<PAGE>
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D. C. 20549
FORM 10-Q
/X/ QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES
EXCHANGE ACT OF 1934 - For the Quarterly Period Ended June 30, 1999
-------------
TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES
EXCHANGE ACT OF 1934 - 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
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(State or other jurisdiction of (I.R.S. Employer
incorporation or organization) Identification Number)
601 Poydras Street, Suite 1900, New Orleans, Louisiana 70130
- -------------------------------------------------------------------------------
(Address of principal executive offices) (Zip Code)
Registrant's telephone number, including area code: (504) 568-1010
--------------------------
_______________________________________________________________________________
Former name, former address and former fiscal year, if changed
since last report.
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 of such shorter period that the registrant was
required to file such reports), and (2) has been subject to such filing
requirements for the past 90 days.
YES X NO
-----
55,604,693 shares of Tidewater Inc. common stock $.10 par value per share were
outstanding on July 20, 1999. Excluded from the calculation of shares
outstanding at July 20, 1999 are 4,958,601 shares held by the Registrant's
Grantor Stock Ownership Trust. Registrant has no other class of common stock
outstanding.
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<PAGE>
PART I. FINANCIAL INFORMATION
Item 1. Financial Statements
--------------------
TIDEWATER INC.
UNAUDITED CONDENSED CONSOLIDATED BALANCE SHEETS
(In thousands)
<TABLE>
<CAPTION>
- ----------------------------------------------------------------------------------------------------------
June 30, March 31,
ASSETS 1999 1999
- ----------------------------------------------------------------------------------------------------------
<S> <C> <C>
Current assets:
Cash and cash equivalents $ 73,698 10,422
Trade and other receivables 185,868 238,002
Marine operating supplies 26,075 27,971
Other current assets 4,300 4,483
- ----------------------------------------------------------------------------------------------------------
Total current assets 289,941 280,878
- ----------------------------------------------------------------------------------------------------------
Investments in, at equity, and advances to
unconsolidated companies 15,057 17,307
Properties and equipment:
Vessels and related equipment 1,499,246 1,505,441
Other properties and equipment 43,744 42,744
- ----------------------------------------------------------------------------------------------------------
1,542,990 1,548,185
Less accumulated depreciation 917,576 910,005
- ----------------------------------------------------------------------------------------------------------
Net properties and equipment 625,414 638,180
- ----------------------------------------------------------------------------------------------------------
Goodwill, net 344,884 347,176
Other assets 116,637 110,917
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$1,391,933 1,394,458
==========================================================================================================
LIABILITIES AND STOCKHOLDERS' EQUITY
- ----------------------------------------------------------------------------------------------------------
Current liabilities:
Accounts payable and accrued expenses 62,497 71,256
Accrued property and liability losses 4,608 6,605
Income taxes 2,561 4,485
- ----------------------------------------------------------------------------------------------------------
Total current liabilities 69,666 82,346
- ----------------------------------------------------------------------------------------------------------
Deferred income taxes 135,953 128,826
Accrued property and liability losses 60,593 66,052
Other liabilities and deferred credits 49,332 49,527
Stockholders' equity:
Common stock of $.10 par value, 125,000,000 shares
authorized, issued 60,563,294 shares at June
and 60,566,857 shares at March 6,056 6,057
Other stockholders' equity 1,070,333 1,061,650
- ----------------------------------------------------------------------------------------------------------
Total stockholders' equity 1,076,389 1,067,707
- ----------------------------------------------------------------------------------------------------------
$1,391,933 1,394,458
==========================================================================================================
</TABLE>
See Notes to Unaudited Condensed Consolidated Financial Statements.
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<PAGE>
TIDEWATER INC.
UNAUDITED CONDENSED CONSOLIDATED STATEMENTS OF EARNINGS
(In thousands, except share and per share data)
<TABLE>
<CAPTION>
- ----------------------------------------------------------------------------------------------------------
Three Months Ended
June 30,
---------------------------
1999 1998
- ----------------------------------------------------------------------------------------------------------
<S> <C> <C>
Revenues:
Vessel revenues $ 148,277 267,633
Other marine revenues 6,253 17,244
- ----------------------------------------------------------------------------------------------------------
154,530 284,877
- ----------------------------------------------------------------------------------------------------------
Costs and expenses:
Vessel operating costs 91,892 136,069
Costs of other marine revenues 4,355 13,657
Depreciation and amortization 22,942 23,822
General and administrative 16,946 18,741
- ----------------------------------------------------------------------------------------------------------
136,135 192,289
- ----------------------------------------------------------------------------------------------------------
18,395 92,588
Other income (expenses):
Foreign exchange gain (loss) (72) 14
Gain on sales of assets 2,359 1,653
Equity in net earnings of unconsolidated companies 1,986 1,762
Minority interests (247) (615)
Interest and miscellaneous income 1,914 893
Interest and other debt costs (126) (460)
- ----------------------------------------------------------------------------------------------------------
5,814 3,247
- ----------------------------------------------------------------------------------------------------------
Earnings before income taxes 24,209 95,835
Income taxes 7,747 33,063
- ----------------------------------------------------------------------------------------------------------
Net earnings $ 16,462 62,772
==========================================================================================================
Earnings per common share $ .30 1.06
==========================================================================================================
Diluted earnings per common share $ .30 1.05
==========================================================================================================
Weighted average common shares outstanding 55,498,319 59,359,546
Incremental common shares from stock options 167,498 156,993
- ----------------------------------------------------------------------------------------------------------
Adjusted weighted average common shares 55,665,817 59,516,539
==========================================================================================================
Cash dividends declared per common share $ .15 .15
==========================================================================================================
</TABLE>
See Notes to Unaudited Condensed Consolidated Financial Statements.
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<PAGE>
TIDEWATER INC.
UNAUDITED CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS
(In thousands)
<TABLE>
<CAPTION>
- ----------------------------------------------------------------------------------------------------------
Three Months Ended
June 30,
------------------------------
1999 1998
- ----------------------------------------------------------------------------------------------------------
<S> <C> <C>
Net cash provided by operating activities $ 80,535 104,409
- ----------------------------------------------------------------------------------------------------------
Cash flows from investing activities:
Proceeds from sales of assets 3,679 2,923
Additions to properties and equipment (12,787) (9,991)
Tax payments related to sale of Compression operations --- (67,810)
Other 37 (118)
- ----------------------------------------------------------------------------------------------------------
Net cash used in investing activities (9,071) (74,996)
- ----------------------------------------------------------------------------------------------------------
Cash flows from financing activities:
Principal payments on long-term debt --- (25,000)
Credit facility borrowings --- 40,000
Proceeds from issuance of common stock 150 405
Common stock purchased --- (16,195)
Dividends paid (8,338) (8,911)
- ----------------------------------------------------------------------------------------------------------
Net cash used in financing activities (8,188) (9,701)
- ----------------------------------------------------------------------------------------------------------
Net change in cash and cash equivalents 63,276 19,712
Cash and cash equivalents at beginning of period 10,422 24,977
- ----------------------------------------------------------------------------------------------------------
Cash and cash equivalents at end of period $ 73,698 44,689
==========================================================================================================
Supplemental disclosure of cash flow information:
Cash paid during the period for:
Interest $ 197 181
Income taxes $ 6,779 75,713
==========================================================================================================
</TABLE>
See Notes to Unaudited Condensed Consolidated Financial Statements.
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<PAGE>
TIDEWATER INC.
NOTES TO UNAUDITED CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
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(1) Interim Financial Statements
The consolidated financial information for the interim periods presented herein
has not been audited by independent accountants, but in the opinion of
management, all adjustments (consisting only of normal recurring adjustments)
necessary for a fair presentation of the condensed consolidated balance sheets
and the condensed consolidated statements of earnings and cash flows at the
dates and for the periods indicated have been made. Results of operations for
interim periods are not necessarily indicative of results of operations for the
respective full years.
(2) Stockholders' Equity
At June 30, 1999 and March 31, 1999, 4,960,866 and 4,985,860 shares,
respectively, of common stock were held in a grantor stock ownership plan trust
for the benefit of stock-based employee benefits programs. These shares are not
included in common shares outstanding for earnings per share calculations and
transactions between the company and the trust, including dividends paid on the
company's common stock, are eliminated in consolidating the accounts of the
trust and the company.
(3) Income Taxes
Income tax expense for interim periods is based on estimates of the effective
tax rate for the entire fiscal year. The effective tax rate applicable to pre-
tax earnings was 32% and 34.5% for the quarters ended June 30, 1999 and 1998,
respectively.
(4) Year 2000
Disclosure concerning year 2000 (Y2K) issues facing the company is included as
part of management's discussion and analysis at page 13 of this report.
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<PAGE>
INDEPENDENT ACCOUNTANTS' REVIEW REPORT
--------------------------------------
The Board of Directors and Shareholders
Tidewater Inc.
We have reviewed the accompanying condensed consolidated balance sheet of
Tidewater Inc. and subsidiaries as of June 30, 1999 and the related condensed
consolidated statements of earnings and cash flows for the three-month periods
ended June 30, 1999 and 1998. These financial statements are the responsibility
of the company's management.
We conducted our reviews in accordance with standards established by the
American Institute of Certified Public Accountants. A review of interim
financial information consists principally of applying analytical procedures to
financial data, and making inquiries of persons responsible for financial and
accounting matters. It is substantially less in scope than an audit conducted in
accordance with generally accepted auditing standards, which will be performed
for the full year with the objective of expressing an opinion regarding the
financial statements taken as a whole. Accordingly, we do not express such an
opinion.
Based on our reviews, we are not aware of any material modifications that should
be made to the accompanying condensed consolidated financial statements referred
to above for them to be in conformity with generally accepted accounting
principles.
We have previously audited, in accordance with generally accepted auditing
standards, the consolidated balance sheet of Tidewater Inc. and subsidiaries as
of March 31, 1999, and the related consolidated statements of earnings,
stockholders' equity and cash flows for the year then ended, not presented
herein, and in our report dated April 27, 1999, we expressed an unqualified
opinion on those consolidated financial statements. In our opinion the
information set forth in the accompanying condensed consolidated balance sheet
as of March 31, 1999, is fairly stated, in all material respects, in relation to
the consolidated balance sheet from which it has been derived.
Ernst & Young LLP
New Orleans, Louisiana
July 19, 1999
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<PAGE>
Item 2. Management's Discussion and Analysis
------------------------------------
The company provides services to the international offshore energy industry
through the operation of a diversified fleet of marine service vessels.
Revenues, net earnings and cash flows from operations are dependent upon the
activity level of the vessel fleet which is ultimately dependent upon oil and
natural gas prices which, in turn, are determined by the supply/demand
relationship for oil and natural gas. The following discussion should be read in
conjunction with the unaudited condensed consolidated financial statements and
related disclosures.
In accordance with the safe harbor provisions of the Private Securities
Litigation Reform Act of 1995, the company notes that certain statements set
forth in this Quarterly Report on Form 10-Q which provide other than historical
information and which are forward looking, involve risks and uncertainties that
may impact the company's actual results of operations. The company faces many
risks and uncertainties, many of which are beyond the control of the company,
including: fluctuations in oil and gas prices; changes in capital spending by
customers in the energy industry for exploration, development and production;
unsettled political conditions, civil unrest and governmental actions,
especially in higher risk countries of operations; foreign currency controls;
and environmental and labor laws. Readers should consider all of these risk
factors as well as other information contained in this report.
MARINE OPERATIONS
- -----------------
Offshore service vessels provide a diverse range of services to the energy
industry. Fleet size, utilization and vessel day rates primarily determine the
amount of revenues and operating profit because operating costs and depreciation
do not change proportionally when revenue changes. Operating costs primarily
consist of crew costs, repair and maintenance, insurance, fuel, lube oil and
supplies. Fleet size and utilization are the major factors which affect crew
costs. The timing and amount of repair and maintenance costs are influenced by
vessel age and scheduled drydockings to satisfy safety and inspection
requirements mandated by regulatory agencies. Whenever possible, vessel
drydockings are done during seasonally slow periods to minimize the impact on
vessel operations and are only done if economically justified, given the
vessel's age and physical condition.
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<PAGE>
The following table compares revenues and operating expenses (excluding general
and administrative expense and depreciation expense) for the company's vessel
fleet for the quarters ended June 30 and March 31. Vessel revenues and operating
costs relate to vessels owned and operated by the company while other marine
services relate to third-party activities of the company's shipyards, brokered
vessels and other miscellaneous marine-related activities.
<TABLE>
<CAPTION>
Quarter
Quarter Ended Ended
June 30, March 31,
---------------------
(in thousands) 1999 1998 1999
- -------------------------------------------------------------------------------------
<S> <C> <C> <C>
Revenues:
Vessel revenues:
United States $ 32,758 110,009 43,631
International 115,519 157,624 139,479
- -------------------------------------------------------------------------------------
148,277 267,633 183,110
Other marine revenues 6,253 17,244 13,786
- -------------------------------------------------------------------------------------
$154,530 284,877 196,896
=====================================================================================
Operating costs:
Vessel operating costs:
Crew costs $ 53,409 67,929 60,082
Repair and maintenance 17,062 43,126 25,771
Insurance 5,297 5,833 5,678
Fuel, lube and supplies 6,984 9,997 7,360
Other 9,140 9,184 9,950
- -------------------------------------------------------------------------------------
91,892 136,069 108,841
Cost of other marine revenues 4,355 13,657 10,322
- -------------------------------------------------------------------------------------
$ 96,247 149,726 119,163
=====================================================================================
</TABLE>
Marine support services are conducted worldwide with assets that are highly
mobile. Revenues are principally derived from offshore service vessels, which
regularly and routinely move from one operating area to another, often to and
from offshore operating areas in different continents. Because of this asset
mobility, revenues and long-lived assets attributable to the company's
international marine operations in any one country are not "material" as that
term is defined by SFAS No. 131.
As a result of the uncertainty of certain customers to make payment of vessel
charter hire, the company has deferred the recognition of approximately $8.1
million of billings as of June 30, 1999 ($9.7 million of billings as of March
31, 1999), which would otherwise have been recognized as revenue. The company
will recognize the amounts as revenue when the uncertainty has been reduced.
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<PAGE>
Marine operating profit and other components of earnings before income taxes for
the quarters ended June 30 and March 31 consists of the following:
<TABLE>
<CAPTION>
Quarter
Quarter Ended Ended
June 30, March 31,
-----------------
(in thousands) 1999 1998 1999
- -----------------------------------------------------------------------------------
<S> <C> <C> <C>
Vessel activity:
United States $ (397) 53,487 965
International 21,047 39,052 39,025
- -----------------------------------------------------------------------------------
20,650 92,539 39,990
Gain (loss) on sales of assets 2,357 1,653 (4,799)
Other marine services 1,664 3,392 3,321
- -----------------------------------------------------------------------------------
Operating profit $24,671 97,584 38,512
- -----------------------------------------------------------------------------------
Equity in net earnings of unconsolidated companies 1,986 1,762 2,228
Interest and other debt costs (126) (460) (395)
Corporate general and administrative (2,945) (3,378) (2,916)
Other income 623 327 1,085
- -----------------------------------------------------------------------------------
Earnings before income taxes $24,209 95,835 38,514
===================================================================================
</TABLE>
Current quarter operating profit decreased significantly from the comparative
amount in fiscal year 1999 due to declines in utilization, average day rates and
active vessels for the worldwide fleet. Declines in revenues were somewhat
offset by reductions in vessel operating costs for the worldwide fleet.
Declines in utilization and average day rates are directly related to the
current oil industry downturn. This downturn in activity and spending in the
oil industry commenced with the drop in the price of oil in the fall of 1997 due
primarily to worldwide oil surpluses. Cutbacks in customer drilling programs
resulted, negatively affecting the U.S. Gulf of Mexico vessel market first as
the duration of vessel contracts in this region normally range from one to three
months. The number of working drilling rigs in the U.S. Gulf of Mexico declined
steadily throughout fiscal year 1999 and, while oil prices have been trending
upwards since the beginning of this quarter, the number of active drilling rigs
has remained at a low level during the current quarter.
U.S.-based vessel revenues for the current quarter have decreased by
approximately 70% as compared to the same period in fiscal year 1999 resulting
in a small operating loss for the current quarter. Average utilization and
average day rates for the U.S.-based towing-supply/supply vessels for the
current quarter have decreased by approximately 45% and 52%, respectively, as
compared to the quarter ended June 30, 1998. Weak domestic activity is expected
to continue for some time with the decline in the number of working drilling
rigs. In addition the expected delivery of even more newly-constructed supply
vessels to various industry competitors may create an even further imbalance
and/or delay a recovery in the Gulf of Mexico supply vessel market thereby
putting continued downward pressure on vessel utilization and day rates.
Current quarter international-based vessel operating profit decreased
approximately 46% as compared to the same quarter in fiscal year 1999 as
international-based vessel utilization and day rates showed their most
significant quarterly decrease thus far in the current oil industry downturn.
International activity has not yet been as dramatically affected by the downturn
as the U.S. Gulf of Mexico due primarily to the longer-term nature of
international vessel contracts. However, the prolonged drop in oil prices has
resulted in curtailments of customer projects, thus lowering vessel demand
which will likely continue for the remainder of fiscal year 2000.
In response to the oil industry downturn the following actions were taken during
the previous quarter. The company began stacking and removing from its actively
marketed fleet those vessels that cannot find gainful employment. Drydockings
associated with the stacked vessels have been
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<PAGE>
deferred thus reducing repair and maintenance costs in the current quarter
versus the same quarter in fiscal year 1999 and the preceding quarter.
Reductions in crew personnel were also made and may continue throughout fiscal
year 2000 as necessary. These personnel reductions lowered crew costs in the
current quarter versus the same quarter in fiscal year 1999 and the preceding
quarter.
Current quarter operating profit decreased significantly as compared to the
preceding quarter's amount due to continued declines in utilization and average
day rates for the worldwide fleet. Declines in revenues were offset somewhat by
a decrease in operating expenses for the worldwide fleet. Declines in worldwide
utilization and average day rates were expected as the oil industry continues to
curtail spending during this current downturn. International-based vessel
operating profit for the current quarter declined approximately 46% versus the
preceding quarter's amount. U.S.-based vessels incurred a small operating loss
for the current quarter as compared to an operating profit of just under a
million dollars in the preceding quarter. Crew costs and repair and maintenance
costs decreased as the result of cost-saving measures as described earlier.
Included in gain (loss) on sales of assets in the previous quarter is a
writedown of $7.8 million to reduce the carrying value of certain vessels. The
writedown resulted from a review of the recoverability of the values of certain
vessels. The review was performed due to industry conditions and having stacked
and withdrawn from the active fleet several vessels at March 31, 1999.
Vessel utilization is determined primarily by market conditions and to a lesser
extent by drydocking requirements. Vessel day rates are determined by the
demand created through the level of offshore exploration, development and
production spending by energy companies relative to the supply of offshore
service vessels. Suitability of equipment and the degree of service provided
also influence vessel day rates. The following tables compare day-based
utilization percentages and average day rates by vessel class and in total for
the quarters ended June 30 and March 31:
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<PAGE>
<TABLE>
<CAPTION>
Quarter
Quarter Ended Ended
June 30, March 31,
---------------
1999 1998 1999
- -------------------------------------------------------------------
<S> <C> <C> <C>
UTILIZATION:
- ------------
Domestic-based fleet:
--------------------
Towing-supply/supply 47.2% 85.4 60.1
Crew/utility 77.3 88.8 84.1
Offshore tugs 38.9 61.1 38.1
Other 46.6 45.7 35.2
Total 49.4% 79.9 58.3
International-based fleet :
-------------------------
Towing-supply/supply 71.9% 86.3 79.2
Crew/utility 89.2 80.2 89.6
Offshore tugs 65.4 76.1 70.1
Safety/standby 77.5 80.7 75.2
Other 52.1 67.9 72.1
Total 72.0% 82.2 78.5
Worldwide fleet:
----------------
Towing-supply/supply 62.6% 85.9 72.2
Crew/utility 85.2 83.6 87.7
Offshore tugs 54.1 69.6 56.8
Safety/standby 77.5 80.7 75.2
Other 50.9 62.7 63.5
Total 64.1% 81.4 71.5
===================================================================
AVERAGE VESSEL DAY RATES:
- -------------------------
Domestic-based fleet:
---------------------
Towing-supply/supply $3,734 7,709 4,043
Crew/utility 1,806 2,280 2,014
Offshore tugs 6,028 7,649 7,311
Other 1,345 3,449 2,006
Total 3,572 6,658 3,968
International-based fleet:
--------------------------
Towing-supply/supply $5,698 6,523 6,229
Crew/utility 2,250 2,447 2,399
Offshore tugs 4,048 4,273 4,411
Safety/standby 6,094 6,541 6,014
Other 1,265 876 1,250
Total $4,676 5,330 5,024
Worldwide fleet:
----------------
Towing-supply/supply $5,143 6,975 5,555
Crew/utility 2,114 2,376 2,270
Offshore tugs 4,652 5,558 5,218
Safety/standby 6,094 6,541 6,014
Other 1,282 1,313 1,347
Total $4,377 5,806 4,725
===================================================================
</TABLE>
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<PAGE>
The following table compares the average number of vessels by class and
geographic distribution for the quarters ended June 30 and March 31:
<TABLE>
<CAPTION>
Quarter
Quarter Ended Ended
June 30, March 31,
----------------
1999 1998 1999
- ---------------------------------------------------------------------------------------------
<S> <C> <C> <C>
Domestic-based fleet:
- ---------------------
Towing-supply/supply 131 142 134
Crew/utility 26 35 28
Offshore tugs 37 40 37
Other 10 10 10
- ---------------------------------------------------------------------------------------------
Total 204 227 209
- ---------------------------------------------------------------------------------------------
International-based fleet:
- --------------------------
Towing-supply/supply 219 228 228
Crew/utility 50 54 53
Offshore tugs 50 53 53
Safety/standby 25 29 26
Other 33 32 33
- ---------------------------------------------------------------------------------------------
Total 377 396 393
- ---------------------------------------------------------------------------------------------
Owned or chartered vessels included in marine revenues 581 623 602
Vessels held for sale 50 26 40
Joint-venture and other 46 48 47
- ---------------------------------------------------------------------------------------------
Total 677 697 689
=============================================================================================
</TABLE>
In July 1999 the company acquired six new-build vessels from an industry
competitor for an aggregate price of approximately $22 million. Also in July
1999 the company sold all of its safety/standby vessels for approximately $40
million.
Consolidated general and administrative expenses for the quarters ended June 30
and March 31 consist of the following components:
<TABLE>
<CAPTION>
Quarter
Quarter Ended Ended
June 30, March 31,
-----------------
(in thousands) 1999 1998 1999
- ---------------------------------------------------------------------------------------------
<S> <C> <C> <C>
Personnel $10,133 11,125 10,515
Office and property 2,899 3,309 3,361
Sales and marketing 1,110 1,471 1,295
Professional services 1,232 1,625 1,533
Other 1,572 1,211 (447)
- ---------------------------------------------------------------------------------------------
$16,946 18,741 16,257
=============================================================================================
</TABLE>
During the quarter ended March 31, 1999 the company reversed approximately
$966,000 of previously recorded bad debt expense when payment was received for
an overdue receivable from one customer.
LIQUIDITY, CAPITAL RESOURCES AND OTHER MATTERS
- ----------------------------------------------
The company's current ratio, level of working capital and amount of cash flows
from continuing operations for any year are directly related to fleet activity
and vessel day rates. Fleet activity and vessel day rates are ultimately
determined by the supply/demand relationship for oil and natural gas.
Variations from year-to-year in these items are primarily the result of market
conditions. Cash from
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<PAGE>
ongoing operations in combination with available lines of credit provide the
company, in management's opinion, with adequate resources to satisfy present
financing requirements. At June 30, 1999, all of the company's $200 million
revolving line of credit was available for future financing needs. Continued
payment of dividends, currently $.15 per quarter per common share, is subject to
declaration by the Board of Directors.
Excluding the tax payments related to the sale of Compression operations
included in the three-months ended June 30, 1998, investing activities for the
quarters ended June 30, 1999 and 1998 were comparable with no significant
activity. Financing activities for the quarter ended June 30, 1999 included $8.3
million of cash for quarterly cash dividends of $.15 per share.
INFLATION AND CURRENCY FLUCTUATIONS
- -----------------------------------
Because of its significant international 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 are generally 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, development and production spending by energy exploration and
production companies. As this spending increases, prices of goods and services
used by the energy industry and the energy services industry will increase.
Future increases in vessel day rates may mitigate the effects on 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. 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, has
not had, nor is expected to have, a material effect on the company.
YEAR 2000
- ---------
The Year 2000 (Y2K) issue is the result of computer programs written using two
digits rather than four to define the applicable year. In response to the Y2K
issue, the company began a program in fiscal 1997 designed to identify, assess
and address significant Y2K issues in its information technology (IT) systems
and non-IT systems. As of June 30, 1999, the company believes that it is on
schedule to successfully implement any required systems and equipment
modifications that might be necessary to make the company's critical systems Y2K
compliant before December 31, 1999.
The company's critical IT systems are comprised primarily of the company's
mainframe computer and the software programs used on the mainframe, including
general ledger accounting and financial reporting software programs and related
application modules, personnel and payroll systems, and an insurance claims and
accounting system. The assessment of the company's IT systems found that some of
the IT systems were not Y2K compliant. Approximately 90% of the changes
necessary to make these systems Y2K compliant have been completed, with the
remaining changes expected to be completed well in advance of year end. Because
many of the company's computer systems have been upgraded or replaced in recent
years as part of the company's ongoing upgrade program, specific Y2K compliance
costs have been insignificant to date (believed to be less than $100,000).
Remaining compliance costs related to the IT systems are also expected to be
insignificant (probably
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<PAGE>
less than $100,000) because the company will continue to utilize existing
personnel resources to assist in the implementation of its Y2K compliance
initiative.
Non-IT systems are comprised primarily of computer-controlled equipment and
electronic devices, including equipment with embedded microprocessors that are
used to operate equipment on the company's vessels. Telephone systems and other
office-based electronic equipment systems are also being considered in the
assessment of non-IT systems. The company has substantially completed the
process of identifying the components that are likely to have a Y2K problem and
is in the process of communicating with the appropriate vendors to assess what,
if any, changes are necessary to make the component Y2K compliant. The company
believes that this assessment will be completed well in advance of December 31,
1999 and does not expect the costs of any required modifications or upgrades to
be material with respect to the company's results of operations and financial
position.
The company has contacted its key vendors and financial services providers to
assess their progress with their own Y2K issues and to anticipate potential
risks associated with those third parties. Although there is currently no
indication that these parties will not achieve their Y2K compliance plans, there
can be no guarantee that the systems of other companies with whom the company
transacts business will be timely converted. Additionally, there can be no
guarantee that the company will not experience Y2K problems. Despite efforts to
address all significant Y2K issues in advance, the company could potentially
experience disruptions to some aspects of its activities or operations,
including, but not limited to, delays in payments to the company from customers
or payments by the company to suppliers and disruptions in shipments of
equipment and supplies required to operate the company's vessels.
Based upon the company's current assessment of its IT systems and non-IT systems
and based upon communications to date with vendors, the company has not
determined a need to develop a contingency plan for Y2K issues. The company will
continue to monitor its decision on contingency planning and such a plan will be
developed if and when it is considered necessary to do so.
Item 3. Quantitative and Qualitative Disclosure About Market Risk
---------------------------------------------------------
No change from 1999 annual report disclosure.
-14-
<PAGE>
PART II. OTHER INFORMATION
Item 6. Exhibits and Reports on Form 8-K
--------------------------------
A. At page 17 of this report is the index for those exhibits required to be
filed as a part of this report.
B. The company did not file any reports during the quarter for which this
report is filed.
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<PAGE>
SIGNATURES
Pursuant to the requirements of the Securities Exchange Act of 1934, Registrant
has duly caused this report to be signed on its behalf by the undersigned
thereunto duly authorized.
TIDEWATER INC.
------------------------------------------------------
(Registrant)
Date: July 20, 1999 /s/ William C. O'Malley
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William C. O'Malley
Chairman of the Board, President and
Chief Executive Officer
Date: July 20, 1999 /s/ Ken C. Tamblyn
------------------------------------------------------
Ken C. Tamblyn
Executive Vice President and
Chief Financial Officer (Principal Accounting Officer)
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<PAGE>
EXHIBIT INDEX
Exhibit
Number
- ------
3 Amended and Restated Bylaws Dated May 20, 1999
15 Letter re Unaudited Interim Financial Information
27 Financial Data Schedule
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<PAGE>
EXHIBIT 3
TIDEWATER INC.
AMENDED AND RESTATED BYLAWS
(amended and restated through May 20, 1999)
ARTICLE I
OFFICES
Section 1. The principal office shall be in the City of Wilmington, County
of New Castle, State of Delaware, and the name of the resident agent in charge
thereof is The Corporation Trust Company.
Section 2. The corporation may also have offices at such other places both
within and without the State of Delaware as the Board of Directors may from time
to time determine or the business of the corporation may require.
ARTICLE II
MEETING OF STOCKHOLDERS
Section 1. Meetings of the stockholders for the election of directors
shall be held at such time and place either within or without the State of
Delaware, as shall be designated from time to time by the Board of Directors and
stated in the notice of the meeting or in a duly executed waiver of notice
thereof.
Section 2. The Annual Meeting of Stockholders for the election of
Directors and such other business as may properly be brought before the meeting
shall be held on such date and at such time and place or places, within or
without the State of Delaware, as shall be designated from time to time by the
Board of Directors and stated in the notice of the meeting.
Section 3. Written notice of the annual meeting shall be served upon or
mailed to each stockholder entitled to vote thereat at such address as appears
on the books of the corporation, at least ten days prior to the meeting.
Section 4. At least ten days before every election of directors, a
complete list of the stockholders entitled to vote at said election, arranged in
alphabetical order, with the residence of each and the number of voting shares
held by each, shall be prepared by the Secretary. Such list shall be open at
the place where the election is to be held for said ten days, to the examination
during ordinary business hours of any stockholder for any purpose germane to the
meeting, and shall be produced and kept at the time and place of election during
the whole time thereof, and subject to the inspection of any stockholder who may
be present.
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Section 5. Special meetings of the stockholders, for any purpose or
purposes, unless otherwise prescribed by statute or by the certificate of
incorporation, may be called by the Chairman of the Board and shall be called by
the Chairman of the Board or Secretary at the request in writing of a majority
of the Board of Directors. Such request shall state the purpose or purposes of
the proposed meeting.
Section 6. Written notice of a special meeting of stockholders, stating
the time and place and object thereof, shall be served upon or mailed to each
stockholder entitled to vote thereat at such address as appears on the books of
the corporation, at least ten days before such meeting.
Section 7. Business transacted at all special meetings shall be confined
to the objects stated in the call.
Section 8. The holders of a majority of the stock issued and outstanding
and entitled to vote thereat, present in person or represented by proxy, shall
be requisite and shall constitute a quorum at all meetings of the stockholders
for the transaction of business except as otherwise provided by statute, by the
certificate of incorporation or by these bylaws. If, however, such quorum shall
not be present or represented at any meeting of the stockholders, the
stockholders entitled to vote thereat, present in person or represented by
proxy, shall have power to adjourn the meeting from time to time, without notice
other than announcement at the meeting, until a quorum shall be present or
represented. At such adjourned meeting at which a quorum shall be present or
represented any business may be transacted which might have been transacted at
the meeting as originally notified.
Section 9. When a quorum is present at any meeting, the vote of the
holders of a majority of the stock having voting power present in person or
represented by proxy and entitled to vote thereat shall decide any question
brought before such meeting, unless the question is one upon which by express
provision of the statutes or of the certificate of incorporation or of these
bylaws, a different vote is required in which case such express provision shall
govern and control the decision of such question.
Section 10. At any meeting of the stockholders, every stockholder having
the right to vote may vote in person or by proxy appointed in the manner
described in subsections (c)(1) and (c)(2) of Section 212 of the Delaware
General Corporation Laws. The validity and use of any authorized proxy shall be
limited to the meeting for which given.
Each holder of common stock represented at a meeting of stockholders shall
be entitled to one vote for each share of common stock held of record on all
matters on which stockholders generally are entitled to vote. Except where the
transfer books of the corporation shall have been closed or a date shall have
been fixed as a record date for the determination of its stockholders entitled
to vote, no share of stock shall be voted on at any election of directors which
shall have been transferred on the books of the corporation within twenty days
next preceding such election of directors.
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Section 11. At an annual meeting of the stockholders, only such business
shall be conducted as shall have been properly brought before the meeting. To
be properly brought before an annual meeting, business must be (A) specified in
the notice of the meeting (or any supplement thereto) given by or at the
direction of the Board of Directors, (B) otherwise properly brought before the
meeting by or at the direction the Board of Directors, or (C) otherwise properly
brought before the meeting by a stockholder. For business to be properly
brought before an annual meeting by a stockholder, if such business relates to
the election of directors of the corporation, the procedures in Article III,
Section 13 must be complied with. If such business relates to any other matter,
the stockholder must have given timely notice thereof in writing to the
Secretary. To be timely, a stockholders notice must be delivered or mailed and
received at the principal executive offices of the corporation, not less than 75
days nor more than 100 days prior to the anniversary date of the immediately
preceding annual meeting of stockholders of the corporation; provided, however,
that in the event that the annual meeting is called for a date (including any
change in a date designated by the Board of Directors pursuant to Section 2 of
this Article II) more than 50 days prior to such anniversary date, notice by the
stockholder in order to be timely must be so received not later than the close
of business on the 10th day following the day on which such notice of the date
of the meeting was mailed or public disclosure of the date of the meeting was
made, whichever first occurs. A stockholders notice to the Secretary shall set
forth as to each matter the stockholder proposes to bring before the annual
meeting (A) a brief description of the business desired to be brought before the
annual meeting and the reasons for conducting such business at the annual
meeting, (B) the name and address, as they appear on the corporations books, of
the stockholder proposing such business, (C) the class and number of shares of
the corporation which are beneficially owned by the stockholder, and (D) any
material interest of the stockholder in such business. Notwithstanding anything
in the bylaws to the contrary, no business shall be conducted at any annual
meeting except in accordance with the procedures set forth in this Section 11
and except that any stockholder proposal which complies with Rule 14a-8 of the
proxy rules (or any successor provisions) promulgated under the Securities and
Exchange Act of 1934, as amended, and is to be included in the corporations
proxy statement for an annual meeting of the stockholders shall be deemed to
comply with the requirements of this Section 11.
The chairman of the meeting shall, if the facts warrant, determine and
declare to the meeting that business was not properly brought before the meeting
in accordance with the provisions of this Section 11, and if he should so
determine, the chairman shall so declare to the meeting that any such business
not properly brought before the meeting shall not be transacted.
ARTICLE III
BOARD OF DIRECTORS
NUMBER AND CLASSIFICATION OF DIRECTORS
Section 1. The number of directors of the corporation (exclusive of
directors who
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may in certain events be elected by the holders of outstanding Preferred Stock
voting separately as a class) shall be not less than five (5) or more than ten
(10), the exact number of directors to be determined from time to time by
resolution adopted by a majority of the entire Board. As used in this Article,
"entire Board" means the total number of directors which the corporation would
have if there were no vacancies. In the event that the Board is increased by
such a resolution, the vacancy or vacancies so resulting shall be filled by a
vote of a majority of the directors then in office. No decrease in the Board
shall shorten the term of any incumbent director. Directors need not be
stockholders.
Section 2. Commencing with the 1970 election of directors, the Board of
Directors shall be divided into three classes as nearly equal in number as may
be, with the term of office of one class expiring each year. At the annual
meeting of stockholders in 1970, directors of the first class shall be elected
to hold office for a term expiring at the next succeeding annual meeting;
directors of the second class shall be elected to hold office for a term
expiring at the second succeeding annual meeting; and directors of the third
class shall be elected to hold office for a term expiring at the third
succeeding annual meeting. If the number of directors is changed, any increase
or decrease shall be apportioned among the classes so as to maintain the number
of directors in each class as nearly equal as possible, and any additional
director of any class elected to fill a vacancy resulting from an increase in
such class shall hold office for a term that shall coincide with the remaining
term of that class. Any vacancy on the Board of Directors that results from an
increase in the number of directors may be filled by a majority of the Board of
Directors then in office, provided that a quorum is present, and any other
vacancy occurring in the Board of Directors may be filled by a majority of the
Directors then in office, even if less than a quorum, or by a sole remaining
director. Any director elected to fill a vacancy not resulting from an increase
in the number of directors shall have the same remaining term as that of his
predecessor. Notwithstanding the foregoing, whenever the holders of any
outstanding shares of Preferred Stock shall be entitled, voting separately as a
class, to elect directors, the terms of all directors elected by such holder
shall expire at the next succeeding annual meeting of stockholders. Subject to
the foregoing, at each annual meeting of stockholders, the successors to the
class of directors whose term shall then expire shall be elected to hold office
for a term expiring at the third succeeding annual meeting.
Section 3. The property and business of the corporation shall be managed
by or under the direction of its Board of Directors which may exercise all such
powers of the corporation and do all such lawful acts and things as are not by
statute or by the certificate of incorporation or by these bylaws directed or
required to be exercised or done by the stockholders.
MEETINGS OF THE BOARD
Section 4. The directors of the corporation may hold their meetings, both
regular and special, either within or without the State of Delaware.
Section 5. Immediately following each Annual Meeting of Stockholders the
Board of Directors shall hold a regular meeting for the purpose of organization,
election of officers and the transaction of other business, and notice to the
newly elected directors of such meeting shall not
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be necessary in order to legally constitute the meeting so long as a quorum
shall be present, or the directors may meet at such place and time as shall be
fixed by the consent in writing of all the directors.
Section 6. Regular meetings of the Board may be held without notice at
such time and place as shall from time to time be determined by the Board.
Section 7. Special meetings of the Board of Directors may be called by the
Chairman of the Board, the President, or any majority of the directors then in
office. Notice thereof stating the place, date and hour of the meeting shall be
given to each director either by mail not less than forty-eight (48) hours
before the date of the meeting, by telephone or telegram on twenty-four (24)
hours' notice, or on such shorter notice as the person or persons calling such
meeting may deem necessary or appropriate in the circumstances. Meetings may be
held at any time without notice if all the directors are present or if all those
not present waive such notice in accordance with Section 2 of Article IV of
these bylaws.
Section 8. A majority of the Board of Directors shall constitute a quorum
for the transaction of business and the act of a majority of the directors
present at any meeting at which there is a quorum shall be the act of the Board
of Directors, except as may be otherwise specifically provided by statute or by
the certificate of incorporation or by these bylaws. If a quorum shall not be
present at any meeting of directors, the directors present thereat may adjourn
the meeting from time to time without notice other than announcement at the
meeting, until a quorum shall be present.
COMMITTEES OF DIRECTORS
Section 9. The Board of Directors may, by resolution and passed by a
majority of the entire Board, designate one or more committees, each committee
to consist of two or more of the directors of the corporation, which, to the
extent provided in said resolution, shall have and may exercise the powers of
the Board of Directors in the management of the business and affairs of the
corporation, and may have power to authorize the seal of the corporation to be
affixed to all papers which may require it. Such committee or committees shall
have such name or names as may be determined from time to time by resolution
adopted by the Board of Directors. In the absence or disqualification of a
member of a committee, the member or members thereof present at any meeting and
not disqualified from voting whether or not he or they constitute a quorum, may
unanimously appoint another member of the Board of Directors to act at the
meeting in the place of such absent or disqualified member.
Section 10. No committee of the Board of Directors not in existence on
June 19, 1991 may be created if the powers or responsibilities of such committee
would diminish, duplicate, contravene or be otherwise inconsistent with the
powers and responsibilities of any committee in existence on such date without
the affirmative vote of 80% of the Board of Directors. Notwithstanding any
other provision of these Bylaws, this Section 10 of Article III may not be
amended without the affirmative vote of 80% of the Board of Directors.
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Section 11. The committees shall keep regular minutes of their proceedings
and report the same to the Board when required.
COMPENSATION OF DIRECTORS
Section 12. Directors and members of committees may receive such
compensation, if any, for their services, and such reimbursement for expenses,
as may be fixed or determined by the Board of Directors. Nothing herein
contained shall be construed to preclude any director from serving the
corporation in any other capacity as an officer, agent, employee, or otherwise
and receiving compensation therefor.
DIRECTORS EMERITUS
Section 13. In order to publicly recognize distinguished service to or on
behalf of the corporation, one or more directors may, pursuant to a majority
vote of stockholders or a majority vote of the Board of Directors, be elected to
serve as Director Emeritus. Candidates for designation of the title Director
Emeritus shall be selected from among former Board members upon retirement or
other separation from active service to the corporation. Each Director Emeritus
elected shall be publicly honored by being listed or otherwise identified in the
corporations annual report to stockholders for the year in which such election
shall occur and thereafter at the pleasure of the Board of Directors. Each
Director Emeritus shall continue to serve the corporation at the discretion of
the Board of Directors. They shall be entitled to receive notice of and to
attend regular meetings of the Board of Directors but shall not be entitled to
vote thereat and shall not be deemed to be a Director of the corporation for any
purposes whatsoever under any applicable law or under the bylaws of the
corporation. There shall be paid to each Director Emeritus a regular meeting
fee for each Board of Directors meeting attended by such Director Emeritus, plus
reimbursement for direct expenses actually incurred by them in attending such
meetings.
NOMINATION OF DIRECTORS
Section 14. Only persons who are nominated in accordance with the
following procedures shall be eligible for election as directors. Nominations
for election to the Board of Directors of the corporation at a meeting of
stockholders may be made by the Board of Directors or by any stockholder of the
corporation entitled to vote for the election of directors at such meeting who
complies with the notice procedures set forth in this Section 13. Such
nominations, other than those made by or on behalf of the Board of Directors,
shall be made by notice in writing delivered or mailed by first class United
States mail, postage prepaid, to the Secretary and received not less than 75
days nor more than 100 days prior to the anniversary date of the immediately
preceding the annual meeting of stockholders of the corporation; provided,
however, that in the event that the meeting is called for a date (including any
change in a date designated by the Board pursuant to Section 2 of Article II)
more than 50 days prior to such anniversary date, notice by the stockholder in
order to be timely must be so received not later than the close of business on
the 10th day following the day on which such notice of the date of the meeting
was mailed or public disclosure of the date of
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the meeting was made, whichever first occurs. Such notice shall set forth (A) as
to each proposed nominee (i) the name, age, business addressed, and, if known,
residence address of each such nominee, (ii) the principal occupation or
employment of each such nominee, (iii) the number of shares of stock of the
corporation which are beneficially owned by each such nominee, and (iv) any
other information concerning the nominee that must be disclosed as to nominees
in proxy solicitations pursuant to Regulation 14A under the Securities Exchange
Act of 1934, as amended (including such person's written consent to be named as
a nominee and to serve as a director if elected); and (B) as to the stockholder
giving the notice (i) the name and address, as they appear on the corporation's
books, of such stockholder, and (ii) the class and number of shares of the
corporation which are beneficially owned by such stockholder. The corporation
may require any proposed nominee to furnish such other information as may
reasonably be required by the corporation to determine the eligibility of such
proposed nominee to serve as a director of the corporation.
The chairman of the meeting may, if the facts warrant, determine and
declare to the meeting that a nomination was not made in accordance with the
foregoing procedure, and if he should so determine, he shall so declare to the
meeting and the defective nomination shall be disregarded.
ARTICLE IV
NOTICES
Section 1. Whenever under the provisions of the statutes or of the
certificate of incorporation or of these bylaws, notice is required to be given
to any director or stockholder, it shall not be construed to mean personal
notice, but such notice may be given in writing, by mail, addressed to such
director or stockholder at such address as appears on the books of the
corporation, and such notice shall be deemed to be given at the time when the
same shall be thus mailed. Notice may also be given personally or by telegram,
telex or cable and such notice shall be deemed to be given at the time of
receipt thereof if given personally and at the time of transmission thereof if
given by telegram, telex or cable.
Section 2. Whenever any notice is required to be given under the
provisions of the statutes or of the certificate of incorporation, or of these
bylaws, a waiver thereof in writing signed by the person or persons entitled to
said notice, whether before or after the time stated therein, shall be deemed
equivalent thereto.
ARTICLE V
OFFICERS
Section 1. The officers of the corporation shall be chosen by the
Directors and shall be a Chief Executive Officer, President, one or more Vice
Presidents, Secretary, Treasurer, and
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Controller. The Board of Directors may also choose a Chairman of the Board whose
duties shall be fixed by the Board of Directors from time to time. The Chairman
of the Board and Chief Executive Officer shall be chosen from the members of the
Board of Directors, but none of the other officers need be a member of the
Board. Should the Board of Directors choose more than one Vice President, it may
establish separate classifications of Vice Presidents and distinguish relative
ranking among the classifications so chosen. The Board may also choose one or
more Assistant Secretaries and Assistant Treasurers. Two or more offices may be
held by the same person.
Section 2. The Board of Directors at its first meeting after each annual
meeting of stockholders shall choose the officers of the Corporation.
Section 3. The Board may appoint such other officers and agents as it
shall deem necessary, who shall hold their offices for such terms and shall
exercise such powers and perform such duties as shall be determined from time to
time by the Board.
Section 4. The salaries of all officers and agents of the corporation
shall be fixed by the Board of Directors or by such persons as the Board of
Directors may designate.
Section 5. The officers of the corporation shall hold office until their
successors are chosen and qualify in their stead. Any officer elected or
appointed by the Board of Directors may be removed at any time by the
affirmative vote of a majority of the entire Board of Directors. If the office
of any officer becomes vacant for any reason, the vacancy may be filled by the
Board of Directors.
THE CHIEF EXECUTIVE OFFICER
Section 6. The Chairman of the Board of Directors shall be the Chief
Executive Officer of the Corporation; he shall preside at all meetings of the
stockholders and directors, shall be ex officio member of all standing
committees, shall have general and active management of the business of the
corporation, and shall see that all orders and resolutions of the Board are
carried into effect.
Section 7. He shall execute bonds, mortgages and other contracts requiring
a seal, under the seal of the corporation, except where required or permitted by
law to be otherwise signed and executed and except where the signing and
execution thereof shall be expressly delegated by the Board of Directors to some
other officer or agent of the corporation.
PRESIDENT AND VICE PRESIDENT
Section 8. The President and then Vice Presidents, in order of their
classification and then in order of seniority within their classification, at
the direction of the Board of Directors, in case of disability of the Chairman
of the Board, or his absence from the particular place where the act is to be
performed, shall perform the duties and exercise the powers of the Chairman of
the Board, and shall perform such other duties as the Board of Directors shall
prescribe;
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provided, however, that a President or any Vice President who is not
a citizen of the United States shall not perform any of the powers of the
Chairman of the Board.
THE SECRETARY AND ASSISTANT SECRETARIES
Section 9. The Secretary shall attend all sessions of the Board and all
meetings of the stockholders and record all votes and the minutes of all
proceedings in a book to be kept for that purpose and shall perform like duties
for the standing committees when required. He shall give, or cause to be given,
notice of all meetings of the stockholders and special meetings of the Board of
Directors, and shall perform such other duties as may be prescribed by the Board
of Directors or President, under whose supervision he shall be. He shall keep
in safe custody the seal of the corporation, and, when authorized by the Board,
affix the same to any instrument requiring it and, when so affixed, it shall be
attested by his signature or by the signature of the Treasurer or an Assistant
Secretary.
Section 10. The Assistant Secretaries in order of their seniority shall,
in case of disability of the Secretary, or his absence from the particular place
where the act is to be performed, perform the duties and exercise the powers of
the Secretary and shall perform such other duties as the Board of Directors
shall prescribe.
THE TREASURER AND ASSISTANT TREASURER
Section 11. The Treasurer shall have the custody of the corporate funds
and securities and shall keep full and accurate accounts of receipts and
disbursements in books belonging to the corporation and shall deposit all moneys
and other valuable effects in the name and to the credit of the corporation in
such depositories as may be designated by the Board of Directors.
Section 12. He shall disburse the funds of the corporation as may be
ordered by the Board, taking proper vouchers for such disbursements, and shall
render to the President and directors, at the regular meetings of the Board, or
whenever they may require it, an account of all his transactions as Treasurer
and of the financial condition of the corporation.
Section 13. If required by the Board of Directors, he shall give the
corporation a bond (which shall be renewed every six years) in such sum and with
such surety or sureties as shall be satisfactory to the Board for the faithful
performance of the duties of his office and for the restoration to the
corporation, in case of his death, resignation, retirement or removal from
office, of all books, papers, vouchers, money and other property of whatever
kind in his possession or under his control belonging to the corporation.
Section 14. The Assistant Treasurers shall perform such duties as the
Board of Directors shall prescribe.
THE CONTROLLER
Section 15. The Controller shall be responsible for the development and
maintenance
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of the accounting systems used by the corporation and its subsidiaries. The
Controller shall be authorized to implement policies and procedures to ensure
that the corporation and its subsidiaries maintain internal accounting control
systems designed to provide reasonable assurance that the accounting records
accurately reflect business transactions and that such transactions are in
accordance with management's authorization. Additionally, the Controller shall
be responsible for internal and external financial reporting for the corporation
and its subsidiaries and shall perform such other duties as the Board of
Directors shall prescribe.
ARTICLE VI
CERTIFICATE OF STOCK
Section 1. The certificates of stock of the corporation shall be numbered
and shall be entered in the books of the corporation as they are issued. They
shall exhibit the holder's name and number of shares and shall be signed by the
Chief Executive Officer, President or a Vice President and the Treasurer or an
Assistant Treasurer or the Secretary or an Assistant Secretary.
The designations, preferences and relative, participating, optional or
other special rights of each class of stock or series thereof and the
qualifications, limitations or restrictions of such preferences and/or rights
shall be set forth in full or summarized on the face or back of the certificates
which the corporation shall issue to represent such class or series of stock.
Certificates may be issued for partly paid shares and in such case upon the face
or back of the certificates issued to represent any such partly paid shares, the
total amount of the consideration to be paid therefor, and the amount paid
thereon shall be specified.
LOST CERTIFICATES
Section 2. The Board of Directors may direct a new certificate or
certificates theretofore issued by the corporation alleged to have been lost or
destroyed, upon the making of an affidavit of that fact by the person claiming
the certificate of stock to be lost or destroyed. When authorizing such issue
of a new certificate or certificates, the Board of Directors may, in its
discretion and as a condition precedent to the issuance thereof, require the
owner of such lost or destroyed certificate or certificates, or his legal
representative to advertise the same in such manner as it shall require and/or
give the corporation a bond in such sum as it may direct as indemnity against
any claim that may be made against the corporation with respect to the
certificate alleged to have been lost or destroyed.
TRANSFER OF STOCK
Section 3. Except as otherwise provided in the Certificate of
Incorporation of the corporation, upon surrender to the corporation of a
certificate for shares duly endorsed or accompanied by proper evidence of
succession, assignment or authority to transfer, it shall be the duty of the
corporation to issue a new certificate to the person entitled thereto, cancel
the old certificate and record the transaction upon its books.
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CLOSING OF TRANSFER BOOKS
Section 4. The Board of Directors may close the stock transfer books of
the corporation for a period not exceeding fifty days preceding the date of any
meeting of stockholders or the date for payment of any dividend or the date for
the allotment of rights or the date when any change or conversion or exchange of
capital stock shall go into effect or for a period of not exceeding fifty days
in connection with obtaining the consent of stockholders for any purpose. In
lieu of closing the stock transfer books as aforesaid, the Board of Directors
may fix in advance a date, not exceeding fifty days preceding the date of any
meeting of stockholders, or the date of the payment of any dividend, or the date
for the allotment of rights, or the date when any change or conversion or
exchange of capital stock shall go into effect or a date in connection with
obtaining such consent, as a record date for the determination of the
stockholders entitled to notice of, and to vote at, any such meeting, and any
adjournment thereof, or entitled to receive payment of any such dividend, or to
any such allotment of rights, or to exercise the rights in respect of any such
change, conversion or exchange of capital stock, or to give such consent, and in
such case such stockholders and only such stockholders as shall be stockholders
of record on the date so fixed shall be entitled to such notice of, and to vote
at, such meeting and any adjournment thereof, or to receive payment of such
dividend, or to receive such allotment of rights, or to exercise such rights, or
to give such consent, as the case may be, notwithstanding any transfer of any
stock on the books of the corporation after any such record date fixed as
aforesaid.
REGISTERED STOCKHOLDERS
Section 5. The corporation shall be entitled to treat the holder of record
of any share or shares of stock as the holder in fact thereof and, accordingly,
shall not be bound to recognize any equitable or other claim to or interest in
such share or shares on the part of any other person, whether or not it shall
have express or other notice thereof, except as otherwise provided by the laws
of Delaware.
ARTICLE VII
GENERAL PROVISIONS
DIVIDENDS
Section 1. Dividends upon the capital stock of the corporation, subject to
the provisions of the certificate of incorporation, if any, may be declared by
the Board of Directors at any regular or special meeting, pursuant to law.
Dividends may be paid in cash, in property, or in shares of the capital stock,
subject to the provisions of the certificate of incorporation.
Section 2. Before payment of any dividend, there may be set aside out of
any funds of the corporation available for dividends such sum or sums as the
directors from time to time, in their absolute discretion, think proper as a
reserve fund to meet contingencies, or for equalizing
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dividends, or for repairing or maintaining any property of the corporation, or
for such other purpose as the directors shall think conducive to the interest of
the corporation, and the directors may modify or abolish any such reserve in the
manner in which it was created.
ANNUAL STATEMENT
Section 3. The Board of Directors shall present at each annual meeting and
when called for by vote of the stockholders at any special meeting of the
stockholders, a full and clear statement of the business and condition of the
corporation.
CHECKS
Section 4. All checks or demands for money and notes of the corporation
shall be signed by such officer or officers or such other person or persons as
the Board of Directors may from time to time designate.
FISCAL YEAR
Section 5. The fiscal year of the corporation shall be fixed by resolution
of the Board of Directors.
SEAL
Section 6. The corporate seal shall have inscribed thereon the name of the
corporation, the year of its organization and the words "Corporate Seal,
Delaware". Said seal may be used by causing it or a facsimile thereof to be
impressed or affixed or reproduced or otherwise.
ARTICLE VIII
INDEMNIFICATION
Section 1. Subject to Section 3 of this Article VIII, the corporation
shall indemnify any person who was or is a party or is threatened to be made a
party to any threatened, pending or completed action, suit or proceeding,
whether civil, criminal, administrative or investigative (other than an action
by or in the right of the corporation) by reason of the fact that he is or was a
director, director emeritus, officer, employee or agent of the corporation or
any of its subsidiaries, or is or was serving at the request of the corporation
as a director, director emeritus, officer, employee or agent of another
corporation, partnership, joint venture, trust, employee benefit plan or other
enterprise, against expenses (including attorneys' fees), judgments, fines and
amounts paid in settlement actually and reasonably incurred by him in connection
with such action, suit or proceeding if he acted in good faith and in a manner
he reasonably believed to be in or not opposed to the best interests of the
corporation, and, with respect to any criminal action or proceeding, had no
reasonable cause to believe his conduct was unlawful. The termination of any
action, suit or proceeding by judgment, order, settlement, conviction, or upon a
plea of nolo
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contendere or its equivalent, shall not, of itself, create a presumption that
the person did not act in good faith and in a manner which he reasonably
believed to be in or not opposed to the best interests of the corporation, and,
with respect to any criminal action or proceeding, had reasonable cause to
believe that his conduct was unlawful.
Section 2. Subject to Section 3 of this Article VIII, the corporation
shall indemnify any person who was or is a party or is threatened to be made a
party to any threatened, pending or completed action or suit by or in the right
of the corporation to procure a judgment in its favor by reason of the fact that
he is or was a director, director emeritus, officer, employee or agent of the
corporation or any of its subsidiaries, or is or was serving at the request of
the corporation as a director, director emeritus, officer, employee or agent of
another corporation, partnership, joint venture, trust, employee benefit plan or
other enterprise against expenses (including attorneys' fees) actually and
reasonably incurred by him in connection with the defense or settlement of such
action or suit if he acted in good faith and in a manner he reasonably believed
to be in or not opposed to the best interests of the corporation; except that no
indemnification shall be made in respect of any claim, issue or matter as to
which such person shall have been adjudged to be liable to the corporation
unless and only to the extent that the Court of Chancery or the court in which
such action or suit was brought shall determine upon application that, despite
the adjudication of liability but in view of all the circumstances of the case,
such person is fairly and reasonably entitled to indemnity for such expenses
which the Court of Chancery or such other court shall deem proper.
Section 3. Any indemnification under this Article VIII (unless ordered by
a court) shall be made by the corporation only as authorized in the specific
case upon a determination that indemnification of the director, director
emeritus, officer, employee or agent is proper in the circumstances because he
has met the applicable standard of conduct set forth in Section 1 or 2 of this
Article VIII, as the case may be. Such determination shall be made (A) by the
Board of Directors by a majority vote of a quorum consisting of directors who
were not parties to such action, suit or proceeding, or (B) if such a quorum is
not obtainable, or, even if obtainable a quorum of disinterested directors so
directs, by independent legal counsel in a written opinion, or (C) by the
stockholders. To the extent, however, that a director, director emeritus,
officer, employee or agent has been successful on the merits or otherwise in
defense of any action, suit or proceeding described above, or in defense of any
claim, issue or matter therein, he shall be indemnified against expenses
(including attorneys' fees) actually and reasonably incurred by him in
connection therewith, without the necessity of authorization in the specific
case.
Section 4. For purposes of any determination under Section 3 of this
Article VIII, a person shall be deemed to have acted in good faith and in manner
he reasonably believed to be in or not opposed to the best interests of the
corporation, or, with respect to any criminal action or proceeding, to have had
no reasonable cause to believe his conduct was unlawful, if his action is based
on the records or books of account of the corporation or another enterprise, or
on information supplied to him by the officers of the corporation or another
enterprise in the course of their duties, or on the advice of legal counsel for
the corporation or another enterprise or on information or records given or
reports made to the corporation or another enterprise by an independent
certified public accountant or by an appraiser or other expert selected with
13
<PAGE>
reasonable care by the corporation or another enterprise. The term "another
enterprise" as used in this Section 4 shall mean any other corporation or any
partnership, joint venture, trust, employee benefit plan or other enterprise of
which such person is or was serving at the request of the corporation as a
director, director emeritus, officer, employee or agent. The provisions of this
Section 4 shall not be deemed to be exclusive or to limit in any way the
circumstances in which a person may be deemed to have met the applicable
standard of conduct set forth in Sections 1 or 2 of this Article VIII, as the
case may be.
Section 5. Notwithstanding any contrary determination in the specific case
under Section 3 of this Article VIII, and notwithstanding the absence of any
determination thereunder, any director, director emeritus, officer, employee or
agent may apply to any court of competent jurisdiction in the State of Delaware
for indemnification to the extent otherwise permissible under Sections 1 and 2
of this Article VIII. The basis of such indemnification by a court shall be a
determination by such court that indemnification of the director, director
emeritus, officer, employee or agent is proper in the circumstances because he
has met the applicable standards of conduct set forth in Sections 1 or 2 of this
Article VIII, as the case may be. Neither a contrary determination in the
specific case under Section 3 of this Article VIII nor the absence of any
determination thereunder shall be a defense to such application or create a
presumption that the director, director emeritus, officer, employee or agent
seeking indemnification has not met any applicable standard of conduct. Notice
of any application for indemnification pursuant to this Section 5 shall be given
to the corporation promptly upon the filing of such application. If successful,
in whole or in part, the director, director emeritus, officer, employee or agent
seeking indemnification shall also be entitled to be paid the expense of
prosecuting such application.
Section 6. Expenses incurred in defending or investigating a threatened or
pending action, suit or proceeding shall be paid by the corporation in advance
of the final disposition of such action, suit or proceeding upon receipt of an
undertaking by or on behalf of the director, director emeritus, officer,
employee or agent to repay such amount if it shall ultimately be determined that
he is not entitled to be indemnified by the corporation as authorized in this
Article VIII.
Section 7. Without limiting any of the provisions of this Article VIII, if
any action, suit or proceeding is brought against a director, director emeritus,
officer, employee or agent and such director, director emeritus, officer,
employee or agent is entitled to be indemnified under this Article VIII or to
advancement of expenses hereunder (an "indemnified party"), (A) the indemnified
party may retain counsel satisfactory to him and the corporation, (B) the
corporation shall pay all reasonable fees and expenses of such counsel for the
indemnified party promptly as statements therefor are received, (C) the
indemnified party shall keep the corporation reasonably apprised of the status
of such action, claim or proceeding, and (D) the corporation will use all
reasonable efforts to assist in the vigorous defense of any such matter;
provided, that the corporation shall not be liable for any settlement of any
action, suit or proceeding without its prior written consent, which consent,
however, shall not be unreasonably withheld.
Section 8. Any indemnified party wishing to claim indemnification under
this Article VIII, upon learning of any such action, suit or proceeding, shall
promptly notify the corporation
14
<PAGE>
(but the failure to so notify the corporation shall not relieve the corporation
from any liability that it may have under this Article VIII except to the extent
such failure prejudices the corporation). The indemnified parties as a group may
retain only one law firm to represent them with respect to each matter unless
there is, under applicable standards of professional conduct, a conflict on any
significant issue between the positions of any two or more indemnified parties,
in which case the indemnified parties as a group shall be entitled to retain
only the minimum number of law firms necessary for separate representation of
each conflicting position.
Section 9. The indemnification and advancement of expenses provided by or
granted pursuant to this Article VIII shall not be deemed exclusive of any other
rights to which those seeking indemnification or advancement of expenses may be
entitled under any Bylaw, agreement, contract, vote of stockholders or
disinterested directors or pursuant to the direction (howsoever embodied) of any
court of competent jurisdiction or otherwise, both as to action in his official
capacity and as to action in another capacity while holding such office, it
being the policy of the corporation that indemnification of the persons
specified in Sections 1 and 2 of this Article VIII shall be made to the fullest
extent permitted by law. The provisions of this Article VIII shall not be
deemed to preclude the indemnification of any person who is not specified in
Sections 1 or 2 of this Article VIII but whom the corporation has the power or
obligation to indemnify under the provisions of the General Corporation Law of
the State of Delaware, or otherwise. The indemnification and advancement of
expenses provided by, or granted pursuant to, this Article VIII shall, unless
otherwise provided when authorized or ratified, continue as to a person who has
ceased to be a director, director emeritus, officer, employee or agent and shall
inure to the benefit of the heirs, executors and administrators of such person.
Section 10. The corporation may purchase and maintain insurance on behalf
of any person who is or was a director, director emeritus, officer, employee or
agent of the corporation, or is or was serving at the request of the corporation
as a director, director emeritus, officer, employee or agent of another
corporation, partnership, joint venture, trust, employee benefit plan or other
enterprise against any liability asserted against him and incurred by him in any
such capacity, or arising out of his status as such, whether or not the
corporation would have the power or the obligation to indemnify him against such
liability under the provisions of this Article VIII.
Section 11. For purposes of this Article VIII, references to "the
corporation" shall include, in addition to the resulting corporation, any
constituent corporation (including any constituent of a constituent) absorbed in
a consolidation or merger which, if its separate existence had continued, would
have had power and authority to indemnify its directors, directors emirate,
officers, employees and agents, so that any person who is or was a director,
director emeritus, officer, employee or agent of such constituent corporation,
or is or was serving at the request of such constituent corporation as a
director, director emeritus, officer, employee or agent of another corporation,
partnership, joint venture, trust, employee benefit plan or other enterprise,
shall stand in the same position under the provisions of this Article VIII with
respect to the resulting or surviving corporation as he would have with respect
to such constituent corporation if its separate existence had continued.
15
<PAGE>
For purposes of this Article VIII, references to "fines" shall include any
excise taxes assessed on a person with respect to an employee benefit plan; and
references to "serving at the request of the corporation" shall include any
service as a director, director emeritus, officer, employee or agent of the
corporation which imposes duties on, or involves services by, such person with
respect to an employee benefit plan, its participants or beneficiaries; and a
person who acted in good faith and in a manner he reasonably believed to be in
the interest of the participants and beneficiaries of an employee benefit plan
shall be deemed to have acted in a manner "not opposed to the best interests of
the corporation" as referred to in this Article VIII.
Section 12. The rights to indemnification provided in this Article VIII
with respect to a particular threatened, pending or completed action, suit or
proceeding shall vest in the indemnified party upon the occurrence of the event
or chain of events giving rise to such threatened, pending or completed action,
suit or proceeding, and no amendment or repeal of this Article VIII shall
adversely affect any right to indemnification to which an indemnified party
would have been entitled prior to the time of such amendment or repeal.
ARTICLE IX
AMENDMENTS
Section 1. These bylaws may be altered or repealed at any regular meeting
of the stockholders or at any special meeting of the stockholders at which a
quorum is present or represented, provided notice of the proposed alteration or
repeal be contained in the notice of such special meeting, by the affirmative
vote of a majority of the stock entitled to vote at such meeting and present or
represented thereat, or by the affirmative vote of a majority of the Board of
Directors at any regular meeting or any special meeting of the Board if notice
of the proposed alteration or repeal be contained in the notice of such special
meeting.
Section 2. Notwithstanding any other provisions of these bylaws (including
Section 1 of this Article IX) or the Certificate of Incorporation, the adoption
by stockholders of any alteration, amendment, change, addition to or repeal of
all or any part of Sections 1 or 2 of Article III or this Section 2 of Article
IX of these bylaws, or the adoption by stockholders of any other provision of
these bylaws which is inconsistent with or in addition to such Sections of these
bylaws, shall require the affirmative vote of the holders of not less than
eighty percent (80%) of the votes entitled to be cast by the holders of all then
outstanding stock of the Corporation entitled to vote in the election of
directors, considered for purposes of this Section 2 as one class.
16
<PAGE>
EXHIBIT 15
The Board of Directors and Shareholders
Tidewater Inc.
We are aware of the incorporation by reference in the Registration Statements
(Forms S-8 No. 33-63094, No. 33-38240, No. 333-32729 and No. 333-47687) of
Tidewater Inc. of our report dated July 19, 1999 relating to the unaudited
condensed consolidated interim financial statements of Tidewater Inc. that are
included in its Form 10-Q for the quarter ended June 30, 1999.
Pursuant to Rule 436(c) of the Securities Act of 1933, our report is not a part
of the registration statements prepared or certified by accountants within the
meaning of Section 7 or 11 of the Securities Act of 1933.
Ernst & Young LLP
New Orleans, Louisiana
July 19, 1999
<TABLE> <S> <C>
<PAGE>
<ARTICLE> 5
<LEGEND>
This schedule contains summary financial information extracted from the
condensed consolidated balance sheets and the condensed consolidated statements
of earnings at the date and for the period indicated and is qualified in its
entirety by reference to such financial statements. All amounts shown are in
thousands of dollars, except per share data.
</LEGEND>
<MULTIPLIER> 1
<S> <C>
<PERIOD-TYPE> 3-MOS
<FISCAL-YEAR-END> MAR-31-2000
<PERIOD-START> APR-01-1999
<PERIOD-END> JUN-30-1999
<CASH> 73,698
<SECURITIES> 0
<RECEIVABLES> 197,227
<ALLOWANCES> 11,359
<INVENTORY> 26,075
<CURRENT-ASSETS> 289,941
<PP&E> 1,542,990
<DEPRECIATION> 917,576
<TOTAL-ASSETS> 1,391,933
<CURRENT-LIABILITIES> 69,666
<BONDS> 0
0
0
<COMMON> 6,056
<OTHER-SE> 1,070,333
<TOTAL-LIABILITY-AND-EQUITY> 1,391,933
<SALES> 154,530
<TOTAL-REVENUES> 154,530
<CGS> 136,135
<TOTAL-COSTS> 136,135
<OTHER-EXPENSES> 0
<LOSS-PROVISION> 0
<INTEREST-EXPENSE> 126
<INCOME-PRETAX> 24,209
<INCOME-TAX> 7,747
<INCOME-CONTINUING> 16,462
<DISCONTINUED> 0
<EXTRAORDINARY> 0
<CHANGES> 0
<NET-INCOME> 16,462
<EPS-BASIC> .30
<EPS-DILUTED> .30
</TABLE>
