| --- | --- | --- | |------------------------------------|-------|-------| | | | | | April 27, 2021 | | | | | | | | First Quarter 2021 Conference Call | | | | | | | FORWARD-LOOKING STATEMENTS 2 This presentation contains forward-looking statements that involve risks, uncertainties and assumptions that could cause our results to differ materially from those expressed or implied by such forward-looking statements. All statements, other than statements of historical fact, are "forward-looking statements" withi ...

PART I. FINANCIAL INFORMATION [Item 1. Financial Statements](index=4&type=section&id=Item%201.%20Financial%20Statements) This section presents the unaudited condensed consolidated financial statements for Helix Energy Solutions Group, Inc. and its subsidiaries, including balance sheets, statements of operations, comprehensive income, shareholders' equity, and cash flows, along with detailed notes explaining the basis of presentation, new accounting standards, company overview, and specific account details [Condensed Consolidated Balance Sheets](index=4&type=section&id=Condensed%20Consolidated%20Balance%20Sheets) The balance sheet shows a decrease in total assets and liabilities from December 31, 2020, to March 31, 2021, with a notable reduction in cash and cash equivalents and current maturities of long-term debt | Metric | March 31, 2021 (in millions) | December 31, 2020 (in millions) | | :-------------------------------- | :----------------------------- | :----------------------------- | | Total Assets | $2.42 billion | $2.50 billion | | Cash and Cash Equivalents | $204.8 million | $291.3 million | | Total Liabilities | $710.3 million | $753.9 million | | Current Maturities of Long-Term Debt | $36.5 million | $90.7 million | [Condensed Consolidated Statements of Operations](index=5&type=section&id=Condensed%20Consolidated%20Statements%20of%20Operations) The company reported a reduced net loss for the three months ended March 31, 2021, compared to the same period in 2020, driven by improved gross profit and lower operating loss, despite a decrease in net revenues | Metric | Three Months Ended March 31, 2021 (in millions) | Three Months Ended March 31, 2020 (in millions) | | :----------------------------------- | :--------------------------------------------- | :--------------------------------------------- | | Net Revenues | $163.4 million | $181.0 million | | Cost of Sales | $148.8 million | $179.0 million | | Gross Profit | $14.6 million | $2.0 million | | Loss from Operations | $(0.6) million | $(21.0) million | | Net Loss Attributable to Common Shareholders | $(2.9) million | $(11.9) million | | Basic Loss Per Share | $(0.02) | $(0.09) | [Condensed Consolidated Statements of Comprehensive Income](index=6&type=section&id=Condensed%20Consolidated%20Statements%20of%20Comprehensive%20Income) The company moved from a significant comprehensive loss in Q1 2020 to a comprehensive income in Q1 2021, primarily due to a foreign currency translation gain in 2021 compared to a substantial loss in 2020 | Metric | Three Months Ended March 31, 2021 (in millions) | Three Months Ended March 31, 2020 (in millions) | | :------------------------------------------------ | :--------------------------------------------- | :--------------------------------------------- | | Net Loss | $(3.1) million | $(13.9) million | | Foreign Currency Translation Gain (Loss) | $4.6 million | $(33.6) million | | Comprehensive Income (Loss) Attributable to Common Shareholders | $1.7 million | $(45.0) million | [Condensed Consolidated Statements of Shareholders' Equity](index=7&type=section&id=Condensed%20Consolidated%20Statements%20of%20Shareholders'%20Equity) Shareholders' equity decreased from December 31, 2020, to March 31, 2021, primarily due to cumulative-effect adjustments from the adoption of ASU No. 2020-06, partially offset by foreign currency translation adjustments | Metric | March 31, 2021 (in millions) | December 31, 2020 (in millions) | | :------------------------------------ | :----------------------------- | :----------------------------- | | Total Shareholders' Equity | $1.71 billion | $1.74 billion | - Cumulative-effect adjustments upon adoption of ASU No. 2020-06 resulted in a decrease of **$34.8 million** in total shareholders' equity[13](index=13&type=chunk) - Foreign currency translation adjustments contributed a gain of **$4.6 million** to shareholders' equity[13](index=13&type=chunk) [Condensed Consolidated Statements of Cash Flows](index=9&type=section&id=Condensed%20Consolidated%20Statements%20of%20Cash%20Flows) The company generated positive cash flow from operating activities in Q1 2021, a significant improvement from cash used in operating activities in Q1 2020. This was offset by substantial cash used in financing activities, primarily debt repayments | Metric | Three Months Ended March 31, 2021 (in millions) | Three Months Ended March 31, 2020 (in millions) | | :------------------------------------ | :--------------------------------------------- | :--------------------------------------------- | | Net Cash Provided by (Used in) Operating Activities | $39.9 million | $(17.2) million | | Net Cash Used in Investing Activities | $(1.3) million | $(12.4) million | | Net Cash Used in Financing Activities | $(59.9) million | $(18.4) million | | Balance, End of Period (Cash and Cash Equivalents and Restricted Cash) | $270.4 million | $211.7 million | [Notes to Condensed Consolidated Financial Statements](index=10&type=section&id=Notes%20to%20Condensed%20Consolidated%20Financial%20Statements) These notes provide detailed explanations and disclosures for the condensed consolidated financial statements, covering accounting policies, business segments, debt, taxes, revenue recognition, and other financial information [Note 1 — Basis of Presentation and New Accounting Standards](index=10&type=section&id=Note%201%20%E2%80%94%20Basis%20of%20Presentation%20and%20New%20Accounting%20Standards) The financial statements are prepared in conformity with GAAP, with the early adoption of ASU No. 2020-06 on a modified retrospective basis from January 1, 2021. This ASU simplifies accounting for convertible instruments, reclassifying conversion features from equity to long-term debt and impacting interest expense and diluted EPS calculations - Early adopted ASU No. 2020-06 on a modified retrospective basis beginning **January 1, 2021**, simplifying accounting for convertible instruments[19](index=19&type=chunk) - Adoption of ASU No. 2020-06 increased long-term debt by **$44.1 million** and decreased common stock by **$41.5 million**, reclassifying conversion features from equity to long-term debt[19](index=19&type=chunk) - The ASU is expected to reduce interest expense by eliminating debt discounts amortization and requires the if-converted method for diluted EPS calculation[19](index=19&type=chunk) [Note 2 — Company Overview](index=11&type=section&id=Note%202%20%E2%80%94%20Company%20Overview) Helix Energy Solutions Group, Inc. is an international offshore energy services company specializing in well intervention and robotics operations for both oil & gas and offshore renewable energy markets, operating globally across three reportable segments: Well Intervention, Robotics, and Production Facilities - Helix is an international offshore energy services company focused on well intervention and robotics operations[21](index=21&type=chunk) - Services cover the lifecycle of offshore oil or gas fields and increasingly serve the offshore renewable energy market[21](index=21&type=chunk) - Operates in the Gulf of Mexico, Brazil, North Sea, Asia Pacific, and West Africa regions, with three reportable segments: Well Intervention, Robotics, and Production Facilities[21](index=21&type=chunk) [Note 3 — Details of Certain Accounts](index=11&type=section&id=Note%203%20%E2%80%94%20Details%20of%20Certain%20Accounts) This note provides a breakdown of "Other current assets," "Other assets, net," "Accrued liabilities," and "Other non-current liabilities," detailing their components and changes between December 31, 2020, and March 31, 2021 | Account | March 31, 2021 (in millions) | December 31, 2020 (in millions) | | :---------------------- | :----------------------------- | :----------------------------- | | Other Current Assets | $86.2 million | $102.1 million | | Accrued Liabilities | $76.5 million | $87.0 million | | Other Non-Current Liabilities | $3.1 million | $3.9 million | - Other current assets decreased primarily due to lower deferred costs and income tax receivable[25](index=25&type=chunk) - Accrued liabilities decreased mainly due to lower accrued payroll and interest[26](index=26&type=chunk) [Note 4 — Leases](index=12&type=section&id=Note%204%20%E2%80%94%20Leases) The company charters vessels and leases facilities and equipment. Net lease cost decreased in Q1 2021 compared to Q1 2020, primarily due to lower short-term lease costs. Operating lease liabilities show a remaining lease term of 3.0 years and a weighted average discount rate of 7.53% as of March 31, 2021 | Metric | Three Months Ended March 31, 2021 (in millions) | Three Months Ended March 31, 2020 (in millions) | | :---------------- | :--------------------------------------------- | :--------------------------------------------- | | Net Lease Cost | $21.1 million | $26.4 million | | Metric | March 31, 2021 | December 31, 2020 | | :----------------------------- | :------------- | :---------------- | | Weighted Average Remaining Lease Term | **3.0 years** | 3.1 years | | Weighted Average Discount Rate | **7.53 %** | 7.53 % | - Total operating lease liabilities were **$138.9 million** as of March 31, 2021, down from **$152.6 million** as of December 31, 2020[28](index=28&type=chunk)[29](index=29&type=chunk) [Note 5 — Long-Term Debt](index=13&type=section&id=Note%205%20%E2%80%94%20Long-Term%20Debt) The company's long-term debt structure includes a Term Loan, MARAD Debt, and Convertible Senior Notes (2022, 2023, and 2026 Notes). The Nordea Q5000 Loan was fully repaid in January 2021. The adoption of ASU No. 2020-06 significantly impacted the accounting for convertible notes, eliminating debt discounts and reducing effective interest rates. The company was in compliance with all debt covenants as of March 31, 2021 | Debt Type | Total Debt (Gross, in millions) | | :-------------------- | :----------------------------- | | Term Loan | $28.9 million | | 2022 Notes | $35.0 million | | 2023 Notes | $30.0 million | | 2026 Notes | $200.0 million | | MARAD Debt | $52.7 million | | **Total Gross Debt** | **$346.6 million** | | Less: Unamortized Debt Issuance Costs | $(10.5) million | | **Total Debt** | **$336.0 million** | | Less: Current Maturities | $(36.5) million | | **Long-Term Debt** | **$299.6 million** | - The Nordea Q5000 Loan, with a remaining principal of **$53.6 million** as of December 31, 2020, was fully repaid in **January 2021**[59](index=59&type=chunk) - Adoption of ASU No. 2020-06 eliminated debt discounts for convertible notes, reducing effective interest rates for 2022 Notes (from **7.3% to 4.8%**), 2023 Notes (from **7.8% to 4.8%**), and 2026 Notes (from **12.4% to 7.6%**)[41](index=41&type=chunk)[42](index=42&type=chunk)[47](index=47&type=chunk)[48](index=48&type=chunk)[53](index=53&type=chunk)[54](index=54&type=chunk) - Net interest expense was **$6.1 million** for Q1 2021, compared to **$5.7 million** for Q1 2020, primarily due to the cessation of interest capitalization for the Q7000[61](index=61&type=chunk)[139](index=139&type=chunk) - The company was in compliance with all debt covenants as of **March 31, 2021**[60](index=60&type=chunk) [Note 6 — Income Taxes](index=20&type=section&id=Note%206%20%E2%80%94%20Income%20Taxes) The company reported an income tax provision of $0.1 million for Q1 2021, a significant change from a $21.1 million benefit in Q1 2020. The effective tax rate shifted from 60.2% in Q1 2020 to (4.0)% in Q1 2021, primarily due to the absence of CARES Act benefits and foreign subsidiary restructuring benefits recognized in the prior year, as well as the earnings mix across jurisdictions | Metric | Three Months Ended March 31, 2021 (in millions) | Three Months Ended March 31, 2020 (in millions) | | :-------------------------- | :--------------------------------------------- | :--------------------------------------------- | | Income Tax Provision (Benefit) | $0.1 million | $(21.1) million | | Effective Tax Rate | **(4.0)%** | **60.2%** | - The Q1 2020 tax benefit included an estimated **$5.8 million** net tax benefit from the CARES Act (net operating loss carryback) and **$8.3 million** from foreign subsidiary restructuring[65](index=65&type=chunk)[66](index=66&type=chunk) - The negative effective tax rate in Q1 2021 was due to tax benefits associated with a nominal pretax loss being smaller than non-creditable foreign taxes[69](index=69&type=chunk) [Note 7 — Revenue from Contracts with Customers](index=21&type=section&id=Note%207%20%E2%80%94%20Revenue%20from%20Contracts%20with%20Customers) Total net revenues decreased by 10% in Q1 2021 compared to Q1 2020, with declines in Well Intervention and Robotics segments, partially offset by an increase in Production Facilities. The company expects to recognize $358.4 million in future revenue from unsatisfied performance obligations | Segment | Three Months Ended March 31, 2021 (in millions) | Three Months Ended March 31, 2020 (in millions) | | :------------------ | :--------------------------------------------- | :--------------------------------------------- | | Well Intervention | $133.8 million | $140.7 million | | Robotics | $22.2 million | $35.3 million | | Production Facilities | $16.4 million | $15.5 million | | **Total Net Revenues** | **$163.4 million** | **$181.0 million** | - As of March 31, 2021, **$358.4 million** related to unsatisfied performance obligations is expected to be recognized as revenue in the future, with **$238.7 million** in 2021[75](index=75&type=chunk) | Metric | March 31, 2021 (in millions) | December 31, 2020 (in millions) | | :-------------------- | :----------------------------- | :----------------------------- | | Contract Assets | $0.4 million | $2.4 million | | Contract Liabilities | $10.9 million | $10.0 million | | Deferred Contract Costs | $19.6 million | $24.4 million | [Note 8 — Earnings Per Share](index=23&type=section&id=Note%208%20%E2%80%94%20Earnings%20Per%20Share) Due to net losses in both periods, the diluted EPS calculation excluded common stock equivalents as they were anti-dilutive. Basic and diluted EPS were $(0.02) for Q1 2021 and $(0.09) for Q1 2020 | Metric | Three Months Ended March 31, 2021 | Three Months Ended March 31, 2020 | | :-------------------- | :------------------------------ | :------------------------------ | | Basic Loss Per Share | **$(0.02)** | **$(0.09)** | | Diluted Loss Per Share | **$(0.02)** | **$(0.09)** | - Potentially dilutive shares from 2022 Notes (**2.5 million shares**), 2023 Notes (**3.2 million shares**), and 2026 Notes (**28.7 million shares**) were excluded from diluted EPS calculation for Q1 2021 as they were anti-dilutive due to net losses[80](index=80&type=chunk) [Note 9 — Employee Benefit Plans](index=24&type=section&id=Note%209%20%E2%80%94%20Employee%20Benefit%20Plans) The company made various share-based awards under its Long-Term Incentive Plan in Q1 2021, including RSUs and PSUs, and recognized compensation costs. Discretionary contributions to the 401(k) plan were suspended, and the Employee Stock Purchase Plan (ESPP) had 1.7 million shares available - **6.0 million shares** of common stock were available for issuance under the 2005 Long-Term Incentive Plan as of **March 31, 2021**[81](index=81&type=chunk) | Compensation Type | Three Months Ended March 31, 2021 (in millions) | Three Months Ended March 31, 2020 (in millions) | | :------------------------ | :--------------------------------------------- | :--------------------------------------------- | | Restricted Stock | $0.8 million | $1.1 million | | Equity PSUs | $1.0 million | $1.1 million | | Liability RSUs | $0.2 million | — | | Fixed-Value Cash Awards | $1.0 million | $1.2 million | - Discretionary contributions to the defined contribution 401(k) retirement plan were suspended indefinitely beginning **January 2021**[87](index=87&type=chunk) [Note 10 — Business Segment Information](index=25&type=section&id=Note%2010%20%E2%80%94%20Business%20Segment%20Information) Helix operates in three segments: Well Intervention, Robotics, and Production Facilities. In Q1 2021, Well Intervention and Production Facilities segments showed improved operating income, while Robotics reported an increased operating loss. Total net revenues decreased, but segment operating income improved significantly year-over-year | Segment | Net Revenues (Q1 2021, in millions) | Income (Loss) from Operations (Q1 2021, in millions) | | :------------------ | :--------------------------------- | :---------------------------------------------------- | | Well Intervention | $133.8 million | $5.2 million | | Robotics | $22.2 million | $(2.9) million | | Production Facilities | $16.4 million | $6.5 million | | **Total Segment Operating Income (Loss)** | **—** | **$8.8 million** | - Segment operating income improved to **$8.8 million** in Q1 2021 from a loss of **$(4.9) million** in Q1 2020[91](index=91&type=chunk) - A goodwill impairment charge of **$6.7 million** was recognized in Q1 2020, related to the acquisition of Subsea Technologies Group Limited[91](index=91&type=chunk) | Segment | Total Assets (Mar 31, 2021, in millions) | | :------------------ | :------------------------------------ | | Well Intervention | $2.08 billion | | Robotics | $108.4 million | | Production Facilities | $135.0 million | | Corporate and Other | $96.7 million | | **Total** | **$2.42 billion** | [Note 11 — Asset Retirement Obligations](index=27&type=section&id=Note%2011%20%E2%80%94%20Asset%20Retirement%20Obligations) Asset Retirement Obligations (AROs) for subsea infrastructure P&A activities increased slightly in Q1 2021 due to accretion expense. These obligations are primarily related to the Droshky oil and gas properties | Metric | 2021 (in millions) | 2020 (in millions) | | :------------------ | :------------------ | :------------------ | | AROs at January 1 | $30.9 million | $28.3 million | | Accretion Expense | $0.05 million | $0.7 million | | AROs at March 31 | $31.0 million | $28.9 million | - AROs consist of estimated costs for subsea infrastructure plug and abandonment (P&A) activities associated with oil and gas properties, primarily the Droshky properties[93](index=93&type=chunk)[94](index=94&type=chunk) [Note 12 — Commitments and Contingencies and Other Matters](index=27&type=section&id=Note%2012%20%E2%80%94%20Commitments%20and%20Contingencies%20and%20Other%20Matters) The company has long-term charter agreements for several vessels, with expirations ranging from 2021 to 2024. There are no material adverse contingencies, but the company is involved in various legal proceedings in the normal course of business - Long-term charter agreements for Siem Helix 1 (expires **June 2023**), Siem Helix 2 (expires **February 2024**), Grand Canyon II (extended to **December 2021**), and Grand Canyon III (expires **May 2023**)[95](index=95&type=chunk) - Management believes there are no contingencies that would have a material adverse effect on financial position, results of operations, or cash flows[96](index=96&type=chunk) - The company is involved in various legal proceedings, including personal injury claims under General Maritime Laws and the Jones Act[97](index=97&type=chunk) [Note 13 — Statement of Cash Flow Information](index=27&type=section&id=Note%2013%20%E2%80%94%20Statement%20of%20Cash%20Flow%20Information) Supplemental cash flow information shows interest paid increased significantly in Q1 2021 compared to Q1 2020, while income taxes paid decreased. Non-cash capital additions also decreased | Metric | Three Months Ended March 31, 2021 (in millions) | Three Months Ended March 31, 2020 (in millions) | | :------------------------------------ | :--------------------------------------------- | :--------------------------------------------- | | Interest Paid, Net of Capitalized Interest | $9.4 million | $4.8 million | | Income Taxes Paid | $1.8 million | $2.6 million | - Non-cash capital additions totaled **$0.6 million** at March 31, 2021, down from **$1.6 million** at December 31, 2020[98](index=98&type=chunk) [Note 14 — Allowance for Credit Losses](index=29&type=section&id=Note%2014%20%E2%80%94%20Allowance%20for%20Credit%20Losses) The allowance for credit losses decreased from $3.469 million at January 1, 2021, to $1.665 million at March 31, 2021, primarily due to write-offs of uncollectible receivables in the Robotics segment | Metric | 2021 (in millions) | 2020 (in millions) | | :-------------------- | :------------------ | :------------------ | | Balance at January 1 | $3.5 million | $0 | | Additions | $0.01 million | $0.6 million | | Write-offs | $(1.8) million | $0 | | Adjustments | $0 | $0.8 million | | Balance at March 31 | $1.7 million | $1.4 million | - Write-offs of **$1.8 million** in Q1 2021 reflect uncollectible receivables related to the Robotics segment[101](index=101&type=chunk) [Note 15 — Fair Value Measurements](index=29&type=section&id=Note%2015%20%E2%80%94%20Fair%20Value%20Measurements) The fair value of financial instruments like cash, receivables, and payables approximates their carrying amounts. The fair value of long-term debt is estimated using Level 1 (market approach for convertible notes) and Level 2 (third-party evaluation for Term Loan, MARAD Debt) inputs | Debt Type | Principal Amount (Mar 31, 2021, in millions) | Fair Value (Mar 31, 2021, in millions) | | :-------------------- | :------------------------------------------ | :-------------------------------------- | | Term Loan | $28.9 million | $28.6 million | | MARAD Debt | $52.7 million | $58.5 million | | 2022 Notes | $35.0 million | $34.9 million | | 2023 Notes | $30.0 million | $28.9 million | | 2026 Notes | $200.0 million | $232.7 million | | **Total Debt** | **$346.6 million** | **$383.7 million** | - Fair value of 2022, 2023, and 2026 Notes determined using **Level 1** fair value inputs (market approach)[107](index=107&type=chunk) - Fair value of Term Loan, Nordea Q5000 Loan, and MARAD Debt estimated using **Level 2** fair value inputs (third-party evaluation)[107](index=107&type=chunk) [Item 2. Management's Discussion and Analysis of Financial Condition and Results of Operations](index=30&type=section&id=Item%202.%20Management's%20Discussion%20and%20Analysis%20of%20Financial%20Condition%20and%20Results%20of%20Operations) This section provides management's perspective on the company's financial condition and results of operations, including forward-looking statements, an executive summary of the business and economic outlook, detailed analysis of segment performance, and a discussion of liquidity and capital resources [FORWARD-LOOKING STATEMENTS AND ASSUMPTIONS](index=30&type=section&id=FORWARD-LOOKING%20STATEMENTS%20AND%20ASSUMPTIONS) This section outlines various forward-looking statements made in the report, covering business strategy, financial projections, contract performance, market conditions, and regulatory actions. It also lists significant risks and uncertainties that could cause actual results to differ materially, including the ongoing COVID-19 pandemic, oil price volatility, and economic conditions - Forward-looking statements cover business strategy, financial projections, backlog, contract performance, vessel upgrades, financing, regulatory actions, market sentiment, renewable energy expansion, economic conditions, employee retention, and underlying assumptions[108](index=108&type=chunk)[110](index=110&type=chunk) - Key risks include the results and effects of the ongoing COVID-19 pandemic, impact of domestic and global economic conditions, oil and gas price volatility, potential contract cancellations, debt covenant compliance, competition, capital availability, and regulatory changes[110](index=110&type=chunk) [EXECUTIVE SUMMARY](index=32&type=section&id=EXECUTIVE%20SUMMARY) The executive summary provides an overview of Helix's business, the economic outlook and industry influences affecting its operations, and the current backlog. It highlights the company's focus on well intervention and robotics in both oil & gas and renewable energy markets, while acknowledging challenges from oil price volatility and the COVID-19 pandemic [Our Business](index=32&type=section&id=Our%20Business) Helix is an international offshore energy services company focused on well intervention and robotics for both oil & gas and renewable energy markets. Its fleet includes seven well intervention vessels, 42 work-class ROVs, and other specialized equipment, operating globally - Helix is an international offshore energy services company specializing in well intervention and robotics operations for the offshore energy industry[114](index=114&type=chunk) - Services cover the lifecycle of offshore oil or gas fields and offshore wind farm projects and cable burial operations in the renewable energy market[114](index=114&type=chunk) - Key assets include **seven well intervention vessels**, **six IRSs**, **three SILs**, ROAM, **42 work-class ROVs**, **four trenchers**, and **one ROVDrill**[114](index=114&type=chunk) [Economic Outlook and Industry Influences](index=32&type=section&id=Economic%20Outlook%20and%20Industry%20Influences) Demand for Helix's services is highly dependent on oil & gas and renewable energy market conditions, particularly spending by offshore energy companies. Oil price volatility, exacerbated by COVID-19 and OPEC+ actions, has led to reduced spending and demand in the oil and gas sector, impacting utilization and rates. Despite current weakness, the long-term outlook for well intervention and P&A services remains favorable due to the aging subsea tree base and focus on production optimization - Demand for services is primarily influenced by the condition of the oil and gas and renewable energy markets, and offshore energy companies' spending[115](index=115&type=chunk) - Crude oil prices have been volatile, exacerbated by COVID-19 and OPEC+ actions, leading to drastic spending reductions by oil and gas operators and decreased demand for services[118](index=118&type=chunk) - The COVID-19 pandemic is expected to continue impacting the industry through **2021**, making long-term contracts difficult, disrupting supply chains, and increasing costs[119](index=119&type=chunk) - Long-term fundamentals for well intervention and P&A services remain favorable due to the need to optimize existing wells, prolong well life, and safely decommission end-of-life wells[120](index=120&type=chunk) [Backlog](index=35&type=section&id=Backlog) As of March 31, 2021, Helix's consolidated backlog totaled $358 million, with $239 million expected to be performed in the remainder of 2021. The majority of the backlog is in the Well Intervention segment, but backlog is subject to changes, renegotiations, and cancellations - Consolidated backlog as of **March 31, 2021**, totaled **$358 million**[122](index=122&type=chunk) - **$239 million** of the backlog is expected to be performed over the remainder of **2021**[122](index=122&type=chunk) - The substantial majority of the backlog is associated with the Well Intervention segment, including contracts with BP and Petrobras, and a fixed fee agreement for the HP I, which together represent approximately **57%** of the total backlog[122](index=122&type=chunk) [RESULTS OF OPERATIONS](index=35&type=section&id=RESULTS%20OF%20OPERATIONS) This section analyzes the company's financial performance for the three months ended March 31, 2021, compared to the same period in 2020, highlighting changes in revenues, gross profit, operating expenses, and the impact of non-GAAP financial measures like EBITDA and free cash flow [Non-GAAP Financial Measures](index=35&type=section&id=Non-GAAP%20Financial%20Measures) The company uses non-GAAP financial measures like EBITDA and free cash flow to evaluate performance, compare results, and manage financial planning. EBITDA is defined as earnings before income taxes, net interest expense, other income/expense, D&A, and goodwill impairment. Adjusted EBITDA further excludes asset disposition gains/losses and credit loss provisions. Free cash flow is operating cash flows less capital expenditures (net of asset sales) | Metric | Three Months Ended March 31, 2021 (in millions) | Three Months Ended March 31, 2020 (in millions) | | :-------------------- | :--------------------------------------------- | :--------------------------------------------- | | EBITDA | $36.1 million | $19.4 million | | Adjusted EBITDA | $36.2 million | $19.3 million | | Free Cash Flow | $38.5 million | $(29.6) million | [Comparison of Three Months Ended March 31, 2021 and 2020](index=37&type=section&id=Comparison%20of%20Three%20Months%20Ended%20March%2031,%202021%20and%202020) Consolidated net revenues decreased by 10% YoY, but gross profit increased significantly by 628%. This improvement was driven by higher gross profit in Well Intervention and Production Facilities, despite a higher gross loss in Robotics. Operating expenses and net interest expense also saw changes | Metric | March 31, 2021 (in millions) | March 31, 2020 (in millions) | Change (Amount, in millions) | Change (Percent) | | :-------------------------- | :---------------------------- | :---------------------------- | :---------------------------- | :--------------- | | Consolidated Net Revenues | $163.4 million | $181.0 million | $(17.6) million | **(10)%** | | Consolidated Gross Profit | $14.6 million | $2.0 million | $12.6 million | **628%** | - Well Intervention revenues decreased by **5%** to **$133.8 million**, primarily due to lower vessel utilization in the North Sea and West Africa, partially offset by higher utilization in the Gulf of Mexico[129](index=129&type=chunk)[131](index=131&type=chunk) - Robotics revenues decreased by **37%** to **$22.2 million**, reflecting a reduction in vessel days and decreased utilization of ROVs and ROVDrill, partially offset by increased trenching activities[129](index=129&type=chunk)[132](index=132&type=chunk) - Production Facilities revenues increased by **6%** to **$16.4 million**, primarily due to higher oil and gas production revenues[129](index=129&type=chunk)[133](index=133&type=chunk) - Well Intervention gross profit increased by **$10.0 million**, and Production Facilities gross profit increased by **$3.0 million**, while Robotics gross loss increased by **$0.5 million**[135](index=135&type=chunk)[136](index=136&type=chunk) - Selling, general and administrative expenses decreased to **$15.2 million** from **$16.3 million**, reflecting lower credit loss reserves and employee compensation costs[138](index=138&type=chunk) - Net other income was **$1.6 million** for Q1 2021, compared to a net other expense of **$10.4 million** for Q1 2020, primarily due to foreign currency transaction gains from the strengthening British pound[140](index=140&type=chunk) - Income tax provision was **$0.1 million** for Q1 2021, compared to a benefit of **$21.1 million** for Q1 2020, with effective tax rates of **(4.0)%** and **60.2%** respectively, due to the absence of prior year tax benefits (CARES Act, foreign subsidiary restructuring)[141](index=141&type=chunk) [LIQUIDITY AND CAPITAL RESOURCES](index=40&type=section&id=LIQUIDITY%20AND%20CAPITAL%20RESOURCES) This section details the company's liquidity position, including changes in working capital, debt, and cash flows from operating, investing, and financing activities. It also discusses the impact of market conditions on liquidity and future contractual obligations [Overview](index=40&type=section&id=Overview) Net working capital increased, while long-term debt decreased from December 31, 2020, to March 31, 2021. Liquidity, defined as cash and available Revolving Credit Facility, decreased. The company repaid the Nordea Q5000 Loan in January 2021 and believes current cash, operating cash flows, and credit facility availability are sufficient for the next 12 months, despite market challenges and increased cost of capital | Metric | March 31, 2021 (in millions) | December 31, 2020 (in millions) | | :-------------------- | :----------------------------- | :----------------------------- | | Net Working Capital | $270.5 million | $246.3 million | | Long-Term Debt | $299.6 million | $258.9 million | | Liquidity | $377.0 million | $451.5 million | - Liquidity at **March 31, 2021**, included **$204.8 million** in cash and cash equivalents and **$172.2 million** of available borrowing capacity under the Revolving Credit Facility[145](index=145&type=chunk) - The Nordea Q5000 Loan was fully repaid upon its maturity in **January 2021**[144](index=144&type=chunk) - The ongoing COVID-19 pandemic and market conditions have contributed to rising yields on existing debt, volatility in stock price, and limited access to certain capital markets, increasing the cost of capital[148](index=148&type=chunk) [Operating Cash Flows](index=41&type=section&id=Operating%20Cash%20Flows) Net cash provided by operating activities significantly improved to $39.9 million in Q1 2021 from a net cash outflow of $17.2 million in Q1 2020, driven by lower operating loss and decreases in working capital | Metric | Three Months Ended March 31, 2021 (in millions) | Three Months Ended March 31, 2020 (in millions) | | :------------------------------------ | :--------------------------------------------- | :--------------------------------------------- | | Net Cash Provided by (Used in) Operating Activities | $39.9 million | $(17.2) million | - The **$57.1 million** increase in operating cash flows primarily reflects lower operating loss and decreases in working capital[150](index=150&type=chunk) [Investing Activities](index=41&type=section&id=Investing%20Activities) Net cash used in investing activities decreased substantially in Q1 2021 to $1.3 million from $12.4 million in Q1 2020, primarily due to reduced capital expenditures following the completion of the Q7000 vessel | Metric | Three Months Ended March 31, 2021 (in millions) | Three Months Ended March 31, 2020 (in millions) | | :-------------------------- | :--------------------------------------------- | :--------------------------------------------- | | Net Cash Used in Investing Activities | $(1.3) million | $(12.4) million | - Capital expenditures during Q1 2020 primarily included payments associated with the construction and completion of the Q7000[151](index=151&type=chunk) [Financing Activities](index=43&type=section&id=Financing%20Activities) Net cash outflows from financing activities increased to $59.9 million in Q1 2021, mainly due to the repayment of $58.2 million in scheduled debt maturities, including the final payment of the Nordea Q5000 Loan | Metric | Three Months Ended March 31, 2021 (in millions) | Three Months Ended March 31, 2020 (in millions) | | :-------------------------- | :--------------------------------------------- | :--------------------------------------------- | | Net Cash Used in Financing Activities | $(59.9) million | $(18.4) million | - Net cash outflows in Q1 2021 primarily reflect the repayment of **$58.2 million** of scheduled debt maturities, including the final maturity of **$53.6 million** of the Nordea Q5000 Loan[152](index=152&type=chunk) [Free Cash Flow](index=43&type=section&id=Free%20Cash%20Flow) Free cash flow significantly improved to $38.5 million in Q1 2021 from a negative $29.6 million in Q1 2020, driven by increased operating cash flows and decreased capital expenditures | Metric | Three Months Ended March 31, 2021 (in millions) | Three Months Ended March 31, 2020 (in millions) | | :------------- | :--------------------------------------------- | :--------------------------------------------- | | Free Cash Flow | $38.5 million | $(29.6) million | - Free cash flow increased by **$68.2 million**, primarily attributable to the increase in operating cash flows and the decrease in capital expenditures[153](index=153&type=chunk) [Contractual Obligations and Commercial Commitments](index=43&type=section&id=Contractual%20Obligations%20and%20Commercial%20Commitments) As of March 31, 2021, total contractual cash obligations were $675.1 million, with significant portions due in 1-3 years ($249.0 million) and 3-5 years ($251.5 million), primarily related to long-term debt and operating leases | Obligation Type | Total (in millions) | Less Than 1 Year (in millions) | 1-3 Years (in millions) | 3-5 Years (in millions) | More Than 5 Years (in millions) | | :---------------------- | :------------------- | :------------------------------ | :----------------------- | :----------------------- | :----------------------------- | | Term Loan | $28.9 million | $28.9 million | $0 | $0 | $0 | | MARAD Debt | $52.7 million | $7.7 million | $16.7 million | $18.4 million | $9.9 million | | 2022 Notes | $35.0 million | $0 | $35.0 million | $0 | $0 | | 2023 Notes | $30.0 million | $0 | $30.0 million | $0 | $0 | | 2026 Notes | $200.0 million | $0 | $0 | $200.0 million | $0 | | Interest related to debt | $80.3 million | $20.1 million | $32.6 million | $27.3 million | $0.3 million | | Property and equipment | $6.2 million | $6.1 million | $0.1 million | $0 | $0 | | Operating leases | $242.0 million | $97.8 million | $134.6 million | $5.8 million | $3.9 million | | **Total Cash Obligations** | **$675.1 million** | **$160.6 million** | **$249.0 million** | **$251.5 million** | **$14.1 million** | - Operating leases include **$86.9 million** related to non-lease (services) components of long-term vessel charters[155](index=155&type=chunk) [CRITICAL ACCOUNTING ESTIMATES AND POLICIES](index=44&type=section&id=CRITICAL%20ACCOUNTING%20ESTIMATES%20AND%20POLICIES) The company's financial statements require estimates, judgments, and assumptions in conformity with GAAP, which are based on historical experience and available information. Readers are referred to the 2020 Form 10-K for detailed information on critical accounting estimates and policies - Financial statements require estimates, judgments, and assumptions in conformity with GAAP, based on historical experience and available information[157](index=157&type=chunk) - Detailed information regarding critical accounting estimates and policies is available in the **2020 Form 10-K**[158](index=158&type=chunk) [Item 3. Quantitative and Qualitative Disclosures About Market Risk](index=44&type=section&id=Item%203.%20Quantitative%20and%20Qualitative%20Disclosures%20About%20Market%20Risk) Helix is exposed to interest rate risk and foreign currency exchange rate risk. A hypothetical 100 basis point increase in interest rates would increase interest expense by $0.1 million for Q1 2021. Foreign currency translation gains of $4.6 million were recorded, and transaction gains of $1.6 million were recognized, primarily due to the strengthening British pound - As of **March 31, 2021**, **$28.9 million** of outstanding debt was subject to floating interest rates[160](index=160&type=chunk) - A hypothetical **100 basis point** increase in interest rates would have increased interest expense by an additional **$0.1 million** for the three-month period ended **March 31, 2021**[160](index=160&type=chunk) - Foreign currency translation gains of **$4.6 million** were recorded to accumulated other comprehensive loss for Q1 2021[162](index=162&type=chunk) - Foreign currency transaction gains of **$1.6 million** were recognized in other income (expense), net for Q1 2021, primarily related to U.K. subsidiaries due to the strengthening British pound[163](index=163&type=chunk) [Item 4. Controls and Procedures](index=45&type=section&id=Item%204.%20Controls%20and%20Procedures) Management, including the CEO and CFO, concluded that the company's disclosure controls and procedures were effective as of March 31, 2021. There were no material changes in internal control over financial reporting during the quarter - Disclosure controls and procedures were evaluated and concluded to be effective as of **March 31, 2021**[165](index=165&type=chunk) - No material changes in internal control over financial reporting occurred during the quarter ended **March 31, 2021**[166](index=166&type=chunk) PART II. OTHER INFORMATION [Item 1. Legal Proceedings](index=45&type=section&id=Item%201.%20Legal%20Proceedings) This section refers to Note 12 of the Condensed Consolidated Financial Statements for information on legal proceedings, which states the company is involved in various legal proceedings, including personal injury claims, but believes there are no material adverse contingencies - Information on legal proceedings is incorporated by reference from **Note 12** to the Condensed Consolidated Financial Statements[168](index=168&type=chunk) - The company believes there are no contingencies that would have a material adverse effect on its financial position, results of operations, or cash flows[96](index=96&type=chunk) [Item 2. Unregistered Sales of Equity Securities and Use of Proceeds](index=45&type=section&id=Item%202.%20Unregistered%20Sales%20of%20Equity%20Securities%20and%20Use%20of%20Proceeds) The company repurchased 447,139 shares of common stock in January 2021 at an average price of $4.43 per share, primarily for tax obligations upon vesting of restricted shares. As of March 31, 2021, 7,734,655 shares remained available for repurchase under the program | Period | Total Number of Shares Purchased | Average Price Paid Per Share | | :------------------------ | :----------------------------- | :--------------------------- | | January 1 to January 31, 2021 | 447.1 thousand shares | $4.43 | - Shares purchased were primarily forfeited in satisfaction of tax obligations upon vesting of restricted shares[171](index=171&type=chunk) - As of **March 31, 2021**, **7.7 million shares** remained available for repurchase under the stock repurchase program[170](index=170&type=chunk) [Item 6. Exhibits](index=39&type=section&id=Item%206.%20Exhibits) This section lists the exhibits filed or furnished with the Form 10-Q, including amended articles of incorporation, by-laws, certifications from the CEO and CFO, and XBRL documents - Exhibits include Amended and Restated Articles of Incorporation, Second Amended and Restated By-Laws, Certifications pursuant to Rule 13a-14(a) and Section 906 of the Sarbanes–Oxley Act, and various XBRL documents[173](index=173&type=chunk) [Signatures](index=40&type=section&id=Signatures) The report is signed by Owen Kratz, President and Chief Executive Officer, and Erik Staffeldt, Executive Vice President and Chief Financial Officer, on April 28, 2021 - The report was signed by Owen Kratz (President and Chief Executive Officer) and Erik Staffeldt (Executive Vice President and Chief Financial Officer) on **April 28, 2021**[178](index=178&type=chunk)

Helix Energy Solutions Group, Inc. (NYSE:HLX) Q1 2021 Earnings Conference Call April 27, 2021 10:00 AM ET Company Participants Erik Staffeldt – Chief Financial Officer Ken Neikirk – General Counsel Owen Kratz – Chief Executive Officer Scotty Sparks – Chief Operating Officer Conference Call Participants Ian MacPherson – Piper Sandler & Co. Mike Sabella – Bank of America James Schumm – Cowen and Company Igor Levi – BGIT Research Samantha Hoh – Evervore ISI Operator Greetings and welcome to the Helix Energy S ...

Company Overview - Helix Energy Solutions provides specialty services to the offshore energy industry, focusing on well intervention and robotics operations[4] - The company has a gross profit of $452 million and a contract backlog of $407 million[4] - Helix operates globally with 1,563 employees, primarily in the Gulf of Mexico, Brazil, North Sea, Asia Pacific, and West Africa[4] Business Segments - Well Intervention accounted for 70% of revenue, with Robotics contributing 23% and Production Facilities 7%[4] - Robotics revenues include over 41% from the renewables market[21] - Well Intervention revenue was $539 million, while Robotics revenue was $178 million[11, 18] Financial Performance and Outlook - Liquidity was approximately $452 million as of December 31, 2020[4, 28] - Total funded debt was $405 million as of December 31, 2020, expected to decrease by $91 million in 2021[29, 44] - The company expects 2021 EBITDA to be lower than the $155 million generated in 2020 due to COVID-19 and market uncertainty[35] Fleet and Assets - The company has seven dedicated well intervention vessels and two dedicated ROV support vessels[4] - The Robotics segment has a fleet of 44 work-class ROVs and 4 subsea trenchers[4, 18]

Financial Position - As of December 31, 2020, the company reported total assets of $2,498.3 million, a decrease from $2,596.7 million in 2019[265] - The company reported a decrease in total liabilities to $753.9 million in 2020 from $893.7 million in 2019[265] - The carrying value of property and equipment as of December 31, 2020, was $1,783 million[252] - Total property and equipment increased to $2.95 billion in 2020 from $2.92 billion in 2019, with vessels accounting for $2.35 billion[335] - The principal amount of total debt as of December 31, 2020, was $404,732,000, down from $436,146,000 in 2019[433] - Long-term debt decreased to $258.9 million in 2020 from $306.1 million in 2019, with total debt at $349.6 million[343] Cash Flow and Liquidity - The company had $83.3 million of outstanding debt subject to floating rates as of December 31, 2020, with an estimated additional interest expense of $0.9 million if rates increased by 100 basis points[241] - Cash and cash equivalents at the end of 2020 increased to $291.320 million from $262.561 million at the end of 2019, representing an increase of 10.9%[276] - Net cash provided by operating activities was $98.800 million, down 41.7% from $169.669 million in 2019[276] - The company had a net cash used in investing activities of $19.281 million, a decrease from $142.385 million in 2019[276] - The company repaid $183.150 million in convertible senior notes during 2020, compared to no repayments in 2019[276] Revenue and Profitability - Net revenues for 2020 were $733,555, a decrease of 2.4% from $751,909 in 2019[268] - Gross profit for 2020 was $79,909, down 42.0% from $137,838 in 2019[268] - Net income attributable to common shareholders for 2020 was $22,174, a decline of 61.7% compared to $57,919 in 2019[268] - Comprehensive income for 2020 was $33,204, compared to $66,921 in 2019, reflecting a decrease of 50.3%[271] - The company recognized a goodwill impairment of $6,689 in 2020, with no such impairment reported in 2019[268] Segment Performance - Well Intervention segment generated $539.2 million in revenues, down from $593.3 million in 2019, with an operating income of $26.9 million compared to $89.6 million in the previous year[417] - Robotics segment revenues increased to $178.0 million from $171.7 million in 2019, with operating income rising to $13.8 million from $7.3 million[417] - Production Facilities segment reported revenues of $58.3 million, a slight decrease from $61.2 million in 2019, with operating income of $16.0 million compared to $17.2 million[417] Foreign Currency and Hedging - Approximately 40% of the company's net assets were impacted by changes in foreign currencies in relation to the U.S. dollar as of December 31, 2020[243] - The company recorded foreign currency translation gains of $12.8 million in 2020, compared to gains of $5.4 million in 2019[243] - The company engages in cash flow hedges to mitigate market risks associated with interest rates and foreign currency exchange rates, enhancing predictability of cash flows[322] Tax and Regulatory Matters - The company recognized a net tax benefit of $7.6 million in 2020 due to the CARES Act, which included an $18.9 million current tax benefit and an $11.3 million deferred tax expense[377] - Deferred tax liabilities totaled $162.5 million as of December 31, 2020, with net operating losses available for carryforward amounting to $197.4 million[379] - The company had a valuation allowance of $2.9 million against U.S. deferred tax assets for foreign tax credits, indicating uncertainty in utilizing these credits[380] Shareholder and Equity Matters - The company has not repurchased any shares under its stock buyback program since 2015, with 6,913,705 shares available for repurchase as of December 31, 2020[390] - The 2005 Long-Term Incentive Plan currently has 17.3 million shares authorized for issuance, with 6.8 million shares available as of December 31, 2020[402] - The company recognized $4.2 million in share-based compensation related to restricted stock for the year ended December 31, 2020[408] Capital Expenditures - Capital expenditures decreased significantly to $20.244 million from $140.854 million in 2019, reflecting a reduction of 85.6%[276] - The company took delivery of the Q7000 vessel in November 2019, which commenced operations in January 2020, completing all planned major capital commitments[423]

Form 10-Q ☑ QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 For the quarterly period ended September 30, 2020 or ☐ TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 UNITED STATES SECURITIES AND EXCHANGE COMMISSION WASHINGTON, D.C. 20549 For the transition period from__________ to__________ Commission File Number: 001-32936 HELIX ENERGY SOLUTIONS GROUP, INC. (Exact name of registrant as specified in its charter) Minnesota 95-34096 ...

UNITED STATES SECURITIES AND EXCHANGE COMMISSION WASHINGTON, D.C. 20549 Form 10-Q ☑ QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 For the quarterly period ended June 30, 2020 or ☐ TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 For the transition period from__________ to__________ Commission File Number: 001-32936 HELIX ENERGY SOLUTIONS GROUP, INC. (Exact name of registrant as specified in its charter) Minnesota 95-3409686 (F ...

UNITED STATES SECURITIES AND EXCHANGE COMMISSION WASHINGTON, D.C. 20549 Form 10-Q ☑ QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 For the quarterly period ended March 31, 2020 or ☐ TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 For the transition period from__________ to__________ Commission File Number: 001-32936 HELIX ENERGY SOLUTIONS GROUP, INC. (Exact name of registrant as specified in its charter) Minnesota 95-3409686 ( ...

UNITED STATES SECURITIES AND EXCHANGE COMMISSION Washington, D.C. 20549 or ☐ TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 For the transition period from__________ to__________ Commission file number 001-32936 HELIX ENERGY SOLUTIONS GROUP, INC. (Exact name of registrant as specified in its charter) Minnesota 95-3409686 State or other jurisdiction of incorporation or organization (I.R.S. Employer Identification No.) 3505 West Sam Houston Parkway North Suite 400 Hous ...

UNITED STATES SECURITIES AND EXCHANGE COMMISSION WASHINGTON, D.C. 20549 Form 10-Q ☑ QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 For the quarterly period ended September 30, 2019 or ☐ TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 For the transition period from__________ to__________ Commission File Number: 001-32936 HELIX ENERGY SOLUTIONS GROUP, INC. (Exact name of registrant as specified in its charter) (State or other ju ...