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Helix Reports Second Quarter 2012 Results

Stocks in this article: HLX

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 Jun. 30, Six Months Ended Jun. 30,

(in thousands, except per share data)

2012 2011 2012 2011
(unaudited) (unaudited)
 
Net revenues:
Contracting services $ 197,461 $ 165,861 $ 427,303 $ 288,609
Oil and gas   149,933     172,458     328,018     341,317  
347,394 338,319 755,321 629,926
Cost of sales:
Contracting services 147,156 116,521 304,124 223,428
Contracting services impairments 14,590 - 14,590 -
Oil and gas 92,423 110,027 181,672 217,651
Oil and gas impairments   -     11,573     -     11,573  
254,169 238,121 500,386 452,652
 
Gross profit 93,225 100,198 254,935 177,274
Loss on sale of assets, net (236 ) (22 ) (1,714 ) (6 )
Ineffectiveness on oil and gas derivative commodity contracts 10,069 - 7,730 -
Selling, general and administrative expenses   (24,571 )   (23,758 )   (50,267 )   (48,739 )
Income from operations 78,487 76,418 210,684 128,529
Equity in earnings of investments 5,748 5,887 6,155 11,537
Net interest expense and other   (20,319 )   (24,025 )   (59,120 )   (45,601 )
Income before income taxes 63,916 58,280 157,719 94,465
Provision for income taxes   18,476     16,171     45,753     25,721  
Net income, including noncontrolling interests 45,440 42,109 111,966 68,744
Net income applicable to noncontrolling interests   (789 )   (786 )   (1,578 )   (1,554 )
Net income applicable to Helix 44,651 41,323 110,388 67,190
Preferred stock dividends   (10 )   (10 )   (20 )   (20 )
Net income applicable to Helix common shareholders $ 44,641   $ 41,313   $ 110,368   $ 67,170  
 
Weighted Avg. Common Shares Outstanding:
Basic   104,563     104,673     104,547     104,573  
Diluted   105,042     105,140     105,012     105,024  
 
Earnings Per Share of Common Stock:
Basic $ 0.42   $ 0.39   $ 1.05   $ 0.63  
Diluted $ 0.42   $ 0.39   $ 1.04   $ 0.63  

 

Comparative Condensed Consolidated Balance Sheets
                                 
ASSETS LIABILITIES & SHAREHOLDERS' EQUITY
(in thousands)       Jun. 30, 2012       Dec. 31, 2011           (in thousands)       Jun. 30, 2012       Dec. 31, 2011
(unaudited) (unaudited)
Current Assets: Current Liabilities:
Cash and equivalents (1) $ 649,503 $ 546,465 Accounts payable $ 156,738 $ 147,043
Accounts receivable 239,449 276,156 Accrued liabilities 177,225 239,963
Other current assets 117,979 121,621 Income taxes payable 3,065 1,293
                            Current mat of L-T debt (1)         12,997         7,877
Total Current Assets 1,006,931 944,242 Total Current Liabilities 350,025 396,176
 
 
Net Property & Equipment: Long-term debt (1) 1,167,908 1,147,444
Contracting Services 1,519,509 1,459,665 Deferred income taxes 445,817 417,610
Oil and Gas 839,784 871,662 Asset retirement obligations 135,235 161,208
Equity investments 173,543 175,656 Other long-term liabilities 8,832 9,368
Goodwill 62,252 62,215 Convertible preferred stock (1) 1,000 1,000
Other assets, net         86,786         68,907           Shareholders' equity (1)         1,579,988         1,449,541
Total Assets       $ 3,688,805       $ 3,582,347           Total Liabilities & Equity       $ 3,688,805       $ 3,582,347
(1)     Net debt to book capitalization - 25% at June 30, 2012. Calculated as total debt less cash and equivalents ($531,402) divided by sum of total net debt, convertible preferred stock and shareholders' equity ($2,112,390).
   
Helix Energy Solutions Group, Inc. Reconciliation of Non GAAP Measures Three and Six Months Ended June 30, 2012
                               
               

Earnings Release:

 

Reconciliation From Net Income to Adjusted EBITDAX:

 

2Q12

2Q11

1Q12

2012

2011

(in thousands)
 
Net income applicable to common shareholders $ 44,641 $ 41,313 $ 65,727 $ 110,368 $ 67,170
Non-cash impairments 14,590 11,573 - 14,590 11,573
Loss (gain) on asset sales 236 22 1,478 1,714 (747 )
Preferred stock dividends 10 10 10 20 20
Income tax provision 18,476 16,171 27,277 45,753 25,721
Net interest expense and other 20,319 24,022 38,801 59,120 46,342
Ineffectiveness on oil and gas derivative commodity contracts (10,069 ) - 2,339 (7,730 ) -
Depreciation and amortization 62,231 74,790 72,255 134,486 166,695
Exploration expense   1,092         7,939       754       1,846         8,285  
 
Adjusted EBITDAX $ 151,526       $ 175,840     $ 208,641     $ 360,167       $ 325,059  

 

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 June 30, 2012
 
   

Earnings Release:

 

Reconciliation of significant items:

 

2Q12

(in thousands, except earnings per share data)
 
Contracting services impairments $ 14,590
Tax benefit   (5,107 )
Contracting services impairments, net: $ 9,483  
 
Diluted shares 105,042
Net after income tax effect per share $ 0.09  




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