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

Commission File Number 0-21086

Global Industries, Ltd.

(Exact Name of Registrant as Specified in Its Charter)

Louisiana (State or Other Jurisdiction of Incorporation or Organization)		72-1212563 (I.R.S. Employer Identification Number)
8000 Global Drive Carlyss, Louisiana (Address of Principal Executive Offices)		70665 (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 þ 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, 2010 was $462,243,372 based on the last reported sales price of the Common Stock on June 30, 2010 on the NASDAQ Global Select Market.

The number of shares of the registrant’s Common Stock outstanding as of February 22, 2011, was 115,526,785.

Portions of the definitive Proxy Statement for the Annual Meeting of Shareholders to be held May 18, 2011 are incorporated by reference into Part III hereof.

 

 

GLOBAL INDUSTRIES, LTD.
TABLE OF CONTENTS
FORM 10-K

PART I
Item 1. Business			5
Item 1A. Risk Factors			13
Item 1B. Unresolved Staff Comments			21
Item 2. Properties			21
Item 3. Legal Proceedings			25
Item (Unnumbered). Executive Officers of the Registrant			26
PART II
Item 5. Market for the Registrant’s Common Equity, Related Stockholder Matters and Issuer Purchases of Equity Securities			29
Item 6. Selected Financial Data			30
Item 7. Management’s Discussion and Analysis of Financial Condition and Results of Operations			31
Item 7A. Quantitative and Qualitative Disclosures About Market Risk			47
Item 8. Financial Statements and Supplementary Data
Report of Independent Registered Public Accounting Firm			48
Consolidated Balance Sheets — December 31, 2010 and 2009			49
Consolidated Statements of Operations — Years Ended December 31, 2010, 2009, and 2008			50
Consolidated Statements of Equity — Years Ended December 31, 2010, 2009, and 2008			51
Consolidated Statements of Cash Flows — Years Ended December 31, 2010, 2009, and 2008			52
Notes to Consolidated Financial Statements			53
Item 9. Changes in and Disagreements With Accountants on Accounting and Financial Disclosure			87
Item 9A. Controls and Procedures			87
Management’s Report on Internal Control over Financial Reporting			87
PART III
Item 10. Directors, Executive Officers, and Corporate Governance			91
Item 11. Executive Compensation			91
Item 12. Security Ownership of Certain Beneficial Owners and Management and Related Stockholder Matters			91
Item 13. Certain Relationships and Related Transactions and Director Independence			91
Item 14. Principal Accountant Fees and Services			91
PART IV
Item 15. Exhibits and Financial Statement Schedules			92
Signatures			97
EX-21.1
EX-23.1
EX-31.1
EX-31.2
EX-32.1
EX-32.2
EX-101 INSTANCE DOCUMENT
EX-101 SCHEMA DOCUMENT
EX-101 CALCULATION LINKBASE DOCUMENT
EX-101 LABELS LINKBASE DOCUMENT
EX-101 PRESENTATION LINKBASE DOCUMENT
EX-101 DEFINITION LINKBASE DOCUMENT

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, 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;
	•		the level of offshore drilling activity;
	•		fluctuations in the prices of or demand for oil and gas;
	•		risks inherent in doing business abroad;
	•		the economic and regulatory impact of the Macondo well incident in the U.S. Gulf of Mexico;
	•		operating hazards related to working offshore;
	•		our dependence on significant customers;
	•		possible construction delays or cost overruns, within or outside our control, 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;
	•		the availability of capital resources;
	•		our ability to obtain new project awards and utilize our new vessels;
	•		delays or cancellation of projects included in backlog;
	•		general economic and business conditions and industry trends;
	•		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, 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 five reportable segments: North America Offshore Construction Division (OCD), North America Subsea, Latin America, West Africa, and Asia Pacific/Middle East. 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 18 “Industry, Segment and Geographic Information” in Item 8 of Part II of this Annual Report.

DESCRIPTION OF OPERATIONS

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, and Asia Pacific/Middle East regions. 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.

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. 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.

On December 31, 2010, our fleet included four derrick lay barges (DLBs), one pipelay/derrick vessel, one heavy lift ship, one pipelay barge, four multi-service vessels (MSVs), one dive support vessel (DSV), and one offshore supply vessel (OSV). Our major construction vessels, which currently include five barges and two ships, have various combinations of pipelay, pipe bury, derrick, dive support and deepwater lowering capabilities. Construction was completed on our first new pipelay/derrick vessel, the Global 1200, in 2010. The vessel has recently completed its sea trials and is scheduled to begin work on its initial project in April 2011. The remaining pipelay/derrick vessel, the Global 1201, is presently under construction with an expected delivery date in the third quarter of 2011.

For financial information regarding our operating segments and the geographic areas in which we operate, please read Note 18 “Industry, Segment and Geographic Information” in Item 8 of Part II of this Annual Report.

Offshore Construction Services

Our offshore construction services include pipeline construction, platform installation and removal services, 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, and Asia Pacific/Middle East.

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. Five 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. Four of our major 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.

In the Gulf of Mexico, the United States Department of Interior Bureau of Ocean Energy Management, Regulation and Enforcement (BOEMRE) regulations require platforms to be removed within twelve months after production ceases and require the site be restored to meet stringent standards. According to BOEMRE, in February 2011 there were approximately 3,300 platforms on active leases in U.S. waters of the Gulf of Mexico. Four of our major 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.

Subsea Services

Our subsea services include diving and diverless intervention, SURF, and support services for construction. 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 one DSV 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 dates of February and October 2011.

For the Gulf of Mexico, BOEMRE 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, 2010, we had nine 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 2011, we plan to concentrate on strengthening our core business by focusing on:

	•		successful project execution,
	•		successful integration of the Global 1200 and Global 1201 into our fleet,
	•		business development and backlog accumulation,
	•		retention and hiring of key personnel, and
	•		cash management.

We also intend to broaden our business segments with emphasis on deepwater/SURF and integrated projects.

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, 2010, we provided offshore marine construction services to approximately fifty customers. Eight customers accounted for at least 10% each of consolidated revenues in at least one of the years ended December 31, 2010, 2009, and 2008.

		2010				2009				2008
Customer		%				%				%
Petroleos Mexicanos (PEMEX)			27	%			12	%			10	%
Petronas Carigali Sdn Bhd			13	%			—				—
Petroleo Brasileiro S.A. (Petrobras)			12	%			13	%			14	%
PT Transportasi Gas Indonesia			7	%			10	%			—
Chevron			7	%			15	%			15	%
Saudi Aramco			1	%			8	%			14	%
Mobile Producing Nigeria			—				12	%			1	%
Oil and Natural Gas Corporation Limited (India)			—				—				10	%

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. Our customers use a variety of methods to assess competitors. The ability to deploy modern equipment and techniques and to attract and retain skilled personnel, along with a good safety performance record, are important competitive factors. However, price competition and contract terms are the final factors in determining which qualified contractor is awarded a project.

Major international competitors in deepwater or more complex projects include Subsea 7 S.A. (a merger between Acergy S.A. and Subsea 7, Inc.), Allseas Marine Contractors, S.A., J. Ray McDermott, S.A., Saipem S.p.A., Technip S.A., and Helix Energy Solutions Group, Inc.. For less complex projects, we compete with numerous regional competitors such as Swiber Holdings Limited, Clough Limited, Leighton International Limited, and TLO in the Asia Pacific/Middle East region and Oceanographia in Mexico. Some of these international competitors also bid and compete for projects in North America. Our competitors for shallow and intermediate water projects in North America include Cal Dive International, Inc. 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, 2010, our backlog amounted to approximately $170.8 million ($166.9 million for international operations and $3.9 million for North America), compared to our backlog at December 31, 2009 of $103.8 million ($82.9 million for international operations and $20.9 million for North America). Our entire backlog as of December 31, 2010 is scheduled to be performed during 2011. 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 2010, the number of our employees, not including subcontractors, ranged from 1,806 to 2,329. As of December 31, 2010, we had 2,266 employees. With the exception of a group of offshore employees in Mexico, none of our employees is covered by a collective bargaining agreement. We believe that our relationship with our employees is satisfactory.

Seasonality

Each of the geographical areas in which we operate has seasonal weather patterns that affect our offshore operations. Our offshore operations are affected by 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 Note 18 “Industry, Segment and Geographic Information” in Item 8 of Part II of this Annual Report, which presents revenue and long-lived assets attributable to each of our geographic areas for the years ended December 31, 2010, 2009 and 2008. 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. Such regulation is becoming increasingly stringent and regulatory delays may affect project schedules. In particular, the exploration and development of oil and gas properties located on the Outer Continental Shelf of the United States are regulated primarily by BOEMRE.

Our operations also are affected by numerous federal, state, and local laws and regulations relating to protection of the environment. The technical requirements of these laws and regulations are becoming increasingly complex and stringent, and compliance may become increasingly difficult and expensive. Environmental laws and rules regulate, among other things, our air emissions, wastewater discharges, waste disposal, and spills of petroleum and other substances. 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 2010. 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.

In response to the April 2010 Macondo Well incident, new governmental safety and environmental requirements applicable to both deepwater and shallow water operations have been adopted. The new safety and environmental guidelines and regulations for drilling and related activities in the U.S. Gulf of Mexico that the U.S. government has already issued, including the Oil Spill Accountability and Environmental Protection Act, Securing Protections for the Injured from Limitations on Liability, Americanization of Offshore Operations in the EEZ (exclusive economic zone), and any further new guidelines or regulations the U.S. government may issue or any other steps the U.S. government may take, could disrupt or delay operations, increase the cost of operations, or reduce the area of operations for drilling activities in U.S. offshore areas. At this time, we cannot predict the impact of the Macondo well incident and resulting changes in the regulation of offshore oil and gas exploration and development activity on our operations or contracts or what actions may be taken by our customers, other industry participants, or the U.S. government in response to the incident. Increased costs for our customers’ operations in the U.S. Gulf of Mexico, along with permitting delays, could affect the economics of currently planned exploration and development activity in the area and reduce demand for our services, which could ultimately have a material adverse affect on our revenue and profitability.

Additionally, future legislative or regulatory enactments may impose new requirements that could increase our costs.

The Oil Pollution Act of 1990, as amended (“OPA”), imposes a variety of requirements on “Responsible Parties” related to the prevention of oil spills and liability for damages resulting from such spills in waters of the United States. A “Responsible Party” includes the owner or operator of an onshore facility, a vessel or a pipeline, and the lessee or permittee of the area in which an offshore facility is located. OPA imposes liability on each Responsible Party for oil spill removal costs and for other public and private damages from oil spills. Failure to comply with OPA may result in the assessment of civil and criminal penalties. OPA establishes liability limits, but the liability limits are not applicable if the spill is caused by gross negligence or willful misconduct; if the spill results from violation of a federal safety, construction, or operating regulation; or if a party fails to report a spill or fails to cooperate fully in the cleanup. Few defenses exist to the liability imposed under OPA. Management is currently unaware of any oil spills for which we have been designated as a Responsible Party under OPA that will have a material adverse impact on us or our operations.

OPA also imposes ongoing requirements on a Responsible Party, including preparation of an oil spill contingency plan and maintaining proof of financial responsibility to cover a majority of the costs in a potential spill. We believe that we have appropriate spill contingency plans in place. OPA requires owners and operators of vessels over 300 gross tons to provide the Coast Guard with evidence of financial responsibility to cover the cost of cleaning up oil spills from such vessels. We have provided satisfactory evidence of financial responsibility to the Coast Guard for our vessels that operate in the U.S. Gulf of Mexico.

The Clean Water Act imposes strict controls on the discharge of pollutants into the navigable waters of the United States and imposes potential liability for the costs of remediating releases of petroleum and other substances. The controls and restrictions imposed under the Clean Water Act have become more stringent over time, and it is possible that additional restrictions will be imposed in the future. Permits must be obtained to discharge pollutants into state and federal waters. The Clean Water Act provides for civil, criminal and administrative penalties for any unauthorized discharge of oil and other hazardous substances and imposes liability on responsible parties for the costs of cleaning up any environmental contamination caused by the release of a hazardous substance and for natural resource damages resulting from the release. We believe that our operations comply in all material respects with the requirements of the Clean Water Act.

The Comprehensive Environmental Response, Compensation, and Liability Act (“CERCLA”) contains provisions requiring the remediation of releases of hazardous substances into the environment and imposes liability, without regard to fault or the legality of the original conduct, on certain classes of persons including owners and operators of contaminated sites where the release occurred and those companies who transport, dispose of, or arrange for disposal of hazardous substances released at the sites. Under CERCLA, such persons may be subject to joint and several liability for the costs of cleaning up the hazardous substances that have been released into the environment, for damages to natural resources and for the costs of certain health studies. Third parties may also file claims for personal injury and property damage allegedly caused by the release of hazardous substances. Although we handle hazardous substances in the ordinary course of business, we are not aware of any hazardous substance contamination for which we may be liable.

We operate in foreign jurisdictions that have various types of governmental laws and regulations relating to the discharge of oil or hazardous substances and the protection of the environment. Pursuant to these laws and regulations, we could be held liable for remediation of some types of pollution, including the release of oil, hazardous substances and debris.

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 2010, 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

There are numerous factors that affect our business and operating results, many of which are beyond our control. The following is a description of significant factors that might cause our future operating results to differ materially from those currently expected. The risks described below are not the only risks facing us. Additional risks and uncertainties not specified herein, not currently known to us, or currently deemed to be immaterial also may adversely affect our business, financial position, operating results, and/or cash flows.

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 influenced by numerous factors, including but not limited to:

	•		the demand for oil and natural gas;
	•		worldwide political conditions and political actions, particularly in significant oil-producing regions such as the Middle East, West Africa and Latin America which can result in nationalization and seizures of assets;
	•		the cost of exploring for, producing and delivering oil and natural gas;
	•		the economic and regulatory impact of the Macondo well incident in the U.S. Gulf of Mexico;
	•		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;
	•		general economic conditions;
	•		environmental and other governmental regulations; 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 affect 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 the growth in 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. Although crude oil and natural gas prices have increased during 2010 to historicly high levels, they are still below the July 2008 price levels. 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 affect our cash flows.

Our business could be adversely impacted by the Macondo well incident and the resulting changes in regulations affecting offshore oil and gas exploration and development activity.

Our North American Subsea and North America OCD segments operate primarily in the U.S. Gulf of Mexico. In response to the April 2010 Macondo Well incident, new governmental safety and environmental requirements applicable to both deepwater and shallow water operations have been adopted. The new safety and environmental guidelines and regulations for drilling and related activities in the U.S. Gulf of Mexico that the U.S. government has already issued, including the Oil Spill Accountability and Environmental Protection Act, Securing Protections for the Injured from Limitations on Liability, Americanization of Offshore Operations in the EEZ (exclusive economic zone), and any further new guidelines or regulations the U.S. government may issue or any other steps the U.S. government may take, could disrupt or delay operations, increase the cost of operations, or reduce the area of operations for drilling activities in U.S. offshore areas. At this time, we cannot predict the impact of the Macondo well incident and resulting changes in the regulation of offshore oil and gas exploration and development activity on our operations or contracts or what actions may be taken by our customers, other industry participants, or the U.S. government in response to the incident. Increased costs for our customers’ operations in the U.S. Gulf of Mexico, along with permitting delays, could affect the economics of currently planned exploration and development activity in the area and reduce demand for our services, which could ultimately have a material adverse affect on our revenue and profitability. Additionally, future legislative or regulatory enactments may impose new requirements that could increase our costs.

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

The impact of the 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. In addition, the current credit and economic environment could significantly affect 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 affect 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 facility. If adverse national and international economic conditions continue or deteriorate further, it is possible that we may not have access to credit markets or other sources of liquidity.

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

Armed conflicts, terrorism or piracy 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, and the recent protests in the Middle East, 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, Afghanistan, and the Middle East 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 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 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, 2010, five customers accounted for over 60% of our 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.

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, when the market is oversupplied with available vessels, we may have to accept lower rates for our services and vessels or increased contractual liabilities, which could result in continued 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.

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 continuing the upgrade of our fleet with the construction of a new generation derrick/pipelay vessel, the Global 1201. This project, 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 key 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 construction on time, or the inability to complete 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 business is capital intensive and our ability to finance our business depends on generating sufficient cash flow from our operations.

As of December 31, 2010, our backlog of construction contracts amounted to $170.8 million compared to a backlog of $103.8 million as of December 31, 2009. 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.

Maintaining adequate letter of credit capacity is necessary for us to successfully bid on various contracts.

Consistent with industry practice, we are often required to post standby letters of credit to customers in connection with bidding on new projects and for certain projects that we are awarded. These letters of credit generally indemnify customers if we fail to perform our obligations under the applicable contracts. If a letter of credit is required for a project and we are unable to obtain it due to insufficient liquidity or other reasons, we will not be able to pursue that particular project. We have limited capacity under our Third Amended and Restated Credit Agreement, as amended (“the Revolving Credit Facility”) for letters of credit. Also, depending on credit market conditions, letters of credit may be more difficult to obtain in the future or may only be available to us at a significant additional cost. We cannot provide assurance that letters of credit will continue to be available to us on reasonable terms. Our inability to obtain adequate letters of credit and, as a result, to bid on new work could have a material adverse effect on our business, financial condition and results of operations. As of December 31, 2010, we had $44.8 million in letters of credit issued under our Revolving Credit Facility.

We have substantial funds held at domestic and foreign financial institutions that exceed the insurance coverage offered by the Federal Deposit Insurance Corporation (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 debt instruments contain covenants that limit our operating and financial flexibility.

Under the terms of our Revolving 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 Revolving Credit Facility is affected by current economic conditions and by events beyond our control. We have failed to meet certain financial covenants under our Revolving Credit Facility in the past and we may not be able to satisfy these covenants or other covenants in the future thereby necessitating cash collateralization of our letter of credit exposure. If we fail to comply with our financial covenants and other restrictions, it could require us to cash collateralize outstanding and future letters of credit, or 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 Revolving 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.

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 or piracy that may disrupt markets;
	•		expropriation or seizure of our property;
	•		hijacking or kidnapping of our employees
	•		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 whether foreign governmental regulations applicable to our operations will 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 heightened. In addition, our construction work can disrupt existing pipeline, platforms, and other offshore structures. Any of these incidents could result in 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. Consequently, third parties may have claims against us for damages due to personal injury, death, property damage, or loss of business. 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 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.

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. Even when a project proceeds as scheduled, it is possible that contracted parties may default on their payments to us or poor project performance may increase the cost associated with a project. Cancellations, delays, scope

adjustments, payment defaults, and poor project execution could materially reduce the revenues and reduce or eliminate the profits that we actually realize from projects in our backlog.

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.

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

We have incurred losses in 2010 and in past years and may have operating losses in the future if we cannot obtain sufficient work and/or 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 may experience difficulties resolving claims and variation orders, which may adversely affect 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.

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.

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.

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.

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, 2010 was 25 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 affect the amount of income taxes that we provide for any given year and could adversely affect our result of operations. See Note 10 of the Notes to Consolidated Financial Statements for a discussion of tax related challenges.

Compliance with environmental and other governmental regulations could be costly and could negatively affect 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.

According to certain scientific studies, emissions of carbon dioxide, methane, nitrous oxide and other gases commonly known as greenhouse gases (“GHG”) may be contributing to global warming of the earth’s atmosphere and to global climate change. In response to the scientific studies, legislative and regulatory initiatives have been underway to limit GHG emissions. The U.S. Supreme Court determined that GHG emissions fall within the federal Clean Air Act (“CAA”) definition of an “air pollutant”, and in response, the U.S. Environmental Protection Agency promulgated various regulations related to GHG. Regulation of GHG emissions is highly controversial and further regulatory, legislative and judicial developments are likely to occur. Due to the uncertainties surrounding the regulation of and other risks associated with GHG emissions, the Company cannot predict the financial impact of related developments on the Company.

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.

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.

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 seven major construction vessels, one DSV, four MSVs, and one OSV. Our major construction vessels currently include five barges and two ships. During 2010, construction was completed on the first of our new pipelay/derrick vessels, the Global 1200. The Global 1200 recently completed its sea trials and was added to our fleet. 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 24 of this Form 10-K. Our significant vessels and equipment are described below. In addition, we are continuing the expansion of our fleet with the construction of the remaining derrick/pipelay vessel, the Global 1201, with an expected delivery date in the third quarter of 2011.

The Hercules, a major construction vessel, 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. The Hercules can lay pipe up to 60 inches in diameter using the conventional method and is currently assigned to our North America OCD segment in the U.S Gulf of Mexico.

The Titan 2, a major construction vessel, 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. In February 2011, we gave notice to the lessor of the Titan 2 of our intent to terminate the lease effective in the second quarter of 2011. The current base of operations for the Titan 2 is Mexico’s Bay of Campeche.

The Comanche, a major construction vessel, 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, a major construction vessel, 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, a major construction vessel, is a 400-foot pipelay derrick barge capable of lifts up to approximately 1,100 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/Middle East segment.

The Chickasaw, a major construction vessel, 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, an MSV, 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 Normand Commander, an MSV, 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 Normand 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, an MSV, 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, an MSV, 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, a major construction vessel, recently entered our fleet upon the completion of its construction and subsequent sea trials. 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 late 2011. The Global 1201 is comparable to the Global 1200.

We own nine of the vessels in the operating fleet described above. The Titan 2, Olympic Challenger, and Normand Commander are leased vessels. Six 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 nine saturation diving systems. Our saturation systems range in capacity from six to twelve divers. Four of the saturation systems are capable of supporting dives as deep as 1,000 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 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, 2010:

				Approximate
				Square Feet		Owned/Leased
Location		Principal Use		Or Acreage		(Lease Expiration)
Carlyss, LA		Shore base/Office		603 acres		Owned
Port of Iberia, LA		Research and Development Center		3,765 sq. ft.		Leased (March 2015)
Houston, TX		Office		67,059 sq. ft.		Leased (July 2013)
Cd. Del Carmen, Mexico		Office/Workshop		41,042 sq. ft.		Owned
Tema, Ghana		Office/Shore base		56,966 sq. ft.		Leased (July 2011)
Dubai, United Arab Emirates		Office		3,581 sq. ft.		Leased (August 2011)
Mumbai, India		Project Management Office		5,170 sq. ft.		Leased (Dec. 2011)
Kuala Lumpur, Malaysia		Office		13,329 sq. ft.		Leased (May 2011)
Batam Island, Indonesia		Shore base		45 acres		Leased (March 2028)
Singapore		Office		15,407 sq. ft.		Leased (Aug. 2013)
Rio de Janeiro, Brazil		Office		11,291 sq. ft.		Leased (Oct. 2011)

Global Industries, Ltd.
Listing of Major Construction Vessels

														Pipelay
										Derrick				Maximum				Maximum
										Maximum				Pipe				Water				Year				Living
						Length				Lift				Diameter				Depth				Acquired				Quarter
Vessel Name		Vessel Type		Capability		(Feet)				(Tons)				(Inches)				(Feet)				/Leased				Capacity
Global 1200		Ship		Pipelay/derrick			532				1,200				60.00				9,800				2010				264
Titan 2(1)		Ship		Derrick			408				882				—				—				2001				330
Hercules		Barge		Pipelay/derrick			486				2,000				60.00				10,000				1995				269
Comanche		Barge		Pipelay/derrick			401				1,000				48.00				1,000				1996				243
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
Chickasaw		Barge		Pipelay/reel			275				165				12.00				6,000				1990				73

ITEM 3. LEGAL PROCEEDINGS

We are involved in various legal proceedings and potential claims that arise in the ordinary course of business, primarily involving claims for personal injury under the General Maritime Laws of the United States and Jones Act as a result of alleged negligence. We believe that the outcome of all such proceedings, even if determined adversely, would not have a material adverse effect on our business or financial statements. For more information, please see the information set forth under the heading “Litigation” in Note 10, “Commitments and Contingencies,” to our consolidated financial statements included in this Annual Report.

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 22, 2011, were as follows:

Name		Age				Position
John B. Reed			55			Chief Executive Officer
C. Andrew Smith			40			Senior Vice President and Chief Financial Officer
Russell J. Robicheaux			62			Senior Vice President, Chief Administrative Officer, General Counsel and Secretary
Ashit Jain			40			Senior Vice President and Chief Operating Officer
James Osborn			60			Senior Vice President and Chief Marketing Officer
James J. Doré			56			Senior Vice President, Worldwide Diving
Byron W. Baker			54			Senior Vice President, Operations and Fleet Management
Eduardo Borja			53			Senior Vice President, Strategic Planning
David R. Sheil			54			Senior Vice President, Human Resources
Trudy McConnaughhay			51			Vice President and Controller

Mr. Reed joined the Company in March 2010 with more than thirty years experience in the offshore construction industry. Prior to joining the Company, he served as Chief Executive Officer of Heerema Marine Contractors after holding a number of other senior roles with the Heerema Group including Chief Executive Officer of INTEC Engineering, Inc. He previously held a number of other management roles at Heerema in project management, business development, and engineering capacities. Mr. Reed holds a Bachelors degree in Engineering from the University of Mississippi and an MBA from Delta State University. He previously served as a member of the Board of Directors of the National Ocean Industries Association and is a past President of the International Pipeline and Marine Contractors Association and a past Chairman of the International Marine Contractors Association, America’s Deepwater Division.

Mr. Smith joined the Company in April 2010. Prior to joining the Company, he served in a number of financial executive roles, most recently as Senior Vice President and Chief Financial Officer, with NATCO Group. He previously was a financial executive with Comfort Systems USA and the public accounting firm of Pricewaterhouse Coopers. Mr. Smith is a graduate of the University of Houston and a Certified Public Accountant in the State of Texas.

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. Robicheaux holds a Bachelors degree in Electrical Engineering from Louisiana State University and a J.D. from Loyola University.

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 was based in the Asia Pacific region. In August 2010, Mr.

Jain was named Chief Operating Officer. Mr. Jain has over eighteen years experience in the marine construction industry. Mr. Jain holds a Bachelor’s degree in Civil Engineering from the University of Delhi in India and an MBA from the University of Houston.

Mr. Osborn joined the Company in June 2010 with responsibility for worldwide business acquisition and development, proposals and estimating, marketing, and related commercial activities. He has more than thirty years experience in business development, operations, and engineering roles, most recently as Senior Vice President, Business Development with IntecSea, a unit of the worldwide engineering firm of Worley Parsons. Earlier in his career, Mr. Osborn spent seventeen years with Brown & Root, Inc. and its successor, KBR, serving in various commercial, business development, and operations positions. Mr. Osborn holds both a Bachelors degree and a Masters degree in Engineering from the Massachusetts Institute of Technology.

Mr. James Doré has over twenty-seven 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. In May 2010, he relinquished his role over the North America Region to focus on worldwide opportunities and in September 2010, he was named Senior Vice President, Worldwide Diving. 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 and in May 2010, he was named Senior Vice President, Operations and Fleet Management. 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-two 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. 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. He was appointed Senior Vice President, Strategic Planning in October 2010. 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.

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 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
Year ended 2010:
First quarter		$	6.15			$	7.96
Second quarter			4.49				7.26
Third quarter			4.12				5.63
Fourth quarter			5.34				7.05

As of February 15, 2011, there were approximately 657 holders of record of our common stock and approximately 36,612 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 Revolving 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 2010.

										Total Number
										of Shares
										Purchased as
										Part of Publicly
		Total Number				Average				Announced
		of Shares				Price Paid				Plans or
Period		Purchased(1)				per Share				Programs
October 1, 2010 — October 31, 2010			—			$	—				—
November 1, 2010 — November 30, 2010			9,000				6.09				—
December 1, 2010— December 31, 2010			18,073				6.93				—
Total			27,073			$	6.65				—

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,
		2010				2009				2008				2007				2006
		(in thousands, except per share and ratio data)
Revenues		$	568,108			$	914,348			$	1,070,988			$	992,513			$	1,234,849
Cost of operations			535,264				755,301				1,084,581				719,768				887,003
Gross profit (loss)			32,844				159,047				(13,593	)			272,745				347,846
Goodwill impairment(1)			37,388				—				—				—				—
Loss on other asset impairments(2)			64,143				1,186				2,551				141				8,931
Reduction in litigation provision			—				—				—				—				(13,699	)
Net gain on asset disposal(3)			(31,253	)			(8,351	)			(1,695	)			(4,220	)			(6,395	)
Selling, general and administrative expenses			70,333				69,165				95,364				81,275				71,109
Operating income (loss)			(107,767	)			97,047				(109,813	)			195,549				287,900
Interest income			1,488				2,020				14,477				27,966				8,169
Interest expense			(9,671	)			(13,061	)			(16,439	)			(15,463	)			(10,787	)
Other income (expense), net			(555	)			7,302				(641	)			3,826				705
Income (loss) before income taxes			(116,505	)			93,308				(112,416	)			211,878				285,987
Income tax expense (benefit)			(21,424	)			19,577				6,775				53,234				86,242
Net income (loss)			(95,081	)			73,731				(119,191	)			158,644				199,745
Less: Net income attributable to noncontrolling interest			581				—				—				—				—
Net income (loss) attributable to Global Industries, Ltd.		$	(95,662	)		$	73,731			$	(119,191	)		$	158,644			$	199,745
Net income (loss) per diluted share
Net income (loss) attributable to Global Industries, Ltd.		$	(0.84	)		$	0.64			$	(1.05	)		$	1.35			$	1.70
Ratio of earnings to fixed charges (4)			n/a	(5)			2.9x				n/a	(5)			6.9x				12.0x
Total assets (6)		$	1,343,741			$	1,524,193			$	1,489,353			$	1,588,605			$	1,070,997
Working capital (6)		$	325,821			$	405,609			$	380,894			$	843,017			$	460,126
Long-term debt (6)		$	303,365			$	298,326			$	293,926			$	290,119			$	73,260

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, and Asia Pacific/Middle East.

Effective January 1, 2010, we combined our Middle East and Asia Pacific/India segments into the Asia Pacific/Middle East segment. The equipment and personnel assigned to each of these segments, as well as the executive management thereof, were consolidated during 2009; therefore, we made the decision to combine the reporting segments. The combined reporting segment continues to pursue projects in both regions. During the first quarter of 2009, we discontinued allocation of corporate stewardship costs to our reportable segments. These changes are reflected as retrospective changes 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, 2010, 2009 and 2008. These changes did not have an impact on our consolidated balance sheets, consolidated statements of operations, consolidated statements of 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 geographic region in which we operate. The 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 geographic 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, 2010 Compared to Year Ended December 31, 2009

		2010								2009
						% of								% of				% Change
		Thousands				Revenue				Thousands				Revenue				(Unfavorable)
Revenues		$	568,108				100.0	%		$	914,348				100.0	%			(37.9)	%
Cost of operations			535,264				94.2				755,301				82.6				29.1
Gross profit			32,844				5.8				159,047				17.4				(79.3	)
Goodwill impairment			37,388				6.6				—				—				n/m
Loss on other asset impairments			64,143				11.3				1,186				0.1				n/m
Net gain on asset disposal			(31,253	)			5.5				(8,351	)			0.9				274.2
Selling, general and administrative expenses			70,333				12.4				69,165				7.6				(1.7	)
Operating income (loss)			(107,767	)			19.0				97,047				10.6				(211.0	)
Interest income			1,488				0.3				2,020				0.2				(26.3	)
Interest expense			(9,671	)			1.7				(13,061	)			1.4				26.0
Other income (expense), net			(555	)			0.1				7,302				0.8				(107.6	)
Income (loss) before income taxes			(116,505	)			20.5				93,308				10.2				(224.9	)
Income tax expense (benefit)			(21,424	)			3.8				19,577				2.1				209.4
Net income (loss)			(95,081	)			16.7				73,731				8.1				(229.0	)
Net income attributable to noncontrolling interest			581				0.1				—				—				n/m
Net income (loss) attributable to Global Industries, Ltd.		$	(95,662	)			16.8	%		$	73,731				8.1	%			(229.7)	%

Revenues — Revenues decreased by $346.2 million, or 37.9%, from $914.3 million for 2009 to $568.1 million for 2010 primarily due to lower activity and lower pricing in all reporting segments. 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 2010 was $43.6 million, compared to $55.5 million included for 2009. This $11.9 million decrease in expense was primarily attributable to decreased dry-dock amortization and lower units-of-production (UOP) depreciation due to vessel sales and decreased vessel utilization in 2010. Partially offsetting these decreases was the increase in amortization of leasehold improvements to one of our leased vessels. Stock-based compensation expense decreased between the periods by $0.7 million. We expect amortization of our dry-dock costs to be material to our operations in 2011.

Gross Profit — Gross profit decreased by $126.2 million between 2010 and 2009 to $32.8 million for 2010 compared to $159.0 million for 2009. This decrease was primarily due to lower revenues and higher non-recovered vessel costs attributable to decreased project activity, lower overall pricing for our services, and start up costs associated with preparing the Global 1200 for use. Profits from our Latin America segment were lower for 2010 due to lower pricing and low productivity on two projects in Mexico resulting in combined estimated project losses of $17.8 million. Lower profits in our West Africa segment were primarily attributable to idle vessel costs coupled with no project activity since our curtailment of operations in the region in mid-2009. Our Asia Pacific/Middle East segment experienced lower profits due to decreased revenues and higher non-recovered vessel costs in the region, as a result of lower project activity. Our North America Subsea segment was negatively affected by lower pricing, dry-docking of the Pioneer and lower project activity for the Global Orion, Sea Cat and Sea Fox. The Global Orion was undergoing major repairs to its crane in early 2010 and was unavailable for work until late May. The Sea Cat and Sea Fox were removed from our operating fleet in the first quarter of 2010 and subsequently sold. Partially offsetting these declines was increased project activity associated with the Olympic Challenger and Normand Commander. Our North America OCD segment was

negatively affected by lower pricing and lower project activity for the Hercules and Cherokee and the Sea Constructor, which was sold in July 2010.

Goodwill — In the third quarter of 2010, we tested the goodwill of the Latin America and North America OCD reporting units for potential impairment in light of losses incurred during the period and weaker outlook for future performance. Consequently, we recognized a goodwill impairment of $37.4 million. Of the total impairment, $1.1 million was related to our North America OCD segment and $36.3 million was related to our Latin America segment.

Loss on Other Asset Impairments — Loss on other asset impairments increased $62.9 million in 2010, compared to 2009. In 2010, we recorded a $43.8 million impairment of the Hercules as a result of our annual vessel impairment review. Due to the decline in market rates for this vessel, its book value at December 31, 2010 exceeded its fair market value resulting in the impairment. In February 2011, we gave notice to the lessor of the Titan 2 of our intent to terminate the lease effective in the second quarter of 2011. Consequently, the carrying amount of the related leasehold improvements and deferred dry-dock costs were written down to their fair value and we recorded a $7.9 million impairment. In addition, in 2010, we re-measured the fair value of three DSVs, a dive system and other equipment and recorded an aggregate impairment loss on these assets of $12.4 million. In comparison, in 2009, we retired two DSVs and three dive systems and recorded an aggregate impairment loss of $1.2 million.

Gain on Asset Disposal — Net gains on the disposal of assets increased $22.9 million in 2010, compared to 2009, primarily due to the gains recognized on the sale of seven vessels as part of the rationalization of our fleet in 2010 to better support larger, more complex projects. Net gains on asset disposals totaled $31.3 million in 2010 primarily from the sale of four DLBs, one DSV, one OSV, and one cargo barge. In comparison, net gains on asset disposals totaled $8.4 million in 2009 primarily from the sale of one DSV, one cargo barge, one DLB, and one pipelay/bury barge.

Selling, General and Administrative Expenses — Selling, general and administrative expenses increased by $1.1 million to $70.3 million for 2010, compared to $69.2 million for 2009. Increased labor costs of $3.8 million in our Latin America and Corporate segments was the primary driver of this increase along with increased equity compensation of $2.7 million. Additionally, in 2010, we initiated a relocation and severance plan with a number of our employees located in our Carlyss, Louisiana office. Many of these employees are being relocated to our Houston, Texas office as part of our plan to create a centralized organization structure. Selling, general and administrative expenses for 2010 include $1.0 million in relocation and severance expenses related to this plan. Partially offsetting these increases were the decreased expenses of $5.5 million for legal, accounting, and other professional fees in 2010.

Interest Income — Interest income decreased by $0.5 million to $1.5 million for 2010, compared to $2.0 million for 2009. Lower interest rates and cash balances in 2010 contributed to lower returns on cash balances and short-term investments compared to 2009.

Interest Expense — Interest expense decreased to $9.7 million for 2010 compared to $13.1 million for 2009. This decrease of $3.4 million was primarily due to higher capitalized interest related to expenditures for construction of the Global 1200 and Global 1201. Capitalized interest for 2010 was $17.9 million compared to $14.7 million for 2009.

Other Income (Expense), Net — Other expense, net was $0.6 million for 2010, compared to other income, net of $7.3 million for 2009. We incurred losses of $0.5 million on the sale of auction rate securities and $0.5 million on foreign currency exchange rate transactions in 2010, compared to gains of $3.6 million on foreign currency exchange rate transactions in 2009. In addition, we received proceeds of $2.7 million in 2009 from insurance claims.

Income Taxes — Our effective tax rate was 18.4% and 21.0%, respectively, for the years ended December 31, 2010 and 2009. Our tax rate is affected by recurring items, such as tax rates in foreign jurisdictions and the relative amount of income we earn, or losses we incur, in those jurisdictions. It is also affected by discrete items that may occur in any given year, but are not consistent from year to

year. The tax rate in 2010 was affected by losses we incurred in high tax jurisdictions that were tax benefited partially offset by income we earned in low tax jurisdictions and the goodwill impairment and losses in our Latin America segment that were not tax benefitted. Comparatively, 2009 was profitable and benefited 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 years ended December 31, 2010 and 2009.

North America Offshore Construction Division

Revenues were $60.3 million for 2010 compared to $124.7 million for 2009. The decrease of $64.4 million, or 52%, between 2010 and 2009 was primarily due to lower pricing due to competitive bidding and lower project activity for the Cherokee and Hercules, and for the Sea Constructor, which was sold in July 2010, and lower project activity for the Chickasaw. The decline in project activity was partially attributable to the permitting delays experienced as a consequence of the April 2010 Macondo oil spill in the U.S. Gulf of Mexico. Loss before taxes was $52.4 million for 2010 compared to $1.3 million for 2009. This $51.1 million difference in loss before taxes is primarily attributable to asset impairments in 2010. In 2010, we recorded a $1.1 million impairment of goodwill, a $5.0 million impairment on the Hercules reel upon its classification to Assets held for sale, and a $43.8 million impairment on the Hercules. The book value of the Hercules was tested for recoverability based upon its estimated discounted future cash flows. Due to the decline in market rates for this vessel, its book value exceeded its estimated fair value by $43.8 million, resulting in an impairment charge related to this vessel. These losses were partially offset by the $3.6 million gain recognized on the sale of the Sea Constructor and the CB6 in 2010.

North America Subsea

Revenues were $135.0 million for 2010 compared to $158.9 million for 2009, a decrease of $23.9 million, or 15%. The decrease was primarily attributable to lower project activity for the Global Orion and Pioneer, partially attributable to the permitting delays experienced as a consequence of the April 2010 Macondo oil spill in the U.S. Gulf of Mexico. Also, the Pioneer was in dry-dock for the first quarter of 2010 and the Global Orion was undergoing major repairs to its crane and was unavailable for work until late May 2010. Partially offsetting these declines was higher project activity for the Olympic Challenger, Normand Commander, and Sea Leopard. The Olympic Challenger and Normand Commander were utilized as response vessels to the oil spill in the U.S. Gulf of Mexico. The Normand Commander was assigned to our Latin America segment and returned to the U.S. Gulf of Mexico in May 2009 but experienced little activity in 2009. Income before taxes was $4.0 million for 2010 compared to $34.9 million for 2009. The decrease of $30.9 million in income before taxes was primarily attributable to lower overall project margins attributable to lower activity in the region. In addition, the results for 2009 included a $4.9 million gain on the sale of the Sea Lion.

Latin America

Revenues increased to $232.6 million for 2010 compared to $229.3 million for 2009. Loss before taxes was $62.5 million for 2010 compared to income before taxes of $8.2 million for 2009. This difference of $70.7 million was primarily attributable to project losses in Mexico, goodwill impairment of $36.3 million, and a $7.9 million impairment of the leasehold improvements and deferred dry-dock costs associated with the cancellation of the Titan 2 lease in February 2011. We experienced project losses of $17.8 million for the Line 58 and Line 59 projects for Pemex in Mexico in 2010 primarily due to lower than expected productivity and vessel standby delays from non-compensable weather downtime. Due to these project deteriorations, the results for 2010 include an estimate for losses on both the Line 58 and Line 59 projects through their estimated completion date in the first quarter of 2011. Partially offsetting these decreases was a $9.5 million gain on the sale of the Shawnee.

West Africa

Revenues were $(0.9) million in 2010 compared to revenues of $104.3 million for 2009. Income before taxes was $6.2 million for 2010 compared to $27.5 million for 2009. Activity in 2009 consisted of the completion of a large construction project for the replacement and repair of a 24-inch pipeline offshore Nigeria. Subsequent to the completion of that project in the second quarter of 2009, we curtailed our operations in the region and have had no project activity in West Africa since that time. In late 2010, we reserved $0.9 million in income related to outstanding accounts receivable on a prior year project. The income before taxes for 2010 was primarily due to the $11.6 million gain recognized on the sale of the Cheyenne and Tornado, partially offset by non-recovered vessel costs associated with these vessels, which remained idle in Tema, Ghana until their sale in September 2010. The income before taxes for 2009 was attributable to (1) project profitability related to the construction project in Nigeria, (2) gains on the sale of the Sea Puma, CB3, and the Power Barge 1, (3) a $3.3 million settlement with a customer for recovery of the deterioration of the Nigerian naira on invoice payments, and (4) the receipt of an insurance reimbursement of $1.8 million related to prior year costs incurred on a project claim.

Asia Pacific/Middle East

Revenues were $165.0 million for 2010 compared to $329.5 million for 2009. This decrease of $164.5 million, or 50%, for 2010 compared to 2009 was the result of decreased project activity in the region. Activity in 2010 consisted of two construction projects in Malaysia and one project in Indonesia compared to four major construction projects in India, Indonesia, Saudi Arabia, and Thailand in 2009. Income before taxes was $25.1 million for 2010 compared to $50.2 million for 2009. This decrease in income before taxes of $25.1 million was primarily attributable to decreased revenues and higher non-recovered vessel costs due to a decrease in project activity. In addition, in 2010, we recorded impairments of $5.8 million on the revaluation of the Subtec 1 and other equipment held for sale. These items were partially offset by the $6.4 million gain recognized on the sale of the DLB 332 in 2010. The results for 2009 benefitted from $20.4 million of productivity improvements and costs savings on the Berri and Qatif project in Saudi Arabia and gains of $3.8 million on the sale of the Seminole and Tonkawa.

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
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
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 Asia Pacific/Middle East, West Africa, and Latin America regions. This decrease was partially offset by a higher demand for our services in North America. 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.

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/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 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 were 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 years 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 Normand 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 Normand 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 2009, (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 and have had no project activity in West Africa since that time.

Asia Pacific/Middle East

Revenues were $329.5 million for 2009 compared to $457.3 million during 2008. This decrease of $127.8 million, or 28%, for 2009 compared to 2008 was the result of lower project activity in the region. Income before taxes was $50.2 million during 2009 compared to a loss before taxes of $29.0 million for 2008. This increase in income before taxes of $79.2 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. Partially offsetting the 2008 loss on the Berri and Qatif project were profits on two projects in India and charters of the Seminole and DLB 264. Reduced costs for labor and travel of $1.5 million and gains of $3.8 million on the sale of the Seminole and Tonkawa also positively affected the income before taxes for 2009. Partially offsetting these increases in 2009 was $2.4 million in foreign currency exchange losses.

Utilization of Major Construction Vessels

Worldwide utilization for our major construction vessels was 35%, 44%, and 49% for the fiscal years ended December 31, 2010, 2009, and 2008, 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

Since the economic downturn that began in 2008, demand in our industry remains low. Supply in the offshore construction industry continues to exceed demand on a worldwide basis. The ratio of bids to available vessels is creating pricing pressures among competitors and is affecting our ability to win new project awards. In addition, activity in the U.S. Gulf of Mexico has not returned to normal levels following the Macondo well incident in April 2010 and we cannot predict the future impact this incident will have on our operations. Bid activity is increasing for projects in 2012 and beyond, but we continue to expect weak demand for our services throughout 2011.

During 2011, our focus will include successful execution of our projects, successful integration of the Global 1200 and 1201 into our fleet, building additional backlog, retaining and/or hiring key personnel, 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, 2010, our backlog totaled approximately $170.8 million ($166.9 million for international regions and $3.9 million for North America). The entire backlog is scheduled to be performed in 2011. 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

Our cash and cash equivalents increased by $4.7 million to $349.6 million at December 31, 2010, compared to $344.9 million at December 31, 2009. Cash generated from operations, proceeds from the sale of assets, the sale of marketable securities and advance deposits received on the sale of assets provided the major sources of funds in 2010. These sources of funds sufficiently funded our operations and capital expenditures for expanding and modernizing our fleet of vessels.

The primary use of cash during 2010 has been the funding of capital spending. We had firm capital commitments on projects, which were in progress at December 31, 2010, of approximately $75.5 million, which is expected to be expended during 2011, primarily for the construction of the remaining new derrick/pipelay vessel (the Global 1201) and two new saturation diving systems. Total 2011 capital expenditures on committed and discretionary projects are expected to be approximately $170.0 — $180.0 million. The actual capital expenditures for 2011 may differ from our expectations due to changes in existing capital project schedules and/or projected capital projects. We expect that balances of cash and cash equivalents, 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, any requirements under our Revolving Credit Facility to cash collateralize letters of credit, and currently planned capital expenditures for 2011.

Cash Flows

Operating Activities — Net cash provided by our operating activities was $105.3 million for the year ended December 31, 2010, compared to $62.9 million for 2009. This increase in net cash provided from operating activities was primarily attributable to a net decrease in the major working capital components. The source of funds in 2009 was primarily attributable to the net income from continuing operations, partially offset by higher working capital needs.

Investing Activities — Investing activities used $69.8 million of net cash in 2010, compared to $1.2 million in 2009. During 2010, we used $177.1 million to purchase property and equipment, primarily for payments related to the construction of two new derrick/pipelay vessels (the Global 1200 and Global 1201), due to the upgrade of our fleet. This use of cash was partially offset by proceeds from the sale of assets of $52.2 million, proceeds of the sale of marketable securities of $41.4 million, and advance deposits received on the sale of assets of $16.8 million. The net cash used in 2009 was primarily due to the $122.0 million purchase of property and equipment, primarily for payments for the construction of the Global 1200 and Global 1201. Partially offsetting this use of cash were proceeds from 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 on June 30, 2009. For information about the current status of our cash collateralization under our Revolving Credit Facility, see the Liquidity Risk section below and Note 9 of the Notes to Consolidated Financial Statements.

Financing Activities — Financing activities used $31.4 million of net cash in 2010 compared to $4.5 million in 2009. In 2010, we used $26.0 million to pay long-term payables related to the purchase of property and equipment. The net cash used in 2009 was primarily due to the repayment of long-term debt.

Long-Term Debt

Our long-term debt outstanding as of December 31, 2010 and 2009 includes carrying amounts of $245.9 million and $236.9 million, respectively, for the $325.0 million principal amount 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 potentially, 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 9 of the Notes to Consolidated Financial Statements.

We also maintain $57.4 million principal amount 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, 2010, we had no borrowings against the facility and $44.8 million of letters of credit outstanding thereunder. Due to the sale of vessels mortgaged under the Revolving Credit Facility, the effective borrowing capacity under this facility at December 31, 2010 is $134.1 million, with credit availability of $89.3 million. We do have the option of increasing the capacity under this facility to $250.0 million by mortgaging one or more of our vessels that are not currently in the collateralized vessel pool.

As a result of our operating performance, we failed certain financial covenants of our Revolving Credit Facility in the second, third, and fourth quarter of 2010. We amended the Revolving Credit Facility in

the second quarter of 2010 and received a waiver of compliance with the covenants for the third quarter from the financial institutions participating in the Revolving Credit Facility. As a result of the volatility in earnings associated with our business, effective as of February 24, 2011, we amended our Revolving Credit Facility to permanently address this volatility and cyclicality of our business by inserting a clause that allows us, at our option, to choose to cash collateralize our letter of credit exposure, when covenant compliance, as defined in the Revolving Credit Facility, is not possible and thereby achieve compliance. In addition, the amendment includes a waiver of compliance with the covenant conditions for the fourth quarter of 2010. During periods of cash collateralization, no borrowings, letters of credit, or bank guarantees unsecured by cash are permitted. For additional discussion, see below under Liquidity Risk and Note 9 of the Notes to Consolidated Financial Statement.

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.

Other Indebtedness and Obligations

We also have a $6.0 million short-term credit facility at one of our foreign locations, which is secured by a letter of credit issued under our Revolving Credit Facility. At December 31, 2010, we had $1.6 million of letters of credit outstanding and $4.4 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 $6.4 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, 2010 of $1.1 million. In February 2011, we gave notice to the owner of the Titan 2 that we were terminating the charter, effective in the second quarter of 2011. Consequently, we recorded a $7.9 million impairment of the leasehold improvements and deferred dry-dock costs related thereto.

We also have a long-term charter for an MSV, the Normand Commander. The charter 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 69.4 million kroners (or $11.8 million as of December 31, 2010). As of December 31, 2010, we had entered into forward foreign currency contracts that have enabled us to fulfill 31.5 million of our remaining non-cancellable Norwegian kroner obligations under this charter at an average rate of 6.23 kroners per U.S. dollar. In February 2011, we gave notice of our intent to renew the charter of this vessel for one year ending June 2012.

Future Lease Obligations — The following table sets forth, as of December 31, 2010, our minimum rental commitments under operating leases with an initial non-cancellable term of one year or more (in thousands).

2011		$	33,042
2012			26,075
2013			12,120
2014			—
2015			—
Thereafter			—
Total		$	71,237

Summary of Contractual Obligations as of December 31, 2010

		Payments due by period
Contractual Obligations		Total				Less than 1 year				1-3 years				3-5 years				More than 5 years
		(in thousands)
Long-Term Debt Principal Only(1)		$	382,420			$	3,960			$	7,920			$	332,920			$	37,620
Long-Term Debt Interest Only(1)			64,484				13,288				25,661				11,033				14,502
Operating Lease Obligations — Cancelable			—				—				—				—				—
Operating Lease Obligations — Non-Cancelable			71,237				33,042				38,195				—				—
Purchase Obligations(2)			75,462				75,462				—				—				—
Total		$	593,603			$	125,752			$	71,776			$	343,953			$	52,122

The contractual obligations reported above exclude our liability of $4.8 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, 2010 was $34.5 million in surety bonds and $45.3 million in bank guarantees and letters of credit. The surety bonds are due to expire between January 2011 and October 2011 and the bank guarantees/letters of credit are due to expire between January 2011 and March 2014.

Liquidity Risk

Our Revolving Credit Facility provides a borrowing capacity of up to $150.0 million. As of December 31, 2010, we had no borrowings against the facility and $44.8 million of letters of credit outstanding thereunder. Due to the sale of vessels mortgaged under the Revolving Credit Facility, the effective borrowing capacity under this facility at December 31, 2010 is $134.1 million, with credit availability of $89.3 million. We do have the option of increasing the capacity under this facility to $250.0 million by mortgaging one or more of our vessels that are not currently in the collateralized vessel pool.

As a result of our operating performance and the volatility in our earnings, we did not meet current financial covenants of our Revolving Credit Facility as of December 31, 2010 and the financial

institutions participating in the Revolving Credit Facility waived compliance. In addition, effective as of February 24, 2011, we amended our Revolving Credit Facility to permanently address this volatility and cyclicality of our business by inserting a clause that allows us, at our option, to choose to cash collateralize our letter of credit exposure, when covenant compliance, as defined in the Revolving Credit Facility, is not possible and thereby achieve compliance. During periods of cash collateralization, no borrowings, letters of credit, or bank guarantees unsecured by cash are available to us under the Revolving Credit Facility.

Liquidity Outlook

Our liquidity position could affect our ability to bid on and accept projects, particularly where the project requires a letter of credit, which could have a material adverse effect on our future results. Further, 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 have insufficient liquidity to meet all working capital needs and may have to postpone or cancel capital expenditures and/or take other actions to reduce expenses, including closing offices, stacking idle vessels, selling assets, and further reducing our workforce. Moreover, our current financial projections indicate that we shall be required to cash collateralize our letters of credit exposure to comply with the terms of our Revolving Credit Facility, effective as of February 24, 2011. However, throughout 2011, we expect that balances of cash and cash equivalents, 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, including the requirement to cash collateralize letters of credit, if so required..

Capital expenditures for 2011 are expected to be between $170 million and $180 million. This range includes expenditures for the Global 1201, including capitalized interest related thereto, two new saturation diving systems, and various vessel upgrades. In addition, we will continue to evaluate the divesture of assets and vessel acquisitions as we deem appropriate.

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

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 was effective for reporting periods beginning after December 15, 2009, except for the Level 3 reconciliation disclosures which will be effective for reporting periods beginning after December 15, 2010. The adoption of this guidance did not have a material impact on our condensed consolidated financial statements. See Note 3 of the Notes to the Consolidated Financial Statements for disclosures required by this guidance.

ASU No. 2009-17. 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 was effective for our fiscal year

beginning January 1, 2010. The adoption of this guidance did not have a material impact on our condensed consolidated financial statements.

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 probable 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. In the third quarter of 2010, we tested goodwill in light of losses incurred during the period and weaker outlook for future performance. The result of the test was a complete impairment of our goodwill. Consequently, the carrying amount of goodwill as of December 31, 2010 was -0-. The carrying amount of goodwill as of December 31, 2009 was approximately $37.4 million, and was 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 affect our net income or loss by $1.2 million.

Our tax filings for various periods are subject 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 revenue by contracting, to the extent possible, international construction jobs to be payable in U.S. dollars. We hedge operating expenses to the extent necessary. 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, 2010, 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, 2010, which result from a long-term vessel charter, will require the use of 35.9 million kroners (or $6.1 million as of December 31, 2010) over the next six months. As of December 31, 2010, we had hedged 31.5 million of our non-cancellable Norwegian kroner commitments related to these vessel charters at an average rate of 6.23 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, 2010 would have negligible impact on the value of the 4.4 million unhedged portion of these commitments.

The estimated cost to complete capital expenditure projects in progress at December 31, 2010 will require an aggregate commitment of 27.6 million Singapore dollars (or $21.4 million as of December 31, 2010). As of December 31, 2010, we had hedged 7.5 million of these Singapore dollar commitments at an average rate of 1.40 Singapore dollars per U.S. dollar. A 1% increase in the value of the Singapore dollar at December 31, 2010 will increase the dollar value of the remaining 20.1 million unhedged commitments by approximately $0.1 million.

As of December 31, 2010, we were committed to purchase certain equipment which will require the use of 3.0 million Euros (or $3.9 million as of December 31, 2010) over the next year. A 1% increase in the value of the Euro will increase the dollar value of these commitments by approximately $0.04 million.

Interest Rate Risk

We are exposed to changes in interest rates with respect to our investments in cash equivalents. Our investments consist primarily of commercial paper, bank certificates of deposit, money market funds, and treasury 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 0.25% increase or decrease in the average interest rate of our cash equivalents would have an approximate $0.9 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, 2010, 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.
Houston, Texas

We have audited the accompanying consolidated balance sheets of Global Industries, Ltd. and subsidiaries (the “Company”) as of December 31, 2010 and 2009, and the related consolidated statements of operations, equity, and cash flows for each of the three years in the period ended December 31, 2010. 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, 2010 and 2009, and the results of their operations and their cash flows for each of the three years in the period ended December 31, 2010, 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, 2010, 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 25, 2011 expressed an unqualified opinion on the Company’s internal control over financial reporting.

/s/ DELOITTE & TOUCHE LLP
Houston, Texas
February 25, 2011

GLOBAL INDUSTRIES, LTD.

CONSOLIDATED BALANCE SHEETS
(in thousands)

		December 31,
		2010				2009
ASSETS
Current Assets
Cash and cash equivalents		$	349,609			$	344,855
Restricted cash			4,297				1,139
Marketable securities			—				30,750
Accounts receivable — net of allowance of $2,767 for 2010 and $2,765 for 2009			40,693				160,273
Unbilled work on uncompleted contracts			56,152				92,569
Contract costs incurred not yet recognized			15,052				489
Deferred income taxes			4,610				2,945
Assets held for sale			16,719				16,152
Prepaid expenses and other			34,099				31,596
Total current assets			521,231				680,768
Property and Equipment, net			784,719				722,819
Other Assets
Marketable securities—long-term			—				11,097
Accounts receivable—long-term			8,679				12,294
Deferred charges, net			20,429				49,866
Goodwill			—				37,388
Other			8,683				9,961
Total other assets			37,791				120,606
Total		$	1,343,741			$	1,524,193
LIABILITIES AND EQUITY
Current Liabilities
Current maturities of long term debt		$	3,960			$	3,960
Accounts payable			109,394				192,008
Employee-related liabilities			17,935				18,079
Income taxes payable			26,618				45,301
Accrued anticipated contract losses			5,782				322
Other accrued liabilities			31,721				15,489
Total current liabilities			195,410				275,159
Long-Term Debt			299,405				294,366
Deferred Income Taxes			49,995				69,998
Other Liabilities			18,242				15,171
Commitments and Contingencies			—				—
Equity
Common stock, $0.01 par value, 250,000 authorized, and 115,504 and 119,989 shares issued at December 31, 2010 and 2009, respectively			1,155				1,200
Additional paid-in capital			414,895				513,353
Retained earnings			372,768				468,430
Treasury stock at cost, 6,130 shares at December 31, 2009			—				(105,038	)
Accumulated other comprehensive loss			(8,770	)			(8,446	)
Shareholders’ equity—Global Industries, Ltd.			780,048				869,499
Noncontrolling interest			641				—
Total equity			780,689				869,499
Total		$	1,343,741			$	1,524,193

See notes to consolidated financial statements.

GLOBAL INDUSTRIES, LTD.

CONSOLIDATED STATEMENTS OF OPERATIONS
(in thousands, except per share data)

		Year Ended December 31,
		2010				2009				2008
Revenues		$	568,108			$	914,348			$	1,070,988
Cost of operations			535,264				755,301				1,084,581
Gross profit (loss)			32,844				159,047				(13,593	)
Goodwill impairment			37,388				—				—
Loss on other asset impairments			64,143				1,186				2,551
Net gain on asset disposals			(31,253	)			(8,351	)			(1,695	)
Selling, general, and administrative expenses			70,333				69,165				95,364
Operating income (loss)			(107,767	)			97,047				(109,813	)
Interest income			1,488				2,020				14,477
Interest expense			(9,671	)			(13,061	)			(16,439	)
Other income (expense), net			(555	)			7,302				(641	)
Income (loss) before income taxes			(116,505	)			93,308				(112,416	)
Income tax expense (benefit)			(21,424	)			19,577				6,775
Net income (loss)			(95,081	)			73,731				(119,191	)
Less: Net income attributable to noncontrolling interest			581				—				—
Net income (loss) attributable to Global Industries, Ltd.		$	(95,662	)		$	73,731			$	(119,191	)
Earnings (loss) per common share:
Basic:
Net income (loss) attributable to Global Industries, Ltd.		$	(0.84	)		$	0.65			$	(1.05	)
Diluted:
Net income (loss) attributable to Global Industries, Ltd.		$	(0.84	)		$	0.64			$	(1.05	)
Weighted Average Common Shares Outstanding:
Basic			113,832				112,631				113,647
Diluted			113,832				113,125				113,647

See notes to consolidated financial statements.

GLOBAL INDUSTRIES, LTD.

CONSOLIDATED STATEMENTS OF EQUITY
(in thousands, except share data)

																		Accumulated
																		Other
		Common Stock								Additional								Comprehensive				Retained				Shareholders’				Non-controlling
		Shares				Amount				Paid-In Capital				Treasury Stock				Loss				Earnings				Equity-Global				Interest				Total Equity
Balance at Jan 1, 2008			118,000,786			$	1,180			$	486,606			$	(77,257	)		$	(3,903	)		$	513,890			$	920,516			$	—			$	920,516
Comprehensive loss:
Net loss			—				—				—				—				—				(119,191	)			(119,191	)			—				(119,191	)
Unrealized loss on derivatives, net of tax			—				—				—				—				(7,490	)			—				(7,490	)			—				(7,490	)
Total comprehensive loss, net of tax			—				—				—				—				(7,490	)			(119,191	)			(126,681	)			—				(126,681	)
Amortization of unearned stock compensation			—				—				8,375				—				—				—				8,375				—				8,375
Restricted stock issues, net			681,446				7				2,648				—				—				—				2,655				—				2,655
Exercise of stock options			967,628				10				8,595				—				—				—				8,605				—				8,605
Tax effect of exercise of stock options			—				—				3,121				—				—				—				3,121				—				3,121
Treasury stock purchased			—				—				—				(27,781	)			—				—				(27,781	)			—				(27,781	)
Balance at Dec 31, 2008			119,649,860			$	1,197			$	509,345			$	(105,038	)		$	(11,393	)		$	394,699			$	788,810			$	—			$	788,810
Comprehensive income:
Net income			—				—				—				—				—				73,731				73,731				—				73,731
Unrealized gain on derivatives, net of tax			—				—				—				—				3,030				—				3,030				—				3,030
Unrealized gain on auction rate securities, net of tax			—				—				—				—				(83	)							(83	)							(83	)
Total comprehensive income, net of tax			—				—				—				—				2,947				73,731				76,678				—				76,678
Amortization of unearned stock compensation			—				—				4,946				—				—				—				4,946				—				4,946
Restricted stock issues, net			301,749				3				369				—				—				—				372				—				372
Exercise of stock options			37,133				—				202				—				—				—				202				—				202
Tax effect of exercise of stock options			—				—				(1,509	)			—				—				—				(1,509	)			—				(1,509	)
Balance at Dec 31, 2009			119,988,742			$	1,200			$	513,353			$	(105,038	)		$	(8,446	)		$	468,430			$	869,499			$	—			$	869,499
Comprehensive income (loss):
Net income (loss)			—				—				—				—				—				(95,662	)			(95,662	)			581				(95,081	)
Unrealized loss on derivatives, net of tax			—				—				—				—				(407	)			—				(407	)			—				(407	)
Reclassification of unrealized loss on auction rate securities			—				—				—				—				83				—				83				—				83
Total comprehensive income (loss), net of tax			—				—				—				—				(324	)			(95,662	)			(95,986	)			581				(95,405	)
Amortization of unearned stock compensation			—				—				2,949				—				—				—				2,949				—				2,949
Restricted stock issues, net			1,640,424				16				4,060				—				—				—				4,076				—				4,076
Exercise of stock options			5,000				—				21				—				—				—				21				—				21
Tax effect of exercise of stock options			—				—				(511	)			—				—				—				(511	)			—				(511	)
Retirement of treasury stock			(6,130,195	)			(61	)			(104,977	)			105,038				—				—				—				—				—
Sale of subsidiary shares to noncontrolling interest			—				—				—				—				—				—				—				60				60
Balance at Dec 31, 2010			115,503,971			$	1,155			$	414,895			$	—			$	(8,770	)		$	372,768			$	780,048			$	641			$	780,689