SUPERIOR ENERGY SERVICES, INC. AND SUBSIDIARIES

Quarterly Report on Form 10-Q for

the Quarterly Period Ended ~~March 31,~~June 30, 2018

TABLE OF CONTENTS



		Page
PART I.	FINANCIAL INFORMATION

Item 1.	Condensed Consolidated Financial Statements and Notes	3
Item 2.	Management’s Discussion and Analysis of Financial Condition and Results of Operations	2023
Item 3.	Quantitative and Qualitative Disclosures about Market Risk	2428
Item 4.	Controls and Procedures	2429

PART II.	OTHER INFORMATION

Item 1	Legal Proceedings	2530
Item 1A.	Risk Factors	2530
Item 2.	Unregistered Sales of Equity Securities and Use of Proceeds	2530
Item 6.	Exhibits	2530

Table Of Contents

PART I. FINANCIAL INFORMATION

Item 1. Financial Statements



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
March 31, 2018 and December 31, 2017
June 30, 2018 and December 31, 2017					June 30, 2018 and December 31, 2017
(in thousands, except share data)	(in thousands, except share data)				(in thousands, except share data)
(unaudited)	(unaudited)				(unaudited)
	3/31/2018		12/31/2017		6/30/2018		12/31/2017
ASSETS
Current assets:
Cash and cash equivalents	$	90,438	$	172,000	$	118,512	$	172,000
Accounts receivable, net of allowance for doubtful accounts of $25,762 and
$29,037 at March 31, 2018 and December 31, 2017, respectively		443,253		398,056
Accounts receivable, net of allowance for doubtful accounts of $19,534 and
$29,037 at June 30, 2018 and December 31, 2017, respectively						441,983		398,056
Income taxes receivable		-		959		-		959
Prepaid expenses		45,330		42,128		43,188		42,128
Inventory and other current assets		149,484		134,032		158,765		134,032
Assets held for sale		3,860		13,644		-		13,644
Total current assets		732,365		760,819		762,448		760,819
Property, plant and equipment, net of accumulated depreciation and depletion of $2,804,983 and $2,736,620 at March 31, 2018 and December 31, 2017, respectively		1,300,897		1,316,944
Property, plant and equipment, net of accumulated depreciation and depletion of $2,848,297 and $2,736,620 at June 30, 2018 and December 31, 2017, respectively						1,240,703		1,316,944
Goodwill		809,342		807,860		806,813		807,860
Notes receivable		61,087		60,149		62,041		60,149
Restricted cash		20,585		20,483		11,631		20,483
Intangible and other long-term assets, net of accumulated amortization of $86,709 and $83,359 at March 31, 2018 and December 31, 2017, respectively		140,487		143,970
Intangible and other long-term assets, net of accumulated amortization of $89,561 and $83,359 at June 30, 2018 and December 31, 2017, respectively						137,349		143,970
Total assets	$	3,064,763	$	3,110,225	$	3,020,985	$	3,110,225

LIABILITIES AND STOCKHOLDERS’ EQUITY
Current liabilities:
Accounts payable	$	148,499	$	119,716	$	162,125	$	119,716
Accrued expenses		215,801		221,757		201,665		221,757
Income taxes payable		934		-
Current portion of decommissioning liabilities		22,287		27,261		24,156		27,261
Current maturities of long-term debt		744		-
Liabilities held for sale		4,851		6,463		-		6,463
Total current liabilities		393,116		375,197		387,946		375,197

Deferred income taxes		48,773		61,058		41,758		61,058
Decommissioning liabilities		104,088		103,136		103,088		103,136
Long-term debt, net		1,280,569		1,279,771		1,281,145		1,279,771
Other long-term liabilities		160,048		158,634		154,333		158,634

Stockholders’ equity:
Preferred stock of $0.01 par value. Authorized - 5,000,000 shares; none issued		-		-		-		-
Common stock of $0.001 par value
Authorized-250,000,000, Issued and Outstanding - 154,237,262 at March 31, 2018 Authorized-250,000,000, Issued and Outstanding - 153,263,097 at December 31, 2017		154		153
Authorized - 250,000,000, Issued and Outstanding - 154,525,627 at June 30, 2018 Authorized - 250,000,000, Issued and Outstanding - 153,263,097 at December 31, 2017						155		153
Additional paid in capital		2,714,236		2,713,161		2,722,224		2,713,161
Accumulated other comprehensive loss, net		(63,039)		(67,427)		(70,092)		(67,427)
Retained deficit		(1,573,182)		(1,513,458)		(1,599,572)		(1,513,458)
Total stockholders’ equity		1,078,169		1,132,429		1,052,715		1,132,429
Total liabilities and stockholders’ equity	$	3,064,763	$	3,110,225	$	3,020,985	$	3,110,225

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	SUPERIOR ENERGY SERVICES, INC. AND SUBSIDIARIES				SUPERIOR ENERGY SERVICES, INC. AND SUBSIDIARIES
Condensed Consolidated Statements of Operations	Condensed Consolidated Statements of Operations				Condensed Consolidated Statements of Operations
Three Months Ended March 31, 2018 and 2017
Three and Six Months Ended June 30, 2018 and 2017					Three and Six Months Ended June 30, 2018 and 2017
(in thousands, except per share data)	(in thousands, except per share data)				(in thousands, except per share data)
(unaudited)	(unaudited)				(unaudited)
					Three Months				Six Months
	2018		2017		2018		2017		2018		2017
Revenues:
Services	$	399,768	$	334,450	$	446,812	$	404,131	$	846,580	$	738,581
Rentals		82,550		66,486		88,736		65,937		171,286		132,423
Total revenues		482,318		400,936		535,548		470,068		1,017,866		871,004
Costs and expenses:
Cost of services (exclusive of depreciation, depletion, amortization and accretion)		311,139		296,434		333,126		322,795		644,265		619,229
Cost of rentals (exclusive of depreciation, depletion, amortization and accretion)		32,321		25,552		36,684		29,007		69,005		54,559
Depreciation, depletion, amortization and accretion - services		87,747		95,330		81,740		92,953		169,487		188,283
Depreciation, depletion, amortization and accretion - rentals		17,972		18,951		16,233		15,166		34,205		34,117
General and administrative expenses		75,820		75,493		69,896		76,708		145,716		152,201
Loss from operations		(42,681)		(110,824)		(2,131)		(66,561)		(44,812)		(177,385)

Other income (expense):
Interest expense, net		(24,887)		(24,250)		(24,894)		(23,333)		(49,781)		(47,583)
Other income (expense)		(1,735)		649		(2,382)		(2,156)		(4,117)		(1,507)
Loss from continuing operations before income taxes		(69,303)		(134,425)		(29,407)		(92,050)		(98,710)		(226,475)
Income taxes		(9,355)		(44,764)		(3,970)		(30,011)		(13,325)		(74,775)
Net loss from continuing operations		(59,948)		(89,661)		(25,437)		(62,039)		(85,385)		(151,700)
Income (loss) from discontinued operations, net of income tax		224		(1,998)
Loss from discontinued operations, net of income tax						(953)		(1,767)		(729)		(3,765)
Net loss	$	(59,724)	$	(91,659)	$	(26,390)	$	(63,806)	$	(86,114)	$	(155,465)

Loss per share information:
Basic and diluted:
Net loss from continuing operations	$	(0.39)	$	(0.59)	$	(0.16)	$	(0.41)	$	(0.56)	$	(1.00)
Loss from discontinued operations		-		(0.01)		(0.01)		(0.01)		-		(0.02)
Net loss	$	(0.39)	$	(0.60)	$	(0.17)	$	(0.42)	$	(0.56)	$	(1.02)


Weighted average common shares used in computing loss per share:
Basic and diluted		154,121		152,701		154,278		152,857		153,728		152,317


SUPERIOR ENERGY SERVICES, INC. AND SUBSIDIARIES	SUPERIOR ENERGY SERVICES, INC. AND SUBSIDIARIES				SUPERIOR ENERGY SERVICES, INC. AND SUBSIDIARIES
Consolidated Statements of Comprehensive Loss	Consolidated Statements of Comprehensive Loss				Consolidated Statements of Comprehensive Loss
Three Months Ended March 31, 2018 and 2017
Three and Six Months Ended June 30, 2018 and 2017					Three and Six Months Ended June 30, 2018 and 2017
(in thousands)	(in thousands)				(in thousands)
(unaudited)	(unaudited)				(unaudited)
					Three Months				Six Months
	2018		2017		2018		2017		2018		2017
Net loss	$	(59,724)	$	(91,659)	$	(26,390)	$	(63,806)	$	(86,114)	$	(155,465)
Change in cumulative translation adjustment, net of tax		4,388		1,724		(7,053)		6,022		(2,665)		7,746
Comprehensive loss	$	(55,336)	$	(89,935)	$	(33,443)	$	(57,784)	$	(88,779)	$	(147,719)

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	SUPERIOR ENERGY SERVICES, INC. AND SUBSIDIARIES					SUPERIOR ENERGY SERVICES, INC. AND SUBSIDIARIES
Condensed Consolidated Statements of Cash Flows	Condensed Consolidated Statements of Cash Flows					Condensed Consolidated Statements of Cash Flows
Three Months Ended March 31, 2018 and 2017
Six Months Ended June 30, 2018 and 2017						Six Months Ended June 30, 2018 and 2017
(in thousands)	(in thousands)					(in thousands)
(unaudited)	(unaudited)					(unaudited)

		2018		2017			2018		2017
Cash flows from operating activities:
Net loss		$	(59,724)	$	(91,659)		$	(86,114)	$	(155,465)
Adjustments to reconcile net loss to net cash provided by operating activities:
Depreciation, depletion, amortization and accretion			105,719		114,281			203,692		222,400
Deferred income taxes			(12,285)		(29,747)			(19,300)		(61,322)
Stock based compensation expense			8,197		10,691			16,552		20,027
Other reconciling items, net			(987)		(1,430)			(2,595)		(1,603)
Changes in operating assets and liabilities:
Accounts receivable			(44,692)		(32,441)			(44,415)		(89,324)
Inventory and other current assets			(15,620)		(8,826)			(24,854)		(10,192)
Accounts payable			16,810		11,731			32,852		26,499
Accrued expenses			(14,501)		17,673			(35,729)		(11,202)
Income taxes			1,499		(20,496)			1,255		98,561
Other, net			(9,374)		(12,502)			(1,929)		(21,232)
Net cash used in operating activities			(24,958)		(42,725)
Net cash provided by operating activities								39,415		17,147

Cash flows from investing activities:
Payments for capital expenditures			(65,734)		(21,188)			(119,841)		(56,649)
Proceeds from sales of assets			12,135		4,090			23,297		4,090
Net cash used in investing activities			(53,599)		(17,098)			(96,544)		(52,559)

Cash flows from financing activities:
Proceeds from issuance of short-term debt			744		-
Tax withholdings for vested restricted stock units			(5,155)		(8,220)			(5,183)		(8,298)
Other			(304)		(486)			1,283		1,324
Net cash used in financing activities			(4,715)		(8,706)			(3,900)		(6,974)
Effect of exchange rate changes on cash			1,812		2,194			(1,311)		2,093
Net decrease in cash, cash equivalents, and restricted cash			(81,460)		(66,335)			(62,340)		(40,293)
Cash, cash equivalents, and restricted cash at beginning of period			192,483		246,092			192,483		246,092
Cash, cash equivalents, and restricted cash at end of period		$	111,023	$	179,757		$	130,143	$	205,799

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

Certain information and footnote disclosures normally in financial statements prepared in accordance with U.S. generally accepted accounting principles (GAAP) have been condensed or omitted pursuant to the rules and regulations of the Securities and Exchange Commission (SEC); however, management believes the disclosures that are made are adequate to make the information presented not misleading. These financial statements and notes should be read in conjunction with the consolidated financial statements and notes thereto included in Superior Energy Services, Inc.’s Annual Report on Form 10-K for the year ended December 31, 2017, and Management’s Discussion and Analysis of Financial Condition and Results of Operations herein.

The financial information of Superior Energy Services, Inc. and its subsidiaries (the Company) for the three and six months ended ~~March 31,~~June 30, 2018 and 2017 has not been audited. However, in the opinion of management, all adjustments necessary to present fairly the results of operations for the periods presented have been included therein. Certain previously reported amounts have been reclassified to conform to the 2018 presentation. The results of operations for the first ~~three~~six months of the year are not necessarily indicative of the results of operations that might be expected for the entire year.

Due to the nature of the Company’s business, the Company is involved, from time to time, in routine litigation or subject to disputes or claims regarding its business activities. Legal costs related to these matters are expensed as incurred. In management’s opinion, none of the pending litigation, disputes or claims is expected to have a material adverse effect on the Company’s financial condition, results of operations or liquidity.

The Company evaluates events that occur after the balance sheet date but before the financial statements are issued for potential recognition or disclosure. Based on the evaluation, the Company determined that there were no material subsequent events for recognition or disclosure.

Adoption of Accounting Standards Update (ASU) 2014-09, Revenue from Contracts with Customers

Effective January 1, 2018, the Company adopted ASU 2014-09, Revenue from Contracts with Customers (Topic 606). The Company adopted this ASU using the modified retrospective adoption method. There was no impact on the condensed consolidated financial statements and no cumulative effect adjustment was recognized.

Revenues are recognized when performance obligations are satisfied in accordance with contractual terms, in an amount that reflects the consideration the Company expects to be entitled to in exchange for services rendered or rentals provided. Taxes collected from customers and remitted to governmental authorities and revenues are reported on a net basis in the Company’s financial statements.

A performance obligation arises under contracts with customers to render services or provide rentals, and is the unit of account under Topic 606. The Company accounts for services rendered and rentals provided separately if they are distinct and the service or rental is separately identifiable from other items provided to a customer and if a customer can benefit from the services rendered or rentals provided on its own or with other resources that are readily available to the customer. A contract’s transaction price is allocated to each distinct performance obligation and recognized as revenue when, or as, the performance obligation is satisfied. A contract’s standalone selling prices are determined based on the prices that the Company charges for its services rendered and rentals provided. The majority of the Company’s performance obligations are satisfied over time, which is generally represented by a period of 30 days or less. The Company’s payment terms vary by the type of products or services offered. The term between invoicing and when the payment is due is typically 30 days.

Services revenue primarily represents amounts charged to customers for the completion of services rendered, including labor, products and supplies necessary to perform the service. Rates for these services vary depending on the type of services provided and can be based on a per job, per hour or per day basis.

Rentals revenue is, primarily priced on a per day, per man hour or similar basis and consists of fees charged to customers for use of the Company’s rental equipment over the term of the rental period, which is generally less than twelve months.

The Company expenses sales commissions when incurred because the amortization period would have been one year or less.

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




	Three Months Ended March 31,				Three Months Ended June 30,				Six Months Ended June 30,
		2018		2017		2018		2017		2018		2017
U.S. land
Drilling Products and Services	$	40,717	$	21,162	$	43,394	$	27,770	$	84,111	$	48,932
Onshore Completion and Workover Services		231,489		204,979		276,242		249,079		507,731		454,058
Production Services		52,457		23,435		47,944		33,062		100,401		56,497
Technical Solutions		6,833		9,085		7,858		7,921		14,691		17,006
Total U.S. land	$	331,496	$	258,661	$	375,438	$	317,832	$	706,934	$	576,493

Gulf of Mexico
Drilling Products and Services	$	20,989	$	23,485	$	23,261	$	22,266	$	44,250	$	45,751
Onshore Completion and Workover Services		-		-		-		-		-		-
Production Services		17,500		17,746		13,634		19,937		31,134		37,683
Technical Solutions		37,562		33,717		35,333		42,030		72,895		75,747
Total Gulf of Mexico	$	76,051	$	74,948	$	72,228	$	84,233	$	148,279	$	159,181

International
Drilling Products and Services	$	23,496	$	23,784	$	27,378	$	18,791	$	50,874	$	42,575
Onshore Completion and Workover Services		-		-		-		-		-		-
Production Services		30,760		27,424		40,426		35,607		71,186		63,031
Technical Solutions		20,515		16,119		20,078		13,605		40,593		29,724
Total International	$	74,771	$	67,327	$	87,882	$	68,003	$	162,653	$	135,330
Total Revenues	$	482,318	$	400,936	$	535,548	$	470,068	$	1,017,866	$	871,004

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




	Three Months Ended March 31,				Three Months Ended June 30,				Six Months Ended June 30,
		2018		2017		2018		2017		2018		2017
Services
Drilling Products and Services	$	24,005	$	16,871	$	27,461	$	19,629	$	51,466	$	36,500
Onshore Completion and Workover Services		221,347		199,446		266,071		240,461		487,418		439,907
Production Services		94,614		63,282		93,678		82,575		188,292		145,857
Technical Solutions		59,802		54,851		59,602		61,466		119,404		116,317
Total services	$	399,768	$	334,450	$	446,812	$	404,131	$	846,580	$	738,581

Rentals
Drilling Products and Services	$	61,197	$	51,560	$	66,572	$	49,198	$	127,769	$	100,758
Onshore Completion and Workover Services		10,142		5,533		10,171		8,618		20,313		14,151
Production Services		6,103		5,323		8,326		6,031		14,429		11,354
Technical Solutions		5,108		4,070		3,667		2,090		8,775		6,160
Total rentals	$	82,550	$	66,486	$	88,736	$	65,937	$	171,286	$	132,423
Total Revenues	$	482,318	$	400,936	$	535,548	$	470,068	$	1,017,866	$	871,004

Inventories are stated at the lower of cost or net realizable value. The Company applies net realizable value and obsolescence to the gross value of the inventory. Cost is determined using the first-in, first-out or weighted-average cost methods for finished goods and work-in-process. Supplies and consumables primarily consist of products used in our services provided to customers. The components of the inventory balances are as follows (in thousands):



	March 31, 2018		December 31, 2017		June 30, 2018		December 31, 2017
Finished goods	$	67,635	$	61,764	$	72,884	$	61,764
Raw materials		14,140		13,727		14,955		13,727
Work-in-process		8,419		6,174		10,051		6,174
Supplies and consumables		25,102		24,923		26,309		24,923
Total	$	115,296	$	106,588	$	124,199	$	106,588

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 ~~$1.0~~$1.9 million and ~~$0.8~~$1.7 million for the ~~three~~six months ended ~~March 31,~~June 30, 2018 and 2017, 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 ~~$126.4~~$127.2 million and $130.4 million at ~~March 31,~~June 30, 2018 and December 31, 2017, respectively.



	March 31, 2018				December 31, 2017		June 30, 2018		December 31, 2017
	Long-term		Current		Long-term		Long-term		Long-term
Senior unsecured notes due September 2024	$	500,000	$	-	$	500,000	$	500,000	$	500,000
Senior unsecured notes due December 2021		800,000		-		800,000		800,000		800,000
Other		-		744		-
Total debt, gross		1,300,000		744		1,300,000		1,300,000		1,300,000
Unamortized debt issuance costs		(19,431)		-		(20,229)		(18,855)		(20,229)
Total debt, net	$	1,280,569	$	744	$	1,279,771	$	1,281,145	$	1,279,771

The Company has a $300 million asset-based revolving credit facility which matures in October 2022. The borrowing base under the credit facility is calculated based on a formula referencing the borrower’s and the subsidiary guarantors’ eligible accounts receivable, eligible inventory and eligible premium rental drill pipe less reserves. Availability under the credit facility 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 the 7 1/8% senior unsecured notes due 2021. At ~~March 31,~~June 30, 2018, the borrowing base was ~~$267.7~~$263.0 million and the Company had ~~$35.3~~$37.9 million of letters of credit outstanding that reduced its borrowing availability under the revolving credit facility. ~~The borrowing base may increase or decrease as a result of, among other things, changes to the Company’s consolidated tangible assets.~~ 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.

The Company has outstanding $500 million of 7 3/4% senior unsecured notes due September 2024. The indenture governing the 7 3/4% senior unsecured notes due 2024 requires semi-annual interest payments on March 15th and September 15th of each year, beginning on March 15, 2018, 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% senior unsecured notes due 2021 requires semi-annual interest payments on June 15th and December 15th of each year through the maturity date of December 15, 2021.

Fair value is defined as the price that would be received to sell an asset or the price paid to transfer a liability in an orderly transaction between market participants at the measurement date. Inputs used in determining fair value are characterized according to a hierarchy that prioritizes those inputs based on the degree to which they are observable. The three input levels of the fair value hierarchy are as follows.

Level 1: Unadjusted quoted prices in active markets for identical assets and liabilities.

Level 2: Observable inputs other than those included in Level 1, such as quoted prices for similar assets and liabilities in active markets; quoted prices for identical assets or liabilities in inactive markets; or model-derived valuations or other inputs that can be corroborated by observable market data.

Level 3: Unobservable inputs reflecting management’s own assumptions about the inputs used in pricing the asset or liability.

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 March 31, 2018								Fair Value at June 30, 2018
	Level 1		Level 2		Level 3		Total		Level 1		Level 2		Level 3		Total
Intangible and other long-term assets, net
Non-qualified deferred compensation assets	$	371	$	13,741	$	-	$	14,112	$	373	$	13,904	$	-	$	14,277
Accounts payable
Non-qualified deferred compensation liabilities	$	-	$	1,007	$	-	$	1,007	$	-	$	1,163	$	-	$	1,163
Other long-term liabilities
Non-qualified deferred compensation liabilities	$	-	$	20,268	$	-	$	20,268	$	-	$	21,081	$	-	$	21,081

	Fair Value at December 31, 2017								Fair Value at December 31, 2017
	Level 1		Level 2		Level 3		Total		Level 1		Level 2		Level 3		Total
Intangible and other long-term assets, net
Non-qualified deferred compensation assets	$	370	$	13,817	$	-	$	14,187	$	370	$	13,817	$	-	$	14,187
Accounts payable
Non-qualified deferred compensation liabilities	$	-	$	1,253	$	-	$	1,253	$	-	$	1,253	$	-	$	1,253
Other long-term liabilities
Non-qualified deferred compensation liabilities	$	-	$	21,085	$	-	$	21,085	$	-	$	21,085	$	-	$	21,085

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. 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.

The fair value of the Company’s cash equivalents and accounts receivable approximates their carrying amounts. The fair value of the Company’s long-term debt was approximately ~~$1,332.~~$1,321.50 million and $1,347.0 million as of ~~March 31,~~June 30, 2018 and December 31, 2017, respectively. The fair value of these debt instruments is determined by reference to the market value of the instruments as quoted in over-the-counter markets, which are Level 1 inputs.

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,~~control services, stimulation and sand control services and well plug and abandonment services. It also includes production and sale of oil and gas.

The Company evaluates the performance of its reportable segments based on income or loss from operations excluding allocated 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. The Company uses this segment measure to evaluate its reportable segments because it is the measure that is most consistent with how the Company organizes and 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 March 31, 2018
Three Months Ended June 30, 2018													Three Months Ended June 30, 2018

			Onshore													Onshore
	Drilling		Completion											Drilling		Completion
	Products and		and Workover		Production		Technical		Corporate and		Consolidated			Products and		and Workover		Production		Technical		Corporate and		Consolidated
	Services		Services		Services		Solutions		Other		Total			Services		Services		Services		Solutions		Other		Total
Revenues	$	85,202	$	231,489	$	100,717	$	64,910	$	-	$	482,318		$	94,033	$	276,242	$	102,004	$	63,269	$	-	$	535,548
Cost of services and rentals (exclusive of
depreciation, depletion, amortization and accretion)		35,070		180,651		85,936		41,803		-		343,460			36,599		210,206		85,129		37,876		-		369,810
Depreciation, depletion, amortization
and accretion		29,641		47,655		19,280		7,730		1,413		105,719			28,590		47,423		14,303		6,273		1,384		97,973
General and administrative expenses		12,524		13,226		9,593		14,060		26,417		75,820			13,843		11,102		9,696		13,323		21,932		69,896
Income (loss) from operations		7,967		(10,043)		(14,092)		1,317		(27,830)		(42,681)			15,001		7,511		(7,124)		5,797		(23,316)		(2,131)
Interest income (expense), net		-		-		-		956		(25,843)		(24,887)			-		-		-		971		(25,865)		(24,894)
Other expense		-		-		-		-		(1,735)		(1,735)			-		-		-		-		(2,382)		(2,382)
Income (loss) from continuing operations
before income taxes	$	7,967	$	(10,043)	$	(14,092)	$	2,273	$	(55,408)	$	(69,303)		$	15,001	$	7,511	$	(7,124)	$	6,768	$	(51,563)	$	(29,407)



Three Months Ended March 31, 2017
Three Months Ended June 30, 2017													Three Months Ended June 30, 2017

			Onshore													Onshore
	Drilling		Completion											Drilling		Completion
	Products and		and Workover		Production		Technical		Corporate and		Consolidated			Products and		and Workover		Production		Technical		Corporate and		Consolidated
	Services		Services		Services		Solutions		Other		Total			Services		Services		Services		Solutions		Other		Total
Revenues	$	68,431		204,979		68,605		58,921	$	-	$	400,936		$	68,827	$	249,079	$	88,606	$	63,556	$	-	$	470,068
Cost of services and rentals (exclusive of
depreciation, depletion, amortization and accretion)		29,058		193,689		60,780		38,459		-		321,986			33,002		207,021		71,377		40,402		-		351,802
Depreciation, depletion, amortization
and accretion		34,729		49,147		20,589		8,376		1,440		114,281			33,619		44,621		20,193		8,255		1,431		108,119
General and administrative expenses		12,966		11,271		11,281		13,568		26,407		75,493			12,739		11,804		11,886		13,828		26,451		76,708
Loss from operations		(8,322)		(49,128)		(24,045)		(1,482)		(27,847)		(110,824)
Income (loss) from operations															(10,533)		(14,367)		(14,850)		1,071		(27,882)		(66,561)
Interest income (expense), net		-		-		-		790		(25,040)		(24,250)			-		-		-		911		(24,244)		(23,333)
Other income		-		-		-		-		649		649
Loss from continuing operations before income taxes	$	(8,322)	$	(49,128)	$	(24,045)	$	(692)	$	(52,238)	$	(134,425)
Other expense															-		-		-		-		(2,156)		(2,156)
Income (loss) from continuing operations
before income taxes														$	(10,533)	$	(14,367)	$	(14,850)	$	1,982	$	(54,282)	$	(92,050)



Six Months Ended June 30, 2018

			Onshore
	Drilling		Completion
	Products and		and Workover		Production		Technical		Corporate and		Consolidated
	Services		Services		Services		Solutions		Other		Total
Revenues	$	179,235	$	507,731	$	202,721	$	128,179	$	-	$	1,017,866
Cost of services and rentals (exclusive of
depreciation, depletion, amortization and accretion)		71,669		390,857		171,065		79,679		-		713,270
Depreciation, depletion, amortization
and accretion		58,231		95,078		33,583		14,003		2,797		203,692
General and administrative expenses		26,367		24,328		19,289		27,383		48,349		145,716
Income/(loss) from operations		22,968		(2,532)		(21,216)		7,114		(51,146)		(44,812)
Interest income (expense), net		-		-		-		1,927		(51,708)		(49,781)
Other expense		-		-		-		-		(4,117)		(4,117)
Income/(loss) from continuing operations
before income taxes	$	22,968	$	(2,532)	$	(21,216)	$	9,041	$	(106,971)	$	(98,710)



Six Months Ended June 30, 2017

			Onshore
	Drilling		Completion
	Products and		and Workover		Production		Technical		Corporate and		Consolidated
	Services		Services		Services		Solutions		Other		Total
Revenues	$	137,258	$	454,058	$	157,211	$	122,477	$	-	$	871,004
Cost of services and rentals (exclusive of
depreciation, depletion, amortization and accretion)		62,060		400,710		132,157		78,861		-		673,788
Depreciation, depletion, amortization
and accretion		68,348		93,768		40,782		16,631		2,871		222,400
General and administrative expenses		25,705		23,075		23,167		27,396		52,858		152,201
Loss from operations		(18,855)		(63,495)		(38,895)		(411)		(55,729)		(177,385)
Interest income (expense), net		-		-		-		1,701		(49,284)		(47,583)
Other income		-		-		-		-		(1,507)		(1,507)
Income (loss) from continuing operations
before income taxes	$	(18,855)	$	(63,495)	$	(38,895)	$	1,290	$	(106,520)	$	(226,475)



Identifiable Assets
			Onshore												Onshore
	Drilling		Completion										Drilling		Completion
	Products and		and Workover		Production		Technical		Corporate and		Consolidated		Products and		and Workover		Production		Technical		Corporate and		Consolidated
	Services		Services		Services		Solutions		Other		Total		Services		Services		Services		Solutions		Other		Total
March 31, 2018	$	585,933	$	1,553,817	$	508,971	$	360,383	$	55,659	$	3,064,763
June 30, 2018													$	578,083	$	1,553,343	$	491,859	$	345,196	$	52,504	$	3,020,985
December 31, 2017	$	662,968	$	1,501,214	$	512,256	$	377,549	$	56,238	$	3,110,225	$	662,968	$	1,501,214	$	512,256	$	377,549	$	56,238	$	3,110,225

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 March 31,				Three Months Ended June 30,				Six Months Ended June 30,
	2018		2017		2018		2017		2018		2017
United States	$	407,547	$	333,609	$	447,666	$	402,065	$	855,213	$	735,674
Other countries		74,771		67,327		87,882		68,003		162,653		135,330
Total	$	482,318	$	400,936	$	535,548	$	470,068	$	1,017,866	$	871,004

Long-Lived Assets

	March 31, 2018		December 31, 2017		June 30, 2018		December 31, 2017
United States	$	1,064,635	$	1,064,823	$	1,001,738	$	1,064,823
Other countries		236,262		252,121		238,965		252,121
Total	$	1,300,897	$	1,316,944	$	1,240,703	$	1,316,944

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 ~~$7.9~~$16.3 million and ~~$10.4~~$19.7 million for the ~~three~~six months ended ~~March 31,~~June 30, 2018 and 2017, respectively, which is reflected in general and administrative expenses.

The Company had $30.7 million of unrecorded tax benefits as of ~~March 31,~~June 30, 2018 and December 31, 2017, 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. The Company continues to evaluate the impact of the Tax Cuts and Jobs Act of 2017 and no revisions were recorded during the ~~three~~six months ended ~~March 31,~~June 30, 2018.

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 six months ended ~~March 31,~~June 30, 2018 and 2017, the Company incurred a loss from continuing operations; therefore the impact of any incremental shares would be anti-dilutive.

SESI, L.L.C. (the Issuer), a 100% owned subsidiary of Superior Energy Services, Inc. (Parent), has $500 million of 7 3/4% senior unsecured notes due 2024. The Parent, along with certain of its 100% owned domestic subsidiaries, fully and unconditionally guaranteed such senior unsecured notes, and such guarantees are joint and several.



SUPERIOR ENERGY SERVICES, INC. AND SUBSIDIARIES	SUPERIOR ENERGY SERVICES, INC. AND SUBSIDIARIES													SUPERIOR ENERGY SERVICES, INC. AND SUBSIDIARIES
Condensed Consolidating Balance Sheets	Condensed Consolidating Balance Sheets													Condensed Consolidating Balance Sheets
March 31, 2018
June 30, 2018														June 30, 2018
(in thousands)	(in thousands)													(in thousands)
(unaudited)	(unaudited)													(unaudited)
		Parent		Issuer		Guarantor Subsidiaries		Non- Guarantor Subsidiaries		Eliminations		Consolidated			Parent		Issuer		Guarantor Subsidiaries		Non- Guarantor Subsidiaries		Eliminations		Consolidated
Assets
Current assets:
Cash and cash equivalents		$	-	$	41,773	$	582	$	48,083	$	-	$	90,438		$	-	$	68,807	$	1,243	$	48,462	$	-	$	118,512
Accounts receivable, net			-		(3,581)		383,048		63,786		-		443,253			-		(924)		372,274		70,633		-		441,983
Intercompany accounts receivable			-		6,623		58,742		5,601		(70,966)		-			-		8,920		68,283		5,533		(82,736)		-
Other current assets			-		10,944		146,842		37,028		-		194,814			-		12,190		153,887		35,876		-		201,953
Assets held for sale			-		-		-		3,860		-		3,860
Total current assets			-		55,759		589,214		158,358		(70,966)		732,365			-		88,993		595,687		160,504		(82,736)		762,448

Property, plant and equipment, net			-		11,049		1,087,416		202,432		-		1,300,897			-		10,609		1,035,229		194,865		-		1,240,703
Goodwill			-		-		657,099		152,243		-		809,342			-		-		657,099		149,714		-		806,813
Notes receivable			-		-		61,087		-		-		61,087			-		-		62,041		-		-		62,041
Long-term intercompany accounts receivable			2,222,542		-		1,987,499		179,940		(4,389,981)		-			2,230,531		-		2,058,093		180,246		(4,468,870)		-
Equity investments of consolidated subsidiaries			(1,144,117)		4,459,353		6,422		-		(3,321,658)		-			(1,177,514)		4,461,755		6,223		-		(3,290,464)		-
Restricted cash			-		-		20,585		-		-		20,585			-		-		11,586		45		-		11,631
Intangible and other long-term assets, net			-		21,548		111,078		7,861		-		140,487			-		21,217		108,503		7,629		-		137,349
Total assets		$	1,078,425	$	4,547,709	$	4,520,400	$	700,834	$	(7,782,605)	$	3,064,763		$	1,053,017	$	4,582,574	$	4,534,461	$	693,003	$	(7,842,070)	$	3,020,985

Liabilities and Stockholders' Equity
Current liabilities:
Accounts payable		$	-	$	11,611	$	118,464	$	18,424	$	-	$	148,499		$	-	$	12,184	$	128,478	$	21,463	$	-	$	162,125
Accrued expenses			256		113,943		77,410		24,192		-		215,801			302		103,998		74,908		22,457		-		201,665
Income taxes payable			-		304		-		630		-		934
Intercompany accounts payable			-		774		7,909		62,283		(70,966)		-			-		724		8,250		73,762		(82,736)		-
Current portion of decommissioning liabilities			-		-		20,670		1,617		-		22,287			-		-		20,670		3,486		-		24,156
Current maturities of long-term debt			-		-		-		744		-		744
Liabilities held for sale			-		-		-		4,851		-		4,851
Total current liabilities			256		126,632		224,453		112,741		(70,966)		393,116			302		116,906		232,306		121,168		(82,736)		387,946

Deferred income taxes			-		(160,785)		205,902		3,656		-		48,773			-		(156,705)		194,992		3,471		-		41,758
Decommissioning liabilities			-		-		102,244		1,844		-		104,088			-		-		103,088		-		��-		103,088
Long-term debt, net			-		1,280,569		-		-		-		1,280,569			-		1,281,145		-		-		-		1,281,145
Long-term intercompany accounts payable			-		4,389,981		-		-		(4,389,981)		-			-		4,468,870		-		-		(4,468,870)		-
Other long-term liabilities			-		55,429		78,430		26,189		-		160,048			-		49,872		78,276		26,185		-		154,333
Total stockholders' equity (deficit)			1,078,169		(1,144,117)		3,909,371		556,404		(3,321,658)		1,078,169			1,052,715		(1,177,514)		3,925,799		542,179		(3,290,464)		1,052,715
Total liabilities and stockholders' equity		$	1,078,425	$	4,547,709	$	4,520,400	$	700,834	$	(7,782,605)	$	3,064,763		$	1,053,017	$	4,582,574	$	4,534,461	$	693,003	$	(7,842,070)	$	3,020,985



SUPERIOR ENERGY SERVICES, INC. AND SUBSIDIARIES
Condensed Consolidating Balance Sheets
December 31, 2017
(in thousands)
(unaudited)
	Parent		Issuer		Guarantor Subsidiaries		Non- Guarantor Subsidiaries		Eliminations		Consolidated
Assets
Current assets:
Cash and cash equivalents	$	-	$	126,533	$	440	$	45,027	$	-	$	172,000
Accounts receivable, net		-		-		332,402		70,889		(5,235)		398,056
Income taxes receivable		-		-		(221)		1,180		-		959
Intercompany accounts receivable		-		6,460		58,375		5,865		(70,700)		-
Other current assets		-		11,895		129,970		34,295		-		176,160
Assets held for sale		-		-		-		13,644		-		13,644
Total current assets		-		144,888		520,966		170,900		(75,935)		760,819

Property, plant and equipment, net		-		12,055		1,093,446		211,443		-		1,316,944
Goodwill		-		-		657,099		150,761		-		807,860
Notes receivable		-		-		60,149		-		-		60,149
Long-term intercompany accounts receivable		2,221,697		-		2,032,056		177,842		(4,431,595)		-
Equity investments of consolidated subsidiaries		(1,088,736)		4,481,702		6,590		-		(3,399,556)		-
Restricted cash		-		-		20,483		-		-		20,483
Intangible and other long-term assets, net		-		22,118		113,632		8,220		-		143,970
Total assets	$	1,132,961	$	4,660,763	$	4,504,421	$	719,166	$	(7,907,086)	$	3,110,225

Liabilities and Stockholders' Equity
Current liabilities:
Accounts payable	$	-	$	14,339	$	89,714	$	20,898	$	(5,235)	$	119,716
Accrued expenses		532		116,767		80,825		23,633		-		221,757
Intercompany accounts payable		-		724		7,918		62,058		(70,700)		-
Current portion of decommissioning liabilities		-		-		25,670		1,591		-		27,261
Liabilities held for sale		-		-		-		6,463		-		6,463
Total current liabilities		532		131,830		204,127		114,643		(75,935)		375,197

Deferred income taxes		-		(147,116)		205,386		2,788		-		61,058
Decommissioning liabilities		-		-		101,293		1,843		-		103,136
Long-term debt, net		-		1,279,771		-		-		-		1,279,771
Long-term intercompany accounts payable		-		4,431,595		-		-		(4,431,595)		-
Other long-term liabilities		-		53,419		79,061		26,154		-		158,634
Total stockholders' equity (deficit)		1,132,429		(1,088,736)		3,914,554		573,738		(3,399,556)		1,132,429
Total liabilities and stockholders' equity	$	1,132,961	$	4,660,763	$	4,504,421	$	719,166	$	(7,907,086)	$	3,110,225

SUPERIOR ENERGY SERVICES, INC. AND SUBSIDIARIES
Condensed Consolidating Statements of Operations
Three Months Ended March 31, 2018
(in thousands)
(unaudited)

Parent

Issuer

Guarantor
Subsidiaries

Non-
Guarantor
Subsidiaries

Eliminations

Consolidated
Revenues

$
-

$
-

$
435,134

$
53,259

$
(6,075)

$
482,318
Cost of services and rentals (exclusive of depreciation,

depletion, amortization and accretion)

-

(2,626)

311,064

41,097

(6,075)

343,460
Depreciation, depletion, amortization and

accretion

-

1,019

92,714

11,986

-

105,719
General and administrative expenses

-

25,664

38,689

11,467

-

75,820
Loss from operations

-

(24,057)

(7,333)

(11,291)

-

(42,681)

Other income (expense):

Interest expense, net

-

(25,870)

967

16

-

(24,887)
Other income (expense)

-

(66)

274

(1,943)

-

(1,735)
Equity in losses of consolidated subsidiaries

(59,724)

(17,470)

(168)

-

77,362

-
Loss from continuing operations before income taxes

(59,724)

(67,463)

(6,260)

(13,218)

77,362

(69,303)
Income taxes

-

(7,739)

(1,076)

(540)

-

(9,355)
Net loss from continuing operations

(59,724)

(59,724)

(5,184)

(12,678)

77,362

(59,948)
Loss from discontinued operations, net of income tax

-

-

-

224

-

224
Net loss

$
(59,724)

$
(59,724)

$
(5,184)

$
(12,454)

$
77,362

$
(59,724)

SUPERIOR ENERGY SERVICES, INC. AND SUBSIDIARIES
Consolidating Statements of Comprehensive Loss
Three Months Ended March 31, 2018
(in thousands)
(unaudited)

Parent

Issuer

Guarantor
Subsidiaries

Non-
Guarantor
Subsidiaries

Eliminations

Consolidated
Net loss

$
(59,724)

$
(59,724)

$
(5,184)

$
(12,454)

$
77,362

$
(59,724)
Change in cumulative translation adjustment, net of tax

4,388

4,388

-

4,388

(8,776)

4,388
Comprehensive loss

$
(55,336)

$
(55,336)

$
(5,184)

$
(8,066)

$
68,586

$
(55,336)



SUPERIOR ENERGY SERVICES, INC. AND SUBSIDIARIES	SUPERIOR ENERGY SERVICES, INC. AND SUBSIDIARIES													SUPERIOR ENERGY SERVICES, INC. AND SUBSIDIARIES
Condensed Consolidating Statements of Operations	Condensed Consolidating Statements of Operations													Condensed Consolidating Statements of Operations
Three Months Ended March 31, 2017
Three Months Ended June 30, 2018														Three Months Ended June 30, 2018
(in thousands)	(in thousands)													(in thousands)
(unaudited)	(unaudited)													(unaudited)
		Parent		Issuer		Guarantor Subsidiaries		Non- Guarantor Subsidiaries		Eliminations		Consolidated			Parent		Issuer		Guarantor Subsidiaries		Non- Guarantor Subsidiaries		Eliminations		Consolidated
Revenues		$	-	$	-	$	353,860	$	52,188	$	(5,112)	$	400,936		$	-	$	-	$	473,724	$	73,289	$	(11,465)	$	535,548
Cost of services and rentals (exclusive of depreciation,
depletion, amortization and accretion)			-		760		284,960		41,378		(5,112)		321,986			-		(2,963)		334,169		50,069		(11,465)		369,810
Depreciation, depletion, amortization and
accretion			-		1,046		100,568		12,667		-		114,281			-		990		85,501		11,482		-		97,973
General and administrative expenses			-		25,935		37,144		12,414		-		75,493			-		21,098		35,668		13,130		-		69,896
Loss from operations			-		(27,741)		(68,812)		(14,271)		-		(110,824)			-		(19,125)		18,386		(1,392)		-		(2,131)

Other income (expense):
Interest expense, net			-		(25,241)		802		189		-		(24,250)			-		(25,884)		980		10		-		(24,894)
Other income (expense)			-		(411)		241		819		-		649			-		(186)		264		(2,460)		-		(2,382)
Equity in losses of consolidated subsidiaries			(91,659)		(54,562)		(60)		-		146,281		-			(26,390)		11,361		(200)		-		15,229		-
Loss from continuing operations before
income taxes			(91,659)		(107,955)		(67,829)		(13,263)		146,281		(134,425)
Loss from continuing operations before income taxes																(26,390)		(33,834)		19,430		(3,842)		15,229		(29,407)
Income taxes			-		(16,296)		(28,968)		500		-		(44,764)			-		(7,444)		3,001		473		-		(3,970)
Net income (loss) from continuing operations			(91,659)		(91,659)		(38,861)		(13,763)		146,281		(89,661)
Net loss from continuing operations																(26,390)		(26,390)		16,429		(4,315)		15,229		(25,437)
Loss from discontinued operations, net of income tax			-		-		-		(1,998)		-		(1,998)			-		-		-		(953)		-		(953)
Net loss		$	(91,659)	$	(91,659)	$	(38,861)	$	(15,761)	$	146,281	$	(91,659)		$	(26,390)	$	(26,390)	$	16,429	$	(5,268)	$	15,229	$	(26,390)




SUPERIOR ENERGY SERVICES, INC. AND SUBSIDIARIES	SUPERIOR ENERGY SERVICES, INC. AND SUBSIDIARIES													SUPERIOR ENERGY SERVICES, INC. AND SUBSIDIARIES
Consolidating Statements of Comprehensive Loss	Consolidating Statements of Comprehensive Loss													Consolidating Statements of Comprehensive Loss
Three Months Ended March 31, 2017
Three Months Ended June 30, 2018														Three Months Ended June 30, 2018
(in thousands)	(in thousands)													(in thousands)
(unaudited)	(unaudited)													(unaudited)
		Parent		Issuer		Guarantor Subsidiaries		Non- Guarantor Subsidiaries		Eliminations		Consolidated
															Parent		Issuer		Guarantor Subsidiaries		Non- Guarantor Subsidiaries		Eliminations		Consolidated
Net loss		$	(91,659)	$	(91,659)	$	(38,861)	$	(15,761)	$	146,281	$	(91,659)		$	(26,390)	$	(26,390)	$	16,429	$	(5,268)	$	15,229	$	(26,390)
Change in cumulative translation adjustment, net of tax			1,724		1,724		-		1,724		(3,448)		1,724			(7,053)		(7,053)		-		(7,053)		14,106		(7,053)
Comprehensive loss		$	(89,935)	$	(89,935)	$	(38,861)	$	(14,037)	$	142,833	$	(89,935)		$	(33,443)	$	(33,443)	$	16,429	$	(12,321)	$	29,335	$	(33,443)

SUPERIOR ENERGY SERVICES, INC. AND SUBSIDIARIES
Condensed Consolidating Statements of Cash Flows
Three Months Ended March 31, 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
$
6,229

$
(42,958)

$
17,549

$
(15,047)

$
9,269

$
(24,958)

Cash flows from investing activities:

Payments for capital expenditures

-

-

(63,489)

(2,245)

-

(65,734)
Proceeds from sales of assets

-

-

2,003

10,132

-

12,135
Net cash used in investing activities

-

-

(61,486)

7,887

-

(53,599)

Cash flows from financing activities:

Proceeds from issuance of long-term debt

-

-

-

744

-

744
Intercompany dividends

-

-

-

9,269

(9,269)

-
Changes in notes with affiliated companies, net

(845)

(41,727)

44,181

(1,609)

-

-
Other

(5,384)

(75)

-

-

-

(5,459)
Net cash provided by (used in) financing activities

(6,229)

(41,802)

44,181

8,404

(9,269)

(4,715)
Effect of exchange rate changes on cash

-

-

-

1,812

-

1,812
Net decrease in cash, cash equivalents, and restricted cash

-

(84,760)

244

3,056

-

(81,460)

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
$
-

$
41,773

$
21,167

$
48,083

$
-

$
111,023



SUPERIOR ENERGY SERVICES, INC. AND SUBSIDIARIES
Condensed Consolidating Statements of Operations
Three Months Ended June 30, 2017
(in thousands)
(unaudited)
	Parent		Issuer		Guarantor Subsidiaries		Non- Guarantor Subsidiaries		Eliminations		Consolidated
Revenues	$	-	$	-	$	416,328	$	56,311	$	(2,571)	$	470,068
Cost of services and rentals (exclusive of depreciation,
depletion, amortization and accretion)		-		1,500		311,009		41,864		(2,571)		351,802
Depreciation, depletion, amortization and
accretion		-		1,035		94,031		13,053		-		108,119
General and administrative expenses		-		25,948		37,732		13,028		-		76,708
Loss from operations		-		(28,483)		(26,444)		(11,634)		-		(66,561)

Other income (expense):
Interest expense, net		-		(24,370)		957		80		-		(23,333)
Other income (expense)		-		(311)		206		(2,051)		-		(2,156)
Equity in losses of consolidated subsidiaries		(63,806)		(24,545)		(148)		-		88,499		-
Loss from continuing operations before income taxes		(63,806)		(77,709)		(25,429)		(13,605)		88,499		(92,050)
Income taxes		-		(13,903)		(15,278)		(830)		-		(30,011)
Net income (loss) from continuing operations		(63,806)		(63,806)		(10,151)		(12,775)		88,499		(62,039)
Loss from discontinued operations, net of income tax		-		-		-		(1,767)		-		(1,767)
Net loss	$	(63,806)	$	(63,806)	$	(10,151)	$	(14,542)	$	88,499	$	(63,806)




SUPERIOR ENERGY SERVICES, INC. AND SUBSIDIARIES
Consolidating Statements of Comprehensive Loss
Three Months Ended June 30, 2017
(in thousands)
(unaudited)
	Parent		Issuer		Guarantor Subsidiaries		Non- Guarantor Subsidiaries		Eliminations		Consolidated
Net loss	$	(63,806)	$	(63,806)	$	(10,151)	$	(14,542)	$	88,499	$	(63,806)
Change in cumulative translation adjustment, net of tax		6,022		6,022		-		6,022		(12,044)		6,022
Comprehensive loss	$	(57,784)	$	(57,784)	$	(10,151)	$	(8,520)	$	76,455	$	(57,784)



SUPERIOR ENERGY SERVICES, INC. AND SUBSIDIARIES
Condensed Consolidating Statements of Operations
Six Months Ended June 30, 2018
(in thousands)
(unaudited)
	Parent		Issuer		Guarantor Subsidiaries		Non- Guarantor Subsidiaries		Eliminations		Consolidated
Revenues	$	-	$	-	$	908,858	$	126,548	$	(17,540)	$	1,017,866
Cost of services and rentals (exclusive of depreciation,
depletion, amortization and accretion)		-		(5,589)		645,233		91,166		(17,540)		713,270
Depreciation, depletion, amortization and
accretion		-		2,009		178,215		23,468		-		203,692
General and administrative expenses		-		46,762		74,357		24,597		-		145,716
Loss from operations		-		(43,182)		11,053		(12,683)		-		(44,812)

Other income (expense):
Interest expense, net		-		(51,754)		1,947		26		-		(49,781)
Other income (expense)		-		(252)		538		(4,403)		-		(4,117)
Equity in losses of consolidated subsidiaries		(86,114)		(6,109)		(368)		-		92,591		-
Loss from continuing operations before income taxes		(86,114)		(101,297)		13,170		(17,060)		92,591		(98,710)
Income taxes		-		(15,183)		1,925		(67)		-		(13,325)
Net loss from continuing operations		(86,114)		(86,114)		11,245		(16,993)		92,591		(85,385)
Loss from discontinued operations, net of income tax		-		-		-		(729)		-		(729)
Net loss	$	(86,114)	$	(86,114)	$	11,245	$	(17,722)	$	92,591	$	(86,114)




SUPERIOR ENERGY SERVICES, INC. AND SUBSIDIARIES
Consolidating Statements of Comprehensive Loss
Six Months Ended June 30, 2018
(in thousands)
(unaudited)
	Parent		Issuer		Guarantor Subsidiaries		Non- Guarantor Subsidiaries		Eliminations		Consolidated
Net loss	$	(86,114)	$	(86,114)	$	11,245	$	(17,722)	$	92,591	$	(86,114)
Change in cumulative translation adjustment, net of tax		(2,665)		(2,665)		-		(2,665)		5,330		(2,665)
Comprehensive loss	$	(88,779)	$	(88,779)	$	11,245	$	(20,387)	$	97,921	$	(88,779)



SUPERIOR ENERGY SERVICES, INC. AND SUBSIDIARIES
Condensed Consolidating Statements of Operations
Six Months Ended June 30, 2017
(in thousands)
(unaudited)
	Parent		Issuer		Guarantor Subsidiaries		Non- Guarantor Subsidiaries		Eliminations		Consolidated
Revenues	$	-	$	-	$	770,188	$	108,499	$	(7,683)	$	871,004
Cost of services and rentals (exclusive of depreciation,
depletion, amortization and accretion)		-		2,260		595,969		83,242		(7,683)		673,788
Depreciation, depletion, amortization and
accretion		-		2,081		194,599		25,720		-		222,400
General and administrative expenses		-		51,883		74,876		25,442		-		152,201
Loss from operations		-		(56,224)		(95,256)		(25,905)		-		(177,385)

Other income (expense):
Interest expense, net		-		(49,611)		1,759		269		-		(47,583)
Other income (expense)		-		(722)		447		(1,232)		-		(1,507)
Equity in losses of consolidated subsidiaries		(155,465)		(79,107)		(208)		-		234,780		-
Loss from continuing operations before income taxes		(155,465)		(185,664)		(93,258)		(26,868)		234,780		(226,475)
Income taxes		-		(30,199)		(44,246)		(330)		-		(74,775)
Net income (loss) from continuing operations		(155,465)		(155,465)		(49,012)		(26,538)		234,780		(151,700)
Loss from discontinued operations, net of income tax		-		-		-		(3,765)		-		(3,765)
Net loss	$	(155,465)	$	(155,465)	$	(49,012)	$	(30,303)	$	234,780	$	(155,465)




SUPERIOR ENERGY SERVICES, INC. AND SUBSIDIARIES
Consolidating Statements of Comprehensive Loss
Six Months Ended June 30, 2017
(in thousands)
(unaudited)
	Parent		Issuer		Guarantor Subsidiaries		Non- Guarantor Subsidiaries		Eliminations		Consolidated
Net loss	$	(155,465)	$	(155,465)	$	(49,012)	$	(30,303)	$	234,780	$	(155,465)
Change in cumulative translation adjustment, net of tax		7,746		7,746		-		7,746		(15,492)		7,746
Comprehensive loss	$	(147,719)	$	(147,719)	$	(49,012)	$	(22,557)	$	219,288	$	(147,719)



SUPERIOR ENERGY SERVICES, INC. AND SUBSIDIARIES
Condensed Consolidating Statements of Cash Flows
Six Months Ended June 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	$	12,342	$	(91,600)	$	131,729	$	(1,787)	$	(11,269)	$	39,415

Cash flows from investing activities:			��
Payments for capital expenditures		-		(549)		(114,360)		(4,932)		-		(119,841)
Proceeds from sales of assets		-		-		10,150		13,147		-		23,297
Net cash used in investing activities		-		(549)		(104,210)		8,215		-		(96,544)

Cash flows from financing activities:
Intercompany dividends		-		-		-		(11,269)		11,269		-
Changes in notes with affiliated companies, net		(8,834)		34,815		(35,613)		9,632		-		-
Other		(3,508)		(392)		-		-		-		(3,900)
Net cash provided by (used in) financing activities		(12,342)		34,423		(35,613)		(1,637)		11,269		(3,900)
Effect of exchange rate changes on cash		-		-		-		(1,311)		-		(1,311)
Net decrease in cash, cash equivalents, and restricted cash		-		(57,726)		(8,094)		3,480		-		(62,340)

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	$	-	$	68,807	$	12,829	$	48,507	$	-	$	130,143



SUPERIOR ENERGY SERVICES, INC. AND SUBSIDIARIES	SUPERIOR ENERGY SERVICES, INC. AND SUBSIDIARIES										SUPERIOR ENERGY SERVICES, INC. AND SUBSIDIARIES
Condensed Consolidating Statements of Cash Flows	Condensed Consolidating Statements of Cash Flows										Condensed Consolidating Statements of Cash Flows
Three Months Ended March 31, 2017
Six Months Ended June 30, 2017											Six Months Ended June 30, 2017
(in thousands)	(in thousands)										(in thousands)
(unaudited)	(unaudited)										(unaudited)
	Parent		Issuer		Guarantor Subsidiaries		Non- Guarantor Subsidiaries		Consolidated		Parent		Issuer		Guarantor Subsidiaries		Non- Guarantor Subsidiaries		Consolidated
Cash flows from operating activities:
Net cash provided by (used in) operating activities	$	6,832	$	(42,698)	$	(560)	$	(6,299)	$	(42,725)	$	13,572	$	11,674	$	(520)	$	(7,579)	$	17,147

Cash flows from investing activities:
Payments for capital expenditures		-		(70)		(16,231)		(4,887)		(21,188)		-		(461)		(45,506)		(10,682)		(56,649)
Other		-		-		4,090		-		4,090		-		-		4,090		-		4,090
Net cash used in investing activities		-		(70)		(12,141)		(4,887)		(17,098)		-		(461)		(41,416)		(10,682)		(52,559)

Cash flows from financing activities:
Changes in notes with affiliated companies, net		1,723		18,058		(17,874)		(1,907)		-		(6,822)		(7,812)		11,026		3,608		-
Other		(8,555)		(151)		-		-		(8,706)		(6,750)		(224)		-		-		(6,974)
Net cash used in financing activities		(6,832)		17,907		(17,874)		(1,907)		(8,706)		(13,572)		(8,036)		11,026		3,608		(6,974)
Effect of exchange rate changes on cash		-		-		-		2,194		2,194		-		-		-		2,093		2,093
Net decrease in cash, cash equivalents, and restricted cash		-		(24,861)		(30,575)		(10,899)		(66,335)		-		3,177		(30,910)		(12,560)		(40,293)

Cash, cash equivalents, and restricted cash at beginning of period		-		127,445		51,789		66,858		246,092		-		127,445		51,789		66,858		246,092
Cash, cash equivalents, and restricted cash at end of period	$	-	$	102,584	$	21,214	$	55,959	$	179,757	$	-	$	130,622	$	20,879	$	54,298	$	205,799

~~At March 31,~~During the six months ended June 30, 2018, the remaining ~~assets~~marine vessels and equipment of the Company’s former subsea construction business were ~~being actively marketed and the Company’s management is committed to selling the remaining assets, which were classified as held for~~disposed of, resulting in $0.8 million loss on sale.

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

~~Income/(loss)~~Loss from discontinued operations for the three and six months ended ~~March 31,~~June 30, 2018 was $1.0 million and $0.7 million, respectively. Loss from discontinued operations for the three and six months ended June 30, 2017 was ~~$0.2~~$1.8 million ~~income~~ and ~~$(2.0)~~$3.8 million, ~~loss,~~ respectively.

In May 2017, the Financial Accounting Standards Board (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 Company adopted the accounting guidance as of January 1, 2018. The adoption of this ASU did not have a material impact on the Company’s condensed consolidated financial statements.

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 Company adopted the accounting guidance as of January 1, 2018. The adoption of this ASU did not have a material impact on the Company’s 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

shown on the statement of cash flows. The Company adopted the accounting guidance as of January 1, 2018 and applied it retrospectively to the periods presented in the Company’s condensed consolidated statements of cash flows. For the ~~three~~six months ended ~~March 31,~~June 30, 2017, net cash used in investing activities was adjusted to exclude the change in restricted cash related to cash held in escrow for the future decommissioning obligations associated with an oil and gas property. The adjustment resulted in a $30.6 million decrease in net cash used in investing activities for the ~~three~~six months ended ~~March 31, 2017.~~June 30, 2018.

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 Company adopted the accounting guidance as of January 1, 2018. The adoption of this ASU did not have a material impact on the Company’s condensed consolidated financial statements.

In May 2014, the FASB issued ASU No. 2014-09, Revenue from Contracts with Customers (Topic 606), which replaced 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 goods or services to customers. The Company adopted the accounting guidance as of January 1, 2018. The Company adopted this ASU using the modified retrospective adoption method. There was no impact on the condensed consolidated financial statements and no cumulative effect adjustment was recognized.

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 the lessee, to be recognized on the balance sheet as a lease and lease liability. Further, the Company will separate leases from other contracts where the Company is either the lessor or lessee when the rights conveyed under the contracts indicate there is a lease. The Company is evaluating the effect ASU 2016-02 will have on its condensed consolidated financial statements. The Company anticipates that its assets and liabilities will increase by a significant amount. The new standard is effective for the Company beginning on January 1, 2019.

Item 2. Management’s Discussion and Analysis of Financial Condition and Results of Operations

This Quarterly Report on Form 10-Q and other documents filed by us with the SEC contain, and future oral or written statements or press releases by us and our management may contain, forward-looking statements within the safe harbor provisions of the Private Securities Litigation Reform Act of 1995. Generally, the words “expects,” “anticipates,” “targets,” “goals,” “projects,” “intends,” “plans,” “believes,” “seeks” and “estimates,” variations of such words and similar expressions identify forward-looking statements, although not all forward-looking statements contain these identifying words. All statements other than statements of historical fact included in this Quarterly Report on Form 10-Q or such other materials regarding our financial position, financial performance, liquidity, strategic alternatives, market outlook, future capital needs, capital allocation plans, business strategies and other plans and objectives of our management for future operations and activities are forward-looking statements. These statements are based on certain assumptions and analyses made by our management in light of its experience and prevailing circumstances on the date such statements are made. Such forward-looking statements, and the assumptions on which they are based, are inherently speculative and are subject to a number of risks and uncertainties that could cause our actual results to differ materially from such statements. Such uncertainties include, but are not limited to: the cyclicality and volatility of the oil and gas industry, including changes in prevailing oil and gas prices or expectations about future prices; operating hazards, including the significant possibility of accidents resulting in personal injury or death, property damage or environmental damage for which we may have limited or no insurance coverage or indemnification rights; the effect of regulatory programs (including regarding worker health and safety laws) and environmental matters on our operations or prospects, including the risk that future changes in the regulation of hydraulic fracturing could reduce or eliminate demand for our pressure pumping and fluid management services, or that future changes in climate change legislation could result in increased operating costs or reduced commodity demand globally; counterparty risks associated with reliance on key suppliers; risks associated with the uncertainty of macroeconomic and business conditions worldwide; changes in competitive and technological factors affecting our operations; credit risk associated with our customer base; the potential inability to retain key employees and skilled workers; challenges with estimating our oil and natural gas reserves and potential liabilities related to our oil and natural gas property; risks associated with potential changes of Bureau of Ocean Energy management security and bonding requirements for offshore platforms; risks inherent in acquiring businesses; risks associated with cyber-attacks; risks associated with business growth during an industry recovery outpacing the capabilities of our infrastructure and workforce; political, legal, economic and other risks and uncertainties associated with our international operations; potential changes in tax laws, adverse positions taken by tax authorities or tax audits impacting our operating results; risks associated with our outstanding debt obligations and the potential effect of limiting our future growth and operations; our continued access to credit markets on favorable terms; the impact that unfavorable or unusual weather conditions could have on our operations; claims, litigation or other proceedings that require cash payments or could impair financial condition; not realizing the benefits of acquisitions or divestitures and volatility of the Company’s common ~~stock .~~stock. These risks and other uncertainties related to our business are described in detail in Item 1A of our Annual Report on Form 10-K for the year ended December 31, 2017. Although we believe that the expectations reflected in such forward-looking statements are reasonable, we can give no assurance that such expectations will prove to be correct. Investors are cautioned that many of the assumptions on which our forward-looking statements are based are likely to change after such statements are made, including for example the market prices of oil and gas and regulations affecting oil and gas operations, which we cannot control or anticipate. Further, we may make changes to our business strategies and plans (including our capital spending and capital allocation plans) at any time and without notice, based on any changes in the above-listed factors, our assumptions or otherwise, any of which could or will affect our results. For all these reasons, actual events and results may differ materially from those anticipated, estimated, projected or implied by us in our forward-looking statements. We undertake no obligation to update any of our forward-looking statements for any reason and, notwithstanding any changes in our assumptions, changes in our business plans, our actual experience, or other changes. You are cautioned not to place undue reliance on these forward-looking statements, which speak only as of the date hereof.

We provide a wide variety of services and products to the energy industry. We serve major, national and independent oil and natural gas exploration and production companies around the world and offer products and services with respect to the various phases of a well’s economic life cycle. We report our operating results in four business segments: Drilling Products and Services; Onshore Completion and Workover Services; Production Services; and Technical Solutions.

The oil and gas industry is both cyclical and seasonal. The level of spending by oil and gas companies is highly influenced by current and expected demand and future prices of oil and natural gas. Changes in spending result in an increased or decreased demand for our services and products. Rig count is an indicator of the level of spending by oil and gas companies. Our financial performance is significantly affected by the rig count in the U.S. land and offshore market areas as well as oil and natural gas prices and worldwide rig activity, which are summarized in the tables below.



	Three Months Ended March 31,					Three Months Ended June 30,					Six Months Ended June 30,
	2018		2017		% Change	2018		2017		% Change	2018		2017		% Change
Worldwide Rig Count (1)
U.S.:
Land		951		722	32%		1,021		874	17%		986		798	24%
Offshore		16		21	-24%		18		21	-14%		17		21	-19%
Total		967		743	30%		1,039		895	16%		1,003		819	22%
International (2)		970		939	3%		968		958	1%		969		948	2%
Worldwide Total		1,937		1,682	15%		2,007		1,853	8%		1,972		1,767	12%

Commodity Prices (average)
Crude Oil (West Texas Intermediate)	$	62.91	$	51.62	22%	$	68.07	$	48.10	42%	$	65.55	$	49.85	31%
Natural Gas (Henry Hub)	$	3.07	$	3.02	2%	$	2.85	$	3.08	-7%	$	2.96	$	3.05	-3%

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

Comparison of the Results of Operations for the Three Months Ended June 30, 2018 and March 31, 2018 ~~and December 31, 2017~~

For the ~~three months ended March 31,~~second quarter of 2018, our revenue was ~~$482.3~~$535.5 million and the net loss from continuing operations was ~~$59.9~~$25.4 million, or a ~~$0.39~~$0.16 loss per share. Net loss was ~~$59.7~~$26.4 million, or a ~~$0.39~~$0.17 loss per share. This compares to net ~~income~~loss from continuing operations of ~~$21.9~~$59.9 million, or ~~$0.14~~$0.39 loss per ~~diluted~~ share for the ~~three months ended December 31, 2017,~~first quarter of 2018, on revenue of ~~$497.0~~$482.3 million. Net ~~income~~loss for the ~~three months ended December 31, 2017~~first quarter of 2018 was ~~$8.6~~$59.7 million, or ~~$0.06~~$0.39 loss per ~~diluted~~ share. Worldwide rig count increased by 4% during the three months ended March 31, 2018 from 1,871 rigs for the three months ended December 31, 2017. U.S. land rig count increased by 5% for the three months ended March 31, 2018 from 902 rigs for the three months ended December 31, 2017. The increase in U.S land market drilling activity largely contributed to the overall increase in our total revenues for the ~~three months ended March 31,~~second quarter of 2018.

~~First~~Second quarter 2018 revenue in our Drilling Products and Services segment increased 8%10% sequentially to ~~$85.2~~$94.0 million, as compared to ~~$79.2~~$85.2 million in the ~~fourth~~first quarter of ~~2017.~~2018. U.S. land revenue increased ~~16%~~7% sequentially to ~~$40.7~~$43.4 million due to the increase in drilling activity during the quarter. International revenue increased 9%17% sequentially to ~~$23.5~~$27.3 million due to an increase in rentals of premium drill pipe. Gulf of Mexico revenue ~~decreased 7%~~increased 11% sequentially to ~~$21.0~~$23.3 million primarily due to ~~a decrease~~an increase in ~~demand for accommodation units.~~rentals of premium drill pipe.

~~First~~Second quarter 2018 revenue in our Onshore Completion and Workover Services segment ~~remained flat sequentially at~~increased 19% to 276.2 million, as compared to $231.5 ~~million. All~~million for the first quarter of ~~this segment’s revenue is derived from the U.S. land market area.~~2018.

~~First~~Second quarter 2018 revenue in our Production Services segment ~~decreased 15%~~increased 1% sequentially to ~~$100.8~~$102.0 million, as compared to ~~$118.2~~$100.8 million in the ~~fourth~~first quarter of ~~2017.~~2018. International revenue increased 31% sequentially to $40.5 million primarily due to an increase in hydraulic workover and snubbing activities. The increase was partially offset by decreases in revenue from U.S. land and Gulf of Mexico market areas. U.S. land revenue decreased 5%9% sequentially to ~~$52.5~~$47.9 million and Gulf of Mexico revenue decreased ~~12%~~22% sequentially to ~~$17.5~~$13.6 million primarily due to a decrease in pressure control, hydraulic workover and snubbing and ~~coil~~coiled tubing activities in those markets. ~~International revenue decreased 29% sequentially to $30.8 million primarily due to a decrease in hydraulic workover and snubbing activities.~~

~~First~~Second quarter 2018 revenue in our Technical Solutions segment decreased 3%2% sequentially to ~~$64.8~~$63.3 million, as compared to ~~$66.9~~$64.8 million in the ~~fourth~~first quarter of ~~2017.~~2018. Gulf of Mexico revenue ~~increased 10%~~decreased 6% sequentially to ~~$37.5~~$35.3 million due to ~~an increase~~a decrease in ~~oil and gas activities and~~demand for completion tools and products. ~~U.S. land~~International revenue decreased ~~16%~~2% sequentially to ~~$6.8 million and international revenue decreased 17% sequentially to $20.5~~$20.1 million primarily due to a decrease in demand for well control services. These decreases were offset by an increase from U.S. land revenue, which increased 16% sequentially to $7.9 million. The increase in revenue was primarily due to an increase in demand for completion tools and products.

Comparison of the Results of Operations for the Three Months Ended ~~March 31,~~June 30, 2018 and ~~March 31,~~ 2017

For the three months ended ~~March 31,~~June 30, 2018, our revenue was ~~$482.3~~$535.5 million, an increase of ~~$81.4~~$ 65.4 million or ~~20%~~14%, as compared to the same period in 2017. The increase is largely attributable to a ~~32%~~17% increase in the U.S. land rig count. The net loss from continuing operations was ~~$59.9~~$25.4 million, or a ~~$0.39~~$0.16 loss per share. Net loss was ~~$59.7~~$26.4 million, or a ~~$0.39~~$0.17 loss per share. This compares to a net loss from continuing operations for the three months ended ~~March 31,~~June 30, 2017 of ~~$89.7~~$62.0 million, or a ~~$0.59~~$0.41 loss per share. Net loss for the three months ended ~~March 31,~~June 30, 2017 was ~~$91.7~~$63.8 million, or a ~~$0.60~~$0.42 loss per share.

The following table compares our operating results for the three months ended ~~March 31,~~June 30, 2018 and 2017 (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
	2018		2017		Change		%	2018		%	2017		%	Change		2018		2017		Change		%	2018		%	2017		%	Change
Drilling Products and
Services	$	85,202	$	68,431	$	16,771	25%	$	35,070	41%	$	29,058	42%	$	6,012	$	94,033	$	68,827	$	25,206	37%	$	36,599	39%	$	33,002	48%	$	3,597
Onshore Completion and
Workover Services		231,489		204,979		26,510	13%		180,651	78%		193,689	94%		(13,038)		276,242		249,079		27,163	11%		210,206	76%		207,021	83%		3,185
Production Services		100,717		68,605		32,112	47%		85,936	85%		60,780	89%		25,156		102,004		88,606		13,398	15%		85,129	83%		71,377	81%		13,752
Technical Solutions		64,910		58,921		5,989	10%		41,803	64%		38,459	65%		3,344		63,269		63,556		(287)	0%		37,876	60%		40,402	64%		(2,526)
Total	$	482,318	$	400,936	$	81,382	20%	$	343,460	71%	$	321,986	80%	$	21,474	$	535,548	$	470,068	$	65,480	14%	$	369,810	69%	$	351,802	75%	$	18,008

Revenue from our Drilling Products and Services segment increased ~~25%~~37% to ~~$85.2~~$94.0 million for the three months ended ~~March 31,~~June 30, 2018, as compared to ~~$68.4~~$68.8 million for the same period in 2017. Cost of services and rentals as a percentage of revenue decreased to ~~41%~~39% of segment revenue for the three months ended ~~March 31,~~June 30, 2018, as compared to ~~42%~~48% for the same period in 2017. Revenue from the U.S. land market areas increased ~~92%~~56% as a result of increases in revenue 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 rig count. ~~The increase was partially offset by decreases in revenue from the Gulf of Mexico and international markets.~~ Revenue from the Gulf of Mexico market area ~~decreased 11%~~increased 4% primarily due to ~~a decrease~~an increase in revenue from rentals of ~~bottom hole assemblies.~~premium drill pipe. The revenue from the international market areas ~~decreased 1%~~increased 46% primarily due to ~~decreases in revenue from rentals of accommodation units and bottom hole assemblies, partially offset by~~ an increase in revenue from rentals of premium drill pipe.

Revenue from our Onshore Completion and Workover Services segment increased ~~13%~~11% to ~~$231.5~~$276.2 million for the three months ended ~~March 31,~~June 30, 2018, as compared to ~~$205.0~~$249.1 million for the same period in 2017. All of this segment’s revenue is derived from the U.S. land market ~~area, in which rig count increased by 32%.~~area. Cost of services and rentals as a percentage of revenue decreased to ~~78%~~76% of segment revenue for the three months ended ~~March 31,~~June 30, 2018, as compared to ~~94%~~83% for the same period in 2017, primarily due to improved pricing and efficiencies, as well as decreased start-up and fleet reactivation costs for our pressure pumping business. The increase in revenue is primarily attributable to ~~an increase in~~increased activity in our pressure pumping and ~~fluid management~~well services businesses.

Revenue from our Production Services segment for the three months ended ~~March 31,~~June 30, 2018 increased by ~~47%~~15% to ~~$100.8~~$102.0 million, as compared to ~~$68.6~~$88.6 million for the same period in 2017. Cost of services and rentals as a percentage of revenue ~~decreased~~increased to ~~85%~~83% of segment revenue for the three months ended ~~March 31,~~June 30, 2018, as compared to ~~89%~~81% for the same period in 2017. Revenue from the U.S. land market area increased ~~124%~~45%, primarily due to increased activity in coiled tubing and pressure control services. The revenue from the international market areas increased ~~12%~~14%, primarily due to an increase in hydraulic workover and snubbing and ~~electric line~~coiled tubing activities. These increases were partially offset by a decrease in revenue from the Gulf of Mexico market area. Revenue from Gulf of Mexico market area decreased 1%32%, primarily due to a decrease in hydraulic workover and snubbing activities, slickline services and specialty ~~rentals, partially offset by an increase in electric line services and hydraulic workover and snubbing activities.~~rentals.

Revenue from our Technical Solutions segment ~~increased 10% to $64.8~~remained flat at $63.3 million for the three months ended ~~March 31,~~June 30, 2018, as compared to ~~$58.9 million for~~ the same period in 2017. Cost of services and rentals as a percentage of revenue decreased to ~~64%~~60% of segment revenue for the three months ended ~~March 31,~~June 30, 2018, as compared to ~~65%~~64% for the same period in 2017. Revenue ~~derived from the Gulf of Mexico market area increased 11%, primarily due to an increase in plug and abandonment services. Revenue~~ from the international market areas increased ~~27%~~48%, primarily due to an increase in demand for well control services. ~~These increases were offset by a decrease in revenue~~Revenue derived from the ~~U.S. land~~Gulf of Mexico market area ~~which~~ decreased ~~25%~~16%, primarily due to a decrease in demand for completion tools and products. Revenue from the U.S. land market area remained unchanged.

Depreciation, depletion, amortization and accretion decreased to ~~$105.7~~$98.0 million during the three months ended ~~March 31,~~June 30, 2018 from ~~$114.3~~$108.1 million during the same period in 2017. Depreciation and amortization expense decreased for our Drilling Products and Services segment by ~~$5.1~~$5.0 million, or 15%,; for our Production Services segment by $5.9 million, or 29%; and for our Technical Solutions segment by $2.0 million, or 24%. Depreciation and amortization expense increased for our Onshore Completion and Workover Services segment by ~~$1.5~~$2.8 million, or ~~3%; for our Production Services segment by $1.3 million, or~~ 6%~~; and for our Technical Solutions segment by $0.6 million, or 8%~~. Depreciation expense for Corporate and Other remained flat. The decrease in depreciation, depletion, amortization and accretion is primarily due to assets becoming fully depreciated.

General and administrative expenses were ~~$75.8~~$69.9 million for the three months ended ~~March 31,~~June 30, 2018, as compared to ~~$75.5~~$76.7 million during the same period in 2017. Despite a ~~20%~~14% increase in revenue, our total general and administrative expenses ~~remained flat.~~decreased 9%. This demonstrates that we continue to benefit from the steps taken during the industry downturn, to reduce our cost structure and integrate product and service lines.

Our effective income tax rate for the three months ended ~~March 31,~~June 30, 2018 was 13% compared to a 33% effective income tax rate for the same period in 2017. The effective tax rate for the three months ended ~~March 31,~~June 30, 2018 was primarily impacted by the enactment of the Tax Cuts and Jobs Act of 2017, including a reduced U.S. corporate tax rate.

Comparison of the Results of Operations for the Six Months Ended June 30, 2018 and 2017

For the six months ended June 30, 2018, our revenue was $1,017.9 million, an increase of $ 146.9 million or 17%, as compared to the same period in 2017. The increase is largely attributable to a 24% increase in the U.S. land rig count. The net loss from continuing operations was $85.4 million, or a $0.56 loss per share. Net loss was $86.1 million, or a $0.56 loss per share. This compares to a net loss from continuing operations for the six months ended June 30, 2017 of $151.7 million, or a $1.00 loss per share. Net loss for the six months ended June 30, 2017 was $155.5 million, or a $1.02 loss per share.

The following table compares our operating results for the six months ended June 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
	2018		2017		Change		%	2018		%	2017		%	Change

Drilling Products and
Services	$	179,235	$	137,258	$	41,977	31%	$	71,669	40%	$	62,060	45%	$	9,609
Onshore Completion and
Workover Services		507,731		454,058		53,673	12%		390,857	77%		400,710	88%		(9,853)
Production Services		202,721		157,211		45,510	29%		171,065	84%		132,157	84%		38,908
Technical Solutions		128,179		122,477		5,702	5%		79,679	62%		78,861	64%		818
Total	$	1,017,866	$	871,004	$	146,862	17%	$	713,270	70%	$	673,788	77%	$	39,482

Revenue from our Drilling Products and Services segment increased 31% to $179.2 million for the six months ended June 30, 2018, as compared to $137.3 million for the same period in 2017. Cost of services and rentals as a percentage of revenue decreased to 40% of segment revenue for the six months ended June 30, 2018, as compared to 45% for the same period in 2017. Revenue from the U.S. land market areas increased 72% as a result of increases in revenue 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 rig count. The revenue from the international market areas increased 19% primarily due to an increase in revenue from rentals of premium drill pipe. Revenue from the Gulf of Mexico market area decreased 3% primarily due to a decrease in revenue from rentals of bottom hole assemblies.

Revenue from our Onshore Completion and Workover Services segment increased 12% to $507.7 million for the six months ended June 30, 2018, as compared to $454.0 million for the same period in 2017. All of this segment’s revenue is derived from the U.S. land market

area. Cost of services and rentals as a percentage of revenue decreased to 77% of segment revenue for the six months ended June 30, 2018, as compared to 88% for the same period in 2017, primarily due to improved pricing and efficiencies, as well as decreased start-up and fleet reactivation costs for our pressure pumping business. The increase in revenue is primarily attributable to increased activity in our pressure pumping, fluid management and well services businesses.

Revenue from our Production Services segment for the six months ended June 30, 2018 increased by 29% to $202.7 million, as compared to $157.2 million for the same period in 2017. Cost of services and rentals as a percentage of revenue remained unchanged at 84% of segment revenue for the six months ended June 30, 2018, as compared to the same period in 2017. Revenue from the U.S. land market area increased 78%, primarily due to increased activity in coiled tubing and pressure control services. The revenue from the international market areas increased 13%, primarily due to an increase in hydraulic workover and snubbing and coiled tubing activities. These increases were partially offset by a decrease in revenue from the Gulf of Mexico market area. Revenue from Gulf of Mexico market area decreased 17%, primarily due to a decrease in slickline services, specialty rentals and coiled tubing activities.

Revenue from our Technical Solutions segment increased 5% to $128.2 million for the six months ended June 30, 2018, as compared to $122.5 million for the same period in 2017. Cost of services and rentals as a percentage of revenue decreased to 62% of segment revenue for the six months ended June 30, 2018, as compared to 64% for the same period in 2017. Revenue from the international market areas increased 37%, primarily due to an increase in demand for well control services. Revenue derived from the Gulf of Mexico market area decreased 4%, primarily due to a decrease in demand for completion tools and products. Revenue from the U.S. land market area decreased 14%, primarily due to a decrease in demand for completion tools and products.

Depreciation, depletion, amortization and accretion decreased to $203.7 million during the six months ended June 30, 2018 from $222.4 million during the same period in 2017. Depreciation and amortization expense decreased for our Drilling Products and Services segment by $10.1 million, or 15%; for our Production Services segment by $7.2 million, or 18%; and for our Technical Solutions segment by $2.7 million, or 16%. Depreciation and amortization expense increased for our Onshore Completion and Workover Services segment by $1.3 million, or 1%. Depreciation expense for Corporate and Other remained flat. The decrease in depreciation, depletion, amortization and accretion is primarily due to assets becoming fully depreciated.

General and administrative expenses were $145.7 million for the six months ended June 30, 2018, as compared to $152.2 million during the same period in 2017. Despite a 17% increase in revenue, our total general and administrative expenses decreased 4%. This demonstrates that we continue to benefit from the steps taken during the industry downturn, to reduce our cost structure and integrate product and service lines.

Our effective income tax rate for the six months ended June 30, 2018 was 13% compared to a 33% effective income tax rate for the same period in 2017. The effective tax rate for the six months ended June 30, 2018 was primarily impacted by the enactment of the Tax Cuts and Jobs Act of 2017, including a reduced U.S. corporate tax rate.

For the ~~three~~six months ended ~~March 31,~~June 30, 2018, we generated net cash ~~used in~~from operating activities ~~was $25.0~~of $39.4 million, as compared to ~~cash used in operating activities of $42.7~~$17.1 million for the same period in 2017. 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 ~~$90.4~~$118.5 million at ~~March 31,~~June 30, 2018, compared to $172.0 million at December 31, 2017.

We spent ~~$65.7~~$119.8 million of cash on capital expenditures during the ~~three~~six months ended ~~March 31,~~June 30, 2018. Approximately ~~$13.3~~$28.0 million was used to expand and maintain our Drilling Products and Services segment’s equipment inventory. Approximately ~~$48.6~~$77.1 million was spent on our Onshore Completion and Workover Services segment, primarily to rebuild our pressure pumping fleet. Approximately ~~$0.8~~$3.5 million and ~~$2.1~~$6.9 million was spent in our Production Services and Technical Solutions segments, respectively and ~~$0.9~~$4.3 million was spent in Corporate and Other. We expect to spend up to approximately $225 million on capital expenditures during 2018. We plan to continue adjusting our capital spending to align with market conditions and customer demand.

We have a $300 million asset-based revolving credit facility which matures in October 2022. The borrowing base under the credit facility is calculated based on a formula referencing the borrower’s and the subsidiary guarantors’ eligible accounts receivable, eligible

inventory and eligible premium rental drill pipe less reserves. Availability under the credit facility 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 the 7 1/8% senior unsecured notes due 2021. At ~~March 31,~~June 30, 2018, the borrowing base was ~~$267.7~~$263.0 million and we had ~~$35.3~~$37.9 million of letters of credit outstanding that reduced our borrowing availability under the revolving credit facility. ~~The borrowing base may increase or decrease as a result of, among other things, changes to the Company’s consolidated tangible assets.~~ 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 ~~March 31,~~June 30, 2018, we were in compliance with all such covenants.

We have outstanding $500 million of 7 3/4% senior unsecured notes due September 2024. The indenture governing the 7 3/4% senior unsecured notes due 2024 requires semi-annual interest payments on March 15th and September 15th of each year, beginning on March 15, 2018, through the maturity date of September 15, 2024. The indenture contains customary events of default and requires that we satisfy various covenants. At ~~March 31,~~June 30, 2018, we were in compliance with all such covenants.

We also have outstanding $800 million of 7 1/8% unsecured senior notes due December 2021. The indenture governing the 7 1/8% senior notes due 2021 requires semi-annual interest payments on June 15th and December 15th of 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 ~~March 31,~~June 30, 2018, we were in compliance with all such covenants.

At ~~March 31,~~June 30, 2018, we had no off-balance sheet arrangements and no hedging contracts.

See Part I, Item 1, “Financial Statements – Note 14 – New Accounting Pronouncements.”

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.

Because we operate in a number of countries throughout the world, we conduct a portion of our business in currencies other than the U.S. dollar. The functional currency for our international operations, other than certain operations in the United Kingdom and Europe, is the U.S. dollar, but a portion of the revenues from our international operations is paid in foreign currencies. The effects of foreign currency fluctuations are partly mitigated because local expenses of such international operations are also generally denominated in the same currency. We continually monitor the currency exchange risks associated with all contracts not denominated in the U.S. dollar.

Assets and liabilities of certain subsidiaries in the United Kingdom and Europe are translated at end of period exchange rates, while income and expenses are translated at average rates for the period. Translation gains and losses are reported as the foreign currency translation component of accumulated other comprehensive loss in stockholders’ equity.

We do not hold derivatives for trading purposes or use derivatives with complex features. When we believe prudent, we enter into forward foreign exchange contracts to hedge the impact of foreign currency fluctuations. We do not enter into forward foreign exchange contracts for trading or speculative purposes. At ~~March 31,~~June 30, 2018, we had no outstanding foreign currency forward contracts.

Our revenues ~~profitability~~ and ~~future rate of growth~~profitability significantly depend upon the market prices of oil and natural gas. ~~Lower prices may also reduce the amount of oil and natural gas that can economically be produced.~~

For additional discussion, see Part 1, Item 2, “Management’s Discussion and Analysis of Financial Condition and Results of Operations—Liquidity and Capital Resources.”

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.

For information regarding certain risks relating to our operations, any of which could negatively affect our business, financial condition, operating results or prospects, see Item 1A, “Risk Factors” of our Annual Report on Form 10-K for the year ended December 31, 2017.

(1) Through our stock incentive plans, ~~457,481~~2,688 shares were delivered to us by our employees to satisfy their tax withholding requirements upon vesting of restricted stock units.

Pursuant to the requirements of the Securities Exchange Act of 1934, the Registrant has duly caused this report to be signed on its behalf by the undersigned thereunto duly authorized.


	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)


Large accelerated filer ☒		Accelerated filer ☐
Non-accelerated filer ☐	(doDo not check if a smaller reporting company)	Smaller reporting company ☐
		Emerging growth company ☐

(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. There has been no change in our internal control over financial reporting that occurred during the three months ended ~~March 31,~~June 30, 2018, 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
January 1 - 31, 2018	456,896	$	11.27
February 1 - 28, 2018	585	$	10.37
March 1 - 31, 2018	-	$	-
Total	457,481	$	11.27



Period	(a) Total Number of Shares Purchased (1)	(b) Average Price Paid per Share
April 1 - 30, 2018	260	$	11.31
May 1 - 31, 2018	1,245	$	11.82
June 1 - 30, 2018	1,183	$	10.09
Total	2,688	$	11.01



	March 31, 2018		December 31, 2017
Current assets	$	2,860	$	3,144
Property, plant and equipment, net		1,000		10,500
Total assets	$	3,860	$	13,644
Current liabilities	$	4,851	$	6,463


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*	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.
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



		By:	/s/ Westervelt T. Ballard, Jr.
			Westervelt T. Ballard, Jr. Executive Vice President, Chief Financial Officer and Treasurer


		By:	/s/ James W. Spexarth
			James W. Spexarth
			Chief Accounting Officer

Date:	~~April~~July 25, 2018



	FORM 10-Q