<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 December 31, 2000
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
--------------------------------------------------------------------------------
(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
----------------------------
NOT APPLICABLE
--------------------------------------------------------------------------------
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 _____
-----
55,872,893 shares of Tidewater Inc. common stock $.10 par value per share were
outstanding on January 12, 2001. Excluded from the calculation of shares
outstanding at January 12, 2001 are 4,678,487 shares held by the Registrant's
Grantor Stock Ownership Trust. Registrant has no other class of common stock
outstanding.
-1-
<PAGE>
PART I. FINANCIAL INFORMATION
Item 1. Financial Statements
--------------------
TIDEWATER INC.
UNAUDITED CONDENSED CONSOLIDATED BALANCE SHEETS
(In thousands)
<TABLE>
<CAPTION>
-------------------------------------------------------------------------------------------------------------------
December 31, March 31,
ASSETS 2000 2000
-------------------------------------------------------------------------------------------------------------------
<S> <C> <C>
Current assets:
Cash and cash equivalents $ 85,880 226,910
Trade and other receivables 161,663 149,006
Marine operating supplies 26,652 25,405
Other current assets 1,429 2,372
------------------------------------------------------------------------------------------------------------------
Total current assets 275,624 403,693
------------------------------------------------------------------------------------------------------------------
Investments in, at equity, and advances to
unconsolidated companies 20,848 23,275
Properties and equipment:
Vessels and related equipment 1,555,852 1,356,177
Other properties and equipment 42,420 42,474
------------------------------------------------------------------------------------------------------------------
1,598,272 1,398,651
Less accumulated depreciation 861,133 842,620
------------------------------------------------------------------------------------------------------------------
Net properties and equipment 737,139 556,031
------------------------------------------------------------------------------------------------------------------
Goodwill, net 331,129 338,006
Other assets 125,716 111,331
------------------------------------------------------------------------------------------------------------------
Total assets $ 1,490,456 1,432,336
==================================================================================================================
LIABILITIES AND STOCKHOLDERS' EQUITY
-------------------------------------------------------------------------------------------------------------------
Current liabilities:
Accounts payable and accrued expenses 57,227 66,943
Accrued property and liability losses 7,711 4,322
Income taxes 6,031 3,572
------------------------------------------------------------------------------------------------------------------
Total current liabilities 70,969 74,837
------------------------------------------------------------------------------------------------------------------
Deferred income taxes 174,839 145,076
Accrued property and liability losses 42,039 49,549
Other liabilities and deferred credits 50,284 48,673
Stockholders' equity:
Common stock of $.10 par value, 125,000,000 shares
authorized, issued 60,551,380 shares at
December and 60,561,892 shares at March 6,056 6,056
Other stockholders' equity 1,146,269 1,108,145
------------------------------------------------------------------------------------------------------------------
Total stockholders' equity 1,152,325 1,114,201
------------------------------------------------------------------------------------------------------------------
Total liabilities and stockholders' equity $ 1,490,456 1,432,336
==================================================================================================================
</TABLE>
See Notes to Unaudited Condensed Consolidated Financial Statements.
-2-
<PAGE>
TIDEWATER INC.
UNAUDITED CONDENSED CONSOLIDATED STATEMENTS OF EARNINGS
(In thousands, except share and per share data)
<TABLE>
<CAPTION>
-------------------------------------------------------------------------------------------------------------------------
Quarter Ended Nine Months Ended
December 31, December 31,
------------------------ -----------------------
2000 1999 2000 1999
--------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C>
Revenues:
Vessel revenues $ 154,766 128,655 415,713 406,667
Other marine revenues 4,361 13,115 26,435 28,579
--------------------------------------------------------------------------------------------------------------------------
159,127 141,770 442,148 435,246
--------------------------------------------------------------------------------------------------------------------------
Costs and expenses:
Vessel operating costs 94,202 77,743 270,457 247,066
Costs of other marine revenues 3,170 11,821 20,479 23,610
Depreciation and amortization 19,926 19,780 58,452 63,057
General and administrative 16,592 14,934 48,869 48,527
--------------------------------------------------------------------------------------------------------------------------
133,890 124,278 398,257 382,260
--------------------------------------------------------------------------------------------------------------------------
25,237 17,492 43,891 52,986
Other income (expenses):
Foreign exchange gain (loss) 82 (87) 20 116
Gain on sales of assets 2,335 2,074 22,659 11,038
Equity in net earnings of unconsolidated companies 1,479 2,583 5,514 6,469
Minority interests 112 (189) (60) (480)
Interest and miscellaneous income 3,933 3,630 12,886 7,644
Interest and other debt costs (326) (160) (650) (449)
---------------------------------------------------------------------------------------------------------------------------
7,615 7,851 40,369 24,338
--------------------------------------------------------------------------------------------------------------------------
Earnings before income taxes 32,852 25,343 84,260 77,324
Income taxes 10,513 3,110 27,466 19,744
--------------------------------------------------------------------------------------------------------------------------
Net earnings $ 22,339 22,233 56,794 57,580
==========================================================================================================================
Earnings per common share $ .40 .40 1.02 1.04
==========================================================================================================================
Diluted earnings per common share $ .40 .40 1.01 1.03
==========================================================================================================================
Weighted average common shares outstanding 55,770,190 55,538,001 55,686,582 55,518,963
Incremental common shares from stock options 591,772 275,781 492,317 249,401
--------------------------------------------------------------------------------------------------------------------------
Adjusted weighted average common shares 56,361,962 55,813,782 56,178,899 55,768,364
==========================================================================================================================
Cash dividends declared per common share $ .15 .15 .45 .45
==========================================================================================================================
</TABLE>
See Notes to Unaudited Condensed Consolidated Financial Statements.
-3-
<PAGE>
TIDEWATER INC.
UNAUDITED CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS
(In thousands)
<TABLE>
<CAPTION>
--------------------------------------------------------------------------------------------------------------------------
Quarter Ended Nine Months Ended
December 31, December 31,
-------------------------- -----------------------
2000 1999 2000 1999
--------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C>
--------------------------------------------------------------------------------------------------------------------------
Net cash provided by operating activities $ 33,901 32,235 91,481 164,081
--------------------------------------------------------------------------------------------------------------------------
Cash flows from investing activities:
Proceeds from sales of assets 3,102 7,088 45,128 60,414
Additions to properties and equipment (209,340) (8,710) (253,147) (51,149)
Other (2,657) 80 (2,680) 142
--------------------------------------------------------------------------------------------------------------------------
Net cash provided by (used in) investing
activities (208,895) (1,542) (210,699) 9,407
--------------------------------------------------------------------------------------------------------------------------
Cash flows from financing activities:
Proceeds from issuance of common stock 1,018 55 3,281 243
Cash dividends (8,378) (8,344) (25,093) (25,024)
--------------------------------------------------------------------------------------------------------------------------
Net cash used in financing activities (7,360) (8,289) (21,812) (24,781)
--------------------------------------------------------------------------------------------------------------------------
Net change in cash and cash equivalents (182,354) 22,404 (141,030) 148,707
Cash and cash equivalents at beginning of period 268,234 136,725 226,910 10,422
--------------------------------------------------------------------------------------------------------------------------
Cash and cash equivalents at end of period $ 85,880 159,129 85,880 159,129
==========================================================================================================================
Supplemental disclosure of cash flow information:
Cash paid during the period for:
Interest $ 420 2 549 328
Income taxes $ 6,696 2,428 15,082 19,776
==========================================================================================================================
</TABLE>
See Notes to Unaudited Condensed Consolidated Financial Statements.
-4-
<PAGE>
TIDEWATER INC.
NOTES TO UNAUDITED CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
--------------------------------------------------------------------------------
(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 December 31, 2000 and March 31, 2000, 4,686,107 and 4,911,445 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 32.6% for the quarter and nine-month period ended
December 31, 2000, respectively. The effective tax rate applicable to pre-tax
earnings for the quarter and nine-month period ended December 31, 1999 was 32%,
excluding a $5 million (or $.09 per share) reduction in previously provided
taxes resulting from the company's settlement in the third quarter of open
income tax audits which had the effect of reducing the effective tax rate for
the quarter and nine-month period ended December 31, 1999 to 12.3% and 25.5%,
respectively.
(4) Gain on Sales of Assets
Gain on sales of assets for the nine-month period ended December 31, 2000
includes $5.9 million resulting from sales of marine vessels and a $16.8 million
gain resulting from the sale of the company's 40% holding in its marine joint
venture, National Marine Service (NMS), for approximately $31 million during the
second quarter of fiscal 2001. The after-tax effect of the gain on the sale of
the company's interest in NMS was $10.9 million, or $.19 per share.
(5) Vessel Fleet Acquisition
On November 21, 2000 the company completed the previously announced purchase of
eight vessels from The Sanko Steamship Co., Ltd. for $160 million in cash. Four
of the vessels are large anchor-handling towing supply vessels and four are
large North Sea-type platform supply vessels.
-5-
<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 December 31, 2000, and the related
condensed consolidated statements of earnings and cash flows for the three-month
and nine-month periods ended December 31, 2000 and 1999. 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 auditing standards generally accepted in the United States,
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 accounting principles generally
accepted in the United States.
We have previously audited, in accordance with auditing standards generally
accepted in the United States, the consolidated balance sheet of Tidewater Inc.
and subsidiaries as of March 31, 2000, 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 25, 2000, 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, 2000, 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
January 15, 2001
-6-
<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 principally
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.
-7-
<PAGE>
The following table compares revenues and operating costs (excluding general and
administrative expense and depreciation expense) for the quarters and nine-month
periods ended December 31 and for the quarter ended September 30, 2000. 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 Nine Months Ended Ended
December 31, December 31, Sept 30,
---------------------------- ------------------- --------
(In thousands) 2000 1999 2000 1999 2000
-------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C>
Revenues:
Vessel revenues:
United States $ 54,367 36,444 135,677 104,120 44,807
International 100,399 92,211 280,036 302,547 90,835
-------------------------------------------------------------------------------------------------------------------
154,766 128,655 415,713 406,667 135,642
Other marine revenues 4,361 13,115 26,435 28,579 10,495
-------------------------------------------------------------------------------------------------------------------
$ 159,127 141,770 442,148 435,246 146,137
===================================================================================================================
Operating costs:
Vessel operating costs:
Crew costs $ 46,600 45,103 135,951 142,647 45,986
Repair and maintenance 25,719 13,819 75,797 47,215 24,190
Insurance 5,464 5,168 15,151 14,729 4,718
Fuel, lube and supplies 8,002 6,174 20,825 18,666 6,711
Other 8,417 7,479 22,733 23,809 6,699
-------------------------------------------------------------------------------------------------------------------
94,202 77,743 270,457 247,066 88,304
Costs of other marine revenues 3,170 11,821 20,479 23,610 8,066
-------------------------------------------------------------------------------------------------------------------
$ 97,372 89,564 290,936 270,676 96,370
===================================================================================================================
</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 $8.8
million of billings as of December 31, 2000 ($10.7 million of billings as of
March 31, 2000), which would otherwise have been recognized as revenue. The
company will recognize the amounts as revenue when the uncertainty has been
reduced.
Oil and natural gas prices have appreciated significantly on the commodity
markets during calendar year 1999 and remained strong throughout calendar year
2000. The strong price of oil and natural gas combined with severely tight
inventory levels for both crude oil and natural gas continue to increase the
demand for working drilling rigs and services in the U.S. Gulf of Mexico and on
a global basis. Strong worldwide demand for natural resources has prompted the
oil and gas exploration and production companies to increase their capital
spending budgets in order to take advantage of improving industry conditions.
U.S.-based vessel demand is expected to increase as market conditions and
drilling rig utilization rates continue to improve and international-based
vessel demand is expected to accelerate as international drilling activity
recovers.
-8-
<PAGE>
Marine operating profit and other components of earnings before income taxes for
the quarters and nine-month periods ended December 31 and for the quarter ended
September 30, 2000 consist of the following:
<TABLE>
<CAPTION>
Quarter
Quarter Ended Nine Months Ended Ended
December 31, December 31, Sept 30,
-------------------- --------------------- --------
(In thousands) 2000 1999 2000 1999 2000
----------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C>
Vessel activity:
United States $ 10,125 379 5,070 381 420
International 18,090 18,617 44,865 58,297 14,559
----------------------------------------------------------------------------------------------------
28,215 18,996 49,935 58,678 14,979
Gain on sales of assets 2,335 2,074 22,659 11,029 19,360
Other marine services 1,036 1,162 5,572 4,487 2,306
----------------------------------------------------------------------------------------------------
Operating profit 31,586 22,232 78,166 74,194 36,645
----------------------------------------------------------------------------------------------------
Equity in net earnings of
unconsolidated companies 1,479 2,583 5,514 6,469 1,693
Interest and other debt costs (326) (160) (650) (449) (163)
Corporate general and administrative (3,520) (2,481) (10,407) (8,546) (3,576)
Other income 3,633 3,169 11,637 5,656 4,812
----------------------------------------------------------------------------------------------------
Earnings from continuing operations
before income taxes $ 32,852 25,343 84,260 77,324 39,411
====================================================================================================
</TABLE>
U.S.-based vessel revenues for the quarter and nine-month period ended December
31, 2000 have increased by approximately 49% and 30%, respectively, as compared
to the same periods in fiscal 2000 as a result of higher average day rates.
Improving market conditions and vessel demand in the U.S. Gulf of Mexico has
resulted in increased average day rates for the U.S.-based towing supply/supply
vessels, the company's major income producing asset. As of December 31, 2000,
the towing supply/supply vessels operating in the U.S. Gulf of Mexico are
experiencing approximately $6,700 average day rates and 69% utilization.
U.S.-based operating profit for the quarter and nine-month period ended December
31, 2000 increased significantly as compared to the same periods in fiscal 2000
primarily as a result of increases in vessel revenues offset by higher repair
and maintenance costs and crew costs. Repair and maintenance costs increased as
a result of costs incurred from an intense drydocking program the company
initiated during the first quarter of fiscal 2001 and continued during the
second and third quarters of fiscal 2001 in order to ready equipment for an
expected improvement in demand for its vessels. The company initiated this
drydocking program while vessel demand and average day rates in the domestic
market had not fully recovered, thus sacrificing short-term profitability in
anticipation of higher average day rates and vessel demand when market
conditions in the U.S. Gulf of Mexico improve. By December 31, 2000 U.S.-based
market conditions have improved significantly and it is expected that repair and
maintenance costs in the fourth fiscal quarter will be less than the preceding
quarters. Crew costs increased due to employing more vessel personnel as a
result of stronger demand for the company's services in the domestic market.
Competition for qualified fleet personnel has also resulted in wage increases
for U.S. seamen during the current quarter.
Current quarter U.S.-based revenues increased 21% as compared to the previous
quarter due to higher average day rates resulting from improved market
conditions and vessel demand in the U.S. Gulf of Mexico. U.S.-based operating
profit increased significantly during the current quarter from the previous
quarter as a result of increases in vessel revenue and a slight decrease in
repair and maintenance costs, primarily due to fewer drydockings being performed
during the current quarter as compared to the previous quarter.
-9-
<PAGE>
International-based vessel revenues for the current quarter increased 9% from
the comparative period in fiscal 2000 as a result of higher utilization and
average day rates. International-based vessel revenues for the nine-month period
ended December 31, 2000 decreased 7% as compared to the same period in fiscal
2000 as a result of lower average day rates and a decrease in the number of
active vessels in the international-based fleet. The company sold its
safety/standby vessels in July 1999, as it did not conform to the company's
long-range strategies. International vessel demand has trended upwards in recent
months as international exploration and production expenditures and drilling
activity increase.
International-based operating profit for the current quarter was slightly less
than the comparative period in fiscal 2000 as increased vessel revenues were
offset by higher repair and maintenance costs. International-based operating
profit for the nine-month period ended December 31, 2000 decreased approximately
23% as compared to the same period in fiscal 2000 as a result of lower average
day rates, a decrease in the number of active vessels in the international-based
fleet and higher repair and maintenance costs. Repair and maintenance costs
increased primarily due to a higher number of international-based vessel
drydockings being performed. International vessel utilization rates increased
during the comparative periods, but primarily as a result of withdrawing 25
older, little-used vessels from active service during the latter part of fiscal
2000 at which time they were removed from the utilization statistics. Vessel
utilization rates are a function of vessel days worked and vessel days
available.
Current quarter international-based revenues and operating profit increased 11%
and 24%, respectively, as compared to the previous quarter. Of the $3.5 million
current quarter increase in international operating profit from the previous
quarter, the eight Sanko Steamship Co. vessels acquired during the middle of the
current quarter contributed $1.5 million.
Gain on sale of assets for the nine-month period ended December 31, 2000
includes a $16.8 million gain on sale of the company's 40% holding of National
Marine Service during the second quarter of fiscal 2001.
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 two tables compare day-based utilization
percentages and average day rates by vessel class and in total for the quarters
and nine-month periods ended December 31 and for the quarter ended September 30,
2000:
-10-
<PAGE>
<TABLE>
<CAPTION>
Quarter
Quarter Ended Nine Months Ended Ended
December 31, December 31, Sept 30,
---------------- ------------------ --------
2000 1999 2000 1999 2000
---------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C>
UTILIZATION:
-----------
Domestic-based fleet
--------------------
Towing-supply/supply 64.0% 58.7 61.8 52.7 64.2
Crew/utility 93.0 77.1 89.6 76.2 89.2
Offshore tugs 32.4 42.8 35.5 42.8 40.6
Other 11.2 44.7 21.9 55.7 23.9
Total 59.9% 57.8 59.2 54.1 61.7
International-based fleet
-------------------------
Towing-supply/supply 80.5% 74.0 77.6 70.9 75.7
Crew/utility 95.3 83.3 93.6 87.7 91.5
Offshore tugs 72.8 66.3 68.9 60.7 67.3
Safety/standby -- -- -- 77.5 --
Other 49.7 48.5 46.3 49.7 47.0
Total 78.8% 71.9 75.8 70.1 74.1
Worldwide fleet
---------------
Towing-supply/supply 74.3% 68.1 71.5 64.0 71.3
Crew/utility 94.5 81.2 92.2 83.8 90.7
Offshore tugs 54.2 56.3 53.7 53.1 55.0
Safety/standby -- -- -- 77.5 --
Other 41.1 47.7 41.0 51.0 42.0
Total 71.8% 66.6 69.6 64.3 69.4
======================================================================================================
AVERAGE VESSEL DAY RATES:
------------------------
Domestic-based fleet
--------------------
Towing-supply/supply $ 6,059 3,646 4,884 3,619 4,533
Crew/utility 2,544 1,871 2,265 1,823 2,197
Offshore tugs 6,298 5,751 6,135 5,901 5,927
Other 1,434 1,188 1,451 1,262 1,643
Total $ 5,306 3,512 4,410 3,501 4,169
International-based fleet
-------------------------
Towing-supply/supply $ 5,321 5,189 5,183 5,472 5,149
Crew/utility 2,244 2,188 2,242 2,204 2,246
Offshore tugs 4,226 3,827 4,089 3,905 4,224
Safety/standby -- -- -- 6,087 --
Other 1,362 1,358 1,428 1,333 1,318
Total $ 4,391 4,247 4,272 4,452 4,245
Worldwide fleet
---------------
Towing-supply/supply $ 5,560 4,677 5,084 4,897 4,936
Crew/utility 2,346 2,084 2,250 2,086 2,229
Offshore tugs 4,796 4,456 4,708 4,584 4,804
Safety/standby -- -- -- 6,087 --
Other 1,366 1,322 1,430 1,316 1,357
Total $ 4,674 4,009 4,316 4,162 4,220
======================================================================================================
</TABLE>
-11-
<PAGE>
The following table compares the average number of vessels by class and
geographic distribution for the quarters and nine-month periods ended December
31 and for the quarter ended September 30, 2000:
<TABLE>
<CAPTION>
Quarter
Quarter Ended Nine Months Ended Ended
December 31, December 31, Sept 30,
------------------- --------------------- --------
2000 1999 2000 1999 2000
------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C>
Domestic-based fleet:
--------------------
Towing-supply/supply 120 127 122 129 121
Crew/utility 25 26 26 26 26
Offshore tugs 32 33 32 36 33
Other 9 9 9 9 9
------------------------------------------------------------------------------------------------------------------
Total 186 195 189 200 189
------------------------------------------------------------------------------------------------------------------
International-based fleet:
-------------------------
Towing-supply/supply 199 203 196 213 195
Crew/utility 48 49 48 50 48
Offshore tugs 38 44 38 49 38
Safety/standby --- --- --- 8 ---
Other 31 32 32 33 33
------------------------------------------------------------------------------------------------------------------
Total 316 328 314 353 314
------------------------------------------------------------------------------------------------------------------
Owned or chartered vessels
included in marine revenues 502 523 503 553 503
Vessels held for sale 41 62 47 52 48
Joint-venture and other 27 44 37 44 34
------------------------------------------------------------------------------------------------------------------
Total 570 629 587 649 585
==================================================================================================================
</TABLE>
Included in the international-based towing-supply/supply fleet count for the
current quarter are the eight vessels purchased on November 21, 2000 for $160
million in cash from The Sanko Steamship Co., Ltd. The package of vessels
included four large platform supply vessels and four large anchor-handling
towing supply vessels. Also included in the international-based towing-
supply/supply count are two large platform supply vessels purchased during the
current quarter for approximately $32.1 million.
On December 15, 2000 the company sold four vessels (two offshore tugs and two
crewboats) to one of its 49%-owned unconsolidated joint ventures for $17
million, of which $9 million was financed by the company. The transaction
resulted in a gain on asset sale of $1 million.
During the second quarter of fiscal 2001, the company sold its 40% holding in
one of its unconsolidated joint venture companies resulting in a decrease in the
joint venture vessel count by 24 vessels. As the sale occurred during August
2000, the average joint venture vessel count for the nine-month period ended
December 31, 2000 and for the previous quarter does not reflect the total vessel
reduction.
The company sold all of its safety/standby vessels for approximately $40 million
in an all cash transaction during the second quarter of fiscal 2000. This
specialized fleet was sold because it did not conform to the company's long-
range strategies. During the latter part of fiscal 2000, the company withdrew
from active service, 39 older, little-used vessels. Fourteen of the vessels were
withdrawn from the domestic-based fleet and 25 were withdrawn from the
international-based fleet. Vessels withdrawn from active service are intended to
be sold.
-12-
<PAGE>
General and administrative expenses for the quarters and nine-month periods
ended December 31 and for the quarter ended September 30, 2000:
<TABLE>
<CAPTION>
Quarter
Quarter Ended Nine Months Ended Ended
December 31, December 31, Sept 30,
------------------- --------------------- --------
(In thousands) 2000 1999 2000 1999 2000
------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C>
Personnel $ 9,989 9,396 30,131 28,763 10,052
Office and property 2,690 2,576 8,172 8,227 2,758
Sales and marketing 1,094 997 3,292 3,165 1,079
Professional services 1,126 1,416 3,120 4,001 1,144
Other 1,693 549 4,154 4,371 1,304
----------------------------------------------------------------------------------------------------------------
$ 16,592 14,934 48,869 48,527 16,337
================================================================================================================
</TABLE>
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 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 December 31, 2000, 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.
Investing activities for the nine-months ended December 31, 2000 used $210.7
million of cash which included $45.1 million from proceeds from the sale of
assets, primarily the sale of the company's 40% holding in National Marine
Service for approximately $31 million during the second quarter. Sale proceeds
were offset by additions to properties and equipment totaling $253.1 million
comprised of approximately $11.1 million in capitalized repairs and maintenance
and $240.4 million for the construction of offshore marine vessels and the
acquisition of seven large platform supply vessels and four large anchor-
handling towing supply vessels. Investing activities for the nine-months ended
December 31, 1999 provided $9.4 million of cash that included proceeds primarily
from the sale of the safety/standby fleet offset by new construction additions
to property, plant and equipment. Financing activities include quarterly cash
dividends of $.15 per share.
During the fourth quarter of fiscal 2000 the company announced its intentions of
a new-build program which would better service the needs of its customers in the
deepwater markets of the world. As of January 12, 2001, the company has entered
into agreements with three shipyards for the construction of 12 vessels for a
total estimated cost of approximately $305 million. Seven of the vessels to be
constructed are large platform supply vessels and five are large anchor-handling
towing supply vessels capable of working in most deepwater markets of the world.
Four of the platform supply vessels will be constructed at the company's
shipyard, Quality Shipyards LLC, while the remaining eight vessels will be built
at two Far East shipyards. As of January 12, 2001, $11.5 million has been
expended on these 12 vessels of the estimated $305 million total commitment.
Scheduled delivery of the vessels will commence in December 2001 with final
delivery of the last vessel expected in January 2003. The company expects to
finance the new-build program from its current cash balances, its projected cash
flow and, if necessary, its revolving credit facility.
In addition to the new-build program discussed above, the company has also
committed to the construction of seven additional vessels for a total of
approximately $40 million. These vessels
-13-
<PAGE>
consist of two large platform supply vessels under construction in Norway with
scheduled completion dates in April and May 2001, three small crewboats being
constructed in Holland with a February 2001 delivery date and two large
crewboats being built at U.S. shipyards to be delivered in April 2001 and
January 2002. As of January 12, 2001, $8.5 million have been expended on these
vessels.
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. The company
is proactive in establishing policies and operating procedures for safeguarding
the environment against any environmentally hazardous material aboard its
vessels and at shore base locations. Whenever possible, hazardous materials are
maintained or transferred in confined areas to ensure containment if accidents
occur. In addition the company has established operating policies that are
intended to increase awareness of actions that may harm the environment.
Item 3. Quantitative and Qualitative Disclosure About Market Risk
---------------------------------------------------------
No change from 2000 annual report disclosure.
-14-
<PAGE>
PART II. OTHER INFORMATION
Item 4. 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's report on Form 8-K dated November 21, 2000 reported that
the company had announced it has completed the purchase of eight
vessels from The Sanko Steamship Co., Ltd. for $160 million in cash.
C. The company's report on Form 8-K dated December 4, 2000 reported that:
1. The company had announced a management reorganization; and
2. Cliffe F. Laborde, Larry T. Rigdon and Dean E. Taylor have
been promoted to the level of Executive Vice President
reporting directly to William C. O'Malley, Chairman, President
and Chief Executive Officer; and
3. Richard M. Currence, Executive Vice President and William C.
Hightower, Senior Vice President will begin to transition to
retirement.
D. The company's report on Form 8-K dated December 18, 2000 reported that
William C. O'Malley, Chairman, President and Chief Executive Officer,
issued a Quarterly Report to Shareholders.
-15-
<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: January 17, 2001 /s/ William C. O'Malley
----------------------------------------------------
William C. O'Malley
Chairman of the Board, President and
Chief Executive Officer
Date: January 17, 2001 /s/ J. Keith Lousteau
----------------------------------------------------
J. Keith Lousteau
Senior Vice President and
Chief Financial Officer
Date: January 17, 2001 /s/ Joseph M. Bennett
----------------------------------------------------
Joseph M. Bennett
Vice President and
Corporate Controller (Principal Accounting Officer)
-16-
<PAGE>
EXHIBIT INDEX
Exhibit
Number
-----
10(a) Amendment No. 1 to Employment Agreement dated September 27, 2000
between Tidewater Inc. and William C. O'Malley.
10(b) Amended and Restated Change of Control Agreement dated September 27,
2000 between Tidewater and William C. O'Malley.
10(c) Amendment No. 1 dated November 28, 2000 to Tidewater 401(K) Savings
Plan.
10(d) Tidewater Inc. Third Amended and Restated Supplemental Executive
Retirement Plan dated November 28, 2000.
15 Letter re Unaudited Interim Financial Information
27 Financial Data Schedule
-17-
