UNITED
STATES
SECURITIES
AND EXCHANGE COMMISSION
Washington,
D.C. 20549
Form
8-K
CURRENT
REPORT
Pursuant
to Section 13 or 15(d) of the Securities Exchange Act of 1934
Date
of Report (Date of
earliest event reported): July
1, 2009
Helix
Energy Solutions Group, Inc.
(Exact
name of registrant as specified in its charter)
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Minnesota
(State
or other jurisdiction
of
incorporation)
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001-32936
(Commission
File Number)
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95-3409686
(IRS
Employer Identification No.)
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400
N. Sam Houston Parkway E., Suite 400
Houston,
Texas
(Address
of principal executive offices)
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281-618-0400
(Registrant’s
telephone number, including area code)
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77060
(Zip
Code)
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Check the
appropriate box below if the Form 8-K filing is intended to simultaneously
satisfy the filing obligation of the registrant under any of the following
provisions (see General Instruction A.2. below):
|_|
Written communications pursuant to Rule 425 under the Securities Act (17 CFR
230.425)
|_|
Soliciting material pursuant to Rule 14a-12 under the Exchange Act (17 CFR
240.14a-12)
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Pre-commencement communications pursuant to Rule 14d-2(b) under the Exchange Act
(17 CFR 240.14d-2(b))
|_|
Pre-commencement communications pursuant to Rule 13e-4(c) under the Exchange Act
(17 CFR 240.13e-4(c))
Item
7.01 Regulation FD Disclosure.
On July 1, 2009, Helix
Energy Solutions Group, Inc. (“Helix”) issued a press release announcing that
representatives of Helix will make a presentation on July 8, 2009 at the Morgan
Stanly Energy Conference in New York, New York. The press release is
attached hereto as Exhibit 99.1 and incorporated by reference
herein. The presentation materials to be delivered at the conference
are attached hereto as Exhibit 99.2 and incorporated by reference herein. The
presentation materials will also be posted beginning on July 7, 2009 in the
Presentations
section under Investor
Relations of Helix’s website, www.helixesg.com.
This
information is not deemed to be “filed” for the purposes of Section 18 of the
Securities Exchange Act of 1934, as amended (“Exchange Act”), or otherwise
subject to the liabilities of that section, and such information is not
incorporated by reference into any registration statements or other document
filed under the Securities Act of 1933, as amended (“Securities Act”), or the
Exchange Act, regardless of the general incorporation language contained in such
filing, except as shall be expressly set forth by specific reference to this
filing.
Forward-Looking
Statements and Assumptions
This
current report on Form 8-K includes forward-looking statements that contain
forward-looking information regarding Helix and represent our expectations and
beliefs concerning future events. This forward looking
information is intended to be covered by the safe harbor for “forward-looking
statements” provided by the Private Securities Litigation Reform Act of 1995 as
set forth in Section 27A of the Securities Act of 1933, as amended, and
Section 21E of the Securities Exchange Act of 1934, as amended (the
“Exchange Act”). All statements, included herein or incorporated
herein by reference, that are predictive in nature, that depend upon or refer to
future events or conditions, or that use terms and phrases such as “achieve,”
“anticipate,” “believe,” “estimate,” “expect,” “forecast,” “plan,” “project,”
“propose,” “strategy,” “predict,” “envision,” “hope,” “intend,” “will,”
“continue,” “may,” “potential,” “achieve,” “should,” “could” and similar terms
and phrases are forward-looking statements. Included in forward-looking
statements are, among other things:
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•
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statements
regarding our business strategy, including the potential sale of assets
and/or other investments in our subsidiaries and facilities, or any other
business plans, forecasts or objectives, any or all of which is subject to
change;
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•
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statements
regarding our anticipated production volumes, results of exploration,
exploitation, development, acquisition or operations
expenditures, and current or prospective reserve levels with respect to
any property or well;
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•
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statements
related to commodity prices for oil and gas or with respect to the supply
of and demand for oil and gas;
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•
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statements
relating to our proposed acquisition, exploration, development and/or
production of oil and gas properties, prospects or other interests and any
anticipated costs related thereto;
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•
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statements
related to environmental risks, exploration and development risks, or
drilling and operating risks;
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•
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statements
relating to the construction or acquisition of vessels or equipment and
any anticipated costs related
thereto;
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•
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statements
that our proposed vessels, when completed, will have certain
characteristics or the effectiveness of such
characteristics;
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•
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statements
regarding projections of revenues, gross margin, expenses, earnings or
losses, working capital or other financial
items;
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•
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statements
regarding any financing transactions or arrangements, or ability to enter
into such transactions;
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statements
regarding any SEC or other governmental or regulatory inquiry or
investigation;
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•
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statements
regarding anticipated legislative, governmental, regulatory,
administrative or other public body actions, requirements, permits or
decisions;
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statements
regarding anticipated developments, industry trends, performance or
industry ranking;
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statements
regarding general economic or political conditions, whether international,
national or in the regional and local market areas in which we do
business;
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statements
related to our ability to retain key members of our senior management and
key employees;
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statements
related to the underlying assumptions related to any projection or
forward-looking statement; and
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any
other statements that relate to non-historical or future
information.
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Although
we believe that the expectations reflected in these forward-looking statements
are reasonable and are based on reasonable assumptions, they do involve risks,
uncertainties and other factors that could cause actual results to be materially
different from those in the forward-looking statements. These factors
include, among other things:
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•
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Impact
of the weak economic conditions and the future impact of such conditions
on the oil and gas industry and the demand for our
services;
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uncertainties
inherent in the development and production of oil and gas and in
estimating reserves;
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•
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the
geographic concentration of our oil and gas operations;
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uncertainties
regarding our ability to replace depletion;
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unexpected
future capital expenditures (including the amount and nature
thereof);
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impact
of oil and gas price fluctuations and the cyclical nature of the oil and
gas industry;
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•
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the
effects of indebtedness, which could adversely restrict our ability to
operate, could make us vulnerable to general adverse economic and industry
conditions, could place us at a competitive disadvantage compared to our
competitors that have less debt and could have other adverse consequences
to us;
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•
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the
effectiveness of our derivative activities;
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the
results of our continuing efforts to control or reduce costs, and improve
performance;
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the
success of our risk management activities;
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the
effects of competition;
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the
availability (or lack thereof) of capital (including any financing) to
fund our business strategy and/or operations and the terms of any such
financing;
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the
impact of current and future laws and governmental regulations including
tax and accounting developments;
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the
effect of adverse weather conditions or other risks associated with marine
operations;
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the
effect of environmental liabilities that are not covered by an effective
indemnity or insurance;
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the
potential impact of a loss of one or more key employees;
and
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the
impact of general economic, market, industry or business
conditions.
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You should not put undue
reliance on any forward-looking statements. When considering forward-looking
statements, please review the risk factors described under “Risk Factors” in
Item 1A of our annual reports on Form 10-K, and any updates to those risk
factors included in our quarterly reports on Form 10-Q. All
forward-looking statements attributable to us or persons acting on our behalf
are expressly qualified in their entirety by these risk factors. Forward-looking
statements are only as of the date they are made and, other than as required
under the securities laws, we assume no obligation to update or revise these
forward-looking statements or provide reasons why actual results may
differ.
Reconciliation
of Non-GAAP Financial Measures
In
addition to net income, we evaluate our financial performance based on other
factors, one primary measure of which is earnings before net interest, expenses,
taxes, depreciation, amortization and exploration expenses (adjusted
EBITDAX). We calculate adjusted EBITDAX as earnings before net
interest expense, taxes, depreciation and amortization and exploration expense.
Further, we reduce adjusted EBITDAX for the minority interest in Cal Dive that
we do not own. 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.
The
Reconciliation of Non-GAAP Measures related to the presentation materials to be
delivered at the conference are attached hereto as Exhibit 99.3 and incorporated
by reference herein. The Reconciliation of Non-GAAP Measures will also be posted
in the Investor Relations section of Helix’s website,
www.helixesg.com.
Item
9.01 Financial Statements and Exhibits.
(c) Exhibits.
Number Description
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99.1
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Press
release announcing Helix’s participation in the Morgan Stanley Energy
Conference.
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99.2
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Morgan
Stanly Energy
Conference
Presentation.
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99.3
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Reconciliation
of Non-GAAP Measures.
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SIGNATURES
Pursuant
to the requirements of the Securities Exchange Act of 1934, the Registrant has
duly caused this report to be signed on its behalf by the undersigned hereunto
duly authorized.
Date: July
6, 2009
HELIX ENERGY SOLUTIONS
GROUP, INC.
By:
/s/ Anthony
Tripodo
Anthony
Tripodo
Executive
Vice President and
Chief
Financial Officer
Index
to Exhibits
Exhibit
No. Description
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99.1
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Press
release announcing Helix’s participation in the Morgan Stanley Energy
Conference.
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99.2
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Morgan
Stanley Energy Conference
Presentation
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99.3
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Reconciliation
of Non-GAAP Measures.
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PRESSRELEASE
www.HelixESG.com
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Helix
Energy Solutions Group, Inc. · 400 N. Sam
Houston Parkway E., Suite 400 · Houston,
TX 77060-3500 ·
281-618-0400 · fax:
281-618-0505
For Immediate
Release 09-015
exhibit99-2.htm
exhibit99-3.htm
Contact: Tony
Tripodo
Date: July
1,
2009 Title: Chief
Financial Officer
Helix to Present at Morgan Stanley
Energy Conference
HOUSTON,
TX – Helix Energy Solutions (NYSE: HLX) announced today that it will present on
Wednesday, July 8, 2009 at the Morgan Stanley Energy Conference in New York, New
York.
The
presentation is scheduled to begin at 3:00pm Eastern Time. The slides
related to such presentation will be available the morning of July 7 on the
Helix website, www.HelixESG.com,
by first clicking “Investor Relations” and then “Presentations”.
The
presentation will provide an update regarding Helix’s improved liquidity and
indebtedness levels based on developments since March 31, 2009, as well as
updated information on capital spending plans.
Helix
Energy Solutions, headquartered in Houston, Texas, is an international offshore
energy company that provides development solutions and other key life of field
services to the open energy market as well as to our own oil and gas business
unit. That business unit is a prospect generation, exploration,
development and production company. Employing our own key services
and methodologies, we seek to lower finding and development costs, relative to
industry norms.
1
Morgan
Stanley
Energy Conference
Energy Conference
July
8, 2009
2
This
presentation contains forward-looking statements within the meaning of Section
27A of the Securities Act of
1933 and Section 21E of the Securities Exchange Act of 1934. All such statements, other than statements of
historical fact, are statements that could be deemed “forward-looking statements” within the meaning of the Private
Securities Litigation Reform Act of 1995, including, without limitation, any projections of revenue, gross margin,
expenses, earnings or losses from operations, or other 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
statements concerning developments, performance or industry rankings; and any statements of assumptions
underlying any of the foregoing. Although we believe that the expectations set forth in these forward-looking
statements are reasonable, they do involve risks, uncertainties and assumptions that could cause our results to differ
materially from those expressed or implied by such forward-looking statements. The risks, uncertainties and
assumptions referred to above include the performance of contracts by suppliers, customers and partners; employee
management issues; complexities of global political and economic developments; geologic risks and other risks
described from time to time in our reports filed with the Securities and Exchange Commission (“SEC”), including the
Company’s Annual Report on Form 10-K for the year ended December 31, 2008 and subsequent quarterly reports
on Form 10-Q. You should not place undue reliance on these forward-looking statements which speak only as of the
date of this presentation and the associated press release. We assume no obligation or duty and do not intend to
update these forward-looking statements except as required by the securities laws.
1933 and Section 21E of the Securities Exchange Act of 1934. All such statements, other than statements of
historical fact, are statements that could be deemed “forward-looking statements” within the meaning of the Private
Securities Litigation Reform Act of 1995, including, without limitation, any projections of revenue, gross margin,
expenses, earnings or losses from operations, or other 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
statements concerning developments, performance or industry rankings; and any statements of assumptions
underlying any of the foregoing. Although we believe that the expectations set forth in these forward-looking
statements are reasonable, they do involve risks, uncertainties and assumptions that could cause our results to differ
materially from those expressed or implied by such forward-looking statements. The risks, uncertainties and
assumptions referred to above include the performance of contracts by suppliers, customers and partners; employee
management issues; complexities of global political and economic developments; geologic risks and other risks
described from time to time in our reports filed with the Securities and Exchange Commission (“SEC”), including the
Company’s Annual Report on Form 10-K for the year ended December 31, 2008 and subsequent quarterly reports
on Form 10-Q. You should not place undue reliance on these forward-looking statements which speak only as of the
date of this presentation and the associated press release. We assume no obligation or duty and do not intend to
update these forward-looking statements except as required by the securities laws.
The
United States Securities and Exchange Commission permits oil and gas companies,
in their filings with the SEC,
to disclose only proved reserves that a company has demonstrated by actual production or conclusive formation
tests to be economically and legally producible under existing economic and operating conditions. Statements of
proved reserves are only estimates and may be imprecise. Any reserve estimates provided in this presentation that
are not specifically designated as being estimates of proved reserves may include not only proved reserves but also
other categories of reserves that the SEC’s guidelines strictly prohibit the Company from including in filings with the
SEC. Investors are urged to consider closely the disclosure in the Company’s 2008 Form 10-K.
to disclose only proved reserves that a company has demonstrated by actual production or conclusive formation
tests to be economically and legally producible under existing economic and operating conditions. Statements of
proved reserves are only estimates and may be imprecise. Any reserve estimates provided in this presentation that
are not specifically designated as being estimates of proved reserves may include not only proved reserves but also
other categories of reserves that the SEC’s guidelines strictly prohibit the Company from including in filings with the
SEC. Investors are urged to consider closely the disclosure in the Company’s 2008 Form 10-K.
Forward-Looking
Statements
3
Helix
Profile
4
The
Helix Mission
Helix
Energy Solutions Group provides life-of-field services and
development
solutions to offshore energy producers worldwide. Helix actively reduces
finding and development costs through a unique mix of offshore production
assets, service methodologies, and highly skilled personnel.
solutions to offshore energy producers worldwide. Helix actively reduces
finding and development costs through a unique mix of offshore production
assets, service methodologies, and highly skilled personnel.
5
Deepwater
Well Intervention
Well Intervention
Q4000
Seawell
Well Enhancer
(2009)
Mobile
SILs
Helix
Oil & Gas / ERT
GOM shelf and
deepwater
PV-10 $1.9
billion @
12/31/2008
12/31/2008
Proved
reserves = 665 bcfe
(12/31/2008)
(12/31/2008)
2009
projected production
45 - 55 bcfe
45 - 55 bcfe
Helix
Business Segments
6
The
Helix Fleet
7
MSV
DP2 Well
Enhancer
Well
Intervention Fleet
MSV
DP2 Seawell
Helix
provides well operation and decommissioning services with the
Q4000 and Seawell well intervention vessels, with the Well Enhancer joining
the fleet in 2009.
Q4000 and Seawell well intervention vessels, with the Well Enhancer joining
the fleet in 2009.
8
DP
Reel Lay Vessel
Express
Express
DP
S-Lay Vessel
Caesar (Q4 2009)
Caesar (Q4 2009)
Subsea
Construction Vessels
DP
Reel Lay Vessel
Intrepid
Intrepid
Caesar’s onboard
pipe welding and testing
capability allows the vessel to lay pipeline with out
the need for a spoolbase.
capability allows the vessel to lay pipeline with out
the need for a spoolbase.
Helix’s
pipelay and subsea construction vessel has
established an extensive track record of field
installation projects around the world.
established an extensive track record of field
installation projects around the world.
Intrepid has the
flexibility to be deployed as a
pipelay, installation or saturation diving vessel.
pipelay, installation or saturation diving vessel.
9
Helix
ROV Systems
Helix
is an industry leading provider of ROV and subsea trenching
services to deepwater operators worldwide.
services to deepwater operators worldwide.
The
Helix ROV fleet
consists of 39 vehicles,
covering the spectrum of
deepwater construction
services.
consists of 39 vehicles,
covering the spectrum of
deepwater construction
services.
The 600
hp Supertrencher II
system is designed to
operate at water depths in
excess of 6,500 feet.
system is designed to
operate at water depths in
excess of 6,500 feet.
The
I-Trencher system can be
used in various jetting and
cutting operating modes, in
shallow and deepwater.
used in various jetting and
cutting operating modes, in
shallow and deepwater.
10
Island
Pioneer
Olympic
Triton
Olympic
Canyon
Seacor
Canyon
Northern
Canyon
ROV
/ Construction Support Vessel Fleet
Chartered
support vessels allows Helix to adjust the size and
capability of its fleet to cost-effectively meet industry demands.
capability of its fleet to cost-effectively meet industry demands.
REM
Forza
11
Helix
Producer I
Helix
Producer I
is a floating production facility designed to serve small
deepwater fields over the life of the property, such as Helix’s Phoenix
field in the Gulf of Mexico. The dynamically-positioned vessel can
produce up to a maximum of 45,000 BOPD and 72 MMCFD via a
disconnectable transfer buoy system.
deepwater fields over the life of the property, such as Helix’s Phoenix
field in the Gulf of Mexico. The dynamically-positioned vessel can
produce up to a maximum of 45,000 BOPD and 72 MMCFD via a
disconnectable transfer buoy system.
12
Helix
Oil
& Gas
13
Producing
Field
Non
Producing Field
Prospect
Gunnison
Bushwood
Phoenix
ERT
Deepwater Portfolio
Interests in 44
Deepwater Blocks -12 Developed, 32 Undeveloped
2.7 Net
TCFE Un-Risked Reserve Potential, 1.0 TCFE Risked
Internal Prospect
Generation via Large, In-House 3-D Seismic Library Large,
Recent Long Offset 3-D Seismic Database,+1,500 Blocks
Recent Long Offset 3-D Seismic Database,+1,500 Blocks
Experienced
Exploration/Drilling/Operations Team - 25+ years avg.
14
O&G
- - 2008 Reserve Report Highlights
15
O&G
- - 2009 Deepwater Capital Projects
Phoenix
Field
16
17
• Good Contracting
Services visibility in 1H 2009
• 2009 backlog of
$360 million
• Expect 2H 2009 to
soften
• Capital expenditures
of approximately $360 million
• $200 million
relates to completion of three major
vessel projects (Well Enhancer, Caesar and Helix
Producer I)
vessel projects (Well Enhancer, Caesar and Helix
Producer I)
• $60 million relates
to development of Danny
and Phoenix oil fields
and Phoenix oil fields
• Most of remaining
CAPEX is maintenance
• Significant
improvement in liquidity and debt levels
(see slide 20)
(see slide 20)
2009
Outlook
18
2009
Outlook (continued)
19
2010
Preview
20
Liquidity
and
Capital
Resources
Capital
Resources
21
Significant
Balance Sheet Improvements
*
estimated
Debt
Liquidity
22
• Company is focused
on efforts to monetize non-core assets and businesses
• Oil and gas
assets
• Bass Lite sale
December 08 & January 09 ($49 million)
• EC 316 sale in
February 09 ($18 million)
• Production
facilities
• Cal Dive
(approximate 26% owned subsidiary)
• Sold 15.2 million
shares of CDI common stock to Cal Dive for proceeds
of $100 million in January and June 2009
of $100 million in January and June 2009
• Sold 22.6 million
CDI shares in secondary offering for proceeds of
≈ $182 million in June 2009
≈ $182 million in June 2009
• Sold Helix RDS in
April 2009 for $25 million
• Approximately 80% of
total 2009 oil and gas production hedged
Liquidity
and Capital Resources
Monetization
of some or all remaining non-core assets would further
accelerate debt reduction and increase liquidity
accelerate debt reduction and increase liquidity
23
Company
is in compliance as of 3/31/2009, and forecasts
continuing compliance throughout 2009
continuing compliance throughout 2009
Liquidity
and Capital Resources
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Covenant
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Test
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Explanation
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Collateral
Coverage Ratio
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> 1.75 :
1
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Basket of
collateral to Senior Secured Debt
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Fixed Charge
Coverage Ratio
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> 2.75 :
1
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Consolidated
EBITDA (incl. Cal Dive %) to
consolidated interest charges |
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Consolidated
Leverage Ratio
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< 3.5 :
1
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Consolidated
EBITDA (incl. Cal Dive %) to
consolidated debt |
Key
Credit Facility Covenants
24
Liquidity
and Capital Resources
Credit
Facilities, Commitments and Amortization
– $420
Million Revolving Credit Facility - committed
facility through June 2011. No
required amortization. Fully paid down as of 6/30/2009.
required amortization. Fully paid down as of 6/30/2009.
– $418
Million Term Loan B - committed
facility through June 2013. $4.3
million
amortization annually.
amortization annually.
– $550
Million High Yield Notes - Interest only
until maturity (2016) or called by Helix.
First Helix call date is 2012.
First Helix call date is 2012.
– $300
Million Convertible Notes - Interest only
until put by noteholders or called by
Helix. First put/call date is 2012, although noteholders have the right to convert prior
to that date if certain stock price triggers are met ($38.56).
Helix. First put/call date is 2012, although noteholders have the right to convert prior
to that date if certain stock price triggers are met ($38.56).
– $121
Million MARAD - Original 25 year
term; matures February 2027. $4.3
million
principal payments annually.
principal payments annually.
25
26
Consistent
Top Line Growth
($
amounts in millions)
$2,148
$1,767
$1,367
$799
$543
$303
$227
$181
$396
Note:
Includes Cal Dive
27
Earnings
Per Share
$1.03
$2.68
$2.85
$3.05
$1.86
*See
Non-GAAP reconciliation at www.HelixESG.com
28
Significant
Cash Generation - EBITDAX*
*See Non-GAAP
reconciliation at www.HelixESG.com
($
amounts in millions)
$212
$279
$452
$655
$662
29
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EXHIBIT
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99.3
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|||||||
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Helix Energy
Solutions Group, Inc.
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||||||||
|
Reconciliation of
Non GAAP Measures
|
||||||||
|
Morgan Stanley
Energy Conference
|
||||||||
|
July 8,
2009
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||||||||
| Slide 21 (Significant Balance Sheet Improvements): | ||||||||
| Net Debt Reconciliation: | ||||||||
|
12/31/2007
|
6/30/2008 | 12/31/2008 | 6/30/2009 | |||||
| (in millions) | ||||||||
| Gross Debt* | $ 1,758 | $ 1,822 | $ 2,027 | $ 1,365 | ||||
| Cash on Hand | 90 | 23 | 224 | 200 | ||||
| Net Debt | $ 1,668 | $ 1,799 | $ 1,803 | $ 1,165 | ||||
| *Reflects impact of retrospective adoption of accounting standard which required bifurcation of Helix's convertible senior notes | ||||||||
| Impact on December 31, 2007, June 30, 2008, December 31, 2008, and June 30, 2009 was | ||||||||
| a reduction in debt totaling $42.2 million, $38.6 million, $34.8 million and $30.9 million, respectively. | ||||||||
| Slide 27 (Earnings per Share): | ||||||||
| Reconciliation to Normalized EPS: | ||||||||
|
2004
|
2005
|
2006 | 2007 |
2008
|
||||
| (in thousands) | ||||||||
| Net income applicable to common shareholders | $ 79,916 | $ 150,114 | $ 344,036 | $ 316,762 | $ (634,040) | |||
| Preferred stock dividends and accretion | 2,743 | 2,454 | 3,358 | 3,716 | - | |||
| Cal Dive gain (IPO and Horizon acquisition) | - | - | (96,531) | (98,602) | - | |||
| Goodwill and other intangible impairments | - | - | - | - | 714,988 | |||
| Other non-recurring items | - | - | 5,300 | 70,189 | 161,591 | |||
| Net income, excluding non-cash gains on Cal Dive equity transactions | $ 82,659 | $ 152,568 | $ 256,163 | $ 292,065 | $ 242,539 | |||
| (IPO and Horizon acquisition) and other unusual items | ||||||||
| Diluted Shares | 79,062 | 82,205 | 89,874 | 95,938 | 90,650 | |||
| Normalized EPS* | $ 1.03 | $ 1.86 | $ 2.85 | $ 3.05 | $ 2.68 | |||
| *Excludes impact of adoption of new accounting standard (EITF 03-06-1) effective January 1, 2009. | ||||||||
| Slide 28 (Significant Cash Generation - EBITDAX): | ||||||||
| Reconciliation From Net Income to Adjusted EBITDAX (Excluding Cal Dive): | ||||||||
|
2004
|
2005 | 2006 | 2007 | 2008 | ||||
| (in millions) | ||||||||
| Net (loss) income applicable to common shareholders | $ 80 | $ 147 | $ 340 | $ 312 | $ (639) | |||
| Non-cash impairment and other unusual items | - | 1 | (91) | (26) | 931 | |||
| Preferred stock dividends | 3 | 2 | 3 | 4 | 3 | |||
| Income tax provision | 43 | 73 | 131 | 103 | 67 | |||
| Net interest expense and other | 5 | 13 | 41 | 64 | 101 | |||
| Depreciation and amortization | 108 | 111 | 193 | 320 | 306 | |||
| Exploration expense | - | 6 | 43 | 27 | 33 | |||
| EBITDAX as Reported | $ 239 | $ 353 | $ 660 | $ 804 | $ 802 | |||
| Less: Previously Reported Contribution from Cal Dive | $ (27) | $ (74) | $ (208) | $ (149) | $ (140) | |||
| Adjusted EBITDAX | $ 212 | $ 279 | $ 452 | $ 655 | $ 662 | |||
| We calculate adjusted EBITDAX as earnings before net interest expense, 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 EBITDAX should not be considered in isolation or as a substitute for, but instead is supplemental to, | ||||||||
| 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. | ||||||||