What changed in this filing

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Item 1. Financial Statements

2023-07-27 compared with 2023-04-26 · 162 added, 112 removed, 505 unchanged (35% of the section changed)

43 unchanged sentences

Three Months Ended

Six Months Ended

Cost of sales

4 unchanged sentences

Selling, general and administrative expenses

Loss from operations

Income (loss) from operations

Equity in earnings of investment

Net interest expense

Other income (expense), net

Other expense, net

Royalty income and other

Loss before income taxes

Income tax provision (benefit)

Loss per share of common stock:

Income (loss) before income taxes

Income tax provision

Net income (loss)

Earnings (loss) per share of common stock:

Weighted average common shares outstanding:

2 unchanged sentences

AND SUBSIDIARIES

CONDENSED CONSOLIDATED STATEMENTS OF COMPREHENSIVE LOSS

CONDENSED CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME (LOSS)

(in thousands)

Three Months Ended

Six Months Ended

Net income (loss)

Other comprehensive income (loss), net of tax:

1 unchanged sentence

Other comprehensive income (loss), net of tax

Comprehensive loss

Comprehensive income (loss)

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

5 unchanged sentences

Shareholders’

Balance, December 31, 2022

Balance, March 31, 2023

Foreign currency translation adjustments

2 unchanged sentences

Share-based compensation

Balance, June 30, 2023

Comprehensive

Shareholders’

Balance, March 31, 2022

Foreign currency translation adjustments

Activity in company stock plans, net and other

Share-based compensation

Balance, June 30, 2022

Comprehensive

2 unchanged sentences

Foreign currency translation adjustments

Repurchases of common stock

Activity in company stock plans, net and other

Share-based compensation

Balance, March 31, 2022

Balance, June 30, 2023

Comprehensive

Shareholders’

Balance, December 31, 2021

Foreign currency translation adjustments

Activity in company stock plans, net and other

Share-based compensation

Balance, June 30, 2022

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:

Adjustments to reconcile net loss to net cash provided by operating activities:

Net income (loss)

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

Depreciation and amortization

2 unchanged sentences

Deferred income taxes

Equity in earnings of investment

Gain on disposition of assets, net

Unrealized foreign currency (gain) loss

Unrealized foreign currency loss

Change in fair value of contingent consideration

5 unchanged sentences

Deferred recertification and dry dock costs, net

Net cash used in operating activities

Net cash provided by (used in) operating activities

Cash flows from investing activities:

Capital expenditures

Distribution from equity investment, net

Proceeds from sale of assets

Net cash used in investing activities

Net cash provided by (used in) investing activities

Cash flows from financing activities:

Repayment of convertible senior notes

Repayment of MARAD Debt

24 unchanged sentences

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 loss, statements of shareholders’ equity and statements of cash flows, as applicable.

The operating results for the three-month period ended March 31, 2023 are not necessarily indicative of the results that may be expected for the year ending December 31, 2023.

The operating results for the three- and six-month periods ended June 30, 2023 are not necessarily indicative of the results that may be expected for the year ending December 31, 2023.

Our balance sheet as of December 31, 2022 included herein has been derived from the audited balance sheet as of December 31, 2022 included in our 2022 Annual Report on Form 10-K (our “2022 Form 10-K”).

3 unchanged sentences

Note 2 — Company Overview

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

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

Our services are centered on a three-legged business model well positioned for a global energy transition:

1 unchanged sentence

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

● 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;

● 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 the abandonment market.

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

● Decommissioning — we are 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 the abandonment market.

We provide services primarily in the Gulf of Mexico, U.S.

East Coast, Brazil, North Sea, Asia Pacific and West Africa regions.

We have expanded our service capabilities to the Gulf of Mexico shelf with the acquisition of Alliance group of companies (collectively “Alliance”) on July 1, 2022 (Note 3), which we have re-branded as Helix Alliance.

We expanded our service capabilities to the Gulf of Mexico shelf with the acquisition of Alliance group of companies (collectively “Alliance”) on July 1, 2022 (Note 3), which we re-branded as Helix Alliance.

Our North Sea operations and our Gulf of Mexico shelf operations related to Helix Alliance are usually subject to seasonal changes in demand, which generally peaks in the summer months and declines in the winter months.

1 unchanged sentence

Well Intervention, Robotics, Shallow Water Abandonment, which was formed in the third quarter 2022 comprising the Helix Alliance business (Note 12), and Production Facilities.

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 segment provides services enabling our customers to safely access subsea 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 .

3 unchanged sentences

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

We offer our ROVs, trenchers and the IROV on a stand-alone basis or on an integrated basis with chartered robotics support vessels.

Our Shallow Water Abandonment segment provides services in support of the upstream and midstream ‎industries predominantly in the Gulf of Mexico shelf, including offshore oilfield decommissioning and ‎reclamation, project management, engineered solutions, intervention, maintenance, repair, heavy lift and commercial diving services.

Our Shallow Water Abandonment segment includes a diversified fleet of marine assets including liftboats, offshore supply vessels (“OSVs”), dive support vessels (“DSVs”), a heavy lift derrick barge, a crew boat, P&A systems and coiled tubing systems.

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 mature oil and gas properties.

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

1 unchanged sentence

On July 1, 2022, we completed our acquisition of Alliance.

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

The aggregate preliminary purchase price of the Alliance acquisition was $ 145.7 million, consisting of $ 119.0 million with cash on hand and the estimated fair value of $ 26.7 million of contingent consideration related to the post-closing earn-out consideration.

The Alliance acquisition extended our energy transition strategy by adding shallow water capabilities into the growing offshore decommissioning market.

The aggregate preliminary purchase price of the Alliance acquisition was $ 145.7 million, consisting of $ 119.0 million of cash on hand and the estimated fair value of $ 26.7 million of contingent consideration related to the post-closing earn-out consideration.

The earn-out is payable in 2024 to the seller in the Alliance transaction in either cash or shares of our common stock pursuant to the terms of an Equity Purchase Agreement (the “Equity Purchase Agreement”) dated May 16, 2022.

The earn-out is not capped and is calculated based on certain financial metrics of the Helix Alliance business for 2022 and 2023 relative to amounts as set forth in the Equity Purchase Agreement.

We had finalized the purchase price allocation as of March 31, 2023 and there were no changes as compared to the amounts recorded at December 31, 2022.

The following table summarizes the final purchase consideration and the final purchase price allocation to estimated fair values of the identifiable assets acquired and liabilities assumed as of the acquisition date (in thousands):

25 unchanged sentences

Three Months Ended

Six Months Ended

Note 4 — Details of Certain Accounts

17 unchanged sentences

Deferred revenue (Note 9)

Contingent consideration (Note 17)

Total accrued liabilities

5 unchanged sentences

We charter vessels and lease facilities and equipment under non-cancelable contracts that expire on various dates through 2031.

Our operating lease additions during the three-month period ended March 31, 2023 are primarily related to the vessel charter for the Glomar Wave (Note 14).

Our operating lease additions during the three-month period ended March 31, 2022 are primarily related to the charter extensions for the Siem Helix 1 and the Siem Helix 2 .

Our operating lease additions during the six-month period ended June 30, 2023 are primarily related to the vessel charter for the Glomar Wave (Note 14).

Our operating lease additions during the six-month period ended June 30, 2022 are primarily related to the charter extensions for the Siem Helix 1 and the Siem Helix 2 .

We also sublease some of our facilities under non-cancelable sublease agreements.

1 unchanged sentence

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, 2023 are as follows (in thousands):

Maturities of our operating lease liabilities as of June 30, 2023 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

1 unchanged sentence

Note 6 — Long-Term Debt

Scheduled maturities of our long-term debt outstanding as of March 31, 2023 are as follows (in thousands):

Scheduled maturities of our long-term debt outstanding as of June 30, 2023 are as follows (in thousands):

Less than one year

10 unchanged sentences

(“Bank of America”), Wells Fargo Bank, N.A.

and Zions Bancorporation and on July 1, 2022 we entered into a first amendment to the credit agreement (collectively, the “Amended ABL Facility”).

and Zions Bancorporation and subsequently we entered into amendments to the credit agreement on July 1, 2022 and June 23, 2023 (collectively, the “Amended ABL Facility”).

The Amended ABL Facility provides for a $ 120 million asset-based revolving credit facility, which matures on September 30, 2026 , with a springing maturity 91 days prior to the maturity of any outstanding indebtedness with a principal amount in excess of $ 50 million.

4 unchanged sentences

customer accounts receivable and cash, and provides for a $ 20 million sub-limit for the issuance of letters of credit.

As of March 31, 2023, we had no borrowings under the Amended ABL Facility, and our available borrowing capacity under that facility, based on the borrowing base, totaled $ 80.0 million, net of $ 6.9 million of letters of credit issued under that facility.

As of June 30, 2023, we had no borrowings under the Amended ABL Facility, and our available borrowing capacity under that facility, based on the borrowing base, totaled $ 102.5 million, net of $ 9.5 million of letters of credit issued under that facility.

We and certain of our U.S.

subsidiaries including Helix Alliance are the current borrowers under the Amended ABL Facility, whose obligations under the Amended ABL Facility are guaranteed by those borrowers and certain other U.S.

subsidiaries are the current borrowers under the Amended ABL Facility, whose obligations under the Amended ABL Facility are guaranteed by those borrowers and certain other U.S.

subsidiaries, excluding Cal Dive I – Title XI, Inc.

12 unchanged sentences

The Amended ABL Facility requires us to satisfy and maintain a fixed charge coverage ratio of not less than 1.0 to 1.0 if availability is less than the greater of 10 % of the borrowing base or $ 12 million.

The Amended ABL Facility also requires us to maintain a pro forma minimum excess availability of $ 20 million for the 91 days prior to the maturity of each of our outstanding convertible senior notes and for any portion of the Alliance earnout payment to be made in cash.

The Amended ABL Facility also (i) limits the amount of permitted debt for the deferred purchase price of property not to exceed $ 50 million, (ii) establishes an excess availability requirement for the portion of any post-closing earn-out consideration related to our acquisition of Alliance that will be paid in cash (Note 3), and (iii) provides for potential pricing adjustments based on specific metrics and performance targets determined by us and Bank of America, as agent with respect to the Amended ABL Facility, related to environmental, social and governance (“ESG”) changes implemented by us in our business.

The Amended ABL Facility also requires us to maintain a pro forma minimum excess availability of $ 30 million for the 91 days prior to the maturity of each of our outstanding convertible senior notes and for any portion of the Alliance earn-out payment to be made in cash.

The Amended ABL Facility also (i) limits the amount of permitted debt for the deferred purchase price of property not to exceed $ 50 million, and (ii) provides for potential pricing adjustments based on specific metrics and performance targets determined by us and Bank of America, as agent with respect to the Amended ABL Facility, related to environmental, social and governance (“ESG”) changes implemented by us in our business.

Convertible Senior Notes Due 2022 (“2022 Notes”)

1 unchanged sentence

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

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

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.

Convertible Senior Notes Due 2023 (“2023 Notes”)

2 unchanged sentences

The 2023 Notes are convertible by their holders at any time beginning March 15, 2023 at an initial conversion rate of 105.6133 shares of our common stock per $1,000 principal amount, which currently represents 3,168,399 potentially convertible shares at an initial conversion price of approximately $ 9.47 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.

Upon conversion, we have the right to satisfy our conversion obligation by delivering cash, shares of our common stock or any combination thereof and in July 2023, we provided notice that we elect to pay in cash or a combination of cash and common stock to satisfy our conversion obligation upon conversion of any 2023 Notes between July 13, 2023 and September 15, 2023.

Holders of the 2023 Notes may 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.

6 unchanged sentences

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

For each of the three-month periods ended March 31, 2023 and 2022, 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 each of the three- and six-month periods ended June 30, 2023 and 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 periods.

Convertible Senior Notes Due 2026 (“2026 Notes”)

13 unchanged sentences

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

For each of the three-month periods ended March 31, 2023 and 2022, 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 each of the three- and six-month periods ended June 30, 2023 and 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.

2026 Capped Calls

19 unchanged sentences

In accordance with the Amended 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 Amended 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, 2023, we were in compliance with these covenants.

As of June 30, 2023, 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, 2023 and 2022, we recognized income tax (benefit) expense of $( 2.0 ) million and $ 2.1 million, respectively, resulting in effective tax rates of 28.1 % and ( 5.4 )%, 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.

The effective tax rate for the three-month period ended March 31, 2023 was higher than the U.S.

For the three- and six-month periods ended June 30, 2023, we recognized income tax expense of $ 3.3 million and $ 1.3 million, respectively, resulting in effective tax rates of 31.8 % and 40.1 %, respectively.

The effective tax rates for these periods were higher than the U.S.

statutory rate primarily due to certain non-deductible expenses and non-creditable foreign income taxes.

For the three-month period ended March 31, 2022, 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 losses without tax benefits.

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, 2022, our aggregate tax expense was greater than the aggregate tax benefit of our losses, resulting in negative effective tax rates.

Note 8 — Share Repurchase Programs

7 unchanged sentences

Any repurchased shares are expected to be cancelled.

During the three-month period ended March 31, 2023, we repurchased a total of 660,000 shares of our common stock for approximately $ 5.0 million or an average of $ 7.55 per share pursuant to the 2023 Repurchase Program.

During the six-month period ended June 30, 2023, we repurchased a total of 1,410,000 shares of our common stock for approximately $ 10.1 million or an average of $ 7.13 per share pursuant to the 2023 Repurchase Program.

Note 9 — Revenue from Contracts with Customers

7 unchanged sentences

Shallow Water

Three months ended March 31, 2023

Three months ended March 31, 2022

Three months ended June 30, 2023

Three months ended June 30, 2022

Six months ended June 30, 2023

Six months ended June 30, 2022

Contract Balances

2 unchanged sentences

Contract assets are reflected in “Other current assets” in the accompanying condensed consolidated balance sheets (Note 4).

Contract assets were $ 0.7 million as of March 31, 2023 and $ 6.3 million as of December 31, 2022.

We had no credit losses on our contract assets for the three-month periods ended March 31, 2023 and 2022.

Contract assets were $ 7.1 million as of June 30, 2023 and $ 6.3 million as of December 31, 2022.

We had no credit losses on our contract assets for the three- and six-month periods ended June 30, 2023 and 2022.

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 4).

Contract liabilities totaled $ 11.6 million as of March 31, 2023 and $ 10.0 million as of December 31, 2022.

Revenue recognized for the three-month periods ended March 31, 2023 and 2022 included $ 3.9 million and $ 4.3 million, respectively, that were included in the contract liability balance at the beginning of each period.

Contract liabilities totaled $ 23.6 million as of June 30, 2023 and $ 10.0 million as of December 31, 2022.

Revenue recognized for the three- and six-month periods ended June 30, 2023 included $ 9.4 million and $ 8.0 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, 2022 included $ 3.5 million and and $ 5.8 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, 2023, $ 920.4 million related to unsatisfied performance obligations was expected to be recognized as revenue in the future, with $ 554.3 million, $ 363.6 million and $ 2.5 million in 2023 , 2024 and 2025 , respectively.

As of June 30, 2023, $ 910.1 million related to unsatisfied performance obligations was expected to be recognized as revenue in the future, with $ 454.5 million, $ 453.1 million and $ 2.5 million in 2023 , 2024 and 2025 , 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, 2023.

For the three-month periods ended March 31, 2023 and 2022, revenues recognized from performance obligations satisfied (or partially satisfied) in previous periods were immaterial.

For the three-and six-month periods ended June 30, 2023 and 2022, 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 4).

Our deferred contract costs totaled $ 32.0 million as of March 31, 2023 and $ 20.4 million as of December 31, 2022.

For the three-month periods ended March 31, 2023 and 2022, we recorded $ 4.7 million and $ 4.6 million, respectively, related to amortization of these deferred contract costs.

Our deferred contract costs totaled $ 38.2 million as of June 30, 2023 and $ 20.4 million as of December 31, 2022.

For the three- and six-month periods ended June 30, 2023, we recorded $ 14.4 million and $ 19.1 million, respectively, related to amortization of these deferred contract costs.

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.

There were no associated impairment losses for any period presented.

5 unchanged sentences

For periods in which we have a net loss we do not use the two-class method as holders of our restricted shares are not obligated to share in such losses.

Basic EPS is computed by dividing net income or loss available to common shareholders by the weighted average shares of our common stock outstanding.

Basic EPS is computed by dividing net income or loss by the weighted average shares of our common stock outstanding.

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.

2 unchanged sentences

Three Months Ended

March 31, 2023

March 31, 2022

Basic and Diluted:

Net loss attributable to common shareholders

Net loss available to common shareholders

We had net losses for the three-month periods ended March 31, 2023 and 2022.

June 30, 2023

June 30, 2022

Net income (loss)

Undistributed earnings allocated to participating securities

Net income (loss) available to common shareholders, basic

Effect of dilutive securities:

Share-based awards other than participating securities

Net income (loss) available to common shareholders, diluted

Six Months Ended

June 30, 2023

June 30, 2022

Net income (loss)

Undistributed earnings allocated to participating securities

Net income (loss) available to common shareholders, basic

Effect of dilutive securities:

Share-based awards other than participating securities

Net income (loss) available to common shareholders, diluted

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

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

We have outstanding restricted stock units (“RSUs”) (Note 11) as well as post-closing earn-out consideration related to the Alliance acquisition (Note 3) that can each be settled in either cash or shares of our common stock or a combination thereof, which are not included in the computation of diluted EPS as cash settlement is assumed.

Note 11 — Employee Benefit Plans

Long-Term Incentive Plan

As of March 31, 2023, there were 3.5 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, 2023, the following grants of share-based awards were made under the 2005 Incentive Plan:

As of June 30, 2023, there were 3.5 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, 2023, the following grants of share-based awards were made under the 2005 Incentive Plan:

Date of Grant

8 unchanged sentences

100 % on January 1, 2025

April 1, 2023 (2)

Restricted stock

100 % on January 1, 2025

(1) Reflects grants to our executive officers.

3 unchanged sentences

No restricted stock awards have been granted to our executive officers or other employees since 2020.

For the three-month periods ended March 31, 2023 and 2022, $ 0.3 million and $ 0.6 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.

For the three- and six-month periods ended June 30, 2023, $ 0.3 million and $ 0.6 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.

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

Our PSUs granted beginning in January 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:

5 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, 2023 and 2022, $ 1.2 million and $ 1.1 million, respectively, were recognized as share-based compensation related to PSUs.

For the three- and six-month periods ended June 30, 2023, $ 1.2 million and $ 2.4 million, respectively, were recognized as share-based compensation related to 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 PSUs.

In January 2023, based on the performance of our common stock price as compared to our performance peer group over a three-year period, 369,938 PSUs granted in 2020 vested at 77 %, representing 285,778 shares of our common stock with a total market value of $ 3.6 million.

Our restricted stock units (“RSUs”) granted beginning 2021 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.

Our currently outstanding 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 based on the closing share price of our common stock as of 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.

For the three-month periods ended March 31, 2023 and 2022, $ 1.2 million and $ 0.6 million, respectively, were recognized as compensation cost.

For the three- and six-month periods ended June 30, 2023, $ 1.2 million and $ 2.4 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.

In 2023 and 2022, we granted fixed-value cash awards of $ 6.0 million and $ 5.5 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-month periods ended March 31, 2023 and 2022, $ 1.2 million and $ 1.0 million, respectively, were recognized as compensation cost.

Defined Contribution Plan

We sponsor a defined contribution 401(k) retirement plan (the “401(k) Plan”).

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.

For the three-month periods ended March 31, 2023 and 2022, we made $ 0.6 million and $ 0.4 million, respectively, in contributions to the 401(k) Plan.

For the three- and six-month periods ended June 30, 2023, $ 1.2 million and $ 2.4 million, respectively, were recognized as compensation cost.

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

Defined Contribution Plans

We sponsor a defined contribution 401(k) retirement plan (the “401(k) Plan”) in the U.S.

as well as various other defined contribution plans globally.

During the three- and six-month periods ended June 30, 2023, we made contributions to our defined contribution plans totaling $ 1.0 million and $ 2.1 million, respectively.

During the three- and six-month periods ended June 30, 2022, we made contributions to our defined contribution plans totaling $ 0.7 million and $ 1.5 million, respectively.

Employee Stock Purchase Plan

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

As of March 31, 2023, 1.3 million shares were available for issuance under the ESPP.

As of June 30, 2023, 1.2 million shares were available for issuance under the ESPP.

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

For more information regarding our employee benefit plans, including the 2005 Incentive Plan and the ESPP, see Note 13 to our 2022 Form 10-K.

For more information regarding our employee benefit plans, including the 2005 Incentive Plan, the 401(k) Plan and the ESPP, see Note 13 to our 2022 Form 10-K.

Note 12 — Business Segment Information

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Well Intervention, Robotics and Production Facilities.

Our U.S., U.K.

and Brazil Well Intervention operating segments are aggregated into the Well Intervention segment for financial reporting purposes.

Beginning in the third quarter 2022 as a result of the Alliance acquisition (Note 3), we formed a new reportable business segment:

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All material intercompany transactions between the segments have been eliminated.

Our U.S., U.K.

and Brazil Well Intervention operating segments are aggregated into the Well Intervention segment for financial reporting purposes.

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

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 intervention systems, some of which we provide on a stand-alone basis.

Our Robotics segment provides trenching, seabed clearance, offshore construction 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, the IROV boulder grab and robotics support vessels under term charters as well as spot vessels as needed.

We offer our ROVs, trenchers and the IROV on a stand-alone basis or on an integrated basis with chartered robotics support vessels.

Our Shallow Water Abandonment segment provides services in support of the upstream and midstream ‎industries in the Gulf of Mexico shelf, including offshore oilfield decommissioning and ‎reclamation, project management, engineered solutions, intervention, maintenance, repair, heavy lift and commercial diving services.

Our Shallow Water Abandonment segment operates a diversified fleet of marine assets including liftboats, OSVs, DSVs, a heavy lift derrick barge, a crew boat and P&A and coiled tubing systems.

Our Production Facilities segment includes the HP I , the HFRS and our ownership of oil and gas properties (Note 13).

See Note 2 for more information on our business segments.

We evaluate our performance based on operating income of each reportable segment.

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Three Months Ended

Six Months Ended

Net revenues —

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Three Months Ended

Six Months Ended

Well Intervention

Shallow Water Abandonment

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

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An ARO liability may also change based on revisions in estimated costs and/or timing to settle the obligations.

In August 2022, we made an asset acquisition from MP Gulf of Mexico, LLC (“MP GOM”), a joint venture controlled by Murphy Exploration & Production Company – USA, for all of MP GOM’s 62.5 % interest in the Thunder Hawk Field, in exchange for the assumption of MP GOM’s abandonment obligations (initially estimated at $ 23.6 million).

In August 2022, we acqured from MP Gulf of Mexico, LLC (“MP GOM”), a joint venture controlled by Murphy Exploration & Production Company – USA, all of MP GOM’s 62.5 % interest in the Thunder Hawk Field, in exchange for the assumption of MP GOM’s abandonment obligations (initially estimated at $ 23.6 million).

Our AROs also include P&A costs associated with our Droshky oil and gas properties (Note 4).

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Accretion expense

AROs at March 31,

AROs at June 30,

Note 14 — Commitments and Contingencies and Other Matters

Our Well Intervention segment has long-term charter agreements with Siem Offshore AS for the Siem Helix 1 and Siem Helix 2 vessels expiring in February 2025 and February 2027, respectively, with options to extend.

Our Robotics segment has vessel charters for the Grand Canyon II , the Grand Canyon III , the Shelia Bordelon , the Glomar Wave , the Horizon Enabler and the Siem Topaz .

Our time charter agreements for the Grand Canyon II and Grand Canyon III vessels expire in December 2027 and May 2028, respectively, with options to renew the Grand Canyon III .

Our time charter agreement for the Shelia Bordelon in the Gulf of Mexico expires in June 2024.

In January 2023, we entered into a three-year charter agreement for the Glomar Wave in the North Sea with options to extend.

We have long-term charter agreements with Siem Offshore AS for the Siem Helix 1 and Siem Helix 2 vessels expiring in February 2025 and February 2027, respectively, with options to extend.

We have time charter agreements for the Grand Canyon II and Grand Canyon III vessels expiring in December 2027 and May 2028, respectively, with options to renew.

We also have a time charter agreement for the Shelia Bordelon in the Gulf of Mexico through June 2024 and a short-term time charter agreement for the Horizon Enabler in the North Sea.

Our charter agreements for the Horizon Enabler in the North Sea and the Siem Topaz in Asia Pacific are short-term in nature.

Contingencies and Claims

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These suits are brought as collective actions and are in various stages of litigation in federal district courts.

We appealed one such lawsuit to the United States Supreme Court, which issued a ruling adverse to us in the first quarter 2023 that is likely to have implications for similar lawsuits in which we are involved.

In a separate lawsuit, during the third quarter 2022 the United States Court of Appeals for the Fifth Circuit issued an adverse ruling that may also have implications for other similar lawsuits in which we are involved.

We appealed one such lawsuit to the United States Supreme Court, which issued a ruling adverse to us in the first quarter 2023 that has implications for similar lawsuits in which we are involved.

In a separate lawsuit, during the third quarter 2022 the United States Court of Appeals for the Fifth Circuit issued an adverse ruling that is likely to have implications for other similar lawsuits in which we are involved.

We continue to vigorously defend these lawsuits, and notwithstanding that we believe we retain valid defenses, we have established a liability in each of these matters.

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

Three Months Ended

Six Months Ended

Interest paid

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

These non-cash capital additions totaled $ 0.2 million at March 31, 2023 and $ 0.3 million at December 31, 2022.

These non-cash capital additions totaled $ 0.1 million at June 30, 2023 and $ 0.3 million at December 31, 2022.

Note 16 — Allowance for Credit Losses

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Balance at January 1,

Additions (reductions) (1)

Balance at March 31,

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

Additions (1)

Balance at June 30,

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

Note 17 — Fair Value Measurements

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The following table sets forth our assets and liabilities that are measured at fair value on a recurring basis by level within the fair value hierarchy (in thousands):

Fair Value at March 31, 2023

Fair Value at June 30, 2023

Contingent consideration

Contingent consideration liability related to the Alliance acquisition (Note 3) is measured at fair value using Level 3 unobservable inputs at the end of each reporting period.

The fair value of the estimated contingent consideration is determined based on our evaluation of the probability and amount of earnout that may be achieved based on expected future performance of Helix Alliance.

The Monte Carlo simulation model is used to calculate the estimated earnout payment, which is then discounted to present value based on the expected payment date of the contingent consideration.

The fair value of the estimated contingent consideration is determined based on our evaluation of the probability and amount of earn-out that may be achieved based on expected future performance of Helix Alliance.

The Monte Carlo simulation model is used to calculate the estimated earn-out payment, which is then discounted to present value based on the expected payment date of the contingent consideration.

The changes in the fair value of contingent consideration are as follows (in thousands):

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Change in fair value

Balance at March 31,

Balance at June 30,

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

March 31, 2023

June 30, 2023

December 31, 2022

MARAD Debt (matures February 2027)

2023 Notes (mature September 2023)

2026 Notes (mature February 2026)

MARAD Debt (matures February 2027)

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

See Note 6 for additional disclosures on our long-term debt.

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

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.

(2) The estimated fair value of the 2023 Notes, the 2026 Notes and the MARAD Debt was determined 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