Helix Energy Solutions' net debt up in Q3 at $589 million, company boasts "strong" liquidity

By Lisa Kerner

Charlotte, N.C., Oct. 23 - Helix Energy Solutions Group, Inc.'s cash and liquidity remains strong at the end of the third quarter, said president and chief executive officer Owen Kratz during the company's earnings call on Tuesday.

Consolidated net debt at was up to $589 million at Sept. 30, from $531 million as of June 30, due primarily to the use of $85 million of cash to purchase the Helix 534 from Transocean in August.

Total liquidity at the end of the third quarter was about $1 billion, including $584 million of cash and $456 million of availability of the company's revolver.

Third-quarter capital expenditures totaled $157 million, compared to $76 million in the second quarter of 2012 and $65 million in the third quarter of 2011.

"Our liquidity position was a very robust $1 billion plus as of the end of the third quarter," said senior vice president and chief accounting officer Lloyd Hajdik on the call.

Gross debt was basically unchanged at $1.17 billion at quarter end, Hajdik said.

There has been no "significant" change in Helix's debt maturity since the end of June, other than loan amortization totaling $10.3 million during the quarter, according to Hajdik.

Net debt to book capitalization at quarter end was 27%.

Funded debt

The Houston-based offshore energy company reported total funded debt of $1.2 billion at Sept. 30 including

• $358 million of 3.25% convertible senior notes;

• $369 million of term loans at Libor plus 350 basis points on $272 million, and Libor plus 275 bps on $97 million;

• $100 million revolver borrowings at Libor plus 275 bps;

• $456 million of availability;

• $275 million of 9.5% senior unsecured notes; and

• $105 million MARAD debt at 4.93%.

Financial highlights

Helix reported net income of $14.9 million, or $0.14 per diluted share, for the third quarter of 2012 compared with net income of $46.0 million, or $0.43 per diluted share, for the same period in 2011, and net income of $44.6 million, or $0.42 per diluted share, in the second quarter of 2012.

Net income for the nine months ended Sept. 30 was $125.2 million, or $1.18 per diluted share, compared with net income of $113.2 million, or $1.06 per diluted share, for the prior-year period.

Capital expenditures, including capitalized interest, totaled $157 million in the third quarter of 2012, compared to $76 million in the second quarter of 2012 and $65 million in the third quarter of 2011.

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