e10vq
UNITED STATES SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
FORM 10-Q
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Quarterly Report Pursuant to Section 13 or 15(d) of the Securities Exchange Act of 1934 |
For the quarterly period ended June 30, 2010
GULFMARK OFFSHORE, INC.
(Exact name of registrant as specified in its charter)
Delaware
(State or other jurisdiction of incorporation)
001-33607
(Commission file number)
76-0526032
(I.R.S. Employer Identification No.)
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10111 Richmond Avenue, Suite 340, Houston, Texas
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77042 |
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(Address of principal executive offices)
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(Zip Code) |
(713) 963-9522
(Registrants telephone number, including area code)
Indicate by check mark whether the Registrant (1) has filed all reports required to be filed
by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or
for such shorter period that the Registrant was required to file such reports) and (2) has been
subject to such filing requirements for the past 90 days.
YES ý NO o
Indicate by check mark whether the registrant has submitted electronically and posted on its
corporate Web site, if any, every Interactive Data File required to be submitted and posted
pursuant to Rule 405 of Regulation S-T (§232.405 of this chapter) during the preceding 12 months
(or for such shorter period that the registrant was required to submit and post such files).
YES ý NO o
Indicate by check mark whether the registrant is a large accelerated filer, an accelerated
filer, a non-accelerated filer, or a smaller reporting company. See definition of large
accelerated filer, accelerated filer and smaller reporting company in Rule 12b-2 of the
Exchange Act. (Check One):
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Large accelerated filer ý |
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Accelerated filer o |
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Non-accelerated filer o (Do not check if a smaller reporting company) |
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Smaller reporting company o |
Indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of
the Exchange Act).
YES o NO ý
Number
of shares of Class A Common Stock, $0.01 par value, outstanding as of July 28, 2010:
26,211,461
(Exhibit Index Located on Page 26)
GulfMark Offshore, Inc.
Index
2
PART 1. FINANCIAL INFORMATION
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ITEM 1. |
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FINANCIAL STATEMENTS |
GULFMARK OFFSHORE, INC. AND SUBSIDIARIES
UNAUDITED
CONDENSED CONSOLIDATED BALANCE SHEETS
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June 30, |
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December 31, |
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2010 |
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2009 |
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(In thousands, except par value amount) |
ASSETS
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Current assets: |
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Cash and cash equivalents |
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$ |
49,794 |
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$ |
92,079 |
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Trade accounts receivable, net of allowance for doubtful accounts of $1,254 in 2010 and $334 in 2009 |
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76,129 |
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76,554 |
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Other accounts receivable |
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4,670 |
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4,235 |
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Prepaid expenses and other |
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21,923 |
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12,206 |
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Total current assets |
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152,516 |
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185,074 |
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Vessels and equipment at cost, net of accumulated depreciation of $249,091 in 2010 and $239,518 in
2009 |
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1,165,956 |
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1,164,067 |
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Construction in progress |
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30,215 |
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40,349 |
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Goodwill |
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28,571 |
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129,849 |
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Fair value hedges |
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- |
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6,886 |
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Intangibles, net of accumulated amortization of $5,766 in 2010 and $4,325 in 2009 |
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28,832 |
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30,273 |
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Deferred costs and other assets |
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7,141 |
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9,161 |
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Total assets |
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$ |
1,413,231 |
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$ |
1,565,659 |
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LIABILITIES AND STOCKHOLDERS EQUITY
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Current liabilities: |
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Current portion of long-term debt |
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$ |
33,333 |
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$ |
33,333 |
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Accounts payable |
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17,697 |
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19,519 |
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Income taxes payable |
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1,921 |
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3,368 |
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Accrued personnel costs |
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24,165 |
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26,312 |
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Accrued interest expense |
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5,758 |
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5,966 |
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Other accrued liabilities |
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11,183 |
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8,535 |
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Total current liabilities |
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94,057 |
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97,033 |
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Long-term debt |
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309,728 |
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326,361 |
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Long-term income taxes: |
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Deferred tax liabilities |
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109,060 |
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112,960 |
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Other income taxes payable |
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17,019 |
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24,029 |
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Fair value hedges |
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- |
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6,886 |
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Cash flow hedges |
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7,565 |
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6,422 |
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Other liabilities |
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3,878 |
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4,500 |
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Stockholders equity: |
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Preferred stock, no par value; 2,000 authorized; no shares issued |
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- |
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- |
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Class A Common Stock, $0.01 par value; 60,000 shares authorized; 26,211 and 25,906 shares issued and
25,933 and 25,697 outstanding, respectively; Class B Common Stock $.01 par value; 60,000 shares
authorized; no shares issued |
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258 |
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255 |
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Additional paid-in capital |
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366,332 |
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362,022 |
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Retained earnings |
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502,025 |
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571,213 |
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Accumulated other comprehensive income |
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3,693 |
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54,005 |
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Treasury stock, at cost |
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(6,977 |
) |
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(5,865 |
) |
Deferred compensation expense |
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6,593 |
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5,838 |
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Total stockholders equity |
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871,924 |
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987,468 |
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Total liabilities and stockholders equity |
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$ |
1,413,231 |
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$ |
1,565,659 |
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The accompanying notes are an integral part of these unaudited condensed consolidated financial statements.
3
GULFMARK OFFSHORE, INC. AND SUBSIDIARIES
UNAUDITED
CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS
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Three Months Ended |
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Six Months Ended |
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June 30, |
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June 30, |
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2010 |
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2009 |
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2010 |
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2009 |
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(In thousands except per share amounts) |
Revenue |
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$ |
92,782 |
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$ |
104,656 |
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$ |
177,433 |
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$ |
213,451 |
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Costs and expenses: |
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Direct operating expenses |
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42,658 |
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39,132 |
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85,727 |
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79,614 |
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Drydock expense |
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6,159 |
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2,642 |
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13,123 |
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4,880 |
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General and administrative expenses |
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11,456 |
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11,565 |
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23,187 |
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22,105 |
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Depreciation and amortization |
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13,977 |
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13,146 |
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27,952 |
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25,516 |
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(Gain) loss on sale and involuntary disposal of assets |
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106 |
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(869 |
) |
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106 |
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(5,501 |
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Impairment charge |
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97,665 |
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- |
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97,665 |
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46,247 |
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Total costs and expenses |
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172,021 |
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65,616 |
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247,760 |
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172,861 |
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Operating income (loss) |
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(79,239 |
) |
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39,040 |
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(70,327 |
) |
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40,590 |
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Other income (expense): |
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Interest expense |
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(5,062 |
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(4,946 |
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(10,051 |
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(10,083 |
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Interest income |
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37 |
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76 |
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142 |
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136 |
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Foreign currency gain (loss) and other |
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(1,020 |
) |
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790 |
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761 |
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(1,416 |
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Total other expense |
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(6,045 |
) |
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(4,080 |
) |
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(9,148 |
) |
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(11,363 |
) |
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Income (loss) before income taxes |
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(85,284 |
) |
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34,960 |
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(79,475 |
) |
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29,227 |
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Income tax (provision) benefit |
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(5,447 |
) |
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(37 |
) |
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10,287 |
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19,917 |
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Net income (loss) |
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$ |
(90,731 |
) |
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$ |
34,923 |
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$ |
(69,188 |
) |
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$ |
49,144 |
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Earnings (loss) per share: |
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Basic |
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($3.55 |
) |
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$ |
1.39 |
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($2.72 |
) |
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$ |
1.96 |
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Diluted |
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($3.55 |
) |
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$ |
1.38 |
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($2.72 |
) |
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$ |
1.94 |
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Weighted average shares outstanding: |
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Basic |
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25,546 |
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25,132 |
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25,470 |
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25,055 |
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Diluted |
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25,546 |
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25,362 |
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25,470 |
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|
25,294 |
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The accompanying notes are an integral part of these unaudited condensed consolidated financial statements.
4
GULFMARK OFFSHORE, INC. AND SUBSIDIARIES
UNAUDITED
CONDENSED CONSOLIDATED STATEMENT OF STOCKHOLDERS EQUITY
For the Six Months Ended June 30, 2010
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Accumulated |
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Deferred |
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Additional |
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Other |
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Compen- |
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Total |
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Common |
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Paid-In |
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Retained |
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Comprehensive |
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sation |
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Stockholders |
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Stock |
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Capital |
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Earnings |
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Income/(Loss) |
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Treasury Stock |
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Expense |
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Equity |
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Share |
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Shares |
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Value |
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(In thousands) |
Balance at December 31, 2009 |
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$ |
255 |
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$ |
362,022 |
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$ |
571,213 |
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$ |
54,005 |
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(209 |
) |
|
$ |
(5,865 |
) |
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$ |
5,838 |
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$ |
987,468 |
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Net loss |
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|
- |
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- |
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(69,188 |
) |
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- |
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- |
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- |
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|
- |
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(69,188 |
) |
Issuance of common stock |
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2 |
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|
5,022 |
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- |
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|
- |
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- |
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- |
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|
- |
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|
5,024 |
|
Exercise of stock options |
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|
1 |
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|
1,068 |
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|
- |
|
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|
- |
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- |
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- |
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|
- |
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|
1,069 |
|
Deferred compensation plan |
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- |
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(1,780 |
) |
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|
- |
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- |
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(40 |
) |
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(1,112 |
) |
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|
755 |
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(2,137 |
) |
Unrealized gain on cash flow
hedges |
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- |
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|
- |
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|
- |
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(1,018 |
) |
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- |
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- |
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- |
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(1,018 |
) |
Translation adjustment |
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- |
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- |
|
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- |
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(49,294 |
) |
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- |
|
|
|
- |
|
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- |
|
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(49,294 |
) |
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Balance at June 30, 2010 |
|
$ |
258 |
|
|
$ |
366,332 |
|
|
$ |
502,025 |
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|
$ |
3,693 |
|
|
|
(249 |
) |
|
$ |
(6,977 |
) |
|
$ |
6,593 |
|
|
$ |
871,924 |
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|
The accompanying notes are an integral part of these unaudited condensed consolidated financial statements.
5
GULFMARK OFFSHORE, INC. AND SUBSIDIARIES
UNAUDITED
CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS
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Six Months Ended |
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June 30, |
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|
2010 |
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2009 |
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(In thousands) |
|
Cash flows from operating activities: |
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|
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|
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Net income (loss) |
|
$ |
(69,188 |
) |
|
$ |
49,144 |
|
Adjustments to reconcile net income (loss) to net cash provided by operating activities: |
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|
|
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Depreciation and amortization |
|
|
27,952 |
|
|
|
25,516 |
|
(Gain) loss on sale and involuntary disposal of assets |
|
|
106 |
|
|
|
(5,501 |
) |
Impairment charge |
|
|
97,665 |
|
|
|
46,247 |
|
Stock based compensation |
|
|
2,864 |
|
|
|
4,439 |
|
Amortization of deferred financing costs on debt |
|
|
799 |
|
|
|
352 |
|
Adjustment for doubtful accounts receivable, net of write-offs |
|
|
939 |
|
|
|
378 |
|
Deferred income tax benefit |
|
|
(2,861 |
) |
|
|
(23,600 |
) |
Foreign currency transaction loss |
|
|
675 |
|
|
|
1,736 |
|
Change in operating assets and liabilities: |
|
|
|
|
|
|
|
|
Accounts receivable |
|
|
(3,725 |
) |
|
|
7,197 |
|
Prepaids and other |
|
|
(4,541 |
) |
|
|
(4,407 |
) |
Accounts payable |
|
|
(807 |
) |
|
|
(1,970 |
) |
Accrued liabilities and other |
|
|
(10,495 |
) |
|
|
(8,308 |
) |
|
|
|
Net cash provided by operating activities |
|
|
39,383 |
|
|
|
91,223 |
|
Cash flows from investing activities: |
|
|
|
|
|
|
|
|
Purchases of vessels and equipment |
|
|
(63,179 |
) |
|
|
(28,778 |
) |
Proceeds from disposition of assets |
|
|
890 |
|
|
|
8,410 |
|
|
|
|
Net cash used in investing activities |
|
|
(62,289 |
) |
|
|
(20,368 |
) |
Cash flows from financing activities: |
|
|
|
|
|
|
|
|
Repayments of debt |
|
|
(16,667 |
) |
|
|
(13,735 |
) |
Debt refinancing cost |
|
|
(2,000 |
) |
|
|
|
|
Proceeds from exercise of stock options |
|
|
1,069 |
|
|
|
693 |
|
Proceeds from issuance of stock |
|
|
369 |
|
|
|
450 |
|
|
|
|
Net cash used in financing activities |
|
|
(17,229 |
) |
|
|
(12,592 |
) |
Effect of exchange rate changes on cash |
|
|
(2,150 |
) |
|
|
6,912 |
|
|
|
|
Net increase (decrease) in cash and cash equivalents |
|
|
(42,285 |
) |
|
|
65,175 |
|
Cash and cash equivalents at beginning of the period |
|
|
92,079 |
|
|
|
100,761 |
|
|
|
|
Cash and cash equivalents at end of the period |
|
$ |
49,794 |
|
|
$ |
165,936 |
|
|
|
|
Supplemental cash flow information: |
|
|
|
|
|
|
|
|
Interest paid, net of interest capitalized |
|
$ |
8,095 |
|
|
$ |
10,055 |
|
|
|
|
Income taxes paid, net |
|
$ |
3,166 |
|
|
$ |
1,818 |
|
|
|
|
The accompanying notes are an integral part of these unaudited condensed consolidated financial statements.
6
GULFMARK OFFSHORE, INC. AND SUBSIDIARIES
NOTES TO UNAUDITED CONDENSED CONSOLIDATED FINANCIAL
STATEMENTS
(1) GENERAL INFORMATION
The condensed consolidated financial statements of GulfMark Offshore, Inc. and its
subsidiaries included herein have been prepared by us without audit, pursuant to the
rules and regulations of the Securities and Exchange Commission, or SEC. Unless otherwise
indicated, references to we, us, our and the Company refer collectively to GulfMark
Offshore, Inc., its subsidiaries, and its predecessors. Certain information relating to our
organization and footnote disclosures normally included in financial statements prepared in
accordance with U.S. generally accepted accounting principles, or U.S. GAAP, has been condensed or
omitted in this Form 10-Q pursuant to such rules and regulations. However, we believe that the
disclosures herein are adequate to make the information presented not misleading. The consolidated
balance sheet as of December 31, 2009, has been derived from the audited financial statements at
that date but does not include all of the information and footnotes required by U.S. GAAP for
complete financial statements. It is recommended that these financial statements be read in
conjunction with our consolidated financial statements and notes thereto included in our
Form 10-K for the year ended December 31, 2009.
In the opinion of management, all adjustments, which include reclassification and normal
recurring adjustments necessary to present fairly the financial statements for the periods
indicated have been made. All significant intercompany accounts have been eliminated. Certain
reclassifications of previously reported information may be made to conform with current year
presentation.
We provide offshore marine support and transportation services primarily to companies involved
in the offshore exploration and production of oil and natural gas. Our vessels transport materials,
supplies and personnel to offshore facilities, as well as move and position drilling structures.
The majority of our operations are conducted in the North Sea and offshore Southeast Asia and the
Americas. We also contract vessels into other regions to meet our customers requirements.
Basic Earnings Per Share, or EPS, is computed by dividing net income (loss) by the weighted
average number of shares of common stock outstanding during the period. Diluted EPS is computed
using the treasury stock method for common stock equivalents. The details of our EPS calculation
are as follows (in thousands, except per share amounts):
7
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Three Months Ended |
|
Three Months Ended |
|
|
June 30, 2010 |
|
June 30, 2009 |
|
|
|
|
|
|
|
|
|
|
Per Share |
|
|
|
|
|
|
|
|
|
Per Share |
|
|
Income |
|
Shares |
|
Amount |
|
Income |
|
Shares |
|
Amount |
|
|
|
Earnings (loss) per share, basic |
|
$ |
(90,731 |
) |
|
|
25,546 |
|
|
$ |
(3.55 |
) |
|
$ |
34,923 |
|
|
|
25,132 |
|
|
$ |
1.39 |
|
Dilutive effect of common stock
options and unvested restricted
stock |
|
|
- |
|
|
|
- |
|
|
|
- |
|
|
|
- |
|
|
|
230 |
|
|
|
(0.01 |
) |
|
|
|
Earnings (loss) per share, diluted |
|
$ |
(90,731 |
) |
|
|
25,546 |
|
|
$ |
(3.55 |
) |
|
$ |
34,923 |
|
|
|
25,362 |
|
|
$ |
1.38 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Six Months Ended |
|
Six Months Ended |
|
|
June 30, 2010 |
|
June 30, 2009 |
|
|
|
|
|
|
|
Per Share |
|
|
|
|
|
|
|
|
|
Per Share |
|
|
Income |
|
Shares |
|
Amount |
|
Income |
|
Shares |
|
Amount |
|
|
|
Earnings (loss) per share, basic |
|
$ |
(69,188 |
) |
|
|
25,470 |
|
|
$ |
(2.72 |
) |
|
$ |
49,144 |
|
|
|
25,055 |
|
|
$ |
1.96 |
|
Dilutive effect of common stock
options and unvested restricted
stock |
|
|
- |
|
|
|
- |
|
|
|
- |
|
|
|
- |
|
|
|
239 |
|
|
|
(0.02 |
) |
|
|
|
Earnings (loss) per share, diluted |
|
$ |
(69,188 |
) |
|
|
25,470 |
|
|
$ |
(2.72 |
) |
|
$ |
49,144 |
|
|
|
25,294 |
|
|
$ |
1.94 |
|
|
|
|
(2) COMPREHENSIVE INCOME
|
|
The components of comprehensive income, net of related tax for the three and six month
periods ending June 30, 2010 and 2009 are as follows: |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Three Months Ended |
|
Six Months Ended |
|
|
June 30, |
|
June 30, |
|
|
2010 |
|
2009 |
|
2010 |
|
2009 |
|
|
(In thousands) |
|
(In thousands) |
Net income (loss) |
|
$ |
(90,731 |
) |
|
$ |
34,923 |
|
|
$ |
(69,188 |
) |
|
$ |
49,144 |
|
|
Comprehensive income (loss): |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Unrealized gain on cash flow hedge |
|
|
(464 |
) |
|
|
1,306 |
|
|
|
(1,018 |
) |
|
|
2,006 |
|
|
Foreign currency translation |
|
|
(23,811 |
) |
|
|
52,951 |
|
|
|
(49,294 |
) |
|
|
53,911 |
|
|
|
|
|
|
|
Total comprehensive income (loss) |
|
$ |
(115,006 |
) |
|
$ |
89,180 |
|
|
$ |
(119,500 |
) |
|
$ |
105,061 |
|
|
|
|
|
|
Our accumulated other comprehensive income (loss) item relates primarily to our
cumulative foreign currency translation adjustments and adjustments related to the cash flow
hedges.
(3) IMPAIRMENT CHARGE
Goodwill
Our goodwill consists of $97.7 million related to an acquisition in our Americas region and
$28.6 million related to acquisitions in the North Sea region. The determination of impairment of
all long-lived assets, goodwill, and intangibles is conducted when indicators of impairment are
present and at least annually for goodwill. Impairment testing for goodwill is performed on a
reporting segment basis.
In the second quarter of 2010, we assessed our Americas region goodwill for impairment. In
our assessment, we evaluated the impact on the segments fair value due to the recent events in the
U.S. Gulf Of Mexico relating to the April 20, 2010 explosion and fire on a
8
deepwater drilling rig,
the resulting oil spill and the U.S. Department of Interior moratorium on deepwater drilling. The
ramifications of the events in the Gulf of Mexico were not considered in our first quarter analysis
and disclosure, but are considered to have a material effect in our second quarter analysis. The
Gulf of Mexico market is generally divided into two distinct areas: shallow-water and deepwater.
The deepwater market has historically been less volatile and more profitable. Our long-term
strategy has been to become more focused on the deepwater business. The ban on new drilling permits
issued on April 30 and the deepwater drilling moratorium issued on May 28,
2010 have negatively impacted our outlook for deepwater drilling. Although the subject of
ongoing litigation, the moratorium presently extends to November 30, 2010.
Based on the factors discussed above, which were incorporated into our evaluations and testing
as prescribed under U.S. GAAP, we determined that an impairment of our Americas region goodwill
exists. As a result, we recorded a $97.7 million impairment charge as of June 30, 2010, reflecting
all of our Americas region goodwill. The non-cash charge does not impact our liquidity or debt
covenant compliance.
Vessels Under Construction
In March 2009, we notified a shipyard building three of the vessels in our new build program
that they were in default under the construction contract. The default arose as a result of
non-performance under the terms of the contract caused by financial difficulties of the shipyard.
Construction on these vessels was stopped. We determined that we had a material impairment and
recognized a charge of $46.2 million in the first quarter of 2009 pertaining to the construction in
progress related to this contract. That charge represented the full amount of our investment in
these vessels. The shipyard building the three vessels is in Chapter 11 bankruptcy proceedings. We
are pursuing our claims and remedies in the bankruptcy proceedings.
(4) FLEET EXPANSION AND RENEWAL PROGRAM
During 2010, we have taken delivery of three vessels that were under construction at December
31, 2009. As of July 28, 2010, we have one vessel that is being held for sale and have no vessels
under construction. The following table illustrates the details of the vessels added since December
31, 2009.
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Vessel Additions Since December 31, 2009 |
|
|
|
|
|
|
|
|
|
|
|
|
Year |
|
|
Length |
|
|
|
|
|
|
|
|
|
|
Month |
|
Vessel |
|
Region |
|
|
Type (1) |
|
|
Built |
|
|
(feet) |
|
|
BHP (2) |
|
|
DWT (3) |
|
|
Delivered |
|
|
|
North Purpose |
|
N. Sea |
|
PSV |
|
|
2010 |
|
|
|
284 |
|
|
|
10,600 |
|
|
|
4,850 |
|
|
Feb-10 |
Sea Valiant |
|
SEA |
|
AHTS |
|
|
2010 |
|
|
|
230 |
|
|
|
10,000 |
|
|
|
2,150 |
|
|
Jun-10 |
Sea Victor |
|
SEA |
|
AHTS |
|
|
2010 |
|
|
|
230 |
|
|
|
10,000 |
|
|
|
2,150 |
|
|
Jul-10 |
|
|
|
1) |
|
AHTS - Anchor handling, towing and supply vessel
FSV - Fast supply vessel
PSV - Platform supply vessel
SpV - Specialty vessel, including towing and oil response
SmAHTS - Small anchor handling, towing and supply vessel
|
|
2) |
|
BHP - Breakhorse power |
|
3) |
|
DWT - Deadweight tons |
Interest is capitalized in connection with the construction of vessels. During the three
month periods ended June 30, 2010 and 2009, $0.7 million and $1.0 million of interest,
respectively, was capitalized. During the six month periods ended June 30, 2010 and 2009, $1.3
million and $2.4 million, respectively, was capitalized.
9
(5) INCOME TAXES
We consider earnings of certain foreign subsidiaries to be permanently reinvested, and as
such, we have not provided for any U.S. federal or state income taxes on those earnings. Also, many
of our foreign subsidiaries are subject to foreign tax systems that provide significant tax
incentives to qualified shipping activities. These incentives result in statutory tax rates in
those foreign jurisdictions that are very low. Because of the significant difference in statutory
rates among the various taxing jurisdictions in which we operate, relatively small changes in
pre-tax profitability among those various jurisdictions can cause considerable variability in the
overall effective tax rate.
As previously announced, in February 2010 the Norwegian Supreme Court ruled unconstitutional
the 2007 legislation to begin taxing previously untaxed pre-2007 tonnage tax profits. This decision
is a change in tax law and, accordingly, we recorded a $15.0 million tax benefit, including a cash
refund of approximately $3.0 million, in our tax provision for the quarter ended March 31, 2010 to
reflect the elimination of this previously recorded income tax liability. As part of Norways
revised 2010 budget process, on June 25, 2010 new tax legislation regarding pre-2007 tonnage tax
profits was signed into law. Accordingly, in the second quarter of 2010 we recorded a $4.9 million
tax expense.
Our income tax expense for the first half of 2010 was a benefit of $10.3 million and our
income tax expense for the quarter ended June 30, 2010 was a provision of $5.4 million. These
amounts include the two special items noted above. Before these two special items, our tax
provision for the first half of 2010 was a benefit of $0.2 million and our tax provision for the
second quarter of 2010 was a provision of $0.6 million. The low effective income tax rate in 2010
is a result of lower profitability in the higher tax rate jurisdictions in which we operate.
(6) COMMITMENTS AND CONTINGENCIES
We have contingent liabilities and future claims for which we have made estimates of the
amount of the eventual cost to liquidate such liabilities or claims. These may involve threatened
or actual litigation where damages have not been specifically quantified but we have made an
assessment of our exposure and recorded a provision in our accounts for the expected loss. Other
claims or liabilities, including those related to taxes in foreign jurisdictions or the
industry-wide, multi-employer, defined benefit pension fund, Merchant Officers Pension Fund in the
U.K., may be estimated based on our experience or estimated liabilities in these matters and, where
appropriate, the advice of outside counsel or other outside experts. Upon the ultimate resolution
of the uncertainties surrounding our estimates of contingent liabilities and future claims, our
future reported financial results would be impacted by the difference between our estimates and the
actual amounts paid to settle them. Our contingent liabilities are based on the most recent
information available to us regarding the nature of the exposure. In the recent past, our estimates
for contingent liabilities have been sufficient to cover the actual amount of our exposure.
(7) DERIVATIVE FINANCIAL INSTRUMENTS
Derivative instruments are accounted for at fair value. The accounting for changes in the fair
value of a derivative depends on the intended use and designation of the derivative instrument. For
a derivative instrument designated as a fair value hedge, the gain or loss on the derivative is
recognized in earnings in the period of change in fair value together with the
10
offsetting gain or loss on the hedged item. For a derivative instrument designated as a
cash flow hedge, the effective portion of the derivatives gain or loss is initially reported as a
component of Other Comprehensive Income (OCI) and is subsequently recognized in earnings when the
hedged exposure affects earnings. The ineffective portion of the gain or loss is recognized in
earnings. Gains and losses from changes in fair values of derivatives that are not designated as
hedges for accounting purposes are recognized in earnings.
Using derivative instruments means assuming counterparty credit risk. Counterparty credit risk
relates to the loss we could incur if a counterparty were to default on a derivative contract. We
deal with investment grade counterparties and monitor the overall credit risk and exposure to
individual counterparties. We do not anticipate nonperformance by any counterparties. The amount of
counterparty credit exposure is the unrealized gains, if any, on such derivative contracts. We do
not require, nor do we post, collateral or security on such contracts.
Hedging Strategy
We are exposed to certain risks relating to our ongoing business operations. As a result, we
enter into derivative transactions to manage certain of these exposures that arise in the normal
course of business. The primary risks managed by using derivative instruments are foreign currency
exchange rate and interest rate risks. Fluctuations in these rates and prices can affect our
operating results and financial condition. We manage the exposure to these market risks through
operating and financing activities and through the use of derivative financial instruments. We do
not enter into derivative financial instruments for trading or speculative purposes.
We have periodically entered into forward foreign currency contracts which are designated as
fair value hedges and are highly effective, as the terms of the forward contracts are the same as
the purchase commitments under the related contract. Any gains or losses resulting from changes in
fair value are recognized in income with an offsetting adjustment to income for changes in the fair
value of the hedged item such that there was no net impact in the consolidated statements of
operations. As of June 30, 2010, we have no open contracts.
We entered into an interest rate swap with the objective of reducing our exposure to interest
rate risk for $100.0 million of our $200.0 million Facility Agreement variable-rate debt. At June
30, 2010, our interest rate derivative instruments have an outstanding notional amount of $100.0
million and have been designated as cash flow hedges. The critical terms of these swaps, including
reset dates and floating rate indices match those of our underlying variable-rate debt and no
ineffectiveness has been recorded.
Early Hedge Settlement
During December 2009, we cash settled certain interest rate swap contracts prior to their
scheduled settlement dates. As a result of these transactions, we paid $6.4 million in cash, which
represented the fair value of these contracts at the date of settlement. Unrecognized losses of
$2.9 million are recorded as of June 30, 2010 in accumulated OCI related to these interest rate
swaps. This balance will be amortized into interest expense through December 31, 2012 based on
forecasted payments as of the settlement date.
11
The following table quantifies the fair values, on a gross basis, of all our derivative
contracts and identifies the balance sheet location as of June 30, 2010 and December 31, 2009
(dollars in thousands):
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Asset Derivatives |
|
|
Liability Derivatives |
|
|
|
June 30, 2010 |
|
|
December 31, 2009 |
|
|
June 30, 2010 |
|
|
December 31, 2009 |
|
Derivatives
designed as
hedging |
|
Balance Sheet |
|
|
|
|
|
|
Balance Sheet |
|
|
|
|
|
|
Balance Sheet |
|
|
|
|
|
|
Balance Sheet |
|
|
|
|
instruments |
|
Location |
|
|
Fair Value |
|
|
Location |
|
|
Fair Value |
|
|
Location |
|
|
Fair Value |
|
|
Location |
|
|
Fair Value |
|
Foreign exchange contract |
|
Fair Value Hedges |
|
$ |
- |
|
|
Fair Value Hedges |
|
$ |
6,886 |
|
|
Fair Value Hedges |
|
$ |
- |
|
|
Fair Value Hedges |
|
$ |
6,886 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Interest rate swaps |
|
|
|
|
|
|
- |
|
|
|
|
|
|
|
- |
|
|
Cash flow hedges |
|
|
7,565 |
|
|
Cash flow hedges |
|
|
6,422 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
$ |
- |
|
|
|
|
|
|
$ |
6,886 |
|
|
|
|
|
|
$ |
7,565 |
|
|
|
|
|
|
$ |
13,308 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
The following tables quantify the amount of gain or loss recognized during the three and
six months ended June 30, and identify the consolidated statement of operations location:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Location of Gain or Loss |
|
|
Amount of Gain or Loss |
|
Derivatives in fair value |
|
Recognized in Income on |
|
|
Recognized in Income on |
|
hedging relationships |
|
Derivative |
|
|
Derivative |
|
|
|
|
|
|
|
2010 |
|
|
2009 |
|
|
|
|
|
|
|
(in thousands) |
|
Foreign exchange contracts |
|
See note. |
|
$ |
- |
|
|
$ |
- |
|
Note: Our foreign exchange contracts relate to construction projects.
The changes in value are included in construction in progress on the consolidated balance
sheet.
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Location of Gain or (Loss) |
|
|
Amount of Gain or (Loss) |
|
|
|
Amount of Gain or (Loss) |
|
|
Reclassified from |
|
|
Reclassified from |
|
Derivatives in cash flow |
|
Recognized in OCI on |
|
|
Accumulated OCI into |
|
|
Accumulated OCI into |
|
hedging relationships |
|
Derivative |
|
|
Income |
|
|
Income |
|
|
|
Six Months Ended June 30 |
|
|
|
|
|
|
Six Months Ended June 30 |
|
|
|
2010 |
|
|
2009 |
|
|
|
|
|
|
2010 |
|
|
2009 |
|
|
|
(in thousands) |
|
|
|
|
|
|
(in thousands) |
|
Interest rate contracts |
|
$ |
(3,202 |
) |
|
$ |
(2,006 |
) |
|
Interest expense |
|
$ |
(1,317 |
) |
|
$ |
(2,029 |
) |
|
|
|
Three Months Ended June 30 |
|
|
|
|
|
|
Three Months Ended June 30 |
|
|
|
2010 |
|
|
2009 |
|
|
|
|
|
|
2010 |
|
|
2009 |
|
|
|
(in thousands) |
|
|
|
|
|
|
(in thousands) |
|
Interest rate contracts |
|
$ |
(1,552 |
) |
|
$ |
(1,306 |
) |
|
Interest expense |
|
$ |
(657 |
) |
|
$ |
(1,007 |
) |
12
(8) FAIR VALUE MEASUREMENTS
Each asset and liability required to be carried at fair value is classified under one of the
following criteria:
Level 1: Quoted market prices in active markets for identical assets or liabilities
Level 2: Observable market based inputs or unobservable inputs that are corroborated by market data
Level 3: Unobservable inputs that are not corroborated by market data
Financial Instruments
At December 31, 2009, we maintained fair value hedges associated with firm contractual
commitments for future vessel payments denominated in a foreign currency. These forward contracts
were designated as fair value hedges and were highly effective, as the terms of the forward
contracts were the same as the purchase commitment under the new build contract. We recognized the
fair value of our derivative assets as a Level 2 valuation. We determined the fair value of our
financial instrument position based upon the forward contract price and the foreign currency
exchange rate as of December 31, 2009. We took delivery of the new build vessel associated with
the contract in the first quarter of 2010 and settled the contracts. At June 30, 2010, we did not
have any open fair value hedges.
On December 17, 2009, we entered into a $200.0 million facility agreement. Concurrently, we
entered into an interest rate swap agreement for approximately $100.0 million of the Facility
Agreement indebtedness that has fixed the interest rate at 4.145%. The interest rate swap is
accounted for as cash flow hedge. We report changes in the fair value of the cash flow hedges in
accumulated other comprehensive income. The consolidated balance sheet contains cash flow hedges
within other long term liabilities, reflecting the fair value of the interest rate swap which was
$7.6 million at June 30, 2010. We expect to reclassify $2.0 million of deferred loss on the current
interest rate swap to interest expense during the next 12 months. We recognize the fair value of
our derivative swaps as a Level 2 valuation. We determined the fair value of our interest rate swap
based on the contractual fixed rate in the swap agreement and the forward curve of three month
LIBOR supplied by the bank as of June 30, 2010.
The following table presents information about our assets (liabilities) measured at fair value
on a recurring basis as of June 30, 2010, and indicates the fair value hierarchy we utilized to
determine such fair value (in millions).
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Level 1 |
|
|
Level 2 |
|
|
Level 3 |
|
|
Total |
|
Cash Flow Hedges |
|
$ |
- |
|
|
$ |
(7.6 |
) |
|
$ |
- |
|
|
$ |
(7.6 |
) |
|
|
|
|
|
|
|
|
|
|
|
|
|
(9) OPERATING SEGMENT INFORMATION
We operate three segments: the North Sea, Southeast Asia and the Americas, each of which is
considered a reportable segment under FASB ASC 280, Segment Reporting. Our management evaluates
segment performance primarily based on operating income. Cash and debt are managed centrally.
Because the regions do not manage those items, the gains and losses on foreign currency
remeasurements associated with these items are excluded from operating income. Our management
considers segment operating income to be a good indicator of each
13
segments operating performance
from its continuing operations, as it represents the results of the ownership interest in
operations without regard to financing methods or capital structures. Each operating segments
operating income (loss) is summarized in the following table, and detailed discussions below.
Operating Income (Loss) by Operating Segment
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Southeast |
|
|
|
|
|
|
|
|
|
|
|
|
North Sea |
|
|
Asia |
|
|
Americas |
|
|
Other |
|
|
Total |
|
|
|
(In thousands) |
|
Quarter Ended June 30, 2010 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Revenue |
|
$ |
37,217 |
|
|
$ |
16,841 |
|
|
$ |
38,724 |
|
|
$ |
- |
|
|
$ |
92,782 |
|
Direct operating expenses |
|
|
19,299 |
|
|
|
2,385 |
|
|
|
20,974 |
|
|
|
- |
|
|
|
42,658 |
|
Drydock expense |
|
|
1,489 |
|
|
|
1,637 |
|
|
|
3,033 |
|
|
|
- |
|
|
|
6,159 |
|
General and administrative expenses |
|
|
2,700 |
|
|
|
763 |
|
|
|
2,361 |
|
|
|
5,632 |
|
|
|
11,456 |
|
Depreciation and amortization expense |
|
|
4,624 |
|
|
|
2,036 |
|
|
|
7,084 |
|
|
|
233 |
|
|
|
13,977 |
|
Loss on sale of assets |
|
|
- |
|
|
|
- |
|
|
|
109 |
|
|
|
(3 |
) |
|
|
106 |
|
Impairment Charge |
|
|
- |
|
|
|
- |
|
|
|
97,665 |
|
|
|
- |
|
|
|
97,665 |
|
|
|
|
Operating income (loss) |
|
$ |
9,105 |
|
|
$ |
10,020 |
|
|
$ |
(92,502 |
) |
|
$ |
(5,862 |
) |
|
$ |
(79,239 |
) |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Quarter Ended June 30, 2009 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Revenue |
|
$ |
46,324 |
|
|
$ |
19,517 |
|
|
$ |
38,815 |
|
|
$ |
- |
|
|
$ |
104,656 |
|
Direct operating expenses |
|
|
17,378 |
|
|
|
2,068 |
|
|
|
19,686 |
|
|
|
- |
|
|
|
39,132 |
|
Drydock expense |
|
|
657 |
|
|
|
489 |
|
|
|
1,496 |
|
|
|
- |
|
|
|
2,642 |
|
General and administrative expenses |
|
|
2,463 |
|
|
|
578 |
|
|
|
2,194 |
|
|
|
6,330 |
|
|
|
11,565 |
|
Depreciation and amortization expense |
|
|
4,215 |
|
|
|
1,703 |
|
|
|
7,029 |
|
|
|
199 |
|
|
|
13,146 |
|
Gain on sale of assets |
|
|
(869 |
) |
|
|
- |
|
|
|
- |
|
|
|
- |
|
|
|
(869 |
) |
Impairment Charge |
|
|
- |
|
|
|
- |
|
|
|
- |
|
|
|
- |
|
|
|
- |
|
|
|
|
Operating income (loss) |
|
$ |
22,480 |
|
|
$ |
14,679 |
|
|
$ |
8,410 |
|
|
$ |
(6,529 |
) |
|
$ |
39,040 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Southeast |
|
|
|
|
|
|
|
|
|
|
|
|
North Sea |
|
|
Asia |
|
|
Americas |
|
|
Other |
|
|
Total |
|
|
|
(In thousands) |
|
Six Months Ended June 30, 2010 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Revenue |
|
$ |
72,492 |
|
|
$ |
32,668 |
|
|
$ |
72,273 |
|
|
$ |
- |
|
|
$ |
177,433 |
|
Direct operating expenses |
|
|
39,465 |
|
|
|
4,710 |
|
|
|
41,552 |
|
|
|
- |
|
|
|
85,727 |
|
Drydock expense |
|
|
3,519 |
|
|
|
3,583 |
|
|
|
6,021 |
|
|
|
- |
|
|
|
13,123 |
|
General and administrative expenses |
|
|
5,521 |
|
|
|
1,362 |
|
|
|
4,547 |
|
|
|
11,757 |
|
|
|
23,187 |
|
Depreciation and amortization expense |
|
|
9,284 |
|
|
|
4,001 |
|
|
|
14,212 |
|
|
|
455 |
|
|
|
27,952 |
|
Loss on sale of assets |
|
|
- |
|
|
|
- |
|
|
|
109 |
|
|
|
(3 |
) |
|
|
106 |
|
Impairment charge |
|
|
- |
|
|
|
- |
|
|
|
97,665 |
|
|
|
- |
|
|
|
97,665 |
|
|
|
|
Operating income (loss) |
|
$ |
14,703 |
|
|
$ |
19,012 |
|
|
$ |
(91,833 |
) |
|
$ |
(12,209 |
) |
|
$ |
(70,327 |
) |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Six Months Ended June 30, 2009 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Revenue |
|
$ |
90,235 |
|
|
$ |
37,186 |
|
|
$ |
86,030 |
|
|
$ |
- |
|
|
$ |
213,451 |
|
Direct operating expenses |
|
|
36,835 |
|
|
|
4,066 |
|
|
|
38,713 |
|
|
|
- |
|
|
|
79,614 |
|
Drydock expense |
|
|
2,317 |
|
|
|
1,049 |
|
|
|
1,514 |
|
|
|
- |
|
|
|
4,880 |
|
General and administrative expenses |
|
|
4,955 |
|
|
|
1,411 |
|
|
|
4,303 |
|
|
|
11,436 |
|
|
|
22,105 |
|
Depreciation and amortization expense |
|
|
8,221 |
|
|
|
3,262 |
|
|
|
13,648 |
|
|
|
385 |
|
|
|
25,516 |
|
Gain on sale of assets |
|
|
(4,058 |
) |
|
|
(1,438 |
) |
|
|
(5 |
) |
|
|
- |
|
|
|
(5,501 |
) |
Impairment charge |
|
|
- |
|
|
|
- |
|
|
|
46,247 |
|
|
|
- |
|
|
|
46,247 |
|
|
|
|
Operating income (loss) |
|
$ |
41,965 |
|
|
$ |
28,836 |
|
|
$ |
(18,390 |
) |
|
$ |
(11,821 |
) |
|
$ |
40,590 |
|
|
|
|
14
|
|
|
ITEM 2. |
|
MANAGEMENTS DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS |
We provide offshore marine support and transportation services primarily to companies involved
in the offshore exploration and production of oil and natural gas. Our vessels transport drilling
materials, supplies and personnel to offshore facilities, as well as move and position drilling
structures. The North Sea, offshore Southeast Asia, offshore West Africa, offshore Middle East,
offshore Brazil and the Gulf of Mexico are each major markets that employ a large number of
vessels. Vessel usage is also significant in other international markets, including offshore India,
offshore Australia, offshore Trinidad, the Persian Gulf and the Mediterranean Sea. The industry is
relatively fragmented, with more than 20 major participants and numerous small regional
competitors. We currently operate a fleet of 89 offshore support vessels in the following regions:
38 vessels in the North Sea, 15 vessels offshore Southeast Asia, and 36 vessels in the Americas. We
have one vessel held for sale, which is not included in our fleet numbers. Our owned fleet is one
of the worlds youngest, largest and most geographically balanced, high specification offshore
support vessel fleets and our owned vessels (excluding specialty vessels) have an average age of
approximately eight years.
Our results of operations are directly impacted by the level of activity in worldwide offshore
oil and natural gas exploration, development and production. This activity is in turn influenced
by trends in oil and natural gas prices. Oil and natural gas prices are affected by a host of
geopolitical, regulatory and economic forces, including the fundamental principles of supply and
demand. Over the last few years commodity prices were at record highs, resulting in oil and
natural gas companies increasing exploration and development activities. However, as a result of
the world economic crisis, commodity prices have declined and we have experienced a reduction in
the level of activity.
On April 20, 2010, an explosion and fire on a deepwater U.S. Gulf of Mexico drilling rig
occurred, resulting in loss of life, multiple injuries, a continually growing oil spill and a U.S.
Department of Interior moratorium on deepwater drilling on the outer continental shelf. The
incident is expected to have a material impact on our U.S. Gulf of Mexico operations and was a key
factor in our assessment of impairment of the Americas region goodwill.
We currently have a significant portion of our U.S. fleet involved in the clean-up efforts in
the Gulf of Mexico, and these vessels, at some time, may be released into a potentially restricted,
and more competitive, market in the Gulf of Mexico. We may attempt to relocate these vessels to
other location in the Americas if more profitable opportunities arise outside the Gulf of Mexico.
The operations of our fleet may be subject to seasonal factors. Operations in the North Sea
are often at their highest levels from April to August, and at their lowest levels from
November to February. Operations in our other areas, although involving some seasonal
factors, tend to remain more consistent throughout the year. We have historically, to the extent
possible, accomplished the majority of our drydocks, which are maintenance and repairs designed to
ensure compliance with applicable regulations and maintaining certifications for our vessels with
various international classification societies, during these seasonal decreases in demand in order
to minimize downtime during our traditionally peak demand periods. When a vessel is drydocked, we
incur not only the drydocking cost but also the loss of revenue from the vessel during the drydock
period. The demands of the market, the expiration of existing contracts, the start of new
contracts and the availability allowed by our customers influence the timing of drydocks throughout
the year. During the first six months of 2010, we completed 337 drydock days, compared to 178
drydock days completed in the same period last year.
15
We provide management services to other vessel owners for a fee, which is included in revenue.
Charter revenues and vessel expenses of these managed vessels are not included in our operating
results. These vessels are excluded for purposes of calculating fleet rates per day worked and
utilization in the applicable periods.
Our operating costs are primarily a function of fleet configuration. The most significant
direct operating costs are wages paid to vessel crews, maintenance and repairs, and marine
insurance. Generally, fluctuations in vessel utilization have little effect on direct operating
costs in the short term. As a result, direct operating costs as a percentage of revenues may vary
substantially due to changes in day rates and utilization.
In addition to direct operating costs, we incur fixed charges related to the depreciation of
our fleet and costs for routine drydock inspections.
Critical Accounting Policies
There have been no changes to the critical accounting policies used in our reporting of
results of operations and financial position. For a discussion of our critical accounting policies
see Managements Discussion and Analysis of Financial Condition and Results of Operations in our
Form 10-K for the year ended December 31, 2009.
Goodwill
Our goodwill consists of $97.7 million related to an acquisition in our Americas region and
$28.6 million related to acquisitions in the North Sea region. The determination of impairment of
all long-lived assets, goodwill, and intangibles is conducted when indicators of impairment are
present and at least annually for goodwill. Impairment testing for goodwill is performed on a
reporting segment basis.
In the second quarter of 2010, we assessed our Americas region goodwill for impairment. In
our assessment, we evaluated the impact on the segments fair value due to the recent events in the
U.S. Gulf of Mexico relating to the April 20, 2010 explosion and fire on a deepwater drilling rig,
the resulting oil spill and the U.S. Department of Interior moratorium on deepwater drilling. The
ramifications of the events in the Gulf of Mexico were not considered in our first quarter analysis
and disclosure, but are considered to have a material effect in our second quarter analysis. The
Gulf of Mexico market is generally divided into two distinct areas: shallow-water and deepwater.
The deepwater market has historically been less volatile and more profitable. Our long-term
strategy has been to become more focused on the deepwater business. The ban on new drilling permits
issued on April 30 and the deepwater drilling moratorium issued on May 28,
2010 have negatively impacted our outlook for deepwater drilling. Although the subject of
ongoing litigation, the moratorium presently extends to November 30, 2010.
Based on the factors discussed above, which were incorporated into our evaluations and testing
as prescribed under U.S. GAAP, we determined that an impairment of our Americas region goodwill
exists. As a result, we recorded a $97.7 million impairment charge as of June 30, 2010, reflecting
all of our Americas region goodwill. The non-cash charge does not impact our liquidity or debt
covenant compliance.
16
Results of Operations
The table below sets forth, by region, the average day rates and utilization for our vessels
and the average number of vessels owned or chartered during the periods indicated. This fleet
generates substantially all of our revenues and operating profit. We use the information that
follows to evaluate the performance of our business.
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Three Months Ended |
|
|
Six Months Ended |
|
|
|
June 30, |
|
|
June 30, |
|
|
|
2010 |
|
|
2009 |
|
|
2010 |
|
|
2009 |
|
Revenues by Region (000s) (a): |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
North Sea Based Fleet (c) |
|
$ |
37,217 |
|
|
$ |
46,324 |
|
|
$ |
72,492 |
|
|
$ |
90,235 |
|
Southeast Asia Based Fleet |
|
|
16,841 |
|
|
|
19,517 |
|
|
|
32,668 |
|
|
|
37,186 |
|
Americas Based Fleet |
|
|
38,724 |
|
|
|
38,815 |
|
|
|
72,273 |
|
|
|
86,030 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Rates Per Day Worked (a) (b): |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
North Sea Based Fleet (c) |
|
$ |
16,478 |
|
|
$ |
21,199 |
|
|
$ |
16,621 |
|
|
$ |
21,138 |
|
Southeast Asia Based Fleet |
|
|
16,817 |
|
|
|
21,201 |
|
|
|
17,387 |
|
|
|
20,959 |
|
Americas Based Fleet |
|
|
13,486 |
|
|
|
15,704 |
|
|
|
13,428 |
|
|
|
16,541 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Overall Utilization (a) (b): |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
North Sea Based Fleet |
|
|
95.1 |
% |
|
|
93.1 |
% |
|
|
94.5 |
% |
|
|
88.8 |
% |
Southeast Asia Based Fleet |
|
|
92.8 |
% |
|
|
93.8 |
% |
|
|
88.0 |
% |
|
|
90.5 |
% |
Americas Based Fleet |
|
|
91.7 |
% |
|
|
79.9 |
% |
|
|
85.7 |
% |
|
|
86.2 |
% |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Average Owned/Chartered Vessels (a) (d): |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
North Sea Based Fleet (c) |
|
|
25.2 |
|
|
|
25.0 |
|
|
|
24.8 |
|
|
|
25.4 |
|
Southeast Asia Based Fleet |
|
|
12.1 |
|
|
|
11.0 |
|
|
|
12.1 |
|
|
|
11.1 |
|
Americas Based Fleet |
|
|
35.3 |
|
|
|
34.8 |
|
|
|
35.7 |
|
|
|
34.0 |
|
|
|
|
|
|
Total |
|
|
72.6 |
|
|
|
70.8 |
|
|
|
72.6 |
|
|
|
70.5 |
|
|
|
|
|
|
|
|
|
(a) |
|
Includes all owned or bareboat chartered vessels. |
|
(b) |
|
Rate per day worked is defined as total charter revenues divided by number of days worked.
Utilization rate is defined as the total days worked divided by total days of availability in
the period. |
|
(c) |
|
Revenues for vessels in the North Sea based fleet are primarily earned in Pound Sterling
(GBP), Norwegian Kroner (NOK) and Euros, and have been converted to U.S. Dollars (US$) at the
average exchange rate for the period. The average equivalent exchange rate per one US$ for
the periods indicated is as shown in Managements Discussion and Analysis of Financial
Condition and Results of Operations Currency Fluctuations and Inflation on page 21. |
|
(d) |
|
Average number of vessels is calculated based on the aggregate number of vessel days
available during each period divided by the number of calendar days in such period. Includes
owned and bareboat vessels only, and is adjusted for vessel additions and dispositions
occurring during each period. |
Comparison of the Three Months Ended June 30, 2010 with the Three Months Ended June 30, 2009
For the quarter ended June 30, 2010, we had a net loss of $90.7 million, or $3.55 per diluted
share, on revenues of $92.8 million. Included in the loss is a $97.7 million, or $3.82 per diluted
share, goodwill impairment charge described previously. For the same 2009 period, net income was
$34.9 million, or $1.38 per diluted share, on revenues of $104.7 million.
17
Our revenues for the quarter ended June 30, 2010, decreased $11.9 million, or 11.3%, compared
to the second quarter of 2009. The decrease in revenue was due mainly to a combination of currency
effect and a decrease in average day rates from $18,676 in the second quarter of 2009 to $15,101 in
the current year quarter, which negatively impacted revenue by $15.8 million. The decrease was
partially offset by an increase in capacity of $5.0 million related to the deliveries in late 2009
and early 2010 of five new vessels. Overall utilization increased from 86.9% in the second quarter
of 2009 to 93.0% in the current year quarter, however the mix of days worked associated with
vessels with lower day rates resulted in a $1.1 million decrease in revenue.
North Sea
Revenues in the North Sea region decreased by $9.1 million, or 19.7%, to $37.2 million in the
second quarter of 2010 compared to the same period of 2009. This decrease was a result of a
combination of currency effects and the decrease in day rates from $21,199 to $16,478, which
contributed $7.6 million to the decrease in revenue. This is offset by the increase in capacity of
$2.0 million resulting primarily from the delivery of two new vessels, one in the fourth quarter of
2009 and one in the first quarter of 2010. Even though utilization increased from 93.1% in the
second quarter of 2009 to 95.1% in the current quarter, revenue decreased by $3.5 million
reflecting the negative effects of the mix of days worked associated with lower day rate vessels.
Operating income decreased $13.4 million compared to the prior year quarter, due to the decrease in
revenue and higher operating expenses. Drydock expense increased by $0.8 million due to
approximately 18 more drydock days. Depreciation expense increased mainly due to the new vessel
additions. General and administrative expense in the second quarter of 2010 was $2.7 million
compared to $2.5 million in the prior year quarter.
Southeast Asia
Revenues for our Southeast Asia based fleet decreased by $2.7 million, or 13.7%, to $16.8
million in the second quarter of 2010. The decrease was primarily attributable to the decrease in
day rates from $21,201 in the second quarter of 2009 to $16,817 in the current year quarter which,
coupled with currency effects, reduced revenue by $4.6 million. Capacity increased revenue by $2.8
million as a result of the addition of one new vessel in the third quarter of 2009. Utilization for
the second quarter of 2010 decreased from 93.8% to 92.8% in 2010 reducing revenue by $0.9
million. Operating income for Southeast Asia was $10.0 million in the second quarter of 2010
compared to $14.7 million in the same 2009 quarter. The decrease is due mainly to the decrease in
revenue coupled with an increase in drydock cost. Drydock costs increased by $1.1 million as a
result of 32 more drydock days in the second quarter of 2010 than in 2009.
Americas
The Americas region revenues for the second quarter of 2010 was basically unchanged compared
to the second quarter of 2009. Utilization increased from 80.2% in the second quarter of 2009 to
91.7% in the current year quarter contributing $3.3 million to revenue. Day rates decreased from
$15,637 in the second quarter of 2009 to $13,486 in the current year quarter, negatively impacting
revenue by $3.6 million. Two vessels added to our capacity in the second half of 2009 increased
revenue by $0.3 million. Operating loss was $92.5 million in the second quarter of 2010 compared to
operating income of $8.4 million in the second quarter of 2009. The 2010 operating loss includes a
$97.7 million charge related to the impairment of goodwill. Absent this charge, the region
generated operating income of $5.2 million. The decrease in
18
operating income is due mainly to a
$1.3 million increase in direct operating costs and a $1.5 million increase in drydock costs.
Although we experienced 10 less drydock days in the second quarter of 2010 compared to 2009, the
average cost of the drydocks was substantially higher.
Other
Other expenses in the second quarter of 2010 increased by $2.0 million compared to the prior
year quarter, resulting primarily from $1.8 million in higher expense related to foreign currency,
which reflects the increased strength of the U.S. Dollar, primarily against the GBP and NOK.
Tax Provision
Our income tax expense for the second quarter of 2010 was $5.4 million, compared to $0.04
million for the second quarter of 2009. The increase in the 2010 period was primarily attributable
to the $4.9 million Norwegian tax liability.
Comparison of the Six Months Ended June 30, 2010 with the Six Months Ended June 30, 2009
For the six months ended June 30, 2010, we had a net loss of $69.2 million, or $2.72 per
diluted share, on revenues of $177.4 million. During the same period in 2009, net income was $49.1
million, or $1.94 per diluted share, on revenues of $213.5 million. The 2010 net loss included a
$97.7 million goodwill impairment charge and the 2009 income was impacted by a $46.2 million
impairment charge related to construction in progress.
Revenue
decreased $36.0 million period over period. The decrease was due mainly to lower day
rates, offset by the increase in capacity as we benefited from the full period effect of new vessel
deliveries.
Operating income for the six month period absent the impairment charges was $27.3 million for
2010 and $86.8 million in 2009. The decrease is primarily due to the decrease in revenue and an
increase in direct operating cost and drydock cost coupled with the lower gains on asset sales.
Contributing to the increase cost was the weakening of the U.S. Dollar against the GBP and NOK.
North Sea
North Sea revenue decreased 19.7%, or $17.7 million, in the first six months of 2010
compared to 2009. The effect of the weakening of the U.S. Dollar increased revenue by $3.3 million,
however average day rates decreased from $21,138 in 2009 to $16,621 in 2010 contributing $23.3
million to the decrease in revenue. This decrease was partially offset by the increase in fleet
size due to the addition of two vessels after the second quarter of 2009, positively impacting
revenue by $2.3 million. Utilization increased from 88.8% in 2009 to 94.5% in 2010. The impact to
revenue was minimal due to the mix of higher utilization on lower day rate vessels. Operating
income decreased $27.3 million from 2009 to 2010 resulting primarily from the decrease in revenue,
coupled with an increase in operating cost, resulting from the increase in vessels, higher drydock
costs and lower gains on assets sales.
19
Southeast Asia
Revenue for our Southeast Asia based fleet decreased by $4.5 million, or 12.1%, from $37.2
million in the first six months of 2009 to $32.7 million in the same 2010 period. The decrease was
primarily attributable to a decrease in day rates and utilization, offset by an increase in fleet
size as a result of the addition of one vessel subsequent to the second quarter of 2009. Day rates
decreased from $20,959 in 2009 to $17,387 in 2010, which coupled with foreign currency effects,
contributed $7.2 million to the decrease in revenue. The increase in fleet size contributed $6.2
million to revenue. Utilization decreased from 90.5% in 2009 to 88.5% in 2010, reducing revenue by
$3.5 million. Operating income decreased $9.8 million from $28.8 million in 2009 to $19.0 million
this year. The decrease resulted from the lower revenues, increased in drydock costs resulting from
an additional 66 drydock days and a decrease on gain on sale of assets.
Americas
Our Americas region revenue decreased $13.8 million, from $86.0 million in 2009 to $72.3
million in 2010. Utilization decreased from 86.4% to 85.7% resulting in a $1.4 million decrease in
revenues. Capacity increased revenue by $1.4 million, as we added three new vessels in the last
half of 2009 offset by the sale of one vessel in the second quarter of 2010. A decrease in day
rates from $16,503 in 2009 to $13,428 in 2010, coupled with currency fluctuations, decreased
revenue by $13.8 million. We experienced an operating loss in the first six months of 2010 totaling
$91.8 million due primarily to a $97.7 million goodwill impairment charge. Absent the charge, the
region would have reported operating income of $5.8 million. We also recorded impairment of vessels
under construction totaling $46.2 million in the first six months of 2009. Absent that charge, 2009
operating income would have been $27.9 million. Excluding the impairment charges, our operating
income decreased by $22.1 million. This is the result of decreased revenue and increased operating
costs, due to the increase in vessels, and higher drydock costs. Drydock costs increased $4.5
million as we experienced 84 more drydock days than in 2009.
Other
In the six months ended June 30, 2010, other expenses totaled $9.1 million, a decrease of $2.2
million from 2009. The decrease was due primarily to the effect of the weakening of the U.S. Dollar
mainly against the GBP and NOK.
Tax Provision
We recorded a $10.3 million income tax benefit for the first half of 2010 compared to a
benefit of $19.9 million for the same 2009 period. Excluding special items, our effective tax rate
for the first six months of 2010 was 0.7%, which is lower than the 3.4% effective tax rate for 2009
due to our profitability from operations in higher tax jurisdictions decreasing year over year.
Liquidity, Capital Resources and Financial Condition
Our ongoing liquidity requirements are generally associated with our need to service debt,
fund working capital, acquire or improve equipment and make other investments. Since inception, we
have been active in the acquisition of additional vessels through both the resale market and new
construction. Bank financing, equity capital and internally generated funds have
20
historically
provided funding for these activities. Internally generated funds are directly related to fleet
activity and vessel day rates, which are generally dependent upon the demand for our vessels which
is ultimately determined by the supply and demand of crude oil and natural gas.
Net working capital at June 30, 2010, was $58.5 million. Cash on hand at June 30, 2010 totaled
$49.8 million. For the three months ended June 30, 2010, net cash provided by operating activities
was $17.4 million, cash used in investing activities was $7.1 million and cash used in financing
activities was $7.8 million. The $97.7 million goodwill impairment did not affect our cash flows,
liquidity or debt covenant compliance. Total debt at June 30, 2010 was $343.1 million, and debt net
of cash on hand was $293.3 million. At June 30, 2010 we did not have any amount drawn under our
$175.0 million revolving credit facility. In July 2010, we borrowed $51.0 million on the facility
for working capital purposes. While we have no remaining capital commitments under our new build program, we will
continue to pursue capital projects that allow us to maintain and improve our fleet value, mix and
earnings capacity.
We anticipate that our current level of cash on hand, cash flows from operations, and
availability under our credit facility will be adequate to repay our debts due and will provide
sufficient resources to finance our operating requirements. However, our ability to fund working
capital, capital expenditures and debt service in excess of cash on hand will be dependent upon the
success of our operations. To the extent that existing sources are insufficient to meet those cash
requirements, we would seek other debt or equity financing; however, we can give no assurances that
such debt or equity financing would be available or available at acceptable terms.
Currency Fluctuations and Inflation
The majority of our operations are international; therefore we are exposed to currency
fluctuations and exchange rate risks. Charters for vessels in the North Sea fleet are primarily
denominated in Pounds Sterling (GBP) with a portion denominated in Norwegian Kroner (NOK) and
Euros. Mostly all of our operating costs are denominated in the same currency as charter hire in
order to reduce the risk of currency fluctuations. For the periods indicated, the average
equivalent exchange rate per one U.S. Dollar were:
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Three Months Ended |
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Six Months Ended |
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June 30, |
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June 30, |
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2010 |
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2009 |
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2010 |
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2009 |
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1 US$= |
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1 US$= |
GBP |
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0.670 |
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0.644 |
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0.655 |
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0.669 |
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NOK |
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6.217 |
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6.483 |
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6.034 |
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6.665 |
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Euro |
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0.748 |
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0.734 |
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0.753 |
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0.750 |
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Reflected in the accompanying balance sheet as of June 30, 2010, is $3.7 million in
accumulated other comprehensive income which consists of $7.3 million that is related to changes in
foreign currency exchange rates offset by $3.6 million of accumulated losses related to the cash
flow hedges. Changes in the other comprehensive income are primarily non-cash items that are
attributable to investments in vessels and dollar based capitalization between our parent company
and our foreign subsidiaries.
After evaluating the U.S. Dollar debt, we have determined that it is in our best interest not
to use any financial instruments to hedge the exposure of our revenue and costs of operations to
currency fluctuations under present conditions. Our decision is based on a number of factors,
including among others:
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the cost of using hedging instruments in relation to the risks of currency
fluctuations, |
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the propensity for adjustments in currency denominated vessel day rates over time to
compensate for changes in the purchasing power of the currency as measured in U.S.
Dollars, |
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the level of U.S. Dollar denominated borrowings available to us, and |
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the conditions in our U.S. Dollar generating regional markets. |
One or more of these factors may change and we, in response, may choose to use financial
instruments to hedge risks of currency fluctuations with regards to our revenue and costs of
operations. We periodically enter into forward currency contracts to specifically hedge the
foreign currency exposure related to firm contractual commitments in the form of future vessel
payments. These hedging relationships were formally documented at inception and the contracts have
been and continue to be highly effective. As a result, by design, there is an exact offset between
the gain or loss exposure in the related underlying contractual commitment. At December 31, 2009,
we had forward currency contracts on two vessels under construction. As of February 2010, we had
taken delivery of the new build vessels and had terminated the associated foreign currency
contracts.
We also have an interest rate swap agreement for a portion of the Facility Agreement that has
fixed the interest rate at 4.145% on $100.0 million of the Facility. The interest rate swap is
accounted for as a cash flow hedge. We report changes in the fair value of the cash flow hedges in
accumulated other comprehensive income. The consolidated balance sheet also contains cash flow
hedges, in the liability section reflecting the fair value of the interest rate swaps which was
$7.6 million at June 30, 2010. For the six months ended June 30, 2010 a loss of $1.3 million has
been reclassified from other comprehensive income to interest expense. We expect to reclassify $2.0
million of deferred loss on the interest rate swaps to interest expense during the next 12 months,
based on current interest rates.
To date, general inflationary trends have not had a material effect on our operating revenues
or expenses.
Forward-Looking Statements
This Form 10-Q contains certain forward-looking statements and other statements that are not
historical facts concerning, among other things, market conditions, the demand for marine and
transportation support services and future capital expenditures. These statements are subject to
certain risks, uncertainties and assumptions, including, without limitation:
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operational risk, |
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catastrophic or adverse sea or weather conditions, |
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dependence on the oil and gas industry, |
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volatility in oil and natural gas prices, |
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delay or cost overruns on construction projects or insolvency of the shipbuilders, |
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lack of shipyard or equipment availability, |
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ongoing capital expenditure requirements, |
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uncertainties surrounding environmental and governmental laws and regulations, |
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uncertainties and risks relating to or caused by the April 2010 explosion and fire
on a deepwater U.S. Gulf of Mexico drilling rig, the resulting losses and the U.S. |
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Department of Interior moratorium on deepwater drilling, |
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risks relating to compliance with the Jones Act, |
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risks relating to leverage, |
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risks of foreign operations, |
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risk of war, sabotage, piracy or terrorism, |
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assumptions concerning competition, |
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risks of currency fluctuations, and |
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other matters. |
These statements are based on certain assumptions and analyses made by us in light of our
experience and perception of historical trends, current conditions, expected future developments
and other factors we believe are appropriate under the circumstances. Such statements are subject
to risks and uncertainties, including the risk factors discussed above and those discussed in our
Form 10-K for the year ended December 31, 2009, filed with the SEC, general economic and business
conditions, the business opportunities that may be presented to and pursued by us, changes in law
or regulations and other factors, many of which are beyond our control.
We cannot assure you that we have accurately identified and properly weighed all of the
factors which affect market conditions and demand for our vessels, that the information upon which
we have relied is accurate or complete, that our analysis of the market and demand for our vessels
is correct, or that the strategy based on that analysis will be successful.
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ITEM 3. |
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QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK |
Interest Rate Sensitivity
Our financial instruments that are potentially sensitive to changes in interest rates include
our 7.75% Senior Notes. As of June 30, 2010, the fair value of these notes, based on quoted market
prices, was approximately $151.2 million compared to a carrying amount of $159.7 million.
Exchange Rate Sensitivity
We operate in a number of international areas and are involved in transactions denominated in
currencies other than U.S. Dollars, which exposes us to foreign currency exchange risk. At various
times we may utilize forward exchange contracts, local currency borrowings and the payment
structure of customer contracts to selectively hedge exposure to exchange rate fluctuations in
connection with monetary assets, liabilities and cash flows
denominated in certain foreign currency. We do not hold or issue forward exchange contracts
or other derivative financial instruments for speculative purposes.
Other information required under Part I, Item 3 is set forth in Managements Discussion and
Analysis of Financial Condition and Results of Operations and is incorporated herein.
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ITEM 4. |
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CONTROLS AND PROCEDURES |
(a) Evaluation of disclosure controls and procedures.
Based on their evaluation of our disclosure controls and procedures as of the end of the
period covered by this report, our Chief Executive Officer and Chief Financial Officer have
concluded that the disclosure controls and procedures are effective for the period covered by the
report ensuring that the information required to be disclosed by us in the reports that we file or
submit under the Securities Exchange Act is recorded, processed, summarized and reported within the
time periods specified in the SECs rules and forms.
(b) Evaluation of internal controls and procedures.
As of December 31, 2009, our management determined that our internal controls over financial
reporting were effective. Our assessment of the effectiveness of our internal controls over
financial reporting as of December 31, 2009, has been audited by UHY LLP, an independent public
accounting firm, as stated in our Form 10-K for the year ended December 31, 2009 filed with the
SEC.
There were no changes in our internal controls over financial reporting that occurred during
the period covered by this report that have materially affected, or are reasonably likely to
materially affect, our internal control over financial reporting.
PART II. OTHER INFORMATION
Recent Events in the U.S. Gulf of Mexico May Adversely Impact Our Operations and Financial
Condition.
On April 20, 2010, an explosion and fire on a deepwater U.S. Gulf of Mexico drilling rig
resulted in 11 deaths, multiple personal injuries, significant property damage and the release of
hydrocarbons that resulted in significant pollution and contamination. The U.S. Department of
Interior issued a memorandum imposing a temporary moratorium on deepwater drilling on the outer
continental shelf. Although the subject of ongoing litigation, the moratorium presently extends to
November 30, 2010.
At this time, we cannot predict what, if any, impact the incident may have on the regulation
of offshore oil and gas exploration and development activity, the cost or availability of insurance
coverage to cover the risks of such operations, or what actions may be taken by our customers,
governmental agencies, or other industry participants in response to the incident. In
addition, we cannot predict whether any possible changes in regulations would affect only
deepwater drilling or all operations in the U.S. Gulf of Mexico or would also affect drilling and
operations in other regions around the world in which we operate. Changes in laws or regulations
regarding offshore oil and gas exploration and development activities, the cost or availability of
insurance, and decisions by customers, governmental agencies, or other industry participants could
reduce demand for our services or increase our costs of operations, which could have a negative
impact on our financial condition and operating results, but we cannot reasonably or reliably
estimate that such changes will occur, when they will occur, or if they will impact us.
24
We currently have a significant portion of our U.S. fleet involved in the clean-up efforts in
the Gulf of Mexico, and these vessels, at some time, may be released into a potentially restricted,
and more competitive market in the Gulf of Mexico. We may attempt to relocate these vessels to
other locations in the Americas if more profitable opportunities arise outside the Gulf of Mexico;
however, no assurance can be given that our vessels can be relocated outside the U.S. Gulf of
Mexico, or relocate more profitably than in the U.S. Gulf of Mexico. As a result of the incident in
the Gulf of Mexico and the subsequent issues regarding drilling in the region, our competitors
could redeploy their vessels into other regions in which we operate, which would increase the
competition in that area, potentially resulting in lowered profit margins. In addition, our
customers may seek to renegotiate the terms of their contracts or avoid their obligations under the
contracts, both of which could adversely affect our business, financial condition and results of
operations.
Recently, we were named as one of several vessel owner/operator defendants, among other
defendants, in litigation related to the firefighting and related activities of numerous vessels
prior to the April 2010 sinking of the drilling rig. Based on our initial investigation, we believe
that any claims against us in the litigation are without merit. As a result, we believe that such
litigation should not have a material adverse effect on our financial condition or results of
operation. Although we have no knowledge of any other litigation or claims against us relating to
the recent events in the Gulf of Mexico, no assurance can be given that we will not be involved in
other litigation or claims in the future or that they will not have a material adverse effect on
our financial condition or results of operation.
Exhibits
See Exhibit Index for list of Exhibits filed herewith.
SIGNATURES
Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly
caused this report to be signed on its behalf by the undersigned thereunto duly authorized.
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GulfMark Offshore, Inc.
(Registrant)
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By: |
/s/ Quintin V. Kneen
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Quintin V. Kneen |
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Executive Vice President and Chief Financial
Officer |
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Date:
July 29, 2010
25
INDEX TO EXHIBITS
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Filed Herewith or |
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Incorporated by Reference |
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from the |
Exhibits |
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Description |
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Following
Documents |
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3.1
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Certificate of Incorporation, as amended
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Exhibit 3.1 to our current report on Form 8-K filed on February 24, 2010 |
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3.2
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Bylaws, as amended
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Exhibit 3.2 to our current report on Form 8-K filed on February 24, 2010 |
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4.1
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Description of GulfMark Offshore, Inc. Common Stock
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Exhibit 4.1 to our current report on Form 8-K filed on February 24, 2010 |
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4.2
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Form of U.S. Citizen Stock Certificates
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Exhibit 4.2 to our current report on Form 8-K filed on February 24, 2010 |
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4.3
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Form of Non-U.S. Citizen Stock Certificates
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Exhibit 4.3 to our current report on Form 8-K filed on February 24, 2010 |
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4.4
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Indenture, dated as of July 21, 2004, between GulfMark Offshore, Inc., as the
Company, and U.S. Bank National Association, as Trustee, including a form of the
Companys 7.75% Senior Notes due 2014
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Exhibit 4.4 to our quarterly report on Form 10-Q for the quarter ended September
30, 2004 |
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4.5
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First Supplemental Indenture, dated as of February 24, 2010, between GulfMark
Offshore, Inc. (f/k/a New GulfMark Offshore, Inc.), as the Company and U.S. Bank
Association, as Trustee, for the Companys 7.75% Senior Notes due 2014
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Exhibit 10.1 to our current report on Form 8-K filed on
February 24, 2010 |
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4.6
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Form of Debt Securities Indenture (Including Form of Note for Debt Securities)
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Exhibit 4.7 to our Post-Effective Amendment No. 2/A to our Registration
Statement on Form S-3 filed on May 14, 2010. |
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4.7
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See Exhibit No. 3.1 for provisions of the Certificate of Incorporation and
Exhibit 3.2 for provisions of the Bylaws defining the rights of the holders of
Common Stock
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Exhibits 3.1 and 3.2 to our current report on Form 8-K filed on February 24, 2010 |
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10.1
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GulfMark Offshore, Inc. 2010 Omnibus Equity Incentive Plan
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Exhibit A to our Proxy Statement on Form DEF 14A filed on April 30, 2010 |
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10.2
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Amendment No. 1 to the GulfMark Offshore, Inc. 2010 Omnibus Equity Incentive Plan
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Exhibit 10.2 to our current report on Form 8-K filed on June 11, 2010 |
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10.3
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Form of Notice of Stock Option Award and Form of Stock Option Agreement (2010
Omnibus Equity Incentive Plan)
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Exhibit 10.3 to our current report on Form 8-K filed on June 11, 2010 |
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10.4
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Form of Notice Restricted Stock Award and Form of Restricted Stock Agreement
(2010 Omnibus Equity Incentive Plan)
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Exhibit 10.4 to our current report on Form 8-K filed on June 11, 2010 |
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31.1
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Section 302 Certification for B.A. Streeter
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Filed herewith |
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31.2
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Section 302 Certification for Q.V. Kneen
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Filed herewith |
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32.1
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Section 906 Certification furnished for B.A. Streeter
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Filed herewith |
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32.2
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Section 906 Certification furnished for Q. V. Kneen
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Filed herewith |
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101
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The following materials from GulfMark Offshore, Inc.s Quarterly
Report on Form 10-Q for the quarter ended June 30, 2010,
formatted in XBRL (Extensible Business Reporting Language): (i) Condensed
Consolidated Balance Sheets (ii) Condensed Consolidated
Statements of Operations, (iii) Condensed Consolidated Statements
of Stockholders Equity (iv) Condensed Consolidated Statement of
Cash Flows and (v) Notes to Condensed Consolidated Financial
Statements, tagged as blocks of text.
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Filed herewith |
27