Commitments and Contingencies and Other Matters

Commitments

Commitments Related to Our Fleet

We have charter agreements for the Grand Canyon, Grand Canyon II and Grand Canyon III vessels for use in our robotics operations. In February 2016, we amended the charter agreements to reduce the charter rates and, in connection with those reductions, to extend the terms to October 2019 for the Grand Canyon, to April 2021 for the Grand Canyon II and to May 2023 for the Grand Canyon III. We also had a charter agreement for the Deep Cygnus. On February 9, 2018, we terminated our charter for the vessel and returned it to its owner. The charter had originally been scheduled to end on March 31, 2018.

In September 2013, we executed a contract with the same shipyard in Singapore that constructed the Q5000 for the construction of a newbuild semi-submersible well intervention vessel, the Q7000, to be built to North Sea standards. Pursuant to the contract and subsequent amendments, including the third amendment that was entered into in November 2017, 20% of the contract price was paid upon the signing of the contract in 2013, 20% was paid in 2016, 20% was paid in December 2017, 20% is to be paid on December 31, 2018, and 20% is to be paid upon the delivery of the vessel, which at our option can be deferred until December 31, 2019. We are also contractually committed to reimburse the shipyard for its costs in connection with the deferment of the Q7000’s delivery beyond 2017. At December 31, 2017, our total investment in the Q7000 was $295.8 million, including $207.6 million of installment payments to the shipyard. Currently equipment is being manufactured and/or installed for the completion of the vessel.

In February 2014, we entered into agreements with Petrobras to provide well intervention services offshore Brazil, and in connection with the Petrobras agreements, we entered into charter agreements with Siem Offshore AS (“Siem”) for two newbuild monohull vessels, the Siem Helix 1 and the Siem Helix 2. The initial term of the charter agreements with Siem is for seven years from the respective vessel delivery dates with options to extend. The initial term of the agreements with Petrobras is for four years with Petrobras’s options to extend.

The Siem Helix 1 vessel was delivered to us and the charter term began on June 14, 2016. The vessel was accepted by Petrobras and commenced operations on April 14, 2017. The Siem Helix 2 was delivered to us and the charter term began on February 10, 2017. The vessel was accepted by Petrobras and commenced operations on December 15, 2017 at contracted rates. At December 31, 2017, our total investment in the topside equipment for the two vessels was $309.8 million.

Lease Commitments

We lease facilities and equipment as well as charter vessels under non-cancelable operating leases and vessel charters expiring at various dates through 2031. Future minimum rentals at December 31, 2017 are as follows (in thousands):



	Vessels		Facilities and Other		Total

2018	$	121,811	$	6,207	$	128,018
2019	117,731		5,354		123,085
2020	100,373		4,807		105,180
2021	88,425		4,706		93,131
2022	83,617		4,778		88,395
Thereafter	45,858		15,421		61,279
Total lease commitments	$	557,815	$	41,273	$	599,088

For the years ended December 31, 2017, 2016 and 2015, total rental expense was approximately $114.5 million, $87.8 million and $134.3 million, respectively.

We sublease some of our facilities under non-cancelable sublease agreements. For the years ended December 31, 2017, 2016 and 2015, total rental income was $1.3 million, $1.6 million and $1.4 million, respectively. As of December 31, 2017, the minimum rentals to be received in the future totaled $1.4 million.

In January 2016, we entered into an agreement to lease back our former office and warehouse property located in Aberdeen, Scotland for 15 years with two five-year options to extend the lease. The annual minimum lease payment is approximately $0.8 million.

Contingencies and Claims

We believe that there are currently no contingencies that would have a material adverse effect on our financial position, results of operations and cash flows.

Litigation

We are involved in various other legal proceedings, some involving claims for personal injury under the General Maritime Laws of the United States and the Jones Act based on alleged negligence. In addition, from time to time we incur other claims, such as contract and employment-related disputes, in the normal course of business.