SEC Filing | Oil States International, Inc.

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UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549

FORM 10-Q

(Mark One)



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

For the quarterly period ended June 30, 2019



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

For the transition period from _____ to _____

Commission file number: 001-16337

OIL STATES INTERNATIONAL, INC.

______________

(Exact name of registrant as specified in its charter)



Delaware		76-0476605
(State or other jurisdiction of		(I.R.S. Employer
incorporation or organization)		Identification No.)

Three Allen Center, 333 Clay Street
Suite 4620		77002
Houston,	Texas	(Zip Code)
(Address of principal executive offices)

(713) 652-0582

(Registrant's telephone number, including area code)

Securities registered pursuant to Section 12(b) of the Act:



Title of each class	Trading Symbol(s)	Name of each exchange on which registered
Common stock, par value $0.01 per share	OIS	New York Stock Exchange

Indicate by check mark whether the registrant (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days.



Yes	☒	No	☐

Indicate by check mark whether the registrant has submitted electronically every Interactive Data File required to be submitted pursuant to Rule 405 of Regulation S-T (§232.405 of this chapter) during the preceding 12 months (or for such shorter period that the registrant was required to submit such files).



Yes	☒	No	☐

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



Large accelerated filer	☒	Accelerated filer	☐
Non-accelerated filer	☐	Smaller reporting company	☐
		Emerging growth company	☐

If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act. ☐

Indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Exchange Act).



Yes	☐	No	☒

As of July 25, 2019, the number of shares of common stock outstanding was 60,507,750.

OIL STATES INTERNATIONAL, INC. AND SUBSIDIARIES

INDEX



	Page No.
Part I – FINANCIAL INFORMATION

Item 1. Financial Statements:

Condensed Consolidated Financial Statements
Unaudited Consolidated Statements of Operations			3
Unaudited Consolidated Statements of Comprehensive Loss			4
Consolidated Balance Sheets			5
Unaudited Consolidated Statements of Stockholders' Equity			6
Unaudited Consolidated Statements of Cash Flows			8
Notes to Unaudited Condensed Consolidated Financial Statements	9	–	21

Cautionary Statement Regarding Forward-Looking Statements	22	–	23

Item 2. Management's Discussion and Analysis of Financial Condition and Results of Operations	23	–	37

Item 3. Quantitative and Qualitative Disclosures About Market Risk			38

Item 4. Controls and Procedures			39

Part II – OTHER INFORMATION

Item 1. Legal Proceedings			40

Item 1A. Risk Factors			40

Item 2. Unregistered Sales of Equity Securities and Use of Proceeds			40

Item 3. Defaults Upon Senior Securities			40

Item 4. Mine Safety Disclosures			40

Item 5. Other Information			40

Item 6. Exhibits			41

Signature Page			42

PART I – FINANCIAL INFORMATION

ITEM 1. Financial Statements

OIL STATES INTERNATIONAL, INC. AND SUBSIDIARIES

UNAUDITED CONSOLIDATED STATEMENTS OF OPERATIONS

(In Thousands, Except Per Share Amounts)



	Three Months Ended June 30,						Six Months Ended June 30,
	2019			2018			2019			2018
Revenues:
Products	$	124,965		$	136,182		$	241,293		$	265,008
Services	139,720			149,663			274,003			274,413
	264,685			285,845			515,296			539,421

Costs and expenses:
Product costs	95,289			95,324			184,557			188,300
Service costs	112,823			118,079			223,433			214,993
Cost of revenues (exclusive of depreciation and amortization expense presented below)	208,112			213,403			407,990			403,293
Selling, general and administrative expense	31,484			35,919			61,592			70,114
Depreciation and amortization expense	31,883			30,922			63,434			60,112
Other operating income, net	(399		)	(3,099		)	(485		)	(1,884		)
	271,080			277,145			532,531			531,635
Operating income (loss)	(6,395		)	8,700			(17,235		)	7,786

Interest expense, net	(4,617		)	(4,790		)	(9,369		)	(9,244		)
Other income	1,009			571			1,676			1,218
Income (loss) before income taxes	(10,003		)	4,481			(24,928		)	(240		)
Income tax (provision) benefit	263			(1,739		)	540			(510		)
Net income (loss)	$	(9,740	)	$	2,742		$	(24,388	)	$	(750	)

Net income (loss) per share:
Basic	$	(0.16	)	$	0.05		$	(0.41	)	$	(0.01	)
Diluted	(0.16		)	0.05			(0.41		)	(0.01		)

Weighted average number of common shares outstanding:
Basic	59,406			59,005			59,332			58,396
Diluted	59,406			59,005			59,332			58,396

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

OIL STATES INTERNATIONAL, INC. AND SUBSIDIARIES

UNAUDITED CONSOLIDATED STATEMENTS OF COMPREHENSIVE LOSS

(In Thousands)



	Three Months Ended June 30,						Six Months Ended June 30,
	2019			2018			2019			2018
Net income (loss)	$	(9,740	)	$	2,742		$	(24,388	)	$	(750	)

Other comprehensive income (loss):
Currency translation adjustments	(2,329		)	(13,733		)	137			(8,699		)
Comprehensive loss	$	(12,069	)	$	(10,991	)	$	(24,251	)	$	(9,449	)

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

OIL STATES INTERNATIONAL, INC. AND SUBSIDIARIES

CONSOLIDATED BALANCE SHEETS

(In Thousands, Except Share Amounts)



	June 30, 2019			December 31, 2018
	(Unaudited)
ASSETS

Current assets:
Cash and cash equivalents	$	12,406		$	19,316
Accounts receivable, net	263,453			283,607
Inventories, net	210,006			209,393
Prepaid expenses and other current assets	25,514			21,715
Total current assets	511,379			534,031

Property, plant, and equipment, net	520,324			540,427
Operating lease assets, net	48,235			—
Goodwill, net	646,984			647,018
Other intangible assets, net	242,886			255,301
Other noncurrent assets	27,893			27,044
Total assets	$	1,997,701		$	2,003,821

LIABILITIES AND STOCKHOLDERS' EQUITY

Current liabilities:
Current portion of long-term debt	$	25,583		$	25,561
Accounts payable	83,909			77,511
Accrued liabilities	53,478			60,730
Current operating lease liabilities	8,997			—
Income taxes payable	4,243			3,072
Deferred revenue	15,360			14,160
Total current liabilities	191,570			181,034

Long-term debt	272,784			306,177
Long-term operating lease liabilities	39,268			—
Deferred income taxes	50,224			53,831
Other noncurrent liabilities	24,127			23,011
Total liabilities	577,973			564,053

Stockholders' equity:
Common stock, $.01 par value, 200,000,000 shares authorized, 72,521,801 shares and 71,753,937 shares issued, respectively	726			718
Additional paid-in capital	1,106,340			1,097,758
Retained earnings	1,005,130			1,029,518
Accumulated other comprehensive loss	(71,260		)	(71,397		)
Treasury stock, at cost, 12,039,547 and 11,784,242 shares, respectively	(621,208		)	(616,829		)
Total stockholders' equity	1,419,728			1,439,768
Total liabilities and stockholders' equity	$	1,997,701		$	2,003,821

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

OIL STATES INTERNATIONAL, INC. AND SUBSIDIARIES

UNAUDITED CONSOLIDATED STATEMENTS OF STOCKHOLDERS' EQUITY

(In Thousands)



Three Months Ended June 30, 2019	Common Stock		Additional Paid-In Capital		Retained Earnings			Accumulated Other Comprehensive Loss			Treasury Stock			Total Stockholders' Equity
Balance, March 31, 2019	$	725	$	1,102,176	$	1,014,870		$	(68,931	)	$	(621,196	)	$	1,427,644
Net loss	—		—		(9,740		)	—			—			(9,740		)
Currency translation adjustments (excluding intercompany advances)	—		—		—			(2,946		)	—			(2,946		)
Currency translation adjustments on intercompany advances	—		—		—			617			—			617
Stock-based compensation expense:
Restricted stock	1		4,164		—			—			—			4,165
Stock options	—		—		—			—			—			—
Stock repurchases	—		—		—			—			—			—
Surrender of stock to settle taxes on restricted stock awards	—		—		—			—			(12		)	(12		)
Balance, June 30, 2019	$	726	$	1,106,340	$	1,005,130		$	(71,260	)	$	(621,208	)	$	1,419,728



Six Months Ended June 30, 2019	Common Stock		Additional Paid-In Capital		Retained Earnings			Accumulated Other Comprehensive Loss			Treasury Stock			Total Stockholders' Equity
Balance, December 31, 2018	$	718	$	1,097,758	$	1,029,518		$	(71,397	)	$	(616,829	)	$	1,439,768
Net loss	—		—		(24,388		)	—			—			(24,388		)
Currency translation adjustments (excluding intercompany advances)	—		—		—			(393		)	—			(393		)
Currency translation adjustments on intercompany advances	—		—		—			530			—			530
Stock-based compensation expense:
Restricted stock	8		8,529		—			—			—			8,537
Stock options	—		53		—			—			—			53
Stock repurchases	—		—		—			—			(757		)	(757		)
Surrender of stock to settle taxes on restricted stock awards	—		—		—			—			(3,622		)	(3,622		)
Balance, June 30, 2019	$	726	$	1,106,340	$	1,005,130		$	(71,260	)	$	(621,208	)	$	1,419,728

OIL STATES INTERNATIONAL, INC. AND SUBSIDIARIES

UNAUDITED CONSOLIDATED STATEMENTS OF STOCKHOLDERS' EQUITY

(In Thousands)



Three Months Ended June 30, 2018	Common Stock		Additional Paid-In Capital		Retained Earnings		Accumulated Other Comprehensive Loss			Treasury Stock			Total Stockholders' Equity
Balance, March 31, 2018	$	717	$	1,080,216	$	1,045,131	$	(53,459	)	$	(616,590	)	$	1,456,015
Net income	—		—		2,742		—			—			2,742
Currency translation adjustments (excluding intercompany advances)	—		—		—		(11,242		)	—			(11,242		)
Currency translation adjustments on intercompany advances	—		—		—		(2,491		)	—			(2,491		)
Stock-based compensation expense:
Restricted stock	1		5,617		—		—			—			5,618
Stock options	—		94		—		—			—			94
Issuance of common stock in connection with GEODynamics acquisition	—		—		—		—			—			—
Issuance of 1.50% convertible senior notes, net of income taxes of $7,744	—		—		—		—			—			—
Surrender of stock to settle taxes on restricted stock awards	—		—		—		—			(83		)	(83		)
Balance, June 30, 2018	$	718	$	1,085,927	$	1,047,873	$	(67,192	)	$	(616,673	)	$	1,450,653



Six Months Ended June 30, 2018	Common Stock		Additional Paid-In Capital		Retained Earnings			Accumulated Other Comprehensive Loss			Treasury Stock			Total Stockholders' Equity
Balance, December 31, 2017	$	627	$	754,607	$	1,048,623		$	(58,493	)	$	(612,651	)	$	1,132,713
Net loss	—		—		(750		)	—			—			(750		)
Currency translation adjustments (excluding intercompany advances)	—		—		—			(6,138		)	—			(6,138		)
Currency translation adjustments on intercompany advances	—		—		—			(2,561		)	—			(2,561		)
Stock-based compensation expense:
Restricted stock	4		10,557		—			—			—			10,561
Stock options	—		300		—			—			—			300
Issuance of common stock in connection with GEODynamics acquisition	87		294,823		—			—			—			294,910
Issuance of 1.50% convertible senior notes, net of income taxes of $7,744	—		25,640		—			—			—			25,640
Surrender of stock to settle taxes on restricted stock awards	—		—		—			—			(4,022		)	(4,022		)
Balance, June 30, 2018	$	718	$	1,085,927	$	1,047,873		$	(67,192	)	$	(616,673	)	$	1,450,653

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

OIL STATES INTERNATIONAL, INC. AND SUBSIDIARIES

UNAUDITED CONSOLIDATED STATEMENTS OF CASH FLOWS

(In Thousands)



	Six Months Ended June 30,
	2019			2018
Cash flows from operating activities:
Net loss	$	(24,388	)	$	(750	)
Adjustments to reconcile net loss to net cash provided by operating activities:
Depreciation and amortization expense	63,434			60,112
Stock-based compensation expense	8,590			10,861
Amortization of debt discount and deferred financing costs	3,894			3,613
Deferred income tax provision (benefit)	(3,495		)	481
Gain on disposals of assets	(1,245		)	(927		)
Other, net	141			2,520
Changes in operating assets and liabilities, net of effect from acquired businesses:
Accounts receivable	19,884			(19,134		)
Inventories	(534		)	(1,768		)
Accounts payable and accrued liabilities	1,200			(2,251		)
Income taxes payable	943			(31		)
Other operating assets and liabilities, net	(2,421		)	(5,792		)
Net cash flows provided by operating activities	66,003			46,934

Cash flows from investing activities:
Capital expenditures	(31,577		)	(38,261		)
Acquisitions of businesses, net of cash acquired	—			(379,676		)
Proceeds from disposition of property, plant and equipment	2,151			1,197
Other, net	(1,459		)	(985		)
Net cash flows used in investing activities	(30,885		)	(417,725		)

Cash flows from financing activities:
Issuance of 1.50% convertible senior notes	—			200,000
Revolving credit facility borrowings	119,252			704,469
Revolving credit facility repayments	(156,208		)	(546,564		)
Other debt and finance lease repayments, net	(301		)	(266		)
Payment of financing costs	(8		)	(7,366		)
Purchase of treasury stock	(757		)	—
Shares added to treasury stock as a result of net share settlements due to vesting of restricted stock	(3,622		)	(4,022		)
Net cash flows provided by (used in) financing activities	(41,644		)	346,251

Effect of exchange rate changes on cash and cash equivalents	(384		)	183
Net change in cash and cash equivalents	(6,910		)	(24,357		)
Cash and cash equivalents, beginning of period	19,316			53,459
Cash and cash equivalents, end of period	$	12,406		$	29,102

Cash paid for:
Interest	$	5,285		$	4,033
Income taxes, net of refunds	2,002			2,978

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

OIL STATES INTERNATIONAL, INC. AND SUBSIDIARIES

NOTES TO UNAUDITED CONDENSED CONSOLIDATED

FINANCIAL STATEMENTS


1.	Organization and Basis of Presentation

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

The preparation of condensed consolidated financial statements in conformity with GAAP requires the use of estimates and assumptions by management in determining the reported amounts of assets and liabilities and disclosures of contingent assets and liabilities at the date of the condensed consolidated financial statements and the reported amounts of revenues and expenses during the reporting period. Examples of such estimates include goodwill and long-lived asset impairment analyses, revenue and income recognized over time, valuation allowances recorded on deferred tax assets, the fair value of assets and liabilities acquired and identification of associated goodwill and intangible assets, reserves on inventory, allowances for doubtful accounts, warranty obligations and potential future adjustments related to contractual indemnification and other agreements. If the underlying estimates and assumptions, upon which the financial statements are based, change in future periods, actual amounts may differ from those included in the accompanying condensed consolidated financial statements.

The financial statements included in this report should be read in conjunction with the Company's audited financial statements and accompanying notes included in its Annual Report on Form 10-K for the year ended December 31, 2018 (the "2018 Form 10‑K").


2.	Recent Accounting Pronouncements

From time to time, new accounting pronouncements are issued by the Financial Accounting Standards Board (the "FASB"), which are adopted by the Company as of the specified effective date. Unless otherwise discussed, management believes that the impact of recently issued standards, which are not yet effective, will not have a material impact on the Company's consolidated financial statements upon adoption.

In February 2016, the FASB issued guidance on leases which, as amended, introduced the recognition of lease assets and lease liabilities by lessees for all leases that are not short-term in nature. The Company adopted this guidance on January 1, 2019, using the optional transition method of recognizing any cumulative effect of adopting this guidance as an adjustment to the opening balance of retained earnings. The cumulative impact of the adoption of the new standard was not material to the Company's consolidated financial statements. Prior periods were not retrospectively adjusted. In addition, the Company elected a package of practical expedients permitted under transition guidance for the new standard which, among other things, allowed for the carryforward of historical lease classification. The Company has lease agreements with lease and non-lease components, which are generally accounted for as a single lease component. Most of the Company's leases do not provide an implicit interest rate. Therefore, the Company's incremental borrowing rate, based on available information at the lease commencement date, is used to determine the present value of lease payments.

In connection with the adoption of the new standard, the Company recorded $47.7 million of operating lease assets and liabilities as of January 1, 2019. The standard did not materially impact our consolidated statement of operations and had no impact on cash flows.

OIL STATES INTERNATIONAL, INC. AND SUBSIDIARIES

NOTES TO UNAUDITED CONDENSED CONSOLIDATED

FINANCIAL STATEMENTS

(Continued)


3.	Business Acquisitions, Goodwill and Other Intangible Assets

GEODynamics Acquisition

On January 12, 2018, the Company acquired GEODynamics, Inc. ("GEODynamics"), which provides oil and gas perforation systems and downhole tools in support of completion, intervention, wireline and well abandonment operations (the "GEODynamics Acquisition"). Total recorded purchase price consideration was $615.3 million, consisting of (i) $295.4 million in cash (net of cash acquired), which was funded through borrowings under the Company's Revolving Credit Facility (as defined in Note 6, "Long-term Debt"), (ii) approximately 8.66 million shares of the Company's common stock (having a market value of approximately $295 million based on the closing share price of $34.05 as of the closing date of the acquisition) and (iii) an unsecured $25 million promissory note that bears interest at 2.5% per annum. Under the terms of the purchase agreement, the Company is entitled to indemnification in respect of certain matters occurring prior to the acquisition and payments due under the promissory note are subject to set-off, in part or in full, regarding such indemnified matters. See Note 14, "Commitments and Contingencies."

GEODynamics' results of operations have been included in the Company's financial statements subsequent to the closing of the acquisition on January 12, 2018. The acquired GEODynamics operations are reported as the Downhole Technologies segment. See Note 13, "Segments and Related Information" for further information with respect to the Downhole Technologies segment operations.

Falcon Acquisition

On February 28, 2018, the Company acquired Falcon Flowback Services, LLC ("Falcon"), a full service provider of flowback and well testing services for the separation and recovery of fluids, solid debris and proppant used during hydraulic fracturing operations. Falcon provides additional scale and diversity to our Completion Services well testing operations in key shale plays in the United States. The purchase price was $84.2 million (net of cash acquired). The Falcon acquisition was funded by borrowings under the Company's Revolving Credit Facility. Under the terms of the purchase agreement, the Company may be entitled to indemnification in respect of certain matters occurring prior to acquisition. Falcon's results of operations have been included in the Company's financial statements and has been reported within the Completion Services business subsequent to the closing of the acquisition on February 28, 2018.

Transaction-Related Costs

During the first quarter of 2018, the Company expensed transaction-related costs of $2.6 million, which are included in selling, general and administrative expense and in other operating income for the six months ended June 30, 2018.

Supplemental Unaudited Pro Forma Financial Information

The following supplemental unaudited pro forma results of operations data for the six months ended June 30, 2018 gives pro forma effect to the consummation of the GEODynamics and Falcon acquisitions as if they had occurred on January 1, 2018. The supplemental unaudited pro forma financial information was prepared based on historical financial information, adjusted to give pro forma effect to fair value adjustments on depreciation and amortization expense, interest expense, and related tax effects, among others. The pro forma results for the six months ended June 30, 2018 also reflect adjustments to exclude the after-tax impact of transaction costs totaling $2.0 million. The supplemental unaudited pro forma financial information may not reflect what the results of the combined operations would have been had the acquisitions occurred on January 1, 2018. As such, it is presented for informational purposes only (in thousands, except per share amount).



	Six Months Ended June 30, 2018
Revenue	$	566,045
Net income	$	1,750
Diluted net income per share	$	0.03
Diluted weighted average common shares outstanding	58,922

OIL STATES INTERNATIONAL, INC. AND SUBSIDIARIES

NOTES TO UNAUDITED CONDENSED CONSOLIDATED

FINANCIAL STATEMENTS

(Continued)

Goodwill

Changes in the carrying amount of goodwill for the six-month period ended June 30, 2019 were as follows (in thousands):



	Well Site Services									Downhole Technologies		Offshore/ Manufactured Products			Total
	Completion Services			Drilling Services			Subtotal			Downhole Technologies		Offshore/ Manufactured Products			Total
Balance as of December 31, 2018
Goodwill	$	221,582		$	22,767		$	244,349		$	357,502	$	162,462		$	764,313
Accumulated impairment losses	(94,528		)	(22,767		)	(117,295		)	—		—			(117,295		)
	127,054			—			127,054			357,502		162,462			647,018
Foreign currency translation	—			—			—			—		(34		)	(34		)
Balance as of June 30, 2019	$	127,054		$	—		$	127,054		$	357,502	$	162,428		$	646,984

Other Intangible Assets

The following table presents the gross carrying amount, accumulated amortization and net carrying amount for major intangible asset classes as of June 30, 2019 and December 31, 2018 (in thousands):



	June 30, 2019						December 31, 2018
	Gross Carrying Amount		Accumulated Amortization		Net Carrying Amount		Gross Carrying Amount		Accumulated Amortization		Net Carrying Amount
Customer relationships	$	168,266	$	38,729	$	129,537	$	167,811	$	33,247	$	134,564
Patents/Technology/Know-how	85,423		27,268		58,155		84,903		23,418		61,485
Noncompete agreements	17,100		8,418		8,682		18,705		7,544		11,161
Tradenames and other	53,708		7,196		46,512		53,708		5,617		48,091
	$	324,497	$	81,611	$	242,886	$	325,127	$	69,826	$	255,301

For the three months ended June 30, 2019 and 2018, amortization expense was $6.8 million and $6.4 million, respectively. Amortization expense was $13.5 million and $12.0 million for the six months ended June 30, 2019 and 2018, respectively.

The Company's industry is highly cyclical, and this cyclicality impacts the determination of whether a decline in value of the Company's long-lived assets, including definite-lived intangibles, and/or goodwill has occurred. The Company is required to periodically review the long-lived assets and goodwill of its reporting units for potential impairment in value if circumstances, some of which are beyond the Company's control, indicate that the carrying amounts will not be recoverable. The Company performed a qualitative assessment at June 30, 2019 and concluded that no further impairment evaluation was required. As a result, no impairments were recorded in the second quarter of 2019. Should, among other events and circumstances, global economic and industry conditions deteriorate, the outlook for future operating results and cash flow for any of the Company's reporting units decline, income tax rates increase or regulations change, costs of equity or debt capital increase, valuations for comparable public companies or comparable acquisition valuations decrease, or the Company's market capitalization experiences a material, sustained decline below its book value, the Company may need to recognize impairment losses in future periods.

OIL STATES INTERNATIONAL, INC. AND SUBSIDIARIES

NOTES TO UNAUDITED CONDENSED CONSOLIDATED

FINANCIAL STATEMENTS

(Continued)


4.	Details of Selected Balance Sheet Accounts

Additional information regarding selected balance sheet accounts at June 30, 2019 and December 31, 2018 is presented below (in thousands):



	June 30, 2019			December 31, 2018
Accounts receivable, net:
Trade	$	208,175		$	227,052
Unbilled revenue	37,518			35,674
Contract assets	20,113			21,201
Other	3,950			6,381
Total accounts receivable	269,756			290,308
Allowance for doubtful accounts	(6,303		)	(6,701		)
	$	263,453		$	283,607



	June 30, 2019		December 31, 2018
Deferred revenue (contract liabilities)	$	15,360	$	14,160

For the six months ended June 30, 2019, the $1.1 million net decrease in contract assets was primarily attributable to $13.1 million transferred to accounts receivable, which was partially offset by $12.1 million in revenue recognized during the period. Deferred revenue increased by $1.2 million in 2019, primarily reflecting $5.9 million in new customer billings which were not recognized as revenue during the period, partially offset by the recognition of $5.0 million of revenue that was deferred at the beginning of the period.



	June 30, 2019			December 31, 2018
Inventories, net:
Finished goods and purchased products	$	105,285		$	96,195
Work in process	21,838			20,552
Raw materials	103,139			111,197
Total inventories	230,262			227,944
Allowance for excess or obsolete inventory	(20,256		)	(18,551		)
	$	210,006		$	209,393



	Estimated Useful Life (years)			June 30, 2019			December 31, 2018
Property, plant and equipment, net:
Land				$	37,758		$	37,545
Buildings and leasehold improvements	2	–	40	259,981			259,834
Machinery and equipment	1	–	28	493,121			483,629
Completion Services equipment	2	–	10	505,427			492,183
Office furniture and equipment	3	–	10	45,013			43,654
Vehicles	2	–	10	114,729			122,982
Construction in progress				23,337			29,451
Total property, plant and equipment				1,479,366			1,469,278
Accumulated depreciation				(959,042		)	(928,851		)
				$	520,324		$	540,427

OIL STATES INTERNATIONAL, INC. AND SUBSIDIARIES

NOTES TO UNAUDITED CONDENSED CONSOLIDATED

FINANCIAL STATEMENTS

(Continued)



	June 30, 2019		December 31, 2018
Other noncurrent assets:
Deferred compensation plan	$	21,593	$	20,468
Deferred income taxes	633		761
Other	5,667		5,815
	$	27,893	$	27,044



	June 30, 2019		December 31, 2018
Accrued liabilities:
Accrued compensation	$	20,722	$	29,867
Insurance liabilities	12,080		9,177
Accrued taxes, other than income taxes	7,990		4,530
Accrued commissions	1,470		1,484
Accrued claims	258		2,983
Other	10,958		12,689
	$	53,478	$	60,730


5.	Net Income (Loss) Per Share