(Stated in thousands of U.S. dollars, except par value and share amounts)
The accompanying notes are an integral part of these unaudited condensed consolidated financial statements
The accompanying notes are an integral part of these unaudited condensed consolidated financial statements
The accompanying notes are an integral part of these unaudited condensed consolidated financial statements
The accompanying notes are an integral part of these unaudited condensed consolidated financial statements
The accompanying notes are an integral part of these unaudited condensed consolidated financial statements
(Stated in thousands of U.S. dollars, except per share data and otherwise indicated)
(Information pertaining to the three-month periods ended March 31, 2016 and 2015 is unaudited)
1.
|
NATURE OF OPERATIONS, FINANCIAL SITUATION AND CORPORATE ORGANIZATION
|
Nature of operations
Ultrapetrol (Bahamas) Limited ("Ultrapetrol Bahamas", "Ultrapetrol", "the Company", "us" or "we") is a company organized and registered as a Bahamas Corporation since December 1997.
We are a shipping transportation company serving the marine transportation needs of our clients in the markets on which we focus. We serve the shipping markets for technological products, grain soybean, forest products, minerals, crude oil, petroleum, and refined petroleum products, as well as the offshore oil platform supply market, through our operations in the following three segments of the marine transportation industry. In our River Business we are an owner and operator of river barges and push boats in the Hidrovia region of South America, a region of navigable waters on the Parana, Paraguay and Uruguay Rivers and part of the River Plate, which flow through Brazil, Bolivia, Uruguay, Paraguay and Argentina. The Company also has a shipyard that should promote organic growth and from time to time make external sales. In our Offshore Supply Business we own and operate vessels that provide logistical and transportation services for offshore petroleum exploration and production companies, in the coastal waters of Brazil and the North Sea. In our Ocean Business, we are an owner and operator of oceangoing vessels that transport petroleum products and a container line service in the Argentine cabotage trade.
Financial situation
The Company maintains approximately $472,935 of long term financial debt including accrued interests as of March 31, 2016 of which approximately $101,780 are current as were stated in the terms of the original debt agreements.
The Company has not made the $10 million interest payment due on December 15, 2015 on its outstanding 8.875% First Preferred Ship Mortgage Notes due 2021 (the "2021 Senior Notes) which constitutes an event of default. The Company has entered into forbearance agreements with most of its lenders with respect to this event of default which expire at the earlier of May 31, 2016 or the occurrence of certain events specified in the agreements. The lenders have agreed, for the duration of these agreements, not to accelerate their loans, take any enforcement actions or exercise any remedies with respect to defaults resulting from the nonpayment by the Company of its interest payment under the 2021 Senior Notes, and to work with the Company in negotiating a sustainable financial structure.
The forbearance agreement also provided for the formation of a special committee, among others, to explore options and make recommendations to the Company's board of directors in connection with the restructuring of the Company, including a process to market and sell the River Business and Offshore Supply Business. This sale process was launched in February 2016 in accordance with the agreement and some non-binding offers were received being far from what it is considered a fair value for this business.
Moreover, due to the uncertainties surrounding the current downturn conditions of the Brazilian offshore supply business driven mainly by the drop in oil crude prices, certain of our platform supply vessels (PSVs) time charter contracts with our customer Petroleo Brasileiro SA (Petrobras) were early terminated or blocked during 2015. Further early termination or blockage of our time charter contracts with Petrobras may result in our PSVs laid up for an extended period of time which could have a material adverse effect on our financial condition and results of operations.
Negotiations continue with representatives of holders of the 2021 Senior Notes and with the Company's other secured lenders to obtain debt maturity extensions or restructuring of the debt agreements, including the 2021 Senior Notes and the credit facilities and loan agreements, as well as extensions on the current forbearance agreements.
Also, as of December 31, 2015, the Company failed to meet some financial covenants. As discussed above, the lenders have agreed for the duration of the forbearance agreements not to take any enforcement actions given these failures. Non-compliance with financial covenants as of March 31, 2016 is waived pursuant to the forbearance agreements signed with our creditors.
ULTRAPETROL (BAHAMAS) LIMITED AND SUBSIDIARIES
As a result of this non-compliance and of the cross-default provisions contained in relevant debt agreements, the Company has classified the respective long term financial debt amounting to $371,155 at March 31, 2016, as current liabilities. As a result, the Company reports a working capital deficit of $386,741 at March 31, 2016.
We cannot guarantee that we will be able to obtain our lenders' consent to extend the current forbearance agreements or that our efforts to extend the maturity of or restructure our debt agreements will be successful. If we fail to remedy or obtain a waiver of the event of defaults our lenders may accelerate our indebtedness under the relevant debt agreements, which could trigger the cross-acceleration or cross-default provisions contained in our other debt agreements. If our indebtedness is accelerated, it will be very difficult in the current financing environment for us to refinance our debt or obtain additional financing and we could lose our vessels if our lenders foreclose their liens, which could impair our ability to conduct our business. Thus, there is a substantial doubt about the ability of the Company to continue as a going concern and about the recoverability of recorded assets.
The unaudited condensed consolidated financial statements have been prepared assuming that the Company will continue as a going concern. Accordingly, the unaudited condensed consolidated financial statements do not include any adjustments relating to the recoverability and classification of recorded assets amounts, the amounts and classification of liabilities, or any other adjustments that might result in the event the Company is unable to continue as a going concern.
2.
|
SIGNIFICANT ACCOUNTING POLICIES
|
|
a)
|
Basis of presentation and principles of consolidation
|
The unaudited condensed consolidated financial statements have been prepared in accordance with accounting principles generally accepted in the United States of America ("US GAAP") for interim financial information. The consolidated balance sheet at December 31, 2015, has been derived from the audited financial statement at that date. The unaudited condensed consolidated financial statements do not include all of the information and footnotes required by US GAAP for complete financial statements. All adjustments which, in the opinion of the management of the Company, are considered necessary for a fair presentation of the results of operations for the periods shown are of a normal, recurring nature and have been reflected in the unaudited condensed consolidated financial statements. The results of operations for the periods presented are not necessarily indicative of the results expected for the full fiscal year or for any future period.
These unaudited condensed consolidated financial statements should be read in conjunction with the financial statements and related notes thereto included in the Company's Annual Report on Form 20-F for the year ended December 31, 2015.
The unaudited condensed consolidated financial statements include the accounts of the Company and its subsidiaries, both majority and wholly owned. Significant intercompany accounts and transactions have been eliminated in this consolidation. Investments in 50% or less owned affiliates, in which the Company exercises significant influence, are accounted for by the equity method. The Company uses the US dollar as its functional currency. Receivables and payables denominated in foreign currencies are translated into US dollars at the rate of exchange at the balance sheet date, while revenues and expenses are translated using the average exchange rate for each month. Certain subsidiaries enter into transactions denominated in currencies other than their functional currency. Changes in currency exchange rates between the functional currency and the currency in which a transaction is denominated are included in the unaudited condensed consolidated statement of operations in the period in which the currency exchange rate changes.
Basic loss per share is computed by dividing the net loss by the weighted average number of common shares outstanding during the relevant periods net of shares held in treasury. Diluted loss per share reflects the potential dilution that could occur if securities or other contracts to issue common shares result in the issuance of such shares. In determining dilutive shares for this purpose the Company assumes, through the application of the treasury stock method, all restricted stock grants have vested and all common shares have been issued pursuant to the exercise of all outstanding stock options.
For the three-month periods ended March 31, 2016 and 2015, the Company had a net loss and therefore the effect of potentially dilutive securities was antidilutive.
ULTRAPETROL (BAHAMAS) LIMITED AND SUBSIDIARIES
The following outstanding equity awards are not included in the diluted loss per share calculation because they would have had an antidilutive effect:
|
|
For the three month periods
ended March 31, (unaudited)
|
|
|
|
2016
|
|
|
2015
|
|
|
|
|
|
|
|
|
Stock options
|
|
|
2,473,000
|
|
|
|
2,473,000
|
|
Restricted stock
|
|
|
-
|
|
|
|
19,000
|
|
Total
|
|
|
2,473,000
|
|
|
|
2,492,000
|
|
The following table sets forth the computation of basic and diluted net loss per share:
|
|
For the three month periods
ended March 31, (unaudited)
|
|
|
|
2016
|
|
|
2015
|
|
|
|
|
|
|
|
|
Net loss
|
|
$
|
(17,100
|
)
|
|
$
|
(5,107
|
)
|
Basic and diluted weighted average number of shares
|
|
|
140,729,487
|
|
|
|
140,710,112
|
|
Basic and diluted net loss per share
|
|
$
|
(0.12
|
)
|
|
$
|
(0.04
|
)
|
The components of accumulated other comprehensive loss in the condensed consolidated balance sheets were as follows:
|
|
At March
31, 2016
(unaudited)
|
|
|
At December
31, 2015
|
|
|
|
|
|
|
|
|
Unrealized net losses on interest rate collar
|
|
$
|
(97
|
)
|
|
$
|
(212
|
)
|
Unrealized net losses on interest rate swaps
|
|
|
(814
|
)
|
|
|
(747
|
)
|
Unrealized net gains on EURO hedge
|
|
|
108
|
|
|
|
110
|
|
Accumulated other comprehensive loss
|
|
$
|
(803
|
)
|
|
$
|
(849
|
)
|
|
d)
|
New accounting standards
|
Revenue recognition
On May 28, 2014 the Financial Accounting Standards Board (FASB) issued a comprehensive new revenue recognition standard that will supersede nearly all existing revenue recognition guidance under generally accepted accounting principles in the United States. The core principal of the new standard is that a company will recognize revenue when it transfers promised goods or services to customers in an amount that reflects the consideration to which the company expects to be entitled in exchange for those goods or services. The new standard is effective for annual and interim periods beginning after December 15, 2017 and entities will be permitted to adopt the standard as early as the original public entity effective date (i.e. annual reporting periods beginning after December 15, 2016 and interim periods therein). Early adoption prior to that date is not permitted. The Company has not yet determined what impact, if any, the adoption of the new standard will have on its consolidated financial position, results of operations or cash flows.
Going concern
In August 2014, the FASB issued ASU No. 2014-15 -Presentation of Financial Statements- Going Concern. ASU 2014-15 provides guidance about management's responsibility to evaluate whether there is substantial doubt about an entity's ability to continue as a going concern and to provide related footnote disclosures.
ASU 2014-15 requires an entity's management to evaluate at each reporting period based on the relevant conditions and events that are known at the date of financial statements are issued, whether there are conditions or events, that raise substantial doubt about the entity's ability to continue as a going concern within one year after the date that the financial statements are issued and to disclose the necessary information. ASU 2014-15 is effective for the annual period ending after December 15, 2016, and for annual periods and interim periods thereafter. Early application is permitted.
ULTRAPETROL (BAHAMAS) LIMITED AND SUBSIDIARIES
Debt issuance costs
On April 7, 2015, the FASB issued the final guidance (ASU 2015-03) to simplify the presentation of debt issuance costs by requiring debt issuance costs related to a recognized debt liability to be presented in the balance sheet as a direct deduction from the debt liability rather than as an asset. The recognition and measurement guidance for debt issuance costs have not changed. The new standard requires retrospective application and represents a change in accounting principle. The final guidance is effective for annual and interim periods beginning after December 15, 2015 and early adoption is permitted. The Company adopted the guidance in retrospective manner in this quarter. Thus, the Company classified the debt issuance costs as a direct deduction from the respective debt liability amounting $10,584 and $10,827 at March 31, 2016 and December 31, 2015, respectively, in the accompanying consolidated balance sheet.
Deferred tax assets and liabilities classification
On November 20, 2015, the FASB issued final guidance (ASU 2015-17) that requires companies to classify all deferred tax assets and liabilities as noncurrent on the balance sheet instead of separating deferred taxes into current and noncurrent amounts. In addition, companies will no longer allocate valuation allowances between current and noncurrent deferred tax assets because those allowances also will be classified as noncurrent. For public business entities, the guidance is effective for financial statements issued for annual periods beginning after 15 December 2016 (i.e., 2017 for a calendar-year company), and interim periods within those annual periods. Because early adoption is permitted, companies can start applying this guidance in interim and annual financial statements that have not yet been issued.
The guidance may be adopted on either a prospective or retrospective basis. The Company decided to early adopt the guidance in a prospective basis, modifying the classification of the deferred tax assets and liabilities as from December 31, 2015.
Leasing
On February 25, 2016, the FASB issued a comprehensive new leasing standard, which improves transparency and comparability among companies by requiring lessees to recognize a lease liability and a corresponding lease asset for virtually all lease contracts. It also requires additional disclosures about leasing arrangements. The new standard is effective for interim and annual periods beginning after December 15, 2018 and requires a modified retrospective approach to adoption. Early adoption is permitted. The Company has not yet determined what impact, if any, the adoption of the new standard will have on its consolidated financial position, results of operations or cash flows.
3.
|
VESSELS AND EQUIPMENT, NET
|
The capitalized cost of the vessels and equipment, and the related accumulated depreciation at March 31, 2016 and December 31, 2015 were as follows:
|
|
At March
31, 2016
(unaudited)
|
|
|
At December
31, 2015
|
|
|
|
|
|
|
|
|
Ocean-going vessels
|
|
$
|
40,970
|
|
|
$
|
51,060
|
|
River barges and pushboats
|
|
|
493,615
|
|
|
|
496,585
|
|
PSVs
|
|
|
376,109
|
|
|
|
375,059
|
|
Furniture and equipment
|
|
|
14,718
|
|
|
|
14,500
|
|
Building, land, operating base and shipyard
|
|
|
55,007
|
|
|
|
54,978
|
|
Total original book value
|
|
|
980,419
|
|
|
|
992,182
|
|
Accumulated depreciation
|
|
|
(323,121
|
)
|
|
|
(323,095
|
)
|
Net book value
|
|
$
|
657,298
|
|
|
$
|
669,087
|
|
For the three-month periods ended March 31, 2016 and 2015, depreciation expense was $9,889 and $10,504, respectively.
As of March 31, 2016, the net book value of the assets pledged as a guarantee of our long term financial debt was $476,000.
Ocean Business
During January 2016 we entered into a MOA for which we sold our product tanker Alejandrina for a total sale price of $4,900 (the net value after commissions and direct costs of sale was $4,535). This vessel was subsequently delivered to buyers on March 7, 2016.
ULTRAPETROL (BAHAMAS) LIMITED AND SUBSIDIARIES
4.
|
LONG-TERM FINANCIAL DEBT
|
Balances of long-term financial debt at March 31, 2016 and December 31, 2015:
|
|
|
|
At March 31, 2016
(unaudited)
|
|
|
At December 31, 2015
|
|
Financial institution /
|
|
|
Nominal value
|
|
|
|
|
|
|
|
Borrower
|
Other
|
Due-year
|
|
Current
(2)
|
|
|
Noncurrent
|
|
|
Total
|
|
|
Total
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Ultrapetrol
|
Private Investors
|
June 2021
|
|
$
|
225,810
|
|
|
$
|
-
|
|
|
$
|
225,810
|
(1)
|
|
$
|
225,842
|
(1)
|
UP Offshore Apoio
|
DVB SE
|
Through 2016
|
|
|
4,150
|
|
|
|
-
|
|
|
|
4,150
|
|
|
|
4,150
|
|
UP Offshore
|
DVB SE
|
Through 2016
|
|
|
21,050
|
|
|
|
-
|
|
|
|
21,050
|
|
|
|
21,050
|
|
UP Offshore
|
DVB SE
|
Through 2017
|
|
|
7,000
|
|
|
|
-
|
|
|
|
7,000
|
|
|
|
7,000
|
|
UP Offshore Apoio
|
BNDES
|
Through 2027
|
|
|
12,210
|
|
|
|
-
|
|
|
|
12,210
|
|
|
|
12,488
|
|
UP Offshore
|
DVB SE + Banco Security
|
Through 2018
|
|
|
24,166
|
|
|
|
-
|
|
|
|
24,166
|
|
|
|
24,166
|
|
Ingatestone Holdings
|
DVB NV + NIBC + ABN Amro
|
Through 2017
|
|
|
41,943
|
|
|
|
-
|
|
|
|
41,944
|
|
|
|
44,457
|
|
Linford Trading
|
DVB NV + NIBC
|
Through 2020
|
|
|
26,862
|
|
|
|
-
|
|
|
|
26,861
|
|
|
|
28,661
|
|
Stanyan Shipping
|
Natixis
|
Through 2017
|
|
|
-
|
|
|
|
-
|
|
|
|
-
|
|
|
|
3,146
|
|
Up Offshore
|
DVB SE
|
Through 2016
|
|
|
27,500
|
|
|
|
-
|
|
|
|
27,500
|
|
|
|
27,500
|
|
UABL Paraguay
|
IFC
|
Through 2020
|
|
|
16,304
|
|
|
|
-
|
|
|
|
16,304
|
|
|
|
16,304
|
|
UABL Paraguay
|
OFID
|
Through 2020
|
|
|
9,782
|
|
|
|
-
|
|
|
|
9,782
|
|
|
|
9,782
|
|
UABL Barges and others
|
IFC
|
Through 2020
|
|
|
22,826
|
|
|
|
-
|
|
|
|
22,826
|
|
|
|
22,826
|
|
UABL Paraguay and Riverpar
|
IFC
|
Through 2021
|
|
|
9,706
|
|
|
|
-
|
|
|
|
9,706
|
|
|
|
9,706
|
|
UABL Paraguay and Riverpar
|
OFID
|
Through 2021
|
|
|
6,470
|
|
|
|
-
|
|
|
|
6,470
|
|
|
|
6,470
|
|
At March 31, 2016
|
|
|
|
$
|
455,779
|
|
|
$
|
-
|
|
|
$
|
455,779
|
|
|
|
|
|
At December 31, 2015
|
|
|
|
$
|
463,548
|
|
|
$
|
-
|
|
|
|
|
|
|
$
|
463,548
|
|
|
(1)
|
Includes unamortized debt premium of $810 and $842, respectively as of March 31, 2016 and December 31, 2015.
|
|
(2)
|
Includes $371,155 of long-term financial debt classified as current, as explained in Note 1.
|
The agreements governing the debts contain customary events of default and cross-default provisions. If an event of default occurs and it is continuing, the lenders may require that the entire debt be immediately repaid in full. As mentioned in Note 1 and below, due to the event of default and of the cross-default provisions contained in relevant debt agreements, the Company has classified the respective long-term financial debt amounting to $371,155 at March 31, 2016, as current liabilities.
Also, as of December 31, 2015, the Company failed to meet some financial covenants. As discussed above, the lenders have agreed for the duration of the forbearance agreements not to take any enforcement actions given these failures. Non-compliance with financial covenants as of March 31, 2016, is waived pursuant to the forbearance agreements signed with our creditors.
As of March 31, 2016 and December 31, 2015, $7,943 and $12,251, respectively, of restricted cash was maintained in accordance with certain covenants of our debt agreements, and these amounts were included within restricted cash in the accompanying consolidated balance sheets.
During the three month period ended March 31, 2016, the Company recorded a loss of $7,611 related to debt renegotiation costs incurred within financial expense.
8.875% First Preferred Ship Mortgage Notes due 2021 (the "2021 Senior Notes")
On June 10, 2013, the Company completed the Offering of $200,000 of 2021 Senior Notes, through a private placement to institutional investors eligible for resale under Rule 144A and Regulation S. The net proceeds of the offering were used to repay in full on July 10, 2013, the 2014 Senior Notes or $180,000, and for general corporate purpose.
On October 2, 2013, we closed the sale of $25,000 in aggregate principal amount of our 2021 Senior Notes (the "Add-On Notes"), which were offered as an add-on to our outstanding $200,000 aggregate principal amount of our 2021 Senior Notes. As a result of the offering of the Add-On Notes, we have outstanding an aggregate principal amount of $225,000 of our 2021 Senior Notes. The Add-On Notes were sold at 104.5% and the net proceeds were used for general corporate purposes.
Interest on the 2021 Senior Notes is payable semi-annually on June 15 and December 15 of each year. The 2021 Senior Notes are senior obligations guaranteed by certain of the Company's subsidiaries in the River and Ocean Business. The 2021 Senior Notes were initially secured by first preferred ship mortgages on four ocean vessels, 15 river pushboats and 345 river barges.
The Company has the option to redeem the 2021 Senior Notes in whole or in part, at their option, at any time (i) before June 15, 2016, at a redemption price equal to 100% of the principal amount plus the applicable make-whole premium plus accrued and unpaid interest, if any, to the redemption date and (ii) on or after June 15, 2016, at a fixed price of 106.656%, which price declines ratably until it reaches par after June 15, 2019. At any time before June 15, 2016, the Company may redeem up to 35% of the aggregate principal amount of the 2021 Senior Notes with the proceeds of one or more equity offerings at 108.875% of the principal amount of the 2021 Senior Notes, plus accrued and unpaid interest, if any, to the redemption date so long as at least 65% of the originally issued aggregate principal amount of the 2021 Senior Notes remains outstanding after such redemption. In addition, upon the occurrence of certain change of control events, the holders of the 2021 Senior Notes will have the right to require the Company to repurchase some or all of the 2021 Senior Notes in cash at 101% of their principal amount, plus accrued and unpaid interest to the repurchase date.
ULTRAPETROL (BAHAMAS) LIMITED AND SUBSIDIARIES
In the fourth quarter of 2013 the SEC declared effective an exchange offer filed by the Company to register substantially identical senior notes to be exchanged for the 2021 Senior Notes that were issued in a private placement on June 10, 2013 pursuant to a registration rights agreement, to allow the 2021 Senior Notes be eligible for trading in the public markets. On December 30, 2013 the Company completed the exchange offer, with an aggregate amount of $200,000 in principal amount of the 2021 Senior Notes or 100% of the 2021 Senior Notes exchangeable.
In the fourth quarter of 2013 the SEC declared effective an exchange offer filed by the Company to register substantially identical senior notes to be exchanged for the 2021 Senior Notes that were issued in a private placement on October 2, 2013 pursuant to a registration rights agreement, to allow the 2021 Senior Notes be eligible for trading in the public markets. On January 24, 2014 the Company completed the exchange offer, with an aggregate amount of $25,000 in principal amount of the 2021 Senior Notes or 100% of the 2021 Senior Notes exchangeable.
The indenture includes affirmative covenants, including the reporting of financial results and other developments. The indenture also contains negative covenants related to our ability and, in certain instances, the ability of certain of our subsidiaries to, (i) pay dividends or make distributions on the Company's capital stock or repurchase the Company's capital stock; (ii) make restricted payments; (iii) create certain liens to secure indebtedness; (iv) enter into sale and leaseback transactions; (v) engage in transactions with affiliates; (vi) merge or consolidate with certain companies and (vii) transfer and sell assets.
The indenture provides for customary events of default, including but not limited to, (i) nonpayment; (ii) breach of covenants in the indenture; (iii) payment defaults or acceleration of other indebtedness; (iv) a failure to pay certain judgments and (v) certain events of bankruptcy, insolvency and reorganization. If certain events of default occur and are continuing, the trustee or the holders of at least 25% in aggregate of the principal amount of the 2021 Senior Notes outstanding may declare all of the notes to be due and payable immediately, together with accrued interest, if any. As of December 31, 2015, we were in compliance with all covenants under the indenture.
Although Ultrapetrol (Bahamas) Limited, the parent company, is the issuer of the 2021 Senior Notes, principal and related expenses will be paid through funds obtained from the operations of the Company's subsidiaries.
On December 15, 2015, Ultrapetrol announced that the Company decided not to make the $10 million interest payment due December 15, 2015 as negotiations to obtain debt maturity extensions and/or to restructure the financial debt were continuing with representatives of holders of the 2021 Senior Notes and with the Company's other secured lenders. Ultrapetrol had a thirty day grace period under its Senior Notes indentures to make the missed interest payment before it triggers an event of default.
On January 29, 2016, the Company announced that, as a result of its negotiations with advisors representing a majority of holders of the 2021 Senior Notes, the Company reached a forbearance agreement through March 31, 2016 by paying a forbearance fee of $2,000. On February 11, 2016, the Company announced that had received the consent of holders of $223,348 aggregate principal amount of the Notes, representing approximately 99.27% percent of the 2021 Senior Notes outstanding.
On April 5, 2016, the Company announced that it reached an agreement with its secured lenders to extend its existing forbearance agreements through April 30, 2016.
On May 10, 2016, the Company announced that it reached an agreement with its secured lenders to extend its existing forbearance agreements through May 31, 2016.
The secured lenders have agreed, for the duration of the forbearance agreements, not to accelerate their loans, take any enforcement actions or exercise any remedies with respect to defaults resulting from the non-payment by the Company of its interest payment under the 2021 Notes and to work with the Company in negotiating a sustainable financial structure.
The forbearance agreement also provided for the appointment of two new independent directors, as well as to the formation of a special committee that, among other things, to explore options and make recommendations to the Company's board of directors in connection with the restructuring of the Company, including a process to market and sell the River Business and the Offshore Supply Business.
ULTRAPETROL (BAHAMAS) LIMITED AND SUBSIDIARIES
Senior secured post-delivery term loan facility with DVB Bank America NV (DVB Bank America), NIBC Bank NV (NIBC) and ABN Amro Capital USA LLC (ABN Amro) of up to $84,000
On January 18, 2013 Ingatestone Holdings Inc., as Borrower, and UP Offshore (Bahamas) Ltd., Bayshore Shipping Inc., Gracebay Shipping Inc., Springwater Shipping Inc. and Woodrow Shipping Inc. (all of these our subsidiaries in the Offshore Supply Business) and Ultrapetrol (Bahamas) Limited, as joint and several Guarantors, entered into a senior secured post-delivery term loan facility of up to $84,000 with DVB Bank America, NIBC and ABN Amro (the "Lenders") with the purpose of refinancing the advances made for our PSVs UP Jade, UP Amber, UP Pearl and UP Onyx of the DVB SE and Natixis and DVB SE and NIBC long-term facilities.
The loan facility is divided into four tranches, each in the aggregate amount of up to the lesser of $21,000 and 60% of the fair market value of the PSV to which such tranche relates.
The tranche of the loan facility in respect of the refinancing of the PSV UP Jade was drawn down in the amount of $20,850 on January 24, 2013 and shall be repaid by (i) 20 equal consecutive quarterly installments of $521 beginning in January 2013 and (ii) a balloon payment of $10,425 concurrent with the last quarterly repayment in October 2017.
The tranche of the loan facility in respect of the refinancing of the PSV UP Amber was drawn down in the amount of $5,000 and $15,550, respectively on March 28, 2013 and June 28, 2013 and shall be repaid by (i) an instalment of $139 in June 2013, (ii) 17 equal consecutive quarterly installments of $516 beginning in September 2013 and (iii) a balloon payment of $10,275 concurrent with the last quarterly repayment in September 2017.
The tranche of the loan facility in respect of the refinancing of the PSV UP Pearl was drawn down in the amount of $20,550 on October 11, 2013 and shall be repaid by (i) 16 equal consecutive quarterly installments of $642 beginning in January 2014 and (ii) a balloon payment of $10,275 concurrent with the last quarterly repayment in September 2017.
Following the cancelation of the shipbuilding contract in respect of PSV UP Onyx the Company canceled part of the total commitment in an amount of up to $21,000.
Each tranche accrues interest at LIBOR (base rate) plus a margin of 4.0 per annum.
The Lenders, at their discretion, may replace LIBOR as base rate for the interest calculation with their cost-of-funds rate.
On March 26, 2015, lenders waived compliance with the consolidated debt service coverage ratio as of December 31, 2014 and March 31, 2015, which required Ultrapetrol (Bahamas) Ltd., as Guarantor, to have a consolidated debt service coverage ratio of not less than 1.5 for the last four fiscal quarters prior to the relevant date of calculation. In addition, lenders amended such clauses to require us to comply with a consolidated debt service coverage ratio of not less than 1.05 as of June 30, 2015, not less than 1.15 as of September 30, 2015, and not less than 1.30 at all times thereafter. In addition, lenders amended the average monthly balance of available cash requirement for the Guarantor to be not less than $20.0 million on a consolidated basis including (i) cash in demand deposit and time deposit accounts held in Ultrapetrol's name with a tenor of six months or less, and (ii) unused and available for drawing under revolving credit lines available to Ultrapetrol having expiration dates of six months or longer from the relevant date.
As of December 31, 2015, we were did not reach the minimum required forward looking consolidated debt service coverage ratio. However, compliance with this financial covenant is waived through May 31, 2016, as set forth in the forbearance agreement.
On January 14, 2016, we prepaid $ 2,513 outstanding under this senior secured loan.
Senior secured term loan facility with DVB Bank America and NIBC of up to $38,400
On December 20, 2013 Linford Trading Inc. (our wholly owned subsidiary in the Offshore Supply Business and the holding company of Leeward Shipping Inc. and Jura Shipping Inc.) as Borrower, Leeward Shipping Inc. and Jura Shipping Inc. (our wholly owned subsidiaries in the Offshore Supply Business and collectively the owners of our PSVs UP Agate and UP Coral) and UP Offshore (Bahamas) Ltd. and Ultrapetrol (Bahamas) Limited as Guarantors entered into a senior secured term loan facility of up to $38,400 with DVB Bank America and NIBC (the "Lenders") for the purposes of providing financing of our PSVs UP Agate and UP Coral.
ULTRAPETROL (BAHAMAS) LIMITED AND SUBSIDIARIES
A quarterly commitment fee is payable based on the average undrawn amount of the committed amount at a rate of 1.50%.
The loan facility is divided into two tranches, each in the aggregate amount of up to the lesser of $19,200 and 60% of the fair market value of the PSV to which such tranche relates.
Each tranche of the loan facility shall be divided into two advances which shall be made available to the Borrower as follows:
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The first advance of each such tranche shall be made available to the Borrower in the amount of up to $16,000, which was drawn down on December 30, 2013, and shall be repaid by (i) 28 quarterly installments of $400 per tranche beginning in March 2014 and (ii) a balloon repayment of $4,800 in November 2020.
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The second advance of each such tranche shall be made available to the Borrower in the amount of up to $3,200 not later than January 31, 2015, provided that the UP Agate and UP Coral have obtained employment of not less than 3 years with a charterer on terms and conditions acceptable to the Lenders.
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In January and in July 2015, the Borrower, the Lenders and the Guarantors signed amendments of the loan agreement. In connection with those amendments the availability period was extended through June 30 and September 30, 2015, respectively, in relation to the second advance of each tranche of the financing of our PSV UP Agate and UP Coral.
On September 17, 2015, we drew down $3,200 corresponding to the second advance for our UP Coral. This advance shall be repaid by (i) 12 quarterly installments of $138 per tranche beginning in December 2015, (ii) 9 quarterly installments of $55 per tranche beginning in December 2018 and (iii) a balloon repayment of $1,045 in December 2020.
Each tranche accrues interest at LIBOR (base rate) plus a margin of 4.0% per annum and the Lenders, at their discretion, may replace LIBOR as base rate for the interest calculation with their cost-of-funds rate. The margin in respect of a tranche of the loan facility may be reduced to 3.25% per annum upon delivered to and acceptance by a time charter of the PSV to such tranche relates pursuant to a time charter on terms and conditions acceptable to the Lenders.
The above loans in our Offshore Supply Business are secured by a first priority mortgage over our PSVs, corporate guarantee and a first priority assignment of the earnings, insurances and requisition compensation or other employment contracts exceeding 12 months. The loans contain customary covenants that limit among other things, without the prior written consent of the majority lenders, the ability of our subsidiaries in the Offshore Supply Business to incur additional indebtedness, sell assets, repay indebtedness, amend the terms of subordinated debt, merge or consolidate, change lines of business, change the flag, class or management of the PSVs mortgaged under such facility, create or permit to exist liens on their assets, make loans, make investments or capital expenditures and undergo a change in ownership or control. In addition, some of the PSVs owning companies are permitted to pay dividends, make distributions and effect redemptions or returns of share capital up to 50% of their net income and under certain circumstances, without the prior written consent of the majority lenders. Also, the loans contain certain financial covenants relating to Ultrapetrol and our subsidiaries in the Offshore Supply Business related with their financial position, operating performance and liquidity, including maintaining minimum amounts of net assets.
Ultrapetrol shall comply with certain financial covenants including: (i) an average monthly balance of available cash in a demand deposit of not less than $20,000 on a consolidated basis, (ii) an equity ratio of not less than 20%, (iii) a consolidated tangible net worth of not less than $150,000 and, (iv) a ratio of consolidated debt service coverage ratio of not less than 150% (on a historical and forward four quarter rolling basis, tested as of the last date of each fiscal quarter).
At December 31, 2014, Ultrapetrol (as Guarantor) was in compliance with these covenants except for (iv). Consequently, on March 26 and March 31, 2015,
DVB SE, DVB Bank America, NIBC and ABN Amro
,
as Lenders, waived the compliance to meet the financial covenant described in (iv) as of December 31, 2014 and March 31, 2015.
On March 26 and March 31, 2015, the Borrowers, the Lenders and the Guarantors signed amendments to the loans agreements to relaxing certain financial covenants. In connection with these amendments Ultrapetrol shall maintain (i) a ratio of consolidated debt service coverage ratio of not less than 105% as of June 30, 2015, of not less than 115% as of September 30, 2015 and of not less than 130% thereafter (each on a historical and forward four quarter rolling basis, tested as of the last date of each fiscal quarter, excluding balloon payments and prepayments), and (ii) with effect from January 1, 2015, an average monthly balance of available cash of not less than $20,000 on a consolidated basis in (x) demand deposit and time deposit and (xx) unused and available for drawing revolving credit lines available to Ultrapetrol having expiration dates of six months or longer from the relevant date.
ULTRAPETROL (BAHAMAS) LIMITED AND SUBSIDIARIES
UP Offshore (Bahamas) Ltd. shall comply with certain financial covenants including: (i) an average balance of available cash in a demand deposit of not less than $5,000, (ii) an equity ratio of not less than 30%, (iii) a minimum equity of $75,000 and, (iv) a ratio of consolidated EBITDA to consolidated debt service of at least 1.5 (on a rolling four quarter basis, tested as of the last day of each fiscal quarter).
As of December 31, 2015, we were did not reach the minimum required forward looking debt service coverage ratio for Linford Trading Inc. and on a consolidated basis for Ultrapetrol. However, compliance with these financial covenants is waived through May 31, 2016, as set forth in the forbearance agreement.
On January 12, 2016, we prepaid $ 1,800 outstanding under this senior secured loan.
Senior secured term loan with Natixis of up to $13,616
On January 29, 2007 Stanyan Shipping Inc. (a wholly owned subsidiary in the Ocean Business and the owner of the Alejandrina) drew down an amount of $13,616 under a loan agreement with Natixis (the "Lender") to provide post-delivery financing secured by the vessel. The loan, which matures in February 2017, shall be repaid by equal quarterly installments of $227 with a balloon installment of $2,687 which due in February 2017. The loan accrues interest at 6.38% per annum for the first five years of the loan and LIBOR plus 1.20% per annum thereafter.
On May 21, 2012, we prepaid $1,849 outstanding under this senior secured loan.
During January 2016 we entered into a MOA for which we sold our product tanker Alejandrina for a total sale price of $4,900. We fully repaid the outstanding balance at the date of the settlement amounting $2,921 with the proceeds from such sale.
5.
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COMMITMENTS AND CONTINGENCIES
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The Company is subject to legal proceedings, claims and contingencies arising in the ordinary course of business. When such amounts can be estimated and the contingency is probable, management accrues the corresponding liability. While the ultimate outcome of lawsuits or other proceedings against the Company cannot be predicted with certainty, management does not believe the costs of such actions will have a material effect on the Company´s consolidated financial position or results of operations.
UABL – Ciudad del Este Customs Authority
On September 21, 2005, the local Customs Authority of Ciudad del Este, Paraguay issued a finding concerning certain UABL entities referred to three mattersin respect of certain operations of our River Business for the prior three-year period: (i) that UABL owed taxes to that authority in the amount of $2,200, (ii) a fine for non-payment of the taxes in the same amount, and (iii) that the tax base used by UABL entities to calculate the applicable withholding tax that UABL had used to calculate taxes paid in said period. The first two issues were disregarded by the Tax and Administrative Court on November 24, 2006. Nevertheless, the third issue continued. On September 22, 2010, the Paraguayan Supreme Court revoked the March 26, 2009 ruling of the Tax and Administrative Court -which had decided we were not liable- and confirmed the decision of the Paraguayan undersecretary for taxation which condemned UABL Paraguay S.A. to pay approximately $600 non-withheld taxes, $700 in fines and $1,300 in accrued due interests. This matter was settled in a signed agreement with the Tax Authorities on October 14, 2010, and UABL paid the total amount of $1,294 in full and final settlement of the claim and agreed to drop the appeal we had filed against to the Supreme Court. However, in parallel with this ruling the Office of the Treasury Attorney initiated an action in respect of the first two issues concerned in this litigation which had been terminated on November 24, 2006 to review certain formal aspects over which a decision of the Court is still pending. Aside from the mentioned procedures, the Customs Authorities of Paraguay have reopened the proceedings against UABL S.A., UABL Paraguay S.A. and Yataity S.A. in connection with the possible reopening of the case pending a decision of the reopening of the case in court, which is currently on hold awaiting for the Court's resolution. We have been advised by UABL's counsel in the case that there is only a remote possibility that the Paraguayan Courts would find UABL liable for any of these taxes or fines or legal costs still in dispute or that the final outcome of these proceedings will have a material adverse financial impact on the consolidated financial position or result of operations of the Company.
ULTRAPETROL (BAHAMAS) LIMITED AND SUBSIDIARIES
UABL Paraguay S.A. - Paraguayan Customs Asunción
These administrative proceedings were commenced on April 7, 2009, by the Paraguayan Customs in Asuncion against UABL Paraguay S.A. alleging infringement of Customs regulations due to lack of submission of import clearance documents in Paraguay for bunkers purchased between January 9, 2007 and December 23, 2008, from YPF S.A. in Argentina, and between years 2003 and 2006. The total amount owed taxes according to Customs in Asuncion is up to Gs. 12.056.635.704 (approximately $2.1 million), that is to say twice the value of the purchased bunkers (Gs. 6.028.317.852). The claim was rejected by the competent Court. This ruling was appealed and applied for annulment and is now in procedure at the Supreme Court of Justice of Paraguay pending resolution. As of March 31, 2016 a loss contingency liability related with this matter of $1.1 million was recorded.
Oceanpar S.A. and UABL Paraguay S.A. - Customs investigation in connection with reimportation of barges subject to conversion
Oceanpar S.A. was notified of this investigation on June 17, 2011. The matter under investigation is whether UABL Paraguay S.A. paid all import taxes and duties corresponding to the re-importation of barges submitted to conversion in foreign yards. Customs imposed a fine of Gs. 2.791.514.822 and judicial proceedings have been commenced where a final decision from the Supreme Court of Justice of Paraguay is still pending. As of March 31, 2016 a loss contingency liability related with this matter of $0.5 was recorded.
UABL Paraguay S.A. - Paraguayan Tax Authority
These are administrative proceedings commenced by the Paraguayan Tax Authorities on December 15, 2011 against UABL Paraguay S.A. due to an alleged improper use of some fiscal credit. The aforementioned tax authorities suggested some rectifications to be madeand also informed that UABL Paraguay S.A. may owe taxes due to differences in the rate applied to certain fiscal remittance incomes related to the operation of some barges under leasing. The potential amount in dispute has not been calculated yet but it should not exceed approximately $3,000. Our local counsel has advised that there is only a remote chance that these proceedings, when ultimately resolved by a judicial court, will have a material adverse impact on the consolidated financial position or result of operations of the Company.
UABL Paraguay S.A., Yataity S.A. and UABL S.A. – Alleged Tax Evasion
These proceedings were commenced by the National Customs Authority of Paraguay on a supposed Income Tax evasion regarding some freight services rendered by UABL S.A., UABL Paraguay S.A. and Yataity S.A. from Tres Fronteras Terminal and other ports in Paraguay during 2000 and 2005.Those three entities were charged by said administrative authority for owing the alleged non-paid taxes plus same amount in fines. The total amount was, after some discussions, finally determined by the Customs National Authority in approximately $0.3 million plus a fine in the same amount. This resolution has been judicially argued by UABL entities and is now pending resolution by the Supreme Court of Justice of Paraguay. Our local counsel is of the opinion that, due to the court's state-favored conservative criteria, there are fifty percent chances that these proceedings will have an adverse financial impact on the consolidated financial position or result of operations of the Company.
UP Offshore Apoio Marítimo Ltda.- Rio de Janeiro State Treasury Office - UP Pearl Tax assessment
On May 9, 2014, the Rio de Janeiro State Treasury Office commenced administrative proceedings against UP Offshore Apoio Marítimo Ltda. alleging infringement of tax regulations due to lack of payment of ICMS tax related to the temporary import of the vessel "UP PEARL". The said authorities determined the corresponding assessment in the amount of R$ 768,096 (approximately $214), plus interest. A decision is now pending over the non-application of the tax to the vessel's import.
Our local counsel has advised that there is a remote chance that these proceedings, when ultimately resolved by a judicial court, will have an adverse impact on the consolidated financial position or result of operations of the Company.
ULTRAPETROL (BAHAMAS) LIMITED AND SUBSIDIARIES
Ultrapetrol S.A. – Argentine Secretary of Industry and Argentine Customs Office
On June 24, 2009, Ultrapetrol S.A. (UPSA) requested to the Argentine Secretary of Industry, an authorization to re-export some unused steel plates that had been temporarily imported for industrialized conversion by means of vessels repairs that were not finally industrialized due to cancellations of the repairs that some shipping companies had ordered. The total weight of those steel plates was 473 tons and their import value was approximately $400. In the event that steel plates cannot be exported, payable import duties and Customs' charges would amount to approximately $900, however in case of payment UPSA would have offsetting-tax credits amounting to approximately $300. We have been advised by local counsel that there is a positive prospect of obtaining the requested authorization for re-exporting the steel plates and we do not expect the resolution of these administrative proceedings to have a material adverse impact on the consolidated financial position or result of operations of the Company.
On May 05, 2015, UPSA took notice of administrative proceedings commenced by Argentine Customs Authorities on November 04, 2014, due to an alleged infringement of Customs regulations on temporary import regime. The Customs' fine applicable in such a case could vary between $0.08 million and $2.5 million, with an additional amount of $0.08 million regarding additional VAT and income taxes, and the charges for import duties could reach $0.5 million. The chances of success will depend on the outcome of the proceedings before the Argentine Secretary of Industry, but even if UPSA is found liable, the fine will probably be imposed around the minimum amount.
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d)
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Favorable arbitration award
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On January 20, 2015, the counterparty to an arbitration initiated by one of our subsidiaries in January 2013 related to the non-performance of a barge sole contract has decided not to appeal the arbitration award issued on December 23, 2014, in favor of our subsidiary in which $1,919 were awarded on account of damages plus interests and costs.
On December 15, 2015, the Company entered into a final agreement with the former customer for a final amount of $2,294, which was collected $600 during the year ended December 31, 2015 and the balance in monthly installments of $200, beginning in January 2016. Thus, The Company recorded a gain of $2,294 in 2015 related to the claim.
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e)
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Other claims and arbitrations
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Touax Hydrovia Corp. v Corporación de Navegación Mundial S.A.
This case involves cross-claims under a long-term bareboat charter on 24 barges, dated April 25, 2012, between Touax Hydrovia Corp. ("Touax"), as Owner, Corporación de Navegación Mundial S.A. ("Cornamusa"), as Charterer, and Ultrapetrol (Bahamas) Limited, as guarantor. Touax had the obligation to register the barges in a jurisdiction which would permit Cornamusa, through a Paraguayan subsidiary, to operate the barges on the Parana-Paraguay River System. Due to a change in Paraguayan legislation, Touax was no longer able to register the last 7 barges under its flag after the expiration of their provisional certificates and remain without any register. Therefore, these barges have been out of service and put off-hire by Cornamusa. Touax's commenced an arbitration claim in New York against Cornamusa related to the payment of hire (roughly $1.3 million at the present) which was suspended on December 2014. Likewise, as Cornamusa considers Touax to be in breach of the provision which obligated Touax to ensure that its registration of the barges would not impede Cornamusa's ability to trade them on the River system, it has therefore submitted a counterclaim in New York arbitration against Touax for breach. This counterclaim involves losses for insurance during the period of layup (following expiration of the provisional certificates) and transportation/mooring costs. Additionally, Touax executives admitted that they had recently abandoned their efforts to resolve the flagging issue. Consequently, Cornamusa terminated the contract with respect to the 7 barges in dispute. Touax may increase its claim, but that has not yet occurred. In addition, the application for $6.0 million security filed by Touax and opposed by Cornamusa and Ultrapetrol has been recently denied for the time being.
Our local counsel indicated that Cornamusa has the better arguments supported by the contract terms and has classified the outcome of this contingency as uncertain.
ULTRAPETROL (BAHAMAS) LIMITED AND SUBSIDIARIES
Trafigura Beheer BV (and related companies) vs. Ultrapetrol S.A.
Claims have been made against Ultrapetrol S.A. by companies in the Trafigura Group under a series of contracts made in 2011-13 for construction of river barges. The claims are for alleged defects in the construction of the barges, which are (with some minor exceptions) denied by Ultrapetrol S.A.
Solicitors representing Trafigura have commenced arbitration proceedings against Ultrapetrol S.A. and arbitrators were appointed in September/October 2015. Claim submissions were served on February 2, 2016. The total claims amount to approximately $15.5 million, excluding interests and costs. The opinion of our local counsel is reasonably optimistic that Ultrapetrol S.A. will not have a material adverse financial impact on the consolidated financial position or result of operations of the Company.
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Various other legal proceedings involving us may arise from time to time in the ordinary course of business. However, we are not presently involved in any other legal proceedings that are reasonably possible to have a material adverse effect on us.
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The fair value of an asset or liability is the price that would be received to sell an asset or transfer a liability (an exit price) in the principal or most advantageous market for the asset or liability in an orderly transaction between market participants on the measurement date. The Company utilizes a fair value hierarchy that maximizes the use of observable inputs and minimizes the use of unobservable inputs when measuring fair value and defines three levels of inputs that may be used to measure fair value. Level 1 inputs are quoted prices in active markets for identical assets or liabilities. Level 2 inputs are observable inputs other than quoted prices included in Level 1 that are observable for the asset or liability, either directly or indirectly, including quoted prices for similar assets or liabilities in active markets, quoted prices in markets that are not active, inputs other than quoted prices that are observable for the asset or liability, or inputs derived from observable market data. Level 3 inputs are unobservable inputs that are supported by little or no market activity and are significant to the fair value of the assets or liabilities.
The Company's liabilities as of March 31, 2016 that are measured at fair value on a recurring basis are summarized below:
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Level 1
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Level 2
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Level 3
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Current liabilities:
-
Interest rate collar (included in other liabilities)
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$
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-
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$
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236
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$
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-
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-
Interest rate swaps (included in other liabilities)
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-
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453
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-
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The estimated fair value of the Company's other financial assets and liabilities as of March 31, 2016 were as follows:
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Carrying
amount (unaudited)
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Estimated
fair value (unaudited)
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ASSETS
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Cash and cash equivalents
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$
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35,430
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$
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35,430
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Restricted cash (current and noncurrent portion)
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7,943
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7,943
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LIABILITIES
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Long term financial debt - Note 4
(1)
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$
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455,779
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$
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275,405
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(1)
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The fair value of long term financial debt is measured using Level 2 fair value inputs.
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The carrying value of cash and cash equivalents and restricted cash approximates fair value. The fair value of long-term financial debt was estimated based upon quoted market prices or by using discounted cash flow analyses based on estimated current rates for similar types of arrangements. Generally, the carrying value of variable interest rate debt, approximates fair value. It was not practicable to estimate the fair value of the Company's investments in 50% or less owned companies because of the lack of quoted market prices and the inability to estimate fair value without incurring excessive costs. Considerable judgment was required in developing certain of the estimates of fair value and accordingly the estimates presented herein are not necessarily indicative of the amounts that the Company could realize in a current market exchange.
7.
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DERIVATIVE INSTRUMENTS AND HEDGING STRATEGIES
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Liabilities arising from outstanding derivative positions are included in the accompanying unaudited condensed consolidated balance sheets as other liabilities, as follows:
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At March 31, 2016
(unaudited)
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Current other liabilities
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Noncurrent other liabilities
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Derivatives designated as hedging instruments
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Interest rate collar (cash flow hedge)
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$
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236
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$
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-
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Interest rate swaps (cash flow hedge)
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453
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-
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$
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689
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$
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-
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At December 31, 2015
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Current other liabilities
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Noncurrent other liabilities
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Derivatives designated as hedging instruments
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Interest rate collar (cash flow hedge)
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$
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229
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$
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-
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Interest rate swaps (cash flow hedge)
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435
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-
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$
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664
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$
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-
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The Company evaluates the risk of counterparty default by monitoring the financial condition of the financial institutions and counterparties involved, by primarily conducting business with large and well-established financial institutions and diversifying its counterparties. The Company does not currently anticipate nonperformance by any of its counterparties.
CASH FLOW HEDGE
INTEREST RATE COLLAR AGREEMENT
On May 7, 2010, through UABL Limited, our holding subsidiary in the River Business, we entered into an interest rate collar transaction with International Finance Corporation (IFC) through which we expect to hedge our exposure to interest volatility under our financings with IFC and OFID from June 2010 to June 2016. The initial notional amount is $75,000 (subsequently adjusted in accordance with the amortization schedule under these financings), with UABL Limited being the USD Floor Rate seller at a floor strike rate of 1.69%, and IFC being the USD Cap Rate seller at a cap strike rate of 5.00%. This contract qualifies for hedge accounting and as such changes in its fair value are included in other comprehensive loss in the unaudited condensed consolidated financial statements. The fair value of this agreement equates to the amount that would be paid or received by the Company if the agreement was cancelled at the reporting date, taking into account current and prospective interest rates and creditworthiness of the Company.
As of March 31, 2016, the total notional amount of the interest rate collar is $48,912.
INTEREST RATE SWAP AGREEMENTS
Through our subsidiaries in the Offshore Supply Business, we have entered into various interest rate swap agreements maturing in October 2016 and December 2018 that call our subsidiaries to pay fixed interest rates ranging from 0.89% to 3.67% on an aggregate notional value of $46,600 (subsequently adjusted in accordance with the amortization schedule under these financings) and receive a variable interest rate based on LIBOR on these notional values. The purpose of these interest rate swap agreements is to hedge our exposure to interest volatility under our financings with DVB Bank SE, NIBC and ABN Amro.
These contracts qualify for hedge accounting and as such changes in its fair value are included in other comprehensive loss in the unaudited condensed consolidated financial statements. The fair value of these agreements equate to the amount that would be paid or received by the Company if the agreement was cancelled at the reporting date, taking into account current and prospective interest rates and creditworthiness of the Company.
As of March 31, 2016, the total notional amount of the interest rate swaps is $34,235.
OTHER DERIVATIVE INSTRUMENTS
Through our subsidiaries in the Offshore Supply Business, the Company has entered into various interest rate swap agreements, while providing effective economic hedges, are not designated as hedge for accounting purposes. These contracts mature ranging from 2014 through 2016 and call for the Company to pay fixed interest rate at 0.90% on an aggregate notional value of $14,749 (subsequently adjusted in accordance with the amortization schedule under these financings) and receive a variable interest rate based on LIBOR. Changes in the fair value are recognized within "Other income (expenses)" in the accompanying unaudited condensed consolidated statement of operations.
The Company operates through its subsidiaries, which are subject to several tax jurisdictions, as follows:
The earnings from shipping operations were derived from sources outside the Bahamas and such earnings were not subject to Bahamian taxes.
ULTRAPETROL (BAHAMAS) LIMITED AND SUBSIDIARIES
The earnings from shipping operations were derived from sources outside Panama and such earnings were not subject to Panamanian taxes.
Our subsidiaries in Paraguay are subject to Paraguayan corporate income taxes.
Our subsidiaries in Argentina are subject to Argentine corporate income taxes.
In Argentina, the tax on minimum presumed income ("TOMPI"), supplements income tax since it applies a minimum tax on the potential income from certain income generating-assets at a 1% tax rate. The Companies' tax obligation in any given year will be the higher of these two tax amounts. However, if in any given tax year TOMPI exceeds income tax, such excess may be computed as payment on account of any excess of income tax over TOMPI that may arise in any of the ten following years.
Our subsidiaries in Brazil are subject to Brazilian corporate income taxes.
Income taxes in Brazil include federal income tax and social contribution (which is an additional federal income tax). Income tax is computed at the rate of 15%, plus a surtax of 10% on the amount that exceeds Brazilian reais 240,000 (equivalent to $67 at March 31, 2016) based on pretax income, adjusted for additions and exclusions established by the Brazilian tax legislation. Social contribution is calculated at the rate of 9%, on pretax income, in conformity with the tax law.
UP Offshore Apoio Maritimo Ltda. has foreign currency exchange gains recognized for tax purposes only in the period the debt (including intercompany transactions) is extinguished. A deferred income tax liability is recognized in the period the foreign currency exchange rate changes equal to the future taxable income at the applicable tax rate.
Our subsidiary, Corporación de Navegación Mundial S.A. (Cor.Na.Mu.S.A.) is subject to Chilean corporate income taxes.
Our subsidiary in the Offshore Supply Business, UP Offshore (UK) Limited, is not subject to corporate income tax in the United Kingdom, rather, it qualifies under UK tonnage tax rules and pays a flat rate based on the net tonnage of qualifying PSVs.
|
h)
|
United States of America (US)
|
Under the U.S. Internal Revenue Code of 1986, as amended, or the Code, 50% of the gross shipping income of our vessel owning or chartering subsidiaries attributable to transportation that begins or ends, but that does not both begin and end, in the U.S. are characterized as U.S. source shipping income. Such income is subject to 4% U.S. federal income tax without allowance for deduction, unless our subsidiaries qualify for exemption from tax under Section 883 of the Code and the Treasury Regulations promulgated thereunder.
For the three-month periods ended March 31, 2016 and 2015, our subsidiaries did not derive any U.S. source shipping income. Therefore our subsidiaries are not subject to any U.S. federal income taxes, except our ship management services provided by Ravenscroft.
Common shares and shareholders
On July 2, 2012, the shareholders of the Company at a Special General Meeting approved the increase in authorized share capital from 100,000,000 to 250,000,000 shares of common stock with a par value of $0.01 per share, and approved the adoption of the Third Amended and Restated Memorandum of Association and Sixth Amended and Restated Articles of Association.
On December 12, 2012, we entered into an investment agreement with Sparrow Capital Investments Ltd. or Sparrow, a subsidiary of Southern Cross Latin America Private Equity Fund III, L.P. and Southern Cross Latin America Private Equity Fund IV, L.P. or Southern Cross, pursuant to which we sold 110,000,000 shares of newly issued common stock to Sparrow at a purchase price of $2.00 per share. Concurrently Sparrow designated Sparrow CI Sub Ltd. to receive 16,060,000 shares of common stock of Ultrapetrol.
ULTRAPETROL (BAHAMAS) LIMITED AND SUBSIDIARIES
At March 31, 2016, the outstanding common shares are 140,729,487 par value $.01 per share and all the shares of the Company have one vote.
At March 31, 2016, our shareholders Sparrow and Sparrow CI Sub Ltd. (a wholly owned subsidiary of Sparrow), hold 103,206,821 and 16,060,000 shares, respectively, which represent 73.34% and 11.41% of the outstanding shares, respectively. The joint voting power for these shares represents 84.75% of the total voting power.
Listing Transfer to NASDAQ Stock Exchange ("NASDAQ") Capital Market
On August 27, 2015, the Company received notice dated August 25, 2015, from the NASDAQ indicating that the Company's common stock was not in compliance with NASDAQ's continued listing standard requiring a minimum closing bid price of at least one dollar per share over the preceding 30 consecutive business days. This notice did not have an immediate effect on the listing of our common shares.
Under the NASDAQ's rules, the Company had a period of six months from the date of the NASDAQ notice to regain compliance. If, at any time during the 180 day period, the closing bid price for the Company's common stock would have been at least one dollar for a minimum of ten consecutive business days, compliance had been regained and the matter had been closed.
On February 9, 2016, the Company received another notice from the NASDAQ indicating that the Company's common stock was not in compliance with NASDAQ's continued listing standard requiring a minimum market value of publicly held shares of $5,000 for the preceding 30 consecutive business days. This notice did not have an immediate effect on the listing of Ultrapetrol's common shares.
Under the NASDAQ's rules, the Company has a period of six months from the date of the NASDAQ notice to regain compliance. If, at any time during the 180 day period, the minimum market value of publicly held shares exceeds $5,000 for a minimum of ten consecutive business days, compliance will be regained and the matter will be closed.
On February 22, 2016, Ultrapetrol announced that its application to be listed on the NASDAQ Capital Market has been approved by NASDAQ. Effective February 23, 2016, the Company's stock are listed on the NASDAQ Capital Market, rather than on NASDAQ's Global Select Market. The move to the NASDAQ Capital Market will not affect the listing or trading of the Company's common stock.
By transferring to the NASDAQ Capital Market, the Company regained compliance with the continued listing standard for the minimum required market value of its publicly held shares. Also in connection with the Company's move to the NASDAQ Capital Market, NASDAQ has extended the period during which the Company must come into compliance with the minimum bid price per share requirement through August 22, 2016. If at any time during that period, the closing bid price of the Company's common stock is at least one dollar per share for a minimum of ten consecutive business days, compliance will be regained and the matter will be closed.
2008 Share repurchase program
Ultrapetrol's Board of Directors has approved a share repurchase program, effective March 17, 2008, for up to a total of $50,000 of the Company's common stock through December 31, 2008. The expiration date of the share repurchase program was extended by the Board of Directors until September 30, 2009, when it finally expired.
At March 31, 2016 the Company had repurchased a total of 3,923,094 common shares, at a total cost of $19,488.
10.
|
BUSINESS AND GEOGRAPHIC SEGMENT INFORMATION
|
The Company organizes its business and evaluates performance by its operating segments, Ocean, River and Offshore Supply Business. The accounting policies of the reportable segments are the same as those for the unaudited condensed consolidated financial statements (Note 2). The Company does not have significant intersegment transactions. These segments and their respective operations are as follows:
ULTRAPETROL (BAHAMAS) LIMITED AND SUBSIDIARIES
River Business: In our River Business, we own and operate several dry and tanker barges, and push boats. The dry barges transport basically agricultural and forestry products, iron ore and other cargoes, while the tanker barges carry petroleum products, vegetable oils and other liquids. We operate our pushboats and barges on the navigable waters of Parana, Paraguay and Uruguay Rivers and part of the River Plate in South America, also known as the Hidrovia region. In addition, we use one barge, our Parana Iron (former Parana Petrol) as an iron ore floating transshipment and storage station and another transshipment unit. River Business transportation services contributed 51% and 46% of consolidated operating revenues for the three-month periods ended March 31, 2016 and 2015, respectively. The Company also has a shipyard that should promote organic growth and from time to time make external sales. Third party shipyard sales contributed 0% and 0% of consolidated operating revenues for the three-month periods ended March 31, 2016 and 2015, respectively.
Offshore Supply Business: We operate our Offshore Supply Business, using PSVs and a Remotely Support Vessel (RSV) owned by UP Offshore (Bahamas), which are designed to transport supplies to offshore oil & gas industry such as containerized equipment, drill casing, pipes and heavy loads on deck, along with fuel, water, drilling fluids and bulk cement in under deck tanks and a variety of other supplies to drilling rigs and platforms. Our Offshore Supply Business fleet consists of thirteen PSVs, eight of which are chartered under medium term contracts with Petrobras in Brazil, of them one remains blocked, other three in laid-up which were operated with Petrobras until the notification received mentioned in the following paragraph, and two of them in the North Sea (UK), which were in laid-up, and one RSV, chartered with Petrobras in Brazil. Offshore Supply Business transportation services contributed 30% and 35% of consolidated operating revenues for the three-month periods ended March 31, 2016 and 2015, respectively.
On September, 21, 2015 we received a notification from Petrobras regarding the early termination of contracts for three of our non-Brazilian flag PSVs UP Amber, UP Pearl, and UP Esmeralda. During September, 2015, we received a notification from Petrobras regarding the blockage of our non-Brazilian flag PSVs UP Turquoise, which is under a time charter contract until March 2019.
Ocean Business: In our Ocean Business, we operate four oceangoing vessels, two product tankers (both of them on lease to us), and two container feeder vessels under a container line service in Argentina cabotage trade, which transport mostly foreign containers from the transshipment port of Buenos Aires, Argentina and Montevideo, Uruguay to the southern region of Patagonia in Argentina. Our Handy size/small product tanker vessels transport liquid bulk goods such as petroleum and petroleum derivatives serving regional trades mainly in Argentina and Brazil. Ocean Business transportation services contributed 19% and 19% of consolidated operating revenues for the three-month periods ended March 31, 2016 and 2015, respectively.
All of the Company's operating revenues were derived from its foreign operations. The following represents the Company's revenues attributed by geographical region in which services are provided to customers.
|
|
For the three-month period ended March 31, (unaudited)
|
|
|
|
2016
|
|
|
2015
|
|
Revenues
(1)
|
|
|
|
|
|
|
−
South America
|
|
$
|
56,778
|
|
|
$
|
71,390
|
|
−
Central America
|
|
|
75
|
|
|
|
410
|
|
−
Europe
|
|
|
8,333
|
|
|
|
11,373
|
|
−
Asia
|
|
|
1,911
|
|
|
|
1,400
|
|
|
|
$
|
67,097
|
|
|
$
|
84,573
|
|
|
(1)
|
Classified by country of domicile of charterers/customers.
|
The Company's vessels are highly mobile and regularly and routinely moved between countries within a geographical region of the world. In addition, these vessels may be redeployed among the geographical regions as changes in market conditions dictate. Because of this mobility, long-lived assets, primarily vessels and equipment cannot be allocated to any one country.
The following represents the Company's vessels and equipment based upon the assets' physical location as of the end of each applicable period presented:
|
|
At March 31, 2016
(unaudited)
|
|
|
At December 31, 2015
|
|
Vessels and equipment, net
|
|
|
|
|
|
|
−
South America
|
|
$
|
598,373
|
|
|
$
|
610,599
|
|
−
Europe
|
|
|
54,699
|
|
|
|
54,251
|
|
−
Other
|
|
|
4,225
|
|
|
|
4,237
|
|
|
|
$
|
657,297
|
|
|
$
|
669,087
|
|
For the three-month period ended March 31, 2016, 85% of the Company's revenues are concentrated in South America and at March 31, 2016, 91% of the Company's vessels and equipment are located in South America.
For the three-month period ended March 31, 2016, revenues from charterers domiciled in Argentina, Brazil and Paraguay represented 29%, 30% and 17%, of the Company's consolidated revenues, respectively.
For the three-month period ended March 31, 2015, 84% of the Company's revenues are concentrated in South America and at March 31, 2015, 92% of the Company's vessels and equipment are located in South America.
For the three-month period ended March 31, 2015, revenues from charterers domiciled in Argentina, Brazil and Paraguay represented 22%, 33% and 24%, of the Company's consolidated revenues, respectively.
As a result, the Company's financial condition and results of operations depend, to a significant extent, on macroeconomic, regulatory and political conditions prevailing in South America.
Revenue by segment consists only of services provided to external customers, as reported in the unaudited condensed consolidated statement of operations. Resources are allocated based on segment profit or loss from operation, before interest and taxes.
Identifiable assets represent those assets used in the operations of each segment.
The following schedule presents segment information about the Company's operations for the three-month period ended March 31, 2016 (unaudited):
|
|
River
Business
|
|
|
Offshore
Supply
Business
|
|
|
Ocean
Business
|
|
|
Total
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Transportation revenues
|
|
$
|
34,181
|
|
|
$
|
20,321
|
|
|
$
|
12,595
|
|
|
$
|
67,097
|
|
Manufacturing revenues
|
|
|
-
|
|
|
|
-
|
|
|
|
-
|
|
|
|
-
|
|
Running and voyage expenses
|
|
|
22,090
|
|
|
|
8,866
|
|
|
|
11,152
|
|
|
|
42,108
|
|
Depreciation and amortization
|
|
|
6,627
|
|
|
|
4,719
|
|
|
|
931
|
|
|
|
12,277
|
|
Segment operating (loss) profit
|
|
|
426
|
|
|
|
4,295
|
|
|
|
(746
|
)
|
|
|
3,975
|
|
Segment assets
|
|
|
416,169
|
|
|
|
326,367
|
|
|
|
39,996
|
|
|
|
782,532
|
|
Investments in and receivables from affiliates
|
|
|
3,796
|
|
|
|
-
|
|
|
|
25
|
|
|
|
3,821
|
|
Gains from investment in affiliates
|
|
|
27
|
|
|
|
-
|
|
|
|
-
|
|
|
|
27
|
|
Additions to long-lived assets
|
|
|
808
|
|
|
|
1,063
|
|
|
|
18
|
|
|
|
1,889
|
|
Reconciliation of total assets of the segments to amount included in the unaudited condensed consolidated balance sheet were as follow:
|
|
At March 31,
2016
(unaudited)
|
|
|
|
|
|
Total assets for reportable segments
|
|
$
|
782,532
|
|
Other assets
|
|
|
5,738
|
|
Corporate cash and cash equivalents
|
|
|
35,430
|
|
Consolidated total assets
|
|
$
|
823,700
|
|
The following schedule presents segment information about the Company's operations for the three-month period ended March 31, 2015 (unaudited):
|
|
River Business
|
|
|
Offshore
Supply
Business
|
|
|
Ocean Business
|
|
|
Total
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Transportation revenues
|
|
$
|
38,930
|
|
|
$
|
29,557
|
|
|
$
|
16,086
|
|
|
$
|
84,573
|
|
Manufacturing revenues
|
|
|
-
|
|
|
|
-
|
|
|
|
-
|
|
|
|
-
|
|
Running and voyage expenses
|
|
|
30,467
|
|
|
|
14,023
|
|
|
|
13,144
|
|
|
|
57,634
|
|
Depreciation and amortization
|
|
|
6,663
|
|
|
|
4,495
|
|
|
|
1,345
|
|
|
|
12,503
|
|
Segment operating (loss) profit
|
|
|
(3,250
|
)
|
|
|
8,060
|
|
|
|
3
|
|
|
|
4,813
|
|
Segment assets
|
|
|
446,190
|
|
|
|
328,760
|
|
|
|
79,823
|
|
|
|
854,773
|
|
Investments in and receivables from affiliates
|
|
|
3,880
|
|
|
|
-
|
|
|
|
186
|
|
|
|
4,066
|
|
Loss from investment in affiliates
|
|
|
(93
|
)
|
|
|
-
|
|
|
|
-
|
|
|
|
(93
|
)
|
Additions to long-lived assets
|
|
|
7,260
|
|
|
|
1,839
|
|
|
|
245
|
|
|
|
9,344
|
|
ULTRAPETROL (BAHAMAS) LIMITED AND SUBSIDIARIES
11.
|
SUPPLEMENTAL GUARANTOR INFORMATION
|
On June 10 and October 2, 2013 the Company issued $200,000 and $25,000, respectively of its 2021 Senior Notes.
The 2021 Senior Notes are fully and unconditionally guaranteed on a joint and several basis by Company's subsidiaries directly involved in our Ocean and River Business.
The Indenture provides that the 2021 Senior Notes and each of the guarantees granted by Subsidiaries, other than the Mortgage, are governed by, and construed in accordance with, the laws of the state of New York. Each of the mortgaged vessels is registered under either the Panamanian flag, or another jurisdiction with similar procedures. All of the Subsidiary Guarantors are outside of the United States.
Supplemental condensed consolidating financial information for the Guarantor Subsidiaries for the 2021 Senior Notes is presented below. This information is prepared in accordance with the Company's accounting policies. This supplemental financial disclosure should be read in conjunction with the unaudited condensed consolidated financial statements.
ULTRAPETROL (BAHAMAS) LIMITED AND SUBSIDIARIES
NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (UNAUDITED)
SUPPLEMENTAL CONDENSED CONSOLIDATING BALANCE SHEET
AT MARCH 31, 2016 (UNAUDITED)
(stated in thousands of U.S. dollars)
|
|
Parent
|
|
|
Combined subsidiary guarantors
|
|
|
Combined subsidiary non guarantors
|
|
|
Consolidating adjustments
|
|
|
Total consolidated amounts
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Current assets
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Receivables from related parties
|
|
$
|
420,066
|
|
|
$
|
54,003
|
|
|
$
|
174,689
|
|
|
$
|
(648,758
|
)
|
|
$
|
-
|
|
Other current assets
|
|
|
8,381
|
|
|
|
53,200
|
|
|
|
67,237
|
|
|
|
-
|
|
|
|
128,818
|
|
Total current assets
|
|
|
428,447
|
|
|
|
107,203
|
|
|
|
241,926
|
|
|
|
(648,758
|
)
|
|
|
128,818
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Noncurrent assets
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Vessels and equipment, net
|
|
$
|
-
|
|
|
$
|
257,004
|
|
|
$
|
400,990
|
|
|
$
|
(697
|
)
|
|
$
|
657,297
|
|
Investment in affiliates
|
|
|
103,978
|
|
|
|
-
|
|
|
|
25
|
|
|
|
(103,978
|
)
|
|
|
25
|
|
Other noncurrent assets
|
|
|
-
|
|
|
|
16,295
|
|
|
|
21,265
|
|
|
|
-
|
|
|
|
37,560
|
|
Total noncurrent assets
|
|
|
103,978
|
|
|
|
273,299
|
|
|
|
422,280
|
|
|
|
(104,675
|
)
|
|
|
694,882
|
|
Total assets
|
|
$
|
532,425
|
|
|
$
|
380,502
|
|
|
$
|
664,206
|
|
|
$
|
(753,433
|
)
|
|
$
|
823,700
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Current liabilities
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Payable to related parties
|
|
$
|
-
|
|
|
$
|
338,319
|
|
|
$
|
310,520
|
|
|
$
|
(648,758
|
)
|
|
$
|
81
|
|
Current portion of long-term financial debt, net
of debt issuance cost
|
|
|
218,841
|
|
|
|
41,499
|
|
|
|
184,855
|
|
|
|
-
|
|
|
|
445,195
|
|
Other current liabilities
|
|
|
20,662
|
|
|
|
24,110
|
|
|
|
25,511
|
|
|
|
-
|
|
|
|
70,283
|
|
Total current liabilities
|
|
|
239,503
|
|
|
|
403,928
|
|
|
|
520,886
|
|
|
|
(648,758
|
)
|
|
|
515,559
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Noncurrent liabilities
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Other non current liabilities
|
|
$
|
-
|
|
|
$
|
1,090
|
|
|
$
|
14,129
|
|
|
$
|
-
|
|
|
$
|
15,219
|
|
Total noncurrent liabilities
|
|
|
-
|
|
|
|
1,090
|
|
|
|
14,129
|
|
|
|
-
|
|
|
|
15,219
|
|
Total liabilities
|
|
|
239,503
|
|
|
|
405,018
|
|
|
|
535,015
|
|
|
|
(648,758
|
)
|
|
|
530,778
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Total equity
|
|
|
292,922
|
|
|
|
(24,516
|
)
|
|
|
129,191
|
|
|
|
(104,675
|
)
|
|
|
292,922
|
|
Total liabilities and equity
|
|
$
|
532,425
|
|
|
$
|
380,502
|
|
|
$
|
664,206
|
|
|
$
|
(753,433
|
)
|
|
$
|
823,700
|
|
ULTRAPETROL (BAHAMAS) LIMITED AND SUBSIDIARIES
NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (UNAUDITED)
SUPPLEMENTAL CONDENSED CONSOLIDATING BALANCE SHEET
AT DECEMBER 31, 2015
(stated in thousands of U.S. dollars)
|
|
Parent
|
|
|
Combined subsidiary guarantors
|
|
|
Combined subsidiary non guarantors
|
|
|
Consolidating adjustments
|
|
|
Total consolidated amounts
|
|
Current assets
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Receivables from related parties
|
|
$
|
411,901
|
|
|
$
|
51,803
|
|
|
$
|
172,599
|
|
|
$
|
(636,303
|
)
|
|
$
|
-
|
|
Other current assets
|
|
|
18,654
|
|
|
|
57,678
|
|
|
|
55,401
|
|
|
|
-
|
|
|
|
131,733
|
|
Total current assets
|
|
|
430,555
|
|
|
|
109,481
|
|
|
|
228,000
|
|
|
|
(636,303
|
)
|
|
|
131,733
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Noncurrent assets
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Vessels and equipment, net
|
|
|
-
|
|
|
|
264,380
|
|
|
|
405,419
|
|
|
|
(712
|
)
|
|
|
669,087
|
|
Investment in affiliates
|
|
|
110,631
|
|
|
|
-
|
|
|
|
25
|
|
|
|
(110,631
|
)
|
|
|
25
|
|
Other noncurrent assets
|
|
|
-
|
|
|
|
17,270
|
|
|
|
20,374
|
|
|
|
-
|
|
|
|
37,644
|
|
Total noncurrent assets
|
|
|
110,631
|
|
|
|
281,650
|
|
|
|
425,818
|
|
|
|
(111,343
|
)
|
|
|
706,756
|
|
Total assets
|
|
$
|
541,186
|
|
|
$
|
391,131
|
|
|
$
|
653,818
|
|
|
$
|
(747,646
|
)
|
|
$
|
838,489
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Current liabilities
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Payable to related parties
|
|
$
|
-
|
|
|
$
|
330,500
|
|
|
$
|
305,844
|
|
|
$
|
(636,303
|
)
|
|
$
|
41
|
|
Current portion of long-term financial debt, net
of debt issuance cost
|
|
|
218,691
|
|
|
|
41,486
|
|
|
|
192,544
|
|
|
|
-
|
|
|
|
452,721
|
|
Other current liabilities
|
|
|
12,881
|
|
|
|
32,119
|
|
|
|
17,768
|
|
|
|
-
|
|
|
|
62,768
|
|
Total current liabilities
|
|
|
231,572
|
|
|
|
404,105
|
|
|
|
516,156
|
|
|
|
(636,303
|
)
|
|
|
515,530
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Noncurrent liabilities
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Due to affiliates
|
|
$
|
-
|
|
|
$
|
-
|
|
|
$
|
-
|
|
|
$
|
-
|
|
|
$
|
-
|
|
Long-term financial debt
|
|
|
-
|
|
|
|
-
|
|
|
|
-
|
|
|
|
-
|
|
|
|
-
|
|
Other noncurrent liabilities
|
|
|
-
|
|
|
|
652
|
|
|
|
12,693
|
|
|
|
-
|
|
|
|
13,345
|
|
Total noncurrent liabilities
|
|
|
-
|
|
|
|
652
|
|
|
|
12,693
|
|
|
|
-
|
|
|
|
13,345
|
|
Total liabilities
|
|
|
231,572
|
|
|
|
404,757
|
|
|
|
528,849
|
|
|
|
(636,303
|
)
|
|
|
528,875
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Total equity
|
|
|
309,614
|
|
|
|
(13,626
|
)
|
|
|
124,969
|
|
|
|
(111,343
|
)
|
|
|
309,614
|
|
Total liabilities and equity
|
|
$
|
541,186
|
|
|
$
|
391,131
|
|
|
$
|
653,818
|
|
|
$
|
(747,646
|
)
|
|
$
|
838,489
|
|
ULTRAPETROL (BAHAMAS) LIMITED AND SUBSIDIARIES
NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (UNAUDITED)
SUPPLEMENTAL CONDENSED CONSOLIDATING STATEMENT OF OPERATIONS
FOR THE THREE-MONTH PERIOD ENDED MARCH 31, 2016 (UNAUDITED)
(stated in thousands of U.S. dollars)
|
|
Parent
|
|
|
Combined subsidiary guarantors
|
|
|
Combined subsidiary non guarantors
|
|
|
Consolidating adjustments
|
|
|
Total consolidated amounts
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Revenues
|
|
$
|
-
|
|
|
$
|
33,910
|
|
|
$
|
44,044
|
|
|
$
|
(10,857
|
)
|
|
$
|
67,097
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Operating expenses
|
|
|
(2,600
|
)
|
|
|
(34,992
|
)
|
|
|
(36,402
|
)
|
|
|
10,872
|
|
|
|
(63,122
|
)
|
Operating (loss) profit
|
|
|
(2,600
|
)
|
|
|
(1,082
|
)
|
|
|
7,642
|
|
|
|
15
|
|
|
|
3,975
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Investment in affiliates
|
|
|
(6,699
|
)
|
|
|
-
|
|
|
|
27
|
|
|
|
6,699
|
|
|
|
27
|
|
Other income (expenses)
|
|
|
(7,801
|
)
|
|
|
(9,518
|
)
|
|
|
(966
|
)
|
|
|
-
|
|
|
|
(18,285
|
)
|
Loss before income tax
|
|
|
(17,100
|
)
|
|
|
(10,600
|
)
|
|
|
6,703
|
|
|
|
6,714
|
|
|
|
(14,283
|
)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Income tax benefit (expense)
|
|
|
-
|
|
|
|
(290
|
)
|
|
|
(2,527
|
)
|
|
|
-
|
|
|
|
(2,817
|
)
|
Net (loss) income
|
|
$
|
(17,100
|
)
|
|
$
|
(10,890
|
)
|
|
$
|
4,176
|
|
|
$
|
6,714
|
|
|
$
|
(17,100
|
)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
ULTRAPETROL (BAHAMAS) LIMITED AND SUBSIDIARIES
NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (UNAUDITED)
SUPPLEMENTAL CONDENSED CONSOLIDATING STATEMENT OF OPERATIONS
FOR THE THREE-MONTH PERIOD ENDED MARCH 31, 2015 (UNAUDITED)
(stated in thousands of U.S. dollars)
|
|
Parent
|
|
|
Combined subsidiary guarantors
|
|
|
Combined subsidiary non guarantors
|
|
|
Consolidating adjustments
|
|
|
Total consolidated amounts
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Revenues
|
|
$
|
-
|
|
|
$
|
43,366
|
|
|
$
|
53,979
|
|
|
$
|
(12,772
|
)
|
|
$
|
84,573
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Operating expenses
|
|
|
(2,709
|
)
|
|
|
(45,999
|
)
|
|
|
(43,838
|
)
|
|
|
12,786
|
|
|
|
(79,760
|
)
|
Operating (loss) profit
|
|
|
(2,709
|
)
|
|
|
(2,633
|
)
|
|
|
10,141
|
|
|
|
14
|
|
|
|
4,813
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Investment in affiliates
|
|
|
(1,981
|
)
|
|
|
-
|
|
|
|
(93
|
)
|
|
|
1,981
|
|
|
|
(93
|
)
|
Other (expenses) income
|
|
|
(417
|
)
|
|
|
(4,405
|
)
|
|
|
(5,318
|
)
|
|
|
-
|
|
|
|
(10,140
|
)
|
Loss before income tax
|
|
|
(5,107
|
)
|
|
|
(7,038
|
)
|
|
|
4,730
|
|
|
|
1,995
|
|
|
|
(5,420
|
)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Income tax benefit (expense)
|
|
|
-
|
|
|
|
40
|
|
|
|
273
|
|
|
|
-
|
|
|
|
313
|
|
Net loss
|
|
$
|
(5,107
|
)
|
|
$
|
(6,998
|
)
|
|
$
|
5,003
|
|
|
$
|
1,995
|
|
|
$
|
(5,107
|
)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
ULTRAPETROL (BAHAMAS) LIMITED AND SUBSIDIARIES
NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (UNAUDITED)
SUPPLEMENTAL CONDENSED CONSOLIDATING STATEMENT OF CASH FLOW
FOR THE THREE-MONTH PERIOD ENDED MARCH 31, 2016 (UNAUDITED)
(stated in thousands of U.S. dollars)
|
|
Parent
|
|
|
Combined subsidiary guarantors
|
|
|
Combined
subsidiary non guarantors
|
|
|
Consolidating adjustments
|
|
|
Total consolidated amounts
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Net loss
|
|
$
|
(17,100
|
)
|
|
$
|
(10,890
|
)
|
|
$
|
4,176
|
|
|
$
|
6,714
|
|
|
$
|
(17,100
|
)
|
Adjustments to reconcile net loss to net cash (used in)
provided by operating activities
|
|
|
19,550
|
|
|
|
1,870
|
|
|
|
959
|
|
|
|
(6,714
|
)
|
|
|
15,665
|
|
Net cash (used in) provided by operating activities
|
|
|
2,450
|
|
|
|
(9,020
|
)
|
|
|
5,135
|
|
|
|
-
|
|
|
|
(1,435
|
)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Intercompany sources
|
|
|
(8,165
|
)
|
|
|
5,619
|
|
|
|
2,546
|
|
|
|
-
|
|
|
|
-
|
|
Non-subsidiary sources
|
|
|
-
|
|
|
|
(792
|
)
|
|
|
3,587
|
|
|
|
-
|
|
|
|
2,795
|
|
Net cash (used in) provided by investing activities
|
|
|
(8,165
|
)
|
|
|
4,827
|
|
|
|
6,133
|
|
|
|
-
|
|
|
|
2,795
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Intercompany sources
|
|
|
-
|
|
|
|
-
|
|
|
|
-
|
|
|
|
-
|
|
|
|
-
|
|
Non-subsidiary sources
|
|
|
(7,643
|
)
|
|
|
-
|
|
|
|
(3,480
|
)
|
|
|
-
|
|
|
|
(11,123
|
)
|
Net cash used in financing activities
|
|
|
(7,643
|
)
|
|
|
-
|
|
|
|
(3,480
|
)
|
|
|
-
|
|
|
|
(11,123
|
)
|
Net (decrease) increase in cash and cash equivalents
|
|
$
|
(13,358
|
)
|
|
$
|
(4,193
|
)
|
|
$
|
7,788
|
|
|
$
|
-
|
|
|
$
|
(9,763
|
)
|
ULTRAPETROL (BAHAMAS) LIMITED AND SUBSIDIARIES
NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (UNAUDITED)
SUPPLEMENTAL CONDENSED CONSOLIDATING STATEMENT OF CASH FLOW
FOR THE THREE-MONTH PERIOD ENDED MARCH 31, 2015 (UNAUDITED)
(stated in thousands of U.S. dollars)
|
|
Parent
|
|
|
Combined subsidiary guarantors
|
|
|
Combined
subsidiary non guarantors
|
|
|
Consolidating adjustments
|
|
|
Total consolidated amounts
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Net (loss) income
|
|
$
|
(5,107
|
)
|
|
$
|
(6,998
|
)
|
|
$
|
5,003
|
|
|
$
|
1,995
|
|
|
$
|
(5,107
|
)
|
Adjustments to reconcile net (loss) income to net cash provided by (used in)
operating activities
|
|
|
17,312
|
|
|
|
(8,983
|
)
|
|
|
(324
|
)
|
|
|
(1,995
|
)
|
|
|
6,010
|
|
Net cash provided by (used in) operating activities
|
|
|
12,205
|
|
|
|
(15,981
|
)
|
|
|
4,679
|
|
|
|
-
|
|
|
|
903
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Intercompany sources
|
|
|
(11,936
|
)
|
|
|
24,173
|
|
|
|
(12,237
|
)
|
|
|
-
|
|
|
|
-
|
|
Non-subsidiary sources
|
|
|
-
|
|
|
|
(5,854
|
)
|
|
|
(3,490
|
)
|
|
|
-
|
|
|
|
(9,344
|
)
|
Net cash provided by (used in) investing activities
|
|
|
(11,936
|
)
|
|
|
18,319
|
|
|
|
(15,727
|
)
|
|
|
-
|
|
|
|
(9,344
|
)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Intercompany sources
|
|
|
-
|
|
|
|
-
|
|
|
|
-
|
|
|
|
-
|
|
|
|
-
|
|
Non-subsidiary sources
|
|
|
(29
|
)
|
|
|
(4
|
)
|
|
|
(6,212
|
)
|
|
|
-
|
|
|
|
(6,245
|
)
|
Net cash (used in) financing activities
|
|
|
(29
|
)
|
|
|
(4
|
)
|
|
|
(6,212
|
)
|
|
|
-
|
|
|
|
(6,245
|
)
|
Net increase (decrease) in cash and cash equivalents
|
|
$
|
240
|
|
|
$
|
2,334
|
|
|
$
|
(17,260
|
)
|
|
$
|
-
|
|
|
$
|
(14,686
|
)
|