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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 June 30, 2009
 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
(State or other jurisdiction of 
incorporation or organization)
    
    72-1212563
(I.R.S. Employer Identification No.)8000 Global Drive 
Carlyss, Louisiana
(Address of principal executive offices)
    
    70665
(Zip Code)
 (337) 583-5000
  None
   þ o
  o o
  Large accelerated filer þAccelerated filer o
Non-accelerated filer o(Do not check if a smaller reporting company)
Smaller reporting company o  o þ




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##### 



Global Industries, Ltd.
Table of Contents
 PagePART I  FINANCIAL INFORMATIONItem 1. Financial Statements
    
    
    3Report of Independent Registered Public Accounting Firm
    
    
    3Condensed Consolidated Balance Sheets (Unaudited)
    
    
    4Condensed Consolidated Statements of Operations (Unaudited)
    
    
    5Condensed Consolidated Statements of Cash Flows (Unaudited)
    
    
    6Notes to Condensed Consolidated Financial Statements (Unaudited)
    
    
    7Item 2. Managements Discussion and Analysis of Financial Condition and Results of Operations
    
    
    22Item 3. Quantitative and Qualitative Disclosures About Market Risk
    
    
    32Item 4. Controls and Procedures
    
    
    33PART II  OTHER INFORMATIONItem 1. Legal Proceedings
    
    
    34Item 1A. Risk Factors
    
    
    34Item 2. Unregistered Sales of Equity Securities and Use of Proceeds
    
    
    34Item 4. Submission of Matters to a Vote of Security Holders
    
    
    35Item 6. Exhibits
    
    
    36Signature
    
    
    37EX-10.1EX-10.2EX-10.3EX-15.1EX-31.1EX-31.2EX-32.1EX-32.2
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PART I  FINANCIAL INFORMATION
 
 Item 1. Financial Statements.
 
 Report of Independent Registered Public Accounting Firm
     Accounting for Convertible Debt Instruments
That May be Settled In Cash upon Conversion (Including Partial Cash Settlement)
 /s/ DELOITTE & TOUCHE LLP 
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GLOBAL INDUSTRIES, LTD.
CONDENSED CONSOLIDATED BALANCE SHEETS  (In thousands)
 June 30
    
    
    December 312009
    
    
    2008(Unaudited)
    
    
    As adjusted(Note 10)ASSETSCurrent AssetsCash and cash equivalents
    
    $
    374,343
    
    
    $
    287,669Restricted cash
    
    
    1,139
    
    
    
    94,516Accounts receivable  net of allowance of $1,395 for
2009 and $12,070 for 2008
    
    
    167,163
    
    
    
    180,018Unbilled work on uncompleted contracts
    
    
    137,200
    
    
    
    86,011Contract costs incurred not yet recognized
    
    
    5,545
    
    
    
    11,982Deferred income taxes
    
    
    2,356
    
    
    
    7,223Assets held for sale
    
    
    7,171
    
    
    
    2,181Prepaid expenses and other
    
    
    46,125
    
    
    
    44,585Total current assets
    
    
    741,042
    
    
    
    714,185Property and Equipment, net
    
    
    647,829
    
    
    
    599,078Other AssetsMarketable securities  long-term
    
    
    41,035
    
    
    
    42,375Accounts receivable  long-term
    
    
    22,609
    
    
    
    22,246Deferred charges, net
    
    
    58,838
    
    
    
    70,573Goodwill
    
    
    37,388
    
    
    
    37,388Other
    
    
    2,926
    
    
    
    3,508Total other assets
    
    
    162,796
    
    
    
    176,090Total
    
    $
    1,551,667
    
    
    $
    1,489,353LIABILITIES AND SHAREHOLDERS EQUITYCurrent LiabilitiesCurrent maturities of long term debt
    
    $
    3,960
    
    
    $
    3,960Accounts payable
    
    
    226,031
    
    
    
    207,239Employee-related liabilities
    
    
    21,159
    
    
    
    26,113Income taxes payable
    
    
    45,197
    
    
    
    38,649Accrued interest payable
    
    
    5,738
    
    
    
    5,613Advance billings on uncompleted contracts
    
    
    7,018
    
    
    
    4,609Accrued anticipated contract losses
    
    
    9,122
    
    
    
    35,055Other accrued liabilities
    
    
    8,808
    
    
    
    12,053Total current liabilities
    
    
    327,033
    
    
    
    333,291Long-Term Debt
    
    
    292,089
    
    
    
    289,966Deferred Income Taxes
    
    
    62,034
    
    
    
    64,020Other Liabilities
    
    
    13,466
    
    
    
    13,266Commitments and Contingencies
    
    
    
    
    
    
    Shareholders EquityCommon stock, $0.01 par value, 150,000 shares
authorized, and 120,022 and 119,650 shares issued at
June 30, 2009 and December 31, 2008, respectively
    
    
    1,200
    
    
    
    1,197Additional paid-in capital
    
    
    511,557
    
    
    
    509,345Retained earnings
    
    
    459,664
    
    
    
    394,699Treasury stock at cost, 6,130 shares
    
    
    (105,038
    )
    
    
    (105,038
    )Accumulated other comprehensive loss
    
    
    (10,338
    )
    
    
    (11,393
    )Total shareholders equity
    
    
    857,045
    
    
    
    788,810Total
    
    $
    1,551,667
    
    
    $
    1,489,353
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GLOBAL INDUSTRIES, LTD.
CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS  (In thousands, except per share data)
(Unaudited)
 Three Months Ended
    
    
    Six Months EndedJune 30
    
    
    June 302009
    
    
    2008
    
    
    2009
    
    
    2008As adjusted
    
    
    
    
    
    
    As adjusted(Note 10)
    
    
    
    
    
    
    (Note 10)Revenues
    
    $
    294,827
    
    
    $
    300,543
    
    
    $
    564,292
    
    
    $
    602,008Cost of operations
    
    
    229,656
    
    
    
    292,707
    
    
    
    453,754
    
    
    
    539,842Gross profit
    
    
    65,171
    
    
    
    7,836
    
    
    
    110,538
    
    
    
    62,166Loss (gain) on asset disposals and impairments
    
    
    (3,715
    )
    
    
    151
    
    
    
    (8,523
    )
    
    
    (2,012
    )Selling, general and administrative expenses
    
    
    16,689
    
    
    
    24,961
    
    
    
    36,560
    
    
    
    48,000Operating income (loss)
    
    
    52,197
    
    
    
    (17,276
    )
    
    
    82,501
    
    
    
    16,178Interest income
    
    
    618
    
    
    
    3,470
    
    
    
    1,192
    
    
    
    10,233Interest expense
    
    
    (3,729
    )
    
    
    (2,711
    )
    
    
    (7,222
    )
    
    
    (7,937
    )Other income (expense), net
    
    
    4,492
    
    
    
    (2,489
    )
    
    
    6,570
    
    
    
    (1,632
    )Income (loss) before taxes
    
    
    53,578
    
    
    
    (19,006
    )
    
    
    83,041
    
    
    
    16,842Income tax expense (benefits)
    
    
    7,645
    
    
    
    (4,874
    )
    
    
    18,077
    
    
    
    4,864Net income (loss)
    
    $
    45,933
    
    
    $
    (14,132
    )
    
    $
    64,964
    
    
    $
    11,978Earnings (Loss) Per Common ShareBasic
    
    $
    0.40
    
    
    $
    (0.12
    )
    
    $
    0.57
    
    
    $
    0.10Diluted
    
    $
    0.40
    
    
    $
    (0.12
    )
    
    $
    0.57
    
    
    $
    0.10Weighted Average Common Shares OutstandingBasic
    
    
    112,521
    
    
    
    114,260
    
    
    
    112,459
    
    
    
    113,954Diluted
    
    
    114,500
    
    
    
    114,260
    
    
    
    114,319
    
    
    
    116,384
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GLOBAL INDUSTRIES, LTD.
CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS  (In thousands)
(Unaudited)
 Six Months EndedJune 302009
    
    
    2008As adjusted(Note 10)Cash Flows From Operating ActivitiesNet income
    
    $
    64,964
    
    
    $
    11,978Adjustments to reconcile net income to net cash provided by (used in) operating
activities:Depreciation and non-stock-based amortization
    
    
    31,264
    
    
    
    24,314Stock-based compensation expense
    
    
    3,446
    
    
    
    6,648Provision for doubtful accounts
    
    
    2,512
    
    
    
    5,494Gain on sale or disposal of property and equipment
    
    
    (9,481
    )
    
    
    (2,012
    )Derivative (gain) loss
    
    
    (483
    )
    
    
    422Loss on asset impairments
    
    
    958
    
    
    
    Deferred income taxes
    
    
    1,296
    
    
    
    (15,552
    )Excess tax benefits from stock-based compensation
    
    
    (17
    )
    
    
    (4,019
    )Changes in operating assets and liabilitiesAccounts receivable, unbilled work, and contract costs
    
    
    (34,773
    )
    
    
    (127,317
    )Prepaid expenses and other
    
    
    (451
    )
    
    
    (12,504
    )Accounts payable, employee-related liabilities, and other accrued liabilities
    
    
    (20,131
    )
    
    
    30,240Deferred dry-docking costs incurred
    
    
    (5,256
    )
    
    
    (42,070
    )Net cash provided by (used in) operating activities
    
    
    33,848
    
    
    
    (124,378
    )Cash Flows From Investing ActivitiesProceeds from the sale of assets
    
    
    27,080
    
    
    
    6,250Additions to property and equipment
    
    
    (65,480
    )
    
    
    (177,422
    )Purchase of marketable securities
    
    
    
    
    
    
    (49,296
    )Sale of marketable securities
    
    
    
    
    
    
    101,404Decrease in (additions to) restricted cash
    
    
    93,377
    
    
    
    (11
    )Net cash provided by (used in) investing activities
    
    
    54,977
    
    
    
    (119,075
    )Cash Flows From Financing ActivitiesRepayment of long-term debt
    
    
    (1,980
    )
    
    
    (1,980
    )Proceeds from sale of common stock, net
    
    
    
    
    
    
    8,609Repurchase of common stock
    
    
    (155
    )
    
    
    (2,194
    )Additions to deferred charges
    
    
    (33
    )
    
    
    (88
    )Excess tax benefits from stock-based compensation
    
    
    17
    
    
    
    4,019Net cash provided by (used in) financing activities
    
    
    (2,151
    )
    
    
    8,366Cash and cash equivalentsIncrease (decrease)
    
    
    86,674
    
    
    
    (235,087
    )Beginning of period
    
    
    287,669
    
    
    
    723,450End of period
    
    $
    374,343
    
    
    $
    488,363Supplemental DisclosuresInterest paid, net of amounts capitalized
    
    $
    5,219
    
    
    $
    6,229Income taxes paid
    
    $
    8,327
    
    
    $
    28,117Property and equipment additions included in accounts payable
    
    $
    42,047
    
    
    $
    11,741
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Notes to Condensed Consolidated Financial Statements (Unaudited)
 1.
    
    GeneralBasis of PresentationThe accompanying unaudited Condensed Consolidated Financial Statements include the accounts
of Global Industries, Ltd. and its subsidiaries (Company, we, us, or our).In the opinion of our management, all adjustments (such adjustments consisting 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 June 30, 2009, are not
necessarily indicative of the results that may be expected for the year ending December 31,
2009. 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, 2008.We have evaluated all subsequent events through August 6, 2009, the date the financial
statements were issued.All $ represent U.S. Dollars.Recent Accounting PronouncementsSFAS 168. In June 2009, the FASB issued SFAS No. 168, The FASB Accounting Standards
Codification and the Hierarchy of Generally Accepted Accounting Principles(SFAS 168).
SFAS 168 establishes the FASB Accounting Standards CodificationTM
(Codification) as the single source of authoritative, nongovernmental GAAP (other than
guidance issued by the SEC). The Codification does not change GAAP; it introduces a new
structure for organizing GAAP and limits the hierarchy to two levelsauthoritative and
nonauthoritative. The Codification is effective for interim or annual financial periods
ending after September 15, 2009. We will adopt the Codification beginning on July 1, 2009
and the adoption will not have a material impact on our consolidated financial statements.SFAS 165. In May 2009, the FASB issued SFAS No. 165, Subsequent Events(SFAS 165). SFAS
165 establishes general standards of accounting for and disclosures of events that occur
after the balance sheet date but before financial statements are issued or are available to
be issued. SFAS 165 is effective for interim or annual financial periods ending after June
15, 2009. We adopted SFAS 165 beginning April 1, 2009. The adoption of SFAS 165 did not
have a material impact on our financial statements. See Note 1 for disclosures required by
this statement.In April 2009, the FASB issued three FASB Staff Positions (FSP) intended to provide
additional application guidance and enhanced disclosures regarding fair value measurements
and impairments of securities. These FSPs are effective for interim and annual reporting
periods ending after June 15, 2009. We adopted these standards on a prospective basis
beginning April 1, 2009. The adoption of these standards did not have a material impact on
our consolidated results of operations and financial condition.
 FSP FAS 157-4,Determining Fair Value When the Volume and Level of Activity for the
Asset or Liability Have Significantly Decreased and Identifying Transactions That are Not
Orderly,provides guidance for determining fair values when there is no active market or
where the price inputs being used represent distressed sales.FSP FAS 115-2 and FAS 124-2, Recognition and Presentation of Other-Than-Temporary
Impairmentsprovides additional guidance to provide greater clarity about the credit and
noncredit component of an other than temporary impairment event and to improve
presentation and disclosure of other than temporary impairments in the financial
statements.FSP FAS 107-1 and APB 28-1, Interim Disclosures about Fair Value of Financial
Instruments,amends FASB Statement No. 107, Disclosures about Fair Value of Financial
Instruments,to require disclosures about the fair value of financial instruments in
interim as well as annual financial statements. This FSP also amends APB Opinion No. 28,
Interim Financial Reporting,to require those disclosures in all interim financial
statements.
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SFAS 161. In March 2008, the FASB issued SFAS No. 161, Disclosures about Derivative
Instruments and Hedging Activities(SFAS 161). SFAS 161 requires specific disclosures
regarding the location and amounts of derivative instruments in our financial statements,
how derivative instruments and related hedged items are accounted for, and how derivative
instruments and related hedged items affect our financial position, financial performance,
and cash flows. SFAS 161 is effective for financial statements issued, and for fiscal years
and interim periods, beginning after November 15, 2008. We adopted SFAS 161 beginning
January 1, 2009. See Note 4 for disclosures required by SFAS 161.FSP APB 14-1. In May 2008, the FASB issued FSP APB No. 14-1, Accounting for Convertible
Debt Instruments That May Be Settled in Cash upon Conversion (Including Partial Cash
Settlement)(FSP APB 14-1), which changed the accounting for our 2.75% Senior Convertible
Debentures (Debentures) due 2027. The FSP requires cash settled convertible debt to be
separated into debt and equity components at issuance and a value to be assigned to each.
The value assigned to the debt component is the estimated fair value of similar bonds
without the conversion feature. The difference between the bond cash proceeds and this
estimated fair value is recorded as a debt discount and amortized to interest expense over
the life of the bond. Although FSP APB 14-1 has no impact on our actual past or future cash
flows, it requires us to record a material increase in non-cash interest expense as the debt
discount is amortized. FSP APB 14-1 became effective for us beginning January 1, 2009 and is
applied retrospectively to all periods presented. See Note 10 for disclosures required by
this FSP.FSP EITF 03-6-1.In June 2008, the FASB issued FSP EITF 03-6-1, Determining Whether
Instruments Granted in Share-Based Payment Transactions Are Participating Securities (FSP
EITF 03-6-1). This FSP addresses whether instruments granted in share-based payment
transactions are participating securities prior to vesting and, therefore, need to be
included in computing earnings per share under the two-class method described in SFAS No.
128, Earnings Per Share". This FSP is applied retrospectively for financial statements
issued for fiscal years beginning after December 15, 2008. We adopted FSP EITF 03-6-1
retrospectively beginning January 1, 2009. See Note 16 for disclosure of the financial
statement impact from implementation of this FSP.
 2.
    
    Restricted CashAs a result of operating performance through June 30, 2009, the interim cash
collateralization period related to the November 2008 waiver and amendment of our Revolving
Credit Facility has ended and previously restricted cash representing cash collateral for
outstanding letters of credit and bank guarantees was released from restriction. See Note 10
for a discussion of this development. At June 30, 2009, $1.1 million restricted cash was
comprised of cash deposits related to foreign currency exchange arrangements. Restrictions
with respect to these deposits will remain in effect until we terminate the associated
foreign currency arrangement.3.
    
    Marketable SecuritiesAs of June 30, 2009, we held $42.4 million at par value in auction rate securities which are
variable rate bonds tied to short-term interest rates with maturities up to 30 years.
Auction rate securities have interest rate resets through a Dutch auction at predetermined
short intervals. Interest rates generally reset every 7-49 days. The coupon interest rate
for these securities ranged from 0.5% to 1.2%, on a tax exempt basis for the three months
ended June 30, 2009.Our investments in auction rate securities were issued by municipalities and state education
agencies. The auction rate securities issued by state education agencies represent pools of
student loans for which repayment is substantially guaranteed by the U.S. government under
the Federal Family Education Loan Program. All of our investments in auction rate securities
have at least a double A rating. As of June 30, 2009, the par value of auction rate
securities issued by state education agencies was $30.0 million and the par value of auction
rate securities issued by municipalities was $12.4 million.Auctions for our auction rate securities continue to fail in 2009. An auction failure,
which is not a default in the underlying debt instrument, occurs when there are more sellers
than buyers at a scheduled interest rate auction date. This results in a lack of liquidity
for these securities, even though debt service continued to occur. During the six
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months
ended June 30, 2009, we continued to earn and receive scheduled interest on these
securities. Based on the lack of current market liquidity, we classify these securities as
non-current.
 Auction Rate Securities issued by State Education AgenciesIn November 2008, we accepted
an auction rate security rights agreement (the Settlement) with UBS Financial Services,
Inc. (UBS) that permits us to sell, or put, our auction rate securities issued by state
education agencies back to UBS at par value at any time during the period from June 30, 2010
through July 2, 2012. We expect to put these auction rate securities back to UBS on June
30, 2010, the earliest date allowable under the settlement, if not sold prior to that date.
We reclassified these auction rate securities to trading securities. Consequently, we will
be required to assess the fair value of the Settlement and these auction rate securities and
record changes in earnings each period until the Settlement is exercised and the securities
are redeemed. As of June 30, 2009, we reassessed the fair value of auction rate securities
covered under the Settlement and recognized an other-than-temporary impairment charge of
$1.1 million for the first six months of 2009. However, as we will be permitted to put
these securities back to UBS at par, we recognized an offsetting $1.1 million gain on the
fair value assessment of the Settlement for the first six months of 2009. Although the
Settlement represents the right to sell the securities back to UBS at par, we will be
required to periodically assess the economic ability of UBS to meet that obligation in
assessing the fair value of the Settlement.Auction Rate Securities issued by MunicipalitiesOf our $12.4 million investment in
auction rate securities issued by municipalities, $11.6 million are not covered under the
Settlement and remain classified as available for sale and are carried at fair value with
any unrealized gains and losses recorded in Other Comprehensive Income. We concluded the
fair value of these auction rate securities issued by municipalities at June 30, 2009 was
$10.3 million, a decline of $1.3 million from par value. The decline in fair value has been
assessed as temporary and has been recorded as an unrealized loss in accumulated other
comprehensive income (loss), net of tax of $0.5 million. We will continue to monitor the
market for auction rate securities and consider its impact, if any, on fair value of the
remaining investment through disposition.4.
    
    DerivativesWe use forward contracts to manage our exposure in foreign currency rates. Our outstanding
forward foreign currency contracts at June 30, 2009 are used to hedge cash flows for
long-term charter payments on two multi-service vessels denominated in Norwegian Kroners and
certain purchase commitments related to the construction of the Global 1200 in Singapore
that are denominated in Singapore Dollars.The Norwegian Kroner forward contracts are accounted for as cash flow hedges with the
effective portion of unrealized gains and losses recorded in accumulated other comprehensive
income (loss) and reclassified into earnings in the same period or periods during which the
hedged transaction affects earnings. As of June 30, 2009 and December 31, 2008, there was
$0.5 million and $2.4 million of unrealized losses, net of tax, in accumulated other
comprehensive income (loss), respectively. Included in the June 30, 2009 total loss is
approximately $0.2 million of net unrealized losses which are expected to be realized in
earnings during the twelve months following June 30, 2009. As of December 31, 2008, these
contracts were in a loss position and included in Other Accrued Liabilities and Other
Liabilities, long-term on the Condensed Consolidated Balance Sheets, valued at $2.0 million
and $1.7 million respectively. As of June 30, 2008, these contracts were in a loss position
and included in Other Accrued Liabilities and Other Liabilities, long-term on the Condensed
Consolidated Balance Sheets, valued at $0.4 million and $0.4 million, respectively.During the second quarter of 2009, we entered into two forward contracts to purchase 18.9
million Singapore Dollars to hedge certain purchase commitments in the first quarter of 2010
related to the construction of the Global 1200 in Singapore. We have not elected hedge
treatment for these contracts. Consequently, changes in the fair value of these instruments
are recorded in earnings. For the three months ended June 30, 2009, we recorded $0.5
million in gains related to these two contracts. As of June 30, 2009, the fair value of
these contracts was $0.5 million and is included in Prepaid Expenses and Other on the
Condensed Consolidated Balance Sheets.5.
    
    Fair Value of Financial InstrumentsUnder SFAS 157, fair value is defined as the price that would be received to sell an asset
or paid to transfer a liability (i.e. exit price) in an orderly transaction between market
participants at the measurement date. SFAS 157 establishes a hierarchy for inputs used in
measuring fair value that maximizes the use of observable inputs and
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minimizes the use of
unobservable inputs by requiring that the most observable inputs be used when available.
The hierarchy for inputs is categorized into three levels based on the reliability of inputs
as follows:
 Level 1
    
    Observable inputs such as quoted prices in active markets.Level 2
    
    Inputs (other than quoted prices in active markets) that are either directly
or indirectly observable.Level 3
    
    Unobservable inputs which require managements best estimate of
what market participants would use in pricing the asset or liability.
 Assets measured at fair value on a recurring basis are categorized in the table below based
upon the lowest level of significant input to the valuations.
 Fair Value Measurements at June 30, 2009  (In thousands)
 Description
    
    Total
    
    
    Level 1
    
    
    Level 2
    
    
    Level 3Cash equivalents
    
    $
    132,965
    
    
    $
    132,965
    
    
    $
    
    
    
    $
    Marketable securities
    
    
    41,035
    
    
    
    
    
    
    
    
    
    
    
    41,035Derivative contracts
    
    
    (268
    )
    
    
    
    
    
    
    (268
    )
    
    
    Total
    
    $
    173,732
    
    
    $
    132,965
    
    
    $
    (268
    )
    
    $
    41,035
 Financial instruments classified as Level 3 in the fair value hierarchy represent auction
rate securities and the related put option in which management has used at least one
significant unobservable input in the valuation model.Due to the lack of observable market quotes on our auction rate securities portfolio, we
utilize a valuation model that relies on Level 3 inputs including market, tax status, credit
quality, duration, recent market observations and overall capital market liquidity. The
valuation of our auction rate securities is subject to uncertainties that are difficult to
predict. Factors that may impact our valuation include changes to credit ratings of the
securities as well as to the underlying assets supporting those securities, rates of default
of the underlying assets, underlying collateral value, discount rates, counterparty risk and
ongoing strength and quality of market credit and liquidity.The following tables present a reconciliation of activity for such securities:
 Changes in Level 3 Financial Instruments  (In thousands)
 Three Months Ended
    
    
    Six Months EndedJune 30
    
    
    June 302009
    
    
    2008
    
    
    2009
    
    
    2008Balance at beginning of period
    
    $
    41,384
    
    
    $
    34,805
    
    
    $
    42,375
    
    
    $
    48,800Purchases, issuances, and
settlements
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    (13,050
    )Unrealized gain (loss)
    
    
    (349
    )
    
    
    38
    
    
    
    (1,340
    )
    
    
    (907
    )Transfers in and/or out of Level 3
    
    
    
    
    
    
    7,125
    
    
    
    
    
    
    
    7,125Balance at end of period
    
    $
    41,035
    
    
    $
    41,968
    
    
    $
    41,035
    
    
    $
    41,968
 We adopted SFAS 157, as amended, on a prospective basis beginning January 1, 2009 for our
non-financial assets and liabilities. Our non-financial assets and liabilities at June 30,
2009 recorded at fair value were our assets held for sale. To assess the fair value of
assets held for sale, we use a valuation model that relies on Level 3 inputs including
market data of recent sale of similar vessels, our prior experience in the sale of similar
assets, and price of third party offers for the asset. Assets measured at fair value on a
nonrecurring basis are categorized in the table below based upon the lowest level of
significant input to the valuations.
 10




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##### Table of Contents



Fair Value Measurements at June 30, 2009  (In thousands)
 TotalGainsDescription
    
    Total
    
    
    Level 1
    
    
    Level 2
    
    
    Level 3
    
    
    (Losses)Assets held for sale
    
    $
    7,171
    
    
    $
    
    
    
    $
    
    
    
    $
    7,171
    
    
    $
    Total
    
    $
    7,171
    
    
    $
    
    
    
    $
    
    
    
    $
    7,171
    
    
    $
    
 6.
    
    ReceivablesReceivables 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. Accounts receivable are stated at net
realizable value, and the allowances for uncollectible accounts were $1.4 million and $12.1
million at June 30, 2009 and December 31, 2008, respectively. Accounts receivable at June
30, 2009 and December 31, 2008 included $9.6 million and $0.1 million, respectively, of
retainage, which represents the short-term portion of amounts not immediately collectible
due to contractually specified requirements. Accounts receivable  long term at June 30,
2009 and December 31, 2008 represented amounts related to retainage which were not expected
to be collected within the next twelve months.Receivables also include claims and unapproved change orders of $58.8 million at June 30,
2009 and $28.6 million at December 31, 2008. These claims and change orders are amounts due
for extra work or changes in the scope of work on certain projects.
 Costs and Estimated Earnings on Uncompleted Contracts
 June 30
    
    
    December 312009
    
    
    2008(In thousands)Costs incurred and recognized on uncompleted contracts
    
    $
    1,017,926
    
    
    $
    738,496Estimated earnings
    
    
    17,817
    
    
    
    (19,411
    )Costs and estimated earnings on uncompleted contracts
    
    
    1,035,743
    
    
    
    719,085Less: Billings to date
    
    
    (918,125
    )
    
    
    (653,373
    )117,618
    
    
    
    65,712Plus: Accrued revenue(1)
    
    
    14,228
    
    
    
    15,770Less: Advance billing on uncompleted contracts
    
    
    (1,664
    )
    
    
    (80
    )$
    130,182
    
    
    $
    81,402Included in accompanying balance sheets under the
following captions:Unbilled work on uncompleted contracts
    
    $
    137,200
    
    
    $
    86,011Advance billings on uncompleted contracts
    
    
    (7,018
    )
    
    
    (4,609
    )$
    130,182
    
    
    $
    81,402
 
 (1)
    
    Accrued revenue represents unbilled amounts receivable related to work performed on projects for which the
percentage of completion method is not applicable. 7.
    
    Asset Disposal and Impairments and Assets Held for SaleDue to escalating costs for dry-docking services, escalating repair and maintenance costs
for aging vessels, increasing difficulty in obtaining certain replacement parts, and
declining marketability of certain vessels, we decided to forego dry-docking or
refurbishment of certain vessels and to sell or permanently retire them from
 11




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Net Gains and (Losses) on Asset Disposal
 Three Months Ended
    
    
    Six Months EndedJune 30
    
    
    June 30Segment
    
    Description of Asset
    
    2009
    
    
    2008
    
    
    2009
    
    
    2008(In thousands)North America Subsea
    
    One DSV in 2009 and Other
    
    $
    205
    
    
    $
    
    
    
    $
    5,067
    
    
    $
    (96
    )Latin America
    
    Other
    
    
    
    
    
    
    (147
    )
    
    
    (11
    )
    
    
    (176
    )West Africa
    
    Two cargo barges and one DSV
    
    
    788
    
    
    
    
    
    
    
    788
    
    
    
    Asia Pacific
    
    One DLB and Other
    
    
    3,428
    
    
    
    (3
    )
    
    
    3,428
    
    
    
    (8
    )Middle East
    
    One DSV in 2008 and Other in 2009 and 2008
    
    
    235
    
    
    
    (1
    )
    
    
    235
    
    
    
    2,292Corporate
    
    Other
    
    
    (26
    )
    
    
    
    
    
    
    (26
    )
    
    
    $
    4,630
    
    
    $
    (151
    )
    
    $
    9,481
    
    
    $
    2,012
 Losses on Asset Impairments
 Three Months Ended
    
    
    Six Months EndedJune 30
    
    
    June 30Segment
    
    Description of Asset
    
    2009
    
    
    2008
    
    
    2009
    
    
    2008(In thousands)North America Subsea
    
    One DSV and Three Dive Systems
    
    $
    725
    
    
    $
    
    
    
    $
    768
    
    
    $
    Latin America
    
    One DSV
    
    
    190
    
    
    
    
    
    
    
    190
    
    
    
    $
    915
    
    
    $
    
    
    
    $
    958
    
    
    $
    
 Accounting for the Impairment or Disposal of
Long-lived Assets
 Assets Held for Sale
 June 30
    
    
    
    
    December 31Segment
    
    Description of Asset
    
    2009
    
    
    Description of Asset
    
    2008(In thousands)
    
    
    
    
    (In thousands)North America Subsea
    
    None
    
    $
    
    
    
    One DSV and Dive System
    
    $
    749West Africa
    
    One DLB and One DSV
    
    
    6,677
    
    
    One DSV
    
    
    1,000Asia Pacific
    
    Other
    
    
    494
    
    
    None
    
    
    Middle East
    
    None
    
    
    
    
    
    One DLB
    
    
    432$
    7,171
    
    
    
    
    $
    2,181
 12




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##### Table of Contents



8.
    
    Property and Equipment
  June 30
    
    
    December 312009
    
    
    2008(In thousands)Land
    
    $
    6,322
    
    
    $
    6,322Facilities and equipment
    
    
    179,710
    
    
    
    179,650Marine vessels
    
    
    476,222
    
    
    
    535,042Construction in progress
    
    
    292,568
    
    
    
    208,827Total property and equipment
    
    
    954,822
    
    
    
    929,841Less: Accumulated depreciation
    
    
    (306,993
    )
    
    
    (330,763
    )Property and equipment, net
    
    $
    647,829
    
    
    $
    599,078
  9.
    
    Deferred Dry-Docking Costs
   Three Months Ended
    
    
    Six Months EndedJune 30
    
    
    June 302009
    
    
    2008
    
    
    2009
    
    
    2008(In thousands)
    
    
    (In thousands)Net book value at beginning of period
    
    $
    57,816
    
    
    $
    44,588
    
    
    $
    61,552
    
    
    $
    30,734Additions for the period
    
    
    2,720
    
    
    
    25,481
    
    
    
    5,256
    
    
    
    42,070Reclassifications to assets held
for sale
    
    
    (4,914
    )
    
    
    
    
    
    
    (4,914
    )
    
    
    Amortization expense for the period
    
    
    (5,084
    )
    
    
    (3,129
    )
    
    
    (11,356
    )
    
    
    (5,864
    )Net book value at end of period
    
    $
    50,538
    
    
    $
    66,940
    
    
    $
    50,538
    
    
    $
    66,940
 13




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10.
    
    Long-Term Debt
  June 30
    
    
    December 312009
    
    
    2008As adjusted(In thousands)Senior convertible debentures due 2027, 2.75%
    
    $
    232,689
    
    
    $
    228,586Title XI bonds due 2025, 7.71%
    
    
    63,360
    
    
    
    65,340Revolving credit facility
    
    
    
    
    
    
    Total long-term debt
    
    
    296,049
    
    
    
    293,926Less: Current maturities
    
    
    3,960
    
    
    
    3,960Long-term debt less current maturities
    
    $
    292,089
    
    
    $
    289,966
  Senior Convertible Debentures
  (in thousands)
 As Originally
    
    As
    
    Effect ofReported
    
    Adjusted
    
    ChangeASSETSProperty and Equipment, net
    
    $
    593,522
    
    
    $
    599,078
    
    
    $
    5,556Deferred charges, net
    
    
    72,370
    
    
    
    70,573
    
    
    
    (1,797
    )LIABILITIES AND SHAREHOLDERS
EQUITYLong-Term Debt
    
    $
    386,380
    
    
    $
    289,966
    
    
    $
    (96,414
    )Deferred Income Taxes
    
    
    28,941
    
    
    
    64,020
    
    
    
    35,079Additional paid-in capital
    
    
    441,105
    
    
    
    509,345
    
    
    
    68,240Retained earnings
    
    
    397,845
    
    
    
    394,699
    
    
    
    (3,146
    )
  14




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##### Table of Contents



June 30
    
    
    December 312009
    
    
    2008(In thousands)Principal amount of debt component
    
    $
    325,000
    
    
    $
    325,000Less: Unamortized debt discount
    
    
    92,311
    
    
    
    96,414Carrying amount of debt component
    
    $
    232,689
    
    
    $
    228,586Debt discount on issuance
    
    $
    107,261
    
    
    $
    107,261Less: Issuance costs
    
    
    2,249
    
    
    
    2,249Deferred income tax
    
    
    36,772
    
    
    
    36,772Carrying amount of equity component
    
    $
    68,240
    
    
    $
    68,240
  Three Months Ended
    
    
    Six Months EndedJune 30
    
    
    June 302009
    
    
    2008
    
    
    2009
    
    
    2008(In thousands)
    
    
    (In thousands)Contractual interest coupon, 2.75%
    
    $
    2,234
    
    
    $
    2,234
    
    
    $
    4,468
    
    
    $
    4,468Amortization of debt discount
    
    
    2,064
    
    
    
    1,918
    
    
    
    4,103
    
    
    
    3,811Total Debentures interest expense
    
    $
    4,298
    
    
    $
    4,152
    
    
    $
    8,571
    
    
    $
    8,279Effective interest rate
    
    
    7.5
    %
    
    
    7.5
    %
    
    
    7.5
    %
    
    
    7.5
    %
 Revolving Credit Facility
  11.
    
    Commitments and Contingencies
 Commitments
 Construction and Purchases in Progress  Global 1200 Global 1201 
 Off Balance Sheet Arrangements 
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##### Table of Contents



$47.3 million, which are scheduled to expire between July 2009 and June 2010, and the
aggregate amount of outstanding letters of credit was $80.0 million, which are due to expire
between July 2009 and September 2010.
 Contingencies
 During the fourth quarter of 2007, we received a payroll tax assessment for the years 2005
through 2007 from the Nigerian Revenue Department in the amount of $23.2 million. The
assessment alleges that certain expatriate employees, working on projects in Nigeria, were
subject to personal income taxes, which were not paid to the government. We filed a formal
objection to the assessment on November 12, 2007. We do not believe these employees are
subject to the personal income tax assessed; however, based on past practices of the
Nigerian Revenue Department, we believe this matter will ultimately have to be resolved by
litigation. We do not expect the ultimate resolution to have a material adverse effect on
our future operating results.During 2008, we received an additional assessment from the Nigerian Revenue Department in
the amount of $40.4 million for tax withholding related to third party service providers.
The assessment alleges that taxes were not withheld from third party service providers for
the years 2002 through 2006 and remitted to the Nigerian government. We have filed an
objection to the assessment. We do not expect the ultimate resolution to have a material
adverse effect on our future operating results.We have one unresolved issue related to an Algerian tax assessment that we received on
February 21, 2007. The remaining amount in dispute is approximately $10.4 million of
alleged value added tax for the years 2004 and 2005. We are contractually indemnified by
our client for the full amount of the assessment that remains in dispute. We continue to
engage outside tax counsel to assist us in resolving the tax assessment.In June 2007, we announced that we were conducting an internal investigation of our West
Africa operations, focusing on the legality, under the U.S. Foreign Corrupt Practices Act
(FCPA) and local laws, of one of our subsidiarys reimbursement of certain expenses
incurred by a customs agent in connection with shipments of materials and the temporary
importation of vessels into West African waters. The Audit Committee of our Board of
Directors has engaged outside legal counsel to lead the investigation.At this stage of the internal investigation, we are unable to predict what conclusions, if
any, the Securities and Exchange Commission (SEC) will reach, whether the U.S. Department
of Justice will open a separate investigation to investigate this matter, or what potential
remedies these agencies may seek. If the SEC or Department of Justice determines that
violations of the FCPA have occurred, they could seek civil and criminal sanctions,
including monetary penalties, against us and certain of our employees, as well as changes to
our business practices and compliance programs, any of which could have a material adverse
effect on our business and financial condition. In addition, such actions, whether actual
or alleged, could damage our reputation and ability to do business. Further detecting,
investigating, and resolving these matters is expensive and consumes significant time and
attention of our senior management.As of the date of this Quarterly Report on Form 10-Q (Quarterly Report) we have concluded
all projects in West Africa and have curtailed our operations in the region. We will
continue to seek prospects in the area and could return in the future.Notwithstanding the ongoing internal investigation, we have concluded that certain changes
to our compliance program would provide us with greater assurance that we are in compliance
with the FCPA and its record-keeping requirements. We have a long-time published policy
requiring compliance with the FCPA and broadly prohibiting any improper payments by us to
foreign or domestic officials, as well as training programs for our employees. Since the
commencement of the internal investigation, we have adopted, and may adopt additional,
measures intended to enhance our compliance procedures and ability to audit and confirm our
compliance. Additional measures also may be required once the investigation concludes.We have concluded that it is premature for us to make any financial reserve for any
potential liabilities that may result from these activities.
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##### Table of Contents



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 business will have a material impact on our
financial statements in future periods.
 12.
    
    Comprehensive Income (Loss)
 Other Comprehensive Income (Loss) The differences between net income and comprehensive
income for each of the comparable periods presented are as follows.
 Three Months Ended
    
    
    Six Months EndedJune 30
    
    
    June 302009
    
    
    2008
    
    
    2009
    
    
    2008(In thousands)Net income (loss)
    
    $
    45,933
    
    
    $
    (14,132
    )
    
    $
    64,964
    
    
    $
    11,978Unrealized gain (loss) on derivatives
    
    
    1,451
    
    
    
    (726
    )
    
    
    2,964
    
    
    
    1,036Unrealized gain (loss) on auction rate securities
    
    
    (349
    )
    
    
    38
    
    
    
    (1,340
    )
    
    
    (907
    )Deferred tax benefit (expense)
    
    
    (386
    )
    
    
    243
    
    
    
    (568
    )
    
    
    (115
    )Comprehensive income (loss)
    
    $
    46,649
    
    
    $
    (14,577
    )
    
    $
    66,020
    
    
    $
    11,992
 Accumulated Other Comprehensive Income (Loss)A roll-forward of the amounts included in
accumulated other comprehensive income (loss), net of taxes, is shown below.
 Forward
    
    
    
    
    
    
    AccumulatedAccumulated
    
    
    Foreign
    
    
    
    
    
    
    OtherTranslation
    
    
    Currency
    
    
    Auction Rate
    
    
    ComprehensiveAdjustment
    
    
    Contracts
    
    
    Securities
    
    
    Income (Loss)(In thousands)Balance at December 31, 2008
    
    $
    (8,978
    )
    
    $
    (2,415
    )
    
    $
    
    
    
    $
    (11,393
    )Change in value
    
    
    
    
    
    
    1,212
    
    
    
    (871
    )
    
    
    341Reclassification to earnings
    
    
    
    
    
    
    714
    
    
    
    
    
    
    
    714Balance at June 30, 2009
    
    $
    (8,978
    )
    
    $
    (489
    )
    
    $
    (871
    )
    
    $
    (10,338
    )
 The amount of accumulated translation adjustment included in accumulated other comprehensive
income (loss) relates to prior translations of subsidiaries whose functional currency was
not the U.S. Dollar. The amount of gain (loss) on forward foreign currency contracts
included in accumulated other comprehensive income (loss) hedges our exposure to changes in
Norwegian Kroners for commitments of long-term vessel charters. The amount of loss on
auction rate securities relates to a temporary decline in the fair value of certain
investments that lack current market liquidity. See also Note 3 for further discussion on
auction rate securities.
 13.
    
    Stock-Based CompensationPursuant to Statement of Financial Accounting Standards No. 123(R), 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 and six months ended June 30, 2009 and 2008.
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Three Months Ended
    
    
    Six Months EndedJune 30
    
    
    June 302009
    
    
    2008
    
    
    2009
    
    
    2008(In thousands)Stock-based compensation expenseStock options
    
    $
    155
    
    
    $
    782
    
    
    $
    457
    
    
    $
    1,558Time-based restricted stock
    
    
    1,070
    
    
    
    2,232
    
    
    
    2,593
    
    
    
    4,020Performance shares and units
    
    
    247
    
    
    
    690
    
    
    
    396
    
    
    
    1,070Total stock-based compensation expense
    
    $
    1,472
    
    
    $
    3,704
    
    
    $
    3,446
    
    
    $
    6,648
 14.
    
    Other Income (Expense), netComponents of other income (expense), net are as follows:
 Three Months Ended
    
    
    Six Months EndedJune 30
    
    
    June 302009
    
    
    2008
    
    
    2009
    
    
    2008(In thousands)Foreign exchange rate gain (loss)
    
    $
    4,148
    
    
    $
    (2,231
    )
    
    $
    4,352
    
    
    $
    (2,236
    )Derivative contract gain (loss)
    
    
    484
    
    
    
    (135
    )
    
    
    484
    
    
    
    588Insurance settlement
    
    
    
    
    
    
    
    
    
    
    978
    
    
    
    Other
    
    
    (140
    )
    
    
    (123
    )
    
    
    756
    
    
    
    16Total
    
    $
    4,492
    
    
    $
    (2,489
    )
    
    $
    6,570
    
    
    $
    (1,632
    )
 15.
    
    Income TaxesOur effective tax rate for the three and six months ended June 30, 2009 was 14.3% and 21.8%,
respectively, compared to 25.6% and 28.9% for the three and six months ended June 30, 2008,
respectively. The decrease in our effective tax rate was primarily due to increased
earnings in foreign jurisdictions with deemed profit tax regimes and utilization of losses
not previously tax benefitted.
 16.
    
    Earnings Per ShareBasic earnings per share (EPS) is computed by dividing earnings (loss) attributed to
common shareholders during the period by the weighted average number of shares of common
stock outstanding during each period. Diluted EPS is computed by dividing net income (loss)
during the period by the weighted average number of shares of common stock that would have
been outstanding assuming the issuance of dilutive potential common stock as if outstanding
during the reporting period, net of shares assumed to be repurchased using the treasury
stock method.We retrospectively implemented FSP EITF 03-6-1 on January 1, 2009 which addresses whether
instruments granted in share-based payment transactions are participating securities prior
to vesting and, therefore, need to participate in computing earnings per share under the
two-class method described in SFAS No. 128, Earnings Per Share. Our non-vested restricted
stock awards contain nonforfeitable rights to dividends and consequently are included in
computation of basic earnings per share. For the three months ended June 30, 2008, 1.2
million non-vested restricted shares participated in the net loss reported for that period
with no consequential impact to basic or diluted earnings per share. For the six months
ended June 30, 2008, 1.4 million non-vested restricted shares participated in net income
reported for that period resulting in a reduction in basic earnings per share of $0.01 and
no impact on diluted earnings per share. For the three months ended June 30, 2009, 1.4
million non-vested restricted shares participated in the net income reported for that period
resulting in a reduction in basic earnings per share of $0.01 and no impact on diluted
earnings per share. For the six months ended June 30, 2009, 1.3 million non-vested
restricted shares participated in net income reported for that period resulting in a
reduction in basic earnings per share of $0.01 and no impact on diluted earnings per share.The following table presents information necessary to calculate earnings (loss) per share of
common stock for the three and six months ended June 30, 2009 and 2008.
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Three Months Ended
    
    
    Six Months EndedJune 30
    
    
    June 302009
    
    
    2008
    
    
    2009
    
    
    2008(In thousands, except per share data)Basic EPS:Net income (loss)
    
    $
    45,933
    
    
    $
    (14,132
    )
    
    $
    64,964
    
    
    $
    11,978Less (earnings) loss attributed to
shareholders of non-vested restricted stock
    
    
    (546
    )
    
    
    143
    
    
    
    (751
    )
    
    
    (144
    )Earnings (loss) attributed to common
shareholders
    
    $
    45,387
    
    
    $
    (13,989
    )
    
    $
    64,213
    
    
    $
    11,834Weighted-average shares outstanding  basic
    
    
    112,521
    
    
    
    114,260
    
    
    
    112,459
    
    
    
    113,954Basic earnings (loss) per common share
    
    $
    0.40
    
    
    $
    (0.12
    )
    
    $
    0.57
    
    
    $
    0.10Diluted EPS:Earnings (loss) attributable to common
shareholders-basic
    
    $
    45,387
    
    
    $
    (13,989
    )
    
    $
    64,213
    
    
    $
    11,834Add earnings (loss) attributable to
shareholders of non-vested restricted stock
    
    
    546
    
    
    
    (143
    )
    
    
    751
    
    
    
    144Earnings (loss) attributable to common
shareholders-diluted
    
    $
    45,933
    
    
    $
    (14,132
    )
    
    $
    64,964
    
    
    $
    11,978Weighted average shares outstanding  basic
    
    
    112,521
    
    
    
    114,260
    
    
    
    112,459
    
    
    
    113,954Effect of dilutive securities:Restricted stock
    
    
    1,355
    
    
    
    
    
    
    
    1,315
    
    
    
    1,394Stock options
    
    
    28
    
    
    
    
    
    
    
    11
    
    
    
    894Performance units
    
    
    596
    
    
    
    
    
    
    
    534
    
    
    
    142Weighted-average shares outstanding  diluted
    
    
    114,500
    
    
    
    114,260
    
    
    
    114,319
    
    
    
    116,384Diluted net income per common share
    
    $
    0.40
    
    
    $
    (0.12
    )
    
    $
    0.57
    
    
    $
    0.10
 Anti-dilutive shares primarily represent options where the strike price was in excess of the
average market price of our common stock for the period reported and are excluded from the
computation of diluted earnings per share. Excluded anti-dilutive shares totaled 1.9
million and 3.4 million for the three months ended June 30, 2009 and 2008, respectively.
Excluded anti-dilutive shares totaled 1.9 million and 0.4 million for the six months ended
June 30, 2009 and 2008, respectively.The net settlement premium obligation on the Senior Convertible Debentures, issued in July
2007, was not included in the dilutive earnings per share calculation for the three or six
months ended June 30, 2009 and 2008 because the conversion price of the debentures was in
excess of our common stock price.
 17.
    
    Segment InformationThe following table presents information about the profit (or loss) for the three and six
months ended June 30, 2009 and 2008 of each of our six reportable segments: North America
Offshore Construction Division (OCD), North America Subsea, Latin America, West Africa,
Middle East (including the Mediterranean), and Asia Pacific/India.
 19




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##### Table of Contents



As of the date of this Quarterly Report, we have concluded all projects in West Africa and
have curtailed our operations in the region. There are no projects in our current backlog
for our West Africa segment. We continue, however, to evaluate viable and profitable
projects in the area.Also, during the first quarter of 2009, we discontinued allocation of corporate stewardship
costs to our reportable segments. This change has been reflected as a retrospective change
to the financial information for the three and six months ended June 30, 2008 presented
below. This change did not affect our condensed consolidated statements of operations or
condensed consolidated statements of cash flows.
 Three Months Ended
    
    
    Six Months EndedJune 30
    
    
    June 302009
    
    
    2008
    
    
    2009
    
    
    2008(In thousands)Total segment revenuesNorth America OCD
    
    $
    43,630
    
    
    $
    22,632
    
    
    $
    48,950
    
    
    $
    29,572North America Subsea
    
    
    34,198
    
    
    
    35,681
    
    
    
    65,750
    
    
    
    59,700Latin America
    
    
    73,470
    
    
    
    55,578
    
    
    
    149,785
    
    
    
    125,750West Africa
    
    
    36,436
    
    
    
    77,123
    
    
    
    101,568
    
    
    
    117,740Middle East
    
    
    28,990
    
    
    
    66,938
    
    
    
    53,499
    
    
    
    152,447Asia Pacific/India
    
    
    89,634
    
    
    
    49,886
    
    
    
    159,447
    
    
    
    131,894Subtotal
    
    
    306,358
    
    
    
    307,838
    
    
    
    578,999
    
    
    
    617,103Intersegment eliminationsNorth America Subsea
    
    
    (10,426
    )
    
    
    (6,990
    )
    
    
    (11,437
    )
    
    
    (13,028
    )Middle East
    
    
    (1,105
    )
    
    
    (305
    )
    
    
    (3,270
    )
    
    
    (2,067
    )Subtotal
    
    
    (11,531
    )
    
    
    (7,295
    )
    
    
    (14,707
    )
    
    
    (15,095
    )Consolidated revenues
    
    $
    294,827
    
    
    $
    300,543
    
    
    $
    564,292
    
    
    $
    602,008Income (loss) before taxesNorth America OCD
    
    $
    4,260
    
    
    $
    1,360
    
    
    $
    (7,979
    )
    
    $
    (5,912
    )North America Subsea
    
    
    3,717
    
    
    
    7,038
    
    
    
    15,705
    
    
    
    6,384Latin America
    
    
    16,445
    
    
    
    (12,366
    )
    
    
    22,467
    
    
    
    7,517West Africa
    
    
    15,081
    
    
    
    (5,106
    )
    
    
    32,859
    
    
    
    (9,284
    )Middle East
    
    
    3,254
    
    
    
    (9,984
    )
    
    
    9,576
    
    
    
    9,504Asia Pacific/India
    
    
    17,639
    
    
    
    10,615
    
    
    
    25,018
    
    
    
    24,511Corporate
    
    
    (6,818
    )
    
    
    (10,563
    )
    
    
    (14,605
    )
    
    
    (15,878
    )Consolidated income (loss) before taxes
    
    $
    53,578
    
    
    $
    (19,006
    )
    
    $
    83,041
    
    
    $
    16,842
 20




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##### Table of Contents



June 30
    
    
    December 312009
    
    
    2008As adjusted(In thousands)Segment assets at period endNorth America OCD
    
    $
    165,527
    
    
    $
    39,184North America Subsea
    
    
    171,902
    
    
    
    191,866Latin America
    
    
    218,116
    
    
    
    254,007West Africa
    
    
    110,325
    
    
    
    214,748Middle East
    
    
    92,928
    
    
    
    117,997Asia Pacific/India
    
    
    224,154
    
    
    
    173,613Corporate
    
    
    568,715
    
    
    
    497,938Consolidated segment assets at
period end
    
    $
    1,551,667
    
    
    $
    1,489,353
 21




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##### Table of Contents



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 economic and business conditions and industry trends;
    
    environmental matters;
    
    changes in laws and regulations;
    
    the effects of resolving claims and variation orders;
    
    adverse outcomes from legal and regulatory proceedings;
    
    availability of capital resources;
    
    delays or cancellation of projects included in backlog;
    
    fluctuations in the prices of or demand for oil and gas;
    
    our ability to comply with covenants in our credit agreements and other debt
instruments and availability, terms and deployment of capital
    
    the level of offshore drilling activity; and
    
    foreign exchange, currency, and interest rate fluctuations.
  22




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##### Table of Contents



Results of Operations
 General
   
    
    Offshore Construction Services, which include pipeline construction, platform
installation and removal, project management and construction support services; and
    
    Subsea Services, which include diving, diver-less intervention, SURF (subsea
equipment, umbilical, riser, and flow line), IRM (inspection, repairs, and maintenance),
and decommissioning/plug and abandonment services.
  Offshore Construction Services
   Subsea Services
  23




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##### Table of Contents



Quarter Ended June 30, 2009 Compared to Quarter Ended June 30, 2008
 Three months ended June 302009
    
    
    2008% of
    
    
    
    
    
    
    % of
    
    
    % Change(Thousands)
    
    
    Revenue
    
    
    (Thousands)
    
    
    Revenue
    
    
    (Unfavorable)Revenues
    
    $
    294,827
    
    
    
    100.0
    %
    
    $
    300,543
    
    
    
    100.0
    %
    
    
    (1.9
    )%Cost of operations
    
    
    229,656
    
    
    
    77.9
    
    
    
    292,707
    
    
    
    97.4
    
    
    
    21.5Gross profit
    
    
    65,171
    
    
    
    22.1
    
    
    
    7,836
    
    
    
    2.6
    
    
    
    731.7(Gain) loss on asset disposals and impairments
    
    
    (3,715
    )
    
    
    1.3
    
    
    
    151
    
    
    
    0.1
    
    
    
    n/mSelling, general and administrative expenses
    
    
    16,689
    
    
    
    5.7
    
    
    
    24,961
    
    
    
    8.3
    
    
    
    33.1Operating income (loss)
    
    
    52,197
    
    
    
    17.7
    
    
    
    (17,276
    )
    
    
    5.8
    
    
    
    402.1Interest income
    
    
    618
    
    
    
    0.2
    
    
    
    3,470
    
    
    
    1.2
    
    
    
    (82.2
    )Interest expense
    
    
    (3,729
    )
    
    
    1.3
    
    
    
    (2,711
    )
    
    
    0.9
    
    
    
    (37.6
    )Other income (expense), net
    
    
    4,492
    
    
    
    1.6
    
    
    
    (2,489
    )
    
    
    0.8
    
    
    
    280.5Income (loss) before income taxes
    
    
    53,578
    
    
    
    18.2
    
    
    
    (19,006
    )
    
    
    6.3
    
    
    
    381.9Income tax expense (benefits)
    
    
    7,645
    
    
    
    2.6
    
    
    
    (4,874
    )
    
    
    1.6
    
    
    
    (256.9
    )Net income (loss)
    
    $
    45,933
    
    
    
    15.6
    %
    
    $
    (14,132
    )
    
    
    4.7
    %
    
    
    425.0
    %
 Revenues
 Gross Profit Challenger Sea Lion.
 Gain (loss) on Asset Disposals and Impairments Seminole Tonkawa Sea
Puma CB 3 Power Barge 1 GP37
 Selling, General and Administrative Expenses
 Interest Income 
 Interest Expense  Global 1200 Global
1201
 24




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##### Table of Contents



Other Income (Expense), net 
 Income Taxes 
 Segment Information 
 North America Offshore Construction Division
 Cherokee Hercules Sea Constructor Chickasaw Cherokee
 North America Subsea
 Global Orion Olympic Challenger, Sea Lion REM Commander
 Latin America
  West Africa
 Hercules Sea Puma CB3 Power Barge 1
 25




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##### Table of Contents



Middle East
 Tonkawa Subtec 1
 Asia Pacific/India
 Seminole
 Six Months Ended June 30, 2009 Compared to Six Months Ended June 30, 2008
 Six months ended June 302009
    
    
    2008% of
    
    
    
    
    
    
    % of
    
    
    % Change(Thousands)
    
    
    Revenue
    
    
    (Thousands)
    
    
    Revenue
    
    
    (Unfavorable)Revenues
    
    $
    564,292
    
    
    
    100.0
    %
    
    $
    602,008
    
    
    
    100.0
    %
    
    
    (6.3
    )Cost of operations
    
    
    453,754
    
    
    
    80.4
    
    
    
    539,842
    
    
    
    89.7
    
    
    
    15.9Gross profit
    
    
    110,538
    
    
    
    19.6
    
    
    
    62,166
    
    
    
    10.3
    
    
    
    77.8(Gain) loss on asset disposals and impairments
    
    
    (8,523
    )
    
    
    1.5
    
    
    
    (2,012
    )
    
    
    0.3
    
    
    
    323.6Selling, general and administrative expenses
    
    
    36,560
    
    
    
    6.5
    
    
    
    48,000
    
    
    
    8.0
    
    
    
    23.8Operating income (loss)
    
    
    82,501
    
    
    
    14.6
    
    
    
    16,178
    
    
    
    2.6
    
    
    
    410.0Interest income
    
    
    1,192
    
    
    
    0.2
    
    
    
    10,233
    
    
    
    1.7
    
    
    
    (88.4
    )Interest expense
    
    
    (7,222
    )
    
    
    1.3
    
    
    
    (7,937
    )
    
    
    1.2
    
    
    
    9.0Other income (expense), net
    
    
    6,570
    
    
    
    1.2
    
    
    
    (1,632
    )
    
    
    0.3
    
    
    
    502.6Income (loss) before income taxes
    
    
    83,041
    
    
    
    14.7
    
    
    
    16,842
    
    
    
    2.8
    
    
    
    393.1Income taxes
    
    
    18,077
    
    
    
    3.2
    
    
    
    4,864
    
    
    
    0.8
    
    
    
    (271.6
    )Net income
    
    $
    64,964
    
    
    
    11.5
    %
    
    $
    11,978
    
    
    
    2.0
    %
    
    
    442.4
    %
 Revenues
 Gross Profit
 26




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##### Table of Contents



Gain on Asset Disposals and Impairments Seminole Sea Lion Sea Lion Tonkawa Sea Puma CB 3 Power Barge
1 GP37
 Selling, General and Administrative Expenses 
 Interest Income 
 Interest Expense  Global 1200 Global 1201
 Other Income (Expense), net 
 Income Taxes 
 Segment Information 
 North America Offshore Construction Division
 Hercules Sea Constructor Cherokee, Chickasaw Cherokee Hercules Sea Constructor
 North America Subsea
 Olympic Challenger Global Orion,
 27




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##### Table of Contents



Sea Lion Sea Lion REM Commander
 Latin America
 REM Commander
 West Africa
 Hercules Sea Constructor Sea Puma CB3 Power Barge 1,
 Middle East
 Tonkawa Subtec 1
 Asia Pacific/India
 Seminole
 28




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##### Table of Contents



Utilization of Major Construction Vessels
 Industry and Business Outlook
    Liquidity and Capital Resources
 Cash Flow
    29




---



##### Table of Contents



Contractual Obligations
 Global
1201 Global 1200
 Less than 1 year
    
    $
    189,0941 to 3 years
    
    
    58,298Total
    
    $
    247,392
 Liquidity Risk
  
    
    temporarily cash-collateralize letters of credit and bank guarantees;
    
    temporarily waive compliance with certain financial covenants;
    
    temporarily prohibit share repurchases; and
    
    temporarily maintain unencumbered liquidity of $100 million.
   
    
    allow for a new starting point in measuring financial performance; and
    
    permit borrowings and the issuance of letters of credit and bank guarantees based on a
rate premium over prime rate ranging from 1.50% to 3.00% or London Interbank Offered Rate
ranging from 2.00% to 3.50% based upon certain financial ratios.
   30




---



##### Table of Contents



Liquidity Outlook
  Global 1200 Global 1201
  31




---



##### Table of Contents



Item 3. Quantitative and Qualitative Disclosures About Market Risk.
  Interest Rate Risk
  Foreign Currency Risk
  
  Global 1200
 32




---



##### Table of Contents



Item 4. Controls and Procedures.
   33




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##### Table of Contents



PART II  OTHER INFORMATION
 
 Item 1. Legal Proceedings.
     
 Item 1A. Risk Factors.
  
 Item 2. Unregistered Sales of Equity Securities and Use of Proceeds.
  Purchases of Equity Securities.
  Maximum Number ofTotal Number of Shares
    
    Shares that May YetPurchased as Part of
    
    Be Purchased UnderTotal Number of Shares
    
    Average Price Paid
    
    Publicly Announced Plans
    
    the Plans orPeriod
    
    Purchased(1)
    
    per Share
    
    or Programs
    
    ProgramsApril 1, 2009  April 30, 2009
    
    
    555
    
    
    $
    6.35
    
    
    
    
    
    
    
    May 1, 2009  May 31, 2009
    
    
    18,514
    
    
    
    6.43
    
    
    
    
    
    
    
    June 1, 2009  June 30, 2009
    
    
    4,427
    
    
    
    6.38
    
    
    
    
    
    
    
    Total
    
    
    23,496
    
    
    $
    6.42
    
    
    
    
    
    
    
    
 
 (1)
    
    On July 17, 2007, the Board of Directors authorized the Company to withhold shares of
restricted stock to satisfy payments for withholding taxes. 34




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##### Table of Contents



Item 4. Submission of Matters to a Vote of Security Holders.
  Number of Votes CastName of Director
    
    For
    
    WithholdJohn A. Clerico
    
    
    83,957,114
    
    
    
    19,347,170Lawrence R. Dickerson
    
    
    79,566,858
    
    
    
    23,737,426Edward P. Djerejian
    
    
    84,737,652
    
    
    
    18,566,633William J. Doré
    
    
    84,749,882
    
    
    
    18,554,402Larry E. Farmer
    
    
    85,386,901
    
    
    
    17,917,383Edgar G. Hotard
    
    
    85,446,517
    
    
    
    17,587,768Richard A. Pattarozzi
    
    
    79,173,446
    
    
    
    24,130,838James L. Payne
    
    
    79,164,969
    
    
    
    24,139,316Michael J. Pollock
    
    
    84,812,885
    
    
    
    18,491,399
  Votes for
    
    
    50,187,611Votes against
    
    
    26,816,727Votes abstain
    
    
    45,404Total
    
    
    77,049,742
  Votes for
    
    
    101,907,964Votes against
    
    
    1,374,976Votes abstain
    
    
    21,342Total
    
    
    103,304,282
 35




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##### Table of Contents



Item 6. Exhibits.
 3.1 -
    
    
    Amended and Restated Articles of Incorporation of Registrant as amended,
incorporated by reference to Exhibits 3.1 and 3.3 to the Form S-1
Registration Statement filed by the Registrant (Reg. No 33-56600).3.2 -
    
    
    Bylaws of Registrant, as amended through October 31, 2007, incorporated
by reference to Exhibit 3.2 to the Registrants Form 10-K filed March 2,
2009.*
    
    
    10.1 -
    
    
    2009 Amendment to Global Industries, Ltd. 1998 Equity Incentive Plan.*
    
    
    10.2 -
    
    
    First Amendment to Global Industries, Ltd. 2005 Management Incentive Plan.*
    
    
    10.3 -
    
    
    Second Amendment to Global Industries, Ltd. 2005 Stock Incentive Plan.
    
    
    10.4
    
    
    Change in Control Agreement between John A. Clerico and the Company dated
June 15, 2009, incorporated by reference to Exhibit 10.1 to the
Registrants Form 8-K filed June 18, 2009.*
    
    
    15.1 -
    
    
    Letter regarding unaudited interim financial information.*
    
    
    31.1 -
    
    
    Section 302 Certification of CEO, John A. Clerico*
    
    
    31.2 -
    
    
    Section 302 Certification of CFO, Jeffrey B. Levos**
    
    
    32.1 -
    
    
    Section 906 Certification of CEO, John A. Clerico**
    
    
    32.2 -
    
    
    Section 906 Certification of CFO, Jeffrey B. Levos
 
 *
    
    Included with this filing**
    
    Furnished herewith
    
    Indicates management contract or compensatory plan or arrangement filed
pursuant to Item 601(b)(10)(iii) of Regulation S-K. 36




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##### Table of Contents



Signatures
  GLOBAL INDUSTRIES, LTD.By:
    /s/ Jeffrey B. LevosJeffrey B. LevosSenior Vice President and
Chief Financial Officer
(Principal Financial Officer)By:
    /s/ Trudy P. McConnaughhayTrudy P. McConnaughhayCorporate Controller
(Principal Accounting Officer)  37