UNITED STATES
SECURITIES AND EXCHANGE COMMISSION

Washington, D. C. 20549

FORM 10-Q

þ		QUARTERLY 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		72-1212563
(State or other jurisdiction of		(I.R.S. Employer Identification No.)
incorporation or organization)
11490 Westheimer, Suite 400
Houston, Texas		77077
(Address of principal executive offices)		(Zip Code)

(281) 529-7979
(Registrant’s telephone number, including area code)

8000 Global Drive
Carlyss, Louisiana 70665
(Former name, former address and former fiscal year, if changed since last report)

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 whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer or a smaller reporting company. See definition 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 a smaller reporting company)

Indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Exchange Act). YES o                     NO þ

The number of shares of the registrant’s common stock outstanding as of October 31, 2011, was 115,748,003.

 

 

Global Industries, Ltd.
Table of Contents

		Page
PART I — FINANCIAL INFORMATION
Item 1. Financial Statements			2
Condensed Consolidated Balance Sheets (Unaudited)			3
Condensed Consolidated Statements of Operations (Unaudited)			4
Condensed Consolidated Statements of Equity (Unaudited)			5
Condensed Consolidated Statements of Cash Flows (Unaudited)			6
Notes to Condensed Consolidated Financial Statements (Unaudited)			7
Item 2. Management’s Discussion and Analysis of Financial Condition and Results of Operations			23
Item 3. Quantitative and Qualitative Disclosures About Market Risk			33
Item 4. Controls and Procedures			34
PART II — OTHER INFORMATION
Item 1. Legal Proceedings			35
Item 1A. Risk Factors			35
Item 2. Unregistered Sales of Equity Securities and Use of Proceeds			36
Item 6. Exhibits			37
Signature			38
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

PART I — FINANCIAL INFORMATION

Item 1. Financial Statements.

GLOBAL INDUSTRIES, LTD.

CONDENSED CONSOLIDATED BALANCE SHEETS
(In thousands)

		September 30				December 31
		2011				2010
		(Unaudited)
ASSETS
Current Assets
Cash and cash equivalents		$	168,472			$	349,609
Restricted cash			16,488				4,297
Marketable securities			29,830				—
Accounts receivable — net of allowance of $1,247 for 2011
and $2,767 for 2010			40,696				40,693
Unbilled work on uncompleted contracts			44,452				56,152
Contract costs incurred not yet recognized			20,072				15,052
Deferred income taxes			3,565				4,610
Assets held for sale			1,510				16,719
Prepaid expenses and other			41,730				34,099
Total current assets			366,815				521,231
Property and Equipment, net			825,537				784,719
Other Assets
Marketable securities — long-term			1,535				—
Accounts receivable — long-term			8,687				8,679
Deferred charges, net			21,248				20,429
Other			17,704				8,683
Total other assets			49,174				37,791
Total		$	1,241,526			$	1,343,741
LIABILITIES AND SHAREHOLDERS’ EQUITY
Current Liabilities
Current maturities of long term debt		$	3,960			$	3,960
Accounts payable			75,568				109,394
Employee-related liabilities			15,882				17,935
Income taxes payable			20,220				26,618
Accrued anticipated contract losses			4,315				5,782
Other accrued liabilities			17,911				31,721
Total current liabilities			137,856				195,410
Long-Term Debt			302,651				299,405
Deferred Income Taxes			54,660				49,995
Other Liabilities			19,943				18,242
Commitments and Contingencies			—				—
Shareholders’ Equity
Common stock, $0.01 par value, 250,000 shares authorized, and 115,759 and 115,504 shares issued at September 30, 2011 and December 31, 2010, respectively			1,158				1,155
Additional paid-in capital			417,322				414,895
Retained earnings			316,122				372,768
Accumulated other comprehensive loss			(8,186	)			(8,770	)
Shareholders’ equity — Global Industries, Ltd.			726,416				780,048
Noncontrolling interest			—				641
Total equity			726,416				780,689
Total		$	1,241,526			$	1,343,741

See Notes to Condensed Consolidated Financial Statements.

GLOBAL INDUSTRIES, LTD.

CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS
(In thousands, except per share data)
(Unaudited)

		Three Months Ended								Nine Months Ended
		September 30								September 30
		2011				2010				2011				2010
Revenues		$	67,148			$	189,501			$	270,069			$	418,080
Cost of operations			89,926				179,707				320,962				405,352
Gross profit (loss)			(22,778	)			9,794				(50,893	)			12,728
Goodwill impairment			—				37,388				—				37,388
Loss (gain) on asset disposals and impairments			(28	)			(23,271	)			(7,053	)			(12,483	)
Relocation costs			—				838				—				838
Selling, general and administrative expenses			18,544				16,633				52,377				51,572
Equity in (earnings) of unconsolidated affiliate			(3,158	)			—				(3,158	)			—
Operating income (loss)			(38,136	)			(21,794	)			(93,059	)			(64,587	)
Interest income			44				516				1,253				1,249
Interest expense			(1,989	)			(2,649	)			(6,972	)			(7,308	)
Gain on sale of investment in subsidiaries			47,848				—				47,848				—
Other income (expense), net			(1,804	)			1,275				(775	)			269
Income (loss) before taxes			5,963				(22,652	)			(51,705	)			(70,377	)
Income tax expense (benefit)			1,491				5,067				4,227				(22,706	)
Net income (loss)			4,472				(27,719	)			(55,932	)			(47,671	)
Less: Net income attributable to noncontrolling interest			—				139				714				139
Net income (loss) attributable to Global Industries, Ltd.		$	4,472			$	(27,858	)		$	(56,646	)		$	(47,810	)
Earnings (Loss) Per Common Share
Basic		$	0.04			$	(0.24	)		$	(0.50	)		$	(0.42	)
Diluted		$	0.04			$	(0.24	)		$	(0.50	)		$	(0.42	)
Weighted Average Common Shares Outstanding
Basic			114,334				113,959				114,267				113,721
Diluted			114,363				113,959				114,267				113,721

See Notes to Condensed Consolidated Financial Statements.

GLOBAL INDUSTRIES, LTD.

CONDENSED CONSOLIDATED STATEMENTS OF EQUITY
(In thousands, except share data)

(Unaudited)

																		Accumulated
										Additional								Other								Shareholders’				Non-
		Common Stock								Paid-In				Treasury				Comprehensive				Retained				Equity-Global				controlling
		Shares				Amount				Capital				Stock				Loss				Earnings				Industries, Ltd.				Interest				Total Equity
Balance at Dec. 31, 2010			115,503,971			$	1,155			$	414,895			$	—			$	(8,770	)		$	372,768			$	780,048			$	641			$	780,689
Comprehensive income (loss):
Net income (loss)			—				—				—				—				—				(56,646	)			(56,646	)			714				(55,932	)
Unrealized loss on derivatives			—				—				—				—				(98	)			—				(98	)			—				(98	)
Unrealized loss on marketable securities			—				—				—				—				(15	)			—				(15	)			—				(15	)
Adjustment due to sale of investment in subsidiaries			—				—				—				—				697				—				697								697
Total comprehensive income (loss), net of tax			—				—				—				—				584				(56,646	)			(56,062	)			714				(55,348	)
Amortization of unearned stock compensation			—				—				2,360				—				—				—				2,360				—				2,360
Restricted stock issues, net			222,611				3				591				—				—				—				594				—				594
Exercise of stock options			32,366				—				122				—				—				—				122				—				122
Tax effect of exercise of stock options			—				—				(646	)			—				—				—				(646	)			—				(646	)
Sale of investment in subsidiaries			—				—				—				—				—				—				—				(1,355	)			(1,355	)
Balance at Sept. 30, 2011			115,758,948			$	1,158			$	417,322			$	—			$	(8,186	)		$	316,122			$	726,416			$	—			$	726,416

																		Accumulated
										Additional								Other								Shareholders’				Non-
		Common Stock								Paid-In				Treasury				Comprehensive				Retained				Equity-Global				controlling
		Shares				Amount				Capital				Stock				Loss				Earnings				Industries, Ltd.				Interest				Total Equity
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)			—				—				—				—				—				(47,810	)			(47,810	)			139				(47,671	)
Unrealized loss on derivatives			—				—				—				—				(345	)			—				(345	)			—				(345	)
Reclassification of unrealized loss on auction rate securities			—				—				—				—				83				—				83				—				83
Total comprehensive income (loss), net of tax			—				—				—				—				(262	)			(47,810	)			(48,072	)			139				(47,933	)
Amortization of unearned stock compensation			—				—				2,439				—				—				—				2,439				—				2,439
Restricted stock issues, net			1,270,315				12				3,526				—				—				—				3,538				—				3,538
Exercise of stock options			4,400				—				19				—				—				—				19				—				19
Tax effect of exercise of stock options			—				—				(408	)			—				—				—				(408	)			—				(408	)
Retirement of treasury stock			(6,130,195	)			(61	)			(104,977	)			105,038				—				—				—				—				—
Sale of subsidiary shares to noncontrolling interest			—				—				—				—				—				—				—				60				60
Balance at Sept. 30, 2010			115,133,262			$	1,151			$	413,952			$	—			$	(8,708	)		$	420,620			$	827,015			$	199			$	827,214

See Notes to Condensed Consolidated Financial Statements.

GLOBAL INDUSTRIES, LTD.

CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS
(In thousands)
(Unaudited)

		Nine Months Ended
		September 30
		2011				2010
Cash Flows From Operating Activities
Net income (loss)		$	(55,932	)		$	(47,671	)
Adjustments to reconcile net income (loss) to net cash provided by (used in) operating activities:
Depreciation and non-stock-based amortization			29,468				35,468
Stock-based compensation expense			3,949				6,659
Provision for/(Recovery of) doubtful accounts			103				341
Gain on sale or disposal of property and equipment			(12,520	)			(23,964	)
Derivative (gain) loss			571				413
Loss on asset impairments			5,467				48,869
Gain on sale of investment in subsidiaries			(47,848	)			—
Equity in earnings of unconsolidated affiliate			(3,158	)			—
Deferred income taxes			4,115				(18,990	)
Other			(74	)			1,543
Changes in operating assets and liabilities
Accounts receivable, unbilled work, and contract costs			6,705				92,154
Prepaid expenses and other			(15,262	)			(7,760	)
Accounts payable, employee-related liabilities, and other accrued liabilities			(35,365	)			(23,802	)
Deferred dry-docking costs incurred			(9,592	)			(2,169	)
Net cash provided by (used in) operating activities			(129,373	)			61,091
Cash Flows From Investing Activities
Proceeds from the sale of assets			2,770				35,512
Proceeds from the sale of investment in subsidiaries			59,000				—
Advance deposits on asset sales			—				5,750
Additions to property and equipment			(60,746	)			(132,280	)
Sale of marketable securities			—				41,414
Purchase of marketable securities			(31,365	)			—
Decrease in (additions to) restricted cash			(13,905	)			(3,407	)
Net cash provided by (used in) investing activities			(44,246	)			(53,011	)
Cash Flows From Financing Activities
Repayment of long-term debt			(3,960	)			(3,960	)
Payments on long-term payables for property and equipment acquisitions			—				(26,031	)
Proceeds from sale of common stock, net			122				19
Repurchase of common stock			(1,041	)			(725	)
Additions to deferred charges			(149	)			(563	)
Other			—				60
Net cash provided by (used in) financing activities			(5,028	)			(31,200	)
Effect of exchange rate changes on cash			(2,490	)			634
Cash and cash equivalents
Increase (decrease)			(181,137	)			(22,486	)
Beginning of period			349,609				344,855
End of period		$	168,472			$	322,369
Supplemental Disclosures
Interest paid, net of amounts capitalized		$	13,514			$	10,227
Income tax payments (refunds), net		$	(4,995	)		$	2,347
Property and equipment additions included in accounts payable		$	35,018			$	55,150

See Notes to Condensed Consolidated Financial Statements.

GLOBAL INDUSTRIES, LTD.

Notes to Condensed Consolidated Financial Statements (Unaudited)

1.		General
		Basis of Presentation
		The accompanying unaudited Condensed Consolidated Financial Statements include the accounts of Global Industries, Ltd. and its subsidiaries (“Global,” “Company,” “we,” “us,” or “our”).
		In the opinion of our management, all adjustments (such adjustments consisting of a normal and recurring nature) necessary for a fair presentation of the operating results for the interim periods presented have been included in the unaudited Condensed Consolidated Financial Statements. Operating results for the period ended September 30, 2011, are not necessarily indicative of the results that may be expected for the year ending December 31, 2011. These financial statements should be read in conjunction with our audited Consolidated Financial Statements and related notes thereto included in our Annual Report on Form 10-K for the year ended December 31, 2010.
		All “$” represent U.S. Dollars.
		Recent Accounting Pronouncements
		ASU No. 2010-06. In January 2010, the FASB issued ASU No. 2010-06 which amends ASC Topic 820, Fair Value Measurement, 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 were 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.
		ASU No. 2011-04. In May 2011, the FASB issued ASU No. 2011-04 which amends ASC Topic 820, Fair Value Measurement, to improve the comparability of fair value measurements presented and disclosed in financial statements prepared in accordance with U.S. Generally Accepted Accounting Principles (“GAAP”) and International Financial Reporting Standards (“IFRS”). This guidance is largely consistent with existing fair value measurement principles in GAAP; however, it expands current disclosure requirements for fair value measurements and amends the application of certain fair value measurements. This guidance is effective for reporting periods beginning on or after December 15, 2011. We do not expect the adoption of this guidance to have a material impact on our condensed consolidated financial statements.
		ASU No. 2011-05. In June 2011, the FASB issued ASU No. 2011-05 which amends ASC Topic 220, Comprehensive Income, to improve the comparability of comprehensive income presentation in financial statements prepared in accordance with GAAP and IFRS. This guidance requires entities to report components of comprehensive income in either (1) a continuous statement of comprehensive income or (2) two separate but consecutive statements. This guidance is effective for reporting periods beginning after December 15, 2011. We do not expect the adoption of this guidance to have a material impact on our condensed consolidated financial statements.
2.		Technip Merger Agreement
		On September 11, 2011, Global, Technip S.A. (“Technip”), and Apollon Merger Sub B, Inc., a wholly-owned subsidiary of Technip, (“Apollon”) entered into an Agreement and Plan of Merger (the “Merger Agreement”), pursuant to which, upon the terms and subject to the conditions set forth in the Merger Agreement, Apollon will merge with and into Global (the “Merger”) with Global surviving the Merger as a wholly-owned subsidiary of Technip. At the effective time of the Merger, each outstanding share of common stock of Global (“Common Stock”) (other than shares in treasury of Global or owned by Technip, Apollon, or any of their affiliates) will be automatically cancelled and converted into the right to receive $8.00 in cash without interest (the “Merger Consideration”). In addition (a) each option to purchase shares of Common Stock (whether or not exercisable or vested, each a “Stock Option”) will be

		converted into the right to receive, less applicable withholding taxes, an amount in cash determined by multiplying (i) the excess, if any, of the Merger Consideration over the applicable exercise price per share of Common Stock subject to the Stock Option by (ii) the number of shares of Common Stock the holder could have purchased (assuming full vesting of the Stock Option) had such holder exercised such option in full immediately prior to the effective time of the Merger, (b) each share of restricted stock will vest and be treated as a share of Common Stock entitled to receive the Merger Consideration, and (c) each performance stock unit with respect of Common Stock (a “Performance Unit”) will be converted into the right to receive an amount in cash determined by multiplying (i) the Merger Consideration by (ii) the number of shares of Common Stock issuable pursuant to such Performance Unit assuming attainment of the target level of performance (or such other level of performance if provided for in the award agreement underlying such Performance Unit).
		Consummation of the Merger is subject to customary conditions, including (a) approval of the Merger Agreement by Global’s stockholders, (b) antitrust clearance in Mexico, (c) approval by the Committee on Foreign Investments in the United States under the Exon-Florio Amendment, as amended, and (d) the absence of any material adverse effect on Global’s business. Moreover, each party’s obligation to consummate the Merger is subject to certain other conditions, including the adoption of Global’s amended and restated articles of incorporation by Golbal’s shareholders to remove a limitation on the ownership of Common Stock by non-United States citizens, the accuracy of the other party’s representations and warranties (subject to certain materiality qualifiers) and the other party’s compliance with its covenants and agreements contained in the Merger Agreement (subject to certain materiality qualifiers).
		While we cannot predict the exact timing of the effective time of the Merger or whether the Merger will be consummated, assuming timely satisfaction of necessary closing conditions, we anticipate that the Merger will be completed by or during the fourth quarter of 2011. The special meeting of Global’s shareholders to consider and vote upon a proposal to adopt the Merger Agreement will he held on Wednesday, November 30, 2011.
		Under the Merger Agreement, in certain circumstances, we could be required to pay a termination fee of $30.0 million to Technip if the Merger Agreement is terminated.
3.		Restricted Cash
		At September 30, 2011, we had restricted cash of $18.2 million. Of this amount, $15.2 million represents cash collateral for $14.9 million of outstanding letters of credit and bank guarantees issued under our Third Amended and Restated Credit Agreement, as amended (“Revolving Credit Facility”). Based on our operating and cash flow projections and the expiration dates of the outstanding letters of credit and bank guarantees, we have classified $13.5 million as a current asset and $1.7 million as an other asset on the accompanying Condensed Consolidated Balance Sheets.
		In addition, at September 30, 2011, we had $3.0 million of restricted cash for excess project funds denominated in Indian rupees in the Asia Pacific region and held at the Royal Bank of Scotland and Standard Chartered Bank. These funds can only be repatriated after the project accounts are audited and tax clearance obtained. We expect the period of restriction on this cash will not exceed twelve months and is therefore classified as a current asset on the Condensed Consolidated Balance Sheets.
4.		Marketable Securities
		The following table is a summary of our marketable securities as of September 30, 2011:

						Gross				Gross
		Amortized				Unrealized				Unrealized
		Cost				Gains				Losses				Fair Value
		(In thousands)
Municipal bonds		$	6,655			$	7			$	—			$	6,662
Corporate bonds			8,765				—				(24	)			8,741
Commercial paper			15,968				5				(11	)			15,962
Total		$	31,388			$	12			$	(35	)		$	31,365

Our investment in marketable securities is included in the following accounts on the Condensed Consolidated Balance Sheets:

		September 30				December 31
		2011				2010
		(In thousands)
Marketable securities		$	29,830			$	—
Marketable securities — long term			1,535				—
Total		$	31,365			$	—

		Our investments in marketable securities are classified as available-for-sale and are carried at fair value with any unrealized gains and losses recorded in Other comprehensive income. All unrealized gains and losses as of September 30, 2011 are temporary. As of September 30, 2011, the contractual maturities of our marketable securities range from October 2011 to January 2013.
5.		Derivatives
		We provide services in a number of countries throughout the world and, as a result, are exposed to changes in foreign currency exchange rates. Costs in some countries are incurred, in part, in currencies other than the applicable functional currency. We selectively use forward foreign currency contracts to manage our foreign currency exposure. Our outstanding forward foreign currency contracts at September 30, 2011 are used to hedge (i) cash flows for long-term charter payments on a multi-service vessel denominated in Norwegian kroners, (ii) certain purchase commitments related to the construction of the Global 1201 in Singapore dollars, and (iii) a portion of the operating costs in the Asia Pacific region that are denominated in Singapore dollars.
		The Norwegian kroner forward contracts have maturities extending until June 2012 and are accounted for as cash flow hedges with the effective portion of unrealized gains and losses recorded in Accumulated other comprehensive income (loss) and reclassified into earnings in the same period or periods during which the hedged transaction affects earnings. For the three and nine months ended September 30, 2011, there was no ineffective portion of the hedging relationship for these forward contracts. As of September 30, 2011, there were $0.1 million in unrealized gains, net of taxes, in Accumulated other comprehensive income (loss) of which approximately $0.1 million is expected to be realized in earnings during the twelve months following September 30, 2011. As of September 30, 2011 and December 31, 2010, these contracts are included in Prepaid expenses and other on the Condensed Consolidated Balance Sheets, valued at $0.2 million and $0.3 million, respectively. For the three and nine months ended September 30, 2011, we recorded $0.06 million and $0.7 million, respectively, in gains related to these contracts which are included in Cost of operations on the Condensed Consolidated Statement of Operations. For the three and nine months ended September 30, 2010, we recorded $0.01 million in realized losses and $0.2 million in realized gains, respectively, related to these contracts which are included in Cost of operations on the Condensed Consolidated Statement of Operations.
		In 2010 and 2011, we entered into forward contracts to purchase Singapore dollars to hedge certain purchase commitments related to the construction of the Global 1200 and 1201 in Singapore dollars. In 2011, we entered into additional forward contracts to purchase 7.5 million Singapore dollars to hedge a portion of our operating expenses in the Asia Pacific region. We have not elected hedge treatment for these contracts. Consequently, changes in the fair value of these instruments are recorded in Other income (expense), net on the Condensed Consolidated Statement of Operations. For the three and nine months ended September 30, 2011, we recorded losses of $0.2 million and $0.6 million, respectively, related to these contracts. For the three and nine months ended September 30, 2010, we recorded $0.5 million in gains and $0.1 million in losses, respectively, related to these contracts. Although these contracts are in a loss position valued at $0.1 million as of September 30, 2011, they are netted against the Norwegian kroner contracts discussed above, which are in a gain position, and included in Prepaid expenses and other on the Condensed Consolidated Balance Sheets. As of December 31, 2010, these contracts are included in Prepaid expenses and other on the Condensed Consolidated Balance Sheets valued at $0.5 million.
		See Note 6 for more information regarding the fair value calculation of our outstanding derivative instruments.
6.		Fair Value Measurements
		Fair value is defined in accounting guidance as the price that would be received to sell an asset or paid to transfer a liability (i.e. exit price) in an orderly transaction between market participants at the measurement date. This

guidance establishes a hierarchy for inputs used in measuring fair value that maximizes the use of observable inputs and minimizes the use of unobservable inputs by requiring that the most observable inputs be used when available. The hierarchy for inputs is categorized into three levels based on the reliability of inputs as follows:

	Level 1—		Observable inputs such as quoted prices in active markets.
	Level 2—		Inputs (other than quoted prices in active markets) that are either directly or indirectly observable.
	Level 3—		Unobservable inputs which requires management’s best estimate of what market participants would use in pricing the asset or liability.

		Our financial instruments include cash and short-term investments, investments in marketable securities, accounts receivable, accounts payable, debt, and forward foreign currency contracts. Except as described below, the estimated fair value of such financial instruments at September 30, 2011 and December 31, 2010 approximates their carrying value as reflected in our Condensed Consolidated Balance Sheets.
		Our debt consists of our United States Government Ship Financing Title XI bonds and our Senior Convertible Debentures due 2027 (the “Senior Convertible Debentures”). The fair value of the bonds, based on current market conditions and net present value calculations, as of September 30, 2011 and December 31, 2010, was approximately $71.1 million and $71.5 million, respectively. The fair value of the Senior Convertible Debentures, based on quoted market prices, as of September 30, 2011 and December 31, 2010 was $316.9 million and $232.5 million, respectively.
		Assets measured at fair value on a recurring basis are categorized in the tables below based upon the lowest level of significant input to the valuations.

Fair Value Measurements at September 30, 2011
(In thousands)

Description		Total				Level 1				Level 2				Level 3
Cash equivalents		$	109,599			$	109,599			$	—			$	—
Marketable securities			31,365				31,365				—				—
Derivative contracts			84				—				84				—
Total		$	141,048			$	140,964			$	84			$	—

Fair Value Measurements at December 31, 2010
(In thousands)

Description		Total				Level 1				Level 2				Level 3
Cash equivalents		$	179,887			$	179,887			$	—			$	—
Derivative contracts			804				—				804				—
Total		$	180,691			$	179,887			$	804			$	—

		Financial instruments classified as Level 2 in the fair value hierarchy represent our forward foreign currency contracts. These contracts are valued using the market approach which uses prices and other information generated by market transactions involving identical or comparable assets or liabilities.
		Financial instruments classified as Level 3 in the fair value hierarchy represent our previous investment in auction rate securities and the related put option with UBS in which management used at least one significant unobservable input in the valuation model. We settled our remaining auction rate securities in the third quarter of 2010. Due to the lack of observable market quotes on our auction rate securities portfolio, we utilized a valuation model that relied on Level 3 inputs including market, tax status, credit quality, duration, recent market observations and overall capital market liquidity. The valuation of our auction rate securities was subject to uncertainties that were difficult to predict. Factors that may have impacted our valuation included changes to credit ratings of the securities as well as to the underlying assets supporting those securities, rates of default of the underlying assets, underlying collateral value, discount rates, counterparty risk and ongoing strength and quality of market credit and liquidity.

The following table presents a reconciliation of activity for such securities:

Changes in Level 3 Financial Instruments
(In thousands)

		Three Months Ended								Nine Months Ended
		September 30								September 30
		2011				2010				2011				2010
Balance at beginning of period		$	—			$	750			$	—			$	41,847
Sales			—				(750	)			—				(41,414	)
Total gains or (losses):
Realized losses included in other income (expense), net			—				—				—				(561	)
Changes in net unrealized gain (losses) included in other comprehensive income			—				—				—				128
Balance at end of period		$	—			$	—			$	—			$	—

7.		Receivables
		Our receivables are presented in the following balance sheet accounts: (1) Accounts receivable, (2) Accounts receivable — long term, (3) Unbilled work on uncompleted contracts, and (4) Contract costs incurred not yet recognized. Accounts receivable are stated at net realizable value, and the allowances for uncollectible accounts were $1.2 million and $2.8 million at September 30, 2011 and December 31, 2010, respectively. Accounts receivable at September 30, 2011 and December 31, 2010 included $0.6 million and $0.6 million, respectively, of retainage, which represents the short-term portion of amounts not immediately collectible due to contractually specified requirements. Accounts receivable — long term at September 30, 2011 and December 31, 2010 represented amounts related to retainage that were not expected to be collected within the next twelve months.
		Receivables also included claims and unapproved change orders of $15.0 million at September 30, 2011 and $16.7 million at December 31, 2010. These claims and change orders are amounts due for extra work and/or changes in the scope of work on certain projects.
		The costs and estimated earnings on uncompleted contracts are presented in the following table:

		September 30				December 31
		2011				2010
		(In thousands)
Costs incurred and recognized on uncompleted contracts		$	82,888			$	309,725
Estimated earnings (loss)			(5,363	)			38,871
Costs and estimated earnings on uncompleted contracts			77,525				348,596
Less: Billings to date			(42,736	)			(299,932	)
			34,789				48,664
Plus: Accrued revenue(1)			9,663				7,488
Less: Advance billing on uncompleted contracts			(5,739	)			(221	)
		$	38,713			$	55,931
Included in accompanying balance sheets under the following captions:
Unbilled work on uncompleted contracts		$	44,452			$	56,152
Other accrued liabilities			(5,739	)			(221	)
		$	38,713			$	55,931

8.		Asset Disposal and Impairments and Assets Held for Sale
		Due to escalating costs for dry-docking services, escalating repair and maintenance costs for aging vessels, increasing difficulty in obtaining certain replacement parts, declining marketability of certain vessels, and our strategic shift to deepwater vessels, we decided to forego dry-docking or refurbishment of certain vessels and to sell or permanently retire them from service. Consequently, we recognized gains and losses on the disposition of certain vessels, and non-cash impairment charges on the retirement of other vessels. Each asset was analyzed using an undiscounted cash flow analysis and valued at the lower of carrying value or net realizable value.
		Net Gains and (Losses) on Asset Disposal consisted of the following:

		Three Months Ended								Nine Months Ended
		September 30								September 30
Segment		2011				2010				2011				2010
		(In thousands)
Construction and Installation		$	—			$	12,183			$	12,852	(1)		$	12,312
Other Offshore Services			28				11,636				(220	)			11,653
Corporate			—				—				(112	)			—
Total		$	28			$	23,819			$	12,520			$	23,965

Losses on Asset Impairments consisted of the following:

						Three Months Ended								Nine Months Ended
						September 30								September 30
Segment		Description of Asset				2011				2010				2011				2010
						(In thousands)
Construction and Installation		One OSV and other equipment in 2011 & 2010				$	—			$	—			$	5,467			$	9,127
Other Offshore Services		Two DSVs and other equipment					—				548				—				2,355
Total						$	—			$	548			$	5,467			$	11,482

Assets Held for Sale consisted of the following:

						September 30								December 31
Segment		Description of Asset				2011				Description of Asset				2010
						(In thousands)								(In thousands)
Construction and Installation		One OSV and other equipment				$	1,510			One DLB, one OSV and other equipment				$	14,469
Corporate		None					—			Airplane					2,250
Total						$	1,510							$	16,719

In accordance with accounting guidance, long-lived assets held for sale are carried at the lower of the asset’s carrying value or net realizable value and depreciation ceases.

9.		Property and Equipment
		The components of property and equipment, at cost, and the related accumulated depreciation are as follows:

		September 30				December 31
		2011				2010
		(In thousands)
Land		$	6,322			$	6,322
Facilities and equipment			238,361				153,695
Marine vessels			448,947				285,113
Construction in progress			315,090				531,765
Total property and equipment			1,008,720				976,895
Less: Accumulated depreciation			(183,183	)			(192,176	)
Property and equipment, net		$	825,537			$	784,719

		Expenditures for property and equipment and items that substantially increase the useful lives of existing assets are capitalized at cost and depreciated. Routine expenditures for repairs and maintenance are expensed as incurred. We capitalized $4.2 million and $4.5 million of interest costs for the three months ended September 30, 2011 and 2010, respectively. We capitalized $12.6 million and $13.4 million of interest costs for the nine months ended September 30, 2011 and 2010, respectively. Except for major construction vessels that are depreciated on the units-of-production (“UOP”) method over estimated vessel operating days, depreciation is provided utilizing the straight-line method over the estimated useful lives of the assets. The UOP method is based on vessel utilization days and more closely correlates depreciation expense to vessel revenue. In addition, the UOP method provides for a minimum depreciation floor in periods with nominal vessel use. In general, if we applied only a straight-line depreciation method instead of the UOP method, less depreciation expense would be recorded in periods of high utilization and revenues, and more depreciation expense would be recorded in periods of low vessel utilization and revenues.
10.		Deferred Dry-Docking Costs
		We utilize the deferral method to capitalize vessel dry-docking costs and to amortize the costs to the next dry-docking. Such capitalized costs include regulatory required steel replacement, direct costs for vessel mobilization and demobilization, and rental of dry-docking facilities and services. Crew costs may also be capitalized when employees perform all or a part of the required dry-docking. Any repair and maintenance costs incurred during the dry-docking period are expensed.
		The table below presents dry-docking costs incurred and amortization for all periods presented:

		Three Months Ended								Nine Months Ended
		September 30								September 30
		2011				2010				2011				2010
		(In thousands)								(In thousands)
Net book value at beginning of period		$	16,766			$	34,123			$	13,609			$	41,825
Additions for the period			1,894				—				9,592				2,169
Reclassifications to assets held for sale			—				(8,090	)			—				(9,761	)
Reductions related to the sale of investment in subsidiaries			(837	)			—				(837	)			—
Amortization expense for the period			(2,076	)			(3,966	)			(6,617	)			(12,166	)
Net book value at end of period		$	15,747			$	22,067			$	15,747			$	22,067

The book value of our deferred dry-docking costs as of September 30, 2011 and December 31, 2010 are included in Deferred charges, net on the Condensed Consolidated Balance Sheets.

11. Long-Term Debt

The components of long-term debt are as follows:

		September 30				December 31
		2011				2010
		(In thousands)
Senior Convertible Debentures due 2027, 2.75%
Principal amount of debt component		$	325,000			$	325,000
Less: Unamortized debt discount			(71,849	)			(79,055	)
Carrying amount of debt component			253,151				245,945
Title XI Bonds due 2025, 7.71%			53,460				57,420
Total long-term debt			306,611				303,365
Less: Current maturities			3,960				3,960
Long-term debt less current maturities		$	302,651			$	299,405

		Senior Convertible Debentures
		Our Senior Convertible Debentures were separated into debt and equity components when they were issued and a value was assigned to each. The value assigned to the debt component is the estimated fair value of similar debentures without the conversion feature. The difference between the debenture cash proceeds and this estimated fair value was recorded as debt discount and is being amortized to interest expense over the 10-year period ending August 1, 2017. This is the earliest date that holders of the Senior Convertible Debentures may require us to repurchase all or part of their Senior Convertible Debentures for cash.
		The Senior Convertible Debentures are convertible into cash, and if applicable, into shares of Common Stock, or under certain circumstances and at our election, solely into Common Stock, based on a conversion rate of 28.1821 shares per $1,000 principal amount of Senior Convertible Debentures, which represents an initial conversion price of $35.48 per share. As of September 30, 2011 and December 31, 2010, the Senior Convertible Debentures’ if-converted value does not exceed the Senior Convertible Debentures’ principal of $325 million.
		The equity component of our Senior Convertible Debentures is comprised of the following:

		September 30				December 31
		2011				2010
		(In thousands)
Debt discount on issuance		$	107,261			$	107,261
Less: Issuance costs			2,249				2,249
Deferred income tax			36,772				36,772
Carrying amount of equity component		$	68,240			$	68,240

The interest expense for our Senior Convertible Debentures is comprised of the following:

		Three Months Ended								Nine Months Ended
		September 30								September 30
		2011				2010				2011				2010
		(In thousands)								(In thousands)
Contractual interest coupon, 2.75%		$	2,235			$	2,235			$	6,703			$	6,703
Amortization of debt discount			2,451				2,277				7,205				6,694
Total Debentures interest expense		$	4,686			$	4,512			$	13,908			$	13,397
Effective interest rate			7.5	%			7.5	%			7.5	%			7.5	%

At the effective time of the Merger, our Senior Convertible Debentures shall remain outstanding and be treated in accordance with their terms. The Merger will constitute a “fundamental change” as such term is defined in the indenture governing the Senior Convertible Debentures, and the holders of the Senior Convertible Debentures will have the rights related to a “fundamental change” under the indenture.

		Title XI Bonds
		We have agreed to use our reasonable best efforts to obtain, and to deliver to Technip, copies of any required consent, waiver or approval of the Maritime Administration of the United States Department of Transportation required in connection with the consummation of the transactions contemplated by the Merger Agreement under and in respect of our United States Government Guaranteed Export Ship Financing Obligations, 2000 Series to ensure that no default or event of default occurs thereunder on terms reasonably satisfactory to Technip. We submitted to the Maritime Administration our request for such consent on September 20, 2011.
		Revolving Credit Facility
		Our Revolving Credit Facility, which matures on October 18, 2012, provides a borrowing capacity of up to $150.0 million. As of September 30, 2011, we had no borrowings against the facility and $14.9 million of letters of credit outstanding thereunder. Due to the sale of vessels mortgaged under the Revolving Credit Facility, our effective maximum borrowing capacity was $134.1 million as of September 30, 2011, with credit availability of $119.2 million.
		On February 24, 2011, we amended our Revolving Credit Facility. The amendment 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 permitted. We did not meet the financial covenants of the Revolving Credit Facility as of September 30, 2011. Consequently, we have cash collateralized our outstanding letters of credit in order to achieve compliance and are currently unable to borrow under the Revolving Credit Facility.
		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.
		We also have a $6.0 million short-term credit facility at one of our foreign locations. At September 30, 2011, we had $0.1 million of letters of credit outstanding and $5.9 million of credit availability under this particular credit facility.
		At the request of Technip, we have agreed to reasonably cooperate with Technip in good faith in connection with negotiating and consummating any financing that Technip or any of its affiliates may desire to enter into in order to finance or refinance payment of amounts owed pursuant to the Merger, the other transactions contemplated by the Merger Agreement and/or to refinance our or our subsidiaries’ existing debt; provided, however, that we shall not be required to produce any financial statements outside the ordinary course of business. In addition, at the request of Technip, we shall cooperate with Technip in discussions with lenders under our Revolving Credit Facility to terminate as of the effective time of the Merger the Revolving Credit Facility or to seek amendments or waivers thereunder; provided, however, that prior to the effective time of the Merger we shall not be required to pay any fees that are payable in connection with any such amendments of waivers.

12.		Commitments and Contingencies
		Commitments
		Construction and Purchases in Progress — The estimated cost to complete capital expenditure projects in progress at September 30, 2011 was approximately $77.3 million, of which $47.4 million is obligated through contractual commitments. The total estimated cost primarily represents expenditures for construction of the Global 1201, our second new generation derrick/pipelay vessel. This amount includes aggregate commitments of 18.6 million Singapore dollars (or $14.3 million as of September 30, 2011) and 1.2 million Euros (or $1.7 million as of September 30, 2011). We have entered into forward contracts to purchase 7.5 million Singapore dollars to hedge certain of these purchase commitments. (See Note 5 for additional information related to our forward foreign currency contracts.)
		Off Balance Sheet Arrangements — In the normal course of our business activities, and pursuant to agreements or upon obtaining such agreements to perform construction services, we provide guarantees, performance, bid, and payment bonds, and letters of credit to customers, vendors, and other parties. At September 30, 2011, the aggregate amount of these outstanding bonds was $32.4 million, which are scheduled to expire between October 2011 and July

		2012, and the aggregate amount of these outstanding letters of credit was $14.9 million, which are due to expire between October 2011 and March 2013.
		Contingencies
		During the fourth quarter of 2007, we received a payroll tax assessment for the years 2005 through 2007 from the Nigerian Revenue Department valued at $17.6 million based on the exchange rate of the Nigerian naira as of September 30, 2011. The assessment alleges that certain expatriate employees, working on projects in Nigeria, were subject to personal income taxes, which were not paid to the government. We filed a formal objection to the assessment on November 12, 2007. We do not believe these employees are subject to the personal income tax assessed; however, based on past practices of the Nigerian Revenue Department, we believe this matter will ultimately have to be resolved by litigation. We do not expect the ultimate resolution to have a material adverse effect on our future financial position, operating results, or cash flows.
		During 2008, we received an additional assessment from the Nigerian Revenue Department valued at $36.1 million based on the exchange rate for the Nigerian naira as of September 30, 2011 for tax withholding related to third party service providers. The assessment alleges that taxes were not withheld from third party service providers for the years 2002 through 2006 and remitted to the Nigerian government. We have filed an objection to the assessment. We do not expect the ultimate resolution to have a material adverse effect on our future financial position, operating results, or cash flows.
		During the third quarter of 2009, we received a tax assessment from the Mexican Revenue Department in the amount of $5.9 million related to the 2003 tax year. The assessment alleges that chartered vessels should be treated as equipment leases and subject to tax at a rate of 10%. We have engaged outside counsel to assist us in this matter and have filed an appeal in the Mexican court system. We await disposition of that appeal. We do not expect the ultimate resolution to have a material adverse effect on our future financial position, operating results, or cash flows; however, if the Mexican Revenue Department prevails in its assessment, we could be exposed to similar liabilities for each of the tax years beginning with 2004 through the current year.
		We have one unresolved issue related to an Algerian tax assessment received by us on February 21, 2007. The remaining amount in dispute is approximately $10.4 million of alleged value added tax for the years 2004 and 2005. We are contractually indemnified by our client for the full amount of the assessment that remains in dispute. We have engaged outside tax counsel to assist us in resolving the tax assessment.
		During the first quarter of 2011, we received corporate tax demands from the Indian Revenue Department related to tax years 2005 through 2009 in the aggregate amount of $4.5 million (net of taxes paid). The assessments allege that taxable income was understated because certain tax provisions available to the marine construction industry were not applicable. We have engaged outside tax counsel to assist us with the tax demands and have filed objections to the assessments. We do not expect the ultimate resolution to have a material adverse affect on our future financial position, operating results, or cash flows.
		During the first quarter of 2011, we also received tax demands for tax withholding on foreign vendors from the Indian Revenue Department in the aggregate amount of $4.4 million (net of taxes paid) related to tax years 2007 through 2009. The assessments allege that taxes were not paid at the proper rate of tax and additional tax is due. We have engaged outside tax counsel to assist us with the tax demands and have filed objections to the assessments. We do not expect the ultimate resolution to have a material adverse affect on our future financial position, operating results, or cash flows.
		Investigations and Litigation
		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 condition.
		Litigation Related to the Merger
		Shortly after the announcement of the Merger, several putative class action lawsuits challenging the Merger were filed in the District Courts of Harris County, Texas, the District Court in the Parish of Calcasieu, Louisiana, and the United States District Court for the Southern District of Texas against various combinations of Global, Technip,

		Apollon, and the individual members of our board of directors. The complaints filed in those lawsuits generally allege, among other things, that the members of our board of directors breached their fiduciary duties owed to our public shareholders and Global by entering into the Merger Agreement, approving the Merger, failing to take steps to maximize our value to our public shareholders, ignoring alleged conflicts of interest, and issuing a preliminary proxy statement that omitted material information, and that Global and Technip aided and abetted such breaches of fiduciary duties. In addition, the complaints allege that the Merger improperly favors Technip and that certain provisions of the Merger Agreement unduly restrict our ability to negotiate with other potential bidders. The complaints generally seek, among other things, declaratory and injunctive relief concerning the alleged fiduciary breaches, injunctive relief prohibiting the defendants from consummating the Merger and other forms of equitable relief.
		On October 27, 2011, the parties to all of these actions entered into a memorandum of understanding setting forth the terms and conditions of an agreement in principle to resolve all of the claims relating to the merger in exchange for the inclusion of certain supplemental disclosures in the definitive proxy statement which was filed by Global on October 28, 2011. The memorandum of understanding provides, among other things, that the parties will execute and submit to the District Court of Harris County, Texas for review and approval a stipulation of settlement, that the actions will be dismissed with prejudice on the merits, that defendants will receive a general release from any and all claims relating to, among other things, the Merger, the Merger Agreement and any disclosures made in connection therewith, and that the settlement is conditioned on, among other things, consummation of the Merger, completion of certain confirmatory discovery, class certification and final approval by the District Court of Harris County, Texas following notice to the shareholders of Global Industries. In connection with the settlement, Global Industries or its successor-in-interest has agreed to pay, subject to court approval, an award of fees and expenses to plaintiffs’ counsel in an amount of $837,500.

13.		Comprehensive Income
		Other Comprehensive Income — The differences between net income (loss) and comprehensive income (loss) for each of the comparable periods presented are as follows:

		Three Months Ended								Nine Months Ended
		September 30								September 30
		2011				2010				2011				2010
		(In thousands)
Net income (loss)		$	4,472			$	(27,719	)		$	(55,932	)		$	(47,671	)
Unrealized net gain (loss) on derivatives			(55	)			883				(150	)			(531	)
Unrealized net gain (loss) on marketable securities			(37	)			—				(23	)			—
Reclassification of loss on auction rate securities			—				—				—				83
Reclassification of cumulative foreign currency translation adjustment due to sale of investment in subsidiaries			697				—				697				—
Deferred tax benefit (expense)			31				(309	)			60				186
Comprehensive income (loss)			5,108				(27,145	)			(55,348	)			(47,933	)
Less: Comprehensive income attributable to noncontrolling interest			—				139				714				139
Comprehensive income (loss) attributable to Global Industries, Ltd.		$	5,108			$	(27,284	)		$	(56,062	)		$	(48,072	)

Accumulated Other Comprehensive Income (Loss) — A roll-forward of the amounts included in accumulated other comprehensive income (loss), net of taxes, is shown below.

		Cumulative
		Foreign				Forward								Accumulated
		Currency				Foreign								Other
		Translation				Currency				Marketable				Comprehensive
		Adjustment				Contracts				Securities				Income (Loss)
		(In thousands)
Balance at December 31, 2010		$	(8,978	)		$	208			$	—			$	(8,770	)
Change in value			—				(826	)			(15	)			(841	)
Reclassification to earnings			—				728				—				728
Reclassification due to sale of investment in subsidiaries			697				—				—				697
Balance at September 30, 2011		$	(8,281	)		$	110			$	(15	)		$	(8,186	)

The amount of cumulative foreign currency translation adjustment included in accumulated other comprehensive income (loss) relates to prior translations of subsidiaries whose functional currency was not the U.S. dollar. The amount of gain (loss) on forward foreign currency contracts included in accumulated other comprehensive income

(loss) hedges our exposure to changes in Norwegian kroners for commitments of a long-term vessel charter. The amount of gain (loss) on marketable securities included in accumulated other comprehensive income (loss) relates to the difference in the fair value and the amortized cost of the investments.

14.		Stock-Based Compensation
		We recognize the cost of employee services received in exchange for awards of equity instruments based on the grant date fair value of those awards. The table below sets forth the total amount of stock-based compensation expense for the three and nine months ended September 30, 2011 and 2010.

		Three Months Ended								Nine Months Ended
		September 30								September 30
		2011				2010				2011				2010
		(In thousands)
Stock-based compensation expense
Stock options		$	64			$	198			$	329			$	423
Time-based restricted stock			831				1,012				2,390				5,355
Performance shares and units			508				(34	)			1,230				881
Total stock-based compensation expense		$	1,403			$	1,176			$	3,949			$	6,659