Document And Entity Information - shares	9 Months Ended
Document And Entity Information - shares	Sep. 30, 2018	Oct. 19, 2018
Document And Entity Information [Abstract]
Document Type	10-Q
Amendment Flag	false
Entity Emerging Growth Company	false
Entity Small Business	false
Document Period End Date	Sep. 30, 2018
Document Fiscal Period Focus	Q3
Document Fiscal Year Focus	2018
Trading Symbol	HLX
Entity Registrant Name	HELIX ENERGY SOLUTIONS GROUP INC
Entity Central Index Key	0000866829
Current Fiscal Year End Date	--12-31
Entity Filer Category	Large Accelerated Filer
Entity Common Stock, Shares Outstanding		148,152,672

Condensed Consolidated Balance Sheets - USD ($) $ in Thousands	Sep. 30, 2018	Dec. 31, 2017
Current assets:
Cash and cash equivalents	$ 325,092	$ 266,592
Accounts receivable:
Trade, net of allowance for uncollectible accounts of $2,752	91,001	113,336
Unbilled and other	66,396	29,947
Other current assets	47,450	41,768
Total current assets	529,939	451,643
Property and equipment	2,727,760	2,695,772
Less accumulated depreciation	(956,209)	(889,783)
Property and equipment, net	1,771,551	1,805,989
Other assets, net	76,985	105,205
Total assets	2,378,475	2,362,837
Current liabilities:
Accounts payable	62,844	81,299
Accrued liabilities	84,431	71,680
Income tax payable	5,859	2,799
Current maturities of long-term debt	46,784	109,861
Total current liabilities	199,918	265,639
Long-term debt	401,265	385,766
Deferred tax liabilities	102,742	103,349
Other non-current liabilities	42,382	40,690
Total liabilities	746,307	795,444
Shareholders’ equity:
Common stock, no par, 240,000 shares authorized, 148,147 and 147,740 shares issued, respectively	1,306,703	1,284,274
Retained earnings	396,781	352,906
Accumulated other comprehensive loss	(71,316)	(69,787)
Total shareholders’ equity	1,632,168	1,567,393
Total liabilities and shareholders’ equity	$ 2,378,475	$ 2,362,837

Condensed Consolidated Balance Sheets (Parenthetical) - USD ($) $ in Thousands	Sep. 30, 2018	Dec. 31, 2017
Current assets:
Allowance for uncollectible accounts	$ 2,752	$ 2,752
Shareholders’ equity:
Common stock, shares authorized	240,000,000	240,000,000
Common stock, shares issued	148,147,000	147,740,000

Condensed Consolidated Statements Of Operations (Unaudited) - USD ($) shares in Thousands, $ in Thousands	3 Months Ended		9 Months Ended
	Sep. 30, 2018	Sep. 30, 2017	Sep. 30, 2018	Sep. 30, 2017
Income Statement [Abstract]
Net revenues	$ 212,575	$ 163,260	$ 581,462	$ 418,117
Cost of sales	160,582	142,119	473,589	379,434
Gross profit	51,993	21,141	107,873	38,683
Gain (loss) on disposition of assets, net	146	0	146	(39)
Selling, general and administrative expenses	(20,762)	(16,374)	(52,986)	(46,532)
Income (loss) from operations	31,377	4,767	55,033	(7,888)
Equity in losses of investment	(107)	(153)	(378)	(457)
Net interest expense	(3,249)	(3,615)	(10,744)	(15,480)
Loss on extinguishment of long-term debt	(2)	0	(1,183)	(397)
Other expense, net	(709)	(551)	(3,225)	(619)
Other income – oil and gas	652	303	4,068	3,196
Income (loss) before income taxes	27,962	751	43,571	(21,645)
Income tax provision (benefit)	841	(1,539)	1,226	(1,117)
Net income (loss)	$ 27,121	$ 2,290	$ 42,345	$ (20,528)
Earnings (loss) per share of common stock (in dollars per share)
Basic	$ 0.18	$ 0.02	$ 0.29	$ (0.14)
Diluted	$ 0.18	$ 0.02	$ 0.29	$ (0.14)
Weighted average common shares outstanding (in shares)
Basic	146,700	145,958	146,679	145,057
Diluted	146,964	145,958	146,761	145,057

Condensed Consolidated Statements Of Comprehensive Income (Loss) (Unaudited) - USD ($) $ in Thousands	3 Months Ended		9 Months Ended
	Sep. 30, 2018	Sep. 30, 2017	Sep. 30, 2018	Sep. 30, 2017
Statement of Comprehensive Income [Abstract]
Net income (loss)	$ 27,121	$ 2,290	$ 42,345	$ (20,528)
Other comprehensive income (loss), net of tax:
Net unrealized gain (loss) on hedges arising during the period	(88)	2,297	839	4,141
Reclassifications to net income (loss)	1,799	3,383	5,233	10,822
Income taxes on hedges	(357)	(1,992)	(1,298)	(5,256)
Net change in hedges, net of tax	1,354	3,688	4,774	9,707
Unrealized loss on note receivable arising during the period			(629)	0
Income taxes on note receivable			132	0
Unrealized loss on note receivable, net of tax			(497)	0
Foreign currency translation gain (loss)	(1,421)	5,513	(4,277)	14,905
Other comprehensive income (loss), net of tax	(67)	9,201	0	24,612
Comprehensive income	$ 27,054	$ 11,491	$ 42,345	$ 4,084

Condensed Consolidated Statements Of Cash Flows (Unaudited) - USD ($) $ in Thousands	9 Months Ended
	Sep. 30, 2018	Sep. 30, 2017
Cash flows from operating activities:
Net income (loss)	$ 42,345	$ (20,528)
Adjustments to reconcile net income (loss) to net cash provided by operating activities:
Depreciation and amortization	83,339	82,670
Amortization of debt discount	4,238	3,487
Amortization of debt issuance costs	2,703	5,238
Share-based compensation	7,569	7,613
Deferred income taxes	(5,716)	(3,019)
Equity in losses of investment	378	457
(Gain) loss on disposition of assets, net	(146)	39
Loss on extinguishment of long-term debt	1,183	397
Unrealized gain on derivative contracts, net	(2,289)	(4,291)
Changes in operating assets and liabilities:
Accounts receivable, net	(15,769)	(21,709)
Other current assets	(5,662)	(12,145)
Income tax payable	2,963	2,742
Accounts payable and accrued liabilities	6,968	30,675
Other non-current, net	28,723	(40,303)
Net cash provided by operating activities	150,827	31,323
Cash flows from investing activities:
Capital expenditures	(55,431)	(131,428)
Proceeds from sale of assets	25	10,000
Net cash used in investing activities	(55,406)	(121,428)
Cash flows from financing activities:
Issuance of Convertible Senior Notes due 2023	125,000	0
Repurchase of Convertible Senior Notes due 2032	(60,365)	0
Proceeds from term loan	0	100,000
Repayment of term loan	(62,872)	(193,508)
Repayment of Nordea Q5000 Loan	(26,786)	(26,786)
Repayment of MARAD Debt	(6,532)	(6,222)
Debt issuance costs	(3,867)	(3,694)
Net proceeds from issuance of common stock	0	219,504
Payments related to tax withholding for share-based compensation	(1,058)	(1,306)
Proceeds from issuance of ESPP shares	506	432
Net cash provided by (used in) financing activities	(35,974)	88,420
Effect of exchange rate changes on cash and cash equivalents	(947)	1,927
Net increase in cash and cash equivalents	58,500	242
Cash and cash equivalents:
Balance, beginning of year	266,592	356,647
Balance, end of period	$ 325,092	$ 356,889

Basis Of Presentation And New Accounting Standards

9 Months Ended

Sep. 30, 2018

Organization, Consolidation and Presentation of Financial Statements [Abstract]

Basis Of Presentation And New Accounting Standards

Basis of Presentation and New Accounting Standards

The accompanying condensed consolidated financial statements include the accounts of Helix Energy Solutions Group, Inc. and its subsidiaries (collectively, “Helix” or the “Company”). Unless the context indicates otherwise, the terms “we,” “us” and “our” in this report refer collectively to Helix and its subsidiaries. All material intercompany accounts and transactions have been eliminated. These unaudited condensed consolidated financial statements have been prepared pursuant to instructions for the Quarterly Report on Form 10-Q required to be filed with the Securities and Exchange Commission (the “SEC”) and do not include all information and footnotes normally included in annual financial statements prepared in accordance with U.S. generally accepted accounting principles (“GAAP”).

The accompanying condensed consolidated financial statements have been prepared in conformity with GAAP in U.S. dollars and are consistent in all material respects with those applied in our 2017 Annual Report on Form 10-K (“2017 Form 10-K”). The preparation of these financial statements requires us to make estimates and judgments that affect the amounts reported in the financial statements and the related disclosures. Actual results may differ from our estimates. We have made all adjustments (which were normal recurring adjustments) that we believe are necessary for a fair presentation of the condensed consolidated balance sheets, statements of operations, statements of comprehensive income (loss), and statements of cash flows, as applicable. The operating results for the three- and nine-month periods ended September 30, 2018 are not necessarily indicative of the results that may be expected for the year ending December 31, 2018. Our balance sheet as of December 31, 2017 included herein has been derived from the audited balance sheet as of December 31, 2017 included in our 2017 Form 10-K. These unaudited condensed consolidated financial statements should be read in conjunction with the annual audited consolidated financial statements and notes thereto included in our 2017 Form 10-K.

Certain reclassifications were made to previously reported amounts in the consolidated financial statements and notes thereto to make them consistent with the current presentation format.

New accounting standards adopted

In May 2014, the Financial Accounting Standards Board (the “FASB”) issued Accounting Standards Update (“ASU”) No. 2014-09, “Revenue from Contracts with Customers (Topic 606)” (“ASC 606”). The FASB also issued several subsequent updates to promote more consistent interpretation and application of the principles outlined in the standard. ASC 606 provides a five-step approach to account for revenue arising from contracts with customers in order for an entity to recognize revenue in a way that depicts the transfer of promised goods or services to customers in an amount that reflects the consideration to which the entity expects to be entitled in exchange for those goods or services.

We adopted ASC 606 effective January 1, 2018 using the modified retrospective method by applying the five-step model to all contracts that were not completed as of the date of adoption. For contracts that were modified before the date of adoption, we have considered the modification guidance within the new standard and determined that the revenues recognized prior to adoption for such modified contracts were not impacted. We did not record any cumulative effect adjustment to the opening balance of our retained earnings as of January 1, 2018 as the adoption of ASC 606 had an insignificant impact on our prior year earnings. On our consolidated balance sheet, contract assets that were previously presented as “Other accounts receivable” are now a component of “Other current assets.” The comparative information has not been restated and continues to be reported under the accounting standards in effect for those periods. ASC 606 requires additional disclosures with regard to the nature, amount, timing and uncertainty of revenue and cash flows arising from contracts with customers. We do not expect the adoption of this guidance to have a material impact on the measurement or recognition of our revenues on an ongoing basis. The impact of ASC 606 for the three- and nine-month periods ended September 30, 2018, which primarily relates to the acceleration of lump sum demobilization fees (Note 9), was as follows (in thousands):



	September 30, 2018
	As Reported		Pro Forma Without Adoption of ASC 606		Effect of Change
Balance Sheet
Assets
Unbilled and other	$	66,396	$	67,263	$	(867	)
Other current assets	47,450		46,104		1,346
Liabilities
Accrued liabilities	84,431		84,705		(274		)
Deferred tax liabilities	102,742		102,584		158
Equity
Retained earnings	396,781		396,186		595



	Three Months Ended September 30, 2018							Nine Months Ended September 30, 2018
	As Reported		Pro Forma Without Adoption of ASC 606		Effect of Change			As Reported		Pro Forma Without Adoption of ASC 606		Effect of Change
Statement of Operations
Net revenues	$	212,575	$	212,965	$	(390	)	$	581,462	$	580,709	$	753
Income from operations	31,377		31,767		(390		)	55,033		54,280		753
Income before income taxes	27,962		28,352		(390		)	43,571		42,818		753
Income tax provision	841		923		(82		)	1,226		1,068		158
Net income	27,121		27,429		(308		)	42,345		41,750		595

In February 2018, the FASB issued ASU No. 2018-02, “Reclassification of Certain Tax Effects from Accumulated Other Comprehensive Income.” This ASU allows a reclassification from accumulated other comprehensive income (loss) (“OCI”) to retained earnings for stranded tax effects resulting from the U.S. Tax Cuts and Jobs Act (the “2017 Tax Act”) that was enacted on December 22, 2017. We adopted this guidance as of January 1, 2018 by making the election to reclassify $1.5 million of net stranded tax benefits from accumulated OCI to retained earnings (Note 8). On an ongoing basis, we release the income tax effects of individual items in accumulated OCI as those items are sold or settled at the applicable statutory rate.

New accounting standards issued but not yet effective

In February 2016, the FASB issued ASU No. 2016-02, “Leases (Topic 842)” (“ASC 842”). The FASB also issued several subsequent updates to provide improvements to the new guidance. ASC 842 amends the existing accounting standards for leases to increase transparency and comparability among organizations. The new guidance requires a lessee to recognize a lease right-of-use asset and related lease liability for most leases, including those classified as operating leases under current GAAP. ASC 842 also changes the definition of a lease and requires expanded quantitative and qualitative disclosures for both lessees and lessors. We are in the process of implementing ASC 842. We have accumulated our lease contracts and are aggregating them into a lease software platform. We are also assessing non-lease contracts for inclusion of embedded leases, updating our policies and controls and establishing appropriate presentation and disclosure changes resulting from the new guidance. While our implementation plan is still ongoing, management’s assessment based on our current portfolio of leases, including vessel charters, is that our assets and liabilities will increase by a significant amount as we recognize right-of-use assets and lease liabilities on our balance sheet upon our adoption of ASC 842. We do not expect the new guidance to have any significant impact on our earnings or cash flows. We will adopt ASC 842 by applying the new guidance in the first quarter of 2019 and recognizing a cumulative-effect adjustment to the opening balance of retained earnings.

We do not expect any other recent accounting standards to have a material impact on our financial position, results of operations or cash flows.

Company Overview	9 Months Ended
Company Overview	Sep. 30, 2018
Organization, Consolidation and Presentation of Financial Statements [Abstract]
Company Overview	Company Overview We are an international offshore energy services company that provides specialty services to the offshore energy industry with a focus on well intervention and robotics operations. We seek to provide services and methodologies that we believe are critical to maximizing production economics. We provide services primarily in deepwater in the U.S. Gulf of Mexico, Brazil, North Sea, Asia Pacific and West Africa regions. Our “life of field” services are segregated into three reportable business segments: Well Intervention, Robotics and Production Facilities (Note 12). Our Well Intervention segment includes our vessels and/or equipment used to perform well intervention services in the U.S. Gulf of Mexico, Brazil, the North Sea and West Africa. Our Well Intervention segment also includes intervention riser systems (“IRSs”), some of which we provide on a stand-alone basis, and subsea intervention lubricators (“SILs”). Our well intervention vessels include the Q4000, the Q5000, the Seawell, the Well Enhancer and two chartered monohull vessels, the Siem Helix 1 and the Siem Helix 2. We also have a semi-submersible well intervention vessel under construction, the Q7000. Our Robotics segment includes remotely operated vehicles (“ROVs”), trenchers and ROVDrills, which are designed to complement offshore construction and well intervention services, and three ROV support vessels under long-term charter: the Grand Canyon, the Grand Canyon II and the Grand Canyon III. We also utilize spot vessels as needed. Our Production Facilities segment includes the Helix Producer I (the “HP I”), a ship-shaped dynamically positioned floating production vessel, and the Helix Fast Response System (the “HFRS”), which provides certain operators access to our Q4000 and HP I vessels in the event of a well control incident in the Gulf of Mexico. The HP I has been under contract to the Phoenix field operator since February 2013, currently under a fixed fee agreement through at least June 1, 2023. We are also party to an agreement providing various operators through March 31, 2019 with access to the HFRS for well control purposes. The Production Facilities segment also includes our ownership interest in Independence Hub, LLC (“Independence Hub”) (Note 5).

Details Of Certain Accounts

9 Months Ended

Sep. 30, 2018

Organization, Consolidation and Presentation of Financial Statements [Abstract]

Details Of Certain Accounts

Details of Certain Accounts

Other current assets consist of the following (in thousands):



	September 30, 2018		December 31, 2017

Contract assets (Note 9)	$	1,346	$	—
Prepaids	13,275		10,102
Deferred costs (Note 9)	26,248		27,204
Other	6,581		4,462
Total other current assets	$	47,450	$	41,768

Other assets, net consist of the following (in thousands):



	September 30, 2018		December 31, 2017

Note receivable ⁽¹⁾	$	—	$	3,758
Prepaids	6,342		7,666
Deferred dry dock costs, net	8,854		12,368
Deferred costs (Note 9)	44,964		63,767
Charter fee deposit ⁽²⁾	12,544		12,544
Other	4,281		5,102
Total other assets, net	$	76,985	$	105,205

(1)

The amount at December 31, 2017 reflects the fair value of a note receivable that was issued to us by a customer as part of a payment forgiveness arrangement. On July 6, 2018, a third party acquired our note receivable for $2.0 million. During the nine-month period ended September 30, 2018, we reversed a $0.6 million unrealized gain previously recorded in Accumulated OCI and recorded a $1.1 million other than temporary loss to account for the reduction in the fair value of our note receivable.


(2)	This amount deposited with the vessel owner is to be used to reduce our final charter payments for the Siem Helix 2.

Accrued liabilities consist of the following (in thousands):



	September 30, 2018		December 31, 2017

Accrued payroll and related benefits	$	42,496	$	30,685
Deferred revenue (Note 9)	13,597		12,609
Derivative liability (Note 15)	9,160		10,625
Other	19,178		17,761
Total accrued liabilities	$	84,431	$	71,680

Other non-current liabilities consist of the following (in thousands):



	September 30, 2018		December 31, 2017

Investee losses in excess of investment (Note 5)	$	5,965	$	7,567
Deferred gain on sale of property ⁽¹⁾	5,288		5,838
Deferred revenue (Note 9)	17,968		8,744
Derivative liability (Note 15)	1,822		8,150
Other	11,339		10,391
Total other non-current liabilities	$	42,382	$	40,690


(1)	Relates to the sale and lease-back in January 2016 of our office and warehouse property located in Aberdeen, Scotland. The deferred gain is amortized over the 15-year minimum lease term.

Statement Of Cash Flow Information

9 Months Ended

Sep. 30, 2018

Supplemental Cash Flow Information [Abstract]

Statement Of Cash Flow Information

Statement of Cash Flow Information

We define cash and cash equivalents as cash and all highly liquid financial instruments with original maturities of three months or less. The following table provides supplemental cash flow information (in thousands):



	Nine Months Ended September 30,
	2018		2017

Interest paid, net of interest capitalized	$	6,620	$	9,002
Income taxes paid	4,699		3,967

Our non-cash investing activities include the acquisition of property and equipment for which payment has not been made. These non-cash capital additions totaled $8.5 million as of September 30, 2018 and $16.9 million as of December 31, 2017.

Equity Investments	9 Months Ended
Equity Investments	Sep. 30, 2018
Equity Method Investments and Joint Ventures [Abstract]
Equity Investments	Equity Investments We have a 20% ownership interest in Independence Hub that we account for using the equity method of accounting. Independence Hub owns the “Independence Hub” platform located in Mississippi Canyon Block 920 in the U.S. Gulf of Mexico in a water depth of 8,000 feet. Since we are committed to providing our pro-rata portion of the necessary level of financial support for Independence Hub to pay its obligations as they become due, we recorded liabilities of $8.2 million at September 30, 2018 and $9.8 million at December 31, 2017 for our share of the estimated obligations, net of remaining working capital. These liabilities are reflected in “Accrued liabilities” and “Other non-current liabilities” in the accompanying condensed consolidated balance sheets.

Long-Term Debt

9 Months Ended

Sep. 30, 2018

Debt Disclosure [Abstract]

Long-Term Debt

Scheduled maturities of our long-term debt outstanding as of September 30, 2018 are as follows (in thousands):



	Term Loan ⁽¹⁾			2022 Notes			2023 Notes			MARAD Debt			Nordea Q5000 Loan			Total

Less than one year	$	4,212		$	—		$	—		$	6,858		$	35,714		$	46,784
One to two years	30,417			—			—			7,200			98,214			135,831
Two to three years	—			—			—			7,560			—			7,560
Three to four years	—			125,000			—			7,937			—			132,937
Four to five years	—			—			125,000			8,333			—			133,333
Over five years	—			—			—			32,580			—			32,580
Total debt	34,629			125,000			125,000			70,468			133,928			489,025
Current maturities	(4,212		)	—			—			(6,858		)	(35,714		)	(46,784		)
Long-term debt, less current maturities	30,417			125,000			125,000			63,610			98,214			442,241
Unamortized debt discount ⁽²⁾	—			(11,772		)	(18,528		)	—			—			(30,300		)
Unamortized debt issuance costs ⁽³⁾	(434		)	(1,898		)	(2,986		)	(4,147		)	(1,211		)	(10,676		)
Long-term debt	$	29,983		$	111,330		$	103,486		$	59,463		$	97,003		$	401,265


(1)	Term Loan borrowing pursuant to the Credit Agreement (as defined below) matures in June 2020. Scheduled principal repayments of the Term Loan have been adjusted to reflect prepayments made in March 2018.


(2)	Our Convertible Senior Notes due 2022 (the “2022 Notes”) will increase to their face amount through accretion of the debt discount through May 2022. Our Convertible Senior Notes due 2023 (the “2023 Notes”) will increase to their face amount through accretion of the debt discount through September 2023.


(3)	Debt issuance costs are amortized to interest expense over the term of the applicable debt agreement.

Below is a summary of certain components of our indebtedness:

Credit Agreement

On June 30, 2017, we entered into an Amended and Restated Credit Agreement (the “Credit Agreement”) with a group of lenders led by Bank of America, N.A. (“Bank of America”). The amended and restated credit facility is comprised of a $100 million term loan (the “Term Loan”) and a revolving credit facility (the “Revolving Credit Facility”) of up to $150 million (the “Revolving Loans”). The Revolving Credit Facility permits us to obtain letters of credit up to a sublimit of $25 million. Pursuant to the Credit Agreement, subject to existing lender participation and/or the participation of new lenders, and subject to standard conditions precedent, we may request aggregate commitments up to $100 million with respect to an increase in the Revolving Credit Facility, additional term loans, or a combination thereof. As of September 30, 2018, we had no borrowings under the Revolving Credit Facility, and our available borrowing capacity under that facility, based on the applicable leverage ratio covenant, totaled $146.7 million, net of $3.3 million of letters of credit issued under that facility.

The Term Loan and the Revolving Loans (together, the “Loans”), at our election, bear interest in relation to Bank of America’s base rate, to a LIBOR rate or a combination thereof. The Term Loan bearing interest at the base rate will bear interest at a per annum rate equal to Bank of America’s base rate plus a margin of 3.25%. The Term Loan bearing interest at a LIBOR rate will bear interest per annum at the LIBOR rate selected by us plus a margin of 4.25%. The interest rate on the Term Loan was 6.49% as of September 30, 2018. The Revolving Loans bearing interest at the base rate will bear interest at a per annum rate equal to Bank of America’s base rate plus a margin ranging from 1.75% to 3.25%. The Revolving Loans bearing interest at a LIBOR rate will bear interest per annum at the LIBOR rate selected by us plus a margin ranging from 2.75% to 4.25%. A letter of credit fee is payable by us equal to the applicable margin for LIBOR rate Loans times the daily amount available to be drawn under the applicable letter of credit. Margins on the Revolving Loans will vary in relation to the Consolidated Total Leverage Ratio (as defined below) as provided for in the Credit Agreement. We also pay a fixed commitment fee of 0.50% per annum on the unused portion of our Revolving Credit Facility.

The Term Loan principal is required to be repaid in quarterly installments totaling 5% in the first loan year, 10% in the second loan year and 15% in the third loan year, with a balloon payment at maturity. Installment amounts are subject to adjustment for any prepayments on the Term Loan. We may elect to prepay amounts outstanding under the Term Loan without premium or penalty, but may not reborrow any amounts prepaid. We may prepay amounts outstanding under the Revolving Credit Facility without premium or penalty and may reborrow any amounts prepaid up to the amount of the Revolving Credit Facility. The Loans mature on June 30, 2020.

The Credit Agreement and the other loan documents entered into in connection with the Credit Agreement include terms and conditions, including covenants, which we consider customary for this type of facility. The covenants include certain restrictions on our and our subsidiaries’ ability to grant liens, incur indebtedness, make investments, merge or consolidate, sell or transfer assets, pay dividends and make capital expenditures. In addition, the Credit Agreement obligates us to meet minimum ratios of EBITDA to interest charges (“Consolidated Interest Coverage Ratio”) and funded debt to EBITDA (“Consolidated Total Leverage Ratio”), and provided that if there are no Loans outstanding, the funded debt ratio requirement permits us to offset a certain amount of cash against the funded debt used in the calculation (“Consolidated Net Leverage Ratio”). After the Term Loan is repaid in full, if there are any Loans outstanding, including unreimbursed draws under letters of credit issued under the Revolving Credit Facility, we also are required to ensure that the ratio of our total secured indebtedness to EBITDA (“Consolidated Secured Leverage Ratio”) does not exceed a maximum permitted ratio. The Credit Agreement also obligates us to maintain certain cash levels depending on the type of indebtedness that is outstanding.

We may from time to time designate one or more of our foreign subsidiaries as subsidiaries not generally subject to the covenants in the Credit Agreement (the “Unrestricted Subsidiaries”). The debt and EBITDA of those Unrestricted Subsidiaries are not included in the calculations of our financial covenants, except for the debt and EBITDA of Helix Q5000 Holdings, S.a.r.l., a wholly owned subsidiary incorporated in Luxembourg (“Q5000 Holdings”). Our obligations under the Credit Agreement are guaranteed by our domestic subsidiaries (except Cal Dive I - Title XI, Inc.) and by Canyon Offshore Limited, a wholly owned Scottish subsidiary. Our obligations under the Credit Agreement, and of our subsidiary guarantors under their guarantee, are secured by (i) most of the assets of the parent company, (ii) the shares of our domestic subsidiaries (other than Cal Dive I - Title XI, Inc.) and of Canyon Offshore Limited, and (iii) most of the assets of our domestic subsidiaries (other than Cal Dive I - Title XI, Inc.) and of Canyon Offshore Limited. In addition, these obligations are secured by pledges of up to 66% of the shares of certain foreign subsidiaries.

In March 2018, we prepaid $61 million of the Term Loan with a portion of the net proceeds from the 2023 Notes. We recognized a $0.9 million loss to write off the related unamortized debt issuance costs, which loss is presented as “Loss on extinguishment of long-term debt” in the accompanying consolidated statement of operations.

Convertible Senior Notes Due 2022

On November 1, 2016, we completed the public offering and sale of our 2022 Notes in the aggregate principal amount of $125 million. The 2022 Notes bear interest at a rate of 4.25% per annum, and are payable semi-annually in arrears on November 1 and May 1 of each year, beginning on May 1, 2017. The 2022 Notes mature on May 1, 2022 unless earlier converted, redeemed or repurchased. During certain periods and subject to certain conditions, the 2022 Notes are convertible by the holders into shares of our common stock at an initial conversion rate of 71.9748 shares of our common stock per $1,000 principal amount (which represents an initial conversion price of approximately $13.89 per share of common stock), subject to adjustment in certain circumstances. We have the right and the intention to settle the principal amount of any such future conversions in cash.

Prior to November 1, 2019, the 2022 Notes are not redeemable. On or after November 1, 2019, if certain conditions are met, we may redeem all or any portion of the 2022 Notes at a redemption price payable in cash equal to 100% of the principal amount to be redeemed, plus accrued and unpaid interest, and a “make-whole premium” (as defined in the indenture governing the 2022 Notes). Holders of the 2022 Notes may require us to repurchase the notes following a “fundamental change” (as defined in the indenture governing the 2022 Notes).

The indenture governing the 2022 Notes contains customary terms and covenants, including that upon certain events of default occurring and continuing, either the trustee under the indenture or the holders of not less than 25% in aggregate principal amount then outstanding under the 2022 Notes may declare the entire principal amount of all the notes, and the interest accrued on such notes, if any, to be immediately due and payable. In the case of certain events of bankruptcy, insolvency or reorganization relating to us or a significant subsidiary, the principal amount of the 2022 Notes together with any accrued and unpaid interest thereon will become immediately due and payable.

The 2022 Notes are accounted for by separating the net proceeds between long-term debt and shareholders’ equity. In connection with the issuance of the 2022 Notes, we recorded a debt discount of $16.9 million ($11.0 million net of tax) as a result of separating the equity component. The effective interest rate for the 2022 Notes is 7.3% after considering the effect of the accretion of the related debt discount that represented the equity component of the 2022 Notes at their inception. The remaining unamortized amount of the debt discount of the 2022 Notes was $11.8 million at September 30, 2018 and $13.9 million at December 31, 2017.

Convertible Senior Notes Due 2023

On March 20, 2018, we completed the public offering and sale of our 2023 Notes in the aggregate principal amount of $125 million. The net proceeds from the issuance of the 2023 Notes were approximately $121 million, after deducting the underwriters’ discounts and commissions and estimated offering expenses. We used the net proceeds from the issuance of the 2023 Notes to fund the required repurchase of $59.3 million in principal of the 2032 Notes and to prepay $61 million of our Term Loan.

The 2023 Notes bear interest at a rate of 4.125% per annum, and are payable semi-annually in arrears on March 15 and September 15 of each year, beginning on September 15, 2018. The 2023 Notes mature on September 15, 2023 unless earlier converted, redeemed or repurchased. During certain periods and subject to certain conditions, the 2023 Notes are convertible by the holders into shares of our common stock at an initial conversion rate of 105.6133 shares of our common stock per $1,000 principal amount (which represents an initial conversion price of approximately $9.47 per share of common stock), subject to adjustment in certain circumstances. We have the right and the intention to settle the principal amount of any such future conversions in cash.

Prior to March 15, 2021, the 2023 Notes are not redeemable. On or after March 15, 2021, if certain conditions are met, we may redeem all or any portion of the 2023 Notes at a redemption price payable in cash equal to 100% of the principal amount to be redeemed, plus accrued and unpaid interest, and a “make-whole premium” (as defined in the indenture governing the 2023 Notes). Holders of the 2023 Notes may require us to repurchase the notes following a “fundamental change” (as defined in the indenture governing the 2023 Notes).

The indenture governing the 2023 Notes contains customary terms and covenants, including that upon certain events of default occurring and continuing, either the trustee under the indenture or the holders of not less than 25% in aggregate principal amount then outstanding under the 2023 Notes may declare the entire principal amount of all the notes, and the interest accrued on such notes, if any, to be immediately due and payable. In the case of certain events of bankruptcy, insolvency or reorganization relating to us or a significant subsidiary, the principal amount of the 2023 Notes together with any accrued and unpaid interest thereon will become immediately due and payable.

The 2023 Notes are accounted for by separating the net proceeds between long-term debt and shareholders’ equity. In connection with the issuance of the 2023 Notes, we recorded a debt discount of $20.1 million ($15.9 million net of tax) as a result of separating the equity component. The effective interest rate for the 2023 Notes is 7.8% after considering the effect of the accretion of the related debt discount that represented the equity component of the 2023 Notes at their inception. The remaining unamortized amount of the debt discount of the 2023 Notes was $18.5 million at September 30, 2018.

MARAD Debt

This U.S. government-guaranteed financing (the “MARAD Debt”), pursuant to Title XI of the Merchant Marine Act of 1936 administered by the Maritime Administration, was used to finance the construction of the Q4000. The MARAD Debt is collateralized by the Q4000 and is guaranteed 50% by us. The MARAD Debt is payable in equal semi-annual installments, matures in February 2027 and bears interest at a rate of 4.93%.

Nordea Credit Agreement

In September 2014, Q5000 Holdings entered into a credit agreement (the “Nordea Credit Agreement”) with a syndicated bank lending group for a term loan (the “Nordea Q5000 Loan”) in an amount of up to $250 million. The Nordea Q5000 Loan was funded in the amount of $250 million in April 2015 at the time the Q5000 vessel was delivered to us. The parent company of Q5000 Holdings, Helix Vessel Finance S.à r.l., also a wholly owned Luxembourg subsidiary, guaranteed the Nordea Q5000 Loan. The loan is secured by the Q5000 and its charter earnings as well as by a pledge of the shares of Q5000 Holdings. This indebtedness is non-recourse to Helix.

The Nordea Q5000 Loan bears interest at a LIBOR rate plus a margin of 2.5%. The Nordea Q5000 Loan matures on April 30, 2020 and is repayable in scheduled quarterly principal installments of $8.9 million with a balloon payment of $80.4 million at maturity. Q5000 Holdings may elect to prepay amounts outstanding under the Nordea Q5000 Loan without premium or penalty, but may not reborrow any amounts prepaid. Quarterly principal installments are subject to adjustment for any prepayments on this debt. In June 2015, we entered into various interest rate swap contracts to fix the one-month LIBOR rate on a portion of our borrowings under the Nordea Q5000 Loan (Note 15). The total notional amount of the swaps (initially $187.5 million) decreases in proportion to the reduction in the principal amount outstanding under our Nordea Q5000 Loan. The fixed LIBOR rates are approximately 150 basis points.

The Nordea Credit Agreement and related loan documents include terms and conditions, including covenants and prepayment requirements, that we consider customary for this type of transaction. The covenants include restrictions on Q5000 Holdings’s ability to grant liens, incur indebtedness, make investments, merge or consolidate, sell or transfer assets, and pay dividends. In addition, the Nordea Credit Agreement obligates Q5000 Holdings to meet certain minimum financial requirements, including liquidity, consolidated debt service coverage and collateral maintenance.

Convertible Senior Notes Due 2032

In March 2012, we issued $200 million of 3.25% Convertible Senior Notes which were originally scheduled to mature on March 15, 2032. In March 2018, we made a tender offer for the repurchase of the 2032 Notes outstanding on the first repurchase date as required by the indenture governing the 2032 Notes, and as a result we repurchased $59.3 million in aggregate principal amount of the 2032 Notes on March 20, 2018. The total repurchase price was $59.5 million, including $0.2 million in fees. We recognized a $0.2 million loss in connection with the repurchase of the notes. The loss is presented as “Loss on extinguishment of long-term debt” in the accompanying consolidated statement of operations. On May 4, 2018, we redeemed the remaining $0.8 million in aggregate principal amount of the 2032 Notes.

Other

In accordance with our Credit Agreement, the 2022 Notes, the 2023 Notes, the MARAD Debt agreements and the Nordea Credit Agreement, we are required to comply with certain covenants, including certain financial ratios such as a consolidated interest coverage ratio and various leverage ratios, as well as the maintenance of minimum cash balance, net worth, working capital and debt-to-equity requirements. As of September 30, 2018, we were in compliance with these covenants.

The following table details the components of our net interest expense (in thousands):



	Three Months Ended September 30,						Nine Months Ended September 30,
	2018			2017			2018			2017

Interest expense	$	8,171		$	8,336		$	24,511		$	30,183
Interest income	(994		)	(792		)	(2,263		)	(2,056		)
Capitalized interest	(3,928		)	(3,929		)	(11,504		)	(12,647		)
Net interest expense	$	3,249		$	3,615		$	10,744		$	15,480

Income Taxes

9 Months Ended

Sep. 30, 2018

Income Tax Disclosure [Abstract]

Income Taxes

On December 22, 2017, the 2017 Tax Act was enacted. The 2017 Tax Act is comprehensive tax reform legislation that contains significant changes to corporate taxation, including a permanent reduction of the corporate income tax rate from 35% to 21%, a mandatory one-time tax on un-repatriated accumulated earnings of foreign subsidiaries, a partial limitation on the deductibility of business interest expense, and a shift from U.S. taxation on worldwide income of multinational corporations to a partial territorial system (along with rules that create a new U.S. minimum tax on earnings of foreign subsidiaries).

We recognized the income tax effects of the 2017 Tax Act in accordance with Staff Accounting Bulletin No. 118 (“SAB 118”), which provides SEC staff guidance for the application of ASC Topic 740, Income Taxes, to the 2017 Tax Act. SAB 118 allows for a measurement period of up to one year after the enactment date to finalize the recording of the related tax impacts. We believe the provisional amounts recorded during the fourth quarter of 2017 continue to represent a reasonable estimate of the accounting implications of the 2017 Tax Act. We did not identify any items for which the income tax effects of the 2017 Tax Act could not be reasonably estimated through September 30, 2018.

We believe that our recorded deferred tax assets and liabilities are reasonable. However, tax laws and regulations are subject to interpretation, and the outcomes of tax disputes are inherently uncertain; therefore, our assessments can involve a series of complex judgments about future events and rely heavily on estimates and assumptions.

Our estimated annual effective tax rate, adjusted for discrete tax items, is applied to our pretax loss for the current interim period in 2018 as we previously made the determination that a return to the annualized effective tax rate method is appropriate for 2018. A year-to-date effective tax rate method was used for recording income taxes for the comparative interim period in 2017 based on expectations that a small change in our estimated ordinary income could result in a large change in the estimated annual effective tax rate.

The effective tax rates for the three- and nine-month periods ended September 30, 2018 were 3.0% and 2.8%, respectively. The effective tax rates for the three- and nine-month periods ended September 30, 2017 were (204.9)% and 5.2%, respectively. The variance was primarily attributable to the earnings mix between our higher and lower tax rate jurisdictions, the reduction of the U.S. corporate income tax rate from 35% to 21% as a result of the 2017 Tax Act, and a tax charge in 2017 attributable to a change in tax position related to our foreign taxes.

Income taxes are provided based on the U.S. statutory rate and at the local statutory rate for each foreign jurisdiction adjusted for items that are allowed as deductions for federal and foreign income tax reporting purposes, but not for book purposes. The primary differences between the U.S. statutory rate and our effective rate are as follows:



	Three Months Ended September 30,				Nine Months Ended September 30,
	2018		2017		2018		2017

U.S. statutory rate	21.0	%	35.0	%	21.0	%	35.0	%
Foreign provision	(18.5	)	(241.5	)	(19.1	)	2.8
Change in tax position ⁽¹⁾	—		—		—		(29.3	)
Other	0.5		1.6		0.9		(3.3	)
Effective rate	3.0	%	(204.9	)%	2.8	%	5.2	%


(1)	As a result of a change in tax position related to our foreign taxes, we recorded a tax charge of $6.3 million in June 2017.

Shareholders' Equity

9 Months Ended

Sep. 30, 2018

Stockholders' Equity Note [Abstract]

Shareholders' Equity

Shareholders’ Equity

The components of Accumulated OCI are as follows (in thousands):



	September 30, 2018			December 31, 2017

Cumulative foreign currency translation adjustment	$	(66,966	)	$	(62,689	)
Net unrealized loss on hedges, net of tax ⁽¹⁾	(4,350		)	(7,507		)
Unrealized gain on note receivable, net of tax ⁽²⁾	—			409
Accumulated other comprehensive loss	$	(71,316	)	$	(69,787	)

(1)

Relates to foreign currency hedges for the Grand Canyon II and Grand Canyon III charters as well as interest rate swap contracts for the Nordea Q5000 Loan (Note 15). Balance at September 30, 2018 was net of deferred income taxes totaling $1.1 million. Balance at December 31, 2017 was net of deferred income taxes of $4.0 million, $1.6 million of which was reclassified to retained earnings on January 1, 2018 pursuant to the adoption of ASU No. 2018-02 (Note 1).


(2)	Balance at December 31, 2017 was net of deferred income taxes of $0.2 million, $0.1 million of which was reclassified to retained earnings on January 1, 2018 pursuant to the adoption of ASU No. 2018-02 (Note 1).

Revenue From Contracts With Customers

9 Months Ended

Sep. 30, 2018

Revenue from Contract with Customer [Abstract]

Revenue From Contracts With Customers

Revenue from Contracts with Customers

We generate revenue in our Well Intervention segment by supplying the vessels, personnel, and equipment to provide well intervention services, which involve providing marine access, serving as a deployment mechanism to the subsea well, connecting to and maintaining a secure connection to the subsea well and maintaining well control through the duration of the intervention services. We also perform down-hole intervention work and provide certain engineering services. We generate revenue in our Robotics segment by operating ROVs, trenchers and ROVDrills to provide subsea construction, inspection, repair and maintenance services to oil and gas companies as well as subsea trenching and burial of pipelines and cables for the oil and gas and the renewable energy industries. We also provide integrated robotic services by supplying vessels that deploy the ROVs and trenchers. Our Production Facilities segment generates revenue by providing the personnel, vessel and equipment for oil and natural gas processing as well as well control response services.

Our revenues are derived from short-term and long-term service contracts with customers. Our service contracts generally contain either provisions for specific time, material and equipment charges that are billed in accordance with the terms of such contracts (dayrate contracts) or lump sum payment provisions (lump sum contracts). We record revenues net of taxes collected from customers and remitted to governmental authorities.

We generally account for our services under contracts with customers as a single performance obligation satisfied over time. The single performance obligation in our dayrate contracts is comprised of a series of distinct time increments in which we provide services. We do not account for activities that are immaterial or not distinct within the context of our contracts as separate performance obligations. Consideration for these activities as well as contract fulfillment activities is allocated to the single performance obligation on a systematic basis that depicts the pattern of the provision of our services to the customer.

The total transaction price for a contract is determined by estimating both fixed and variable consideration expected to be earned over the term of the contract. We do not generally provide significant financing to our customers and do not adjust contract consideration for the time value of money if extended payment terms are granted for less than one year. The estimated amount of variable consideration is constrained and is only included in the transaction price to the extent that it is probable that a significant reversal in the amount of cumulative revenue recognized will not occur. At the end of each reporting period, we reassess and update our estimates of variable consideration and amounts of that variable consideration that should be constrained.

Dayrate Contracts. Revenues generated from dayrate contracts generally provide for payment according to the rates per day as stipulated in the contract (e.g. operating rate, standby rate, repair rate). The invoices billed to the customer are typically based on the varying rates applicable to operating status on an hourly basis. Dayrate consideration is allocated to the distinct hourly time increment to which it relates and is therefore recognized in line with the contractual rate billed for the services provided for any given hour. Similarly, revenues from contracts that stipulate a monthly rate are recognized ratably during the month.

Dayrate contracts also may contain fees charged to the customer for mobilizing and demobilizing equipment and personnel. Mobilization and demobilization fees are associated with contract fulfillment activities, and related revenue (subject to any constraint on estimates of variable consideration) is allocated to the single performance obligation and recognized ratably over the initial term of the contract. Mobilization fees are generally billable to the customer in the initial phase of a contract and generate contract liabilities until they are recognized as revenue. Demobilization fees are generally received at the end of the contract and generate contract assets when they are recognized as revenue prior to becoming receivables from the customer. See further discussion on contract liabilities under “Contract balances” below.

We receive reimbursements from our customers for the purchase of supplies, equipment, personnel services and other services provided at their request. Reimbursable revenues are variable and subject to uncertainty as the amounts received and timing thereof are dependent on factors outside of our influence. Accordingly, these revenues are constrained and not recognized until the uncertainty is resolved, which typically occurs when the related costs are incurred on behalf of the customer. We are generally considered a principal in these transactions and record the associated revenues at the gross amounts billed to the customer.

A dayrate contract modification involving an extension of the contract by adding additional days of services is generally accounted prospectively for as a separate contract, but may be accounted for as a termination of the existing contract and creation of a new contract if the consideration for the extended services does not represent their stand-alone selling prices.

Lump Sum Contracts. Revenues generated from lump sum contracts are recognized over time. Revenue is recognized based on the extent of progress towards completion of the performance obligation. We generally use the cost-to-cost measure of progress for our lump sum contracts because it best depicts the progress toward satisfaction of our performance obligation, which occurs as we incur costs under those contracts. Under the cost-to-cost measure of progress, the extent of progress towards completion is measured based on the ratio of cumulative costs incurred to date to the total estimated costs at completion of the performance obligation. Consideration, including lump sum mobilization and demobilization fees billed to the customer, is recorded proportionally as revenue in accordance with the cost-to-cost measure of progress. Consideration for lump sum contracts is generally due from the customer based on the achievement of milestones. As such, contract assets are generated to the extent we recognize revenues in advance of our rights to collect contract consideration and contract liabilities are generated when contract consideration due or received is greater than revenues recognized to date.

We review and update our contract-related estimates regularly and recognize adjustments in estimated profit on contracts under the cumulative catch-up method. Under this method, the impact of the adjustment on profit recorded to date on a contract is recognized in the period in which the adjustment is identified. Revenue and profit in future periods of contract performance are recognized using the adjusted estimate. If a current estimate of total contract costs to be incurred exceeds the estimate of total revenues to be earned, we recognize the projected loss in full when it is identified. A modification to a lump sum contract is generally accounted for as part of the existing contract and recognized as an adjustment to revenue (either as an increase in or a reduction of revenue) on a cumulative catch-up basis.

Disaggregation of revenue

The following table provides information about disaggregated revenue by contract duration for the three- and nine-month periods ended September 30, 2018 (in thousands):



	Well Intervention		Robotics		Production Facilities		Intercompany Elimination ⁽¹⁾			Total Revenue
Three months ended September 30, 2018
Short-term	$	39,548	$	29,877	$	—	$	—		$	69,425
Long-term ⁽²⁾	114,893		24,463		15,877		(12,083		)	143,150
Total	$	154,441	$	54,340	$	15,877	$	(12,083	)	$	212,575

Nine months ended September 30, 2018
Short-term	$	143,510	$	74,050	$	—	$	—		$	217,560
Long-term ⁽²⁾	302,259		46,519		48,541		(33,417		)	363,902
Total	$	445,769	$	120,569	$	48,541	$	(33,417	)	$	581,462


(1)	Intercompany revenues between Robotics and Well Intervention are under agreements that are considered long-term.


(2)	Contracts are classified as long-term if all or part of the contract is to be performed over a period extending beyond 12 months from the effective date of the contract. Long-term contracts may include multi-year agreements whereby the commitment for services in any one year may be short in duration.

Contract balances

Accounts receivable are recognized when our right to consideration becomes unconditional. Accounts receivable that have been billed to customers are recorded as trade accounts receivable while accounts receivable that have not been billed to customers are recorded as unbilled accounts receivable.

Contract assets are rights to consideration in exchange for services that we have transferred to a customer when that right is conditional on our future performance. Contract assets generally consist of (i) demobilization fees recognized ratably over the contract term but invoiced upon completion of the demobilization activities and (ii) revenue recognized in excess of the amount billed to the customer for lump sum contracts when the cost-to-cost method of revenue recognition is utilized. Contract assets are reflected in “Other current assets” on the accompanying condensed consolidated balance sheet. Contract assets as of January 1, 2018 were immaterial while contract assets as of September 30, 2018 were $1.3 million. Impairment losses recognized on our accounts receivable and contract assets were immaterial for the three- and nine-month periods ended September 30, 2018.

Contract liabilities are obligations to provide future services to a customer for which we have already received, or have the unconditional right to receive, the consideration from the customer. Contract liabilities may consist of (i) advance payments received from customers, including upfront mobilization fees allocated to the single performance obligation and recognized ratably over the contract term and (ii) the amount billed to the customer in excess of revenue recognized for lump sum contracts when the cost-to-cost method of revenue recognition is utilized. Contract liabilities are reflected as “Deferred revenue,” a component of “Accrued liabilities” and “Other non-current liabilities” on the accompanying condensed consolidated balance sheet. Contract liabilities as of January 1, 2018 and September 30, 2018 totaled $21.4 million and $31.6 million, respectively. Revenue recognized for the three- and nine-month periods ended September 30, 2018 included $7.4 million and $10.8 million, respectively, that were included in the contract liability balance at the beginning of each period.

We report the net contract asset or contract liability position on a contract-by-contract basis at the end of each reporting period.

Performance obligations

As of September 30, 2018, $1.2 billion related to unsatisfied performance obligations was expected to be recognized as revenue in the future, with $118.0 million in 2018, $437.2 million in 2019 and $666.5 million in 2020 and thereafter. These amounts included fixed consideration and estimated variable consideration for both wholly and partially unsatisfied performance obligations, including mobilization and demobilization fees. These amounts are derived from the specific terms within our contracts, and the expected timing for revenue recognition is based on the estimated start date and duration of each contract according to the information known at September 30, 2018.

For the three- and nine-month periods ended September 30, 2018, revenues recognized from performance obligations satisfied (or partially satisfied) in previous periods were immaterial.

Contract costs

Contract costs consist of costs incurred in fulfilling a contract with a customer. Our contract costs primarily relate to costs incurred for mobilization of personnel and equipment at the beginning of a contract and costs incurred for demobilization at the end of a contract. Mobilization costs are deferred and amortized ratably over the contract term (including anticipated contract extensions) based on the pattern of the provision of services to which these contract costs relate. Demobilization costs are recognized when incurred at the end of the contract. Deferred contract costs are reflected as “Deferred costs,” a component of “Other current assets” and “Other assets, net” on the accompanying condensed consolidated balance sheet. Our deferred contract costs totaled $71.2 million as of September 30, 2018. For the three- and nine-month periods ended September 30, 2018, we recorded $8.5 million and $25.6 million, respectively, related to amortization of deferred contract costs existing at the beginning of each period and there were no associated impairment losses.

Earnings Per Share

9 Months Ended

Sep. 30, 2018

Earnings Per Share [Abstract]

Earnings Per Share

We have shares of restricted stock issued and outstanding that are currently unvested. Holders of shares of unvested restricted stock are entitled to the same liquidation and dividend rights as the holders of our unrestricted common stock and the shares of restricted stock are thus considered participating securities. Under applicable accounting guidance, the undistributed earnings for each period are allocated based on the participation rights of both common shareholders and the holders of any participating securities as if earnings for the respective periods had been distributed. Because both the liquidation and dividend rights are identical, the undistributed earnings are allocated on a proportionate basis. Further, we are required to compute earnings per share (“EPS”) under the two class method in periods in which we have earnings. For periods in which we have a net loss we do not use the two class method as holders of our restricted shares are not obligated to share in such losses.

The presentation of basic EPS amounts on the face of the accompanying condensed consolidated statements of operations is computed by dividing net income or loss by the weighted average shares of our common stock outstanding. The calculation of diluted EPS is similar to that for basic EPS, except that the denominator includes dilutive common stock equivalents and the numerator excludes the effects of dilutive common stock equivalents, if any. The computations of the numerator (income) and denominator (shares) to derive the basic and diluted EPS amounts presented on the face of the accompanying condensed consolidated statements of operations for the three- and nine-month periods ended September 30, 2018 are as follows (in thousands):



	Three Months Ended September 30, 2018				Three Months Ended September 30, 2017
	Income			Shares	Income			Shares
Basic:
Net income	$	27,121			$	2,290
Less: Undistributed earnings allocated to participating securities	(260		)		(27		)
Undistributed earnings allocated to common shares	$	26,861		146,700	$	2,263		145,958

Diluted:
Undistributed earnings allocated to common shares	$	26,861		146,700	$	2,263		145,958
Effect of dilutive securities:
Share-based awards other than participating securities	—			264	—			—
Undistributed earnings reallocated to participating securities	—			—	—			—
Net income	$	26,861		146,964	$	2,263		145,958



	Nine Months Ended September 30, 2018				Nine Months Ended September 30, 2017
	Income			Shares	Income			Shares
Basic:
Net income (loss)	$	42,345			$	(20,528	)
Less: Undistributed earnings allocated to participating securities	(407		)		—
Undistributed earnings allocated to common shares	$	41,938		146,679	$	(20,528	)	145,057

Diluted:
Undistributed earnings allocated to common shares	$	41,938		146,679	$	(20,528	)	145,057
Effect of dilutive securities:
Share-based awards other than participating securities	—			82	—			—
Undistributed earnings reallocated to participating securities	—			—	—			—
Net income (loss)	$	41,938		146,761	$	(20,528	)	145,057

We had a net loss for the nine-month period ended September 30, 2017. Accordingly, our diluted EPS calculation for this period was equivalent to our basic EPS calculation since diluted EPS excluded any assumed exercise or conversion of common stock equivalents. These common stock equivalents were excluded because they were deemed to be anti-dilutive, meaning their inclusion would have reduced the reported net loss per share in the applicable period. Shares that otherwise would have been included in the diluted per share calculations assuming we had earnings are as follows (in thousands):



		Nine Months Ended
		September 30, 2017

Diluted shares (as reported)		145,057
Share-based awards		364
Total		145,421

In addition, the following potentially dilutive shares related to the 2022 Notes, the 2023 Notes and the 2032 Notes were excluded from the diluted EPS calculation because we have the right and the intention to settle any such future conversions in cash (Note 6) (in thousands):



	Three Months Ended September 30,		Nine Months Ended September 30,
	2018	2017	2018	2017

2022 Notes	8,997	8,997	8,997	8,997
2023 Notes	13,202	—	9,381	—
2032 Notes ⁽¹⁾	—	2,403	701	2,403


(1)	The 2032 Notes were fully redeemed in May 2018.

Employee Benefit Plans

9 Months Ended

Sep. 30, 2018

Disclosure of Compensation Related Costs, Share-based Payments [Abstract]

Employee Benefit Plans

Long-Term Incentive Plan

As of September 30, 2018, there were 1.8 million shares of our common stock available for issuance under our long-term incentive plan, the 2005 Long-Term Incentive Plan, as amended and restated January 1, 2017 (the “2005 Incentive Plan”). During the nine-month period ended September 30, 2018, the following grants of share-based awards were made under the 2005 Incentive Plan:



Date of Grant	Shares / Units	Grant Date Fair Value Per Share		Vesting Period

January 2, 2018 ⁽¹⁾	449,271	$	7.54	33% per year over three years
January 2, 2018 ⁽²⁾	449,271	10.44		100% on January 2, 2021
January 2, 2018 ⁽³⁾	8,247	7.54		100% on January 1, 2020
April 2, 2018 ⁽³⁾	11,064	5.79		100% on January 1, 2020
July 2, 2018 ⁽³⁾	6,565	8.33		100% on January 1, 2020
August 21, 2018 ⁽⁴⁾	6,093	8.97		100% on August 21, 2019


(1)	Reflects grants of restricted stock to our executive officers.


(2)	Reflects grants of performance share units (“PSUs”) to our executive officers. The PSUs provide for an award based on the performance of our common stock over a three-year period with the maximum amount of the award being 200% of the original awarded PSUs and the minimum amount being zero. These awards when vested can only be settled in shares of our common stock.


(3)	Reflects grants of restricted stock to certain independent members of our Board of Directors (the “Board”) who have made an election to take their quarterly fees in stock in lieu of cash.


(4)	Reflects a grant of restricted stock made to a new independent member of our Board upon his joining our Board.

Compensation cost for restricted stock is the product of grant date fair value of each share and the number of shares granted and is recognized over the applicable vesting periods on a straight-line basis. Forfeitures are recognized as they occur. For the three- and nine-month periods ended September 30, 2018, $1.5 million and $4.5 million, respectively, were recognized as share-based compensation related to restricted stock. For the three- and nine-month periods ended September 30, 2017, $1.7 million and $5.4 million, respectively, were recognized as share-based compensation related to restricted stock.

The estimated fair value of PSUs is determined using a Monte Carlo simulation model. The PSUs granted in 2017 and 2018 are accounted for as equity awards whereas awards granted prior to 2017 are accounted for as liability awards. Compensation cost for PSUs that are accounted for as equity awards is measured based on the estimated grant date fair value and recognized over the vesting period on a straight-line basis. PSUs that are accounted for as liability awards are measured based on the estimated fair value at the balance sheet date and changes in fair value of the awards are recognized in earnings. Cumulative compensation cost for vested liability PSU awards equals the actual payout value upon vesting. For the three- and nine-month periods ended September 30, 2018, $6.3 million and $11.5 million, respectively, were recognized as share-based compensation related to PSUs. For the three- and nine-month periods ended September 30, 2017, $4.0 million and $5.8 million, respectively, were recognized as share-based compensation related to PSUs. The liability balance for unvested PSUs that are accounted for as liability awards was $18.8 million at September 30, 2018 and $11.1 million at December 31, 2017. We paid $0.9 million in cash to settle the 2015 PSU awards when they vested in January 2018.

Additionally in January 2018, we granted $5.0 million of fixed value cash awards to select management employees under the 2005 Incentive Plan. The value of these cash awards is recognized on a straight-line basis over a vesting period of three years. For the three- and nine-month periods ended September 30, 2018, $0.5 million and $1.3 million, respectively, was recognized as compensation cost.

Employee Stock Purchase Plan

We have an employee stock purchase plan (the “ESPP”). The ESPP has 1.5 million shares authorized for issuance, of which 0.5 million shares were available for issuance as of September 30, 2018. The ESPP currently has a purchase limit of 130 shares per employee per purchase period.

For more information regarding our employee benefit plans, including our long-term incentive stock-based and cash plans and our employee stock purchase plan, see Note 11 to our 2017 Form 10-K.

Business Segment Information

9 Months Ended

Sep. 30, 2018

Segment Reporting [Abstract]

Business Segment Information

We have three reportable business segments: Well Intervention, Robotics and Production Facilities. Our U.S., U.K. and Brazil well intervention operating segments are aggregated into the Well Intervention business segment for financial reporting purposes. Our Well Intervention segment includes our vessels and/or equipment used to perform well intervention services in the U.S. Gulf of Mexico, Brazil, the North Sea and West Africa. Our Well Intervention segment also includes IRSs, some of which we provide on a stand-alone basis, and SILs. Our well intervention vessels include the Q4000, the Q5000, the Seawell, the Well Enhancer and the chartered Siem Helix 1 and Siem Helix 2 vessels. Our Robotics segment includes ROVs, trenchers and ROVDrills, which are designed to complement offshore construction and well intervention services, and three ROV support vessels under long-term charter: the Grand Canyon, the Grand Canyon II and the Grand Canyon III. Our Production Facilities segment includes the HP I, the HFRS and our investment in Independence Hub that is accounted for under the equity method. All material intercompany transactions between the segments have been eliminated.

We evaluate our performance primarily based on operating income of each reportable segment. Certain financial data by reportable segment are summarized as follows (in thousands):



	Three Months Ended September 30,						Nine Months Ended September 30,
	2018			2017			2018			2017
Net revenues —
Well Intervention	$	154,441		$	111,522		$	445,769		$	299,219
Robotics	54,340			47,049			120,569			102,078
Production Facilities	15,877			16,380			48,541			47,965
Intercompany elimination	(12,083		)	(11,691		)	(33,417		)	(31,145		)
Total	$	212,575		$	163,260		$	581,462		$	418,117

Income (loss) from operations —
Well Intervention	$	34,427		$	16,906		$	82,774		$	37,356
Robotics	5,601			(9,365		)	(12,818		)	(37,313		)
Production Facilities	6,694			7,660			20,919			20,724
Corporate and other	(15,567		)	(10,633		)	(36,507		)	(29,296		)
Intercompany elimination	222			199			665			641
Total	$	31,377		$	4,767		$	55,033		$	(7,888	)

Intercompany segment amounts are derived primarily from equipment and services provided to other business segments at rates consistent with those charged to third parties. Intercompany segment revenues are as follows (in thousands):



	Three Months Ended September 30,				Nine Months Ended September 30,
	2018		2017		2018	2017

Well Intervention	$	4,379	$	3,765