UNITED STATES
SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549

Form 10-K

þ		Annual Report Pursuant To Section 13 or 15(d) of the Securities Exchange Act of 1934

o		Transition Report Pursuant to Section 13 or 15(d) of the Securities Exchange Act of 1934

Global Industries, Ltd.

(Exact Name of Registrant as Specified in Its Charter)

Louisiana		72-1212563
(State or Other Jurisdiction of		(I.R.S. Employer Identification Number)
Incorporation or Organization)
8000 Global Drive
Carlyss, Louisiana		70665
(Address of Principal Executive Offices)		(Zip Code)

Registrant’s telephone number, including area code: (337) 583-5000

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

Title of each class		Name of each exchange on which registered
Common Stock ($0.01 par value)		The NASDAQ Global Select Market LLC

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

None
(Title of Class)

Indicate by check mark if the registrant is a well-known seasoned issuer, as defined in Rule 405 of the Securities Act.

YES þ NO o

Indicate by check mark whether the registrant is not required to file reports pursuant to Section 13 or Section 15(d) of the Act.

YES o NO þ

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 þ NO o

Indicate by check mark whether the registrant has submitted electronically and posted on its corporate website, if any, every Interactive Data File required to be submitted and posted 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 and post such files).

YES o NO o

Indicate by check mark if disclosure of delinquent filers pursuant to Item 405 of Regulation S-K is not contained herein, and will not be contained, to the best of registrant’s knowledge, in definitive proxy or information statements incorporated by reference in Part III of this Form 10-K or any amendment to this Form 10-K. o

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

Large Accelerated Filer þ		Accelerated Filer o		Non-accelerated Filer o		Smaller Reporting Company o
				(Do not check if Smaller reporting company)

Indicate by check mark whether the registrant is a shell company (as defined in Exchange Act Rule 12b-2).

YES o NO þ

The aggregate market value of the voting and non-voting stock held by non-affiliates of the registrant as of June 30, 2009 was $610,586,825 based on the last reported sales price of the Common Stock on June 30, 2009 on the NASDAQ Global Select Market.

The number of shares of the registrant’s Common Stock outstanding as of February 23, 2010, was 113,842,977.

 

 

Portions of the definitive Proxy Statement for the Annual Meeting of Shareholders to be held May 19, 2010 are incorporated by reference into Part III hereof.

GLOBAL INDUSTRIES, LTD.
TABLE OF CONTENTS

FORM 10-K

PART I
Item 1.		Business			6
Item 1A.		Risk Factors			13
Item 1B.		Unresolved Staff Comments			21
Item 2.		Properties			21
Item 3.		Legal Proceedings			26
Item 4.		Submission of Matters to a Vote of Security Holders			27
Item (Unnumbered).		Executive Officers of the Registrant			27
PART II
Item 5.		Market for the Registrant’s Common Equity, Related Stockholder Matters and Issuer Purchases of Equity Securities			30
Item 6.		Selected Financial Data			31
Item 7.		Management’s Discussion and Analysis of Financial Condition and Results of Operations			32
Item 7A.		Quantitative and Qualitative Disclosures About Market Risk			51
Item 8.		Financial Statements and Supplementary Data
		Report of Independent Registered Public Accounting Firm			53
		Consolidated Balance Sheets — December 31, 2009 and 2008			54
		Consolidated Statements of Operations — Years Ended December 31, 2009, 2008, and 2007			55
		Consolidated Statements of Shareholders’ Equity — Years Ended December 31, 2009, 2008, and 2007			56
		Consolidated Statements of Cash Flows — Years Ended December 31, 2009, 2008, and 2007			57
		Notes to Consolidated Financial Statements			58
Item 9.		Changes in and Disagreements With Accountants on Accounting and Financial Disclosure			91
Item 9A.		Controls and Procedures			91
		Management’s Report on Internal Control over Financial Reporting			91
PART III
Item 10.		Directors, Executive Officers, and Corporate Governance			95
Item 11.		Executive Compensation			95
Item 12.		Security Ownership of Certain Beneficial Owners and Management and Related Stockholder Matters			95
Item 13.		Certain Relationships and Related Transactions and Director Independence			95
Item 14.		Principal Accountant Fees and Services			95
PART IV
Item 15.		Exhibits and Financial Statement Schedules			96
		Signatures			101
EX-10.56
EX-10.57
EX-10.58
EX-21.1
EX-23.1
EX-31.1
EX-31.2
EX-32.1
EX-32.2

FORWARD-LOOKING STATEMENTS

We are including the following discussion to generally inform our existing and potential security holders of some risks and uncertainties that can affect us and to take advantage of the “safe harbor” protection for forward-looking statements that applicable federal securities law affords.

From time to time, our management or persons acting on our behalf make forward-looking statements within the meaning of Section 27A of the Securities Act of 1933, as amended, and Section 21E of the Securities Exchange Act of 1934, as amended, to inform existing and potential security holders about us. These statements may include projections and estimates concerning the timing and success of specific projects and our future backlog, revenues, income, and capital spending. Forward-looking statements are generally accompanied by words such as “estimate,” “project,” “believe,” “expect,” “anticipate,” “plan,” “goal,” or other words that convey uncertainty of future events or outcomes.

In addition, various statements in this Annual Report on Form 10-K (the “Annual Report”), including those that express a belief, expectation or intention, as well as those that are not statements of historical fact, are forward-looking statements. In this Annual Report, forward-looking statements appear under “Business” in Item 1 of Part I, “Management’s Discussion and Analysis of Financial Condition and Results of Operations” in Item 7 of Part II, in the “Notes to Consolidated Financial Statements” in Item 8 of Part II, and elsewhere. These forward-looking statements speak only as of the date of this Annual Report. We disclaim any obligation to update these statements unless required by securities law, and we caution you not to rely on them unduly. We have based these forward-looking statements on our current expectations and assumptions about future events. While our management considers these expectations and assumptions to be reasonable, they are inherently subject to business, economic, competitive, regulatory, and other risks, contingencies and uncertainties, most of which are difficult to predict and many of which are beyond our control. These risks, contingencies and uncertainties relate to, among other matters, the following:

	•		the level of capital expenditures in the oil and gas industry;
	•		general economic and business conditions and industry trends;
	•		risks inherent in doing business abroad;
	•		operating hazards related to working offshore;
	•		our dependence on significant customers;
	•		the level of offshore drilling activity;
	•		possible construction delays or cost overruns related to construction projects;
	•		our ability to attract and retain skilled workers;
	•		environmental matters;
	•		changes in laws and regulations;
	•		the effects of resolving claims and variation orders;
	•		adverse outcomes from legal and regulatory proceedings;
	•		our ability to obtain surety bonds, letters of credit and financing;
	•		our availability of capital resources;
	•		our ability to obtain new project awards;
	•		delays or cancellation of projects included in backlog;
	•		fluctuations in the prices of or demand for oil and gas;
	•		our ability to comply with covenants in our credit agreements and other debt instruments and availability, terms and deployment of capital; and
	•		foreign exchange, currency, and interest rate fluctuations.

We believe the items we have outlined above are important factors that could cause actual results to differ materially from those expressed in a forward-looking statement made in this report or elsewhere by us or on our behalf. We have discussed many of these factors in more detail elsewhere in this report. These factors are not necessarily all of the important factors that could affect us. Unpredictable or unanticipated factors we have not discussed in this report could also have material adverse effects on actual results of matters that are the subject of our forward-looking statements. We do not intend to

update our description of important factors each time a potential important factor arises, except as required by applicable securities laws and regulations. We advise our security holders that they should (1) be aware that important factors not referred to above could affect the accuracy of our forward-looking statements and (2) use caution and common sense when considering our forward-looking statements.

PART I

ITEM 1.		BUSINESS

We provide worldwide construction and subsea services including pipeline construction, platform installation and removal, project management, construction support, diving services, diverless intervention, and marine support services to the offshore oil and gas industry primarily in selected international areas and the United States Gulf of Mexico. Unless the context indicates otherwise, all references to “we,” “us,” “our,” or “the Company” refer to Global Industries, Ltd. and its consolidated subsidiaries.

Segments of Business

Our worldwide business is divided into six reportable segments: North America Offshore Construction Division, North America Subsea, Latin America, West Africa, Middle East, and Asia Pacific/India. For additional segment information, please refer to the narrative and tabular descriptions of our segments and operating results under “Management’s Discussion and Analysis of Financial Condition and Results of Operations” in Item 7 of Part II of this Annual Report and under Note 17 “Industry, Segment and Geographic Information” in Item 8 of Part II of this Annual Report.

DESCRIPTION OF OPERATIONS

We and our predecessors began as a provider of diving services to the offshore oil and gas industry in 1974 and formed Global Industries, Ltd. in 1990 under the corporate laws of Louisiana. Over the years we have used selective acquisitions, new construction, and upgrades to expand our operations and assets. On December 31, 2009, our fleet included eight derrick lay barges (DLBs), one heavy lift ship, one pipelay barge, four multi-service vessels (MSVs), three dive support vessels (DSVs), one offshore supply vessel (OSV), and one cargo barge. Our major construction vessels, which include nine barges and one ship, have various combinations of pipelay, pipe bury, derrick, dive support and deepwater lowering capabilities. Presently, two pipelay/derrick vessels, the Global 1200 and Global 1201, are under construction with expected delivery dates in 2010 and 2011, respectively.

We are a leading offshore construction company offering a comprehensive and integrated range of marine construction and support services in the North America, Latin America, West Africa, Middle East, and Asia Pacific/India regions. These services include pipeline construction, platform installation and removal, project management, construction support, diving services, diverless intervention, and marine support services.

We are equipped to provide services from shallow water to water depths of up to 10,000 feet. As exploration companies have made considerable commitments and expenditures for production in water depths over 1,000 feet, we have invested in vessels, equipment, technology, and skills to increase our abilities to provide services in this growing deepwater market.

Our business consists of two principal activities:

	•		Offshore Construction Services, which include pipeline construction and platform installation and removal services; and
	•		Subsea Services, which include diving and diverless intervention, SURF (subsea equipment, umbilical, riser, and flow line), and support services for construction.

For financial information regarding our operating segments and the geographic areas in which we operate, please read Note 17 “Industry, Segment and Geographic Information” in Item 8 of Part II of this Annual Report.

Offshore Construction Services

Our offshore construction services include pipelay, derrick, project management, and related services. We are capable of installing steel pipe by either the conventional or the reel method of pipelaying using

either manual or automatic welding processes. With the conventional method, 40-foot to 60-foot segments of up to 60-inch diameter pipe are welded together, non-destructive tested and corrosion coated on the deck of the pipelay vessel. Each segment of pipe is connected to the prior segment of pipe and then submerged in the water as the vessel is moved forward by its anchor winches or, in some instances, onboard thrusters. This process is repeated until the desired length of pipe has been laid. In good weather conditions and shallow water, our vessels can install approximately 400 feet per hour of small diameter pipe using the conventional pipelay method. As pipe diameter increases, water depth increases, or weather conditions become less favorable, our rate of pipeline installation declines. The conventional method of pipeline construction is still the preferred method for laying pipelines in certain situations, especially in shallow water where pipeline burying is required and can be performed simultaneously with the laying of pipe. We have the ability to install pipelines using the conventional method in the U.S. Gulf of Mexico, Latin America, West Africa, Middle East, and Asia Pacific/India. Three of our offshore construction vessels employ dynamic positioning technology, which uses onboard thrusters in conjunction with global positioning system technology to enable a vessel to remain on station or move with precision without the use of anchors.

We are also capable of installing pipelines using the reel method of pipeline construction. Under the reel method, welding and testing are performed onshore, and then the pipe is spooled in one continuous length onto a large reel on a specially designed major construction vessel. Once the vessel is in the proper position offshore, the pipe is unreeled onto the ocean floor as the vessel moves forward. This method of pipeline construction is generally used for pipelines with diameters of 12.0 inches or less and is especially well suited for deep water where pipeline burying is not required and for seasons with inclement weather since offshore installation can be performed quickly between periods of rough weather. The pipeline construction services that we perform by the reel method are primarily performed in the U.S. Gulf of Mexico.

All of our major construction vessels are equipped with cranes designed to lift and place equipment into position for installation. Seven of these vessels are capable of lifts of 500 tons or more, making them suitable for very heavy lifts such as offshore platform installations. In addition, the vessels can be used to disassemble and remove platforms and prepare them for salvage or refurbishment. In the Gulf of Mexico, the United States Department of Interior Minerals Management Service (MMS) regulations require platforms to be removed within twelve months after production ceases and require the site be restored to meet stringent standards. According to the MMS, in January 2010 there were approximately 3,700 platforms on active leases in U.S. waters of the Gulf of Mexico.

Subsea Services

Demand for subsea services covers the full life cycle of an offshore oil and gas property, including:

	•		supporting exploration;
	•		supporting platform and pipeline installation;
	•		performing periodic inspections of pipelines and platforms;
	•		performing repairs and maintenance to pipelines and platforms;
	•		supporting SURF (subsea equipment, umbilical, riser and flow line);
	•		providing remotely operated vehicle (ROV) services, and
	•		performing salvage and site clearance services.

To support our subsea operations, we operate a fleet of three DSVs and four MSVs. We also have two 200-horsepower work class ROVs that can operate in water depths up to 10,000 feet. In 2009, we began construction on two saturation diving systems, with expected completion in 2010 and 2011.

In the Gulf of Mexico, the United States Department of Interior Minerals Management Service (MMS) requires the burial of all offshore oil and gas pipelines greater than 8.75 inches in diameter and located in water depths of 200 feet or less. We believe we have the equipment and expertise necessary to assist our customers with compliance with these MMS regulations. Regulations also require that these pipelines be periodically inspected, repaired, and if necessary, reburied. Inspection requires extensive diving or ROV services, and rebury requires either hand-jetting by divers or the use of one of our major

construction vessels and a jet sled (a large machine, typically towed behind a major construction vessel, which uses powerful streams of water to bury a pipeline as the vessel moves forward).

For the Gulf of Mexico, the MMS requires that all offshore structures have extensive and detailed inspections for corrosion, metal thickness, and structural damage every five years. As the age of the offshore infrastructure increases, we anticipate demand for inspections, repairs, and wet welding technology to remain steady over the next three to five years.

For subsea projects involving long-duration and deepwater dives, we use saturation diving systems that maintain an environment for the divers at the subsea water pressure at which they are working until the job is completed. Saturation diving allows divers to make repeated dives without decompressing, which reduces the time necessary to complete the job and reduces the diver’s exposure to the risks associated with frequent decompression. At December 31, 2009, we had ten saturation diving systems available for use. Our pipelay and derrick operations create captive demand for our saturation diving services. This ability to offer our divers saturation diving work helps us to attract and retain qualified and experienced divers.

We utilize wet underwater welding techniques in our Subsea Services. Underwater welds are made by two methods: dry hyperbaric welding and wet welding. In dry hyperbaric welding, a customized, watertight enclosure is engineered and fabricated to fit the specific requirements of the structural joint or pipeline requiring repairs. The enclosure is lowered into the water, attached to the structure or pipeline, and then the water is evacuated, allowing divers to enter the enclosure and perform dry welding repairs. Wet welding is accomplished while divers are in the water, using specialized welding rods. Wet welding is less costly because it eliminates the need to construct an expensive, customized, single-use enclosure.

Business Strategy

In 2010, we plan to concentrate on strengthening our core business by focusing on:

	•		business development and backlog accumulation,
	•		retention and hiring of key personnel,
	•		cost management,
	•		successful project execution, and
	•		successful integration of the Global 1200 into our fleet.

We also intend to broaden our business segments with emphasis on deepwater/SURF; integrated projects; inspection, repair and maintenance (IRM); and decommissioning/plug and abandonment.

Raw Materials

Our offshore construction activities require raw materials, such as carbon and alloy steels in various forms, welding gases, paint, fuels and lubricants, which are available from many sources. We do not depend on a single supplier or source for any of these materials. Although shortages of some of these materials and fuels have existed from time to time, no material shortage currently exists nor do we anticipate any. However, steel prices are volatile, and shortages may occur from time to time.

Customers and Contracts

Our customers are primarily oil and gas producers and pipeline companies. During the year ended December 31, 2009, we provided offshore marine construction services to approximately sixty customers. Seven customers accounted for at least 10% each of consolidated revenues in at least one of the years ended December 31, 2009, 2008, and 2007.

		2009				2008				2007
Customer		%				%				%
Chevron			15	%			15	%			14	%
Petroleo Brasileiro S.A. (Petrobras)			13	%			14	%			—
Petroleos Mexicanos (PEMEX)			12	%			10	%			23	%
Mobile Producing Nigeria			12	%			1	%			—
PT Transportasi Gas Indonesia			10	%			—				—
Saudi Aramco			8	%			14	%			4	%
Oil and Natural Gas Corporation Limited (India)			—				10	%			4	%

The loss of one of these customers could have a material adverse effect on our future operating results.

The level of construction services required by any particular customer depends on the size of that customer’s capital expenditure budget devoted to construction projects in a particular year. Consequently, customers that account for a significant portion of revenues in one fiscal year may represent an immaterial portion of revenues in subsequent fiscal years. Our traditional contracts in North America are typically of short duration, ranging from one to five months. Engineering, Procurement, Installation and Commissioning contracts (EPIC), turnkey contracts, and certain international contracts may be performed over longer time periods exceeding one year.

Contracts for work in North America are typically awarded on a competitive bid basis with customers usually requesting bids on projects one to three months prior to commencement. However, for projects in water depths greater than 1,000 feet, turnkey projects, and projects in international areas, the elapsed time from bid request to commencement of work may exceed one year. Our business development staff contacts offshore operators known to have future projects scheduled to ensure that we have an opportunity to bid for these projects. Most contracts are awarded on a fixed-price basis, but we also perform work on a cost-plus, unit rate or day-rate basis, or on a combination of such bases. We attempt to qualify our contracts so we can recover the costs of certain unexpected difficulties that are not within our operating control and the costs of weather-related delays.

Competition

In each region of the world in which we operate, the offshore marine construction industry is highly competitive. Price competition and contract terms are the primary factors in determining which qualified contractor is awarded a job. However, the ability to deploy modern equipment and techniques, to attract and retain skilled personnel, and to demonstrate a good safety record have also been important competitive factors.

Major international competitors include Acergy S.A., Allseas Marine Contractors, S.A., Clough Limited, Dynamic Industries, Inc., J. Ray McDermott, S.A., Leighton International, Saipem S.p.a., Subsea 7, Technip, S.A., and Swiber Holdings Limited. Some of these international competitors also bid and compete for projects in North America. In addition, internationally, there are numerous other regionalized competitors with whom we compete directly. Competition for deepwater projects in North America includes Allseas Marine Contractors, S.A., Helix Energy Solutions Group, Inc., and J. Ray McDermott, S.A. Our competitors for shallow and intermediate water projects in North America include Cal Dive International and many smaller companies including Bisso Marine Company, Chet Morrison Contractors, Inc., and Offshore Specialties Fabricators, Inc. Many shallow and intermediate water companies compete primarily based on price.

Backlog

Our backlog of construction contracts includes signed contracts, letters of intent that are not materially qualified or contingent, and change orders to the extent of the lower of cost incurred or probable recovery. As of December 31, 2009, our backlog amounted to approximately $103.8 million ($82.9 million for international operations and $20.9 million for North America), compared to our backlog at December 31, 2008 of $519.6 million ($489.8 million for international operations and $29.8 million for North America). The majority of our backlog as of December 31, 2009 is scheduled to be performed during 2010. Due to the prevalence of day-rate and short-term contractual arrangements in North America, our backlog does not provide a good indication of the level of demand for our services in this region. We do not consider the backlog amounts in any region to be a reliable indicator of future earnings.

Factors Affecting Demand

Our level of offshore construction activity primarily depends upon the capital expenditures of oil and gas companies and foreign governments for construction services associated with offshore oil and gas exploration, development, and production projects. Numerous factors influence these expenditures, including:

	•		oil and gas prices, along with expectations about future prices;
	•		the cost of exploring for, producing, and delivering oil and gas;
	•		the terms and conditions of offshore leases;
	•		the discovery rates of new oil and gas reserves in offshore areas;
	•		the ability of businesses in the oil and gas industry to raise capital; and
	•		local and international political and economic conditions.

Please read Item 1A, “Risk Factors,” for further information on factors affecting demand.

Patents

We do not own or license any patents that are essential to our business.

Employees

Our work force varies based on our workload at any particular time. During 2009, the number of our employees, not including subcontractors, ranged from 2,793 to 3,896. As of December 31, 2009, we had 2,793 employees. None of our employees is covered by a collective bargaining agreement, other than a group of offshore employees in Mexico. We believe that our relationship with our employees is satisfactory.

Seasonality

Each of the geographical areas in which we operate has seasonal patterns that affect our operating patterns. Our operating patterns are primarily related to the offshore weather conditions where our projects are performed. In general, our offshore operations are disrupted when seasonal winds or currents, which may vary by country or location within our operating segments, make the seas too rough for our vessels to work safely and efficiently.

Financial Information about Geographic Areas

For financial information about our geographic areas of operation, please see “Management’s Discussion and Analysis of Financial Condition and Results of Operations — Results of Operations”, which presents revenue and long-lived assets attributable to each of our geographic areas for the years ended December 31, 2009, 2008 and 2007. For a discussion of risks attendant to our foreign operations, see the discussion in Item 1A, “Risk Factors” under the heading “Our international operations expose us to additional risks inherent in doing business abroad.”

Government Regulation and Environmental Matters

Many aspects of the offshore marine construction industry are subject to extensive governmental regulation. In the United States, we are subject to the jurisdiction of the United States Coast Guard, the United States Environmental Protection Agency, the National Transportation Safety Board and the United States Customs and Border Protection (“CBP”), as well as private industry organizations such as the American Bureau of Shipping. The Coast Guard and the National Transportation Safety Board set safety standards and are authorized to investigate vessel accidents and recommend improved safety standards, and the CBP is authorized to inspect vessels at will.

We are required by various governmental and quasi-governmental agencies to obtain certain permits, licenses, and certificates with respect to our operations. The kind of permits, licenses, and certificates required in our operations depends upon a number of factors. We believe that we have obtained or can obtain all permits, licenses, and certificates necessary to conduct our business.

We depend on the demand for our services from the oil and gas industry and, therefore, laws and regulations, as well as changing taxes and policies relating to the oil and gas industry, affect our business. In particular, the exploration and development of oil and gas properties located on the Outer Continental Shelf of the United States is regulated primarily by the MMS.

Our operations also are affected by numerous federal, state, and local laws and regulations relating to protection of the environment including, in the United States, the Outer Continental Shelf Lands Act, the Federal Water Pollution Control Act of 1972, and the Oil Pollution Act of 1990. The technical requirements of these laws and regulations are becoming increasingly complex and stringent, and compliance may become increasingly difficult and expensive. However, we believe that compliance with current environmental laws and regulations is not likely to have a material adverse effect on our business or financial statements. Certain environmental laws provide for “strict liability” for remediation of spills and releases of hazardous substances and some provide liability for damages to natural resources or threats to public health and safety. Sanctions for noncompliance may include revocation of permits, corrective action orders, administrative or civil penalties, and criminal prosecution. Our compliance with these laws and regulations has entailed certain changes in our operating procedures and approximately $0.5 million in expenditures during 2009. It is possible that changes in the environmental laws and enforcement policies thereunder or claims for damages to persons, property, natural resources, or the environment could result in substantial costs and liabilities to us. Our insurance policies provide liability coverage for sudden and accidental occurrences of pollution and/or clean up and containment of the foregoing in amounts that we believe are adequate.

Certain ancillary activities related to the offshore construction industry, especially the transportation of personnel and equipment between port and the field of work offshore, constitute “coastwise trade” within the meaning of federal maritime regulations. We are also subject to regulation by the United States Maritime Administration (MarAd), the Coast Guard, and the Customs Services. Under these regulations, only vessels owned by United States citizens that are built and registered under the laws of the United States may engage in “coastwise trade.” Certain provisions of our Articles of Incorporation are intended to aid in compliance with the foregoing requirements regarding ownership by persons other than United States citizens.

In 2009, the CBP published a general notice regarding proposed changes in its interpretation of the United States cabotage law generally referred to as the Jones Act or coastwise trade. This notice was withdrawn after the conclusion of the public comment period on the proposed changes to interpretation of law and previous ruling letters issued by CBP. We operate within the current interpretation of the Jones Act with respect to foreign flagged vessels in the United States Gulf of Mexico. The CBP may republish a revised notice of changes in its interpretation of the Jones Act and previous ruling letters. Significant changes to the interpretation of the Jones Act and previous CBP ruling letters could affect our ability to operate, or competitively operate, our foreign flagged vessels in the United States and may require us to move certain of our vessels to areas outside of the United States to operate. In 2009, we complied with the International Ship and Port Facility Security Code (ISPS) as mandated by the Homeland Security Act of 2002. Under the ISPS, we performed worldwide security assessments, plans,

risk analyses, and other requirements on our vessels and port facilities and completed the process of installing Automated Identification Systems on all vessels that are required to have it.

AVAILABLE INFORMATION

We electronically file certain documents with, or furnish such documents to, the Securities and Exchange Commission (SEC), including annual reports on Form 10-K, quarterly reports on Form 10-Q, and current reports on Form 8-K, along with any related amendments and supplements thereto. From time to time, we may also file registration and related statements pertaining to equity or debt offerings. You may read and copy any materials we file with the SEC from the SEC’s Public Reference Room located at 100F Street, NE, Washington, DC 20549. You may obtain information regarding the Public Reference Room by calling the SEC at 1-800-SEC-0330. In addition, the SEC maintains an internet website, www.sec.gov, which contains reports, proxy, information statements, and other information regarding issuers that file or furnish documents electronically with the SEC.

We provide free electronic access to our annual, quarterly, and current reports (and all amendments to these reports) on our internet website, www.globalind.com. These reports are available on our website as soon as reasonably practicable after we electronically file or furnish such materials with or to the SEC. Information on our website does not constitute part of this Annual Report. You may also contact our Investor Relations Department at 281-529-7979 for copies of these reports free of charge.

ITEM 1A.		RISK FACTORS

You should carefully consider each of the following risks and uncertainties associated with the Company and the ownership of our securities. Additional risks and uncertainties not presently known to us or that we currently deem immaterial may also impair our business and/or financial performance.

Our business is substantially dependent on the level of capital expenditures in the oil and gas industry, and lower capital expenditures will adversely affect our results of operations.

The demand for our services depends on the condition of the oil and gas industry and, in particular, on the capital expenditures of companies engaged in the offshore exploration, development, and production of oil and natural gas. Capital expenditures by these companies are primarily influenced by:

	•		general economic conditions;
	•		the demand for oil and natural gas;
	•		the cost of exploring for, producing and delivering oil and natural gas;
	•		expectations regarding future commodity prices;
	•		the need to maintain, repair, and replace existing pipelines and structures to extend the life of production;
	•		the need to clear structures from the lease once the oil and gas reserves have been depleted; and
	•		weather events, such as major tropical storms or hurricanes.

Historically, prices of oil and natural gas and offshore exploration, development, and production have fluctuated substantially. Climate change regulation and public attitudes about the use of carbon based energy sources could result in decreased demand for oil and natural gas adversely affecting our future results of operations. A sustained period of substantially reduced capital expenditures by oil and gas companies will result in decreased demand for our services, low margins, and possibly net losses.

Economic conditions could negatively impact our business.

The effects of the economic crisis, which began in 2008, remain and the return to consistent and sustained growth is not yet certain. Continued prolonged periods of little or no economic growth will further decrease demand for oil and natural gas, which could result in lower prices for crude oil and natural gas and therefore, lower demand and potentially lower pricing for our services. If economic conditions deteriorate for prolonged periods or do not improve, our results of operations and cash flows would be adversely affected. Crude oil and natural gas prices have increased during 2009 but are still significantly below their historic highs in July 2008. These price declines contributed to the reduction of drilling activity and demand for our services from the levels experienced during 2007 and early 2008. In addition, most of our customers are involved in the energy industry, and if a significant number of them experience a prolonged business decline or disruption as a result of economic slowdown or lower crude oil and natural gas prices, we may incur increased exposure to credit risk and bad debts, which could negatively impact our cash flows.

Volatility and uncertainty of the credit markets may negatively impact us.

The impact of the recent economic downturn in the global credit markets continues to significantly affect the availability of credit and financing costs for many of our customers. Many of our customers finance their offshore exploration and development programs through third-party lenders. The reduced availability and increased costs of borrowing could cause our customers to reduce their capital expenditures for offshore exploration and development, thereby reducing demand and potentially resulting in lower pricing for our services. Also, the current credit and economic environment could significantly impact the financial condition of some customers over a period of time, leading to business disruptions and restricting their ability to pay us for services performed, which could negatively impact our results of operations and cash flows.

We intend to finance our existing operations and initiatives with cash and cash equivalents, investments, cash flows from operations, and potential borrowings under our credit facilities. If adverse national and international economic conditions continue or deteriorate further, it is possible that we may not be able

to fully draw upon our existing credit facilities and we may not be able to obtain financing on favorable terms.

We depend on significant customers and a loss of any one of them could have a material adverse effect on our business and results of operations.

During the fiscal year ended December 31, 2009, five customers accounted for over 60% of our consolidated revenues. The loss of any of these customers, if not offset by contracts with new or other existing customers, could have a material adverse effect on our business and results of operations.

New capital asset construction projects are subject to risks, including delays and cost overruns, which could have a material adverse effect on our available cash resources and results of operations.

We are expanding our fleet with the construction of two new generation derrick/pipelay vessels, the Global 1200 and the Global 1201. These projects, and any other capital asset construction projects which we may commence, are subject to similar risks of delay or cost overruns inherent in any large construction project resulting from numerous factors, including the following:

	•		shortages of equipment, materials or skilled labor;
	•		unscheduled delays in the delivery of ordered materials and equipment;
	•		unanticipated cost increases;
	•		weather interferences;
	•		difficulties in obtaining necessary permits or in meeting permit conditions;
	•		design and engineering problems; and
	•		shipyard delays and performance issues.

Failure to complete new construction on time, or the inability to complete new construction in accordance with its design specifications, may, in some circumstances, result in loss of revenues, penalties, or delay, renegotiation or cancellation of a contract. In the event of termination of one of these contracts, we may not be able to secure a replacement contract on as favorable terms. Additionally, capital expenditures for construction projects could materially exceed our planned capital expenditures.

Our international operations expose us to additional risks inherent in doing business abroad.

A majority of our revenue is derived from operations outside the United States. The scope and extent of our operations outside of the U.S. Gulf of Mexico means we are exposed to the risks inherent in doing business abroad. These risks include:

	•		regional economic downturns;
	•		currency exchange rate fluctuations, devaluations, and restrictions on currency
			repatriation;
	•		unfavorable taxes, tax increases, and retroactive tax claims;
	•		the disruption of operations from labor and political disturbances;
	•		insurrection, war, or acts of terrorism that may disrupt markets;
	•		expropriation or seizure of our property;
	•		nullification, modification, renegotiation or unenforceability of existing contracts;
	•		import/export quotas and other forms of public and governmental regulation; and
	•		inability to obtain or retain licenses required for operations.

We cannot predict the nature of foreign governmental regulations applicable to our operations that may be enacted in the future. In many cases, our direct or indirect customer will be a foreign government, which can increase our exposure to these risks. U.S. government-imposed export restrictions or trade sanctions under the Export Administration Act of 2001, the Trading with the Enemy Act of 1917 or similar legislation or regulation also may impede our ability to expand our operations and bid for and accept work in specific countries that we might otherwise have the equipment and technical ability to

compete. These factors could have a material adverse effect on our financial condition, results of operation, and cash flows.

We are exposed to the substantial hazards and risks inherent in marine construction and our insurance coverage is limited.

Our business involves a high degree of operational risks. Hazards and risks that are inherent in marine operations include capsizing, grounding, colliding, and sustaining damage from severe weather conditions. To the extent that storms in the areas we operate are intensified or increase in number by global or regional climate changes, these risks are hightened. In addition, our construction work can disrupt existing pipeline, platforms, and other offshore structures. Any of these incidents could cause damage to or destruction of vessels, property or equipment, personal injury or loss of life, suspension of production operations, or environmental damage. The failure of offshore pipelines or structural components during or after our installation could also result in similar injuries or damages. Any of these events could result in interruption of our business or significant liability.

We cannot always obtain insurance for our operating risks, and it is not practical to insure against all risks in all geographic areas. Builders risk insurance is becoming increasingly expensive and coverage limits have been decreasing. Uninsured liabilities resulting from our operations may adversely affect our business and results of operations.

The implementation of our business strategy will expose us to additional operational risk.

An element of our business strategy is to broaden our business segments with emphasis on deepwater/SURF and integrated projects. As we begin to implement this part of our strategy, we will be exposed to additional operational risks inherent in these longer-term deepwater and integrated projects, such as harsh weather conditions, low productivity and project execution issues. The costs associated with the realization of these risks could have a material adverse effect on our financial condition, results of operations, and cash flows.

Our business is capital intensive and our ability to finance our business depends on generating sufficient cash flow from our operations.

As of December 31, 2009, our backlog of construction contracts amounted to $103.8 million compared to a backlog of $519.7 million as of December 31, 2008. We require substantial amounts of capital to fund our working capital, capital expenditures, and other cash needs. Our ability to generate cash depends on demand for construction services by the oil and gas industry as a result of the levels of capital expenditures by oil and gas companies and on competitive, general economic, financial, and many other factors that are beyond our control. Our ability to finance our business is also dependant upon our ability to execute projects successfully. We cannot provide assurance that we will always be able to generate sufficient operating cash flow to provide us with the working capital required to support our operations, and we may experience periodic cash demands that exceed our operating cash flow. Our failure to generate sufficient operating cash flow to provide adequate working capital would have a material adverse effect on our business, results of operations, and financial condition.

We have incurred losses in past years and may incur additional losses in the future which could adversely affect our operations.

We have incurred losses in past years and may have operating losses in the future if we cannot obtain sufficient work and complete projects within our cost estimates on fixed price or unit-rate contracts. Operating losses could have significant adverse effects on our future operations including limiting our ability to adjust to changing market conditions, reducing our ability to withstand competitive pressures, and impairing our ability to obtain financing to provide for future working capital needs and capital expenditures.

We may be unable to obtain critical project materials or services on a timely basis.

Our operations depend on our ability to procure on a timely basis project materials, such as pipe, or project services, such as tugboats for barges, to complete projects in an efficient manner. Our inability to timely procure these resources could have a material adverse effect on our business.

We are subject to risks associated with contractual pricing and may not complete fixed-price or unit-rate contracts within our original estimates of costs, which will adversely affect our results.

The offshore construction industry is highly competitive and, most of our projects are performed on a fixed-price or unit-rate basis. Our actual costs could exceed our projections. We attempt to recover increased costs of anticipated changes in offshore job conditions, weather, labor, equipment productivity, and third party costs, either through estimates of cost increases, which are reflected in the original contract price, or through change orders. Despite these attempts, however, the costs and profits we realize on fixed-price or unit-rate contracts could vary materially from estimated amounts. Cost overruns may result in reduced profit or increased losses on projects that could have a material adverse impact on our results of operations.

Our use of percentage-of-completion method of accounting could result in volatility in our results of operations.

We recognize revenues and profits under our long-term contracts in our segments on a percentage-of-completion basis. Accordingly, we review contract price and cost estimates periodically as the work progresses and reflect adjustments proportionate to the percentage of completion in income in the period when we revise those estimates. To the extent these adjustments result in a reduction or an elimination of previously reported profits with respect to a project, we would recognize a charge against current earnings, which could be material. Our current estimates of our contract costs and the profitability of our long-term projects, although reasonably reliable when made, could change as a result of the uncertainties associated with these types of contracts, and if adjustments to overall contract costs are significant, the reductions or reversals of previously recorded revenue and profits could be material in future periods.

Our industry is highly competitive.

Contracts for our services are generally awarded on a competitive bid basis, and price is a primary factor in determining who is awarded the project. Customers also consider availability and capability of equipment, reputation, experience, and the safety record of the contender in awarding jobs. During industry down cycles in particular, we may have to accept lower rates for our services and vessels or increased contractual liabilities which could result in lower profits or losses. As we have increased our operations in deeper waters and internationally, we have encountered additional competitors, many of whom have greater experience and greater resources than we do in these markets.

Additionally, our competitiveness in international markets may be adversely affected by regulations requiring, among other things, the awarding of contracts to local contractors, the employment of local citizens and/or the purchase of supplies from local vendors that favor or require local ownership.

We operate in countries where corrupt behavior exists that could impair our ability to do business in the future or result in significant fines or penalties.

We and our affiliates operate in countries where governmental corruption has been known to exist. While we are committed to conducting business in a legal and ethical manner, there is a risk of violating either the U.S. Foreign Corrupt Practices Act (“FCPA”) or laws or legislation promulgated pursuant to the 1997 OECD Convention on Combating Bribery of Foreign Public Officials in International Business Transactions or other applicable anti-corruption regulations that generally prohibit the making of improper payments to foreign officials for the purpose of obtaining or keeping business. Violation of these laws could result in monetary penalties against us and could damage our reputation and, therefore, our ability to do business. For information concerning our recently concluded investigation related to FCPA matters in West Africa, see Part II, Note 9 of the Notes to Consolidated Financial Statements.

Our internal controls may not be sufficient to achieve all stated goals and objectives.

Our internal controls and procedures were developed through a process in which our management applied its judgment in assessing the costs and benefits of such controls and procedures, which, by their nature, can provide only reasonable assurance regarding the control objectives. The design of any system of internal controls and procedures is based in part on various assumptions about the likelihood of future events, and we cannot assure you that any design will succeed in achieving its stated goals under all potential future conditions, regardless of how remote. Failure to maintain effective internal controls over financial reporting or disclosure controls and procedures could result in the loss of investor confidence in the reliability of our financial statements and public disclosure, which in turn could harm our business.

We have substantial funds held at domestic and foreign financial institutions that exceed the insurance coverage offered by the FDIC and foreign governments, the loss of which would have a severe negative effect on our operations and liquidity.

Although the FDIC insures deposits in banks and thrift institutions up to $250,000 per eligible account, the amount that we have deposited at certain banks substantially exceeds the FDIC limit. If any of the financial institutions where we have deposited funds were to fail, we may lose some or all of our deposited funds that exceed the FDIC’s $250,000 insurance coverage limit. Such a loss would have a severe negative effect on our operations and liquidity.

Our investments in auction rate securities may be adversely impacted by continued liquidity risk.

We have invested a portion of our cash in auction rate securities. Our investments in auction rate securities may be adversely impacted by relatively illiquid markets. Our ability to sell these securities may be impaired due to the continuance of failed auctions in 2009. Although we have entered into a settlement agreement with UBS Financial Services, Inc. (“UBS”) to settle $30.8 million in par value of auction rate securities, the sale of these securities will be subject to the economic ability of UBS to meet their obligation under the terms of the settlement. Therefore, we may not be able to liquidate these securities in the immediate future or may be forced to sell them for less than what we might have otherwise have been able, or both. For further discussion, see Note 2 of the Notes to the Consolidated Financial Statements.

We may experience difficulties resolving claims and variation orders, which may adversely impact our cash flows.

In the ordinary course of our business, we must negotiate with our clients to resolve claims and change orders. A “claim” is an amount in excess of the agreed contract price (or amount not included in the original contract price) that we seek to collect from our clients or others for client-caused delays, errors in specifications and designs, contract terminations, change orders in dispute or unapproved as to both scope and price, or other causes of unanticipated additional costs. A “change order” is a change to the scope of a project contract, which may be initiated by either us or our client. When a variation to the project scope or specifications is required, it is customary that we continue to execute the project to

completion although we may not have precise agreement with our client on the financial responsibilities of all parties. If we are unable to resolve claims and change orders with our client satisfactorily, our profit and cash flow from the project could be adversely affected.

There might be delays or cancellation of projects included in our backlog.

The dollar amount of our backlog does not necessarily indicate future revenues or earnings related to the performance of that work. Although the backlog represents only business that we consider to be firm, in the past, cancellations, delays, or scope adjustments have occurred and are likely to occur in the future. Due to factors outside our control, such as changes in project scope and schedule, we cannot predict with certainty when or if projects included in our backlog will be performed.

We may experience equipment or mechanical failures, which could increase costs, reduce revenues and result in penalties for failure to meet project completion requirements.

The successful execution of contracts requires a high degree of reliability of our vessels, barges and equipment. The average age of our fleet as of December 31, 2009 was 28 years. Breakdowns not only add to the costs of executing a project, but they can also delay the completion of subsequent contracts, which are scheduled to utilize the same assets. We operate a scheduled maintenance program in order to keep all assets in good working order, but despite this, breakdowns can and do occur.

The loss of one or more of our senior officers or other key personnel, or our failure to attract, assimilate and retain key personnel in the future, could disrupt our operations and our results of operations could suffer.

Our success depends heavily on continued active services of our senior management and key employees. Our officers and key personnel have extensive experience in our industry, so if we were to lose a number of our key employees or executive officers, our operations could suffer from the loss of the knowledge base attributable to these key personnel.

Our operations depend substantially on the services of employees having the technical training and experience necessary to obtain the proper operational results. As a result, we require the continuing availability of such personnel. If we should suffer any material loss of personnel or be unable to employ additional or replacement personnel with the requisite level of training and experience to adequately operate our equipment, our operations could be adversely affected. A significant increase in the wages paid or benefits offered by competing employers could result in a reduction in our skilled labor force, increases in our employee costs, or both. If either of these events occur, our operations and results could be materially adversely affected.

Our revenues are subject to a significant number of tax regimes, and changes in the tax legislation or the rules implementing tax legislation or the regulator enforcing those rules or legislation in any one of these countries could negatively and adversely affect our results of operations.

We operate in many countries and are therefore subject to the jurisdiction of numerous tax authorities, as well as cross-border treaties between governments. Our operations in these countries are taxed on different bases, including net income, net income deemed earned, and revenue based withholding. We determine our tax provision based on our interpretation of enacted local tax laws and existing practices, and use assumptions regarding the tax deductibility of items and recognition of revenue. Changes in these assumptions could impact the amount of income taxes that we provide for any given year and could adversely affect our result of operations. See Note 9 of the Notes to Consolidated Financial Statements for a discussion of tax related challenges.

Our debt instruments contain covenants that limit our operating and financial flexibility.

Under the terms of our credit facility, we must comply with certain financial covenants. A continuing period of weak economic activity will make it increasingly difficult to comply with our covenants and other restrictions in our debt. Our ability to meet the financial ratios and tests under our credit facility is affected by current economic conditions and by events beyond our control, and we may not be able to satisfy those ratios and tests. If we fail to comply with these covenants and other restrictions, it could lead to an event of default, the possible acceleration of our repayment of outstanding debt and the exercise of certain remedies by the lenders, including foreclosure on our pledged collateral. We cannot

assure you that we would have access to the credit markets as needed to replace our existing debt and we could incur increased costs associated with any available replacement financing. For a more detailed discussion of our credit facility, please read “Management’s Discussion and Analysis of Financial Condition and Results of Operations — Liquidity and Capital Resources” included elsewhere in this Annual Report.

Critical accounting policies significantly affect our reported financial results and conditions.

Although our financial statements are prepared in accordance with U.S. generally accepted accounting principles, the preparation of our financial statements requires us to make estimates and judgments, such as the estimates used for the cost to complete projects under the percentage-of-completion method of project accounting. These estimates and judgments have a significant effect on the amounts reported in our financial statements. Certain critical accounting policies affect our more significant judgments and estimates, and these policies are described in “Management’s Discussion and Analysis of Financial Condition and Results of Operations — Critical Accounting Policies and Estimates,” included elsewhere in this Annual Report. Actual amounts and results may differ materially from our estimates.

Compliance with environmental and other governmental regulations could be costly and could negatively impact our operations.

Our vessels and operations are subject to and affected by various types of governmental regulation including many international, federal, state, and local environmental protection laws and regulations. These laws and regulations are becoming increasingly complex and stringent, and compliance may become increasingly difficult and expensive. We may be subject to significant fines and penalties for non-compliance, and some environmental laws impose joint and several “strict liability” for cleaning up spills and releases of oil and hazardous substances, regardless of whether we were negligent or at fault. These laws and regulations may expose us to liability for the conduct of or conditions caused by others or for our acts that complied with all applicable laws at the time we performed the acts.

On June 26, 2009, the U.S. House of Representatives approved adoption of the “American Clean Energy and Security Act of 2009,” also known as the “Waxman-Markey Cap-and-Trade legislation,” or “ACESA.” The purpose of ACESA is to control and reduce emissions of greenhouse gases in the United States. The U.S. Senate has begun work on its own legislation for controlling and reducing emissions of greenhouse gases in the United States. For legislation to become law, both chambers of Congress would be required to approve identical legislation. It is not possible at this time to predict whether or when the Senate may act on climate change legislation, how any bill approved by the Senate would be reconciled with ACESA, or how federal legislation may be reconciled with state and regional requirements.

On July 17, 2009, the United States Customs and Border Protection (“CBP”) published a general notice regarding proposed changes in its interpretation of the United States cabotage law generally referred to as the Jones Act or coastwise trade. This notice was withdrawn after the conclusion of the public comment period on the proposed changes to interpretation of law and previous ruling letters issued by CBP. It is not possible at this time to predict whether or when the CBP may republish a revised notice of changes in its interpretation of the Jones Act and previous ruling letters. Significant changes to the interpretation of the Jones Act and previous CBP ruling letters could affect our ability to operate or competitively operate our foreign flagged vessels in the United States and may require us to move certain of our vessels to areas outside of the United States to operate.

These regulatory developments and adoption of laws or regulations that have the effect of curtailing exploration and production of oil and natural gas in our areas of operation could adversely affect our operations by reducing demand for our services. In addition, new laws or regulations, or changes to existing laws or regulations may increase our costs or otherwise adversely affect our operations.

War, other armed conflicts, or terrorist attacks could have a material adverse effect on our business.

Armed conflicts, terrorism and their effects on us or our markets may significantly affect our business and results of operations in the future. The wars in Iraq and Afghanistan and subsequent terrorist attacks and unrest have caused instability in the world’s financial and commercial markets, have significantly increased political and economic instability in some of the geographic areas in which we operate and have contributed to high levels of volatility in prices for oil and gas. The continuing instability and unrest in Iraq, Afghanistan, Nigeria and the Gulf of Aden, as well as threats of piracy, war or other armed conflict elsewhere, may cause further disruption to financial and commercial markets and contribute to even higher levels of volatility in prices for oil and gas. In addition, the continued unrest in Iraq and Afghanistan could lead to acts of terrorism in the United States or elsewhere, and acts of terrorism could be directed against companies such as ours. Also, acts of terrorism and threats of armed conflicts in or around various areas in which we operate, such as the Middle East and Indonesia, could limit or disrupt our markets and operations, including disruptions from evacuation of personnel, cancellation of contracts or the loss of personnel or assets.

We limit our foreign ownership, which could reduce the price of our common stock.

Our Articles of Incorporation provide that no more than 25% of our outstanding common stock may be owned by non-United States citizens. These restrictions may at times preclude United States citizens from transferring their common stock to non-United States citizens. These restrictions may also limit the available market for resale of shares of common stock and for the issuance of shares by us and could adversely affect the price of our common stock.

Provisions in our corporate documents and Louisiana law could delay or prevent a change in control, even if that change would be beneficial to our shareholders.

The existence of some provisions in our corporate documents could delay or prevent a change in control, even if that change would be beneficial to our shareholders. Our Articles of Incorporation and By-Laws contain provisions that may make acquiring control of us difficult, including provisions relating to the nomination and removal of our directors, provisions regulating the ability of our shareholders to bring matters for action at annual meetings of our shareholders, and the authorization given to our Board of Directors to issue and set the terms of preferred stock. Louisiana law also effectively limits the ability of a potential acquirer to obtain a written consent of our shareholders.

ITEM 1B.		UNRESOLVED STAFF COMMENTS

None.

ITEM 2.		PROPERTIES

We operate a fleet of ten major construction vessels, three DSVs, four MSVs, one OSV and one cargo launch barge. Our major construction vessels include nine barges and one ship. All of our major construction vessels are designed to perform more than one type of construction project which reduces the risk that these combination vessels will experience extended periods of idleness. A listing of our major construction vessels along with a brief description of the capabilities of each is presented on page 25 of this Form 10-K. Our significant vessels and equipment are described below. In addition, we are expanding our fleet with construction of two new derrick/pipelay vessels, the Global 1200 and Global 1201, with expected delivery dates in 2010 and 2011, respectively.

The Hercules is a 486-foot dynamically positioned (“DP”) pipelay/heavy-lift barge with a 2,000-ton crane capable of performing revolving lifts up to approximately 1,600 tons and is capable of both conventional and reeled pipelay. Using its portable reel, the Hercules is capable of spooling up to eighty-four miles of 6.625-inch diameter pipe, twenty-two miles of 12.75-inch diameter pipe, or ten miles of 18-inch pipe. This reel is capable of being removed and installed on the Hercules as job demands change. The Hercules is currently assigned to our North America Offshore Construction Division (OCD) segment in the U.S Gulf of Mexico.

The Titan 2 is a 408-foot self-propelled twin-hulled DP derrick ship capable of lifting 882 tons. We lease the Titan 2 from a third party under a long-term charter agreement which expires in 2018. The current base of operations for the Titan 2 is Mexico’s Bay of Campeche.

The Comanche is a 401-foot pipelay derrick barge capable of lifts up to approximately 1,000 tons. The Comanche can lay pipe up to 48 inches in diameter using the conventional method and is currently assigned to our Asia Pacific/India segment.

The Iroquois is a 400-foot pipelay derrick barge capable of laying 48-inch diameter pipe using the conventional method. The Iroquois is currently assigned to our Latin America segment.

The DLB 264 is a 400-foot pipelay derrick barge capable of lifts up to approximately 800 tons used in the conventional method of pipelay. The DLB 264 can lay pipe up to 60 inches in diameter and is currently assigned to our Asia Pacific/India segment.

The DLB 332 is a 353-foot pipelay derrick barge capable of laying pipe up to 42 inches in diameter using the conventional method. The DLB 332 is currently assigned to our Middle East segment.

The Chickasaw is a 275-foot dynamically positioned pipelay barge with a pipelay reel that has a capacity ranging from forty-five miles of 4.5-inch diameter pipe, nineteen miles of 6.625-inch diameter pipe or four miles of 12.75-inch diameter pipe in one continuous length. The Chickasaw is currently stationed in the U.S. Gulf of Mexico.

The Pioneer is a dynamically positioned small waterplane area twin hull (SWATH) vessel that provides support services in water depths to 8,000 feet. The Pioneer‘s hull design reduces weather sensitivity, allowing the vessel to continue operating in up to 12-foot seas and remain on site in up to 20-foot seas. The vessel is equipped to install, maintain, and service subsea completions, and support saturation diving. It is also equipped for abandonment operations, pipeline installation support, and other services beyond the capabilities of conventional DSVs. The Pioneer is currently stationed in the U. S. Gulf of Mexico.

The Norman Commander (formerly REM Commander) is a 305-foot dynamically positioned dive support vessel. This vessel has extensive capabilities, including dynamic positioning, 100-ton crane capacity with deepwater lowering capability to 6,500 feet and specialized design features which facilitate diving, ROV inspection, and other offshore construction services. The Norman Commander, which is currently assigned to our North America OCD segment in the U.S. Gulf of Mexico, was delivered in June 2006 under a long-term charter with a five-year fixed term and five one-year options.

The Olympic Challenger is a DP-2 class 347-foot dynamically positioned self-propelled MSV and inspection, repair and maintenance (IRM) vessel. It is equipped with a 250-ton heave compensated crane with deepwater lowering capability to 9,800 feet. We leased the Olympic Challenger in August 2008 from a third party under a charter agreement with a fixed term of five years with one two-year option and three one-year options. Constructed in 2008 and equipped with a Schilling ROV system, the vessel is designed for performance of field development and ROV/SURF work. The Olympic Challenger is currently stationed in the U. S. Gulf of Mexico.

The Global Orion is a DP-2 class 299-foot dynamically positioned self-propelled MSV. It was constructed in 2002 and includes a 150-ton crane with deepwater lowering capability to 4,900 feet and a saturation diving system. The vessel is designed for diving support as well as performance of field development and SURF work. The Global Orion is currently stationed in the U. S. Gulf of Mexico.

The Global 1200 is currently under construction and should enter our fleet in late 2010. The Global 1200 is a next generation multi-purpose DP-2 construction vessel designed for work in both deep and shallow water. The vessel incorporates a state-of-the-art pipelay system capable of handling 60-inch concrete coated pipe. The Global 1200 also incorporates a 1,200 metric ton capacity crane suitable for conventional platform installations.

The Global 1201 is currently under construction and should enter our fleet in 2011. The Global 1201 is comparable to the Global 1200.

We own ten of the vessels in the operating fleet described above. The Titan 2, Olympic Challenger, and Norman Commander are leased vessels. Eight of the vessels that we own are subject to ship mortgages. In compliance with governmental regulations, our insurance policies, and certain of our financing arrangements, we are required to maintain our vessels in accordance with standards of seaworthiness and safety set by government regulations or classification organizations. We maintain our fleet to the standards for seaworthiness, safety, and health set by the International Maritime Organization or the U.S. Coast Guard, and our vessels are inspected by the American Bureau of Shipping, Bureau Veritas, or Det Norske Veritas.

We also own and operate other ancillary offshore construction equipment including portable pipe reels, jetting sleds, and hydraulic and steam pile driving hammers. Our portable pipe reels are relatively small vertical reels which can be used for small diameter pipe on conventional barges or for simultaneously laying two pipelines using the Chickasaw. Our jetting sleds are capable of burying pipelines of up to thirty-six inches in diameter. Pile hammers are used by construction barges to drive the pilings which secure offshore platforms to the bottom of the sea. We also operate ten saturation diving systems. Our saturation systems range in capacity from four to twelve divers. Two of the saturation systems are capable of supporting dives as deep as 1,500 feet. Each saturation system consists of a diving bell, for transporting the divers to the sea floor, and pressurized living quarters. The systems have surface controls for measuring and mixing the specialized gases that the divers breathe and connecting hatches for entering the diving bell and providing meals and supplies to the divers.

In addition to the fleet of vessels which we operate as described above, we charter other vessels, such as tugboats, cargo barges, utility boats, and dive support vessels, and lease other equipment, such as saturation diving systems and ROVs.

We own 603 acres near Carlyss, Louisiana and have constructed a deepwater support facility and pipe base. This location serves as the corporate headquarters and the headquarters of our North America Offshore Construction and Subsea operations. The facility is capable of accommodating our deepwater draft vessels.

The following table summarizes our significant facilities as of December 31, 2009:

				Approximate
				Square Feet						Owned/Leased
Location		Principal Use		or Acreage						(Lease Expiration)
Carlyss, LA		Shore base/Corporate Headquarters			603			acres		Owned
Port of Iberia, LA		Research and Development Center			3,765			sq. ft.		Leased (Mar. 2010)(1)
Houston, TX		Office			67,059			sq. ft.		Leased (Jul. 2013)
Cd. Del Carmen, Mexico		Office/Workshop			41,042			sq. ft.		Owned
Tema, Ghana		Office/Shore base			56,966			sq. ft.		Leased (July 2011)
Sharjah, United Arab Emirates		Office			8,646			sq. ft.		Leased (April 2011)
Mumbai, India		Project Management Office			8,535			sq. ft.		Leased (Dec. 2011)
Batam Island, Indonesia		Shore base			45			acres		Leased (Mar. 2028)
Singapore		Office			10,854			sq. ft.		Leased (Aug. 2013)
Rio de Janeiro, Brazil		Office			6,480			sq. ft.		Leased (Jun. 2010)

Global Industries, Ltd.
Listing of Major Construction Vessels

										Derrick				Pipelay
														Maximum				Maximum
										Maximum				Pipe				Water				Year				Living
						Length				Lift				Diameter				Depth				Acquired				Quarter
Vessel Name		Vessel Type		Capability		(Feet)				(Tons)				(Inches)				(Feet)				/Leased				Capacity
Titan 2(1)		Ship		Derrick			408				882				—				—				2001				330
Hercules		Barge		Pipelay/reel/derrick			486				2,000				60.00				10,000				1995				269
Comanche		Barge		Pipelay/derrick			401				1,000				48.00				1,000				1996				243
Shawnee		Barge		Pipelay/derrick			400				860				36.00				800				1996				259
Iroquois		Barge		Pipelay			400				250				48.00				1,200				1997				261
DLB 264		Barge		Pipelay/derrick			400				1,100				60.00				1,000				1998				275
DLB 332		Barge		Pipelay/derrick			353				800				42.00				1,000				1998				247
Cherokee		Barge		Pipelay/derrick			387				925				48.00				1,000				1990				174
Chickasaw		Barge		Pipelay/reel			275				165				12.00				6,000				1990				73
Sea Constructor		Barge		Pipelay/bury			250				200				24.00				600				1987				104

ITEM 3.		LEGAL PROCEEDINGS

The information set forth under the heading “Investigations and Litigation” in Note 9, “Commitments and Contingencies,” to our consolidated financial statements included in this Annual Report is incorporated by reference into this Item 3.

ITEM 4.		SUBMISSION OF MATTERS TO A VOTE OF SECURITY HOLDERS

None.

ITEM (Unnumbered). EXECUTIVE OFFICERS OF THE REGISTRANT

(Provided pursuant to General Instruction G to Form 10-K)

All executive officers named below, in accordance with the By-laws, are elected annually and hold office until a successor has been duly elected and qualified. Our executive officers as of February 23, 2010, were as follows:

Name		Age				Position
John A. Clerico			68			Chairman of the Board and Chief Executive Officer
Peter S. Atkinson			62			President and Principal Financial Officer
Russell J. Robicheaux			61			Senior Vice President, Chief Administrative Officer, General Counsel and Secretary
James J. Doré			55			Senior Vice President, North America and Worldwide Diving and Subsea Services
Byron W. Baker			53			Senior Vice President, Worldwide Operations
John M. Katok			53			Senior Vice President, Worldwide Business Development
Eduardo Borja			52			Senior Vice President, Global Marketing and Strategy
David R. Sheil			53			Senior Vice President, Human Resources
Ashit Jain			39			Senior Vice President, Asia Pacific/India and Middle East
Trudy McConnaughhay			50			Vice President and Controller

Mr. Clerico has been a member of our Board since February 2006. In October 2008, he was appointed Chief Executive Officer of the Company. Mr. Clerico is also the Chairman of Chartmark Investments, Inc., a company he founded in 2001. Mr. Clerico previously served as Executive Vice President and Chief Financial Officer of Praxair, Inc. From 1999-2000, Mr. Clerico was a member of the Office of the Chairman at Praxair and also had leadership responsibility for its operations in Europe and South America. Prior to that, Mr. Clerico was an executive with Union Carbide Company where he served as Treasurer and Chief Financial Officer.

Mr. Atkinson joined the Company in September 1998 as Vice President and Chief Financial Officer. In June 2000, he was named President. In December 2005, he reassumed the additional title of Chief Financial Officer. In May 2008, he relinquished title of Chief Financial Officer while retaining title of President. In January 2010, Mr. Atkinson assumed the duties of Principal Financial Officer until we conclude our search for a Chief Financial Officer. Prior to joining the Company, he had been Director — Financial Planning with J. Ray McDermott, S.A., having previously served in various capacities at McDermott International, Inc. and J. Ray McDermott, S.A. for twenty-three years. At McDermott, he served at the corporate level as well as in the North Sea, Middle East, West Africa, and Central and South America. He is currently serving on the Executive Committee of the Board of Directors of the National Ocean Industry Association.

Mr. Robicheaux joined the Company in August 1999 as Vice President and General Counsel. In August 2001, he was named Senior Vice President, General Counsel. In April 2006, Mr. Robicheaux was named Chief Administrative Officer and General Counsel. Prior to joining the Company, Mr. Robicheaux had been Assistant General Counsel with J. Ray McDermott, S.A. since 1995. In addition, he served in various engineering and legal capacities at McDermott International, Inc. for the preceding

twenty-five years, including design and field engineering, project engineering, estimating and project management.

Mr. James Doré has over twenty-six years of service with the Company. He has held a number of management positions with responsibility for marketing, contracts and estimating, and diving operations. Mr. Doré was named Vice President, Marketing in March 1993, Vice President, Special Services in November 1994 and Vice President, Diving and Special Services in February 1996. In August 2001, he was named Senior Vice President, Diving and Special Services. In November 2002, Mr. Doré was named President of Global Divers and Marine Contractors. In June 2005, Mr. Doré was appointed Senior Vice President, Asia Pacific/India. In October 2006, Mr. Doré was named Senior Vice President, Eastern Hemisphere. In July 2007, he was named Senior Vice President, Worldwide Diving and Subsea Services and Middle East and Mediterranean Region. In November 2008 Mr. Doré relinquished his role over the Middle East and Mediterranean Region and assumed responsibility for the North America Region. Mr. Doré previously served as President of the Association of Diving Contractors, an industry trade association. Mr. Doré is the brother of William J. Doré, our founder and a member of our Board of Directors.

Mr. Baker joined the Company in May 1997 as Operations Manager in our Latin America segment and served in various capacities with us through August 2001. In August 2001, Mr. Baker was named Senior Vice President of Equipment, Operations and Regulatory and in 2003 was named Senior Vice President, the Americas. In June 2007, he was named Senior Vice President, North America Region and Worldwide Fleet. In August 2009, Mr. Baker was named Senior Vice President, Worldwide Operations. Prior to joining the Company, Mr. Baker served in various management capacities for J. Ray McDermott, Inc., Offshore Pipelines, Inc. and Brown & Root, Inc. Mr. Baker has more than thirty years of experience in the offshore construction industry including service in the United States, Latin America, the North Sea, West Africa, Asia Pacific/India, and the Middle East.

Mr. Katok joined the Company in May 2008 as Vice President, Middle East. In January 2009, Mr. Katok was named Senior Vice President, Worldwide Business Development with responsibility to enhance customer relationships through client sponsorship and developing processes to increase project backlog and ensure improved project planning and execution. Prior to joining the Company, Mr. Katok served as Commercial Vice President with Technip, Inc. for six years. Previously, Mr. Katok spent more than twenty-five years with Kellogg, Brown & Root in a variety of commercial, project management, and operational roles. He is an engineering graduate of West Virginia University where he holds a B.S. in Civil Engineering.

Mr. Borja rejoined the Company in January 2009 as Senior Vice President, Global Marketing and Strategy with responsibility for market analysis and development of growth strategies to expand our services into deepwater and subsea markets. Mr. Borja first joined us in September 2001, serving in leadership positions in both operations and business development for the Latin America segment. He was named Vice President, Latin America in May 2002 and served in that role until mid-2008. His operational and business development experience includes domestic and international assignments, including positions with ICA-Fluor Daniel. Mr. Borja holds a Master’s Degree in Construction Management from Universidad Iberoamericana and a Bachelors Degree in Civil Engineering from Universidad Nacional Autonoma de Mexico.

Mr. Sheil joined the Company in January 2008 as Vice President, Human Resources. In September 2009, he was promoted to Senior Vice President, Human Resources, where he has responsibility for employee relations, compensation and benefits, organizational development and succession planning. Prior to joining the Company, Mr. Sheil served in various management capacities for more than twenty years with Cooper Industries, PLC, a multinational industrial manufacturing firm. His most recent position with Cooper was Senior Vice President, Human Resources. Mr. Sheil holds a B.S. degree in Industrial and Labor Relations from Cornell University and a J.D. from Fordham University School of Law.

Mr. Ashit Jain joined the Company in 1997 and has held top management positions in operations, engineering, project management, estimating and project controls. He was appointed Senior Vice President,

Asia Pacific & India in 2006 and is based in the Asia Pacific region. Mr. Jain has over sixteen years experience in the marine construction industry. After graduating from the University of Delhi in 1992, his early assignments covered complex offshore projects in the Middle East and Asia.

Mrs. Trudy McConnaughhay joined the Company in February 1999 as Assistant Corporate Controller and has since held several other financial management roles including Director of Finance and Tax and Corporate Controller. She is a graduate of McNeese State University with a B.S. in Accounting and has more than thirty years of experience in both public and private accounting.

PART II

ITEM 5.		MARKET FOR THE REGISTRANT’S COMMON EQUITY, RELATED STOCKHOLDER MATTERS AND ISSUER PURCHASES OF EQUITY SECURITIES

Our common stock is traded on the NASDAQ Global Select Market under the symbol “GLBL.” The following table sets forth, for the periods indicated, the high and low closing sale prices per share of our common stock as reported by the NASDAQ Global Select Market.

		Common Stock Price
		Low				High
Year ended 2008:
First quarter		$	15.62			$	22.92
Second quarter			15.86				19.73
Third quarter			6.57				17.50
Fourth quarter			2.10				6.70
Year ended 2009:
First quarter		$	2.74			$	4.43
Second quarter			4.00				7.68
Third quarter			5.11				10.63
Fourth quarter			5.67				9.20

As of February 23, 2010, there were approximately 668 holders of record of our common stock and approximately 20,880 beneficial holders of our common stock.

We have never paid cash dividends on our common stock, and we do not intend to pay cash dividends in the foreseeable future. We currently intend to retain earnings, if any, for the future operation and growth of our business. Our credit facility and other financing arrangements restrict the payment of cash dividends.

The following table contains our purchases of equity securities during the fourth quarter of 2009.

														Maximum Number of
										Total Number of Shares				Shares that May Yet
										Purchased as Part of				Be Purchased Under
		Total Number of Shares				Average Price Paid				Publicly Announced Plans				the Plans or
Period		Purchased(1)				per Share				or Programs				Programs
October 1, 2009 — October 31, 2009			—			$	—				—				—
November 1, 2009 — November 30, 2009			4,717				6.39				—				—
December 1, 2009 — December 31, 2009			32,868				6.93				—				—
Total			37,585			$	6.86				—				—

ITEM 6.		SELECTED FINANCIAL DATA

The selected financial data presented below for each of the past five fiscal periods should be read in conjunction with “Management’s Discussion and Analysis of Financial Condition and Results of Operations” and the Consolidated Financial Statements including the “Notes to Consolidated Financial Statements,” included elsewhere in this Annual Report.

		Year Ended December 31,
		2009				2008				2007				2006				2005
		(in thousands, except per share and ratio data)
Revenues		$	914,348			$	1,070,988			$	992,513			$	1,234,849			$	688,615
Cost of operations			755,301				1,084,581				719,768				887,003				571,768
Gross profit (loss)			159,047				(13,593	)			272,745				347,846				116,847
Loss on asset impairments			1,186				2,551				141				8,931				—
Reduction in litigation provision			—				—				—				(13,699	)			—
Net gain on asset disposal			(8,351	)			(1,695	)			(4,220	)			(6,395	)			(5,303	)
Selling, general and administrative expenses			69,165				95,364				81,275				71,109				50,916
Operating income (loss)			97,047				(109,813	)			195,549				287,900				71,234
Interest income			2,020				14,477				27,966				8,169				3,304
Interest expense			(13,061	)			(16,439	)			(15,463	)			(10,787	)			(10,192	)
Other income (expense), net			7,302				(641	)			3,826				705				1,668
Income (loss) before income taxes			93,308				(112,416	)			211,878				285,987				66,014
Income taxes			19,577				6,775				53,234				86,242				31,256
Net income (loss)		$	73,731			$	(119,191	)		$	158,644			$	199,745			$	34,758
Net income (loss) per diluted share
Net income (loss)		$	0.64			$	(1.05	)		$	1.35			$	1.70			$	0.30
Ratio of earnings to fixed charges (1)			2.9x				n/a	(2)			6.9x				12.0x				5.6x
Total assets (3)		$	1,524,193			$	1,489,353			$	1,588,605			$	1,070,997			$	844,662
Working capital (3)		$	405,609			$	380,894			$	843,017			$	460,126			$	232,050
Long-term debt (3)		$	298,326			$	293,926			$	290,119			$	73,260			$	77,220

ITEM 7.		MANAGEMENT’S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS

The following discussion presents management’s discussion and analysis of our financial condition and results of operations and should be read in conjunction with the Consolidated Financial Statements and the related “Notes to Consolidated Financial Statements” included in Item 8 of Part II of this Annual Report.

Results of Operations

General

Our reportable segments consist of: North America OCD, North America Subsea, Latin America, West Africa, Middle East, and Asia Pacific/India.

During the first quarter of 2009, we discontinued allocation of corporate stewardship costs to our reportable segments. This change in allocation methodology is reflected as a retrospective change to the financial information and the narrative description in “Management’s Discussion and Analysis of Results of Operations and Financial Condition” presented for the years ended December 31, 2009, 2008 and 2007. This change did not have an impact on our consolidated balance sheets, consolidated statements of operations, statements of stockholders’ equity, or consolidated statements of cash flows.

Our results of operations are affected by the overall level of activity of the offshore construction industry within each worldwide region in which we operate. This overall level of offshore construction activity is principally determined by four factors: (1) the oil and gas industry’s ability to economically justify placing discoveries of oil and gas reserves in production; (2) the oil and gas industry’s need to maintain, repair, and replace existing pipelines and structures to extend the life of production; (3) the oil and gas industry’s need to clear structures from the lease once the oil and gas reserves have been depleted; and (4) weather events such as major hurricanes. Our results of operations ultimately reflect our ability to secure jobs through competitive bidding and manage those jobs to successful completion. The competition and inherent operating risks vary between the worldwide regions in which we operate, and these challenges affect individual segment profitability.

Our results of operations are measured in terms of revenues, gross profit, and gross profit as a percentage of revenues (“margins”) and are principally driven by three factors: (1) our level of offshore construction and subsea activity (“activity”), (2) pricing, which can be affected by contract mix (“pricing”), and (3) operating efficiency on any particular construction project (“productivity”).

Offshore Construction Services

The level of our offshore construction activity in any given period has a significant impact on our results of operations. The offshore construction business is capital and personnel intensive, and, as a practical matter, many of our costs, including the wages of skilled workers, are effectively fixed in the short run regardless of whether or not our vessels are being utilized in productive service. In general, as activity increases, a greater proportion of these fixed costs are recovered through operating revenues and, consequently, gross profit and margins increase. Conversely, as activity decreases, our revenues decline, but our costs do not decline proportionally, thereby constricting our gross profit and margins. Our activity level can be affected by changes in demand due to economic or other conditions in the oil and gas exploration industry, seasonal conditions in certain geographical areas, and/or our ability to win the bidding for available jobs. Our results of operations depend heavily upon our ability to obtain, in a very competitive environment, a sufficient quantity of offshore construction contracts with sufficient gross profit margins to recover the fixed costs associated with our offshore construction business.

Most of our offshore construction revenues are obtained through international contracts which are generally larger, more complex, and of longer duration than our typical domestic contracts. Most of these international contracts require a significant amount of working capital, are generally bid on a lump-sum basis, and are secured by a letter of credit or performance bond. Operating cash flows may

be negatively impacted during periods of escalating activity due to the substantial amounts of cash required to initiate these projects and the normal delays between cash expenditures by us and cash receipts from the customer. Additionally, lump-sum contracts for offshore construction services are inherently risky and are subject to many unforeseen circumstances and events that may affect productivity. When productivity decreases with no offsetting decrease in costs or increases in revenues, our contract margins erode compared to our bid margins. In general, we are required to bear a larger share of project related risks during periods of weak demand for our services and a smaller share of risk during periods of high demand for our services. Consequently, our revenues and margins from offshore construction services are subject to a high degree of variability, even as compared to other businesses in the offshore energy industry.

Claims and change orders are a significant aspect of any construction business and are particularly significant in the offshore construction industry. A claim is an amount in excess of the contract price which a construction contractor seeks to collect from customers or others due to delays, errors in specifications or design, unapproved change orders, or other causes of unanticipated costs caused by the customer or others. A change order is a request to alter the scope of work of a previously agreed upon construction contract. Change orders may include changes in specifications or design, method or manner of performance, facilities, equipment, site, or the period for completion of the work. Change orders are common in our business due to the nature of offshore construction contracts and sometimes add to the degree of project execution difficulty. A change order usually increases the scope of work but may also decrease the scope and, consequently, the amount of contract revenue and costs which are recognized. Change orders can be initiated by us or the customer. At the time of initiation, a change order may be approved or unapproved by either party, priced or unpriced, or defined or undefined regarding detailed scope. Even when the scope of work is defined, the associated increase or decrease in contract revenue may be governed by contract terms or may be negotiated later, sometimes after the work is performed.

Subsea Services

Most of our subsea revenues are the result of short-term work, involve numerous smaller contracts, and are usually based on a day-rate charge. Financial risks associated with these types of contracts are normally limited due to their short-term and non-lump sum nature. However, some subsea contracts may involve longer-term commitments that extend from the exploration, design and installation phases of a field throughout its useful life by providing IRM services. The financial risks associated with these commitments are low in comparison with our offshore construction activities due to the day-rate structure of the contracts. Revenues and margins from our subsea activities tend to be more consistent than those from our offshore construction activities.

Year Ended December 31, 2009 Compared to Year Ended December 31, 2008

		2009								2008
						% of								% of				% Change
		Thousands				Revenue				Thousands				Revenue				(Unfavorable)
Revenues		$	914,348				100.0	%		$	1,070,988				100.0	%			(14.6)	%
Cost of operations			755,301				82.6				1,084,581				101.3				30.4
Gross profit (loss)			159,047				17.4				(13,593	)			1.3				n/m	(1)
Loss on asset impairments			1,186				0.1				2,551				—				53.5
Net gain on asset disposal			(8,351	)			0.9				(1,695	)			—				392.7
Selling, general and administrative expenses			69,165				7.6				95,364				8.9				27.5
Operating income (loss)			97,047				10.6				(109,813	)			10.2				188.4
Interest income			2,020				0.2				14,477				1.4				(86.0	)
Interest expense			(13,061	)			1.4				(16,439	)			1.5				20.5
Other income (expense), net			7,302				0.8				(641	)			—				n/m	(1)
Income (loss) before income taxes			93,308				10.2				(112,416	)			10.5				183.0
Income taxes			19,577				2.1				6,775				0.6				(189.0	)
Net income (loss)		$	73,731				8.1	%		$	(119,191	)			11.1	%			161.9	%

Revenues — Revenues decreased by $156.7 million, or 14.6%, between 2009 and 2008 to $914.3 million for 2009 primarily due to lower activity in the Middle East, West Africa, and Latin America. This decrease was partially offset by a higher demand for our services in North America and Asia Pacific/India. For a detailed discussion of revenues and income (loss) before taxes for each geographical area, please see “Segment Information” below.

Depreciation and Amortization in Cost of Operations — The amount of depreciation and amortization expense, including the amortization of dry-docking costs, included in our cost of operations for 2009 was $55.5 million, compared to $51.9 million included in 2008. This increase in depreciation and amortization expense was primarily caused by increased dry-dock amortization related to two major construction vessels. Amortization of leasehold improvements to two of our leased vessels also contributed to the increase in depreciation and amortization. Stock-based compensation expense decreased between the periods by $1.4 million. We expect amortization of our dry-dock costs to be material to our operations in 2010.

Gross Profit — Gross profit increased by $172.6 million between 2009 and 2008 to a $159.0 million gross profit for 2009 compared to a $13.6 million gross loss for 2008. Gross profit for 2008 was adversely affected by the losses incurred on the Berri and Qatif project in Saudi Arabia and the Camarupim project in Brazil. Cost overruns on the Berri and Qatif project and productivity and equipment delays on both projects resulted in substantial project deterioration during 2008. Higher activity in North America OCD and North America Subsea and higher margins in all segments, except Asia Pacific/India and Middle East, contributed to the increase.

Loss on Asset Impairments — Loss on asset impairments decreased $1.4 million in 2009 compared to 2008. During 2009, primarily due to repair costs exceeding the future expected benefit of certain vessels, we retired two DSVs and three dive systems and recorded an aggregate impairment loss of $1.2 million compared to an impairment loss in 2008 of $2.6 million on the retirement of two DSVs.

Gain on Asset Disposal — Net gains on the disposal of assets increased $6.7 million from 2008 to 2009. Net gains on asset disposals totaled $8.4 million for 2009 primarily from the sale of one DSV, one cargo barge, one DLB, and one pipelay/bury barge. Net gains on asset disposals totaled $1.7 million for 2008 primarily from the sale of a DSV.

Selling, General and Administrative Expenses — Selling, general and administrative expenses decreased by $26.2 million, or 28%, to $69.2 million for 2009, compared to $95.4 million during 2008. Decreased labor costs of $7.7 million in all areas except North America OCD and Asia Pacific/India was the primary driver of this decrease as well as decreases in travel costs, stock-based compensation expense, and legal and professional fees. These decreases are the result of our ongoing cost reduction efforts.

Interest Income — Interest income decreased by $12.5 million to $2.0 million during 2009, compared to $14.5 million for 2008. Significantly lower interest rates in 2009 contributed to lower returns on cash balances and short-term investments compared to 2008.

Interest Expense — Interest expense decreased to $13.1 million for 2009 compared to $16.4 million for 2008. Higher capitalized interest primarily driven by expenditures for ongoing construction of the Global 1200 and Global 1201 was responsible for the majority of the decrease. Capitalized interest for 2009 was $14.7 million compared to $7.3 million for 2008. Interest expense for 2008 was affected by the reversal of $2.5 million previously accrued interest expense related to the settlement of a previously uncertain tax position.

Other Income (Expense), Net — Other income (expense), net increased by $7.9 million from 2008 primarily resulting from gains of $3.6 million on foreign currency exchange rate transactions incurred in 2009 compared to exchange losses of $1.9 million in 2008 and from proceeds of $2.7 million in 2009 from insurance claims.

Income Taxes — Our effective tax rate was 21.0% and (6.0)%, respectively, for the years ended December 31, 2009 and 2008. The tax rate in 2008 was adversely impacted by losses that could not be tax benefited and by taxes paid in tax jurisdictions with a deemed profit tax regime where tax is calculated as a percentage of revenue rather than being based upon net income, resulting in an income tax expense being recognized despite the reported loss. Comparatively, 2009 was profitable and benefitted from higher earnings in foreign jurisdictions with deemed profit tax regimes and utilization of losses not previously tax benefitted.

Segment Information — The following sections discuss the results of operations for each of our reportable segments during the twelve month periods ended December 31, 2009 and 2008.

North America Offshore Construction Division

Revenues were $124.7 million in 2009 compared to $81.1 million in 2008. The increase of $43.6 million, or 54%, between 2009 and 2008 was primarily due to the relocation of the Hercules and Sea Constructor to the U.S. Gulf of Mexico in early 2009 and increased utilization of the Cherokee. The increased revenue was partially offset by the reduction in the utilization of (a) the Titan II, which was on charter from our Latin America segment during 2008, (b) the Chickasaw, and (c) the GP37. Revenues in 2008 were negatively affected by adverse weather conditions including two major hurricanes and the extended dry-docking of the Cherokee. Loss before taxes was $1.3 million for 2009 compared to $15.0 million for 2008. This decrease in loss of $13.7 million was primarily attributable to higher vessel utilization and higher margins from increased productivity.

North America Subsea

Revenues generated in 2009 were $158.9 million compared to $146.1 million for 2008, an increase of $12.8 million, or 9%. The increase was primarily attributable to increased activity for two MSVs, the Olympic Challenger and Global Orion, which entered service in the second half of 2008, partially offset by the loss of revenue from the Sea Lion and a third party vessel used in 2008. The Sea Lion was grounded in an incident in November 2008, was damaged beyond economical repair, and sold in the first quarter of 2009. Income before taxes was $34.9 million for 2009 compared to $11.3 million for 2008. The increase of $23.6 million was primarily attributable to higher revenues and project margins due to improved pricing plus a $4.9 million gain on the sale of the Sea Lion. Partially offsetting the

increase were idle costs attributable to the Norman Commander that was relocated to the U.S. Gulf of Mexico in May 2009. The project margins in 2008 were affected by competitive pricing and productivity issues on some of our projects as well as idle and startup costs associated with the addition of the Global Orion and Olympic Challenger. In addition, we recorded a $1.0 million impairment on a DSV during 2008.

Latin America

Revenues were $229.3 million for 2009 compared to $267.0 million for 2008. A decrease of $37.7 million, or 14%, in 2009 compared to 2008 was primarily due to lower activity in Brazil and Mexico. Income before taxes was $8.2 million during 2009 compared to a loss before taxes of $9.2 million in 2008. The increase of $17.4 million was primarily attributable to higher project margins in Brazil, partially offset by lower productivity on Mexico projects and lower vessel utilization in Brazil and Mexico. We completed the Camarupim project in Brazil in 2009 after experiencing (a) additional project deterioration of $4.0 million attributable to increased costs associated with rescheduling diving work from the Norman Commander to a third party diving vessel and (b) increased project duration caused by third party equipment failure. In comparison, we recorded a $30.1 million loss on this project in 2008.

West Africa

Revenues were $104.3 million for 2009 compared to $152.9 million for 2008. This decrease of $48.6 million, or 32%, in 2009 compared to 2008 was primarily due to decreased activity attributable to low demand for services in the region. We completed work on one construction project in 2009 compared to two major construction projects in 2008. Income before taxes was $27.5 million for 2009 compared to a loss before taxes of $33.5 million for 2008. This increase in income before taxes of $61.0 million was attributable to (a) increased project profitability due to increased pricing and productivity, (b) reduced vessel costs with the transfer of the Hercules and Sea Constructor to North America in January of this year, (c) reduced vessel costs due to the sale of the Sea Puma, CB3, and Power Barge 1, and (d) the reduction in labor, travel, and professional fees attributable to our decision to curtail operations in the region. In addition, in 2009 we received a $1.8 million insurance reimbursement related to prior year costs incurred on a project claim and reached a $3.3 million settlement with a customer for recovery of the deterioration of the Nigerian naira on remitted invoice payments and final payment of outstanding naira invoices in U.S. Dollars. Negatively impacting the 2008 loss before taxes were (a) the additional costs incurred related to idle vessel costs from low utilization and project productivity issues related to a project in Nigeria, (b) a $1.6 million impairment on a DSV, and (c) exchange losses of $3.7 million primarily related to naira cash balances. We began curtailment of our operations in this region beginning in the second quarter of 2009. As of the date of this Annual Report, we have no active projects in West Africa.

Middle East

Revenues were $88.4 million for 2009 compared to $237.5 million during 2008. This decrease of $149.1 million, or 63%, for 2009 compared to 2008 was the result of lower activity in the region. Work on our Berri and Qatif project in Saudi Arabia was substantially completed in 2009 compared to two major projects in progress in 2008. Income before taxes was $8.9 million during 2009 compared to a loss before taxes of $75.7 million for 2008. This increase in income before taxes of $84.6 million was primarily attributable to $20.4 million of productivity improvements and cost savings on the Berri and Qatif project compared to $82.3 million loss on this project in 2008. The increase in productivity was partially offset by overall lower activity in the region. Reduced costs for labor, travel, and professional fees of $2.4 million also positively affected the income before taxes for 2009. 2009 was negatively impacted by $1.9 million in foreign currency exchange losses compared to $1.3 million in foreign currency exchange gains in 2008.

Asia Pacific/India

Revenues were $244.4 million for 2009 compared to $223.5 million for 2008. This increase of $20.9 million, or 9%, for 2009 compared to 2008 was primarily attributable to higher activity during 2009. Income before taxes was $41.3 million for 2009 compared to $46.7 million for 2008. This decrease in profitability of $5.4 million was primarily due to a reduction in overall project margins. Project margins for 2008 were favorably impacted by cost savings on a major construction project. Partially offsetting the decreased project margins was a $3.4 million gain on the sale of the Seminole and cost recoveries attributable to higher vessel utilization during 2009.

Year Ended December 31, 2008 Compared to Year Ended December 31, 2007

		2008								2007
						% of								% of				% Change
		Thousands				Revenue				Thousands				Revenue				(Unfavorable)
Revenues		$	1,070,988				100.0	%		$	992,513				100.0	%			7.9	%
Cost of operations			1,084,581				101.3				719,768				72.5				(50.7	)
Gross profit (loss)			(13,593	)			1.3				272,745				27.5				(105.0	)
Loss on asset impairments			2,551				—				141				—				n/m	(1)
Net gain on asset disposal			(1,695	)			—				(4,220	)			0.4				(59.8	)
Selling, general and administrative expenses			95,364				8.9				81,275				8.2				(17.3	)
Operating income (loss)			(109,813	)			10.2				195,549				19.7				(156.2	)
Interest income			14,477				1.4				27,966				2.8				(48.2	)
Interest expense			(16,439	)			1.5				(15,463	)			1.6				(6.3	)
Other income (expense), net			(641	)			—				3,826				0.4				(116.8	)
Income (loss) before income taxes			(112,416	)			10.5				211,878				21.3				(153.1	)
Income taxes			6,775				0.6				53,234				5.3				87.3
Net income (loss)		$	(119,191	)			11.1	%		$	158,644				16.0	%			(175.1)	%

Revenues — Revenues increased by $78.5 million, or 7.9%, between 2008 and 2007 to $1.1 billion for 2008 primarily due to higher activity in the Middle East, Asia Pacific/India, and Latin America. Increased construction activity in the Middle East from the Berri and Qatif project and kickoff of the Camarupim project in Latin America were somewhat offset by lower demand for our services in North America and lower activity in West Africa. For a detailed discussion of revenues and income (loss) before taxes for each geographical area, please see “Segment Information” below.

Depreciation and Amortization in Cost of Operations — The amount of depreciation and amortization expense, including the amortization of dry-docking costs, included in our cost of operations for 2008 was $51.9 million, compared to $46.9 million included in 2007. This increase in depreciation and amortization expense was primarily caused by increased dry-dock amortization related to two major construction vessels and an increase in the amount of depreciation expense related to our major construction vessels with the addition of the Global Orion to the vessel fleet. Depreciation associated with our office expansion in the Middle East and Latin America also contributed to the increase in depreciation. Stock-based compensation expense decreased between the periods by $1.4 million. We expect amortization of our dry-dock costs to be material to our operations in 2009.

Gross Profit — Gross profit decreased by $286.3 million, or 105%, between 2008 and 2007 to a $13.6 million gross loss for 2008 compared to $272.7 million gross profit for 2007. The decrease primarily reflects the adverse effects of the losses incurred on the Berri and Qatif project in Saudi Arabia and the Camarupim project in Brazil. Cost overruns on the Berri and Qatif project and productivity and equipment delays on both projects resulted in substantial project deterioration during 2008. Results for 2008 include an estimate for losses through the projects’ anticipated completion dates in 2009.

Loss on Asset Impairments — Loss on asset impairments increased $2.5 million in 2008, compared to 2007. During 2008, primarily due to high repair costs in excess of future benefit of certain vessels, we decided not to repair them and recorded an aggregate impairment loss of $2.6 million on the retirement of two DSVs. In 2007, we recorded an impairment loss of $0.1 million.

Gain on Asset Disposal — Net gains on the disposal of assets decreased $2.5 million from 2007 to 2008. Net gains on asset disposals totaled $1.7 million for 2008 primarily from the sale of a DSV. Net gains on asset disposals totaled $4.2 million during 2007, which primarily arose from sale of three DSVs, that were partially offset by losses on the disposal of ancillary dive support systems.

Selling, General and Administrative Expenses — Selling, general and administrative expenses increased by $14.1 million, or 17.3%, to $95.4 million for 2008, compared to $81.3 million during 2007. Increased labor costs in all areas except Asia Pacific/India were responsible for the majority of this increase, as well as increased professional fees, rent expense, and computer expense, all related to our continued business expansion. Partially offsetting these increases was a reduction in amortization of stock compensation resulting from the recapture of stock expense related to performance shares and the net favorable impact related to the recapture of previously recognized stock expense resulting from the accelerated vesting of certain shares upon the resignation of our CEO in October 2008.

Interest Income — Interest income decreased by $13.5 million to $14.5 million during 2008, compared to $28.0 million for 2007. Lower interest rates and decreased cash balances in 2008 contributed to lower return on cash balances and short-term investments compared to 2007.

Interest Expense — Interest expense increased to $16.4 million for 2008 compared to $15.5 million for 2007. Increased interest resulting from the issuance of $325.0 million of convertible debentures in July 2007 was partially offset by a reversal of $2.5 million previously accrued interest expense related to the 2008 settlement of a previously uncertain tax position.

Other Income (Expense), Net — Other income (expense), net decreased by $4.5 million from 2007 primarily resulting from losses on foreign currency exchange rate differences incurred in 2008 and the nonrecurrence of a $1.4 million recognized gain in 2007 related to the settlement of a claim for interrupted operations as a result of a 2006 oil spill in the Gulf of Mexico by a refinery adjacent to our property in Louisiana.

Income Taxes — Our effective tax rate was (6.0)% and 25.1%, respectively, for the twelve months ended December 2008 and 2007. The tax rate in 2008 was adversely impacted by losses that could not be tax benefited and also taxes paid in tax jurisdictions with a deemed profit tax regime where tax is calculated as a percentage of revenue rather than being based upon net income. This resulted in an income tax expense being recognized despite the loss reported before taxes for the twelve months ended December 31, 2008.

Segment Information — The following sections discuss the results of operations for each of our reportable segments during the twelve month periods ended December 31, 2008 and 2007.

North America Offshore Construction Division

Revenues were $81.1 million in 2008 compared to $106.5 million in 2007. A decrease of $25.4 million, or 24%, between 2008 and 2007 was primarily due to: (1) lower activity related to market conditions driven by decreased demand for services; (2) $11.2 million related to the extended dry-docking of the Cherokee; and (3) non-compensated vessel standby costs during Hurricanes Gustav and Ike. Loss before taxes was $15.0 million for 2008 compared to income before taxes of $16.4 million for 2007. This decrease of $31.4 million was primarily attributable to lower revenues and lower margins on projects attributable to the continuing softening of market conditions in the Gulf of Mexico, lower profitability on derrick work impacted by operational issues, and non-recovered vessel costs resulting from lower vessel utilization for 2008.

North America Subsea

Revenues were comparable between 2008 and 2007. Revenues generated in 2008 were $146.1 million compared to $150.4 million for 2007. However, project profitability declined between the two years with increased competition affecting pricing, coupled with higher operating costs incurred in 2008. Income before taxes was $11.3 million for 2008 compared to $63.8 million for 2007. This decrease of $52.5 million, or 82%, was attributable to lower margins resulting from increased competition affecting pricing as well as productivity issues affecting some of our projects. Idle and startup costs associated with the addition of the Global Orion and Olympic Challenger to the vessel fleet also negatively

impacted the margins during 2008. In 2007, higher project margins were generated from the Norman Commander which was subsequently transferred to the Latin American region in April 2008. In addition, we recorded a $1.0 million impairment on a DSV during 2008.

Latin America

Revenues were $267.0 million for 2008 compared to $227.0 million for 2007. An increase of $40.0 million, or 17.6%, in 2008 compared to 2007 was primarily due to additional revenue from expansion into Brazil, partially offset by lower activity in Mexico. Despite the increase in revenues, we reported a loss before taxes of $9.2 million during 2008 compared to income before taxes of $106.3 million in 2007. The decrease of $115.5 million was primarily due to the favorable finalization of project claims and change orders in 2007 and the recording of a loss position on the Camarupim project in Brazil in 2008. For 2008, the Camarupim project was estimated to complete at a significant loss due to lower than expected productivity and vessel standby delays from mechanical and weather downtime. Results for 2008 therefore include an estimate for losses on the Camarupim project through the project’s estimated completion in 2009. This compares to high profit margins obtained from the favorable resolutions of change orders and claims on projects in Mexico in 2007.

West Africa

Revenues were $152.9 million for 2008 compared to $184.7 million for 2007. This decrease of $31.8 million, or 17%, in 2008 compared to 2007 was primarily due to decreased activity in the region. In 2008, we performed two major construction projects in West Africa compared to three major construction projects in 2007. Loss before taxes was $33.5 million for 2008 compared to a loss before taxes of $5.1 million in 2007. In 2008, additional costs were incurred related to idle vessel costs from low utilization and project productivity issues related to a project in Nigeria. In addition, we recorded a $1.6 million impairment on a DSV in 2008. Exchange losses of $3.7 million primarily related to naira cash balances also negatively impacted the loss before taxes; however, this loss was partially offset by a reversal of previously accrued interest expense related to a 2008 favorable settlement of an uncertain tax position. See also Note 9 of the Notes to Consolidated Financial Statements for a discussion of tax-related challenges related to conducting operations in Nigeria.

Middle East

Revenues were $237.5 million for 2008 compared to $186.3 million during 2007. This increase of $51.2 million, or 27%, for 2008 compared to 2007 was attributable to increased activity in the region. During 2008, two major projects were in progress compared to a lower level of construction activity during much of 2007. However, loss before taxes of $75.7 million was reported during 2008 compared to income before taxes of $35.8 million for 2007 due primarily to the significant deterioration in the Berri and Qatif project in Saudi Arabia during 2008. The loss on the Berri and Qatif project is primarily due to exceptional losses in productivity and cost overruns. Results for 2008 therefore include an estimate for losses on the Berri and Qatif project through the estimated completion date in the 2009 third quarter.

Asia Pacific/India

Revenues were $223.5 million for 2008 compared to $181.2 million for 2007. This increase of $42.3 million, or 23%, for 2008 compared to 2007 was primarily attributable to higher activity during 2008. Income before taxes was $46.7 million for 2008 compared to $16.5 million for 2007. This increase in profitability of $30.2 million was primarily due to higher revenues, increased project margins, good project execution, and cost recoveries attributable to higher vessel utilization during 2008.

Utilization of Major Construction Vessels

Worldwide utilization for our major construction vessels was 44%, 49%, and 45% for the fiscal years ended December 31, 2009, 2008, and 2007, respectively. Utilization of our major construction vessels is calculated by dividing the total number of days major construction vessels are assigned to project-related work by the total number of calendar days for the period. Dive support vessels, cargo/launch barges, ancillary supply vessels and short-term chartered project-specific construction vessels are excluded from the utilization calculation. We frequently use chartered anchor handling tugs, dive support vessels and, from time to time, construction vessels in our operations. Also, most of our international contracts (which are generally larger, more complex and of longer duration) are generally bid on a lump-sum or unit-rate (vs. day-rate) basis wherein we assume the risk of performance and changes in utilization rarely impact revenues but can have an inverse relationship to changes in profitability. For these reasons, we consider utilization rates to have a relatively low direct correlation to changes in revenue and gross profit.

Industry and Business Outlook

The continued downturn in the worldwide economy is significantly impacting the offshore construction industry. Pricing pressures from potential customers and increased competition attributable to a decrease in bid activity is impacting our ability to win new project awards. Opportunities do remain and we continue to bid new projects. However, neither the duration nor severity that the impact the worldwide recession will continue to have on our operations can be predicted with certainty. We continue to expect weak demand for our services throughout 2010.

During 2010, our focus will remain on successful execution of our projects, building additional backlog, cost cutting initiatives, and cash conservation. We continue to pursue new work; however, we have not yet been successful in obtaining new project awards sufficient for the size of our existing operations. To the extent that we are not successful in building sufficient backlog, further cost cutting and cash conservation measures will be required, including closing offices, stacking idle vessels, asset sales and reducing our work force further.

As of December 31, 2009, our backlog totaled approximately $103.8 million ($82.9 million for international regions and $20.9 million for the Gulf of Mexico). The majority of this backlog is scheduled to be performed in 2010. The amount of our backlog in North America is not a reliable indicator of the level of demand for our services due to the prevalence of short-term contractual arrangements in this region.

Liquidity and Capital Resources

Overview

Cash generated from operations, a decrease in our restricted cash requirements due to the ending of our interim cash collateralization period under our Third Amended and Restated Credit Agreement (the “Revolving Credit Facility”) and proceeds from the sale of certain assets provided the major sources of funds in 2009. These sources of funds sufficiently funded our operations and capital expenditures for expanding and modernizing our fleet of vessels.

The primary uses of cash during 2009 have been for funding capital spending. We had firm capital commitments on projects, which were in progress at December 31, 2009, of approximately $358.9 million with expenditures extending into 2011, of which $244.6 million is expected to be expended during 2010, primarily for the construction of two new derrick/pipelay vessels (the Global 1200 and Global 1201) and the construction of two new SAT systems. Total 2010 capital expenditures on committed and discretionary projects are expected to be approximately $265.0 — $275.0 million. The actual capital expenditures for 2010 may differ from our expectations due to changes in existing capital project schedules and/or projected capital projects.

Cash Flows

Operating Activities — Our cash and cash equivalents increased by $57.2 million to $344.9 million at December 31, 2009, compared to $287.7 million at December 31, 2008. Net cash provided by our operating activities was $62.9 million for the year ended December 31, 2009, compared to net cash used by our operating activities of $119.2 million during 2008. This increase in net cash provided from operating activities reflects higher net income and reduced dry-docking costs, partially offset by higher working capital needs. The use of funds in 2008 was primarily attributable to the net loss from continuing operations, a net use of $17.2 million of cash to fund working capital and the cost of dry docking activities of $47.2 million.

Investing Activities — Investing activities used $1.2 million of cash in 2009, compared to $297.3 million in 2008. During 2009, cash was provided by asset sales of $26.9 million and a $93.4 million decrease in our restricted cash requirements due to the ending of our interim cash collateralization period under our Revolving Credit Facility (please refer to Note 8 of the Notes to Consolidated Financial Statements for additional information). Partially offsetting these proceeds was $122.0 million used to purchase property and equipment, resulting primarily from the expansion and upgrade to the fleet for the construction of two new derrick/pipelay vessels (the Global 1200 and Global 1201). The net cash used in 2008 was primarily due to purchases of property and equipment, totaling $267.9 million and a $93.4 million cash transfer to restricted cash as a result of the November 7, 2008 amendment to the Revolving Credit Facility. These uses of cash were partially offset by net sales of marketable securities totaling $57.6 million.

Financing Activities — Financing activities used $4.5 million of net cash in 2009 compared to using $19.3 million in 2008. The net cash used in 2009 is primarily due to the repayment of long term debt. The net cash used in 2008 is primarily due to the repurchase of our common stock under a repurchase program announced in August 2008. Approximately 3.1 million shares of company stock were repurchased in 2008 at a cost of approximately $25.6 million.

Long-Term Debt

Our long-term debt outstanding as of December 31, 2009 and 2008 includes carrying amounts of $236.9 million and $228.6 million, respectively, for the $325.0 million of 2.75% Senior Convertible Debentures which carry an interest rate of 2.75% per annum with semi-annual interest payments. These debentures are convertible into cash, and if applicable, into shares of our common stock. We may redeem all or a part of the debentures any time on or after August 1, 2014, for cash at a price equal to 100% of the principal amount of the debentures being redeemed plus accrued and unpaid interest. The holders of the debentures may require us to repurchase all or a part of their debentures for cash on August 1, 2017 and August 1, 2022 at a price equal to 100% of the principal amount of the debentures being redeemed plus accrued or unpaid interest, or upon the occurrence of certain types of fundamental changes. Our 2.75% Senior Convertible Debentures contain a default provision which permits the trustee or holders of the convertible debentures to accelerate such indebtedness in the event of our failure to pay principal when due or upon a default that results in the acceleration of any of our indebtedness in excess of $50 million. For more information, see Note 8 of the Notes to Consolidated Financial Statements.

We also maintain $61.4 million of Title XI bonds outstanding which carry an interest rate of 7.71% per annum with semi-annual principal payments of approximately $2.0 million payable each February and August until maturity in 2025. Our Title XI bonds contain a cross default provision which provides that a default of our Revolving Credit Facility is a default under our Title XI bonds which may result in our bonds becoming due and payable under certain circumstances.

Our Revolving Credit Facility provides a borrowing capacity of up to $150.0 million. As of December 31, 2009, we had no borrowings against the facility and $50.8 million of letters of credit outstanding thereunder. Due to the sale of one of the vessels mortgaged under the Revolving Credit Facility, the effective borrowing capacity under this facility at December 31, 2009 is $139.9 million. We do have the option of increasing the capacity under this facility to $150.0 million by mortgaging one of our vessels that is not currently in the collateralized vessel pool. As a result of operating performance, we did not meet the minimum fixed charge coverage ratio under the facility at September 30, 2008. On November 7, 2008, we amended our Revolving Credit Facility to temporarily require us, among other things, to cash-collateralize letters of credit and bank guarantees. During the

interim cash collateralization period, no borrowings, letters of credit, or bank guarantees unsecured by cash were available to us under the Revolving Credit Facility. As a result of our operating performance, the interim cash-collateralization period ended, effective June 30, 2009. For additional discussion see below under Liquidity Risk and Note 8 of the Notes to the Consolidated Financial Statements.

Our Revolving Credit Facility has a customary cross default provision triggered by a default of any of our other indebtedness, the aggregate principal amount of which is in excess of $5 million.

At December 31, 2009, we were in compliance with the terms of our Revolving Credit Facility. Our current financial projections indicate that we may not meet our leverage ratio covenant beginning in the second quarter of 2010 and continuing through the fourth quarter of 2010. We are currently in discussion with our lenders regarding these potential violations. If we do not meet our leverage ratio, we may be required to cash collateralize our outstanding letters of credit or seek another remedy. If we are required to cash collateralize letters of credit, it would reduce our available cash and may impact our ability to bid on future projects. Further, upon a covenant violation and the declaration of an event of default by our lenders, under the cross default provisions of our Title XI bonds (1) we may be subject to additional reporting requirements, (2) we may be subject to additional covenants restricting our operations, and (3) the Maritime Administration (“MarAd”), guarantor of the bonds, may institute procedures that could ultimately allow the bondholders the right to demand payment of the bonds from MarAd. MarAd can alternatively assume the obligation to pay the bonds when due. As we have no outstanding indebtedness under our Revolving Credit Facility, an event of default related to the covenant failure would not trigger the cross default provision of our Senior Convertible Debentures. It is not possible at this time to predict the outcome of discussions with our lenders or the effect that these potential violations may have on our financial position.

Other Indebtedness and Obligations

We also have a $16.0 million short-term credit facility at one of our foreign locations, which is secured by a letter of credit issued under our primary credit facility. At December 31, 2009, we had $0.6 million in cash overdrafts reflected in accounts payable, $4.7 million of letters of credit outstanding, and $10.7 million of credit availability under this particular credit facility.

Charters — We have a long-term charter for the Titan 2, a 408-foot self-propelled twin-hulled DP derrick ship. The vessel charter payments are approximately $6.5 million annually. The charter term expires in May 2018. This charter can be canceled by us at anytime, subject to a termination penalty of the transfer to the vessel owner of title to our dynamic positioning (“DP”) system used on the vessel. The DP system was purchased and installed on the Titan 2, at our cost, during the first quarter of 2002 for a total cost of $8.9 million, with a book value at December 31, 2009 of $2.0 million.

We have two long-term charters for MSVs. The first MSV charter, the Norman Commander, includes a fixed-term five year lease with five annual renewal options, and requires monthly payments denominated in Norwegian kroners at an annual rate of approximately 69.1 million kroners (or $11.9 million as of December 31, 2009). As of December 31, 2009, we had entered into forward foreign currency contracts that have enabled us to fulfill 94.6 million of our remaining non-cancellable Norwegian kroner obligations under this charter at an average rate of 6.27 kroners per U.S. dollar. The second MSV charter, the Olympic Challenger, includes a five year, fixed term lease with one two-year renewal option and three one-year renewal options at an annual rate of approximately $16.8 million.

Future Lease Obligations — The following table sets forth, as of December 31, 2009, our minimum rental commitments under operating leases with an initial non-cancellable term of one year or more (in thousands).

2010		$	31,555
2011			25,870
2012			19,406
2013			12,085
2014			2
Thereafter			12
Total		$	88,930

Summary of Contractual Obligations as of December 31, 2009

		Payments due by period
						Less than				1-3				3-5				More than
Contractual Obligations		Total				1 year				years				years				5 years
		(in thousands)
Long-Term Debt Principal Only(1)		$	386,380			$	3,960			$	7,920			$	332,920			$	41,580
Long-Term Debt Interest Only(1)			74,948				13,594				26,271				20,581				14,502
Operating Lease Obligations — Cancelable			60,506				6,306				13,254				14,647				26,299
Operating Lease Obligations — Non-Cancelable			88,930				31,555				45,276				12,087				12
Purchase Obligations(2)			109,219				96,643				12,576				—				—
Total		$	719,983			$	152,058			$	105,297			$	380,235			$	82,393

The contractual obligations reported above exclude our liability of $12.5 million recognized related to our provision for uncertain tax positions. We have excluded such amounts as we are unable to make a reasonably reliable estimate of the period of cash settlement with the respective taxing authorities.

Off Balance Sheet Arrangements

In the normal course of business with customers, vendors, and others, we have entered into off-balance sheet arrangements. We provide guarantees and performance, bid, and payment bonds pursuant to agreements, or in connection with bidding, to obtain such agreements to perform construction services. The aggregate amount of these guarantees and bonds at December 31, 2009 was $55.6 million in surety bonds and $52.3 million in bank guarantees and letters of credit. The surety bonds are due to expire between January 2010 and January 2011 and the bank guarantees/letters of credit are due to expire between January 2010 and July 2011.

Liquidity Risk

As a result of our operating performance, we did not meet the existing minimum fixed charge coverage ratio covenant in the Third Amended and Restated Credit Agreement (the “Revolving Credit Facility”) as of September 30, 2008. On November 7, 2008, the financial institutions participating in the Revolving Credit Facility waived compliance with the covenant condition. In consideration of this waiver, we and the participating financial institutions amended the Revolving Credit Facility to:

	•		temporarily cash-collateralize letters of credit and bank guarantees;
	•		temporarily waive compliance with certain financial covenants;
	•		temporarily prohibit share repurchases; and
	•		temporarily maintain unencumbered liquidity of $100 million.

On February 25, 2009, the Revolving Credit Facility was further amended to remove the requirement to maintain unencumbered liquidity of $100 million. The effective date of this amendment is December 31, 2008.

The length of the interim cash-collateralization period was dependent on our future financial performance and ended June 30, 2009. For the remaining duration of the Revolving Credit Facility after the cash-collateralization period, the facility was further amended to:

	•		allow for a new starting point in measuring financial performance; and
	•		permit borrowings and/or the issuance of letters of credit and bank guarantees based on a rate premium over prime rate ranging from 1.50% to 3.00% or London Interbank Offered Rate (“LIBOR”) ranging from 2.00% to 3.50% based upon certain financial ratios.

During the interim cash-collateralization period, no borrowings, letters of credit or bank guarantees unsecured by cash were available to us under the Revolving Credit Facility. All cash collateral was classified in our Consolidated Balance Sheet as Restricted Cash. As of December 31, 2009, we had no borrowing against the facility and $50.8 million in letters of credit outstanding thereunder. We also have a $16.0 million short-term credit facility at one of our foreign locations. At December 31, 2009, the available borrowing under this facility was $10.7 million.

At December 31, 2009, we were in compliance with the terms of our Revolving Credit Facility. Our current financial projections indicate that we may not meet our leverage ratio covenant beginning in the second quarter of 2010 and continuing through the fourth quarter of 2010. We are currently in discussion with our lenders regarding these potential violations. If we do not meet our leverage ratio, we may be required to cash collateralize our outstanding letters of credit or seek another remedy. If we are required to cash collateralize letters of credit, it would reduce our available cash and may impact our ability to bid on future projects. Further, upon a covenant violation and the declaration of an event of default by our lenders, under the cross default provisions of our Title XI bonds (1) we may be subject to additional reporting requirements, (2) we may be subject to additional covenants restricting our operations, and (3) the Maritime Administration (“MarAd”), guarantor of the bonds, may institute procedures that could ultimately allow the bondholders the right to demand payment of the bonds from MarAd. MarAd can alternatively assume the obligation to pay the bonds when due. As we have no outstanding indebtedness under our Revolving Credit Facility, an event of default related to the covenant failure would not trigger the cross default provision of our Senior Convertible Debentures. It is not possible at this time to predict the outcome of discussions with our lenders or the effect that these potential violations may have on our financial position.

As of December 31, 2009, approximately $42.0 million of our marketable securities were held in auction rate securities. These securities are intended to provide liquidity through an auction process that resets the applicable interest rate at predetermined intervals, allowing investors to either roll over their holdings or sell them at par value. As a result of liquidity issues in the global credit markets, our outstanding auction rate securities, as of December 31, 2009, have failed to settle at auction. Consequently, these investments are not currently liquid and we will not be able to access these funds

until a future auction of these investments is successful or a buyer is found outside the auction process. In November 2008, we accepted an auction rate security rights agreement (the “Settlement”) from UBS related to $30.8 million in par value of auction rate securities. The Settlement permits us to sell or put our auction rate securities back to UBS at par value at any time during the period from June 30, 2010 through July 2, 2012. We expect to put these auction rate securities back to UBS on June 30, 2010, the earliest date allowable under the Settlement, if not sold prior to that date.

Liquidity Outlook

During the next twelve months, we expect that balances of cash, cash equivalents, and marketable securities, supplemented by cash generated from operations will be sufficient to fund operations (including increases in working capital required to fund any increases in activity levels), scheduled debt retirement, and currently planned capital expenditures. Based on expected operating cash flows and other sources of cash, we do not believe that our reduced project backlog or the illiquidity of our investments in auction rate securities will have a material impact on our overall ability to meet liquidity needs during the next twelve months. However, a significant amount of our expected operating cash flows is based upon projects which have been identified, but not yet awarded. If we are not successful in converting a sufficient number of our bids into project awards, we may not have sufficient liquidity to meet all of our needs and may be forced to postpone or cancel capital expenditures and take other actions including closing offices, stacking idle vessels, selling assets, and further reducing our workforce. Also, our current financial projections indicate that we may not meet our leverage ratio covenant beginning in the second quarter of 2010 and continuing through the fourth quarter of 2010. Consequently, we may be required to cash collateralize our outstanding letters of credit or seek another remedy for the covenant violation. We are currently in discussion with our lenders regarding these potential violations and cannot predict the outcome these potential violations may have on our financial position. Our liquidity position could affect our ability to bid on and accept projects, particularly where the project requires a letter of credit. This could have a material adverse effect on our future results.

Our Board of Directors approved a stock repurchase program on August 4, 2008, which authorized $100.0 million for the repurchase of outstanding shares of our common stock over the next twelve- month period. Approximately 3.1 million shares of our stock were purchased in 2008 at a cost of approximately $25.6 million, leaving approximately $74.4 million remaining under the program. As a result of the November 7, 2008 amendment to the Revolving Credit Facility, we were prohibited from additional share repurchases. The restriction against additional shares repurchases ended, effective June 30, 2009, as a result of our operating performance; however, no additional shares were repurchased under the plan before it ended on August 4, 2009.

Capital expenditures for 2010 are expected to be between $265.0 million and $275.0 million. This range includes expenditures for the Global 1200, Global 1201, two new saturation diving systems, and various vessel upgrades. In addition, we will continue to evaluate the divesture of assets that are no longer critical to operations to reduce operating costs and help preserve a solid financial position.

Our long-term liquidity will ultimately be determined by our ability to earn operating profits which are sufficient to cover our fixed costs, including scheduled principal and interest payments on debt, and to provide a reasonable return on shareholders’ investment. Our ability to earn operating profits in the long run will be determined by, among other things, the sustained viability of the oil and gas energy industry, commodity price expectations for crude oil and natural gas, the competitive environment of the markets in which we operate, and our ability to win bids and manage awarded projects to successful completion.

Recent Accounting Pronouncements

SFAS 168. In June 2009, the Financial Accounting Standards Board (“FASB”) issued Statement of Financial Accounting Standards (“SFAS”) No. 168, “The FASB Accounting Standards Codification and the Hierarchy of Generally Accepted Accounting Principles” (“SFAS 168”) (ASC Topic 105). SFAS 168 establishes the FASB Accounting Standards Codification^TM (the “Codification” or “ASC”) as the single source of authoritative, nongovernmental generally accepted accounting principles (“GAAP”), other than guidance issued by the SEC. ASC does not change GAAP; it introduces a new structure for organizing GAAP and limits the hierarchy to two levels-authoritative and nonauthoritative. Subsequent issuances of new standards will be in the form of Accounting Standards Updates (“ASU”) that will be included in ASC. ASC is effective for interim or annual financial periods ending after September 15, 2009. We adopted ASC beginning on July 1, 2009 and the principal impact on our financial statements is limited to disclosures as all future references to authoritative accounting literature will be referenced in accordance with the Codification. In order to ease the transition to the Codification, we are providing the Codification cross reference alongside the references to the standards issued and adopted prior to the adoption of the Codification.

SFAS 167. In June 2009, the FASB issued SFAS No. 167, “Amendments to FASB Interpretation No. 46(R), Consolidation of Variable Interest Entities” (ASC Topic 810-10). This updated guidance requires an analysis to determine whether a variable interest gives the entity a controlling financial interest in a variable interest entity. It also requires an ongoing reassessment and eliminates the quantitative approach previously required for determining whether an entity is the primary beneficiary. This update is codified in ASU No. 2009-17 and is effective for our fiscal year beginning January 1, 2010. We are currently evaluating the impact of adopting this guidance on our consolidated financial statements.

SFAS 165. In May 2009, the FASB issued SFAS No. 165, “Subsequent Events” (ASC 855). This guidance establishes general standards of accounting for and disclosures of events that occur after the balance sheet date but before financial statements are issued or are available to be issued. This guidance is effective for interim or annual financial periods ending after June 15, 2009. We adopted this guidance beginning April 1, 2009. The adoption of this guidance did not have a material impact on our financial statements. See Note 22 of the Notes to the Consolidated Financial Statements for disclosures required by this guidance.

SFAS 161. In March 2008, the FASB issued SFAS No. 161, “Disclosures about Derivative Instruments and Hedging Activities” (ASC 815-10-50). This guidance requires specific disclosures regarding the location and amounts of derivative instruments in our financial statements, how derivative instruments and related hedged items are accounted for, and how derivative instruments and related hedged items affect our financial position, financial performance, and cash flows. This guidance is effective for financial statements issued for fiscal years and interim periods beginning after November 15, 2008. We adopted this guidance beginning January 1, 2009. See Note 7 of the Notes to the Consolidated Financial Statements for disclosures required by this guidance.

ASU No. 2010-06. In January 2010, the FASB issued ASU No. 2010-06 which amends ASC Topic 820 to add new disclosure requirements about recurring and nonrecurring fair value measurements including significant transfers into and out of Level 1 and Level 2 fair value measurements and information on purchases, sales, issuances, and settlements on a gross basis in the reconciliation of Level 3 fair value measurements. It also clarifies existing fair value disclosures about the level of disaggregation and about inputs and valuation techniques used to measure fair value. This guidance is effective for reporting periods beginning after December 15, 2009, except for the Level 3 reconciliation disclosures which are effective for reporting periods beginning after December 15, 2010. We do not expect the adoption of this guidance to have a material impact on our consolidated financial statements.

ASU No. 2009-05. In August 2009, the FASB issued ASU No. 2009-05 which amends Fair Value Measurements and Disclosures — Overall (ASC Topic 820-10) to provide guidance on the fair value measurement of liabilities. This update requires clarification for circumstances in which a quoted price in an active market for the identical liability is not available. A reporting entity is required to measure fair value using one or more of the following techniques: 1) a valuation technique that uses either the quoted price of the identical liability when traded as an asset or quoted prices for similar liabilities when traded as an asset; or 2) another valuation technique that is consistent with the principles in ASC Topic 820 such as the income and market approach to valuation. The amendment in this update also clarifies

that when estimating the fair value of a liability, a reporting entity is not required to include a separate input or adjustment to other inputs relating to the existence of a restriction that prevents the transfer of the liability. This update further clarifies that if the fair value of a liability is determined by reference to a quoted price in an active market for an identical liability, that price would be considered a Level 1 measurement in the fair value hierarchy. Similarly, if the identical liability has a quoted price when traded as an asset in an active market, it is also a Level 1 fair value measurement if no adjustments to the quoted price of the asset are required. We adopted this guidance beginning October 1, 2009. See Note 3 of the Notes to the Consolidated Financial Statements for disclosures required by this guidance.

Critical Accounting Policies and Estimates

The preparation of our consolidated financial statements requires us to make judgments and estimates. We base our estimates on historical experience and on various other assumptions that are believed to be reasonable under the circumstances, the results of which form the basis for making judgments about the carrying values of assets and liabilities that are not readily apparent from other sources. Actual results may differ from these estimates under different assumptions or conditions. We believe the following critical accounting policies affect our more significant judgments and estimates used in the preparation of our consolidated financial statements.

Revenue Recognition

Revenues from construction contracts, which are generally recognized using the percentage-of-completion method, are measured by relating the actual cost of work performed to date to the current estimated total cost of the project (the cost-to-cost option of the percentage-of-completion method). The use of this method is based on our experience to be able to make reasonably dependable estimates of the cost to complete our projects. Total estimated costs are affected by operating efficiency, changes in expected cost of materials and labor, adverse market conditions, and other factors that could affect the timing of revenue recognition and/or the overall profitability of a project. Significant changes in cost estimates could possibly result in a contract loss. Anticipated losses on contracts are recorded in full in the period in which they become evident.

In addition, we include claims and unapproved change orders, to the extent of costs incurred, in contract revenues when (1) the contract or other evidence provides a legal basis for the claim, (2) additional costs are not the result of deficiencies in our performance, (3) costs are identifiable, and (4) evidence supporting the claim is objective and verifiable. We actively negotiate our claims and change orders with our customers and the outcome of the negotiations has an impact on profitability of the project. We continually monitor and assess the collectability of our contract revenues and receivables, and make the appropriate allowances when necessary.

Receivables

Our receivables include billed and unbilled receivables, and often include claims and changes orders. We recognize claims and unapproved change orders to the extent of costs incurred, and when we believe collection is probably and reasonably estimated. We continually monitor and evaluate our receivables for collectability. When we become aware of an uncollectible receivable, a specific reserve for bad debt expense is estimated and recorded, which reduces the receivable balance. We believe our allowance for doubtful accounts is adequate to cover anticipated losses.

Property and Equipment

Long-lived assets held and used (primarily marine vessels and related equipment) are reviewed for impairment whenever events or changes in circumstances indicate that the carrying amount of an asset may not be recoverable. We assess the recoverability of long-lived assets by determining whether the carrying values of an asset group can be recovered through projected net cash flows, undiscounted and without interest charges, based on expected operating results over the remaining life of the asset group. The cash flow estimates are based on historical data adjusted for management estimates of future market performance that rely on existing market data, industry-wide trends, and expected vessel day- rates, utilization, and margins. Management’s estimates may vary considerably from actual outcomes due to

future adverse market conditions, poor operating results, or other factors that could result in our inability to recover the current carrying value of the long-lived asset, thereby possibly requiring an impairment charge in the future.

We depreciate the majority of our vessels using the units-of-production method based on the estimated operating days of each vessel. Our depreciation expense calculated under the units-of-production method may be less than, equal to or greater than depreciation expense calculated under the straight-line method in any period. The annual depreciation based on estimated operating days of each vessel will be at least 20% of annual straight-line depreciation and 40% of cumulative straight-line depreciation. (See Note 1 of the Notes to Consolidated Financial Statements for additional information related to our policy regarding depreciation.)

Goodwill

Goodwill represents the excess of cost over the fair value of net assets acquired and is tested for impairment on an annual basis, on January 1 or when circumstances indicate that impairment may exist. The carrying amount of goodwill as of December 31, 2009 and 2008 was approximately $37.4 million, and is primarily attributable to our Latin America segment.

Income Taxes

Deferred tax assets in excess of related valuation reserves require considerable judgments and estimates regarding estimated future taxable income and ongoing prudent and feasible tax planning strategies. These estimates and judgments include some degree of uncertainty and changes in these estimates and assumptions could require us to adjust the valuation allowances for our deferred tax assets. Historically, changes to valuation allowances have been caused by major changes in the business cycle in certain countries and changes in local country law. The ultimate realization of the deferred tax assets depends on the generation of sufficient taxable income in the applicable taxing jurisdictions.

We operate in many countries under various legal forms. As a result, we are subject to the jurisdiction of numerous domestic and foreign tax authorities, as well as to tax agreements and treaties among these governments. Our operations in these different jurisdictions are taxed on various bases: actual income before taxes, deemed profits (which are generally determined using a percentage of revenues rather than profits) and withholding taxes based on revenue. Determination of taxable income in any jurisdiction requires the interpretation of the related tax laws and regulations and the use of estimates and assumptions regarding significant future events, such as the amount, timing, and character of deductions, permissible revenue recognition methods under the tax law, and the sources and character of income and tax credits. Changes in tax laws, regulations, agreements and treaties, foreign currency exchange restriction or our level of operations or profitability in each taxing jurisdiction could have an impact upon the amount of income taxes that we provide during any given year. A 1% change in our effective tax rate would impact our net income by $0.9 million.

Our tax filings for various periods are subjected to audit by tax authorities in most jurisdictions where we conduct business. These audits may result in assessments of additional taxes that are resolved with the authorities or potentially through the courts. We believe that these assessments may occasionally be based on arbitrary and even erroneous interpretations of local tax law. We have received tax assessments from various taxing authorities and are currently at varying stages of appeals and/or litigation regarding these matters. We have provided for the amounts we believe will ultimately result from these proceedings. We believe we have substantial defenses to the questions being raised and will pursue all legal remedies should an unfavorable outcome result. However, resolution of these matters involves uncertainties, and there are no assurances that the outcomes will be favorable.

In certain situations, we provide for taxes where assessments have not been received. In those situations, we consider it more likely than not that the taxes ultimately payable will not exceed those amounts reflected in filed tax returns. Accordingly, taxes are provided in those situations under the current guidance on accounting for uncertainty in income taxes. Future events, such as changes in the facts or tax law, judicial decisions regarding existing law or a favorable audit outcome, may later

indicate the assertion of additional taxes is no longer more likely than not to occur. In such circumstances, it is possible that taxes previously provided would be released.

ITEM 7A. QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK

Due to the international nature of our business operations and the interest rate fluctuation, we are exposed to certain risks associated with changes in foreign currency exchange rates and interest rates.

Foreign Currency Risk

Most of our business operations are conducted in foreign countries that use different currencies. As such, we use natural hedging techniques to manage the foreign exchange risks associated with our foreign operations by contracting, to the extent possible, international construction jobs to be payable in U.S. dollars. We continually monitor the foreign exchange risk associated with our foreign operations and will hedge these exposures when conditions warrant. We also, to the extent possible, maintain cash balances at foreign locations in U.S. dollar accounts. We believe that a significant change in currency rates in the regions in which we operate could have a significant effect on our results of operations.

From time to time, we also make significant contractual commitments which are denominated in foreign currencies. At December 31, 2009, we had significant contractual commitments which were denominated in Norwegian kroners, Singapore dollars, and Euros. We entered into forward foreign currency contracts, for non-trading purposes, to mitigate our currency risk with respect to our contractual obligations denominated in Norwegian kroners and Singapore dollars, as further described.

Our Norwegian kroner commitments at December 31, 2009, which result from a long-term vessel charter, will require the use of 106.5 million kroners (or $18.3 million as of December 31, 2009) over the next two years. As of December 31, 2009, we had hedged 94.6 million of our non-cancellable Norwegian kroner commitments related to these vessel charters at an average rate of 6.27 kroners per dollar. Consequently, a gain or loss from this forward foreign currency contract would be offset by the gain or loss on the underlying commitment and, therefore would not have an impact on our future earnings or cash flows. A 1% increase in the value of the Norwegian kroner at December 31, 2009 would have negligible impact on the value of the 11.9 million unhedged portion of these commitments.

The estimated cost to complete capital expenditure projects in progress at December 31, 2009 will require an aggregate commitment of 69.2 million Singapore dollars (or $49.2 million as of December 31, 2009). As of December 31, 2009, we had hedged 18.9 million of these Singapore dollar commitments at an average rate of 1.51 Singapore dollars per U.S. dollar. A 1% increase in the value of the Singapore dollar at December 31, 2009 will increase the dollar value of the remaining 50.3 million unhedged commitments by approximately $0.4 million.

As of December 31, 2009, we were committed to purchase certain equipment which will require the use of Euros 7.0 million (or $10.0 million as of December 31, 2009) over the next two years. A 1% increase in the value of the Euro will increase the dollar value of these commitments by approximately $0.1 million.

Interest Rate Risk

We are exposed to changes in interest rates with respect to our investments in cash equivalents and marketable securities. Our investments consist primarily of commercial paper, bank certificates of deposit, money market funds, and treasury securities. We also continue to hold tax-exempt auction rate debt securities. These investments are subject to changes in short-term interest rates. We invest in high grade investments with a credit rating of AA-/Aa3 or better, with a main objective of preserving capital. A 0.5% increase or decrease in the average interest rate of our cash equivalents and marketable securities would have an approximate $1.9 million impact on our pre-tax annualized interest income.

We are also exposed to interest rate risk on any borrowings against our Revolving Credit Facility with variable interest rate provisions. At December 31, 2009, there were no outstanding borrowings under the Revolving Credit Facility.

Our Senior Convertible Debentures mature in 2027 and carry a fixed interest rate of 2.75%, and our United States Government Guaranteed Title XI Ship Financing Bonds mature in 2025 and carry a fixed interest rate of 7.71%. Changes in interest rates do not have an impact on the interest expense for this indebtedness.

ITEM 8. FINANCIAL STATEMENTS AND SUPPLEMENTARY DATA

REPORT OF INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM

To the Board of Directors and Shareholders
of Global Industries, Ltd.

We have audited the accompanying consolidated balance sheets of Global Industries, Ltd. and subsidiaries (the “Company”) as of December 31, 2009 and 2008, and the related consolidated statements of operations, shareholders’ equity, and cash flows for each of the three years in the period ended December 31, 2009. Our audits also included the financial statement schedule listed in the Table of Contents under Item 15. These financial statements and financial statement schedule are the responsibility of the Company’s management. Our responsibility is to express an opinion on the financial statements and financial statement schedule based on our audits.

We conducted our audits in accordance with the standards of the Public Company Accounting Oversight Board (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, such consolidated financial statements present fairly, in all material respects, the financial position of Global Industries, Ltd. and subsidiaries as of December 31, 2009 and 2008, and the results of their operations and their cash flows for each of the three years in the period ended December 31, 2009, in conformity with accounting principles generally accepted in the United States of America. Also, in our opinion, such financial statement schedule, when considered in relation to the basic consolidated financial statements taken as a whole, presents fairly, in all material respects, the information set forth therein.

We have also audited, in accordance with the standards of the Public Company Accounting Oversight Board (United States), the Company’s internal control over financial reporting as of December 31, 2009, based on the criteria established in Internal Control-Integrated Framework issued by the Committee of Sponsoring Organizations of the Treadway Commission and our report dated February 26, 2010 expressed an unqualified opinion on the Company’s internal control over financial reporting.

/s/ DELOITTE & TOUCHE LLP
Houston, Texas
February 26, 2010

GLOBAL INDUSTRIES, LTD.
CONSOLIDATED BALANCE SHEETS
(in thousands)

		December 31,
		2009				2008
ASSETS
Current Assets
Cash and cash equivalents		$	344,855			$	287,669
Restricted cash			1,139				94,516
Marketable securities			30,750				—
Accounts receivable — net of allowance of $2,765 for 2009 and $12,070 for 2008			160,273				180,018
Unbilled work on uncompleted contracts			92,569				86,011
Contract costs incurred not yet recognized			489				11,982
Deferred income taxes			2,945				7,223
Assets held for sale			16,152				2,181
Prepaid expenses and other			31,596				44,585
Total current assets			680,768				714,185
Property and Equipment, net			722,819				599,078
Other Assets
Marketable securities — long-term			11,097				42,375
Accounts receivable — long-term			12,294				22,246
Deferred charges, net			49,866				70,573
Goodwill			37,388				37,388
Other			9,961				3,508
Total other assets			120,606				176,090
Total		$	1,524,193			$	1,489,353
LIABILITIES AND SHAREHOLDERS’ EQUITY
Current Liabilities
Current maturities of long term debt		$	3,960			$	3,960
Accounts payable			192,008				207,239
Employee-related liabilities			18,079				26,113
Income taxes payable			45,301				38,649
Accrued anticipated contract losses			322				35,055
Other accrued liabilities			15,489				22,275
Total current liabilities			275,159				333,291
Long-Term Debt			294,366				289,966
Deferred Income Taxes			69,998				64,020
Other Liabilities			15,171				13,266
Commitments and Contingencies			—				—
Shareholders’ Equity
Common stock, $0.01 par value, 150,000 authorized, and 119,989 and 119,650 shares issued at December 31, 2009 and 2008, respectively			1,200				1,197
Additional paid-in capital			513,353				509,345
Retained earnings			468,430				394,699
Treasury stock at cost, 6,130 shares			(105,038	)			(105,038	)
Accumulated other comprehensive loss			(8,446	)			(11,393	)
Total shareholders’ equity			869,499				788,810
Total		$	1,524,193			$	1,489,353

See notes to consolidated financial statements.

GLOBAL INDUSTRIES, LTD.
CONSOLIDATED STATEMENTS OF OPERATIONS
(in thousands, except per share data)

		Year Ended December 31,
		2009				2008				2007
Revenues		$	914,348			$	1,070,988			$	992,513
Cost of operations			755,301				1,084,581				719,768
Gross profit (loss)			159,047				(13,593	)			272,745
Loss on asset impairments			1,186				2,551				141
Net gain on asset disposal			(8,351	)			(1,695	)			(4,220	)
Selling, general, and administrative expenses			69,165				95,364				81,275
Operating income (loss)			97,047				(109,813	)			195,549
Interest income			2,020				14,477				27,966
Interest expense			(13,061	)			(16,439	)			(15,463	)
Other income (expense), net			7,302				(641	)			3,826
Income (loss) before income taxes			93,308				(112,416	)			211,878
Income taxes			19,577				6,775				53,234
Net income (loss)		$	73,731			$	(119,191	)		$	158,644
Earnings (loss) per common share:
Basic		$	0.65			$	(1.05	)		$	1.37
Diluted		$	0.64			$	(1.05	)		$	1.35
Weighted Average Shares Outstanding:
Basic			112,631				113,647				113,833
Diluted			113,125				113,647				115,515

See notes to consolidated financial statements.

GLOBAL INDUSTRIES, LTD.
CONSOLIDATED STATEMENTS OF SHAREHOLDERS’ EQUITY
(in thousands, except share data)

																		Accumulated
										Additional								Other
		Common Stock								Paid-In				Treasury				Comprehensive				Retained
		Shares				Amount				Capital				Stock				Loss				Earnings				Total
Balance at Jan. 1, 2007			116,252,411			$	1,162			$	379,297			$	(644	)		$	(8,084	)		$	353,834			$	725,565
Net income			—				—				—				—				—				158,644				158,644
Cumulative effect of adopting ASC 740-10-05			—				—				—				—				—				1,412				1,412
Issuance of Convertible Debentures			—				—				68,240				—				—				—				68,240
Amortization of unearned stock compensation			—				—				14,059				—				—				—				14,059
Restricted stock issues, net			203,816				2				2,564				—				—				—				2,566
Exercise of stock options			1,544,559				16				17,669				—				—				—				17,685
Tax effect of exercise of stock options			—				—				4,777				—				—				—				4,777
Treasury stock purchased			—				—				—				(76,613	)			—				—				(76,613	)
Other comprehensive income			—				—				—				—				4,181				—				4,181
Balance at Dec. 31, 2007			118,000,786			$	1,180			$	486,606			$	(77,257	)		$	(3,903	)		$	513,890			$	920,516
Net loss			—				—				—				—				—				(119,191	)			(119,191	)
Amortization of unearned stock compensation			—				—				8,375				—				—				—				8,375
Restricted stock issues, net			681,446				7				2,648				—				—				—				2,655
Exercise of stock options			967,628				10				8,595				—				—				—				8,605
Tax effect of exercise of stock options			—				—				3,121				—				—				—				3,121
Treasury stock purchased			—				—				—				(27,781	)			—				—				(27,781	)
Other comprehensive income			—				—				—				—				(7,490	)			—				(7,490	)
Balance at Dec. 31, 2008			119,649,860			$	1,197			$	509,345			$	(105,038	)		$	(11,393	)		$	394,699			$	788,810
Net income			—				—				—				—				—				73,731				73,731
Amortization of unearned stock compensation			—				—				4,946				—				—				—				4,946
Restricted stock issues, net			301,749				3				369				—				—				—				372
Exercise of stock options			37,133				—				202				—				—				—				202
Tax effect of exercise of stock options			—				—				(1,509	)			—				—				—				(1,509	)
Other comprehensive income			—				—				—				—				2,947				—				2,947
Balance at Dec. 31, 2009			119,988,742			$	1,200			$	513,353			$	(105,038	)		$	(8,446	)		$	468,430			$	869,499