##### Table of Contents



UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
 Washington, D.C. 20549
 FORM 10-Q
 (Mark One)
 þ
    
    QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d)
OF THE SECURITIES EXCHANGE ACT OF 1934
 For the quarterly period ended March 31, 2008
 or
 o
    
    TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d)
OF THE SECURITIES EXCHANGE ACT OF 1934
 For the Transition Period From  to
 Commission File No. 001-34037
 SUPERIOR ENERGY SERVICES, INC.
 (Exact name of registrant as specified in its charter)
 Delaware(State or other jurisdiction of 
incorporation or organization)
    
    75-2379388(I.R.S. Employer
Identification No.)
 1105 Peters RoadHarvey, Louisiana(Address of principal executive offices)
    
    70058(Zip Code)
 Registrants telephone number, including area code: (504) 362-4321
 þ o
  Large accelerated filer
þ

  
  Accelerated filer
o

  
  Non-accelerated filer
o
(Do not check if a smaller reporting company)

  
  Smaller reporting company
o
 o þ




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##### 



SUPERIOR ENERGY SERVICES, INC. AND SUBSIDIARIES
 TABLE OF CONTENTS
  
 PagePART I FINANCIAL INFORMATIONItem 1. Financial Statements
    
    
    3Item 2. Managements Discussion and Analysis of Financial Condition
and Results of Operations
    
    
    16Item 3. Quantitative and Qualitative Disclosures about Market Risk
    
    
    23Item 4. Controls and Procedures
    
    
    24PART II OTHER INFORMATIONItem 2. Unregistered Sales of Equity Securities and Use of Proceeds
    
    
    25Item 6. Exhibits
    
    
    25Certification of Officer Pursuant to Section 302Certification of Officer Pursuant to Section 302Certification of Officer Pursuant to Section 906Certification of Officer Pursuant to Section 906




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##### Table of Contents



PART I. FINANCIAL INFORMATION
 
 Item 1. Financial Statements
 SUPERIOR ENERGY SERVICES, INC. AND SUBSIDIARIES
 3/31/08
    
    
    12/31/07(Unaudited)
    
    
    (Audited)ASSETSCurrent assets:Cash and cash equivalents
    
    $
    231,841
    
    
    $
    51,649Accounts receivable, net
    
    
    326,224
    
    
    
    343,334Current portion of notes receivable
    
    
    
    
    
    
    15,584Prepaid expenses
    
    
    22,967
    
    
    
    19,641Other current assets
    
    
    33,143
    
    
    
    40,797Total current assets
    
    
    614,175
    
    
    
    471,005Property, plant and equipment, net
    
    
    924,218
    
    
    
    1,086,408Goodwill
    
    
    485,010
    
    
    
    484,594Notes receivable
    
    
    
    
    
    
    16,732Equity-method investments
    
    
    99,185
    
    
    
    56,961Intangible and other long-term assets, net
    
    
    141,192
    
    
    
    141,549Total assets
    
    $
    2,263,780
    
    
    $
    2,257,249LIABILITIES AND STOCKHOLDERS EQUITYCurrent liabilities:Accounts payable
    
    $
    67,282
    
    
    $
    69,510Accrued expenses
    
    
    171,695
    
    
    
    177,779Income taxes payable
    
    
    60,194
    
    
    
    7,520Current portion of decommissioning liabilities
    
    
    
    
    
    
    36,812Current maturities of long-term debt
    
    
    810
    
    
    
    810Total current liabilities
    
    
    299,981
    
    
    
    292,431Deferred income taxes
    
    
    151,983
    
    
    
    163,338Decommissioning liabilities
    
    
    
    
    
    
    88,158Long-term debt, net
    
    
    711,271
    
    
    
    711,151Other long-term liabilities
    
    
    24,422
    
    
    
    21,492Stockholders equity:Preferred stock of $.01 par value. Authorized, 5,000,000 shares; none issued
    
    
    
    
    
    
    Common stock of $.001 par value. Authorized, 125,000,000 shares; issued
and outstanding, 80,651,840 shares at March 31, 2008, and 80,671,650
shares at December 31, 2007
    
    
    81
    
    
    
    81Additional paid in capital
    
    
    400,106
    
    
    
    401,455Accumulated other comprehensive income, net
    
    
    3,780
    
    
    
    9,078Retained earnings
    
    
    672,156
    
    
    
    570,065Total stockholders equity
    
    
    1,076,123
    
    
    
    980,679Total liabilities and stockholders equity
    
    $
    2,263,780
    
    
    $
    2,257,249
  3




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##### Table of Contents



SUPERIOR ENERGY SERVICES, INC. AND SUBSIDIARIES
 2008
    
    
    2007Oilfield service and rental revenues
    
    $
    386,319
    
    
    $
    325,895Oil and gas revenues
    
    
    55,072
    
    
    
    37,029Total revenues
    
    
    441,391
    
    
    
    362,924Cost of oilfield services and rentals
    
    
    191,132
    
    
    
    142,429Cost of oil and gas sales
    
    
    12,986
    
    
    
    18,058Total cost of services, rentals and sales
(exclusive of items shown separately below)
    
    
    204,118
    
    
    
    160,487Depreciation, depletion, amortization and accretion
    
    
    41,879
    
    
    
    38,844General and administrative expenses
    
    
    69,606
    
    
    
    50,859Gain on sale of businesses
    
    
    37,888
    
    
    
    Income from operations
    
    
    163,676
    
    
    
    112,734Other income (expense):Interest expense, net
    
    
    (8,116
    )
    
    
    (7,699
    )Earnings (losses) from equity-method investments, net
    
    
    3,957
    
    
    
    (5,006
    )Income before income taxes
    
    
    159,517
    
    
    
    100,029Income taxes
    
    
    57,426
    
    
    
    36,010Net income
    
    $
    102,091
    
    
    $
    64,019Basic earnings per share
    
    $
    1.26
    
    
    $
    0.79Diluted earnings per share
    
    $
    1.24
    
    
    $
    0.78Weighted average common shares used
in computing earnings per share:Basic
    
    
    80,776
    
    
    
    80,632Incremental common shares from stock based compensation
    
    
    1,310
    
    
    
    1,524Diluted
    
    
    82,086
    
    
    
    82,156
  4




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##### Table of Contents



SUPERIOR ENERGY SERVICES, INC. AND SUBSIDIARIES
 2008
    
    
    2007Cash flows from operating activities:Net income
    
    $
    102,091
    
    
    $
    64,019Adjustments to reconcile net income to net cash provided
by operating activities:Depreciation, depletion, amortization and accretion
    
    
    41,879
    
    
    
    38,844Deferred income taxes
    
    
    (7,655
    )
    
    
    5,545Stock-based and performance share unit compensation expense
    
    
    4,818
    
    
    
    3,557(Earnings) losses from equity-method investments, net
    
    
    (3,957
    )
    
    
    5,006Amortization of debt acquisition costs and note discount
    
    
    914
    
    
    
    881Gain on sale of businesses
    
    
    (37,888
    )
    
    
    Changes in operating assets and liabilities, net of acquisitions
and dispositions:Receivables
    
    
    (36,641
    )
    
    
    (20,946
    )Accounts payable
    
    
    (1,528
    )
    
    
    4,007Accrued expenses
    
    
    8,315
    
    
    
    (15,190
    )Decommissioning liabilities
    
    
    (6,160
    )
    
    
    (478
    )Income taxes
    
    
    52,536
    
    
    
    25,564Other, net
    
    
    6,647
    
    
    
    4,663Net cash provided by operating activities
    
    
    123,371
    
    
    
    115,472Cash flows from investing activities:Payments for capital expenditures
    
    
    (88,883
    )
    
    
    (83,121
    )Acquisitions of businesses, net of cash acquired
    
    
    
    
    
    
    (49,758
    )Cash proceeds from sale of businesses, net of cash sold
    
    
    151,753
    
    
    
    Other
    
    
    (2,464
    )
    
    
    9,585Net cash provided by (used in) investing activities
    
    
    60,406
    
    
    
    (123,294
    )Cash flows from financing activities:Payment of debt acquisition costs
    
    
    
    
    
    
    (209
    )Proceeds from exercise of stock options
    
    
    2,010
    
    
    
    670Tax benefit from exercise of stock options
    
    
    2,347
    
    
    
    390Proceeds from issuance of stock through employee benefit plans
    
    
    479
    
    
    
    Purchase and retirement of stock
    
    
    (8,793
    )
    
    
    Net cash provided by (used in) financing activities
    
    
    (3,957
    )
    
    
    851Effect of exchange rate changes on cash
    
    
    372
    
    
    
    (13
    )Net increase (decrease) in cash
    
    
    180,192
    
    
    
    (6,984
    )Cash and cash equivalents at beginning of period
    
    
    51,649
    
    
    
    38,970Cash and cash equivalents at end of period
    
    $
    231,841
    
    
    $
    31,986
  5




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SUPERIOR ENERGY SERVICES, INC. AND SUBSIDIARIES
 Basis of Presentation
   Stock-Based and Long-Term Compensation
  Stock Options
  Restricted Stock
  Restricted Stock Units
  6




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Performance Share Units
  Employee Stock Purchase Plan
  Earnings per Share
   Stockholders Equity
  Acquisitions and Dispositions
  7




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8




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Segment Information
 Business Segments
   Three Months Ended March 31, 2008
 Oil & GasWell
    
    
    Rental
    
    
    
    
    
    
    
    
    
    
    Eliminations
    
    
    ConsolidatedIntervention
    
    
    Tools
    
    
    Marine
    
    
    Oil & Gas
    
    
    & Unallocated
    
    
    TotalRevenues
    
    $
    234,115
    
    
    $
    130,327
    
    
    $
    23,089
    
    
    $
    55,072
    
    
    $
    (1,212
    )
    
    $
    441,391Cost of services, rentals and sales
(exclusive of items shown separately below)
    
    
    132,399
    
    
    
    44,100
    
    
    
    15,845
    
    
    
    12,986
    
    
    
    (1,212
    )
    
    
    204,118Depreciation, depletion, amortization and accretion
    
    
    16,261
    
    
    
    20,746
    
    
    
    2,073
    
    
    
    2,799
    
    
    
    
    
    
    
    41,879General and administrative expenses
    
    
    35,177
    
    
    
    23,056
    
    
    
    2,593
    
    
    
    8,780
    
    
    
    
    
    
    
    69,606Gain on sale of businesses
    
    
    500
    
    
    
    3,332
    
    
    
    
    
    
    
    34,056
    
    
    
    
    
    
    
    37,888Income from operations
    
    
    50,778
    
    
    
    45,757
    
    
    
    2,578
    
    
    
    64,563
    
    
    
    
    
    
    
    163,676Interest expense, net
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    (8,116
    )
    
    
    (8,116
    )Earnings from equity-method
investments, net
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    3,957
    
    
    
    
    
    
    
    3,957Income (loss) before income taxes
    
    $
    50,778
    
    
    $
    45,757
    
    
    $
    2,578
    
    
    $
    68,520
    
    
    $
    (8,116
    )
    
    $
    159,517
 9




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Three Months Ended March 31, 2007
 Oil & GasWell
    
    
    Rental
    
    
    
    
    
    
    
    
    
    
    Eliminations
    
    
    ConsolidatedIntervention
    
    
    Tools
    
    
    Marine
    
    
    Oil & Gas
    
    
    & Unallocated
    
    
    TotalRevenues
    
    $
    176,931
    
    
    $
    116,180
    
    
    $
    35,866
    
    
    $
    37,029
    
    
    $
    (3,082
    )
    
    $
    362,924Cost of services, rentals and sales
(exclusive of items shown separately below)
    
    
    95,506
    
    
    
    35,516
    
    
    
    14,489
    
    
    
    18,058
    
    
    
    (3,082
    )
    
    
    160,487Depreciation, depletion, amortization and accretion
    
    
    10,358
    
    
    
    15,250
    
    
    
    2,188
    
    
    
    11,048
    
    
    
    
    
    
    
    38,844General and administrative expenses
    
    
    25,001
    
    
    
    20,338
    
    
    
    2,728
    
    
    
    2,792
    
    
    
    
    
    
    
    50,859Income from operations
    
    
    46,066
    
    
    
    45,076
    
    
    
    16,461
    
    
    
    5,131
    
    
    
    
    
    
    
    112,734Interest expense, net
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    (7,699
    )
    
    
    (7,699
    )Losses from equity-method
investments, net
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    (5,006
    )
    
    
    
    
    
    
    (5,006
    )Income (loss) before income taxes
    
    $
    46,066
    
    
    $
    45,076
    
    
    $
    16,461
    
    
    $
    125
    
    
    $
    (7,699
    )
    
    $
    100,029
 Identifiable Assets
 Well
    
    
    Rental
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    ConsolidatedIntervention
    
    
    Tools
    
    
    Marine
    
    
    Oil & Gas
    
    
    Unallocated
    
    
    TotalMarch 31, 2008
    
    $
    1,148,451
    
    
    $
    792,738
    
    
    $
    196,369
    
    
    $
    98,195
    
    
    $
    28,027
    
    
    $
    2,263,780December 31, 2007
    
    $
    996,946
    
    
    $
    687,944
    
    
    $
    200,623
    
    
    $
    344,667
    
    
    $
    27,069
    
    
    $
    2,257,249
 Geographic Segments
  Revenues:
 Three Months Ended March 31,2008
    
    
    2007United States
    
    $
    364,613
    
    
    $
    294,021Other Countries
    
    
    76,778
    
    
    
    68,903Total
    
    $
    441,391
    
    
    $
    362,924
 Long-Lived Assets:
 March 31,
    
    
    December 31,2008
    
    
    2007United States
    
    $
    738,151
    
    
    $
    904,611Other Countries
    
    
    186,067
    
    
    
    181,797Total
    
    $
    924,218
    
    
    $
    1,086,408
 10




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Long-Term Contracts
    Equity-Method Investments
     11




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Debt
  rd rd
 st st
 th th
  12




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##### Table of Contents




    
    during any fiscal quarter (and only during such fiscal quarter) commencing after March
31, 2007, if the last reported sale price of the Companys common stock is greater than or
equal to 135% of the applicable exchange price of the notes for at least 20 trading days in
the period of 30 consecutive trading days ending on the last trading day of the preceding
fiscal quarter;
    
    prior to December 15, 2011, during the five business-day period after any ten
consecutive trading-day period (the measurement period) in which the trading price of
$1,000 principal amount of notes for each trading day in the measurement period was less
than 95% of the product of the last reported sale price of the Companys common stock and
the exchange rate on such trading day;
    
    if the notes have been called for redemption;
    
    upon the occurrence of specified corporate transactions; or
    
    at any time beginning on September 15, 2026, and ending at the close of business on the
second business day immediately preceding the maturity date.
  Other Comprehensive Income
  Three Months EndedMarch 31,2008
    
    
    2007Accumulated other comprehensive income, December 31,
2007 and 2006, respectively
    
    $
    9,078
    
    
    $
    10,288Other comprehensive income:Other comprehensive loss, net of taxHedging activities:Unrealized loss on equity-method investments hedging
activities, net of tax of ($3,852)
    
    
    (6,559
    )
    
    
    Foreign currency translation adjustment
    
    
    1,261
    
    
    
    (442
    )Total other comprehensive loss
    
    
    (5,298
    )
    
    
    (442
    )Accumulated other comprehensive income, March 31,
2008 and 2007, respectively
    
    $
    3,780
    
    
    $
    9,846
 Income Taxes
   13




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Commitments and Contingencies
  Fair Value Measurements
    Fair Value Measurements at Reporting Date UsingQuoted Prices
    
    Significantin Active
    
    Other
    
    SignificantMarkets for
    
    Observable
    
    UnobservableMarch 31,
    
    Identical Assets
    
    Inputs
    
    Inputs2008
    
    (Level 1)
    
    (Level 2)
    
    (Level 3)Money Market Funds
    
    $
    163,167
    
    
    $
    163,167
    
    
    $
    
    
    
    $
    Non-qualified deferred compensation assets
    
    $
    9,742
    
    
    $
    
    
    
    $
    9,742
    
    
    $
    Non-qualified deferred compensation liabilities
    
    $
    9,987
    
    
    $
    
    
    
    $
    9,987
    
    
    $
    
  14




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Accounting Pronouncements
     15




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Item 2. Managements Discussion and Analysis of Financial Condition and Results of
Operations
 Forward-Looking Statements
  Executive Summary
    16




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Comparison of the Results of Operations for the Three Months Ended March 31, 2008 and 2007
   Revenue
    
    Gross Margin2008
    
    2007
    
    Change
    
    2008
    
    %
    
    2007
    
    %
    
    ChangeWell Intervention
    
    $
    234,115
    
    
    $
    176,931
    
    
    $
    57,184
    
    
    $
    101,716
    
    
    
    43
    %
    
    $
    81,425
    
    
    
    46
    %
    
    $
    20,291Rental Tools
    
    
    130,327
    
    
    
    116,180
    
    
    
    14,147
    
    
    
    86,227
    
    
    
    66
    %
    
    
    80,664
    
    
    
    69
    %
    
    
    5,563Marine
    
    
    23,089
    
    
    
    35,866
    
    
    
    (12,777
    )
    
    
    7,244
    
    
    
    31
    %
    
    
    21,377
    
    
    
    60
    %
    
    
    (14,133
    )Oil and Gas
    
    
    55,072
    
    
    
    37,029
    
    
    
    18,043
    
    
    
    42,086
    
    
    
    76
    %
    
    
    18,971
    
    
    
    51
    %
    
    
    23,115Less: Oil and Gas Elim.
    
    
    (1,212
    )
    
    
    (3,082
    )
    
    
    1,870
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    Total
    
    $
    441,391
    
    
    $
    362,924
    
    
    $
    78,467
    
    
    $
    237,273
    
    
    
    54
    %
    
    $
    202,437
    
    
    
    56
    %
    
    $
    34,836
 17




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Well Intervention Segment
  Rental Tools Segment
  Marine Segment
  Oil and Gas Segment
   Depreciation, Depletion, Amortization and Accretion
  18




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General and Administrative Expenses
  Liquidity and Capital Resources
       19




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rd rd
 st st
 th th
  
    
    during any fiscal quarter (and only during such fiscal quarter) commencing after March
31, 2007, if the last reported sale price of our common stock is greater than or equal to
135% of the applicable exchange price of the notes for at least 20 trading days in the
period of 30 consecutive trading days ending on the last trading day of the preceding
fiscal quarter;
    
    prior to December 15, 2011, during the five business-day period after any ten
consecutive trading-day period (the measurement period) in which the trading price of
$1,000 principal amount of notes for each trading day in the measurement period was less
than 95% of the product of the last reported sale price of our common stock and the
exchange rate on such trading day;
    
    if the notes have been called for redemption;
    
    upon the occurrence of specified corporate transactions; or
    
    at any time beginning on September 15, 2026, and ending at the close of business on the
second business day immediately preceding the maturity date of December 15, 2026.
   20




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RemainingNineMonthsDescription
    
    2008
    
    2009
    
    2010
    
    2011
    
    2012
    
    2013
    
    ThereafterLong-term debt, including
estimated interest payments
    
    $
    28,440
    
    
    $
    28,388
    
    
    $
    28,336
    
    
    $
    27,783
    
    
    $
    27,231
    
    
    $
    27,179
    
    
    $
    791,168Operating leases
    
    
    8,099
    
    
    
    9,108
    
    
    
    6,140
    
    
    
    3,566
    
    
    
    2,208
    
    
    
    1,170
    
    
    
    15,450Vessel construction
    
    
    50,064
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    Total
    
    $
    86,603
    
    
    $
    37,496
    
    
    $
    34,476
    
    
    $
    31,349
    
    
    $
    29,439
    
    
    $
    28,349
    
    
    $
    806,618
   New Accounting Pronouncements
   21




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22




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Item 3. Quantitative and Qualitative Disclosures about Market Risk
 Foreign Currency Exchange Rates
    Interest Rate Risk
  Equity Price Risk
     23




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Commodity Price Risk
  
 Item 4. Controls and Procedures
   24




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PART II. OTHER INFORMATION
 
 Item 2. Unregistered Sales of Equity Securities and Use of Proceeds
  ApproximateTotal Number
    
    Dollar Value ofof Shares
    
    Shares thaTotal Number
    
    
    
    
    
    Purchased as
    
    May Yet beof Shares
    
    Average Price
    
    Part of Publicly
    
    PurchasedPeriod
    
    Purchased
    
    Paid per Share
    
    Announced Plan
    
    Under the PlanJanuary 1  31, 2008
    
    
    
    
    
    $
    
    
    
    
    
    
    
    $
    316,200,000February 1- 29, 2008
    
    
    
    
    
    $
    
    
    
    
    
    
    
    $
    316,200,000March 1  31, 2008
    
    
    250,000
    
    
    $
    35.17
    
    
    
    250,000
    
    
    $
    307,400,000Cumulative through 2008
    
    
    250,000
    
    
    $
    35.17
    
    
    
    250,000
    
    
    $
    307,400,000
 
 Item 6. Exhibits
  3.1
    
    Certificate of Incorporation of the Company (incorporated herein by reference to the
Companys Quarterly Report on Form 10-QSB for the quarter ended March 31, 1996).3.2
    
    Certificate of Amendment to the Companys Certificate of Incorporation (incorporated
herein by reference to the Companys Quarterly Report on Form 10-Q for the quarter ended
June 30, 1999).3.3
    
    Amended and Restated Bylaws of the Company (incorporated herein by reference to
Exhibit 3.1 to the Companys Form 8-K filed on September 12, 2007).31.1
    
    Officers certification pursuant to Section 302 of the Sarbanes-Oxley Act of 2002.31.2
    
    Officers certification pursuant to Section 302 of the Sarbanes-Oxley Act of 2002.32.1
    
    Officers certification pursuant to Section 906 of the Sarbanes-Oxley Act of 2002.32.2
    
    Officers certification pursuant to Section 906 of the Sarbanes-Oxley Act of 2002.
 25




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##### Table of Contents



SUPERIOR ENERGY SERVICES, INC.Date:  May 9, 2008
    By:
    /s/ Robert S. TaylorRobert S. TaylorExecutive Vice President, Treasurer and

Chief Financial Officer

(Principal Financial and Accounting Officer) 26




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##### Table of Contents





EXHIBIT INDEX




3.1
    
    Certificate of Incorporation of the Company (incorporated herein by reference to the
Companys Quarterly Report on Form 10-QSB for the quarter ended March 31, 1996).3.2
    
    Certificate of Amendment to the Companys Certificate of Incorporation (incorporated
herein by reference to the Companys Quarterly Report on Form 10-Q for the quarter ended
June 30, 1999).3.3
    
    Amended and Restated Bylaws of the Company (incorporated herein by reference to
Exhibit 3.1 to the Companys Form 8-K filed on September 12, 2007).31.1
    
    Officers certification pursuant to Section 302 of the Sarbanes-Oxley Act of 2002.31.2
    
    Officers certification pursuant to Section 302 of the Sarbanes-Oxley Act of 2002.32.1
    
    Officers certification pursuant to Section 906 of the Sarbanes-Oxley Act of 2002.32.2
    
    Officers certification pursuant to Section 906 of the Sarbanes-Oxley Act of 2002.