UNITED STATES
|
SECURITIES AND EXCHANGE COMMISSION
|
WASHINGTON, D.C. 20549
|
[X]
|
Quarterly report pursuant to Section 13 or 15(d) of the Securities Exchange Act of 1934
|
|
For the quarterly period ended September 30, 2010
|
||
or
|
||
[ ]
|
Transition report pursuant to Section 13 or 15(d) of the Securities Exchange Act of 1934
|
|
For the transition period from__________ to__________
|
Minnesota
(State or other jurisdiction
of incorporation or organization)
|
|
95–3409686
(I.R.S. Employer
Identification No.)
|
|
||
400 North Sam Houston Parkway East
Suite 400
Houston, Texas
(Address of principal executive offices)
|
77060
(Zip Code)
|
Yes
|
[ √ ]
|
No
|
[ ]
|
Yes
|
[ √ ]
|
No
|
[ ]
|
Large accelerated filer
|
[ √ ]
|
Accelerated filer
|
[ ]
|
Non-accelerated filer
|
[ ]
|
Yes
|
[ ]
|
No
|
[ √ ]
|
PART I.
|
FINANCIAL INFORMATION
|
PAGE
|
||
Item 1.
|
Financial Statements:
|
|||
|
||||
|
|
|||
|
|
|||
|
||||
|
||||
Item 2.
|
|
|
||
Item 3.
|
||||
Item 4.
|
||||
PART II.
|
OTHER INFORMATION
|
|||
Item 1.
|
|
|||
Item 1A
|
||||
Item 2.
|
||||
Item 6.
|
|
|||
|
||||
|
September 30,
|
December 31,
|
|||||||
2010
|
2009
|
|||||||
(Unaudited)
|
||||||||
ASSETS
|
||||||||
Current assets:
|
||||||||
Cash and cash equivalents
|
$
|
325,480
|
$
|
270,673
|
||||
Accounts receivable —
Trade, net of allowance for uncollectible accounts
of $4,419 and $5,172, respectively
|
176,396
|
145,519
|
||||||
Unbilled revenue
|
17,712
|
17,854
|
||||||
Costs in excess of billing
|
24,113
|
9,305
|
||||||
Other current assets
|
125,575
|
122,209
|
||||||
Total current assets
|
669,276
|
565,560
|
||||||
Property and equipment
|
4,494,387
|
4,352,109
|
||||||
Less — accumulated depreciation
|
(1,863,609
|
)
|
(1,488,403
|
)
|
||||
2,630,778
|
2,863,706
|
|||||||
Other assets:
|
||||||||
Equity investments
|
187,112
|
189,411
|
||||||
Goodwill
|
79,093
|
78,643
|
||||||
Other assets, net
|
79,000
|
82,213
|
||||||
$
|
3,645,259
|
$
|
3,779,533
|
|||||
LIABILITIES AND SHAREHOLDERS’ EQUITY
|
||||||||
Current liabilities:
|
||||||||
Accounts payable
|
$
|
165,484
|
$
|
155,457
|
||||
Accrued liabilities
|
197,966
|
200,607
|
||||||
Current maturities of long-term debt
|
10,845
|
12,424
|
||||||
Total current liabilities
|
374,295
|
368,488
|
||||||
Long-term debt
|
1,346,698
|
1,348,315
|
||||||
Deferred income taxes
|
398,649
|
442,607
|
||||||
Asset retirement obligations
|
163,372
|
182,399
|
||||||
Other long-term liabilities
|
7,569
|
4,262
|
||||||
Total liabilities
|
2,290,583
|
2,346,071
|
||||||
Convertible preferred stock
|
1,000
|
6,000
|
||||||
Commitments and contingencies
|
||||||||
Shareholders’ equity:
|
||||||||
Common stock, no par, 240,000 shares authorized,
105,450 and 104,281 shares issued, respectively
|
905,880
|
907,691
|
||||||
Retained earnings
|
442,526
|
519,807
|
||||||
Accumulated other comprehensive loss
|
(18,984
|
)
|
(22,241
|
)
|
||||
Total controlling interest shareholders’ equity
|
1,329,422
|
1,405,257
|
||||||
Noncontrolling interests
|
24,254
|
22,205
|
||||||
Total equity
|
1,353,676
|
1,427,462
|
||||||
$
|
3,645,259
|
$
|
3,779,533
|
|||||
Three Months Ended
|
||||||||
September 30,
|
||||||||
2010
|
2009
|
|||||||
Net revenues:
|
||||||||
Contracting services
|
$
|
297,103
|
$
|
152,310
|
||||
Oil and gas
|
95,566
|
63,715
|
||||||
392,669
|
216,025
|
|||||||
Cost of sales:
|
||||||||
Contracting services
|
211,634
|
127,402
|
||||||
Oil and gas
|
93,586
|
84,469
|
||||||
Oil and gas property impairments
|
897
|
1,537
|
||||||
306,117
|
213,408
|
|||||||
Gross profit
|
86,552
|
2,617
|
||||||
Gain on oil and gas derivative contracts
|
161
|
4,598
|
||||||
Gain on sale or acquisition of assets, net
|
13
|
—
|
||||||
Selling and administrative expenses
|
(26,628
|
)
|
(21,884
|
)
|
||||
Income (loss) from operations
|
60,098
|
(14,669
|
)
|
|||||
Equity in earnings of investments
|
6,221
|
13,385
|
||||||
Gain on sale of Cal Dive common stock
|
—
|
17,901
|
||||||
Net interest expense
|
(25,479
|
)
|
(7,250
|
)
|
||||
Other income (expense)
|
4,072
|
(3,056
|
)
|
|||||
Income before income taxes
|
44,912
|
6,311
|
||||||
Provision for income taxes
|
17,965
|
4,468
|
||||||
Income from continuing operations
|
26,947
|
1,843
|
||||||
Discontinued operations, net of tax
|
—
|
3,021
|
||||||
Net income, including noncontrolling interests
|
26,947
|
4,864
|
||||||
Less: net income applicable to noncontrolling interests
|
(776
|
)
|
(844
|
)
|
||||
Net income applicable to Helix
|
26,171
|
4,020
|
||||||
Preferred stock dividends
|
(10
|
)
|
(125
|
)
|
||||
Net income applicable to Helix common shareholders
|
$
|
26,161
|
$
|
3,895
|
||||
Basic earnings per share of common stock:
|
||||||||
Continuing operations
|
$
|
0.25
|
$
|
0.01
|
||||
Discontinued operations
|
—
|
0.03
|
||||||
Net income per common share
|
$
|
0.25
|
$
|
0.04
|
||||
Diluted earnings per share of common stock:
|
||||||||
Continuing operations
|
$
|
0.25
|
$
|
0.01
|
||||
Discontinued operations
|
—
|
0.03
|
||||||
Net income per common share
|
$
|
0.25
|
$
|
0.04
|
||||
Weighted average common shares outstanding:
|
||||||||
Basic
|
104,090
|
101,282
|
||||||
Diluted
|
105,307
|
101,334
|
||||||
|
The accompanying notes are an integral part of these condensed consolidated financial statements.
|
Nine Months Ended
|
||||||||
September 30,
|
||||||||
2010
|
2009
|
|||||||
Net revenues:
|
||||||||
Contracting services
|
$
|
604,634
|
$
|
967,751
|
||||
Oil and gas
|
288,867
|
313,888
|
||||||
893,501
|
1,281,639
|
|||||||
Cost of sales:
|
||||||||
Contracting services
|
438,008
|
765,602
|
||||||
Oil and gas
|
266,032
|
151,844
|
||||||
Oil and gas property impairments
|
171,871
|
64,610
|
||||||
875,911
|
982,056
|
|||||||
Gross profit
|
17,590
|
299,583
|
||||||
Gain on oil and gas derivative contracts
|
2,643
|
83,328
|
||||||
Gain on sale or acquisition of assets, net
|
6,246
|
1,773
|
||||||
Selling and administrative expenses
|
(91,675
|
)
|
(102,609
|
)
|
||||
Income (loss) from operations
|
(65,196
|
)
|
282,075
|
|||||
Equity in earnings of investments
|
12,932
|
27,152
|
||||||
Gain on sale of Cal Dive common stock
|
—
|
77,343
|
||||||
Net interest expense
|
(61,637
|
)
|
(44,860
|
)
|
||||
Other income (expense)
|
(3,145
|
)
|
4,891
|
|||||
Income (loss) before income taxes
|
(117,046
|
)
|
346,601
|
|||||
Provision (benefit) for income taxes
|
(41,962
|
)
|
126,196
|
|||||
Income (loss) from continuing operations
|
(75,084
|
)
|
220,405
|
|||||
Discontinued operations, net of tax
|
(44
|
)
|
10,303
|
|||||
Net income (loss), including noncontrolling interests
|
(75,128
|
)
|
230,708
|
|||||
Less: net income applicable to noncontrolling interests
|
(2,049
|
)
|
(19,017
|
)
|
||||
Net income (loss) applicable to Helix
|
(77,177
|
)
|
211,691
|
|||||
Preferred stock dividends
|
(104
|
)
|
(688
|
)
|
||||
Preferred stock beneficial conversion charges
|
—
|
(53,439
|
)
|
|||||
Net income (loss) applicable to Helix common shareholders
|
$
|
(77,281
|
)
|
$
|
157,564
|
|||
Basic earnings (loss) per share of common stock:
|
||||||||
Continuing operations
|
$
|
(0.74
|
)
|
$
|
1.49
|
|||
Discontinued operations
|
—
|
0.10
|
||||||
Net income (loss) per common share
|
$
|
(0.74
|
)
|
$
|
1.59
|
|||
Diluted earnings (loss) per share of common stock:
|
||||||||
Continuing operations
|
$
|
(0.74
|
)
|
$
|
1.38
|
|||
Discontinued operations
|
—
|
0.10
|
||||||
Net income (loss) per common share
|
$
|
(0.74
|
)
|
$
|
1.48
|
|||
Weighted average common shares outstanding:
|
||||||||
Basic
|
103,772
|
97,831
|
||||||
Diluted
|
103,772
|
105,868
|
||||||
|
The accompanying notes are an integral part of these condensed consolidated financial statements.
|
Nine Months Ended
|
||||||||
September 30,
|
||||||||
2010
|
2009
|
|||||||
Cash flows from operating activities:
|
||||||||
Net income (loss), including noncontrolling interests
|
$
|
(75,128
|
)
|
$
|
230,708
|
|||
Adjustments to reconcile net income (loss), including noncontrolling interests to net cash provided by operating activities
|
||||||||
Depreciation and amortization
|
222,730
|
208,870
|
||||||
Asset impairment charge and dry hole expense
|
171,626
|
64,610
|
||||||
Equity in earnings of investments, net of distributions
|
—
|
(222
|
)
|
|||||
Amortization of deferred financing costs
|
5,731
|
4,095
|
||||||
Loss (income) from discontinued operations
|
44
|
(10,303
|
)
|
|||||
Stock compensation expense
|
6,889
|
9,435
|
||||||
Amortization of debt discount
|
6,272
|
5,878
|
||||||
Deferred income taxes
|
(53,335
|
)
|
(53,012
|
)
|
||||
Excess tax benefit from stock-based compensation
|
2,376
|
2,036
|
||||||
Gain on sale or acquisition of assets
|
(6,246
|
)
|
(1,773
|
)
|
||||
Unrealized (gain) loss on derivative contracts
|
2,304
|
(19,785
|
)
|
|||||
Gain on sale of investment in Cal Dive common stock
|
(77,343
|
)
|
||||||
Changes in operating assets and liabilities:
|
||||||||
Accounts receivable, net
|
(29,256
|
)
|
7,215
|
|||||
Other current assets
|
3,947
|
33,483
|
||||||
Income tax payable
|
4,896
|
157,931
|
||||||
Accounts payable and accrued liabilities
|
38,662
|
(46,213
|
)
|
|||||
Asset retirement obligation costs
|
(52,244
|
)
|
(16,042
|
)
|
||||
Other noncurrent, net
|
(7,458
|
)
|
(62,307
|
)
|
||||
Cash provided by operating activities
|
241,810
|
437,261
|
||||||
Cash used in discontinued operations
|
(44
|
)
|
(6,089
|
)
|
||||
Net cash provided by operating activities
|
241,766
|
431,172
|
||||||
Cash flows from investing activities:
|
||||||||
Capital expenditures
|
(179,018
|
)
|
(306,152
|
)
|
||||
Investments in equity investments
|
—
|
(551
|
)
|
|||||
Distributions from equity investments, net
|
2,108
|
4,774
|
||||||
Insurance recovery for capital items
|
16,106
|
—
|
||||||
Proceeds from sale of Cal Dive common stock
|
—
|
418,168
|
||||||
Reduction in cash from deconsolidation of Cal Dive
|
—
|
(112,995
|
)
|
|||||
Proceeds from sales of property
|
852
|
23,238
|
||||||
Other
|
(133
|
)
|
(13
|
)
|
||||
Net cash (used in) provided by investing activities
|
(160,085
|
)
|
26,469
|
|||||
Cash provided by discontinued operations
|
—
|
20,872
|
||||||
Net cash (used in) provided by investing activities
|
(160,085
|
)
|
47,341
|
Nine Months Ended
|
||||||||
September 30,
|
||||||||
2010
|
2009
|
|||||||
Cash flows from financing activities:
|
||||||||
Repayment of Helix Term Loan
|
$ |
(3,245
|
)
|
$ |
(3,245
|
)
|
||
Repayments on Helix Revolver
|
—
|
(349,500
|
)
|
|||||
Repayment of MARAD borrowings
|
(4,866
|
)
|
(4,214
|
)
|
||||
Borrowings on CDI Revolver
|
—
|
100,000
|
||||||
Repayments on CDI Term Note
|
—
|
(20,000
|
)
|
|||||
Deferred financing costs
|
(2,864
|
)
|
(50
|
)
|
||||
Repurchases of common stock
|
(11,659
|
)
|
(10,603
|
)
|
||||
Excess tax benefit from stock-based compensation
|
(2,376
|
)
|
(2,036
|
)
|
||||
Loan note repayment, preferred stock dividends paid and other
|
(1,611
|
)
|
(589
|
)
|
||||
Net cash used in financing activities
|
(26,621
|
)
|
(290,237
|
)
|
||||
Effect of exchange rate changes on cash and cash equivalents
|
(253
|
)
|
(1,383
|
)
|
||||
Net increase in cash and cash equivalents
|
54,807
|
186,893
|
||||||
Cash and cash equivalents:
|
||||||||
Balance, beginning of year
|
270,673
|
223,613
|
||||||
Balance, end of period
|
$
|
325,480
|
$
|
410,506
|
·
|
Sold six oil and gas properties for approximately $25 million;
|
·
|
Sold a total of 15.2 million shares of CDI common stock held by us to CDI for $100 million in separate transactions in January and June 2009;
|
·
|
Sold a total of 45.8 million shares of CDI common stock held by us to third parties in two separate public secondary offerings for approximately $404.4 million, net of underwriting fees, in June 2009 and September 2009 (for additional information regarding the sales of CDI common shares by us see Note 4); and
|
·
|
Sold Helix RDS Limited, our subsurface reservoir consulting business for $25 million in April 2009.
|
September 30,
|
December 31,
|
|||||||
2010
|
2009
|
|||||||
(in thousands)
|
||||||||
Other receivables
|
$
|
3,665
|
$
|
7,990
|
||||
Prepaid insurance
|
20,937
|
11,105
|
||||||
Other prepaids
|
11,784
|
21,819
|
||||||
Inventory
|
25,294
|
25,755
|
||||||
Current deferred tax assets
|
31,171
|
24,517
|
||||||
Hedging assets
|
17,648
|
6,214
|
||||||
Gas imbalance
|
6,650
|
7,655
|
||||||
Income tax receivable
|
2,489
|
8,492
|
||||||
Other
|
5,937
|
8,662
|
||||||
$
|
125,575
|
$
|
122,209
|
September 30,
|
December 31,
|
|||||||
2010
|
2009
|
|||||||
(in thousands)
|
||||||||
Restricted cash
|
$
|
35,277
|
$
|
35,409
|
||||
Deferred drydock expenses, net
|
12,836
|
12,030
|
||||||
Deferred financing costs
|
27,489
|
30,061
|
||||||
Intangible assets with finite lives, net
|
729
|
768
|
||||||
Other
|
2,669
|
3,945
|
||||||
$
|
79,000
|
$
|
82,213
|
September 30,
|
December 31,
|
|||||||
2010
|
2009
|
|||||||
(in thousands)
|
||||||||
Accrued payroll and related benefits
|
$
|
32,053
|
$
|
30,513
|
||||
Royalties payable
|
7,530
|
5,717
|
||||||
Asset retirement obligations
|
77,346
|
65,729
|
||||||
Unearned revenue
|
3,055
|
3,672
|
||||||
Accrued interest
|
15,732
|
27,830
|
||||||
Billing in excess of cost
|
4,939
|
—
|
||||||
Deposit
|
25,542
|
25,542
|
||||||
Hedge liability
|
11,196
|
19,536
|
||||||
Other
|
20,573
|
22,068
|
||||||
$
|
197,966
|
$
|
200,607
|
Three Months Ended
|
Nine Months Ended
|
|||||||||||||||
September 30,
|
September 30,
|
|||||||||||||||
2010
|
2009
|
2010
|
2009
|
|||||||||||||
Delay rental and geological and geophysical costs
|
$
|
497
|
$
|
755
|
$
|
2,025
|
$
|
2,288
|
||||||||
Dry hole expense
|
(55
|
)
|
149
|
(245
|
)
|
575
|
||||||||||
Total exploration expense
|
$
|
442
|
$
|
904
|
$
|
1,780
|
$
|
2,863
|
Cash
|
$
|
10,156
|
||
Deferred tax asset
|
2,083
|
|||
Accrued liabilities
|
(439
|
)
|
||
Asset retirement obligation
|
(5,841
|
)
|
||
Gain on acquisition of assets
|
$
|
5,959
|
Asset retirement obligation at December 31, 2009
|
$
|
248,128
|
||
Liability incurred during the period (a)
|
18,056
|
|||
Liability settled during the period
|
(47,580
|
)
|
||
Revision in estimated cash flows
|
10,428
|
|||
Accretion expense (included in depreciation and amortization)
|
11,686
|
|||
Asset retirement obligations at September 30, 2010
|
$
|
240,718
|
a)
|
Amount primarily includes the acquisition of the remaining 50% working interest in the Camelot field in February 2010 (see “United Kingdom Property” above) and the additional scope of work associated with the development of the Phoenix field. Initial production was deferred from June 2010 to allow our HP I vessel to be contracted and used in the Gulf oil spill containment efforts. Following its release from the oil spill containment response contract, the HP I mobilized to the Phoenix field, where initial production commenced on October 19, 2010.
|
Third
Quarter 2009
|
Nine Months Ended
September 30,
2009
|
|||||||
Oil and gas:
|
||||||||
Hurricane repair costs
|
$ | 5,060 | $ | 25,223 | ||||
ARO liability adjustments
|
— | 43,812 | ||||||
Hurricane-related impairments
|
— | 7,699 | ||||||
Insurance recoveries
|
— | (100,874 | ) | |||||
Net (reimbursements) costs
|
5,060 | (24,140 | ) | |||||
Contracting services:
|
||||||||
Hurricane repair costs
|
— | 776 | ||||||
Insurance recoveries
|
(159 | ) | (2,885 | ) | ||||
Net (reimbursements) costs
|
(159 | ) | (2,109 | ) | ||||
Shelf Contracting:
|
||||||||
Hurricane repair costs
|
3 | 613 | ||||||
Insurance recoveries
|
(238 | ) | (2,849 | ) | ||||
Net (reimbursements) costs
|
(235 | ) | (2,236 | ) | ||||
Totals:
|
||||||||
Hurricane repair costs
|
5,063 | 26,612 | ||||||
ARO liability adjustments
|
— | 43,812 | ||||||
Hurricane-related impairments
|
— | 7,699 | ||||||
Insurance recoveries
|
(397 | ) | (106,608 | ) | ||||
Net (reimbursements) costs
|
$ | 4,666 | $ | (28,485 | ) |
Nine Months Ended
|
||||||||
September 30,
|
||||||||
2010
|
2009
|
|||||||
Interest paid, net of capitalized interest(1)
|
$
|
60,137
|
$
|
51,696
|
||||
Income taxes paid
|
$
|
8,020
|
$
|
57,412
|
·
|
Deepwater Gateway, L.L.C. In June 2002, we, along with Enterprise Products Partners L.P. (”Enterprise”), formed Deepwater Gateway, L.L.C. (“Deepwater Gateway”), each with a 50% interest, to design, construct, install, own and operate a tension leg platform (“TLP”) production hub primarily for Anadarko Petroleum Corporation's Marco Polo field in the Deepwater Gulf of Mexico. Our investment in Deepwater Gateway totaled $100.7 million and $103.3 million as of September 30, 2010 and December 31, 2009, respectively (including capitalized interest of $1.5 million at September 30, 2010 and December 31, 2009). Distributions from Deepwater Gateway, net to our interest, totaled $2.3 million and $6.1 million for the respective three-month and nine-month periods ended September 30, 2010.
|
·
|
Independence Hub, LLC. In December 2004, we acquired a 20% interest in Independence Hub, an affiliate of Enterprise. Independence Hub owns the "Independence Hub" platform located in Mississippi Canyon Block 920 in a water depth of 8,000 feet. First production through the facility commenced in July 2007. Our investment in Independence Hub was $83.5 million and $86.1 million as of September 30, 2010 and December 31, 2009, respectively (including capitalized interest of $5.3 million and $5.6 million at September 30, 2010 and December 31, 2009, respectively). Distributions from Independence Hub, net to our interest, totaled $5.7 million and $16.4 million for the three-month and nine-month periods ended September 30, 2010, respectively.
|
Deepwater Gateway
|
Independence Hub
|
Combined
|
||||||||||||||||||
Three Months Ended
|
Three Months Ended
|
Three Months Ended
|
||||||||||||||||||
September 30,
|
September 30,
|
September 30,
|
||||||||||||||||||
2010
|
2009
|
2010
|
2009
|
2010
|
2009
|
|||||||||||||||
Revenues
|
$
|
4,343
|
$
|
3,896
|
$
|
24,500
|
$
|
30,639
|
$
|
28,843
|
$
|
34,535
|
||||||||
Operating income
|
2,240
|
1,854
|
20,927
|
27,062
|
23,167
|
28,916
|
||||||||||||||
Net income
|
2,241
|
1,855
|
20,929
|
27,066
|
23,170
|
28,921
|
||||||||||||||
Equity in earnings
|
$
|
1,120
|
$
|
928
|
$
|
4,186
|
$
|
5,413
|
$
|
5,306
|
$
|
6,341
|
Deepwater Gateway
|
Independence Hub
|
Combined
|
||||||||||||||||
Nine Months Ended
|
Nine Months Ended
|
Nine Months Ended
|
||||||||||||||||
September 30,
|
September 30,
|
September 30,
|
||||||||||||||||
2010
|
2009
|
2010
|
2009
|
2010
|
2009
|
|||||||||||||
Revenues
|
$
|
13,085
|
$
|
12,229
|
$
|
81,265
|
$
|
97,410
|
$
|
94,350
|
$
|
109,639
|
||||||
Operating income
|
6,824
|
5,008
|
70,545
|
86,677
|
77,369
|
91,685
|
||||||||||||
Net income
|
6,826
|
5,022
|
70,548
|
86,698
|
77,374
|
91,720
|
||||||||||||
Equity in earnings
|
$
|
3,413
|
$
|
2,511
|
$
|
14,110
|
$
|
17,340
|
$
|
17,523
|
$
|
19,851
|
Helix Term Loan
|
Helix Revolving Loans
|
Senior Unsecured Notes
|
Convertible Senior Notes (1)
|
MARAD Debt
|
Other(2)
|
Total
|
||||||||||||||||
Less than one year
|
$
|
4,326
|
$
|
─
|
$
|
─
|
$
|
─
|
$
|
4,645
|
$
|
1,874
|
$
|
10,845
|
||||||||
One to two years
|
4,326
|
─
|
─
|
─
|
4,877
|
─
|
9,203
|
|||||||||||||||
Two to three years
|
402,870
|
─
|
─
|
─
|
5,120
|
─
|
407,990
|
|||||||||||||||
Three to four years
|
─
|
─
|
─
|
─
|
5,376
|
─
|
5,376
|
|||||||||||||||
Four to five years
|
─
|
─
|
─
|
─
|
5,644
|
─
|
5,644
|
|||||||||||||||
Over five years
|
─
|
─
|
550,000
|
300,000
|
89,149
|
─
|
939,149
|
|||||||||||||||
Total debt
|
411,522
|
─
|
550,000
|
300,000
|
114,811
|
1,874
|
1,378,207
|
|||||||||||||||
Current maturities
|
(4,326
|
)
|
─
|
─
|
─
|
(4,645
|
)
|
(1,874
|
)
|
(10,845
|
)
|
|||||||||||
Long-term debt, less
current maturities
|
$
|
407,196
|
$
|
─
|
$
|
550,000
|
$
|
300,000
|
$
|
110,166
|
$
|
─
|
$
|
1,367,362
|
||||||||
Unamortized debt discount (3)
|
─
|
─
|
─
|
(20,664
|
)
|
─
|
─
|
(20,664
|
)
|
|||||||||||||
Long-term debt
|
$
|
407,196
|
$
|
─
|
$
|
550,000
|
$
|
279,336
|
$
|
110,166
|
$
|
─
|
$
|
1,346,698
|
||||||||
(1)
|
Beginning in December 2012, the holders may require us to repurchase the notes or we may at our own option elect to repurchase notes. If the notes are redeemed in December 2012, the amount payable in two to three years in the table above increases to approximately $708 million. The Notes do not contractually mature until March 2025.
|
(2)
|
Represents the balance of the loan provided by Kommandor RØMØ to Kommandor LLC as of September 30, 2010.
|
(3)
|
Reflects debt discount resulting from adoption of provisions of ASC Topic No. 470-20 “Convertible Debt and Other Options” on January 1, 2009. The notes will increase to $300 million face amount through accretion of non-cash interest charges through 2012.
|
Three Months Ended
|
Nine Months Ended
|
|||||||||||||||
September 30,
|
September 30,
|
|||||||||||||||
2010
|
2009
|
2010
|
2009
|
|||||||||||||
(in thousands)
|
||||||||||||||||
Interest expense
|
$
|
25,784
|
$
|
23,582
|
$
|
74,730
|
$
|
81,094
|
||||||||
Interest income
|
(263
|
)
|
(282
|
)
|
(660
|
)
|
(694
|
)
|
||||||||
Capitalized interest
|
(42
|
)
|
(16,050
|
)
|
(12,433
|
)
|
(35,540
|
)
|
||||||||
Interest expense, net
|
$
|
25,479
|
$
|
7,250
|
$
|
61,637
|
$
|
44,860
|
Three Months Ended
|
Nine Months Ended
|
|||||||||||||||
September 30,
|
September 30,
|
|||||||||||||||
2010
|
2009
|
2010
|
2009
|
|||||||||||||
Net income (loss), including noncontrolling interests
|
$
|
26,947
|
$
|
4,864
|
$
|
(75,128
|
)
|
$
|
230,708
|
|||||||
Other comprehensive income (loss), net of tax
|
||||||||||||||||
Foreign currency translation gain (loss)
|
5,436
|
(3,343
|
)
|
(8,372
|
)
|
23,689
|
||||||||||
Unrealized gain (loss) on hedges, net
|
(3,795
|
)
|
(2,883
|
)
|
12,308
|
(16,221
|
)
|
|||||||||
Unrealized loss on investment available for sale
|
(123
|
)
|
(130
|
)
|
(679
|
)
|
(130
|
)
|
||||||||
Total Comprehensive income (loss)
|
28,465
|
(1,492
|
)
|
(71,871
|
)
|
238,046
|
||||||||||
Less: Comprehensive loss applicable to noncontrolling interest
|
─
|
(844
|
)
|
─
|
(19,590
|
)
|
||||||||||
Total other comprehensive income (loss) applicable to Helix
|
$
|
28,465
|
$
|
(2,336
|
)
|
$
|
(71,871
|
)
|
$
|
218,456
|
September 30,
|
December 31,
|
|||||||
2010
|
2009
|
|||||||
Cumulative foreign currency translation adjustment
|
$
|
(20,324
|
)
|
$
|
(11,952
|
)
|
||
Unrealized gain (loss) on hedges, net
|
2,906
|
(9,402
|
)
|
|||||
Unrealized loss on investment available for sale
|
(1,566
|
)
|
(887
|
)
|
||||
Accumulated other comprehensive loss
|
$
|
(18,984
|
)
|
$
|
(22,241
|
)
|
Three Months Ended
|
Three Months Ended
|
|||||||||||||||
September 30, 2010
|
September 30, 2009
|
|||||||||||||||
Income
|
Shares
|
Income
|
Shares
|
|||||||||||||
Basic:
|
||||||||||||||||
Net income (loss) applicable to common shareholders
|
$
|
26,161
|
$
|
3,895
|
||||||||||||
Less: Undistributed net income allocable to participating securities
|
(356
|
)
|
(53
|
)
|
||||||||||||
Undistributed net income (loss) applicable to common shareholders
|
25,805
|
3,842
|
||||||||||||||
(Income) loss from discontinued operations
|
─
|
(3,021
|
)
|
|||||||||||||
Add: Undistributed net income from discontinued operations allocable to participating securities
|
─
|
41
|
||||||||||||||
Income (loss) per common share – continuing operations
|
$
|
25,805
|
104,090
|
$
|
862
|
101,282
|
Three Months Ended
September 30, 2010
|
Three Months Ended
September 30, 2009
|
|||||||||||||||
Income
|
Shares
|
Income
|
Shares
|
|||||||||||||
Diluted:
|
||||||||||||||||
Net income (loss) per common share –
continuing operations – Basic
|
$
|
25,805
|
104,090
|
$
|
862
|
101,282
|
||||||||||
Effect of dilutive securities:
|
||||||||||||||||
Stock options
|
─
|
22
|
─
|
52
|
||||||||||||
Undistributed earnings reallocated to participating securities
|
5
|
─ |
─
|
─
|
||||||||||||
Convertible Senior Notes
|
─
|
─
|
─
|
─
|
||||||||||||
Convertible preferred stock
|
─
|
1,195
|
─
|
─
|
||||||||||||
Income (loss) per common share ─
continuing operations
|
25,810
|
862
|
─
|
|||||||||||||
Income (loss) per common share ─ discontinued operations
|
─
|
3,021
|
─
|
|||||||||||||
Net income (loss) per common share
|
$
|
25,810
|
105,307
|
$
|
3,883
|
101,334
|
Nine Months Ended
|
Nine Months Ended
|
|||||||||||||||
September 30, 2010
|
September 30, 2009
|
|||||||||||||||
Income
|
Shares
|
Income
|
Shares
|
|||||||||||||
Basic:
|
||||||||||||||||
Net income (loss) applicable to common shareholders
|
$
|
(77,281
|
)
|
$
|
157,564
|
|||||||||||
Less: Undistributed net income allocable to participating securities
|
─
|
(2,284
|
)
|
|||||||||||||
Undistributed net income (loss) applicable to common shareholders
|
(77,281
|
)
|
155,280
|
|||||||||||||
(Income) loss from discontinued operations
|
44
|
(10,303
|
)
|
|||||||||||||
Add: Undiscounted net income from discontinued operations allocable to participating securities
|
─
|
149
|
||||||||||||||
Income (loss) per common share – continuing operations
|
$
|
(77,237
|
)
|
103,772
|
$
|
145,126
|
97,831
|
Nine Months Ended
September 30, 2010
|
Nine Months Ended
September 30, 2009
|
|||||||||||||||
Income
|
Shares
|
Income
|
Shares
|
|||||||||||||
Diluted:
|
||||||||||||||||
Net income (loss) per common share –
continuing operations – Basic
|
$
|
(77,237
|
)
|
103,772
|
$
|
145,126
|
97,831
|
|||||||||
Effect of dilutive securities:
|
||||||||||||||||
Stock options
|
─
|
─
|
─
|
3
|
||||||||||||
Undistributed earnings reallocated to participating securities
|
─ | ─ |
160
|
─
|
||||||||||||
Convertible Senior Notes
|
─
|
─
|
─
|
─
|
||||||||||||
Convertible preferred stock
|
─
|
─
|
688
|
8,034
|
||||||||||||
Income (loss) per common share ─
continuing operations
|
(77,237
|
)
|
145,974
|
|||||||||||||
Income (loss) per common share ─ discontinued operations
|
(44
|
)
|
10,303
|
|||||||||||||
Net income (loss) per common share
|
$
|
(77,281
|
)
|
103,772
|
$
|
156,277
|
105,868
|
|||||||||
Diluted shares (as reported)
|
103,772 | |||
Stock options
|
51 | |||
Convertible preferred stock
|
1,689 | |||
Total
|
105,512 |
Date of Grant
|
Type
|
Shares
|
Market Value Per Share
|
Vesting Period
|
|||||||||
January 4, 2010
|
(1 | ) | 452,849 | $ | 11.75 |
20% per year over five years
|
|||||||
January 4, 2010
|
(2 | ) | 23,569 | 11.75 |
20% per year over five years
|
||||||||
January 4, 2010
|
(1 | ) | 1,197 | 11.75 |
100% on January 1, 2012
|
||||||||
April 1, 2010
|
(1 | ) | 4,029 | 13.03 |
100% on January 1, 2012
|
||||||||
July 1, 2010
|
(1 | ) | 5,107 | 10.77 |
100% on January 1, 2012
|
(1)
|
Restricted shares
|
(2)
|
Restricted stock units
|
Three Months Ended
|
Nine Months Ended
|
|||||||||||||||
September 30,
|
September 30,
|
|||||||||||||||
2010
|
2009
|
2010
|
2009
|
|||||||||||||
(in thousands)
|
||||||||||||||||
Revenues ─
|
||||||||||||||||
Contracting Services
|
$
|
238,531
|
$
|
175,091
|
$
|
595,048
|
$
|
645,422
|
||||||||
Shelf Contracting
|
–
|
–
|
–
|
404,709
|
||||||||||||
Oil and Gas (1)
|
95,566
|
63,715
|
288,867
|
313,888
|
||||||||||||
Production Facilities(2)
|
74,458
|
1,141
|
97,169
|
2,261
|
||||||||||||
Intercompany elimination
|
(15,886
|
)
|
(23,922
|
)
|
(87,583
|
)
|
(84,641
|
)
|
||||||||
Total
|
$
|
392,669
|
$
|
216,025
|
$
|
893,501
|
$
|
1,281,639
|
||||||||
Income (loss) from operations ─
|
||||||||||||||||
Contracting Services
|
$
|
31,015
|
$
|
22,199
|
$
|
102,282
|
$
|
96,583
|
||||||||
Shelf Contracting
|
–
|
–
|
–
|
59,077
|
||||||||||||
Oil and Gas (1)
|
(4,384
|
)
|
(21,442
|
)
|
(159,991
|
)
|
166,686
|
|||||||||
Production Facilities (2)
|
44,520
|
(1,388
|
)
|
57,460
|
(2,540
|
)
|
||||||||||
Corporate (3)
|
(10,767
|
)
|
(12,067
|
)
|
(46,242
|
)
|
(33,839
|
)
|
||||||||
Intercompany elimination
|
(286
|
)
|
(1,971
|
)
|
(18,705
|
)
|
(3,892
|
)
|
||||||||
Total
|
$
|
60,098
|
$
|
(14,669
|
)
|
$
|
(65,196
|
)
|
$
|
282,075
|
||||||
Equity in earnings of equity investments
|
$
|
6,221
|
$
|
13,385
|
$
|
12,932
|
$
|
27,152
|
(1)
|
Included $73.5 million of disputed accrued royalty payments that we reversed in first quarter of 2009 following a favorable court ruling (Note 6).
|
(2)
|
Included the operating results related to the HP I.
|
(3)
|
Included $13.8 million of $17.5 million settlement of a third party claim against us in March 2010 (Note 16).
|
Three Months Ended
|
Nine Months Ended
|
|||||||||||||||
September 30,
|
September 30,
|
|||||||||||||||
2010
|
2009
|
2010
|
2009
|
|||||||||||||
(in thousands)
|
||||||||||||||||
Contracting Services
|
$
|
15,886
|
$
|
23,922
|
$
|
84,053
|
$
|
76,776
|
||||||||
Shelf Contracting
|
–
|
–
|
–
|
7,865
|
||||||||||||
Production Facilities
|
–
|
–
|
3,530
|
–
|
||||||||||||
Total
|
$
|
15,886
|
$
|
23,922
|
$
|
87,583
|
$
|
84,641
|
Three Months Ended
|
Nine Months Ended
|
|||||||||||||||
September 30,
|
September 30,
|
|||||||||||||||
2010
|
2009
|
2010
|
2009
|
|||||||||||||
(in thousands)
|
||||||||||||||||
Contracting Services
|
$
|
330
|
$
|
2,153
|
$
|
15,473
|
$
|
3,600
|
||||||||
Shelf Contracting
|
–
|
(138
|
)
|
–
|
365
|
|||||||||||
Production Facilities
|
(44
|
)
|
(44
|
)
|
3,249
|
(73
|
)
|
|||||||||
Total
|
$
|
286
|
$
|
1,971
|
$
|
18,722
|
$
|
3,892
|
September 30,
2010
|
December 31,
2009
|
|||||||
(in thousands)
|
||||||||
Identifiable Assets ─
|
||||||||
Contracting Services
|
$
|
1,860,370
|
$
|
1,738,883
|
||||
Oil and Gas
|
1,267,342
|
1,541,153
|
||||||
Production Facilities
|
517,547
|
499,497
|
||||||
Total
|
$
|
3,645,259
|
$
|
3,779,533
|
•
|
Level 1. Observable inputs such as quoted prices in active markets;
|
|
•
|
Level 2. Inputs, other than the quoted prices in active markets, that are observable either directly or indirectly; and
|
|
•
|
Level 3. Unobservable inputs in which there is little or no market data, which require the reporting entity to develop its own assumptions.
|
(a)
|
Market Approach. Prices and other relevant information generated by market transactions involving identical or comparable assets or liabilities.
|
(b)
|
Cost Approach. Amount that would be required to replace the service capacity of an asset (replacement cost).
|
(c)
|
Income Approach. Techniques to convert expected future cash flows to a single present amount based on market expectations (including present value techniques, option-pricing and excess earnings models).
|
Level 1
|
Level 2 (1)
|
Level 3
|
Total
|
Valuation Technique
|
||||||||||||||||
Assets:
|
||||||||||||||||||||
Oil and gas swaps and collars
|
$
|
–
|
$
|
17,737
|
$
|
–
|
$
|
17,737
|
(c)
|
|||||||||||
Investment in Cal Dive
|
2,735
|
–
|
–
|
2,735
|
(a)
|
|||||||||||||||
Foreign currency forwards
|
–
|
487
|
–
|
487
|
(c)
|
|||||||||||||||
Liabilities:
|
||||||||||||||||||||
Oil and gas swaps and collars
|
–
|
10,996
|
–
|
10,996
|
(c)
|
|||||||||||||||
Fair value of long term debt(2)
|
1,243,806
|
130,885
|
–
|
1,374,691
|
(a), (b)
|
|||||||||||||||
Foreign currency forwards
|
–
|
612
|
–
|
612
|
(c)
|
|||||||||||||||
Interest rate swaps
|
–
|
2,294
|
–
|
2,294
|
(c)
|
|||||||||||||||
Total net liability
|
$
|
1,241,071
|
$
|
126,563
|
$
|
–
|
$
|
1,367,634
|
(1)
|
Unless otherwise indicated, the fair value of our Level 2 derivative instruments reflects our best estimate and is based upon exchange or over-the-counter quotations whenever they are available. Where quotes are not available, we utilize other valuation techniques or models to estimate market values. These modeling techniques require us to use published future market prices and estimate market volatility and liquidity based on market data. Our actual results may differ from our estimates, and these differences can be positive or negative.
|
(2)
|
See Note 9 for additional information regarding our long term debt. The fair value of our debt at September 30, 2010 is as follows:
|
Fair Value
|
Carrying
Value
|
|||||||
Term Loan (matures July 2013)
|
$ | 395,061 | $ | 411,522 | ||||
Revolving Credit Facility (matures November 2012)
|
– | – | ||||||
Convertible Senior Notes (matures March 2025)
|
280,371 | 279,336 | ||||||
Senior Unsecured Notes (matures January 2016)
|
566,500 | 550,000 | ||||||
MARAD Debt (matures August 2027) (a)
|
130,885 | 114,811 | ||||||
Loan Note(b)
|
1,874 | 1,874 | ||||||
Total
|
$ | 1,374,691 | $ | 1,357,543 | ||||
(a)
|
The estimated fair value of all debt, other than the MARAD Debt and Loan Note, was determined using Level 1 inputs using the market approach. The fair value of the MARAD debt was determined using a third party evaluation of the remaining average life and outstanding principal balance of the MARAD indebtedness as compared to other governmental obligations in the market place with similar terms. The fair value of the MARAD debt was estimated using Level 2 fair value inputs using the cost approach.
|
(b)
|
The carrying value of the Loan Note approximates fair value as the maturity date is current.
|
Production Period
|
Instrument Type
|
Approximate
Average
Monthly Volumes
|
Weighted Average
Price
|
|||
Crude Oil:
|
(per barrel)
|
|||||
October 2010 — December 2010
|
Collar
|
|
100 MBbl
|
$62.50-$80.73
|
||
October 2010 — December 2010
|
Swap
|
105 MBbl
|
$76.55
|
|||
October 2010 — December 2010
|
Swap
|
107 MBbl
|
$81.39
|
|||
January 2011 — December 2011
|
Swap
|
198 MBbl
|
$81.31
|
|||
Natural Gas:
|
(per Mcf)
|
|||||
October 2010 — December 2010
|
Swap
|
|
1,020 Mmcf
|
$5.81
|
||
October 2010 — December 2010
|
Collar
|
1,012 Mmcf
|
$6.00 — $6.70
|
|||
January 2011 — December 2011
|
Swap
|
675 Mmcf
|
$5.09
|
As of September 30, 2010
|
As of December 31, 2009
|
|||||||||||||||
Balance Sheet Location
|
Fair Value
|
Balance Sheet
Location
|
Fair Value
|
|||||||||||||
(in thousands)
|
||||||||||||||||
Asset Derivatives:
|
||||||||||||||||
Oil contracts
|
Other current assets
|
$
|
—
|
Other current assets
|
$
|
—
|
||||||||||
Natural gas contracts
|
Other current assets
|
17,309
|
Other current assets
|
5,071
|
||||||||||||
Natural gas contracts
|
Other assets, net
|
428
|
Other assets, net
|
—
|
||||||||||||
Interest rate swaps
|
Other assets, net
|
—
|
Other assets, net
|
—
|
||||||||||||
$
|
17,737
|
$
|
5,071
|
As of September 30, 2010
|
As of December 31, 2009
|
|||||||||||||||
Balance Sheet Location
|
Fair Value
|
Balance Sheet Location
|
Fair Value
|
|||||||||||||
(in thousands)
|
||||||||||||||||
Liability Derivatives:
|
||||||||||||||||
Oil contracts
|
Accrued liabilities
|
$
|
8,737
|
Accrued liabilities
|
$
|
19,477
|
||||||||||
Natural gas contracts
|
Accrued liabilities
|
—
|
Accrued liabilities
|
59
|
||||||||||||
Interest rate swaps
|
Accrued liabilities
|
1,822
|
Accrued liabilities
|
—
|
||||||||||||
Oil contracts
|
Other liabilities
|
2,118
|
Other liabilities
|
—
|
||||||||||||
Natural gas contracts
|
Other liabilities
|
116
|
Other liabilities
|
—
|
||||||||||||
Interest rate swaps
|
Other liabilities
|
472
|
Other liabilities
|
—
|
||||||||||||
$
|
13,265
|
$
|
19,536
|
As of September 30, 2010
|
As of December 31, 2009
|
|||||||||
Balance Sheet
Location
|
Fair Value
|
Balance Sheet Location
|
Fair Value
|
|||||||
(in thousands)
|
||||||||||
Asset Derivatives:
|
||||||||||
Natural gas contracts
|
Other current assets
|
$ | — |
Other current assets
|
$ | — | ||||
Oil contracts
|
Other current assets
|
— |
Other current assets
|
— | ||||||
Foreign exchange forwards
|
Other current assets
|
339 |
Other current assets
|
1,143 | ||||||
Foreign exchange forwards
|
Other assets, net
|
148 |
Other assets, net
|
931 | ||||||
$ | 487 | $ | 2,074 | |||||||
Liability Derivatives:
|
||||||||||
Oil contracts
|
Accrued liabilities
|
$ | 25 |
Accrued liabilities
|
$ | — | ||||
Foreign exchange forwards
|
Accrued liabilities
|
612 |
Accrued liabilities
|
— | ||||||
Foreign exchange forwards
|
Other liabilities
|
— |
Other liabilities
|
— | ||||||
$ | 637 | $ | — |
Gain (Loss) Recognized in OCI on Derivatives
(Effective Portion)
|
||||||||||||||||
Three Months Ended
September 30,
|
Nine Months Ended
September 30,
|
|||||||||||||||
2010(1)
|
2009
|
2010(1)
|
2009
|
|||||||||||||
(in thousands)
|
||||||||||||||||
Oil and natural gas commodity contracts
|
$
|
(3,405
|
)
|
$
|
(3,140
|
)
|
$
|
13,799
|
$
|
(17,517
|
)
|
|||||
Foreign exchange forwards
|
—
|
17
|
—
|
(539
|
)
|
|||||||||||
Interest rate swaps
|
(390
|
)
|
240
|
(1,491
|
)
|
1,835
|
||||||||||
$
|
(3,795
|
)
|
$
|
(2,883
|
)
|
$
|
12,308
|
$
|
(16,221
|
)
|
||||||
(1)
|
All unrealized gains (losses) related to our derivatives are expected to be reclassified into earnings within the next 12 months, except for amounts related to our interest swaps, for which we have open contracts that have maturities through January 2012.
|
Location of Gain (Loss) Reclassified from Accumulated OCI into Income
(Effective Portion)
|
Gain (Loss) Reclassified from Accumulated OCI into Income
(Effective Portion)
|
||||||||||||||||
Three Months Ended
September 30,
|
Nine Months Ended
September 30,
|
||||||||||||||||
2010
|
2009
|
2010
|
2009
|
||||||||||||||
Oil and natural gas commodity contracts
|
Oil and gas revenue
|
$
|
7,428
|
$
|
925
|
$
|
17,892
|
$
|
16,786
|
||||||||
Interest rate swaps
|
Net interest expense and other
|
(468
|
)
|
(369
|
)
|
(1,355
|
)
|
(1,654
|
)
|
||||||||
$
|
6,960
|
$
|
556
|
$
|
16,537
|
$
|
15,132
|
||||||||||
Location of Gain (Loss) Recognized in Income on Derivatives
|
Gain (Loss) Recognized in Income on Derivatives
|
||||||||||||||||
Three Months Ended
September 30,
|
Nine Months Ended
September 30,
|
||||||||||||||||
2010
|
2009
|
2010
|
2009
|
||||||||||||||
(in thousands)
|
|||||||||||||||||
Natural gas contracts
|
Gain on oil and gas derivative contracts
|
$
|
161
|
$
|
4,598
|
$
|
2,643
|
$
|
83,328
|
||||||||
Foreign exchange forwards
|
Net interest expense and other
|
1,106
|
(1,862
|
)
|
(2,398
|
)
|
3,281
|
||||||||||
Interest rate swaps
|
Net interest expense and other
|
—
|
(173
|
)
|
—
|
(468
|
)
|
||||||||||
$
|
1,267
|
$
|
2,563
|
$
|
245
|
$
|
86,141
|
||||||||||
As of September 30, 2010
|
||||||||||||||||
Helix
|
Guarantors
|
Non-Guarantors
|
Consolidating Entries
|
Consolidated
|
||||||||||||
ASSETS
|
||||||||||||||||
Current assets:
|
||||||||||||||||
Cash and cash equivalents
|
$
|
303,787
|
$
|
3,853
|
$
|
17,840
|
$
|
—
|
$
|
325,480
|
||||||
Accounts receivable, net
|
62,681
|
68,429
|
45,286
|
—
|
176,396
|
|||||||||||
Unbilled revenue
|
14,961
|
—
|
26,864
|
—
|
41,825
|
|||||||||||
Income taxes receivable
|
3,697
|
—
|
—
|
(1,208
|
)
|
2,489
|
||||||||||
Other current assets
|
68,904
|
51,229
|
17,282
|
(14,329
|
)
|
123,086
|
||||||||||
Total current assets
|
454,030
|
123,511
|
107,272
|
(15,537
|
)
|
669,276
|
||||||||||
Intercompany
|
44,233
|
191,526
|
(156,827
|
)
|
(78,932
|
)
|
—
|
|||||||||
Property and equipment, net
|
249,704
|
1,674,563
|
711,617
|
(5,106
|
)
|
2,630,778
|
||||||||||
Other assets:
|
||||||||||||||||
Equity investments
|
2,047,847
|
40,321
|
187,112
|
(2,088,168
|
)
|
187,112
|
||||||||||
Goodwill
|
—
|
45,107
|
33,986
|
—
|
79,093
|
|||||||||||
Other assets, net
|
45,884
|
39,371
|
29,099
|
(35,354
|
)
|
79,000
|
||||||||||
Due from subsidiaries/parent
|
100,612
|
106,637
|
—
|
(207,249
|
)
|
—
|
||||||||||
$
|
2,942,310
|
$
|
2,221,036
|
$
|
912,259
|
$
|
(2,430,346
|
)
|
$
|
3,645,259
|
||||||
LIABILITIES AND SHAREHOLDERS’ EQUITY
|
||||||||||||||||
Current liabilities:
|
||||||||||||||||
Accounts payable
|
$
|
72,029
|
$
|
47,988
|
$
|
45,468
|
$
|
(1
|
)
|
$
|
165,484
|
|||||
Accrued liabilities
|
68,517
|
96,529
|
32,920
|
—
|
197,966
|
|||||||||||
Income taxes payable
|
—
|
17,345
|
2,106
|
(19,451
|
)
|
—
|
||||||||||
Current maturities of long-term debt
|
4,326
|
—
|
19,633
|
(13,114
|
)
|
10,845
|
||||||||||
Total current liabilities
|
144,872
|
161,862
|
100,127
|
(32,566
|
)
|
374,295
|
||||||||||
Long-term debt
|
1,236,532
|
—
|
110,166
|
—
|
1,346,698
|
|||||||||||
Deferred income taxes
|
169,818
|
156,877
|
89,195
|
(17,241
|
)
|
398,649
|
||||||||||
Asset retirement obligations
|
—
|
163,372
|
—
|
—
|
163,372
|
|||||||||||
Other long-term liabilities
|
1,832
|
4,971
|
689
|
77
|
7,569
|
|||||||||||
Due to parent
|
—
|
—
|
126,097
|
(126,097
|
)
|
—
|
||||||||||
Total liabilities
|
1,553,054
|
487,082
|
426,274
|
(175,827
|
)
|
2,290,583
|
||||||||||
Convertible preferred stock
|
1,000
|
—
|
—
|
—
|
1,000
|
|||||||||||
Total equity
|
1,388,256
|
1,733,954
|
485,985
|
(2,254,519
|
)
|
1,353,676
|
||||||||||
$
|
2,942,310
|
$
|
2,221,036
|
$
|
912,259
|
$
|
(2,430,346
|
)
|
$
|
3,645,259
|
||||||
As of December 31, 2009
|
|||||||||||||||||
Helix
|
Guarantors
|
Non-Guarantors
|
Consolidating Entries
|
Consolidated
|
|||||||||||||
ASSETS
|
|||||||||||||||||
Current assets:
|
|||||||||||||||||
Cash and cash equivalents
|
$
|
258,742
|
$
|
2,522
|
$
|
9,409
|
$
|
—
|
$
|
270,673
|
|||||||
Accounts receivable, net
|
49,813
|
77,399
|
18,307
|
—
|
145,519
|
||||||||||||
Unbilled revenue
|
9,425
|
480
|
17,254
|
—
|
27,159
|
||||||||||||
Income taxes receivable
|
38,333
|
—
|
13,795
|
(43,636
|
)
|
8,492
|
|||||||||||
Other current assets
|
54,144
|
68,910
|
16,331
|
(25,668
|
)
|
113,717
|
|||||||||||
Total current assets
|
410,457
|
149,311
|
75,096
|
(69,304
|
)
|
565,560
|
|||||||||||
Intercompany
|
106,408
|
149,796
|
(190,729
|
)
|
(65,475
|
)
|
—
|
||||||||||
Property and equipment, net
|
220,408
|
1,919,412
|
729,131
|
(5,245
|
)
|
2,863,706
|
|||||||||||
Other assets:
|
|||||||||||||||||
Equity investments in unconsolidated affiliates
|
—
|
—
|
189,411
|
—
|
189,411
|
||||||||||||
Equity investments in affiliates
|
2,123,169
|
29,649
|
—
|
(2,152,818
|
)
|
—
|
|||||||||||
Goodwill, net
|
—
|
45,107
|
33,536
|
—
|
78,643
|
||||||||||||
Other assets, net
|
48,822
|
41,669
|
22,919
|
(31,197
|
)
|
82,213
|
|||||||||||
Due from subsidiaries/parent
|
73,867
|
64,775
|
—
|
(138,642
|
)
|
—
|
|||||||||||
$
|
2,983,131
|
$
|
2,399,719
|
$
|
859,364
|
$
|
(2,462,681
|
)
|
$
|
3,779,533
|
|||||||
LIABILITIES AND SHAREHOLDERS’ EQUITY
|
|||||||||||||||||
Current liabilities:
|
|||||||||||||||||
Accounts payable
|
$
|
58,451
|
$
|
79,128
|
$
|
17,878
|
$
|
—
|
$
|
155,457
|
|||||||
Accrued liabilities
|
81,021
|
104,450
|
15,136
|
—
|
200,607
|
||||||||||||
Income taxes payable
|
—
|
54,955
|
—
|
(54,955
|
)
|
—
|
|||||||||||
Current maturities of long-term debt
|
4,326
|
—
|
33,837
|
(25,739
|
)
|
12,424
|
|||||||||||
Total current liabilities
|
143,798
|
238,533
|
66,851
|
(80,694
|
)
|
368,488
|
|||||||||||
Long-term debt
|
1,233,504
|
—
|
114,811
|
—
|
1,348,315
|
||||||||||||
Deferred income taxes
|
137,662
|
222,528
|
90,676
|
(8,259
|
)
|
442,607
|
|||||||||||
Asset retirement obligations
|
—
|
176,657
|
5,742
|
—
|
182,399
|
||||||||||||
Other long-term liabilities
|
924
|
2,495
|
766
|
77
|
4,262
|
||||||||||||
Due to parent
|
—
|
—
|
99,352
|
(99,352
|
)
|
—
|
|||||||||||
Total liabilities
|
1,515,888
|
640,213
|
378,198
|
(188,228
|
)
|
2,346,071
|
|||||||||||
Convertible preferred stock
|
6,000
|
—
|
—
|
—
|
6,000
|
||||||||||||
Total equity
|
1,461,243
|
1,759,506
|
481,166
|
(2,274,453
|
)
|
1,427,462
|
|||||||||||
$
|
2,983,131
|
$
|
2,399,719
|
$
|
859,364
|
$
|
(2,462,681
|
)
|
$
|
3,779,533
|
|||||||
Three Months Ended September 30, 2010
|
|||||||||||||||
Helix
|
Guarantors
|
Non-Guarantors
|
Consolidating Entries
|
Consolidated
|
|||||||||||
Net revenues
|
$
|
82,764
|
$
|
212,105
|
$
|
111,581
|
$
|
(13,781
|
)
|
$
|
392,669
|
||||
Cost of sales
|
42,397
|
184,369
|
92,765
|
(13,414
|
)
|
306,117
|
|||||||||
Gross profit (loss)
|
40,367
|
27,736
|
18,816
|
(367
|
)
|
86,552
|
|||||||||
Gain on oil & gas derivative contracts
|
—
|
161
|
—
|
—
|
161
|
||||||||||
Loss on sale of assets
|
—
|
—
|
13
|
—
|
13
|
||||||||||
Selling and administrative expenses
|
(15,465
|
)
|
(7,370
|
)
|
(4,212
|
)
|
419
|
(26,628
|
)
|
||||||
Income (loss) from operations
|
24,902
|
20,527
|
14,617
|
52
|
60,098
|
||||||||||
Equity in earnings of investments
|
27,871
|
7,567
|
6,221
|
(35,438
|
)
|
6,221
|
|||||||||
Net interest expense and other
|
(19,452
|
)
|
(3,996
|
)
|
2,041
|
—
|
(21,407
|
)
|
|||||||
Income (loss) before income taxes
|
33,321
|
24,098
|
22,879
|
(35,386
|
)
|
44,912
|
|||||||||
Provision (benefit) for income taxes
|
7,185
|
4,530
|
6,234
|
16
|
17,965
|
||||||||||
Income from continuing operations
|
26,136
|
19,568
|
16,645
|
(35,402
|
)
|
26,947
|
|||||||||
Discontinued operations, net of tax
|
—
|
—
|
—
|
—
|
—
|
||||||||||
Net income (loss) applicable to Helix
|
26,136
|
19,568
|
16,645
|
(35,402
|
)
|
26,947
|
|||||||||
Less:net income applicable to noncontrolling interests
|
—
|
—
|
—
|
(776
|
)
|
(776
|
)
|
||||||||
Preferred stock dividends
|
(10
|
)
|
—
|
—
|
—
|
(10
|
)
|
||||||||
Net income (loss) applicable to Helix common shareholders
|
$
|
26,126
|
$
|
19,568
|
$
|
16,645
|
$
|
(36,178
|
)
|
$
|
26,161
|
||||
Three Months Ended September 30, 2009
|
|||||||||||||||
Helix
|
Guarantors
|
Non-Guarantors
|
Consolidating Entries
|
Consolidated
|
|||||||||||
Net revenues
|
$
|
17,350
|
$
|
146,981
|
$
|
70,730
|
$
|
(19,036
|
)
|
$
|
216,025
|
||||
Cost of sales
|
17,952
|
161,474
|
52,217
|
(18,235
|
)
|
213,408
|
|||||||||
Gross profit (loss)
|
(602
|
)
|
(14,493
|
)
|
18,513
|
(801
|
)
|
2,617
|
|||||||
Gain on oil & gas derivative contracts
|
—
|
4,598
|
—
|
—
|
4,598
|
||||||||||
Gain on sale of assets
|
—
|
—
|
—
|
—
|
—
|
||||||||||
Selling and administrative expenses
|
(12,791
|
)
|
(5,467
|
)
|
(4,364
|
)
|
738
|
(21,884
|
)
|
||||||
Income (loss) from operations
|
(13,393
|
)
|
(15,362
|
)
|
14,149
|
(63
|
)
|
(14,669
|
)
|
||||||
Equity in earnings of investments
|
6,081
|
2,625
|
13,923
|
(9,244
|
)
|
13,385
|
|||||||||
Gain on sale of Cal Dive common stock
|
17,901
|
—
|
—
|
—
|
17,901
|
||||||||||
Net interest expense and other
|
(65
|
)
|
(6,156
|
)
|
(4,084
|
)
|
(1
|
)
|
(10,306
|
)
|
|||||
Income (loss) before income taxes
|
10,524
|
(18,893
|
)
|
23,988
|
(9,308
|
)
|
6,311
|
||||||||
Provision (benefit) for income taxes
|
8,765
|
(6,120
|
)
|
1,686
|
137
|
4,468
|
|||||||||
Income from continuing operations
|
1,759
|
(12,773
|
)
|
22,302
|
(9,445
|
)
|
1,843
|
||||||||
Discontinued operations, net of tax
|
3,021
|
—
|
—
|
—
|
3,021
|
||||||||||
Net income (loss) applicable to Helix
|
4,780
|
(12,773
|
)
|
22,302
|
(9,445
|
)
|
4,864
|
||||||||
Less:net income applicable to noncontrolling interests
|
—
|
—
|
—
|
(844
|
)
|
(844
|
)
|
||||||||
Preferred stock dividends
|
(125
|
)
|
—
|
—
|
—
|
(125
|
)
|
||||||||
Net income (loss) applicable to Helix common shareholders
|
$
|
4,655
|
$
|
(12,773
|
)
|
$
|
22,302
|
$
|
(10,289
|
)
|
$
|
3,895
|
|||
Nine Months Ended September 30, 2010
|
|||||||||||||||
Helix
|
Guarantors
|
Non-Guarantors
|
Consolidating Entries
|
Consolidated
|
|||||||||||
Net revenues
|
$
|
137,456
|
$
|
568,075
|
$
|
256,639
|
$
|
(68,669
|
)
|
$
|
893,501
|
||||
Cost of sales
|
73,889
|
641,568
|
215,067
|
(54,613
|
)
|
875,911
|
|||||||||
Gross profit (loss)
|
63,567
|
(73,493
|
)
|
41,572
|
(14,056
|
)
|
17,590
|
||||||||
Gain on oil & gas derivative contracts
|
—
|
2,643
|
—
|
—
|
2,643
|
||||||||||
Gain on sale of assets
|
—
|
287
|
5,959
|
—
|
6,246
|
||||||||||
Selling and administrative expenses
|
(52,923
|
)
|
(25,285
|
)
|
(14,788
|
)
|
1,321
|
(91,675
|
)
|
||||||
Income (loss) from operations
|
10,644
|
(95,848
|
)
|
32,743
|
(12,735
|
)
|
(65,196
|
)
|
|||||||
Equity in earnings of investments
|
(36,865
|
)
|
10,672
|
12,932
|
26,193
|
12,932
|
|||||||||
Net interest expense and other
|
(42,133
|
)
|
(16,564
|
)
|
(6,085
|
)
|
—
|
(64,782
|
)
|
||||||
Income (loss) before income taxes
|
(68,354
|
)
|
(101,740
|
)
|
39,590
|
13,458
|
(117,046
|
)
|
|||||||
Provision (benefit) for income taxes
|
517
|
(40,606
|
)
|
2,584
|
(4,457
|
)
|
(41,962
|
)
|
|||||||
Income from continuing operations
|
(68,871
|
)
|
(61,134
|
)
|
37,006
|
17,915
|
(75,084
|
)
|
|||||||
Discontinued operations, net of tax
|
(27
|
)
|
—
|
(17
|
)
|
—
|
(44
|
)
|
|||||||
Net income (loss) applicable to Helix
|
(68,898
|
)
|
(61,134
|
)
|
36,989
|
17,915
|
(75,128
|
)
|
|||||||
Less:net income applicable to noncontrolling interests
|
—
|
—
|
—
|
(2,049
|
)
|
(2,049
|
)
|
||||||||
Preferred stock dividends
|
(104
|
)
|
—
|
—
|
—
|
(104
|
)
|
||||||||
Net income (loss) applicable to Helix common shareholders
|
$
|
(69,002
|
)
|
$
|
(61,134
|
)
|
$
|
36,989
|
$
|
15,866
|
$
|
(77,281
|
)
|
||
Nine Months Ended September 30, 2009
|
|||||||||||||||
Helix
|
Guarantors
|
Non-Guarantors
|
Consolidating Entries
|
Consolidated
|
|||||||||||
Net revenues
|
$
|
207,338
|
$
|
559,712
|
$
|
587,912
|
$
|
(73,323
|
)
|
$
|
1,281,639
|
||||
Cost of sales
|
160,304
|
429,299
|
461,479
|
(69,026
|
)
|
982,056
|
|||||||||
Gross profit
|
47,034
|
130,413
|
126,433
|
(4,297
|
)
|
299,583
|
|||||||||
Gain on oil & gas derivative contracts
|
—
|
83,328
|
—
|
—
|
83,328
|
||||||||||
Gain on sale of assets
|
—
|
1,773
|
—
|
—
|
1,773
|
||||||||||
Selling and administrative expenses
|
(37,421
|
)
|
(21,347
|
)
|
(46,938
|
)
|
3,097
|
(102,609
|
)
|
||||||
Income (loss) from operations
|
9,613
|
194,167
|
79,495
|
(1,200
|
)
|
282,075
|
|||||||||
Equity in earnings of investments
|
186,907
|
463
|
28,051
|
(188,269
|
)
|
27,152
|
|||||||||
Gain on sale of Cal Dive common stock
|
77,343
|
—
|
—
|
—
|
77,343
|
||||||||||
Net interest expense and other
|
(14,674
|
)
|
(12,271
|
)
|
(12,036
|
)
|
(988
|
)
|
(39,969
|
)
|
|||||
Income (loss) before income taxes
|
259,189
|
182,359
|
95,510
|
(190,457
|
)
|
346,601
|
|||||||||
Provision (benefit) for income taxes
|
45,327
|
63,502
|
18,099
|
(732
|
)
|
126,196
|
|||||||||
Income from continuing operations
|
213,862
|
118,857
|
77,411
|
(189,725
|
)
|
220,405
|
|||||||||
Discontinued operations, net of tax
|
205
|
—
|
10,098
|
—
|
10,303
|
||||||||||
Net income (loss) applicable to Helix
|
214,067
|
118,857
|
87,509
|
(189,725
|
)
|
230,708
|
|||||||||
Less:net income applicable to noncontrolling interests
|
—
|
—
|
—
|
(19,017
|
)
|
(19,017
|
)
|
||||||||
Preferred stock dividends
|
(688
|
)
|
—
|
—
|
—
|
(688
|
)
|
||||||||
Preferred stock beneficial conversion charges
|
(53,439
|
)
|
—
|
—
|
—
|
(53,439
|
)
|
||||||||
Net income (loss) applicable to Helix common shareholders
|
$
|
159,940
|
$
|
118,857
|
$
|
87,509
|
$
|
(208,742
|
)
|
$
|
157,564
|
||||
Nine Months Ended September 30, 2010
|
|||||||||||||||||
Helix
|
Guarantors
|
Non-Guarantors
|
Consolidating Entries
|
Consolidated
|
|||||||||||||
Cash flow from operating activities:
|
|||||||||||||||||
Net income (loss), including noncontrolling interests
|
$
|
(68,898
|
)
|
$
|
(61,134
|
)
|
$
|
36,989
|
$
|
17,915
|
$
|
(75,128
|
)
|
||||
Adjustments to reconcile net income (loss), including noncontrolling interests to net cash provided by (used in) operating activities:
|
|||||||||||||||||
Equity in earnings of affiliates
|
36,866
|
(10,673
|
)
|
—
|
(26,193
|
)
|
—
|
||||||||||
Other adjustments
|
70,963
|
229,567
|
33,719
|
(17,311
|
)
|
316,938
|
|||||||||||
Cash provided by (used in) continuing
operations
|
38,931
|
157,760
|
70,708
|
(25,589
|
)
|
241,810
|
|||||||||||
Cash provided by (used in) discontinued
operations
|
—
|
—
|
(44
|
)
|
—
|
(44
|
)
|
||||||||||
Net cash provided by (used in) operating
|
|||||||||||||||||
activities
|
38,931
|
157,760
|
70,664
|
(25,589
|
)
|
241,766
|
|||||||||||
Cash flows from investing activities:
|
|||||||||||||||||
Capital expenditures
|
(54,880
|
)
|
(104,423
|
)
|
(19,715
|
)
|
—
|
(179,018
|
)
|
||||||||
Distributions from equity investments, net
|
—
|
—
|
2,108
|
—
|
2,108
|
||||||||||||
Insurance recovery
|
7,020
|
9,086
|
—
|
—
|
16,106
|
||||||||||||
Other
|
—
|
719
|
—
|
—
|
719
|
||||||||||||
Net cash used in investing activities
|
(47,860
|
)
|
(94,618
|
)
|
(17,607
|
)
|
—
|
(160,085
|
)
|
||||||||
Cash flows from financing activities:
|
|||||||||||||||||
Repayments of debt
|
(3,245
|
)
|
—
|
(4,866
|
)
|
—
|
(8,111
|
)
|
|||||||||
Deferred financing costs
|
(2,864
|
)
|
—
|
—
|
—
|
(2,864
|
)
|
||||||||||
Preferred stock dividends paid and other
|
231
|
—
|
(1,842
|
)
|
—
|
(1,611
|
)
|
||||||||||
Repurchase of common stock
|
(11,659
|
)
|
—
|
—
|
(11,659
|
)
|
|||||||||||
Excess tax benefit from stock-based compensation
|
(2,376
|
)
|
—
|
—
|
—
|
(2,376
|
)
|
||||||||||
Intercompany financing
|
73,887
|
(61,811
|
)
|
(37,665
|
)
|
25,589
|
—
|
||||||||||
Net cash provided by (used in) financing activities
|
53,974
|
(61,811
|
)
|
(44,373
|
)
|
25,589
|
(26,621
|
)
|
|||||||||
Effect of exchange rate changes on cash and cash equivalents
|
—
|
—
|
(253
|
)
|
—
|
(253
|
)
|
||||||||||
Net increase (decrease) in cash and cash equivalents
|
45,045
|
1,331
|
8,431
|
—
|
54,807
|
||||||||||||
Cash and cash equivalents:
|
|||||||||||||||||
Balance, beginning of year
|
258,742
|
2,522
|
9,409
|
—
|
270,673
|
||||||||||||
Balance, end of period
|
$
|
303,787
|
$
|
3,853
|
$
|
17,840
|
$
|
—
|
$
|
325,480
|
|||||||
Nine Months Ended September 30, 2009
|
|||||||||||||||||
Helix
|
Guarantors
|
Non-Guarantors
|
Consolidating Entries
|
Consolidated
|
|||||||||||||
Cash flow from operating activities:
|
|||||||||||||||||
Net income, including noncontrolling interests
|
$
|
214,067
|
$
|
118,857
|
$
|
87,509
|
$
|
(189,725
|
)
|
$
|
230,708
|
||||||
Adjustments to reconcile net income to net cash provided by (used in) operating activities:
|
|||||||||||||||||
Equity in losses of unconsolidated
|
|||||||||||||||||
affiliates
|
—
|
—
|
(1,121
|
)
|
899
|
(222
|
)
|
||||||||||
Equity in earnings of affiliates
|
(186,907
|
)
|
(463
|
)
|
—
|
187,370
|
—
|
||||||||||
Other adjustments
|
(168,906
|
)
|
90,361
|
73,197
|
212,123
|
206,775
|
|||||||||||
Cash provided by (used in) operating
activities
|
(141,746
|
)
|
208,755
|
159,585
|
210,667
|
437,261
|
|||||||||||
Cash provided by discontinued operations
|
—
|
—
|
(6,089
|
)
|
—
|
(6,089
|
)
|
||||||||||
Net cash provided by (used in)
|
|||||||||||||||||
operating activities
|
(141,746
|
)
|
208,755
|
153,496
|
210,667
|
431,172
|
|||||||||||
Cash flows from investing activities:
|
|||||||||||||||||
Capital expenditures
|
(9,098
|
)
|
(157,686
|
)
|
(139,368
|
)
|
—
|
(306,152
|
)
|
||||||||
Investments in equity investments
|
—
|
—
|
(551
|
)
|
—
|
(551
|
)
|
||||||||||
Distributions from equity investments, net
|
—
|
—
|
4,774
|
—
|
4,774
|
||||||||||||
Proceeds from sale of Cal Dive common stock
|
504,168
|
—
|
(112,995
|
)
|
(86,000
|
)
|
305,173
|
||||||||||
Proceeds from sales of property
|
—
|
23,238
|
—
|
—
|
23,238
|
||||||||||||
Other
|
—
|
(13
|
)
|
—
|
—
|
(13
|
)
|
||||||||||
Cash provided by (used in) investing
activities
|
495,070
|
(134,461
|
)
|
(248,140
|
)
|
(86,000
|
)
|
26,469
|
|||||||||
Cash provided by discontinued operations
|
—
|
—
|
20,872
|
—
|
20,872
|
||||||||||||
Net cash used in investing activities
|
495,070
|
(134,461
|
)
|
(227,268
|
)
|
(86,000
|
)
|
47,341
|
|||||||||
Cash flows from financing activities:
|
|||||||||||||||||
Borrowings on revolver
|
—
|
—
|
100,000
|
—
|
100,000
|
||||||||||||
Repayments on revolver
|
(349,500
|
)
|
—
|
—
|
—
|
(349,500
|
)
|
||||||||||
Repayments of debt
|
(3,245
|
)
|
—
|
(24,214
|
)
|
—
|
(27,459
|
)
|
|||||||||
Deferred financing costs
|
(50
|
)
|
—
|
—
|
—
|
(50
|
)
|
||||||||||
Preferred stock dividends paid
|
(625
|
)
|
—
|
—
|
(625
|
)
|
|||||||||||
Repurchase of common stock
|
(10,603
|
)
|
—
|
(86,000
|
)
|
86,000
|
(10,603
|
)
|
|||||||||
Excess tax benefit from stock-based compensation
|
(2,036
|
)
|
—
|
—
|
—
|
(2,036
|
)
|
||||||||||
Exercise of stock options, net
|
36
|
36
|
|||||||||||||||
Intercompany financing
|
266,551
|
(76,880
|
)
|
20,996
|
(210,667
|
)
|
—
|
||||||||||
Net cash provided by (used in) financing activities
|
(99,472
|
)
|
(76,880
|
)
|
10,782
|
(124,667
|
)
|
(290,237
|
)
|
||||||||
Effect of exchange rate changes on cash and cash equivalents
|
—
|
—
|
(1,383
|
)
|
—
|
(1,383
|
)
|
||||||||||
Net increase (decrease) in cash and cash equivalents
|
253,852
|
(2,586
|
)
|
(64,373
|
)
|
—
|
186,893
|
||||||||||
Cash and cash equivalents:
|
|||||||||||||||||
Balance, beginning of year
|
148,704
|
4,983
|
69,926
|
—
|
223,613
|
||||||||||||
Balance, end of period
|
$
|
402,556
|
$
|
2,397
|
$
|
5,553
|
$
|
—
|
$
|
410,506
|
|||||||
•
|
statements regarding our business strategy, including the potential sale of assets and/or other investments in our subsidiaries and facilities, or any other business plans, forecasts or objectives, any or all of which is subject to change;
|
||
•
|
statements regarding our anticipated production volumes, results of exploration, exploitation, development, acquisition or operations expenditures, and current or prospective reserve levels with respect to any oil and gas property or well;
|
||
•
|
statements related to commodity prices for oil and gas or with respect to the supply of and demand for oil and gas;
|
||
•
|
statements relating to our proposed acquisition, exploration, development and/or production of oil and gas properties, prospects or other interests and any anticipated costs related thereto;
|
||
•
|
statements related to environmental risks, exploration and development risks, or drilling and operating risks;
|
||
•
|
statements relating to the construction or acquisition of vessels or equipment and any anticipated costs related thereto;
|
||
•
|
statements regarding projections of revenues, gross margin, expenses, earnings or losses, working capital or other financial items;
|
||
•
|
statements regarding any financing transactions or arrangements, or ability to enter into such transactions;
|
||
•
|
statements regarding current and anticipated legislative, governmental, regulatory, administrative or other public body actions, requirements, permits or decisions and their effect on us;
|
||
•
|
statements regarding anticipated developments, industry trends, performance or industry ranking;
|
||
•
|
statements regarding general economic or political conditions, whether international, national or in the regional and local market areas in which we do business;
|
||
•
|
statements regarding our ability to collect outstanding receivables;
|
||
•
|
statements related to our expectation and ability to prevail in certain disputes;
|
||
•
|
statements regarding the timing or completion of contracts;
|
||
•
|
statements regarding our funding or financings plans;
|
||
•
|
statements related to the underlying assumptions related to any projection or forward-looking statement; and
|
||
•
|
any other statements that relate to non-historical or future information.
|
•
|
impact of the weak economic conditions and the future impact of such conditions on the oil and gas industry and the demand for our services;
|
||
•
|
uncertainties inherent in the development and production of oil and gas and in estimating reserves;
|
||
•
|
the geographic concentration of our oil and gas operations;
|
||
•
|
uncertainties regarding our ability to replace depletion;
|
||
•
|
unexpected future capital expenditures (including the amount and nature thereof);
|
||
|
•
|
impact of oil and gas price fluctuations and the cyclical nature of the oil and gas industry;
|
|
|
•
|
the effects of indebtedness, which could adversely restrict our ability to operate, could make us vulnerable to general adverse economic and industry conditions, and could place us at a competitive disadvantage compared to our competitors that have less debt and could have other adverse consequences to us;
|
|
|
•
|
the effectiveness of our derivative activities;
|
|
|
•
|
the results of our continuing efforts to control or reduce costs, and improve performance;
|
|
|
•
|
the success of our risk management activities;
|
|
|
•
|
the effects of competition;
|
|
|
•
|
the availability (or lack thereof) of capital (including any financing) to fund our business strategy and/or operations and the terms of any such financing;
|
|
|
•
|
the impact of current and future laws and governmental regulations including tax and accounting developments;
|
|
|
•
|
the effect of adverse weather conditions or other risks associated with marine operations;
|
|
|
•
|
the effect of environmental liabilities that are not covered by an effective indemnity or insurance;
|
|
|
•
|
the potential impact of a loss of one or more key employees; and
|
|
|
•
|
the impact of general, market, industry or business conditions.
|
·
|
Sold six oil and gas properties for approximately $25 million;
|
·
|
Sold a total of 15.2 million shares of CDI common stock held by us to CDI for $100 million in separate transactions in January and June 2009;
|
·
|
Sold a total of 45.8 million shares of CDI common stock held by us to third parties in two separate public secondary offerings for approximately $404.4 million, net of underwriting fees in June 2009 and September 2009 (for additional information regarding the sales of CDI common shares by us see Note 4); and
|
·
|
Sold Helix RDS Limited, our subsurface reservoir consulting business for $25 million in April 2009.
|
•
|
worldwide economic activity, including available access to global capital and capital markets;
|
||
•
|
demand for oil and natural gas, especially in the United States, Europe, China and India;
|
||
•
|
economic and political conditions in the Middle East and other oil-producing regions;
|
||
•
|
actions taken by the Organization of Petroleum Exporting Countries (“OPEC”);
|
||
•
|
the availability and discovery rate of new oil and natural gas reserves in offshore areas;
|
||
•
|
the cost of offshore exploration for and production and transportation of oil and gas;
|
||
•
|
the ability of oil and natural gas companies to generate funds or otherwise obtain external capital for exploration, development and production operations;
|
||
•
|
the sale and expiration dates of offshore leases in the United States and overseas;
|
||
•
|
technological advances affecting energy exploration production transportation and consumption;
|
||
•
|
weather conditions;
|
||
•
|
environmental and other governmental regulations; and
|
||
•
|
tax policies.
|
Six Months Ended June 30, 2010— (1)
|
||||
Oil price per Bbl
|
$
|
73.15
|
||
Natural gas price per Mcf
|
$
|
4.07
|
||
Year Ended December 31, 2009—(1)
|
||||
Oil price per Bbl
|
$
|
58.05
|
||
Natural gas price per Mcf
|
$
|
3.72
|
||
(1)
|
Price at June 30, 2010 and December 31, 2009 represents the average trailing twelve month price for both oil and natural gas as now required under the new accounting standards.
|
Three Months Ended
|
||||||||||||
September 30,
|
Increase/
|
|||||||||||
2010
|
2009
|
(Decrease)
|
||||||||||
Revenues (in thousands) –
|
||||||||||||
Contracting Services
|
$
|
238,531
|
$
|
175,091
|
$
|
63,440
|
||||||
Oil and Gas
|
95,566
|
63,715
|
31,851
|
|||||||||
Production Facilities
|
74,458
|
1,141
|
73,317
|
|||||||||
Intercompany elimination
|
(15,886
|
)
|
(23,922
|
)
|
8,036
|
|||||||
$
|
392,669
|
$
|
216,025
|
$
|
176,644
|
|||||||
Gross profit (loss) (in thousands) –
|
||||||||||||
Contracting Services
|
$
|
42,149
|
$
|
29,104
|
$
|
13,045
|
||||||
Oil and Gas
|
1,083
|
(22,291
|
)
|
23,374
|
||||||||
Production Facilities
|
44,616
|
(1,318
|
)
|
45,934
|
||||||||
Corporate
|
(1,010
|
)
|
(907
|
)
|
(103
|
)
|
||||||
Intercompany elimination
|
(286
|
)
|
(1,971
|
)
|
1,685
|
|||||||
$
|
86,552
|
$
|
2,617
|
$
|
83,935
|
|||||||
Gross Margin –
|
||||||||||||
Contracting Services
|
18
|
%
|
17
|
%
|
1 pts
|
|||||||
Oil and Gas
|
1
|
%
|
(35
|
)%
|
36 pts
|
|||||||
Total company
|
22
|
%
|
1
|
%
|
21 pts
|
|||||||
Number of vessels(1)/ Utilization(2) –
|
||||||||||||
Contracting Services:
|
||||||||||||
Construction vessels
|
8/97
|
%
|
8/77
|
%
|
||||||||
Well operations
|
4/83
|
%
|
2/92
|
%
|
||||||||
ROVs
|
46/68
|
%
|
47/74
|
%
|
||||||||
(1)
|
Represents number of vessels as of the end of the period excluding acquired vessels prior to their in-service dates and vessels taken out of service prior to their disposition.
|
(2)
|
Average vessel utilization rate is calculated by dividing the total number of days the vessels in this category generated revenues by the total number of calendar days in the applicable period.
|
Three Months Ended
|
||||||||||||
September 30,
|
Increase/
|
|||||||||||
2010
|
2009
|
(Decrease)
|
||||||||||
Contracting Services
|
$
|
15,886
|
$
|
23,922
|
$
|
(8,036
|
)
|
|||||
Production Facilities
|
─
|
─
|
─
|
|||||||||
$
|
15,886
|
$
|
23,922
|
$
|
(8,036
|
)
|
||||||
Three Months Ended
|
||||||||||||
September 30,
|
Increase/
|
|||||||||||
2010
|
2009
|
(Decrease)
|
||||||||||
Contracting Services
|
$
|
330
|
$
|
2,153
|
$
|
(1,823
|
)
|
|||||
Production Facilities
|
(44
|
)
|
(44
|
)
|
─
|
|||||||
Shelf Contracting
|
─
|
(138
|
)
|
138
|
||||||||
$
|
286
|
$
|
1,971
|
$
|
(1,685
|
)
|
||||||
Three Months Ended
|
||||||||||||
September 30,
|
Increase/
|
|||||||||||
2010
|
2009
|
(Decrease)
|
||||||||||
Oil and Gas information–
|
||||||||||||
Oil production volume (MBbls)
|
751
|
546
|
205
|
|||||||||
Oil sales revenue (in thousands)
|
$
|
55,314
|
$
|
37,576
|
$
|
17,738
|
||||||
Average oil sales price per Bbl (excluding hedges)
|
$
|
74.68
|
$
|
68.86
|
$
|
5.82
|
||||||
Average realized oil price per Bbl (including hedges)
|
$
|
73.63
|
$
|
68.86
|
$
|
4.77
|
||||||
Increase in oil sales revenue due to:
|
||||||||||||
Change in prices (in thousands)
|
$
|
2,603
|
||||||||||
Change in production volume (in thousands)
|
15,135
|
|||||||||||
Total increase in oil sales revenue (in thousands)
|
$
|
17,738
|
||||||||||
Gas production volume (MMcf)
|
5,875
|
6,534
|
(659
|
)
|
||||||||
Gas sales revenue (in thousands)
|
$
|
36,039
|
$
|
24,355
|
$
|
11,684
|
||||||
Average gas sales price per mcf (excluding hedges)
|
$
|
4.74
|
$
|
3.59
|
$
|
1.15
|
||||||
Average realized gas price per mcf (including hedges)
|
$
|
6.13
|
$
|
3.73
|
$
|
2.40
|
||||||
Increase (decrease) in gas sales revenue due to:
|
||||||||||||
Change in prices (in thousands)
|
$
|
15,728
|
||||||||||
Change in production volume (in thousands)
|
(4,044
|
)
|
||||||||||
Total increase in gas sales revenue (in thousands)
|
$
|
11,684
|
||||||||||
Total production (MMcfe)
|
10,383
|
9,808
|
575
|
|||||||||
Price per Mcfe
|
$
|
8.80
|
$
|
6.31
|
$
|
2.49
|
||||||
Oil and Gas revenue information (in thousands)–
|
||||||||||||
Oil and gas sales revenue
|
$
|
91,352
|
$
|
61,930
|
$
|
29,422
|
||||||
Other revenues(1)
|
4,214
|
1,785
|
2,429
|
|||||||||
$
|
95,566
|
$
|
63,715
|
$
|
31,851
|
|||||||
(1)
|
Miscellaneous revenues primarily relate to fees earned under our process handling agreements. Amount during the three-month period ended September 30, 2010 includes $2.7 million related to settlement of a royalty claim.
|
Three Months Ended September 30,
|
||||||||||||||||
2010
|
2009
|
|||||||||||||||
Total
|
Per Mcfe
|
Total
|
Per Mcfe
|
|||||||||||||
(in thousands, except per Mcfe amounts)
|
||||||||||||||||
Oil and gas operating expenses(1):
|
||||||||||||||||
Direct operating expenses(2)
|
$ | 27,406 | $ | 2.64 | $ | 25,109 | $ | 2.56 | ||||||||
Workover
|
3,701 | 0.36 | 5,940 | 0.61 | ||||||||||||
Transportation
|
1,889 | 0.18 | 3,044 | 0.31 | ||||||||||||
Repairs and maintenance
|
2,646 | 0.25 | 4,143 | 0.42 | ||||||||||||
Overhead and company labor
|
1,992 | 0.19 | 2,468 | 0.25 | ||||||||||||
|
$ | 37,634 | $ | 3.62 | $ | 40,704 | $ | 4.15 | ||||||||
Depletion expense (3)
|
$ | 50,677 | $ | 4.88 | $ | 31,348 | $ | 3.20 | ||||||||
Abandonment
|
150 | 0.01 | 2,913 | 0.30 | ||||||||||||
Accretion expense
|
3,743 | 0.36 | 3,539 | 0.36 | ||||||||||||
Net hurricane costs
|
940 | 0.09 | 5,061 | 0.52 | ||||||||||||
Impairment
|
897 | 0.09 | 1,537 | 0.16 | ||||||||||||
56,407 | 5.43 | 44,398 | 4.54 | |||||||||||||
Total
|
$ | 94,041 | $ | 9.05 | $ | 85,102 | $ | 8.69 |
(1)
|
Excludes exploration expense of $0.4 million and $0.9 million for the three month periods ended September 30, 2010 and 2009, respectively. Exploration expense is not a component of lease operating expense.
|
(2)
|
Includes production taxes.
|
(3)
|
Includes an incremental $15.0 million of depletion charges related to our Bushwood field following reductions in our estimated proved reserves at June 30, 2010, which increased our depletion rate for the field (Note 6).
|
Nine Months Ended
|
||||||||||||
September 30,
|
Increase/
|
|||||||||||
2010
|
2009
|
(Decrease)
|
||||||||||
Revenues (in thousands) –
|
||||||||||||
Contracting Services
|
$
|
595,048
|
$
|
645,422
|
$
|
(50,374
|
)
|
|||||
Shelf Contracting
|
─
|
404,709
|
(404,709
|
)
|
||||||||
Oil and Gas
|
288,867
|
313,888
|
(25,021
|
)
|
||||||||
Production Facilities
|
97,169
|
2,261
|
94,908
|
|||||||||
Intercompany elimination
|
(87,583
|
)
|
(84,641
|
)
|
(2,942
|
)
|
||||||
$
|
893,501
|
$
|
1,281,639
|
$
|
(388,138
|
)
|
Nine Months Ended
|
||||||||||||
September 30,
|
Increase/
|
|||||||||||
2010
|
2009
|
(Decrease)
|
||||||||||
Gross profit (loss) (in thousands) –
|
||||||||||||
Contracting Services
|
$
|
130,104
|
$
|
117,721
|
$
|
12,383
|
||||||
Shelf Contracting
|
─
|
92,728
|
(92,728
|
)
|
||||||||
Oil and Gas
|
(149,036
|
)
|
97,434
|
(246,470
|
)
|
|||||||
Production Facilities
|
57,715
|
(2,177
|
)
|
59,892
|
||||||||
Corporate
|
(2,471
|
)
|
(2,231
|
)
|
(240
|
)
|
||||||
Intercompany elimination
|
(18,722
|
)
|
(3,892
|
)
|
(14,830
|
)
|
||||||
$
|
17,590
|
$
|
299,583
|
$
|
(281,993
|
)
|
||||||
Gross Margin –
|
||||||||||||
Contracting Services
|
22
|
%
|
18
|
%
|
4 pts
|
|||||||
Shelf Contracting
|
─
|
23
|
%
|
N/A
|
||||||||
Oil and Gas
|
(52)
|
%
|
31
|
%
|
(83) pts
|
|||||||
Total company
|
2
|
%
|
23
|
%
|
(21) pts
|
|||||||
Number of vessels(1)/ Utilization(2) –
|
||||||||||||
Contracting Services:
|
||||||||||||
Construction vessels
|
8/84
|
%
|
8/81
|
%
|
||||||||
Well operations
|
4/81
|
%
|
2/89
|
%
|
||||||||
ROVs
|
46/63
|
%
|
47/70
|
%
|
||||||||
Shelf Contracting
|
N/A
|
N/A
|
||||||||||
(1)
|
Represents number of vessels as of the end of the period excluding acquired vessels prior to their in-service dates and vessels taken out of service prior to their disposition.
|
(2)
|
Average vessel utilization rate is calculated by dividing the total number of days the vessels in this category generated revenues by the total number of calendar days in the applicable period.
|
Nine Months Ended
|
||||||||||||
September 30,
|
Increase/
|
|||||||||||
2010
|
2009
|
(Decrease)
|
||||||||||
Contracting Services
|
$ | 84,053 | $ | 76,776 | $ | 7,277 | ||||||
Production Facilities
|
3,530 |
─
|
3,530 | |||||||||
Shelf Contracting
|
─
|
7,865 | (7,865 | ) | ||||||||
$ | 87,583 | $ | 84,641 | $ | 2,942 | |||||||
Nine Months Ended
|
||||||||||||
September 30,
|
Increase/
|
|||||||||||
2010
|
2009
|
(Decrease)
|
||||||||||
Contracting Services
|
$
|
15,473
|
$
|
3,600
|
$
|
11,873
|
||||||
Production Facilities
|
3,249
|
(73
|
)
|
3,322
|
||||||||
Shelf Contracting
|
─
|
365
|
(365
|
)
|
||||||||
$
|
18,722
|
$
|
3,892
|
$
|
14,830
|
|||||||
Nine Months Ended
|
||||||||||||
September 30,
|
Increase/
|
|||||||||||
2010
|
2009
|
(Decrease)
|
||||||||||
Oil and Gas information–
|
||||||||||||
Oil production volume (MBbls)
|
2,196
|
2,171
|
25
|
|||||||||
Oil sales revenue (in thousands)
|
$
|
159,688
|
$
|
143,231
|
$
|
16,457
|
||||||
Average oil sales price per Bbl (excluding hedges)
|
$
|
75.24
|
$
|
62.23
|
$
|
13.01
|
||||||
Average realized oil price per Bbl (including hedges)
|
$
|
72.71
|
$
|
65.96
|
$
|
6.75
|
||||||
Increase in oil sales revenue due to:
|
||||||||||||
Change in prices (in thousands)
|
$
|
14,655
|
||||||||||
Change in production volume (in thousands)
|
1,802
|
|||||||||||
Total increase in oil sales revenue (in thousands)
|
$
|
16,457
|
||||||||||
Gas production volume (MMcf)
|
20,365
|
21,060
|
(695
|
)
|
||||||||
Gas sales revenue (in thousands)
|
$
|
121,814
|
$
|
93,522
|
$
|
28,292
|
||||||
Average gas sales price per mcf (excluding hedges)
|
$
|
4.83
|
$
|
4.03
|
$
|
0.80
|
||||||
Average realized gas price per mcf (including hedges)
|
$
|
5.98
|
$
|
4.44
|
$
|
1.54
|
||||||
Increase (decrease) in gas sales revenue due to:
|
||||||||||||
Change in prices (in thousands)
|
$
|
32,448
|
||||||||||
Change in production volume (in thousands)
|
(4,156
|
)
|
||||||||||
Total increase in gas sales revenue (in thousands)
|
$
|
28,292
|
||||||||||
Total production (MMcfe)
|
33,541
|
34,088
|
(547
|
)
|
||||||||
Price per Mcfe
|
$
|
8.39
|
$
|
6.95
|
$
|
1.44
|
||||||
Oil and Gas revenue information (in thousands)–
|
||||||||||||
Oil and gas sales revenue
|
$
|
281,502
|
$
|
236,753
|
$
|
44,749
|
||||||
Other revenues(1)
|
7,365
|
77,135
|
(69,770
|
)
|
||||||||
$
|
288,867
|
$
|
313,888
|
$
|
(25,021
|
)
|
||||||
(1)
|
Other revenues include fees earned under our process handling agreements. The amount in 2009 also included $73.5 million of previously accrued royalty payments involved in a legal dispute that were reversed in January 2009 following a favorable ruling by the Fifth District Court of Appeals (Note 6).
|
Nine Months Ended September 30,
|
||||||||||||||||
2010
|
2009
|
|||||||||||||||
Total
|
Per Mcfe
|
Total
|
Per Mcfe
|
|||||||||||||
(in thousands, except per Mcfe amounts)
|
||||||||||||||||
Oil and gas operating expenses(1):
|
||||||||||||||||
Direct operating expenses(2)
|
$ | 57,728 | $ | 1.72 | $ | 61,576 | $ | 1.81 | ||||||||
Workover
|
18,818 | 0.56 | 7,635 | 0.22 | ||||||||||||
Transportation
|
4,218 | 0.13 | 6,465 | 0.19 | ||||||||||||
Repairs and maintenance
|
6,179 | 0.18 | 9,329 | 0.27 | ||||||||||||
Overhead and company labor
|
5,465 | 0.16 | 6,829 | 0.20 | ||||||||||||
|
$ | 92,408 | $ | 2.75 | $ | 91,834 | $ | 2.69 | ||||||||
Depletion expense(3)
|
$ | 154,283 | $ | 4.60 | $ | 116,510 | $ | 3.42 | ||||||||
Abandonment
|
1,316 | 0.04 | 4,444 | 0.13 | ||||||||||||
Accretion expense
|
11,686 | 0.35 | 11,601 | 0.34 | ||||||||||||
Net hurricane costs (reimbursements)
|
4,559 | 0.14 | (24,139 | ) | (0.71 | ) | ||||||||||
Impairment
|
171,871 | 5.12 | 13,341 | 0.39 | ||||||||||||
343,715 | 10.25 | 121,757 | 3.57 | |||||||||||||
Total
|
$ | 436,123 | $ | 13.00 | $ | 213,591 | $ | 6.26 |
(1)
|
Excludes exploration expense of $1.8 million and $2.9 million for the nine-month periods ended September 30, 2010 and 2009, respectively. Exploration expense is not a component of lease operating expense.
|
(2)
|
Includes production taxes.
|
(3)
|
Includes an incremental $33.7 million of depletion charges related to our Bushwood field following reductions in our estimated proved reserves at June 30, 2010, which increased the field’s depletion rate (Note 6).
|
2010
|
2009
|
||||||||||||||
Contracting Services
|
Oil and Gas
|
Total
|
Contracting Services
|
Oil and
Gas
|
Total
|
||||||||||
(in thousands)
|
|||||||||||||||
Revenues
|
$
|
604,634
|
$
|
288,867
|
$
|
893,501
|
$
|
967,751
|
$
|
313,888
|
$
|
1,281,639
|
|||
Gross profit (loss)
|
166,626
|
(149,036
|
)
|
17,590
|
202,149
|
97,434
|
299,583
|
||||||||
Gain on sale or acquisition of assets
|
─
|
6,246
|
6,246
|
70
|
1,703
|
1,773
|
|||||||||
Selling and administrative expenses
|
71,831
|
19,844
|
91,675
|
86,830
|
15,779
|
102,609
|
|||||||||
Equity in earnings of investment
|
12,932
|
─
|
12,932
|
27,152
|
-
|
27,152
|
|||||||||
Net interest expense and other
|
50,659
|
14,123
|
64,782
|
24,474
|
15,495
|
39,969
|
|||||||||
2009
|
2010
|
||||||||||||||
Contracting Services
as reported
|
Less Shelf Contracting
|
Continuing Contracting Services
|
Contracting Services
|
Variance
Of Continuing Contracting Services
|
|||||||||||
(in thousands)
|
|||||||||||||||
Revenues
|
$
|
967,751
|
$
|
404,709
|
$
|
563,042
|
$
|
604,634
|
$ |
41,592
|
|||||
Gross Profit
|
202,149
|
92,728
|
109,421
|
166,626
|
57,205
|
||||||||||
Gain on sale or acquisition of assets
|
70
|
─
|
70
|
─
|
(70)
|
||||||||||
Selling and administrative expenses
|
86,830
|
33,651
|
53,179
|
71,831
|
18,652
|
||||||||||
Equity in earnings of investment
|
27,152
|
8,100
|
19,052
|
12,932
|
(6,120)
|
||||||||||
Net interest expense and other
|
24,474
|
6,642
|
17,832
|
50,659
|
32,827
|
||||||||||
September 30,
2010
|
December 31,
2009
|
|||||||
(in thousands)
|
||||||||
Net working capital
|
$ | 294,981 | $ | 197,072 | ||||
Long-term debt(1)
|
1,346,698 | 1,348,315 | ||||||
(1)
|
Long-term debt does not include the current maturities portion of the long-term debt as such amount is included in net working capital. It is also net of unamortized debt discount that was recorded effective with the adoption of a new accounting standards effective January 1, 2009 (see Note 2 of our 2009 Form 10-K).
|
September 30,
|
December 31,
|
|||||||
2010
|
2009
|
|||||||
(in thousands)
|
||||||||
Term Loan (matures July 2013)
|
$ | 411,522 | $ | 414,766 | ||||
Revolving Credit Facility (matures November 2012)
|
─
|
─
|
||||||
Convertible Senior Notes (matures March 2025) (1)
|
279,336 | 273,064 | ||||||
Senior Unsecured Notes (matures January 2016)
|
550,000 | 550,000 | ||||||
MARAD Debt (matures February 2027)
|
114,811 | 119,235 | ||||||
Loan Note(2)
|
1,874 | 3,674 | ||||||
Total
|
$ | 1,357,543 | $ | 1,360,739 | ||||
(1)
|
Net of the unamortized debt discount resulting from adoption of new provisions of ASC Topic No. 470-20 “Convertible Debt and Other Options” on January 1, 2009. The notes will increase to $300 million face amount through accretion of non-cash interest expense through 2012, the date the note can first be put to us (Note 9).
|
(2)
|
Assumed to be current, represents the loan provided by Kommandor RØMØ to Kommandor LLC (Note 16).
|
Nine Months Ended
|
||||||||
September 30,
|
||||||||
2010
|
2009
|
|||||||
(in thousands)
|
||||||||
Net cash provided by (used in):
|
||||||||
Operating activities
|
$
|
241,766
|
$
|
431,172
|
||||
Investing activities
|
$
|
(160,085
|
)
|
$
|
47,341
|
|||
Financing activities
|
$
|
(26,621
|
)
|
$
|
(290,237
|
)
|
Nine Months Ended
|
||||||||
September 30,
|
||||||||
2010
|
2009
|
|||||||
(in thousands)
|
||||||||
Capital expenditures:
|
||||||||
Contracting Services
|
$
|
(50,663
|
)
|
$
|
(149,872
|
)
|
||
Shelf Contracting
|
─
|
(39,569
|
)
|
|||||
Production Facilities(1)
|
(47,726
|
)
|
(24,502
|
)
|
||||
Oil and Gas(1)
|
(64,523
|
)
|
(92,209
|
)
|
||||
Investments in equity investments
|
─
|
(551
|
)
|
|||||
Distributions from equity investments, net(2)
|
2,108
|
4,774
|
||||||
Proceeds from sale of properties and other
|
719
|
349,270
|
||||||
Cash (used in) provided by investing activities
|
$
|
(160,085
|
)
|
$
|
47,341
|
(1)
|
Amounts net of insurance recovery ($7.0 million for Production Facilities and $9.1 million for oil and gas). This insurance recovery is related to damage sustained to the Phoenix field in 2005, which we remediated upon our acquisition of the field.
|
(2)
|
Distributions from equity investments are net of undistributed equity earnings from our equity investments. Gross distributions from our equity investments are detailed below.
|
Nine Months Ended
|
||||||||
September 30,
|
||||||||
2010
|
2009
|
|||||||
(in thousands)
|
||||||||
Deepwater Gateway.
|
$
|
6,125
|
$
|
4,500
|
||||
Independence
|
16,415
|
20,000
|
||||||
Total
|
$
|
22,540
|
$
|
24,500
|
Total (1)
|
Less Than 1 year
|
1-3 Years
|
3-5 Years
|
More Than 5 Years
|
||||||||||||||||
(in thousands)
|
||||||||||||||||||||
Convertible Senior Notes(2)
|
$
|
300,000
|
$
|
─
|
$
|
─
|
$
|
─
|
$
|
300,000
|
||||||||||
Senior Unsecured Notes
|
550,000
|
─
|
─
|
─
|
550,000
|
|||||||||||||||
Term Loan
|
411,522
|
4,326
|
407,196
|
─
|
─
|
|||||||||||||||
MARAD debt
|
114,811
|
4,645
|
9,997
|
11,020
|
89,149
|
|||||||||||||||
Revolving Credit Facility
|
─
|
─
|
─
|
─
|
─
|
|||||||||||||||
Loan notes
|
1,874
|
1,874
|
─
|
─
|
─
|
|||||||||||||||
Interest related to long-term debt
|
516,271
|
84,784
|
159,358
|
135,110
|
137,019
|
|||||||||||||||
Drilling and development costs
|
17,191
|
17,191
|
─
|
─
|
─
|
|||||||||||||||
Property and equipment
|
6,410
|
6,410
|
─
|
─
|
─
|
|||||||||||||||
Operating leases(3)
|
78,092
|
47,157
|
28,406
|
2,529
|
─
|
|||||||||||||||
Total cash obligations
|
$
|
1,996,171
|
$
|
166,387
|
$
|
604,957
|
$
|
148,659
|
$
|
1,076,168
|
(1)
|
Excludes unsecured letters of credit outstanding at September 30, 2010 totaling $61.2 million. These letters of credit primarily guarantee various contract bidding, contractual obligations and insurance activities.
|
(2)
|
Contractual maturity in 2025 (Notes can be redeemed by us or we may be required to purchase them beginning in December 2012). Notes can be converted prior to stated maturity if closing sale price of Helix’s common stock for at least 20 days in the period of 30 consecutive trading days ending on the last trading day of the preceding fiscal quarter exceeds 120% of the closing price on that 30th trading day (i.e. $38.56 per share) and under certain triggering events as specified in the indenture governing the Convertible Senior Notes. To the extent we do not have alternative long-term financing secured to cover the conversion, the Convertible Senior Notes would be classified as a current liability in the accompanying balance sheet. At September 30, 2010, the conversion trigger was not met. If the Convertible Senior Notes are converted in 2012 the amount due in 1-3 years would increase from the approximate $605 million shown in the table to approximately $905 million.
|
(3)
|
Operating leases included facility leases and vessel charter leases. Vessel charter lease commitments at September 30, 2010 were approximately $66.5 million.
|
Production Period
|
Instrument Type
|
Average
Monthly Volumes
|
Weighted Average
Price
|
|||
Crude Oil:
|
(per barrel)
|
|||||
October 2010 — December 2010
|
Collar
|
|
100 MBbl
|
$62.50-$80.73
|
||
October 2010 — December 2010
|
Swap
|
105 MBbl
|
$76.55
|
|||
October 2010 — December 2010
|
Swap
|
107 MBbl
|
$81.39
|
|||
January 2011 — December 2011
|
Swap
|
198 MBbl
|
$81.31
|
|||
Natural Gas:
|
(per Mcf)
|
|||||
October 2010 — December 2010
|
Swap
|
1,020 Mmcf
|
$5.81
|
|||
October 2010 — December 2010
|
Collar
|
1,012 Mmcf
|
$6.00 — $6.70
|
|||
January 2011 — December 2011
|
Swap
|
675 Mmcf
|
$5.09
|
Period
|
(a) Total number
of shares
purchased
|
(b) Average
price paid
per share
|
(c) Total number
of shares
purchased as
part of publicly
announced
program (2)
|
(d) Maximum
value of shares
that may yet be
purchased under
the program
|
||||||
July 1 to July 31, 2010(1)
|
223,487
|
$
|
11.21
|
223,487
|
─
|
|||||
August 1 to August 31, 2010(1)
|
─
|
─
|
─
|
─
|
||||||
September 1 to September 30, 2010(1)
|
2,481
|
9.53
|
─
|
─
|
||||||
225,968
|
$
|
11.19
|
223,487
|
─
|
(1)
|
Includes shares subject to restricted share awards withheld to satisfy tax obligations arising upon the vesting of restricted shares.
|
|
(2)
|
Shares repurchased under previously announced stock buyback program (Note 19). The remaining shares currently available under the share plan were purchased in early July 2010. There are currently no shares available for repurchase under our share plan.
|
3.1
|
2005 Amended and Restated Articles of Incorporation, as amended, of registrant, incorporated by reference to Exhibit 3.1 to the Current Report on Form 8-K filed by registrant with the Securities and Exchange Commission on March 1, 2006.
|
|
3.2
|
Second Amended and Restated By-Laws of Helix, as amended, incorporated by reference to Exhibit 3.1 to the Current Report on Form 8-K, filed by the registrant with the Securities and Exchange Commission on September 28, 2006.
|
|
15.1
|
Independent Registered Public Accounting Firm’s Acknowledgement Letter(1)
|
|
23.1
|
Consent of Huddleston & Co., Inc. (1)
|
|
31.1
|
Certification Pursuant to Rule 13a-14(a) under the Securities Exchange Act of 1934 by Owen Kratz, Chief Executive Officer(1)
|
|
31.2
|
Certification Pursuant to Rule 13a-14(a) under the Securities Exchange Act of 1934 by Anthony Tripodo, Chief Financial Officer(1)
|
|
32.1
|
Certification of Helix’s Chief Executive Officer and Chief Financial Officer pursuant to Section 906 of the Sarbanes – Oxley Act of 2002(2)
|
|
99.1
|
Report of Independent Registered Public Accounting Firm (1)
|
|
99.2
|
Report of Huddleston & Co. Inc., incorporated by reference to Exhibit 99.2 to the Quarterly Report on Form 10-Q filed by the registrant with the Securities and Exchange Commission on July 30, 2010.
|
|
(1) Filed herewith
|
||
(2) Furnished herewith
|
||
|
HELIX ENERGY SOLUTIONS GROUP, INC.
(Registrant)
|
|
Date: October 28, 2010
|
By:
|
/s/ Owen Kratz
|
Owen Kratz
President and Chief Executive Officer
(Principal Executive Officer)
|
||
|
||
Date: October 28, 2010
|
By:
|
/s/ Anthony Tripodo
|
|
Anthony Tripodo
Executive Vice President and
Chief Financial Officer
(Principal Financial Officer)
|
3.1
|
2005 Amended and Restated Articles of Incorporation, as amended, of registrant, incorporated by reference to Exhibit 3.1 to the Current Report on Form 8-K filed by registrant with the Securities and Exchange Commission on March 1, 2006.
|
|
3.2
|
Second Amended and Restated By-Laws of Helix, as amended, incorporated by reference to Exhibit 3.1 to the Current Report on Form 8-K, filed by the registrant with the Securities and Exchange Commission on September 28, 2006.
|
|
15.1
|
Independent Registered Public Accounting Firm’s Acknowledgement Letter(1)
|
|
23.1
|
Consent of Huddleston & Co., Inc. (1)
|
|
31.1
|
Certification Pursuant to Rule 13a-14(a) under the Securities Exchange Act of 1934 by Owen Kratz, Chief Executive Officer(1)
|
|
31.2
|
Certification Pursuant to Rule 13a-14(a) under the Securities Exchange Act of 1934 by Anthony Tripodo, Chief Financial Officer(1)
|
|
32.1
|
Certification of Helix’s Chief Executive Officer and Chief Financial Officer pursuant to Section 906 of the Sarbanes – Oxley Act of 2002(2)
|
|
99.1
|
Report of Independent Registered Public Accounting Firm(1)
|
|
99.2
|
Report of Huddleston & Co. Inc., incorporated by reference to Exhibit 99.2 to the Quarterly Report on Form 10-Q filed by the registrant with the Securities and Exchange Commission on July 30, 2010.
|
|
(1) Filed herewith
|
||
(2) Furnished herewith
|
||