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Item 7. Management’s Discussion and Analysis

2025-02-27 compared with 2024-02-29 · 190 added, 203 removed, 316 unchanged (55% of the section changed)

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This section of this annual report generally discusses key operating and financial data as of and for the years ended 2024 and 2023 and provides year-over-year comparisons for such periods.

For a similar discussion and year-over-year comparisons to our 2021 results, refer to "Management’s Discussion and Analysis of Financial Condition and Results of Operations" in Part II, Item 7 of our Annual Report on Form 10-K for the year ended December 31, 2022, filed with the Securities and Exchange Commission on March 1, 2023.

For a similar discussion and year-over-year comparisons to our 2022 results, refer to "Management’s Discussion and Analysis of Financial Condition and Results of Operations" in Part II, Item 7 of our Annual Report on Form 10-K for the year ended December 31, 2023, filed with the Securities and Exchange Commission on February 29, 2024.

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

We primarily operate in some of the world’s most active oil, metallurgical (met) coal, liquefied natural gas (LNG) and iron ore producing regions, where, in many cases, traditional accommodations and related infrastructure often are not accessible, sufficient or cost effective.

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.

We provide hospitality services to remote workforces in Australia and Canada, including catering and food service, lodging, housekeeping and maintenance at accommodation facilities that we or our customers own.

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 and manufacturing and site construction management, along with providing hospitality services once the facility is constructed.

We primarily operate in some of the world’s most active met coal, oil, liquefied natural gas (LNG) and iron ore producing regions, and our customers include mining companies, major and independent oil companies, engineering companies and mining service companies.

We operate in two principal reportable business segments – Australia and Canada.

Basis of Presentation

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Overview and Macroeconomic Environment

Historically, initial demand for our hospitality services has been driven by our customers’ capital spending programs related to the construction and development of natural resource projects and associated infrastructure, as well as the exploration for oil and natural gas.

Long-term demand for our services has been driven by natural resource production, maintenance and operation of those facilities as well as expansion of those sites.

In general, industry capital spending programs are based on the outlook for commodity prices, production costs, economic growth, global commodity supply/demand, estimates of resource production and the expectations of our customers' shareholders.

As a result, demand for our hospitality services is largely sensitive to expected commodity prices, principally related to oil, met coal, LNG and iron ore, and the resultant impact of these commodity price expectations on our customers’ spending.

Other factors that can affect our business and financial results include the general global economic environment, including inflationary pressures, supply chain disruptions and labor shortages, volatility affecting the banking system and financial markets, availability of capital to the natural resource industry and regulatory changes in Canada, Australia and other markets, including governmental measures introduced to fight climate change.

Demand for our hospitality services is driven primarily by ongoing operations of existing natural resource projects in Australia and Canada.

Long-term demand for our services has been driven by natural resource production, maintenance, operation and expansion of those facilities.

In general, industry capital spending programs are based on the outlook for commodity prices, production costs, economic growth, perceived political risk, global commodity supply/demand, reserve replacement requirements, estimates of resource production, annual maintenance requirements and the expectations of our customers' shareholders.

As a result, demand for our hospitality services is sensitive to expected commodity prices, principally related to met coal, oil, iron ore and LNG, and the resultant impact of these commodity price expectations on our customers’ spending.

Commodity Prices

There is continued uncertainty around commodity price levels, including the impact of inflationary pressures, actions taken by Organization of the Petroleum Exporting Countries Plus (OPEC+) to adjust production levels, geopolitical events such as the ongoing Russia/Ukraine and Israel/Hamas conflicts and rising geopolitical risks in the Middle East, U.S.

There is continued uncertainty around commodity price levels, driven by many factors, including rising fears of a recession resulting from lingering inflation and higher interest rates, an economic slowdown in China and resultant economic stimulus by the Chinese government, the impact of inflationary pressures, actions taken by Organization of the Petroleum Exporting Countries Plus (OPEC+) to adjust oil production levels, geopolitical events such as the ongoing Russia/Ukraine and Middle East conflicts, U.S.

oil production levels and regulatory implications on such prices.

In particular, these items could cause our Canadian oil sands and pipeline

customers to reduce production, delay expansionary and maintenance spending and defer additional investments in their oil sands assets.

In particular, these items could

cause our Canadian oil sands and pipeline customers to delay expansionary and maintenance spending and defer additional investments in their oil sands assets and in extreme cases reduce production.

Recent Commodity Prices

Recent West Texas Intermediate (WTI) crude, Western Canadian Select (WCS) crude, met coal and iron ore pricing trends are as follows:

Recent met coal, iron ore, West Texas Intermediate (WTI) crude, and Western Canadian Select (WCS) crude pricing trends are as follows:

Average Price (1)

(per bbl) WCS

(per bbl) Hard

(per tonne) Iron

(per tonne) WTI

(per bbl) WCS

First Quarter through February 21, 2025

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3/31/2022 474.83 129.46 95.17 82.04

12/31/2020 42.63 31.34 109.37 128.24

WTI crude prices are from U.S.

Energy Information Administration, WCS crude prices and iron ore prices are from Bloomberg and hard coking coal prices are from IHS Markit.

Hard coking prices are from IHS Markit, iron ore prices and WCS crude prices are from Bloomberg and WTI crude prices are from U.S.

Energy Information Administration.

In Australia, 84% of our rooms are located in the Bowen Basin of Queensland, Australia and primarily serve met coal mines in that region.

Met coal pricing and production growth in the Bowen Basin region is predominantly influenced by the level of global steel production.

Following negative growth from July through September 2024, production increased in the last quarter of 2024, reaching similar levels when compared to the same period in 2023.

The turnaround in positive production growth in the last quarter of 2024 was driven by India’s steady steel production and a return to positive steel production growth in China.

Global steel production during 2024 decreased by 0.9% compared with 2023.

As of February 21, 2025, met coal spot prices were $188.50 per tonne.

Steel demand is expected to increase marginally in 2025 compared to 2024 driven by continued improvements in demand from India.

Met coal prices stagnated around $200 per tonne during the last quarter of 2024, following a downward price correction in July and August 2004 as steel demand declined coupled with higher overall met coal inventories.

Despite higher steel production from India and China in the last quarter of 2024, prices remained muted with high met coal inventories and steady supply in late 2024 and early 2025.

In early 2025 met coal prices have dropped below $200, with prices averaging $190 in early 2025.

High met coal inventories from buyers are impacting demand, however producers are maintaining strong production levels even at these lower prices.

While high met coal inventories continued to weigh on prices in late 2024 and early 2025, analysts are forecasting prices to trend higher during 2025 to average approximately $230 per tonne for the year.

This will be contingent upon supply-side constraint from weather events and further anticipated Chinese stimulus support and stable demand from India.

Iron ore prices fluctuated during the first quarter of 2024 and weakened through the second half of 2024, with prices range bound between $90 to $100 per tonne.

Analysts expect iron ore prices to average $100 per tonne in 2025, with large producers forecasting steady supply and demand expected to remain muted.

After reaching historic lows in early 2020 during the start of the COVID-19 pandemic, global oil prices increased to above $100 per barrel in the second quarter 2022.

In the second half of 2022 and throughout 2023, oil prices declined due to (i) rising fears of a recession resulting from severe inflation and rising interest rates, (ii) resulting lower demand for oil and (iii) increasing U.S.

In the second half of 2022 and throughout 2023, oil prices generally declined due to (i) rising fears of a recession resulting from severe inflation and higher interest rates, (ii) resulting lower demand for oil and (iii) increasing U.S.

oil production.

In an effort to support the price of oil amidst demand concerns, OPEC+ countries announced additional oil production cuts through the end of 2023.

These production cuts, coupled with the rising geopolitical risks in the Middle East, resulted in increased oil prices in the third quarter and early part of the fourth quarter of 2023, before reducing in the latter part of the fourth quarter back to levels consistent with the first six months of 2023.

In an effort to support the price of oil amidst demand concerns, OPEC+ countries extended their 2023 oil production cuts throughout 2024.

These production cuts, coupled with the rising

geopolitical risks in the Middle East, resulted in rising oil prices during the first half of 2024.

Oil prices decreased during the second half of 2024 due to increased market concerns over economic growth and demand.

OPEC+ is expected to increase production in 2025, likely putting pressure on global oil prices.

In Canada, WCS crude is the benchmark price for our oil sands customers.

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The WCS Differential has varied depending on the extent of transportation capacity availability.

The Enbridge Line 3 replacement project was completed at the end of 2021 and the Trans Mountain Pipeline is approximately 98% complete, with mechanical completion expected to occur in the first quarter 2024, commercial service expected to begin in April 2024 and volumes expected to ramp up to full capacity by year end 2024.

Certain expansionary oil pipeline projects have the potential to both drive incremental demand for mobile assets and to improve take-away capacity for Canadian oil sands producers over the longer term, most notably the Trans Mountain Pipeline expansion, which began operating in the second quarter of 2024.

WCS prices in the fourth quarter of 2024 averaged $57.50 per barrel compared to an average of $55.31 in the fourth quarter of 2023.

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As of February 21, 2025, the WTI price was $70.58 and the WCS price was $57.24, resulting in a WCS Differential of $13.34.

In Australia, 84% of our rooms are located in the Bowen Basin of Queensland, Australia and primarily serve met coal mines in that region.

Met coal pricing and production growth in the Bowen Basin region is predominantly influenced

by the level of global steel production, which decreased by 0.1% during 2023 compared to 2022.

The decrease year-over-year was the result of weaker production in December 2023 from China, offset by stronger production throughout 2023 from both Europe and Russia.

As of February 23, 2024, met coal spot prices were $311.40 per tonne.

Steel output is forecast to improve marginally through 2024, with large infrastructure rollouts in a number of major economies including the U.S.

Met coal prices remained over $200 per tonne during 2023, which supported existing producers, and also assisted new and expansion projects.

In the last quarter of 2023, met coal prices averaged over $330 per tonne which continues to provide a positive short-term outlook for producing projects, though future investment could be impacted by the increase in the Queensland royalty scheme introduced in 2022.

Analysts forecast prices to remain elevated in the near term but to fall below $300 per tonne in 2024 as supply side pressures are expected to ease and Chinese met coal imports fall following high restocking levels.

Iron ore prices remained consistently above $100 per tonne throughout 2023 and averaged over $130 per tonne in late December 2023, following a sustained period of high prices.

Analysts are forecasting 2024 prices to remain over $100 per tonne on average.

Further, the Trump Administration has announced and is in the process of implementing a 10% tariff on energy resources imported to the U.S.

This tariff could widen the WCS differential and reduce Canadian oil producers' production and profits.

Recent Developments .

On February 18, 2025, we entered into a definitive asset purchase agreement with a private seller to acquire four villages with 1,340 rooms in Australia’s Bowen Basin and the associated long-term customer contracts.

Under the terms of the agreement, Civeo would acquire the assets and customer contracts for total cash consideration of A$105 million, or approximately US$67 million, funded with cash on hand and borrowings from its existing revolving credit facility.

The Proposed Acquisition is anticipated to close in the second quarter of 2025, subject to regulatory approvals and customary conditions.

Inflationary Pressures.

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Labor Shortages.

In addition to the macro inflationary impacts on labor costs noted above, during the COVID-19 pandemic, we were, and continue to be, impacted by increased staff costs as a result of hospitality labor shortages in Australia as government-imposed and voluntary social distancing and quarantining impacted travel.

This labor shortage has been exacerbated by significantly reduced migration in and around Australia affecting labor availability, which has subsequently led to an increased reliance on more expensive temporary labor resources.

Our Sitka Lodge supports the LNG Canada project and related pipeline projects.

In addition to the macro inflationary impacts on labor costs noted above, we continue to be impacted by increased staff costs as a result of hospitality labor shortages in Australia due to significantly reduced migration in and around Australia affecting labor availability, which has subsequently led to an increased reliance on more expensive temporary labor resources.

Our Sitka Lodge supports the LNG Canada (LNGC) project and related pipeline projects (specifically, the Coastal GasLink Pipeline, the pipeline constructed to transport natural gas feedstock to LNGC).

LNGC, a joint venture among Shell Canada Energy, an affiliate of Shell plc (40 percent), and affiliates of PETRONAS, through its wholly-owned entity, North Montney LNG Limited Partnership (25 percent), PetroChina (15 percent), Mitsubishi Corporation (15 percent) and Korea Gas Corporation (5 percent), is currently constructing a liquefaction and export facility in Kitimat, British Columbia (Kitimat LNG Facility).

Construction activity of Phase 1 of the Kitimat LNG Facility is nearing completion, with commercial operations expected to begin in mid-2025.

The Coastal GasLink Pipeline was completed in 2024 and entered commercial operations.

The majority of our contracted commitments associated with the Coastal GasLink Pipeline were completed in the fourth quarter of 2023.

As such, we expect continued lower occupancy at our Sitka Lodge in the near-term until subsequent phases of the LNGC project are approved and commence, or additional construction activity in the region, drive increased occupancy demand.

From a macroeconomic standpoint, LNG demand has continued to grow, reinforcing the need for the global LNG industry to expand access to natural gas.

Evolving government energy policies around the world have amplified support for cleaner energy supply, creating more opportunities for natural gas and LNG.

The conflict between Russia/Ukraine and Israel/Hamas has further highlighted the need for secure natural gas supply globally, particularly in Europe.

Accordingly, additional investment in LNG supply will be needed to meet the resulting expected long-term LNG demand growth.

Currently, Western Canada does not have any operational LNG export facilities.

LNG Canada (LNGC), a joint venture among Shell Canada Energy, an affiliate of Shell plc (40 percent), and affiliates of PETRONAS, through its wholly-owned entity, North Montney LNG Limited Partnership (25 percent), PetroChina (15 percent), Mitsubishi Corporation (15 percent) and Korea Gas Corporation (5 percent), is currently constructing a liquefaction and export facility in Kitimat, British Columbia (Kitimat LNG Facility).

The Kitimat LNG Facility is nearing completion and expected to be operational in 2024.

British Columbia LNG activity and related pipeline projects are a material driver of activity for our Sitka Lodge, as well as for our mobile assets, which were contracted to serve several designated portions of the related pipeline construction activity.

The majority of our contracted commitments associated with the Coastal GasLink Pipeline, the pipeline constructed to transport natural gas feedstock to LNGC, were completed in the fourth quarter of 2023.

The conflicts between Russia/Ukraine and in the Middle East have further highlighted the need for secure natural gas supply globally, particularly in Europe.

Accordingly, we expect additional investment in LNG supply will be needed to meet the resulting expected long-term LNG demand growth.

McClelland Lake Lodge.

We did not renew an expiring land lease associated with our McClelland Lake Lodge in Alberta, Canada, which expired in June 2023, in order to support our customer’s intent to mine the land where the lodge was located.

We did not renew our expiring land lease associated with our McClelland Lake Lodge in Alberta, Canada, which expired in June 2023, in order to support our customer’s intent to mine the land where the lodge was located.

In addition, the accompanying hospitality services contract at McClelland Lake Lodge expired in July 2023;

however, we continued to provide hospitality services to the customer at our other owned lodges through January 31, 2024 under a short-term take-or-pay commitment.

we continued to provide hospitality services to the customer at our other owned lodges through January 31, 2024, under a short-term take-or-pay commitment.

Subsequent to this date, we have continued to provide such services at our other lodges;

however, not pursuant to a take-or-pay commitment.

Our assets were demobilized and completely removed from the existing site in January 2024.

During the third quarter of 2023, we entered into a definitive agreement to sell our McClelland Lake Lodge assets to a U.S.-based mining project for approximately C$49 million, or US$36 million.

The transaction was completed in January 2024.

During the third and fourth quarters of 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.

In the first quarter of 2023, we sold our accommodation assets in Louisiana.

In addition, in the second half of 2022, we sold both our U.S.

wellsite services and offshore businesses.

During the third quarter of 2023, we entered into a definitive agreement to sell our McClelland Lake Lodge assets to a U.S.-based mining project for approximately C$49 million, or $36 million.

Our McClelland Lake Lodge assets were dismantled and completely removed from the existing site in January 2024.

During 2023, we recognized $14.2 million in dismantle costs and received $28.2 million in cash proceeds associated with the sale.

During the first quarter of 2024, the transaction was completed, and we recognized the remaining $1.0 million in dismantle costs and received the remaining $7.8 million in cash proceeds.

United States Business.

In the first quarter of 2023, we sold our accommodation assets in Louisiana, and in the second quarter of 2024, we sold the land at our Louisiana location.

Our remaining U.S.

business supports completion

activity in the Bakken.

oil completion activity will continue to be impacted by oil prices, pipeline capacity, federal energy policies and availability of capital to support exploration and production completion plans.

business, which supported completion activity in the Bakken, was closed in the fourth quarter of 2024 due to low activity levels.

Foreign Currency Exchange Rates.

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dollar reported financial results.

Our business has historically derived the vast majority of its revenues and operating income in Canada and Australia.

Our business has historically derived the vast majority of its revenues and operating income (loss) in Canada and Australia.

These revenues and profits/losses are translated into U.S.

dollars for U.S.

generally accepted accounting principles financial reporting purposes.

The following tables summarize the fluctuations in the exchange rates between the U.S.

dollars for financial reporting purposes under U.S.

generally accepted accounting principles.

The following summarizes the fluctuations in the exchange rates between the U.S.

dollar and each of the Canadian dollar and the Australian dollar:

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Capital Expenditures.

We continue to monitor the global economy, commodity prices, demand for crude oil, met coal, LNG and iron ore, inflation and the resultant impact on the capital spending plans of our customers in order to plan our business activities.

We continue to monitor the global economy, commodity prices, demand for met coal, crude oil, LNG and iron ore, inflation and the resultant impact on the capital spending plans of our customers in order to plan our business activities.

We currently expect that our 2025 capital expenditures will be in the range of approximately $25 million to $30 million, compared to 2024 capital expenditures of $26.1 million.

Our 2023 capital expenditures included approximately $10 million related to village enhancements in Australia, for which our customer has reimbursed us, resulting in a net negligible cash flow impact in 2023 for these expenditures.

We may adjust our capital expenditure plans in the future as we continue to monitor customer activity.

See “Liquidity and Capital Resources ” below for further discussion of 2024 and 2023 capital expenditures.

See “Liquidity and Capital Resources ” below for further discussion on 2025 and 2024 capital expenditures.

Results of Operations

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($ in thousands)

Canada $ 352,795 $ 395,997 $ (43,202)

Australia $ 426,956 $ 336,763 $ 90,193

Canada 245,087 352,795 (107,708)

Other 10,079 11,247 (1,168)

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Cost of sales and services

Canada 277,067 293,576 (16,509)

Australia 315,374 243,011 72,363

Canada 207,135 277,067 (69,932)

Other 10,158 10,209 (51)

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Other income 517 13,881 (13,364)

Income before income taxes 40,363 10,732 29,631

Income (loss) before income taxes (5,937) 40,363 (46,300)

Income tax expense (12,492) (10,633) (1,859)

Net income 29,730 6,330 23,400

Net income (expense) attributable to noncontrolling interest (427) 2,333 (2,760)

Net income attributable to Civeo Corporation 30,157 3,997 26,160

Dividends attributable to Class A preferred shares — 1,771 (1,771)

Net income attributable to Civeo common shareholders $ 30,157 $ 2,226 $ 27,931

Net income (loss) (18,429) 29,730 (48,159)

Net expense attributable to noncontrolling interest (1,362) (427) (935)

Net income (loss) attributable to Civeo Corporation $ (17,067) $ 30,157 $ (47,224)

We reported net loss attributable to Civeo for 2024 of $17.1 million, or $1.19 per diluted share.

As further discussed below, net loss included $5.7 million of net gains associated with the sale of McClelland Lake Lodge in Canada and a $11.6 million pre-tax loss resulting from the impairment of fixed assets included in Impairment expense.

We reported net income attributable to Civeo for 2023 of $30.2 million, or $2.01 per diluted share.

As further discussed below, net income included (i) $28.3 million of net gains associated with the sale of the McClelland Lake Lodge in Canada and (ii) a $1.4 million pre-tax loss resulting from the impairment of fixed assets included in Impairment expense.

We reported net income attributable to Civeo for 2022 of $2.2 million, or $0.21 loss per diluted share.

As further discussed below, net income included a $5.7 million pre-tax loss resulting from the impairment of fixed assets included in Impairment expense.

Consolidated revenues increased $3.8 million, or 1%, in 2023 compared to 2022.

This increase was primarily due to (i) increased occupancy at our Civeo owned villages in the Australian Bowen Basin and Gunnedah Basin and (ii) increased activity at our integrated services villages in Western Australia.

These items were partially offset by (i) decreased mobile asset activity from pipeline projects in Canada, (ii) lower billed rooms at our Canadian lodges, (iii) reduced activity in the U.S.

operations due to the sale of our wellsite and offshore businesses in the second half of 2022 and (iv) a weaker Australian and Canadian dollar relative to the U.S.

dollar in 2023 compared to 2022.

See the discussion of segment results of operations below for further information.

As further discussed below, net income included $28.3 million of net gains associated with the sale of the McClelland Lake Lodge in Canada and a $1.4 million pre-tax loss resulting from the impairment of fixed assets included in Impairment expense.

Consolidated revenues decreased $18.7 million, or 3%, in 2024 compared to 2023.

This decrease was primarily due to reduced mobile asset activity from pipeline projects in Canada which were largely completed in 2023 and lower year-over-year occupancy at certain lodges in Canada.

These items were partially offset by increased activity at our Civeo owned villages in the Australian Bowen Basin and new business in our integrated services villages in Western Australia.

See below for further discussion of segment results of operations.

Cost of Sales and Services.

Our consolidated cost of sales and services increased $2.4 million, or 0.4%, in 2024 compared to 2023.

This increase was primarily due to (i) increased occupancy at our Civeo owned villages in the Australian

Bowen Basin and Gunnedah Basin, (ii) increased activity at our integrated services villages in Western Australia and (iii) increased operating costs due to inflationary pressures in Australia.

These items were partially offset by (i) reduced activity in the U.S.

operations due to the sale of our wellsite and offshore businesses in the second half of 2022, (ii) lower costs related to reduced mobile asset activity in Canada, (iii) lower billed rooms at our Canadian lodges and (iv) a weaker Australian and Canadian dollar relative to the U.S.

dollar in 2023 compared to 2022.

See the discussion of segment results of operations below for further information.

This increase was primarily due to increased occupancy at our Civeo owned villages in the Australian Bowen Basin and new business in our integrated services villages in Western Australia and the associated overhead costs.

These items were partially offset by the decrease in cost of sales and services largely driven by reduced mobile asset activity from pipeline projects in Canada which were largely completed in 2023 and lower costs at certain lodges in Canada due to reduced occupancy.

See below for further discussion of segment results of operations.

Selling, General and Administrative Expenses.

SG&A expense increased $0.7 million, or 1%, in 2024 compared to 2023.

This increase was primarily due to higher compensation expense of $2.4 million, higher information technology expense of $2.3 million and higher incentive compensation costs of $2.0 million.

The increase in compensation expense was primarily due to increased staff and recruitment costs.

The increase in information technology expense was related to ongoing investment in our newly implemented human capital management (HCM) system and set-up costs incurred in a cloud computing arrangement for the HCM system, which are being amortized through SG&A expense instead of depreciation and amortization expense.

These items were partially offset by lower share-based compensation expense of $3.9 million and a weaker Australian and Canadian dollar relative to the U.S.

dollar in 2023 compared to 2022 resulted in a $2.1 million decrease in SG&A expense.

The decrease in share-based compensation expense was due to a relative decrease in our share price during 2023 compared to 2022.

This increase was primarily due to higher compensation expense of $5.4 million, higher professional fees of $2.6 million and higher travel and entertainment costs of $0.9 million.

The increase in compensation expense was primarily due to $1.1 million in severance costs related to the departure of our former Chief Financial Officer, other severance costs and increased staff and associated recruitment costs.

These items were partially offset by lower incentive compensation costs of $5.6 million, lower share-based compensation expense of $2.8 million and a weaker Australian and Canadian dollar relative to the U.S.

dollar in 2024 compared to 2023.

The decrease in share-based compensation expense was primarily due to forfeitures, reduced performance share expense due to a lower probability of achieving performance criteria during 2024 compared to 2023 and changes in our share price during 2024 compared to 2023.

Depreciation and Amortization Expense.

Depreciation and amortization expense decreased $7.1 million, or 9%, in 2024 compared to 2023.

The decrease was primarily due to (i) the sale of our wellsite and offshore businesses in the U.S.

in the second half of 2022, (ii) certain assets becoming fully depreciated in Canada in the second quarter of 2023 and (iii) lower depreciation and amortization expense due to a weaker Australian and Canadian dollar relative to the U.S.

The decrease was primarily due to certain assets becoming fully depreciated in Canada, including the McClelland Lake Lodge, in 2023 and lower depreciation and amortization expense due to a weaker Australian and Canadian dollar relative to the U.S.

dollar in 2024 compared to 2023.

This was partially offset by the shortening of the useful lives on certain assets in Canada, including the McClelland Lake Lodge.

These items were partially offset by higher depreciation and amortization expense due to additional property, plant and equipment placed in service during 2024.

Impairment Expense.

We recorded pre-tax impairment expense of $1.4 million in 2023 associated with long-lived assets in the U.S.

We recorded pre-tax impairment expense of $5.7 million in 2022 associated with long-lived assets in the U.S.

and our Australian reporting unit.

We recorded pre-tax impairment expense of $11.6 million in 2024 associated with long-lived assets in Australia, Canada and the U.S.

We recorded pre-tax impairment expense of $1.4 million in 2023 associated with long-lived assets in Australia and the U.S.

See Note 4 - Impairment Charges to the notes to the consolidated financial statements included in Item 8 of this annual report for further discussion.

Gain on Sale of McClelland Lake Lodge Assets, net.

We recorded $18.6 million in 2023 related to net gains associated with the sale of the McClelland Lake Lodge.

The remaining net gains related to the sale of the McClelland Lake Lodge will be recognized in the first quarter of 2024.

We recorded $5.7 million and $18.6 million in net gains associated with the sale of the McClelland Lake Lodge in 2024 and 2023, respectively.

Operating Income.

Operating income increased $22.5 million, or 132%, in 2023 compared to 2022 primarily due to a net gain on sale of McClelland Lake Lodge assets, higher activity levels in Australia and lower depreciation and amortization and impairment expenses in 2023 compared to 2022.

These items were partially offset by reduced mobile asset activity in Canada and increased operating costs due to inflationary pressures in 2023 compared to 2022.

Interest (Expense) Income, net.

Net interest expense increased $1.6 million, or 14%, in 2023 compared to 2022 primarily related to higher interest rates on credit facility borrowings during 2023 compared to 2022, partially offset by lower average debt levels.

Operating income decreased $38.2 million, or 97%, in 2024 compared to 2023 primarily due to reduced mobile asset activity and lower lodge occupancy in Canada, higher impairment expenses and lower gain on sale of McClelland Lake Lodge assets in 2024 compared to 2023.

These items were partially offset by higher activity levels in Australia and lower depreciation and amortization expense in 2024 compared to 2023.

Interest Expense, net.

Net interest expense decreased $5.2 million, or 40%, in 2024 compared to 2023 primarily related to lower average debt levels during 2024 compared to 2023, which decreased approximately 35%.

Other Income.

Consolidated other income increased $8.7 million, or 170%, in 2023 compared to 2022.

Consolidated other income decreased $13.4 million, or 96%, in 2024 compared to 2023.

Other income in 2023 included $9.7 million in reimbursements associated with the dismantlement of the McClelland Lake Lodge.

In addition, 2023 included gains related to the sale of our Acadian Acres accommodation assets in the U.S.

and a gain on the settlement of an ARO in Canada.

Other income in 2022 included $4.7 million in gains on the sale of assets primarily related to our Kambalda village and undeveloped land holdings in Australia, our wellsite and offshore businesses in the U.S.

and various mobile assets across Canada, Australia and the U.S.

Income Tax (Expense) Benefit.

Our income tax expense for 2023 totaled $10.6 million, or 26.3% of pretax income, compared to an expense of $4.4 million, or 41.0% of pretax income for 2022.

Our effective tax rate for 2023 and 2022 was higher than the Canadian federal statutory rate of 15%, primarily due to pre-tax income in Australia being taxed at the higher Australian income tax rate of 30%.

Additionally, due to the full valuation allowances maintained in both Canada and the U.S., no tax expense or benefit was recorded related to pre-tax income in Canada and the U.S.

and a gain on the settlement of asset retirement obligation in Canada.

Other income in 2024 included $0.7 million in gains on sale of various assets in Canada and Australia.

Income Tax Expense.

Our income tax expense for 2024 totaled $12.5 million, or (210.4)% of pretax loss, compared to an expense of $10.6 million, or 26.3% of pretax income for 2023.

Our effective tax rate for 2024 was lower than the Canadian federal statutory rate of 15% primarily due to pre-tax losses in Canada with no corresponding tax benefit.

Our effective tax rate for 2023 was higher than the Canadian federal statutory rate of 15%, primarily due to pre-tax income in Australia being taxed at the higher Australian income tax rate of 30%.

Full valuation allowances are maintained against net deferred tax assets in both Canada and the U.S.

In 2024, the tax benefit in Canada was offset by an increase to the valuation allowance of $8.5 million and a deferred tax benefit in Australia was offset by an increase to the valuation allowance of $0.6 million.

In 2023, tax expense in Canada and the U.S.

was offset by a valuation allowance release of $1.7 million and $0.8 million, respectively.

In 2022, tax expense in Canada

was offset by a valuation allowance release of $0.6 million and the tax benefit in the U.S.

was offset by an increase to the valuation allowance of $1.0 million.

Other Comprehensive Income (Loss).

Other comprehensive income increased $28.0 million in 2023 compared to 2022 primarily as a result of foreign currency translation adjustments due to changes in the Canadian and Australian dollar exchange rates compared to the U.S.

Other comprehensive income decreased $28.6 million in 2024 compared to 2023 primarily as a result of foreign currency translation adjustments due to changes in the Canadian and Australian dollar exchange rates compared to the U.S.

The Canadian dollar exchange rate compared to the U.S.

dollar increased 2.4% in 2023 compared to a 6.4% decrease in 2022.

dollar decreased 8.1% in 2024 compared to a 2.4% increase in 2023.

The Australian dollar exchange rate compared to the U.S.

dollar increased 0.2% in 2023 compared to a 6.5% decrease in 2022.

dollar decreased 9.0% in 2024 compared to a 0.2% increase in 2023.

Segment Results of Operations – Australian Segment

2024 2023 Change

Revenues ($ in thousands)

Accommodation and other services revenue (1)

$ 196,684 $ 177,834 $ 18,850

Food service and other services revenue (2)

230,272 158,929 71,343

Total revenues $ 426,956 $ 336,763 $ 90,193

Cost of sales ($ in thousands)

Accommodation and other services cost $ 94,344 $ 85,461 $ 8,883

Food service and other services cost 208,627 148,599 60,028

Indirect other cost 12,403 8,951 3,452

Total cost of sales and services $ 315,374 $ 243,011 $ 72,363

Gross margin as a % of revenues 26.1 % 27.8 % (1.8) %

Average daily rate for villages (3)

$ 78 $ 75 $ 3

Total billed rooms for villages (4)

2,524,108 2,371,763 152,345

Australian dollar to U.S.

dollar $ 0.660 $ 0.665 $ (0.005)

(1) Includes revenues related to village rooms and hospitality services for owned rooms for the periods presented.

(2) Includes revenues related to food service and other services, including facilities management, for the periods presented.

(3) Average daily rate is based on billed rooms and accommodation and other services revenue.

(4) Billed rooms represents total billed days for owned assets for the periods presented.

Our Australian segment reported revenues in 2024 that were $90.2 million, or 27%, higher than in 2023.

The increase in the Australian segment was driven by increased activity at our Civeo owned villages in the Bowen Basin and new business in our integrated services villages in Western Australia.

Billed rooms in Civeo-owned villages were up 6.4% in 2024 due to increased activity in the Bowen Basin, Western Australia and Gunnedah Basin coupled with recent contract renewals and extensions.

Our Australian segment cost of sales and services increased $72.4 million, or 30%, in 2024 compared to 2023.

The increase in cost of sales and services was largely driven by increased occupancy at our Civeo owned villages in the Bowen Basin and new business in our integrated services villages in Western Australia and the associated overhead costs.

Our Australian segment gross margin as a percentage of revenues decreased from 27.8% in 2023 to 26.1% in 2024.

This decrease was primarily driven by an increased relative revenue contribution from our integrated services business, which has a service-only business model and therefore generates lower overall gross margins than our accommodation business.

The reduced gross margin was partially offset by improved profitability across our integrated services villages in 2024.

Segment Results of Operations – Canadian Segment

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Revenues ($ in thousands)

Accommodation revenue (1)

Accommodation and other services revenue (1)

$ 214,774 $ 266,926 $ (52,152)

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Cost of sales and services ($ in thousands)

Accommodation cost $ 195,843 $ 204,592 $ (8,749)

Accommodation and other services cost $ 164,089 $ 195,843 $ (31,754)

Mobile facility rental cost 4,940 49,073 (44,133)

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(3) Includes revenues related to food service, laundry and water and wastewater treatment services for the periods presented.

(4) Average daily rate is based on billed rooms and accommodation revenue.

(4) Average daily rate is based on billed rooms and accommodation and other services revenue.

(5) Billed rooms represents total billed days for owned assets for the periods presented.

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dollar by 1.5% in 2024 compared to 2023 resulted in a $3.1 million period-over-period decrease in revenues.

Excluding the impact of the weaker Canadian exchange rate, the revenue decrease was driven by (i) reduced mobile asset activity from pipeline projects and (ii) lower billed rooms at our lodges.

Excluding the impact of the weaker Canadian exchange rate, the revenue decrease was driven by (i) reduced mobile asset activity from pipeline projects which were largely completed in 2023, (ii) lower billed rooms at our oil sands lodges due to the timing and extent of maintenance activity by our customers, (iii) reduced occupancy associated with the sale of the McClelland Lake Lodge and (iv) reduced occupancy at our Sitka Lodge as the Kitimat LNG facility nears completion.

Our Canadian segment cost of sales and services decreased $69.9 million, or 25%, in 2024 compared to 2023.

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dollar by 1.5% in 2024 compared to 2023 resulted in a $2.8 million period-over-period decrease in cost of sales and services.

Excluding the impact of the weaker Canadian exchange rate, the decrease in cost of sales and services was driven by lower costs related to the reduced mobile asset activity and reduced activity at certain lodges.

Excluding the impact of the weaker Canadian exchange rate, the decrease in cost of sales and services was driven by lower costs related to the reduced mobile asset activity from pipeline projects which were largely completed in 2023 and lower costs at various lodges due to reduced occupancy levels.

Our Canadian segment gross margin as a percentage of revenues decreased from 21.5% in 2023 to 15.5% in 2024.

This decrease was primarily driven by reduced margins from our mobile asset activity as certain higher margin components were recognized over the initial contract terms through late 2022, with 2023 representing mobile camp activity winding down.

In addition, mobile camp demobilization costs of approximately $6.5 million were incurred in the second half of 2023.

Segment Results of Operations – Australian Segment

2023 2022 Change

Revenues ($ in thousands)

Accommodation revenue (1)

$ 177,834 $ 152,714 $ 25,120

Food service and other services revenue (2)

158,929 125,538 33,391

Total revenues $ 336,763 $ 278,252 $ 58,511

Cost of sales ($ in thousands)

Accommodation cost $ 85,461 $ 73,325 $ 12,136

Food service and other services cost 148,599 119,957 28,642

Indirect other cost 8,951 7,662 1,289

Total cost of sales and services $ 243,011 $ 200,944 $ 42,067

Gross margin as a % of revenues 27.8 % 27.8 % — %

Average daily rate for villages (3)

$ 75 $ 75 $ —

Total billed rooms for villages (4)

2,371,763 2,024,068 347,695

Australian dollar to U.S.

dollar $ 0.665 $ 0.695 $ (0.030)

(1) Includes revenues related to village rooms and hospitality services for owned rooms for the periods presented.

(2) Includes revenues related to food service and other services, including facilities management, for the periods presented.

(3) Average daily rate is based on billed rooms and accommodation revenue.

(4) Billed rooms represents total billed days for owned assets for the periods presented.

Our Australian segment reported revenues in 2023 that were $58.5 million, or 21%, higher than 2022.

The weakening of the average exchange rate for Australian dollars relative to the U.S.

dollar by 4.3% in the 2023 compared to 2022 resulted in a $14.9 million period-over-period decrease in revenues.

Excluding the impact of the weaker Australian exchange rate, the increase in the Australian segment was driven by increased activity at our Civeo owned villages in the Bowen Basin and Gunnedah Basin and our integrated services villages in Western Australia.

Our Australian segment cost of sales and services increased $42.1 million, or 21%, in 2023 compared to 2022.

The weakening of the average exchange rate for Australian dollars relative to the U.S.

dollar by 4.3% in 2023 compared to 2022 resulted in a $10.8 million period-over-period decrease in cost of sales and services.

Excluding the impact of the weaker Australian exchange rate, the increase in cost of sales and services was largely driven by increased occupancy at our Civeo owned villages in the Bowen Basin and Gunnedah Basin and our integrated services villages in Western Australia and increased operating costs due to inflationary pressures.

Our Australian segment gross margin as a percentage of revenues remained constant at 27.8% in both 2023 and 2022.

The increased revenue contribution in 2023 from our integrated services business, which has a service only-business model and therefore generates lower overall margins than our accommodation business, had a negative impact on margins in 2023.

This negative impact was offset by improved margins at Civeo owned villages in the Bowen Basin and Gunnedah Basin as a result of increased activity and improved margins in the integrated services business due to reduced costs realized from our inflation mitigation plan in the year.

This decrease was primarily driven by reduced mobile asset activity from pipeline projects which were largely completed in 2023.

In addition, margin at our lodges were lower due to reduced efficiencies at lower occupancy levels.

Liquidity and Capital Resources

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In addition, capital has been used to repay debt and fund strategic business acquisitions.

In the future, capital may be required to move lodges from one site to another.

Historically, our primary sources of funds have been available cash, cash flow from operations, borrowings under our Credit Agreement and proceeds from equity issuances.

In the future, we may seek to access the debt and equity capital markets from time to time to raise additional capital, increase liquidity, fund acquisitions or refinance debt.

In the future, capital may be required to move

lodges from one site to another, and we may seek to access the debt and equity capital markets from time to time to raise additional capital, increase liquidity, fund acquisitions or refinance debt.

The following summarizes our material future cash requirements at December 31, 2024, and the effect such obligations are expected to have on our liquidity and cash flow over the next five years (in thousands):

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Total contractual cash obligations $ 136,222 $ 15,901 $ 14,425 $ 50,327 $ 55,569

(1) Interest payments due under the Credit Agreement, which matures on September 8, 2025;

(1) Interest payments due under the Credit Agreement, which matures on August 8, 2028;

based on an interest rate of 6.1% for Canadian revolver borrowings.

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We have not entered into any material leases subsequent to December 31, 2024.

The following table summarizes our consolidated liquidity position as of December 31, 2023 and 2022 (in thousands):

The following summarizes our consolidated liquidity position as of December 31, 2024 and 2023 (in thousands):

Lender commitments $ 245,000 $ 200,000

Reductions in availability (1)

Borrowings against revolving credit capacity (43,299) (65,554)

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Total available liquidity $ 202,170 $ 136,416

(1) As of December 31, 2024, $3.6 million of our borrowing capacity under the Credit Agreement could not be utilized in order to maintain compliance with the maximum leverage ratio financial covenant in the Credit Agreement.

Cash totaling $83.5 million was provided by operations during 2024 compared to $96.6 million provided by operations during 2023.

During 2023 and 2022, net cash used for working capital was $1.6 million and $13.9 million, respectively.

The decrease in cash used for working capital in 2023 compared to 2022 is largely due to payments received from a customer for village enhancements in Australia and other working capital changes driven by timing of receipts and payments during 2023 compared to 2022.

During 2024 and 2023, $31.8 million was provided by working capital and $1.6 million was used in working capital, respectively.

The year-over-year increase in cash provided by working capital in 2024 compared to 2023 is largely due to the collection of holdbacks in Canada related to the completion of mobile asset pipeline projects during 2024 compared to 2023, partially offset by decreased accounts payable and accrual balances.

Cash used in investing activities during 2024 totaled $14.9 million compared to cash used in investing activities during 2023 of $14.5 million.

The increase in cash used in investing activities was primarily due to higher capital expenditures.

The increase in cash used in investing activities was primarily due to lower proceeds from the sale of property, plant and equipment, partially offset by lower capital expenditures.

We received net proceeds from the sale of property, plant and equipment of $11.0 million during 2024 related to the sale of our McClelland Lake Lodge accommodation assets in Canada and the sale of our Louisiana land in the U.S., compared to $16.7 million during 2023 primarily related to the sale of our McClelland Lake Lodge accommodation assets in Canada and Louisiana accommodation assets in the U.S.

Capital expenditures totaled $26.1 million and $31.6 million during 2024 and 2023, respectively.

Capital expenditures in both periods were primarily related to maintenance.

In addition, our 2023 capital expenditures included approximately $10 million related to customer-funded infrastructure upgrades in Australia.

We received net proceeds from the sale of property, plant and equipment of $16.7 million during 2023 primarily related to the sale of our McClelland Lake Lodge accommodation assets in Canada and Acadian Acres accommodation assets in the U.S., compared to $16.3 million during 2022 primarily related to the sale of our Kambalda village and undeveloped land holdings in Australia, unused corporate office space and various mobile assets in Canada and our wellsite and offshore businesses in the U.S.

We expect our capital expenditures for 2024 to be in the range of $30 million to $35 million, which excludes any unannounced and uncommitted projects, the spending for which is contingent on obtaining customer contracts or commitments.

In addition, our 2024 capital expenditures included approximately $2.9 million related to customer-funded infrastructure upgrades in Australia compared to $10.0 million in 2023.

We expect our capital expenditures for 2025 to be in the range of $25 million to $30 million, which excludes any unannounced and uncommitted projects, the spending for which is contingent on obtaining customer contracts or commitments or attractive risk-adjusted economics.

Whether planned expenditures will actually be spent in 2025 depends on industry conditions, project approvals and schedules, customer room commitments and project and construction timing.

We expect to fund these capital expenditures with available cash, cash flow from operations and revolving credit borrowings under our Credit Agreement.

The foregoing capital expenditure forecast does not include any funds for strategic acquisitions, which we could pursue should the transaction economics be attractive enough to us compared to the current capital allocation priorities of debt reduction and return of capital to shareholders.

fund these capital expenditures with available cash, cash flow from operations and revolving credit borrowings under our Credit Agreement.

The table below delineates historical capital expenditures split between expansionary and maintenance spending on our lodges and villages, mobile asset spending and other capital expenditures.

We classify capital expenditures for the development of rooms and central facilities at our lodges and villages as expansion capital expenditures.

Other capital expenditures in the table below relate to routine capital spending for support equipment, upgrades to infrastructure at our lodge and village properties and spending related to our manufacturing facilities, among other items.

Based on management’s judgment of capital spending classifications, we believe the following table represents the components of capital expenditures for the years ended December 31, 2023 and 2022 (in millions):

Other capital expenditures below relate to routine capital spending for support equipment, upgrades to infrastructure at our lodge and village properties and spending related to our manufacturing facilities, among other items.

Based on management’s judgment of capital spending classifications, we believe the following represents the components of capital expenditures for the years ended December 31, 2024 and 2023 (in millions):

Year Ended December 31,

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Total $ 10.5 $ 15.6 $ 26.1 $ 16.5 $ 15.1 $ 31.6

Expansion lodge and village spending in 2024 was related to costs associated with the customer-supported reactivation of our Buffalo Lodge in Canada and customer-funded infrastructure upgrades at three Australian villages.

Expansion lodge and village spending in 2023 was largely related to customer-funded infrastructure upgrades at three Australian villages.

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Mobile asset spending in 2023 was primarily related to an asset storage yard purchased in Canada.

Mobile asset spending in 2022 was primarily related to routine maintenance of our mobile assets in the U.S.

and Canadian markets.

Other maintenance and expansion spending in 2024 was primarily related to miscellaneous equipment and supplies to support the day-to-day operations at our accommodation and laundry facilities, purchases to support new contacts at our integrated services business in Australia and information technology infrastructure to support our business.

Other maintenance and expansion spending in 2023 was primarily related to miscellaneous equipment and supplies to support the day-to-day operations at our accommodation and laundry facilities and information technology infrastructure to support our business.

Other maintenance and expansion spending in 2022 was primarily associated with mobilization of new sites at our integrated services business in Western Australia, purchases of miscellaneous equipment and supplies to support the day-to-day operations at our accommodation facilities and information technology infrastructure to support our business.

Cash used in financing activities during 2024 of $65.2 million was primarily due to (i) repurchases of our common shares of $29.6 million, (ii) dividend payments of $14.4 million, (iii) net repayments under our revolving credit facilities of $17.1 million, (iv) debt issuance costs of $3.0 million and (v) payments to settle tax obligations of $1.1 million.

Cash used in financing activities during 2023 of $86.8 million was primarily due to (i) net repayments under our revolving credit facilities of $37.8 million, (ii) repayments of term loan borrowings of $29.9 million, (iii) repurchases of our common shares of $11.6 million and (iv) dividend payments of $7.4 million.

Cash used in financing activities during 2022 of $79.7 million was primarily due to (i) repayments of term loan borrowings of $30.4 million, (ii) repurchases of our preferred shares and our common shares of $30.6 million and $14.2 million, respectively, (iii) net repayments under our revolving credit facilities of $3.4 million, (iv) settlement of tax obligations on vested shares under our share-based compensation plans of $1.0 million and (v) a cash dividend paid on our preferred shares in connection with the repurchase of $0.1 million.

The following table summarizes the changes in debt outstanding during 2023 (in thousands):

Canada Australia Total

The following summarizes the changes in debt outstanding during 2024 (in thousands):

Balance as of December 31, 2023 $ 65,554

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Repayments of borrowings under revolving credit facilities (301,431)

Repayments of term loans (29,899) — (29,899)

Translation (5,138)

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We believe that cash on hand and cash flow from operations will be sufficient to meet our anticipated liquidity needs for the next 12 months.

If our plans or assumptions change, including as a result of changes in our customers' capital spending or changes in the price of and demand for natural resources, or are inaccurate, or if we make acquisitions, we may need to raise additional capital.

additional capital.

Acquisitions have been, and our management believes acquisitions will continue to be, an element of our long-term business strategy.

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We may seek to fund all or part of any such efforts with proceeds from debt and/or equity issuances or may issue equity directly to the sellers.

Our ability to obtain capital for additional projects to implement

our growth strategy over the longer term will depend on our future operating performance, financial condition and, more broadly, on the availability of equity and debt financing.

Our ability to obtain capital for additional projects to implement our growth strategy over the longer term will depend on our future operating performance, financial condition and, more broadly, on the availability of equity and debt financing.

Capital availability will be affected by prevailing conditions in our industry, the global economy, the global financial markets and other factors, many of which are beyond our control.

In addition, any additional debt service requirements we take on could be based on higher interest rates and shorter maturities and could impose a significant burden on our results of operations and financial condition, and the issuance of additional equity securities could result in significant dilution to shareholders.

In August 2023, our Board authorized a common share repurchase program to repurchase up to 5.0% of our total common shares which are issued and outstanding, or 742,134 common shares, over a twelve month period.

In addition, our Board declared quarterly dividends of $0.25 per common share to shareholders of record as of close of business on September 15, 2023 and November 27, 2023.

Dividend payments of $3.7 million were made on both September 29, 2023 and December 18, 2023.

The dividends are eligible dividends pursuant to the Income Tax Act (Canada).

In September 2024, our Board authorized a common share repurchase program to repurchase up to 5.0% of our total common shares which are issued and outstanding, or 710,556 common shares, over a twelve-month period.

In addition, our Board declared quarterly dividends of $0.25 per common share to shareholders beginning in the third quarter of 2023.

Dividend payments of $14.3 million and $7.4 million were made to shareholders in 2024 and 2023, respectively.

These dividends are eligible dividends pursuant to the Income Tax Act (Canada).

See Note 16 – Share Repurchase Programs and Dividends to the notes to the consolidated financial statements included in Item 8 of this annual report for further discussion.

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.

As of December 31, 2024, the Credit Agreement provided for:

(i) a $245.0 million revolving credit facility scheduled to mature on August 8, 2028, allocated as follows:

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

subsidiaries, as borrowers;

(B) a $200.0 million senior secured revolving credit facility in favor of Civeo and certain of our U.S.

subsidiaries, as borrowers;

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

As of December 31, 2024, we had outstanding letters of credit of $0.3 million under the U.S.

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There can be no assurance that we will continue to pay a dividend in the future.

Critical Accounting Policies

Critical Accounting Policies and Estimates

Our consolidated financial statements in Item 8 of this annual report have been prepared in accordance with U.S.

GAAP, which require that management make numerous estimates and assumptions.

generally accepted accounting principles (GAAP), which require that management make numerous estimates and assumptions.

Actual results could differ from those estimates and assumptions, thus impacting our reported results of operations and financial position.

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• Killdeer Lodge – North Dakota

• Acadian Acres land – Louisiana

• Killdeer WWTP – this asset group represents a WWTP in Killdeer, North Dakota, which was constructed in early 2014

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

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

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

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

What changed 10-K

Item 7. Management’s Discussion and Analysis