What changed in this filing

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Item 1. Financial Statements

2024-04-26 compared with 2023-10-25 · 199 added, 315 removed, 387 unchanged (57% of the section changed)

4 unchanged sentences

(in thousands)

September 30,

Current assets:

Cash and cash equivalents

Restricted cash

Accounts receivable, net of allowance for credit losses of $ 3,700 and $ 3,407 , respectively

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Three Months Ended

Nine Months Ended

September 30,

Cost of sales

Gain on disposition of assets, net

Gain (loss) on disposition of assets, net

Acquisition and integration costs

1 unchanged sentence

Selling, general and administrative expenses

Income (loss) from operations

Equity in earnings of investment

Loss from operations

Net interest expense

Other expense, net

Losses related to convertible senior notes

Other income (expense), net

Royalty income and other

Income (loss) before income taxes

Income tax provision

Net income (loss)

Earnings (loss) per share of common stock:

Loss before income taxes

Income tax benefit

Loss per share of common stock:

Weighted average common shares outstanding:

5 unchanged sentences

Three Months Ended

Nine Months Ended

September 30,

Net income (loss)

Other comprehensive income (loss), net of tax:

9 unchanged sentences

Shareholders’

Balance, June 30, 2023

Foreign currency translation adjustments

Settlement of convertible debt conversion

Repurchases of common stock

Activity in company stock plans, net and other

Share-based compensation

Balance, September 30, 2023

Balance, June 30, 2022

Foreign currency translation adjustments

Activity in company stock plans, net and other

Share-based compensation

Balance, September 30, 2022

Comprehensive

Shareholders’

Balance, December 31, 2023

2 unchanged sentences

Repurchases of common stock

Termination of capped calls

Activity in company stock plans, net and other

Share-based compensation

Balance, September 30, 2023

Balance, March 31, 2024

Balance, December 31, 2022

Foreign currency translation adjustments

Repurchases of common stock

Activity in company stock plans, net and other

Share-based compensation

Balance, September 30, 2022

Balance, March 31, 2023

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

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(in thousands)

Nine Months Ended

September 30,

Three Months Ended

Cash flows from operating activities:

Net income (loss)

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

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

Depreciation and amortization

Amortization of debt discount

Amortization of debt issuance costs

1 unchanged sentence

Deferred income taxes

Equity in earnings of investment

Gain on disposition of assets, net

Unrealized foreign currency loss

(Gain) loss on disposition of assets, net

Losses related to convertible senior notes

Unrealized foreign currency (gain) loss

Change in fair value of contingent consideration

1 unchanged sentence

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 operating activities

Net cash provided by (used in) operating activities

Cash flows from investing activities:

Alliance acquisition, net of cash acquired

Capital expenditures

Distribution from equity investment, net

Proceeds from sale of assets

Proceeds from insurance recoveries

Net cash used in investing activities

2 unchanged sentences

Repayment of MARAD Debt

Proceeds from settlement of capped calls

Debt issuance costs

3 unchanged sentences

Net cash used in financing activities

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

Net decrease in cash and cash equivalents and restricted cash

Cash and cash equivalents and restricted cash:

Effect of exchange rate changes on cash and cash equivalents

Net decrease in cash and cash equivalents

Cash and cash equivalents:

Balance, beginning of year

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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 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.

The operating results for the three-month period ended March 31, 2024 are not necessarily indicative of the results that may be expected for the year ending December 31, 2024.

Our balance sheet as of December 31, 2023 included herein has been derived from the audited balance sheet as of December 31, 2023 included in our 2023 Annual Report on Form 10-K (our “2023 Form 10-K”).

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

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

New accounting standards

In November 2023, the Financial Accounting Standards Board (the “FASB”) issued Accounting Standards Update (“ASU”) No.

2023-07, “Improvements to Reportable Segment Disclosures,” which requires entities to disclose, on an annual and interim basis, significant segment expenses that are regularly provided to the chief operating decision maker (the “CODM”) and included within each reported measure of segment profit or loss as well as an amount for other segment items by reportable segment and a description of its composition.

2023-07 requires all annual disclosures about a reportable segment’s profit or loss and assets to be provided in interim periods as well.

Among other things, this ASU also requires that a public entity disclose the title and position of the CODM and an explanation of how the CODM uses the reported measure(s) of segment profit or loss in assessing segment performance and deciding how to allocate resources.

2023-07 will be effective on a retrospective basis for annual periods beginning January 1, 2024 and for interim periods beginning January 1, 2025.

This ASU is not expected to have a material impact on our consolidated financial statements other than increased disclosure requirements.

In December 2023, the FASB issued ASU No.

2023-09, “Improvements to Income Tax Disclosures,” which requires entities to disclose, on an annual basis, specific categories in a tabular rate reconciliation using both percentages and reporting currency amounts and to provide additional information for reconciling items that meet a quantitative threshold.

This ASU also requires that entities disclose on an annual basis:

a) income taxes paid (net) disaggregated by federal, state and foreign taxes, b) income taxes paid (net) by individual jurisdiction, c) income (or loss) from continuing operations before income tax expense (or benefit) between domestic and foreign, and d) income tax expense (or benefit) from continuing operations by federal, state and foreign.

Certain previous disclosure requirements on unrecognized tax benefits and cumulative amount of temporary differences are eliminated.

2023-09 will be effective for us for annual periods beginning January 1, 2025.

This ASU is not expected to have a material impact on our consolidated financial statements other than increased disclosure requirements.

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

Note 2 — Company Overview

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:

Our services are key in supporting a global energy transition:

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

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● 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;

● 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.

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

● Renewables — we are an established global leader in jet trenching and provide specialty support services to renewable energy developments such as offshore wind farms, including boulder removal and unexploded ordnance clearance.

We provide a range of services to the oil and gas and renewable energy markets primarily in the Gulf of Mexico (deepwater and shelf), U.S.

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

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.

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

Our services are segregated into four reportable business segments:

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 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.

Well Intervention, Robotics, Shallow Water Abandonment and Production Facilities.

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 mitigating the need to drill new wells by extending the useful lives of existing wells and preserving the environment by preventing uncontrolled releases of oil and natural gas.

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

Our well intervention equipment includes intervention 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 clean 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 renewable energy and supporting the responsible transition away from a carbon-based economy.

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

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

We offer our ROVs, trenchers and IROV boulder grabs 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.

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).

Our Shallow Water Abandonment segment includes Helix Alliance that was acquired in July 2022, which offers 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 (“CT”) 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 1 , 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.

Note 3 — Alliance Acquisition

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

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

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):

Cash consideration

Contingent consideration

Total fair value of consideration transferred

Assets acquired:

Cash and cash equivalents

Accounts receivable

Other current assets

Property and equipment

Operating lease right-of-use assets

Intangible assets

Total assets acquired

Liabilities assumed:

Accounts payable

Accrued liabilities

Operating lease liabilities

Deferred tax liabilities

Total liabilities assumed

Net assets acquired

The pro forma summary below presents the results of operations as if the Alliance acquisition had occurred on January 1, 2022 and includes transaction accounting adjustments such as incremental depreciation and amortization expense from acquired tangible and intangible assets, elimination of interest expense on Alliance’s long-term debt that was paid off in conjunction with the acquisition, and tax-related effects.

The pro forma summary uses estimates and assumptions based on information available at the time.

Management believes the estimates and assumptions to be reasonable;

however, actual results may differ significantly from this pro forma financial information.

The pro forma information does not reflect any cost savings, operating synergies or revenue enhancements that might have been achieved from combining the operations.

The unaudited pro forma summary is provided for illustrative purposes only and does not purport to represent Helix’s actual consolidated results of operations had the acquisition been completed as of the date presented, nor should it be considered indicative of Helix’s future consolidated results of operations.

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

Nine Months Ended

September 30,

Note 3 — Details of Certain Accounts

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

September 30,

Income tax receivable

Contract assets (Note 8)

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

September 30,

Prepaid charter (1)

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

(2) Represents agreed-upon amounts that we are entitled to receive from Marathon Oil Corporation (“Marathon Oil”) for remaining P&A work to be performed by us on Droshky oil and gas properties we acquired from Marathon Oil in 2019.

(2) Represents the present value of the agreed-upon amounts that we are entitled to receive from Marathon Oil Corporation (“Marathon Oil”) for remaining P&A work to be performed by us on Droshky oil and gas properties we acquired from Marathon Oil in 2019.

Accrued liabilities consist of the following (in thousands):

September 30,

Accrued payroll and related benefits

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Deferred revenue (Note 8)

Contingent consideration (Note 17)

Earn-out consideration (1)

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).

(1) Represents the final amount of the earn-out consideration associated with the acquisition of the Alliance group of companies (collectively “Alliance”) on July 1, 2022, which was paid to the seller of Alliance in cash on April 3, 2024.

(2) Amounts as of March 31, 2024 and December 31, 2023 included $ 11.6 million and $ 9.0 million, respectively, of credits towards future services that we granted for the purchase of five P&A systems and other assets .

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

September 30,

Asset retirement obligations (Note 12)

Contingent consideration (Note 17)

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).

(1) Amount as of December 31, 2023 included $ 2.6 million of credits offered by us in exchange for the purchase of P&A equipment (see above).

Note 4 — 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 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.

The following table details the components of our lease cost (in thousands):

Three Months Ended

Nine Months Ended

September 30,

Operating lease cost

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Net lease cost

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

Maturities of our operating lease liabilities as of March 31, 2024 are as follows (in thousands):

Facilities and

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

September 30,

Weighted average remaining lease term

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

Nine Months Ended

September 30,

Three Months Ended

Cash paid for operating lease liabilities

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

(1) Our operating lease additions during the three-month period ended March 31, 2024 are primarily related to the charter extensions for the Siem Helix 1 , the Siem Helix 2 , the Grand Canyon II and the Shelia Bordelon (Note 13).

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 5 — Long-Term Debt

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

Scheduled maturities of our long-term debt outstanding as of March 31, 2024 are as follows (in thousands):

Less than one year

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Three to four years

Four to five years

Over five years

Unamortized debt discount (1)

Unamortized debt issuance costs (1)

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Long-term debt

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

Below is a summary of certain components of our indebtedness:

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

Below is a summary of our indebtedness:

Credit Agreement

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

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.

and Zions Bancorporation and subsequently we entered into amendments to the credit agreement on July 1, 2022, June 23, 2023 and November 15, 2023 (collectively, the “Amended ABL Facility”).

The Amended ABL Facility provides 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.

The Amended ABL Facility also permits us to request an increase of the facility by up to $ 30 million, subject to certain conditions.

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

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.

As of March 31, 2024, we had no borrowings under the Amended ABL Facility, and our available borrowing capacity, based on the borrowing base, totaled $ 95.6 million, net of $ 3.4 million of letters of credit issued.

We and certain of our U.S.

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borrowers and guarantors.

borrowings under the Amended ABL Facility bear interest at the Term SOFR (also known as CME Term SOFR as administered by CME Group, Inc.) rate plus a margin of 1.50 % to 2.00 % or at a base rate plus a margin of 0.50 % to 1.00 %.

borrowings under the Amended ABL Facility bear interest at the Term SOFR rate (also known as CME Term SOFR as administered by CME Group, Inc.) plus a margin of 1.50 % to 2.00 % or at a base rate plus a margin of 0.50 % to 1.00 %.

borrowings under the Amended ABL Facility denominated in U.S.

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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 $ 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”)

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 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 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”)

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

The 2026 Notes mature on February 15, 2026 unless earlier converted, redeemed or repurchased by us.

The 2026 Notes are convertible by their holders at any time beginning November 17, 2025 at an initial conversion rate of 143.3795 shares of our common stock per $1,000 principal amount, which currently represents 28,675,900 potentially convertible shares at an initial conversion price of approximately $ 6.97 per share of common stock.

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

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

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

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).

The indenture governing the 2026 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 2026 Notes together with any accrued interest will become immediately due and payable.

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

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

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

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

The capped call shares are subject to certain anti-dilution adjustments.

Each capped call option has an initial strike price of approximately $ 6.97 per share, which corresponds to the initial conversion price of the 2026 Notes, and an initial cap price of approximately $ 8.42 per share.

The strike and cap prices are subject to certain adjustments.

The 2026 Capped Calls are intended to offset some or all of the potential dilution to Helix common shares caused by any conversion of the 2026 Notes up to the cap price.

The 2026 Capped Calls can be settled in either net shares or cash at our option in components commencing December 15, 2025 and ending February 12, 2026, which could be extended under certain circumstances.

The 2026 Capped Calls are subject to either adjustment or termination upon the occurrence of specified extraordinary events affecting Helix, including a merger, tender offer, nationalization, insolvency or delisting.

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

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

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 ESG-related 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.

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

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In addition, we have agreed to bareboat charter the Q4000 from CDI Title XI for so long as the MARAD Debt remains outstanding.

The MARAD Debt is payable in equal semi-annual installments, matures in February 2027 and bears interest at a rate of 4.93 %.

The agreements relating to the bonds and the terms and conditions of our obligations to MARAD in respect of the MARAD Debt are typical for U.S.

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 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 MARAD Debt is payable in equal semi-annual installments through February 2027 and bears interest at a rate of 4.93 %.

We believe the agreements relating to the bonds and the terms and conditions of our obligations to MARAD in respect of the MARAD Debt were typical for U.S.

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

Senior Notes Due 2029 (“2029 Notes”)

On December 1, 2023, we issued $ 300 million aggregate principal amount of the 2029 Notes.

The net proceeds from the issuance of the 2029 Notes were approximately $ 291.1 million, after deducting the purchasers’ discount and debt issuance costs.

We used cash proceeds from the offering to retire the Convertible Senior Notes due 2026 (the “2026 Notes”).

See details regarding the 2026 Notes below.

The 2029 Notes bear interest at a coupon interest rate of 9.75 % per annum payable semi-annually in arrears on March 1 and September 1 of each year, beginning on March 1, 2024.

The 2029 Notes mature on March 1, 2029 unless earlier redeemed or repurchased by us.

Prior to March 1, 2026, we may, at our option, redeem the 2029 Notes, in whole or in part, at a price equal to 100 % of the aggregate principal amount of the notes to be redeemed, plus a make-whole premium and accrued and unpaid interest, if any, to, but excluding, the redemption date.

On or after March 1, 2026, we may, at our option, redeem the 2029 Notes, in whole or in part, at the redemption prices (expressed as percentages of the principal amount of the notes to be redeemed) set forth below, plus accrued and unpaid interest, if any, to, but excluding, the redemption date.

Prior to March 1, 2026, following certain equity offerings we may, at our option, on any one or more occasions, redeem up to 40 % of the 2029 Notes at a price equal to 109.750 % of the aggregate principal amount of the notes to be redeemed, plus accrued and unpaid interest, if any, to, but excluding, the redemption date, in an amount not exceeding the proceeds of such equity offerings.

2028 and thereafter

Upon the occurrence of a Change of Control Triggering Event, as defined in the indenture governing the 2029 Notes, we may be required to make an offer to repurchase all of the notes then outstanding at a price equal to 101 % of the principal amount thereof, plus accrued and unpaid interest, if any, to, but not including, the repurchase date.

The indenture governing the 2029 Notes contains customary terms and covenants, including limitations on additional indebtedness, restricted payments, liens, asset sales, transactions with affiliates, mergers and consolidations, designation of unrestricted subsidiaries, and dividend and other restrictions affecting restricted subsidiaries.

The 2029 Notes are guaranteed on a senior unsecured basis by the subsidiaries that guarantee the Amended ABL Facility, as well as certain future subsidiaries that may guarantee certain of our indebtedness, including the Amended ABL Facility.

The 2029 Notes are junior in right of payment to all our existing and future secured indebtedness and obligations and rank equally in right of payment with all our existing and future senior unsecured indebtedness.

The 2029 Notes rank senior in right of payment to any of our future subordinated indebtedness and are fully and unconditionally guaranteed by the guarantors described above on a senior basis.

During December 2023 and the first quarter 2024, we retired the 2026 Notes through various transactions using proceeds from the 2029 Notes as well as the issuance of our common stock.

In December 2023, we entered into privately negotiated agreements with certain holders of the 2026 Notes to repurchase $ 159.8 million aggregate principal amount of the 2026 Notes (the “2026 Notes Repurchases”) for 1.5 million shares of our common stock and aggregate cash payments of $ 229.7 million, plus accrued and unpaid cash interest of $ 3.8 million.

We recognized pre-tax inducement charges of $ 37.4 million for the 2026 Notes Repurchases in the fourth quarter 2023, representing the total settlement value in excess of the total conversion value of the 2026 Notes Repurchases when the final negotiated offers were accepted.

The conversion value paid in excess of the carrying amount of the 2026 Notes Repurchases is reflected in “Common stock” in the shareholders’ equity section of the accompanying condensed consolidated balance sheets.

In December 2023, $ 0.2 million aggregate principal amount of the 2026 Notes was tendered for conversion.

We settled the conversions for $ 0.3 million cash in March 2024.

The conversion value paid in excess of the $ 0.2 million carrying amount of the 2026 Notes that were tentered for conversion is reflected in “Common stock” in the shareholders’ equity section of the accompanying condensed consolidated balance sheet.

In January 2024, we issued a notice for the redemption of the remaining $ 40.0 million aggregate principal amount of the 2026 Notes to be settled in March 2024 (the “2026 Notes Redemptions”).

The redemption price consisted of the principal amount and the make-whole premium, plus accrued and unpaid interest.

Our redemption notice enabled holders of $ 39.7 million aggregate principal amount of the 2026 Notes to tender their notes for conversion prior to the redemption date, with the remaining $ 0.3 million aggregate principal amount of the notes redeemed.

We settled both the conversions and redemptions for an aggregate $ 60.2 million cash in March 2024 and recognized pre-tax losses of $ 20.9 million.

These losses are reflected in “Losses related to convertible senior notes” in the accompanying condensed consolidated statement of operations.

The 2026 Notes had a coupon interest rate of 6.75 % per annum and an effective interest rate of 7.6 %.

For the three-month periods ended March 31, 2024 and 2023, total interest expense related to the 2026 Notes was $ 0.4 million and $ 3.7 million, respectively, with coupon interest expense of $ 0.3 million and $ 3.4 million, respectively, and the amortization of debt issuance costs of $ 0.1 million and $ 0.3 million, respectively.

2026 Capped Calls

In connection with the 2026 Notes offering, we had entered into capped call transactions (the “2026 Capped Calls”) with three separate counterparties to hedge the dilution risk of the 2026 Notes.

Concurrently with the 2026 Notes Repurchases in December 2023, we terminated a proportionate amount of the 2026 Capped Calls and received $ 15.6 million in cash, recognizing an increase to “Common stock” of $ 14.2 million and a $ 1.4 million gain.

Concurrent with the settlement of the 2026 Notes Redemptions in March 2024, we terminated the remaining 2026 Capped Calls and received $ 4.4 million in cash, recognizing an increase to “Common stock” in the shareholders’ equity section of the accompanying condensed consolidated balance sheet.

In accordance with the Amended ABL Facility, the MARAD Debt and the 2029 Notes, 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, 2024, we were in compliance with these covenants.

The Convertible Senior Notes due 2023 (the “2023 Notes”) matured on September 15, 2023.

Upon maturity of the 2023 Notes, we paid $ 29.6 million in cash to settle the conversion 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 sheets.

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-month period ended March 31, 2023, total interest expense related to the 2023 Notes was $ 0.4 million, primarily from coupon interest expense.

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

Three Months Ended

Nine Months Ended

September 30,

Interest expense

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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 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.

For the three-month periods ended March 31, 2024 and 2023, we recognized income tax benefit of $ 1.7 million and $ 2.0 million, respectively, resulting in effective tax rates of 6.1 % and 28.1 %, respectively.

The effective tax rate for the three-month period ended March 31, 2024 was lower than the U.S.

statutory rate primarily due to the non-deductibility of certain losses associated with the 2026 Notes Redemptions, which was characterized as a discrete event and reported in the current quarter.

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

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

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 7 — Share Repurchase Programs

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).

In February 2023, our Board of Directors (our “Board”) authorized a share repurchase program to repurchase issued and outstanding shares of our common stock up to $ 200 million (the “2023 Repurchase Program”).

During the three-month period ended March 31, 2024, we repurchased a total of 462,585 shares of our common stock pursuant to the 2023 Repurchase Program for approximately $ 5.0 million or an average of $ 10.88 per share, of which approximately $ 0.9 million was accrued as of March 31, 2024.

The 2023 Repurchase Program has no set expiration date.

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.

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

The 2023 Repurchase Program does not obligate us to acquire any particular amount of common stock and may be modified or superseded at any time at our discretion.

The purchase of shares by us under the 2023 Repurchase Program is at our discretion and subject to prevailing financial and market conditions.

Any repurchased shares are expected to be cancelled.

Any repurchased shares are cancelled.

Note 8 — Revenue from Contracts with Customers

Disaggregation of Revenue

Our revenues are primarily derived from short-term and long-term service contracts with customers.

Our service contracts generally contain either provisions for specific time, material and equipment charges that are billed in accordance with the terms of such contracts (dayrate contracts) or lump sum payment provisions (lump sum contracts).

Our service contracts generally contain provisions for specific time, material and equipment charges that are billed in accordance with the terms of such contracts (dayrate contracts) but we occasionally contract on a lump sum basis (lump sum contracts).

We record revenues net of taxes collected from customers and remitted to governmental authorities.

Our revenues are primarily derived from short-term and long-term service contracts with customers.

Contracts are classified as long-term if all or part of the contract is to be performed over a period extending beyond 12 months from the effective date of the contract.

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Shallow Water

Three months ended September 30, 2023

Three months ended September 30, 2022

Nine months ended September 30, 2023

Nine months ended September 30, 2022

Three months ended March 31, 2024

Three months ended March 31, 2023

We provide services to our customers in the following markets that are key to our energy transition strategy:

Production maximization, Decommissioning and Renewables.

The following table provides information about disaggregated revenue by market strategy (in thousands):

Shallow Water

Three months ended March 31, 2024

Production maximization

Decommissioning

Three months ended March 31, 2023

Production maximization

Decommissioning

Contract Balances

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

Contract assets were $ 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 assets were $ 5.5 million as of March 31, 2024 and $ 5.8 million as of December 31, 2023.

We had no credit losses on our contract assets for the three-month periods ended March 31, 2024 and 2023.

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

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

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.

Contract liabilities totaled $ 20.9 million as of March 31, 2024 and $ 32.8 million as of December 31, 2023.

Revenue recognized for the three-month periods ended March 31, 2024 and 2023 included $ 16.4 million and $ 3.9 million, respectively, that were included in the contract liability balance at the beginning of each period.

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

Performance Obligations

As of September 30, 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.

As of March 31, 2024, $ 996.6 million related to unsatisfied performance obligations was expected to be recognized as revenue in the future, with $ 663.4 million, $ 309.7 million and $ 23.5 million in 2024 , 2025 and 2026 , respectively.

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

These amounts are derived from the specific terms of our contracts, and the expected timing for revenue recognition is based on the estimated start date and duration of each contract according to the information known at September 30, 2023.

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.

For the three-month periods ended March 31, 2024 and 2023, revenues recognized from performance obligations satisfied (or partially satisfied) in previous periods were immaterial.

Contract Fulfillment Costs

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

Our deferred contract costs totaled $ 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.

Our deferred contract costs totaled $ 24.0 million as of March 31, 2024 and $ 36.6 million as of December 31, 2023.

For the three-month periods ended March 31, 2024 and 2023, we recorded $ 20.3 million and $ 4.7 million, respectively, related to amortization of these deferred contract costs.

There were no associated impairment losses for any period presented.

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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 effect of convertible senior notes is computed for the periods in which they are outstanding using the if-converted method, if dilutive, 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):

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Three Months Ended

September 30, 2023

September 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

Undistributed earnings reallocated to participating securities

Net income (loss) available to common shareholders, diluted

Nine Months Ended

September 30, 2023

September 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

Undistributed earnings reallocated to participating securities

Net income (loss) available to common shareholders, diluted

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

March 31, 2024

March 31, 2023

Basic and Diluted:

Net loss available to common shareholders

Loss per share

We had net losses for the three-month periods ended March 31, 2024 and 2023.

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.

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Three Months Ended

Nine Months Ended

September 30,

Diluted shares (as reported)

Share-based awards

The following potentially dilutive shares related to the 2022 Notes, the 2023 Notes and the 2026 Notes were excluded from the diluted EPS calculation as they were anti-dilutive (in thousands):

The following potentially dilutive shares related to the 2023 Notes and the 2026 Notes were excluded from the diluted EPS calculation as they were anti-dilutive (in thousands):

Three 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.

We have outstanding restricted stock units (“RSUs”) (Note 10) that can 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 10 — Employee Benefit Plans

Long-Term 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:

As of March 31, 2024, there were approximately 2.5 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, 2024, the following grants of share-based awards were made under the 2005 Incentive Plan:

Date of Grant

Per Share/Unit

Vesting Period

Vesting Period/Vesting Date

January 1, 2024 (1)

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100 % on January 1, 2026

April 1, 2023 (2)

Restricted stock

100 % on January 1, 2025

July 1, 2023 (2)

Restricted stock

100 % on January 1, 2025

(1) Reflects grants to our executive officers.

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

Restricted stock awards are based solely on service conditions and are accounted for as equity awards.

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

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

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.

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.

For each of the three-month periods ended March 31, 2024 and 2023, we recognized $ 0.3 million as share-based compensation related to restricted stock.

Our performance share units (“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:

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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 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.

For the three-month periods ended March 31, 2024 and 2023, $ 1.3 million and $ 1.2 million, respectively, were recognized as share-based compensation related to PSUs.

In the first quarter 2024, based on the performance of our common stock price as compared to our performance peer group and our cumulative total Free Cash Flow, in each case over a three-year performance period, 452,381 PSUs granted in 2021 vested at 181 %, representing 818,812 shares of our common stock with a total market value of $ 8.4 million.

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.

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

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.

For the three-month periods ended March 31, 2024 and 2023, $ 1.5 million and $ 1.2 million, respectively, were recognized as compensation cost.

In 2024 and 2023, we granted fixed-value cash awards of $ 6.1 million and $ 6.0 million, respectively, to select management employees under the 2005 Incentive Plan.

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

For the three- and nine-month periods ended September 30, 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.

For the three-month periods ended March 31, 2024 and 2023, $ 1.4 million and $ 1.2 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 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 September 30, 2023, 1.2 million shares were available for issuance under the ESPP.

We also contribute to various other defined contribution plans globally.

For the three-month periods ended March 31, 2024 and 2023, we made contributions to our defined contribution plans totaling $ 1.4 million and $ 1.1 million, respectively.

Employee Stock Purchase Plan (“ESPP”)

As of March 31, 2024, 1.1 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, the 401(k) 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 defined contribution plans and the ESPP, see Note 13 to our 2023 Form 10-K.

Note 11 — Business Segment Information

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

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

Nine Months Ended

September 30,

Net revenues —

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Corporate, eliminations and other

Net interest expense

Losses related to convertible senior notes

Other non-operating income (expense), net

Loss before income taxes

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

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Three Months Ended

Nine Months Ended

September 30,

Well Intervention

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

September 30,

Well Intervention

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Note 12 — Asset Retirement Obligations

Our asset retirement obligations (“AROs”) relate to mature offshore oil and gas properties that we acquired with the intention to perform decommissioning work at the end of their life cycles.

Our asset retirement obligations (“AROs”) relate to mature offshore oil and gas properties (Droshky and Thunder Hawk Field) that we acquired with the intention to perform decommissioning work at the end of their life cycles.

AROs are recorded initially at fair value and consist of estimated costs for subsea infrastructure decommissioning and P&A activities associated with our oil and gas properties.

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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 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).

The following table describes the changes in our AROs (in thousands):

AROs at January 1,

Liability incurred during the period

Accretion expense

AROs at September 30,

AROs at March 31,

Note 13 — 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 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 .

Our Well Intervention segment has long-term charter agreements with Siem Offshore AS for the Siem Helix 1 and Siem Helix 2 vessels, whose terms expire in December 2030 and December 2031, respectively.

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

Our time charter agreement for the Grand Canyon II expires in December 2030.

Our time charter agreement for the Grand Canyon III expires in May 2028.

Our time charter agreement for the Shelia Bordelon in the Gulf of Mexico expires in June 2026.

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

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

Our time charter agreement for the North Sea Enabler expires in December 2025.

We have a three-year charter agreement for the Glomar Wave in the North Sea that expires in 2025.

Contingencies and Claims

Our contingent consideration liability resulting from the Alliance acquisition is subject to risk, through the remainder of the contingency period, which ends on December 31, 2023, as a result of changes in our probability weighted discounted cash flow model, which is based on internal forecasts, and changes in weighted average discount rate, which is derived from market data.

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

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

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

We are currently involved in several lawsuits filed by current and former offshore employees seeking overtime compensation.

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 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.

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

From time to time, we may incur losses related to our contracts for matters such as costs in excess of contract consideration or claims related to disputes with customers and any obligations thereunder.

While we believe we maintain appropriate accruals for such matters, the actual cost to us may be more or less than the amounts reserved.

We are involved in various legal proceedings in the normal couse of business, including claims under the General Maritime Laws of the United States and the Merchant Marine Act of 1920 (commonly referred to as the Jones Act), contract-related disputes, employee-related disputes and subsequently identified legacy issues related to Alliance.

We recognize losses for lawsuits when the probability of an unfavorable outcome is probable and we can reasonably estimate the amount of the loss.

For insured claims, we recognize such losses to the extent they exceed applicable insurance coverage.

Although we can give no assurance about the outcome of litigation, claims or other proceedings, we do not currently believe that any loss resulting from litigation, claims or other proceedings, to the extent not otherwise covered by insurance, will have a material adverse impact on our consolidated financial statements.

Note 14 — Statement of Cash Flow Information

We define cash and cash equivalents as cash and all highly liquid financial instruments with original maturities of three months or less.

We classify cash as restricted when there are legal or contractual restrictions for its withdrawal.

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

Nine Months Ended

September 30,

Three Months Ended

Interest paid

2 unchanged sentences

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

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).

These non-cash capital additions were $ 0.2 million at March 31, 2024 and $ 1.1 million at December 31, 2023.

Note 15 — Allowance for Credit Losses

3 unchanged sentences

Additions (1)

Balance at September 30,

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

Balance at March 31,

(1) Additions reflect reserves for expected credit losses during the respective periods.

Note 16 — Fair Value Measurements

1 unchanged sentence

The carrying amount of cash and cash equivalents, trade and other current receivables as well as accounts payable approximates fair value due to the short-term nature of these instruments.

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 September 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 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):

Balance at January 1,

Change in fair value

Balance at September 30,

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

September 30, 2023

March 31, 2024

December 31, 2023

2023 Notes (matured September 2023)

2026 Notes (mature February 2026)

2026 Notes (fully redeemed March 2024)

MARAD Debt (matures February 2027)

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

2029 Notes (mature March 2029)

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

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

(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.

(2) The estimated fair value was determined using Level 2 fair value inputs under the market approach, which was determined using quotes in inactive markets.

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