1131227--3/1/2010--HORNBECK_OFFSHORE_SERVICES_INC

related topics

{gas, price, oil}

{cost, regulation, environmental}

{cost, contract, operation}

{debt, indebtedness, cash}

{personnel, key, retain}

{stock, price, share}

{competitive, industry, competition}

{operation, international, foreign}

{condition, economic, financial}

{loss, insurance, financial}

{interest, director, officer}

{acquisition, growth, future}

{provision, law, control}

{customer, product, revenue}

Demand for our OSV services substantially depends on the level of activity in offshore oil and gas exploration, development and production. We expect levels of oil and gas exploration, development and production activity to continue to be volatile and affect the demand for our Upstream and Downstream services. Increases in the supply of vessels could decrease dayrates. Intense competition in our industry could reduce our profitability and market share. The failure to successfully complete construction or conversion of our vessels or repairs, maintenance and routine drydockings on schedule and on budget and to utilize such vessels and the other vessels in our fleet at profitable levels could adversely affect our financial condition and results of operations. We have grown, and may continue to grow, through acquisitions that give rise to risks and challenges that could adversely affect our future financial results. Revenues from our Downstream business could be further adversely affected by a decline in demand for domestic refined petroleum products and crude oil or a change in existing methods of delivery in response to insufficient availability of Downstream services and other conditions. The early termination of contracts on our vessels could have an adverse effect on our operations. We are subject to complex laws and regulations, including environmental regulations that can adversely affect the cost, manner or feasibility of doing business. Our business involves many operating risks that may disrupt our business or otherwise result in substantial losses, and insurance may be unavailable or inadequate to protect us against these risks. Our expansion of operations into international markets and shipyard activities in foreign shipyards subjects us to risks inherent in conducting business internationally. We may lose the right to operate in some international markets in which we have a presence. Future results of operations depend on the long-term financial stability of our customers. We may be unable to attract and retain qualified, skilled employees necessary to operate our business. Our employees are covered by federal laws that may subject us to job-related claims in addition to those provided by state laws. Our success depends on key members of our management, the loss of whom could disrupt our business operations. Restrictions contained in the indentures governing our 6.125% senior notes due 2014 and our 8.000% senior notes due 2017 and in the agreement governing our revolving credit facility may limit our ability to obtain additional financing and to pursue other business opportunities. We have high levels of fixed costs that will be incurred regardless of our level of business activity. Our revenues and operating results may vary significantly from quarter to quarter due to a number of factors such as volatility in our vessel dayrates, changes in utilization, vessel incidents and other unforeseen matters. Many of these factors that may cause our actual financial results to vary from our publicly disclosed earnings guidance and forecasts are outside of our control. We are susceptible to unexpected increases in operating expenses such as materials and supplies, crew wages, maintenance and repairs, and insurance costs. We may not have the ability to raise the funds necessary to settle conversion of our 1.625% convertible senior notes or to purchase such notes upon a fundamental change or on other purchase dates as defined in the agreement, and our future debt may contain limitations on our ability to pay cash upon conversion or repurchase of shares. The convertible note hedge and warrant transactions may affect the value of our common stock. The fundamental change purchase feature of our 1.625% convertible senior notes and provisions of our certificate of incorporation, bylaws, stockholder rights plan and Delaware law may delay or prevent an otherwise beneficial takeover attempt of our company. Conversion of the 1.625% convertible senior notes or exercise of the warrants issued in the warrant transactions may dilute the ownership interest of existing stockholders. We may be adversely affected by uncertainty in the global financial markets. We may be unable to collect amounts owed to us by our customers.

Full 10-K form ▸

1131227--3/1/2010--HORNBECK_OFFSHORE_SERVICES_INC_/LA