Civeo Corp

Previous wording

Met Coal. In Australia, 86% of our Australian owned rooms are located in the Bowen Basin of Queensland, Australia and primarily serve met coal mines in that region. Met coal pricing and production growth in the Bowen Basin region is predominantly influenced by the level of global steel production, which remained subdued with negative growth in the second quarter of 2025. China, Europe and Japan all experienced negative growth during January through June 2025, while India continues to see consistent positive growth. Global tariff changes, recession fears and associated business uncertainty are weighing on current and short-term global steel production.

Current wording

Met Coal. In Australia, 86% of our Australian owned rooms are located in the Bowen Basin of Queensland, Australia and primarily serve met coal mines in that region. Met coal pricing and production growth in the Bowen Basin region is predominantly influenced by the level of global steel production, which remained subdued with negative growth through the third quarter of 2025. China, Europe and Japan all experienced negative growth during January through August 2025, while India continues to see consistent positive growth over the same period. Global tariff changes, recession fears and associated business uncertainty are weighing on current and short-term global steel production.

Previous wording

Global steel production decreased by 2.2% for the six months through June 2025 compared to the same period of 2024. As of July 25, 2025, met coal spot prices were $174.10 per tonne.

Current wording

Global steel production decreased by 1.6% for the nine months through September 2025 compared to the same period of 2024. As of October 24, 2025, met coal spot prices were $194.20 per tonne.

Previous wording

Met coal prices have remained between $168 and $198 per tonne during the first half of 2025, since dropping below $200 per tonne in late 2024. Low prices are impacted by lower steel production driven by lower demand and trader reselling of met coal inventories.

Current wording

Met coal prices have remained between $168 and $198 per tonne for the nine months through September 2025, since dropping below $200 per tonne in late 2024. In the third quarter of 2025 met coal prices have consistently averaged between $172 and $190 per tonne. Lower met coal prices are the result of lower steel demand and production, high global met coal inventories and increasing met coal supply.

Previous wording

In a low met coal price environment, producers are under increasing pressure to re-evaluate their production levels due to reduced operating margins. An improvement in met coal prices is contingent upon increased demand for met coal, which would be driven by improving steel production along with a tightening in supply related to producer maintenance activity and production curtailment from higher cost suppliers. Such improvements in the supply and demand fundamentals for met coal may be impacted by ongoing geopolitical tensions associated with global tariffs and trade agreements.

Current wording

With the lower met coal price environment persisting into the third quarter of 2025, producers continued to re-evaluate their production levels and costs. In September 2025, several large and mid-tier producers in Queensland, Australia reported making production cuts and workforce reductions in response to pressure on operating margins. An improvement in met coal prices remains contingent on stronger demand, which would be supported by increased steel production, as well as tighter supply resulting from producer maintenance activity and production curtailments by higher cost suppliers. Such improvements in the supply and demand fundamentals for met coal may be impacted by ongoing geopolitical tensions associated with global tariffs and trade agreements, along with recent supply increases in the U.S.

Previous wording

WTI Crude. In an effort to retain and recapture global market share, OPEC+ began reversing previously implemented production cuts at the beginning of the second quarter of 2025, increasing production despite flattening global demand for oil. The combined impact of these factors reduced WTI prices, which are down 9% year-to-date in 2025. OPEC+ has announced further production increases planned for August 2025 which will likely put further downward pressure on oil prices. Forecasts currently have oil prices averaging $65.33 per barrel in the second half of 2025. In light of this macroeconomic backdrop, our Canadian oil sands customers are increasingly looking to reduce costs and headcounts.

Current wording

WTI Crude. In an effort to retain and recapture global market share, OPEC+ began reversing previously implemented production cuts at the beginning of the second quarter of 2025 and accelerating into the third quarter of 2025, increasing production despite flattening global demand for oil. The combined impact of these factors reduced WTI prices, which are down approximately 13% year-to-date through the end of the third quarter of 2025. Forecasts currently have oil prices averaging $60.00 per barrel in the fourth quarter of 2025. In light of this macroeconomic backdrop, our Canadian oil sands customers are increasingly looking to reduce costs and headcounts.

Previous wording

WCS Crude. In Canada, WCS crude is the benchmark price for our oil sands customers. Pricing for WCS is driven by several factors, including the underlying price for WTI crude, the availability of transportation infrastructure (consisting of pipelines and crude by railcar), refinery blending requirements and governmental regulation. Historically, WCS has traded at a discount to WTI, creating a “WCS Differential,” due to transportation costs and capacity restrictions to move Canadian heavy oil production to refineries, primarily along the U.S. Gulf Coast. The WCS Differential has varied depending on the extent of transportation capacity availability.

Current wording

WCS Crude. In Canada, WCS crude is the benchmark price for our oil sands customers. Pricing for WCS is driven by several factors, including the underlying price for WTI crude, the availability of transportation infrastructure (consisting of pipelines and crude by railcar), refinery blending requirements and governmental regulation. Historically, WCS has traded at a discount to WTI, creating a “WCS Differential,” due to transportation costs and export capacity limitations to move Canadian heavy oil production to refineries, primarily along the U.S. Gulf Coast. The WCS Differential has varied depending on the extent of transportation capacity availability.

Previous wording

WCS prices in the second quarter of 2025 averaged $53.15 per barrel compared to an average of $67.24 in the second quarter of 2024. The WCS Differential decreased from $13.49 per barrel at the end of the fourth quarter of 2024 to $11.67 at the end of the second quarter of 2025. Further, the U.S. Administration has implemented and amended several new tariffs over the past several months, including a 10% tariff on energy resources imported to the U. S. from Canada. Implementation of tariffs could have adverse impact on our Canadian customers profit margins, which may in turn reduce their spending on our accommodations and services.

Current wording

WCS prices in the third quarter of 2025 averaged $52.48 per barrel compared to an average of $59.97 in the third quarter of 2024. The WCS Differential decreased from $13.49 per barrel at the end of the fourth quarter of 2024 to $11.98 at the end of the third quarter of 2025. Further, the U.S. administration has implemented and amended several new tariffs over the past several months, including a 10% tariff on Canadian energy imports to the U. S. Implementation of tariffs on oil from Canada could have an adverse impact on our Canadian customers profit margins, which may in turn reduce their spending on our accommodations and services.

Previous wording

Qantac Acquisition. On May 6, 2025, we completed the Qantac Acquisition located in Queensland, Australia, which included four villages with 1,340 rooms in Australia’s Bowen Basin and the associated accommodation assets, land and customer contracts. See Note 6. Asset Acquisition to the notes to the unaudited consolidated financial statements included in Item 1 of this quarterly report for further discussion.

Current wording

Qantac Acquisition. On May 6, 2025, we completed the Qantac Acquisition located in Queensland, Australia, which included four villages with 1,368 rooms in Australia’s Bowen Basin and the associated accommodation assets, land and customer contracts. See Note 6. Asset Acquisition to the notes to the unaudited consolidated financial statements included in Item 1 of this quarterly report for further discussion.

Previous wording

Inflationary Pressures. Since 2023, price increases resulting from pandemic-related inflation and supply chain concerns have, and are expected to continue to have, a negative impact on our labor and food costs, as well as consumable costs such as fuel. Lingering inflation from the pandemic has recently been exacerbated by changes to global tariffs and trade policies. We are managing inflation risk with negotiated service scope changes and contractual protections. Although inflation resulting from global tariffs implemented or threatened by the U.S. administration, and the resulting retaliations by its trading partners, did not materially impact our cost structure in the second quarter of 2025, concerns remain that inflationary pressures could return in the second half of 2025.

Current wording

Inflationary Pressures. Since 2023, price increases resulting from pandemic-related inflation and supply chain concerns have, and are expected to continue to have, a negative impact on our labor and food costs, as well as consumable costs such as fuel. Lingering inflation from the pandemic has recently been exacerbated by changes to global tariffs and trade policies. We are managing inflation risk with negotiated service scope changes and contractual protections. Although inflation resulting from global tariffs implemented or threatened by the U.S. administration, and the resulting retaliations by its trading partners, did not materially impact our cost structure in the third quarter of 2025, concerns remain that inflationary pressures could return in the future.

Previous wording

Labor Shortages. In addition to the macro inflationary impacts on labor costs noted above, we continue to be impacted by increased staff costs as a result of hospitality labor shortages in Australia due to significantly reduced migration in and around Australia affecting labor availability, which has subsequently led to an increased reliance on more expensive temporary labor resources.

Current wording

Labor Shortages. In addition to the macro inflationary impacts on labor costs noted above, we continue to be impacted by increased staff costs as a result of hospitality labor shortages in Australia. Australia’s labor market remains historically tight, with unemployment holding around 4% and job mobility (movement of workers between different employers or businesses) at its lowest in 30 years. A persistent overhang of vacancies continues to constrain recruitment, while government stimulus has disproportionately driven job growth in healthcare, aged care, education and public services. Despite easing inflation, regulated labor costs remain high, with the Fair Work Commission decisions pushing wage increases well above Consumer Price Index changes, and statutory increases in superannuation, workers’ compensation and payroll tax are further inflating total labor costs. For hospitality, this combination of scarce labor supply, competition from government-funded sectors and rising employment costs creates sustained pressure on staffing productivity and availability.

Previous wording

Unless otherwise indicated, discussion of results for the three and six months ended June 30, 2025, is based on a comparison to the corresponding period of 2024.

Current wording

Unless otherwise indicated, discussion of results for the three and nine months ended September 30, 2025, is based on a comparison to the corresponding period of 2024.

Previous wording

We reported net loss attributable to Civeo for the quarter ended June 30, 2025 of $3.3 million, or $0.25 per diluted share. Net loss included $3.2 million of shareholder activist related costs and $0.5 million of cost saving initiatives in Canada related to two lodge closures.

Current wording

We reported net loss attributable to Civeo for the quarter ended September 30, 2025 of $0.5 million, or $0.04 per diluted share. Net loss included $0.6 million of shareholder activist related costs and $0.2 million of cost saving initiatives in Canada.

Previous wording

We reported net income attributable to Civeo for the quarter ended June 30, 2024 of $8.2 million, or $0.56 per diluted share.

Current wording

We reported net loss attributable to Civeo for the quarter ended September 30, 2024 of $5.1 million, or $0.36 per diluted share.

Previous wording

Revenues. Consolidated revenues decreased $26.0 million, or 14%, in the second quarter of 2025 compared to the second quarter of 2024. This decrease was primarily driven by (i) lower billed rooms at our oil sands lodges in Canada as producers in the region remain focused on reducing operating costs, (ii) reduced occupancy at our Sitka Lodge in Canada as the Kitimat LNG facility was completed and commenced operations in the second quarter of 2025 and (iii) a weaker Australian dollar relative to the U.S. dollar in the second quarter of 2025 compared to the second quarter of 2024. These items were partially offset by an increase in Australia related to the Qantac Acquisition in the second quarter of 2025 and new business in our integrated services villages in Western Australia. The assets from the Qantac Acquisition generated $4.9 million of revenues in the second quarter of 2025. See the discussion of segment results of operations below for further information.

Current wording

Revenues. Consolidated revenues decreased $5.8 million, or 3%, in the third quarter of 2025 compared to the third quarter of 2024. This decrease was primarily driven by (i) lower billed rooms at our oil sands lodges in Canada as producers in the region remain focused on reducing operating costs, (ii) lower food service and other services revenue in Canada as client maintenance work was softer in the third quarter of 2025 and (iii) a weaker Australian dollar relative to the U.S. dollar in the third quarter of 2025 compared to the third quarter of 2024. These items were partially offset by an increase in Australia related to the Qantac Acquisition in the second quarter of 2025 and new business in our integrated services villages in Queensland. The assets from the Qantac Acquisition generated $8.4 million of revenues in the third quarter of 2025. See the discussion of segment results of operations below for further information.

Previous wording

Cost of Sales and Services. Our consolidated cost of sales and services decreased $19.3 million, or 14%, in the second quarter of 2025 compared to the second quarter of 2024. This decrease was primarily driven by (i) lower costs at various lodges in Canada due to reduced occupancy levels, (ii) lower costs related to the reduced mobile asset activity in Canada from pipeline projects for which final costs were incurred in the second quarter of 2024, (iii) reduced indirect costs in Canada as a result of various cost reduction measures and (iv) a weaker Australian dollar relative to the U.S. dollar in the second quarter of 2025 compared to the second quarter of 2024. These items were partially offset by an increase in Australia related to the Qantac Acquisition in the second quarter of 2025 and new business in our integrated services villages in Western Australia and the associated overhead costs. See the discussion of segment results of operations below for further information.

Current wording

Cost of Sales and Services. Our consolidated cost of sales and services decreased $11.8 million, or 9%, in the third quarter of 2025 compared to the third quarter of 2024. This decrease was primarily driven by (i) lower costs at various lodges in Canada due to reduced occupancy levels, (ii) reduced costs at various lodges and reduced indirect costs in Canada as a result of various cost reduction measures implemented in Canada in late 2024 and early 2025, (iii) reduced food service and other services costs in Canada as client maintenance work was softer in the third quarter of 2025 and (iv) a weaker Australian dollar relative to the U.S. dollar in the third quarter of 2025 compared to the third quarter of 2024. These items were partially offset by an increase in Australia related to the Qantac Acquisition in the second quarter of 2025 and new business in our integrated services villages in Queensland and the associated overhead costs. See the discussion of segment results of operations below for further information.

Previous wording

Selling, General and Administrative Expenses. SG&A expenses increased $3.0 million, or 17%, in the second quarter of 2025 compared to the second quarter of 2024. This increase was primarily due to higher professional fees of $3.6 million primarily due to shareholder activist related costs of $3.2 million, partially offset by lower office expenses of $0.4 million, lower share-based compensation expense of $0.3 million and a weaker Australian and Canadian dollar relative to the U.S. dollar in the second quarter of 2025 compared to the second quarter of 2024.

Current wording

Selling, General and Administrative Expenses. Selling, general and administrative (SG&A) expenses decreased $1.5 million, or 8%, in the third quarter of 2025 compared to the third quarter of 2024. This decrease was primarily due to lower incentive compensation cost of $0.6 million, lower office expenses of $0.5 million, lower share-based compensation of $0.4 million and a weaker Australian and Canadian dollar relative to the U.S. dollar in the third quarter of 2025 compared to the third quarter of 2024.

Previous wording

Depreciation and Amortization Expense. Depreciation and amortization expense increased $0.8 million, or 5%, in the second quarter of 2025 compared to the second quarter of 2024. The increase was primarily due to additional property, plant and equipment acquired through the Qantac Acquisition, partially offset by reduced depreciation expense resulting from impairments recorded in 2024 and a weaker Australian and Canadian dollar relative to the U.S. dollar in the second quarter of 2025 compared to the second quarter of 2024.

Current wording

Depreciation and Amortization Expense. Depreciation and amortization expense increased $2.6 million, or 15%, in the third quarter of 2025 compared to the third quarter of 2024. The increase was primarily due to additional property, plant and equipment acquired through the Qantac Acquisition and shortening the lives on certain assets in Canada, partially offset by reduced depreciation expense resulting from impairments recorded in 2024 and a weaker Australian and Canadian dollar relative to the U.S. dollar in the third quarter of 2025 compared to the third quarter of 2024.

Previous wording

Operating Income. Consolidated operating income decreased $10.3 million, or 79%, in the second quarter of 2025 compared to the second quarter of 2024, primarily due to lower lodge occupancy in Canada in the second quarter of 2025 compared to the second quarter of 2024 and higher SG&A expense, primarily due to shareholder activist related costs, in the second quarter of 2025. These items were partially offset by higher activity levels in Australia in the second quarter of 2025 compared to the second quarter of 2024.

Current wording

Operating Income. Consolidated operating income increased $6.9 million in the third quarter of 2025 compared to the third quarter of 2024, primarily driven by higher activity levels in Australia and gross margin expansion in Canada despite lower lodge occupancy resulting from cost cutting measures previously implemented. These items were partially offset by higher depreciation and amortization expense in the third quarter of 2025 compared to the third quarter of 2024.

Previous wording

Interest Expense, net. Net interest expense increased by $0.5 million, or 22%, in the second quarter of 2025 compared to the second quarter of 2024, primarily related to higher average debt levels, partially offset by lower interest rates on credit facility borrowings during 2025 compared to 2024.

Current wording

Interest Expense, net. Net interest expense increased by $1.7 million, or 103%, in the third quarter of 2025 compared to the third quarter of 2024, primarily related to higher average debt levels, as a result of the Qantac Acquisition and increased share repurchases, partially offset by lower interest rates on credit facility borrowings during 2025 compared to 2024.

Previous wording

Income Tax Expense. Our income tax expense for the three months ended June 30, 2025 totaled $3.6 million, or 1222.4% of pretax income, compared to an income tax expense of $3.8 million, or 33.6% of pretax income, for the three months ended June 30, 2024. Our effective tax rate for the three months ended June 30, 2025 and 2024 was impacted by Canada and the U.S. being considered loss jurisdictions that were removed from the annual effective tax rate computation for purposes of computing the interim tax provision.

Current wording

Income Tax Expense. Our income tax expense for the three months ended September 30, 2025 totaled $4.0 million, or 112.7% of pretax income, compared to an income tax expense of $3.9 million, or (270.6)% of pretax loss, for the three months ended September 30, 2024. Our effective tax rate for the three months ended September 30, 2025 and 2024 was impacted by Canada and the U.S. being considered loss jurisdictions that were removed from the annual effective tax rate computation for purposes of computing the interim tax provision.

Previous wording

Other Comprehensive Income. Other comprehensive income increased $9.3 million in the second quarter of 2025 compared to the second quarter of 2024, primarily as a result of foreign currency translation adjustments due to changes in the Australian and Canadian dollar exchange rates compared to the U.S. dollar. The Australian dollar exchange rate compared to the U.S. dollar increased 5% in the second quarter of 2025 compared to a 2% increase in the second quarter of 2024. The Canadian dollar exchange rate compared to the U.S. dollar increased 5% in the second quarter of 2025 compared to a 1% decrease in the second quarter of 2024.

Current wording

Other Comprehensive Income (Loss). Other comprehensive income decreased $8.0 million in the third quarter of 2025 compared to the third quarter of 2024, primarily as a result of foreign currency translation adjustments due to changes in the Australian and Canadian dollar exchange rates compared to the U.S. dollar. The Australian dollar exchange rate compared to the U.S. dollar remained constant in the third quarter of 2025 compared to a 4% increase in the third quarter of 2024. The Canadian dollar exchange rate compared to the U.S. dollar decreased 2% in the third quarter of 2025 compared to a 1% increase in the third quarter of 2024.

Previous wording

(3)Average daily rate is based on billed rooms and accommodation revenue.

Current wording

(3)Average daily rate is based on billed rooms and accommodation revenue in the Company's owned villages.

Previous wording

Our Australian segment reported revenues in the second quarter of 2025 that were $4.1 million, or 4%, higher than the second quarter of 2024. The weakening of the average exchange rate for the Australian dollar relative to the U.S. dollar by 2.7% in the second quarter of 2025 compared to the second quarter of 2024 resulted in a $3.2 million period-over-period decrease in revenues. On a constant currency basis, the Australian segment experienced a 6.7% period-over-period increase in revenues. Excluding the impact of the weaker Australian exchange rate, the increase in the Australian segment was driven by the Qantac Acquisition in the second quarter of 2025 and new business in our integrated services villages in Western Australia.

Current wording

Our Australian segment reported revenues in the third quarter of 2025 that were $7.8 million, or 7%, higher than the third quarter of 2024. The weakening of the average exchange rate for the Australian dollar relative to the U.S. dollar by 2.4% in the third quarter of 2025 compared to the third quarter of 2024 resulted in a $3.0 million period-over-period decrease in revenues. On a constant currency basis, the Australian segment experienced a 9.3% period-over-period increase in revenues. Excluding the impact of the weaker Australian exchange rate, the increase in the Australian segment was driven by the Qantac Acquisition in the second quarter of 2025 and new integrated services business in Queensland.

Previous wording

Our Australian segment cost of sales and services increased $1.4 million, or 2%, in the second quarter of 2025 compared to the second quarter of 2024. The weakening of the average exchange rate for the Australian dollar relative to the U.S. dollar by 2.7% in the second quarter of 2025 compared to the second quarter of 2024 resulted in a $2.3 million period-over-period decrease in cost of sales and services. Excluding the impact of the weaker Australian exchange rate, the increase in cost of sales and services in the Australian segment was largely driven by the Qantac Acquisition and new business in our integrated services villages in Western Australia and the associated overhead costs.

Current wording

Our Australian segment cost of sales and services increased $4.0 million, or 5%, in the third quarter of 2025 compared to the third quarter of 2024. The weakening of the average exchange rate for the Australian dollar relative to the U.S. dollar by 2.4% in the third quarter of 2025 compared to the third quarter of 2024 resulted in a $2.2 million period-over-period decrease in cost of sales and services. Excluding the impact of the weaker Australian exchange rate, the increase in cost of sales and services in the Australian segment was largely driven by the Qantac Acquisition and new integrated services business in Queensland and the associated overhead costs.

Previous wording

Our Australian segment gross margin as a percentage of revenues increased to 26.8% in the second quarter of 2025 from 25.4% in the second quarter of 2024. This was primarily driven by increased relative contribution from our accommodation business resulting from the Qantac Acquisition. Our accommodation business generates higher gross margins than our integrated services business, which has a service-only business model.

Current wording

Our Australian segment gross margin as a percentage of revenues increased to 26.9% in the third quarter of 2025 from 25.3% in the third quarter of 2024. This was primarily driven by increased relative contribution from our accommodation business associated with the Qantac Acquisition. Our accommodation business generates higher gross margins than our integrated services business which has a service-only business model.

Previous wording

(4)Average daily rate is based on billed rooms and accommodation revenue.

Current wording

(4)Average daily rate is based on billed rooms and accommodation revenue in the Company's owned lodges.

Previous wording

Our Canadian segment reported revenues in the second quarter of 2025 that were $29.5 million, or 37%, lower than the second quarter of 2024. The decrease in the Canadian segment was driven by lower billed rooms at our oil sands lodges as producers in the region remain focused on reducing operating costs and reduced occupancy at our Sitka Lodge as the Kitimat LNG facility was completed and commenced operations in the second quarter of 2025.

Current wording

Our Canadian segment reported revenues in the third quarter of 2025 that were $11.7 million, or 20%, lower than the third quarter of 2024. The decrease in the Canadian segment was driven by lower billed rooms at our oil sands lodges, down 20% year-over-year, as producers in the region remain focused on reducing operating costs and lower food service and other services revenue as client maintenance work in the third quarter of 2024 did not recur to the same extent in 2025.

Previous wording

Our Canadian segment cost of sales and services decreased $19.8 million, or 34%, in the second quarter of 2025 compared to the second quarter of 2024. The decrease in cost of sales and services in the Canadian segment was largely driven by (i) lower costs at various lodges due to reduced occupancy levels, (ii) lower demobilization costs related to mobile asset activity from pipeline projects, the final costs for which were incurred in the second quarter of 2024 and (iii) reduced indirect costs as a result of various cost reduction measures.

Current wording

Our Canadian segment cost of sales and services decreased $14.4 million, or 29%, in the third quarter of 2025 compared to the third quarter of 2024. The decrease in cost of sales and services in the Canadian segment was largely driven by (i) lower costs at various lodges due to reduced occupancy levels, (ii) reduced costs at various lodges and reduced indirect costs as a result of various cost reduction measures implemented in late 2024 and early 2025 and (iii) reduced food service and other services costs as client maintenance work in the third quarter of 2024 did not recur to the same extent in 2025.

Previous wording

Our Canadian segment gross margin as a percentage of revenues decreased from 26.0% in the second quarter of 2024 to 22.0% in the second quarter of 2025. This was primarily driven by reduced efficiencies at our lodges with lower occupancy levels.

Current wording

Our Canadian segment gross margin as a percentage of revenues increased from 13.3% in the third quarter of 2024 to 22.5% in the third quarter of 2025. This was primarily driven by higher margins at our lodges as a result of various cost reduction measures implemented in late 2024 and early 2025.

Previous wording

We reported net loss attributable to Civeo for the six months ended June 30, 2025 of $13.2 million, or $0.98 per diluted share. Net loss included $3.2 million of shareholder activist related costs and $1.4 million of cost saving initiatives in Canada related to severance and two lodge closures.

Current wording

We reported net loss attributable to Civeo for the nine months ended September 30, 2025 of $13.6 million, or $1.04 per diluted share. Net loss included $3.8 million of shareholder activist related costs and $1.7 million of cost saving initiatives in Canada related to severance, two lodge closures and other real estate rationalization efforts.

Previous wording

We reported net income attributable to Civeo for the six months ended June 30, 2024 of $3.1 million, or $0.21 per diluted share. Net income included (i) $6.0 million of net gains associated with the sale of the McClelland Lake Lodge in Canada and (ii) a $7.8 million pre-tax loss resulting from the impairment of fixed assets included in Impairment expense.

Current wording

We reported net loss attributable to Civeo for the nine months ended September 30, 2024 of $2.0 million, or $0.14 per diluted share. As further discussed below, net loss included $5.8 million of net gains associated with the sale of the McClelland Lake Lodge in Canada and a $7.8 million pre-tax loss resulting from the impairment of fixed assets included in Impairment expense.

Previous wording

Revenues. Consolidated revenues decreased $48.1 million, or 14%, in the six months ended June 30, 2025 compared to the six months ended June 30, 2024. This decrease was primarily driven by (i) lower billed rooms at our oil sands lodges in Canada as producers in the region remain focused on reducing operating costs, (ii) reduced occupancy at our Sitka Lodge in Canada as the Kitimat LNG facility was completed and commenced operations in the second quarter of 2025, (iii) reduced mobile asset activity in Canada from pipeline projects which were completed in the first six months of 2024 and (iv) a weaker Australia and Canadian dollar relative to the U.S. dollar in the six months ended June 30, 2025 compared to the six months ended June 30, 2024. These items were partially offset by an increase in Australia related to the Qantac Acquisition in the second quarter of 2025 and new business in our integrated services villages in Western Australia. See the discussion of segment results of operations below for further information.

Current wording

Revenues. Consolidated revenues decreased $53.9 million, or 10%, in the nine months ended September 30, 2025 compared to the nine months ended September 30, 2024. This decrease was primarily driven by (i) lower billed rooms at our oil sands lodges in Canada as producers in the region remain focused on reducing operating costs, (ii) reduced occupancy at our Sitka Lodge in Canada as the Kitimat LNG facility was completed and commenced operations in the second quarter of 2025, (iii) reduced food service and other services revenue in Canada as client maintenance work was softer in the third quarter of 2025 and (iv) a weaker Australia and Canadian dollar relative to the U.S. dollar in the nine months ended September 30, 2025 compared to the nine months ended September 30, 2024. These items were partially offset by an increase in Australia related to the Qantac Acquisition in the second quarter of 2025 and new business in our integrated services villages in Western Australia and Queensland. The assets from the Qantac Acquisition generated $13.3 million of revenues in the nine months ended September 30, 2025. See the discussion of segment results of operations below for further information.

Previous wording

Cost of Sales and Services. Our consolidated cost of sales and services decreased $35.1 million, or 13%, in the six months ended June 30, 2025 compared to the six months ended June 30, 2024. This decrease was primarily driven by (i) lower costs at various lodges in Canada due to reduced occupancy levels, (ii) lower costs related to the reduced mobile asset activity in Canada from pipeline projects for which final costs were incurred in the first six months of 2024, (iii) reduced indirect costs in Canada as a result of various cost reduction measures and (iv) a weaker Australia and Canadian dollar relative to the U.S. dollar in the six months ended June 30, 2025 compared to the six months ended June 30, 2024. These items were partially offset by an increase in Australia related to the Qantac Acquisition in the second quarter of 2025 and new business in our integrated services villages in Western Australia. See the discussion of segment results of operations below for further information.

Current wording

Cost of Sales and Services. Our consolidated cost of sales and services decreased $47.0 million, or 11%, in the nine months ended September 30, 2025 compared to the nine months ended September 30, 2024. This decrease was primarily driven by (i) lower costs at various lodges in Canada due to reduced occupancy levels, (ii) reduced costs at various lodges and reduced indirect costs as a result of various cost reduction measures in Canada implemented in late 2024 and early 2025, (iii) lower costs related to the reduced mobile asset activity in Canada from pipeline projects for which final costs were incurred in the first six months of 2024, (iv) reduced food service and other services costs in Canada as client maintenance work was softer in the third quarter of 2025 and (v) a weaker Australia and Canadian dollar relative to the U.S. dollar in the nine months ended September 30, 2025 compared to the nine months ended September 30, 2024. These items were partially offset by an increase in Australia related to the Qantac Acquisition in the second quarter of 2025 and new business in our integrated services villages in Western Australia and Queensland and associated overhead costs. See the discussion of segment results of operations below for further information.

Previous wording

Selling, General and Administrative Expenses. SG&A expenses increased $2.6 million, or 7%, in the six months ended June 30, 2025 compared to the six months ended June 30, 2024. This increase was primarily due to higher professional fees of $3.5 million due to shareholder activist related costs of $3.2 million and higher share-based compensation expense of $0.4 million due to lower forfeitures in the six months ended June 30, 2025 compared to the six months ended June 30, 2024. These items were partially offset by lower travel and entertainment costs of $0.7 million, down 43% year-of-year, lower compensation costs of $0.5 million and a weaker Australian and Canadian dollar relative to the U.S. dollar in the six months ended June 30, 2025 compared to the six months ended June 30, 2024.

Current wording

Selling, General and Administrative Expenses. SG&A expenses increased $1.1 million, or 2%, in the nine months ended September 30, 2025 compared to the nine months ended September 30, 2024. This increase was primarily due to higher professional fees of $3.4 million due to shareholder activist related costs of $3.8 million in the nine months ended September 30, 2025 compared to the nine months ended September 30, 2024, partially offset by lower travel and entertainment costs of $1.0 million, down 42% year-of-year, lower incentive compensation cost of $0.9 million and a weaker Australian and Canadian dollar relative to the U.S. dollar in the nine months ended September 30, 2025 compared to the nine months ended September 30, 2024.

Previous wording

Depreciation and Amortization Expense. Depreciation and amortization expense increased $0.3 million, or 1%, in the six months ended June 30, 2025 compared to the six months ended June 30, 2024. The increase was primarily due to additional property, plant and equipment acquired through the Qantac Acquisition, partially offset by a weaker Australian and Canadian dollar relative to the U.S. dollar in the six months ended June 30, 2025 compared to the six months ended June 30, 2024 and reduced depreciation expense resulting from impairments recorded in 2024.

Current wording

Depreciation and Amortization Expense. Depreciation and amortization expense increased $2.8 million, or 6%, in the nine months ended September 30, 2025 compared to the nine months ended September 30, 2024. The increase was primarily due to additional property, plant and equipment acquired through the Qantac Acquisition and shortening the lives on certain assets in Canada, partially offset by a weaker Australian and Canadian dollar relative to the U.S. dollar in the nine months ended September 30, 2025 compared to the nine months ended September 30, 2024 and reduced depreciation expense resulting from impairments recorded in 2024.

Previous wording

Impairment Expense. We recorded pre-tax impairment expense of $7.8 million in the six months ended June 30, 2024 associated with long-lived assets in Australia and the U.S. See Note 3 - Impairment Charges to the notes to the unaudited consolidated financial statements included in Item 1 of this quarterly report for further discussion.

Current wording

Impairment Expense. We recorded pre-tax impairment expense of $7.8 million in the nine months ended September 30, 2024 associated with long-lived assets in Australia and the U.S. See Note 3 - Impairment Charges to the notes to the unaudited consolidated financial statements included in Item 1 of this quarterly report for further discussion.

Previous wording

Gain on Sale of McClelland Lake Lodge Assets, net. We recorded $6.0 million in the six months ended June 30, 2024 related to net gains associated with the sale of the McClelland Lake Lodge.

Current wording

Gain on Sale of McClelland Lake Lodge Assets, net. We recorded $5.8 million in the nine months ended September 30, 2024 related to net gains associated with the sale of the McClelland Lake Lodge.

Previous wording

Operating Income (Loss). Consolidated operating loss increased $14.0 million, or 124%, in the six months ended June 30, 2025 compared to the six months ended June 30, 2024, primarily due to lower lodge occupancy in Canada in the six months ended June 30, 2025 compared to the six months ended June 30, 2024, higher SG&A expense during the 2025 period compared to the 2024 period and a net gain on sale of McClelland Lake Lodge assets in the six months ended June 30, 2024. These items were partially offset by higher activity levels in Australia in the six months ended June 30, 2025 compared to the six months ended June 30, 2024 and impairment expenses in the six months ended June 30, 2024.

Current wording

Operating Income. Consolidated operating income decreased $7.1 million, or 63%, in the nine months ended September 30, 2025 compared to the nine months ended September 30, 2024, primarily due to lower lodge occupancy in Canada, higher depreciation and amortization expense and higher SG&A expense during the 2025 period compared to the 2024 period. In addition, the nine months ended September 30, 2024 included a net gain on sale of McClelland Lake Lodge assets. These items were partially offset by higher activity levels in Australia in the nine months ended September 30, 2025 compared to the nine months ended September 30, 2024 and impairment expenses recorded in the nine months ended September 30, 2024.

Previous wording

Interest Expense, net. Net interest expense decreased by $0.2 million, or 6%, in the six months ended June 30, 2025 compared to the six months ended June 30, 2024, primarily related to lower interest rates on credit facility borrowings, partially offset by higher average debt levels during the six months ended June 30, 2025 compared to the six months ended June 30, 2024.

Current wording

Interest Expense, net. Net interest expense increased by $1.5 million, or 24%, in the nine months ended September 30, 2025 compared to the nine months ended September 30, 2024, primarily related to higher average debt levels, partially offset by lower interest rates on credit facility borrowings during the nine months ended September 30, 2025 compared to the nine months ended September 30, 2024.

Previous wording

Income Tax Expense. Our income tax expense for the six months ended June 30, 2025 totaled $6.7 million, or (103.5)% of pretax loss, compared to an income tax expense of $5.3 million, or 70.0% of pretax income, for the six months ended June 30, 2024. Our effective tax rate for the six months ended June 30, 2025 and 2024 was impacted by Canada and the U.S. being considered loss jurisdictions that were removed from the annual effective tax rate computation for purposes of computing the interim tax provision.

Current wording

Income Tax Expense. Our income tax expense for the nine months ended September 30, 2025 totaled $10.7 million, or (372.0)% of pretax loss, compared to an income tax expense of $9.2 million, or 148.3% of pretax income, for the nine months ended September 30, 2024. Our effective tax rate for the nine months ended September 30, 2025 and 2024 was impacted by Canada and the U.S. being considered loss jurisdictions that were removed from the annual effective tax rate computation for purposes of computing the interim tax provision.