Ownership Of Cal Dive International, Inc.

12 Months Ended

Dec. 31, 2011

Ownership Of Cal Dive International, Inc. [Abstract]

Ownership Of Cal Dive International, Inc.

Note 3 — Ownership of Cal Dive International, Inc.

Our ownership in CDI as of December 31, 2008 was approximately 57.2%.  In January 2009, we sold approximately 13.6 million shares of Cal Dive common stock to Cal Dive for $86 million.  This transaction constituted a single transaction and was not part of any planned set of transactions that would result in us having a noncontrolling interest in Cal Dive, and reduced our ownership in Cal Dive to approximately 51%.  Because we retained control of CDI immediately after the transaction, the loss of approximately $2.9 million on this sale was treated as a reduction of our equity in the accompanying consolidated balance sheet.

In June 2009, we sold 22.6 million shares of Cal Dive common stock held by us pursuant to a secondary public offering ("Offering").  Proceeds from the Offering totaled approximately $182.9 million, net of underwriting fees.  Simultaneously with the closing of the Offering, pursuant to a Stock Repurchase Agreement with Cal Dive, Cal Dive repurchased from us approximately 1.6 million shares of its common stock for net proceeds of $14 million at $8.50 per share, the Offering price. Following the closing of these two transactions, our ownership of Cal Dive common stock was reduced to approximately 26%.

 Because these transactions reduced our ownership in Cal Dive to less than 50%, the $59.4 million gain resulting from the sale of these shares was reflected in "Gain on investment in Cal Dive common stock" in the accompanying consolidated statement of operations.  The $59.4 million amount included an approximate $27.1 million gain associated with the re-measurement of our remaining 26% ownership interest in Cal Dive at its fair value on June 10, 2009, the date of the closing of the Offering, which represented the date of deconsolidation.   Since we no longer held a controlling interest in Cal Dive, we ceased consolidating Cal Dive effective June 10, 2009, and subsequently accounted for our remaining ownership interest in Cal Dive under the equity method of accounting until September 23, 2009, as further discussed below.

On September 23, 2009, we sold 20.6 million shares of Cal Dive common stock held by us pursuant to a second secondary public offering ("Second Offering").  On September 24, 2009, the underwriters sold an additional 2.6 million shares of Cal Dive common stock held by us pursuant to their overallotment option under the terms of the Second Offering.   The price for the Second Offering was $10 per share, with resulting proceeds totaling approximately $221.5 million, net of underwriting fees.  We recorded an approximate $17.9 million gain associated with the Second Offering transactions.

Following the closing of the Second Offering transactions, we owned 0.5 million shares of Cal Dive common stock, representing less than 1% of the total outstanding shares of Cal Dive.  Accordingly we classified our remaining interest in Cal Dive as an investment available for sale.  As an investment available for sale, the value of our remaining interest was marked-to-market at each period end with the corresponding change in value being reported as a component of accumulated other comprehensive income (loss) in the accompanying consolidated balance sheet at December 31, 2010.  In 2010, we recorded a $2.2 million non-cash "other than temporary impairment" charge that reflected the substantial reduction in Cal Dive's common stock price since the closing of the Second Offering.  Our investment in Cal Dive was $2.8 million at December 31, 2010.   In March 2011, we sold our remaining 0.5 million shares of Cal Dive common stock on the open market for gross proceeds of $3.6 million resulting in a pre-tax gain of $0.8 million.

Proceeds from our Cal Dive stock sale transactions were used for general corporate purposes.