What changed in this filing

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Item 1. Financial Statements

2022-07-27 compared with 2022-04-27 · 153 added, 75 removed, 498 unchanged (31% of the section changed)

42 unchanged sentences

Three Months Ended

Six Months Ended

Cost of sales

Gross profit (loss)

Loss on disposition of assets, net

Selling, general and administrative expenses

Loss from operations

Equity in earnings of investment

Net interest expense

2 unchanged sentences

Loss before income taxes

Income tax provision

Net loss attributable to redeemable noncontrolling interests

Income tax provision (benefit)

Net income (loss) attributable to redeemable noncontrolling interests

Net loss attributable to common shareholders

7 unchanged sentences

Three Months Ended

Six Months Ended

Other comprehensive income (loss), net of tax:

1 unchanged sentence

Other comprehensive income (loss), net of tax

Comprehensive income (loss)

Less comprehensive loss attributable to redeemable noncontrolling interests:

Comprehensive loss

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

Net income (loss)

Foreign currency translation gain

Comprehensive loss attributable to redeemable noncontrolling interests

Comprehensive income (loss) attributable to common shareholders

Comprehensive income (loss) attributable to redeemable noncontrolling interests

Comprehensive loss attributable to common shareholders

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

6 unchanged sentences

Noncontrolling

Balance, December 31, 2021

Balance, March 31, 2022

Foreign currency translation adjustments

1 unchanged sentence

Share-based compensation

Balance, June 30, 2022

Comprehensive

Shareholders’

Noncontrolling

Balance, March 31, 2021

Net income (loss)

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, June 30, 2021

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

2 unchanged sentences

Balance, December 31, 2021

Foreign currency translation adjustments

Activity in company stock plans, net and other

Share-based compensation

Balance, June 30, 2022

Comprehensive

Shareholders’

Noncontrolling

Balance, December 31, 2020

Cumulative-effect adjustments upon adoption of ASU No.

1 unchanged sentence

Accretion of redeemable noncontrolling interests

Acquisition of redeemable noncontrolling interests

Activity in company stock plans, net and other

Share-based compensation

Balance, March 31, 2021

Balance, June 30, 2021

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

3 unchanged sentences

(in thousands)

Three Months Ended

Six Months Ended

Cash flows from operating activities:

4 unchanged sentences

Deferred income taxes

Equity in earnings of investment

Loss on disposition of assets, net

Unrealized foreign currency (gain) loss

1 unchanged sentence

Accounts receivable, net

Income tax receivable

Other current assets

Income tax payable, net of income tax receivable

Accounts payable and accrued liabilities

2 unchanged sentences

Capital expenditures

Net cash used in investing activities

Distribution from equity investment, net

Proceeds from sale of assets

Net cash provided by (used in) investing activities

Cash flows from financing activities:

Repayment of convertible senior notes

Repayment of Term Loan

2 unchanged sentences

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 decrease in cash and cash equivalents and restricted cash

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

Cash and cash equivalents and restricted cash:

10 unchanged sentences

All material intercompany accounts and transactions have been eliminated.

These unaudited condensed consolidated financial statements have been prepared pursuant to instructions for the Quarterly Report on Form 10-Q required to be filed with the Securities and Exchange Commission (the “SEC”) and do not include all information and footnotes normally included in annual financial statements prepared in accordance with U.S.

These unaudited condensed consolidated financial statements in U.S.

dollars have been prepared in accordance with instructions for the Quarterly Report on Form 10-Q required to be filed with the Securities and Exchange Commission (the “SEC”) and do not include all information and footnotes normally included in annual financial statements prepared in accordance with U.S.

generally accepted accounting principles (“GAAP”).

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 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.

1 unchanged sentence

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.

The operating results for the three- and six-month periods ended June 30, 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 Annual Report on Form 10-K (our “2021 Form 10-K”).

These unaudited condensed consolidated financial statements should be read in conjunction with the audited annual consolidated financial statements and notes thereto included in our 2021 Form 10-K.

3 unchanged sentences

We are an international offshore energy services company that provides specialty services to the offshore energy industry, with a focus on well intervention and robotics operations.

Traditionally, our services have covered the lifecycle of an offshore oil or gas field.

In recent years, we have seen an increasing demand for our services from the offshore renewable energy market.

Our services are centered on a three-legged business model:

● Production maximization — our assets and methodologies are specifically designed to efficiently enhance and extend the lives of existing oil and gas reserves;

we also offer an alternative to take over end-of-life reserves in preparation for their abandonment;

● Decommissioning — we have historical success as a full-field abandonment contractor and believe that regulatory push for plug and abandonment (“P&A”) and transition to renewable energy will facilitate the continued growth of abandonment backlog;

● Renewable energy support — we are an established global leader in jet trenching and continue to seek to provide specialty support services to offshore wind farm developments, including boulder removal and unexploded ordnance clearance.

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

On July 1, 2022, we completed the acquisition of the Alliance group of companies (collectively “Alliance”), expanding our service capabilities to shallow waters in the Gulf of Mexico.

Our North Sea operations are subject to seasonal changes in demand, which generally peaks in the summer months and declines in the winter months.

7 unchanged sentences

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”), which combines the HP I , the Q4000 and the Q5000 with certain well control equipment that can be deployed to respond to a well control incident, and our ownership of oil and gas properties.

We also have a 20 % ownership interest in Independence Hub, LLC (“Independence Hub”) that we account for using the equity method of accounting.

In May 2022, we received a net cash distribution of $ 7.8 million from the sale of the “Independence Hub” platform owned by Independence Hub.

All of our current Production Facilities activities are located in the Gulf of Mexico.

16 unchanged sentences

Accrued interest

Income tax payable

Deferred revenue (Note 7)

9 unchanged sentences

Three Months Ended

Six Months Ended

Operating lease cost

3 unchanged sentences

Net lease cost

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

Maturities of our operating lease liabilities as of June 30, 2022 are as follows (in thousands):

Facilities and

29 unchanged sentences

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

Three Months Ended

Six Months Ended

Cash paid for operating lease liabilities

2 unchanged sentences

Note 5 — Long-Term Debt

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

Scheduled maturities of our long-term debt outstanding as of June 30, 2022 are as follows (in thousands):

Less than one year

18 unchanged sentences

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

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.

As of June 30, 2022, we had no borrowings under the ABL Facility, and our available borrowing capacity under that facility, based on the borrowing base, totaled $ 60.3 million, net of $ 2.3 million of letters of credit issued under that facility.

We and certain of our U.S.

16 unchanged sentences

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.

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.

The 2022 Notes mature on May 1, 2022 unless earlier converted, redeemed or repurchased by us.

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.

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.

On July 1, 2022, we entered into a first amendment to the ABL Facility to (i) increase the asset-based revolving credit facility from $ 80 million to $ 100 million, (ii) replace LIBOR with Term SOFR (also known as CME Term SOFR), as administered by CME Group Inc., and make certain conforming changes therewith, (iii) increase the amount of permitted debt for the deferred purchase price of property from $ 25 million to $ 50 million, (iv) increase the fixed coverage charge ratio trigger from $ 8 million to $ 10 million, (v) increase the excess availability requirements prior to the maturity of our outstanding convertible senior notes from $ 16 million to $ 20 million, (vi) establish an excess availability requirement for the portion of any post-closing earn-out consideration related to our acquisition of all of the equity interests of Alliance that will be paid in cash (Note 16), and (vii) provide for potential pricing adjustments based on specific metrics and performance targets determined by us and Bank of America, as agent with respect to the ABL Facility, related to environmental, social and governance (“ESG”) changes implemented by us in our business.

Convertible Senior Notes Due 2022 (“2022 Notes”)

We fully redeemed the $ 35 million remaining principal amount of the 2022 Notes plus accrued interest by delivering cash upon maturity on May 1, 2022.

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

For the three- and six month periods ended June 30, 2022, total interest expense related to the 2022 Notes was $ 0.1 million and $ 0.6 million, respectively, primarily from coupon interest expense.

For the three- and six-month periods ended June 30, 2021, total interest expense related to the 2022 Notes was $ 0.4 million and $ 0.8 million, respectively, with coupon interest expense of $ 0.4 million and $ 0.7 million, respectively, and the amortization of issuance costs of $ 0.1 million for the six-month period ended June 30, 2021.

Convertible Senior Notes Due 2023 (“2023 Notes”)

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.

12 unchanged sentences

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.

For the three- and six-month periods ended June 30, 2022, total interest expense related to the 2023 Notes was $ 0.3 million and $ 0.7 million, respectively, with coupon interest expense of $ 0.3 million and $ 0.6 million, respectively, and the amortization of debt issuance costs of $ 0.1 million for the six-month period ended June 30, 2022.

For the three- and six-month periods ended June 30, 2021, total interest expense related to the 2023 Notes was $ 0.3 million and $ 0.7 million, respectively, with coupon interest expense of $ 0.3 million and $ 0.6 million, respectively, and the amortization of issuance costs of $ 0.1 million for the six-month period ended June 30, 2021.

Convertible Senior Notes Due 2026 (“2026 Notes”)

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.

12 unchanged sentences

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.

For the three- and six-month periods ended June 30, 2022, total interest expense related to the 2026 Notes was $ 3.7 million and $ 7.4 million, respectively, with coupon interest expense of $ 3.4 million and $ 6.8 million, respectively, and the amortization of debt issuance costs of $ 0.3 million and $ 0.6 million, respectively.

For the three- and six-month periods ended June 30, 2021, total interest expense related to the 2026 Notes was $ 3.7 million and $ 7.3 million, respectively, with coupon interest expense of $ 3.4 million and $ 6.7 million, respectively, and the amortization of debt issuance costs of $ 0.3 million and $ 0.6 million, respectively.

2026 Capped Calls

18 unchanged sentences

government-guaranteed ship financing transactions, including customary restrictions on incurring additional liens on the Q4000 and trading restrictions with respect to the vessel as well as working capital requirements.

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

The Credit Agreement was comprised of a term loan (the “Term Loan”) and a revolving credit facility (the “Revolving Credit Facility”) with a maximum availability of $ 175 million and had a maturity date of December 31, 2021.

Concurrent with our entering into the ABL Facility on September 30, 2021, the Credit Agreement was terminated, the $ 28 million remaining balance of the Term Loan was repaid in full and the letters of credit issued under the Revolving Credit Facility were transferred to the ABL Facility.

We had no borrowings under the Revolving Credit Facility.

We previously had a credit agreement with a syndicated bank lending group for a term loan (the “Nordea Q5000 Loan”) to finance the construction of the Q5000 .

1 unchanged sentence

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.

Concurrent with our entering into the ABL Facility, the Credit Agreement was terminated.

The $ 28 million remaining balance of the Term Loan was repaid in full and the letters of credit issued under the Revolving Credit Facility were transferred to the ABL Facility.

We had no borrowings under the Revolving Credit Facility.

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

In accordance with the ABL Facility, the 2023 Notes, the 2026 Notes and the MARAD Debt, we are required to comply with certain covenants, including minimum liquidity and a springing fixed charge coverage ratio (applicable under certain conditions that are currently not applicable) 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 June 30, 2022, we were in compliance with these covenants.

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

Three Months Ended

Six Months Ended

Interest expense

4 unchanged sentences

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.

For the three- and six-month periods ended June 30, 2022, we recognized income tax expense of $ 1.4 million and $ 3.6 million, respectively, resulting in effective tax rates of ( 5.1 )% and ( 5.2 )%, respectively.

For the three- and six-month periods ended June 30, 2021, we recognized income tax benefit of $ 2.0 million and $ 1.9 million, respectively, resulting in effective tax rates of 12.6 % and 10.0 %, 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.

For the three- and six-month periods ended June 30, 2022, our aggregate tax expense was greater than the aggregate tax benefit of our losses, resulting in negative effective tax rates.

The effective tax rates in those periods were 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.

7 unchanged sentences

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

Three months ended March 31, 2022

Three months ended March 31, 2021

Three months ended June 30, 2022

Three months ended June 30, 2021

Six months ended June 30, 2022

Six months ended June 30, 2021

Contract Balances

3 unchanged sentences

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

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 assets were $ 9.1 million at June 30, 2022 and $ 0.6 million at December 31, 2021.

We had no credit losses on our contract assets for the three- and six-month periods ended June 30, 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.

1 unchanged sentence

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 $ 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.

Contract liabilities totaled $ 6.4 million at June 30, 2022 and $ 8.7 million at December 31, 2021.

Revenue recognized for the three- and six-month periods ended June 30, 2022 included $ 3.5 million and $ 5.8 million, respectively, that were included in the contract liability balance at the beginning of each period.

Revenue recognized for the three- and six-month periods ended June 30, 2021 included $ 4.2 million and $ 5.4 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 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.

As of June 30, 2022, $ 551.5 million related to unsatisfied performance obligations was expected to be recognized as revenue in the future, with $ 232.4 million, $ 233.5 million and $ 85.6 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 March 31, 2022.

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.

For the three- and six-month periods ended June 30, 2022 and 2021, revenues recognized from performance obligations satisfied (or partially satisfied) in previous periods were immaterial.

Contract Fulfillment Costs

4 unchanged sentences

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 $ 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.

Our deferred contract costs totaled $ 8.7 million at June 30, 2022 and $ 3.3 million at December 31, 2021.

For the three- and six-month periods ended June 30, 2022, we recorded $ 6.6 million and $ 11.2 million, respectively, related to amortization of these deferred contract costs.

For the three- and six-month periods ended June 30, 2021, we recorded $ 9.5 million and $ 19.9 million, respectively, related to amortization of these deferred contract costs.

There were no associated impairment losses for any period presented.

10 unchanged sentences

Three Months Ended

March 31, 2022

March 31, 2021

June 30, 2022

June 30, 2021

Basic and Diluted:

Net loss attributable to common shareholders

Net loss available to common shareholders

Six Months Ended

June 30, 2022

June 30, 2021

Basic and Diluted:

Net loss attributable to common shareholders

Accretion of redeemable noncontrolling interests

Net loss available to common shareholders

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

We had net losses for the three- and six-month periods ended June 30, 2022 and 2021.

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

2 unchanged sentences

Three Months Ended

Six Months Ended

Diluted shares (as reported)

2 unchanged sentences

Three Months Ended

Six Months Ended

Note 9 — Employee Benefit Plans

Long-Term 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:

As of June 30, 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 six-month period ended June 30, 2022, the following grants of share-based awards were made under the 2005 Incentive Plan:

Date of Grant

8 unchanged sentences

100 % on January 1, 2024

April 1, 2022 (2)

Restricted stock

100 % on January 1, 2024

(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.

(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, of which 8,013 shares granted on January 4, 2022 and 5,230 shares granted on April 1, 2022 vested upon the approval of our Board’s Compensation Committee in connection with the departure of an independent director during the second quarter 2022.

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.

1 unchanged sentence

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

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.

For the three- and six-month periods ended June 30, 2022, $ 0.8 million and $ 1.4 million, respectively, were recognized as share-based compensation related to restricted stock.

For the three- and six-month periods ended June 30, 2021, $ 0.9 million and $ 1.7 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.

8 unchanged sentences

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-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.

For the three- and six-month periods ended June 30, 2022, $ 1.1 million and $ 2.1 million, respectively, were recognized as share-based compensation related to equity PSUs.

For the three- and six-month periods ended June 30, 2021, $ 1.0 million and $ 2.1 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.

2 unchanged sentences

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

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

For the three- and six-month periods ended June 30, 2022, $ 0.2 million and $ 0.8 million, respectively, were recognized as compensation cost.

For the three- and six-month periods ended June 30, 2021, $ 0.2 million and $ 0.4 million, respectively, were recognized as compensation cost.

In 2022 and 2021, we granted fixed-value cash awards of $ 5.1 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 .

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

For the three- and six-month periods ended June 30, 2022, $ 1.1 million and $ 2.1 million, respectively, were recognized as compensation cost.

For the three- and six-month periods ended June 30, 2021, $ 1.0 million and $ 2.0 million, respectively, were recognized as compensation cost.

Defined Contribution Plan

2 unchanged sentences

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.

For the three- and six-month periods ended June 30, 2022, we made $ 0.4 million and $ 0.8 million, respectively, in contributions to the 401(k) plan.

Employee Stock Purchase Plan

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

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

As of June 30, 2022, 1.4 million shares were available for issuance under the ESPP.

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

16 unchanged sentences

Three Months Ended

Six Months Ended

Net revenues —

10 unchanged sentences

Three Months Ended

Six Months Ended

Well Intervention

6 unchanged sentences

Note 11 — Asset Retirement Obligations

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.

Asset retirement obligations (“AROs”) are recorded at fair value and consist of estimated costs for subsea infrastructure decommissioning and 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.

5 unchanged sentences

AROs at January 1,

Revisions in estimates

Accretion expense

AROs at March 31,

AROs at June 30,

Note 12 — Commitments and Contingencies and Other Matters

7 unchanged sentences

We believe that there are currently no contingencies that would have a material adverse effect on our financial position, results of operations or cash flows.

We are involved in various legal proceedings, some involving claims for personal injury under the General Maritime Laws of the United States and the Jones Act.

We are involved in various legal proceedings, some involving claims under the General Maritime Laws of the United States and the Merchant Marine Act of 1920 (commonly referred to as the Jones Act).

In addition, from time to time we receive other claims, such as contract and employment-related disputes, in the normal course of business.

2 unchanged sentences

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 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.

We further appealed that matter and in May 2022, the United States Supreme Court granted our petition for a writ of certiorari.

We continue to vigorously defend these lawsuits.

Notwithstanding that we believe we retain valid defenses, we have established a liability 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.

3 unchanged sentences

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

Three Months Ended

Six Months Ended

Interest paid

1 unchanged sentence

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 March 31, 2022 and December 31, 2021.

These non-cash capital additions totaled $ 0.3 million at June 30, 2022 and December 31, 2021.

Note 14 — Allowance for Credit Losses

4 unchanged sentences

Write-offs (2)

Balance at March 31,

Balance at June 30,

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

16 unchanged sentences

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

March 31, 2022

June 30, 2022

December 31, 2021

MARAD Debt (matures February 2027)

2022 Notes (mature May 2022)

2022 Notes (matured May 2022)

2023 Notes (mature September 2023)

4 unchanged sentences

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.

Note 16 — Subsequent Events

Alliance Acquisition

On July 1, 2022, we completed our acquisition of all of the equity interests of Alliance for approximately $ 120 million cash at closing plus post-closing earn-out consideration payable in 2024 in the event the Alliance business achieves certain financial metrics in 2022 and 2023.

Alliance provides services in support of the upstream and midstream ‎industries in the Gulf of Mexico shelf, including offshore oil field decommissioning and ‎reclamation, project management, engineered solutions, intervention, maintenance, repair, heavy lift and commercial diving services.

The acquisition extends our energy transition strategy by adding shallow-water capabilities into what we expect to be a growing offshore decommissioning market.

Due to the recent timing of the acquisition, the initial accounting for the Alliance acquisition is incomplete, and we are not able to disclose certain information relating to the acquisition, including the preliminary fair value of the contingent earn-out consideration, assets acquired and liabilities assumed.

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