What changed in this filing

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Item 1. Financial Statements

2022-04-27 compared with 2021-10-22 · 116 added, 345 removed, 457 unchanged (50% of the section changed)

4 unchanged sentences

(in thousands)

September 30,

Current assets:

24 unchanged sentences

Commitments and contingencies

Redeemable noncontrolling interests

Shareholders’ equity:

3 unchanged sentences

Total shareholders’ equity

Total liabilities, redeemable noncontrolling interests and shareholders’ equity

Total liabilities and shareholders’ equity

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

4 unchanged sentences

Three Months Ended

Nine Months Ended

September 30,

Cost of sales

Gain (loss) on disposition of assets, net

Goodwill impairment

Gross profit (loss)

Selling, general and administrative expenses

Income (loss) from operations

Loss from operations

Net interest expense

Gain (loss) on extinguishment of long-term debt

Other income (expense), net

Royalty income and other

Income (loss) before income taxes

Income tax provision (benefit)

Net income (loss)

Loss before income taxes

Income tax provision

Net loss attributable to redeemable noncontrolling interests

Net income (loss) attributable to common shareholders

Earnings (loss) per share of common stock:

Net loss attributable to common shareholders

Loss per share of common stock:

Weighted average common shares outstanding:

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AND SUBSIDIARIES

CONDENSED CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME

CONDENSED CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME (LOSS)

(in thousands)

Three Months Ended

Nine Months Ended

September 30,

Net income (loss)

Other comprehensive income (loss), net of tax:

Net unrealized loss on hedges arising during the period

Reclassifications into earnings

Income taxes on hedges

Net change in hedges, net of tax

Foreign currency translation gain (loss)

1 unchanged sentence

Comprehensive income (loss)

Less comprehensive income (loss) attributable to redeemable noncontrolling interests:

Foreign currency translation gain (loss)

Comprehensive income (loss) attributable to redeemable noncontrolling interests

Less comprehensive loss attributable to redeemable noncontrolling interests:

Foreign currency translation gain

Comprehensive loss attributable to redeemable noncontrolling interests

Comprehensive income (loss) attributable to common shareholders

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Noncontrolling

Balance, June 30, 2021

Foreign currency translation adjustments

Activity in company stock plans, net and other

Share-based compensation

Balance, September 30, 2021

Comprehensive

Shareholders’

Noncontrolling

Balance, June 30, 2020

Net income (loss)

Foreign currency translation adjustments

Accretion of redeemable noncontrolling interests

Equity component of convertible senior notes

Re-acquisition of equity component of convertible senior notes

Capped call transactions

Activity in company stock plans, net and other

Share-based compensation

Balance, September 30, 2020

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

HELIX ENERGY SOLUTIONS GROUP, INC.

AND SUBSIDIARIES

CONDENSED CONSOLIDATED STATEMENTS OF SHAREHOLDERS’ EQUITY

(in thousands)

Comprehensive

Shareholders’

Noncontrolling

Balance, December 31, 2021

Cumulative-effect adjustments upon adoption of ASU No.

Foreign currency translation adjustments

Accretion of redeemable noncontrolling interests

Acquisition of redeemable noncontrolling interests

Activity in company stock plans, net and other

Share-based compensation

Balance, September 30, 2021

Balance, March 31, 2022

Comprehensive

2 unchanged sentences

Balance, December 31, 2020

Net income (loss)

Credit losses recognized in retained earnings upon adoption of ASU No.

Cumulative-effect adjustments upon adoption of ASU No.

Foreign currency translation adjustments

Unrealized gain on hedges, net of tax

Accretion of redeemable noncontrolling interests

Equity component of convertible senior notes

Re-acquisition of equity component of convertible senior notes

Capped call transactions

Activity in company stock plans, net and other

Share-based compensation

Balance, September 30, 2020

Balance, March 31, 2021

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

3 unchanged sentences

(in thousands)

Nine Months Ended

September 30,

Three Months Ended

Cash flows from operating activities:

Net income (loss)

Adjustments to reconcile net income (loss) to net cash provided by operating activities:

Adjustments to reconcile net loss to net cash provided by (used in) operating activities:

Depreciation and amortization

Goodwill impairment

Amortization of debt discounts

Amortization of debt issuance costs

1 unchanged sentence

Deferred income taxes

(Gain) loss on disposition of assets, net

(Gain) loss on extinguishment of long-term debt

Unrealized gain on derivative contracts, net

Unrealized foreign currency loss

Unrealized foreign currency (gain) loss

Changes in operating assets and liabilities:

Accounts receivable, net

Income tax receivable

Other current assets

Income tax payable, net of income tax receivable

Accounts payable and accrued liabilities

Net cash provided by operating activities

Net cash provided by (used in) operating activities

Cash flows from investing activities:

Capital expenditures

Proceeds from sale of assets

Net cash used in investing activities

Cash flows from financing activities:

Proceeds from convertible senior notes

Repayment of convertible senior notes

Repayment of Term Loan

1 unchanged sentence

Repayment of MARAD Debt

Capped call transactions

Debt issuance costs

Acquisition of redeemable noncontrolling interests

Payments related to tax withholding for share-based compensation

2 unchanged sentences

Effect of exchange rate changes on cash and cash equivalents and restricted cash

Net increase (decrease) in cash and cash equivalents and restricted cash

Net decrease in cash and cash equivalents and restricted cash

Cash and cash equivalents and restricted cash:

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The accompanying condensed consolidated financial statements have been prepared in conformity with GAAP in U.S.

dollars and are consistent in all material respects with those applied in our 2020 Annual Report on Form 10-K (our “2020 Form 10-K”) with the exception of the impact of early adopting Accounting Standards Update (“ASU”) No.

2020-06 on a modified retrospective basis beginning January 1, 2021 (see below).

dollars and are consistent in all material respects with those applied in our 2021 Annual Report on Form 10-K (our “2021 Form 10-K”).

The preparation of these financial statements requires us to make estimates and judgments that affect the amounts reported in the financial statements and the related disclosures.

Actual results may differ from our estimates.

We have made all adjustments, which, unless otherwise disclosed, are of normal recurring nature, that we believe are necessary for a fair presentation of the condensed consolidated balance sheets, statements of operations, statements of comprehensive income, statements of shareholders’ equity and statements of cash flows, as applicable.

The operating results for the three- and nine-month periods ended September 30, 2021 are not necessarily indicative of the results that may be expected for the year ending December 31, 2021.

We have made all adjustments, which, unless otherwise disclosed, are of normal recurring nature, that we believe are necessary for a fair presentation of the condensed consolidated balance sheets, statements of operations, statements of comprehensive income (loss), statements of shareholders’ equity and statements of cash flows, as applicable.

The operating results for the three-month period ended March 31, 2022 are not necessarily indicative of the results that may be expected for the year ending December 31, 2022.

Our balance sheet as of December 31, 2021 included herein has been derived from the audited balance sheet as of December 31, 2021 included in our 2021 Form 10-K.

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Certain reclassifications were made to previously reported amounts in the consolidated financial statements and notes thereto to make them consistent with the current presentation format.

New accounting standards

In August 2020, the Financial Accounting Standards Board issued ASU No.

2020-06, “Accounting for Convertible Instruments and Contracts in an Entity's Own Equity,” which simplifies the accounting for certain financial instruments with characteristics of liabilities and equity, including convertible instruments and contracts in an entity’s own equity.

Among other changes, this ASU removes from GAAP the requirement to separate certain convertible instruments, such as our Convertible Senior Notes Due 2022, Convertible Senior Notes Due 2023 and Convertible Senior Notes Due 2026 (Note 5), into liability and equity components.

Consequently, those convertible instruments will be accounted for in their entirety as liabilities measured at their amortized cost.

We elected to early adopt ASU No.

2020-06 on a modified retrospective basis beginning January 1, 2021.

The adoption of this ASU increased our long-term debt and decreased the reported value of our common stock by $ 44.1 million and $ 41.5 million, respectively, as we reclassified the conversion features associated with our various outstanding convertible senior notes from equity to long-term debt.

The adoption of this ASU also increased our retained earnings and decreased deferred tax liabilities by $ 6.7 million and $ 9.3 million, respectively.

Subsequent to its adoption, interest expense associated with our outstanding convertible senior notes will decrease as there will no longer be debt discounts to amortize.

Additionally, the ASU no longer permits the treasury stock method for convertible instruments and instead requires the application of the if-converted method to calculate the impact of our convertible senior notes on diluted earnings per share (“EPS”).

We do not expect any other recently issued accounting standards to have a material impact on our financial position, results of operations or cash flows when they become effective.

We do not expect any recently issued accounting standards to have a material impact on our financial position, results of operations or cash flows when they become effective.

Note 2 — Company Overview

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Well Intervention, Robotics and Production Facilities (Note 10).

Our Well Intervention segment provides services enabling our customers to safely access offshore wells for the purpose of performing production enhancement or decommissioning operations.

Our Well Intervention segment provides services enabling our customers to safely access offshore wells for the purpose of performing production enhancement or decommissioning operations, thereby avoiding drilling new wells by extending the useful lives of existing wells and preserving the environment by preventing uncontrolled releases of oil and gas.

Our well intervention vessels include the Q4000 , the Q5000 , the Q7000 , the Seawell , the Well Enhancer , and two chartered monohull vessels, the Siem H elix 1 and the Siem Helix 2 .

Our well intervention equipment includes intervention riser systems (“IRSs”), subsea intervention lubricators (“SILs”) and the Riserless Open-water Abandonment Module (“ROAM”), some of which we provide on a stand-alone basis.

Our well intervention segment also includes our ownership interest in Subsea Technologies Group Limited (“STL”).

Beginning in May 2019 we held a 70 % controlling interest in STL, and in June 2021 we acquired the remaining 30 % interest.

Our Robotics segment provides offshore construction, trenching, seabed clearance, inspection, repair and maintenance services to both the oil and gas and the renewable energy markets globally.

Our Robotics services also complement well intervention services.

Our Robotics segment includes remotely operated vehicles (“ROVs”), trenchers, a ROVDrill and two robotics support vessels under long-term charter, the Grand Canyon II and the Grand Canyon III , as well as spot vessels as needed.

Our well intervention equipment includes intervention systems such as intervention riser systems (“IRSs”), subsea intervention lubricators (“SILs”) and the Riserless Open-water Abandonment Module, some of which we provide on a stand-alone basis.

Our Robotics segment provides offshore construction, trenching, seabed clearance, and inspection, repair and maintenance (“IRM”) services to both the oil and gas and the renewable energy markets globally, thereby assisting the delivery of affordable and reliable energy and supporting the responsible transition away from a carbon-based economy.

Additionally, our Robotics services are used in and complement our well intervention services.

Our Robotics segment includes remotely operated vehicles (“ROVs”), trenchers and robotics support vessels under term charters as well as spot vessels as needed.

Our Production Facilities segment includes the Helix Producer I (the “ HP I ”), a ship-shaped dynamically positioned floating production vessel, the Helix Fast Response System (the “HFRS”) and our ownership of oil and gas properties.

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Other current assets consist of the following (in thousands):

September 30,

Contract assets (Note 7)

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Other assets, net consist of the following (in thousands):

September 30,

Deferred recertification and dry dock costs, net

Deferred costs (Note 7)

Charter deposit (1)

Prepaid charter (1)

Intangible assets with finite lives, net

Total other assets, net

(1) This amount is deposited with the owner of the Siem Helix 2 to offset certain payment obligations associated with the vessel at the end of the charter term.

(1) Represents prepayments to the owner of the Siem Helix 1 and the Siem Helix 2 to offset certain payment obligations associated with the vessels at the end of their respective charter term.

Accrued liabilities consist of the following (in thousands):

September 30,

Accrued payroll and related benefits

Accrued interest

Income tax payable

Deferred revenue (Note 7)

2 unchanged sentences

Other non-current liabilities consist of the following (in thousands):

September 30,

Deferred revenue (Note 7)

5 unchanged sentences

Three Months Ended

Nine Months Ended

September 30,

Operating lease cost

3 unchanged sentences

Net lease cost

Maturities of our operating lease liabilities as of September 30, 2021 are as follows (in thousands):

Maturities of our operating lease liabilities as of March 31, 2022 are as follows (in thousands):

Facilities and

26 unchanged sentences

The following table presents the weighted average remaining lease term and discount rate:

September 30,

Weighted average remaining lease term

1 unchanged sentence

The following table presents other information related to our operating leases (in thousands):

Nine Months Ended

September 30,

Three Months Ended

Cash paid for operating lease liabilities

Right-of-use assets obtained in exchange for new operating lease obligations (1)

(1) Amount in 2022 primarily relates to the charter extensions for the Siem Helix 1 and the Siem Helix 2 (Note 12).

Note 5 — Long-Term Debt

Scheduled maturities of our long-term debt outstanding as of September 30, 2021 are as follows (in thousands):

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

Less than one year

3 unchanged sentences

Four to five years

Over five years

Unamortized debt issuance costs (1)

2 unchanged sentences

(1) Debt issuance costs are amortized to interest expense over the term of the applicable debt agreement.

See Note 1 for accounting changes as a result of the adoption of ASU No.

Below is a summary of certain components of our indebtedness:

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customer accounts receivable and cash, and provides for a $ 10 million sub-limit for the issuance of letters of credit.

As of September 30, 2021, we had no borrowings under the ABL Facility, and our available borrowing capacity under that facility, based on the borrowing base, totaled $ 69.6 million, net of $ 2.2 million of letters of credit issued under that facility.

As of March 31, 2022, we had no borrowings under the ABL Facility, and our available borrowing capacity under that facility, based on the borrowing base, totaled $ 41.2 million, net of $ 2.3 million of letters of credit issued under that facility.

We and certain of our U.S.

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The ABL Facility also requires us to maintain a pro forma minimum excess availability of $ 16 million for the 91 days prior to the maturity of each of our outstanding convertible senior notes.

Convertible Senior Notes Due 2022 (“2022 Notes”)

The 2022 Notes bear interest at a coupon interest rate of 4.25 % per annum payable semi-annually in arrears on November 1 and May 1 of each year until maturity.

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The 2022 Notes are convertible by their holders at any time beginning February 1, 2022 at an initial conversion rate of 71.9748 shares of our common stock per $1,000 principal amount, which currently represents 2,519,118 potentially convertible shares at an initial conversion price of approximately $ 13.89 per share of common stock.

Upon conversion, we have the right to satisfy our conversion obligation by delivering cash, shares of our common stock or any combination thereof.

Prior to February 1, 2022, holders of the 2022 Notes may convert their notes if the closing price of our common stock exceeds 130 % of the conversion price for at least 20 days in the period of 30 consecutive trading days ending on the last trading day of the preceding fiscal quarter (share price condition) or if the trading price of the 2022 Notes was equal to or less than 97 % of the conversion value of the notes during the five consecutive business days immediately after any ten consecutive trading day period (trading price condition).

Holders of the 2022 Notes may also convert their notes if we make certain distributions on shares of our common stock or engage in certain corporate transactions, in which case the holders may be entitled to an increase in the conversion rate, depending on the price of our common shares and the time remaining to maturity, of up to 30.5887 shares of our common stock per $1,000 principal amount.

Prior to November 1, 2019, the 2022 Notes were not redeemable.

On or after November 1, 2019, we may redeem all or any portion of the 2022 Notes if the price of our common stock has been at least 130 % of the conversion price for at least 20 trading days during any 30 consecutive trading day period preceding our redemption notice.

Any redemption would be payable in cash equal to 100 % of the principal amount plus accrued and unpaid interest and a “make-whole premium” calculated as the present value of all remaining scheduled interest payments.

Holders of the 2022 Notes may convert any of their notes if we call the notes for redemption.

Holders of the 2022 Notes may also require us to repurchase the notes following a “fundamental change,” which includes a change of control or a termination of trading of our common stock (as defined in the indenture governing the 2022 Notes).

The indenture governing the 2022 Notes contains customary terms and covenants, including that upon certain events of default, the entire principal amount of and any accrued interest on the notes may be declared immediately due and payable.

In the case of certain events of bankruptcy, insolvency or reorganization relating to us or a subsidiary, the principal amount of the 2022 Notes together with any accrued interest will become immediately due and payable.

The 2022 Notes were initially separated between the equity component recognized in shareholders’ equity and the debt component, which was presented as long-term debt, net of the unamortized debt discount and debt issuance costs.

The unamortized debt discount and debt issuance costs were being accreted to interest expense through the maturity date of the 2022 Notes.

As of December 31, 2020, unamortized debt discount and debt issuance costs related to the 2022 Notes totaled $ 1.5 million.

As a result of the adoption of ASU No.

2020-06 beginning January 1, 2021, there is no longer any debt discount (or related accretion) associated with the 2022 Notes (Note 1).

As of September 30, 2021, unamortized debt issuance costs related to the 2022 Notes were $ 0.1 million.

The effective interest rate for the 2022 Notes prior to the adoption of ASU No.

2020-06 was 7.3 %.

The effective interest rate subsequent to the adoption of ASU No.

2020-06 decreased to 4.8 %.

For the three- and nine-month periods ended September 30, 2021, total interest expense related to the 2022 Notes was $ 0.4 million and $ 1.3 million, respectively, with coupon interest expense of $ 0.4 million and $ 1.1 million, respectively, and the amortization of issuance costs of $ 0.2 million for the nine-month period ended September 30, 2021.

For the three- and nine-month periods ended September 30, 2020, total interest expense related to the 2022 Notes was $ 1.4 million and $ 6.0 million, respectively, with coupon interest expense of $ 0.8 million and $ 3.5 million, respectively, and the amortization of debt discount and issuance costs of $ 0.6 million and $ 2.5 million, respectively.

Convertible Senior Notes Due 2023 (“2023 Notes”)

On March 28, 2022, we elected to satisfy our conversion obligation by delivering cash.

The effective interest rate for the 2022 Notes is 4.8 %.

For each of the three-month periods ended March 31, 2022 and 2021, total interest expense related to the 2022 Notes was $ 0.4 million primarily from coupon interest expense.

The 2023 Notes bear interest at a coupon interest rate of 4.125 % per annum payable semi-annually in arrears on March 15 and September 15 of each year until maturity.

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Upon conversion, we have the right to satisfy our conversion obligation by delivering cash, shares of our common stock or any combination thereof.

Prior to March 15, 2023, holders of the 2023 Notes may convert their notes if the closing price of our common stock exceeds 130 % of the conversion price for at least 20 days in the period of 30 consecutive trading days ending on the last trading day of the preceding fiscal quarter (share price condition) or if the trading price of the 2023 Notes was equal to or less than 97 % of the conversion value of the notes during the five consecutive business days immediately after any ten consecutive trading day period (trading price condition).

Prior to March 15, 2023, holders of the 2023 Notes may convert their notes if the closing price of our common stock exceeds 130 % of the conversion price for at least 20 days in the period of 30 consecutive trading days ending on the last trading day of the preceding fiscal quarter (share price condition) or if the trading price of the 2023 Notes is equal to or less than 97 % of the conversion value of the notes during the five consecutive business days immediately after any ten consecutive trading day period (trading price condition).

Holders of the 2023 Notes may also convert their notes if we make certain distributions on shares of our common stock or engage in certain corporate transactions, in which case the holders may be entitled to an increase in the conversion rate, depending on the price of our common shares and the time remaining to maturity, of up to 47.5260 shares of our common stock per $1,000 principal amount.

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In the case of certain events of bankruptcy, insolvency or reorganization relating to us or a significant subsidiary, the principal amount of the 2023 Notes together with any accrued interest will become immediately due and payable.

The 2023 Notes were initially separated between the equity component recognized in shareholders’ equity and the debt component, which was presented as long-term debt, net of the unamortized debt discount and debt issuance costs.

The unamortized debt discount and debt issuance costs were being accreted to interest expense through the maturity date of the 2023 Notes.

As of December 31, 2020, unamortized debt discount and debt issuance costs related to the 2023 Notes totaled $ 3.1 million.

As a result of the adoption of ASU No.

2020-06 beginning January 1, 2021, there is no longer any debt discount (or related accretion) associated with the 2023 Notes (Note 1).

As of September 30, 2021, unamortized debt issuance costs related to the 2023 Notes were $ 0.4 million.

The effective interest rate for the 2023 Notes prior to the adoption of ASU No.

2020-06 was 7.8 %.

The effective interest rate subsequent to the adoption of ASU No.

2020-06 decreased to 4.8 %.

For the three- and nine-month periods ended September 30, 2021, total interest expense related to the 2023 Notes was $ 0.3 million and $ 1.0 million, respectively, with coupon interest expense of $ 0.3 million and $ 0.9 million, respectively, and the amortization of issuance costs of $ 0.1 million for the nine-month period ended September 30, 2021.

For the three- and nine-month periods ended September 30, 2020, total interest expense related to the 2023 Notes was $ 1.4 million and $ 6.0 million, respectively, with coupon interest expense of $ 0.8 million and $ 3.4 million, respectively, and the amortization of debt discount and issuance costs of $ 0.6 million and $ 2.6 million, respectively.

Convertible Senior Notes Due 2026 (“2026 Notes”)

The effective interest rate for the 2023 Notes is 4.8 %.

For each of the three-month periods ended March 31, 2022 and 2021, total interest expense related to the 2023 Notes was $ 0.4 million, with coupon interest expense of $ 0.3 million and the amortization of debt issuance costs of $ 0.1 million.

The 2026 Notes bear interest at a coupon interest rate of 6.75 % per annum payable semi-annually in arrears on February 15 and August 15 of each year, beginning February 15, 2021 until maturity.

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Upon conversion, we have the right to satisfy our conversion obligation by delivering cash, shares of our common stock or any combination thereof.

Prior to November 17, 2025, holders of the 2026 Notes may convert their notes if the closing price of our common stock exceeds 130 % of the conversion price for at least 20 days in the period of 30 consecutive trading days ending on the last trading day of the preceding fiscal quarter (share price condition) or if the trading price of the 2026 Notes was equal to or less than 97 % of the conversion value of the notes during the five consecutive business days immediately after any ten consecutive trading day period (trading price condition).

Prior to November 17, 2025, holders of the 2026 Notes may convert their notes if the closing price of our common stock exceeds 130 % of the conversion price for at least 20 days in the period of 30 consecutive trading days ending on the last trading day of the preceding fiscal quarter (share price condition) or if the trading price of the 2026 Notes is equal to or less than 97 % of the conversion value of the notes during the five consecutive business days immediately after any ten consecutive trading day period (trading price condition).

Holders of the 2026 Notes may also convert their notes if we make certain distributions on shares of our common stock or engage in certain corporate transactions, in which case the holders may be entitled to an increase in the conversion rate, depending on the price of our common shares and the time remaining to maturity, of up to 64.5207 shares of our common stock per $1,000 principal amount.

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In the case of certain events of bankruptcy, insolvency or reorganization relating to us or a significant subsidiary, the principal amount of the 2026 Notes together with any accrued interest will become immediately due and payable.

The 2026 Notes were initially separated between the equity component recognized in shareholders’ equity and the debt component, which was presented as long-term debt, net of the unamortized debt discount and debt issuance costs.

The unamortized debt discount and debt issuance costs were being accreted to interest expense through the maturity date of the 2026 Notes.

As of December 31, 2020, unamortized debt discount and debt issuance costs related to the 2026 Notes totaled $ 47.3 million.

As a result of the adoption of ASU No.

2020-06 beginning January 1, 2021, there is no longer any debt discount (or related accretion) associated with the 2026 Notes (Note 1).

As of September 30, 2021, unamortized debt issuance costs related to the 2026 Notes were $ 6.2 million.

The effective interest rate for the 2026 Notes prior to the adoption of ASU No.

2020-06 was 12.4 %.

The effective interest rate subsequent to the adoption of ASU No.

2020-06 decreased to 7.6 %.

For the three- and nine-month periods ended September 30, 2021, total interest expense related to the 2026 Notes was $ 3.7 million and $ 11.0 million, respectively, with coupon interest expense of $ 3.4 million and $ 10.1 million, respectively, and the amortization of debt issuance costs of $ 0.3 million and $ 0.9 million, respectively.

For the three- and nine-month periods ended September 30, 2020, total interest expense related to the 2026 Notes was $ 2.5 million with coupon interest expense of $ 1.7 million and the amortization of debt discount and issuance costs of $ 0.8 million.

The effective interest rate for the 2026 Notes is 7.6 %.

For each of the three-month periods ended March 31, 2022 and 2021, total interest expense related to the 2026 Notes was $ 3.7 million, with coupon interest expense of $ 3.4 million and the amortization of debt issuance costs of $ 0.3 million.

2026 Capped Calls

In connection with the 2026 Notes offering, we entered into capped call transactions (the “2026 Capped Calls”) with three separate option counterparties.

The 2026 Capped Calls are separate transactions from the 2026 Notes and do not change the holders' rights under the 2026 Notes.

Holders of the 2026 Notes do not have any rights with respect to the 2026 Capped Calls.

The 2026 Capped Calls are for an aggregate of 28,675,900 shares of our common stock, which corresponds to the shares into which the 2026 Notes are initially convertible.

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In addition, certain events may result in a termination of the 2026 Capped Calls, including changes in law, insolvency filings and hedging disruptions.

The 2026 Capped Calls are recorded at their aggregate cost of $ 10.6 million as a reduction to common stock in the shareholders’ equity section of our consolidated balance sheet.

The 2026 Capped Calls are recorded at their aggregate cost of $ 10.6 million as a reduction to common stock in the shareholders’ equity section of our condensed consolidated balance sheets.

In 2005, Helix’s subsidiary CDI – Title XI issued its U.S.

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The loan was secured by the Q5000 and its charter earnings.

As of December 31, 2020, the remaining principal amount of the Nordea Q5000 Loan was $ 53.6 million, which we repaid in January 2021.

In January 2021, we repaid the remaining principal amount of $ 53.6 million.

We previously had another credit agreement (and the amendments made thereafter, collectively the “Credit Agreement”) with a group of lenders led by Bank of America.

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In accordance with the ABL Facility, the 2022 Notes, the 2023 Notes, the 2026 Notes and the MARAD Debt, we are required to comply with certain covenants, including a springing fixed charge coverage ratio and minimum liquidity with respect to the ABL Facility and the maintenance of net worth, working capital and debt-to-equity requirements with respect to the MARAD Debt.

As of September 30, 2021, we were in compliance with these covenants.

As of March 31, 2022, we were in compliance with these covenants.

The following table details the components of our net interest expense (in thousands):

Three Months Ended

Nine Months Ended

September 30,

Interest expense

Capitalized interest

Interest income

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Note 6 — Income Taxes

We believe that our recorded deferred tax assets and liabilities are reasonable.

However, tax laws and regulations are subject to interpretation, and the outcomes of tax disputes are inherently uncertain;

therefore, our assessments can involve a series of complex judgments about future events and rely heavily on estimates and assumptions.

Coronavirus Aid, Relief, and Economic Security Act (the “CARES Act”), which was signed into law on March 27, 2020, is an economic stimulus package designed to aid in offsetting the economic damage caused by the ongoing COVID-19 pandemic and includes various changes to U.S.

income tax regulations.

The CARES Act permits the carryback of certain net operating losses, which previously had been required to be carried forward, at the tax rates applicable in the relevant carryback year.

As a result of these changes, in the nine-month period ended September 30, 2020 we recognized an estimated $ 7.6 million net tax benefit ($ 18.9 million current tax benefit and $ 11.3 million deferred tax expense).

This net tax benefit was generated as our deferred tax assets related to U.S.

net operating losses were realized at higher prior year income tax rates.

During the nine-month period ended September 30, 2020, we migrated two of our foreign subsidiaries into our U.S.

consolidated tax group.

As a result, these subsidiaries are not subject to future U.S.

branch profits tax and a net deferred tax benefit of $ 8.3 million was recognized.

The effective tax rates for the three-month periods ended September 30, 2021 and 2020 were 5.3 % and 17.6 %, respectively.

The variance was primarily attributable to the earnings mix between our higher and lower tax rate jurisdictions as well as the impact of the CARES Act in 2020.

The effective tax rates for the nine-month periods ended September 30, 2021 and 2020 were 7.5 % and 9,777.0 %, respectively.

The effective tax rate for the nine-month period ended September 30, 2021 was lower than the U.S.

statutory rate primarily driven by losses in jurisdictions with low tax rates as well as non-U.S.

withholding and deemed profits taxes paid.

The effective tax rate for the nine-month period ended September 30, 2020 was significantly higher than the U.S.

statutory rate primarily due to the recognition of benefits from our foreign subsidiary restructuring and the CARES Act, as discussed above, in relation to nominal pre-tax losses.

The primary differences between the income tax provision (benefit) at the U.S.

statutory rate and our actual income tax provision (benefit) are as follows (dollars in thousands):

Three Months Ended

Nine Months Ended

September 30,

Taxes at U.S.

statutory rate

Foreign tax provision

Subsidiary restructuring

Income tax provision (benefit)

(1) Includes interim period allocations of $( 1.7 ) million and $ 1.1 million, respectively, for the three- and nine-month periods ended September 30, 2021 and $ 2.3 million for both the three- and nine-month periods ended September 30, 2020.

We operate in multiple jurisdictions with complex tax laws subject to interpretation and judgment.

We believe that our application of such laws and the tax impact thereof are reasonable and fairly presented in our condensed consolidated financial statements.

For the three-month periods ended March 31, 2022 and 2021, we recognized income tax expense of $ 2.1 million and $ 0.1 million, respectively, resulting in effective tax rates of ( 5.4 )% and ( 4.0 )%, respectively.

These variances were primarily attributable to the earnings mix between our higher and lower tax rate jurisdictions as well as losses for which no financial statement benefits have been recognized.

For both periods, our aggregate tax expense was greater than the aggregate tax benefit of our losses, resulting in negative effective tax rates.

The effective tax rate for the three-month period ended March 31, 2022 was significantly lower than the U.S.

statutory rate primarily due to non-creditable foreign income and deemed profit taxes, as well as unbenefited tax losses.

Note 7 — Revenue from Contracts with Customers

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The following table provides information about disaggregated revenue by contract duration (in thousands):

Eliminations (1)

Three months ended September 30, 2021

Three months ended September 30, 2020

Nine months ended September 30, 2021

Nine months ended September 30, 2020

(1) Intercompany revenues among our business segments are under agreements that are considered long-term.

Three months ended March 31, 2022

Three months ended March 31, 2021

Contract Balances

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Contract assets are reflected in “Other current assets” in the accompanying condensed consolidated balance sheets (Note 3).

Contract assets were $ 0.4 million at September 30, 2021 and $ 2.4 million at December 31, 2020.

We had no credit losses on our contract assets for the three- and nine-month periods ended September 30, 2021 and 2020.

Contract assets were $ 0.2 million at March 31, 2022 and $ 0.6 million at December 31, 2021.

We had no credit losses on our contract assets for the three-month periods ended March 31, 2022 and 2021.

Contract liabilities are obligations to provide future services to a customer for which we have already received, or have the unconditional right to receive, the consideration for those services from the customer.

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Contract liabilities are reflected as “Deferred revenue,” a component of “Accrued liabilities” and “Other non-current liabilities” in the accompanying condensed consolidated balance sheets (Note 3).

Contract liabilities totaled $ 10.2 million at September 30, 2021 and $ 10.0 million at December 31, 2020.

Revenue recognized for the three- and nine-month periods ended September 30, 2021 included $ 4.0 million and $ 6.7 million, respectively, that were included in the contract liability balance at the beginning of each period.

Revenue recognized for the three- and nine-month periods ended September 30, 2020 included $ 3.4 million and $ 8.8 million, respectively, that were included in the contract liability balance at the beginning of each period.

Contract liabilities totaled $ 5.7 million at March 31, 2022 and $ 8.7 million at December 31, 2021.

Revenue recognized for the three-month periods ended March 31, 2022 and 2021 included $ 4.3 million and $ 2.5 million, respectively, that were included in the contract liability balance at the beginning of each period.

We report the net contract asset or contract liability position on a contract-by-contract basis at the end of each reporting period.

Performance Obligations

As of September 30, 2021, $ 230.5 million related to unsatisfied performance obligations was expected to be recognized as revenue in the future, with $ 68.6 million in 2021 , $ 102.6 million in 2022 and $ 59.3 million in 2023 and thereafter.

As of March 31, 2022, $ 548.1 million related to unsatisfied performance obligations was expected to be recognized as revenue in the future, with $ 263.4 million, $ 203.4 million and $ 81.3 million in 2022 , 2023 and 2024 , respectively.

These amounts include fixed consideration and estimated variable consideration for both wholly and partially unsatisfied performance obligations, including mobilization and demobilization fees.

These amounts are derived from the specific terms of our contracts, and the expected timing for revenue recognition is based on the estimated start date and duration of each contract according to the information known at September 30, 2021.

For the three- and nine-month periods ended September 30, 2021 and 2020, revenues recognized from performance obligations satisfied (or partially satisfied) in previous periods were immaterial.

For the three-month periods ended March 31, 2022 and 2021, revenues recognized from performance obligations satisfied (or partially satisfied) in previous periods were immaterial.

Contract Fulfillment Costs

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Deferred contract costs are reflected as “Deferred costs,” a component of “Other current assets” and “Other assets, net” in the accompanying condensed consolidated balance sheets (Note 3).

Our deferred contract costs totaled $ 9.3 million at September 30, 2021 and $ 24.4 million at December 31, 2020.

For the three- and nine-month periods ended September 30, 2021, we recorded $ 11.7 million and $ 31.6 million, respectively, related to amortization of these deferred contract costs.

For the three- and nine-month periods ended September 30, 2020, we recorded $ 9.2 million and $ 27.2 million, respectively, related to amortization of these deferred contract costs.

Our deferred contract costs totaled $ 6.2 million at March 31, 2022 and $ 3.3 million at December 31, 2021.

For the three-month periods ended March 31, 2022 and 2021, we recorded $ 4.6 million and $ 10.4 million, respectively, related to amortization of these deferred contract costs.

There were no associated impairment losses for any period presented.

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We have shares of restricted stock issued and outstanding that are currently unvested.

Because holders of shares of unvested restricted stock are entitled to the same liquidation and dividend rights as the holders of our unrestricted common stock, we are required to compute basic and diluted EPS under the two-class method in periods in which we have earnings.

Because holders of shares of unvested restricted stock are entitled to the same liquidation and dividend rights as the holders of our unrestricted common stock, we are required to compute basic and diluted earnings per share (“EPS”) under the two-class method in periods in which we have earnings.

Under the two-class method, net income or loss attributable to common shareholders for each period is allocated based on the participation rights of both common shareholders and the holders of any participating securities as if earnings for the respective periods had been distributed.

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The calculation of diluted EPS is similar to that for basic EPS, except that the denominator includes dilutive common stock equivalents and the numerator excludes the effects of dilutive common stock equivalents, if any.

The computations of the numerator (income) and denominator (shares) to derive the basic and diluted EPS amounts presented on the face of the accompanying condensed consolidated statements of operations are as follows (in thousands):

The computations of the numerator (earnings or loss) and denominator (shares) to derive the basic and diluted EPS amounts presented on the face of the accompanying condensed consolidated statements of operations are as follows (in thousands):

Three Months Ended

September 30, 2021

September 30, 2020

Net income (loss) attributable to common shareholders

Undistributed earnings allocated to participating securities

Accretion of redeemable noncontrolling interests

Net income (loss) available to common shareholders, basic

Effect of dilutive securities:

Share-based awards other than participating securities

Undistributed earnings reallocated to participating securities

Net income (loss) available to common shareholders, diluted

Nine Months Ended

September 30, 2021

September 30, 2020

Net income (loss) attributable to common shareholders

Undistributed earnings allocated to participating securities

March 31, 2022

March 31, 2021

Basic and Diluted:

Net loss attributable to common shareholders

Accretion of redeemable noncontrolling interests

Net income (loss) available to common shareholders, basic

Effect of dilutive securities:

Share-based awards other than participating securities

Undistributed earnings reallocated to participating securities

Net income (loss) available to common shareholders, diluted

We had net losses for the three- and nine-month periods ended September 30, 2021.

Net loss available to common shareholders

We had net losses for the three-month periods ended March 31, 2022 and 2021.

Accordingly, our diluted EPS calculation for these periods excluded any assumed exercise or conversion of common stock equivalents.

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Three Months Ended

Nine Months Ended

September 30,

Diluted shares (as reported)

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Three Months Ended

Nine Months Ended

September 30,

Note 9 — Employee Benefit Plans

Long-Term Incentive Plan

As of September 30, 2021, there were 5.9 million shares of our common stock available for issuance under our 2005 Long-Term Incentive Plan, as amended and restated (the “2005 Incentive Plan”).

During the nine-month period ended September 30, 2021, the following grants of share-based awards were made under the 2005 Incentive Plan:

As of March 31, 2022, there were 4.2 million shares of our common stock available for issuance under our 2005 Long-Term Incentive Plan, as amended and restated (the “2005 Incentive Plan”).

During the three-month period ended March 31, 2022, the following grants of share-based awards were made under the 2005 Incentive Plan:

Date of Grant

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January 4, 2022 (2)

100 % on January 1, 2023

April 1, 2021 (3)

100 % on January 1, 2023

July 1, 2021 (3)

Restricted stock

100 % on January 1, 2024

July 23, 2021 (4)

100 % on July 23, 2022

(1) Reflects grants of restricted stock units (“RSUs”) to our executive officers.

(2) Reflects grants of performance share units (“PSUs”) to our executive officers.

These PSUs consist of two components:

(i) 50 % based on the performance of our common stock and (ii) 50 % based on cumulative total Free Cash Flow.

The grant date fair value represents the average grant date fair value of the two components.

(3) Reflects grants of restricted stock to certain independent members of our Board of Directors (our “Board”) who have elected to take their quarterly fees in stock in lieu of cash.

(4) Reflects a grant of restricted stock made to a new independent member of our Board upon his joining our Board.

(1) Reflects grants to our executive officers.

(2) Reflects grants to certain independent members of our Board of Directors (our “Board”) who have elected to take their quarterly fees in stock in lieu of cash.

Compensation cost for restricted stock is the product of the grant date fair value of each share and the number of shares granted and is recognized over the applicable vesting period on a straight-line basis.

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No restricted stock awards have been granted to our executive officers or other employees in 2022.

For the three- and nine-month periods ended September 30, 2021, $ 0.8 million and $ 2.5 million, respectively, were recognized as share-based compensation related to restricted stock.

For the three- and nine-month periods ended September 30, 2020, $ 1.1 million and $ 3.2 million, respectively, were recognized as share-based compensation related to restricted stock.

Our existing PSUs that were granted prior to 2021 are to be settled solely in shares of our common stock and are accounted for as equity awards.

Those PSUs contain a service condition and a market condition.

PSUs granted in 2021 may be settled in either cash or shares of our common stock upon vesting at the discretion of the Compensation Committee of our Board and are initially accounted for as equity awards.

The PSUs granted in 2021 consist of two components:

(i) 50 % based on the performance of our common stock against peer group companies, which contains a service condition and a market condition, and (ii) 50 % based on cumulative total Free Cash Flow, which contains a service condition and a performance condition.

For the three-month periods ended March 31, 2022 and 2021, $ 0.6 million and $ 0.8 million, respectively, were recognized as share-based compensation related to restricted stock.

Our performance share units (“PSUs”) that were granted prior to 2021 are to be settled solely in shares of our common stock and are accounted for as equity awards.

Those PSUs, which contain a service and a market condition, are based on the performance of our common stock against peer group companies.

Our PSUs granted beginning 2021 may be settled in either cash or shares of our common stock upon vesting at the discretion of the Compensation Committee of our Board and have been accounted for as equity awards.

Those PSUs consist of two components:

(i) 50 % based on the performance of our common stock against peer group companies, which component contains a service and a market condition, and (ii) 50 % based on cumulative total Free Cash Flow, which component contains a service and a performance condition.

Free Cash Flow is calculated as cash flows from operating activities less capital expenditures, net of proceeds from sale of assets.

Our PSUs cliff vest at the end of a three-year period with the maximum amount of the award being 200 % of the original PSU awards and the minimum amount being zero .

Compensation cost for PSUs that have a service condition and a market condition and are accounted for as equity awards is measured based on the grant date estimated fair value and recognized over the vesting period on a straight-line basis.

The grant date estimated fair value is determined using a Monte Carlo simulation model.

Compensation cost for PSUs that have a service condition and a performance condition and are accounted for as equity awards is initially measured based on the grant date fair value.

For PSUs that have a service and a market condition and are accounted for as equity awards, compensation cost is measured based on the grant date estimated fair value determined using a Monte Carlo simulation model and subsequently recognized over the vesting period on a straight-line basis.

For PSUs that have a service and a performance condition and are accounted for as equity awards, compensation cost is initially measured based on the grant date fair value.

Cumulative compensation cost is subsequently adjusted at the end of each reporting period to reflect the current estimation of achieving the performance condition.

For the three- and nine-month periods ended September 30, 2021, $ 1.0 million and $ 3.1 million, respectively, were recognized as share-based compensation related to equity PSUs.

For the three- and nine-month periods ended September 30, 2020, $ 1.0 million and $ 3.0 million, respectively, were recognized as share-based compensation related to equity PSUs.

For the three-month periods ended March 31, 2022 and 2021, $ 1.1 million and $ 1.0 million, respectively, were recognized as share-based compensation related to equity PSUs.

In January 2022, based on the performance of our common stock price as compared to our performance peer group over a three-year period, 559,150 equity PSUs granted in 2019 vested at 157 %, representing 876,469 shares of our common stock with a total market value of $ 3.2 million.

RSUs granted in 2021 have been accounted for as liability awards.

Our restricted stock units (“RSUs”) may be settled in either cash or shares of our common stock upon vesting at the discretion of the Compensation Committee and have been accounted for as liability awards.

Liability RSUs are measured at their estimated fair value at each balance sheet date, and subsequent changes in the fair value of the awards are recognized in earnings for the portion of the award for which the requisite service period has elapsed.

Cumulative compensation cost for vested liability RSUs equals the actual payout value upon vesting.

Compensation cost recognized for the three-month period ended September 30, 2021 was minimal.

For the nine-month period ended September 30, 2021, $ 0.4 million was recognized as compensation cost.

For the three-month periods ended March 31, 2022 and 2021, $ 0.6 million and $ 0.2 million, respectively, were recognized as compensation cost.

In 2022 and 2021, we granted fixed-value cash awards of $ 5.0 million and $ 3.5 million, respectively, to select management employees under the 2005 Incentive Plan.

The value of these cash awards is recognized on a straight-line basis over a vesting period of three years .

For the three- and nine-month periods ended September 30, 2021, $ 1.0 million and $ 3.0 million, respectively, were recognized as compensation cost.

For the three- and nine-month periods ended September 30, 2020, $ 1.1 million and $ 3.4 million, respectively, were recognized as compensation cost.

Compensation cost of $ 1.0 million was recognized for each of the three-month periods ended March 31, 2022 and 2021.

Defined Contribution Plan

We sponsor a defined contribution 401(k) retirement plan.

We suspended our discretionary contributions for an indefinite period beginning January 2021.

Our discretionary contributions are in the form of cash and consist of a 50 % match of each participant’s contribution up to 5 % of the participant’s salary.

Our discretionary contributions were suspended for 2021 and re-activated beginning January 2022.

For the three-month period ended March 31, 2022, we made $ 0.4 million in contributions to the 401(k) plan.

Employee Stock Purchase Plan

We have an employee stock purchase plan (the “ESPP”).

As of September 30, 2021, 1.6 million shares were available for issuance under the ESPP.

As of March 31, 2022, 1.5 million shares were available for issuance under the ESPP.

The ESPP currently has a purchase limit of 260 shares per employee per purchase period.

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Our well intervention vessels include the Q4000 , the Q5000 , the Q7000 , the Seawell , the Well Enhancer , and the Siem Helix 1 and Siem Helix 2 chartered vessels.

Our well intervention equipment includes IRSs, SILs and the ROAM, some of which we provide on a stand-alone basis.

Our Robotics segment provides offshore construction, trenching, seabed clearance, inspection, repair and maintenance services to both the oil and gas and the renewable energy markets globally.

Our Robotics services also complement well intervention services.

Our Robotics segment includes ROVs, trenchers, a ROVDrill and two robotics support vessels under long-term charter, the Grand Canyon II and the Grand Canyon III , as well as spot vessels as needed.

Our well intervention equipment includes intervention systems, some of which we provide on a stand-alone basis.

Our Robotics segment provides offshore construction, trenching, seabed clearance and IRM services to both the oil and gas and the renewable energy markets globally.

Additionally, our Robotics services are used in and complement our well intervention services.

Our Robotics segment includes ROVs, trenchers and robotics support vessels under term charters as well as spot vessels as needed.

Our Production Facilities segment includes the HP I , the HFRS and our ownership of oil and gas properties (Note 11).

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Three Months Ended

Nine Months Ended

September 30,

Net revenues —

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Segment operating income (loss)

Goodwill impairment (1)

Corporate, eliminations and other

(1) As a result of the decline in oil prices as well as energy and energy services valuations during the first quarter 2020 due to the COVID-19 pandemic and the price war among members of the Organization of Petroleum Exporting Countries (“OPEC”) and other non-OPEC producer nations (collectively with OPEC members, “OPEC+”), we impaired all of our goodwill, which consisted entirely of goodwill attributable to the acquisition of a controlling interest in STL.

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

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Three Months Ended

Nine Months Ended

September 30,

Well Intervention

Segment assets are comprised of all assets attributable to each reportable segment.

Corporate and other includes all assets not directly identifiable with our business segments, most notably the majority of our cash and cash equivalents.

Corporate and other includes all assets not directly identifiable with our business segments.

The following table reflects total assets by reportable segment (in thousands):

September 30,

Well Intervention

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Note 11 — Asset Retirement Obligations

Asset retirement obligations (“AROs”) are recorded at fair value and consist of estimated costs for subsea infrastructure plug and abandonment (“P&A”) activities associated with our oil and gas properties.

Asset retirement obligations (“AROs”) are recorded at fair value and consist of estimated costs for subsea infrastructure decommissioning and plug and abandonment (“P&A”) activities associated with our oil and gas properties.

The estimated costs are discounted to present value using a credit-adjusted risk-free discount rate.

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AROs at January 1,

Revisions in estimates

Accretion expense

AROs at September 30,

AROs at March 31,

Note 12 — Commitments and Contingencies and Other Matters

We have long-term charter agreements with Siem Offshore AS (“Siem”) for the Siem Helix 1 and Siem Helix 2 vessels, which historically have been used in connection with our contracts with Petróleo Brasileiro S.A.

(“Petrobras”) to perform well intervention work offshore Brazil.

The initial term of the charter agreements with Siem is for seven years , with options to extend.

The Siem Helix 1 charter expires June 2023 and the Siem Helix 2 charter expires February 2024.

We have long-term charter agreements with Siem Offshore AS for the Siem Helix 1 and Siem Helix 2 vessels.

During the first quarter 2022, the charter agreements for the Siem Helix 1 and the Siem Helix 2 were extended to February 2025 and February 2027, respectively, with further options to extend.

We have time charter agreements for the Grand Canyon II and Grand Canyon III vessels.

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The Grand Canyon III charter expires May 2023.

During the first quarter 2022, we executed short-term time charter agreements for the Horizon Enabler in the North Sea and the Shelia Bordelon in the Gulf of Mexico.

Contingencies and Claims

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In one such lawsuit, during the third quarter 2021 the United States Court of Appeals for the Fifth Circuit issued a ruling adverse to us that may also have implications for some of the other cases in which we are involved, as well as the way offshore personnel are compensated throughout our industry.

We intend to further appeal this matter and to continue vigorously defending these lawsuits.

Notwithstanding that we believe we retain valid defenses, at this time we have established a liability for probable losses in certain of these matters.

We further appealed that matter and continue to vigorously defend these lawsuits.

Notwithstanding that we believe we retain valid defenses, we have established a liability for probable losses in certain of these matters.

The final outcome of these matters remains uncertain and the ultimate liability to us could be more or less than the liability established.

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The following table provides supplemental cash flow information (in thousands):

Nine Months Ended

September 30,

Interest paid, net of interest capitalized

Three Months Ended

Interest paid

Income taxes paid

(1) Exclusive of income tax refunds.

During the nine-month period ended September 30, 2021, we received $ 18.9 million in refunds related to the CARES Act.

Our capital additions include the acquisition of property and equipment for which payment has not been made.

These non-cash capital additions totaled $ 0.3 million at September 30, 2021 and $ 1.6 million at December 31, 2020.

These non-cash capital additions totaled $ 0.3 million at March 31, 2022 and December 31, 2021.

Note 14 — Allowance for Credit Losses

We estimate current expected credit losses on our accounts receivable at each reporting date.

We estimate current expected credit losses based on our credit loss history, adjusted for current factors including global economic and business conditions, offshore energy industry and market conditions, customer mix, contract payment terms and past due accounts receivable.

We estimate current expected credit losses on our accounts receivable at each reporting date based on our credit loss history, adjusted for current factors including global economic and business conditions, offshore energy industry and market conditions, customer mix, contract payment terms and past due accounts receivable.

The following table sets forth the activity in our allowance for credit losses (in thousands):

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Write-offs (2)

Adjustments (3)

Balance at September 30,

(1) Additions (reductions) in allowance for credit losses reflect credit loss reserves (releases) during the respective periods, including a $ 1.7 million credit loss reserve in 2020 related to a receivable in our Robotics segment.

Balance at March 31,

(1) Additions (reductions) in allowance for credit losses reflect credit loss reserves (releases) during the respective periods.

(2) The write-offs of allowance for credit losses reflect certain receivables related to our Robotics segment that were previously reserved and subsequently deemed to be uncollectible.

(3) The adjustment in allowance for credit losses reflects provision for current expected credit losses upon the adoption of ASU No.

2016-13 on January 1, 2020.

Note 15 — Fair Value Measurements

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The principal amount and estimated fair value of our long-term debt are as follows (in thousands):

September 30, 2021

March 31, 2022

December 31, 2021

Value (2) (3)

Term Loan (repaid September 2021) (4)

Nordea Q5000 Loan (matured January 2021) (5)

MARAD Debt (matures February 2027)

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2026 Notes (mature February 2026)

(1) Principal amount includes current maturities and excludes any related unamortized debt discount and debt issuance costs.

(1) Principal amount includes current maturities and excludes any related unamortized debt issuance costs.

See Note 5 for additional disclosures on our long-term debt.

(2) The estimated fair value of the 2022 Notes, the 2023 Notes and the 2026 Notes was determined using Level 1 fair value inputs under the market approach.

The fair value of the Term Loan, the Nordea Q5000 Loan and the MARAD Debt was estimated using Level 2 fair value inputs under the market approach, which was determined using a third-party evaluation of the remaining average life and outstanding principal balance of the indebtedness as compared to other obligations in the marketplace with similar terms.

(3) The principal amount and estimated fair value of the 2022 Notes, the 2023 Notes and the 2026 Notes are for the entire instrument inclusive of the conversion feature, which had been accounted for in shareholders’ equity through December 31, 2020.

(4) The Term Loan was fully repaid in September 2021 concurrent with our entering into the ABL Facility (Note 5).

(5) The Nordea Q5000 Loan was fully repaid upon maturity in January 2021 (Note 5) .

The fair value of the MARAD Debt was estimated using Level 2 fair value inputs under the market approach, which was determined using a third-party evaluation of the remaining average life and outstanding principal balance of the indebtedness as compared to other obligations in the marketplace with similar terms.

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 1. Financial Statements