NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
(unaudited)
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1.
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BASIS OF PRESENTATION AND ACCOUNTING POLICIES
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The condensed consolidated financial information for the
three and six months ended
June 30, 2017
and
2016
has been prepared by the Company and has not been audited by its independent registered certified public accounting firm. The condensed consolidated financial statements include the accounts of SEACOR Holdings Inc. and its consolidated subsidiaries. In the opinion of management, all adjustments (consisting of normal recurring adjustments) have been made to fairly present the Company’s financial position as of
June 30, 2017
, its results of operations for the
three and six months ended
June 30, 2017
and
2016
, its comprehensive loss for the
three and six months ended
June 30, 2017
and
2016
, its changes in equity for the
six months ended
June 30, 2017
, and its cash flows for the
six months ended
June 30, 2017
and
2016
. Results of operations for the interim periods presented are not necessarily indicative of operating results for the full year or any future periods.
Certain information and footnote disclosures normally included in financial statements prepared in accordance with generally accepted accounting principles in the United States have been condensed or omitted. These 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 10-K for the year ended
December 31, 2016
.
Unless the context otherwise indicates, any reference in this Quarterly Report on Form 10-Q to the “Company” refers to SEACOR Holdings Inc. and its consolidated subsidiaries and any reference in this Quarterly Report on Form 10-Q to “SEACOR” refers to SEACOR Holdings Inc without its consolidated subsidiaries. Capitalized terms used and not specifically defined herein have the same meaning given those terms in the Company's Annual report on Form 10-K for the year ended
December 31, 2016
.
Discontinued Operations.
On June 1, 2017, the Company completed the spin-off of SEACOR Marine Holdings Inc. (“SEACOR Marine”), the company that operated SEACOR’s Offshore Marine Services business segment (the “Spin-off”), by means of a dividend of all the issued and outstanding common stock of SEACOR Marine to SEACOR’s shareholders. SEACOR Marine is now an independent company whose common stock is listed on the New York Stock Exchange under the symbol “SMHI.” For all periods presented herein, the Company has reported the historical financial position, results of operations and cash flows of SEACOR Marine as discontinued operations (see Note 13).
On July 3, 2017, the Company effected the sale of its
70%
interest in Illinois Corn Processing LLC (“ICP”), the company that operated SEACOR’s Illinois Corn Processing business segment, through a merger transaction whereby the Company received
$21.0 million
in cash and issued a note to the buyer for
$32.7 million
, subject to a working capital adjustment, resulting in a third quarter gain of
$11.6 million
, net of tax. The principal amount of the promissory note accrues interest at a rate per annum equal to the three-month London Interbank Offered Rate (“LIBOR”) plus an applicable margin of
5%
for the first three months,
8%
for the next three months and
10%
thereafter, and matures on January 3, 2019. The obligations of ICP under the promissory note are secured by the equity and substantially all of the assets of ICP. ICP operates a single-site alcohol manufacturing, storage and distribution facility producing alcohol used in the food, beverage, industrial and petrochemical end-markets. For all periods presented herein, the Company has reported the historical financial position, results of operations and cash flows of ICP as discontinued operations (see Note 13).
Subsequent Event.
On July 3, 2017, International Shipholding Corporation (“ISH”) emerged from bankruptcy pursuant to its chapter 11 plan of reorganization (the “Plan”) that had been confirmed by the U.S. Bankruptcy Court for the Southern District of New York. Pursuant to the Plan, SEACOR Ocean Transport Inc., a wholly-owned subsidiary of the Company, acquired all of the equity of the reorganized ISH. ISH, through its subsidiaries, operates a diversified fleet of U.S. and foreign-flag vessels that provide worldwide and domestic maritime transportation services to commercial and governmental customers primarily under medium to long-term charters and contracts. Under the terms of the Plan, the Company paid
$10.5 million
in cash, converted
$18.1 million
of debtor in possession financing into equity and borrowed
$25.0 million
under a new credit facility that is secured by the assets and equity of ISH and is non-recourse to SEACOR and its subsidiaries other than ISH (see Note 4).
Revenue Recognition.
The Company recognizes revenue when it is realized or realizable and earned. Revenue is realized or realizable and earned when persuasive evidence of an arrangement exists, delivery has occurred or services have been rendered, the price to the buyer is fixed or determinable, and collectability is reasonably assured. Revenue that does not meet these criteria is deferred until the criteria are met.
Property and Equipment.
Equipment, stated at cost, is depreciated using the straight-line method over the estimated useful life of the asset to an estimated salvage value. With respect to each class of asset, the estimated useful life is based upon a newly built asset being placed into service and represents the time period beyond which it is typically not justifiable for the Company to continue to operate the asset in the same or similar manner. From time to time, the Company may acquire older assets that have already exceeded the Company’s useful life policy, in which case the Company depreciates such assets based on its best estimate of remaining useful life, typically the next survey or certification date.
As of
June 30, 2017
, the estimated useful life (in years) of each of the Company’s major categories of new equipment was as follows:
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Inland river dry-cargo and deck barges
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20
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Inland river liquid tank barges
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25
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Inland river towboats and harbor boats
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25
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Product tankers - U.S.-flag
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25
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Short-sea Container/RORO
(1)
vessels
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20
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Harbor and offshore tugs
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25
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Ocean liquid tank barges
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25
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Terminal facilities
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20
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______________________
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(1)
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Roll on/Roll off (“RORO”).
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Equipment maintenance and repair costs including the costs of routine overhauls, drydockings and inspections performed on vessels and equipment are charged to operating expense as incurred. Expenditures that extend the useful life or improve the marketing and commercial characteristics of equipment as well as major renewals and improvements to other properties are capitalized.
Certain interest costs incurred during the construction of equipment are capitalized as part of the assets’ carrying values and are amortized over such assets’ estimated useful lives. During the
six months ended
June 30, 2017
, capitalized interest totaled
$2.1 million
.
Impairment of Long-Lived Assets.
The Company performs an impairment analysis of long-lived assets used in operations, including intangible assets, when indicators of impairment are present. These indicators may include a significant decrease in the market price of a long-lived asset or asset group, a significant adverse change in the extent or manner in which a long-lived asset or asset group is being used or in its physical condition, or a current period operating or cash flow loss combined with a history of operating or cash flow losses or a forecast that demonstrates continuing losses associated with the use of a long-lived asset or asset group. If the carrying values of the assets are not recoverable, as determined by the estimated undiscounted cash flows, the estimated fair value of the assets or asset groups are compared to their current carrying value and impairment charges are recorded if the carrying value exceeds fair value. The Company performs its testing on an asset or asset group basis. The Company’s estimates of undiscounted cash flows are highly subjective and actual results may vary from the Company’s estimates due to the uncertainty regarding projected financial performance. Generally, fair value is determined using valuation techniques, such as expected discounted cash flows or appraisals, as appropriate. During the
six months ended
June 30, 2017
, the Company recognized impairment charges of
$0.4 million
related to long-lived assets held for use. During the
six months ended
June 30, 2016
, the Company recognized no impairment charges related to long-lived assets held for use.
Impairment of 50% or Less Owned Companies.
Investments in 50% or less owned companies are reviewed periodically to assess whether there is an other-than-temporary decline in the carrying value of the investment. In its evaluation, the Company considers, among other items, recent and expected financial performance and returns, impairments recorded by the investee and the capital structure of the investee. When the Company determines the estimated fair value of an investment is below carrying value and the decline is other-than-temporary, the investment is written down to its estimated fair value. Actual results may vary from the Company’s estimates due to the uncertainty regarding projected financial performance, the severity and expected duration of declines in value, and the available liquidity in the capital markets to support the continuing operations of the investee, among other factors. Although the Company believes its assumptions and estimates are reasonable, the investee’s actual performance compared with the estimates could produce different results and lead to additional impairment charges in future periods. During the
six months ended
June 30, 2017
and
2016
, the Company did not recognize any impairment charges related to its 50% or less owned companies.
Income Taxes.
During the
six months ended
June 30, 2017
, the Company’s effective income tax rate of
1.7%
was primarily due to taxes not provided on income attributable to noncontrolling interests (see Note 8).
Deferred Gains.
The Company has sold certain equipment to its 50% or less owned companies, entered into vessel sale-leaseback transactions with finance companies, and provided seller financing on sales of its equipment to third parties and its 50% or less owned companies. A portion of the gains realized from these transactions were deferred and recorded in deferred gains and other liabilities in the accompanying condensed consolidated balance sheets. Deferred gain activity related to these transactions for the
six months ended June 30
was as follows (in thousands):
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2017
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2016
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Balance at beginning of period
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$
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82,423
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$
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92,610
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Adjustments to deferred gains arising from asset sales
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7,720
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9,003
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Amortization of deferred gains included in operating expenses as a reduction to rental expense
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(7,242
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)
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(7,367
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)
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Amortization of deferred gains included in gains on asset dispositions and impairments, net
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(1,210
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)
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(1,210
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Other
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—
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(1,697
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)
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Balance at end of period
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$
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81,691
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$
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91,339
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Accumulated Other Comprehensive Loss.
The components of accumulated other comprehensive loss were as follows (in thousands):
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SEACOR Holdings Inc. Stockholders’ Equity
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Noncontrolling Interests
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Foreign
Currency
Translation
Adjustments
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Derivative
Losses on
Cash Flow
Hedges, net
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Other
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Total
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Foreign
Currency
Translation
Adjustments
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Derivative
Losses on
Cash Flow
Hedges, net
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Other
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Other
Comprehensive
Income
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December 31, 2016
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$
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(11,593
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)
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$
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75
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$
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4
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$
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(11,514
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)
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$
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(1,613
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$
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(17
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)
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$
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3
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Distribution of SEACOR Marine stock to shareholders
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10,031
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94
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—
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10,125
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—
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—
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—
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Other comprehensive income (loss)
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1,569
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(260
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)
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(11
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1,298
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153
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13
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(5
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$
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1,459
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Income tax (expense) benefit
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(549
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91
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4
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(454
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—
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—
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—
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(454
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)
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Six Months Ended June 30, 2017
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$
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(542
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)
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$
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—
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$
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(3
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)
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$
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(545
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)
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$
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(1,460
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$
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(4
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$
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(2
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$
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1,005
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Loss Per Share.
Basic loss per common share of SEACOR is computed based on the weighted average number of common shares issued and outstanding during the relevant periods. Diluted loss per common share of SEACOR is computed based on the weighted average number of common shares issued and outstanding plus the effect of potentially dilutive securities through the application of the treasury stock and if-converted methods. Dilutive securities for this purpose assumes restricted stock grants have vested, common shares have been issued pursuant to the exercise of outstanding stock options and common shares have been issued pursuant to the conversion of all outstanding convertible notes.
Computations of basic and diluted loss per common share of SEACOR were as follows (in thousands, except share data):
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Three Months Ended June 30,
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Six Months Ended June 30,
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Net Loss attributable to SEACOR
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Average O/S Shares
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Per Share
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Net Loss Attributable to SEACOR
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Average O/S Shares
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Per Share
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2017
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Basic Weighted Average Common Shares Outstanding
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$
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(32,808
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17,207,831
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$
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(1.91
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$
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(28,725
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17,141,306
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$
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(1.68
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Effect of Dilutive Share Awards:
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Options and Restricted Stock
(1)
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—
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—
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—
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299,055
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Convertible Notes
(2)
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—
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—
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—
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—
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Diluted Weighted Average Common Shares Outstanding
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$
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(32,808
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)
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17,207,831
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$
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(1.91
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$
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(28,725
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17,440,361
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$
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(1.65
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)
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2016
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Basic Weighted Average Common Shares Outstanding
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$
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(55,159
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)
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16,928,722
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$
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(3.26
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)
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$
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(82,345
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)
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16,873,045
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$
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(4.88
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)
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Effect of Dilutive Share Awards:
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Options and Restricted Stock
(3)
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—
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—
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—
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—
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Convertible Notes
(4)
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—
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—
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—
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—
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Diluted Weighted Average Common Shares Outstanding
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$
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(55,159
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)
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16,928,722
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$
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(3.26
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)
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$
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(82,345
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)
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16,873,045
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$
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(4.88
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)
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______________________
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(1)
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For the
three and six months ended
June 30, 2017
, diluted loss per common share of SEACOR excluded
2,644,489
and
1,563,901
, respectively, of certain share awards as the effect of their inclusion in the computation would be anti-dilutive. Diluted weighted average shares outstanding are calculated based on continuing operations.
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(2)
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For the
three and six months ended
June 30, 2017
, diluted loss per common share of SEACOR excluded
2,693,475
and
2,793,144
, respectively, of common shares issuable pursuant to the Company’s
2.5%
Convertible Senior Notes and
2,801,147
and
2,801,147
, respectively, of common shares issuable pursuant to the Company’s
3.0%
Convertible Senior Notes as the effect of their inclusion in the computation would be anti-dilutive.
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(3)
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For the
three and six months ended
June 30, 2016
, diluted loss per common share of SEACOR excluded
2,024,421
and
2,024,421
, respectively, of certain share awards as the effect of their inclusion in the computation would be anti-dilutive.
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(4)
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For the
three and six months ended
June 30, 2016
, diluted loss per common share of SEACOR excluded
2,975,847
and
3,177,620
, respectively, of common shares issuable pursuant to the Company’s
2.5%
Convertible Senior Notes,
1,825,326
and
1,825,326
, respectively, of common shares issuable pursuant to the Company’s
3.0%
Convertible Senior Notes and
2,243,500
and
2,243,500
, respectively, of common shares issuable pursuant to the Company’s
3.75%
Subsidiary Convertible Senior Notes as the effect of their inclusion in the computation would be anti-dilutive.
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New Accounting Pronouncements.
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 early adoption is permitted. The Company will adopt the new standard on January 1, 2018 and expects to use the modified retrospective approach upon adoption. The Company is currently determining the impact, if any, the adoption of the new accounting standard will have on its consolidated financial position, results of operations or cash flows. Principal versus agent considerations of the new standard with respect to the Company’s vessel management services and pooling arrangements may result in a gross presentation of operating revenues and expenses compared with its current net presentation for results from managed and pooled third party equipment.
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.
On August 26, 2016, the FASB issued an amendment to the accounting standard which amends or clarifies guidance on classification of certain transactions in the statement of cash flows, including classification of proceeds from the settlement of insurance claims, debt prepayments, debt extinguishment costs and contingent consideration payments after a business combination. This new standard is effective for the Company as of January 1, 2018 and 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.
On October 24, 2016, the FASB issued a new accounting standard, which requires companies to account for the income tax effects of intercompany sales and transfers of assets other than inventory. The new standard is effective for interim and annual periods beginning after December 31, 2017 and requires a modified retrospective approach to adoption. The Company does not expect the adoption of the new standard will have a material impact on its consolidated financial position, results of operations or cash flows.
On November 17, 2016, the FASB issued an amendment to the accounting standard which requires that restricted cash and restricted cash equivalents be included with cash and cash equivalents when reconciling the beginning-of-period and end-of-period total cash amounts shown on the statement of cash flows. The new standard is effective for fiscal years beginning after December 15, 2018, and interim periods within fiscal years beginning after December 15, 2019. 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.
On January 26, 2017, the FASB issued an amendment to the accounting standard which simplified wording and removes step two of the goodwill impairment test. A goodwill impairment will now be the amount by which a reporting units carrying value exceeds its fair value, not to exceed the carrying amount of goodwill. The FASB also eliminated the requirements for any reporting unit with a zero or negative carrying amount to perform a qualitative assessment and, if it fails that qualitative test, to perform step two of the goodwill test. The new standard is effective for annual or interim goodwill impairment tests in fiscal years beginning after December 15, 2020, with early adoption permitted for interim or annual goodwill impairment tests on testing dates after January 1, 2017. 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.
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2.
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EQUIPMENT ACQUISITIONS AND DISPOSITIONS
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During the
six months ended
June 30, 2017
, capital expenditures were
$81.0 million
and primarily relates to equipment ordered prior to 2017. Equipment deliveries during the
six months ended
June 30, 2017
included
one
liquid tank barge,
one
inland river towboat,
one
U.S.-flag product tanker,
one
U.S.-flag harbor tug and
two
foreign-flag harbor tugs.
During the
six months ended
June 30, 2017
, the Company sold
50
dry-cargo barges,
one
inland river towboat and other property and equipment for net proceeds of
$19.8 million
and gains of
$13.0 million
, of which
$5.3 million
were recognized currently and
$7.7 million
were deferred (see Note 1). Equipment dispositions included the sale-leaseback of
50
dry cargo barges for
$12.5 million
with leaseback terms of
84
months. In addition, the Company recognized previously deferred gains of
$1.2 million
. The Company also recognized a loss of
$0.4 million
related to the total loss of
one
inland river specialty barge.
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3.
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INVESTMENTS, AT EQUITY, AND ADVANCES TO 50% OR LESS OWNED COMPANIES
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SCFCo.
SCFCo was established to operate inland river towboats and inland river dry-cargo barges on the Parana-Paraguay Rivers in South America and a terminal facility at Port Ibicuy, Argentina. During the
six months ended June 30, 2017
, the Company and its partner each made working capital advances of
$0.5 million
in cash to SCFCo, received working capital repayments of
$0.5 million
and converted
$3.0 million
of loans to capital. As of
June 30, 2017
, the Company had outstanding loans and working capital advances to SCFCo of
$29.0 million
.
Trailer Bridge.
Trailer Bridge is an operator of U.S.-flag deck and RORO barges and provides marine transportation services between Jacksonville, Florida, San Juan, Puerto Rico and Puerto Plata, Dominican Republic. The Company provides secured financing to Trailer Bridge and, during the
six months ended June 30, 2017
, the Company provided advances of
$2.0 million
on the secured financing. As of
June 30, 2017
, the outstanding amount on the secured financing was
$6.0 million
, inclusive of accrued and unpaid interest.
SeaJon.
SeaJon owned an articulated tug-barge operating in the Great Lakes trade that was sold to a third party in June 2017. During the
six months ended June 30, 2017
, the Company received dividends of
$12.5 million
and capital distributions of
$3.4 million
from SeaJon.
Kotug.
On April 1, 2017, the Company and Kotug Caribbean Holdings LLC formed Kotug Seabulk Maritime LLC (“Kotug”) to operate four foreign-flag harbor tugs and one foreign-flag ocean liquid tank barge in Freeport, Grand Bahama. The Company has a
50%
ownership interest in Kotug. During the
six months ended June 30, 2017
, the Company and its partner each contributed capital of
$0.3 million
in cash.
VA&E.
VA&E primarily focuses on the global origination, trading and merchandising of sugar, pairing producers and buyers and arranging for the transportation and logistics of the product. The Company provides an uncommitted credit facility of up to
$3.5 million
and a subordinated loan of
$3.5 million
to VA&E. During the
six months ended June 30, 2017
, VA&E borrowed
$3.5 million
on the credit facility. As of
June 30, 2017
, the outstanding balance on the credit facility and subordinated loan was
$7.3 million
including accrued and unpaid interest.
Avion.
Avion is a distributor of aircraft and aircraft related parts. During the
six months ended June 30, 2017
, the Company made advances of
$1.0 million
to Avion. As of
June 30, 2017
, the Company had outstanding advances to Avion of
$4.0 million
.
SEACOR’s Board of Directors previously approved a securities repurchase plan that authorizes the Company to acquire SEACOR common stock, par value
$0.01
per share (“Common Stock”),
7.375%
Senior Notes,
3.0%
Convertible Senior Notes, and
2.5%
Convertible Senior Notes (collectively the “Securities”) through open market purchases, privately negotiated transactions or otherwise, depending on market conditions. As of
June 30, 2017
, the Company’s remaining repurchase authority for the Securities was
$90.7 million
.
3.0%
Convertible Senior Notes.
In connection with the Spin-off, the conversion rate of the
3.0%
Convertible Senior Notes was adjusted to
12.1789
. The Company has reserved the maximum number of shares of Common Stock needed for conversion, or
2,801,147
shares as of
June 30, 2017
.
2.5%
Convertible Senior Notes.
During the
six months ended
June 30, 2017
, the Company repurchased
$48.4 million
in principal amount of its
2.5%
Convertible Senior Notes for total consideration of
$48.6 million
. Consideration of
$47.4 million
was allocated to the settlement of the long-term debt resulting in debt extinguishment gains of
$0.1 million
included in the accompanying condensed consolidated statements of loss. Consideration of
$1.2 million
was allocated to the purchase of the conversion option embedded in the
2.5%
Convertible Senior Notes as included in the accompanying consolidated statements of changes in equity. As of
June 30, 2017
, the remaining principal amount outstanding of
$108.7 million
is included in current liabilities as the holders may require the Company to repurchase these notes on December 19, 2017. Subsequent to
June 30, 2017
, the Company repurchased an additional
$6.5 million
in principal amount of its
2.5%
Convertible Senior Notes for total consideration of
$6.5 million
.
In connection with the Spin-off, the conversion rate of the
2.5%
Convertible Senior Notes was adjusted to
18.4176
. The Company has reserved the maximum number of shares of Common Stock needed for conversion, or
2,001,993
shares as of
June 30, 2017
.
7.375%
Senior Notes.
During the
six months ended
June 30, 2017
, the Company repurchased
$7.6 million
in principal amount of its
7.375%
Senior Notes for
$7.7 million
resulting in debt extinguishment losses of
$0.2 million
included in the accompanying condensed consolidated statements of loss. The outstanding principal amount of these notes outstanding was
$153.1 million
as of
June 30, 2017
.
SEA-Vista Credit Facility.
During the
six months ended
June 30, 2017
, SEA-Vista borrowed
$27.9 million
and repaid
$30.9 million
on the Revolving Loan and made scheduled repayments of
$1.8 million
on the Term A-1 Loan. As of
June 30, 2017
, SEA-Vista had
$17.0 million
of remaining borrowing capacity under the Revolving Loan. Subsequent to
June 30, 2017
, SEA-Vista borrowed
$11.0 million
on the Revolving Loan.
ICP Revolving Credit Facility.
During June 2017, ICP terminated its credit facility, which had no outstanding balance. For all periods presented herein, the Company has reported the historical financial position, results of operations and cash flows of ICP as discontinued operations (see Notes 1 and 13).
ISH Credit Facility.
On July 3, 2017, ISH emerged from bankruptcy pursuant to the Plan. In conjunction with the emergence ISH entered into a
$25.0 million
credit facility that matures in July 2020. The facility consists of two tranches: (i) a
$5.0 million
revolving credit facility (the “ISH Revolving Loan”) and (ii) a
$20.0 million
term loan (the “ISH Term Loan”). The proceeds from the facility will be used for general working capital purposes and contributions to ISH’s creditors in accordance with the Plan. During July 2017, ISH drew
$20.0 million
under ISH Term Loan and
$5.0 million
under ISH Revolving Loan and repaid
$6.5 million
on ISH Term Loan and
$3.5 million
on ISH Revolving Loan.
Both loans bear interest at a variable rate either determined by reference to the LIBOR rate multiplied by the Statutory Reserve Rate or Prime Rate plus an applicable rate. A quarterly fee is payable on the unused commitment of the ISH Revolving Loan. Beginning September 30, 2017, ISH is required to make quarterly prepayments on the ISH Term Loan of
$0.7 million
. Commencing with the calendar year ending December 31, 2018, ISH is required to make annual prepayments on the ISH Term Loan in an amount equal to 50% of excess cash flow as defined.
The ISH Credit Facility contains various financial maintenance and restrictive covenants including indebtedness to EBITDA and adjusted EBITDA to interest expense maintenance covenants, as defined. The ISH Credit Facility is non-recourse to SEACOR and its subsidiaries other than ISH.
Other.
During the
six months ended
June 30, 2017
, the Company made scheduled payments on other long-term debt of
$0.2 million
.
Letters of Credit.
As of
June 30, 2017
, the Company had outstanding letters of credit totaling
$26.2 million
with various expiration dates through
2019
, including
$16.7 million
that have been issued on behalf of SEACOR Marine.
Guarantees.
The Company has guaranteed the payments of amounts owed under certain sale-leaseback transactions, equipment financing and multi-employer pension obligations on behalf of SEACOR Marine. As of
June 30, 2017
, these guarantees on behalf of SEACOR Marine totaled
$90.9 million
and decline as payments are made on the outstanding obligations.
The Company earns a fee of 50 basis points per annum on these guarantees and outstanding letters of credit. For the
three and six months ended
June 30, 2017
, the Company earned fees of
$0.2 million
and
$0.4 million
, respectively. For the
three and six months ended
June 30, 2016
, the Company earned fees of
$0.2 million
and
$0.4 million
, respectively.
|
|
|
|
5.
|
DERIVATIVE INSTRUMENTS AND HEDGING STRATEGIES
|
Cash Flow Hedges.
SeaJon, one of the Company’s 50% or less owned companies, had an interest rate swap agreement designated as a cash flow hedge that matured in April 2017. This interest rate swap called for SeaJon to pay a fixed interest rate of
2.79%
on the amortized notional value and receive a variable interest rate based on LIBOR on the amortized notional value. By entering into this interest rate swap agreement, SeaJon converted the variable LIBOR component of certain of its outstanding borrowings to a fixed interest rate.
Other Derivative Instruments.
The Company recognized gains (losses) on derivative instruments not designated as hedging instruments for the
six months ended June 30
as follows (in thousands):
|
|
|
|
|
|
|
|
|
|
|
|
|
2017
|
|
2016
|
|
Exchange option liability on subsidiary convertible senior notes
|
$
|
19,436
|
|
|
$
|
(2,560
|
)
|
|
Forward currency exchange, option and future contracts
|
291
|
|
|
(107
|
)
|
|
Exchange traded commodity swap, option and future contracts
|
—
|
|
|
2
|
|
|
|
$
|
19,727
|
|
|
$
|
(2,665
|
)
|
The exchange option liability on subsidiary convertible senior notes terminated as a consequence of the Spin-off.
The Company enters and settles forward currency exchange, option and future contracts with respect to various foreign currencies. These contracts enable the Company to buy currencies in the future at fixed exchange rates, which could offset possible consequences of changes in currency exchange rates with respect to the Company’s business conducted outside of the United States. As of
June 30, 2017
, there were no outstanding forward currency exchange contracts.
|
|
|
|
6.
|
FAIR VALUE MEASUREMENTS
|
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 financial assets and liabilities as of
June 30, 2017
that are measured at fair value on a recurring basis were as follows (in thousands):
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Level 1
|
|
Level 2
|
|
Level 3
|
|
ASSETS
|
|
|
|
|
|
|
Marketable securities
(1)
|
$
|
75,071
|
|
|
$
|
—
|
|
|
$
|
—
|
|
|
Construction reserve funds
|
65,429
|
|
|
—
|
|
|
—
|
|
______________________
|
|
|
|
(1)
|
Marketable security losses, net include unrealized
losses
of
$21.6 million
and
$21.6 million
for the
three months ended June 30, 2017
and
2016
, respectively, related to marketable security positions held by the Company as of
June 30, 2017
. Marketable security losses, net include unrealized
losses
of
$0.3 million
and
$43.3 million
for the
six months ended June 30, 2017
and
2016
, respectively, related to marketable security positions held by the Company as of
June 30, 2017
.
|
The estimated fair values of the Company’s other financial assets and liabilities as of
June 30, 2017
were as follows (in thousands):
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Estimated Fair Value
|
|
|
Carrying
Amount
|
|
Level 1
|
|
Level 2
|
|
Level 3
|
|
ASSETS
|
|
|
|
|
|
|
|
|
Cash, cash equivalents and restricted cash
|
$
|
225,414
|
|
|
$
|
225,414
|
|
|
$
|
—
|
|
|
$
|
—
|
|
|
Investments, at cost, in 50% or less owned companies (included in other assets)
|
4,300
|
|
|
see below
|
|
|
|
|
|
Notes receivable from third parties (included in other receivables and other assets)
|
12,823
|
|
|
10,881
|
|
|
1,844
|
|
|
—
|
|
|
LIABILITIES
|
|
|
|
|
|
|
|
|
Long-term debt, including current portion
(1)
|
$
|
741,187
|
|
|
$
|
—
|
|
|
$
|
746,682
|
|
|
$
|
—
|
|
______________________
|
|
|
|
(1)
|
The estimated fair value includes the embedded conversion options on the Company’s
2.5%
and
3.0%
Convertible Senior Notes.
|
The carrying value of cash, cash equivalents and restricted cash approximates fair value. The fair value of the Company’s long-term debt and notes receivable from third parties was estimated based upon quoted market prices or by using discounted cash flow analyses based on estimated current rates for similar types of arrangements. It was not practicable to estimate the fair value of certain of the Company’s investments, at cost, 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.
SEACOR’s Board of Directors previously approved a securities repurchase plan that authorizes the Company to acquire its Securities through open market purchases, privately negotiated transactions or otherwise, depending on market conditions. As of
June 30, 2017
, the Company’s repurchase authority for the Securities was
$90.7 million
.
During the
six months ended
June 30, 2017
, the Company purchased
110,298
shares of Common Stock for treasury for an aggregate purchase price of
$7.6 million
from its employees to cover their tax withholding obligations related to share award transactions. These shares were purchased in accordance with the terms of the Company’s Share Incentive Plans and not pursuant to the repurchase authorization granted by SEACOR’s Board of Directors.
|
|
|
|
8.
|
NONCONTROLLING INTERESTS IN SUBSIDIARIES
|
Noncontrolling interests in the Company’s consolidated subsidiaries were as follows (in thousands):
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Noncontrolling Interests
|
|
June 30, 2017
|
|
December 31, 2016
|
|
Inland River Services:
|
|
|
|
|
|
|
|
|
Other
|
3.0
|
%
|
–
|
51.8%
|
|
$
|
963
|
|
|
$
|
980
|
|
|
Shipping Services:
|
|
|
|
|
|
|
|
|
SEA-Vista
|
49%
|
|
118,798
|
|
|
106,054
|
|
|
Discontinued Operations
|
1.8
|
%
|
–
|
50.0%
|
|
14,673
|
|
|
28,190
|
|
|
Other
|
5.0
|
%
|
–
|
14.6%
|
|
151
|
|
|
152
|
|
|
|
|
|
|
|
$
|
134,585
|
|
|
$
|
135,376
|
|
SEA-Vista.
SEA-Vista owns and operates the Company’s fleet of U.S.-flag product tankers used in the U.S. coastwise trade of crude oil, petroleum and specialty chemical products. As of
June 30, 2017
, the net assets of SEA-Vista were
$242.4 million
. During the
six months ended
June 30, 2017
, the net income of SEA-Vista was
$26.0 million
, of which
$12.7 million
was attributable to noncontrolling interests. During the
six months ended
June 30, 2016
, the net income of SEA-Vista was
$21.7 million
, of which
$10.6 million
was attributable to noncontrolling interests.
Discontinued Operations.
As of December 31, 2016, discontinued operations primarily consisted of noncontrolling interests in Windcat Workboats, a subsidiary of SEACOR Marine, and noncontrolling interests in ICP. As of
June 30, 2017
, discontinued operations consisted of noncontrolling interests in ICP (see Notes 1 and 13).
|
|
|
|
9.
|
MULTI-EMPLOYER PENSION PLANS
|
AMOPP.
During the
six months ended June 30, 2017
, the Company received notification from the AMOPP that the Company’s withdrawal liability as of September 30, 2016 would have been
$28.6 million
based on an actuarial valuation performed as of that date. That liability may change in future years based on various factors, primarily employee census. As of
June 30, 2017
, the Company has no intention to withdraw from the AMOPP and no deficit amounts have been invoiced. Depending upon the results of the future actuarial valuations and the ten-year rehabilitation plan, it is possible that the AMOPP will experience further funding deficits, requiring the Company to recognize additional payroll related operating expenses in the periods invoices are received or contribution levels are increased.
10. SHARE BASED COMPENSATION
Transactions in connection with the Company’s share based compensation plans during the
six months ended
June 30, 2017
were as follows:
|
|
|
|
|
|
|
Director stock awards granted
|
750
|
|
|
Employee Stock Purchase Plan (“ESPP”) shares issued
|
14,624
|
|
|
Restricted stock awards granted
|
144,750
|
|
|
Restricted stock awards canceled
|
2,117
|
|
|
Stock Option Activities:
|
|
|
Outstanding as of December 31, 2016
|
1,639,865
|
|
|
Granted
(1)
|
916,258
|
|
|
Exercised
|
(138,648
|
)
|
|
Forfeited
|
(3,374
|
)
|
|
Expired
|
(21,442
|
)
|
|
Outstanding as of June 30, 2017
|
2,392,659
|
|
|
Shares available for future grants and ESPP purchases as of June 30, 2017
(2)
|
504,570
|
|
______________________
|
|
|
|
(1)
|
On June 2, 2017, the Company granted
846,353
stock options to existing option holders under make-whole provisions upon the Spin-off of SEACOR Marine.
|
|
|
|
|
(2)
|
Shares available for future grants and ESPP purchases were adjusted on June 2, 2017 to reflect the Spin-off of SEACOR Marine in accordance with make-whole provisions of the plans.
|
|
|
|
|
11.
|
COMMITMENTS AND CONTINGENCIES
|
The Company's capital commitments as of
June 30, 2017
by year of expected payment were as follows (in thousands):
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Remainder of 2017
|
|
2018
|
|
2019
|
|
Total
|
|
Shipping Services
|
$
|
8,356
|
|
|
$
|
2,259
|
|
|
$
|
—
|
|
|
$
|
10,615
|
|
|
Inland River Services
|
11,780
|
|
|
926
|
|
|
463
|
|
|
13,169
|
|
|
|
$
|
20,136
|
|
|
$
|
3,185
|
|
|
$
|
463
|
|
|
$
|
23,784
|
|
Shipping Services’ capital commitments included
one
U.S.-flag chemical and petroleum articulated tug-barge and
two
U.S.-flag harbor tugs. Inland River Services’ capital commitments included
two
inland river towboats and other equipment and improvements.
On December 15, 2010, ORM and NRC were named as defendants in
one
of the several “master complaints” filed in the overall multi-district litigation relating to the
Deepwater Horizon
oil spill response and clean-up in the Gulf of Mexico, which is currently pending in the U.S. District Court for the Eastern District of Louisiana (the “MDL”). The “B3” master complaint naming ORM and NRC asserts various claims on behalf of a putative class against multiple defendants concerning the clean-up activities generally and the use of dispersants specifically. Both prior to and following the filing of the aforementioned master complaint, individual civil actions naming the Company, ORM, and/or NRC alleging B3 exposure-based injuries and/or damages were consolidated with the MDL and stayed pursuant to court order, discussed in turn below. The Company has continually taken the position that all of the B3 claims asserted against ORM and NRC have no merit. On February 16, 2016, all but
eleven
B3 claims against ORM and NRC were dismissed with prejudice, whether by joinder in the master complaint, individual complaint, or otherwise (the “B3 Dismissal Order”). On August 2, 2016, the Court granted an omnibus motion for summary judgment as it concerns ORM and NRC in its entirety, dismissing the remaining eleven plaintiffs’ against ORM and NRC with prejudice (the “Remaining Eleven Plaintiffs’ Dismissal Order”).
As noted above, various civil actions concerning the
Deepwater Horizon
clean-up have been consolidated with the MDL, although a number of them have been dismissed or otherwise resolved. A summary of the remaining claims is as follows:
|
|
|
|
•
|
On October 3, 2012, ORM and NRC were served with a Rule 14(c) Third-Party Complaint by Jambon Supplier II, L.L.C. and Jambon Marine Holdings L.L.C. in their Limitation of Liability action, in the Matter of
Jambon Supplier II, L.L.C., et al.
, No. 2:12-CV-00426 (E.D. La.) (the “
Jambon
Action”). This Third-Party Complaint alleges that if claimant David Dinwiddie, who served as a clean-up crewmember aboard the
M/V JAMBON SUPPLIER
II
vessel during the clean-up efforts, was injured as a result of his exposure to dispersants and chemicals during the course and scope of his employment, then said injuries were caused by the third-party defendants. The
Jambon
Action remains stayed.
|
|
|
|
|
•
|
On April 8, 2013, the Company, ORM, and NRC were named as defendants in
William and Dianna Fitzgerald v. BP Exploration et al.
, No. 2:13-CV-00650 (E.D. La.) (the “
Fitzgerald
Action”), which is a suit by a husband and wife whose son allegedly participated in the clean-up effort and became ill as a result of his exposure to oil and dispersants. While the decedent in the
Fitzgerald
Action’s claims against ORM and NRC were dismissed by virtue of the Remaining Eleven Plaintiffs’ Dismissal Order, the claim as against the Company remains stayed. Following a status conference with the Court on February 17, 2017, the Court issued several new pretrial orders in connection with the remaining claims in the MDL.
|
On July 18, 2017, the Court issued an order dismissing all remaining “B3” claims in the MDL with prejudice, with the exception of certain claims specifically listed on an exhibit annexed to the order (the “Master MDL B3 Dismissal Order”). Mr. Dinwiddie, the claimant at issue in the
Jambon
Action, was not listed in this exhibit to the Master MDL B3 Dismissal Order, and so this claim against ORM and NRC has been dismissed with prejudice. Nathan Fitzgerald, the decedent in the
Fitzgerald
Action, was listed, and so this claim against the Company remains pending. The Company is unable to estimate the potential exposure, if any, resulting from these matters, to the extent they remain viable, but believes they are without merit and does not expect that they will have a material effect on its consolidated financial position, results of operations or cash flows.
On February 18, 2011, Triton Asset Leasing GmbH, Transocean Holdings LLC, Transocean Offshore Deepwater Drilling Inc., and Transocean Deepwater Inc. (collectively “Transocean”) named ORM and NRC as third-party defendants in a Rule 14(c) Third-Party Complaint in Transocean’s own Limitation of Liability Act action, which is part of the overall MDL, tendering to ORM and NRC the claims in the referenced master complaint that have already been asserted against ORM and NRC. Transocean, Cameron International Corporation (“Cameron”), Halliburton Energy Services, Inc., and M-I L.L.C. (“M-I”) also filed cross-claims against ORM and NRC for contribution and tort indemnity should they be found liable for any damages in Transocean's Limitation of Liability Act action and ORM and NRC asserted counterclaims against those same parties for identical relief. The remainder of the aforementioned cross-claims in Transocean’s limitation action remain pending, although the Company believes that the potential exposure, if any, resulting from these matters has been reduced as a result of the various developments in the MDL, including the B3 Dismissal Order and Remaining Eleven Plaintiffs’ Dismissal Order, and does not expect that these matters will have a material effect on its consolidated financial position, results of operations or cash flows.
On November 16, 2012,
668
individuals who served as beach clean-up workers in Escambia County, Florida during the
Deepwater Horizon
oil spill response commenced a civil action in the Circuit Court for the First Judicial Circuit of Florida, in and for Escambia County,
Abney et al. v. Plant Performance Services, LLC et al.
, No. 2012-CA-002947, in which they allege, among other things, that ORM and other defendants engaged in the contamination of Florida waters and beaches in violation of Florida Statutes Chapter 376 and injured the Plaintiffs by exposing them to dispersants during the course and scope of their employment. This case was removed to federal court and ultimately consolidated with the MDL on April 2, 2013. On April 22, 2013, a companion case to this matter was filed in the U.S. District Court for the Northern District of Florida,
Abood et al. v. Plant Performance Services, LLC et al.
, No. 3:13-CV-00284 (N.D. Fla.), which alleges identical allegations against the same parties but names an additional
174
Plaintiffs, all of whom served as clean-up workers in various Florida counties during the
Deepwater Horizon
oil spill response. This case was consolidated with the MDL on May 10, 2013. By court order, both of these matters were then stayed since they were consolidated with the MDL. The names of only a very small percentage of the claimants in these two matters appear to be listed on the exhibit to the Master MDL B3 Dismissal Order. The Company continues to evaluate the impact of the developments in the MDL, including the settlements discussed below, on these cases, but believes that the potential exposure, if any, resulting from these matters has been reduced as a result of these developments and does not expect that these matters will have a material effect on its consolidated financial position, results of operations or cash flows.
Separately, on March 2, 2012, the Court announced that BP Exploration and BP America Production Company (“BP America”) (collectively “BP”) and the Plaintiffs had reached an agreement on the terms of two proposed class action settlements that will resolve, among other things, Plaintiffs’ economic loss claims and clean-up related claims against BP. Both settlements were granted final approval by the Court, all appeals have concluded, and the deadline for submitting claims with respect to both settlements has passed. Although neither the Company, ORM, nor NRC are parties to the settlement agreements, the Company, ORM, and NRC are listed as released parties on the releases accompanying both settlement agreements. Consequently, class members who did not file timely requests for exclusion will be barred from pursuing economic loss, property damage, personal injury, medical monitoring, and/or other released claims against the Company, ORM, and NRC. The Company believes these settlements have reduced the potential exposure, if any, in connection with the various cases relating to the
Deepwater Horizon
oil spill response and clean-up and continues to evaluate the settlements’ impacts on these cases.
In the course of the Company’s business, it may agree to indemnify the counterparty to an agreement. If the indemnified party makes a successful claim for indemnification, the Company would be required to reimburse that party in accordance with the terms of the indemnification agreement. Indemnification agreements generally are subject to threshold amounts, specified claim periods and other restrictions and limitations.
In connection with the SES Business Transaction, the Company remains contingently liable for certain obligations, including potential liabilities relating to work performed in connection with the
Deepwater Horizon
oil spill response. Pursuant
to the agreement governing the sale, the Company’s potential liability to the purchaser may not exceed the consideration received by the Company for the SES Business Transaction. The Company is currently indemnified under contractual agreements with BP for the potential liabilities relating to work performed in connection with the
Deepwater Horizon
oil spill response.
In the normal course of its business, the Company becomes involved in various other litigation matters including, among other things, claims by third parties for alleged property damages and personal injuries. Management has used estimates in determining the Company’s potential exposure to these matters and has recorded reserves in its financial statements related thereto where appropriate. It is possible that a change in the Company’s estimates of that exposure could occur, but the Company does not expect such changes in estimated costs would have a material effect on the Company’s consolidated financial position, results of operations or cash flows.
12. SEGMENT INFORMATION
Accounting standards require public business enterprises to report information about each of their operating business segments that exceed certain quantitative thresholds or meet certain other reporting requirements. Operating business segments have been defined as components of an enterprise about which separate financial information is available and is evaluated regularly by the chief operating decision maker in deciding how to allocate resources and in assessing performance. Certain reclassifications of prior period information have been made to conform the current period’s reportable segment presentation as a result of the Company’s presentation of discontinued operations (see Notes 1 and 13). The Company’s basis of measurement of segment profit or loss is as previously defined in the Company’s Annual report on Form 10-K for the year ended
December 31, 2016
.
The Company’s segment presentation and basis of measurement of segment profit or loss are as previously described in the Company’s Annual Report on Form 10-K for the year ended
December 31, 2016
. The following tables summarize the operating results, capital expenditures and assets of the Company’s reportable segments.
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Inland
River
Services
$’000
|
|
Shipping
Services
$’000
|
|
Witt
O’Brien’s
$’000
|
|
Other
$’000
|
|
Corporate
and
Eliminations
$’000
|
|
Total
$’000
|
|
For the three months ended June 30, 2017
|
|
|
|
|
|
|
|
|
|
|
|
|
Operating Revenues:
|
|
|
|
|
|
|
|
|
|
|
|
|
External customers
|
37,644
|
|
|
72,023
|
|
|
6,008
|
|
|
116
|
|
|
—
|
|
|
115,791
|
|
|
Intersegment
|
—
|
|
|
—
|
|
|
53
|
|
|
—
|
|
|
(53
|
)
|
|
—
|
|
|
|
37,644
|
|
|
72,023
|
|
|
6,061
|
|
|
116
|
|
|
(53
|
)
|
|
115,791
|
|
|
Costs and Expenses:
|
|
|
|
|
|
|
|
|
|
|
|
|
Operating
|
31,902
|
|
|
33,850
|
|
|
4,043
|
|
|
—
|
|
|
(109
|
)
|
|
69,686
|
|
|
Administrative and general
|
4,725
|
|
|
8,028
|
|
|
2,462
|
|
|
225
|
|
|
10,100
|
|
|
25,540
|
|
|
Depreciation and amortization
|
6,483
|
|
|
10,115
|
|
|
205
|
|
|
—
|
|
|
666
|
|
|
17,469
|
|
|
|
43,110
|
|
|
51,993
|
|
|
6,710
|
|
|
225
|
|
|
10,657
|
|
|
112,695
|
|
|
Gains on Asset Dispositions, Net
|
5,891
|
|
|
6
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
5,897
|
|
|
Operating Income (Loss)
|
425
|
|
|
20,036
|
|
|
(649
|
)
|
|
(109
|
)
|
|
(10,710
|
)
|
|
8,993
|
|
|
Other Income (Expense):
|
|
|
|
|
|
|
|
|
|
|
|
|
Derivative gains, net
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
16,897
|
|
|
16,897
|
|
|
Foreign currency gains (losses), net
|
(1,630
|
)
|
|
8
|
|
|
23
|
|
|
—
|
|
|
129
|
|
|
(1,470
|
)
|
|
Other, net
|
—
|
|
|
421
|
|
|
—
|
|
|
—
|
|
|
3
|
|
|
424
|
|
|
Equity in Earnings (Losses) of 50% or Less Owned Companies, Net of Tax
|
(1,264
|
)
|
|
5,621
|
|
|
(20
|
)
|
|
(2,004
|
)
|
|
—
|
|
|
2,333
|
|
|
Segment Profit (Loss)
|
(2,469
|
)
|
|
26,086
|
|
|
(646
|
)
|
|
(2,113
|
)
|
|
|
|
|
|
Other Income (Expense) not included in Segment Profit (Loss)
|
|
|
|
|
|
|
|
|
|
(31,297
|
)
|
|
Less Equity Earnings included in Segment Profit (Loss)
|
|
|
|
|
|
|
|
|
|
(2,333
|
)
|
|
Loss Before Taxes, Equity Earnings and Discontinued Operations
|
|
|
|
|
|
|
|
(6,453
|
)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Inland
River
Services
$’000
|
|
Shipping
Services
$’000
|
|
Witt
O’Brien’s
$’000
|
|
Other
$’000
|
|
Corporate
and
Eliminations
$’000
|
|
Total
$’000
|
|
For the six months ended June 30, 2017
|
|
|
|
|
|
|
|
|
|
|
|
|
Operating Revenues:
|
|
|
|
|
|
|
|
|
|
|
|
|
External customers
|
80,313
|
|
|
139,662
|
|
|
13,998
|
|
|
232
|
|
|
—
|
|
|
234,205
|
|
|
Intersegment
|
—
|
|
|
—
|
|
|
71
|
|
|
—
|
|
|
(71
|
)
|
|
—
|
|
|
|
80,313
|
|
|
139,662
|
|
|
14,069
|
|
|
232
|
|
|
(71
|
)
|
|
234,205
|
|
|
Costs and Expenses:
|
|
|
|
|
|
|
|
|
|
|
|
|
Operating
|
64,471
|
|
|
71,204
|
|
|
9,415
|
|
|
—
|
|
|
(192
|
)
|
|
144,898
|
|
|
Administrative and general
|
8,517
|
|
|
15,116
|
|
|
5,681
|
|
|
379
|
|
|
18,725
|
|
|
48,418
|
|
|
Depreciation and amortization
|
13,075
|
|
|
19,276
|
|
|
407
|
|
|
—
|
|
|
1,430
|
|
|
34,188
|
|
|
|
86,063
|
|
|
105,596
|
|
|
15,503
|
|
|
379
|
|
|
19,963
|
|
|
227,504
|
|
|
Gains (Losses) on Asset Dispositions and Impairments, Net
|
6,124
|
|
|
(415
|
)
|
|
—
|
|
|
—
|
|
|
—
|
|
|
5,709
|
|
|
Operating Income (Loss)
|
374
|
|
|
33,651
|
|
|
(1,434
|
)
|
|
(147
|
)
|
|
(20,034
|
)
|
|
12,410
|
|
|
Other Income (Expense):
|
|
|
|
|
|
|
|
|
|
|
|
|
Derivative gains, net
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
19,727
|
|
|
19,727
|
|
|
Foreign currency gains (losses), net
|
(262
|
)
|
|
3
|
|
|
33
|
|
|
—
|
|
|
155
|
|
|
(71
|
)
|
|
Other, net
|
—
|
|
|
59
|
|
|
—
|
|
|
(300
|
)
|
|
245
|
|
|
4
|
|
|
Equity in Earnings (Losses) of 50% or Less Owned Companies, Net of Tax
|
(3,642
|
)
|
|
6,657
|
|
|
137
|
|
|
(711
|
)
|
|
—
|
|
|
2,441
|
|
|
Segment Profit (Loss)
|
(3,530
|
)
|
|
40,370
|
|
|
(1,264
|
)
|
|
(1,158
|
)
|
|
|
|
|
|
Other Income (Expense) not included in Segment Profit (Loss)
|
|
|
|
|
|
|
|
|
|
(18,631
|
)
|
|
Less Equity Earnings included in Segment Profit (Loss)
|
|
|
|
|
|
|
|
|
|
(2,441
|
)
|
|
Income Before Taxes, Equity Earnings and Discontinued Operations
|
|
|
|
|
|
|
|
13,439
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Capital Expenditures
|
22,754
|
|
|
58,018
|
|
|
60
|
|
|
—
|
|
|
155
|
|
|
80,987
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
As of June 30, 2017
|
|
|
|
|
|
|
|
|
|
|
|
|
Property and Equipment:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Historical cost
|
421,117
|
|
|
888,563
|
|
|
1,227
|
|
|
—
|
|
|
29,493
|
|
|
1,340,400
|
|
|
Accumulated depreciation
|
(170,162
|
)
|
|
(277,257
|
)
|
|
(892
|
)
|
|
—
|
|
|
(19,614
|
)
|
|
(467,925
|
)
|
|
|
250,955
|
|
|
611,306
|
|
|
335
|
|
|
—
|
|
|
9,879
|
|
|
872,475
|
|
|
Construction in progress
|
17,598
|
|
|
115,939
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
133,537
|
|
|
Net property and equipment
|
268,553
|
|
|
727,245
|
|
|
335
|
|
|
—
|
|
|
9,879
|
|
|
1,006,012
|
|
|
Investments, at Equity, and Advances to 50% or Less Owned Companies
|
66,956
|
|
|
48,486
|
|
|
663
|
|
|
58,001
|
|
|
—
|
|
|
174,106
|
|
|
Inventories
|
1,517
|
|
|
744
|
|
|
183
|
|
|
—
|
|
|
—
|
|
|
2,444
|
|
|
Goodwill
|
2,391
|
|
|
1,852
|
|
|
28,506
|
|
|
—
|
|
|
—
|
|
|
32,749
|
|
|
Intangible Assets
|
11,238
|
|
|
—
|
|
|
7,693
|
|
|
—
|
|
|
—
|
|
|
18,931
|
|
|
Other current and long-term assets, excluding cash and near cash assets
(1)
|
42,253
|
|
|
24,367
|
|
|
13,190
|
|
|
11,427
|
|
|
26,792
|
|
|
118,029
|
|
|
Segment Assets
|
392,908
|
|
|
802,694
|
|
|
50,570
|
|
|
69,428
|
|
|
|
|
|
|
Cash and near cash assets
(1)
|
|
|
|
|
|
|
|
|
|
|
365,914
|
|
|
Discontinued Operations
|
|
|
|
|
|
|
|
|
|
|
55,700
|
|
|
Total Assets
|
|
|
|
|
|
|
|
|
|
|
1,773,885
|
|
______________________
|
|
|
|
(1)
|
Cash and near cash assets includes cash, cash equivalents, restricted cash, marketable securities and construction reserve funds.
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Inland
River
Services
$’000
|
|
Shipping
Services
$’000
|
|
Witt
O’Brien’s
$’000
|
|
Other
$’000
|
|
Corporate
and
Eliminations
$’000
|
|
Total
$’000
|
|
For the three months ended June 30, 2016
|
|
|
|
|
|
|
|
|
|
|
|
|
Operating Revenues:
|
|
|
|
|
|
|
|
|
|
|
|
|
External customers
|
33,814
|
|
|
55,620
|
|
|
10,098
|
|
|
115
|
|
|
—
|
|
|
99,647
|
|
|
Intersegment
|
—
|
|
|
—
|
|
|
48
|
|
|
—
|
|
|
(48
|
)
|
|
—
|
|
|
|
33,814
|
|
|
55,620
|
|
|
10,146
|
|
|
115
|
|
|
(48
|
)
|
|
99,647
|
|
|
Costs and Expenses:
|
|
|
|
|
|
|
|
|
|
|
|
|
Operating
|
27,446
|
|
|
30,269
|
|
|
6,427
|
|
|
—
|
|
|
(115
|
)
|
|
64,027
|
|
|
Administrative and general
|
3,777
|
|
|
7,337
|
|
|
3,475
|
|
|
174
|
|
|
6,598
|
|
|
21,361
|
|
|
Depreciation and amortization
|
6,254
|
|
|
7,415
|
|
|
448
|
|
|
—
|
|
|
926
|
|
|
15,043
|
|
|
|
37,477
|
|
|
45,021
|
|
|
10,350
|
|
|
174
|
|
|
7,409
|
|
|
100,431
|
|
|
Gains on Asset Dispositions, Net
|
2,580
|
|
|
6
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
2,586
|
|
|
Operating Income (Loss)
|
(1,083
|
)
|
|
10,605
|
|
|
(204
|
)
|
|
(59
|
)
|
|
(7,457
|
)
|
|
1,802
|
|
|
Other Income (Expense):
|
|
|
|
|
|
|
|
|
|
|
|
|
Derivative losses, net
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
(2,574
|
)
|
|
(2,574
|
)
|
|
Foreign currency gains (losses), net
|
1,018
|
|
|
(6
|
)
|
|
(74
|
)
|
|
1
|
|
|
(142
|
)
|
|
797
|
|
|
Other, net
|
(4
|
)
|
|
(928
|
)
|
|
—
|
|
|
(6,723
|
)
|
|
3
|
|
|
(7,652
|
)
|
|
Equity in Earnings (Losses) of 50% or Less Owned Companies, Net of Tax
|
(1,677
|
)
|
|
(1,591
|
)
|
|
100
|
|
|
(679
|
)
|
|
—
|
|
|
(3,847
|
)
|
|
Segment Profit (Loss)
|
(1,746
|
)
|
|
8,080
|
|
|
(178
|
)
|
|
(7,460
|
)
|
|
|
|
|
|
Other Income (Expense) not included in Segment Profit (Loss)
|
|
|
|
|
|
|
|
|
|
(25,923
|
)
|
|
Less Equity Losses included in Segment Profit (Loss)
|
|
|
|
|
|
|
|
|
|
3,847
|
|
|
Loss Before Taxes, Equity Losses and Discontinued Operations
|
|
|
|
|
|
|
|
(33,550
|
)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Inland
River
Services
$’000
|
|
Shipping
Services
$’000
|
|
Witt
O’Brien’s
$’000
|
|
Other
$’000
|
|
Corporate
and
Eliminations
$’000
|
|
Total
$’000
|
|
For the six months ended June 30, 2016
|
|
|
|
|
|
|
|
|
|
|
|
|
Operating Revenues:
|
|
|
|
|
|
|
|
|
|
|
|
|
External customers
|
73,428
|
|
|
112,675
|
|
|
18,346
|
|
|
250
|
|
|
—
|
|
|
204,699
|
|
|
Intersegment
|
—
|
|
|
—
|
|
|
84
|
|
|
—
|
|
|
(84
|
)
|
|
—
|
|
|
|
73,428
|
|
|
112,675
|
|
|
18,430
|
|
|
250
|
|
|
(84
|
)
|
|
204,699
|
|
|
Costs and Expenses:
|
|
|
|
|
|
|
|
|
|
|
|
|
Operating
|
57,564
|
|
|
57,503
|
|
|
12,232
|
|
|
—
|
|
|
(236
|
)
|
|
127,063
|
|
|
Administrative and general
|
7,689
|
|
|
14,255
|
|
|
7,448
|
|
|
424
|
|
|
14,221
|
|
|
44,037
|
|
|
Depreciation and amortization
|
13,391
|
|
|
13,977
|
|
|
903
|
|
|
—
|
|
|
1,870
|
|
|
30,141
|
|
|
|
78,644
|
|
|
85,735
|
|
|
20,583
|
|
|
424
|
|
|
15,855
|
|
|
201,241
|
|
|
Gains (Losses) on Asset Dispositions, Net
|
3,185
|
|
|
—
|
|
|
(2
|
)
|
|
—
|
|
|
—
|
|
|
3,183
|
|
|
Operating Income (Loss)
|
(2,031
|
)
|
|
26,940
|
|
|
(2,155
|
)
|
|
(174
|
)
|
|
(15,939
|
)
|
|
6,641
|
|
|
Other Income (Expense):
|
|
|
|
|
|
|
|
|
|
|
|
|
Derivative losses, net
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
(2,665
|
)
|
|
(2,665
|
)
|
|
Foreign currency gains (losses), net
|
2,455
|
|
|
(9
|
)
|
|
(100
|
)
|
|
—
|
|
|
48
|
|
|
2,394
|
|
|
Other, net
|
(4
|
)
|
|
(927
|
)
|
|
—
|
|
|
(6,723
|
)
|
|
5
|
|
|
(7,649
|
)
|
|
Equity in Earnings (Losses) of 50% or Less Owned Companies, Net of Tax
|
(4,455
|
)
|
|
(1,565
|
)
|
|
186
|
|
|
(223
|
)
|
|
—
|
|
|
(6,057
|
)
|
|
Segment Profit (Loss)
|
(4,035
|
)
|
|
24,439
|
|
|
(2,069
|
)
|
|
(7,120
|
)
|
|
|
|
|
|
Other Income (Expense) not included in Segment Profit (Loss)
|
|
|
|
|
|
|
|
|
|
(49,461
|
)
|
|
Less Equity Losses included in Segment Profit (Loss)
|
|
|
|
|
|
|
|
|
|
6,057
|
|
|
Loss Before Taxes, Equity Losses and Discontinued Operations
|
|
|
|
|
|
|
|
(50,740
|
)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Capital Expenditures
|
7,705
|
|
|
148,410
|
|
|
—
|
|
|
—
|
|
|
(125
|
)
|
|
155,990
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
As of June 30, 2016
|
|
|
|
|
|
|
|
|
|
|
|
|
Property and Equipment:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Historical cost
|
386,216
|
|
|
588,649
|
|
|
2,861
|
|
|
—
|
|
|
30,711
|
|
|
1,008,437
|
|
|
Accumulated depreciation
|
(154,893
|
)
|
|
(244,910
|
)
|
|
(2,476
|
)
|
|
—
|
|
|
(16,519
|
)
|
|
(418,798
|
)
|
|
|
231,323
|
|
|
343,739
|
|
|
385
|
|
|
—
|
|
|
14,192
|
|
|
589,639
|
|
|
Construction in progress
|
7,663
|
|
|
290,582
|
|
|
—
|
|
|
—
|
|
|
(1,524
|
)
|
|
296,721
|
|
|
Net property and equipment
|
238,986
|
|
|
634,321
|
|
|
385
|
|
|
—
|
|
|
12,668
|
|
|
886,360
|
|
|
Investments, at Equity, and Advances to 50% or Less Owned Companies
|
79,154
|
|
|
56,385
|
|
|
611
|
|
|
59,202
|
|
|
—
|
|
|
195,352
|
|
|
Inventories
|
1,824
|
|
|
799
|
|
|
99
|
|
|
—
|
|
|
—
|
|
|
2,722
|
|
|
Goodwill
|
2,418
|
|
|
1,852
|
|
|
48,124
|
|
|
—
|
|
|
—
|
|
|
52,394
|
|
|
Intangible Assets
|
5,521
|
|
|
—
|
|
|
18,595
|
|
|
—
|
|
|
—
|
|
|
24,116
|
|
|
Other current and long-term assets, excluding cash and near cash assets
(1)
|
45,428
|
|
|
27,477
|
|
|
14,983
|
|
|
7,961
|
|
|
3,803
|
|
|
99,652
|
|
|
Segment Assets
|
373,331
|
|
|
720,834
|
|
|
82,797
|
|
|
67,163
|
|
|
|
|
|
|
Cash and near cash assets
(1)
|
|
|
|
|
|
|
|
|
|
|
539,897
|
|
|
Discontinued Operations
|
|
|
|
|
|
|
|
|
|
|
1,200,824
|
|
|
Total Assets
|
|
|
|
|
|
|
|
|
|
|
3,001,317
|
|
______________________
|
|
|
|
(1)
|
Cash and near cash assets includes cash, cash equivalents, restricted cash, marketable securities and construction reserve funds.
|
13. DISCONTINUED OPERATIONS
The Company’s discontinued operations consist of SEACOR Marine and ICP and following the Spin-off and sale the Company has no continuing involvement in either of these business (see Note 1). As of June 30, 2017, the balances for discontinued operations included in the accompanying condensed consolidated balance sheets relate to ICP and consist primarily of working capital items including accounts receivable, inventories and accrued expenses, and property and equipment. Summarized selected operating results of the Company’s discontinued operations were as follows (in thousands):
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Three Months Ended June 30,
|
|
Six Months Ended June 30,
|
|
|
2017
|
|
2016
|
|
2017
|
|
2016
|
|
SEACOR Marine
|
|
|
|
|
|
|
|
|
Operating Revenues
|
$
|
27,987
|
|
|
$
|
57,271
|
|
|
$
|
62,291
|
|
|
$
|
117,150
|
|
|
Costs and Expenses:
|
|
|
|
|
|
|
|
|
Operating
|
32,509
|
|
|
44,245
|
|
|
65,888
|
|
|
93,095
|
|
|
Administrative and general
|
17,856
|
|
|
11,929
|
|
|
29,682
|
|
|
24,327
|
|
|
Depreciation and amortization
|
9,678
|
|
|
15,254
|
|
|
22,181
|
|
|
30,092
|
|
|
|
60,043
|
|
|
71,428
|
|
|
117,751
|
|
|
147,514
|
|
|
Gains (Losses) on Asset Dispositions and Impairments, Net
|
(600
|
)
|
|
(20,357
|
)
|
|
4,219
|
|
|
(20,737
|
)
|
|
Operating Loss
|
(32,656
|
)
|
|
(34,514
|
)
|
|
(51,241
|
)
|
|
(51,101
|
)
|
|
Other Income (Expense), Net
|
(5,346
|
)
|
|
(6,702
|
)
|
|
1,780
|
|
|
(11,682
|
)
|
|
Income Tax Benefit
|
(9,509
|
)
|
|
(13,742
|
)
|
|
(12,931
|
)
|
|
(20,568
|
)
|
|
Equity in Earnings (Losses) of 50% or Less Owned Companies, Net of Tax
|
1,225
|
|
|
(3,315
|
)
|
|
1,663
|
|
|
(1,154
|
)
|
|
Net Loss
|
$
|
(27,268
|
)
|
|
$
|
(30,789
|
)
|
|
$
|
(34,867
|
)
|
|
$
|
(43,369
|
)
|
|
Net Loss Attributable to Noncontrolling Interests
|
$
|
(1,688
|
)
|
|
$
|
(209
|
)
|
|
$
|
(1,892
|
)
|
|
$
|
(831
|
)
|
|
|
|
|
|
|
|
|
|
|
ICP
|
|
|
|
|
|
|
|
|
Operating Revenues
|
$
|
39,676
|
|
|
$
|
40,576
|
|
|
$
|
78,061
|
|
|
$
|
90,185
|
|
|
Costs and Expenses:
|
|
|
|
|
|
|
|
|
Operating
|
40,205
|
|
|
36,153
|
|
|
76,306
|
|
|
82,442
|
|
|
Administrative and general
|
1,363
|
|
|
912
|
|
|
2,109
|
|
|
1,568
|
|
|
Depreciation and amortization
|
1,179
|
|
|
1,064
|
|
|
2,354
|
|
|
2,117
|
|
|
|
42,747
|
|
|
38,129
|
|
|
80,769
|
|
|
86,127
|
|
|
Operating Income (Loss)
|
(3,071
|
)
|
|
2,447
|
|
|
(2,708
|
)
|
|
4,058
|
|
|
Other Income, Net
|
487
|
|
|
1,791
|
|
|
2,335
|
|
|
2,477
|
|
|
Income Tax Expense (Benefit)
|
(668
|
)
|
|
1,267
|
|
|
67
|
|
|
1,982
|
|
|
Net Income (Loss)
|
$
|
(1,916
|
)
|
|
$
|
2,971
|
|
|
$
|
(440
|
)
|
|
$
|
4,553
|
|
|
Net Income (Loss) Attributable to Noncontrolling Interests
|
$
|
(915
|
)
|
|
$
|
984
|
|
|
$
|
(539
|
)
|
|
$
|
1,406
|
|
|
|
|
|
|
|
|
|
|
|
Eliminations
|
|
|
|
|
|
|
|
|
Operating Revenues
|
$
|
(520
|
)
|
|
$
|
(456
|
)
|
|
$
|
(1,176
|
)
|
|
$
|
(1,068
|
)
|
|
Costs and Expenses:
|
|
|
|
|
|
|
|
|
Operating
|
(561
|
)
|
|
(543
|
)
|
|
(1,289
|
)
|
|
(1,250
|
)
|
|
Administrative and general
|
(19
|
)
|
|
(27
|
)
|
|
(42
|
)
|
|
(53
|
)
|
|
|
(580
|
)
|
|
(570
|
)
|
|
(1,331
|
)
|
|
(1,303
|
)
|
|
Operating Income
|
60
|
|
|
114
|
|
|
155
|
|
|
235
|
|
|
Other Income, Net
|
795
|
|
|
884
|
|
|
1,738
|
|
|
1,917
|
|
|
Income Tax Expense
|
300
|
|
|
349
|
|
|
663
|
|
|
753
|
|
|
Net Income
|
$
|
555
|
|
|
$
|
649
|
|
|
$
|
1,230
|
|
|
$
|
1,399
|
|
|
|
|
|
|
|
|
|
|
|
Loss from Discontinued Operations, Net of Tax
|
$
|
(28,629
|
)
|
|
$
|
(27,169
|
)
|
|
$
|
(34,077
|
)
|
|
$
|
(37,417
|
)
|