Impairment Losses
    
    
    
    
    
    
    (22,767
    )
    
    
    (22,767
    )
    
    
    
    
    
    
    
    
    
    
    (62,863
    )
    
    
    (85,630
    )166,841
    
    
    
    
    
    
    
    166,841
    
    
    
    53,526
    
    
    
    85,074
    
    
    
    
    
    
    
    305,441Goodwill acquired
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    337
    
    
    
    
    
    
    
    
    
    
    
    337Foreign currency translation and other changes
    
    
    2,470
    
    
    
    
    
    
    
    2,470
    
    
    
    4,495
    
    
    
    525
    
    
    
    
    
    
    
    7,490Goodwill impairment
    
    
    (94,528
    )
    
    
    
    
    
    
    (94,528
    )
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    (94,528
    )74,783
    
    
    
    
    
    
    
    74,783
    
    
    
    58,358
    
    
    
    85,599
    
    
    
    
    
    
    
    218,740Balance as of December 31, 2009Goodwill
    
    
    169,311
    
    
    
    22,767
    
    
    
    192,078
    
    
    
    58,358
    
    
    
    85,599
    
    
    
    62,863
    
    
    
    398,898Accumulated Impairment Losses
    
    
    (94,528
    )
    
    
    (22,767
    )
    
    
    (117,295
    )
    
    
    
    
    
    
    
    
    
    
    (62,863
    )
    
    
    (180,158
    )74,783
    
    
    
    
    
    
    
    74,783
    
    
    
    58,358
    
    
    
    85,599
    
    
    
    
    
    
    
    218,740Foreign currency translation and other changes
    
    
    422
    
    
    
    
    
    
    
    422
    
    
    
    948
    
    
    
    (331
    )
    
    
    
    
    
    
    1,03975,205
    
    
    
    
    
    
    
    75,205
    
    
    
    59,306
    
    
    
    85,268
    
    
    
    62,863
    
    
    
    399,937Balance as of March 31, 2010Goodwill
    
    
    169,733
    
    
    
    22,767
    
    
    
    192,500
    
    
    
    59,306
    
    
    
    85,268
    
    
    
    62,863
    
    
    
    399,937Accumulated Impairment Losses
    
    
    (94,528
    )
    
    
    (22,767
    )
    
    
    (117,295
    )
    
    
    
    
    
    
    
    
    
    
    (62,863
    )
    
    
    (180,158
    )$
    75,205
    
    
    $
    
    
    
    $
    75,205
    
    
    $
    59,306
    
    
    $
    85,268
    
    
    $
    
    
    
    $
    219,779
 8




---



##### Table of Contents



6. DEBT
  March 31,
    
    
    December 31,2010
    
    
    2009(Unaudited)U.S. revolving credit facility which matures on December 5, 2011, with
available commitments up to $325 million and with an average interest rate
of 3.3% for the three month period ended March 31, 2010
    
    $
    
    
    
    $
    Canadian revolving credit facility which matures on December 5, 2011,
with available commitments up to $175 million and with an average
interest rate of 2.3% for the three month period ended March 31, 2010
    
    
    6,893
    
    
    
    23/8% contingent convertible senior subordinated notes, net  due 2025
    
    
    157,623
    
    
    
    155,859Capital lease obligations and other debt
    
    
    8,551
    
    
    
    8,679Total debt
    
    
    173,067
    
    
    
    164,538Less: current maturities
    
    
    158,069
    
    
    
    464Total long-term debt
    
    $
    14,998
    
    
    $
    164,074
   March 31, 2010
    
    
    December 31, 2009Carrying amount of the equity component in additional paid-in capital
    
    $
    28,449
    
    
    $
    28,449Principal amount of the liability component
    
    $
    175,000
    
    
    $
    175,000Less: unamortized discount
    
    
    17,377
    
    
    
    19,141Net carrying amount of the liability component
    
    $
    157,623
    
    
    $
    155,859
  Three months ended March 31,2010
    
    2009Interest expense
    
    $
    2,803
    
    
    $
    2,681
 March 31, 2010Remaining period over which discount will be amortized
    
    2.3 yearsConversion price
    
    $
    31.75Number of shares to be delivered upon conversion (1)
    
    
    1,652,073Conversion value in excess of principal amount (in thousands) (1)
    
    $
    74,905Derivative transactions entered into in connection with the convertible notes
    
    None
 
 (1)
    
    Calculation is based on the Companys March 31, 2010 closing stock price of $45.34. 9




---



##### Table of Contents



March 31, 2010
    
    
    December 31, 2009Interest
    
    
    Carrying
    
    
    Fair
    
    
    Carrying
    
    
    FairRate
    
    
    Value
    
    
    Value
    
    
    Value
    
    
    ValuePrincipal amount due 2025
    
    
    2 3/8
    %
    
    $
    175,000
    
    
    $
    264,581
    
    
    $
    175,000
    
    
    $
    243,653Less: unamortized discount
    
    
    
    
    
    
    17,377
    
    
    
    
    
    
    
    19,141
    
    
    
    Net value
    
    
    
    
    
    $
    157,623
    
    
    $
    264,581
    
    
    $
    155,859
    
    
    $
    243,653
   7. COMPREHENSIVE INCOME AND CHANGES IN COMMON STOCK OUTSTANDING:
  THREE MONTHSENDED MARCH 31,2010
    
    
    2009Net income
    
    $
    40,415
    
    
    $
    56,246Other comprehensive income (loss):Foreign currency translation adjustment
    
    
    8,585
    
    
    
    (11,821
    )Total other comprehensive income (loss)
    
    
    8,585
    
    
    
    (11,821
    )Comprehensive income
    
    
    49,000
    
    
    
    44,425Comprehensive income attributable to noncontrolling interest
    
    
    (172
    )
    
    
    (118
    )Comprehensive income attributable to Oil States International, Inc.
    
    $
    48,828
    
    
    $
    44,307
 Shares of common stock outstanding  January 1, 2010
    
    
    49,814,964Shares issued upon exercise of stock options and vesting of stock awards
    
    
    305,572Shares withheld for taxes on vesting of restricted stock awards and transferred to treasury
    
    
    (25,449
    )Shares of common stock outstanding  March 31, 2010
    
    
    50,095,087
 8. STOCK BASED COMPENSATION
   10




---



##### Table of Contents



9. INCOME TAXES
  10. SEGMENT AND RELATED INFORMATION
   Equity inRevenues from
    
    
    Depreciation
    
    
    
    
    
    
    earnings ofunaffiliated
    
    
    and
    
    
    Operating
    
    
    unconsolidated
    
    
    Capitalcustomers
    
    
    amortization
    
    
    income (loss)
    
    
    affiliates
    
    
    expenditures
    
    
    Total assetsThree months ended March
31, 2010Well Site Services Rental tools
    
    $
    67,502
    
    
    $
    10,510
    
    
    $
    4,378
    
    
    $
    
    
    
    $
    6,580
    
    
    $
    345,366Drilling and other
    
    
    30,401
    
    
    
    6,663
    
    
    
    (1,982
    )
    
    
    
    
    
    
    991
    
    
    
    113,787Total Well Site Services
    
    
    97,903
    
    
    
    17,173
    
    
    
    2,396
    
    
    
    
    
    
    
    7,571
    
    
    
    459,153Accommodations
    
    
    145,534
    
    
    
    10,576
    
    
    
    47,368
    
    
    
    
    
    
    
    25,413
    
    
    
    614,861Offshore Products
    
    
    102,993
    
    
    
    2,805
    
    
    
    12,620
    
    
    
    
    
    
    
    4,038
    
    
    
    493,756Tubular Services
    
    
    185,915
    
    
    
    344
    
    
    
    6,215
    
    
    
    29
    
    
    
    91
    
    
    
    396,520Corporate and Eliminations
    
    
    
    
    
    
    180
    
    
    
    (8,794
    )
    
    
    
    
    
    
    62
    
    
    
    18,806Total
    
    $
    532,345
    
    
    $
    31,078
    
    
    $
    59,805
    
    
    $
    29
    
    
    $
    37,175
    
    
    $
    1,983,096
 11




---



##### Table of Contents



Equity inRevenues from
    
    
    Depreciation
    
    
    
    
    
    
    earnings ofunaffiliated
    
    
    and
    
    
    Operating
    
    
    unconsolidated
    
    
    Capitalcustomers
    
    
    amortization
    
    
    income (loss)
    
    
    affiliates
    
    
    expenditures
    
    
    Total assetsThree months ended March
31, 2009Well Site Services Rental tools
    
    $
    71,726
    
    
    $
    9,956
    
    
    $
    3,644
    
    
    $
    
    
    
    $
    11,794
    
    
    $
    455,535Drilling and other
    
    
    17,284
    
    
    
    6,433
    
    
    
    (3,494
    )
    
    
    
    
    
    
    5,212
    
    
    
    129,302Total Well Site Services
    
    
    89,010
    
    
    
    16,389
    
    
    
    150
    
    
    
    
    
    
    
    17,006
    
    
    
    584,837Accommodations
    
    
    141,831
    
    
    
    8,441
    
    
    
    48,244
    
    
    
    135
    
    
    
    12,235
    
    
    
    496,805Offshore Products
    
    
    127,998
    
    
    
    2,694
    
    
    
    21,185
    
    
    
    
    
    
    
    3,068
    
    
    
    494,592Tubular Services
    
    
    308,259
    
    
    
    376
    
    
    
    22,911
    
    
    
    325
    
    
    
    95
    
    
    
    494,713Corporate and Eliminations
    
    
    
    
    
    
    122
    
    
    
    (7,593
    )
    
    
    
    
    
    
    266
    
    
    
    15,339Total
    
    $
    667,098
    
    
    $
    28,022
    
    
    $
    84,897
    
    
    $
    460
    
    
    $
    32,670
    
    
    $
    2,086,286
 11. COMMITMENTS AND CONTINGENCIES
  12




---



##### Table of Contents



This quarterly report on Form 10-Q contains certain forward-looking statements within the meaning
of Section 27A of the Securities Exchange Act of 1933 and Section 21E of the Securities Exchange
Act of 1934. 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 Item Part I, Item 1.A. 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 Annual
Report on Form 10-K for the year ended December 31, 2009 filed with the Securities and Exchange
Commission on February 22, 2010. 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
  Overview
  Our Business Segments
  13




---



##### Table of Contents



14




---



##### Table of Contents



Average Drilling Rig Count forThree Months EndedMarch 31,
    
    
    December 31,
    
    
    March 31,2010
    
    
    2009
    
    
    2009U.S. Land
    
    
    1,299
    
    
    
    1,072
    
    
    
    1,269U.S. Offshore
    
    
    46
    
    
    
    36
    
    
    
    57Total U.S.
    
    
    1,345
    
    
    
    1,108
    
    
    
    1,326Canada
    
    
    470
    
    
    
    278
    
    
    
    329Total North America
    
    
    1,815
    
    
    
    1,386
    
    
    
    1,655
     15




---



##### Table of Contents



Other Factors that Influence our Business
     16




---



##### Table of Contents



Consolidated Results of Operations (in millions)
 THREE MONTHS ENDEDMARCH 31,Variance2010 vs. 20092010
    
    
    2009
    
    
    $
    
    
    %RevenuesWell Site Services -Rental Tools
    
    $
    67.5
    
    
    $
    71.7
    
    
    $
    (4.2
    )
    
    
    (6
    %)Drilling and Other
    
    
    30.4
    
    
    
    17.3
    
    
    
    13.1
    
    
    
    76
    %Total Well Site Services
    
    
    97.9
    
    
    
    89.0
    
    
    
    8.9
    
    
    
    10
    %Accommodations
    
    
    145.5
    
    
    
    141.8
    
    
    
    3.7
    
    
    
    3
    %Offshore Products
    
    
    103.0
    
    
    
    128.0
    
    
    
    (25.0
    )
    
    
    (20
    %)Tubular Services
    
    
    185.9
    
    
    
    308.3
    
    
    
    (122.4
    )
    
    
    (40
    %)Total
    
    $
    532.3
    
    
    $
    667.1
    
    
    $
    (134.8
    )
    
    
    (20
    %)Product costs; Service and other costs

(Cost of sales and service)Well Site Services -Rental Tools
    
    $
    45.4
    
    
    $
    49.8
    
    
    $
    (4.4
    )
    
    
    (9
    %)Drilling and Other
    
    
    25.0
    
    
    
    13.6
    
    
    
    11.4
    
    
    
    84
    %Total Well Site Services
    
    
    70.4
    
    
    
    63.4
    
    
    
    7.0
    
    
    
    11
    %Accommodations
    
    
    81.8
    
    
    
    79.9
    
    
    
    1.9
    
    
    
    2
    %Offshore Products
    
    
    78.2
    
    
    
    95.4
    
    
    
    (17.2
    )
    
    
    (18
    %)Tubular Services
    
    
    176.1
    
    
    
    281.5
    
    
    
    (105.4
    )
    
    
    (37
    %)Total
    
    $
    406.5
    
    
    $
    520.2
    
    
    $
    (113.7
    )
    
    
    (22
    %)Gross marginWell Site Services -Rental Tools
    
    $
    22.1
    
    
    $
    21.9
    
    
    $
    0.2
    
    
    
    1
    %Drilling and Other
    
    
    5.4
    
    
    
    3.7
    
    
    
    1.7
    
    
    
    46
    %Total Well Site Services
    
    
    27.5
    
    
    
    25.6
    
    
    
    1.9
    
    
    
    7
    %Accommodations
    
    
    63.7
    
    
    
    61.9
    
    
    
    1.8
    
    
    
    3
    %Offshore Products
    
    
    24.8
    
    
    
    32.6
    
    
    
    (7.8
    )
    
    
    (24
    %)Tubular Services
    
    
    9.8
    
    
    
    26.8
    
    
    
    (17.0
    )
    
    
    (63
    %)Total
    
    $
    125.8
    
    
    $
    146.9
    
    
    $
    (21.1
    )
    
    
    (14
    %)Gross margin as a percentage of revenuesWell Site Services -Rental Tools
    
    
    33
    %
    
    
    31
    %Drilling and Other
    
    
    18
    %
    
    
    21
    %Total Well Site Services
    
    
    28
    %
    
    
    29
    %Accommodations
    
    
    44
    %
    
    
    44
    %Offshore Products
    
    
    24
    %
    
    
    25
    %Tubular Services
    
    
    5
    %
    
    
    9
    %Total
    
    
    24
    %
    
    
    22
    %
 THREE MONTHS ENDED MARCH 31, 2010 COMPARED TO THREE MONTHS ENDED MARCH 31, 2009
  Revenues.
  17




---



##### Table of Contents



Cost of Sales and Service.
     Selling, General and Administrative Expenses.
 Depreciation and Amortization.
 Operating Income.
 18




---



##### Table of Contents



Interest Expense and Interest Income.
 Equity in Earnings of Unconsolidated Affiliates.
 Income Tax Expense.
 Liquidity and Capital Resources
      19




---



##### Table of Contents



Stock Repurchase Program.
 Credit Facility.
   20




---



##### Table of Contents



Critical Accounting Policies
  
 ITEM 3. Quantitative and Qualitative Disclosures about Market Risk
 Interest Rate Risk.
 Foreign Currency Exchange Rate Risk.
 
 ITEM 4. Controls and Procedures
 Evaluation of Disclosure Controls and Procedures.
 Changes in Internal Control over Financial Reporting.
 
 PART II  OTHER INFORMATION
 
 ITEM 1. Legal Proceedings
  21




---



##### Table of Contents



ITEM 1A. Risk Factors
  
 ITEM 2. Unregistered Sales of Equity Securities and Use of Proceeds and Issuer Purchases of Equity
Securities
 Unregistered Sales of Equity Securities and Use of Proceeds
  Purchases of Equity Securities by the Issuer and Affiliated Purchases
  
 ITEM 3. Defaults Upon Senior Securities
  
 ITEM 4. (Removed and Reserved)
 
 ITEM 5. Other Information
  
 ITEM 6. Exhibits
 
  Exhibit No.
    
    Description3.1
    
    
    Amended and Restated Certificate of Incorporation
(incorporated by reference to Exhibit 3.1 to the
Companys Annual Report on Form 10-K for the year
ended December 31, 2000, as filed with the
Commission on March 30, 2001 (File No.
001-16337)).3.2
    
    
    Third Amended and Restated Bylaws (incorporated
by reference to Exhibit 3.1 to the Companys
Current Report on Form 8-K, as filed with the
Commission on March 13, 2009 (File No.
001-16337)).3.3
    
    
    Certificate of Designations of Special Preferred
Voting Stock of Oil States International, Inc.
(incorporated by reference to Exhibit 3.3 to the
Companys Annual Report on Form 10-K for the year
ended December 31, 2000, as filed with the
Commission on March 30, 2001 (File No.
001-16337)).4.1
    
    
    Form of common stock certificate (incorporated by
reference to Exhibit 4.1 to the Companys
 22




---



##### Table of Contents



Exhibit No.
    
    DescriptionRegistration Statement on Form S-1, as filed with
the Commission on November 7, 2000 (File No.
333-43400)).4.2
    
    
    Amended and Restated Registration Rights
Agreement (incorporated by reference to Exhibit
4.2 to the Companys Annual Report on Form 10-K
for the year ended December 31, 2000, as filed
with the Commission on March 30, 2001 (File No.
001-16337)).4.3
    
    
    First Amendment to the Amended and Restated
Registration Rights Agreement dated May 17, 2002
(incorporated by reference to Exhibit 4.3 to the
Companys Annual Report on Form 10-K for the year
ended December 31, 2002, as filed with the
Commission on March 13, 2003 (File No.
001-16337)).4.4
    
    
    Registration Rights Agreement dated
as of June 21, 2005 by and between
Oil States International, Inc. and
RBC Capital Markets Corporation
(incorporated by reference to
Exhibit 4.4 to Oil States Current
Report on Form 8-K as filed with
the Securities and Exchange
Commission on June 23, 2005 (File
No. 001-16337)).4.5
    
    
    Indenture dated as of June 21, 2005
by and between Oil States
International, Inc. and Wells Fargo
Bank, National Association, as
trustee (incorporated by reference
to Exhibit 4.5 to Oil States
Current Report on Form 8-K as filed
with the Securities and Exchange
Commission on June 23, 2005 (File
No. 001-16337)).4.6
    
    
    Global Notes representing
$175,000,000 aggregate principal
amount of 2 3/8% Contingent
Convertible Senior Notes due 2025
(incorporated by reference to
Section 2.2 of Exhibit 4.5 to Oil
States Current Reports on Form 8-K
as filed with the Securities and
Exchange Commission on June 23,
2005 and July 13, 2005 (File No.
001-16337)).10.26
    **,*
    
    Executive Agreement between Oil
States International, Inc. and
named executive officer (Charles
Moses) effective March 4, 2010.31.1
    *
    
    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
1934.31.2
    *
    
    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.
 
 *
    
    Filed herewith**
    
    Management contracts or compensatory plans or arrangements***
    
    Furnished herewith. 23




---



##### Table of Contents



SIGNATURES
   Date: April 29, 2010
    
    By
    
    /s/ BRADLEY J. DODSONBradley J. DodsonVice President, Chief Financial Officer and
Treasurer (Duly Authorized Officer and
Principal Financial Officer)Date: April 29, 2010
    
    By
    
    /s/ ROBERT W. HAMPTONRobert W. HamptonSenior Vice President  Accounting and
Secretary (Duly Authorized Officer and
Chief Accounting Officer)
 24




---



##### Table of Contents



Exhibit Index
 Exhibit No.
    
    Description3.1
    
    
    Amended and Restated Certificate of
Incorporation (incorporated by
reference to Exhibit 3.1 to the
Companys Annual Report on Form 10-K
for the year ended December 31,
2000, as filed with the Commission
on March 30, 2001 (File No.
001-16337)).3.2
    
    
    Third Amended and Restated Bylaws
(incorporated by reference to
Exhibit 3.1 to the Companys Current
Report on Form 8-K, as filed with
the Commission on March 13, 2009
(File No. 001-16337)).3.3
    
    
    Certificate of Designations of
Special Preferred Voting Stock of
Oil States International, Inc.
(incorporated by reference to
Exhibit 3.3 to the Companys Annual
Report on Form 10-K for the year
ended December 31, 2000, as filed
with the Commission on March 30,
2001(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 Commission on
November 7, 2000 (File No.
333-43400)).4.2
    
    
    Amended and Restated Registration
Rights Agreement (incorporated by
reference to Exhibit 4.2 to the
Companys Annual Report on Form 10-K
for the year ended December 31,
2000, as filed with the Commission
on March 30, 2001 (File No.
001-16337)).4.3
    
    
    First Amendment to the Amended and
Restated Registration Rights
Agreement dated May 17, 2002
(incorporated by reference to
Exhibit 4.3 to the Companys Annual
Report on Form 10-K for the year
ended December 31, 2002, as filed
with the Commission on March 13,
2003 (File No. 001-16337)).4.4
    
    
    Registration Rights Agreement dated
as of June 21, 2005 by and between
Oil States International, Inc. and
RBC Capital Markets Corporation
(incorporated by reference to
Exhibit 4.4 to Oil States Current
Report on Form 8-K as filed with the
Securities and Exchange Commission
on June 23, 2005 (File No.
001-16337)).4.5
    
    
    Indenture dated as of June 21, 2005
by and between Oil States
International, Inc. and Wells Fargo
Bank, National Association, as
trustee (incorporated by reference
to Exhibit 4.5 to Oil States
Current Report on Form 8-K as filed
with the Securities and Exchange
Commission on June 23, 2005 (File
No. 001-16337)).4.6
    
    
    Global Notes representing
$175,000,000 aggregate principal
amount of 2 3/8% Contingent
Convertible Senior Notes due 2025
(incorporated by reference to
Section 2.2 of Exhibit 4.5 to Oil
States Current Reports on Form 8-K
as filed with the Securities and
Exchange Commission on June 23, 2005
and July 13, 2005 (File No.
001-16337)).10.26
    **,*
    
    Executive Agreement between Oil
States International, Inc. and named
executive officer (Charles Moses)
effective March 4, 2010.31.1
    *
    
    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 1934.31.2
    *
    
    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.
 
 *
    
    Filed herewith**
    
    Management contracts or compensatory plans or arrangements***
    
    Furnished herewith.