0000866829-21-000022.txt : 20211022 0000866829-21-000022.hdr.sgml : 20211022 20211021183622 ACCESSION NUMBER: 0000866829-21-000022 CONFORMED SUBMISSION TYPE: 10-Q PUBLIC DOCUMENT COUNT: 92 CONFORMED PERIOD OF REPORT: 20210930 FILED AS OF DATE: 20211022 DATE AS OF CHANGE: 20211021 FILER: COMPANY DATA: COMPANY CONFORMED NAME: HELIX ENERGY SOLUTIONS GROUP INC CENTRAL INDEX KEY: 0000866829 STANDARD INDUSTRIAL CLASSIFICATION: OIL, GAS FIELD SERVICES, NBC [1389] IRS NUMBER: 953409686 STATE OF INCORPORATION: MN FISCAL YEAR END: 1231 FILING VALUES: FORM TYPE: 10-Q SEC ACT: 1934 Act SEC FILE NUMBER: 001-32936 FILM NUMBER: 211338202 BUSINESS ADDRESS: STREET 1: 3505 W SAM HOUSTON NORTH STREET 2: SUITE 400 CITY: HOUSTON STATE: TX ZIP: 77043 BUSINESS PHONE: 281-618-0400 MAIL ADDRESS: STREET 1: 3505 W SAM HOUSTON NORTH STREET 2: SUITE 400 CITY: HOUSTON STATE: TX ZIP: 77043 FORMER COMPANY: FORMER CONFORMED NAME: CAL DIVE INTERNATIONAL INC DATE OF NAME CHANGE: 19960821 10-Q 1 hlx-20210930x10q.htm 10-Q
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UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

WASHINGTON, D.C. 20549

Form 10-Q

    QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934

For the quarterly period ended September 30, 2021

or

    TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934

For the transition period from__________ to__________

Commission File Number: 001-32936

Graphic

HELIX ENERGY SOLUTIONS GROUP, INC.

(Exact name of registrant as specified in its charter)

Minnesota

   

95-3409686

(State or other jurisdiction of incorporation or organization)

(I.R.S. Employer Identification No.)

3505 West Sam Houston Parkway North

Suite 400

Houston Texas

77043

(Address of principal executive offices)

(Zip Code)

(281) 618–0400

(Registrant’s telephone number, including area code)

NOT APPLICABLE

(Former name, former address and former fiscal year, if changed since last report)

Securities registered pursuant to Section 12(b) of the Act:

Title of each class

   

Trading Symbol(s)

   

Name of each exchange on which registered

Common Stock

HLX

New York Stock Exchange

Indicate by check mark whether the registrant (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days.   Yes  No

Indicate by check mark whether the registrant has submitted electronically every Interactive Data File required to be submitted pursuant to Rule 405 of Regulation S-T (§232.405 of this chapter) during the preceding 12 months (or for such shorter period that the registrant was required to submit such files).   Yes  No

Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, a smaller reporting company, or an emerging growth company. See the definitions of “large accelerated filer,” “accelerated filer,” “smaller reporting company,” and “emerging growth company” in Rule 12b-2 of the Exchange Act.

Large accelerated filer 

Accelerated filer 

Non-accelerated filer 

Smaller reporting company 

Emerging growth company 

If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act.  

Indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Exchange Act).   Yes þ No

As of October 18, 2021, 150,888,686 shares of common stock were outstanding.

TABLE OF CONTENTS

PART I.

FINANCIAL INFORMATION

PAGE

Item 1.

Financial Statements:

3

Condensed Consolidated Balance Sheets – September 30, 2021 (Unaudited) and December 31, 2020

3

Condensed Consolidated Statements of Operations (Unaudited) – Three and nine months ended September 30, 2021 and 2020

4

Condensed Consolidated Statements of Comprehensive Income (Unaudited) – Three and nine months ended September 30, 2021 and 2020

5

Condensed Consolidated Statements of Shareholders’ Equity (Unaudited) – Three months ended September 30, 2021 and 2020

6

Condensed Consolidated Statements of Shareholders’ Equity (Unaudited) – Nine months ended September 30, 2021 and 2020

7

Condensed Consolidated Statements of Cash Flows (Unaudited) – Nine months ended September 30, 2021 and 2020

8

Notes to Condensed Consolidated Financial Statements (Unaudited)

9

Item 2.

Management’s Discussion and Analysis of Financial Condition and Results of Operations

27

Item 3.

Quantitative and Qualitative Disclosures About Market Risk

40

Item 4.

Controls and Procedures

41

PART II.

OTHER INFORMATION

41

Item 1.

Legal Proceedings

41

Item 2.

Unregistered Sales of Equity Securities and Use of Proceeds

41

Item 6.

Exhibits

42

Signatures

43

2

PART I. FINANCIAL INFORMATION

Item 1. Financial Statements

HELIX ENERGY SOLUTIONS GROUP, INC. AND SUBSIDIARIES

CONDENSED CONSOLIDATED BALANCE SHEETS

(in thousands)

September 30, 

December 31, 

    

2021

    

2020

ASSETS

 

  

 

  

Current assets:

 

  

 

  

Cash and cash equivalents

$

237,549

$

291,320

Restricted cash

 

71,282

 

Accounts receivable, net of allowance for credit losses of $1,410 and $3,469, respectively

 

136,704

 

132,233

Other current assets

 

62,442

 

102,092

Total current assets

 

507,977

 

525,645

Property and equipment

 

2,942,699

 

2,948,907

Less accumulated depreciation

 

(1,256,025)

 

(1,165,943)

Property and equipment, net

 

1,686,674

 

1,782,964

Operating lease right-of-use assets

 

117,397

 

149,656

Other assets, net

 

35,251

 

40,013

Total assets

$

2,347,299

$

2,498,278

LIABILITIES AND SHAREHOLDERS' EQUITY

 

  

 

  

Current liabilities:

 

  

 

  

Accounts payable

$

75,162

$

50,022

Accrued liabilities

 

85,240

 

87,035

Current maturities of long-term debt

 

42,825

 

90,651

Current operating lease liabilities

 

55,051

 

51,599

Total current liabilities

 

258,278

 

279,307

Long-term debt

 

261,668

 

258,912

Operating lease liabilities

 

64,423

 

101,009

Deferred tax liabilities

 

91,785

 

110,821

Other non-current liabilities

 

1,481

 

3,878

Total liabilities

 

677,635

 

753,927

Commitments and contingencies

Redeemable noncontrolling interests

 

 

3,855

Shareholders’ equity:

 

  

 

  

Common stock, no par, 240,000 shares authorized, 150,876 and 150,341 shares issued, respectively

 

1,290,697

 

1,327,592

Retained earnings

 

437,065

 

464,524

Accumulated other comprehensive loss

 

(58,098)

 

(51,620)

Total shareholders’ equity

 

1,669,664

 

1,740,496

Total liabilities, redeemable noncontrolling interests and shareholders’ equity

$

2,347,299

$

2,498,278

The accompanying notes are an integral part of these condensed consolidated financial statements.

3

HELIX ENERGY SOLUTIONS GROUP, INC. AND SUBSIDIARIES

CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS

(UNAUDITED)

(in thousands, except per share amounts)

Three Months Ended

Nine Months Ended

September 30, 

September 30, 

    

2021

    

2020

    

2021

    

2020

Net revenues

$

180,716

$

193,490

$

506,072

$

573,658

Cost of sales

 

177,716

 

158,862

 

485,318

 

507,444

Gross profit

 

3,000

 

34,628

 

20,754

 

66,214

Gain (loss) on disposition of assets, net

 

15

 

440

 

(631)

 

913

Goodwill impairment

 

 

 

 

(6,689)

Selling, general and administrative expenses

 

(13,346)

 

(16,053)

 

(41,950)

 

(48,256)

Income (loss) from operations

 

(10,331)

 

19,015

 

(21,827)

 

12,182

Net interest expense

 

(5,928)

 

(7,598)

 

(17,900)

 

(20,407)

Gain (loss) on extinguishment of long-term debt

 

(124)

 

9,239

 

(124)

 

9,239

Other income (expense), net

 

(4,015)

 

8,824

 

(1,438)

 

(3,672)

Royalty income and other

 

297

 

197

 

2,603

 

2,493

Income (loss) before income taxes

 

(20,101)

 

29,677

 

(38,686)

 

(165)

Income tax provision (benefit)

 

(1,058)

 

5,232

 

(2,910)

 

(16,132)

Net income (loss)

 

(19,043)

 

24,445

 

(35,776)

 

15,967

Net loss attributable to redeemable noncontrolling interests

 

 

(54)

 

(146)

 

(2,044)

Net income (loss) attributable to common shareholders

$

(19,043)

$

24,499

$

(35,630)

$

18,011

Earnings (loss) per share of common stock:

 

  

 

  

 

  

 

  

Basic

$

(0.13)

$

0.16

$

(0.24)

$

0.10

Diluted

$

(0.13)

$

0.16

$

(0.24)

$

0.10

Weighted average common shares outstanding:

 

  

 

  

 

  

 

  

Basic

 

150,088

 

149,032

 

150,018

 

148,956

Diluted

 

150,088

 

149,951

 

150,018

 

149,824

The accompanying notes are an integral part of these condensed consolidated financial statements.

4

HELIX ENERGY SOLUTIONS GROUP, INC. AND SUBSIDIARIES

CONDENSED CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME

(UNAUDITED)

(in thousands)

Three Months Ended

Nine Months Ended

September 30, 

September 30, 

    

2021

    

2020

2021

    

2020

Net income (loss)

$

(19,043)

$

24,445

$

(35,776)

 

$

15,967

Other comprehensive income (loss), net of tax:

 

  

 

  

 

  

 

  

Net unrealized loss on hedges arising during the period

 

 

 

 

(95)

Reclassifications into earnings

 

 

 

 

452

Income taxes on hedges

 

 

 

 

(72)

Net change in hedges, net of tax

 

 

 

 

285

Foreign currency translation gain (loss)

 

(13,447)

 

19,426

 

(6,478)

 

(16,057)

Other comprehensive income (loss), net of tax

 

(13,447)

 

19,426

 

(6,478)

 

(15,772)

Comprehensive income (loss)

 

(32,490)

 

43,871

 

(42,254)

 

195

Less comprehensive income (loss) attributable to redeemable noncontrolling interests:

 

  

 

  

 

  

 

  

Net loss

 

 

(54)

 

(146)

 

(2,044)

Foreign currency translation gain (loss)

 

 

133

 

48

 

(115)

Comprehensive income (loss) attributable to redeemable noncontrolling interests

 

 

79

 

(98)

 

(2,159)

Comprehensive income (loss) attributable to common shareholders

$

(32,490)

$

43,792

$

(42,156)

 

$

2,354

The accompanying notes are an integral part of these condensed consolidated financial statements.

5

HELIX ENERGY SOLUTIONS GROUP, INC. AND SUBSIDIARIES

CONDENSED CONSOLIDATED STATEMENTS OF SHAREHOLDERS’ EQUITY

(UNAUDITED)

(in thousands)

Accumulated

 

Other

Total

Redeemable

Common Stock

Retained

Comprehensive

Shareholders’

Noncontrolling

    

Shares

    

Amount

    

Earnings

    

Loss

    

Equity

    

Interests

Balance, June 30, 2021

 

150,787

$

1,288,603

$

456,108

$

(44,651)

$

1,700,060

 

$

Net loss

 

 

 

(19,043)

 

 

(19,043)

 

Foreign currency translation adjustments

 

 

 

 

(13,447)

 

(13,447)

 

Activity in company stock plans, net and other

 

89

 

262

 

 

 

262

 

Share-based compensation

 

 

1,832

 

 

 

1,832

 

Balance, September 30, 2021

 

150,876

$

1,290,697

$

437,065

$

(58,098)

$

1,669,664

 

$

Accumulated

 

Other

Total

Redeemable

Common Stock

Retained

Comprehensive

Shareholders’

Noncontrolling

    

Shares

    

Amount

    

Earnings

    

Loss

    

Equity

    

Interests

Balance, June 30, 2020

 

150,040

$

1,318,531

$

436,107

$

(99,938)

$

1,654,700

 

$

3,372

Net income (loss)

 

 

 

24,499

 

 

24,499

 

(54)

Foreign currency translation adjustments

 

 

 

 

19,426

 

19,426

 

133

Accretion of redeemable noncontrolling interests

 

 

 

(128)

 

 

(128)

 

128

Equity component of convertible senior notes

33,336

33,336

Re-acquisition of equity component of convertible senior notes

(18,006)

(18,006)

Capped call transactions

(10,625)

(10,625)

Activity in company stock plans, net and other

 

96

 

193

 

 

 

193

 

Share-based compensation

 

 

2,091

 

 

 

2,091

 

Balance, September 30, 2020

 

150,136

$

1,325,520

$

460,478

$

(80,512)

$

1,705,486

 

$

3,579

The accompanying notes are an integral part of these condensed consolidated financial statements.

6

HELIX ENERGY SOLUTIONS GROUP, INC. AND SUBSIDIARIES

CONDENSED CONSOLIDATED STATEMENTS OF SHAREHOLDERS’ EQUITY

(UNAUDITED)

(in thousands)

Accumulated

 

Other

Total

Redeemable

Common Stock

Retained

Comprehensive

Shareholders’

Noncontrolling

    

Shares

    

Amount

    

Earnings

    

Loss

    

Equity

    

Interests

Balance, December 31, 2020

 

150,341

$

1,327,592

$

464,524

$

(51,620)

$

1,740,496

 

$

3,855

Net loss

 

 

 

(35,630)

 

 

(35,630)

 

(146)

Cumulative-effect adjustments upon adoption of ASU No. 2020-06

 

 

(41,456)

 

6,682

 

 

(34,774)

 

Foreign currency translation adjustments

 

 

 

 

(6,478)

 

(6,478)

 

48

Accretion of redeemable noncontrolling interests

 

 

 

1,489

 

 

1,489

 

(1,489)

Acquisition of redeemable noncontrolling interests

 

 

 

 

 

 

(2,268)

Activity in company stock plans, net and other

 

535

 

(1,052)

 

 

 

(1,052)

 

Share-based compensation

 

 

5,613

 

 

 

5,613

 

Balance, September 30, 2021

 

150,876

$

1,290,697

$

437,065

$

(58,098)

$

1,669,664

 

$

Accumulated

 

Other

Total

Redeemable

Common Stock

Retained

Comprehensive

Shareholders’

Noncontrolling

    

Shares

    

Amount

    

Earnings

    

Loss

    

Equity

    

Interests

Balance, December 31, 2019

 

148,888

$

1,318,961

$

445,370

$

(64,740)

$

1,699,591

 

$

3,455

Net income (loss)

 

 

 

18,011

 

 

18,011

 

(2,044)

Credit losses recognized in retained earnings upon adoption of ASU No. 2016-13

 

 

 

(620)

 

 

(620)

 

Foreign currency translation adjustments

 

 

 

 

(16,057)

 

(16,057)

 

(115)

Unrealized gain on hedges, net of tax

 

 

 

 

285

 

285

 

Accretion of redeemable noncontrolling interests

 

 

 

(2,283)

 

 

(2,283)

 

2,283

Equity component of convertible senior notes

33,336

33,336

Re-acquisition of equity component of convertible senior notes

(18,006)

(18,006)

Capped call transactions

(10,625)

(10,625)

Activity in company stock plans, net and other

 

1,248

 

(4,320)

 

 

 

(4,320)

 

Share-based compensation

 

 

6,174

 

 

 

6,174

 

Balance, September 30, 2020

 

150,136

$

1,325,520

$

460,478

$

(80,512)

$

1,705,486

 

$

3,579

The accompanying notes are an integral part of these condensed consolidated financial statements.

7

HELIX ENERGY SOLUTIONS GROUP, INC. AND SUBSIDIARIES

CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS

(UNAUDITED)

(in thousands)

Nine Months Ended

September 30, 

    

2021

    

2020

Cash flows from operating activities:

 

  

  

Net income (loss)

$

(35,776)

$

15,967

Adjustments to reconcile net income (loss) to net cash provided by operating activities:

 

 

  

Depreciation and amortization

 

106,226

 

99,552

Goodwill impairment

 

 

6,689

Amortization of debt discounts

 

 

5,094

Amortization of debt issuance costs

 

2,596

 

2,401

Share-based compensation

 

5,783

 

6,394

Deferred income taxes

 

(10,375)

 

3,901

(Gain) loss on disposition of assets, net

 

631

 

(913)

(Gain) loss on extinguishment of long-term debt

 

124

 

(9,239)

Unrealized gain on derivative contracts, net

 

 

(601)

Unrealized foreign currency loss

 

2,041

 

2,891

Changes in operating assets and liabilities:

 

  

 

  

Accounts receivable, net

 

(6,631)

 

(35,276)

Other current assets

16,604

(28,036)

Income tax payable, net of income tax receivable

 

20,912

 

(26,342)

Accounts payable and accrued liabilities

 

28,577

 

32,075

Other, net

 

(9,460)

 

(15,929)

Net cash provided by operating activities

 

121,252

 

58,628

Cash flows from investing activities:

 

  

 

  

Capital expenditures

 

(7,386)

 

(19,193)

Proceeds from sale of assets

51

938

Net cash used in investing activities

 

(7,335)

 

(18,255)

Cash flows from financing activities:

 

  

 

  

Proceeds from convertible senior notes

 

 

200,000

Repayment of convertible senior notes

 

 

(183,150)

Repayment of Term Loan

 

(29,826)

 

(2,625)

Repayment of Nordea Q5000 Loan

 

(53,572)

 

(26,786)

Repayment of MARAD Debt

 

(7,560)

 

(7,200)

Capped call transactions

 

 

(10,625)

Debt issuance costs

 

(1,209)

 

(7,075)

Acquisition of redeemable noncontrolling interests

(2,268)

Payments related to tax withholding for share-based compensation

 

(1,878)

 

(5,161)

Proceeds from issuance of ESPP shares

 

654

 

622

Net cash used in financing activities

 

(95,659)

 

(42,000)

Effect of exchange rate changes on cash and cash equivalents and restricted cash

 

(747)

 

(1,600)

Net increase (decrease) in cash and cash equivalents and restricted cash

 

17,511

 

(3,227)

Cash and cash equivalents and restricted cash:

 

  

 

  

Balance, beginning of year

 

291,320

 

262,561

Balance, end of period

$

308,831

$

259,334

The accompanying notes are an integral part of these condensed consolidated financial statements.

8

HELIX ENERGY SOLUTIONS GROUP, INC. AND SUBSIDIARIES

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (UNAUDITED)

Note 1 — 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”). 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 2020 Annual Report on Form 10-K (our “2020 Form 10-K”) with the exception of the impact of early adopting Accounting Standards Update (“ASU”) No. 2020-06 on a modified retrospective basis beginning January 1, 2021 (see below). 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, unless otherwise disclosed, are of normal recurring nature, that we believe are necessary for a fair presentation of the condensed consolidated balance sheets, statements of operations, statements of comprehensive income, statements of shareholders’ equity and statements of cash flows, as applicable. The operating results for the three- and nine-month periods ended September 30, 2021 are not necessarily indicative of the results that may be expected for the year ending December 31, 2021. Our balance sheet as of December 31, 2020 included herein has been derived from the audited balance sheet as of December 31, 2020 included in our 2020 Form 10-K. These unaudited condensed consolidated financial statements should be read in conjunction with the audited annual consolidated financial statements and notes thereto included in our 2020 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

In August 2020, the Financial Accounting Standards Board issued ASU No. 2020-06, “Accounting for Convertible Instruments and Contracts in an Entity's Own Equity,” which simplifies the accounting for certain financial instruments with characteristics of liabilities and equity, including convertible instruments and contracts in an entity’s own equity. Among other changes, this ASU removes from GAAP the requirement to separate certain convertible instruments, such as our Convertible Senior Notes Due 2022, Convertible Senior Notes Due 2023 and Convertible Senior Notes Due 2026 (Note 5), into liability and equity components. Consequently, those convertible instruments will be accounted for in their entirety as liabilities measured at their amortized cost. We elected to early adopt ASU No. 2020-06 on a modified retrospective basis beginning January 1, 2021. The adoption of this ASU increased our long-term debt and decreased the reported value of our common stock by $44.1 million and $41.5 million, respectively, as we reclassified the conversion features associated with our various outstanding convertible senior notes from equity to long-term debt. The adoption of this ASU also increased our retained earnings and decreased deferred tax liabilities by $6.7 million and $9.3 million, respectively. Subsequent to its adoption, interest expense associated with our outstanding convertible senior notes will decrease as there will no longer be debt discounts to amortize. Additionally, the ASU no longer permits the treasury stock method for convertible instruments and instead requires the application of the if-converted method to calculate the impact of our convertible senior notes on diluted earnings per share (“EPS”).

We do not expect any other recently issued accounting standards to have a material impact on our financial position, results of operations or cash flows when they become effective.

9

Note 2 — 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. Traditionally, our services have covered the lifecycle of an offshore oil or gas field. In recent years, we have seen an increasing demand for our services from the offshore renewable energy market. We provide services primarily in deepwater in the Gulf of Mexico, Brazil, North Sea, Asia Pacific and West Africa regions. Our North Sea operations are subject to seasonal changes in demand, which generally peaks in the summer months and declines in the winter months. Our services are segregated into three reportable business segments: Well Intervention, Robotics and Production Facilities (Note 10).

Our Well Intervention segment provides services enabling our customers to safely access offshore wells for the purpose of performing production enhancement or decommissioning operations. Our well intervention vessels include the Q4000, the Q5000, the Q7000, the Seawell, the Well Enhancer, and two chartered monohull vessels, the Siem Helix 1 and the Siem Helix 2. Our well intervention equipment includes intervention riser systems (“IRSs”), subsea intervention lubricators (“SILs”) and the Riserless Open-water Abandonment Module (“ROAM”), some of which we provide on a stand-alone basis. Our well intervention segment also includes our ownership interest in Subsea Technologies Group Limited (“STL”). Beginning in May 2019 we held a 70% controlling interest in STL, and in June 2021 we acquired the remaining 30% interest.

Our Robotics segment provides offshore construction, trenching, seabed clearance, inspection, repair and maintenance services to both the oil and gas and the renewable energy markets globally. Our Robotics services also complement well intervention services. Our Robotics segment includes remotely operated vehicles (“ROVs”), trenchers, a ROVDrill and two robotics support vessels under long-term charter, the Grand Canyon II and the Grand Canyon III, as well as spot vessels as needed.

Our Production Facilities segment includes the Helix Producer I (the “HP I”), a ship-shaped dynamically positioned floating production vessel, the Helix Fast Response System (the “HFRS”) and our ownership of oil and gas properties. All of our current Production Facilities activities are located in the Gulf of Mexico.

Note 3 — Details of Certain Accounts

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

September 30, 

December 31, 

    

2021

    

2020

Contract assets (Note 7)

$

367

 

$

2,446

Prepaids

 

18,301

 

15,904

Deferred costs (Note 7)

 

8,792

 

23,522

Income tax receivable

 

 

20,787

Other receivable (Note 11)

 

28,184

 

29,782

Other

 

6,798

 

9,651

Total other current assets

$

62,442

 

$

102,092

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

September 30, 

December 31, 

    

2021

    

2020

Deferred recertification and dry dock costs, net

$

16,401

 

$

21,464

Deferred costs (Note 7)

 

543

 

861

Charter deposit (1)

 

12,544

 

12,544

Intangible assets with finite lives, net

 

3,579

 

3,809

Other

 

2,184

 

1,335

Total other assets, net

$

35,251

 

$

40,013

(1)This amount is deposited with the owner of the Siem Helix 2 to offset certain payment obligations associated with the vessel at the end of the charter term.

10

Accrued liabilities consist of the following (in thousands):

September 30, 

December 31, 

    

2021

    

2020

Accrued payroll and related benefits

$

26,443

 

$

24,768

Accrued interest

2,760

7,098

Income tax payable

 

581

 

Deferred revenue (Note 7)

 

9,425

 

8,140

Asset retirement obligations (Note 11)

 

29,018

 

30,913

Other

 

17,013

 

16,116

Total accrued liabilities

$

85,240

 

$

87,035

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

September 30, 

December 31, 

    

2021

    

2020

Deferred revenue (Note 7)

$

762

 

$

1,869

Other

 

719

 

2,009

Total other non-current liabilities

$

1,481

 

$

3,878

Note 4 — Leases

We charter vessels and lease facilities and equipment under non-cancelable contracts that expire on various dates through 2031. We also sublease some of our facilities under non-cancelable sublease agreements.

The following table details the components of our lease cost (in thousands):

Three Months Ended

Nine Months Ended

September 30, 

September 30, 

    

2021

    

2020

    

2021

    

2020

Operating lease cost

$

14,336

$

16,132

$

45,391

 

$

48,561

Variable lease cost

 

4,298

 

4,204

 

11,417

 

11,256

Short-term lease cost

 

6,258