<PAGE>
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
----------
FORM 8-K
CURRENT REPORT
PURSUANT TO SECTION 13 OR 15 (D) OF THE
SECURITIES EXCHANGE ACT OF 1934
Date of Report (Date of earliest event reported) May 31, 1996
SEACOR HOLDINGS, INC.
- --------------------------------------------------------------------------------
(Exact name of registrant as specified in its charter)
Delaware 0-20904 13-3542736
- --------------------------------------------------------------------------------
(State or other jurisdiction of (Commission (I.R.S. employer
incorporation or organization) File Number) identification no.)
11200 Westheimer, Suite 850, Houston. Texas 77042
- --------------------------------------------------------------------------------
(Address of principal executive offices) (Zip Code)
Registrant's telephone number, including area code (713) 782-5990
-----------------------------
Not Applicable
- --------------------------------------------------------------------------------
(Former name or former address, if changed since last report.)
<PAGE>
Item 5. Other Events
As previously reported in a Current Report on Form 8-K filed with
the Securities and Exchange Commission on June 7, 1996 by SEACOR Holdings,
Inc. ("SEACOR"), on May 31, 1996 SEACOR acquired McCall Enterprises, Inc.
("McCall") and affiliated companies (collectively with McCall, the "McCall
Companies"). The acquisition of the McCall Companies (the "McCall
Acquisition") was accomplished, in part, by merging SEACOR Enterprises, Inc.,
SEACOR Support Services, Inc. and SEACOR N.F. Inc., wholly owned Louisiana
subsidiaries of SEACOR, with and into McCall, McCall Support Vessels, Inc. and
N.F. McCall Crews, Inc., respectively (collectively, the "McCall Merger
Companies"), with the McCall Merger Companies being the surviving corporations
of such mergers (collectively, the "Mergers").
Immediately after the effectiveness of the Mergers, SEACOR, directly
or through McCall, acquired all of the outstanding capital stock of the other
McCall Companies not already owned by SEACOR or one of the McCall Merger
Companies. SEACOR accomplished such acquisitions through four Share Exchange
Agreements with the stockholders of such McCall Companies.
In consideration for the McCall Acquisition, the former stockholders
of the McCall Companies have rights to receive an aggregate of approximately
1.3 million shares of SEACOR common stock, subject to an adjustment based upon
a final determination of the working capital of the McCall Companies as of May
31, 1996.
The McCall Acquisition is being accounted for as a
pooling-of-interests. Attached hereto as Annex A are supplemental consolidated
balance sheets of SEACOR and subsidiaries as of December 31, 1995 and 1994, and
the related supplemental consolidated statements of income, changes in
stockholders' equity and cash flows for each of the three years in the period
ended December 31, 1995. The supplemental consolidated financial statements give
retroactive effect to the McCall Acquisition that occurred on May 31, 1996.
<PAGE>
Item 7. Financial Statements and Exhibits
- ------- ---------------------------------
(c) Exhibits
23 Consent of Arthur Andersen LLP.
27 Financial Data Schedule.
<PAGE>
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 hereunto duly authorized.
SEACOR HOLDINGS, INC.
(Registrant)
DATE: June 14, 1996
By: /s/ Charles Fabrikant
----------------------------
Charles Fabrikant, Chairman of the
Board, President and Chief Executive
Officer
<PAGE>
ANNEX A
<PAGE>
REPORT OF INDEPENDENT PUBLIC ACCOUNTANTS
To SEACOR Holdings, Inc.:
We have audited the supplemental consolidated balance sheets of SEACOR
Holdings, Inc. (a Delaware corporation) and subsidiaries as of December 31,
1995 and 1994, and the related supplemental consolidated statements of
income, changes in stockholders' equity and cash flows for each of the three
years in the period ended December 31, 1995. The supplemental consolidated
financial statements give retroactive effect to the merger with McCall
Affiliated Companies that occurred on May 31, 1996, and which has been accounted
for as a pooling of interests as described in Note 19. These supplemental
financial statements are the responsibility of the Company's management. Our
responsibility is to express an opinion on these supplemental financial
statements based on our audits. We did not audit the financial statements of
CRN Holdings Inc. and subsidiaries, which statements reflect total assets and
total revenues of 9 percent and 17 percent, respectively, in 1995 of the
related supplemental consolidated totals. These statements were audited by
other auditors whose report thereon has been furnished to us, and our
opinion, insofar as it relates to the amounts included for those entities, is
based solely on the report of the other auditors.
We conducted our audits in accordance with generally accepted auditing
standards. Those standards require that we plan and perform the audit to
obtain reasonable assurance about whether the financial statements are free
of material misstatements. An audit includes examining, on a test basis,
evidence supporting the amounts and disclosures in the financial statements.
An audit also includes assessing the accounting principles used and
significant estimates made by management, as well as evaluating the overall
financial statement presentation. We believe that our audits provide a
reasonable basis for our opinion.
In our opinion, based on our audits and the report of other auditors, the
supplemental financial statements referred to above present fairly, in all
material respects, the financial position of SEACOR Holdings, Inc. and
subsidiaries as of December 31, 1995 and 1994, and the results of their
operations and their cash flows for each of the three years in the period
ended December 31, 1995, after giving retroactive effect to the merger with
McCall Affiliated Companies as described in Note 19, in conformity with
generally accepted accounting principles.
Arthur Andersen LLP
New Orleans, Louisiana
June 7, 1996
<PAGE>
SEACOR HOLDINGS, INC. AND SUBSIDIARIES
SUPPLEMENTAL CONSOLIDATED BALANCE SHEETS
DECEMBER 31, 1995 AND 1994
(IN THOUSANDS, EXCEPT SHARE DATA)
<TABLE>
<CAPTION>
ASSETS 1995 1994
----------- -----------
<S> <C> <C>
Current Assets:
Cash and temporary cash investments, including restricted cash of
$305 in 1994 ........................................................ $ 28,614 $ 44,637
Investment securities ................................................ 623 595
Trade and other receivables, net of allowance for doubtful accounts
of $380 and $108, respectively ...................................... 33,725 13,844
Affiliate receivables ................................................ 520 2,594
Inventories .......................................................... 1,603 577
Prepaid expenses and other ........................................... 3,490 1,047
----------- -----------
Total current assets .............................................. 68,575 63,294
----------- -----------
Investments in and Receivables from 50% or Less Owned Companies, at
Equity ............................................................... 6,484 6,137
----------- -----------
Property and Equipment:
Vessels and equipment ................................................ 327,352 222,142
Other ................................................................ 10,594 3,611
----------- -----------
337,946 225,753
Less-accumulated depreciation ........................................ 75,038 59,726
----------- -----------
262,908 166,027
----------- -----------
Other Assets .......................................................... 13,218 2,687
----------- -----------
$ 351,185 $ 238,145
=========== ===========
LIABILITIES AND STOCKHOLDERS' EQUITY
Current Liabilities:
Current portion of long-term debt .................................... $ 2,489 $ 5,896
Loans from stockholders .............................................. 1,665 1,470
Accounts payable -- trade ............................................ 7,742 3,245
Accounts payable -- affiliates ....................................... 204 396
Accrued insurance .................................................... 975 885
Accrued wages ........................................................ 1,252 565
Accrued income taxes ................................................. 1,365 498
Other current liabilities ............................................ 4,360 2,982
----------- -----------
Total current liabilities ......................................... 20,052 15,937
----------- -----------
Long-Term Debt ........................................................ 108,066 73,621
Deferred Income Taxes ................................................. 36,182 34,093
Deferred Gain and Other Liabilities ................................... 2,484 1,733
Minority Interest in Subsidiary ....................................... 937 1,279
Stockholders' Equity:
Common stock, $.01 par value, 20,000,000 shares authorized; 9,868,343
and 7,191,573 shares issued and 9,812,575 and 7,135,805 shares
outstanding in 1995 and 1994, respectively .......................... 99 72
Additional paid-in capital ........................................... 127,317 66,319
Retained earnings .................................................... 57,852 46,528
Less 55,768 shares held in treasury, at cost ......................... (576) (576)
Unamortized restricted stock ......................................... (159) --
Currency translation adjustments ..................................... (1,069) (861)
----------- -----------
Total stockholders' equity ........................................ 183,464 111,482
----------- -----------
$ 351,185 $238,145
=========== ===========
</TABLE>
The accompanying notes are an integral part of these supplemental financial
statements
and should be read in conjunction herewith.
1
<PAGE>
SEACOR HOLDINGS, INC. AND SUBSIDIARIES
SUPPLEMENTAL CONSOLIDATED STATEMENTS OF INCOME
FOR THE YEARS ENDED DECEMBER 31, 1995, 1994, AND 1993
(IN THOUSANDS, EXCEPT SHARE DATA)
<TABLE>
<CAPTION>
1995 1994 1993
------------ ----------- -----------
<S> <C> <C> <C>
Operating Revenue:
Marine ......................................................... $ 104,894 $ 93,985 $ 92,168
Environmental --
Oil spill response ............................................ 8,927 -- --
Retainer and other services ................................... 12,838 -- --
------------ ----------- -----------
126,659 93,985 92,168
------------ ----------- -----------
Costs and Expenses:
Cost of spill response ......................................... 7,643 -- --
Operating expenses --
Marine ........................................................ 66,205 55,860 53,958
Environmental ................................................. 4,580 -- --
Administrative and general ..................................... 13,953 7,278 7,187
Depreciation and amortization .................................. 18,842 14,108 12,107
------------ ----------- -----------
111,223 77,246 73,252
------------ ----------- -----------
Operating Income ................................................ 15,436 16,739 18,916
------------ ----------- -----------
Other Income (Expense):
Interest income ................................................ 2,370 1,874 1,063
Other .......................................................... 667 (267) 122
Gain/(loss) from equipment sales or retirements ................ 3,850 (388) (8)
Interest expense ............................................... (6,681) (5,422) (4,782)
------------ ----------- -----------
206 (4,203) (3,605)
------------ ----------- -----------
Income Before Income Taxes, Minority Interest, Equity in
Earnings of 50% or Less Owned Companies, and Extraordinary Item 15,642 12,536 15,311
------------ ----------- -----------
Income Tax Expense (Benefit):
Current ........................................................ 5,175 4,516 3,998
Deferred ....................................................... 335 (148) 1,341
------------ ----------- -----------
5,510 4,368 5,339
------------ ----------- -----------
Income Before Minority Interest, Equity in Earnings of 50%
or Less Owned Companies, and Extraordinary Item ................ 10,132 8,168 9,972
Minority Interest in (Income) Loss of Subsidiary ................ 321 184 (51)
Equity in Net Earnings of 50% or Less Owned Companies .......... 872 975 287
------------ ----------- -----------
Income Before Extraordinary Item ................................ 11,325 9,327 10,208
Extraordinary Item -- Loss on Extinguishment of Debt ........... -- -- (1,093)
------------ ----------- -----------
Net Income ...................................................... $ 11,325 $ 9,327 $ 9,115
------------ ----------- -----------
Earnings (Loss) Per Common Share -- Assuming No Dilution:
Income before extraordinary item .............................. $ 1.50 $ 1.31 $ 1.43
Extraordinary item ............................................ -- -- (0.15)
------------ ----------- -----------
Net income .................................................... $ 1.50 $ 1.31 $ 1.28
============ =========== ===========
Earnings (Loss) Per Common Share -- Assuming Full Dilution:
Income before extraordinary item .............................. $ 1.36 $ 1.22 $ 1.36
Extraordinary item ............................................ -- -- (0.14)
------------ ----------- -----------
Net income .................................................... $ 1.36 $ 1.22 $ 1.22
============ =========== ===========
Weighted Average Common Shares:
Assuming no dilution ........................................... 7,540,780 7,135,805 7,121,147
Assuming full dilution ......................................... 10,025,782 9,618,994 8,360,174
</TABLE>
The accompanying notes are an integral part of these supplemental financial
statements
and should be read in conjunction herewith.
2
<PAGE>
SEACOR HOLDINGS, INC. AND SUBSIDIARIES
SUPPLEMENTAL CONSOLIDATED STATEMENTS OF CHANGES IN EQUITY
FOR THE YEARS ENDED DECEMBER 31, 1995, 1994, AND 1993
(IN THOUSANDS)
<TABLE>
<CAPTION>
ADDITIONAL UNAMORTIZED CURRENCY
COMMON PAID-IN RETAINED TREASURY RESTRICTED TRANSLATION
STOCK CAPITAL EARNINGS STOCK STOCK ADJUSTMENTS
-------- ------------ ---------- ---------- ------------- -------------
<S> <C> <C> <C> <C> <C> <C>
1995
- ------------------------------------
Balance, December 31, 1994 .......... $72 $ 66,319 $ 46,528 $(576) $ -- $ (861)
Add -- Issuance of common stock:
NRC Merger .................. 3 5,704 -- -- -- --
CNN Acquisition ............. 5 11,295 -- -- -- --
Public Offering ............. 16 36,926 -- -- -- --
Coastal/Phibro Transaction . 3 7,497 -- -- -- --
Other ....................... -- 4 -- -- -- --
-- Issuance of restricted stock -- 216 -- -- (216) --
-- Amortization of restricted
stock ............................. -- -- -- -- 57 --
-- Net income for the year
ended December 31, 1995 ........... -- -- 11,325 -- -- --
-- Net currency translation
adjustments ....................... -- -- -- -- -- (208)
Deduct -- Public offering costs .... -- (644) -- -- -- --
-- Dividends paid .............. -- -- (1) -- -- --
-------- ------------ ---------- ---------- ------------- -------------
Balance, December 31, 1995 .......... $99 $127,317 $ 57,852 $(576) $(159) $(1,069)
======== ============ ========== ========== ============= =============
1994
- ------------------------------------
Balance, December 31, 1993 .......... $72 $ 66,319 $ 37,202 $(576) $ -- $(2,484)
Add -- Net income for the year
ended December 31, 1994 ........... -- -- 9,327 -- -- --
-- Net currency translation
adjustments ....................... -- -- -- -- -- 1,623
Deduct -- Dividends paid ............ -- -- (1) -- -- --
-------- ------------ ---------- ---------- ------------- -------------
Balance, December 31, 1994 .......... $72 $ 66,319 $ 46,528 $(576) $ -- $ (861)
======== ============ ========== ========== ============= =============
1993
- ------------------------------------
Balance, December 31, 1992 .......... $71 $ 64,445 $28,094 $(576) $ -- $(2,388)
Add -- Issue of common stock to
acquire vessels ................... 1 1,874 -- -- -- --
-- Net income for the year
ended December 31, 1993 ........... -- -- 9,115 -- -- --
Deduct -- Net currency translation
adjustments ....................... -- -- -- -- -- (96)
-- Dividends paid .............. -- -- (7) -- -- --
-------- ------------ ---------- ---------- ------------- -------------
Balance, December 31, 1993 .......... $72 $ 66,319 $ 37,202 $(576) $ -- $(2,484)
======== ============ ========== ========== ============= =============
</TABLE>
The accompanying notes are an integral part of these supplemental financial
statements
and should be read in conjunction herewith.
3
<PAGE>
SEACOR HOLDINGS, INC. AND SUBSIDIARIES
SUPPLEMENTAL CONSOLIDATED STATEMENTS OF CASH FLOWS
FOR THE YEARS ENDED DECEMBER 31, 1995, 1994, AND 1993
(IN THOUSANDS)
<TABLE>
<CAPTION>
1995 1994 1993
---------- ---------- ----------
<S> <C> <C> <C>
Cash Flows from Operating Activities:
Net income ....................................................... $ 11,325 $ 9,327 $ 9,115
Depreciation and amortization .................................... 18,842 14,108 12,107
Mobilization amortization ........................................ 44 415 953
Restricted stock amortization .................................... 57 -- --
Bad debt expense ................................................. 100 98 20
Debt discount amortization ....................................... 277 309 97
Deferred income taxes ............................................ 335 (148) 1,341
Equity in net earnings of 50% or less owned companies ........... (872) (975) (287)
Extraordinary loss, extinguishment of debt ....................... -- -- 1,093
Gain on purchase of 6% Convertible Subordinated Notes ........... (199) -- --
(Gain)/loss from equipment sales or retirements .................. (3,850) 388 8
Minority interest in income (loss) of subsidiary ................. (321) (184) 51
Other ............................................................ 31 176 19
Changes in operating assets and liabilities -- ...................
Decrease in restricted cash ..................................... 308 87 293
(Increase) decrease in receivables .............................. (15,280) (261) (4,040)
(Increase) in inventories ....................................... (80) (255) (132)
(Increase) in prepaid expenses and other assets ................. (1,620) (236) (529)
Increase (decrease) in payables and accrued and other
liabilities ...................................................... 670 (1,699) 3,307
---------- ---------- ----------
Net cash provided by operations ................................ 9,767 21,150 23,416
---------- ---------- ----------
Cash Flows from Investing Activities:
Purchases of property and equipment .............................. (14,534) (3,371) (24,194)
Proceeds from the sale of marine vessels and equipment .......... 7,522 450 32
Investments in and advances to 50% or less owned companies ...... (916) (1,342) (89)
Principal payments on notes due from 50% or less owned companies 431 -- --
Principal payments received under a sale-type lease ............. 117 -- --
Cash acquired in NRC Merger ...................................... 2,176 -- --
Acquisition of John E. Graham & Sons ............................. (73,463) -- --
Purchase of investment securities .............................. (28) (592) --
---------- ---------- ----------
Net cash (used in) investing activities ........................ (78,695) (4,855) (24,251)
---------- ---------- ----------
Cash Flows from Financing Activities:
Payments of long-term debt and loans from stockholders .......... (66,609) (10,888) (36,986)
Proceeds from issuance of long-term debt and loans from
stockholders .................................................... 87,283 3,175 --
Net proceeds from sale of common stock and capital contributions 36,302 -- --
Payment of initial public offering costs ......................... -- -- (155)
Purchase of 6% Convertible Subordinated Notes .................... (1,980) -- --
Debt issue cost, Den norske Bank ASA, revolving credit facility . (667) -- --
Payment of debt extinguishment costs ............................. -- -- (519)
Payments on capital lease obligation ............................. (1,037) -- --
Net proceeds from sale of 6% Convertible Subordinated Notes ..... -- -- 55,324
Payment of dividends ............................................. (1) (1) (7)
---------- ---------- ----------
Net cash provided by (used in) financing activities ........... 53,291 (7,714) 17,657
---------- ---------- ----------
Effects of Exchange Rate Changes on Cash and Cash Equivalents .... (81) 130 (80)
---------- ---------- ----------
Net Increase (Decrease) in Cash and Cash Equivalents ............. (15,718) 8,711 16,742
Cash and Cash Equivalents, beginning of period .................... 44,332 35,621 18,879
---------- ---------- ----------
Cash and Cash Equivalents, end of period .......................... $ 28,614 $ 44,332 $ 35,621
========== ========== ==========
</TABLE>
The accompanying notes are an integral part of these supplemental financial
statements
and should be read in conjunction herewith.
4
<PAGE>
<PAGE>
SEACOR HOLDINGS, INC. AND SUBSIDIARIES
NOTES TO SUPPLEMENTAL CONSOLIDATED FINANCIAL STATEMENTS
1. NATURE OF OPERATIONS AND ACCOUNTING POLICIES:
NATURE OF OPERATIONS --
SEACOR Holdings, Inc. ("SEACOR") and its subsidiaries (the "Company")
furnish vessel support in the offshore oil and gas exploration and production
industry and provide contractual oil spill response and related services to
companies who store, transport, produce, or handle petroleum and certain
non-petroleum oils as required by the Oil Pollution Act of 1990 ("OPA 90").
The Company operates principally in the United States, offshore West Africa,
the North Sea and Mexico.
BASIS OF CONSOLIDATION --
The supplemental consolidated financial statements include the accounts of
SEACOR and its subsidiaries including the McCall Affilicated Companies, see
Note 19, all of which are wholly owned by SEACOR, except for a 9% minority
interest in a subsidiary that owns 11 vessels and bareboat charters-in one
vessel which operate in the North Sea and U.S. Gulf of Mexico. The equity
method of accounting is used by the Company when it has a 20% to 50%
ownership interest in the voting stock of other companies and the ability to
exercise significant influence over their operating and financial policies.
The investments in 50% or less owned companies are carried at cost, adjusted
for the Company's equity in their undistributed earnings. All significant
intercompany accounts and transactions between the Company and its majority
and wholly owned subsidiaries have been eliminated in consolidation.
The preparation of financial statements in conformity with generally
accepted accounting principles requires management to make estimates and
assumptions that affect the reported amounts of assets and liabilities and
disclosure of contingent assets and liabilities at the date of the financial
statements and the reported amounts of revenues and expenses during the
reporting period. Actual results could differ from those estimates.
CASH AND TEMPORARY CASH INVESTMENTS --
For purposes of the Consolidated Statements of Cash Flows, cash
equivalents refer to securities with original maturities of three months or
less.
INVESTMENT SECURITIES --
The Company holds investments in U.S. Government debt securities. These
securities are accounted for as held-to-maturity securities; and, accordingly
are reflected at amortized cost, which approximates fair value at December
31, 1995 and 1994.
ACCOUNTS RECEIVABLE --
Customers of vessel support services are primarily major and large
independent oil and gas exploration and production companies; whereas,
customers of oil spill response services include tank vessel owner/operators,
refiners, terminals, exploration and production facilities and pipeline
operators. The Company's customers are granted credit on a short-term basis
and related credit risks are considered minimal.
INVENTORIES --
Inventories consist of vessel spare parts, fuel, and supplies that are
recorded at cost and charged to vessel expenses as consumed.
PROPERTY AND EQUIPMENT --
Property and equipment are recorded at historical cost and depreciated
over the estimated useful lives of the related assets. Depreciation is
computed on the straight line method for financial reporting
5
<PAGE>
SEACOR HOLDINGS, INC. AND SUBSIDIARIES
NOTES TO SUPPLEMENTAL CONSOLIDATED FINANCIAL STATEMENTS
1. NATURE OF OPERATIONS AND ACCOUNTING POLICIES: (Continued)
purposes. Maintenance and repair costs, including routine drydock
inspections on vessels in accordance with maritime regulations, are charged
to operating expense as incurred. Expenditures that extend the useful life or
improve the marketing and commercial characteristics of vessels and major
renewals or improvements to other properties are capitalized.
Vessels and related equipment are depreciated over 20 -- 25 years; all
other property and equipment are depreciated and amortized over two to ten
years.
OTHER ASSETS --
Other assets include the following for the years ended December 31, 1995
and 1994, in thousands of dollars:
<TABLE>
<CAPTION>
1995 1994
------- -------
<S> <C> <C>
Goodwill, net of accumulated amortization of $167 in 1995 (see
Note 4 and 7) ............................................... $ 7,837 $ --
Sale-type lease (see Note 12) ................................ 2,543 --
Debt issue costs, net of accumulated amortization of $558 in
1995 and $643
in 1994 ..................................................... 2,214 1,994
Other ........................................................ 624 693
------- -------
$13,218 $2,687
======= =======
</TABLE>
Goodwill reflects the excess of cost over the estimated fair value of the
net assets acquired upon the merger of NRC Holdings, Inc. ("NRC Holdings")
with and into a subsidiary of SEACOR (see Note 4) and the excess of the value
of SEACOR's common stock issued in connection with the cancellation of two
customers' options to acquire up to 40% of a subsidiary's common stock over
the previously recorded carrying value of those options (see Note 7).
Goodwill is being amortized on a straight line basis over its estimated
useful life of 20 years.
Deferred debt issue costs relate primarily to the Company's sale of 6%
Convertible Subordinated Notes ("6% Notes") in July 1993 and the
establishment of an $85,000,000 revolving credit loan facility (the "DnB
Facility") with Den norske Bank ASA ("DnB") in September 1995 at a cost of
$667,000. Debt issue costs are being amortized on a straight line basis over
the life of the related debt, ranging from five to ten years.
Combined deferred charge amortization expense was $729,000, $769,000 and
$1,430,000 for the years ended December 31, 1995, 1994, and 1993. A
significant amount of previously deferred mobilization costs was amortized to
expense in 1993 but declined in 1994 and 1995. The Company's policy has been
to defer any significant costs to relocate vessels in association with
long-term charters (i.e., charters having a term of one year or more at
inception) in which the term charter rates are adequate to recover the
mobilization expenses. These deferred mobilization costs are typically
amortized to expense over the primary term of the related charter contracts.
INCOME TAXES --
Effective January 1, 1993, the Company adopted Statement of Financial
Accounting Standards ("SFAS") No. 109, the financial accounting and reporting
standard for income taxes. This standard superseded SFAS No. 96 which had
been previously adopted by the Company. There was no significant effect on
the Company's financial condition or results of operations caused by the
adoption of the new standard.
Deferred income tax assets and liabilities have been provided in
recognition of the income tax effect attributable to the difference between
assets and liabilities reported in the tax return and financial
6
<PAGE>
SEACOR HOLDINGS, INC. AND SUBSIDIARIES
NOTES TO SUPPLEMENTAL CONSOLIDATED FINANCIAL STATEMENTS
1. NATURE OF OPERATIONS AND ACCOUNTING POLICIES: (Continued)
statements. Deferred tax assets or liabilities are provided using the
enacted tax rates expected to apply to taxable income in the periods in which
the deferred tax assets and liabilities are expected to be settled or
realized.
FOREIGN CURRENCY TRANSLATION --
The assets, liabilities and results of operations of certain SEACOR
subsidiaries are measured using the currency of the primary foreign economic
environment within which they operate, their functional currency. For purpose
of consolidating these subsidiaries with SEACOR, the assets and liabilities
of these foreign operations are translated to U.S. dollars at currency
exchange rates as of the balance sheet date and for revenue and expenses at
the weighted average currency exchange rates during the applicable reporting
periods. Translation adjustments resulting from the process of translating
these subsidiaries' financial statements are included in stockholders'
equity.
Certain SEACOR subsidiaries also enter into transactions denominated in
currencies other than their functional currency. Changes in currency exchange
rates between the functional currency and the currency in which a transaction
is denominated is included in the determination of net income in the period
in which the currency exchange rates change. Foreign currency exchange gains
or losses included in determining net income have not been material.
REVENUE RECOGNITION --
The Company's marine transportation business earns revenue primarily from
time or bareboat charter of vessels to customers based upon daily rates of
hire. Rates of hire earned under time and bareboat charters vary
substantially in direct proportion to the operating expenses incurred in
conjunction with each type of charter. Typically, under time charter
arrangements, the vessels' operating expenses are the responsibility of the
Company; whereas, under bareboat charters, the vessels' operating expenses
are paid by the charterer. Vessel charters may range from several days to
several years.
Environmental customers are charged retainer fees for ensuring by contract
the availability at predetermined rates of the Company's response services
and equipment. Retainer services include employing a staff to supervise
response to an oil spill emergency and maintaining specialized equipment,
including marine equipment, in a ready state for spill response as
contemplated by response plans filed by the Company's customers. Certain
vessel owners pay in advance a minimum annual retainer fee based upon the
number and size of vessels in each such owner's fleet and in some
circumstances pay the Company additional fees based upon the level of each
vessel owner's voyage activity in the U.S. The Company recognizes the greater
of revenue earned by voyage activity or the portion of the retainer earned in
each accounting period. Certain other vessel owners pay a fixed fee for the
Company's retainer services and such fee is recognized ratably throughout the
year. Facility owners generally pay a quarterly fee based on a formula that
defines and measures petroleum products transported to or processed at the
facility. Some facility owners pay an annual fixed fee and such fee is
recognized ratably throughout the year. Retainer agreements with vessel
owners generally range from one to three years while retainer arrangements
with facility owners are as long as seven years.
Spill response revenue is dependent on the magnitude of any one spill
response and the number of spill responses within a given fiscal year.
Consequently, spill response revenue can vary greatly between comparable
periods.
RELIANCE ON FOREIGN OPERATIONS --
For the years ended December 31, 1995, 1994, and 1993, approximately 31%,
33%, and 40%, respectively, of the Company's offshore marine revenues were
derived from foreign operations. The
7
<PAGE>
SEACOR HOLDINGS, INC. AND SUBSIDIARIES
NOTES TO SUPPLEMENTAL CONSOLIDATED FINANCIAL STATEMENTS
1. NATURE OF OPERATIONS AND ACCOUNTING POLICIES: (Continued)
Company's foreign operations are subject to various risks inherent in
conducting business in foreign nations. These risks include, among others,
political instability, potential vessel seizure, nationalization of assets,
currency restrictions and exchange rate fluctuations, import-export quotas
and other forms of public and governmental regulation, all of which are
beyond the control of the Company. Although, historically, the Company's
operations have not been affected materially by such conditions or events, it
is not possible to predict whether any such conditions or events might
develop in the future. The occurrence of any one or more of such conditions
or events could have a material adverse effect on the Company's financial
condition and results of operations.
EARNINGS PER SHARE --
Earnings per common share assuming no dilution was computed based on the
weighted average number of common shares issued and outstanding during the
relevant periods. Shares issuable upon the exercise of stock options were
excluded from the computation since the effect of the assumed exercise
thereof was not material.
On July 1, 1993, the Company sold $57,500,000 principal amount 6% Notes,
and on December 17, 1993, the Company issued $4,750,000 principal amount 2.5%
Convertible Subordinated Notes ("2.5% Notes"). Both note issues are
convertible into shares of the Company's common stock at any time prior to
maturity. The conversion rates for the 6% Notes and the 2.5% Notes are 39.024
and 32.979 shares, respectively, per $1,000 principal amount of notes. In
February 1995, the Company purchased $2,250,000 of the then outstanding
$57,500,000 principal amount of its 6% Notes in the open market.
Earnings per common share assuming full dilution was computed based on the
weighted average number of shares issued and outstanding plus the shares that
would be outstanding assuming the exercise of all stock options using the
treasury stock method and assuming all outstanding convertible subordinated
notes were converted to common stock. For computation purposes, income before
extraordinary item and net income were adjusted for the interest expense (net
of income tax) applicable to the convertible subordinated notes.
RECLASSIFICATIONS --
Certain reclassifications of prior year information have been made to
conform with the current year presentation.
NEW ACCOUNTING STANDARDS --
In 1995, Statement of Financial Accounting Standards No. 121 --"Accounting
for Impairment of Long-Lived Assets and for Long-Lived Assets to be Disposed
of" was issued and require adoption by the Company in fiscal 1996. Management
believes that such adoption will not have a material effect on the Company's
financial statements taken as a whole.
Also in 1995, Statement of Financial Accounting Standards No. 123 --
"Accounting for Stock-Based Compensation" (the "Statement") was issued which
establishes, among other things, financial accounting and reporting standards
for stock-based employee compensation plans. Entities may either adopt a
"fair value based method" of accounting for an employee stock option as
defined by the Statement or may continue to use accounting methods as
prescribed by APB Opinion No. 25 -- "Accounting for Stock Issued to
Employees." Entities electing to remain with the accounting in APB Opinion
No. 25 are required to make pro forma disclosures of net income and earnings
per share as if the fair value based method of accounting defined in the
Statement had been applied. The accounting requirements of the Statement are
effective for transactions entered into in fiscal years that begin after
December 15, 1995. The Company expects to continue following APB Opinion No.
25 and make appropriate disclosures in the future in accordance with the
Statement.
8
<PAGE>
SEACOR HOLDINGS, INC. AND SUBSIDIARIES
NOTES TO SUPPLEMENTAL CONSOLIDATED FINANCIAL STATEMENTS
2. FAIR VALUE OF FINANCIAL INSTRUMENTS:
The estimated fair value amounts of the Company's financial instruments
have been determined using available market information and appropriate
valuation methodologies. Considerable judgment was required in developing the
estimates of fair value, and accordingly, the estimates presented herein, in
thousands of dollars, are not necessarily indicative of the amounts
realizable in a current market exchange.
<TABLE>
<CAPTION>
CARRYING FAIR
DECEMBER 31, 1995 AMOUNT VALUE
- ----------------- -------- --------
<S> <C> <C>
Assets:
Cash and temporary cash investments ........................ $ 28,614 $ 28,614
Notes receivable from 50% or less owned companies ......... 2,902 2,902
Liabilities:
Long-term debt ............................................. 110,555 112,493
Indebtedness to shareholders and a minority shareholder of
a subsidiary .............................................. 2,675 2,666
</TABLE>
The carrying values of cash and temporary cash investments and notes
receivable due from 50% or less owned companies are a reasonable estimate of
their fair value. The estimated value of the Company's long-term debt and
indebtedness to a minority shareholder of a subsidiary of the Company was
determined by discounting the future cash flows using market information as
to borrowing rates for debt of similar terms and maturity. Loans from
shareholders are generally advances made from shareholders. The Company
believes it is not practicable to estimate the fair market value of the
loans.
3. POOLING ARRANGEMENTS:
On December 17, 1993, the Company entered into a pooling arrangement (the
"SEAFISH Pool"), effective January 1, 1994, with Compagnie Nationale de
Navigation ("CNN"), a French corporation engaged in various sectors of the
marine shipping industry, which sold and leased back (bareboat chartered)
from the Company ten offshore towing supply vessels. Under the terms of the
arrangement, revenue and expenses of certain vessels owned and operated by
the Company and certain vessels owned or bareboat chartered and operated by
CNN were pooled and the net pool results were shared by both parties equally
after giving effect to certain preference payments. Pursuant to an agreement
under which the Company acquired additional vessels from CNN, the pooling
arrangement and lease back of ten vessels were terminated effective October
1, 1995, (see Note 5).
SEAFISH Ltd., a Bahamian corporation owned jointly by SEACOR and CNN, was
assigned the responsibility to coordinate the activities of all vessels in
the SEAFISH Pool. Immediately prior to terminating the SEAFISH Pool, the
Company and CNN had 12 and 21 participating vessels, respectively, and at
December 31, 1994, the respective count of participating vessels was 11 and
15. For a fee, the Company provided management and accounting services to
SEAFISH Ltd. For the years ended December 31, 1995 and 1994, the effect on
the Company's revenue from its participation in the SEAFISH Pool was a
reduction in revenue of $972,000 and an increase in revenue of $337,000,
respectively.
On January 1, 1995, the SEAVEC Pool commenced operations. The SEAVEC Pool
was formed to coordinate the marketing in the North Sea standby market of
eleven vessels owned by the Company and five vessels from Toisa Ltd., an
unrelated offshore marine transportation and services company. Under the
pooling arrangement, operating revenue is pooled and distributed to each
company pursuant to a formula derived from the class of vessels each company
contributes to the pool. For the year ended December 31, 1995, the effect on
the Company's revenue from its participation in the SEAVEC Pool was a
reduction in revenue of $313,000. Ten vessels owned by the Company were
participating in the Pool at December 31, 1995.
9
<PAGE>
SEACOR HOLDINGS, INC. AND SUBSIDIARIES
NOTES TO SUPPLEMENTAL CONSOLIDATED FINANCIAL STATEMENTS
4. NRC MERGER:
On March 14, 1995, SEACOR acquired the remaining 57.1% of the outstanding
common stock of NRC Holdings that it did not already own through a merger
(the "NRC Merger") of NRC Holdings with and into CRN Holdings Inc. ("CRN"), a
wholly owned subsidiary of SEACOR. Following the NRC Merger, the financial
condition, results of operations, and cash flows of the newly acquired
environmental subsidiaries, primarily operating through the National Response
Corporation ("NRC"), were reflected in the Company's consolidated financial
statements. Prior to March 14, 1995, the Company reported its equity interest
in NRC Holdings as an investment in 50% or less owned company that was
accounted for by the equity method.
CRN, the surviving corporation of the NRC Merger, primarily through its
wholly owned subsidiary, NRC, is engaged in the business of responding to
marine oil spills and planning for environmental emergencies. SEACOR issued
292,965 shares of its common stock pursuant to the transaction that were
valued at $5,707,000. The Company already owned 42.9% of NRC Holdings which
was carried on the Company's books at a value net of deferred taxes of
$995,000. The purchase method was used to account for this business
combination. The excess of cost over estimated fair value of the net assets
acquired, including $138,000 in direct costs incurred in conjunction with the
transaction, of $3,447,000 will be amortized over 20 years using the straight
line method. The estimated fair values of assets and liabilities of NRC
Holdings at the date of the NRC Merger are as follows, in thousands of
dollars:
<TABLE>
<CAPTION>
CAPTION
AMOUNT
- ------- --------
<S> <C>
Current Assets ........... $ 6,008
Property and Equipment .. 21,219
Capitalized Lease ........ 1,807
Other Assets ............. 100
Goodwill ................. 3,447
Deferred Income Taxes ... 404
Current Liabilities ..... (5,741)
Capital Lease Obligations (1,577)
Bank Loan Payable ........ (12,500)
Deferred Revenue ......... (6,327)
--------
$ 6,840
========
</TABLE>
The following unaudited pro forma information has been prepared as if the
merger had occurred at the beginning of each of the periods presented, in
thousands of dollars, except per share data. This pro forma information has
been prepared for comparative purposes only and is not necessarily indicative
of what would have occurred had the merger taken place on the dates
indicated, nor does it purport to be indicative of the future operating
results of the Company. The results of NRC Holdings for the year ended
December 31, 1994, were impacted favorably by its involvement in a major oil
spill response in San Juan, Puerto Rico. As spill response revenue is
dependent on the magnitude of any one spill response and the number of spill
responses in a given year, operating results can vary greatly between
periods. The favorable effect of the major spill response and its effect on
operating results in 1994 is not indicative of a trend or of anticipated
results in future periods.
<TABLE>
<CAPTION>
CAPTION
1995 1994
- ------- -------- --------
<S> <C> <C>
Revenues ................................. $130,735 $134,056
Net Income ............................... $ 11,477 $ 10,073
Earnings Per Share -- Assuming No
Dilution ................................ $ 1.52 $ 1.36
</TABLE>
10
<PAGE>
SEACOR HOLDINGS, INC. AND SUBSIDIARIES
NOTES TO SUPPLEMENTAL CONSOLIDATED FINANCIAL STATEMENTS
5. VESSEL ACQUISITIONS AND DISPOSITIONS:
GRAHAM ACQUISITION --
On September 15, 1995, the Company acquired substantially all the assets
of John E. Graham & Sons and certain of its affiliated companies
(collectively, "Graham") for $72,854,000 in cash (the "Graham Acquisition").
The purchased assets included 127 marine vessels used to support the offshore
oil and gas exploration and production industry in the U.S. Gulf of Mexico,
real estate, capital equipment and inventory associated with the operation of
these vessels. The acquisition was financed with $74,000,000 of borrowings
under a revolving credit facility entered into with DnB. The difference
between the amount borrowed and paid to Graham to acquire the assets was used
to defray debt issue and acquisition costs, totaling $1,208,000. Acquisition
costs, totaling $609,000, have been allocated to the vessels acquired, and
debt issue costs, totaling $599,000, are included in Other Assets.
CNN ACQUISITION --
On November 14, 1995, the Company acquired three towing supply vessels
from CNN and entered into an agreement to acquire two anchor handling towing
supply vessels and certain other vessel related assets for aggregate
consideration of $21,550,000. Of such consideration, $11,300,000 was paid for
by issuing 459,948 shares of SEACOR's common stock to CNN and $10,250,000 was
paid for in cash on December 14, 1995 when the two anchor handling towing
supply vessels were delivered to the Company (the "CNN Acquisition"). The
Company borrowed $11,000,000 from the DnB Facility to finance the cash
portion of the consideration and pay acquisition costs. Pursuant to the CNN
Acquisition, the Company and CNN agreed to (i) terminate CNN's bareboat
charters covering ten vessels owned by the Company, effective October 1,
1995, (ii) terminate the SEAFISH Pooling arrangement, effective October 1,
1995, (iii) the Company's bareboat charter, effective October 1, 1995, of one
vessel owned by CNN with an option to purchase, (iv) provide the Company a
right of first refusal until December 31, 1999, under which terms CNN shall
not sell or transfer all or part of its interest in any of three additional
vessels owned by CNN, (v) SEACOR's acquisition of 50% of the outstanding
shares of FISH for a cost of $60,000, effective January 1, 1996, (vi) CNN's
sale to SEACOR of all CNN's right, title, and interest in and to all of the
shares owned by CNN in SEAFISH Ltd. for a purchase price of $5,000, effective
January 1, 1996, (vii) reimburse CNN for certain costs associated with CNN's
early termination of employment contracts for officers and crews that worked
aboard seven of the Company's vessels which were previously bareboat
chartered to CNN; at December 31, 1995, the Company recorded a liability of
$700,000 regarding these contract termination costs and has included such
cost in the purchase price of the five vessels acquired, and (viii) permit
Feronia International Shipping S.A. ("FISH"), a French corporation in which
the Company and CNN own a 50% interest, to manage, for a fee, the Company's
vessels operating offshore West Africa and in the Arabian Gulf and certain
other additional vessels owned by CNN.
VESSEL DISPOSITIONS --
During 1995, the Company sold four supply and six utility vessels that
resulted in the recognition of a pre-tax gain, totaling $4,124,000. The gain
was offset by a pre-tax loss of $359,000 from the retirement of certain
previously capitalized costs relating to a vessel which was withdrawn from
standby safety service in the North Sea and relocated to the U.S. Gulf of
Mexico for well stimulation service. A pre-tax loss of $316,000 was recorded
in 1994 from the retirement of certain previously capitalized costs that also
related to a vessel which was withdrawn from standby safety service in the
North Sea and relocated to the U.S. Gulf of Mexico for well stimulation
service.
11
<PAGE>
SEACOR HOLDINGS, INC. AND SUBSIDIARIES
NOTES TO SUPPLEMENTAL CONSOLIDATED FINANCIAL STATEMENTS
6. INVESTMENTS IN AND RECEIVABLES FROM 50% OR LESS OWNED COMPANIES:
Investments, carried at equity, consist of the following at December 31,
1995 and 1994:
<TABLE>
<CAPTION>
PERCENT OWNED
COMPANY 1995 1994
- ------- ----- -----
<S> <C> <C>
SEAFISH Ltd. .............. 50.0% 50.0%
NRC Holdings, Inc ......... --% 42.9%
Maritima Mexicana, S.A ... 40.0% 40.0%
SEAMEX International, Ltd. 40.0% 40.0%
West Africa Offshore, Ltd. 40.0% 40.0%
</TABLE>
Until October 1,1995, SEAFISH Ltd. coordinated the activities of certain
vessels owned and operated by the Company and certain vessels owned or
bareboat chartered and operated by CNN that participated in a pooling
arrangement (see Note 3). For purposes of the pooling arrangement, SEAFISH
Ltd. acted as a custodian of cash balances relating to the Company's and
CNN's pool activities and recorded no revenues or expenses from the pooling
arrangement. Therefore, the net pool results were not included in equity in
net earnings of 50% or less owned companies. Pursuant to the CNN Acquisition
(see Note 5), SEACOR and CNN have agreed to terminate the SEAFISH Pool and
SEACOR has agreed to acquire all of CNN's rights, title and interest in and
to all of the shares owned by CNN in SEAFISH Ltd. for a purchase price of
$5,000, effective January 1, 1996.
On March 14, 1995, SEACOR acquired the remaining 57.1% of the outstanding
common stock of NRC Holdings that it did not already own through a merger of
NRC Holdings with and into CRN. Following the NRC Merger, the financial
condition, results of operations, and cash flows of the newly acquired
environmental subsidiaries, primarily operating through NRC, were reflected
in the Company's consolidated financial statements. (see Note 4).
Until the NRC Merger on March 14, 1995, and during 1994 and 1993, the
Company earned operating revenue of $68,000, $347,000 and $174,000,
respectively, from NRC. The fees related primarily to capital improvements
made by the Company to an owned and operated vessel and certain other
expenses incurred in support of NRC's oil spill response activities. In 1994
and until the NRC Merger in 1995, the Company also provided management
services to NRC for a fee. The amount previously recorded by the Company as
its equity in the earnings of NRC Holdings differed from its 42.9% pro rata
share of the company's book value primarily because of the effect of the
warrants held by two principal customers to purchase 40% of the common stock
of NRC (see Note 7). Equity in earnings of NRC Holdings, Inc. and its
subsidiaries, net of applicable income taxes, was $607,000, and $287,000 for
the years ended December 31, 1994 and 1993, respectively.
During 1994, the Company and Transportacion Maritima Mexicana ("TMM")
completed their structuring of a joint venture to serve the Mexican offshore
market that began in December 1993 (the "TMM Joint Venture"). As part of
organizing the TMM Joint Venture, the Company: (i) invested $1,630,000
representing its share of the costs to acquire and improve three vessels,
(ii) invested $800,000 cash, and (iii) contributed one vessel from its fleet
with an agreed value of $1,350,000. A portion of the Company's initial
investment in the TMM Joint Venture was represented by unsecured notes
receivable, totaling $2,350,000. The Company recorded a deferred gain of
$718,000 upon contributing the vessel to the venture from its fleet which is
being amortized to income over the vessel's depreciable life. The TMM Joint
Venture is comprised of two corporations, Maritima Mexicana, S.A. and SEAMEX
International, Ltd.
In March 1995, the Company sold an additional supply vessel to the TMM
Joint Venture for $1,700,000 in cash which resulted in the recognition of an
immediate gain of $473,000 and the deferral of a $315,000 gain. The deferred
gain is being amortized to income over the depreciable life of the vessel,
and the amount amortized to other income from this transaction and from the
contribution of a vessel upon establishment of the venture totaled $53,000
and $10,000 for the years ended December 31, 1995 and 1994, respectively.
12
<PAGE>
SEACOR HOLDINGS, INC. AND SUBSIDIARIES
NOTES TO SUPPLEMENTAL CONSOLIDATED FINANCIAL STATEMENTS
6. INVESTMENTS IN AND RECEIVABLES FROM 50% OR LESS OWNED COMPANIES:
(Continued)
In 1995, the Company entered into a sale-type lease for one of its
vessels with the TMM Joint Venture. The lease expires in seven years and
contains options which permit the TMM Joint Venture to purchase the vessel at
various dates during the term of the lease. Unearned income and deferred gain
amortized to other income in connection with this lease for the year ended
December 31, 1995, totaled $387,000. Additionally in 1995, the Company
advanced the TMM Joint Venture $680,000 to acquire equipment in exchange for
a note receivable.
Principal and interest payments on the TMM Joint Venture notes are due in
quarterly installments which extend through 2000. The notes bear interest at
prime plus two percent, and earned interest income was $302,000 and $147,000
for the years ended December 31, 1995 and 1994, respectively.
During 1995 and 1994, the TMM Joint Venture chartered vessels and utilized
other services of the Company. Charter and other revenue earned by the
Company from this operation for the years ended December 31, 1995 and 1994
was $369,000 and $624,000, respectively. The Company's equity in earnings of
the TMM Joint Venture, net of applicable income taxes, was $873,000 and
$368,000 for the years ended December 31, 1995 and 1994, respectively.
West Africa Offshore, Ltd. has been the Company's principal agent for
vessels operating offshore West Africa and is reimbursed for its operating
expenses. Pursuant to FISH expanding its vessel management responsibilities
in behalf of the Company, see discussion below, agency support of West Africa
Offshore, Ltd. will be limited primarily to the Company's operations in
Nigeria.
Pursuant to the CNN Acquisition (see Note 5), SEACOR acquired 50% of the
outstanding shares of FISH, a French corporation, for a cost of $60,000,
effective January 1, 1996. FISH has agreed to manage the Company's vessels
operating offshore West Africa and in the Arabian Gulf and certain other
additional vessels owned by CNN. The FISH management fee charged to general
and administrative expense for the year ended December 31, 1995 totaled
$226,000.
The summarized financial information below represents an aggregation of
the Company's principal equity investees for the years ended December 31, in
thousands of dollars.
<TABLE>
<CAPTION>
CONDENSED INFORMATION 1995 1994
- --------------------- ------- -------
<S> <C> <C>
Current Assets ......... $ 6,282 $10,040
Noncurrent Assets ...... 10,351 32,359
------- -------
Total Assets ......... $16,633 $42,399
======= =======
Current Liabilities ... 3,460 24,653
Noncurrent Liabilities 4,941 7,244
------- -------
Total Liabilities ... $ 8,401 $31,897
======= =======
Revenues ............... $ 8,840 $50,217
======= =======
Gross Profit ........... $ 4,990 $24,648
======= =======
Net Income ............. $ 3,304 $ 4,397
======= =======
</TABLE>
The amount of consolidated retained earnings that represents undistributed
earnings of 50% or less owned companies accounted for by the equity method
was $1,241,000 at December 31, 1995.
13
<PAGE>
SEACOR HOLDINGS, INC. AND SUBSIDIARIES
NOTES TO SUPPLEMENTAL CONSOLIDATED FINANCIAL STATEMENTS
7. COASTAL AND PHIBRO AGREEMENT --
On October 27, 1995, SEACOR and its primary environmental subsidiary, NRC,
amended certain existing agreements with two of its customers, Coastal
Refining and Marketing, Inc. ("Coastal") and Phibro Energy USA, Inc.
("Phibro"). Those agreements provided, among other things, for a reduction
in, and subsequent elimination of, Coastal and Phibro's participating
interest in certain operating results, a reduction in their retainer fees,
and an elimination of certain options held by each of those customers to
purchase up to 20% of the fully diluted common stock of NRC. NRC will
continue to provide one customer through December 31, 2001 and the other
customer through December 31, 1998 various oil spill response services
mandated by the OPA 90. In addition, Coastal's agreements, among other
things, called for SEACOR to issue them 311,357 shares of its common stock
(having a value at time of issuance of $7,500,000) in exchange for the
cancellation of their stock options in NRC. Phibro also agreed to cancel a
similar option in return for amendments to its agreement which related
primarily to the reduction of its retainer payments for OPA 90 services.
SEACOR has accounted for its share issuance as a repurchase of a minority
interest. The difference between the value of the common stock issued and the
previously recorded carrying value of certain deferred revenue, net of income
tax effect, which approximated 40% of NRC's net book value, totaled
$4,558,000 and was recorded as goodwill (see Note 1).
8. INCOME TAXES:
Income (loss) before income taxes, minority interest, equity in net
earnings of 50% or less owned companies, and extraordinary item derived from
the United States and foreign operations for the years ended December 31, are
as follows, in thousands of dollars:
1995 1994 1993
------- ------- -------
United States ................... $18,318 $13,494 $14,534
Foreign ......................... (2,676) (958) 777
------- ------- -------
$15,642 $12,536 $15,311
======= ======= =======
The Company files a consolidated U.S. Federal tax return. Income tax
expense (benefit) consisted of the following components for the years ended
December 31, 1995, 1994 and 1993, in thousands of dollars:
1995 1994 1993
------- ------- -------
Current:
State .......................... $ 111 $ 123 $ 115
Federal ........................ 4,622 4,193 3,207
Foreign ........................ 442 200 676
Deferred:
Federal ........................ 859 (148) 1,359
Foreign ........................ (524) -- (18)
------- ------- -------
$5,510 $4,368 $5,339
======= ======= =======
The following table reconciles the difference between the statutory
federal income tax rate for the Company to the effective income tax rate:
1995 1994 1993
------- ------- -------
Statutory rate .................. 34.0% 34.0% 34.0%
Foreign and state taxes ......... 1.2 0.8 0.9
------- ------- -------
35.2% 34.8% 34.9%
======= ======= =======
14
<PAGE>
SEACOR HOLDINGS, INC. AND SUBSIDIARIES
NOTES TO SUPPLEMENTAL CONSOLIDATED FINANCIAL STATEMENTS
8. INCOME TAXES: (Continued)
The components of the net deferred income tax liability were as follows,
for the years ended December 31, in thousands of dollars:
<TABLE>
<CAPTION>
1995 1994
------- -------
<S> <C> <C>
Deferred tax assets:
Foreign Tax Credit ............. $ 522 $ 337
Alternative Minimum Tax Credit . 568 --
Subpart F Loss ................. 1,727 747
Nondeductible Accruals ......... 494 --
Other .......................... 367 340
------- -------
Total deferred tax assets ..... 3,678 1,424
Deferred tax liabilities:
Property and equipment ......... 39,102 34,717
Investment in Subsidiaries ..... 603 660
Other .......................... 655 919
------- -------
Total deferred tax liabilities 40,360 36,296
------- -------
Net deferred tax liabilities . $ 36,682 $ 34,872
======= =======
</TABLE>
As of December 31, 1995, the Company has carryforwards for income tax
purposes of foreign tax credits approximating $522,000 that expire from 1997
through 2000. As of December 31, 1995, the Company also has alternative
minimum tax credit carryforwards of $568,000 for income tax purposes. For
financial reporting purposes, the carryforwards have been recognized through
a reduction in deferred tax liabilities.
9. RELATED PARTY TRANSACTIONS:
The Company reimburses a stockholder for management and administrative
services. These charges totaled $275,000 for the year ended December 31, 1995
and $175,000 for each of the years ended December 31, 1994 and 1993. The fees
relate primarily to the use of the stockholder's physical resources and
administrative and technical personnel.
Miller Environmental Group ("MEG"), an environmental contractor based in
Calverton, New York, maintains and stores spill response equipment owned by
NRC and in the event of a spill, provides labor, equipment and materials to
assist in NRC's spill response activities. In fiscal 1995, NRC paid
approximately $1,750,000 to MEG for these services. The father of a SEACOR
corporate officer is Vice President, Secretary and Treasurer of MEG.
NRC also contracts with James Miller Marine Services ("JMMS"), an
environmental contractor based in Staten Island, New York, for services
similar to those provided by MEG. In fiscal 1995, NRC paid approximately
$600,000 to JMMS for these services. The brother of a SEACOR corporate
officer is Vice President of JMMS.
Loans from stockholders are made up of unsecured loans due to Norman and
Joyce McCall. The loans are due on demand and bear interest at 7% per annum
at December 31, 1995. On May 3, 1996, the loans were paid in full.
15
<PAGE>
SEACOR HOLDINGS, INC. AND SUBSIDIARIES
NOTES TO SUPPLEMENTAL CONSOLIDATED FINANCIAL STATEMENTS
10. LONG-TERM DEBT:
Long-term debt balances, maturities, and interest rates are as follows for
the years ended December 31, in thousands of dollars:
<TABLE>
<CAPTION>
1995 1994
-------- --------
<S> <C> <C>
Notes payable to former vessel owners, due in quarterly
or semi-annual installments and maturing from 1996
through 2003, at interest rates ranging from 3.75% to
7.50% ................................................ $ 11,147 $13,210
Notes payable to banks, due in monthly installments and
maturing from 1995 through 2007, secured by vessels
(9.75% at December 31, 1995) ......................... 1,596 1,293
Notes payable to Nederlandse Scheepshypotheekbank N.V.
("Nedship Bank"), due in quarterly installments
payable from 1991 through 1996, secured by vessels,
bearing interest at LIBOR plus 2.0% (7.375% at
December 31, 1994) ................................... -- 5,227
DnB Revolving Credit Facility, interest payable based
upon interest option period at LIBOR plus 1.25% prior
to term conversion and principal and interest after
conversion on August 31, 1996 due semi-annually
through August 31, 2002 bearing interest at LIBOR plus
maximum of 1.5% (7.1875% at December 31, 1995) ....... 40,000 --
6% Convertible Subordinated Notes, due 2003, interest
payable semi-annually commencing 1994 ................ 55,250 57,500
2.5% Convertible Subordinated Notes, due 2004, interest
payable semi-annually commencing 1994 ................ 4,750 4,750
-------- --------
112,743 81,980
Less -- Portion due within one year ................... 2,489 5,896
-- Debt discount ................................. 2,188 2,463
-------- --------
$ 108,066 $ 73,621
======== ========
</TABLE>
Annual maturities of long-term debt for the five years following December
31, 1995, are as follows, in thousands of dollars.
YEAR 1996 1997 1998 1999 2000
- ---- ------- ------ ------- ------- -------
AMOUNT ............. $ 2,489 $1,632 $ 1,494 $ 1,356 $ 1,356
The long-term debt maturities schedule does not include future annual
maturities for borrowings outstanding under the DnB Facility at December 31,
1995. It is uncertain how much, if any, of the outstanding senior secured
revolving bridge loans due DnB at December 31, 1995 may be converted into
term loans on August 31, 1996, the date upon which the Company may elect to
extend all or a portion of the DnB Facility. If the outstanding senior
secured revolving bridge loans at December 31, 1995 were converted to term
loans and the Company did not extend its commitment for any other unused
portion of the DnB Facility on August 31, 1996, future annual maturities for
the DnB Facility would be $6,667,000 in each of the years 1997 through 2000
and $13,332,000 thereafter.
On August 20, 1993, the Company retired U.S. Government Guaranteed Ship
Financing Bonds in the amount of $7,303,000 with proceeds from the issuance
of the 6% Notes. At that time, $549,000 and $52,000 of unamortized debt
discount and deferred bond issue costs, respectively, were written off, and a
redemption premium and fees of $341,000 were paid, all of which was recorded
as an extraordinary loss. Debt discount amortization expense related to these
bonds was $66,000 for the year ended December 31, 1993.
In July 1993, the Company retired notes payable to a bank and former
vessel owners in the amount of $18,110,000 with proceeds from the issuance of
the 6% Notes. At that time, $1,011,000 of unamortized deferred debt issue
costs was written off, and fees of $178,000 were paid to the bank, all of
which was recorded as an extraordinary loss.
16
<PAGE>
SEACOR HOLDINGS, INC. AND SUBSIDIARIES
NOTES TO SUPPLEMENTAL CONSOLIDATED FINANCIAL STATEMENTS
10. LONG-TERM DEBT: (Continued)
In April 1991, in conjunction with the Company's expansion in the North
Sea, VEESEA Holdings Inc. ("VEESEA"), a 91% owned subsidiary of SEACOR, and
its subsidiaries (collectively, the "VEESEA Group") entered into a loan
agreement with Nedship Bank, pursuant to which Nedship Bank loaned pounds
sterling10,700,000 (or $18,426,000 based upon exchange rates in 1991). In
conjunction with regularly scheduled payments during 1995, the Company made
optional principal prepayments, amounting to $2,266,000, on the Nedship Bank
loan, and the loan was completely repaid by December 31, 1995.
In conjunction with eight vessels acquired in March 1993, SEACOR issued
two notes payable to the former vessel owners: (i) a $1,875,000, 7.5%
unsecured note repayable in eleven equal quarterly installments of $100,000
commencing June 1993 with a final installment of $775,000 in March 1996, and
(ii) a $975,000, 6% unsecured note repayable in twelve quarterly installments
of $81,250 commencing June 1993 and maturing March 1996.
On August 6, 1993, a customer who had previously sold a project vessel to
the Company for a promissory note confirmed a decision to terminate a
long-term charter of that vessel. Pursuant to this transaction, the customer
forgave $450,000 in principal amount of the note payable due from the Company
under a first preferred mortgage on vessels which had a net book value of
$4,222,000 at December 31, 1995, made other adjustments to the mortgage, and
paid the Company a demobilization fee of $235,000. The forgiveness of the
note was recorded as an extraordinary gain, and the demobilization fee was
included in income before extraordinary item.
On July 1, 1993, SEACOR sold $57,500,000 principal amount of 6% Notes. The
agreements under which the 6% Notes were issued provided for underwritten
resales to qualified institutional buyers and to non-U.S. purchasers in
transactions exempt from registration under applicable securities laws. The
6% Notes are convertible into shares of SEACOR's Common Stock at any time
prior to July 1, 2003, at a conversion rate of 39.024 shares per $1,000
principal amount of the 6% Notes. There is no sinking fund for the 6% Notes;
however, the 6% Notes are redeemable, in whole or part, at the election of
SEACOR any time on or after July 1, 1996, initially at 104.2% of the
principal amount thereof and declining by 0.67% each year thereafter to 100%
of the principal amount in 2003. In addition, upon the occurrence of a change
in control of SEACOR (as defined in the indenture of the 6% Notes), holders
of the 6% Notes may elect to require SEACOR to purchase their 6% Notes, in
whole or in part, at a purchase price equal to 100% of the principal amount
thereof, plus accrued interest to the date of purchase. SEACOR incurred
$2,176,000 in costs associated with the sale of the 6% Notes including
$1,869,000 of underwriters discount. These debt issue costs were charged to
other assets and are being amortized to expense over ten years.
In February 1995, the Company purchased $2,250,000 of the then outstanding
$57,500,000 principal amount of its 6% Notes in the open market. The
difference between the amount paid to acquire the 6% Notes and their carrying
value resulted in the Company recognizing a gain of $199,000, net after
giving effect to a write-off of $71,000 in unamortized deferred debt issue
costs associated with the sale of the 6% Notes. The gain is included in other
income.
In December 1993, the Company financed, in part, the acquisition of ten
offshore towing supply vessels from CNN with: (i) $12,000,000 principal
amount senior unsecured notes payable having varying maturities of one to ten
years, bearing interest rates ranging from 3.25% to 5.50% per annum and which
have been guaranteed by SEACOR, and (ii) $4,750,000 principal amount of 2.5%
Notes. The 2.5% Notes are convertible into shares of SEACOR's Common Stock at
any time prior to maturity at a conversion rate of 32.979 shares per $1,000
principal amount of the 2.5% Notes. There is no sinking fund for the 2.5%
Notes; however, the 2.5% Notes are redeemable, in whole or part, at the
election of SEACOR any time on or after July 1, 1997, initially at 104.2% of
the principal amount thereof and declining by 0.60% each year thereafter to
100% of the principal amount after July 1, 2003. In addition, upon the
occurrence of a change in control of SEACOR (as defined in the indenture of
the 2.5% Notes), holders of the 2.5% Notes
17
<PAGE>
SEACOR HOLDINGS, INC. AND SUBSIDIARIES
NOTES TO SUPPLEMENTAL CONSOLIDATED FINANCIAL STATEMENTS
10. LONG-TERM DEBT: (Continued)
may elect to require SEACOR to purchase their 2.5% Notes, in whole or in
part, at a purchase price equal to 100% of the principal amount thereof, plus
accrued interest to the date of purchase. The stated interest rates on the
unsecured notes and the 2.5% Notes (collectively, the "Notes") were
considered lower than interest rates at which the Company would normally
obtain similar financing which were determined to range from 5.10% to 9.14%.
The Notes were valued based on discounting concepts to approximate their fair
market value. The difference between the Notes' fair market and stated values
at inception, $2,749,000, was recorded as debt discount and as a reduction in
the carrying value of the vessels acquired. Amortized debt discount included
in interest expense was $277,000 and $309,000 for the years ended December
31, 1995 and 1994, respectively.
Certain of SEACOR's subsidiaries (the "borrowing subsidiaries") are
parties to the DnB Facility, with DnB as lender and SEACOR as guarantor.
Pursuant to the DnB Facility, the borrowing subsidiaries may borrow up to
$85,000,000 aggregate principal amount of senior secured revolving bridge
loans any time prior to August 31, 1996 (the "Initial Term"). At the
Company's election, such loans, on or prior to August 31, 1996, may be
converted into senior secured reducing revolving credit loans maturing on
August 31, 2003. Until termination of the DnB Facility, a commitment fee is
payable to DnB on a quarterly basis, computed at the rate of one-half of one
percent per annum on the average unfunded portion of the credit facility.
During the Initial Term of the DnB Facility, outstanding borrowings bear
interest at an annual rate equal to 125 basis points above LIBOR. If the
Borrowing Subsidiaries elect to convert the senior secured bridge loans to
senior secured reducing revolving credit loans (the "Term Loans"), the
Maximum Committed Amount automatically will decrease semi-annually by certain
percentages described in the DnB Facility. The DnB Facility requires the
Company, on a consolidated basis, to maintain a minimum ratio of indebtedness
to vessel value, as defined, a minimum cash and cash equivalent level, and a
specified debt service coverage ratio. The Company also is prohibited from
entering into additional indebtedness above a certain level without consent.
Furthermore, SEACOR, without prior written consent of DnB, is prohibited
through August 31, 1996 (the maturity date of the bridge loan portion of the
DnB Facility) from paying dividends to its shareholders. Pursuant to the DnB
Facility, the Term Loans would bear interest at the annual rate equal to a
maximum of 150 basis points above LIBOR.
Borrowings outstanding pursuant to the DnB Facility are secured by, among
other things, a guaranty of SEACOR of the obligations of the Borrowing
Subsidiaries, first preferred mortgages on vessels owned by the Borrowing
Subsidiaries which had a net book value of $72,980,000 at December 31, 1995,
a negative pledge relating to certain vessels, and an assignment of earnings
and certain contract rights with respect to vessels owned and operated by the
Borrowing Subsidiaries. If the Borrowing Subsidiaries exercise the
aforementioned conversion election, certain additional subsidiaries of the
Company will be required to guaranty the obligations of the Borrowing
Subsidiaries under the DnB Facility and provide mortgages on additional
vessels to secure such guaranty.
On September 15, 1995, $74,000,000 principal amount was borrowed under the
DnB Facility to finance the acquisition of offshore marine service vessels
and other related assets pursuant to the Graham Acquisition and to pay
related debt issue and acquisition costs. On November 14, 1995, the Company
repaid $14,000,000 principal amount of the indebtedness from existing cash
balances. On December 14, 1995, the Company borrowed an additional
$11,000,000 under the DnB Facility to finance the cash portion of the CNN
Acquisition and pay related acquisition costs. On December 21, 1995, the
Company repaid $31,000,000 principal amount of the indebtedness with proceeds
from the sale of common stock, and an additional $5,000,000 principal amount
was repaid subsequent to year end.
Following the NRC Merger in March 1995, the Company repaid the remaining
outstanding principal balance, $12,500,000, under a Credit Agreement between
NRC and CIBC Inc., as amended.
18
<PAGE>
SEACOR HOLDINGS, INC. AND SUBSIDIARIES
NOTES TO SUPPLEMENTAL CONSOLIDATED FINANCIAL STATEMENTS
11. EXTRAORDINARY ITEM:
In 1993, the Company recognized a net extraordinary loss caused by debt
extinguishment of $1,093,000 ($0.19 per share), net of a $588,000 income tax
benefit. Of the extraordinary loss, $1,385,000 was caused by the write-off of
unamortized debt discount, bond issue and debt issue costs, and the payment
of redemption premiums and fees relating to the retirement of outstanding
indebtedness due U.S. Government Guaranteed Ship Financing Bond holders, note
holders and a bank. The redemption premiums, fees, and indebtedness were paid
with the net proceeds from the Company's sale of 6% Notes. The extraordinary
loss was reduced by a $292,000 gain recognized upon the forgiveness of
indebtedness associated with the termination of a vessel charter.
12. LEASES:
From December 1993 through September 30, 1995, the Company was the lessor
of ten offshore towing supply vessels under bareboat charter agreements with
CNN. Pursuant to the CNN Acquisition, the Company and CNN agreed to terminate
CNN's bareboat charter of these vessels. Operating revenue earned from the
bareboat charter of these vessels totaled $3,795,000, $5,074,000 and $350,000
for the years ended December 31, 1995, 1994, and 1993, respectively.
In 1995, the Company entered into a sale-type lease with the TMM Joint
Venture for one anchor handling towing supply vessel. The lease expires in
seven years and contains options which permit the TMM Joint Venture to
purchase the vessel at various dates during the term of the lease. Unearned
income and deferred gain amortized to other income for the year ended
December 31, 1995, totaled $387,000. The following lists the components of
the net investment in the sale-type lease as of December 31, of which
$183,000 and $2,543,000 are reported in current and noncurrent other assets,
respectively, in thousands of dollars:
<TABLE>
<CAPTION>
1995
-------
<S> <C>
Minimum lease payments receivable .......... $ 4,161
Estimated residual value of leased property 781
Less: Unearned income ...................... (2,216)
-------
Net investment in sale-type lease .......... $ 2,726
=======
</TABLE>
Minimum rental receivables due from sale-type leases are $667,000 in each
of the fiscal years ended December 31, 1996 through 2001 and $159,000 due in
2002.
The Company is the lessee under a capital lease for offshore oil boom that
is used in conjunction with its oil spill response activities. The offshore
boom, with gross cost and accumulated depreciation of $1,807,000 and
$269,000, respectively at December 31, 1995, is being depreciated over an
estimated useful life of seven years. Included in current and noncurrent
liabilities, respectively, at December 31, 1995 are $172,000 and $368,000 of
obligations under capital leases. The following is a schedule of future
minimum lease payments due under a capital lease together with the present
value of the net minimum lease payments as of December 31, in thousands of
dollars:
<TABLE>
<CAPTION>
1995
-----
<S> <C>
1996 .................................... $300
1997 .................................... 450
-----
Total minimum lease payments ............ 750
Less: amount representing interest ..... 210
-----
Present value of minimum lease payments $540
=====
</TABLE>
19
<PAGE>
SEACOR HOLDINGS, INC. AND SUBSIDIARIES
NOTES TO SUPPLEMENTAL CONSOLIDATED FINANCIAL STATEMENTS
13. MAJOR CUSTOMERS AND SEGMENT DATA:
Two customers accounted for approximately 16% and 10%, respectively, of
revenues in the year ended December 31, 1995; two customers accounted for
approximately 19% and 15%, respectively, of revenues in the year ended
December 31, 1994; and three customers accounted for approximately 18%, 12%,
and 10%, respectively, of revenues in the year ended December 31, 1993.
Operations are conducted through two business segments, offshore vessel
and environmental services. On March 14, 1995, the remaining outstanding
stock that the Company did not already own, in corporations now comprising
the Company's environmental segment, was acquired, and from that date
forward, the Company has reflected the financial condition and results of
operations of those environmental subsidiaries in its consolidated financial
statements. Prior to March 14, 1995, the Company reported its interest in the
environmental subsidiaries as an investment in 50% or less owned companies
which were accounted for under the equity method. The Company's offshore
service vessel segment operates in different geographical areas; whereas, the
environmental segment's primary operations are in the United States.
Information by business segment and geographical area is as follows for the
years ended December 31, in thousands of dollars:
<TABLE>
<CAPTION>
1995 1994 1993
-------- -------- --------
<S> <C> <C> <C>
OPERATING REVENUE:
MARINE --(A)
United States ...................................... $ 72,964 $ 63,283 $ 54,864
North Sea .......................................... 13,523 16,222 20,007
West Africa ........................................ 14,637 10,189 12,374
Other Foreign ...................................... 3,770 4,291 4,923
-------- -------- --------
104,894 93,985 92,168
ENVIRONMENTAL ....................................... 21,765 -- --
-------- -------- --------
$126,659 $ 93,985 $ 92,168
======== ======== ========
OPERATING PROFIT:
MARINE --(A)
United States ...................................... $ 17,529 $ 14,040 $ 14,598
North Sea .......................................... (2,952) 7 3,085
West Africa ........................................ 3,840 2,582 1,683
Other Foreign ...................................... 1,843 1,667 1,816
-------- -------- --------
20,260 18,296 21,182
ENVIRONMENTAL ....................................... 1,626 -- --
-------- -------- --------
21,886 18,296 21,182
Other income (expense) (c) ......................... 190 (73) 116
General corporate administration ................... (2,123) (2,139) (2,268)
Net interest expense ............................... (4,311) (3,548) (3,719)
Minority interest in loss (income) of a subsidiary 321 184 (51)
Equity in earnings of 50% or less owned companies . 872 975 287
Income tax expense ................................. (5,510) (4,368) (5,339)
-------- -------- --------
Income before extraordinary item ................... $ 11,325 $ 9,327 $ 10,208
======== ======== ========
IDENTIFIABLE ASSETS:
MARINE --
United States (e) .................................. $208,424 $140,185 $109,317
North Sea .......................................... 24,105 32,004 36,860
West Africa (e) .................................... 69,022 41,476 29,428
Other Foreign (b) .................................. 9,850 15,093 42,009
-------- -------- --------
311,401 228,758 217,614
</TABLE>
20
<PAGE>
SEACOR HOLDINGS, INC. AND SUBSIDIARIES
NOTES TO SUPPLEMENTAL CONSOLIDATED FINANCIAL STATEMENTS
13. MAJOR CUSTOMERS AND SEGMENT DATA: (Continued)
<TABLE>
<CAPTION>
1995 1994 1993
-------- -------- --------
<S> <C> <C> <C>
ENVIRONMENTAL ....................................... 32,652 -- --
CORPORATE (D) ....................................... 7,132 9,387 839
-------- -------- --------
$351,185 $238,145 $218,453
======== ======== ========
PROVISION FOR DEPRECIATION AND AMORTIZATION:
MARINE --
United States ...................................... $ 8,623 $ 7,304 $ 6,575
North Sea .......................................... 3,621 3,490 3,522
West Africa ........................................ 2,931 2,151 1,220
Other Foreign ...................................... 664 976 692
-------- -------- --------
15,839 13,921 12,009
ENVIRONMENTAL ....................................... 2,875 -- --
CORPORATE ........................................... 128 187 98
-------- -------- --------
$ 18,842 $ 14,108 $ 12,107
======== ======== ========
CAPITAL EXPENDITURES:
MARINE --
United States ...................................... $ 75,782 $ 2,852 $ 7,900
North Sea .......................................... 45 225 1,934
West Africa ........................................ 21,722 70 1,020
Other Foreign ...................................... 38 18 32,163
-------- -------- --------
97,587 3,165 43,017
ENVIRONMENTAL ....................................... 688 -- --
CORPORATE ........................................... 75 206 14
-------- -------- --------
$ 98,350 $ 3,371 $ 43,031
======== ======== ========
</TABLE>
- ------------
(a) "West Africa" and "Other Foreign" include the results of vessels
bareboat chartered-out to CNN from December 1993 through September
1995, at which time the bareboat charters were canceled and the
Company resumed operation of the vessels.
(b) In 1993, identifiable assets include vessels acquired from CNN that
operated only during December.
(c) Other income (expense) excludes gain/(loss) from equipment sales or
retirements of property and certain other expenses that were
reclassified to operating profit in geographical areas of the Marine
segment.
(d) The Company's corporate assets include investments in 50% or less
owned companies.
(e) In 1995, identifiable assets include the effect of the Graham and CNN
Acquisitions.
21
<PAGE>
SEACOR HOLDINGS, INC. AND SUBSIDIARIES
NOTES TO SUPPLEMENTAL CONSOLIDATED FINANCIAL STATEMENTS
14. COMMON STOCK:
In March 1993, SEACOR issued 125,000 shares of common stock at $15.00 per
share or $1,875,000 pursuant to the acquisition of seven supply vessels.
On March 14, 1995, pursuant to the NRC Merger, SEACOR acquired the
remaining 57.1% of the outstanding common stock of NRC Holdings that it did
not already own through a merger of NRC Holdings with and into CRN. SEACOR
issued 292,965 shares of its common stock pursuant to the transaction that
was valued at $5,707,000.
On October 27, 1995, SEACOR and its primary environmental subsidiary, NRC,
amended certain existing agreements with Coastal. Those agreements, among
other things, eliminated certain options held by Coastal to purchase up to
20% of the fully diluted common stock of NRC. SEACOR issued 311,357 shares of
common stock, having a value at time of issuance of $7,500,000, in exchange
for the cancellation of Coastal's stock options in NRC.
On November 14, 1995, pursuant to the CNN Acquisition, SEACOR issued
459,948 shares of common stock that was valued at $11,300,000 at the date of
issuance to acquire three towing supply vessels.
In December 1995, SEACOR completed a public offering of its common stock
that resulted in the sale of 1,612,500 shares. The proceeds received from
this sale, net of underwriting discount, totaled $36,942,000. The Company
incurred $644,000 in expenses associated with this stock offering (other than
underwriting discount) which was charged against additional paid-in capital
arising from the sale. The public offering included 1,550,000 shares of
common stock sold by several of SEACOR's stockholders.
15. MINORITY INTEREST:
In December 1991, the managing agent of the Company's vessels operating in
the North Sea invested approximately $1,278,000 of cash in VEESEA. In return
for this investment and for services rendered to the VEESEA Group, which were
included in mobilization expense, the agent received 9% of the equity of
VEESEA, and SEACOR, through another subsidiary, assigned to the agent a
$679,000 participation in debt due to the SEACOR subsidiary from the VEESEA
Group. The obligation due the agent, including accrued interest at 12% per
annum, was subordinated to the Nedship Bank loans to the VEESEA Group and is
reported in the consolidated balance sheet as other noncurrent liabilities.
A fee is paid the minority stockholder for managing the Company's vessels
in the North Sea. The U.S. dollar equivalent of fees paid in pounds sterling
under this arrangement approximated $960,000 in each of the years ended
December 31, 1995, 1994, and 1993.
16. BENEFIT PLANS:
NON-QUALIFIED STOCK OPTION PLAN --
SEACOR's 1992 Non-Qualified Stock Option Plan (the "Plan") provides for
the grant of non- qualified options to purchase shares of common stock to
officers and key employees of the Company. Under the Plan, 500,000 shares of
common stock have been reserved for sale. The exercise price per share of
options granted under the Plan cannot be less than 75% or greater than 100%
of the "Fair Market Value" (as defined in the Plan) of one share of common
stock on the date of the grant.
Options granted under the Plan expire no later than the tenth anniversary
of the date of grant. Recipients of options must remain employed for at least
two years from date of grant before options become exercisable, subject to
earlier exercise under certain circumstances. The exercise price per share of
each option may be paid in cash, shares of common stock owned by the grantee,
in a combination of cash and common stock or by delivery of a promissory note
not to exceed 90% of the total exercise price.
22
<PAGE>
SEACOR HOLDINGS, INC. AND SUBSIDIARIES
NOTES TO SUPPLEMENTAL CONSOLIDATED FINANCIAL STATEMENTS
16. BENEFIT PLANS: (Continued)
The following transactions occurred in the stock option plan during the
years ended December 31,:
<TABLE>
<CAPTION>
1995 1994 1993
----------- ------------ ------------
<S> <C> <C> <C>
Options outstanding, at beginning of year ...... 309,250 266,750 50,000
Options granted ................................. 117,747 42,500 267,500
Options exercised ............................... -- -- --
Options canceled ................................ (1,800) -- (50,750)
----------- ------------ ------------
Options outstanding, at end of year ............. 425,197 309,250 266,750
=========== ============ ============
Price range of options exercised ................ $ -- $ -- $ --
Price range of options outstanding, end of year $9.64-21.25 $14.75-21.25 $14.75-21.00
</TABLE>
At December 31, 1995, 74,803 shares were available for future grant and
264,950 options were exercisable. At December 31, 1994 and 1993, there were
no exercisable options.
On March 14, 1995, the Executive Compensation and Stock Option Committee
of the Board of Directors granted two officers of SEACOR and three key
employees of NRC options to purchase a total of 102,192 shares of common
stock of SEACOR at an exercise price of $18.75 per share. Furthermore, as
part of the NRC Merger, the Company assumed the obligations of the NRC
Holdings 1994 Non-Qualified Stock Option Plan. As a result, the Company
converted existing options for shares of NRC Holdings into options for 15,555
shares of SEACOR's common stock at an exercise price of $9.64 per share. The
exercise price per share for options issued or converted in 1995 equaled the
market price at the original dates the options were granted.
SEACOR SAVINGS PLAN --
The Company established the SEACOR Savings Plan ("SEACOR Plan"), effective
July 1, 1994. This defined contribution plan provides eligible employees with
an opportunity to accumulate retirement savings. Requirements for eligibility
include, (i) one year of full time employment, (ii) attainment of 21 years of
age, and (iii) residency in the United States.
Participants may contribute up to 15% of their pre-tax annual
compensation. During 1995 and 1994, the Company matched 50% up to the first
4% of an employee's contribution to the SEACOR Plan, and the Board of
Directors of the Company determine the Company's matching contribution
annually. The participants' and Company's contributions are funded to the
SEACOR Plan monthly.
Participants are fully vested in the Company's contribution upon (i)
attaining the age of 65, (ii) death, (iii) becoming disabled, or (iv)
completing five years of employment service. Forfeitures of Company
contributions for non-vested and terminated employees will be used to reduce
future contributions of the Company or pay administrative expenses of the
SEACOR Plan.
In connection with the NRC Merger, the Company assumed the obligations of
a tax-deferred savings plan that was implemented by NRC in 1993. Under the
terms of the NRC plan, eligible employees can elect to contribute up to 15%
of their compensation, and NRC matches 100% up to the first 3% of the
employee's contribution.
In connection with the McCall acquisition, the Company assumed the
obligations of a defined contribution plan that was implemented by McCall in
1995. Under the terms of the McCall plan, eligible employees can elect to
contribute up to 15% of their compensation. During 1995, McCall matched 1/3
of the first 6% of an employee's contribution to the plan. The Board of
Directors of McCall determine the matching contribution annually.
The combined Companies' contributions to the plans were $215,000 and
$51,000 for the years ended December 31, 1995 and 1994, respectively.
23
<PAGE>
SEACOR HOLDINGS, INC. AND SUBSIDIARIES
NOTES TO SUPPLEMENTAL CONSOLIDATED FINANCIAL STATEMENTS
16. BENEFIT PLANS: (Continued)
EMPLOYEE RESTRICTED STOCK AWARD --
On March 14, 1995, in recognition of an executive officer's commitment to
the continued growth and financial success of the Company, the executive
officer was granted 11,500 restricted shares of SEACOR's common stock. The
market value of the restricted shares was $216,000 at time of grant and was
recorded as unamortized restricted stock compensation in a separate component
of stockholders' equity. This compensation will be amortized to expense over
a three year vesting period. Notwithstanding the forgoing, 100% beneficial
ownership of the restricted stock shall vest immediately upon death,
disability, termination of the employee without "cause" or the occurrence of
a "change in control" of the Company.
17. QUARTERLY FINANCIAL INFORMATION (UNAUDITED):
<TABLE>
<CAPTION>
QUARTER ENDED
----------------------------------------------------------
DEC. 31 SEPT. 30 JUNE 30 MARCH 31
------- -------- -------- --------
(THOUSANDS OF DOLLARS, EXCEPT PER SHARE AMOUNT)
<S> <C> <C> <C> <C>
1995
Revenue ................... $44,550 $36,422 $25,504 $20,183
Gross profit .............. 13,039 7,886 5,077 3,387
Net income ................ 5,334 2,144 2,310 1,537
Earnings per common share:
Assuming no dilution .... 0.66 0.29 0.31 0.21
Assuming full dilution .. 0.56 0.28 0.29 0.22
</TABLE>
18. SUPPLEMENTAL INFORMATION FOR STATEMENTS OF CASH FLOWS:
<TABLE>
<CAPTION>
YEAR ENDED DECEMBER 31,
---------------------------
1995 1994 1993
------- ------ -------
<S> <C> <C> <C>
Cash income taxes paid ..................................... $ 4,942 $4,300 $ 3,619
Cash interest paid ......................................... 6,132 6,773 3,209
Schedule of Non-Cash Investing and Financing Activities:
Property exchanged for investment in and notes receivable
from 50% or less owned company ........................... -- 2,045 --
Joint venture investment increase related to deferred gain 315 718 --
Common stock issued in exchange for stock options in NRC . 7,500 -- --
Purchase of vessels with -- long-term notes, net of
discount .................................................. -- -- 13,185
-- common stock .................. 11,300 -- 1,875
-- 2.5% notes, net of discount . -- -- 3,665
-- accounts receivable .......... -- -- 112
</TABLE>
24
<PAGE>
SEACOR HOLDINGS, INC. AND SUBSIDIARIES
NOTES TO SUPPLEMENTAL CONSOLIDATED FINANCIAL STATEMENTS
19. SUBSEQUENT EVENTS:
Effective May 31, 1995, the Company acquired the McCall Affiliated
Companies ("McCall") in exchange for approximately 1,300,000 shares of the
Company's common stock. The acquisition was accounted for as a pooling of
interests; accordingly, prior period financial information has been restated
to include this acquisition. On December 31, 1995, McCall had $37,882,000 of
assets. Selected separate and combined financial information of the Company
and McCall for the year ended December 31, 1995 is presented below (in
thousands, except per share amounts).
<TABLE>
<CAPTION>
THE COMPANY MCCALL ADJUSTMENTS (2) COMBINED
----------- ------- --------------- --------
<S> <C> <C> <C> <C>
Operating Revenue ........................ $106,269 $20,029 $361 $126,659
Net Income ............................... 10,226 1,099 -- 11,325
Earnings per Common Share -- Assuming No
Dilution ................................ $ 1.64 (1) (1) $ 1.50
Earnings Per Common Share -- Assuming
Full Dilution ........................... $ 1.44 (1) (1) $ 1.36
</TABLE>
- ------------
(1) Not meaningful
(2) In August 1995, the Company and an affiliate of McCall formed SEAMAC
OFFSHORE, L.L.C. ("SEAMAC"), which was jointly owned and which operated
two vessels in Nigeria. Prior to the McCall Acquisition, SEACOR
recorded its interest in this venture based upon its 50% equity
interest. As a result of the McCall Acquisition, this venture is to be
dissolved and the assets will be wholly-owned by the Company. This
adjustment consolidates 100% of SEAMAC with SEACOR.
On June 6, 1996, the Company notified the Trustee of its 6.0% Notes of its
election to call the 6.0% Notes for redemption on July 12, 1996. Holders of
the 6.0% Notes have the right to convert the 6.0% Notes into shares of Common
Stock at a ratio of 39.024 shares of Common Stock per $1,000 principal amount
of the 6.0% Notes (representing a conversion price of $25.625 per share)
prior to the date of redemption. If the entire $55,250,00 principal amount
outstanding of the 6.0% Notes were converted, 2,156,076 shares of Common
Stock would be issued.
On June 6, 1996, the Company and CNN entered into an agreement (the "1996
CNN Agreement") pursuant to which the Company agreed to acquire six vessels
from CNN for an aggregate purchase price of $22,675,000, with the
understanding that three of such vessels will be bareboat chartered to CNN.
The 1996 CNN Agreement also provides for the Company to prepay the promissory
notes issued to CNN by a subsidiary of the Company on December 17, 1993 in
connection with the Company's acquisition on such date of certain vessels
from CNN. In addition, CNN has notified the Company of its election to
convert $4.75 million principal amount of the Company's 2.5% Notes issued to
CNN in connection with such acquisition of vessels into 156,650 shares of
Common Stock in accordance with the terms of the 2.5% Notes. Pursuant to the
1996 CNN Agreement, the Company agreed to include 459,948 shares of Common
Stock owned by CNN on June 6, 1996 and the 156,650 additional shares of
Common Stock to be issued to CNN upon the conversion of the 2.5% Notes in an
offering for resale to the public. The 1996 CNN Transaction is conditioned
upon the sale of such 616,598 shares of Common Stock pursuant to this
offering and is intended to occur substantially simultaneously with such
sale. In connection with this transaction, the Company expects to record an
extraordinary loss in connection with the prepayment of the promissory notes
of approximately $861,000, net of tax.
On June 7, 1996, the Company filed a Registration Statement with the
Securities and Exchange Commission, covering the sale of 750,000 shares of
its common stock to the public and registering additional shares to be sold
by selling shareholders, including the CNN shares discussed above.
25
<PAGE>
EXHIBIT INDEX
PAGE
EXHIBITS DESCRIPTION NUMBER
- -------- ------------- ------
23 Consent of Arthur Andersen LLP.
27 Financial Data Schedule.
<PAGE>
CONSENT OF INDEPENDENT PUBLIC ACCOUNTANTS
As independent public accountants, we hereby consent to the incorporation by
reference of our report dated June 7, 1996 covering the audited supplemental
consolidated financial statements of SEACOR Holdings, Inc. ("SEACOR") and
subisdiaries included in its Form 8-K dated May 31, 1996 and filed on June 14,
1996 into SEACOR's previously filed Registration Statement File No. 333-05483 on
Form S-3.
Arthur Andersen LLP
New Orleans, Louisiana
June 14, 1996
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<PERIOD-START> JAN-1-1995
<PERIOD-END> DEC-31-1995
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0
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