Superior - AB Freeman School of Business - Tulane University

December 6, 2007 

SUPERIOR ENERGY 

SERVICES INC. 

SPN/NYSE 

Continuing Coverage: Superior Energy 

at a Superior Price 

Investment Rating: Market Outperform 

PRICE: $ 35.84 S&P 500: 1,507.34 DJIA: 13,619.89 RUSSELL 2000: 786.95 

Revenue diversification continues with expansion into onshore and 

international markets. 

Bundled services offer drilling and production-related solutions from 

“soup to nuts.” 

Innovative derrick barges primed to deliver services to deepwater drill 

markets. 

Liquid balance sheet creates opportunities for acquisitions. 

Our 12-month target price is $44.30. 

Valuation 2006 A 2007 E 2008 E 

EPS $ 2.32 $ 3.52 $ 4.10 

P/E 15.4x 10.2x 8.7x 

CFPS $ 3.93 $ 6.29 $ 7.74 

P/CFPS 9.1x 5.7x 4.6x 

Market Capitalization Stock Data 

Equity Market Cap (MM): $ 2,885.05 52-Week Range: $28.20 - $41.92 

Enterprise Value (MM): $ 3,582.65 12-Month Stock Performance: 6.32% 

Shares Outstanding (MM): 80.50 Dividend Yield: Nil 

Estimated Float (MM): 80.30 Book Value Per Share: $ 11.77 

6-Mo. Avg. Daily Volume: 303,297 Beta: 0.93 

Company Quick View: 

Location: Harvey, Louisiana 

Industry: Oilfield Service and Equipment 

Description: Superior Energy Services is a leading provider of specialized oilfield 

services and equipment related to drilling and production needs of oil and gas 

companies. 

Key Products & Services: Well intervention, rental tools, marine services, and oil and 

gas production 

Company Website: www.superiorenergy.com 

Analysts: 

Thad Brill Jr. 

Kristen Elmer 

Meredith Martin 

Wes Swackhamer 

Investment Research Manager: 

Kristen Pickens 

Wall Street's Farm Team 

The BURKENROAD REPORTS are produced solely as a part of an educational program of Tulane University's 

A.B. Freeman School of Business. The reports are not investment advice and you should not and may not rely 

on them in making any investment decision. You should consult an investment professional and/or conduct your 

own primary research regarding any potential investment. 

BURKENROAD REPORTS

Superior Energy Services Inc. (SPN) BURKENROAD REPORTS (www.burkenroad.org) December 6, 2007 

STOCK PRICE 

PERFORMANCE 

Figure 1: 

5-year Stock Price 

Performance 

INVESTMENT 

SUMMARY 

BEN GRAHAM 

ANALYSIS 

We give Superior Energy Services a Market Outperform rating and 

forecast that Superior’s stock price will increase from $35.84 to $44.30 per 

share by the end of 2008. This price was developed using a weighted 

average of certain valuations: the price-to-earnings multiplier method, 

discounted cash flows, price-to-book value, price-to-cash flows, and 

enterprise value-to-EBITDA. Superior has aggressively expanded into both 

onshore and international markets to diversify revenue production outside 

of the Gulf of Mexico. In fact, business activity outside of the Gulf of 

Mexico now accounts for more than half of Superior’s revenues. Its 

primary business risk is related to the volatility of oil and gas prices. 

Volatility of prices affects demand for services by oil and gas companies. 

The current rise of oil prices has increased production-related spending by 

oil companies, which in turn benefits Superior. A highly liquid balance 

sheet allows Superior to continue exploring investment and acquisition 

opportunities as they occur. Superior has also begun to develop lasting 

relationships with international oil companies that seek to build drilling 

and production-related capabilities. The offering of bundled services and 

cross-training of local workers give Superior a competitive advantage in 

working with foreign companies. 

Ben Graham is considered the father of equity analysis. Graham’s analysis 

identified stocks that were either undervalued or had fallen out of favor 

with investors. A number of variables are used to determine the strength of 

a company relative to its current stock price. The analysis is one of many 

used in this report to gauge the current price level of Superior’s equity. 

After calculating the eight hurdles, Ben Graham would identify Superior as 

an undervalued stock because Superior met more than half of the hurdles 

appreciate (Table 8 at the end of this report contains our complete Ben 

Graham analysis). 

2


PREVIOUS 

BURKENROAD 

RATINGS AND 

PRICES 

INVESTMENT 

THESIS 

Revenue 

diversification 

continues with 

expansion in 

onshore and 

international 

markets. 

Bundled services 

offer drilling and 

production-related 

solutions from 

“soup to nuts.” 

Innovative derrick 

barges primed to 

deliver services to 

deepwater markets. 

Liquid balance 

sheet creates 

opportunities for 

acquisitions. 

Table 1: Burkenroad Ratings and Prices 

Date Rating Price 

12/01/06 Market Outperform $33.31 



02/14/03 Market Perform $7.95 

11/14/01 Buy $7.78 


With our 12-month target price of $44.30, we recommend a Market 

Outperform rating for Superior Energy Services for the following reasons. 

Superior continues to diversify revenue production from markets outside of 

the Gulf of Mexico. Less than a decade ago, Superior’s international 

revenue totaled $5 million. In 2007, it is estimated international revenue 

will surpass $300 million. The purchase of Warrior Energy Services in 

December 2006 ensured the domestic land market would become another 

growing revenue source for Superior. The onshore market has accounted 

for approximately 30% of Superior’s revenue thus far in 2007, versus just 

6% in 2005. Superior has continued to maintain its large market share of 

oilfield service revenue in the Gulf of Mexico where it owns a number of 

oil and gas properties. 

Superior is capable of delivering integrated services to meet its customers’ 

needs throughout the life of a project. The Company provides well 

intervention services, rental tools, and the liftboats necessary to deliver and 

execute these services. Few oilfield service companies offer this broad 

range of drilling and production-related services. This strategy has given 

Superior a competitive advantage by hedging the risk associated with 

individual segments and by earning a reputation for continuity and 

reliability. 

Superior’s first derrick barge, DB Performance, recently completed a 

successful service contract off the coast of Malaysia. The barge proved its 

usefulness and profitability by bringing in average daily cash flows of over 

$30,000. In addition, the Malaysian company has ordered an additional 

barge for purchase that is currently under construction in China. A third 

barge is also being constructed for Superior’s use on deepwater projects in 

the Gulf of Mexico or internationally. 

Superior’s EBITDA margin has risen 25% since 2005. The result is a 

balance sheet flush with cash that allows the Company to pursue 

opportunities for geographic growth. Management’s current strategy is to 

make acquisitions in international markets while funding its capital 

3


expenditures with internally generated cash flows. Look for Superior to 

continue making acquisitions that provide exposure to those international 

markets with high operating margins. 

VALUATION We calculated Superior’s 12-month target price of $44.30 using a 

combination of models: the Discounted Cash Flow method, the Relative 

Multiplier method of P/E, the Price/Book Value, the PEG method, the 

Relative Multiplier method of Enterprise Value/EBITDA, and Relative 

Multiplier method of Price/Cash Flow per share. Table 2 shows the weight 

we assigned to each valuation method and the 12- month weighted target 

price. 

Discounted Cash 

Flow Method 

The Relative 

Multiplier Methods 

The purpose of this method is to estimate Superior’s future free cash flows 

and discount them to the present. Our group analyzed growth rates in cash 

flow through perpetuity and multiplied the result by the rate of after-tax 

WACC. This method was weighted the most because we feel the 

Company’s cash flow is the best valuation tool because of Superior’s 

relatively low debt level. 

The following valuation methods were weighted equally because of our 

judgment that the combined effect of these methods resulted in a valuation 

that is both extensive and detailed. 

P/E To calculate a target price using the relative multiplier method for P/E, we 

first produced the average P/E of Superior’s peer group. The result was 

then multiplied by Superior’s 12-month forecasted earnings per share. 

Price/Book Value The P/BV relative multiplier method was calculated by multiplying the 

Company’s peer group P/BV by the Company’s 12-month forecasted book 

value per share. This method is useful because it accounts for Superior’s 

capital-intense unique fixed assets. 

Enterprise 

Value/EBITDA 

Price/Cash Flow 

per Share 

Superior’s enterprise value was determined by adding its equity market 

capitalization and debt, and from that figure, subtracting the Company’s 

cash and cash equivalents. This number was then divided by Superior’s 

EBITDA relative to its peers. 

Our target price using the price/cash flow per share was generated by 

calculating the average P/CFPS of the Company’s peers and multiplying 

the result by Superior’s projected 12-month CFPS. 

PEG Method We determined the target price resulting from the PEG method by 

multiplying the 12-month forecast of earnings per share by the five-year 

growth rate. The growth rate was computed using historical EPS. 

4

INDUSTRY 

ANALYSIS 


Table 2: Stock Valuation Methods & Target Price 

Method Price Weight 

DCF $40.93 25% 

P/E $49.06 15% 

P/BV $40.71 15% 

PEG $31.85 15% 

EV/EBITDA $46.14 15% 

P/CFPS $59.36 15% 

12-month Target Price $44.30 100% 

Superior Energy Services operates within the oil and gas field services and 

equipment industry, which consists of manufacturers of oil rigs and 

equipment and providers of supplies and services to companies involved in 

the drilling, maintenance, and completion of oil and gas wells. Superior 

competes within a global industry, where the United States in 2006 made 

up only 18.3% of the world’s market value. This number is expected to 

increase because several countries with promising or existing wells lack 

the technology that many United States-based companies have already 

developed. Figure 2 shows the breakdown by percentage of market 

segmentation. 

5 

Figure 2 

Source: Datamonitor


Market Overview The oil and gas field services and equipment industry within the United 

States currently consists of over 8,000 companies, with more than half of 

the companies employing five people or fewer. Globally, this industry 

generated $124.3 billion in total revenues in 2006. Customers include both 

major and smaller independent oil and gas producers, and are obtained 

through either direct contracts or competitive bidding. The industry is labor 

intensive with the exception of the equipment segment. Figure 3 illustrates 

the relatively high fragmentation of this industry, in which the five largest 

companies share less than 35% of the market share. 

6 

Figure 3 

Source: Datamonitor 

Market Analysis The most important price drivers in this industry are the demand for oil and 

gas, which have a history of volatility and cyclicality. Company activity 

increases as the demand and price for oil and gas increase. In addition to 

price of and demand for oil and gas, the number of operating liftboats and 

rigs affect earnings and revenue. A higher number of operating liftboats 

and rigs can result in more production of oil and gas. The competing 

companies are also highly affected by seasonality, and are increasingly 

aware of and responsive to weather conditions, especially in the wake of 

Hurricane Katrina. Seasonality and the threat of serious hurricanes and 

tropical storms have had the recent effect of shifting demand from the Gulf 

of Mexico to different global locations, because U.S. regulations and 

guidelines of the Minerals Management Services have become more 

stringent and insurance expenses have increased. Additional government 

regulation includes rules regarding the environment, storage, handling, and 

emission of oil and gas. Beyond the Gulf, demand is still growing, which 

has caused drilling activity to grow steadily over the years, as 

demonstrated in Figure 4.


Figure 4: Active Rig Count and Utilization 

7 

Source: Datamonitor 

The compounded annual growth rate of the global industry’s market value 

between 2002 and 2006 was 12.7%, when the steady growth of around 

15% for the first four years was disrupted with a dismal 4% growth rate in 

2006. Global market growth is forecasted to remain stable around 4% for 

the next five years, despite emerging opportunities abroad, including many 

in Asia-Pacific, the Middle East, West Africa, and the North Sea. 

Superior’s Role Superior Energy Services fits into this industry as a large-size service 

provider, focusing on well intervention, rental tools, marine services, and 

oil and gas operations. Superior has taken active steps to maintain growth 

in this seasonal and cyclical industry. Although 50% of current business is 

within the Gulf of Mexico, global expansion has already begun, including 

work in the North Sea and Asia Pacific. Superior also helps control the 

risks associated with fluctuating demand by diversifying and expanding its 

offered services, including its oil and gas operations and rental tools, and 

training employees in more than one service. 

Threat of Entry Entrance into the oil and gas equipment service industry is difficult. High 

fixed costs on capital requirements are necessary to manufacture or 

purchase specialized industrial assets. In addition, the labor costs required 

for training and employing a highly skilled workforce are high. Moreover, 

the specialized assets inhibit both entrance and exit strategies in the 

industry. These specialized assets are not easily salvaged should a venture 

prove unprofitable. As a result, we are seeing continued consolidation 

within the industry as companies pursue aggressive expansion into global 

markets through acquisitions.


COMPANY 

DESCRIPTION 

Rivalry Rivalry in the oilfield service industry is moderate to intense. Strategy is 

critical in this high stakes industry. Most companies specialize in only a 

few services. Superior is unique because it offers comprehensive services 

across products. It has the capacity to service an oil well from “soup to 

nuts” by using its transportation equipment to deliver its wide range of 

specialized equipment and services. These bundled services are what set 

Superior apart from its competition. 

In foreign markets, there are emerging opportunities for strong and 

reputable companies to expand operations. Drilling and production activity 

has increased globally. Superior has entered foreign markets primarily 

through its rental tools segment, which provides the high-profit margins for 

its business. Diversification into global markets, while maintaining 

established domestic business, is critical to maintaining a competitive 

advantage in the industry. 

Superior Energy Services Inc. (SPN/NYSE) provides specialized oilfield 

services and equipment. The Louisiana-based company’s primary objective 

is to serve the drilling and production-related needs of oil and gas 

companies. Superior Group was formed when it managed a reverse merger 

with Small’s Oilfield Services Corp. in 1995. Superior’s early success 

coincided with the inception of the “rigless” well plug and abandonment, a 

new method of plugging and abandoning uneconomical wells. The capital 

requirements necessary to grow and diversify its business led Superior to 

the public market after the 1995 merger. In 1999, Superior merged with 

Cardinal Services, the market leader in mechanical wireline and liftboat 

services in the Gulf of Mexico. This key merger provided Superior with 

complete in-house capabilities to produce, maintain, and decommission 

wells throughout a well’s entire life cycle. It also provided the Company 

with the world’s largest fleet of liftboats to deliver these services. Success 

in the Gulf of Mexico provided opportunities to expand globally. Superior 

acquired two United Kingdom-based rental tools enterprises that have 

given the Company global capabilities to provide rental services in the 

North Sea, Europe, the Middle East, South East Asia, and West Africa. 

Operating Segments Superior Energy has four business segments. They are rental tools, well 

intervention services, marine services, and oil and gas operations. In the 

rental tools segment, Superior manufactures, sells, and rents tools used in 

well drilling, completion, and production activities. The Company provides 

drilling related needs mostly through this segment. The rental tools 

operating segment experiences the highest gross margins partly because of 

relatively low operating costs. The well intervention segment includes a 

variety of services that stimulate oil and gas production. For example, in 

the Gulf of Mexico, Superior is a leading provider of wireline services as 

well as plug and abandonment services. Superior also manufactures and 

sells specialized drilling equipment. 

8


Locations and 

Facilities 

The marine services segment has a fleet of 37 liftboats used to deliver 

production related services to support customer projects. Of the 37 

liftboats, 10 are used especially for wireline services. Lastly, the oil and 

gas operations segment consists of mature oil and gas properties in the 

Gulf of Mexico that Superior owns and operates through its subsidiary, 

SPN Resources. Because of the cyclical nature of the oil and gas industry, 

Superior enhances productivity by utilizing these mature properties during 

periods of lesser activity when demand from traditional customers is low. 

Mature properties are also cost effective. In 2006, The Company reported 

record revenues and incomes from every segment. Figure 5 indicates the 

division of revenues between the four operating segments in 2006. 

Figure 5: Operating Segments Revenues in 2006 (in thousands) 

Source: Superior Energy Services, Inc. Annual Report, 2006 

Primarily a Gulf of Mexico-based company until 2003, Superior’s 

corporate headquarters are in Harvey, Louisiana. This facility also supports 

its well intervention and marine operations. Superior’s other principal 

operating facility, located in Broussard, Louisiana, supports rental tools 

and marine operations in the Gulf of Mexico. Superior now has 4,300 

employees working in more than 120 locations in 10 countries. The 

acquisition of Warrior Energy Services has expanded operations into key 

domestic land markets. Paired with primary operations in the Gulf of 

Mexico, Superior aims to be one of North America’s largest providers of 

production-related services. Superior also looks to grow internationally by 

expanding on current contracts in Malaysia, Australia, and Egypt. 

9


Corporate Strategy The cyclical nature of the oil industry in the Gulf of Mexico requires that 

companies diversify geographically to maintain steady growth. Onshore 

operations and entrance into international markets are key drivers for 

consistent revenue growth. Superior’s corporate strategy includes plans to 

expand its services and rental tools in domestic and international markets. 

In 2006, the Company acquired Warrior Energy Services, which expanded 

its domestic onshore presence. Warrior’s operations cover most of the 

active producing basins in the United States. It is one of the largest 

providers of production related services in the United States. and is an 

integral part of Superior’s plans to increase market share in the domestic 

land market. 

The Company also wants to expand operations internationally. In July 

2006, the Company signed $100 million in international service contracts 

including an 18-month contract that sent the DB Performance, an 880 ton 

derrick barge, to Malaysia. Superior also plans to acquire an international 

services company. Another aspect of the Company’s corporate strategy is 

leveraging its broad base of offerings to boost revenues by investing in 

more rental items, constructing a second derrick barge, entering into the 

secondary pumping market, and expanding oil and gas property holdings. 

Competitors The highly competitive oilfield services industry includes large firms with 

market capitalizations ten times that of Superior such as Baker Hughes 

(BHI/NYSE), which supplies products and technology services to oil and 

gas industries worldwide and Weatherford International (WFT/NYSE). 

Some of Superiors top competitors with similar market capitalizations 

(under $5 billion) are Oil States International (OIS/NYSE), and W-H 

Energy Services (WHQ/NYSE), which provides products and services 

used in the drilling and completion of oil and natural gas wells. 

Latest 

Developments 

Superior’s recent growth and acquisitions have diversified the Company’s 

revenue. Business services in domestic onshore and international markets, 

primarily in rental tools and well intervention, now account for more than 

half of Superior’s earnings. In addition to acquiring Warrior Energy 

Services in 2006, the Company is honoring contracts for well intervention 

services in New Zealand, Canada, Trinidad, Colombia, and Brazil. Most 

notably, Superior entered the Asian Pacific market when it entered an 18month 

contract to charter its derrick barge. Superior is currently 

constructing a second derrick barge for purchase by the same Malaysian 

company at a price of $53.7 million. A third barge currently under 

construction will be owned and operated by Superior for use on deepwater 

projects in the Gulf of Mexico. 

PEER ANALYSIS The following companies were selected as top competitors in one or more 

of Superior’s operating segments. W-H Energy Services (WHQ), Parker 

Drilling (PKD), and Baker Hughes (BHI) provide a sampling of the diverse 

oilfield services industry, where many firms are unique in the bundled 

10


W-H Energy 

Services 

(WHQ/ NYSE) 

Parker Drilling 

(PKD/NYSE) 

services they offer. Where Superior stands out compared with competitors 

may be a result of rapid expansion through acquisitions in 2006 and 2007. 

With significant investment in acquiring companies, Superior’s debt to 

equity ratio of .86 is considerably higher than its peers. This ratio shows 

Superior has become extremely leveraged in its rapid growth. This growth 

has led to a significant revenue growth of 59.9% and gross profit margins 

well above its peer group. 

Table 3: Competitor Comparison 

SPN WHQ PKD BHI 

Market Capitalization 3021.4M 2187.6M 889.2M 27823.8M 

Annual Sales 1093.8M 894.8M 586.4M 9027.4M 

Employees 4300 2959 2628 34600 

Revenue Growth(12 month) 59.90% 36.60% 4.20% 21.80% 

Gross Profit Margin 55.30% 47% 30.10% 41.60% 

EBITDA (ttm) 561.93M 280.19M 222.87M 2.63B 

Net Income (ttm) 251.45M 127.5M 102.66M 1.41B 

EPS (ttm) 3.07 4.47 0.94 4.36 

P/E (ttm) 12.08 15.99 8.49 19.97 

PEG (5 yr expected) 0.31 0.72 N/A 1.07 

P/S (ttm) 2.21 2.1 1.46 2.84 

P/BV (mrq) 3.49 3.71 1.89 4.74 

EV/EBITDA 6.641 7.724 5.007 10.683 

Debt/Equity 0.86 0.292 N/A 0.18 

Div. Yield N/A N/A N/A 0.60% 

ROE 34.10% 27.60% 23.60% 25.10% 

ROA 14.70% 16.80% 10.60% 15.70% 

Source: Hoovers and Yahoo Finance September 16, 2007 

With a slightly lower market capitalization of $2.18 billion and annual 

sales of $894 million W-H Energy Services competes with Superior 

primarily in the Gulf of Mexico. Competition between the two companies 

is mainly in well completion services and rental tools. Expanding similarly 

to Superior through acquisitions, W-H Energy services a growing number 

of customers onshore domestically and abroad. Based in Houston, Texas, 

W-H Energy is the closest competitor in terms of size and connections for 

Superior’s principle revenue market, the Gulf of Mexico. 

Parker Drilling specializes in drilling and servicing wells in remote and 

difficult terrain. Located in New Iberia, Louisiana, Parker’s subsidiary 

Quail Tools competes directly with Superior’s rental tools segment. Quail 

Tools has primary operations in the Gulf Coast, the Rocky Mountains, and 

western Texas. Increasing oil prices have prompted aggressive exploration 

by oil companies and a greater need for Parker’s specialized services. 

Parker has significant operations internationally, having worked in 54 

countries. It also has considerable experience in Arctic drilling in the 

Caspian Sea, Western Siberia, and Sakhalin Island. International onshore 

activities are focused in Asia Pacific and the former Soviet Union. 

11


Baker Hughes 

Incorporated 

(BHI/NYSE) 

MANAGEMENT 

PERFORMANCE 

AND 

BACKGROUND 

Return on Invested 

Capital 

Significantly larger than Superior with a market capitalization of $27.82 

billion, Baker Hughes offers a wide range of services for the international 

oil and gas industry. BHI operates out of two segments, Drilling and 

Evaluation and Completion and Production. The latter primarily competes 

with the services Superior offers. The Completion and Production segment 

provides clients equipment and services used throughout the productive 

life of oil and gas wells. These services are direct competition of 

Superior’s Well Intervention Services segment. 

Superior Energy has an experienced management team consisting of 

managers and officers who have been with the Company for many years. 

Superior’s succession plans require that successors consent to all 

employment agreements in place before the succession. An employment 

agreement provides all terms and conditions the executive agrees to serve 

while employed. 

The board of directors is elected by shareholders to oversee the 

management. The majority of directors will always be independent and 

non-management who meet the NYSE criteria for independence. The only 

management director currently on the board is the chief executive officer, 

Terence E. Hall. 

One interest of the Company and its shareholders is a strategy to maintain 

an unmatched safety record. Training programs are meant to keep safety a 

constant focus for all employees. In fact, The Company was recognized by 

the Petroleum Education Council for achieving the lowest incident rate as 

compared to its peers. Superior’s safety record is one way in which it 

creates shareholder value. 

Superior’s return on invested capital (ROIC) is shown in Table 4, which 

compares the Company’s ROIC to the average ROIC of a peer group 

consisting of Baker Hughes Inc., W-H Energy Services Inc., and Parker 

Drilling Company. The comparison shows that for over five years, 

Superior has performed slightly better. However, in recent years, such as 

2005 and 2006, it has not outperformed the average ROIC of the peer 

group partly because the average ROIC of the peer group was greatly 

affected by the high ROIC of Baker Hughes Inc. In 2006 and 2005, ROIC 

for Baker was 40.71 and 17.07 respectively. 

Also in 2005, ROIC was adversely affected by hurricanes Katrina and Rita. 

In 2006, Superior’s ROIC of 18.77 was close to W-H Energy’s 21.06, and 

greater than Parker’s 14.22. Superior’s five-year average ROIC is greater 

than W-H Energy (by .22) and Parker (by 7.34), yet, less than Baker 

Hughes (by 5.42). Therefore, though Superior’s management outperformed 

the peer group in the past five years combined, it does not currently 

outperform this group. The equation used for ROIC was taken from the 

Thomson One Banker Web site. 

12


Table 4: ROIC Comparison Between Superior and Peer Group 

Year SPN ROIC Peer Group ROIC 

2006 18.77 25.33 

2005 11.46 16.22 

2004 7.60 5.01 

5yr average 10.26 9.54 

Terence E. Hall Chairman of the Board and Chief Executive Officer (61) 

Mr. Hall has been the chairman of the board, chief executive officer, and a 

director of the Company since December 1995. He was also president from 

December 1995 to November 2004. Mr. Hall has served as president and 

chief executive officer of Superior Energy Services L.L.C. and Connection 

Technology L.L.C, subsidiaries of Superior since 1989. 

Kenneth L. 

Blanchard 

President and Chief Operating Officer (57) 

Mr. Blanchard has been the Company’s president and chief operating 

officer since June 2002. He was also an executive vice president from 

December 1995 to November 2004. 

Robert S. Taylor Executive Vice President, Chief Financial Officer, and Treasurer (52) 

Mr. Taylor has been chief financial officer since January 1996, an 

executive vice president since September 2004, and treasurer since July 

1999. From July 1999 to September 2004, he served as one of the 

Company’s vice presidents. 

A. Patrick Bernard Senior Executive Vice President (49) 

Mr. Bernard has been senior executive vice president of operations since 

July 2006 and an executive vice president since September 2004. From 

July 2003 until September 2004, he was a vice president, and before that 

was the chief financial officer of Superior’s subsidiary International 

Snubbing Services L.L.C. 

L. Guy Cook, III Executive Vice President (38) 

Mr. Cook has been an executive vice president since September 2004. He 

also served as executive vice president of Superior’s subsidiary Superior 

Energy Services L.L.C. since May 2006 as well as a vice president for the 

subsidiary since August 2000. From April 1997 until February 2000, he 

was director of investor relations, in charge of integrating acquisitions. 

James A. Holleman Executive Vice President (49) 

Mr. Holleman has been an executive vice president since September 2004. 

Previously, he was a vice president since July 1999 and an executive vice 

president for Superior Energy Services L.L.C. since May 2006. He also 

served as a vice president for the subsidiary since July 1999 and from 1994 

until July 1999, was chief operating officer of the predecessor to Superior 

Energy Services L.L.C., Cardinal Services Inc. 

13


Gregory L. Miller Executive Vice President and President of SPN Resources LLC (49) 

Mr. Miller has been an executive vice president since September 2004 and 

has been president of subsidiary SPN Resources L.L.C. since April 2003. 

Previously, he was president of Optimal Energy Inc. from January 1991 

until April 2003. 

Danny R. Young Executive Vice President (51) 

Mr. Young has been an executive vice president since September 2004 and 

has also been an executive vice president of Superior Energy Services 

L.L.C. since May 2006. Previously, he was a vice president of health, 

safety and environment and corporate services of Superior Energy Services 

L.L.C. from January 2002 until May 2005. 

Management 

Incentives 

Superior offers various incentive plans that provide long term incentives to 

key employees including officers, directors, consultants, and advisors. In 

May 2007, the Company approved an employee stock purchase plan with a 

million shares of common stock reserved for issuance. Superior can offer 

incentive stock options, non-qualified stock options, restricted stock 

options, restricted stock, stock appreciation rights, and other rewards such 

as performance share units (PSUs) that measure the Company’s ROIC and 

total shareholder return relative to a peer group. 

The compensation committee of the board of directors establishes the 

terms and exercise price of stock options, which cannot be less than the fair 

value of the common share on the date of the grant. For the six months 

ended June 20, 2007, compensation expenses related to stock options, 

restricted stock, restricted stock units, and PSUs were .7 million, 1.3 

million, .5 million, and 3.6 million respectively. 

Executives also earn an annual incentive bonus based on achievement of 

performance objectives. The bonus must be approved by the compensation 

committee. In addition, the Company has a profit sharing plan for 

employees who satisfy minimum service and age requirements. The 

employee is entitled to contribute up to 75% of earnings, the amount 

limited by the Internal Revenue Service, into profit sharing plans, and 

Superior will match up to 5% of the employee’s salary. The defined 

contribution plan dollar limit in 2006 was $44,000. Some highly paid 

employees have nonqualified deferred compensation plans into which they 

may defer up to 75% of their earnings and up to 100% of their bonus to the 

plan that earns a return based on market value changes of certain mutual 

funds chosen as part of a theoretical investment. Executives are also 

eligible to participate in all of the Company’s savings, retirement, paid 

vacations and holidays, and other incentive plans available to the other 

executive officers. 

14


SHAREHOLDER 

ANALYSIS 

Institutional 

Shareholders 

Insider 

Transactions 

On September 18, 2007, Superior Energy authorized a $350 million share 

repurchase program set to end December 31, 2009. This buyback is a 

strong signal for the stock by means of potentially raising earnings per 

share and elevating the market value of the remaining shares. Management 

clearly has the sense that the market price of Superior stock is undervalued 

relative to future earnings potential. This share buyback may be a way to 

reward investors better than a dividend would because of tax advantages 

and effects on share value. 

Institutional investors account for 89% of shares outstanding. The top ten 

are represented in Table 5. Over the last quarter, institutional investors 

have purchased net 920,603 shares, representing 1.3% change in 

institutional shares held. Changes among the ten largest institutional 

shareholders have been relatively neutral with large purchases and sales of 

stock. 

Table 5: Top Ten Institutional Shareholders 

Holder Name Source Held % Out Latest Change 

Fidelity Management 13F 6,380,892 7.83 -757,508 

AXA 13F 4,711,608 5.78 773,862 

Nierenberg Investment 13F 2,513,500 3.09 -275,000 

Transamerica Investment 13F 2,497,375 3.07 -112,531 

Vanguard Group 13F 2,464,028 3.02 -22,159 

Barclays Global Investors 13F 2,452,683 3.01 -16,843 

State Street Corp. 13F 2,277,704 2.8 906,678 

New Amsterdam Partners 13F 1,775,927 2.18 433,208 

Munder Capital Management 13F 1,749,730 2.15 104,166 

Morgan Stanley & Co. 13F 1,557,626 1.91 -126,899 

Source: Bloomberg, October 23, 2007 

Table 6 shows recent insider transactions. Insider selling over the past six 

months could be due to a variety of reasons because insiders are in general 

net sellers and could be simply trying to diversify or cover personal 

expenditures. The sale of 7.8% of insider shares has largely been in 

conjunction with exercised stock options. Insiders sold shares, and then 

exercised options to gain those shares back at a discounted price. 

Table 6: Insider Purchases for Last Six Months 

Shares Transactions 

Purchases 0 0 

Sales 662,000 6 

Net Shares Purchased (Sold) -662,000 6 

Total Insider Shares Held 7.86M N/A 

% Net Shares Purchased (Sold) -7.80% N/A 

Source: Yahoo! Finance October 25, 2007 

15


RISK ANALYSIS Superior is affected by operational risks including the cyclical nature of 

the oil and gas industry, dependence on skilled employees, and dangers 

related to oil and gas productions. The Company also faces financial risks, 

being more leveraged and less liquid than the industry as a whole, 

illustrating its growth strategy. In addition, Superior is responsible for 

complying with all industry laws and regulations, which poses additional 

burdens on the Company. 

Operational Risks Cyclical Nature of Industry 

Superior is highly affected by the cyclical nature of the oil and gas 

industry. Demand for the services offered by Superior is dependent on the 

level of expenditures of firms in the industry. This demand is reliant on 

many volatile variables: fluctuations in oil and gas prices, costs of 

exploring and producing, discovery rates of new reserves, and 

technological advances in the industry. Although past declines in prices 

did not have immediate effects on businesses, producers generally reduce 

expenditures in response to a fall in oil and gas prices. Therefore, an 

extended level of falling prices could greatly affect Superior’s revenues. 

Skilled Workforce 

Superior’s products and services depend on employees with specialized 

skills and experience. With the rapid expansion of Superior, it is critical 

the Company is able to retain the key personnel of its acquired firms and 

train new employees. Further, Gulf of Mexico maritime employees have 

been targeted for unionization. As a result, increases in wages paid by 

competitors and a loss of employees could severely hurt operations in the 

Gulf. Many employees are cross-trained so that they can perform many 

job duties on a well. There is a shortage of these highly skilled employees, 

and their job turnover is a major risk. 

Dangers in Operations 

Superior boasts one of the best safety records among its peers. However, 

the risk of accidents related to oil and gas production limits insurance 

coverage and exposes Superior to major liability costs. Incidents like fires, 

blowouts, or pipe failures may cause Superior significant setbacks in 

terms of injury or damages to equipment. Operations in the Gulf of 

Mexico are in seasonal danger from hurricanes. Liftboats and equipment 

stationed in the Gulf are also subject to significant damage or losses as a 

result of severe weather. Significant storms in 2005 resulted in Superior’s 

losing previous levels of insurance coverage, thus, exposing the Company 

to potential significant uninsured losses. 

Financial Risks Superior is a company that depends on acquisitions as part of its strategy. 

The acquisitions paid for in part by issuing debt contribute to its total 

debt-to-equity ratio of .86, which is a leverage ratio. The oil and gas 

equipment and services industry comparison according to Reuters, is a 

ratio of .43, which shows that Superior is more leveraged than its peers, 

16


posing financial risks to the Company’s cash flows. In addition, annual 

income statement figures from 2005 to 2006 show Superior has a 3.1 

degree of operating leverage, which reflects the degree to which a change 

in sales affected earnings. Financial risks may also be examined using 

liquidity ratios. The Company’s current ratio, which measures ability to 

pay short-term obligations, is 1.7 compared to the industry ratio of 2.26, 

and thus Superior is currently less liquid than the industry comparison. 

In the Company’s 10-k, Superior mentions expecting to continue making 

capital expenditures in amounts related to the cash that Superior generates 

from operating activities. Its primary sources of liquidity are cash flows 

from operations and borrowings under a new credit facility that expanded 

borrowing capabilities from $162 million to $190 million as of year-end 

2006. Cash from operating activities, equity, and borrowings are used to 

increase the Company’s asset base and, ultimately, earnings potential. 

Changes in interest and exchange rates have not materially affected 

Superior’s financials because Superior is generally equalized into the 

same currency. Further, as of year-end 2006, none of Superior’s debt 

outstanding had variable interest rates, and had no interest risks. The 

liquidity and leverage ratios are summarized in Table 7. The peer group 

comparison consists of Baker Hughes Inc., W-H Energy Services Inc., and 

Parker Drilling Company. 

Table 7: Liquidity and Leverage Ratio Comparisons 

Ratio SPN Industry Peer Group 

Debt to Equity .86 .43 .38 

Current 1.7 2.26 3.34 

Regulation Industry regulation represents a risk to the Superior. The Company has to 

comply with regulations relating to health and safety, waste management, 

and hazardous waste laws. Superior’s operations are monitored by the 

Minerals Management Service, which requires Superior to comply with 

the Outer Continental Shelf Lands Act. Minerals Management Service has 

the ability to create certain construction requirements or require Superior 

to end operations on a lease. The Oil Pollution Act also regulates 

Superior’s operations and holds the Company financially liable for any 

damages such as oil spills and other related substances. Lastly, regulatory 

laws to cover employees who operate on offshore platforms and liftboats 

include the Jones Act, the Death on the High Seas Act, and general 

maritime law. All regulatory obligations increase costs, and, therefore, 

affect profitability. If there is a change in regulation, Superior will have to 

modify practices to maintain compliance. 

17


FINANCIAL 

PERFORMANC 

E AND 

PROJECTIONS 

Macroeconomic 

and Industry 

Outlook 

Operating 

Assumptions 

Financing and 

Investing 

Assumptions 

We made certain assumptions to forecast our 12-month target price of 

$44.30. These assumptions were based on macroeconomic and industry 

outlooks as well as company specific information. 

The oilfield service and equipment industry is driven by global demand 

for oil and gas. In 2007, global oil demand outweighed supply because of 

growth in emerging markets. The forecast for 2008 indicates the risk for 

slower growth as a result of increased supply and lessening demand 

because of tightened consumer spending. U.S. regulations and guidelines 

of the Minerals Management Services have become more stringent as 

well. 

We forecasted revenues based on a sum of four revenue models from each 

of Superior’s four operating segments. For the well intervention segment 

revenue model, we built a regression and included the affects of storms in 

the Gulf of Mexico, Hurricane Katrina, land and offshore wireline units, 

oil and gas explorations, oil and gas prices, and depreciation and 

amortization. In the rental tools segment we also used a regression model 

and included the impact of storms in the Gulf, Hurricane Katrina, 

depreciation, and rig count. Our regression for the marine operating 

segment incorporated day-rates for each of the classes of liftboats as well 

as Hurricane Katrina and oil prices. To forecast revenues for the oil and 

gas segment, we did not build a regression model because management 

does not currently have plans to increase activity in this segment. We used 

a growth rate to predict future revenues from the oil and gas segment, 

while also considering oil and gas prices. 

Management has plans to continue making acquisitions. Superior’s 

strategy is to acquire in international markets and eventually run a third of 

its operations internationally. It plans to fund capital expenditures with 

cash flows from operating activities. Also, the Company authorized a 

$350 million share repurchase program that will end on December 31, 

2009. The repurchase program is a sign that management feels Superior is 

undervalued. We do not expect Superior to start issuing a dividend; 

however, a share buyback may be a way to reward investors instead, 

because of tax advantages and the effect on share value. As of the year 

ended 2006, Superior’s borrowing capabilities expanded from $162 

million to $190 million because of a new credit facility. 

SITE VISIT On October 5, 2007, our group of analysts including Thad Brill Jr., 

Kristen Elmer, Meredith Martin, and Wes Swackhamer visited Superior 

Energy Services at its headquarters in Harvey, Louisiana. We were met by 

Greg Rosenstein, vice president of investor relations, who proceeded to 

direct us to the conference room where we received a printed presentation 

of information regarding Superior and its operations, and an invitation to 

18


INDEPENDENT 

RESEARCH 

begin with our questions. After an informative one and a half hour 

question and answer session, we received a brief tour of the facilities, 

including a replica rig with housing where new employees are trained. 

The information we collected helped us better understand Superior’s 

operating segments and services, which assisted us in properly forecasting 

Superior’s future. 

In writing our report, we gathered information about Superior Energy 

Services Inc. and the oilfield and equipment services industry from a wide 

range of sources in addition to Company management. We met with 

Professor Eric Smith, the Associate Director of the Entergy-Tulane 

Energy Institute. Professor Smith gave us perspective on the industry and 

our company. He worked with Superior Energy during his time at 

McDermott International Inc. Professor Smith spoke with us about energy 

supply and demand, international markets, and regulatory landscapes. In 

addition, we discussed Superior’s stock performance and possible 

explanations for it. Further, we spoke with Professor Smith about 

independent and national oil companies and the importance for jointventures 

and training locals when working with the national oil companies 

in other countries. 

We also attended an energy security conference held by Shell 

Corporation. We spoke with several representatives from Shell about 

issues affecting supply and demand and rising oil prices. We also 

discussed topics such as social disparity and the possibility of the 

overpricing of oil-related products. We came away from the Shell 

conference with the perception that global supply for energy products was 

not growing incrementally with global demand. Meeting with Shell gave 

us insight into a customer’s point of view. 

In addition We conversed with analysts from Stifel, Nicolaus & Company 

Inc. and Lehman Brothers. The analysts gave insight into equity research 

for the oilfield services and equipment industry. They provided us with 

various materials to help in our research and forecasting and gave us their 

recent notes and insights on the Company. They provided us with investor 

presentations and information on the industry. 

Our sources of information also consisted of the 10-Ks and 10-Qs of 

Superior and its peer group, databases such as Bloomberg, Thomson One 

Banker, Hoovers, and Standard and Poor’s Market Insight, and Web sites 

including Yahoo! Finance and Superior’s Web site. 

19


BEN GRAHAM 

HURDLE 

ANALYSIS 

20


SUPERIOR ENERGY SERVICES INC. (SPN) 

Annual and Quarterly Income Statements 

In thousands 

2007 E 

2008 E 

For the period ended 2004 A 2005 A 2006 A 31-Mar A 30-Jun A 30-Sep A 31-Dec E 2007 E 31-Mar E 30-Jun E 30-Sep E 31-Dec E 2008 E 

Oilfield service and rental revenues $ 527,331 $ 656,423 $ 966,139 $ 325,895 $ 348,589 $ 347,228 $ 369,048 $ 1,390,760 $ 380,764 $ 382,937 $ 390,633 $ 412,153 $ 1,566,487 

Oil and gas revenues 37,008 

Total revenues 564,339 

Costs and expenses: 

Cost of oilfield services 288,561 

Cost of oil and gas 21,547 

Total cost of services, rental and sales 310,108 

Depreciation, depletion, amortization and accretion 67,337 

General and administrative 110,605 

78,911 

735,334 

330,200 

45,804 

376,004 

89,288 

140,989 

Reduction in value of assets 6,994 

Gain on sale of assets 3,544 

Income from operations 76,289 

Other income (expense): 

Interest expense (22,476) 

Interest income 1,766 

125,603 

(21,862) 

2,201 

127,682 

1,093,821 

427,477 

70,028 

497,505 

111,011 

168,416 

316,889 

(22,950) 

4,612 

Loss on early extinguishment of debt (12,596) 

Equity in income of affiliates 1,329 

1,339 

Reduction in value of investment in affiliate (1,250) 

Income (loss) before income taxes 56,908 

106,031 

5,891 

291,846 

37,029 

362,924 

142,429 

18,058 

160,487 

38,844 

50,859 

112,734 

(8,278) 

579 

(5,006) 

100,029 

48,164 

396,753 

162,973 

18,833 

181,806 

45,242 

53,824 

115,881 

(8,463) 

21 

929 

1,164 

109,511 

Income taxes 21,056 38,172 103,605 36,010 39,424 39,682 44,248 159,364 45,547 44,273 43,752 46,889 180,461 

Net income (loss) $ 35,852 $ 67,859 $ 188,241 $ 64,019 $ 70,087 $ 75,050 $ 80,394 $ 289,550 $ 82,754 $ 80,440 $ 79,493 $ 85,193 $ 327,880 

Basic earnings (loss) per share $ 0.48 $ 0.87 $ 2.36 $ 0.79 $ 0.86 $ 0.92 $ 0.99 $ 3.57 $ 1.03 $ 1.02 $ 1.02 $ 1.10 $ 4.17 

Diluted earnings (loss) per share $ 0.47 $ 0.85 $ 2.32 $ 0.78 $ 0.85 $ 0.91 $ 0.98 $ 3.52 $ 1.02 $ 1.00 $ 1.00 $ 1.08 $ 4.10 

Weighted average common shares: 

Basic 74,896 

Diluted 75,900 

78,321 

79,735 

79,801 

81,289 

80,632 

82,156 

81,047 

82,562 

51,696 

398,924 

159,683 

18,954 

178,637 

49,881 

57,150 

7,483 

120,739 

(8,197) 

795 

1,395 

114,732 

81,470 

82,793 

65,044 

434,093 

164,138 

19,880 

184,018 

53,560 

61,832 

134,683 

(12,429) 

989 

1,398 

124,641 

80,990 

82,321 

201,933 

1,592,694 

629,223 

75,725 

704,948 

187,527 

223,665 

7,483 

484,037 

(37,367) 

3,292 

(1,049) 

448,913 

81,035 

82,283 

66,257 

447,021 

167,299 

20,579 

187,878 

56,475 

63,605 

139,063 

(13,180) 

1,015 

1,402 

128,300 

80,007 

81,396 

64,268 

447,205 

166,700 

21,302 

188,002 

58,927 

64,346 

135,930 

(13,511) 

889 

1,405 

124,713 

79,055 

80,444 

61,905 

452,537 

169,185 

22,050 

191,235 

61,965 

64,549 

134,788 

(13,801) 

849 

1,409 

123,245 

78,129 

79,518 

64,512 

476,665 

177,359 

22,825 

200,184 

65,324 

67,118 

144,039 

(14,174) 

805 

1,413 

132,082 

77,227 

78,616 

256,941 

1,823,428 

680,543 

86,756 

767,299 

242,691 

259,619 

553,820 

(54,666) 

3,558 

5,629 

508,341 

78,604 

79,994



Annual and Quarterly Income Statements 

2007 E 

2008 E 

For the period ended 2004 A 2005 A 2006 A 31-Mar A 30-Jun A 30-Sep A 31-Dec E 2007 E 31-Mar E 30-Jun E 30-Sep E 31-Dec E 2008 E 

OTHER 

Revenues 

Well intervention $ 295,690 $ 339,609 $ 469,110 $ 176,931 $ 190,542 $ 202,807 $ 207,596 $ 777,876 $ 206,721 $ 202,252 $ 199,820 $ 206,244 $ 815,036 

Marine 69,808 87,267 140,115 35,866 35,162 26,323 37,557 134,908 38,475 36,713 36,164 36,382 147,734 

Rental tools 170,064 243,536 371,155 116,180 123,736 118,918 123,895 482,729 135,569 143,972 154,648 169,528 603,717 

Oil & Gas 37,008 78,911 127,682 37,029 48,164 51,696 65,044 201,933 66,257 64,268 61,905 64,512 256,941 

Less: Oil and Gas Eliminations (8,231) (13,989) (14,241) (3,082) (851) (820) 

(4,753) 

Total $ 564,339 $ 735,334 $ 1,093,821 $ 362,924 $ 396,753 $ 398,924 $ 434,093 $ 1,592,694 $ 447,021 $ 447,205 $ 452,537 $ 476,665 $ 1,823,428 

Cost of services 

Well intervention $ 189,858 $ 213,638 $ 269,631 $ 95,507 $ 109,449 $ 111,777 $ 111,946 $ 428,679 $ 111,238 $ 108,824 $ 108,324 $ 111,948 $ 440,334 

Marine 49,581 47,989 56,189 14,489 15,357 13,586 15,023 58,455 15,390 14,685 14,466 14,553 59,093 

Rental tools 57,353 82,562 115,898 35,516 39,018 35,142 37,169 146,845 40,671 43,192 46,394 50,858 181,115 

Oil & Gas 21,547 45,804 70,028 18,057 18,833 18,952 19,880 75,722 20,579 21,302 22,050 22,825 86,756 

Less: Oil and Gas Eliminations (8,231) (13,989) (14,241) (3,082) (851) (820) 

(4,753) 

Total $ 310,108 $ 376,004 $ 497,505 $ 160,487 $ 181,806 $ 178,637 $ 184,018 $ 704,948 $ 187,878 $ 188,002 $ 191,235 $ 200,184 $ 767,299 

Gross profit percentages 

Well intervention 35.79% 37.09% 42.52% 46.02% 42.56% 44.89% 46.07% 44.89% 46.19% 46.19% 45.79% 45.72% 45.97% 

Marine 28.98% 45.01% 59.90% 59.60% 56.33% 48.39% 60.00% 56.67% 60.00% 60.00% 60.00% 60.00% 60.00% 

Rental tools 66.28% 66.10% 68.77% 69.43% 68.47% 70.45% 70.00% 69.58% 70.00% 70.00% 70.00% 70.00% 70.00% 

Oil & Gas 41.78% 41.95% 45.15% 51.24% 60.90% 63.34% 69.44% 62.50% 68.94% 66.85% 64.38% 64.62% 66.24% 

Total 45.05% 48.87% 54.52% 55.78% 54.18% 55.22% 57.61% 55.74% 57.97% 57.96% 57.74% 58.00% 57.92% 

SELECTED COMMON-SIZE AMOUNTS (% of oilfield service and rental revenue unless otherwise noted) 

Cost of oilfield services 54.72% 50.30% 44.25% 43.70% 46.75% 45.99% 44.48% 45.24% 43.94% 43.53% 43.31% 43.03% 43.44% 

Cost of oil and gas (% of oil and gas revenues) 58.22% 58.05% 54.85% 48.77% 39.10% 36.66% 30.56% 37.50% 31.06% 33.15% 35.62% 35.38% 33.76% 

Depreciation, depletion, amortization and accretion 12.77% 13.60% 11.49% 11.92% 12.98% 14.37% 14.51% 13.48% 14.83% 15.39% 15.86% 15.85% 15.49% 

General and administrative 20.97% 21.48% 17.43% 15.61% 15.44% 16.46% 16.75% 16.08% 16.70% 16.80% 16.52% 16.28% 16.57% 

Income from operations 14.47% 19.13% 32.80% 34.59% 33.24% 34.77% 36.49% 34.80% 36.52% 35.50% 34.51% 34.95% 35.35% 

Interest expense -4.26% -3.33% -2.38% -2.54% -2.43% -2.36% -3.37% -2.69% -3.46% -3.53% -3.53% -3.44% -3.49% 

Interest income 0.33% 0.34% 0.48% 0.18% 0.27% 0.23% 0.27% 0.24% 0.27% 0.23% 0.22% 0.20% 0.23% 

Income (loss) before income taxes 10.79% 16.15% 30.21% 30.69% 31.42% 33.04% 33.77% 32.28% 33.70% 32.57% 31.55% 32.05% 32.45% 

Net income (loss) 6.80% 10.34% 19.48% 19.64% 20.11% 21.61% 21.78% 20.82% 21.73% 21.01% 20.35% 20.67% 20.93% 

YEAR TO YEAR CHANGE 

Oilfield service and rental revenues 5.5% 24.5% 47.2% 57.4% 52.8% 37.6% 32.4% 44.0% 16.8% 9.9% 12.5% 11.7% 12.6% 

Cost of oilfield services -0.2% 14.4% 29.5% 52.7% 60.9% 45.8% 33.0% 47.2% 17.5% 2.3% 6.0% 8.1% 8.2% 

Depreciation, depletion, amortization and accretion 37.8% 32.6% 24.3% 69.5% 75.9% 73.0% 59.7% 68.9% 45.4% 30.2% 24.2% 22.0% 29.4% 

General and administrative 16.6% 27.5% 19.5% 35.1% 34.3% 28.8% 33.6% 32.8% 25.1% 19.5% 12.9% 8.5% 16.1% 

Income from operations 13.3% 64.6% 152.3% 107.1% 52.6% 36.9% 37.0% 52.7% 23.4% 17.3% 11.6% 6.9% 14.4% 

Income (loss) before income taxes 16.6% 86.3% 175.2% 99.0% 81.0% 33.1% 31.4% 53.8% 28.3% 13.9% 7.4% 6.0% 13.2% 

Net income (loss) 17.5% 89.3% 177.4% 99.0% 81.0% 36.1% 29.3% 53.8% 29.3% 14.8% 5.9% 6.0% 13.2% 

22



Annual and Quarterly Balance Sheets 

In thousands 

2007 E 

2008 E 

As of 31-Dec-04 A 31-Dec-05 A 31-Dec-06 A 31-Mar A 30-Jun A 30-Sep A 31-Dec E 31-Dec-07 E 31-Mar E 30-Jun E 30-Sep E 31-Dec E 31-Dec-08 E 

Assets 

Current assets: 

Cash and cash equivalents $ 15,281 $ 54,457 $ 38,970 $ 31,986 $ 36,529 $ 63,809 $ 40,750 $ 40,750 $ 42,973 $ 34,001 $ 35,758 $ 32,942 $ 32,942 

Accounts receivable - net 156,235 196,365 303,800 327,899 346,200 346,081 369,048 369,048 384,995 378,775 386,387 412,153 412,153 

Income tax receivable 2,694 

2,630 

Current portion of notes receivable 9,611 2,364 14,824 15,149 15,254 15,616 15,616 15,616 15,616 15,616 15,616 15,616 15,616 

Prepaid insurance and other 28,203 51,116 59,563 49,712 47,139 58,348 62,865 62,865 66,709 70,420 73,965 77,326 77,326 

Total current assets 212,024 304,302 419,787 424,746 445,122 483,854 488,280 488,280 510,293 498,811 511,725 538,037 538,037 

Property, plant and equipment - net 515,151 534,962 804,228 885,330 958,915 1,032,764 1,112,723 1,112,723 1,180,750 1,246,431 1,309,180 1,368,675 1,368,675 

Goodwill - net of accumulated amortization 226,593 220,064 444,687 462,231 482,798 475,068 486,148 486,148 497,177 508,205 519,233 530,261 530,261 

Note receivable 29,131 29,483 16,137 16,101 16,259 16,364 16,364 16,364 16,364 16,364 16,364 16,364 16,364 

Investments in affiliates 14,496 

64,603 59,582 60,241 61,282 62,680 62,680 64,082 65,488 66,897 68,309 68,309 

Other assets - net of accumulated amortization 6,518 8,439 125,036 126,754 134,683 131,754 132,631 132,631 135,093 137,450 139,702 141,848 141,848 

Total assets $ 1,003,913 $ 1,097,250 $ 1,874,478 $ 1,974,744 $ 2,098,018 $ 2,201,086 $ 2,298,826 $ 2,298,826 $ 2,403,759 $ 2,472,750 $ 2,563,101 $ 2,663,494 $ 2,663,494 

Current liabilities: 

Accounts payable $ 36,496 $ 42,035 $ 65,451 $ 74,012 $ 75,456 $ 72,817 $ 74,339 $ 74,339 $ 77,835 $ 72,925 $ 73,854 $ 78,537 $ 78,537 

Accrued expenses 56,796 69,926 141,684 130,480 139,902 178,659 161,440 161,440 166,248 166,316 168,300 177,273 177,273 

Current maturities of long-term debt 11,810 810 810 810 810 810 810 810 810 810 810 810 810 

Current portion of decommissioning liabilities 23,588 14,268 35,150 36,316 36,504 34,884 35,050 35,050 35,220 35,395 35,575 35,760 35,760 

Income tax payable / deferred income tax 11,353 

23,476 8,857 4,410 4,410 4,410 4,410 4,410 4,410 4,410 4,410 

Fair value of commodity derivative instruments 2,018 10,792 

Total current liabilities 130,708 149,184 243,095 265,094 261,529 291,580 276,049 276,049 284,524 279,857 282,949 296,789 296,789 

Deferred income taxes 103,372 97,987 112,011 121,586 122,311 147,784 150,769 150,769 164,981 179,099 192,349 204,586 204,586 

Decommissioning liabilities 90,430 107,641 87,046 86,600 86,787 88,791 89,213 89,213 89,647 90,092 90,550 91,020 91,020 

Long-term debt 244,906 216,596 711,505 711,613 746,324 711,440 771,035 771,035 801,035 810,630 835,630 855,225 855,225 

Other long-term debt 

Stockholders' equity: 

618 1,468 10,133 13,519 13,989 14,202 17,878 17,878 20,737 23,595 26,454 29,312 29,312 

Common stock of $.001 par value. 77 

79 

81 

81 

81 

81 

81 

81 

81 

81 

81 

81 

81 

Additional paid-in capital 398,073 428,507 411,374 413,441 431,200 433,165 433,165 433,165 433,165 433,165 433,165 433,165 433,165 

Accumulated other comprehensive income 2,884 (4,916) 10,288 9,846 12,746 15,942 15,942 15,942 15,942 15,942 15,942 15,942 15,942 

Treasury stock (33,800) (33,800) (67,600) (101,400) (135,200) (169,000) (169,000) 

Retained earnings 32,845 100,704 288,945 352,964 423,051 498,101 578,495 578,495 661,248 741,688 821,182 906,375 906,375 

Total stockholders' equity 433,879 524,374 710,688 776,332 867,078 947,289 993,883 993,883 1,042,836 1,089,476 1,135,170 1,186,563 1,186,563 

Total liabilities and stockholders' equity $ 1,003,913 $ 1,097,250 $ 1,874,478 $ 1,974,744 $ 2,098,018 $ 2,201,086 $ 2,298,827 $ 2,298,827 $ 2,403,759 $ 2,472,750 $ 2,563,102 $ 2,663,494 $ 2,663,494 

23



Annual and Quarterly Balance Sheets 

2007 E 

2008 E 

As of 31-Dec-04 A 31-Dec-05 A 31-Dec-06 A 31-Mar A 30-Jun A 30-Sep A 31-Dec E 31-Dec-07 E 31-Mar E 30-Jun E 30-Sep E 31-Dec E 31-Dec-08 E 

SELECTED COMMON SIZE BALANCE SHEET AMOUNTS (% of revenues) 

Accounts receivable - net 29.63% 29.91% 31.44% 100.61% 99.31% 99.67% 100.00% 26.54% 101.11% 98.91% 98.91% 100.00% 26.31% 

Prepaid insurance and other 5.35% 7.79% 6.17% 15.25% 13.52% 16.80% 17.03% 4.52% 17.52% 18.39% 18.93% 18.76% 4.94% 

Property, plant and equipment - net 97.69% 81.50% 83.24% 271.66% 275.08% 297.43% 301.51% 80.01% 310.10% 325.49% 335.14% 332.08% 87.37% 

Note receivable 5.52% 4.49% 1.67% 4.94% 4.66% 4.71% 4.43% 1.18% 4.30% 4.27% 4.19% 3.97% 1.04% 

Accounts payable 6.92% 6.40% 6.77% 22.71% 21.65% 20.97% 20.14% 5.35% 20.44% 19.04% 18.91% 19.06% 5.01% 

Accrued expenses 10.77% 10.65% 14.66% 40.04% 40.13% 51.45% 43.74% 11.61% 43.66% 43.43% 43.08% 43.01% 11.32% 

SELECTED COMMON SIZE BALANCE SHEET AMOUNTS (% of total assets) 

Total current assets 21.12% 27.73% 22.39% 21.51% 21.22% 21.98% 21.24% 21.24% 21.23% 20.17% 19.97% 20.20% 20.20% 

Property, plant and equipment - net 51.31% 48.75% 42.90% 44.83% 45.71% 46.92% 48.40% 48.40% 49.12% 50.41% 51.08% 51.39% 51.39% 

Goodwill - net of accumulated amortization 22.57% 20.06% 23.72% 23.41% 23.01% 21.58% 21.15% 21.15% 20.68% 20.55% 20.26% 19.91% 19.91% 

Note receivable 2.90% 2.69% 0.86% 0.82% 0.77% 0.74% 0.71% 0.71% 0.68% 0.66% 0.64% 0.61% 0.61% 

Other assets - net of accumulated amortization 0.65% 0.77% 6.67% 6.42% 6.42% 5.99% 5.77% 5.77% 5.62% 5.56% 5.45% 5.33% 5.33% 

Total current liabilities 13.02% 13.60% 12.97% 13.42% 12.47% 13.25% 12.01% 12.01% 11.84% 11.32% 11.04% 11.14% 11.14% 

Deferred income taxes 10.30% 8.93% 5.98% 6.16% 5.83% 6.71% 6.56% 6.56% 6.86% 7.24% 7.50% 7.68% 7.68% 

Long-term debt 24.40% 19.74% 37.96% 36.04% 35.57% 32.32% 33.54% 33.54% 33.32% 32.78% 32.60% 32.11% 32.11% 

Total stockholders' equity 43.22% 47.79% 37.91% 39.31% 41.33% 43.04% 43.23% 43.23% 43.38% 44.06% 44.29% 44.55% 44.55% 

24



Annual and Quarterly Statements of Cash Flows 

In thousands 

2007 E 

2008 E 

For the period ended 

Cash flows from operating activities: 

2004 A 2005 A 2006 A 31-Mar A 30-Jun A 30-Sep A 31-Dec E 2007 E 31-Mar E 30-Jun E 30-Sep E 31-Dec E 2008 E 

Net income (loss) 

Adjustments: 

$ 35,852 $ 67,859 $ 188,241 $ 64,019 $ 70,087 $ 75,050 $ 80,394 $ 289,550 $ 82,754 $ 80,440 $ 79,493 $ 85,193 $ 327,880 

Loss (gain) on disposal of assets (7,483) 

(7,483) 

Stock-based compensation 6,159 3,557 2,603 2,835 

8,995 

Depreciation and amortization 67,337 89,288 111,011 38,844 45,242 49,881 53,560 187,527 56,475 58,927 61,965 65,324 242,691 

Deferred income taxes 15,234 442 15,663 5,545 (3,685) 30,599 2,985 35,444 14,212 14,119 13,250 12,236 53,817 

Equity in income of affiliates (1,329) (1,339) (5,891) 5,006 (1,164) (1,395) (1,398) 1,049 (1,402) (1,405) (1,409) (1,413) (5,629) 

Other income 4,700 

Write-off of debt acquisition costs 2,817 

Amortization of debt acquisition costs 

Changes in operating assets and liabilities, net 

887 1,127 1,321 881 890 898 

2,669 

Accounts receivable (35,279) (32,095) (88,298) (20,946) (16,328) 2,246 (21,467) (56,495) (14,384) 7,783 (6,050) (24,204) (36,855) 

Other - net (9,346) (11,263) 13,892 4,663 9,530 (7,414) (3,014) 3,765 (2,299) (2,124) (1,915) (1,686) (8,024) 

Accounts payable 16,142 5,696 7,259 4,007 (680) (4,188) (1,778) (2,639) 766 (7,640) (1,801) 1,952 (6,723) 

Accrued expenses 13,866 16,599 43,379 (15,190) 8,000 35,686 (17,219) 11,277 4,808 

68 1,983 8,973 15,833 

Decomissioning liabilities (9,157) (8,772) (2,255) (478) (746) (1,079) (915) (3,218) (940) (966) (993) (1,020) (3,919) 

Income taxes (2,876) 26,137 (13,084) 25,564 (15,174) (4,573) 

5,817 

Net cash provided by operating activities 

Cash flows from investing activities: 

91,331 158,379 280,214 115,472 98,575 171,063 91,146 476,256 139,990 149,200 144,524 145,356 579,070 

Payments for capital expenditures (74,125) (125,166) (242,936) (83,121) (116,508) (126,239) (110,000) (435,868) (108,967) (108,967) (108,967) (108,967) (435,868) 

Acquisitions of oil & gas properties, net (10,676) 3,686 (46,631) 

Businesses acquired, net of cash acquired (24,361) (6,435) (239,339) (49,758) (29,866) 

(30,000) (109,624) (25,000) (25,000) (25,000) (25,000) (100,000) 

Cash contributed to equity-investment method (57,781) 

Proceeds from sale of subsidiary, net of cash sold 18,343 

1,750 16,350 

18,100 

Proceeds from sales of assets 32,077 

Other (1,097) (13,634) 9,585 (396) (208) 

8,981 

Net cash used in investing activities 

Net borrowings from revolving credit facility 

Cash flows from financing activities: 

(109,162) (96,935) (581,978) (123,294) (145,020) (110,097) (140,000) (518,411) (133,967) (133,967) (133,967) (133,967) (535,868) 

Net borrowings (payments) on revolving credit facility 35,000 (35,000) 60,000 60,000 30,000 10,000 25,000 20,000 85,000 

Proceeds from long-term debt 695,467 

Principal payments on long-term debt (13,713) (39,310) (200,810) 

(405) 

(405) (810) 

(405) 

(405) (810) 

Debt acquisition costs 

Purchase of common stock call options 

(60) (439) (18,357) (209) 147 

(21) 

(83) 

related to exchangeable notes 

Sale of common stock warrants related to 

(96,000) 

exchangeable notes 60,400 

Proceeds from issuance of stock 130,265 

324 

324 

Tax benefit from exercise of stock options 1,429 390 8,553 192 

9,135 

Purchase and retirement of stock (113,438) 

(159,999) 

(33,800) (33,800) (33,800) (33,800) (33,800) (33,800) (135,200) 

Proceeds from exercise of stock options 10,271 18,161 2,803 670 7,347 405 

8,422 

Net cash provided by financing activities 13,325 (21,588) 284,933 851 50,642 (34,100) 25,795 43,188 (3,800) (24,205) (8,800) (14,205) (51,010) 

Effect of exchange rate changes on cash 

Net increase (decrease) in cash 

(7) (680) 1,344 

(13) 346 414 

747 

and cash equivalents (4,513) 39,176 (15,487) (6,984) 4,543 27,280 (23,059) 1,780 2,223 (8,972) 1,757 (2,816) (7,808) 

Cash and cash equivalents at beginning of year 19,794 15,281 54,457 38,970 31,986 36,529 63,809 38,970 40,750 42,973 34,001 35,758 40,750 

Cash and cash equivalents at end of year 15,281 54,457 38,970 31,986 36,529 63,809 40,750 40,750 42,973 34,001 35,758 32,942 32,942 

Cash paid for interest 23,320 21,152 32,295 

12,429 

13,180 13,511 13,801 14,174 54,666 

Cash paid for taxes 

Operating cash flow per share 

7,360 10,789 100,431 

41,263 

31,335 30,154 30,502 34,653 126,644 

excluding working capital changes 

Operating cash flow per share 

$ 1.55 $ 2.03 $ 3.93 $ 1.43 $ 1.38 $ 1.82 $ 1.65 $ 6.29 $ 1.87 $ 1.89 $ 1.93 $ 2.05 $ 7.74 

including working capital changes $ 1.20 $ 1.99 $ 3.45 $ 1.41 $ 1.19 $ 2.07 $ 1.11 $ 5.79 $ 1.72 $ 1.85 $ 1.82 $ 1.85 $ 7.24 

25



Ratios 

2004 A 2005 A 2006 A 31-Mar A 30-Jun A 30-Sep A 31-Dec E 2007 E 31-Mar E 30-Jun E 30-Sep E 31-Dec E 2008 E 

Productivity Ratios 

Receivables turnover 3.92 3.72 3.86 1.21 1.20 1.13 1.10 4.78 1.07 1.06 1.07 1.06 4.23 

Working capital turnover 7.38 5.55 5.82 1.88 1.73 1.76 1.90 6.95 1.98 1.90 1.86 1.82 7.81 

Net fixed asset turnover 1.12 1.25 1.44 0.46 0.44 0.41 0.39 1.68 0.37 0.35 0.33 0.33 1.39 

Total asset turnover 0.57 0.62 0.65 0.21 0.20 0.19 0.18 0.81 0.17 0.17 0.16 0.17 0.68 

# of days sales in receivables 108 109 115 91 91 92 91 97 91 91 91 91 96 

# of days cash-based expenses in payables 81 83 122 91 88 103 90 97 90 90 90 90 94 

Liquidity measures 

Current ratio 1.62 2.04 1.73 1.60 1.70 1.66 1.77 1.77 1.79 1.78 1.81 1.81 1.81 

Quick ratio 1.31 1.68 1.41 1.36 1.46 1.41 1.48 1.48 1.50 1.47 1.49 1.50 1.50 

Cash ratio 1.31 1.68 1.41 1.36 1.46 1.41 1.48 1.48 1.50 1.47 1.49 1.50 1.50 

Cash flow from operations ratio 0.70 1.06 1.15 0.44 0.38 0.59 0.33 1.73 0.49 0.53 0.51 0.49 1.95 

Working capital 81,316 155,118 176,692 159,652 183,593 192,274 212,231 212,231 225,769 218,955 228,777 241,248 241,248 

Financial Risk (Leverage) Ratios 

Total debt/equity ratio 1.31 1.09 1.64 1.54 1.42 1.32 1.31 1.31 1.31 1.27 1.26 1.24 1.24 

Debt/equity ratio (excluding deferred taxes) 1.08 0.91 1.48 1.39 1.28 1.17 1.16 1.16 1.15 1.11 1.09 1.07 1.07 

Total LT debt/equity ratio 1.01 0.81 1.30 1.20 1.12 1.02 1.04 1.04 1.03 1.01 1.01 0.99 0.99 

LT debt/equity (excluding deferred taxes) 0.77 0.62 1.14 1.05 0.98 0.86 0.88 0.88 0.87 0.85 0.84 0.82 0.82 

Interest coverage ratio (Earnings = EBIT) 3.53 5.85 13.72 13.08 13.94 15.00 11.03 13.01 10.73 10.23 9.93 10.32 10.30 

Interest coverage ratio (Earnings = EBI) 2.60 4.10 9.20 8.73 9.28 10.16 7.47 8.75 7.28 6.95 6.76 7.01 7.00 

Total debt ratio 0.57 0.52 0.62 0.61 0.59 0.57 0.57 0.57 0.57 0.56 0.56 0.55 0.55 

Debt ratio (excuding deferred taxes) 0.37 0.33 0.46 0.44 0.43 0.40 0.41 0.41 0.41 0.40 0.40 0.40 0.40 

Profitability/Valuation Measures 

Gross profit margin 45.28% 49.70% 55.75% 56.30% 53.25% 54.01% 55.52% 54.76% 56.06% 56.47% 56.69% 56.97% 56.56% 

Operating profit margin 14.47% 19.13% 32.80% 34.59% 33.24% 34.77% 36.49% 34.80% 36.52% 35.50% 34.51% 34.95% 35.35% 

Return on assets 3.90% 6.46% 12.67% 4.10% 4.11% 4.13% 3.85% 16.81% 3.78% 3.52% 3.34% 3.43% 14.14% 

Return on equity 8.94% 14.16% 30.48% 9.58% 9.51% 9.30% 9.43% 37.25% 9.10% 8.22% 7.63% 7.81% 33.41% 

Earnings before interest and taxes margin 15.05% 19.48% 32.58% 33.23% 33.84% 35.40% 37.14% 34.97% 37.16% 36.10% 35.08% 35.49% 35.94% 

EBITDA margin 27.82% 33.09% 44.07% 45.15% 46.82% 49.77% 51.65% 48.45% 51.99% 51.48% 50.95% 51.34% 51.43% 

EBITDA/Assets 15.98% 20.67% 28.66% 9.43% 9.56% 9.51% 9.14% 39.11% 9.04% 8.63% 8.35% 8.53% 34.74% 

2007 E 

26 

2008 E

BURKENROAD REPORTS RATING SYSTEM 

Market Outperform: This rating indicates that we believe forces are in place that would enable this 

company's stock to produce returns in excess of the stock market averages over the next 12 months. 

Market Perform: This rating indicates that we believe the investment returns from this company’s 

stock will be in line with those produced by the stock market averages over the next 12 months. 

Market Underperform: This rating indicates that while this investment may have positive 

attributes, we believe an investment in this company will produce subpar returns over the next 12 

months. 

BURKENROAD REPORTS RATING SYSTEM 

CPFS is calculated using operating cash flows excluding working capital changes. 

All amounts are as of the date of the report as reported by Bloomberg or Yahoo Finance 

unless otherwise noted. Betas are collected from Bloomberg. 

Enterprise value is based on the equity market cap as of the report date, adjusted for longterm 

debt, cash, and short-term investments reported on the most recent quarterly report date. 

12-month Stock Performance is calculated using an ending price as of the report date. 

The stock performance includes the 12-month dividend yield. 

2007-2008 COVERAGE UNIVERSE 

AFC Enterprises Inc. (AFCE) McMoRan Exploration Co. (MMR) 

Amerisafe Inc. (AMSF) MidSouth Bancorp Inc. (MSL) 

Callon Petroleum Company (CPE) NATCO Group Inc. (NTG) 

Cal-Maine Foods Inc. (CALM) Parkway Properties Inc. (PKY) 

Carbo Ceramics Inc. (CRR) PetroQuest Energy Inc. (PQ) 

CLECO Corporation (CNL) Pool Corporation (POOL) 

Conn’s Inc. (CONN) Powell Industries Inc. (POWL) 

Craftmade International Inc. (CRFT) Rollins Incorporated (ROL) 

Crown Crafts Inc. (CRWS) RPC Incorporated (RES) 

EastGroup Properties Inc. (EGP) Sally Beauty Holdings (SBH) 

Energy Partners Ltd. (EPL) Sanderson Farms Inc. (SAFM) 

EnergySouth Inc. (ENSI) SEACOR Holdings Inc. (CKH) 

First M&F Corporation (FMFC) Shaw Group Inc. (SGR) 

Frozen Food Express (FFEX) Stone Energy Corp. (SGY) 

Gulf Island Fabrication Inc. (GIFI) Superior Energy Services Inc. (SPN) 

Hibbett Sports Inc. (HIBB) Team Incorporated (TMI) 

Hornbeck Offshore Services Inc. (HOS) Teche Holding Company (TSH) 

IBERIABANK Corp. (IBKC) Tuesday Morning Corp. (TUES) 

ION Geophysical Corp. (IO) W&T Offshore (WTI) 

Marine Products Corp. (MPX) Willbros Group Inc. (WG) 

Peter Ricchiuti Pamela Shaw Karla Timmons 

Director of Research Senior Director of Accounting Abe Topham 

BURKENROAD REPORTS BURKENROAD REPORTS Associate Directors of Research 

Tulane University Tulane University BURKENROAD REPORTS 

New Orleans, LA 70118-5669 New Orleans, LA 70118-5669 Tulane University 

(504) 862-8489 

(504) 865-5033 

New Orleans, LA 70118-5669 

(504) 865-5430 Fax 

(504) 865-5430 Fax 

(504) 862-8489 

Peter.Ricchiuti@tulane.edu pshaw@tulane.edu (504) 865-5430 Fax

Named in honor of William B. Burkenroad Jr., an alumnus and a longtime supporter of 

Tulane’s business school, and funded through contributions from his family and friends, 

BURKENROAD REPORTS is a nationally recognized program, publishing objective, high 

quality investment research reports on public companies in our region. Students at Tulane 

University’s A. B. Freeman School of Business prepare these reports. 

Alumni of the BURKENROAD REPORTS program are employed at a number of highly respected 

financial institutions including: ABN AMRO Bank (Chicago), Aegis Value Fund (New York), AG 

Edwards & Co. (St. Louis), AIM Capital Management (Houston), Alpha Omega Capital Partners 

(Richmond), American General Investment Management (Houston), Banc of America Securities 

(Charlotte, Houston-New York-Dallas-San Francisco), Bancomer (Mexico City), BankOne Capital 

(Dallas, New Orleans) Barclays Capital (New York), Barings PLC (Budapest), Bear Stearns 

(Dallas, New York), Bearing Point (Alexandria), Bessemer Trust (New York), Blackrock Financial 

Management (New York), Boston Consulting Group (Prague) Burnham Securities (Houston), 

Cadaret, Grant, and Co., California Board of Regents (San Francisco), Cambridge Associates 

(Boston), Capital Management (New York), CBA Securities (Stamford), Cadaret, Grant & Co. 

(Syracuse),Central Bank of Turkey, Chaffe & Assoc. (New Orleans) CIBC/Oppenheimer (New 

Delhi-New York), Citadel Investment Group (Chicago), Citibank (Jakarta-New York-Stamford), 

Citigroup Private Bank (New York) City National Bank (Cleveland), Cornerstone Resources 

(New York) Credit Suisse First Boston (Boston, Dallas, Houston, New York), Dain Rauscher 

Wessels (Austin, San Francisco), Deutsche Banc Alex Brown (Houston-New York), Duquesne 

Capital Management (New York) Entrust (New York), Financial Models Inc. (New York), First 

Albany (Albany, Houston), Fiduciary Trust (New York), Fitch Investors Services (New York), 

FleetBoston (Boston), Forex Trading (New York), Franklin Templeton (San Mateo), Fulcrum 

Global Partners (New York), Gintel Asset Management (New York), Goldman Sachs (Houston, 

London, Memphis, New York, San Francisco), Gomez Advisors (Boston), Grosever Funds 

(Washington D.C.), Gruntal & Co., (New York), GunnAllen Financial (New York) H & R Block 

Financial (Austin), Hancock Investment Services (Baton Rouge), Hanifen Imhoff Inc. (Denver), 

Healthcare Markets Group (Houston), Hibernia Southcoast Capital (Houston, New Orleans), 

Howard Frazier Barker Elliott, Inc., (Houston) Howard Weil Labouisse Friedrichs (New Orleans), 

Innovus (New Orleans) Invesco (Denver), J.P. Morgan Chase Securities (Houston, New York), 

J. W. Genesis (Boca Raton), Jefferies & Co. (Dallas, Houston, London, New Orleans), Johnson 

Rice & Co. (New Orleans), KBC Financial (New York), Keystone Investments (Boston), Knight 

Securities (Jersey City), Legacy Capital (New Orleans), Lehman Brothers (Chicago, Houston, 

New York), Liberty Mutual (Boston), McDonald Investments (Cleveland), Mercer Partners 

(New York), Merrill Lynch (New York), Miramar Asset Management (San Francisco), Morgan 

Keegan (Memphis), Morgan Stanley (New York), Needham & Co. (New York), New York Stock 

Exchange (New York), Oppenheim Bank (Cologne, Germany) Pheonix Capital (San Francisco), 

Piper Jaffray & Co. (Minneapolis) Professional Advisory Services (Vero Beach), Quarterdeck 

Investment Services (Washington, D. C.), RBC Dominion Securities (Houston, Atlanta), Raymond 

James (St. Petersburg, Florida), Related Companies (New York), Restoration Capital (New York) 

S. G. Cowen & Co. (New York-San Francisco), Salomon Smith Barney (London-New York, New 

Orleans), Sanford Bernstein & Co. (New York), Second City Trading LLC (Chicago), Scudder 

Kemper Investments, (New York), Simmons & Co. (Houston), Smith Barney (San Francisco), 

SWS Securities (Dallas), Spear, Leeds & Kellogg (New York), Stewart Capital LLC (New 

Orleans), Susquehanna Investment Group (Chicago), Thomas Weisel Partners (San Francisco), 

TD Securities (New York), Tanaka Capital Management (New York), Texas Employee Retirement 

System (Austin), The GulfStar Group (Houston), Tivoli Partners (New York), Turner Investment 

Partners (Philadelphia), UBS PaineWebber (New York), UBS Warburg (New York), Value Line 

Investments (New York), Vardon Capital (New York), Vilquest, Inc. (Mandeville), Wachovia 

Securities (Charlotte, Houston, New Orleans, Palm Beach, San Francisco), Wells Fargo Capital 

Management (San Francisco) Whitney National Bank (New Orleans) and William Blair & Co. 

(Chicago) Zephyr Management (New York). 

To receive complete reports on any of the companies we follow, contact: 

Peter Ricchiuti, Founder & Director of Research 

Tulane University 

A.B. Freeman School of Business 

BURKENROAD REPORTS 

Phone: (504) 862-8489 

Fax: (504) 865-5430 

E-mail: Peter.Ricchiuti@Tulane.edu 

Please visit our web site at www.burkenroad.org 

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