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SECURITIES AND EXCHANGE
    COMMISSION
 Washington, D.C.
    20549
      Form 10-K
  ANNUAL
    REPORT PURSUANT TO SECTION 13 OR 15(d) OF
 THE SECURITIES EXCHANGE ACT OF 1934
  For the fiscal year ended December 31, 2008
  Commission file
    no. 1-16337
  Oil States International,
    Inc.
 (Exact name of registrant as
    specified in its charter)
  Delaware(State or other Jurisdiction
    of
    Incorporation or Organization)

76-0476605(I.R.S. Employer
    Identification No.)   Three Allen Center, 333 Clay Street, Suite 4620,
    Houston, Texas 77002
 (Address of Principal Executive
    Offices) (Zip Code)
  Registrants telephone number, including area code:
 (713) 652-0582
  Securities registered pursuant to Section 12(b) of the
    Act:
  Title of Each Class

Name of Exchange on Which RegisteredCommon Stock, par value $.01 per share

New York Stock Exchange   Securities registered pursuant to Section 12(g) of the
    Act:
 None
  þ o
  o þ
  þ o
  Regulation S-K Form 10-K form 10-K. þ
  Rule 12b-2
  Large accelerated
    filer þ

Accelerated
    filer o

Non-accelerated
    filer o

Smaller reporting
    company o(Do not check if a smaller reporting company)   Rule 12b-2 o þ
    Voting common stock (as of June 30, 2008)

$
3,136,507,402
     As of February 11, 2009

Common Stock, par value $.01 per share

49,501,436 shares   DOCUMENTS INCORPORATED BY REFERENCE
  Form 10-K, Form 10-K.




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##### 





TABLE OF
    CONTENTS
   
 PART IItem 1.

Business


2-15Item 1A.

Risk Factors


15-25Item 1B.

Unresolved Staff Comments


25Item 2.

Properties


25-26Item 3.

Legal Proceedings


26Item 4.

Submission of Matters to a Vote of Security
    Holders


26PART IIItem 5.

Market for Registrants Common Equity,
    Related Stockholder Matters and Issuer Purchases of Equity
    Securities


27-29Item 6.

Selected Financial Data


29-31Item 7.

Managements Discussion and Analysis of
    Financial Condition and Results of Operations


31-45Item 7A.

Quantitative and Qualitative Disclosures About
    Market Risk


45Item 8.

Financial Statements and Supplementary Data


45Item 9.

Changes in and Disagreements With Accountants on
    Accounting and Financial Disclosure


45Item 9A.

Controls and Procedures


45-46Item 9B.

Other Information


46PART IIIItem 10.

Directors, Executive Officers and Corporate
    Governance


46Item 11.

Executive Compensation


46Item 12.

Security Ownership of Certain Beneficial Owners
    and Management and Related Stockholder Matters


47Item 13.

Certain Relationships and Related Transactions,
    and Director Independence


47Item 14.

Principal Accountant Fees and Services


47PART IVItem 15.

Exhibits and Financial Statement Schedules


47-50SIGNATURES


51INDEX TO CONSOLIDATED FINANCIAL STATEMENTS


52EX-10.21EX-10.22EX-10.23EX-10.24EX-10.25EX-10.26EX-21.1EX-23.1EX-24.1EX-31.1EX-31.2EX-32.1EX-32.2   1




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PART I  This Annual Report on
    Form 10-K
    contains 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. 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 1. Business
    including the risk factors discussed therein and the financial
    statement line item discussions set forth in Item 7.
    Managements Discussion and Analysis of Financial Condition
    and Results of Operations below.
  Cautionary
    Statement Regarding Forward-Looking Statements
  Form 10-K,
    
    the level of demand for and supply of oil and gas;
    fluctuations in the prices of oil and gas;
    the level of drilling and completion activity;
    the level of offshore oil and gas developmental activities;
    current recessionary economic conditions and the depth and
    duration of the recession;
    our ability to find and retain skilled personnel;
    the availability and cost of capital; and
    the other factors identified under the caption Risks
    Factors,  Item 1.
    Business  Our
    Company
   2




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Available
    Information
  www.oilstatesintl.com Form 10-K. Form 10-K, Form 10-Q Form 8-K, Form 10-K.
    Our
    Background
  Form 10-K,
  Our
    Business Strategy
    Acquisitions
    and Capital Spending
   3




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Workover
    Services Business Transaction
         4




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Our
    Industry
  Form 10-K
    year-over-year
      Well Site
    Services
  Overview
   5




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Well
    Site Services Market
    Products
    and Services
  Drilling Services. and/or
    Rental Equipment.
  
    wireline and coiled tubing pressure control equipment;
    wellhead isolation equipment;
    pipe recovery systems;
    thru-tubing fishing services;
    hydraulic chokes and manifolds;
    blow out preventers;
    well testing equipment, including separators and line heaters;
    gravel pack operations on well bores; and
    surface control equipment and down-hole tools utilized by coiled
    tubing operators. 6




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Workforce Accommodations, Catering, Logistics and Modular
    Building Construction.
             7




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Offshore
    Products
  Overview
    Offshore
    Products Market
      Products
    and Services
      Offshore Development and Drilling
    Activities. jack-ups.
  
    flexible bearings and connector products;
    subsea pipeline products;
    marine winches, mooring and lifting systems and rig equipment;
    conductor casing connections and pipe;
    drilling riser repair services;
    blowout preventer stack assembly, integration, testing and
    repair services; and
    other products and services.  Flexible Bearings and Connector Products. ® ®
 8




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®
  ® ®
  Subsea Pipeline Products.
  
    pipeline end manifolds, pipeline end terminals;
    midline tie-in sleds;
    forged steel Y-shaped connectors for joining two pipelines into
    one;
    pressure-balanced safety joints for protecting pipelines and
    related equipment from anchor snags or a shifting sea-bottom;
    electrical isolation joints; and
    hot tap clamps that allow new pipelines to be joined into
    existing lines without interrupting the flow of petroleum
    product.  ® metal-to-metal hook-up ®
    
    repair clamps used to seal leaks and restore the structural
    integrity of a pipeline;
    mechanical connectors used in repairing subsea pipelines without
    having to weld;
    flanges used to correct misalignment and swivel ring
    flanges; and
    pipe recovery tools for recovering dropped or damaged pipelines.  Marine Winches, Mooring and Lifting Systems and Rig
    Equipment. ® jack-ups, ®
 9




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BOP Stack Assembly, Integration, Testing and Repair
    Services.
  Other Products and Services. ® ®
      
    elastomer consumable downhole products for onshore drilling and
    production;
    sound and vibration isolation equipment for the U.S. Navy
    submarine fleet;
    metal-elastomeric
    FlexJoints®

    used in a variety of naval and marine applications; and
    drum-clutches and brakes for heavy-duty power transmission in
    the mining, paper, logging and marine industries.  Backlog. and/or
  Regions
    of Operations
    Customers
    and Competitors
    Tubular
    Services
  Overview
   10




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
    distribute a broad range of casing and tubing;
    provide threading, remediation, logistical and inventory
    management services; and
    offer
    e-commerce
    pricing, ordering, tracking and financial reporting capabilities.    OCTG
    Market
      Products
    and Services
  Tubular Products and Services.
  on-the-ground
  A-Z
    Terminal. A-Z A-Z
 11




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A-Z
  Other Facilities.
  Tubular Products and Services Sales
    Arrangements.
  Regions
    of Operations
    Customers,
    Suppliers and Competitors
    Seasonality
    of Operations
    Employees
   12




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Government
    Regulation
        and/or
     13




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and/or
         14




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Item 1A.
    Risk
    Factors  Our
    Business is Subject to a Number of Economic Risks
   15




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and/or
  Decreased
    oil and gas industry expenditure levels will adversely affect
    our results of operations.
    
    the level of drilling activity;
    the level of production;
    the levels of oil and gas inventories;
    depletion rates;
    the worldwide demand for oil and gas;
    the expected cost of developing new reserves;
    delays in major offshore and onshore oil and gas field
    development timetables;
    the actual cost of finding and producing oil and gas;
    the availability of attractive oil and gas field prospects which
    may be affected by governmental actions or environmental
    activists which may restrict drilling; 16




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
    the availability of transportation infrastructure, refining
    capacity and shifts in end-customer preferences toward fuel
    efficiency and the use of natural gas;
    global weather conditions and natural disasters;
    worldwide economic activity including growth in underdeveloped
    countries, including China and India;
    national government political requirements, including the
    ability of the Organization of Petroleum Exporting Companies
    (OPEC) to set and maintain production levels and prices for oil
    and government policies which could nationalize or expropriate
    oil and gas exploration, production, refining or transportation
    assets;
    the level of oil and gas production by non-OPEC countries;
    the impact of armed hostilities involving one or more oil
    producing nations;
    rapid technological change and the timing and extent of
    alternative energy sources, including liquefied natural gas
    (LNG) or other alternative fuels;
    environmental regulation; and
    domestic and foreign tax policies.  Our
    business may be adversely affected by extended periods of low
    oil prices or unsuccessful exploration results may decrease
    deepwater exploration and production activity or oil sands
    development and production in Canada.
  Form 10-K.
  Because
    the oil and gas industry is cyclical, our operating results may
    fluctuate.
    The
    cyclical nature of our business and a severe prolonged downturn
    could negatively affect the value of our goodwill.
   17




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
    global economic conditions deteriorate further than those
    conditions that existed at December 31, 2008;
    the outlook for future profits and cash flow for any of our
    reporting units deteriorate as the result of many possible
    factors, including, but not limited to, increased or
    unanticipated competition, further reductions in customer
    capital spending plans, loss of key personnel, adverse legal or
    regulatory judgment(s), future operating losses at a reporting
    unit, downward forecast revisions, or restructuring plans;
    costs of equity or debt capital increase further; or
    valuations for comparable public companies or comparable
    acquisition valuations deteriorate further.  The
    level and pricing of tubular goods imported into the United
    States could decrease demand for our tubular goods inventory and
    adversely impact our results of operations. Also, if steel mills
    were to sell a substantial amount of goods directly to end users
    in the United States, our results of operations could be
    adversely impacted.
      If we
    were to lose a significant supplier of our tubular goods, we
    could be adversely affected.
    Our
    operations may suffer due to increased industry-wide capacity of
    certain types of equipment or assets.
     18




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Development
    of permanent infrastructure in the oil sands region could
    negatively impact our accommodations business.
    We do
    business in international jurisdictions whose political and
    regulatory environments and compliance regimes differ from those
    in the United States.
    
    war and civil disturbances or other risks that may limit or
    disrupt markets;
    expropriation, confiscation or nationalization of assets;
    renegotiation or nullification of existing contracts;
    foreign exchange restrictions;
    foreign currency fluctuations;
    foreign taxation;
    the inability to repatriate earnings or capital;
    changing political conditions;
    changing foreign and domestic monetary policies;
    social, political, military and economic situations in foreign
    areas where we do business and the possibilities of war, other
    armed conflict or terrorist attacks; and
    regional economic downturns.    non-U.S. competitors
    We
    might be unable to employ a sufficient number of technical
    personnel.
   19




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Our
    inability to control the inherent risks of acquiring and
    integrating businesses could adversely affect our
    operations.
      
    retaining key employees of acquired businesses;
    retaining and attracting new customers of acquired businesses;
    increased administrative burden;
    developing our sales and marketing capabilities;
    managing our growth effectively;
    potential impairment resulting from the overpayment for an
    acquisition;
    integrating operations;
    operating a new line of business; and
    increased logistical problems common to large, expansive
    operations.    We are
    subject to extensive and costly environmental laws and
    regulations that may require us to take actions that will
    adversely affect our results of operations.
   20




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
    issuance of administrative, civil and criminal penalties;
    denial or revocation of permits or other authorizations;
    reduction or cessation in operations; and
    performance of site investigatory, remedial or other corrective
    actions.  We may
    be exposed to certain regulatory and financial risks related to
    climate change.
      
    result in increased costs associated with our operations and our
    customers operations;
    increase other costs to our business;
    impact overall drilling activity in the areas in which we
    operate; and
    reduce the demand for our services.    We may
    not have adequate insurance for potential
    liabilities.
    
    we may not be able to continue to obtain insurance on
    commercially reasonable terms;
    we may be faced with types of liabilities that will not be
    covered by our insurance, such as damages from environmental
    contamination or terrorist attacks;
    the dollar amount of any liabilities may exceed our policy
    limits;
    the counterparties to our insurance contracts may pose credit
    risks; and
    we may incur losses from interruption of our business that
    exceed our insurance coverage.   21




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We are
    subject to litigation risks that may not be covered by
    insurance.
    We
    might be unable to compete successfully with other companies in
    our industry.
    Our
    concentration of customers in one industry may impact overall
    exposure to credit risk.
    Our
    common stock price has been volatile.
    We may
    assume contractual risk in developing, manufacturing and
    delivering products in our offshore products business
    segment.
       22




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Our
    backlog is subject to unexpected adjustments and cancellations
    and is, therefore, an uncertain indicator of our future revenues
    and earnings.
    and/or
  We are
    susceptible to seasonal earnings volatility due to adverse
    weather conditions in our regions of operations.
    Our
    oilfield operations involve a variety of operating hazards and
    risks that could cause losses.
   23




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We
    might be unable to protect our intellectual property
    rights.
  ®
  If we
    do not develop new competitive technologies and products, our
    business and revenues may be adversely affected.
    Loss
    of key members of our management could adversely affect our
    business.
    We are
    exposed to the credit risk of our customers and other
    counterparties, and a general increase in the nonpayment and
    nonperformance by counterparties could have an adverse impact on
    our cash flows, results of operations and financial
    condition.
   24




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During
    periods of strong demand, we may be unable to obtain critical
    project materials on a timely basis.
    Employee
    and customer labor problems could adversely affect
    us.
    Provisions
    contained in our certificate of incorporation and bylaws could
    discourage a takeover attempt, which may reduce or eliminate the
    likelihood of a change of control transaction and, therefore,
    the ability of our stockholders to sell their shares for a
    premium.
    Item 1B.
    Unresolved
    Staff Comments    Item 2.
    Properties    ApproximateSquareLocation

Footage/Acreage


DescriptionUnited States:Houston, Texas (lease)


15,829


Principal executive officesArlington, Texas


11,264


Offshore products business officeArlington, Texas


36,770


Offshore products business office and warehouseArlington, Texas


55,853


Offshore products manufacturing facilityArlington, Texas (lease)


63,272


Offshore products manufacturing facilityArlington, Texas


44,780


Elastomer technology center for offshore productsArlington, Texas


60,000


Molding and aerospace facilities for offshore productsHouston, Texas (lease)


52,000


Offshore products business officeHouston, Texas


25 acres


Offshore products manufacturing facility and yardHouston, Texas


22 acres


Offshore products manufacturing facility and yardLampasas, Texas


48,500


Molding facility for offshore productsLampasas, Texas (lease)


20,000


Warehouse for offshore productsTulsa, Oklahoma


74,600


Molding facility for offshore productsTulsa, Oklahoma (lease)


14,000


Molding facility for offshore productsHouma, Louisiana


40 acres


Offshore products manufacturing facility and yardHouma, Louisiana (lease)


20,000


Offshore products manufacturing facility and yardHouston, Texas (lease)


9,945


Tubular services business officeTulsa, Oklahoma (lease)


11,955


Tubular services business officeMidland, Texas


60 acres


Tubular yardGodley, Texas


31 acres


Tubular yard 25




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ApproximateSquareLocation

Footage/Acreage


DescriptionCrosby, Texas


109 acres


Tubular yardSearcy, Arkansas


14 acres


Tubular yardBelle Chasse, Louisiana (own and lease)


427,020


Accommodations manufacturing facility and yard for well site
    servicesOdessa, Texas


22 acres


Office and warehouse in support of drilling operations for well
    site servicesWooster, Ohio (lease)


12,400


Office and warehouse in support of drilling operationsCasper, Wyoming


7 acres


Office, shop and yard in support of drilling operationsBillings, Montana (lease)


7 acres


Office, shop and yard in support of drilling operationsAlvin, Texas


36,150


Rental tool warehouse for well site servicesHouston, Texas


60,000


Rental tool warehouse for well site servicesMonahans, Texas (lease)


15 acres


Rental tool warehouse, shop and office for well site servicesOklahoma City, Oklahoma


4 acres


Rental tool warehouse, shop and office for well site servicesBroussard, Louisiana


18,875


Rental tool warehouse for well site servicesCanada:Nisku, Alberta


8.58 acres


Accommodations manufacturing facility for well site servicesSpruce Grove, Alberta


15,000


Accommodations facility and equipment yard for well site servicesGrande Prairie, Alberta


14.69 acres


Accommodations facility and equipment yard for well site servicesGrimshaw, Alberta (lease)


20 acres


Accommodations equipment yard for well site servicesEdmonton, Alberta


33 acres


Accommodations manufacturing facility for well site servicesEdmonton, Alberta (lease)


72,456


Accommodations office and warehouse for well site servicesEdmonton, Alberta (lease)


16,130


Accommodations office for well site servicesFort McMurray, Alberta (lease)


128 acres


Accommodations facility for well site servicesFort McMurray, Alberta (lease)


80 acres


Accommodations facility for well site servicesFort McMurray, Alberta (lease)


135 acres


Accommodations facility for well site servicesFort McMurray, Alberta


45 acres


Accommodations facility for well site servicesOther International:Red Deer, Alberta


35,000


Rental tool business office for well site services site servicesAberdeen, Scotland (lease)


15 acres


Offshore products manufacturing facility and yardBathgate, Scotland


3 acres


Offshore products manufacturing facility and yardBarrow-in-Furness,
    England (own and lease)


162,482


Offshore products service facility and yardSingapore (lease)


141,747


Offshore products manufacturing facilityMacae, Brazil (lease)


6 acres


Offshore products manufacturing facility and yardRayong Province, Thailand (lease)


28,000


Offshore products service facility     Item 3.
    Legal
    Proceedings    Item 4.
    Submission
    of Matters to a Vote of Security Holders   26




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PART II  Item 5.
    Market
    for Registrants Common Equity, Related Stockholder
    Matters, and Issuer Purchases of Equity Securities  Common
    Stock Information
  Form 10-K,
    Sales PriceHigh


Low2007:First Quarter


32.65



26.92Second Quarter


42.45



31.66Third Quarter


48.72



36.22Fourth Quarter


50.98



30.362008:First Quarter


45.88



30.94Second Quarter


64.37



44.42Third Quarter


64.84



32.39Fourth Quarter


35.35



14.722009:First Quarter (through February 11, 2009)


22.50



17.00    27




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PERFORMANCE
    GRAPH
    COMPARISON
    OF 5 YEAR CUMULATIVE TOTAL RETURN*
    Among Oil States International, Inc., The S&P 500 Index
    And The PHLX Oil Service Sector Index
  
    Cumulative Total Return12/03


12/04


12/05


12/06


12/07


12/08OIL STATES INTERNATIONAL, INC.


$
100.00



$
138.38



$
227.26



$
231.21



$
244.76



$
134.07S & P 500



100.00




110.88




116.33




134.70




142.10




89.53PHLX OIL SERVICE SECTOR (OSX)



100.00




131.78




195.68




220.88




322.32




132.62     *
    
    $100 invested on 12/31/03 in stock or index-including
    reinvestment of dividends. Fiscal year ending December 31.(1)
    
    This graph is not soliciting material, is not deemed
    filed with the SEC and is not to be incorporated by reference in
    any filing by us under the Securities Act of 1933, as amended
    (the Securities Act), or the Exchange Act, whether made before
    or after the date hereof and irrespective of any general
    incorporation language in any such filing.(2)
    
    The stock price performance shown on the graph is not
    necessarily indicative of future price performance. Information
    used in the graph was obtained from Research Data Group, Inc., a
    source believed to be reliable, but we are not responsible for
    any errors or omissions in such information.  ©
 28




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Equity
    Compensation Plans
    Unregistered
    Sales of Equity Securities and Use of Proceeds
    Purchases
    of Equity Securities by the Issuer and Affiliated
    Purchases
  Cumulative TotalNumber of Shares


ApproximatePurchased


Dollar Value of SharesAverage Price


as Part of the


Remaining to be PurchasedTotal Number of


Paid


Share Repurchase


Under the Share RepurchasePeriod

Shares Purchased


per Share


Program 1


ProgramOctober 1, 2008  October 31, 2008










2,869,932


$
65,459,901November 1, 2008  November 30, 2008


253,713


$
19.30



3,123,645


$
60,563,083December 1, 2008  December 31, 2008


38,699


$
16.54



3,162,344


$
59,923,188Total


292,412


$
18.93



3,162,344


$
59,923,188     (1)
    
    During the first quarter of 2005, our Board of Directors
    authorized the repurchase of up to $50 million of our
    common stock, par value $.01 per share, over a two year period.
    On August 25, 2006, we announced the authorization of an
    additional $50.0 million and the extension of the program
    to August 31, 2008. On January 11, 2008, an additional
    $50 million was approved for the repurchase program and the
    duration of the program was extended to December 31, 2009.
    Through February 12, 2009, we have repurchased
    3,162,344 shares of our common stock for $90.1 million
    under the repurchase program, leaving $59.9 million
    available for future share repurchases.  Item 6.
    Selected
    Financial Data   29




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Form 10-K.
  Selected
    Financial Data
    (In thousands, except per share amounts)
  Year Ended December 31,2008


2007


2006


2005


2004Statements of Operations Data:Revenues

$
2,948,457


$
2,088,235


$
1,923,357


$
1,531,636


$
971,012Costs and Expenses:Product costs, service and other costs


2,234,974



1,602,213



1,467,988



1,206,187



774,638Selling, general and administrative


143,080



118,421



107,216



84,672



64,810Depreciation and amortization


102,604



70,703



54,340



46,704



35,988Impairment of goodwill


85,630















Other operating expense (income)


(1,586
)


(888
)


(4,124
)


(488
)


460Operating income


383,755



297,786



297,937



194,561



95,116Interest expense


(17,530
)


(17,988
)


(19,389
)


(13,903
)


(7,667
)Interest income


3,561



3,508



2,506



475



363Equity in earnings of unconsolidated affiliates


4,035



3,350



7,148



1,276



361Gain on sale of workover services business and resulting equity
    investment


6,160



12,774



11,250







Other income (expense)


(922
)


928



2,195



98



595Income before income taxes


379,059



300,358



301,647



182,507



88,768Income tax expense(1)


(156,349
)


(96,986
)


(104,013
)


(60,694
)


(29,406
)Net income

$
222,710


$
203,372


$
197,634


$
121,813


$
59,362Net income per common shareBasic

$
4.49


$
4.11


$
3.99


$
2.47


$
1.20Diluted

$
4.33


$
3.99


$
3.89


$
2.41


$
1.19Average shares outstandingBasic


49,622



49,500



49,519



49,344



49,329Diluted


51,414



50,911



50,773



50,479



50,027Other Data:EBITDA, as defined(2)

$
495,632


$
385,541


$
372,870


$
242,639


$
132,060Capital expenditures, including capitalized interest


247,384



239,633



129,591



83,392



60,041Acquisitions of businesses, net of cash acquired


29,835



103,143



99



147,608



80,806Net cash provided by operating activities


257,464



247,899



137,367



33,398



97,167Net cash used in investing activities, including capital
    expenditures


(246,094
)


(310,836
)


(114,248
)


(229,881
)


(137,713
)Net cash provided by (used in) financing activities


(1,666
)


60,632



(11,201
)


195,269



38,816  30




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At December 31,2008


2007


2006


2005


2004Balance Sheet Data:Cash and cash equivalents

$
30,199


$
30,592


$
28,396


$
15,298


$
19,740Total current assets


1,237,484



865,667



783,989



663,744



435,184Net property, plant and equipment


695,338



586,910



358,716



310,452



227,343Total assets


2,299,247



1,929,626



1,571,094



1,342,872



933,612Long-term debt and capital leases, excluding current portion


474,948



487,102



391,729



402,109



173,887Total stockholders equity


1,218,993



1,084,827



839,836



633,984



530,024     (1)
    
    Our effective tax rate was lowered by our net operating loss
    carry forwards in certain of the periods presented and increased
    in 2008 by the impairment of non-deductible goodwill.(2)
    
    The term EBITDA as defined consists of net income plus interest,
    taxes, depreciation and amortization. EBITDA as defined is not a
    measure of financial performance under generally accepted
    accounting principles. You should not consider it in isolation
    from or as a substitute for net income or cash flow measures
    prepared in accordance with generally accepted accounting
    principles or as a measure of profitability or liquidity.
    Additionally, EBITDA as defined may not be comparable to other
    similarly titled measures of other companies. The Company has
    included EBITDA as defined as a supplemental disclosure because
    its management believes that EBITDA as defined provides useful
    information regarding its ability to service debt and to fund
    capital expenditures and provides investors a helpful measure
    for comparing its operating performance with the performance of
    other companies that have different financing and capital
    structures or tax rates. The Company uses EBITDA as defined to
    compare and to monitor the performance of its business segments
    to other comparable public companies and as one of the primary
    measures to benchmark for the award of incentive compensation
    under its annual incentive compensation plan.    Year Ended December 31,2008


2007


2006


2005


2004Net income

$
222,710


$
203,372


$
197,634


$
121,813


$
59,362Depreciation and amortization


102,604



70,703



54,340



46,704



35,988Interest expense, net


13,969



14,480



16,883



13,428



7,304Income taxes


156,349



96,986



104,013



60,694



29,406EBITDA, as defined

$
495,632


$
385,541


$
372,870


$
242,639


$
132,060   ITEM 7.
    Managements
    Discussion and Analysis of Financial Condition and Results of
    Operations  Form 10-K.
  Overview
   31




---



##### Table of Contents



Average Rig Count forYear Ended December 31,2008


2007


2006


2005


2004U.S. Land


1,813



1,695



1,559



1,294



1,093U.S. Offshore


65



73



90



89



97Total U.S.


1,878



1,768



1,649



1,383



1,190Canada


379



343



470



458



369Total North America


2,257



2,111



2,119



1,841



1,559          32




---



##### Table of Contents



33




---



##### Table of Contents



Consolidated
    Results of Operations (in millions)
  Year EndedDecember 31,Variance





Variance2008 vs. 2007





2007 vs. 20062008


2007


$


%


2006


$


%RevenuesWell Site Services Accommodations

$
427.1


$
312.8


$
114.3



37
%

$
314.0


$
(1.2
)


0
%Rental Tools


355.8



260.4



95.4



37
%


200.6



59.8



30
%Drilling and Other


177.4



143.2



34.2



24
%


134.5



8.7



6
%Workover Services















%


8.6



(8.6
)


(100
)%Total Well Site Services


960.3



716.4



243.9



34
%


657.7



58.7



9
%Offshore Products


528.2



527.8



0.4



0
%


389.7



138.1



35
%Tubular Services


1,460.0



844.0



616.0



73
%


876.0



(32.0
)


(4
)%Total

$
2,948.5


$
2,088.2


$
860.3



41
%

$
1,923.4


$
164.8



9
%Product costs; Service and other costs (Cost of sales and
    service)Well Site Services Accommodations

$
245.6


$
182.1


$
63.5



35
%

$
208.6


$
(26.5
)


(13
)%Rental Tools


207.3



135.5



71.8



53
%


94.4



41.1



44
%Drilling and Other


114.2



88.3



25.9



29
%


69.1



19.2



28
%Workover Services















%


5.3



(5.3
)


(100
)%Total Well Site Services


567.1



405.9



161.2



40
%


377.4



28.5



8
%Offshore Products


394.2



403.1



(8.9
)


(2
)%


293.9



109.2



37
%Tubular Services


1,273.7



793.2



480.5



61
%


796.7



(3.5
)


0
%Total

$
2,235.0


$
1,602.2


$
632.8



39
%

$
1,468.0


$
134.2



9
%Gross marginWell Site Services Accommodations

$
181.5


$
130.7


$
50.8



39
%

$
105.4


$
25.3



24
%Rental Tools


148.5



124.9



23.6



19
%


106.2



18.7



18
%Drilling and Other


63.2



54.9



8.3



15
%


65.4



(10.5
)


(16
)%Workover Services















%


3.3



(3.3
)


(100
)%Total Well Site Services


393.2



310.5



82.7



27
%


280.3



30.2



11
%Offshore Products


134.0



124.7



9.3



7
%


95.8



28.9



30
%Tubular Services


186.3



50.8



135.5



267
%


79.3



(28.5
)


(36
)%Total

$
713.5


$
486.0


$
227.5



47
%

$
455.4


$
30.6



7
%Gross margin as a percent of revenuesWell Site Services Accommodations


42
%


42
%










34
%Rental Tools


42
%


48
%










53
%Drilling and Other


36
%


38
%










49
%Workover Services



%



%










38
%Total Well Site Services


41
%


43
%










43
%Offshore Products


25
%


24
%










25
%Tubular Services


13
%


6
%










9
%Total


24
%


23
%










24
%  34




---



##### Table of Contents



YEAR
    ENDED DECEMBER 31, 2008 COMPARED TO YEAR ENDED DECEMBER 31,
    2007
  Form 10-K. Form 10-K.
  Revenues.
              Cost of Sales and Service.
       35




---



##### Table of Contents



Selling, General and Administrative
    Expenses.
  Depreciation and Amortization.
  Impairment of Goodwill. Form 10-K.
  Operating Income.
  Gain on Sale of Investment. Form 10-K.
  Interest Expense and Interest Income. Form 10-K.
  Equity in Earnings of Unconsolidated
    Affiliates.
  Income Tax Expense.
  YEAR
    ENDED DECEMBER 31, 2007 COMPARED TO YEAR ENDED DECEMBER 31,
    2006
  Form 10-K.
  Revenues.
     36




---



##### Table of Contents



Cost of Sales and Service.
            Selling, General and Administrative
    Expenses.
  Depreciation and Amortization.
 37




---



##### Table of Contents



Operating Income.
  Interest Expense and Interest Income. Form 10-K.
  Equity in Earnings of Unconsolidated
    Affiliates.
  Income Tax Expense.
  Liquidity
    and Capital Resources
    Form 10-K.
     38




---



##### Table of Contents



Form 10-K.
        and/or
    Stock Repurchase Program.
 39




---



##### Table of Contents



Credit Facility.
      Contingent Convertible Notes. 3 8 3 8 3 8 3 8 3 8 Form 10-K.
  3 8 3 8
 40




---



##### Table of Contents



3 8 3 8 3 8 14-1, 3 8 3 8 3 8 3 8 3 8 14-1 3 8
  Contractual Cash Obligations.
  Due in Less


Due in


Due in


Due AfterDecember 31, 2008

Total


than 1 year


1-3 years


3 - 5 years


5 yearsContractual obligations:Total debt, including capital leases(1)

$
479,891


$
4,943


$
292,289


$
175,703


$
6,956Non-cancelable operating leases


25,604



6,499



8,420



5,315



5,370Purchase obligations


441,308



441,308











Total contractual cash obligations

$
946,803


$
452,750


$
300,709


$
181,018


$
12,326     (1)
    
    Excludes interest on debt.  Form 10-K. 3 8
  Off-Balance
    Sheet Arrangements
  Regulation S-K.
  Tax
    Matters
   41




---



##### Table of Contents



Critical
    Accounting Policies
      Accounting
    for Contingencies
    Tangible
    and Intangible Assets, including Goodwill
     42




---



##### Table of Contents



Revenue
    and Cost Recognition
    Valuation
    Allowances
  Form 10-K
  Estimation
    of Useful Lives
    Stock
    Based Compensation
    Income
    Taxes
   43




---



##### Table of Contents



Recent
    Accounting Pronouncements
  157-2,
        14-1, 3 8 3 8 3 8
 44




---



##### Table of Contents



3 8 3 8 14-1 3 8
    ITEM 7A.
    Quantitative
    And Qualitative Disclosures About Market Risk  Interest Rate Risk.
  Foreign Currency Exchange Rate Risk.
  Item 8.
    Financial
    Statements and Supplementary Data  Form 10-K
  Item 9.
    Changes
    in and Disagreements With Accountants on Accounting and
    Financial Disclosure    Item 9A.
    Controls
    and Procedures  (i)
    Evaluation
    of Disclosure Controls and Procedures  Evaluation of Disclosure Controls and
    Procedures. Form 10-K, Rule 13a-15(e)
 45




---



##### Table of Contents



Form 10-K,
    (ii)
    Internal
    Control Over Financial Reporting  (a)
    Managements
    annual report on internal control over financial
    reporting.  Form 10-K
  (b)
    Attestation
    report of the registered public accounting firm.  Form 10-K
  (c)
    Changes
    in internal control over financial reporting.  Rule 13a-15(f)
  Item 9B.
    Other
    Information  Form 8-K Form 8-K
 PART III  Item 10.
    Director,
    Executive Officers and Corporate Governance        Item 11.
    Executive
    Compensation   46




---



##### Table of Contents



Item 12.
    Security
    Ownership of Certain Beneficial Owners and Management and
    Related Stockholder Matters    Item 13.
    Certain
    Relationships and Related Transactions, and Director
    Independence    Item 14.
    Principal
    Accountant Fees and Services   PART IV  Item 15.
    Exhibits
    and Financial Statement Schedules  (a) Index to Financial Statements, Financial Statement
    Schedules and Exhibits
  Financial Statements: Form 10-K.
  Financial Statement Schedules:
  Index of Exhibits: Form 10-K Regulation S-K.
  (b) Index of 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).3
.2



Second 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 May 21, 2008).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).4
.1



Form of common stock certificate (incorporated by reference to
    Exhibit 4.1 to the Companys Registration Statement on
    Form S-1
    (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).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).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 Oil
    States Current Report on
    Form 8-K
    filed with the Securities and Exchange Commission on
    June 23, 2005). 47




---



##### Table of Contents



Exhibit No.



Description4
.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 Oil
    States Current Report on
    Form 8-K
    filed with the Securities and Exchange Commission on
    June 23, 2005).4
.6



Global Notes representing $175,000,000 aggregate principal
    amount of
    23/8%
    Contingent Convertible Senior Notes due 2025 (incorporated by
    reference to Section 2.2 of Exhibit 4.5 hereof)
    (incorporated by reference to Oil States Current Reports
    on
    Form 8-K
    filed with the Securities and Exchange Commission on
    June 23, 2005 and July 13, 2005).10
.1



Combination Agreement dated as of July 31, 2000 by and
    among Oil States International, Inc., HWC Energy Services, Inc.,
    Merger Sub-HWC, Inc., Sooner Inc., Merger Sub-Sooner, Inc. and
    PTI Group Inc. (incorporated by reference to Exhibit 10.1
    to the Companys Registration Statement on
    Form S-1
    (File
    No. 333-43400)).10
.2



Plan of Arrangement of PTI Group Inc. (incorporated by reference
    to Exhibit 10.2 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).10
.3



Support Agreement between Oil States International, Inc. and PTI
    Holdco (incorporated by reference to Exhibit 10.3 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).10
.4



Voting and Exchange Trust Agreement by and among Oil States
    International, Inc., PTI Holdco and Montreal Trust Company
    of Canada (incorporated by reference to Exhibit 10.4 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).10
.5**



2001 Equity Participation Plan as amended and restated effective
    February 16, 2005 (incorporated by reference to
    Exhibit 10.5 to the Companys Annual Report on
    Form 10-K
    for the year ended December 31, 2005, as filed with the
    Commission on March 2, 2006).10
.6**



Deferred Compensation Plan effective November 1, 2003
    (incorporated by reference to Exhibit 10.6 to the
    Companys Annual Report on
    Form 10-K
    for the year ended December 31, 2003, as filed with the
    Commission on March 5, 2004).10
.7**



Annual Incentive Compensation Plan (incorporated by reference to
    Exhibit 10.7 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).10
.8**



Executive Agreement between Oil States International, Inc. and
    Cindy B. Taylor (incorporated by Reference to Exhibit 10.9
    to the Companys Annual Report on
    Form 10-K
    for the year ended December 31, 2000, as filed with the
    Commission on March 30, 2001).10
.9**



Form of Executive Agreement between Oil States International,
    Inc. and Named Executive Officer (Mr. Hughes) (incorporated
    by reference to Exhibit 10.10 of the Companys
    Registration Statement on
    Form S-1
    (File
    No. 333-43400)).10
.10**



Form of Change of Control Severance Plan for Selected Members of
    Management (incorporated by reference to Exhibit 10.11 of
    the Companys Registration Statement on
    Form S-1
    (File
    No. 333-43400)).10
.11



Credit Agreement, dated as of October 30, 2003, among Oil
    States International, Inc., the Lenders named therein and Wells
    Fargo Bank Texas, National Association, as Administrative Agent
    and U.S. Collateral Agent; and Bank of Nova Scotia, as Canadian
    Administrative Agent and Canadian Collateral Agent; Hibernia
    National Bank and Royal Bank of Canada, as Co-Syndication Agents
    and Bank One, NA and Credit Lyonnais New York Branch, as
    Co-Documentation Agents (incorporated by reference to
    Exhibit 10.12 to the Companys Quarterly Report on
    Form 10-Q
    for the three months ended September 30, 2003, as filed
    with the Commission on November 11, 2003.)10
.11A



Incremental Assumption Agreement, dated as of May 10, 2004,
    among Oil States International, Inc., Wells Fargo, National
    Association and each of the other lenders listed as an
    Increasing Lender (incorporated by reference to
    Exhibit 10.12A to the Companys Quarterly Report on
    Form 10-Q
    for the three months ended June 30, 2004, as filed with the
    Commission on August 4, 2004). 48




---



##### Table of Contents



Exhibit No.



Description10
.11B



Amendment No. 1, dated as of January 31, 2005, to the
    Credit Agreement among Oil States International, Inc., the
    lenders named therein and Wells Fargo Bank, Texas, National
    Association, as Administrative Agent and U.S. Collateral Agent;
    and Bank of Nova Scotia, as Canadian Administrative Agent and
    Canadian Collateral Agent; Hibernia National Bank and Royal Bank
    of Canada, as Co-Syndication Agents and Bank One, NA and Credit
    Lyonnais New York Branch, as Co-Documentation Agents
    (incorporated by reference to Exhibit 10.12b to the
    Companys Annual Report on
    Form 10-K
    for the year ended December 31, 2004, as filed with the
    Commission on March 2, 2005).10
.11C



Amendment No. 2, dated as of December 5, 2006, to the
    Credit Agreement among Oil States International, Inc., the
    lenders named therein and Wells Fargo Bank, N.A., as Lead
    Arranger, U.S. Administrative Agent and U.S. Collateral Agent;
    and The Bank of Nova Scotia, as Canadian Administrative Agent
    and Canadian Collateral Agent; Capital One N.A. and Royal Bank
    of Canada, as Co-Syndication Agents and JP Morgan Chase Bank,
    N.A. and Calyon New York Branch, as Co-Documentation Agents
    (incorporated by reference to Exhibit 10.12C to the
    Companys Current Report on
    Form 8-K
    filed with the Securities and Exchange Commission on
    December 7, 2006).10
.11D



Incremental Assumption Agreement, dated as of December 13,
    2007, among Oil States International, Inc., Wells Fargo,
    National Association and each of the other lenders listed as an
    Increasing Lender (incorporated by reference to
    Exhibit 10.12D to the Companys Current Report on
    Form 8-K
    filed with the Securities and Exchange Commission on
    December 18, 2007).10
.12**



Form of Indemnification Agreement (incorporated by reference to
    Exhibit 10.14 to the Companys Quarterly Report on
    Form 10-Q
    for the quarter ended September 30, 2004, as filed with the
    Commission on November 5, 2004).10
.13**



Form of Director Stock Option Agreement under the Companys
    2001 Equity Participation Plan (incorporated by reference to
    Exhibit 10.18 to the Companys Annual Report on
    Form 10-K
    for the year ended December 31, 2004, as filed with the
    Commission on March 2, 2005).10
.14**



Form of Employee Non Qualified Stock Option Agreement under the
    Companys 2001 Equity Participation Plan (incorporated by
    reference to Exhibit 10.19 to the Companys Annual
    Report on
    Form 10-K
    for the year ended December 31, 2004, as filed with the
    Commission on March 2, 2005).10
.15**



Form of Restricted Stock Agreement under the Companys 2001
    Equity Participation Plan (incorporated by reference to
    Exhibit 10.20 to the Companys Annual Report on
    Form 10-K
    for the year ended December 31, 2004, as filed with the
    Commission on November 15, 2006).10
.16**



Non-Employee Director Compensation Summary (incorporated by
    reference to Exhibit 10.21 to the Companys Report on
    Form 8-K
    as filed with the Commission on May 24, 2005).10
.17**



Form of Executive Agreement between Oil States International,
    Inc. and named executive officer (Mr. Cragg) (incorporated
    by reference to Exhibit 10.22 to the Companys
    Quarterly Report on
    Form 10-Q
    for the quarter ended March 31, 2005, as filed with the
    Commission on April 29, 2005).10
.18**



Form of Non-Employee Director Restricted Stock Agreement under
    the Companys 2001 Equity Participation Plan (incorporated
    by reference to Exhibit 22.2 to the Companys Report
    of
    Form 8-K,
    as filed with the Commission on May 24, 2005).10
.19**



Form of Executive Agreement between Oil States International,
    Inc. and named executive officer (Bradley Dodson) effective
    October 10, 2006 (incorporated by reference to
    Exhibit 10.24 to the Companys Quarterly Report on
    Form 10-Q
    for the quarter ended September 30, 2006, as filed with the
    Commission on November 3, 2006).10
.20**



Form of Executive Agreement between Oil States International,
    Inc. and named executive officer (Ron R. Green) effective
    May 17, 2007.10
.21**,*



Amendment to the Executive Agreement of Cindy Taylor, effective
    January 1, 2009.10
.22**,*



Amendment to the Executive Agreement of Bradley Dodson,
    effective January 1, 2009.10
.23**,*



Amendment to the Executive Agreement of Howard Hughes, effective
    January 1, 2009.10
.24**,*



Amendment to the Executive Agreement of Christopher Cragg,
    effective January 1, 2009.10
.25**,*



Amendment to the Executive Agreement of Ron Green, effective
    January 1, 2009. 49




---



##### Table of Contents



Exhibit No.



Description10
.26**,*



Amendment to the Executive Agreement of Robert Hampton,
    effective January 1, 2009.21
.1*



List of subsidiaries of the Company.23
.1*



Consent of Independent Registered Public Accounting Firm.24
.1*



Powers of Attorney for Directors.31
.1*



Certification of Chief Executive Officer of Oil States
    International, Inc. pursuant to
    Rules 13a-14(a)
    or 15d-14(a) under the Securities Exchange Act of 1934.31
.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. 50




---



##### Table of Contents



SIGNATURES      By
    /s/  CINDY
    B. TAYLOR    President and Chief Executive Officer
    Signature

TitleSTEPHEN
    A. WELLS*Stephen
    A. Wells*

Chairman of the Board/s/  CINDY
    B. TAYLORCindy
    B. Taylor

Director, President & Chief Executive Officer
    (Principal Executive Officer)/s/  BRADLEY
    J. DODSONBradley
    J. Dodson

Vice President, Chief Financial Officer and Treasurer (Principal
    Financial Officer)/s/  ROBERT
    W. HAMPTONRobert
    W. Hampton

Senior Vice President  Accounting and Corporate
    Secretary (Principal Accounting Officer)/s/  MARTIN
    LAMBERT*Martin
    Lambert*

Director/s/  S.
    JAMES NELSON, JR.*S.
    James Nelson, Jr.*

Director/s/  MARK
    G. PAPA*Mark
    G. Papa*

Director/s/  GARY
    L. ROSENTHAL*Gary
    L. Rosenthal*

Director/s/  CHRISTOPHER
    T. SEAVER*Christopher
    T. Seaver*

Director/s/  DOUGLAS
    E. SWANSON*Douglas
    E. Swanson*

Director/s/  WILLIAM
    T. VAN KLEEF*William
    T. Van Kleef*

Director*By:

/s/  BRADLEY
    J. DODSONBradley
    J. Dodson, pursuant to a power of attorney filed as
    Exhibit 24.1 to this Annual Report on
    Form 10-K  51




---



##### Table of Contents



OIL
    STATES INTERNATIONAL, INC. AND SUBSIDIARIES
  INDEX
    TO
  CONSOLIDATED
    FINANCIAL STATEMENTS
  Managements Annual Report on Internal
    Control Over Financial Reporting


53Report of Independent Registered Public
    Accounting Firm on Consolidated Financial Statements


54Report of Independent Registered Public
    Accounting Firm on the Companys Internal Control Over
    Financial Reporting


55Consolidated Statements of Income for the Years
    Ended December 31, 2008, 2007, and 2006


56Consolidated Balance Sheets at December 31,
    2008 and 2007


57Consolidated Statements of Stockholders
    Equity and Comprehensive Income for the Years Ended
    December 31, 2008, 2007 and 2006


58Consolidated Statements of Cash Flows for the
    Years Ended December 31, 2008, 2007, and 2006


59Notes to Consolidated Financial Statements


6084  52




---



##### Table of Contents



OIL
    STATES INTERNATIONAL, INC. AND SUBSIDIARIES
  MANAGEMENTS
    ANNUAL REPORT ON INTERNAL CONTROL
 OVER
    FINANCIAL REPORTING
  To the Stockholders and Board of Directors of Oil States
    International, Inc.:
  Rules 13a-15(f) 15d-15(f)
           53




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##### Table of Contents



OIL
    STATES INTERNATIONAL, INC. AND SUBSIDIARIES
  REPORT
    OF INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM
  To the Board of Directors and Stockholders of Oil States
    International, Inc.:
        Accounting for Uncertainty in
    Income Taxes an interpretation of FASB Statement
    No. 109
        54




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##### Table of Contents



OIL
    STATES INTERNATIONAL, INC. AND SUBSIDIARIES
  REPORT
    OF INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM
  To the Board of Directors and Stockholders of Oil States
    International, Inc.:
                  55




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##### Table of Contents



OIL
    STATES INTERNATIONAL, INC. AND SUBSIDIARIES
  CONSOLIDATED
    STATEMENTS OF INCOME
  Year Ended December 31,2008


2007


2006(In thousands, except per share amounts)Revenues:Product

$
1,874,262


$
1,280,235


$
1,232,149Service and other


1,074,195



808,000



691,2082,948,457



2,088,235



1,923,357Costs and expenses:Product costs


1,594,139



1,135,354



1,082,379Service and other costs


640,835



466,859



385,609Selling, general and administrative expenses


143,080



118,421



107,216Depreciation and amortization expense


102,604



70,703



54,340Impairment of goodwill


85,630







Other operating income


(1,586
)


(888
)


(4,124
)2,564,702



1,790,449



1,625,420Operating income


383,755



297,786



297,937Interest expense


(17,530
)


(17,988
)


(19,389
)Interest income


3,561



3,508



2,506Equity in earnings of unconsolidated affiliates


4,035



3,350



7,148Gains on sale of workover services business and resulting equity
    investment


6,160



12,774



11,250Other income / (expense)


(922
)


928



2,195Income before income taxes


379,059



300,358



301,647Income tax provision


(156,349
)


(96,986
)


(104,013
)Net income attributable to common shares

$
222,710


$
203,372


$
197,634Basic net income per share

$
4.49


$
4.11


$
3.99Diluted net income per share

$
4.33


$
3.99


$
3.89Weighted average number of common shares outstanding (in
    thousands):Basic


49,622



49,500



49,519Diluted


51,414



50,911



50,773    56




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##### Table of Contents



OIL
    STATES INTERNATIONAL, INC. AND SUBSIDIARIES
  CONSOLIDATED
    BALANCE SHEETS
  December 31,2008


2007(In thousands, except share amounts)ASSETSCurrent assets:Cash and cash equivalents

$
30,199


$
30,592Accounts receivable, net


575,982



450,153Inventories, net


612,488



349,347Prepaid expenses and other current assets


18,815



35,575Total current assets


1,237,484



865,667Property, plant and equipment, net


695,338



586,910Goodwill, net


305,441



391,644Investments in unconsolidated affiliates


5,899



24,778Other noncurrent assets


55,085



60,627Total assets

$
2,299,247


$
1,929,626LIABILITIES AND STOCKHOLDERS EQUITYCurrent liabilities:Accounts payable and accrued liabilities

$
371,789


$
239,119Income taxes


52,546



43Current portion of long-term debt


4,943



4,718Deferred revenue


105,640



60,910Other current liabilities


1,587



121Total current liabilities


536,505



304,911Long-term debt


474,948



487,102Deferred income taxes


55,646



40,550Other noncurrent liabilities


13,155



12,236Total liabilities


1,080,254



844,799Stockholders equity:Common stock, $.01 par value, 200,000,000 shares
    authorized, 49,500,708 shares and 49,392,106 shares
    issued and outstanding, respectively


526



522Additional paid-in capital


425,284



402,091Retained earnings


913,423



690,713Accumulated other comprehensive income (loss)


(28,409
)


73,036Common stock held in treasury at cost, 3,206,645 and
    2,814,302 shares, respectively


(91,831
)


(81,535
)Total stockholders equity


1,218,993



1,084,827Total liabilities and stockholders equity

$
2,299,247


$
1,929,626    57




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##### Table of Contents



OIL
    STATES INTERNATIONAL, INC. AND SUBSIDIARIESCONSOLIDATED STATEMENTS OF STOCKHOLDERS
    EQUITYAND COMPREHENSIVE INCOME
    (In thousands)
  AccumulatedOtherAdditional








ComprehensiveCommon


Paid-In


Retained


Comprehensive


Income


TreasuryStock


Capital


Earnings


Income


(Loss)


StockBalance, December 31, 2005

$
504


$
350,667


$
289,993






$
23,137


$
(30,317
)Net income










197,634


$
197,634Currency translation adjustment














7,016



7,016Other comprehensive income














30



30Comprehensive income













$
204,680Exercise of stock options, including tax benefit


7



13,494Amortization of restricted stock compensation






1,949Restricted stock award






140















(303
)Stock option expense






5,647Stock acquired for cash






















(19,970
)Stock sold in deferred compensation plan






146















62Balance, December 31, 2006

$
511


$
372,043


$
487,627






$
30,183


$
(50,528
)Net income










203,372


$
203,372Currency translation adjustment














42,340



42,340Other comprehensive income














513



513Comprehensive income













$
246,225Exercise of stock options, including tax benefit


10



21,913Amortization of restricted stock compensation






2,959Restricted stock award


1



(1
)














(405
)Stock option expense






5,011Stock acquired for cash






















(30,673
)Stock sold in deferred compensation plan






166















71Fin 48 adjustment










(286
)Balance, December 31, 2007

$
522


$
402,091


$
690,713






$
73,036


$
(81,535
)Net income










222,710


$
222,710Currency translation adjustment














(101,365
)


(101,365
)Unrealized gain on marketable securities, net of tax (see
    Note 7)














2,028



2,028Reclassification adjustment, net of tax (see Note 7)














(2,028
)


(2,028
)Other comprehensive loss














(80
)


(80
)Comprehensive income













$
121,265Exercise of stock options, including tax benefit


4



12,292Amortization of restricted stock compensation






5,371Restricted stock award






















(863
)Stock option expense






5,537Stock acquired for cash






















(9,434
)Stock sold in deferred compensation plan






4















1SEC stock issuance fee






(11
)Balance, December 31, 2008

$
526


$
425,284


$
913,423






$
(28,409
)

$
(91,831
)    58




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##### Table of Contents



OIL
    STATES INTERNATIONAL, INC. AND SUBSIDIARIES
  CONSOLIDATED
    STATEMENTS OF CASH FLOWS
  Year Ended December 31,2008


2007


2006(In thousands)Cash flows from operating activities:Net income

$
222,710


$
203,372


$
197,634Adjustments to reconcile net income to net cash provided by
    operating activities:Depreciation and amortization


102,604



70,703



54,340Deferred income tax provision


15,890



6,802



755Excess tax benefits from share-based payment arrangements


(3,429
)


(8,127
)


(5,007
)Non-cash gain on sale of workover services business










(11,250
)Loss on impairment of goodwill


85,630







Gains on sale of investment and disposals of assets


(6,270
)


(14,883
)


(7,707
)Equity in earnings of unconsolidated subsidiaries


(2,983
)


(2,973
)


(7,148
)Non-cash compensation charge


10,908



7,970



7,595Other, net


3,928



951



3,288Changes in operating assets and liabilities, net of effect from
    acquired businesses:Accounts receivable


(155,897
)


(68,080
)


(88,429
)Inventories


(281,971
)


43,186



(22,569
)Accounts payable and accrued liabilities


143,479



34,806



(18,593
)Taxes payable


66,616



(7,199
)


11,621Other current assets and liabilities, net


56,249



(18,629
)


22,837Net cash flows provided by operating activities


257,464



247,899



137,367Cash flows from investing activities:Capital expenditures, including capitalized interest


(247,384
)


(239,633
)


(129,090
)Acquisitions of businesses, net of cash acquired


(29,835
)


(103,143
)


(99
)Cash balances of workover services business sold










(4,366
)Proceeds from sale of investment


27,381



29,354



Proceeds from sale of buildings and equipment


4,390



3,861



20,907Other, net


(646
)


(1,275
)


(1,600
)Net cash flows used in investing activities


(246,094
)


(310,836
)


(114,248
)Cash flows from financing activities:Revolving credit borrowings (repayments)


1,474



81,798



(6,617
)Debt repayments


(4,960
)


(6,972
)


(2,284
)Issuance of common stock


8,868



13,796



8,509Purchase of treasury stock


(9,563
)


(35,458
)


(15,056
)Excess tax benefits from share based payment arrangements


3,429



8,127



5,007Payment of financing costs


(39
)


(255
)


(580
)Other, net


(875
)


(404
)


(180
)Net cash flows provided by (used in) financing activities


(1,666
)


60,632



(11,201
)Effect of exchange rate changes on cash


(9,802
)


5,018



1,350Net increase (decrease) in cash and cash equivalents from
    continuing operations


(98
)


2,713



13,268Net cash used in discontinued operations  operating
    activities


(295
)


(517
)


(170
)Cash and cash equivalents, beginning of year


30,592



28,396



15,298Cash and cash equivalents, end of year

$
30,199


$
30,592


$
28,396    59




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##### Table of Contents



OIL
    STATES INTERNATIONAL, INC. AND SUBSIDIARIES
  NOTES TO
    CONSOLIDATED FINANCIAL STATEMENTS
  1.
    Organization
    and Basis of Presentation      2.
    Summary
    of Significant Accounting Policies  Cash
    and Cash Equivalents
    Fair
    Value of Financial Instruments
    3 8
  At December 31,2008


2007Interest


Carrying


Fair


Carrying


FairRate


Value


Value


Value


Value23/8%
    Contingent Convertible Senior Notes due 2025


23/8
%

$
175,000


$
133,613


$
175,000


$
225,225     Inventories
   60




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##### Table of Contents



OIL
    STATES INTERNATIONAL, INC. AND SUBSIDIARIES
  NOTES TO
    CONSOLIDATED FINANCIAL
    STATEMENTS  (Continued)
  Property,
    Plant, and Equipment
      Goodwill
        Impairment
    of Long-Lived Assets
    Foreign
    Currency and Other Comprehensive Income
   61




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##### Table of Contents



OIL
    STATES INTERNATIONAL, INC. AND SUBSIDIARIES
  NOTES TO
    CONSOLIDATED FINANCIAL
    STATEMENTS  (Continued)
  Foreign
    Exchange Risk
    Interest
    Capitalization
    Revenue
    and Cost Recognition
      Income
    Taxes
     62




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##### Table of Contents



OIL
    STATES INTERNATIONAL, INC. AND SUBSIDIARIES
  NOTES TO
    CONSOLIDATED FINANCIAL
    STATEMENTS  (Continued)
      Receivables
    and Concentration of Credit Risk, Concentration of
    Suppliers
      Allowances
    for Doubtful Accounts
    Earnings
    per Share
   63




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##### Table of Contents



OIL
    STATES INTERNATIONAL, INC. AND SUBSIDIARIES
  NOTES TO
    CONSOLIDATED FINANCIAL
    STATEMENTS  (Continued)
  3 8
  Stock-Based
    Compensation
  97-14.
  Guarantees
      Year Ended December 31,2008


2007Beginning balance

$
1,978


$
1,656Provisions for warranty


1,370



2,796Consumption of reserves


(1,298
)


(2,510
)Translation and other changes


(84
)


36Ending balance

$
1,966


$
1,978      64




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##### Table of Contents



OIL
    STATES INTERNATIONAL, INC. AND SUBSIDIARIES
  NOTES TO
    CONSOLIDATED FINANCIAL
    STATEMENTS  (Continued)
  Use of
    Estimates
    Discontinued
    Operations
    3.
    Details
    of Selected Balance Sheet Accounts    2008


2007Accounts receivable:Trade

$
456,975


$
353,716Unbilled revenue


119,907



97,579Other


3,268



2,487Total accounts receivable


580,150



453,782Allowance for doubtful accounts


(4,168
)


(3,629
)$
575,982


$
450,153   2008


2007Inventories:Tubular goods

$
396,462


$
191,374Other finished goods and purchased products


88,848



61,306Work in process


65,009



56,479Raw materials


68,881



47,737Total inventories


619,200



356,896Inventory reserves


(6,712
)


(7,549
)$
612,488


$
349,347   65




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##### Table of Contents



OIL
    STATES INTERNATIONAL, INC. AND SUBSIDIARIES
  NOTES TO
    CONSOLIDATED FINANCIAL
    STATEMENTS  (Continued)
  EstimatedUseful Life


2008


2007Property, plant and equipment:Land





$
18,298


$
12,665Buildings and leasehold improvements


3-50 years



135,080



107,954Machinery and equipment


2-29 years



270,434



220,049Accommodations assets


10-15 years



300,765



276,182Rental tools


4-10 years



141,644



108,968Office furniture and equipment


1-10 years



26,506



23,659Vehicles


2-10 years



68,645



52,508Construction in progress






49,915



43,046Total property, plant and equipment






1,011,287



845,031Less: Accumulated depreciation






(315,949
)


(258,121
)$
695,338


$
586,910     2008


2007Accounts payable and accrued liabilities:Trade accounts payable

$
307,132


$
186,357Accrued compensation


35,864



27,156Accrued insurance


7,551



7,386Accrued taxes, other than income taxes


7,257



3,733Reserves related to discontinued operations


2,544



2,839Other


11,441



11,648$
371,789


$
239,119   4.
    Recent
    Accounting Pronouncements  157-2,
   66




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##### Table of Contents



OIL
    STATES INTERNATIONAL, INC. AND SUBSIDIARIES
  NOTES TO
    CONSOLIDATED FINANCIAL
    STATEMENTS  (Continued)
        14-1, 3 8 3 8 3 8 3 8 3 8 14-1 3 8
   67




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##### Table of Contents



OIL
    STATES INTERNATIONAL, INC. AND SUBSIDIARIES
  NOTES TO
    CONSOLIDATED FINANCIAL
    STATEMENTS  (Continued)
  5.
    Earnings
    Per Share (EPS)  2008


2007


2006(In thousands, except per share data)Basic earnings per share:Net income

$
222,710


$
203,372


$
197,634Weighted average number of shares outstanding


49,622



49,500



49,519Basic earnings per share

$
4.49


$
4.11


$
3.99Diluted earnings per share:Net income

$
222,710


$
203,372


$
197,634Weighted average number of shares outstanding (basic)


49,622



49,500



49,519Effect of dilutive securities:Options on common stock


419



596



80723/8% Convertible
    Senior Subordinated Notes


1,271



730



391Restricted stock awards and other


102



85



56Total shares and dilutive securities


51,414



50,911



50,773Diluted earnings per share

$
4.33


$
3.99


$
3.89   6.
    Goodwill
    and Other Intangible Assets     68




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##### Table of Contents



OIL
    STATES INTERNATIONAL, INC. AND SUBSIDIARIES
  NOTES TO
    CONSOLIDATED FINANCIAL
    STATEMENTS  (Continued)
    Well Site


Offshore


TubularServices


Products


Services


TotalBalance as of December 31, 2006

$
193,635


$
75,716


$
62,453


$
331,804Goodwill acquired


50,570











50,570Foreign currency translation and other changes


8,763



97



410



9,270Balance as of December 31, 2007

$
252,968


$
75,813


$
62,863


$
391,644Goodwill acquired


2,126



11,027







13,153Foreign currency translation and other changes


(11,960
)


(1,766
)






(13,726
)Goodwill impairment


(22,767
)






(62,863
)


(85,630
)Balance as of December 31, 2008

$
220,367


$
85,074


$



$
305,441       December 31, 2008


December 31, 2007Gross Carrying


Accumulated


Gross Carrying


AccumulatedAmount


Amortization


Amount


AmortizationAmortizable intangible assets Customer relationships

$
16,128


$
1,560


$
16,128


$
486Non-compete agreements


11,860



9,674



15,771



11,927Patents and other


9,129



3,206



8,798



2,577$
37,117


$
14,440


$
40,697


$
14,990    69




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##### Table of Contents



OIL
    STATES INTERNATIONAL, INC. AND SUBSIDIARIES
  NOTES TO
    CONSOLIDATED FINANCIAL
    STATEMENTS  (Continued)
  7.
    Workover
    Services Business Transaction, Investment in Boots &
    Coots and Notes Receivable from Boots &
    Coots         70




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##### Table of Contents



OIL
    STATES INTERNATIONAL, INC. AND SUBSIDIARIES
  NOTES TO
    CONSOLIDATED FINANCIAL
    STATEMENTS  (Continued)
  8.
    Long-term
    Debt    2008


2007US revolving credit facility, with available commitments up to
    $325 million; secured by substantially all of our assets;
    commitment fee on unused portion ranged from 0.175% to 0.200%
    per annum in 2008 and 2007; variable interest rate payable
    monthly based on prime or LIBOR plus applicable percentage;
    weighted average rate was 3.9% for 2008 and 6.2% for 2007

$
226,000


$
214,800Canadian revolving credit facility, with available commitments
    up to $175 million; secured by substantially all of our
    assets; variable interest rate payable monthly based on the
    Canadian prime rate or Bankers Acceptance discount rate plus
    applicable percentage; weighted average rate was 4.3% for 2008
    and 5.4% for 2007


61,244



89,06023/8%
    Contingent Convertible Senior Subordinated Notes due 2025


175,000



175,000Subordinated unsecured notes payable to sellers of businesses,
    interest of 6%, maturing in 2008 and 2009


4,500



9,000Capital lease obligations and other debt


13,147



3,960Total debt


479,891



491,820Less: current maturities


4,943



4,718Total long-term debt

$
474,948


$
487,102     2009

$
4,9432010


4272011


291,8622012


175,3992013


304Thereafter


6,956$
479,891     23/8%
    Contingent Convertible Senior Notes
  3 8 30-day
  3 8
 71




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##### Table of Contents



OIL
    STATES INTERNATIONAL, INC. AND SUBSIDIARIES
  NOTES TO
    CONSOLIDATED FINANCIAL
    STATEMENTS  (Continued)
  3 8 3 8 3 8
  Revolving
    Credit Facility
    
    a variable rate equal to LIBOR (or, in the case of Canadian
    dollar denominated loans, the Bankers Acceptance discount
    rate) plus a margin ranging from 0.5% to 1.25%; or
    an alternate base rate equal to the higher of the banks
    prime rate and the federal funds effective rate (or, in the case
    of Canadian dollar denominated loans, the Canadian Prime Rate).       72




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##### Table of Contents



OIL
    STATES INTERNATIONAL, INC. AND SUBSIDIARIES
  NOTES TO
    CONSOLIDATED FINANCIAL
    STATEMENTS  (Continued)
          9.
    Retirement
    Plans    10.
    Income
    Taxes    2008


2007


2006US operations

$
225,846


$
183,242


$
206,288Foreign operations


153,214



117,116



95,359Total

$
379,060


$
300,358


$
301,647     2008


2007


2006Current:Federal

$
94,082


$
58,753


$
69,849State


5,097



3,564



4,172Foreign


37,639



29,754



30,193136,818



92,071



104,214Deferred:Federal


12,378



1,172



3,017State


1,320



33



(762
)Foreign


5,833



3,710



(2,456
)19,531



4,915



(201
)Total Provision

$
156,349


$
96,986


$
104,013  73




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##### Table of Contents



OIL
    STATES INTERNATIONAL, INC. AND SUBSIDIARIES
  NOTES TO
    CONSOLIDATED FINANCIAL
    STATEMENTS  (Continued)
    2008


2007


2006Federal tax expense at statutory rates

$
132,671


$
105,125


$
105,576Foreign income tax rate differential


(10,570
)


(6,802
)


(2,880
)Reduced foreign tax rates






(1,088
)


(2,168
)Nondeductible goodwill


24,317







Other nondeductible expenses


2,586



1,411



149State tax expense, net of federal benefits


3,879



2,338



2,051Domestic manufacturing deduction


(1,212
)


(2,435
)


(872
)FIN 48 adjustments


2,868



(1,751
)


Dividend income  foreign affiliate










1,542Gain on sale of affiliated company stock










1,405Other, net


1,810



188



(790
)Net income tax provision

$
156,349


$
96,986


$
104,013     2008


2007Deferred tax assets:Net operating loss carryforward

$
5,087


$
6,642Allowance for doubtful accounts


1,352



816Inventory reserves


3,870



2,273Employee benefits


5,499



7,028Intangibles


5,075



2,035Other reserves


913



508Other


3,590



2,639Gross deferred tax asset


25,386



21,941Less: valuation allowance


(421
)


(421
)Net deferred tax asset


24,965



21,520Deferred tax liabilities:Depreciation


(69,986
)


(47,815
)Deferred revenue


(1,453
)


(666
)Intangibles


(3,252
)


(2,368
)Accrued liabilities


(2,701
)


(2,190
)Basis difference of investments






(6,853
)Other


(4,029
)


(917
)Deferred tax liability


(81,421
)


(60,809
)Net deferred tax liability

$
(56,456
)

$
(39,289
)  74




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##### Table of Contents



OIL
    STATES INTERNATIONAL, INC. AND SUBSIDIARIES
  NOTES TO
    CONSOLIDATED FINANCIAL
    STATEMENTS  (Continued)
    2008


2007Current deferred tax asset (liability)

$
(810
)

$
1,261Long term deferred tax liability


(55,646
)


(40,550
)Net deferred tax liability

$
(56,456
)

$
(39,289
)                75




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##### Table of Contents



OIL
    STATES INTERNATIONAL, INC. AND SUBSIDIARIES
  NOTES TO
    CONSOLIDATED FINANCIAL
    STATEMENTS  (Continued)
        2008


2007Balance as of January 1, 2008

$
2,536


$
4,079Additions based on tax positions related to the current year


0



0Additions for tax positions of prior years


2,270



0Reductions for tax positions of prior years


(214
)


(1,466
)Settlements


0



0Lapse of the Applicable Statute of Limitations


(318
)


(77
)Balance as of December 31, 2008

$
4,274


$
2,536     11.
    Acquisitions
    and Supplemental Cash Flow Information    2008


2007


2006Fair value of assets acquired and goodwill

$
32,543


$
118,370


$
99Liabilities assumed


(2,604
)


(5,596
)


Noncash consideration






(9,000
)


Less: cash acquired


(104
)


(631
)


Cash used in acquisition of businesses

$
29,835


$
103,143


$
99   2006
   76




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##### Table of Contents



OIL
    STATES INTERNATIONAL, INC. AND SUBSIDIARIES
  NOTES TO
    CONSOLIDATED FINANCIAL
    STATEMENTS  (Continued)
  2007
      2008
        2008


2007


2006Interest (net of amounts capitalized)

$
16,265


$
16,764


$
17,262Income taxes, net of refunds

$
70,441


$
100,711


$
92,620Non-cash investing activities:Receipt of stock and notes for hydraulic workover services
    business in merger transaction (See Note 7)

$



$



$
50,105Building capital lease

$
8,304







Non-cash financing activities:Borrowings and assumption of liabilities for business and asset
    acquisition and related intangibles

$



$
9,000


$
514Acquisition of treasury stock with settlement date in subsequent
    year






129



4,913   12.
    Commitments
    and Contingencies   77




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##### Table of Contents



OIL
    STATES INTERNATIONAL, INC. AND SUBSIDIARIES
  NOTES TO
    CONSOLIDATED FINANCIAL
    STATEMENTS  (Continued)
    OperatingLeases2009

$
6,4992010


4,9692011


3,4512012


2,7982013


2,517Thereafter


5,370Total

$
25,604       13.
    Stock-Based
    Compensation       78




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##### Table of Contents



OIL
    STATES INTERNATIONAL, INC. AND SUBSIDIARIES
  NOTES TO
    CONSOLIDATED FINANCIAL
    STATEMENTS  (Continued)
      Weighted


AggregateWeighted


Average


IntrinsicAverage


Contractual


ValueOptions


Exercise Price


Life (Years)


(Thousands)Balance at December 31, 2005


2,694,061



13.65



4.9



48,564Granted


515,000



35.17Exercised


(728,759
)


11.68Forfeited


(58,000
)


17.70Expired


(1,750
)


10.63Balance at December 31, 2006


2,420,552



18.73



4.7



34,173Granted


554,460



30.28Exercised


(988,380
)


13.96Forfeited


(57,625
)


26.86Expired






Balance at December 31, 2007


1,929,007



24.25



4.2



19,947Granted


565,250



37.19Exercised


(412,529
)


21.50Forfeited


(134,312
)


30.92Expired






Balance at December 31, 2008


1,947,416



28.13



3.7



2,706Exercisable at December 31, 2006


1,107,432



12.26



4.8



22,113Exercisable at December 31, 2007


651,305



16.32



4.1



11,694Exercisable at December 31, 2008


756,201



19.78



3.0



2,706      79




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##### Table of Contents



OIL
    STATES INTERNATIONAL, INC. AND SUBSIDIARIES
  NOTES TO
    CONSOLIDATED FINANCIAL
    STATEMENTS  (Continued)
    Options OutstandingWeighted





Options ExercisableNumber


Average


Weighted


Number


WeightedOutstanding


Remaining


Average


Exercisable


AverageRange of Exercise


as of


Contractual


Exercise


as of


ExercisePrices


12/31/2008


Life


Price


12/31/2008


Price$
8.00 - $13.70



370,500



3.00


$
11.6885



370,500


$
11.6885$
14.31 - $21.83



274,023



2.39


$
20.5083



172,526


$
20.1285$
28.98 - $28.98



383,875



4.10


$
28.9800



67,975


$
28.9800$
30.28 - $30.28



6,250



1.97


$
30.2800



4,375


$
30.2800$
34.86 - $34.86



326,008



3.10


$
34.8600



118,760


$
34.8600$
36.53 - $58.47



586,760



4.98


$
37.7588



22,065


$
41.2343$
8.00 - $58.47



1,947,416



3.74


$
28.1318



756,201


$
19.7771         Deferred
    Compensation Plan
  and/or
 80




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##### Table of Contents



OIL
    STATES INTERNATIONAL, INC. AND SUBSIDIARIES
  NOTES TO
    CONSOLIDATED FINANCIAL
    STATEMENTS  (Continued)
  and/or EITF 97-14,
    EITF 97-14,
  14.
    Segment
    and Related Information   81




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##### Table of Contents



OIL
    STATES INTERNATIONAL, INC. AND SUBSIDIARIES
  NOTES TO
    CONSOLIDATED FINANCIAL
    STATEMENTS  (Continued)
    Revenues from


Depreciation


Operatingunaffiliated


and


income


Capitalcustomers


amortization


(loss)


expenditures


Total Assets2008Well Site Services  Accommodations

$
427,130


$
34,146


$
120,972


$
108,622


$
495,683Rental Tools


355,809



35,511



75,787



75,077



476,460Drilling and Other(1)


177,339



19,826



17,433



42,961



176,726Total Well Site Services


960,278



89,483



214,192



226,660



1,148,869Offshore Products


528,164



11,465



89,280



16,879



498,784Tubular Services


1,460,015



1,390



106,470



2,198



634,758Corporate and Eliminations






266



(26,187
)


1,647



16,836Total

$
2,948,457


$
102,604


$
383,755


$
247,384


$
2,299,2472007Well Site Services  Accommodations

$
312,846


$
21,813


$
85,347


$
131,410


$
474,278Rental Tools


260,404



24,045



71,973



47,233



427,238Drilling and Other(1)


143,153



12,260



40,508



42,872



182,335Total Well Site Services


716,403



58,118



197,828



221,515



1,083,851Offshore Products


527,810



11,004



82,460



15,356



449,666Tubular Services


844,022



1,361



38,467



2,463



373,411Corporate and Eliminations






220



(20,969
)


299



22,698Total

$
2,088,235


$
70,703


$
297,786


$
239,633


$
1,929,6262006Well Site Services  Accommodations

$
313,966


$
16,637


$
73,643


$
59,542


$
304,331Rental Tools


200,609



16,998



65,167



24,521



264,012Drilling and Other(1)


134,524



8,032



54,620



33,071
(2)


163,520Workover Services(1)


8,544



650



1,922



263



Total Well Site Services


657,643



42,317



195,352



117,397



731,863Offshore Products


389,684



10,734



55,957



9,533



393,134Tubular Services


876,030



1,170



66,486



2,598



423,782Corporate and Eliminations






119



(19,858
)


63



22,315Total

$
1,923,357


$
54,340


$
297,937


$
129,591


$
1,571,094     (1)
    
    Subsequent to March 1, 2006, the effective date of the sale
    of our workover services business (See Note 7), we have
    classified our equity interest in Boots & Coots and
    the notes receivable acquired in the transaction as
    Drilling and Other.(2)
    
    Includes $0.5 million of non-cash capital expenditures
    related to the acquisition of the drilling assets of Eagle Rock. 82




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##### Table of Contents



OIL
    STATES INTERNATIONAL, INC. AND SUBSIDIARIES
  NOTES TO
    CONSOLIDATED FINANCIAL
    STATEMENTS  (Continued)
     United





United


OtherStates


Canada


Kingdom


Non-US


Total2008Revenues from unaffiliated customers

$
2,353,528


$
406,176


$
127,189


$
61,564


$
2,948,457Long-lived assets


669,080



359,923



17,232



15,425



1,061,6862007Revenues from unaffiliated customers

$
1,596,067


$
296,075


$
147,941


$
48,152


$
2,088,235Long-lived assets


676,936



356,575



19,863



10,482



1,063,8562006Revenues from unaffiliated customers

$
1,488,065


$
300,461


$
101,849


$
32,982


$
1,923,357Long-lived assets


479,883



226,131



16,458



8,936



731,408     15.
    Quarterly
    Financial Information (Unaudited)    First


Second


Third


FourthQuarter


Quarter


Quarter


Quarter2008Revenues

$
601,247


$
631,364


$
814,790


$
901,056Gross profit*


156,162



152,929



205,436



198,956Net income


66,467



60,163



89,055



7,025Basic earnings per share


1.34



1.21



1.79



0.14Diluted earnings per share


1.31



1.14



1.70



0.142007Revenues

$
480,516


$
499,308


$
527,440


$
580,971Gross profit*


124,713



112,598



124,071



124,640Net income


52,461



52,233



50,478



48,200Basic earnings per share


1.06



1.06



1.02



0.97Diluted earnings per share


1.05



1.03



0.97



0.95       *
    
    Represents revenues less product costs
    and service and other costs included in the
    Companys consolidated statements of income. 83




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##### Table of Contents



OIL
    STATES INTERNATIONAL, INC. AND SUBSIDIARIES
  NOTES TO
    CONSOLIDATED FINANCIAL
    STATEMENTS  (Continued)
  16.
    Valuation
    Allowances    Balance at


Charged to


Deductions


Translation


Balance atBeginning


Costs and


(net of


and Other,


End ofof Period


Expenses


recoveries)


Net


PeriodYear Ended December 31, 2008:Allowance for doubtful accounts receivable

$
3,629


$
2,821


$
(2,735
)

$
453


$
4,168Reserve for inventories


7,549



1,302



(1,597
)


(542
)


6,712Reserves related to discontinued operations


2,839







(295
)






2,544Year Ended December 31, 2007:Allowance for doubtful accounts receivable

$
2,943


$
684


$
(923
)

$
925


$
3,629Reserve for inventories


7,188



1,504



(1,176
)


33



7,549Reserves related to discontinued operations


3,357







(518
)






2,839Year Ended December 31, 2006:Allowance for doubtful accounts receivable

$
2,169


$
1,562


$
(833
)

$
45


$
2,943Reserve for inventories


5,722



1,349



(113
)


230



7,188Reserves related to discontinued operations


3,527







(170
)






3,357   17.
    Subsequent
    Events (Unaudited)  Form 10-K.
  start-up
 84




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##### 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).3
.2



Second 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 May 21, 2008).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).4
.1



Form of common stock certificate (incorporated by reference to
    Exhibit 4.1 to the Companys Registration Statement on
    Form S-1
    (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).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).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 Oil
    States Current Report on
    Form 8-K
    filed with the Securities and Exchange Commission on
    June 23, 2005).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 Oil
    States Current Report on
    Form 8-K
    filed with the Securities and Exchange Commission on
    June 23, 2005).4
.6



Global Notes representing $175,000,000 aggregate principal
    amount of
    23/8%
    Contingent Convertible Senior Notes due 2025 (incorporated by
    reference to Section 2.2 of Exhibit 4.5 hereof)
    (incorporated by reference to Oil States Current Reports
    on
    Form 8-K
    filed with the Securities and Exchange Commission on
    June 23, 2005 and July 13, 2005).10
.1



Combination Agreement dated as of July 31, 2000 by and
    among Oil States International, Inc., HWC Energy Services, Inc.,
    Merger Sub-HWC, Inc., Sooner Inc., Merger Sub-Sooner, Inc. and
    PTI Group Inc. (incorporated by reference to Exhibit 10.1
    to the Companys Registration Statement on
    Form S-1
    (File
    No. 333-43400)).10
.2



Plan of Arrangement of PTI Group Inc. (incorporated by reference
    to Exhibit 10.2 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).10
.3



Support Agreement between Oil States International, Inc. and PTI
    Holdco (incorporated by reference to Exhibit 10.3 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).10
.4



Voting and Exchange Trust Agreement by and among Oil States
    International, Inc., PTI Holdco and Montreal Trust Company
    of Canada (incorporated by reference to Exhibit 10.4 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).10
.5**



2001 Equity Participation Plan as amended and restated effective
    February 16, 2005 (incorporated by reference to
    Exhibit 10.5 to the Companys Annual Report on
    Form 10-K
    for the year ended December 31, 2005, as filed with the
    Commission on March 2, 2006).10
.6**



Deferred Compensation Plan effective November 1, 2003
    (incorporated by reference to Exhibit 10.6 to the
    Companys Annual Report on
    Form 10-K
    for the year ended December 31, 2003, as filed with the
    Commission on March 5, 2004).10
.7**



Annual Incentive Compensation Plan (incorporated by reference to
    Exhibit 10.7 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).10
.8**



Executive Agreement between Oil States International, Inc. and
    Cindy B. Taylor (incorporated by Reference to Exhibit 10.9
    to the Companys Annual Report on
    Form 10-K
    for the year ended December 31, 2000, as filed with the
    Commission on March 30, 2001).




---



##### Table of Contents



Exhibit No.



Description10
.9**



Form of Executive Agreement between Oil States International,
    Inc. and Named Executive Officer (Mr. Hughes) (incorporated
    by reference to Exhibit 10.10 of the Companys
    Registration Statement on
    Form S-1
    (File
    No. 333-43400)).10
.10**



Form of Change of Control Severance Plan for Selected Members of
    Management (incorporated by reference to Exhibit 10.11 of
    the Companys Registration Statement on
    Form S-1
    (File
    No. 333-43400)).10
.11



Credit Agreement, dated as of October 30, 2003, among Oil
    States International, Inc., the Lenders named therein and Wells
    Fargo Bank Texas, National Association, as Administrative Agent
    and U.S. Collateral Agent; and Bank of Nova Scotia, as Canadian
    Administrative Agent and Canadian Collateral Agent; Hibernia
    National Bank and Royal Bank of Canada, as Co-Syndication Agents
    and Bank One, NA and Credit Lyonnais New York Branch, as
    Co-Documentation Agents (incorporated by reference to
    Exhibit 10.12 to the Companys Quarterly Report on
    Form 10-Q
    for the three months ended September 30, 2003, as filed
    with the Commission on November 11, 2003.)10
.11A



Incremental Assumption Agreement, dated as of May 10, 2004,
    among Oil States International, Inc., Wells Fargo, National
    Association and each of the other lenders listed as an
    Increasing Lender (incorporated by reference to
    Exhibit 10.12A to the Companys Quarterly Report on
    Form 10-Q
    for the three months ended June 30, 2004, as filed with the
    Commission on August 4, 2004).10
.11B



Amendment No. 1, dated as of January 31, 2005, to the
    Credit Agreement among Oil States International, Inc., the
    lenders named therein and Wells Fargo Bank, Texas, National
    Association, as Administrative Agent and U.S. Collateral Agent;
    and Bank of Nova Scotia, as Canadian Administrative Agent and
    Canadian Collateral Agent; Hibernia National Bank and Royal Bank
    of Canada, as Co-Syndication Agents and Bank One, NA and Credit
    Lyonnais New York Branch, as Co-Documentation Agents
    (incorporated by reference to Exhibit 10.12b to the
    Companys Annual Report on
    Form 10-K
    for the year ended December 31, 2004, as filed with the
    Commission on March 2, 2005).10
.11C



Amendment No. 2, dated as of December 5, 2006, to the
    Credit Agreement among Oil States International, Inc., the
    lenders named therein and Wells Fargo Bank, N.A., as Lead
    Arranger, U.S. Administrative Agent and U.S. Collateral
    Agent; and The Bank of Nova Scotia, as Canadian Administrative
    Agent and Canadian Collateral Agent; Capital One N.A. and Royal
    Bank of Canada, as Co-Syndication Agents and JP Morgan Chase
    Bank, N.A. and Calyon New York Branch, as Co-Documentation
    Agents (incorporated by reference to Exhibit 10.12C to the
    Companys Current Report on
    Form 8-K
    filed with the Securities and Exchange Commission on
    December 7, 2006).10
.11D



Incremental Assumption Agreement, dated as of December 13,
    2007, among Oil States International, Inc., Wells Fargo,
    National Association and each of the other lenders listed as an
    Increasing Lender (incorporated by reference to
    Exhibit 10.12D to the Companys Current Report on
    Form 8-K
    filed with the Securities and Exchange Commission on
    December 18, 2007).10
.12**



Form of Indemnification Agreement (incorporated by reference to
    Exhibit 10.14 to the Companys Quarterly Report on
    Form 10-Q
    for the quarter ended September 30, 2004, as filed with the
    Commission on November 5, 2004).10
.13**



Form of Director Stock Option Agreement under the Companys
    2001 Equity Participation Plan (incorporated by reference to
    Exhibit 10.18 to the Companys Annual Report on
    Form 10-K
    for the year ended December 31, 2004, as filed with the
    Commission on March 2, 2005).10
.14**



Form of Employee Non Qualified Stock Option Agreement under the
    Companys 2001 Equity Participation Plan (incorporated by
    reference to Exhibit 10.19 to the Companys Annual
    Report on
    Form 10-K
    for the year ended December 31, 2004, as filed with the
    Commission on March 2, 2005).10
.15**



Form of Restricted Stock Agreement under the Companys 2001
    Equity Participation Plan (incorporated by reference to
    Exhibit 10.20 to the Companys Annual Report on
    Form 10-K
    for the year ended December 31, 2004, as filed with the
    Commission on November 15, 2006).10
.16**



Non-Employee Director Compensation Summary (incorporated by
    reference to Exhibit 10.21 to the Companys Report on
    Form 8-K
    as filed with the Commission on May 24, 2005).10
.17**



Form of Executive Agreement between Oil States International,
    Inc. and named executive officer (Mr. Cragg) (incorporated
    by reference to Exhibit 10.22 to the Companys
    Quarterly Report on
    Form 10-Q
    for the quarter ended March 31, 2005, as filed with the
    Commission on April 29, 2005).




---



##### Table of Contents



Exhibit No.



Description10
.18**



Form of Non-Employee Director Restricted Stock Agreement under
    the Companys 2001 Equity Participation Plan (incorporated
    by reference to Exhibit 22.2 to the Companys Report
    of
    Form 8-K,
    as filed with the Commission on May 24, 2005).10
.19**



Form of Executive Agreement between Oil States International,
    Inc. and named executive officer (Bradley Dodson) effective
    October 10, 2006 (incorporated by reference to
    Exhibit 10.24 to the Companys Quarterly Report on
    Form 10-Q
    for the quarter ended September 30, 2006, as filed with the
    Commission on November 3, 2006).10
.20**



Form of Executive Agreement between Oil States International,
    Inc. and named executive officer (Ron R. Green) effective
    May 17, 2007.10
.21**,*



Amendment to the Executive Agreement of Cindy Taylor, effective
    January 1, 2009.10
.22**,*



Amendment to the Executive Agreement of Bradley Dodson,
    effective January 1, 2009.10
.23**,*



Amendment to the Executive Agreement of Howard Hughes, effective
    January 1, 2009.10
.24**,*



Amendment to the Executive Agreement of Christopher Cragg,
    effective January 1, 2009.10
.25**,*



Amendment to the Executive Agreement of Ron Green, effective
    January 1, 2009.10
.26**,*



Amendment to the Executive Agreement of Robert Hampton,
    effective January 1, 2009.21
.1*



List of subsidiaries of the Company.23
.1*



Consent of Independent Registered Public Accounting Firm.24
.1*



Powers of Attorney for Directors.31
.1*



Certification of Chief Executive Officer of Oil States
    International, Inc. pursuant to
    Rules 13a-14(a)
    or 15d-14(a) under the Securities Exchange Act of 1934.31
.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.