SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
__________
FORM 10-K
[X] ANNUAL REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE
ACT OF 1934 [FEE REQUIRED] - For the Fiscal Year Ended MARCH 31, 1995
[ ] TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES
EXCHANGE ACT OF 1934 [NO FEE REQUIRED] - For the Transition Period From
____________________ to ____________________.
Commission file number 1-6311
TIDEWATER INC.
(Exact name of registrant as specified in its Charter)
DELAWARE 72-0487776
(State or other jurisdiction of (I.R.S. Employer
incorporation or organization) Identification No.)
1440 CANAL STREET, NEW ORLEANS, LOUISIANA 70112
(Address of principal executive offices) (Zip Code)
REGISTRANT'S TELEPHONE NUMBER, INCLUDING AREA CODE (504) 568-1010
SECURITIES REGISTERED PURSUANT TO SECTION 12(B) OF THE ACT:
TITLE OF EACH CLASS NAME OF EACH EXCHANGE ON WHICH REGISTERED
Common Stock, par value $0.10 New York Stock Exchange, Pacific Stock Exchange
Preferred Stock Purchase Rights New York Stock Exchange, Pacific Stock Exchange
SECURITIES REGISTERED PURSUANT TO SECTION 12(G) OF THE ACT: None
Indicate by check mark whether the registrant (1) has filed all reports
required to be filed by Section 13 or 15(d) of the Securities Exchange Act of
1934 during the preceding 12 months (or for such shorter period that the
registrant was required to file such reports), and (2) has been subject to the
filing requirements for the past 90 days. Yes [X] No [ ]
Indicate by check mark if disclosure of delinquent filers pursuant to Item
405 of Regulation S-K is not contained herein, and will not be contained, to the
best of registrant's knowledge, in definitive proxy or information statements
incorporated by reference in Part III of this Form 10-K or any amendment to this
Form 10-K. [X]
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As of April 27, 1995, the aggregate market value of the voting stock held
by non-affiliates of the registrant was approximately $1,124,381,000.
53,237,839 shares of Tidewater Inc. common stock $0.10 par value per share
were outstanding on April 27, 1995. Registrant has no other class of common
stock outstanding.
DOCUMENTS INCORPORATED BY REFERENCE
Portions of the Proxy Statement for Registrant's 1995 Annual Meeting of
Stockholders are incorporated into Part III of this report.
TABLE OF CONTENTS
PART I
PAGE
ITEM NUMBER
- ---- ------
1 & 2. Business and Properties............................................ 3
3. Legal Proceedings.................................................. 7
4. Submission of Matters to a Vote of Security Holders................ 8
4A. Executive Officers of the Registrant............................... 8
PART II
5. Market for the Registrant's Common Stock and Related
Stockholder Matters........................................... 9
6. Selected Financial Data............................................ 10
7. Management's Discussion and Analysis of Financial
Condition and Results of Operations........................... 11
8. Financial Statements and Supplementary Data........................ 22
9. Changes in and Disagreements with Accountants on
Accounting and Financial Disclosure........................... 22
PART III
10. Directors and Executive Officers of the Registrant................. 22
11. Executive Compensation............................................. 22
12. Security Ownership of Certain Beneficial Owners and Management..... 22
13. Certain Relationships and Related Transactions..................... 23
PART IV
14. Exhibits, Financial Statement Schedules and Reports on Form 8-K.... 23
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PART I
ITEMS 1 AND 2. BUSINESS AND PROPERTIES
GENERAL
Tidewater Inc. (the "Company") was incorporated in Delaware in 1956. The
Company's principal executive offices are located at 1440 Canal Street, New
Orleans, Louisiana 70112, and its telephone number is (504) 568-1010. Unless
otherwise required by the context, the term "Company" as used herein refers to
Tidewater Inc. and its consolidated subsidiaries.
The Company's two principal divisions are Tidewater Marine and Tidewater
Compression. Tidewater Marine principally provides support services to the
international offshore petroleum industry. Tidewater Compression principally
provides natural gas and air compression equipment and services, primarily to
the energy industry.
Information concerning revenues, operating profits and assets for each of
the Company's business segments and the geographic distribution of its
operations is set forth in Item 7 of this report.
TIDEWATER MARINE
Tidewater Marine is the world's largest provider of offshore supply vessels
and marine support services. With a fleet of approximately 570 vessels,
Tidewater Marine operates, and has a leading market share, in most of the
world's significant oil and gas exploration and production markets. Tidewater
Marine provides services supporting all phases of offshore exploration,
development and production, including: towing of and anchor-handling of mobile
drilling rigs and equipment; transporting supplies and personnel necessary to
sustain drilling, workover and production activities; and supporting pipelaying
and other offshore construction activities.
The Company's fleet is deployed in the major offshore oil and gas areas of
the world. The principal areas of the Company's operations include the U.S. Gulf
of Mexico, areas offshore Australia, Brazil, Egypt, India, Indonesia, Malaysia,
Mexico, Trinidad, Venezuela and West Africa and in the North Sea and the Persian
Gulf. The Company conducts its operations through wholly-owned subsidiaries and
joint ventures. For information concerning revenues derived from domestic and
foreign marine operations, see "Marine Segment" in Item 7 of this report.
MARINE SERVICES EQUIPMENT. The Company's vessels regularly and routinely
move from one operating area to another, often to and from offshore operating
areas of different continents. Tables comparing the number of vessels in the
Company's marine fleet by class and geographic distribution appear under "Marine
Segment" in Item 7 of this report.
The Company's largest class of vessels consists of towing-supply and supply
vessels that are chartered to customers for use principally in transporting
supplies and equipment from shore bases to offshore drilling rigs, platforms and
other installations. In addition, vessels of the towing-supply class are
equipped for and are capable of towing drilling rigs and other marine equipment
and setting anchors for positioning and mooring drilling rigs.
The Company's other classes of vessels include crew and utility vessels
that are chartered to customers for use principally in transporting supplies and
personnel from shore bases to offshore drilling rigs, platforms and other
installations, and offshore tugs that tow floating drilling rigs, dock tankers,
tow
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barges, assist pipelaying and construction barges and are used in a variety of
other commercial towing operations, including towing barges carrying a variety
of bulk cargoes and containerized cargo.
The Company's vessels also include inshore tugs and both inshore and
offshore barges, production, line-handling and various special purpose vessels.
Inshore tugs, which are operated principally within inland waters, tow drilling
rigs to and from their locations, and tow barges carrying equipment and
materials for use principally in inland water drilling and production
operations. Barges are either used in conjunction with Company tugs or are
bareboat chartered to others.
Information concerning the average age of the Company's Marine vessel fleet
is set forth in Item 7 of this report.
In fiscal 1995, the Company acquired 14 used vessels, consisting of ten
towing supply and supply vessels, two offshore tugs, one crewboat and one barge.
Eight of the towing supply and supply vessels were previously leased to the
Company.
CONTRIBUTIONS OF MAIN CLASSES OF VESSELS. Of the Company's revenues from
marine vessel equipment operations, the following percentages were contributed
by the main classes of vessels:
YEAR ENDED MARCH 31,
- ------------------------------------------------------------------------------
1995 1994 1993
---- ---- ----
Towing-supply and supply vessels ........... 68% 67% 68%
Crew and utility vessels ................... 9% 9% 8%
Offshore tugs .............................. 19% 20% 19%
Other vessels .............................. 4% 4% 5%
- ------------------------------------------------------------------------------
SHIPYARDS. Quality Shipyards, Inc., a wholly-owned subsidiary of the
Company, operates two shipyards in Houma, Louisiana, which build, repair, modify
and drydock vessels. Approximately 27% of the shipyards' business for the year
ended March 31, 1995 related to repairs, modifications and drydockings of the
Company's vessels.
RISKS OF OPERATION AND INSURANCE. The operation of any marine equipment
involves an inherent risk of catastrophic marine disaster, adverse weather
conditions, mechanical failure, collisions, property losses to the vessel and
business interruption due to political action in foreign countries. Any such
event may result in a reduction in revenues or increased costs. The Company's
vessels are insured for estimated market value against damage or loss, including
war and pollution risks. The Company also carries workers compensation, maritime
employer's liability, general liability (including third party pollution) and
other insurance customary in the industry.
The Company's foreign marine equipment operations are subject to the usual
risks inherent in doing business in foreign countries. Such risks include
political changes, possible vessel seizure, company nationalization or other
governmental actions, currency restrictions and revaluations, and import/export
restrictions, all of which are beyond the control of the Company. Although it is
impossible to predict the likelihood of such occurrences or their effect on the
Company, the Company believes these risks to be within acceptable limits and, in
view of the mobile nature of the Company's principal revenue producing assets,
does not consider them to constitute a factor materially adverse to the conduct
of its foreign marine equipment operations as a whole.
INDUSTRY CONDITIONS AND COMPETITION. Tidewater Marine's operations are
materially dependent upon the levels of activity in offshore oil and natural gas
exploration, development and production throughout the world. Such activity
levels are affected both by short-term and long-term trends in world oil and
natural gas prices. In recent years, oil and natural gas prices and, therefore,
the level of offshore drilling
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and exploration activity, have been extremely volatile. A discussion of current
market conditions appears under "Marine Segment" in Item 7 of this report.
COMPETITION AND CUSTOMERS. The principal competitive factors for the
offshore vessel service industry are suitability and availability of equipment,
price and service. The Company has numerous competitors in virtually all areas
in which it operates. Certain customers of the Company own and operate vessels
to service certain of their offshore activities.
Tidewater Marine's diverse, mobile asset base and geographic distribution
allow it to respond quickly to market conditions and provide a full range of
vessel services to its customers throughout the world. Management believes that
the Company has a significant competitive advantage because of the size,
diversity and geographic distribution of its fleet, the Company's financial
strength and economies of scale.
Although one customer accounted for 13% and the five largest customers
accounted for approximately 30% of its marine revenues during the year ended
March 31, 1995, the Company does not consider its marine operations dependent on
any single customer.
GOVERNMENT REGULATIONS. The Company's vessels are subject to various
statutes and regulations governing their operation and maintenance.
Under the Merchant Marine Act of 1936 and the Shipping Act, 1916, the
Company would lose the privilege of engaging in U.S. coastwise trades if more
than 25% of the Company's outstanding stock was owned by non-U.S. citizens. The
Company has a dual stock certificate system to prevent non-U.S. citizens from
owning more than 25% of its common stock. In addition, the Company's charter
permits the Company certain remedies with respect to any transfer or purported
transfer of shares of the Company's common stock that would result in the
ownership by non-U.S. citizens of more than 24% of its common stock. Based on
information supplied to the Company by its transfer agent, approximately 9.4% of
the Company's outstanding common stock was owned by non-citizens as of March 31,
1995.
At March 31, 1995, 183 vessels wholly owned by the Company were registered
under flags other than the United States. In addition, all of the Company's 43
joint venture owned vessels were registered under non-U.S. flags at March 31,
1995. The laws of the United States provide that once a vessel is registered
under a flag other than the United States, it cannot thereafter engage in U.S.
coastwise trade. Therefore, the Company's non-U.S. flag vessels must continue to
be operated abroad, and if the Company were not able to secure charters abroad
for them, and work would otherwise have been available for them in the United
States, its operations would be adversely affected.
All of the Company's offshore vessels are subject to international safety
and classification standards. U.S. flag towing-supply and supply vessels are
required to undergo periodic inspections and to be recertified under drydock
examination at least twice every five years. Non-U.S. flag vessels are also
subject to various similar regulations.
TIDEWATER COMPRESSION
Tidewater Compression provides natural gas and air compression equipment
and services principally to the energy industry, primarily in the United States.
GAS COMPRESSION RENTALS. The Company rents natural gas compressors to oil
and gas producers and processors. With a fleet of 2,876 compressors, Tidewater
Compression operates the largest rental fleet of gas compressors in the United
States. The compressors are used primarily to boost the pressure of natural gas
from the wellhead into gas gathering systems, into nearby gas processing plants,
or into
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high pressure pipelines. Gas compression equipment and services offered by the
Company also are used in the production of coalbed methane and in enhanced
recovery projects such as fire-flooding, gas lift, or gas injection, with the
objective of increasing the amount of oil or condensate that can be recovered
from a reservoir. Customers often rent compressors rather than purchase them
because the required compressor horsepower and stage configuration can change
several times in the lifetime of a project. The primary market served is natural
gas production activities in the United States, although the Company is actively
seeking to establish markets outside the United States. A table setting forth
utilization, rental rates and fleet size of the Tidewater Compression gas rental
fleet appears in "Compression Segment" in Item 7 of this report.
During fiscal 1995, the Company acquired the natural gas compression assets
of Halliburton Company and one of its affiliated companies (collectively
"Halliburton Compression") and Brazos Gas Compressing Company ("Brazos"), a
subsidiary of Mitchell Energy & Development Corp. ("Mitchell"). In the
Halliburton Compression acquisition, the rental agreements entered into by
Halliburton for rental of its compressors to customers were assumed by the
Company. As part of the Brazos transaction, the Company entered into an
agreement to provide the gas compression service needs of Mitchell Energy
Corporation, Mitchell's oil and gas operating subsidiary for a period of two
years at fair market value rental rates. Information concerning acquisitions is
set forth in Item 7 and Note 2 of the Notes to Consolidated Financial Statements
included in this report.
EQUIPMENT AND PARTS SALES. Tidewater Compression's Tide-Air division sells
air and natural gas compressor packages and other related equipment to domestic
and foreign engineering contractors, oil and gas producers and to manufacturers
and other concerns. The equipment consists of skid mounted compressors designed
to meet complex specifications for specialized applications. The gas compression
equipment is used to facilitate the production, transportation and storage of
natural gas as well as boosting fuel gas pressure for electrical power
generation. The air compression equipment is used to operate machinery, for
instrumentation and in manufacturing processes. The Company's compression
operations include an engineering and fabrication facility at which the Company
designs and constructs air and gas compression packages.
DISTRIBUTORSHIPS. The Company holds distributorships for various
manufacturers of air and gas compressors, related equipment and a wide range of
accessories. These manufacturers are the source for equipment and accessories
sold by the Company.
INDUSTRY CONDITIONS. In addition to well age and natural gas consumption, a
structural shift in U.S. oil and gas industry operations is affecting demand for
natural gas compression package rentals. Many of the major oil companies have
directed their focus toward international operations and away from domestic
natural gas reserves. Accordingly, these companies recently have been selling
their domestic natural gas reserves and minimizing staff in domestic operations.
As a result, demand for rental packages of natural gas compressors is expected
to increase as buyers of natural gas reserves or producers with reduced staffs
are less likely to own and operate natural gas compressor packages and more
likely to rent natural gas compressor packages to meet their natural gas
compression needs.
COMPETITION AND CUSTOMERS. The compression equipment market is highly
competitive, with the principal competitive factors being price, service and
availability. The Company competes with a large number of companies in each area
in which it operates.
Although one customer accounted for 4% and the five largest customers
accounted for approximately 14% of its compression revenues during the year
ended March 31, 1995, the Company does not consider itself dependent on any one
customer.
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INTERNATIONAL OPERATIONS. While most of Tidewater Compression's operations
are domestic, the Company sells and rents natural gas compressor packages and
parts in Canada and rents natural gas units in Argentina. The Tide-Air
division's air and gas compression packages are sold to customers throughout the
world.
SEASONALITY
Tidewater Marine generally has its highest utilization rates in the warmer
weather months when the weather is more favorable for offshore exploration,
development and construction work. Tidewater Compression generally has its best
results in the winter months when natural gas is in greater demand. However,
business volume for both Tidewater Marine and Tidewater Compression is more
dependent on oil and gas prices and the global supply and demand conditions for
the Company's services than any seasonal variation.
ENVIRONMENTAL COMPLIANCE
Compliance with existing governmental regulations which have been enacted
or adopted regulating the discharge of materials into the environment, or
otherwise relating to the protection of the environment, does not have, nor is
expected to have, a material effect on the Company.
EMPLOYEES
As of March 31, 1995, the Company had approximately 6,870 employees. The
Company considers relations with employees to be satisfactory. The Company is
not a party to any union contract in the United States but through several
subsidiaries is a party to union agreements covering local nationals in several
foreign countries.
In fiscal 1995, the Company commenced a corporate restructuring in order to
increase margins, sharpen the focus of management and to better respond to
customer needs. The first phase of the program involved the elimination of
approximately 62 positions at the Company's headquarters. The second phase of
the restructuring involved reduction of 88 positions at various facilities of
Tidewater Marine. Information concerning the restructurings is set forth in Note
11 of the Notes to Consolidated Financial Statements included in this report.
ITEM 3. LEGAL PROCEEDINGS
The Company is not a party to any litigation which, in the opinion of
management, is likely to have a material adverse effect on the Company's
financial position or results of operations. Information concerning pending
litigation is set forth in Item 7 and Note 11 of the Notes to Consolidated
Financial Statements included in this report.
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ITEM 4. SUBMISSION OF MATTERS TO A VOTE OF SECURITY HOLDERS
There were no matters submitted to a vote of security holders during the
fourth quarter of fiscal 1995.
ITEM 4A. EXECUTIVE OFFICERS OF THE REGISTRANT
EXECUTIVE OFFICERS OF THE COMPANY
The executive officers of the Company are as follows:
NAME AGE POSITION
---- --- --------
William C. O'Malley .. 58 Chairman, President and Chief Executive Officer
since October, 1994. Chairman of the Board from
1987 to 1994 and Chief Executive Officer from
1990 to 1994 of Sonat Offshore Drilling. Inc.
Employed 1994.
Richard M. Currence .. 56 Executive Vice President since 1992. Senior Vice
President from 1986 to 1992. Employed 1966 with
a break in service from 1973 to 1985.
Ken C. Tamblyn ....... 51 Executive Vice President since 1992. Senior Vice
President from 1986 to 1992. Employed 1986.
Cliffe F. Laborde .... 43 Senior Vice President and General Counsel since
1992. Employed 1992. Shareholder in Gelpi,
Sullivan, Carroll & Laborde, a professional law
corporation, from 1979 to 1992.
Stephen A. Snider .... 47 Senior Vice President since 1991. Employed 1975
with a break in service from 1983 to 1991 during
which Mr. Snider owned and operated Learning
Associates, Inc.
There are no family relationships between the officers of the Company. The
Company's officers are elected annually by the Board of Directors and serve for
one-year terms or until their successors are elected.
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PART II
ITEM 5. MARKET FOR THE REGISTRANT'S COMMON STOCK AND RELATED STOCKHOLDER
MATTERS
The Company's common stock is traded on the New York Stock Exchange and the
Pacific Stock Exchange under the symbol TDW. At March 31, 1995, there were
approximately 2,406 record holders of the Company's common stock, based upon the
record holder list maintained by the Company's stock transfer agent. The
following table sets forth the high and low closing sales price of the Company's
common stock as reported on the New York Stock Exchange Composite Tape and the
amount of cash dividends per share declared on the common stock for the periods
indicated.
- --------------------------------------------------------------------------------
FISCAL YEAR QUARTER HIGH LOW DIVIDEND
- --------------------------------------------------------------------------------
1995 First 23-1/4 19-1/4 0.10
Second 24-7/8 21-1/4 0.10
Third 23-3/8 18-1/4 0.10
Fourth 20-3/8 16-3/4 0.10
1994 First 26-3/8 21-1/8 --
Second 23-1/4 19 0.10
Third 25-3/4 19-1/2 0.10
Fourth 23-1/8 19-1/2 0.10
- --------------------------------------------------------------------------------
The payment of dividends on common and preferred stock are subject to
limitations under the Company's revolving credit and term loan agreement,
although no preferred stock is currently outstanding. None of such limitations
are currently expected to restrict the Company's continued payment of dividends
at current levels. A further discussion of this matter is contained in Note 7 of
the Notes to the Consolidated Financial Statements included in this report.
As a result of the timing of the fiscal 1994 Board of Director meetings,
only three quarterly dividends of $0.10 per common share were declared during
fiscal 1994.
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ITEM 6. SELECTED FINANCIAL DATA
The following table sets forth a summary of selected financial data for
each of the last five fiscal years. This information should be read in
conjunction with "Management's Discussion and Analysis of Financial Condition
and Results of Operations" and the Consolidated Financial Statements of the
Company included in this report.
YEARS ENDED MARCH 31
(IN THOUSANDS, EXCEPT RATIO AND PER SHARE AMOUNTS)
<TABLE>
<CAPTION>
1995(5) 1994 1993 1992 1991
- -----------------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C>
Revenues:
Marine operations ............................. $455,284 466,601 413,439 430,681 394,325
Compression operations ........................ 83,490 55,471 62,099 54,561 61,479
- -----------------------------------------------------------------------------------------------------------------------------------
$538,774 522,072 475,538 485,242 455,804
===================================================================================================================================
Earnings from continuing operations ............. $ 42,628 36,130 27,809 25,904 36,904
Discontinued operations (1) ..................... -- -- 3,099 357 (2,258)
Extraordinary loss on early
debt retirement (2) ........................... -- (11,970) -- -- --
Accounting change (3) ........................... -- -- (6,640) -- --
- -----------------------------------------------------------------------------------------------------------------------------------
Net earnings .................................... $ 42,628 24,160 24,268 26,261 34,646
===================================================================================================================================
Per common share:
Earnings from continuing operations ........... $ .80 .67 .53 .49 .70
Discontinued operations (1) ................... -- -- .06 .01 (.04)
Extraordinary loss on early
debt retirement (2) ......................... -- (.22) -- -- --
Accounting change (3) ......................... -- -- (.13) -- --
- -----------------------------------------------------------------------------------------------------------------------------------
Net earnings .................................... $ .80 .45 .46 .50 .66
===================================================================================================================================
Total assets .................................... $902,185 809,886 838,748 867,573 896,420
===================================================================================================================================
Long-term debt .................................. $100,000 -- 95,722 123,896 181,622
===================================================================================================================================
Working capital ................................. $ 99,693 156,126 201,399 171,231 140,066
===================================================================================================================================
Current ratio ................................... 1.98 2.20 3.10 2.43 2.04
===================================================================================================================================
Cash dividends declared per
common share (4) .............................. $ .40 .30 .325 -- --
===================================================================================================================================
</TABLE>
(1) See Note (3) of Notes to Consolidated Financial Statements for further
information concerning the disposal of the Container Shipping segment.
(2) For further details concerning the early debt retirement see Note (7) of
Notes to Consolidated Financial Statements.
(3) For further details concerning the accounting change see Note (8) of Notes
to Consolidated Financial Statements.
(4) As a result of the timing of the fiscal 1994 Board of Directors meetings,
only three quarterly dividends of $.10 per common share each were declared
during fiscal 1994.
(5) See Note (11) of Notes to Consolidated Financial Statements for further
information concerning a $5.9 million pre-tax charge to earnings during
fiscal 1995.
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ITEM 7. MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND
RESULTS OF OPERATIONS
This discussion and analysis of financial condition and results of
operations should be read in conjunction with the consolidated financial
statements, the related disclosures and the selected financial data.
Fiscal 1995 pre-tax earnings rose approximately 17% principally due to the
significant expansion of the Company's natural gas compressor fleet and higher
gains from asset sales. Fiscal 1995 results also include certain charges related
to the Company's restructuring of its headquarters and worldwide marine
operations and increased reserves to cover possible losses due to the potential
insolvency of certain of the Company's insurers. Demand for Company services
weakened during fiscal 1995 as a result of lower U.S. natural gas prices and the
instability of the price of oil.
LIQUIDITY AND CAPITAL RESOURCES
Fiscal 1995 operating activities generated a consistent level of cash
compared with the corresponding amount for fiscal 1994. Marine operating margins
primarily determine the overall level of cash generated from operating
activities. The following table compares operating margins for the Company's
business segments.
(IN THOUSANDS)
1995 1994 1993
- --------------------------------------------------------------------------------
Marine ......................... $169,734 177,665 161,012
Compression .................... 37,604 25,133 25,816
- --------------------------------------------------------------------------------
$207,338 202,798 186,828
================================================================================
Operating margins are defined as revenues less operating expenses, excluding
depreciation.
Fluctuations in the level of Marine operating margins over the past three
fiscal years were attributable primarily to decreased levels of utilization for
a smaller worldwide vessel fleet from fiscal 1994 to fiscal 1995 and higher
utilization and average day rates for the domestic-based vessel fleet from
fiscal 1993 to fiscal 1994. Fiscal 1995 Compression operating margins surpassed
the prior year level principally due to a substantial increase in the size of
the natural gas compressor fleet. Fiscal 1994 Compression operating margins were
down slightly from fiscal 1993 due to an anticipated drop in sales of engineered
products. For the past several years operating activities have generated cash in
excess of the amount required to satisfy current obligations. Anticipated fiscal
1996 utilization levels and day/rental rates for the Marine vessel fleet and
Compression rental equipment should maintain this condition.
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Investing activities for fiscal 1995 consumed a significantly larger amount
of cash compared with fiscal 1994. The principal reason for the increase over
the prior year level is the acquisition of the natural gas compression assets of
Halliburton Company in the third quarter of fiscal 1995 for approximately $205
million and the acquisition of the assets of Brazos Gas Compressing Company for
approximately $35 million at the end of the second quarter of fiscal 1995.
Additions to properties and equipment, excluding the Brazos and Halliburton
Compression acquisitions, and proceeds from asset sales are compared by business
segment in the following tables for the years ended March 31:
(IN THOUSANDS)
1995 1994 1993
- --------------------------------------------------------------------------------
ADDITIONS TO PROPERTIES AND EQUIPMENT:
MARINE:
Additional equipment ........................... $ 18,285 11,761 27,055
Modifications/additions to existing fleet ...... 20,053 18,936 17,518
Other .......................................... 1,824 1,697 1,530
- --------------------------------------------------------------------------------
40,162 32,394 46,103
- --------------------------------------------------------------------------------
COMPRESSION:
Additional equipment ........................... 7,213 15,976 3,579
Modifications/additions to existing fleet ...... 5,962 3,729 1,177
Other .......................................... 1,330 840 869
- --------------------------------------------------------------------------------
14,505 20,545 5,625
General Corporate ................................ 327 380 638
- --------------------------------------------------------------------------------
$ 54,994 53,319 52,366
================================================================================
PROCEEDS FROM SALES OF ASSETS:
Marine fleet ................................... $ 18,661 8,107 3,890
Compression fleet .............................. 4,358 3,376 4,215
- --------------------------------------------------------------------------------
$ 23,019 11,483 8,105
================================================================================
Fiscal 1995 financing activities provided cash of $42.3 million primarily
due to borrowing $150 million to finance the Halliburton Compression
acquisition. The borrowing was under a $250 million amended and restated
Revolving Credit and Term Loan Agreement with several banks and bears interest
at fluctuating rates subject to certain options chosen in advance by the
Company. In addition to normal scheduled debt repayments, fiscal 1995 payments
on long-term debt include $35.0 million of prepayments on debt borrowed to
finance the Halliburton Compression acquisition and approximately $46.0 million
for the early retirement of the 7% convertible subordinated debentures called
for redemption on March 16, 1994. Fiscal 1994 financing activities include
approximately $57.6 million to retire, prior to maturity, $51.1 million of notes
bearing interest rates ranging from 9.17% to 10%. The remainder of the cash used
to retire the notes was for associated prepayment penalties. Fiscal 1994
principal payments also include approximately $9.0 million for termination of
capitalized lease obligations and the related purchase of five marine vessels.
Fiscal 1993 cash used in financing activities includes approximately $38.0
million for long-term debt retired prior to maturity.
On March 16, 1994, the Company called for redemption the approximately
$47.2 million of 7% convertible subordinated debentures due 2010. Holders
converted $1,113,000 of debentures into 44,520 shares of the Company's common
stock at a conversion price of $25.00 per share. The remainder of the debentures
were redeemed at 101.4% of par value plus accrued interest on April 18, 1995. An
extraordinary charge to earnings of approximately $7.5 million (net of income
taxes), or $.14 per common share, was recorded in the fourth quarter of fiscal
1994. The extraordinary charge consisted of $.6 million of prepayment premium
and $11.0 million of unamortized original issue discount and deferred financing
costs, less $4.1 million of income tax benefits.
During fiscal 1993, dividends of $.075 per common share were declared and
paid in each of the first three quarters and a $.10 per common share dividend
was declared in the fourth quarter. Due to
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the timing of the meetings of the Board of Directors, three quarterly dividends
were declared in fiscal 1994, each at $.10 per common share. During fiscal 1995
dividends of $.10 per common share were declared and paid in each quarter.
Continued dividend payments are subject to declaration by the Board of Directors
and are subject to limitation by the Company's revolving credit and term loan
agreement.
RESULTS OF OPERATIONS
Revenues, operating profits and certain other information by business segment
and geographic distribution for the years ended March 31 are:
<TABLE>
<CAPTION>
(IN THOUSANDS)
1995 1994 1993
- -----------------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C>
Revenue (A):
Marine:
United States .............................................................. $ 207,547 197,262 131,229
Foreign (B) ................................................................ 247,737 269,339 282,210
- -----------------------------------------------------------------------------------------------------------------------------------
455,284 466,601 413,439
Compression .................................................................. 83,490 55,471 62,099
- -----------------------------------------------------------------------------------------------------------------------------------
$ 538,774 522,072 475,538
===================================================================================================================================
Operating profit:
Marine:
United States .............................................................. 47,080 35,018 912
Foreign (B) ................................................................ 25,090 30,765 52,085
- -----------------------------------------------------------------------------------------------------------------------------------
72,170 65,783 52,997
- -----------------------------------------------------------------------------------------------------------------------------------
Compression .................................................................. 14,436 6,895 10,177
Equity in net earnings of unconsolidated companies ........................... 3,147 2,686 2,525
Other income ................................................................. 1,034 1,034 367
Other expense ................................................................ (8,350) -- (3,771)
General corporate expenses ................................................... (10,285) (10,806) (9,797)
Interest expense ............................................................. (4,744) (7,939) (12,323)
- -----------------------------------------------------------------------------------------------------------------------------------
Earnings from continuing operations before income taxes ......................... $ 67,408 57,653 40,175
===================================================================================================================================
Identifiable assets:
Marine:
United States .............................................................. 229,971 271,040 295,008
Foreign (B) ................................................................ 314,532 327,975 348,767
- -----------------------------------------------------------------------------------------------------------------------------------
544,503 599,015 643,775
Compression .................................................................. 308,339 68,285 57,143
- -----------------------------------------------------------------------------------------------------------------------------------
Total operating segments ............................................... 852,842 667,300 700,918
Investments in and advances to unconsolidated Marine companies (A) ........... 21,527 21,843 24,424
Disposed businesses and discontinued segments ................................ -- 284 2,258
Corporate .................................................................... 27,816 120,459 111,148
- -----------------------------------------------------------------------------------------------------------------------------------
Total ........................................................... $ 902,185 809,886 838,748
===================================================================================================================================
Depreciation:
Marine ....................................................................... 70,736 74,343 71,673
Compression .................................................................. 15,472 9,144 8,352
- -----------------------------------------------------------------------------------------------------------------------------------
Total operating segments ............................................... 86,208 83,487 80,025
Corporate .................................................................... 390 165 292
- -----------------------------------------------------------------------------------------------------------------------------------
Total ........................................................... $ 86,598 83,652 80,317
===================================================================================================================================
</TABLE>
(A) For fiscal 1995 one Marine customer accounted for approximately 11% of
consolidated revenues.
(B) Marine equipment operations are conducted worldwide with assets that are
highly mobile. Revenues and identifiable assets attributable to these
operations in any one country are not "significant" as that term is defined
by Financial Accounting Standards No. 14. Further, most identifiable assets
in each country are comprised of offshore service vessels, which regularly
and routinely move from one operating area to another, often to and from
offshore operating areas of different continents. Equity in net assets of
foreign subsidiaries is $164,175,000, $192,038,000 and $224,905,000 at
March 31, 1995, 1994 and 1993, respectively. Other foreign identifiable
assets include accounts receivable and other balances denominated in
foreign currencies aggregating approximately $7,062,000, $7,295,000 and
$8,837,000 at March 31, 1995, 1994 and 1993, respectively. These amounts
are subject to the usual risks of fluctuating exchange rates and
government- imposed exchange controls.
-13-
<PAGE>
Fiscal 1995 consolidated revenues and pre-tax earnings rose 3.2% and 16.9%,
respectively, above the corresponding amounts for the prior fiscal year
primarily due to significantly higher Compression revenues and operating profits
and higher Marine operating profits. The 109% increase in fiscal 1995
Compression operating profits over the prior fiscal year is a result of the
substantial expansion of the natural gas compressor rental fleet during the
second half of fiscal 1995. Higher fiscal 1995 Marine operating profits were
principally the result of higher gains from sales of assets and shipyard profits
partially offset by lower operating profits for a smaller foreign-based vessel
fleet. Shipyard profits rose substantially above prior year levels due to the
construction of vessels for third-parties. Fiscal 1995 pre-tax earnings were
adversely affected by $8.4 million of other expense which consisted of a $5.9
million charge resulting from the restructuring of the Company's worldwide
marine operations and its headquarters office and a $2.5 million provision for
possible losses due to the potential insolvency of certain of the Company's
insurers. Substantially all of the costs associated with the restructuring
program were paid before March 31, 1995. The primary effect of the restructuring
on future levels of costs and expenses will be to reduce annual payroll and
related costs by approximately $6.6 million. During fiscal 1995, the estimated
salvage value used to determine depreciation expense for natural gas compressors
was increased. Please see Note 1 of Notes to Consolidated Financial Statements
for further discussion of this matter.
Fiscal 1994 consolidated revenues and earnings from continuing operations
before income taxes rose 9.7% and 43.5%, respectively, above the corresponding
amounts for the prior fiscal year primarily because of higher utilization and
substantially higher average vessel day rates for the domestic-based vessel
fleet. Fiscal 1994 revenues and operating profits for the foreign-based vessel
fleet reflect weaker demand in certain foreign markets resulting from
uncertainties associated with the then future supply and price of oil. Fiscal
1994 foreign operating profits also include a higher level of repair and
maintenance costs resulting from the timing of vessel drydockings. Lower fiscal
1994 Compression revenues and operating profits compared with the corresponding
amounts for the prior fiscal year are primarily the result of a lower level of
engineered product sales. Fiscal 1994 Marine and Compression operating profits
also include approximately $.3 million and $1.0 million, respectively, of
severance costs associated with the early retirement of several employees.
Fiscal 1993 non-recurring charges totaling $3.8 million relate to an
amendment of an employment and consulting agreement with the Company's then
chairman of the board, president and chief executive officer. For its benefit,
the Company elected to amend the agreement in view of the possible changes to
tax laws then under consideration by the Clinton administration and Congress.
The amendment accelerated the vesting of all outstanding shares of restricted
stock such that these shares became fully vested and freely transferable
immediately. The original terms of the restricted stock shares included
restrictions during the employment term of the agreement. Due to the
acceleration of the vesting of the restricted stock shares on March 31, 1993,
the remaining deferred compensation associated with the restricted stock of
$2,850,000 was charged to other expense in the Consolidated Statements of
Earnings in fiscal 1993.
The amendment also provided for an immediate lump-sum distribution of the
present value of benefits under the Company's supplemental retirement plan,
including the additional benefits that would have accrued assuming he remained
employed by the Company through September 24, 1994. The lump sum distribution
amounted to $2,212,000 and included $921,000 for unaccrued benefits which was
charged to other expense in the Consolidated Statements of Earnings in fiscal
1993.
-14-
<PAGE>
Consolidated general and administrative expenses for the years ended March
31 consist of the following components:
(IN THOUSANDS)
1995 1994 1993
- --------------------------------------------------------------------------------
TYPE:
Personnel ......................... $36,152 37,518 36,058
Office and property ............... 9,577 10,363 9,947
Sales and marketing ............... 3,951 4,190 4,254
Professional services ............. 3,468 4,580 3,741
Insurance ......................... 2,010 1,750 1,197
Other ............................. 5,185 4,695 3,282
- --------------------------------------------------------------------------------
$60,343 63,096 58,479
================================================================================
MARINE SEGMENT
The Marine segment provides a diverse range of services and equipment to
the offshore oil and gas industry. Because operating costs and depreciation do
not change proportionally with changes in revenues, the amount of operating
profit for the Marine segment primarily is determined by vessel fleet
utilization and day rates.
Marine segment revenues for the years ended March 31 consist of the
following:
(IN THOUSANDS)
1995 1994 1993
- -------------------------------------------------------------------------------
Owned or chartered vessels:
Domestic ......................... $ 177,109 178,726 132,496
Foreign .......................... 246,967 269,169 281,983
- -------------------------------------------------------------------------------
424,076 447,895 414,479
Brokered vessels .................... 10,639 10,083 7,081
Shipyard sales ...................... 20,569 8,623 3,014
Intercompany eliminations (A) ....... -- -- (11,135)
- -------------------------------------------------------------------------------
$ 455,284 466,601 413,439
===============================================================================
(A) Revenues earned from the charter of equipment to the discontinued Container
Shipping segment.
-15-
<PAGE>
Marine fleet utilization is affected primarily by market conditions. It is
also influenced to a lesser degree by drydockings to satisfy safety and
inspection requirements because Marine vessels must undergo periodic inspections
to remain properly classified and certified. These inspections, whenever
possible, are done during seasonally slow periods to minimize the impact on
vessel operations and are only done if the vessel is considered to have
continuing economic viability. The following table compares day-based Marine
fleet utilization percentages by vessel class and in total for the years ended
March 31:
1995 1994 1993
- -----------------------------------------------------------------------------
UTILIZATION:
DOMESTIC-BASED FLEET:
Towing Supply/Supply ............... 85.8% 90.2% 83.8%
Crew/Utility ....................... 89.4% 92.0% 88.3%
Offshore tugs ...................... 58.1% 64.4% 69.3%
Other .............................. 47.2% 67.4% 69.8%
Total .............................. 77.4% 82.2% 79.6%
FOREIGN-BASED FLEET:
Towing Supply/Supply ............... 80.8% 77.7% 82.9%
Crew/Utility ....................... 79.0% 72.6% 81.9%
Offshore Tugs ...................... 76.3% 78.7% 80.3%
Other .............................. 46.4% 72.2% 86.9%
Total .............................. 73.8% 76.2% 83.2%
WORLDWIDE FLEET:
Towing Supply/Supply ............... 82.6% 81.6% 83.1%
Crew/Utility ....................... 84.8% 82.5% 85.2%
Offshore Tugs ...................... 67.2% 71.6% 74.5%
Other .............................. 46.5% 71.0% 82.1%
Total .............................. 75.2% 78.4% 81.9%
=============================================================================
The domestic fleet consists of vessels operating in U.S. waters while the
foreign fleet consists of vessels operating outside U.S. waters.
Marine vessel utilization for all periods presented reflects demand trends
for offshore marine services. Lower utilization of the worldwide vessel fleet in
fiscal 1995 compared with fiscal 1994 is the result of decreased demand for
offshore marine services resulting from lower U.S. natural gas prices which
negatively affected utilization of the domestic-based vessel fleet. Instability
in the price of oil weakened demand for offshore marine services in foreign
markets and, in turn, adversely affected utilization of the foreign-based vessel
fleet. Higher fiscal 1994 utilization compared with fiscal 1993 of the
domestic-based vessel fleet reflects increased demand for offshore marine
services in the U.S. Gulf of Mexico. Higher demand resulted from increased
natural gas exploration and drilling activity which began late in the third
quarter and continued through the fourth quarter of fiscal 1993 and throughout
most of fiscal 1994. Toward the end of the fourth quarter of fiscal 1994, the
normal seasonal slowdown of offshore activity caused a slight drop in
utilization. Fiscal 1994 utilization of the foreign-based vessel fleet below the
fiscal 1993 level results primarily from softening demand for offshore marine
services in certain foreign markets, principally the West African market.
-16-
<PAGE>
Marine vessel day rates are determined by the demand created through the
level of offshore exploration, development and production spending by energy
exploration and production companies. Suitability of equipment, the degree of
service provided and the overall supply of marine service vessels also influence
vessel day rates. The following table provides a comparison of average day rates
by vessel class and in total for the years ended March 31:
1995 1994 1993
- --------------------------------------------------------------------------------
AVERAGE VESSEL DAY RATES:
DOMESTIC-BASED FLEET:
Towing Supply/Supply ............... $3,569 3,551 2,696
Crew/Utility ....................... 1,274 1,230 1,121
Offshore tugs ...................... 4,607 4,259 3,850
Other .............................. 3,045 1,826 1,598
Total .............................. $3,087 2,934 2,412
FOREIGN-BASED FLEET:
Towing Supply/Supply ............... $3,569 3,660 3,592
Crew/Utility ....................... 1,723 1,727 1,610
Offshore Tugs ...................... 2,591 2,923 2,906
Other .............................. 932 567 572
Total .............................. $2,882 2,793 2,701
WORLDWIDE FLEET:
Towing Supply/Supply ............... $3,569 3,622 3,339
Crew/Utility ....................... 1,459 1,445 1,349
Offshore Tugs ...................... 3,465 3,516 3,365
Other .............................. 1,363 875 816
Total .............................. $2,964 2,848 2,601
================================================================================
The domestic fleet consists of vessels operating in U.S. waters while the
foreign fleet consists of vessels operating outside U.S. waters.
Fiscal 1995 average day rates for the worldwide vessel fleet rose 4% above
the prior year level and was due primarily to the mix of vessels working. Fiscal
1995 average vessel day rates for the foreign-based vessel fleet were higher due
to a much lower level of activity for the inshore towing fleet in Nigeria.
Because these vessels have much lower average day rates, they positively affect
the overall average day rate of the fleet as utilization and the number of these
vessels in the fleet declines. In fiscal 1994, a higher average day rate for a
larger domestic-based vessel fleet was the principal factor contributing to the
growth in Marine revenues and operating profits. During fiscal 1994 average day
rates for the domestic-based vessel fleet rose steadily in contrast to fiscal
1993, when average day rates for a smaller vessel fleet declined. The average
day rate for the foreign-based vessel fleet for fiscal 1994, although higher
than the fiscal 1993 average day rate, did not significantly change compared
with the ending fiscal 1993 level. The fiscal 1994 increase in the average day
rate for the foreign-based vessel fleet primarily is a result of a favorable
shift in the mix of vessels working in certain foreign locations.
As the global supply of Marine service vessels continues to decline,
prospects for higher average vessel day rates improve. However, given the
volatile nature of demand for offshore marine services, any sustained
improvement in vessel day rates is not assured.
-17-
<PAGE>
The following table compares the average number of vessels by class and
geographic distribution during the years ended March 31 and the actual March 31,
1995 vessel count:
ACTUAL
VESSEL AVERAGE NUMBER OF
COUNT AT VESSELS DURING YEAR
MARCH 31, ENDED MARCH 31,
- --------------------------------------------------------------------------------
1995 1995 1994 1993
- --------------------------------------------------------------------------------
DOMESTIC-BASED FLEET:
Towing Supply/Supply ........................ 93 92 88 78
Crew/Utility ................................ 49 49 47 42
Offshore Tugs ............................... 43 48 47 44
Other ....................................... 14 14 21 25
- --------------------------------------------------------------------------------
Total ....................................... 199 203 203 189
- --------------------------------------------------------------------------------
FOREIGN-BASED FLEET:
Towing Supply/Supply ........................ 169 175 191 200
Crew/Utility ................................ 37 39 45 40
Offshore Tugs ............................... 48 47 49 40
Other ....................................... 50 57 61 64
- --------------------------------------------------------------------------------
Total ....................................... 304 318 346 344
- --------------------------------------------------------------------------------
Owned or chartered vessels included
in marine revenues ........................ 503 521 549 533
Vessels withdrawn from active service ....... 21 18 15 13
Joint venture owned vessels ................. 43 43 43 43
- --------------------------------------------------------------------------------
Total ...................................... 567 582 607 589
================================================================================
WORLDWIDE FLEET:
Towing Supply/Supply ........................ 304 306 313 308
Crew/Utility ................................ 92 94 99 92
Offshore Tugs ............................... 94 98 98 87
Other ....................................... 77 84 97 102
- --------------------------------------------------------------------------------
Total ..................................... 567 582 607 589
================================================================================
The drop in average size of the foreign-based vessel fleet from 346 for fiscal
1994 to 318 for fiscal 1995 is due to several vessels being withdrawn from
active service due to age and anticipated high repair and maintenance costs, the
transfer of vessels to the domestic-based vessel fleet and the return of vessels
to their owners that could not be operated profitably under current market
conditions. Additional vessels in the Marine fleet may be withdrawn in the
future as they become uneconomical to operate.
-18-
<PAGE>
The following table compares major components of Marine operating costs and
compares selected statistics for owned and chartered vessels:
<TABLE>
<CAPTION>
(IN THOUSANDS)
1995 1994 1993
- --------------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C>
Crew costs .............................................................. $ 127,589 135,374 122,244
Repair and maintenance .................................................. 62,662 68,625 63,440
Vessel insurance ........................................................ 30,551 24,918 24,969
Fuel, lube and supplies ................................................. 20,715 22,296 20,631
Charter fees, mobilization/demobilization ............................... 6,877 8,113 8,835
Other ................................................................... 10,260 12,094 14,910
- --------------------------------------------------------------------------------------------------------------------------------
Total operating costs of owned and chartered vessels ................. 258,654 271,420 255,029
Brokered vessels' costs ................................................. 9,814 9,274 6,248
Shipyard costs .......................................................... 17,082 8,242 2,116
Intercompany eliminations (A) ........................................... -- -- (10,966)
- --------------------------------------------------------------------------------------------------------------------------------
$ 285,550 288,936 252,427
================================================================================================================================
FOR OWNED AND CHARTERED VESSELS:
Overall percentage increase (decrease) in operating costs ............ (4.7%) 6.4% 3.7%
================================================================================================================================
Operating costs as a percentage of related revenues .................. 60.9% 60.6% 61.5%
================================================================================================================================
</TABLE>
(A) Costs incurred from the charter of equipment to the discontinued Container
Shipping segment.
Changes in fleet size and utilization are the principal factors which cause
fluctuations in the amount of crew costs. The drop in fiscal 1995 crew costs
from fiscal 1994 is primarily the result of lower activity for a smaller
worldwide fleet. Higher fiscal 1994 crew costs compared with fiscal 1993
principally are the result of the higher activity level of the domestic-based
vessel fleet, which generally has higher crewing costs than the foreign-based
vessel fleet, and the addition of 19 vessels purchased on March 15, 1993. The
absence of significant new vessel construction within the energy services
industry over the past 10 to 12 years has caused the average age of the
Company's Marine vessel fleet to rise. Currently the average age of the
Company's Marine vessel fleet is approximately 16 years. The increase in average
age of the fleet combined with normal inflationary effects has, in turn,
resulted in higher levels of repair and maintenance costs. Though primarily
dictated by regulatory agencies, the scheduling of vessel drydockings affects
the amount of repair and maintenance expense in any year. Vessel drydockings,
whenever possible, are also done to minimize any impact on vessel revenues.
Higher fiscal 1995 insurance costs compared with the prior periods are primarily
the result of general insurance market conditions. Other vessel costs for fiscal
1993 include approximately $2.0 million of write-offs which resulted from a
comprehensive review of marine inventories and a significantly higher amount of
broker commissions.
Gains on asset sales contributed $12.4 million, $3.3 million and $2.9
million for the fiscal years ended March 31, 1995, 1994 and 1993, respectively.
Operating margins from brokered vessel activity generally contribute nominally
to Marine operating profits.
COMPRESSION SEGMENT
The Compression segment provides natural gas compression services and
equipment for a variety of applications primarily in the energy industry. It
also designs, fabricates and installs engineered compressor systems. Compression
operating profit primarily is determined by operating margins from natural gas
compressor operations.
During the second half of fiscal 1995, the Company purchased the natural
gas compression assets of Halliburton Company for approximately $205 million and
on September 30, 1994 purchased the assets of Brazos Gas Compressing Company, a
subsidiary of Mitchell Energy & Development Corporation, for
-19-
<PAGE>
approximately $35 million. The Halliburton Compression fleet consisted of
approximately 1,550 units aggregating approximately 237,000 horsepower. The
Brazos fleet consisted of approximately 325 units aggregating approximately
58,000 horsepower. These acquisitions have made the Compression segment the
leader in the domestic gas compression industry and improves its ability to
service the needs of its customers.
Compression segment revenues for the years ended March 31 consist of the
following:
(IN THOUSANDS)
1995 1994 1993
- --------------------------------------------------------------------------------
Gas compressor rentals ............... $49,235 30,868 26,653
Equipment and parts sales ............ 27,920 18,385 28,662
Repair, service and other ............ 6,335 6,218 6,784
- --------------------------------------------------------------------------------
$83,490 55,471 62,099
================================================================================
Gas compressor utilization is affected primarily by natural gas storage
levels and by the number and age of producing oil and gas wells which, in turn,
are dependent upon the price levels of oil and natural gas. Quality of service,
availability and rental rates for gas compression equipment also are major
factors which affect utilization. The following table compares horsepower-based
utilization, average rental rates and average fleet size for natural gas
compressors for the years ended March 31 and the actual fleet size at March 31
of the respective years:
1995 1994 1993
- -------------------------------------------------------------------------------
Utilization ................................. 82% 86% 78%
Average monthly rental rate ................. $ 17.41 16.74 16.49
Average fleet size in horsepower ............ 343,733 179,725 172,711
Actual fleet size at March 31 in horsepower.. 479,740 185,036 172,750
===============================================================================
For the first six months of fiscal 1995, utilization rose above the level
experienced for the corresponding fiscal 1994 period as demand for natural gas
compression services remained firm primarily due to the then favorable long-term
outlook for U.S. natural gas prices. As U.S. natural gas prices continued to
decline during the third and fourth quarters of fiscal 1995, demand for gas
compression services weakened and, in turn, utilization was adversely affected.
The integration of the Brazos and Halliburton natural gas compressor fleets
during the second half of fiscal 1995, which fleets had historically experienced
lower levels of utilization than the pre-acquisition Tidewater natural gas
compressor fleet, further reduced overall fiscal 1995 utilization. Higher fiscal
1995 average rental rates compared with fiscal 1994 primarily are attributable
to the composition of equipment in the combined fleet. Higher fiscal 1994
utilization and higher average monthly rental rates compared with fiscal 1993
are a direct result of greater demand for natural gas compressor services as a
result of higher U.S. natural gas prices. Fiscal 1994 gas compressor rental
revenues also rose as a result of a larger compression fleet.
Fluctuations in the level of revenues generated from equipment and parts
sales over the past three fiscal years primarily are the result of changes in
the sales volume of engineered products. For fiscal 1995 the increase is also
attributable to higher parts sales in Canada.
-20-
<PAGE>
Operating costs of the Compression segment for the years ended March 31
consist of the following:
<TABLE>
<CAPTION>
(IN THOUSANDS)
1995 1994 1993
- ---------------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C>
Field operating expenses:
Wages and benefits ............................................... $ 8,702 6,209 5,672
Repairs and maintenance .......................................... 8,124 6,043 5,833
Other ............................................................ 5,165 3,109 2,635
- ---------------------------------------------------------------------------------------------------------------------------------
21,991 15,361 14,140
Costs of sales ...................................................... 23,895 14,977 22,143
- ---------------------------------------------------------------------------------------------------------------------------------
$ 45,886 30,338 36,283
=================================================================================================================================
Field operating expenses as a percentage of
rental, repair, service and other revenues ....................... 40% 41% 42%
=================================================================================================================================
Costs of sales as a percentage of related revenues .................. 86% 81% 77%
=================================================================================================================================
</TABLE>
Field operating expenses relate primarily to gas compressor rental, repair
and service operations. Field operating expenses generally are consistent from
period-to-period and usually vary in the short-term due to fluctuations in the
level of repairs and maintenance expense. Long-term growth in field operating
expenses will occur primarily as a result of increased fleet size and general
inflationary factors. Higher fiscal 1995 field operating expenses are a direct
result of the substantial expansion of the natural gas compressor fleet. Costs
of sales consist primarily of wages and benefits and material costs associated
with the design, fabrication and installation of packaged compressor systems.
Fluctuations in costs of sales as a percentage of the related revenues over the
past three years generally are due to competitive forces and the type of
equipment sold.
Gains on sales of equipment over the past three years contributed $1.1
million, $1.3 million and $1.4 million for the fiscal years ended March 31,
1995, 1994 and 1993, respectively.
CURRENCY FLUCTUATIONS AND INFLATION
Because of its significant foreign operations, the Company is exposed to
currency fluctuations and exchange risks. To minimize the financial impact of
these items the Company attempts to contract a majority of its services in
United States dollars.
Day-to-day operating costs generally are affected by inflation. However,
because the energy services industry requires specialized goods and services,
general economic inflationary trends may not affect the Company's operating
costs. The major impact on operating costs is the level of offshore exploration
and development spending by energy exploration and production companies. As this
spending increases, prices of goods and services used by the oil and gas
industry and the energy services industry will increase. Future improvements in
vessel day rates and compressor rental rates may buffer the Company from the
inflationary effects on operating costs.
ENVIRONMENTAL MATTERS
During the ordinary course of business the Company's operations are subject
to a wide variety of environmental laws and regulations. The Company attempts to
comply with these laws and regulations in order to avoid costly accidents and
related environmental damage. The Company currently is involved in litigation
with the Environmental Protection Agency (EPA) concerning the legal disposal of
oilfield wastes from drilling sites it previously operated, as well as from the
disposal of other fluids used in the marine operations.
-21-
<PAGE>
In 1983, the United States Environmental Protection Agency (the "EPA")
notified two subsidiaries of the Company, Zapata Gulf Marine Operators, Inc.
("Zapata Gulf") and Gulf Fleet Supply Vessels, Inc. ("Gulf Fleet") that they
were potentially responsible parties ("PRPs") for cleanup costs at the Western
Sand and Gravel site in Rhode Island. Zapata Gulf and Gulf Fleet are among 53
PRPs.
In August of 1989, the EPA notified a subsidiary of the Company, Hilliard
Oil & Gas, Inc. ("Hilliard"), that it was a PRP for cleanup costs at a National
Priorities List site. EPA later nominated Hilliard a de minimis participant for
this site, i.e. EPA determined that Hilliard's involvement in the site was
minimal, and that the toxicity and amount of substance contributed by Hilliard
was minimal in comparison to the other hazardous substances found at the site.
EPA alleges that residue from trucks transporting Hilliard's saltwater (a
non-hazardous substance) to a third party site, subsequently was washed out of
the trucks' tanks at the subject site, thus making Hilliard a PRP for cleanup of
the subject site. Hilliard believes that this is an insufficient nexus to
establish liability, and has chosen to challenge EPA on this theory.
Based on its evaluation of the potential total clean-up costs, its estimate
of its potential exposure, and the viability of other PRP's, management believes
that any costs ultimately required to be borne by the Company at these sites
will not have a material adverse effect on its results of operations, cash flow
or financial position.
ITEM 8. FINANCIAL STATEMENTS AND SUPPLEMENTARY DATA
The information required by this Item is included in Part IV of this
report.
ITEM 9. CHANGES IN AND DISAGREEMENTS WITH ACCOUNTANTS ON ACCOUNTING AND
FINANCIAL DISCLOSURE
None.
PART III
ITEM 10. DIRECTORS AND EXECUTIVE OFFICERS OF THE REGISTRANT
Information concerning directors of the Company is incorporated by
reference from the Company's definitive proxy statement to be filed on or before
July 29, 1995. For information regarding executive officers of the Company, see
Item 4A of this report.
ITEM 11. EXECUTIVE COMPENSATION
Information concerning executive compensation is incorporated by reference
from the proxy statement described in Item 10 of this report.
ITEM 12. SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND MANAGEMENT
Information concerning security ownership of certain beneficial owners and
management is incorporated by reference from the proxy statement described in
Item 10 of this report.
-22-
<PAGE>
ITEM 13. CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS
Information concerning certain relationships and related transactions is
incorporated by reference from the proxy statement described in Item 10 of this
report.
PART IV
ITEM 14. EXHIBITS, FINANCIAL STATEMENT SCHEDULES, AND REPORTS ON FORM 8-K
A. Financial Statements and Schedules
The Consolidated Financial Statements and Schedule of the Company listed on
the accompanying Index to Financial Statements and Schedule (see page F-1) are
filed as part of this report.
B. Reports on Form 8-K
The Company's report on Form 8-K for January 5, 1995 reported that (i) the
Company announced a corporate restructuring and (ii) Messrs. Victor I. Koock,
Senior Vice President, Secretary and Co-General Counsel, and Gary D. Pope, Vice
President, had elected to terminate their employment from the Company in
connection with the restructuring.
C. Exhibits
The index below describes each exhibit filed as a part of this report.
Exhibits not incorporated by reference to a prior filing are designated by an
asterisk; all exhibits not so designated are incorporated herein by reference to
a prior filing as indicated.
3(a) -Restated Certificate of Incorporation of Tidewater Inc. (filed with the
Commission as Exhibit 3(a) to the Company's quarterly report on Form
10-Q for the quarter ended September 30, 1993).
3(b) -Tidewater Inc. Bylaws (filed with the Commission as Exhibit 3(b) to the
Company's quarterly report on Form 10-Q for the quarter ended September
30, 1993).
4(a) -Restated Rights Agreement dated as of December 17, 1993 between
Tidewater Inc. and The First National Bank of Boston (filed with the
Commission as Exhibit 4 to the Company's quarterly report on Form 10-Q
for the quarter ended December 31, 1993).
10(a) -Letter of Credit Agreement dated as of September 7, 1990 (filed with
the Commission as Exhibit 10(a) to the Company's quarterly report on
Form 10-Q for the quarter ended September 30, 1990).
10(b) -$130,000,000 Revolving Credit and Term Loan Agreement dated February
23, 1993 (filed with the Commission as Exhibit 10 to the Company's
report on Form 8-K for February 23, 1994).
10(c) -Tidewater Inc. 1975 Incentive Program Stock Option Plan, as amended in
1990 (filed with the Commission as Exhibit 10(c) to the Company's annual
report on Form 10-K for the fiscal year ended March 31, 1991).
-23-
<PAGE>
10(d) -Tidewater Inc. 1992 Stock Option and Restricted Stock Plan (filed with
the Commission as Exhibit 10(f) to the Company's annual report on Form
10-K for the fiscal year ended March 31, 1993).
10(e) -Tidewater Inc. Amended and Restated Supplemental Executive Retirement
Plan (filed with the Commission as Exhibit 10(g) to the Company's annual
report on Form 10-K for the fiscal year ended March 31, 1993).
10(f) -Tidewater Inc. Amended and Restated Employees' Supplemental Savings
Plan (filed with the Commission as Exhibit 10(h) to the Company's annual
report on Form 10-K for the fiscal year ended March 31, 1993).
10(g) -Supplemental Health Plan for Executive Officers of Tidewater Inc.
(filed with the Commission as Exhibit 10(i) to a Registration Statement
on September 12, 1989, Registration No. 33- 31016).
10(h) -Tidewater Inc. Deferred Compensation Plan for Directors (filed with the
Commission as Exhibit 10(h) to the Company's annual report on Form 10-K
for the fiscal year ended March 31, 1994).
10(i) -Tidewater Inc. Retirement Plan for Directors as adopted on March 22,
1990 (filed with the Commission as Exhibit 10(k) to the Company's annual
report on Form 10-K for the fiscal year ended March 31, 1990).
10(j) -Employment and Consulting Agreement dated as of March 31, 1993 between
Tidewater Inc. and John P. Laborde as amended (filed with the Commission
as Exhibit 10(l) to the Company's annual report on Form 10-K for the
fiscal year ended March 31, 1993).
10(k) -Form of Severance Agreement entered into as of August 1, 1985 with
eleven executive officers and key employees, as amended (filed with the
Commission as Exhibit 10(j) to the Company's annual report on Form 10-K
for the fiscal year ended March 31, 1992).
10(l) -Form of Severance Agreement entered into as of February 18, 1992 with
three executive officers, as amended (filed with the Commission as
Exhibit 10(k) to the Company's annual report on Form 10-K for the fiscal
year ended March 31, 1992).
10(m) -Standstill Agreement dated as of November 11, 1992 between Tidewater
Inc. and Zapata Corporation (filed with the Commission as Exhibit 10(o)
to the Company's annual report on Form 10-K for the fiscal year ended
March 31, 1993).
10(n) -First Amendment to Standstill Agreement dated January 24, 1994 between
Tidewater Inc. and Zapata Corporation (filed with the Commission as
Exhibit 10(n) to the Company's annual report on Form 10-K for the fiscal
year ended March 31, 1994).
10(o) -Agreement, dated August 11, 1989, by and among the Company and Irwin L.
Jacobs, Daniel T. Lindsay, Gerald A. Schwalbach, TR Holdings, Inc. and
Minstar, Inc. (filed with the Commission as Exhibit 1 to the Company's
report on Form 8-K for August 11, 1989).
10(p) -Form of Stockholder Agreement entered into by and between the Company
and each of the stockholders of Zapata Gulf Marine Corporation (filed
with the Commission as Exhibit 10(r) to the Company's annual report on
Form 10-K for the fiscal year ended March 31, 1992).
*10(q) -Tidewater Inc. 1995 Annual Incentive Plan.
-24-
<PAGE>
10(r) -Employment Agreement dated June 13, 1995 between Tidewater Inc. and
William C. O'Malley (filed with the Commission as Exhibit 10 to the
Company's report on Form 8-K for June 13, 1995).
*11 -Earnings per share Computation Information.
*22 -Subsidiaries of the Company.
*24 -Consent of Independent Accountants.
*27 -Financial Data Schedule.
Certain instruments respecting long-term debt of Tidewater have been
omitted pursuant to Regulation S-K, Item 601. Tidewater hereby agrees to furnish
a copy of any such instrument to the Commission upon request.
-25-
<PAGE>
SIGNATURES OF REGISTRANT
Pursuant to the requirements of Section 13 or 15(d) of the Securities
Exchange Act of 1934, the Registrant has duly caused this report to be signed on
its behalf by the undersigned, thereunto duly authorized on May 2, 1995.
TIDEWATER INC.
(Registrant)
By: /s/ WILLIAM C. O'MALLEY
William C. O'Malley
Chairman of the Board of Directors,
President, and Chief Executive Officer
By: /s/ KEN C. TAMBLYN
Ken C. Tamblyn
Executive Vice President and Chief
Financial Officer
SIGNATURES OF DIRECTORS
Pursuant to the requirements of the Securities Exchange Act of 1934, this
report has been signed below by the following persons on behalf of the
Registrant and in the capacities indicated on May 2, 1995.
/s/ ROBERT H. BOH /s/ PAUL W. MURRILL
Robert H. Boh Paul W. Murrill
/s/ DONALD T. BOLLINGER /s/ WILLIAM C. O'MALLEY
Donald T. Bollinger William C. O'Malley
/s/ ARTHUR R. CARLSON
Arthur R. Carlson Lester Pollack
/s/ HUGH J. KELLY /s/ J. HUGH ROFF, JR.
Hugh J. Kelly J. Hugh Roff, Jr.
/s/ JOHN P. LABORDE
John P. Laborde
-26-
<PAGE>
TIDEWATER INC.
ANNUAL REPORT ON FORM 10-K
ITEMS 8, 14(a), AND 14(d)
INDEX TO FINANCIAL STATEMENTS AND SCHEDULE
<TABLE>
<CAPTION>
FINANCIAL STATEMENTS PAGE
----
<S> <C>
1. Independent Auditors' Report ............................................................................................ F-2
2. Consolidated Balance Sheets, March 31, 1995 and 1994 .................................................................... F-3
3. Consolidated Statements of Earnings, three years ended March 31, 1995 ................................................... F-4
4. Consolidated Statements of Stockholders' Equity, three years ended March 31, 1995 ....................................... F-5
5. Consolidated Statements of Cash Flows, three years ended March 31, 1995 ................................................. F-6
6. Notes to Consolidated Financial Statements .............................................................................. F-7
FINANCIAL STATEMENT SCHEDULE
II.Tidewater Inc. and Subsidiaries Valuation and Qualifying Accounts ....................................................... F-19
</TABLE>
All other schedules are omitted as the required information is inapplicable or
the information is presented in the financial statements or the related notes.
F-1
<PAGE>
INDEPENDENT AUDITORS' REPORT
The Board of Directors and Shareholders of Tidewater Inc.:
We have audited the accompanying consolidated financial statements of Tidewater
Inc. and subsidiaries as listed in the accompanying index. In connection with
our audits of the consolidated financial statements, we also have audited the
financial statement schedule as listed in the accompanying index. These
consolidated financial statements and financial statement schedule are the
responsibility of the Company's management. Our responsibility is to express an
opinion on these consolidated financial statements and financial statement
schedule based on our audits.
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
misstatement. 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, the consolidated financial statements referred to above present
fairly, in all material respects, the financial position of Tidewater Inc. and
subsidiaries as of March 31, 1995 and 1994, and the results of their operations
and their cash flows for each of the years in the three-year period ended March
31, 1995, in conformity with generally accepted accounting principles. Also in
our opinion, the related financial statement schedule, when considered in
relation to the basic consolidated financial statements taken as a whole,
present fairly, in all material respects, the information set forth therein.
As discussed in Note 1 to the consolidated financial statements, the Company
changed its method of accounting for postretirement benefits other than pensions
in fiscal 1993.
KPMG PEAT MARWICK LLP
New Orleans, Louisiana
May 1, 1995
F-2
<PAGE>
<TABLE>
<CAPTION>
CONSOLIDATED BALANCE SHEETS
- ------------------------------------------------------------------------------------------------------------------------------------
MARCH 31, 1995 AND 1994
(IN THOUSANDS)
ASSETS 1995 1994
- ------------------------------------------------------------------------------------------------------------------------------------
<S> <C> <C>
Current assets:
Cash, including temporary cash investments ............................................ $ 14,702 106,788
Trade and other receivables, less allowance for doubtful accounts
of $9,611 in 1995 and $6,744 in 1994 ................................................ 145,805 140,627
Inventories ........................................................................... 36,311 34,561
Other current assets .................................................................. 4,355 4,440
- ------------------------------------------------------------------------------------------------------------------------------------
Total current assets .............................................................. 201,173 286,416
- ------------------------------------------------------------------------------------------------------------------------------------
Investments in, at equity, and advances to unconsolidated companies ...................... 21,527 21,843
Properties and equipment:
Marine equipment ...................................................................... 1,092,955 1,122,617
Compression equipment ................................................................. 326,300 122,314
Other ................................................................................. 44,941 41,314
- ------------------------------------------------------------------------------------------------------------------------------------
1,464,196 1,286,245
Less accumulated depreciation ......................................................... 858,297 838,067
- ------------------------------------------------------------------------------------------------------------------------------------
Net properties and equipment ........................................................ 605,899 448,178
Other assets ............................................................................. 73,586 53,449
- ------------------------------------------------------------------------------------------------------------------------------------
$ 902,185 809,886
====================================================================================================================================
LIABILITIES AND STOCKHOLDERS' EQUITY
- ------------------------------------------------------------------------------------------------------------------------------------
Current liabilities:
Convertible subordinated debentures redeemed on April 18, 1994 ........................ -- 47,526
Current maturities of long-term debt .................................................. 12,000 --
Accounts payable and accrued expenses ................................................. 68,376 64,777
Accrued property and liability losses ................................................. 11,533 7,757
Income taxes .......................................................................... 9,571 10,230
- ------------------------------------------------------------------------------------------------------------------------------------
Total current liabilities ......................................................... 101,480 130,290
- ------------------------------------------------------------------------------------------------------------------------------------
Deferred income taxes .................................................................... 49,510 45,099
Long-term debt ........................................................................... 100,000 --
Accrued property and liability losses .................................................... 28,921 36,163
Other liabilities and deferred credits ................................................... 42,056 41,373
Stockholders' equity:
Common stock, par value $.10, issued 53,237,839 shares
in 1995 and 53,022,955 shares in 1994 ............................................. 5,324 5,302
Additional paid-in capital ............................................................ 334,809 331,690
Retained earnings ..................................................................... 252,374 231,001
- ------------------------------------------------------------------------------------------------------------------------------------
592,507 567,993
Less:
Cumulative foreign currency translation adjustment .................................... 10,745 11,032
Deferred compensation - restricted stock .............................................. 1,544 --
- ------------------------------------------------------------------------------------------------------------------------------------
Total stockholders' equity ........................................................ 580,218 556,961
Commitments and other matters
- ------------------------------------------------------------------------------------------------------------------------------------
$ 902,185 809,886
====================================================================================================================================
</TABLE>
See accompanying Notes to Consolidated Financial Statements.
F-3
<PAGE>
<TABLE>
<CAPTION>
CONSOLIDATED STATEMENTS OF EARNINGS
- -----------------------------------------------------------------------------------------------------------------------------------
YEARS ENDED MARCH 31, 1995, 1994 AND 1993
(IN THOUSANDS, EXCEPT SHARE AND PER SHARE DATA)
1995 1994 1993
- -----------------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C>
Revenues:
Marine operations ................................................ $ 455,284 466,601 413,439
Compression operations ........................................... 83,490 55,471 62,099
- -----------------------------------------------------------------------------------------------------------------------------------
538,774 522,072 475,538
- -----------------------------------------------------------------------------------------------------------------------------------
Costs and expenses:
Marine operations ................................................ 285,550 288,936 252,427
Compression operations ........................................... 45,886 30,338 36,283
Depreciation ..................................................... 86,598 83,652 80,317
General and administrative ....................................... 60,343 63,096 58,479
- -----------------------------------------------------------------------------------------------------------------------------------
478,377 466,022 427,506
- -----------------------------------------------------------------------------------------------------------------------------------
60,397 56,050 48,032
Other income (expenses):
Foreign exchange loss ............................................ (506) (557) (1,788)
Gain on sales of assets .......................................... 13,471 4,579 3,408
Equity in net earnings of unconsolidated companies ............... 3,147 2,686 2,525
Minority interests ............................................... (1,488) (2,022) (2,544)
Interest and miscellaneous income ................................ 5,481 6,109 6,636
Other expense .................................................... (8,350) (1,253) (3,771)
Interest expense ................................................. (4,744) (7,939) (12,323)
- -----------------------------------------------------------------------------------------------------------------------------------
7,011 1,603 (7,857)
- -----------------------------------------------------------------------------------------------------------------------------------
Earnings from continuing operations before income taxes ............. 67,408 57,653 40,175
Income taxes ........................................................ 24,780 21,523 12,366
- -----------------------------------------------------------------------------------------------------------------------------------
Earnings from continuing operations ................................. 42,628 36,130 27,809
Discontinued operations ............................................. -- -- 3,099
- -----------------------------------------------------------------------------------------------------------------------------------
Earnings before extraordinary item and cumulative
effect of accounting change ...................................... 42,628 36,130 30,908
Extraordinary loss on early debt retirement ......................... -- (11,970) --
Cumulative effect of accounting change .............................. -- -- (6,640)
- -----------------------------------------------------------------------------------------------------------------------------------
Net earnings ........................................................ $ 42,628 24,160 24,268
===================================================================================================================================
Primary and fully-diluted earnings per common share:
Continuing operations ............................................ $ .80 .67 .53
Discontinued operations .......................................... -- -- .06
- -----------------------------------------------------------------------------------------------------------------------------------
Earnings before extraordinary item and cumulative
effect of accounting change .................................... .80 .67 .59
Extraordinary loss on early debt retirement ...................... -- (.22) --
Cumulative effect of accounting change ........................... -- -- (.13)
- -----------------------------------------------------------------------------------------------------------------------------------
Net earnings ..................................................... $ .80 .45 .46
===================================================================================================================================
Weighted average common shares and equivalents ...................... 53,406,014 53,317,501 53,073,573
===================================================================================================================================
Cash dividends declared per common share ............................ $ .40 .30 .325
===================================================================================================================================
</TABLE>
See accompanying Notes to Consolidated Financial Statements.
F-4
<PAGE>
<TABLE>
<CAPTION>
CONSOLIDATED STATEMENTS OF STOCKHOLDERS' EQUITY
- -----------------------------------------------------------------------------------------------------------------------------------
YEARS ENDED MARCH 31, 1995, 1994
AND 1993 (IN THOUSANDS)
CUMULATIVE
FOREIGN DEFERRED
ADDITIONAL CURRENCY COMPENSATION-
COMMON PAID-IN RETAINED TRANSLATION RESTRICTED TREASURY
STOCK CAPITAL EARNINGS ADJUSTMENT STOCK STOCK TOTAL
- -----------------------------------------------------------------------------------------------------------------------------------
1995
- -----------------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C> <C>
Amount at March 31, 1994 ................ $ 5,302 331,690 231,001 (11,032) -- -- 556,961
Net earnings ............................ -- -- 42,628 -- -- -- 42,628
Exercise of stock options ............... 11 732 -- -- -- -- 743
Issuance of restricted stock ............ 7 1,629 -- -- (1,636) -- --
Cash dividends declared ................. -- -- (21,255) -- -- -- (21,255)
Other ................................... 4 758 -- 287 92 -- 1,141
- -----------------------------------------------------------------------------------------------------------------------------------
Amount at March 31, 1995 ................ $ 5,324 334,809 252,374 (10,745) (1,544) -- 580,218
===================================================================================================================================
1994
- -----------------------------------------------------------------------------------------------------------------------------------
Amount at March 31, 1993 ................ $ 5,350 341,550 222,730 (11,112) -- (10,844) 547,674
Net earnings ............................ -- -- 24,160 -- -- -- 24,160
Treasury stock changes .................. (63) (10,781) -- -- -- 10,844 --
Exercise of stock options ............... 15 1,195 -- -- -- -- 1,210
Cash dividends declared ................. -- -- (15,889) -- -- -- (15,889)
Other ................................... -- (274) -- 80 -- -- (194)
- -----------------------------------------------------------------------------------------------------------------------------------
Amount at March 31, 1994 ................ $ 5,302 331,690 231,001 (11,032) -- -- 556,961
===================================================================================================================================
1993
- -----------------------------------------------------------------------------------------------------------------------------------
Amount at March 31, 1992 ................ 5,293 332,597 215,604 (10,478) -- (6,692) 536,324
Net earnings ............................ -- -- 24,268 -- -- -- 24,268
Treasury stock additions ................ -- -- -- -- -- (5,087) (5,087)
Exercise of stock options and
issuance of restricted stock .......... 57 7,440 -- -- -- -- 7,497
Cash dividends declared ................. -- -- (17,142) -- -- -- (17,142)
Other ................................... -- 1,513 -- (634) -- 935 1,814
- -----------------------------------------------------------------------------------------------------------------------------------
Amount at March 31, 1993 ................ $ 5,350 341,550 222,730 (11,112) -- (10,844) 547,674
===================================================================================================================================
</TABLE>
See accompanying Notes to Consolidated Financial Statements.
F-5
<PAGE>
<TABLE>
<CAPTION>
CONSOLIDATED STATEMENTS OF CASH FLOWS
- -----------------------------------------------------------------------------------------------------------------------------------
YEARS ENDED MARCH 31, 1995, 1994 AND 1993
(IN THOUSANDS)
1995 1994 1993
- -----------------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C>
Cash flows from operating activities:
Net earnings ............................................................ $ 42,628 24,160 24,268
Adjustments to reconcile net earnings to net cash provided
by operating activities:
Extraordinary loss on early debt retirement ............................ -- 11,970 --
Earnings and gain on sale of discontinued operations ................... -- -- (3,099)
Cumulative effect of accounting change ................................. -- -- 6,640
Depreciation ........................................................... 86,598 83,652 80,317
Provision for deferred income taxes .................................... 4,411 4,801 4,960
Gain on sales of assets ................................................ (13,471) (4,579) 3,408
Equity in net earnings of unconsolidated companies ..................... (3,147) (2,686) (2,525)
Minority interests ..................................................... 1,488 2,022 2,544
Compensation expense - restricted stock ................................ 92 -- 3,800
Decrease (increase) in trade and other receivables ..................... 2,152 8,383 (12,634)
Decrease (increase) in inventories ..................................... 4,977 (238) 1,824
Decrease (increase) in other current assets ............................ (3,768) 1,058 244
Increase (decrease) in accounts payable and
accrued expenses ..................................................... 9,487 (832) (11,190)
Increase (decrease) in accrued property and
liability losses ..................................................... 3,776 (880) 3,360
Increase (decrease) in income taxes .................................... (659) 2,845 (4,054)
Other, net ............................................................. 4,685 5,994 4,631
- -----------------------------------------------------------------------------------------------------------------------------------
Net cash provided by operating activities ............................ 139,249 135,670 95,948
- -----------------------------------------------------------------------------------------------------------------------------------
Cash flows from investing activities:
Proceeds from sales of assets ........................................... 23,019 11,483 8,105
Additions to properties and equipment ................................... (299,667) (53,319) (52,366)
Investments in unconsolidated companies,
net of dividends received ............................................. 3,550 (877) 2,768
Investment from minority interests, net of dividends paid ............... (513) (3,094) (1,602)
- -----------------------------------------------------------------------------------------------------------------------------------
Net cash used in investing activities ................................ (273,611) (45,807) (43,095)
- -----------------------------------------------------------------------------------------------------------------------------------
Cash flows from financing activities:
Principal payments on long-term debt .................................... (87,114) (65,328) (46,614)
Prepayment penalties on early debt retirement ........................... -- (6,473) --
Proceeds from the issuance of long-term debt ............................ 150,000 -- --
Cash dividends .......................................................... (21,255) (21,178) (11,853)
Other ................................................................... 645 935 1,203
- -----------------------------------------------------------------------------------------------------------------------------------
Net cash provided by (used in) financing activities .................. 42,276 (92,044) (57,264)
- -----------------------------------------------------------------------------------------------------------------------------------
Net increase (decrease) in cash,
including temporary cash investments .................................... (92,086) (2,181) (4,411)
- -----------------------------------------------------------------------------------------------------------------------------------
Cash, including temporary cash investments at beginning of year ........... 106,788 108,969 113,380
- -----------------------------------------------------------------------------------------------------------------------------------
Cash, including temporary cash investments at end of year ................. $ 14,702 106,788 108,969
===================================================================================================================================
Supplemental disclosure of cash flow information:
Cash paid during the year for:
Interest .............................................................. $ 4,540 8,330 11,635
Income taxes .......................................................... $ 21,566 15,779 10,733
===================================================================================================================================
</TABLE>
See accompanying Notes to Consolidated Financial Statements.
F-6
<PAGE>
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
- --------------------------------------------------------------------------------
March 31, 1995, 1994 and 1993
(1) SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES
BASIS OF CONSOLIDATION
The Consolidated Financial Statements include the accounts of Tidewater Inc. and
its subsidiaries. Significant intercompany balances and transactions are
eliminated in consolidation.
INVENTORIES
Inventories are stated at average cost for operating supplies and at the lower
of cost (FIFO) or market (net realizable value) for merchandise held for resale.
PROPERTIES AND EQUIPMENT
Properties and equipment are carried at cost. Depreciation for financial
reporting purposes is computed primarily on the straight-line basis beginning
with the first charter/rental, with salvage values of 5%-10% for marine
equipment and 30% for compression equipment, using estimated useful lives of:
YEARS
- --------------------------------------------------------------------------------
Marine equipment (from date of construction) .................... 10 - 20
Compression equipment ........................................... 8 - 12
Other properties and equipment .................................. 3 - 30
Used equipment is depreciated in accordance with the above schedule; however, no
life less than six years is used for marine equipment regardless of the date
constructed.
Maintenance and repairs are charged to operations as incurred during the asset's
original estimated useful life. Major repair costs incurred after the original
estimated useful life that also have the effect of extending the useful life of
the asset are capitalized and amortized over three years. Major modifications to
equipment are capitalized and amortized over the remaining life of the
equipment.
Effective with the third quarter of fiscal 1995 the Company increased from
12-1/2% to 30% the estimated salvage value used to calculate depreciation
expense for its fleet of natural gas compressors. The increase in salvage value
was made in order to better reflect the estimated value of this equipment at the
end of its service life and resulted from an internal review following the
acquisition of a substantial number of natural gas compressors during the third
quarter of fiscal 1995. This change in accounting estimate reduced depreciation
expense by approximately $3 million and increased net earnings by $1.9 million
or $.04 per common share, for fiscal 1995. For fiscal 1996, the annual reduction
in depreciation expense is estimated to be approximately $7.3 million.
ACCRUED PROPERTY AND LIABILITY LOSSES
The Company's insurance subsidiary establishes case basis reserves for estimates
of reported losses on direct business written, estimates received from ceding
reinsurers, and reserves based on past experience of unreported losses. Such
losses principally relate to the Company's marine operations and are included as
a component of costs of marine operations in the Consolidated Statements of
Earnings. The liability for such losses and the related reimbursement receivable
from reinsurance companies are classified in the Consolidated Balance Sheet into
current and noncurrent amounts based upon estimates of when the liabilities will
be settled and when the receivables will be collected.
PENSION AND OTHER POSTRETIREMENT BENEFITS
Pension costs are accounted for in accordance with the provisions of Statement
of Financial Accounting Standards No. 87 and are funded as required by law.
Prior service costs are amortized on the straight-line basis over the average
remaining service period of employees expected to receive pension benefits.
Effective April 1, 1992, postretirement benefits other than pensions are
accounted for in accordance with
F-7
<PAGE>
Statement of Financial Accounting Standards No. 106. The estimated cost of
postretirement benefits other than pensions are accrued during the employees'
active service period. Postemployment and postretirement benefits other than
pensions are funded as claims are submitted.
INCOME TAXES
Income taxes are accounted for in accordance with the provisions of Statement of
Financial Accounting Standards No. 109, "Accounting for Income Taxes." Deferred
tax assets and liabilities are recognized for the future tax consequences
attributable to differences between the financial statement carrying amounts of
existing assets and liabilities and their respective tax bases. Deferred tax
assets and liabilities are measured using enacted tax rates expected to apply to
taxable income in the years in which those temporary differences are expected to
be recovered or settled. The effect on deferred tax assets and liabilities of a
change in tax rates is recognized in income in the period that includes the
enactment date.
EARNINGS PER SHARE
Primary earnings per share are computed based on the weighted average number of
shares and dilutive equivalent shares of common stock (stock options, restricted
stock grants and shares issuable on conversion of the convertible subordinated
debentures) outstanding during each year using the treasury stock method.
FOREIGN CURRENCY TRANSLATION
The functional currency for certain foreign subsidiaries and unconsolidated
companies is the applicable local currency. The translation of the applicable
local currencies into U.S. dollars is performed for balance sheet accounts using
current exchange rates in effect at the balance sheet date and for revenue and
expense accounts using weighted average exchange rates during the period. The
gains and losses resulting from the balance sheet account translations, net of
deferred income taxes, are included in stockholders' equity.
Some transactions of the Company and its subsidiaries are made in currencies
different from their own. Gains and losses from these transactions are included
in the Consolidated Statements of Earnings as they occur and relate primarily to
the revenue generating and purchasing activities in Brazil, Venezuela, United
Kingdom, Singapore, Trinidad and Nigeria.
CASH FLOWS
For purposes of the Consolidated Statements of Cash Flows, all highly liquid
investments purchased with original maturities of approximately three months or
less are considered to be cash equivalents. Some items of compression equipment
are acquired and placed in inventories for subsequent sale or rent to others.
Acquisitions of these assets are considered operating activities in the
Consolidated Statements of Cash Flows, although they later may be transferred to
the compression equipment rental fleet.
RECLASSIFICATIONS
Certain reclassifications have been made in the 1994 amounts to conform with the
1995 presentations.
(2) ACQUISITION OF COMPRESSION ASSETS
On September 30, 1994, the Company purchased for $35 million in cash the assets
of Brazos Gas Compressing Company, a subsidiary of Mitchell Energy & Development
Corporation. On November 30, 1994, the Company purchased the natural gas
compression assets of Halliburton Company using $55 million of available cash
and borrowings of $150 million. The costs of these acquisitions were allocated
under the purchase method of accounting based on the fair value of the assets
acquired. In connection with the purchase of the natural gas compression assets
of Halliburton Company, goodwill of approximately $25 million was recorded as
other assets in the Consolidated Balance Sheet and is being amortized in equal
charges to earnings over a 15-year period.
F-8
<PAGE>
The results of Brazos' and Halliburton's operations have been consolidated with
the Company's effective October 1, 1994, and December 1, 1994, respectively. Pro
forma combined results of operations of the Company and of Brazos and
Halliburton, including appropriate purchase accounting adjustments for the years
ended March 31, 1995 and 1994, as though the acquisition had taken place on
April 1 of the respective years, are as follows:
<TABLE>
<CAPTION>
(IN THOUSANDS, EXCEPT PER SHARE DATA)
1995 1994
- ------------------------------------------------------------------------------------------------------------------------------------
<S> <C> <C>
Revenues .............................................................................. $579,943 579,121
====================================================================================================================================
Earnings before extraordinary item .................................................... $ 35,947 30,951
====================================================================================================================================
Net earnings .......................................................................... $ 35,947 18,981
====================================================================================================================================
Primary and fully diluted earnings per common share ................................... $ .67 .36
====================================================================================================================================
</TABLE>
The $150 million of debt incurred to finance the Halliburton acquisition was
borrowed pursuant to the $250 million revolving credit and term loan agreement
discussed in Note 7.
(3) SALE OF CONTAINER SHIPPING SEGMENT
In March 1993, the Company sold its 70% interest in the net assets of the
Container Shipping segment to the minority-interest owner. The Consolidated
Statement of Earnings for the year ended March 31, 1993 reports separately the
results of continuing operations and the discontinued Container Shipping
segment. The results of the discontinued Container Shipping segment for the year
ended March 31, 1993, which are presented as a net amount in the Consolidated
Statements of Earnings, consist of revenues of $66.6 million, operating expenses
of $60.2 million, general and administrative expenses of $6.5 million and a gain
on sale of the segment of $3.2 million (net of $.9 million of income tax
benefits).
(4) INVENTORIES
A summary of inventories at March 31 follows:
(IN THOUSANDS)
1995 1994
- --------------------------------------------------------------------------------
Marine operating supplies ................................ $25,764 27,476
Compression supplies and merchandise held for sale ....... 10,547 7,085
- --------------------------------------------------------------------------------
$36,311 34,561
================================================================================
(5) UNCONSOLIDATED COMPANIES
Investments in, at equity, and advances to unconsolidated marine joint-venture
companies at March 31 were as follows:
PERCENTAGE (IN THOUSANDS)
OWNERSHIP 1995 1994
- --------------------------------------------------------------------------------
National Marine Service (Abu Dhabi-UAE) .... 40% $ 10,886 11,506
Tidewater Port Jackson (Australia) ......... 50% 6,972 6,805
Provident Marine, Ltd. (Mexico) ............ 50% 2,322 2,135
Others ..................................... 20%-50% 1,347 1,397
- --------------------------------------------------------------------------------
$ 21,527 21,843
================================================================================
The aggregate amount of undistributed earnings of all unconsolidated
joint-venture companies included in consolidated stockholders' equity at March
31, 1995 is approximately $12,246,000.
F-9
<PAGE>
(6) INCOME TAXES
Earnings (loss) from continuing operations before income taxes derived from
United States and foreign operations for the years ended March 31 are as
follows:
(IN THOUSANDS)
1995 1994 1993
- -------------------------------------------------------------------------------
United States ................. $ 42,681 26,083 (13,238)
Foreign ....................... 24,727 31,570 53,413
- -------------------------------------------------------------------------------
$ 67,408 57,653 40,175
===============================================================================
Total income tax expense for the years ended March 31 was allocated as follows:
<TABLE>
<CAPTION>
(IN THOUSANDS)
1995 1994 1993
- -----------------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C>
Income from continuing operations ................................................... $24,780 21,523 12,366
Gain on sale of Container Shipping segment .......................................... -- -- (869)
Extraordinary loss on early debt retirement ......................................... -- (6,470) --
Cumulative effect of accounting change .............................................. -- -- (3,421)
Stockholders' equity (for compensation expense for income tax purposes
in excess of amounts recognized for financial reporting purposes) ................. -- -- (1,356)
- -----------------------------------------------------------------------------------------------------------------------------------
$24,780 15,053 6,720
===================================================================================================================================
</TABLE>
Income tax expense attributable to income from continuing operations for the
years ended March 31 consists of the following:
(IN THOUSANDS)
U.S.
---------------------
FEDERAL STATE FOREIGN TOTAL
- --------------------------------------------------------------------------------
1995
- --------------------------------------------------------------------------------
Current ................ $12,678 772 6,919 20,369
Deferred ............... 4,411 -- -- 4,411
- --------------------------------------------------------------------------------
$17,089 772 6,919 24,780
================================================================================
1994
- --------------------------------------------------------------------------------
Current ................ 8,290 1,248 7,184 16,722
Deferred ............... 4,801 -- -- 4,801
- --------------------------------------------------------------------------------
$13,091 1,248 7,184 21,523
================================================================================
1993
- --------------------------------------------------------------------------------
Current ................ 1,081 680 5,645 7,406
Deferred ............... 4,960 -- -- 4,960
- --------------------------------------------------------------------------------
$ 6,041 680 5,645 12,366
================================================================================
F-10
<PAGE>
The actual income tax expense attributable to earnings from continuing
operations for the years ended March 31, 1995, 1994 and 1993 differed from the
amounts computed by applying the U.S. federal tax rate of 35% in fiscal 1995 and
1994 and 34% in fiscal 1993 to pre-tax earnings from continuing operations as a
result of the following:
<TABLE>
<CAPTION>
(IN THOUSANDS)
1995 1994 1993
- -----------------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C>
Computed "expected" tax expense ........................................... $ 23,593 20,179 13,659
Increase (reduction) resulting from:
Effect of 1993 tax law change .......................................... -- 1,921 --
Foreign earnings not includable in U.S. tax return ..................... (817) (24) (463)
Foreign taxes not creditable against U.S. taxes ........................ 1,039 -- --
Utilization of net operating loss carryforwards ........................ -- (183) (782)
Expenses which are not deductible for tax purposes ..................... 177 248 60
Other, net ............................................................. 788 (618) (108)
- -----------------------------------------------------------------------------------------------------------------------------------
$ 24,780 21,523 12,366
===================================================================================================================================
</TABLE>
The significant components of deferred income tax expense for the years ended
March 31 are as follows:
<TABLE>
<CAPTION>
(IN THOUSANDS)
1995 1994 1993
- -----------------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C>
Deferred income tax expense (benefit) (exclusive of the effects of
other components listed below) ............................................... $(1,894) 528 (9,265)
Application of net operating loss carryforwards ................................. -- 1,478 18,330
Investment and foreign tax credits .............................................. 6,305 874 (4,105)
Effect of 1993 tax law change ................................................... -- 1,921 --
- -----------------------------------------------------------------------------------------------------------------------------------
Subtotal .................................................................. 4,411 4,801 4,960
- -----------------------------------------------------------------------------------------------------------------------------------
Extraordinary loss on early debt retirement ..................................... -- (3,747) --
Accounting change ............................................................... -- -- (3,421)
- -----------------------------------------------------------------------------------------------------------------------------------
$ 4,411 1,054 1,539
===================================================================================================================================
</TABLE>
The tax effects of temporary differences that give rise to significant portions
of the deferred tax assets and deferred tax liabilities at March 31, 1995 and
1994 are as follows:
<TABLE>
<CAPTION>
(IN THOUSANDS)
1995 1994
- -----------------------------------------------------------------------------------------------------------------------------------
<S> <C> <C>
Deferred tax assets:
Financial provisions not deducted for tax purposes .................................. $ 13,375 12,410
Unrepatriated foreign earnings ...................................................... 5,220 --
Foreign net operating loss carryforwards ............................................ 7,187 4,171
Foreign tax credit carryforwards .................................................... 2,996 3,231
Investment tax credit carryforwards ................................................. 5,842 11,911
Alternative minimum tax credit carryforwards ........................................ 3,007 2,206
Other ............................................................................... 1,616 1,745
- -----------------------------------------------------------------------------------------------------------------------------------
Gross deferred tax assets ........................................................ 39,243 35,674
Less valuation allowance ......................................................... 7,187 4,171
- -----------------------------------------------------------------------------------------------------------------------------------
32,056 31,503
- -----------------------------------------------------------------------------------------------------------------------------------
Deferred tax liabilities:
Depreciation differences on properties and equipment ................................ (81,005) (73,431)
Undistributed income of unconsolidated joint-venture companies ...................... (561) (3,171)
- -----------------------------------------------------------------------------------------------------------------------------------
Gross Deferred Tax Liabilities ................................................... (81,566) (76,602)
- -----------------------------------------------------------------------------------------------------------------------------------
Net deferred tax liability ....................................................... $ (49,510) (45,099)
===================================================================================================================================
</TABLE>
The net changes in the valuation allowance for the years ended March 31, 1995
and 1994 were increases of $3,016,000 and $184,000, respectively. These changes
were made to provide for uncertainties surrounding the realization of certain
foreign net operating loss carryforwards. The remaining balance of the deferred
tax assets should be realized through future operating results and the reversal
of taxable temporary differences.
F-11
<PAGE>
At March 31, 1995, the Company had investment tax credit carryforwards for
federal income tax purposes of approximately $5,842,000, which are available to
reduce future federal income tax through 2002. In addition, the Company has
alternative minimum tax credit carryforwards of approximately $3,007,000, which
are available to reduce future federal regular income taxes over an indefinite
period.
The Company has not recognized a deferred tax liability of approximately
$30,100,000 for the undistributed earnings of certain foreign subsidiaries that
arose in prior years because the Company currently does not expect those
unremitted earnings to reverse and become taxable to the Company in the
foreseeable future. A deferred tax liability will be recognized when the Company
expects that it will realize those undistributed earnings in a taxable manner,
such as through receipt of dividends or sale of investments. As of March 31,
1995 the undistributed earnings of these subsidiaries were approximately
$86,000,000.
(7) LONG-TERM DEBT
A summary of long-term debt at March 31 follows:
<TABLE>
<CAPTION>
(IN THOUSANDS)
1995 1994
- ------------------------------------------------------------------------------------------------------------------------------------
<S> <C> <C>
Variable rate revolving credit and term loan agreement with banks ........................ $ 112,000 --
7% convertible subordinated debentures due 2010 .......................................... -- 47,526
- ------------------------------------------------------------------------------------------------------------------------------------
Total long-term debt ..................................................................... 112,000 47,526
Less current maturities of long-term debt .............................................. 12,000 47,526
- ------------------------------------------------------------------------------------------------------------------------------------
Net long-term debt ....................................................................... $ 100,000 --
====================================================================================================================================
</TABLE>
The Company's revolving credit and term loan agreement (the "agreement")
consists of a $130 million revolving credit facility and a $120 million term
loan facility. At March 31, 1995 there were $12 million of borrowings
outstanding under the revolving credit facility and $100 million of borrowings
outstanding under the term loan facility.
The agreement bears interest, at the Company's option, at prime rates plus .375%
or LIBO rates plus 1.25% or 1.50% (7.74% at March 31, 1995). The lower LIBO rate
is available as long as the Company maintains an investment grade senior debt
rating from Moody's Investor Services, Inc. and Standard & Poor's. Effective
April 10, 1995, the interest rate was reduced to prime or LIBO plus .875%.
The revolving credit commitment of $130 million expires on September 30, 1996,
at which time the then outstanding balance may be converted to a term loan
repayable in 16 quarterly installments beginning December 31, 1996. Borrowings
under the term loan facility are payable in 27 quarterly installments of $3
million commencing March 31, 1995, with the remaining loan balance due December
31, 2001. All of the borrowings under the agreement are unsecured and the
Company pays an annual fee of from .250% to .375% on the unused portion of the
revolving credit facility.
Under the terms of the agreement, the Company has agreed to certain requirements
and limitations, including: limitations on the payment of dividends on common
stock, investments and aggregate indebtedness; a minimum level of tangible net
worth of $425 million plus 30% of cumulative net earnings, as defined, after
March 31, 1993 (total $445,300,000 at March 31, 1995); and a minimum ratio of
current assets to current liabilities of 1.5 to 1. The agreement also prohibits
the Company from encumbering its assets, other than assets already encumbered at
November 30, 1994, for the benefit of others.
During the second quarter of fiscal 1994 approximately $51 million of notes were
retired prior to maturity using available cash. The retirement resulted in an
after-tax extraordinary charge to earnings of approximately $4,450,000, or $.08
per common share. The extraordinary charge to earnings consisted of a $6,500,000
prepayment penalty and the write-off of deferred finance costs of $370,000, less
$2,420,000 of income tax benefits associated with the retired debt.
F-12
<PAGE>
On March 16, 1994, the Company called for redemption of its 7% convertible
subordinated debentures due 2010. Holders converted $1,113,000 of debentures
into 44,520 shares of the Company's common stock at a conversion price of $25.00
per share. The remainder of the debentures were redeemed at 101.4% of par value
plus accrued interest on April 18, 1994. The debentures, along with the
prepayment premium, are included in current liabilities at March 31, 1994. The
redemption resulted in an after-tax extraordinary charge to earnings of
approximately $7,520,000, or $.14 per common share in the fourth quarter of
fiscal 1994. The extraordinary charge to earnings consisted of a $644,000
prepayment premium and the write-off of unamortized original issue discount and
deferred finance costs of $10,926,000, less $4,050,000 of income tax benefits.
Based on current interest rates offered to the Company for borrowings with
maturities similar to the remainder of its long-term debt, total long-term debt
at March 31, 1995 approximates the fair value of the debt.
(8) BENEFIT PLANS
Upon meeting various citizenship, age and service requirements, employees are
eligible to participate in a defined contribution savings plan. The plan held
536,804 shares and 537,525 shares of the Company's common stock at March 31,
1995 and 1994, respectively. Amounts charged to expense for the plan for 1995,
1994 and 1993 were $951,000, $1,282,000, and $1,193,000, respectively.
A defined benefit pension plan covers substantially all U.S. citizen employees
and employees who are permanent residents of the United States. Benefits are
based on years of service and employee compensation. The Company also has a
supplemental retirement plan (Supplemental Plan) that provides pension benefits
to certain employees in excess of those allowed under the Company's tax
qualified pension plan. Certain benefits programs are maintained in several
other countries which provide retirement income for covered employees.
Net periodic pension cost for the U.S. defined benefit pension plan and the
Supplemental Plan for 1995, 1994 and 1993 include the following components:
<TABLE>
<CAPTION>
(IN THOUSANDS)
1995 1994 1993
- ---------------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C>
Service cost-benefit earned during the period ....................... $ 1,962 2,118 1,723
Interest cost on projected benefit obligation ....................... 1,954 1,715 1,617
Actual return on assets ............................................. 503 (1,398) (726)
Net amortization and deferral ....................................... (1,463) 590 219
- ---------------------------------------------------------------------------------------------------------------------------------
Net periodic pension cost ........................................... $ 2,956 3,025 2,833
=================================================================================================================================
Assumptions used in the accounting are:
Discount rates ................................................... 8.5% 7.25% 8.5%
Rates of annual increase in compensation levels .................. 5% 5% 5%
Expected long-term rate of return on assets ...................... 9.5% 9.5% 9.5%
=================================================================================================================================
</TABLE>
F-13
<PAGE>
The following table sets forth the assets and liabilities of the U.S. defined
benefit pension plan and the Supplemental Plan and the amount of the net pension
asset or liability in the Consolidated Balance Sheets at March 31:
<TABLE>
<CAPTION>
(IN THOUSANDS)
PLAN WITH PLAN WITH
ACCUMULATED BENEFIT ACCUMULATED BENEFIT
OBLIGATIONS LESS OBLIGATIONS IN
THAN ASSETS EXCESS OF ASSETS
----------------------- --------------------
1995 1994 1995 1994
- -----------------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C>
Actuarial present value of vested benefit obligation ................... $ 14,971 14,429 1,724 1,657
===================================================================================================================================
Accumulated benefit obligation ......................................... $ 16,615 16,221 1,815 1,779
===================================================================================================================================
Projected benefit obligation ........................................... $ 23,635 23,344 2,817 2,879
Plan assets at fair value, primarily bonds and common stock ........... 18,691 17,946 -- --
- -----------------------------------------------------------------------------------------------------------------------------------
Projected benefit obligation in excess of plan assets .................. 4,944 5,398 2,817 2,879
Unrecognized net transitional obligation amortized over 15 years ....... (615) (728) -- --
Unrecognized actuarial gain (loss) ..................................... (2,089) (3,422) (1,228) (1,626)
Unrecognized prior service cost ........................................ (2,165) (1,665) (1,104) (871)
Adjustment required to recognize minimum liability ..................... -- -- 1,330 1,397
- -----------------------------------------------------------------------------------------------------------------------------------
Net accrued pension (asset) liability .................................. $ 75 (417) 1,815 1,779
===================================================================================================================================
</TABLE>
Qualified retired employees currently are covered by a program which provides
limited health care and life insurance benefits. Costs of the program are based
on actuarially determined amounts and are accrued over the period from the date
of hire to the full eligibility date of employees who are expected to qualify
for these benefits.
Pursuant to the April 1, 1992 adoption of Statement of Financial Accounting
Standards No. 106, "Employers Accounting for Postretirement Benefits Other Than
Pensions," the Company recognized during fiscal 1993 the full amount of its
accumulated postretirement benefit obligation of $10,061,000 less income tax
benefits of $3,421,000, which amounts are included in the fiscal 1993
Consolidated Statement of Earnings as the cumulative effect of an accounting
change. The accumulated postretirement benefit obligation amount represents the
present value at April 1, 1992 of the estimated future benefits payable to
current retirees and a pro rata portion of the estimated benefits payable to
active employees after retirement.
Net periodic postretirement health care and life insurance costs for 1995, 1994
and 1993 include the following components:
<TABLE>
<CAPTION>
(IN THOUSANDS)
1995 1994 1993
- ------------------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C>
Service cost - benefit earned during the period .................................. $ 924 801 691
Interest cost on accumulated postretirement benefit obligation ................... 732 964 847
Other amortization and deferral .................................................. (129) (28) --
- ------------------------------------------------------------------------------------------------------------------------------------
Net periodic postretirement benefit cost ......................................... $ 1,527 1,737 1,538
====================================================================================================================================
</TABLE>
F-14
<PAGE>
The unfunded actuarially-determined liabilities for postretirement benefits at
March 31 are as follows:
<TABLE>
<CAPTION>
(IN THOUSANDS)
1995 1994
- ------------------------------------------------------------------------------------------------------------------------------------
Actuarial present value of accumulated postretirement benefit obligation:
<S> <C> <C>
Current retirees ............................................................................ $ 2,573 1,967
Current employees eligible for benefits ..................................................... 930 634
Current employees not yet eligible for benefits ............................................. 6,016 5,854
- ------------------------------------------------------------------------------------------------------------------------------------
Total accumulated postretirement benefit obligation ............................................ 9,519 8,455
Unrecognized prior service cost ................................................................ 1,523 290
Unrecognized net gain (loss) ................................................................... 3,288 4,228
- ------------------------------------------------------------------------------------------------------------------------------------
Accrued postretirement benefit cost ............................................................ $14,330 12,973
====================================================================================================================================
</TABLE>
The assumed health care cost trend rate used in measuring the accumulated
postretirement benefit obligation will be 13% in 1996, gradually declining to
6.5% in the year 2002 and thereafter. A 1% change in the assumed health care
cost trend rates for each year would change the accumulated postretirement
benefit obligation by approximately $1,500,000 at March 31, 1995 and change the
cost for the year ended March 31, 1995 by $392,000. The assumed discount rates
used in determining the accumulated postretirement benefit obligation were 8.5%
in 1995 and 7.25% in 1994.
(9) OTHER ASSETS AND OTHER LIABILITIES AND DEFERRED CREDITS
A summary of other assets at March 31 follows:
(IN THOUSANDS)
1995 1994
- --------------------------------------------------------------------------------
Recoverable insurance losses ................... $ 28,921 36,163
Goodwill ....................................... 24,958 646
Assets held for sale ........................... 9,582 5,797
Other .......................................... 10,125 10,843
- --------------------------------------------------------------------------------
$ 73,586 53,449
================================================================================
A summary of other liabilities and deferred credits at March 31 follows:
(IN THOUSANDS)
1995 1994
- --------------------------------------------------------------------------------
Postretirement benefit liability ....................... $ 14,330 12,973
Minority interests in net assets of subsidiaries ....... 8,628 10,678
Noncurrent foreign and domestic taxes .................. 6,957 6,957
Other .................................................. 12,141 10,765
- --------------------------------------------------------------------------------
$ 42,056 41,373
================================================================================
(10) CAPITAL STOCK
Under the Company's stock option and restricted stock plans, the Compensation
Committee of the Board of Directors has authority to grant stock options and
restricted shares of the Company's stock to officers and other key employees. At
March 31, 1995, 2,814,623 shares of common stock are reserved for issuance under
the plans. The stock option price and exercise period are set by the grant, with
the price equal to the market price of the stock on the date of grant.
F-15
<PAGE>
Transactions in the stock option plans during 1995, 1994 and 1993 were as
follows:
PRICE RANGE
PER SHARE SHARES
- -------------------------------------------------------------------------------
Outstanding March 31, 1992 ............... $ 4.38 - 21.50 1,103,344
Options granted .......................... 15.00 - 19.00 177,200
Options exercised ........................ 4.38 - 13.25 (367,638)
Options expired or cancelled ............. 4.38 - 15.00 (19,917)
- -------------------------------------------------------------------------------
Outstanding March 31, 1993 ............... 4.38 - 21.50 892,989
Options granted .......................... 19.63 - 20.13 198,900
Options exercised ........................ 4.38 - 15.00 (160,323)
Options expired or cancelled ............. 4.38 - 19.63 (35,830)
- -------------------------------------------------------------------------------
Outstanding March 31, 1994 ............... 4.38 - 21.50 895,736
Options granted .......................... 19.00 - 23.38 901,875
Options exercised ........................ 4.38 - 20.13 (131,783)
Options Expired Or Cancelled ............. 4.38 - 22.25 (72,530)
- -------------------------------------------------------------------------------
Outstanding March 31, 1995 ............... $ 4.38 - 23.38 1,593,298
===============================================================================
At March 31, 1995 and 1994, 531,403 shares and 522,205 shares, respectively,
were exercisable under the stock option plans.
The restricted stock plan permits the grant of Company shares restricted as to
transferability and subject to a substantial risk of forfeiture. The vesting
restrictions and period during which the transferability restrictions are
applicable are determined on a case-by-case basis. During the restricted period,
the restricted shares may not be transferred or encumbered but the recipient has
the right to vote and receive dividends on the restricted shares. At March 31,
1995, contingent awards totalling 36,498 restricted Company shares were
outstanding, to be issued in conjunction with and as a result of the exercise of
certain stock options. None of these restricted shares were issued as of March
31, 1995. Once these restricted shares are issued, they would be forfeited if,
during the five years after issuance, a disposition was made of the option
shares, except for dispositions specifically permitted by the grant. The
ownership of these restricted shares will vest at the end of the five year
period in which they are subject to forfeiture.
In accordance with an employment agreement with the Company's chairman of the
board, 70,000 shares of restricted common stock of the Company were granted to
him on October 20, 1994. These restricted shares vest at varying intervals when
the average sales price of the common stock reaches certain predetermined
levels. The fair market value of the stock at the time of the grant was
classified in stockholders' equity as deferred compensation-restricted stock and
will be amortized by equal monthly charges to earnings over approximately seven
years.
During fiscal 1994, all then-existing treasury shares were cancelled and,
accordingly, the amount of treasury shares were reclassified to common stock and
additional paid-in capital.
At March 31, 1995 and 1994, 3,000,000 shares of no par value preferred stock
were authorized and unissued.
Under a Shareholder Rights Plan, one preferred stock purchase right has been
distributed as a dividend for each outstanding common share. Each right entitles
the holder to purchase, under certain conditions, one two-hundredth of a share
of Series A Participating Preferred Stock at an exercise price of $50, subject
to adjustment. The rights will not be exercisable unless a person (as defined in
the plan) acquires beneficial ownership of 16% or more of the outstanding common
shares, or a person commences a tender offer or exchange offer, which upon its
consummation such person would beneficially own 16% or more of the outstanding
common shares.
F-16
<PAGE>
If after the rights become exercisable a person becomes the beneficial owner of
16% or more of the outstanding common shares (except pursuant to an offer for
all shares approved by the Board of Directors), each holder (other than the
acquirer) will be entitled to receive, upon exercise, common shares having a
market value of twice the exercise price. In addition, if the Company is
involved in a merger (other than a merger which follows an offer for all shares
approved by the Board of Directors), major sale of assets or other business
combination, each holder of a right (other than the acquirer) will be entitled
to receive, upon exercise, common stock of the acquiring company having a market
value of twice the exercise price.
The rights may be redeemed for $.01 per right at any time prior to ten days
following the acquisition by a person of 16% or more of the outstanding common
shares. The rights expire on May 1, 2000.
(11) COMMITMENTS AND OTHER MATTERS
An employment agreement exists with the Company's chairman of the board,
president and chief executive officer whereby he will serve in such capacity
through December 31, 1997. The terms of the employment agreement provide for an
annual base salary and certain other benefits. Compensation continuation
agreements exist with all other officers and certain other key employees of
Tidewater Inc. whereby each receives compensation and benefits in the event that
his or her employment is terminated following certain events relating to a
change in control of the Company. The maximum amount of compensation that could
be paid under the agreements, based on present salary levels, is approximately
$5,400,000. The amount that could be paid for certain benefits is not presently
determinable.
In March 1993 the Company requested that the Company's then chairman of the
board, president and chief executive officer amend his then existing employment
and consulting agreement. For its benefit, the Company elected to amend the
agreement in view of possible changes to tax laws then under consideration by
the Clinton administration and Congress. The amendment accelerated the vesting
of all outstanding shares of restricted stock such that these shares became
fully vested and freely transferable immediately. The original terms of the
restricted stock shares included restrictions during the employment term of the
agreement. Due to the acceleration of the vesting of the restricted stock shares
on March 31, 1993, the then remaining deferred compensation of $2,850,000 was
charged to other expenses in the Consolidated Statement of Earnings for fiscal
1993. The amendment also provided for an immediate lump-sum distribution of the
present value of benefits under the Company's supplemental retirement plan,
including the additional benefits that would have accrued assuming he remained
employed by the Company through September 24, 1994. The lump-sum distribution
amounted to $2,212,000 and included $921,000 for unaccrued benefits which was
charged to other expenses in the Consolidated Statement of Earnings for fiscal
1993.
During the fourth quarter of fiscal 1995, the Company recorded as "other
expense" $5.9 million ($3.7 million after tax, or $.07 per common share) for the
cost of a restructuring program of its corporate headquarters and worldwide
marine operations which was designed to reduce costs and improve operating
efficiencies. Substantially all of the costs associated with the restructuring
program were paid before March 31, 1995. The restructuring resulted in the
elimination of approximately 150 positions, realignment of duties and
responsibilities and streamlining of administrative functions. The charge
reflects the costs associated with staff reductions, relocations and related
transition expenses.
During the third quarter of fiscal 1995, the Company recorded as "other expense"
a charge of $2.5 million ($1.6 million after tax, or $.03 per common share) for
reserves to cover possible losses due to the potential insolvency of certain of
the Company's insurers.
In 1983, the Environmental Protection Agency (EPA) notified two subsidiaries of
the Company that they were among 53 potentially responsible parties (PRP's) for
cleanup costs at the Western Sand and Gravel site in Rhode Island. In 1989, the
EPA notified another subsidiary of the Company that it was a PRP
F-17
<PAGE>
for cleanup costs at a National Priorities List site. EPA later nominated the
subsidiary a de minimis participant for this site. Based on its evaluation of
potential total clean-up costs, its estimate of its potential exposure, and the
viability of other PRP's, management believes that any costs ultimately required
to be borne by the Company at these sites will not have a material adverse
effect on its results of operations, cash flow or financial position.
Various other legal proceedings and claims are outstanding which arose in the
ordinary course of business. In the opinion of management, the amount of
ultimate liability, if any, with respect to these actions will not have a
materially adverse effect on the Company's financial position.
(12) BUSINESS SEGMENTS AND GEOGRAPHIC DISTRIBUTION OF OPERATIONS
The Company operates principally in two business segments. Tidewater Marine
provides support services to the offshore oil and gas industry, and Tidewater
Compression provides the energy industry with engineered products and services
used primarily in oil and gas production, enhanced recovery, natural gas
transmission and natural gas processing. Please refer to Management's Discussion
and Analysis of Financial Condition and Results of Operations for disclosures of
additions to properties and equipment, identifiable assets, revenues, operating
profit and depreciation for each business segment.
(13) SUPPLEMENTARY INFORMATION--QUARTERLY FINANCIAL DATA (UNAUDITED)
<TABLE>
<CAPTION>
YEARS ENDED MARCH 31, 1995 AND 1994
(IN THOUSANDS, EXCEPT PER SHARE DATA)
1995 FIRST SECOND THIRD FOURTH
- -----------------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C>
Revenues:
Marine operations .............................................. $118,418 115,648 114,382 106,836
Compression operations ......................................... 14,913 15,599 21,559 31,419
- -----------------------------------------------------------------------------------------------------------------------------------
$133,331 131,247 135,941 138,255
===================================================================================================================================
Operating profit:
Marine operations .............................................. $ 21,187 18,061 20,129 12,793
Compression operations ......................................... 1,782 2,657 4,207 5,790
- -----------------------------------------------------------------------------------------------------------------------------------
$ 22,969 20,718 24,336 18,583
===================================================================================================================================
Net earnings ...................................................... $ 13,441 12,327 11,698 5,162
===================================================================================================================================
Primary and fully diluted earnings per common share ............... $ .25 .23 .22 .10
===================================================================================================================================
1994
- -----------------------------------------------------------------------------------------------------------------------------------
Revenues:
Marine operations .............................................. $116,225 119,750 118,971 111,655
Compression operations ......................................... 12,932 14,419 14,002 14,118
- -----------------------------------------------------------------------------------------------------------------------------------
$129,157 134,169 132,973 125,773
===================================================================================================================================
Operating profit:
Marine operations .............................................. $ 15,334 18,718 21,886 9,845
Compression Operations ......................................... 1,132 2,366 1,951 1,446
- -----------------------------------------------------------------------------------------------------------------------------------
$ 16,466 21,084 23,837 11,291
===================================================================================================================================
Earnings before extraordinary item ................................ $ 8,214 9,142 13,542 5,232
===================================================================================================================================
Net earnings (loss) ............................................... $ 8,214 4,692 13,542 (2,288)
===================================================================================================================================
Primary and fully diluted earnings per common share
Earnings before extraordinary item ............................. $ 0.15 0.17 0.25 .10
===================================================================================================================================
Net earnings (loss) ............................................... $ 0.15 0.09 0.25 (.04)
===================================================================================================================================
</TABLE>
Operating profit consists of revenues less operating costs and expenses,
depreciation, general and administrative expenses and other income and expenses
of the Marine and Compression segments.
See notes 2, 7 and 11 for detailed information regarding transactions which
affect fiscal 1995 and 1994 quarterly amounts.
F-18
<PAGE>
SCHEDULE II
TIDEWATER INC. AND SUBSIDIARIES
VALUATION AND QUALIFYING ACCOUNTS
YEARS ENDED MARCH 31, 1995, 1994, AND 1993
(IN THOUSANDS)
<TABLE>
<CAPTION>
COLUMN A COLUMN B COLUMN C COLUMN D COLUMN E
-------- -------- -------- -------- --------
BALANCE
BALANCE AT AT
BEGINNING ADDITIONS END OF
DESCRIPTION OF PERIOD AT COST DEDUCTIONS PERIOD
----------- ---------- --------- ---------- --------
<S> <C> <C> <C> <C>
1995
Deducted in balance sheet from
trade accounts receivables:
Allowance for doubtful accounts ........................ $6,744 3,950 1,083 (A) 9,611
====== ========= ===== ========
Deducted in balance sheet from
other assets:
Amortization of goodwill and
debt issuance costs .................................. $ 940 1,196 -- 2,136
====== ========= ===== ========
1994
Deducted in balance sheet from
trade accounts receivables:
Allowance for doubtful accounts ........................ $6,218 1,741 1,215 (A) 6,744
====== ========= ===== ========
Deducted in balance sheet from
other assets:
Amortization of goodwill and
debt issuance costs .................................. $1,479 321 860 (B) 940
====== ========= ===== ========
1993
Deducted in balance sheet from
trade accounts receivable:
Allowance for doubtful accounts ........................ $7,442 533 1,757 (A,C) 6,218
====== ========= ===== ========
Deducted in balance sheet from
other assets:
Amortization of goodwill and
debt issuance costs .................................. $1,055 424 -- 1,479
====== ========= ===== ========
</TABLE>
(A) Accounts receivable amounts considered uncollectible and removed from
accounts receivable by reducing allowance for doubtful accounts.
(B) Write-off of patent, deferred debt costs and underwriting commissions.
(C) Includes reclass of Sea-Barge balance of $1,388,000 to other current assets
due to sale of the Container Shipping segment.
F-19
<PAGE>
EXHIBIT INDEX
The index below describes each exhibit filed as a part of this report.
Exhibits not incorporated by reference to a prior filing are designated by an
asterisk; all exhibits not so designated are incorporated herein by reference to
a prior filing as indicated.
3(a) -Restated Certificate of Incorporation of Tidewater Inc. (filed with the
Commission as Exhibit 3(a) to the Company's quarterly report on Form
10-Q for the quarter ended September 30, 1993).
3(b) -Tidewater Inc. Bylaws (filed with the Commission as Exhibit 3(b) to the
Company's quarterly report on Form 10-Q for the quarter ended September
30, 1993).
4(a) -Restated Rights Agreement dated as of December 17, 1993 between
Tidewater Inc. and The First National Bank of Boston (filed with the
Commission as Exhibit 4 to the Company's quarterly report on Form 10-Q
for the quarter ended December 31, 1993).
10(a) -Letter of Credit Agreement dated as of September 7, 1990 (filed with
the Commission as Exhibit 10(a) to the Company's quarterly report on
Form 10-Q for the quarter ended September 30, 1990).
10(b) -$130,000,000 Revolving Credit and Term Loan Agreement dated February
23, 1993 (filed with the Commission as Exhibit 10 to the Company's
report on Form 8-K for February 23, 1994).
10(c) -Tidewater Inc. 1975 Incentive Program Stock Option Plan, as amended in
1990 (filed with the Commission as Exhibit 10(c) to the Company's annual
report on Form 10-K for the fiscal year ended March 31, 1991).
10(d) -Tidewater Inc. 1992 Stock Option and Restricted Stock Plan (filed with
the Commission as Exhibit 10(f) to the Company's annual report on Form
10-K for the fiscal year ended March 31, 1993).
10(e) -Tidewater Inc. Amended and Restated Supplemental Executive Retirement
Plan (filed with the Commission as Exhibit 10(g) to the Company's annual
report on Form 10-K for the fiscal year ended March 31, 1993).
10(f) -Tidewater Inc. Amended and Restated Employees' Supplemental Savings
Plan (filed with the Commission as Exhibit 10(h) to the Company's annual
report on Form 10-K for the fiscal year ended March 31, 1993).
10(g) -Supplemental Health Plan for Executive Officers of Tidewater Inc.
(filed with the Commission as Exhibit 10(i) to a Registration Statement
on September 12, 1989, Registration No. 33- 31016).
10(h) -Tidewater Inc. Deferred Compensation Plan for Directors (filed with the
Commission as Exhibit 10(h) to the Company's annual report on Form 10-K
for the fiscal year ended March 31, 1994).
10(i) -Tidewater Inc. Retirement Plan for Directors as adopted on March 22,
1990 (filed with the Commission as Exhibit 10(k) to the Company's annual
report on Form 10-K for the fiscal year ended March 31, 1990).
<PAGE>
10(j) -Employment and Consulting Agreement dated as of March 31, 1993 between
Tidewater Inc. and John P. Laborde as amended (filed with the Commission
as Exhibit 10(l) to the Company's annual report on Form 10-K for the
fiscal year ended March 31, 1993).
10(k) -Form of Severance Agreement entered into as of August 1, 1985 with
eleven executive officers and key employees, as amended (filed with the
Commission as Exhibit 10(j) to the Company's annual report on Form 10-K
for the fiscal year ended March 31, 1992).
10(l) -Form of Severance Agreement entered into as of February 18, 1992 with
three executive officers, as amended (filed with the Commission as
Exhibit 10(k) to the Company's annual report on Form 10-K for the fiscal
year ended March 31, 1992).
10(m) -Standstill Agreement dated as of November 11, 1992 between Tidewater
Inc. and Zapata Corporation (filed with the Commission as Exhibit 10(o)
to the Company's annual report on Form 10-K for the fiscal year ended
March 31, 1993).
10(n) -First Amendment to Standstill Agreement dated January 24, 1994 between
Tidewater Inc. and Zapata Corporation (filed with the Commission as
Exhibit 10(n) to the Company's annual report on Form 10-K for the fiscal
year ended March 31, 1994).
10(o) -Agreement, dated August 11, 1989, by and among the Company and Irwin L.
Jacobs, Daniel T. Lindsay, Gerald A. Schwalbach, TR Holdings, Inc. and
Minstar, Inc. (filed with the Commission as Exhibit 1 to the Company's
report on Form 8-K for August 11, 1989).
10(p) -Form of Stockholder Agreement entered into by and between the Company
and each of the stockholders of Zapata Gulf Marine Corporation (filed
with the Commission as Exhibit 10(r) to the Company's annual report on
Form 10-K for the fiscal year ended March 31, 1992).
*10(q) -Tidewater Inc. 1995 Annual Incentive Plan.
10(r) -Employment Agreement dated June 13, 1995 between Tidewater Inc. and
William C. O'Malley (filed with the Commission as Exhibit 10 to the
Company's report on Form 8-K for June 13, 1995).
*11 -Earnings per share Computation Information.
*22 -Subsidiaries of the Company.
*24 -Consent of Independent Accountants.
*27 -Financial Data Schedule.
Certain instruments respecting long-term debt of Tidewater have been
omitted pursuant to Regulation S-K, Item 601. Tidewater hereby agrees to furnish
a copy of any such instrument to the Commission upon request.
<PAGE>
<PAGE>
EXHIBIT 10(q)
TIDEWATER INC.
Annual Incentive Plan
Summary Provisions
April 1, 1995
<PAGE>
TABLE OF CONTENTS
I. Plan Objectives
II. Basic Plan Concept
III. Eligibility Criteria
IV. Award Opportunities
V. Performance Measures and Standards
VI. Award Calculations
VII. Award Payments
VIII. Transfers
IX. Retirements and Terminations
X. Plan Amendments
- i -
<PAGE>
SUMMARY PROVISIONS
OF THE
TIDEWATER INC.
ANNUAL INCENTIVE PLAN (AIP)
I. PLAN OBJECTIVE
The primary objective of the Tidewater Annual Incentive Plan (AIP) is to
assist in achieving specific business and financial goals conducive to the
organizations's success which the company believes can best be
accomplished by providing cash incentives to key Tidewater employees.
The AIP helps prioritize and focus efforts on the accomplishment of
financial goals and other corporate objectives established each year
through the annual planning and budgeting process. This is achieved by
linking a significant element of variable annual compensation to the
accomplishment of selected goals. At target performance levels, the AIP
provides incentive compensation opportunities which, in combination with
base salary, will yield competitive total compensation levels.
II. BASIC PLAN CONCEPT
The plan concept focuses primarily on the performance of Tidewater
overall. The AIP is comprised of three divisions which will enabled the
company to better measure performance results of eligible participants by
specific lines of business.
The three divisions are as follows:
o Administrative
o Marine
o Compression
Overall corporate performance is considered each year along with certain
divisional and individual performance measures specific to each division's
operations and functions. Regardless of corporate performance, however,
the Compensation Committee of the Board may at its discretion establish a
funding pool of up to 50% of the target awards for all participants in
order to make awards for outstanding individual contributions even if the
company does not achieve threshold performance on plan performance
measures within a year.
III. ELIGIBILITY CRITERIA
Eligibility for participation in the AIP will be limited to officers and
certain key employees that directly impact the company's success. The
specific positions eligible to participate in the plan will be reviewed
and determined annually by Tidewater's Chief Executive Officer and the
Compensation Committee of the Board of Directors.
<PAGE>
IV. AWARD OPPORTUNITIES
Prior to the beginning of each fiscal year, Tidewater will specify target
incentive awards for each eligible position. These amounts are determined
from each eligible participant's base salary times the target percent
associated with the participant's position within the company. The actual
target percent is determined based upon the employee's relevant position
within the company and the measurable amount of direct influence on the
company's performance. In addition, the company will also determine the
total pooled target, threshold and maximum incentive award amounts for the
upcoming fiscal year. Target percents by division are as follows:
A. Administrative
Chairman, President, & CEO 60%
Executive Vice President 45%
Senior Vice President 40%
Vice President 35%
B. Marine
Vice President - Tidewater Inc. 35%
Controller - Marine 30%
Safety Manager - Marine 30%
Area Manager/Sales Manager (A ranked) 30%
Area Manager/Sales Manager (B ranked) 25%
Area Manager/Sales Manager (C ranked) 20%
C. Compression
Vice President - Tidewater Inc. 35%
General Manager - TideAir 30%
Director Operations - Compression 25%
Controller - Compression 25%
Director Technical Services - Compression 25%
V.P. Operations - TideAir 20%
- 2 -
<PAGE>
V. PERFORMANCE MEASURES AND STANDARDS
Prior to the start of each fiscal year, specific corporate and
divisional measures and standards will be established. In addition, the
appropriate weighting to each measurement will also be established.
A. Except as provided in Section II of this AIP, before any
individual incentive amount can be awarded, the company must
first achieve minimum (threshold) performance in at least one
of two company performance measures. For fiscal year 1996,
company performance measures are:
1. Return of Total Capital (ROTC) - Under this performance
measurement, the company must attain at least the 40th
percentile when compared to the Value Line Peer Group
(see attached list) on Return of Total Capital (ROTC).
ROTC would be defined as:
Earnings Before Interest Expense, Taxes
Depreciation and Amortization (EBITDA)
---------------------------------------
Average Shareholders Equity + Average Long-Term
Debt (including current maturities of Long-Term Debt)
NOTE: Average shareholders' equity and average long-term
debt shall be determined by summing the respective
totals as of the end of each interim reporting
period during the fiscal year (monthly if
available; otherwise, quarterly) as shown on the
company's consolidated balance sheet and dividing
such sums by the number of interim reporting
periods.
The standard for the ROTC performance measure will be
established by considering Tidewater's performance
against the Value Line Peer Group of companies (see
Matrix attached).
2. Adjusted Net Income vs. Budget - Under this test, net
income as compared with budgeted net income, adjusted
for selected charges/credits of an unusual nature which
would not be subject to normal budgeting procedures,
would be used. The net income test is a measurement
test comparing actual results against budgeted results
for the year (see Matrix attached).
(NOTE: Net income versus other measurements, such as
EBITDA or growth in earnings, is believed to be the
appropriate measure of performance for the following
reasons:
a. Absent special circumstances, it is appropriate
to make incentive pay awards only in those
years where the corporation reports a profit.
In using EBITDA, or growth in operating
earnings as the measurement, it is possible to
have achieved the threshold measurement for
making awards yet the corporation could be
reporting losses from its ongoing activities;
and
b. Using net income as the measurement assures
that all aspects of the corporation's
activities (i.e., operating as well as
financing) are considered in the incentive
awards program.)
- 3 -
<PAGE>
In order to have the incentive pay program not inhibit
good management/business decisions, certain adjustments
to net income should be made in determining if the net
income test has been met. Such adjustments should be
objectively determinable to avoid the appearance of
impropriety. Accordingly, the following items as
reported in the corporation's consolidated statement of
earnings should be added to or subtracted from net
income as reported in order to determine net income for
purposes of the incentive pay plan:
Cumulative effect of accounting changes;
Extraordinary items; Discontinued operations; and
Unusual or infrequently occurring items (less the
amount of related income taxes), as that term is
used in Accounting Principles Board Opinion No. 30.
NOTE: For purposes of calculating achievement of this
performance measure, budgeted net income shall be
divided by the average number of common shares
outstanding for the year as contemplated by the
budget. Likewise, the amount of Adjusted Net
Income shall be divided by the average number of
common shares outstanding during the year. For
purposes of making both of these Earnings Per
Share calculations, common stock equivalents shall
not be considered in determining the average
number of common shares outstanding.
B. Each participant, within each division, will have specific
standards established for the accomplishment of certain company
performance and individual performance measures. These criteria
will be established annually, prior to the beginning of each
fiscal year, and will be used to determine the amount of the
incentive award that each participant will be eligible to
receive. For Fiscal Year 1996, the performance measures will be
as follows:
1. Administrative
a. Return on Total Capital - As defined above,
this measurement will carry a weight of 25% of
the individual's total award.
b. Adjusted Net Income - As defined above, this
measurement will carry a weight of 25% of the
individual's total award.
c. Individual Performance - This measurement is
determined on a subjective basis and will carry
a weight of 25% of the individual's total
award.
- 4 -
<PAGE>
d. Safety Performance - This measurement is
determined by comparing the current fiscal year
Lost Time Accident (LTA) results against the
previous fiscal year. No allocation under this
measurement is provided unless the company
achieves a 25% reduction in LTA's from the
previous fiscal year. The safety performance
measurement will carry a weight of 25% of the
individual's total award.
2. Marine
a. Safety Measurement - This measurement will be
considered in two parts. First, each area will
be given a specific goal to achieve during the
fiscal year with respect to reductions in Lost
Time Accidents. Each area will be graded on how
well it performs toward achieving the assigned
goals. Attached as Exhibit 1, is the Safety
Lost Time Accident goals for Fiscal 1996.
Second, each area is evaluated on its own
overall safety performance, taking into
consideration such things as number of deaths
and/or disabilities within an area, incident
ratios, nature of accidents, preventable
accidents, etc. Notwithstanding the above, no
allocation under this measurement is provided
unless the company achieves a 25% reduction in
LTA's from the previous fiscal year. This
measurement will carry a weight of 33.33% of
the individual's total award.
b. Margins Test - Under the margins test,
operating margins, as defined, as compared with
a budgeted margins goal, will be used to
determine a component of the incentive pay
pool. The margins test will be an area specific
test and carry a weight of 33.33% of the
individual's total award. Operating margins for
this purpose will be defined as follows:
Divisional Revenues from all operating
activities as reported in the
corporation's consolidated income
statement.
Minus Divisional Operating Costs and
Expenses, excluding depreciation and
amortization expense, as reported in
the corporation's consolidated income
statement.
Minus Divisional General and Administrative
Expenses as reported in the
corporation's consolidated income
statement.
- 5 -
<PAGE>
Minus Capitalized Repair and Maintenance
Costs.
Minus Minority interests in less than 100%
owned consolidated subsidiaries of the
division.
Equals Operating Margins, as defined.
====== ==============================
c. Individual Performance - Individual performance
is determined annually and is based upon a
subjective evaluation by the participant's
manager(s) and encompasses the overall
performance of the individual for the fiscal
year. This measurement will carry a weight of
33.34% of the individual's total award.
Included as part of the individual performance
measure may be an area specific test. This test
may be optional by area and would consist of
zero to two specific criteria relevant to a
given area. Some examples would be the percent
improvement in receivables over a period of
time, delinquent receivables collected, revenue
enhancement achieved over a period of time,
utilization, or other such criteria as deemed
appropriate. When an area specific test is
utilized, the particular measurement will be
weighted as part of the individual performance
weight.
3. Compression
a. Margins Test - Under the margins test,
operating margins, as defined, as compared with
a budgeted margins goal, will be used to
determine a component of the incentive pay
pool. The margins test will carry a weight of
60% of the individual's total award. Operating
margins for this purpose will be defined as
follows:
Divisional Revenues from all operating
activities as reported in the
corporation's consolidated income
statement.
Minus Divisional Operating Costs and
Expenses, excluding depreciation and
amortization expense, as reported in
the corporation's consolidated income
statement.
Minus Divisional General and Administrative
Expenses as reported in the
corporation's consolidated income
statement.
- 6 -
<PAGE>
Minus Capitalized Repair and Maintenance
Costs.
Minus Minority interests in less than 100%
owned consolidated subsidiaries of the
division.
Equals Operating Margins, as defined.
====== ==============================
b. Individual Performance - Individual performance
is determined annually and is based upon a
subjective evaluation by the participant's
manager(s) and encompasses the overall
performance of the individual for the fiscal
year. This measurement will carry a weight of
40% of the individual's total award.
Included as part of the individual performance
measure may be an area specific test. This test
may be optional by area and would consist of
zero to two specific criteria relevant to a
given area. Some examples would be the percent
improvement in receivables over a period of
time, delinquent receivables collected, revenue
enhancement achieved over a period of time,
utilization, or other such criteria as deemed
appropriate. When an area specific test is
utilized, the particular measurement will be
weighted as part of the individual performance
weight.
VI. AWARD CALCULATIONS
A. Development of Incentive Funding Pool
The actual amount of the incentive pool to be awarded depends
on the attainment of specified corporate performance measures
as set forth in Section V-A. Each corporate measurement will
operate independently of one another in creating the funding
pool for annual incentive awards. Thus, the company could
achieve above threshold on one performance measure and below
threshold on another performance measure and still have funds
available in the annual incentive pool.
Exhibit 2, attached, provides a matrix example of how the size
of the incentive funding pool would be calculated at different
levels of corporate performance. The Matrix also shows:
o The percentage of aggregate target annual incentives
paid for all plan participants; and
o The total amount of money allocated to the incentive
funding pool for fiscal 1996.
- 7 -
<PAGE>
B. Individual Awards
The incentive funding pool is allocated to individual plan
participants by the performance measures set forth in Section
V-B.
Each division will also be looked at independently of one
another; therefore, it is possible for the Compression Division
to receive individual awards for meeting performance criteria
and not the Marine Division if it does not reach its
performance criteria. However, the overall company performance
measures must be positive before consideration of any incentive
awards.
The size of each divisional incentive pool is based upon the
number of eligible participants in each division. For example,
if the company meets target goals, each participant's annual
base salary is multiplied by the participant's target percent
amount. All target amounts are then added together to produce
the total pool for that division. Each divisional pool would be
adjusted based upon the actual results of the overall corporate
performance measurements.
VII. AWARD PAYMENTS
It is anticipated that awards will be payable in cash; however, the
company reserves the right to make payment in the form of company stock
at the company's option. Awards will be paid as soon as
administratively possible after the close of the fiscal year.
VIII. TRANSFERS
In the event that a participant transfers from one position to another
during the course of the year, his/her award for the year will be
calculated on a pro-rata basis according to the proportion of time
spent in each position during the year.
IX. RETIREMENTS AND TERMINATIONS
To receive an award under the AIP, the participant must be actively
employed on the last day of the performance cycle. At the discretion of
the Chief Executive Officer and with the approval of the Compensation
Committee of the Board of Directors, a participant who separates from
service prior to the end of the performance cycle may be granted an
award. The amount of the award, if any, will be based in part upon the
length of time employed during the performance cycle.
- 8 -
<PAGE>
X. PLAN ADMINISTRATION, MODIFICATION, AND ADJUSTMENT
The AIP will be administered by Tidewater's Chief Executive Officer,
who may delegate certain elements of program administration to the
Chief Financial Officer and the Director of Employee Relations. Actual
performance goals, standards, and award determinations will be approved
by the Compensation Committee of the Board of Directors.
- 9 -
<PAGE>
EXHIBIT 11
TIDEWATER INC.
EARNINGS PER SHARE COMPUTATION INFORMATION
YEARS ENDED MARCH 31, 1995, 1994 AND 1993
<TABLE>
<CAPTION>
(IN THOUSANDS, EXCEPT PER SHARE DATA)
1995 1994 1993
- -----------------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C>
Net earnings from continuing operations .............................. $ 42,628 36,130 27,809
Discontinued operations .............................................. -- -- 3,099
Extraordinary loss on early debt retirement .......................... -- (11,970) --
Cumulative effect of accounting change ............................... -- -- (6,640)
- -----------------------------------------------------------------------------------------------------------------------------------
Net earnings ......................................................... $ 42,628 24,160 24,268
===================================================================================================================================
Issued shares: 53,237,839
Weighted average common shares outstanding ........................... 53,133,295 52,946,031 52,653,905
Incremental shares applicable to stock options ....................... 272,719 371,470 419,668
- -----------------------------------------------------------------------------------------------------------------------------------
Weighted Average Common Shares and Equivalents ....................... 53,406,014 53,317,501 53,073,573
===================================================================================================================================
Primary and fully-diluted earnings per common share:
Continuing operations ............................................ $ .80 0.67 0.53
Discontinued operations .......................................... -- -- 0.06
Extraordinary loss on early debt retirement ...................... -- (.22) --
Cumulative effect of accounting change ........................... -- -- (.13)
- -----------------------------------------------------------------------------------------------------------------------------------
Net earnings ..................................................... $ .80 0.45 0.46
===================================================================================================================================
The above earnings per share (EPS) calculations are submitted in accordance with
APB Opinion No. 15. An EPS calculation in accordance with Regulation S-K item
601(b)(11) is not shown above because it produces an anti-dilutive result. The
following information is disclosed for purposes of calculating the anti-dilutive
EPS for fiscal years 1994 and 1993:
1995 1994 1993
- ------------------------------------------------------------------------------------------------------------------------------------
Shares attributable to assumed conversion
of convertible subordinated debentures ........................... -- 1,840,880 1,885,400
Interest expense (in thousands) applicable
to convertible subordinated debentures,
net of income taxes .............................................. $ -- 2,377 2,743
====================================================================================================================================
</TABLE>
<PAGE>
EXHIBIT 22
LIST OF SUBSIDIARIES
IMMEDIATE SUBSIDIARIES OF THE COMPANY
PERCENTAGE
STATE OR OF VOTING
JURISDICTION OF SECURITIES
NAME INCORPORATION OWNED
---- --------------- ----------
Hilliard Oil & Gas, Inc.. . . . . . . . . . Nevada 100%
International Offshore Services (U.K.) Ltd. United Kingdom 100%
Java Boat Corporation . . . . . . . . . . . Louisiana 100%
Pacific Tidewater Pty. Ltd. . . . . . . . . Australia 100%
Pental Insurance Co. Ltd. . . . . . . . . . Bermuda 100%
Provident Marine Ltd. . . . . . . . . . . . Turks & Caicos Is. 50%
Seafarer Boat Corporation . . . . . . . . . Louisiana 100%
Servicios Maritimos Ves, S.A. de R.L. . . . Mexico 49%
Sin-Hai Offshore Co. Pte. Ltd.. . . . . . . Singapore 97.5%
S.O.P., Inc.. . . . . . . . . . . . . . . . Louisiana 100%
Tidewater Compression Service, Inc. . . . . Texas 100%
Tidewater Crewing Limited . . . . . . . . . Cayman Islands 100%
Tidewater (IOM) Limited . . . . . . . . . . Isle of Man 100%
Tidewater Marine, Inc.. . . . . . . . . . . Louisiana 100%
Tidewater Marine (Malaysia) Sdn. Bhd. . . . Malaysia 100%
Tidewater Marine Service, Inc.. . . . . . . Louisiana 100%
Tidewater Marine Service (U.K.) Ltd.. . . . United Kingdom 100%
Tidewater Marine West Indies Limited. . . . Bahama Islands 100%
Tidewater Nautico, Inc. . . . . . . . . . . Panama 100%
Tidewater Services, Inc.. . . . . . . . . . Louisiana 100%
Tidewater Venezuela, C.A. . . . . . . . . . Venezuela 100%
Twenty Grand Marine Service, Inc. . . . . . Louisiana 100%
Twenty Grand Offshore, Inc. . . . . . . . . Louisiana 100%
Zapata Gulf Marine Corporation. . . . . . . Delaware 100%
SUBSIDIARY OF THE COMPANY THROUGH
EQUIPO ZULIA, C. A.
Remolcadores y Gabarras Remigasa, S.A. . . Venezuela 19.9%
SUBSIDIARY OF THE COMPANY THROUGH
GULF FLEET MIDDLE EAST, INC.
Gulf Fleet Abu Dhabi. . . . . . . . . . . . United Arab
Emirates 49%
-1-
<PAGE>
SUBSIDIARIES OF THE COMPANY THROUGH
GULF FLEET SUPPLY VESSELS, INC.
PERCENTAGE
STATE OR OF VOTING
JURISDICTION OF SECURITIES
NAME INCORPORATION OWNED
---- --------------- ----------
Gulf Fleet Middle East, Inc.. . . . . . . . Panama 100%
Gulf Fleet N.V. . . . . . . . . . . . . . . Netherlands
Antilles 100%
Servicios Maritimos del Carmen, S.A. de C.V. Mexico 100%*
Tidewater Marine Alaska, Inc. . . . . . . . Alaska 100%
Tidewater Marine Atlantic, Inc. . . . . . . Delaware 100%
Tidewater Marine International Pte. Ltd.. . Singapore 100%
Zapata Gulf Crews, Inc. . . . . . . . . . . Panama 100%
Zapata Gulf Pacific, Inc. . . . . . . . . . Delaware 100%
SUBSIDIARY OF THE COMPANY THROUGH
GULF FLEET SUPPLY VESSELS, INC. AND JAVA BOAT CORPORATION
Servicios de Abastecimientos Mexicanos,
S. de R.L. de C.V.. . . . . . . . . . . . Mexico 100%
SUBSIDIARY OF THE COMPANY THROUGH
GULF FLEET SUPPLY VESSELS, INC., SERVICIOS MARITIMOS VES, S. DE R.L.
AND TIDEWATER MARINE, INC.
Servicios y Representaciones Maritimas
Mexicanas, S.A. de C.V. . . . . . . . . . Mexico 74%**
SUBSIDIARY OF THE COMPANY THROUGH
GULF FLEET SUPPLY VESSELS, INC. AND TIDEWATER INC.
TT Boat Corporation . . . . . . . . . . . . Louisiana 100%
SUBSIDIARY OF THE COMPANY THROUGH
GULF FLEET SUPPLY VESSELS, INC., TIDEWATER INC.
AND ZAPATA GULF MARINE CORPORATION
Zapata Gulf Marine International Limited. . Vanuatu 100%
SUBSIDIARY OF THE COMPANY THROUGH
GULF FLEET SUPPLY VESSELS, INC. AND ZAPATA GULF MARINE CORPORATION
Zapata Gulf Marine Operators, Inc.. . . . . Delaware 100%
-2-
<PAGE>
SUBSIDIARIES OF THE COMPANY THROUGH
JACKSON MARINE CORPORATION
PERCENTAGE
STATE OR OF VOTING
JURISDICTION OF SECURITIES
NAME INCORPORATION OWNED
---- --------------- ----------
Al Wasl Marine Limited. . . . . . . . . . . United Arab
Emirates 49%
Jackson Marine, S.A.. . . . . . . . . . . . Panama 100%
Jackson Marine Shipping Limited . . . . . . United Kingdom 100%
Mashhor Marine Sdn. Bhd.. . . . . . . . . . Brunei 70%
The National Marine Services Company. . . . United Arab
Emirates 40%
SUBSIDIARIES OF THE COMPANY THROUGH
PACIFIC TIDEWATER PTY. LIMITED
Tidewater Chartering Pty. Ltd.. . . . . . . Australia 50%
Tidewater Port Jackson Marine Pty. Ltd. . . Australia 50%
SUBSIDIARY OF THE COMPANY THROUGH
SIN-HAI OFFSHORE CO. PTE. LTD.
Zhong Chang Offshore Marine People's Republic
Service Co. Ltd.. . . . . . . . . . . . . of China 50%
SUBSIDIARIES OF THE COMPANY THROUGH
TIDEWATER CARIBE, C.A.
Equipo Mara, C.A. . . . . . . . . . . . . . Venezuela 19.9%
Tidewater Marine Service, C.A.. . . . . . . Venezuela 100%
SUBSIDIARY OF THE COMPANY THROUGH
TIDEWATER INC. AND ZAPATA GULF MARINE CORPORATION
Jackson Marine Corporation. . . . . . . . . Delaware 100%
SUBSIDIARY OF THE COMPANY THROUGH
TIDEWATER INC. AND ZAPATA GULF MARINE OPERATORS, INC.
Compania Maritima de Magallanes Limitada. . Chile 100%
-3-
<PAGE>
SUBSIDIARIES OF THE COMPANY THROUGH
TIDEWATER MARINE, INC.
PERCENTAGE
STATE OR OF VOTING
JURISDICTION OF SECURITIES
NAME INCORPORATION OWNED
---- --------------- ----------
Pan-Marine do Brasil Transportes Ltda.. . . Brazil 100%
Pan-Marine International, Inc.. . . . . . . Cayman Islands 100%
Tidewater Marine International, Inc.. . . . Panama 100%
Tidewater Marine Western, Inc.. . . . . . . Texas 100%
Tidex (Malaysia) Sdn. Bhd.. . . . . . . . . Malaysia 100%
Tidex Nigeria Limited . . . . . . . . . . . Nigeria 60%
Tidex Private Limited . . . . . . . . . . . Singapore 100%
SUBSIDIARY OF THE COMPANY THROUGH
TIDEWATER MARINE ALASKA, INC.
Offshore Fleet International Incorporated . Panama 100%
SUBSIDIARY OF THE COMPANY THROUGH
TIDEWATER MARINE INTERNATIONAL, INC.
Tidex/OTS Nigeria Limited (unincorporated). Nigeria 50%
SUBSIDIARY OF THE COMPANY THROUGH
TIDEWATER MARINE SERVICE, C.A.
Equipo Zulia, C.A.. . . . . . . . . . . . . Venezuela 100%
SUBSIDIARIES OF THE COMPANY THROUGH
TIDEWATER MARINE (UK) LIMITED
Offshore Marine Limited . . . . . . . . . . United Kingdom 100%
Zapata Services (U.K.) Limited. . . . . . . United Kingdom 100%
SUBSIDIARIES OF THE COMPANY THROUGH
TIDEWATER NAUTICO, INC.
Asie Zapata Marine Service Sdn. Bhd. . . . Malaysia 49%
Zapata Marine Service (Nigeria) Limited . . Nigeria 100%
Zapata Offshore Marine Service Inc. . . . Liberia 50%
-4-
<PAGE>
SUBSIDIARIES OF THE COMPANY THROUGH
TIDEWATER PORT JACKSON MARINE PTY. LTD.
PERCENTAGE
STATE OR OF VOTING
JURISDICTION OF SECURITIES
NAME INCORPORATION OWNED
---- --------------- ----------
Nuigini Energy Services (unincorporated). . New Guinea 50%
Torrens Ship Builders Pty. Ltd. . . . . . . Australia 50%
TPJM Nominees Limited . . . . . . . . . . . Vanuatu 50%
SUBSIDIARY OF THE COMPANY THROUGH
TIDEWATER VENEZUELA, C.A.
Tidewater Caribe, C.A.. . . . . . . . . . . Venezuela 100%
SUBSIDIARIES OF THE COMPANY THROUGH
ZAPATA GULF MARINE CORPORATION
Gulf Fleet Supply Vessels, Inc. . . . . . . Louisiana 100%
Marine Transportation Services Sea-Barge
Group, Inc. . . . . . . . . . . . . . . . Delaware 60%
Quality Shipyards, Inc. . . . . . . . . . . Louisiana 100%
Southern Ocean Services Pte. Ltd. . . . . . Singapore 100%
Tidewater Marine (UK) Limited . . . . . . . United Kingdom 100%
SUBSIDIARIES OF THE COMPANY THROUGH
ZAPATA GULF MARINE INTERNATIONAL LIMITED
Lamnalco-Tidewater Marine Service Limited Vanuatu 50%
Maritide Offshore Oil Services
Company S.A.E.. . . . . . . . . . . . . . Egypt 49%
Zapata Gulf Indonesia Limited . . . . . . . Vanuatu 80%
SUBSIDIARIES OF THE COMPANY THROUGH
ZAPATA GULF MARINE OPERATORS, INC.
Antilles Marine Service Limited . . . . . . Trinidad & Tobago 50%
Zapata Servicos Maritimos Ltda. . . . . . . Brazil 100%***
-5-
<PAGE>
SUBSIDIARY OF THE COMPANY THROUGH
ZAPATA OFFSHORE MARINE SERVICE INC.
PERCENTAGE
STATE OR OF VOTING
JURISDICTION OF SECURITIES
NAME INCORPORATION OWNED
---- --------------- ----------
Shanghai Zapata Houlder Marine Service People's Republic
Corp. Ltd.. . . . . . . . . . . . . . . . of China 50%
* Includes Servicios y Representaciones Maritimas Mexicanas, S.A. de
C.V.'s ownership of 48% of the capital stock and the incorporators 3%
ownership.
** Includes Tidewater Marine, Inc.'s (Zapata Gulf Marine Service
Corporation's) ownership of 1% of the capital stock.
*** Includes Zapata Gulf Marine Corporation's ownership of 15% of the
capital stock and Gulf Fleet Supply Vessels, Inc.'s ownership of 3% of
the capital stock.
-6-
<PAGE>
EXHIBIT 24
ACCOUNTANT'S CONSENT
The Board of Directors and Stockholders of Tidewater Inc.:
We consent to incorporation by reference in the Registration Statements 2-69356
and 33-38240 on Form S-8 of Tidewater Inc. of our report dated May 1, 1995
relating to the consolidated balance sheets of Tidewater Inc. and subsidiaries
as of March 31, 1995 and 1994 and the related consolidated statements of
earnings, stockholders' equity and cash flows and related schedule for each of
the years in the three-year period ended March 31, 1995, which report appears or
is incorporated by reference in the March 31, 1995 annual report on Form 10-K of
Tidewater Inc. Our report refers to the change in the method of accounting for
postretirement benefits other than pensions in fiscal 1993.
KPMG Peat Marwick LLP
New Orleans, Louisiana
May 1, 1995
<PAGE>
<TABLE> <S> <C>
<ARTICLE> 5
<LEGEND>
The Schedule contains summary financial information extracted from the Company's
Consolidated Balance Sheet and the Consolidated Statements of Earnings at the
date and for the period indicated and is qualified in its entirety by reference
to such financial statements.
</LEGEND>
<MULTIPLIER> 1,000
<PERIOD-TYPE> 12-MOS
<FISCAL-YEAR-END> MAR-31-1995
<PERIOD-END> MAR-31-1995
<CASH> 14,702
<SECURITIES> 0
<RECEIVABLES> 145,805
<ALLOWANCES> 9,611
<INVENTORY> 36,311
<CURRENT-ASSETS> 201,173
<PP&E> 1,464,196
<DEPRECIATION> 858,297
<TOTAL-ASSETS> 902,185
<CURRENT-LIABILITIES> 101,480
<BONDS> 100,000
<COMMON> 5,324
0
0
<OTHER-SE> 574,894
<TOTAL-LIABILITY-AND-EQUITY> 902,185
<SALES> 538,774
<TOTAL-REVENUES> 538,774
<CGS> 478,377
<TOTAL-COSTS> 478,377
<OTHER-EXPENSES> 8,350
<LOSS-PROVISION> 0
<INTEREST-EXPENSE> 4,744
<INCOME-PRETAX> 67,408
<INCOME-TAX> 24,780
<INCOME-CONTINUING> 42,628
<DISCONTINUED> 0
<EXTRAORDINARY> 0
<CHANGES> 0
<NET-INCOME> 42,628
<EPS-PRIMARY> .80
<EPS-DILUTED> .80
</TABLE>
