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UNITED STATES SECURITIES AND EXCHANGE COMMISSION
 Washington, D. C. 20549
 FORM 10-Q
 þ
    
    QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15 (d) OF THE
SECURITIES EXCHANGE ACT OF 1934
 For the quarterly period ended March 31, 2007
 OR
 o
    
    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: 0-21086
 Global Industries, Ltd.
  Louisiana
    
    72-1212563(State or other jurisdiction of incorporation or organization)
    
    (I.R.S. Employer Identification No.)8000 Global DriveCarlyss, Louisiana
    
    70665(Address of principal executive offices)
    
    (Zip Code)
 (337) 583-5000
 None
  þ o
  þ o o
 o þ




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##### 



Global Industries, Ltd.
Index  Form 10-Q
 Part I  Financial InformationItem 1. Financial Statements  UnauditedReport of Independent Registered Public Accounting Firm
    
    
    3Condensed Consolidated Balance Sheets
    
    
    4Condensed Consolidated Statements of Operations
    
    
    5Condensed Consolidated Statements of Cash Flows
    
    
    6Notes to Condensed Consolidated Financial Statements
    
    
    7Item 2. Managements Discussion and Analysis of Financial Condition
and Results of Operations
    
    
    14Item 3. Quantitative and Qualitative Disclosures About Market Risk
    
    
    23Item 4. Controls and Procedures
    
    
    24Part II  Other InformationItem 1. Legal Proceedings
    
    
    25Item 6. Exhibits
    
    
    25Signature
    
    
    26Letter re Unaudited Interim Financial InformationCertification of CEO Pursuant to Section 302Certification of CFO Pursuant to Section 302Certification of CEO Pursuant to Section 906Certification of CFO Pursuant to Section 906




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PART I  FINANCIAL INFORMATION
 
 Item 1. Financial Statements.
 
  
    Share-Based Payment,
  
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GLOBAL INDUSTRIES, LTD.
 
 CONDENSED CONSOLIDATED BALANCE SHEETS
 (In thousands)
 (Unaudited)
 March 31,
    
    
    December 31,2007
    
    
    2006ASSETSCurrent AssetsCash and cash equivalents
    
    $
    426,391
    
    
    $
    352,178Restricted cash
    
    
    1,086
    
    
    
    1,073Accounts receivable  net of allowance of $10,623 for 2007
and $17,203 for 2006
    
    
    223,917
    
    
    
    197,258Unbilled work on uncompleted contracts
    
    
    75,161
    
    
    
    90,980Contract costs incurred not yet recognized
    
    
    9,708
    
    
    
    22,721Deferred income taxes
    
    
    2,801
    
    
    
    2,781Prepaid expenses and other
    
    
    19,016
    
    
    
    16,147Total current assets
    
    
    758,080
    
    
    
    683,138Property and Equipment, net
    
    
    314,879
    
    
    
    316,876Other AssetsAccounts receivable  long-term
    
    
    8,948
    
    
    
    7,731Deferred charges, net
    
    
    23,540
    
    
    
    19,862Deferred income taxes
    
    
    2,711
    
    
    
    2,711Goodwill, net
    
    
    37,388
    
    
    
    37,388Other
    
    
    3,492
    
    
    
    3,291Total other assets
    
    
    76,079
    
    
    
    70,983Total
    
    $
    1,149,038
    
    
    $
    1,070,997LIABILITIES AND SHAREHOLDERS EQUITYCurrent LiabilitiesCurrent maturities of long term debt
    
    $
    3,960
    
    
    $
    3,960Accounts payable
    
    
    122,290
    
    
    
    127,009Employee-related liabilities
    
    
    25,638
    
    
    
    25,643Income taxes payable
    
    
    35,551
    
    
    
    38,092Accrued interest payable
    
    
    656
    
    
    
    2,134Advance billings on uncompleted contracts
    
    
    25,572
    
    
    
    4,557Other accrued liabilities
    
    
    16,859
    
    
    
    21,617Total current liabilities
    
    
    230,526
    
    
    
    223,012Long-Term Debt
    
    
    67,320
    
    
    
    69,300Deferred Income Taxes
    
    
    52,093
    
    
    
    51,714Other Liabilities
    
    
    9,244
    
    
    
    1,406Commitments and Contingencies
    
    
    
    
    
    
    Shareholders EquityCommon stock, $0.01 par value, 150,000 authorized, and 116,719 and
116,252 shares issued and outstanding at 2007 and 2006, respectively
    
    
    1,167
    
    
    
    1,162Additional paid-in capital
    
    
    386,897
    
    
    
    379,297Retained earnings
    
    
    409,702
    
    
    
    353,834Treasury stock at cost, 25 in 2007 and 25 in 2006
    
    
    (644
    )
    
    
    (644
    )Accumulated other comprehensive loss
    
    
    (7,267
    )
    
    
    (8,084
    )Total shareholders equity
    
    
    789,855
    
    
    
    725,565Total
    
    $
    1,149,038
    
    
    $
    1,070,997
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GLOBAL INDUSTRIES, LTD.
 
 CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS
 (In thousands, except per share data)
 (Unaudited)
 Three Months EndedMarch 31,2007
    
    
    2006Revenues
    
    $
    277,009
    
    
    $
    246,267Cost of operations
    
    
    183,535
    
    
    
    198,137Gross profit
    
    
    93,474
    
    
    
    48,130Net gain on asset disposal
    
    
    (1,320
    )
    
    
    (291
    )Selling, general and administrative expenses
    
    
    18,144
    
    
    
    16,286Operating income
    
    
    76,650
    
    
    
    32,135Other (income) expense:Interest expense
    
    
    2,741
    
    
    
    2,036Other income, net
    
    
    (4,885
    )
    
    
    (33
    )Income before taxes
    
    
    78,794
    
    
    
    30,132Income taxes
    
    
    24,338
    
    
    
    11,368Net income
    
    $
    54,456
    
    
    $
    18,764Earnings Per Common ShareBasic
    
    $
    0.47
    
    
    $
    0.16Diluted
    
    $
    0.46
    
    
    $
    0.16Weighted Average Common Shares OutstandingBasic
    
    
    116,583
    
    
    
    114,171Diluted
    
    
    117,982
    
    
    
    115,609
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GLOBAL INDUSTRIES, LTD.
 
 CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS
 (In thousands)
 (Unaudited)
 Three Months EndedMarch 31,2007
    
    
    2006Cash Flows From Operating ActivitiesNet income
    
    $
    54,456
    
    
    $
    18,764Adjustments to reconcile net income to net cash provided
by (used in) operating activities:Depreciation and non-stock-based amortization
    
    
    11,792
    
    
    
    11,775Stock-based compensation expense
    
    
    5,007
    
    
    
    2,680Provision (recovery) for doubtful accounts
    
    
    1,997
    
    
    
    3,774Gain on sale or disposal of property and equipment
    
    
    (1,320
    )
    
    
    (3
    )Deferred income taxes
    
    
    414
    
    
    
    161Excess tax benefits from stock-based compensation
    
    
    (740
    )
    
    
    Other
    
    
    
    
    
    
    (32
    )Changes in operating assets and liabilitiesAccounts receivable, unbilled work, and contract costs
    
    
    (1,041
    )
    
    
    (39,699
    )Prepaid expenses and other
    
    
    (1,815
    )
    
    
    (10,212
    )Accounts payable, employee-related liabilities and other
accrued liabilities
    
    
    16,297
    
    
    
    17,709Deferred drydock costs incurred
    
    
    (6,354
    )
    
    
    (6,968
    )Net cash provided by (used in) operating activities
    
    
    78,693
    
    
    
    (2,051
    )Cash Flows From Investing ActivitiesProceeds from the sale of assets
    
    
    3,652
    
    
    
    3Additions to property and equipment
    
    
    (8,737
    )
    
    
    (13,095
    )Additions to restricted cash
    
    
    (13
    )
    
    
    Additions to deferred charges
    
    
    
    
    
    
    (68
    )Net cash used in investing activities
    
    
    (5,098
    )
    
    
    (13,160
    )Cash Flows From Financing ActivitiesProceeds from the sale of common stock, net
    
    
    1,858
    
    
    
    2,865Excess tax benefits from stock-based compensation
    
    
    740
    
    
    
    Repayment of long-term debt
    
    
    (1,980
    )
    
    
    (1,980
    )Net cash provided by financing activities
    
    
    618
    
    
    
    885CashIncrease (decrease)
    
    
    74,213
    
    
    
    (14,326
    )Beginning of period
    
    
    352,178
    
    
    
    128,615End of period
    
    $
    426,391
    
    
    $
    114,289Supplemental DisclosuresInterest paid
    
    $
    2,895
    
    
    $
    3,062Income taxes paid
    
    $
    27,080
    
    
    $
    1,928
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Global Industries, Ltd.
 
 Notes to Condensed Consolidated Financial Statements (Unaudited)
 1.
    
    Basis of PresentationThe accompanying unaudited Condensed Consolidated Financial
Statements include the accounts of Global Industries, Ltd. and its subsidiaries (the
Company, we, us, or our).In the opinion of management of the Company, all adjustments (such adjustments consisting
only of a normal and recurring nature) necessary for a fair presentation of the operating
results for the interim periods presented have been included in the unaudited Condensed
Consolidated Financial Statements. Operating results for the period ended March 31, 2007
are not necessarily indicative of the results that may be expected for the year ending
December 31, 2007. These financial statements should be read in conjunction with our
audited consolidated financial statements and related notes thereto included in our Annual
Report on Form 10-K for the year ended December 31, 2006.2.
    
    Accounting Change  Recognizing Uncertain Income Tax Positions In July 2006, the Financial
Accounting Standards Board (FASB) issued Interpretation No. 48, Accounting for Uncertainty in
Income Taxes  an interpretation of FASB Statement No. 109(FIN 48). This interpretation
prescribes a recognition threshold and measurement attribute for tax positions taken or
expected to be taken on a tax return. The Company adopted the provisions of FIN 48 on January
1, 2007, which requires a cumulative effect of accounting change to the opening balance of
retained earnings upon adoption. Accordingly, the Company recognized a $1.4 million
cumulative adjustment for such tax positions as an increase to the opening balance of retained
earnings on January 1, 2007, as reflected in the accompanying financial statements for the
three months ended March 31, 2007. Please see Note 7 for additional information regarding the
adoption of FIN 48.3.
    
    Receivables Receivables are presented in the following balance sheet accounts: (1) accounts
receivable, (2) accounts receivable  long term, (3) unbilled work on uncompleted contracts,
and (4) contract costs incurred not yet recognized. The balance of accounts receivable
primarily consists of work which has been billed to customers. Accounts receivableat March
31, 2007 included $3.7 million which was not immediately collectible due to contractually
specified retainage requirements. This amount is expected to be collected within the next
twelve months. Accounts receivableat December 31, 2006 included $4.4 million which was
related to retainage. Allowance for doubtful accounts was reduced by $6.6 million during the
first quarter of 2007 primarily due to the recovery of disputed receivables that were
previously reserved at December 31, 2006.The balance of accounts receivable  long-termat March 31, 2007 and December 31, 2006
represents amounts related to retainage which were not expected to be collected within the
next twelve months.The balance of unbilled work on uncompleted contractsincludes (a) amounts receivable from
customers for work that has not yet been billed pursuant to contractually specified
milestone billing requirements and (b) revenue accruals.The claims and unapproved change orders included in our receivables amounted to $26.6
million at March 31, 2007 and $21.4 million at December 31, 2006.
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Costs and Estimated Earnings on Uncompleted Contracts
 March 31,
    
    
    December 31,2007
    
    
    2006(In thousands)Costs incurred and recognized on uncompleted contracts
    
    $
    698,399
    
    
    $
    663,381Estimated earnings
    
    
    248,041
    
    
    
    197,693Costs and estimated earnings on uncompleted contracts
    
    
    946,440
    
    
    
    861,074Less: Billings to date
    
    
    (921,007
    )
    
    
    (796,353
    )25,433
    
    
    
    64,721Plus: Accrued revenue
    
    
    24,156
    
    
    
    21,702$
    49,589
    
    
    $
    86,423Included in accompanying balance sheets under the
following captions:Unbilled work on uncompleted contracts
    
    $
    75,161
    
    
    $
    90,980Advance billings on uncompleted contracts
    
    
    (25,572
    )
    
    
    (4,557
    )$
    49,589
    
    
    $
    86,423
 4.
    
    Property and Equipment Property and equipment are stated at cost less accumulated
depreciation. Expenditures for property and equipment and items that substantially increase
the useful lives of existing assets are capitalized at cost and depreciated. Routine
expenditures for repairs and maintenance are expensed as incurred. Except for major
construction vessels that are depreciated on the units-of-production (UOP) method over
estimated vessel operating days, depreciation is provided utilizing the straight-line method
over the estimated useful lives of the assets. The UOP method is based on vessel utilization
days and more closely correlates depreciation expense to vessel revenue. In addition, the UOP
method provides for a minimum depreciation floor in periods with nominal vessel use. In
general, less depreciation expense would be recorded in periods of high utilization and
revenues and more depreciation expense would be recorded in periods of low vessel utilization
and revenues if we applied only a straight-line depreciation method. Property and equipment
at March 31, 2007 and December 31, 2006 is presented net of $292.6 million and $286.0 million
of accumulated depreciation, respectively.
 5.
    
    Goodwill Goodwill represents cost in excess of the fair value of net assets acquired in a
business acquisition and is tested on an annual basis or when circumstances indicate that
impairment may exist. The carrying amount of goodwill as of March 31, 2007 and December 31,
2006 was approximately $37.4 million and is primarily attributable to our Latin America
segment.
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6.
    
    Other income, net The table below sets forth the significant components of the balance of
other expense or income.
 Three Months EndedMarch 31,2007
    
    
    2006(in thousands)Interest income
    
    $
    (5,045
    )
    
    $
    (1,201
    )Foreign exchange (gains) and losses, net
    
    
    296
    
    
    
    1,281Derivative income, net
    
    
    (236
    )
    
    
    All other, net
    
    
    100
    
    
    
    (113
    )Other income, net
    
    $
    (4,885
    )
    
    $
    (33
    )
 Interest income was primarily derived from investments in cash and cash equivalents and/or
auction rate securities. Foreign exchange gains and losses are the result of periodic
revaluation of relatively small foreign currency cash balances, accounts receivable,
accounts payable, and/or other such accounts denominated in a foreign currency. Derivative
income resulted from the recognition of settlements and changes in value with respect to
forward exchange contracts denominated in Euros. For more information regarding our
derivative financial instruments, please see Note 9. The amount shown as all other is
comprised of various small items spread throughout our segments.7.
    
    Income Taxes As a result of implementing FIN 48 on January 1, 2007, the Company
recognized a $1.4 million reduction of taxes due for unrecognized foreign tax benefits which
was accounted for as an increase to the January 1, 2007 balance of retained earnings. Also on
January 1, 2007, the Company had:
 
    
    unrecognized tax benefits of $11.7 million, all of which would impact the
Companys effective tax rate, if recognized;
    
    $5.7 million of accrued income tax for uncertain tax positions; and
    
    $4.6 million of interest expense and penalties related to income taxes. The
Company recognizes interest accrued for income taxes as interest expense and
penalties are reflected in other income, net.
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8.
    
    Commitments and ContingenciesContingencies Pursuant to a tax audit of a Nigerian subsidiary of the Company for the
years of 1998 through 2003, tax authorities in Nigeria have issued a payroll tax assessment
against the Company in the amount of $24.4 million. The assessment alleges that certain
persons were working on projects in Nigeria and were subject to payroll taxes which were not
paid. However, due to the specific persons listed in the assessment and the periods of time
which they are alleged to have worked in Nigeria, we believe that this claim is
substantially without merit. We recorded a reserve of $0.1 million for this assessment in
the second quarter of 2006. This reserve reflects managements best estimate for our
Nigerian payroll tax liability associated with this assessment. In October 2006, we
received a formal demand for payment from the Nigerian tax authorities and believe that this
matter will ultimately be resolved by litigation.On February 21, 2007, we received a $29.7 million tax assessment from Algeria for income
tax, business tax and value added tax for 2005 and 2004. We are indemnified by our clients
for the value added tax portion or approximately $10.4 million of the assessment. We accrued
income taxes for the Algerian tax liability in conjunction with the project in 2005 and
2004. We believe the ultimate amount due will not be materially different from the amount
accrued. We have engaged outside tax counsel to assist us in resolving the tax assessment,
and they are presently in discussions with the Algerian tax authorities.In addition to the previously mentioned legal matters, we are a party to legal proceedings
and potential claims arising in the ordinary course of business. We do not believe that
these matters arising in the ordinary course of our business will have a material impact on
our financial statements in future periods.Commitments In the normal course of our business, we provide guarantees and performance,
bid, and payment bonds pursuant to agreements to perform construction services, or in
connection with bidding to obtain such agreements. All of these guarantees are secured by
parent company guarantees. The aggregate amount of these guarantees and bonds at March 31,
2007 was $94.2 million in surety bonds and $59.0 million in bank guarantees/letters of
credit. The surety bonds and bank guarantees/letters of credit were due to expire between
April 2007 and June 2008 and between April 2007 and December 2009, respectively.We estimate that the cost to complete capital expenditure projects in progress at March 31,
2007 will be approximately $44.1 million.9.
    
    Derivative Financial Instruments Due to the international nature of our business operations
and the variable interest rate provisions of our revolving credit facility, we are exposed to
certain risks associated with changes in foreign currency exchange rates and interest rates.
From time to time, we enter into derivative agreements (hedging instruments) to hedge our
exposure to specific foreign currency or interest rate risks (hedged items). We do not use
derivative financial instruments for trading purposes.We did not enter into any new derivative positions during the three months ended March 31,
2007. As discussed in Note 13 of the Notes to Consolidated Financial Statements included in
our Annual Report on Form 10-K for the year ended December 31, 2006, we record in earnings
the changes in fair market value and cash settlements with respect to our Euro forward
exchange agreements as they were previously determined to be ineffective hedges, and we
account for our Norwegian Kroner forward exchange agreements as cash flow hedges, as defined
by Statement of Financial Accounting Standards (SFAS) No. 133, Accounting for Derivative
Instruments and Hedging Activities.
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The Norwegian Kroner hedges were effective for the three months ended March 31, 2007 and
2006. As of March 31, 2007, the Company had $1.7 million in unrealized gains, net of tax,
in accumulated other comprehensive income related to forward exchange hedges. Included in
this total is approximately $0.6 million in net unrealized gains which are expected to be
realized in earnings during the twelve months following March 31, 2007.10.
    
    Other Comprehensive Income Comprehensive income includes changes in the fair value of
certain derivative financial instruments which qualify for hedge accounting treatment. The
differences between net income and comprehensive income for each of the comparable periods
presented are as follows.
 Three Months EndedMarch 31,2007
    
    
    2006(in thousands)Net Income
    
    $
    54,456
    
    
    $
    18,764Unrealized net gain on derivatives
    
    
    1,257
    
    
    
    446Deferred tax benefit
    
    
    (440
    )
    
    
    (156
    )Comprehensive Income
    
    $
    55,273
    
    
    $
    19,054
  AccumulatedAccumulated
    
    
    Foreign
    
    
    OtherTranslation
    
    
    Exchange
    
    
    ComprehensiveAdjustment
    
    
    Agreements
    
    
    Income (Loss)(in thousands)Balance at December 31, 2006
    
    $
    (8,978
    )
    
    $
    894
    
    
    
    (8,084
    )Change in value
    
    
    
    
    
    
    885
    
    
    
    885Reclassification of gain to earnings
    
    
    
    
    
    
    (68
    )
    
    
    (68
    )Balance at March 31, 2007
    
    $
    (8,978
    )
    
    
    1,711
    
    
    
    (7,267
    )
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11.
    
    Segment Information The following table presents information about the profit or loss of
each of the Companys six reportable segments: Gulf of Mexico Offshore Construction
Division (OCD), Gulf of Mexico Diving, Latin America, West Africa, Middle East (including
the Mediterranean and India), and Asia Pacific. The information contains certain
allocations of corporate expenses that we deem reasonable and appropriate for the evaluation
of results of operations.
 Three Months EndedMarch 31,2007
    
    
    2006(in thousands)Total segment revenuesGulf of Mexico OCD
    
    $
    16,862
    
    
    $
    59,992Gulf of Mexico Diving
    
    
    29,398
    
    
    
    29,461Latin America
    
    
    101,848
    
    
    
    62,494West Africa
    
    
    51,285
    
    
    
    33,081Middle East
    
    
    74,856
    
    
    
    72,271Asia Pacific
    
    
    9,604
    
    
    
    5,348Subtotal
    
    $
    283,853
    
    
    $
    262,647Intersegment eliminationsGulf of Mexico OCD
    
    $
    (2,137
    )
    
    $
    Gulf of Mexico Diving
    
    
    (1,768
    )
    
    
    (15,745
    )Latin America
    
    
    
    
    
    
    (635
    )Middle East
    
    
    (2,464
    )
    
    
    Asia Pacific
    
    
    (475
    )
    
    
    Subtotal
    
    $
    (6,844
    )
    
    $
    (16,380
    )Consolidated revenues
    
    $
    277,009
    
    
    $
    246,267Income (loss) before taxesGulf of Mexico OCD
    
    $
    (754
    )
    
    $
    11,631Gulf of Mexico Diving
    
    
    10,803
    
    
    
    7,930Latin America
    
    
    53,562
    
    
    
    (1,112
    )West Africa
    
    
    (209
    )
    
    
    4,083Middle East
    
    
    9,379
    
    
    
    11,921Asia Pacific
    
    
    6,013
    
    
    
    (3,849
    )Over (under) allocated corporate expenses
    
    
    
    
    
    
    (472
    )Consolidated income before taxes
    
    $
    78,794
    
    
    $
    30,132
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12.
    
    Earnings Per Share The following table presents the reconciliation between basic shares
and diluted shares (in thousands, except per share data).
 Weighted-Average Shares
    
    Earnings Per ShareEffect ofDilutiveNet Income
    
    Basic
    
    Securities
    
    Diluted
    
    Basic
    
    DilutedThree Months EndedMarch 31, 2007
    
    $
    54,456
    
    
    
    116,583
    
    
    
    1,399
    
    
    
    117,982
    
    
    $
    0.47
    
    
    $
    0.46March 31, 2006
    
    
    18,764
    
    
    
    114,171
    
    
    
    1,438
    
    
    
    115,609
    
    
    
    0.16
    
    
    
    0.16
  13.
    
    Stock-Based Compensation Pursuant to SFAS 123R, Share-Based Payment, companies must
recognize the cost of employee services received in exchange for awards of equity instruments
based on the grant-date fair value of those awards.The table below sets forth the total amount of stock-based compensation expense for the
three months ended March 31, 2007 and 2006.
 Three Months EndedMarch 31,2007
    
    
    2006(in thousands)Stock-Based Compensation ExpenseStock Options
    
    $
    1,316
    
    
    $
    852Time-Based Restricted Stock
    
    
    2,572
    
    
    
    575Performance Shares and Units
    
    
    1,119
    
    
    
    1,253Total Stock-Based Compensation Expense
    
    $
    5,007
    
    
    $
    2,680
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Item 2.
    
    Managements Discussion and Analysis of Financial Condition and Results of Operations.
 Forward-Looking Statements
    
    
    the level of capital expenditures in the oil and gas industry;
    
    risks inherent in doing business abroad;
    
    operating hazards related to working offshore;
    
    dependence on significant customers;
    
    ability to attract and retain skilled workers;
    
    general industry conditions;
    
    environmental matters;
    
    changes in laws and regulations;
    
    the effects of resolving claims and variation orders;
    
    availability of capital resources; and
    
    delays or cancellation of projects included in backlog
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Results of Operations
 General
    
    
    Offshore Construction Services, which includes pipeline construction and platform
installation and removal services; and
    
    Diving Services, which includes diving and marine support services.
 Offshore Construction Services
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Diving Services
  Quarter Ended March 31, 2007 Compared to Quarter Ended March 31, 2006
 2007
    
    
    2006% of
    
    
    
    
    
    
    % of
    
    
    % ChangeThousands
    
    
    Revenue
    
    
    Thousands
    
    
    Revenue
    
    
    (Unfavorable)Revenues
    
    $
    277,009
    
    
    
    100.0
    %
    
    $
    246,267
    
    
    
    100.0
    %
    
    
    12
    %Cost of operations
    
    
    183,535
    
    
    
    66.3
    
    
    
    198,137
    
    
    
    80.5
    
    
    
    7Gross profit
    
    
    93,474
    
    
    
    33.7
    
    
    
    48,130
    
    
    
    19.5
    
    
    
    94Net gain on asset disposal
    
    
    (1,320
    )
    
    
    (0.5
    )
    
    
    (291
    )
    
    
    (0.1
    )
    
    
    354Selling, general and administrative expenses
    
    
    18,144
    
    
    
    6.5
    
    
    
    16,286
    
    
    
    6.6
    
    
    
    (11
    )Operating income
    
    
    76,650
    
    
    
    27.7
    
    
    
    32,135
    
    
    
    13.0
    
    
    
    139Other (income) expense:Interest expense
    
    
    2,741
    
    
    
    1.0
    
    
    
    2,036
    
    
    
    0.8
    
    
    
    (35
    )Other (income), net
    
    
    (4,885
    )
    
    
    (1.8
    )
    
    
    (33
    )
    
    
    (0.0
    )
    
    
    14,703Income before taxes
    
    
    78,794
    
    
    
    28.5
    
    
    
    30,132
    
    
    
    12.2
    
    
    
    161Income taxes
    
    
    24,338
    
    
    
    8.8
    
    
    
    11,368
    
    
    
    4.6
    
    
    
    (114
    )Net income
    
    $
    54,456
    
    
    
    19.7
    %
    
    $
    18,764
    
    
    
    7.6
    %
    
    
    190
    %
 Revenues. REM Commander
 Gross Profit. REM Commander
 Net Gains on Asset Disposal.
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##### Table of Contents



Selling, General and Administrative Expenses
 Interest Expense.
 Other Income, Net.
 Income Taxes.
 Results of Operations  Segment Information
  Gulf of Mexico Offshore Construction Division
 Pioneer, Sea Constructor Pipeliner 5
 Gulf of Mexico Diving
 REM Commander
 - 17 -




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REM Commander
 Latin America
  West Africa
  Middle East
 REM Fortress
 Asia Pacific
  - 18 -




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- 19 -




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Industry and Business Outlook
     - 20 -




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##### Table of Contents



Liquidity and Capital Resources
 Overview
  Cash Flow
   Long-Term Debt
   Other Indebtedness and Obligations
  - 21 -




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Liquidity Outlook
    Critical Accounting Policies and Estimates
  - 22 -




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Item 3. Quantitative and Qualitative Disclosures About Market Risk.
       - 23 -




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Item 4. Controls and Procedures.
   - 24 -




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##### Table of Contents



PART II  OTHER INFORMATION
 
 Item 1. Legal Proceedings.
     
 Item 6. Exhibits.
 *   15.1 -
    
    Letter regarding unaudited interim financial information*   31.1 -
    
    Section 302 Certification of CEO, B. K. Chin*   31.2 -
    
    Section 302 Certification of CFO, Peter S. Atkinson*   32.1 -
    
    Section 906 Certification of CEO, B. K. Chin*   32.2 -
    
    Section 906 Certification of CFO, Peter S. Atkinson
 
 *
    
    Included with this filing -25-




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Signature
 
 GLOBAL INDUSTRIES, LTD.By:
    
    /s/ PETER S. ATKINSON

Peter S. AtkinsonPresident and Chief Financial Officer(Principal Financial and Accounting Officer)
  -26-




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##### Table of Contents



EXHIBIT
INDEX
 Exhibits
                    Description
of Exhibit
 *   15.1 -
    
    Letter regarding unaudited interim financial information*   31.1 -
    
    Section 302 Certification of CEO, B. K. Chin*   31.2 -
    
    Section 302 Certification of CFO, Peter S. Atkinson*   32.1 -
    
    Section 906 Certification of CEO, B. K. Chin*   32.2 -
    
    Section 906 Certification of CFO, Peter S. Atkinson
 
 *
    
    Included with this filing