What changed in this filing

/stocks — the workspaceLOADING

Item 2. Management’s Discussion and Analysis

2021-07-28 compared with 2021-04-28 · 107 added, 58 removed, 253 unchanged (39% of the section changed)

18 unchanged sentences

● statements regarding general economic or political conditions, whether international, national or in the regional or local markets in which we do business;

● statements regarding our ability to retain our senior management and other key employees;

● statements regarding our human capital resources, including our ability to retain our senior management and other key employees;

● statements regarding the underlying assumptions related to any projection or forward-looking statement;

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● the results of our continuing efforts to control costs and improve performance;

● the success of our risk management activities;

● the success of our risk management activities, including with respect to our cybersecurity initiatives;

● the effects of competition;

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● the effectiveness of our future hedging activities;

● the potential impact of a loss of one or more key employees;

● the potential impact of a negative event related to our human capital resources, including a loss of one or more key employees;

● the impact of general, market, industry or business conditions.

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Should one or more of the risks or uncertainties described in this Quarterly Report occur, or should underlying assumptions prove incorrect, our actual results and plans could differ materially from those expressed in any forward-looking statements.

We caution you not to place undue reliance on the forward-looking statements.

We caution you not to place undue reliance on forward-looking statements.

Forward-looking statements are only as of the date they are made, and other than as required under the securities laws, we assume no obligation to update or revise these forward-looking statements, all of which are expressly qualified by the statements in this section, or provide reasons why actual results may differ.

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● domestic and international tax laws, regulations and policies.

Crude oil prices historically have been volatile, which volatility has been exacerbated recently due to the ongoing COVID-19 pandemic as well as actions taken by OPEC+ nations.

Prices have since recovered to pre-COVID-19 levels, but their stability and recovery remain uncertain.

Crude oil prices historically have been volatile, which has been exacerbated recently due to the ongoing COVID-19 pandemic as well as actions taken by OPEC+ nations.

Prices have since recovered to pre-COVID-19 levels, but their stability remain uncertain.

The decline in oil prices in 2020 and the volatility and uncertainty in prices have caused oil and gas operators to drastically reduce spending (on both operational activities and capital projects), which has decreased the demand and rates for services provided by offshore oil and gas services providers.

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The ongoing COVID-19 pandemic has resulted in a new period of market weakness.

While the full impact of the COVID-19 pandemic, including the duration of the decrease in economic activity and the resulting impact on the demand and price of oil, remains unknown, we expect that the impact of COVID-19 on the industry will continue to be felt through 2021 and possibly longer.

We believe the uncertainty and other conditions of the current environment will make it more difficult for us to secure long-term contracts for our vessels and systems, as operators have been less willing to commit to future spending.

While the full impact of the COVID-19 pandemic, including the duration of the decrease in economic activity and the resulting impact on the demand and price of oil, remains unknown, we expect that the impact of COVID-19 on our industry will continue to be felt through 2021 and possibly longer.

The uncertainty and other conditions of the current environment have made it more difficult for us to renew or secure long-term contracts for our vessels and systems, as operators have been less willing to commit to future spending.

These developments have also impacted, and are expected to continue to impact, many other aspects of our industry and the global economy, including limiting access to and use of capital across various sources and markets, disrupting supply chains and increasing costs, and negatively affecting human capital resources including complicating offshore crew changes due to health and travel restrictions as well as the overall health of the global workforce.

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Most if not all of our oil and gas customers have cut their spending, which has reduced the demand and rates for the services offered to our oil and gas customers.

We warm-stacked two of our vessels in 2020 as a result of decreased demand and government lock-downs, and the Seawell in the North Sea remains stacked to date.

The COVID-19 pandemic continues to pose challenges with, and increase costs related to, our supply chain, logistics and human capital resources, including minimizing the direct impact of COVID-19 on our offshore workforce and challenges with offshore crew changes due to travel restrictions and quarantine measures.

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Moreover, as the subsea tree base expands and ages, the demand for P&A services should persist.

Our well intervention and robotics operations are intended to service the lifecycle of an oil and gas field as well as to provide P&A services at the end of the life of a field as required by governmental regulations.

Our well intervention and robotics operations service the lifecycle of an oil and gas field and provide P&A services at the end of the life of a field as required by governmental regulations.

We believe that we have a competitive advantage in performing well intervention services efficiently and we believe that fundamentals for our business remain favorable over the longer term as the need to prolong well life in oil and gas production and safely decommission end of life wells are primary drivers of demand for our services.

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We provide services primarily in deepwater in the Gulf of Mexico, Brazil, North Sea, Asia Pacific and West Africa regions.

As of March 31, 2021, our consolidated backlog that is supported by written agreements or contracts totaled $358 million, of which $239 million is expected to be performed over the remainder of 2021.

The substantial majority of our backlog is associated with our Well Intervention segment.

As of March 31, 2021, our well intervention backlog was $162 million, all of which is expected to be performed over the remainder of 2021.

Our contract with BP to provide well intervention services with our Q5000 semi-submersible vessel, our agreements with Petrobras to provide well intervention services offshore Brazil with the Siem Helix 1 and Siem Helix 2 chartered vessels, and our fixed fee agreement for the HP I represent approximately 57% of our total backlog as of March 31, 2021.

As of June 30, 2021, our consolidated backlog that is supported by written agreements or contracts totaled $291 million, of which $153 million is expected to be performed over the remainder of 2021.

Our agreements with Petrobras to provide well intervention services offshore Brazil with the Siem Helix 1 and Siem Helix 2 chartered vessels and our fixed fee agreement for the HP I represent approximately 51% of our total backlog as of June 30, 2021.

Backlog is not necessarily a reliable indicator of revenues derived from these contracts as services may be added or subtracted;

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Three Months Ended

Income tax provision (benefit)

Six Months Ended

Net income (loss)

Income tax benefit

Net interest expense

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Goodwill impairment

General provision for current expected credit losses

(Gain) loss on disposition of assets, net

General provision (release) for current expected credit losses

Realized losses from foreign exchange contracts not designated as hedging instruments

1 unchanged sentence

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

Three Months Ended

Six Months Ended

Cash flows from operating activities

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Free cash flow

Comparison of Three Months Ended March 31, 2021 and 2020

Comparison of Three Months Ended June 30, 2021 and 2020

The following table details various financial and operational highlights for the periods presented (dollars in thousands):

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(2) Represents the average utilization rate, which is calculated by dividing the total number of days the vessels or robotics assets generated revenues by the total number of available calendar days in the applicable period.

The average utilization rates of chartered robotics vessels during the three-month periods ended March 31, 2021 and 2020 included three and 272 spot vessel days, respectively, at near full utilization.

The average utilization rates of chartered robotics vessels during the three-month periods ended June 30, 2021 and 2020 included 61 and 342 spot vessel days, respectively, at near full utilization.

(3) Consists of ROVs, trenchers and ROVDrill.

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Net Revenues.

Our consolidated net revenues for the three-month period ended March 31, 2021 decreased by 10% as compared to the same period in 2020, reflecting lower revenues from our Well Intervention and Robotics segments, offset in part by higher revenues from our Production Facilities segment.

Our Well Intervention revenues decreased by 5% for the three-month period ended March 31, 2021 as compared to the same period in 2020, primarily reflecting lower vessel utilization in the North Sea and West Africa during the quarter, offset in part by higher utilization in the Gulf of Mexico.

Utilization in the Gulf of Mexico during the first quarter 2020 was lower due to our scheduled regulatory certification inspections for the Q4000 and the Q5000 .

Robotics revenues decreased by 37% for the three-month period ended March 31, 2021 as compared to the same period in 2020, primarily reflecting a reduction in vessel days as well as decreased utilization of ROVs and ROVDrill, offset in part by an increase in trenching activities.

Our results included 165 vessel days and 72 trenching days during the three-month period ended March 31, 2021 as compared to 405 vessel days and 42 trenching days during the same period in 2020.

Our Production Facilities revenues increased by 6% for the three-month period ended March 31, 2021 as compared to the same period in 2020, primarily reflecting higher oil and gas production revenues.

Our consolidated net revenues for the three-month period ended June 30, 2021 decreased by 19% as compared to the same period in 2020, reflecting lower revenues from our Well Intervention and Robotics segments, offset in part by higher revenues from our Production Facilities segment.

Our Well Intervention revenues decreased by 9% for the three-month period ended June 30, 2021 as compared to the same period in 2020, primarily reflecting lower vessel utilization and rates due to the completion of our long-term contract on the Q5000 in the Gulf of Mexico and our short-term extension at lower rates on the Siem Helix 1 in Brazil during the quarter, offset in part by higher utilization on the Q7000 in Nigeria.

Our Robotics revenues decreased by 38% for the three-month period ended June 30, 2021 as compared to the same period in 2020, primarily reflecting fewer vessel days due to a significant drop in spot vessel days attributable to site clearance projects in the North Sea as well as a reduction in trenching activities.

Our results included 236 vessel days and 84 trenching days during the three-month period ended June 30, 2021 as compared to 499 vessel days and 119 trenching days during the same period in 2020.

Our Production Facilities revenues increased by 5% for the three-month period ended June 30, 2021 as compared to the same period in 2020, primarily reflecting higher revenues from the new HFRS agreement that went into effect on April 1, 2021, offset in part by lower oil and gas production.

Gross Profit (Loss).

Our consolidated gross profit increased by $12.6 million for the three-month period ended March 31, 2021 as compared to the same period in 2020, primarily reflecting higher gross profit in our Well Intervention and Production Facilities segments, offset in part by higher gross loss in our Robotics segment.

The gross profit related to our Well Intervention segment increased by $10.0 million for the three-month period ended March 31, 2021 as compared to the same period in 2020, primarily reflecting higher revenues on the Q5000 and cost reduction efforts associated with lower utilization in the North Sea and West Africa during idle periods.

The gross loss related to our Robotics segment increased by $0.5 million for the three-month period ended March 31, 2021 as compared to the same period in 2020, primarily reflecting lower revenues, offset in part by lower operating costs.

The gross profit related to our Production Facilities segment increased by $3.0 million for the three-month period ended March 31, 2021 as compared to the same period in 2020, primarily reflecting higher oil and gas production revenues and a reduction in direct costs.

Our consolidated gross profit decreased by $26.4 million for the three-month period ended June 30, 2021 as compared to the same period in 2020, primarily reflecting lower gross profit in our Well Intervention and Robotics segments, offset in part by higher gross profit in our Production Facilities segment.

The gross profit related to our Well Intervention segment decreased by $17.8 million for the three-month period ended June 30, 2021 as compared to the same period in 2020, primarily reflecting lower revenues as well as higher costs associated with our increased activity in the North Sea and West Africa, offset in part by cost reduction efforts in the Gulf of Mexico associated with lower utilization during the current quarter.

The gross profit related to our Robotics segment decreased by $8.8 million for the three-month period ended June 30, 2021 as compared to the same period in 2020, primarily reflecting lower revenues due to fewer spot vessel days on site clearance projects, offset in part by lower operating costs.

The gross profit related to our Production Facilities segment increased by $1.4 million for the three-month period ended June 30, 2021 as compared to the same period in 2020, primarily reflecting higher HFRS revenues and a reduction in direct costs.

Selling, General and Administrative Expenses.

Our selling, general and administrative expenses were $13.4 million for the three-month period ended June 30, 2021 as compared to $15.9 million for the same period in 2020, primarily reflecting lower credit loss reserves.

Our selling, general and administrative expenses for the three-month period ended June 30, 2020 included a $1.7 million credit loss related to a receivable in our Robotics business segment (Note 14).

Net Interest Expense.

Our net interest expense totaled $5.9 million for the three-month period ended June 30, 2021 as compared to $7.1 million for the same period in 2020, primarily reflecting lower interest expense due to a reduction in our overall debt levels and the elimination of accretion of debt discounts associated with our 2022 Notes, 2023 Notes and 2026 Notes as a result of the adoption of ASU No.

2020-06 beginning January 1, 2021 (Note 5).

Other Income (Expense), Net.

Net other income was $1.0 million for the three-month period ended June 30, 2021 as compared to net other expense of $2.1 million for the same period in 2020, primarily reflecting foreign currency transaction gains due to the strengthening of the British pound.

Income Tax Benefit.

Income tax benefit was $2.0 million for the three-month period ended June 30, 2021 as compared to $0.3 million for the same period in 2020.

The effective tax rates for the three-month periods ended June 30, 2021 and 2020 were 12.6% and (5.2)%, respectively, primarily attributable to the earnings mix between our higher and lower tax rate jurisdictions and the impact of the CARES Act in 2020 (Note 6).

Comparison of Six Months Ended June 30, 2021 and 2020

The following table details various financial and operational highlights for the periods presented (dollars in thousands):

Six Months Ended

Net revenues —

Well Intervention

Production Facilities

Intercompany eliminations

Gross profit (loss) —

Well Intervention

Production Facilities

Corporate, eliminations and other

Gross margin —

Well Intervention

Production Facilities

Total company

Number of vessels or robotics assets (1) / Utilization (2)

Well intervention vessels

Robotics assets (3)

Chartered robotics vessels

(1) Represents the number of vessels or robotics assets as of the end of the period, including spot vessels and those under long-term charter, and excluding acquired vessels prior to their in-service dates and vessels or assets disposed of and/or taken out of service.

The average utilization rates of chartered robotics vessels during the six-month periods ended June 30, 2021 and 2020 included 64 and 614 spot vessel days, respectively, at near full utilization.

(3) Consists of ROVs, trenchers and ROVDrill.

Intercompany segment amounts are derived primarily from equipment and services provided to other business segments.

Intercompany segment revenues are as follows (in thousands):

Six Months Ended

Well Intervention

Net Revenues.

Our consolidated net revenues for the six-month period ended June 30, 2021 decreased by 14% as compared to the same period in 2020, reflecting lower revenues from our Well Intervention and Robotics segments, offset in part by higher revenues from our Production Facilities segment.

Our Well Intervention revenues decreased by 7% for the six-month period ended June 30, 2021 as compared to the same period in 2020, primarily reflecting lower vessel utilization in the North Sea, lower utilization on the Q4000 and lower rates on the Q5000 in the Gulf of Mexico, and our short-term extension at lower rates on the Siem Helix 1 in Brazil in 2021, offset in part by higher utilization on the Q7000 in Nigeria.

Robotics revenues decreased by 38% for the six-month period ended June 30, 2021 as compared to the same period in 2020, primarily reflecting fewer vessel days due to a significant drop in spot vessel days attributable to site clearance projects in the North Sea as well as decreased utilization of ROVs and ROVDrill, offset in part by an increase in trenching activities.

Our results included 401 vessel days and 156 trenching days during the six-month period ended June 30, 2021 as compared to 904 vessel days and 161 trenching days during the same period in 2020.

Our Production Facilities revenues increased by 5% for the six-month period ended June 30, 2021 as compared to the same period in 2020, primarily reflecting higher HFRS revenues and oil and gas production.

Gross Profit (Loss).

Our consolidated gross profit decreased by $13.8 million for the six-month period ended June 30, 2021 as compared to the same period in 2020, primarily reflecting lower gross profit in our Well Intervention and Robotics segments, offset in part by higher gross profit in our Production Facilities segment.

The gross profit related to our Well Intervention segment decreased by $7.8 million for the six-month period ended June 30, 2021 as compared to the same period in 2020, primarily reflecting higher costs associated with our increased activity in the North Sea and West Africa, offset in part by our overall cost reduction efforts.

The gross profit related to our Robotics segment decreased by $9.3 million for the six-month period ended June 30, 2021 as compared to the same period in 2020, primarily reflecting lower revenues due to fewer spot vessel days on site clearance projects, offset in part by lower operating costs.

The gross profit related to our Production Facilities segment increased by $4.4 million for the six-month period ended June 30, 2021 as compared to the same period in 2020, primarily reflecting higher HFRS revenues, higher oil and gas production revenues and a reduction in direct costs.

Goodwill Impairment.

The $6.7 million charge in the three-month period ended March 31, 2020 reflects the impairment of the entire goodwill balance, which related to our acquisition of a controlling interest in STL (Note 10).

The $6.7 million charge in the six-month period ended June 30, 2020 reflects the impairment of the entire goodwill balance, which related to our acquisition of a controlling interest in STL (Note 10).

Selling, General and Administrative Expenses.

Our selling, general and administrative expenses were $15.2 million for the three-month period ended March 31, 2021 as compared to $16.3 million for the same period in 2020, primarily reflecting lower credit loss reserves and lower employee compensation costs.

Our selling, general and administrative expenses were $28.6 million for the six-month period ended June 30, 2021 as compared to $32.2 million for the same period in 2020, primarily reflecting lower credit loss reserves.

Our selling, general and administrative expenses for the six-month period ended June 30, 2020 included a $2.4 million provision for current expected credit losses (Note 14).

Net Interest Expense.

Our net interest expense totaled $6.1 million for the three-month period ended March 31, 2021 as compared to $5.7 million for the same period in 2020, primarily reflecting the cessation of interest capitalization with the completion of the Q7000 in the first quarter 2020.

Net interest expense for the three-month period ended March 31, 2020 excluded $1.2 million in capitalized interest associated with the Q7000 (Note 5).

Our net interest expense totaled $12.0 million for the six-month period ended June 30, 2021 as compared to $12.8 million for the same period in 2020, primarily reflecting lower interest expense due to a reduction in our overall debt levels and the elimination of accretion of debt discounts associated with our 2022 Notes, 2023 Notes and 2026 Notes as a result of the adoption of ASU No.

2020-06 beginning January 1, 2021 (Note 5), offset in part by the cessation of interest capitalization with the completion of the Q7000 in 2020.

Net interest expense for the six-month period ended June 30, 2020 excluded $1.2 million in capitalized interest associated with the Q7000 (Note 5).

Other Income (Expense), Net.

Net other income was $1.6 million for the three-month period ended March 31, 2021 as compared to net other expense of $10.4 million for the same period in 2020, primarily reflecting foreign currency transaction gains due to the strengthening of the British pound.

Income Tax Provision (Benefit).

Income tax provision was $0.1 million for the three-month period ended March 31, 2021 as compared to an income tax benefit of $21.1 million for the same period in 2020.

The effective tax rates for the three-month periods ended March 31, 2021 and 2020 were (4.0)% and 60.2%, respectively.

The decrease in the effective tax rate was primarily attributable to the absence of tax benefits derived from the CARES Act recorded in the same period last year, which included the carrying back of certain net operating losses to prior periods with higher income tax rates, as well as the result of the consolidation of certain U.S.

branch operations with the Helix U.S.

consolidated tax group and the earnings mix between our higher and lower tax rate jurisdictions (Note 6).

Net other income was $2.6 million for the six-month period ended June 30, 2021 as compared to net other expense of $12.5 million for the same period in 2020, primarily reflecting foreign currency transaction gains due to the strengthening of the British pound.

Income Tax Benefit.

Income tax benefit was $1.9 million for the six-month period ended June 30, 2021 as compared to an income tax benefit of $21.4 million for the same period in 2020.

The effective tax rates for the six-month periods ended June 30, 2021 and 2020 were 10.0% and 71.6%, respectively.

The decrease in the effective tax rate was primarily attributable to the earnings mix between our higher and lower tax rate jurisdictions and the impact of the CARES Act and the foreign subsidiary restructuring in 2020 (Note 6).

LIQUIDITY AND CAPITAL RESOURCES

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(1) Current maturities of our long-term debt of $70.5 million and $90.7 million, respectively, are included in net working capital and excluded from long-term debt.

Long-term debt as of March 31, 2021 is net of unamortized debt issuance costs.

Long-term debt as of June 30, 2021 is net of unamortized debt issuance costs.

Long-term debt as of December 31, 2020 is net of unamortized debt discounts and debt issuance costs.

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(2) Liquidity, as defined by us, is equal to cash and cash equivalents, excluding restricted cash, plus available capacity under the Revolving Credit Facility.

Our liquidity at March 31, 2021 included cash and cash equivalents of $204.8 million and $172.2 million of available borrowing capacity under the Revolving Credit Facility (Note 5).

Our liquidity at March 31, 2021 excluded $65.6 million of restricted cash securing a project related letter of credit (short-term), the restriction from which is expected to be released upon completion of the project.

Our liquidity at December 31, 2020 included cash and cash equivalents of $291.3 million and $160.2 million of available borrowing capacity under the Revolving Credit Facility.

Our liquidity at June 30, 2021 included $243.9 million of cash and cash equivalents and $172.3 million of available borrowing capacity under the Revolving Credit Facility (Note 5).

Our liquidity at June 30, 2021 excluded $71.3 million of restricted cash securing a short-term project related letter of credit, the restriction from which is expected to be released upon completion of the project.

Our liquidity at December 31, 2020 included $291.3 million of cash and cash equivalents and $160.2 million of available borrowing capacity under the Revolving Credit Facility.

The carrying amounts of our long-term debt are as follows (in thousands):

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The following table provides summary data from our condensed consolidated statements of cash flows (in thousands):

Three Months Ended

Six Months Ended

Cash provided by (used in):

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Our current requirements for cash primarily reflect the need to fund our operations and capital spending for our current lines of business and to service our debt.

The ongoing COVID-19 pandemic, challenging market conditions and industry-wide spending cuts have impacted our revenues and we expect these events to continue to impact our results into the near future.

Our operating cash flows are impacted to the extent we cannot replace those revenues or reduce costs.

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Decreases in our revenues and EBITDA, including as may be attributable to the fallout from the ongoing COVID-19 pandemic, may also limit our ability to fully access the Revolving Credit Facility.

At March 31, 2021, our available borrowing capacity under the Revolving Credit Facility, based on the applicable leverage ratio covenant, was $172.2 million, net of $2.8 million of letters of credit issued under that facility.

At June 30, 2021, our available borrowing capacity under the Revolving Credit Facility, based on the applicable leverage ratio covenant, was $172.3 million, net of $2.7 million of letters of credit issued under that facility.

We currently do not anticipate borrowing under the Revolving Credit Facility other than for the issuance of letters of credit.

Operating Cash Flows

Net cash flows provided by operating activities were $39.9 million for the three-month period ended March 31, 2021 as compared to net cash flows used by operating activities of $17.2 million for the same period in 2020.

The $57.1 million increase in operating cash flows primarily reflects lower operating loss and decreases in working capital.

Net cash flows provided by operating activities were $92.5 million for the six-month period ended June 30, 2021 as compared to $6.0 million for the same period in 2020.

The increase in operating cash flows primarily reflects improvements in working capital, lower recertification and dry dock costs, and higher income tax refunds in 2021.

Investing Activities

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Significant (uses) sources of cash associated with investing activities are as follows (in thousands):

Three Months Ended

Six Months Ended

Capital expenditures:

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Production Facilities

Proceeds from sale of assets

Net cash used in investing activities

Our capital expenditures during the three-month period ended March 31, 2020 primarily included payments associated with the construction and completion of the Q7000 , which commenced operations in January 2020.

Our capital expenditures during the six-month period ended June 30, 2020 primarily included payments associated with the construction and completion of the Q7000 , which commenced operations in January 2020.

Financing Activities

Cash flows from financing activities consist primarily of proceeds and repayments related to our long-term debt.

Net cash outflows from financing activities of $59.9 million for the three-month period ended March 31, 2021 primarily reflect the repayment of $58.2 million of scheduled maturities related to our indebtedness, including the final maturity of $53.6 million of our Nordea Q5000 Loan (Note 5).

Net cash outflows from financing activities of $18.4 million for the three-month period ended March 31, 2020 primarily reflect the repayment of $13.4 million of our indebtedness (Note 5).

Net cash outflows from financing activities of $62.8 million for the six-month period ended June 30, 2021 primarily reflect the repayment of $59.1 million of scheduled maturities related to our indebtedness, including the final maturity of $53.6 million of our Nordea Q5000 Loan (Note 5).

Net cash outflows from financing activities of $28.1 million for the six-month period ended June 30, 2020 primarily reflect the repayment of $23.2 million of our indebtedness (Note 5).

Free Cash Flow

Free cash flow increased by $68.2 million for the three-month period ended March 31, 2021 as compared to the same period in 2020.

Free cash flow increased by $96.8 million for the six-month period ended June 30, 2021 as compared to the same period in 2020.

The increase was primarily attributable to the increase in operating cash flows and the decrease in capital expenditures.

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Contractual Obligations and Commercial Commitments

The following table summarizes our contractual cash obligations as of March 31, 2021 and the scheduled years in which the obligations are contractually due (in thousands):

The following table summarizes our contractual cash obligations as of June 30, 2021 and the scheduled years in which the obligations are contractually due (in thousands):

2022 Notes (2)

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Total cash obligations

(1) Excludes unsecured letters of credit outstanding at March 31, 2021 totaling $2.8 million.

(1) Excludes unsecured letters of credit outstanding at June 30, 2021 totaling $2.7 million.

These letters of credit may be issued to support various obligations, such as contractual obligations, contract bidding and insurance activities.

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See Note 5 for additional information.

(5) Interest payment obligations were calculated using stated coupon rates for fixed rate debt and interest rates applicable at March 31, 2021 for variable rate debt.

(5) Interest payment obligations were calculated using stated coupon rates for fixed rate debt and interest rates applicable at June 30, 2021 for variable rate debt.

(6) Operating leases include vessel charters and facility and equipment leases.

At March 31, 2021, our commitment related to long-term vessel charters totaled approximately $215.8 million, of which $86.9 million was related to the non-lease (services) components that are not included in operating lease liabilities in the condensed consolidated balance sheet as of March 31, 2021.

At June 30, 2021, our commitment related to long-term vessel charters totaled approximately $195.3 million, of which $79.9 million was related to the non-lease (services) components that are not included in operating lease liabilities in the condensed consolidated balance sheet as of June 30, 2021.

CRITICAL ACCOUNTING ESTIMATES AND POLICIES

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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-Q

Item 2. Management’s Discussion and Analysis