Business Segment Information

3 Months Ended

Mar. 31, 2025

Business Segment Information

Business Segment Information

Note 11 — Business Segment Information

We have four reportable business segments: Well Intervention, Robotics, Shallow Water Abandonment and Production Facilities. Our U.S., U.K. and Brazil Well Intervention operating segments are aggregated into the Well Intervention segment for financial reporting purposes. These reportable segments are strategic business units that utilize different mix of vessels and/or equipment to perform different types of services. All material intercompany transactions between the segments have been eliminated. See Note 2 for more information on our business segments.

Our chief operating decision maker (“CODM”) is the chief operating officer. The CODM uses segment operating income or loss as the measure of segment profit or loss to evaluate segment performance by comparing the results of each segment with its annual budgeted amounts and monthly forecasts as well as the results of other segments. The CODM also uses segment operating income or loss to allocate company resources (including employees, property, and financial resources) to each segment. Information about our segment revenues and our measure of segment profit or loss is shown as follows (in thousands):

	Well				Shallow Water		Production
	Intervention		Robotics		Abandonment		Facilities		Total
Three months ended March 31, 2025
External revenues	$	198,374	$	43,087	$	16,766	$	19,837	$	278,064
Intersegment revenues (1)		—		7,955		52		—		8,007
Segment revenues		198,374		51,042		16,818		19,837		286,071
Elimination of intersegment revenues										(8,007)
Total consolidated net revenues									$	278,064
Less (2):
Direct cost of revenues		(170,033)		(41,635)		(25,539)		(12,264)
Operations support		(4,019)		(1,391)		(2,861)		(113)
Selling, general and administrative expenses		(4,352)		(2,669)		(1,859)		(516)
Segment operating income (loss)	$	19,970	$	5,347	$	(13,441)	$	6,944	$	18,820
Three months ended March 31, 2024
External revenues	$	205,207	$	40,081	$	26,771	$	24,152	$	296,211
Intersegment revenues (1)		6,093		10,228		82		—		16,403
Segment revenues		211,300		50,309		26,853		24,152		312,614
Elimination of intersegment revenues										(16,403)
Total consolidated net revenues									$	296,211
Less (2):
Direct cost of revenues		(184,193)		(40,713)		(33,224)		(25,315)
Operations support		(3,963)		(1,413)		(3,392)		(143)
Selling, general and administrative expenses		(4,465)		(2,733)		(2,515)		(237)
Other segment items (3)		—		—		(150)		—
Segment operating income (loss)	$	18,679	$	5,450	$	(12,428)	$	(1,543)	$	10,158

(1) Intersegment amounts are derived primarily from equipment and services provided to other business segments. Beginning in 2024, certain intersegment revenues of Well Intervention are no longer evaluated by the CODM in his assessment of the segment’s results as those revenues are pass-through amounts related to non-core services. For the three-month period ended March 31, 2024, $5.2 million have been removed from Well Intervention segment revenues and related intersegment eliminations. This change has no impact on our segment profit or our consolidated revenues and operating income (loss).

(2) The significant expense categories and amounts align with the segment-level information that is regularly provided to the CODM. Intersegment expenses are included within the amounts shown.

(3) Other segment items relate to gain (loss) on disposition of assets, net.

The table below provides a reconciliation of segment profit to income (loss) before income taxes (in thousands):

	Three Months Ended
	March 31,
	2025		2024
Reconciliation of segment profit —
Segment operating income	$	18,820	$	10,158
Corporate, eliminations and other		(10,648)		(11,434)
Net interest expense		(5,706)		(5,477)
Losses related to convertible senior notes		—		(20,922)
Other non-operating expense, net		1,059		(310)
Income (loss) before income taxes	$	3,525	$	(27,985)

The following items are also regularly provided to the CODM (in thousands):

	Three Months Ended
	March 31,
	2025		2024
Capital expenditures (1) —
Well Intervention	$	2,968	$	2,216
Robotics		1,199		757
Shallow Water Abandonment		214		506
Production Facilities		—		—
Corporate, eliminations and other		107		126
Total	$	4,488	$	3,605
Depreciation and amortization (2) —
Well Intervention	$	30,591	$	31,309
Robotics		1,369		2,305
Shallow Water Abandonment		5,678		5,497
Production Facilities		4,749		7,138
Corporate and eliminations		95		104
Total	$	42,482	$	46,353

(1) Represent cash paid principally for the acquisition, construction, upgrade, modification and refurbishment of long-lived property and equipment.

(2) Represents an aggregate of depreciation and amortization expense related to property and equipment and deferred recertification and dry dock costs, which is included within the segment expense captions “Direct cost of revenues” and “Selling, general and administrative expenses” as well as the line item caption “Corporate, eliminations and other” presented above.

The CODM does not regularly review segment asset information as management’s focus is on operating performance and cash flow generation. As such, we have omitted the disclosure of total assets by segment.