ITEM 3. LEGAL PROCEEDINGS
We are involved in various routine legal proceedings primarily involving claims for personal injury under the Jones Act and general maritime laws which we believe are incidental to the conduct of our business. We believe that none of these proceedings, if adversely determined, would have a material adverse effect on our business or financial condition.
ITEM 4.
ITEM 4. SUBMISSION OF MATTERS TO A VOTE OF SECURITY HOLDERS
None.
ITEM 4A. EXECUTIVE OFFICERS OF THE REGISTRANT
Listed below are the names, ages and offices held by our executive officers as of March 1, 2001.
Executive officers are appointed by our board of directors, subject to rights under employment agreements.
BILL J. LAM is our President, Chief Executive Officer and a Director. Mr. Lam has served as our President and Chief Executive Officer since December 1997. From July 1997 to November 1997, Mr. Lam was our Vice President--Operations. Prior to being employed by us, Mr. Lam held various supervisory positions for the following providers of marine construction services to the offshore oil and gas industry: Lowe Offshore, Inc. (from January 1997 to July 1997), J. Ray McDermott, S.A. (from January 1995 to January 1997), and OPI International, Inc. (from August 1990 to January 1995).
DAVID W. SHARP is our Executive Vice President and Chief Financial Officer. Mr. Sharp has served as our Executive Vice President and Chief Financial Officer since December 1997. From October 1996 to November 1997, Mr. Sharp was Vice President--Finance. He held various positions from January 1995 to October 1996 with McDermott, including world-wide project leader for the implementation of accounting and financial systems. He was controller-Atlantic Division and Director of Management Information of OPI International from November 1990 to January 1995.
R. CLAY ETHERIDGE is our Executive Vice President and Chief Operating Officer. Mr. Etheridge has served as our Executive Vice President and Chief Operating Officer since September 1999. Prior to joining us, Mr. Etheridge served as Vice President of International Operations for Global Industries from March 1997 to September 1999. Mr. Etheridge has held executive management positions with McDermott in southeast Asia, and OPI International, with responsibility for Gulf of Mexico and West African operations, and served as project manager for Heerema Marine Contractors.
JAMES K. COLE is our Senior Vice President and has held that position since December 1997. From November 1996 to November 1997, Mr. Cole was Vice President--Human Resources and Risk Management. He was manager of corporate safety and health of McDermott from January 1995 to September 1996 and director of corporate health, safety and environment for OPI International from April 1991 to January 1995. On the advice of counsel, Mr. Cole filed a voluntary petition for personal bankruptcy in July 1997.
PART II
ITEM 5.
ITEM 5. MARKET FOR REGISTRANT'S COMMON EQUITY AND RELATED STOCKHOLDER MATTERS
Our common stock, $1.00 par value, is traded on the Nasdaq National Market under the symbol "HOFF". At March 13, 2001, we had approximately 28 holders of record of the common stock.
The following table sets forth the high and low closing bid prices per share of our common stock, as reported by the Nasdaq National Market, for each fiscal quarter during the past two fiscal years.
We intend to retain all of the cash our business generates to fund future growth and meet our working capital requirements. We do not plan to pay cash dividends on our common stock in the foreseeable future. In addition, our debt agreements prevent us from paying dividends or making other distributions to our stockholders.
ITEM 6.
ITEM 6. SELECTED FINANCIAL DATA
The selected financial data for the periods ended December 31, 2000, 1999, 1998, 1997 and 1996 are derived from our audited financial statements. You should read the information below together with "Management's Discussion and Analysis of Financial Condition and Results of Operations" and our consolidated financial statements and notes thereto included in this Annual Report.
- ------------------------ (1) Results are from inception (December 20, 1995) through December 31, 1996.
(2) We calculate EBITDA as earnings before interest expense, interest income, income taxes, depreciation and amortization. EBITDA is a supplemental financial measurement we use to evaluate our business. We believe that EBITDA provides supplemental information about our ability to meet future requirements for debt service, capital expenditures and working capital. It is not intended to depict funds available for reinvestment or other discretionary uses. We believe factors that should be considered by investors in evaluating EBITDA include, but are not limited to, trends in EBITDA as compared to cash flow from operations, debt service requirements and capital expenditures. Our measurement of EBITDA may not be comparable to EBITDA as calculated by other companies. Further, you should not consider EBITDA in isolation as an alternative to, or more meaningful than, net income, cash flow provided by operations or any other measure of performance determined in accordance with generally accepted accounting principles as an indicator of our profitability or liquidity.
ITEM 7.
ITEM 7. MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS
You should read the following discussion and analysis together with our consolidated financial statements and notes thereto included in this Annual Report. The following information contains forward-looking statements, which are subject to risks and uncertainties. Should one or more of these risks or uncertainties materialize, actual results may differ from those expressed or implied by the forward-looking statements. See "Cautionary Statement."
GENERAL
We provide marine construction services to the oil and gas industry primarily in the Gulf of Mexico and selected international locations. Our marine fleet installs offshore pipelines to transport oil and gas from newly installed production platforms and other subsea production systems, and installs and salvages production platforms and other marine structures. Our present management team assumed its current role in 1997 and has aggressively expanded our operations. We now have a fleet of eleven vessels capable of providing a full range of pipeline and derrick services in varying water depths. We currently operate ten of these vessels, consisting of five pipelay/pipebury barges, a dedicated pipebury barge, two derrick barges and two diving support vessels.
The demand for offshore construction services in the Gulf depends largely on the condition of the oil and gas industry and, in particular, the level of capital expenditures by oil and gas companies for developmental construction. These expenditures are influenced by:
- prevailing oil and gas prices;
- expectations about future demand and prices;
- the cost of exploring for, producing and developing oil and gas reserves;
- the discovery rates of new oil and gas reserves;
- sale and expiration dates of offshore leases in the United States and abroad;
- political and economic conditions;
- governmental regulations; and
- the availability and cost of capital.
Historically, oil and gas prices and the level of exploration and development activity have fluctuated substantially, impacting the demand for pipeline and marine construction services. Factors affecting our profitability include competition, equipment and labor productivity, contract estimating, weather conditions and the other risks inherent in marine construction. The marine construction industry in the Gulf is highly seasonal as a result of weather conditions with the greatest demand for these services occurring during the second and third calendar quarters of the year.
RESULTS OF OPERATIONS
The discussion below describes our results of operations. Improvements in the marine construction business are reflected in our results for the year ended December 31, 2000. We believe our enhanced equipment capabilities have strengthened our competitive position. Horizon has been awarded several large projects during 2000 which demonstrates our reputation for superior execution and the confidence that our customers have in our abilities. In 2000, we mobilized our 500-ton derrick barge, the ATLANTIC HORIZON, and our pipelay barge, the GULF HORIZON, to begin work on the construction of a major project for Pemex. The project for the construction of six pipelines in the Cantarell Field represented our entry into Mexico. We have completed a substantial portion of this initial project and have begun construction on another Pemex project for the installation, bury, hook-up and commissioning of seven pipelines in the Cantarell Field. We believe that these projects are important milestones in the execution of our international strategy and further enhance our reputation in the international market. We will continue to pursue international construction projects in Mexico, as well as Central and South America and West Africa. In 2000, we also completed a project offshore Ecuador and several other larger projects in the U.S. Gulf of Mexico, including installation of 22 miles of 20-inch gas pipeline as part of the Hickory Pipeline Lateral Project and a four-bundle pipelay project which required laying four pipelines simultaneously. Our backlog of work was approximately $50 million as of December 31, 2000.
YEAR ENDED DECEMBER 31, 2000 COMPARED TO THE YEAR ENDED DECEMBER 31, 1999
RESULTS OF OPERATIONS
CONTRACT REVENUES.
Contract revenues were $160.5 million for 2000 compared with $89.0 million for 1999. Our revenues for 2000 increased 80.3% compared with the same period last year due to the projects in Mexico and higher utilization of our vessels in the Gulf of Mexico. Our two projects in Mexico contributed approximately $57.9 million in revenues during 2000.
GROSS PROFIT.
Gross profit was $24.4 million (15.2% of contract revenues) for 2000 compared with a gross profit of $16.8 million (18.9% of contract revenues) for 1999. The decrease in gross profit as a percentage of revenues is attributable to lower margins previously bid on jobs due to competitive market conditions.
SELLING, GENERAL AND ADMINISTRATIVE EXPENSES.
Selling, general and administrative expenses increased to $9.4 million (5.9% of contract revenues) for 2000, compared with $9.0 million (10.2% of contract revenues) for 1999. The percentage decrease was primarily due to the increase in revenues without a corresponding significant increase in selling, general and administrative expenses.
INTEREST EXPENSE.
Interest expense for 2000 was $7.7 million, net of $0.3 million interest capitalized. Interest expense for 1999 was $5.8 million, net of $0.8 million interest capitalized. Total outstanding debt was $90.9 million at December 31, 2000 compared with $79.3 million at December 31, 1999.
INTEREST INCOME.
Interest income includes interest from cash investments for the year ended December 31, 2000 and 1999 of $718,000 and $480,000, respectively.
OTHER INCOME (EXPENSE).
Other income (expense) for the year ended December 31, 2000, consisted of equity losses of $221,000 related to the DSND joint venture, $122,000 of revenue earned from billings to the DSND joint venture for administrative services and $15,000 of miscellaneous income. Other income (expense) for the year ended December 31, 1999, consisted of $127,000 of insurance proceeds, $63,000 of revenue earned from billings to the DSND joint venture for administrative services, equity losses of $12,000 related to the DSND joint venture and $20,000 of miscellaneous expense.
INCOME TAXES.
We use the liability method of accounting for income taxes. Excluding $743,000 of deferred tax provision attributable to the accounting change in 2000, we recorded a federal income tax expense of $2.9 million, at a net effective rate of 36.8% on pre-tax income of $7.9 million. In 1999, we recorded a federal income tax provision of $1.0 million, at a net effective rate of 37.4% on pre-tax income of $2.7 million.
CUMULATIVE EFFECT OF ACCOUNTING CHANGE.
We recorded a cumulative effect of $1.4 million, or $0.07 per share, net of taxes of $0.7 million related to changing depreciation methods from straight-line to the units-of-production method effective January 1, 2000. See Note 1 of the notes to consolidated financial statements.
NET INCOME.
Net income was $6.4 million or $0.33 per share, diluted, for 2000, which includes the effect of a cumulative adjustment of $1.4 million, or $0.07 per share, related to a change in accounting principle. Net income for 1999 was $1.7 million, or $0.09 per share, diluted.
YEAR ENDED DECEMBER 31, 1999 COMPARED TO THE YEAR ENDED DECEMBER 31, 1998
RESULTS OF OPERATIONS
CONTRACT REVENUES.
Contract revenues were $89.0 million for 1999 compared with $119.8 million for 1998. Revenues for 1999 decreased due to reduced demand for offshore construction services. We operated ten vessels in 1999, compared with eight vessels operating in December 1998. We laid 190 miles and buried 155 miles of pipe of various diameters and in various water depths in the Gulf during 1999, compared with approximately 220 miles laid and 210 miles buried in 1998. We recognized $3.2 million in revenues in 1999 and $4.9 million in 1998 for the STEPHANITURM charter to DSND.
GROSS PROFIT.
Gross profit was $16.8 million (18.9% of contract revenues) for 1999 as compared with a gross profit of $27.8 million (23.2% of contract revenues) for 1998. Lower gross profit for 1999 was primarily attributable to the lower level of offshore construction and the intense price competition for pipeline projects. We recognized gross profit of $2.0 million in 1999 and $4.1 million in 1998 from the STEPHANITURM charter to DSND.
SELLING, GENERAL AND ADMINISTRATIVE EXPENSES.
Selling, general and administrative expenses increased to $9.0 million (10.2% of contract revenues) for 1999 from $8.1 million (6.8% of contract revenues) for 1998, primarily due to expenses associated with our fleet expansion. The percentage increase was primarily due to the decrease in revenues while selling, general and administrative expenses increased.
INTEREST EXPENSE.
Interest expense was $5.8 million, net of $0.8 million interest capitalized for 1999, compared with interest expense of $3.0 million, net of $1.3 million interest capitalized for 1998. Total outstanding debt was $79.3 million at December 31, 1999 compared with $69.9 million at year end 1998. The outstanding debt increased during 1999 as a result of increasing debt to fund vessel acquisitions and improvements.
INTEREST INCOME.
Interest income includes interest from cash investments for the year ended December 31, 1999 and 1998 of $480,000 and $187,000, respectively.
OTHER INCOME (EXPENSE).
Other income (expense) for the year ended December 31, 1999 consisted of $127,000 of insurance proceeds, $63,000 of revenue earned from billings to the DSND joint venture for administrative services, equity losses of $12,000 related to the DSND joint venture and $20,000 of miscellaneous expense. Other income (expense) for the year ended December 31, 1998 consisted of $17,000 of miscellaneous income.
INCOME TAXES.
We use the liability method of accounting for income taxes. We recorded a deferred federal income tax expense of $1.0 million, at a net effective rate of 37.4% on pre-tax income of $2.7 million in 1999. This compares with a total provision of $4.5 million for 1998 at a net effective rate of 26.5% on pre-tax income of $16.9 million, due to operating loss carryforwards from previous years.
NET INCOME.
Net income was $1.7 million or $0.09 per share, basic and diluted, for the year ended December 31, 1999, compared to net income of $12.5 million, or $0.69 per share, basic and diluted, for the year ended December 31, 1998. The reduction of net income is primarily the result of reduced demand for offshore construction in the Gulf during 1999.
LIQUIDITY AND CAPITAL RESOURCES
In February 2001, we sold 3,800,000 shares of common stock in a secondary offering. We received $66.3 million after deducting the underwriting discount and expenses. We used $30.0 million to reduce indebtedness, $10.0 million to support the joint venture with Cal Dive, and the remainder will be used for general corporate purposes, including funding capital expenditures to expand our operating capabilities and potential vessel acquisitions.
We had working capital of $10.0 million at December 31, 2000 compared with working capital of $4.0 million at December 31, 1999. The increase in working capital was primarily the result of an increase in contract receivables. We intend to use a portion of the proceeds from the offering for general working capital purposes. Cash provided by operations was $10.7 million for 2000, $15.7 million for 1999 and $10.5 million for 1998. The decrease in cash provided by operations during 2000 was the result of an increase in contract receivables and costs in excess of billings. The improvement in cash provided by operations during 1999 was the result of a decline in working capital attributable to decreases in accounts receivable and costs in excess of billings. Reduced demand for offshore construction in 1999 caused revenues to decrease from $119.8 million in 1998 to $89.0 million in 1999, and caused a decline in working capital.
In December 1998, we entered into a term loan agreement with The CIT Group, Inc. providing for a $60.0 million term loan at a rate of LIBOR plus 2.65%. In December 1998, we borrowed $50.0 million. During 1999, our term loan was amended to increase the amount that could be borrowed to $83.3 million, and we borrowed an additional $33.3 million. During 2000, our term loan was
amended to increase the amount that could be borrowed to $91.4 million, and we borrowed an additional $8.1 million. Outstanding borrowings under our term loan at December 31, 2000 were $75.7 million. Our term loan is secured by mortgages on all vessels. During March 2001, we paid $30 million to reduce the outstanding principal balance under our term loan, which is subject to a penalty of up to 3% of the pre-payment for the early extinguishment of debt. Outstanding borrowings under our term loan at March 31, 2001 were $43.1 million. Our total borrowings currently require a $411,000 monthly principal payment. The loan agreement with The CIT Group, Inc. will mature at various dates between December 31, 2005 and May 31, 2006.
At December 31, 2000, we had $9.2 million in cash and $13.4 million outstanding under a $30.0 million revolving credit facility with Wells Fargo Bank. Outstanding borrowings bore interest at LIBOR plus 2.0% and were secured by accounts receivable from customers. There were no additional borrowings available under the Wells Fargo borrowing base calculation at December 31, 2000. In March 2001, we replaced the $30.0 million revolving credit facility with Wells Fargo Bank by entering into a $25.0 million revolving line of credit with a syndicate agented by Southwest Bank of Texas. The Southwest Bank facility matures on April 3, 2003, and currently bears interest at LIBOR plus 2.0% and is secured by accounts receivable from customers.
Our term loan and revolving credit facility require that certain conditions be met in order for us to obtain advances. Our term loan is secured by mortgages on all vessels. Our revolving credit facility is secured by accounts receivable. Advances under our current credit facility may be obtained in accordance with a borrowing base defined as a percentage of accounts receivable balances. Both the term loan and revolving credit facility contain customary defaults and require us to maintain certain financial ratios. The term loan and revolving credit facility also contain certain covenants that limit our ability to incur additional debt, pay dividends, create certain liens, sell assets and make capital expenditures. We were in compliance with all loan covenants as of December 31, 2000.
Capital expenditures during 2000 totaled $19.3 million compared with $24.4 million for 1999. We made capital expenditures during 2000 primarily to complete improvements to our existing fleet.
Current maturities of long-term debt were $12.5 million as of December 31, 2000. We believe that cash generated from operations and the offering, together with available borrowings under our revolving credit facility, will be sufficient to fund the planned capital projects and working capital requirements into 2002. Planned capital expenditures for 2001 are estimated to total approximately $24.0 million. Our strategy, however, is to make other acquisitions, to expand our operating capabilities and expand into selected international areas. To the extent we are successful in identifying acquisition and expansion opportunities and have expanded our market share in those areas, we may require additional equity or debt financing depending on the size of any transaction.
ITEM 7A.
ITEM 7A. QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK
Our market risk exposures primarily include interest rate and exchange rate fluctuation on derivative and financial instruments as detailed below. Our market risk sensitive instruments are classified as "other than trading". The following sections address the significant market risks associated with our financial activities during 2000. Our exposure to market risk as discussed below includes "forward-looking statements" and represents estimates of possible changes in fair values, future earnings or cash flows that would occur assuming hypothetical future movements in foreign currency exchange rates or interest rates.
As of December 31, 2000 the carrying value of our long-term variable rate debt, including accrued interest, was approximately $75.7 million. The fair value of this debt approximates the carrying value because the interest rates are based on floating rates identified by reference to market rates. Fair value was determined as noted above. A hypothetical 1% increase in the applicable interest rates as of December 31, 2000 would increase annual interest expense by approximately $757,000.
In Mexico, we collect revenues and pay expenses in foreign currency. We monitor the exchange rate of our foreign currencies and, when deemed appropriate, enter into hedging transactions in order to mitigate the risk from foreign currency fluctuations. We also manage foreign currency risk by attempting to contract as much foreign revenue as possible in U.S. Dollars.
ITEM 8.
ITEM 8. FINANCIAL STATEMENTS AND SUPPLEMENTARY DATA
Our consolidated financial statements and supplementary data appear on pages through in this report and are incorporated herein by reference. See Index to consolidated financial statements on page 20.
ITEM 9.
ITEM 9. CHANGES IN AND DISAGREEMENTS WITH ACCOUNTANTS ON ACCOUNTING AND FINANCIAL DISCLOSURE
Not applicable
PART III
ITEM 10.
ITEM 10. DIRECTORS AND EXECUTIVE OFFICERS OF THE REGISTRANT
Information concerning our directors and executive officers called for by this item will be included in our definitive Proxy Statement prepared in connection with the 2001 annual meeting of stockholders and is incorporated herein by reference. For additional information regarding executive officers, see "Executive Officers of the Registrant" of this Annual Report.
ITEM 11.
ITEM 11. EXECUTIVE COMPENSATION
Information concerning the compensation of the executive officers called for by this item will be included in our definitive Proxy Statement prepared in connection with the 2001 annual meeting of stockholders and is incorporated herein by reference.
ITEM 12.
ITEM 12. SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND MANAGEMENT
Information concerning security ownership of certain beneficial owners and management called for by this item will be included in our definitive Proxy Statement prepared in connection with the 2001 annual meeting of stockholders and is incorporated herein by reference.
ITEM 13.
ITEM 13. CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS
Information concerning certain relationships and related transactions called for by this item will be included in our definitive Proxy Statement prepared in connection with the 2001 annual meeting of stockholders and is incorporated herein by reference.
PART IV
ITEM 14.
ITEM 14. EXHIBITS, FINANCIAL STATEMENT SCHEDULES AND REPORTS ON FORM 8-K
(a) The following financial statements are filed as a part of this report:
1. Financial Statements
2. Financial Statement Schedules
Other schedules have not been included because they are not applicable, immaterial or the information required has been included in the financial statements or notes thereto.
3. Exhibits
(a) Exhibits
See Index to Exhibits on page E-1. The Company will furnish to any eligible stockholder, upon written request, a copy of any exhibit listed upon payment of a reasonable fee equal to our expenses in furnishing such exhibit.
(b) Reports on Form 8-K:
On November 2, 2000, we filed a report on Form 8-K, reporting under item 7, earnings for the third quarter ended September 30, 2000.
REPORT OF INDEPENDENT PUBLIC ACCOUNTANTS
To the Board of Directors of Horizon Offshore, Inc.,
We have audited the accompanying consolidated balance sheets of Horizon Offshore, Inc. (a Delaware corporation), and subsidiaries as of December 31, 2000 and 1999, and the related consolidated statements of operations, stockholders' equity and cash flows for the years ended December 31, 2000, 1999 and 1998. These financial statements are the responsibility of the Company's management. Our responsibility is to express an opinion on these financial statements based on our audits.
We conducted our audits in accordance with auditing standards generally accepted in the United States. Those standards require that we plan and perform the audit to obtain reasonable assurance about whether the financial statements are free of material misstatement. An audit includes examining, on a test basis, evidence supporting the amounts and disclosures in the financial statements. An audit also includes assessing the accounting principles used and significant estimates made by management, as well as evaluating the overall financial statement presentation. We believe that our audits provide a reasonable basis for our opinion.
In our opinion, the financial statements referred to above present fairly, in all material respects, the consolidated financial position of Horizon Offshore, Inc., and subsidiaries as of December 31, 2000 and 1999, and the consolidated results of their operations and their cash flows for the years ended December 31, 2000, 1999 and 1998, in conformity with accounting principles generally accepted in the United States.
Arthur Andersen LLP
Houston, Texas January 30, 2001
HORIZON OFFSHORE, INC. AND SUBSIDIARIES CONSOLIDATED BALANCE SHEETS (IN THOUSANDS, EXCEPT SHARE DATA)
The accompanying notes are an integral part of these consolidated financial statements.
HORIZON OFFSHORE, INC. AND SUBSIDIARIES CONSOLIDATED STATEMENTS OF OPERATIONS (IN THOUSANDS, EXCEPT SHARE AND PER SHARE DATA)
The accompanying notes are an integral part of these consolidated financial statements.
HORIZON OFFSHORE, INC. AND SUBSIDIARIES CONSOLIDATED STATEMENTS OF STOCKHOLDERS' EQUITY (IN THOUSANDS)
The accompanying notes are an integral part of these consolidated financial statements.
HORIZON OFFSHORE, INC. AND SUBSIDIARIES CONSOLIDATED STATEMENTS OF CASH FLOWS (IN THOUSANDS)
The accompanying notes are an integral part of these consolidated financial statements.
HORIZON OFFSHORE, INC. AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
1. ORGANIZATION AND SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES:
ORGANIZATION
Horizon Offshore, Inc. (a Delaware corporation) and its subsidiaries (Horizon), provide offshore construction services to the oil and gas industry. These services generally consist of laying and burying marine pipelines for the transportation of oil and gas. Work is performed primarily on a fixed-price or day-rate basis or a combination thereof.
Horizon, which was incorporated on December 20, 1995, did not commence operations until March 1996 and until December 1997 was wholly owned by Highwood Partners, L.P. and Elliott International, L.P. (the Principal Stockholders). The Principal Stockholders funded substantially all of Horizon's cash requirements from inception through April 1998, including operating activities, working capital requirements and capital expenditures for the acquisition and improvement of assets and equipment. These advances were represented by promissory notes bearing interest at the rate of 10% per annum.
In 1997, Horizon was recapitalized through a series of transactions. The Principal Stockholders contributed $21.0 million of the principal indebtedness and accrued interest to additional paid-in capital. We issued 10% Subordinated Notes due December 31, 2005 (Subordinated Notes) to the Principal Stockholders to evidence the remaining outstanding indebtedness and to provide for any future advances in an aggregate amount not to exceed $24.0 million. In April 1998, we completed an initial public offering (the Offering) of 5,750,000 shares of common stock at $13.00 per share and received $68.6 million, net of $6.2 million of underwriting commissions and discounts and expenses. We used the net proceeds of the Offering to repay $23.8 million of outstanding Subordinated Notes and to acquire the STEPHANITURM, a 230-foot diving support vessel, for $18.3 million. The remaining Offering proceeds were used to expand our fleet.
In February 2001, we completed a secondary offering of 3,800,000 shares of common stock at $18.50 per share and received $66.3 million, net of $4.0 million of underwriting commissions and discounts and expenses. We used $30.0 million to reduce debt, $10.0 million to support the Cal Dive joint venture, and the remainder will be used for general corporate purposes, including funding capital expenditures to expand our operating capabilities and potential vessel acquisitions.
CAL DIVE JOINT VENTURE
On March 1, 2001, we signed a definitive agreement with Cal Dive International, Inc. forming a joint venture, 50% owned by us, to perform deepwater reel pipelaying projects in the U.S. Gulf of Mexico. We will jointly manage and staff the joint venture with Cal Dive. The joint venture will charter the SEA SORCERESS, a 374 foot vessel with a 10,000 ton deck load capacity that is being converted to a dynamically positioned multi-service vessel, and other vessels from Cal Dive on an as-needed basis to perform deepwater small diameter pipelaying projects. The joint venture will require an estimated capital expenditure of approximately $15.0 million, of which we will pay 50%, to design, construct and install the reel pipelay equipment. Construction of a spooling facility to support the joint venture and other reel pipelaying requirements at our marine base in Port Arthur, Texas began in February 2001, at an estimated cost of $2.5 million to us.
DSND TRANSACTION
In December 1997, Det Sondenfjelds-Norske Dampskibsselskab ASA (DSND) acquired 4,125,000 shares of our common stock from the Principal Stockholders. On August 13, 1999, DSND sold all of its shares of Horizon common stock in the public market and is no longer a stockholder. Upon completion
HORIZON OFFSHORE, INC. AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (CONTINUED)
1. ORGANIZATION AND SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES: (CONTINUED) of the Offering in April 1998, DSND sold the STEPHANITURM, a dynamically positioned diving support vessel, to us. In addition, we obtained a 30% interest in a joint venture (the DSND Horizon Joint Venture) formed to operate a reel pipelaying vessel in the Gulf, offshore Mexico, Canada, and in the Caribbean. Horizon and DSND are required to fund cash for operating activities in proportion to their equity ownership. We recognized equity in losses of the DSND Horizon Joint Venture of $221,000, $12,000 and $158,000 and made contributions of $189,000, $39,000 and $138,000 during 2000, 1999 and 1998, respectively. We earned $122,000, $63,000 and $127,000 during 2000, 1999 and 1998, respectively, from administrative fees billed to the DSND Horizon Joint Venture. In February, 2001, the DSND joint venture was dissolved.
BUSINESS RISKS
Our level of activity depends largely on the condition of the oil and gas industry and, in particular, the level of capital expenditures by oil and gas companies for developmental construction. These expenditures are influenced by prevailing oil and gas prices, expectations about future demand and prices, the cost of exploring for, producing and developing oil and gas reserves, the discovery rates of new oil and gas reserves, sale and expiration dates of offshore leases in the United States and abroad, political and economic conditions, governmental regulations and the availability and cost of capital. Historically, oil and gas prices and the level of exploration and development activity have fluctuated substantially, impacting the demand for pipeline and marine construction services.
A prolonged weakness in energy prices or a prolonged period of lower levels of offshore drilling and exploration could adversely affect our future revenues and profitability. We experienced a decline in demand for marine construction services in the Gulf during 1999. As oil prices began to improve at mid-year 1999, drilling activity began to increase to a substantial level by mid-2000. Our operating results are directly tied to industry demand for our services, most of which are performed in the continental shelf in the Gulf.
Factors affecting our profitability include competition, equipment and labor productivity, contract estimating, weather conditions and the other risks inherent in marine construction. The marine construction industry in the Gulf is highly seasonal as a result of weather conditions, with the greatest demand for these services occurring during the second and third quarters of the year. Full year results are not a direct multiple of any quarter or combination of quarters because of this seasonality.
PRINCIPLES OF CONSOLIDATION
The consolidated financial statements include the accounts of Horizon and its subsidiaries. All significant intercompany balances and transactions have been eliminated.
REVENUE RECOGNITION
Contract revenues are recognized on the percentage-of-completion method, measured by the percentage of costs incurred to date to the total estimated costs for each contract. We consider the percentage-of-completion method to be the best available measure of progress on these contracts. Changes in job performance, job conditions and estimated profitability, including those arising from final contract settlements, may result in revisions to costs and revenues and are recognized in the period in which the revisions are determined. Provisions for estimated losses on uncompleted contracts are made in the period in which such losses are determined. The asset "Costs in excess of billings" represents revenues recognized in excess of amounts billed. The liability "Billings in excess of costs" represents amounts billed in excess of revenues recognized.
HORIZON OFFSHORE, INC. AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (CONTINUED)
1. ORGANIZATION AND SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES: (CONTINUED) In December 1999, the Securities Exchange Commission (SEC) issued Staff Accounting Bulletin No. 101, "Revenue Recognition in Financial Statements." SAB 101 summarizes certain of the SEC's views in applying generally accepted accounting principles to revenue recognition in financial statements. SAB 101, as amended, was effective beginning in the fourth quarter of 2000. The adoption of this pronouncement did not have any material effect on our consolidated financial statements.
COST RECOGNITION
Costs of contract revenues include all direct material and labor costs and certain indirect costs, which are allocated to contracts based on utilization, such as supplies, tools, repairs and depreciation. Selling, general and administrative costs are charged to expense as incurred.
INTEREST CAPITALIZATION
Interest is capitalized on the average amount of accumulated expenditures for equipment that has been purchased and is undergoing major modifications prior to being placed into service. Interest is capitalized until the equipment is placed into service using an effective rate based on related debt. Interest expense is net of interest capitalized in the amount of $0.3 million in 2000, $0.8 million in 1999 and $1.3 million in 1998.
CASH AND CASH EQUIVALENTS
We consider all cash in banks and highly liquid investments with original maturity dates of three months or less to be cash equivalents.
INVENTORY
Inventory consists of structures obtained as a result of performing salvage services that are held for resale. The inventory is reported at the lower of cost or market value. We periodically assess the net realizable value of our inventory items.
PROPERTY AND EQUIPMENT
We use the units-of-production method to calculate depreciation on our major barges and vessels to accurately reflect the wear and tear of normal use. Major additions and improvements to barges, boats and related equipment are capitalized and depreciated over the useful life of the vessel. Maintenance and repairs are expensed as incurred. When equipment is sold or otherwise disposed of, the cost of the equipment and accumulated depreciation are removed from the accounts and any gain or loss is reflected in income. Depreciation is provided using the straight-line method based on the following estimated useful lives:
On January 1, 2000, we changed depreciation methods from the straight-line method to the units-of-production method on our major barges and vessels to more accurately reflect the wear and tear of normal use. We believe that the units-of-production method is best suited to reflect the actual deterioration of our marine equipment. Depreciation expense calculated under the units-of-production
HORIZON OFFSHORE, INC. AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (CONTINUED)
1. ORGANIZATION AND SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES: (CONTINUED) method may be different than depreciation expense calculated under the straight-line method in any period. The annual depreciation based on utilization of each vessel will not be less than 25% of annual straight-line depreciation, and the cumulative depreciation based on utilization of each vessel will not be less than 50% of cumulative straight-line depreciation. For the year ended December 31, 2000, we recorded the cumulative effect of a $1.4 million adjustment, or $0.07 per share, which is net of taxes of $0.7 million related to changing depreciation methods from the straight-line method to the units-of-production method. Had this change been applied retroactively, pro-forma net income would have been increased by $1.7 million ($1.1 million after tax, or $0.06 per share) in 1999. The impact on pro-forma net income for 1998 is not disclosed due to immateriality.
Effective July 1, 1999, we changed the estimated salvage value on certain of our barges and vessels from zero to 10% to more accurately reflect our estimate of the value of the assets at the end of their estimated useful lives. The change was treated as an accounting estimate change. For the year ended December 31, 1999, the change had the effect of reducing depreciation expense by $0.4 million and increasing net income by $0.2 million or $0.01 per share--basic and diluted.
We periodically assess the realizability of our long-term assets pursuant to the provisions of SFAS No. 121, "Accounting for the Impairment of Long-Lived Assets and for Long-Lived Assets to Be Disposed Of." Based on our analysis of the undiscounted future cash flows for our long-term assets, no impairments have been recognized under SFAS No. 121 for the years ended December 31, 2000, 1999 and 1998.
OTHER LONG-TERM ASSETS
Other assets consist principally of prepaid loan fees, deferred dry-dock cost, deferred interest, deferred offering costs and deposits. Deferred interest was imputed at 10% on aggregate non-interest bearing debt of $1.0 million, $3.0 million and $5.1 million at December 31, 2000, 1999 and 1998, respectively, and is amortized over the life of the debt agreements using the effective interest rate method. Deposits consist of a security deposit on the corporate office lease as of December 31, 2000. Loan fees paid in connection with the loan facilities will be amortized over the term of the loans (See Note 4).
Dry-dock costs are third-party costs associated with scheduled maintenance on the marine construction vessels. Costs incurred in connection with dry-dockings are deferred and amortized over the period to the next scheduled dry-docking. Other current assets include the portion of these deferred charges expected to be amortized during the next twelve month period, with the residual balance in other long-term assets.
Deferred offering costs are expenses related to the secondary offering completed in February 2001 and will be netted against the proceeds from the offering in additional paid-in capital.
HORIZON OFFSHORE, INC. AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (CONTINUED)
1. ORGANIZATION AND SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES: (CONTINUED) Other long-term assets consist of the following (in thousands):
FEDERAL INCOME TAXES
We use the liability method of accounting for income taxes. Under the liability method, deferred tax assets and liabilities are recognized for the future tax consequences attributable to temporary differences between the financial statement carrying amounts of existing assets and liabilities and their respective tax bases. Deferred tax assets and liabilities are measured using enacted tax rates expected to apply to taxable income in the years in which those temporary differences are expected to reverse. The effect on deferred tax assets and liabilities of a change in tax rates is recognized in income in the period enacted.
FAIR VALUE OF FINANCIAL INSTRUMENTS
As of December 31, 2000 the carrying value of our long-term variable rate debt, including accrued interest, was approximately $75.7 million. The fair value of this debt approximates the carrying value because the interest rates are based on floating rates identified by reference to market rates. Fair value was determined as noted above. A hypothetical 1% increase in the applicable interest rates as of December 31, 2000 would increase annual interest expense by approximately $757,000.
USE OF ESTIMATES
The preparation of financial statements in conformity with accounting principles generally accepted in the United States requires us to make estimates and assumptions that affect the reported amounts of assets and liabilities, the disclosure of contingent assets and liabilities at the date of the financial statements and the reported amounts of revenue and expenses during the reporting period. We review all significant estimates on a recurring basis and record the effect of any necessary adjustments prior to publication of the Company's financial statements. Adjustments made with respect to the use of estimates often relate to improved information not previously available. Uncertainties with respect to such estimates are inherent in the preparation of financial statements.
SEGMENT INFORMATION
We have domestic operations in one industry segment, the marine construction service industry to offshore oil and gas companies. We had one major oil and gas customer whose revenues accounted for 36.1% of consolidated revenues in 2000. Our revenues generally do not depend on any one customer. The level of construction services required by a customer depends on the size of their capital expenditure budget for construction for the year. Consequently, customers that account for a significant
HORIZON OFFSHORE, INC. AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (CONTINUED)
1. ORGANIZATION AND SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES: (CONTINUED) portion of contract revenues in one year may represent an immaterial portion of contract revenues in subsequent years. Based upon our interpretation of the requirements of SFAS No. 131, "Disclosures About Segments of an Enterprise and Related Information," Horizon does not have more than one reportable operating segment.
RECLASSIFICATIONS
Certain prior year balances have been reclassified to conform with current year presentation.
2. ACCOUNTS RECEIVABLE:
Contract receivables are generally billed upon the completion of small contracts and are progress billed on larger contracts. Costs in excess of billings solely represent costs incurred on jobs in process. Claims for extra work and changes in scope of work are included in revenues when collection is determined to be probable.
We have not experienced material losses from uncollected receivables. Our principal customers are major and independent oil and gas companies and their affiliates. The concentration of customers in the energy industry may impact our overall credit exposure, either positively or negatively, since these customers may be similarly affected by changes in economic or other conditions. However, management believes that the diversification of our portfolio of receivables within the energy industry reduces any potential credit risk associated with any particular customer.
3. PROPERTY AND EQUIPMENT:
Property and equipment consists of the following (in thousands):
HORIZON OFFSHORE, INC. AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (CONTINUED)
4. NOTES PAYABLE:
Notes payable consist of the following (in thousands):
LOAN FACILITIES
In December 1998, we entered into a term loan agreement with The CIT Group, Inc. providing for a $60.0 million term loan at a rate of LIBOR plus 2.65%. In December 1998, we borrowed $50.0 million. During 1999, our term loan was amended to increase the amount that could be borrowed to $83.3 million, and we borrowed an additional $33.3 million. During 2000, our term loan was amended to increase the amount that could be borrowed to $91.4 million, and we borrowed an additional $8.1 million. Outstanding borrowings under our term loan at December 31, 2000 were $75.7 million. Our term loan is secured by mortgages on all vessels. During March 2001, we paid $30 million to reduce the outstanding principal balance under our term loan, which is subject to a penalty of up to 3% of the pre-payment for the early extinguishment of debt. Outstanding borrowings under our term loan at March 31, 2001 were $43.1 million. Our total borrowings currently require a $411,000 monthly principal payment. The loan agreement with The CIT Group, Inc. will mature at various dates between December 31, 2005 and May 31, 2006.
At December 31, 2000, we had $9.2 million in cash and $13.4 million outstanding under a $30.0 million revolving credit facility with Wells Fargo Bank. Outstanding borrowings bore interest at LIBOR plus 2.0% and were secured by accounts receivable from customers. There were no additional borrowings available under the Wells Fargo borrowing base calculation at December 31, 2000. In March 2001, we replaced the $30.0 million revolving credit facility with Wells Fargo Bank by entering into a $25.0 million revolving line of credit with a syndicate agented by Southwest Bank of Texas. The Southwest Bank facility matures on April 3, 2003, and currently bears interest at LIBOR plus 2.0% and is secured by accounts receivable from customers.
HORIZON OFFSHORE, INC. AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (CONTINUED)
4. NOTES PAYABLE: (CONTINUED) Our term loan and revolving credit facility require that certain conditions be met in order for us to obtain advances. Our term loan is secured by mortgages on all vessels. Our revolving credit facility is secured by accounts receivable. Advances under our current credit facility may be obtained in accordance with a borrowing base defined as a percentage of accounts receivable balances. Both the term loan and revolving credit facility contain customary defaults and require us to maintain certain financial ratios. The term loan and revolving credit facility also contain certain covenants that limit our ability to incur additional debt, pay dividends, create certain liens, sell assets and make capital expenditures. We were in compliance with all loan covenants as of December 31, 2000.
Maturities of long-term debt for each of the years ending December 31 are as follows (in thousands):
5. INCOME TAXES:
Our provision for income taxes in the 2000 statement of operations excludes $743,000 of deferred tax provision that is presented in the cumulative effect of a change in accounting principle. Total tax expense for the years ended December 31, 2000, 1999 and 1998 consists of (in thousands):
The income tax expense for the years ended December 31, 2000, 1999 and 1998 differs from the amount computed by applying the statutory federal income tax rate of 34 percent to consolidated income before income taxes as follows (dollars in thousands):
HORIZON OFFSHORE, INC. AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (CONTINUED)
5. INCOME TAXES: (CONTINUED) The tax effects of the temporary differences that give rise to the significant portions of the deferred tax assets and liabilities are presented below (in thousands):
The realization of a significant portion of deferred tax assets is based in part on our estimates of the timing of reversals of certain temporary differences and on the generation of taxable income before such reversals. The net operating loss carryforwards of approximately $56.5 million at December 31, 2000 begin to expire in the year 2012. Our ability to utilize the net operating loss carryforwards could be limited by a change in ownership as defined by federal income tax regulations.
6. COMMITMENTS AND CONTINGENCIES:
LITIGATION
We are involved in various routine legal proceedings primarily involving claims for personal injury under the Jones Act and general maritime laws which we believe are incidental to the conduct of our business. We believe that these proceedings, individually and in the aggregate, if adversely determined, would not have a material adverse effect on our financial position and results of operations.
LEASES
We lease office space at various locations under operating leases that expire through 2008. Rental expense was $1.0 million for 2000, $0.7 million for 1999 and $0.6 million for 1998. Future minimum non-cancelable lease commitments under these agreements for the years ended December 31 are as follows (in thousands):
HORIZON OFFSHORE, INC. AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (CONTINUED)
6. COMMITMENTS AND CONTINGENCIES: (CONTINUED) INSURANCE
We participate in a retrospectively rated insurance agreement. In our opinion, we have adequately accrued for all liabilities arising from these agreements based upon the total incremental amount that would be paid based upon the with-and-without calculation assuming experience to date and assuming termination.
EMPLOYMENT AGREEMENTS
We have entered into employment agreements with four executive officers that expire beginning in April 2001 through August 2002 and we have purchased $5.0 million in "key-man" life insurance with respect to our Chief Executive Officer, for which Horizon is the named beneficiary.
7. EMPLOYEE BENEFIT PLAN:
We have a 401(k) Plan for all eligible employees and we make annual contributions to the plan, at the discretion of management. We contributed $247,000 of common stock to the plan during 2000, $238,000 of cash during 1999 and $123,000 of cash during 1998. We intend to make future contributions with Horizon common stock or cash.
8. STOCKHOLDERS' EQUITY:
PUBLIC OFFERINGS OF COMMON STOCK
In April 1998, we completed the Offering of 5,750,000 shares of common stock and received $68.6 million, net of $6.2 million of underwriting commissions and discounts and expenses. We used the net proceeds of the Offering to repay $23.8 million of outstanding subordinated notes, to acquire the STEPHANITURM, a 230-foot diving support vessel, for $18.3 million, and used the remaining net proceeds to expand our fleet.
In February 2001, we sold 3,800,000 shares of common stock in a secondary offering. We received $66.3 million after deducting the underwriting discount and expenses. We used $30.0 million to reduce indebtedness, $10.0 million to support the Cal Dive joint venture, and the remainder will be used for general corporate purposes, including funding capital expenditures to expand our operating capabilities and potential vessel acquisitions.
STOCK SPLIT
In January 1998, we effected a 220 for one stock split. The effect of the stock split has been retroactively reflected in the accompanying consolidated financial statements as of the earliest period.
STOCK OPTIONS
In January 1998, the board of directors and the stockholders approved the Stock Incentive Plan (the Plan). The Plan provides for the granting of stock options to directors, executive officers, other employees and certain non-employee consultants. The amended Plan has 2.4 million shares available for issuance as optioned shares and terminates in April 2009. The terms of the option awards (including vesting schedules) are established by the Compensation Committee of the board of directors, but generally vest over three years and unexercised options expire ten years from the date of issue. At December 31, 2000, we had options for 357,300 shares of common stock remaining to be issued under the plan.
HORIZON OFFSHORE, INC. AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (CONTINUED)
8. STOCKHOLDERS' EQUITY: (CONTINUED) Horizon follows Statement of Financial Accounting Standards (SFAS) No. 123, "Accounting for Stock-Based Compensation," which permits one of two methods of accounting for stock options. We have elected the method that only requires note disclosure of stock based compensation. Because of this election, we are required to account for our employee stock-based compensation plan under Accounting Principles Board (APB) Opinion No. 25 and its related interpretations. In accordance with APB No. 25, deferred compensation is recorded for stock-based compensation grants based on the excess of the estimated fair value of the common stock on the measurement date over the exercise price. The deferred compensation is amortized over the vesting period of each unit of stock-based compensation grant, which is generally three years. If the exercise price of the stock-based compensation grants is equal to the estimated fair value of Horizon's stock on the date of grant, no compensation expense is recorded.
The following pro forma information is required by SFAS No. 123, and has been determined as if Horizon had accounted for its employee stock options under the fair-value method as defined by SFAS No. 123. The fair value of these options was estimated at the date of grant using the Black-Scholes method assuming an option life of 10 years and no dividends as well as the following additional weighted average assumptions for 2000: volatility of 56.85%, risk-free interest rate of 6.77%, 1999: volatility of 53.22%, risk-free interest rate of 5.46%, and 1998: volatility of 39.94%, risk-free interest rate of 5.89%.
For purposes of pro forma disclosures, the estimated fair value of the option is amortized to expense over the vesting period of the options using the straight-line method. Horizon's pro forma information follows (in thousands except per share amount):
HORIZON OFFSHORE, INC. AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (CONTINUED)
8. STOCKHOLDERS' EQUITY: (CONTINUED) The following table summarizes activity under the Plan for the years ended December 31, 2000, 1999 and 1998:
The following table summarizes information on stock options outstanding and exercisable as of December 31, 2000, pursuant to the Plan:
TREASURY STOCK
In July 1998, the board of directors approved the repurchase of up to $10.0 million of outstanding common stock. Shares have been purchased from time to time, subject to market conditions, in the open market or in privately negotiated transactions. As of December 31, 1999, we had repurchased 1,158,800 shares of common stock for a total cost of $7.6 million, and we re-issued 133,300 shares of treasury stock in connection with the purchase of the BRAZOS HORIZON. As of December 31, 2000, treasury stock consisted of 1,003,400 shares at a cost of $6.6 million, following the issuance of 22,100 shares for the Company's 401(k) contributions in 2000. Treasury stock is stated at the average cost basis.
EARNINGS PER SHARE
Earnings per share data for all periods presented has been computed pursuant to Statement of Financial Accounting Standards ("SFAS") No. 128, "Earnings Per Share" that requires a presentation of basic earnings per share (basic EPS) and diluted earnings per share (diluted EPS). Basic EPS excludes dilution and is determined by dividing income available to common stockholders by the weighted average number of common shares outstanding during the period. Diluted EPS reflects the
HORIZON OFFSHORE, INC. AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (CONTINUED)
8. STOCKHOLDERS' EQUITY: (CONTINUED) potential dilution that could occur if securities and other contracts to issue common stock were exercised or converted into common stock.
The following table presents information necessary to calculate earnings per share for the three years ended December 31, 2000:
9. RELATED PARTY TRANSACTIONS:
In August 1998, we entered into a master services agreement with Odyssea Marine, Inc. (Odyssea), an entity wholly owned by the Principal Stockholders, to charter certain marine vessels from Odyssea. As of December 31, 2000, we owed Odyssea $0.3 million for charter services compared to $30,000 at December 31, 1999. During 2000, Odyssea billed Horizon $11.3 million and Horizon paid Odyssea $11.0 million for services rendered under the agreement. In management's opinion, the transactions were effected on terms similar to those which could have been obtained from unaffiliated third parties.
10. QUARTERLY RESULTS OF OPERATIONS (UNAUDITED):
The marine construction industry in the Gulf of Mexico is seasonal, with contracts being awarded in the spring and early summer and the work being performed before the onset of adverse winter weather conditions. Seasonality and adverse weather conditions historically have resulted in lower revenues in the fourth and first quarters. Full year results are not a direct multiple of any quarter or combination of quarters because of this seasonality.
HORIZON OFFSHORE, INC. AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (CONTINUED)
10. QUARTERLY RESULTS OF OPERATIONS (UNAUDITED): (CONTINUED) The following table sets forth selected quarterly information for 2000 and 1999. We believe that all necessary adjustments have been included in the amounts stated below to present fairly the results of such periods.
SIGNATURES
Pursuant to the requirements of Section 13 or 15(d) of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on our behalf by the undersigned, thereunto duly authorized on March 31, 2001.
Pursuant to the requirements of the Securities Exchange Act of 1934, this report has been signed below by the following persons on behalf of the registrant and in the capacities and on the dates indicated.
S-1
EXHIBIT INDEX
E-1
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(1) Incorporated by reference to the Company's Registration Statement on Form S-1 (Registration Statement No. 333-43965).
(2) Incorporated by reference to the Company's Quarterly Report on Form 10-Q for the quarter ended March 31, 2000.
(3) Incorporated by reference to the Company's Quarterly Report on Form 10-Q for the quarter ended June 30, 2000.
(4) Incorporated by reference to the Company's Quarterly Report on Form 10-Q for the quarter ended September 30, 2000.
(5) Incorporated by reference to the Company's Annual Report on Form 10-K for the year ended December 31, 1999.
(6) Incorporated by reference to the Company's Annual Report on Form 10-K for the year ended December 31, 1998.
(7) Filed herewith
* Management Contract or Compensatory Plan or Arrangement.
E-2