What changed in this filing

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Item 1. Financial Statements

2023-10-25 compared with 2023-07-27 · 154 added, 119 removed, 548 unchanged (33% of the section changed)

4 unchanged sentences

(in thousands)

September 30,

Current assets:

37 unchanged sentences

Three Months Ended

Six Months Ended

Nine Months Ended

September 30,

Cost of sales

Gross profit (loss)

Gain on disposition of assets, net

18 unchanged sentences

Three Months Ended

Six Months Ended

Nine Months Ended

September 30,

Net income (loss)

10 unchanged sentences

Shareholders’

Balance, March 31, 2023

Balance, June 30, 2023

Foreign currency translation adjustments

Settlement of convertible debt conversion

Repurchases of common stock

1 unchanged sentence

Share-based compensation

Balance, September 30, 2023

Balance, June 30, 2022

Comprehensive

Shareholders’

Balance, March 31, 2022

Foreign currency translation adjustments

1 unchanged sentence

Share-based compensation

Balance, June 30, 2022

Balance, September 30, 2022

Comprehensive

2 unchanged sentences

Foreign currency translation adjustments

Settlement of convertible debt conversion

Repurchases of common stock

1 unchanged sentence

Share-based compensation

Balance, June 30, 2023

Comprehensive

Shareholders’

Balance, September 30, 2023

Balance, December 31, 2021

2 unchanged sentences

Share-based compensation

Balance, June 30, 2022

Balance, September 30, 2022

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

3 unchanged sentences

(in thousands)

Six Months Ended

Nine Months Ended

September 30,

Cash flows from operating activities:

11 unchanged sentences

Accounts receivable, net

Income tax receivable, net of income tax payable

Other current assets

Income tax payable, net of income tax receivable

Accounts payable and accrued liabilities

Deferred recertification and dry dock costs, net

Net cash provided by (used in) operating activities

Net cash provided by operating activities

Cash flows from investing activities:

Alliance acquisition, net of cash acquired

Capital expenditures

1 unchanged sentence

Proceeds from sale of assets

Net cash provided by (used in) investing activities

Net cash used in investing activities

Cash flows from financing activities:

Repayment of convertible senior notes

Payments related to 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- 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.

The operating results for the three- and nine-month periods ended September 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”).

7 unchanged sentences

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 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.

7 unchanged sentences

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 trenching, seabed clearance, offshore construction 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.

Our Robotics segment provides trenching, seabed clearance, offshore construction and inspection, repair and maintenance (“IRM”) services to both the oil and gas and the renewable energy markets globally, thereby assisting the delivery of clean 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.

3 unchanged sentences

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.

During the third quarter 2023, we acquired assets primarily consisting of five operable P&A systems for total consideration of $ 17.6 million including $ 6.0 million in cash in addition to credits towards future services offered by us.

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 (Note 13).

3 unchanged sentences

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 aggregate purchase price of the Alliance acquisition was $ 145.7 million, consisting of $ 119.0 million of cash on hand and the acquisition-date 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.

As of September 30, 2023, the estimated fair value of contingent earn-out consideration increased to $ 74.1 million and is reported in “Accrued liabilities” in the accompanying condensed consolidated balance sheet (Note 4).

This increase reflects the improvements in Helix Alliance’s financial results to date as compared to the projections made at the time of the Alliance acquisition.

The earn-out is to be paid in the first half of 2024 and the final amount could change based on the ultimate financial performance of Helix Alliance.

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):

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The following table summarizes the pro forma results of Helix and Alliance (in thousands):

Three Months Ended

Six Months Ended

Nine Months Ended

September 30,

Note 4 — Details of Certain Accounts

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

Income tax receivable

September 30,

Contract assets (Note 9)

2 unchanged sentences

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

September 30,

Prepaid charter (1)

6 unchanged sentences

Accrued liabilities consist of the following (in thousands):

September 30,

Accrued payroll and related benefits

4 unchanged sentences

Total accrued liabilities

(1) Amount as of September 30, 2023 includes $ 9.0 million in credits toward future services offered by us in exchange for the purchase of P&A equipment in the third quarter 2023 (Note 2).

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

September 30,

Asset retirement obligations (Note 13)

1 unchanged sentence

Total other non-current liabilities

(1) Amount as of September 30, 2023 includes $ 2.6 million in credits toward future services offered by us in exchange for the purchase of P&A equipment in the third quarter 2023 (Note 2).

Note 5 — Leases

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 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 .

Our operating lease additions during the nine-month period ended September 30, 2023 are primarily related to the vessel charters for the Glomar Wave and the Horizon Enabler (Note 14).

Our operating lease additions during the nine-month period ended September 30, 2022 are primarily related to the charter extensions for the Siem Helix 1 , the Siem Helix 2 , the Grand Canyon II , the Grand Canyon III and the Shelia Bordelon .

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

1 unchanged sentence

Three Months Ended

Six Months Ended

Nine Months Ended

September 30,

Operating lease cost

3 unchanged sentences

Net lease cost

Maturities of our operating lease liabilities as of June 30, 2023 are as follows (in thousands):

Maturities of our operating lease liabilities as of September 30, 2023 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):

Six Months Ended

Nine Months Ended

September 30,

Cash paid for operating lease liabilities

1 unchanged sentence

Note 6 — Long-Term Debt

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

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

Less than one year

17 unchanged sentences

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

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.

As of September 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 $ 110.2 million, net of $ 9.8 million of letters of credit issued under that facility.

We and certain of our U.S.

17 unchanged sentences

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.

We fully paid 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 nine-month period ended September 30, 2022, total interest expense related to the 2022 Notes was $ 0.6 million, primarily from coupon interest expense.

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.

The 2023 Notes mature on September 15, 2023 unless earlier converted, redeemed or repurchased by us.

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 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.

We may redeem all or any portion of the 2023 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.

Holders of the 2023 Notes may convert any of their notes if we call the notes for redemption.

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

Holders of the 2023 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 2023 Notes).

The indenture governing the 2023 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 significant subsidiary, the principal amount of the 2023 Notes together with any accrued interest will become immediately due and payable.

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

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.

The 2023 Notes matured on September 15, 2023 .

Upon maturity of the 2023 Notes, we paid $ 29.6 million in cash to settle the conversions of $ 29.2 million aggregate principal amount of the notes, plus accrued and unpaid interest.

We recorded the conversion value in excess of such principal amount converted to “Common stock” in the accompanying condensed consolidated balance sheet.

Notes representing the remaining $ 0.8 million aggregate principal amount of the 2023 Notes were redeemed at par, plus accrued and unpaid interest.

The 2023 Notes had a coupon interest rate of 4.125 % per annum and an effective interest rate of 4.8 %.

For the three- and nine-month periods ended September 30, 2023, total interest expense related to the 2023 Notes was $ 0.3 million and $ 1.0 million, respectively, primarily from coupon interest expense.

For the three- and nine-month periods ended September 30, 2022, total interest expense related to the 2023 Notes was $ 0.4 million and $ 1.1 million, respectively, primarily from coupon interest expense.

Convertible Senior Notes Due 2026 (“2026 Notes”)

5 unchanged sentences

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.

Prior to August 15, 2023, the 2026 Notes are not redeemable.

On or after August 15, 2023, we may redeem all or any portion of the 2026 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.

Holders of the 2026 Notes may convert any of their notes if we call the notes for redemption.

On September 29, 2023, we announced that the 2026 Notes are convertible at the option of the holders from October 1, 2023 through December 31, 2023 as a result of the closing price of our common stock exceeding 130 % of the conversion price for at least 20 days of the last 30 consecutive trading days in the quarter ended September 30, 2023.

Should the closing share price conditions continue to be met in a future quarter for the 2026 Notes, the 2026 Notes will be convertible at their holders’ option during the immediately following quarter.

Prior to August 15, 2023, the 2026 Notes were not redeemable.

Beginning August 15, 2023, we may, at our option, redeem all or any portion of the 2026 Notes if the price of our common stock has been at least 130 % of the conversion price for at least 20 trading days during the 30 consecutive trading day period preceding the date we provide a notice of redemption and the trading day immediately preceding such date (redemption price condition).

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.

As of September 29, 2023, the 2026 Notes were redeemable based on the redemption price condition being met.

Our ability to redeem the 2026 Notes in the future will be subject to meeting the redemption price condition.

Holders of the 2026 Notes may convert any of their notes if we call the notes for redemption.

Holders of the 2026 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 2026 Notes).

2 unchanged sentences

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

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.

For each of the three- and nine-month periods ended September 30, 2023 and 2022, total interest expense related to the 2026 Notes was $ 3.7 million and $ 11.1 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 $ 1.0 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.

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 June 30, 2023, we were in compliance with these covenants.

In accordance with the Amended ABL Facility, 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 September 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

Nine Months Ended

September 30,

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- 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.

For the three- and nine-month periods ended September 30, 2023, we recognized income tax expense of $ 8.3 million and $ 9.6 million, respectively, resulting in effective tax rates of 34.9 % and 35.5 %, 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- 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.

For the three- and nine-month periods ended September 30, 2022, we recognized income tax expense of $ 6.5 million and $ 10.1 million, respectively, resulting in effective tax rates of ( 53.0 )% and ( 12.5 )%, respectively.

For the three- and nine-month periods ended September 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

On February 20, 2023, we announced that our Board of Directors (our “Board”) authorized a new share repurchase program (the “2023 Repurchase Program”) under which we are authorized to repurchase up to $ 200 million issued and outstanding shares of our common stock.

During the nine-month period ended September 30, 2023, we repurchased a total of 1,584,045 shares of our common stock for approximately $ 12.0 million or an average of $ 7.57 per share pursuant to a share repurchase program (the “2023 Repurchase Program”) authorized by our Board of Directors (our “Board”) in February 2023.

Under the 2023 Repurchase Program, we are authorized to repurchase up to $ 200 million issued and outstanding shares of our common stock.

Concurrent with the authorization of the 2023 Repurchase Program, our Board revoked the prior authorization to repurchase shares of our common stock in an amount equal to any equity issued to our employees, officers and directors under our share-based compensation plans, including share-based awards under our existing long-term incentive plans and shares issued to our employees under our Employee Stock Purchase Plan (Note 11).

The 2023 Repurchase Program has no set expiration date.

Repurchases under the 2023 Repurchase Program are expected to be made through open market purchases in compliance with Rule 10b-18 under the Exchange Act, privately negotiated transactions or plans, instructions or contracts established under Rule 10b5-1 under the Exchange Act.

Repurchases under the 2023 Repurchase Program have been made through open market purchases in compliance with Rule 10b-18 under the Exchange Act, but may also be made through privately negotiated transactions or plans, instructions or contracts established under Rule 10b5-1 under the Exchange Act.

The manner, timing and amount of any purchase will be determined by management based on an evaluation of market conditions, stock price, liquidity and other factors.

2 unchanged sentences

Any repurchased shares are expected to be cancelled.

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 June 30, 2023

Three months ended June 30, 2022

Six months ended June 30, 2023

Six months ended June 30, 2022

Three months ended September 30, 2023

Three months ended September 30, 2022

Nine months ended September 30, 2023

Nine months ended September 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 $ 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 assets were $ 4.9 million as of September 30, 2023 and $ 6.3 million as of December 31, 2022.

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

Contract liabilities may consist of (i) advance payments received from customers, including upfront mobilization fees allocated to a single performance obligation and recognized ratably over the contract term and/or (ii) amounts billed to the customer in excess of revenue recognized for lump sum contracts when the cost-to-cost method of revenue recognition is utilized.

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 $ 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.

Contract liabilities are reflected as “Deferred revenue,” a component of “Accrued liabilities” in the accompanying condensed consolidated balance sheets (Note 4).

Contract liabilities totaled $ 18.6 million as of September 30, 2023 and $ 10.0 million as of December 31, 2022.

Revenue recognized for the three- and nine-month periods ended September 30, 2023 included $ 15.2 million and $ 8.4 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, 2022 included $ 2.7 million and and $ 7.0 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 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.

As of September 30, 2023, $ 790.0 million related to unsatisfied performance obligations was expected to be recognized as revenue in the future, with $ 241.7 million, $ 467.1 million and $ 81.2 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 June 30, 2023.

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.

For the three-and nine-month periods ended September 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 $ 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.

Our deferred contract costs totaled $ 31.3 million as of September 30, 2023 and $ 20.4 million as of December 31, 2022.

For the three- and nine-month periods ended September 30, 2023, we recorded $ 13.7 million and $ 32.8 million, respectively, related to amortization of these deferred contract costs.

For the three- and nine-month periods ended September 30, 2022, we recorded $ 8.5 million and $ 19.7 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 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.

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 earnings per share (“EPS”) under the two-class method in periods in which we have earnings.

Under the two-class method, net income 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.

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 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.

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

Diluted EPS is computed in a similar manner after considering the potential dilutive effect of share-based awards and convertible senior notes and taking the more dilutive of the two-class method and the treasury stock method or if-converted method, as applicable.

The dilutive effect of share-based awards is computed using the treasury stock method, as applicable, which includes the incremental shares that would be hypothetically vested in excess of the number of shares assumed to be hypothetically repurchased with the assumed proceeds.

The dilutive effect of convertible senior notes is computed using the if-converted method, which assumes conversion of the convertible senior notes into shares of our common stock at the beginning of the period, giving income recognition for the add-back of related interest expense (net of tax).

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):

1 unchanged sentence

Three Months Ended

June 30, 2023

June 30, 2022

September 30, 2023

September 30, 2022

Net income (loss)

4 unchanged sentences

Share-based awards other than participating securities

Undistributed earnings reallocated to participating securities

Net income (loss) available to common shareholders, diluted

Six Months Ended

June 30, 2023

June 30, 2022

Nine Months Ended

September 30, 2023

September 30, 2022

Net income (loss)

4 unchanged sentences

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 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.

These common stock equivalents were excluded because they were deemed to be anti-dilutive, meaning their inclusion would have reduced the reported net loss per share in the applicable periods.

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

Accordingly, our diluted EPS calculation for these periods excluded the dilutive effect of share-based awards because they were deemed to be anti-dilutive, meaning their inclusion would have reduced the reported net loss per share in the applicable periods.

Shares that otherwise would have been included in the diluted per share calculations assuming we had earnings are as follows (in thousands):

Three Months Ended

Six Months Ended

Nine Months Ended

September 30,

Diluted shares (as reported)

2 unchanged sentences

Three Months Ended

Six Months Ended

Nine Months Ended

September 30,

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.

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Long-Term 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:

As of September 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 nine-month period ended September 30, 2023, the following grants of share-based awards were made under the 2005 Incentive Plan:

Date of Grant

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100 % on January 1, 2025

July 1, 2023 (2)

Restricted stock

100 % on January 1, 2025

(1) Reflects grants to our executive officers.

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

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.

For the three- and nine-month periods ended September 30, 2023, $ 0.3 million and $ 1.0 million, respectively, were recognized as share-based compensation related to restricted stock.

For the three- and nine-month periods ended September 30, 2022, $ 0.5 million and $ 1.9 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.

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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 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.

For the three- and nine-month periods ended September 30, 2023, $ 1.2 million and $ 3.5 million, respectively, were recognized as share-based compensation related to PSUs.

For the three- and nine-month periods ended September 30, 2022, $ 1.5 million and $ 3.6 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.

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

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.

For the three- and nine-month periods ended September 30, 2023, $ 3.2 million and $ 5.5 million, respectively, were recognized as compensation cost.

For the three- and nine-month periods ended September 30, 2022, $ 0.7 million and $ 1.5 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- 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.

For the three- and nine-month periods ended September 30, 2023, $ 1.1 million and $ 3.5 million, respectively, were recognized as compensation cost.

For the three- and nine-month periods ended September 30, 2022, $ 1.1 million and $ 3.2 million, respectively, were recognized as compensation cost.

Defined Contribution Plans

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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.

During the three- and nine-month periods ended September 30, 2023, we made contributions to our defined contribution plans totaling $ 1.0 million and $ 3.2 million, respectively.

During the three- and nine-month periods ended September 30, 2022, we made contributions to our defined contribution plans totaling $ 0.7 million and $ 2.2 million, respectively.

Employee Stock Purchase Plan

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

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

As of September 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.

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Note 12 — Business Segment Information

Through the second quarter 2022, we had three reportable business segments:

Well Intervention, Robotics and Production Facilities.

We have four reportable business segments:

Well Intervention, Robotics, Shallow Water Abandonment 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:

Shallow Water Abandonment, which includes the assets, liabilities and operating results of Helix Alliance.

We formed the Shallow Water Abandonment segment in the third quarter 2022 following the Alliance acquisition (Note 3).

All material intercompany transactions between the segments have been eliminated.

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Three Months Ended

Six Months Ended

Nine Months Ended

September 30,

Net revenues —

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Three Months Ended

Six Months Ended

Nine Months Ended

September 30,

Well Intervention

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

September 30,

Well Intervention

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AROs at January 1,

Liability incurred during the period

Accretion expense

AROs at June 30,

AROs at September 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 Robotics segment has vessel charters for the Grand Canyon II , the Grand Canyon III , the Shelia Bordelon , the Glomar Wave and the Horizon Enabler .

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 .

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

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

In July 2023, we entered into a new agreement to extend the Horizon Enabler charter until December 2025, with further options to extend.

Contingencies and Claims

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

Six Months Ended

Nine Months Ended

September 30,

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 $ 0.1 million at June 30, 2023 and $ 0.3 million at December 31, 2022.

These non-cash capital additions were $ 0.8 million at September 30, 2023 and $ 0.3 million at December 31, 2022.

Non-cash investing and financing activities for the nine-month period ended September 30, 2023 included a portion of P&A equipment purchase financed by the seller in the form of credits towards future services offered by us which had an estimated fair value of $ 11.6 million at the time of purchase in the third quarter 2023 (Note 2).

Non-cash investing activities for the nine-month period ended September 30, 2022 included $ 26.7 million in estimated fair value of contingent earn-out consideration as of July 1, 2022, the date of the Alliance acquisition (Note 3).

Note 16 — Allowance for Credit Losses

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Additions (1)

Balance at June 30,

Balance at September 30,

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

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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 June 30, 2023

Fair Value at September 30, 2023

Contingent consideration

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Change in fair value

Balance at June 30,

Balance at September 30,

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

June 30, 2023

September 30, 2023

December 31, 2022

2023 Notes (mature September 2023)

2023 Notes (matured September 2023)

2026 Notes (mature February 2026)

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Compared sentence by sentence after normalising whitespace, quotation marks, case and digits, so re-formatting and restated figures do not read as changed language. Wording changes appear as one removal and one addition. The current filing and the prior one are authoritative.

What changed 10-Q

Item 1. Financial Statements