Note 23 — Condensed Consolidated Guarantor and Non-Guarantor Financial Information

The payment of obligations under the Senior Unsecured Notes is guaranteed by all of our restricted domestic subsidiaries ("Subsidiary Guarantors") except for Cal Dive I-Title XI, Inc. Cal Dive and its subsidiaries were never guarantors of our Senior Unsecured Notes. Each of these Subsidiary Guarantors is included in our consolidated financial statements and has fully and unconditionally guaranteed the Senior Unsecured Notes on a joint and several basis. As a result of these guaranty arrangements, we are required to present the following condensed consolidating financial information. The accompanying guarantor financial information is presented on the equity method of accounting for all periods presented. Under this method, investments in subsidiaries are recorded at cost and adjusted for our share in the subsidiaries' cumulative results of operations, capital contributions and distributions and other changes in equity. Elimination entries relate primarily to the elimination of investments in subsidiaries and associated intercompany balances and transactions.

HELIX ENERGY SOLUTIONS GROUP, INC.

CONDENSED CONSOLIDATING BALANCE SHEETS

(in thousands)


	As of December 31, 2011
		Helix			Guarantors		Non-Guarantors			Consolidating Entries			Consolidated
ASSETS
Current assets:
Cash and cash equivalents	$	495,484		$	2,434	$	48,547		$	—		$	546,465
Accounts receivable, net		79,290			117,767		41,724			—			238,781
Unbilled revenue		10,530			155		26,690			—			37,375
Income taxes receivable		80,388			—		—			(80,388	)		—
Other current assets		68,627			48,661		10,159			(5,826	)		121,621
Total current assets		734,319			169,017		127,120			(86,214	)		944,242
Intercompany		(147,187	)		315,821		(102,826	)		(65,808	)		—
Property and equipment, net		230,946			1,422,326		682,899			(4,844	)		2,331,327
Other assets:
Equity investments in unconsolidated affiliates		—			—		175,656			—			175,656
Equity investments in affiliates		1,952,392			37,239		—			(1,989,631	)		—
Goodwill, net		—			45,107		17,108			—			62,215
Other assets, net		53,425			36,453		16,809			(37,780	)		68,907
Due from subsidiaries/parent		64,655			430,496		—			(495,151	)		—
	$	2,888,550		$	2,456,459	$	916,766		$	(2,679,428	)	$	3,582,347

LIABILITIES AND SHAREHOLDERS' EQUITY
Current liabilities:
Accounts payable	$	39,280		$	82,750	$	25,013		$	—		$	147,043
Accrued liabilities		115,921			97,692		26,350			—			239,963
Income taxes payable		—			97,692		217			(96,616	)		1,293
Current maturities of long-term debt		3,000			—		10,377			(5,500	)		7,877
Total current liabilities		158,201			278,134		61,957			(102,116	)		396,176
Long-term debt		1,042,155			—		105,289			—			1,147,444
Deferred income taxes		231,255			88,625		103,552			(5,822	)		417,610
Asset retirement obligations		—			161,208		—			—			161,208
Other long-term liabilities		4,150			4,647		571			—			9,368
Due to parent		—			—		98,285			(98,285	)		—
Total liabilities		1,435,761			532,614		369,654			(206,223	)		2,131,806
Convertible preferred stock		1,000			—		—			—			1,000
Total equity		1,451,789			1,923,845		547,112			(2,473,205	)		1,449,541
	$	2,888,550		$	2,456,459	$	916,766		$	(2,679,428	)	$	3,582,347

HELIX ENERGY SOLUTIONS GROUP, INC.

CONDENSED CONSOLIDATING BALANCE SHEETS

(in thousands)


	As of December 31, 2010
		Helix		Guarantors		Non-Guarantors			Consolidating Entries			Consolidated
ASSETS
Current assets:
Cash and cash equivalents	$	376,434	$	3,294	$	11,357		$	—		$	391,085
Accounts receivable, net		61,846		91,659		23,788			—			177,293
Unbilled revenue		11,990		—		37,421			—			49,411
Income taxes receivable		19,334		—		7,195			(20,430	)		6,099
Other current assets		63,306		49,557		12,889			(8,786	)		116,966
Total current assets		532,910		144,510		92,650			(29,216	)		740,854
Intercompany		1,906		263,920		(171,513	)		(94,313	)		—
Property and equipment, net		217,153		1,605,906		709,082			(5,061	)		2,527,080
Other assets:
Equity investments in unconsolidated affiliates		—		—		187,031			—			187,031
Equity investments in affiliates		1,998,289		29,899		—			(2,028,188	)		—
Goodwill, net		—		45,107		17,387			—			62,494
Other assets, net		43,971		38,324		21,900			(29,634	)		74,561
Due from subsidiaries/parent		95,398		105,434		—			(200,832	)		—
	$	2,889,627	$	2,233,100	$	856,537		$	(2,387,244	)	$	3,592,020

LIABILITIES AND SHAREHOLDERS' EQUITY
Current liabilities:
Accounts payable	$	60,308	$	56,107	$	42,966		$	—		$	159,381
Accrued liabilities		58,074		107,874		32,289			—			198,237
Income taxes payable		—		36,678		—			(36,678	)		—
Current maturities of long-term debt		4,326		—		14,301			(8,448	)		10,179
Total current liabilities		122,708		200,659		89,556			(45,126	)		367,797
Long-term debt		1,237,587		—		110,166			—			1,347,753
Deferred income taxes		185,453		135,101		98,968			(5,883	)		413,639
Assets retirement obligations		—		170,410		—			—			170,410
Other long-term liabilities		1,421		3,691		665			—			5,777
Due to parent		—		—		120,884			(120,884	)		—
Total liabilities		1,547,169		509,861		420,239			(171,893	)		2,305,376
Convertible preferred stock		1,000		—		—			—			1,000
Total equity		1,341,458		1,723,239		436,298			(2,215,351	)		1,285,644
	$	2,889,627	$	2,233,100	$	856,537		$	(2,387,244	)	$	3,592,020

HELIX ENERGY SOLUTIONS GROUP, INC.

CONDENSED CONSOLIDATING STATEMENTS OF OPERATIONS

(in thousands)


	Year Ended December 31, 2011
		Helix			Guarantors			Non-Guarantors			Consolidating Entries			Consolidated

Net revenues		$	84,748		$	1,059,255		$	367,114		$	(112,510	)	$	1,398,607
Cost of sales			72,902			673,415			289,462			(111,281	)		924,498
Oil and gas impairments			—			112,636			19,967			—			132,603
Exploration expense			—			10,914			—			—			10,914
Gross profit (loss)			11,846			262,290			57,685			(1,229	)		330,592
Gain on sale of assets, net			(6	)		4,531			—			—			4,525
Selling, general and administrative expenses			(74,205	)		(38,915	)		12,101			1,430			(99,589	)
Loss from operations			(62,365	)		227,906			69,786			201			235,528
Equity in earnings of unconsolidated affiliates			—			—			22,215			—			22,215
Equity in earnings (losses) of affiliates			262,990			7,340			—			(270,330	)		—
Gain on investment in Cal Dive common stock			753			—			—			—			753
Other than temporary loss on equity investments			—			—			(10,563	)		—			(10,563	)
Net interest expense and other			(158,299	)		(32,345	)		67,181			23,510			(99,953	)
Income before income taxes			43,079			202,901			148,619			(246,619	)		147,980
(Benefit) provision for income taxes			(63,242	)		69,890			8,186			69			14,903
Net income (loss), including noncontrolling interests			106,321			133,011			140,433			(246,688	)		133,077
Net income applicable to noncontrolling interests			—			—			—			(3,098	)		(3,098	)
Net income (loss) applicable to Helix			106,321			133,011			140,433			(249,786	)		129,979
Preferred stock dividends			(40	)		—			—			—			(40	)
Net income (loss) applicable to Helix common shareholders		$	106,281		$	133,011		$	140,433		$	(249,786	)	$	129,939


	Year Ended December 31, 2010
		Helix			Guarantors			Non-Guarantors			Consolidating Entries			Consolidated

Net revenues		$	183,147		$	801,503		$	334,726		$	(119,538	)	$	1,199,838
Cost of sales			124,722			659,859			297,056			(104,830	)		976,807
Oil and gas impairments			—			176,088			4,995			—			181,083
Exploration expense			—			8,276			—			—			8,276
Gross profit (loss)			58,425			(42,720	)		32,675			(14,708	)		33,672
Goodwill impairment			—			—			(16,743	)		—			(16,743	)
Gain on oil and gas derivative commodity contracts			—			1,088			—			—			1,088
Gain on sale of assets, net			3,159			287			5,959			—			9,405
Selling, general and administrative expenses			(67,165	)		(34,233	)		(22,482	)		1,802			(122,078	)
Loss from operations			(5,581	)		(75,578	)		(591	)		(12,906	)		(94,656	)
Equity in earnings of unconsolidated affiliates			—			—			19,469			—			19,469
Equity in earnings (losses) of affiliates			(60,443	)		8,473			—			51,970			—
Other than temporary loss on equity investments			(2,240	)		—			—			—			(2,240	)
Net interest expense and other			(59,522	)		(21,677	)		(5,125	)		—			(86,324	)
Income before income taxes			(127,786	)		(88,782	)		13,753			39,064			(163,751	)
(Benefit) provision for income taxes			(9,175	)		(35,299	)		9,405			(4,529	)		(39,598	)
Net income (loss), including noncontrolling interests			(118,611	)		(53,483	)		4,348			43,593			(124,153	)
Net income applicable to noncontrolling interests			—			—			—			(2,835	)		(2,835	)
Net income (loss) applicable to Helix			(118,611	)		(53,483	)		4,348			40,758			(126,988	)
Preferred stock dividends			(114	)		—			—			—			(114	)
Net income (loss) applicable to Helix common shareholders		$	(118,725	)	$	(53,483	)	$	4,348		$	40,758		$	(127,102	)

HELIX ENERGY SOLUTIONS GROUP, INC.

CONDENSED CONSOLIDATING STATEMENTS OF OPERATIONS

(in thousands)


	Year Ended December 31, 2009
			Helix			Guarantors			Non-Guarantors			Consolidating Entries			Consolidated
Net revenues	$	211,222			$	701,706		$	648,705		$	(99,946	)	$	1,461,687
Cost of sales		162,225				484,802			521,689			(95,124	)		1,073,592
Oil and gas impairments		—				120,550			—			—			120,550
Exploration expense		—				24,383			—			—			24,383
Gross profit (loss)		48,997				71,971			127,016			(4,822	)		243,162
Gain on oil and gas derivative commodity contracts		—				89,485			—			—			89,485
Gain on sale of assets, net		—				2,019			—			—			2,019
Selling, general and administrative expenses		(52,101		)		(28,520	)		(53,919	)		3,689			(130,851	)
Income (loss) from operations		(3,104		)		134,955			73,097			(1,133	)		203,815
Equity in earnings of unconsolidated affiliates		—				—			33,229			(900	)		32,329
Equity in earnings (losses) of affiliates		145,340				(1,725	)		—			(143,615	)		—
Gain on investment in of Cal Dive common stock		77,343				—			—			—			77,343
Net interest expense and other		(18,188		)		(16,978	)		(15,341	)		(988	)		(51,495	)
Income before income taxes		201,391				116,252			90,985			(146,636	)		261,992
(Benefit) provision for income taxes		43,417				39,855			13,571			(1,021	)		95,822
Income (loss) from continuing operations		157,974				76,397			77,414			(145,615	)		166,170
Discontinued operations, net of tax		99				—			9,482			—			9,581
Net income (loss), including noncontrolling interests		158,073				76,397			86,896			(145,615	)		175,751
Net income applicable to noncontrolling interests		—				—			—			(19,697	)		(19,697	)
Net income (loss) applicable to Helix		158,073				76,397			86,896			(165,312	)		156,054
Preferred stock dividends		(54,187		)		—			—			—			(54,187	)
Net income (loss) applicable to Helix common shareholders	$	103,886			$	76,397		$	86,896		$	(165,312	)	$	101,867

HELIX ENERGY SOLUTIONS GROUP, INC.

CONDENSED CONSOLIDATING STATEMENTS OF CASH FLOWS


	For the Year Ended December 31, 2011
	Helix			Guarantors			Non-Guarantors			Consolidating Entries			Consolidated

	(in thousands)

Cash flows from operating activities:
Net income (loss), including noncontrolling interests	$	106,321		$	133,011		$	140,433		$	(246,688	)	$	133,077
Adjustments to reconcile net income (loss) to net cash provided by (used in) operating activities:
Equity in earnings of affiliates		(262,990	)		(7,340	)		—			270,330			—
Other adjustments		39,860			353,728			40,293			198			434,079
Net cash provided by (used in) operating activities		(116,809	)		479,399			180,726			23,840			567,156

Cash flows from investing activities:
Capital expenditures		(32,417	)		(174,739	)		(12,613	)		—			(219,769	)
Investments in equity investments		—			—			(2,699	)		—			(2,699	)
Distributions from equity investments, net		—			—			3,965			—			3,965
Proceeds from sale of Cal Dive common stock		3,588			—			—			—			3,588
Other, net		—			32,598			—			—			32,598
Net cash used in investing activities		(28,829	)		(142,141	)		(11,347	)		—			(182,317	)

Cash flows from financing activities:
Borrowings on revolvers		109,400			—			—			—			109,400
Repayments on revolvers		(109,400	)		—			—			—			(109,400	)
Repayments of debt		(208,085	)		—			(4,645	)		—			(212,730	)
Loan notes repayment		—			—			(1,215	)		—			(1,215	)
Deferred financing costs		(9,311	)		—			—			—			(9,311	)
Preferred stock dividends paid		(40	)		—			—			—			(40	)
Repurchase of common stock		(7,604	)		—			—			—			(7,604	)
Excess tax benefit from stock-based compensation		(1,013	)		—			—			—			(1,013	)
Exercise of stock options, net		2,018			—			—			—			2,018
Intercompany financing		488,723			(338,118	)		(126,765	)		(23,840	)		—
Net cash provided by (used in) financing activities		264,688			(338,118	)		(132,625	)		(23,840	)		(229,895	)
Effect of exchange rate changes on cash and cash equivalents		—			—			436			—			436
Net increase in cash and cash equivalents		119,050			(860	)		37,190			—			155,380
Cash and cash equivalents:
Balance, beginning of year		376,434			3,294			11,357			—			391,085
Balance, end of year	$	495,484		$	2,434		$	48,547		$	—		$	546,465

HELIX ENERGY SOLUTIONS GROUP, INC.

CONDENSED CONSOLIDATING STATEMENTS OF CASH FLOWS


	For the Year Ended December 31, 2010
	Helix			Guarantors			Non-Guarantors			Consolidating Entries			Consolidated

	(in thousands)

Cash flows from operating activities:
Net income (loss), including noncontrolling interests	$	(118,611	)	$	(53,483	)	$	4,348		$	43,593		$	(124,153	)
Adjustments to reconcile net income (loss) to net cash provided by (used in) operating activities:
Equity in earnings of affiliates		60,443			(8,473	)		—			(51,970	)		—
Other adjustments		94,376			305,649			76,865			(21,283	)		455,607
Net cash provided by (used in) operating activities		36,208			243,693			81,213			(29,660	)		331,454

Cash flows from investing activities:
Capital expenditures		(56,650	)		(121,709	)		(28,413	)		—			(206,772	)
Investments in equity investments		—			—			(8,253	)		—			(8,253	)
Distributions from equity investments, net		—			—			10,539			—			10,539
Proceeds from insurance reimbursement		7,020			9,086			—			—			16,106
Proceeds from sale of Cal Dive common stock		—			—			—			—			—
Proceeds from sales of property		6,042			852			—			—			6,894
Increases in restricted cash		—			(70	)		—			—			(70	)
Net cash used in investing activities		(43,588	)		(111,841	)		(26,127	)		—			(181,556	)

Cash flows from financing activities:
Repayments of debt		(4,326	)		—			(4,424	)		—			(8,750	)
Loan notes repayment		—			—			(2,517	)		—			(2,517	)
Deferred financing costs		(2,947	)		—			—			—			(2,947	)
Preferred stock dividends paid		(114	)		—			—			—			(114	)
Repurchase of common stock		(11,680	)		—			—			—			(11,680	)
Excess tax benefit from stock-based compensation		(3,945	)		—			—			—			(3,945	)
Exercise of stock options, net		674			—			—			—			674
Intercompany financing		147,410			(131,080	)		(45,990	)		29,660			—
Net cash provided by (used in) financing activities		125,072			(131,080	)		(52,931	)		29,660			(29,279	)
Effect of exchange rate changes on cash and cash equivalents		—			—			(207	)		—			(207	)
Net increase in cash and cash equivalents		117,692			772			1,948			—			120,412
Cash and cash equivalents:
Balance, beginning of year		258,742			2,522			9,409			—			270,673
Balance, end of year	$	376,434		$	3,294		$	11,357		$	—		$	391,085

HELIX ENERGY SOLUTIONS GROUP, INC.

CONDENSED CONSOLIDATING STATEMENTS OF CASH FLOWS


		For the Year Ended December 31, 2009
		Helix			Guarantors			Non-Guarantors			Consolidating Entries		Consolidated

		(in thousands)

Cash flows from operating activities:
Net income (loss), including noncontrolling interests	$	158,073		$	76,397		$	86,896		$	(145,615	$	175,751
Adjustments to reconcile net income (loss) to net cash provided by (used in) operating activities:
Equity in earnings of unconsolidated affiliates		—			—			(7,220	)		899		(6,321	)
Equity in earnings of affiliates		(145,340	)		1,725			—			143,615		—
Other adjustments		26,633			163,451			82,411			(17,987		254,508
Net cash provided by (used in) operating activities		39,366			241,573			162,087			(19,088		423,938
Net cash used in discontinued operations		—			—			(6,261	)		—		(6,261	)
Net cash provided by (used in) operating activities		39,366			241,573			155,826			(19,088		417,677

Cash flows from investing activities:
Capital expenditures		(35,657	)		(245,354	)		(142,362	)		—		(423,373	)
Acquisition of businesses, net of cash acquired		—			—			—			—		—
Investments in equity investments		—			—			(1,657	)		—		(1,657	)
Distributions from equity investments, net		—			—			6,742			—		6,742
Increases in restricted cash		—			(6	)		—			—		(6	)
Proceeds from sale of Cal Dive common stock		504,168			—			(112,995	)		(86,000		305,173
Proceeds from sales of property		—			23,717			—			—		23,717
Net cash provided by (used in) investing activities		468,511			(221,643	)		(250,272	)		(86,000		(89,404	)
Net cash provided by discontinued operations		—			—			20,872			—		20,872
Net cash provided by (used in) investing activities		468,511			(221,643	)		(229,400	)		(86,000		(68,532	)

Cash flows from financing activities:
Borrowings on revolvers		—			—			100,000			—		100,000
Repayments on revolvers		(349,500	)		—			—			—		(349,500	)
Repayments of debt		(4,326	)		—			(24,214	)		—		(28,540	)
Loan notes repayment		—			—			(2,130	)		—		(2,130	)
Deferred financing costs		(6,970	)		—			—			—		(6,970	)
Preferred stock dividends paid		(645	)		—			—			—		(645	)
Repurchase of common stock		(13,995	)		—			(86,000	)		86,000		(13,995	)
Excess tax benefit from stock-based compensation		895			—			—			—		895
Exercise of stock options, net		176			—			—			—		176
Intercompany financing		(23,474	)		(22,391	)		26,777			19,088		—
Net cash provided by (used in) financing activities		(397,839	)		(22,391	)		14,433			105,088		(300,709	)
Effect of exchange rate changes on cash and cash equivalents		—			—			(1,376	)		—		(1,376	)
Net increase (decrease) in cash and cash equivalents		110,038			(2,461	)		(60,517	)		—		47,060
Cash and cash equivalents:
Balance, beginning of year		148,704			4,983			69,926			—		223,613
Balance, end of year	$	258,742		$	2,522		$	9,409		$	—	$	270,673