##### Table of Contents



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, 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
    
    72-1212563(State or other jurisdiction of
    
    (I.R.S. Employer Identification No.)incorporation or organization)8000 Global DriveCarlyss, Louisiana
    
    70665(Address of principal executive offices)
    
    (Zip Code)
 (337) 583-5000
 None
  þ o
  o o
  Large accelerated filer þ
    
    Accelerated 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
    
    
    21Item 3. Quantitative and Qualitative Disclosures About Market Risk
    
    
    28Item 4. Controls and Procedures
    
    
    29PART II   OTHER INFORMATIONItem 1. Legal Proceedings
    
    
    30Item 1A. Risk Factors
    
    
    30Item 6. Exhibits
    
    
    31Signature
    
    
    32EX-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)
  
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GLOBAL INDUSTRIES, LTD.
 
 CONDENSED CONSOLIDATED BALANCE SHEETS
 (In thousands)
 March 31,
    
    
    December 31,2009
    
    
    2008(Unaudited)
    
    
    As adjusted(Note 2)ASSETSCurrent AssetsCash and cash equivalents
    
    $
    268,024
    
    
    $
    287,669Restricted cash
    
    
    83,078
    
    
    
    94,516Accounts receivable  net of allowance of $12,112 for 2009
and $12,070 for 2008
    
    
    193,002
    
    
    
    180,018Unbilled work on uncompleted contracts
    
    
    116,263
    
    
    
    86,011Contract costs incurred not yet recognized
    
    
    10,138
    
    
    
    11,982Deferred income taxes
    
    
    9,153
    
    
    
    7,223Assets held for sale
    
    
    16,417
    
    
    
    2,181Prepaid expenses and other
    
    
    44,010
    
    
    
    44,585Total current assets
    
    
    740,085
    
    
    
    714,185Property and Equipment, net
    
    
    608,256
    
    
    
    599,078Other AssetsMarketable securities  long-term
    
    
    41,384
    
    
    
    42,375Accounts receivable  long-term
    
    
    22,246
    
    
    
    22,246Deferred charges, net
    
    
    66,473
    
    
    
    70,573Goodwill
    
    
    37,388
    
    
    
    37,388Other
    
    
    3,500
    
    
    
    3,508Total other assets
    
    
    170,991
    
    
    
    176,090Total
    
    $
    1,519,332
    
    
    $
    1,489,353LIABILITIES AND SHAREHOLDERS EQUITYCurrent LiabilitiesCurrent maturities of long term debt
    
    $
    3,960
    
    
    $
    3,960Accounts payable
    
    
    213,017
    
    
    
    207,239Employee-related liabilities
    
    
    28,577
    
    
    
    26,113Income taxes payable
    
    
    49,628
    
    
    
    38,649Accrued interest payable
    
    
    2,100
    
    
    
    5,613Advance billings on uncompleted contracts
    
    
    16,599
    
    
    
    4,609Accrued anticipated contract losses
    
    
    17,900
    
    
    
    35,055Other accrued liabilities
    
    
    10,690
    
    
    
    12,053Total current liabilities
    
    
    342,471
    
    
    
    333,291Long-Term Debt
    
    
    290,025
    
    
    
    289,966Deferred Income Taxes
    
    
    64,206
    
    
    
    64,020Other Liabilities
    
    
    12,971
    
    
    
    13,266Commitments and Contingencies
    
    
    
    
    
    
    Shareholders EquityCommon stock, $0.01 par value, 150,000 shares authorized, and 120,017 and 119,650
shares issued at March 31, 2009 and December 31, 2008, respectively
    
    
    1,200
    
    
    
    1,197Additional paid-in capital
    
    
    510,820
    
    
    
    509,345Retained earnings
    
    
    413,731
    
    
    
    394,699Treasury stock at cost, 6,130 shares and 6,130 shares, respectively
    
    
    (105,038
    )
    
    
    (105,038
    )Accumulated other comprehensive loss
    
    
    (11,054
    )
    
    
    (11,393
    )Total shareholders equity
    
    
    809,659
    
    
    
    788,810Total
    
    $
    1,519,332
    
    
    $
    1,489,353
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GLOBAL INDUSTRIES, LTD.
 
 CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS
 (In thousands, except per share data)
 (Unaudited)
 Three Months EndedMarch 312009
    
    
    2008As adjusted(Note 2)Revenues
    
    $
    269,465
    
    
    $
    301,465Cost of operations
    
    
    224,098
    
    
    
    247,135Gross profit
    
    
    45,367
    
    
    
    54,330Gain on asset disposals and impairments
    
    
    (4,808
    )
    
    
    (2,163
    )Selling, general and administrative expenses
    
    
    19,871
    
    
    
    23,039Operating income
    
    
    30,304
    
    
    
    33,454Interest income
    
    
    574
    
    
    
    6,764Interest expense
    
    
    (3,493
    )
    
    
    (5,226
    )Other income (expense), net
    
    
    2,078
    
    
    
    856Income from operations before taxes
    
    
    29,463
    
    
    
    35,848Income taxes
    
    
    10,432
    
    
    
    9,738Net income
    
    $
    19,031
    
    
    $
    26,110Earnings Per Common ShareBasic
    
    $
    0.17
    
    
    $
    0.23Diluted
    
    $
    0.17
    
    
    $
    0.22Weighted Average Common Shares OutstandingBasic
    
    
    113,671
    
    
    
    115,267Diluted
    
    
    114,062
    
    
    
    116,742
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GLOBAL INDUSTRIES, LTD.
 
 CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS
 (In thousands)
 (Unaudited)
 Three Months EndedMarch 312009
    
    
    2008As adjusted(Note 2)Cash Flows From Operating ActivitiesNet Income
    
    $
    19,031
    
    
    $
    26,110Adjustments to reconcile net income to net cash provided by (used in) operating
activities:Depreciation and non-stock-based amortization
    
    
    15,629
    
    
    
    12,236Stock-based compensation expense
    
    
    1,974
    
    
    
    2,944Provision for doubtful accounts
    
    
    3,066
    
    
    
    356Gain on sale or disposal of property and equipment
    
    
    (4,851
    )
    
    
    (2,163
    )Derivative (gain) loss
    
    
    
    
    
    
    (172
    )Loss on asset impairments
    
    
    43
    
    
    
    Deferred income taxes
    
    
    (1,854
    )
    
    
    (4,976
    )Excess tax benefits from stock-based compensation
    
    
    
    
    
    
    (2,106
    )Changes in operating assets and liabilitiesAccounts receivable, unbilled work, and contract costs
    
    
    (39,508
    )
    
    
    (66,858
    )Prepaid expenses and other
    
    
    582
    
    
    
    (6,116
    )Accounts payable, employee-related liabilities, and other accrued liabilities
    
    
    (1,617
    )
    
    
    (11,853
    )Deferred dry-docking costs incurred
    
    
    (2,535
    )
    
    
    (16,589
    )Net cash provided by (used in) operating activities
    
    
    (10,040
    )
    
    
    (69,187
    )Cash Flows From Investing ActivitiesProceeds from the sale of assets
    
    
    1,217
    
    
    
    4,409Additions to property and equipment
    
    
    (20,219
    )
    
    
    (18,577
    )Purchase of marketable securities
    
    
    
    
    
    
    (49,296
    )Sale of marketable securities
    
    
    
    
    
    
    84,504Decrease in (additions to) restricted cash
    
    
    11,438
    
    
    
    (7
    )Net cash provided by (used in) investing activities
    
    
    (7,564
    )
    
    
    21,033Cash Flows From Financing ActivitiesRepayment of long-term debt
    
    
    (1,980
    )
    
    
    (1,980
    )Proceeds from sale of common stock, net
    
    
    
    
    
    
    666Repurchase of common stock
    
    
    
    
    
    
    (1,665
    )Additions to deferred charges
    
    
    
    
    
    
    (15
    )Excess tax benefits from stock-based compensation
    
    
    
    
    
    
    2,106Other
    
    
    (61
    )
    
    
    Net cash provided by (used in) financing activities
    
    
    (2,041
    )
    
    
    (888
    )Cash and cash equivalentsIncrease (decrease)
    
    
    (19,645
    )
    
    
    (49,042
    )Beginning of period
    
    
    287,669
    
    
    
    723,450End of period
    
    $
    268,024
    
    
    $
    674,408Supplemental DisclosuresInterest Paid
    
    $
    4,127
    
    
    $
    7,305Income Taxes Paid
    
    $
    4,903
    
    
    $
    15,054Property and Equipment Additions included in Accounts Payable
    
    $
    36,629
    
    
    $
    5,428
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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 management of our Company, 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 March 31, 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.ReclassificationsDuring the second quarter of 2008, we began separately disclosing interest income on the
accompanying Condensed Consolidated Statement of Operations. This reclassification had no
impact on net income for these periods.During the third quarter of 2008, we began separately disclosing accrued anticipated
contract losses on our Condensed Consolidated Balance Sheets.Recent Accounting PronouncementsSFAS 157.In September 2006, the FASB issued SFAS No. 157, Fair Value Measurements(SFAS
157), which defines fair value, establishes a framework for measuring fair value and
enhances disclosures about instruments carried at fair value, but does not change existing
guidance as to whether or not an instrument is carried at fair value. In February 2008, the
FASB issued FASB Staff Positions (FSP) SFAS 157-2, Effective Date for FASB Statement
157.This FSP permits the delayed application of SFAS 157 for all non-recurring fair value
measurements of non-financial assets and non-financial liabilities until fiscal years
beginning after November 15, 2008. In October 2008, the FASB issued FSP FAS 157-3,
Determining the Fair Value of a Financial Asset When the Market for That Asset Is Not
Active(FSP FAS 157-3). This FSP clarifies the application of SFAS 157 when the market
for a financial asset is not active. FSP FAS 157-3 was effective upon issuance and used to
evaluate the fair value of auction rate securities as of September 30, 2008. Our Company
adopted SFAS 157, as amended, on a prospective basis beginning January 1, 2008, for its
financial assets and liabilities and January 1, 2009 for its non-financial assets and
liabilities, which consists of goodwill and assets held for sale. The adoption of SFAS No.
157 for our nonfinancial assets and liabilities did not have a material impact on our
consolidated results of operations and financial condition. See further discussion about
the implementation of SFAS 157 in Note 6.In April, 2009, the FASB issued three new accounting standards which are required to be
adopted for interim and annual reporting periods ending after June 15, 2009. The Company is
currently evaluating the impact of the following:FASB Staff Position 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which provides guidance for determining fair values when there is no active
market or where the price inputs being used represent distressed sales.FASB Staff Position 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.FASB Staff Position 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 Companys financial statements, how derivative instruments and related hedged items are accounted for, and how derivative instruments and related hedged items
affect our Companys 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. Our Company adopted SFAS 161 beginning
January 1, 2009. See Note 5
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 Companys actual past or future cash flows, it requires our Company to record a material increase in non-cash interest expense as the debt discount is amortized. FSP APB 14-1
became effective for our Company beginning January 1, 2009 and is applied retrospectively to all periods presented. See Note 2 for disclosure of financial statement impacts resulting from implementation of 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. Our Company adopted FSP
EITF 03-6-1 retrospectively beginning January 1, 2009. See Note 2 for disclosure of the financial
statement impact from implementation of this FSP.FSP EITF 07-5. In June 2008, the FASB issued FSP EITF  07-5, Determing Whether an Instrument (or Embedded Feature) is Indexed to an Entitys
Own Stock (FSP EITP 07-5). This FSP provides guidance for determing whether an equity-linked financial instrument (or embedded feature) is indexed to entitys own stock. This FSP is applied to financial statements issued for fiscal years beginning after December 31, 2008, with the cumulative effect of the change in accounting principle recognized as an adjustment to opening retained earnings. Our Company adopted FSP
EITF 07-5 beginning January 1, 2009 and the adoption had no effect on our financial statements.2.
    
    Change in Method of AccountingDebenturesOn January 1, 2009 we implemented FSP APB No. 14-1
that changes the accounting treatment of our Debentures. Comparative financial statements for prior
periods presented have been adjusted to apply the new method retrospectively. Using a 7.5% effective
interest rate, our Company determined the bifurcation as of the date of issuance, July 27, 2007,
was $217.7 million for the debt component and $107.3 million for the equity component which is amortized
as interest expense over the 10 year period ending August 1, 2017. This is the earliest date that holders of the Debentures may require us to repurchase all or part of their Debentures for cash. The Debentures are convertible into cash, and if applicable, into shares of our Companys common stock, or under certain circumstances and at our election, solely into our Companys common stock, based on a conversion rate of 28.1821 shares per $1,000 principal
amount of Debentures, which represents an initial conversion price of $35.48 per share. As of March 31, 2009, the Debentures if-converted value does not exceed the Debentures principal of $325 million. The retrospective implementation changed previously disclosed financials as follows:
 
    
    Property and Equipment, net  due to increased capitalized interest resulting from increased
interest expense that qualified for capitalization, net of additional depreciation expense on the increased asset value;
    
    Long-Term Debt and Additional Paid-In Capital  due to reclassification of equity component of Debentures;
    
    Deferred Income Taxes  due to the tax impact of the temporary tax basis difference of the long-term debt; and
    
    Interest Expense and Net Income due to impact of additional interest expense recorded for Debentures net of income taxes.
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March 31
    
    
    December 312009
    
    
    2008(In thousands)Principal amount of debt component
    
    $
    325,000
    
    
    $
    325,000Less: Unamortized debt discount
    
    
    94,375
    
    
    
    96,414Carrying amount of debt component
    
    $
    230,625
    
    
    $
    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 EndedMarch 312009
    
    
    2008(In thousands)Contractual interest coupon, 2.75%
    
    $
    2,234
    
    
    $
    2,234Amortization of debt discount
    
    
    2,040
    
    
    
    1,895Total Debentures interest expense
    
    $
    4,274
    
    
    $
    4,129Effective interest rate
    
    
    7.5
    %
    
    
    7.5
    %
 (in thousands, except per share)
 Condensed Consolidated Balance Sheet
March 31, 2009
 As Computed
    
    As Reportedbefore
    
    after
    
    Effect ofBifurcation
    
    Bifurcation
    
    ChangeASSETSProperty and Equipment, net
    
    $
    600,712
    
    
    $
    608,256
    
    
    $
    7,544Deferred charges, net
    
    
    68,189
    
    
    
    66,473
    
    
    
    (1,716
    )LIABILITIES AND SHAREHOLDERS EQUITYLong-Term Debt
    
    $
    384,400
    
    
    $
    290,025
    
    
    $
    (94,375
    )Deferred Income Taxes
    
    
    29,117
    
    
    
    64,206
    
    
    
    35,089Additional paid-in capital
    
    
    442,579
    
    
    
    510,820
    
    
    
    68,241Retained earnings
    
    
    416,857
    
    
    
    413,731
    
    
    
    (3,126
    )
 Condensed Consolidated Balance Sheet
December 31, 2008
 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
    )
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Condensed Consolidated Statement of Operations
Three Months Ended March 31, 2009
 As Computed
    
    As Reportedbefore
    
    after
    
    Effect ofBifurcation
    
    Bifurcation
    
    ChangeInterest expense
    
    $
    (3,522
    )
    
    $
    (3,493
    )
    
    $
    (29
    )Income from operations before taxes
    
    
    29,434
    
    
    
    29,463
    
    
    
    29Income taxes
    
    
    10,422
    
    
    
    10,432
    
    
    
    10Net income
    
    
    19,012
    
    
    
    19,031
    
    
    
    19Earnings Per Common ShareBasic
    
    $
    0.17
    
    
    $
    0.17
    
    
    $
    Diluted
    
    $
    0.17
    
    
    $
    0.17
    
    
    $
    
 Condensed Consolidated Statement of Operations
Three Months Ended March 31, 2008
 As Originally
    
    As
    
    Effect ofReported
    
    Adjusted
    
    ChangeInterest expense
    
    $
    (4,118
    )
    
    $
    (5,226
    )
    
    $
    1,108Income from operations before taxes
    
    
    36,956
    
    
    
    35,848
    
    
    
    (1,108
    )Income taxes
    
    
    10,126
    
    
    
    9,738
    
    
    
    (388
    )Net income
    
    
    26,830
    
    
    
    26,110
    
    
    
    (720
    )Earnings Per Common ShareBasic
    
    $
    0.23
    
    
    $
    0.23
    
    
    $
    Diluted
    
    $
    0.23
    
    
    $
    0.22
    
    
    $
    (0.01
    )
 Condensed Consolidated Statement of Cash Flows
Three Months Ended March 31, 2009
 As Computed
    
    As Reportedbefore
    
    after
    
    Effect ofBifurcation
    
    Bifurcation
    
    ChangeNet Income
    
    $
    19,012
    
    
    $
    19,031
    
    
    $
    19Depreciation and non-stock-based amortization
    
    
    15,658
    
    
    
    15,629
    
    
    
    (29
    )Deferred income taxes
    
    
    (1,844
    )
    
    
    (1,854
    )
    
    
    (10
    )
 Condensed Consolidated Statement of Cash Flows
Three Months Ended March 31, 2008
 As Originally
    
    As
    
    Effect ofReported
    
    Adjusted
    
    ChangeNet Income
    
    $
    26,830
    
    
    $
    26,110
    
    
    $
    (720
    )Depreciation and non-stock-based amortization
    
    
    11,128
    
    
    
    12,236
    
    
    
    1,108Deferred income taxes
    
    
    (4,588
    )
    
    
    (4,976
    )
    
    
    (388
    )
 10




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in thousands
 Net Increase (Decrease)Deferred
    
    
    Property and
    
    
    Deferred
    
    
    AdditionalLong-Term
    
    
    Charges,
    
    
    Equipment,
    
    
    Income
    
    
    paid-in
    
    
    RetainedDebt
    
    
    Net
    
    
    Net
    
    
    Taxes
    
    
    capital
    
    
    earningsAllocation of
long-term debt
proceeds and
issuance costs to
equity component on
issuance
date
    
    $
    (107,261
    )
    
    $
    (2,249
    )
    
    $
    
    
    
    $
    36,772
    
    
    $
    68,247
    
    
    $
    Cumulative
retrospective
impact from
amortization of
discount on
liability component
and debt issuance
costs
    
    
    3,080
    
    
    
    138
    
    
    
    925
    
    
    
    (708
    )
    
    
    
    
    
    
    (1,316
    )Cumulative
retrospective
impact at January
1, 2008
    
    
    (104,181
    )
    
    
    (2,111
    )
    
    
    925
    
    
    
    36,064
    
    
    
    68,247
    
    
    
    (1,316
    )Retrospective
impact from
amortization of
discount on
liability component
and debt issuance
costs during
2008
    
    
    7,767
    
    
    
    314
    
    
    
    4,631
    
    
    
    (985
    )
    
    
    (7
    )
    
    
    (1,830
    )Cumulative
retrospective
impact at December
31, 2008
    
    $
    (96,414
    )
    
    $
    (1,797
    )
    
    $
    5,556
    
    
    $
    35,079
    
    
    $
    68,240
    
    
    $
    (3,146
    )
  Earnings per Share Computation  .
 11




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Condensed Consolidated Statement of Operations
Three Months Ended March 31, 2009
 As Computed
    
    As Reportedbefore
    
    After
    
    Effect ofChange
    
    Change
    
    ChangeEarnings Per Common ShareBasic
    
    $
    0.17
    
    
    $
    0.17
    
    
    $
    Diluted
    
    $
    0.17
    
    
    $
    0.17
    
    
    $
    
 3.
    
    Restricted CashAt March 31, 2009, $81.9 million of restricted cash represents cash collateral for
outstanding letters of credit and bank guarantees related to the November 2008 waiver and
amendment of our Revolving Credit Facility. We expect the period of restriction on this cash
will not exceed twelve months based upon our operating and cash flow projections. This
restricted cash is therefore classified as a current asset on the accompanying Condensed
Consolidated Balance Sheets. The remaining $1.2 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.4.
    
    Marketable SecuritiesAs of March 31, 2009, our Company 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 0.73% to 1.26%, on a tax exempt basis for the
three months ended March 31, 2009.Our Companys 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 (FFELP). All of our Company s
investments in auction rate securities have at least a double A rating. As of March 31,
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 Companys 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
three months ended March 31, 2009, our Company continued to earn and receive scheduled
interest on these securities. Based on the lack of current market liquidity our Company
classifies these securities as non-current.Auction Rate Securities issued by State Education AgenciesDuring the 2008 fourth quarter
our Company 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 March 31, 2009, we reassessed
the fair value of auction rate securities covered under the Settlement and recognized an
other-than-temporary impairment charge of $2.1 million in the first quarter of 2009.
However, as we will be permitted to put these securities back to UBS at par, we recognized
an offsetting $2.1 million gain on the fair value assessment of the Settlement.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Our Companys investments in auction rate
securities issued by municipalities that are not covered under the Settlement remain
classified as available for sale and are carried at fair value with any unrealized gains and
losses recorded in Other Comprehensive Income. Our Company concluded the fair value of
these auction rate securities issued by municipalities at March 31, 2009 was $11.4 million,
a decline of $1.0 million from par value. The decline in fair value has been assessed by our
Company as temporary and has been recorded as an unrealized loss in Accumulated Other
Comprehensive Income, net of tax of $0.4 million. Our Company 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.
 12




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##### Table of Contents



5.
    
    DerivativesOur Company uses forward contracts to manage its exposure in foreign currency rates. Our
Companys outstanding forward foreign currency contracts at March 31, 2009 are used to hedge
cash flows for long-term charter payments on two multi-service vessels denominated in
Norwegian Kroners. 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 March 31, 2009 and
December 31, 2008, there was $1.4 million and $2.4 million of unrealized losses, net of tax,
in accumulated other comprehensive income (loss), respectively. Included in the March 31,
2009 total is approximately $0.8 million of net unrealized losses which are expected to be
realized in earnings during the twelve months following March 31, 2009.Subsequent to March 31, 2009, our Company 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.6.
    
    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 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 requires 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 March 31, 2009  (In thousands)
 Description
    
    Total
    
    
    Level 1
    
    
    Level 2
    
    
    Level 3Cash equivalents
    
    $
    141,388
    
    
    $
    141,388
    
    
    $
    
    
    
    $
    Marketable securities
    
    
    41,384
    
    
    
    
    
    
    
    
    
    
    
    41,384Derivative contracts
    
    
    (2,203
    )
    
    
    
    
    
    
    (2,203
    )
    
    
    Total
    
    $
    180,569
    
    
    $
    141,388
    
    
    $
    (2,203
    )
    
    $
    41,384
 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:
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##### Table of Contents



Changes in Level 3 Financial Instruments
 Three Months EndedMarch 312009
    
    
    2008(In thousands)Balance at Beginning of Period
    
    $
    42,375
    
    
    $
    48,800Purchases, issuances, and settlements
    
    
    
    
    
    
    (13,050
    )Unrealized gain (loss)
    
    
    (991
    )
    
    
    (945
    )Balance at End of Period
    
    $
    41,384
    
    
    $
    34,805
 Our Company adopted SFAS 157, as amended, on a prospective basis beginning January 1, 2009
for its non-financial assets and liabilities, which consists of goodwill and assets held for
sale. To assess the fair value of goodwill, we use a valuation model with forecasts that
rely on a variety of Level 3 inputs including various external economic and market data and
internal forecasts. To assess the fair value of assets held for sale, we use a valuation
model that rely 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.
 Fair Value Measurements at March 31, 2009  (In thousands)
 TotalGainsDescription
    
    Total
    
    
    Level 1
    
    
    Level 2
    
    
    Level 3
    
    
    (Losses)Assets Held for Sale
    
    $
    16,417
    
    
    $
    
    
    
    $
    
    
    
    $
    16,417
    
    
    $
    Goodwill
    
    
    37,388
    
    
    
    
    
    
    
    
    
    
    
    37,388
    
    
    
    Total
    
    $
    53,805
    
    
    $
    
    
    
    $
    
    
    
    $
    53,805
    
    
    $
    
 7.
    
    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 $12.1 million at both
March 31, 2009 and December 31, 2008, respectively. Accounts receivable at March 31, 2009
and December 31, 2008 included $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 March 31, 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 $40.9 million at March 31,
2009 and $28.6 million at December 31, 2008. These claims and change orders are amounts due
for extra work and/or changes in the scope of work on certain projects.
 Costs and Estimated Earnings on Uncompleted Contracts
 March 31
    
    
    December 312009
    
    
    2008(In thousands)Costs incurred and recognized on uncompleted contracts
    
    $
    881,786
    
    
    $
    738,496Estimated earnings
    
    
    68,050
    
    
    
    (19,411
    )Costs and estimated earnings on uncompleted contracts
    
    
    949,836
    
    
    
    719,085Less: Billings to date
    
    
    (856,310
    )
    
    
    (653,373
    )93,526
    
    
    
    65,712Plus: Accrued revenue(1)
    
    
    6,138
    
    
    
    15,770Less: Advance billing on uncompleted contracts
    
    
    
    
    
    
    (80
    )$
    99,664
    
    
    $
    81,402Included in accompanying balance sheets under the
following captions:Unbilled work on uncompleted contracts
    
    $
    116,263
    
    
    $
    86,011Advance billings on uncompleted contracts
    
    
    (16,599
    )
    
    
    (4,609
    )$
    99,664
    
    
    $
    81,402
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##### Table of Contents



(1)
    
    Accrued revenue represents unbilled amounts receivable related to work performed on projects for which the
percentage of completion method is not applicable. 8.
    
    Assets Held for SaleWe follow the criteria of SFAS No. 144, Accounting for the Impairment or Disposal of
Long-lived Assets,for recording our long-lived assets held for sale. Long-lived assets
held for sale are carried at the lower of the assets carrying value or net realizable
value, and depreciation ceases. As of March 31, 2009 and December 31, 2008, we had $16.4
million and $2.2 million, respectively, of assets held for sale. At December 31, 2008, the
assets consisted of two dive support vessels, the Sea Pumaand Ocean Winsertor;a derrick
lay barge, the Tonkawa; and a saturation diving system. Additionally, during the first
quarter of 2009 two derrick lay barges, the Seminoleand the GP 37, and a cargo barge, the
Power Barge 1, were classified as held for sale.9.
    
    Property and EquipmentThe components of property and equipment, at cost, and the related accumulated depreciation
are as follows:
 March 31
    
    
    December 312009
    
    
    2008(In thousands)Land
    
    $
    6,322
    
    
    $
    6,322Facilities and equipment
    
    
    180,520
    
    
    
    179,650Marine vessels
    
    
    493,091
    
    
    
    535,042Construction in progress
    
    
    240,738
    
    
    
    208,827Total property and equipment
    
    
    920,671
    
    
    
    929,841Less: Accumulated depreciation
    
    
    (312,415
    )
    
    
    (330,763
    )Property and equipment, net
    
    $
    608,256
    
    
    $
    599,078
 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. We capitalized $2.9 million and $1.1
million of interest costs for the three months ended March 31, 2009 and 2008, respectively.
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, if we applied only a straight-line depreciation method
instead of the UOP method, 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.10.
    
    Deferred Dry Docking CostsOur Company utilizes the deferral method to capitalize vessel dry docking costs and to
amortize the costs to the next dry docking. Such capitalized costs include regulatory
required steel replacement, direct costs for vessel mobilization and demobilization and
rental of dry docking facilities and services. Crew costs may also be capitalized when
employees perform all or a part of the required dry docking. Any repair and maintenance
costs incurred during the dry docking period are expensed.
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##### Table of Contents



The below table presents dry docking costs incurred and amortization for all periods
presented:
 Three Months EndedMarch 312009
    
    
    2008(In thousands)Net book value at beginning of period
    
    $
    61,552
    
    
    $
    30,734Additions for the period
    
    
    2,536
    
    
    
    16,589Amortization expense for the period
    
    
    (6,272
    )
    
    
    (2,735
    )Net book value at end of period
    
    $
    57,816
    
    
    $
    44,588
 11.
    
    Long-Term DebtThe components of long-term debt are as follows:
 March 31
    
    
    December 312009
    
    
    2008(In thousands)Senior Convertible Debentures due 2027, 2.75%
    
    $
    230,625
    
    
    $
    228,586Title XI Bonds due 2025, 7.71%
    
    
    63,360
    
    
    
    65,340Revolving Credit Facility
    
    
    
    
    
    
    Total long-term debt
    
    
    293,985
    
    
    
    293,926Less: Current maturities
    
    
    3,960
    
    
    
    3,960Long-term debt less current maturities
    
    $
    290,025
    
    
    $
    289,966
 On January 1, 2009, we implemented FSP APB 14-1 which changes the accounting treatment of
our Senior Convertible Debentures. This 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. For more information related to this accounting change, see Note 2.Our Revolving Credit Facility provides a borrowing capacity of up to $150.0 million. As of
March 31, 2009, our Company had no borrowings against the facility and $78.0 million of
letters of credit outstanding thereunder. As a result of operating performance, our Company
did not meet the minimum fixed charge coverage ratio under the facility at September 30,
2008. On November 7, 2008, we amended our Revolving Credit Facility to temporarily require
our Company to cash-collateralize letters of credit and bank guarantees. While the interim
cash collateralization is in effect, no borrowings, letters of credit, or bank guarantees
unsecured by cash are available to our Company under the Revolving Credit Facility. Our
Company also has a $16.0 million short-term credit facility at one of our foreign
locations.  At March 31, 2009, we had $1.8 million in cash overdrafts reflected in accounts
payable, $6.0 million of letters of credit outstanding, and $8.2 million of credit
availability under this particular credit facility.12.
    
    Commitments and ContingenciesCommitmentsConstruction and Purchases in ProgressThe estimated cost to complete capital expenditure
projects in progress at March 31, 2009 was approximately $307.5 million, which primarily
represents expenditures for construction of the Global 1200and Global 1201, our new
generation derrick/pipelay vessels. This amount includes aggregate commitments of 118.2
million Singapore Dollars (or $77.7 million as of March 31, 2009) and 12.9 million (or
$17.0 million as of March 31, 2009). Subsequent to March 31, 2009, our Company entered into
two forward contracts to purchase 18.9 million Singapore Dollars to hedge certain of these
purchase commitments.Off Balance Sheet Arrangements In the normal course of our business activities, and
pursuant to agreements or upon obtaining such agreements to perform construction services,
we provide guarantees, bonds, and letters of credit to customers, vendors, and other
parties. At March 31, 2009, the aggregate amount of these outstanding bonds was
$61.1 million, which are scheduled to expire between April 2009 and June 2010, and the
aggregate amount of outstanding letters of credit was $82.2 million, which are due to expire
between April 2009 and January 2010.
 16




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##### Table of Contents



ContingenciesDuring 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 Company.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 Company.We have one unresolved issue related to an Algerian tax assessment received by our Company
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, our Company announced that it was conducting an internal investigation of its
West Africa operations, focusing on the legality, under the U.S. Foreign Corrupt Practices
Act (FCPA) and local laws, of one of its 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 Companys Board
of Directors has engaged outside legal counsel to lead the investigation.At this stage of the internal investigation, our Company is unable to predict what
conclusions, if any, the Securities and Exchange Commission (SEC) will reach, whether the
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.We continue to use alternative procedures adopted after the commencement of the
investigation to obtain Nigerian temporary import permits. These procedures are designed to
ensure FCPA compliance. On conclusion of our current project in Nigeria, as a result of no
booked projects and efforts to minimize the financial impact, we will be curtailing our
operations in West Africa.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.Our Company has concluded that it is premature for it to make any financial reserve for any
potential liabilities that may result from these activities.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.
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##### Table of Contents



13.
    
    Comprehensive IncomeOther Comprehensive Income The differences between net income and comprehensive income for
each of the comparable periods presented are as follows.
 Three Months EndedMarch 312009
    
    
    2008(In thousands)Net Income
    
    $
    19,031
    
    
    $
    26,110Unrealized net gain on derivatives
    
    
    1,513
    
    
    
    1,762Unrealized loss on auction rate securities
    
    
    (991
    )
    
    
    (945
    )Deferred tax benefit
    
    
    (183
    )
    
    
    (358
    )Comprehensive Income
    
    $
    19,370
    
    
    $
    26,569
 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
    
    
    
    
    
    
    1,518
    
    
    
    (644
    )
    
    
    874Reclassification to earnings
    
    
    
    
    
    
    (535
    )
    
    
    
    
    
    
    (535
    )Balance at March 31, 2009
    
    $
    (8,978
    )
    
    $
    (1,432
    )
    
    $
    (644
    )
    
    $
    (11,054
    )
 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 Companys 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 4 for further discussion on
auction rate securities.14.
    
    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 months ended March 31, 2009 and 2008.
 Three Months EndedMarch 312009
    
    
    2008(In thousands)Stock-Based Compensation ExpenseStock Options
    
    $
    302
    
    
    $
    776Time-Based Restricted Stock
    
    
    1,523
    
    
    
    1,788Performance Shares and Units
    
    
    149
    
    
    
    380Total Stock-Based Compensation Expense
    
    $
    1,974
    
    
    $
    2,944
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15.
    
    Other Income (Expense), netComponents of other income (expense), net are as follows:
 Three Months EndedMarch 312009
    
    
    2008(In thousands)Insurance settlement
    
    $
    978
    
    
    $
    Derivative contract gain (loss)
    
    
    
    
    
    
    724Foreign exchange rate gain (loss)
    
    
    203
    
    
    
    (4
    )Other
    
    
    897
    
    
    
    136Total
    
    $
    2,078
    
    
    $
    856
 16.
    
    Income TaxesOur Companys effective tax rate for the first quarter of 2009 was 35.4% compared to 27.2%
for the first quarter of 2008. The increase in our effective tax rate was due to reduced
earnings in foreign jurisdictions with higher deemed profit tax regimes and losses that
could not be fully tax benefited.17.
    
    Earnings Per ShareBasic earnings per share (EPS) is computed by dividing net income (loss) during the period
by the weighted average number of common shares outstanding during each period. Diluted EPS
is computed by dividing net income (loss) during the period by the weighted average number
of shares that would have been outstanding assuming the issuance of dilutive potential
common shares as if outstanding during the reporting period, net of shares assumed to be
repurchased using the treasury stock method.Our Company 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 be included 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 earnings per share. For more
information related to this change in accounting, see Note 2.The following table presents the reconciliation between basic shares and diluted shares.
 Three Months EndedMarch 312009
    
    
    2008(In thousands, except per share data)Net Income
    
    $
    19,031
    
    
    $
    26,110Common shares dilutionWeighted-average shares outstanding  basic
    
    
    113,671
    
    
    
    115,267Effect of dilutive securitiesStock options
    
    
    
    
    
    
    948Performance units
    
    
    391
    
    
    
    527Weighted-average shares outstanding  diluted
    
    
    114,062
    
    
    
    116,742Earnings per shareBasic
    
    $
    0.17
    
    
    $
    0.23Diluted
    
    $
    0.17
    
    
    $
    0.22
 Anti-dilutive shares represent options where the strike price was in excess of the average
market price of our Companys common stock for the period reported and are excluded from the
computation of diluted earnings per
 19




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share. Excluded anti-dilutive shares totaled 1.9 million and 0.3 million for the quarters
ended March 31, 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 months
ended March 31, 2009 and 2008 because the conversion price of the debentures was in excess
of our common stock price.18.
    
    Segment InformationThe following table presents information about the profit (or loss) for the three months
ended March 31, 2009 and 2008 of each of our Companys 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. In the second
quarter of 2008, we renamed our Gulf of Mexico segments to North America segments to better
reflect our strategic direction to expand our marketing efforts into Canada, Newfoundland,
and other regions in North America. Our Mexico operations remain in our Latin America
segment.During the first quarter of 2009, we made the decision to curtail our operations in our West
Africa segment, at the conclusion of our current project. We made this decision in
consideration of there being no further projects in our current backlog for the business
unit.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 months ended March 31, 2008 presented below.
This change did not affect our condensed consolidated statements of operations or condensed
consolidated statements of cash flows.
 Three Months EndedMarch 312009
    
    
    2008(In thousands)Total segment revenuesNorth America OCD
    
    $
    5,319
    
    
    $
    6,940North America Subsea
    
    
    31,552
    
    
    
    24,019Latin America
    
    
    76,316
    
    
    
    70,172West Africa
    
    
    65,132
    
    
    
    40,617Middle East
    
    
    24,509
    
    
    
    85,509Asia Pacific/India
    
    
    69,813
    
    
    
    82,008Subtotal
    
    $
    272,641
    
    
    $
    309,265Intersegment eliminationsNorth America Subsea
    
    $
    (1,012
    )
    
    $
    (6,038
    )Middle East
    
    
    (2,164
    )
    
    
    (1,762
    )Subtotal
    
    
    (3,176
    )
    
    
    (7,800
    )Consolidated revenues
    
    $
    269,465
    
    
    $
    301,465Income (loss) before taxesNorth America OCD
    
    $
    (12,238
    )
    
    $
    (7,272
    )North America Subsea
    
    
    11,988
    
    
    
    (654
    )Latin America
    
    
    6,022
    
    
    
    19,883West Africa
    
    
    17,778
    
    
    
    (4,178
    )Middle East
    
    
    6,322
    
    
    
    19,488Asia Pacific/India
    
    
    7,379
    
    
    
    13,896Corporate
    
    
    (7,788
    )
    
    
    (5,315
    )Consolidated income before taxes
    
    $
    29,463
    
    
    $
    35,848
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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 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.
   21




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##### Table of Contents



Results of Operations
 General
    
    
    Offshore Construction Services, which include pipeline construction and platform
installation and removal services; and
    
    Subsea Services, which include diving, diver-less intervention, and marine support
services.
 Offshore Construction Services
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Subsea Services
  Quarter Ended March 31, 2009 Compared to Quarter Ended March 31, 2008
 Three months ended March 312009
    
    
    2008% of
    
    
    
    
    
    
    % of
    
    
    % Change(Thousands)
    
    
    Revenue
    
    
    (Thousands)
    
    
    Revenue
    
    
    (Unfavorable)Revenues
    
    $
    269,465
    
    
    
    100.0
    %
    
    $
    301,465
    
    
    
    100.0
    %
    
    
    (10.6
    %)Cost of operations
    
    
    224,098
    
    
    
    83.2
    
    
    
    247,135
    
    
    
    82.0
    
    
    
    9.3Gross profit
    
    
    45,367
    
    
    
    16.8
    
    
    
    54,330
    
    
    
    18.0
    
    
    
    (16.5
    )Gain on asset disposals and impairments
    
    
    (4,808
    )
    
    
    1.8
    
    
    
    (2,163
    )
    
    
    0.7
    
    
    
    122.3Selling, general and administrative expenses
    
    
    19,871
    
    
    
    7.4
    
    
    
    23,039
    
    
    
    7.6
    
    
    
    13.8Operating income
    
    
    30,304
    
    
    
    11.2
    
    
    
    33,454
    
    
    
    11.1
    
    
    
    (9.4
    )Interest income
    
    
    574
    
    
    
    0.2
    
    
    
    6,764
    
    
    
    2.2
    
    
    
    (91.5
    )Interest expense
    
    
    (3,493
    )
    
    
    1.3
    
    
    
    (5,226
    )
    
    
    1.7
    
    
    
    33.2Other income (expense), net
    
    
    2,078
    
    
    
    0.8
    
    
    
    856
    
    
    
    0.3
    
    
    
    142.8Income before income taxes
    
    
    29,463
    
    
    
    10.9
    
    
    
    35,848
    
    
    
    11.9
    
    
    
    (17.8
    )Income taxes
    
    
    10,432
    
    
    
    3.9
    
    
    
    9,738
    
    
    
    3.2
    
    
    
    (7.1
    )Net income
    
    $
    19,031
    
    
    
    7.0
    %
    
    $
    26,110
    
    
    
    8.7
    %
    
    
    (27.1
    %)
 Revenues
 Gross Profit Hercules Sea Constructor Olympic Challenger Global Orion Hercules Sea Constructor
 Gain on Asset Disposals and Impairments Sea Lion Sea Lion.
 Selling, General and Administrative Expenses 
 23




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##### Table of Contents



Interest Income 
 Interest Expense  Global 1200 and Global 1201
 Other Income (Expense), net 
 Income Taxes 
 Segment Information 
 North America Offshore Construction Division
 Cherokee Chickasaw Cherokee Hercules Sea Constructor
 North America Subsea
 Olympic Challenger Global Orion, Sea Lion REM Commander Sea Lion
 Latin America
 REM
Commander REM
Commander
 24




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##### Table of Contents



West Africa
 Hercules Sea Constructor
 Middle East
  Asia Pacific/India
  Utilization of Major Construction Vessels
 Industry and Business Outlook
    25




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Liquidity and Capital Resources
 Cash Flow
     Contractual Obligations
 Global
1201 Global 1200
 Less than 1 year
    
    $
    148,5191 to 3 years
    
    
    132,772Total
    
    $
    281,291
 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.
  26




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##### Table of Contents




    
    allow for a new starting point in measuring financial performance; and
    
    permit borrowings and/or 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
(LIBOR) ranging from 2.00% to 3.50% based upon certain financial ratios.
   Liquidity Outlook
  Global 1200 Global 1201
  27




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Item 3. Quantitative and Qualitative Disclosures About Market Risk.
  Interest Rate Risk
  Foreign Currency Risk
  
  Global
1200
 28




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Item 4. Controls and Procedures.
   29




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PART II  OTHER INFORMATION
 
 Item 1. Legal Proceedings.
     
 Item 1A. Risk Factors.
  30




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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 -
    
    Global Industries, Ltd. Non-Employee Director Compensation Plan, as amended.*
    
    10.2 -
    
    Form of Executive Long-Term Incentive Performance Unit Agreement (EPS Based
Multi-Year)*
    
    10.3 -
    
    Form of Executive Long-Term Incentive Performance Unit Agreement (EPS Based
One Year)10.4 -
    
    Amendment No. 5 to the Third Amended and Restated Credit Agreement dated
February 25, 2009 among Global Industries, Ltd., Global Offshore Mexico, S.
de R.L. de C.V., Global Industries International, L.L.C., in its capacity
as general partner of Global Industries International, L.P., the Lenders
and Calyon New York Branch, as administrative agent for the Lenders,
incorporated by reference to Exhibit 10.49 of the Registrants Form 10-K
filed March 2, 2009.
    
    10.5 -
    
    First Amendment to Global Industries, Ltd. 2005 Stock Incentive Plan,
incorporated by reference to Appendix A of Schedule 14A filed April 3,
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. 31




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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)  32