Helix Energy Solutions Group, Inc.

Good morning and welcome to today's conference call to discuss the combination of Helix Energy Solutions and Hornbeck Offshore, as well as Helix's first quarter 2026 results. Please note this event is being recorded. At this time, all participants are in listen-only mode. Should you need assistance, please signal a conference specialist by pressing the star key followed by zero. After today's presentation, there will be a question and answer session. To ask a question, you may press star, then one on a touch-tone phone. To withdraw your question, please press star, then two. You can find today's investor presentation as well as the press release regarding the transaction at each company's investor relations website. The press release regarding Helus's first quarter 2025 results can be found at Helus's investor relations website as well as the earning presentation. I would now like to turn the call over to Eric Steffel, Executive Vice President and Chief Financial Officer at Helix. Please go ahead.

Thank you and good morning. As highlighted, any forward-looking statements we make during today's conference call are given in the context of today only and are subject to important risks as discussed in the presentation. Actual results and events could differ materially from those discussed here. Please also refer to the additional information discussed on this slide as well as in our SEC filings. I'll now turn to a brief overview of Helix's first quarter 2026 results. Helix's team delivered another well-executed quarter, safely and efficiently providing our customers with world-class service. Our first quarter results reflect expected seasonal levels during the winter in the North Sea and Gulf of America shelf, impacting our well intervention, robotics, and shallow water abandonment segments and they reflect the cost of the successful workover of Thunderhawk Field. Revenues for the first quarter were $288 million, with a gross profit of $9 million, resulting in a net loss of $13 million. Adjusted EBITDA for the quarter was $32 million, with operating cash flow of $62 million, resulting in free cash flow of $59 million. Highlights for the quarter include strong utilization on the Q4 thousand, performing well intervention work at improved rates, the successful work over and recommencement of production of our Thunderhawk field, a return to a two vessel market in the North Sea with the sea well reactivation and return to operations, good utilization expected in 2026, and strong cash flow generation of 59 million as I shared earlier. With that, our cash position and liquidity remain strong with $501 million of cash and $612 million of liquidity at the end of the quarter. Overall, our first quarter results were as expected, perhaps even marginally better than expected. The current macro environment remains uncertain, but we are seeing some positive developments in the markets we serve. Oil supply disruptions, increased commodity prices, and increased regulatory enforcement in the North Sea are providing positive catalysts that may drive increased activity by our customers for the balance of 25 and into 26 and into 27. We also expect momentum to continue to build in the offshore market. With the results we delivered in Q1 and supported by our backlog and several key contracts, we are maintaining our guidance for 2026. Revenue of 1.2 billion to 1.4 billion in line with 2025. EBITDA of $230 to $290 million impacted by the Thunderhawk workover in Q1 and the upcoming C-HUX-1 docking. CAPEX of $70 million to $80 million. Primarily a mix of inventory maintenance on our vessels and intervention systems and fleet renewal by robotics ROVs. Pre-cash flow of $100 to $160 million. We expect continued meaningful pre-cash flow generation with variability driven by ultimate working capital movements. Key forecast drivers for our annual guidance include second half utilization on the Q4,000 and Q7,000, late season North Sea intervention market, strong markets for our robotic fleets, and the stable shallow water abandonment segment. Our quarterly financial performance in 2026 is expected to follow the same cadence as previous year's results, with the second and third quarters being our most active quarters, and the first and fourth quarters impacted by winter weather. Our balance sheet is strong, 310 million of funded debt, 501 million of cash, and a strong cash flow generation expected in 2026. If you have any questions on our quarterly results, our outlook for 2026, please feel free to reach out to our team directly. With that, we will transition to the transaction announcement portion of the call. For that, I am joined by Bill Transier, Helix's Chairman of the Board, Scotty Sparks, Helix's Executive Vice President and Chief Operating Officer, Todd Hornbeck, Hornbeck's Chairman, President, and Chief Executive Officer, Also joining us for the question and answer portion of the call will be Jim Hart, Hornbeck's Executive Vice President and Chief Financial Officer, and Potter Adam, Hornbeck's Senior Vice President of Finance. Now, before I take it over to Bill, I do want to note we have slides supporting the following information on each company's investor relations website. So please feel free to refer to those as we go through the call. With that, Bill, over to you.

Thanks, Eric. By combining Helix and Hornbeck, we're bringing together two market leaders and establishing a premier integrated offshore services company poised to create value for current shareholders of both Hornbeck and Helix. There are many compelling benefits to this combination. First, the strategic combination will create a recognized leader in offshore operations with a diversified and expanded high-specification fleet of specialty vessels supported by subsea robotics, well intervention, and technical service capabilities, including trenching subsea pipelines and cables. Also, the combined company will provide innovative and integrated subsea and marine transportation solutions to customers across deepwater energy, defense, and renewables, thereby expanding service offerings moving forward. Further, Combined Helix's Well intervention and robotic vessels with Hornbeck's specialty and ultra-high specification offshore support vessels will allow us to offer a complementary end-to-end service offering that will materially expand the combined company's ability to meet a broader share of customers' deepwater needs spanning the offshore cycle. All of this, in combination with the significant annual revenue and cost synergies the transaction is expected to generate, of $75 million or more within three years following the close make for a strong combination rationale. We'll dig deeper into the strategic and financial benefits shortly, and I do want to cover the terms of the transaction in more detail too. First, I would be remiss if I didn't take the opportunity to acknowledge Owen Kratz, Helix's President and Chief Executive Officer, for the significant role he has held in building Helix into what it is today. Owen announced last year his plan to retire from Helix. I'm sure you saw his quote in the press release reiterating his support for the transaction. He has agreed to support Todd through the close of the deal and will remain available thereafter as needed. He, along with the entire executive management team, are committed to getting this combination across the line. With that, I'll turn to the highlights of the transactions. This is structured as an all-stock transaction. which will allow shareholders from both sides to participate in the significant upside potential of the combined company. The terms of the agreement, which are outlined in the press release we issued this morning, have been approved by the boards of directors of both companies. At closing, which we expect to occur in the second half of 2026, subject to approval by Helix shareholders, the receipt of applicable regulatory approvals, and the satisfaction of other customary closing conditions, Helix shareholders will own approximately 45% of the combined company, and Hornbeck shareholders will have approximately 55% ownership. I will note the parties representing a significant majority of the ownership of Hornbeck, including Ares Management Funds, have delivered written consents approving the transaction. Through this combination, we'll bring together two best-in-class teams with aligned cultures. Following the close, Todd Hornbeck will serve as President and Chief Executive Officer of the Combined Company. The Combined Company's Board of Directors will comprise seven directors, three of whom will be from Helix and four from Hornbeck, including Todd. I will serve as Chairman of the Combined Company's Board. Post-closing, the Combined Company will operate under the Hornbeck Offshore Service's name and trade on the New York Stock Exchange under the ticker symbol HOS. With the Helix brand to be retained for well intervention services, the combined company's headquarters will be in Houston, Texas and Covington, Louisiana. I also want to touch on why we're stronger and more competitive together as a combined company. In 2025, Helix had revenue and EBITDA of $1.3 billion and $272 million respectively, with more than $500 million in cash at the end of the first quarter. When you include Hornbeck's 2025 annual results, the combined company will increase revenue and EBITDA by 56% and 106% respectively. As well, we will have incremental growth drivers of two new-build MPSVs and 23 vessels that will be available for reactivation. In summary, we believe this unique combination is a compelling opportunity to enhance value for Helix's shareholders