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What changed in TIDEWATER INC's 10-K — 2023 vs 2024

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Paragraph-level year-over-year comparison of TIDEWATER INC's 2023 and 2024 10-K annual filings, covering the Business, Risk Factors, Legal Proceedings, Cybersecurity, MD&A and Market Risk sections. Every new, removed and edited paragraph is highlighted side-by-side so you can see exactly what management changed in the 2024 report.

+385 added−352 removedSource: 10-K (2025-02-27) vs 10-K (2023-12-31)

Top changes in TIDEWATER INC's 2024 10-K

385 paragraphs added · 352 removed · 253 edited across 7 sections

Item 1. Business

Business — how the company describes what it does

70 edited+53 added−23 removed58 unchanged
Biggest changeAdvocates of the energy transition, including nations aligned with the Paris Agreement, support targets to reduce world-wide carbon emissions to “net zero” by the year 2050, or in other words, a state in which the greenhouse gases emitted into the atmosphere are balanced by removal of greenhouse gases from the atmosphere. 11 Table of Contents We are dedicated to proactively disclosing our progress toward reducing our carbon emissions, including our initiatives to support more environmentally friendly energy sources, on an annual basis in our Sustainability Report.
Biggest changeWithin this framework, we regularly assess the environmental impact of operations, including the monitoring of fuel consumption, operational discharges and waste. We are dedicated to proactively disclosing our environmental impact, including our progress toward reducing our carbon footprint and our initiatives to support more environmentally friendly energy sources, on an annual basis in our Sustainability Report.
The activity levels of our customers also are influenced by the cost (and relative cost) of exploring for and producing oil and gas offshore, which can be affected by environmental regulations, technological advances that affect energy production and consumption, extreme weather conditions, and local and international economic and political environments, including government mandated moratoriums.
The activity levels of our customers are also influenced by the cost (and relative cost) of exploring for and producing oil and gas offshore, which can be affected by environmental regulations, technological advances that affect energy production and consumption, extreme weather conditions, and local and international economic and political environments, including government mandated moratoriums.
The base rate of hire for a term contract is generally a fixed rate, though some longer-term contracts have rate escalation clauses. In addition, many charter arrangements allow us to recover specific limited additional costs, such as fuel expenses, while on hire.
The base rate of hire for a term contract is generally a fixed day rate, though some longer-term contracts have rate escalation clauses. In addition, many charter arrangements allow us to recover specific limited additional costs, such as fuel expenses, while on hire.
These forward-looking statements are not a guarantee of future performance and involve risks and uncertainties, and there are certain important factors that could cause actual results to differ, possibly materially, from expectations or estimates reflected in such forward-looking statements, including, among others: fluctuations in worldwide energy demand and oil and gas prices; industry overcapacity; limited capital resources available to replenish our asset base as needed, including through acquisitions or vessel construction, and to fund our capital expenditure needs; uncertainty of global financial market conditions and potential constraints in accessing capital or credit if and when needed with favorable terms, if at all; changes in decisions and capital spending by customers in the energy industry and the industry expectations for offshore exploration, field development and production; consolidation of our customer base; loss of a major customer; changing customer demands for vessel specifications, which may make some of our older vessels technologically obsolete for certain customer projects or in certain markets; rapid technological changes; delays and other problems associated with vessel maintenance; the continued availability of qualified personnel and our ability to attract and retain them; the operating risks normally incident to our lines of business, including the potential impact of liquidated counterparties; our ability to comply with covenants in our indentures and other debt instruments; acts of terrorism and piracy; the impact of regional or global public health crises or pandemics; the impact of potential information technology, cybersecurity or data security breaches; integration of acquired businesses and entry into new lines of business; disagreements with our joint venture partners; natural disasters or significant weather conditions; unsettled political conditions, war, civil unrest and governmental actions, such as expropriation or enforcement of customs or other laws that are not well developed or consistently enforced; the risks associated with our international operations, including local content, local currency or similar requirements especially in higher political risk countries where we operate; interest rate and foreign currency fluctuations; labor changes proposed by international conventions; increased regulatory burdens and oversight; changes in laws governing the taxation of foreign source income; retention of skilled workers; our participation in industry wide, multi-employer, defined pension plans; enforcement of laws related to the environment, labor and foreign corrupt practices; increased global concern, regulation and scrutiny regarding climate change; increased stockholder activism; the potential liability for remedial actions or assessments under existing or future environmental regulations or litigation; the effects of asserted and unasserted claims and the extent of available insurance coverage; the resolution of pending legal proceedings; and other risks and uncertainties detailed in this Form 10-K and other filings we make with the SEC.
These forward-looking statements are not a guarantee of future performance and involve risks and uncertainties, and there are certain important factors that could cause actual results to differ, possibly materially, from expectations or estimates reflected in such forward-looking statements, including, among others: fluctuations in worldwide energy demand and oil and gas prices; industry overcapacity; limited capital resources available to replenish our asset base as needed, including through acquisitions or vessel construction, and to fund our capital expenditure needs; uncertainty of global financial market conditions and potential constraints in accessing capital or credit if and when needed with favorable terms, if at all; changes in decisions and capital spending by customers in the energy industry and the industry expectations for offshore exploration, field development and production; consolidation of our customer base; loss of a major customer; changing customer demands for vessel specifications, which may make some of our older vessels technologically obsolete for certain customer projects or in certain markets; rapid technological changes; delays and other problems associated with vessel maintenance; the continued availability of qualified personnel and our ability to attract and retain them; the operating risks normally incident to our lines of business, including the potential impact of liquidated counterparties; our ability to comply with covenants in our indentures and other debt instruments; acts of terrorism and piracy; the impact of regional or global public health crises or pandemics; the impact of potential information technology, cybersecurity or data security breaches; uncertainty around the use and impacts of artificial intelligence (AI) applications; integration of acquired businesses and entry into new lines of business; disagreements with our joint venture partners; natural disasters or significant weather conditions; unsettled political conditions, war, civil unrest and governmental actions, such as expropriation or enforcement of customs or other laws that are not well developed or consistently enforced; the risks associated with our international operations, including local content, local currency or similar requirements especially in higher political risk countries where we operate; interest rate and foreign currency fluctuations; labor changes proposed by international conventions; increased regulatory burdens and oversight; changes in laws governing the taxation of foreign source income; retention of skilled workers; our participation in industry wide, multi-employer, defined pension plans; enforcement of laws related to the environment, labor and foreign corrupt practices; increased global concern, regulation and scrutiny regarding climate change; increased stockholder activism; the potential liability for remedial actions or assessments under existing or future environmental regulations or litigation; the effects of asserted and unasserted claims and the extent of available insurance coverage; the resolution of pending legal proceedings; and other risks and uncertainties detailed in this Form 10-K and other filings we make with the SEC.
In 2023, the IMO adopted its 2023 Strategy on Reduction of GHG Emissions from Ships (IMO Strategy) that would require international shipping to reduce total greenhouse gas emissions on a well-to-wake basis to net zero by or around 2050.
In 2023, IMO adopted its 2023 Strategy on Reduction of GHG Emissions from Ships (IMO Strategy) that would require international shipping to reduce total greenhouse gas emissions on a well-to-wake basis to net zero by or around 2050.
For a company engaged in the U.S. coastwise trade to be deemed a U.S. citizen: (i) it must be organized under the laws of the United States or of a state, territory or possession thereof; (ii) each of the chief executive officer and the chairman of the board of directors of such corporation must be a U.S. citizen; (iii) no more than a minority of the number of directors of such corporation necessary to constitute a quorum for the transaction of business can be non-U.S.
For a company engaged in the U.S. coastwise trade to be deemed a U.S. citizen: (i) it must be organized under the laws of the U.S. or of a state, territory or possession thereof; (ii) each of the chief executive officer and the chairman of the board of directors of such corporation must be a U.S. citizen; (iii) no more than a minority of the number of directors of such corporation necessary to constitute a quorum for the transaction of business can be non-U.S.
In certain places in this Form 10-K, we may refer to reports published by third parties that purport to describe trends or developments in energy production and drilling and exploration activity and we specifically disclaim any responsibility for the accuracy and completeness of such information and have undertaken no steps to update or independently verify such information. 15 Table of Contents
In certain places in this Form 10-K, we may refer to reports published by third parties that purport to describe trends or developments in energy production and drilling and exploration activity and we specifically disclaim any responsibility for the accuracy and completeness of such information and have undertaken no steps to update or independently verify such information. 16 Table of Contents
In March 2023, we published our latest sustainability report (Sustainability Report) for the year ended December 31, 2022, which can be found on our website at www.tdw.com and includes disclosures in accordance with the Taskforce on Climate-Related Financial Disclosures (TCFD), the 2021 Global Reporting Initiative (GRI) reporting standards, and the 2018 Sustainability Accounting Standards Board (SASB) for Marine Transportation.
In March 2024, we published our latest sustainability report (Sustainability Report) for the year ended December 31, 2023, which can be found on our website at www.tdw.com and includes disclosures in accordance with the Taskforce on Climate-Related Financial Disclosures (TCFD), the 2021 Global Reporting Initiative (GRI) reporting standards, and the 2018 Sustainability Accounting Standards Board (SASB) for Marine Transportation.
Unless expressly noted, the information appearing on our website or any other website is not incorporated by reference into this Form 10-K and should not be considered part of this Form 10-K or any other filing Tidewater makes with the SEC. 14 Table of Contents FORWARD-LOOKING STATEMENTS Certain of the statements included in this Form 10-K constitute forward-looking statements within the meaning of the U.S.
Unless expressly noted, the information appearing on our website or any other website is not incorporated by reference into this Form 10-K and should not be considered part of this Form 10-K or any other filing Tidewater makes with the SEC. 15 Table of Contents FORWARD-LOOKING STATEMENTS Certain of the statements included in this Form 10-K constitute forward-looking statements within the meaning of the U.S.
Seasonality Our global vessel fleet generally has its highest utilization rates in the warmer months when the weather is more favorable for offshore exploration, field development and construction work in the oil and gas industry. Hurricanes, cyclones, the monsoon season, and other severe weather can negatively or positively impact vessel operations.
Seasonality Our global vessel fleet generally has its highest utilization rates in the warmer months when the weather is more favorable for offshore exploration, field development and construction work in the oil and gas industry. Hurricanes, cyclones, the monsoon season, and other severe weather can negatively or positively impact vessel operations. Our U.S.
As described above, certain of the international jurisdictions in which we operate have ratified the MLC, which establishes minimum requirements for working conditions of seafarers, including conditions of employment, hours of work and rest, grievance and complaints procedures, accommodations, recreational facilities, food and catering, health protection, medical care, welfare and social security protection.
Maritime Regulations – Health As described above, certain of the international jurisdictions in which we operate have ratified the MLC, which establishes minimum requirements for working conditions of seafarers, including conditions of employment, hours of work and rest, grievance and complaints procedures, accommodations, recreational facilities, food and catering, health protection, medical care, welfare and social security protection.
Existing U.S. environmental laws and regulations to which we are subject include, but are not limited to: ● the Clean Air Act, which restricts the emission of air pollutants from many sources and imposes various preconstruction, operational, monitoring and reporting requirements, and that the EPA has relied upon as the authority for adopting climate change regulatory initiatives relating to greenhouse gas emissions; ● the Clean Water Act, which regulates discharges of pollutants from facilities to state and federal waters and establishes the extent to which waterways are subject to federal jurisdiction and rulemaking as protected waters of the U.S.; 9 Table of Contents ● the Oil Pollution Act of 1990, which subjects owners and operators of vessels, onshore facilities, and pipelines, as well as lessees or permittees of areas in which offshore facilities are located, to liability for removal costs and damages arising from an oil spill in waters of the United States; ● the Comprehensive Environmental Response, Compensation and Liability Act of 1980, which imposes liability on generators, transporters, and arrangers of hazardous substances at sites where hazardous substance releases have occurred or are threatening to occur; and ● U.S.
Existing U.S. environmental laws and regulations to which we are subject include, but are not limited to: ● the Clean Air Act, which restricts the emission of air pollutants from many sources and imposes various preconstruction, operational, monitoring and reporting requirements, and that the EPA has relied upon as the authority for adopting climate change regulatory initiatives relating to greenhouse gas emissions; ● the Clean Water Act, which regulates discharges of pollutants from facilities to state and federal waters and establishes the extent to which waterways are subject to federal jurisdiction and rulemaking as protected waters of the U.S.; ● the Oil Pollution Act of 1990, which subjects owners and operators of vessels, onshore facilities, and pipelines, as well as lessees or permittees of areas in which offshore facilities are located, to liability for removal costs and damages arising from an oil spill in waters of the U.S.; ● the Comprehensive Environmental Response, Compensation and Liability Act of 1980, which imposes liability on generators, transporters, and arrangers of hazardous substances at sites where hazardous substance releases have occurred or are threatening to occur; and ● U.S.
Our services include towing of, and anchor handling for, mobile offshore drilling units; transporting supplies and personnel necessary to sustain drilling, workover, production activities, field abandonment, dismantlement and restoration activities; offshore construction and seismic and subsea support; geotechnical survey support for windfarm construction, and a variety of other specialized services such as pipe and cable laying.
Our services include towing and anchor handling for mobile offshore drilling units; transporting supplies and personnel necessary to sustain drilling, workovers, production activities, field abandonment, dismantlement and restoration activities; offshore construction and seismic and subsea support; geotechnical survey support for windfarm construction, and a variety of other specialized services such as pipe and cable laying.
These vessels can work in shallow waters along the coast or on the continental shelf or in intermediate depths further offshore. As of December 31, 2023, we operated 21 medium AHTS vessels. ● Large AHTS class. Generally, this vessel class includes AHTS vessels with over 16,000 BHP. These vessels primarily work in deepwater.
These vessels can work in shallow waters along the coast or on the continental shelf or in intermediate depths further offshore. As of December 31, 2024, we operated 21 medium AHTS vessels. ● Large AHTS class. Generally, this vessel class includes AHTS vessels with over 16,000 BHP. These vessels primarily work in deepwater.
Large AHTS vessels are equipped to tow drilling rigs and other marine equipment, as well as to set anchors for the positioning and mooring of drilling rigs that generally do not have dynamic positioning capabilities. As of December 31, 2023, we operated 11 large AHTS vessels.
Large AHTS vessels are equipped to tow drilling rigs and other marine equipment, as well as to set anchors for the positioning and mooring of drilling rigs that generally do not have dynamic positioning capabilities. As of December 31, 2024, we operated 11 large AHTS vessels.
Acquisition of Solstad Vessels (Solstad Acquisition) On March 7, 2023, we entered into an Agreement for the Sale and Purchase of Vessels, Charter Parties and Other Assets, which was amended on June 30, 2023 (the Acquisition Agreement), with certain subsidiaries of Solstad Offshore ASA, a Norwegian public limited company (collectively, the Sellers), pursuant to which we agreed to acquire from the Sellers (the Solstad Acquisition): (i) 37 platform supply vessels owned by the Sellers (the Solstad Vessels); and (ii) the charter parties governing certain of the Solstad Vessels.
Acquisition of Solstad Vessels (Solstad Acquisition) On March 7, 2023, we entered into an Agreement for the Sale and Purchase of Vessels, Charter Parties and Other Assets, which was amended on June 30, 2023 (the Acquisition Agreement), with certain subsidiaries of Solstad Offshore ASA, a Norwegian public limited company (collectively, the Sellers), pursuant to which we agreed to acquire from the Sellers (the Solstad Acquisition): (i) 37 PSVs owned by the Sellers (the Solstad Vessels); and (ii) the charter parties governing certain of the Solstad Vessels.
Our GOM operations can be impacted by the Atlantic hurricane season from the months of June through November, when offshore exploration, field development and construction work tend to slow or halt to mitigate potential losses and damage that may occur to the offshore oil and gas infrastructure should a hurricane enter the area.
Gulf operations can be impacted by the Atlantic hurricane season from the months of June through November, when offshore exploration, field development and construction work tend to slow or halt to mitigate potential losses and damage that may occur to the offshore oil and gas infrastructure should a hurricane enter the area.
Warrant Exercises and Expiration Prior to August 1, 2023, we had outstanding Series A Warrants, with an exercise price of $57.06 and Series B Warrants, with an exercise price of $62.28, both with an expiration date of July 31, 2023.
Prior to August 1, 2023, we had outstanding Series A Warrants, with an exercise price of $57.06 and Series B Warrants, with an exercise price of $62.28, both with an expiration date of July 31, 2023.
We manage our operations through the following five geographically aligned reporting segments: ● Americas ● Asia Pacific ● Middle East ● Europe/Mediterranean ● West Africa Each reporting segment is overseen by a managing director, who is a senior company executive reporting directly to our Chief Executive Officer, the chief operating decision maker.
We manage our operations through five geographically aligned reporting segments: ● Americas ● Asia Pacific ● Middle East ● Europe/Mediterranean ● West Africa Each reporting segment is overseen by a managing director, who is a senior company executive ultimately reporting to our Chief Executive Officer, the chief operating decision maker.
Environmental, Social and Governance We believe sustainability in the energy industry requires a balanced and diversified approach in both traditional energy sources and lower-emission solutions throughout the energy transition. We also believe our oil and gas customers are dedicated to strengthening energy security and the supply of reliable energy while also decreasing greenhouse gas emissions.
Sustainability We believe sustainability in the energy industry requires a balanced and diversified approach in both traditional energy sources and lower-emission solutions throughout the energy transition. We also believe our oil and gas customers are dedicated to strengthening energy security and the supply of reliable energy while also decreasing greenhouse gas emissions.
We offer a large, diversified fleet of offshore service vessels (OSV or vessels), with 217 vessels serving customers in over 30 countries as of December 31, 2023. We believe our global operating footprint allows us to react quickly to changing local market conditions and to be responsive to the changing requirements of our customers.
We offer a large, diversified fleet of offshore service vessels (OSV or vessels), with 211 vessels serving customers in over 30 countries as of December 31, 2024. We believe our global operating footprint allows us to react quickly to changing local market conditions and to be responsive to the changing requirements of our customers.
These vessels typically work in shallow waters along the coast or on the continental shelf. As of December 31, 2023, we operated 22 small AHTS vessels. ● Medium AHTS class. Generally, this vessel class includes AHTS vessels that have between 8,000 and 16,000 BHP.
These vessels typically work in shallow waters along the coast or on the continental shelf. As of December 31, 2024, we operated 20 small AHTS vessels. ● Medium AHTS class. Generally, this vessel class includes AHTS vessels that have between 8,000 and 16,000 BHP.
Although hurricanes, cyclones, monsoons and other severe weather can have a seasonal impact on operations, our business volume is more dependent on oil and gas pricing, global supply of oil and gas, and demand for our offshore support vessels and other services than on any seasonal variation.
Although hurricanes, cyclones, monsoons and other severe weather can have a seasonal impact on operations, our business volume is more dependent on oil and gas pricing, global supply of oil and gas, and demand for our offshore support vessels and other services than on any seasonal variation. Seasonality largely impacts drilling operations.
To support our West Africa segment, we contracted to build (i) two ocean-going tugs, which were completed and delivered in 2023; and (ii) eight Alucat crew boats, two of which were completed and delivered in 2023. We expect the remaining six Alucat crew boats to be completed in 2024 and early 2025.
To support our West Africa segment, we contracted to build (i) two ocean-going tugs, which were completed and delivered in 2023; and (ii) eight Alucat crew boats, two of which were completed and delivered in 2023. We expect five of the remaining six Alucat crew boats to be delivered in early 2025 and one to be delivered later in 2025.
We leverage technology to promote online collaborative workspaces to bring our colleagues together across multiple time zones and geographies and to create a global sense of community. Diversity, Equity and Inclusion We are a global company with operations on every continent except Antarctica.
As a global company with operations on every continent except Antarctica, we leverage technology to promote online collaborative workspaces to bring our colleagues together across multiple time zones and geographies and to create a global sense of community.
However, demand for offshore marine vessels typically increases in the GOM in connection with repair and remediation work that follows any hurricane damage to offshore oil and gas infrastructure.
However, demand for offshore marine vessels typically increases in the U.S. Gulf in connection with repair and remediation work that follows any hurricane damage to offshore oil and gas infrastructure.
U.S. law requires that vessels engaged in the U.S. coastwise trade must be built in the U.S. and registered under U.S. flag. In addition, once a U.S. built vessel is registered under a non-U.S. flag, it cannot thereafter engage in U.S. coastwise trade. Therefore, our non-U.S. flagged vessels must operate outside of the U.S. coastwise trade zone.
In addition, once a U.S. built vessel is registered under a non-U.S. flag, it cannot thereafter engage in U.S. coastwise trade. Therefore, our non-U.S. flagged vessels must operate outside of the U.S. coastwise trade zone.
ITEM 1. BUSINESS Unless otherwise required by the context, the terms “we”, “us”, “our” and “the company” as used herein refer to Tidewater Inc. and its consolidated subsidiaries and predecessors. About Tidewater We were incorporated in 1956 and for over 65 years, we have provided marine and transportation services to the global offshore energy industry.
ITEM 1. BUSINESS Unless otherwise required by the context, the terms “we”, “us”, “our” and “the company” as used herein refer to Tidewater Inc. and its consolidated subsidiaries and predecessors. About Tidewater We have provided marine and transportation services to the global offshore energy industry since our incorporation in 1956.
We also are subject to international laws and conventions and the laws of international jurisdictions where we operate. Under the citizenship provisions of the Jones Act, we would not be permitted to engage in the U.S. coastwise trade if more than 25% of our outstanding shares of common stock are owned by non-U.S. Citizens (as defined by the Jones Act).
Under the citizenship provisions of the Jones Act, we would not be permitted to engage in the U.S. coastwise trade if more than 25% of our outstanding shares of common stock are owned by non-U.S. Citizens (as defined by the Jones Act).
The following table discloses our customers that accounted for 10% or more of total revenues: Years Ended December 31, December 31, December 31, 2023 2022 2021 Eni S.p.A 10.3 % * * Chevron Corporation * 12.3 % 15.7 % Saudi Aramco * * 11.8 % * Less than 10% of total revenues.
The following table discloses our customers that accounted for 10% or more of total revenues: Years Ended December 31, December 31, December 31, 2024 2023 2022 Eni S.p.A 12.3 % 10.3 % * Chevron Corporation * * 12.3 % * Less than 10% of total revenues.
The IMO Organization designates the waters off North America as an Emission Control Area, meaning that vessels operating in the U.S. must use fuel with a sulfur content no greater than 0.1%. Directives have been issued designed to reduce the emission of nitrogen oxides and sulfur oxides.
The IMO Organization designates the waters off North America as an Emission Control Area, meaning that vessels operating in the U.S. must use fuel with a sulfur content no greater than 0.1%. Directives have been issued designed to reduce the emission of SOx and NOx. These can impact both the fuel and the engines that may be used onboard vessels.
Our customers’ offshore business activity, in turn, is largely dependent on current and expected oil and gas prices, which fluctuate depending on expected future levels of supply and demand for oil and gas, and on estimates of the cost to find, develop and produce oil and gas reserves both onshore and offshore. 4 Table of Contents Depending on vessel capabilities and availability, our vessels operate in the shallow, intermediate and deepwater offshore markets.
Our customers’ offshore business activity, in turn, is largely dependent on current and expected oil and gas prices, which fluctuate depending on expected future levels of supply and demand for oil and gas, and on estimates of the cost to find, develop and produce oil and gas reserves both onshore and offshore.
Additionally, our vessels that operate offshore in India, other areas in Southeast Asia and the Western Pacific are impacted by the monsoon season, which occurs across the region from November to April. Vessels that operate in the North Sea can be impacted by a seasonal slowdown in the winter months, generally from November to March.
Additionally, our vessels that operate offshore in India, other areas in Southeast Asia and the Western Pacific are impacted by the monsoon season, which occurs across the region from November to April.
Information contained on or connected to our website is not incorporated by reference into this Form 10-K and should not be considered part of this Form 10-K or any other filing we make with the SEC.
Information contained on or connected to our website is not incorporated by reference into this Form 10-K and should not be considered part of this Form 10-K or any other filing we make with the SEC. Environmental Responsibility We strive to deliver services in a manner that minimizes the impact of our business on the environment.
For example, in the Americas region, we benefit from the rules and restrictions promulgated thereunder by the Merchant Marine Act of 1920 and the Shipping Act, 1916, as amended (collectively, the Jones Act), which limits vessels that can operate in the United States (U.S.) Gulf Of Mexico (GOM) and other offshore regions within U.S. territorial waters to those owned by companies that qualify as U.S. citizens.
For example, in the Americas region, we benefit from the rules and restrictions promulgated thereunder by the Merchant Marine Act of 1920 and the Shipping Act, 1916, as amended (collectively, the Jones Act), which limits vessels that can operate in the United States (U.S.) Gulf of America, also known as the United States Gulf of Mexico (U.S.
Compliance with the existing governmental regulations that 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 us.
Violations of these laws may result in civil and criminal penalties, fines, injunctions and other sanctions. Compliance with the existing governmental regulations that 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 us.
All remaining unexercised Series A Warrants and Series B Warrants, approximately 3.1 million in the aggregate, expired according to their terms on July 31, 2023. 5 Table of Contents Share Repurchase Program On November 5, 2023, our Board of Directors approved a $35.0 million share repurchase program.
All remaining unexercised Series A Warrants and Series B Warrants, approximately 3.1 million in the aggregate, expired according to their terms on July 31, 2023. 6 Table of Contents Share Repurchase Program On November 5, 2023, our Board of Directors (Board) approved a $35.0 million share repurchase program, pursuant to which we repurchased and retired 590,499 shares for approximately $35.0 million, excluding commissions and a 1% excise tax, during the fourth quarter of 2023.
A description of the type of vessels categorized in each vessel class and the services typically performed follows. Anchor Handling Towing Supply Vessels The most versatile vessels in the Tidewater fleet are large, powerful AHTS vessels, capable of all types of towing, anchor handling activities, and varied subsea operations.
Anchor Handling Towing Supply Vessels The most versatile vessels in the Tidewater fleet are large, powerful AHTS vessels, capable of all types of towing, anchor handling activities, and varied subsea operations.
Annex VI of MARPOL addresses air emissions, including emissions of sulfur and nitrous oxide, and requires the use of low sulfur fuels worldwide in both auxiliary and main propulsion diesel engines on vessels.
Furthermore, Annex VI of MARPOL addresses air emissions, including emissions of sulfur oxides (SOx), nitrogen oxides (NOx), particulate matter and greenhouse gases (GHG) emissions, and requires the use of low sulfur fuels worldwide in both auxiliary and main propulsion diesel engines on vessels.
We are not a party to any union contract in the U.S. but through several subsidiaries, we are subject to union agreements covering local nationals in several countries other than the U.S., most heavily in the North Sea with United Kingdom (U.K.) and Norwegian mariners. Culture and Engagement Our employees and our culture are critical to our long-term success.
Although we are not a party to any union contract in the U.S., we are subject to union agreements covering local nationals in several foreign regions, most heavily in Australia and the North Sea with our United Kingdom (U.K.) and Norwegian mariners. 13 Table of Contents Culture and Human Capital Management Our employees and our culture are critical to our long-term success.
Occupational Safety and Health Regulations In the U.S., we are subject to the Occupational Safety and Health Act (OSHA) and other similar laws and regulations, which establish workplace standards for the protection of the health and safety of employees, including the implementation of hazard communications programs designed to inform employees about hazardous substances in the workplace, potential harmful effects of these substances, and appropriate control measures.
Although the U.S. is not a party to the MLC, U.S. flagged vessels operating internationally must comply with the MLC when calling on a port in a country that is a party to the MLC. 11 Table of Contents In the U.S., we are subject to the Occupational Safety and Health Act (OSHA) and other similar laws and regulations, which establish workplace standards for the protection of the health and safety of employees, including the implementation of hazard communications programs designed to inform employees about hazardous substances in the workplace, potential harmful effects of these substances, and appropriate control measures.
Environmental laws and regulations are subject to change, however, and may impose increasingly strict requirements, and, as such, we cannot estimate the ultimate cost of complying with such potential changes to environmental laws and regulations. In addition, a wide range of governmental regulatory agencies, including the USCG, the U.S. Environmental Protection Agency (EPA), the U.S.
Environmental laws and regulations are subject to change, however, and may impose increasingly strict requirements, and, as such, we cannot estimate the ultimate cost of complying with such potential changes to environmental laws and regulations.
Regulatory and Compliance International Labour Organization’s Maritime Labour Convention The International Labour Organization's Maritime Labour Convention, 2006 (MLC) mandates globally, among other things, seafarer living and working conditions (accommodations, wages, conditions of employment, health and other benefits) aboard ships that are engaged in commercial activities.
Maritime Regulations – Labor The International Labour Organization's Maritime Labour Convention, 2006 (MLC) mandates globally, among other things, seafarer living and working conditions (accommodations, wages, conditions of employment, health and other benefits) aboard ships that are engaged in commercial activities. Since its initial entry into force on August 20, 2013, 90 countries have ratified the MLC.
The Board periodically reviews these governance practices, applicable law, the rules and listing standards of the New York Stock Exchange (NYSE) and SEC regulations, as well as best practices suggested by recognized governance authorities.
The Board periodically reviews these governance practices, applicable law, the rules and listing standards of the New York Stock Exchange (NYSE) and SEC regulations, as well as best practices suggested by recognized governance authorities. Our Audit Committee oversees our ethics program and enterprise risk management process, such as our cybersecurity, data privacy, ethics and compliance reporting.
Although commodity prices have recovered from historic lows seen in 2020, our customers have generally lowered their capital expenditure programs considering market volatility and competing priorities, including returning capital to stockholders and investing in alternative energy sources. In addition, we derive a significant amount of revenue from a relatively small number of customers.
Our customers’ capital expenditure programs also consider market volatility and competing priorities for funding, including returning capital to stockholders and investing in alternative energy sources. In addition, we derive a significant amount of revenue from a relatively small number of customers.
For the year ended December 31, 2023, our five largest customers accounted for approximately 37.3%, while our ten largest customers accounted for approximately 51.0% of our total revenues.
For the year ended December 31, 2024, our five largest customers accounted for approximately 36.1%, while our ten largest customers accounted for approximately 52.6% of our total revenues.
In addition, we have established operating policies intended to increase awareness of actions that may harm the environment, including being committed to responsible ship recycling in accordance with the 2009 Hong Kong Convention for the Safe and Environmentally Sound Recycling of Ships and the EU Ship Recycling Regulation. 10 Table of Contents In addition to governmental regulation, many offshore oil and gas producers have developed strict due diligence processes for selecting their suppliers out of concerns for the environmental impact of their operations.
In addition, we have established operating policies intended to increase awareness of actions that may harm the environment, including being committed to responsible ship recycling in accordance with the 2009 Hong Kong Convention for the Safe and Environmentally Sound Recycling of Ships and the EU Ship Recycling Regulation. U.S.
We expect offshore windfarm developments to increase over the coming years and believe these developments may provide additional opportunities for a certain cross-section of our larger vessels. These projects generally require fewer but more highly specialized vessels. Our revenues are derived primarily from vessel time charter or similar contracts ranging in duration from a few months to several years.
These projects generally require fewer but more highly specialized vessels. Our revenues are derived primarily from vessel time charter or similar contracts ranging in duration from a few months to several years.
The Solstad Acquisition added 28 Large PSVs to our fleet. As of December 31, 2023, we operated 69 Large PSVs. ● Medium PSVs. Generally, this vessel class includes PSVs that have between 500 and 900 square meters of deck space. The Solstad Acquisition added nine Medium PSVs to our fleet.
During the year ended December 31, 2024, our PSVs contributed approximately 75.0% of our vessel revenue. ● Medium PSVs. Generally, this vessel class includes PSVs that have between 500 and 900 square meters of deck space. As of December 31, 2024, we operated 70 Medium PSVs. ● Large PSVs.
Social and Human Capital Management Employees and Labor Relations As of December 31, 2023, we had a global workforce of approximately 7,300 individuals worldwide with over 90% of our workforce operating internationally in more than 30 countries.
Social Employees and Labor Relations As of December 31, 2024, we had a global workforce of approximately 7,700 individuals worldwide with most of our workforce operating internationally in more than 30 countries. This diversity of global perspectives makes our Company stronger, more resilient and more responsive to our global customers.
Corporate Information Tidewater was founded in 1956 and is incorporated under the laws of the State of Delaware. Our worldwide headquarters and principal executive offices are located at 842 West Sam Houston Parkway North, Suite 400, Houston, Texas 77024. 13 Table of Contents Available Information Tidewater maintains a website at www.tdw.com.
Reporting Segments We manage our business through five segments including the Americas, Asia Pacific, Middle East, Europe/Mediterranean, and West Africa. Corporate Information Tidewater was founded in 1956 and is incorporated under the laws of the State of Delaware. Our worldwide headquarters and principal executive offices are located at 842 West Sam Houston Parkway North, Suite 400, Houston, Texas 77024.
We have adopted and implemented various health and safety policies and programs, which have been developed for the onshore and offshore management of vessels in compliance with all applicable rules and regulations, including applicable international and flag state legislation.
We have adopted and implemented various health and safety policies and programs, which have been developed for the onshore and offshore management of vessels in compliance with all applicable rules and regulations, including applicable international and flag state legislation. 14 Table of Contents In addition, our leaders communicate frequently with company personnel to promote safety and instill safe work habits using company media directed at, and regular training of, both our seamen and shore-based personnel.
Additionally, we have developed security annexes for those U.S. flag vessels that transit or work in waters designated as high risk by the USCG pursuant to the latest revision of Maritime Security Directive 104-6.
These regulations include requirements as to the following: ● Implementation of specific security measures, including onboard installation of a ship security alert system ● Assessment of vessel security ● Efforts to identify and deter security threats ● Applicable security plans and processes, including training, drills and exercises 9 Table of Contents Additionally, we have developed security annexes for those U.S. flag vessels that transit or work in waters designated as high risk by the USCG pursuant to the latest revision of Maritime Security Directive 104-6.
As of December 31, 2023, we operated 22 vessels classified as other. Customers and Contracting Demand for our services depends substantially on our customers’ strategies and allocation of capital spending related to offshore exploration, development and production of oil and gas reserves.
During the year ended December 31, 2024, we repurchased and retired 1,384,186 shares for approximately $90.7 million, excluding commissions and a 1% excise tax. Customers and Contracting Demand for our services depends substantially on our customers’ strategies and allocation of capital spending related to offshore exploration, development and production of oil and gas reserves.
These vessels may be equipped for oil field security missions in markets where piracy, kidnapping or other potential violence presents a concern. Offshore tugs are used to tow floating drilling rigs and barges; to assist in the docking of tankers; and to assist pipe laying, cable laying and construction barges.
Crew boats and utility vessels are chartered to customers for use in transporting personnel and supplies from shore bases to offshore drilling rigs, platforms and other installations. These vessels may be equipped for oil field security missions in markets where piracy, kidnapping or other potential violence presents a concern.
The Oil Pollution Act of 1990 also requires owners and operators of vessels over 300 gross tons to provide the USCG with evidence of financial responsibility to cover the cost of cleaning up oil spills from those vessels. Several foreign jurisdictions also require us to present satisfactory evidence of financial responsibility.
We are proactive in establishing policies and operating procedures for safeguarding the environment against any hazardous materials aboard our vessels and at shore-based locations. 10 Table of Contents The Oil Pollution Act of 1990 also requires owners and operators of vessels over 300 gross tons to provide the USCG with evidence of financial responsibility to cover the cost of cleaning up oil spills from those vessels.
We strive to cultivate a culture and vision that supports and enhances our ability to recruit, develop and retain diverse talent at every level and in every operating theater. We are an equal opportunity employer, with qualified applicants receiving consideration for employment without regard to race, color, religion, sex, sexual orientation, gender identity, national origin, disability or protected veteran status.
We strive to cultivate a culture and vision that supports and enhances our ability to recruit, develop and retain talent at every level and in every operating theater. We are an equal opportunity employer, and comply with applicable employment, labor and immigration requirements in countries where we operate.
Risk Management The operation of any marine vessel involves an inherent risk of marine losses (including physical damage to the vessel) attributable to adverse sea and weather conditions, mechanical failure and collisions.
Based on the latest information available to us, we believe less than 24% of our outstanding common stock was owned by non-U.S. Citizens as of December 31, 2024. Risk Management The operation of any marine vessel involves an inherent risk of marine losses (including physical damage to the vessel) attributable to adverse sea and weather conditions, mechanical failure and collisions.
These can impact both the fuel and the engines that may be used onboard vessels. For further discussion of regulatory risks related to climate change see “Risk Factors” in Item 1A and “Management’s Discussion and Analysis of Financial Condition and Results of Operations” in Item 7 of this Annual Report on Form 10-K (Form 10K).
For further discussion of regulatory risks related to climate change see “Environmental, Social and Governance” discussion below and “Risk Factors” in Item 1A of this Annual Report on Form 10-K (Form 10-K).
We also carry workers’ compensation, maritime employer’s liability, director and officer liability, general liability (including third party pollution) and other insurance customary in the industry. The continued threat of terrorist activity and other acts of war or hostility have significantly increased the risk of political, economic and social instability in some of the geographic areas in which we operate.
We also carry workers’ compensation, maritime employer’s liability, director and officer liability, cybersecurity, general liability (including third party pollution) and other insurance customary in the industry.
Our Nominating & Corporate Governance Committee oversees our corporate governance matters, such as stockholder relations, and our compliance and regulatory programs. Our Audit Committee oversees our ethics program and enterprise risk management process, such as our cybersecurity, data privacy, ethics and compliance reporting.
Our Compensation & Human Capital Committee oversees our human capital management efforts, such as our employee compensation and benefits policies and programs. Our Nominating & Corporate Governance Committee oversees our corporate governance matters, such as stockholder relations, and our compliance and regulatory programs.
Department of Transportation’s Office of Pipeline Safety, the U.S. Bureau of Safety and Environmental Enforcement and certain individual states, regulate vessels and other structures in accordance with the requirements of federal and state law. At this time, little uniformity exists among the regulations issued by these agencies, which increases our compliance costs and risk of non-compliance.
At this time, little uniformity exists among the regulations issued by these agencies, which increases our compliance costs and risk of non-compliance.
Of the total 217 vessels that we owned at December 31, 2023, 208 vessels were registered under flags other than the U. S. and nine were registered under the U.S. flag. All our offshore vessels are subject to either U.S. or international safety and classification standards or sometimes both.
Of the total 211 vessels that we owned at December 31, 2024, 203 vessels were registered under flags other than the U.S. and eight were registered under the U.S. flag.
With a wide range of power, sizes and capacities, these vessels are also well-suited for general offshore support services, drilling rig support functions and cargo transport assignments. As of December 31, 2023, we operated 54 AHTS vessels throughout our service regions. ● Small AHTS class. Generally, this vessel class includes AHTS vessels that have up to 8,000 brake horsepower (BHP).
With a wide range of power, sizes and capacities, these vessels are also well-suited for general offshore support services, drilling rig support functions and cargo transport assignments. AHTS vessel capabilities are typically distinguished by the vessel’s engine power output in terms of brake horsepower (BHP), which generally correlates with its towing capacity.
Government Regulation We are subject to various U.S. federal, state and local statutes and regulations governing the ownership, operation and maintenance of vessels. Our U.S. flagged vessels are subject to the jurisdiction of the U.S. Coast Guard (USCG), the U.S. Customs and Border Protection, and the U.S. Maritime Administration.
The STCW, as amended, establishes additional minimum standards relating to training, including security training, certification and watchkeeping for our seafarers. Other Governmental Regulations We are subject to various U.S. federal, state and local statutes and regulations governing the ownership, operation and maintenance of vessels. Our U.S. flagged vessels are subject to the jurisdiction of the U.S.
Environmental Regulations During the ordinary course of business, our operations are subject to a wide variety of environmental laws and regulations, including without limitation, those that govern the discharge of oil, oil products and other pollutants into navigable waters. Violations of these laws may result in civil and criminal penalties, fines, injunctions and other sanctions.
Maritime Regulations – Environmental During the ordinary course of business, our operations are subject to numerous international, multi-national, national, state and local environmental laws, regulations and treaties that govern air emissions, waste management, and the storage, handling, use and disposal of hazardous substances, including the discharge of oil, oil products and other pollutants into navigable waters.
As of December 31, 2023, we had repurchased and retired 590,499 shares for approximately $35.0 million, excluding commissions and a 1% excise tax. Vessel Classifications Our primary vessel classifications include Anchor Handling Towing Supply Vessels (AHTS) and Platform Supply Vessels (PSVs). We also operate a small number of other specialty vessels.
Vessel Classifications Our primary vessel classifications include Anchor Handling Towing Supply Vessels (AHTS) and Platform Supply Vessels (PSVs). We also operate a small number of other specialty vessels. A description of the type of vessels categorized in each vessel class and the services typically performed follows.
Many of our PSVs also have oil recovery, firefighting, standby rescue and/or other specialized equipment. The Solstad Acquisition added 37 PSVs to our fleet. As of December 31, 2023, we operated 141 PSVs throughout our service regions. ● Large PSVs. Generally, this vessel class includes PSVs that have greater than 900 square meters of deck space.
Generally, this vessel class includes PSVs that have greater than 900 square meters of deck space. As of December 31, 2024, we operated 69 Large PSVs. 5 Table of Contents Other Vessels Our other vessel classes include crew boats, utility vessels and offshore tugs.
For further discussion of ESG risks and considerations see “Risk Factors” in Item 1A and “Management’s Discussion and Analysis of Financial Condition and Results of Operations” in Item 7 of this Form 10-K. Reporting Segments Prior to 2022, we managed our business through four segments including the Americas, Middle East/Asia Pacific, Europe/Mediterranean, and West Africa.
Our Safety & Sustainability Committee oversees our safety policies, procedures, metrics and incidents as well as our sustainability strategy. For further discussion of environmental and other sustainability risks and considerations see “Risk Factors” in Item 1A and “Management’s Discussion and Analysis of Financial Condition and Results of Operations” in Item 7 of this Form 10-K.
Deepwater oil and gas development typically involves significant capital investment and multi-year development plans. Although deepwater projects are typically less susceptible to short-term fluctuations in commodity prices, they are generally more costly than onshore and other offshore exploration and development.
Although deepwater projects are typically less susceptible to short-term fluctuations in commodity prices, they are generally more costly than onshore and other offshore exploration and development. 4 Table of Contents We expect global offshore windfarm developments to increase over the coming years and believe these developments may provide additional opportunities for a certain cross-section of our larger vessels.
Removed
As of December 31, 2023, we operated 72 Medium PSVs. 6 Table of Contents Other Vessels Our other vessel classes include crew boats, utility vessels and offshore tugs. Crew boats and utility vessels are chartered to customers for use in transporting personnel and supplies from shore bases to offshore drilling rigs, platforms and other installations.
Added
Depending on vessel capabilities and availability, our vessels operate in the shallow, intermediate and deepwater offshore markets. Deepwater oil and gas development typically involves significant capital investment and multi-year development plans.
Removed
Since its initial entry into force on August 20, 2013, 90 countries have ratified the MLC. We maintain certification of our vessels to MLC requirements, perform maintenance and repairs at shipyards, and make port calls during ocean voyages in accordance with the MLC based on the dates of enforcement by countries in which we operate.
Added
As of December 31, 2024, we operated 52 AHTS vessels throughout our service regions. During the year ended December 31, 2024, our AHTS vessels contributed approximately 21.0 % of our vessel revenue. ● Small AHTS class. Generally, this vessel class includes AHTS vessels that have up to 8,000 BHP.
Removed
In addition, where possible, we continue to work with identified flag states to seek substantial equivalencies to comparable national and industry laws that meet the intent of the MLC and allow us to standardize operational protocols among our fleet.
Added
Many of our PSVs also have oil recovery, firefighting, standby rescue and/or other specialized equipment. PSV capabilities are typically distinguished by the vessel’s deck space and cargo capacity which indicates the size of the loads it can carry. As of December 31, 2024, we operated 139 PSVs throughout our service regions.
Removed
Based on the latest information available to us, we believe less than 24% of our outstanding common stock was owned by non-U.S. Citizens as of December 31, 2023. 8 Table of Contents Our vessel operations in the GOM are considered coastwise trade.
Added
Offshore tugs are used to tow floating drilling rigs and barges; to assist in the docking of tankers; and to assist pipe laying, cable laying and construction barges. During the year ended December 31, 2024, our other vessels contributed approximately 4.0% of our vessel revenue.
Removed
Our U.S. flagged AHTS vessels, PSVs and other vessels are required to undergo periodic inspections generally twice within every five-year period pursuant to USCG regulations.
Added
As of December 31, 2024, we operated 20 vessels classified as other. During January and February of 2025, we took delivery of five Alucat crew boats and recorded debt of approximately EUR 9.4 million ($9.7 million).

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Item 1A. Risk Factors

Risk Factors — what could go wrong, per management

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Biggest changeDownturns in the oil and gas industry have often resulted in lower expenditures by our customers and reduced demand for our services, which in the past has, and in the future may have, material adverse effects on our financial condition, results of operations and cash flows. ● Factors associated with global climate change, including evolving and increasing regulations, increasing global concern and stakeholder scrutiny about climate change, and increasing frequency and/or severity of adverse weather events or conditions could adversely affect our business, reputation, results of operations and financial position. ● Failure to effectively and timely address the energy transition could adversely affect our business, results of operations and cash flows. ● In connection with implementing our business strategy, we face risks associated with identifying acquisition targets, integrating any acquisitions or mergers and growing the business from the acquisition. ● We derive a significant amount of revenue from a relatively small number of customers. ● We may not be able to collect amounts owed to us by our customers. ● Our customer base has undergone consolidation and additional consolidation is possible. ● The high level of competition in the offshore marine service industry could negatively impact pricing for our services. ● The rise in production of unconventional oil and gas resources could increase supply without a commensurate growth in demand which could negatively impact oil and gas prices. ● Maintaining our current fleet and acquiring vessels required for additional future growth require significant capital. ● We may not be able to renew or replace expiring contracts for our vessels. ● Early termination of contracts on our vessels could have an adverse effect on our operations and our backlog may not be converted to actual operating results for any future period. ● We may record additional losses or impairment charges related to our vessels. ● We may not be able to sell vessels to improve our cash flow and liquidity because we may be unable to locate buyers with access to financing or to complete any sales on acceptable terms or within a reasonable timeframe. ● An increase in vessel supply without a corresponding increase in the working offshore rig count could lead to a decline in the charter day rates we can charge and negatively impact our revenue. ● Our insurance coverage and contractual indemnity protections may not be sufficient to protect us under all circumstances or against all risks. 16 Table of Contents Risks Relating to Our International and Foreign Operations ● We operate throughout the world and are exposed to risks inherent in doing business in countries other than the U.S., including risks associated with foreign corrupt practices laws, acts of piracy, war, terrorist attacks and international hostilities. ● Global or regional public health crises and other catastrophic events could reduce economic activity resulting in lower commodity prices and could affect our crew rotations and entry into ports. ● We may have disruptions or disagreements with our foreign joint venture partners, which could lead to an unwinding of the joint venture. ● Our international operations expose us to currency devaluation and fluctuation risk.
Biggest changeDownturns in the oil and gas industry have often resulted in lower expenditures by our customers and reduced demand for our services, which in the past has, and in the future may have, material adverse effects on our financial condition, results of operations and cash flows. ● Factors associated with environmental, social and governance matters, including evolving and expanding regulations, varied and expansive scope of standards, rating criteria, our sustainability disclosures, and the perception and expectations of the public and our stakeholders could adversely affect our business, reputation, results of operations and financial position. ● At certain locations where we operate, an increased potential for seasonal weather events exists that could lead to limits or restrictions on our ability to operate, damage to our assets and equipment, liabilities or claims, operational delays for recovery and repair, impacts on customer and vendor contracts, regulatory fines and penalties, and uninsured losses, which could adversely affect our business. ● Failure to effectively and timely address the energy transition could adversely affect our business, results of operations and cash flows. ● As we implement our business strategy, we face risks associated with identifying acquisition targets, integrating any acquisitions or mergers and growing the business from the acquisition. ● We derive a significant amount of revenue from a relatively small number of customers. ● We may not be able to collect amounts owed to us by our customers. ● Our customer base has undergone consolidation and additional consolidation is possible. ● The high level of competition in the offshore marine service industry could negatively impact pricing for our services. ● The rise in production of oil and gas resources could increase supply without a commensurate growth in demand which could negatively impact oil and gas prices. ● Maintaining our current fleet and acquiring vessels required for additional future growth requires significant capital. ● We may not be able to renew or replace expiring contracts for our vessels. ● Early termination of contracts on our vessels could have an adverse effect on our operations and our backlog may not be converted to actual operating results for any future period. ● We may record impairment charges or other losses related to our vessels. ● We may not be able to sell vessels because we may be unable to locate buyers with access to financing or to complete any sales on acceptable terms or within a reasonable timeframe. ● An increase in vessel supply without a corresponding increase in the working offshore rig count could lead to a decline in the charter day rates we can charge and negatively impact our revenue. ● Our insurance coverage and contractual indemnity protections may not be sufficient to protect us under all circumstances or against all risks. 17 Table of Contents Risks Relating to Our International and Foreign Operations ● We operate in various regions throughout the world and are exposed to many risks inherent in doing business outside the U.S., including risks associated with foreign corrupt practices laws, acts of piracy, war, terrorist attacks and international hostilities. ● Disruptions or disagreements with our foreign joint venture partners could lead to an unwinding of the joint venture. ● Our international operations expose us to currency devaluation, exchange and conversion risk.
War or risk of war or any such attack, such as the current conflict in the Ukraine, and the international response to such events may also have an adverse effect on the economy, which could adversely affect activity in offshore oil and gas exploration, development and production and the demand for our services.
War or risk of war or any such attack, such as the current conflict in Ukraine, and the international response to such events may also have an adverse effect on the economy, which could adversely affect activity in offshore oil and gas exploration, development and production and the demand for our services.
Investors may experience dilution in the value of their investment upon the exercise of any outstanding warrants or the vesting of any equity awards granted under our stock incentive plans.
Investors may experience dilution in the value of their investment upon the exercise of any outstanding warrants or the exercise or vesting of any equity awards granted under our stock incentive plans.
General Data Protection Regulation (GDPR), export laws and other similar laws applicable to our operations in international markets; an inability to recruit, retain or obtain work visas for workers of international operations; deprivation of contract rights; difficulties or delays in collecting customer and other accounts receivable; changing taxation policies; fluctuations in currency exchange rates; foreign currency revaluations and devaluations; restrictions on converting foreign currencies into U.S. dollars; expatriating customer and other payments made in jurisdictions outside of the U.S.; civil unrest, acts of terrorism, war or other armed conflict (further described below); and import/export quotas and restrictions or other trade barriers, most of which are beyond our control. 24 Table of Contents We are also subject to risks relating to war, sabotage, piracy, kidnappings and terrorism or any similar risk that may put our personnel at risk and adversely affect our operations in unpredictable ways, including changes in the insurance markets as a result of war, sabotage, piracy or kidnappings, disruptions of fuel supplies and markets, particularly oil, and the possibility that infrastructure facilities, including pipelines, production facilities, refineries, electric generation, transmission and distribution facilities, offshore rigs and vessels, and communications infrastructures, could be direct targets of, or indirect casualties of, an act of war, piracy, sabotage or terrorism.
General Data Protection Regulation (GDPR), export laws and other similar laws applicable to our operations in international markets; an inability to recruit, retain or obtain work visas for workers of international operations; deprivation of contract rights; difficulties or delays in collecting customer and other accounts receivable; changing taxation policies; fluctuations in currency exchange rates; foreign currency revaluations and devaluations; restrictions on converting foreign currencies into U.S. dollars; expatriating customer and other payments made in jurisdictions outside of the U.S.; civil unrest, acts of terrorism, war or other armed conflict (further described below); and import/export quotas and restrictions or other trade barriers, most of which are beyond our control. 25 Table of Contents We are also subject to risks relating to war, sabotage, piracy, kidnappings and terrorism or any similar risk that may put our personnel at risk and adversely affect our operations in unpredictable ways, including changes in the insurance markets as a result of war, sabotage, piracy or kidnappings, disruptions of fuel supplies and markets, particularly oil, and the possibility that infrastructure facilities, including pipelines, production facilities, refineries, electric generation, transmission and distribution facilities, offshore rigs and vessels, and communications infrastructures, could be direct targets of, or indirect casualties of, an act of war, piracy, sabotage or terrorism.
Non-compliance could also result in significant fines, damages, and other criminal sanctions against us, our officers or our employees, prohibitions or additional requirements on the conduct of our business and damage our reputation. 28 Table of Contents Further, many of the countries in which we operate have laws, regulations and enforcement systems that are less well developed than the laws, regulations and enforcement systems of the U.S., and the requirements of these systems are not always readily discernible even to experienced and proactive participants.
Non-compliance could also result in significant fines, damages, and other criminal sanctions against us, our officers or our employees, prohibitions or additional requirements on the conduct of our business and damage our reputation. 29 Table of Contents Further, many of the countries in which we operate have laws, regulations and enforcement systems that are less well developed than the laws, regulations and enforcement systems of the U.S., and the requirements of these systems are not always readily discernible even to experienced and proactive participants.
General Risks Factors ● Uncertain economic conditions may lead our customers to postpone capital spending or jeopardize our customers’ or other counterparties’ ability to perform their obligations. ● Severe weather events, including extreme weather conditions associated with climate change, have in the past and may in the future adversely affect our operations and financial results. 18 Table of Contents Risk Factors Risks Relating to Our Business and Industry Demand for our services is substantially dependent on the level of capital spending by our customers.
General Risks Factors ● Uncertain economic conditions may lead our customers to postpone capital spending or jeopardize our customers’ or other counterparties’ ability to perform their obligations. ● Severe weather events, including extreme weather conditions associated with climate change, have in the past and may in the future adversely affect our operations and financial results. 19 Table of Contents Risk Factors Risks Relating to Our Business and Industry Demand for our services is substantially dependent on the level of capital spending by our customers.
These provisions provide for, among other things: ● the ability of our Board to issue, and determine the rights, powers and preferences of, one or more series of preferred stock; ● advance notice for nominations of directors by stockholders and for stockholders to present matters for consideration at our annual meetings; 32 Table of Contents ● limitations on convening special stockholder meetings; ● the prohibition on stockholders to act by written consent; ● supermajority vote of stockholders to amend certain provisions of the certificate of incorporation; ● limitations on expanding the size of the Board; ● the availability for issuance of additional shares of common stock; and ● restrictions on the ability of any natural person or entity that does not satisfy the citizenship requirements of the U.S. maritime laws to own, in the aggregate, more than 24% of the outstanding shares of our common stock.
These provisions provide for, among other things: ● the ability of our Board to issue, and determine the rights, powers and preferences of, one or more series of preferred stock; ● advance notice for nominations of directors by stockholders and for stockholders to present matters for consideration at our annual meetings; ● limitations on convening special stockholder meetings; ● the prohibition on stockholders to act by written consent; ● supermajority vote of stockholders to amend certain provisions of the certificate of incorporation; ● limitations on expanding the size of the Board; ● the availability for issuance of additional shares of common stock; and ● restrictions on the ability of any natural person or entity that does not satisfy the citizenship requirements of the U.S. maritime laws to own, in the aggregate, more than 24% of the outstanding shares of our common stock.
We cannot assure you that we will be granted waivers or amendments to these agreements if requested to obtain financial or operational flexibility or if for any reason we are unable to comply with these agreements, or that we will be able to refinance our debt on acceptable terms or at all. 27 Table of Contents We may not be able to obtain debt or equity financing if and when needed with favorable terms, if at all.
We cannot assure you that we will be granted waivers or amendments to these agreements if requested to obtain financial or operational flexibility or if for any reason we are unable to comply with these agreements, or that we will be able to refinance our debt on acceptable terms or at all. 28 Table of Contents We may not be able to obtain debt or equity financing if and when needed with favorable terms, if at all.
Because we are not generally protected by the damage limits imposed by state workers’ compensation statutes for these types of claims, we may have greater exposure for any claims made by these employees. 26 Table of Contents Risks Related to Our Indebtedness We may not be able to generate sufficient cash flow to meet our debt service and other obligations.
Because we are not generally protected by the damage limits imposed by state workers’ compensation statutes for these types of claims, we may have greater exposure for any claims made by these employees. 27 Table of Contents Risks Related to Our Indebtedness We may not be able to generate sufficient cash flow to meet our debt service and other obligations.
In any case, an early termination of a contract may result in one or more of our vessels being idle for an extended period. Each of these results could have a material adverse effect on our financial condition, results of operations and cash flows. We may record additional losses or impairment charges related to our vessels.
In any case, an early termination of a contract may result in one or more of our vessels being idle for an extended period. Each of these results could have a material adverse effect on our financial condition, results of operations and cash flows. We may record impairment charges or other losses related to our vessels.
The rise in production of unconventional oil and gas resources could increase supply without a commensurate growth in demand which could negatively impact oil and gas prices.
The rise in production of oil and gas resources could increase supply without a commensurate growth in demand which could negatively impact oil and gas prices.
In addition, laws and regulations governing cybersecurity, data privacy and the unauthorized disclosure of confidential or protected information, including GDPR, legislation in certain U.S. states and the recently effective SEC rules regarding cybersecurity, pose increasingly complex compliance challenges and potentially elevate costs.
In addition, laws and regulations governing cybersecurity, data privacy and the unauthorized disclosure of confidential or protected information, including GDPR, legislation in certain U.S. states and the SEC rules regarding cybersecurity, pose increasingly complex compliance challenges and potentially elevate costs.
Governments could also pass laws or regulations encouraging or mandating the use of alternative energy sources such as wind power and solar energy. These requirements could reduce demand for oil and gas and as a result, reduce demand for the services we provide our customers.
Governments may also pass laws or regulations encouraging or mandating the use of alternative energy sources such as wind power and solar energy. These regulations could reduce demand for oil and gas and as a result, reduce demand for the services we provide our customers.
Most of our revenues and net income are generated by our operations outside of the U.S. Our effective tax rate has historically averaged approximately 30% until recent years where the decline of the oil and gas market significantly impacted our operations and overall effective tax rate.
Most of our revenues and net income are generated by our operations outside of the U.S. Our effective tax rate has historically averaged approximately 30% until recent years when the decline of the oil and gas market significantly impacted our operations and overall effective tax rate.
In recent years, publicly-traded companies have been increasingly subject to demands from activist stockholders advocating for changes to corporate governance practices, such as executive compensation practices, ESG issues, or for certain corporate actions or reorganizations.
In recent years, publicly traded companies have been increasingly subject to demands from activist stockholders advocating for changes to corporate governance practices, such as executive compensation practices, sustainability issues, or for certain corporate actions or reorganizations.
Thus, our security holders bear the risk of our future securities offerings reducing the market price of our common stock or other securities, diluting their interest or being subject to rights and preferences senior to their own. Certain provisions and limitations on foreign ownership in our organizational documents could delay or prevent a change of control.
Thus, our security holders bear the risk of our future securities offerings reducing the market price of our common stock or other securities, diluting their interest or being subject to rights and preferences senior to their own. 33 Table of Contents Certain provisions and limitations on foreign ownership in our organizational documents could delay or prevent a change of control.
These agreements and measures, including the Paris Climate Accord, the Kyoto Protocol, the European Union Emission Trading System, the United Kingdom’s Carbon Reduction Commitment, the International Maritime Organization’s MARPOL Annex VI amendments, and, in the U.S., the Regional Greenhouse Gas Initiative, the Western Regional Climate Action Initiative, and other various state programs, may require, or could result in future legislation and regulatory measures that require significant equipment and fleet modifications, operational changes, taxes, or purchase of emission credits to reduce emission of greenhouse gases from our operations, which may result in substantial capital expenditures and compliance, operating, maintenance and remediation costs.
For example, the Paris Climate Accord, the Kyoto Protocol, the European Union Emission Trading System, the United Kingdom’s Carbon Reduction Commitment, the International Maritime Organization’s MARPOL Annex VI amendments, and, in the U.S., the Regional Greenhouse Gas Initiative, the Western Regional Climate Action Initiative, and other various state programs, may require, or could result in future legislation and regulatory measures that require significant equipment and fleet modifications, operational changes, taxes, or purchase of emission credits to reduce emission of greenhouse gases from our operations, which may result in substantial capital expenditures and compliance, operating, maintenance and remediation costs.
The rise in production of unconventional oil and gas resources in North America, and the commissioning of several new large Liquefied Natural Gas (LNG) export facilities around the world have in the past and could in the future result in an over-supplied gas market. Production from unconventional resources has increased as drilling efficiencies have improved, lowering the costs of extraction.
The rise in production of oil and gas resources in North America, and the commissioning of several new large Liquefied Natural Gas (LNG) export facilities around the world have in the past and could in the future result in over-supplied oil and gas market. Production has increased as drilling efficiencies have improved, lowering the costs of extraction.
The inability or unwillingness of our customers to fulfill their contractual commitments to us may have a material adverse effect on our current and future business, financial position, results of operations, and cash flows. 21 Table of Contents Our customer base has undergone consolidation and additional consolidation is possible.
The inability or unwillingness of our customers to fulfill their contractual commitments to us may have a material adverse effect on our current and future business, financial position, results of operations, and cash flows. Our customer base has undergone consolidation and additional consolidation is possible.
Although some of these contracts have early termination remedies in our favor or other provisions designed to discourage our customers from exercising such options, we cannot assure you that our customers would not choose to exercise their termination rights despite such remedies or the threat of litigation with us.
Although some of these contracts have early termination remedies in our favor or other provisions designed to discourage early termination, we cannot assure you that our customers would not choose to exercise their termination rights despite such remedies or the threat of litigation with us.
Our international operations expose us to currency devaluation and fluctuation risk. Our international operations are exposed to foreign currency exchange rate risks on all charter hire contracts denominated in foreign currencies.
Our international operations expose us to currency devaluation, exchange and conversion risk. Our international operations are exposed to foreign currency exchange rate risks on all charter hire contracts denominated in foreign currencies.
Our business, financial condition and operating results can be affected by several factors, whether currently known or unknown, including but not limited to those described below, any one or more of which could, directly or indirectly, cause our actual financial condition and operating results to vary materially from those anticipated, projected or assumed in the forward-looking statements.
Our business, financial condition and operating results can be affected by several factors, whether currently known or unknown, including but not limited to those described below. Any of these factors could, directly or indirectly, cause our actual financial condition and operating results to vary materially from those anticipated, projected or assumed in the forward-looking statements.
Risks Relating to Our Indebtedness ● We may not be able to generate sufficient cash flow to meet our debt service and other obligations. ● Restrictive covenants in our debt agreements may restrict our ability to raise capital, make distributions on our stock or pursue our other business strategies, which may have significant consequences for our operations and future prospects. ● The amount of our debt could have significant consequences for our operations and future prospects. ● We may not be able to obtain debt financing if and when needed with favorable terms, if at all.
Risks Relating to Our Indebtedness ● We may not be able to generate sufficient cash flow to meet our debt service and other obligations. ● Restrictive covenants in our debt agreements may restrict our ability to raise capital, make distributions on our stock or pursue our other business strategies, which may have significant consequences for our operations and future prospects. ● We may not be able to obtain debt or equity financing if and when needed with favorable terms, if at all.
Disputes over the terms of these agreements or our potential inability to negotiate acceptable contracts with the unions that represent our employees under these agreements could result in strikes, work stoppages or other slowdowns by the affected workers. Further, efforts have been made from time to time to unionize other portions of our workforce, including our GOM employees.
Disputes over the terms of these agreements or our potential inability to negotiate acceptable contracts with the unions that represent our employees under these agreements could result in strikes, work stoppages or other slowdowns by the affected workers. Further, efforts have been made from time to time to unionize other portions of our workforce, including our U.S. Gulf employees.
Stringent federal, state, local and foreign laws and regulations relating to several aspects of our business, including anti-bribery and anti-corruption laws, import and export controls, the environment, worker health and safety, labor and employment, taxation, antitrust and fair competition, data privacy protections, securities regulations and other regulatory and legal requirements that significantly affect our operations.
Stringent federal, state, local and foreign laws and regulations relating to several aspects of our business, including anti-bribery and anti-corruption laws, import and export controls, environmental protection, worker health and safety, labor and employment, taxation, antitrust and fair competition, data privacy protections, securities regulations and other regulatory and legal requirements that significantly affect our operations.
We may have disruptions or disagreements with our foreign joint venture partners, which could lead to an unwinding of the joint venture. We operate in several foreign areas through joint ventures with local companies, in some cases due to local laws requiring local company ownership.
Disruptions or disagreements with our foreign joint venture partners, could lead to an unwinding of the joint venture. We operate in several foreign areas through joint ventures with local companies, in some cases due to local laws requiring local company ownership.
In addition, the Delaware General Corporation Law imposes restrictions on mergers and other business combinations between us and any holder of 15% or more of our outstanding common stock. The exercise of outstanding warrants or the issuance of stock-based awards may dilute our common stock.
In addition, the Delaware General Corporation Law imposes restrictions on mergers and other business combinations between us and any holder of 15% or more of our outstanding common stock. The issuance of stock-based awards may dilute our stockholders.
We use computerized systems to help run our financial and operations functions, including the processing of payment transactions, store confidential records and conduct vessel operations, which may subject our business to increased risks. If any of our financial, operational, or other technology systems fail or have other significant shortcomings, our financial results could be adversely affected.
We use computerized systems to help run our financial and operations functions, including the processing of payment transactions, storing confidential records and conducting vessel operations, which may subject our business to increased risks. If any of our financial, operational, or other technology systems fail or have other significant shortcomings, our financial results could be adversely affected.
We monitor the currency exchange risks associated with all contracts not denominated in U.S. dollars. 25 Table of Contents Risks Related to Human Capital Failure to attract and retain qualified personnel could impede our operations . Our future success depends on our ability to recruit, train, retain and pay qualified personnel.
We actively monitor the currency exchange risks associated with our contracts not denominated in U.S. dollars. 26 Table of Contents Risks Related to Human Capital Failure to attract and retain qualified personnel could impede our operations . Our future success depends on our ability to recruit, train, retain and pay qualified personnel.
We can give no assurance that we will have sufficient capital resources to build or acquire the vessels required to expand or to maintain our current fleet size and vessel configuration. 22 Table of Contents W e may not be able to renew or replace expiring contracts for our vessels.
We can give no assurance that we will have sufficient capital resources to build or acquire the vessels required to expand or to maintain our current fleet size and vessel configuration. W e may not be able to renew or replace expiring contracts for our vessels.
Risks Relating to Our International and Foreign Operations We operate in various regions throughout the world and are exposed to many risks inherent in doing business in countries other than the U.S., including risks associated with foreign corrupt practices laws, a cts of piracy, war, terrorist attacks and international hostilities.
Risks Relating to Our International and Foreign Operations We operate in various regions throughout the world and are exposed to many risks inherent in doing business outside the U.S., including risks associated with foreign corrupt practices laws, a cts of piracy, war, terrorist attacks and international hostilities.
Certain of our operations are conducted in the U.S. coastwise trade and are governed by the U.S. federal law commonly known as the Jones Act. The Jones Act restricts waterborne transportation of goods and passengers between points in the U.S. to vessels owned and controlled by “U.S. Citizens” as defined thereunder.
Citizen stockholders. Some of our operations are conducted in the U.S. coastwise trade and are governed by the U.S. federal law commonly known as the Jones Act. The Jones Act restricts waterborne transportation of goods and passengers between points in the U.S. to vessels owned and controlled by “U.S. Citizens” as defined thereunder.
In addition, valuations supporting our acquisitions and strategic investments could change rapidly with changes in the global economic climate. There can be no assurance that we will realize the anticipated synergies or cost savings related to acquisitions, including, but not limited to, revenue growth and operational efficiencies, or that they will be achieved in our estimated timeframe.
In addition, valuations supporting our acquisitions and strategic investments could change rapidly with changes in the global economic climate. There can be no assurance that we will realize the anticipated synergies or cost savings related to acquisitions, including, but not limited to, revenue growth and operational efficiencies, within our estimated timeframe or at all.
Any limitations in our ability to finance future capital expenditures may limit our ability to respond to changes in customer preferences, technological change and other market conditions, which may diminish our competitive position within our sector.
Any limitations in our ability to finance future capital expenditures may limit our ability to respond to changes in customer preferences, technological change and other market conditions, which may diminish our competitive position in our industry.
For some of our international contracts, a portion of the revenue and local expenses is incurred in local currencies, which subjects us to risk of changes in the exchange rates between the U.S. dollar and foreign currencies. In some instances, we receive payments in currencies that are not easily traded and may be illiquid.
For some of our international contracts, a portion of the revenue and local expenses is incurred in local currencies, which subjects us to risk of changes in the exchange rates between the U.S. dollar and foreign currencies. In some instances, we receive payments in currencies that are not easily traded, difficult to convert into U.S. dollars or may be illiquid.
The market price of our common stock could be subject to wide fluctuations in response to, and the level of trading that develops with our common stock may be affected by, numerous factors beyond our control such as, actual or anticipated variations in our operating results and cash flow, business conditions in our markets and the general state of the securities markets and the market for energy-related stocks, as well as general economic and market conditions and other factors that may affect our future results, including those described in this Form 10-K.
These fluctuations and the level of trading that develops with our common stock may be affected by, numerous factors beyond our control such as, actual or anticipated variations in our operating results and cash flow, business conditions in our markets and the general state of the securities markets and the market for energy-related stocks, as well as general economic and market conditions and other factors that may affect our future results, including those described in this Form 10-K.
The exercise of equity awards, including any restricted stock units that we may grant in the future, and the exercise of warrants and the subsequent sale of shares of common stock issued thereby, could have an adverse effect on the market for our common stock, including the price that an investor could obtain for their shares.
The exercise or vesting of equity awards, including any options, restricted stock units or other stock-based awards that we may grant in the future, and the exercise of warrants and the subsequent sale of shares of common stock issued thereby, could have an adverse effect on the market for our common stock, including the price that an investor could obtain for their shares.
In addition, dependence upon automated systems, including those on board our vessels, may further increase the risk of operational system flaws, and employee or other tampering or manipulation of those systems will result in losses that are difficult to detect. Cybersecurity incidents are increasing in frequency and magnitude.
In addition, dependence upon automated systems, including those on board our vessels, may further increase the risk of operational system flaws, and employee or other tampering or manipulation of those systems will result in losses that are difficult to detect.
In connection with implementing our business strategy, we face risks associated with identifying acquisition targets, integrating any acquisitions or mergers and growing the business from the acquisition, including our ability to finance any such acquisitions. Mergers and acquisitions have historically been and continue to be a key element of our business strategy.
As we implement our business strategy, we face risks associated with identifying acquisition targets, integrating any acquisitions or mergers and growing the business from the acquisition, including our ability to finance any such acquisitions. Mergers and acquisitions have historically been and continue to be a key element of our business strategy.
Any purported transfer of our common stock in violation of these ownership provisions will be ineffective to transfer the common stock or any voting, dividend or other rights associated with such common stock. The existence and enforcement of these requirements could have an adverse impact on the liquidity or market value of our equity securities if U.S.
Any purported transfer of our common stock in violation of these ownership provisions will be null and void, and thus an ineffective transfer of such common stock, including any voting, dividend or other rights associated therewith. The existence and enforcement of these requirements could have an adverse impact on the liquidity or market value of our equity securities if U.S.
We cannot be certain that we will be successful in attracting and retaining qualified personnel to crew our vessels in the future. We have faced and may continue to face difficulties attracting, hiring and retaining highly-skilled personnel with appropriate qualifications and may not be able to fill open positions.
We cannot guarantee success in attracting and retaining qualified personnel to crew our vessels in the future. We have faced and may continue to face difficulties attracting, hiring and retaining highly-skilled personnel with appropriate qualifications and may not be able to fill open positions.
We must meet certain financial and liquidity criteria to maintain the listing of our common stock on the NYSE and our GLF Equity Warrants on the NYSE American. If we fail to meet any of the applicable listing standards, our common stock or GLF Equity Warrants may be delisted.
We must meet certain financial and liquidity criteria to maintain the listing of our common stock on the NYSE. If we fail to meet any of the applicable listing standards, our common stock may be delisted.
Additionally, shares of our common stock have been reserved for issuance under our 2021 Stock Incentive Plan, 2017 Stock Incentive Plan and Legacy GulfMark Stock Incentive Plan, respectively, as equity-based awards to employees, directors and certain other persons.
Shares of our common stock have been reserved for issuance under our 2021 Stock Incentive Plan as equity-based awards to employees, directors and certain other persons.
We may not be able to collect amounts owed to us by our customers. We typically grant our customers credit on a short-term basis and do not typically collateralize receivables due from customers. In addition, a number of our international customers are state-controlled and, as a result, our receivables may be subject to local political priorities out of our control.
We typically grant our customers credit on a short-term basis and do not typically collateralize receivables due from customers. In addition, a few of our international customers are state-controlled and, as a result, our receivables may be subject to local political priorities out of our control.
Moreover, higher commodity prices will not necessarily translate into increased demand for offshore support services or sustained higher pricing for offshore support vessel services, in part because customer demand is often driven by capital expenditure programs focused on future commodity price expectations and not solely on current prices, along with customer opportunities to invest in onshore conventional and unconventional oil and gas production. 19 Table of Contents Although commodity prices have recovered from historic lows seen in 2020, many of our customers capital expenditure programs are lower than would be expected given current commodity prices and supply and demand dynamics.
Moreover, higher commodity prices will not necessarily translate into increased demand for offshore support services or sustained higher pricing for offshore support vessel services, in part because customer demand is often driven by capital expenditure programs focused on future commodity price expectations and not solely on current prices, along with customer opportunities to invest in onshore conventional and unconventional oil and gas production. 20 Table of Contents Many of our customers' capital expenditure programs are lower than expected given current commodity prices and supply and demand dynamics.
A delisting of our common stock or GLF Equity Warrants could significantly impair our ability to raise capital. 33 Table of Contents Activist stockholders could divert the attention of our management team and/or negatively affect our business.
The delisting of our common stock could significantly impair our ability to raise capital. 34 Table of Contents Activist stockholders could divert the attention of our management team and/or negatively affect our business.
A delisting of our common stock or GLF Equity Warrants may materially impair our stockholders’ and warrant holders’ ability to buy and sell our common stock or GLF Equity Warrants and could have an adverse effect on the market price of, and the efficiency of, the trading market for these securities.
The delisting of our common stock may materially impair our stockholders’ ability to buy and sell our common stock and could have an adverse effect on the market price of, and the efficiency of, the trading market for these securities.
Further, the increasing attention to ESG and sustainability has resulted in governmental investigations, and public and private litigation, which could increase our costs or otherwise adversely affect our business or results of operations.
Further, the increasing attention on climate change and other sustainability matters has resulted in governmental investigations, and public and private litigation, which could increase our costs or otherwise adversely affect our business or results of operations.
We cannot be certain that we will be able to successfully consolidate the operations and assets of any acquired business with our own business. Acquisitions may not perform as expected when the transaction was consummated and may be dilutive to our overall operating results.
We cannot be certain that we will be able to successfully consolidate the operations and assets of any acquired business with our own business. Acquisitions may not perform as expected.
We compete for business with our competitors based on price; reputation for quality service; quality, suitability and technical capabilities of our vessels; availability of vessels; safety and efficiency; cost of mobilizing vessels from one market to a different market; and national flag preference.
We compete for business with our competitors based on price; reputation for quality service; quality, suitability and technical capabilities of our vessels; availability of vessels; safety and efficiency; cost of mobilizing vessels between markets; and national flag preference.
If such indebtedness were to be accelerated, our assets may not be sufficient to repay in full our secured indebtedness. Please refer to Note (4) - “Debt” to our accompanying Consolidated Financial Statements for additional information on the debt agreements.
If such indebtedness were to be accelerated, our assets may not be sufficient to repay in full our secured indebtedness. Please refer to Note (4) - “Debt” to our accompanying Consolidated Financial Statements for additional information on the debt agreements. The restrictive covenants under our debt agreements, may limit our ability to take advantage of business opportunities.
Prolonged increases in the worldwide supply of oil and gas, whether from conventional or unconventional sources, without a commensurate growth in demand for oil and gas may depress oil and gas prices.
Prolonged increases in the worldwide supply of oil and gas without a commensurate growth in demand for oil and gas may depress oil and gas prices.
Sufficient demand and market activity may not exist to sell our vessels, and we may not be able to identify buyers with access to financing or to complete any such sales.
From time to time, we may seek to sell some of our vessels for various reasons. Sufficient demand and market activity may not exist to sell our vessels, and we may not be able to identify buyers with access to financing or to complete any such sales.
We could lose the privilege of owning and operating vessels in the Jones Act trade if non-U.S. Citizens were to own or control, in the aggregate, more than 25% of our common stock. Such loss could have a material adverse effect on our results of operations.
We could lose the privilege of owning and operating vessels in the Jones Act trade if non-U.S. Citizens were to own or control, in the aggregate, more than 25% of our common stock.
Citizens were unable to transfer our shares to non-U.S. Citizens. Furthermore, under certain circumstances, this ownership requirement could discourage, delay or prevent a change of control. 31 Table of Contents The market price of our securities is subject to volatility.
Citizens were unable to transfer our shares to non-U.S. Citizens. Furthermore, under certain circumstances, this ownership requirement could discourage, delay or prevent a change of control or potentially complicate any acquisition with assets or ownership held outside the U.S. The market price of our securities is subject to volatility.
Given the unpredictability of these possible changes and their potential interdependency, it is very difficult to assess whether the overall effect of such potential tax changes would be cumulatively positive or negative for our earnings and cash flow, but such changes could adversely impact our financial results.
Given the unpredictability of these possible changes and their potential interdependency, it is very difficult to assess whether the overall effect of such potential tax changes would be cumulatively positive or negative for our earnings and cash flow, but such changes could adversely impact our financial results. 30 Table of Contents In addition, our income tax returns are subject to review and examination by the U.S.
The lack of an active market may impair your ability to sell or reduce the fair market value of your New Creditor Warrants or GLF Creditor Warrants at the time you wish to sell them or at a price that you consider reasonable.
The lack of an active market may impair your ability to sell or reduce the fair market value of your New Creditor Warrants or GLF Creditor Warrants at the time you wish to sell them or at a price that you consider reasonable. We may not be able to maintain a listing of our common stock on the NYSE .
While it is normal for our customer base to change over time as our time charter contracts expire and are replaced, our results of operations, financial condition and cash flows could be materially adversely affected if one or more of these customers were to decide to interrupt or curtail their activities, in general, or their activities with us, terminate their contracts with us, fail to renew existing contracts with us, and/or refuse to award us new contracts.
While it is normal for our customer base to change over time as our time charter contracts expire and are replaced, our results of operations, financial condition and cash flows could be materially adversely affected if one or more of these customers were to (i) interrupt or curtail their activities generally or with us, (ii) terminate their contracts with us, (iii) fail to renew existing contracts with us, or (iv) refuse to award us new contracts. 22 Table of Contents We may not be able to collect amounts owed to us by our customers.
We may be subject to additional unionization efforts, new collective bargaining agreements or work stoppages. In locations in which we are required to do so, we have union workers subject to collective bargaining agreements, which are subject to periodic negotiation. These negotiations could result in higher personnel expenses, other increased costs, or increased operational restrictions.
We may be subject to additional unionization efforts, new collective bargaining agreements or work stoppages. In certain locations, we employ unionized workers subject to collective bargaining agreements that require periodic negotiation. These negotiations could result in higher personnel expenses, other increased costs, or increased operational restrictions.
Any future determination to pay cash dividends, implement additional stock repurchase plans or make other distributions on our common stock will be at the sole discretion of our Board, subject to any restrictions in our debt agreements and, if we elect to implement such distribution or repurchase plans in the future, we may reduce or discontinue such plans entirely thereafter at any time.
Any future determination to pay cash dividends, implement additional stock repurchase plans or make other distributions on our common stock will be at the sole discretion of our Board, subject to any restrictions in our debt agreements.
Any determination that we have violated applicable anti-bribery laws in countries in which we do business could have a material adverse effect on our business and business reputation, as well as our results of operations, and cash flows.
Any determination that we have violated applicable anti-bribery laws in countries in which we do business could have a material adverse effect on our business and business reputation, as well as our results of operations, and cash flows. Changes to applicable laws or regulations, including any developing laws and regulations, may increase our compliance costs and operational risk.
Our ability to make payments on our indebtedness and to fund our operations depends on our ability to maintain sufficient cash flows.
Our ability to service our debts and to fund our operations depends on our ability to maintain sufficient cash flows.
Risks Relating to Our Human Capital ● Failure to attract and retain qualified personnel could impede our operations. ● We may be subject to additional unionization efforts, new collective bargaining agreements or work stoppages. ● Certain of our employees are covered by both state and federal laws that may subject us to job-related claims.
Risks Relating to Our Human Capital ● Failure to attract and retain qualified personnel could impede our operations. ● We may be subject to additional unionization efforts, new collective bargaining agreements or work stoppages. ● Our participation in industry-wide, multi-employer defined benefit pension plans expose us to potential future losses. ● Certain of our employees are covered by federal laws that may subject us to job-related claims in addition to those provided by state laws.
Our debt agreements also require us to comply with certain financial covenants, including maintaining minimum liquidity and consolidated equity amounts and an interest coverage ratio. We may be unable to meet or comply with these financial covenants, which could result in a default under the debt agreements.
Our debt agreements impose certain financial covenants, including requirements to maintain minimum liquidity and consolidated equity amounts and an interest coverage ratio. If we fail to meet or comply with these financial covenants, it could result in a default under the debt agreements.
The terms for our 8.50% Senior Secured Bonds due in 2026, the Senior Secured Term Loan, 10.375% Senior Unsecured Notes due July 2028 and the Super Senior Revolving Credit Facility Agreement due in 2026 with DNB Bank ASA, New York Branch, as Facility Agent, Nordic Trustee AS, as Security Trustee, and certain other institutions (the Credit Facility Agreement) contain certain restrictive covenants.
The terms for our 8.50% Senior Secured Bonds due in 2026, the Senior Secured Term Loan, 10.375% Senior Unsecured Notes due July 2028 and the Super Senior Revolving Credit Facility Agreement due in 2026 (the Credit Facility Agreement) contain certain restrictive covenants.
Any such extreme weather events may result in increased operating costs or decreases in revenue. 34 Table of Contents ITEM 1B. UNRESOLVED STAFF COMMENTS None.
Any such extreme weather events may result in increased operating costs or decreases in revenue. 35 Table of Contents
If any tax authority successfully challenges our operational structure or intercompany transfer pricing policies, or if the terms of certain income tax treaties were to be interpreted in a manner that is adverse to our structure, or if we lose a material tax dispute in any country, our effective tax rate on our worldwide earnings could increase, and our financial condition and results of operations could be materially and adversely affected. 29 Table of Contents Changes in environmental regulations, including climate change and greenhouse gas restrictions, and evolving environmental expectations may reduce demand for hydrocarbons, increase our compliance costs, harm our reputation and adversely affect our financial results.
If any tax authority successfully challenges our operational structure or intercompany transfer pricing policies, or if the terms of certain income tax treaties were to be interpreted in a manner that is adverse to our structure, or if we lose a material tax dispute in any country, our effective tax rate on our worldwide earnings could increase, and our financial condition and results of operations could be materially and adversely affected.
Excess capacity can occur when newly constructed vessels enter the worldwide offshore support vessel market and when vessels migrate between markets. 23 Table of Contents An increase in vessel capacity without a corresponding increase in the working offshore rig count could lead to a decline in the charter day rates we can charge and adversely affect our business, results of operations and financial condition.
An increase in vessel capacity without a corresponding increase in the working offshore rig count could lead to a decline in the charter day rates we can charge and adversely affect our business, results of operations and financial condition.
Risks Relating to Information Technology and Cybersecurity ● Cybersecurity attacks on any of our vessels, facilities, or those of third parties, may result in potential liability or reputational damage or otherwise adversely affect our business. Risks Relating to Our Securities ● Our common stock is subject to restrictions on foreign ownership by non-U.S.
Risks Related to Information Technology and Cybersecurity Cybersecurity attacks on any of our vessels, facilities, or those of third parties, may result in potential liability or reputational damage or otherwise adversely affect our business.
While the GLF Creditor Warrants trade on the OTC QX market, there has been limited trading volume since the business combination.
While the GLF Creditor Warrants trade on the OTC QX market, there has been and may continue to be limited trading volume.
We have several charter hire contracts that expired in the current year and others that will expire in following years. Our ability to renew or replace expiring contracts or obtain new contracts, and the terms of any such contracts, will depend on various factors, including market conditions and the specific needs of our customers.
Our ability to renew or replace expiring contracts or obtain new contracts, and the terms of any such contracts, will depend on various factors, including market conditions and the specific needs of our customers.
Please refer to Note (10) - “Stock-Based Compensation and Incentive Plans” and Note (11) - “Stockholders’ Equity” in the accompanying Consolidated Financial Statements for additional discussion of our outstanding warrants and stock-based awards.
Please refer to Note (10) - “Stock-Based Compensation and Incentive Plans” and Note (11) - “Stockholders’ Equity” in the accompanying Consolidated Financial Statements for additional discussion of our outstanding warrants and stock-based awards. A limited trading market may exist for our New Creditor Warrants and GLF Creditor Warrants making it difficult to trade or obtain quotations for the warrants .
Bribery Act or similar worldwide anti-bribery laws. ● Changes to applicable laws or regulations to which we are subject may increase our cost of compliance and operational risk. ● Changes and developments in U.S. and international tax laws and policies could adversely affect our financial results. ● Changes in environmental regulations, including climate change and greenhouse gas restrictions, and evolving environmental expectations may reduce demand for hydrocarbons, increase our compliance costs, harm our reputation and adversely affect our financial results.
Risks Relating to Governmental Regulation ● With our extensive international operations, we are subject to certain compliance risks under the Foreign Corrupt Practices Act, the United Kingdom Bribery Act or similar worldwide anti-bribery laws. ● Changes to applicable laws or regulations, including any developing laws and regulations, may increase our compliance costs and operational risk. ● Changes and developments in U.S. and international tax laws and policies could adversely affect our financial results. ● Changes in environmental regulations and evolving environmental expectations may reduce demand for hydrocarbons, increase our compliance costs, harm our reputation and adversely affect our financial results.
A significant industry downturn, sustained market uncertainty, or increased availability of economical alternative energy sources could result in a reduction in demand for our services, which could adversely affect our business, financial condition, results of operations, and cash flows.
The amounts previously allocated to capital expenditures have been re-allocated to several competing priorities, including returning capital to stockholders and investing in alternative energy sources. A significant industry downturn, sustained market uncertainty, or increased availability of economical alternative energy sources could reduce demand for our services, which could adversely affect our business, financial condition, results of operations, and cash flows.
If the energy transition landscape changes faster than anticipated or in a manner that we do not anticipate, demand for our services could be adversely affected.
If the energy transition landscape progresses faster or differently than anticipated, demand for our services could be adversely affected.
Moreover, we may be held liable for actions taken by local partners or agents in violation of applicable anti-bribery laws, even though these partners or agents may themselves not be subject to such laws.
Moreover, we may be held liable for actions taken by local partners or agents in violation of applicable anti-bribery laws, even though these partners or agents may themselves not be subject to such laws. Operating in regions where governmental corruption is prevalent presents additional challenges, as strict compliance may conflict with local customs and business practices.
Our operations, and those of our customers, are subject to federal, state, local and international laws and regulations that control the discharge of pollutants into the environment or otherwise relate to environmental protection.
Changes in environmental regulations and evolving environmental expectations may reduce demand for hydrocarbons, increase our compliance costs, harm our reputation and adversely affect our financial results. Our operations, and those of our customers, are subject to federal, state, local and international laws and regulations that control the discharge of pollutants into the environment or otherwise relate to environmental protection.
Lastly, new laws and regulations related to climate change and the increased scrutiny of greenhouse gas emissions may require us to undertake upgrades or overhauls to our vessels and their power generation systems to ensure compliance, or to contract to build new vessels that conform to these specifications, which would require significant additional capital expenditures.
Lastly, new laws and regulations related to climate change and the increased scrutiny of greenhouse gas emissions may require us to undertake upgrades or overhauls to our vessels and their power generation systems to ensure compliance, or to contract to build new vessels that conform to these specifications, which would require significant additional capital expenditures. 23 Table of Contents While we expect our cash on hand, cash flow from operations and borrowings under new debt facilities to be adequate to fund our future potential purchases of additional vessels, our ability to pay these amounts is dependent upon the success of our operations.
In addition, our income tax returns are subject to review and examination by the U.S. Internal Revenue Service and other tax authorities where tax returns are filed. We routinely evaluate the likelihood of adverse outcomes resulting from these examinations to determine the adequacy of our provision for taxes.
Internal Revenue Service and other tax authorities where tax returns are filed. We routinely evaluate the likelihood of adverse outcomes resulting from these examinations to determine the adequacy of our provision for taxes. We do not recognize the benefit of income tax positions we believe are more likely than not to be disallowed upon challenge by a tax authority.
These potential negative consequences may be exacerbated by the pressure exerted on financial institutions by bank regulatory agencies to respond quickly and decisively to credit risk that develops in distressed industries. If we issue additional equity securities, existing stockholders will experience dilution.
These challenges may be exacerbated by regulatory pressures on financial institutions to respond quickly and decisively to credit risks in distressed industries, potentially limiting our financial flexibility and increasing the cost of capital. If we issue additional equity securities, existing stockholders will experience dilution.

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Item 2. Properties

Properties — owned and leased real estate

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Biggest changeOur principal international offices and/or warehouse facilities, most of which are leased, are in Brazil; Mexico; Trinidad; Scotland; Egypt; Angola; Nigeria; Cameroon; Singapore; Kingdom of Saudi Arabia; Dubai, United Arab Emirates; Australia; and Norway. Our operations generally do not require highly specialized facilities, and suitable facilities are generally available on a leased basis as required.
Biggest changeOur principal international offices and/or warehouse facilities, most of which are leased, are in Brazil; Mexico; Trinidad; Scotland; Egypt; Angola; Namibia; Cameroon; Singapore; Kingdom of Saudi Arabia; Dubai, United Arab Emirates; Australia; and Norway. Our operations generally do not require highly specialized facilities, and suitable facilities are generally available on a leased basis as required.
Added
Vessels At December 31, 2024, we owned 211 vessels. See “Item 1. Business - Vessel Classifications” for additional information.

Item 4. Mine Safety Disclosures

Mine Safety Disclosures — required of mining issuers

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Biggest changeITEM 4. MINE SAFETY DISCLOSURES 36 PART II 36 ITEM 5. MARKET FOR REGISTRANT’S COMMON EQUITY, RELATED STOCKHOLDER MATTERS AND ISSUER PURCHASES OF EQUITY SECURITIES 36 ITEM 6. [RESERVED] 38 ITEM 7. MANAGEMENT’S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS 39 ITEM 7A. QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK 65 ITEM 8.
Biggest changeITEM 4. MINE SAFETY DISCLOSURES 38 PART II 38 ITEM 5. MARKET FOR REGISTRANT’S COMMON EQUITY, RELATED STOCKHOLDER MATTERS AND ISSUER PURCHASES OF EQUITY SECURITIES 38 ITEM 6. [RESERVED] 40 ITEM 7. MANAGEMENT’S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS 41 ITEM 7A. QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK 66 ITEM 8.

Item 5. Market for Registrant's Common Equity

Market for Common Equity — stock, dividends, buybacks

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Biggest changeMaximum Dollar Value of Shares Total Total Number of that May Yet Be Number of Average Shares Purchased Purchased Shares Price Paid as Part of Publicly Under Plans or Repurchased Per Share Announced Plans Programs (1)(2) Period (1 ) (2 ) or Programs (1) (in thousands) October 1, 2023 - October 31, 2023 — — — — November 1, 2023 - November 30, 2023 354,962 $ 58.09 354,962 $ 14,381 December 1, 2023 - December 31, 2023 235,537 61.10 235,537 — Total 590,499 590,499 (1) On November 5, 2023, our Board of Directors approved a $35.0 million share repurchase program to occur, if at all, on or before March 1, 2024.
Biggest changeMaximum Dollar Value of Shares Total Total Number of that May Yet Be Number of Average Shares Purchased Purchased Shares Price Paid as Part of Publicly Under Plans or Repurchased Per Share Announced Plans Programs (1)(2) Period (1 ) (2 ) or Programs (1) (in thousands) October 1, 2024 - October 31, 2024 17,610 71.72 17,610 32,734 November 1, 2024 - November 30, 2024 149,085 53.66 149,085 34,820 December 1, 2024 - December 31, 2024 697,409 49.93 697,409 — Total 864,104 864,104 (1) During 2024, our Board of Directors approved share repurchase programs for an aggregate of $90.7 million.
The analysis assumes the investment of $100 on December 31, 2018 in Tidewater common stock, and in each of the Russell 2000, the PHLX Oil Service Sector and the US Oil Equipment & Services, as well as the reinvestment of dividends into additional shares of the same class of equity securities at the frequency with which dividends are paid on such securities during the applicable fiscal year.
The analysis assumes the investment of $100 on December 31, 2019 in Tidewater common stock, and in each of the Russell 2000, the PHLX Oil Service Sector and the US Oil Equipment & Services, as well as the reinvestment of dividends into additional shares of the same class of equity securities at the frequency with which dividends are paid on such securities during the applicable fiscal year.
The principal market for Tidewater’s common stock is the New York Stock Exchange (NYSE), where it is traded under the symbol “TDW.” 36 Table of Contents Performance Graph The following graph and table compare the cumulative total return on Tidewater’s common stock to the cumulative total returns of the Russell 2000 Stock Index, the PHLX Oil Service Sector Index, and the Dow Jones U.S.
The principal market for Tidewater’s common stock is the New York Stock Exchange (NYSE), where it is traded under the symbol “TDW.” 38 Table of Contents Performance Graph The following graph and table compare the cumulative total return on Tidewater’s common stock to the cumulative total returns of the Russell 2000 Stock Index, the PHLX Oil Service Sector Index, and the Dow Jones U.S.
The following table sets forth the value of the common stock repurchased, along with number of shares repurchased, and average price paid per share for the three months ended December 31, 2023.
The following table sets forth the value of the common stock repurchased, along with number of shares repurchased, and average price paid per share for the three months ended December 31, 2024.
ITEM 5. MARKET FOR REGISTRANT’S COMMON EQUITY, RELATED STOCKHOLDER MATTERS, AND ISSUER PURCHASES OF EQUITY SECURITIES As of February 15, 2024, we had 328 stockholders of record.
ITEM 5. MARKET FOR REGISTRANT’S COMMON EQUITY, RELATED STOCKHOLDER MATTERS, AND ISSUER PURCHASES OF EQUITY SECURITIES As of February 14, 2025, we had 307 stockholders of record.
Indexed returns December 31, December 31, December 31, December 31, December 31, December 31, Company name/Index 2018 2019 2020 2021 2022 2023 Tidewater Inc. 100 101 45 56 193 377 Russell 2000 100 126 151 173 138 161 PHLX Oil Service sector 100 99 58 70 112 114 Dow Jones U.S.
Indexed returns December 31, December 31, December 31, December 31, December 31, December 31, Company name/Index 2019 2020 2021 2022 2023 2024 Tidewater Inc. 100 45 56 191 374 284 Russell 2000 100 120 138 110 128 143 PHLX Oil Service sector 100 58 70 113 115 102 Dow Jones U.S.
On December 18, 2023, we announced the completion of this repurchase program. All shares repurchased were subsequently retired. (2) All share repurchases were made using cash resources and repurchased through our agents that complied with Rule 10b-18 of the Exchange Act.
All shares repurchased were subsequently retired. (2) All share repurchases were made from operating cashflow and were repurchased in the open market by our agents that complied with Rule 10b-18 of the Exchange Act.
Oil Equipment & Services 100 108 66 82 136 140 37 Table of Contents Share Repurchases In November 2023, our Board of Directors approved a $35.0 million share repurchase program.
Oil Equipment & Services 100 61 76 126 129 113 39 Table of Contents Share Repurchases On November 5, 2023, our Board of Directors (Board) approved a $35.0 million share repurchase program, pursuant to which we repurchased and retired 590,499 shares for approximately $35.0 million, excluding commissions and a 1% excise tax, during the fourth quarter of 2023.
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On February 29, 2024, our Board approved a new $48.6 million share repurchase program, subsequently approving the increase of such program by $18.1 million on May 2, 2024, $13.9 million on August 6, 2024, and $10.1 million on November 7, 2024.

Item 7. Management's Discussion & Analysis

Management's Discussion & Analysis (MD&A) — revenue / margin commentary

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Biggest changeGeneral and Administrative Expenses Consolidated general and administrative expenses and the related percentage of each component to total revenues are as follows: (In Thousands) Year Ended Year Ended Year Ended December 31, 2023 December 31, 2022 December 31, 2021 Personnel $ 50,343 5 % $ 48,907 8 % $ 35,985 10 % Office and property 20,998 2 % 22,689 4 % 12,371 3 % Professional services 16,498 2 % 21,964 3 % 14,308 4 % Other 6,354 1 % 6,336 1 % 5,507 1 % Restructuring charges (A) 1,090 0 % 2,025 0 % 345 0 % $ 95,283 9 % $ 101,921 16 % $ 68,516 18 % 58 Table of Contents General and administrative expenses for all segments and corporate, including their respective percentage of total general and administrative expenses were as follows: (In Thousands) Year Ended Year Ended Year Ended December 31, 2023 December 31, 2022 December 31, 2021 Vessel operations: Continuing operations $ 50,785 53 % $ 49,274 48 % $ 34,675 51 % Restructuring charges (A) 1,065 1 % 1,840 2 % 270 0 % Total vessel operations 51,850 54 % 51,114 50 % 34,945 51 % Corporate: Continuing operations 43,408 46 % 50,622 50 % 33,496 49 % Restructuring charges (A) 25 0 % 185 0 % 75 0 % Total corporate 43,433 46 % 50,807 50 % 33,571 49 % Total $ 95,283 100 % $ 101,921 100 % $ 68,516 100 % (A) Restructuring charges for the years ended December 31, 2023, 2022 and 2021 include $1.1 million, $2.0 million and $0.3 million, respectively, of severance and termination benefits.
Biggest changeThe number of vessels disposed by segment were as follows: Year Ended Year Ended Year Ended December 31, 2024 December 31, 2023 December 31, 2022 Number of vessels disposed by segment: Americas 1 1 4 Asia Pacific — 1 2 Middle East — 1 1 Europe/Mediterranean 1 — 2 West Africa 4 12 5 Total 6 15 14 General and Administrative Expenses Consolidated general and administrative expenses and the related percentage of each component to total revenues are as follows: (In Thousands) Year Ended Year Ended Year Ended December 31, 2024 December 31, 2023 December 31, 2022 Personnel $ 67,156 5 % $ 50,343 5 % $ 48,907 8 % Office and property 17,480 1 % 20,998 2 % 22,689 4 % Professional services 19,264 1 % 16,498 2 % 21,964 3 % Other 6,201 1 % 6,354 1 % 6,336 1 % Restructuring charges (A) 716 0 % 1,090 0 % 2,025 0 % $ 110,817 8 % $ 95,283 10 % $ 101,921 16 % 59 Table of Contents General and administrative expenses for all segments and corporate, including their respective percentage of total general and administrative expenses, were as follows: (In Thousands) Year Ended Year Ended Year Ended December 31, 2024 December 31, 2023 December 31, 2022 Vessel operations: Continuing operations $ 55,492 50 % $ 50,785 53 % $ 49,274 48 % Restructuring charges (A) 639 1 % 1,065 1 % 1,840 2 % Total vessel operations 56,131 51 % 51,850 54 % 51,114 50 % Corporate: Continuing operations 54,609 49 % 43,408 46 % 50,622 50 % Restructuring charges (A) 77 0 % 25 0 % 185 0 % Total corporate 54,686 49 % 43,433 46 % 50,807 50 % Total $ 110,817 100 % $ 95,283 100 % $ 101,921 100 % (A) Restructuring charges for the years ended December 31, 2024, 2023 and 2022 include $0.7 million, $1.1 million and $2.0 million, respectively, of severance and termination benefits.
Income tax expense: o We are subject to taxes on our income in many jurisdictions worldwide and our actual tax expense can vary disproportionally to overall net income due to the mix of profits and losses in these foreign tax jurisdictions.
Income tax expense: o We are subject to taxes on our income in many jurisdictions worldwide and our actual tax expense can vary disproportionally to overall net income due to the mix of profits and losses in these foreign tax jurisdictions.
When economically practical marketing opportunities arise, the stacked vessels can be returned to active service by performing any necessary maintenance on the vessel and either rehiring or returning fleet personnel to operate the vessel. Although not currently fulfilling charters, stacked vessels are considered in service and included in the calculation of our utilization statistics.
When economically practical marketing opportunities arise, the stacked vessels can be returned to active service by performing any necessary maintenance on the vessel and either rehiring or returning fleet personnel to operate the vessel. Although not currently fulfilling charters, stacked vessels are considered in service and included in the calculation of our overall utilization statistics.
Our value ranges depend on our expectation of the ultimate disposition of the vessel. 63 Table of Contents We will in all circumstances attempt to achieve maximum value for our vessels, but also recognize that certain vessels are more likely to be recycled, especially given the time and effort required to achieve a sale and the costs incurred to maintain a vessel while searching for a buyer.
Our value ranges depend on our expectation of the ultimate disposition of the vessel. 64 Table of Contents We will in all circumstances attempt to achieve maximum value for our vessels, but also recognize that certain vessels are more likely to be recycled, especially given the time and effort required to achieve a sale and the costs incurred to maintain a vessel while searching for a buyer.
See Note (2) Acquisitions in the Notes to the Consolidated Financial Statements included in Item 8 to this Form 10-K for more information on the Solstad and SPO Acquisitions. 62 Table of Contents Receivables and Allowance for Credit Losses In the normal course of business, we extend credit to our customers on a short-term basis.
See Note (2) Acquisitions in the Notes to the Consolidated Financial Statements included in Item 8 to this Form 10-K for more information on the Solstad and SPO Acquisitions. 63 Table of Contents Receivables and Allowance for Credit Losses In the normal course of business, we extend credit to our customers on a short-term basis.
Vessel operating costs: o Increase primarily due to the additional five active vessels. General and administrative expense: o Increase primarily due to bad debt expense in 2023 and increased professional fees. Depreciation and amortization expense: o Increase primarily due to additional vessels and higher drydock activity. 45 Table of Contents Asia Pacific Segment Operations .
Vessel operating costs: o Increase primarily due to the additional five active vessels. General and administrative expense: o Increase primarily due to bad debt expense in 2023 and increased professional fees. Depreciation and amortization expense: o Increase primarily due to additional vessels and higher drydock activity. 54 Table of Contents Asia Pacific Segment Operations .
We consider the valuation approach for our vessels to be Level 3, as defined by ASC 820, Fair Value Measurements and Disclosures, fair value measurements due to the level of estimation involved in valuing vessels for impairment purposes or for consideration for sale or recycles.
We consider the valuation approach for our vessels to be Level 3, as defined by ASC 820, Fair Value Measurements and Disclosures, fair value measurements due to the level of estimation involved in valuing vessels for impairment purposes or for consideration for sale or recycling.
Depreciation and amortization expense: o Increase primarily due to the significant depreciation associated with the additional vessels acquired from Solstad plus higher amortization related to an increase in drydock activity. 48 Table of Contents West Africa Segment Operations.
Depreciation and amortization expense: o Increase primarily due to the significant depreciation associated with the additional vessels acquired from Solstad plus higher amortization related to an increase in drydock activity. 50 Table of Contents West Africa Segment Operations.
Our vessels are generally insured for up to their estimated fair market value in order to cover damage or loss. We also purchase coverage for potential liabilities stemming from third-party losses with limits that we believe are reasonable for our operations, but do not generally purchase business interruption insurance or similar coverage.
Our vessels are generally insured for up to their estimated fair market value in order to cover damage or loss. We also purchase coverage for potential liabilities stemming from third-party losses and cybersecurity breaches with limits that we believe are reasonable for our business and operations, but do not generally purchase business interruption insurance or similar coverage.
New Accounting Pronouncements For information regarding the effect of new accounting pronouncements, please refer to Note (1) - “Nature of Operations and Summary of Significant Accounting Policies” to the accompanying Consolidated Financial Statements. 64 Table of Contents
New Accounting Pronouncements For information regarding the effect of new accounting pronouncements, please refer to Note (1) - “Nature of Operations and Summary of Significant Accounting Policies” to the accompanying Consolidated Financial Statements. 65 Table of Contents
Our tax expense for 2023 and 2022 is mainly attributable to taxes on our operations in foreign countries. 44 Table of Contents Americas Segment Operations.
Our tax expense for 2023 and 2022 is mainly attributable to taxes on our operations in foreign countries. 53 Table of Contents Americas Segment Operations.
Depreciation and amortization expense: o Increase primarily due to additional vessels and higher drydock activity. 46 Table of Contents Middle East Segment Operations .
Depreciation and amortization expense: o Increase primarily due to additional vessels and higher drydock activity. 48 Table of Contents Middle East Segment Operations .
Liquidity, Capital Resources and Other Matters As of December 31, 2023, we had $278.0 million in cash and cash equivalents, which includes restricted cash and amounts held by foreign subsidiaries, the majority of which is available to us without adverse tax consequences.
Liquidity, Capital Resources and Other Matters As of December 31, 2024, we had $329.0 million in cash and cash equivalents, which includes restricted cash and amounts held by foreign subsidiaries, the majority of which is available to us without adverse tax consequences.
A key component of our growth strategy is expanding our business and fleets through acquisitions, joint ventures and other strategic transactions. We would expect to use net proceeds from any sale of our securities for general corporate purposes, including capital expenditures, investments, acquisitions, repayment or refinancing of indebtedness, and other business opportunities.
A key component of our growth strategy is expanding our business and fleets through acquisitions, joint ventures and other strategic transactions. We would expect to use net proceeds from any sale of our securities for general corporate purposes, including capital expenditures, share buybacks, acquisitions, repayment or refinancing of indebtedness, building new vessels or other investments, and other business opportunities.
Vessel operating costs: o Increase primarily due to additional active vessels, higher mobilization costs and costs associated with leased vessels. General and administrative expense: o No significant variances. Depreciation and amortization expense: o Increase primarily due to additional vessels and higher drydock activity. 47 Table of Contents Europe/Mediterranean Segment Operations.
Vessel operating costs: o Increase primarily due to additional active vessels, higher mobilization costs and costs associated with leasing two vessels. General and administrative expense: o No significant variances. Depreciation and amortization expense: o Increase primarily due to additional vessels and higher drydock activity. 56 Table of Contents Europe/Mediterranean Segment Operations.
However, we expect during 2024, to generate sufficient operating income from the Solstad Vessels to meet the corresponding increase in our debt obligations. 59 Table of Contents The Senior Secured Notes, the Senior Secured Term Loan and the revolving credit facility contain a combination of the following three financial covenants: (i) a minimum free liquidity test (as defined) equal to the greater of $20.0 million or 10% of net interest-bearing debt; (ii) a minimum equity ratio of 30%, in each case for us and our consolidated subsidiaries; and (iii) an interest coverage ratio of not less than 2:1.
We expect to generate sufficient operating income to meet the corresponding debt maturities during 2025. 60 Table of Contents The Senior Secured Notes, the Senior Secured Term Loan and the revolving credit facility contain a combination of the following three financial covenants: (i) a minimum free liquidity test (as defined) equal to the greater of $20.0 million or 10% of net interest-bearing debt; (ii) a minimum equity ratio of 30%, in each case for us and our consolidated subsidiaries; and (iii) an interest coverage ratio of not less than 2:1.
Vessel operating costs per active days is calculated based on total available days less stacked days. 42 Table of Contents Years Ended December 31, 2023 and 2022 Year Ended December 31, (In Thousands except for statistics) 2023 2022 Change % Change Total revenue $ 1,009,985 $ 647,684 $ 362,301 56 % Costs and expenses: Vessel operating costs 556,515 397,301 (159,214 ) (40 )% Costs of other operating revenues 4,342 2,130 (2,212 ) (104 )% General and administrative 95,283 101,921 6,638 7 % Depreciation and amortization 180,331 119,160 (61,171 ) (51 )% Gain on asset dispositions, net (8,701 ) (250 ) 8,451 3,380 % Long-lived asset impairments and other — 714 714 100 % Total costs and expenses 827,770 620,976 (206,794 ) (33 )% Other income (expense): Foreign exchange loss (1,370 ) (2,827 ) 1,457 52 % Equity in net earnings (losses) of unconsolidated companies 39 (221 ) 260 118 % Interest income and other, net 6,517 5,397 1,120 21 % Loss on warrants — (14,175 ) 14,175 100 % Interest and other debt costs, net (48,472 ) (17,189 ) (31,283 ) (182 )% Total other expense (43,286 ) (29,015 ) (14,271 ) (49 )% Income (loss) before income taxes 138,929 (2,307 ) 141,236 6,122 % Income tax expense 43,308 19,886 (23,422 ) (118 )% Net income (loss) $ 95,621 $ (22,193 ) $ 117,814 531 % Select operating statistics: Utilization 79.1 % 75.4 % 3.7 % Active utilization 81.2 % 82.8 % (1.6 )% Average vessel day rates $ 16,802 $ 12,754 $ 4,048 31.7 % Vessel operating cost per active day $ 7,615 $ 6,480 $ (1,135 ) (17.5 )% Average total vessels 205 182 23 Average stacked vessels (5 ) (16 ) 11 Average active vessels 200 166 34 Revenue: o Revenue benefitted from the full year effect of the SPO Acquisition which added 50 vessels to our fleet on April 22, 2022, and the Solstad Acquisition, which added 37 vessels to our fleet on July 5, 2023. o The SPO vessels added $276.8 million to revenue in 2023, compared to approximately $150.0 million in 2022. o The Solstad vessels added $115.1 million to revenue in 2023. o Revenue benefitted from significantly higher day rates in 2023 and the additional capacity from the SPO Acquisition and Solstad Acquisition. o Slight decrease in active utilization in 2023, primarily due to a heavy drydock schedule and the mobilization of vessels between segments.
Depreciation and amortization expense: o Increase primarily due to significantly increased drydock activity and higher depreciation. 51 Table of Contents Years Ended December 31, 2023 and 2022 Year Ended December 31, (In Thousands except for statistics) 2023 2022 Change % Change Total revenue $ 1,009,985 $ 647,684 $ 362,301 56 % Costs and expenses: Vessel operating costs: Crew costs 329,473 242,364 (87,109 ) (36 )% Repair and maintenance 78,716 51,256 (27,460 ) (54 )% Insurance 9,297 6,765 (2,532 ) (37 )% Fuel, lube and supplies 60,548 43,729 (16,819 ) (38 )% Other 78,481 53,187 (25,294 ) (48 )% Total vessel operating costs 556,515 397,301 (159,214 ) (40 )% Costs of other operating revenues 4,342 2,130 (2,212 ) (104 )% General and administrative 95,283 101,921 6,638 7 % Depreciation and amortization 180,331 119,160 (61,171 ) (51 )% Gain on asset dispositions, net (8,701 ) (250 ) 8,451 3,380 % Long-lived asset impairments and other — 714 714 100 % Total costs and expenses 827,770 620,976 (206,794 ) (33 )% Other income (expense): Foreign exchange loss (1,370 ) (2,827 ) 1,457 52 % Equity in net earnings (losses) of unconsolidated companies 39 (221 ) 260 118 % Interest income and other, net 6,517 5,397 1,120 21 % Loss on warrants — (14,175 ) 14,175 100 % Interest and other debt costs, net (48,472 ) (17,189 ) (31,283 ) (182 )% Total other expense (43,286 ) (29,015 ) (14,271 ) (49 )% Income (loss) before income taxes 138,929 (2,307 ) 141,236 6,122 % Income tax expense 43,308 19,886 (23,422 ) (118 )% Net income (loss) $ 95,621 $ (22,193 ) $ 117,814 531 % Select operating statistics: Utilization 79.1 % 75.4 % 3.7 % Active utilization 81.2 % 82.8 % (1.6 )% Average vessel day rates $ 16,802 $ 12,754 $ 4,048 31.7 % Vessel operating cost per active day $ 7,615 $ 6,480 $ (1,135 ) (17.5 )% Average total vessels 205 182 23 Average stacked vessels (5 ) (16 ) 11 Average active vessels 200 166 34 Revenue: o Revenue benefitted from the full year effect of the SPO Acquisition which added 50 vessels to our fleet on April 22, 2022, and the Solstad Acquisition, which added 37 vessels to our fleet on July 5, 2023. o The SPO vessels added $276.8 million to revenue in 2023, compared to approximately $150.0 million in 2022. o The Solstad vessels added $115.1 million to revenue in 2023. o Revenue benefitted from significantly higher day rates in 2023 and the additional capacity from the SPO Acquisition and Solstad Acquisition. o Slight decrease in active utilization in 2023, primarily due to a heavy drydock schedule and the mobilization of vessels between segments.
At December 31, 2023, we owned 217 vessels with an average age of 11.8 years available to serve the global offshore energy industry. 39 Table of Contents MD&A Objective and Principal Factors That Drive Our Results, Cash Flows and Liquidity Our MD&A is designed to provide information about our financial condition and results of operations from management’s perspective.
At December 31, 2024, we owned 211 vessels with an average age of 12.6 years available to serve the global offshore energy industry. 41 Table of Contents MD&A Objective and Principal Factors That Drive Our Results, Cash Flows and Liquidity Our MD&A is designed to provide information about our financial condition and results of operations from management’s perspective.
Year Ended December 31, (In Thousands except for statistics) 2023 2022 Change % Change Vessel revenues $ 273,961 $ 190,349 $ 83,612 44 % Vessel operating costs 129,725 108,092 (21,633 ) (20 )% General and administrative expense 9,281 10,611 1,330 13 % Depreciation and amortization 36,508 28,534 (7,974 ) (28 )% Vessel operating profit $ 98,447 $ 43,112 $ 55,335 128 % Select operating statistics: Utilization 71.1 % 69.5 % 1.6 % Active utilization 75.8 % 80.9 % (5.1 )% Average vessel day rates $ 14,917 $ 11,048 $ 3,869 35.0 % Vessel operating cost per active day $ 5,302 $ 4,936 $ (366 ) (7.4 )% Average total vessels 71 68 3 Average stacked vessels (4 ) (10 ) 6 Average active vessels 67 58 9 Vessel revenue: o Primary drivers for the revenue increase include increase in average day rates and the increase in active vessels related to the full year and six months effects of the SPO Acquisition and Solstad Acquisition, respectively. o SPO Acquisition added 22 vessels to the segment which for the full year of 2023 contributed $60.3 million to the revenue increase. o Solstad Acquisition added three vessels and contributed $6.0 million to the revenue increase. o Active utilization decreased due to vessel mobilizations, high drydock activity and high down for repair days. o Active vessels increased primarily due to mobilizations from other areas, and the SPO and Solstad vessel acquisitions.
Year Ended December 31, (In Thousands except for statistics) 2023 2022 Change % Change Vessel revenues $ 273,961 $ 190,349 $ 83,612 44 % Vessel operating costs: Crew costs 69,176 61,511 (7,665 ) (12 )% Repair and maintenance 18,993 14,024 (4,969 ) (35 )% Insurance 2,610 1,956 (654 ) (33 )% Fuel, lube and supplies 18,333 13,378 (4,955 ) (37 )% Other 20,613 17,223 (3,390 ) (20 )% Total vessel operating costs 129,725 108,092 (21,633 ) (20 )% General and administrative expense 9,281 10,611 1,330 13 % Depreciation and amortization 36,508 28,534 (7,974 ) (28 )% Vessel operating profit (loss) $ 98,447 $ 43,112 $ 55,335 128 % Select operating statistics: Utilization 71.1 % 69.5 % 1.6 % Active utilization 75.8 % 80.9 % (5.1 )% Average vessel day rates $ 14,917 $ 11,048 $ 3,869 35.0 % Vessel operating cost per active day $ 5,302 $ 4,936 $ (366 ) (7.4 )% Average total vessels 71 68 3 Average stacked vessels (4 ) (10 ) 6 Average active vessels 67 58 9 Vessel revenue: o Primary drivers for the revenue increase include increase in average day rates and the increase in active vessels related to the full year and six months effects of the SPO Acquisition and Solstad Acquisition, respectively. o SPO Acquisition added 22 vessels to the segment which for the full year of 2023 contributed $60.3 million to the revenue increase. o Solstad Acquisition added three vessels and contributed $6.0 million to the revenue increase. o Active utilization decreased due to vessel mobilizations, high drydock activity and high down for repair days. o Active vessels increased primarily due to mobilizations from other areas, and the SPO and Solstad vessel acquisitions.
Active utilization is calculated on active vessels (which excludes vessels held for sale and stacked vessels). Average day rates are calculated based on total vessel days worked.
Total vessel utilization is calculated on all vessels in service (which includes stacked vessels, vessels held for sale and vessels in drydock). Active utilization is calculated on active vessels (which excludes vessels held for sale and stacked vessels). Average day rates are calculated based on total vessel days worked.
In addition to our cash on hand, we also have a $25.0 million revolving credit facility (RCF) that matures in 2026. No amounts have been drawn on this facility. As of December 31, 2023, we had $751.7 million of debt on our consolidated balance sheet, $103.1 million of which is due in the next twelve months.
In addition to our cash on hand, we also have a $25.0 million revolving credit facility (RCF) that matures in 2026. No amounts have been drawn on this facility. As of December 31, 2024, we had $647.9 million of debt on our consolidated balance sheet, $65.4 million of which is due in the next twelve months.
Vessel utilization rates are calculated by dividing the number of days a vessel works during a reporting period by the number of days the vessel is available to work in the reporting period. As such, stacked vessels depress utilization rates because stacked vessels are considered available to work and are included in the calculation of utilization rates.
As such, stacked vessels depress utilization rates because stacked vessels are considered available to work and are included in the calculation of utilization rates. Average day rates are calculated by dividing the revenue a vessel earns during a reporting period by the number of days the vessel worked in the reporting period.
Year Ended December 31, (In Thousands except for statistics) 2023 2022 Change % Change Vessel revenues $ 237,205 $ 146,871 $ 90,334 62 % Vessel operating costs 137,921 94,009 (43,912 ) (47 )% General and administrative expense 15,105 10,926 (4,179 ) (38 )% Depreciation and amortization 41,215 29,920 (11,295 ) (38 )% Vessel operating profit $ 42,964 $ 12,016 $ 30,948 258 % Select operating statistics: Utilization 82.0 % 70.5 % 11.5 % Active utilization 84.4 % 80.8 % 3.6 % Average vessel day rates $ 22,174 $ 16,880 $ 5,294 31.4 % Vessel operating cost per active day $ 10,916 $ 8,691 $ (2,225 ) (25.6 )% Average total vessels 36 34 2 Average stacked vessels (1 ) (4 ) 3 Average active vessels 35 30 5 Vessel revenue: o Primary driver for revenue increase was the increase in average day rates, however, active utilization and additional vessels increased revenue as well. o SPO Acquisition added two vessels for the full year in 2023 and contributed $15.4 million to revenue increase. o Solstad Acquisition added six vessels during the last six months in 2023 and contributed $27.1 million to revenue increase. o Active vessels increased primarily due to increased demand and the SPO and Solstad vessel acquisitions.
Year Ended December 31, (In Thousands except for statistics) 2023 2022 Change % Change Vessel revenues $ 237,205 $ 146,871 $ 90,334 62 % Vessel operating costs: Crew costs 86,328 56,767 (29,561 ) (52 )% Repair and maintenance 17,295 12,706 (4,589 ) (36 )% Insurance 1,891 1,439 (452 ) (31 )% Fuel, lube and supplies 13,175 9,655 (3,520 ) (36 )% Other 19,232 13,442 (5,790 ) (43 )% Total vessel operating costs 137,921 94,009 (43,912 ) (47 )% General and administrative expense 15,105 10,926 (4,179 ) (38 )% Depreciation and amortization 41,215 29,920 (11,295 ) (38 )% Vessel operating profit (loss) $ 42,964 $ 12,016 $ 30,948 258 % Select operating statistics: Utilization 82.0 % 70.5 % 11.5 % Active utilization 84.4 % 80.8 % 3.6 % Average vessel day rates $ 22,174 $ 16,880 $ 5,294 31.4 % Vessel operating cost per active day $ 10,916 $ 8,691 $ (2,225 ) (25.6 )% Average total vessels 36 34 2 Average stacked vessels (1 ) (4 ) 3 Average active vessels 35 30 5 Vessel revenue: o Primary driver for revenue increase was the increase in average day rates, however, active utilization and additional vessels increased revenue as well. o SPO Acquisition added two vessels for the full year in 2023 and contributed $15.4 million to revenue increase. o Solstad Acquisition added six vessels during the last six months in 2023 and contributed $27.1 million to revenue increase. o Active vessels increased primarily due to increased demand and the SPO and Solstad vessel acquisitions.
Year Ended December 31, (In Thousands except for statistics) 2023 2022 Change % Change Vessel revenues $ 122,235 $ 64,231 $ 58,004 90 % Vessel operating costs 64,948 42,246 (22,702 ) (54 )% General and administrative expense 8,147 12,299 4,152 34 % Depreciation and amortization 10,669 5,960 (4,709 ) (79 )% Vessel operating profit $ 38,471 $ 3,726 $ 34,745 933 % Select operating statistics: Utilization 82.3 % 76.0 % 6.3 % Active utilization 83.0 % 81.6 % 1.4 % Average vessel day rates $ 24,968 $ 16,084 $ 8,884 55.2 % Vessel operating cost per active day $ 11,057 $ 8,582 $ (2,475 ) (28.8 )% Average total vessels 16 14 2 Average stacked vessels — (1 ) 1 Average active vessels 16 13 3 Vessel revenue: o Primary drivers for the revenue increase include the increase in average day rates resulting from increased demand and the full year and six months effects of the SPO Acquisition and Solstad Acquisition, respectively. o SPO Acquisition added 13 vessels for the full year in 2023 and contributed $45.7 to the revenue increase. o Solstad Acquisition added four vessels during the last six months of 2023 and contributed $14.6 million to the revenue increase. o Active utilization increased due to vessel demand. o Active vessels increased primarily due to the SPO and Solstad vessel acquisitions.
Year Ended December 31, (In Thousands except for statistics) 2023 2022 Change % Change Vessel revenues $ 122,235 $ 64,231 $ 58,004 90 % Vessel operating costs: Crew costs 41,940 29,433 (12,507 ) (42 )% Repair and maintenance 9,212 3,077 (6,135 ) (199 )% Insurance 794 516 (278 ) (54 )% Fuel, lube and supplies 5,251 4,139 (1,112 ) (27 )% Other 7,751 5,081 (2,670 ) (53 )% Total vessel operating costs 64,948 42,246 (22,702 ) (54 )% General and administrative expense 8,147 12,299 4,152 34 % Depreciation and amortization 10,669 5,960 (4,709 ) (79 )% Vessel operating profit $ 38,471 $ 3,726 $ 34,745 933 % Select operating statistics: Utilization 82.3 % 76.0 % 6.3 % Active utilization 83.0 % 81.6 % 1.4 % Average vessel day rates $ 24,968 $ 16,084 $ 8,884 55.2 % Vessel operating cost per active day $ 11,057 $ 8,582 $ (2,475 ) (28.8 )% Average total vessels 16 14 2 Average stacked vessels — (1 ) 1 Average active vessels 16 13 3 Vessel revenue: o Primary drivers for the revenue increase include the increase in average day rates resulting from increased demand and the full year and six months effects of the SPO Acquisition and Solstad Acquisition, respectively. o SPO Acquisition added 13 vessels for the full year in 2023 and contributed $45.7 to the revenue increase. o Solstad Acquisition added four vessels during the last six months of 2023 and contributed $14.6 million to the revenue increase. o Active utilization increased due to vessel demand.
Year Ended December 31, (In Thousands except for statistics) 2023 2022 Change % Change Vessel revenues $ 135,375 $ 110,375 $ 25,000 23 % Vessel operating costs 100,606 78,112 (22,494 ) (29 )% General and administrative expense 9,254 9,120 (134 ) (1 )% Depreciation and amortization 26,566 24,236 (2,330 ) (10 )% Vessel operating loss $ (1,051 ) $ (1,093 ) $ 42 4 % Select operating statistics: Utilization 80.9 % 82.6 % (1.7 )% Active utilization 80.9 % 82.7 % (1.8 )% Average vessel day rates $ 10,394 $ 9,293 $ 1,101 11.8 % Vessel operating cost per active day $ 6,253 $ 5,436 $ (817 ) (15.0 )% Average total vessels 44 39 5 Average stacked vessels — — — Average active vessels 44 39 5 Vessel revenue: o Primary drivers for revenue increase include increase in average day rates resulting from increased demand and increase in active vessels related to the SPO Acquisition. o SPO Acquisition added eight vessels for the full year in 2023 and contributed $3.9 million to the revenue increase. o Active vessels increased by five primarily due to SPO Acquisition and vessel mobilization into the area.
Year Ended December 31, (In Thousands except for statistics) 2023 2022 Change % Change Vessel revenues $ 135,375 $ 110,375 $ 25,000 23 % Vessel operating costs: Crew costs 53,416 44,944 (8,472 ) (19 )% Repair and maintenance 16,187 12,210 (3,977 ) (33 )% Insurance 1,784 1,412 (372 ) (26 )% Fuel, lube and supplies 12,092 10,531 (1,561 ) (15 )% Other 17,127 9,015 (8,112 ) (90 )% Total vessel operating costs 100,606 78,112 (22,494 ) (29 )% General and administrative expense 9,254 9,120 (134 ) (1 )% Depreciation and amortization 26,566 24,236 (2,330 ) (10 )% Vessel operating loss $ (1,051 ) $ (1,093 ) $ 42 (4 )% Select operating statistics: Utilization 80.9 % 82.6 % (1.7 )% Active utilization 80.9 % 82.7 % (1.8 )% Average vessel day rates $ 10,394 $ 9,293 $ 1,101 11.8 % Vessel operating cost per active day $ 6,253 $ 5,436 $ (817 ) (15.0 )% Average total vessels 44 39 5 Average stacked vessels — — — Average active vessels 44 39 5 Vessel revenue: o Primary drivers for revenue increase include increase in average day rates resulting from increased demand and increase in active vessels related to the SPO Acquisition. o SPO Acquisition added eight vessels for the full year in 2023 and contributed $3.9 million to the revenue increase. o Active vessels increased by five primarily due to SPO Acquisition and vessel mobilization into the area.
Year Ended December 31, (In Thousands except for statistics) 2023 2022 Change % Change Vessel revenues $ 230,217 $ 129,578 $ 100,639 78 % Vessel operating costs 123,315 74,842 (48,473 ) (65 )% General and administrative expense 10,063 8,158 (1,905 ) (23 )% Depreciation and amortization 63,152 27,734 (35,418 ) (128 )% Vessel operating profit $ 33,687 $ 18,844 $ 14,843 79 % Select operating statistics: Utilization 87.4 % 85.8 % 1.6 % Active utilization 87.4 % 90.6 % (3.2 )% Average vessel day rates $ 18,514 $ 15,267 $ 3,247 21.3 % Vessel operating cost per active day $ 8,758 $ 7,954 $ (804 ) (10.1 )% Average total vessels 38 27 11 Average stacked vessels — (1 ) 1 Average active vessels 38 26 12 Vessel revenue: o Primary drivers for the revenue increase include increase in average day rates resulting from increased demand and the increase in active vessels in the area resulting mainly from the Solstad Acquisition. o Solstad Acquisition added 24 vessels which, during the last six months of 2023, contributed $67.4 million to the revenue increase. o Active utilization decreased due to vessel mobilizations and higher drydock activity. o Active vessels increased primarily due to the Solstad vessel acquisition.
Year Ended December 31, (In Thousands except for statistics) 2023 2022 Change % Change Vessel revenues $ 230,217 $ 129,578 $ 100,639 78 % Vessel operating costs: Crew costs 78,613 49,709 (28,904 ) (58 )% Repair and maintenance 17,029 9,239 (7,790 ) (84 )% Insurance 2,218 1,442 (776 ) (54 )% Fuel, lube and supplies 11,697 6,026 (5,671 ) (94 )% Other 13,758 8,426 (5,332 ) (63 )% Total vessel operating costs 123,315 74,842 (48,473 ) (65 )% General and administrative expense 10,063 8,158 (1,905 ) (23 )% Depreciation and amortization 63,152 27,734 (35,418 ) (128 )% Vessel operating profit (loss) $ 33,687 $ 18,844 $ 14,843 79 % Select operating statistics: Utilization 87.4 % 85.8 % 1.6 % Active utilization 87.4 % 90.6 % (3.2 )% Average vessel day rates $ 18,514 $ 15,267 $ 3,247 21.3 % Vessel operating cost per active day $ 8,758 $ 7,954 $ (804 ) (10.1 )% Average total vessels 38 27 11 Average stacked vessels — (1 ) 1 Average active vessels 38 26 12 Vessel revenue: o Primary drivers for the revenue increase include increase in average day rates resulting from increased demand and the increase in active vessels in the area resulting mainly from the Solstad Acquisition. o Solstad Acquisition added 24 vessels which, during the last six months of 2023, contributed $67.4 million to the revenue increase. o Active utilization decreased due to vessel mobilizations and higher drydock activity.
Financing Activities Net cash provided by (used in) financing activities is as follows: (In Thousands) Year Ended Year Ended December 31, 2023 December 31, 2022 Exercise of warrants $ 111,483 $ — Proceeds from stock offering — 187,832 Repurchase of SPO Acquisition Warrants — (187,832 ) Issuance of long-term debt 575,000 — Principal payments on long-term debt (13,677 ) — Purchase of common stock (35,025 ) — Acquisition of non-controlling interest in a majority owned subsidiary (1,427 ) — Debt issuance costs (14,758 ) (393 ) Tax on share-based awards (6,040 ) (2,323 ) Net cash provided by (used in) financing activities $ 615,556 $ (2,716 ) Financing activities for the year ended December 31, 2023, provided $615.6 million of cash.
Financing Activities Net cash provided by (used in) financing activities is as follows: (In Thousands) Year Ended Year Ended December 31, 2024 December 31, 2023 Exercise of warrants $ 4 $ 111,483 Issuance of long-term debt — 575,000 Principal payments on long-term debt (103,030 ) (13,677 ) Purchase of common stock (90,742 ) (35,025 ) Acquisition of non-controlling interest in a majority owned subsidiary — (1,427 ) Debt issuance costs (213 ) (14,758 ) Tax on share-based awards (28,614 ) (6,040 ) Net cash provided by (used in) financing activities $ (222,595 ) $ 615,556 Financing activities for the year ended December 31, 2024, used $222.6 million of cash.
We had two, 13 and 27 stacked vessels including vessels classified as assets held for sale in our fleet as of December 31, 2023, December 31, 2022 and December 31, 2021, respectively. During 2023, we sold or recycled eight vessels that had been designated as held for sale and sold seven vessels from our active fleet.
We had one, two and 13 stacked vessels including vessels classified as assets held for sale in our fleet as of December 31, 2024, December 31, 2023 and December 31, 2022, respectively. During 2024, we sold six vessels from our active fleet.
Working capital, which includes cash on hand, was $262.4 million at December 31, 2023. During 2023, we generated $97.2 million in net income and $104.7 million in cash flow from operating activities, which includes our interest payments and drydock costs.
Working capital, which includes cash on hand, was $367.0 million at December 31, 2024. During 2024, we generated $179.3 million in net income and $273.8 million in cash flow from operating activities, which includes our interest payments and drydock costs.
Although our business is impacted by a number of macro factors, including those factors discussed here, which influence our outlook and expectations given the current volatile conditions in our industry, our fleet is currently close to full utilization and our day rates have increased in recent quarters.
Although our business is impacted by a number of macro factors, including those factors discussed herein, which influence our outlook and expectations given the current volatile conditions in our industry, our day rates and vessel utilization remain strong, and the industry outlook continues to stay positive.
Despite the volatility in spot oil prices seen in recent years, our customers tend to consider less volatile medium and long-term prices in making offshore investment decisions. We continue to see positive upstream investment momentum in both the international and domestic markets.
Despite the volatility in spot oil prices seen in recent years, our customers tend to consider less volatile medium and long-term prices in making offshore investment decisions. We expect positive upstream investment momentum in both the international and domestic markets. We believe these markets are driven by resilient long-cycle offshore developments, production capacity expansions and increased resource exploitation activities.
During 2022, we sold or recycled 12 vessels that had been designated as held for sale and sold two vessels from our active fleet. We also designated three vessels to assets held for sale and reactivated one vessel from assets held for sale into the active fleet in 2022.
During 2023, we sold or recycled eight vessels that had been designated as held for sale and sold seven vessels from our active fleet. During 2022, we sold or recycled 12 vessels that had been designated as held for sale and sold two vessels from our active fleet.
General and administrative: o Decrease primarily due to lower acquisition related transaction costs, offset partially by higher personnel costs related to the Solstad Acquisition and the full year impact of the SPO Acquisition. 43 Table of Contents Depreciation and amortization: o Increase primarily due to the depreciation of additional vessels acquired in the SPO Acquisition and Solstad Acquisition and the amortization of a higher level of drydock costs associated with an increased number of vessels.
Depreciation and amortization: o Increase primarily due to the depreciation of additional vessels acquired in the SPO Acquisition and Solstad Acquisition and the amortization of a higher level of drydock costs associated with an increased number of vessels.
Vessel operating costs: o Increase primarily due to the additional active vessels in our fleet from the SPO Acquisition and Solstad Acquisition, and higher mobilization costs as we moved several vessels between segments.
Vessel operating costs: o Increase primarily due to the additional active vessels in our fleet from the SPO Acquisition and Solstad Acquisition, and higher mobilization costs as we moved several vessels between segments. 52 Table of Contents General and administrative: o Decrease primarily due to lower acquisition related transaction costs, offset partially by higher personnel costs related to the Solstad Acquisition and the full year impact of the SPO Acquisition.
Depreciation and amortization expense: o Increase primarily due to higher depreciation as a result of higher total vessels, offset partially by lower drydock amortization. 53 Table of Contents Middle East Segment Operations .
Depreciation and amortization expense: o Increase primarily due to additional vessels and higher drydock activity. 55 Table of Contents Middle East Segment Operations .
Investing Activities Net cash used in investing activities is as follows: (In Thousands) Year Ended Year Ended December 31, 2023 December 31, 2022 Proceeds from asset dispositions $ 15,506 $ 13,568 Acquisitions, net of cash acquired (594,191 ) (20,740 ) Additions to properties and equipment (31,588 ) (16,637 ) Net cash used in investing activities $ (610,273 ) $ (23,809 ) Net cash used in investing activities for the year ended December 31, 2023, was $610.3 million, reflecting proceeds of $15.5 million related to the disposal of 15 vessels.
Investing Activities Net cash used in investing activities is as follows: (In Thousands) Year Ended Year Ended December 31, 2024 December 31, 2023 Proceeds from asset dispositions $ 19,338 $ 15,506 Proceeds from sale of notes 8,054 $ — Acquisitions, net of cash acquired — (594,191 ) Additions to properties and equipment (27,580 ) (31,588 ) Net cash used in investing activities $ (188 ) $ (610,273 ) Net cash used in investing activities for the year ended December 31, 2024, was $0.2 million, reflecting proceeds of $19.3 million related to the disposal of six vessels and $8.1 million related to the sale of a PEMEX note receivable.
Each reporting segment is overseen by a managing director, who is a senior company executive reporting directly to our Chief Executive Officer, the chief operating decision maker. Discrete financial information is available for each of the segments, and our Chief Executive Officer uses the results of each of the operating segments for resource allocation and performance evaluation.
Each of our five operating segments is led by senior management, the results are reviewed and resources are allocated by our Chief Executive Officer, the chief operating decision maker. Discrete financial information is available for each of the segments, and our Chief Executive Officer uses the results of each of the operating segments for resource allocation and performance evaluation.
Net cash provided by operating activities is as follows: (In Thousands) Year Ended Year Ended December 31, 2023 December 31, 2022 Net income (loss) $ 95,621 $ (22,193 ) Depreciation and amortization 128,777 83,522 Amortization of deferred drydocking and survey costs 51,554 35,638 Amortization of debt premiums and discounts 4,619 1,679 Amortization of below market contracts (3,800 ) — Provision for deferred income taxes 92 36 Gain on asset dispositions, net (8,701 ) (250 ) Gain on pension settlement (2,313 ) — Gain on bargain purchase — (1,300 ) Long-lived asset impairments and other — 714 Loss on warrants — 14,175 Stock based compensation expense 10,755 7,372 Deferred drydocking and survey costs (97,378 ) (56,000 ) Changes in operating assets and liabilities, net of effects of business acquisition (74,521 ) (23,167 ) Net cash provided by operating activities $ 104,705 $ 40,226 60 Table of Contents Net cash provided by operating activities for the year ended December 31, 2023, of $104.7 million reflects net income of $95.6 million, non-cash depreciation and amortization of $180.3 million and stock-based compensation expense of $10.8 million.
Net cash provided by operating activities is as follows: (In Thousands) Year Ended Year Ended December 31, 2024 December 31, 2023 Net income $ 179,272 $ 95,621 Depreciation and amortization 156,166 128,777 Amortization of deferred drydocking and survey costs 86,604 51,554 Amortization of debt premiums and discounts 6,741 4,619 Amortization of below market contracts (5,000 ) (3,800 ) Deferred income taxes provision (benefit) (2,807 ) 92 Gain on asset dispositions, net (15,762 ) (8,701 ) Gain on pension settlement — (2,313 ) Stock based compensation expense 13,681 10,755 Deferred drydocking and survey costs (133,258 ) (97,378 ) Changes in operating assets and liabilities, net of effects of business acquisition (11,788 ) (74,521 ) Net cash provided by operating activities $ 273,849 $ 104,705 61 Table of Contents Net cash provided by operating activities for the year ended December 31, 2024, of $273.8 million reflects net income of $179.3 million, non-cash depreciation and amortization of $242.8 million and stock-based compensation expense of $13.7 million.
We seek opportunities to sell and/or recycle our older vessels when market conditions warrant and opportunities arise. Most of our vessels are sold to buyers who do not compete with us in the offshore energy industry.
Most of our vessels are sold to buyers who do not compete with us in the offshore energy industry.
Vessel day rates are determined by the demand created largely through the level of offshore exploration, field development and production spending by energy companies relative to the supply of offshore support vessels. Specifications of available equipment and the scope of service provided may also influence vessel day rates.
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 largely through the level of offshore exploration, field development and production spending by energy companies relative to the supply of offshore support vessels.
Energy prices are expected to remain volatile due to ongoing geopolitical conflicts, global inflationary trends and associated actions from central banks as well as uncertainties surrounding the growth rates expected in key world economies. 40 Table of Contents Our business is directly impacted by the level of activity in worldwide offshore oil and gas exploration, development and production, which in turn is influenced by trends in oil and gas prices and the condition of the energy markets and, in particular, the willingness of energy companies to spend on operational activities and capital projects.
Our business is directly impacted by the level of activity in worldwide offshore oil and gas exploration, development and production, which in turn is influenced by trends in oil and gas prices and the condition of the energy markets and, in particular, the willingness of energy companies to spend on offshore operational activities and capital projects.
No shares were repurchased during the years ended December 31, 2022 and 2021. Please refer to Item 5 of this Form 10K - Market for Registrant’s Common Equity, Related Stockholder Matters, and Issuer Purchases of Equity Securities for additional information regarding repurchases of our common stock in the fourth quarter of 2024.
Please refer to Item 5 of this Form 10-K - Market for Registrant’s Common Equity, Related Stockholder Matters, and Issuer Purchases of Equity Securities for additional information regarding repurchases of our common stock in the fourth quarter of 2024. Also refer to Note (11) - “Stockholders’ Equity” to the accompanying Consolidated Financial Statements.
The primary estimates and assumptions used in reviewing active vessel groups for impairment and estimating undiscounted cash flows include utilization rates, average day rates and average daily operating expenses.
The primary estimates and assumptions used in reviewing active vessel groups for impairment and estimating undiscounted cash flows include utilization rates, average day rates and average daily operating expenses. These estimates are based on recent actual trends in utilization, day rates and operating costs and reflect management’s best estimate of expected market conditions during the period of future cash flows.
We also incur vessel operating costs aggregated as “other” vessel operating costs. These costs consist of brokers’ commissions, training costs, satellite communication fees, agent fees, port fees and other miscellaneous costs. Brokers’ commissions are incurred primarily in our non-United States operations where brokers sometimes assist in obtaining work.
These costs consist of brokers’ commissions, training costs, satellite communication fees, agent fees, port fees and other miscellaneous costs. Brokers’ commissions are incurred primarily in our non-U.S. operations where brokers sometimes assist in obtaining work. Brokers generally are paid a percentage of day rates and, accordingly, commissions paid to brokers generally fluctuate in accordance with vessel revenue.
Also refer to Note (11) - “Stockholders’ Equity” to the accompanying Consolidated Financial Statements. Dividends There were no dividends declared during the years ended December 31, 2023, 2022 and 2021. Please refer to Note (11) - “Stockholders’ Equity” to the accompanying Consolidated Financial Statements.
Dividends There were no dividends declared during the years ended December 31, 2024, 2023 and 2022. Please refer to Note (11) - “Stockholders’ Equity” to the accompanying Consolidated Financial Statements. Operating Activities Net cash provided by operating activities for any period will fluctuate according to the level of business activity for the applicable period.
Vessel operating costs: o Increase primarily due to the additional active vessels due primarily to reactivations in 2022. General and administrative expense: o Marginal increase primarily due to higher personnel costs. Depreciation and amortization expense: o Decrease primarily due to lower depreciation from a decrease in total vessels. 52 Table of Contents Asia Pacific Segment Operations .
General and administrative expense: o Decrease primarily due to higher bad debt expense in 2023. Depreciation and amortization expense: o Increase primarily due to higher drydock activity which offset the lower depreciation resulting from a lower vessel count. 47 Table of Contents Asia Pacific Segment Operations .
We believe these markets are driven by resilient long-cycle offshore developments, production capacity expansions and increased exploration and development activities. We are one of the world’s largest operators of offshore support vessels and we have operations in most of the world’s offshore oil and gas basins.
We are one of the world’s largest operators of offshore support vessels and we have operations in most of the world’s offshore oil and gas basins.
In addition, we purchased 590,499 shares of our common stock for $35.0 million and paid $6.0 million in taxes on share-based awards. 61 Table of Contents Financing activities for the year ended December 31, 2022, used $2.7 million of cash, including $0.4 million of debt issuance costs related to our 2026 notes and $2.3 million in taxes paid on share-based awards.
We made $103.0 million in principal payments on long-term debt while incurring $0.2 million of debt issuance costs. In addition, we purchased 1,384,186 shares of our common stock for $90.7 million and paid $28.6 million in taxes on share-based awards. 62 Table of Contents Financing activities for the year ended December 31, 2023, provided $615.6 million of cash.
Over the past several years, oil and gas commodity pricing has been affected by a global pandemic, which included lock downs by major oil consuming nations, a war in eastern Europe between Russia and Ukraine, OPEC+ production quotas, capital discipline within the major oil and gas companies, inflationary economies of major consuming nations and increased activism related to the perceived responsibility of the oil and gas sector for climate change.
Over the past several years, oil and gas commodity pricing has been affected by (i) a global pandemic, which included lock downs by major oil consuming nations; (ii) an ongoing war in eastern Europe between Russia and Ukraine, which includes sanctions on Russian oil production; (iii) an Israeli/Palestinian conflict that has resulted in disruption of shipping in the Middle East; (iv) Organization of the Petroleum Exporting Countries Plus (OPEC+) production quotas, market share expectations and pricing considerations; (v) resource growth in non-OPEC+ nations; (vi) capital allocation and discipline within the major oil and gas companies thereby limiting funds previously available for resource development; (vii) economies of major consuming nations; and (viii) increased activism related to the perceived responsibility of the oil and gas sector for climate change.
Changes in operating assets and liabilities used $23.2 million in cash, reflecting additional investments in working capital as a result of the increase in business activity. We paid $56.0 million for regulatory drydocks in 2022.
Changes in operating assets and liabilities used $11.8 million in cash, reflecting additional investments in working capital due to an increase in business activity relating to the Solstad Acquisition. We paid $133.3 million for regulatory drydocks in 2024.
We continue to believe that there will be sufficient opportunities for us to operate our vessels in this sector for many years to come. We have also pursued opportunities in the sustainability arena, including the support of offshore wind energy generation and the improvement of our fleet performance regarding emissions and environmental impact.
We have also pursued opportunities in the sustainability arena, including the support of offshore wind energy generation, and continue to invest in our fleet to improve performance, increase efficiencies and reduce our emissions and environmental impact.
Although we believe our assumptions and estimates are reasonable, deviations from the assumptions and estimates could produce materially different results.
These assumptions and estimates have changed considerably as market conditions have changed, and they are reasonably likely to continue to change as market conditions change in the future. Although we believe our assumptions and estimates are reasonable, deviations from the assumptions and estimates could produce materially different results.
Insurance limits are reviewed annually, and third-party coverage is purchased based on the expected scope of ongoing operations and the cost of third-party coverage. Fuel and lube costs can fluctuate in any given period depending on the number and distance of vessel mobilizations, the number of active vessels off charter, drydockings, and changes in fuel prices.
Fuel and lube costs can fluctuate in any given period depending on the number and distance of vessel mobilizations, the number of active vessels off charter, drydockings, and changes in fuel prices. We also incur vessel operating costs aggregated as “other” vessel operating costs.
Share Repurchases In November 2023, we announced the approval by our Board to repurchase up to $35.0 million of our common stock. As of December 31, 2023, we had repurchased and retired 590,499 shares for approximately $35.0 million ($59.29 per share), excluding commissions and a 1% excise taxes.
Share Repurchases On November 5, 2023, our Board of Directors (Board) approved a $35.0 million share repurchase program, pursuant to which we repurchased and retired 590,499 shares for approximately $35.0 million, excluding commissions and a 1% excise tax, during the fourth quarter of 2023.
Industry Conditions and Outlook Our business is exposed to numerous macro factors that influence our outlook and expectations given the current volatile conditions in the oil and gas industry. Our outlook and expectations described herein are based solely on the market as we see it today, and therefore, subject to various changing conditions that impact the oil and gas industry.
Our outlook and expectations described herein are based solely on the market as we see it today, and therefore, subject to various changing conditions that impact the oil and gas industry. 42 Table of Contents We expect the supply-demand balance in the global offshore oil and gas markets to continue to be favorable for offshore activities by the major oil and gas producers.
Net cash used by operating activities for the year ended December 31, 2022, of $40.2 million reflects a net loss of $22.2 million, non-cash impairments of $0.7 million, non-cash depreciation and amortization of $119.2 million, stock-based compensation expense of $7.4 million, and loss on warrants of $14.2 million.
Net cash provided by operating activities for the year ended December 31, 2023, of $104.7 million reflects net income of $95.6 million, non-cash depreciation and amortization of $180.3 million and stock-based compensation expense of $10.8 million.
Offshore oil and gas exploration and development activities generally require higher oil or gas prices to justify the much higher expenditure levels of offshore activities compared to onshore activities. Prices are subject to significant uncertainty and, as a result, are extremely volatile.
Oil and gas prices are affected by a host of geopolitical and economic forces, including the fundamental principles of supply and demand. Offshore oil and gas exploration and development activities often require higher oil or gas prices to justify the higher expenditure levels of offshore activities compared to conventional onshore activities.
Foreign exchange losses: o In 2022 and 2021, our foreign exchange losses were primarily the result of the revaluation of various foreign currency balances due to a strengthening of the U.S. Dollar against the Norwegian Kroner, Brazilian Real, Angola Kwanza, British Pound and Euro.
Foreign exchange losses: o In 2024 and 2023, we experienced foreign currency exchange losses. The 2024 losses were significant due to a strengthening of the U.S. Dollar against the Mexican Peso, Norwegian Kroner, Brazilian Real, Australian Dollar and certain African currencies.
Our primary sources of capital have been our cash on hand, internally generated funds including operating cash flow, vessel sales and long-term debt financing. From time to time, we also issue stock or stock-based financial instruments either in the open market or as currency in acquisitions. This ability is impacted by existing market conditions.
From time to time, we also issue stock or stock-based financial instruments either in the open market or as currency in acquisitions. This ability is impacted by existing market conditions. Industry Conditions and Outlook Our business is exposed to numerous macro factors that influence our outlook and expectations.
Vessel operating costs: o Increase primarily due to the additional eight active vessels. General and administrative expense: o Increase primarily due to addition of the Singapore office associated with the SPO Acquisition.
Vessel operating costs: o Increase primarily due to the additional active vessels and by the increased proportion of vessels working in Australia where crew costs are higher. General and administrative expense: o Increase primarily due to higher personnel costs.
Vessel operating costs: o Increase primarily due to the additional six active vessels. General and administrative expense: o No significant variances. Depreciation and amortization expense: o No significant variances. 55 Table of Contents West Africa Segment Operations.
Depreciation and amortization expense: o Increase primarily due to the significant depreciation associated with the additional vessels acquired from Solstad plus higher amortization related to an increase in drydock activity. 57 Table of Contents West Africa Segment Operations.
Recent events include escalation of the Israeli/Palestinian conflict which has also resulted in increased disruption of shipping in the Middle East due to military action from surrounding states. These factors have at various times caused or exacerbated significant swings in oil and gas pricing, which in turn has affected the capital budgets of oil and gas companies.
These factors, as well as numerous other regional conflicts in producing regions, have at various times caused or exacerbated significant swings in oil and gas pricing, which in turn has affected the capital budgets of oil and gas companies.
Results of Operations We manage and measure our business performance primarily based on five distinct geographic operating segments: Americas, Asia Pacific, Middle East, Europe/Mediterranean and West Africa. This section of this Form 10-K generally discusses 2023, 2022 and 2021 items and year-to-year comparisons between 2023 and 2022 and between 2022 and 2021.
Discrete financial information is available for each of the segments, and our Chief Executive Officer uses the results of each of the operating segments for resource allocation and performance evaluation. 43 Table of Contents Results of Operations We manage and measure our business performance primarily based on five distinct geographic operating segments: Americas, Asia Pacific, Middle East, Europe/Mediterranean and West Africa.
We are of the opinion that the underlying fundamentals, particularly energy source supply and demand, will support a multi-year increase in offshore upstream development spending. Segment Changes In conjunction with the acquisition of SPO in April 2022, the previous Middle East/Asia Pacific segment was split into the Middle East segment and the Asia Pacific segment.
We are of the opinion that the underlying fundamentals, particularly energy source supply and demand, will support a multi-year increase in offshore upstream development spending. We believe there will be sufficient opportunities for us to operate our vessels in this sector for many years to come.
Average day rates are calculated by dividing the revenue a vessel earns during a reporting period by the number of days the vessel worked in the reporting period. Total vessel utilization is calculated on all vessels in service (which includes stacked vessels, vessels held for sale and vessels in drydock).
Specifications of available equipment and the scope of service provided may also influence vessel day rates. Vessel utilization rates are calculated by dividing the number of days a vessel works during a reporting period by the number of days the vessel is available to work in the reporting period.
Vessel operating costs: o Increase primarily due to the additional seven active vessels. General and administrative expense: o Increase primarily due to addition of Dubai office associated with the SPO Acquisition. Depreciation and amortization expense: o Increase primarily due to higher depreciation as a result of higher total vessels. 54 Table of Contents Europe/Mediterranean Segment Operations.
Vessel operating costs: o Increase primarily due to the additional vessels in the segment. o Solstad Vessels added $86.7 million and $37.8 million to operating costs in 2024 and 2023, respectively. General and administrative expense: o Increase primarily due to higher personnel costs as a result of the addition of onshore personnel from the Solstad Acquisition.
Additions to property and equipment were comprised of $16.6 million, primarily for the down payment on two Alucat crew boats, upgrades to our existing fleet and continued enhancements to our current enterprise software system.
Additions to property and equipment were comprised of $27.6 million, primarily for upgrades to our existing fleet and continued enhancements to our current enterprise software system. Net cash used in investing activities for the year ended December 31, 2023, was $610.3 million, reflecting proceeds of $15.5 million related to the disposal of 15 vessels.
General and administrative expenses for the year ended December 31, 2022 increased compared to the year ended December 31, 2021, primarily due to higher personnel costs associated with the addition of the Singapore and Dubai offices and professional fees and transaction costs (including severance costs) related to the SPO Acquisition, which totaled $18.8 million for the year ended December 31, 2022.
General and administrative expenses for the year ended December 31, 2024 increased compared to the year ended December 31, 2023 primarily because of higher compensation costs and professional fees.
We also received $187.8 million in proceeds from two offerings of our common stock. These proceeds were used to repurchase the outstanding SPO Acquisition Warrants issued in connection with the SPO Acquisition. Legal Proceedings We are named defendants or parties in certain lawsuits, claims or proceedings incidental to or arising in the ordinary course of business.
In addition, we purchased 590,499 shares of our common stock for $35.0 million and paid $6.0 million in taxes on share-based awards. Legal Proceedings We are named defendants or parties in certain lawsuits, claims or proceedings incidental to or arising in the ordinary course of business.
Each of the Facility Agreements bear interest at rates ranging from 2.7% to 6.3% and are payable in ten equal semi-annual installments, with the first Facility Agreement installment having commenced in the fourth quarter of 2023. The Facility Agreements are secured by the vessels, guaranteed by Tidewater and contain no financial covenants.
Four vessels have been delivered through December 31, 2024, and we entered into Facility Agreements for approximately EUR13.9 million ($15.2 million) in financing. Each of the associated Facility Agreements bears interest at rates ranging from 2.7% to 6.3% and are payable in ten equal principal semi-annual installments, with the first installment commencing approximately six months following delivery of the vessel.
In addition, some of our Series A and B Warrants were exercised during July 2023 and we received approximately $111.5 million in cash and issued approximately 1.9 million shares of our common stock in exchange for these warrants. Please refer to Note (4) - “Debt” to the accompanying Consolidated Financial Statements for further details on our indebtedness.
Please refer to Note (4) - “Debt” to the accompanying Consolidated Financial Statements for further details on our indebtedness.
Vessel operating costs: o Increase primarily due to the addition of 50 vessels to our fleet with the SPO Acquisition effective April 22, 2022, and the increased demand for vessels resulting in greater activity and higher operating costs, as the industry and our customers recovered from the COVID-19 pandemic.
Vessel operating costs: o Increase primarily due to the additional active vessels in our fleet from the Solstad Acquisition, coupled with higher overall crew costs and higher repair costs associated with slightly higher repair days.
Removed
Brokers generally are paid a percentage of day rates and, accordingly, commissions paid to brokers generally fluctuate in accordance with vessel revenue. We discuss our liquidity in terms of cash flow that we generate from our operations.
Added
At closing, these vessels operated primarily in the North Sea, Australia and Brazil.
Removed
We expect the supply-demand balance in the global offshore oil and gas markets to continue to be favorable for offshore activities by the major oil and gas producers.
Added
During the past three years, we have not incurred any material costs, fines or penalties due to a direct or third-party vendor cybersecurity breach. Insurance limits are reviewed annually, and third-party coverage is purchased based on the expected scope of ongoing operations and the cost of third-party coverage.
Removed
This activity includes improving demand for floating drilling rigs, which also directly impacts our industry. Oil and gas prices are affected by a host of geopolitical and economic forces, including the fundamental principles of supply and demand.
Added
We discuss our liquidity in terms of cash flow that we generate from our operations. Our primary sources of capital have been our cash on hand, internally generated funds including operating cash flow, vessel sales and long-term debt financing.
Removed
Our previous operations in Southeast Asia and Australia, along with the legacy SPO operations in the Asia Pacific region, now form the new Asia Pacific segment. Our segment disclosures reflect the current segment alignment for all periods presented.
Added
In addition, the outlook for deepwater offshore projects is strong with such activities expected to replace U.S. shale oil as the primary source of non-OPEC+ oil supply growth.

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Item 7A. Quantitative and Qualitative Disclosures About Market Risk

Market Risk — interest-rate, FX, commodity exposure

5 edited+2 added−0 removed6 unchanged
Biggest change(In Millions) Outstanding Estimated 100 Basis 100 Basis Value Fair Value Point Increase Point Decrease 8.50% Senior Secured Notes due November 2026 $175.0 $181.7 $176.7 $185.9 10.375% Senior Unsecured Notes due July 2028 250.0 260.2 249.3 267.7 Senior Secured Term Loan 312.5 313.7 309.3 318.2 Foreign Exchange Risk Our financial instruments that can be affected by foreign currency exchange rate fluctuations consist primarily of cash and cash equivalents, trade receivables, trade payables and debt denominated in currencies other than the U.S. dollar.
Biggest change(In Millions) Outstanding Estimated 100 Basis 100 Basis Value Fair Value Point Increase Point Decrease 8.50% Senior Secured Notes due November 2026 $175.0 $180.8 $179.5 $185.7 10.375% Senior Unsecured Notes due July 2028 250.0 266.1 260.7 276.5 Senior Secured Term Loan 212.5 218.2 216.0 220.4 Foreign Exchange Risk Our financial instruments that can be affected by foreign currency exchange rate fluctuations consist primarily of cash and cash equivalents, trade receivables, trade payables and debt denominated in currencies other than the U.S. dollar.
ITEM 7A. QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK Market risk refers to the potential losses arising from changes in interest rates, foreign currency fluctuations and exchange rates, equity prices and commodity prices including the correlation among these factors and their volatility. We are primarily exposed to interest rate risk and foreign currency fluctuations and exchange risk.
ITEM 7A. QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK Market risk refers to the potential losses arising from changes in interest rates, foreign currency and exchange rates, equity prices and commodity prices including the correlation among these factors and their volatility. We are primarily exposed to interest rate risk and foreign currency exchange risk.
Senior Secured and Senior Unsecured Debt Please refer to Note (4) - “Debt” to the accompanying Consolidated Financial Statements for a discussion on our outstanding debt. The following table discloses how the estimated fair value of our outstanding debt, as of December 31, 2023, would change with a 100 basis-point increase or decrease in market interest rates.
Senior Secured and Senior Unsecured Debt Please refer to Note (4) - “Debt” to the accompanying Consolidated Financial Statements for a discussion on our outstanding debt. The following table discloses how the estimated fair value of our outstanding debt, as of December 31, 2024, would change with a 100 basis-point increase or decrease in market interest rates.
We had no derivative instruments as of December 31, 2023 and 2022. Other Due to our international operations, we are exposed to foreign currency exchange rate fluctuations and exchange rate risks on all charter hire contracts denominated in foreign currencies.
We had no derivative instruments as of December 31, 2024 and 2023. Other Due to our international operations, we are exposed to foreign currency exchange rate fluctuations and exchange rate risks on all charter hire contracts denominated in foreign currencies.
In addition, we attempt to minimize the financial impact of these risks by matching the currency of our operating costs with the currency of the revenue streams when considered appropriate. We continually monitor the currency exchange risks associated with all contracts not denominated in U.S. dollars. 65 Table of Contents
In addition, we attempt to minimize the financial impact of these risks by matching the currency of our operating costs with the currency of the revenue streams when considered appropriate. We continually monitor the currency exchange risks associated with all contracts not denominated in U.S. dollars.
Added
In 2024 and 2023, we expanded our operations in several regions with currency risk and more bureaucratic barriers to the repatriation of cash, notably several countries in West Africa. In addition, our operations in Egypt were affected by currency devaluation in 2024.
Added
We are working to mitigate this additional foreign currency risk with a focus on reducing working capital levels denominated in currencies other than the U.S. dollar. 66 Table of Contents

Other TDW 10-K year-over-year comparisons