TIDEWATER INC

Previous wording

In certain places in this Form 10-Q, 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.

Current wording

In certain places in this Form 10-Q, we may refer to reports published by third parties that purport to describe trends or developments in energy production and drilling and exploration 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.

Previous wording

At March 31, 2025, we owned 214 vessels with an average age of 12.6 years available to serve the global offshore energy industry.

Current wording

At June 30, 2025, we owned 211 vessels with an average age of 12.8 years available to serve the global offshore energy industry.

Previous wording

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. These costs consist of brokers’ commissions, training costs, satellite communication fees, agent fees, port fees, freight 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.

Current wording

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-hire, drydockings, and changes in fuel prices. Generally, our customers are responsible for fuel costs when our vessels are on-hire and we are responsible for fuel costs when our vessels are off-hire or in drydock. 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, freight 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.

Previous wording

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. Prices are subject to significant uncertainty and, as a result, are extremely volatile. 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 increased disruption of shipping in the Middle East; (iv) 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; (viii) increased activism related to the perceived responsibility of the oil and gas sector for climate change; and (ix) more recently, U.S. trade policies that include substantial tariffs, causing increased market uncertainty and volatility. 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. 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. In the medium term, we continue to see 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. We have experienced a sustained period of growth in offshore exploration and production in the past two years, which has been accompanied by much higher levels of activity and higher day rates for our vessels.

Current wording

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. Prices are subject to significant uncertainty and, as a result, are extremely volatile. 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 increased disruption of shipping in the Middle East; (iv) OPEC+ production quotas, market share expectations and pricing considerations; (v) resource growth in non-OPEC+ nations; (vi) a capital allocation focus on returning value to shareholders within the major oil and gas companies, thereby limiting funds previously available for resource development; (vii) economies of major consuming nations; (viii) increased activism related to the perceived responsibility of the oil and gas sector for climate change; and (ix) more recently, U.S. trade policies that include substantial tariffs, causing increased market uncertainty and volatility. 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. 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. In the medium term, we continue to see 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. We have experienced a sustained period of growth in offshore exploration and production in the past few years, which has been accompanied by much higher levels of activity and higher day rates for our vessels.

Previous wording

Recent developments have introduced significant uncertainty to both the global economy and our business. After the end of the first quarter of 2025, two events emerged that could impact our future operations. First, in early April, OPEC+ announced plans to increase production starting in May, which caused oil prices to drop to the low $60s per barrel, compared to the first quarter 2025 range of $66 to $80 per barrel. Simultaneously, the U.S. imposed worldwide tariffs, further reducing oil prices and significantly lowering values across virtually every stock market globally. Within a week, these tariffs were rescinded for at least 90 days, except for those on Chinese imports, leading to a partial recovery in both the market and oil prices. These actions have injected considerable uncertainty into our business and the global economy. While offshore drilling projects are typically long-cycle and do not immediately react to moderate declines in oil and gas prices, sustained Brent oil prices in the low $60s per barrel may delay drilling projects that were initially expected to commence in late 2025 and early 2026.

Current wording

Recent developments have introduced additional uncertainty to both the global economy and our business. In early April, OPEC+ announced plans to increase production starting in May, which caused oil prices to drop to the low $60s per barrel, compared to the first quarter 2025 range of $66 to $80 per barrel. Simultaneously, the U.S. declared numerous potential worldwide tariffs, further reducing oil prices and significantly lowering values across virtually every stock market globally. Within a week, most of these tariffs were rescinded for at least 90 days, leading to a partial recovery in both the market and oil prices. Then in June, the U.S., Israel and Iran had a brief, and intense, military conflict. Oil prices initially spiked, but returned to the mid $60s after a cease fire was negotiated. In early July, the US once again threatened significant tariffs on certain countries and OPEC+ announced a decision to accelerate its return of production to the market. Determining the long term impact of these tariffs and production increases on our business and the industry continues to be challenging. Offshore drilling projects are typically long-cycle and do not immediately react to moderate increases or declines in oil and gas prices. However, sustained oil prices in the low $60s per barrel, may delay some drilling projects initially expected to commence in late 2025 and early 2026.

Previous wording

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. 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. 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.

Current wording

Vessel utilization is determined primarily by market conditions but is also affected by the amount of drydock and repair days on each vessel. 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 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. 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.

Previous wording

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. Vessel operating costs per active days is calculated based on total available days less stacked days. Total vessels in service also include four vessels not owned by us, that are under bareboat charter agreements. These vessels are included in all of our vessel statistics but are not included in the owned vessel count.

Current wording

Total vessel utilization is calculated on all vessels in service (which includes stacked vessels, vessels held for sale and vessels in drydock or down for repair). 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. Vessel operating costs per active days is calculated based on total available days less stacked days. Total vessels in service also include four vessels not owned by us, that are under bareboat charter agreements. These vessels are included in all of our vessel statistics but are not included in the owned vessel count.

Previous wording

We may sell and/or recycle vessels when market conditions warrant and opportunities arise. We generally target older vessels or vessels that do not meet our strategic goals for sale but may also sell vessels when approached by third parties with positive value propositions. Vessel sales during the first three months of 2025 consisted of two vessels from our active fleet.

Current wording

We may sell and/or recycle vessels when market conditions warrant and opportunities arise. We generally try to sell older vessels or vessels that do not meet our strategic goals but may also sell vessels when approached by third parties with positive value propositions. Vessel sales during the first six months of 2025 consisted of six vessels from our active fleet.

Previous wording

As of March 31, 2025, we had $349.9 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. Included in foreign subsidiary cash are balances held in U.S. dollars and foreign currencies that await repatriation due to various currency conversion and repatriation constraints, partner and tax related matters. We currently expect earnings by our foreign subsidiaries will be indefinitely reinvested in foreign jurisdictions to fund strategic initiatives (such as investment, expansion and acquisitions), fund working capital requirements and repay intercompany liabilities of our foreign subsidiaries in the normal course of business. Moreover, we do not currently intend to repatriate earnings of our foreign subsidiaries to the U.S. because cash generated from our domestic businesses and the repayment of intercompany liabilities from foreign subsidiaries are currently sufficient to fund the cash needs of our U.S. operations.

Current wording

As of June 30, 2025, we had $372.3 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. Included in foreign subsidiary cash are balances held in U.S. dollars and foreign currencies that await repatriation due to various currency conversion and repatriation constraints, partner and tax related matters. We currently expect earnings by our foreign subsidiaries will be indefinitely reinvested in foreign jurisdictions to fund strategic initiatives (such as investment, expansion and acquisitions), fund working capital requirements and repay intercompany liabilities of our foreign subsidiaries in the normal course of business. Moreover, we do not currently intend to repatriate earnings of our foreign subsidiaries to the U.S. because cash generated from our domestic businesses and the repayment of intercompany liabilities from foreign subsidiaries are currently sufficient to fund the cash needs of our U.S. operations.

Previous wording

Our objective in financing our business is to maintain and preserve adequate financial resources and sufficient levels of liquidity. 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 March 31, 2025, we had $636.0 million of debt on our consolidated balance sheet, $80.0 million of which is due in the next twelve months. Working capital, which includes cash on hand, was $360.7 million at March 31, 2025. During the three months ended March 31, 2025, we generated $42.3 million in net income and $86.0 million in cash flow from operating activities, which includes our interest payments and drydock costs.

Current wording

Our objective in financing our business is to maintain and preserve adequate financial resources and sufficient levels of liquidity. As of June 30, 2025, we had approximately $372.3 million of cash on hand and borrowing capacity of $25.0 million. Our borrowing capacity under the New Revolving Credit Facility is $250.0 million, subject to fulfilling all pre-funding conditions. Our $650.0 million 2030 Notes are due July 2030. Working capital, which includes cash on hand, was $381.4 million at June 30, 2025, and includes $93.4 million of current maturities on long term debt. During the six months ended June 30, 2025, we generated $115.0 million in net income and $171.4 million in cash flow from operating activities, which includes our interest payments and drydock costs.

Previous wording

Our primary customer in Mexico has an aggregate outstanding receivable balance of $35.1 million, of which $25.5 million is over 90 days past due, and which represents approximately 11.2% of our total trade and other receivables balance at March 31, 2025. The amounts are not in dispute but we have not had a payment from this customer since May 2024. We have not historically had, and we do not expect to have any material write-offs due to the collectability of these receivables. However, additional or continued delays in customer payments in the future could differ from historical practice and our current expectations; and delays or failures to pay or defaults, if any, could negatively impact our future results. We will continue to monitor these receivables.

Current wording

As of June 30, 2025, our primary customer in Mexico had an aggregate outstanding receivable balance of $45.4 million, with $35.1 million over 90 days past due, which represented approximately 14.4% of our total trade and other receivables balance. The amounts are not in dispute, however, we have not received a payment from this customer since May 2024. We have not historically had, and we do not expect to have any material write-offs due to the collectability of these receivables. However, additional or continued delays in this customer's payments in the future could differ from historical practice and our current expectations, and could negatively impact our future results.

Previous wording

We believe cash and cash equivalents, and future net cash provided by operating activities, will provide us with sufficient liquidity to fund our obligations and meet our liquidity requirements.

Current wording

We believe cash and cash equivalents, coupled with our revolving credit capacity, supplemented with future net cash provided by operating activities, will provide us with sufficient liquidity to fund our obligations and meet our liquidity requirements.

Previous wording

We signed agreements for the construction of ten new vessels. Upon delivery of each vessel, we enter into Facility Agreements to finance a portion of the construction and delivery costs. Nine vessels have been delivered through March 31, 2025, and we entered into Facility Agreements for approximately EUR23.3 million ($24.9 million). Each of the nine Facility Agreements bears interest at fixed 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. Each Facility Agreement is secured by the respective vessel, guaranteed by Tidewater as parent guarantor and contain no financial covenants. We expect the final vessel to be delivered during 2025.

Current wording

We signed agreements for the construction of ten new vessels, all of which have been delivered as of June 30, 2025. We entered into Facility Agreements to finance a portion of the construction and delivery costs for approximately EUR24.9 million ($26.7 million). Each of the ten Facility Agreements bears interest at fixed 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. Each Facility Agreement is secured by the respective vessel, guaranteed by Tidewater as parent guarantor and contain no financial covenants.

Previous wording

Please refer to Note (8) - “Debt” to the accompanying Consolidated Financial Statements for further details on our indebtedness.

Current wording

Please refer to Note (8) - “Debt” to the accompanying Condensed Consolidated Financial Statements for further details on our indebtedness.

Previous wording

On February 27, 2025 our Board of Directors (Board) approved a new $90.3 million share repurchase program. During the three months ended March 31, 2025, we repurchased and retired 910,481 shares for approximately $39.3 million, excluding commissions and a 1% excise tax. During the month of April, we repurchased an additional 1,379,723 shares for approximately $50.8 million excluding commissions and a 1% excise tax. During 2024, our Board approved several share repurchase programs aggregating $90.7 million. 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. Please refer to Item 5 of our Annual Report - Market for Registrant’s Common Equity, Related Stockholder Matters, and Issuer Purchases of Equity Securities for additional information regarding repurchases of our common stock. Also refer to Part II. Item 2. “Issuer Repurchases of Equity Securities” set forth herein and Note (5) - “Stockholders’ Equity and Dilutive Equity Instruments” to the accompanying Consolidated Financial Statements for current year repurchases.

Current wording

On February 27, 2025 our Board of Directors (Board) approved a new $90.3 million share repurchase program. During the six months ended June 30, 2025, we repurchased and retired 2,290,204 shares for approximately $90.0 million, excluding commissions and a 1% excise tax. During 2024, our Board approved several share repurchase programs aggregating $90.7 million. 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. Please refer to Item 5 of our Annual Report - Market for Registrant’s Common Equity, Related Stockholder Matters, and Issuer Purchases of Equity Securities for additional information regarding repurchases of our common stock. See also Part II. Item 2. “Issuer Repurchases of Equity Securities” set forth herein and Note (5) - “Stockholders’ Equity and Dilutive Equity Instruments” to the accompanying Condensed Consolidated Financial Statements for current year repurchases.

Previous wording

No dividends were declared for the three months ended March 31, 2025 and 2024. Please refer to Note (5) - “Stockholders’ Equity and Dilutive Equity Instruments” to the accompanying Consolidated Financial Statements.

Current wording

No dividends were declared for the six months ended June 30, 2025 and 2024. See also Note (5) - “Stockholders’ Equity and Dilutive Equity Instruments” to the accompanying Condensed Consolidated Financial Statements.

Previous wording

Net cash provided by operating activities for the three months ended March 31, 2025 reflects net income of $42.3 million, which includes non-cash depreciation and amortization of $65.4 million and net gains on asset dispositions of $2.5 million. Combined changes in operating assets and liabilities provided $17.1 million in cash, and cash paid for deferred drydock and survey costs was $43.3 million.

Current wording

Net cash provided by operating activities for the six months ended June 30, 2025 reflects net income of $115.0 million, which includes non-cash depreciation and amortization of $129.7 million and net gains on asset dispositions of $8.0 million. Combined changes in operating assets and liabilities provided $7.3 million in cash, and cash paid for deferred drydock and survey costs was $67.1 million.

Previous wording

Net cash provided by operating activities for the three months ended March 31, 2024 reflects net income of $46.7 million, which includes non-cash depreciation and amortization of $56.3 million and net gains on asset dispositions of $11.0 million. Combined changes in operating assets and liabilities used $0.6 million in cash, and cash paid for deferred drydock and survey costs was $40.0 million.

Current wording

Net cash provided by operating activities for the six months ended June 30, 2024 reflects net income of $96.7 million, which includes non-cash depreciation and amortization of $115.7 million and net gains on asset dispositions of $13.0 million. Combined changes in operating assets and liabilities provided $7.2 million in cash, and cash paid for deferred drydock and survey costs was $80.1 million.

Previous wording

Net cash used in investing activities for the three months ended March 31, 2025 reflects receipt of $4.4 million primarily related to the sale of two vessels. Additions to properties and equipment were comprised of approximately $8.4 million in capitalized upgrades to existing vessels and equipment and $1.9 million primarily for other property and information technology equipment purchases and development work.

Current wording

Net cash used in investing activities for the six months ended June 30, 2025 reflects receipt of $11.7 million primarily related to the sale of six vessels. Additions to properties and equipment were comprised of approximately $11.9 million in capitalized upgrades to existing vessels and equipment and $3.6 million primarily for other property and information technology equipment purchases and development work.

Previous wording

Net cash provided by investing activities for the three months ended March 31, 2024 reflects the receipt of $12.5 million primarily related to the sale of three vessels. Additions to properties and equipment were comprised of approximately $10.2 million in capitalized upgrades to existing vessels and $0.7 million primarily for other property and information technology equipment purchases and development work.

Current wording

Net cash used in investing activities for the six months ended June 30, 2024 reflects the receipt of $15.5 million primarily related to the sale of four vessels. Additions to properties and equipment were comprised of approximately $15.6 million in capitalized upgrades to existing vessels and equipment and $1.7 million primarily for other property and information technology equipment purchases and development work.

Previous wording

Net cash used in financing activities for the three months ended March 31, 2025 included payments of long-term debt of $12.5 million, the purchase of 910,481 shares of our common stock for $39.3 million and $7.5 million in shares acquired to pay taxes on share-based awards.

Current wording

Net cash used in financing activities for the six months ended June 30, 2025 included payments of long-term debt of $26.5 million, the purchase of 2,290,204 shares of our common stock for $90.1 million and $7.8 million in shares acquired to pay taxes on share-based awards.

Previous wording

Net cash used in financing activities for the three months ended March 31, 2024 included payments of long-term debt of $12.5 million, the purchase of 38,831 shares of our common stock for $3.5 million, $0.1 million of debt issuance costs and $28.5 million in taxes paid on share-based awards.

Current wording

Net cash used in financing activities for the six months ended June 30, 2024 included payments of long-term debt of $26.5 million, the purchase of 347,954 shares of our common stock for $32.9 million, $0.2 million of debt issuance costs and $28.5 million in shares acquired to pay taxes on stock awards.

Previous wording

Our Annual Report filed with the SEC on February 27, 2025, describes the accounting policies that are critical to reporting our financial position and operating results and that require management’s most difficult, subjective or complex judgments. This Quarterly Report on Form 10-Q should be read in conjunction with the discussion contained in our 2024 Annual Report regarding these critical accounting policies.

Current wording

Our 2024 Annual Report filed with the SEC on February 27, 2025, describes the accounting policies that are critical to reporting our financial position and operating results and that require management’s most difficult, subjective or complex judgments. This Quarterly Report on Form 10-Q should be read in conjunction with the discussion contained in our 2024 Annual Report regarding these critical accounting policies.