SEC Filing | Hornbeck Offshore Services, Inc.

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S-1

As filed with the U.S. Securities and Exchange Commission on December 7, 2023.

Registration No. 333-

UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549

FORM S-1

REGISTRATION STATEMENT

UNDER

THE SECURITIES ACT OF 1933

Hornbeck Offshore Services, Inc.

(Exact name of registrant as specified in its charter)

Delaware

4424

72-1375844

(State or other jurisdiction of

incorporation or organization)

(Primary Standard Industrial

Classification Code Number)

(I.R.S. Employer

Identification No.)

103 Northpark Boulevard, Suite 300

Covington, Louisiana 70433

Telephone: (985) 727-2000

(Address, including zip code, and telephone number, including area code, of registrant’s principal executive offices)

Todd M. Hornbeck

Chairman of the Board, President and Chief Executive Officer

103 Northpark Boulevard, Suite 300

Covington, Louisiana 70433

Telephone: (985) 727-2000

(Name, address, including zip code, and telephone number, including area code, of agent for service)

With copies to:

Matthew R. Pacey, P.C.
Bryan D. Flannery
Kirkland & Ellis LLP
609 Main Street
Houston, TX 77002
(713) 836-3786

T. Mark Kelly

E. Ramey Layne

Vinson & Elkins LLP
845 Texas Avenue
Houston, TX 77002
(713) 758-2222

Approximate date of commencement of proposed sale to the public: As soon as practicable after this Registration Statement is declared effective.

If any of the securities being registered on this Form are to be offered on a delayed or continuous basis pursuant to Rule 415 under the Securities Act of 1933 check the following box: ☐

If this Form is filed to register additional securities for an offering pursuant to Rule 462(b) under the Securities Act, please check the following box and list the Securities Act registration statement number of the earlier effective registration statement for the same offering. ☐

If this Form is a post-effective amendment filed pursuant to Rule 462(c) under the Securities Act, check the following box and list the Securities Act registration statement number of the earlier effective registration statement for the same offering. ☐

If this Form is a post-effective amendment filed pursuant to Rule 462(d) under the Securities Act, check the following box and list the Securities Act registration statement number of the earlier effective registration statement for the same offering. ☐

Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, smaller reporting company, or an emerging growth company. See the definitions of “large accelerated filer,” “accelerated filer,” “smaller reporting company,” and “emerging growth company” in Rule 12b-2 of the Exchange Act.

If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 7(a)(2)(B) of the Securities Act. ☐

The registrant hereby amends this registration statement on such date or dates as may be necessary to delay its effective date until the registrant shall file a further amendment which specifically states that this registration statement shall thereafter become effective in accordance with Section 8(a) of the Securities Act of 1933, as amended, or until this registration statement shall become effective on such date as the Securities and Exchange Commission, acting pursuant to said Section 8(a), may determine.

The information in this prospectus is not complete and may be changed. We may not sell these securities until the registration statement filed with the Securities and Exchange Commission is effective. This prospectus is not an offer to sell these securities and it is not soliciting an offer to buy these securities in any jurisdiction where the offer or sale is not permitted.

Subject to Completion, dated , 2024

PROSPECTUS

Shares

LOGO

Hornbeck Offshore Services, Inc.

Common Stock

This is an initial public offering of shares of our common stock. We are offering shares of our common stock. Certain selling stockholders identified in this prospectus are offering shares of our common stock.

Prior to this offering, there has been no public market for our common stock. We estimate that the initial public offering price per share will be between $ and $ . See “Underwriting” for a discussion of the factors to be considered in determining the initial offering price. We intend to apply to list our common stock on the New York Stock Exchange (the “NYSE”) under the symbol “HOS.”

Investing in shares of our common stock involves significant risks. See “Risk Factors” beginning on page 30.

Neither the Securities and Exchange Commission nor any other regulatory body has approved or disapproved of these securities or passed upon the adequacy or accuracy of this prospectus. Any representation to the contrary is a criminal offense.


	Per Share	Total
Initial public offering price	$	$
Underwriting discounts and commissions⁽¹⁾	$	$
Proceeds, before expenses, to us	$	$
Proceeds, before expenses, to the selling stockholders	$	$

(1)	We have agreed to reimburse the underwriters for certain expenses. See “Underwriting.”

We and the selling stockholders have granted the underwriters an option for a period of 30 days from the date of this prospectus to purchase up to an additional shares of our common stock from us at the initial public offering price, less the underwriting discounts and commissions. We will not receive any proceeds from the sale of shares of our common stock by the selling stockholders, including upon the sale of shares of our common stock by the selling stockholders if the underwriters exercise their option.

The underwriters expect to deliver the shares of common stock to purchasers on or about , 2024.


J.P. Morgan				Barclays


DNB Markets				Piper Sandler		Guggenheim Securities		Raymond James


BTIG				Johnson Rice & Company		Pickering Energy Partners		Seaport Global Securities


		Academy Securities				Drexel Hamilton

Prospectus dated , 2024

TABLE OF CONTENTS


	Page
SPECIAL NOTE REGARDING FORWARD-LOOKING STATEMENTS		x
SUMMARY		1
RISK FACTORS		30
USE OF PROCEEDS		63
DIVIDEND POLICY		64
CAPITALIZATION		65
DILUTION		66
MANAGEMENT’S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS		68
BUSINESS		104
MANAGEMENT		130
EXECUTIVE COMPENSATION		139
PRINCIPAL AND SELLING STOCKHOLDERS		159
CERTAIN RELATIONSHIPS AND RELATED PARTY TRANSACTIONS		162
DESCRIPTION OF CAPITAL STOCK AND WARRANTS		164
SHARES ELIGIBLE FOR FUTURE SALE		168
MATERIAL U.S. FEDERAL INCOME TAX CONSIDERATIONS FOR NON-U.S. HOLDERS		171
UNDERWRITING		176
LEGAL MATTERS		182
EXPERTS		182
WHERE YOU CAN FIND MORE INFORMATION		182
INDEX TO FINANCIAL STATEMENTS		F-1

Through and including , 2024 (the 25th day after the date of this prospectus), all dealers effecting transactions in these securities, whether or not participating in this offering, may be required to deliver a prospectus. This is in addition to a dealer’s obligation to deliver a prospectus when acting as an underwriter and with respect to an unsold allotment or subscription.

Neither we, the selling stockholders, nor the underwriters (and any of our or their affiliates) have done anything that would permit this offering or possession or distribution of this prospectus in any jurisdiction where action for that purpose is required, other than in the United States. Persons outside the United States who obtain this prospectus must inform themselves about, and observe any restrictions relating to, the offering of the shares of common stock and the distribution of this prospectus outside of the United States.

COMMONLY USED DEFINED TERMS

As used in this prospectus, unless the context indicates or otherwise requires, the terms listed below have the following meanings:

“2023 Equity Incentive Plan” means Hornbeck Offshore Services, Inc. 2023 Equity Incentive Plan, the form of which is attached as Exhibit 10.4;

“2020 Management Incentive Plan” means the 2020 Management Incentive Plan of Hornbeck Offshore Services, Inc., a copy of which is attached as Exhibit 10.2, as amended by that certain First Amendment to 2020 Management Incentive Plan of Hornbeck Offshore Services, Inc. a copy of which is attached as Exhibit 10.3;

“Annual Financial Statements” means the audited consolidated financial statements of Hornbeck Offshore Services, Inc. at December 31, 2022 and 2021, and for the years ended December 31, 2022 and 2021, for the period from September 5, 2020 to December 31, 2020 (Successor) and for the period from January 1, 2020 to September 4, 2020 (Predecessor);

“Ares” means Ares Management Corporation (NYSE: ARES);

“ASC” means Financial Accounting Standards Board Accounting Standards Codification;

“CO2e/kboe” means carbon dioxide equivalent per thousand barrels of oil equivalent;

“Company,” “Hornbeck,” “we,” “our” or “us” means, unless otherwise indicated or the context otherwise requires, Hornbeck Offshore Services, Inc., a Delaware corporation, and its consolidated subsidiaries;

“Creditor Warrants” means those certain warrants issued to certain claimants in settlement of certain pre-Chapter 11 Cases liabilities;

“ECO” means Edison Chouest Offshore;

“ECO Acquisitions” means the ECO Acquisitions #1 and the ECO Acquisitions #2;

“ECO Acquisitions #1” means the acquisition of six high-spec OSVs effected pursuant to the definitive purchase agreements the Company entered into with certain affiliates of ECO on January 10, 2022, as amended;

“ECO Acquisitions #2” means the acquisition of six high-spec OSVs effected as contemplated by the controlling purchase agreement the Company entered into with Nautical, an ECO affiliate, on December 22, 2022, as subsequently divided into separate agreements and as each is amended;

“Effective Date” means September 4, 2020, the date the Company emerged from its Chapter 11 Cases in the United States Bankruptcy Court for the Southern District of Texas, Houston Division;

“Exit Second Lien Term Loans” means our outstanding term loans under the Second Lien Credit Agreement;

“Financial Statements” means our Annual Financial Statements and our Quarterly Financial Statements;

“First Lien Credit Agreement” means that certain first lien term loan credit agreement, dated the Effective Date (as amended and restated pursuant to that certain Amendment No. 1 to First Lien Credit Agreement and Amendment No. 1 to the Effective Date Junior Lien Intercreditor Agreement, dated December 22, 2021, as further amended pursuant to that certain First Amendment to Restated First Lien Credit Agreement, dated June 6, 2022, as further amended pursuant to that certain Interest Rate Replacement Index Agreement and Second

Amendment to First Lien Credit Agreement, dated July 27, 2023), by and among the Company, as parent borrower, Hornbeck Offshore Services, LLC, as co-borrower, Wilmington Trust, National Association, as administrative agent and collateral agent, and the lenders party thereto;

“GAAP” means United States generally accepted accounting principles;

“Gulf Island” means Gulf Island Shipyards, LLC;

“high-specification” or “high-spec” means, when referring to OSVs, vessels with cargo-carrying capacity of between 3,500 and 5,000 DWT (i.e., primarily 265 to 280 class OSV notations), and dynamic-positioning systems with a DP-2 classification or higher; for the avoidance of doubt, any MPSV is a high-spec vessel (other than any MPSVs of greater than 5,000 DWT, which are ultra high-spec vessels);

“Highbridge” means Highbridge Capital Management LLC;

“Jones Act Warrants” means those certain warrants issued to certain non-U.S. citizens in settlement of certain pre-Chapter 11 Cases liabilities and in connection with subsequent private offerings of the Company’s equity;

“low-specification” or “low-spec” means, when referring to OSVs, vessels with cargo-carrying capacity of less than 2,500 DWT (i.e., primarily 200 class OSV notations), and dynamic-positioning systems with a DP-1 classification or lower;

“mid-specification” or “mid-spec” means, when referring to OSVs, vessels with cargo carrying capacity of between 2,500 and 3,500 DWT (i.e., primarily 240 class OSV notations), and dynamic positioning systems with a DP-2 classification or higher;

“Nautical” means Nautical Solutions, L.L.C., an ECO affiliate;

“Navieras” means a shipping company, qualified under the laws of Mexico, that may own or operate vessels and naval artifacts, including in the Mexican coastwise trade;

“PEMEX” means Petroleos Mexicanos;

“Petrobras” means Petroleo Brasileiro S.A.;

“principal stockholders” means funds, investment vehicles or accounts managed or advised by Ares, Whitebox or Highbridge or their respective affiliates that own shares of our common stock;

“Quarterly Financial Statements” means the unaudited condensed consolidated financial statements for the three and nine months ended September 30, 2023 and 2022;

“Replacement First Lien Term Loans” means our first-lien replacement term loans under the First Lien Credit Agreement, the balance of which we repaid in full in August 2023;

“Second Lien Credit Agreement” means that certain second lien term loan credit agreement, dated the Effective Date (as amended pursuant to that certain Amendment No. 1 to Second Lien Credit Agreement and Amendment No. 1 to the Effective Date Junior Lien Intercreditor Agreement, dated December 22, 2021, as further amended pursuant to that certain Second Amendment to Second Lien Credit Agreement, dated June 6, 2022, and as further amended, restated, amended and restated, supplemented or otherwise modified from time to time), by and among the Company, as parent borrower, Hornbeck Offshore Services, LLC, as co-borrower, Wilmington Trust, National Association, as administrative agent and collateral agent, and the lenders from time to time party thereto;

iii

“Surety” means Zurich Insurance Company of America and Fidelity & Deposit Company of Maryland;

“ultra high-specification” or “ultra high-spec” means, when referring to OSVs, vessels with cargo-carrying capacity of greater than 5,000 DWT (i.e., 300 class OSV notations or higher), and dynamic-positioning systems with a DP-2 classification or higher; for the avoidance of doubt, any MPSV of greater than 5,000 DWT is an ultra high-spec vessel; and

“Whitebox” means Whitebox Advisors LLC.

GLOSSARY OF TERMS

The following are abbreviations and definitions of certain terms used in this document, which are commonly used in the offshore support vessel industry:

“active utilization” means, when referring to OSVs or MPSVs, the weighted-average rate that active vessels are utilized, or generating revenues, based on a denominator comprised only of vessel-days available for service by the active fleet, which excludes the impact of inactive or stacked vessel days;

“average dayrate” means, when referring to OSVs or MPSVs, average revenue per day, which includes charter hire, crewing services and net brokerage revenues, based on the number of days during the period that the OSVs or MPSVs, as applicable, generated revenue. For purposes of vessel brokerage arrangements, this calculation excludes that portion of revenue that is equal to the cost of in-chartering third-party equipment paid by customers;

“average utilization” means, when referring to OSVs or MPSVs, the weighted-average rate that vessels are utilized, or generating revenues, based on a 365-day year;

“BOEM” means the Bureau of Ocean Energy Management;

“cabotage laws” means laws pertaining to the privilege of owning and operating vessels in the navigable, territorial waters of a nation;

“coastwise trade” means the transportation of merchandise or passengers by water, or by land and water, between points in the United States, either directly or via a foreign port within the meaning of 46 U.S.C. Chapter 551 and any successor statutes thereto, as amended or supplemented from time to time;

“deep-well” means a well drilled to a true vertical depth of 15,000’ or greater, regardless of whether the well was drilled in the shallow water of the Outer Continental Shelf or in the deepwater or ultra-deepwater;

“deepwater” means offshore areas, generally 1,000’ to 5,000’ in depth;

“DP-1,” “DP-2” and “DP-3” mean various classifications of dynamic positioning systems on vessels to automatically maintain a vessel’s position and heading through anchor-less station-keeping;

“DWT” means deadweight tons;

“effective dayrate” means the average dayrate multiplied by the average utilization rate;

“flotel” means on-vessel accommodations services, such as lodging, meals and office space;

“GoM” means the U.S. GoM and the Mexico GoM;

“IRM” means inspection, repair and maintenance, also known as “IMR,” or inspection, maintenance and repair, depending on regional preference;

“Jones Act” means the U.S. citizenship and cabotage laws principally contained in 46 U.S.C. § 50501(a), (b) and (d) and 46 U.S.C. Chapters 121 and 551 and any successor statutes thereto;

“Jones Act-qualified” means, when referring to a vessel, a U.S.-flagged vessel qualified to engage in domestic coastwise trade under the Jones Act;

“long-term contract” means a time charter of one year or longer in duration;

“Mexico GoM” means the territorial waters of Mexico in the Gulf of Mexico;

“MPSV” means a multi-purpose support vessel, and we consider all of our MPSVs to be high-spec or ultra high-spec;

“MSC” means the Military Sealift Command;

“OSV” means an offshore supply vessel, also known as a “PSV,” or platform supply vessel, depending on regional preference;

“ROV” means a remotely operated vehicle;

“SOV” means service operation vessel;

“ultra-deepwater” means offshore areas, generally more than 5,000’ in depth;

“U.S. GoM” means the territorial waters of the United States in the Gulf of Mexico; and

“USCG” means United States Coast Guard.

MARKET AND INDUSTRY DATA

This prospectus includes market and industry data and forecasts that we have derived from publicly available information, various industry publications, other published industry sources and our internal data and estimates.

Additionally, our internal data and estimates are based upon information obtained from trade and business organizations and other contacts in the markets in which we operate. Although we believe these third-party sources are reliable as of their respective dates, we have not had this information further verified by any other independent sources. These sources include industry data from Wood Mackenzie’s Emissions Benchmarking Tool, a report titled “Offshore Wind Market Report: 2023 Edition,” dated August 2023, by the U.S. Department of Energy (the “DoE Report”), a report titled “Short-Term Energy Outlook,” dated May 2023, by the U.S. Energy Information Administration (the “2023 EIA Outlook”), a report titled “Macro and OSV Demand Drivers Outlook,” dated September 2023, by Rystad Energy Consultants, and a report titled “OSV Market Study,” dated September 2023, by Fearnley Offshore Supply. Similarly, our internal research is based upon our understanding of industry conditions. The industry in which we operate is subject to a high degree of uncertainty and risk due to a variety of factors, including those described in the sections entitled “Risk Factors” and “Special Note Regarding Forward-Looking Statements.” These and other factors could cause results to differ materially from those expressed in our estimates and these third-party sources.

TRADEMARKS, TRADENAMES AND SERVICE MARKS

We own or have rights to trademarks or trade names that we use in conjunction with the operation of our business and that appear in this prospectus. This prospectus also contains trademarks, service marks, trade names and copyrights of other companies which, to our knowledge, are the property of their respective owners. Solely for convenience, trademarks and trade names referred to in this prospectus may appear without the ^® or ^™ symbols, but the absence of such symbols does not indicate the registration status of the trademarks and is not intended to indicate, in any way, that we will not assert, to the fullest extent under applicable law, our rights or the right of the applicable licensor to such trademarks and trade names.

BASIS OF PRESENTATION

Unless otherwise indicated or the context otherwise requires, references in this prospectus to the “Company,” “Hornbeck,” “we,” “us” and “our” refer to Hornbeck Offshore Services, Inc. and its consolidated subsidiaries.

Our historical financial position and results of operations for the year ended December 31, 2022 (Successor), the year ended December 31, 2021 (Successor) and the period from September 5, 2020 through December 31, 2020 (Successor) may not be comparable to the historical financial position and results of operations for the period from January 1, 2020 through September 4, 2020 (Predecessor). We emerged from our Chapter 11 cases in the United States Bankruptcy Court for the Southern District of Texas, Houston Division, or the Bankruptcy Court on September 4, 2020 (the “Chapter 11 Cases”), and as a result, our financial statements after September 4, 2020 reflect the effect of our reorganization under the Chapter 11 Cases and application of fresh-start accounting. References to “Successor” in this prospectus relate to our financial position and results of operations subsequent to September 4, 2020, the date of our emergence from bankruptcy, and references to “Predecessor” in this prospectus relate to our financial position and results of operations prior to, and including, September 4, 2020. For more information about this basis of presentation, see “Management’s Discussion and Analysis of Financial Condition and Results of Operations” and Note 2 to the Annual Financial Statements included elsewhere in this prospectus.

vii

Unless otherwise stated, discussions surrounding our vessels are as of October 31, 2023 and include the two vessels delivered in November 2023 and the one remaining vessel expected to be delivered by December 31, 2023 as part of the ECO Acquisitions #2, but due to supply chain constraints such delivery could extend into early 2024. Such discussions also include two partially constructed Jones Act-qualified MPSV newbuilds to be completed pursuant to our settlement with the Surety, which we expect to be delivered in 2025. Our vessels exclude four OSVs that we operate on behalf of the U.S. Navy.

PRESENTATION OF CERTAIN FINANCIAL MEASURES

We disclose and discuss EBITDA, Adjusted EBITDA and Adjusted Free Cash Flow as non-GAAP financial measures in this prospectus. We define EBITDA as earnings (net income or loss) before interest, income taxes, depreciation and amortization. Adjusted EBITDA reflects certain adjustments to EBITDA for gains or losses on early extinguishment of debt, terminated debt refinancing costs, stock-based compensation expense and interest income. In addition, Adjusted EBITDA excludes non-cash gains or losses on the fair value adjustment of liability-classified warrants, as well as restructuring costs and reorganization items, net related to the Company’s voluntary relief in 2020 under Chapter 11 of the U.S. Bankruptcy Code and the application of fresh-start accounting under ASC 852, Reorganizations. We define Adjusted Free Cash Flow as Adjusted EBITDA less cash paid for deferred drydocking, cash paid for maintenance capital expenditures, cash paid for interest and cash paid for (refunds of) income taxes. Our measures of EBITDA, Adjusted EBITDA and Adjusted Free Cash Flow may not be comparable to similarly titled measures presented by other companies. Other companies may calculate EBITDA, Adjusted EBITDA and Adjusted Free Cash Flow differently than we do, which may limit their usefulness as comparative measures.

We view EBITDA, Adjusted EBITDA and Adjusted Free Cash Flow primarily as liquidity measures and, as such, we believe that the GAAP financial measure most directly comparable to those measures is cash flows provided by operating activities. Because EBITDA, Adjusted EBITDA and Adjusted Free Cash Flow are not measures of financial performance calculated in accordance with GAAP, they should not be considered in isolation or as a substitute for operating income, net income or loss, cash flows provided by operating, investing and financing activities, or other income or cash flow statement data prepared in accordance with GAAP.

EBITDA, Adjusted EBITDA and Adjusted Free Cash Flow are widely used by investors and other users of our financial statements as supplemental financial measures that, when viewed with our GAAP results and the accompanying reconciliations, we believe provide additional information that is useful to gain an understanding of the factors and trends affecting our ability to service debt, pay deferred taxes and fund drydocking charges, maintenance capital improvements and non-vessel capital expenditures. We also believe the disclosure of EBITDA, Adjusted EBITDA and Adjusted Free Cash Flow helps investors or lenders meaningfully evaluate and compare our cash flow generating capacity from quarter to quarter and year to year.

EBITDA, Adjusted EBITDA and Adjusted Free Cash Flow are also financial metrics used by management as supplemental internal measures for planning and forecasting overall expectations and for evaluating actual results against such expectations; for short-term cash bonus incentive compensation purposes; to compare to the EBITDA, Adjusted EBITDA and Adjusted Free Cash Flow of other companies when evaluating potential acquisitions; and to assess our ability to service existing fixed charges and incur additional indebtedness. Additionally, we have historically made certain adjustments to EBITDA to internally evaluate our performance based on the computation of ratios used in certain financial covenants of our credit agreements with various lenders, whenever applicable. Currently, the Company’s Second Lien Credit Agreement includes an incurrence test for the issuance of unsecured debt. The test requires a fixed charge coverage ratio of at least 2.0 to 1.0 at the time any unsecured debt is incurred. The fixed charge coverage ratio is calculated using certain adjustments to EBITDA defined by the Second Lien Credit Agreement, which adjustments are consistent with those reflected in Adjusted EBITDA in this prospectus. In addition, we believe that, based on covenants in prior credit facilities, future debt arrangements may require compliance with certain ratios that will likely include EBITDA or Adjusted EBITDA in the computations. Adjusted EBITDA is also currently utilized in connection with the Company’s short-term cash bonus incentive compensation programs.

viii

For definitions of EBITDA, Adjusted EBITDA and Adjusted Free Cash Flow and reconciliations to the most directly comparable measure under GAAP, see “Summary—Summary Historical Financial and Other Data” and “Management’s Discussion and Analysis of Financial Condition and Results of Operations—Non-GAAP Financial Measures.”

ABOUT THIS PROSPECTUS

None of we, the selling stockholders or the underwriters have authorized anyone to provide you with information or make any representations other than those contained in this prospectus. We, the selling stockholders and the underwriters take no responsibility for, and provide no assurance as to the reliability of, any other information that others may give you. This prospectus is an offer to sell only the shares offered hereby, and only under circumstances and in jurisdictions where it is lawful to do so. You should assume that the information appearing in this prospectus is accurate as of the date on the front cover of this prospectus only. Our business,

financial condition, results of operations and prospects may have changed since that date. We will update this prospectus as required by law, including with respect to any material change affecting us or our business prior to the completion of this offering.

Certain monetary amounts, percentages and other figures included in this prospectus have been subject to rounding adjustments. Accordingly, figures shown as totals in certain tables may not be the arithmetic aggregation of the figures that precede them, and figures expressed as percentages in the text may not total 100% or, as applicable, when aggregated may not be the arithmetic aggregation of the percentages that precede them.

SPECIAL NOTE REGARDING FORWARD-LOOKING STATEMENTS

This prospectus contains forward-looking statements. Many statements included in this prospectus that are not statements of historical fact, including statements about our beliefs and expectations, are forward-looking statements. Forward-looking statements are inherently subject to risks and uncertainties, some of which cannot be predicted or quantified. These risks and other factors include, but are not limited to, those listed under “Risk Factors.” In some cases, you can identify forward-looking statements by terminology such as “anticipate,” “believe,” “continue,” “could,” “estimate,” “expect,” “intend,” “may,” “might,” “objective,” “ongoing,” “plan,” “predict,” “project,” “potential,” “should,” “will,” “would” or the negative of these terms or other comparable terminology. In particular, statements about the markets in which we operate and our expectations, beliefs, plans, strategies, objectives, prospects, assumptions or future events or performance contained in this prospectus under the headings “Summary,” “Risk Factors,” “Management’s Discussion and Analysis of Financial Condition and Results of Operations,” and “Business” are forward-looking statements. Forward-looking statements include, but are not limited to, statements about:

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our market opportunity and the potential growth of that market;

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our strategy, outcomes, and growth prospects;

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trends in our industry and service-offerings; and

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the competitive environment in which we operate.

Some of the factors that could cause actual results to differ materially from those expressed or implied by the forward-looking statements include:

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impacts from changes in oil and natural gas prices in the United States and worldwide;

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changes in decisions and capital spending by customers in the energy industry and the industry expectations for offshore exploration, field development and production;

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changes in decisions or plans or delays for offshore wind development in the United States;

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uncertainty of global financial market conditions and potential constraints in accessing capital or credit if and when needed with favorable terms, if at all;

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unplanned customer suspensions, cancellations, rate reductions or non-renewals of vessel charters or vessel management contracts, or failures to finalize commitments to charter or manage vessels;

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delays or non-delivery of vessels subject to purchase, conversion and new construction agreements effective at the time of this offering, including delivery of the remaining vessel from the ECO Acquisitions #2, our SOV/flotel conversion and the two remaining vessels under the MPSV newbuild program;

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the inability to accurately predict vessel utilization levels and dayrates;

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the inability to successfully market across various industry applications the vessels that the Company owns, is constructing, is converting, has recently acquired or might acquire, including in traditional energy as well as offshore wind, military and other non-oilfield applications;

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integration of acquired businesses or vessels, or entry into new lines of business;

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changing customer demands for vessel specifications, which may make some of our older vessels technologically obsolete for certain customer projects or in certain markets;

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the operating risks normally incident to our lines of business, including the potential impact of liquidated counterparties;

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industry over-supply resulting from reactivating currently-stacked vessels;

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any change in the U.S. government’s procurement policies and practices with regard to the chartering of privately-owned vessels or the management of government-owned vessels by private operators;

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an oil spill or other significant event in the United States or another offshore drilling region that could have a broad impact on deepwater and other offshore energy exploration and production activities, such as the suspension of activities or significant regulatory responses;

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the imposition of laws or regulations that result in reduced exploration and production activities or that increase the Company’s operating costs or operating requirements, including laws and regulations addressing climate change;

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potential liability for remedial actions or assessments under existing or future environmental regulations or litigation;

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the impact of existing or future environmental regulations or litigation on our business or customer plans or projects;

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our ability to achieve, reach or otherwise meet initiatives, plans or ambitions with respect to environmental, social and governance (“ESG”) matters, including mandates imposed by customers or governmental agencies;

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disputes with customers or vendors;

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consolidation of our customer base;

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technological or regulatory changes that shorten the expected useful lives of our vessels;

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increased regulatory burdens and oversight;

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administrative, judicial or political barriers to exploration and production activities in Mexico, Brazil or other foreign locations;

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changes in law or governmental policy or judicial action in Mexico affecting the Company’s Mexican registration of vessels;

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administrative or other legal changes in Mexican or Brazilian cabotage laws;

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other legal or administrative changes in Mexico that adversely impact planned or expected offshore energy development;

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unanticipated difficulty in effectively competing in or operating in international markets;

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economic, social, tax, geopolitical and weather-related risks;

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acts of terrorism and piracy;

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the impact of regional or global public health crises or pandemics, such as the outbreak of the coronavirus (“COVID-19”) pandemic;

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other issues that may be encountered in expanding the Company’s service offering within its existing government franchise, in the emerging offshore wind industry, and in other non-oilfield applications;

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the shortage of or the inability to attract and retain qualified personnel, when needed, including licensed vessel personnel for active vessels or vessels the Company may acquire;

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the repeal or administrative weakening of the Jones Act or adverse changes in the interpretation of the Jones Act;

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drydocking delays and cost overruns and related risks;

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vessel accidents, pollution incidents or other events resulting in lost revenue, fines, penalties or other expenses that are unrecoverable from insurance policies or other third parties;

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the resolution of pending legal proceedings, and any unexpected litigation and insurance expenses;

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the effects of asserted and unasserted claims and the extent of available insurance coverage;

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fluctuations in foreign currency valuations compared to the U.S. dollar;

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unionization of our workforce;

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shortages of qualified mariners resulting in increased wages, inability to crew vessels or both;

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changes in laws impacting licensure or compensation paid to mariners;

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risks associated with foreign operations, such as non-compliance with, the unanticipated effect of, or unexpected assessments/enforcement actions taken in connection with, tax laws, customs laws, immigration laws, or other legislation that result in higher than anticipated tax rates or other costs, especially in higher political risk countries where we operate;

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changes to applicable tax laws and regulations;

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our ability to use our net operating loss (“NOL”) carryforwards and other tax attributes may be limited;

•

the inability of the Company to refinance or otherwise retire certain funded debt obligations;

•

the potential for any impairment charges that could arise in the future;

•

risks arising from compromises of our data security; and

•

other risks and uncertainties, including those described under “Risk Factors.”

In addition, the Company’s future results may be impacted by adverse economic conditions, such as inflation, deflation, fluctuations in foreign currency exchange rates, supply chain disruptions, lack of liquidity in the capital markets or an increase in interest rates, that may negatively affect it or parties with whom it does business resulting in their non-payment or inability to perform obligations owed to the Company, such as the failure of customers to fulfill their contractual obligations, if and when required.

We have based the forward-looking statements contained in this prospectus primarily on our current expectations and projections about future events and trends that we believe may affect our business, financial condition, results of operations, prospects, business strategy and financial needs. The outcome of the events described in these forward-looking statements is subject to risks, uncertainties, assumptions and other factors described under “Risk Factors” and elsewhere in this prospectus. These risks are not exhaustive. Other sections of this prospectus include additional factors that could adversely affect our business and financial performance. Moreover, we operate in a very competitive environment. New risks and uncertainties emerge from time to time, and it is not possible for us to predict all risks and uncertainties that could have an impact on the forward-looking statements contained in this prospectus. We cannot be sure that the results, events and circumstances reflected in the forward-looking statements will be achieved or occur, and actual results, events or circumstances could differ materially from those described in, or implied by, the forward-looking statements.

In addition, statements that “we believe” and similar statements reflect our beliefs and opinions on the relevant subject.

The forward-looking statements made in this prospectus relate only to events as of the date on which such statements are made. We undertake no obligation to update any forward-looking statements after the date of this prospectus or to conform such statements to actual results or revised expectations, except as required by law.

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SUMMARY

This summary highlights selected information contained elsewhere in this prospectus, but it does not contain all of the information that you should consider before deciding to invest in our common stock. You should carefully read the entire prospectus, including the information presented under the section entitled “Risk Factors” and the financial statements and the notes thereto, included elsewhere in this prospectus, before making an investment decision. Some of the statements in the following summary constitute forward-looking statements. See “Special Note Regarding Forward-Looking Statements.” Unless the context otherwise requires, all references in this summary to the “Company,” “Hornbeck,” “HOS,” “we,” “us,” “our” or similar terms refer to Hornbeck Offshore Services, Inc. and its consolidated subsidiaries. Where we present information on an “as-adjusted basis,” it means that such information is presented giving effect to this offering and the use of proceeds therefrom, as reflected in more detail under the captions “Use of Proceeds” and “Capitalization.” Additionally, unless noted otherwise, discussions surrounding our vessels are as of October 31, 2023 and include the two vessels delivered in November 2023 and the one remaining vessel expected to be delivered by December 31, 2023 as part of the ECO Acquisitions #2, but due to supply chain constraints such delivery could extend into early 2024. Such discussions also include two partially constructed Jones Act-qualified MPSV newbuilds to be completed pursuant to our settlement with the Surety, which we expect to be delivered in 2025. Our vessels exclude four OSVs that we operate on behalf of the U.S. Navy.

We have defined certain industry terms used in this document in “Commonly Used Defined Terms” and “Glossary of Terms,” appearing immediately after the Table of Contents to this prospectus.

Company Overview

Hornbeck is a leading provider of marine transportation services to customers in the offshore oilfield market and diversified non-oilfield markets, including military support services, renewable energy development and other non-oilfield service offerings. Since our founding more than 26 years ago, we have focused on providing innovative, technologically advanced marine solutions to meet the evolving needs of our customers across our core geographic regions covering the United States and Latin America. Our team brings substantial industry expertise built through decades of experience and has leveraged that knowledge to amass what we believe is one of the largest, highest specification fleets of Offshore Supply Vessels (“OSVs”) and Multi-Purpose Support Vessels (“MPSVs”) in the industry. Approximately 75% of our total fleet consists of high-spec or ultra high-spec vessels, and we believe we have the number one ultra high-spec market position in the U.S., and the third largest fleet of high-spec and ultra high-spec OSVs in the world, measured by DWT capacity. We own a fleet of 75 multi-class OSVs and MPSVs, 58 of which are U.S. Jones Act-qualified vessels. Our Jones Act-qualified high-spec and ultra high-spec OSVs account for approximately 26% of the total industry supply of such vessels. We opportunistically expand our fleet into new, high-growth, cabotage-protected markets from time to time to enhance our fleet offerings to customers. Our mission is to be recognized as the energy industry’s marine transportation and service Company of Choice^® for our customers, employees and investors through innovative, high-quality, value-added business solutions delivered with enthusiasm, integrity and professionalism with the utmost regard for the safety of individuals and the protection of the environment.

Our fleet of 60 OSVs primarily provides transportation of equipment, materials and supplies to offshore drilling rigs, production platforms, subsea construction projects and other non-oilfield applications. Increasingly, given their versatility, our OSVs are being deployed in a variety of non-oilfield applications including military support services, renewable energy development for offshore wind, humanitarian aid and disaster relief, aerospace and telecommunications. Our OSVs differ from other marine service vessels in that they provide increased cargo-carrying flexibility and capacity that can transport large quantities of deck cargoes as well as various liquid and dry bulk cargoes in below deck tanks providing flexibility for a variety of jobs.

Moreover, our OSVs are outfitted with advanced technologies, including dynamic positioning capabilities, which allows each vessel to safely interface with another offshore vessel, exploration and production facility or an offshore asset by maintaining an absolute or relative position when performing its work.

Our fleet of 15 MPSVs provides commissioning and decommissioning support services, asset construction capabilities, recurring inspection, repair and maintenance services and flotel accommodations. The vessels primarily serve the oil and gas market, with capabilities including the installation of oilfield wellheads, risers, umbilicals, and other equipment placed on the seafloor and other floating production facilities. Further, these vessels are capable of supporting a variety of other non-oilfield offshore infrastructure projects, including the development of offshore windfarms, by providing the equipment and capabilities to support the installation and maintenance of wind turbines and platforms. Because of our ability to serve a diverse set of end markets, MPSV operations are typically less directly linked with the number of active drilling rigs in operation and are therefore less cyclical. Our high- and ultra high-spec OSVs can be contracted alongside our MPSVs on major projects, providing operating efficiencies and pull-through revenue. Most of our MPSVs have one or more deepwater cranes fitted on the deck, deploy one or more Remotely Operated Vehicles (“ROVs”) to support subsea work, and have an installed helideck to facilitate the on-/off-boarding of specialist service providers and personnel. MPSVs can also be outfitted as flotels to provide accommodations, offices, catering, laundry, medical, and recreational facilities to large numbers of offshore workers for the duration of a project. When configured as flotels, our MPSVs have capacities to house up to 245 workers for major installation, maintenance and overhaul projects. Based on overall length and total lifting capacity, the two HOS 400 class MPSVs that are currently under construction are expected to be the largest Jones Act-qualified MPSVs in the market and will have additional capabilities due to their size and sophistication. We are also in the process of converting one of our U.S.-flagged, HOSMAX 280 class OSVs into a dual-use SOV/flotel, which will be capable of providing SOV services to the U.S. offshore wind market. In addition to the services performed by our existing fleet of MPSVs, these three vessels will be equipped with systems that we expect will make them suitable for complex services, including light well intervention and offshore wind farm development, that require larger or more versatile vessels than the fleet of MPSVs currently available in the U.S. market. We expect these three MPSVs to be delivered and placed into active service in 2025.

Our ability to reconfigure or modify vessels in our fleet to meet evolving industry demands and the needs of our customers is critical to our success. This enables us to reconfigure stacked OSVs to service non-oilfield service customers. As offshore activities expand in scope and become increasingly more complex, the demand for high specification, fit-for-purpose equipment and service capabilities has accelerated, creating disproportionate competitive advantages for companies able to adapt vessels and offerings quickly to respond to changing customer needs.

With an average of over 37 years of experience in the marine transportation and service industry and having worked together at Hornbeck for over 20 years, our senior management team has the depth of experience necessary to successfully compete in the offshore vessel business. We have tremendous confidence that both our team and our strategy have been organized in a manner that best positions our Company to effectively execute in this dynamic and demanding operating environment.

Fleet Composition and Operating Regions

Hornbeck owns and operates what we believe is one of the highest specification, most technologically advanced fleets of OSVs and MPSVs in the industry. Our fleet of 75 vessels primarily operates across our core geographic markets of the United States and Latin America. We predominantly serve our oilfield customers in the U.S. GoM, the Caribbean, Northern South America and Brazil, while our vessels primarily serve our non-oilfield customers from the East and West Coasts of the United States and in the U.S. GoM. We operate our Mexican-flagged vessels across the Caribbean and Northern South America when not operated in Mexico,

as well as in other international markets, utilizing a highly-skilled workforce of Mexican mariners that have been trained in our safety systems and culture. A map illustrating our active vessel locations as of October 31, 2023 is below:

LOGO

OSV Fleet

The following table illustrates our fleet of OSVs and the nations in which they are flagged as of October 31, 2023:


Vessel Class		U.S.		Mexico		Vanuatu		Brazil		Avg DWT		Total in Class

	HOSFLEX 370		2		—		—		—		7,886		2
	HOSMAX 320		9		1		—		—		6,052		10
	HOSMAX 310		3		—		—		1		5,990		4
	HOSMAX 300		2		4		—		—		5,489		6

	HOSMAX 280		12⁽¹⁾		1		1		—		4,669		14
	HOS 270		—		2		—		—		3,803		2
	HOS 265		3		—		—		—		3,677		3

	HOS 250		3		—		—		—		2,713		3
	HOS 240		12		2		—		—		2,712		14
	HOS 200		—		2		—		—		1,729		2

Total Owned OSVs			46		12		1		1		—		60⁽³⁾

	USN T-AGSE		4		—		—		—		DP-2		4⁽⁴⁾

Total Operated OSVs			50		12		1		1		—		64

(1)	Includes the two OSVs delivered in November 2023 and the one remaining OSV expected to be delivered in the next several months through the ECO Acquisitions #2 as of such date.

(2)	Includes mid-spec vessels and low-spec vessels.

(3)	Includes 21 stacked vessels, comprised of two HOS 200s, 13 HOS 240s, three HOS 250s, two HOS 265s, and one HOSFLEX 370.

(4)	Includes four OSVs owned by the U.S. Navy, for which we provide ongoing operation and maintenance services.

MPSV Fleet

The following table illustrates our fleet of MPSVs and the nations in which they are flagged as of October 31, 2023:


Vessel Class	U.S.	Mexico	Vanuatu	DP Class	Total in Class

HOS SOV/FLOTEL⁽¹⁾	1	—	—	DP-2	1

HOS FLOTEL	1	—	—	DP-2	1

HOS 430	—	1	1	DP-3	2

HOS 400⁽²⁾	2	—	—	DP-2	2

HOS 310/310ES	4	—	—	DP-2	4

HOS 250/265	1	1	—	DP-2	2

HOS 250	1	—	—	DP-2	1

HOS 240	2	—	—	DP-2	2

Total MPSVs	12	2	1		15

(1)	Includes one HOSMAX 280 OSV currently being converted into a dual-use SOV/flotel vessel.

(2)	Includes two partially constructed Jones Act-qualified MPSV newbuilds to be completed pursuant to our settlement with the Surety, which we expect to be delivered in 2025.

Jones Act and other cabotage laws

Our U.S.-flagged vessels are all Jones Act-qualified. The majority of our U.S. operations are subject to the provisions of the Jones Act which, subject to limited exceptions, restricts maritime transportation of merchandise between points in the U.S. to vessels that are: (a) built in the United States; (b) registered under the U.S. flag; (c) crewed by U.S. citizens or lawful permanent residents; and (d) owned and operated by U.S. citizens within the meaning of the Jones Act. Based on publicly-available information compiled by the Company and data provided by Spinergie, the supply of Jones Act-qualified vessels is limited as there are only 81 active high- and ultra high-spec Jones Act-qualified OSVs in the U.S. GoM as of October 31, 2023. Of this limited supply, Hornbeck owns 23% of the market, representing the second largest such fleet in the industry. Mexico and Brazil each have their own cabotage laws that provide varying levels of insulation from foreign sources of competition that may be unwilling to contribute capital or otherwise satisfy local ownership, crewing, tax and/or build requirements. In 2023, maritime regulators in Mexico implemented new approaches in their oversight of Navieras that historically have permissible levels of non-Mexican ownership, such as ours. As a result, we took legal action in Mexico to preserve our cabotage privileges there. While a stay has been issued and we plan to prosecute our claim seeking permanent reinstatement of our Mexican cabotage privileges, we nevertheless elected to move most of our Mexican-flagged vessels into various non-Mexican international markets utilizing our highly-skilled Mexican mariners and shore-based employees. We expect that these vessels will have the opportunity to work in Mexico as the regulatory landscape for Navieras with non-Mexican ownership stabilizes. These cabotage-protected markets create meaningful barriers to entry for foreign-flagged vessels.

Customer Markets

The OSV and MPSV market has expanded rapidly since the 1970s, driven initially by growing offshore oil and gas production and more recently supported by diversified non-oilfield customer markets including military support services, renewable energy development and other non-oilfield service offerings. In response to changing market conditions and customer demand, we regularly transfer vessels between our core geographic areas and

adapt equipment and features of vessels to best meet potential revenue opportunities. Each customer market has specialized service needs and vessel requirements. For the nine months ended September 30, 2023, approximately 50% of our revenues were attributed to oil and gas drilling support activities. The remaining approximately 50% of our revenues were generated away from the drill bit, comprised of approximately 31% coming from oilfield specialty activities, including offshore construction and equipment installation, as well as decommissioning and plugging and abandonment work; approximately 17% coming from military support services and Humanitarian Aid and Disaster Relief (“HADR”); and approximately 2% coming from other non-oilfield support services, including offshore wind development, construction and support services. As we continue to diversify our customer markets, we expect the non-oilfield markets to contribute a greater portion of revenues in the future.

Oilfield Services

We predominately serve our oilfield customers in the U.S. GoM, the Caribbean, Northern South America and Brazil. Our vessels provide support to offshore oil and gas exploration and production companies in two key areas: (i) oilfield drilling support and (ii) oilfield specialty services. Drilling support provides services that are specifically related to offshore drilling and production activities. This includes the transportation of drilling equipment, such as wellheads and drill pipe, as well as drilling fluids and other bulk products used in the development of new exploration wells and their subsequent production activities. Oilfield specialty services support ongoing or recurring oilfield activities, such as equipment installation services, IRM, flowback, well testing, pipeline flushing, decommissioning, and worker accommodations and transportation. In combination, we offer our oilfield customers a comprehensive range of vessel types and service offerings that cover the entire value chain of offshore hydrocarbon development. Additionally, we operate a port facility located in Port Fourchon, Louisiana, where we are able to stage equipment and cargos in support of such services and can also perform some of our own maintenance, outfitting and other in-the-water shipyard repair activities.

Non-Oilfield Services

Military Support Services

Since our inception, we have been a prominent, private sector service provider to the U.S. military by delivering vessels that support their readiness and security. We support our government customers in two key service offerings primarily from the East and West Coasts of the United States. We provide ongoing operation and maintenance of four highly specialized OSVs (which we previously developed, constructed, and sold to the U.S. Navy) via a long-term Operations & Maintenance (“O&M”) contract. We also own, operate, and charter vessels that provide submarine supply services, rescue and recovery capabilities, transportation services and training drills. Our military service capabilities are an accelerating component of our service portfolio and military support is a customer market that is of particular importance given the stability provided by the U.S. government’s desire to execute long-term service agreements with qualified private contractors. We have received approximately $53.6 million, $65.6 million and $77.1 million of revenue for military support services for the years ended 2021 and 2022 and for the nine months ended September 30, 2023, respectively.

Renewable Energy

Renewable energy, and particularly offshore windfarms and infrastructure, is in its early stage of development in the U.S. and represents an emerging market for our services. Certain of the development and maintenance aspects of U.S. offshore windfarms will require the use of U.S.-flagged, Jones Act-qualified, high specification vessels, for which we are well-positioned to offer our services. We believe that vessels such as ours will be critical across all stages of the offshore windfarm development cycle, including installation support, geophysical survey, vessel support for testing and operations maintenance and repair. Offshore wind development and associated services represent a potential high-growth customer market for our business and our growing involvement positions our business to actively participate in the alternative energy market.

Other Non-Oilfield Services

The versatility of our vessels allows us to support communities in our core geographic areas by providing other non-oilfield services, including humanitarian aid and disaster relief, and service to the aerospace and telecommunications industries. For example, our fleet can support oil spill relief, hurricane recovery, vessel salvage and a broad range of search and rescue operations by deploying vessels to high-need areas in response to natural disasters or crises and providing those affected with lifesaving supplies and equipment. Additionally, our vessels are equipped to support aerospace launches that call for rocket component landing and recovery capabilities.

Collectively, our oilfield and non-oilfield customer markets provide a diverse platform from which we can leverage the capabilities of our vessels and creatively deploy them with customers to serve new markets or high-need service areas. We believe that the diversification benefits that come from servicing a broad range of customers reduces the potential variability in our operating performance.

Industry Overview

Offshore Exploration and Production

Over the last three decades, the offshore oil and gas industry has undergone significant technological change, marked by an ability to explore and produce hydrocarbons in deep and ultra-deepwater regions. These areas contain some of the largest hydrocarbon reserve deposits anywhere in the world with inventory that is expected to last decades.

Most deepwater offshore drilling activity is concentrated in the U.S. GoM, South America (largely dominated by Brazil and more recently, Guyana) and West Africa. Based on Rystad industry data as of September 2023, approximately 74% of global deepwater hydrocarbons are located in the GoM and South America. Moreover, per the Bureau of Safety and Environmental Enforcement (“BSEE”), average deepwater well depths have been on an upward trajectory creating significant demand for high- and ultra high-spec OSVs and MPSVs, which are well-positioned to service larger, more remote projects given their greater storage capacities, larger deck space, and industry-leading technologies.

We expect offshore drilling activity to accelerate through 2025. Offshore activity is economically advantaged with low breakeven prices. Based on Rystad industry data as of September 2023, nearly 90% of offshore proven reserves and probable reserves are economic when crude oil prices are at or below $40.00 per barrel, a level well below 2023 year-to-date prices. As a result, offshore activity is expected to accelerate and Rystad forecasts that offshore rig counts in Hornbeck’s core markets will increase approximately 19% through 2026. Contracted drilling rigs that provide exploration and drilling services to major exploration and development companies are a key leading indicator to OSV demand as each rig working to drill a well requires several OSVs to service it with equipment and supplies. The number of OSVs required to support a drilling rig depends on many factors including the type of drilling activity, the development stage of the well, and the location of the rig. Typically, during the initial drilling stage, more OSVs are required to supply drilling mud, drill pipe, and other materials than at later stages in the drilling cycle. On average, and based on recent trends in active offshore drilling rigs and OSVs, we believe a typical offshore drilling rig requires approximately three to four OSVs to provide ongoing services at any one time with select areas such as Brazil and the Caribbean generally requiring a greater number of OSVs per drilling rig due to greater logistical challenges in those markets resulting in longer vessel turnaround times.

Our fleet of vessels provides logistics support and specialty services to the offshore oil and gas exploration and production industry, primarily in the U.S. GoM, the Caribbean, Northern South America and Brazil, as well as non-oilfield specialty services for the U.S. military and other non-oilfield service customers primarily in the U.S. GoM and from the East and West Coasts of the United States. The United States, Mexico and Brazil have strict cabotage laws that provide us varying levels of insulation from foreign sources of competition that may be

unwilling to contribute capital or otherwise satisfy local ownership, crewing, tax and/or build requirements. We have vessels flagged in each of these jurisdictions and, due to treaties or other legal benefits, we are regularly able to move vessels and/or crews among these jurisdictions.

Below are more detailed descriptions of the industry dynamics impacting our core Oilfield Services operating markets:

U.S. GoM

The U.S. GoM continues to be a world-class basin, attracting significant capital from exploration and production companies. Based on Rystad industry data, U.S. GoM offshore rig counts have increased from 16 to 21 rigs from 2021 to 2023 and are expected to remain range-bound between 20 and 22 rigs through 2027. Similarly, U.S. GoM offshore well counts are expected to increase every year from 2023 through 2027 with an average CAGR of approximately 4.5%. Due to higher cost, greater complexity and longer equipment and permitting lead times compared to conventional onshore drilling, offshore projects are characterized by long cycle planning and investment. This dynamic results in greater stability and resilience through commodity price cycles. Historically, onshore rig counts are more variable during periods of commodity price volatility than offshore rig counts.

The increased focus on the need for low carbon-intensity production has also highlighted the importance of the GoM and its lower global greenhouse gas (“GHGs”) emissions intensity (CO2e/kboe) relative to other global offshore basins. According to Wood Mackenzie’s Emissions Benchmarking Tool, U.S. Gulf of Mexico Deepwater’s weighted average emissions intensity in 2023 is 8.49 tCO2e/kboe compared to a global weighted average of 20.22 tCO2e/kboe. As a result, we believe that the GoM will continue to be an area of increased investment and production by many of the large oil and gas producers.

Brazil

Based on Rystad industry data, Brazil is expected to receive the most deepwater oil and gas investment worldwide between 2024 and 2027. Brazil has seen a significant increase in investment in its upstream resources from private exploration and production companies since the 2014 downturn, when state oil company Petrobras began selective asset sales to address its balance sheet issues. Supported by the current oil price environment, many large international oil companies as well as local independents are investing in deepwater exploration and development activities. Additionally, Petrobras has publicly announced plans to spend approximately $65 billion on exploration and production activities from 2023 through 2027.

Based on Rystad industry data, the offshore rig count in Brazil is forecasted to increase to 30 rigs in 2024, a 20% increase from current levels. In addition, Rystad industry data anticipates rig count levels remaining above 2024 levels through at least 2027. The increase in activity will likely require additional vessels to mobilize to the area to support this increased drilling activity. As of October 31, 2023, four U.S. Jones Act high- and ultra high-spec vessels have relocated from the U.S. GoM to Brazil in order to fulfill the current demand in the region.

Caribbean and Northern South America

The Caribbean and Northern South America are developing markets for deepwater exploration and production. Activity in the region is primarily focused in the Guyana-Suriname basin, but also includes Colombia, Trinidad and occasionally other Caribbean islands. Due to the proximity to the U.S. GoM and the

Mexico GoM and the offshore operating environment, high-spec and ultra high-spec U.S.-flagged and Mexico-flagged OSVs are ideally suited to serve customers in this region. Currently, over 50% of the OSVs operating in the area are U.S.-flagged.

Since the discovery of the Liza-1 well in 2015, the Guyana-Suriname basin has become one of the fastest growing deepwater exploration markets in the world. In April of 2022, ExxonMobil announced the final investment decision, or FID, for the Yellowtail development offshore Guyana, which was the fourth, and largest, project in the Staebroek Block. The total investment is expected to reach $12 billion and deliver a daily output of 250,000 barrels a day. According to published data from Hess Corporation as of March 2023, ExxonMobil’s partner in the Yellowtail development, the Staebroek Block’s gross discovered recoverable resource estimate is more than 11 billion barrels of oil equivalent. Other operators, such as TotalEnergies, have announced plans to invest in the region with a FID for Block 58 in Suriname expected to be approved in 2023.

As of October 31, 2023, there were eight offshore rigs operating in this region. According to Rystad industry data, this number is expected to increase to nine offshore rigs and remain at this increased level through at least 2027. These activity levels will require additional vessels to mobilize to the area to support drilling activity. We believe that additional U.S.-flagged vessels are well-suited to support these new drilling programs. As of October 31, 2023, 19 U.S. Jones Act high- and ultra high-spec vessels have relocated from the U.S. GoM to the Caribbean and South America in order to fulfill the current demand in this region.

Non-Oilfield Services

Beyond Oilfield Services, our vessels are actively involved in the support of critical offshore activities in our core geographic regions, including military services, renewable energy development and other non-oilfield service offerings. As of October 31, 2023, 15 U.S. Jones Act-qualified high- and ultra high-spec vessels were working in military, offshore wind, aerospace or other industries. These non-oilfield markets have had a material impact on an already tight U.S. Jones Act market. Below are more detailed descriptions of the industry dynamics within each of those customer markets:

Military Support Services

The United States has relied on private vessel owners and operators comprising the U.S. Merchant Marine to provide vessels that support U.S. military readiness and security, as well as peacetime and wartime services. We provide such support primarily from the East and West Coasts of the United States. The use of specialized vessels, including OSVs and MPSVs, has increased as the broad utility of these vessels has been recognized by government customers, particularly the U.S. Navy. We believe the opportunities for additional military use could include:

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Service offerings for the U.S. Special Operations Command, the organization tasked with overseeing the various special operations of the U.S. Army, Marine Corps, Navy and Air Force;

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O&M contract opportunities; and

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Operational support for a growing fleet of U.S. Navy vessels.

Military support services represent a tremendous growth opportunity beyond the oilfield. Military business provides a diversified customer market that counterbalances oilfield volatility and generally comes with longer tenor contracts (generally more than three years). We continue to grow our military support services offerings and expect them to continue to grow in the future.

Renewable Energy Development

The offshore wind market is in its early stage of development and shows potential as an emerging market for our services in the U.S. GoM, as well as certain areas on the East and West Coasts of the United States. Field

surveying, construction and operation for offshore wind require many of the core competencies and vessel specifications used in oilfield services, creating opportunities for legacy oilfield vessel providers to service this market. Moreover, many of the wind farms developed in domestic U.S. waters will require Jones Act-qualified vessels thereby creating cabotage protections for this work.

Vessel requirements for offshore wind development typically span three distinct phases:

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Pre-Construction Surveying: This phase of development requires surveying vessels to ascertain sea bottom, sea state, and wind conditions, as well as site clearing for potential project development.

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Construction and Installation: This phase of development is the most vessel intensive and will require service vessels to execute and support a range of tasks including foundation, monopile, and wind turbine installations, cable laying, installation of electrical transmission lines between field units and the onshore/offshore electric grid, and the transportation and housing of construction and installation crews, among others.

•

Ongoing Service and Maintenance: This phase will require vessels to provide ongoing service and maintenance to offshore wind infrastructure assets including crew and equipment transfers, asset retrofitting and replacement, and ongoing infrastructure monitoring services.

The U.S. offshore wind market is forecasted to grow. In 2021, the Biden Administration released its Offshore Wind Energy Strategy outlining its goal of deploying 30 gigawatts of offshore wind in the United States by 2030. Based on the DoE Report, estimated installations of U.S. offshore wind assets are expected to accelerate from approximately 130 megawatts in 2023 to approximately 6,500 megawatts in 2027. According to the BOEM, 59 wind energy lease areas have been identified along U.S. coastlines and the Great Lakes with more than 50 locations already having named lease holders. Of that, 21 offshore wind projects have already been sanctioned along the U.S. East Coast with more expected as the U.S. economy attempts to transition its energy mix to a higher percentage of renewable energy sources. Additionally, five lease sales on the West Coast of the United States are expected to require floating installation capabilities and vessels which Hornbeck’s fleet is capable of providing.

Other Non-Oilfield Services

We have multiple areas of growth in other non-oilfield services including:

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Humanitarian Aid and Disaster Relief: Because of the versatility of our vessels, we are often contracted as part of the response to an offshore crisis, including as service support for the Federal Emergency Management Agency. In the past, we have supported oil spill relief, non-oilfield hurricane relief, aircraft disasters, vessel and other equipment salvage and other post-disaster recovery efforts.

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Aerospace: Our vessels are equipped to support aerospace launches that call for rocket component landing and recovery capabilities. In addition, we have supported the aerospace industry through vessel crewing and other vessel management agreements.

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Telecommunications: Our vessels can also be retrofitted to support the installation, testing and retrieval of fiber optic cable.

Our Competitive Strengths

Leading presence in the United States and Latin America

Hornbeck was established in 1997 and has one of the most capable and high-spec fleets of vessels in the industry. Based on publicly-available information compiled by the Company and data provided by Spinergie, we

believe that our fleet of 41 high-spec and ultra high-spec OSVs, totaling 217,184 in DWT capacity, represents 6.3% of the 3,429,535 total DWT of such vessels in the world, making Hornbeck the third largest fleet out of 169 companies that own and operate high-spec and ultra high-spec OSVs worldwide. Furthermore, we believe that our fleet of 14 U.S.-flagged ultra high-spec OSVs, totaling 83,250 in DWT capacity, represents the largest fleet of such vessels operating in the United States measured by DWT capacity. Additionally, we are one of the top operators of OSVs, based on DWT, in each of our two core geographic markets, which include 2,424,266 DWT and constitute 41.3% of the global supply of 5,864,666 DWT to such markets. Our 46 U.S.-flagged OSVs, totaling 206,806 in DWT capacity, comprise the second largest fleet of technologically advanced, OSVs qualified for work in the U.S. GoM under the Jones Act. As of October 31, 2023, our active fleet of OSVs and MPSVs consisted of (i) 18 U.S.-flagged OSVs and seven MPSVs in the U.S. GoM, (ii) four OSVs and one MPSV in the U.S. Atlantic, (iii) one OSV and two MPSVs in the U.S. Pacific, (iv) five OSVs in offshore Brazil, (v) four OSVs and one MPSV in the Caribbean and Northern South America and (vi) one OSV in offshore Africa. We believe that having scale in our core markets with the flexibility to transfer vessels among regions benefits our customers and provides us with operating efficiencies.

Large and diverse fleet of technologically advanced high-spec vessels

Over the past 26 years, we have assembled a multi-class fleet of 60 OSVs and 15 MPSVs. Since 2014, we have focused on expanding our line of high-spec and ultra high-spec vessels, increasing our fleet of such vessels from 41% of our fleet in 2014 to 75% of our fleet in 2023. These high-spec and ultra high-spec vessels incorporate sophisticated technologies, are designed specifically to operate safely in complex and challenging environments and are equipped with specialty equipment and other features to respond to the needs of our customers through the project development and operation lifecycle. These technologies include dynamic positioning, roll reduction systems and controllable pitch thrusters, which allow our vessels to maintain position with minimal variance, and our cargo handling systems, which permit high volume transfer rates of liquid mud and dry bulk materials. In addition, we are able to outfit our vessels with specialty equipment and certain features as needed for specific projects. The greater fuel efficiency, larger carrying capacity size, advanced mud-handling systems and other high-spec features that reduce project downtime create a compelling value proposition. As a result, we believe that we earn higher average day-rates when compared to our competitors. According to industry data from Fearnley Offshore Supply, our average dayrates were 58%, 87%, and 48% higher than those of comparably sized vessels owned by other operators in 2021, 2022, and the nine months ended September 30, 2023, respectively.

Strong market position due to qualification under the Jones Act and favorable sector tailwinds

As a leader in marine transportation services to the offshore oilfield industry, we believe Hornbeck is well-positioned to capitalize on favorable industry conditions for significant growth opportunities, particularly in offshore wind development and support services to the U.S. military on the East and West Coasts of the United States. The United States has strict cabotage laws that provide some insulation from foreign sources of competition. In addition, the U.S. high-spec and ultra high-spec vessel supply is highly restricted with long lead times for new construction. High newbuild costs result in unfavorable economics for newbuilds, which is exacerbated by limited pools of available capital to make investments into new fleet construction. We believe our reputation for high-quality, safe and reliable operations, complex problem solving, operational flexibility, and world-class vessels allows Hornbeck to compete effectively for and retain qualified mariners, which positions Hornbeck for long-term sustainable growth in a tight labor market. In addition, our robust offering of services, ranging from initial construction to decommissioning, has allowed us to compete effectively and remain a trusted service provider for active offshore companies as well as the U.S. military.

Successful track record of strategic vessel acquisitions

We have built our fleet through a combination of new builds and strategic acquisitions from other operators. Our management team’s extensive naval architecture, marine engineering and shipyard experience has enabled us to quickly integrate newly acquired vessels into our fleet and retrofit them to meet our quality standards and customer needs cost-effectively. From time to time, we consider opportunistic acquisitions of single vessels, vessel fleets, and businesses that strategically complement our existing operations to enable us to grow our business and better serve our customers. Since 2017, we have successfully completed and have agreements to acquire 19 vessels, 13 of which are currently operating as part of our high-spec fleet and six of which are yet to be placed in service or delivered.

Diversified service offerings and customer markets provide stability to cash flows

We have well-established relationships with leading oilfield and non-oilfield companies and the U.S. government and believe such relationships are in part maintained because of our diversified service offerings in the oilfield and non-oilfield customer markets. Our diversified service offerings allow us to pivot based on our customers’ needs and gives our customers confidence to commit to longer-term contracts for our services, which provides us with cash flow stability. Additionally, these large, integrated customers are financially stable and can better withstand economic or market downturns in a volatile market, and we believe maintaining relationships with these customers will ultimately result in better visibility to vessel utilization and greater liquidity for us in the future.

Experienced management team with proven track record

Our founder-led executive management team has an average of over 37 years of domestic and international marine transportation industry-related experience and has worked together at the Company for over 20 years. Our team is comprised of individuals with extensive, global experience with backgrounds across many diverse fields including engineering, project management, military service, finance, accounting and corporate leadership. We believe that our team has successfully demonstrated its ability to grow our fleet through new construction and strategic acquisitions and to secure profitable contracts for our vessels in both favorable and unfavorable market conditions in domestic and foreign markets.

Attractive growth opportunities

Our fleet of technologically advanced high-spec and ultra high-spec vessels is increasingly being deployed to serve the accelerating needs of the U.S. Military, renewable energy, and aerospace industries. These high-growth markets require U.S.-flagged Jones Act-qualified vessels, which can be custom tailored to address a broad spectrum of services. For these applications, our vessels are typically contracted for greater than three years, providing a counter-balance to cyclicality experienced in our oilfield segments.

Our Strategy

Leverage our geographic presence in the United States and Latin America and grow industry leading service capabilities

We have strategically chosen to focus our efforts in two core geographic markets, the United States and Latin America. While the U.S. GoM will continue to be a priority for us, in recent years we expanded our presence in each of the Mexico GoM, the East and West Coasts of the United States, the Caribbean, Northern South America and Brazil as we anticipate long-term growth in those markets. Given the relative proximity of these markets, we are able to readily move our vessels among them and retain flexibility to relocate those vessels back to U.S. GoM. We believe this will allow us to conduct a more thorough on-going alternative analysis for

vessel deployments among such markets and, thus, better manage our portfolio of contracts to enhance dayrates and utilization over time as contracting opportunities arise. Our Jones Act-qualified high-spec and ultra high-spec OSVs account for approximately 26% of the total industry supply of such vessels. Our vessels have been adapted to operate in a range of oilfield specialty configurations, including flotel services, extended-reach well testing, seismic, deepwater well stimulation, other enhanced oil recovery activities, high pressure pumping, deep-well mooring, ROV support, subsea construction, installation, IRM work and decommissioning services. We are also growing our diverse non-oilfield specialty services, such as military applications, offshore wind farms, oceanographic research, telecommunications, and aerospace projects.

Pursue differentiated customer offerings to optimize utilization and free cash flow generation

We seek to balance and diversify our service offerings to customers, to optimize our vessel utilization and stabilize our free cash flow generation. For example, in addition to our long-term charters in oilfield services and with military and renewable energy customers that contribute to contracted backlog and provide utilization stability, we also seek out short-term charters such as spot oilfield services that typically have higher dayrates. This contracting strategy balances our financial profile between longer-term charters and the flexibility to capture current market dayrates for a portion of our fleet. Our current contracting approach allows us to consistently perform well against our OSV peers when comparing average OSV dayrates and gross margins. The flexibility of our vessel capabilities is designed to optimize our utilization and allows us to pivot in response to market conditions and customer needs, which can lead to more stable free cash flow generation.

Apply existing, and develop new, technologies to meet our customers’ vessel needs and expand our fleet offerings

Our in-house engineering team has been instrumental in applying existing, and developing new, technologies that meet our customers’ vessel needs and provide us with the opportunity to enter new customer markets. For instance, our OSVs and MPSVs are designed to meet the higher capacity and performance needs of our oilfield clients’ increasingly complex drilling and production programs and the diverse needs of our U.S. military, renewable energy and humanitarian aid and disaster relief customers. Further, we are able to reconfigure or retrofit existing assets with existing or new technology to participate in new customer markets such as offshore wind, aerospace and telecommunications. Specifically, we are currently deploying capital to upgrade certain of our vessels to dual service capabilities to better service the oilfield services market as well as the emerging offshore wind market. We remain committed to applying existing and developing new technologies to maintain a technologically advanced fleet that will enable us to continue to provide a high level of customer service and meet the developing needs of our customers.

Focus on selective acquisitions that are strategically and financially accretive

We seek to opportunistically grow our fleet through strategic and financially accretive acquisitions. Our screening criteria focuses on expanding the depth and breadth of our fleet mix as well as diversifying service offerings in our core markets. From time to time, we consider opportunistic acquisitions of single vessels, vessel fleets, and businesses that strategically complement our existing operations to enable us to grow our business and better serve our customers. For example, we recently entered into separate definitive vessel purchase agreements to acquire 12 high-spec OSVs, which we refer to as the ECO Acquisitions.

Maintain a conservative balance sheet, disciplined growth, and robust free cash flow generation through cycles

We adhere to financial principles designed to maintain a conservative balance sheet, disciplined growth, and robust free cash flow generation. Our balance sheet strategy targets less than 1.0x leverage with ample excess liquidity available to withstand industry cycles or take advantage of disciplined growth opportunities.

Our growth strategy involves a disciplined screening of opportunities for differentiated assets that create competitive advantages and is focused on returns and payback periods. Our cash flow generation abilities are centered around maintaining flexible costs and lean organizational structures that seek efficiencies through continuous operational improvement and working capital management.

Continued commitment to sustainability and safety

Safety is of great importance to us and offshore operators due to the environmental and regulatory sensitivity associated with offshore drilling and production activity and wind development. We believe certain of our efforts, such as adopting shipboard energy efficiency management plans, installing emission monitoring systems and pursuing other operational efficiencies, have been successful, allowing us to meet our customers’ needs while supporting our efforts to reduce our emissions of GHG. Additionally, since 2020, our focus on safely addressing operational risk has contributed to maintaining an industry-low total recordable incident rate. Our most recent 5-year average Total Recordable Incident Rate (“TRIR”) was 0.10, outperforming peer averages from the International Marine Contractors Association (“IMCA”) and International Support Owners Association (“ISOA”). Further, in addition to industry standard certifications, as part of our commitment to safety and quality, we have voluntarily pursued and received certifications and classifications that we believe are not generally held by other companies in our industry. We believe that customers recognize our relentless commitment to safety, which contributes to our positive reputation and competitive advantage.

Recent Developments

Resumption of MPSV Newbuild Construction

In October 2023, the Company entered into a final settlement agreement with the Surety and Gulf Island. Pursuant to the settlement agreement, Gulf Island released all claims asserted against the Company and the Company released its claims against Gulf Island and the Surety. Further, the Surety agreed to take over and complete the construction of the two U.S.-flagged, Jones Act-qualified, HOS 400 class MPSVs at a shipyard acceptable to the Company. The Company is obligated to pay only the remaining portion of the original shipyard contract price for the two MPSVs, which amounts to $53.8 million in the aggregate. The Surety is required to cure all defaults of Gulf Island and pay all completion costs in excess of the $53.8 million remaining contract price, excluding approved change orders. The Company expects to incur an additional $30.0 million in the aggregate for discretionary enhancements to add secondary cranes to both vessels. Pursuant to the settlement, the Surety is required to deliver both MPSVs in 2025.

Repayment of Replacement First Lien Term Loans

In August 2023, the Company fully repaid the $68.7 million outstanding principal balance of the Replacement First Lien Term Loans and terminated the First Lien Credit Agreement. As a result, the Company recorded a $1.2 million loss on early extinguishment of debt, primarily related to the write-off of associated deferred issuance costs and original debt issue discount.

ECO Acquisitions

ECO Acquisitions #1

On January 10, 2022, the Company entered into separate definitive vessel purchase agreements with certain affiliates of ECO to acquire up to ten high-spec, 280 class DP-2 OSVs for an aggregate price of $130.0 million. In November 2022, ECO exercised an option to terminate the vessel purchase agreements relating to the last four vessels. ECO refunded initial deposits of $1.5 million in the aggregate and paid an additional amount equal to such deposits as a termination fee. After accounting for such terminations and certain purchase price adjustments,

the aggregate purchase price for the ECO Acquisitions #1 was $82.4 million. Pursuant to the purchase agreements, final payment and the transfer of ownership of each of the vessels occurred on the date of delivery and acceptance for such vessel following the completion of reactivation and regulatory drydockings by ECO. The Company took delivery of the first four vessels between May and December 2022. The Company took delivery of the remaining two vessels from ECO in April and August 2023, respectively.

As of September 30, 2023, the Company had paid $82.2 million on the original purchase price and $1.7 million in purchase price adjustments associated with discretionary enhancements of the ECO Acquisitions #1 vessels, prior to the effect of the $1.5 million termination fee paid by ECO. In addition, the Company had incurred $4.2 million of costs associated with additional outfitting of the six vessels through the third quarter of 2023. The Company expects to incur an additional $0.6 million related to post-closing modifications of the sixth vessel during the fourth quarter of 2023. See “Management’s Discussion and Analysis of Financial Condition and Results of Operations—Liquidity and Capital Resources—Capital Expenditures.”

ECO Acquisitions #2

On December 22, 2022, the Company executed a controlling purchase agreement with Nautical. Pursuant to the controlling purchase agreement, the Company subsequently entered into separate, individual vessel purchase agreements to acquire six high-spec OSVs from Nautical for $17.0 million per vessel. The Nautical vessels are U.S.-flagged, Jones Act-qualified, 280 class DP-2 OSVs with cargo-carrying capacities of circa 4,750 DWT. Nautical is required to complete regulatory drydocking and reactivation activities for each vessel prior to closing. Payment of 10% of the purchase price for each vessel has been paid upon arrival of such vessel to the shipyard and the remaining 90% has been or will be paid at closing and delivery of each vessel. The closing of the first five vessel purchases occurred one at a time in serial deliveries and delivery of the sixth vessel is expected to be completed by December 31, 2023, but due to supply chain constraints such delivery could extend into early 2024. In addition to the aggregate purchase price of $102.0 million, the Company expects to incur an additional $9.3 million related to the outfitting and discretionary enhancement of these six vessels.

During the third quarter of 2023, the Company took delivery of the first two vessels and paid $15.3 million each for the remaining 90% of the original purchase price and $0.2 million per vessel for purchase price adjustments related to discretionary enhancements completed in the shipyard by Nautical. As of September 30, 2023, the Company had paid $40.8 million toward the original purchase price and $0.4 million in purchase price adjustments associated with discretionary enhancements for the ECO Acquisitions #2 vessels. In addition, the Company had incurred $2.3 million of costs associated with additional outfitting of the six vessels through the third quarter of 2023.

In October 2023, the Company took delivery of the third vessel and paid $15.3 million for the remaining 90% of the original purchase price and $0.1 million for purchase price adjustments related to discretionary enhancements. As of October 31, 2023, the Company expected to incur the remaining purchase price of $45.9 million and $6.9 million related to additional outfitting and discretionary enhancements during the fourth quarter of 2023 with respect to the two vessels delivered in November 2023 and assuming the one remaining vessel is delivered by December 31, 2023.

Ongoing Acquisition/Investment Activities

We regularly evaluate additional acquisition opportunities and frequently engage in discussions with potential sellers. We are currently focused on pursuing acquisition opportunities that will further diversify our vessel holdings and the specialty services we offer. The timeline required to negotiate and close on any one or more acquisition opportunities is at times unpredictable and can vary greatly.

Our acquisitions may require material investments and could result in significant modifications to our capital plans, both in the aggregate amount of capital expenditures to be made and a reallocation of capital. Our acquisitions (including the ECO Acquisitions) are typically made for a purchase price which historically we have funded with a combination of borrowings, cash generated from operations and debt and/or equity issuances.

We typically do not announce a transaction until after we have executed a definitive agreement. In certain cases, in order to protect our business interests or for other reasons, we may defer public announcement of a transaction until closing or a later date. Past experience has demonstrated that discussions and negotiations regarding a potential transaction can advance or terminate in a short period of time. Moreover, the closing of any transaction for which we have entered into a definitive agreement may be subject to customary and other closing conditions, which may not ultimately be satisfied or waived. Accordingly, we can give no assurance that our current or future acquisition or investment efforts will be successful.

Risk Factors Summary

Our business is subject to numerous risks and uncertainties, including, but not limited to, those highlighted in the section titled “Risk Factors” and summarized below. We have various categories of risks, including risks relating to our business; risks relating to legal, regulatory, accounting and tax matters; risks relating to our indebtedness; and risks relating to this offering and ownership of our common stock, which are discussed more fully in the section titled “Risk Factors.” As a result, this risk factor summary does not contain all of the information that may be important to you, and you should read this risk factor summary together with the more detailed discussion of risks and uncertainties set forth in the section titled “Risk Factors.” These risks include, but are not limited to, the following:

Risks Relating to Our Business

•

We derive substantial revenues from companies in the oil and natural gas exploration and production industry, which is a historically cyclical industry with levels of activity that are directly affected by the levels and volatility of oil and natural gas prices.

•

Our operations may be impacted by changing macroeconomic conditions, including inflation.

•

Ongoing and future acquisitions by us may create additional risks.

•

We must continue to comply with the Jones Act’s citizenship requirements.

•

Imposition of laws, executive actions or regulatory initiatives to restrict, delay or cancel leasing, permitting or drilling activities in deepwaters of the U.S. or foreign countries may reduce demand for our services and products and have a material adverse effect on our business, financial condition or results of operations.

•

We may not be able to complete the construction of our remaining two newbuilds and may experience delays related to such newbuilds.

•

We operate in a highly competitive industry.

•

In addition to industry concentrations, we have certain customer concentrations, and the loss of a significant customer would adversely impact our financial results.

•

The early termination of or inability to renew contracts for our vessels could have an adverse effect on our operations.

•

Our contracts with the United States government might not be renewed, or may impose additional requirements.

•

Our operations in international markets and shipyard activities in foreign shipyards subjects us to risks inherent in conducting business internationally.

•

Our operations may be materially adversely affected by tropical storms and hurricanes.

•

Our business may be subject to risks related to climate change, including physical risks such as increased adverse weather patterns and transition risks such as evolving climate change regulation, alternative fuel measures and/or mandates, shifting consumer preferences, technological advances and negative shifts in market perception towards the oil and natural gas industry and associated businesses, any of which could result in increased operating expenses and capital costs or decreased resources and adversely affect our financial results.

Risks Relating to Our Legal, Regulatory, Accounting and Tax Matters

•

We may be unable to maintain an effective system of disclosure controls and procedures or internal control over financial reporting and produce timely and accurate financial statements or comply with applicable regulations.

•

Changes in tax laws could adversely affect our business, financial condition and results of operations.

•

We are subject to various anti-corruption laws and regulations and laws and regulations relating to economic sanctions. Violations of these laws and regulations could have a material adverse effect on our business, financial condition and results of operations.

Risks Relating to Our Indebtedness

•

We may not be able to generate sufficient cash to service all of our indebtedness or repay such indebtedness when due and may be forced to take other actions to satisfy our obligations under our indebtedness, which may not be successful.

•

Despite our current level of indebtedness, we and our subsidiaries may still be able to incur substantially more debt. This could further exacerbate the risks to our financial condition described herein.

•

Our indebtedness could materially adversely affect our financial condition.

Risks Related to this Offering and Ownership of Our Common Stock

•

Our common stock is subject to restrictions on foreign ownership and possible divestiture by non-U.S. Citizen stockholders.

•

We will incur significantly increased costs and become subject to additional regulations and requirements as a result of becoming a public company, and our management will be required to devote substantial time to new compliance matters, which could lower our profits or make it more difficult to run our business.

•

Risk of concentration of stockholder control.

•

Anti-takeover provisions in our organizational documents could delay or prevent a change of control.

Additional risks, beyond those summarized above or discussed elsewhere in this prospectus, may apply to our business, activities or operations as currently conducted or as we may conduct them in the future or in the markets in which we operate or may in the future operate.

If we are unable to adequately address these and other risks we face, our business, results of operations, financial condition and prospects may be harmed. You should carefully consider all of the information set forth in this prospectus and, in particular, should evaluate the specific factors set forth under “Risk Factors” in deciding whether to invest in our common stock.

Organizational Structure

The following diagram illustrates our organizational structure after giving effect to this offering and the application of proceeds therefrom.

LOGO

(1)	Our principal stockholders consist of our three largest stockholders, funds, investment vehicles or accounts managed or advised by Ares, Whitebox or Highbridge or their respective affiliates. For more information, see “—Principal and Selling Stockholders.”

Our Principal Stockholders

Our principal stockholders consist of our three largest stockholders (funds, investment vehicles or accounts managed or advised by Ares, Whitebox or Highbridge or their respective affiliates), who currently collectively own 63.6% of our common stock and 85.9% of our Jones Act Warrants, which are convertible under certain circumstances into 9,767,165 shares of our common stock. On a diluted basis, after giving effect to the conversion of these Jones Act Warrants and this offering and the application of proceeds therefrom, the principal stockholders would own % of our common stock.

Ares Management Corporation (NYSE: ARES) (“Ares”) is a leading global alternative investment manager offering clients complementary primary and secondary investment solutions across the credit, private equity, real estate and infrastructure asset classes. Ares seeks to provide flexible capital to support businesses and create

value for its stakeholders and within its communities. By collaborating across its investment groups, Ares aims to generate consistent and attractive investment returns throughout market cycles. As of September 30, 2023, Ares’ global platform had approximately $395 billion of assets under management, with approximately 2,800 employees operating across North America, Europe, Asia Pacific and the Middle East.

Whitebox Advisors LLC (“Whitebox”) is a multi-strategy alternative asset manager that seeks to generate optimal risk-adjusted returns for a diversified base of public institutions, private entities and qualified

individuals. Founded in 1999, Whitebox invests across asset classes, geographies, and markets through the hedge fund vehicles and institutional accounts that it advises. The firm maintains offices in Minneapolis, Austin,

New York, London and Sydney.

Highbridge Capital Management (“Highbridge”) is a global alternative investment firm offering credit and volatility focused solutions across a range of liquidity and investment profiles, including hedge funds, drawdown

vehicles, and co-investments. Highbridge manages capital for sophisticated investors, which include financial institutions, public and corporate pension funds, sovereign wealth funds, endowments, and family offices. Highbridge is headquartered in New York, with a research presence in London. Highbridge is an indirect subsidiary of J.P. Morgan Chase & Co.

We use the term “principal stockholders” in this prospectus to describe certain funds, investment vehicles or accounts managed or advised by Ares, Whitebox or Highbridge or their respective affiliates that own shares of our common stock.

Company Corporate Information

Hornbeck Offshore Services, Inc. was incorporated under the laws of the State of Delaware on June 2, 1997. Our principal executive offices are located at 103 Northpark Boulevard, Suite 300, Covington, LA 70433, and our telephone number is (985) 727-2000. Our website address is www.hornbeckoffshore.com. Information contained on, or that can be accessed through, our website is not part of and is not incorporated by reference into this prospectus, and you should not consider information on our website to be part of this prospectus.

The Offering

Common stock offered by us

shares.

Common stock offered by the selling stockholders

shares.

Option to purchase additional shares of common stock

We and the selling stockholders have granted the underwriters an option for a period of 30 days from the date of this prospectus to purchase an aggregate of up to additional shares of common stock from us, less underwriting discounts and commissions.

Common stock outstanding after this offering

shares (or shares if the underwriters exercise in full their option to purchase additional shares of common stock from us).

Use of proceeds

We estimate that the net proceeds to us from this offering, after deducting estimated underwriting discounts and commissions and estimated offering expenses payable by us, will be approximately $ million (or approximately $ million if the underwriters exercise in full their option to purchase additional shares of common stock from us), assuming an initial public offering price of $ per share (which is the midpoint of the estimated offering price range shown on the cover page of this prospectus). For a sensitivity analysis as to the offering price and other information, see “Use of Proceeds.”

We intend to use the net proceeds to us from this offering for general corporate purposes. We will not receive any proceeds from the sale of shares in this offering by the selling stockholders.

Dividend policy

We do not currently anticipate paying any dividends on our common stock immediately following this offering. We expect to retain all future earnings for use in the operation and expansion of our business. Following this offering and upon repayment of certain outstanding indebtedness, we may reevaluate our dividend policy. Any decision to declare and pay dividends in the future will be made at the sole discretion of our Board of Directors and will depend on various factors. See “Dividend Policy.”

Risk factors

See “Risk Factors” for a discussion of risks you should carefully consider before deciding to invest in our common stock.

Listing

We intend to apply to have our common stock approved for listing on the NYSE under the symbol “HOS.”

Unless otherwise indicated or the context otherwise requires, all information in this prospectus reflects and assumes the following:

•

no exercise by the underwriters of their option to purchase additional shares of common stock from us or from the selling stockholders; and

•

an initial offering price of $ per share of common stock (which is the midpoint of the estimated offering price range shown on the cover page of this prospectus).

Additionally, the number of shares of our common stock to be outstanding after this offering is based on shares of our common stock outstanding as of September 30, 2023 and does not reflect:

•

shares of common stock that may be issued upon exercise of outstanding Jones Act Warrants and Creditor Warrants, at an exercise price of $0.00001 per share and $27.83 per share, respectively;

•

shares of common stock that may be issued upon the exercise of outstanding options at an average weighted exercise price of $10.00 or the vesting of restricted stock units issued under our 2020 Management Incentive Plan; and

•

shares of common stock that may be issued pursuant to future awards under our 2020 Management Incentive Plan or our 2023 Equity Incentive Plan to be in effect following this offering.

Summary Historical Financial and Other Data

The summary consolidated statement of operations data for the nine months ended September 30, 2023 and 2022 have been derived from our Quarterly Financial Statements included elsewhere in this prospectus. The summary consolidated statement of operations data for the year ended December 31, 2022, the year ended December 31, 2021, for the period from September 5, 2020 to December 31, 2020 (Successor), and for the period from January 1, 2020 to September 4, 2020 (Predecessor), when our Predecessor emerged from bankruptcy, are derived from our Annual Financial Statements included elsewhere in this prospectus.

Our historical results are not necessarily indicative of the results to be expected in any future period. You should read the following summary financial and other data in conjunction with the sections titled “Management’s Discussion and Analysis of Financial Condition and Results of Operations” and our Financial Statements and related notes included elsewhere in this prospectus.


	Successor											Predecessor
*(dollars in thousands)*	Nine Months Ended September 30, 2023		Nine Months Ended September 30, 2022		Year Ended December 31, 2022		Year Ended December 31, 2021		Period from September 5, 2020 through December 31, 2020			Period from January 1, 2020 through September 4, 2020
Statement of Operations Data:
Revenues:
Vessel revenues	$	405,623	$	284,398	$	406,034	$	214,680	$	50,971		$	94,520
Non-vessel revenues		32,965		33,927		45,192		41,620		12,815			26,274

		438,588		318,325		451,226		256,300		63,786			120,794
Costs and expenses:
Operating expense		221,532		153,863		214,788		142,819		39,565			90,674
Depreciation expense		18,730		13,016		18,601		15,672		5,016			65,705
Amortization expense		15,981		6,910		10,339		2,711		—			12,845
General and administrative expense		48,565		42,201		58,946		40,632		11,593			33,261
Stock-based compensation expense		17,270		3,468		5,330		3,372		1,503			1,969
Restructuring costs		—		—		—		—		—			34,491
Terminated debt refinancing costs		3,673		—		—		—		—			—

		325,751		219,458		308,004		205,206		57,677			238,945

Gain on sale of assets		2,667		14,544		21,837		2,679		—			—

Operating income (loss)		115,504		113,411		165,059		53,773		6,109			(118,151	)
Net interest expense		24,788		28,392		38,340		35,284		10,673			39,516
Other expense, net		28,371		23,348		38,783		13,969		3,988			1,132,601

Income (loss) before income taxes		62,345		61,671		87,936		4,520		(8,552	)		(1,290,268	)
Income tax expense (benefit)		15,394		2,764		7,174		1,533		1,307			(135,721	)

Net income (loss)	$	46,951	$	58,907	$	80,762	$	2,987	$	(9,859	)	$	(1,154,547	)


*(dollars in thousands)*	September 30, 2023		September 30, 2022		December 31, 2022		December 31, 2021
Balance Sheet Data (at period end):
Cash and cash equivalents	$	146,298	$	154,883	$	217,303	$	180,446
Total Current Assets		308,407		288,365		357,933		268,331
Property, plant and equipment, net		553,020		439,739		449,249		329,732
Total assets		921,129		776,591		860,220		636,886
Total current liabilities		119,743		91,370		88,203		58,962
Total long-term debt, net of original issue discount and deferred financing costs		349,001		366,107		410,258		347,237
Total liabilities		590,116		530,009		589,388		453,013
Total stockholders’ equity		331,013		246,582		270,832		183,873


	Successor															Predecessor
*(dollars in thousands)*	Nine Months Ended September 30, 2023			Nine Months Ended September 30, 2022			Year Ended December 31, 2022			Year Ended December 31, 2021			Period from September 5, 2020 through December 31, 2020			Period from January 1, 2020 through September 4, 2020
Statement of Cash Flows Data
Net Cash provided by (used in):
Operating activities	$	114,714		$	68,192		$	112,967		$	49,611		$	(5,975	)	$	(77,885	)
Investing activities		(109,882	)		(89,617	)		(109,157	)		(4,124	)		(911	)		(4,445	)
Financing activities		(75,818	)		(4,332	)		32,875			37,624			—			14,927
Other Financial Data (unaudited):
EBITDA	$	121,844		$	109,989		$	155,216		$	58,187		$	7,137		$	(1,172,202	)
Adjusted EBITDA		178,432			139,197			204,830			77,219			12,750			(2,248	)
Adjusted Free Cash Flow		119,685			112,815			171,284			47,726			9,793			(22,755	)
Capital expenditures		133,679			121,001			151,196			21,382			997			13,749

Non-GAAP Financial Measures

We disclose and discuss EBITDA, Adjusted EBITDA and Adjusted Free Cash Flow as non-GAAP financial measures in this prospectus. We define EBITDA as earnings (net income or loss) before interest, income taxes, depreciation and amortization. Adjusted EBITDA reflects certain adjustments to EBITDA for gains or losses on early extinguishment of debt, terminated debt refinancing costs, stock-based compensation expense and interest income. In addition, Adjusted EBITDA excludes non-cash gains or losses on the fair value adjustment of liability-classified warrants, as well as restructuring costs and reorganization items, net related to the Company’s voluntary relief in 2020 under Chapter 11 of the U.S. Bankruptcy Code and the application of fresh-start accounting under ASC 852, Reorganizations. We define Adjusted Free Cash Flow as Adjusted EBITDA less cash paid for deferred drydocking charges, maintenance capital improvements and non-vessel capital expenditures, cash paid for interest and cash paid for (refunds of) income taxes. Our measures of EBITDA, Adjusted EBITDA and Adjusted Free Cash Flow may not be comparable to similarly titled measures presented by other companies. Other companies may calculate EBITDA, Adjusted EBITDA and Adjusted Free Cash Flow differently than we do, which may limit their usefulness as comparative measures.

provided by operating activities. Because EBITDA, Adjusted EBITDA and Adjusted Free Cash Flow are not measures calculated in accordance with GAAP, they should not be considered in isolation or as a substitute for operating income, net income or loss, cash flows provided by operating, investing and financing activities, or other income or cash flow statement data prepared in accordance with GAAP. Additionally, Adjusted Free Cash Flow does not represent the total increase or decrease in our cash balance, and it should not be inferred that the entire amount of Adjusted Free Cash Flow is available for dividends, debt or share repurchases or other discretionary expenditures, since we have non-discretionary expenditures that are not deducted from this measure.

EBITDA, Adjusted EBITDA and Adjusted Free Cash Flow are widely used by investors and other users of our financial statements as supplemental financial measures that, when viewed with our GAAP results and the accompanying reconciliations, we believe provide additional information that is useful to gain an understanding of the factors and trends affecting our ability to service debt, pay taxes and fund drydocking charges, maintenance capital improvements and non-vessel capital expenditures. We also believe the disclosure of EBITDA, Adjusted EBITDA and Adjusted Free Cash Flow helps investors or lenders meaningfully evaluate and compare our cash flow generating capacity from quarter to quarter and year to year.

The following tables reconcile cash flows provided by (used in) operating activities to EBITDA, Adjusted EBITDA and Adjusted Free Cash Flow, as we define those terms, for the nine months ended September 30, 2023 and 2022, and the year ended December 31, 2022 (Successor), the year ended December 31, 2021 (Successor), the period from September 5, 2020 through December 31, 2020 (Successor) and the period from January 1, 2020 through September 4, 2020 (Predecessor), respectively:


	Successor															Predecessor
*(dollars in thousands)*	Nine Months Ended September 30, 2023			Nine Months Ended September 30, 2022			Year Ended December 31, 2022			Year Ended December 31, 2021			Period from September 5, 2020 through December 31, 2020			Period from January 1, 2020 through September 4, 2020
EBITDA Reconciliation to GAAP:
Net cash flows provided by (used in) operating activities	$	114,714		$	68,192		$	112,967		$	49,611		$	(5,975	)	$	(77,885	)
Cash paid for deferred drydocking charges		20,939			16,118			19,114			14,113			86			9,304
Cash paid for interest		25,692			5,417			8,868			8,467			1,731			14,781
Cash paid for (refunds of) income taxes		5,815			129			474			2,399			463			(3,930	)
Changes in operating assets and liabilities		(2,136	)		33,503			38,738			(560	)		12,328			(1,108,267	)
Stock-based compensation expense		(17,270	)		(3,468	)		(5,330	)		(3,372	)		(1,503	)		(1,969	)
Amortization of deferred contract-specific costs of sales		(753	)		—			—			—			—			—
Fair value adjustment of liability-classified warrants		(26,588	)		(24,404	)		(41,408	)		(15,150	)		7			—
Loss on early extinguishment of debt, net		(1,236	)		(42	)		(44	)		—			—			(4,236	)
Gain (loss) on sale and disposal of assets		2,667			14,544			21,837			2,679			—			—

EBITDA	$	121,844		$	109,989		$	155,216		$	58,187		$	7,137		$	(1,172,202	)

Adjusted EBITDA Reconciliation to GAAP:
Net cash flows provided by (used in) operating activities	$	114,714		$	68,192		$	112,967		$	49,611		$	(5,975	)	$	(77,885	)
Cash paid for deferred drydocking charges		20,939			16,118			19,114			14,113			86			9,304
Cash paid for interest		25,692			5,417			8,868			8,467			1,731			14,781
Cash paid for (refunds of) income taxes		5,815			129			474			2,399			463			(3,930	)
Changes in operating assets and liabilities		(2,136	)		33,503			38,738			(560	)		12,328			(1,108,267	)
Amortization of deferred contract-specific costs of sales		(753	)		—			—			—			—			—
Interest income		7,821			1,294			2,832			510			77			944
Gain (loss) on sale and disposal of assets		2,667			14,544			21,837			2,679			—			—
Restructuring costs		—			—			—			—			—			34,491
Reorganization items, net		—			—			—			—			4,040			1,128,314
Terminated debt refinancing costs		3,673			—			—			—			—			—

Adjusted EBITDA	$	178,432		$	139,197		$	204,830		$	77,219		$	12,750		$	(2,248	)


	Successor															Predecessor
*(dollars in thousands)*	Nine Months Ended September 30, 2023			Nine Months Ended September 30, 2022			Year Ended December 31, 2022			Year Ended December 31, 2021			Period from September 5, 2020 through December 31, 2020			Period from January 1, 2020 through September 4, 2020
Adjusted Free Cash Flow Reconciliation to GAAP:
Net cash flows provided by (used in) operating activities	$	114,714		$	68,192		$	112,967		$	49,611		$	(5,975	)	$	(77,885	)
Cash paid for maintenance capital improvements		(5,318	)		(3,617	)		(3,762	)		(3,826	)		(677	)		(264	)
Cash paid for non-vessel capital expenditures		(983	)		(1,101	)		(1,328	)		(688	)		—			(88	)
Changes in operating assets and liabilities		(2,136	)		33,503			38,738			(560	)		12,328			(1,108,267	)
Amortization of deferred contract-specific costs of sales		(753	)		—			—			—			—			—
Interest income		7,821			1,294			2,832			510			77			944
Gain (loss) on sale and disposal of assets		2,667			14,544			21,837			2,679			—			—
Restructuring costs		—			—			—			—			—			34,491
Reorganization items, net		—			—			—			—			4,040			1,128,314
Terminated debt refinancing costs		3,673			—			—			—			—			—

Adjusted Free Cash Flow	$	119,685		$	112,815		$	171,284		$	47,726		$	9,793		$	(22,755	)

The following table provides the detailed components of EBITDA, Adjusted EBITDA and Adjusted Free Cash Flow as we define those terms, for the nine months ended September 30, 2023 and 2022, and the year ended December 31, 2022 (Successor), the year ended December 31, 2021 (Successor), the period from September 5, 2020 through December 31, 2020 (Successor) and the period from January 1, 2020 through September 4, 2020 (Predecessor), respectively (in thousands):


	Successor															Predecessor
	Nine Months Ended September 30, 2023			Nine Months Ended September 30, 2022			Year Ended December 31, 2022			Year Ended December 31, 2021			Period from September 5, 2020 through December 31, 2020			Period from January 1, 2020 through September 4, 2020
Components of EBITDA:
Net income (loss)	$	46,951		$	58,907		$	80,762		$	2,987		$	(9,859	)	$	(1,154,547	)
Interest, net
Debt obligations		32,609			29,686			41,172			35,794			10,750			40,460
Interest income		(7,821	)		(1,294	)		(2,832	)		(510	)		(77	)		(944	)

Total interest, net		24,788			28,392			38,340			35,284			10,673			39,516

Income tax expense (benefit)		15,394			2,764			7,174			1,533			1,307			(135,721	)
Depreciation		18,730			13,016			18,601			15,672			5,016			65,705
Amortization		15,981			6,910			10,339			2,711			—			12,845

EBITDA	$	121,844		$	109,989		$	155,216		$	58,187		$	7,137		$	(1,172,202	)


	Successor															Predecessor
	Nine Months Ended September 30, 2023			Nine Months Ended September 30, 2022			Year Ended December 31, 2022			Year Ended December 31, 2021			Period from September 5, 2020 through December 31, 2020			Period from January 1, 2020 through September 4, 2020
Loss on early extinguishment of debt, net		1,236			42			44			—			—			4,236
Stock-based compensation expense		17,270			3,468			5,330			3,372			1,503			1,969
Interest income		7,821			1,294			2,832			510			77			944
Fair value of liability-classified warrants		26,588			24,404			41,408			15,150			(7	)		—
Restructuring charges		—			—			—			—			—			34,491
Reorganization items, net		—			—			—			—			4,040			1,128,314
Terminated debt refinancing costs		3,673			—			—			—			—			—

Adjusted EBITDA	$	178,432		$	139,197		$	204,830		$	77,219		$	12,750		$	(2,248	)

Cash paid for deferred drydocking charges⁽¹⁾		(20,939	)		(16,118	)		(19,114	)		(14,113	)		(86	)		(9,304	)
Cash paid for maintenance capital improvements⁽¹⁾		(5,318	)		(3,617	)		(3,762	)		(3,826	)		(677	)		(264	)
Cash paid for non-vessel capital expenditures⁽¹⁾		(983	)		(1,101	)		(1,328	)		(688	)		—			(88	)
Cash paid for interest		(25,692	)		(5,417	)		(8,868	)		(8,467	)		(1,731	)		(14,781	)
Cash refunds of (paid for) taxes		(5,815	)		(129	)		(474	)		(2,399	)		(463	)		3,930

Adjusted Free Cash Flow	$	119,685		$	112,815		$	171,284		$	47,726		$	9,793		$	(22,755	)

(1)	For additional information concerning these items, see “Management’s Discussion and Analysis of Financial Condition and Results of Operations—Liquidity and Capital Resources—Capital Expenditures.”

Set forth below are the material limitations associated with using EBITDA, Adjusted EBITDA and Adjusted Free Cash Flow as non-GAAP financial measures compared to cash flows provided by operating activities:

•

EBITDA, Adjusted EBITDA and Adjusted Free Cash Flow do not reflect the future capital expenditure requirements that may be necessary to replace our existing vessels upon expiration of their useful lives;

•

EBITDA, Adjusted EBITDA and Adjusted Free Cash Flow do not reflect the interest, future principal payments and other financing-related charges necessary to service the debt that we have incurred in acquiring and constructing our vessels;

•

EBITDA, Adjusted EBITDA and Adjusted Free Cash Flow do not reflect the deferred income taxes that we will eventually have to pay once we are no longer in an overall NOL carryforward position, as applicable; and

•

EBITDA, Adjusted EBITDA and Adjusted Free Cash Flow do not reflect changes in our net working capital position.

Management compensates for the above-described limitations in using EBITDA, Adjusted EBITDA and Adjusted Free Cash Flow as non-GAAP financial measures by only using EBITDA, Adjusted EBITDA and Adjusted Free Cash Flow to supplement our GAAP results.

Other Operating Data


	Successor															Predecessor
	Nine Months Ended September 30, 2023			Nine Months Ended September 30, 2022			Year Ended December 31, 2022			Year Ended December 31, 2021			Period from September 5, 2020 through December 31, 2020			Period from January 1, 2020 through September 4, 2020
Offshore Supply Vessels:
Average number of OSVs⁽¹⁾		53.6			57.5			57.0			58.8			62.0			62.0
Average number of active OSVs⁽²⁾		31.8			25.5			26.7			22.2			19.6			24.2
Average OSV fleet capacity (DWT)⁽³⁾		233,587			227,611			229,001			228,256			236,430			237,338
Average OSV capacity (DWT)⁽⁴⁾		4,361			3,958			4,020			3,885			3,813			3,828
Average OSV utilization rate⁽⁵⁾		45.1	%		36.4	%		37.7	%		31.2	%		26.5	%		24.0	%
Active OSV utilization rate⁽⁶⁾		76.2	%		81.9	%		80.7	%		82.8	%		84.0	%		61.6	%
Average OSV dayrate⁽⁷⁾	$	38,927		$	30,590		$	32,305		$	19,785		$	16,082		$	17,495
Effective OSV dayrate⁽⁸⁾	$	17,556		$	11,135		$	12,179		$	6,173		$	4,262		$	4,199
Multi-Purpose Support Vessels:
Average number of MPSVs⁽¹⁾		12.0			12.0			12.0			12.0			12.0			12.0
Average number of active MPSVs⁽²⁾		11.0			10.3			10.4			8.9			9.0			9.1
Average MPSV utilization rate⁽⁵⁾		71.8	%		64.8	%		65.2	%		46.7	%		38.8	%		28.8	%
Active MPSV utilization rate⁽⁶⁾		78.3	%		75.8	%		75.0	%		63.0	%		51.7	%		37.8	%
Average MPSV dayrate⁽⁷⁾	$	63,188		$	51,715		$	53,421		$	40,245		$	36,055		$	34,893
Effective MPSV dayrate⁽⁸⁾	$	45,369		$	33,511		$	34,830		$	18,794		$	13,989		$	10,049

(1)

delivered since September 30, 2023 and one remaining OSV expected to be delivered by December 31, 2023 as part of the ECO Acquisitions #2, but due to supply chain constraints such delivery could extend into early 2024. The Company also sold ten and four OSVs during 2022 and 2021, respectively, and sold two OSVs during the nine months ended September 30, 2023.

(2)

In response to weak market conditions, we elected to stack certain of our OSVs and MPSVs on various dates since October 2014. The average number of active OSVs represents the weighted-average number of vessels that were immediately available for service during each respective period, adjusted to reflect date of stacking or recommissioning of vessels.

(3)	Represents the weighted-average number of OSVs owned during the period multiplied by the weighted-average capacity of OSVs during the same period.

(4)	Represents actual capacity of the OSVs owned during the period on a weighted-average basis, adjusted to reflect date of acquisition or disposition of vessels.

(5)	Utilization rates are weighted-average rates based on a 365-day year. Vessels are considered utilized when they are generating revenues.

(6)	Active utilization rate is based on a denominator comprised only of vessel-days available for service by the active fleet, which excludes the impact of inactive or stacked vessel days.

(7)	Average OSV and MPSV dayrates represent weighted-average revenue per day, which includes charter hire, crewing services and net brokerage revenues, based on the number of days during the period that the OSVs and MPSVs, respectively, generated revenues.

(8)	Effective dayrate represents the average dayrate multiplied by the average utilization rate.

RISK FACTORS

An investment in our common stock involves a high degree of risk. You should carefully consider the risks described below, together with the other information in this prospectus, before deciding whether to purchase our common stock. If any of the risks described below actually occur, our business, financial condition, results of operations or prospects could be materially adversely affected. In any such case, the trading price of our common stock could decline and you could lose all or part of your investment.

Risks Relating to Our Business

The demand for our services from companies in various energy-related industries is cyclical, and to some extent, seasonal, depending primarily on the capital expenditures of offshore energy companies. These capital expenditures are influenced by such factors as:

•

prevailing oil and natural gas prices, particularly with respect to prevailing prices on local price indexes in the areas in which we operate and expectations about future commodity prices;

•

the action of the Organization of the Petroleum Exporting Countries (“OPEC”), its members and other state-controlled oil companies relating to oil price and production controls;

•

worldwide and regional economic conditions impacting the global supply and demand for oil and natural gas;

•

domestic and international political, military, regulatory and economic conditions, including global inflationary pressures, Russia’s ongoing invasion of Ukraine and sanctions related thereto, as well as the ongoing conflict in Israel and the surrounding region;

•

delay and regulatory uncertainty stemming from local or environmental opposition to offshore energy development projects;

•

the cost of exploring for, producing and delivering hydrocarbons;

•

the sale and expiration dates of available offshore leases;

•

the discovery rate, size and location of new hydrocarbon reserves, including in offshore areas;

•

the rate of decline of existing hydrocarbon reserves due to production;

•

laws and regulations related to environmental matters, including those addressing alternative energy sources and the risks of global climate change;

•

the development and exploitation of alternative fuels or energy sources and end-user conservation trends;

•

domestic, local and foreign governmental regulation and taxes;

•

technological advances, including technology related to the exploitation of shale oil, which can result in over-supply of hydrocarbons or a change in demand for hydrocarbons; and

•

the ability of offshore energy producers to generate funds for their capital-intensive businesses.

Prices for oil and natural gas have historically been, and we anticipate they will continue to be, extremely volatile and reactive to changes in the supply of and demand for oil and natural gas (including changes resulting from the ability of OPEC to establish and maintain production quotas), domestic and worldwide economic conditions and political instability in oil producing countries. In the past, low oil prices have adversely affected demand for our services and any decreases, over a sustained period of time, could have a material adverse effect on our business, financial condition, results of operations and cash flows.

Our results of operations and operating cash flows depend on our obtaining significant contracts, primarily from companies in the oil and gas exploration and production industry. The timing of or failure to obtain contracts, delays in awards of contracts, cancellations of contracts, delays in completion of contracts, or failure to obtain timely payments from our customers, could result in significant periodic fluctuations in our results of operations and operating cash flows. If customers do not proceed with the completion of significant projects or if significant defaults on customer payment obligations to us arise, or if we encounter disputes with customers involving such payment obligations, we may face difficulties in collecting payment of amounts due to us, including for costs we previously incurred.

Certain developments in the global oil and gas markets, such as the impacts we experienced from COVID-19, the Russian invasion of Ukraine and related sanctions, and the ongoing conflict in Israel and the surrounding region have had, and may continue to have, material adverse consequences for general economic, financial and business conditions, and could materially and adversely affect our business, financial condition, results of operations and liquidity and those of our customers, suppliers and other counterparties.

Changes in the supply of and demand for oil and gas impacts the level of services that we provide to customers, which in turn impacts our financial position, results of operations and cash flows.

The outbreak of the COVID-19 pandemic in 2020, combined with temporary but significant increases in oil and gas production by Saudi Arabia and Russia immediately following the outbreak, had significant global effects on demand for oil and gas and resulted in substantial reductions in our dayrates and utilizations. While oil and gas prices and, therefore, demand for our services have largely recovered as the impacts of COVID-19 pandemic have been alleviated, concerns over the prolonged negative effects of the COVID-19 outbreak on economic and business prospects across the world, including as a result of potential new variants of the virus or another global pandemic, have contributed to oil price volatility and uncertainty regarding the outlook for the global economy. Such conditions have resulted in, and could again result in, reductions to our customers’ drilling and production expenditures and delays or cancellations of projects, thus decreasing demand for our services, and an increased risk that our customers may seek price reductions or more favorable economic terms for our services or terminate our contracts.

Additionally, although as of the date of this prospectus we have not been materially impacted by the resulting supply chain disruptions, the Russian invasion of Ukraine and related sanctions have significantly disrupted supply chains for crude oil and natural gas. While initial impacts of the war in 2022 resulted in increased European demand for U.S. natural gas products, we cannot predict the level of future demand, effects on domestic pricing, and impacts on U.S. oil and gas production. Further, the Russia Ukraine conflict and other geopolitical tensions, as well as the related international response, have exacerbated inflationary pressures, causing increases in the prices for goods and services and exacerbating global supply chain disruptions, which have resulted in, and may continue to result in, shortages in materials and services and related uncertainties. Such shortages have resulted in, and may continue to result in, cost increases for labor, fuel, materials and services, and could continue to cause costs to increase, and also result in the scarcity of certain materials. Any economic slowdown or recession in Europe or globally, including as a result of such supply chain disruptions or sanctions, may also impact demand and depress the price for crude oil, natural gas or other products that we handle, which could have significant adverse consequences on our financial condition and the financial condition of our customers, suppliers and other counterparties, and could diminish our liquidity. The U.S. government has also implemented geographic restrictions for certain offshore oil and gas operators and projects, which may reduce the number of projects our vessels may support. While the geographic areas in which we operate are largely unaffected by these sanctions, they could negatively impact our business and financial condition. Further, the ongoing conflict in Israel and the surrounding region could escalate into a broader conflict that could disrupt energy operations and supply chains globally.

Our results of operations are materially affected by conditions in the global capital markets and the economy generally, both in the U.S. and elsewhere around the world. Weak economic conditions sustained uncertainty about global economic conditions, concerns about future U.S. budgetary cuts, or a prolonged or further tightening

of credit markets could cause our customers and potential customers to postpone or reduce spending on products or services or put downward pressure on prices, which could have an adverse effect on our business, results of operations or cash flows. In the event of extreme prolonged adverse market events, such as a global credit crisis, we could incur significant losses. The future impact of these current events on our financial condition, results of operations and cash flows depends largely on developments outside our control which cannot be predicted with certainty.

Impairment of our long-term assets may adversely impact our financial position and results of operations.

We periodically evaluate our long-lived assets, including our property and equipment, and intangible assets. In performing these assessments, we project future cash flows on an undiscounted basis for long-lived assets and compare these cash flows to the carrying amount of the related assets. These cash flow projections are based on our current operating plans, estimates and judgmental assumptions. We perform the assessment of potential impairment for our property and equipment and intangibles whenever facts and circumstances indicate that the carrying value of those assets may not be recoverable due to various external or internal factors. In such event, if we determine that our estimates of future cash flows were inaccurate or our actual results are materially different from what we have predicted, we could record additional impairment charges in future periods, which could have a material adverse effect on our financial position and results of operations.

The waiver, repeal or administrative weakening of the Jones Act could adversely impact our business.

Substantial portions of our operations are conducted in the U.S. coastwise trade, and thus, are subject to the provisions of the Jones Act which, subject to limited exceptions, restricts maritime transportation of merchandise between points in the United States (known as cabotage or coastwise trade) to vessels that are: (a) built in the United States; (b) registered under the U.S. flag; (c) crewed by U.S. citizens or lawful permanent residents; and (d) owned and operated by U.S. citizens within the meaning of the Jones Act. For years, there have been attempts to repeal or amend such provisions, and such attempts are expected to continue in the future. In addition, the President of the United States may waive the requirement for using U.S.-flag vessels with coastwise endorsements in the U.S. coastwise trade in the interest of national defense. Furthermore, the Jones Act restrictions on the coastwise trade are subject to certain exceptions under certain international trade agreements, including the General Agreement on Trade in Services. If maritime cabotage services were included in the General Agreement on Trade in Services or other international trade agreements, the shipping of maritime cargo between covered U.S. ports could be opened to foreign-flag vessels, foreign-built vessels or foreign-owned vessels. Repeal, substantial amendment, waiver of provisions, or other administrative weakening of the Jones Act could significantly adversely affect us by, among other things, resulting in additional competition from competitors with lower operating costs, because of their ability to use vessels built in lower-cost foreign shipyards, owned and manned by foreign nationals with promotional foreign tax incentives and with lower wages and benefits than U.S. citizens. Because foreign vessels may have lower construction costs and operate at significantly lower costs than companies operating in the U.S. coastwise trade, such a change could significantly increase competition in the U.S. coastwise trade, which could have a material adverse effect on our business, financial position, results of operations, cash flows and growth prospects.

We must continue to comply with the Jones Act’s citizenship requirements.

Because we own and operate U.S.-flagged vessels in the U.S. coastwise trade, the Jones Act requires that at least 75% of the outstanding shares of each class or series of the capital stock of the Company must be owned and controlled by U.S. citizens. We are responsible for monitoring the ownership of our equity securities and subsidiaries to ensure compliance with the citizenship requirements of the Jones Act. If we do not continue to comply with such requirements, we would be prohibited from operating our U.S.-flagged vessels in the U.S. coastwise trade and may incur severe penalties, such as fines and/or forfeiture of such vessels and/or permanent loss of U.S. coastwise trading privileges for such vessels.

Our operations may be impacted by changing macroeconomic conditions, including inflation.

Inflation has been an ongoing concern in the U.S. since 2021. Ongoing inflationary pressures have resulted in and may result in additional increases to the costs of goods, services and personnel, which in turn could cause our capital expenditures and operating costs to rise. Sustained levels of high inflation caused the U.S. Federal Reserve and other central banks to increase interest rates multiple times in 2022 and 2023 in an effort to curb inflationary pressure on the costs of goods and services, which could have the effects of raising the cost of capital and depressing economic growth, either of which (or the combination thereof) could hurt the financial and operating results of our business. To the extent elevated inflation remains, we may experience further cost increases for our operations.

High oil prices are also inflationary and governmental or economic responses to high oil prices could impact the operations of our customers. Sustained high oil prices could also drive over-investment and create the potential for global over-supply, which could cause prices to fall, also impacting investment by our customers.

Any future reduction in worldwide economic growth and economic activity could, if sustained, ultimately lead to a global recession. In a global recession, it is likely that the demand for oil and natural gas would decline and the number of planned offshore energy projects would decrease. Such a scenario would negatively impact the demand for offshore support services, and in turn, our financial performance.

Adverse developments affecting the financial services industry, such as actual events or concerns involving liquidity, defaults, or non-performance by financial institutions or transactional counterparties, could adversely affect our current and projected business operations and our financial condition and results of operations.

Actual events involving limited liquidity, defaults, non-performance or other adverse developments that affect financial institutions, transactional counterparties or other companies in the financial services industry or the financial services industry generally, or concerns or rumors about any events of these kinds or other similar risks, have in the past and may in the future lead to market-wide liquidity problems. For example, on March 10, 2023, Silicon Valley Bank (“SVB”), was closed by the California Department of Financial Protection and Innovation, which appointed the Federal Deposit Insurance Corporation (“FDIC”), as receiver. Similarly, on March 12, 2023, Signature Bank Corp. (“Signature”), and Silvergate Capital Corp. were each swept into receivership. Although a statement by the U.S. Department of the Treasury, the U.S. Federal Reserve and the FDIC indicated that all depositors of SVB would have access to all of their money after only one business day of closure, including funds held in uninsured deposit accounts, borrowers under credit agreements, letters of credit and certain other financial instruments with SVB, Signature or any other financial institution that is placed into receivership by the FDIC may be unable to access undrawn amounts thereunder. Although we are not a borrower under or party to any material letter of credit or any other such instruments with SVB, Signature or any other financial institution currently in receivership, and we are not a borrower under or party to any credit agreement with such institutions, if we enter into any such instruments and any of our lenders or counterparties to such instruments were to be placed into receivership, we may be unable to access such funds. In addition, if any of our partners, suppliers or other parties with whom we conduct business are unable to access funds pursuant to such instruments or lending arrangements with such a financial institution, such parties’ ability to pay their obligations to us or to enter into new commercial arrangements requiring additional payments to us could be adversely affected. In this regard, counterparties to SVB credit agreements and arrangements, and third parties such as beneficiaries of letters of credit (among others), may experience direct impacts from the closure of SVB and uncertainty remains over liquidity concerns in the broader financial services industry. Similar impacts have occurred in the past, such as during the 2008-2010 financial crisis.

Inflation and rapid increases in interest rates have led to a decline in the trading value of previously issued government securities with interest rates below current market interest rates. Although the U.S. Department of the Treasury, the FDIC and the Federal Reserve Board have announced a program to provide up to $25 billion of

loans to financial institutions secured by certain of such government securities held by financial institutions to mitigate the risk of potential losses on the sale of such instruments, widespread demands for customer withdrawals or other liquidity needs of financial institutions for immediate liquidity may exceed the capacity of such program. Additionally, we regularly maintain cash balances at third-party financial institutions in excess of the FDIC standard insurance limit, and there is no guarantee that the U.S. Department of the Treasury, the FDIC and the Federal Reserve Board will provide access to uninsured funds in the future in the event of the closure of such banks or financial institutions, or that they would do so in a timely fashion.

Our access to funding sources and other credit arrangements in amounts adequate to finance or capitalize our current and projected future business operations could be significantly impaired by factors that affect us, any financial institutions with which we enter into credit agreements or arrangements directly, or the financial services industry or economy in general. These factors could include, among others, events such as liquidity constraints or failures, the ability to perform obligations under various types of financial, credit or liquidity agreements or arrangements, disruptions or instability in the financial services industry or financial markets, or concerns or negative expectations about the prospects for companies in the financial services industry. These factors could involve financial institutions or financial services industry companies with which we have financial or business relationships, but could also include factors involving financial markets or the financial services industry generally.

The results of events or concerns that involve one or more of these factors could include a variety of material adverse effects on our current and projected business operations and our financial condition and results of operations. These risks include, but may not be limited to, the following:

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delayed access to deposits or other financial assets or the uninsured loss of deposits or other financial assets;

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inability to enter into credit facilities or other working capital resources;

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potential or actual breach of contractual obligations that require us to maintain letters of credit or other credit support arrangements; or

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termination of cash management arrangements and/or delays in accessing or actual loss of funds subject to cash management arrangements.

In addition, investor concerns regarding the U.S. or international financial systems could result in less favorable commercial financing terms, including higher interest rates or costs and tighter financial and operating covenants, or systemic limitations on access to credit and liquidity sources, thereby making it more difficult for us to acquire financing on acceptable terms or at all. Any decline in available funding or access to our cash and liquidity resources could, among other risks, adversely impact our ability to meet our operating expenses or other obligations, financial or otherwise, result in breaches of our financial and/or contractual obligations or result in violations of federal or state wage and hour laws. Any of these impacts, or any other impacts resulting from the factors described above or other related or similar factors, could have material adverse effects on our liquidity and our current and/or projected business operations and financial condition and results of operations.

In addition, any further deterioration in the macroeconomic economy or financial services industry could lead to losses or defaults by our partners, vendors or suppliers, which in turn could have a material adverse effect on our current and/or projected business operations and results of operations and financial condition. For example, a partner may fail to make payments when due, default under their agreements with us, become insolvent or declare bankruptcy, or a supplier may determine that it will no longer deal with us as a customer. In addition, a vendor or supplier could be adversely affected by any of the liquidity or other risks that are described above as factors that could result in material adverse effects on us, including but not limited to delayed access or loss of access to uninsured deposits or loss of the ability to draw on existing credit facilities involving a troubled or failed financial institution. The bankruptcy or insolvency of any partner, vendor or supplier, or the failure of any partner to make payments when due, or any breach or default by a partner, vendor or supplier or the loss of

any significant supplier relationships, could cause us to suffer material losses and may have material adverse effects on our business.

Our business and our customers’ businesses are subject to complex laws and regulations that can adversely affect the cost, manner, or feasibility of doing business.

Our operations are subject to extensive federal, state and local laws and regulations, including complex environmental laws and occupational health and safety laws. We may be required to make large expenditures to comply with such regulations. Failure to comply with these laws and regulations or accidental spills or releases of oil and/or hazardous substances may result in the suspension or termination of operations or permits and other authorizations, and subject us to administrative, civil, and criminal penalties. In the event of environmental violations or accidental spills or releases, we may be charged with the costs of investigation, remediation or other corrective actions and citizen groups may file claims for nuisance, provision of alternative water supplies, property damage or bodily injury. Laws and regulations protecting the environment have become more stringent in recent years, and may, in some circumstances, result in liability for environmental damage regardless of negligence or fault through a strict, joint and several liability scheme, even if our operations were lawful at the time or in accordance with industry standards. In addition, pollution and similar environmental risks generally are not fully insurable. These liabilities and costs could have a material adverse effect on our business, financial condition, results of operations and cash flows.

Additionally, changes in environmental laws or regulations, including laws relating to the emission of carbon dioxide and other GHGs or other climate change concerns, could require us to devote capital or other resources to comply with these laws and regulations. These changes could also subject us to additional costs and restrictions, including increased fuel costs. Such changes in laws or regulations could increase costs of compliance and doing business for our customers and thereby decrease the demand for our services. Because our business depends on the level of activity in the offshore oil and gas industry, existing or future laws and regulations related to GHGs and climate change, including incentives to conserve energy or use alternative energy sources, could have a negative impact on our business if such laws and regulations reduce the worldwide demand for oil and gas or limit drilling opportunities for our customers.

Additionally, we operate our vessels in a number of international markets and are subject to various international treaties and the local laws and regulations in jurisdictions where our vessels operate and/or are registered. These conventions, laws and regulations govern matters of environmental protection, GHG emissions, worker health and safety, vessel and port security, and the manning, construction, ownership and operation of vessels, including cabotage requirements similar to the Jones Act. Changes in such international treaties and such local laws and regulations can be unpredictable and may adversely affect our ability to carry out operations overseas.

The Inflation Reduction Act of 2022 could accelerate the transition to a low carbon economy and impose increased costs on our customers.

In August 2022, President Biden signed the Inflation Reduction Act of 2022 (“IRA 2022”) into law. The IRA 2022 contains incentives for the development of renewable energy, clean hydrogen, clean fuels, electric vehicles and supporting infrastructure and carbon capture and sequestration, among other provisions. These incentives could further accelerate the transition of the U.S. economy away from the use of fossil fuels towards lower-or zero-carbon emissions alternatives, which could decrease demand for oil and gas and consequently reduce demand for our services in that sector. In addition, the IRA 2022 imposes the first ever federal fee on the emission of GHGs through a methane emissions charge. The IRA 2022 amends the federal Clean Air Act (“CAA”) to impose a fee on the emission of methane from sources required to report their GHG emissions to the U.S. Environmental Protection Agency (“EPA”). The methane emissions charge will start in calendar year 2024 at $900 per ton of methane, increase to $1,200 per ton in 2025, and be set at $1,500 per ton for 2026 and each year thereafter. Calculation of the fee is based on certain thresholds established in the IRA 2022. The methane

emissions charge could increase our customers’ operating costs in the oil and gas industry and reduce demand for our services.

We provide services for oil and natural gas exploration and production customers operating offshore in the deepwaters of the U.S. and in other countries. In the U.S., President Biden issued an executive order in January 2021 that commits to substantial action on climate change, calling for, among other things, the elimination of subsidies provided to the fossil fuel industry and an increased emphasis on climate-related risks across government agencies and economic sectors. In September 2023, the Biden Administration announced that federal agencies will be directed to consider the social cost of GHGs in agency budgeting, procurement, and other agency decisions, including in environmental reviews conducted pursuant to the National Environmental Policy Act, where appropriate. Additionally, regulatory agencies under the Biden Administration may issue new or amended rulemakings regarding deepwater leasing, permitting or drilling that could result in more stringent or costly restrictions, delays or cancellations in offshore oil and natural gas exploration and production activities. Additionally, decisions regarding federal offshore leasing have been subject to legal challenges that could delay or suspend offshore lease auctions, adversely affecting our customers’ businesses and reducing demand for our services. In September 2023, the Biden Administration announced a new five-year offshore leasing plan for the U.S. GoM. The plan calls for a maximum of three offshore lease sales, in 2025, 2027 and 2029, and no lease sales will be held in 2024. The five-year lease plan represents the smallest number of planned sales in the history of the offshore leasing program.

Any new legislation, executive actions or regulatory initiatives, whether in the U.S. or in other countries, that impose increased costs, more stringent operational standards or result in significant delays, cancellations or disruptions in our customers’ operations, could increase the risk of losing leasing or permitting opportunities, expired leases due to the time required to develop new technology, increased supplemental bonding costs, or cause our customers to incur penalties, fines or shut-in production at one or more of their facilities, any or all of which could reduce demand for our services. We cannot predict with any certainty the full impact of any new laws, regulations, executive actions or regulatory initiatives on our customers’ drilling operations or the opportunity to pursue such operations, or on the cost or availability of insurance to cover the risks associated with such operations. The matters described above, individually or in the aggregate, could have a material adverse effect on our business, financial condition and results of operations.

We operate in a highly competitive industry.

The offshore drilling and production support industry is both highly competitive and capital intensive and requires substantial resources and investment to satisfy customers and maintain profitability. Our customers award contracts based on price, industry reputation, service quality, vessel offerings and capabilities, transit costs and other similar factors. Increased competition for deepwater drilling contracts could depress dayrates and utilization rates, adversely affecting our profitability. A sustained inability to win contracts in our key markets would put pressure on our ability to service our debt.

Our financial and operating performance may be subject to the state of the offshore wind energy market.

Our results of operations may be subject to the state of the offshore wind energy market and the inherent complexity of developing wind energy projects. In addition to the state and federal government policies supporting renewable energy, the growth and development of the offshore wind energy market is subject to a number of factors, including, among other things:

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a new and complex permitting process;

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higher development costs than onshore alternatives;

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the availability and cost of financing for the estimated pipeline of offshore wind energy projects;

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fixed price contracts of wind development projects make it difficult to recover cost increases;

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the deferral or cancellation of offshore wind projects;

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dynamics of the electricity market, which may be affected by a number of factors, including government regulation, power transmission, seasonality, fluctuations in demand, and the cost and availability of fuel, particularly natural gas;

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the cost of raw materials used to make wind turbines, particularly steel;

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the general increase in demand for electricity or “load growth”;

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the costs of competing power sources, including natural gas, nuclear power, solar power and other power sources;

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the development of new power generating technology, advances in existing technology or discovery of power generating natural resources;

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the development of electrical transmission infrastructure;

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state and federal laws and regulations, particularly those favoring low carbon energy generation alternatives;

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administrative and legal challenges to proposed offshore wind energy development projects; and

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heightened focus on environmental or habitat concerns.

We may be unable to attract and retain qualified, skilled employees necessary to operate our business, and the loss of key personnel could adversely affect our relationship with the military.

Much of our success depends on our ability to attract and retain highly skilled and qualified personnel. Our inability to hire, train and retain a sufficient number of qualified employees, including mariners, could impair our ability to manage, maintain and grow our business.

In crewing our vessels, we require skilled employees who can perform physically demanding work. As a result of past volatility in the oil and gas industry, many industry employees chose to pursue employment in other fields, leading the industry to experience a significant shortfall in qualified mariners. As conditions in the industry have improved, it has become more challenging to engage experienced personnel as crews on our vessels. We face strong competition within the broader oilfield industry for employees and potential employees, including competition from drilling rig operators for fleet personnel. We may have difficulty hiring employees or finding suitable replacements as needed and it is possible that we would have to raise wage rates or increase benefits offered to attract workers and to retain current employees. In such circumstances, if we are unable to increase our service rates to customers to compensate for wage increases or recruit qualified personnel to operate vessels at full utilization, our financial condition and results of operations may be adversely affected.

Additionally, the ongoing viability and potential growth of our contractual relationship with the U.S. military is dependent on our continued employment of certain key personnel. Any action taken by the U.S. military in response to the loss of key personnel, or potential loss of key personnel, from our operations could adversely affect our current and future business with the military and, in turn, adversely affect our financial results.

Further, our operations are dependent upon the efforts and continued employment of our executive officers and key management personnel, including, but not limited to, our Founder, Chairman, President and Chief Executive Officer, Todd M. Hornbeck, who has substantial experience and relationships with our major customers. Given industry management turnover resulting from restructurings and other corporate changes, seasoned managers are in demand. Although we have entered into employment agreements with our executive officers and key management personnel, there is no guarantee that they will remain employed by us. In the event of the loss of key management personnel, we would be required to hire a replacement and there can be no assurance that the replacement will be suitable or favorable to us, which could adversely affect our financial results and operations. The loss of services of one or more of our executive officers or key management personnel could have a negative impact on our financial condition and results of operations.

We may be adversely affected by potential litigation.

In the future, we may become parties to litigation. In general, litigation can be expensive and time consuming to bring or defend against. Such litigation could result in settlements or damages that could significantly affect our financial results. It is not possible to predict the potential litigation that we may become party to nor the final resolution of such litigation. The impact of any such litigation on our businesses and financial stability, however, could be material.

Certain claims were not discharged in our bankruptcy and could have a material adverse effect on our financial condition and results of operations.

The U.S. Bankruptcy Code provides that the confirmation of a plan of reorganization discharges a debtor from substantially all debts arising prior to confirmation. With few exceptions, all claims that arise prior to the filing of a petition or before confirmation of a plan of reorganization (a) are subject to compromise and/or treatment under such plan of reorganization and/or (b) are discharged in accordance with the terms of such plan of reorganization.

In order to achieve our objective of a swift confirmation of the joint prepackaged plan of reorganization filed with and confirmed by the bankruptcy court on May 19, 2020 and June 19, 2020, respectively (the “Plan”), we determined to leave many classes of claims as unimpaired and thus such claims were not discharged under the Plan. Holders of such claims can still assert the claims against the reorganized entity and may have an adverse effect on our financial condition and results of operations.

Stacked vessels, and the unstacking of such vessels, may require substantial capital and operating expenditures and regulatory approvals.

Due to difficult market conditions, we have elected, and may elect, at various points, to stack certain vessels in our fleet, which would reduce the number of crew and personnel that operate and maintain such vessels. Though vessel stacking reduces the costs of operating a vessel, it reduces the number of available vessels we can deploy to service our customers and limits potential revenues. If market conditions do not improve, we may be required to stack additional vessels.

When we elect to unstack the stacked vessels, we will incur substantial capital and operating expenditures. These expenditures could increase as a result of changes in the cost of labor and materials, changes in technology, customer requirements for new or upgraded equipment, the size of our fleet, the cost of replacement parts for existing vessels, the geographic location of the vessels or the length of contracts. We will also incur costs associated with regulatory recertification and remobilization, changes in safety or other equipment standards and may incur additional costs to hire and train personnel to operate the vessels. Making such alterations may require the stacked vessels to remain out of service for extended periods of time, with corresponding losses of revenues. Such costs could have an adverse effect on our financial results and operations.

If we are unable to fund these capital expenditures with our liquidity, we may be required to incur additional borrowings, or seek out additional financing arrangements with banks or other capital providers. Our failure to obtain the funds for necessary future capital expenditures could have a material adverse effect on our business and on our financial position, results of operations and cash flows.

Unstacking of vessels could adversely impact the market for OSVs and MPSVs.

As of September 30, 2023, we had stacked 18 U.S.-flagged OSVs, three foreign-flagged OSVs and one U.S.-flagged MPSV. Certain of our competitors may also stack OSVs from time to time. To the extent that we or our competitors unstack vessels in response to improvement or perceived improvement in market conditions faster than the market can absorb such additional vessels, the market for OSVs could become oversaturated and would adversely affect dayrates and utilization for our vessels.

Increases in the supply of vessels could decrease dayrates.

A material increase in the supply of OSVs or MPSVs, whether through new construction (including our own), refurbishment or conversion of vessels from other uses, remobilization, reactivation or changes in law or its application could increase competition for charters, lower utilization or lower dayrates, any of which would adversely affect our revenues and profitability. Such an increase in vessel capacity could also exacerbate the impact of any future downturn in the oil and gas industry, which would have an adverse impact on our business.

Additionally, because the Jones Act does not cover certain services provided by MPSVs, foreign competitors may deploy additional MPSVs to the U.S. GoM or build additional MPSVs that will compete with us in the U.S. GoM.

The early termination of or inability to renew contracts for our vessels could have an adverse effect on our operations.

Certain contracts for our vessels, including contracts with the United States government, allow for early termination at the customer’s option. Many of our contracts that contain early termination provisions contain remedies or other provisions that would compensate us in the event an option is exercised, such as early termination fees, but customers may choose to exercise their termination rights in spite of such remedies or provisions and such remedies may not fully compensate us for the loss of the contract.

Additionally, in economic downturns, customers have requested that we adjust the terms of their contracts to be more customer-friendly, including by assuming greater risks. While we are not required to give such concessions, commercial considerations may dictate that we do so, given the relatively few deepwater customers operating in the U.S. GoM. Certain customers who seek to terminate our contracts may attempt to defeat or circumvent our protections against certain liabilities for which we receive indemnity. Our customers’ ability to perform their obligations under their contracts, including their ability to fulfill their indemnity obligations to us, may be negatively impacted by an economic downturn. Our customers, which include national energy companies, often have significant bargaining leverage over us. Should a counterparty fail to honor its obligations under an agreement with us, we could sustain losses, which could have an adverse effect on our business and on our financial position, results of operations or cash flows.

Until we replace the terminated contracts with new contracts, our business could be temporarily disrupted or adversely affected, as there may be a gap in the operation of the vessels between the current contracts and subsequent contracts, or we may not be able to secure new contracts on substantially similar terms due to the prevailing market or industry conditions at the time of expiration. The fluctuation in the demand for our services may be impacted by volatility in oil and gas markets, which could ultimately adversely affect our financial position, results of operations or cash flows. As of September 30, 2023, we had stacked 18 U.S.-flagged OSVs, three foreign-flagged OSVs and one U.S.-flagged MPSV. Further, as of September 30, 2023, we had 38 existing contracts for our vessels that are currently operating, which have durations ranging from 15 days to five years. When oil and natural gas prices are low or it is expected that such prices will decrease in the future, we may be unable to obtain contracts at attractive dayrates or at all. We may not be able to obtain new contracts in direct continuation with existing contracts, or depending on prevailing market conditions, we may enter into contracts at dayrates substantially below the existing dayrates or on terms otherwise less favorable.

We may not be able to complete the construction of our remaining two newbuilds and may experience delays related to the newbuilds.

We began constructing two Jones Act-qualified MPSVs under our prior newbuild program. These vessels are large and complex. We estimate that the cost to complete these vessels will exceed the $53.8 million total contract price we are required to pay for their completion and that the sureties that have taken over their construction will be required to pay significant sums in excess of our remaining contribution. While the sureties are contractually required to fund these excess costs, they might not do so, which would result in delay and disputes. Moreover, the vessels are complex and the shipyard performing the completion work for the sureties

may be unable or unwilling to perform on the anticipated timeline or at all, also potentially causing delay and disruption to our planned uses for the vessels.

Failure to successfully complete repairs, maintenance and routine drydockings on-time and on-budget could adversely affect our financial condition and operations.

We routinely engage shipyards to drydock vessels for regulatory compliance, repair, and maintenance. Equipment shortages, insufficient shipyard availability, unforeseen engineering issues, work stoppages, weather interference, unanticipated cost increases, inability to obtain necessary certifications and approvals, material shortages, labor issues, and other similar factors could lead to extended delays or additional costs. Significant delays could adversely affect our ability to perform under our contracts, and significant cost overruns could adversely affect our operations and profitability.

At October 31, 2023, our total contracted backlog was $659.3 million. The contractual revenue we ultimately receive may be lower than the contracted backlog due to a number of factors, including vessel downtime or suspension of operations. The actual dayrate may be lower than the contractual operating dayrate assumed in the contracted backlog described above because a down-time (such as waiting on weather) rate, repair rate, standby rate or force majeure rate, may apply under certain circumstances. Several factors could cause vessel downtime or a suspension of operations, including equipment breakdowns and other unforeseen engineering problems, marine casualties, labor strikes and other work stoppages, shortages of material and skilled labor, surveys by government and maritime authorities, periodic classification surveys, severe weather or harsh operating conditions, and force majeure events.

In certain contracts, the dayrate may be reduced to zero if, for example, repairs extend beyond a stated period of time. Our total contracted backlog includes only firm commitments and certain contracted option periods, which are represented by signed contracts or, in some cases, other definitive agreements awaiting contract execution. We may not be able to realize the full amount of our total contracted backlog due to events beyond our control. In addition, some of our customers have experienced liquidity issues in the past, including some recently, and these liquidity issues could be experienced again if commodity prices decline for an extended period of time. Liquidity issues and other market pressures could lead our customers to seek bankruptcy protection or to seek to repudiate, cancel or renegotiate these agreements for various reasons. Our inability to realize the full amount of our total contracted backlog may have an adverse effect on our financial position, results of operations or cash flows.

In addition to industry concentrations, we have certain customer concentrations, and the loss of a significant customer would adversely impact our financial results.

For the nine months ended September 30, 2023 and the year ended December 31, 2022, Occidental Petroleum Company accounted for 20.4% and 16.4% of our consolidated revenues, respectively, and Military Sealift Command accounted for 15.7% and 14.5% of our consolidated revenues, respectively. The loss or material reduction of business from a significant customer could therefore have a material adverse effect on our results of operations and cash flows. Moreover, our customer contracts subject us to counterparty risks. See “—We may be unable to collect amounts owed to us by customers.” The ability of each of our counterparties to perform their obligations under a contract with us will depend on a number of factors that are beyond our control such as the overall financial condition of the counterparty. Should a significant customer fail to honor its obligations under an agreement with us, we could sustain losses, which could have a material adverse effect on our business, financial condition and results of operations.

Ongoing and future acquisitions by us may create additional risks.

We regularly consider possible acquisitions of single vessels, vessel fleets and businesses, and, as of October 31, 2023, we have entered into contracts for the acquisition of three additional vessels that are scheduled

to close by December 31, 2023, although due to supply chain constraints such deliveries could extend into early 2024. The success of this strategy is dependent upon our ability to identify appropriate acquisition targets, negotiate transactions on favorable terms, finance transactions, complete transactions and successfully integrate them into our existing business. Subject to the terms of our indebtedness, we may finance future acquisitions with cash from operations, additional indebtedness and/or by issuing additional equity or debt securities. Acquisitions can involve a number of special risks and challenges, including, but not limited to:

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diversion of management time and attention from existing business and other business opportunities;

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delays in closing the acquisition due to third-party consents, regulatory approvals or other reasons;

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adverse effects from disclosed or undisclosed matters pertaining to the acquisition;

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loss or termination of employees and the costs associated with the termination or replacement of such employees;

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the assumption of debt, litigation or other liabilities of the acquired business;

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the incurrence of additional debt related to the acquisition;

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costs, expenses and working capital requirements associated with the acquisition;

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dilution of stock ownership of existing stockholders;

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accounting charges for restructuring and related expenses, impairment of goodwill, amortization of intangible assets and stock-based compensation expense; and

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risks associated with reactivation of idle vessels, such as higher than anticipated cost or time, unknown condition, and obsolescence or unavailability of spare parts or components.

Even if we consummate an acquisition, the process of integrating the new acquisition into our operations may result in unforeseen operational difficulties and additional costs, and may adversely affect the effectiveness of internal controls over financial reporting. In addition, valuations supporting our acquisitions and strategic investments could change rapidly and integration may be more costly to accomplish than we expect. Moreover, our management may not be able to effectively manage a substantially larger business or successfully operate a new line of business. Failure to manage these acquisition risks could materially and adversely affect our ability to achieve anticipated levels of utilization, profitability or other benefits from the acquisitions, and ultimately could materially and adversely affect our business, results of operations and financial condition.

Our contracts with the United States government could be adversely affected by budget cuts or government “shutdowns.”

Our contracts with the United States government depend upon annual funding commitments authorized by Congress. In a period of government budget cuts or other political events, such as a prolonged government shutdown, such contracts might not be re-authorized or might be temporarily suspended, adversely affecting our financial results.

Our contracts with the United States government might not be renewed or may impose additional requirements.

We were recently informed that the MSC is conducting a market survey of companies capable of providing services we currently perform pursuant to a ten-year O&M contract scheduled to expire in 2025. If we were replaced as the contractor, our revenue would be impacted as well as our diversification efforts.

Our contracts with the United States government may impose requirements related to climate change, such as requirements that we disclose information about our GHG emissions or that we set and publicize emissions reductions targets for our operations. For example, in November 2022, the Federal Acquisition Regulatory Council proposed a rule under which we would qualify as a “major” contractor with at least $50 million in annual

federal contracts, and thus would be required to disclose our Scope 1 and 2 GHG emissions and our relevant Scope 3 GHG emissions, make annual disclosures aligned with the recommendations of the Task Force on Climate-Related Financial Disclosures, and set science-based emissions reduction targets. See “Business—Government Regulation—Climate Change.” Our government contracts may be impacted by regulatory or legislative requirements related to climate change that could increase the cost of our government operations or accelerate obsolescence of vessels we employ for the government.

Our business involves a number of operational risks that may disrupt our business or adversely affect our financial results, and insurance may be unavailable or inadequate to protect against such risks.

Our vessels are subject to operating risks, including, but not limited to:

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catastrophic marine disaster;

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adverse weather and sea conditions;

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mechanical failure;

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collisions or allisions;

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oil or other hazardous substance spills;

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navigational errors;

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acts of God; and

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war, terrorism or piracy.

The occurrence of any of the enumerated events, or other similar events, may result in vessel damage, vessel loss, personnel injury or death, or environmental contamination. The occurrence of any such event could expose us to liability or costs.

Affected vessels may also be removed from service and thus be unavailable for income-generating activity.

Additionally, certain of our protection and indemnity insurance is provided by various mutual protection and indemnity associations. As associations, they rely on member premiums, investment reserves and income, and reinsurance to manage liability risks on behalf of their members. Increased investment losses, underwriting losses or reinsurance costs could cause domestic or international marine insurance associations to substantially raise the cost of premiums, resulting not only in higher premium costs, but also higher levels of deductibles. Increases in our premiums or deductible levels could adversely affect our operating costs.

While we believe that our insurance coverage is adequate and insures against risks that are customary in the industry, we may be unable to renew such coverage in the future at commercially reasonable rates. Moreover, existing or future coverage may not be sufficient to cover claims that may arise, and we do not maintain insurance for loss of income resulting from a marine casualty.

Operations in offshore waters have inherent and historically higher risk than onshore activities, and our operations could be affected by third-party actions.

Offshore operations are subject to a variety of operating risks specific to the marine environment, such as perils of the sea and marine casualty events that such perils can cause or contribute to, including capsizing, collisions and damage or loss from adverse weather conditions. In addition to being vulnerable to the risks associated with operating offshore, we may also be affected by actions of third-parties. For example, a third-party marine vessel may damage or destroy our assets or an accident caused by a third-party marine vessel may cause us to be subject to remediation and other costs resulting from releases of hazardous materials and other environmental and natural resource damages. In addition to utilization loss of our vessels and increased costs, these hazards could cause serious injuries, fatalities, contamination or property damage for which we could be held responsible.

Further, the offshore oil and gas and alternative energy industries are subject to unforeseen occurrences or catastrophic events such as hurricanes, fires, explosions, collisions involving marine vessels and oil spills. Such catastrophic events could negatively affect the industry as a whole, which could have a material adverse effect on our business and on our financial position, results of operations and cash flows.

Our operations may be materially adversely affected by tropical storms and hurricanes.

Tropical storms, hurricanes and the threat of tropical storms and hurricanes often result in the shutdown of operations in coastal regions, including the GoM, as well as operations within the path and the projected path of the tropical storms or hurricanes. The Atlantic hurricane season is June through November. In addition, climate change could result in an increase in the frequency and severity of tropical storms, hurricanes or other extreme weather events. In the future, during a tropical storm or hurricane, we may be unable to operate in the area of the storm. Additionally, tropical storms or hurricanes may cause evacuation of personnel, reduce the areas in which, or the number of days during which, our customers would contract for our vessels in general and cause damage to our vessels and other equipment, which may result in suspension of certain operations. The shutdowns, related evacuations and damage can create unpredictability in activity and utilization rates, as well as delays and cost overruns, which could have a material adverse effect on our business, financial condition and results of operations.

Cybersecurity attacks may result in potential liability or reputational damage or otherwise adversely affect our business.

Many of our business and operational processes are heavily dependent on traditional and emerging technology systems, some of which are managed by us and some of which are managed by third-party service and equipment providers, to conduct day-to-day operations, improve safety and efficiency and lower costs. We use computerized systems to help run our financial and operations functions, including the processing of payment transactions, store confidential records and conduct vessel operations, which may subject our business to increased risks. If any of our financial, operational or other technology systems fail or have other significant shortcomings, our financial results could be adversely affected. Our financial results could also be adversely affected if an employee or other third party causes our operational systems to fail, either as a result of inadvertent error or by deliberately tampering with or manipulating our operational systems. In addition, dependence upon automated systems, including those on board our vessels, may further increase the risk of operational system flaws, and employee or other tampering or manipulation of those systems will result in losses that are difficult to detect.

Cybersecurity incidents are increasing in frequency and magnitude across all business types. We have experienced attempted cybersecurity attacks but have not suffered any material adverse effect to our business and operations as a result of such attempts. We have implemented security measures, internal controls and testing that are designed to detect and protect against cyberattacks. The Company regularly updates and reviews its testing protocols, however, no security measure is infallible. Despite these measures and any additional measures we may implement or adopt in the future, our facilities, vessels and systems, and those of our third-party service providers, have been and are vulnerable to security breaches, computer viruses, lost or misplaced data, programming errors, scams, burglary, human errors, misdirected wire transfers, and other adverse events, including threats to our critical operations technologies and process control networks. The increased number of employees relying on remote access to our information systems since the COVID-19 pandemic increases our exposure to potential cybersecurity breaches. Third-party systems on which we rely could also suffer such attacks or operational system failures. Any of these occurrences could result in material harm to our business, including ransom payments, significant remediation and cybersecurity protection costs, loss of customer or employee data, loss of intellectual property or proprietary information, litigation and legal risks, including regulatory actions, potential liability, reputational damage, or damage to the company’s competitiveness, stock price and long-term shareholder value, or otherwise have an adverse effect on our business, operations and financial results.

In addition, laws and regulations governing data privacy and the unauthorized disclosure of confidential or protected information and recent legislation in certain U.S. states, pose increasingly complex compliance challenges and potentially elevate costs, and any failure to comply with these laws and regulations could result in significant penalties and legal liability.

Our operations in international markets and shipyard activities in foreign shipyards subjects us to risks inherent in conducting business internationally.

We derive a portion of our revenues from foreign sources. In addition, certain of our shipyard repair and procurement activities are being conducted with foreign vendors. We therefore face risks inherent in conducting business internationally, such as legal and governmental regulatory requirements, potential vessel detentions, seizures or nationalization of assets, import-export quotas or other trade barriers, difficulties in collecting accounts receivable and longer collection periods, political and economic instability, kidnapping of or assault on personnel, piracy, adverse tax consequences, difficulties and costs of staffing international operations and language and cultural differences. We do not hedge against foreign currency risk. While we endeavor to contract in U.S. dollars when operating internationally, some contracts may be denominated in a foreign currency, which would result in a foreign currency exposure risk. We also face risks related to administrative or other legal changes in foreign cabotage laws, or other legal or administrative changes that adversely impact planned or expected offshore energy development. For instance, in 2023, maritime regulators in Mexico implemented new approaches in their oversight of Navieras that historically have permissible levels of non-Mexican ownership, such as ours. As a result, we took legal action in Mexico to preserve our cabotage privileges there. While a stay has been issued and we plan to prosecute our claim seeking permanent reinstatement of our Mexican cabotage privileges, we nevertheless elected to move most of our Mexican-flagged vessels into various non-Mexican international markets utilizing our highly-skilled Mexican mariners and shore-based employees, which we believe will result in a temporary reduction of revenue for some of those vessels. All of these risks associated with our international operations are beyond our control and difficult to insure against. We cannot predict the nature and the likelihood of any such events. If such an event should occur, however, it could have a material adverse effect on our financial condition and results of operations.

Our employees are covered by federal laws that may subject us to job-related claims in addition to those provided by state laws.

Provisions of the Jones Act, the Death on the High Seas Act and general maritime law cover certain of our employees. These laws preempt state workers’ compensation laws and permit employees and their representatives to pursue actions against employers for job-related tort claims in federal courts. Because we are generally not protected by the damage limits imposed by state workers’ compensation statutes for these types of claims, we may be exposed to higher damage awards for these types of claims.

We are susceptible to unexpected increases in operating expenses such as crew wages, materials and supplies, maintenance and repairs and insurance costs.

Many of our operating costs, such as crew wages, materials and supplies, maintenance and repairs, and insurance costs are unpredictable and vary based on events beyond our control. Our profitability will vary based on fluctuations in operating costs. If our operating costs increase, we may not be able to recover such costs from customers. Such an increase in operating costs could adversely affect our financial results.

We may be unable to collect amounts owed to us by customers.

We typically grant customers credit on a short-term basis. Because we do not typically collect collateralized receivables from customers, we are subject to credit risk on the credit we extend. We estimate uncollectible accounts in our financial statements based on historical losses, current economic conditions, and individual customer evaluations. However, our estimates may not be accurate and the receivables due from customers as reflected in our financial statements may not be collectible.

One of the asserted long-term physical effects of climate change may be an increase in the severity and frequency of adverse weather conditions, such as hurricanes, which may increase our insurance costs or risk retention, limit insurance availability or reduce the areas in which, or the number of days during which, our customers would contract for our vessels in general and in the U.S. GoM in particular. Such conditions could also cause damage to our assets. Any of these impacts, individually or in the aggregate, could materially and adversely affect our business, financial conditions, and results of operations. We are currently unable to predict the manner or extent of any such effect. Our ability to mitigate the adverse physical impacts of climate change depends in part upon our disaster preparedness and response and business continuity planning.

Combating the effects of climate change continues to attract considerable attention in the United States and internationally, including from regulators, legislators, companies in a variety of industries, financial market participants and other stakeholders. This focus, together with government grants, incentives and subsidies focused on alternative energy development, such as those contained in the IRA 2022, and changes in consumer and industrial/commercial behavior, preferences and attitudes with respect to the generation and consumption of energy, petroleum products and the use of products manufactured with, or powered by, petroleum products, may in the long-term result in (i) the enactment of additional climate change-related regulations, policies and initiatives (at the government, regulator, corporate and/or investor community levels), including alternative energy requirements, new fuel consumption standards, energy conservation and emissions reductions measures and responsible energy development, (ii) technological advances with respect to the generation, transmission, storage and consumption of energy (e.g., wind, solar and hydrogen power, smart grid technology and battery technology, and increasing efficiency) and (iii) increased availability of, and increased consumer and industrial/commercial demand for, alternative energy sources and products manufactured with, or powered by, alternative energy sources (e.g., electric vehicles and renewable residential and commercial power supplies).

Climate change legislation and regulatory initiatives may arise from a variety of sources, including international, national, regional and state levels of government and associated administrative bodies, seeking to monitor, restrict or regulate existing emissions of GHGs, such as carbon dioxide and methane, as well as to restrict or eliminate future emissions. Restrictions on GHG emissions that may be imposed, or the adoption and implementation of regulations that require reporting of GHG emissions or other climate-related information or otherwise seek to limit GHG emissions (including carbon pricing schemes) from ourselves or our customers, could adversely affect our business and the oil and gas industry. Accordingly, our business and operations, and those of our customers, are subject to executive, regulatory, political and financial risks associated with marine transportation, petroleum products and the emission of GHGs. Any legislation or regulatory programs related to climate change could increase our costs and require substantial capital, compliance, operating and maintenance costs, reduce demand for petroleum and related marine transportation services, reduce our access to financial markets, and create greater potential for governmental investigations or litigation. For example, the adoption of legislation or regulatory programs to reduce GHG emissions could require us or our customers to incur increased operating costs or acquire emissions allowances or to comply with new regulatory requirements. Such regulatory initiatives could also stimulate demand for alternative forms of energy that do not rely on petroleum products and indirectly reduce demand for our services. Further, the SEC issued a proposed rule in March 2022 that would mandate extensive disclosure of climate-related data, risks, and opportunities, including financial impacts, physical and transition risks, related governance and strategy, and GHG emissions, for certain public companies. While the final rule has not been released, we cannot predict the costs of implementation or any potential adverse impacts resulting from the rulemaking. To the extent this rulemaking is finalized as proposed, we could incur increased costs relating to the assessment and disclosure of climate-related risks, and we cannot predict how any

information disclosed under the rule may be used by financial institutions or investors. We may face increased litigation risks, or limits or restrictions on our access to capital, related to disclosures made pursuant to the rule if finalized as proposed.

Fuel conservation measures, alternative fuel requirements, increasing consumer demand for alternatives to oil and natural gas, technological advances in fuel economy and energy generation devices, and the increased competitiveness of and technological advances with respect to alternative energy sources (such as electric vehicles, wind, solar, geothermal, tidal, fuel cells and biofuels) could reduce demand for oil and natural gas and therefore indirectly negatively impact our revenues. Furthermore, as our competitors use or develop new technological advances designed to reduce their impacts on the environment or climate change, such as the use of alternative fuels for marine vessels, we may be placed at a competitive disadvantage or may be forced by competitive pressures to implement new technologies at substantial costs. We may not be able to respond to these competitive pressures or implement new technologies on a timely basis or at an acceptable cost. If one or more of the technologies we use now or in the future were to become obsolete, our business, financial condition or results of operations could be materially and adversely affected.

Additionally, certain segments of the investor community have recently expressed negative sentiment towards investing in the oil and natural gas industry and associated businesses. Climate change-related developments in particular may result in negative perceptions of the traditional oil and gas industry and, in turn, reputational risks involving business activities associated with petroleum product exploration and production. There have been efforts in recent years, for example, to influence the investment community, including investment advisors, insurance companies, and certain sovereign wealth, pension and endowment funds and other groups, by promoting divestment of fossil fuel equities and pressuring lenders to limit funding and insurance underwriters to limit coverages to companies engaged in the extraction of fossil fuel reserves. Financial institutions may elect in the future to shift some or all of their investment into non-fossil fuel related sectors. Some investors, including certain pension funds, university endowments and family foundations, have stated policies to reduce or eliminate their investments in the oil and natural gas sector based on social and environmental considerations. Institutional lenders who provide financing to companies associated with the oil and gas industry have also become more attentive to sustainable lending practices, and some may elect not to provide traditional energy producers or companies that support such producers with funding. Such developments could ultimately result in reduced demand for our services or reduce our access to, and increase the cost of, debt or capital.

Any legislation, regulatory programs, technological advances or social pressures related to climate change could increase our or our customers’ operating and compliance costs, reduce demand for our services, and, together with negative investor sentiment, may have a material adverse effect on our business, financial condition, results of operations and cash flows. For further discussion, please see “Business—Government Regulation—Climate Change.”

Increased scrutiny and changing stakeholder expectations with respect to ESG matters may impact our business and expose us to additional risks.

In recent years, companies across all industries are facing increasing scrutiny from stakeholders related to their ESG and sustainability practices. A number of advocacy groups, both domestically and internationally, have engaged in activism campaigns centered around increasing attention and demands for governmental and private sector action related to climate change and promoting the use of substitutes to fossil fuel products. Further, failure or a perception (whether or not valid) of failure to implement our ESG strategy or achieve sustainability goals and targets we have set, could damage our reputation, causing our investors or other stakeholders to lose confidence in the Company, and negatively impact our operations. There can be no assurance that we will be able to accomplish any announced goals, targets initiatives, commitments or objectives related to our ESG strategy, as statements regarding the same reflect our current plans and aspirations and are not guarantees that we will be able to achieve them within the timelines we announce, or at all. In certain circumstances, we could determine in our

discretion that it is not feasible or practical to implement or complete certain of our ESG goals, targets, initiatives, policies or procedures based on cost, timing or other considerations. Our continuing efforts to research, establish, accomplish and accurately report on the implementation of our ESG strategy, including any ESG goals, may also create additional operational risks and expenses and expose us to reputational, legal and other risks. Moreover, while we may create and publish voluntary disclosures regarding ESG matters from time to time, some of the statements in those voluntary disclosures may be based on hypothetical expectations and assumptions that may or may not be representative of current or actual risks or events or forecasts of expected risks or events, including the costs associated therewith. Such expectations and assumptions are necessarily uncertain and may be prone to error or subject to misinterpretation given the long timelines involved and the lack of an established single approach to identifying, measuring and reporting on many ESG matters. The occurrence of any of the foregoing could have a material adverse effect on our business and financial condition.

Further, our business and growth opportunities require us to have strong relationships with various key stakeholders, including our investors, employees, suppliers, customers and others. We may face pressures from stakeholders, many of whom are increasingly focused on climate change, to prioritize sustainable energy practices, reduce our carbon footprint and promote sustainability while at the same time remaining a successfully operating business. If we do not successfully manage expectations across these varied stakeholder interests, it could erode our stakeholder trust and thereby affect our brand and reputation. Such erosion of confidence could negatively impact our business through decreased demand and growth opportunities, delays in projects, increased legal action and regulatory oversight, adverse press coverage and other adverse public statements, difficulty hiring and retaining top talent, difficulty obtaining necessary approvals and permits from governments and regulatory agencies on a timely basis and on acceptable terms and difficulty securing investors and access to debt or capital.

In addition, organizations that provide information to investors on corporate governance and related matters have developed ratings processes for evaluating companies on their approach to ESG matters. Such ratings are used by some investors to inform their investment decisions and thus unfavorable ESG ratings could have a negative impact on our access to and cost of capital as well as our reputation.

Supplier capacity constraints or shortages in parts, equipment or materials, supplier production disruptions, supplier quality and sourcing issues or price increases could increase our operating costs, decrease our revenues and adversely impact our operations.

Our reliance on third-party suppliers, manufacturers and service providers to secure equipment and materials used in our operations exposes us to volatility in the quality, price and availability of such items. During periods of reduced demand, many of these third-party suppliers reduced their inventories of parts and equipment and, in some cases, reduced their production capacity. Moreover, the global supply chain was disrupted by the COVID-19 pandemic, resulting in shortages of, and increased pricing pressures on, among other things, certain materials and labor. Further, the volatility of the price of steel can impact the construction and repair costs of our vessels. If we seek to reactivate stacked vessels, upgrade our active vessels or purchase additional vessels, these reductions and global supply chain constraints could make it more difficult for us to find equipment, materials, parts and labor for our vessels. If an alternative vendor to obtain equipment or parts is unavailable, many of the specialized parts and equipment we utilize are rebuildable, can be found in the aftermarket, or can be substituted with crossover components in a similar time period, or if such options were unavailable or could not be completed in a timely manner, we have a sufficient fleetsize with legacy technology to use component parts from certain vessels to keep our other vessels running. However, there is a risk that the use of one or more of such alternatives could cause a disruption or delay to our routes or operations resulting in an adverse affect on our business. While we believe we maintain a sufficient inventory of spare parts and equipment and have employed highly-trained, internal technical resources, including engineers and repair technicians, capable of maintaining, repairing or rebuilding the specialized machinery and equipment aboard our vessels, there can be no assurance that these measures would be sufficient to avoid an adverse impact on our business during periods of reduced demand or supply chain constraints. A disruption or delay in the deliveries from third-party suppliers, capacity constraints, production disruptions, price increases (including those related to the price of steel, inflation and supply chain disruptions), defects or quality-control issues, recalls or other decreased availability or servicing of parts and

equipment could adversely affect our ability to meet our commitments to customers on a timely basis and adversely impact our operations and revenues by resulting in uncompensated downtime, reduced dayrates, the incurrence of liquidated damages or other penalties or the cancellation or termination of contracts, or increase our operating costs.

We may be unable to effectively and efficiently manage our fleet as we expand our business, which could have an adverse effect on our business, financial condition and results of operations.

We have expanded, and plan to continue to expand, the size, scope and nature of our business through mergers and acquisitions, resulting in an increase in the breadth of our fleet and service offerings and an expansion of our business geographically, including in traditional oilfield as well as offshore wind, military and other non-oilfield applications. Business expansion places increasing demands on us and/or our fleet. We must anticipate demand well into the future in order to service our extensive customer base. The inability to effectively and efficiently manage our assets to meet the current and future needs of our customers, which may vary widely from what is originally forecast due to a number of factors beyond our control, including periods of difficult market conditions or slowdowns in any of the business sectors or various regions in which we operate, could have an adverse effect on our business, financial condition and results of operations. We could experience any of these conditions at the same time, resulting in a relatively greater impact on our results of operations than they might have on other companies that have more diversified operations.

Certain of our principal stockholders are involved in other ventures related to the offshore services industry and have the ability to take actions that could conflict with our interests.

Certain of our directors, including those directors appointed by our principal stockholders or their investment managers or respective affiliates are involved in the offshore services industry through their direct and indirect participation in businesses which are our potential competitors, service providers or customers. Situations may arise in connection with potential acquisitions, investments or contractual disputes where the other interests of these directors may conflict with our interests. Although our directors with conflicts of interest will be subject to and expected to follow the procedures set out in applicable legislation, regulations, rules and policies, any conflicts of interest may not be resolved in favor of our interests. Additionally, the involvement of our directors with other business ventures may require their time and attention be shared with their other business ventures.

Our principal stockholders may also have an interest in pursuing acquisitions, divestitures, financings or other transactions that, in their judgment, could enhance their equity investment, even though such transactions might involve risks to our other investors and lenders. In addition, our principal stockholders and their investment managers and respective affiliates are in the business of making investments in companies and may, from time to time, acquire interests in businesses that directly or indirectly compete with our business, as well as businesses that are significant existing or potential customers or service providers. Our principal stockholders or their investment managers or respective affiliates may also seek to acquire businesses and/or assets that we seek to acquire and, as a result, these acquisition opportunities may not be available to us or may be more expensive for us to pursue.

Risks Relating to Legal, Regulatory, Accounting and Tax Matters

As a public company, we will be subject to the reporting requirements of the Securities Exchange Act of 1934, as amended (the “Exchange Act”) the Sarbanes-Oxley Act of 2002 (the “Sarbanes-Oxley Act”), and, if approved for listing, the rules and regulations and the listing standards of NYSE.

The Sarbanes-Oxley Act requires, among other things, that we maintain effective disclosure controls and procedures and internal control over financial reporting. We are continuing to develop and refine our disclosure controls and other procedures that are designed to ensure that information required to be disclosed by us in the reports that we will file with the SEC is recorded, processed, summarized and reported within the time periods specified in SEC rules and forms and that information required to be disclosed in reports under the Exchange Act

is accumulated and communicated to our principal executive and financial officers. We are also continuing to improve our internal control over financial reporting. In order to maintain and improve the effectiveness of our disclosure controls and procedures and internal control over financial reporting, we have expended, and anticipate that we will continue to expend, significant resources, including accounting-related costs and significant management oversight.

We may discover weaknesses in our disclosure controls and procedures and internal control over financial reporting in the future. Any failure to develop or maintain effective controls or any difficulties encountered in their implementation or improvement could harm our operating results or cause us to fail to meet our reporting obligations and may result in a restatement of our financial statements for prior periods. Any failure to implement and maintain effective internal control over financial reporting also could adversely affect the results of periodic management evaluations and annual independent registered public accounting firm attestation reports regarding the effectiveness of our internal control over financial reporting that we will eventually be required to include in our periodic reports that will be filed with the SEC. Ineffective disclosure controls and procedures and internal control over financial reporting could cause delays in our ability to comply with public company reporting requirements (including under the Exchange Act or stock exchange rules) and could also cause investors to lose confidence in our reported financial and other information, which could have a negative effect on the trading price of our common stock. In addition, if we are unable to continue to meet these requirements, we may not be able to remain listed on the NYSE. We are not currently required to comply with the SEC rules that implement Section 404 of the Sarbanes-Oxley Act and are therefore not required to make a formal assessment of the effectiveness of our internal control over financial reporting for that purpose. As a public company, we will be required to provide an annual management report on the effectiveness of our internal control over financial reporting commencing with our second annual report.

Our independent registered public accounting firm is not currently required to formally attest to the effectiveness of our internal control over financial reporting. Once such reporting becomes required, our independent registered public accounting firm may issue a report that is adverse in the event it is not satisfied with the level at which our internal control over financial reporting is documented, designed or operating. Any failure to maintain effective disclosure controls and internal control over financial reporting could have a material adverse effect on our business and operating results and could cause a decline in the price of our common stock.

We and our directors and executive officers may be subject to litigation for a variety of claims, which could harm our reputation and adversely affect our business, results of operations and financial condition.

In the ordinary course of business, we have in the past and may in the future be involved in and subject to litigation for a variety of claims or disputes and receive regulatory inquiries. These claims, lawsuits and proceedings could include labor and employment, wage and hour, commercial, regulatory, antitrust, alleged securities law violations or other investor claims, environmental damage, claims that our employees have wrongfully disclosed or we have wrongfully used proprietary information of our employees’ former employers and other matters. Claims under any such litigation may be material or may be indeterminate. The number and significance of these potential claims and disputes may increase as our business expands. Further, our general liability insurance may not cover all potential claims made against us or be sufficient to indemnify us for all liability that may be imposed. Any claim against us, regardless of its merit, could be costly, divert management’s attention and operational resources, and harm our reputation.

Our directors and executive officers may also be subject to litigation. The limitation of liability and indemnification provisions that are included in our amended and restated certificate of incorporation, our amended and restated bylaws and indemnification agreements that we have entered into with our directors and executive officers provide that we will indemnify our directors and officers to the fullest extent permitted by Delaware law and may discourage stockholders from bringing a lawsuit against our directors and executive officers for breach of their fiduciary duties. Such provisions may also reduce the likelihood of derivative

litigation against our directors and executive officers, even though an action, if successful, might benefit us and other stockholders. Further, a stockholder’s investment may be harmed to the extent that we pay the costs of settlement and damage awards against our directors and executive officers as required by these indemnification provisions. We have obtained insurance policies under which, subject to the limitations of the policies, coverage is provided to our directors and executive officers against loss arising from claims made by reason of breach of fiduciary duty or other wrongful acts as a director or executive officer, including claims relating to securities matters, and to us with respect to payments that may be made by us to these directors and executive officers pursuant to our indemnification obligations or otherwise as a matter of law. These insurance policies may not cover all potential claims made against our directors and executive officers, may not be available to us in the future at a reasonable rate and may not be adequate to indemnify us for all liability that may be imposed.

As litigation is inherently unpredictable, we cannot assure you that any potential claims or disputes will not harm our business, results of operations and financial condition.

We do not own the Hornbeck Brands but may use the Hornbeck Brands pursuant to the terms of a license granted by HFR, and our business may be materially harmed if we breach our license agreement or it is terminated.

Pursuant to the Third Amended and Restated Trade Name and Trademark License Agreement, dated September 4, 2020 (the “License Agreement”) between our subsidiary Hornbeck Offshore Operators, LLC (“HOO”) and HFR, LLC (“HFR”), we have an exclusive license to use the various Hornbeck trade names and trademarks provided in the License Agreement, which include “Hornbeck,” “Hornbeck Offshore,” “Hornbeck Offshore Services,” “HOS,” “HOSMAX,” “HOSS” and our current horse head logos (the “Hornbeck Brands”). The License Agreement will remain in force and effect for as long as HOO uses the Hornbeck Brands in accordance with the terms of the License Agreement.

The license to the Hornbeck Brands granted to us under the License Agreement will terminate five years after our initial public offering, and there is no guarantee that we will be able to enter into or replace it with a new license agreement on commercially reasonable terms or terms that are substantially similar to the terms in the License Agreement. In addition, the License Agreement may be terminated by HFR in its entirety under certain circumstances, including if Todd Hornbeck ceases to hold the offices of Chairman, President and CEO of HOO or Hornbeck Offshore Services, Inc. with or without cause. Termination of the License Agreement would eliminate our rights to use the Hornbeck Brands and may result in our having to negotiate a new agreement with less favorable terms or change our corporate name and undergo other significant rebranding efforts. Loss of the rights to use the Hornbeck Brands could disrupt our recognition in the marketplace, damage any goodwill we may have generated, and otherwise have a material adverse effect on us. These rebranding efforts may require significant resources and expenses and may affect our ability to attract and retain customers, all of which may have a material adverse effect on our business, contracts, financial condition, operating results, liquidity and prospects.

Our success also depends in part upon successful prosecution, maintenance, enforcement and protection of our owned and licensed intellectual property, including the Hornbeck Brands that we license from HFR. Under the License Agreement, we are obligated to take actions to obtain, maintain, enforce and protect the Hornbeck Brands. Should we fail to maintain, enforce or protect the Hornbeck Brands or other intellectual property, we could be materially harmed.

Defending against intellectual property claims could adversely affect our business.

We may from time to time face allegations that we are infringing, misappropriating or otherwise violating the intellectual property rights of third parties, including the intellectual property rights of our competitors. We may be unaware of the intellectual property rights that others may claim cover some or all of our technology or services. Irrespective of the validity of any such claims, we could incur significant costs and diversion of

resources in defending against them, and there is no guarantee any such defense would be successful, which could have a material adverse effect on our business, contracts, financial condition, operating results, liquidity and prospects.

Even if these matters do not result in litigation or are resolved in our favor or without significant cash settlements, these matters, and the time and resources necessary to litigate or resolve them, could divert the time and resources of our management team and harm our business, our operating results and our reputation.

Subjective estimates and judgments used by management in the preparation of our financial statements, including estimates and judgments that may be required by new or changed accounting standards, may impact our financial condition and results of operations.

The preparation of financial statements requires management to make estimates and judgments that affect the reported amounts of assets, liabilities, revenue and expenses. Due to the inherent uncertainty in making estimates, results reported in future periods may be affected by changes in estimates reflected in our financial statements for earlier periods. Estimates and judgments are continually evaluated and are based on historical experience and other factors, including expectations of future events that are believed to be reasonable under the circumstances. From time to time, there may be changes in the financial accounting and reporting standards that govern the preparation of our financial statements. These changes can materially impact how we record and report our financial condition and results of operations. In some instances, we could be required to apply a new or revised standard retrospectively. If the estimates and judgments we use in preparing our financial statements are subsequently found to be incorrect or if we are required to restate prior financial statements, our financial condition or results of operations could be significantly affected.

Changes in tax laws could adversely affect our business, financial condition and results of operations.

Changes in tax laws in any of the multiple jurisdictions in which we operate, or adverse outcomes from tax audits that we may be subject to in any such jurisdiction, could result in an unfavorable change in our effective tax rate, which could adversely affect our business, financial condition and operating results. In particular, in the United States, the recently enacted IRA 2022 introduced, among other changes, a 15% corporate minimum tax on certain United States corporations and a 1% excise tax on certain stock redemptions by publicly traded United States corporations. We do not currently expect that the 15% corporate minimum tax would have an effect on our overall effective tax rate. However, we are currently unable to predict the ultimate impact of the IRA 2022 or any further changes in U.S. tax law on our business, financial condition and operating results. In addition, tax laws are dynamic and subject to change as new laws are passed and new interpretations of the law are issued or applied. For example, the Biden administration has proposed several tax increases, including raising the U.S. corporate income tax rate from 21% to 28%.

Further, we operate in a number of jurisdictions, which contributes to the volatility of our effective tax rate. Changes in tax laws or the interpretation of tax laws in the jurisdictions in which we operate may affect our effective tax rate. For example, a number of countries, as well as organizations such as the Organization for Economic Cooperation and Development, support a global minimum tax initiative. Such countries and organizations are also actively considering changes to existing tax laws or have proposed new tax laws that could increase our tax obligations. In addition, we are required under GAAP to place valuation allowances against our NOL carryforwards and other deferred tax assets in certain tax jurisdictions. These valuation allowances result from analysis of positive and negative evidence supporting the realization of tax benefits. Negative evidence includes a cumulative history of pre-tax operating losses in specific tax jurisdictions. Changes in valuation allowances have historically resulted in material fluctuations in our effective tax rate. Economic conditions or changes in tax laws may dictate the continued imposition of current valuation allowances and, potentially, the establishment of new valuation allowances. While significant valuation allowances remain, our effective tax rate will likely continue to experience significant fluctuations. Furthermore, certain foreign jurisdictions may take actions to delay our ability to collect value-added tax refunds.

Our ability to utilize our NOL carryforwards may be limited.

As of December 31, 2022, we had deferred tax assets related to U.S. federal NOL carryforwards of approximately $55.5 million and state NOL carryforwards of approximately $5.4 million. Our ability to utilize our U.S. federal and state NOL carryforwards depends on many factors, including our future income, which cannot be assured. Section 382 of the Internal Revenue Code of 1986, as amended (the “Code”) generally imposes an annual limitation on the amount of NOLs that may be used to offset taxable income when a corporation has undergone an “ownership change” (as determined under Section 382 of the Code). An ownership change generally occurs if one or more stockholders (or groups of stockholders) who are each deemed to own at least 5% of such corporation’s stock increase their aggregate ownership by more than 50 percentage points over their lowest ownership percentage within a rolling three-year period. In the event that an ownership change occurs, utilization of the relevant corporation’s NOLs would be subject to an annual limitation under Section 382 of the Code, generally determined, subject to certain adjustments, by multiplying (i) the fair market value of the corporation’s equity at the time of the ownership change by (ii) the highest percentage approximately equivalent to the yield on long-term tax-exempt bonds for any month in the three-calendar month period ending with the calendar month in which the ownership change occurs. Any unused annual limitation may be carried over to later years. A portion of our NOLs is already limited under Section 382 of the Code as a result of an ownership change that occurred in connection with our emergence from Chapter 11 bankruptcy on September 4, 2020. Future changes in our stock ownership, which may be outside of our control, may trigger an additional ownership change and, consequently, additional limitations under Section 382 of the Code. Any such limitations on our ability to use our NOL carryforwards to offset future taxable income could adversely affect our future cash flows. Many states have similar laws, in addition to laws that suspend, reduce or eliminate the ability to carry losses forward. Accordingly, our state NOLs totaling $72.4 million may be carried forward indefinitely, but the deductibility of such state NOLs may be limited to the lesser of 72% of the current year taxable income or the available NOL carryforward for returns filed on or after July 1, 2015.

We are subject to various anti-corruption laws, including the U.S. Foreign Corrupt Practices Act, the United Nations Convention Against Corruption and the Brazil Clean Company Act. These laws generally prohibit companies and their intermediaries from engaging in bribery or making other improper payments of cash (or anything else of value) to government officials and other persons in order to obtain or retain business or to obtain an improper business benefit. Our business operations also must be conducted in compliance with applicable economic sanctions laws and regulations, including rules administered by the U.S. Department of the Treasury’s Office of Foreign Assets Control, the U.S. Department of State, the U.S. Department of Commerce, the United Nations Security Council, and other relevant authorities.

We strive to conduct our business activities in compliance with relevant anti-corruption laws and regulations, and we have adopted proactive procedures to promote such compliance. While we are not aware of issues of historical noncompliance, full compliance cannot be guaranteed. Violations of anti-corruption laws and regulations, or even allegations of such violations, could result in civil or criminal penalties or other fines or sanctions, including prohibition of our participating in or curtailment of business operations in those jurisdictions and the seizure of vessels or other assets, which could have a material adverse effect on our business, financial condition and results of operation. Moreover, we may be held liable for actions taken by local partners or agents in violation of applicable anti-bribery laws, even though these partners or agents may themselves not be subject to such laws. Further, changes to the applicable laws and regulations, and/or significant business growth, may result in the need for increased compliance-related resources and costs.

Our Creditor Warrants are accounted for as liabilities and changes in the value of these warrants could have a material effect on our financial results.

Our Creditor Warrants (warrants entitling holders to purchase common stock at a strike price set at an enterprise value of $621.2 million, or $27.83 per share (subject to adjustment)), were issued upon the Company’s emergence from Chapter 11 bankruptcy on the effective date of the Plan. ASC 815-40 provides for the remeasurement of the fair value of such derivatives at each balance sheet date, with a resulting non-cash gain or loss related to the change in the fair value being recognized in the consolidated statements of operations. As a result of the recurring fair value measurement, our financial statements and results of operations may fluctuate quarterly based on factors which are outside of our control. Due to the recurring fair value measurement, we expect that we will recognize non-cash gains or losses on the Creditor Warrants each reporting period and that the amount of such gains or losses could be material. See Note 11 to our Annual Financial Statements and Note 7 to our Quarterly Financial Statements included elsewhere in this prospectus for additional information about the Creditor Warrants.

Risks Relating to Our Indebtedness

Our indebtedness could materially adversely affect our financial condition.

We have a significant amount of indebtedness. As of September 30, 2023, our total indebtedness was approximately $349.0 million, consisting of outstanding principal amount of Exit Second Lien Term Loans under the Second Lien Credit Agreement (as defined herein).

Our substantial indebtedness could have important consequences, including the following:

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making it more difficult for us to satisfy our other obligations;

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limiting our ability to obtain additional financing to fund future working capital, capital expenditures, acquisitions or other general corporate requirements;

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requiring us to dedicate a substantial portion of our cash flows to debt service payments instead of other purposes, thereby reducing the amount of cash flows available for working capital, capital expenditures, acquisitions and other general corporate purposes;

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increasing our vulnerability to general adverse economic and industry conditions;

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limiting our flexibility in planning for and reacting to changes in the industry in which we compete;

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placing us at a disadvantage compared to other, less leveraged competitors; and

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increasing our cost of borrowing.

In addition, the Second Lien Credit Agreement contains restrictive covenants that limit our ability to engage in activities that may be in our long-term best interest. Our failure to comply with those covenants could result in an event of default which, if not cured or waived, could result in the acceleration of all our debt and/or the exercise of other remedies by the lenders and other secured parties thereunder. See “Management’s Discussion and Analysis of Financial Condition and Results of Operations—Liquidity and Capital Resources.”

Our ability to make scheduled payments on or refinance our debt obligations depends on our financial condition and operating performance, which are subject to prevailing economic and competitive conditions and to financial, business, legislative, regulatory and other factors, some of which are beyond our control. We cannot be sure that our business will generate sufficient cash flows from operating activities, or that future borrowings will be available, to permit us to pay the principal, premium, if any, and interest on our indebtedness.

If our cash flows and capital resources are insufficient to fund our debt service obligations, we could face substantial liquidity problems and could be forced to reduce or delay investments and capital expenditures or to dispose of material assets or operations, seek additional debt or equity capital or restructure or refinance our indebtedness. The loans under the Second Lien Credit Agreement mature in March 2026. We may not be able to implement any such alternative measures, if necessary, on commercially reasonable terms or at all and, even if successful, those alternative actions may not allow us to meet our scheduled debt service obligations. The Second Lien Credit Agreement restricts our ability to dispose of assets and use the proceeds from those dispositions and may also restrict our ability to raise debt or equity capital to be used to repay other indebtedness when it becomes due. We may not be able to consummate those dispositions or to obtain proceeds in an amount sufficient to meet any debt service obligations then due. See “Management’s Discussion and Analysis of Financial Condition and Results of Operations—Liquidity and Capital Resources—Debt Agreements.”

Our inability to generate sufficient cash flows to satisfy our debt obligations, or to refinance our indebtedness on commercially reasonable terms or at all, would have a material adverse effect on our financial condition and results of operations.

If we cannot make scheduled payments on our debt, we will be in default, and the lenders under the Second Lien Credit Agreement could accelerate our debt and/or exercise other remedies and we could be forced into bankruptcy or liquidation.

We and our subsidiaries may be able to incur significant additional indebtedness in the future. Although the Second Lien Credit Agreement contains restrictions on the incurrence of additional indebtedness, these restrictions are subject to a number of qualifications and exceptions, and the additional indebtedness incurred in compliance with these restrictions could be substantial. For instance, under the Second Lien Credit Agreement, we are permitted to incur up to $75 million of first lien debt, without consent from the lenders under the Second Lien Credit Agreement. These restrictions on the incurrence of additional indebtedness also will not prevent us from incurring obligations that do not constitute indebtedness, such as the remaining $53.8 million commitment under the MPSV construction contracts.

The terms of the Second Lien Credit Agreement restrict our current and future operations, including our ability to respond to changes or to take certain actions.

The Second Lien Credit Agreement contains a number of restrictive covenants that impose significant operating and financial restrictions on us and may limit our ability to engage in acts that may be in our long-term best interest. See “Management’s Discussion and Analysis of Financial Condition and Results of Operations—Liquidity and Capital Resources—Debt Agreements.” The restrictive covenants under the Second Lien Credit Agreement include restrictions on our ability to:

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incur additional indebtedness and guarantee indebtedness;

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pay dividends or make other distributions or repurchase or redeem our capital stock;

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prepay, redeem or repurchase subordinated debt;

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issue certain preferred stock or similar equity securities;

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make loans and investments;

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sell or otherwise dispose of assets or property, except in certain circumstances;

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create or incur liens;

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enter into transactions with affiliates;

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enter into agreements restricting our subsidiaries’ ability to pay dividends, to enter into and perform certain intercompany debt transactions and to transfer assets to us or other subsidiaries;

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permit the sum of our and our subsidiaries’ unrestricted cash and cash equivalents, determined in accordance with GAAP (including any cash and cash equivalents held in an account subject to a control agreement in favor of the secured parties under the Second Lien Credit Agreement and any unused commitments available to be borrowed under any permitted debt facility) to be less than $25 million as of the last day of any fiscal quarter; and

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make fundamental changes in our business, corporate structure or capital structure, including, among other things, entering into mergers, acquisitions, consolidations and other business combinations.

As a result of these restrictions, we may be:

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limited in how we conduct our business;

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unable to raise additional debt or equity financing to operate during general economic or business downturns; or

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unable to compete effectively or to take advantage of new business opportunities. These restrictions may affect our ability to grow in accordance with our strategy.

A breach of the covenants or restrictions under the Second Lien Credit Agreement could result in a default or an event of default. Such a default may allow the creditors to accelerate the related debt and/or exercise other remedies and may result in the acceleration of any other debt to which a cross-acceleration or cross-default provision applies. In exacerbated or prolonged circumstances, one or more of these events could result in our bankruptcy or liquidation.

Risks Related to this Offering and Ownership of Our Common Stock

No market currently exists for our common stock, and an active, liquid trading market for our common stock may not develop, which may cause shares of our common stock to trade at a discount from the initial offering price and make it difficult to sell the shares of common stock you purchase.

Prior to this offering, there has not been a public trading market for shares of our common stock. We cannot predict the extent to which investor interest in us will lead to the development of a trading market or how active and liquid that market may become. If an active and liquid trading market does not develop or continue, you may have difficulty selling your shares of our common stock at an attractive price or at all. The initial public offering price per share of common stock will be determined by negotiations between us and the underwriters, and may not be indicative of the price at which shares of our common stock will trade in the public market after this offering. The market price of our common stock may decline below the initial offering price and you may not be able to sell your shares of our common stock at or above the price you paid in this offering, or at all.

You will incur immediate and substantial dilution.

Prior stockholders have paid substantially less per share of our common stock than the price in this offering. The initial public offering price per share of our common stock will be substantially higher than the as adjusted net tangible book value per share of outstanding common stock prior to completion of this offering. Based on our as adjusted net tangible book value as of September 30, 2023, and upon the issuance and sale of shares of our common stock by us at an initial public offering price of $ per share (which is the midpoint of the estimated offering price range shown on the cover page of this prospectus), if you purchase our common stock in this offering, you will pay more for your shares than the amounts paid by our existing stockholders for their shares and you will suffer immediate dilution of approximately $ per share. Dilution is the amount by which the offering price paid by purchasers of our common stock in this offering will exceed the as adjusted net tangible book value per share of our common stock upon completion of this offering. If the underwriters exercise

their option to purchase additional shares you will experience additional dilution. You may experience additional dilution upon future equity issuances or upon the exercise of our outstanding Jones Act Warrants or Creditor Warrants, exercise of options to purchase our common stock or the settlement of restricted stock units granted to our employees, executive officers and directors under our 2020 Management Incentive Plan or our 2023 Equity Incentive Plan. See “Dilution.”

Our stock price may change significantly following this offering, and you may not be able to resell shares of our common stock at or above the price you paid or at all, and you could lose all or part of your investment as a result.

We and the underwriters will negotiate to determine the initial public offering price. You may not be able to resell your shares at or above the initial public offering price due to a number of factors such as those listed in “—Risks Relating to Our Business” and the following:

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results of operations that vary from the expectations of securities analysts and investors;

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results of operations that vary from those of our competitors;

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changes in expectations as to our future financial performance, including financial estimates and investment recommendations by securities analysts and investors;

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changes in economic conditions for companies in our industry;

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changes in market valuations of, or earnings and other announcements by, companies in our industry;

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declines in the market prices of stocks generally, particularly those of companies in our industry;

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additions or departures of key management personnel;

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strategic actions by us or our competitors;

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announcements by us, our competitors or our suppliers of significant contracts, price reductions, new products or technologies, acquisitions, joint marketing relationships, joint ventures, other strategic relationships or capital commitments;

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dilution as a result of the exercise of our outstanding Jones Act Warrants or Creditor Warrants;

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changes in preference of our customers;

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changes in general economic or market conditions or trends in our industry or the economy as a whole;

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changes in business or regulatory conditions;

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future sales of our common stock or other securities;

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investor perceptions of or the investment opportunity associated with our common stock relative to other investment alternatives;

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the public’s response to press releases or other public announcements by us or third parties, including our filings with the SEC;

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announcements relating to litigation or governmental investigations;

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guidance, if any, that we provide to the public, any changes in this guidance or our failure to meet this guidance;

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the development and sustainability of an active trading market for our stock;

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changes in accounting principles; and

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other events or factors, including those resulting from informational technology system failures and disruptions, natural disasters, war, acts of terrorism, pandemics or responses to these events.

Furthermore, the stock market may experience extreme volatility that, in some cases, may be unrelated or disproportionate to the operating performance of particular companies. These broad market and industry fluctuations may adversely affect the market price of our common stock, regardless of our actual operating performance. In addition, price volatility may be greater if the public float and trading volume of our common stock is low.

In the past, following periods of market volatility, stockholders have instituted securities class action litigation. If we were to become involved in securities litigation, it could have a substantial cost and divert resources and the attention of executive management from our business regardless of the outcome of such litigation.

Because we have no current plans to pay cash dividends on our common stock, you may not receive any return on investment unless you sell your common stock for a price greater than that which you paid for it.

We have no current plans to pay cash dividends on our common stock. The declaration, amount and payment of any future dividends on our common stock will be at the sole discretion of our Board of Directors. Our Board of Directors may take into account general and economic conditions, our financial condition and results of operations, our available cash and current and anticipated cash needs, capital requirements, contractual, legal, tax and regulatory restrictions and implications on the payment of dividends by us to our stockholders or by our subsidiaries to us, including restrictions under the Second Lien Credit Agreement, and such other factors as our Board of Directors may deem relevant. See “Dividend Policy.”

As a result, you may not receive any return on an investment in our common stock unless you sell our common stock for a price greater than your purchase price.

Our common stock is subject to restrictions on foreign ownership and possible required divestiture by non-U.S. Citizen stockholders.

Hornbeck could lose the privilege of owning and operating vessels in the coastwise trade if non-U.S. Citizens were to own or control, in the aggregate, more than 25% of common stock in Hornbeck. Such loss could have a material adverse effect on our results of operations.

Our amended and restated certificate of incorporation and our amended and restated bylaws authorize our board of directors to establish with respect to any class or series of capital stock of Hornbeck certain rules, policies and procedures, including procedures with respect to transfer of shares, to ensure compliance with the Jones Act. In order to provide a reasonable margin for compliance with the Jones Act, our amended and restated certificate of incorporation provides that all non-U.S. Citizens in the aggregate may not own more than 24% of the outstanding shares of our common stock.

As of December 31, 2022, less than 24% of our outstanding common stock was owned by non-U.S. Citizens. At and during such time that the permitted limit of ownership by non-U.S. Citizens is reached with respect to shares of common stock, Hornbeck will be unable to issue any further shares of common stock or approve transfers of common stock to non-U.S. Citizens. Any purported issuance or transfer of shares of our common stock in violation of these ownership provisions will be ineffective to issue or transfer the common stock or any voting, dividend or other rights associated with them. The existence and enforcement of these requirements could have an adverse impact on the liquidity or market value of our equity securities in the event that U.S. Citizens were unable to transfer Hornbeck shares to non-U.S. Citizens. Furthermore, under certain circumstances, this ownership requirement could discourage, delay or prevent a change of control of Hornbeck.

If securities analysts do not publish research or reports about our business or if they downgrade our stock or our sector, our stock price and trading volume could decline.

The trading market for our common stock will rely in part on the research and reports that industry or financial analysts publish about us or our business. We do not control these analysts. Furthermore, if one or more

of the analysts who do cover us downgrade our stock or our industry, or the stock of any of our competitors, or publish inaccurate or unfavorable research about our business, the price of our stock could decline. If one or more of these analysts stop covering us or fail to publish reports on us regularly, we could lose visibility in the market, which in turn could cause our stock price or trading volume to decline.

As a public company, we will incur significant legal, regulatory, finance, accounting, investor relations and other expenses that we have not incurred as a private company, including costs associated with public company reporting requirements. As a result of having publicly traded common stock, we will also be required to comply with, and incur costs associated with such compliance with, the Sarbanes-Oxley Act and the Dodd-Frank Wall Street Reform and Consumer Protection Act, or the Dodd-Frank Act, as well as rules and regulations implemented by the SEC and the exchange on which we list our shares. The expenses incurred by public companies generally for reporting and corporate governance purposes have been increasing. We expect these rules and regulations to increase our legal and financial compliance costs and to make some activities more time-consuming and costly. Our management will need to devote a substantial amount of time to ensure that we comply with all of these requirements, diverting the attention of management away from revenue-producing activities. These laws and regulations also could make it more difficult or costly for us to obtain certain types of insurance, including director and officer liability insurance, and we may be forced to accept reduced policy limits and coverage or incur substantially higher costs to obtain the same or similar coverage. These laws and regulations could also make it more difficult for us to attract and retain qualified persons to serve on our Board of Directors, our board committees or as our executive officers. Furthermore, if we are unable to satisfy our obligations as a public company, we could be subject to delisting of our common stock, fines, sanctions and other regulatory action and potentially civil litigation.

Failure to comply with requirements to design, implement and maintain effective internal control over financial reporting could have a material adverse effect on our business and stock price.

As a privately-held company, we were not required to evaluate our internal control over financial reporting in a manner that meets the standards of publicly traded companies required by Section 404(a) of the Sarbanes-Oxley Act, or “Section 404.”

As a public company, we will have significant requirements for enhanced financial reporting and internal controls. The process of designing and implementing effective internal controls is a continuous effort that requires us to anticipate and react to changes in our business and the economic and regulatory environments and to expend significant resources to maintain a system of internal controls that is adequate to satisfy our reporting obligations as a public company. If we are unable to establish or maintain appropriate internal financial reporting controls and procedures, it could cause us to fail to meet our reporting obligations on a timely basis, result in material misstatements in our consolidated financial statements and harm our results of operations. In addition, we will be required, pursuant to Section 404, to furnish a report by management on, among other things, the effectiveness of our internal control over financial reporting in the second annual report following the completion of this offering. This assessment will need to include disclosure of any material weaknesses identified by our management in our internal control over financial reporting. The rules governing the standards that must be met for our management to assess our internal control over financial reporting are complex and require significant documentation, testing and possible remediation. Testing and maintaining internal controls may divert our management’s attention from other matters that are important to our business. In addition, our independent registered public accounting firm will be required to issue an attestation report on the effectiveness of our internal control over financial reporting in the second annual report following the completion of this offering.

In connection with the implementation of the necessary procedures and practices related to internal control over financial reporting, we may identify deficiencies that we may not be able to remediate in time to meet the

deadline imposed by the Sarbanes-Oxley Act for compliance with the requirements of Section 404. In addition, we may encounter problems or delays in completing the remediation of any deficiencies identified by our independent registered public accounting firm in connection with the issuance of their attestation report.

Our testing, or the subsequent testing by our independent registered public accounting firm, may reveal deficiencies in our internal controls over financial reporting that are deemed to be material weaknesses which could result in a material misstatement of our annual or quarterly consolidated financial statements or disclosures that may not be prevented or detected.

We may not be able to conclude on an ongoing basis that we have effective internal control over financial reporting in accordance with Section 404 or our independent registered public accounting firm may not issue an unqualified opinion. If either we are unable to conclude that we have effective internal control over financial reporting or our independent registered public accounting firm is unable to provide us with an unqualified opinion, investors could lose confidence in our reported financial information, which could have a material adverse effect on the trading price of our common stock.

Future sales, or the perception of future sales, by us or our existing stockholders in the public market following this offering could cause the market price for our common stock to decline.

After this offering, the sale of shares of our common stock in the public market, or the perception that such sales could occur, including sales by our existing stockholders and holders of our Jones Act Warrants and Creditor Warrants, could harm the prevailing market price of shares of our common stock. These sales, or the possibility that these sales may occur, also might make it more difficult for us to sell equity securities in the future at a time and at a price that we deem appropriate.

Upon completion of this offering, we will have a total of shares of our common stock outstanding ( shares if the underwriters exercise in full their option to purchase additional shares). Additionally, shares of our common stock will be issuable upon the exercise of Jones Act Warrants and shares of our common stock will be issuable upon the exercise of Creditor Warrants, with an exercise price of $0.00001 per share and $27.83 per share, respectively, and shares of our common stock will be issuable upon exercise of outstanding options, at an average weighted exercise price of $10.00, or upon settlement of restricted stock units under the 2020 Management Incentive Plan. Of the outstanding shares, the shares sold in this offering (or shares if the underwriters exercise in full their option to purchase additional shares) will be freely tradable without restriction or further registration under the Securities Act of 1933, as amended (the “Securities Act”), except that any shares held by our affiliates, as that term is defined under Rule 144 of the Securities Act, or Rule 144, including our directors, executive officers and other affiliates (including our principal stockholders), may be sold only in compliance with the limitations described in “Shares Eligible for Future Sale.”

The shares of common stock held by our principal stockholders and certain of our directors and executive officers after this offering, representing % of the total outstanding shares of our common stock following this offering, will be “restricted securities” within the meaning of Rule 144 and subject to certain restrictions on resale. Restricted securities may be sold in the public market only if they are registered under the Securities Act or are sold pursuant to an exemption from registration such as Rule 144, as described in “Shares Eligible for Future Sale.”

In connection with this offering, we, our directors and executive officers and certain holders of our outstanding common stock prior to this offering, including our principal stockholders, will sign lock-up agreements with the underwriters that will, subject to certain exceptions, restrict the disposition of, or hedging with respect to, the shares of our common stock or securities convertible into or exchangeable for shares of common stock, each held by them for 180 days following the date of this prospectus, except with the prior written consent of J.P. Morgan Securities LLC and Barclays Capital Inc. See “Underwriting” for a description of

these lock-up agreements. J.P. Morgan Securities LLC and Barclays Capital Inc., on behalf of the underwriters, may, in their sole discretion, release all or some portion of the shares subject to the 180-day lock-up agreements prior to the expiration of such period.

Upon the expiration of the lock-up agreements described above, all of such shares (other than shares under the 2020 Management Incentive Plan that are subject to contractual transfer restrictions) will be eligible for resale in a public market, subject, in the case of shares held by our affiliates, to volume, manner of sale and other limitations under Rule 144. We expect that our principal stockholders and their respective affiliates may be considered our affiliates based on their respective expected share ownership (consisting of approximately shares held by funds, investment vehicles or accounts managed or advised by Ares or its affiliates, shares held by Whitebox and shares held by Highbridge), as well as their board designation rights. Certain other of our stockholders may also be considered affiliates at that time.

In addition, pursuant to the Securityholders Agreement (as defined below), stockholders party thereto with greater than or equal to 10% fully diluted beneficial ownership of our common stock (excluding shares issuable pursuant to the Creditor Warrants and the 2020 Management Incentive Plan) will have the right, subject to certain conditions, to require us to register the sale of their shares of our common stock under the Securities Act. See “Certain Relationships and Related Party Transactions—Securityholders Agreement.” Stockholders party to the Securityholders Agreement with greater than or equal to 2% fully diluted beneficial ownership (excluding shares issuable pursuant to the Creditor Warrants and the 2020 Management Incentive Plan) will additionally be given the option to join such electing stockholders in requiring us to register the sale of their shares of our common stock under the Securities Act. By exercising their registration rights and selling a large number of shares, such holders (including our principal stockholders) could cause the prevailing market price of our common stock to decline. Certain of our other stockholders will have “piggyback” registration rights with respect to future registered offerings of our common stock. Following completion of this offering, the shares covered by registration rights would represent approximately % of our total common stock outstanding (or % if the underwriters exercise in full their option to purchase additional shares). Registration of any of these outstanding shares of common stock would result in such shares becoming freely tradable without compliance with Rule 144 upon effectiveness of the registration statement. See “Shares Eligible for Future Sale.” It is anticipated that existing stockholders, including the principal stockholders, may exercise their registration rights to effect additional public sales of our common stock.

As soon as practicable following this offering, we intend to file one or more registration statements on Form S-8 under the Securities Act to register all shares of our common stock subject to outstanding stock options and subject to issuance upon settlement of restricted stock units the shares of our common stock subject to issuance under our 2020 Management Incentive Plan and our 2023 Equity Incentive Plan to be adopted in connection with this offering. Any such Form S-8 registration statements will automatically become effective upon filing. Accordingly, shares registered under such registration statements will be available for sale in the open market. See “Certain Relationships and Related Party Transactions—Securityholders Agreement.” We expect that the initial registration statement on Form S-8 will cover shares of our common stock.

As restrictions on resale end, or if the existing stockholders exercise their registration rights, the market price of our shares of common stock could drop significantly if the holders of these shares sell them or are perceived by the market as intending to sell them. These factors could also make it more difficult for us to raise additional funds through future offerings of our shares of common stock or other securities.

In the future, we may also issue our securities in connection with investments or acquisitions. The amount of shares of our common stock issued in connection with an investment or acquisition could constitute a material portion of our then-outstanding shares of our common stock. Any issuance of additional securities in connection with investments or acquisitions may result in additional dilution to you.

The exercise of all or any number of outstanding Jones Act Warrants or Creditor Warrants or the issuance or vesting of equity awards may dilute your ownership of shares of common stock.

Hornbeck has a number of outstanding securities that provide for the right to purchase or receive shares of common stock, including two series of warrants and certain compensatory equity awards.

As of September 30, 2023, Hornbeck had 11.4 million shares of common stock issuable upon the exercise of Jones Act Warrants and 1.6 million shares of common stock issuable upon the exercise of Creditor Warrants, with an exercise price of $0.00001 per share and $27.83 per share, respectively. Investors could be subject to voting dilution upon the exercise of such warrants, each subject to Jones Act-related foreign ownership restrictions. With respect to compensatory equity awards, a total of 2.2 million shares of our common stock have been reserved for issuance under our 2020 Management Incentive Plan as equity-based awards to Hornbeck employees, directors and certain other persons.

The grant or vesting of equity awards, including any that we may grant or assume in the future, whether under our 2020 Management Incentive Plan, our 2023 Equity Incentive Plan to be adopted in connection with this offering, or any other equity plan sponsored by Hornbeck, and the exercise of warrants and the subsequent issuance of shares of common stock, could have an adverse effect on the market for our common stock, including the price that an investor could obtain for their shares of common stock.

Risk of concentration of stockholder control

Certain of our stockholders, including our principal stockholders, have significant influence over us as a result of their share ownership. This concentration could lead to conflicts of interest and difficulties for non-insider investors to effect corporate changes, and could adversely affect our Company’s share price. Our principal stockholders, collectively, would hold approximately % of our issued and outstanding shares of common stock upon the completion of this offering (giving effect to the exercise of our outstanding Jones Act Warrants and Creditor Warrants) and have the ability to influence all matters submitted to our stockholders for approval (including the election and removal of directors and any merger, consolidation or sale of all or substantially all of our assets). Accordingly, this concentration of ownership may have the effect of delaying, deferring or preventing a change in control of our Company, impeding a merger, consolidation, takeover or other business combination involving us or discouraging a potential acquirer from making a tender offer or otherwise attempting to obtain control of us, which in turn could have a material adverse effect on the market price of our shares. The issuance of stock options and warrants could lead to greater concentration of share ownership among insiders and could lead to dilution of share ownership which could lead to depressed share prices. In addition, our principal stockholders may have different interests than investors in this offering.

Anti-takeover provisions in our organizational documents could delay or prevent a change of control.

Certain provisions of our amended and restated certificate of incorporation and amended and restated bylaws may have an anti-takeover effect and may delay, defer or prevent a merger, acquisition, tender offer, takeover attempt, or other change of control transaction that a stockholder might consider in its best interest, including those attempts that might result in a premium over the market price for the shares held by our stockholders.

These provisions will provide for, among other things:

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limitations on the removal of directors;

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establishing advance notice provisions for stockholder proposals and nominations for elections to the board of directors to be acted upon at meetings of stockholders;

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the requirement that the affirmative vote of at least 75% of the voting power of the Fully Diluted Securities (as defined in the Securityholders Agreement), which must include each Appointing Person (as defined in the Securityholders Agreement), to amend, waive, terminate or otherwise modify our amended and restated bylaws or certificate of incorporation; and

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establishing advance notice and certain information requirements for nominations for election to our Board of Directors or for proposing matters that can be acted upon by stockholders at stockholder meetings.

These anti-takeover provisions could make it more difficult for a third party to acquire us, even if the third party’s offer may be considered beneficial by many of our stockholders. As a result, our stockholders may be limited in their ability to obtain a premium for their shares in such circumstances. See “Description of Capital Stock and Warrants.”

Our Board of Directors will be authorized to issue and designate shares of our preferred stock without stockholder approval.

Our amended and restated certificate of incorporation authorizes our Board of Directors, without the approval of our stockholders, to issue shares of our preferred stock, subject to limitations prescribed by applicable law, rules and regulations and the provisions of our amended and restated certificate of incorporation, as shares of preferred stock in series, to establish from time to time the number of shares to be included in each such series and to fix the designation, powers, preferences and rights of the shares of each such series and the qualifications, limitations or restrictions thereof. The powers, preferences and rights of these series of preferred stock may be senior to or on parity with our common stock, which may reduce its value.

Our amended and restated certificate of incorporation designates the Court of Chancery of the State of Delaware as the sole and exclusive forum for certain types of actions and proceedings that may be initiated by our stockholders, which could limit our stockholders’ ability to obtain a favorable judicial forum for disputes with us or our directors, officers, employees or agents.

Our amended and restated certificate of incorporation provides that, unless we consent in writing to the selection of an alternative forum, the Court of Chancery of the State of Delaware will, to the fullest extent permitted by applicable law, be the sole and exclusive forum for (i) any derivative action or proceeding brought on our behalf, (ii) any action asserting a claim of breach of a fiduciary duty owed by any of our directors, officers, employees or agents to us or our stockholders, (iii) any action asserting a claim arising pursuant to any provision of the Delaware General Corporation Law (the “DGCL”), our amended and restated certificate of incorporation or our amended and restated bylaws, or (iv) any action asserting a claim against us that is governed by the internal affairs doctrine, in each such case subject to such Court of Chancery having personal jurisdiction over the indispensable parties named as defendants therein. Notwithstanding the foregoing sentence, the federal district courts of the United States of America will be the exclusive forum for the resolution of any complaint asserting a cause of action arising under U.S. federal securities laws, including the Securities Act and the Exchange Act. Any person or entity purchasing or otherwise acquiring any interest in shares of our capital stock will be deemed to have notice of, and consented to, the provisions of our amended and restated certificate of incorporation described in the preceding sentences. This choice of forum provision may limit a stockholder’s ability to bring a claim in a judicial forum that it finds favorable for disputes with us or our directors, officers, employees or agents, which may discourage such lawsuits against us and such persons. Alternatively, if a court were to find these provisions of our amended and restated certificate of incorporation inapplicable to, or unenforceable in respect of, one or more of the specified types of actions or proceedings, we may incur additional costs associated with resolving such matters in other jurisdictions, which could adversely affect our business, financial condition or results of operations.

USE OF PROCEEDS

We intend to use the net proceeds to us from this offering for general corporate purposes.

A $1.00 increase (decrease) in the assumed initial public offering price of $ per share, based on the mid-point of the estimated offering price range set forth on the cover page of this prospectus, would increase (decrease) the net proceeds to us from this offering by approximately $ million, assuming the number of shares offered by us, as set forth on the cover page of this prospectus, remains the same and after deducting estimated underwriting discounts and commissions and estimated offering expenses payable by us. An increase (decrease) of 1,000,000 shares from the expected number of shares to be sold by us in this offering, assuming no change in the assumed initial public offering price per share, the mid-point of the estimated offering price range set forth on the cover page of this prospectus, would increase (decrease) our net proceeds from this offering by $ million. To the extent we raise more proceeds in this offering than currently estimated, we will . To the extent we raise less proceeds in this offering than currently estimated, we will use less proceeds for general corporate purposes.

We will not receive any proceeds from the sale of our common stock by the selling stockholders. We will, however, bear the costs associated with the sale of shares of common stock by the selling stockholders, other than underwriting discounts and commissions. For more information, see “Principal and Selling Stockholders” and “Underwriting.”

DIVIDEND POLICY

We do not currently anticipate paying any dividends on our common stock immediately following this offering and currently expect to retain all future earnings for use in the operation and expansion of our business. Following this offering and upon repayment of certain outstanding indebtedness, we may reevaluate our dividend policy. The declaration, amount and payment of any future dividends on our common stock will be at the sole discretion of our Board of Directors, which may take into account general and economic conditions, our financial condition and results of operations, our available cash and current and anticipated cash needs, capital requirements, contractual, legal, tax and regulatory restrictions and implications on the payment of dividends by us to our stockholders or by our subsidiaries to us, including restrictions under the Second Lien Credit Agreement, and such other factors as our Board of Directors may deem relevant. If we elect to pay such dividends in the future, we may reduce or discontinue entirely the payment of such dividends at any time.

CAPITALIZATION

The following table sets forth our cash and cash equivalents and capitalization as of September 30, 2023:

•

on an actual basis; and

•

on an as adjusted basis for this share offering at the assumed initial offering price of $ per share (the midpoint of the estimated offering price range on the cover page of this prospectus), after deducting underwriting discounts, commissions and estimated offering expenses and the application of the net proceeds to us as described in “Use of Proceeds.”

You should read the information in this table in conjunction with our Financial Statements and the notes to those Financial Statements appearing in this prospectus, as well as the information under the headings “Use of Proceeds” and “Management’s Discussion and Analysis of Financial Condition and Results of Operations.”


	As of September 30, 2023
*(in thousands, except for share amounts)*	Actual		As Adjusted
Cash and cash equivalents^{(1) (2)}	$	146,298	$

Long-term indebtedness
Exit Second Lien Term Loans⁽³⁾	$	349,001	$

Stockholders’ equity:
Common stock, including paid-in capital: par value $0.00001 per share; 50,000,000 shares authorized; 5,553,834 shares issued and outstanding, actual; shares issued and outstanding, as adjusted⁽²⁾	$	—
Additional paid in capital⁽²⁾		209,066
Retained earnings		120,841
Accumulated other comprehensive income		1,106

Total stockholders’ equity⁽²⁾	$	331,013

Total capitalization⁽²⁾	$	680,014	$

(1)

Does not give effect to (i) the expected additional $0.6 million related to post-closing modifications of the sixth vessel from the ECO Acquisitions #1 and (ii) the expected additional $61.2 million for the remaining purchase price on the four remaining vessels and $7.0 million related to the outfitting and discretionary enhancement of the acquired and to-be-acquired vessels from the ECO Acquisitions #2, both of which the Company expects to incur during the fourth quarter of 2023. Also does not give effect to $142.8 million to be incurred in connection with the delivery of the two newbuild program MPSVs and the SOV/flotel conversion.

(2)

Each $1.00 increase (decrease) in the assumed initial public offering price of $ per share, based on the midpoint of the estimated offering price range set forth on the cover page of this prospectus, would increase (decrease), as applicable, cash and cash equivalents, additional paid-in-capital, total stockholders’ equity and total capitalization by approximately $ million, assuming the number of shares offered by us, as set forth on the cover page of this prospectus, remains the same and after deducting estimated underwriting discounts and commissions and estimated offering expenses payable by us. We may also increase or decrease the number of shares we are offering. An increase (decrease) of 1,000,000 shares offered by us from the expected number of shares to be sold by us in this offering, assuming no change in the assumed initial public offering price per share, the midpoint of the estimated offering price range set forth on the cover page of this prospectus, would increase (decrease), as applicable, cash and cash equivalents, additional paid-in capital, total stockholders’ equity and total capitalization by approximately $ million, after deducting estimated underwriting discounts and commissions and estimated offering expenses payable by us.

(3)	As of November 1, 2023, we had approximately $349.0 million outstanding under the Exit Second Lien Term Loans.

DILUTION

If you invest in our common stock in this offering, your ownership interest in us will be diluted to the extent of the difference between the initial public offering price per share of our common stock and the as adjusted net tangible book value per share of our common stock after this offering. Dilution results from the fact that the per share offering price of the common stock is substantially in excess of the book value per share attributable to the shares of common stock held by existing stockholders.

Our net tangible book value as of September 30, 2023 was approximately $ million, or $ per share of our common stock. We calculate net tangible book value per share by taking the amount of our total tangible assets, reduced by the amount of our total liabilities, and then dividing that amount by the total number of shares of common stock outstanding.

After giving effect to (i) the sale of shares of our common stock in this offering by the Company and the selling stockholders at an initial public offering price of $ per share (the midpoint of the estimated offering price range shown on the cover of this prospectus), after deducting the underwriting discounts and commissions and estimated offering expenses payable by us, and (ii) the application of the net proceeds to us from this offering as set forth under “Use of Proceeds,” our as adjusted net tangible book value as of September 30, 2023 would have been $ million, or $ per share of our common stock. This amount represents an immediate increase in net tangible book value of $ per share to existing stockholders and an immediate and substantial dilution in net tangible book value of $ per share to investors purchasing shares in this offering at the initial public offering price.

The following table illustrates this dilution on a per share basis:


Initial public offering price per share of common stock (the midpoint of the estimated offering price range shown on the cover page of this prospectus)	$	$
Net tangible book value per share as of September 30, 2023	$	$
Increase in tangible book value per share attributable to investors in this offering	$	$
As adjusted net tangible book value per share after this offering	$	$
Dilution per share to investors in this offering	$	$

Dilution is determined by subtracting as adjusted net tangible book value per share of common stock after the offering from the initial public offering price per share of common stock.

If the underwriters exercise in full their option to purchase additional shares from us, the as adjusted net tangible book value per share after giving effect to the offering and the use of proceeds therefrom would be $ per share. This represents an increase in as adjusted net tangible book value of $ per share to existing stockholders and results in dilution in as adjusted net tangible book value of $ per share to investors purchasing shares in this offering at the initial public offering price.

The following table summarizes, as of September 30, 2023, the differences between the number of shares purchased from us, the total consideration paid to us, and the average price per share paid by existing stockholders and by new investors. As the table shows, new investors purchasing shares in this offering will pay an average price per share substantially higher than our existing stockholders paid. The table below is based on an initial public offering price of $ per share for shares purchased in this offering and excludes underwriting discounts and commissions and estimated offering expenses payable by us:

Shares Purchased

Total Consideration

($ in millions, except per share amounts)

Number

Amount

Avg/Share

Existing stockholders

⁽¹⁾

New investors in this offering

Total

(1)	Reflects shares owned by the selling stockholders that will be purchased by new investors as a result of this offering:

Shares Purchased

Total Consideration

Number

Amount

Avg/Share

Selling stockholders

If the underwriters were to fully exercise their option to purchase additional shares of our common stock, the percentage of shares of our common stock held by existing stockholders as of September 30, 2023 would be % and the percentage of shares of our common stock held by new investors would be %.

The discussion and tables above are based on 5,553,834 shares of our common stock outstanding as of September 30, 2023, and excludes 13 million shares of common stock issuable upon exercise of the Jones Act Warrants and Creditor Warrants, with an exercise price of $0.00001 per share and $27.83 per share, respectively, and shares of our common stock issuable upon exercise of options or settlement of restricted stock units under the 2020 Management Incentive Plan.

To the extent that outstanding Jones Act Warrants or Creditor Warrants are exercised, outstanding options or restricted stock units settle, or we grant options, restricted stock, restricted stock units or other equity-based awards to our employees, executive officers and directors in the future, or other issuances of common stock are made, there will be further dilution to new investors.

MANAGEMENT’S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS

The following Management’s Discussion and Analysis of Financial Condition and Results of Operations should be read in conjunction with the information contained in “Summary—Summary Financial and Other Data,” “Business,” “Risk Factors” and the Financial Statements and related notes included elsewhere in this prospectus. Unless the context otherwise requires, all references in this section to “the Company,” “Hornbeck,” “we,” “us,” or “our” refer to the business of Hornbeck Offshore Services, Inc. and “Effective Date” means September 4, 2020, the date the Company emerged from its Chapter 11 cases in the United States Bankruptcy Court for the Southern District of Texas, Houston Division, or the Bankruptcy Court (the “Chapter 11 Cases”). The joint prepackaged plan of reorganization filed with and confirmed by the Bankruptcy Court on May 19 and June 19, 2020, respectively, is referred to as “the Plan.” “Successor” refers to the newly reorganized entity and the related financial position and results of operations of the Company subsequent to the Effective Date. “Predecessor” refers to the Company prior to its emergence and the related financial position and results of operations through the Effective Date. Additionally, unless noted otherwise, discussions surrounding our vessels are as of October 31, 2023 and include the two vessels delivered in November 2023 and the one remaining vessel expected to be delivered by December 31, 2023 as part of the ECO Acquisitions #2, but due to supply chain constraints such delivery could extend into early 2024. Such discussions also include two partially constructed Jones Act-qualified MPSV newbuilds to be completed pursuant to our settlement with the Surety, which we expect to be delivered in 2025. Our vessels exclude the four OSVs that we operate on behalf of the U.S. Navy.

During the fourth quarter of 2022, the Company reclassified certain vessels from OSVs to MPSVs and MPSVs to OSVs based on the nature of each vessel’s current operations and technical capabilities. For purposes of the following discussion and analysis, we have comparably calculated and classified prior-period amounts to conform with the current vessel classifications.

This discussion contains forward-looking statements that involve risks and uncertainties about our business and operations and reflect our plans, estimates and beliefs. Our actual results and the timing of selected events may differ materially from those anticipated in these forward-looking statements as a result of various factors, including those we describe below, under “Risk Factors” and elsewhere in this prospectus. See “Special Note Regarding Forward-Looking Statements.”

Company Overview

given their versatility, our OSVs are being deployed in a variety of non-oilfield applications including military support services, renewable energy development for offshore wind, humanitarian aid and disaster relief, aerospace and telecommunications. Our OSVs differ from other marine service vessels in that they provide increased cargo-carrying flexibility and capacity that can transport large quantities of deck cargoes as well as various liquid and dry bulk cargoes in below deck tanks providing flexibility for a variety of jobs. Moreover, our OSVs are outfitted with advanced technologies, including dynamic positioning capabilities, which allows each vessel to safely interface with another offshore vessel, exploration and production facility or an offshore asset by maintaining an absolute or relative position when performing its work.

On May 19, 2020, the Company sought voluntary relief under Chapter 11 of the U.S. Bankruptcy Code in the Bankruptcy Court and filed a proposed joint prepackaged plan of reorganization, or the Plan. On June 19, 2020, after a confirmation hearing, the Bankruptcy Court entered a confirmation order approving the Plan. Subsequent to the confirmation, the Plan became effective after the conditions to its effectiveness were satisfied and the Company formally emerged from the Chapter 11 Cases on the Effective Date.

Since our emergence from the Chapter 11 Cases on the Effective Date, market conditions have continued to improve as the COVID-19 pandemic has subsided. As global economies have reopened, demand for hydrocarbons improved against a backdrop of rising geopolitical tensions, the war in Ukraine, the ongoing conflict in Israel and the surrounding region and constrained supply, mostly due to several years of low investment by our customers in deepwater offshore exploration and production activities. During 2022, the domestic oil price peaked at $124 per barrel, representing a near 14-year high. Over the past 12 months, the price has ranged from $67 per barrel to $94 per barrel and currently resides at $81 per barrel as of October 31, 2023. The improved outlook for oil prices is having a positive impact on spending by our customers, which is creating improved demand for our services. This improved demand has come at a time when vessel owners have kept a significant number of vessels in stack for multiple years, intensifying the demand for active vessels. The higher cost of unstacking vessels, together with labor shortages, supply chain constraints and capital restraints affecting vessel owners dampens the prospect of large-scale reactivations of stacked vessels in the short-term. These

general conditions have favorably impacted our utilization rates and our pricing. Simultaneously, however, we have experienced significant upward pressure on operating expense stemming mostly from increased wages for licensed mariners and general inflationary trends.

The current inflationary environment has affected the cost of our operations, including but not limited to increased labor, repair and maintenance, consumable supply and insurance costs, and we budgeted for an increase of approximately 20% in such costs in 2023 compared to 2022. To date, we have largely mitigated the impact on our operating margins through price escalation clauses in our customer contracts or higher pricing for our vessels operating in the spot market. If we are unable to secure price escalation clauses in our customer contracts or if market prices for our services do not increase at a rate at least commensurate with general inflation, the effects of inflation could have a materially adverse impact on our results in the future.

Recent Developments

Resumption of MPSV Newbuild Construction

Repayment of Replacement First Lien Term Loans

ECO Acquisitions

ECO Acquisitions #1

On January 10, 2022, the Company entered into definitive vessel purchase agreements with certain affiliates of ECO to acquire up to ten high-spec, 280 class DP-2 OSVs for an aggregate price of $130.0 million. In November 2022, ECO exercised an option to terminate the vessel purchase agreements relating to the last four vessels. ECO refunded initial deposits of $1.5 million in the aggregate and paid an additional amount equal to such deposits as a termination fee. After accounting for such terminations and certain purchase price adjustments, the aggregate purchase price for the ECO Acquisitions #1 was $82.4 million. Pursuant to the purchase agreements, final payment and the transfer of ownership of each of the vessels occurred on the date of delivery and acceptance for such vessel following the completion of reactivation and regulatory drydockings by ECO. The Company took delivery of the first four vessels between May and December 2022. The Company took delivery of the remaining two vessels from ECO in April and August 2023, respectively.

2023. The Company expects to incur an additional $0.6 million related to post-closing modifications of the sixth vessel during the fourth quarter of 2023. See “Management’s Discussion and Analysis of Financial Condition and Results of Operations—Liquidity and Capital Resources—Capital Expenditures.”

ECO Acquisitions #2

In October 2023, the Company took delivery of the third vessel and paid $15.3 million for the remaining 90% of the original purchase price and $0.1 million for purchase price adjustments related to discretionary enhancements. As of October 31, 2023, the Company expected to incur the remaining purchase price of $45.9 million and $6.9 million related to additional outfitting and discretionary enhancements during the fourth quarter of 2023 with respect to the two vessels delivered in November 2023 and assuming the remaining vessel is delivered by December 31, 2023.

Performance and other Key Indicators

Vessel Count, Utilization and Dayrates

Our revenues, net income and cash flows from operating activities are largely dependent upon the activity level of our marine service vessels. In analyzing our activity level, we focus primarily on vessel count (including whether vessels are active or stacked), average and effective vessel utilization, and average and effective vessel dayrates. Our activity level is largely dependent on the level of exploration, development and production activity of our oilfield customers and the demand for marine transportation services in our non-oilfield markets, all of which impact dayrates and utilization, which, in turn inform management decisions regarding vessel count and deployment. Our oilfield customers’ business activity is dependent on current and expected crude oil and natural gas prices, which fluctuate depending on expected future levels of supply and demand for crude oil and natural gas, and on estimates of the cost to find, develop and produce crude oil and natural gas reserves. Business activity for our non-oilfield customers is driven by an expanding need for specialized marine services in support of military, offshore wind and other non-oilfield applications.

The table below sets forth the average dayrates, utilization rates and effective dayrates for our owned OSVs and MPSVs and the average number and size of such vessels owned during the periods indicated. These vessels generate a substantial portion of our revenues. Excluded from the OSV and MPSV information below is the

results of operations for our shore-based port facility and vessel management services, including the four non-owned vessels managed for the U.S. Navy.


	Successor															Predecessor
	Nine Months Ended September 30, 2023			Nine Months Ended September 30, 2022			Year Ended December 31, 2022			Year Ended December 31, 2021			Period from September 5, 2020 through December 31, 2020			Period from January 1, 2020 through September 4, 2020
Offshore Supply Vessels:
Average number of OSVs⁽¹⁾		53.6			57.5			57.0			58.8			62.0			62.0
Average number of active OSVs⁽²⁾		31.8			25.5			26.7			22.2			19.6			24.2
Average OSV fleet capacity (DWT)⁽³⁾		233,587			227,611			229,001			228,256			236,430			237,338
Average OSV capacity (DWT)⁽⁴⁾		4,361			3,958			4,020			3,885			3,813			3,828
Average OSV utilization rate⁽⁵⁾		45.1	%		36.4	%		37.7	%		31.2	%		26.5	%		24.0	%
Active OSV utilization rate⁽⁶⁾		76.2	%		81.9	%		80.7	%		82.8	%		84.0	%		61.6	%
Average OSV dayrate⁽⁷⁾	$	38,927		$	30,590		$	32,305		$	19,785		$	16,082		$	17,495

Effective OSV dayrate⁽⁸⁾	$	17,556		$	11,135		$	12,179		$	6,173		$	4,262		$	4,199

Multi-Purpose Support Vessels:
Average number of MPSVs⁽¹⁾		12.0			12.0			12.0			12.0			12.0			12.0
Average number of active MPSVs⁽²⁾		11.0			10.3			10.4			8.9			9.0			9.1
Average MPSV utilization rate⁽⁵⁾		71.8	%		64.8	%		65.2	%		46.7	%		38.8	%		28.8	%
Active MPSV utilization rate⁽⁶⁾		78.3	%		75.8	%		75.0	%		63.0	%		51.7	%		37.8	%
Average MPSV dayrate⁽⁷⁾	$	63,188		$	51,715		$	53,421		$	40,245		$	36,055		$	34,893

Effective MPSV dayrate⁽⁸⁾	$	45,369		$	33,511		$	34,830		$	18,794		$	13,989		$	10,049

(1)

Represents the weighted-average number of vessels owned during the period, adjusted to reflect date of acquisition or disposition of vessels. We owned 54 and 58 OSVs and 12 MPSVs as of December 31, 2022 and December 31, 2021, respectively. We owned 54 and 56 OSVs and 12 MPSVs as of September 30, 2023 and September 30, 2022, respectively. Excluded from this data are four non-owned vessels managed for the U.S. Navy, one vessel acquired from the U.S. Department of Transportation’s Maritime Administration that is currently undergoing conversion for service as a dual-use SOV/flotel, two partially constructed Jones Act-qualified MPSV newbuilds to be completed pursuant to our settlement with the Surety, three OSVs delivered since September 30, 2023 and one remaining OSV expected to be delivered by December 31, 2023 as part of the ECO Acquisitions #2, but due to supply chain constraints such delivery could extend into early 2024. The Company also sold ten and four OSVs during 2022 and 2021, respectively, and sold two OSVs during the nine months ended September 30, 2023.

(2)

(3)	Represents the weighted-average number of OSVs owned during the period multiplied by the weighted-average capacity of OSVs during the same period.

(4)	Represents actual capacity of the OSVs owned during the period on a weighted-average basis, adjusted to reflect date of acquisition or disposition of vessels.

(5)	Utilization rates are weighted-average rates based on a 365-day year. Vessels are considered utilized when they are generating revenues.

(6)	Active utilization rate is based on a denominator comprised only of vessel-days available for service by the active fleet, which excludes the impact of inactive or stacked vessel days.

(7)	Average OSV and MPSV dayrates represent weighted-average revenue per day, which includes charter hire, crewing services and net brokerage revenues, based on the number of days during the period that the OSVs and MPSVs, respectively, generated revenues.

(8)	Effective dayrate represents the average dayrate multiplied by the average utilization rate.

Operating Expense

Our operating costs are primarily a function of total fleet size, the number of active vessels and areas of operations.

These costs include, but are not limited to:

•

wages paid to vessel crews;

•

maintenance and repairs to vessels;

•

contract-specific cost of sales;

•

marine insurance;

•

materials and supplies; and

•

routine inspections to ensure compliance with applicable regulations and to maintain certifications for our vessels with the USCG and various classification societies.

As of September 30, 2023, we had stacked 18 U.S.-flagged OSVs, three foreign-flagged OSVs and one U.S.-flagged MPSV. By removing these vessels from our active operating fleet, we significantly reduced our operating costs, including crew costs. As of September 30, 2023, our fixed operating costs were spread over 44 owned and operated vessels in active service and four vessels managed for the U.S. Navy.

In certain foreign markets in which we operate, we may be subject to higher operating costs compared to our domestic operations due to challenges and costs of staffing international operations, social taxes, local content requirements, and increased administration. We may not be able to recover higher international operating costs through higher dayrates charged to our customers. Therefore, when we increase our international complement of vessels, our gross margins may fluctuate depending on the foreign areas of operation and the complement of vessels operating domestically.

In addition to the operating costs described above, we incur fixed charges related to the depreciation of our fleet and amortization of costs for routine drydock inspections to ensure compliance with applicable regulations and to maintain certifications for our vessels with the USCG and various classification societies. The aggregate number of drydockings and other repairs undertaken in a given period determines the level of maintenance and repair expenses and marine inspection amortization charges. We capitalize costs incurred for drydock inspection and regulatory compliance and amortize such costs over the period between such drydockings, typically between 24 and 36 months. Applicable maritime regulations require us to drydock our vessels twice in a five-year period for inspection and routine maintenance and repair. If we undertake a disproportionately large number of drydockings in a particular year, comparability of results may be affected. While we can defer required drydockings of stacked vessels, we will be required to conduct such deferred drydockings prior to such vessels returning to service, which could delay their return to active service.

The table below sets forth a breakdown of our operating expenses by type and the corresponding percent of total operating expenses (in thousands except percent of total and amounts per day):


	Three Months Ended September 30,								Nine Months Ended September 30,								Twelve Months Ended December 31,
	2023				2022				2023				2022				2022				2021
Operating expense
Contract-related cost of sales	$	6,148	7.7	%	$	2,041	3.5	%	$	15,159	6.8	%	$	7,924	5.2	%	$	8,804	4.1	%	$	10,550	7.4	%
Personnel expense		52,741	65.9	%		39,722	67.9	%		143,857	64.9	%		103,702	67.4	%		144,874	67.4	%		88,623	62.1	%
Maintenance and repair		10,169	12.7	%		8,141	13.9	%		31,463	14.2	%		18,465	12.0	%		28,750	13.4	%		17,450	12.2	%
Insurance		2,412	3.0	%		2,082	3.6	%		7,343	3.3	%		5,681	3.7	%		7,935	3.7	%		8,248	5.8	%
Materials and supplies		4,092	5.1	%		2,423	4.1	%		10,685	4.8	%		6,654	4.3	%		8,554	4.0	%		5,810	4.1	%
Other		4,469	5.6	%		4,065	7.0	%		13,025	5.9	%		11,437	7.4	%		15,871	7.4	%		12,138	8.5	%

Total operating expense	$	80,031	100.0	%	$	58,474	100.0	%	$	221,532	100.0	%	$	153,863	100.0	%	$	214,788	100.0	%	$	142,819	100.0	%

Active OSV opex	$	47,466	59.3	%	$	30,398	52.0	%	$	130,503	58.9	%	$	80,585	52.4	%	$	114,702	53.4	%	$	69,123	48.4	%
Active MPSV opex		20,325	25.4	%		18,466	31.6	%		61,762	27.9	%		46,991	30.5	%		65,927	30.7	%		40,910	28.6	%
Stacked Vessel opex		4,234	5.3	%		1,986	3.4	%		6,599	3.0	%		5,351	3.5	%		6,138	2.9	%		8,622	6.0	%
Non-vessel opex		8,006	10.0	%		7,624	13.0	%		22,668	10.2	%		20,935	13.6	%		28,021	13.0	%		24,164	16.9	%

Total operating expense	$	80,031	100.0	%	$	58,474	100.0	%	$	221,532	100.0	%	$	153,863	100.0	%	$	214,788	100.0	%	$	142,819	100.0	%

Active OSV opex per day	$	15,875			$	12,563			$	15,032			$	11,576			$	11,770			$	8,531
Active MPSV opex per day	$	20,084			$	18,247			$	20,567			$	16,711			$	17,367			$	12,594
Stacked vessel opex per day	$	2,092			$	687			$	1,060			$	827			$	527			$	595
Total vessel opex per day	$	11,952			$	8,045			$	11,104			$	8,183			$	7,416			$	4,592

General &Administrative (G&A) Expense

Our G&A expenses are primarily a function of the number of shoreside personnel and include, but are not limited to, base salaries, benefits and incentive compensation for shoreside employees, legal and other third-party advisor expenses, rent and other items.

The table below sets forth our general and administrative expenses in total, as a percentage of total revenue and per vessel day (in thousands except % of revenue and amounts per day):


	Three Months Ended September 30,						Nine Months Ended September 30,						Twelve Months Ended Dec. 31
	2023			2022			2023			2022			2022			2021
General and administrative expense	$	16,199		$	14,385		$	48,565		$	42,201		$	58,946		$	40,632
G&A as a % of total revenues		10.1	%		11.6	%		11.1	%		13.3	%		13.1	%		15.9	%
G&A per active vessel day	$	4,048		$	4,192		$	4,156		$	4,318		$	4,353		$	3,579
G&A per total vessel day	$	2,688		$	2,276		$	2,712		$	2,598		$	2,341		$	1,572

Capital Expenditures

In addition to our operating metrics, we also focus on capital expenditures. Growth capital expenditures are expenditures undertaken by us to expand our fleet of vessels through acquisition or newbuild construction, while maintenance capital expenditures consist of deferred drydocking charges and maintenance capital improvements of existing vessels. Fluctuations in maintenance capital expenditures is primarily driven by the number of required recertification drydockings in a given period. Commercial capital expenditures represent vessel-related expenditures incurred to retrofit, convert or modify a vessel’s systems, structures or equipment to enhance functional capabilities and improve marketability or to meet certain commercial requirements. Non-vessel capital expenditures primarily relate to fixed asset additions or improvements related to our port facility, office locations, information technology, non-vessel property, plant and equipment or other shoreside support initiatives. For a more detailed description of growth, maintenance, commercial and non-vessel capital expenditures, see “—Liquidity and Capital Resources—Capital Expenditures.”

The table below sets forth a breakdown of our capital expenditures by type and the corresponding vessel downtime related to deferred drydockings vessel counts and days (in thousands except as noted):


	Three Months Ended September 30,				Nine Months Ended September 30,				Twelve Months Ended December, 31
	2023		2022		2023		2022		2022		2021
Capital expenditures⁽¹⁾
Growth capital expenditures	$	47,002	$	29,262	$	79,256	$	92,446	$	116,047	$	—
Maintenance capital expenditures		7,059		10,496		26,257		19,735		22,876		17,939
Commercial capital expenditures		16,906		3,354		27,183		7,719		10,945		2,755
Non-vessel capital expenditures		568		467		983		1,101		1,328		688

Total capital expenditures	$	71,535	$	43,579	$	133,679	$	121,001	$	151,196	$	21,382

Drydock downtime
OSVs
Number of vessels commencing drydock activities		4.0		4.0		11.0		9.0		10.0		10.0
Out-of-service time for drydock activities (in days)		111.1		130.3		408.9		268.8		332.5		413.1
MPSVs
Number of vessels commencing drydock activities		—		1.0		2.0		4.0		4.0		5.0
Out-of-service time for drydock activities (in days)		—		58.9		44.7		199.9		199.9		206.3

(1)	For further explanation on what these items consist of, see “—Liquidity and Capital Resources—Capital Expenditures.”

Reportable Segments

The Company has one reportable segment, which encompasses all aspects of its marine transportation services business. As the chief operating decision maker, our Chief Executive Officer evaluates the Company’s operating results on a consolidated basis to assess performance and allocate resources. While the Company’s vessels operate in various geographic regions and customer markets, they are centrally managed, share multiple forms of common costs, provide similar or complementary marine transportation services, are manned by crews that may move, from location to location or market to market as needed, and are marketed on a portfolio basis with the goal of maximizing Adjusted EBITDA and Adjusted Free Cash Flow and generating the highest possible rate of return on invested capital without a permanent commitment to geographic region or customer market.

Results of Operations

Three Months Ended September 30, 2023 Compared to Three Months Ended September 30, 2022

Summarized financial information for the three months ended September 30, 2023 and 2022, respectively, is shown below in the following table (in thousands except % change):


	Three Months Ended September 30,						Change
	2023			2022			$			%
Revenues:
Vessel revenues
Domestic	$	106,188		$	90,853		$	15,335			16.9
Foreign		42,948			22,460			20,488			91.2

		149,136			113,313			35,823			31.6
Non-vessel revenues		11,063			11,215			(152	)		(1.4	)

		160,199			124,528			35,671			28.6
Operating expenses		80,031			58,474			21,557			36.9
Depreciation and amortization		12,592			8,196			4,396			53.6
General and administrative expenses		16,199			14,385			1,814			12.6
Stock-based compensation expense		1,907			1,875			32			1.7
Terminated debt refinancing costs		40			—			40			—

		110,769			82,930			27,839			33.6
Gain on sale of assets		101			13,786			(13,685	)		(99.3	)

Operating income		49,531			55,384			(5,853	)		(10.6	)
Loss on early extinguishment of debt, net		(1,236	)		(42	)		(1,194	)		>100.0
Foreign currency loss		(446	)		(85	)		(361	)		>100.0
Interest expense		(9,637	)		(10,593	)		956			(9.0	)
Interest income		2,991			709			2,282			>100.0
Fair value adjustment of liability-classified warrants		(22,055	)		—			(22,055	)		—
Other income		—			1,008			(1,008	)		(100.0	)
Income tax expense		(9,032	)		(326	)		(8,706	)		>100.0

Net income	$	10,116		$	46,055		$	(35,939	)		(78.0	)

Revenues. Revenues for the three months ended September 30, 2023 and 2022 were $160.2 million and $124.5 million, respectively. Our weighted-average active operating fleet for the three months ended September 30, 2023 and 2022 was 43.5 and 37.3 vessels, respectively. For the three months ended September 30, 2023, we had a weighted-average of 22.0 vessels stacked compared to a weighted-average of 31.4 vessels stacked in the prior-year period.

Vessel revenues for the three months ended September 30, 2023 and 2022 were $149.1 million and $113.3 million, respectively. Vessels acquired in and subsequent to the third quarter of 2022 contributed $20.1 million to the increase in revenues, while the remaining increase was primarily due to improved market conditions. Revenues from our OSV fleet increased $21.2 million, or 28.8% for the three months ended September 30, 2023 compared to the prior-year period. Average OSV dayrates were $41,446 for the three months ended September 30, 2023 compared to $35,613 for the same period in 2022. Our average OSV utilization was 46.6% for the three months ended September 30, 2023 compared to 39.7% for the same period in 2022. Our OSVs incurred 111 days of aggregate downtime for regulatory drydockings and were stacked for an aggregate of 1,932 days during the three months ended September 30, 2023 compared to 130 and 2,800 days, respectively, for the same period in 2022. Excluding stacked vessel days, our active OSV utilization was 76.6% and 85.6% for the same periods, respectively. Our effective OSV dayrates were $19,314 for the three months ended September 30,

2023 compared to $14,138 for the same period in 2022. Revenues from our MPSV fleet increased $14.6 million, or 36.9%, for the three months ended September 30, 2023 compared to the prior-year period. Average MPSV dayrates were $66,922 for the three months ended September 30, 2023 compared to $52,689 for the three months ended September 30, 2022. Our MPSV utilization was 73.3% for the three months ended September 30, 2023 compared to 68.0% for the same period in 2022. Our MPSVs incurred no days of aggregate downtime for regulatory drydockings and were stacked for an aggregate of 92 days during the three months ended September 30, 2023 compared to 59 and 92 days, respectively, for the same period in 2022. Excluding stacked vessel days, our active MPSV utilization was 79.9% and 74.1% during the three months ended September 30, 2023 and the same period in 2022, respectively. Our effective MPSV dayrates were $49,054 for the three months ended September 30, 2023 compared to $35,829 for the same period in 2022. Domestic vessel revenues for the three months ended September 30, 2023 increased $15.3 million, or 16.9%, from the year-ago period primarily due to an increase in active vessels and improved market conditions during 2023. Foreign vessel revenues increased $20.5 million, or 91.2%, primarily due to improved market conditions for vessels operating in Mexico and Brazil during the three months ended September 30, 2023. Foreign vessel revenues for the three months ended September 30, 2023 comprised 28.8% of our total vessel revenues compared to 19.8% for the year-ago period.

Non-vessel revenues for the three months ended September 30, 2023 and 2022 were $11.1 million and $11.2 million, respectively. The 1.4% year-over-year decrease in non-vessel revenues was primarily due to lower revenues earned from non-military vessel management services during the three months ended September 30, 2023.

Operating Expense. Operating expense for the three months ended September 30, 2023 and 2022 was $80.0 million and $58.5 million, respectively. Vessels acquired in or subsequent to the third quarter of 2022 contributed $10.6 million to the increase in operating expense, while the remaining variance was due to increases in domestic mariner wages, vessel recertifications and related maintenance and repair costs, and contract-related costs of sales to meet customer charter requirements, which were ultimately recovered through the agreed upon charter dayrate.

Depreciation and Amortization. Depreciation and amortization for the three months ended September 30, 2023 and 2022 was $12.6 million and $8.2 million, respectively. Depreciation increased from the prior year due to seven newly acquired vessels being placed into service in or subsequent to the third quarter of 2022. Amortization also increased as a result of 13 vessel recertification drydockings being completed since September 30, 2022.

General and Administrative Expense. G&A expense for the three months ended September 30, 2023 and 2022 was $16.2 million and $14.4 million, respectively. The year-over-year increase in G&A expense was primarily attributable to higher legal costs associated with recently settled litigation and increases in shoreside employee headcount and wages.

Stock-based Compensation Expense. Stock-based compensation expense for the three months ended September 30, 2023 and 2022 remained consistent at $1.9 million for both periods.

Operating Income. Operating income for the three months ended September 30, 2023 and 2022 was $49.5 million and $55.4 million, respectively. Operating income decreased by $5.9 million, or 10.6%, for the reasons discussed above, but primarily due to an increase in expenses in the current period combined with the non-recurring effect of the $13.8 million gain on sale of assets in the prior-year period. Operating income as a percentage of revenues was 30.9% for the three months ended September 30, 2023 and 44.5% for the same period in 2022.

Interest Expense. Interest expense for the three months ended September 30, 2023 and 2022 was $9.6 million and $10.6 million, respectively. The decrease in interest expense was primarily attributable to our

election to pay cash interest only beginning in the second quarter of 2023 for the Exit Second Lien Term Loans, which reduced our interest rate on that debt instrument from 11.5% to 10.25%. Effective September 4, 2023, the Exit Second Lien Term Loans formally converted to full cash pay obligations with an annual interest rate of 8.25% based on our prevailing Total Leverage Ratio.

Interest Income. Interest income for the three months ended September 30, 2023 and 2022 was $3.0 million and $0.7 million, respectively. Our average cash balance increased to $219.6 million during the three months ended September 30, 2023 compared to $155.8 million for the same period in 2022. The average interest rate earned on our invested cash balances was 5.4% and 1.8% for the three months ended September 30, 2023 and 2022, respectively. The increase in average cash balance was primarily due to improved operating results and net cash proceeds received in the fourth quarter of 2022 from the delayed draw funded under the Replacement First Lien Term Loans. The increase in the average interest rate is due to market increases in bank interest rates on invested cash balances.

Fair Value Adjustment of Liability-Classified Warrants. Fair value adjustment of liability-classified warrants for the three months ended September 30, 2023 and 2022 was $22.1 million and $0.0 million, respectively. Based on an updated valuation analysis for the three months ended September 30, 2023, the estimated fair value of the outstanding Creditor Warrants increased by $13.85, or 31.9%, per warrant.

Income Tax Expense. Our effective income tax expense rate was 47.2% and 0.7% for the three months ended September 30, 2023 and 2022, respectively. The Company’s current income tax expense reflects its current foreign tax liabilities, and for the current quarter, certain deferred tax liabilities that could not be offset with a valuation allowance. Since its emergence from bankruptcy, the Company has offset its deferred tax assets with a valuation allowance, as required in certain circumstances by GAAP, leading to volatility in the Company’s effective income tax rate from period to period.

Net Income. Net income for the three months ended September 30, 2023 and 2022 was $10.1 million and $46.1 million, respectively. This decrease was primarily driven by an increase in the fair value adjustment of liability-classified warrants and an increase in operating expense.

Nine Months Ended September 30, 2023 Compared to Nine Months Ended September 30, 2022

Summarized financial information for the nine months ended September 30, 2023 and 2022, respectively, is shown below in the following table (in thousands except % change):


	Nine Months Ended September 30,						Change
	2023			2022			$			%
Revenues:
Vessel revenues
Domestic	$	299,181		$	222,639		$	76,542			34.4
Foreign		106,442			61,759			44,683			72.4

		405,623			284,398			121,225			42.6
Non-vessel revenues		32,965			33,927			(962	)		(2.8	)

		438,588			318,325			120,263			37.8
Operating expenses		221,532			153,863			67,669			44.0
Depreciation and amortization		34,711			19,926			14,785			74.2
General and administrative expenses		48,565			42,201			6,364			15.1
Stock-based compensation expense		17,270			3,468			13,802			>100.0
Terminated debt refinancing costs		3,673			—			3,673			—

		325,751			219,458			106.293			48.4
Gain on sale of assets		2,667			14,544			(11,877	)		81.7

Operating income		115,504			113,411			2,093			1.8
Loss on early extinguishment of debt, net		(1,236	)		(42	)		(1,194	)		>100.0
Foreign currency loss		(1,303	)		(222	)		(1,081	)		>100.0
Interest expense		(32,609	)		(29,686	)		(2,923	)		9.8
Interest income		7,821			1,294			6,527			>100.0
Fair value adjustment of liability-classified warrants		(26,588	)		(24,404	)		(2,184	)		8.9
Other income		756			1,320			(564	)		(42.7	)
Income tax expense		(15,394	)		(2,764	)		(12,630	)		>100.0

Net income	$	46,951		$	58,907		$	(11,956	)		(20.3	)

Revenues. Revenues for the nine months ended September 30, 2023 and 2022 were $438.6 million and $318.3 million, respectively. Our weighted-average active operating fleet for the nine months ended September 30, 2023 and 2022 was 42.8 and 35.8 vessels, respectively. For the nine months ended September 30, 2023, we had an average of 22.8 vessels stacked compared to an average of 33.7 vessels stacked in the prior-year period.

Vessel revenues for the nine months ended September 30, 2023 and 2022 were $405.6 million and $284.4 million, respectively. Newly acquired vessels in 2022 and 2023 contributed $49.9 million to the increase in revenues, while the remaining increase was primarily due to improved market conditions. Revenues from our OSV fleet increased $82.3 million, or 47.1%, for the nine months ended September 30, 2023 compared to the prior-year period. Average OSV dayrates were $38,927 for the nine months ended September 30, 2023 compared to $30,590 for the same period in 2022. Our average OSV utilization was 45.1% for the nine months ended September 30, 2023 compared to 36.4% for the same period in 2022. Our OSVs incurred 409 days of aggregate downtime for regulatory drydockings and were stacked for an aggregate of 5,955 days during the nine months ended September 30, 2023 compared to 269 and 8,734 days, respectively, for the same period in 2022. Excluding stacked vessel days, our active OSV utilization was 76.2% and 81.9% for the same periods, respectively. Revenues from our MPSV fleet increased $38.9 million, or 35.4%, for the nine months ended September 30, 2023 compared to the prior-year period. Average MPSV dayrates were $63,188 for the nine months ended September 30, 2023 compared to $51,715 for the same period in 2022. Our MPSV utilization was 71.8% for the

nine months ended September 30, 2023 compared to 64.8% for the same period in 2022. Our MPSVs incurred 45 days of aggregate downtime for regulatory drydockings and were stacked for an aggregate of 273 days during the nine months ended September 30, 2023 compared to 200 and 477 days, respectively, for the same period in 2022. Excluding stacked vessel days, our active MPSV utilization was 78.3% and 75.8% during the nine months ended September 30, 2023 and the same period in 2022, respectively. Domestic vessel revenues increased $76.5 million, or 34.4%, from the year-ago period primarily due to an increase in active vessels and improved market conditions for our vessels during the nine months ended September 30, 2023. Foreign vessel revenues increased $44.7 million, or 72.4% due to improved market conditions for vessels operating in Mexico and Brazil during the nine months ended September 30, 2023. Foreign vessel revenues for the nine months ended September 30, 2023 comprised 26.2% of our total vessel revenues compared to 21.7% for the year-ago period.

Non-vessel revenues for the nine months ended September 30, 2023 and 2022 were $33.0 million and $33.9 million, respectively. The 2.8% year-over-year decrease in non-vessel revenues was primarily due to lower revenues earned from non-military vessel management services during the nine months ended September 30, 2023.

Operating Expense. Operating expense for the nine months ended September 30, 2023 and 2022 was $221.5 million and $153.9 million, respectively. Vessels acquired in or subsequent to the second quarter of 2022 contributed $25.9 million to the increase in operating expense, while the remaining variance was due to increases in domestic mariner wages, vessel recertifications and related maintenance and repair costs, and contract-specific costs of sales to meet customer charter requirements, which were ultimately recovered through the agreed upon charter dayrate.

Depreciation and Amortization. Depreciation and amortization for the nine months ended September 30, 2023 and 2022 was $34.7 million and $19.9 million, respectively. Depreciation increased from the prior year due to seven newly acquired vessels being placed into service in or subsequent to the second quarter of 2022. Amortization also increased as a result of 13 vessel recertification drydockings being completed since September 30, 2022.

General and Administrative Expense. G&A expense for the nine months ended September 30, 2023 and 2022 was $48.6 million and $42.2 million, respectively. The year-over-year increase in G&A expense was primarily attributable to higher legal costs associated with recently settled litigation and increases in shoreside employee headcount and wages.

Stock-based Compensation Expense. Stock-based compensation expense for the nine months ended September 30, 2023 and 2022 was $17.3 million and $3.5 million, respectively. The stock-based compensation expense increase from the prior-year period was primarily attributable to certain new long-term incentive grants of RSUs under the MIP that were issued and vested in the current period.

Terminated Debt Refinancing Costs. Terminated debt refinancing costs for the nine months ended September 30, 2023 and 2022 were $3.7 million and $0.0 million, respectively. The terminated debt refinancing costs were attributable to costs related to a debt refinancing process that was postponed during the second quarter of 2023.

Operating Income. Operating income for the nine months ended September 30, 2023 and 2022 was $115.5 million and $113.4 million, respectively. Operating income increased by $2.1 million, or 3.5% during the current-year period compared to the prior-year period for the reasons discussed above, but primarily due to improved market conditions for our vessels. Operating income as a percentage of revenues was 26.3% for the nine months ended September 30, 2023 and 35.6% for the same period in 2022. Excluding the non-recurring effect of the restricted stock grants that were issued and vested in the current period, the terminated debt refinancing costs incurred in the second quarter of 2023, and the gain on sale of assets in the current and prior-year periods, operating income as a percentage of revenue was 29.2% and 31.1% for the nine months ended September 30, 2023 and 2022, respectively.

Interest Expense. Interest expense for the nine months ended September 30, 2023 and 2022 was $32.6 million and $29.7 million, respectively. Interest expense increased primarily due to (i) higher interest rates on the Replacement First Lien Term Loans and Exit Second Lien Term Loans since September 30, 2022 and (ii) higher outstanding balances on the Replacement First Lien Term Loans as a result of the $37.5 million delayed draw that was exercised in November 2022 and the Exit Second Lien Term Loans as a result of accumulated payment-in-kind interest incurred since the prior year, respectively. This increase was partially offset when the Company repaid the entire outstanding principal balance of the Replacement First Lien Term Loans in August 2023.

Interest Income. Interest income for the nine months ended September 30, 2023 and 2022 was $7.8 million and $1.3 million, respectively. Our average cash balance increased to $228.6 million during the current-year period compared to $160.0 million for the prior-year period. The average interest rate earned on our invested cash balances was 4.5% and 1.1% in the first nine months ended September 30, 2023 and 2022, respectively. The increase in average cash balance was primarily due to improved operating results and net cash proceeds received in the fourth quarter of 2022 from the delayed draw that was funded under the Replacement First Lien Term Loans. The increase in the average interest rate is due to market increases in bank interest rates on invested cash balances.

Fair Value Adjustment of Liability-Classified Warrants. Fair value adjustment of liability-classified warrants for the nine months ended September 30, 2023 and 2022 was $26.6 million and $24.4 million, respectively. Based on an updated valuation analysis as of September 30, 2023, the estimated fair value of the outstanding Creditor Warrants increased year-to-date by $16.70, or 41.2%, per warrant.

Income Tax Expense. Our effective income tax expense rate was 24.7% and 4.5% for the nine months ended September 30, 2023 and 2022, respectively. The Company’s current income tax expense reflects its current foreign tax liabilities, and for the current quarter, certain deferred tax liabilities that could not be offset with a valuation allowance. Since its emergence from bankruptcy, the Company has offset its deferred tax assets with a valuation allowance, as required in certain circumstances by GAAP, leading to volatility in the Company’s effective income tax rate from period to period.

Net Income. Net income for the nine months ended September 30, 2023 and 2022 was $47.0 million and $58.9 million, respectively. This decrease was primarily due to an increase in operating expense combined with the net effect of the non-recurring items discussed above in Operating Income.

Year Ended December 31, 2022 Compared to Year Ended December 31, 2021

Summarized financial information for the years ended December 31, 2022 and 2021, respectively, is shown below in the following table (in thousands except % change):


	Year Ended December 31,				Change
	2022		2021		$		%
Revenues:
Vessel revenues
Domestic	$	317,638	$	154,737	$	162,901		>100.0
Foreign		88,396		59,943		28,453		47.5

		406,034		214,680		191,354		89.1
Non-vessel revenues		45,192		41,620		3,572		8.6

		451,226		256,300		194,926		76.1
Operating expenses		214,788		142,819		71,969		50.4
Depreciation and amortization		28,940		18,383		10,557		57.4
General and administrative expenses		58,946		40,632		18,314		45.1
Stock-based compensation expense		5,330		3,372		1,958		58.1

		308,004		205,206		102,798		50.1
Gain on sale of assets		21,837		2,679		19,158		>100.0