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EX-32.1 - EX-32.1 - TIDEWATER INCtdw-ex321_10.htm
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EX-31.1 - EX-31.1 - TIDEWATER INCtdw-ex311_8.htm

 

UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549

 

FORM 10-Q

 

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

For the quarterly period ended September 30, 2016

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: 1-6311

Tidewater Inc.

(Exact name of registrant as specified in its charter)

 

Delaware

 

72-0487776

(State of incorporation)

 

(I.R.S. Employer Identification No.)

601 Poydras St., Suite 1500

New Orleans, Louisiana     70130

(Address of principal executive offices) (zip code)

Registrant’s telephone number, including area code:     (504) 568-1010

Not Applicable

(Former name, former address and former fiscal year, if changed since last report)

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

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      No  

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  

Accelerated filer  

Non-accelerated filer  

Smaller reporting company  

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

47,068,079 shares of Tidewater Inc. common stock $.10 par value per share were outstanding on October 21, 2016.  Registrant has no other class of common stock outstanding.

 

 

 


 

PART I.  FINANCIAL INFORMATION

ITEM 1.

FINANCIAL STATEMENTS

TIDEWATER INC.

CONDENSED CONSOLIDATED BALANCE SHEETS

(Unaudited)

(In thousands, except share and par value data)

 

 

September 30,

 

 

March 31,

 

ASSETS

 

2016

 

 

2016

 

Current assets:

 

 

 

 

 

 

 

 

Cash and cash equivalents

 

$

674,923

 

 

 

678,438

 

Trade and other receivables, net

 

 

209,850

 

 

 

228,113

 

Due from affiliate

 

 

300,757

 

 

 

338,595

 

Marine operating supplies

 

 

31,124

 

 

 

33,413

 

Other current assets

 

 

31,874

 

 

 

44,755

 

Total current assets

 

 

1,248,528

 

 

 

1,323,314

 

Investments in, at equity, and advances to unconsolidated companies

 

 

38,200

 

 

 

37,502

 

Properties and equipment:

 

 

 

 

 

 

 

 

Vessels and related equipment

 

 

4,486,959

 

 

 

4,666,749

 

Other properties and equipment

 

 

78,459

 

 

 

92,065

 

 

 

 

4,565,418

 

 

 

4,758,814

 

Less accumulated depreciation and amortization

 

 

1,253,851

 

 

 

1,207,523

 

Net properties and equipment

 

 

3,311,567

 

 

 

3,551,291

 

Other assets

 

 

89,967

 

 

 

71,686

 

Total assets

 

$

4,688,262

 

 

 

4,983,793

 

 

 

 

 

 

 

 

 

 

LIABILITIES AND EQUITY

 

 

 

 

 

 

 

 

Current liabilities:

 

 

 

 

 

 

 

 

Accounts payable

 

$

64,231

 

 

 

49,130

 

Accrued expenses

 

 

76,085

 

 

 

91,611

 

Due to affiliate

 

 

175,925

 

 

 

187,971

 

Accrued property and liability losses

 

 

3,602

 

 

 

3,321

 

Current portion of long-term debt

 

 

2,041,367

 

 

 

2,045,516

 

Other current liabilities

 

 

60,345

 

 

 

74,825

 

Total current liabilities

 

 

2,421,555

 

 

 

2,452,374

 

Deferred income taxes

 

 

48,204

 

 

 

34,841

 

Accrued property and liability losses

 

 

11,210

 

 

 

9,478

 

Other liabilities and deferred credits

 

 

164,530

 

 

 

181,546

 

 

 

 

 

 

 

 

 

 

Commitments and Contingencies (Note 8)

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Equity:

 

 

 

 

 

 

 

 

Common stock of $0.10 par value, 125,000,000 shares authorized,

   issued 47,068,079 shares at September 30, 2016 and 47,067,715

   shares at March 31, 2016

 

 

4,707

 

 

 

4,707

 

Additional paid-in capital

 

 

169,443

 

 

 

166,604

 

Retained earnings

 

 

1,867,701

 

 

 

2,135,075

 

Accumulated other comprehensive loss

 

 

(6,443

)

 

 

(6,866

)

Total stockholders’ equity

 

 

2,035,408

 

 

 

2,299,520

 

Noncontrolling Interests

 

 

7,355

 

 

 

6,034

 

Total equity

 

 

2,042,763

 

 

 

2,305,554

 

Total liabilities and equity

 

$

4,688,262

 

 

 

4,983,793

 

 

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

 

 

2


 

TIDEWATER INC.

CONDENSED CONSOLIDATED STATEMENTS OF EARNINGS (LOSS)

(Unaudited)

(In thousands, except share and per share data)

 

 

 

Quarter Ended

 

 

Six Months Ended

 

 

 

September 30,

 

 

September 30,

 

 

 

2016

 

 

2015

 

 

2016

 

 

2015

 

Revenues:

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Vessel revenues

 

$

139,361

 

 

 

264,131

 

 

 

301,791

 

 

 

562,444

 

Other operating revenues

 

 

4,361

 

 

 

7,792

 

 

 

9,856

 

 

 

14,253

 

 

 

 

143,722

 

 

 

271,923

 

 

 

311,647

 

 

 

576,697

 

Costs and expenses:

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Vessel operating costs

 

 

87,094

 

 

 

158,612

 

 

 

195,968

 

 

 

337,893

 

Costs of other operating revenues

 

 

3,423

 

 

 

6,102

 

 

 

7,326

 

 

 

11,846

 

General and administrative

 

 

32,954

 

 

 

37,286

 

 

 

70,001

 

 

 

81,239

 

Vessel operating leases

 

 

8,441

 

 

 

8,441

 

 

 

16,882

 

 

 

16,884

 

Depreciation and amortization

 

 

43,845

 

 

 

45,979

 

 

 

88,397

 

 

 

91,636

 

Gain on asset dispositions, net

 

 

(6,253

)

 

 

(6,111

)

 

 

(11,896

)

 

 

(13,462

)

Asset impairments

 

 

129,562

 

 

 

31,672

 

 

 

166,448

 

 

 

46,630

 

Restructuring charge

 

 

 

 

 

7,586

 

 

 

 

 

 

7,586

 

 

 

 

299,066

 

 

 

289,567

 

 

 

533,126

 

 

 

580,252

 

Operating loss

 

 

(155,344

)

 

 

(17,644

)

 

 

(221,479

)

 

 

(3,555

)

Other income (expenses):

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Foreign exchange gain (loss)

 

 

(2,539

)

 

 

844

 

 

 

(5,272

)

 

 

(3,289

)

Equity in net earnings (losses) of unconsolidated companies

 

 

1,313

 

 

 

(2,919

)

 

 

1,312

 

 

 

(5,360

)

Interest income and other, net

 

 

992

 

 

 

355

 

 

 

2,168

 

 

 

1,145

 

Interest and other debt costs, net

 

 

(18,477

)

 

 

(13,247

)

 

 

(35,431

)

 

 

(26,429

)

 

 

 

(18,711

)

 

 

(14,967

)

 

 

(37,223

)

 

 

(33,933

)

Loss before income taxes

 

 

(174,055

)

 

 

(32,611

)

 

 

(258,702

)

 

 

(37,488

)

Income tax expense

 

 

3,568

 

 

 

11,388

 

 

 

7,564

 

 

 

21,675

 

Net Loss

 

$

(177,623

)

 

 

(43,999

)

 

 

(266,266

)

 

 

(59,163

)

Less: Net income (loss) attributable to noncontrolling interests

 

 

867

 

 

 

(164

)

 

 

1,321

 

 

 

(276

)

Net loss attributable to Tidewater Inc.

 

$

(178,490

)

 

 

(43,835

)

 

 

(267,587

)

 

 

(58,887

)

Basic loss per common share

 

$

(3.79

)

 

 

(0.93

)

 

 

(5.69

)

 

 

(1.25

)

Diluted loss per common share

 

$

(3.79

)

 

 

(0.93

)

 

 

(5.69

)

 

 

(1.25

)

Weighted average common shares outstanding

 

 

47,067,864

 

 

 

46,942,950

 

 

 

47,067,790

 

 

 

46,962,242

 

Dilutive effect of stock options and restricted stock

 

 

 

 

 

 

 

 

 

 

 

 

Adjusted weighted average common shares

 

 

47,067,864

 

 

 

46,942,950

 

 

 

47,067,790

 

 

 

46,962,242

 

 

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

 

 

3


 

TIDEWATER INC.

CONDENSED CONSOLIDATED STATEMENTS OF COMPREHENSIVE LOSS

(Unaudited)

(In thousands)

 

 

 

Quarter Ended

 

 

Six Months Ended

 

 

 

September 30,

 

 

September 30,

 

 

 

2016

 

 

2015

 

 

2016

 

 

2015

 

Net loss

 

$

(177,623

)

 

 

(43,999

)

 

 

(266,266

)

 

 

(59,163

)

Other comprehensive income (loss):

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Unrealized gains (losses) on available for sale securities,

   net of tax of $0, $0, $0 and $0

 

 

119

 

 

 

(627

)

 

 

280

 

 

 

(679

)

Amortization of loss on derivative contract, net of tax of

   $0, $0, $0 and $0

 

 

72

 

 

 

180

 

 

 

143

 

 

 

359

 

Change in other benefit plan minimum liability, net of tax

   of $0, $0, $0 and $0

 

 

 

 

 

 

 

 

 

 

 

70

 

Total comprehensive loss

 

$

(177,432

)

 

 

(44,446

)

 

 

(265,843

)

 

 

(59,413

)

 

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

 

 

4


 

TIDEWATER INC.

CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS

(Unaudited)

(In thousands)

 

 

 

Six Months Ended

 

 

 

September 30,

 

 

 

2016

 

 

2015

 

Operating activities:

 

 

 

 

 

 

 

 

Net loss

 

$

(266,266

)

 

 

(59,163

)

Adjustments to reconcile net loss to net cash provided by operating

   activities:

 

 

 

 

 

 

 

 

Depreciation and amortization

 

 

88,397

 

 

 

91,636

 

Provision for deferred income taxes

 

 

 

 

 

128

 

Gain on asset dispositions, net

 

 

(11,896

)

 

 

(13,462

)

Asset impairments

 

 

166,448

 

 

 

46,630

 

Equity in earnings (losses) of unconsolidated companies, less dividends

 

 

(1,659

)

 

 

6,424

 

Compensation expense - stock-based

 

 

2,628

 

 

 

6,614

 

Changes in assets and liabilities, net:

 

 

 

 

 

 

 

 

Trade and other receivables

 

 

18,263

 

 

 

30,891

 

Changes in due to/from affiliate, net

 

 

25,792

 

 

 

53,769

 

Marine operating supplies

 

 

2,289

 

 

 

11,370

 

Other current assets

 

 

(1,827

)

 

 

(3,681

)

Accounts payable

 

 

9,671

 

 

 

5,228

 

Accrued expenses

 

 

(16,386

)

 

 

(13,512

)

Accrued property and liability losses

 

 

281

 

 

 

(212

)

Other current liabilities

 

 

(9,716

)

 

 

(6,011

)

Other liabilities and deferred credits

 

 

(5,173

)

 

 

2,594

 

Other, net

 

 

(1,448

)

 

 

4,648

 

Net cash provided by (used in) operating activities

 

 

(602

)

 

 

163,891

 

Cash flows from investing activities:

 

 

 

 

 

 

 

 

Proceeds from sales of assets

 

 

1,839

 

 

 

6,133

 

Additions to properties and equipment

 

 

(9,509

)

 

 

(138,990

)

Refunds from cancelled vessel construction contracts

 

 

11,515

 

 

 

36,190

 

Net cash provided by (used in) investing activities

 

 

3,845

 

 

 

(96,667

)

Cash flows from financing activities:

 

 

 

 

 

 

 

 

Principal payment on long-term debt

 

 

(5,036

)

 

 

(64,374

)

Debt borrowings

 

 

 

 

 

31,338

 

Cash dividends

 

 

 

 

 

(23,579

)

Other

 

 

(1,722

)

 

 

(961

)

Net cash used in financing activities

 

 

(6,758

)

 

 

(57,576

)

Net change in cash and cash equivalents

 

 

(3,515

)

 

 

9,648

 

Cash and cash equivalents at beginning of period

 

 

678,438

 

 

 

78,568

 

Cash and cash equivalents at end of period

 

$

674,923

 

 

 

88,216

 

Supplemental disclosure of cash flow information:

 

 

 

 

 

 

 

 

Cash paid during the period for:

 

 

 

 

 

 

 

 

Interest, net of amounts capitalized

 

$

34,209

 

 

 

24,894

 

Income taxes

 

$

16,790

 

 

 

27,853

 

Supplemental disclosure of non-cash investing activities:

 

 

 

 

 

 

 

 

Additions to properties and equipment

 

$

10,477

 

 

 

1,471

 

 

 

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

 

 

5


 

TIDEWATER INC.

CONDENSED CONSOLIDATED STATEMENTS OF EQUITY

(Unaudited)

(In thousands)

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Accumulated

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Additional

 

 

 

 

 

 

other

 

 

Non

 

 

 

 

 

 

 

Common

 

 

paid-in

 

 

Retained

 

 

comprehensive

 

 

controlling

 

 

 

 

 

 

 

stock

 

 

capital

 

 

earnings

 

 

loss

 

 

interest

 

 

Total

 

Balance at March 31, 2016

 

$

4,707

 

 

 

166,604

 

 

 

2,135,075

 

 

 

(6,866

)

 

 

6,034

 

 

 

2,305,554

 

Total comprehensive loss

 

 

 

 

 

 

 

 

(267,587

)

 

 

423

 

 

 

1,321

 

 

 

(265,843

)

Stock option activity

 

 

 

 

 

577

 

 

 

 

 

 

 

 

 

 

 

 

577

 

Cancellation of restricted stock awards

 

 

 

 

 

 

 

 

213

 

 

 

 

 

 

 

 

 

213

 

Amortization/cancellation of restricted stock units

 

 

 

 

 

2,262

 

 

 

 

 

 

 

 

 

 

 

 

2,262

 

Balance at September 30, 2016

 

$

4,707

 

 

 

169,443

 

 

 

1,867,701

 

 

 

(6,443

)

 

 

7,355

 

 

 

2,042,763

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Balance at March 31, 2015

 

$

4,703

 

 

 

159,940

 

 

 

2,330,223

 

 

 

(20,378

)

 

 

6,227

 

 

 

2,480,715

 

Total comprehensive loss

 

 

 

 

 

 

 

 

(58,887

)

 

 

(250

)

 

 

(276

)

 

 

(59,413

)

Stock option activity

 

 

 

 

 

421

 

 

 

 

 

 

 

 

 

 

 

 

421

 

Cash dividends declared ($.50 per share)

 

 

 

 

 

 

 

 

(23,154

)

 

 

 

 

 

 

 

 

(23,154

)

Amortization of restricted stock units

 

 

1

 

 

 

5,186

 

 

 

 

 

 

 

 

 

 

 

 

5,187

 

Amortization/cancellation of restricted stock awards

 

 

(7

)

 

 

243

 

 

 

 

 

 

 

 

 

 

 

 

236

 

Balance at September 30, 2015

 

$

4,697

 

 

 

165,790

 

 

 

2,248,182

 

 

 

(20,628

)

 

 

5,951

 

 

 

2,403,992

 

 

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

 

 

6


 

(1)

INTERIM FINANCIAL STATEMENTS

 

The unaudited condensed consolidated financial statements for the interim periods presented herein have been prepared in conformity with United States generally accepted accounting principles and, in the opinion of management, include all adjustments (consisting only of normal recurring adjustments) necessary for a fair presentation of the unaudited condensed consolidated financial statements at the dates and for the periods indicated as required by Rule 10-01 of Regulation S‑X of the Securities and Exchange Commission (SEC). Results of operations for interim periods are not necessarily indicative of results of operations for the respective full years. These unaudited condensed consolidated financial statements should be read in conjunction with the consolidated financial statements and notes thereto in the company’s Annual Report on Form 10-K for the year ended March 31, 2016, filed with the SEC on May 26, 2016. All subsequent references to “Notes” refer to Notes to Consolidated Financial Statements located in Item 1 of this Quarterly Report on Form 10-Q, unless otherwise stated.

The unaudited condensed consolidated financial statements include the accounts of Tidewater Inc. and its subsidiaries. Intercompany balances and transactions are eliminated in consolidation. The company uses the equity method to account for equity investments over which the company exercises significant influence but does not exercise control and is not the primary beneficiary. Unless otherwise specified, all per share information included in this document is on a diluted earnings per share basis.

The company made certain reclassifications to prior period amounts to conform to the current year presentation, specifically, a modification to the company’s reportable segments (refer to Note 12) and the adoption of ASU 2015-03, Interest-Imputation of Interest: Simplifying the Presentation of Debt Issue Costs (refer to Note 6). These reclassifications did not have a material effect on the condensed consolidated statements of earnings, balance sheets or cash flows.

 

 

(2)STATUS OF DISCUSSIONS WITH LENDERS AND NOTEHOLDERS

 

Please refer to Note (6) of Notes to Consolidated Financial Statements included in Item 1 of this Quarterly Report on Form 10-Q and Note (5) of Notes to Consolidated Financial Statements included in Item 8 of the company’s Annual Report on Form 10-K for the year ended March 31, 2016 for additional information regarding the company’s outstanding debt.

 

The decrease in oil and gas prices that began in the second half of fiscal 2015 and continued throughout fiscal 2016 has led to materially lower levels of spending for offshore exploration and development by the company’s customers globally. In addition, newly constructed vessels have been delivered over the last several years, exacerbating weak vessel utilization. With reduced demand for offshore support vessels along with a higher number of newer generation vessels, the company has experienced a significant decline in the utilization of its vessels, average day rates received and vessel revenue. The company has implemented a number of significant cost reduction measures to mitigate the effects of significantly lower vessel revenue and, given the currently challenging offshore support vessel market and business outlook, continues its efforts to reduce its operating costs and preserve its liquidity.

 

At June 30, 2016 and September 30, 2016, the company did not meet the 3.0x minimum interest coverage ratio covenant (the “minimum interest coverage ratio requirement”) contained in its Revolving Credit and Term Loan Agreement (“Bank Loan Agreement”), the Troms Offshore Debt and the 2013 Senior Note Agreement (the “2013 Note Agreement”). Failure to meet the minimum interest coverage ratio requirement would have resulted in covenant noncompliance; however, as discussed in more detail below, limited waivers were received. Without these limited waivers, the respective lenders and/or the noteholders would have had the ability to declare the company to be in default of the Bank Loan Agreement, the Troms Offshore Debt and/or the 2013 Note Agreement, as applicable, and accelerate the indebtedness thereunder, the effect of which would be to likewise cause the company’s other Senior Notes, which were issued in 2010 and 2011, to be in default.

 

The company’s bank loans and its notes are linked together by cross-default provisions, such that if either the lenders or the noteholders declare the loans or notes to be in default, the other indebtedness likewise will be in default, and all of the debt at that time may be accelerated if the majority of lenders or noteholders under the respective debt agreements elect to accelerate. If the company is not in compliance with covenants set forth in the agreements evidencing these debt obligations, and such non-compliance is not waived, then the holders of a majority of loans may declare the bank loans to be in default, and the holders of a majority in principal amount of any of the three classes of the company’s notes may declare that class of notes to be in default. In such event, all of our indebtedness would be accelerated, and the company will not have sufficient liquidity to repay those accelerated amounts. The decision as to whether to accelerate the debt upon the company’s non-compliance with the debt covenants lies with the lenders and noteholders.

 

7


 

While the company is continuing to work toward amendments to its various debt arrangements that will be acceptable to all parties, there is a possibility that the lenders, noteholders and the company will not be able to negotiate new debt terms that are acceptable to all parties, in which case the company will likely seek reorganization under Chapter 11 of the federal bankruptcy laws, which could include a restructuring of the company’s various debt obligations and could place equity holders at significant risk of losing some or all of their interests in the company.

 

Given that the company expected it would not meet the minimum interest coverage ratio requirement set forth in the Bank Loan Agreement, the Troms Offshore Debt and the 2013 Note Agreement during fiscal 2017, which could result in the acceleration of the debt under these agreements and the company’s other Senior Notes, the report of the company's independent registered public accounting firm that accompanied the company’s audited consolidated financial statements for the fiscal year ended March 31, 2016 (the “audit opinion”) contained an explanatory paragraph regarding the company’s ability to continue as a going concern.  Such going concern explanatory paragraph was required because the company’s internal forecast indicated that, within fiscal 2017, the company may no longer be in compliance with the minimum interest coverage ratio requirement.

 

In addition, the Bank Loan Agreement and the Troms Offshore Debt require that the company receive an unqualified audit opinion from an independent certified public accountant that is not subject to a going concern or similar modification. The inability of the company to obtain an audit opinion without any modification is an independent event of default under these agreements which would allow the lenders to accelerate the indebtedness thereunder, the effect of which would be to likewise cause all of the company’s Senior Notes to be in default. The explanatory paragraph in the audit opinion also references the audit opinion-related event of default under various borrowing arrangements as an uncertainty that raises substantial doubt about the company’s ability to continue as a going concern. As a result of the company’s failure to receive an audit opinion with no modifications from the company’s independent certified public accountants, and because the waivers are for a limited period that is less than one year, all of the company’s indebtedness has been classified as a current liability in the accompanying consolidated balance sheet since March 31, 2016.

 

As previously reported, the company obtained limited waivers from the necessary lenders which waived the unqualified audit opinion requirement and/or waived the minimum interest coverage ratio requirement until October 21, 2016.  Prior to the October 21, 2016 expiry of such limited waivers, the company obtained limited waivers from the necessary lenders and noteholders which extend the waiver of the unqualified audit opinion requirement and/or waive the minimum interest coverage ratio requirement until November 11, 2016.

 

The company continues to engage in discussions with its principal lenders and noteholders to amend the company’s various debt arrangements in advance of the expiration of the waivers on November 11, 2016.  In its October 21, 2016 press release announcing the most recent extension, the company reported that recent industry data, including data regarding projected levels of offshore drilling activity, a primary driver of activity within the offshore service vessel industry, had led the company to conclude that important debt terms will require further negotiation. Such negotiations, if successfully concluded, would require the company to make certain concessions under the existing agreements, such as providing collateral to secure the Bank Loan Agreement, the Troms Offshore Debt and the Senior Notes, repaying a portion of the indebtedness outstanding under the Bank Loan Agreement, accepting a reduction in total borrowing capacity under the revolving credit facility, paying a higher rate of interest, issuing some form of equity or equity linked compensation enhancement, paying down a portion of the Troms Offshore Debt and/or Senior Notes, or some combination of the above. In addition, such amendments will need to address the audit opinion requirement of the Bank Loan Agreement and the Troms Offshore Debt (the waiver of which has been extended until November 11, 2016). Obtaining the covenant relief will require the company to reach an agreement that satisfies potentially divergent interests of its principal lenders and noteholders.

 

The company’s unaudited condensed consolidated financial statements as of and for the quarter and six months ended September 30, 2016 were prepared assuming the company would continue as a going concern, which contemplates continuity of operations, realization of assets and the satisfaction of liabilities in the normal course of business for the twelve month period following the date of these consolidated financial statements.

 

 


8


 

(3)

STOCKHOLDERS' EQUITY

Dividends

The declaration of dividends is at the discretion of the company’s Board of Directors, and will depend on the company’s financial results, cash requirements, future prospects, and other factors deemed relevant by the Board of Directors. The Board of Directors declared the following dividends for the quarters and six-month periods ended September 30, 2016 and 2015:

 

 

 

Quarter Ended

 

 

Six Months Ended

 

 

 

September 30,

 

 

September 30,

 

(In thousands, except dividend per share)

 

2016

 

 

2015

 

 

2016

 

 

2015

 

Dividends declared

 

$

 

 

 

11,814

 

 

 

 

 

 

23,154

 

Dividend per share

 

 

 

 

 

0.25

 

 

 

 

 

 

0.50

 

 

In January 2016, the company suspended the quarterly dividend program in order to preserve liquidity.

 

Accumulated Other Comprehensive Loss

The changes in accumulated other comprehensive income (loss) by component, net of tax for the quarters and six month periods ended September 30, 2016 and 2015 are as follows:

 

 

 

For the quarter ended September 30, 2016

 

 

For the six months ended September 30, 2016

 

 

 

Balance

 

 

Gains/(losses)

 

Reclasses

 

Net

 

Remaining

 

 

Balance

 

 

Gains/(losses)

 

Reclasses

 

Net

 

 

 

Remaining

 

 

 

at

 

 

recognized

 

from OCI to

 

period

 

balance

 

 

at

 

 

recognized

 

from OCI to

 

period

 

 

 

balance

 

(in thousands)

 

6/30/16

 

 

in OCI

 

net income

 

OCI

 

9/30/16

 

 

3/31/16

 

 

in OCI

 

net income

 

OCI

 

 

 

9/30/16

 

Available for sale securities

 

 

(47

)

 

 

79

 

 

 

 

40

 

 

 

 

119

 

 

 

 

72

 

 

 

(208

)

 

 

138

 

 

 

 

142

 

 

 

 

280

 

 

 

 

72

 

Currency translation adjustment

 

 

(9,811

)

 

 

 

 

 

 

 

 

 

 

 

 

 

 

(9,811

)

 

 

(9,811

)

 

 

 

 

 

 

 

 

 

 

 

 

 

 

(9,811

)

Pension/Post- retirement benefits

 

 

4,683

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

4,683

 

 

 

4,683

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

4,683

 

Interest rate swaps

 

 

(1,459

)

 

 

 

 

 

 

72

 

 

 

 

72

 

 

 

 

(1,387

)

 

 

(1,530

)

 

 

 

 

 

 

143

 

 

 

 

143

 

 

 

 

(1,387

)

Total

 

 

(6,634

)

 

 

79

 

 

 

 

112

 

 

 

 

191

 

 

 

 

(6,443

)

 

 

(6,866

)

 

 

138

 

 

 

 

285

 

 

 

 

423

 

 

 

 

(6,443

)

 

 

 

For the quarter ended September 30, 2015

 

 

For the six months ended September 30, 2015

 

 

 

Balance

 

 

Gains/(losses)

 

Reclasses

 

Net

 

Remaining

 

 

Balance

 

 

Gains/(losses)

 

Reclasses

 

Net

 

Remaining

 

 

 

at

 

 

recognized

 

from OCI to

 

period

 

balance

 

 

at

 

 

recognized

 

from OCI to

 

period

 

balance

 

(in thousands)

 

6/30/15

 

 

in OCI

 

net income

 

OCI

 

9/30/15

 

 

3/31/15

 

 

in OCI

 

net income

 

OCI

 

9/30/15

 

Available for sale securities

 

 

183

 

 

 

(690

)

 

 

 

63

 

 

 

 

(627

)

 

 

 

(444

)

 

 

235

 

 

 

(804

)

 

 

 

125

 

 

 

 

(679

)

 

 

 

(444

)

Currency translation adjustment

 

 

(9,811

)

 

 

 

 

 

 

 

 

 

 

 

 

 

 

(9,811

)

 

 

(9,811