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Item 5. Market for Registrant’s Common Equity

2021-02-25 compared with 2020-02-27 · 51 added, 33 removed, 86 unchanged (49% of the section changed)

Market for the Registrant’s Common Equity, Related Stockholder Matters and Issuer Purchases of Equity Securities

Market for Registrant’s Common Equity, Related Stockholder Matters and Issuer Purchases of Equity Securities

Our common stock is traded on the New York Stock Exchange (“NYSE”) under the symbol “HLX.” On February 19, 2021, the closing sale price of our common stock on the NYSE was $4.95 per share.

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(ii) the Philadelphia Oil Service Sector index (the “OSX”), a price-weighted index of leading oil service companies, assuming the reinvestment of dividends;

and (iii) a peer group selected by us (the “Peer Group”) consisting of the following companies:

Dril-Quip, Inc., Forum Energy Technologies, Inc., Frank’s International N.V., McDermott International, Inc., Newpark Resources, Inc., Noble Corporation plc, Oceaneering International, Inc., Oil States International, Inc., SEACOR Holdings Inc., Superior Energy Services Inc., TETRA Technologies, Inc., and Valaris plc.

and (iii) a peer group selected by us as of January 2020 (the “Peer Group”) consisting of the following companies:

ChampionX Corporation (formerly known as Apergy Corporation), Archrock, Inc., Baker Hughes Company, Core Laboratories N.V., DMC Global Inc., Dril-Quip, Inc., Bristow Group Inc.

(formerly known as Era Group Inc.), Exterran Corporation, Geospace Technologies Corporation, Halliburton Company, KLX Energy Services Holdings, Inc., Matrix Service Company, McDermott International, Inc., NOV Inc.

(formerly known as National Oilwell Varco, Inc.), Newpark Resources, Inc., Oceaneering International, Inc., Oil States International, Inc., ProPetro Holding Corp., RPC, Inc., Schlumberger Limited, SEACOR Holdings Inc., TechnipFMC plc, TETRA Technologies, Inc., and U.S.

Silica Holdings, Inc.

The returns of each member of the Peer Group have been weighted according to each individual company’s equity market capitalization as of December 31, 2020 and have been adjusted for the reinvestment of any dividends.

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As of December 31,

2015 2016 2017 2018 2019 2020

Helix $ 100.0 $ 167.7 $ 143.3 $ 102.9 $ 183.1 $ 79.8

Peer Group Index $ 100.0 $ 132.5 $ 111.4 $ 66.8 $ 75.1 $ 49.7

Oil Service Index $ 100.0 $ 101.0 $ 98.5 $ 54.0 $ 53.7 $ 31.1

S&P 500 $ 100.0 $ 113.5 $ 138.3 $ 132.2 $ 173.9 $ 205.8

Issuer Purchases of Equity Securities

purchased (1)

per share (c)

Total number of shares

purchased as part of publicly

announced program

announced program (d)

Maximum number of shares

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December 1 to December 31, 2020 24,316 4.19 — 6,913,705

24,316 $ 4.19 —

(1) Includes shares forfeited in satisfaction of tax obligations upon vesting of restricted shares.

Under the terms of our stock repurchase program, we may repurchase shares of our common stock in an amount equal to any equity granted to our employees, officers and directors under our share-based compensation plans, including share-based awards under our existing long-term incentive plans and shares issued to our employees under our Employee Stock Purchase Plan (Note 14), and such shares increases the number of shares available for repurchase.

(2) Under the terms of our stock repurchase program, we may repurchase shares of our common stock in an amount equal to any equity granted to our employees, officers and directors under our share-based compensation plans, including share-based awards under our existing long-term incentive plans and shares issued to our employees under our Employee Stock Purchase Plan (Note 14), and such shares increase the number of shares available for repurchase.

For additional information regarding our stock repurchase program, see Note 11.

In December 2019, we issued approximately 0.1 million shares of restricted stock to independent members of our Board.

In January 2020, we issued approximately 0.4 million shares of restricted stock to our executive officers, select management employees, and certain members of our Board who have elected to take their quarterly fees in stock in lieu of cash.

(3) In December 2020, we issued 204,546 shares of restricted stock to independent members of our Board.

In January 2021, we issued 14,249 shares of restricted stock to certain independent members of our Board who have elected to take their quarterly fees in stock in lieu of cash.

These issuances increase the number of shares available for repurchase under our stock repurchase program by a corresponding amount.

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Year Ended December 31,

2020 2019 2018 2017 2016

(in thousands, except per share amounts)

Statement of Operations Data:

Gross profit (loss) (1)

Net revenues $ 733,555 $ 751,909 $ 739,818 $ 581,383 $ 487,582

Gross profit 79,909 137,838 121,684 62,166 46,516

Income (loss) from operations (1)

Net income (loss), including noncontrolling interests (3)

Net income applicable to noncontrolling interests

Net income (loss) applicable to common shareholders

13,025 67,997 51,543 (1,130) (63,235)

Net income (loss) (2)

20,084 57,697 28,598 30,052 (81,445)

Net loss attributable to redeemable noncontrolling interests (2,090) (222) — — —

Net income (loss) attributable to common shareholders 22,174 57,919 28,598 30,052 (81,445)

Adjusted EBITDA (3)

155,260 180,088 161,709 107,216 89,544

Earnings (loss) per share of common stock:

Basic $ 0.13 $ 0.39 $ 0.19 $ 0.20 $ (0.73)

Diluted $ 0.13 $ 0.38 $ 0.19 $ 0.20 $ (0.73)

Weighted average common shares outstanding:

Amount in 2015 included impairment charges of $205.2 million for the Helix 534 , $133.4 million for the HP I and $6.3 million for certain capitalized vessel project costs.

Amount in 2016 included a $45.1 million goodwill impairment charge related to our robotics reporting unit.

Basic 148,993 147,536 146,702 145,295 111,612

Diluted 149,897 149,577 146,830 145,300 111,612

(1) Amount in 2020 included a $6.7 million goodwill impairment charge related to our U.K.

well intervention reporting unit.

well intervention reporting unit (Note 7).

Amount in 2016 included a $45.1 million goodwill impairment charge related to our robotics reporting unit.

(2) Amount in 2020 included a $9.2 million gain on extinguishment of long-term debt (Note 8), a $7.6 million net tax benefit as a result of the U.S.

Coronavirus Aid, Relief, and Economic Security Act (the “CARES Act”) and net deferred tax benefits of $8.3 million due to the reduction in the overall tax rate associated with two of our foreign subsidiaries (Note 9).

Amount in 2017 included a $51.6 million income tax benefit as a result of the U.S.

tax law changes enacted in December 2017 (Note 9).

Amount in 2015 included losses totaling $124.3 million related to our investments in Deepwater Gateway, L.L.C.

(“Deepwater Gateway”) and Independence Hub.

Amount in 2015 also included unrealized losses totaling $18.3 million on our foreign currency exchange contracts associated with the Grand Canyon , Grand Canyon II and Grand Canyon III chartered vessels.

Tax Cuts and Jobs Act (the “2017 Tax Act”).

(3) This is a non-GAAP financial measure.

See “Non-GAAP Financial Measures” below for an explanation of the definition and use of such measure as well as a reconciliation of these amounts to each year’s respective reported net income or loss.

2020 2019 2018 2017 2016

(in thousands)

Balance Sheet Data:

Working capital

Cash and cash equivalents and restricted cash $ 291,320 $ 262,561 $ 279,459 $ 266,592 $ 356,647

Net working capital (1)

246,338 153,508 259,440 186,004 336,387

Total assets 2,498,278 2,596,731 2,347,730 2,362,837 2,246,941

Long-term debt (1)

258,912 306,122 393,063 385,766 558,396

Total shareholders’ equity 1,740,496 1,699,591 1,617,779 1,567,393 1,281,814

(1) Current maturities of our long-term debt are included in net working capital and excluded from long-term debt.

Long-term debt is also net of unamortized debt discounts and debt issuance costs (Note 8).

Non-GAAP Financial Measures

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We define EBITDA as earnings before income taxes, net interest expense, gain or loss on extinguishment of long-term debt, net other income or expense, and depreciation and amortization expense.

We separately disclose our non-cash asset impairment charges, which, if not material, would be reflected as a component of our depreciation and amortization expense.

Because these impairment charges are material for certain period presented, we have reported them as a separate line item.

Non-cash goodwill impairment and non-cash gains and losses on equity investments are also added back if applicable.

To arrive at our measure of Adjusted EBITDA, we exclude gains and losses on disposition of assets, if any.

Non-cash impairment losses on goodwill and other long-lived assets and non-cash gains and losses on equity investments are also added back if applicable.

To arrive at our measure of Adjusted EBITDA, we exclude the gain or loss on disposition of assets and the general provision for current expected credit losses, if any.

In addition, we include realized losses from foreign currency exchange contracts not designated as hedging instruments and other than temporary loss on note receivable, which are excluded from EBITDA as a component of net other income or expense.

We define free cash flow as cash flows from operating activities less capital expenditures, net of proceeds from sale of assets.

In the following reconciliations, we provide amounts as reflected in our accompanying consolidated financial statements unless otherwise noted.

In the following reconciliations, we provide amounts as reflected in the consolidated financial statements unless otherwise noted.

The reconciliation of our net income (loss) to EBITDA and Adjusted EBITDA is as follows (in thousands):

Year Ended December 31,

2020 2019 2018 2017 2016

Net income (loss) $ 20,084 $ 57,697 $ 28,598 $ 30,052 $ (81,445)

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Net interest expense 28,531 8,333 13,751 18,778 31,239

Loss on extinguishment of long-term debt

(Gain) loss on extinguishment of long-term debt (9,239) 18 1,183 397 3,540

Other (income) expense, net (4,724) (1,165) 6,324 1,434 (3,510)

Depreciation and amortization 133,709 112,720 110,522 108,745 114,187

Asset impairments (2)

Goodwill impairments 6,689 — — — 45,107

Gain (loss) on equity investments (4)

Gain (loss) on equity investment (264) (1,613) 3,430 1,800 1,674

EBITDA 156,085 183,849 166,208 110,782 98,322

(Gain) loss on disposition of assets, net (889) — (146) 39 (1,290)

General provision for current expected credit losses 746 — — — —

Realized losses from foreign exchange contracts not designated as hedging instruments (682) (3,761) (3,224) (3,605) (7,488)

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Adjusted EBITDA $ 155,260 $ 180,088 $ 161,709 $ 107,216 $ 89,544

Amount in 2015 includes unrealized losses totaling $18.3 million on our foreign currency exchange contracts associated with the Grand Canyon , Grand Canyon II and Grand Canyon III chartered vessels.

Amount in 2015 reflects asset impairment charges for the Helix 534, the HP I and certain capitalized vessel project costs.

Amount in 2016 reflects a goodwill impairment charge related to our robotics reporting unit.

Amount in 2015 reflects a goodwill impairment charge related to our U.K.

well intervention reporting unit.

Amount in 2015 primarily reflects losses from our share of impairment charges that Deepwater Gateway and Independence Hub recorded in December 2015 and the write-offs of the remaining capitalized interest related to these equity investments.

The reconciliation of our cash flows from operating activities to free cash flow is as follows (in thousands):

Year Ended December 31,

2020 2019 2018 2017 2016

Cash flows from operating activities $ 98,800 $ 169,669 $ 196,744 $ 51,638 $ 38,714

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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 5. Market for Registrant’s Common Equity