##### Table of Contents









UNITED STATES SECURITIES AND EXCHANGE COMMISSION


Washington, D.C. 20549


Form 10-Q


|           |  |                                                                                             
|---------- |  | --------------------------------------------------------------------------------------------
|(Mark One) |  |                                                                                             
|þ          |  | QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE
    SECURITIES EXCHANGE ACT OF 1934 
|          
|           |  | For the quarterly period ended March 31, 2005                                               
|          
|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 001-16857


Horizon Offshore, Inc.


(Exact name of registrant as specified in its charter)


|                                                                                               |  |                                         
|---------------------------------------------------------------------------------------------- |  | ----------------------------------------
|Delaware                                                                                       |  | 76-0487309                              
|(State or other jurisdiction
    of incorporation or organization)                             |  | (I.R.S. Employer
    Identification No.)
|                                                                                              
|2500 CityWest Boulevard, Suite 2200
    Houston, Texas(Address of principal executive offices) |  | 77042(Zip Code)                         

(Registrants telephone number, including area code)


(713) 361-2600


þ o


þ o












---










HORIZON OFFSHORE, INC. AND SUBSIDIARIES


TABLE OF CONTENTS


|                                      |  |                                                                                              |    |  |    | 
|------------------------------------- |  | -------------------------------------------------------------------------------------------- | -- |  | -- | 
|Description                           |  | Page                                                                                         |   
|                                      |  |                                                                                              |   
|PART I. FINANCIAL
    INFORMATION    
|Item 1.                               |  | Financial Statements                                                                         |    |  | 2  | 
|                                      |  | Consolidated Balance Sheets as of
    March 31, 2005 and December 31, 2004                   |    |  | 2  | 
|                                      |  | Consolidated Statements of Operations for
    the Three Months Ended March 31, 2005 and 2004 |    |  | 3  | 
|                                      |  | Consolidated Statements of Cash Flows for
    the Three Months Ended March 31, 2005 and 2004 |    |  | 4  | 
|                                      |  | Notes to Consolidated Financial
    Statements                                               |    |  | 5  | 
|Item 2.                               |  | Managements Discussion and Analysis
    of Financial Condition and Results of Operations    |    |  | 18 | 
|Item 3.                               |  | Quantitative and Qualitative Disclosures
    About Market Risk                               |    |  | 30 | 
|Item 4.                               |  | Controls and Procedures                                                                      |    |  | 31 | 
|                                     
|PART II. OTHER
    INFORMATION       
|Item 1.                               |  | Legal Proceedings                                                                            |    |  | 32 | 
|Item 6.                               |  | Exhibits                                                                                     |    |  | 32 | 
|Signatures                            |  |                                                                                              | 33 | 
|Certification Pursuant to Section 302
|Certification Pursuant to Section 302
|Certification Pursuant to Section 906
|Certification Pursuant to Section 906



1



---



##### Table of Contents






PART I. FINANCIAL INFORMATION





|        |                     
|------- | --------------------
|Item 1. | Financial Statements

HORIZON OFFSHORE, INC. AND SUBSIDIARIES





CONSOLIDATED BALANCE SHEETS


|                                                |                                                                                                                                              |                                  |                            |          |              |         |         |          |        |         | 
|----------------------------------------------- | -------------------------------------------------------------------------------------------------------------------------------------------- | -------------------------------- | -------------------------- | -------- | ------------ | ------- | ------- | -------- | ------ | ------- | 
|                                                |                                                                                                                                              | March 31,                        |                            |          | December 31, |        
|                                                |                                                                                                                                              | 2005                             |                            |          | 2004         |        
|                                                |                                                                                                                                              |                                  |                            |          |              |        
|                                                |                                                                                                                                              | (Unaudited)                      |                           
|                                                |                                                                                                                                              | (In thousands, except            |                           
|                                                |                                                                                                                                              | share data)                      |                           
|ASSETS                                         
|CURRENT ASSETS:                                 |                                                                                                                                              |                                  |                            |          |              |         |         |         
|                                                | Cash and cash equivalents                                                                                                                    |                                  | $                          | 7,290    |              |         | $       | 37,975   |       
|                                                | Restricted cash                                                                                                                              |                                  |                            | 5,700    |              |         |         |         |       
|                                                | Accounts receivable                                                                                                                         |                                  |                            |          |              |         |         |          |       
|                                                |                                                                                                                                              | Contract receivables, net        |                            |          | 37,624       |         |         |          | 81,861 |        
|                                                |                                                                                                                                              | Costs in excess of billings, net |                            |          | 28,886       |         |         |          | 24,058 |        
|                                                |                                                                                                                                              | Other                            |                            |          | 248          |         |         |          | 346    |        
|                                                | Other current assets                                                                                                                         |                                  |                            | 2,848    |              |         |         | 5,079    |       
|                                                | Assets held for sale                                                                                                                         |                                  |                            | 8,632    |              |         |         | 8,632    |       
|                                                |                                                                                                                                              |                                  |                            |          |              |        
|                                                |                                                                                                                                              |                                  | Total current assets       |          |              | 91,228  |         |          |        | 157,951 | 
|PROPERTY AND EQUIPMENT, net                     |                                                                                                                                              |                                  | 196,748                    |          |              |         | 198,804 |         
|RESTRICTED CASH                                 |                                                                                                                                              |                                  | 9,247                      |          |              |         | 9,247   |         
|INVENTORY                                       |                                                                                                                                              |                                  | 1,004                      |          |              |         | 1,415   |         
|INSURANCE RECEIVABLE                            |                                                                                                                                              |                                  | 9,416                      |          |              |         | 9,255   |         
|OTHER ASSETS                                    |                                                                                                                                              |                                  | 30,005                     |          |              |         | 26,671  |         
|                                                |                                                                                                                                              |                                  |                            |          |              |        
|                                                |                                                                                                                                              | $                                | 337,648                    |          |              | $       | 403,343 |         
|                                                |                                                                                                                                              |                                  |                            |          |              |        
|                                               
|LIABILITIES AND STOCKHOLDERS EQUITY           
|CURRENT LIABILITIES:                            |                                                                                                                                              |                                  |                            |          |              |         |         |         
|                                                | Accounts payable                                                                                                                             |                                  | $                          | 23,420   |              |         | $       | 35,267   |       
|                                                | Accrued liabilities                                                                                                                          |                                  |                            | 8,611    |              |         |         | 9,181    |       
|                                                | Accrued job costs                                                                                                                            |                                  |                            | 21,259   |              |         |         | 31,152   |       
|                                                | Billings in excess of costs                                                                                                                  |                                  |                            | 6,740    |              |         |         | 9,900    |       
|                                                | Current maturities of long-term debt                                                                                                         |                                  |                            | 48,690   |              |         |         | 42,243   |       
|                                                | Current taxes payable                                                                                                                        |                                  |                            | 1,629    |              |         |         | 1,186    |       
|                                                |                                                                                                                                              |                                  |                            |          |              |        
|                                                |                                                                                                                                              |                                  | Total current liabilities  |          |              | 110,349 |         |          |        | 128,929 | 
|LONG-TERM DEBT, net of current maturities       |                                                                                                                                              |                                  | 45,664                     |          |              |         | 81,379  |         
|SUBORDINATED NOTES, net of discount             |                                                                                                                                              |                                  | 92,193                     |          |              |         | 88,968  |         
|OTHER LIABILITIES                               |                                                                                                                                              |                                  | 1,174                      |          |              |         | 1,311   |         
|PREFERRED STOCK SUBJECT TO MANDATORY REDEMPTION |                                                                                                                                              |                                  | 1,271                      |          |              |         | 416     |         
|                                                |                                                                                                                                              |                                  |                            |          |              |        
|                                                |                                                                                                                                              |                                  | Total liabilities          |          |              | 250,651 |         |          |        | 301,003 | 
|COMMITMENTS AND CONTINGENCIES                   |                                                                                                                                              |                                  |                            |          |              |         |         |         
|STOCKHOLDERS EQUITY:                           |                                                                                                                                              |                                  |                            |          |              |         |         |         
|                                                | Preferred stock, $1 par value, 5,000,000 shares
    authorized, 1,400 mandatorily redeemable shares issued and
    outstanding, respectively |                                  |                            |         |              |         |         |         |       
|                                                | Common stock, $1 par value, 100,000,000 shares
    authorized, 32,573,882 and 32,583,882 shares issued,
    respectively                     |                                  |                            | 21,867   |              |         |         | 21,877   |       
|                                                | Subscriptions receivable                                                                                                                     |                                  |                            |         |              |         |         | (42      | )     
|                                                | Additional paid-in capital                                                                                                                   |                                  |                            | 190,901  |              |         |         | 191,759  |       
|                                                | Accumulated deficit                                                                                                                          |                                  |                            | (124,127 | )            |         |         | (108,654 | )     
|                                                | Treasury stock, 250,757 and 396,458 shares, respectively                                                                                     |                                  |                            | (1,644   | )            |         |         | (2,600   | )     
|                                                |                                                                                                                                              |                                  |                            |          |              |        
|                                                |                                                                                                                                              |                                  | Total stockholders equity |          |              | 86,997  |         |          |        | 102,340 | 
|                                                |                                                                                                                                              |                                  |                            |          |              |        
|                                                |                                                                                                                                              | $                                | 337,648                    |          |              | $       | 403,343 |         
|                                                |                                                                                                                                              |                                  |                            |          |              |        



2



---



##### Table of Contents



HORIZON OFFSHORE, INC. AND SUBSIDIARIES





CONSOLIDATED STATEMENTS OF OPERATIONS


|                                                                         |                                        |                             |         |            |      |   |         |            |  
|------------------------------------------------------------------------ | -------------------------------------- | --------------------------- | ------- | ---------- | ---- | - | ------- | ---------- | -
|                                                                         |                                        | Three Months Ended          |        
|                                                                         |                                        | March 31,                   |        
|                                                                         |                                        |                             |        
|                                                                         |                                        | 2005                        |         |            | 2004 |  
|                                                                         |                                        |                             |         |            |      |  
|                                                                         |                                        | (Unaudited)                 |        
|                                                                         |                                        | (In thousands, except share |        
|                                                                         |                                        | and per share data)         |        
|CONTRACT REVENUES                                                        |                                        | $                           | 37,346  |            |      | $ | 42,483  |           
|COST OF CONTRACT REVENUES                                                |                                        |                             | 34,750  |            |      |   | 42,607  |           
|                                                                         |                                        |                             |         |            |      |  
|                                                                         | Gross profit (loss)                    |                             |         | 2,596      |      |   |         | (124       | )
|SELLING, GENERAL AND ADMINISTRATIVE EXPENSES                             |                                        |                             | 5,568   |            |      |   | 5,841   |           
|                                                                         |                                        |                             |         |            |      |  
|                                                                         | Operating loss                         |                             |         | (2,972     | )    |   |         | (5,965     | )
|OTHER:                                                                   |                                        |                             |         |            |      |   |         |           
|                                                                         | Interest expense                       |                             |         | (10,314    | )    |   |         | (3,737     | )
|                                                                         | Interest income                        |                             |         | 38         |      |   |         | 14         |  
|                                                                         | Loss on debt extinguishment            |                             |         | (1,263     | )    |   |         | (165       | )
|                                                                         | Other income (expense), net            |                             |         | (57        | )    |   |         | (58        | )
|                                                                         |                                        |                             |         |            |      |  
|NET LOSS BEFORE INCOME TAXES                                             |                                        |                             | (14,568 | )          |      |   | (9,911  | )         
|INCOME TAX PROVISION                                                     |                                        |                             | 905     |            |      |   | 787     |           
|                                                                         |                                        |                             |         |            |      |  
|NET LOSS                                                                 |                                        | $                           | (15,473 | )          |      | $ | (10,698 | )         
|                                                                         |                                        |                             |         |            |      |  
|EARNINGS (LOSS) PER SHARE  BASIC AND DILUTED:                           |                                        |                             |         |            |      |   |         |           
|                                                                         | Net loss per share  basic and diluted |                             | $       | (0.48      | )    |   | $       | (0.40      | )
|                                                                         |                                        |                             |         |            |      |  
|WEIGHTED AVERAGE SHARES USED IN COMPUTING EARNINGS (LOSS) PER
    SHARE: |                                        |                             |         |            |      |   |         |           
|                                                                         | BASIC AND DILUTED                      |                             |         | 32,219,204 |      |   |         | 26,542,622 |  



3



---



##### Table of Contents



HORIZON OFFSHORE, INC. AND SUBSIDIARIES





CONSOLIDATED STATEMENTS OF CASH FLOWS


|                                                     |                                                                                                  |                                                                                      |                               |                                                     |       |         |         |         |       |         |         |  
|---------------------------------------------------- | ------------------------------------------------------------------------------------------------ | ------------------------------------------------------------------------------------ | ----------------------------- | --------------------------------------------------- | ----- | ------- | ------- | ------- | ----- | ------- | ------- | -
|                                                     |                                                                                                  | Three Months Ended                                                                   |                              
|                                                     |                                                                                                  | March 31,                                                                            |                              
|                                                     |                                                                                                  |                                                                                      |                              
|                                                     |                                                                                                  | 2005                                                                                 |                               |                                                     | 2004  |        
|                                                     |                                                                                                  |                                                                                      |                               |                                                     |       |        
|                                                     |                                                                                                  | (Unaudited)                                                                          |                              
|                                                     |                                                                                                  | (In thousands)                                                                       |                              
|CASH FLOWS FROM OPERATING ACTIVITIES:                |                                                                                                  |                                                                                      |                               |                                                     |       |         |         |        
|                                                     | Net loss                                                                                         |                                                                                      | $                             | (15,473                                             | )     |         | $       | (10,698 | )    
|                                                     | Adjustments to reconcile net loss to net cash provided by (used
    in) operating activities    |                                                                                      |                               |                                                     |       |         |         |         |      
|                                                     |                                                                                                  | Depreciation and amortization                                                        |                               |                                                     | 3,643 |         |         |         | 4,042 |        
|                                                     |                                                                                                  | Loss on sale of assets                                                               |                               |                                                     | 1     |         |         |         |      |        
|                                                     |                                                                                                  | Paid in-kind interest on subordinated notes                                          |                               |                                                     | 4,239 |         |         |         | 610   |        
|                                                     |                                                                                                  | Amortization of subordinated debt discount recorded as interest
    expense          |                               |                                                     | 1,963 |         |         |         | 266   |        
|                                                     |                                                                                                  | Amortization of deferred loan fees recorded as interest expense                      |                               |                                                     | 1,035 |         |         |         | 344   |        
|                                                     |                                                                                                  | Adjustment of mandatorily redeemable preferred stock charged to
    interest expense |                               |                                                     | 855   |         |         |         |      |        
|                                                     |                                                                                                  | Expense recognized for issuance of treasury stock for 401(k)
    plan contributions  |                               |                                                     | 98    |         |         |         | 110   |        
|                                                     |                                                                                                  | Loss on debt extinguishment                                                          |                               |                                                     | 1,263 |         |         |         | 165   |        
|                                                     |                                                                                                  | Changes in operating assets and liabilities                                         |                               |                                                     |       |         |         |         |       |        
|                                                     |                                                                                                  |                                                                                      | Restricted cash               |                                                     |       | (5,700  | )       |         |       | (5,335  | )      
|                                                     |                                                                                                  |                                                                                      | Accounts receivable           |                                                     |       | 44,174  |         |         |       | 5,943   |        
|                                                     |                                                                                                  |                                                                                      | Costs in excess of billings   |                                                     |       | (4,828  | )       |         |       | (2,761  | )      
|                                                     |                                                                                                  |                                                                                      | Billings in excess of costs   |                                                     |       | (3,160  | )       |         |       | 11,189  |        
|                                                     |                                                                                                  |                                                                                      | Inventory                     |                                                     |       | 411     |         |         |       | 4       |        
|                                                     |                                                                                                  |                                                                                      | Other assets                  |                                                     |       | (330    | )       |         |       | (1,453  | )      
|                                                     |                                                                                                  |                                                                                      | Accounts payable              |                                                     |       | (11,847 | )       |         |       | 3,936   |        
|                                                     |                                                                                                  |                                                                                      | Accrued and other liabilities |                                                     |       | (3,001  | )       |         |       | 139     |        
|                                                     |                                                                                                  |                                                                                      | Accrued job costs             |                                                     |       | (9,893  | )       |         |       | (16,910 | )      
|                                                     |                                                                                                  |                                                                                      | Current taxes payable         |                                                     |       | 443     |         |         |       | 228     |        
|                                                     |                                                                                                  |                                                                                      |                               |                                                     |       |        
|                                                     |                                                                                                  |                                                                                      |                               | Net cash provided by (used in) operating activities |       |         | 3,893   |         |       |         | (10,181 | )
|CASH FLOWS FROM INVESTING ACTIVITIES:                |                                                                                                  |                                                                                      |                               |                                                     |       |         |         |        
|                                                     | Purchases and additions to property and equipment                                                |                                                                                      |                               | (418                                                | )     |         |         | (2,050  | )    
|                                                     | Proceeds from sale of assets                                                                     |                                                                                      |                               | 1                                                   |       |         |         |        |      
|                                                     |                                                                                                  |                                                                                      |                               |                                                     |       |        
|                                                     |                                                                                                  |                                                                                      |                               | Net cash used in investing activities               |       |         | (417    | )       |       |         | (2,050  | )
|CASH FLOWS FROM FINANCING ACTIVITIES:                |                                                                                                  |                                                                                      |                               |                                                     |       |         |         |        
|                                                     | Principal payments on term debt                                                                  |                                                                                      |                               | (1,969                                              | )     |         |         | (2,409  | )    
|                                                     | Borrowings on revolving credit facilities                                                        |                                                                                      |                               |                                                    |       |         |         | 6,650   |      
|                                                     | Payments on revolving credit facilities                                                          |                                                                                      |                               | (27,299                                             | )     |         |         | (34,400 | )    
|                                                     | Proceeds from issuance of subordinated notes                                                     |                                                                                      |                               |                                                    |       |         |         | 28,305  |      
|                                                     | Proceeds from issuance of subordinated notes allocable to
    warrants                           |                                                                                      |                               |                                                    |       |         |         | 16,593  |      
|                                                     | Principal payments on subordinated notes                                                         |                                                                                      |                               | (3,481                                              | )     |         |         |        |      
|                                                     | Deferred loan fees                                                                               |                                                                                      |                               | (1,444                                              | )     |         |         | (1,470  | )    
|                                                     | Stock option and warrant transactions and other                                                  |                                                                                      |                               | 32                                                  |       |         |         | 6       |      
|                                                     |                                                                                                  |                                                                                      |                               |                                                     |       |        
|                                                     |                                                                                                  |                                                                                      |                               | Net cash (used in) provided by financing activities |       |         | (34,161 | )       |       |         | 13,275  |  
|                                                     |                                                                                                  |                                                                                      |                               |                                                     |       |        
|NET INCREASE (DECREASE) IN CASH AND CASH EQUIVALENTS |                                                                                                  |                                                                                      | (30,685                       | )                                                   |       |         | 1,044   |        
|CASH AND CASH EQUIVALENTS AT BEGINNING OF PERIOD     |                                                                                                  |                                                                                      | 37,975                        |                                                     |       |         | 10,115  |        
|                                                     |                                                                                                  |                                                                                      |                               |                                                     |       |        
|CASH AND CASH EQUIVALENTS AT END OF PERIOD           |                                                                                                  | $                                                                                    | 7,290                         |                                                     |       | $       | 11,159  |        
|                                                     |                                                                                                  |                                                                                      |                               |                                                     |       |        
|SUPPLEMENTAL DISCLOSURES:                            |                                                                                                  |                                                                                      |                               |                                                     |       |         |         |        
|                                                     | Cash paid for interest                                                                           |                                                                                      | $                             | 2,286                                               |       |         | $       | 2,831   |      
|                                                     | Cash paid for income taxes, net of refunds received                                              |                                                                                      | $                             | 433                                                 |       |         | $       | 559     |      
|NON-CASH INVESTING AND FINANCING ACTIVITIES:         |                                                                                                  |                                                                                      |                               |                                                     |       |         |         |        
|                                                     | Capital expenditures for property and equipment included in
    accrued liabilities              |                                                                                      | $                             | 2,647                                               |       |         | $       | 2,450   |      
|                                                     | Repayment of debt with proceeds of subordinated notes and
    additional term debt               |                                                                                      | $                             |                                                    |       |         | $       | 15,000  |      
|                                                     | Payment of deferred loan fees and warrant issuance costs with
    proceeds of subordinated notes |                                                                                      | $                             |                                                    |       |         | $       | 5,502   |      



4



---



##### Table of Contents



HORIZON OFFSHORE, INC. AND SUBSIDIARIES





NOTES TO CONSOLIDATED FINANCIAL STATEMENTS




|   |                                                                
|-- | ---------------------------------------------------------------
|1. | Organization and Summary of Significant Accounting
    Policies



| |                                       
| | --------------------------------------
| | Organization and Basis of Presentation





| |                  
| | -----------------
| | Status of Horizon





5



---



##### Table of Contents



HORIZON OFFSHORE, INC. AND SUBSIDIARIES


NOTES TO CONSOLIDATED FINANCIAL STATEMENTS 
(Continued)








| |                      
| | ---------------------
| | Significant Customers



|           |  |              |     |  |      |  |     | 
|---------- |  | ------------ | --- |  | ---- |  | --- | 
|           |  | Three Months |    
|           |  | Ended        |    
|           |  | March 31,    |    
|           |  |              |    
|Customer   |  | 2005         |     |  | 2004 | 
|           |  |              |     |  |      | 
|Customer A |  |              | 29% |  |      |  | %  | 
|Customer B |  |              | 23% |  |      |  | %  | 
|Customer C |  |              | 13% |  |      |  | 11% | 
|Customer D |  |              | 10% |  |      |  | 11% | 
|Customer E |  |              | %  |  |      |  | 26% | 
|Customer F |  |              | %  |  |      |  | 13% | 





| |                             
| | ----------------------------
| | Concentration of Credit Risk



6



---



##### Table of Contents



HORIZON OFFSHORE, INC. AND SUBSIDIARIES


NOTES TO CONSOLIDATED FINANCIAL STATEMENTS 
(Continued)






| |                            
| | ---------------------------
| | Principles of Consolidation





| |                 
| | ----------------
| | Interest Expense





| |                    
| | -------------------
| | Accounts Receivable





| |             
| | ------------
| | Other Assets



|                           |  |           |        |  |              |   |        | 
|-------------------------- |  | --------- | ------ |  | ------------ | - | ------ | 
|                           |  | March 31, |        |  | December 31, |  
|                           |  | 2005      |        |  | 2004         |  
|                           |  |           |        |  |              |  
|Capitalized dry-dock costs |  | $         | 20,613 |  |              | $ | 17,007 | 
|Prepaid loan fees          |  |           | 8,199  |  |              |   | 8,548  | 
|Deposits                   |  |           | 294    |  |              |   | 294    | 
|Other                      |  |           | 899    |  |              |   | 822    | 
|                           |  |           |        |  |              |  
|                           |  | $         | 30,005 |  |              | $ | 26,671 | 
|                           |  |           |        |  |              |  

Sea
Horizon Pacific Horizon




7



---



##### Table of Contents



HORIZON OFFSHORE, INC. AND SUBSIDIARIES


NOTES TO CONSOLIDATED FINANCIAL STATEMENTS 
(Continued)








| |          
| | ---------
| | Inventory





| |                
| | ---------------
| | Restricted Cash







| |                         
| | ------------------------
| | Stock-Based Compensation



8



---



##### Table of Contents



HORIZON OFFSHORE, INC. AND SUBSIDIARIES


NOTES TO CONSOLIDATED FINANCIAL STATEMENTS 
(Continued)




|                                                                                                                                           |  |                    |         |   |      |   |         |  
|------------------------------------------------------------------------------------------------------------------------------------------ |  | ------------------ | ------- | - | ---- | - | ------- | -
|                                                                                                                                           |  | Three Months Ended |        
|                                                                                                                                           |  | March 31,          |        
|                                                                                                                                           |  |                    |        
|                                                                                                                                           |  | 2005               |         |   | 2004 |  
|                                                                                                                                           |  |                    |         |   |      |  
|Net loss, as reported                                                                                                                      |  | $                  | (15,473 | ) |      | $ | (10,698 | )
|Deduct: Total stock-based compensation expense determined under
    fair value based method for all awards, net of related tax
    effects |  |                    | (135    | ) |      |   | (406    | )
|                                                                                                                                           |  |                    |         |   |      |  
|Pro forma net loss                                                                                                                         |  | $                  | (15,608 | ) |      | $ | (11,104 | )
|                                                                                                                                           |  |                    |         |   |      |  

|                           |                                 |                    |   |       |      |  |   |       |  
|-------------------------- | ------------------------------- | ------------------ | - | ----- | ---- |  | - | ----- | -
|                           |                                 | Three Months Ended |  
|                           |                                 | March 31,          |  
|                           |                                 |                    |  
|                           |                                 | 2005               |   |       | 2004 | 
|                           |                                 |                    |   |       |      | 
|Earnings (loss) per share: |                                 |                    |   |       |      |  |   |      
|                           | Basic and Diluted  as reported |                    | $ | (0.48 | )    |  | $ | (0.40 | )
|                           |                                 |                    |   |       |      | 
|                           | Basic and Diluted  pro forma   |                    | $ | (0.48 | )    |  | $ | (0.42 | )
|                           |                                 |                    |   |       |      | 



|                                |  |                    |      |  
|------------------------------- |  | ------------------ | ---- | -
|                                |  | Three Months Ended |     
|                                |  | March 31, 2004     |     
|                                |  |                    |     
|Expected option life (in years) |  |                    | 7    |  
|Expected volatility             |  |                    | 76.7 | %
|Risk-free interest rate         |  |                    | 3.52 | %



| |             
| | ------------
| | Income Taxes





9



---



##### Table of Contents



HORIZON OFFSHORE, INC. AND SUBSIDIARIES


NOTES TO CONSOLIDATED FINANCIAL STATEMENTS 
(Continued)








| |                  
| | -----------------
| | Reclassifications





| |                                 
| | --------------------------------
| | Recent Accounting Pronouncements





10



---



##### Table of Contents



HORIZON OFFSHORE, INC. AND SUBSIDIARIES


NOTES TO CONSOLIDATED FINANCIAL STATEMENTS 
(Continued)




|   |                       
|-- | ----------------------
|2. | Property and Equipment



|                                       |  |           |         |   |              |   |         |  
|-------------------------------------- |  | --------- | ------- | - | ------------ | - | ------- | -
|                                       |  | March 31, |         |   | December 31, |  
|                                       |  | 2005      |         |   | 2004         |  
|                                       |  |           |         |   |              |  
|Barges, vessels, and related equipment |  | $         | 222,147 |   |              | $ | 222,036 |  
|Land and buildings                     |  |           | 19,642  |   |              |   | 19,642  |  
|Machinery and equipment                |  |           | 245     |   |              |   | 245     |  
|Office furniture and equipment         |  |           | 6,257   |   |              |   | 6,232   |  
|Leasehold improvements                 |  |           | 4,221   |   |              |   | 4,213   |  
|                                       |  |           |         |   |              |  
|                                       |  |           | 252,512 |   |              |   | 252,368 |  
|Less  accumulated depreciation        |  |           | (55,764 | ) |              |   | (53,564 | )
|                                       |  |           |         |   |              |  
|Property and equipment, net            |  | $         | 196,748 |   |              | $ | 198,804 |  
|                                       |  |           |         |   |              |  

Sea Horizon,






|                               |  |  |             | 
|------------------------------ |  |  | ----------- | 
|Buildings                      |  |  | 15 years    | 
|Machinery and equipment        |  |  | 8-15  years | 
|Office furniture and equipment |  |  | 3-5 years   | 
|Leasehold improvements         |  |  | 3-10  years | 



|                                             |  |                    |       |  |      |   |       | 
|-------------------------------------------- |  | ------------------ | ----- |  | ---- | - | ----- | 
|                                             |  | Three Months Ended |      
|                                             |  | March 31,          |      
|                                             |  |                    |      
|                                             |  | 2005               |       |  | 2004 |  
|                                             |  |                    |       |  |      |  
|Cost of contract revenues                    |  | $                  | 1,871 |  |      | $ | 2,562 | 
|Selling, general and administrative expenses |  |                    | 330   |  |      |   | 367   | 
|                                             |  |                    |       |  |      |  
|                                             |  | $                  | 2,201 |  |      | $ | 2,929 | 
|                                             |  |                    |       |  |      |  

11



---



##### Table of Contents



HORIZON OFFSHORE, INC. AND SUBSIDIARIES


NOTES TO CONSOLIDATED FINANCIAL STATEMENTS 
(Continued)




|   |                     
|-- | --------------------
|3. | Stockholders Equity



| |                   
| | ------------------
| | Earnings Per Share





| |         
| | --------
| | Warrants





| |                                       
| | --------------------------------------
| | Mandatorily Redeemable Preferred Stock





| |                          
| | -------------------------
| | Stockholders Rights Plan



12



---



##### Table of Contents



HORIZON OFFSHORE, INC. AND SUBSIDIARIES


NOTES TO CONSOLIDATED FINANCIAL STATEMENTS 
(Continued)






| |               
| | --------------
| | Treasury Stock





|   |                           
|-- | --------------------------
|4. | Related Party Transactions



|                         |  |              |     |  |      |   |     | 
|------------------------ |  | ------------ | --- |  | ---- | - | --- | 
|                         |  | Three Months |    
|                         |  | Ended        |    
|                         |  | March 31,    |    
|                         |  |              |    
|                         |  | 2005         |     |  | 2004 |  
|                         |  |              |     |  |      |  
|Amount billed to Horizon |  | $            | 1.0 |  |      | $ | 2.2 | 
|Amount paid to Odyssea   |  | $            | 1.3 |  |      | $ | 1.8 | 





|                   |  |                        |  |        |       |                     |           |   |            |                |  |                  |                  |  |  |                 |       |  |            |   |      |  |  |   |       | 
|------------------ |  | ---------------------- |  | ------ | ----- | ------------------- | --------- | - | ---------- | -------------- |  | ---------------- | ---------------- |  |  | --------------- | ----- |  | ---------- | - | ---- |  |  | - | ----- | 
|                   |  |                        |  |        |       | Amount Purchased By |          
|                   |  |                        |  |        |       |                     |          
|                   |  |                        |  | Total  |       |                     |           |   | B. Riley & |                |  | Falcon Mezzanine |                  |  | 
|                   |  |                        |  | Amount |       |                     | Elliott   |   |            | Co., Inc.      |  |                  | Investments, LLC |  |  | Lloyd I. Miller |       |  | Other      |  
|Date               |  | Notes                  |  | Issued |       |                     | Companies |   |            | and affiliates |  |                  | and affiliates   |  |  | and affiliates  |       |  | Purchasers |  
|                   |  |                        |  |        |       |                     |           |   |            |                |  |                  |                  |  |  |                 |       |  |            |  
|March 11, 2004     |  | 16% Subordinated Notes |  | $      | 65.4  |                     |           | $ | 15.0       |                |  | $                | 5.25             |  |  | $               | 17.85 |  |            | $ | 10.5 |  |  | $ | 16.8  | 
|May 27, 2004       |  | 16% Subordinated Notes |  | $      | 3.4   |                     |           | $ | 0.8        |                |  | $                | 0.3              |  |  | $               | 1.0   |  |            | $ | 0.6  |  |  | $ | 0.7   | 
|May 27, 2004       |  | 18% Subordinated Notes |  | $      | 18.75 |                     |           | $ | 5.3        |                |  | $                | 2.3              |  |  | $               | 4.7   |  |            | $ | 4.8  |  |  | $ | 1.65  | 
|September 17, 2004 |  | 18% Subordinated Notes |  | $      | 5.3   |                     |           | $ | 1.6        |                |  | $                | 0.7              |  |  | $               | 1.4   |  |            | $ | 1.4  |  |  | $ | 0.2   | 
|November 4, 2004   |  | 18% Subordinated Notes |  | $      | 9.625 |                     |           | $ | 3.3        |                |  | $                | 1.4              |  |  | $               | 1.9   |  |            | $ | 3.0  |  |  | $ | 0.025 | 

13



---



##### Table of Contents



HORIZON OFFSHORE, INC. AND SUBSIDIARIES


NOTES TO CONSOLIDATED FINANCIAL STATEMENTS 
(Continued)




|   |     
|-- | ----
|5. | Debt











14



---



##### Table of Contents



HORIZON OFFSHORE, INC. AND SUBSIDIARIES


NOTES TO CONSOLIDATED FINANCIAL STATEMENTS 
(Continued)












| |   |                                                                                                                                                                                                                                                                                                                                                                                                                                                                          
| | - | -------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
| |  | a ratio of current assets to current liabilities, as defined in
    our loan agreements, of 1.10 to 1 for the period ending
    March 31, 2005 (actual was 1.26 at March 31, 2005),
    and each period thereafter, each computed by excluding our
    revolving credit facilities and balloon payments from current
    liabilities;                                                                                                                                    
|
| |  | a fixed charge coverage ratio, as defined in our loan
    agreements, of 1.33 to 1 for the nine-month period ending
    March 31, 2005, (actual was 1.44 to 1 at March 31,
    2005), and 1.33 to 1 for each period thereafter on a rolling
    four quarter basis;                                                                                                                                                                                                      
|
| |  | a tangible net worth, as defined in our loan agreements, in an
    amount not less than the sum of $110 million plus 75% of
    our consolidated net income for each fiscal quarter which has
    been completed as of the date of calculation, commencing with
    the fiscal quarter ending March 31, 2004 plus 90% of the
    net proceeds of any common stock or other equity issued after
    December 31, 2003 (actual was $133 million at
    March 31, 2005); and
|
| |  | the sum of our net income before gains and losses on sales of
    assets (to the extent such gains and losses are included in
    earnings), plus interest expense, plus tax expense and plus
    depreciation and                                                                                                                                                                                                                                                       

15



---



##### Table of Contents



HORIZON OFFSHORE, INC. AND SUBSIDIARIES


NOTES TO CONSOLIDATED FINANCIAL STATEMENTS 
(Continued)




| |  |                                                                                                                                                      
| |  | -----------------------------------------------------------------------------------------------------------------------------------------------------
| |  | amortization, as defined in our loan agreements, to be positive
    (actual was positive $0.9 million for the three months
    ended March 31, 2005).





|   |                            
|-- | ---------------------------
|6. | Loss on Debt Extinguishment





|   |                  
|-- | -----------------
|7. | Severance Charges



|                                    |  |   |       |  
|----------------------------------- |  | - | ----- | -
|Balance, December 31, 2004          |  | $ | 2,198 |  
|Severance and restructuring expense |  |   |      |  
|Payments                            |  |   | (351  | )
|                                    |  |   |      
|Balance, March 31, 2005             |  | $ | 1,847 |  
|                                    |  |   |      

16



---



##### Table of Contents



HORIZON OFFSHORE, INC. AND SUBSIDIARIES


NOTES TO CONSOLIDATED FINANCIAL STATEMENTS 
(Continued)




|   |                       
|-- | ----------------------
|8. | Geographic Information



|              |                               |                    |   |      |      |  |   |      |      |  
|------------- | ----------------------------- | ------------------ | - | ---- | ---- |  | - | ---- | ---- | -
|              |                               | Three Months Ended |  
|              |                               | March 31,          |  
|              |                               |                    |  
|              |                               | 2005               |   |      | 2004 | 
|              |                               |                    |   |      |      | 
|Revenues:     |                               |                    |   |      |      |  |   |     
|              | Domestic                      |                    | $ | 12.3 |      |  | $ | 21.2 |     
|              | Latin America                 |                    |   | 0.3  |      |  |   | 5.3  |     
|              | West Africa                   |                    |   | 8.5  |      |  |   | 11.0 |     
|              | Southeast Asia/ Mediterranean |                    |   | 16.2 |      |  |   | 5.0  |     
|              | Other                         |                    |   |     |      |  |   |     |     
|              |                               |                    |   |      |      | 
|              |                               | Total              |   | $    | 37.3 |  |   | $    | 42.5 |  
|              |                               |                    |   |      |      | 
|Gross Profit: |                               |                    |   |      |      |  |   |     
|              | Domestic                      |                    | $ | (1.2 | )    |  | $ | (0.9 | )   
|              | Latin America                 |                    |   | (1.4 | )    |  |   | (1.1 | )   
|              | West Africa                   |                    |   | 0.9  |      |  |   | 1.0  |     
|              | Southeast Asia/ Mediterranean |                    |   | 4.3  |      |  |   | 0.9  |     
|              | Other                         |                    |   |     |      |  |   |     |     
|              |                               |                    |   |      |      | 
|              |                               | Total              |   | $    | 2.6  |  |   | $    | (0.1 | )
|              |                               |                    |   |      |      | 

|                           |                              |           |   |       |              |  |   |       |       | 
|-------------------------- | ---------------------------- | --------- | - | ----- | ------------ |  | - | ----- | ----- | 
|                           |                              | As of     |  
|                           |                              |           |  
|                           |                              | March 31, |   |       | December 31, | 
|                           |                              | 2005      |   |       | 2004         | 
|                           |                              |           |   |       |              | 
|Property and Equipment(1): |                              |           |   |       |              |  |   |      
|                           | Domestic                     |           | $ | 118.2 |              |  | $ | 119.9 |      
|                           | Latin America                |           |   | 0.1   |              |  |   | 0.1   |      
|                           | West Africa                  |           |   | 18.7  |              |  |   | 18.8  |      
|                           | Southeast Asia/Mediterranean |           |   | 59.7  |              |  |   | 60.0  |      
|                           |                              |           |   |       |              | 
|                           |                              | Total     |   | $     | 196.7        |  |   | $     | 198.8 | 
|                           |                              |           |   |       |              | 






|    |                                                                                                                                                                                                                                                                                                                                                                                        
|--- | ---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
|(1) | Property and equipment includes vessels, property and related
    marine equipment. Amounts reflect the location of the assets at
    March 31, 2005 and December 31, 2004. Equipment
    location changes as necessary to meet working requirements.
    Other identifiable assets include inventory and other long-term
    assets, and are primarily located in the domestic region.

17



---



##### Table of Contents








|        |                                                                                          
|------- | -----------------------------------------------------------------------------------------
|Item 2. | Managements Discussion and Analysis of Financial
    Condition and Results of Operations

You should read the following discussion and analysis
together with our consolidated financial statements and notes
thereto and the discussion Managements Discussion
and Analysis of Financial Condition and Results of
Operations and Cautionary Statements included
in our 2004 Annual Report on Form 10-K. The following
information contains forward-looking statements, which are
subject to risks and uncertainties. Should one or of
these risks or uncertainties materialize, actual results may
differ from those expressed or implied by the forward-looking
statements.


General








| |   |                                                                           
| | - | --------------------------------------------------------------------------
| |  | installing pipelines;                                                     
|
| |  | providing pipebury, hook-up and commissioning services;                   
|
| |  | installing production platforms and other structures; and                 
|
| |  | disassembling and salvaging production platforms and other
    structures.





| |   |                                                                                  
| | - | ---------------------------------------------------------------------------------
| |  | the price of oil and gas and industry perception of future
    prices;           
|
| |  | the ability of the oil and gas industry to access capital;                       
|
| |  | expectations about future demand and prices;                                     
|
| |  | the cost of exploring for, producing and developing oil and gas
    reserves;    
|
| |  | sale and expiration dates of offshore leases in the United
    States and abroad;
|
| |  | discovery rates of new oil and gas reserves in offshore areas;                   
|
| |  | local and international political and economic conditions;                       
|
| |  | governmental regulations; and                                                    
|
| |  | the availability and cost of capital.                                            



Overview




18



---



##### Table of Contents









19



---



##### Table of Contents



Sea Horizon Brazos
Horizon




Critical Accounting Policies and Estimates








| |                    
| | -------------------
| | Revenue Recognition



20



---



##### Table of Contents











| |                    
| | -------------------
| | Accounts Receivable





21



---



##### Table of Contents







| |             
| | ------------
| | Other Assets





| |                       
| | ----------------------
| | Property and Equipment







| |                         
| | ------------------------
| | Stock-Based Compensation



22



---



##### Table of Contents







| |                     
| | --------------------
| | Federal Income Taxes







23



---



##### Table of Contents



Results of Operations




|              |                                |                    |   |      |      |  |   |      |      |  
|------------- | ------------------------------ | ------------------ | - | ---- | ---- |  | - | ---- | ---- | -
|              |                                | Three Months Ended |  
|              |                                | March 31,          |  
|              |                                |                    |  
|              |                                | 2005               |   |      | 2004 | 
|              |                                |                    |   |      |      | 
|Revenues:     |                                |                    |   |      |      |  |   |     
|              | Domestic  U.S. Gulf of Mexico |                    | $ | 12.3 |      |  | $ | 17.9 |     
|              | Domestic  Other               |                    |   |     |      |  |   | 3.3  |     
|              | Latin America                  |                    |   | 0.3  |      |  |   | 5.3  |     
|              | West Africa                    |                    |   | 8.5  |      |  |   | 11.0 |     
|              | Southeast Asia/Mediterranean   |                    |   | 16.2 |      |  |   | 5.0  |     
|              | Other                          |                    |   |     |      |  |   |     |     
|              |                                |                    |   |      |      | 
|              |                                | Total              |   | $    | 37.3 |  |   | $    | 42.5 |  
|              |                                |                    |   |      |      | 
|Gross Profit: |                                |                    |   |      |      |  |   |     
|              | Domestic  U.S. Gulf of Mexico |                    | $ | (1.2 | )    |  | $ | (1.9 | )   
|              | Domestic  Other               |                    |   |     |      |  |   | 1.0  |     
|              | Latin America                  |                    |   | (1.4 | )    |  |   | (1.1 | )   
|              | West Africa                    |                    |   | 0.9  |      |  |   | 1.0  |     
|              | Southeast Asia/Mediterranean   |                    |   | 4.3  |      |  |   | 0.9  |     
|              | Other                          |                    |   |     |      |  |   |     |     
|              |                                |                    |   |      |      | 
|              |                                | Total              |   | $    | 2.6  |  |   | $    | (0.1 | )
|              |                                |                    |   |      |      | 

Quarter Ended March 31, 2005 Compared to the Quarter
Ended March 31, 2004


Contract Revenues.


Gross Profit.


Selling, General and Administrative Expenses.


24



---



##### Table of Contents



Interest Expense.


Interest Income.


Loss on Debt Extinguishment.


Other Income (Expense), Net.


Income Taxes.


Net Loss.


Liquidity and Capital Resources




| |        
| | -------
| | General

Gulf Horizon ,


25



---



##### Table of Contents







| |              
| | -------------
| | Recent Events





| |           
| | ----------
| | Cash Flows









| |                
| | ---------------
| | Working Capital



26



---



##### Table of Contents





| |             
| | ------------
| | Indebtedness













27



---



##### Table of Contents











28



---



##### Table of Contents





| |                      
| | ---------------------
| | Claims and Litigation





| |                               
| | ------------------------------
| | Off-Balance Sheet Arrangements





| |                                                 
| | ------------------------------------------------
| | Contractual Obligations and Capital Expenditures



|                                        |  |           |        |  |      |   |        |      |  |   |        |  |  |      |       |  |            |   |       |       |  |   |        |  |  |   |         | 
|--------------------------------------- |  | --------- | ------ |  | ---- | - | ------ | ---- |  | - | ------ |  |  | ---- | ----- |  | ---------- | - | ----- | ----- |  | - | ------ |  |  | - | ------- | 
|                                        |  | Remainder |        |  |      |   |        |      |  |   |        |  |  |      |      
|                                        |  | of 2005   |        |  | 2006 |   |        | 2007 |  |   | 2008   |  |  | 2009 |       |  | Thereafter |   |       | Total | 
|                                        |  |           |        |  |      |   |        |      |  |   |        |  |  |      |       |  |            |   |       |       | 
|Principal and interest payments on debt |  | $         | 20,711 |  |      | $ | 42,200 |      |  | $ | 68,887 |  |  | $    | 5,906 |  |            | $ | 5,673 |       |  | $ | 47,075 |  |  | $ | 190,452 | 
|Operating leases                        |  |           | 2,050  |  |      |   | 2,537  |      |  |   | 2,491  |  |  |      | 2,288 |  |            |   | 153   |       |  |   | 269    |  |  |   | 9,788   | 
|Other long-term liabilities             |  |           |       |  |      |   |       |      |  |   |       |  |  |      |      |  |            |   |      |       |  |   | 1,271  |  |  |   | 1,271   | 
|                                        |  |           |        |  |      |   |        |      |  |   |        |  |  |      |       |  |            |   |       |       | 
|                                        |  | $         | 22,761 |  |      | $ | 44,737 |      |  | $ | 71,378 |  |  | $    | 8,194 |  |            | $ | 5,826 |       |  | $ | 48,615 |  |  | $ | 201,511 | 
|                                        |  |           |        |  |      |   |        |      |  |   |        |  |  |      |       |  |            |   |       |       | 



Forward-Looking Statements






| |   |                                                                                                                                                                                                        
| | - | -------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
| |  | our ability to complete the debt for equity exchange transaction
    contemplated by the Recapitalization Agreement;                                                                                   
|
| |  | our substantial current indebtedness continues to adversely
    affect our financial condition and the availability of cash to
    fund our working capital needs;                                     
|
| |  | our ability to comply with our financial covenants in the future;                                                                                                                                      
|
| |  | our ability to meet our obligations under the terms of our
    indebtedness;                                                                                                                           
|
| |  | we will need additional financing in the future;                                                                                                                                                       
|
| |  | the potential receipt of an audit opinion with a going
    concern explanatory paragraph from our independent
    registered public accounting firm would likely adversely affect
    our operations;
|
| |  | we have had operating losses for 2002, 2003 and 2004 and the
    first three months of 2005, and there can be no assurance that
    we will generate operating income in the future;                   
|
| |  | the outcome of the arbitration of our claims against Pemex;                                                                                                                                            

29



---



##### Table of Contents





| |   |                                                                                                                                                                                                                                                                                                                                        
| | - | ---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
| |  | the outcome of litigation with Williams;                                                                                                                                                                                                                                                                                               
|
| |  | the outcome of litigation with the underwriter of the insurance
    coverage on the Gulf Horizon;                                                                                                                                                                                                                                      
|
| |  | our common stock was delisted from the NASDAQ National Market,
    effective as of the close of business on April 1, 2005;                                                                                                                                                                                                             
|
| |  | industry volatility, including the level of capital expenditures
    by oil and gas companies due to fluctuations in the price, and
    perceptions of the future price of oil and gas;                                                                                                                                                
|
| |  | contract bidding risks, including those involved in performing
    projects on a fixed-price basis and extra work outside the
    original scope of work, and the successful negotiation and
    collection of such contract claims;                                                                                                   
|
| |  | our ability to obtain performance bonds and letters of credit if
    required to secure our performance under new international
    contracts;                                                                                                                                                                                         
|
| |  | the highly competitive nature of the marine construction
    business;                                                                                                                                                                                                                                                                 
|
| |  | operating hazards, including the unpredictable effect of natural
    occurrences on operations and the significant possibility of
    accidents resulting in personal injury and property damage;                                                                                                                                      
|
| |  | the seasonality of the offshore construction industry in the
    U.S. Gulf of Mexico;                                                                                                                                                                                                                                                  
|
| |  | the risks involved in the expansion of our operations into
    international offshore oil and gas producing areas, where we
    have previously not been operating;                                                                                                                                                                    
|
| |  | our dependence on the continued strong working relationships
    with significant customers operating in the U.S. Gulf of
    Mexico;                                                                                                                                                                                                  
|
| |  | percentage-of-completion accounting;                                                                                                                                                                                                                                                                                                   
|
| |  | the continued active participation of our executive officers and
    key operating personnel;                                                                                                                                                                                                                                          
|
| |  | the effect on our performance of regulatory programs and
    environmental matters;                                                                                                                                                                                                                                                    
|
| |  | the risks involved in joint venture operations required from
    time to time on major international projects;                                                                                                                                                                                                                         
|
| |  | our compliance with the Sarbanes-Oxley Act of 2002 and the
    significant expansion of securities law regulation of corporate
    governance, accounting practices, reporting and disclosure that
    affects publicly traded companies, particularly related to
    Section 404 dealing with our system of internal
    controls; and
|
| |  | a possible terrorist attack or armed conflict could harm our
    business.                                                                                                                                                                                                                                                             










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



30



---



##### Table of Contents
















|        |                        
|------- | -----------------------
|Item 4. | Controls and Procedures



| |     |                                                 
| | --- | ------------------------------------------------
| | (a) | Evaluation of disclosure controls and procedures





| |     |                                                     
| | --- | ----------------------------------------------------
| | (b) | Changes in internal control over financial reporting








PART II. OTHER INFORMATION







|        |                  
|------- | -----------------
|Item 1. | Legal Proceedings



31



---



##### Table of Contents










|        |         
|------- | --------
|Item 6. | Exhibits



|     |  |                                                                               
|---- |  | ------------------------------------------------------------------------------
|3.1  |  | Amended and Restated Certificate of Incorporation of the
    Company(1)       
|3.2  |  | Bylaws of the Company(1)                                                      
|31.1 |  | Certification Pursuant to Section 302 of the Sarbanes-Oxley
    Act of 2002(2)
|31.2 |  | Certification Pursuant to Section 302 of the Sarbanes-Oxley
    Act of 2002(2)
|32.1 |  | Certification Pursuant to Section 906 of the Sarbanes-Oxley
    Act of 2002(2)
|32.2 |  | Certification Pursuant to Section 906 of the Sarbanes-Oxley
    Act of 2002(2)






|    |                                                                                                                
|--- | ---------------------------------------------------------------------------------------------------------------
|(1) | Incorporated by reference to our Registration Statement on
    Form S-1 (Registration Statement No. 333-43965).
|   
|(2) | Filed herewith.                                                                                                

32



---



##### Table of Contents






SIGNATURES






| |                                           
| | ------------------------------------------
| | Horizon Offshore, Inc.                    
|
| | /s/ Ronald D. Mogel                       
| |                                           
| | Ronald D. Mogel                           
| | Vice President and Chief Financial Officer



33



---



##### Table of Contents



INDEX TO EXHIBITS


|        |  |                                                                               
|------- |  | ------------------------------------------------------------------------------
|Exhibit |  | Description                                                                   
|        |  |                                                                               
|3.1     |  | Amended and Restated Certificate of Incorporation of the
    Company(1)       
|3.2     |  | Bylaws of the Company(1)                                                      
|31.1    |  | Certification Pursuant to Section 302 of the Sarbanes-Oxley
    Act of 2002(2)
|31.2    |  | Certification Pursuant to Section 302 of the Sarbanes-Oxley
    Act of 2002(2)
|32.1    |  | Certification Pursuant to Section 906 of the Sarbanes-Oxley
    Act of 2002(2)
|32.2    |  | Certification Pursuant to Section 906 of the Sarbanes-Oxley
    Act of 2002(2)






|    |                                                                                                                
|--- | ---------------------------------------------------------------------------------------------------------------
|(1) | Incorporated by reference to our Registration Statement on
    Form S-1 (Registration Statement No. 333-43965).
|   
|(2) | Filed herewith.