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UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
 Washington, D.C. 20549
 Form 10-K
 þ
    
    Annual Report Pursuant To Section 13 or 15(d) of the Securities Exchange Act of 1934
 For the fiscal year ended December 31, 2008
 o
    
    Transition Report Pursuant to Section 13 or 15(d) of the Securities Exchange Act of 1934
 For the Transition period from  to
 Commission File Number 0-21086
 Global Industries, Ltd.
  Louisiana
(State or Other Jurisdiction of 
Incorporation or Organization)
    
    72-1212563
(I.R.S. Employer Identification Number)
 8000 Global Drive 
Carlyss, Louisiana
(Address of Principal Executive Offices)
    
    70665
(Zip Code)
 (337) 583-5000
  Title of each class
    
    Name of each exchange on which registeredCommon Stock ($0.01 par value)
    
    The NASDAQ Global Select Market LLC
  None
  þ o
  o þ
  þ o
 o
  Large accelerated filer þAccelerated filer oNon-accelerated filer o(Do not check if a smaller reporting company)Smaller reporting company o  o þ




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DOCUMENTS INCORPORATED BY REFERENCE
  2




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##### 



GLOBAL INDUSTRIES, LTD.
TABLE OF CONTENTS
FORM 10-K
 PART IItem 1.
    
    Business
    
    
    5Item 1A.
    
    Risk Factors
    
    
    11Item 1B.
    
    Unresolved Staff Comments
    
    
    17Item 2.
    
    Properties
    
    
    18Item 3.
    
    Legal Proceedings
    
    
    21Item 4.
    
    Submission of Matters to a Vote of Security Holders
    
    
    23Item (Unnumbered).
    
    Executive Officers of the Registrant
    
    
    23PART IIItem 5.
    
    Market for the Registrants Common Equity, Related Shareholder Matters and
Issuer Purchases of Equity Securities
    
    
    25Item 6.
    
    Selected Financial Data
    
    
    26Item 7.
    
    Managements Discussion and Analysis of Financial Condition and Results of
Operations
    
    
    27Item 7A.
    
    Quantitative and Qualitative Disclosures About Market Risk
    
    
    44Item 8.
    
    Financial Statements and Supplementary DataReport of Independent Registered Public Accounting Firm
    
    
    48Consolidated Balance Sheets  December 31, 2008 and 2007
    
    
    49Consolidated Statements of Operations  Years Ended December 31, 2008,
2007, and 2006
    
    
    50Consolidated Statements of Shareholders Equity  Years Ended December 31,
2008, 2007, and 2006
    
    
    51Consolidated Statements of Cash Flows  Years Ended December 31, 2008,
2007, and 2006
    
    
    52Notes to Consolidated Financial Statements
    
    
    53Item 9.
    
    Changes in and Disagreements With Accountants on Accounting and Financial
Disclosure
    
    
    84Item 9A.
    
    Controls and Procedures
    
    
    84Managements Report on Internal Control over Financial Reporting
    
    
    84PART IIIItem 10.
    
    Directors, Executive Officers, and Corporate Governance of the Registrant
    
    
    86Item 11.
    
    Executive Compensation
    
    
    86Item 12.
    
    Security Ownership of Certain Beneficial Owners and Management and
Related Stockholder Matters
    
    
    86Item 13.
    
    Certain Relationships and Related Transactions and Director Independence
    
    
    86Item 14.
    
    Principal Accountant Fees and Services
    
    
    86PART IVItem 15.
    
    Exhibits and Financial Statement Schedules
    
    
    87Signatures
    
    
    92EX-3.2EX-10.19EX-10.49EX-21.1EX-23.1EX-31.1EX-31.2EX-32.1EX-32.2
  3




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FORWARD-LOOKING STATEMENTS
    
    
    the level of capital expenditures in the oil and gas industry;
    
    risks inherent in doing business abroad;
    
    operating hazards related to working offshore;
    
    dependence on significant customers;
    
    ability to attract and retain skilled workers;
    
    general industry conditions;
    
    environmental matters;
    
    changes in laws and regulations;
    
    the effects of resolving claims and variation orders;
    
    availability of capital resources;
    
    delays or cancellation of projects included in backlog;
    
    fluctuations in the prices of or demand for oil and gas;
    
    the level of offshore drilling activity; and
    
    foreign exchange, currency, and interest rate fluctuations.
  4




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PART I
 
 ITEM 1. BUSINESS
  Segments of Business
  DESCRIPTION OF OPERATIONS
     
    
    Offshore Construction Services, which include pipeline construction and platform
installation and removal services; and
    
    Subsea Services, which include diving and diverless intervention, and marine support
services.
  Offshore Construction Services
  5




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Subsea Services
  
    
    supporting exploration;
    
    supporting platform and pipeline installation;
    
    performing periodic inspections of pipelines and platforms;
    
    performing repairs and maintenance to pipelines and platforms;
    
    installing SURF (subsea, umbilicals, risers and flow lines);
    
    providing ROV services; and
    
    performing salvage and site clearance services.
 6




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Business Strategy
  
    
    business acquisition and backlog accumulation;
    
    retention and hiring of key personnel;
    
    cost management; and
    
    successful project execution.
 Raw Materials
  Customers and Contracts
  7




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Competition
   Backlog
  Factors Affecting Demand
  8




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
    
    oil and gas prices, along with expectations about future prices;
    
    the cost of exploring for, producing, and delivering oil and gas;
    
    the terms and conditions of offshore leases;
    
    the discovery rates of new oil and gas reserves in offshore areas;
    
    the ability of businesses in the oil and gas industry to raise capital; and
    
    local and international political and economic conditions.
  Patents
 Hercules
 Employees
  Seasonality
  Financial Information about Geographic Areas
  Government Regulation and Environmental Matters
   9




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SEC REPORTING
 www.sec.gov
 www.globalind.com
 10




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ITEM 1A. RISK FACTORS
  Our business is substantially dependent on the level of capital expenditures in the oil and gas
industry, and lower capital expenditures will adversely affect our results of operations.
  
    
    the oil and gas industrys ability to economically justify placing discoveries of
oil and gas reserves in production;
    
    the oil and gas industrys need to maintain, repair, and replace existing pipelines
and structures to extend the life of production;
    
    the oil and gas industrys need to clear structures from the lease once the oil and
gas reserves have been depleted; and
    
    weather events, such as major tropical storms or hurricanes.
  Economic conditions could negatively impact our business.
   Our international operations expose us to additional risks inherent in doing business abroad.
  11




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
    
    currency exchange rate fluctuations, devaluations, and restrictions on currency
repatriation;
    
    unfavorable taxes, tax increases, and retroactive tax claims;
    
    the disruption of operations from labor and political disturbances;
    
    insurrection, war, or acts of terrorism that may disrupt markets;
    
    expropriation or seizure of our property;
    
    nullification, modification, or renegotiation of existing contracts;
    
    regional economic downturns;
    
    import/export quotas and other forms of public and governmental regulation; and
    
    inability to obtain or retain licenses required for operations.
  We are exposed to the substantial hazards and risks inherent in marine construction, and our
insurance coverage is limited.
   We depend on significant customers.
  If we are unable to attract and retain skilled workers our business will be adversely affected.
  12




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New construction projects are subject to risks, including delays and cost overruns, which could
have a material negative impact on our available cash resources and results of operations.
 Global 1200 Global 1201
 
    
    shortages of equipment, materials or skilled labor;
    
    unscheduled delays in the delivery of ordered materials and equipment;
    
    unanticipated cost increases;
    
    weather interferences;
    
    difficulties in obtaining necessary permits or in meeting permit conditions;
    
    design and engineering problems; and
    
    shipyard delays and performance issues.
  The implementation of our business strategy will expose our Company to additional operational risk.
  Our business is capital intensive, and our ability to finance our business depends on generating
sufficient cash flow from our operations.
  We have incurred losses in this and past years and may incur additional losses in the future which
could adversely affect our operations.
  We may be unable to obtain critical project materials or services on a timely basis.
 13




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We may not complete fixed-price or unit-rate contracts within our original estimates of costs,
which will adversely affect our results.
  Our industry is highly competitive.
   We operate in countries where corrupt behavior exists that could impair our ability to do business
in the future or result in significant fines or penalties.
  Our internal controls may not be sufficient to achieve all stated goals and objectives; existing
deficiencies may not be adequately remediated.
  14




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We have substantial funds held at domestic and foreign financial institutions that exceed the
insurance coverage offered by the FDIC and foreign governments, the loss of which would have a
severe negative effect on our operations and liquidity.
  Our investments in auction rate securities may be adversely impacted by continued liquidity risk.
  We may experience difficulties resolving claims and variation orders, which may adversely impact
our cash flows.
  15




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There might be delays or cancellation of projects included in our backlog.
  We may experience equipment or mechanical failures, which could increase costs, reduce revenues and
result in penalties for failure to meet project completion requirements.
  Our operations could suffer with the loss of one of our senior officers or other key personnel.
  Our revenues are subject to a significant number of tax regimes, and changes in the tax legislation
or the rules implementing tax legislation or the regulator enforcing those rules or legislation in
any one of these countries could negatively and adversely affect our results of operations.
  Our debt instruments contain covenants that limit our operating and financial flexibility.
  Critical accounting policies significantly affect our reported financial results and conditions.
  16




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Compliance with environmental and other governmental regulations could be costly and could
negatively impact our operations.
   We limit foreign ownership of our Company, which could reduce the price of our common stock.
  Provisions in our corporate documents and Louisiana law could delay or prevent a change in control
of our Company, even if that change would be beneficial to our shareholders.
  
 ITEM 1B. UNRESOLVED STAFF COMMENTS
  17




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ITEM 2. PROPERTIES
  Hercules Hercules Hercules Hercules
 Titan 2 Titan 2 Titan 2s
 Chickasaw Chickasaw
 Pioneer Pioneers Pioneer
 REM Commander REM Fortress REM Fortress REM Commander REM Fortress
 Olympic Challenger Olympic Challenger
 Global Orion
 18




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Global Orion
 Titan 2 Olympic
Challenger REM Commander REM Fortress
 Chickasaw
   19




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ApproximateSquare Feet
    
    Owned/LeasedLocation
    
    Principal Use
    
    or Acreage
    
    (Lease Expiration)Carlyss, LA
    
    Shore base/Corporate Headquarters
    
    603 acres
    
    OwnedPort of Iberia, LA
    
    Research and Development Center
    
    3,765 sq. ft.
    
    Leased (Mar. 2010)Houston, TX
    
    Office
    
    71,071 sq. ft.
    
    Leased (Jul. 2013)Cd. Del Carmen, Mexico
    
    Office/Workshop
    
    41,042 sq. ft.
    
    OwnedTema, Ghana
    
    Office/Shore base
    
    56,966 sq. ft.
    
    Leased (July 2011)Lagos, Nigeria
    
    Office
    
    11,690 sq. ft.
    
    Leased (Dec. 2012)Sharjah, United Arab Emirates
    
    Office
    
    13,946 sq. ft.
    
    Leased (April 2011)Mumbai, India
    
    Project Management Office
    
    7,365 sq. ft.
    
    Leased (Dec. 2011)Batam Island, Indonesia
    
    Shore base
    
    45 acres
    
    Leased (Mar. 2028)Singapore
    
    Office
    
    10,854 sq. ft.
    
    Leased (Aug. 2013)Al Khobar, Saudi Arabia
    
    Office
    
    5,434 sq. ft.
    
    Leased (Aug. 2009)Rio de Janeiro, Brazil
    
    Office
    
    6,480 sq. ft.
    
    Leased (Jun. 2010)
 Global Industries, Ltd.
Listing of Major Construction Vessels
 Derrick
    
    
    PipelayMaximum
    
    
    MaximumMaximum
    
    
    Pipe
    
    
    Water
    
    
    Year
    
    
    LivingLength
    
    
    Lift
    
    
    Diameter
    
    
    Depth
    
    
    Acquired
    
    
    QuarterVessel Name
    
    Vessel Type
    
    Capability
    
    (Feet)
    
    
    (Tons)
    
    
    (Inches)
    
    
    (Feet)
    
    
    /Leased
    
    
    CapacityTitan 2(1)
    
    Ship
    
    Derrick
    
    
    456
    
    
    
    880
    
    
    
    
    
    
    
    
    
    
    
    2001
    
    
    
    326Hercules
    
    Barge
    
    Pipelay/reel/derrick
    
    
    444
    
    
    
    2,000
    
    
    
    60.00
    
    
    
    10,000
    
    
    
    1995
    
    
    
    191Seminole
(2)
    
    Ship
    
    Pipelay/derrick ship
    
    
    424
    
    
    
    800
    
    
    
    48.00
    
    
    
    1,500
    
    
    
    1997
    
    
    
    220Comanche
    
    Barge
    
    Pipelay/derrick
    
    
    400
    
    
    
    1,000
    
    
    
    48.00
    
    
    
    1,500
    
    
    
    1996
    
    
    
    223Shawnee
    
    Barge
    
    Pipelay/derrick
    
    
    400
    
    
    
    860
    
    
    
    48.00
    
    
    
    1,500
    
    
    
    1996
    
    
    
    272Iroquois
    
    Barge
    
    Pipelay
    
    
    400
    
    
    
    250
    
    
    
    60.00
    
    
    
    1,000
    
    
    
    1997
    
    
    
    259DLB 264
    
    Barge
    
    Pipelay/derrick
    
    
    397
    
    
    
    1,000
    
    
    
    60.00
    
    
    
    1,000
    
    
    
    1998
    
    
    
    220DLB 332
    
    Barge
    
    Pipelay/derrick
    
    
    352
    
    
    
    750
    
    
    
    60.00
    
    
    
    1,000
    
    
    
    1998
    
    
    
    208Cheyenne
    
    Barge
    
    Pipelay/bury/derrick
    
    
    350
    
    
    
    800
    
    
    
    36.00
    
    
    
    1,500
    
    
    
    1992
    
    
    
    190Cherokee
    
    Barge
    
    Pipelay/derrick
    
    
    350
    
    
    
    925
    
    
    
    36.00
    
    
    
    1,500
    
    
    
    1990
    
    
    
    183Chickasaw
    
    Barge
    
    Pipelay/reel
    
    
    275
    
    
    
    160
    
    
    
    12.75
    
    
    
    6,000
    
    
    
    1990
    
    
    
    70Sea Constructor
    
    Barge
    
    Pipelay/bury
    
    
    250
    
    
    
    200
    
    
    
    24.00
    
    
    
    400
    
    
    
    1987
    
    
    
    104
 
 (1)
    
    The Titan 2is leased from a third party under a long-term charter agreement which expires in
May 2018.(2)
    
    The Seminole is currently in lay-up status. 20




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ITEM 3. LEGAL PROCEEDINGS
        21




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22




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ITEM 4. SUBMISSION OF MATTERS TO A VOTE OF SECURITY HOLDERS
  
 ITEM (Unnumbered). EXECUTIVE OFFICERS OF THE REGISTRANT
   Name
    
    Age
    
    PositionJohn A. Clerico
    
    
    67
    
    
    Chairman of the Board and Chief Executive OfficerPeter S. Atkinson
    
    
    61
    
    
    PresidentJeffrey B. Levos
    
    
    48
    
    
    Senior Vice President and Chief Financial OfficerRussell J. Robicheaux
    
    
    60
    
    
    Chief Administrative Officer and General CounselJames J. Doré
    
    
    54
    
    
    Senior Vice President, North America and Worldwide
Diving and Subsea ServicesByron W. Baker
    
    
    52
    
    
    Senior Vice President, Worldwide Fleet OperationsJohn M. Katok
    
    
    52
    
    
    Senior Vice President, Worldwide
Business DevelopmentEduardo Borja
    
    
    51
    
    
    Senior Vice President, Global Marketing and StrategyAshit Jain
    
    
    38
    
    
    Vice President, Asia Pacific/India and Middle East
     23




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PART II
 
 ITEM 5. MARKET FOR THE REGISTRANTS COMMON EQUITY, RELATED
SHAREHOLDER MATTERS AND ISSUER PURCHASES OF EQUITY  SECURITIES
  Common Stock PriceLow
    
    HighYear ended 2007:First quarter
    
    $
    12.47
    
    
    $
    18.29Second quarter
    
    
    19.00
    
    
    
    26.82Third quarter
    
    
    20.46
    
    
    
    28.88Fourth quarter
    
    
    21.42
    
    
    
    27.74Year ended 2008:First quarter
    
    $
    15.62
    
    
    $
    22.92Second quarter
    
    
    15.86
    
    
    
    19.73Third quarter
    
    
    6.57
    
    
    
    17.50Fourth quarter
    
    
    2.10
    
    
    
    6.70
    25




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ITEM 6. SELECTED FINANCIAL DATA
  Year Ended December 31,2008
    
    
    2007
    
    
    2006
    
    
    2005
    
    
    2004(in thousands, except per share and ratio data)Revenues
    
    $
    1,070,988
    
    
    $
    992,513
    
    
    $
    1,234,849
    
    
    $
    688,615
    
    
    $
    463,331Cost of operations
    
    
    1,084,581
    
    
    
    719,768
    
    
    
    887,003
    
    
    
    571,768
    
    
    
    398,875Gross profit (loss)
    
    
    (13,593
    )
    
    
    272,745
    
    
    
    347,846
    
    
    
    116,847
    
    
    
    64,456Loss on asset impairments
    
    
    2,551
    
    
    
    141
    
    
    
    8,931
    
    
    
    
    
    
    
    7,173Provision for Vinci (GTM) litigation
    
    
    
    
    
    
    
    
    
    
    (13,699
    )
    
    
    
    
    
    
    Net gain on asset disposal
    
    
    (1,695
    )
    
    
    (4,220
    )
    
    
    (6,395
    )
    
    
    (5,303
    )
    
    
    (18,246
    )Selling, general and administrative expenses
    
    
    95,364
    
    
    
    81,275
    
    
    
    71,109
    
    
    
    50,916
    
    
    
    37,923Operating income (loss)
    
    
    (109,813
    )
    
    
    195,549
    
    
    
    287,900
    
    
    
    71,234
    
    
    
    37,606Interest income
    
    
    14,477
    
    
    
    27,966
    
    
    
    8,169
    
    
    
    3,304
    
    
    
    976Interest expense
    
    
    (13,624
    )
    
    
    (13,439
    )
    
    
    (10,787
    )
    
    
    (10,192
    )
    
    
    (14,797
    )Other income (expense), net
    
    
    (641
    )
    
    
    3,826
    
    
    
    705
    
    
    
    1,668
    
    
    
    (2,623
    )Income (loss) from continuing operations
before income taxes
    
    
    (109,601
    )
    
    
    213,902
    
    
    
    285,987
    
    
    
    66,014
    
    
    
    21,162Income taxes
    
    
    7,760
    
    
    
    53,942
    
    
    
    86,242
    
    
    
    31,256
    
    
    
    14,640Income (loss) from continuing operations,
net of income taxes
    
    
    (117,361
    )
    
    
    159,960
    
    
    
    199,745
    
    
    
    34,758
    
    
    
    6,522Income from discontinued operations,
net of income taxes(1)
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    15,910Net income (loss)
    
    $
    (117,361
    )
    
    $
    159,960
    
    
    $
    199,745
    
    
    $
    34,758
    
    
    $
    22,432Net income (loss) per diluted shareContinuing operations
    
    $
    (1.03
    )
    
    $
    1.36
    
    
    $
    1.70
    
    
    $
    0.30
    
    
    $
    0.06Discontinued operations
    
    
    0.00
    
    
    
    0.00
    
    
    
    0.00
    
    
    
    0.00
    
    
    
    0.14Net income (loss)
    
    $
    (1.03
    )
    
    $
    1.36
    
    
    $
    1.70
    
    
    $
    0.30
    
    
    $
    0.20Ratio of earnings to fixed charges (2)
    
    
    n/a
    (3)
    
    
    7.3x
    
    
    
    12.0x
    
    
    
    5.6x
    
    
    
    2.2xTotal assets (4)
    
    $
    1,485,594
    
    
    $
    1,589,798
    

    
    $

    1,070,997
    
    
    $
    844,662
    
    
    $
    743,240Working capital (4)
    
    $
    380,894
    
    
    $
    843,017
    
    
    $
    460,126
    
    
    $
    232,050
    
    
    $
    186,647Long-term debt (4)
    
    $
    390,340
    
    
    $
    394,300
    
    
    $
    73,260
    
    
    $
    77,220
    
    
    $
    81,180
 
 (1)
    
    Includes the gain on the sale of our Liftboat Division in 2004 of $16.1 million net of tax.(2)
    
    For purposes of computing the ratios of earnings to fixed charges: (1) earnings consist of
income from continuing operations before income taxes plus fixed charges, excluding
capitalized interest, and (2) fixed charges consist of interest expense (including capitalized
interest) and the estimated interest component of rent expense (one-third of total rent
expense). There were no dividends paid or accrued during the periods presented above.(3)
    
    Earnings were inadequate to cover fixed charges by $75.6 million for 2008. For further
discussion, see Note 8 to the Notes to the Consolidated Financial Statements.(4)
    
    As of the end of the period. 26




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ITEM 7. MANAGEMENTS DISCUSSION AND ANALYSIS OF FINANCIAL
CONDITION AND RESULTS OF OPERATIONS
  Results of Operations
 2008 Overview
  General
  
    
    a geographical shift of India operations from the Middle East to the Asia Pacific;
    
    transfer of a portion of subsea services from the Middle East to West Africa; and
    
    corporate interest income and expense no longer being allocated to the reportable
segments.
   27




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Offshore Construction Services
    Subsea Services
  28




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Year Ended December 31, 2008 Compared to Year Ended December 31, 2007
 2008
    
    
    2007% of
    
    
    
    
    
    
    % of
    
    
    % ChangeThousands
    
    
    Revenue
    
    
    Thousands
    
    
    Revenue
    
    
    (Unfavorable)Revenues
    
    $
    1,070,988
    
    
    
    100.0
    %
    
    $
    992,513
    
    
    
    100.0
    %
    
    
    7.9
    %Cost of operations
    
    
    1,084,581
    
    
    
    101.3
    
    
    
    719,768
    
    
    
    72.5
    
    
    
    (50.7
    )Gross profit (loss)
    
    
    (13,593
    )
    
    
    1.3
    
    
    
    272,745
    
    
    
    27.5
    
    
    
    (105.0
    )Loss on asset impairments
    
    
    2,551
    
    
    
    
    
    
    
    141
    
    
    
    
    
    
    
    n/mNet gain on asset disposal
    
    
    (1,695
    )
    
    
    
    
    
    
    (4,220
    )
    
    
    0.4
    
    
    
    (59.8
    )Selling, general and administrative
expenses
    
    
    95,364
    
    
    
    8.9
    
    
    
    81,275
    
    
    
    8.2
    
    
    
    (17.3
    )Operating income (loss)
    
    
    (109,813
    )
    
    
    10.2
    
    
    
    195,549
    
    
    
    19.7
    
    
    
    (156.2
    )Interest income
    
    
    14,477
    
    
    
    1.4
    
    
    
    27,966
    
    
    
    2.8
    
    
    
    (48.2
    )Interest expense
    
    
    (13,624
    )
    
    
    1.3
    
    
    
    (13,439
    )
    
    
    1.4
    
    
    
    (1.4
    )Other income (expense), net
    
    
    (641
    )
    
    
    
    
    
    
    3,826
    
    
    
    0.4
    
    
    
    (116.8
    )Income (loss) before income taxes
    
    
    (109,601
    )
    
    
    10.3
    
    
    
    213,902
    
    
    
    21.5
    
    
    
    (151.2
    )Income taxes
    
    
    7,760
    
    
    
    0.7
    
    
    
    53,942
    
    
    
    5.4
    
    
    
    85.6Net income (loss)
    
    $
    (117,361
    )
    
    
    11.0
    %
    
    $
    159,960
    
    
    
    16.1
    %
    
    
    (173.4
    )%
 Revenues 
 Depreciation and Amortization in Cost of Operations .
 Gross Profit 
 Loss on Asset Impairments
 29




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##### Table of Contents



Gain on Asset Disposal.
 Selling, General and Administrative Expenses 
 Interest Income 
 Interest Expense 
 Other income (expense), net 
 Income Taxes 
 Segment Information
 Utilization of Major Construction Vessels
  North America Offshore Construction Division
 30




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##### Table of Contents



Cherokee
 North America Subsea
 Global Orion Olympic Challenger REM Commander
 Latin America
  West Africa
  Middle East
  31




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##### Table of Contents



Asia Pacific/India
  Year Ended December 31, 2007 Compared to Year Ended December 31, 2006
 2007
    
    
    2006% of
    
    
    
    
    
    
    % of
    
    
    % ChangeThousands
    
    
    Revenue
    
    
    Thousands
    
    
    Revenue
    
    
    (Unfavorable)Revenues
    
    $
    992,513
    
    
    
    100.0
    %
    
    $
    1,234,849
    
    
    
    100.0
    %
    
    
    (19.6
    )%Cost of operations
    
    
    719,768
    
    
    
    72.5
    
    
    
    887,003
    
    
    
    71.8
    
    
    
    18.9Gross profit (loss)
    
    
    272,745
    
    
    
    27.5
    
    
    
    347,846
    
    
    
    28.2
    
    
    
    (21.6
    )Loss on asset impairments
    
    
    141
    
    
    
    
    
    
    
    8,931
    
    
    
    0.7
    
    
    
    98.4Reduction in litigation provision
    
    
    
    
    
    
    
    
    
    
    (13,699
    )
    
    
    1.1
    
    
    
    (100.0
    )Net gain on asset disposal
    
    
    (4,220
    )
    
    
    0.4
    
    
    
    (6,395
    )
    
    
    0.5
    
    
    
    (34.0
    )Selling, general and
administrative expenses
    
    
    81,275
    
    
    
    8.2
    
    
    
    71,109
    
    
    
    5.8
    
    
    
    (14.3
    )Operating income
    
    
    195,549
    
    
    
    19.7
    
    
    
    287,900
    
    
    
    23.3
    
    
    
    (32.1
    )Interest income
    
    
    27,966
    
    
    
    2.8
    
    
    
    8,169
    
    
    
    .7
    
    
    
    242.3Interest expense
    
    
    (13,439
    )
    
    
    1.4
    
    
    
    (10,787
    )
    
    
    0.9
    
    
    
    (24.6
    )Other income (expense), net
    
    
    3,826
    
    
    
    0.4
    
    
    
    705
    
    
    
    
    
    
    
    n/mIncome before income taxes
    
    
    213,902
    
    
    
    21.5
    
    
    
    285,987
    
    
    
    23.2
    
    
    
    (25.2
    )Income taxes
    
    
    53,942
    
    
    
    5.4
    
    
    
    86,242
    
    
    
    7.0
    
    
    
    37.5Net income
    
    $
    159,960
    
    
    
    16.1
    %
    
    $
    199,745
    
    
    
    16.2
    %
    
    
    (19.9
    )%
 Revenues.
 Depreciation and Amortization in Cost of Operations.
 32




---



##### Table of Contents



Gross Profit. .
 Loss on Asset Impairments
 Reduction in Litigation Provision.
 Gain on Asset Disposal.
 Selling, General, and Administrative Expenses.
 Interest Expense.
 Interest Income.
 Other income (expense), net.
 Income Taxes
 Segment Information
 33




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##### Table of Contents



North America Offshore Construction Division
  North America Subsea
 REM Commander Pioneer
 Latin America
  West Africa
  Middle East
  34




---



##### Table of Contents



Rem Fortress
 Asia Pacific/India
  Industry and Business Outlook
    35




---



##### Table of Contents



Liquidity and Capital Resources
 Overview
  Global 1200 Global 1201
 Cash Flows
 Operating Activities
 Investing Activities  Global 1200 Global 1201 Global Orion
 Financing Activities
 Long-Term Debt
  36




---



##### Table of Contents



Other Indebtedness and Obligations
  Charters  Titan 2 Titan 2
 Rem Commander Rem Fortress Olympic Challenger
 37




---



##### Table of Contents



Future Lease Obligations 
 2009
    
    $
    43,0142010
    
    
    30,7652011
    
    
    25,1402012
    
    
    19,3832013
    
    
    11,720Thereafter
    
    
    14Total
    
    $
    130,036
 Summary of Contractual Obligations as of December 31, 2008
 Payments due by periodLess
    
    
    
    
    
    
    
    
    
    
    Morethan 1
    
    
    1-3
    
    
    3-5
    
    
    than 5Contractual Obligations
    
    Total
    
    
    year
    
    
    years
    
    
    years
    
    
    years(in thousands)Long-Term Debt Principal Only
    
    $
    390,340
    
    
    $
    3,960
    
    
    $
    7,920
    
    
    $
    7,920
    
    
    $
    370,540Long-Term Debt Interest Only(1)
    
    
    89,287
    
    
    
    13,899
    
    
    
    26,882
    
    
    
    25,661
    
    
    
    22,845Operating Lease Obligations  Cancelable
    
    
    66,192
    
    
    
    5,668
    
    
    
    12,908
    
    
    
    9,364
    
    
    
    38,698Operating Lease Obligations  Non-Cancelable
    
    
    130,036
    
    
    
    43,014
    
    
    
    55,905
    
    
    
    31,103
    
    
    
    14Purchase Obligations(2)
    
    
    311,108
    
    
    
    164,293
    
    
    
    146,815
    
    
    
    
    
    
    
    Total
    
    $
    986,963
    
    
    $
    230,834
    
    
    $
    250,430
    
    
    $
    74,048
    
    
    $
    432,097
 
 (1)
    
    Includes interest expense on our Senior Convertible Debentures, assuming conversion on the earliest call date of August 1, 2014.(2)
    
    Primarily represents purchase orders outstanding for the construction of the vessels designated Global 1200 and 1201 which do not include
capitalized interest. Accounting for Uncertainty in Income Taxes  an Interpretation of FASB
Statement No. 109
 Off Balance Sheet Arrangements
 , ,
 Liquidity Risk
  38




---



##### Table of Contents




    
    temporarily cash-collateralize letters of credit and bank guarantees;
    
    temporarily waive compliance with certain financial covenants;
    
    temporarily prohibit share repurchases; and
    
    temporarily maintain unencumbered liquidity of $100 million.
   
    
    allow for a new starting point in measuring financial performance; and
    
    permit borrowings and/or the issuance of letters of credit and bank guarantees based on
a rate premium over prime rate ranging from 1.50% to 3.00% or London Interbank Offered Rate
(LIBOR) ranging from 2.00% to 3.50% based upon certain financial ratios.
   Liquidity Outlook
  39




---



##### Table of Contents



Recent Accounting Pronouncements
 SFAS 141. Business Combinations
 SFAS 157. Fair Value Measurements Effective Date for FASB
Statement 157. Determining the Fair Value of a Financial Asset When the Market for
That Asset Is Not Active
 SFAS 159. The Fair Value Option for Financial
Assets and Financial Liabilities
 40




---



##### Table of Contents



SFAS 160. Noncontrolling Interests in Consolidated
Financial Statements,
 SFAS 161 Disclosures about Derivative Instruments
and Hedging Activities
 FSP FAS 142-3. Determination of the Useful Life of
Intangible Assets Goodwill and Other Intangible Assets
 FSP APB 14-1 , Accounting for Convertible Debt
Instruments That May Be Settled in Cash upon Conversion (Including Partial Cash Settlement),
 FSP EITF 03-6-1. Determining Whether Instruments
Granted in Share-Based Payment Transactions Are Participating Securities Earnings Per Share"
 41




---



##### Table of Contents



Critical Accounting Policies and Estimates
  Revenue Recognition
   Receivables
  Property and Equipment
   42




---



##### Table of Contents



Impairment of Goodwill
 Goodwill and Other Intangible Assets
 Income Taxes
    Accounting
for Uncertainty in Income Taxes  an interpretation of FASB Statement No. 109
 43




---



##### Table of Contents



ITEM 7A. QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK
  Foreign Currency Risk
       Interest Rate Risk
  44




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##### Table of Contents



45




---



##### Table of Contents



ITEM 8. FINANCIAL STATEMENTS AND SUPPLEMENTARY DATA
 REPORT OF INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM
 
 Internal
Control-Integrated Framework
    Internal
Control-Integrated Framework
 46




---



##### Table of Contents



DELOITTE & TOUCHE LLP
 47




---



##### Table of Contents



REPORT OF INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM
 
    Internal Control-Integrated Framework
 DELOITTE & TOUCHE LLP
 48




---



##### Table of Contents



GLOBAL INDUSTRIES, LTD.
CONSOLIDATED BALANCE SHEETS  (in thousands)
 December 31,2008
    
    
    2007ASSETSCurrent AssetsCash and cash equivalents
    
    $
    287,669
    
    
    $
    723,450Restricted cash
    
    
    94,516
    
    
    
    1,121Marketable securities
    
    
    
    
    
    
    99,935Accounts receivable  net of allowance of $12,070 for 2008
and $1,278 for 2007
    
    
    180,018
    
    
    
    167,469Unbilled work on uncompleted contracts
    
    
    86,011
    
    
    
    106,716Contract costs incurred not yet recognized
    
    
    11,982
    
    
    
    10,821Deferred income taxes
    
    
    7,223
    
    
    
    3,827Assets held for sale
    
    
    2,181
    
    
    
    1,002Prepaid expenses and other
    
    
    44,585
    
    
    
    27,875Total current assets
    
    
    714,185
    
    
    
    1,142,216Property and Equipment, net
    
    
    593,522
    
    
    
    349,549Other AssetsMarketable securities  long-term
    
    
    42,375
    
    
    
    Accounts receivable  long-term
    
    
    22,246
    
    
    
    9,315Deferred charges, net
    
    
    72,370
    
    
    
    43,045Goodwill
    
    
    37,388
    
    
    
    37,388Other
    
    
    3,508
    
    
    
    8,285Total other assets
    
    
    177,887
    
    
    
    98,033Total
    
    $
    1,485,594
    
    
    $
    1,589,798LIABILITIES AND SHAREHOLDERS EQUITYCurrent LiabilitiesCurrent maturities of long term debt
    
    $
    3,960
    
    
    $
    3,960Accounts payable
    
    
    207,239
    
    
    
    169,034Employee-related liabilities
    
    
    26,113
    
    
    
    28,366Income taxes payable
    
    
    38,649
    
    
    
    39,683Accrued interest payable
    
    
    5,613
    
    
    
    5,827Advance billings on uncompleted contracts
    
    
    4,609
    
    
    
    36,691Accrued anticipated contract losses
    
    
    35,055
    
    
    
    Other accrued liabilities
    
    
    12,053
    
    
    
    15,638Total current liabilities
    
    
    333,291
    
    
    
    299,199Long-Term Debt
    
    
    386,380
    
    
    
    390,340Deferred Income Taxes
    
    
    28,941
    
    
    
    35,617Other Liabilities
    
    
    13,266
    
    
    
    11,050Commitments and Contingencies
    
    
    
    
    
    
    Shareholders EquityCommon stock, $0.01 par value, 150,000 authorized, and 119,650 and 118,001 shares
issued at December 31, 2008 and 2007, respectively
    
    
    1,197
    
    
    
    1,180Additional paid-in capital
    
    
    441,105
    
    
    
    418,366Retained earnings
    
    
    397,845
    
    
    
    515,206Treasury stock at cost, 6,130 in 2008 and 2,904 in 2007
    
    
    (105,038
    )
    
    
    (77,257
    )Accumulated other comprehensive loss
    
    
    (11,393
    )
    
    
    (3,903
    )Total shareholders equity
    
    
    723,716
    
    
    
    853,592Total
    
    $
    1,485,594
    
    
    $
    1,589,798
  49




---



##### Table of Contents



GLOBAL INDUSTRIES, LTD.
CONSOLIDATED STATEMENTS OF OPERATIONS  (in thousands, except per share data)
 Year Ended December 31,2008
    
    
    2007
    
    
    2006Revenues
    
    $
    1,070,988
    
    
    $
    992,513
    
    
    $
    1,234,849Cost of operations
    
    
    1,084,581
    
    
    
    719,768
    
    
    
    887,003Gross profit (loss)
    
    
    (13,593
    )
    
    
    272,745
    
    
    
    347,846Loss on asset impairments
    
    
    2,551
    
    
    
    141
    
    
    
    8,931Reduction in litigation provision
    
    
    
    
    
    
    
    
    
    
    (13,699
    )Net gain on asset disposal
    
    
    (1,695
    )
    
    
    (4,220
    )
    
    
    (6,395
    )Selling, general, and administrative expenses
    
    
    95,364
    
    
    
    81,275
    
    
    
    71,109Operating income (loss)
    
    
    (109,813
    )
    
    
    195,549
    
    
    
    287,900Interest income
    
    
    14,477
    
    
    
    27,966
    
    
    
    8,169Interest expense
    
    
    (13,624
    )
    
    
    (13,439
    )
    
    
    (10,787
    )Other income (expense), net
    
    
    (641
    )
    
    
    3,826
    
    
    
    705Income (loss) from operations before income taxes
    
    
    (109,601
    )
    
    
    213,902
    
    
    
    285,987Income taxes
    
    
    7,760
    
    
    
    53,942
    
    
    
    86,242Net income (loss)
    
    $
    (117,361
    )
    
    $
    159,960
    
    
    $
    199,745Earnings (loss) per common share:Basic
    
    $
    (1.03
    )
    
    $
    1.38
    
    
    $
    1.73Diluted
    
    $
    (1.03
    )
    
    $
    1.36
    
    
    $
    1.70Weighted Average Shares Outstanding:Basic
    
    
    113,647
    
    
    
    116,137
    
    
    
    115,632Diluted
    
    
    113,647
    
    
    
    117,819
    
    
    
    117,307
  50




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##### Table of Contents



GLOBAL INDUSTRIES, LTD.
CONSOLIDATED STATEMENTS OF SHAREHOLDERS EQUITY  (in thousands, except share data)
 AccumulatedAdditional
    
    
    
    
    
    
    OtherCommon Stock
    
    
    Paid-In
    
    
    Treasury
    
    
    Comprehensive
    
    
    RetainedShares
    
    
    Amount
    
    
    Capital
    
    
    Stock
    
    
    Loss
    
    
    Earnings
    
    
    TotalBalance at Jan. 1, 2006
    
    
    114,343,661
    
    
    $
    1,144
    
    
    $
    350,550
    
    
    $
    
    
    
    $
    (8,978
    )
    
    $
    154,089
    
    
    $
    496,805Net income
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    199,745
    
    
    
    199,745Amortization of unearned
stock compensation
    
    
    
    
    
    
    
    
    
    
    9,721
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    9,721Restricted stock issues, net
    
    
    760,277
    
    
    
    7
    
    
    
    5,446
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    5,453Exercise of stock options
    
    
    1,053,042
    
    
    
    10
    
    
    
    9,210
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    9,220Tax effect of exercise of
stock options
    
    
    
    
    
    
    
    
    
    
    3,690
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    3,690Common stock issued
    
    
    95,431
    
    
    
    1
    
    
    
    680
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    681Treasury stock purchased
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    (644
    )
    
    
    
    
    
    
    
    
    
    
    (644
    )Comprehensive income, net
of tax:Gain on derivatives
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    894
    
    
    
    
    
    
    
    894Balance at Dec. 31, 2006
    
    
    116,252,411
    
    
    $
    1,162
    
    
    $
    379,297
    
    
    $
    (644
    )
    
    $
    (8,084
    )
    
    $
    353,834
    
    
    $
    725,565Net income
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    159,960
    
    
    
    159,960Cumulative effect of
adopting FIN 48
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    1,412
    
    
    
    1,412Amortization of unearned
stock compensation
    
    
    
    
    
    
    
    
    
    
    14,059
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    14,059Restricted stock issues, net
    
    
    203,816
    
    
    
    2
    
    
    
    2,564
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    2,566Exercise of stock options
    
    
    1,544,559
    
    
    
    16
    
    
    
    17,669
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    17,685Tax effect of exercise of
stock options
    
    
    
    
    
    
    
    
    
    
    4,777
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    4,777Common stock issued
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    Treasury stock purchased
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    (76,613
    )
    
    
    
    
    
    
    
    
    
    
    (76,613
    )Comprehensive income, net
of tax:Gain on derivatives
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    4,181
    
    
    
    
    
    
    
    4,181Balance at Dec. 31, 2007
    
    
    118,000,786
    
    
    $
    1,180
    
    
    $
    418,366
    
    
    $
    (77,257
    )
    
    $
    (3,903
    )
    
    $
    515,206
    
    
    $
    853,592Net income (loss)
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    (117,361
    )
    
    
    (117,361
    )Amortization of unearned
stock compensation
    
    
    
    
    
    
    
    
    
    
    8,375
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    8,375Restricted stock issues, net
    
    
    681,446
    
    
    
    7
    
    
    
    2,648
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    2,655Exercise of stock options
    
    
    967,628
    
    
    
    10
    
    
    
    8,595
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    8,605Tax effect of exercise of
stock options
    
    
    
    
    
    
    
    
    
    
    3,121
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    3,121Common stock issued
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    Treasury stock purchased
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    (27,781
    )
    
    
    
    
    
    
    
    
    
    
    (27,781
    )Comprehensive income, net
of tax:Loss on derivatives
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    (7,490
    )
    
    
    
    
    
    
    (7,490
    )Balance at Dec. 31, 2008
    
    
    119,649,860
    
    
    $
    1,197
    
    
    $
    441,105
    
    
    $
    (105,038
    )
    
    $
    (11,393
    )
    
    $
    397,845
    
    
    $
    723,716
  51




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##### Table of Contents



GLOBAL INDUSTRIES, LTD.
CONSOLIDATED STATEMENTS OF CASH FLOWS  in thousands)
 Year Ended December 31,2008
    
    
    2007
    
    
    2006Cash Flows From Operating ActivitiesNet income (loss)
    
    $
    (117,361
    )
    
    $
    159,960
    
    
    $
    199,745Adjustments to reconcile net income (loss) to net cash provided by
(used in) operating activities:Depreciation and non-stock-based amortization
    
    
    53,324
    
    
    
    45,214
    
    
    
    51,190Stock-based compensation expense
    
    
    11,024
    
    
    
    16,625
    
    
    
    15,173Provision for doubtful accounts
    
    
    11,512
    
    
    
    (3,537
    )
    
    
    29,010Gain on sale or disposal of property and equipment
    
    
    (1,695
    )
    
    
    (4,220
    )
    
    
    (6,395
    )Derivative (gain) loss
    
    
    613
    
    
    
    (249
    )
    
    
    Loss on asset impairments
    
    
    2,551
    
    
    
    141
    
    
    
    8,931Reduction in litigation provision
    
    
    
    
    
    
    
    
    
    
    (13,699
    )Deferred income taxes
    
    
    (10,533
    )
    
    
    (17,133
    )
    
    
    11,003Tax penalties, fees, and adjustments
    
    
    
    
    
    
    
    
    
    
    3,267Excess tax benefits from stock-based compensation
    
    
    (4,139
    )
    
    
    (4,777
    )
    
    
    (3,690
    )Changes in operating assets and liabilitiesAccounts receivable, unbilled work, and contract costs
    
    
    (20,911
    )
    
    
    31,440
    
    
    
    (67,617
    )Prepaid expenses and other
    
    
    (19,929
    )
    
    
    (9,693
    )
    
    
    16,389Accounts payable, employee-related liabilities, and
other accrued liabilities
    
    
    23,599
    
    
    
    84,550
    
    
    
    38,723Deferred dry-docking costs incurred
    
    
    (47,223
    )
    
    
    (30,651
    )
    
    
    (13,895
    )Litigation settlement payment
    
    
    
    
    
    
    
    
    
    
    (22,050
    )Net cash provided by (used in) operating activities
    
    
    (119,168
    )
    
    
    267,670
    
    
    
    246,085Cash Flows From Investing ActivitiesProceeds from the sale of assets
    
    
    6,490
    
    
    
    5,813
    
    
    
    13,431Additions to property and equipment
    
    
    (267,929
    )
    
    
    (61,792
    )
    
    
    (42,450
    )Purchase of marketable securities
    
    
    (49,545
    )
    
    
    (466,680
    )
    
    
    Sale of marketable securities
    
    
    107,105
    
    
    
    366,745
    
    
    
    Decrease in (additions to) restricted cash
    
    
    (93,395
    )
    
    
    (48
    )
    
    
    404Net cash (used in) investing activities
    
    
    (297,274
    )
    
    
    (155,962
    )
    
    
    (28,615
    )Cash Flows From Financing ActivitiesProceeds from the sale of common stock, net
    
    
    8,605
    
    
    
    17,685
    
    
    
    9,220Additions to deferred charges
    
    
    (342
    )
    
    
    (7,325
    )
    
    
    (736
    )Repayment of long-term debt
    
    
    (3,960
    )
    
    
    (3,960
    )
    
    
    (3,960
    )Repurchase of common stock
    
    
    (27,781
    )
    
    
    (76,613
    )
    
    
    (644
    )Proceeds from long-term debt
    
    
    
    
    
    
    325,000
    
    
    
    Excess tax benefits from stock-based compensation
    
    
    4,139
    
    
    
    4,777
    
    
    
    3,690Net cash provided by (used in) financing activities
    
    
    (19,339
    )
    
    
    259,564
    
    
    
    7,570Cash and Cash EquivalentsIncrease (decrease)
    
    
    (435,781
    )
    
    
    371,272
    
    
    
    225,040Beginning of period
    
    
    723,450
    
    
    
    352,178
    
    
    
    127,138End of period
    
    $
    287,669
    
    
    $
    723,450
    
    
    $
    352,178
  52




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##### Table of Contents



GLOBAL INDUSTRIES, LTD.
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
 1. Organization and Summary of Significant Accounting Policies
 Organization
 Principles of Consolidation
 Cash and Cash Equivalents
 Restricted Cash
 Marketable Securities 
 Receivables 
 53




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##### Table of Contents



Assets Held for Sale Accounting for the Impairment or
Disposal of Long-lived Assets, Sea Puma Ocean Winsertor; Tonkawa
 Property and Equipment, and Depreciation
  Marine barges, vessels, and related equipment
    
    5  25 yearsMachinery and equipment
    
    5  18 yearsTransportation equipment
    
    3  10 yearsFurniture and fixtures
    
    2  12 yearsBuildings and leasehold improvements
    
    3  40 years
 Interest Capitalization
 Deferred Charges
  54




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##### Table of Contents



Goodwill
 Impairment of Long-Lived Assets Accounting for the
Impairment or Disposal of Long-lived Assets,
 Contracts in Progress and Revenue Recognition Accounting for
Performance of Construction Type and Certain Production Type Contracts
  Derivative Financial Instruments Accounting for Derivative Instruments and Hedging Activity
  55




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##### Table of Contents



Foreign Currency Translation
 Stock-Based Compensation  Share-Based Payment Accounting for Stock Issued to Employees,
 Income Taxes Accounting for
Uncertainty in Income Taxes  an interpretation of FASB Statement No. 109
    Concentration of Credit Risk
 Use of Estimates
 56




---



##### Table of Contents



Basic and Diluted Earnings Per Share
 Recent Accounting Pronouncements
 SFAS 141. Business Combinations
 SFAS 157. Fair Value Measurements Effective Date for FASB
Statement 157 Determining the Fair Value of a Financial Asset When the Market for
That Asset Is Not Active
 SFAS 159. The Fair Value Option for Financial
Assets and Financial Liabilities
 SFAS 160. Noncontrolling Interests in Consolidated
Financial Statements,
 57




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##### Table of Contents



SFAS 161 Disclosures about Derivative Instruments
and Hedging Activities
 FSP FAS 142-3. Determination of the Useful Life of
Intangible Assets Goodwill and Other Intangible Assets
 FSP APB 14-1 , Accounting for Convertible Debt
Instruments That May Be Settled in Cash upon Conversion (Including Partial Cash Settlement),
 FSP EITF 03-6-1. Determining Whether Instruments
Granted in Share-Based Payment Transactions Are Participating Securities Earnings Per Share
 58




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##### Table of Contents



Reclassifications
   2. Marketable Securities
        59




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##### Table of Contents



3. Fair Value of Financial Instruments
      (In thousands)
 Description
    
    Total
    
    
    Level 1
    
    
    Level 2
    
    
    Level 3Cash equivalents
    
    $
    122,107
    
    
    $
    122,107
    
    
    $
    
    
    
    $
    Marketable securities
    
    
    42,375
    
    
    
    
    
    
    
    
    
    
    
    42,375Derivative contracts
    
    
    (3,716
    )
    
    
    
    
    
    
    (3,716
    )
    
    
    Total
    
    $
    160,766
    
    
    $
    122,107
    
    
    $
    (3,716
    )
    
    $
    42,375
   60




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##### Table of Contents



Changes in Level 3 Financial Instruments
 Twelve Months EndedDecember 31(In thousands)Beginning Balance
    
    $
    48,800Purchases, issuances, and settlements
    
    
    (13,550
    )Unrealized gain (loss)
    
    
    Transfers in and/or (out) of Level 3
    
    
    7,125Balance at December 31, 2008
    
    $
    42,375
 4. Receivables
   61




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##### Table of Contents



Costs and Estimated Earnings on Uncompleted Contracts
 December 31,2008
    
    
    2007(in thousands)Costs incurred and recognized on uncompleted contracts
    
    $
    738,496
    
    
    $
    838,856Estimated earnings
    
    
    (19,411
    )
    
    
    322,089Costs and estimated earnings on uncompleted contracts
    
    
    719,085
    
    
    
    1,160,945Less: Billings to date
    
    
    (653,373
    )
    
    
    (1,091,255
    )65,712
    
    
    
    69,690Plus: Accrued revenue(1)
    
    
    15,770
    
    
    
    8,371Less: Advance billing on uncompleted contracts
    
    
    (80
    )
    
    
    (8,036
    )$
    81,402
    
    
    $
    70,025Included in accompanying balance sheets under the
following captions:Unbilled work on uncompleted contracts
    
    $
    86,011
    
    
    $
    106,716Advance billings on uncompleted contracts
    
    
    (4,609
    )
    
    
    (36,691
    )$
    81,402
    
    
    $
    70,025
 
 (1)
    
    Accrued revenue represents unbilled amounts receivable related to work performed on projects for which the
percentage of completion method is not applicable. 5. Property and Equipment
  December 31,2008
    
    
    2007(in thousands)Land
    
    $
    6,322
    
    
    $
    6,322Facilities and equipment
    
    
    179,650
    
    
    
    155,676Marine barges, vessels, and related equipment
    
    
    535,042
    
    
    
    428,021Construction in progress
    
    
    203,271
    
    
    
    68,757924,285
    
    
    
    658,776Less accumulated depreciation and amortization
    
    
    (330,763
    )
    
    
    (309,227
    )Property and equipment  net
    
    $
    593,522
    
    
    $
    349,549
   6. Deferred Dry Docking Costs
 62




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##### Table of Contents



Year Ended December 31,2008
    
    
    2007
    
    
    2006(in thousands)Net book value at beginning of period
    
    $
    30,734
    
    
    $
    13,672
    
    
    $
    12,312Additions for the period
    
    
    47,223
    
    
    
    30,651
    
    
    
    13,895Amortization expense for the period
    
    
    (16,405
    )
    
    
    (13,589
    )
    
    
    (12,535
    )Net book value at end of period
    
    $
    61,552
    
    
    $
    30,734
    
    
    $
    13,672
 7. Derivative Financial Instruments
  Accounting for Derivative
Instruments and Hedging Activities,
  63




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##### Table of Contents



8. Long-Term Debt
  December 31,2008
    
    
    2007(in thousands)United States Government Guaranteed Ship
Financing Bonds, 2000 Series dated February
15, 2000, payable in semi-annual principal
installments of $1.98 million with an
interest rate of 7.71%, maturing February
15, 2025, and collateralized by the
Herculesvessel and related equipment with
a net book value of $90.1 million at
December 31, 2008
    
    $
    65,340
    
    
    $
    69,300Senior Convertible Debentures are due in
August 2027, Unsecured indebtedness with an
interest rate of 2.75% payable
semi-annually
    
    
    325,000
    
    
    
    325,000Revolving Credit Facility with a syndicate
of commercial banks, collateralized by real
estate, fleet mortgage on vessels and stock
pledge of subsidiaries, interest payable at
variable rates
    
    
    
    
    
    
    Total long-term debt
    
    
    390,340
    
    
    
    394,300Less current maturities
    
    
    3,960
    
    
    
    3,960Long-term debt, less current maturities
    
    $
    386,380
    
    
    $
    390,340
  2009
    
    $
    3,9602010
    
    
    3,9602011
    
    
    3,9602012
    
    
    3,9602013
    
    
    3,960Thereafter
    
    
    370,540Total
    
    $
    390,340
 United States Government Guaranteed Ship Financing Bond (Title XI bonds)
  Senior Convertible Debentures 
 64




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##### Table of Contents



Revolving Credit Facility 
 
    
    temporarily cash-collateralize letters of credit and bank guarantees;
    
    temporarily waive compliance with certain financial covenants;
    
    temporarily prohibit share repurchases; and
    
    temporarily maintain unencumbered liquidity of
$100 million.
   
    
    allow for a new starting point in measuring financial performance; and
    
    permit borrowings and/or the issuance of letters of credit and bank guarantees based on
a rate premium over prime rate ranging from 1.50% to 3.00% or London Interbank Offered Rate
(LIBOR) ranging from 2.00% to 3.50% based upon certain financial ratios.
     65




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##### Table of Contents



9. Commitments and Contingencies
 Commitments
  Titan 2 Titan 2
 REM Commander, REM Fortress
 Olympic Challenger,
  2009
    
    $
    43,0142010
    
    
    30,7652011
    
    
    25,1402012
    
    
    19,3832013
    
    
    11,720Thereafter
    
    
    14Total
    
    $
    130,036
 Construction and Purchases in Progress  Global 1200 Global 1201
 Guarantees 
 66




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##### Table of Contents



Letters of Credit 
 Contingencies
       67




---



##### Table of Contents



10. Shareholders Equity
 Accumulated Other Comprehensive Income
 Forward
    
    
    
    
    
    
    AccumulatedAccumulated
    
    
    Foreign
    
    
    Auction
    
    
    OtherTranslation
    
    
    Currency
    
    
    Rate
    
    
    ComprehensiveAdjustment
    
    
    Contracts
    
    
    Securities
    
    
    Income (Loss)Balance at January 1, 2007
    
    $
    (8,978
    )
    
    $
    894
    
    
    $
    
    
    
    $
    (8,084
    )Change in value
    
    
    
    
    
    
    4,249
    
    
    
    
    
    
    
    4,249Reclassification of loss to earnings
    
    
    
    
    
    
    (68
    )
    
    
    
    
    
    
    (68
    )Balance at December 31, 2007
    
    $
    (8,978
    )
    
    $
    5,075
    
    
    $
    
    
    
    $
    (3,903
    )Change in value
    
    
    
    
    
    
    (4,742
    )
    
    
    (3,085
    )
    
    
    (7,827
    )Reclassification to earnings
    
    
    
    
    
    
    (2,748
    )
    
    
    3,085
    
    
    
    337Balance at December 31, 2008
    
    $
    (8,978
    )
    
    $
    (2,415
    )
    
    $
    
    
    
    $
    (11,393
    )
  68




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##### Table of Contents



Comprehensive Income 
 Year Ended December 31,2008
    
    
    2007
    
    
    2006(in thousands)Net income
    
    $
    (117,361
    )
    
    $
    159,960
    
    
    $
    199,745Comprehensive (loss) income:Unrealized gain (loss) on
foreign currency hedges
before taxes
    
    
    (11,523
    )
    
    
    6,432
    
    
    
    1,375Provision for income taxes
    
    
    4,033
    
    
    
    (2,251
    )
    
    
    (481
    )Comprehensive income
    
    $
    (124,851
    )
    
    $
    164,141
    
    
    $
    200,639
 Preferred Stock 
 Treasury Stock 
 11. Stock-Based Compensation
 Stock-Based Compensation Expense
  Stock Benefit Plans
 2005 Stock Incentive Plan
 69




---



##### Table of Contents



Non-Employee Director Compensation Plan
  1998 Equity Incentive Plan
 70




---



##### Table of Contents



Stock Option Activities
  Weighted
    
    
    Remaining
    
    
    AggregateAverage
    
    
    Average
    
    
    IntrinsicExercise
    
    
    Contractual
    
    
    ValueShares
    
    
    Price
    
    
    Life(in years)
    
    
    (in thousands)Outstanding at January 1, 2006
    
    
    4,459,050
    
    
    $
    10.14
    
    
    
    4.7
    
    
    $
    5,410Granted
    
    
    1,086,300
    
    
    
    13.07Forfeited or expired
    
    
    (262,990
    )
    
    
    11.91Exercised
    
    
    (1,073,603
    )
    
    
    9.03Outstanding at December 31, 2006
    
    
    4,208,757
    
    
    $
    11.06
    
    
    
    5.0
    
    
    $
    11,072Granted
    
    
    471,775
    
    
    
    14.03Forfeited or expired
    
    
    (220,918
    )
    
    
    13.75Exercised
    
    
    (1,544,559
    )
    
    
    11.42Outstanding at December 31, 2007
    
    
    2,915,055
    
    
    $
    11.15
    
    
    
    5.4
    
    
    $
    30,046Granted
    
    
    258,400
    
    
    
    20.39Forfeited or expired
    
    
    (127,249
    )
    
    
    12.29Exercised
    
    
    (1,146,428
    )
    
    
    10.33Outstanding at December 31, 2008
    
    
    1,899,778
    
    
    $
    12.83
    
    
    
    6.0
    
    
    $
    Fully vested and expected to vest at
December 31, 2008
    
    
    1,764,653
    
    
    $
    12.61
    
    
    
    5.8
    
    
    $
    Exercisable at December 31, 2008
    
    
    1,359,278
    
    
    $
    11.70
    
    
    
    5.1
    
    
    $
    
   Year endedDecember 312008
    
    2007
    
    2006Expected life in years
    
    6 years
    
    6 years
    
    6 yearsRisk-free interest rate
    
    
    2.80-3.44
    %
    
    
    3.83-5.09
    %
    
    
    4.61-5.15
    %Volatility
    
    
    50.79-51.99
    %
    
    
    50.95-54.45
    %
    
    
    54.82-58.70
    %Forfeiture rate
    
    
    25.00
    %
    
    
    25.00
    %
    
    
    25.00
    %Expected dividends
    
    
    -0-
    
    
    
    -0-
    
    
    
    -0-
    71




---



##### Table of Contents



WeightedAverageGrant-DateNon-vested shares
    
    Shares
    
    
    Fair ValueOutstanding at January 1, 2006
    
    
    782,990
    
    
    $
    7.88Vested
    
    
    (442,220
    )
    
    
    8.63Forfeited
    
    
    (157,270
    )
    
    
    10.12Granted
    
    
    1,086,300
    
    
    
    13.07Outstanding at December 31, 2006
    
    
    1,269,800
    
    
    $
    11.78Vested
    
    
    (625,963
    )
    
    
    11.08Forfeited
    
    
    (155,686
    )
    
    
    12.44Granted
    
    
    471,775
    
    
    
    14.03Outstanding at December 31, 2007
    
    
    959,926
    
    
    $
    13.23Vested
    
    
    (606,888
    )
    
    
    13.98Forfeited
    
    
    (70,938
    )
    
    
    14.34Granted
    
    
    258,400
    
    
    
    20.39Outstanding at December 31, 2008
    
    
    540,500
    
    
    $
    15.67
  Stock Award Activities
 Restricted stock 
 Weighted
    
    
    RemainingAverage
    
    
    Average
    
    
    AggregateGrant-Date
    
    
    Contractual
    
    
    ValueShares
    
    
    Fair Value
    
    
    Life (in years)
    
    
    (in thousands)Outstanding at January 1, 2008
    
    
    889,550
    
    
    $
    14.56
    
    
    
    1.59
    
    
    $
    12,948Granted
    
    
    820,235
    
    
    
    10.15Forfeited or expired
    
    
    (156,628
    )
    
    
    15.88Vested and released to participants
    
    
    (378,307
    )
    
    
    14.71Outstanding at December 31, 2008
    
    
    1,174,850
    
    
    $
    11.25
    
    
    
    1.87
    
    
    $
    13,222
  72




---



##### Table of Contents



Performance Shares 
 WeightedAverage
    
    
    AggregateGrant-Date
    
    
    ValueShares
    
    
    Fair Value
    
    
    (in thousands)Outstanding at January 1, 2008
    
    
    805,548
    
    
    $
    5.85
    
    
    $
    4,716Forfeited or expired
    
    
    (87,640
    )
    
    
    5.61Vested and released to participants
    
    
    (717,908
    )
    
    
    5.88Outstanding at December 31, 2008
    
    
    
    
    
    $
    
    
    
    $
    
   Performance-based Units 
 WeightedAverage
    
    
    AggregateGrant-Date
    
    
    ValueUnits
    
    
    Fair Value
    
    
    (in thousands)Outstanding at January 1, 2008
    
    
    356,374
    
    
    $
    14.78
    
    
    $
    5,267Granted
    
    
    210,834
    
    
    
    14.05Forfeited or expired
    
    
    (48,036
    )
    
    
    14.78Outstanding at December 31, 2008
    
    
    519,172
    
    
    $
    14.49
    
    
    $
    7,520
   12. Employee Benefits
  73




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##### Table of Contents



13. Asset Disposal and Impairments
  Net Gains on Asset Disposal 
 Losses on Asset Impairments 
 Year Ended December 31,Segment
    
    Description of Asset

    
    2008
    
    
    2007
    
    
    2006(in thousands)North America OCD
    
    One DLB & Other

    
    $
    
    
    
    $
    
    
    
    $
    1,415North America Subsea
    
    One DSV (each in 2008 and 2006)
    
    
    995
    
    
    
    
    
    
    
    1,963Latin America
    
    Three DSVs

    
    
    
    
    
    
    
    
    
    
    1,434West Africa
    
    One DSV
    
    
    1,556
    
    
    
    
    
    
    
    Middle East
    
    One DLB & Two DSVs

    
    
    
    
    
    
    
    
    
    
    4,119Corporate
    
    Other

    
    
    
    
    
    
    141
    
    
    
    $
    2,551
    
    
    $
    141
    
    
    $
    8,931
 74




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##### Table of Contents



14. Other Income (Expense), net
  Year Ended December 31,2008
    
    
    2007
    
    
    2006(in thousands)Foreign exchange rate gain (loss)
    
    $
    (2,498
    )
    
    $
    (1,474
    )
    
    $
    (1,613
    )Derivative contract gain (loss)
    
    
    613
    
    
    
    1,606
    
    
    
    397Reversal of allowance for doubtful accounts
    
    
    
    
    
    
    787
    
    
    
    Settlement (1)
    
    
    
    
    
    
    1,395
    
    
    
    Penalties on past due taxes
    
    
    (134
    )
    
    
    (61
    )
    
    
    (795
    )Other
    
    
    1,378
    
    
    
    1,573
    
    
    
    2,716Total
    
    $
    (641
    )
    
    $
    3,826
    
    
    $
    705
 
 (1)
    
    Gain from settlement of a claim for interrupted operations as a result of a 2006 oil
spill by a refinery adjacent to our property in Louisiana. 15. Income Taxes
  Year Ended December 31,2008
    
    
    2007
    
    
    2006(in thousands)U.S. federal and state:Current
    
    $
    (10,015
    )
    
    $
    21,482
    
    
    $
    29,915Deferred
    
    
    (4,555
    )
    
    
    (11,255
    )
    
    
    6,882Foreign:Current
    
    
    23,882
    
    
    
    47,684
    
    
    
    44,098Deferred
    
    
    (1,552
    )
    
    
    (3,969
    )
    
    
    5,347Total
    
    $
    7,760
    
    
    $
    53,942
    
    
    $
    86,242
   Year Ended December 31,2008
    
    
    2007
    
    
    2006(in thousands)United States
    
    $
    (43,117
    )
    
    $
    39,016
    
    
    $
    96,989Foreign
    
    
    (66,484
    )
    
    
    174,886
    
    
    
    188,998Total
    
    $
    (109,601
    )
    
    $
    213,902
    
    
    $
    285,987
 75




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##### Table of Contents



Year Ended December 31,2008
    
    
    2007
    
    
    2006(in thousands)Taxes at U.S. federal statutory rate of 35%
    
    $
    (38,360
    )
    
    $
    74,866
    
    
    $
    100,095Foreign tax credit
    
    
    
    
    
    
    
    
    
    
    Permanent book to tax differences:Exchange and inflationary gains on foreign tax filings
    
    
    (919
    )
    
    
    137
    
    
    
    (157
    )Disallowed deductions
    
    
    271
    
    
    
    598
    
    
    
    1,186Interest income on affiliate balances
    
    
    1,194
    
    
    
    2,157
    
    
    
    2,197Other permanent differences
    
    
    543
    
    
    
    
    
    
    
    2,946Foreign income taxes at different rates
    
    
    44,506
    
    
    
    (21,272
    )
    
    
    (21,460
    )Foreign net operating loss carryforward valuation
allowance
    
    
    1,229
    
    
    
    11
    
    
    
    2,901Valuation allowance reversal
    
    
    (105
    )
    
    
    (336
    )
    
    
    Section 199 tax-exempt income and various items
    
    
    (599
    )
    
    
    (2,219
    )
    
    
    (1,466
    )Total
    
    $
    7,760
    
    
    $
    53,942
    
    
    $
    86,242
     76




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##### Table of Contents



December 31,2008
    
    
    2007(in thousands)Deferred Tax Liabilities:Excess book over tax basis of
property and equipment
    
    $
    42,268
    
    
    $
    42,929Deferred charges
    
    
    10,585
    
    
    
    3,607Accounts receivable
    
    
    512
    
    
    
    1,783Deferred Tax Assets, Current:Net operating loss carryforward
    
    
    (10,648
    )
    
    
    (11,341
    )Valuation allowance
    
    
    8,805
    
    
    
    10,594Accrued liabilities
    
    
    (8,734
    )
    
    
    (1,209
    )Allowance for doubtful accounts
    
    
    (316
    )
    
    
    (316
    )Stock-based compensation (not currently deductible)
    
    
    
    
    
    
    (2,303
    )Deferred Tax Assets, Non-Current:Stock-based compensation (not currently deductible)
    
    
    (6,053
    )
    
    
    (4,476
    )Foreign Tax Credit
    
    
    (16,175
    )
    
    
    (7,814
    )Net deferred tax liability
    
    $
    20,244
    
    
    $
    31,454
  Adoption
of FIN 48  Accounting for Uncertainty in Income Taxes  
 Balance at January 1, 2008
    
    $
    5,909Additions based on positions for current year
    
    
    Additions for tax positions for prior year
    
    
    Foreign Exchange
    
    
    (740
    )Settlements
    
    
    (1,170
    )Balance at December 31, 2008
    
    $
    3,999
   77




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##### Table of Contents




    
    United States       2000 to 2008
    
    Latin America      2003 to 2008
    
    West Africa         1999 to 2008
 16. Earnings Per Share
  Year Ended December 312008
    
    
    2007
    
    
    2006(in thousands, except per share data)Net Income (loss)
    
    $
    (117,361
    )
    
    $
    159,960
    
    
    $
    199,745Common shares dilutionWeighted-average shares outstanding  basic
    
    
    113,647
    
    
    
    116,137
    
    
    
    115,632Effect of dilutive securitiesStock options
    
    
    
    
    
    
    1,325
    
    
    
    1,239Performance shares and units
    
    
    
    
    
    
    357
    
    
    
    436Weighted-average shares outstanding  diluted
    
    
    113,647
    
    
    
    117,819
    
    
    
    117,307Earnings (loss) per common shareBasic
    
    $
    (1.03
    )
    
    $
    1.38
    
    
    $
    1.73Diluted
    
    $
    (1.03
    )
    
    $
    1.36
    
    
    $
    1.70
   78




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##### Table of Contents



17. Industry, Segment and Geographic Information
    
    
    transfer of inter-segment revenues from the Gulf of Mexico OCD to the Gulf of Mexico
Subsea;
    
    a geographical shift of India operations from the Middle East to Asia Pacific;
    
    transfer of a portion of subsea services from the Middle East to West Africa; and
    
    corporate interest income and expense no longer being allocated to the reportable
segments.
   79




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##### Table of Contents



Year Ended December 31,2008
    
    
    2007
    
    
    2006(in thousands)Total segment revenuesNorth America OCD
    
    $
    81,137
    
    
    $
    106,478
    
    
    $
    189,778North America Subsea
    
    
    146,105
    
    
    
    150,407
    
    
    
    152,169Latin America
    
    
    266,974
    
    
    
    226,999
    
    
    
    500,324West Africa
    
    
    152,877
    
    
    
    184,651
    
    
    
    191,363Middle East
    
    
    237,523
    
    
    
    186,317
    
    
    
    2,699Asia Pacific/India
    
    
    223,450
    
    
    
    181,187
    
    
    
    235,320Subtotal
    
    $
    1,108,066
    
    
    $
    1,036,039
    
    
    $
    1,271,653Intersegment eliminationsNorth America OCD
    
    $
    
    
    
    $
    (7,726
    )
    
    $
    (10,792
    )North America Subsea
    
    
    (30,713
    )
    
    
    (17,867
    )
    
    
    (24,794
    )Latin America
    
    
    (2,724
    )
    
    
    (322
    )
    
    
    (1,218
    )West Africa
    
    
    
    
    
    
    
    
    
    
    Middle East
    
    
    (3,641
    )
    
    
    (17,466
    )
    
    
    Asia Pacific/India
    
    
    
    
    
    
    (145
    )
    
    
    Subtotal
    
    $
    (37,078
    )
    
    $
    (43,526
    )
    
    $
    (36,804
    )Consolidated revenues
    
    $
    1,070,988
    
    
    $
    992,513
    
    
    $
    1,234,849Interest expenseNorth America OCD
    
    $
    
    
    
    $
    
    
    
    $
    North America Subsea
    
    
    
    
    
    
    
    
    
    
    Latin America
    
    
    2,411
    
    
    
    2,194
    
    
    
    1,378West Africa
    
    
    (2,292
    )
    
    
    811
    
    
    
    1,128Middle East
    
    
    84
    
    
    
    4
    
    
    
    85Asia Pacific/India
    
    
    128
    
    
    
    3
    
    
    
    631Corporate
    
    
    13,293
    
    
    
    10,427
    
    
    
    7,565Consolidated interest expense
    
    $
    13,624
    
    
    $
    13,439
    
    
    $
    10,787Depreciation and amortization expenseNorth America OCD
    
    $
    4,256
    
    
    $
    6,536
    
    
    $
    10,304North America Subsea
    
    
    8,517
    
    
    
    6,046
    
    
    
    3,606Latin America
    
    
    11,558
    
    
    
    6,174
    
    
    
    8,820West Africa
    
    
    12,087
    
    
    
    14,285
    
    
    
    8,058Middle East
    
    
    7,377
    
    
    
    5,814
    
    
    
    980Asia Pacific/India
    
    
    8,276
    
    
    
    7,380
    
    
    
    18,763Corporate
    
    
    12,277
    
    
    
    15,604
    
    
    
    15,832Consolidated depreciation and amortization
    
    $
    64,348
    
    
    $
    61,839
    
    
    $
    66,363
 80




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##### Table of Contents



Year Ended December 31,2008
    
    
    2007
    
    
    2006(in thousands)Income (loss) before taxesNorth America OCD
    
    $
    (17,748
    )
    
    $
    12,631
    
    
    $
    48,494North America Subsea
    
    
    7,377
    
    
    
    59,849
    
    
    
    59,415Latin America
    
    
    (17,938
    )
    
    
    97,604
    
    
    
    131,993West Africa
    
    
    (42,035
    )
    
    
    (14,952
    )
    
    
    25,605Middle East
    
    
    (81,633
    )
    
    
    29,568
    
    
    
    (4,125
    )Asia Pacific/India
    
    
    40,923
    
    
    
    11,473
    
    
    
    13,405Corporate (litigation provision)
    
    
    
    
    
    
    
    
    
    
    13,699Corporate
    
    
    1,453
    
    
    
    17,729
    
    
    
    (2,499
    )Consolidated income before taxes
    
    $
    (109,601
    )
    
    $
    213,902
    
    
    $
    285,987Segment assets at period endNorth America OCD
    
    $
    39,184
    
    
    $
    110,175
    
    
    $
    128,018North America Subsea
    
    
    191,596
    
    
    
    68,269
    
    
    
    84,499Latin America
    
    
    254,007
    
    
    
    261,183
    
    
    
    249,406West Africa
    
    
    214,707
    
    
    
    315,648
    
    
    
    188,028Middle East
    
    
    117,726
    
    
    
    149,844
    
    
    
    6,517Asia Pacific/India
    
    
    173,613
    
    
    
    122,274
    
    
    
    131,602Other
    
    
    494,761
    
    
    
    562,405
    
    
    
    282,927Consolidated segment assets at period end
    
    $
    1,485,594
    
    
    $
    1,589,798
    
    
    $
    1,070,997Expenditures for long-lived assetsNorth America OCD
    
    $
    299
    
    
    $
    1,761
    
    
    $
    1,875North America Subsea (1)
    
    
    114,367
    
    
    
    514
    
    
    
    13,766Latin America
    
    
    9,714
    
    
    
    5,910
    
    
    
    539West Africa
    
    
    8,425
    
    
    
    1,873
    
    
    
    1,457Middle East
    
    
    3,682
    
    
    
    11,960
    
    
    
    1,112Asia Pacific/India
    
    
    9,270
    
    
    
    833
    
    
    
    11,840Other (2)
    
    
    122,172
    
    
    
    38,941
    
    
    
    11,861Consolidated expenditures for long-lived assets
    
    $
    267,929
    
    
    $
    61,792
    
    
    $
    42,450
 
 (1)
    
    2008 includes purchase of a DP-2 class vessel, the Global Orion.(2)
    
    includes expenditures on construction of two new generation derrick/pipelay vessels,
designated as the Global 1200 and Global 1201 .
 81




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##### Table of Contents



Year Ended December 31,2008
    
    
    2007
    
    
    2006(in thousands)Revenues from external customersSaudi Arabia
    
    $
    209,734
    
    
    $
    132,493
    
    
    $
    United States
    
    
    196,530
    
    
    
    231,292
    
    
    
    303,090India
    
    
    162,650
    
    
    
    145,542
    
    
    
    143,485Brazil
    
    
    155,819
    
    
    
    
    
    
    
    Mexico
    
    
    108,276
    
    
    
    226,677
    
    
    
    500,669Other
    
    
    237,979
    
    
    
    256,509
    
    
    
    287,605$
    1,070,988
    
    
    $
    992,513
    
    
    $
    1,234,849Long lived assets at period endUnited States
    
    $
    375,370
    
    
    $
    137,442
    
    
    $
    108,241Foreign areas
    
    
    218,152
    
    
    
    212,107
    
    
    
    208,635$
    593,522
    
    
    $
    349,549
    
    
    $
    316,876
  18. Major Customers
  Year Ended December 31,2008
    
    2007
    
    2006(in thousands)Amount
    
    %
    
    Amount
    
    %
    
    Amount
    
    %Customer A
    
    $
    157,443
    
    
    
    15
    %
    
    $
    137,931
    
    
    
    14
    %
    
    $
    235,284
    
    
    
    19
    %Customer B
    
    
    153,279
    
    
    
    14
    %
    
    
    2,035
    
    
    
    
    
    
    
    
    
    
    
    Customer C
    
    
    151,774
    
    
    
    14
    %
    
    
    41,117
    
    
    
    4
    %
    
    
    
    
    
    
    Customer D
    
    
    103,961
    
    
    
    10
    %
    
    
    39,408
    
    
    
    4
    %
    
    
    133,209
    
    
    
    11
    %Customer E
    
    
    103,907
    
    
    
    10
    %
    
    
    223,803
    
    
    
    23
    %
    
    
    499,105
    
    
    
    40
    %
  19. Supplemental Disclosures of Cash Flow Information
  82




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Year Ended December 31,2008
    
    2007
    
    2006(in thousands)Cash paid for:Interest, net of amount capitalized
    
    $
    11,743
    
    
    $
    5,634
    
    
    $
    12,772Income taxes
    
    
    31,068
    
    
    
    66,540
    
    
    
    55,437Property and equipment additions
included in accounts payable
    
    
    25,170
    
    
    
    8,801
    
    
    
    1,031
 Other Non-Cash Transactions
  20. Related Party Transactions
  21. Interim Financial Information (Unaudited)
  First
    
    
    Second
    
    
    Third
    
    
    Fourth
    
    
    TotalQuarter
    
    
    Quarter
    
    
    Quarter
    
    
    Quarter
    
    
    Year(in thousands, except per share amounts)2008Revenues
    
    $
    301,465
    
    
    $
    300,543
    
    
    $
    218,551
    
    
    $
    250,429
    
    
    $
    1,070,988Gross profit (loss)
    
    
    54,330
    
    
    
    7,836
    
    
    
    (88,858
    )
    
    
    13,099
    
    
    
    (13,593
    )Net income (loss)
    
    
    26,830
    
    
    
    (13,480
    )
    
    
    (102,787
    )
    
    
    (27,924
    )
    
    
    (117,361
    )Net income(loss) per shareBasic
    
    $
    0.23
    
    
    $
    (0.12
    )
    
    $
    (0.90
    )
    
    $
    (0.25
    )
    
    $
    (1.03
    )Diluted
    
    $
    0.23
    
    
    $
    (0.12
    )
    
    $
    (0.90
    )
    
    $
    (0.25
    )
    
    $
    (1.03
    )2007Revenues
    
    $
    277,009
    
    
    $
    248,940
    
    
    $
    203,536
    
    
    $
    263,028
    
    
    $
    992,513Gross profit
    
    
    93,474
    
    
    
    74,133
    
    
    
    56,822
    
    
    
    48,316
    (1)
    
    
    272,745Net income
    
    
    54,456
    
    
    
    41,129
    
    
    
    31,475
    
    
    
    32,900
    (1)
    
    
    159,960Net income per shareBasic
    
    $
    0.47
    
    
    $
    0.35
    
    
    $
    0.27
    
    
    $
    0.29
    
    
    $
    1.38Diluted
    
    $
    0.46
    
    
    $
    0.35
    
    
    $
    0.27
    
    
    $
    0.28
    
    
    $
    1.36
 
 (1)
    
    Includes the effect of a $2.5 million Algerian business and income tax
settlement.
 83




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##### Table of Contents



ITEM 9.
    
    CHANGES IN AND DISAGREEMENTS WITH ACCOUNTANTS ON ACCOUNTING AND FINANCIAL DISCLOSURE
  
 ITEM 9A. CONTROLS AND PROCEDURES
 Evaluation of Disclosure Controls and Procedures
  Changes in Internal Control Over Financial Reporting
  
 Managements Report on Internal Control Over Financial Reporting
  Internal Control  Integrated Framework
 84




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##### Table of Contents



Internal Control  Integrated Framework
  /s/ John A. Clerico
    
    /s/ Jeffrey B. LevosJohn A. Clerico
    
    Jeffrey B. LevosChief Executive Officer
    
    Chief Financial OfficerCarlyss, LouisianaFebruary 27, 2009
 85




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##### Table of Contents



PART III
 
 ITEM 10.
    
    DIRECTORS, EXECUTIVE OFFICERS, AND CORPORATE GOVERNANCE OF THE REGISTRANT
  
 ITEM 11.
    
    EXECUTIVE COMPENSATION
  
 ITEM 12.
    
    SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND MANAGEMENT AND RELATED STOCKHOLDER MATTERS
  
 ITEM 13.
    
    CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS AND DIRECTOR INDEPENDENCE
  
 ITEM 14.
    
    PRINCIPAL ACCOUNTANT FEES AND SERVICES
  86




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##### Table of Contents



PART IV
 
 ITEM 15.
    
    EXHIBITS AND FINANCIAL STATEMENT SCHEDULES
 (a)
    
    
    1
    
    
    
    
    Financial Statements.Included in Part II of this report.Independent Auditors Report.Consolidated Balance Sheets as of December 31, 2008 and 2007.Consolidated Statements of Operations for the years ended December 31, 2008, 2007, and 2006.Consolidated Statements of Shareholders Equity for the years ended December 31, 2008, 2007, and 2006.Consolidated Statements of Cash Flows for the years ended December 31, 2008, 2007, and 2006.Notes to Consolidated Financial Statements.2
    
    
    
    
    Financial Statement Schedules.The following financial statement schedule is included:Schedule II  Valuation and Qualifying Accounts.All other financial statement schedules are omitted because the information is not required or because the information required is in the financial
statements or notes thereto.3
    
    
    
    
    Exhibits.Pursuant to Item 601(B)(4)(iii), the Registrant agrees to furnish to the Commission, upon request, a copy of any instrument with respect to long-term debt
not exceeding 10% of the total assets of the Registrant and its consolidated subsidiaries.The following exhibits are filed as part of this Annual Report:3.1
    
    
    
    
    Amended and Restated Articles of Incorporation of Registrant as amended, incorporated by reference to Exhibits 3.1 and 3.3 to the Form S-1 Registration Statement filed by the Registrant (Reg. No 33-56600).*3.2
    
    
    
    
    Bylaws of Registrant, as amended through October 31, 2007.4.1
    
    
    
    
    Form of Common Stock certificate, incorporated by reference to Exhibit 4.1 to the Form S-1 filed by Registrant (Reg. No. 33-56600).10.3
    
    
    
    
    Agreement of Lease dated May 1, 1992, between SFIC Gulf Coast Properties, Inc. and Global Pipelines PLUS, Inc., incorporated by reference to Exhibit 10.6 to
the Form S-1 filed by Registrant (Reg. No. 33-56600).10.4
    
    
    
    
    Lease Extension and Amendment Agreement dated January 1, 1996, between Global Industries, Ltd. and William J. Doré relating to the Lafayette office and
adjacent land, incorporated by reference to Exhibit 10.7 to the Registrants Annual Report on Form 10-K for the fiscal year ended March 31, 1996.10.5
    
    
    
    
    Agreement between Global Divers and Contractors, Inc. and Colorado School of Mines, dated October 15, 1991, incorporated by reference to Exhibit 10.20 to
the Form S-1 filed by Registrant (Reg. No. 33-56600).10.6
    
    
    
    
    Sublicense Agreement between Santa Fe International Corporation and Global Pipelines PLUS, Inc. dated May 24, 1990, relating to the Chickasaws reel
pipelaying technology, incorporated by reference to Exhibit 10.21 to the Form S-1 filed by Registrant (Reg. No. 33-56600).10.7
    
    
    
    
    Non-Competition Agreement and Registration Rights Agreement between the Registrant and William J. Doré, incorporated by reference to Exhibit 10.23 to the
Form S-1 filed by Registrant (Reg. No. 33-56600).10.10
    
    
    
    
    Trust Indenture relating to United States Government Guaranteed Ship Financing Obligations between Global Industries, Ltd., ship owner, and Hibernia
National Bank, Indenture Trustee, dated as of September 27, 1994, incorporated by reference to Exhibit 10.22 to the Registrants Annual Report on Form 10-K
for the fiscal year ended March 31, 1995.10.12
    
    
    
    
    Trust Indenture relating to United States Government Guaranteed Ship Financing Obligations between Global Industries, Ltd., ship owner, and First National
Bank of Commerce, Indenture Trustee, dated as of August 15, 1996, incorporated by reference to Exhibit 10.21 to the Registrants Annual Report on Form 10-K
for the fiscal year ended March 31, 1997 (SEC File No. 000-21086).
 87




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##### Table of Contents



10.13
    
    
    
    
    Form of Indemnification Agreement between the Registrant and each of the Registrants directors, incorporated by reference to Exhibit 10.22 to the
Registrants Annual Report on Form 10-K for the fiscal year ended March 31, 1997 (SEC File No. 000-21086).10.14
    
    
    
    
    Amendment Assignment and Assumption of Authorization Agreement relating to United States Government Ship Financing obligations between Global Industries,
Ltd., ship owner, and First National Bank of Commerce, Indenture Trustee, dated as of October 23, 1996, incorporated by reference to Exhibit 10.27 to the
Registrants Annual Report on Form 10-K for the fiscal year ended March 31, 1997 (SEC File No. 000-21086).10.15
    
    
    
    
    Global Industries, Ltd. 1998 Equity Incentive Plan incorporated by reference to exhibit 10.28 to the Registrants Annual Report on Form 10-K for the fiscal
year ended March 31, 1998 (SEC File No. 000-21086).10.16
    
    
    
    
    Facilities Agreement (related to Carlyss Facility) by and between the Registrant and Lake Charles Harbor and Terminal District dated as of November 1, 1997,
incorporated by reference to Exhibit 10.2 to Registrants Quarterly Report on Form 10-Q for the quarter ended December 31, 1997 (SEC File No. 000-21086).10.17
    
    
    
    
    Ground Lease and Lease-Back Agreement (related to Carlyss Facility) by and between the Registrant and Lake Charles Harbor and Terminal District dated as of
November 1, 1997, incorporated by reference to Exhibit 10.3 to Registrants Quarterly Report on Form 10-Q for the quarter ended December 31, 1997 (SEC File
No. 000-21086).10.18
    
    
    
    
    Pledge and Security Agreement (related to Carlyss Facility) by and between Registrant and Bank One, Louisiana, National Association, dated as of November 1,
1997, incorporated by reference to Exhibit 10.5 to Registrants Quarterly Report on Form 10-Q for the quarter ended December 31, 1997 (SEC File No.
000-21086).*10.19
    

    
    
    
    Global Industries, Ltd. Non-Employee Directors Compensation Plan, as amended.10.20
    
    
    
    
    Trust Indenture relating to United States Government Guaranteed Ship Financing Obligations between Global Industries, Ltd., ship owner, and Wells Fargo
Bank, Indenture Trustee, dated as of February 22, 2000, incorporated by reference to Exhibit 10.33 to Registrants Annual Report on Form 10-K for the year
ended December 31, 1999.10.21
    

    
    
    
    2000 Amendment to Global Industries, Ltd. 1998 Equity Incentive Plan, incorporated by reference to Exhibit 10.1 to Registrants Quarterly Report for the
quarter ended March 31, 2001.10.24
    
    
    
    
    Form of Executive Long-Term Restricted Stock Agreement (Performance Vesting/POC-TSR Based), incorporated by reference to Exhibit 10.1 to Form 8-K filed
September 30, 2004.10.25
    
    
    
    
    Global Industries, Ltd. 2005 Management Incentive Plan. incorporated by reference to Exhibit 10.40 to registrants Annual Report on Form 10-K for the year
ended December 31, 2004.10.26
    
    
    
    
    Global Industries, Ltd. 2005 Stock Incentive Plan, incorporated by reference to Exhibit 10.42 to registrants Annual Report on Form 10-K for the year ended
December 31, 2004.10.27
    
    
    
    
    Global Industries, Ltd. 2005 Restricted Stock Agreement Form, incorporated by reference to Exhibit 10.1 of registrants Form 8-K filed November 7, 2005.10.28
    
    
    
    
    Letter Agreement between the Company and Peter S. Atkinson dated November 16, 2005, incorporated by reference to Exhibit 10.1 of registrants Form 8-K filed
November 22, 2005.10.31
    
    
    
    
    Form of Executive Long-term Incentive Performance Unit Agreement. incorporated by reference to Exhibit 10.1 of registrants Form 8-K filed February 22, 2006.10.32
    
    
    
    
    Form of Non-Employee Director Restricted Stock Agreement dated May 16, 2006, incorporated by reference to Exhibit 10.1 of registrants Form 8-K filed May
22, 2006.
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10.33
    
    
    
    
    Trading Plan dated June 5, 2006 between Mr. William J. Doré and Raymond James Financial authorizing the sale of up to a maximum six million of his common
shares of Global Industries, Ltd., incorporated by reference to Exhibit 99.1 of registrants Form 8-K filed June 6, 2006.10.34
    
    
    
    
    Third Amended and Restated Credit Agreement dated June 30, 2006 among Global Industries, Ltd. Global Offshore Mexico, S. de R.L. de C.V., Global Industries
International, L.P., the Lenders and Calyon New York Branch, as administrative agent for the Lenders. incorporated by reference to Exhibit 10.1 of
registrants Form 8-K filed July 7, 2006.10.35
    
    
    
    
    A Settlement Agreement where GLOBAL, VINCI, and ACERGY agree to release, waive, and extinguish any rights, claims or causes of action they have or may have
against each other, and agree to dismiss the pending legal proceedings referenced in the Settlement Agreement. incorporated by reference to Exhibit 10.1 of
registrants Quarterly Report on Form 10-Q for the quarter ended June 30, 2006.10.36
    
    
    
    
    Employment Agreement between Global Industries, Ltd. and B. K. Chin effective as of September 18, 2006. incorporated by reference to Exhibit 10.1 of
registrants Form 8-K filed September 22, 2006.10.37
    

    
    
    
    Retirement Agreement between Global Industries, Ltd. and Mr. William J. Doré effective as of September 18, 2006. incorporated by reference to Exhibit 10.2
of registrants Quarterly Report on Form 8-K filed September 22, 2006.10.38
    
    
    
    
    Indenture of Global Industries, Ltd. and Wells Fargo Bank, National Association, as Trustee, dated July 27, 2007. incorporated by reference to Exhibit 4.1
of registrants Form 10-Q for the quarter ended June 30, 2007.10.39
    
    
    
    
    Registration Rights Agreement, by and between Global Industries, Ltd., as Issuer, and Lehman Brothers Inc., as Representative of the Several Initial
Purchasers, dated as of July 27, 2007. incorporated by reference to Exhibit 4.2 of registrants Form 10-Q filed August 6, 2007.10.40
    
    
    
    
    Purchase Agreement, between Global Industries, Ltd. and Lehman Brothers Inc., Calyon Securities (USA) Inc., Fortis Securities LLC and Natexis Bleichroeder
Inc., dated July 23, 2007. incorporated by reference to Exhibit 10.1 of registrants Form 10-Q filed August 6, 2007.10.41
    
    
    
    
    Amendment No. 2 to Third Amended and Restated Credit Agreement, dated July 27, 2007, by and among Global Industries, Ltd., Global Offshore Mexico, S. de
R.L. de C.V., and Global Industries International L.L.C. in its capacity as general partner of Global Industries International, L.P., the Lenders party to
the Credit Agreement, and Calyon New York Branch, as administrative agent for the Lenders. incorporated by reference to Exhibit 10.2 of registrants Form
10-Q filed August 6, 2007.10.42
    
    
    
    
    Amendment No. 3 to Third Amended and Restated Credit Agreement dated October 18, 2007 among Global Industries, Ltd., Global Offshore Mexico, S. DE R.L. DE
C.V., Global International, L.L.C., in its capacity as general partner of Global Industries International, L.P., the Lenders and Calyon New York Branch as
administrative agent for the Lenders. (incorporated by reference to Exhibit 10.1 of registrants Form 8-K filed October 24, 2007.10.44
    
    
    
    
    Amendment No. 4 and Waiver to the Third Amended and Restated Credit Agreement dated November 7, 2008 among Global Industries, Ltd., Global Offshore Mexico,
S. de R.L. de C.V., Global Industries International, L.L.C., in its capacity as general partner of Global Industries International, L.P., the Lenders and
Calyon New York Branch, as administrative agent for the Lenders incorporated by reference to Exhibit 10.2 of registrants Quarterly Report onForm 10-Q for
the quarter ended September 30, 2008.10.45
    

    
    
    
    Form of Change-In-Control Agreement Form of Change-In-Control Agreement (with tax gross-up), incorporated by reference to Exhibit 10.3 of registrants
Quarterly Report on Form 10-Q for the quarter ended September 30, 2001.10.46
    
    
    
    
    Form of Change-In-Control Agreement (without tax gross-up), incorporated by reference to Exhibit 10.4 of registrants Quarterly Report on Form 10-Q for the
quarter ended September 30, 2008.
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##### Table of Contents



10.47
    

    
    
    
    Resignation and Release Agreement between Global Industries, Ltd. and Mr. B.K. Chin effective as of October 16, 2008, incorporated by reference to Exhibit
10.1 of registrants Form 8-K filed October 22, 2008.10.48
    

    
    
    
    Amended Retirement Agreement between Global Industries, Ltd. and Mr. William J. Doré effective as of December 5, 2008, incorporated by reference to Exhibit
10.1 of registrants Form 8-K filed December 8, 2008.*10.49
    

    
    
    
    Amendment No. 5 to the Third Amended and Restated Credit Agreement dated February 25, 2009 among Global Industries, Ltd. Global Offshore Mexico, S. de R.L.
de C.V., Global Industries International, L.L.C., in its capacity as general partner of Global Industries International, L.P., the Lenders and Calyon New
York Branch, as administrative agent for the Lenders
 *21.1
    
    
    
    Subsidiaries of the Registrant.*23.1
    
    
    
    Consent of Deloitte & Touche LLP.*31.1
    
    
    
    Section 302 Certification of John A. Clerico.*31.2
    
    
    
    Section 302 Certification of Jeffrey B. Levos.**32.1
    
    
    
    Section 906 Certification of John A. Clerico.**32.2
    
    
    
    Section 906 Certification of Jeffrey B. Levos.
 
 *
    
    Included with this filing.
    
    Indicates management contract or compensatory plan or arrangement filed
pursuant to Item 601 (b)(10)(iii) of Regulation S-K.**
    
    Furnished herewith 90




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##### Table of Contents



Global Industries, Ltd.
Schedule II Valuation and Qualifying Accounts
For the Years Ended December 31, 2008, 2007, and 2006
 AdditionsBalance at
    
    Charged to
    
    Charged
    
    
    
    
    
    Balance atBeginning of
    
    Costs and
    
    to Other
    
    
    
    
    
    End ofDescription
    
    Period
    
    Expenses
    
    Accounts
    
    Deductions
    
    Period(in thousands)Year ended December 31, 2008
Allowances for doubtful accounts
    
    $
    1,278
    
    
    $
    11,512
    
    
    $
    
    
    
    $
    720
    
    
    $
    12,070Year ended December 31, 2007
Allowances for doubtful accounts
    
    $
    17,203
    
    
    $
    11,819
    
    
    $
    
    
    
    $
    27,744
    
    
    $
    1,278Year ended December 31, 2006
Allowances for doubtful accounts
    
    $
    7,757
    
    
    $
    38,323
    
    
    $
    
    
    
    $
    28,877
    
    
    $
    17,203
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##### Table of Contents



SIGNATURES
  GLOBAL INDUSTRIES, LTD.By:
    /s/JEFFREY B. LEVOSJeffrey B. LevosChief Financial
Officer(Principal Financial Officer)February 27, 2009  /s/ JOHN A. CLERICO

John A. Clerico
    
    Interim Chairman of the Board and
Chief Executive Officer
    
    February 27, 2009/s/ JEFFREY B. LEVOS

Jeffrey B. Levos
    
    Chief Financial Officer
(Principal Financial Officer)
    
    February 27, 2009/s/ TRUDY P. MCCONNAUGHHAY

Trudy P. McConnaughhay
    
    Controller
(Principal Accounting Officer)
    
    February 27, 2009/s/ LAWRENCE R. DICKERSON

Lawrence R. Dickerson
    
    Director
    
    February 27, 2009/s/ EDWARD P. DJEREJIAN

Edward P. Djerejian
    
    Director
    
    February 27, 2009/s/ WILLIAM J. DORE

William J. Doré
    
    Director
    
    February 27, 2009/s/ LARRY E. FARMER

Larry E. Farmer
    
    Director
    
    February 27, 2009/s/ EDGAR G. HOTARD

Edgar G. Hotard
    
    Director
    
    February 27, 2009/s/ RICHARD A. PATTAROZZI

Richard A. Pattarozzi
    
    Director
    
    February 27, 2009/s/ JAMES L. PAYNE

James L. Payne
    
    Director
    
    February 27, 2009/s/ MICHAEL J. POLLOCK

Michael J. Pollock
    
    Director
    
    February 27, 2009/s/ CINDY B. TAYLOR

Cindy B. Taylor
    
    Director
    
    February 27, 2009
 92