EXHIBIT 99.1
HELIX ENERGY SOLUTIONS GROUP, INC.
UNAUDITED PRO FORMA CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
The following unaudited pro forma condensed consolidated financial statements are presented to give effect to the disposition of substantially all of the Company’s investment in Cal Dive International, Inc. (“Cal Dive”). The Company, through a series of the following separate transactions, has reduced its ownership in Cal Dive from approximately 57% at December 31, 2008 to its current approximate 0.54% ownership interest.
· | The Company sold 13.6 million shares to Cal Dive for $86 million in January 2009. The Company’s ownership interest in Cal Dive was reduced to approximately 51% following this transaction; |
· | In June 2009, a secondary public offering resulted in the Company’s disposition of 22.6 million shares of its Cal Dive common stock for approximately $183 million in net proceeds; |
· | In June 2009, under the terms of a stock repurchase agreement the Company sold 1.6 million shares of its Cal Dive common stock to Cal Dive at $8.50 per share or $14 million; |
· | In September 2009, 20.6 million shares of Cal Dive common stock were sold in a secondary public offering at $10.00 per share, plus an additional approximate 2.6 million shares will be sold pursuant to the exercise of the over-allotment option, which will close on September 29, 2009, resulting in aggregate net proceeds of approximately $221 million. |
The net proceeds from the disposition of the Company's shares of Cal Dive common stock will be used for general corporate purposes. The estimated pre-tax gain on these sale transactions totals approximately $78 million, which is subject to change based on the results of Cal Dive for the month of September 2009 that are not yet available.
The unaudited pro forma condensed statement of operations for the year ended December 31, 2008 was derived from our audited consolidated statement of operations for the year ended December 31, 2008. The unaudited pro forma condensed consolidated statement of operations should be read together with the Company’s 2008 audited consolidated statement of operations and the notes thereto included in our Current Report on Form 8-K filed June 16, 2009.
The unaudited pro forma condensed consolidated balance sheet as of June 30, 2009 and the unaudited pro forma condensed consolidated statement of operations for the six months ended June 30, 2009 have been derived from our interim unaudited consolidated financial statements included in our Quarterly Report on Form 10-Q for the period ended June 30, 2009 and should be read in conjunction with those financial statements, including the notes thereto.
The unaudited pro forma condensed consolidated financial statements are based on the following assumptions and adjustments:
· | The unaudited pro forma condensed consolidated balance sheet is presented as if the September 2009 dispositions of Cal Dive common stock, including the pending closing of the shares exercised under the over-allotment option, all occurred on June 30, 2009 and |
· | The unaudited pro forma condensed consolidated statements of operations are presented as if the above dispositions of Cal Dive common stock, including the pending closing of the shares exercised under the over-allotment option, occurred on January 1, 2008. |
Pursuant to the Securities and Exchange Commission rules for pro forma financial statements, no pro forma adjustments were made with respect to any increase in assumed interest income associated with the investment of the net proceeds received from the sales of Cal Dive common stock. Separately, no pro forma adjustment was made to reflect reductions in the Company's indebtedness and related interest expense because there is no requirement under the Company's debt arrangements to use proceeds from its disposition of Cal Dive common stock to reduce such indebedness.
The unaudited pro forma condensed financial statements are presented for illustration purposes only. The financial position and results of operations may have been different if the dispositions of Cal Dive stock had occurred as of the dates indicated above and do not purport to represent the Company’s financial position or results of operations for any future date or period.
HELIX ENERGY SOLUTIONS GROUP, INC.
UNAUDITED PRO FORMA CONDENSED CONSOLIDATED BALANCE SHEET
(in thousands)
As Reported 1 | Pro Forma Adjustments | Pro Forma | |||||||||||||||||||
ASSETS | |||||||||||||||||||||
Current assets: | |||||||||||||||||||||
Cash and cash equivalents | $ | 261,930 | $ | 221,512 | 2 | $ | 483,442 | ||||||||||||||
Accounts receivable, net | 266,289 | — | 266,289 | ||||||||||||||||||
Other current assets | 123,325 | — | 123,325 | ||||||||||||||||||
Asset available for sale | — | 4,315 | 2 | 4,315 | |||||||||||||||||
Total current assets | 651,544 | 225,827 | 877,371 | ||||||||||||||||||
Property and equipment, net | 2,823,216 | — | 2,823,216 | ||||||||||||||||||
Other assets: | |||||||||||||||||||||
Equity investments | 393,405 | (200,314 | ) | 2 | 193,091 | ||||||||||||||||
Goodwill, net | 77,515 | — | 77,515 | ||||||||||||||||||
Other assets, net | 79,682 | — | 79,682 | ||||||||||||||||||
$ | 4,025,362 | $ | 25,513 | $ | 4,050,875 | ||||||||||||||||
Current liabilities: | |||||||||||||||||||||
Accounts payable | $ | 165,342 | $ | — | $ | 165,342 | |||||||||||||||
Accrued liabilities | 224,318 | 400 | 2 | 224,718 | |||||||||||||||||
Income taxes payable | 77,914 | 6,492 | 2 | 84,406 | |||||||||||||||||
Current maturities of long-term debt | 13,730 | — | 13,730 | ||||||||||||||||||
Total current liabilities | 481,304 | 6,892 | 488,196 | ||||||||||||||||||
Long-term debt | 1,348,713 | — | 1,348,713 | ||||||||||||||||||
Deferred income taxes | 513,248 | — | 513,248 | ||||||||||||||||||
Decommissioning liabilities | 181,096 | — | 181,096 | ||||||||||||||||||
Other long-term liabilities | 8,981 | — | 8,981 | ||||||||||||||||||
Total liabilities | 2,533,342 | 6,892 | 2,540,234 | ||||||||||||||||||
Convertible preferred stock | 25,000 | — | 25,000 | ||||||||||||||||||
Shareholders’ equity: | |||||||||||||||||||||
Common stock, no par value | 895,305 | 2,912 | 3 | 898,217 | |||||||||||||||||
Retained earnings | 571,609 | 15,709 | 2,3 | 587,318 | |||||||||||||||||
Accumulated other comprehensive income (loss) | (20,575 | ) | (20,575 | ) | |||||||||||||||||
Total controlling interest shareholders’ equity | 1,446,339 | 18,621 | 1,464,960 | ||||||||||||||||||
Noncontrolling interests | 20,681 | — | 20,681 | ||||||||||||||||||
Total shareholders’ equity | 1,467,020 | 18,621 | 1,485,641 | ||||||||||||||||||
$ | 4,025,362 | $ | 25,513 | $ | 4,050,875 | ||||||||||||||||
See accompanying notes to unaudited pro forma condensed consolidated financial statements.
HELIX ENERGY SOLUTIONS GROUP, INC.
UNAUDITED PRO FORMA CONDENSED CONSOLIDATED STATEMENT OF OPERATIONS
(in thousands, except per share data)
Year Ended December 31, 2008 | |||||||||||
As Reported4 | Pro Forma Adjustments5 | Pro Forma | |||||||||
Net revenues | $ | 2,114,074 | $ | (777,116 | ) | $ | 1,336,958 | ||||
Cost of sales | 1,741,883 | (528,175 | ) | 1,213,708 | |||||||
Gross profit | 372,191 | (248,941 | ) | 123,250 | |||||||
Goodwill and other indefinite-lived intangible impairments | 704,311 | — | 704,311 | ||||||||
Gain on sale of assets, net | 73,471 | (204 | ) | 73,267 | |||||||
Selling and administrative expenses | 177,172 | (74,500 | ) | 102,672 | |||||||
Income (loss) from operations | (435,821 | ) | (174,645 | ) | (610,466 | ) | |||||
Equity in earnings of investments | 31,854 | — | 31,854 | ||||||||
Net interest expense and other | 89,499 | (22,285 | ) | 67,214 | |||||||
Income (loss) before income taxes | (493,466 | ) | (152,360 | ) | (645,826 | ) | |||||
Provision (benefit) for income taxes | 86,779 | (67,067 | ) | 19,712 | |||||||
Income (loss) from continuing operations before noncontrolling interests and preferred dividends | (580,245 | ) | (85,293 | ) | (665,538 | ) | |||||
Net income (loss) attributable to noncontrolling interests | 45,873 | (45,975 | ) | (102 | ) | ||||||
Preferred stock dividends | 3,192 | — | 3,192 | ||||||||
Net loss applicable to common shareholder from continuing operations | $ | (629,310 | ) | $ | (39,318 | ) | $ | $ | (668,628 | ) | |
Loss per common share: from continuing operations: | |||||||||||
Basic | $ | (6.94 | ) | $ | (7.38 | ) | |||||
Diluted | $ | (6.94 | ) | $ | (7.38 | ) | |||||
Weighted average common shares outstanding: | |||||||||||
Basic | 90,650 | 90,650 | |||||||||
Diluted | 90,650 | 90,650 | |||||||||
See accompanying notes to unaudited pro forma condensed consolidated financial statements.
HELIX ENERGY SOLUTIONS GROUP, INC.
UNAUDITED PRO FORMA CONDENSED CONSOLIDATED STATEMENT OF OPERATIONS
(in thousands, except per share data)
Six Months Ended June 30, 2009 | ||||||||||
As Reported 6 | Pro Forma Adjustments5 | Pro Forma | ||||||||
Net revenues | $ | 1,065,614 | $ | (391,908 | ) | $ | 673,706 | |||
Cost of sales | 768,648 | (299,886 | ) | 468,762 | ||||||
Gross profit | 296,966 | (92,022 | ) | 204,944 | ||||||
Gain on oil and gas derivative commodity contracts | 78,730 | — | 78,730 | |||||||
Gain on sale of assets, net | 1,773 | — | 1,773 | |||||||
Selling and administrative expenses | 80,725 | (33,651 | ) | 47,074 | ||||||
Income (loss) from operations | 296,744 | (58,371 | ) | 238,373 | ||||||
Equity in earnings of investments | 13,767 | (896 | ) | 12,871 | ||||||
Gain on subsidiary equity transaction | 59,442 | (59,442 | ) | — | ||||||
Net interest expense and other | 29,663 | (6,642 | ) | 23,021 | ||||||
Income before income taxes | 340,290 | (112,067 | ) | 228,223 | ||||||
Provision (benefit) for income taxes | 121,728 | (43,828 | ) | 77,900 | ||||||
Income (loss) from continuing operations before noncontrolling interests and preferred dividends | 218,562 | (68,239 | ) | 150,323 | ||||||
Net income (loss) attributable to noncontrolling interests | 18,173 | (17,307 | ) | 866 | ||||||
Preferred stock dividends | 563 | — | 563 | |||||||
Preferred stock beneficial conversion charge | 53,439 | — | 53,439 | |||||||
Net income applicable to common shareholders from continuing operations | $ | 146,387 | $ | (50,932 | ) | $ | 95,455 | |||
Earnings per common share from continuing operations: | ||||||||||
Basic | $ | 1.50 | $ | 0.98 | ||||||
Diluted | $ | 1.37 | $ | 0.89 | ||||||
Weighted average common shares outstanding: | ||||||||||
Basic | 96,077 | 96,077 | ||||||||
Diluted | 106,000 | 106,000 | ||||||||
See accompanying notes to unaudited pro forma condensed consolidated financial statements.
Helix Energy Solutions Group Inc
Notes To Unaudited Pro Forma Condensed Consolidated Financial Statements
(1)- | Represents the unaudited condensed consolidated balance sheet of Helix as reported in its Quarterly Report on Form 10-Q for the period ended June 30, 2009 as filed with the Securities and Exchange Commission on August 5, 2009. No adjustment is reflected to adjust for removal of Cal Dive amounts because the Company deconsolidated Cal Dive effective June 10, 2009 as a result of its ownership in Cal Dive decreasing below 50% following the sale of approximately 24.2 million shares of the Cal Dive common stock held by the Company. |
(2)- | Represents the disposition of Cal Dive common shares in September 2009. The dispositions for January and June are included in the as reported amounts as derived from the condensed consolidated balance sheet as of June 30, 2009 as discussed in (6) above. The September dispositions are reflected as follows (amounts in thousands): |
Proceeds at closing | $ | 221,512 | ||
Less: Estimated transaction costs to be paid | (400 | ) | ||
Net proceeds from sale of Cal Dive common stock in September 2009 | $ | 221,112 |
Investment in Cal Dive at June 30, 2009 | $ | 200,314 |
Pre tax gain on sale of Cal Dive common stock in September 2009 | $ | 18,549 | ||
Income taxes at 35% | (6,492 | ) | ||
Net gain on sale of Cal Dive common stock in September 2009 | $ | 12,057 |
500,000 shares of Cal Dive common stock remaining | ||||
At June 30, 2009, Cal Dive’s stock price was $8.63 per share | $ | 4,315 |
(3)- | To reclass the loss on the disposal of Cal Dive stock in January 2009. The loss was recorded as a component of common stock because that transaction did not result in the Company losing consolidating control of Cal Dive and was not at the time part of a planned series of transactions that ultimately resulted in loss of consolidating control of Cal Dive. |
(4)- | Represents the audited consolidated results of Helix Energy Solutions Group, Inc. (“Helix or the Company”) as reported in its consolidated statement of operations contained in exhibit 99.1 of its Current Report on Form 8-K as filed with the Securities and Exchange Commission on June 16, 2009. |
(5)- | Represents the removal of the unaudited results of Cal Dive International, Inc. (“Cal Dive”) reflecting the assumed disposition of Cal Dive by the Company on January 1, 2008. Also includes reversal of the eliminations for inter-company revenues and costs for services conducted by and between the continuing Helix operations and Cal Dive. This assumes that Helix and Cal Dive are no longer affiliates as of January 1, 2008. |
(6)- | Represents the unaudited six-month 2009 consolidated results of Helix as reported in its condensed consolidated statement of operations contained in its Quarterly Report on Form 10-Q for the period ended June 30, 2009 as filed with the Securities and Exchange Commission on August 5, 2009. |