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Helix Reports Third Quarter 2013 Results

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 statements regarding our strategy; any statements regarding future utilization; any projections of financial items; future operations expenditures; 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; our ultimate ability to realize current backlog; employee management issues; 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 Sep. 30, Nine Months Ended Sep. 30,
(in thousands, except per share data) 2013 2012 2013 2012
(unaudited) (unaudited)
 
 
Revenues $ 220,117 $ 217,110 $ 649,724 $ 644,413
Cost of sales   150,660     159,191     460,203     485,573  
Gross profit 69,457 57,919 189,521 158,840
Loss on commodity derivative contracts - - (14,113 ) -
Gain (loss) on sale of assets 15,812 (12,933 ) 14,727 (12,933 )
Selling, general and administrative expenses   (22,610 )   (24,770 )   (65,041 )   (68,754 )
Income from operations 62,659 20,216 125,094 77,153
Equity in earnings of investments 857 1,392 2,150 7,547
Other income - oil and gas 1,681 - 5,781 -
Net interest expense and other   (12,791 )   (9,176 )   (42,236 )   (54,066 )
Income before income taxes 52,406 12,432 90,789 30,634
Income tax provision (benefit)   7,058     1,270     16,078     (1,405 )
Income from continuing operations 45,348 11,162 74,711 32,039
Income from discontinued operations, net of tax   44     4,503     1,073     95,572  
Net income, including noncontrolling interests 45,392 15,665 75,784 127,611
Less net income applicable to noncontrolling interests   (799 )   (800 )   (2,365 )   (2,378 )
Net income applicable to Helix $ 44,593   $ 14,865   $ 73,419   $ 125,233  
 
Weighted Avg. Common Shares Outstanding:
Basic   105,029     104,256     105,036     104,450  
Diluted   105,136     104,729     105,152     104,897  
 
Basic earnings per share of common stock:
Continuing operations $ 0.42 $ 0.10 $ 0.68 $ 0.28
Discontinued operations   -     0.04     0.01     0.91  
Net income per share of common stock $ 0.42   $ 0.14   $ 0.69   $ 1.19  
 
Diluted earnings per share of common stock:
Continuing operations $ 0.42 $ 0.10 $ 0.68 $ 0.28
Discontinued operations   -     0.04     0.01     0.91  
Net income per share of common stock $ 0.42   $ 0.14   $ 0.69   $ 1.19  
 
                                           
Comparative Condensed Consolidated Balance Sheets
 
ASSETS LIABILITIES & SHAREHOLDERS' EQUITY
(in thousands)           Sep. 30, 2013         Dec. 31, 2012 (in thousands)         Sep. 30, 2013         Dec. 31, 2012
(unaudited) (unaudited)
Current Assets: Current Liabilities:
Cash and equivalents (1) $ 480,181 $ 437,100 Accounts payable $ 75,035 $ 92,398
Accounts receivable 178,211 186,073 Accrued liabilities 83,359 161,514
Other current assets 80,480 96,934 Income tax payable 18,946 -
C-A of discontinued operations - 84,000 Current mat of L-T debt (1) 20,376 16,607
                        C-L of discontinued operations           -           182,527
Total Current Assets 738,872 804,107 Total Current Liabilities 197,716 453,046
 
 
 
Property & Equipment 1,501,680 1,485,875 Long-term debt (1) 548,204 1,002,621
Equity investments 161,200 167,599 Deferred tax liabilities 260,649 359,237
Goodwill 62,815 62,935 Other non-current liabilities 18,274 5,025
Other assets, net 47,339 49,837 N-C liabilities of discontinued operations - 147,237

N-C assets of discontinued operations

            -           816,227 Shareholders' equity (1)           1,487,063           1,419,414
Total Assets           $ 2,511,906         $ 3,386,580 Total Liabilities & Equity         $ 2,511,906         $ 3,386,580
 
(1)     Net debt to book capitalization - 6% at September 30, 2013. Calculated as total debt less cash and equivalents ($88,399) divided by sum of total net debt, convertible preferred stock and shareholders' equity ($1,575,462).
 
 
Helix Energy Solutions Group, Inc.
Reconciliation of Non GAAP Measures
Three and Nine Months Ended September 30, 2013
                                         
 

Earnings Release:

 

Reconciliation From Net Income from Continuing Operations to Adjusted EBITDAX:

 
 
3Q13 3Q12 2Q13 2013 2012
(in thousands)
 
Net income from continuing operations $ 45,348 $ 11,162 $ 28,029 $ 74,711 $ 32,039
Adjustments:
Income tax provision (benefit) 7,058 1,270 8,577 16,078 (1,405 )
Net interest expense and other 12,791 9,176 12,556 42,236 54,066
Depreciation and amortization 21,850 24,797 25,312 71,542 72,185
Asset impairment charges   -     4,594     -     -     19,184  
EBITDA   87,047     50,999     74,474     204,567     176,069  
Adjustments:
Noncontrolling interest (1,037 ) (1,037 ) (1,026 ) (3,078 ) (3,089 )
Loss on commodity derivative contracts - - - - -
(Gain) loss on sale of assets   (15,812 )   12,933     1,085     (14,727 )   12,933  
Adjusted EBITDA from continuing operations   70,198     62,895     74,533     186,762     185,913  
 
Adjusted EBITDAX from discontinued operations (1) (2)   -     64,539     -     31,754     301,688  
Adjusted EBITDAX $ 70,198   $ 127,434   $ 74,533   $ 218,516   $ 487,601  
 
 
(1) Amounts relate to ERT which was sold in February 2013.
(2) Reconciliation of Adjusted EBITDAX from discontinued operations:
3Q13 3Q12 2Q13 2013 2012
(in thousands)
Net income (loss) from discontinued operations $ 44 $ 4,503 $ (29 ) $ 1,073 $ 95,572
Adjustments:
Income tax provision (benefit) 24 3,697 (16 ) 579 52,125
Net interest expense and other - 6,959 - 2,732 21,209
Depreciation and amortization - 38,697 - 1,226 126,269
Exploration expenses   -     623     -     3,514     2,469  
EBITDAX   68     54,479     (45 )   9,124     297,644  
Adjustments:
Unrealized loss on commodity derivative contracts - 10,060 - - 2,330
(Gain) loss on sale of assets   (68 )   -     45     22,630     1,714  
Adjusted EBITDAX from discontinued operations $ -   $ 64,539   $ -   $ 31,754   $ 301,688  
 
We calculate adjusted EBITDA from continuing operations as earnings before net interest expense and other, taxes and depreciation
and amortization. Adjusted EBITDAX is adjusted EBITDA plus the earnings of our former oil and gas business before net interest
expense and other, taxes, depreciation and amortization and exploration expenses. 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 EBITDA and 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 September 30, 2013
         
 

Earnings Release:

 

Reconciliation of significant items:

 
 

3Q13

(in thousands, except earnings per share data)
 
Nonrecurring items in continuing operations:
Gain on sale of the Express $ (15,586 )
Loss on extinguishment of debt 8,572
Tax provision of the above   2,455  
Nonrecurring items in continuing operations, net: $ (4,559 )
 
Diluted shares   105,136  
Net after income tax effect per share $ (0.04 )
 




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