10-Q 1 hlx-20230930x10q.htm 10-Q
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UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

WASHINGTON, D.C. 20549

Form 10-Q

    QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934

For the quarterly period ended September 30, 2023

or

    TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934

For the transition period from__________ to__________

Commission File Number: 001-32936

Graphic

HELIX ENERGY SOLUTIONS GROUP, INC.

(Exact name of registrant as specified in its charter)

Minnesota

   

95-3409686

(State or other jurisdiction of incorporation or organization)

(I.R.S. Employer Identification No.)

3505 West Sam Houston Parkway North

Suite 400

Houston Texas

77043

(Address of principal executive offices)

(Zip Code)

(281) 618–0400

(Registrant’s telephone number, including area code)

NOT APPLICABLE

(Former name, former address and former fiscal year, if changed since last report)

Securities registered pursuant to Section 12(b) of the Act:

Title of each class

   

Trading Symbol(s)

   

Name of each exchange on which registered

Common Stock, no par value

HLX

New York Stock Exchange

Indicate by check mark whether the registrant (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days.   Yes  No

Indicate by check mark whether the registrant has submitted electronically every Interactive Data File required to be submitted pursuant to Rule 405 of Regulation S-T (§232.405 of this chapter) during the preceding 12 months (or for such shorter period that the registrant was required to submit such files).   Yes  No

Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, a smaller reporting company, or an emerging growth company. See the definitions of “large accelerated filer,” “accelerated filer,” “smaller reporting company,” and “emerging growth company” in Rule 12b-2 of the Exchange Act.

Large accelerated filer 

Accelerated filer 

Non-accelerated filer 

Smaller reporting company 

Emerging growth company 

If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act.  

Indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Exchange Act).   Yes  No

As of October 20, 2023, 150,711,229 shares of common stock were outstanding.

TABLE OF CONTENTS

PART I.

FINANCIAL INFORMATION

PAGE

Item 1.

Financial Statements:

3

Condensed Consolidated Balance Sheets – September 30, 2023 (Unaudited) and December 31, 2022

3

Condensed Consolidated Statements of Operations (Unaudited) – Three and nine months ended September 30, 2023 and 2022

4

Condensed Consolidated Statements of Comprehensive Income (Loss) (Unaudited) – Three and nine months ended September 30, 2023 and 2022

4

Condensed Consolidated Statements of Shareholders’ Equity (Unaudited) – Three and nine months ended September 30, 2023 and 2022

5

Condensed Consolidated Statements of Cash Flows (Unaudited) – Nine months ended September 30, 2023 and 2022

6

Notes to Condensed Consolidated Financial Statements (Unaudited)

7

Item 2.

Management’s Discussion and Analysis of Financial Condition and Results of Operations

24

Item 3.

Quantitative and Qualitative Disclosures About Market Risk

39

Item 4.

Controls and Procedures

39

PART II.

OTHER INFORMATION

40

Item 1.

Legal Proceedings

40

Item 1A.

Risk Factors

40

Item 2.

Unregistered Sales of Equity Securities and Use of Proceeds

40

Item 3.

Defaults Upon Senior Securities

40

Item 4.

Mine Safety Disclosures

40

Item 5.

Other Information

40

Item 6.

Exhibits

41

Signatures

42

2

PART I. FINANCIAL INFORMATION

Item 1. Financial Statements

HELIX ENERGY SOLUTIONS GROUP, INC. AND SUBSIDIARIES

CONDENSED CONSOLIDATED BALANCE SHEETS

(in thousands)

September 30, 

December 31, 

    

2023

    

2022

(Unaudited)

ASSETS

 

  

 

  

Current assets:

 

  

 

  

Cash and cash equivalents

$

168,370

$

186,604

Restricted cash

 

 

2,507

Accounts receivable, net of allowance for credit losses of $3,297 and $2,277, respectively

 

308,023

 

212,779

Other current assets

 

78,584

 

58,699

Total current assets

 

554,977

 

460,589

Property and equipment

 

3,049,952

 

3,016,312

Less accumulated depreciation

 

(1,475,042)

 

(1,374,697)

Property and equipment, net

 

1,574,910

 

1,641,615

Operating lease right-of-use assets

 

181,610

 

197,849

Deferred recertification and dry dock costs, net

75,778

38,778

Other assets, net

 

47,477

 

50,507

Total assets

$

2,434,752

$

2,389,338

LIABILITIES AND SHAREHOLDERS' EQUITY

 

  

 

  

Current liabilities:

 

  

 

  

Accounts payable

$

142,217

$

135,267

Accrued liabilities

 

178,118

 

73,574

Current maturities of long-term debt

 

8,749

 

38,200

Current operating lease liabilities

 

61,191

 

50,914

Total current liabilities

 

390,275

 

297,955

Long-term debt

 

218,508

 

225,875

Operating lease liabilities

 

129,455

 

154,686

Deferred tax liabilities

 

105,823

 

98,883

Other non-current liabilities

 

60,173

 

95,230

Total liabilities

 

904,234

 

872,629

Commitments and contingencies

Shareholders’ equity:

 

  

 

  

Common stock, no par, 240,000 shares authorized, 150,706 and 151,935 shares issued, respectively

 

1,290,940

 

1,298,740

Retained earnings

 

340,783

 

323,288

Accumulated other comprehensive loss

 

(101,205)

 

(105,319)

Total shareholders’ equity

 

1,530,518

 

1,516,709

Total liabilities and shareholders’ equity

$

2,434,752

$

2,389,338

The accompanying notes are an integral part of these condensed consolidated financial statements.

3

HELIX ENERGY SOLUTIONS GROUP, INC. AND SUBSIDIARIES

CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS

(UNAUDITED)

(in thousands, except per share amounts)

Three Months Ended

Nine Months Ended

September 30, 

September 30, 

    

2023

    

2022

    

2023

    

2022

Net revenues

$

395,670

$

272,547

$

954,571

$

585,284

Cost of sales

 

315,125

 

233,332

 

803,493

 

566,032

Gross profit

 

80,545

 

39,215

 

151,078

 

19,252

Gain on disposition of assets, net

 

 

 

367

 

Acquisition and integration costs

(762)

(540)

(2,349)

Change in fair value of contingent consideration

(16,499)

(2,664)

(31,319)

(2,664)

Selling, general and administrative expenses

 

(27,818)

 

(23,563)

 

(71,456)

 

(53,966)

Income (loss) from operations

 

36,228

 

12,226

 

48,130

 

(39,727)

Equity in earnings of investment

 

 

78

 

 

8,262

Net interest expense

 

(4,152)

 

(4,644)

 

(12,567)

 

(14,617)

Other expense, net

 

(8,257)

 

(20,271)

 

(10,553)

 

(37,623)

Royalty income and other

 

78

 

348

 

2,116

 

3,286

Income (loss) before income taxes

 

23,897

 

(12,263)

 

27,126

 

(80,419)

Income tax provision

 

8,337

 

6,500

 

9,631

 

10,074

Net income (loss)

$

15,560

$

(18,763)

$

17,495

$

(90,493)

Earnings (loss) per share of common stock:

 

  

 

  

 

  

 

  

Basic

$

0.10

$

(0.12)

$

0.12

$

(0.60)

Diluted

$

0.10

$

(0.12)

$

0.11

$

(0.60)

Weighted average common shares outstanding:

 

  

 

  

 

  

 

  

Basic

 

150,550

 

151,331

 

151,031

 

151,226

Diluted

 

153,622

 

151,331

 

153,936

 

151,226

The accompanying notes are an integral part of these condensed consolidated financial statements.

HELIX ENERGY SOLUTIONS GROUP, INC. AND SUBSIDIARIES

CONDENSED CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME (LOSS)

(UNAUDITED)

(in thousands)

Three Months Ended

Nine Months Ended

September 30, 

September 30, 

    

2023

    

2022

2023

    

2022

Net income (loss)

$

15,560

$

(18,763)

$

17,495

 

$

(90,493)

Other comprehensive income (loss), net of tax:

 

  

 

  

 

  

 

  

Foreign currency translation gain (loss)

 

(16,603)

 

(33,453)

 

4,114

 

(79,939)

Other comprehensive income (loss), net of tax

 

(16,603)

 

(33,453)

 

4,114

 

(79,939)

Comprehensive income (loss)

$

(1,043)

$

(52,216)

$

21,609

 

$

(170,432)

The accompanying notes are an integral part of these condensed consolidated financial statements.

4

HELIX ENERGY SOLUTIONS GROUP, INC. AND SUBSIDIARIES

CONDENSED CONSOLIDATED STATEMENTS OF SHAREHOLDERS’ EQUITY

(UNAUDITED)

(in thousands)

Accumulated

Other

Total

Common Stock

Retained

Comprehensive

Shareholders’

    

Shares

    

Amount

    

Earnings

    

Loss

    

Equity

Balance, June 30, 2023

 

150,810

$

1,291,307

$

325,223

$

(84,602)

$

1,531,928

Net income

 

 

 

15,560

 

 

15,560

Foreign currency translation adjustments

 

 

 

 

(16,603)

 

(16,603)

Settlement of convertible debt conversion

 

 

(415)

 

 

 

(415)

Repurchases of common stock

 

(174)

 

(1,939)

 

 

 

(1,939)

Activity in company stock plans, net and other

 

70

 

481

 

 

 

481

Share-based compensation

 

 

1,506

 

 

 

1,506

Balance, September 30, 2023

 

150,706

$

1,290,940

$

340,783

$

(101,205)

$

1,530,518

Balance, June 30, 2022

 

151,714

$

1,295,016

$

339,342

$

(102,568)

$

1,531,790

Net loss

 

 

 

(18,763)

 

 

(18,763)

Foreign currency translation adjustments

 

 

 

 

(33,453)

 

(33,453)

Activity in company stock plans, net and other

 

94

 

274

 

 

 

274

Share-based compensation

 

 

2,006

 

 

 

2,006

Balance, September 30, 2022

 

151,808

$

1,297,296

$

320,579

$

(136,021)

$

1,481,854

Accumulated

Other

Total

Common Stock

Retained

Comprehensive

Shareholders’

    

Shares

    

Amount

    

Earnings

    

Loss

    

Equity

Balance, December 31, 2022

 

151,935

$

1,298,740

$

323,288

$

(105,319)

$

1,516,709

Net income

 

 

 

17,495

 

 

17,495

Foreign currency translation adjustments

 

 

 

 

4,114

 

4,114

Settlement of convertible debt conversion

 

 

(415)

 

 

 

(415)

Repurchases of common stock

 

(1,584)

 

(12,068)

 

 

 

(12,068)

Activity in company stock plans, net and other

 

355

 

185

 

 

 

185

Share-based compensation

 

 

4,498

 

 

 

4,498

Balance, September 30, 2023

 

150,706

$

1,290,940

$

340,783

$

(101,205)

$

1,530,518

Balance, December 31, 2021

 

151,124

$

1,292,479

$

411,072

$

(56,082)

$

1,647,469

Net loss

 

 

 

(90,493)

 

 

(90,493)

Foreign currency translation adjustments

 

 

 

 

(79,939)

 

(79,939)

Activity in company stock plans, net and other

 

684

 

(673)

 

 

 

(673)

Share-based compensation

 

 

5,490

 

 

 

5,490

Balance, September 30, 2022

 

151,808

$

1,297,296

$

320,579

$

(136,021)

$

1,481,854

The accompanying notes are an integral part of these condensed consolidated financial statements.

5

HELIX ENERGY SOLUTIONS GROUP, INC. AND SUBSIDIARIES

CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS

(UNAUDITED)

(in thousands)

Nine Months Ended

September 30, 

    

2023

    

2022

Cash flows from operating activities:

 

  

  

Net income (loss)

$

17,495

$

(90,493)

Adjustments to reconcile net income (loss) to net cash provided by operating activities:

 

 

  

Depreciation and amortization

 

120,013

 

102,590

Amortization of debt issuance costs

 

1,840

 

1,744

Share-based compensation

 

4,765

 

5,630

Deferred income taxes

 

6,940

 

2,876

Equity in earnings of investment

 

 

(8,262)

Gain on disposition of assets, net

 

(367)

 

Unrealized foreign currency loss

 

11,587

 

38,374

Change in fair value of contingent consideration

31,319

2,664

Changes in operating assets and liabilities:

 

  

 

  

Accounts receivable, net

 

(96,027)

 

(50,268)

Other current assets

(16,774)

(19,888)

Income tax payable, net of income tax receivable

 

(2,518)

 

1,818

Accounts payable and accrued liabilities

 

31,142

 

42,953

Deferred recertification and dry dock costs, net

(59,216)

(25,583)

Other, net

 

7,521

 

(2,759)

Net cash provided by operating activities

 

57,720

 

1,396

Cash flows from investing activities:

 

  

 

  

Alliance acquisition, net of cash acquired

 

 

(112,625)

Capital expenditures

 

(16,165)

 

(4,990)

Distribution from equity investment, net

 

 

7,840

Proceeds from sale of assets

365

Net cash used in investing activities

 

(15,800)

 

(109,775)

Cash flows from financing activities:

 

  

 

  

Payments related to convertible senior notes

 

(30,415)

 

(35,000)

Repayment of MARAD Debt

 

(8,333)

 

(7,937)

Debt issuance costs

 

(236)

 

(550)

Repurchases of common stock

(11,988)

Payments related to tax withholding for share-based compensation

 

(1,385)

 

(1,525)

Proceeds from issuance of ESPP shares

 

982

 

575

Net cash used in financing activities

 

(51,375)

 

(44,437)

Effect of exchange rate changes on cash and cash equivalents and restricted cash

 

(11,286)

 

(9,537)

Net decrease in cash and cash equivalents and restricted cash

 

(20,741)

 

(162,353)

Cash and cash equivalents and restricted cash:

 

  

 

  

Balance, beginning of year

 

189,111

 

327,127

Balance, end of period

$

168,370

$

164,774

The accompanying notes are an integral part of these condensed consolidated financial statements.

6

HELIX ENERGY SOLUTIONS GROUP, INC. AND SUBSIDIARIES

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (UNAUDITED)

Note 1 — Basis of Presentation and New Accounting Standards

The accompanying condensed consolidated financial statements include the accounts of Helix Energy Solutions Group, Inc. and its subsidiaries (collectively, “Helix”). Unless the context indicates otherwise, the terms “we,” “us” and “our” in this report refer collectively to Helix and its subsidiaries. All material intercompany accounts and transactions have been eliminated. These unaudited condensed consolidated financial statements in U.S. dollars have been prepared in accordance with instructions for the Quarterly Report on Form 10-Q required to be filed with the Securities and Exchange Commission (the “SEC”) and do not include all information and footnotes normally included in annual financial statements prepared in accordance with U.S. generally accepted accounting principles (“GAAP”).

The preparation of these financial statements requires us to make estimates and judgments that affect the amounts reported in the financial statements and the related disclosures. Actual results may differ from our estimates. We have made all adjustments, which, unless otherwise disclosed, are of normal recurring nature, that we believe are necessary for a fair presentation of the condensed consolidated balance sheets, statements of operations, statements of comprehensive loss, statements of shareholders’ equity and statements of cash flows, as applicable. The operating results for the three- and nine-month periods ended September 30, 2023 are not necessarily indicative of the results that may be expected for the year ending December 31, 2023. Our balance sheet as of December 31, 2022 included herein has been derived from the audited balance sheet as of December 31, 2022 included in our 2022 Annual Report on Form 10-K (our “2022 Form 10-K”). These unaudited condensed consolidated financial statements should be read in conjunction with the audited annual consolidated financial statements and notes thereto included in our 2022 Form 10-K.

Certain reclassifications were made to previously reported amounts in the consolidated financial statements and notes thereto to make them consistent with the current presentation format.

We do not expect any recently issued accounting standards to have a material impact on our financial position, results of operations or cash flows when they become effective.

Note 2 — Company Overview

We are an international offshore energy services company that provides specialty services to the offshore energy industry, with a focus on well intervention, robotics and decommissioning operations. Our services are centered on a three-legged business model well positioned for a global energy transition:

Production maximization our assets and methodologies are specifically designed to efficiently enhance and extend the lives of existing oil and gas reserves; we also offer an alternative to take over end-of-life reserves in preparation for their abandonment;
Decommissioning we are a full-field abandonment contractor and believe that regulatory push for plug and abandonment (“P&A”) and transition to renewable energy will facilitate the continued growth of the abandonment market; and
Renewable energy support we are an established global leader in jet trenching and provide specialty support services to offshore wind farm developments, including boulder removal and unexploded ordnance clearance.

We provide services primarily in the Gulf of Mexico, U.S. East Coast, Brazil, North Sea, Asia Pacific and West Africa regions. We expanded our service capabilities to the Gulf of Mexico shelf with the acquisition of Alliance group of companies (collectively “Alliance”) on July 1, 2022 (Note 3), which we re-branded as Helix Alliance. Our North Sea operations and our Gulf of Mexico shelf operations related to Helix Alliance are usually subject to seasonal changes in demand, which generally peaks in the summer months and declines in the winter months. Our services are segregated into four reportable business segments: Well Intervention, Robotics, Shallow Water Abandonment, which was formed in the third quarter 2022 comprising the Helix Alliance business (Note 12), and Production Facilities.

7

Our Well Intervention segment provides services enabling our customers to safely access subsea offshore wells for the purpose of performing production enhancement or decommissioning operations, thereby avoiding drilling new wells by extending the useful lives of existing wells and preserving the environment by preventing uncontrolled releases of oil and gas. Our well intervention vessels include the Q4000, the Q5000, the Q7000, the Seawell, the Well Enhancer, and two chartered monohull vessels, the Siem Helix 1 and the Siem Helix 2. Our well intervention equipment includes intervention systems such as intervention riser systems (“IRSs”), subsea intervention lubricators (“SILs”) and the Riserless Open-water Abandonment Module, some of which we provide on a stand-alone basis.

Our Robotics segment provides trenching, seabed clearance, offshore construction and inspection, repair and maintenance (“IRM”) services to both the oil and gas and the renewable energy markets globally, thereby assisting the delivery of clean and reliable energy and supporting the responsible transition away from a carbon-based economy. Additionally, our robotics services are used in and complement our well intervention services. Our Robotics segment includes remotely operated vehicles (“ROVs”), trenchers, the IROV boulder grab and robotics support vessels under term charters as well as spot vessels as needed. We offer our ROVs, trenchers and the IROV on a stand-alone basis or on an integrated basis with chartered robotics support vessels.

Our Shallow Water Abandonment segment provides services in support of the upstream and midstream ‎industries predominantly in the Gulf of Mexico shelf, including offshore oilfield decommissioning and ‎reclamation, project management, engineered solutions, intervention, maintenance, repair, heavy lift and commercial diving services. Our Shallow Water Abandonment segment includes a diversified fleet of marine assets including liftboats, offshore supply vessels (“OSVs”), dive support vessels (“DSVs”), a heavy lift derrick barge, a crew boat, P&A systems and coiled tubing systems. During the third quarter 2023, we acquired assets primarily consisting of five operable P&A systems for total consideration of $17.6 million including $6.0 million in cash in addition to credits towards future services offered by us.

Our Production Facilities segment includes the Helix Producer I (the “HP I”), a ship-shaped dynamically positioned floating production vessel, the Helix Fast Response System (the “HFRS”), which combines the HP I, the Q4000 and the Q5000 with certain well control equipment that can be deployed to respond to a well control incident, and our ownership of mature oil and gas properties (Note 13). All of our current Production Facilities activities are located in the Gulf of Mexico.

Note 3 — Alliance Acquisition

On July 1, 2022, we completed our acquisition of Alliance. The Alliance acquisition extended our energy transition strategy by adding shallow water capabilities into the growing offshore decommissioning market.

The aggregate purchase price of the Alliance acquisition was $145.7 million, consisting of $119.0 million of cash on hand and the acquisition-date estimated fair value of $26.7 million of contingent consideration related to the post-closing earn-out consideration. The earn-out is payable in 2024 to the seller in the Alliance transaction in either cash or shares of our common stock pursuant to the terms of an Equity Purchase Agreement (the “Equity Purchase Agreement”) dated May 16, 2022. The earn-out is not capped and is calculated based on certain financial metrics of the Helix Alliance business for 2022 and 2023 relative to amounts as set forth in the Equity Purchase Agreement. As of September 30, 2023, the estimated fair value of contingent earn-out consideration increased to $74.1 million and is reported in “Accrued liabilities” in the accompanying condensed consolidated balance sheet (Note 4). This increase reflects the improvements in Helix Alliance’s financial results to date as compared to the projections made at the time of the Alliance acquisition. The earn-out is to be paid in the first half of 2024 and the final amount could change based on the ultimate financial performance of Helix Alliance.

8

The following table summarizes the final purchase consideration and the final purchase price allocation to estimated fair values of the identifiable assets acquired and liabilities assumed as of the acquisition date (in thousands):

July 1, 2022

Cash consideration

$

118,961

Contingent consideration

 

26,700

Total fair value of consideration transferred

$

145,661

Assets acquired:

Cash and cash equivalents

$

6,336

Accounts receivable

43,378

Other current assets

6,077

Property and equipment

117,321

Operating lease right-of-use assets

1,205

Intangible assets

1,500

Other assets

 

2,133

Total assets acquired

177,950

Liabilities assumed:

Accounts payable

20,480

Accrued liabilities

3,073

Operating lease liabilities

 

1,205

Deferred tax liabilities

 

7,531

Total liabilities assumed

 

32,289

Net assets acquired

$

145,661

The pro forma summary below presents the results of operations as if the Alliance acquisition had occurred on January 1, 2022 and includes transaction accounting adjustments such as incremental depreciation and amortization expense from acquired tangible and intangible assets, elimination of interest expense on Alliance’s long-term debt that was paid off in conjunction with the acquisition, and tax-related effects. The pro forma summary uses estimates and assumptions based on information available at the time. Management believes the estimates and assumptions to be reasonable; however, actual results may differ significantly from this pro forma financial information. The pro forma information does not reflect any cost savings, operating synergies or revenue enhancements that might have been achieved from combining the operations. The unaudited pro forma summary is provided for illustrative purposes only and does not purport to represent Helix’s actual consolidated results of operations had the acquisition been completed as of the date presented, nor should it be considered indicative of Helix’s future consolidated results of operations.

The following table summarizes the pro forma results of Helix and Alliance (in thousands):

Nine Months Ended

September 30, 

    

2022

Revenues

$

665,021

Net loss

(82,282)

9

Note 4 — Details of Certain Accounts

Other current assets consist of the following (in thousands):

September 30, 

December 31, 

    

2023

    

2022

Prepaids

$

32,897

 

$

26,609

Contract assets (Note 9)

4,901

6,295

Deferred costs (Note 9)

 

29,600

 

13,969

Other

 

11,186

 

11,826

Total other current assets

$

78,584

 

$

58,699

Other assets, net consist of the following (in thousands):

September 30, 

December 31, 

    

2023

    

2022

Prepaid charter (1)

$

12,544

 

$

12,544

Deferred costs (Note 9)

1,672

 

6,432

Other receivable (2)

 

26,653

 

24,827

Intangible assets with finite lives, net

 

4,533

 

4,465

Other

 

2,075

 

2,239

Total other assets, net

$

47,477

 

$

50,507

(1)Represents prepayments to the owner of the Siem Helix 1 and the Siem Helix 2 to offset certain payment obligations associated with the vessels at the end of their respective charter term.
(2)Represents agreed-upon amounts that we are entitled to receive from Marathon Oil Corporation (“Marathon Oil”) for remaining P&A work to be performed by us on Droshky oil and gas properties we acquired from Marathon Oil in 2019.

Accrued liabilities consist of the following (in thousands):

September 30, 

December 31, 

    

2023

    

2022

Accrued payroll and related benefits

$

59,273

 

$

41,339

Accrued interest

2,001

6,306

Income tax payable

 

386

 

479

Deferred revenue (Note 9)

 

18,635

 

9,961

Contingent consideration (Note 17)

 

74,073

 

Other (1)

 

23,750

 

15,489

Total accrued liabilities

$

178,118

 

$

73,574

(1)Amount as of September 30, 2023 includes $9.0 million in credits toward future services offered by us in exchange for the purchase of P&A equipment in the third quarter 2023 (Note 2).

Other non-current liabilities consist of the following (in thousands):

September 30, 

December 31, 

    

2023

    

2022

Asset retirement obligations (Note 13)

$

55,542

 

$

51,956

Contingent consideration (Note 17)

42,754

Other (1)

 

4,631

 

520

Total other non-current liabilities

$

60,173

 

$

95,230

(1)Amount as of September 30, 2023 includes $2.6 million in credits toward future services offered by us in exchange for the purchase of P&A equipment in the third quarter 2023 (Note 2).

10

Note 5 — Leases

We charter vessels and lease facilities and equipment under non-cancelable contracts that expire on various dates through 2031. Our operating lease additions during the nine-month period ended September 30, 2023 are primarily related to the vessel charters for the Glomar Wave and the Horizon Enabler (Note 14). Our operating lease additions during the nine-month period ended September 30, 2022 are primarily related to the charter extensions for the Siem Helix 1, the Siem Helix 2, the Grand Canyon II, the Grand Canyon III and the Shelia Bordelon. We also sublease some of our facilities under non-cancelable sublease agreements.

The following table details the components of our lease cost (in thousands):

Three Months Ended

Nine Months Ended

September 30, 

September 30, 

    

2023

    

2022

    

2023

    

2022

Operating lease cost

$

18,836

$

16,088

$

53,189

 

$

44,348

Variable lease cost

 

6,058

 

4,488

 

16,223

 

14,035

Short-term lease cost

 

18,751

 

9,112

 

43,644

 

22,121

Sublease income

 

(374)

 

(300)

 

(911)

 

(930)

Net lease cost

$

43,271

$

29,388

$

112,145

 

$

79,574

Maturities of our operating lease liabilities as of September 30, 2023 are as follows (in thousands):

    

    

Facilities and

    

    

Vessels

    

Equipment

    

Total

Less than one year

$

66,794

$

6,737

 

$

73,531

One to two years

 

59,599

 

4,184

 

63,783

Two to three years

 

37,944

 

1,078

 

39,022

Three to four years

 

30,569

 

968

 

31,537

Four to five years

 

7,590

 

968

 

8,558

Over five years

 

 

2,086

 

2,086

Total lease payments

$

202,496

$

16,021

 

$

218,517

Less: imputed interest

 

(25,896)

 

(1,975)

 

(27,871)

Total operating lease liabilities

$

176,600

$

14,046

 

$

190,646

Current operating lease liabilities

$

55,049

$

6,142

 

$

61,191

Non-current operating lease liabilities

 

121,551

 

7,904

 

129,455

Total operating lease liabilities

$

176,600

$

14,046

 

$

190,646

Maturities of our operating lease liabilities as of December 31, 2022 are as follows (in thousands):

    

    

Facilities and

    

    

Vessels

    

Equipment

    

Total

Less than one year

$

58,063

$

6,603

 

$

64,666

One to two years

 

55,515

 

5,697

 

61,212

Two to three years

 

43,400

 

2,797

 

46,197

Three to four years

 

35,200

 

959

 

36,159

Four to five years

 

26,244

 

959

 

27,203

Over five years

 

3,041

 

2,783

 

5,824

Total lease payments

$

221,463

$

19,798

 

$

241,261

Less: imputed interest

 

(32,986)

 

(2,675)

 

(35,661)

Total operating lease liabilities

$

188,477

$

17,123

 

$

205,600

Current operating lease liabilities

$

45,131

$

5,783

 

$

50,914

Non-current operating lease liabilities