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EXCEL - IDEA: XBRL DOCUMENT - Cal Dive International, Inc.Financial_Report.xls
EX-31.1 - CERTIFICATE OF CEO - Cal Dive International, Inc.exhibit31_1.htm
EX-32.1 - CERTIFICATION BY CEO AND CFO - Cal Dive International, Inc.exhibit32_1.htm
EX-31.2 - CERTIFICATE OF CFO - Cal Dive International, Inc.exhibit31_2.htm
EX-10.1 - AMENDMENT NO. 6 TO CREDIT AGREEMENT - Cal Dive International, Inc.exhibit10_1.htm

UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549

FORM 10-Q


þ QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934

For the quarterly period ended March 31, 2014

or

o TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934

For the transition period from  _______   to  _______

Commission File Number:  001-33206

CAL DIVE INTERNATIONAL, INC.
(Exact name of registrant as specified in its charter)


 
Delaware
 
61-1500501
 
 
(State or other jurisdiction of
incorporation or organization)
 
(I.R.S. Employer
Identification No.)
 
 
 
 
 
 
 
2500 CityWest Boulevard, Suite 2200
Houston, Texas
 
77042
 
 
(Address of principal executive offices)
 
 
(Zip Code)
 
 

(713) 361-2600
(Registrant's telephone number, including area code)

Indicate by check mark whether the registrant (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days.  Yes þ  No o

Indicate by check mark whether the registrant has submitted electronically and posted on its corporate Web site, if any, every Interactive Data File required to be submitted and posted pursuant to Rule 405 of Regulation S-T (§232.405 of this chapter) during the preceding 12 months (or for such shorter period that the registrant was required to submit and post such files).  Yes þ No o

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

Large accelerated filer o
Accelerated filer þ
 
 
Non-accelerated filer o (Do not
check if a smaller reporting company)
Smaller reporting company o

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

As of April 30, 2014, the registrant had 98,740,728 shares of common stock issued and outstanding.



 
CAL DIVE INTERNATIONAL, INC.

TABLE OF CONTENTS
 

 
 
Page
PART I - FINANCIAL INFORMATION
1
 
Financial Statements
1
 
Management's Discussion and Analysis of Financial Condition and Results of Operations
14
 
Quantitative and Qualitative Disclosures About Market Risk
21
 
Controls and Procedures
21
PART II - OTHER INFORMATION
22
 
Risk Factors
22
 
Unregistered Sales of Equity Securities and Use of Proceeds
23
 
Exhibits
23
24
25

When we refer to "us," "we," "our," "ours," "the Company" or "CDI," we are describing Cal Dive International, Inc. and/or our subsidiaries.
 
i

PART I - FINANCIAL INFORMATION

Item 1.     Financial Statements.

Cal Dive International, Inc. and Subsidiaries

Consolidated Balance Sheets
(in thousands, except per share par value)

ASSETS
 
March 31,
2014
   
December 31,
2013
 
 
 
(unaudited)
   
 
Current assets:
 
   
 
Cash and cash equivalents
 
$
3,299
   
$
12,190
 
Accounts receivable:
               
Trade, net of allowance for doubtful accounts of $0 and $0, respectively
   
68,874
     
55,409
 
Contracts in progress
   
139,880
     
125,121
 
Income tax receivable
   
699
     
-
 
Deferred income taxes
   
-
     
52
 
Other current assets
   
41,673
     
37,271
 
Total current assets
   
254,425
     
230,043
 
 
               
Property and equipment
   
677,809
     
690,749
 
Less - Accumulated depreciation
   
(308,636
)
   
(302,169
)
Net property and equipment
   
369,173
     
388,580
 
 
               
Deferred drydock costs, net
   
21,272
     
23,497
 
Other assets, net
   
13,647
     
8,562
 
Total assets
 
$
658,517
   
$
650,682
 
 
               
LIABILITIES AND EQUITY
               
 
               
Current liabilities:
               
Accounts payable
 
$
106,337
   
$
114,663
 
Advanced billings on contracts
   
671
     
172
 
Accrued liabilities
   
32,806
     
29,284
 
Income tax payable
   
6,696
     
3,886
 
Current maturities of long-term debt
   
13,989
     
13,989
 
Deferred income taxes
   
1,656
     
-
 
Total current liabilities
   
162,155
     
161,994
 
 
               
Long-term debt
   
209,568
     
179,464
 
Deferred income taxes
   
48,805
     
58,784
 
Other long-term liabilities
   
8,355
     
8,423
 
Total liabilities
   
428,883
     
408,665
 
 
               
Equity:
               
Common stock, $0.01 par value, 240,000 shares authorized, 98,748 and 97,436 shares issued and outstanding, respectively
   
988
     
975
 
Capital in excess of par
   
438,376
     
437,455
 
Accumulated other comprehensive loss
   
(832
)
   
(666
)
Retained deficit
   
(203,728
)
   
(190,677
)
Equity attributable to Cal Dive
   
234,804
     
247,087
 
Noncontrolling interest
   
(5,170
)
   
(5,070
)
Total equity
   
229,634
     
242,017
 
Total liabilities and equity
 
$
658,517
   
$
650,682
 

The accompanying notes are an integral part of these consolidated financial statements.

Cal Dive International, Inc. and Subsidiaries

Consolidated Statements of Operations (unaudited)
(in thousands, except per share amounts)

 
 
Three Months Ended
March 31,
 
 
 
2014
   
2013
 
Revenues
 
$
119,104
   
$
80,919
 
Cost of sales
   
125,323
     
92,436
 
Gross loss
   
(6,219
)
   
(11,517
)
General and administrative expenses
   
10,027
     
11,909
 
Asset impairment
   
-
     
125
 
(Gain) loss on sale of assets and other
   
(1,612
)
   
20
 
Operating loss
   
(14,634
)
   
(23,571
)
Interest expense, net
   
5,608
     
4,632
 
Interest expense – adjustment to conversion feature of convertible debt
   
-
     
63
 
Other (income) expense, net
   
(194
)
   
79
 
Loss before income taxes
   
(20,048
)
   
(28,345
)
Income tax benefit
   
(6,897
)
   
(9,319
)
Net loss
 
$
(13,151
)
 
$
(19,026
)
Loss attributable to noncontrolling interest
   
(100
)
   
(1,376
)
Loss attributable to Cal Dive
 
$
(13,051
)
 
$
(17,650
)
 
               
Loss per share attributable to Cal Dive:
               
Basic and diluted
 
$
(0.14
)
 
$
(0.19
)
 
               
Weighted average shares outstanding:
               
Basic and diluted
   
95,081
     
93,732
 

The accompanying notes are an integral part of these consolidated financial statements.

 
Cal Dive International, Inc. and Subsidiaries

Consolidated Statements of Comprehensive Income (Loss) (unaudited)
(in thousands)

 
 
Three Months Ended
March 31,
 
 
 
2014
   
2013
 
Net loss
 
$
(13,151
)
 
$
(19,026
)
Other comprehensive loss:
               
Foreign currency translation adjustment
   
(175
)
   
(274
)
Unrealized gain from cash flow hedge (net of tax of $4 and $7, respectively)
   
8
     
13
 
Total other comprehensive loss
   
(167
)
   
(261
)
Comprehensive loss
   
(13,318
)
   
(19,287
)
Comprehensive loss attributable to noncontrolling interest
   
(100
)
   
(1,376
)
Comprehensive loss attributable to Cal Dive
 
$
(13,218
)
 
$
(17,911
)

The accompanying notes are an integral part of these consolidated financial statements.

Cal Dive International, Inc. and Subsidiaries

Consolidated Statements of Cash Flows (unaudited)
(in thousands)

 
 
Three Months Ended March 31,
 
 
 
2014
   
2013
 
Cash Flows From Operating Activities:
 
   
 
Net loss
 
$
(13,151
)
 
$
(19,026
)
Adjustments to reconcile net loss to net cash provided by (used in) operating activities:
               
Depreciation and amortization
   
14,360
     
14,180
 
Stock compensation expense
   
935
     
1,448
 
Deferred income tax benefit
   
(9,979
)
   
(15,560
)
(Gain) loss on sale of assets
   
(1,612
)
   
20
 
Amortization of debt discount and deferred financing costs
   
1,851
     
1,868
 
Marked-to-market adjustment of debt conversion feature
   
-
     
63
 
Asset impairment
   
-
     
125
 
Changes in operating assets and liabilities:
               
Accounts receivable, net
   
(28,670
)
   
23,540
 
Income tax receivable and payable, net
   
2,111
     
11,460
 
Other current assets
   
(1,698
)
   
(1,782
)
Deferred drydock costs
   
(1,094
)
   
(767
)
Accounts payable and accrued liabilities
   
(1,236
)
   
(12,277
)
Other noncurrent assets and liabilities, net
   
(2,062
)
   
227
 
Net cash provided by (used in) operating activities
   
(40,245
)
   
3,519
 
 
               
Cash Flows From Investing Activities:
               
Additions to property and equipment
   
(4,693
)
   
(1,081
)
Proceeds from sales of property and equipment
   
7,551
     
-
 
Net cash provided by (used in) investing activities
   
2,858
     
(1,081
)
 
               
Cash Flows From Financing Activities:
               
Repayments on secured term loan
   
(997
)
   
(603
)
Draws on revolving credit facility
   
56,039
     
56,500
 
Repayments on revolving credit facility
   
(26,039
)
   
(55,600
)
Payment of deferred financing costs
   
(514
)
   
-
 
Net cash provided by financing activities
   
28,489
     
297
 
 
               
Effect of exchange rate changes on cash and cash equivalents
   
7
     
(28
)
Net increase (decrease) in cash and cash equivalents
   
(8,891
)
   
2,707
 
Cash and cash equivalents, beginning of period
   
12,190
     
8,343
 
Cash and cash equivalents, end of period
 
$
3,299
   
$
11,050
 

The accompanying notes are an integral part of these consolidated financial statements.

Cal Dive International, Inc. and Subsidiaries

Notes to Consolidated Financial Statements (unaudited)
1.    General

Organization

We are a marine contractor that provides manned diving, pipelay and pipe burial, platform installation and salvage and light well intervention services to a diverse customer base in the offshore oil and natural gas industry.  We offer our customers these complementary services on an integrated basis for more complex offshore projects, which maximizes efficiencies for our customers and enhances the utilization of our fleet.  Our headquarters are located in Houston, Texas.

Our global footprint encompasses operations on the Gulf of Mexico Outer Continental Shelf (or "OCS"), and in the Northeastern U.S., Latin America, Southeast Asia, China, Australia, West Africa, the Middle East and Europe.  We own a diversified fleet of surface and saturation dive support vessels and construction barges.

Preparation of Interim Financial Statements

These interim consolidated financial statements are unaudited and have been prepared pursuant to instructions for quarterly reporting required to be filed with the Securities and Exchange Commission (or "SEC") and do not include all information and notes normally included in annual financial statements prepared in accordance with U.S. generally accepted accounting principles (or "GAAP").

The accompanying consolidated financial statements have been prepared in conformity with GAAP, and our application of GAAP for purposes of preparing the accompanying consolidated financial statements is consistent in all material respects with the manner applied to the consolidated financial statements included in our annual report on Form 10-K for the year ended December 31, 2013 (or "2013 Form 10-K").  The preparation of these financial statements requires us to make estimates and judgments that affect the amounts reported in the financial statements and the related disclosures.  Actual results may differ from our estimates.  Management has reflected all adjustments (which were normal recurring adjustments unless otherwise disclosed herein) that it believes are necessary for a fair presentation of the consolidated balance sheets, results of operations and cash flows, as applicable.

Our balance sheet as of December 31, 2013 included herein has been derived from the audited balance sheet as of December 31, 2013 included in our 2013 Form 10-K.  These consolidated financial statements should be read in conjunction with the annual consolidated financial statements and notes thereto included in our 2013 Form 10-K, which contains a summary of our significant accounting policies and estimates and other disclosures.  Interim results should not be taken as indicative of the results that may be expected for any other interim period or the year ending December 31, 2014.

Subsequent Events

We conducted our subsequent events review through the date these interim consolidated financial statements were issued with the SEC.  See note 11 for a discussion of subsequent events.

Seasonality

Marine operations are typically seasonal and depend, in part, on weather conditions.  Historically, we have experienced our lowest vessel utilization rates during the winter and early spring, when weather conditions are least favorable for offshore exploration, development and construction activities.

Significant Accounting Policies and Estimates

There have been no material changes or developments to the significant accounting policies discussed in our 2013 Form 10-K or new accounting pronouncements issued or adopted significantly affecting our financial statements.

2.    Details of Certain Accounts

Included in accounts receivable at March 31, 2014 and December 31, 2013 is $5.2 million owed from a customer in China which is overdue but could not be collected timely due to our customer's involvement in certain customs issues with a local government. In 2012 we won an arbitration award of the entire amount due and obtained an order of a Hong Kong court permitting us to enforce the arbitration award as a judgment of the court.  On March 24, 2014, an order was rendered by the Hong Kong court, ordering the payment to us of the full amount of the receivable plus attorney's fees and interest of $2.0 million, and the funds were released on March 31, 2014 and received in early April.

Also included in accounts receivable at March 31, 2014 and December 31, 2013 is $5.5 million owed from a customer in Indonesia for work that we successfully completed. This customer has acknowledged the amount is due. We are working with the customer to develop a payment plan and our receivable is secured by a guarantee by the customer's parent company. We believe that we will ultimately collect this receivable from either our customer or its parent company.

Other current assets consisted of the following as of March 31, 2014 and December 31, 2013 (in thousands):

 
 
March 31,
   
December 31,
 
 
 
2014
   
2013
 
Insurance claims to be reimbursed
 
$
1,784
   
$
22
 
Prepaid job costs (1)
   
6,447
     
9,368
 
Prepaid insurance
   
1,594
     
3,166
 
Prepaid other
   
2,889
     
1,286
 
VAT receivable
   
10,390
     
7,578
 
Other receivables (2)
   
7,132
     
3,633
 
Assets held for sale (3)
   
10,328
     
11,068
 
Supplies and spare parts inventory
   
1,107
     
1,148
 
Other
   
2
     
2
 
 
 
$
41,673
   
$
37,271
 
________________________
(1) Prepaid job costs primarily relate to our four projects in Mexico.

(2) Includes the current portion of a note receivable related to the sale of a portable saturation system during the first quarter 2014.  We monitor the credit worthiness of the buyer and have remedies under the note receivable, including lien rights.

(3) The amount recorded in assets held for sale at March 31, 2014 includes two dive support vessels, three portable saturation diving systems and one facility.  The amount recorded in assets held for sale at December 31, 2013 includes three dive support vessels, one construction barge, three portable saturation diving systems and one facility.  During the first quarter 2014, we completed the sale of one of the dive support vessels and the construction barge.  We expect to sell the remaining assets over the next twelve months and have engaged brokers to assist in facilitating these divestitures.
 


Other long-term assets, net, consisted of the following as of March 31, 2014 and December 31, 2013 (in thousands):

 
 
March 31,
   
December 31,
 
 
 
2014
   
2013
 
Intangible assets with finite lives, net
 
$
48
   
$
66
 
Deferred financing costs, net
   
7,429
     
7,664
 
Non-current notes receivables
   
3,344
     
-
 
Equipment deposits and other
   
1,138
     
832
 
Long-term tax receivable
   
1,688
     
-
 
 
 
$
13,647
   
$
8,562
 



Accrued liabilities consisted of the following as of March 31, 2014 and December 31, 2013 (in thousands):

 
 
March 31,
   
December 31,
 
 
 
2014
   
2013
 
Accrued payroll and related benefits
 
$
2,954
   
$
6,181
 
Unearned revenue
   
3,144
     
60
 
Insurance claims to be reimbursed
   
1,784
     
22
 
Self-insurance reserves
   
7,420
     
5,807
 
Accrued taxes other than income
   
12,892
     
10,164
 
Accrued interest
   
2,466
     
3,342
 
Financed insurance premium
   
1,085
     
2,379
 
Other
   
1,061
     
1,329
 
 
 
$
32,806
   
$
29,284
 
 


Other long-term liabilities consisted of the following as of March 31, 2014 and December 31, 2013 (in thousands):

 
March 31,
December 31,
 
2014
2013
Uncertain tax position liabilities
 
$
6,329
   
$
6,329
 
Other
   
2,026
     
2,094
 
 
 
$
8,355
   
$
8,423
 
 


3. Long-Term Debt

Long-term debt consisted of the following as of March 31, 2014 and December 31, 2013 (in thousands):

 
 
March 31,
   
December 31,
 
 
 
2014
   
2013
 
Revolving credit loans due 2016
 
$
105,300
   
$
75,300
 
Secured term loan due 2016
   
29,661
     
30,658
 
Convertible notes due 2017, net of unamortized discount of $17,654 and $18,755, respectively
   
68,596
     
67,495
 
Unsecured term loan
   
20,000
     
20,000
 
Total debt
   
223,557
     
193,453
 
Less current portion
   
(13,989
)
   
(13,989
)
Long-term debt
 
$
209,568
   
$
179,464
 


 
Senior Secured Credit Facility

At March 31, 2014, we had a senior secured credit facility with certain financial institutions, which matures on April 26, 2016, consisting of a variable-interest term loan and a variable-interest $125.0 million revolving credit facility (the "Credit Agreement").   At March 31, 2014, we had outstanding secured term loan debt of $29.7 million, including current maturities.  Based on this remaining balance and assuming no additional prepayments, the quarterly principal payments on the balance of the secured term loan are $1.0 million until a final payment of approximately $21.7 million becomes due at maturity on April 26, 2016.  Pursuant to the terms of the Credit Agreement, the required quarterly principal payments may be reduced based on the pro-rata prepayment of the term loan.  We may prepay all or any portions of the outstanding balance of the term loan without prepayment penalty.

Additionally, as of March 31, 2014, we had $105.3 million borrowed and $0.3 million of letters of credit issued and outstanding under our revolving credit facility.  At March 31, 2014 we had $19.4 million of borrowing capacity under our revolving credit facility.  The availability under our revolving credit facility is reduced by outstanding borrowings and letters of credit, and can be limited by our consolidated leverage (debt to earnings before interest, income taxes and depreciation and amortization (or "EBITDA") as defined in the Credit Agreement) ratio covenant at each quarter end and by our collateral coverage sublimit.  However, our revolving credit facility is not otherwise restricted during the year provided we are in compliance with existing financial covenants.  We may borrow from or repay the revolving portion of our Credit Agreement as business needs merit.

Effective March 7, 2014, we amended the Credit Agreement to among other things: (i) allow us to incur second lien debt in an aggregate principal amount not to exceed $150.0 million, so long as (a) any such second lien debt matures at least 12 months after expiration of the Credit Agreement, (b) such second lien debt is not required to be prepaid prior to its stated maturity, and (c) all of the net proceeds of such second lien debt are used to repay in full our $20.0 million unsecured term loan (the "Unsecured Term Loan") and the term loan under the Credit Agreement, and to repay a portion of the outstanding amounts under the revolving credit facility under the Credit Agreement; (ii) exclude the secured indebtedness evidenced by any such second lien debt from the calculation of the consolidated leverage ratio; (iii) increase the consolidated leverage ratio covenant from 3.75x to 4.25x for the fiscal quarter ended December 31, 2013, and then reduce the covenant to 3.00x for the fiscal quarter ending March 31, 2014 and thereafter; (iv) reduce the fixed charge coverage ratio covenant from 1.25 to 1 to 1.10 to 1 for the fiscal quarter ended December 31, 2013; (v) allow for certain asset sale proceeds to offset maintenance capital expenditures in the calculation of the fixed charge coverage ratio covenant; and (vi) allow us to incur up to $30.0 million in project financing for foreign projects. As part of the amendment, the size of the revolving credit facility under the Credit Agreement will be reduced by $5.0 million per month from May 31, 2014 to July 31, 2014 to $110.0 million.

Effective May 9, 2014, we further amended our Credit Agreement to among other things: (i) reduce the aggregate principal amount of second lien debt that we may incur to $100.0 million; (ii) give pro forma effect to the second lien debt in calculating the consolidated leverage ratio covenant for the fiscal quarter ended March 31, 2014; and (iii) increase the amount we are allowed to incur in project financing for foreign projects from $30.0 million to $75.0 million.  As part of the amendment, the size of the revolving credit facility under the Credit Agreement will be further reduced by $5.0 million per month from July 31, 2014 to December 31, 2014 to $85.0 million.

Based on the calculations for the period ended March 31, 2014, we were in compliance with all debt covenants under our Credit Agreement.  The credit facility is secured by vessel mortgages on all of our vessels, a pledge of all of the stock of all of our domestic subsidiaries and 66% of the stock of three of our foreign subsidiaries, and a security interest in, among other things, all of our equipment, inventory, accounts receivable and general tangible assets.

Convertible Notes

On July 18, 2012, we issued $86.25 million aggregate principal amount of 5.0% convertible senior notes due 2017 (the "Convertible Notes").  We received approximately $83.0 million of net proceeds, after deducting the initial purchasers' commissions and transaction expenses.  We used all of the net proceeds to repay a substantial portion of the term loan under our Credit Agreement.  In connection with the issuance of the Convertible Notes, we paid and capitalized approximately $3.5 million of loan fees which is being amortized to interest expense over the term of the Convertible Notes.

The Convertible Notes bear interest at a rate of 5.0% per year, payable semi-annually in arrears on January 15 and July 15 of each year, and mature on July 15, 2017.  The Convertible Notes are our general unsecured and unsubordinated obligations, and are guaranteed by certain of our wholly-owned domestic subsidiaries.  The Convertible Notes rank senior in right of payment to any of our future indebtedness that is expressly subordinated in right of payment to the Convertible Notes, rank equal in right of payment to our existing and future unsecured indebtedness that is not so subordinated, and are effectively subordinated in right of payment to any of our secured indebtedness to the extent of the value of the assets securing such indebtedness, and are structurally subordinated to all existing and future indebtedness and liabilities of our subsidiaries.  The Convertible Notes are governed by an indenture, as supplemented, dated July 18, 2012 with The Bank of New York Mellon Trust Company, N.A., as trustee.
We may not redeem the Convertible Notes prior to the maturity date. Prior to April 15, 2017, holders may convert their Convertible Notes only under the following circumstances:  (i) the closing sale price of our common stock equals or exceeds $2.69 for 20 days during a 30 consecutive trading day period; (ii) the trading price per $1,000 principal amount of the Convertible Notes is less than 98% of the product of the closing sale price of our common stock and the conversion price for the Convertible Notes for each of five consecutive trading days; or (iii) upon the occurrence of specified corporate events.  On and after April 15, 2017 until the maturity date, holders may convert all or a portion of their Convertible Notes at any time with settlement of all Convertible Notes converted during the period occurring on July 15, 2017. Upon conversion of a Convertible Note, we will pay or deliver, at our election, cash, shares of our common stock or a combination thereof, based on an initial conversion rate of 445.6328 shares of our common stock per $1,000 principal amount of Convertible Notes (which is equivalent to an initial conversion price of approximately $2.24 per share of our common stock). Upon the occurrence of certain fundamental changes, holders of the Convertible Notes will have the right to require us to purchase all or a portion of their Convertible Notes for cash at a price equal to 100% of the principal amount of such Convertible Notes, plus any accrued and unpaid interest. Upon the occurrence of certain significant corporate transactions, holders who convert their Convertible Notes in connection with a change of control may be entitled to a make-whole premium in the form of an increase in the conversion rate. Additionally, the Convertible Notes contain certain events of default as set forth in the indenture. As of March 31, 2014, none of the conditions allowing holders of the Convertible Notes to convert, or requiring us to repurchase the Convertible Notes, had been met. Our intent is to repay the principal amount of the Convertible Notes in cash and the conversion feature in shares of our common stock.

Neither the Convertible Notes nor the shares of our common stock, if any, issuable upon conversion of the Convertible Notes have been registered under the Securities Act or the securities laws of any other jurisdiction. We do not intend to file a shelf registration statement for the resale of the Convertible Notes or the shares, if any, issuable upon conversion of the Convertible Notes. We are required, however, to pay additional interest under specified circumstances.

At the time of issuance of the Convertible Notes, NYSE rules limited the number of shares of our common stock that we were permitted to issue upon conversion of the Convertible Notes to no more than 19.99% of our common stock outstanding immediately before the issuance of the Convertible Notes unless we received stockholder approval for such issuance, and the number of shares of our common stock that would be issued upon a full conversion of the Convertible Notes was greater than permitted by such NYSE rules. We obtained the requisite stockholder approval to accommodate full conversion of the Convertible Notes at our 2013 Annual Meeting on May 14, 2013.

Prior to obtaining stockholder approval, we determined that the conversion feature of the Convertible Notes did not meet the criteria for equity classification based on the settlement terms of the Convertible Notes. As a result, from the time of issuance to May 14, 2013, the conversion feature was recognized as a derivative liability and presented under long-term debt in the accompanying consolidated balance sheet, with offsetting changes in the fair value recognized as interest expense in the consolidated statement of operations. The initial value allocated to this derivative liability was $24.6 million of the $86.25 million principal amount of the Convertible Notes, which also represented the amount of the debt discount to be amortized through interest expense using the effective interest method through the maturity of the Convertible Notes. Accordingly, the effective interest rate used to amortize the debt discount on the Convertible Notes is 13.3%. Now that we have the ability to settle the conversion feature fully in shares of our common stock, the embedded conversion feature is no longer required to be separately valued and accounted for as a derivative liability. The marked-to-market adjustment on the conversion feature for the period from December 31, 2012 through May 14, 2013 (the final valuation date) was a reduction to interest expense of $6.4 million. Since the original date of issuance, we recorded an $8.5 million adjustment, as a reduction of interest expense for the change in fair value of the derivative liability. As of May 14, 2013, the conversion feature's cumulative value of $16.1 million was reclassified to capital in excess of par within equity and will no longer be marked-to-market through earnings. The deferred tax liability and its tax basis at the date of issuance (July 18, 2012) was also reclassified to capital in excess of par within equity.

Because it is our intent to settle the principal portion of the Convertible Notes in cash and the conversion feature in shares of our common stock, we will use the treasury stock method in calculating the diluted earnings per share effect for the variable number of shares that would be issued to settle the conversion feature. The Convertible Notes were anti-dilutive for the three months ended March 31, 2014.

Unsecured Term Loan

On June 27, 2013, we entered into a credit agreement with a financial institution providing for the $20.0 million Unsecured Term Loan.  At March 31, 2014, the full $20.0 million was outstanding under the Unsecured Term Loan.  The Unsecured Term Loan matures in two portions of $10.0 million.  Effective December 31, 2013, we amended the Unsecured Term Loan to extend the maturity date for the first portion from January 2, 2014 to April 30, 2014.  Effective April 30, 2014, we further amended the Unsecured Term Loan to extend the maturity date for the first portion from April 30, 2014 to May 30, 2014. The second portion matures on June 26, 2015. The interest rate on the Unsecured Term Loan is 13.5% per annum, payable on the first day of each calendar quarter in arrears. The net proceeds of the Unsecured Term Loan were used for certain working capital requirements relating to our contract awards in Mexico.
 
The Unsecured Term Loan contains representations and affirmative covenants that are substantially similar to those in our Credit Agreement. The Unsecured Term Loan also has terms and conditions, including events of default, that we consider reasonable and customary for this type of indebtedness. Upon the occurrence of an event of default, the interest rate will increase 2% per annum. The events of default include failure to timely pay amounts due under the Unsecured Term Loan, non-compliance with covenants, failure to pay other outstanding third party debt above a stated threshold, material breaches of representations, insolvency, a change of control and other events of default customary for this type of indebtedness (subject to applicable notice and cure periods for most defaults). During the existence of any uncured events of default, the lenders of the Unsecured Term Loan have the right to declare the outstanding amounts immediately due and payable.

The Unsecured Term Loan also requires that if (i) we fail to maintain liquidity in an amount equal to or greater than $15.0 million (measured as of the last day of each fiscal quarter, beginning on June 30, 2014); (ii) an event of default occurs; or (iii) we pay off all amounts outstanding under our Credit Agreement (other than in connection with a refinancing or replacement of such Credit Agreement), certain of our assets will become secured in favor of the lenders (only if such security would not cause a default or event of default under the Credit Agreement). Additionally, if we pay off all amounts outstanding under our Credit Agreement (other than in connection with a refinancing or replacement of such Credit Agreement), certain asset disposal events may also require prepayment of the Unsecured Term Loan.

Senior Secured Second Lien Term Loan Facility

On May 9, 2014, we entered into an amendment and restatement of the credit agreement for the Unsecured Term Loan that provides for a $100.0 million Senior Secured Second Lien Term Loan Facility (the "Second Lien Facility"), including the $20.0 million outstanding under the Unsecured Term Loan which has been converted from an unsecured term loan to a second lien term loan under the Second Lien Facility.  Both term loans under the Second Lien Facility mature on May 9, 2019, with no scheduled amortization of the term loans prior to maturity. The net proceeds of the Second Lien Facility were used to repay in full the term loan under the Credit Agreement and to repay a portion of the outstanding amounts under the revolving credit facility under the Credit Agreement. See note 11.

4. Derivative Instruments and Fair Value Measurements

Conversion Feature of Convertible Debt

At the time of issuance of the Convertible Notes, we recognized a derivative liability for their embedded conversion feature, as the Convertible Notes did not meet the criteria for equity classification based on their settlement terms. The initial value allocated to the derivative liability at issuance of the Convertible Notes on July 18, 2012 was $24.6 million.  Changes in the fair value of the derivative liability were recognized in earnings.  On May 14, 2013, we obtained stockholder approval enabling the issuance of the maximum number of shares of our common stock necessary to accommodate full conversion of the Convertible Notes.  As of that date, the embedded conversion feature was no longer required to be separately valued and accounted for as a derivative liability and was reclassified to capital in excess of par within equity.  The marked-to-market adjustment on the conversion feature for the period from December 31, 2012 through May 14, 2013 (the final valuation date) was a reduction to interest expense of $6.4 million.  The estimated fair value of the derivative liability for the conversion feature was computed using a binomial lattice model using Level 3 inputs.  The main inputs and assumptions into the binomial lattice model were our stock price at the date of valuation, expected volatility, credit spreads and the risk-free interest rate.

Fair Value Measurements

Measurements on a Recurring Basis

The fair values of our cash and cash equivalents, accounts receivable, accounts payable, and certain other current assets and current liabilities approximate their carrying value due to their short-term maturities. The fair value of our variable rate debt under our Credit Agreement was calculated using a market approach based upon Level 3 inputs including interest rate margins reflecting current market conditions.  The fair value approximates the carrying value due to the variable nature of the underlying interest rates.  The fair value of our fixed rate debt approximates the carrying value because the fixed interest rate charged approximates the rate at which we can currently borrow on unsecured debt.

Convertible Debt

The fair value of the Convertible Notes is determined based on similar debt instruments that do not contain a conversion feature. At March 31, 2014, the Convertible Notes were trading at 96.4 % of par value based on limited quotations (Level 2 inputs), and include a value associated with the conversion feature of the Convertible Notes. The Convertible Notes had a fair value of $65.5 million at March 31, 2014 and $72.7 million at December 31, 2013.

Measurements on a Non-recurring Basis

For the three months ended March 31, 2013, we recorded a $0.1 million impairment charge relating to a facility that was held for sale using Level 3 inputs based on expected proceeds.  We did not have any other fair value adjustments for assets and liabilities measured at fair value on a non-recurring basis for the three months ended March 31, 2014 and 2013, respectively.

5.    Commitments and Contingencies

Self-Insurance Reserves

We incur maritime employers' liability, workers' compensation and other insurance claims in the normal course of business, which management believes are covered by insurance. We analyze each claim for potential exposure and estimate the ultimate liability of each claim. Amounts due from insurance companies, above the applicable deductible limits, are reflected in other current assets in the consolidated balance sheets.  Such amounts were $1.8 million and less than $0.1 million as of March 31, 2014 and December 31, 2013, respectively.  We have not historically incurred significant losses as a result of claims denied by our insurance carriers.

Litigation and Claims

We are involved in various legal proceedings, primarily involving claims for personal injury under the general maritime laws of the United States and the Jones Act as a result of alleged negligence. In addition, we from time to time incur other claims, such as contract disputes, in the normal course of business. Although these matters have the potential of significant additional liability, we believe the outcome of all such matters and proceedings will not have a material adverse effect on our consolidated financial position, results of operations or cash flows.

On January 2, 2013, Cary Dale Kelley filed a lawsuit against us under the Fair Labor Standards Act ("FLSA") in the U.S. District Court, Southern District, Texas, Galveston Division, claiming that we failed to pay him and others for all wages due.  The suit was brought as a collective action pursuant to section 216(b) of the FLSA on behalf of current and former hourly offshore personnel employed within the past three years.  We answered the suit on February 4, 2013, denying the claims in their entirety and asserting certain affirmative defenses.  On August 2, 2013, the district court granted plaintiff's motion to preliminarily certify the proposed class, following which notices were mailed to over 1,000 current and former hourly offshore employees advising them of their opportunity to participate in the lawsuit.  Approximately 270 persons submitted consent forms seeking to participate in the case.  Trial has not yet been scheduled and discovery has begun.  At this time, it is impossible to predict the likelihood of a liability finding against us or the potential damages that might be awarded in the case of such a finding.  We continue to deny liability and intend to vigorously contest the claims asserted against us.

6.    Income Taxes

As of March 31, 2014 and December 31, 2013 we had $6.3 million recorded as a long-term liability for uncertain tax benefits, interest and penalty.

Our effective tax benefit rate was 34.4% and 32.9% for the three months ended March 31, 2014 and 2013, respectively.  The effective tax benefit rate for the three months ended March 31, 2014 and 2013 differs from the statutory rate primarily due to the mix of pre-tax profit or loss between U.S. and international taxing jurisdictions with varying statutory rates.  Our income tax benefit rate for the three months ended March 31, 2014 and 2013 was computed by applying estimated annual effective tax rates to income before income taxes for the interim period.

While we believe our recorded assets and liabilities are reasonable, tax laws and regulations are subject to interpretation and tax litigation is inherently uncertain.  As a result, our assessments involve a series of complex judgments about future events and rely heavily on estimates and assumptions.

7.    Performance Share Units

We have granted certain of our officers and employees performance share units, which constitute restricted stock units under our 2006 incentive plan and other stock-based awards under our 2013 incentive plan, that vest 100% following the end of a three-year performance period.  Each performance share unit represents a contingent right to receive the cash value of one share of our common stock dependent upon our total stockholder return relative to a peer group of companies over a three-year performance period. The awards are payable in cash.  A maximum value of 200% of the number of performance share units granted may be earned if performance at the maximum level is achieved.

The fair value of the performance share units is re-measured at each reporting period until the awards are settled. At March 31, 2014, the fair value of all awards granted was $3.8 million.  The fair value is calculated using a Monte-Carlo simulation model which incorporates the historical performance, volatility and correlation of our stock price with our peer group. At March 31, 2014 and December 31, 2013, the performance share unit liability, reflected in accrued liabilities in the consolidated balance sheets, was $1.0 million and $1.2 million, respectively.

Stock-based compensation expense (benefit) recognized for the performance share units for the three months ended March 31, 2014 and 2013 was $(0.2) million and $0.3 million, respectively.  The amount and timing of the recognition of additional expense or benefit will be dependent on the estimated fair value at each quarterly reporting date. Any increases or decreases in the fair value may not occur ratably over the remaining performance periods; therefore, compensation expense related to the performance share units could vary significantly in future periods.

8.    Loss Per Share

Basic loss per share (or "EPS") is computed by dividing loss attributable to Cal Dive by the weighted average shares of outstanding common stock.  The calculation of diluted EPS is similar to basic EPS, except the denominator includes dilutive common stock equivalents using the treasury stock method.  The components of basic and diluted EPS for the three months ended March 31, 2014 and 2013 were as follows (in thousands, except per share amounts):

 
 
Three Months Ended
March 31,
 
 
 
2014
   
2013
 
Numerator:
 
   
 
Loss attributable to Cal Dive
 
$
(13,051
)
 
$
(17,650
)
 
               
Denominator:
               
Basic weighted average shares outstanding
   
95,081
     
93,732
 
Dilutive outstanding securities (1)
   
-
     
-
 
Diluted weighted average shares outstanding
   
95,081
     
93,732
 
 
               
Loss per share attributable to Cal Dive:
               
Basic and diluted
 
$
(0.14
)
 
$
(0.19
)
________________________
(1) Approximately 3.7 million shares of unvested restricted stock have been excluded from the computation of basic and diluted earnings per share as the effect would be anti-dilutive.  Additionally, the Convertible Notes are only dilutive to the extent we generate net income and the average stock price during the period is greater than the conversion price of the Convertible Notes.
 

 
9. Variable Interest Entities

In 2011, we formed a joint venture with Petrolog International, Ltd. to provide offshore installation and support services for companies operating in the offshore oil and gas industry in the West Africa region.  Cal Dive owns a 60% interest in the joint venture and Petrolog own the remaining 40% interest.  Due to our financial support of the joint venture, we have determined it to be a variable interest entity of which we are the primary beneficiary.  As a result, we consolidate this joint venture entity in our financial statements.

For the three months ended March 31, 2014, no revenue and a loss of $0.3 million was recognized by the joint venture.  For the three months ended March 31, 2013, the joint venture generated revenues of $7.1 million and recorded a loss of $3.4 million.  At March 31, 2014, there were approximately $9.3 million of assets and $20.2 million of liabilities in the joint venture.  There are no restrictions on the use of assets and liabilities associated with the joint venture.  Also, creditors of the joint venture have no recourse against Cal Dive directly.

For the three months ended March 31, 2014 and 2013, loss attributable to non-controlling interest was $0.1 million and $1.4 million, respectively.

10.   Business Segment Information

We have one reportable segment, Marine Contracting. We perform a portion of our marine contracting services in foreign waters. We derived revenues from foreign locations of $105.1 million and $58.7 million for the three months ended March 31, 2014 and 2013, respectively. The remainder of our revenues was generated in the U.S. Gulf of Mexico and other U.S. waters.

We strategically evaluate the deployment of our assets and globally reposition vessels based on the demands of our clients and the markets in which they operate.  Thus, the location of our vessels can change from period to period.  Net property and equipment in foreign locations was $279.4 million and $259.8 million at March 31, 2014 and December 31, 2013, respectively.

11.   Subsequent Events

Effective May 9, 2014, we entered into Amendment No. 8 to the Credit Agreement to among other things: (i) reduce the aggregate principal amount of second lien debt we may incur to $100.0 million; (ii) give pro forma effect to the second lien debt in calculating the consolidated leverage ratio covenant for the fiscal quarter ended March 31, 2014; and (iii) increase the amount we are allowed to incur in project financing for foreign projects from $30.0 million to $75.0 million.  As part of the amendment, the size of the revolving credit facility under the Credit Agreement will be further reduced by $5.0 million per month from July 31, 2014 to December 31, 2014 to $85.0 million.

On April 30, 2014, we entered into an amendment to the Unsecured Term Loan to extend the maturity date for the first $10.0 million portion from April 30, 2014 to May 30, 2014.  On May 9, 2014, we entered into an amendment and restatement of the credit agreement for the Unsecured Term Loan that provides for a $100.0 million Second Lien Facility, including the $20.0 million outstanding under the Unsecured Term Loan which has been converted from an unsecured term loan to a second lien term loan under the Second Lien Facility.  Both term loans under the Second Lien Facility mature on May 9, 2019, with no scheduled amortization of the term loans prior to maturity.  Interest on the Second Lien Facility is payable on the last day of each calendar month in arrears, beginning on May 30, 2014.  The $20.0 million tranche bears interest at LIBOR (1% floor) plus 6.75% and the $80.0 million tranche bears interest at LIBOR (1% floor) plus 11.75%.  The net proceeds of the Second Lien Facility were used to repay in full the term loan under the Credit Agreement and to repay a portion of the outstanding amounts under the revolving credit facility under the Credit Agreement. We expect to record a loss on early extinguishment of debt during the second quarter 2014.

13

Item 2.             Management's Discussion and Analysis of Financial Condition and Results of Operations.

The following management's discussion and analysis should be read in conjunction with our historical consolidated financial statements and their accompanying notes included elsewhere in this quarterly report on Form 10-Q, and the consolidated financial statements and their accompanying notes, Management's Discussion and Analysis of Financial Condition and Results of Operations, Business and Properties sections included in our 2013 Form 10-K. This discussion contains forward-looking statements that reflect our current views with respect to future events and financial performance. Our actual results may differ materially from those anticipated in these forward-looking statements as a result of certain factors, such as those set forth under Part I, Item 1A, "Risk Factors" included in our 2013 Form 10-K.

Overview

Financial Performance

We generated a loss of $13.1 million, or $0.14 per diluted share, for the three months ended March 31, 2014 compared to a loss of $17.7 million, or $0.19 per diluted share, for the same period of 2013.  During the three months ended March 31, 2014, we generated revenues of $119.1 million compared to revenues of $80.9 million for the same period in 2013.  The improvement in our first quarter 2014 performance from the prior year was primarily due to significantly increased activity in Latin America, increased utilization for the DLB Sea Horizon in Southeast Asia and our cost savings initiatives, partially offset by lower utilization for our U.S. domestic assets.

Market Conditions and Outlook

Internationally, revenues for the first quarter 2014 increased significantly over the first quarter 2013.  Utilization continued to be strong in the markets we serve and bidding remains active.  In Mexico, during 2013 we were awarded four large contracts by Pemex that commenced in the second quarter of 2013.  We expect to complete two of the projects in the second quarter and work on the remaining two projects will continue through the third and fourth quarters 2014.  We generated $76.2 million in revenue in Latin America in the first quarter 2014, of which $65.9 million was generated from Mexico, compared to $13.2 million in the first quarter 2013, all of which was generated from Mexico, and we continue to bid on additional projects in the region. During the first quarter 2014, we also commenced a project in Ecuador that generated revenues of $10.3 million in the quarter and will be completed in the second quarter.  In Australia, two of our three dive support vessels are booked on contracts that we expect will keep them utilized through the remainder of 2014.  In Southeast Asia, the DLB Sea Horizon was fully utilized in the quarter.  In the first quarter 2014, we sold a second portable saturation diving system to a client in China, to whom we had also sold another portable saturation diving system in 2012, and entered into a three-year contract with the client to provide diving personnel and management on both saturation diving systems.  In the North Sea, we won our first air diving project, which should commence in May 2014.  Our international outlook remains positive, as we continue to implement our strategy of increasing our international operations.

We experienced historically consistent seasonal factors that affected our U.S. Gulf of Mexico business during the first quarter 2014.  In the current commodity price environment with abundant natural gas supplies, the timing and amount of our customers' spending on the U.S. Gulf of Mexico OCS are difficult to predict. Moreover, our domestic customer base has significantly changed with numerous sale and purchase transactions occurring over the last several years. Although it is unclear how long the challenging market conditions will continue, we believe the intermediate and long-term outlook for our business remains favorable in domestic markets as offshore drilling in the U.S. Gulf of Mexico OCS is improving, with an increased emphasis on oil and condensates. Additionally, the permitting approval environment has improved and we anticipate increases in both new construction and decommissioning and salvage work during 2014.

For the second consecutive year, our international revenues for the first quarter 2014 were more than 50% of consolidated revenues as we continue to implement our strategy to increase our international operations. For the three months ended March 31, 2014, our international revenues were 88% of our consolidated revenues, of which our revenues generated in Latin America were 64% of our consolidated revenues and our revenues from our contracts with Pemex were 53% of our consolidated revenues. The following table shows our consolidated revenue mix for the three months ended March 31, 2014 and 2013:

 
Three Months Ended March 31,
 
 
2014
   
2013
 
International Revenue  
   
88%
 
   
73%
 
Domestic Revenue  
   
12%
   
27%
 


 
Backlog

As of March 31, 2014, our backlog supported by written agreements or contract awards totaled approximately $281.8 million, compared to approximately $248.9 million as of December 31, 2013 and $221.0 million at March 31, 2013.  Of the backlog as of March 31, 2014, 89% is expected to be performed during 2014, with the remainder expected to be performed in 2015 and beyond.  Of the backlog at March 31, 2014, approximately $178.8 million relates to international projects with the remainder relating to projects in the U.S. Gulf of Mexico.  The contracts included in our backlog are cancellable without penalty in most cases.  Backlog is not a reliable indicator of total annual revenues because it does not include the substantial portion of our revenues that is derived from the spot market.

Vessel Utilization

We believe vessel utilization is a key performance metric for our business.  Utilization is a strong indicator of demand for our vessels and, as a result, the contract rates we may charge for our services.   Marine operations are typically seasonal and depend, in part, on weather conditions.  Historically, we have experienced our lowest vessel utilization rates during the winter and early spring, when weather conditions are least favorable for offshore exploration, development and construction activities.  Accordingly, we attempt to schedule our drydock inspections and other routine and preventative maintenance programs during this period.  From time to time, we temporarily remove from service certain vessels based on current market conditions.  The bid and award process during the first two quarters typically leads to the commencement of construction activities during the second and third quarters.

A significant portion of our international revenues, particularly in the Southeast Asia and Australia regions, are derived from our provision of diving services without the use of Company-owned vessels.  For example, we provide surface diving services from third party vessels or structures, and we provide saturation diving services from our portable saturation diving systems placed on chartered vessels, the customer's vessel or other third party vessels, and in some cases from a third party portable saturation diving system.  In addition, certain of our recent project awards in Mexico are being performed with a combination of our owned vessels and third party chartered vessels.  As a result, we may realize additional revenues in these international regions that will not be reflected in our utilization rates.

The following table shows the effective utilization of our vessels during the three months ended March 31, 2014 and 2013:

 
Three Months Ended March 31,
 
 
2014
   
2013
 
 
Utilization (1)
   
Utilization (1)
 
Saturation Diving                                                                            
   
55%
 
   
50%
 
Surface and Mixed Gas Diving
   
26%
   
22%
 
Construction Barges                                                                            
   
32%
 
   
6%
 
Entire Fleet                                                                            
   
35%
   
24%
 
________________________
(1)
Effective vessel utilization is calculated by dividing the total number of days the vessels generated revenues by the total number of days the vessels were available for operation in each period, including those temporarily removed from service, but excluding vessels permanently removed from service or while in drydock.
 


Results of Operations

Revenues

Three Months Ended March 31,
 
Increase/(Decrease)
 
2014
 
2013
 
2014 to 2013
 
(in thousands)
 
(in thousands, except %)
 
Revenues  
 
$
119,104
   
$
80,919
   
$
38,185
     
47%
 



Revenues for the three months ended March 31, 2014 increased by $38.2 million, or 47%, compared to the same quarter in 2013, due to a 79% increase in international revenues primarily related to significantly higher revenues in Latin America, as well as higher revenues in Southeast Asia compared to the 2013 period.

Gross loss

Three Months Ended March 31,
 
Increase/(Decrease)
 
2014
 
2013
 
2014 to 2013
 
(in thousands)
 
(in thousands, except %)
 
Gross loss  
 
$
(6,219
)
 
$
(11,517
)
 
$
(5,298
)
   
(46%
)



Gross loss for the three months ended March 31, 2014 improved compared to the first quarter 2013 primarily due to increased activity in Latin America, and for the DLB Sea Horizon in Southeast Asia, and our cost savings initiatives.

General and administrative expenses

 
Three Months Ended March 31,
 
Increase/(Decrease)
 
 
2014
 
2013
 
2014 to 2013
 
 
(in thousands)
 
(in thousands, except %)
 
General and administrative expenses
 
$
10,027
   
$
11,909
   
$
(1,882
)
   
(16%
)
General and administrative expenses as a percentage of revenues
   
8%
   
15%
   
(7%
)
   
(47%
)



General and administrative expenses decreased $1.9 million, or 16%, from first quarter 2013 due to the reimbursement of attorney's fees awarded in connection with our collection of an overdue receivable from a customer in China, as well as our cost savings initiatives, including headcount reductions.

Asset Impairment

Three Months Ended March 31,
 
Increase/(Decrease)
 
2014
 
2013
 
2014 to 2013
 
(in thousands)
 
(in thousands, except %)
 
Asset impairment                                                                            
 
$
-
   
$
125
   
$
(125
)
   
(100%
)



During the first quarter 2013, we recorded a $0.1 million impairment charge relating to a facility that was held for sale at March 31, 2013.

(Gain) loss on sale of assets and other (income) expense, net

 
Three Months Ended March 31,
 
Increase/(Decrease)
 
 
2014
 
2013
 
2014 to 2013
 
 
(in thousands)
 
(in thousands, except %)
 
(Gain) loss on sale of assets and other
 
$
(1,612
)
 
$
20
   
$
1,632
     
8,160%
 
Other (income) expense, net                                                                              
 
$
(194
)
 
$
79
   
$
273
     
346%
 



During the first quarter 2014, we assigned the lease for a Louisiana dock facility and sold certain leasehold improvements and other assets located at that facility to the assignee for net proceeds of $3.5 million.  We recognized a gain of $0.7 million on the sale.  Also, we sold a portable saturation diving system to a customer in China for $9.3 million and received net proceeds of $3.2 million, representing the initial installment of the purchase price, with the remaining quarterly installment payments to be made through mid-2016.  We recorded a gain on this sale of $0.8 million.  There were no significant asset sales during the first quarter 2013.

Other (income) expense is primarily from foreign currency gains and losses on transactions conducted in currencies other than the U.S. dollar.

Interest expense

Three Months Ended March 31,
 
Increase/(Decrease)
 
2014
 
2013
 
2014 to 2013
 
(in thousands)
 
(in thousands, except %)
 
Interest expense, net                                                                              
 
$
5,608
   
$
4,632
   
$
976
     
21%
Interest expense – adjustment to conversion feature of convertible debt
 
$
-
   
$
63
   
$
(63
)
   
(100%
)



The increase in interest expense, net for the three months ended March 31, 2014 from the same period in 2013 is primarily due to interest on the Unsecured Term Loan and an increase in the average amount outstanding on our revolving credit facility during the first quarter 2014 due to working capital requirements for our projects in Mexico.  This increase was partially offset by the interest awarded on the overdue receivable we collected from a client in China.  Cash paid for interest on our indebtedness was $5.1 million and $4.0 million for the three months ended March 31, 2014 and 2013, respectively.

There was no marked-to-market adjustment of the fair value of our derivative liability during the first quarter 2014, as we obtained stockholder approval to issue the maximum number of shares of our common stock necessary to accommodate full conversion of the Convertible Notes at our 2013 Annual Meeting on May 14, 2013.  We now have the ability to settle the conversion feature fully in shares of our common stock, and as a result, after May 14, 2013, the embedded conversion feature is no longer required to be separately valued and accounted for as a derivative liability. During the first quarter 2013, prior to obtaining stockholder approval, we recorded a $0.1 million pre-tax charge for the marked-to-market adjustment of the fair value of our derivative liability related to the conversion feature on our Convertible Notes to interest expense.  The interest expense recorded for the three months ended March 31, 2013 reflects the increase in our stock price from January 1, 2013 through March 31, 2013.

Income tax benefit

Three Months Ended March 31,
 
Increase/(Decrease)
 
2014
 
2013
 
2014 to 2013
 
(in thousands)
 
(in thousands, except %)
 
Income tax benefit                                                                              
 
$
(6,897
)
 
$
(9,319
)
 
$
(2,422
)
   
(26%
)



Our effective tax benefit rate was 34.4% and 32.9% for the three months ended March 31, 2014 and 2013, respectively.  The effective tax benefit rate for the three months ended March 31, 2014 and 2013 differs from the statutory rate primarily due to the mix of pre-tax profit or loss between U.S. and international taxing jurisdictions with varying statutory rates.

Loss attributable to Cal Dive

 
Three Months Ended March 31,
 
Increase/(Decrease)
 
 
2014
   
2013
 
2014 to 2013
 
 
(in thousands, except per share data)
 
(in thousands, except  per share data and %)
 
Loss attributable to Cal Dive                                                                              
 
$
(13,051
)
 
$
(17,650
)
 
$
4,599
     
26%
 
Weighted average diluted shares outstanding
   
95,081
     
93,732
     
1,349
     
1%
 
Diluted loss per share                                                                              
 
$
(0.14
)
 
$
(0.19
)
 
$
0.05
     
26%
 



The loss for the three months ended March 31, 2014 decreased from the same period ended March 31, 2013 by $4.6 million, or 26%, and diluted loss per share decreased, as a result of the factors described above.

Liquidity and Capital Resources

We require capital to fund ongoing operations and growth initiatives. Also, our larger international contracts sometimes require significant working capital.  Our primary sources of liquidity are cash flows from our operations, available cash and cash equivalents and borrowing availability under our revolving credit facility.  We use, and intend to continue using, these sources of liquidity to fund our working capital requirements, capital expenditures, strategic investments and acquisitions.  We expect to be able to fund our activities for the next 12 months with cash flows generated from our operations, available cash and cash equivalents, project financing, and available borrowings under our revolving credit facility.

Our ability to fund our business activities and achieve our near-term and long-term objectives of increasing our international operations continues to be adversely affected by liquidity constraints caused by the challenging market conditions that we have discussed in our 2013 Form 10-K and the increasing demands on our working capital imposed by the terms of the contracts typical of the international markets in which we operate.  Currently we rely on our revolving credit facility, together with our Unsecured Term Loan, to fund a significant portion of our working capital needs. If these unfavorable market conditions continued for an extended period, they could have a more direct and adverse impact on our liquidity position, as availability under our revolving credit facility is reduced by outstanding borrowings and letters of credit, and can be limited by our consolidated leverage ratio and our collateral coverage sublimit.

Our working capital needs tend to increase during the summer months in the U.S. Gulf of Mexico as we experience a seasonal increase in activity. Additionally, our contract awards in Mexico require us to make large up-front purchases of pipe and other project materials. These contracts also contain milestone billing provisions under which we may only invoice for our work when the overall project has met certain milestones. As we continue to implement our strategy to increase our international activity, we will have increasing demands on our working capital due to these and similar requirements of the contracts typical of the international markets in which we operate. In June 2013, we obtained the Unsecured Term Loan in order to fund a portion of the working capital needed for our contract awards in Mexico. However, our ability to maintain sufficient liquidity to pursue future large international project awards could depend on an overall improvement in our financial performance and our ability to reduce our reliance on third party financing for our working capital needs.

At March 31, 2014, we had total debt outstanding of $241.2 million including the principal balance under the secured term loan and revolving credit facility under our Credit Agreement, the principal balance under the Unsecured Term Loan and the principal amount of the Convertible Notes, and we had $3.3 million of cash on hand.  The Convertible Notes are recorded net of a $17.7 million debt discount on the consolidated balance sheet as of March 31, 2014.

On May 9, 2014, we entered into an amendment and restatement of the credit agreement for the Unsecured Term Loan that provides for a $100.0 million Second Lien Facility, including the $20.0 million outstanding under the Unsecured Term Loan which has been converted from an unsecured term loan to a second lien term loan under the Second Lien Facility.  Both term loans under the Second Lien Facility mature on May 9, 2019, with no scheduled amortization of the term loans prior to maturity.  Interest on the Second Lien Facility is payable on the last day of each calendar month in arrears, beginning on May 30, 2014.  The $20.0 million tranche bears interest at LIBOR (1% floor) plus 6.75% and the $80.0 million tranche bears interest at LIBOR (1% floor) plus 11.75%.  The net proceeds of the Second Lien Facility were used to repay in full the term loan under the Credit Agreement and to repay a portion of the outstanding amounts under the revolving credit facility under the Credit Agreement.  Following the amendment and extension of the Unsecured Term Loan in connection with the Second Lien Facility, we have no significant debt maturing in 2014.

Senior Secured Credit Facility

At March 31, 2014, we had a Credit Agreement providing for a senior secured credit facility, consisting of a variable-interest term loan and a variable-interest $125.0 million revolving credit facility, with certain financial institutions, which matures on April 26, 2016.  At March 31, 2014, we had outstanding term loan debt of $29.7 million, including current maturities.  Based on this remaining balance and assuming no additional prepayments, the quarterly principal payments on the balance of the term loan are $1.0 million until a final payment on the term loan of approximately $21.7 million becomes due at maturity on April 26, 2016.  Pursuant to the terms of the Credit Agreement, the required quarterly principal payments may be reduced based on the pro-rata prepayment of the term loan.  We may prepay all or any portion of the outstanding balance of the term loan without prepayment penalty.  We repaid the term loan in full in May 2014 from the proceeds of the Second Lien Facility.

Additionally, at March 31, 2014, we had $105.3 million borrowed and $0.3 million of letters of credit issued and outstanding under our revolving credit facility.  At March 31, 2014, we had $19.4 million of borrowing capacity under our revolving credit facility.  The availability under our revolving credit facility is reduced by outstanding borrowings and letters of credit, and can be limited by our consolidated leverage (debt to EBITDA) ratio covenant at each quarter end and by our collateral coverage sublimit.  However, our revolver is not otherwise restricted during the year provided we are in compliance with existing financial covenants.  We may borrow from or repay the revolving credit facility as business needs merit.

Effective March 7, 2014, we amended the Credit Agreement to among other things: (i) allow us to incur second lien debt in an aggregate principal amount not to exceed $150.0 million, so long as (a) any such second lien debt matures at least 12 months after expiration of the Credit Agreement, (b) such second lien debt is not required to be prepaid prior to its stated maturity, and (c) all of the net proceeds of such second lien debt are used to repay in full the Unsecured Term Loan and the term loan under the Credit Agreement, and to repay a portion of the outstanding amounts under the revolving credit facility under the Credit Agreement; (ii) exclude the secured indebtedness evidenced by any such second lien debt from the calculation of the consolidated leverage ratio; (iii) increase the consolidated leverage ratio covenant from 3.75x to 4.25x for the fiscal quarter ended December 31, 2013, and then reduce the covenant to 3.00x for the fiscal quarter ending March 31, 2014 and thereafter; (iv) reduce the fixed charge coverage ratio covenant from 1.25 to 1 to 1.10 to 1 for the fiscal quarter ended December 31, 2013; (v) allow for certain asset sale proceeds to offset maintenance capital expenditures in the calculation of the fixed charge coverage ratio covenant; and (vi) allow us to incur up to $30.0 million in project financing for foreign projects. As part of the amendment, the size of the revolving credit facility under the Credit Agreement will be reduced by $5.0 million per month from May 31, 2014 to July 31, 2014, to $110.0 million.

Effective May 9, 2014, we further amended our Credit Agreement to among other things: (i) reduce the aggregate principal amount of second lien debt we may incur to $100.0 million; (ii) give pro forma effect to the second lien debt in calculating the consolidated leverage ratio covenant for the fiscal quarter ended March 31, 2014; and (iii) increase the amount we are allowed to incur in project financing for foreign projects from $30.0 million to $75.0 million.  As part of the amendment, the size of the revolving credit facility under the Credit Agreement will be further reduced by $5.0 million per month from July 31, 2014 to December 31, 2014 to $85.0 million.

Based on the calculations for the period ended March 31, 2014, we were in compliance with all debt covenants under our Credit Agreement.

Convertible Notes

We have $86.25 million aggregate principal amount of Convertible Notes outstanding. The Convertible Notes bear interest at a rate of 5.0% per year, payable semi-annually in arrears on January 15 and July 15 of each year, and mature on July 15, 2017. The carrying value of the Convertible Notes on our consolidated balance sheet is net of a debt discount that is amortized through interest expense using the effective interest method through maturity of the Convertible Notes. The initial amount of the debt discount at the time of the issuance of the Convertible Notes was $24.6 million and the effective interest rate used to amortize the debt discount is 13.3%. The debt discount as of March 31, 2014 was $17.7 million.

We may not redeem the Convertible Notes prior to the maturity date. Prior to April 15, 2017, holders may convert their Convertible Notes only under the following circumstances:  (i) the closing sale price of our common stock equals or exceeds $2.69 for 20 days during a 30 consecutive trading day period; (ii) the trading price per $1,000 principal amount of the Convertible Notes is less than 98% of the product of the closing sale price of our common stock and the conversion price for the Convertible Notes for each of five consecutive trading days; or (iii) upon the occurrence of specified corporate events. On and after April 15, 2017 until the maturity date, holders may convert all or a portion of their Convertible Notes at any time. Upon conversion of a Convertible Note, we will pay or deliver, at our election, cash, shares of our common stock or a combination thereof, based on an initial conversion rate of 445.6328 shares of our common stock per $1,000 principal amount of Convertible Notes (which is equivalent to an initial conversion price of approximately $2.24 per share of our common stock). Upon the occurrence of certain fundamental changes, holders of the Convertible Notes will have the right to require us to purchase all or a portion of their Convertible Notes for cash at a price equal to 100% of the principal amount of such Convertible Notes, plus any accrued and unpaid interest.  Upon the occurrence of certain significant corporate transactions, holders who convert their Convertible Notes in connection with a change of control may be entitled to a make-whole premium in the form of an increase in the conversion rate. Additionally, the Convertible Notes contain certain events of default as set forth in the indenture.  As of March 31, 2014, none of the conditions allowing holders of the Convertible Notes to convert, or requiring us to repurchase the Convertible Notes, had been met.  Our intent is to repay the principal amount of the Convertible Notes in cash and the conversion feature in shares of our common stock.

At our 2013 Annual Meeting on May 14, 2013, we obtained stockholder approval to enable the issuance of the maximum number of shares of our common stock necessary to accommodate full conversion of the Convertible Notes.

Unsecured Term Loan

On June 27, 2013, we entered into a credit agreement with a financial institution providing for the $20.0 million Unsecured Term Loan. At March 31, 2014, the full $20.0 million was outstanding under the Unsecured Term Loan. The Unsecured Term Loan matures in two portions of $10.0 million.  Effective December 31, 2013, we amended the Unsecured Term Loan to extend the maturity date for the first portion from January 2, 2014 to April 30, 2014. Effective April 30, 2014, we further amended the Unsecured Term Loan to extend the maturity date for the first portion from April 30, 2014 to May 30, 2014. The second portion matures on June 26, 2015. The interest rate on the Unsecured Term Loan is 13.5% per annum, payable on the first day of each calendar quarter in arrears, beginning October 1, 2013. The net proceeds of the Unsecured Term Loan were used for certain working capital requirements relating to our contract awards in Mexico.  The Unsecured Term Loan was amended and extended in May 2014 in connection with the Second Lien Facility.

Capital Expenditures

During the quarter ended March 31, 2014, we incurred $3.2 million for equipment purchases, improvements and replacements and $0.6 million for regulatory drydock costs.  For the remainder of 2014, we expect capital expenditures, excluding acquisitions or investments in joint ventures, to approximate $13.2 million, primarily related to maintenance such as regulatory drydock costs.  Our capital expenditure program for 2014 is subject to market conditions, including activity levels, commodity prices and industry capacity.  We currently anticipate funding our 2014 capital expenditures through a combination of cash on hand and borrowings under our revolving credit facility.

Cash Flows

Our cash flows depend on the level of spending by oil and natural gas companies for marine contracting services. Certain sources and uses of cash, such as the level of discretionary capital expenditures, issuances and repurchases of debt and of our common stock, are within our control and are adjusted as necessary based on market conditions.  The following is a discussion of our cash flows for the three months ended March 31, 2014 and 2013 (in thousands):

 
Three Months Ended
March 31,
 
 
2014
 
2013
 
Net cash provided by (used in):
 
 
Operating activities                                                                                                                  
 
$
(40,245
)
 
$
3,519
 
Investing activities                                                                                                                  
   
2,858
     
(1,081
)
Financing activities                                                                                                                  
   
28,489
     
297
 
Effect of exchange rate changes on cash and cash equivalents
   
7
     
(28
)
Net increase (decrease) in cash and cash equivalents
 
$
(8,891
)
 
$
2,707
 



Operating Activities.  Net cash used in operating activities totaled $40.2 million for the three months ended March 31, 2014 compared to net cash provided by operating activities of $3.5 million for the three months ended March 31, 2013.  The cash used in operations for the first quarter 2014 was primarily related to our continued progress on the four projects in Mexico, and our loss recorded for the quarter adjusted for non-cash items.  Our contracts for our projects in Mexico for Pemex contain milestone billing provisions under which we may only invoice for our work when the overall project has met certain milestones.  As we execute the work and meet the milestones, we will invoice and collect the amounts due for our work.  Net cash provided by operations for the first quarter 2013 was primarily due to the receipt of a $7.1 million tax refund related to the 2012 tax year offset by our first quarter loss adjusted for non-cash items, such as depreciation and amortization and stock-based compensation, as well as changes in working capital.

Investing Activities.  Net cash provided by investing activities was $2.9 million for the three months ended March 31, 2014 compared to net cash used in investing activities of $1.1 million for the three months ended March 31, 2013.  During the three months ended March 31, 2014 and 2013, cash paid for capital expenditures was $4.7 million and $1.1 million, respectively.  Cash generated from the sale of property and equipment was $7.6 million in the first quarter 2014 primarily from the assignment of a lease for a Louisiana dock facility and the sale of certain leasehold improvements and other assets located at the facility and the sale of a portable saturation diving system.  There were no significant asset sales during the first quarter 2013.

Financing Activities.  Net cash provided by financing activities was $28.5 million for the three months ended March 31, 2014 compared to net cash provided of $0.3 million for the three months ended March 31, 2013.  During the first quarter 2014, we made principal payments of $1.0 million under our secured term loan and had net borrowings of $30.0 million under our revolving credit facility under our Credit Agreement.  During the first quarter 2013, we made principal payments of $0.6 million under our term loan and had net borrowings of $0.9 million under our revolving credit facility.

Off-Balance Sheet Arrangements

As of March 31, 2014, we have no off-balance sheet arrangements. For information regarding our principles of consolidation, see note 2 to our consolidated financial statements contained in our 2013 Form 10-K.

Critical Accounting Estimates and Policies

Our accounting policies are described in the notes to our audited consolidated financial statements included in our 2013 Form 10-K. We prepare our financial statements in conformity with GAAP. Our results of operations and financial condition, as reflected in our financial statements and related notes, are subject to management's evaluation and interpretation of business conditions, changing capital market conditions and other factors that could affect the ongoing viability of our business and our customers. We believe the most critical accounting policies in this regard are those described in our 2013 Form 10-K. While these issues require us to make judgments that are somewhat subjective, they are generally based on a significant amount of historical data and current market data.  There have been no material changes or developments in authoritative accounting pronouncements or in our evaluation of the accounting estimates and the underlying assumptions or methodologies that we believe to be critical accounting policies and estimates as disclosed in our 2013 Form 10-K.

Item 3.             Quantitative and Qualitative Disclosures About Market Risk.

Market Risk Management

We are exposed to market risks in our normal business activities.  Market risk is the potential loss that may result from market changes associated with existing or forecasted financial transactions.  The types of market risks to which we are exposed are credit risk, interest rate risk, foreign currency exchange rate risk and equity price risk.  There have been no material changes in our market risk during the three months ended March 31, 2014 from those reported under Part II, Item 7A of our 2013 Form 10-K.

Item 4.              Controls and Procedures.

Disclosure Controls and Procedures

Our CEO and CFO, with the participation of management, have evaluated the effectiveness of our "disclosure controls and procedures" (as defined in Rules 13a-15(e) and 15d-15(e) under the Securities Exchange Act of 1934) as of the end of the period covered by this quarterly report on Form 10-Q.  Based on their evaluation, they have concluded that our disclosure controls and procedures are effective as of the end of the period covered by this report.


Changes in Internal Control over Financial Reporting

There has been no change in our internal control over financial reporting that occurred during the quarter ended March 31, 2014 that has materially affected, or is reasonably likely to materially affect, our internal control over financial reporting.

PART II - OTHER INFORMATION

Cautionary Statement for Purposes of the "Safe Harbor" Provisions of the Private Securities Litigation Reform Act of 1995

This quarterly report contains or incorporates by reference statements that constitute "forward-looking statements" within the meaning of Section 27A of the Securities Act of 1993 and Section 21E of the Securities Exchange Act of 1934.  We intend that all such forward-looking information be covered by the safe harbor for "forward-looking statements" provided by the Private Securities Litigation Reform Act of 1995.  Our forward-looking statements express our current expectations or forecasts of possible future results or events, including projections of future performance, statements regarding our future financial position, business strategy, budgets, projected costs and savings, forecasts of trends, and statements of management's plans and objectives and other matters.  These forward-looking statements do not relate strictly to historic or current facts and often use words such as "may," "will," "expect," "intend," "estimate," "anticipate," "believe" or "continue" and other words and expressions of similar meaning.

Although we believe that the expectations reflected in such forward-looking statements are reasonable, any forward-looking statements contained herein are not guarantees of our future performance and our actual results may differ materially from those anticipated, projected or assumed in these forward-looking statements.  Important factors that could cause actual results to differ materially from our expectations include: our significant indebtedness and constraints on our liquidity, current economic and financial market conditions, changes in commodity prices for natural gas and oil, and in the level of offshore exploration, development and production activity in the oil and natural gas industry, our inability to obtain contracts with favorable pricing terms if there is a downturn in our business cycle, intense competition in our industry including pricing pressure, the risks of cost overruns on fixed price contracts, the uncertainties inherent in competitive bidding for work, the operational risks inherent in our business, risks associated with our increasing presence internationally and other risks detailed in Part I, Item 1A "Risk Factors" of our 2013 Form 10-K.  Accordingly, we give no assurance that any of the events anticipated by the forward-looking statements will transpire or occur, nor what impact, if any, they may have on our results of operations or financial condition.  Forward-looking statements speak only as of the date of this quarterly report, and, except for our ongoing obligations under the federal securities laws, we do not intend to update and undertake no obligation to update or revise such forward-looking statements to reflect new circumstances or unanticipated events as they occur.

Item 1A.        Risk Factors.

There have been no material changes during the three months ended March 31, 2014 to the risk factors previously disclosed in our 2013 Form 10-K.


Item 2.             Unregistered Sales of Equity Securities and Use of Proceeds.

Purchases of Equity Securities by the Issuer

The table below summarizes the repurchases of our common stock in the first quarter of 2014:

Period
Total Number of Shares Purchased(1)
Average Price Paid Per Share
Total Number of Shares Purchased as Part of Publicly Announced Plans or Programs
 
Maximum Number
(or Approximate
Dollar Value) of
Shares that May Yet
Be Purchased Under
the Plans or Programs
 
 
 
 
 
(in thousands)
January 1 to January 31, 2014
1,257
$1.83
—   
 
N/A
February 1 to February 28, 2014
   —   
      —
—   
 
N/A
March 1 to March 31, 2014                                                                        
   —   
      —
—   
 
N/A
 
1,257
$1.83
—   
 
N/A
________________________
(1) Represents shares surrendered to us by employees in order to satisfy tax withholding obligations upon vesting of restricted stock.



Item 6.             Exhibits

Exhibits filed as part of this quarterly report are listed in the Exhibit Index.

Items 1, 3, 4 and 5 are not applicable and have been omitted.

 
SIGNATURES

Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned, thereunto duly authorized.

 
CAL DIVE INTERNATIONAL, INC.
 
 
 
 
 
 
Date:    May 9, 2014
By:
/s/ Quinn J. Hébert
 
 
Quinn J. Hébert
Chairman, President and Chief Executive Officer
 
 
 
 
 
 
Date:    May 9, 2014
By:
/s/ Brent D. Smith
 
 
Brent D. Smith
Executive Vice President,
Chief Financial Officer and Treasurer
 

 
EXHIBIT INDEX
Exhibit
Number
Filed
with this
Form 10-Q
Incorporated by Reference
Exhibit Title
Form
File No.
Date Filed
3.1
Composite Certificate of Incorporation of Cal Dive International, Inc.
 
10-Q
001-33206
8/8/13
3.2
Composite Bylaws of Cal Dive International, Inc.
 
10-Q
001-33206
11/7/13
4.1
Specimen Common Stock certificate of Cal Dive International, Inc.
 
S-1
333-134609
5/31/06
4.2
Indenture, dated as of July 18, 2012, by and among Cal Dive International, Inc., the subsidiary guarantors party thereto and The Bank of New York Mellon Trust Company, N.A., as trustee
 
8-K
001-33206
7/18/12
4.3
First Supplemental Indenture dated as of April 26, 2013, by and among Cal Dive International, Inc., the subsidiary guarantors party thereto and The Bank of New York Mellon Trust Company, N.A., as trustee
 
10-Q
001-33206
8/8/13
10.1
Amendment No. 7 to Credit Agreement dated as of March 7, 2014, among Cal Dive International, Inc., the lenders from time to time party thereto and Bank of America, N.A., as Administrative Agent, Swing Line Lender and L/C Issuer
X
 
 
 
31.1
Certification Pursuant to Rule 13a-14(a) under the Securities Exchange Act of 1934 by Chief Executive Officer
X
 
 
 
31.2
Certification Pursuant to Rule 13a-14(a) under the Securities Exchange Act of 1934 by Chief Financial Officer
X
 
 
 
32.1
Section 1350 Certification by Chief Executive Officer and Chief Financial Officer
X
 
 
 
101.INS·
XBRL Instance Document
 
 
 
101.SCH·
XBRL Taxonomy Extension Schema Document
 
 
 
 
101.CAL·
XBRL Taxonomy Extension Calculation Linkbase Document
 
 
 
 
101.DEF·
XBRL Taxonomy Extension Definition Linkbase Document
 
 
 
 
101.LAB·
XBRL Taxonomy Extension Labels Linkbase Document
 
 
 
 
101.PRE·
XBRL Taxonomy Extension Presentation Linkbase Document 
 
 
 
 
________________________
·    Furnished herewith.
25