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For the quarterly period ended September 30, 2004

(Exact name of registrant as specified in its charter)

(337) 583-5000
(Registrant's telephone number, including area code)

(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. þ YES o NO

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

APPLICABLE ONLY TO CORPORATE ISSUERS:

The number of shares of the Registrant's Common Stock outstanding, as of November 3, 2004 was 111,676,852.

REPORT OF INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM

To the Board of Directors and Stockholders of
Global Industries, Ltd.

We have reviewed the accompanying condensed consolidated balance sheet of Global Industries, Ltd. and subsidiaries as of September 30, 2004, and the related condensed consolidated statements of operations for the three-month and nine-month periods ended September 30, 2004 and 2003, and of cash flows for the nine-month periods ended September 30, 2004 and 2003. These interim financial statements are the responsibility of the Corporation's management.

We conducted our reviews in accordance with standards of the Public Company Accounting Oversight Board (United States). A review of interim financial information consists principally of applying analytical procedures and making inquiries of persons responsible for financial and accounting matters. It is substantially less in scope than an audit conducted in accordance with standards of the Public Company Accounting Oversight Board (United States), the objective of which is the expression of an opinion regarding the financial statements taken as a whole. Accordingly, we do not express such an opinion.

Based on our reviews, we are not aware of any material modifications that should be made to such condensed consolidated interim financial statements for them to be in conformity with accounting principles generally accepted in the United States of America.

We have previously audited, in accordance with standards of the Public Company Accounting Oversight Board (United States), the consolidated balance sheet of Global Industries, Ltd. and subsidiaries as of December 31, 2003, and the related consolidated statements of operations, stockholders' equity, and cash flows for the year then ended (not presented herein); and in our report dated March 9, 2004, we expressed an unqualified opinion on those consolidated financial statements. In our opinion, the information set forth in the accompanying condensed consolidated balance sheet as of December 31, 2003 is fairly stated, in all material respects, in relation to the consolidated balance sheet from which it has been derived.

DELOITTE & TOUCHE LLP

November 8, 2004
Houston, Texas

Global Industries, Ltd. CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS (In thousands, except per share data) (Unaudited)
			Quarter Ended						Nine Months Ended
			September 30						September  30
Results of Operations			2004			2003			2004			2003
Revenues		$	130,389		$	114,268		$	292,116		$	401,168
Cost of operations			113,169			117,099			270,914			384,113
Gross profit (loss)			17,220			(2,831)			21,202			17,055
Net gains on asset disposal			(18,188)			(5,430)			(18,135)			(6,829)
Selling, general and administrative expenses			8,804			9,087			28,498			28,126
Operating income (loss)			26,604			(6,488)			10,839			(4,242)
Other expense (income)
Interest expense			3,069			2,506			9,028			7,826
Other			307			(638)			1,926			63
Income (loss) from continuing operations,
before income taxes			23,228			(8,356)			(115)			(12,131)
Income taxes (benefit)			5,202			5,377			(1,222)			4,045
Income (loss) from continuing operations,
net of taxes			18,026			(13,733)			1,107			(16,176)
Income (loss) from discontinued operations,
net of taxes			854			1,084			(197)			3,218
Net income (loss)		$	18,880		$	(12,649)	$		910		$	(12,958)
Basic Earnings Per Common Share:
Earnings (loss) from continuing operations		$	0.16		$	(0.14)		$	0.01		$	(0.16)
Earnings (loss) from discontinued operations			0.01			0.01			(0.00)			0.03
Basic earnings (loss) per share		$	0.17		$	(0.13)		$	0.01		$	(0.13)
Diluted Earnings Per Common Share:
Earnings (loss) from continuing operations		$	0.16		$	(0.14)		$	0.01		$	(0.16)
Earnings (loss) from discontinued operations			0.01			0.01			(0.00)			0.03
Diluted earnings (loss) per share		$	0.17		$	(0.13)		$	0.01		$	(0.13)
Weighted Average Common Shares
Outstanding:
Basic		111,031,000			100,791,000			107,892,000			100,695,000
Diluted		111,897,000			100,791,000			108,180,000			100,695,000

1. Basis of Presentation - The accompanying unaudited condensed consolidated financial statements include the accounts of Global Industries, Ltd. and its subsidiaries (the "Company," "we," "us," or "our").

In the opinion of management of the Company, all adjustments (such adjustments consisting only of a normal 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, 2004, are not necessarily indicative of the results that may be expected for the year ending December 31, 2004. 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, 2003.

Independent registered public accountants as stated in their report included herein have reviewed the financial statements required by Rule 10-01 of Regulation S-X.

Certain reclassifications have been made to the prior period financial statements in order to conform to the classifications adopted for reporting in 2004.

Stock-Based Compensation - The Company continues to apply Accounting Principles Board Opinion No. 25, "Accounting for Stock Issued to Employees," and related interpretations in accounting for its restricted stock awards and shares subject to options as allowed under SFAS No. 123, "Accounting for Stock-Based Compensation." Additionally, under APB 25, our employee stock purchase plan is considered noncompensatory and accordingly, no compensation cost has been recognized in the financial statements. Therefore, the Company has elected to make pro forma disclosures versus recognizing the related compensation expense in the accompanying consolidated financial statements. Had the Company elected to apply the accounting standards of SFAS No. 123, the Company's net income and earnings per share would have approximated the pro forma amounts indicated below (in thousands, except per share data):

			Three Months Ended						Nine Months Ended
			September 30						September  30
			2004			2003			2004			2003
Net income (loss) as required			18,880			(12,649)			910			(12,958)
Add: Recognized stock
compensation expense			230			209			461			(529
Deduct: FAS 123 pro forma stock
compensation expense			(387)			(1,231)			(2,794)			(3,573)
Pro forma net income (loss)		$	18,723		$	(13,671)	$		(1,423)		$	(16,002)
Basic Earnings Per Common Share:
Basic as reported		$	0.17		$	(0.13)		$	0.01		$	(0.13)
Basic pro forma			0.17			(0.14)			(0.01)			(0.16)
Diluted as reported			0.17			(0.13)			0.01			(0.13)
Diluted pro forma			0.17			(0.14)			(0.01)			(0.16)

 

2. Contracts in Progress and Revenue Recognition - Revenues from construction contracts, which are typically of short duration, are recognized on the percentage-of-completion method, measured by relating the actual cost of work performed to date to the current estimated total cost (the cost-to-cost method) of the respective contract. Contract costs include all direct material and labor costs and those indirect costs related to contract performance such as indirect vessel costs (including depreciation and amortization), labor, supplies, and repairs. During the early stages of a contract, certain costs may be excluded from the cost-to-cost method of measuring progress, such as significant costs for materials and major third party subcontractors, if it appears that such an exclusion would result in a more meaningful measurement of actual contract progress and resulting periodic allocation of income. Provisions for estimated losses, if any, on uncompleted contracts are made in the peri od in which such losses are determined. Selling, general, and administrative costs are charged to expense as incurred.

 

3. Accounts Receivable - Trade and other receivables are stated at net realizable value and the allowance for uncollectible accounts was $8.2 million and $11.0 million at September 30, 2004 and December 31, 2003, respectively. Certain receivables represent amounts that have not yet been billed to the customer pursuant to contractually specified milestone billing requirements. At September 30, 2004 and December 31, 2003, our accounts receivable included unbilled receivables on completed contracts of $18.8 million and $22.8 million, respectively. We include claims and unapproved change orders in contract revenues to the extent of costs incurred 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. The basis for our recorded unapproved change orders and claims was formed after we engaged in a n extensive contract review, a review of the supporting evidence and generally, obtained a legal opinion from either internal or external legal counsel. Additionally, we believe that we have objective, verifiable evidence to support these claims. That evidence consists of explicit contractual terms and/or written legal opinions. The claims and unapproved change orders, included in accounts receivable and unbilled receivables, amounted to $16.8 million at September 30, 2004 and $36.3 million at December 31, 2003. Unbilled retainage at September 30, 2004 was $5.1 million and is expected to be billed in 2004. Unbilled retainage at December 31, 2003 was $7.8 million.

Costs and Estimated Earnings on Uncompleted Contracts:

			September 30,			December 31,
			2004			2003
		(In thousands)
Costs incurred on uncompleted contracts	$		135,612		$	18,929
Estimated earnings (losses)				25,412		(1,933)
			161,024			16,996
Less: Billings to date			101,376			7,410
	$		59,648		$	9,586
Included in accompanying balance sheets under the
following captions:
Unbilled work on uncompleted contracts	$		60,023		$	10,706
Advance billings on uncompleted contracts			(375)			(1,120)
Unbilled revenues	$		59,648		$	9,586

4. Goodwill - Goodwill represents the excess cost over the fair value of net assets acquired. The carrying amount of goodwill as of September 30, 2004 and December 31, 2003 remained at approximately $37.7 million and is primarily attributable to our Latin America segment. We completed the required annual impairment test, in accordance with Statement of Financial Accounting Standards ("SFAS") No. 142, "Goodwill and Other Intangible Assets," at the beginning of 2004 and determined that our goodwill was not impaired.

 

5. Property and Equipment-Property and equipment are stated at cost. 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. Except for construction barges that are depreciated on the units-of-production (UOP) method over estimated barge 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 years with nominal vessel use. If we applied only a straight-line depreciation method, less depreciation expense would be recorded in periods of high vessel utilization and revenues and more depreciation expense would be recorded in periods of low vessel utilization and revenues.

 

6. Income Taxes - Our effective tax rate for the quarter ended September 30, 2004 includes the following items: the reversal of a $4.6 million capital loss valuation allowance due to capital gains generated by asset sales; a $10.8 million adverse judgment in our West Africa segment (See Note 13 of the Notes to Condensed Consolidated Financial Statements) which was not tax benefited; and losses in other foreign jurisdictions that were not tax benefited. Our expected effective tax rate for fiscal 2004 is 49%.

Our effective tax rate for the quarter ended September 30, 2003 includes the following items: a $4.6 million tax expense attributable to the establishment of a valuation allowance for a capital loss carry-forward and losses in other foreign jurisdictions that were not tax benefited.

 

7. Financing Arrangements - On March 9, 2004, we entered into a new $125.0 million revolving credit facility replacing the previous $100.0 million loan facility that would have matured in December 2004. On March 29, 2004, we exercised our option to increase our facility to $150.0 million. Under the terms of the facility the entire $150.0 million was available for the issuance of letters of credit and $110.0 million was available for direct cash advances. The facility matures on March 9, 2007. This revolving credit facility permits borrowings based on prime rate and London Interbank Offered Rate ("LIBOR"), in each case, plus a floating spread. The spreads can range from 1.50% to 3.00% and 2.50% to 4.00% for prime rate and LIBOR based borrowings, respectively, based upon certain of our financial ratios. In addition, the facility allows for certain fixed rate interest options on amounts outstanding. Common stock of our subsidiaries, certain real estate, and the majority of our vessels collateralize the loans under the facility. This facility is subject to certain financial covenants. We must maintain minimum levels of net worth and earnings before interest, taxes, and depreciation/amortization, not exceed the levels of debt and capital expenditures specified in the agreement, and comply with, among other things, an interest coverage ratio and a leverage ratio. These covenants may limit our capacity and financial flexibility. Unamortized credit facility fees of $0.5 million related to the termination of our previous credit facility were expensed in the first quarter of 2004. In consideration for this new facility, we paid a $3.8 million fee.

The following covenants under the facility were not met at the end of the second quarter of 2004: the minimum earnings before interest, taxes, and depreciation/amortization covenant; the leverage ratio covenant; the capital expenditures limitation covenant; and the interest coverage ratio covenant. As a result, effective June 30, 2004, we obtained a waiver for the quarter ended June 30, 2004 on any default due to our noncompliance with the financial covenants of our credit facility. No fee was paid in connection with this waiver.

On August 6, 2004, we amended and restated our credit facility due to: (1) anticipated non-compliance with the minimum earnings before interest, taxes, and depreciation/amortization covenant, and the interest coverage ratio covenant at the end of the third quarter of 2004, and (2) the addition of three new members to our bank group. The amendment reduced the requirements for both covenants, modified certain event of default requirements, and added additional reporting requirements. In addition, the facility was reduced to $100.0 million. Under the terms of the amended facility the entire $100.0 million is available for the issuance of letters of credit and direct cash advances. A fee of $0.6 million was paid for this amendment.

On November 2, 2004, we were notified by the International Arbitration Tribunal of an adverse judgment regarding a legal dispute with one of our customers related to offshore pipeline work performed in West Africa in 2003. As a result of this arbitration judgment, we must repay approximately $9.2 million to our customer and write-off a $1.6 million related accounts receivable balance. As a result of the adverse legal judgment, the minimum earnings before interest, taxes and depreciation/amortization covenant and the leverage ratio covenant under our amended and restated credit facility were not met at the end of the third quarter of 2004 resulting in an event of default under our revolving and long-term credit arrangements. On November 8, 2004, our credit facility was amended to provide, in the relevant definitions, an add back of the amount of the adverse legal judgment for purposes of calculating the above referenced ratios. As a result on November 8, 2004, we were in compliance with the covenants of our revolving and long-term credit arrangements. We paid a fee of approximately $0.2 million in connection with obtaining the amendment. As of November 8, 2004, we had no borrowings, $14.4 million of letters of credit outstanding and $85.6 million of credit availability under our revolving credit facility.

On March 29, 2004, we completed a secondary offering of 9.5 million shares of common stock, which raised $47.9 million in aggregate net proceeds. These proceeds were used to repay $47.9 million in outstanding indebtedness under our revolving credit facility.

We also have a $9.5 million short-term credit facility at one of our foreign locations that is secured by a letter of credit.

On September 24, 2004, we redeemed $6.5 million principal amount of our Title XI bonds, with a stated maturity date in 2022 and a stated interest rate of 7.25%, collateralized by two Liftboat Division vessels. We paid a redemption premium of $0.3 million related to this transaction. These bonds were redeemed early due to the anticipated closure of our Liftboat Division sale. The sales agreement stipulates that all Liftboat Division assets are to be sold unencumbered. (See Note 11 of the Notes to Condensed Consolidated Financial Statements for additional information).

Our Title XI bonds mature in 2020, 2022, and 2025. The bonds carry interest rates of 8.30%, 7.25%, and 7.71% per annum, respectively, and require aggregate semi-annual payments of $2.6 million, plus interest. The agreements pursuant to which the Title XI bonds were issued contain certain covenants, including the maintenance of minimum working capital and net worth requirements. If not met, additional covenants result that restrict our operations and our ability to pay cash dividends. At September 30, 2004, we were in compliance with these covenants.

 

8. Commitments and Contingencies - We are a party to legal proceedings and potential claims arising in the ordinary course of business. Management does not believe these matters will materially affect our consolidated financial statements.

In November 1999, we notified Groupe GTM (now Vinci) that as a result of material adverse changes and other breaches by Vinci, we were no longer bound by and were terminating the Share Purchase Agreement to purchase the shares of ETPM S.A. Vinci responded stating that they believed we were in breach. The Share Purchase Agreement provided for liquidated damages of $25.0 million to be paid by a party that failed to consummate the transaction under certain circumstances. We notified Vinci that we do not believe that the liquidated damages provision is applicable to our termination of the Share Purchase Agreement. On December 23, 1999, we filed suit against Vinci in the Tribunal de Commerce de Paris to recover damages. On June 21, 2000, Vinci filed an answer and counterclaim against us seeking the liquidated damages of $25.0 million and other damages, costs and expenses of approximately $3.2 million based on then current exchange rates. In November 2003, the Tribunal de Commerce de Paris ruled in favor of Vinci in the matter and awarded Vinci $25.0 million plus approximately $8.5 million in interest, exchange rate differential, and legal fees. As a result, although we have not yet paid the judgment we recorded a $33.5 million (pre-tax) provision in the fourth quarter of 2003. We are currently appealing this verdict in the Cour d'appel de Paris. Although the provision for the judgment had a significant impact on our reported results for 2003, we do not believe that the ultimate outcome of this matter will have a material adverse effect on our future results of operations or business.

In the normal course of our business activities, we provide letters of credit to secure the performance and/or payment of obligations, including the payment of worker's compensation obligations. At September 30, 2004, outstanding letters of credit approximated $14.4 million.

In the normal course of our business activities, we provide guarantee and performance, bid, and payment bonds under the terms of agreements with customers, or in connection with bidding to obtain such agreements. In June 2004, the company we employed for our surety bonding was acquired by another company. This new company requires that all future bonds be secured by a letter of credit. These letters of credit will be drawn against our available credit capacity under our revolving credit facility. All existing bonds and amendments to these bonds are secured by parent company guarantees only. The aggregate of these guarantees and bonds at September 30, 2004 was $31.8 million. The surety bonds and bank guarantees/letters of credit expire between November 2004 and February 2005 and between November 2004 and July 2005, respectively.

We estimate that the cost to complete capital expenditure projects in progress at September 30, 2004 approximates $0.6 million.

 

9. Industry Segment Information - We have conformed our segment reporting to changes in our operating management structure that became effective June 2004. We still conduct our operations through two divisions, Offshore Construction Division (OCD) and Global Divers and Marine Contractors (GDMC). However, GDMC's Asia Pacific segment has been combined into OCD's Asia Pacific segment and our Gulf of Mexico shallow water pipelay has been removed from GDMC's Gulf of Mexico segment and added to OCD's Gulf of Mexico segment. OCD now includes all pipelay and derrick lifts worldwide as well as diving and marine support services in our Asia Pacific region. GDMC includes all remaining diving and marine support services worldwide.

Effective September 30, 2004, we classified our liftboat division, which was historically included in our GDMC Gulf of Mexico segment, as discontinued operations. The presentation of segment disclosure information provided below has been reclassified for this change. (See Note 11 of the Notes to Condensed Consolidated Financial Statements for additional information.) The following tables present information about the profit or loss of each of the Company's nine reportable segments for the quarters and nine months ended September 30, 2004 and 2003. The information contains certain allocations of corporate expenses that we deem reasonable and appropriate for the evaluation of results of operations.

						Quarter Ended								Nine Months Ended
						September 30,								September 30,
						2004				2003				2004				2003
						(In thousands)
Total segment revenues:
	Offshore Construction Division:
		Gulf of Mexico				$	10,947			$	36,429			$	37,102				$	110,304
		West Africa					(10,211)	(d)			17,060				6,872	(d)				89,870
		Latin America					93,589				4,941				153,654					12,210
		Asia Pacific					17,889				23,586				56,026					84,471
		Middle East					8,319				22,852				8,500					74,137
			Subtotal			$	120,533			$	104,868			$	262,154				$	370,992
	Global Divers and Marine Contractors:
		Gulf of Mexico				$	9,173			$	10,774			$	24,223				$	26,451
		West Africa					--				1,498				525					6,972
		Latin America					4,529				396				8,291					593
		Middle East					4,540				5,578				16,214					15,014
			Subtotal			$	18,242			$	18,246			$	49,253				$	49,030
				Total		$	138,775			$	123,114			$	311,407				$	420,022
Intersegment eliminations:
	Offshore Construction Division:
		Gulf of Mexico				$	1,317			$	621			$	4,777				$	756
			Subtotal			$	1,317			$	621			$	4,777				$	756
	Global Divers and Marine Contractors:
		Gulf of Mexico				$	1,774			$	3,041			$	4,932				$	6,291
		West Africa					--				1,498				525					6,972
		Latin America					4,529				396				8,291					383
		Middle East					766				3,290				766					4,452
			Subtotal			$	7,069			$	8,225			$	14,514				$	18,098
				Total		$	8,386			$	8,846			$	19,291				$	18,854
Total segment revenues from external customers						$	130,389			$	114,268			$	292,116				$	401,168

 

Income (loss) from continuing operations before income taxes:
	Offshore Construction Division:
		Gulf of Mexico				$	19,011	(a)		$	5,054				$	1,533	(a)		$	3,874
		West Africa					(16,307)	(d)			(13,586)					(14,757)	(d)			(20,374)
		Latin America					16,548				(309)	(c)				21,050				(13,946)	(c)
		Asia Pacific					1,559				923					(5,128)				5,976
		Middle East					(1,463)				(3,747)					(7,204)				6,055
			Subtotal			$	19,348			$	(11,665)				$	(4,506)			$	(18,415)
	Global Divers and Marine Contractors:
		Gulf of Mexico				$	1,542			$	1,846				$	(1,145)			$	1,832
		West Africa					(16)				54					(69)				1,569
		Latin America					1,074				(188)					1,969				(511)
		Middle East					772				1,063					3,846				2,798
			Subtotal			$	3,372			$	2,775				$	4,601			$	5,688
				Total		$	22,720			$	(8,890)				$	95			$	(12,727)

The following table reconciles the revenues of the reportable segments and profit or loss presented above to our consolidated totals.

							Quarter Ended								Nine Months Ended
							September 30,								September 30,
							2004				2003				2004				2003
							(In thousands)
Revenues:
	Total for reportable segments						$	138,775			$	123,114			$	311,407			$	420,022
	Elimination of intersegment revenues							(8,386)				(8,846)				(19,291)				(18,854)
				Total consolidated revenues			$	130,389			$	114,268			$	292,116			$	401,168
Income (loss) from continuing operations
		before income taxes:
	Total for reportable segments						$	22,720			$	(8,890)			$	95			$	(12,727)
	Over (under) allocated corporate expense							508	(b)			534				(210)	(b)			596
			Total consolidated income (loss) from continuing operations before taxes				$	23,228			$	(8,356)			$	(115)			$	(12,131)

(a)		Includes a gain of approximately $16.8 million from the sale of one construction vessel
(b)		Includes a gain of approximately $1.2 million from the sale of the Lafayette, Louisiana property
(c)		Includes a gain of approximately $5.6 million from the sale of two construction vessels
(d)		Includes a charge of approximately $10.8 million related to an adverse legal judgment

 

10. Comprehensive Income (Loss) - Following is a summary of our comprehensive income (loss) for the three months and nine months ended September 30, 2004 and 2003:

					Quarter Ended								Nine Months Ended
					September 30,								September 30,
					2004				2003				2004				2003
					(In thousands)
Net income (loss)					$	18,880			$	(12,649)			$	910			$	(12,958)
Other comprehensive income (loss):
	Reclassification of realized loss on
		hedging activities				--				--				--				315
	Unrealized gain on hedging activities...					--				--				--				128
Comprehensive income (loss)					$	18,880			$	(12,649)			$	910			$	(12,515)

 

11. Discontinued Operations - We classified our Liftboat Division as held for sale in the third quarter of 2004. The Liftboat Division was historically included in our GDMC Gulf of Mexico segment. In accordance with SFAS No. 144, "Accounting for the Impairment or Disposal of Long-Lived Assets," the Liftboat Division's results of operations, financial position and cash flows have been reflected in the consolidated financial statements and notes as a discontinued operation for all periods presented. In September, we entered into a definite asset purchase agreement with Mercury Offshore Assets, LLC (Mercury). We completed the sales transaction with Mercury in October 2004 and will recognize a gain on the sale of approximately $29.5 million within discontinued operations in the fourth quarter of 2004.

Comparative balance sheets of the Liftboat Division's discontinued operation were as follows:

			September 30,		December 31,
			2004		2003
		(In thousands)
Property, plant and equipment, net			$ 19,447		$ 21,664
Other assets			2,987		2,567
Total assets			$ 22,434		$ 24,231

Operating results of the Liftboat Division's discontinued operation were as follows:

					Three Months Ended								Nine Months Ended
					September 30,								September 30,
					2004				2003				2004					2003
					(In thousands)
Revenues					$	7,990			$	7,891				$	20,040			$	24,084
Income (loss) before income taxes						1,314				1,668					(303)				4,951
Income tax expense (benefit)						460				584					(106)				1,733
Net income (loss) from discontinued      operations					$	854			$	1,084				$	(197)			$	3,218

 

12. Asset Sales - During the quarter ended September 30, 2004, we recorded a gain of approximately $16.8 million, before tax, from the sale of one construction vessel in our Offshore Construction Division Gulf of Mexico segment and a gain of $1.2 million, before tax, from the sale of our Lafayette, Louisiana office facility, to an affiliate of our Chief Executive Officer, in our Corporate division. During the quarter ended September 30, 2003, we recorded a gain of approximately $5.6 million, before tax, from the sale of two construction vessels in our Latin America segment.

 

13. Subsequent Events - On November 2, 2004, we were notified by the International Arbitration Tribunal of an adverse judgment regarding a legal dispute with one of our customers related to offshore pipeline work performed in West Africa in 2003. As a result of the arbitration judgment, we must repay approximately $9.2 million to our customer and write-off a $1.6 million related accounts receivable balance. The effects of this decision were recorded in our September 30, 2004 operating results by reducing revenues and income from continuing operations, net of taxes, by $10.8 million. We expect to pay such judgment from cash on hand.