What changed in this filing

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Item 9A. Controls and Procedures

2023-03-01 compared with 2022-02-28 · 152 added, 207 removed, 1147 unchanged (24% of the section changed)

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The information required by Item 10 hereby is incorporated by reference to such information as set forth in the Company's Definitive Proxy Statement for the 2023 Annual General Meeting of Shareholders.

The Board of Directors of the Company (the Board) has documented its governance practices by adopting several corporate governance policies.

These governance policies, including the Company's Corporate Governance Guidelines, Corporate Code of Business Conduct and Ethics and Financial Code of Ethics for Senior Officers, as well as the charters for the committees of the Board (Audit Committee, Compensation Committee, Finance and Investment Committee and Environmental, Social, Governance and Nominating Committee) may also be viewed at the Company's website.

The Board of Directors of the Company has documented its governance practices by adopting several corporate governance policies.

These governance policies, including the Company's Corporate Governance Guidelines, Corporate Code of Business Conduct and Ethics and Financial Code of Ethics for Senior Officers, as well as the charters for the committees of the Board of Directors (Audit Committee, Compensation Committee, Finance and Investment Committee and Environmental, Social, Governance and Nominating Committee) may also be viewed at the Company's website.

The Financial Code of Ethics for Senior Officers applies to our principal executive officer, principal financial officer, principal accounting officer and certain other senior officers.

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001-36246) filed on November 20, 2020.

3.3 Amended and Restated Articles of Civeo Corporation, as amended (incorporated herein by reference to Exhibit 3.2 to the Current Report on Form 8-K (File No.

001-36246) filed on April 2, 2018).

3.3* Amended and Restated Articles of Civeo Corporation .

4.1 Form of Common Share Certificate (incorporated herein by reference to Exhibit 4.1 to the Current Report on Form 8-K12B (File No.

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001-36246) filed on February 26, 2021).

10.4† Form of Performance Share Award Agreement under the 2014 Equity Participation Plan (incorporated herein by reference to Exhibit 10.

4 to the Annual Report on Form 10-K (File No.

10.4† Form of Performance Share Award Agreement under the 2014 Equity Participation Plan (incorporated herein by reference to Exhibit 10.4 to the Annual Report on Form 10-K (File No.

001-36246) filed on February 26, 2021).

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10.24† Form of Director Deferred Share Agreement (Canada) (incorporated herein by reference to Exhibit 10.32 to the Annual Report on Form 10-K for the year ended December 31, 2018 (File No.

10.25† Cancellation of Dual Employment Agreement of Bradley Dodson, dated September 30, 2021 (incorporated herein by reference to Exhibit 10.2 to the Quarterly Report on Form 10-Q (File No.

001-36246) filed on October 28, 2021).

10.26† Cancellation of Dual Employment Agreement of Allan Schoening, dated September 30, 2021(incorporated herein by reference to Exhibit 10.3 to the Quarterly Report on Form 10-Q (File No.

001-36246) filed on October 28, 2021).

10.25†* Amendment to Executive Change of Control Severance Agreement between Civeo Corporation and Carolyn Stone, dated April 4, 2022.

10.26† Retention Commitment Agreement between Civeo Corporation and Allan Schoening, dated July 26, 2022 (incorporated herein by reference to Exhibit 10.1 to the Current Report on Form 8-K (File No.

001-36246) filed on August 1, 2022).

21.1* List of Significant Subsidiaries of Civeo Corporation .

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Description of the Matter

As more fully described in Note 14 to the consolidated financial statements, at December 31, 2021, the Company had deferred tax assets related to deductible temporary differences and net loss carryforwards of $80.6 million, net of a $85.4 million valuation allowance.

As more fully described in Note 2 and Note 14 to the consolidated financial statements, at December 31, 2022, the Company had deferred tax assets related to deductible temporary differences and net loss carryforwards of $62.6 million, net of an $82.9 million valuation allowance.

Deferred tax assets are reduced by a valuation allowance if, based on the weight of all available evidence, in management’s judgment it is more likely than not that some portion, or all, of the deferred tax assets will not be realized.

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Dividends attributable to Class A preferred shares 1,771 1,925 1,887

Net loss attributable to Civeo common shareholders $ ( 575 ) $ ( 136,137 ) $ ( 60,340 )

Net income (loss) attributable to Civeo common shareholders $ 2,226 $ ( 575 ) $ ( 136,137 )

Per Share Data (see Note 6) (1)

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Preferred shares (Class A Series 1, no par value;

50,000,000 shares authorized, 9,042 shares issued and outstanding, respectively;

50,000,000 shares authorized, zero shares and 9,042 shares issued and outstanding, respectively;

aggregate liquidation preference of $ 0 and $ 97,438,687 as of December 31, 2022 and 2021)

61,941 60,016

Common shares ( no par value;

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$ 566,184 $ 672,734

(1) Reflects our 1-for-12 reverse share split that became effective November 19, 2020.

See Note 1 - Description of Business and Basis of Presentation to the notes to the consolidated financial statements in Item 8 of this annual report for further discussion.

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

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Dividends paid — — — — — — ( 1,542 ) ( 1,542 )

Cumulative effect of implementation of ASU 2016-02

— — — ( 699 ) — — — ( 699 )

Dividends attributable to Class A preferred shares 1,849 — — ( 1,849 ) — — — —

Acquisition of noncontrolling interest — — — — — — 687 687

Paid-in-kind dividends attributable to Class A preferred shares 1,887 — — ( 1,887 ) — — — —

Share-based compensation — — 6,066 — ( 1,458 ) — — 4,608

Balance, December 31, 2020 $ 60,016 $ — $ 1,578,315 $ ( 907,727 ) $ ( 6,930 ) $ ( 348,989 ) $ 672 $ 375,357

Net income (loss) — — — ( 134,250 ) — — 1,470 ( 132,780 )

Net income — — — 1,350 — — 1,147 2,497

Currency translation adjustment — — — — — ( 12,894 ) ( 42 ) ( 12,936 )

Dividends paid — — — — — — ( 165 ) ( 165 )

Dividends attributable to Class A preferred shares 1,887 — — ( 1,887 ) — — — —

Paid-in-kind dividends attributable to Class A preferred shares 1,925 — — ( 1,925 ) — — — —

Common shares repurchases — — — ( 4,649 ) — — — ( 4,649 )

Share-based compensation — — 4,127 — ( 1,120 ) — — 3,007

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Dividends paid — — — ( 65 ) — — ( 201 ) ( 266 )

Dividends attributable to Class A preferred shares 1,925 — — ( 1,925 ) — — — —

Common shares repurchased — — — ( 4,649 ) — — — ( 4,649 )

Paid-in-kind dividends attributable to Class A preferred shares 1,706 — — ( 1,706 ) — — — —

Preferred shares repurchased ( 25,364 ) — — ( 5,189 ) — — — ( 30,553 )

Preferred shares converted to common shares ( 38,283 ) — 38,283 — — — — —

Common shares repurchases — — — ( 14,209 ) — — — ( 14,209 )

Share-based compensation — — 3,787 — ( 1,013 ) — — 2,774

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Share-based compensation — 113

Shares repurchased — ( 217 )

Balance, December 31, 2021 9,042 14,111

Share-based compensation — 100

Common shares repurchased — ( 217 )

Shares repurchased ( 3,617 ) ( 498 )

Preferred shares converted to common shares ( 5,425 ) 1,505

Balance, December 31, 2022 — 15,218

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Gain on disposals of assets ( 4,917 ) ( 6,188 ) ( 2,905 )

Provision (benefit) for credit losses, net of recoveries 141 44 ( 30 )

Provision for credit losses, net of recoveries 162 141 44

Other, net 3,223 2,200 ( 2,873 )

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Capital expenditures ( 25,421 ) ( 15,571 ) ( 10,083 )

Payments related to acquisitions, net of cash acquired — — ( 16,434 )

Proceeds from disposition of property, plant and equipment 16,286 14,306 3,690

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Repurchases of common shares ( 14,209 ) ( 4,649 ) —

Repurchases of preferred shares ( 30,553 ) — —

Other, net ( 1,078 ) ( 1,120 ) ( 1,458 )

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Description of the Business

We provide hospitality services to the natural resources industry in Canada, Australia and the U.S.

We provide a full suite of hospitality services for our guests, including lodging, catering and food service, housekeeping and maintenance at accommodation facilities that we or our customers own.

In many cases, we provide services that support the day-to-day operations of accommodation facilities, such as laundry, facility management and maintenance, water and wastewater treatment, power generation, communication systems, security and logistics.

We provide hospitality services to the natural resources industry in Canada, Australia and the United States (U.S.) We provide a full suite of services for our guests, including lodging, catering and food service, housekeeping and maintenance at accommodation facilities that we or our customers own.

In many cases, we provide services that support the day-to-day operations of these facilities, such as laundry, facility management and maintenance, water and wastewater treatment, power generation, communication systems, security and logistics.

We also offer development activities for workforce accommodation facilities, including site selection, permitting, engineering and design, manufacturing management and site construction, along with providing hospitality services once the facility is constructed.

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Leasehold improvements are capitalized and amortized over the lesser of the life of the lease or the estimated useful life of the asset.

During the first quarter of 2020, we extended the remaining useful life of certain long-lived accommodations assets in our U.S.

We record the fair value of a liability, which reflects the estimated present value of the amount of asset removal and site reclamation costs related to the retirement of our assets, for an asset retirement obligation (ARO) when it is incurred (typically when the asset is installed).

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For each asset group, we compare its carrying value to estimates of undiscounted future cash flows.

We use a variety of underlying assumptions to estimate these future cash flows, including assumptions relating to future economic market conditions, rates, occupancy levels, costs and expenses and capital expenditures.

We use a variety of underlying assumptions to estimate these future cash flows,

including assumptions relating to future economic market conditions, rates, occupancy levels, costs and expenses and capital expenditures.

The estimates are consistent with those used for purposes of our goodwill impairment test, as further discussed in Goodwill and Other Intangible Assets, below.

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In this step, we compare the fair value of the respective asset group to its carrying value.

The fair value of the asset groups are based on prices of similar assets, if available, or discounted cash flows.

The fair value of the asset groups are based on prices of similar assets, if available, or discounted future cash flows.

Our estimate of the fair value requires us to use significant unobservable inputs, representative of Level 3 fair value measurements, including numerous assumptions with respect to future circumstances, such as industry and/or local market conditions that might directly impact each of the asset groups’ operations in the future.

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In connection with the preparation of our financial statements for the three months ended March 31, 2020, we performed a quantitative goodwill impairment test as of March 31, 2020, which resulted in a reduction of the value of our goodwill in our Canadian reporting unit to zero.

See Note 4 – Impairment Charges for further discussion of goodwill impairments recorded in the years ended December 31, 2020 and 2019.

See Note 4 – Impairment Charges for further discussion of goodwill impairments recorded in the year ended December 31, 2020.

We conduct our annual impairment test as of November 30 of each year.

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In our analysis, we target a fair value that represents the value that would be placed on the reporting unit by market participants, and value the reporting unit based on historical and projected results throughout a cycle, not the value of the reporting unit based on trough or peak earnings.

The fair value of the reporting unit is estimated using a

combination of (i) an analysis of trading multiples of comparable companies (Market Approach) and (ii) discounted projected cash flows (Income Approach).

The fair value of the reporting unit is estimated using a combination of (i) an analysis of trading multiples of comparable companies (Market Approach) and (ii) discounted projected cash flows (Income Approach).

The relative weighting of each approach reflects current industry and market conditions.

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Revenue and Cost Recognition

We generally recognize accommodation, mobile facility rental, food service and other services revenues over time as our customers simultaneously receive and consume benefits as we serve our customers because of continuous transfer of control to the customer.

For the majority of our operations and contracts, we generally recognize accommodation, mobile facility rental, food service and other services revenues over time as our customers simultaneously receive and consume benefits as we serve our customers because of continuous transfer of control to the customer.

Revenue is recognized when control of the promised goods or services is transferred to our customers, in an amount that reflects the consideration we expect to be entitled to in exchange for those goods or services.

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In these cases, revenue may be deferred and recognized on a straight-line basis over the contract term.

A limited portion of our revenue is recognized at a point in time when control transfers to the customer related to small modular construction and manufacturing contracts, minor food service arrangements and optional purchases our customers make for incidental services offered at our accommodation and mobile facilities.

For significant construction projects, manufacturing revenues are recognized over time with progress towards completion measured using the cost based input method as the basis to recognize revenue and an estimated profit.

Billings on such contracts in excess of costs incurred and estimated profits are classified as deferred revenue.

Costs incurred and estimated profits in excess of billings on these contracts are recognized as unbilled receivables.

Management believes this input method is the most appropriate measure of progress to the satisfaction of a performance obligation on larger modular construction and manufacturing contracts.

Provisions for estimated losses on uncompleted contracts are made in the period in which such losses are determined.

Changes in job performance, job conditions, estimated profitability and final contract settlements may result in revisions to projected costs and revenue and are recognized in the period in which the revisions to estimates are identified and the amounts can be reasonably estimated.

Factors that may affect future project costs and margins include weather, production efficiencies, availability and costs of labor, materials and subcomponents.

These factors can significantly impact the accuracy of our estimates and materially impact our future reported earnings.

Because of control transferring over time, the majority of our revenue is recognized based on the extent of progress towards completion of the performance obligation.

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To identify the performance obligations, we consider all of the goods and services promised in the context of the contract and the pattern of transfer to our customers.

A limited portion of our revenue is recognized at a point in time when control transfers to the customer related to small modular construction and manufacturing contracts.

We recognize our manufacturing and construction contract revenue over time as we provide services to satisfy our performance obligations.

We generally use the cost based percentage-of-completion measure of progress as it best depicts how control transfers to our clients.

The cost based approach measures progress towards completion based on the ratio of contract cost incurred to date compared to total estimated contract cost.

Use of the cost based measure of progress requires us to prepare estimates of total expected revenue and cost to complete our projects.

Revenues exclude taxes assessed based on revenues such as sales or value added taxes.

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For the year ended December 31, 2022, each of Suncor Energy, Imperial Oil and Fortescue Metals Group Ltd accounted for more than 10 % of our revenues.

For the year ended December 31, 2021, each of Suncor Energy, Imperial Oil and Fortescue Metals Group Ltd accounted for more than 10% of our revenues.

For the year ended December 31, 2020, each of Fortescue Metals Group Ltd and Imperial Oil accounted for more than 10 % of our revenues.

For the year ended December 31, 2019, each of Imperial Oil and Fort Hills Energy LP accounted for more than 10 % of our revenues.

Asset Retirement Obligations

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We also grant performance share awards.

For awards granted in 2021, awards are earned in amounts between 0 % and 200 % of the participant’s target performance share award, based on (1) the payout percentage associated with Civeo’s relative total shareholder return (TSR) rank among a peer group of other companies and (2) the payout percentage associated with Civeo's cumulative free cash flow over the performance period relative to a preset target.

Performance share awards granted prior to 2021 are earned in amounts between 0 % and 200 % of the participant’s target performance share award, based on the payout percentage associated with Civeo’s relative TSR rank among a peer group of other companies.

For awards granted in 2022, awards are earned in amounts between 0 % and 200 % of the participant’s target performance share award, based on (1) the payout percentage associated with Civeo’s relative total shareholder return (TSR) rank among a peer group of other companies and (2) the payout percentage associated with Civeo's cumulative operating cash flow over the performance period relative to a preset target.

Awards granted in 2021 are earned in amounts between 0 % and 200 % of the participant’s target performance share award, based on (1) the payout percentage associated with Civeo’s relative TSR rank among a peer group of 17 other companies and (2) the payout percentage associated with Civeo's cumulative free cash flow over the performance period relative to a preset target.

The fair value of the TSR portion of each performance share is estimated using option-pricing models at the grant date.

The fair value of the free cash flow portion of each performance share is based on the closing market price of our common shares on the date of grant and adjusted throughout the performance period based on our estimate of the most probable outcome.

The fair value of the operating cash flow and free cash flow portion of each performance share is based on the closing market price of our common shares on the date of grant and adjusted throughout the performance period based on our estimate of the most probable outcome.

The resulting costs for each portion of the award is recognized over the period during which an employee is required to provide service in exchange for the awards, usually the vesting period.

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subsidiaries are guarantors under our Credit Agreement.

See Note 11 – Debt.

See Note 11 – Debt for further discussion.

During the ordinary course of business, we also provide standby letters of credit or other guarantee instruments to certain parties as required for certain transactions initiated by us or our subsidiaries.

As of December 31, 2021, the maximum potential amount of future payments that we could be required to make under these guarantee agreements (letters of credit) was

approximately $ 2.0 million.

As of December 31, 2022, the maximum potential amount of future payments that we could be required to make under these guarantee agreements (letters of credit) was approximately $ 2.0 million.

We have not recorded any liability in connection with these guarantee arrangements.

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Upon the ultimate resolution of these uncertainties, our future reported financial results will be impacted by the difference between our estimates and the actual amounts paid to settle a liability.

Examples of areas where we have made important estimates of future liabilities include litigation, taxes, interest, insurance claims, warranty claims, contract claims and obligations.

Examples of areas where we have made important estimates of future liabilities include litigation, insurance claims, warranty claims, contract claims and obligations.

Recent Accounting Pronouncements

From time to time, new accounting pronouncements are issued by the Financial Accounting Standards Board (the FASB), which are adopted by us as of the specified effective date.

From time to time, new accounting pronouncements are issued by the Financial Accounting Standards Board, which are adopted by us as of the specified effective date.

Unless otherwise discussed, management believes that the impact of recently issued standards or other guidance updates, which are not yet effective, will not have a material impact on our consolidated financial statements upon adoption.

In December 2019, the FASB issued Accounting Standards Update (ASU) 2019-12, Income Taxes (Topic 740):

Simplifying the Accounting for Income Taxes.

The amendments in ASU 2019-12 remove certain exceptions to the general principles in Accounting Standards Codification (ASC) Topic 740.

The amendments also clarify and amend existing guidance to improve consistent application.

The amendments are effective for financial statements issued for reporting periods beginning after December 15, 2020 and interim periods within the reporting periods.

The transition method (retrospective, modified retrospective or prospective basis) related to the amendments depends on the applicable guidance, and all amendments for which there is no transition guidance specified are to be applied on a prospective basis.

We adopted ASU 2019-12 on January 1, 2021 and have applied the prospective basis.

The adoption of this new standard did not have an impact on our consolidated financial statements.

The following table disaggregates our revenue by our three reportable segments:

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Food service and other services revenues 20,142 18,996 33,923

Manufacturing revenues — — 1,014

Total Canada revenues 395,997 321,378 269,649

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Canada Australia U.S.

Quarter ended December 31, 2022

Long-lived assets $ — $ 3,808 $ 1,913 $ 5,721

Total $ — $ 3,808 $ 1,913 $ 5,721

Quarter ended December 31, 2022 .

During the fourth quarter of 2022, we recorded impairment expense of $ 3.8 million, related to fixed assets in a village located in Western Australia.

At December 31, 2022, we identified an impairment trigger due to an expiring contract that was not renewed.

Accordingly, the assets were written down to their estimated fair value of $ 1.8 million.

In addition, we recorded impairment expense of $ 1.9 million, related to fixed assets in a lodge located in our U.S.

The lodge is recorded at the estimated fair value (less costs to sell) and was reduced to $ 7.7 million.

2021 Impairment Charges

The following summarizes pre-tax impairment charges recorded during 2021, which are included in Impairment expense in our consolidated statements of operations (in thousands):

Canada Australia U.S.

Quarter ended June 30, 2021

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Accordingly, the assets were written down to their estimated fair value of $ 2.4 million.

As of June 30, 2021, we concluded certain of the undeveloped land positions met the criteria to be classified as held for sale.

2020 Impairment Charges

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During the first quarter of 2020, we recorded impairment expense related to goodwill and long-lived assets.

The spread of the COVID-19 coronavirus (COVID-19) and the response thereto during the first quarter of 2020 negatively impacted the global economy.

The spread of COVID-19 and the response thereto during the first quarter of 2020 negatively impacted the global economy.

The resulting unprecedented decline in oil demand, coupled with disagreements between Saudi Arabia and Russia about production limits, resulted in a collapse of global oil prices in March 2020, thereby creating unprecedented downward pressure on stock prices in the energy industry, particularly small-cap companies with operations in the U.S.

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Also, as a result of the decline in global oil prices and forecasts for a potentially protracted period of lower prices, we reviewed all asset groups in our U.S.

segment to determine if an indicator of impairment had occurred that would indicate that

the carrying values of the asset groups in the segment might not be recoverable.

segment to determine if an indicator of impairment had occurred that would indicate that the carrying values of the asset groups in the segment might not be recoverable.

We determined that certain asset groups within the segment had experienced an indicator of impairment, and thus we assessed the carrying values of our long-lived assets in the U.S.

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Accordingly, these assets were written down to their estimated fair values of $ 12.5 million and we recorded impairment expense of $ 12.4 million during the first quarter of 2020 related to these long-lived assets.

2019 Impairment Charges

The following summarizes pre-tax impairment charges recorded during 2019, which are included in Impairment expense in our consolidated statements of operations (in thousands):

Canada Australia U.S.

Quarter ended June 30, 2019

Long-lived assets $ — $ 5,546 $ — $ 5,546

Quarter ended December 31, 2019

Long-lived assets 702 — — 702

Goodwill 19,900 — — 19,900

Total $ 20,602 $ 5,546 $ — $ 26,148

Quarter ended December 31, 2019 .

In performing our annual goodwill impairment test as of November 30, 2019, we compared the fair value of our reporting units to their respective carrying values.

The carrying amount of our Canadian reporting unit exceeded the reporting unit's fair value.

Based on the results of the impairment test, we recognized an impairment expense of $ 19.9 million related to our Canadian reporting unit.

During the fourth quarter of 2019, we recorded an impairment expense of $ 0.7 million related to corporate office space in Canada.

The facility is closed and recorded at the estimated fair value (less costs to sell) and was reduced due to a recent appraisal report.

Quarter ended June 30, 2019 .

During the second quarter of 2019, we identified indicators that certain long-lived assets in Australia may be impaired due to market developments, including the non-renewal of certain land development approval agreements.

We assessed the carrying values of the related assets to determine if they continued to be recoverable based on estimated future cash flows.

Based on the assessment, the carrying values were determined to not be fully recoverable, and we proceeded to compare the estimated fair value of the assets to their respective carrying values.

Accordingly, the assets were written down to their estimated fair values of $ 0.5 million.

As a result of the analysis described above, we recorded an impairment expense of $ 4.5 million.

Additionally, during the second quarter of 2019, we identified a liability related to an ARO at one of our villages in Australia that should have been recorded in 2011.

We determined that the error was not material to our previously issued financial statements included in our Annual Report on Form 10-K for the year ended December 31, 2018, and therefore, corrected the error in the second quarter of 2019.

Specifically, we recorded the following amounts in the second quarter 2019 unaudited consolidated statement of operations related to prior periods:

(1) additional accretion expense related to the ARO of $ 0.9 million, (2) additional depreciation and amortization expense of $ 0.5 million related to amortization of the related asset retirement cost and (3) additional impairment expense related to the impairment of the asset retirement cost of $ 1.0 million offset by recognition of an ARO liability totaling $ 2.3 million as of June 30, 2019.

FAIR VALUE MEASUREMENTS

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In addition, the estimated fair value of our assets held for sale is based upon Level 2 fair value measurements, which include appraisals and previous negotiations with third parties.

During the first quarter of 2020 and the fourth quarter of 2019, we recorded goodwill impairment charges related to one of our reporting units.

During the first quarter of 2020, we recorded a goodwill impairment charge related to one of our reporting units.

Our estimates of fair value required us to use significant unobservable inputs, representative of Level 3 fair value measurements, including numerous assumptions with respect to future circumstances that might directly impact each of the relevant asset groups’ operations in the future and are therefore uncertain.

These assumptions with respect to future circumstances included future cash flows, oil, met coal and natural gas prices, anticipated spending by our customers, the cost of capital, and industry and/or local market conditions.

We estimated the fair value when conducting the first quarter of 2020 goodwill impairment test primarily using an income approach and we used a combination of income and market approaches when conducting the fourth quarter of 2019 goodwill impairment test.

The discount rates used to value our reporting units for the first quarter of 2020 and the fourth quarter of 2019 for the goodwill impairment test ranged between 10.5 % and 14.0 %.

During the second quarter of 2021, the first quarter of 2020 and the fourth and second quarters of 2019, we wrote down certain long-lived assets to fair value.

We estimated the fair value when conducting the first quarter of 2020 goodwill impairment test primarily using an income approach.

The discount rates used to value our reporting units for the first quarter of 2020 for the goodwill impairment test ranged between 10.5 % and 14.0 %.

During the fourth quarter of 2022, the second quarter of 2021 and the first quarter of 2020, we wrote down certain long-lived assets to fair value.

During the first quarter of 2020, we estimated the fair value when conducting the long-lived asset impairment tests primarily using an income approach.

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segments long-lived asset impairment analysis ranged between 11.0 % and 14.0 %.

Additionally, during the first quarter of 2020, our estimate of fair value of a property in the U.S.

was taken from an appraisal, which referenced available market information, such as listing agreements, offers, and pending and closed sales.

During the fourth quarter of 2019, our estimate of fair value of corporate office space in Canada and during the second quarter of 2021 and 2019, our estimate of fair value of land positions in Australia that were impaired, were based on appraisals from third parties.

Additionally, during the first quarter of 2020 and the fourth quarter of 2022, our estimate of fair value of a property in the U.S.

was based on appraisals from third parties, which referenced available market information, such as listing agreements, offers, and pending and closed sales.

During the second quarter of 2021 and the fourth quarter of 2022, our estimate of fair value in Australia for assets that were impaired, was based on appraisals from third parties.

See Note 2 – Summary of Significant Accounting Policies – Impairment of Long-Lived Assets and Note 2 – Summary of Significant Accounting Policies – Goodwill and Other Intangible Assets for further discussion of the significant judgments and assumptions used in calculating their fair value.

EARNINGS PER SHARE

We calculate basic and diluted earnings per share by applying the two-class method because we have participating securities in the form of Preferred Shares.

Participating securities are allocated a proportional share of net income determined by dividing total weighted average participating securities by the sum of total weighted average common shares and participating securities.

We use the two-class method to calculate basic and diluted earnings per share because we had participating securities in the form of Series A preferred shares.

The two-class method requires a proportional share of net income to be allocated between common shares and participating securities.

The proportional share to be allocated to participating securities is determined by dividing total weighted average participating securities by the sum of total weighted average common shares and participating securities.

Basic earnings per share is computed under the two-class method by dividing the net income (loss) attributable to common shareholders by the weighted average number of common shares outstanding during the period.

Net income attributable to common shareholders represents our net income reduced by an allocation of current period earnings to participating securities as described above.

No such adjustment is made during periods with a net loss, as the adjustment would be anti-dilutive.

Diluted earnings per share is computed under the two-class method by dividing diluted net income (loss) attributable to common shareholders by the weighted average number of common shares outstanding, plus, for periods with net income attributable to common stockholders, the potential dilutive effects of share-based awards.

In addition, we calculate the potential dilutive effect of any outstanding dilutive security under both the two-class method and the “if-converted” method, and we report the more dilutive of the methods as our diluted earnings per share.

We also apply the treasury stock method with respect to certain share-based awards in the calculation of diluted earnings per share, if dilutive.

On October 30, 2022, we repurchased 3,617 Series A preferred shares from the holders for approximately $ 30.6 million.

The repurchase premium of $ 5.2 million is treated as a reduction to the numerator of net income (loss) attributable to Civeo common shareholders utilized in the calculation of earnings per share for the year ended December 31, 2022.

The calculation of earnings per share attributable to Civeo common shareholders is presented below for the periods indicated (in thousands, except per share amounts):

2022 2021 2020

Net loss attributable to Civeo common shareholders $ ( 575 ) $ ( 136,137 ) $ ( 60,340 )

Net income (loss) attributable to Civeo common shareholders $ 2,226 $ ( 575 ) $ ( 136,137 )

premium paid for repurchase of preferred shares ( 5,189 ) — —

income allocated to participating securities — — —

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(1) Computations may reflect rounding adjustments.

When an entity has a net loss from continuing operations, it is prohibited from including potential common shares in the computation of diluted per share amounts.

For the years ended December 31, 2021, 2020 and 2019, we excluded from the

computation of diluted loss per share 0.2 million, 0.4 million and 0.5 million share-based awards, respectively, since the effect would have been anti-dilutive.

Additionally, for the years ended December 31, 2021, 2020 and 2019, we excluded from the calculation the impact of converting the Preferred Shares into 2.5 million, 2.4 million and 2.4 million common shares, respectively, since the effect would have been anti-dilutive.

The following common share equivalents have been excluded from the calculation of weighted-average common shares outstanding because the effect is anti-dilutive for the periods presented (in millions of shares):

2022 2021 2020

Share-based awards 0.2 0.2 0.4

Preferred shares 2,240 2,461 2,412

DETAILS OF SELECTED BALANCE SHEET ACCOUNTS

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Unbilled revenue

52,547 38,508

Other 1,944 972

Total accounts receivable

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$ 119,755 $ 114,859

(1) As of December 31, 2021 and 2020, Other accounts receivable included zero and $ 1.1 million, respectively, related to the Canada Emergency Wage Subsidy (CEWS), a subsidy implemented by the Canadian government in response to the COVID-19 pandemic.

Income related to the CEWS for the year ended December 31, 2021 and 2020 was $ 3.5 million and $ 13.0 million, respectively, and is included in Other income on the accompanying consolidated statement of operations.

December 31, 2022 December 31, 2021

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Vehicles 3 - 5

14,578 15,363

Construction in progress 1,771 2,063

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$ 39,211 $ 33,564

December 31, 2022 December 31, 2021

Deferred revenue:

Contract liabilities $ 991 $ 18,479

Deferred revenue consists of contract liabilities resulting from upfront payments related to the mobilization of mobile assets to service pipeline projects in our Canadian business segment.

The decrease in deferred revenue from December 31, 2021 to December 31, 2022 was primarily due to the recognition of deferred revenue over the contracted terms of these pipeline projects in Canada.

ASSETS HELD FOR SALE

During the third quarter of 2021, we committed to a plan to dispose of certain assets in our U.S.

business segment, due to the risks associated with changing geographic and market needs.

Accordingly, the assets met the criteria of held for sale and we have discontinued depreciation of the assets.

During the fourth quarter of 2021, we received $ 6.2 million in proceeds for the sale of one of the two asset groups.

The remaining asset group's estimated fair value less the costs to sell exceeded its carrying value as of December 31, 2021.

In addition, as of December 31, 2021, assets held for sale included various non-operational land holdings in Australia.

These assets were recorded at the estimated fair value less costs to sell, which exceeded their carrying values, as of December 31, 2021.

As of December 31, 2020, assets held for sale included $ 3.9 million related to our modular construction and manufacturing plant near Edmonton, Alberta, Canada.

During the first quarter 2021, we received $ 5.2 million in proceeds for the sale of the manufacturing facility.

As of December 31, 2022, assets held for sale included certain assets in our U.S.

and Canadian business segments.

These assets were recorded at the estimated fair value less costs to sell, which exceeded or equaled their carry values.

As of December 31, 2021, assets held for sale included certain assets in our U.S.

business segment and undeveloped land holdings in our Australia business segment.

These assets were recorded at the estimated fair value less costs to sell, which exceeded their carrying values.

The following table summarizes the carrying amount as of December 31, 2022 and 2021 of the assets classified as held for sale (in thousands):

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Canada Australia U.S.

Goodwill, net of $ 19.9 million accumulated impairment loss as of December 31, 2019

$ 102,238 $ 7,935 $ — $ 110,173

Goodwill as of December 31, 2020 $ — $ 8,729 $ — $ 8,729

Foreign currency translation — ( 525 ) — ( 525 )

Goodwill impairment (1)

( 93,606 ) — — ( 93,606 )

Goodwill, net of $ 113.5 million accumulated impairment loss as of December 31, 2020

$ — $ 8,729 $ — $ 8,729

Goodwill as of December 31, 2021 $ — $ 8,204 $ — $ 8,204

Foreign currency translation — ( 532 ) — ( 532 )

Goodwill, net of $ 113.5 million accumulated impairment loss as of December 31, 2021

$ — $ 8,204 $ — $ 8,204

(1) See Note 4 – Impairment Charges for further information.

Goodwill as of December 31, 2022 $ — $ 7,672 $ — $ 7,672

The following table presents the total amount of other intangible assets and the related accumulated amortization for major intangible asset classes as of December 31, 2022 and 2021 (in thousands):

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We have operating leases covering certain land locations and various office facilities and equipment in our three reportable business segments.

Our leases have remaining lease terms of one year to six years , some of which include options to extend the leases for up to 10 years, and some of which include options to terminate the leases within 90 days.

Our leases have remaining lease terms of one year to eight years , some of which include options to extend the leases for up to 10 years, and some of which include options to terminate the leases within 90 days.

In addition, we do not recognize right-of-use assets or lease liabilities for leases with terms shorter than twelve months.

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Maturities of operating lease liabilities at December 31, 2022, were as follows (in thousands):

For the years ending December 31,

Thereafter 1,751

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Scheduled maturities of long-term debt as of December 31, 2022 are as follows (in thousands):

Amended and Restated Credit Agreement

As of December 31, 2020, our credit agreement provided for a $ 167.3 million revolving credit facility scheduled to mature on May 30, 2023, allocated as follows:

(A) a $ 10.0 million senior secured revolving credit facility in favor of certain of our U.S.

subsidiaries, as borrowers;

(B) a $ 122.3 million senior secured revolving credit facility in favor of Civeo and certain of our Canadian subsidiaries, as borrowers;

(C) a $ 35.0 million senior secured revolving credit facility in favor of one of our Australian subsidiaries, as borrower;

and (D) a $ 194.8 million term loan facility scheduled to mature on May 30, 2023 for certain lenders in favor of Civeo.

New Syndicated Facility Agreement

On September 8, 2021, we entered into a new Syndicated Facility Agreement (Credit Agreement), which, among other things, as compared to the prior credit agreement outstanding prior to the effectiveness of the Credit Agreement:

• provided for the increase by $ 32.7 million of the aggregate revolving loan commitments under the Credit Agreement, to a maximum principal amount of $ 200.0 million, allocated as follows:

2023 $ 29,532

Credit Agreement

As of December 31, 2022, our Credit Agreement (as then amended to date, the Credit Agreement) provided for:

(i) a $ 200.0 million revolving credit facility scheduled to mature on September 8, 2025, allocated as follows:

(A) a $ 10.0 million senior secured revolving credit facility in favor of one of our U.S.

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(B) a $ 155.0 million senior secured revolving credit facility in favor of Civeo, as borrower;

and (C) a $ 35.0 million senior secured revolving credit facility in favor of one of our Australian subsidiaries, as borrower, scheduled to mature on September 8, 2025;

• provided for a C$ 100.0 million term loan facility scheduled to be fully repaid on December 31, 2023 in favor of Civeo;

• adjusted the maximum leverage ratio to a maximum total net leverage ratio, and adjusted the level of the ratio to (i) 3.50 to 1.00 for the fiscal quarter ending September 30, 2021, 3.25 to 1.00 for the fiscal quarters ending December 31, 2021 and March 31, 2022 and 3.00 to 1.00 for each fiscal quarter ending thereafter and (ii) following a qualified offering of indebtedness, 3.50 to 1.00 for each fiscal quarter;

• decreased amortization payments on the term loan facility from C$ 11.2 million per quarter to C$ 10.0 million per quarter beginning September 30, 2021;

• provided for other technical changes and amendments.

As a result of entering into the Credit Agreement, we recognized a debt extinguishment loss during the third quarter of 2021 of approximately $ 0.4 million related to certain unamortized debt issuance costs from the prior credit agreement, which is included in Loss on extinguishment of debt on the consolidated statements of operations.

The remaining $ 3.0 million of unamortized debt issuance costs from the prior credit agreement was not recognized as a loss as we concluded a significant portion of the Credit Agreement was a modification of the prior credit agreement under ASC 740, Debt.

dollar amounts outstanding under the facilities provided by the Credit Agreement bear interest at a variable rate equal to the London Inter-Bank Offered Rate (LIBOR) plus a margin of 3.00 % to 4.00 %, or a base rate plus 2.00 % to 3.00 %, in each case based on a ratio of our total debt to Consolidated EBITDA (as defined in the Credit Agreement).

and (C) a $ 35.0 million senior secured revolving credit facility in favor of one of our Australian subsidiaries, as borrower;

and (ii) a C$ 100.0 million term loan facility scheduled to be fully repaid on December 31, 2023 in favor of Civeo.

dollar amounts outstanding under the facilities provided by the Credit Agreement bear interest at a variable rate equal to the London Inter-Bank Offered Rate (LIBOR) plus a margin of 3.00 % to 4.00 %, or a base rate plus 2.00 % to 3.00 %, in each case based on a ratio of our total net debt to Consolidated EBITDA (as defined in the Credit Agreement).

Canadian dollar amounts outstanding bear interest at a variable rate equal to a Bankers' Acceptance Discount Rate (as defined in the Credit Agreement) based on the Canadian Dollar Offered Rate (CDOR) plus a margin of 3.00 % to 4.00 %, or a Canadian Prime rate plus a margin of 2.00 % to 3.00 %, in each case based on a ratio of our total debt to Consolidated EBITDA.

Australian dollar amounts outstanding under the Credit Agreement bear interest at a variable rate equal to the Bank Bill Swap Bid Rate plus a margin of 3.00 % to 4.00 %, based on a ratio of our total debt to consolidated EBITDA.

The future transitions from LIBOR and CDOR as interest rate benchmarks are addressed in the Credit Agreement and at such time the transition from (i) LIBOR takes place, an alternate benchmark will be established based on the first alternative of the following, plus a benchmark replacement adjustment, Term SOFR, Daily Simple SOFR and an alternative benchmark selected by the administrative agent and the applicable borrowers giving due consideration to any selection or recommendation by a government body or any evolving or then-prevailing market convention for determining a benchmark rate as a replacement for the then-current Benchmark for U.S.

The future transitions from LIBOR and CDOR as interest rate benchmarks are addressed in the Credit Agreement and at such time the transition from (i) LIBOR takes place, an alternate benchmark will be established based on the first alternative of the following, plus a benchmark replacement adjustment, Term Secured Overnight Financing Rate (SOFR), Daily Simple SOFR and an alternative benchmark selected by the administrative agent and the applicable borrowers giving due consideration to any selection or recommendation by a government body or any evolving or then-prevailing market convention for determining a benchmark rate as a replacement for the then-current Benchmark for U.S.

dollar-denominated syndicated credit facilities at such time or (ii) CDOR takes place, we will endeavor with the administrative agent to establish an alternate rate of interest to CDOR that gives due consideration to any evolving or then existing convention for similar Canadian Dollar denominated syndicated credit facilities for the replacement of CDOR.

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and (vii) investments and other restricted payments, including dividends and other distributions.

In addition, we must maintain a minimum interest coverage ratio, defined as the ratio of consolidated EBITDA to consolidated interest expense, of at least 3.00 to 1.00 and our maximum net leverage ratio, defined as the ratio of total net debt to consolidated EBITDA, of no greater than the levels set forth above.

In addition, we must maintain a minimum interest coverage ratio, defined as the ratio of consolidated EBITDA to consolidated interest expense, of at least 3.00 to 1.00 and our maximum net leverage ratio, defined as the ratio of total net debt to Consolidated EBITDA, of no greater than 3.00 to 1.00.

Following a qualified offering of indebtedness, we will be required to maintain a maximum leverage ratio of no greater than 3.50 to 1.00 and a maximum senior secured ratio less than 2.00 to 1.00.

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Accretion of discount 1,830 1,429 1,526

New obligations — — 497

Change in estimates of existing obligations 4,138 ( 763 ) ( 3,961 )

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Employee contributions are required in order to be eligible for the DPSP employer matching.

Maximum employer matching ( 5 % noted above) is attained with 6 % employee contribution which would go into a Group Registered Retirement Savings Plan (GRRSP).

Maximum employer matching ( 5 % noted above) is attained with 6 % employee contribution which would go into a Group Registered Retirement Savings Plan.

The two plans work in tandem.

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Valuation allowance 153 1.4 % 1,028 17.5 % ( 1,355 ) 0.9 %

Enacted tax rate change - Canada — — % — — % ( 2,452 ) 3.5 %

Noncontrolling interest ( 562 ) ( 5.2 ) % — — % — — %

Non-deductible goodwill impairment — — % — — % 22,984 ( 16.0 ) %

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Non-taxable Noralta representations and warranties claim — — % — — % ( 1,132 ) 0.8 %

Deemed income from foreign subsidiaries 331 3.1 % 297 5.1 % 240 ( 0.2 ) %

Other, net 221 2.0 % 50 0.8 % 316 ( 0.2 ) %

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Canadian Rate Change.

Effective July 1, 2019, the Province of Alberta introduced a four-year graduated decrease in the income tax rate from 12% to 8%, resulting in a decrease of our net deferred tax liability of $ 2.5 million during the year ended December 31, 2019.

As part of Alberta’s Recovery Plan, the government accelerated the rate reduction to 8% effective July 1, 2020.

As the impact of the full rate change was effectuated on our net deferred tax liability in 2020, the acceleration had no impact to our net deferred tax liability as of December 31, 2021.

As part of Alberta’s Recovery Plan, effective July 1, 2019, the government introduced a four-year graduated decrease in the income tax rate from 12% to 8% but subsequently accelerated the rate reduction to 8% effective July 1, 2020.

As the impact of the full rate change was effectuated on our net deferred tax liability in 2020, the acceleration had no impact to our net deferred tax liability as of December 31, 2021 or December 31, 2022.

Deferred Tax Liabilities and Assets.

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Other reserves

Unearned revenue

Operating lease liabilities

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( 67,405 ) ( 81,522 )

Net deferred tax assets (liabilities), net (1)

$ ( 896 ) $ 2,233

Net deferred tax assets are classified as a noncurrent asset on the consolidated balance sheet, under the caption “Other noncurrent assets.”

Net deferred tax liabilities, net $ ( 4,778 ) $ ( 896 )

At December 31, 2022 and 2021, we had no undistributed earnings of foreign subsidiaries that would be subject to income tax upon distribution to Canada from a foreign subsidiary.

As such, as of December 31, 2022 and 2021, we did not provide for deferred taxes on any such earnings of our foreign subsidiaries.

NOL Carryforwards.

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As of each reporting date, management considers new evidence, both positive and negative, that could affect our view of the future realization of deferred tax assets.

As of December 31, 2020, in part because during the year we achieved three years of cumulative pre-tax income in the Australian federal tax jurisdiction, management determined that there is sufficient positive evidence to conclude that it is more likely than not that additional deferred tax assets of $ 9.1 million are realizable.

We therefore reduced the valuation allowance accordingly in this jurisdiction.

As of December 31, 2022, management determined that there is not sufficient evidence to conclude that it is more likely than not that the Canadian and U.S.

deferred tax assets are realizable, therefore we have maintained the valuation allowance in both of these jurisdictions.

Indefinite Reinvestment of Earnings.

At December 31, 2021 and 2020, we had no undistributed earnings of foreign subsidiaries subject to income tax in Canada.

We continue to make an assertion to indefinitely reinvest the unrepatriated earnings, if any, of any foreign subsidiary.

As of December 31, 2021, we did not provide for deferred taxes on earnings of our foreign subsidiaries that are indefinitely reinvested.

If we were to make a distribution from the unremitted earnings of these subsidiaries, we could be subject to taxes in various jurisdictions.

However, it is not practical to estimate the amount of tax that could ultimately be due if such earnings were remitted.

net deferred tax assets are realizable, therefore we have maintained the valuation allowance in both of these jurisdictions.

As of December 31, 2022, management determined that there is not sufficient evidence to conclude that it is more likely than not that the Australia deferred tax assets related to certain capital assets are realizable, therefore we have maintained a partial valuation allowance in Australia.

Unrecognized Tax Benefits.

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PREFERRED SHARES

As further discussed in Note 21 – Acquisitions, on April 2, 2018, we issued 9,679 Preferred Shares as part of the Noralta Acquisition.

The Preferred Shares had an initial liquidation preference of $ 10,000 per share.

Holders of the Preferred Shares are entitled to receive a 2 % annual dividend on the liquidation preference paid quarterly in cash or, at our option, by increasing the Preferred Shares’ liquidation preference or any combination thereof.

As of December 31, 2021, 9,042 Preferred Shares were outstanding.

The decrease in Preferred Shares outstanding since the close of the Noralta Acquisition was due to the release of 637 Preferred Shares initially held in escrow to support certain obligations of the Noralta Acquisition.

The Preferred Shares are convertible into our common shares at a conversion price of $ 39.60 per Preferred Share, subject to certain anti-dilution adjustments (the Conversion Price).

We have the right to elect to convert the Preferred Shares into our common shares if the 15-day volume weighted average price of our common shares is equal to or exceeds the Conversion Price.

Holders of the Preferred Shares will have the right to convert the Preferred Shares into our common shares at any time after 2 years from the date of issuance, and the Preferred Shares mandatorily convert after 5 years from the date of issuance.

The Preferred Shares also convert automatically into our common shares upon a change of control of Civeo.

We may, at any time and from time to time, redeem any or all of the Preferred Shares for cash at the liquidation preference, plus accrued and unpaid dividends.

The Preferred Shares do not have voting rights, except as statutorily required.

During the years ended December 31, 2021, 2020 and 2019, we recognized preferred dividends on the Preferred Shares as follows (in thousands):

As further discussed in Note 21 – Acquisitions, on April 2, 2018, we issued 9,679 Series A preferred shares as part of the acquisition of Noralta Lodge Ltd.

(Noralta Acquisition).

The Series A preferred shares had an initial liquidation preference of $ 10,000 per share.

Holders of the Series A preferred shares were entitled to receive a 2 % annual dividend on the liquidation preference paid quarterly in cash or, at our option, by increasing the Series A preferred shares’ liquidation preference or any combination thereof.

During the fourth quarter of 2018, 637 Series A preferred shares initially held in escrow to support certain obligations of the Noralta Acquisition were released.

On October 30, 2022, 3,617 Series A preferred shares were repurchased from the holders for approximately $ 30.6 million, which included accrued dividends of under $ 0.1 million.

On December 13, 2022, the holders of the Series A preferred shares elected to convert the remaining 5,425 Series A preferred shares outstanding into 1,504,539 common shares.

As of December 31, 2022, we had no Series A preferred shares outstanding.

During the years ended December 31, 2022, 2021 and 2020, we recognized preferred dividends on the Series A preferred shares as follows (in thousands):

2022 2021 2020

In-kind dividends $ 1,706 $ 1,925 $ 1,887

Cash dividend on repurchased preferred shares 65 — —

Total preferred dividends $ 1,771 $ 1,925 $ 1,887

The Board of Directors elected to pay the dividends for each quarterly period beginning June 30, 2019 through December 31, 2021 through an increase in the liquidation preference rather than in cash.

The Board of Directors elected to pay the dividends beginning June 30, 2018 through December 12, 2022 through an increase in the liquidation preference rather than in cash.

The paid-in-kind dividend of $ 1.7 million, $ 1.9 million and $ 1.9 million is included in Preferred dividends on the accompanying consolidated statements of operations for the years ended December 31, 2022, 2021 and 2020, respectively.

SHARE REPURCHASE PROGRAM

In August 2021, our Board of Directors (Board) authorized a common share repurchase program to repurchase up to 5.0 % of our total common shares which are issued and outstanding, or approximately 715,000 common shares, over a twelve month period.

The common share repurchase program commenced in September 2021 and will terminate no later than twelve months from date of commencement.

On December 13, 2022, the holders of the Series A preferred shares converted all outstanding Series A preferred shares into common shares.

Following such conversion, no further dividends are required to be paid.

COMMON SHARE REPURCHASES

In August 2021, our Board of Directors authorized a common share repurchase program (the 2021 Share Repurchase Program) to repurchase up to 5.0 % of our total common shares which were issued and outstanding, or approximately 715,000 common shares, over a twelve month period.

In August 2022, our Board of Directors authorized a new common share repurchase program (the 2022 Share Repurchase Program) to repurchase up to 5.0 % of our total common shares which are issued and outstanding, or approximately 685,000 common shares, over a twelve month period.

The 2022 Share Repurchase Program and the 2021 Share Repurchase Program are collectively referred to as the "Share Repurchase Programs."

The repurchase authorization allows repurchases from time to time in open market transactions, including pursuant to trading plans adopted in accordance with Rule 10b5-1 of the Securities Exchange Act of 1934.

We intend to fund repurchases through cash on hand and cash generated from operations.

Pursuant to our common share repurchase program, during the six months ended December 31, 2021, we repurchased an aggregate of 217,179 of our common shares outstanding at a weighted average price of $ 21.38 per share, for a total of approximately $ 4.6 million.

The common shares repurchased under the program are cancelled in the periods they are acquired and the payment is accounted for as an increase to Accumulated deficit in our consolidated statements of changes in shareholders’ equity in the period the payment is made.

We have funded, and intend to continue to fund, repurchases through cash on hand and cash generated from operations.

The common shares repurchased under the Share Repurchase Programs are cancelled in the periods they are acquired and the payment is accounted for as an increase to accumulated deficit in our Consolidated Statements of Changes in Shareholders’ Equity in the period the payment is made.

Pursuant to our 2021 Share Repurchase Program, during the year ended December 31, 2022, we repurchased an aggregate of 123,882 of our common shares outstanding at a weighted average price of $ 28.54 per share, for a total of approximately $ 3.5 million.

We repurchased an aggregate of 341,061 of our common shares outstanding at a weighted average price of $ 23.98 per share for a total cost of $ 8.2 million during the twelve month period comprising the 2021 Share Repurchase Program.

We have not repurchased any shares under the 2022 Share Repurchase Program as of December 31, 2022.

In addition to the shares repurchased pursuant to the 2021 Share Repurchase Program, we repurchased 374,753 common shares from a shareholder for approximately $ 10.7 million during the three months ended September 30, 2022.

ACCUMULATED OTHER COMPREHENSIVE LOSS

Our accumulated other comprehensive loss increased $ 23.3 million from $ 361.9 million at December 31, 2021 to $ 385.2 million at December 31, 2022, as a result of foreign currency exchange rate fluctuations.

Changes in other comprehensive loss during 2021 were primarily driven by the Australian dollar decreasing in value compared to the U.S.

dollar, partially offset by the Canadian dollar increasing in value compared to the U.S.

Changes in other comprehensive loss during 2022 were primarily driven by the Australian dollar and Canadian dollar decreasing in value compared to the U.S.

Excluding intercompany balances, our Canadian dollar and Australian dollar functional currency net assets totaled approximately C$ 189 million and A$ 232 million, respectively, at December 31, 2022.

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Certain key employees and non-employee directors participate in the Amended and Restated 2014 Equity Participation Plan of Civeo Corporation (the Civeo Plan).

The Civeo Plan authorizes our Board and the Compensation Committee of our Board to approve grants of options, awards of restricted shares, performance shares, phantom shares and dividend equivalents, awards of deferred shares, and share payments to our employees and non-employee directors.

The Civeo Plan authorizes our Board of Directors and the Compensation Committee of our Board of Directors to approve grants of options, awards of restricted shares, performance awards, phantom share awards and dividend equivalents, awards of deferred shares, and share payments to our employees and non-employee directors.

No more than 2.4 million Civeo common shares are authorized to be issued under the Civeo Plan.

Share-based compensation expense recognized in the years ended December 31, 2022, 2021 and 2020 totaled $ 14.9 million, $ 9.9 million and $ 8.4 million, respectively.

Share-based compensation expense is reflected in Selling, general and administrative (SG&A) expense in our consolidated statements of operations.

Share-based compensation expense is reflected in Selling, general and administrative expense in our consolidated statements of operations.

The total income tax benefit recognized in the consolidated statements of operations for share based compensation arrangements was approximately $ 0.8 million, $ 0.5 million and $ 0.5 million for the years ended December 31, 2022, 2021 and 2020, respectively.

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Outstanding Options at December 31, 2019 12,143 $ 215.59 2.3 $ —

Forfeited / Expired ( 1,817 ) 197.16

Outstanding Options at December 31, 2020 10,326 $ 218.83 1.4 $ —

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1,530 0.3 $ 229.52 1,530 $ 229.52

1,912 1.2 $ 227.85 1,912 $ 227.85

Restricted Share Awards/ Restricted Share Units/ Deferred Share Awards

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Vested ( 86,290 ) 21.83

Forfeited ( 1,957 ) 30.36

Nonvested shares at December 31, 2022 39,032 25.62

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We grant performance awards, which cliff vest in three years subject to attainment of applicable performance criteria.

Awards granted in 2021 will be earned in amounts between 0 % and 200 % of the participant’s target performance share award, based on (1) the payout percentage associated with Civeo’s relative TSR rank among a peer group that includes 17 other companies and (2) the payout percentage associated with Civeo's cumulative free cash flow over the performance period relative to a preset target.

The portion of the performance awards tied to cumulative free cash flow includes a performance-based vesting requirement.

Awards granted in 2022 will be earned in amounts between 0 % and 200 % of the participant’s target performance share award, based equally on (1) the payout percentage associated with Civeo’s relative TSR rank among a peer group that includes 17 other companies and (2) the payout percentage associated with Civeo's cumulative operating cash flow over the performance period relative to a preset target.

Awards granted in 2021 are earned in amounts between 0 % and 200 % of the participant’s target performance share award, based on (1) the payout percentage associated with Civeo’s relative TSR rank among a peer group that includes 17 other companies and (2) the payout percentage associated with Civeo's cumulative free cash flow over the performance period relative to a preset target.

The portion of the performance awards tied to cumulative operating cash flow and free cash flow includes a performance-based vesting requirement.

The fair value of these awards is based on the closing market price of our common shares on the date of grant.

We evaluate the probability of achieving the performance criteria throughout the performance period and will adjust share-based compensation expense based on the number of shares expected to vest based on our estimate of the most probable performance outcome.

The ultimate payout of the cumulative free cash flow component of the award can vary from 0 % to 60 % based on actual results.

The fair value of the TSR portion of each performance share award was estimated using a Monte Carlo simulation pricing model that uses the assumptions noted in the following table.

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Nonvested shares at December 31, 2019 232,256 $ 55.27

Granted 98,717 44.76

Performance adjustment (1)

160,156 35.20

Vested ( 109,904 ) 62.40

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Nonvested shares at December 31, 2020 152,312 $ 52.86

Granted 129,754 26.86

Performance adjustment (2)

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Net income taxes paid, net of refunds received 220 334 600

On July 1, 2019, we acquired Action, a provider of integrated services to the mining industry in Western Australia.

We funded the purchase price of $ 16.9 million in cash through a combination of cash on hand and borrowings under our revolving credit facility.

Action's operations are reported as part of our Australia reporting business segment beginning on July 1, 2019, the date of acquisition.

On April 2, 2018, we acquired the equity of Noralta.

As a result of the Noralta Acquisition, we expanded our existing accommodations business in the Canadian oil sands market.

The total consideration, which is subject to adjustment in accordance with the terms of the definitive agreement, included (i) C$ 207.7 million (or approximately US$ 161.2 million) in cash, subject to customary post-closing adjustments for working capital, indebtedness and transactions expenses, (ii) 2.7 million of our common shares, of which 1.1 million shares are held in escrow and will be released based on certain conditions related to Noralta customer contracts remaining in place, and (iii) 9,679 Class A Series 1 Preferred Shares (the Preferred Shares) with an initial liquidation preference of $ 96.8 million and initially convertible into 2.4 million of our common shares.

The total consideration, which is subject to adjustment in accordance with the terms of the definitive agreement, included (i) C$ 207.7 million (or approximately US$ 161.2 million) in cash, subject to customary post-closing adjustments for working capital, indebtedness and transactions expenses, (ii) 2.7 million of our common shares, of which 1.1 million shares are held in escrow and will be released based on certain conditions related to Noralta customer contracts remaining in place, and (iii) 9,679 Series A preferred shares with an initial liquidation preference of $ 96.8 million and initially convertible into 2.4 million of our common shares.

We funded the cash consideration with cash on hand and borrowings under our revolving credit facility.

During the second quarter of 2020, $ 5.0 million in cash was released to us from escrow to cover certain agreed upon indemnification claims.

During the second quarter of 2022 and 2021, 0.4 million shares and 0.4 million shares, respectively, were released to the sellers from an escrow established to cover conditions related to Noralta customer contracts remaining in place.

second quarter of 2020, $ 5.0 million in cash was released to us from escrow to cover certain agreed upon indemnification claims.

As a result of this settlement, we recorded $ 4.7 million in Other income on the accompanying consolidated statement of operations for the year ended December 31, 2020.

During the first quarter of 2019, $ 2.1 million in cash was released to us from escrow to cover certain agreed upon indemnification claims.

SEGMENT AND RELATED INFORMATION

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Compared sentence by sentence after normalising whitespace, quotation marks, case and digits, so re-formatting and restated figures do not read as changed language. Wording changes appear as one removal and one addition. The current filing and the prior one are authoritative.

What changed 10-K

Item 9A. Controls and Procedures