SEACOR Marine Holdings Inc

For the years ended December 31, the Company’s consolidated results of operations were as follows (in thousands, except statistics):

The following tables summarize the operating results and property and equipment for the Company’s reportable segments for the periods indicated (in thousands, except statistics):

(1)

Total Assets exclude $71.3 million of corporate assets.

(1)

Total Assets exclude $64.0 million of corporate assets.

(2)

In 2022, the Company removed from service one specialty vessel in this region. Regional statistics reflect the removed from service status of this vessel.

(1)

Total Assets exclude $89.4 million of corporate assets.

(2)

In 2021, the Company removed from service four liftboats in this region. Regional statistics reflect the removed from service status of these vessels.

(3)

In prior periods, Africa and Europe were reported as separate segments. Due to the sale of Windcat Workboats, the Company’s European operations are no longer analyzed by the chief operating decision maker on a standalone basis but rather are analyzed as part of the Africa and Europe segment. As a result, for purposes of segment reporting, European operations are now analyzed with Africa and reported as a consolidated segment and prior period information has been conformed to the new consolidated reporting segment.

The following tables summarize the world-wide operating results and property and equipment for each of the Company’s vessel classes for the periods indicated (in thousands, except statistics):

(1)

In 2022, the Company removed from service one specialty vessel in this class. Other activity statistics reflect the removed from service status of this vessel.

(1)

In 2021, the Company removed from service four liftboats in this class. Liftboats statistics reflect the removed from service status of these vessels.

Operating Income (Loss)

United States, primarily Gulf of Mexico. For the years ended December 31, the Company’s direct vessel profit (loss) in the U.S. was as follows (in thousands, except statistics):

(1)

In 2021, the Company removed from service four liftboats in this region. Regional statistics reflect the removed from service status of these vessels.

Operating Revenues. Charter revenues were $9.4 million lower in 2023 compared with 2022. Charter revenues were $6.0 million lower due to the repositioning of vessels between geographic regions and $3.4 million lower due to decreased utilization of the vessels included in the results of this region in both comparative periods (as applicable to each region, the “Regional Core Fleet”). Other marine services were $8.2 million higher primarily due to business interruption insurance revenue and higher mobilization revenues. As of December 31, 2023, the Company had two of 11 owned vessels (one liftboat and one FSV) cold-stacked in this region compared with three of 14 vessels as of December 31, 2022.

Direct Operating Expenses. Direct operating expenses were $8.2 million lower in 2023 compared with 2022. Direct operating expenses were $4.7 million lower for the Regional Core Fleet primarily due to the timing of drydocking and certain repair expenditures, $2.8 million lower due to the repositioning of vessels between geographic regions and $0.7 million lower due to net asset dispositions.

Operating Revenues. Charter revenues were $34.2 million higher in 2022 compared with 2021. Charter revenues were $19.8 million higher due to the repositioning of vessels between geographic regions, $10.5 million higher due to the acquisition of an additional three PSVs in this region as a result of the OSV Partners Merger (as defined below in “Equity in Earnings (Losses) of 50% or Less Owned Companies, Net of Tax”) and $3.9 million higher due to improved utilization for the Regional Core Fleet. Other marine services were $5.9 million higher primarily due to business interruption insurance revenue and higher management fees and liftboat catering revenues. As of December 31, 2022, the Company had three of 14 owned and leased-in vessels (one AHTS, one FSV, and one liftboat) cold-stacked in this region compared with four of 14 vessels as of December 31, 2021.

Direct Operating Expenses. Direct operating expenses were $31.8 million higher in 2022 compared with 2021. Direct operating expenses were $16.7 million higher due to the repositioning of vessels between geographic regions, $8.4 million higher due to net fleet additions and $6.7 million higher for the Regional Core Fleet as a result of timing of drydocking and vessels changing from bareboat to time charter status. In addition, drydocking and repair expenditures included $0.6 million of costs pending adjustment of insurance claims in 2022.

Africa and Europe, continuing operations. For the years ended December 31, the Company’s direct vessel profit in Africa and Europe was as follows (in thousands, except statistics):

Operating Revenues. Charter revenues were $27.7 million higher in 2023 compared with 2022. Charter revenues were $16.4 million higher due to the repositioning of vessels between geographic regions and $12.1 million higher for the Regional Core Fleet as a result of increased day rates and utilization partially offset by a $0.8 million decrease due to net asset dispositions. Other marine services were $2.7 million higher primarily due to an immaterial change in the presentation of commission charges, which were reclassed from other marine services to other direct operating expenses. As of December 31, 2023, the Company has one of 19 owned and leased-in vessels (one AHTS) cold-stacked in this region that is classified as held for sale.

Direct Operating Expenses. Direct operating expenses were $7.3 million higher in 2023 compared with 2022. Direct operating expenses were $6.1 million higher due to the repositioning of vessels between geographic regions, $1.9 million higher for the Regional Core Fleet primarily due to the timing of certain repair expenditures, and $0.7 million lower due to net asset dispositions.

Operating Revenues. Charter revenues were $15.8 million higher in 2022 compared with 2021. Charter revenues were $7.7 million higher due to the reactivation of vessels that were previously cold-stacked, $5.6 million higher due to the repositioning of vessels between geographic regions and $3.6 million higher for the Regional Core Fleet as a result of increased day rates and utilization. Charter revenues were $1.1 million lower due to net asset dispositions. Other marine services were $1.2 million higher primarily due to the receipt of cash from the settlement of a mediation in our favor. As of December 31, 2022, the Company had no owned or leased-in vessels cold-stacked in this region.

Direct Operating Expenses. Direct operating expenses were $11.3 million higher in 2022 compared with 2021. Direct operating expenses were $10.2 million higher due to the repositioning of vessels between geographic regions, $1.4 million higher due to the reactivation of vessels that were previously cold-stacked and $0.6 million for the Regional Core Fleet. Direct operating expenses were $0.9 million lower due to net asset dispositions.

Middle East and Asia. For the years ended December 31, the Company’s direct vessel profit (loss) in the Middle East and Asia was as follows (in thousands, except statistics):

Operating Revenues. Charter revenues were $14.3 million higher in 2023 compared with 2022. Charter revenues were $19.2 million higher for the Regional Core Fleet primarily as a result of increased liftboat day rates and utilization and $4.9 million lower due to the repositioning of vessels between geographic regions. Other marine services were $3.6 million higher primarily due to business interruption insurance revenue. As of December 31, 2023, the Company had no vessels cold-stacked in this region.

Direct Operating Expenses. Direct operating expenses were $10.7 million lower in 2023 compared with 2022. Direct operating expenses were $6.2 million lower due to the repositioning of vessels between geographic regions, and $4.5 million lower for the Regional Core Fleet primarily due to insurance reimbursements related to drydocking expenditures expensed in prior periods.

Operating Revenues. Charter revenues were $1.1 million lower in 2022 compared with 2021. Charter revenues were $2.4 million lower due to the repositioning of vessels between geographic regions and $2.3 million lower as a result of reduced day rates and utilization for the Regional Core Fleet. Charter revenues were $3.6 million higher due to the acquisition of an additional two PSVs in this region as a result of the OSV Partners Merger. As of December 31, 2022, the Company had no owned or leased-in vessels cold-stacked in this region compared with one of 20 vessels as of December 31, 2021.

Direct Operating Expenses. Direct operating expenses were $6.0 million higher in 2022 compared with 2021. Direct operating expenses were $5.2 million higher due to net fleet additions and $2.7 million higher for the Regional Core Fleet primarily due to the timing of dry dockings and certain repair expenditures. Direct operating expenses were $1.9 million lower due to the repositioning of vessels between geographic regions. In addition, drydocking and repair expenditures included $5.6 million of costs pending adjustment of insurance claims in 2022.

Latin America. For the years ended December 31, the Company’s direct vessel profit in Latin America was as follows (in thousands, except statistics):

Operating Revenues. Charter revenues were $15.4 million higher in 2023 compared with 2022. Charter revenues were $11.0 million higher for the Regional Core Fleet primarily as a result of increased day rates and $4.4 million higher due to the repositioning of vessels between geographic regions. As of December 31, 2023, the Company had no vessels cold-stacked in this region.

Direct Operating Expenses. Direct operating expenses were $0.7 million lower in 2023 compared with 2022 primarily due to the timing of certain repair expenditures.

Operating Revenues. Charter revenues were $7.9 million lower in 2022 compared with 2021. Charter revenues were $11.1 million lower due to the repositioning of vessels between geographic regions. Charter revenues were $3.2 million higher for the Regional Core Fleet as a result of increased day rates and utilization. Other marine services were $2.0 million lower due to lower management fees from joint ventures and lower reimbursable meals that were partially offset by higher mobilization revenues of $1.5 million, $1.2 million and $0.7 million, respectively. As of December 31, 2022, the Company had no owned or leased-in vessels cold-stacked in this region.

Direct Operating Expenses. Direct operating expenses were $4.5 million lower in 2022 compared with 2021. Direct operating expenses were $7.5 million lower due to the repositioning of vessels between geographic regions, and $3.0 million higher for the Regional Core Fleet primarily due to the timing of certain repair expenditures.

Other Operating Expenses

Lease Expense. Leased-in equipment expenses were $1.1 million lower compared with 2022 primarily due to the impairment of one leased-in vessel in 2022. In addition, our fleet currently includes one leased-in vessel compared to three in 2022. Leased-in equipment expenses were $2.2 million lower for 2022 compared with 2021 primarily due to the impairment of one leased-in vessel during the third quarter of 2022.

Administrative and general. Administrative and general expenses were $8.3 million higher in 2023 compared with 2022 primarily due to increases in wages and benefits expenses of $3.6 million, increases in allowance for credit losses of $3.0 million and increases in professional fees of $1.3 million. Administrative and general expenses were $3.3 million higher in 2022 compared with 2021 primarily due to increases in wages and benefits expenses.

Depreciation and amortization. Depreciation and amortization expenses were $2.1 million lower in 2023 compared with 2022 and $1.4 million lower in 2022 compared with 2021 primarily due to net fleet changes.

Gains (Losses) on Asset Dispositions and Impairments, Net. During 2023, the Company sold one liftboat, classified as held for sale, three liftboats and one specialty vessel, previously removed from service, one FSV and other equipment, previously classified as held for sale, as well as other equipment not previously classified as such, for net cash proceeds of $44.7 million, after transaction costs, and a gain of $21.1 million. In addition, the Company recognized impairment charges of $0.7 million for one AHTS to adjust for indicative future cash flows and the cost to return the vessel to its owner.

During 2022, gain on asset dispositions and impairments was $1.4 million, which included gains from the sale of one FSV, one liftboat previously removed from service, office space and other equipment for net cash proceeds of $6.7 million after transaction costs, and a gain of $3.1 million. In addition, the Company sold one AHTS in exchange for the remaining equity interests in SEACOR Marlin LLC (the owner of the PSV SEACOR Marlin) and recorded a gain on the sale of MexMar, OVH and other assets of $0.8 million (see “Note 4. Investments, at Equity and Advances to 50% or Less Owned Companies” in the audited consolidated financial statements included elsewhere in this Annual Report on Form 10-K). These gains were substantially offset by impairment charges of $2.9 million for one leased-in AHTS, as well as impairment charges for one FSV sold in 2022 and for other equipment classified as assets held for sale, which was subsequently sold in 2023.

During 2021, the Company recorded no impairment charges associated with its fleet. The Company sold one PSV vessel, three FSVs and set off debt payments with hull and machinery insurance proceeds received in respect of the SEACOR Power of $25.0 million, for total payments of $30.1 million in cash, resulting in gains of $20.9 million all of which was recognized currently. The insurance proceeds from the SEACOR Power were primarily used to repay associated debt under the FGUSA Credit Facility as described in “Note 6. Long-Term Debt” in the audited consolidated financial statements included elsewhere in this Annual Report on Form 10-K.

Other Income (Expense), Net

For the years ended December 31, the Company’s other income (expense) was as follows (in thousands):

Interest Income. Interest income increased in 2023 primarily due to interest received for the loan due from MexMar, which has now been fully repaid. Interest income decreased in 2022 primarily due to interest received from the U.S. Internal Revenue Service (“IRS”) due to delays in the payment of the CARES Act tax refunds in 2021. Interest income in 2021 increased primarily due to a tax refund on a portion of interest paid.

Interest expense. Interest expense was higher in 2023 compared to 2022 primarily due to a higher interest rate on the 2018 SMFH Credit Facility (which bore interest at a variable rate), a higher interest rate due to the refinancing of the 2018 SMFH Credit Facility with the 2023 SMFH Credit Facility (which bears interest at a fixed rate of 11.75%), a higher interest rate due to the exchange of the Old Convertible Notes (which bore interest at a fixed rate of 4.25%) for the Guaranteed Notes and the New Convertible Notes (which bear interest at a fixed rate of 8.0% and 4.25%, respectively), and higher interest rates on other variable rate debt as a result of the interest rate environment.

Interest expense was higher in 2022 compared to 2021 primarily due to the debt assumed as a result of the OSV Partners Merger, a higher interest rate on the 2018 SMFH Credit Facility as a result of the entry into an Amendment No. 4 to 2018 SMFH Credit Facility, a higher interest rate due to the exchange of the Old Convertible Notes for the Guaranteed Notes and the New Convertible Notes and higher interest rates on all other variable rate debt as a result of the increasing interest rate environment.

SEACOR Holdings guarantee fees. As of December 31, 2023 and 2022, there were no SEACOR Holdings outstanding guarantee fees as the obligations were terminated in 2021.

(Losses) gains on debt extinguishment. Loss on debt extinguishment was $2.0 million in 2023 due to the exchange of the $130.0 million loan facility with a syndicate of lenders administered by DNB Bank ASA, dated September 26, 2018 (as amended from time to time, the “2018 SMFH Credit Facility”) for the 2023 SMFH Credit Facility. Gain on debt extinguishment was $10.4 million in 2022 due to the exchange of the Old Convertible Notes for the Guaranteed Notes and the New Convertible Notes. Gain on debt extinguishment was $62.0 million in 2021 due to the repayment of the FGUSA Credit Facility. For further information, see “Note 6. Long-Term Debt” in the audited consolidated financial statements included elsewhere in this Annual Report on Form 10-K.

Derivative gains, net. Net derivative gains increased in 2023 compared to 2022 due to the Company entering into an open forward currency exchange contract in the fourth quarter of 2023. Net derivative gains in 2022 decreased compared to 2021 due to the Company not having any open forward currency exchange contracts since the first quarter of 2021.

Foreign currency gains (losses), net. Foreign currency losses in 2023 compared to foreign currency gains in 2022 were primarily due to the strengthening of the pound sterling in relation to the U.S. dollar. Foreign currency gains in 2022 compared to foreign currency losses in 2021 were primarily due to the weakening of the pound sterling and euro in relation to the U.S. dollar.

Gain from return of investments in 50% or less owned companies and other, net. Other gains in 2022 decreased compared to 2021 primarily due to a distribution in 2021 of $12.0 million from MEXMAR Offshore International LLC (“MEXMAR Offshore”), a previous joint venture 49% owned by a previously wholly owned subsidiary of the Company, and 51% owned by a subsidiary of Proyectos Globales de Energía y Servicios CME, S.A. de C.V. (“CME”), of which $9.4 million was in excess of the Company’s investment in the joint venture. The Company no longer has any equity interest in this joint venture.

Income Tax Expense

For the year ending December 31, 2023, the Company’s effective income tax rate of 216.2% was primarily due to foreign withholding taxes.

For the year ending December 31, 2022, the Company’s effective income tax rate of 12.3% was primarily due to foreign taxes paid that are not creditable against U.S. income taxes, foreign losses for which there is no benefit in the U.S. and the sale of investments in 50% or less owned companies.

For the year ending December 31, 2021, the Company’s effective income tax rate of 173.4% was primarily due to foreign taxes paid that are not creditable against U.S. income taxes and foreign subsidiaries with current losses for which there is no current or future federal income tax benefit available.

Equity in Earnings (Losses) of 50% or Less Owned Companies, Net of Tax

For the years ended December 31, the Company’s equity in earnings (losses) from continuing operations of 50% or less owned companies, net of tax, was as follows (in thousands):

(1)

On September 29, 2022, the Company sold its ownership in this joint venture to the majority shareholder. See details below.

(2)

On December 9, 2021, the Company sold their ownership in this joint venture to the majority shareholder. See details below.

(3)

On December 31, 2021, the Company purchased the remaining shares in this joint venture that it did not own and consolidated the net assets of OSV Partners. See details below.

SEACOR Marine Arabia. The increase in equity earnings in 2023 from SEACOR Marine Arabia was due to increased day rates and utilization.

MexMar, OVH and SEACOR Marlin. On September 29, 2022, each of the transactions contemplated under that certain Framework Agreement, by and among SEACOR Marine and certain of its subsidiaries, on the one hand, and Operadora de Transportes Marítimos, S.A. de C.V. (“OTM”), CME Drillship Holdings DAC (“CME Ireland”), and Offshore Vessels Holding, S.A.P.I. de C.V. (“OVH”), on the other hand, were consummated (the “Framework Agreement Transactions”). As a result, the Company no longer owns any equity interest in either MexMar or in OVH, and the Company owns all of the equity interests in SEACOR Marlin LLC.

OSV Partners. On December 31, 2021, SEACOR Marine, SEACOR Offshore OSV LLC, a wholly owned subsidiary of the Company (“SEACOR Offshore OSV”) and OSV Partners I entered into a certain merger agreement pursuant to which OSV Partners I merged with and into SEACOR Offshore OSV, with SEACOR Offshore OSV surviving the merger (the “OSV Partners Merger”). As a result of the OSV Partners Merger, the five 201 feet, 1,900 tons deadweight capacity, PSVs owned by OSV Partners I are now 100% owned by the Company and no longer included as equity in earnings.

MEXMAR Offshore. As of December 31, 2021, the Company does not have any ownership interest in MEXMAR Offshore.