##### Table of Contents



UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
 Washington, D.C. 20549
 
 FORM 10-Q
 
 þ
    
    QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES
EXCHANGE ACT OF 1934
 For the quarterly period ended September 30, 2008
 or
 o
    
    TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE
SECURITIES EXCHANGE ACT OF 1934
 Commission file number: 0-51582
 
 HERCULES OFFSHORE, INC.
 (Exact name of registrant as specified in its charter)
 
 Delaware
    
    56-2542838(State or other jurisdiction of 
incorporation or organization)
    
    (I.R.S. Employer
Identification No.)9 Greenway Plaza, Suite 2200
Houston, Texas
    
    77046(Address of principal executive offices)
    
    (Zip Code)
 (713) 350-5100
(Registrants telephone number, including area code)
 
 þ o
  þ o o o
  o þ
  Common Stock, par value $0.01 per share
    
    Outstanding as of October 24, 200887,958,177




---



##### 



HERCULES OFFSHORE, INC.
 INDEX
 Page No.PART I. FINANCIAL INFORMATIONItem 1.
    
    Financial Statements:Consolidated Balance Sheets as of September 30,
2008 and December 31, 2007
    
    3Consolidated Statements of Operations for the
three and nine months ended September 30, 2008,
and September 30, 2007
    
    4Consolidated Statements of Cash Flows for the
nine months ended September 30, 2008 and
September 30, 2007
    
    5Consolidated Statements of Comprehensive Income
for the three and nine months ended September 30,
2008 and September 30, 2007
    
    6Notes to Unaudited Consolidated Financial
Statements
    
    7Item 2.
    
    Managements Discussion and Analysis of Financial
Condition and Results of Operations
    
    20Item 3.
    
    Quantitative and Qualitative Disclosures about
Market Risk
    
    36Item 4.
    
    Controls and Procedures
    
    37PART II. OTHER INFORMATIONItem 1.
    
    Legal Proceedings
    
    38Item 1A.
    
    Risk Factors
    
    38Item 2.
    
    Unregistered Sales of Equity Securities and Use of Proceeds
    
    38Item 6.
    
    Exhibits
    
    38Signatures
    
    39EX-31.1EX-31.2EX-32.1
  2




---



##### Table of Contents



PART I. FINANCIAL INFORMATION
 
 ITEM 1. FINANCIAL STATEMENTS
 HERCULES OFFSHORE, INC. AND SUBSIDIARIES
 
 CONSOLIDATED BALANCE SHEETS
 (In thousands, except par value)
 September 30,
    
    
    December 31,2008
    
    
    2007(Unaudited)ASSETSCurrent Assets:Cash and Cash Equivalents
    
    $
    106,177
    
    
    $
    212,452Marketable Securities
    
    
    
    
    
    
    39,300Accounts Receivable, Net
    
    
    340,275
    
    
    
    221,663Insurance Claims Receivable
    
    
    1,088
    
    
    
    43,342Supplies
    
    
    2,493
    
    
    
    2,494Prepaids
    
    
    51,871
    
    
    
    31,417Current Deferred Tax Asset
    
    
    20,052
    
    
    
    18,960Other
    
    
    18,423
    
    
    
    23,565540,379
    
    
    
    593,193Property and Equipment, Net
    
    
    2,434,772
    
    
    
    2,060,224Goodwill
    
    
    941,318
    
    
    
    940,241Other Assets, Net
    
    
    44,657
    
    
    
    50,290$
    3,961,126
    
    
    $
    3,643,948LIABILITIES AND STOCKHOLDERS EQUITYCurrent Liabilities:Short-term Debt and Current Portion of Long-term Debt
    
    $
    19,941
    
    
    $
    21,653Insurance Note Payable
    
    
    25,771
    
    
    
    16,931Accounts Payable
    
    
    111,174
    
    
    
    105,527Accrued Liabilities
    
    
    91,057
    
    
    
    80,138Taxes Payable
    
    
    18,934
    
    
    
    23,006Other Current Liabilities
    
    
    38,980
    
    
    
    20,870305,857
    
    
    
    268,125Long-term Debt, Net of Current Portion
    
    
    1,135,512
    
    
    
    890,013Other Liabilities
    
    
    27,076
    
    
    
    15,493Deferred Income Taxes
    
    
    455,486
    
    
    
    458,884Commitments and ContingenciesStockholders Equity:Common Stock, $0.01 Par Value; 200,000 Shares Authorized; 89,434 and
88,876 Shares
Issued, Respectively; 87,958 and 88,857 Shares Outstanding, Respectively
    
    
    894
    
    
    
    889Capital in Excess of Par Value
    
    
    1,752,850
    
    
    
    1,731,882Treasury
Stock, at Cost, 1,476 Shares and 19 Shares, Respectively
    
    
    (50,034
    )
    
    
    (582
    )Accumulated Other Comprehensive Loss
    
    
    (7,763
    )
    
    
    (8,117
    )Retained Earnings
    
    
    341,248
    
    
    
    287,3612,037,195
    
    
    
    2,011,433$
    3,961,126
    
    
    $
    3,643,948
  3




---



##### Table of Contents



HERCULES
OFFSHORE, INC. AND SUBSIDIARIES
CONSOLIDATED STATEMENTS OF OPERATIONS
 (In thousands, except per share data)
 (Unaudited)
 Three Months Ended
    
    
    Nine Months EndedSeptember 30,
    
    
    September 30,2008
    
    
    2007
    
    
    2008
    
    
    2007Revenues
    
    $
    315,738
    
    
    $
    272,573
    
    
    $
    798,338
    
    
    $
    482,081Costs and Expenses:Operating Expenses
    
    
    180,978
    
    
    
    129,444
    
    
    
    470,138
    
    
    
    215,367Depreciation and Amortization
    
    
    50,256
    
    
    
    37,507
    
    
    
    141,150
    
    
    
    61,446General and Administrative
    
    
    17,447
    
    
    
    18,018
    
    
    
    57,777
    
    
    
    36,516248,681
    
    
    
    184,969
    
    
    
    669,065
    
    
    
    313,329Operating Income
    
    
    67,057
    
    
    
    87,604
    
    
    
    129,273
    
    
    
    168,752Other Income (Expense):Interest Expense
    
    
    (14,852
    )
    
    
    (15,164
    )
    
    
    (45,387
    )
    
    
    (18,633
    )Loss on Early Retirement of Debt
    
    
    
    
    
    
    (1,312
    )
    
    
    
    
    
    
    (2,182
    )Other, Net
    
    
    543
    
    
    
    2,507
    
    
    
    2,818
    
    
    
    5,028Income Before Income Taxes
    
    
    52,748
    
    
    
    73,635
    
    
    
    86,704
    
    
    
    152,965Income Tax Provision
    
    
    (19,622
    )
    
    
    (27,283
    )
    
    
    (32,051
    )
    
    
    (49,756
    )Income from Continuing Operations
    
    
    33,126
    
    
    
    46,352
    
    
    
    54,653
    
    
    
    103,209Income (Loss) from Discontinued Operation, Net of Taxes
    
    
    (168
    )
    
    
    2,019
    
    
    
    (766
    )
    
    
    2,019Net Income
    
    $
    32,958
    
    
    $
    48,371
    
    
    $
    53,887
    
    
    $
    105,228Basic Earnings Per Share:Income from Continuing Operations
    
    $
    0.38
    
    
    $
    0.56
    
    
    $
    0.62
    
    
    $
    2.11Income (Loss) from Discontinued Operation
    
    
    (0.01
    )
    
    
    0.03
    
    
    
    (0.01
    )
    
    
    0.04Net Income
    
    $
    0.37
    
    
    $
    0.59
    
    
    $
    0.61
    
    
    $
    2.15Diluted Earnings Per Share:Income from Continuing Operations
    
    $
    0.37
    
    
    $
    0.56
    
    
    $
    0.61
    
    
    $
    2.08Income (Loss) from Discontinued Operation
    
    
    
    
    
    
    0.02
    
    
    
    (0.01
    )
    
    
    0.04Net Income
    
    $
    0.37
    
    
    $
    0.58
    
    
    $
    0.60
    
    
    $
    2.12Weighted Average Shares Outstanding:Basic
    
    
    87,950
    
    
    
    82,663
    
    
    
    88,478
    
    
    
    48,912Diluted
    
    
    88,508
    
    
    
    83,418
    
    
    
    89,180
    
    
    
    49,568
  4




---



##### Table of Contents



HERCULES OFFSHORE, INC. AND SUBSIDIARIES
 
 CONSOLIDATED STATEMENTS OF CASH FLOWS
 (In thousands)
 (Unaudited)
 Nine Months Ended September 30,2008
    
    
    2007Cash Flows from Operating Activities:Net Income
    
    $
    53,887
    
    
    $
    105,228Adjustments to Reconcile Net Income to Net Cash Provided by Operating Activities:Depreciation and Amortization
    
    
    141,168
    
    
    
    63,520Stock-based Compensation Expense
    
    
    10,382
    
    
    
    6,157Deferred Income Taxes
    
    
    12,302
    
    
    
    25,986Amortization of Deferred Financing Fees
    
    
    2,882
    
    
    
    1,046Gain on Disposal of Assets
    
    
    (3,649
    )
    
    
    (1,641
    )Excess Tax Benefit from Stock-based Arrangements
    
    
    (5,469
    )
    
    
    (2,057
    )Loss on Early Retirement of Debt
    
    
    
    
    
    
    2,182(Increase) Decrease in Operating Assets -Accounts Receivable
    
    
    (119,529
    )
    
    
    15,169Insurance Claims Receivable
    
    
    (369
    )
    
    
    (9,026
    )Tax Sharing Agreement Payment
    
    
    (4,000
    )
    
    
    (118,247
    )Prepaid Expenses and Other
    
    
    30,221
    
    
    
    2,869Increase (Decrease) in Operating Liabilities -Accounts Payable
    
    
    6,124
    
    
    
    (11,253
    )Insurance Note Payable
    
    
    (30,528
    )
    
    
    (12,052
    )Other Current Liabilities
    
    
    21,246
    
    
    
    5,492Other Liabilities
    
    
    17,924
    
    
    
    834Net Cash Provided by Operating Activities
    
    
    132,592
    
    
    
    74,207Cash Flows from Investing Activities:Acquisition of Business, Net of Cash Acquired
    
    
    
    
    
    
    (733,763
    )Acquisition of Assets
    
    
    (320,839
    )
    
    
    Additions of Property and Equipment
    
    
    (184,843
    )
    
    
    (97,521
    )Deferred Drydocking Expenditures
    
    
    (13,547
    )
    
    
    (14,680
    )Investment in Marketable Securities
    
    
    
    
    
    
    (128,525
    )Proceeds from Sale of Marketable Securities
    
    
    39,300
    
    
    
    108,675Insurance Proceeds Received
    
    
    29,229
    
    
    
    3,850Proceeds from Sale of Assets, Net
    
    
    14,584
    
    
    
    2,211Decrease in Restricted Cash
    
    
    
    
    
    
    229Net Cash Used in Investing Activities
    
    
    (436,116
    )
    
    
    (859,524
    )Cash Flows from Financing Activities:Short-term
Debt Borrowings (Repayments), Net
    
    
    686
    
    
    
    (465
    )Long-term Debt Borrowings
    
    
    350,000
    
    
    
    900,000Long-term Debt Repayments
    
    
    (106,720
    )
    
    
    (93,250
    )Common Stock Repurchases
    
    
    (49,228
    )
    
    
    Proceeds from Exercise of Stock Options
    
    
    5,127
    
    
    
    2,054Excess Tax Benefit from Stock-based Arrangements
    
    
    5,469
    
    
    
    2,057Payment of Debt Issuance Costs
    
    
    (8,085
    )
    
    
    (17,753
    )Other
    
    
    
    
    
    
    (46
    )Net Cash Provided by Financing Activities
    
    
    197,249
    
    
    
    792,597Net Increase (Decrease) in Cash and Cash Equivalents
    
    
    (106,275
    )
    
    
    7,280Cash and Cash Equivalents at Beginning of Period
    
    
    212,452
    
    
    
    72,772Cash and Cash Equivalents at End of Period
    
    $
    106,177
    
    
    $
    80,052
  5




---



##### Table of Contents



HERCULES OFFSHORE, INC. AND SUBSIDIARIES
 
 CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME
 (In thousands)
 (Unaudited)
 Three Months Ended
    
    
    Nine Months EndedSeptember 30,
    
    
    September 30,2008
    
    
    2007
    
    
    2008
    
    
    2007Net Income
    
    $
    32,958
    
    
    $
    48,371
    
    
    $
    53,887
    
    
    $
    105,228Other Comprehensive Income (Loss), Net of Taxes:Changes related to Hedge Transactions
    
    
    2,028
    
    
    
    (4,744
    )
    
    
    354
    
    
    
    (5,171
    )Comprehensive Income
    
    $
    34,986
    
    
    $
    43,627
    
    
    $
    54,241
    
    
    $
    100,057
  6




---



##### Table of Contents



HERCULES OFFSHORE, INC. AND SUBSIDIARIES
 
 NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
 UNAUDITED
 1. General
  Hercules 350 Hercules 261 Hercules 262
   Reclassifications
  Revenue Recognition
  Three Months Ended September 30,
    
    Nine Months Ended September 30,2008
    
    2007
    
    2008
    
    2007Mobilization revenue deferred
    
    $
    11,050
    
    
    $
    
    
    
    $
    19,327
    
    
    $
    Mobilization expense deferred
    
    
    
    
    
    
    
    
    
    
    3,398
    
    
    
    Mobilization revenue recognized
    
    
    3,111
    
    
    
    298
    
    
    
    9,287
    
    
    
    2,763Mobilization expense recognized
    
    
    1,595
    
    
    
    641
    
    
    
    4,551
    
    
    
    2,223
 7




---



##### Table of Contents



HERCULES OFFSHORE, INC. AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS  (Continued)
UNAUDITED
   Other Assets
   Other Intangible Assets
   Remainder of 2008
    
    $
    1,5362009
    
    
    4,7812010
    
    
    1,8142011
    
    
    6582012
    
    
    
 Cash and Cash Equivalents and Marketable Securities
   8




---



##### Table of Contents



HERCULES OFFSHORE, INC. AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS  (Continued)
UNAUDITED
 2. Earnings Per Share
  Three Months Ended
    
    Nine Months EndedSeptember 30,
    
    September 30,2008
    
    2007
    
    2008
    
    2007Denominator:Weighted average basic shares
    
    
    87,950
    
    
    
    82,663
    
    
    
    88,478
    
    
    
    48,912Add effect of stock equivalents
    
    
    558
    
    
    
    755
    
    
    
    702
    
    
    
    656Weighted average diluted shares
    
    
    88,508
    
    
    
    83,418
    
    
    
    89,180
    
    
    
    49,568
  3. Asset Acquisition and Business Combination
 Hercules 350 Hercules 261 Hercules 262
   4. Dispositions
 Hercules 256
  5. Discontinued Operation
  Allocation of Interest to Discontinued Operations
 9




---



##### Table of Contents



HERCULES OFFSHORE, INC. AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS  (Continued)
UNAUDITED
  Three Months Ended September 30,
    
    
    Nine Months Ended September 30,2008
    
    
    2007
    
    
    2008
    
    
    2007Revenues
    
    $
    86
    
    
    $
    21,792
    
    
    $
    1,702
    
    
    $
    21,792Income (Loss) Before Income Taxes
    
    $
    (259
    )
    
    $
    4,663
    
    
    $
    (1,179
    )
    
    $
    4,663Income Tax (Provision) Benefit
    
    
    91
    
    
    
    (2,644
    )
    
    
    413
    
    
    
    (2,644
    )Income (Loss) from Discontinued
Operation, Net of Taxes
    
    $
    (168
    )
    
    $
    2,019
    
    
    $
    (766
    )
    
    $
    2,019
 6. Debt
  September 30, 2008
    
    
    December 31, 2007Term Loan Facility, due July 2013
    
    $
    891,000
    
    
    $
    895,5003.375% Convertible Senior Notes due June 2038
    
    
    250,000
    
    
    
    9.5% Senior Notes, due December 2008
    
    
    10,255
    
    
    
    10,4327.375% Senior Notes, due April 2018
    
    
    3,512
    
    
    
    3,5136.95% Senior Notes, due April 2008
    
    
    
    
    
    
    2,221Foreign
Overdraft Facility
    
    
    686
    
    
    
    Total Debt
    
    
    1,155,453
    
    
    
    911,666Less Short-term Debt and Current Portion of Long-term Debt
    
    
    19,941
    
    
    
    21,653Total Long-term Debt, Net of Current Portion
    
    $
    1,135,512
    
    
    $
    890,013
 Senior secured credit agreement
      Senior notes and other debt
  10




---



##### Table of Contents



HERCULES OFFSHORE, INC. AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS  (Continued)
UNAUDITED
    7. Derivative Instruments and Hedging
   11




---



##### Table of Contents



HERCULES OFFSHORE, INC. AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS  (Continued)
UNAUDITED
  October 1, 2008-December 30, 2008
    
    $
    325,000December 31, 2008-March 31, 2009
    
    
    325,000April 1, 2009-June 30, 2009
    
    
    250,000July 1, 2009-September 30, 2009
    
    
    175,000October 1, 2009-December 30, 2009
    
    
    75,000
  October 1, 2008-December 31, 2008
    
    $
    100,000January 1, 2009-March 31, 2009
    
    
    50,000
 Accounting for Derivative Instruments and Hedging
Activities (SFAS No. 133) Accounting for Certain Derivative Instruments and Certain
Hedging Activities (an amendment of FASB Statement No. 133) Amendment of
Statement 133 on Derivative Instruments and Hedging Activities
  September 30,
    
    December 31,2008
    
    2007Fair value
included in Other
    
    $
    1,119
    
    
    $
    Fair value included in Other Assets, Net
    
    
    382
    
    
    
    322Fair value
included in Other Current Liabilities
    
    
    6,935
    
    
    
    4,025Fair value included in Other Liabilities
    
    
    6,509
    
    
    
    8,784Cumulative unrealized loss, net of tax of $4,181 and $4,371,
respectively included inAccumulated Other Comprehensive Loss
    
    
    (7,763
    )
    
    
    (8,117
    )
 Recognized Gain (Loss) in
    
    Recognized Gain (Loss) inConsolidated Statements of
    
    Consolidated Statements ofOperations for the Three Months
    
    Operations for the Nine MonthsEnded September 30,
    
    Ended September 30,2008
    
    2007
    
    2008
    
    2007Realized
gains included in Other, Net
    
    $
    
    
    
    $
    352
    
    
    $
    
    
    
    $
    658Realized
gains (losses) included in
Interest Expense
    
    $
    (3,020
    )
    
    $
    
    
    
    $
    (7,287
    )
    
    $
    316
  Level 1
    
    -
    
    Inputs are quoted prices in active markets for identical assets or liabilities.Level 2
    
    -
    
    Inputs are quoted prices for similar assets or liabilities in an active
market, quoted prices for identical or similar assets or liabilities in
markets that are not active, inputs other than quoted prices that are
observable and market-corroborated inputs which are derived principally from
or corroborated by observable market data.Level 3
    
    -
    
    Inputs are derived from valuation techniques in which one or more significant
inputs or value drivers are unobservable.
 12




---



##### Table of Contents



HERCULES OFFSHORE, INC. AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS  (Continued)
UNAUDITED
  (A)
    
    Market approach  Uses prices and other relevant information generated by market
transactions involving identical or comparable assets or liabilities(B)
    
    Income approach  Uses valuation techniques to convert future amounts to a single
present amount based on current market expectations about those future amounts,
including present value techniques, option-pricing models and excess earnings method(C)
    
    Cost approach  Based on the amount that currently would be required to replace
the service capacity of an asset (replacement cost)
  Quoted Prices inTotal
    
    Active Markets forFair Value
    
    Identical Asset or
    
    Significant Other
    
    SignificantMeasurement
    
    Liability
    
    Observable Inputs
    
    Unobservable Inputs
    
    ValuationSeptember 30, 2008
    
    (Level 1)
    
    (Level 2)
    
    (Level 3)
    
    TechniqueDerivative Assets
    
    $
    1,501
    
    
    $
    
    
    
    $
    1,501
    
    
    $
    
    
    
    
    ADerivative
Liabilities
    
    
    13,444
    
    
    
    
    
    
    
    13,444
    
    
    
    
    
    
    
    A
 8. Stock-based Compensation
      9. Supplemental Cash Flow Information
  13




---



##### Table of Contents



HERCULES OFFSHORE, INC. AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS  (Continued)
UNAUDITED
 Nine Months Ended September 30,2008
    
    2007(In thousands)Cash paid during the period for:Interest,
net of capitalized interest of $5,378 and $538, respectively
    
    $
    25,441
    
    
    $
    5,931Income taxes
    
    
    39,785
    
    
    
    35,329
 10. Income Tax
      14




---



##### Table of Contents



HERCULES OFFSHORE, INC. AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS  (Continued)
UNAUDITED
 11. Segments
  Domestic Offshore
 International Offshore
 Inland
 Domestic Liftboats
 International
Liftboats
 Delta
Towing
  15




---



##### Table of Contents



HERCULES OFFSHORE, INC. AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS  (Continued)
UNAUDITED
  Three Months Ended September 30, 2008
    
    
    Nine Months Ended September 30, 2008Depreciation
    
    
    
    
    
    
    
    
    
    
    DepreciationIncome (Loss)
    
    
    &
    
    
    
    
    
    
    Income (Loss)
    
    
    &Revenue
    
    
    from Operations
    
    
    Amortization
    
    
    Revenue
    
    
    from Operations
    
    
    AmortizationDomestic Offshore
    
    $
    112,733
    
    
    $
    31,334
    
    
    $
    17,546
    
    
    $
    272,618
    
    
    $
    53,021
    
    
    $
    49,085International
Offshore
    
    
    95,283
    
    
    
    34,213
    
    
    
    9,498
    
    
    
    234,813
    
    
    
    95,987
    
    
    
    26,394Inland
    
    
    44,436
    
    
    
    (1,229
    )
    
    
    11,350
    
    
    
    124,966
    
    
    
    (6,083
    )
    
    
    31,530Domestic Liftboats
    
    
    25,351
    
    
    
    5,828
    
    
    
    5,135
    
    
    
    63,564
    
    
    
    4,250
    
    
    
    16,469International
Liftboats
    
    
    20,323
    
    
    
    5,054
    
    
    
    3,143
    
    
    
    58,919
    
    
    
    19,954
    
    
    
    7,495Delta Towing
    
    
    17,612
    
    
    
    4,459
    
    
    
    2,782
    
    
    
    43,458
    
    
    
    6,420
    
    
    
    8,057315,738
    
    
    
    79,659
    
    
    
    49,454
    
    
    
    798,338
    
    
    
    173,549
    
    
    
    139,030Corporate
    
    
    
    
    
    
    (12,602
    )
    
    
    802
    
    
    
    
    
    
    
    (44,276
    )
    
    
    2,120Total Company
    
    $
    315,738
    
    
    $
    67,057
    
    
    $
    50,256
    
    
    $
    798,338
    
    
    $
    129,273
    
    
    $
    141,150Three Months Ended September 30, 2007
    
    
    Nine Months Ended September 30, 2007Depreciation
    
    
    
    
    
    
    
    
    
    
    DepreciationIncome from
    
    
    &
    
    
    
    
    
    
    Income from
    
    
    &Revenue
    
    
    Operations
    
    
    Amortization
    
    
    Revenue
    
    
    Operations
    
    
    AmortizationDomestic Offshore
    
    $
    99,588
    
    
    $
    36,671
    
    
    $
    13,962
    
    
    $
    170,744
    
    
    $
    71,560
    
    
    $
    19,214International
Offshore
    
    
    50,498
    
    
    
    21,688
    
    
    
    5,800
    
    
    
    91,014
    
    
    
    43,210
    
    
    
    8,531Inland
    
    
    53,638
    
    
    
    19,609
    
    
    
    6,950
    
    
    
    53,638
    
    
    
    19,609
    
    
    
    6,950Domestic Liftboats
    
    
    35,677
    
    
    
    12,457
    
    
    
    6,354
    
    
    
    105,575
    
    
    
    39,737
    
    
    
    18,616International
Liftboats
    
    
    18,090
    
    
    
    6,655
    
    
    
    1,843
    
    
    
    46,028
    
    
    
    14,655
    
    
    
    5,485Delta Towing
    
    
    15,082
    
    
    
    4,363
    
    
    
    2,326
    
    
    
    15,082
    
    
    
    4,363
    
    
    
    2,326272,573
    
    
    
    101,443
    
    
    
    37,235
    
    
    
    482,081
    
    
    
    193,134
    
    
    
    61,122Corporate
    
    
    
    
    
    
    (13,839
    )
    
    
    272
    
    
    
    
    
    
    
    (24,382
    )
    
    
    324Total Company
    
    $
    272,573
    
    
    $
    87,604
    
    
    $
    37,507
    
    
    $
    482,081
    
    
    $
    168,752
    
    
    $
    61,446
 Total AssetsSeptember 30,
    
    
    December 31,2008
    
    
    2007Domestic Offshore
    
    $
    1,653,548
    
    
    $
    1,504,548International Offshore
    
    
    1,067,218
    
    
    
    681,742Inland
    
    
    649,189
    
    
    
    646,120Domestic Liftboats
    
    
    147,566
    
    
    
    186,568International Liftboats
    
    
    149,420
    
    
    
    149,813Delta Towing
    
    
    123,217
    
    
    
    193,963Corporate
    
    
    170,968
    
    
    
    281,194Total Company
    
    $
    3,961,126
    
    
    $
    3,643,948
 16




---



##### Table of Contents



HERCULES OFFSHORE, INC. AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS  (Continued)
UNAUDITED
 12. Commitments and Contingencies
 Legal Proceedings
 Accounting for Contingencies
   Robert E. Aaron et al. vs. Phillips 66 Company et al. Circuit Court, Second Judicial District,
Jones County, Mississippi.
   Insurance
  17




---



##### Table of Contents



HERCULES OFFSHORE, INC. AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS  (Continued)
UNAUDITED
    Surety Bonds and Unsecured Letters of Credit
   Insurance Claims
 Hercules 205
 13. Accounting Pronouncements
 Accounting for Convertible Debt Instruments That May Be Settled in Cash upon Conversion
(Including Partial Cash Settlement)
 Disclosures about Derivative Instruments and Hedging Activities
 18




---



##### Table of Contents



HERCULES OFFSHORE, INC. AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS  (Continued)
UNAUDITED
 , Business Combinations Business Combinations Accounting for Costs
Associated with Exit or Disposal Activities Accounting for
Contingencies.
 Fair Value Measurements Effective
Date of FASB Statement No. 157
 , The Fair Value Option for Financial Assets and Financial Liabilities
 
 19




---



##### Table of Contents



ITEM 2.
    
    MANAGEMENTS DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF
OPERATIONS
  OVERVIEW
     Domestic Offshore
 International Offshore
 Inland
 Domestic Liftboats
 International Liftboats
 Delta Towing
   20




---



##### Table of Contents



Hercules 78 Hercules 201
 RESULTS OF OPERATIONS
  21




---



##### Table of Contents



Three Months Ended
    
    
    Nine Months EndedSeptember 30,
    
    
    September 30,2008
    
    
    2007
    
    
    2008
    
    
    2007(Dollars in thousands)Domestic Offshore:Number of rigs (as of end of period)
    
    
    27
    
    
    
    27
    
    
    
    27
    
    
    
    27Revenues
    
    $
    112,733
    
    
    $
    99,588
    
    
    $
    272,618
    
    
    $
    170,744Operating expenses
    
    
    62,849
    
    
    
    47,292
    
    
    
    166,896
    
    
    
    74,754Depreciation and amortization expense
    
    
    17,546
    
    
    
    13,962
    
    
    
    49,085
    
    
    
    19,214General and administrative expenses
    
    
    1,004
    
    
    
    1,663
    
    
    
    3,616
    
    
    
    5,216Operating income
    
    $
    31,334
    
    
    $
    36,671
    
    
    $
    53,021
    
    
    $
    71,560International Offshore:Number of rigs (as of end of period)
    
    
    12
    
    
    
    10
    
    
    
    12
    
    
    
    10Revenues
    
    $
    95,283
    
    
    $
    50,498
    
    
    $
    234,813
    
    
    $
    91,014Operating expenses
    
    
    50,518
    
    
    
    22,888
    
    
    
    110,618
    
    
    
    37,606Depreciation and amortization expense
    
    
    9,498
    
    
    
    5,800
    
    
    
    26,394
    
    
    
    8,531General and administrative expenses
    
    
    1,054
    
    
    
    122
    
    
    
    1,814
    
    
    
    1,667Operating income
    
    $
    34,213
    
    
    $
    21,688
    
    
    $
    95,987
    
    
    $
    43,210Inland:Number of barges (as of end of period)
    
    
    27
    
    
    
    27
    
    
    
    27
    
    
    
    27Revenues
    
    $
    44,436
    
    
    $
    53,638
    
    
    $
    124,966
    
    
    $
    53,638Operating expenses
    
    
    33,437
    
    
    
    26,546
    
    
    
    96,669
    
    
    
    26,546Depreciation and amortization expense
    
    
    11,350
    
    
    
    6,950
    
    
    
    31,530
    
    
    
    6,950General and administrative expenses
    
    
    878
    
    
    
    533
    
    
    
    2,850
    
    
    
    533Operating income (loss)
    
    $
    (1,229
    )
    
    $
    19,609
    
    
    $
    (6,083
    )
    
    $
    19,609Domestic Liftboats:Number of liftboats (as of end of period)
    
    
    45
    
    
    
    47
    
    
    
    45
    
    
    
    47Revenues
    
    $
    25,351
    
    
    $
    35,677
    
    
    $
    63,564
    
    
    $
    105,575Operating expenses
    
    
    13,788
    
    
    
    16,321
    
    
    
    41,128
    
    
    
    45,600Depreciation and amortization expense
    
    
    5,135
    
    
    
    6,354
    
    
    
    16,469
    
    
    
    18,616General and administrative expenses
    
    
    600
    
    
    
    545
    
    
    
    1,717
    
    
    
    1,622Operating income
    
    $
    5,828
    
    
    $
    12,457
    
    
    $
    4,250
    
    
    $
    39,737International Liftboats:Number of liftboats (as of end of period)
    
    
    20
    
    
    
    18
    
    
    
    20
    
    
    
    18Revenues
    
    $
    20,323
    
    
    $
    18,090
    
    
    $
    58,919
    
    
    $
    46,028Operating expenses
    
    
    10,660
    
    
    
    8,581
    
    
    
    27,776
    
    
    
    23,045Depreciation and amortization expense
    
    
    3,143
    
    
    
    1,843
    
    
    
    7,495
    
    
    
    5,485General and administrative expenses
    
    
    1,466
    
    
    
    1,011
    
    
    
    3,694
    
    
    
    2,843Operating income
    
    $
    5,054
    
    
    $
    6,655
    
    
    $
    19,954
    
    
    $
    14,655
 22




---



##### Table of Contents



Three Months Ended
    
    
    Nine Months EndedSeptember 30,
    
    
    September 30,2008
    
    
    2007
    
    
    2008
    
    
    2007Delta Towing:Revenues
    
    $
    17,612
    
    
    $
    15,082
    
    
    $
    43,458
    
    
    $
    15,082Operating expenses
    
    
    9,726
    
    
    
    7,816
    
    
    
    27,051
    
    
    
    7,816Depreciation and amortization expense
    
    
    2,782
    
    
    
    2,326
    
    
    
    8,057
    
    
    
    2,326General and administrative expenses
    
    
    645
    
    
    
    577
    
    
    
    1,930
    
    
    
    577Operating income
    
    $
    4,459
    
    
    $
    4,363
    
    
    $
    6,420
    
    
    $
    4,363Total Company:Revenues
    
    $
    315,738
    
    
    $
    272,573
    
    
    $
    798,338
    
    
    $
    482,081Operating expenses
    
    
    180,978
    
    
    
    129,444
    
    
    
    470,138
    
    
    
    215,367Depreciation and amortization expense
    
    
    50,256
    
    
    
    37,507
    
    
    
    141,150
    
    
    
    61,446General and administrative expenses
    
    
    17,447
    
    
    
    18,018
    
    
    
    57,777
    
    
    
    36,516Operating income
    
    
    67,057
    
    
    
    87,604
    
    
    
    129,273
    
    
    
    168,752Interest expense
    
    
    (14,852
    )
    
    
    (15,164
    )
    
    
    (45,387
    )
    
    
    (18,633
    )Loss on early retirement of debt
    
    
    
    
    
    
    (1,312
    )
    
    
    
    
    
    
    (2,182
    )Other, net
    
    
    543
    
    
    
    2,507
    
    
    
    2,818
    
    
    
    5,028Income before income taxes
    
    
    52,748
    
    
    
    73,635
    
    
    
    86,704
    
    
    
    152,965Income tax provision
    
    
    (19,622
    )
    
    
    (27,283
    )
    
    
    (32,051
    )
    
    
    (49,756
    )Income from Continuing Operations
    
    
    33,126
    
    
    
    46,352
    
    
    
    54,653
    
    
    
    103,209Income (Loss) from Discontinued Operation, Net of Taxes
    
    
    (168
    )
    
    
    2,019
    
    
    
    (766
    )
    
    
    2,019Net income
    
    $
    32,958
    
    
    $
    48,371
    
    
    $
    53,887
    
    
    $
    105,228
  Three Months Ended September 30, 2008AverageAverage
    
    OperatingOperating
    
    Available
    
    
    
    
    
    Revenue
    
    ExpenseDays
    
    Days
    
    Utilization (1)
    
    per Day (2)
    
    per Day (3)Domestic Offshore
    
    
    1,673
    
    
    
    2,116
    
    
    
    79.1
    %
    
    $
    67,384
    
    
    $
    29,702International Offshore
    
    
    729
    
    
    
    773
    
    
    
    94.3
    %
    
    
    130,704
    
    
    
    65,353Inland
    
    
    1,142
    
    
    
    1,472
    
    
    
    77.6
    %
    
    
    38,911
    
    
    
    22,715Domestic Liftboats
    
    
    3,132
    
    
    
    3,864
    
    
    
    81.1
    %
    
    
    8,094
    
    
    
    3,568International Liftboats
    
    
    1,143
    
    
    
    1,656
    
    
    
    69.0
    %
    
    
    17,780
    
    
    
    6,437Three Months Ended September 30, 2007AverageAverage
    
    OperatingOperating
    
    Available
    
    
    
    
    
    Revenue
    
    ExpenseDays
    
    Days
    
    Utilization (1)
    
    per Day (2)
    
    per Day (3)Domestic Offshore
    
    
    1,290
    
    
    
    1,848
    
    
    
    69.8
    %
    
    $
    77,200
    
    
    $
    25,591International Offshore
    
    
    589
    
    
    
    589
    
    
    
    100.0
    %
    
    
    85,735
    
    
    
    38,859Inland
    
    
    1,149
    
    
    
    1,377
    
    
    
    83.4
    %
    
    
    46,682
    
    
    
    19,278Domestic Liftboats
    
    
    2,858
    
    
    
    4,232
    
    
    
    67.5
    %
    
    
    12,483
    
    
    
    3,857International Liftboats
    
    
    1,383
    
    
    
    1,564
    
    
    
    88.4
    %
    
    
    13,080
    
    
    
    5,487
 23




---



##### Table of Contents



Nine Months Ended September 30, 2008AverageAverage
    
    OperatingOperating
    
    Available
    
    
    
    
    
    Revenue per
    
    ExpenseDays
    
    Days
    
    Utilization (1)
    
    Day (2)
    
    per Day (3)Domestic Offshore
    
    
    4,383
    
    
    
    6,142
    
    
    
    71.4
    %
    
    $
    62,199
    
    
    $
    27,173International Offshore
    
    
    2,025
    
    
    
    2,214
    
    
    
    91.5
    %
    
    
    115,957
    
    
    
    49,963Inland
    
    
    3,097
    
    
    
    4,505
    
    
    
    68.7
    %
    
    
    40,351
    
    
    
    21,458Domestic Liftboats
    
    
    7,198
    
    
    
    11,921
    
    
    
    60.4
    %
    
    
    8,831
    
    
    
    3,450International Liftboats
    
    
    3,691
    
    
    
    4,793
    
    
    
    77.0
    %
    
    
    15,963
    
    
    
    5,795
 Nine Months Ended September 30, 2007AverageAverage
    
    OperatingOperating
    
    Available
    
    
    
    
    
    Revenue
    
    ExpenseDays
    
    Days
    
    Utilization (1)
    
    per Day (2)
    
    per Day (3)Domestic Offshore
    
    
    2,139
    
    
    
    2,934
    
    
    
    72.9
    %
    
    $
    79,824
    
    
    $
    25,479International Offshore
    
    
    948
    
    
    
    951
    
    
    
    99.7
    %
    
    
    96,006
    
    
    
    39,544Inland
    
    
    1,149
    
    
    
    1,377
    
    
    
    83.4
    %
    
    
    46,682
    
    
    
    19,278Domestic Liftboats
    
    
    8,505
    
    
    
    12,517
    
    
    
    67.9
    %
    
    
    12,413
    
    
    
    3,643International Liftboats
    
    
    3,797
    
    
    
    4,585
    
    
    
    82.8
    %
    
    
    12,122
    
    
    
    5,026
 
 (1)
    
    Utilization is defined as the total number of days our rigs or liftboats, as
applicable, were under contract, known as operating days, in the period as a percentage of
the total number of available days in the period. Days during which our rigs and liftboats
were undergoing major refurbishments, upgrades or construction, and days during which our
rigs and liftboats are cold-stacked, are not counted as available days. Days during which
our liftboats are in the shipyard undergoing drydocking or inspection are considered
available days for the purposes of calculating utilization.(2)
    
    Average revenue per rig or liftboat per day is defined as revenue earned by our rigs or
liftboats, as applicable, in the period divided by the total number of operating days for
our rigs or liftboats, as applicable, in the period. Included in Domestic Offshore revenue
is a total of $0.2 million and $0.3 million related to amortization of contract specific
capital expenditures reimbursed by the customer for the three and nine months ended
September 30, 2007, respectively. There was no such revenue in the three and nine months ended September
30, 2008. Included in International Offshore revenue is a total of $3.1 million and $9.3
million related to amortization of deferred mobilization revenue and contract specific
capital expenditures reimbursed by the customer for the three and nine months ended
September 30, 2008, respectively, and $0.3 million and $2.9 million for the three and nine
months ended September 30, 2007, respectively.(3)
    
    Average operating expense per rig or liftboat per day is defined as operating expenses,
excluding depreciation and amortization, incurred by our rigs or liftboats, as applicable,
in the period divided by the total number of available days in the period. We use available
days to calculate average operating expense per rig or liftboat per day rather than
operating days, which are used to calculate average revenue per rig or liftboat per day,
because we incur operating expenses on our rigs and liftboats even when they are not under
contract and earning a dayrate. In addition, the operating expenses we incur on our rigs
and liftboats per day when they are not under contract are typically lower than the per-day
expenses we incur when they are under contract. Included in International Offshore
operating expense is a total of $1.6 million and $4.6 million related to amortization of
deferred mobilization expenses for the three and nine months ended September 30, 2008,
respectively, and $0.6 million and $2.2 million for the three and nine months ended
September 30, 2007, respectively. For the Three Months Ended September 30, 2008 and 2007
 Revenues
 Consolidated.
 24




---



##### Table of Contents



Domestic Offshore .
 International Offshore . Hercules 260 Hercules 208
 Inland.
 Domestic Liftboats.
 International Liftboats.
 Delta Towing.
 Operating Expenses
 Consolidated .
 Domestic Offshore .
 25




---



##### Table of Contents



International Offshore. Hercules 258 Hercules 260
 Inland.
 Domestic Liftboats.
 International Liftboats. .
 Delta Towing.
 Depreciation and Amortization
 Hercules 350 Hercules 208 Hercules 205 Hercules 260
 General and Administrative Expenses
  Other Income
  Discontinued Operation
  26




---



##### Table of Contents



For the Nine Months Ended September 30, 2008 and 2007
 Revenues
 Consolidated.
 Domestic Offshore .
 International Offshore .
 Inland.
 Domestic Liftboats.
 International Liftboats.
 Delta Towing.
 27




---



##### Table of Contents



Operating Expenses
 Consolidated .
 Domestic Offshore .
 International Offshore.
 Inland.
 Domestic Liftboats.
 International Liftboats.
 Delta Towing.
 Depreciation and Amortization
  General and Administrative Expenses
  Interest Expense
  28




---



##### Table of Contents



Other Income
  Income Tax Provision
  Discontinued Operation
  CRITICAL ACCOUNTING POLICIES
    OUTLOOK
 Offshore
    29




---



##### Table of Contents



Inland
  30




---



##### Table of Contents



Liftboats
      Labor Markets
   31




---



##### Table of Contents



LIQUIDITY AND CAPITAL RESOURCES
 Sources and Uses of Cash
  Net Cash Provided by Operating Activities:
    
    $
    132.6Net Cash Used in Investing Activities:Acquisition of Assets
    
    
    (320.8
    )Additions of Property and Equipment
    
    
    (184.8
    )Deferred Drydocking Expenditures
    
    
    (13.6
    )Sale of Marketable Securities
    
    
    39.3Insurance Proceeds Received
    
    
    29.2Proceeds from Sale of Assets, Net
    
    
    14.6Total
    
    
    (436.1
    )Net Cash Provided by (Used in) Financing Activities:Short-term Debt Borrowings (Repayments), Net
    
    
    0.7Long-term Debt Borrowings
    
    
    350.0Long-term Debt Repayments
    
    
    (106.7
    )Share Repurchases
    
    
    (49.2
    )Proceeds from Exercise of Stock Options
    
    
    5.1Excess Tax Benefit from Stock-Based Arrangements
    
    
    5.4Payment of Debt Issuance Costs
    
    
    (8.1
    )Total
    
    
    197.2Net Decrease in Cash and Cash Equivalents
    
    $
    (106.3
    )
  Sources of Liquidity and Financing Arrangements
  Cash Requirements and Contractual Obligations
 Asset Acquisition
  Debt
   32




---



##### Table of Contents



33




---



##### Table of Contents



Capital Expenditures
 Hercules 261 Hercules 262
     Contractual Obligations
   Off-Balance Sheet Arrangements
 Guarantees
  Letters of Credit and Surety Bonds
  34




---



##### Table of Contents



Accounting Pronouncements
  FORWARD-LOOKING STATEMENTS
  
    
    our ability to enter into new contracts for our rigs and liftboats and future
utilization rates for the units;
    
    the correlation between demand for our rigs and our liftboats and our earnings and
customers expectations of energy prices;
    
    future capital expenditures and refurbishment, repair and upgrade costs;
    
    expected completion times for our refurbishment and upgrade projects;
    
    sufficiency of funds for required capital expenditures, working capital and debt
service;
    
    our plans regarding increased international operations;
    
    expected useful lives of our rigs and liftboats;
    
    liabilities under laws and regulations protecting the environment;
    
    expected outcomes of litigation, claims and disputes and their expected effects on our
financial condition and results of operations;
    
    expectations regarding improvements in offshore drilling activity and dayrates, market
conditions, demand for our rigs and liftboats, operating revenues, operating and
maintenance expense, insurance expense and deductibles, interest expense, debt levels and
other matters with regard to outlook.
 :
 
    
    oil and natural gas prices and industry expectations about future prices;
    
    demand for offshore jackup rigs and liftboats;
    
    our ability to enter into and the terms of future contracts;
    
    the worldwide military and political environment, uncertainty or instability resulting
from an escalation or additional outbreak of armed hostilities or other crises in the
Middle East and other oil and natural gas producing regions, or further acts of terrorism
in the United States, or elsewhere;
    
    the impact of governmental laws and regulations;
    
    the adequacy of sources of credit and liquidity;
    
    uncertainties relating to the level of activity in offshore oil and natural gas
exploration, development and production;
 35




---



##### Table of Contents




    
    competition and market conditions in the contract drilling and liftboat industries;
    
    the availability of skilled personnel;
    
    labor relations and work stoppages, particularly in the West African labor environments;
    
    operating hazards such as severe weather and seas, fires, cratering, blowouts, war,
terrorism and cancellation or unavailability of insurance coverage;
    
    the effect of litigation and contingencies; and
    
    our inability to achieve our plans or carry out our strategy.
  
 ITEM 3. QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK
  Interest Rate Exposure
     Interest Rate Swaps and Derivatives
 Liquidity
and Capital Resources
 36




---



##### Table of Contents



October 1, 2008-December 31, 2008
    
    $
    100,000January 1, 2009-March 31, 2009
    
    
    50,000
  October 1, 2008-December 30, 2008
    
    $
    325,000December 31, 2008-March 31, 2009
    
    
    325,000April 1, 2009-June 30, 2009
    
    
    250,000July 1, 2009-September 30, 2009
    
    
    175,000October 1, 2009-December 30, 2009
    
    
    75,000
 
 ITEM 4. CONTROLS AND PROCEDURES
    37




---



##### Table of Contents



PART II. OTHER INFORMATION
 
 ITEM 1. LEGAL PROCEEDINGS
  
 ITEM 1A. RISK FACTORS
  
 ITEM 2. UNREGISTERED SALES OF EQUITY SECURITIES AND USE OF PROCEEDS
  Total Number ofShares Purchased
    
    Maximum Numberas Part of a
    
    of Shares ThatTotal Number
    
    
    
    
    
    Publicly
    
    May Yet Beof Shares
    
    Average Price
    
    Announced Plan
    
    Purchased UnderPeriod
    
    Purchased (1)
    
    Paid per Share
    
    (2)
    
    Plan (2)July 1 - 31, 2008
    
    
    3,486
    
    
    $
    35.09
    
    
    
    N/A
    
    
    
    N/AAugust 1-31, 2008
    
    
    972
    
    
    
    23.33
    
    
    
    N/A
    
    
    
    N/ASeptember 1-30, 2008
    
    
    490
    
    
    
    19.71
    
    
    
    N/A
    
    
    
    N/ATotal
    
    
    4,948
    
    
    
    31.26
    
    
    
    N/A
    
    
    
    N/A
 
 (1)
    
    Represents the surrender of shares of common stock to satisfy tax withholding
obligations in connection with the vesting of restricted stock issued to employees under
our stockholder-approved long-term incentive plan.(2)
    
    We did not have at any time during the quarter, and currently do not have, a share
repurchase program in place. 
 ITEM 6. EXHIBITS
 31.1*
    
    Certification of Chief Executive Officer of Hercules pursuant to Section 302 of the Sarbanes-Oxley Act of 2002.31.2*
    
    Certification of Chief Financial Officer of Hercules pursuant to Section 302 of the Sarbanes-Oxley Act of 2002.32.1*
    
    Certification of the Chief Executive Officer and the Chief Financial Officer of Hercules
pursuant to Section 906 of the Sarbanes-Oxley Act of 2002.
 
 *
    
    Filed herewith 38




---



##### Table of Contents



SIGNATURES
 Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly
caused this report to be signed on its behalf by the undersigned, thereunto duly authorized.
 HERCULES OFFSHORE, INC.By:
    
    /s/ John T. RyndJohn T. RyndChief Executive Officer and President(Principal Executive Officer)By:
    
    /s/ Lisa W. RodriguezLisa W. RodriguezSenior Vice President and Chief Financial Officer(Principal Financial Officer)By:
    
    /s/ Troy L. CarsonTroy L. CarsonVice President and Corporate Controller(Principal Accounting Officer)
  39




---



##### Table of Contents



31.1*
    
    Certification of Chief Executive Officer of Hercules pursuant to Section 302 of the Sarbanes-Oxley Act of 2002.31.2*
    
    Certification of Chief Financial Officer of Hercules pursuant to Section 302 of the Sarbanes-Oxley Act of 2002.32.1*
    
    Certification of the Chief Executive Officer and the Chief Financial Officer of Hercules pursuant to Section 906 of the Sarbanes-Oxley Act of 2002.
 
 *
    
    Filed herewith