Helix Energy Solutions Group (HLX) risk factors, FY2024 10-K

MARKET AND INDUSTRY RISKS

1. 01Our business is adversely affected by low oil and natural gas prices, which occur in a cyclical oil and gas market that continues to experience volatility
2. 02Our business and financial performance are subject to risks related to global economic conditions, geopolitical developments and international conflict
3. 03Our renewables business may be adversely affected by industry-specific economic, regulatory and market factors
4. 04We are subject to the effects of changing prices

BUSINESS AND OPERATIONAL RISKS

1. 05As of December 31, 2024, backlog for our services supported by written agreements or contracts totaled $1.4 billion, of which $681 million is expected to be performed in 2025
2. 06A large portion of our current backlog is concentrated in a small number of long-term contracts that we may fail to renew or replace
3. 07Our operations involve numerous risks, which could result in our inability or failure to perform operationally under our contracts and result in reduced revenues, contractual penalties and/or contract termination
4. 08Our customers, suppliers and other counterparties may be unable to perform their obligations
5. 09We may own assets with costs that cannot be recouped if the assets are not under contract, and time chartering vessels requires us to make payments regardless of utilization of and revenue generation from those vessels
6. 10Asset upgrade, modification, refurbishment, repair, dry dock and construction projects, and customer contractual acceptance of vessels, systems and other equipment, are subject to risks, including delays, cost overruns, loss of revenue and failure to commence or maintain contracts
7. 11We may not be able to compete successfully against current and future competitors
8. 12Our North Sea and Helix Alliance businesses typically decline in the winter, and weather can adversely affect our operations
9. 13The operation of marine vessels is risky, and we do not have insurance coverage for all risks
10. 14Our oil and gas operations involve a high degree of operational, contractual and financial risk, particularly risk of personal injury, damage, loss of equipment and environmental incidents
11. 15Our customers may be unable or unwilling to indemnify us
12. 16Our operations outside of the U.S. subject us to additional risks
13. 17Failure to protect our intellectual property or other technology may adversely affect our business
14. 18Climate change might adversely impact our business operations and/or our supply chain
15. 19The actual or perceived lack of sustainability of the oil and gas sector, or our failure to adequately implement and communicate initiatives that demonstrate our own sustainability, may adversely affect our business

FINANCIAL AND LIQUIDITY RISKS

1. 20Our indebtedness and the terms of our indebtedness could impair our financial condition and our ability to fulfill our debt obligations or otherwise limit our business and financial activities
2. 21Because we have certain debt and other obligations, a prolonged period of low demand or rates for our services could lead to a material adverse effect on our liquidity
3. 22Lack of access to the financial markets could negatively impact our ability to operate our business
4. 23A decline in the offshore energy services market could result in impairment charges
5. 24Our international operations are exposed to currency devaluation and fluctuation risk

LEGAL AND REGULATORY COMPLIANCE RISKS

1. 25Government regulations, including those specific to deepwater offshore drilling, may make our business operations more difficult or costly, or limit our services
2. 26Our business would be adversely affected if we failed to comply with the Jones Act foreign ownership provisions or if these provisions were modified or repealed
3. 27Failure to comply with anti-bribery laws could have a material adverse impact on our business

GENERAL RISKS

1. 28We may execute a strategic transaction that may not achieve intended results, could increase our debt or the number of our shares outstanding, or result in a change of control
2. 29The loss of the services of one or more of our key employees, or our failure to attract and retain other highly qualified personnel and other skilled workers in the future, could disrupt our operations and adversely affect our financial results
3. 30Cybersecurity breaches or business system disruptions may adversely affect our business
4. 31Increasing legal and regulatory focus on data privacy and security issues could expose us to increased liability and operational changes and costs
5. 32Certain provisions of our corporate documents, financial arrangements and Minnesota law may discourage a third party from making a takeover proposal
6. 33Our ability to repurchase shares through any share repurchase program is subject to certain considerations, including availability of Free Cash Flow, and any repurchases could affect the price of our common stock and increase volatility
7. 34A global health pandemic could disrupt our operations and adversely impact our business and financial results