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Helix Reports Fourth Quarter And Full Year 2011 Results

Reconciliation of Non-GAAP Financial Measures

Management evaluates Company performance and financial condition using certain non-GAAP metrics, primarily Adjusted EBITDAX, net debt and net debt to book capitalization. We calculate Adjusted EBITDAX as earnings before net interest expense, taxes, depreciation and amortization and exploration expense. Net debt is calculated as the sum of financial debt less cash and equivalents on hand. Net debt to book capitalization is calculated by dividing net debt by the sum of net debt, convertible preferred stock and shareholders’ equity. These non-GAAP measures are useful to investors and other internal and external users of our financial statements in evaluating our operating performance because they are widely used by investors in our industry to measure a company’s operating performance without regard to items which can vary substantially from company to company, and help investors meaningfully compare our results from period to period. Adjusted EBITDAX should not be considered in isolation or as a substitute for, but instead is supplemental to, income from operations, net income or other income data prepared in accordance with GAAP. Non-GAAP financial measures should be viewed in addition to, and not as an alternative to our reported results prepared in accordance with GAAP. Users of this financial information should consider the types of events and transactions which are excluded.

Forward-Looking Statements

This press release 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" within the meaning of the Private Securities Litigation Reform Act of 1995, including, without limitation, any projections of financial items; future production volumes, results of exploration, exploitation, development, acquisition and operations expenditures, and prospective reserve levels of property or wells; any statements of the plans, strategies and objectives of management for future operations; any statement concerning developments; any statements regarding future economic conditions or performance; any statements of expectation or belief; and any statements of assumptions underlying any of the foregoing. The forward-looking statements are subject to a number of known and unknown risks, uncertainties and other factors including but not limited to the performance of contracts by suppliers, customers and partners; actions by governmental and regulatory authorities; operating hazards and delays; employee management issues; uncertainties inherent in the exploration for and development of oil and gas and in estimating reserves; complexities of global political and economic developments; geologic risks; volatility of oil and gas prices and other risks described from time to time in our reports filed with the Securities and Exchange Commission ("SEC"), including the Company's most recently filed Annual Report on Form 10-K and in the Company’s other filings with the SEC, which are available free of charge on the SEC’s website at www.sec.gov. We assume no obligation and do not intend to update these forward-looking statements except as required by the securities laws.

 
HELIX ENERGY SOLUTIONS GROUP, INC.
 
Comparative Condensed Consolidated Statements of Operations
                   
Three Months Ended Dec. 31, Twelve Months Ended Dec. 31,

(in thousands, except per share data)

2011 2010 2011 2010
(unaudited) (unaudited)
 

Net revenues:

Contracting services

$ 200,113 $ 169,835 $ 702,000 $ 774,469
Oil and gas

 

196,072     136,502     696,607     425,369  

 

396,185 306,337 1,398,607 1,199,838

Cost of sales:

Contracting services

 

157,333 162,075 528,375 600,083
Oil and gas

 

99,223 112,472 396,123 376,724
Oil and gas property impairments 107,525 9,212 132,603 181,083
Exploration expense   1,081     6,496     10,914     8,276  
365,162 290,255 1,068,015 1,166,166
 

Gross profit

31,023 16,082 330,592 33,672
Goodwill impairment - (16,743 ) - (16,743 )
Gain on oil and gas derivative commodity contracts

 

- (1,555 ) - 1,088
Gain on sale of assets, net 4,531 3,159 4,525 9,405
Selling, general and administrative expenses   (28,768 )   (30,403 )   (99,589 )   (122,078 )

Income (loss) from operations

6,786 (29,460 ) 235,528 (94,656 )
Equity in earnings of investments 5,772 6,537 22,215 19,469
Other than temporary loss on equity investments

 

(10,563 ) (2,240 ) (10,563 ) (2,240 )
Gain on subsidiary equity transaction - - 753 -
Net interest expense and other   (18,771 )   (21,498 )   (99,953 )   (86,324 )

Income (loss) before income taxes

(16,776 ) (46,661 ) 147,980 (163,751 )
Provision for (benefit of) income taxes   (34,283 )   2,364     14,903     (39,598 )

Net income (loss), including noncontrolling interests

17,507 (49,025 ) 133,077 (124,153 )

Net income applicable to noncontrolling interests

 

(744 )   (786 )   (3,098 )   (2,835 )

Net income (loss) applicable to Helix

16,763 (49,811 ) 129,979 (126,988 )
Preferred stock dividends   (10 )   (10 )   (40 )   (114 )

Net income (loss) applicable to Helix common shareholders

$ 16,753   $ (49,821 ) $ 129,939   $ (127,102 )
 

Weighted Avg. Common Shares Outstanding:

Basic   104,267     104,111     104,528     103,857  
Diluted   104,697     104,111     104,953     103,857  
 

Earnings (Loss) Per Share of Common Stock:

Basic $ 0.16   $ (0.48 ) $ 1.23   $ (1.22 )
Diluted $ 0.16   $ (0.48 ) $ 1.22   $ (1.22 )
 
 

Comparative Condensed Consolidated Balance Sheets

     
ASSETS LIABILITIES & SHAREHOLDERS' EQUITY
(in thousands) Dec. 30, 2011     Dec. 31, 2010       (in thousands) Dec. 30, 2011     Dec. 31, 2010
(unaudited)     (unaudited)    

Current Assets:

Current Liabilities:

Cash and equivalents

$ 546,465 $ 391,085 Accounts payable $ 147,043 $ 159,381

Accounts receivable

276,156 226,704 Accrued liabilities 239,963 198,237

Other current assets

121,621 123,065 Income taxes payable 1,293 -
                Current mat of L-T debt (1)   7,877       10,179
Total Current Assets 944,242 740,854 Total Current Liabilities 396,176 367,797
 
 
Net Property & Equipment: Long-term debt (1) 1,147,444 1,347,753

Contracting Services

1,459,665 1,452,837 Deferred income taxes 417,610 413,639

Oil and Gas

871,662 1,074,243 Asset retirement obligations 161,208 170,410
Equity investments 175,656 187,031 Other long-term liabilities 9,368 5,777
Goodwill 62,215 62,494 Convertible preferred stock (1) 1,000 1,000
Other assets, net   68,907       74,561       Shareholders' equity (1)   1,449,541       1,285,644
Total Assets $ 3,582,347     $ 3,592,020       Total Liabilities & Equity $ 3,582,347     $ 3,592,020
 

(1) Net debt to book capitalization - 30% at December 31, 2011. Calculated as total debt less cash and equivalents ($608,856) divided by sum of total net debt, convertible preferred stock and shareholders' equity ($2,059,397).

 
 
Helix Energy Solutions Group, Inc.
Reconciliation of Non GAAP Measures
Three and Twelve Months Ended December 31, 2011
                             

Earnings Release:

               

Reconciliation From Net Income to Adjusted EBITDAX:

 
 

 

4Q11 4Q10 3Q11 2011 2010
(in thousands)
 
Net income (loss) applicable to common shareholders $ 16,753 $ (49,821 ) $ 46,016 $ 129,939 $ (127,102 )
Non-cash impairments 96,477 24,686 - 108,050 195,660
Gain on asset sales (4,531 ) (3,159 ) - (5,278 ) (9,378 )
Preferred stock dividends 10 10 10 40 114
Income tax provision (benefit) (34,283 ) 2,364 23,465 14,903 (39,600 )
Net interest expense and other 18,771 21,484 34,829 99,942 86,192
Depreciation and amortization 71,323 94,147 72,134 310,152 316,164
Exploration expense   1,081         6,496         1,548       10,914         8,276  
 
Adjusted EBITDAX $ 165,601       $ 96,207       $ 178,002     $ 668,662       $ 430,326  
 
 
 
We calculate adjusted EBITDAX as earnings before net interest expense, taxes, depreciation and amortization, and exploration expense. These non-GAAP measures are useful to investors and other internal and external users of our financial statements in evaluating our operating performance because they are widely used by investors in our industry to measure a company's operating performance without regard to items which can vary substantially from company to company and help investors meaningfully compare our results from period to period. Adjusted EBITDAX should not be considered in isolation or as a substitute for, but instead is supplemental to, income from operations, net income or other income data prepared in accordance with GAAP. Non-GAAP financial measures should be viewed in addition to, and not as an alternative to our reported results prepared in accordance with GAAP. Users of this financial information should consider the types of events and transactions which are excluded.
 
 
Helix Energy Solutions Group, Inc.
Reconciliation of Non GAAP Measures
Three Months Ended December 31, 2011
           

Earnings Release:

     

 

 

Reconciliation of significant items:

4Q11

4Q10

(in thousands, except earnings per share data)
Property impairments and other charges:

Oil and gas impairment charges

$ 107,525 $ 9,212

Australia impairment charges

17,127 -

Gain on sale of oil and gas property

(4,531 ) -

Goodwill impairment

-

16,743

Expiring offshore leases

- 6,394

Lufeng loss

- 21,431

Tax (benefit) provision associated with above

(36,048 ) 2,755

Tax benefit associated with our Australian entity reorganization

  (31,335 )   -
Property impairments and other charges, net: $ 52,738   $ 56,535
 
Diluted shares 104,697 104,111
Net after income tax effect per share $ 0.50   $ 0.54
 




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