Civeo Corp 10-K

ITEM 9A. Controls and Procedures (i) Evaluation of Disclosure Controls and Procedures As of the end of the period covered by this annual report, we carried out an evaluation, under the supervision and with the participation of our management, including our Chief Executive Officer and Chief Financial Officer, of the effectiveness of the design and operation of our disclosure controls and procedures (as defined in Rules 13a-15(e) and 15d-15(e) under the Exchange Act). Our disclosure controls and procedures are designed to provide reasonable assurance that the information required to be disclosed by us in reports that we file under the Exchange Act is accumulated and communicated to our management, including our Chief Executive Officer and Chief Financial Officer, as appropriate, to allow timely decisions regarding required disclosure and is recorded, processed, summarized and reported within the time periods specified in the rules and forms of the Securities and Exchange Commission. Based upon that evaluation, our Chief Executive Officer and Chief Financial Officer concluded that our disclosure controls and procedures were effective as of December 31, 2023 at the reasonable assurance level. (ii) Internal Control Over Financial Reporting (a) Management's annual report on internal control over financial reporting. 60 Our management is responsible for establishing and maintaining adequate internal control over financial reporting as defined in Rules 13a-15(f) and 15d-15(f) under the Exchange Act. Our internal control over financial reporting is a process designed to provide reasonable assurance regarding the reliability of financial reporting and the preparation of consolidated financial statements for external purposes in accordance with GAAP. Our internal control over financial reporting includes those policies and procedures that (i) pertain to the maintenance of records that, in reasonable detail, accurately and fairly reflect the transactions and dispositions of our assets; (ii) provide reasonable assurance that transactions are recorded as necessary to permit preparation of financial statements in accordance with GAAP, and that our receipts and expenditures are being made only in accordance with authorizations of management and our directors, and (iii) provide reasonable assurance regarding prevention or timely detection of unauthorized acquisition, use or disposition of our assets that could have a material effect on the consolidated financial statements. Because of its inherent limitations, internal control over financial reporting may not prevent or detect misstatements. Also, projections of any evaluation of effectiveness to future periods are subject to the risk that controls may become inadequate because of changes in conditions, or that the degree of compliance with the policies or procedures may deteriorate. Accordingly, even effective internal control over financial reporting can only provide reasonable assurance of achieving their control objectives. Under the supervision and with the participation of our management, including our Chief Executive Officer and Chief Financial Officer, an assessment of the effectiveness of our internal control over financial reporting as of December 31, 2023 was conducted. In making this assessment, management used the criteria set forth by the Committee of Sponsoring Organizations of the Treadway Commission (COSO) in Internal Control–Integrated Framework (2013 Framework). Based on our assessment we believe that, as of December 31, 2023, our internal control over financial reporting is effective based on those criteria. (b) Attestation report of the registered public accounting firm. The attestation report of Ernst & Young LLP, our independent registered public accounting firm, on our internal control over financial reporting is set forth in this annual report on page 71 and is incorporated herein by reference. (c) Changes in internal control over financial reporting. During the three months ended December 31, 2023, there were no changes in our internal control over financial reporting (as defined in Rules 13a-15(f) and 15d-15(f) of the Exchange Act) which have materially affected, or are reasonably likely to materially affect, our internal control over financial reporting. ITEM 9B. Other Information None. ITEM 9C. Disclosure Regarding Foreign Jurisdictions that Prevent Inspections Not applicable. 61 PART III ITEM 10. Directors, Executive Officers and Corporate Governance 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 2024 Annual General Meeting of Shareholders. The Board 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 (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. We intend to disclose any amendments to or waivers from our Financial Code of Ethics for Senior Officers by posting such information on our website at www.civeo.com within four business days following the date of the amendment or waiver. Copies of such documents will be sent to shareholders free of charge upon written request to the corporate secretary at the address shown on the cover page of this annual report. ITEM 11. Executive Compensation The information required by Item 11 hereby is incorporated by reference to such information as set forth in the Company's Definitive Proxy Statement for the 2024 Annual General Meeting of Shareholders. ITEM 12. Security Ownership of Certain Beneficial Owners and Management and Related Shareholder Matters The information required by Item 12 hereby is incorporated by reference to such information as set forth in the Company's Definitive Proxy Statement for the 2024 Annual General Meeting of Shareholders. ITEM 13. Certain Relationships and Related Transactions, and Director Independence The information required by Item 13 hereby is incorporated by reference to such information as set forth in the Company's Definitive Proxy Statement for the 2024 Annual General Meeting of Shareholders. ITEM 14. Principal Accounting Fees and Services The information required by Item 14 hereby is incorporated by reference to such information as set forth in the Company's Definitive Proxy Statement for the 2024 Annual General Meeting of Shareholders. 62 PART IV ITEM 15. Exhibits, Financial Statement Schedules (a) Index to Financial Statements, Financial Statement Schedules and Exhibits (1) Financial Statements: Reference is made to the index set forth on page 68 of this Annual Report on Form 10-K. (2) Financial Statement Schedules: No schedules have been included herein because the information required to be submitted has been included in the Consolidated Financial Statements or the Notes thereto, or the required information is inapplicable. (3) Index of Exhibits: See Index of Exhibits, below, for a list of those exhibits filed herewith, which index also includes and identifies management contracts or compensatory plans or arrangements required to be filed as exhibits to this Annual Report on Form 10-K by Item 601 of Regulation S-K. (b) Index of Exhibits Exhibit No. Description 2.1 Share Purchase Agreement, dated November 26, 2017, by and among Civeo Corporation, Noralta Lodge Ltd., Torgerson Family Trust, 2073357 Alberta Ltd., 2073358 Alberta Ltd., 1818939 Alberta Ltd., 2040618 Alberta Ltd., 2040624 Alberta Ltd., 989677 Alberta Ltd. and Lance Torgerson (incorporated herein by reference to Exhibit 10.1 to the Current Report on Form 8-K (File No. 001-36246) filed on November 27, 2017). 2.2 Amending Agreement, dated March 15, 2018, among Civeo Corporation, the Torgerson Family Trust, 989677 Alberta Ltd., 1818939 Alberta Ltd., 2040618 Alberta Ltd., 2040624 Alberta Ltd., 2073357 Alberta Ltd., 2073358 Alberta Ltd., Lance Torgerson and Noralta Lodge Ltd. (incorporated herein by reference to Exhibit 10.1 to the Current Report on Form 8-K (File No. 001-36246) filed on March 16, 2018). 3.1 Notice of Articles of Civeo Corporation, as amended (incorporated herein by reference to Exhibit 3.1 to the Current Report on Form 8-K (File No. 001-36246) filed on April 2, 2018). 3.2 Certification of Amendment to the Notice of Articles of Civeo Corporation (incorporated herein by reference to Exhibit 3.1 to the Current Report on Form 8-K (File No. 001-36246) filed on November 20, 2020. 3.3 Amended and Restated Articles of Civeo Corporation (incorporated herein by reference to Exhibit 3.3 to the Annual Report on Form 10-K (File No. 001-36246) filed on March 1, 2023) . 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. 001-36246) filed on July 17, 2015). 4.2 Registration Rights, Lock-Up and Standstill Agreement, dated April 2, 2018, by and among Civeo Corporation, Torgerson Family Trust and 989677 Alberta Ltd. (incorporated herein by reference to Exhibit 4.1 to the Current Report on Form 8-K (File No. 001-36246) filed on April 2, 2018). 4.3 Description of Securities (incorporated herein by reference to Exhibit 4.3 to the Annual Report on Form 10-K (File No. 001-36246) filed on February 26, 2021). 10.1† Form of Indemnification Agreement (incorporated herein by reference to Exhibit 10.1 to the Current Report on Form 8-K12B (File No. 001-36246) filed on July 17, 2015). 10.2† Amended and Restated 2014 Equity Participation Plan of Civeo Corporation, as amended by Amendment No. 1, Amendment No. 2, Amendment No. 3 and Amendment No. 4 (incorporated by reference to Appendix B to Civeo Corporation's Schedule 14A filed on March 31, 2023). 63 10.3† Performance Share Award Program under the 2014 Equity Participation Plan (incorporated herein by reference to Exhibit 10.3 to the Annual Report on Form 10-K (File No. 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. 001-36246) filed on February 26, 2021). 10.5† Form of Civeo Corporation Annual Incentive Compensation Plan (incorporated herein by reference to Exhibit 10.7 to the Registration Statement on Form 10 (File No. 001-36246) filed on April 22, 2014). 10.6† Form of Canadian Long-Term Incentive Plan (incorporated herein by reference to Exhibit 10.8 to the Registration Statement on Form 10 (File No. 001-36246) filed on April 22, 2014). 10.7† Form of Employee Non-Qualified Stock Option Agreement under the 2014 Equity Participation Plan of Civeo Corporation (incorporated herein by reference to Exhibit 10.9 to the Registration Statement on Form 10 (File No. 001-36246) filed on April 22, 2014). 10.8† Form of Restricted Stock Agreement under the 2014 Equity Participation Plan of Civeo Corporation (incorporated herein by reference to Exhibit 10.10 to the Registration Statement on Form 10 (File No. 001-36246) filed on April 22, 2014). 10.9† Form of Non-Employee Director Restricted Stock Agreement (incorporated herein by reference to Exhibit 10.11 to the Registration Statement on Form 10 (File No. 001-36246) filed on April 22, 2014). 10.10† Form of Deferred Stock Agreement (Australia) (incorporated herein by reference to Exhibit 10.12 to the Registration Statement on Form 10 (File No. 001-36246) filed on April 22, 2014). 10.11† Form of Deferred Stock Agreement (Canada) (incorporated herein by reference to Exhibit 10.13 to the Registration Statement on Form 10 (File No. 001-36246) filed on April 22, 2014). 10.12† Form of Executive Agreement of Bradley J. Dodson (incorporated herein by reference to Exhibit 10.14 to the Registration Statement on Form 10 (File No. 001-36246) filed on April 22, 2014). 10.13† Form of Phantom Unit Agreement under the 2014 Equity Participation Plan of Civeo Corporation (incorporated herein by reference to Exhibit 10.17 to the Annual Report on Form 10-K (File No. 001-36246) filed on March 13, 2015). 10.14† Executive Services Agreement, dated May 30, 2012, between Peter McCann and The Mac Services Group Pty Ltd. (incorporated herein by reference to Exhibit 10.3 to the Current Report on Form 8-K12B (File No. 001-36246) filed on July 17, 2015). 10.15† Executive Agreement between Civeo Corporation and Peter McCann, dated August 17, 2015 (incorporated herein by reference to Exhibit 10.1 to the Current Report on Form 8-K (File No. 001-36246) filed on August 27, 2015). 10.16† Variation to Executive Services Agreement dated May 30, 2012 between Peter McCann and Civeo Pty Ltd. ( incorporated herein by reference to Exhibit 10.18 to the Annual Report on Form 10-K (File No. 001-36246) filed on February 26, 2021). 10.17† Variation to Executive Services Agreement between Civeo Pty Ltd and Peter McCann, dated August 17, 2015 (incorporated herein by reference to Exhibit 10.2 to the Current Report on Form 8-K (File No. 001-36246) filed on August 27, 2015). 10.18† Executive Change of Control Severance Agreement between Civeo Corporation and Allan Schoening, dated July 13, 2015 (incorporated herein by reference to Exhibit 10.11 to the Quarterly Report on Form 10-Q (File No. 001-36246) filed on November 3, 2015). 64 10.19† First Amendment to Executive Change of Control Severance Agreement between Civeo Corporation and Allan Schoening, effective as of July 20, 2020 (incorporated herein by reference to Exhibit 10.2 to the Quarterly Report on Form 10-Q (File No. 001-36246) filed on October 28, 2020). 10.20† Executive Agreement between Civeo Corporation and Allan Schoening, dated December 15, 2014 (incorporated herein by reference to Exhibit 10.12 to the Quarterly Report on Form 10-Q (File No. 001-36246) filed on November 3, 2015. 10.21† Executive Change of Control Severance Agreement between Civeo Corporation and Carolyn Stone, dated May 10, 2015 ( incorporated herein by reference to Exhibit 10.25 to the Annual Report on Form 10-K (File No. 001-36246) filed on February 26, 2021). 10.22 Syndicated Facility Agreement, dated as of September 8, 2021, by and among Civeo Corporation, Civeo Pty Limited and Civeo Management LLC, as Borrowers, the Lenders named therein, Royal Bank of Canada, as Administrative Agent, U.S. Collateral Agent, Canadian Administrative Agent, Canadian Collateral Agent and an Issuing Bank and RBC Europe Limited, as Australian Administrative Agent, Australian Collateral Agent and an Issuing Bank (incorporated herein by reference to Exhibit 10.1 to the Current Report on Form 8-K (File No. 001-36246) filed on September 8, 2021). 10.23† First Amendment to Syndicated Facility Agreement, dated as of March 31, 2023, among Civeo Corporation, Civeo Management LLC and Civeo Pty Limited, as Borrowers, certain subsidiary guarantors of the Borrowers party thereto, the Lenders party thereto, the Issuing Banks, the Swing Line Lenders, Royal Bank of Canada, as administrative agent for the U.S. Lenders, U.S. collateral agent, administrative agent for the Canadian Lenders and Canadian collateral agent and RBC Europe Limited, as administrative agent for the Australian Lenders and Australian collateral agent (incorporated herein by reference to Exhibit 10.1 to the Quarterly Report on Form 10-K (File No. 001-36246) filed on April 28, 2023 ) . 10.24† Form of Director Deferred Share Agreement (United States) (incorporated herein by reference to Exhibit 10.31 to the Annual Report on Form 10-K for the year ended December 31, 2018 (File No. 001-36246). 10.25† 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. 001-36246). 10.26† Amendment to Executive Change of Control Severance Agreement between Civeo Corporation and Carolyn Stone, dated April 4, 2022 (incorporated herein by reference to Exhibit 10.25 to the Annual Report on Form 10-K (File No. 001-36246) filed on March 1, 2023) . 10.27† 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). 10.28† Amendment to Retention Commitment Agreement, dated as of October 5, 2023, between Civeo Corporation and Allan D. Schoening (incorporated herein by reference to Exhibit 10.1 to the Current Report on Form 8-K (File No. 001-36246) filed on October 1 1 , 202 3 ). 21.1* List of Significant Subsidiaries of Civeo Corporation . 23.1* Consent of Ernst & Young LLP. 31.1* Certification of Chief Executive Officer of Civeo Corporation pursuant to Rules 13a-14(a) or 15d-14(a) under the Securities Exchange Act of 1934. 31.2* Certification of Chief Financial Officer of Civeo Corporation pursuant to Rules 13a-14(a) or 15d-14(a) under the Securities Exchange Act of 1934. 32.1** Certification of Chief Executive Officer of Civeo Corporation pursuant to Rules 13a-14(b) or 15d-14(b) under the Securities Exchange Act of 1934 and 18 U.S.C. Section 1350. 32.2** Certification of Chief Financial Officer of Civeo Corporation pursuant to Rules 13a-14(b) or 15d-14(b) under the Securities Exchange Act of 1934 and 18 U.S.C. Section 1350. 97.1* C o mpensation Recoupment ( Clawback ) Policy. 101.INS* Inline XBRL Instance Document 101.SCH* Inline XBRL Taxonomy Extension Schema Document 101.CAL* Inline XBRL Taxonomy Extension Calculation Linkbase Document 101.DEF* Inline XBRL Taxonomy Extension Definition Linkbase Document 65 101.LAB* Inline XBRL Taxonomy Extension Label Linkbase Document 101.PRE* Inline XBRL Taxonomy Extension Presentation Linkbase Document 104 Cover Page Interactive Data File (formatted as Inline XBRL and contained in Exhibit 101) * Filed herewith. † Management contracts and compensatory plans and arrangements. ** Furnished herewith. NOTE: Pursuant to the rules and regulations of the Securities and Exchange Commission, we have filed or incorporated by reference the agreements referenced above as exhibits to this Annual Report on Form 10-K. The agreements have been filed to provide investors with information regarding their respective terms. The agreements are not intended to provide any other factual information about Civeo or its business or operations. In particular, the assertions embodied in any representations, warranties and covenants contained in the agreements may be subject to qualifications with respect to knowledge and materiality different from those applicable to investors and may be qualified by information in confidential disclosure schedules not included with the exhibits. These disclosure schedules may contain information that modifies, qualifies and creates exceptions to the representations, warranties and covenants set forth in the agreements. Moreover, certain representations, warranties and covenants in the agreements may have been used for the purpose of allocating risk between the parties, rather than establishing matters as facts. In addition, information concerning the subject matter of the representations, warranties and covenants may have changed after the date of the respective agreement, which subsequent information may or may not be fully reflected in our public disclosures. Accordingly, investors should not rely on the representations, warranties and covenants in the agreements as characterizations of the actual state of facts about Civeo or its business or operations on the date hereof. ITEM 16. Form 10-K Summary None. 66 SIGNATURES Pursuant to the requirements of Section 13 or 15 (d) of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned, thereunto duly authorized on February 29, 2024. CIVEO CORPORATION By /s/ CAROLYN J. STONE Carolyn J. Stone Senior Vice President, Chief Financial Officer and Treasurer (Duly Authorized Officer and Principal Financial Officer) Signature Title /s/ RICHARD A. NAVARRE Chair of the Board Richard A. Navarre /s/ BRADLEY J. DODSON Director, President and Chief Executive Officer Bradley J. Dodson (Principal Executive Officer) /s/ CAROLYN J. STONE Senior Vice President, Chief Financial Officer and Treasurer Carolyn J. Stone (Principal Financial Officer and Accounting Officer) /s/ C. RONALD BLANKENSHIP Director C. Ronald Blankenship /s/ JAY K. GREWAL Director Jay K. Grewal /s/ MARTIN A. LAMBERT Director Martin A. Lambert /s/ MICHAEL MONTELONGO Director Michael Montelongo /s/ CONSTANCE B. MOORE Director Constance B. Moore /s/ CHARLES SZALKOWSKI Director Charles Szalkowski /s/ TIMOTHY O. WALL Director Timothy O. Wall 67 CIVEO CORPORATION INDEX TO CONSOLIDATED FINANCIAL STATEMENTS Page No. Report of Independent Registered Public Accounting Firm on Consolidated Financial Statements (PCAOB ID: 42 ) 69 Report of Independent Registered Public Accounting Firm on Internal Control Over Financial Reporting 71 Consolidated Statements of Operations for the Years Ended December 31, 20 23, 2022 and 2021 72 Consolidated Statements of Comprehensive Loss for the Years Ended December 31, 2 023, 2022 and 2021 73 Consolidated Balance Sheets at December 31, 20 23 and 2022 74 Consolidated Statements of Changes in Shareholders’ Equity for the Years Ended December 31, 20 23, 2022 and 2021 75 Consolidated Statements of Cash Flows for the Years Ended December 31, 20 23, 2022 and 2021 76 Notes to Consolidated Financial Statements 77 68 Report of Independent Registered Pub l ic A ccounting Firm To the Shareholders and the Board of Directors of Civeo Corporation Opinion on the Financial Statements We have audited the accompanying consolidated balance sheets of Civeo Corporation (“the Company”) as of December 31, 2023 and 2022, and the related consolidated statements of operations, comprehensive income (loss), changes in shareholders' equity and cash flows for each of the three years in the period ended December 31, 2023, and the related notes (collectively referred to as the “consolidated financial statements”). In our opinion, the consolidated financial statements present fairly, in all material respects, the financial position of the Company at December 31, 2023 and 2022, and the results of its operations and its cash flows for each of the three years in the period ended December 31, 2023, in conformity with U.S. generally accepted accounting principles. We also have audited, in accordance with the standards of the Public Company Accounting Oversight Board (United States) (PCAOB), the Company's internal control over financial reporting as of December 31, 2023, based on criteria established in Internal Control-Integrated Framework issued by the Committee of Sponsoring Organizations of the Treadway Commission (2013 framework), and our report dated February 29, 2024 expressed an unqualified opinion thereon. Basis for Opinion These financial statements are the responsibility of the Company's management. Our responsibility is to express an opinion on the Company’s financial statements based on our audits. We are a public accounting firm registered with the PCAOB and are required to be independent with respect to the Company in accordance with the U.S. federal securities laws and the applicable rules and regulations of the Securities and Exchange Commission and the PCAOB. We conducted our audits in accordance with the standards of the PCAOB. Those standards require that we plan and perform the audit to obtain reasonable assurance about whether the financial statements are free of material misstatement, whether due to error or fraud. Our audits included performing procedures to assess the risks of material misstatement of the financial statements, whether due to error or fraud, and performing procedures that respond to those risks. Such procedures included examining, on a test basis, evidence regarding the amounts and disclosures in the financial statements. Our audits also included evaluating the accounting principles used and significant estimates made by management, as well as evaluating the overall presentation of the financial statements. We believe that our audits provide a reasonable basis for our opinion. Critical Audit Matter The critical audit matter communicated below is a matter arising from the current period audit of the financial statements that was communicated or required to be communicated to the audit committee and that: (1) relates to accounts or disclosures that are material to the financial statements and (2) involved our especially challenging, subjective or complex judgments. The communication of the critical audit matter does not alter in any way our opinion on the consolidated financial statements, taken as a whole, and we are not, by communicating the critical audit matter below, providing a separate opinion on the critical audit matter or on the accounts or disclosures to which it relates. 69 Realizability of Deferred Tax Assets Description of the Matter As more fully described in Note 2 and Note 14 to the consolidated financial statements, at December 31, 2023, the Company had deferred tax assets related to deductible temporary differences and net loss carryforwards of $46.2 million, net of a $78.8 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. Auditing management’s assessment of the realizability of its deferred tax assets was complex and involved subjectivity because the assessment process includes scheduling the use of the applicable deferred tax assets, which includes management’s judgments related to the forecasted turns of both deferred tax assets and deferred tax liabilities. How We Addressed the Matter in Our Audit We obtained an understanding, evaluated the design, and tested the operating effectiveness of controls over the Company's process to assess the realizability of its deferred tax assets. For example, we tested controls over management's scheduling of the future reversal of existing taxable temporary differences. To test the Company’s assessment of the realizability of its deferred tax assets, our audit procedures included, among others, testing the completeness and accuracy of the Company’s scheduling of the reversal of existing temporary taxable differences. With the assistance of our tax specialists, we verified the appropriateness of the projected usage of tax attributes and assessed the reasonableness of the timing of the reversal of the deferred tax liabilities into taxable income. /s/ Ernst & Young LLP We have served as the Company’s auditor since 2013. Houston, Texas February 29, 2024 70 Report of Independent Registered Public Accounting Firm To the Shareholders and the Board of Directors of Civeo Corporation Opinion on Internal Control over Financial Reporting We have audited Civeo Corporation’s internal control over financial reporting as of December 31, 2023, based on criteria established in Internal Control-Integrated Framework issued by the Committee of Sponsoring Organizations of the Treadway Commission (2013 framework) (the COSO criteria). In our opinion, Civeo Corporation (“the Company”) maintained, in all material respects, effective internal control over financial reporting as of December 31, 2023, based on the COSO criteria. We also have audited, in accordance with the standards of the Public Company Accounting Oversight Board (United States) (PCAOB), the consolidated balance sheets of the Company as of December 31, 2023 and 2022, and the related consolidated statements of operations, comprehensive income (loss), changes in shareholders' equity and cash flows for each of the three years in the period ended December 31, 2023, and the related notes and our report dated February 29, 2024 expressed an unqualified opinion thereon. Basis for Opinion The Company’s management is responsible for maintaining effective internal control over financial reporting and for its assessment of the effectiveness of internal control over financial reporting included in the accompanying Management’s annual report on internal control over financial reporting. Our responsibility is to express an opinion on the Company’s internal control over financial reporting based on our audit. We are a public accounting firm registered with the PCAOB and are required to be independent with respect to the Company in accordance with the U.S. federal securities laws and the applicable rules and regulations of the Securities and Exchange Commission and the PCAOB. We conducted our audit in accordance with the standards of the PCAOB. Those standards require that we plan and perform the audit to obtain reasonable assurance about whether effective internal control over financial reporting was maintained in all material respects. Our audit included obtaining an understanding of internal control over financial reporting, assessing the risk that a material weakness exists, testing and evaluating the design and operating effectiveness of internal control based on the assessed risk, and performing such other procedures as we considered necessary in the circumstances. We believe that our audit provides a reasonable basis for our opinion. Definition and Limitations of Internal Control Over Financial Reporting A company’s internal control over financial reporting is a process designed to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles. A company’s internal control over financial reporting includes those policies and procedures that (1) pertain to the maintenance of records that, in reasonable detail, accurately and fairly reflect the transactions and dispositions of the assets of the company; (2) provide reasonable assurance that transactions are recorded as necessary to permit preparation of financial statements in accordance with generally accepted accounting principles, and that receipts and expenditures of the company are being made only in accordance with authorizations of management and directors of the company; and (3) provide reasonable assurance regarding prevention or timely detection of unauthorized acquisition, use, or disposition of the company’s assets that could have a material effect on the financial statements. Because of its inherent limitations, internal control over financial reporting may not prevent or detect misstatements. Also, projections of any evaluation of effectiveness to future periods are subject to the risk that controls may become inadequate because of changes in conditions, or that the degree of compliance with the policies or procedures may deteriorate. /s/ Ernst & Young LLP Houston, Texas February 29, 2024 71 CIVEO CORPORATION CONSOLIDATED STATEMENTS OF OPERATIONS (In Thousands, Except Per Share Amounts) YEAR ENDED DECEMBER 31, 2023 2022 2021 Revenues: Service and other $ 699,006 $ 676,001 $ 575,186 Rental 737 18,316 16,033 Product 1,062 2,735 3,244 700,805 697,052 594,463 Costs and expenses: Service and other costs 529,741 500,513 420,579 Rental costs 176 14,975 13,960 Product costs 370 1,575 1,923 Selling, general and administrative expenses 72,605 69,962 60,600 Depreciation and amortization expense 75,142 87,214 83,101 Impairment expense 1,395 5,721 7,935 Gain on sale of McClelland Lake Lodge assets, net ( 18,590 ) — — Other operating expense 479 74 313 661,318 680,034 588,411 Operating income 39,487 17,018 6,052 Interest expense ( 13,177 ) ( 11,474 ) ( 12,964 ) Loss on extinguishment of debt — — ( 416 ) Interest income 172 39 2 Other income 13,881 5,149 13,199 Income before income taxes 40,363 10,732 5,873 Income tax expense ( 10,633 ) ( 4,402 ) ( 3,376 ) Net income 29,730 6,330 2,497 Less: Net income (loss) attributable to noncontrolling interest ( 427 ) 2,333 1,147 Net income attributable to Civeo Corporation 30,157 3,997 1,350 Less: Dividends attributable to Class A preferred shares — 1,771 1,925 Net income (loss) attributable to Civeo common shareholders $ 30,157 $ 2,226 $ ( 575 ) Per Share Data (see Note 6) Basic net income (loss) per share attributable to Civeo Corporation common shareholders $ 2.02 $ ( 0.21 ) $ ( 0.04 ) Diluted net income (loss) per share attributable to Civeo Corporation common shareholders $ 2.01 $ ( 0.21 ) $ ( 0.04 ) Weighted average number of common shares outstanding: Basic 14,906 14,002 14,232 Diluted 15,013 14,002 14,232 The accompanying notes are an integral part of these financial statements. 72 CIVEO CORPORATION CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME (LOSS) (In Thousands) YEAR ENDED DECEMBER 31, 2023 2022 2021 Net income $ 29,730 $ 6,330 $ 2,497 Other comprehensive income (loss), net of taxes: Foreign currency translation adjustment, net of zero taxes 4,532 ( 23,486 ) ( 12,936 ) Total other comprehensive income (loss), net of taxes 4,532 ( 23,486 ) ( 12,936 ) Comprehensive income (loss) 34,262 ( 17,156 ) ( 10,439 ) Less: Comprehensive income (loss) attributable to noncontrolling interest ( 367 ) 2,151 1,105 Comprehensive income (loss) attributable to Civeo Corporation $ 34,629 $ ( 19,307 ) $ ( 11,544 ) The accompanying notes are an integral part of these financial statements. 73 CIVEO CORPORATION CONSOLIDATED BALANCE SHEETS (In Thousands) DECEMBER 31, 2023 2022 ASSETS Current assets: Cash and cash equivalents $ 3,323 $ 7,954 Accounts receivable, net 143,222 119,755 Inventories 6,982 6,907 Prepaid expenses 8,439 7,199 Other current assets 7,407 3,081 Assets held for sale 5,873 8,653 Total current assets 175,246 153,549 Property, plant and equipment, net 270,563 301,890 Goodwill 7,690 7,672 Other intangible assets, net 77,999 81,747 Operating lease right-of-use assets 12,286 15,722 Other noncurrent assets 4,278 5,604 Total assets $ 548,062 $ 566,184 LIABILITIES AND SHAREHOLDERS’ EQUITY Current liabilities: Accounts payable $ 58,699 $ 51,087 Accrued liabilities 40,523 39,211 Income taxes 3,831 178 Current portion of long-term debt — 28,448 Deferred revenue 4,849 991 Other current liabilities 6,334 8,342 Total current liabilities 114,236 128,257 Long-term debt, less current maturities 65,554 102,505 Deferred income taxes 11,803 4,778 Operating lease liabilities 9,264 12,771 Other noncurrent liabilities 24,167 14,172 Total liabilities 225,024 262,483 Commitments and contingencies (Note 15) Shareholders’ equity: Preferred shares (Class A Series 1) — — Common shares ( no par value; 46,000,000 shares authorized, 15,046,756 shares and 15,584,176 shares issued, respectively, and 14,680,081 shares and 15,217,501 shares outstanding, respectively) — — Additional paid-in capital 1,628,972 1,624,512 Accumulated deficit ( 919,023 ) ( 930,123 ) Common shares held in treasury at cost, 366,675 and 366,675 shares, respectively ( 9,063 ) ( 9,063 ) Accumulated other comprehensive loss ( 380,715 ) ( 385,187 ) Total Civeo Corporation shareholders’ equity 320,171 300,139 Noncontrolling interest 2,867 3,562 Total shareholders’ equity 323,038 303,701 Total liabilities and shareholders’ equity $ 548,062 $ 566,184 The accompanying notes are an integral part of these financial statements. 74 CIVEO CORPORATION CONSOLIDATED STATEMENTS OF CHANGES IN SHAREHOLDERS’ EQUITY (In Thousands) Attributable to Civeo Preferred Shares Common Shares Par Value Additional Paid-in Capital Accumulated Deficit Treasury Shares Accumulated Other Comprehensive Income (Loss) Noncontrolling Interest Total Shareholders’ Equity Balance, December 31, 2020 $ 60,016 $ — $ 1,578,315 $ ( 907,727 ) $ ( 6,930 ) $ ( 348,989 ) $ 672 $ 375,357 Net income — — — 1,350 — — 1,147 2,497 Currency translation adjustment — — — — — ( 12,894 ) ( 42 ) ( 12,936 ) Dividends paid — — — — — — ( 165 ) ( 165 ) 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 Balance, December 31, 2021 $ 61,941 $ — $ 1,582,442 $ ( 912,951 ) $ ( 8,050 ) $ ( 361,883 ) $ 1,612 $ 363,111 Net income — — — 3,997 — — 2,333 6,330 Currency translation adjustment — — — — — ( 23,304 ) ( 182 ) ( 23,486 ) Dividends paid — — — ( 65 ) — — ( 201 ) ( 266 ) 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 Balance, December 31, 2022 $ — $ — $ 1,624,512 $ ( 930,123 ) $ ( 9,063 ) $ ( 385,187 ) $ 3,562 $ 303,701 Net income (loss) — — — 30,157 — — ( 427 ) 29,730 Currency translation adjustment — — — — — 4,472 60 4,532 Dividends paid — — — ( 7,423 ) — — ( 328 ) ( 7,751 ) Common shares repurchased — — — ( 11,634 ) — — — ( 11,634 ) Share-based compensation — — 4,460 — — — — 4,460 Balance, December 31, 2023 $ — $ — $ 1,628,972 $ ( 919,023 ) $ ( 9,063 ) $ ( 380,715 ) $ 2,867 $ 323,038 Preferred Shares Common Shares (in thousands) Balance, December 31, 2020 9,042 14,215 Share-based compensation — 113 Shares repurchased — ( 217 ) Balance, December 31, 2021 9,042 14,111 Share-based compensation — 100 Shares repurchased ( 3,617 ) ( 498 ) Preferred shares converted to common shares ( 5,425 ) 1,505 Balance, December 31, 2022 — 15,218 Share-based compensation — 26 Shares repurchased — ( 564 ) Balance, December 31, 2023 — 14,680 The accompanying notes are an integral part of these financial statements. 75 CIVEO CORPORATION CONSOLIDATED STATEMENTS OF CASH FLOWS (In Thousands) YEAR ENDED DECEMBER 31, 2023 2022 2021 Cash flows from operating activities: Net income $ 29,730 $ 6,330 $ 2,497 Adjustments to reconcile net income to net cash provided by operating activities: Depreciation and amortization 75,142 87,214 83,101 Impairment charges 1,395 5,721 7,935 Loss on extinguishment of debt — — 416 Deferred income tax expense 6,806 4,177 3,070 Non-cash compensation charge 4,460 3,787 4,127 Gain on disposals of assets ( 21,196 ) ( 4,917 ) ( 6,188 ) Provision for credit losses, net of recoveries 135 162 141 Other, net 1,660 3,223 2,200 Changes in operating assets and liabilities: Accounts receivable ( 22,311 ) ( 14,447 ) ( 28,131 ) Inventories 5 ( 1,845 ) ( 526 ) Accounts payable and accrued liabilities 7,438 12,323 15,435 Taxes payable 3,576 5 ( 28 ) Other current assets and liabilities, net 9,725 ( 9,960 ) 4,485 Net cash flows provided by operating activities 96,565 91,773 88,534 Cash flows from investing activities: Capital expenditures ( 31,633 ) ( 25,421 ) ( 15,571 ) Proceeds from disposition of property, plant and equipment 16,740 16,286 14,306 Other, net 372 190 559 Net cash flows used in investing activities ( 14,521 ) ( 8,945 ) ( 706 ) Cash flows from financing activities: Revolving credit borrowings 210,584 289,705 397,952 Revolving credit repayments ( 248,430 ) ( 293,079 ) ( 348,795 ) Term loan repayments ( 29,899 ) ( 30,442 ) ( 125,483 ) Dividends paid ( 7,423 ) — — Debt issuance costs — — ( 4,412 ) Repurchases of common shares ( 11,634 ) ( 14,209 ) ( 4,649 ) Repurchases of preferred shares — ( 30,553 ) — Other, net — ( 1,078 ) ( 1,120 ) Net cash flows used in financing activities ( 86,802 ) ( 79,656 ) ( 86,507 ) Effect of exchange rate changes on cash 127 ( 1,500 ) ( 1,194 ) Net change in cash and cash equivalents ( 4,631 ) 1,672 127 Cash and cash equivalents, beginning of period 7,954 6,282 6,155 Cash and cash equivalents, end of period $ 3,323 $ 7,954 $ 6,282 Non-cash investing activities: Capital expenditure additions accrued at end of period 510 511 575 Non-cash financing activities: Preferred dividends paid-in-kind — 1,706 1,925 The accompanying notes are an integral part of these financial statements. 76 1. DESCRIPTION OF BUSINESS AND BASIS OF PRESENTATION Description of the Business We provide a suite of hospitality services for our guests in the natural resources industry, 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 manage 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. We primarily operate in some of the world’s most active oil, metallurgical (met) coal, liquefied natural gas (LNG) and iron ore producing regions, and our customers include major and independent oil companies, mining companies, engineering companies and oilfield and mining service companies. We operate in two principal reportable business segments – Canada and Australia. Basis of Presentation Unless otherwise stated or the context otherwise indicates: (i) all references in these consolidated financial statements to “Civeo,” “us,” “our” or “we” refer to Civeo Corporation and its consolidated subsidiaries; and (ii) all references in this report to “dollars” or “$” are to U.S. dollars. 2. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES Cash We consider all highly liquid investments purchased with an original maturity of three months or less to be cash equivalents. Allowance for Credit Losses We are exposed to credit losses primarily through the sale of our products and services. We maintain allowances for credit losses for estimated losses resulting from the inability of our customers to make required payments. If a trade receivable is deemed to be uncollectible, such receivable is charged-off against the allowance for credit losses account. Our expected loss allowance methodology for accounts receivable is developed using historical collection experience, current and future economic and market conditions and a review of the current status of customers' trade receivables. Due to the short-term nature of such receivables, the estimate of the amount of accounts receivable that may not be collected is based on an aging of the accounts receivable balances and the financial condition of customers. Additionally, specific allowance amounts are established to record the appropriate provision for customers that have a higher probability of default. If we have no previous experience with the customer, we typically obtain reports from various credit organizations to ensure that the customer has a history of paying its creditors. We may also request financial information, including combined financial statements or other documents, to ensure that the customer has the means of making payment. If these factors do not indicate collection is reasonably assured, we generally would require a prepayment or other arrangement to support revenue recognition and recording of a trade receivable. If the financial condition of our customers were to deteriorate, adversely affecting their ability to make payments, additional allowances would be required. Inventories Inventories consist of raw materials and supplies and materials for the operation of remote accommodation facilities. Inventories also include food, raw materials, labor, subcontractor charges and catering and other supplies needed for operation of our facilities. Inventories are carried at the lower of cost or net realizable value. The cost of inventories is determined on an average cost or specific-identification method. Property, Plant and Equipment Property, plant and equipment are stated at cost or at estimated fair market value at acquisition date if acquired in a business combination, and depreciation is computed, for assets owned or recorded under capital lease, using the straight-line method, after allowing for salvage value where applicable, over the estimated useful lives of the assets. Leasehold improvements are capitalized and amortized over the lesser of the life of the lease or the estimated useful life of the asset. 77 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). When the liability is initially recorded, we capitalize the associated asset retirement cost by increasing the carrying amount of the related property, plant and equipment. See Asset Retirement Obligations below for further discussion. Expenditures for repairs and maintenance are charged to expense when incurred. Expenditures for major renewals and betterments, which extend the useful lives of existing equipment, are capitalized and depreciated. Upon retirement or disposition of property and equipment, the cost and related accumulated depreciation are removed from the accounts and any resulting gain or loss is recognized in the consolidated statements of operations. Business Combinations We evaluate acquisitions of assets and other similar transactions to assess whether or not the transaction should be accounted for as a business combination by assessing whether or not we have acquired inputs and processes that have the ability to create outputs. If determined to be a business combination, we account for a business acquisition under the acquisition method of accounting. The accounting rules governing business combinations require the acquiring entity in a business combination to recognize the fair value of all assets acquired and liabilities assumed and establish the acquisition date as the fair value measurement point. Accordingly, we recognize assets acquired and liabilities assumed in a business combination based on the fair value estimates as of the date of acquisition. Goodwill is measured as the excess of the fair value of the consideration paid over the fair value of the identified net assets, including intangible assets, acquired. The fair value measurement of the identified net assets requires the significant use of estimates and is based on information that was available to management at the time the purchase price allocation was prepared. We utilize recognized valuation techniques, including the cost approach, the market approach and the income approach, to value the net assets acquired. The impact of changes to the estimated fair values of assets acquired and liabilities assumed is recorded in the reporting period in which the adjustment is identified. Final valuations of assets and liabilities are obtained and recorded within one year from the date of the acquisition. Impairment of Long-Lived Assets The recoverability of the carrying values of long-lived assets, including amortizable intangible assets, is assessed whenever, in management’s judgment, events or changes in circumstances indicate that the carrying value of such asset groups may not be recoverable based on estimated future cash flows. If this assessment indicates that the carrying values will not be recoverable, as determined based on undiscounted cash flows over the remaining useful lives, an impairment loss is recognized. The impairment loss equals the excess of the carrying value over the fair value of the asset group. In performing this analysis, asset groups are reviewed at the lowest level for which identifiable cash flows are largely independent of the cash flows of other assets and liabilities. 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. The estimates are consistent with those used for purposes of our goodwill impairment test, as further discussed in Goodwill and Other Intangible Assets, below. Based on the assessment, if the carrying values of certain of our asset groups are determined to not be recoverable, we proceed to the next step. 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 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. See Note 4 – Impairment Charges for a discussion of impairment charges we recognized in 2023, 2022 and 2021 related to our long-lived assets. Goodwill and Other Intangible Assets Goodwill. Goodwill represents the excess of the purchase price paid for acquired businesses over the allocated fair value of the related net assets after impairments, if applicable. All of our goodwill as of December 31, 2023 was included in our Australia reporting unit. 78 We evaluate goodwill for impairment, at the reporting unit level, annually and when an event occurs or circumstances change to suggest that the carrying amount may not be recoverable. A reporting unit is the operating segment, or a business one level below that operating segment (the “component” level) if discrete financial information is prepared and regularly reviewed by management at the component level. Each segment of our business represents a separate reporting unit. We conduct our annual impairment test as of November 30 of each year. We compare each reporting unit’s carrying amount, including goodwill, to the fair value of the reporting unit. If the carrying amount of the reporting unit exceeds its fair value, goodwill is impaired. We are given the option to test for impairment of our goodwill by first performing a qualitative assessment to determine whether it is more likely than not (that is, likelihood of more than 50 percent) that the fair value of a reporting unit is less than its carrying amount, including goodwill. If it is determined that it is more likely than not that the fair value of a reporting unit is greater than its carrying amount, then performing the currently prescribed quantitative impairment test is unnecessary. In developing a qualitative assessment to meet the “more-likely-than-not” threshold, each reporting unit with goodwill is assessed separately and different relevant events and circumstances are evaluated for each unit. We have the option to bypass the qualitative assessment for any reporting unit in any period and proceed directly to performing the quantitative goodwill impairment test. When performing our annual assessment on November 30, 2023, 2022 and 2021, we performed a qualitative assessment related to goodwill at our Australia reporting unit. Qualitative factors that we considered as part of our assessment included industry and market conditions, macroeconomic conditions and the financial performance of our Australian business. We also noted that, based on the interim quantitative testing performed as of March 31, 2020, the estimated fair value of the Australia reporting unit exceeded its carrying value by more than 125 %. After assessing these events and circumstances, we determined that, as of November 30, 2023, it was more likely than not that the fair value of the Australia reporting unit was greater than its carrying value. In performing the quantitative goodwill impairment test, we compare each reporting unit’s carrying amount, including goodwill, to the fair value of the reporting unit. Because none of our reporting units has a publicly quoted market price, we must determine the value that willing buyers and sellers would place on the reporting unit through a routine sale process (a Level 3 fair value measurement). 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 relative weighting of each approach reflects current industry and market conditions. Market Approach - This valuation approach utilizes publicly traded comparable companies’ enterprise values, as compared to their recent and forecasted earnings before interest, taxes and depreciation (EBITDA) information. We use EBITDA because it is a widely used key indicator of the cash generating capacity of companies in our industry. Income Approach - This valuation approach derives a present value of the reporting unit’s projected future annual cash flows over the next five years with a terminal value assumption. 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. These assumptions can vary by each reporting unit depending on market conditions. In addition, a terminal value is estimated, using a Gordon Growth methodology. We discount our projected cash flows using a long-term weighted average cost of capital based on our estimate of investment returns that would be required by a market participant. The fair value of our reporting units is affected by future oil, coal and natural gas prices, anticipated spending by our customers, and the cost of capital. Our estimate of 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 reporting units’ operations in the future. We selected these valuation approaches because we believe the combination of these approaches and our best judgment regarding underlying assumptions and estimates provides us with the best estimate of fair value for each of our reporting units. We believe these valuation approaches are proven valuation techniques and methodologies for our industry and widely accepted by investors. The fair value of each reporting unit would change if our assumptions under these valuation approaches, or relative weighting of the valuation approaches, were materially modified. 79 Other Intangible Assets. We amortize the cost of other intangible assets using the straight-line method over their estimated useful lives unless such lives are deemed indefinite. For intangible assets that we amortize, we review the useful life of the intangible asset and evaluate each reporting period whether events and circumstances warrant a revision to the remaining useful life. See Note 9 – Goodwill and Other Intangible Assets for further information. Foreign Currency and Other Comprehensive Income Gains and losses resulting from consolidated balance sheet translation of foreign operations where a foreign currency is the functional currency are included as a separate component of accumulated other comprehensive income within shareholders’ equity and represent substantially all of the balances within accumulated other comprehensive income. Remeasurements of intercompany loans denominated in a different currency than the functional currency of the entity that are of a long-term investment nature are recognized as other comprehensive income within shareholders’ equity. Gains and losses resulting from consolidated balance sheet remeasurements of assets and liabilities denominated in a different currency than the functional currency, other than intercompany loans that are of a long-term investment nature, are included in the consolidated statements of operations as incurred. For the years ended December 31, 2023, 2022, and 2021, we recognized approximately $ 0.5 million, $ 0.1 million and $ 0.3 million in foreign currency losses, respectively. Foreign Currency Exchange Rate Risk A significant portion of revenues, earnings and net investments in foreign affiliates are exposed to changes in foreign currency exchange rates. We seek to manage our foreign exchange risk in part through operational means, including managing expected local currency revenues in relation to local currency costs and local currency assets in relation to local currency liabilities. We have not entered into any foreign currency forward contracts. Revenue and Cost Recognition 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. We transfer control and recognize a sale based on a periodic (usually daily) room rate each night a customer stays in our rooms or when the services are rendered. In some contracts, rates may vary over the contract term. In these cases, revenue may be deferred and recognized on a straight-line basis over the contract term. 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. At contract inception, we assess the goods and services promised in our contracts with customers and identify a performance obligation for each promise to transfer our customers a good or service (or bundle of goods or services) that is distinct. Our customers typically contract for hospitality services under take-or-pay contracts with terms that range from several months to multiple years. Our contract terms generally provide for a rental rate for a reserved room and an occupied room rate that compensates us for services provided. We typically contract our facilities to our customers on a fee per day basis where the goods and services promised include lodging and meals. 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. Revenues exclude taxes assessed based on revenues such as sales or value added taxes. Cost of services includes labor, food, utility costs, cleaning supplies and other costs of operating our accommodations facilities. Cost of goods sold includes all direct material and labor costs and those costs related to contract performance, such as indirect labor, supplies, tools and repairs. Selling, general and administrative costs are charged to expense as incurred. Income Taxes Our operations are subject to Canadian federal and provincial income taxes, as well as foreign income taxes. We determine the provision for income taxes using the asset and liability approach. Under this approach, deferred income taxes represent the expected future tax consequences of temporary differences between the carrying amounts and tax bases of assets and liabilities. 80 Valuation allowances are established when necessary to reduce deferred tax assets to the amounts expected to be realized. In assessing the need for a valuation allowance, we look to the future reversal of existing taxable temporary differences, taxable income in carryback years, the feasibility of tax planning strategies and estimated future taxable income. The valuation allowance can be affected by changes to tax laws, changes to statutory tax rates and changes to future taxable income estimates and historical losses. We recognize tax benefits from uncertain tax positions only if it is more likely than not that the tax position will be sustained on examination by the taxing authorities, based on the technical merits of the position. The tax benefits recognized in the consolidated financial statements from such positions are measured based on the largest benefit that has a greater than 50% likelihood of being realized upon ultimate settlement. See Note 14 – Income Taxes for further information. Receivables and Concentration of Credit Risk Based on the nature of our customer base, we do not believe that we have any significant concentrations of credit risk other than our concentration in the Canadian oil sands and Australian mining industries. We evaluate the credit-worthiness of our significant, new and existing customers’ financial condition and, generally, we do not require collateral from our customers. For the year ended December 31, 2023, each of Suncor Energy and Fortescue Metals Group Ltd. accounted for more than 10 % of our revenues. 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. Asset Retirement Obligations We have AROs that we are required to perform under law or contract once an asset is permanently taken out of service. We initially record the liability at fair value, 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 ARO when it is incurred (typically when the asset is installed). When the liability is initially recorded, we capitalize the associated asset retirement cost by increasing the carrying amount of the related property, plant and equipment. Over time, the liability increases for the change in its present value, while the capitalized cost depreciates over the useful life of the related asset. Accretion expense is recognized over the estimated productive life of the related assets. If the fair value of the estimated ARO changes, an adjustment is recorded to both the ARO and the capitalized asset retirement cost. Revisions in estimated liabilities can result from changes in estimated inflation rates, changes in service and equipment costs and changes in the estimated timing of settling the ARO. We utilize current retirement costs to estimate the expected cash outflows for retirement obligations. We estimate the ultimate productive life of the properties and a risk-adjusted discount rate in order to determine the current present value of the obligation. We relieve ARO liabilities when the related obligations are settled. Most of these obligations are not expected to be paid until many years in the future and will be funded from general company resources at the time of removal. See Note 12 – Asset Retirement Obligations for further discussion. Share-Based Compensation We sponsor an equity participation plan in which certain of our key employees and non-employee directors participate. We measure the cost of service-based equity awards (typically restricted share awards and deferred share awards) based on the grant-date fair value of the award. The grant-date fair value is calculated based on our share price on the grant-date. The resulting cost is recognized over the period during which an employee or non-employee director is required to provide service in exchange for the awards, usually the vesting period. We also grant performance share awards. For awards granted in 2023 and 2022, awards are earned in amounts between 0 % and 200 % of the participant’s target performance share award, based on (i) the payout percentage associated with Civeo’s relative total shareholder return (TSR) rank among a peer group of other companies and (ii) 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 (i) the payout percentage associated with Civeo’s relative TSR rank among a peer group of other companies and (ii) 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 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 of such performance conditions. The resulting costs for each portion of the award are recognized over the period during which an employee is required to provide service in exchange for the awards, usually the vesting period. 81 Additionally, we grant phantom share units. All of the awards vest in equal annual installments and are accounted for as a liability based on the fair value of our share price. Participants granted phantom share units are entitled to a lump sum cash payment equal to the fair market value of a common share on the vesting date. The resulting cost is recognized over the period during which an employee is required to provide service in exchange for the awards, usually the vesting period. Guarantees Substantially all of our Canadian and United States (U.S.) subsidiaries are guarantors under our Credit Agreement. 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, 2023, the maximum potential amount of future payments that we could be required to make under these guarantee agreements (including letters of credit) was approximately $ 1.9 million. We have not recorded any liability in connection with these guarantee arrangements. We do not believe, based on historical experience and information currently available, that it is likely that any amounts will be required to be paid under these guarantee arrangements. Use of Estimates The preparation of consolidated financial statements in conformity with U.S. generally accepted accounting principles (U.S. GAAP) requires the use of estimates and assumptions by management in determining the reported amounts of assets and liabilities and disclosures of contingent assets and liabilities at the date of the consolidated financial statements and the reported amounts of revenues and expenses during the reporting period. Examples of a few such estimates include estimates of the amount and timing of costs to be incurred for AROs, any valuation allowance recorded on net deferred tax assets, long-lived asset and goodwill impairments and allowance for credit losses. Actual results could materially differ from those estimates. Accounting for Contingencies We have contingent liabilities and future claims for which we have made estimates of the amount of the eventual cost to liquidate these liabilities or claims. We make an assessment of our exposure and record a provision in our accounts to cover an expected loss when we believe a loss is probable and the amount of the loss can be reasonably estimated. These liabilities and claims sometimes involve threatened or actual litigation where damages have been quantified. Other claims or liabilities have been estimated based on their fair value or our experience in these matters and, when appropriate, the advice of outside counsel or other outside experts. 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, insurance claims, contract claims and obligations. Recent Accounting Pronouncements From time to time, new accounting pronouncements are issued by the Financial Accounting Standards Board (FASB), 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 November 2023, the FASB issued Accounting Standards Update (ASU) 2023-07, “Segment Reporting (Topic 280): Improvements to Reportable Segment Disclosures”, which updates reportable segment disclosure requirements primarily through enhanced disclosures about significant segment expenses. The amendments are effective for fiscal years beginning after December 15, 2023, and for interim periods within fiscal years beginning after December 15, 2024. Early adoption is permitted. The amendments should be applied retrospectively to all prior periods presented in the financial statements. We are currently evaluating this ASU to determine its impact on our disclosures. In December 2023, the FASB issued ASU 2023-09, “Income Taxes (Topic 740): Improvements to Income Tax Disclosures”, which enhances effective tax rate reconciliation disclosure requirements and provides clarity to the disclosures of income taxes paid, income before taxes and provision for income taxes. The amendments are effective for fiscal years beginning after December 15, 2024. Early adoption is permitted for annual financial statements that have not yet been issued or made available for issuance. The amendments in this update should be applied on a prospective basis. Retrospective application is permitted. We are currently evaluating this ASU to determine its impact on our disclosures. 82 3. REVENUE The following table disaggregates our revenue by our two reportable segments (Canada and Australia) into major categories for the years ended December 31, 2023, 2022 and 2021 (in thousands): 2023 2022 2021 Canada Accommodation revenues $ 266,926 $ 279,455 $ 239,526 Mobile facility rental revenues 61,899 96,400 62,856 Food service and other services revenues 23,970 20,142 18,996 Total Canada revenues 352,795 395,997 321,378 Australia Accommodation revenues $ 177,834 $ 152,714 $ 145,335 Food service and other services revenues 158,929 125,538 105,739 Total Australia revenues 336,763 278,252 251,074 Other Other revenues $ 11,247 $ 22,803 $ 22,011 Total other revenues 11,247 22,803 22,011 Total revenues $ 700,805 $ 697,052 $ 594,463 Our payment terms vary by the type and location of our customer and the products or services offered. The term between invoicing and when our performance obligations are satisfied is not significant. Payment terms are generally within 30 days and in most cases do not extend beyond 60 days. We do not have significant financing components or significant payment terms. As of December 31, 2023, for contracts that are greater than one year, the table below discloses the estimated revenues related to performance obligations that are unsatisfied (or partially unsatisfied) and when we expect to recognize the revenue. The table only includes revenue expected to be recognized from contracts where the quantity of service is certain (in thousands): For the years ending December 31, 2024 2025 2026 Thereafter Total Revenue expected to be recognized as of December 31, 2023 $ 166,047 $ 126,082 $ 95,196 $ 295,371 $ 682,696 We applied the practical expedient and do not disclose consideration for remaining performance obligations with an original expected duration of one year or less. In addition, we do not estimate revenues expected to be recognized related to unsatisfied performance obligations for contracts without minimum room commitments. The table above represents only a portion of our expected future consolidated revenues and it is not necessarily indicative of the expected trend in total revenues. 4. IMPAIRMENT CHARGES 2023 Impairment Charges The following summarizes pre-tax impairment charges recorded during 2023, which are included in Impairment expense in our consolidated statements of operations (in thousands): U.S. Total Quarter ended December 31, 2023 Long-lived assets $ 1,395 $ 1,395 Total $ 1,395 $ 1,395 Quarter ended December 31, 2023 . During the fourth quarter of 2023, we recorded impairment expense of $ 1.4 million, related to land located in our U.S. market. The land was written down to its estimated fair value (less costs to sell) of $ 5.9 million. 83 2022 Impairment Charges The following summarizes pre-tax impairment charges recorded during 2022, which are included in Impairment expense in our consolidated statements of operations (in thousands): Australia U.S. Total 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. market. The lodge was written down to its estimated fair value (less costs to sell) of $ 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): Australia Total Quarter ended June 30, 2021 Long-lived assets $ 7,935 $ 7,935 Total $ 7,935 $ 7,935 Quarter ended June 30, 2021 . During the second quarter of 2021, we recorded impairment expense of $ 7.9 million related to various undeveloped land positions and related permitting costs in Australia. At June 30, 2021, we identified an impairment trigger related to certain of these properties due to the cancellation of a significant thermal coal project in Australia and our negative expectations related to other possible Australian thermal coal projects becoming viable in the near term. Accordingly, the assets were written down to their estimated fair value of $ 2.4 million. 5. FAIR VALUE MEASUREMENTS Our financial instruments consist of cash and cash equivalents, receivables, payables and debt instruments. We believe that the carrying values of these instruments on the accompanying consolidated balance sheets approximate their fair values. As of December 31, 2023 and 2022, we believe the carrying value of our floating-rate debt outstanding under our term loans and revolving credit facilities approximates fair value because the terms include short-term interest rates and exclude penalties for prepayment. We estimated the fair value of our floating-rate term loan and revolving credit facilities using significant other observable inputs, representative of a Level 2 fair value measurement, including terms and credit spreads for these loans. In addition, the estimated fair value of our assets held for sale is based upon Level 2 fair value measurements, which include appraisals, broker price opinions and previous negotiations with third parties. During the fourth quarter of 2023 and 2022 and the second quarter of 2021, we wrote down certain long-lived assets to fair value. During the fourth quarter of 2023 and 2022, our estimate of fair value of a property in the U.S. was based on broker price opinions or 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. 84 6. EARNINGS PER SHARE For the year ended December 31, 2023, we calculated our basic earnings per share by dividing net income (loss) attributable to common shareholders, before allocation of earnings to participating earnings by the weighted average number of common shares outstanding. For diluted earnings per share, the basic shares outstanding are adjusted by adding all potentially dilutive securities. For the years ended December 31 2022 and 2021, a period during which we had participating securities in the form of Class A preferred shares, we used the two-class method to calculate basic and diluted earnings per share. 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, after allocation of earnings to participating earnings by the weighted average number of common shares outstanding during the period. Net income attributable to common shareholders, after allocation of earnings to participating earnings 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, after reallocation adjustment for participating securities 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 was 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 years ended December 31, 2023, 2022 and 2021 (in thousands, except per share amounts): 2023 2022 2021 Numerator: Net income attributable to Civeo common shareholders, before allocation of earnings to participating securities $ 30,157 $ 2,226 $ ( 575 ) Less: premium paid for repurchase of preferred shares — ( 5,189 ) — Less: income allocated to participating securities — — — Net income (loss) attributable to Civeo Corporation common shareholders, after allocation of earnings to participating securities $ 30,157 $ ( 2,963 ) $ ( 575 ) Add: undistributed income attributable to participating securities — — — Less: undistributed income reallocated to participating securities — — — Diluted net income (loss) attributable to Civeo Corporation common shareholders, after reallocation adjustment for participating securities $ 30,157 $ ( 2,963 ) $ ( 575 ) Denominator: Weighted average shares outstanding - basic 14,906 14,002 14,232 Dilutive shares - share-based awards 107 — — Weighted average shares outstanding - diluted 15,013 14,002 14,232 Basic net income (loss) per share attributable to Civeo Corporation common shareholders (1) $ 2.02 $ ( 0.21 ) $ ( 0.04 ) Diluted net income (loss) per share attributable to Civeo Corporation common shareholders (1) $ 2.01 $ ( 0.21 ) $ ( 0.04 ) (1) Computations may reflect rounding adjustments. 85 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 years ended December 31, 2023, 2022 and 2021 (in millions of shares): 2023 2022 2021 Share-based awards (1) — 0.2 0.2 Preferred shares — 2,240 2,461 (1) Share-based awards for the y ear ended December 31, 2023 totaled fewer than 0.1 million shares. 7. DETAILS OF SELECTED BALANCE SHEET ACCOUNTS Additional information regarding selected balance sheet accounts at December 31, 2023 and 2022 is presented below (in thousands): December 31, 2023 December 31, 2022 Accounts receivable, net: Trade $ 93,527 $ 65,563 Unbilled revenue 46,331 52,547 Other 3,563 1,944 Total accounts receivable 143,421 120,054 Allowance for credit losses ( 199 ) ( 299 ) Total accounts receivable, net $ 143,222 $ 119,755 December 31, 2023 December 31, 2022 Inventories: Finished goods and purchased products $ 5,648 $ 5,538 Raw materials 1,334 1,369 Total inventories $ 6,982 $ 6,907 Estimated Useful Life (in years) December 31, 2023 December 31, 2022 Property, plant and equipment, net: Land $ 27,988 $ 25,528 Accommodations assets 3 - 15 1,378,408 1,464,476 Buildings and leasehold improvements 7 - 20 14,603 15,516 Machinery and equipment 4 - 7 13,255 11,775 Office furniture and equipment 3 - 7 67,248 62,725 Vehicles 3 - 5 10,025 8,411 Construction in progress 12,087 1,771 Total property, plant and equipment 1,523,614 1,590,202 Accumulated depreciation ( 1,253,051 ) ( 1,288,312 ) Total property, plant and equipment, net $ 270,563 $ 301,890 December 31, 2023 December 31, 2022 Accrued liabilities: Accrued compensation $ 33,854 $ 34,358 Accrued taxes, other than income taxes 3,997 2,873 Other 2,672 1,980 Total accrued liabilities $ 40,523 $ 39,211 86 December 31, 2023 December 31, 2022 Contract liabilities (Deferred revenue): Current contract liabilities (1) $ 4,849 $ 991 Noncurrent contract liabilities (1) 8,068 — Total contract liabilities (Deferred revenue) $ 12,917 $ 991 (1) Current contract liabilities and Noncurrent contract liabilities are included in "Deferred revenue" and "Other noncurrent liabilities," respectively, in our consolidated balance sheets. Deferred revenue typically consists of upfront payments received before we satisfy the associated performance obligation. The increase in deferred revenue from December 31, 2022 to December 31, 2023 was due to payments received from a customer for village enhancements in Australia and a payment received from a customer related to an asset transportation contract, which will all be recognized over the contracted terms. 8. ASSETS HELD FOR SALE As of December 31, 2023, assets held for sale included certain assets in the U.S. These assets were recorded at the estimated fair value less costs to sell, which exceeded or equaled their carry values. During the first quarter of 2023, we sold the accommodation assets in Louisiana. The land at this location remains in assets held for sale as of December 31, 2023. During the third quarter of 2023, we entered into a definitive agreement to sell our McClelland Lake Lodge assets for approximately C$ 49 million, or US$ 36 million. The related assets had no remaining carrying value. During the year ended December 31, 2023, we recognized $ 14.2 million in demobilization costs and received $ 28.2 million in cash proceeds associated with the sale. We expect to recognize the remaining demobilization costs and the proceeds of the sale in the first quarter of 2024. As of December 31, 2022, assets held for sale included certain assets in our Canadian business segment and the U.S. 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, 2023 and 2022 of the assets classified as held for sale (in thousands): December 31, 2023 December 31, 2022 Assets held for sale: Property, plant and equipment, net $ 5,873 $ 8,653 Total assets held for sale $ 5,873 $ 8,653 87 9. GOODWILL AND OTHER INTANGIBLE ASSETS Changes in the carrying amount of goodwill (all of which is in our Australia segment) from December 31, 2021 to December 31, 2023 are as follows (in thousands): Total Goodwill as of December 31, 2021 $ 8,204 Foreign currency translation ( 532 ) Goodwill as of December 31, 2022 $ 7,672 Foreign currency translation 18 Goodwill as of December 31, 2023 $ 7,690 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, 2023 and 2022 (in thousands): December 31, December 31, 2023 2022 Gross Carrying Amount Accumulated Amortization Gross Carrying Amount Accumulated Amortization Amortizable Intangible Assets Customer relationships $ 40,728 $ ( 40,728 ) $ 40,656 $ ( 40,656 ) Trade name 3,363 ( 3,363 ) 3,324 ( 3,324 ) Contracts / agreements 143,725 ( 65,754 ) 149,356 ( 67,637 ) Total amortizable intangible assets $ 187,816 $ ( 109,845 ) $ 193,336 $ ( 111,617 ) Indefinite-Lived Intangible Assets Not Subject to Amortization Licenses 28 — 28 — Total indefinite-lived intangible assets 28 — 28 — Total intangible assets $ 187,844 $ ( 109,845 ) $ 193,364 $ ( 111,617 ) The weighted average remaining amortization period for all intangible assets, other than indefinite-lived intangibles, was 14.1 years as of December 31, 2023 and 15.0 years as of December 31, 2022. Amortization expense was $ 5.8 million, $ 5.9 million and $ 6.0 million in the years ended December 31, 2023, 2022 and 2021, respectively. As of December 31, 2023, the estimated remaining amortization of our amortizable intangible assets was as follows (in thousands): Year Ending December 31, 2024 $ 5,616 2025 5,616 2026 5,616 2027 5,616 2028 5,616 Thereafter 49,891 Total $ 77,971 10. LEASES We have operating and finance leases covering certain land locations and various office facilities and equipment in our two reportable business segments. Our leases have remaining lease terms of one year to seven 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. 88 The components of lease expense were $ 4.2 million, $ 5.0 million and $ 5.9 million under operating leases for the years ended December 31, 2023, 2022 and 2021, respectively. The components of lease expense were $ 0.2 million, $ 0.0 million and $ 0.0 million under finance leases for the years ended December 31, 2023, 2022 and 2021, respectively. Included in the measurement of lease liabilities, we paid $ 4.6 million and $ 0.1 million in cash related to operating leases and finance leases during the year ended December 31, 2023, respectively. Right-of-use assets obtained in exchange for new lease obligations during the year ended December 31, 2023 were $ 0.6 million. Supplemental balance sheet information related to leases were as follows (in thousands): December 31, 2023 December 31, 2022 Operating leases Operating lease right-of-use assets $ 12,286 $ 15,722 Other current liabilities $ 3,594 $ 3,792 Operating lease liabilities 9,264 12,771 Total operating lease liabilities $ 12,858 $ 16,563 Finance leases Other noncurrent assets $ 760 $ — Other current liabilities $ 164 $ — Other noncurrent liabilities 613 — Total finance lease liabilities $ 777 $ — Weighted average remaining lease term Operating leases 4.1 years 4.8 years Finance leases 4.3 years — Weighted average discount rate Operating leases 5.5 % 5.4 % Finance leases 6.6 % — % Maturities of lease liabilities at December 31, 2023, were as follows (in thousands): Year Ending December 31, Operating Leases Finance Leases Total 2024 $ 4,341 $ 222 $ 4,563 2025 3,366 222 3,588 2026 2,721 222 2,943 2027 2,548 216 2,764 2028 1,238 63 1,301 Thereafter 554 — 554 Total lease payments 14,768 945 15,713 Less imputed interest 1,910 168 2,078 Total $ 12,858 $ 777 $ 13,635 89 11. DEBT As of December 31, 2023 and 2022, long-term debt consisted of the following (in thousands): December 31, 2023 December 31, 2022 Canadian term loan; weighted average interest rate of 8.2 % for the twelve-month period ended December 31, 2023 $ — $ 29,532 U.S. revolving credit facility; weighted average interest rate of 10.2 % for the twelve-month period ended December 31, 2023 — — Canadian revolving credit facility; weighted average interest rate of 8.3 % for the twelve-month period ended December 31, 2023 65,554 101,147 Australian revolving credit facility; weighted average interest rate of 6.8 % for the twelve-month period ended December 31, 2023 — 1,358 65,554 132,037 Less: Unamortized debt issuance costs — 1,084 Total debt 65,554 130,953 Less: Current portion of long-term debt, including unamortized debt issuance costs, net — 28,448 Long-term debt, less current maturities $ 65,554 $ 102,505 Scheduled maturities of long-term debt as of December 31, 2023 are as follows (in thousands): Year Ending December 31, 2024 $ — 2025 65,554 $ 65,554 Credit Agreement As of December 31, 2023, 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. subsidiaries, as borrower; (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; and (ii) a C$ 100.0 million term loan facility, which was fully repaid, on December 31, 2023 in favor of Civeo. The Credit Agreement was amended effective March 31, 2023 to, among other things, change the benchmark interest rate for certain U.S. dollar-denominated loans in each of the Australian Revolving Facility, Canadian Revolving Facility, and U.S. Revolving Facility from London Inter-Bank Offered Rate to Term Secured Overnight Financing Rate (SOFR). U.S. dollar amounts outstanding under the facilities provided by the Credit Agreement bear interest at a variable rate equal to the Term SOFR 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 net 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 net debt to Consolidated EBITDA. The future transition from CDOR as an interest rate benchmark is addressed in the Credit Agreement and at such time the transition from CDOR takes place, an alternate benchmark will be established based on the first alternative of the following, plus a benchmark replacement adjustment, Term Canadian Overnight Repo Rate Average (CORRA) and Compound CORRA. The Credit Agreement contains customary affirmative and negative covenants that, among other things, limit or restrict: (i) indebtedness, liens and fundamental changes; (ii) asset sales; (iii) specified acquisitions; (iv) certain restrictive agreements; (v) transactions with affiliates; and (vi) 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 a 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. Each of the 90 factors considered in the calculations of these ratios are defined in the Credit Agreement. EBITDA and consolidated interest, as defined, exclude goodwill and asset impairments, debt discount amortization, amortization of intangibles and other non-cash charges. We were in compliance with our covenants as of December 31, 2023. Borrowings under the Credit Agreement are secured by a pledge of substantially all of our assets and the assets of our subsidiaries subject to customary exceptions. The obligations under the Credit Agreement are guaranteed by our significant subsidiaries. As of December 31, 2023, we had seven lenders that were parties to the Credit Agreement, with total revolving commitments ranging from $ 16.1 million to $ 37.1 million. As of December 31, 2023, we had outstanding letters of credit of $ 0.3 million under the U.S. facility, zero under the Australian facility and $ 1.1 million under the Canadian facility. We also had outstanding bank guarantees of A$ 0.8 million under the Australian facility. 12. ASSET RETIREMENT OBLIGATIONS AROs at December 31, 2023 and 2022 were (in thousands): 2023 2022 Asset retirement obligations $ 16,215 $ 18,113 Less: Asset retirement obligations due within one year (1) 2,576 4,550 Long-term asset retirement obligations $ 13,639 $ 13,563 (1) Classified as a current liability on the consolidated balance sheets, under the caption “Other current liabilities.” Balance at December 31, 2023 related to remediation work planned for 2024. Total accretion expense related to AROs was $ 1.1 million, $ 1.8 million and $ 1.4 million during the years ended December 31, 2023, 2022 and 2021, respectively. During the years ended December 31, 2023, 2022 and 2021, our ARO changed as follows (in thousands): 2023 2022 2021 Balance as of January 1 $ 18,113 $ 13,745 $ 14,993 Accretion of discount 1,104 1,830 1,429 Change in estimates of existing obligations 1,366 4,138 ( 763 ) Settlement of obligations ( 4,756 ) ( 455 ) ( 1,943 ) Foreign currency translation 388 ( 1,145 ) 29 Balance as of December 31 $ 16,215 $ 18,113 $ 13,745 13. RETIREMENT PLANS We sponsor various defined contribution plans. Participation in these plans is available to substantially all employees. A defined contribution plan is a post-employment benefit plan under which an entity pays fixed contributions into a separate entity and will generally have no legal or constructive obligation to pay further amounts. Obligations for contributions to defined contribution plans are recognized as an employee benefit expense in profit or loss in the periods during which services are rendered by employees. We recognized expense of $ 10.2 million, $ 8.2 million and $ 7.6 million related to matching contributions under our various defined contribution plans during the years ended December 31, 2023, 2022 and 2021, respectively. Canadian Retirement Savings Plan We offer a defined contribution retirement plan to our Canadian employees. In Canada, we contribute, on a matched basis, an amount up to 5 % of each Canadian based, salaried employee’s earnings (base salary plus annual incentive compensation) to the legislated maximum for a Deferred Profit Sharing Plan (DPSP). The maximum for 2023 was C$ 15,780 . DPSP is a form of defined contribution retirement savings plan governed by Canadian federal tax legislation which provides for the deferral of tax on deposits and investment returns until removed from the plan to support retirement income. Employer contributions vest upon the completion of two years of service. 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. The two plans work in tandem. Contributions to the “Retirement Savings Plan” for Canadian employees are subject to the annual maximum total registered savings limit of C$ 30,780 in 2023 as set out in the Canadian Tax Act. 91 Australian Retirement Savings Plan Our Australian subsidiary contributes to various defined contribution plans for its employees in accordance with legislation governing the calculation of the Superannuation Guarantee Surcharge (SGC). SGC is contributed by the employer at a rate of 10.5 % of the base salary of an employee, capped at the legislated maximum contribution base which is indexed annually. Our Australian subsidiary makes no investment decisions on behalf of the employee and has no obligations other than to remit the defined contributions to the plan selected by each individual employee. U.S. Retirement Savings Plan We offer a defined contribution 401(k) retirement plan to substantially all of our U.S. employees. Participants may contribute from 1 % to 75 % of their base and cash incentive compensation (subject to Internal Revenue Service limitations), and we make matching contributions under this plan on the first 6 % of the participant’s compensation ( 100 % match of the first 4 % employee contribution and 50 % match on the next 2 % contribution). Our matching contributions vest at a rate of 40 % after two years of service and 20 % per year for each of the employee’s next three years of service and are fully vested thereafter. 14. INCOME TAXES The Company’s operations are conducted through various subsidiaries in a number of countries throughout the world. The Company has provided for income taxes based upon the tax laws and rates in the countries in which operations are conducted and income is earned. Income tax expense ( benefit). Pre-tax income (loss) for the years ended December 31, 2023, 2022 and 2021 consisted of the following (in thousands): 2023 2022 2021 Canada operations $ 5,524 $ 3,040 $ 2,498 Foreign operations 34,839 7,692 3,375 Total $ 40,363 $ 10,732 $ 5,873 The components of the income tax expense (benefit) for the years ended December 31, 2023, 2022 and 2021 consisted of the following (in thousands): 2023 2022 2021 Current: Canada $ 142 $ 31 $ 141 Foreign 3,685 194 165 Total $ 3,827 $ 225 $ 306 Deferred: Canada $ — $ — $ — Foreign 6,806 4,177 3,070 Total $ 6,806 $ 4,177 $ 3,070 Net income tax expense (benefit) $ 10,633 $ 4,402 $ 3,376 92 The net income tax expense (benefit) differs from an amount computed at Canadian statutory rates as follows for the years ended December 31, 2023, 2022 and 2021 (in thousands): 2023 2022 2021 Canadian federal tax benefit at statutory rates $ 6,054 15.0 % $ 1,610 15.0 % $ 779 13.3 % Canadian provincial income tax 497 1.2 % 282 2.6 % 215 3.7 % Effect of foreign income tax, net 5,481 13.6 % 1,809 16.9 % 1,189 20.2 % Valuation allowance ( 2,556 ) ( 6.3 ) % 153 1.4 % 1,028 17.5 % Noncontrolling interest 125 0.3 % ( 562 ) ( 5.2 ) % — — % Non-deductible compensation 1,009 2.5 % 808 7.5 % 526 9.0 % Unrealized intercompany foreign currency translation gain ( 148 ) ( 0.4 ) % ( 250 ) ( 2.3 ) % ( 708 ) ( 12.1 ) % Deemed income from foreign subsidiaries 322 0.8 % 331 3.1 % 297 5.1 % Other, net ( 151 ) ( 0.4 ) % 221 2.0 % 50 0.8 % Net income tax expense (benefit) $ 10,633 26.3 % $ 4,402 41.0 % $ 3,376 57.5 % Deferred Tax Liabilities and Assets. The significant items giving rise to the deferred tax assets and liabilities as of December 31, 2023 and 2022 are as follows (in thousands): 2023 2022 Deferred tax assets: Net operating loss $ 54,274 $ 75,326 Employee benefits 1,796 2,810 Deductible goodwill and other intangibles 48,201 48,432 Land 3,461 3,159 Other reserves 7,890 7,439 Deferred revenue 2,381 — Operating lease liabilities 3,199 4,133 Capital losses 2,036 1,930 Other 1,770 2,303 Deferred tax assets 125,008 145,532 Valuation allowance ( 78,769 ) ( 82,905 ) Deferred tax assets, net $ 46,239 $ 62,627 Deferred tax liabilities: Intangibles $ ( 18,949 ) $ ( 20,098 ) Depreciation ( 36,048 ) ( 43,394 ) Operating lease right-of-use assets ( 3,045 ) ( 3,913 ) Deferred tax liabilities ( 58,042 ) ( 67,405 ) Net deferred tax liabilities, net $ ( 11,803 ) $ ( 4,778 ) At December 31, 2023 and 2022, 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, 2023 and 2022, we did not provide for deferred taxes on any such earnings of our foreign subsidiaries. NOL Carryforwards. The following table summarizes net operating loss (NOL) carryforwards at December 31, 2023 (in thousands): Amount Expiration Period Net operating loss carryforwards: Canada – Federal and provincial $ 144,242 Begins to expire in 2035 U.S. – Federal 34,028 Begins to expire in 2036 U.S. – Federal 30,655 Does not expire U.S. – State, tax effected 6,073 Begins to expire in 2024 93 Change in Valuation Allowance. Realization of our deferred tax assets is dependent upon, among other things, our ability to generate taxable income of the appropriate character in the future. Changes in our valuation allowance for the years ended December 31, 2023 and 2022 are as follows (in thousands): Balance as of December 31, 2021 $ ( 85,351 ) Change in income tax provision ( 153 ) Other change ( 1,178 ) Foreign currency translation 3,777 Balance as of December 31, 2022 ( 82,905 ) Change in income tax provision 2,556 Other change 1,767 Foreign currency translation ( 187 ) Balance as of December 31, 2023 $ ( 78,769 ) 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, 2023, management determined that there is not sufficient evidence to conclude that it is more likely than not that the Canadian and U.S. net deferred tax assets are realizable, therefore we have maintained the valuation allowance in both of these jurisdictions. As of December 31, 2023, 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. We file tax returns in the jurisdictions in which they are required. All of these returns are subject to examination or audit and possible adjustment as a result of assessments by taxing authorities. We believe that we have recorded sufficient tax liabilities and do not expect the resolution of any examination or audit of our tax returns to have a material adverse effect on our operating results, financial condition or liquidity. Our Canadian federal tax returns subsequent to 2018 are subject to audit by the Canada Revenue Agency. Our Australian subsidiary’s federal income tax returns subsequent to 2018 are open for review by the Australian Taxation Office. Our U.S. subsidiary’s federal tax returns subsequent to 2019 are subject to audit by the U.S. Internal Revenue Service. The total amount of unrecognized tax benefits as of December 31, 2023, 2022 and 2021 was zero . Unrecognized tax benefits, if recognized, would affect the effective tax rate. We accrue interest and penalties, if applicable, related to unrecognized tax benefits as a component of our provision for income taxes. As of December 31, 2023, 2022 and 2021, we had accrued zero of interest expense and penalties. 15. COMMITMENTS AND CONTINGENCIES We are a party to various pending or threatened claims, lawsuits and administrative proceedings seeking damages or other remedies concerning our commercial operations, products, employees and other matters, including warranty and product liability claims as a result of our products or operations. Although we can give no assurance about the outcome of pending legal and administrative proceedings and the effect such outcomes may have on us, management believes that any ultimate liability resulting from the outcome of such proceedings, to the extent not otherwise provided for or covered by insurance, will not have a material adverse effect on our consolidated financial position, results of operations or liquidity. 16. PREFERRED SHARES 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. 94 During the years ended December 31, 2022 and 2021, we recognized preferred dividends on the Series A preferred shares as follows (in thousands): 2022 2021 In-kind dividends $ 1,706 $ 1,925 Cash dividend on repurchased preferred shares 65 — Total preferred dividends $ 1,771 $ 1,925 The Board of Directors (Board) 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 and $ 1.9 million is included in Preferred dividends on the accompanying consolidated statements of operations for the years ended December 31, 2022 and 2021, respectively. 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 were required to be paid. 17. SHARE REPURCHASE PROGRAMS AND DIVIDENDS Share Repurchase Programs In August 2023, 2022 and 2021, our Board authorized common share repurchase programs to repurchase up to 5.0 % of our total common shares which were issued and outstanding, or approximately 742,000 , 685,000 and 715,000 common shares, respectively, over a twelve month period. 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 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. The following table summarizes our common share repurchases pursuant to our share repurchase programs (in thousands, except per share data). 2023 2022 2021 Shares repurchased 564 124 217 Average price paid per share $ 20.60 $ 28.54 $ 21.38 Dollar-value of shares repurchased $ 11,634 $ 3,540 $ 4,649 In addition to the shares repurchased pursuant to our share repurchase programs, we repurchased 374,753 common shares from a shareholder for approximately $ 10.7 million during the three months ended September 30, 2022. Dividends Our Board declared a quarterly dividend on October 27, 2023 of $ 0.25 per common share to shareholders of record as of close of business on November 27, 2023. The total cash payment of $ 3.7 million was paid on December 18, 2023. Our Board declared a quarterly dividend on September 5, 2023 of $ 0.25 per common share to shareholders of record as of close of business on September 15, 2023. The total cash payment of $ 3.7 million was paid on September 29, 2023. The dividends are eligible dividends pursuant to the Income Tax Act (Canada). 18. ACCUMULATED OTHER COMPREHENSIVE LOSS Our accumulated other comprehensive loss decreased $ 4.5 million from $ 385.2 million at December 31, 2022 to $ 380.7 million at December 31, 2023, as a result of foreign currency exchange rate fluctuations. Changes in other comprehensive loss during 2023 were primarily driven by the Australian dollar and Canadian dollar increasing in value compared to the U.S. dollar. Excluding intercompany balances, our Canadian dollar and Australian dollar functional currency net assets totaled approximately C$ 234 million and A$ 205 million, respectively, at December 31, 2023. 95 19. SHARE-BASED COMPENSATION 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 and grant awards of options, awards of restricted shares, performance awards, phantom share units and dividend equivalents, awards of deferred shares, and share payments to our employees and non-employee directors. No more than 3.0 million Civeo common shares are authorized to be issued under the Civeo Plan. Share-based compensation expense recognized in the years ended December 31, 2023, 2022 and 2021 totaled $ 11.8 million, $ 14.9 million and $ 9.9 million, respectively. 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 $ 0.6 million, $ 0.8 million and $ 0.5 million for the years ended December 31, 2023, 2022 and 2021, respectively. Phantom Share Units We grant phantom share unit awards, which vest a third per year over a three year period. Each phantom share unit award is equal in value to one common share. Upon vesting, each recipient will receive a lump sum cash payment equal to the fair market value of a common share on the respective vesting date in respect of each phantom share unit then vesting. These awards are accounted for as a liability that is remeasured at each reporting date until paid. The following table presents the changes in phantom share unit awards outstanding and related information for our employees during the years ended December 31, 2023, 2022 and 2021: Number of Awards Nonvested shares at December 31, 2020 458,175 Granted 354,535 Vested ( 163,499 ) Forfeited ( 27,081 ) Nonvested shares at December 31, 2021 622,130 Granted 335,098 Vested ( 270,382 ) Forfeited ( 27,558 ) Nonvested shares at December 31, 2022 659,288 Granted 229,845 Vested ( 335,178 ) Forfeited ( 33,394 ) Nonvested shares at December 31, 2023 520,561 At December 31, 2023, the balance of the liability for the phantom share awards was $ 5.7 million. For the years ended December 31, 2023, 2022 and 2021, we made phantom share cash payments of $ 10.4 million, $ 6.0 million and $ 3.1 million, respectively. At December 31, 2023, unrecognized compensation cost related to phantom shares was $ 6.5 million, as remeasured at December 31, 2023, which is expected to be recognized over a weighted average period of 1.6 years. The weighted average grant-date fair value per share of phantom shares granted during the years ended December 31, 2023, 2022 and 2021 was $ 31.05 , $ 21.97 and $ 19.80 , respectively. Performance Share Awards We grant performance share awards, which cliff vest after three years subject to attainment of applicable performance goals. Awards granted in 2023 and 2022 will be earned in amounts between 0 % and 200 % of the participant’s target performance share award, based equally on (i) the payout percentage associated with Civeo’s relative TSR rank among a peer group of other companies and (ii) 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 (i) the payout percentage associated with Civeo’s relative TSR rank among a peer group of other companies and (ii) the payout percentage associated with Civeo's cumulative free cash flow over the performance period relative to a preset target. The grant-date fair value of the portion of the performance awards tied to 96 cumulative operating cash flow and free cash flow is based on target achievement and the closing market price of our common shares on the date of grant. We evaluate the probability of achieving the performance goals 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 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. The risk-free interest rate is based on the U.S. Treasury yield curve in effect for the expected term of the performance share at the time of grant. The dividend yield on our common shares was assumed to be zero since we did not pay dividends when the awards were granted. The expected market price volatility of our common shares was based on an estimate that considers the historical and implied volatility of our common shares as well as a peer group of companies over a time period equal to the expected term of the award. The initial TSR performance was based on historical performance of our common shares and the peer group’s common shares. 2023 2022 2021 Risk-free weighted interest rate 4.4 % 1.7 % 0.2 % Expected volatility 73.0 % 78.0 % 83.0 % Initial TSR 4.1 % 14.1 % 27.1 % The following table presents the changes in performance share awards outstanding and related information for our employees during the year ended December 31, 2023, 2022 and 2021: Number of Awards Weighted Average Grant Date Fair Value Per Share Nonvested shares at December 31, 2020 152,312 $ 52.86 Granted 130,649 26.86 Performance adjustment (1) 28,466 — Vested ( 93,922 ) 63.60 Forfeited ( 1,296 ) 44.76 Nonvested shares at December 31, 2021 216,209 $ 33.97 Granted 123,385 27.69 Performance adjustment (2) 22,235 — Vested ( 107,795 ) 44.76 Forfeited — — Nonvested shares at December 31, 2022 254,034 $ 29.81 Granted 86,454 38.45 Performance adjustment (3) — — Vested (3) — — Forfeited ( 8,487 ) 32.67 Nonvested shares at December 31, 2023 332,001 $ 32.37 (1) Related to 2018 performance share awards that vested in 2021, which were paid out at 150 % based on Civeo's TSR rank. (2) Related to 2019 performance share awards that vested in 2022, which were paid out at 126 % based on Civeo's TSR rank. (3) No performance share awards vested in 2023. During the years ended December 31, 2023, 2022 and 2021, we recognized compensation expense associated with performance share awards totaling $ 3.4 million, $ 2.6 million and $ 2.4 million, respectively. At December 31, 2023, unrecognized compensation cost related to performance share awards was $ 3.8 million, which is expected to be recognized over a weighted average period of 1.7 years. 97 Restricted Share Awards/ Restricted Share Units/ Deferred Share Awards The following table presents the changes in restricted share awards, restricted share units and deferred share awards outstanding and related information for our employees and non-employee directors during the years ended December 31, 2023, 2022 and 2021: Number of Awards/Units Weighted Average Grant Date Fair Value Per Share Nonvested shares at December 31, 2020 105,091 $ 34.56 Granted 59,027 17.58 Vested ( 77,304 ) 35.76 Forfeited ( 1,957 ) 30.36 Nonvested shares at December 31, 2021 84,857 $ 21.76 Granted 40,465 25.64 Vested ( 86,290 ) 21.83 Nonvested shares at December 31, 2022 39,032 $ 25.62 Granted 50,336 21.02 Vested ( 39,770 ) 25.53 Nonvested shares at December 31, 2023 49,598 $ 21.02 The weighted average grant-date fair value per share for restricted share awards, restricted share units and deferred share awards granted during 2023, 2022 and 2021 was $ 21.02 , $ 25.64 and $ 17.58 , respectively. The total fair value of restricted share awards, restricted share units and deferred share awards vested during 2023, 2022 and 2021 was $ 0.9 million, $ 2.1 million and $ 1.5 million, respectively. At December 31, 2023, unrecognized compensation cost related to restricted share awards, restricted share units and deferred share awards was $ 0.4 million, which is expected to be recognized over a weighted average period of 0.4 years. In addition, at December 31, 2023, all nonvested shares were related to non-employee directors. Options to Purchase Common Shares No options were awarded or exercised in 2023, 2022 or 2021. We had 287 outstanding options at December 31, 2023 that expire in February 2024 with a weighted average exercise price per share of $ 262.44 . As no options were exercised in the last three years, the total intrinsic value of options exercised by our employees during 2023, 2022 and 2021 was zero . Additionally, the tax benefits realized for the tax deduction from options exercised during 2023, 2022 and 2021 totaled zero . At December 31, 2023, unrecognized compensation cost related to options was zero . 20. SUPPLEMENTAL CASH FLOW INFORMATION Cash paid during the years ended December 31, 2023, 2022 and 2021 for interest and income taxes was as follows (in thousands): 2023 2022 2021 Interest (net of amounts capitalized) $ 10,250 $ 9,226 $ 9,991 Net income taxes paid, net of refunds received 251 220 334 98 21. ACQUISITIONS Noralta 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 was 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 were held in escrow and 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 quarters of each of 2023, 2022 and 2021, 0.4 million shares were released to the sellers from escrow. 22. SEGMENT AND RELATED INFORMATION In accordance with current accounting standards regarding disclosures about segments of an enterprise and related information, we have identified two reportable segments, Canada and Australia, which represent our strategic focus on hospitality services and workforce accommodations. Prior to the first quarter of 2023, we presented the U.S. operating segment as a separate reportable segment. Our operating segment in the U.S. no longer meets the reportable segment quantitative thresholds required by U.S. GAAP and is included below within the Corporate, other and eliminations category. Prior periods have been updated to be consistent with the presentation for the year ended December 31, 2023. Financial information by business segment for each of the three years ended December 31, 2023, 2022 and 2021 is summarized in the following table (in thousands): Total Revenues Depreciation and amortization Operating (loss) income Capital expenditures Total assets 2023 Canada $ 352,795 $ 46,319 $ 20,187 $ 9,216 $ 769,543 Australia 336,763 28,696 36,317 21,632 205,702 Corporate, other and eliminations 11,247 127 ( 17,017 ) 785 ( 427,183 ) Total $ 700,805 $ 75,142 $ 39,487 $ 31,633 $ 548,062 2022 Canada $ 395,997 $ 55,503 $ 17,023 $ 11,588 $ 726,640 Australia 278,252 30,521 14,731 12,757 198,795 Corporate, other and eliminations 22,803 1,190 ( 14,736 ) 1,076 ( 359,251 ) Total $ 697,052 $ 87,214 $ 17,018 $ 25,421 $ 566,184 2021 Canada $ 321,378 $ 47,253 $ 12,816 $ 6,747 $ 764,519 Australia 251,074 33,110 7,303 6,823 226,318 Corporate, other and eliminations 22,011 2,738 ( 14,067 ) 2,001 ( 318,103 ) Total $ 594,463 $ 83,101 $ 6,052 $ 15,571 $ 672,734 99 Financial information by geographic segment as of and for each of the three years ended December 31, 2023, 2022 and 2021, is summarized below (in thousands). Other revenues include export sales. Revenues are attributable to countries based on the location of the entity selling the products or performing the services. Long-lived assets are attributable to countries based on the physical location of the entity and its operating assets and do not include intercompany balances. Canada Australia Other Total 2023 Revenues from unaffiliated customers $ 352,795 $ 336,763 $ 11,247 $ 700,805 Long-lived assets 230,940 137,789 4,087 372,816 2022 Revenues from unaffiliated customers $ 395,997 $ 278,252 $ 22,803 $ 697,052 Long-lived assets 263,112 144,489 5,034 412,635 2021 Revenues from unaffiliated customers $ 321,378 $ 251,074 $ 22,011 $ 594,463 Long-lived assets 325,160 177,607 12,774 515,541 23. VALUATION ACCOUNTS Activity in the valuation accounts was as follows (in thousands): Balance at Beginning of Period Charged (Reduction) to Costs and Expenses Deductions (Net of Recoveries) Translation and Other, Net Balance at End of Period Year Ended December 31, 2023: Allowance for credit losses on accounts receivable $ 299 $ 79 $ ( 181 ) $ 2 $ 199 Valuation allowance for deferred tax assets 82,905 ( 2,556 ) ( 1,767 ) 187 78,769 Year Ended December 31, 2022: Allowance for credit losses on accounts receivable $ 361 $ 115 $ ( 162 ) $ ( 15 ) $ 299 Valuation allowance for deferred tax assets 85,351 153 1,178 ( 3,777 ) 82,905 Year Ended December 31, 2021: Allowance for credit losses on accounts receivable $ 275 $ 131 $ ( 30 ) $ ( 15 ) $ 361 Valuation allowance for deferred tax assets 88,251 1,028 ( 656 ) ( 3,272 ) 85,351 100