# Letter to Shareholders

_Source: `DeepSeekOCR_Ardian_pruned_1k/energy-oil-gas-equipment-services/NYSE_HLX_2019/NYSE_HLX_2019.mmd` · pages 3-9_

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Letter to Shareholders

OWEN KRATZ, PRESIDENT AND CHIEF EXECUTIVE OFFICER

## Dear Shareholders,

2019 marked a strong year for us at Helix, in a number and variety of ways. Highlights included our acquisition in January of four wells at the Droshky field in the Gulf of Mexico, being named by Petrobras as its Best Supplier of the Year for Operations of Maritime Rigs in April, and taking delivery of the Q7000 in November and transiting for her first campaign in West Africa beginning at the start of this year.

We are proud of these achievements for many reasons, not only for their significance for our Company but also as indicative of the many ways in which we can and do succeed: shoring up backlog through creative contracting and diversifying revenue streams, delivering results and demonstrating value to a well-respected multinational client base, executing a large-scale capital project, and bringing a new asset to market and back into a region in which we seek to broaden our service base. Just as importantly, our teams continue to deliver improved results on a daily basis, with a focus on quality and execution, earning our position as the preeminent supplier of well intervention services to the offshore deepwater oil and gas industry.

The delivery of our newbuild semi-submersible vessel the Q7000 marked the completion of our last legacy project in our capital expansion program. Designed with the specifications to work worldwide and the ability to transit efficiently between regions, we look for the Q7000 to truly be a multi-region vessel. With two intervention vessels currently established in each of the Gulf of Mexico, the North Sea and Brazil, we are excited for the opportunities and the flexibility the Q7000 can offer clients around the globe.

Having completed our capital expansion, we re-focused on the operations and services of our expanded asset base, and we continue to evolve our business model in an effort to improve our results without relying on market recoveries. In addition to our geographic expansion efforts, working with our customers to develop creative contracts evidences the opportunities for us to enhance margins even in the absence of higher rates. Transactions like our Droshky acquisition support our base business model and provide a platform to expand our offerings.

Our financial results in 2019 also reflected our operating success, marking the third consecutive year of sequential growth in Revenue and EBITDA. We delivered \(180 million in Adjusted EBITDA, representing an 11% increase from last year and a cumulative 100% increase from 2016. From a finance management perspective, even with the substantial completion cost for the Q7000 we continued reducing our leverage and reduced our overall debt in 2019 by \)43 million. We pride ourselves in being financially prudent. Managing our debt, preserving liquidity and maintaining a strong balance sheet continue to headline our top priorities.

Perhaps most importantly, we recognize our need to be good corporate citizens. At Helix, sustainability is not only a core component of our everyday life, but we know it's a principal driver toward the creation of long-term value for you, our shareholders. We continue to implement and improve our Environmental, Social and Governance ("ESG") initiatives and disclosures throughout our business, taking a top-down approach in applying ESG principles from our Board of Directors and senior management and ensuring our operations throughout the world embody our values of Safety, Sustainability and Value Creation. To that end, we are continually striving to improve our safety record, reduce our environmental impact and increase transparency.

Our fundamental businesses validate our position as a sustainable company, in that our plug and abandonment services help protect the environment, production

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enhancement promotes sustainability by providing producers with an alternative to drilling, and our Helix Fast Response System in the Gulf of Mexico serves as an environmental safeguard in the event of a containment event. Further, as the number of wind farm trenching projects rises globally, we are positioned to offer sustainable energy alternatives to customers, connecting wind farms to local communities, and in 2019 we continued to expand our business with renewable energy customers. We are firmly committed to our ESG initiatives and believe our business model and results demonstrate that commitment.

In addition to our financial position, strong operational performance and commitment to sustainability, we saw a variety of positive indicators during 2019, including a customer base that was showing signs of increased spending, core customers returning with a focus on offshore production and a decrease in rig overhang, and continued steady increases in commodity prices. Last year wasn't without its challenges, but I believe the way we met those challenges and delivered results in 2019 was a testament to how adaptable we can be as a Company, and how we're positioned to overcome whatever may come our way. So far, the first quarter of 2020 has brought a global health pandemic, a precipitous drop in oil prices and overall market upheaval. As we sit here today, the full impact of our current environment remains to be seen, on the world as a whole let alone on our industry or Helix in particular.

We remain in a challenging, cyclical market. Upholding our long-standing motto, we have been "navigating the present" for a few years now, placing ourselves in a good position to "focus on the future" and be opportunistic as we deliver value to our stakeholders. With recent events, the certainty of that future may seem slightly further away than before. To be certain however, we've never relied on any market recovery for our success, but rather on our own expertise, creativity and adaptability. Through the implementation of our core business values and priorities – Safety, Sustainability and Value Creation – we will remain focused on the operational performance and financial discipline that makes us great. And we'll work hard as always in maintaining that focus for you, our shareholders, regardless of the market environment.

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Owen Kratz
President and Chief Executive Officer
Helix Energy Solutions Group, Inc.

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