Item 6. Exhibits

Registrant’s telephone number, including area code: (713) 654-2200

Third quarter 20172019 revenue in our Drilling Products and Services segment increased 12%10% sequentially to $77.2$111.2 million, as compared to $68.8$100.7 million infor the second quarter of 2017.2019. U.S. landoffshore revenue increased 22%21% sequentially to $33.8$33.9 million primarily due to the increase in drilling activityrentals of premium drill pipe and accommodation units during the quarter. Gulf of MexicoInternational revenue increased 5% sequentially21% to $23.2$30.7 million and international revenue increased 7% sequentially to $20.2 millionprimarily due to an increase in rentals of premium drill pipe and bottom hole assemblies in those markets. assemblies. U.S. land revenue remained flat at $46.6 million.

Recent Developments

Comparison of the Results of Operations for the Three Months Ended September 30, 20172019 and 2016 2018

Comparison of the Results of Operations for the Nine Months Ended September 30, 20172019 and 2016 September 30, 2018

UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549



	FORM 10-Q

(Mark One)

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

For the quarterly period ended September 30, ~~2017~~2019

☐oTRANSITION 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

Commission Company Name: SUPERIOR ENERGY SERVICES INC

SUPERIOR ENERGY SERVICES, INC.

(Exact name of registrant as specified in its charter)


	Delaware		75-2379388
	(State or other jurisdiction of		(I.R.S. Employer
	incorporation or organization)		Identification No.)

	1001 Louisiana Street, Suite 2900		77002
	Houston, TX		(Zip Code)
	(Address of principal executive offices)

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


Title of each class	Trading symbol	Name of each exchange on which registered
Common Stock, $.001 par value	SPN	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 ☒x No ☐¨

Indicate by check mark whether the registrant has submitted electronically and posted on its corporate Web site, if any, every Interactive Data File required to be submitted and posted pursuant to Rule 405 of Regulation S-T during the preceding 12 months (or for such shorter period that the registrant was required to submit and post such files). Yes ☒x 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.


Large ~~accelerated filer ☒~~Accelerated Filer x		Accelerated filer ☐¨
Non-accelerated filer ☐¨	~~(do not check if smaller reporting company)~~	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 ☒ x

The number of shares of the registrant’s common stock outstanding on ~~October 20, 2017~~November 1, 2019 was 15~~3,083,270.~~146,849,439.

~~Table Of Contents~~

PART I. FINANCIAL INFORMATION

Item 1. Condensed Consolidated Financial Statements and Notes



SUPERIOR ENERGY SERVICES, INC. AND SUBSIDIARIES	SUPERIOR ENERGY SERVICES, INC. AND SUBSIDIARIES				SUPERIOR ENERGY SERVICES, INC. AND SUBSIDIARIES
Condensed Consolidated Balance Sheets	Condensed Consolidated Balance Sheets				Condensed Consolidated Balance Sheets
September 30, 2017 and December 31, 2016
(in thousands, except share data)	(in thousands, except share data)				(in thousands, except share data)
(unaudited)	(unaudited)				(unaudited)
	9/30/2017		12/31/2016
					September 30, 2019		December 31, 2018
ASSETS
Current assets:
Cash and cash equivalents	$	167,025	$	187,591	$	259,889	$	158,050
Accounts receivable, net of allowance for doubtful accounts of $27,075 and
$29,740 at September 30, 2017 and December 31, 2016, respectively		424,776		297,164
Income taxes receivable		-		101,578
Accounts receivable, net of allowance for doubtful accounts of $14,500 and
$12,080 at September 30, 2019 and December 31, 2018, respectively						368,530		447,353
Prepaid expenses		38,709		37,288		64,760		45,802
Inventory and other current assets		139,828		130,772		139,840		121,700
Assets held for sale		27,330		27,158
Total current assets		797,668		781,551		833,019		772,905
Property, plant and equipment, net of accumulated depreciation and depletion of $2,711,597 and $2,454,339 at September 30, 2017 and December 31, 2016, respectively		1,379,560		1,605,365

Property, plant and equipment, net of accumulated depreciation and depletion of ‎$2,620,197 and $2,640,344 at September 30, 2019 and December 31, 2018, respectively						891,540		1,109,126
Operating lease right-of-use assets						96,190		-
Goodwill		807,488		803,917		135,922		136,788
Notes receivable		59,226		56,650		67,042		63,993
Intangible and other long-term assets, net of accumulated amortization of $80,122 and $69,588 at September 30, 2017 and December 31, 2016, respectively		167,189		222,772
Restricted cash						2,753		5,698
Intangible and other long-term assets, net of accumulated amortization of $24,686 ‎and $76,358 at September 30, 2019 and December 31, 2018, respectively						97,285		127,452
Total assets	$	3,211,131	$	3,470,255	$	2,123,751	$	2,215,962

LIABILITIES AND STOCKHOLDERS’ EQUITY
Current liabilities:
Accounts payable	$	126,368	$	94,831	$	110,398	$	139,325
Accrued expenses		237,823		218,192		220,623		219,180
Income taxes payable		801		694		3,842		734
Current portion of decommissioning liabilities		27,237		22,164		3,621		3,538
Liabilities held for sale		8,755		8,653
Total current liabilities		400,984		344,534		338,484		362,777

Deferred income taxes		150,612		243,611
Long-term debt, net						1,285,755		1,282,921
Decommissioning liabilities		101,544		101,513		131,263		126,558
Long-term debt, net		1,281,714		1,284,600
Operating lease liabilities						76,255		-
Other long-term liabilities		161,522		192,077		148,907		152,967

Stockholders’ equity:
Preferred stock of $0.01 par value. Authorized - 5,000,000 shares; none issued		-		-
Preferred stock of $0.01 par value. Authorized - 5,000,000 shares; NaN issued						-		-
Common stock of $0.001 par value
Authorized-250,000,000, Issued and Outstanding - 153,083,270 at September 30, 2017 Authorized-250,000,000, Issued and Outstanding - 151,861,661 at December 31, 2016		153		152
Authorized - 250,000,000, Issued and Outstanding - 156,573,565 at September 30, 2019 ‎Authorized - 250,000,000, Issued and Outstanding - 154,885,418 at December 31, 2018						157		155
Additional paid in capital		2,705,526		2,691,553		2,748,477		2,735,125
Accumulated other comprehensive loss, net		(68,873)		(80,248)		(76,987)		(73,177)
Retained deficit		(1,522,051)		(1,307,537)		(2,528,560)		(2,371,364)
Total stockholders’ equity		1,114,755		1,303,920		143,087		290,739
Total liabilities and stockholders’ equity	$	3,211,131	$	3,470,255	$	2,123,751	$	2,215,962

See accompanying notes to condensed consolidated financial statements.	See accompanying notes to condensed consolidated financial statements.				See accompanying notes to condensed consolidated financial statements.



SUPERIOR ENERGY SERVICES, INC. AND SUBSIDIARIES
Condensed Consolidated Statements of Operations
(in thousands, except per share data)
(unaudited)

	Three Months Ended September 30,				Nine Months Ended September 30,
	2019		2018		2019		2018
Revenues:
Services	$	325,946	$	471,218	$	1,046,388	$	1,317,798
Rentals		99,771		101,850		282,820		273,136
Total revenues		425,717		573,068		1,329,208		1,590,934
Costs and expenses:
Cost of services (exclusive of depreciation, depletion, amortization and accretion)		255,087		372,837		801,143		1,017,102
Cost of rentals (exclusive of depreciation, depletion, amortization and accretion)		39,119		31,552		119,654		100,557
Depreciation, depletion, amortization and accretion - services		51,889		81,911		178,088		251,398
Depreciation, depletion, amortization and accretion - rentals		15,500		17,981		46,958		52,186
General and administrative expenses		62,768		68,895		208,597		214,611
Reduction in value of assets		9,571		-		40,952		-
Loss from operations		(8,217)		(108)		(66,184)		(44,920)

Other expense:
Interest expense, net		(24,505)		(24,952)		(74,275)		(74,733)
Other income (expense)		(3,353)		(277)		(4,476)		(4,394)
Loss from continuing operations before income taxes		(36,075)		(25,337)		(144,935)		(124,047)
Income taxes		2,366		(3,521)		12,261		(16,846)
Net loss from continuing operations		(38,441)		(21,816)		(157,196)		(107,201)
Loss from discontinued operations, net of income tax		-		-		-		(729)
Net loss	$	(38,441)	$	(21,816)	$	(157,196)	$	(107,930)

Basic and diluted loss per share:
Net loss from continuing operations	$	(0.25)	$	(0.14)	$	(1.01)	$	(0.70)
Loss from discontinued operations		-		-		-		-
Net loss	$	(0.25)	$	(0.14)	$	(1.01)	$	(0.70)

Weighted average shares outstanding		156,573		154,529		155,808		154,047

~~Table Of Contents~~


SUPERIOR ENERGY SERVICES, INC. AND SUBSIDIARIES
Condensed Consolidated Statements of Comprehensive Loss
(in thousands)
(unaudited)

	Three Months Ended September 30,				Nine Months Ended September 30,
	2019		2018		2019		2018
Net loss	$	(38,441)	$	(21,816)	$	(157,196)	$	(107,930)
Change in cumulative translation adjustment, net of tax		(2,967)		(826)		(3,810)		(3,491)
Comprehensive loss	$	(41,408)	$	(22,642)	$	(161,006)	$	(111,421)

See accompanying notes to condensed consolidated financial statements.

SUPERIOR ENERGY SERVICES, INC. AND SUBSIDIARIES
Condensed Consolidated Statements of Operations
Three and Nine Months Ended September 30, 2017 and 2016
(in thousands, except per share data)
(unaudited)

Three Months

Nine Months

2017

2016

2017

2016
Revenues:

Services
$
431,874

$
266,093

$
1,170,455

$
873,985
Rentals

74,155

60,132

206,578

221,644
Total revenues

506,029

326,225

1,377,033

1,095,629
Costs and expenses:

Cost of services (exclusive of depreciation, depletion, amortization and accretion)

340,401

223,766

959,630

703,061
Cost of rentals (exclusive of depreciation, depletion, amortization and accretion)

27,878

34,402

82,437

99,081
Depreciation, depletion, amortization and accretion - services

92,814

100,579

281,097

312,713
Depreciation, depletion, amortization and accretion - rentals

15,937

22,729

50,054

79,304
General and administrative expenses

74,372

86,743

226,573

270,467
Reduction in value of assets

9,953

-

9,953

462,461
Loss from operations

(55,326)

(141,994)

(232,711)

(831,458)

Other income (expense):

Interest expense, net

(29,096)

(21,771)

(76,679)

(68,325)
Other income (expense)

(970)

3,667

(2,477)

22,103
Loss from continuing operations before income taxes

(85,392)

(160,098)

(311,867)

(877,680)
Income taxes

(28,203)

(46,185)

(102,978)

(210,599)
Net loss from continuing operations

(57,189)

(113,913)

(208,889)

(667,081)
Loss from discontinued operations, net of income tax

(1,860)

(4,085)

(5,625)

(8,577)
Net loss
$
(59,049)

$
(117,998)

$
(214,514)

$
(675,658)

Loss per share information:

Basic and diluted:

Net loss from continuing operations
$
(0.37)

$
(0.75)

$
(1.37)

$
(4.40)
Loss from discontinued operations

(0.02)

(0.03)

(0.04)

(0.06)
Net loss
$
(0.39)

$
(0.78)

$
(1.41)

$
(4.46)

Cash dividends declared per share
$
-

$
-

$
-

0.08

Weighted average common shares used in computing loss per share:

Basic and diluted

153,082

151,707

152,624

151,337

SUPERIOR ENERGY SERVICES, INC. AND SUBSIDIARIES
Consolidated Statements of Comprehensive Loss
Three and Nine Months Ended September 30, 2017 and 2016
(in thousands)

Three Months

Nine Months

2017

2016

2017

2016
Net loss
$
(59,049)

$
(117,998)

$
(214,514)

$
(675,658)
Change in cumulative translation adjustment, net of tax

3,629

(4,693)

11,375

(26,616)
Comprehensive loss
$
(55,420)

$
(122,691)

$
(203,139)

$
(702,274)

See accompanying notes to condensed consolidated financial statements.


SUPERIOR ENERGY SERVICES, INC. AND SUBSIDIARIES
Condensed Consolidated Statements of Cash Flows
(in thousands)
(unaudited)

	Nine Months Ended September 30,
	2019		2018
Cash flows from operating activities:
Net loss	$	(157,196)	$	(107,930)
Adjustments to reconcile net loss to net cash provided by operating ‎ activities:
Depreciation, depletion, amortization and accretion		225,044		303,584
Deferred income taxes		-		(25,475)
Reduction in value of assets		40,952		-
Right-of-use assets amortization		16,341		-
Stock based compensation expense		14,155		23,303
Other reconciling items, net		(9,340)		(8,255)
Changes in operating assets and liabilities:
Accounts receivable		68,239		(95,806)
Prepaid expenses		(20,012)		1,742
Inventory and other current assets		(19,966)		(16,879)
Accounts payable		(8,221)		18,367
Accrued expenses		(25,054)		(9,543)
Other, net		(8,438)		248
Net cash provided by operating activities		116,504		83,356

Cash flows from investing activities:
Payments for capital expenditures		(105,393)		(186,283)
Proceeds from sales of assets		90,696		29,595
Net cash used in investing activities		(14,697)		(156,688)

Cash flows from financing activities:
Tax withholding for vested restricted stock units		(1,677)		(5,189)
Other		621		1,239
Net cash used in financing activities		(1,056)		(3,950)
Effect of exchange rate changes on cash		(1,857)		(1,834)
Net change in cash, cash equivalents, and restricted cash		98,894		(79,116)
Cash, cash equivalents, and restricted cash at beginning of period		163,748		192,483
Cash, cash equivalents, and restricted cash at end of period	$	262,642	$	113,367

See accompanying notes to condensed consolidated financial statements.

~~Table Of Contents~~

SUPERIOR ENERGY SERVICES, INC. AND SUBSIDIARIES
Consolidated Statements of Cash Flows
Nine Months Ended September 30, 2017 and 2016
(in thousands)
(unaudited)

2017

2016
Cash flows from operating activities:

Net loss

$
(214,514)

$
(675,658)
Adjustments to reconcile net loss to net cash provided by operating
activities:

Depreciation, depletion, amortization and accretion

331,151

392,017
Deferred income taxes

(92,999)

(186,232)
Reduction in value of assets

9,953

462,461
Stock based compensation expense

29,780

34,167
Other reconciling items, net

(2,408)

(10,392)
Changes in operating assets and liabilities:

Accounts receivable

(116,989)

155,717
Inventory and other current assets

(8,510)

(5,028)
Accounts payable

24,821

(8,692)
Accrued expenses

7,182

(41,617)
Income taxes

100,969

(4,515)
Other, net

(13,028)

34,447
Net cash provided by operating activities

55,408

146,675

Cash flows from investing activities:

Payments for capital expenditures

(109,635)

(74,071)
Decrease in cash held in escrow

30,600

-
Other

15,647

6,238
Net cash used in investing activities

(63,388)

(67,833)

Cash flows from financing activities:

Proceeds from issuance of long-term debt

500,000

-
Principal payments on long-term debt

(500,000)

(337,576)
Payment of debt issuance costs

(9,091)

(2,675)
Proceeds from revolving line of credit

-

325,123
Payments on revolving line of credit

-

(325,123)
Cash dividends

-

(12,111)
Other

(6,789)

(5,410)
Net cash used in financing activities

(15,880)

(357,772)
Effect of exchange rate changes on cash

3,294

(6,932)
Net decrease in cash and cash equivalents

(20,566)

(285,862)
Cash and cash equivalents at beginning of period

187,591

564,017
Cash and cash equivalents at end of period

$
167,025

$
278,155

See accompanying notes to condensed consolidated financial statements.



SUPERIOR ENERGY SERVICES, INC. AND SUBSIDIARIES
Consolidated Statements of Changes in Stockholders’ Equity
Nine Months Ended September 30, 2019
(in thousands, except share data)
(unaudited)

						Accumulated
	Common			Additional		other
	stock	Common		paid-in		comprehensive		Retained
	shares	stock		capital		loss, net		deficit		Total
Balances, December 31, 2018	154,885,418	$	155	$	2,735,125	$	(73,177)	$	(2,371,364)	$	290,739
Net loss	-		-		-		-		(47,705)		(47,705)
Foreign currency translation adjustment	-		-		-		1,073		-		1,073
Stock-based compensation expense,
net of forfeitures	-		-		5,625		-		-		5,625
Transactions under stock plans	1,071,182		1		(1,667)		-		-		(1,666)
Balances, March 31, 2019	155,956,600	$	156	$	2,739,083	$	(72,104)	$	(2,419,069)	$	248,066

Net loss	-		-		-		-		(71,050)		(71,050)
Foreign currency translation adjustment	-		-		-		(1,916)		-		(1,916)
Stock-based compensation expense,
net of forfeitures	-		-		4,650		-		-		4,650
Transactions under stock plans	116,374		-		(10)		-		-		(10)
Shares issued under Employee Stock Purchase Plan	500,186		1		650		-		-		651
Balances, June 30, 2019	156,573,160	$	157	$	2,744,373	$	(74,020)	$	(2,490,119)	$	180,391

Net loss	-		-		-		-		(38,441)		(38,441)
Foreign currency translation adjustment	-		-		-		(2,967)		-		(2,967)
Stock-based compensation expense,
net of forfeitures	-		-		4,104		-		-		4,104
Transactions under stock plans	405		-				-		-		-
Balances, September 30, 2019	156,573,565	$	157	$	2,748,477	$	(76,987)	$	(2,528,560)	$	143,087

See accompanying notes to condensed consolidated financial statements.

~~Table Of Contents~~


SUPERIOR ENERGY SERVICES, INC. AND SUBSIDIARIES
Consolidated Statements of Changes in Stockholders’ Equity
Nine Months Ended September 30, 2018
(in thousands, except share data)
(unaudited)

						Accumulated
	Common			Additional		other
	stock	Common		paid-in		comprehensive		Retained
	shares	stock		capital		loss, net		deficit		Total
Balances, December 31, 2017	153,263,097	$	153	$	2,713,161	$	(67,427)	$	(1,513,458)	$	1,132,429
Net loss	-		-		-		-		(59,724)		(59,724)
Foreign currency translation adjustment	-		-		-		4,388		-		4,388
Stock-based compensation expense,
net of forfeitures	-		-		6,229		-		-		6,229
Transactions under stock plans	974,165		1		(5,154)		-		-		(5,153)
Balances, March 31, 2018	154,237,262	$	154	$	2,714,236	$	(63,039)	$	(1,573,182)	$	1,078,169

Net loss	-		-		-		-		(26,390)		(26,390)
Foreign currency translation adjustment	-		-		-		(7,053)		-		(7,053)
Stock-based compensation expense,
net of forfeitures	-		-		6,113		-		-		6,113
Transactions under stock plans	90,535		-		(30)		-		-		(30)
Shares issued under Employee Stock Purchase Plan	197,830		1		1,905		-		-		1,906
Balances, June 30, 2018	154,525,627	$	155	$	2,722,224	$	(70,092)	$	(1,599,572)	$	1,052,715

Net loss	-		-		-		-		(21,816)		(21,816)
Foreign currency translation adjustment	-		-		-		(826)		-		(826)
Stock-based compensation expense,
net of forfeitures	-		-		5,948		-		-		5,948
Transactions under stock plans	4,487		-		(5)		-		-		(5)
Balances, September 30, 2018	154,530,114	$	155	$	2,728,167	$	(70,918)	$	(1,621,388)	$	1,036,016

See accompanying notes to condensed consolidated financial statements.

‎

Disaggregation of revenue

The following table presents the Company’s revenues by segment disaggregated by geography (in thousands):



	Three Months Ended September 30,				Nine Months Ended September 30,
		2019		2018		2019		2018
U.S. land
Drilling Products and Services	$	46,590	$	45,605	$	142,073	$	129,716
Onshore Completion and Workover Services		145,105		294,869		513,638		802,600
Production Services		32,620		47,858		112,095		148,259
Technical Solutions		7,283		8,453		32,589		23,144
Total U.S. land	$	231,598	$	396,785	$	800,395	$	1,103,719

U.S. offshore
Drilling Products and Services	$	33,895	$	26,065	$	91,048	$	70,315
Onshore Completion and Workover Services		-		-		-		-
Production Services		18,295		16,776		58,977		47,910
Technical Solutions		40,771		47,286		95,195		120,181
Total U.S. offshore	$	92,961	$	90,127	$	245,220	$	238,406

International
Drilling Products and Services	$	30,700	$	27,514	$	79,825	$	78,388
Onshore Completion and Workover Services		-		-		-		-
Production Services		47,872		41,236		134,167		112,422
Technical Solutions		22,586		17,406		69,601		57,999
Total International	$	101,158	$	86,156	$	283,593	$	248,809
Total Revenues	$	425,717	$	573,068	$	1,329,208	$	1,590,934

The following table presents the Company’s revenues by segment disaggregated by type (in thousands):



	Three Months Ended September 30,				Nine Months Ended September 30,
		2019		2018		2019		2018
Services
Drilling Products and Services	$	32,471	$	24,083	$	91,640	$	75,549
Onshore Completion and Workover Services		136,154		284,187		484,965		771,605
Production Services		89,571		97,551		280,171		285,843
Technical Solutions		67,750		65,397		189,612		184,801
Total services	$	325,946	$	471,218	$	1,046,388	$	1,317,798

Rentals
Drilling Products and Services	$	78,714	$	75,101	$	221,306	$	202,870
Onshore Completion and Workover Services		8,951		10,682		28,673		30,995
Production Services		9,216		8,319		25,068		22,748
Technical Solutions		2,890		7,748		7,773		16,523
Total rentals	$	99,771	$	101,850	$	282,820	$	273,136
Total Revenues	$	425,717	$	573,068	$	1,329,208	$	1,590,934

Impact of adoption of ASU 2016-02, Leases (Topic 842)

Services revenue:

In connection with its adoption of Topic 842, the Company determined that certain of its services revenue contracts contain a lease component. The Company elected to adopt a practical expedient option available to lessors, which allows the Company to combine the lease and non-lease components and account for the combined component in accordance with the accounting treatment for the predominant component. Therefore, the Company combined the lease and service components for certain of the Company’s service

Notes receivable consist of a commitment from the seller of an oil and gas property acquired by the Company related to costs associated with the abandonment of the acquired property. Pursuant to an agreement with the seller, the Company will invoice the seller an agreed upon amount at the completion of certain decommissioning activities. The gross amount of this obligation totals $115.0 million and is recorded at present value using an effective interest rate of 6.58%. The related discount is amortized to interest income based on the expected timing of completion of the decommissioning activities. The Company recorded interest income related to notes receivable of ~~$2.6~~$3.1 million and ~~$2.7~~$2.9 million for the nine months ended September 30, ~~2017~~2019 and ~~2016,~~2018, respectively.

The Company’s decommissioning liabilities associated with an oil and gas property and its related assets consist of costs related to the plugging of wells, the removal of the related platform and equipment, and site restoration. The Company reviews the adequacy of its decommissioning liabilities whenever indicators suggest that the estimated cash flows needed to satisfy the liabilities have changed materially. The Company had decommissioning liabilities of $128.8 million and $123.7 million at September 30, 2017 and December 31, 2016, respectively.

~~In February 2017, the~~The Company amended its credit facility to, among other things, reduce the size of the credit facility from $400.0 million to $300.0 million (with a $100.0 million accordion feature) and amend the financial covenants, in part to suspend the interest coverage ratio until the third quarter of 2017. Borrowings under the credit facility bear interest at LIBOR plus margins that depend on the Company’s credit rating. Indebtedness under the credit facility is secured by substantially all of the Company’s assets, including the pledge of the stock of its principal domestic subsidiaries. The credit facility contains customary events of default and requires that the Company satisfy various financial covenants. The credit facility also limits the Company’s ability to pay dividends or make distributions, make acquisitions, create liens or incur additional indebtedness.

~~Subsequent to the quarter end, the Company extended its~~has an asset-based revolving credit facility ~~maturity to~~which matures in October ~~2022 with a $300 million asset-based revolving credit facility.~~2022. The borrowing base under the credit facility ~~will be~~is calculated asbased on a formula referencing the ~~Company’s~~borrower’s and the subsidiary guarantors’ eligible accounts receivable, eligible inventory and eligible premium rental drill pipe less reserves. Availability under the credit facility ~~will be~~is the lesser of (i) the commitments, (ii) the borrowing base and (iii) the highest principal amount permitted to be secured under the indenture governing ~~7 1/8%~~the 7.125% senior unsecured notes due 2021. On September 20, 2019, the Company amended its credit facility to increase the letter of credit capacity from $100.0 million to $150.0 million. At ~~October 20, 2017, availability~~September 30, 2019, the borrowing base was ~~$285.6~~$229.6 million and ~~may increase or decrease as a result~~the Company had $83.1 million of ~~among other things, changes to~~letters of credit outstanding that reduced its borrowing availability under the ~~Company’s consolidated tangible assets.~~revolving credit facility. The credit agreement contains various covenants, including, but not limited to, limitations on the incurrence of indebtedness, permitted investments, liens on assets, making distributions, transactions with affiliates, merger, consolidations, dispositions of assets and other provisions customary in similar types of agreements.

Senior Unsecured Notes

~~In August 2017, the~~The Company ~~issued~~has outstanding $500 million of ~~7 3/4%~~ senior unsecured notes due September 2024 in a private placement conducted pursuant to Rule 144A and Regulation S under the Securities Act of 1933, as amended (the “Securities Act”). Costs associated with the issuance of these notes were $8.9 million which will be amortized over the term of the notes. The Company used the net proceeds of the notes offering and cash on hand to redeem all of the outstanding $500 million 6 3/8% senior unsecured notes due 2019. In connection with the redemption of the senior unsecured notes due 2019, the Company recorded $2.6 million for the write-off of unamortized debt issuance costs. 2024. The indenture governing the ~~7 3/4%~~7.75% senior unsecured notes due 2024 requires semi-annual interest payments ~~beginning~~ on March 15 ~~2018, until~~and September 15 of each year through the maturity date of September 15, 2024.

The Company also has outstanding $800 million of ~~7 1/8%~~ senior unsecured notes due December 2021. The indenture governing the ~~7 1/8%~~7.125% senior unsecured notes due 2021 requires semi-annual interest payments on June 15 and December 15of each year through the maturity date of December 15, 2021.

~~(6)~~ ~~Derivative Financial Instruments~~

(6)Decommissioning Liabilities

The Company’s decommissioning liabilities associated with an oil and gas property and its related assets include liabilities related to the plugging of wells, removal of the related platform and equipment, and site restoration. The Company reviews the adequacy of its decommissioning liabilities whenever indicators suggest that the estimated cash flows and/or relating timing needed to satisfy the liability have changed materially. The Company had ~~three interest rate swaps~~decommissioning liabilities of $134.9 million and $130.1 million at September 30, 2019 and December 31, 2018, respectively.

(7) Leases

Adoption of ASU 2016-02, Leases

The Company adopted the new standard on January 1, 2019 and used the effective date as the date of initial application. Therefore, prior period financial information has not been adjusted and continues to be reflected in accordance with the Company’s historical accounting policy. The standard establishes a right-of-use (ROU) model that requires a lessee to recognize a ROU asset and lease liability on the balance sheet for ~~notional amounts~~all leases with a term longer than 12 months.

The standard provides a number of ~~$100 million each, related to its 7 1/8% senior notes maturing~~optional practical expedients in ~~December 2021. In January 2017,~~transition. The Company elected the “package of practical expedients,” which, among other things, allows the Company ~~sold these interest rate swaps~~ to carry forward its historical lease classification.

The adoption of this standard resulted in the ~~counterparties for a net amount~~recording of ~~$0.8 million. The remaining balance~~operating lease assets and operating lease liabilities of ~~the derivative asset is being amortized to interest expense over the remaining term~~approximately $100.0 million as of ~~the~~January 1, 2019, with 0 related ~~notes. For the nine months ended September 30, 2017, $1.~~5 ~~million of expense related to the amortization of the remaining derivative asset was recorded.~~

~~Table Of Contents~~

~~The location and effect of the derivative asset~~impact on the Company’s condensed consolidated statement of ~~operations, presented~~equity or condensed consolidated statement of operations. Short-term leases have not been recorded on the balance sheet.

Accounting Policy for Leases

The Company determines if an arrangement is a ~~pre-tax basis,~~lease at inception. All of the Company’s leases are operating leases and are included in ROU assets, accounts payable and operating lease liabilities in the condensed consolidated balance sheet.

ROU assets represent the Company’s right to use an underlying asset for the lease term and lease liabilities represent the Company’s obligations to make lease payments arising from the lease. Operating lease ROU assets and liabilities are recognized at the commencement date based on the present value of lease payments over the respective lease term. The Company uses its incremental borrowing rate based on the information available at the commencement date in determining the present value of lease payments. The Company’s lease terms may include options to extend or terminate the lease.

Overview

The Company’s operating leases are primarily for real estate, machinery and equipment, and vehicles. The terms and conditions for these leases vary by the type of underlying asset. Total operating lease expense was as follows ~~(in~~(in thousands):

Effect of derivative asset

Location of (gain) loss recognized

Three Months Ended September 30, 2016

Nine Months Ended September 30, 2016
Interest rate swap

Interest expense, net

$
1,791

$
(4,329)
Hedged item - debt

Interest expense, net

(1,805)

365

$
(14)

$
(3,964)



	Three Months Ended September 30, 2019		Nine Months Ended September 30, 2019
Long-term fixed lease expense	$	10,105	$	29,433
Long-term variable lease expense		400		1,640
Short-term lease expense		3,355		13,356
Total operating lease expense	$	13,860	$	44,429

For the three and nine months ended September 30, ~~2016, $0~~2018, total operating lease expense was $13.5 million and $~~4.0~~$40.4 million, respectively.

The following tables provide a summary of the financial assets and liabilities measured at fair value on a recurring basis (in thousands):

Fair Value at September 30, 2017

Level 1

Level 2

Level 3

Total
Intangible and other long-term assets, net

Non-qualified deferred compensation assets

$
369

$
13,341

$
-

$
13,710
Accounts payable

Non-qualified deferred compensation liabilities

$
-

$
1,157

$
-

$
1,157
Other long-term liabilities

Non-qualified deferred compensation liabilities

$
-

$
20,250

$
-

$
20,250

Fair Value at December 31, 2016

Level 1

Level 2

Level 3

Total
Intangible and other long-term assets, net

Non-qualified deferred compensation assets

$
368

$
11,992

$
-

$
12,360
Interest rate swaps

$
-

$
8,579

$
-

$
8,579
Accounts payable

Non-qualified deferred compensation liabilities

$
-

$
1,115

$
-

$
1,115
Other long-term liabilities

Non-qualified deferred compensation liabilities

$
-

$
18,489

$
-

$
18,489




	Fair Value at September 30, 2019
	Level 1		Level 2		Level 3		Total
Intangible and other long-term assets, net:
Non-qualified deferred compensation assets	$	-	$	14,741	$	-	$	14,741
Accounts payable:
Non-qualified deferred compensation liabilities	$	-	$	1,243	$	-	$	1,243
Other long-term liabilities:
Non-qualified deferred compensation liabilities	$	-	$	22,224	$	-	$	22,224
Total debt	$	857,750	$	-	$	-	$	857,750

	Fair Value at December 31, 2018
	Level 1		Level 2		Level 3		Total
Intangible and other long-term assets, net:
Non-qualified deferred compensation assets	$	376	$	12,930	$	-	$	13,306
Accounts payable:
Non-qualified deferred compensation liabilities	$	-	$	1,138	$	-	$	1,138
Other long-term liabilities:
Non-qualified deferred compensation liabilities	$	-	$	19,766	$	-	$	19,766
Total debt	$	1,084,711	$	-	$	-	$	1,084,711

The Company’s non-qualified deferred compensation plans allow officers, certain highly compensated employees and non-employee directors to defer receipt of a portion of their compensation and contribute such amounts to one or more hypothetical investment funds. The Company entered into separate trust agreements, subject to general creditors, to segregate the assets of each plan and reports the accounts of the trusts in its condensed consolidated financial statements. These investments are reported at fair value based on unadjusted quoted prices in active markets for identifiable assets and observable inputs for similar assets and liabilities, which represent Levels 1 and 2, respectively, in the fair value hierarchy.

~~Table Of Contents~~

The carrying amount of cash equivalents, accounts receivable, accounts payable and accrued expenses, as reflected in the condensed consolidated balance sheets, approximates fair value due to the short maturities. The fair value of the Company’s cash equivalents, accounts receivable and current maturities of long-term debt approximates their carrying amounts. The fair value of the Company’s long-term debt was approximately $1,351.6 million and $1,307.6 ~~million~~ ~~at September 30, 2017 and December 31, 2016, respectively. The fair value of these~~ debt instruments is determined by reference to the market value of ~~the~~such instruments as quoted in an over-the-counter ~~markets,~~market, which ~~are~~represents Level 1 ~~inputs.~~in the fair value hierarchy.

~~(8)~~ The following table reflects the fair value measurements used in testing the impairment of long-lived assets (in thousands):

Fair value is measured as of impairment date using Level 3 inputs. See Note 10 for a discussion of the reduction in value of assets recorded during the nine months ended September 30, 2019.

(9) Segment Information

Business Segments

The Drilling Products and Services segment rents and sells premium drill pipe, bottom hole assemblies, tubulars and specialized equipment for use with onshore and offshore oil and gas well drilling, completion, production and workover activities. It also provides on-site accommodations and machining services. The Onshore Completion and Workover Services segment provides pressure pumping services used to complete and stimulate production in new oil and gas wells, fluid handling services and well servicing rigs that provide a variety of well completion, workover and maintenance services. The Production Services segment provides intervention services such as coiled tubing, cased hole and mechanical wireline, hydraulic workover and snubbing, production testing and optimization, and remedial pumping services. The Technical Solutions segment provides services typically requiring specialized engineering, manufacturing or project planning, including well containment systems, stimulation and sand control services, ~~and~~ well plug and abandonment ~~services. It also includes~~services and the production and sale of oil and gas.

The Company evaluates the performance of its reportable segments based on income or loss from ~~operations.~~operations excluding corporate expenses. The segment measure is calculated as follows: segment revenues less segment operating expenses, depreciation, depletion, amortization and accretion expense and reduction in value of assets and allocated corporate general and administrative expenses. Corporate general and administrative expenses are allocated to the segments based primarily on specific identification and, to the extent that such identification is not practical, other methods that the Company believes to be a reasonable reflection of the utilization of services provided.assets. The Company ~~believes~~uses this segment measure ~~is useful in evaluating the performance of~~to evaluate its reportable segments because it ~~highlights operating trends~~is the measure that is most consistent with how the Company organizes and ~~aids analytical comparisons.~~manages its business operations. Corporate and other costs primarily include expenses related to support functions, salaries and benefits for corporate employees and stock-based compensation expense.

Summarized financial information for the Company’s segments is as follows (in thousands):



Three Months Ended September 30, 2017
Three Months Ended September 30, 2019													Three Months Ended September 30, 2019

			Onshore													Onshore
	Drilling		Completion											Drilling		Completion
	Products and		and Workover		Production		Technical				Consolidated			Products and		and Workover		Production		Technical		Corporate and		Consolidated
	Services		Services		Services		Solutions		Unallocated		Total			Services		Services		Services		Solutions		Other		Total
Revenues	$	77,206	$	248,405	$	97,333	$	83,085	$	-	$	506,029		$	111,185	$	145,105	$	98,787	$	70,640	$	-	$	425,717
Cost of services and rentals (exclusive of
depreciation, depletion, amortization and accretion)		31,715		210,103		78,074		48,387		-		368,279			38,663		123,617		82,556		49,370		-		294,206
Depreciation, depletion, amortization
and accretion		32,055		48,828		19,606		8,262		-		108,751			20,168		29,080		12,063		4,909		1,169		67,389
General and administrative expenses		16,491		22,931		17,441		17,509		-		74,372			14,363		10,046		2,905		14,935		20,519		62,768
Reduction in value of assets		-		1,838		-		8,115		-		9,953			-		566		1,997		7,008		-		9,571
Income (loss) from operations		(3,055)		(35,295)		(17,788)		812		-		(55,326)			37,991		(18,204)		(734)		(5,582)		(21,688)		(8,217)
Interest income (expense), net		-		-		-		926		(30,022)		(29,096)			-		-		-		1,051		(25,556)		(24,505)
Other expense		-		-		-		-		(970)		(970)
Other income															-		-		-		-		(3,353)		(3,353)
Income (loss) from continuing operations
before income taxes	$	(3,055)	$	(35,295)	$	(17,788)	$	1,738	$	(30,992)	$	(85,392)		$	37,991	$	(18,204)	$	(734)	$	(4,531)	$	(50,597)	$	(36,075)



Three Months Ended September 30, 2018

			Onshore
	Drilling		Completion
	Products and		and Workover		Production		Technical		Corporate and		Consolidated
	Services		Services		Services		Solutions		Other		Total
Revenues	$	99,184	$	294,869	$	105,870	$	73,145	$	-	$	573,068
Cost of services and rentals (exclusive of
depreciation, depletion, amortization and accretion)		37,328		239,348		84,312		43,401		-		404,389
Depreciation, depletion, amortization
and accretion		27,830		47,299		17,085		6,329		1,349		99,892
General and administrative expenses		13,771		5,455		10,471		14,453		24,745		68,895
Income (loss) from operations		20,255		2,767		(5,998)		8,962		(26,094)		(108)
Interest income (expense), net		-		-		-		986		(25,938)		(24,952)
Other expense		-		-		-		-		(277)		(277)
Income (loss) from continuing operations
before income taxes	$	20,255	$	2,767	$	(5,998)	$	9,948	$	(52,309)	$	(25,337)



Nine Months Ended September 30, 2019

			Onshore
	Drilling		Completion
	Products and		and Workover		Production		Technical		Corporate and		Consolidated
	Services		Services		Services		Solutions		Other		Total
Revenues	$	312,946	$	513,638	$	305,239	$	197,385	$	-	$	1,329,208
Cost of services and rentals (exclusive of
depreciation, depletion, amortization and accretion)		118,732		436,400		240,855		124,810		-		920,797
Depreciation, depletion, amortization
and accretion		64,684		100,210		39,375		17,198		3,579		225,046
General and administrative expenses		44,173		29,626		18,687		46,394		69,717		208,597
Reduction in value of assets		-		31,947		1,997		7,008		-		40,952
Income/(loss) from operations		85,357		(84,545)		4,325		1,975		(73,296)		(66,184)
Interest income (expense), net		-		-		-		3,104		(77,379)		(74,275)
Other expense		-		-		-		-		(4,476)		(4,476)
Income/(loss) from continuing operations
before income taxes	$	85,357	$	(84,545)	$	4,325	$	5,079	$	(155,151)	$	(144,935)



Nine Months Ended September 30, 2018

			Onshore
	Drilling		Completion
	Products and		and Workover		Production		Technical		Corporate and		Consolidated
	Services		Services		Services		Solutions		Other		Total
Revenues	$	278,419	$	802,600	$	308,591	$	201,324	$	-	$	1,590,934
Cost of services and rentals (exclusive of
depreciation, depletion, amortization and accretion)		108,997		630,205		255,377		123,080		-		1,117,659
Depreciation, depletion, amortization
and accretion		86,061		142,377		50,668		20,332		4,146		303,584
General and administrative expenses		40,138		29,783		29,760		41,836		73,094		214,611
Income (loss) from operations		43,223		235		(27,214)		16,076		(77,240)		(44,920)
Interest income (expense), net		-		-		-		2,913		(77,646)		(74,733)
Other expense		-		-		-		-		(4,394)		(4,394)
Income (loss) from continuing operations
before income taxes	$	43,223	$	235	$	(27,214)	$	18,989	$	(159,280)	$	(124,047)

~~Table Of Contents~~



Identifiable Assets
			Onshore
	Drilling		Completion
	Products and		and Workover		Production		Technical		Corporate and		Consolidated
	Services		Services		Services		Solutions		Other		Total
September 30, 2019	$	663,515	$	607,947	$	420,208	$	361,434	$	70,647	$	2,123,751
December 31, 2018	$	587,264	$	808,037	$	434,430	$	340,161	$	46,070	$	2,215,962

During the nine months ended September 30, 2019, the Company sold its drilling rig service line, which was previously included in the Onshore Completion and Workover Services segment. This service line included 12 active U.S. land based drilling rigs and associated equipment with a carrying value of $66.2 million. The Company received $78.0 million in cash proceeds and recognized a $0.2 million loss on sale of assets. In addition, the Company recorded a $7.5 million impairment of the intangibles associated with the disposed assets.

Three Months Ended September 30, 2016

Onshore

Drilling

Completion

Products and

and Workover

Production

Technical

Consolidated

Services

Services

Services

Solutions

Unallocated

Total
Revenues

$
59,587

$
125,022

$
77,523

$
64,093

$
-

$
326,225
Cost of services and rentals (exclusive of

depreciation, depletion, amortization and accretion)

26,955

124,747

66,000

40,466

-

258,168
Depreciation, depletion, amortization and accretion

37,950

51,346

23,131

10,881

-

123,308
General and administrative expenses

20,431

23,124

19,712

23,476

-

86,743
Loss from operations

(25,749)

(74,195)

(31,320)

(10,730)

-

(141,994)
Interest income (expense), net

-

-

(17)

870

(22,624)

(21,771)
Other income

-

-

-

-

3,667

3,667
Loss from continuing operations
before income taxes

$
(25,749)

$
(74,195)

$
(31,337)

$
(9,860)

$
(18,957)

$
(160,098)

Nine Months Ended September 30, 2017

Onshore

Drilling

Completion

Products and

and Workover

Production

Technical

Consolidated

Services

Services

Services

Solutions

Unallocated

Total
Revenues

$
214,464

$
702,463

$
254,544

$
205,562

$
-

$
1,377,033
Cost of services and rentals (exclusive of

depreciation, depletion, amortization and accretion)

94,191

610,154

210,778

126,944

-

1,042,067
Depreciation, depletion, amortization and accretion

100,859

144,090

60,905

25,297

-

331,151
General and administrative expenses

50,576

73,522

50,113

52,362

-

226,573
Reduction in value of assets

-

1,838

-

8,115

-

9,953
Loss from operations

(31,162)

(127,141)

(67,252)

(7,156)

-

(232,711)
Interest income (expense), net

-

-

-

2,627

(79,306)

(76,679)
Other expense

-

-

-

-

(2,477)

(2,477)
Loss from continuing operations

before income taxes

$
(31,162)

$
(127,141)

$
(67,252)

$
(4,529)

$
(81,783)

$
(311,867)

Nine Months Ended September 30, 2016

Onshore

Drilling

Completion

Products and

and Workover

Production

Technical

Consolidated

Services

Services

Services

Solutions

Unallocated

Total
Revenues

$
224,213

$
373,387

$
267,389

$
230,640

$
-

$
1,095,629
Cost of services and rentals (exclusive of

depreciation, depletion, amortization and accretion)

92,487

363,447

210,823

135,385

-

802,142
Depreciation, depletion, amortization and accretion

125,831

158,885

72,959

34,342

-

392,017
General and administrative expenses

71,403

68,250

61,214

69,600

-

270,467
Reduction in value of assets

47,659

188,741

226,061

-

-

462,461
Loss from operations

(113,167)

(405,936)

(303,668)

(8,687)

-

(831,458)
Interest income (expense), net

-

-

(1,330)

2,669

(69,664)

(68,325)
Other income

-

-

-

-

22,103

22,103
Loss from continuing operations

before income taxes

$
(113,167)

$
(405,936)

$
(304,998)

$
(6,018)

$
(47,561)

$
(877,680)

The Company attributes revenue to various countries based on the location of where services are performed or the destination of the drilling products or equipment sold or rented. Long-lived assets consist primarily of property, plant and equipment and are attributed to various countries based on the physical location of the asset at the end of a period. The Company’s revenue attributed to the U.S. and to other countries and the value of its long-lived assets by those locations are as follows (in thousands):



Revenues
	Three Months Ended September 30,				Nine Months Ended September 30,				Three Months Ended September 30,				Nine Months Ended September 30,
	2017		2016		2017		2016		2019		2018		2019		2018
United States	$	423,137	$	243,586		1,158,810	$	808,546	$	324,559	$	486,912	$	1,045,615	$	1,342,125
Other countries		82,892		82,639		218,223		287,083		101,158		86,156		283,593		248,809
Total	$	506,029	$	326,225	$	1,377,033	$	1,095,629	$	425,717	$	573,068	$	1,329,208	$	1,590,934

Long-Lived Assets
	September 30, 2017		December 31, 2016
									September 30, 2019		December 31, 2018
United States	$	1,095,568	$	1,288,077					$	712,661	$	903,520
Other countries		283,992		317,288						178,879		205,606
Total	$	1,379,560	$	1,605,365					$	891,540	$	1,109,126

The Company maintains various stock incentive plans that provide long-term incentives to the Company’s key employees, including officers, directors, consultants and advisors (Eligible Participants). Under the stock incentive plans, the Company may grant incentive stock options, restricted stock, restricted stock units, stock appreciation rights, other stock-based awards or any combination thereof to Eligible Participants. The Company’s total compensation expense related to these plans was approximately $29.2 million and $32.4 million for the nine months ended September 30, 2017 and 2016, respectively, which is reflected in general and administrative expenses.

~~The Company had $29.9 million of unrecorded tax benefits~~ ~~as of September 30, 2017 and December 31, 2016,~~ all of which would impact the Company’s effective tax rate if recognized. It is the Company’s policy to recognize interest and applicable penalties, if any, related to uncertain tax positions in income tax expense.

Basic earnings per share is computed by dividing income available to common stockholders by the weighted average number of common shares outstanding during the period. Diluted earnings per share is computed in the same manner as basic earnings per share except that the denominator is increased to include the number of additional common shares that could have been outstanding assuming the exercise of stock options and the conversion of restricted stock units.

~~For the three and nine months ended September 30, 2017 and 2016, the Company incurred a loss from continuing operations; therefore the impact of any incremental shares would be anti-dilutive.~~

For the nine months ended September 30, 2017, the Company recorded $9.9 million in expense related to the reduction in value of assets of property, plant and equipment, primarily in the Technical Solutions segment.

For the three and nine months ended September 30, 2016, the Company recorded $0 and $462.5 million in expense related to the reduction in value of assets, respectively. The components of the reduction in value of assets are as follows (in thousands):

~~Goodwill is tested for impairment annually as of October 1~~st or on an interim basis if events or circumstances indicate that the fair value of the asset has decreased below its carrying value. The Company’s goodwill impairment evaluation as of June 30, 2016, indicated that the carrying values of the Onshore Completion and Workover Services and Production Services segments exceeded their fair values so that goodwill was potentially impaired. The Company then performed the second step of the goodwill impairment test, which involved calculating the implied fair value of the segments’ goodwill by allocating the fair values of the Onshore Completion and Workover Services and Production Services segments to all of their assets and liabilities (other than goodwill) and comparing them to the carrying amounts of the goodwill. To estimate the fair value of the reporting unit (which is consistent with the reported business segment), the Company used a weighting of the discounted cash flow method and the public company guideline method of determining fair value of the reporting unit. The Company weighted the discounted cash flow method 80% and the public company guideline method 20% due to differences between the Company’s reporting unit and peer companies’ size, profitability and diversity of operations.

During the nine months ended September 30, 2016, the Company recorded a $330.5 million reduction in value of goodwill relating to its Onshore Completion and Workover Services and Production Services segments. The Company determined that the implied fair value of its goodwill for the Onshore Completion and Workover Services segment was less than its carrying value and recorded a $140.0 million impairment of the Onshore Completion and Workover Services segment’s goodwill. In addition, the Company determined that the implied fair value of its goodwill for the Production Services segment was less than its carrying value and recorded a $190.5 million impairment of the Production Services segment’s goodwill.

~~At September 30, 2017 and December 31, 2016, the Company’s accumulated reduction in value of goodwill was $1,748.2 million.~~

Long-lived assets, such as property, plant and equipment and purchased intangibles subject to amortization are reviewed for impairment whenever events or changes in circumstances indicate that the carrying amount of such assets may not be recoverable. Recoverability of assets to be held and used is assessed by a comparison of the carrying amount of such assets to their fair value calculated, in part, by the estimated undiscounted future cash flows expected to be generated by the assets. Cash flow estimates are based upon, among other things, historical results adjusted to reflect the best estimate of future market rates, utilization levels, and operating performance. Estimates of cash flows may differ from actual cash flows due to, among other things, changes in economic conditions or changes in an asset’s operating performance. The Company’s assets are grouped by line of business or division for the impairment testing, which represent the lowest level of identifiable cash flows. If the asset grouping’s fair value is less than the carrying amount of ~~those items,~~the asset grouping, impairment losses are recorded in the amount by which the carrying amount of ~~such assets~~asset grouping exceeds the fair value. The estimate of fair value represents the Company’s best estimate based on industry trends and reference to market transactions and is subject to variability.

During the three and nine months ended September 30, ~~2016,~~2019, the Company recorded ~~$105.9~~an estimated $9.6 million and $41.0 million, respectively, in connection with the reduction in value of its long-lived assets. The reduction in value of assets was ~~comprised of $2.9 million~~primarily related to ~~equipment and $45.9 million related to~~reduction in value of certain intangibles ~~in the fluid management business~~ in the Onshore Completion and Workover Services segment and ~~$12.4 million~~long-lived assets in the Technical Solutions segment.

The Company maintains various stock incentive plans that provide long-term incentives to the Company’s key employees, including officers, directors, consultants and advisors (Eligible Participants). Under the stock incentive plans, the Company may grant incentive stock options, restricted stock, restricted stock units, stock appreciation rights, other stock-based awards or any combination thereof to Eligible Participants. The Company’s total compensation expense related to ~~equipment~~these plans was approximately $13.9 million and ~~$21.0~~$22.8 million related to intangibles, primarily relating to the cementing business in the Production Services segment. In addition, the Company recorded $23.7 million related to the reduction in carrying values of certain accommodation units included in the Drilling Products and Services segment.

~~During~~for the nine months ended September 30, ~~2016,~~2019 and 2018, respectively, which is reflected in general and administrative expenses.

The Company had $30.6 million of unrecorded tax benefits as of September 30, 2019 and December 31, 2018, all of which would impact the ~~Company recorded $23.9 million~~Company’s effective tax rate if recognized. It is the Company’s policy to recognize interest and applicable penalties, if any, related to uncertain tax positions in income tax expense.

Basic earnings per share is computed by dividing income available to common stockholders by the weighted average number of common shares outstanding during the period. Diluted earnings per share is computed in the ~~Drilling Products and Services segment for retirement and abandonment~~same manner as basic earnings per share except that

the denominator is increased to include the number of ~~excess and inoperable and/or functionally obsolete long-lived assets~~additional common shares that ~~would require a significant cost to refurbish.~~

~~(13)Discontinued Operations~~

~~At September 30, 2017,~~could have been outstanding assuming the ~~assets~~exercise of ~~the Company’s former subsea construction business were being actively marketed~~stock options and the ~~Company’s management is committed to selling the remaining assets, which were classified as held for sale.~~ conversion of restricted stock units.

The ~~following summarizes the assets and liabilities related to the businesses reported as discontinued operations (in thousands):~~

September 30, 2017

December 31, 2016
Current assets

$
330

$
158
Property, plant and equipment, net

27,000

27,000
Total assets

$
27,330

$
27,158
Current liabilities

$
8,755

$
8,653

~~Loss~~Company incurred a loss from ~~discontinued~~continuing operations for the three and nine months ended September 30, ~~2017 was $1.9 million~~2019 and ~~$5.6 million, respectively. Loss from discontinued operations for~~2018; therefore the ~~three and nine months ended September 30, 2016 was $4.1 million and $8.6 million, respectively.~~ impact of any incremental shares would be anti-dilutive.

(14)~~New Accounting Pronouncements~~ Contingencies

~~Standards adopted~~

~~In January 2017,~~Due to the ~~Financial Accounting Standards Board (FASB) issued accounting standards update (ASU) 2017-04,~~ ~~Intangibles- Goodwill and Other (Topic 350): Simplifying~~nature of the ~~Test for Goodwill Impairment.~~ The amendments eliminate Step 2 from the goodwill impairment test. The annual or interim goodwill impairment test is performed by comparing the fair value of a reporting unit with its carrying amount. An impairment charge should be recognized for the amount by which the carrying amount exceeds the reporting unit’s fair value. The amendments should be applied on a prospective basis. The new standard is effective forCompany’s business, the Company ~~on January 1, 2020. Early adoption~~ is ~~permitted for interim~~involved, from time to time, in routine litigation or ~~annual goodwill impairment tests performed on testing dates after January 1, 2017. The Company adopted the accounting guidance~~subject to disputes or claims regarding its business activities. Legal costs related to these matters are expensed as of January 1, 2017. The newly adopted accounting principle is preferable because it reduces the cost and complexity of evaluating goodwill for impairment. The adoption of this ASU did not have a material impact on the Company’s condensed consolidated financial statements.

incurred. In ~~March 2016, the FASB issued ASU 2016-09,~~ ~~Compensation – Stock Compensation (Topic 718): Improvements to Employee Share-Based Payment Accounting,~~ ~~which relates to the accounting for employee share-based payments. The guidance in this update addresses several aspects~~management’s opinion, none of the ~~accounting for share-based payments, including income tax consequences, classification of awards as either equity~~pending litigation, disputes or liabilities and classification on the statement of cash flows. The Company adopted the accounting guidance as of January 1, 2017. The adoption of this ASU did not have a material impact on the Company’s condensed consolidated financial statements.

~~In July 2015, the FASB issued ASU No. 2015-11,~~ ~~Inventory (Topic 330) – Simplifying the Measurement of Inventory~~, which applies to inventory measured using first-in, first-out or average cost. The guidance in this update states that inventory within its scope shall be measured at the lower of cost or net realizable value, and when the net realizable value of inventoryclaims is lower than its cost, the difference shall be recognized as a loss in earnings. The Company adopted the accounting guidance as of January 1, 2017. The adoption of this ASU did not have a material impact on the Company’s condensed consolidated financial statements.

~~Standards not yet adopted~~

~~In May 2017, the FASB issued ASU 2017-09,~~ ~~Compensation – Stock Compensation (Topic 718): Scope of Modification Accounting.~~ The guidance in this ASU applies to all entities that change the terms or conditions of a share-based payment award. The amendments provide clarity and reduce diversity in practice as well as cost and complexity when applying the guidance in Topic 718, ~~Compensation – Stock Compensation,~~ to the modification of the terms and conditions of a share-based payment award. The amendments in ASU 2017-09 include guidance on determining which changes to the terms and conditions of share-based payment awards require an entity to apply modification accounting under Topic 718. The new standard is effective for the Company beginning on January 1, 2018 and should be applied prospectively to awards modified on or after the adoption date. The Company does not expect the adoption of this ASUexpected to have a material ~~impact on its condensed consolidated financial statements.~~

~~Table Of Contents~~

~~In January 2017, the FASB issued ASU 2017-01,~~ ~~Business Combinations (Topic 805): Clarifying the Definition of a Business.~~ The amendments affect all companies and other reporting organizations that must determine whether they have acquired or sold a business. The amendments are intended to help companies and other organizations evaluate whether transactions should be accounted for as acquisitions (or disposals) of assets or businesses. The amendments provide a more robust framework to use in determining when a set of assets and activities is a business. The new standard is effective for the Company beginning on January 1, 2018. The Company does not expect the adoption of this ASU to have a material impact on its condensed consolidated financial statements.

~~In November 2016, the FASB issued ASU 2016-18,~~ ~~Statements of Cash Flows (Topic 230): Restricted Cash.~~ The guidance in this ASU requires that a statement of cash flows explain the change during the period in the total of cash, cash equivalents, and amounts generally described as restricted cash or restricted cash equivalents. As a result, amounts generally described as restricted cash and restricted cash equivalents should be included with cash and cash equivalents when reconciling the beginning-of-period and end-of-period total amounts shownadverse effect on the ~~statement~~Company’s financial condition, results of ~~cash flows. The new standard is effective for the Company beginning on January 1, 2018 and should be applied on a retrospective basis. The Company does not expect the adoption~~operations or liquidity.

A subsidiary of ~~this ASU to have a material impact on its condensed consolidated financial statements.~~

~~In October 2016, the FASB issued ASU 2016-16,~~ ~~Income Taxes (Topic 740): Intra-Entity Transfers of Assets Other Than Inventory.~~ The guidance in this ASU requires entities to recognize at the transaction date the income tax consequences of intercompany asset transfers other than inventory. The new standard is effective for the Company beginning on January 1, 2018. The Company is evaluating the effect that ASU 2016-16 will have on its condensed consolidated financial statements and related disclosures.

~~In February 2016, the FASB issued ASU No. 2016-02,~~ ~~Leases (Topic 842)~~, which requires lessees to recognize the assets and liabilities arising from leases on the balance sheet. This new ASU will require the lessee to recognize a lease liability equal to the present value of the lease payments and a right-of-use asset representing its right to use the underlying asset for the lease term for all leases longer than 12 months. For leases with a term of 12 month or less, a lessee is permitted to make an accounting policy election by class of underlying asset not to recognize lease assets and liabilities and recognize the lease expense for such leases generally on a straight-line basis over the lease term. Under the new guidance, the Company will revise its leasing policies to require most of the leases, where the Company is involved in legal proceedings with 2 employees regarding the ~~lessee, to be recognized on~~payment of royalties for a patentable product developed by them. On April 2, 2018, the ~~balance sheet as~~employees filed a ~~lease and lease liability. Further,~~lawsuit in the ~~Company will separate leases from other contracts where~~Harris County District Court alleging that the ~~Company is either~~royalty payments they had received since 2010 should have been higher. In May 2019, the ~~lessor or lessee when~~jury issued a verdict in favor of the ~~rights conveyed under~~plaintiffs. On October 25, 2019, the ~~contracts indicate there is~~court issued a ~~lease.~~final judgment against the Company. The Company ~~is evaluating~~strongly disagrees with the ~~effect ASU 2016-02 will have on its condensed consolidated financial statements. The Company anticipates~~verdict and believes the district court committed several legal errors that ~~its assets and liabilities will increase by~~should result in a ~~significant amount. The new standard is effective for the Company beginning on January 1, 2019.~~

~~In May 2014, the FASB issued ASU No. 2014-09,~~ ~~Revenue from Contracts with Customers (Topic 606)~~, which will replace most existing revenue recognition guidance in GAAP. The guidance in this ASU requires an entity to recognize the amount of revenue that it expects to be entitled for the transfer of promised goodsreversal or services to customers. The new standard is effective for the Company beginning on January 1, 2018. The Company is in the process of determining the impacts the new standard will have on its various revenue streams. The Company’s approach includes performing a detailed review of key contracts representativeremand of the ~~different businesses and comparing historical accounting policies and practices to~~case by the ~~new accounting guidance.~~Court of Appeals. The ~~Company’s services and rental contracts are primarily short-term in nature, and therefore, based on the initial assessment, the Company does not expect the adoption~~ultimate resolution of this ~~ASU~~matter could result in a loss of up to ~~have~~$11.0 million in excess of amounts accrued.

(15) Supplemental Guarantor Information

SESI, L.L.C. (the Issuer), a ~~material impact on~~100% owned subsidiary of Superior Energy Services, Inc. (Parent), has $500 million of 7.75% senior unsecured notes due 2024. The Parent, along with certain of its ~~condensed consolidated financial statements, other than the additional disclosure requirements. Remaining implementation matters include establishing new policies, procedures, controls,~~100% owned domestic subsidiaries, fully and ~~quantifying any adoption date adjustments. The Company will adopt this standard on January 1, 2018 utilizing the modified retrospective method.~~unconditionally guaranteed such senior unsecured notes, and such guarantees are joint and several.

‎

~~Table Of Contents~~



SUPERIOR ENERGY SERVICES, INC. AND SUBSIDIARIES
Condensed Consolidating Balance Sheets
September 30, 2019
(in thousands)
(unaudited)
	Parent		Issuer		Guarantor ‎Subsidiaries		Non- ‎Guarantor ‎Subsidiaries		Eliminations		Consolidated
Assets
Current assets:
Cash and cash equivalents	$	-	$	187,979	$	1,341	$	70,569	$	-	$	259,889
Accounts receivable, net		-		30		280,704		87,796		-		368,530
Other current assets		-		8,592		133,669		62,339		-		204,600
Total current assets		-		196,601		415,714		220,704		-		833,019

Property, plant and equipment, net		-		11,372		722,830		157,338		-		891,540
Operating lease right-of-use assets		-		22,530		57,334		16,326		-		96,190
Goodwill		-		-		80,544		55,378		-		135,922
Notes receivable		-		-		67,042		-		-		67,042
Long-term intercompany accounts receivable		2,256,701		1,111,335		3,491,267		218,291		(7,077,594)		-
Intercompany notes receivable		-		1,200		-		6,000		(7,200)		-
Equity investments of consolidated subsidiaries		(2,113,614)		3,701,545		7,764		-		(1,595,695)		-
Restricted cash		-		-		2,708		45		-		2,753
Intangible and other long-term assets, net		-		19,203		71,239		6,843		-		97,285
Total assets	$	143,087	$	5,063,786	$	4,916,442	$	680,925	$	(8,680,489)	$	2,123,751

Liabilities and Stockholders' Equity
Current liabilities:
Accounts payable	$	-	$	8,986	$	67,127	$	34,285	$	-	$	110,398
Accrued expenses		-		80,810		104,122		35,691		-		220,623
Income taxes payable		-		(717)		-		4,559		-		3,842
Current portion of decommissioning liabilities		-		-		-		3,621		-		3,621
Total current liabilities		-		89,079		171,249		78,156		-		338,484

Long-term debt, net		-		1,285,755		-		-		-		1,285,755
Deferred income taxes		-		(149,512)		145,416		4,096		-		-
Decommissioning liabilities		-		-		131,263		-		-		131,263
Operating lease liabilities		-		23,093		42,009		11,153		-		76,255
Long-term intercompany accounts payable		-		5,876,786		1,082,435		118,373		(7,077,594)		-
Intercompany notes payable		-		6,000		-		1,200		(7,200)		-
Other long-term liabilities		-		46,199		76,510		26,198		-		148,907
Total stockholders' equity (deficit)		143,087		(2,113,614)		3,267,560		441,749		(1,595,695)		143,087
Total liabilities and stockholders' equity	$	143,087	$	5,063,786	$	4,916,442	$	680,925	$	(8,680,489)	$	2,123,751



SUPERIOR ENERGY SERVICES, INC. AND SUBSIDIARIES
Condensed Consolidating Balance Sheets
December 31, 2018
(in thousands)
(unaudited)
	Parent		Issuer		Guarantor ‎Subsidiaries		Non- ‎Guarantor ‎Subsidiaries		Eliminations		Consolidated
Assets
Current assets:
Cash and cash equivalents	$	-	$	102,224	$	707	$	55,119	$	-	$	158,050
Accounts receivable, net		-		160		367,497		79,696		-		447,353
Intercompany accounts receivable		-		12,279		74,906		3,489		(90,674)		-
Other current assets		-		12,805		111,560		43,137		-		167,502
Total current assets		-		127,468		554,670		181,441		(90,674)		772,905

Property, plant and equipment, net		-		10,129		920,978		178,019		-		1,109,126
Goodwill		-		-		80,544		56,244		-		136,788
Notes receivable		-		-		63,993		-		-		63,993
Long-term intercompany accounts receivable		2,243,431		-		1,991,912		182,284		(4,417,627)		-
Equity investments of consolidated subsidiaries		(1,952,647)		3,754,887		5,992		-		(1,808,232)		-
Restricted cash		-		-		5,653		45		-		5,698
Intangible and other long-term assets, net		-		19,255		100,847		7,350		-		127,452
Total assets	$	290,784	$	3,911,739	$	3,724,589	$	605,383	$	(6,316,533)	$	2,215,962

Liabilities and Stockholders' Equity
Current liabilities:
Accounts payable	$	-	$	8,807	$	109,903	$	20,615	$	-	$	139,325
Accrued expenses		45		102,845		86,926		29,364		-		219,180
Income taxes payable		-		1,237		-		(503)		-		734
Intercompany accounts payable		-		724		6,869		83,081		(90,674)		-
Current portion of decommissioning liabilities		-		-		-		3,538		-		3,538
Total current liabilities		45		113,613		203,698		136,095		(90,674)		362,777

Long-term debt, net		-		1,282,921		-		-		-		1,282,921
Decommissioning liabilities		-		-		126,558		-		-		126,558
Long-term intercompany accounts payable		-		4,417,627		-		-		(4,417,627)		-
Other long-term liabilities		-		50,225		76,543		26,199		-		152,967
Total stockholders' equity (deficit)		290,739		(1,952,647)		3,317,790		443,089		(1,808,232)		290,739
Total liabilities and stockholders' equity	$	290,784	$	3,911,739	$	3,724,589	$	605,383	$	(6,316,533)	$	2,215,962



SUPERIOR ENERGY SERVICES, INC. AND SUBSIDIARIES
Condensed Consolidating Statements of Operations
Three Months Ended September 30, 2019
(in thousands)
(unaudited)
	Parent		Issuer		Guarantor ‎Subsidiaries		Non- ‎Guarantor ‎Subsidiaries		Eliminations		Consolidated
Revenues	$	-	$	-	$	352,158		80,018		(6,459)	$	425,717
Cost of services and rentals (exclusive of depreciation,
depletion, amortization and accretion)		-		(1,373)		245,743		56,295		(6,459)		294,206
Depreciation, depletion, amortization and
accretion		-		907		57,143		9,339		-		67,389
General and administrative expenses		-		16,581		35,320		10,867		-		62,768
Reduction in value of assets		-		-		9,571		-		-		9,571
Income (loss) from operations		-		(16,115)		4,381		3,517		-		(8,217)

Other income (expense):
Interest income (expense), net		-		(25,911)		1,364		42		-		(24,505)
Intercompany interest income (expense)		-		(42)		-		42		-		-
Other income (expense)		-		(132)		411		(3,632)		-		(3,353)
Equity in losses of consolidated subsidiaries		(38,441)		(5,124)		(2,544)		-		46,109		-
Income (loss) from operations before income taxes		(38,441)		(47,324)		3,612		(31)		46,109		(36,075)
Income taxes		-		(8,883)		9,729		1,520		-		2,366
Net income (loss)		(38,441)		(38,441)		(6,117)		(1,551)		46,109		(38,441)




SUPERIOR ENERGY SERVICES, INC. AND SUBSIDIARIES
Consolidating Statements of Comprehensive Income (Loss)
Three Months Ended September 30, 2019
(in thousands)
(unaudited)
	Parent		Issuer		Guarantor ‎Subsidiaries		Non- ‎Guarantor ‎Subsidiaries		Eliminations		Consolidated
Net income (loss)	$	(38,441)	$	(38,441)	$	(6,117)	$	(1,551)	$	46,109	$	(38,441)
Change in cumulative translation adjustment, net of tax		(2,967)		(2,967)		-		(2,967)		5,934		(2,967)
Comprehensive loss	$	(41,408)	$	(41,408)	$	(6,117)	$	(4,518)	$	52,043	$	(41,408)



SUPERIOR ENERGY SERVICES, INC. AND SUBSIDIARIES
Condensed Consolidating Statements of Operations
Three Months Ended September 30, 2018
(in thousands)
(unaudited)
	Parent		Issuer		Guarantor ‎Subsidiaries		Non- ‎Guarantor ‎Subsidiaries		Eliminations		Consolidated
Revenues	$	-	$	-	$	511,510	$	66,428	$	(4,870)	$	573,068
Cost of services and rentals (exclusive of depreciation,
depletion, amortization and accretion)		-		(793)		366,568		43,484		(4,870)		404,389
Depreciation, depletion, amortization and
accretion		-		965		87,973		10,954		-		99,892
General and administrative expenses		-		23,959		34,726		10,210		-		68,895
Income (loss) from operations		-		(24,131)		22,243		1,780		-		(108)

Other income (expense):
Interest income (expense), net		-		(26,024)		993		79		-		(24,952)
Other income (expense)		-		(356)		264		(185)		-		(277)
Equity in earnings (losses) of consolidated subsidiaries		(21,816)		19,182		(53)		-		2,687		-
Income (loss) from continuing operations before income taxes		(21,816)		(31,329)		23,447		1,674		2,687		(25,337)
Income taxes		-		(9,513)		5,260		732		-		(3,521)
Net income (loss)	$	(21,816)	$	(21,816)	$	18,187	$	942	$	2,687	$	(21,816)




SUPERIOR ENERGY SERVICES, INC. AND SUBSIDIARIES
Consolidating Statements of Comprehensive Income (Loss)
Three Months Ended September 30, 2018
(in thousands)
(unaudited)
	Parent		Issuer		Guarantor ‎Subsidiaries		Non- ‎Guarantor ‎Subsidiaries		Eliminations		Consolidated
Net income (loss)	$	(21,816)	$	(21,816)	$	18,187	$	942	$	2,687	$	(21,816)
Change in cumulative translation adjustment, net of tax		(826)		(826)		-		(826)		1,652		(826)
Comprehensive income (loss)	$	(22,642)	$	(22,642)	$	18,187	$	116	$	4,339	$	(22,642)



SUPERIOR ENERGY SERVICES, INC. AND SUBSIDIARIES
Condensed Consolidating Statements of Operations
Nine Months Ended September 30, 2019
(in thousands)
(unaudited)
	Parent		Issuer		Guarantor ‎Subsidiaries		Non- ‎Guarantor ‎Subsidiaries		Eliminations		Consolidated
Revenues	$	-	$	-	$	1,108,641	$	238,154	$	(17,587)	$	1,329,208
Cost of services and rentals (exclusive of depreciation,
depletion, amortization and accretion)		-		(8,244)		784,396		162,232		(17,587)		920,797
Depreciation, depletion, amortization and
accretion		-		2,780		193,503		28,763		-		225,046
General and administrative expenses		-		64,319		109,983		34,295		-		208,597
Reduction in value of assets		-		-		40,952		-		-		40,952
Income (loss) from operations		-		(58,855)		(20,193)		12,864		-		(66,184)

Other income (expense):
Interest income (expense), net		-		(78,195)		3,836		84		-		(74,275)
Intercompany interest income (expense)				(67)		-		67
Other income (expense)		-		(1,207)		(799)		(2,470)		-		(4,476)
Equity in earnings (losses) of consolidated subsidiaries		(157,196)		(49,523)		(1,820)		-		208,539		-
Income (loss) from continuing operations before income taxes		(157,196)		(187,847)		(18,976)		10,545		208,539		(144,935)
Income taxes		-		(30,651)		34,891		8,021		-		12,261
Net income (loss)	$	(157,196)	$	(157,196)	$	(53,867)	$	2,524	$	208,539	$	(157,196)




SUPERIOR ENERGY SERVICES, INC. AND SUBSIDIARIES
Consolidating Statements of Comprehensive Income (Loss)
Nine Months Ended September 30, 2019
(in thousands)
(unaudited)
	Parent		Issuer		Guarantor ‎Subsidiaries		Non- ‎Guarantor ‎Subsidiaries		Eliminations		Consolidated
Net income (loss)	$	(157,196)	$	(157,196)	$	(53,867)	$	2,524	$	208,539	$	(157,196)
Change in cumulative translation adjustment, net of tax		(3,810)		(3,810)		-		(3,810)		7,620		(3,810)
Comprehensive income (loss)	$	(161,006)	$	(161,006)	$	(53,867)	$	(1,286)	$	216,159	$	(161,006)



SUPERIOR ENERGY SERVICES, INC. AND SUBSIDIARIES
Condensed Consolidating Statements of Operations
Nine Months Ended September 30, 2018
(in thousands)
(unaudited)
	Parent		Issuer		Guarantor ‎Subsidiaries		Non- ‎Guarantor ‎Subsidiaries		Eliminations		Consolidated
Revenues	$	-	$	-	$	1,420,368	$	192,976	$	(22,410)	$	1,590,934
Cost of services and rentals (exclusive of depreciation,
depletion, amortization and accretion)		-		(6,382)		1,011,801		134,650		(22,410)		1,117,659
Depreciation, depletion, amortization and
accretion		-		2,974		266,188		34,422		-		303,584
General and administrative expenses		-		70,721		109,083		34,807		-		214,611
Loss from operations		-		(67,313)		33,296		(10,903)		-		(44,920)

Other income (expense):
Interest expense, net		-		(77,778)		2,940		105		-		(74,733)
Other income (expense)		-		(608)		802		(4,588)		-		(4,394)
Equity in losses of consolidated subsidiaries		(107,930)		13,073		(421)		-		95,278		-
Loss from continuing operations before income taxes		(107,930)		(132,626)		36,617		(15,386)		95,278		(124,047)
Income taxes		-		(24,696)		7,185		665		-		(16,846)
Net loss from continuing operations		(107,930)		(107,930)		29,432		(16,051)		95,278		(107,201)
Loss from discontinued operations, net of income taxes		-		-		-		(729)		-		(729)
Net loss	$	(107,930)	$	(107,930)	$	29,432	$	(16,780)	$	95,278	$	(107,930)




SUPERIOR ENERGY SERVICES, INC. AND SUBSIDIARIES
Consolidating Statements of Comprehensive Income (Loss)
Nine Months Ended September 30, 2018
(in thousands)
(unaudited)
	Parent		Issuer		Guarantor ‎Subsidiaries		Non- ‎Guarantor ‎Subsidiaries		Eliminations		Consolidated
Net income (loss)	$	(107,930)	$	(107,930)	$	29,432	$	(16,780)	$	95,278	$	(107,930)
Change in cumulative translation adjustment, net of tax		(3,491)		(3,491)		-		(3,491)		6,982		(3,491)
Comprehensive income (loss)	$	(111,421)	$	(111,421)	$	29,432	$	(20,271)	$	102,260	$	(111,421)



SUPERIOR ENERGY SERVICES, INC. AND SUBSIDIARIES
Condensed Consolidating Statements of Cash Flows
Nine Months Ended September 30, 2019
(in thousands)
(unaudited)
	Parent		Issuer		Guarantor ‎Subsidiaries		Non- ‎Guarantor ‎Subsidiaries		Consolidated
Cash flows from operating activities:
Net cash provided by (used in) operating activities	$	14,295	$	(272,879)	$	350,633	$	24,455	$	116,504

Cash flows from investing activities:
Payments for capital expenditures		-		(5,514)		(94,757)		(5,122)		(105,393)
Proceeds from sales of assets		-		-		90,696		-		90,696
Net cash provided by (used in) investing activities		-		(5,514)		(4,061)		(5,122)		(14,697)

Cash flows from financing activities:
Changes in notes with affiliated companies, net		(13,270)		364,179		(348,883)		(2,026)		-
Other		(1,025)		(31)		-		-		(1,056)
Net cash provided by (used in) financing activities		(14,295)		364,148		(348,883)		(2,026)		(1,056)
Effect of exchange rate changes on cash		-		-		-		(1,857)		(1,857)
Net change in cash, cash equivalents, and restricted cash		-		85,755		(2,311)		15,450		98,894

Cash, cash equivalents, and restricted cash at beginning of period		-		102,224		6,360		55,164		163,748
Cash, cash equivalents, and restricted cash at end of period	$	-	$	187,979	$	4,049	$	70,614	$	262,642



SUPERIOR ENERGY SERVICES, INC. AND SUBSIDIARIES
Condensed Consolidating Statements of Cash Flows
Nine Months Ended September 30, 2018
(in thousands)
(unaudited)
	Parent		Issuer		Guarantor ‎Subsidiaries		Non- ‎Guarantor ‎Subsidiaries		Eliminations		Consolidated
Cash flows from operating activities:
Net cash provided by (used in) operating activities	$	18,290	$	(118,313)	$	174,198	$	23,450	$	(14,269)	$	83,356

Cash flows from investing activities:
Payments for capital expenditures		-		(1,509)		(175,524)		(9,250)		-		(186,283)
Proceeds from sales of assets		-		-		16,226		13,369		-		29,595
Net cash provided by (used in) investing activities		-		(1,509)		(159,298)		4,119		-		(156,688)

Cash flows from financing activities:
Intercompany dividends		-		-		-		(14,269)		14,269		-
Changes in notes with affiliated companies, net		(14,775)		31,469		(26,644)		9,950		-		-
Other		(3,515)		(435)		-		-		-		(3,950)
Net cash provided by (used in) financing activities		(18,290)		31,034		(26,644)		(4,319)		14,269		(3,950)
Effect of exchange rate changes on cash		-		-		-		(1,834)		-		(1,834)
Net change in cash, cash equivalents, and restricted cash		-		(88,788)		(11,744)		21,416		-		(79,116)

Cash, cash equivalents, and restricted cash at beginning of period		-		126,533		20,923		45,027		-		192,483
Cash, cash equivalents, and restricted cash at end of period	$	-	$	37,745	$	9,179	$	66,443	$	-	$	113,367



	Three Months Ended September 30,					Nine Months Ended September 30,
	2019		2018		% Change	2019		2018		% Change
Worldwide Rig Count ⁽¹⁾
U.S.:
Land		894		1,032	-13%		961		1,001	-4%
Offshore		26		19	37%		23		18	28%
Total		920		1,051	-12%		984		1,019	-3%
International ⁽²⁾		1,144		1,003	14%		1,094		980	12%
Worldwide Total		2,064		2,054	0%		2,078		1,999	4%

Commodity Prices (average)
Crude Oil (West Texas Intermediate)	$	56.34	$	69.69	-19%	$	57.04	$	66.93	-15%
Natural Gas (Henry Hub)	$	2.38	$	2.93	-19%	$	2.61	$	2.95	-12%

~~Table Of Contents~~

Three Months Ended September 30,

Nine Months Ended September 30,

2017

2016

% Change

2017

2016

% Change
Worldwide Rig Count (1)

U.S.:

Land

927

461

101%

841

459

83%
Offshore

19

18

6%

20

23

-13%
Total

946

479

97%

861

482

79%

International (2)

947

936

1%

948

965

-2%
Worldwide Total

1,893

1,415

34%

1,809

1,447

25%

Commodity Prices (average)

Crude Oil (West Texas Intermediate)

$
48.18

$
44.85

7%

$
49.30

$
41.35

19%
Natural Gas (Henry Hub)

$
2.95

$
2.88

2%

$
3.01

$
2.34

29%

⁽¹⁾ Estimate of drilling activity as measured by the average active drilling rigs based on Baker Hughes ~~a GE company,~~Co. rig count information.

⁽²⁾ Excludes Canadian Rig Count.

Appeal of New York Stock Exchange Determination to Delist our Common Stock

Shares of our common stock are registered on the New York Stock Exchange (NYSE) and were previously traded on the NYSE under the symbol “SPN.” On September 26, 2019, the NYSE suspended trading in our common stock as a result of our “abnormally low” stock price levels pursuant to Section 802.01D of the NYSE Listed Company Manual, and commenced procedures to delist our common stock. Following the NYSE’s suspension of trading of our common stock, on September 27, 2019, our common stock commenced trading on the OTC Markets under the symbol “SPNV.” On October 4, 2019, our common stock also commenced trading on the OTCQX Best Market, operated by OTC Markets Group Inc., under the same trading symbol “SPNV.” We have appealed the determination by the staff of the NYSE to delist our common stock in accordance with the NYSE rules. We also intend to conduct a reverse stock split to increase the market price of our common stock to enable our common stock to be listed on the NASDAQ National Market if the NYSE appeal is ultimately unsuccessful.

Comparison of the Results of Operations for the Three Months Ended September 30, ~~2017~~2019 and June 30, ~~2017~~2019

For the third quarter of 2019, our revenue was $425.7 million and the net loss was $38.4 million, or a $0.25 loss per share. Included in the results for the three months ended September 30, ~~2017, revenue~~2019 was ~~$506.0~~a pre-tax charge of $9.6 million primarily related to the reduction in value of long-lived assets and a gain from a legal settlement of $5.8 million. This compares to net loss ~~from continuing operations was $57.2~~of $71.1 million, or a ~~$0.37~~$0.46 loss per ~~share. Net loss was $59.0 million, or $0.39 loss per share. This compares to a net loss from continuing operations~~share, for the second quarter of ~~$62.0 million, or a $0.41 loss per share~~2019, on revenue of $436.3 million. Included in the results for the three months ended June 30, ~~2017, on revenue~~2019 was a pre-tax charge of ~~$470.1 million. Net loss for the three months ended June 30, 2017 was $63.8~~$31.4 million or $0.42 loss per share. Worldwide rig count increased by 2% for the three months ended September 30, 2017 from 1,853 rigs for the three months ended June 30, 2017. U.S. land rig count increased by 6% for the three months ended September 30, 2017 from 874 rigs for the three months ended June 30, 2017. The increase in U.S land market drilling activity largely contributedprimarily related to the ~~overall increase~~reduction in ~~our total revenues for the three months ended September 30, 2017.~~ value of intangible assets.

Third quarter ~~2017~~2019 revenue in our Onshore Completion and Workover Services segment ~~remained flat at $248.4 million. All~~decreased 11% sequentially to $145.1 million, as compared to $163.5 million for the second quarter of ~~this segment’s~~2019. The decrease in revenue is ~~derived from the U.S. land market area. On a sequential basis, revenue increases related~~primarily attributable to the ~~6% increase in U.S. land~~disposition of our drilling rig ~~count were partially offset by adverse weather conditions experienced~~service line during the second quarter ~~due to Hurricane Harvey.~~ of 2019.

Third quarter ~~2017~~2019 revenue in our Production Services segment ~~increased 10%~~decreased 4% sequentially to ~~$97.3~~$98.7 million, as compared to ~~$88.6~~$103.0 million for the second quarter of 2019. U.S. offshore revenue decreased 14% to $18.3 million primarily due to a decrease in hydraulic workover and snubbing activities. U.S. land revenue decreased 16% sequentially to $32.6 million primarily due to a decrease in coiled tubing and hydraulic workover and snubbing activities. These decreases were partially offset by an increase in international revenue which increased 12% to $47.8 million, primarily due to an increase in electric line, pressure control and hydraulic workover and snubbing activities.

Third quarter 2019 revenue in our Technical Solutions segment increased 2% sequentially to $70.7 million, as compared to $69.1 million in the second quarter of ~~2017.~~2019. U.S. ~~land~~offshore revenue increased 22% sequentially to ~~$40.1~~$40.8 million due to an increase in demand for

completion tools and products. International revenue increased 2% sequentially to $22.6 million primarily due to an increase in well ~~testing~~control services and ~~coiled tubing activities. International~~completion tools and products. U.S. land revenue ~~increased 14%~~decreased 46% sequentially to ~~$40.7~~$7.3 million, primarily due to ~~an increase in hydraulic workover and snubbing activities. Gulf of Mexico revenue decreased 18% sequentially to $16.5 million, primarily as~~ a ~~result of decreased demand for specialty rentals.~~

Third quarter 2017 revenue in our Technical Solutions segment increased 31% sequentially to $83.1 million, as compared to $63.6 million in the second quarter of 2017. Gulf of Mexico revenue increased 24% sequentially to $52.0 million due to the increased completion tools and products revenue. U.S. land revenue increased 14% sequentially to $9.1 million and international revenue increased 62% sequentially to $22.0 million primarily due to an increasedecrease in demand for well control services.

For the three months ~~ended~~ September 30, ~~2017,~~2019, our revenue was ~~$506.0~~$425.7 million, ~~an increase~~a decrease of ~~$179.8~~$147.4 million or ~~55%~~26%, as compared to the same period in ~~2016. The increase is largely attributable to a 34% increase in the worldwide rig count. The net~~2018. Net loss ~~from continuing operations~~ was ~~$57.2~~$38.4 million, or a ~~$0.37~~$0.25 loss per share. ~~Net loss was $59.0 million, or a $0.39 loss per share. This compares to a net loss from continuing operations~~Included in the results for the three months ended September 30, ~~2016~~2019 was a pre-tax charge of ~~$113.9~~$9.6 million related to the reduction in value of assets. This compares to a net loss for the three months ended September 30, 2018 of $21.8 million, or a ~~$0.75~~$0.14 loss per share. ~~Net loss was $118.0 million, or a $0.78 loss per share.~~

~~Table Of Contents~~

The following table compares our operating results for the three months ended September 30, ~~2017~~2019 and ~~2016~~2018 (in thousands, except percentages). Cost of services and rentals excludes depreciation, depletion, amortization and accretion for each of our business segments.



	Revenue							Cost of Services and Rentals								Revenue							Cost of Services and Rentals
	2017		2016		Change		%	2017		%	2016		%	Change		2019		2018		Change		%	2019		%	2018		%	Change
Drilling Products and
Services	$	77,206	$	59,587	$	17,619	30%	$	31,715	41%	$	26,955	45%	$	4,760	$	111,185	$	99,184	$	12,001	12%	$	38,663	35%	$	37,328	38%	$	1,335
Onshore Completion and
Workover Services		248,405		125,022		123,383	99%		210,103	85%		124,747	100%		85,356		145,105		294,869		(149,764)	-51%		123,617	85%		239,348	81%		(115,731)
Production Services		97,333		77,523		19,810	26%		78,074	80%		66,000	85%		12,074		98,787		105,870		(7,083)	-7%		82,556	84%		84,312	80%		(1,756)
Technical Solutions		83,085		64,093		18,992	30%		48,387	58%		40,466	63%		7,921		70,640		73,145		(2,505)	-3%		49,370	70%		43,401	59%		5,969
Total	$	506,029	$	326,225	$	179,804	55%	$	368,279	73%	$	258,168	79%	$	110,111	$	425,717	$	573,068	$	(147,351)	-26%	$	294,206	69%	$	404,389	71%	$	(110,183)

~~The following provides a discussion of our results on a segment basis:~~Operating Segments:

Revenue from our Drilling Products and Services segment increased ~~30%~~12% to ~~$77.2~~$111.2 million for the three months ended September 30, ~~2017,~~2019, as compared to ~~$59.6~~$99.2 million for the same period in ~~2016.~~2018. Cost of services and rentals as a percentage of revenue decreased to ~~41%~~35% of segment revenue for the three months ended September 30, ~~2017,~~2019, as compared to ~~45%~~38% for the same period in ~~2016.~~2018. Revenue from the ~~Gulf~~U.S. land market areas increased 2% as a result of ~~Mexico~~increases in revenue from rentals of premium drill pipe. Revenue from the U.S. offshore market area increased 3%30% primarily due to ~~increases~~an increase in ~~revenues~~revenue from rentals of premium drill pipe and accommodation units. The revenue from the international market areas decreased 7% primarily due to decreases in revenues from rentals of premium drill pipe and accommodation units. Revenue in the U.S. land market increased 122% as a result of increases in revenues from rentals of premium drill pipe, bottom hole assemblies, ~~and accommodation units,~~ as demand for these rental products increased along with the increase in U.S. ~~land~~offshore rig count. Revenue from the international market areas increased 12%, primarily due to an increase in demand for rentals of premium drill pipe and bottom hole assemblies.

Revenue from our Onshore Completion and Workover Services segment ~~increased 99%~~decreased 51% to ~~$248.4~~$145.1 million for the three months ended September 30, ~~2017,~~2019, as compared to ~~$125.0~~$294.9 million for the same period in ~~2016.~~2018. All of this segment’s revenue is derived from the U.S. land market ~~area, in which rig count increased by 101%.~~area. Cost of services and rentals as a percentage of revenue ~~decreased~~increased to 85% of segment revenue for the three months ended September 30, ~~2017,~~2019, as compared ~~to100%~~to 81% for the same period in ~~2016, primarily due to improved pricing and efficiencies due to higher activity levels, partially offset by periodic delays caused by supply chain tightness and general oilfield inefficiencies.~~2018. The ~~increase~~decrease in revenue is primarily attributable to ~~an increase in~~decreased activity in our pressure pumping ~~business.~~and well services businesses. During the ~~three months ended September 30, 2017,~~first half of 2019, the overcapacity of the available pressure pumping horsepower in the market contributed to the downward pressure on pricing and utilization for our services. In response to the unfavorable market conditions, we ~~recorded $1.8 million~~have reduced the number of pressure pumping fleets deployed in ~~reduction~~the field and curtailed our operations. The decrease in ~~value~~revenue is also attributable to the disposition of ~~assets.~~our drilling rig service line during the second quarter of 2019.

Revenue from our Production Services segment for the three months ended September 30, ~~2017 increased~~2019 decreased by ~~26%~~7% to ~~$97.3~~$98.8 million, as compared to ~~$77.6~~$105.9 million for the same period in ~~2016.~~2018. Cost of services and rentals as a percentage of revenue ~~decreased~~increased to ~~80%~~84% of segment revenue for the three months ended September 30, ~~2017,~~2019, as compared to ~~85%~~80% for the same period in ~~2016.~~2018. Revenue from the U.S. land market area ~~increased 108%~~decreased 32%, primarily due to ~~increased activity~~a decrease in coiled tubing ~~and well testing services. The revenue~~activities. Revenue from the international market

areas increased 2%16%, primarily due to an increase in hydraulic workover and snubbing ~~offset by decreased activity in coiled tubing and well testing services.~~activities. Revenue ~~derived~~ from the ~~Gulf of Mexico~~U.S. offshore market area ~~decreased~~increased 9%, ~~as compared to the same period in 2016,~~ primarily due to ~~a decrease~~an increase in ~~slickline services~~hydraulic workover and ~~specialty rentals.~~ snubbing activities.

Technical Solutions Segment

Revenue from our Technical Solutions segment ~~increased 30%~~decreased 3% to ~~$83.1~~$70.6 million for the three months ended September 30, ~~2017,~~2019, as compared to ~~$64.0~~$73.1 million for the same period in ~~2016.~~2018. Cost of services and rentals as a percentage of revenue ~~decreased~~increased to ~~58%~~70% of segment revenue for the three months ended September 30, ~~2017,~~2019, as compared to ~~63%~~59% for the same period in 2016. Revenue derived from the Gulf of Mexico market area increased 59%, primarily due to an increase in completion tools and products revenue, offset by a decrease in subsea intervention activities.2018. Revenue from the U.S. land market area decreased ~~15%~~14%, primarily due to a decrease in demand for ~~completion tools and products.~~well control services. Revenue from the international market areas increased 6%30%, primarily due to an increase in demand for well control services. Revenue derived from the U.S. offshore market area decreased 14%, primarily due to a decrease in demand for subsea intervention services. During the three months ended September 30, ~~2017,~~2019, we recorded ~~$8.1~~$7.0 million in reduction in value of assets.

~~Table Of Contents~~

Depreciation, Depletion, Amortization and Accretion

Depreciation, depletion, amortization and accretion decreased to ~~$108.8~~$67.4 million during the three months ended September 30, ~~2017~~2019 from ~~$123.3~~$99.9 million during the same period in ~~2016.~~2018. Depreciation and amortization expense decreased for our Drilling Products and Services segment by ~~$5.9~~$7.7 million, or ~~16%~~27.5%; for our Onshore Completion and Workover Services segment by ~~$2.5~~$18.2 million, or 5%38.5%; for our Production Services segment by ~~$3.5~~$5.0 million, or ~~15%~~29.3%; and for our Technical Solutions segment by ~~$2.6~~$1.4 million, or ~~24%~~22%. Depreciation expense for Corporate and Other remained flat. The decrease in depreciation, depletion, amortization and accretion is primarily due to assets becoming fully ~~depreciated and reduced levels of capital expenditures.~~depreciated.

~~General and Administrative Expenses~~

General and administrative expenses decreased 14% to $74.4 million for the three months ended September 30, 2017 as compared to $86.7 million for the same period in 2016. The decrease is primarily attributable to significant cost reduction initiatives implemented during 2016. These cost reduction initiatives resulted in significantly lower expenses for salaries and wages, other employee-related expenses and infrastructure-related expenses.

Reduction in Value of Assets

The reduction in value of assets recorded during the three months ended September 30, ~~2017 included $9.9~~2019 was $9.6 million primarily related to the reduction in value of long-lived assets within the ~~Onshore Completion and Workover Services and~~ Technical Solutions ~~segments.~~segment.

Income Taxes

Our effective income tax rate for the three months ended September 30, ~~2017~~2019 was ~~33%~~a 7% expense compared to a ~~29% effective income tax rate~~13% benefit for the same period in ~~2016.~~2018. The ~~difference~~change in the effective income tax rate ~~from~~was primarily impacted by a deferred tax assets valuation allowance recorded during the ~~statutory rate is primarily due to the reduction in value of goodwill in 2016, which is non-deductible for income tax purposes.~~three months ended September 30, 2019.

For the nine months ended September 30, ~~2017,~~2019, our revenue was ~~$1,377.0~~$1,329.2 million, ~~an increase~~a decrease of ~~$281.4~~$261.7 million or ~~26%~~16%, as compared to the same period in ~~2016. The increase is largely attributable to a 25% increase in the worldwide rig count. The net~~2018. Net loss ~~from continuing operations~~ was ~~$208.9~~$157.2 million, or a ~~$1.37 loss per share. Net loss was $214.5 million, or a $1.41~~$1.01 loss per share. This compares to a net loss ~~from continuing operations~~ for the nine months ended September 30, ~~2016~~2018 of ~~$667.1~~$107.9 million, or a ~~$4.40~~$0.70 loss per share. ~~Net loss was $675.7 million, or a $4.46 loss per share~~Included in the results for the nine months ended September 30, ~~2016.~~2019 was a pre-tax charge of $41.0 million related to the reduction in value of assets.

The following table compares our operating results for the nine months ended September 30, ~~2017~~2019 and ~~2016~~September 30, 2018 (in thousands, except percentages). Cost of services and rentals excludes depreciation, depletion, amortization and accretion for each of our business segments.


	Revenue							Cost of Services and Rentals
	2019		2018		Change		%	2019		%	2018		%	Change

Drilling Products and
Services	$	312,946	$	278,419	$	34,527	12%	$	118,732	38%	$	108,997	39%	$	9,735
Onshore Completion and
Workover Services		513,638		802,600		(288,962)	-36%		436,400	85%		630,205	79%		(193,805)
Production Services		305,239		308,591		(3,352)	-1%		240,855	79%		255,377	83%		(14,522)
Technical Solutions		197,385		201,324		(3,939)	-2%		124,810	63%		123,080	61%		1,730
Total	$	1,329,208	$	1,590,934	$	(261,726)	-16%	$	920,797	69%	$	1,117,659	70%	$	(196,862)

Revenue

Cost of Services and Rentals

2017

2016

Change

%

2017

%

2016

%

Change

Drilling Products and

Services
$
214,464

$
224,213

$
(9,749)

-4%

$
94,191

44%

$
92,487

41%

$
1,704
Onshore Completion and

Workover Services

702,463

373,387

329,076

88%

610,154

87%

363,447

97%

246,707
Production Services

254,544

267,389

(12,845)

-5%

210,778

83%

210,823

79%

(45)
Technical Solutions

205,562

230,640

(25,078)

-11%

126,944

62%

135,385

59%

(8,441)
Total
$
1,377,033

$
1,095,629

$
281,404

26%

$
1,042,067

76%

$
802,142

73%

$
239,925

~~The following provides a discussion of our results on a segment basis:~~

Operating Segments:

Drilling Products and Services Segment

Revenue from our Drilling Products and Services segment ~~decreased 4%~~increased 12% to ~~$214.5~~$312.9 million for the nine months ended September 30, ~~2017,~~2019, as compared to ~~$224.2~~$278.4 million for the same period in ~~2016.~~2018. Cost of services and rentals as a percentage of revenue ~~increased~~decreased to ~~44%~~38% of segment revenue for the nine months ended September 30, ~~2017,~~2019, as compared to ~~41%~~39% for the same period in ~~2016, primarily due to a decrease in revenue.~~2018. Revenue from the Gulf of Mexico market area decreased 27% and revenue from the international market areas decreased 25%. The decline in revenue in these market areas is primarily attributable to decreases in revenues from rentals of

~~Table Of Contents~~

premium drill pipe, bottom hole assemblies and accommodation units, primarily driven by a decrease in offshore and international rig counts. These decreases were partially offset by a 78% increase in revenue generated in the U.S. land market ~~area. The revenue in the U.S. land market area~~areas increased ~~primarily~~10% as a result of increases in ~~revenues~~revenue from rentals of premium drill pipe and bottom hole assemblies. Revenue from the U.S. offshore market area increased 30% primarily due to an increase in revenue from rentals of premium drill pipe and bottom hole assemblies, ~~and accommodation units,~~ as demand for these rental products increased along with the increase in U.S. ~~land~~offshore rig count. ~~During~~Revenue from the ~~nine months ended September 30, 2016, we recorded $47.7 million~~international market areas increased 2% due to an increase in ~~reduction in value~~rentals of ~~assets.~~ premium drill pipe and bottom hole assemblies.

Onshore Completion and Workover Services Segment

Revenue from our Onshore Completion and Workover Services segment ~~increased 88%~~decreased 36% to ~~$702.4~~$513.6 million for the nine months ended September 30, ~~2017,~~2019 months, as compared to ~~$373.4~~$802.6 million for the same period in ~~2016.~~2018. All of this segment’s revenue is derived from the U.S. land market ~~area, in which rig count was up 83%.~~area. Cost of services and rentals as a percentage of ~~revenues decreased~~revenue increased to ~~87%~~85% of segment revenue for the nine months ended September 30, ~~2017,~~2019, as compared to ~~97%~~79% for the same period in ~~2016, primarily due to improved pricing and efficiencies due to higher activity levels, partially offset by periodic delays caused by supply chain tightness and general oilfield inefficiencies.~~2018. The ~~increase~~decrease in revenue is primarily attributable to ~~an increase in~~decreased activity in our pressure pumping ~~business.~~and well services businesses. During the first half of 2019, the overcapacity of the available pressure pumping horsepower in the market contributed to the downward pressure on pricing and utilization for our services. In response to the unfavorable market conditions, we have reduced the number of pressure pumping fleets deployed in the field and curtailed our operations. The decrease in revenue is also attributable to the disposition of our drilling rig service line during the second quarter of 2019. During the nine months ended September 30, ~~2017,~~2019, we recorded ~~$1.8~~$31.9 million in reduction in value of ~~assets, as compared to $188.7 million recorded for the same period in 2016.~~ assets.

Production Services Segment

Revenue from our Production Services segment for the nine months ended September 30, ~~2017~~2019 decreased by 5%1% to ~~$254.5~~$305.2 million, as compared to ~~$267.4~~$308.6 million for the same period in ~~2016.~~2018. Cost of services and rentals as a percentage of revenue decreased to 79% of segment revenue for the nine months ended September 30, 2019, as compared to 83% for the same period in 2018. Revenue from the U.S. land market area decreased 24%, primarily due to a decrease in coiled tubing activities. Revenue from the international market areas increased 19%, primarily due to an increase in hydraulic workover and snubbing activities. Revenue from the U.S. offshore market area increased 23%, primarily due to an increase in hydraulic workover and snubbing and pressure control activities.

Technical Solutions Segment

Revenue from our Technical Solutions segment decreased 2% to $197.4 million for the nine months ended September 30, 2019, as compared to $201.3 million for the same period in 2018. Cost of services and rentals as a percentage of revenue increased to ~~83%~~63% of segment revenue for the nine months ended September 30, ~~2017,~~2019, as compared to ~~79%~~61% for the same period in 2016, primarily due to a decrease in revenue. Revenue derived from the Gulf of Mexico market area decreased 13%, primarily due to decreased demand for specialty rentals. Revenue from the international market areas decreased 25%, primarily due to decreased activity from hydraulic workover and snubbing in the Latin America and Asia Pacific regions and well testing and coiled tubing services in the Latin America region. These decreases were partially offset by a 43% increase in revenue generated from the U.S. land market area. The increase in revenue in the U.S. land market area is primarily due to an increase in coiled tubing and well testing services driven primarily by the increase in U.S. land rig count. During the nine months ended September 30, 2016, we recorded $226.1 million in reduction in value of assets.

~~Technical Solutions Segment~~

Revenue from our Technical Solutions segment decreased 11% to $205.6 million for the nine months ended September 30, 2017, as compared to $230.6 million for the same period in 2016. Cost of services and rentals as a percentage of revenue increased to 62% of segment revenue for the nine months ended September 30, 2017, as compared to 59% for the same period in 2016. Revenue derived from the Gulf of Mexico market area decreased 5%, primarily due to a decrease in demand for subsea intervention services, partially offset by an increase in demand for completion tools and products.2018. Revenue from the U.S. land market area ~~decreased 13% and revenue~~increased 41%, primarily due to an increase in well control services. Revenue from the international market areas increased 20%, primarily due to an increase in demand for subsea intervention services and completion tools and products. Revenue derived from the U.S. offshore market area decreased ~~22%~~21%, primarily due to a decrease in demand for completion tools and products and ~~well control~~subsea intervention services. During the nine months ended September 30, ~~2017,~~2019, we recorded ~~$8.1~~$7.0 million in reduction in value of assets.

Depreciation, Depletion, Amortization and Accretion

Depreciation, depletion, amortization and accretion decreased to ~~$331.2~~$225.0 million during the nine months ended September 30, ~~2017~~2019 from ~~$392.0~~$303.6 million during the same period in ~~2016.~~2018. Depreciation and amortization expense decreased for our Drilling Products and Services segment by ~~$25.0~~$21.4 million, or ~~20%~~25%; for our Onshore Completion and Workover Services segment by ~~$14.8~~$42.2 million, or 9%30%; for our Production Services segment by ~~$12.0~~$11.3 million, or ~~17%,~~22%; and for our Technical Solutions segment by ~~$9.0~~$3.1 million, or ~~26%~~15%. Depreciation expense for Corporate and Other remained flat. The decrease in depreciation, depletion, amortization and accretion is primarily due to assets becoming fully depreciated and ~~reduced levels~~impairments of ~~capital expenditures.~~long-lived assets recorded during 2018.

~~General and Administrative Expenses~~

General and administrative expenses decreased 16% to $226.6 million for the nine months ended September 30, 2017 as compared to $270.5 million for the same period in 2016. The decrease is primarily attributable to significant cost reduction initiatives implemented during 2016. These cost reduction initiatives resulted in significantly lower expenses for salaries and wages, other employee-related expenses and infrastructure-related expenses.

Reduction in Value of Assets

The reduction in value of assets recorded during the ~~three~~nine months ended September 30, ~~2017~~2019 included ~~$9.9~~$41.0 million related to the reduction in value of long-lived assets within the Onshore Completion and Workover ~~Services~~ and Technical Solutions segments. Reduction in value of assets for the nine months ended September 30, 2016 was $462.5 million, which included $190.5 million related to the Production Services segment goodwill impairment and $140.0 million related to the Onshore Completion and Workover Services

segment goodwill impairment. In addition, the reduction in value of assets included $132.0 million related to reduction in value of long-lived assets within the Drilling Products and Services, Onshore Completion and Workover Services and Production Services segments.

Other income/expense for the nine months ended September 30, 2017 was $2.5 million loss as compared to $22.1 million income for the same period in 2016. The decrease in other income is primarily attributable to foreign currency fluctuations.

Our effective income tax rate for the nine months ended September 30, ~~2017~~2019 was ~~33%~~a 8% expense compared to ~~24% effective income tax rate~~a 13% benefit for the same period in ~~2016.~~2018. The ~~difference~~change in the effective income tax rate ~~from~~was primarily impacted by a deferred tax assets valuation allowance recorded during the ~~statutory rate is primarily due to the reduction in value of goodwill in 2016, which is non-deductible for income tax purposes.~~nine months ended September 30, 2019.

For the nine months ended September 30, ~~2017,~~2019, we generated net cash from operating activities of ~~$55.4~~$116.5 million, as compared to ~~$146.7~~$83.4 million of cash generated by operating activities in the same period of ~~2016.~~2018. Our primary liquidity needs during the next twelve months are for working capital and capital expenditures. Our primary sources of liquidity are cash flows from operations and available borrowings under our credit facility. We had cash and cash equivalents of ~~$167.0~~$259.9 million at September 30, ~~2017,~~2019, compared to ~~$187.6~~$158.1 million at December 31, ~~2016.~~ At September 30, 2017, approximately $39.9 million of our cash balance was held outside the United States. Cash balances held in foreign jurisdictions could be repatriated to the United States, however, they would be subject to federal income taxes, less applicable foreign tax credits. We have not provided U.S. income tax expense on earnings of our foreign subsidiaries because we expect to reinvest the undistributed earnings indefinitely. 2018.

We spent ~~$109.6~~$105.4 million of cash on capital expenditures during the nine months ended September 30, ~~2017. Approximately $15.9~~2019. Capital expenditures of $48.2 million ~~was used~~primarily related to ~~expand~~the expansion and ~~maintain~~maintenance of our equipment inventory at our Drilling Products and Services ~~segment’s equipment inventory,~~segment and ~~approximately $74.9million, $8.3million and $10.5million was spent~~the remaining capital expenditures related to ~~expand and maintain the asset bases~~ongoing maintenance of our ~~Onshore Completion~~equipment across all other segments. During the remainder of 2019, we intend to limit capital spending within our operational cash flow levels to generate free cash flow and ~~Workover Services, Production Services and Technical Solutions segments, respectively.~~ allocate capital to businesses with higher returns on invested capital.

We ~~expect to spend approximately $150 million on capital expenditures during 2017.~~

~~Subsequent to the quarter end, the Company extended its~~have an asset-based revolving credit facility ~~maturity to~~which matures in October ~~2022 with a $300 million asset-based revolving credit facility.~~2022. The borrowing base under the credit facility ~~will be~~is calculated asbased on a formula referencing the ~~Company’s~~borrower’s and the subsidiary guarantors’ eligible accounts receivable, eligible inventory and eligible premium rental drill pipe less reserves. Availability under the credit facility ~~will be~~is the lesser of (i) the commitments, (ii) the borrowing base and (iii) the highest principal amount permitted to be secured under the indenture governing ~~7 1/8%~~the 7.125% senior unsecured notes due 2021. On September 20, 2019, we amended its credit facility to increase the letter of credit capacity from $100.0 million to $150.0 million. At ~~October 20, 2017, availability~~September 30, 2019, the borrowing base was ~~$285.6~~$229.6 million and ~~may increase or decrease as a result~~we had $83.1 million of ~~among other things, changes to~~letters of credit outstanding that reduced our borrowing availability under the ~~Company’s consolidated tangible assets.~~revolving credit facility. The credit agreement contains various covenants, including, but not limited to, limitations on the incurrence of indebtedness, permitted investments, liens on assets, making distributions, transactions with affiliates, merger, consolidations, dispositions of assets and other provisions customary in similar types of agreements. At September 30, ~~2017,~~2019, we were in compliance with all such covenants.

~~In August 2017, the Company issued~~We have outstanding $500 million of 7 3/4% unsecured senior notes due September 2024 in a private placement conducted pursuant to Rule 144A and Regulation S under the Securities Act. Costs associated with the issuance of these notes were $8.9 million which will be amortized over the term of the notes. The Company used the net proceeds of the notes offering and cash on hand to redeem all of the outstanding $500 million ~~6 3/8%~~ 7.75% senior unsecured notes due ~~2019. In connection with~~September 2024. The indenture governing the ~~redemption of the~~7.75% senior unsecured notes due ~~May 2019, the Company recorded $2.6 million for the write-off of unamortized debt issuance costs.~~ ~~The indenture governing the 7 3/4% senior notes~~2024 requires semi-annual interest payments ~~beginning~~ on March 15 ~~2018, until~~and September 15 of each year through the maturity date of September 15, 2024. The indenture contains customary events of default and requires that we satisfy various covenants. At September 30, ~~2017,~~2019, we were in compliance with all such covenants.

We also have outstanding $800 million of ~~7 1/8%~~7.125% senior unsecured ~~senior~~ notes due December 2021. The indenture governing the ~~7 1/8%~~7.125% senior notes due 2021 requires semi-annual interest payments on June 15 and December 15of each year through the maturity date of December 15, 2021. The indenture contains customary events of default and requires that we satisfy various covenants. At September 30, ~~2017,~~2019, we were in compliance with all such covenants.

At September 30, ~~2017,~~2019, we had no off-balance sheet arrangements and no hedging contracts.

See Part I, Item 1, “Financial Statements – Note 147 – ~~New Accounting Pronouncements.~~Leases.”

We are exposed to market risks associated with foreign currency fluctuations and changes in interest rates. A discussion of our market risk exposure in financial instruments follows.

~~Table Of Contents~~

PART II. OTHER INFORMATION

Item 1. Legal Proceedings

From time to time, we are involved in various legal actions incidental to our business. The outcome of these proceedings is not predictable. However, based on current circumstances, we do not believe that the ultimate resolution of these proceedings, after considering available defenses and any insurance coverage or indemnification rights, will have a material adverse effect on our financial position, results of operations or cash flows. See Part I, Item 1, “Financial Statements – Note 14 – Contingencies.”

Item 1A. Risk Factors

For information regarding certain risks relating to our operations, any of which could negatively affect our business, financial condition, operating results or prospects, see Part I, Item 1A, “Risk Factors” of our Annual Report on Form 10-K for the year ended December 31, ~~2016.~~2018. There have been no material changes to the risk factors previously disclosed under the caption “Risk Factors” in our Annual Report, except as set forth below.

We have received notice of the NYSE’s intention to delist our common stock, which could materially impair the liquidity and value of our common stock.

On September 26, 2019, we were notified by the NYSE that due to “abnormally low” trading price levels, pursuant to Section 802.01D of the NYSE Listed Company Manual, the NYSE had suspended trading in the Company’s common stock effective immediately and has determined to commence delisting proceedings to delist our common stock. While we have appealed the determination by the staff of the NYSE to delist the Company’s common stock and intend to conduct a reverse stock split to increase the market price of our common stock to enable our common stock to be listed on the NASDAQ National Market if the NYSE appeal is ultimately unsuccessful, we can provide no assurance that these efforts will be successful.

On September 27, 2019, our common stock commenced trading on the OTC Markets under the symbol “SPNV.” In addition, as of October 4, 2019, our common stock commenced trading on the OTCQX Best Market, operated by the OTC Markets Group Inc., (together with the OTC Markets, the OTC) under the same trading symbol “SPNV.” The OTC is a significantly more limited market than the NYSE, and quotation on the OTC may result in a less liquid market available for existing and potential stockholders to trade the common stock and could further depress the trading price of our common stock. We can provide no assurance that our common stock will continue to trade on this market, whether broker-dealers will continue to provide public quotes of our common stock on this market or whether the trading volume of our common stock will be sufficient to provide for an efficient trading market.

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

~~Issuer Purchases of Equity Securities~~

Period

(a)
Total Number
of Shares
Purchased (1)

(b)
Average Price Paid per Share

July 1 - 31, 2017

2,644

$
9.92

August 1 - 31, 2017

197

$
10.51

September 1 - 30, 2017

-

$
-

Total

2,841

$
9.96

None.

~~(1) Through our stock incentive plans, 2,841 shares were delivered to us by our employees to satisfy their tax withholding requirements upon vesting of restricted stock units.~~

Nine Months Ended September 30, 2019

Impairment

Fair Value

Long-lived assets

(a) The following exhibits are filed with this Form 10-Q:


Exhibit No.	Description
3.1	Restated Certificate of Incorporation of Superior Energy Services, Inc. (incorporated herein by reference to Exhibit 3.1 to Superior Energy Services, Inc.’s Quarterly Report on Form 10-Q filed August 7, 2013 (File No. 001-34037)).
3.2	Amended and Restated Bylaws of Superior Energy Services, Inc. (as amended through March 7, 2012) (incorporated herein by reference to Exhibit 3.1 to Superior Energy Services, Inc.’s Current Report on Form 8-K filed March 12, 2012 (File No. 001-34037))
~~31.1~~10.1*	Second Amendment to Fifth Amended and Restated Credit Agreement, dated September 20, 2019, among SESI, L.L.C., Superior Energy Services, Inc., the guarantors party thereto, JPMorgan Chase Bank N.A., as administrative agent, and the lenders party thereto.
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.



		Page
PART I.	FINANCIAL INFORMATION

Item 1.	Condensed Consolidated Financial Statements and Notes	2 3
Item 2.	Management’s Discussion and Analysis of Financial Condition and Results of Operations	2 25
Item 3.	Quantitative and Qualitative Disclosures about Market Risk	2
~~Item 4.~~	~~Controls and Procedures~~	2
		30
~~PART II.~~Item 4.	~~OTHER INFORMATION~~Controls and Procedures	31

PART II.	OTHER INFORMATION

Item ~~1A.~~1	~~Risk Factors~~Legal Proceedings	2 32
Item 2.1A.	~~Unregistered Sales of Equity Securities and Use of Proceeds~~Risk Factors	2 32
Item 6.	Exhibits	2 32



	September 30, 2017		December 31, 2016		September 30, 2019		December 31, 2018
Finished goods	$	59,263	$	49,888	$	62,301	$	54,144
Raw materials		13,360		17,948		16,758		16,795
Work-in-process		5,289		5,214		9,504		5,544
Supplies and consumables		29,748		30,029		34,957		30,822
Total	$	107,660	$	103,079	$	123,520	$	107,305



	September 30, 2017		December 31, 2016			September 30, 2019		December 31, 2018
	Long-term		Long-term		Stated Interest Rate (%)	Long-term
Senior Notes due September 2024	$	500,000	$	-
Senior Notes due December 2021		800,000		800,000
Senior Notes due May 2019		-		500,000
Senior unsecured notes due September 2024					7.750	$	500,000	$	500,000
Senior unsecured notes due December 2021					7.125		800,000		800,000
Total debt, gross		1,300,000		1,300,000			1,300,000		1,300,000
Unamortized debt issuance costs		(18,286)		(15,400)			(14,245)		(17,079)
Total debt, net	$	1,281,714	$	1,284,600		$	1,285,755	$	1,282,921



	September 30, 2019
Operating lease ROU assets	$	96,190

Accrued expenses	$	26,368
Operating lease liabilities		76,255
Total operating lease liabilities	$	102,623

Cash paid for operating leases	$	26,242
ROU assets obtained in exchange for lease obligations	$	21,045

Weighted average remaining lease term		9 years
Weighted average discount rate		6.75%



Remainder of 2019	$ 8,976
2020	30,144
2021	22,142
2022	13,955
2023	10,258
Thereafter	54,745
Total lease payments	140,220
Less imputed interest	(37,597)
Total	$ 102,623



SUPERIOR ENERGY SERVICES, INC. AND SUBSIDIARIES
Condensed Consolidated Statements of Operations
Three and Nine Months Ended September 30, 2017 and 2016
(in thousands, except per share data)
(unaudited)
	Three Months				Nine Months
	2017		2016		2017		2016
Revenues:
Services	$	431,874	$	266,093	$	1,170,455	$	873,985
Rentals		74,155		60,132		206,578		221,644
Total revenues		506,029		326,225		1,377,033		1,095,629
Costs and expenses:
Cost of services (exclusive of depreciation, depletion, amortization and accretion)		340,401		223,766		959,630		703,061
Cost of rentals (exclusive of depreciation, depletion, amortization and accretion)		27,878		34,402		82,437		99,081
Depreciation, depletion, amortization and accretion - services		92,814		100,579		281,097		312,713
Depreciation, depletion, amortization and accretion - rentals		15,937		22,729		50,054		79,304
General and administrative expenses		74,372		86,743		226,573		270,467
Reduction in value of assets		9,953		-		9,953		462,461
Loss from operations		(55,326)		(141,994)		(232,711)		(831,458)

Other income (expense):
Interest expense, net		(29,096)		(21,771)		(76,679)		(68,325)
Other income (expense)		(970)		3,667		(2,477)		22,103
Loss from continuing operations before income taxes		(85,392)		(160,098)		(311,867)		(877,680)
Income taxes		(28,203)		(46,185)		(102,978)		(210,599)
Net loss from continuing operations		(57,189)		(113,913)		(208,889)		(667,081)
Loss from discontinued operations, net of income tax		(1,860)		(4,085)		(5,625)		(8,577)
Net loss	$	(59,049)	$	(117,998)	$	(214,514)	$	(675,658)

Loss per share information:
Basic and diluted:
Net loss from continuing operations	$	(0.37)	$	(0.75)	$	(1.37)	$	(4.40)
Loss from discontinued operations		(0.02)		(0.03)		(0.04)		(0.06)
Net loss	$	(0.39)	$	(0.78)	$	(1.41)	$	(4.46)

Cash dividends declared per share	$	-	$	-	$	-		0.08

Weighted average common shares used in computing loss per share:
Basic and diluted		153,082		151,707		152,624		151,337


SUPERIOR ENERGY SERVICES, INC. AND SUBSIDIARIES
Consolidated Statements of Comprehensive Loss
Three and Nine Months Ended September 30, 2017 and 2016
(in thousands)
	Three Months				Nine Months
	2017		2016		2017		2016
Net loss	$	(59,049)	$	(117,998)	$	(214,514)	$	(675,658)
Change in cumulative translation adjustment, net of tax		3,629		(4,693)		11,375		(26,616)
Comprehensive loss	$	(55,420)	$	(122,691)	$	(203,139)	$	(702,274)

See accompanying notes to condensed consolidated financial statements.


SUPERIOR ENERGY SERVICES, INC. AND SUBSIDIARIES
Consolidated Statements of Cash Flows
Nine Months Ended September 30, 2017 and 2016
(in thousands)
(unaudited)
	2017		2016
Cash flows from operating activities:
Net loss	$	(214,514)	$	(675,658)
Adjustments to reconcile net loss to net cash provided by operating activities:
Depreciation, depletion, amortization and accretion		331,151		392,017
Deferred income taxes		(92,999)		(186,232)
Reduction in value of assets		9,953		462,461
Stock based compensation expense		29,780		34,167
Other reconciling items, net		(2,408)		(10,392)
Changes in operating assets and liabilities:
Accounts receivable		(116,989)		155,717
Inventory and other current assets		(8,510)		(5,028)
Accounts payable		24,821		(8,692)
Accrued expenses		7,182		(41,617)
Income taxes		100,969		(4,515)
Other, net		(13,028)		34,447
Net cash provided by operating activities		55,408		146,675

Cash flows from investing activities:
Payments for capital expenditures		(109,635)		(74,071)
Decrease in cash held in escrow		30,600		-
Other		15,647		6,238
Net cash used in investing activities		(63,388)		(67,833)

Cash flows from financing activities:
Proceeds from issuance of long-term debt		500,000		-
Principal payments on long-term debt		(500,000)		(337,576)
Payment of debt issuance costs		(9,091)		(2,675)
Proceeds from revolving line of credit		-		325,123
Payments on revolving line of credit		-		(325,123)
Cash dividends		-		(12,111)
Other		(6,789)		(5,410)
Net cash used in financing activities		(15,880)		(357,772)
Effect of exchange rate changes on cash		3,294		(6,932)
Net decrease in cash and cash equivalents		(20,566)		(285,862)
Cash and cash equivalents at beginning of period		187,591		564,017
Cash and cash equivalents at end of period	$	167,025	$	278,155

See accompanying notes to condensed consolidated financial statements.


Effect of derivative asset	Location of (gain) loss recognized	Three Months Ended September 30, 2016		Nine Months Ended September 30, 2016
Interest rate swap	Interest expense, net	$	1,791	$	(4,329)
Hedged item - debt	Interest expense, net		(1,805)		365
		$	(14)	$	(3,964)




	Fair Value at September 30, 2017
	Level 1		Level 2		Level 3		Total
Intangible and other long-term assets, net
Non-qualified deferred compensation assets	$	369	$	13,341	$	-	$	13,710
Accounts payable
Non-qualified deferred compensation liabilities	$	-	$	1,157	$	-	$	1,157
Other long-term liabilities
Non-qualified deferred compensation liabilities	$	-	$	20,250	$	-	$	20,250

	Fair Value at December 31, 2016
	Level 1		Level 2		Level 3		Total
Intangible and other long-term assets, net
Non-qualified deferred compensation assets	$	368	$	11,992	$	-	$	12,360
Interest rate swaps	$	-	$	8,579	$	-	$	8,579
Accounts payable
Non-qualified deferred compensation liabilities	$	-	$	1,115	$	-	$	1,115
Other long-term liabilities
Non-qualified deferred compensation liabilities	$	-	$	18,489	$	-	$	18,489



Nine Months Ended September 30, 2017

			Onshore
	Drilling		Completion
	Products and		and Workover		Production		Technical				Consolidated
	Services		Services		Services		Solutions		Unallocated		Total
Revenues	$	214,464	$	702,463	$	254,544	$	205,562	$	-	$	1,377,033
Cost of services and rentals (exclusive of
depreciation, depletion, amortization and accretion)		94,191		610,154		210,778		126,944		-		1,042,067
Depreciation, depletion, amortization and accretion		100,859		144,090		60,905		25,297		-		331,151
General and administrative expenses		50,576		73,522		50,113		52,362		-		226,573
Reduction in value of assets		-		1,838		-		8,115		-		9,953
Loss from operations		(31,162)		(127,141)		(67,252)		(7,156)		-		(232,711)
Interest income (expense), net		-		-		-		2,627		(79,306)		(76,679)
Other expense		-		-		-		-		(2,477)		(2,477)
Loss from continuing operations
before income taxes	$	(31,162)	$	(127,141)	$	(67,252)	$	(4,529)	$	(81,783)	$	(311,867)




~~Reduction in value of goodwill~~	$	~~330,500~~
~~Reduction in value of long-lived assets~~		~~105,859~~
~~Retirements of long-lived assets~~		~~26,102~~
~~Total reduction in value of assets~~	$	~~462,461~~




	September 30, 2017		December 31, 2016
Current assets	$	330	$	158
Property, plant and equipment, net		27,000		27,000
Total assets	$	27,330	$	27,158
Current liabilities	$	8,755	$	8,653

(a)	Evaluation of disclosure controls and procedures. As of the end of the period covered by this quarterly report on Form 10-Q, our Chief Executive Officer and Chief Financial Officer have concluded, based on their evaluation, that our disclosure controls and procedures (as defined in Rule 13a-15(e) under the Securities Exchange Act of 1934) are effective for ensuring that information required to be disclosed by us in the reports that we file or submit under the Securities Exchange Act of 1934 is accumulated and communicated to management, including our Chief Executive Officer and Chief Financial Officer, as appropriate, to allow timely decisions regarding required disclosures and is recorded, processed, summarized and reported within the time periods specified in the SEC’s rules and forms.

(b)	Changes in internal control. Effective January 1, 2019, we adopted Topic 842, Leases. The adoption of this standard resulted in recording of operating lease assets and operating lease liabilities, with no related impact on our condensed consolidated statement of equity or condensed consolidated statement of operations for the nine months ended September 30, 2019. In connection with the adoption of the new standard, we implemented internal controls to ensure we adequately evaluated our contracts and properly assessed the impact of the new accounting standard. There ~~has been~~were no ~~change~~other changes in our internal control over financial reporting that occurred during the three months ended September 30, ~~2017~~2019, that has materially affected, or is reasonably likely to materially affect, our internal control over financial reporting.



Period	(a) Total Number of Shares Purchased (1)	(b) Average Price Paid per Share
July 1 - 31, 2017	2,644	$	9.92
August 1 - 31, 2017	197	$	10.51
September 1 - 30, 2017	-	$	-
Total	2,841	$	9.96


101.INS*	XBRL Instance Document
101.SCH*	XBRL Taxonomy Extension Schema Document
101.CAL*	XBRL Taxonomy Extension Calculation Linkbase Document
101.LAB*	XBRL Taxonomy Extension Label Linkbase Document
101.PRE*	XBRL Taxonomy Extension Presentation Linkbase Document
101.DEF*	XBRL Taxonomy Extension Definition Linkbase Document


~~Date:~~	~~October 25, 2017~~	~~By:~~	~~/s/ Robert S. Taylor~~
		By:	~~Robert S. Taylor~~/s/ Westervelt T. Ballard, Jr.
			Westervelt T. Ballard, Jr. Executive Vice President, Chief Financial Officer and Treasurer ~~and~~
			~~Chief Financial Officer~~
			~~(Principal Financial and Accounting Officer)~~
		By:	/s/ James W. Spexarth
			James W. Spexarth
			Chief Accounting Officer

Date:	November 6, 2019