-----BEGIN PRIVACY-ENHANCED MESSAGE----- Proc-Type: 2001,MIC-CLEAR Originator-Name: webmaster@www.sec.gov Originator-Key-Asymmetric: MFgwCgYEVQgBAQICAf8DSgAwRwJAW2sNKK9AVtBzYZmr6aGjlWyK3XmZv3dTINen TWSM7vrzLADbmYQaionwg5sDW3P6oaM5D3tdezXMm7z1T+B+twIDAQAB MIC-Info: RSA-MD5,RSA, ElGYi8LCVSQduVxGUeUZo8kIb7RDpBL1/BFM/XnwBwzAMUXJI3CNmddSTFkCRT4c aG17wdTqXp60gKwYhZKmqw== 0000899243-99-001562.txt : 19990723 0000899243-99-001562.hdr.sgml : 19990723 ACCESSION NUMBER: 0000899243-99-001562 CONFORMED SUBMISSION TYPE: 10-Q PUBLIC DOCUMENT COUNT: 4 CONFORMED PERIOD OF REPORT: 19990630 FILED AS OF DATE: 19990722 FILER: COMPANY DATA: COMPANY CONFORMED NAME: TIDEWATER INC CENTRAL INDEX KEY: 0000098222 STANDARD INDUSTRIAL CLASSIFICATION: WATER TRANSPORTATION [4400] IRS NUMBER: 720487776 STATE OF INCORPORATION: DE FISCAL YEAR END: 0331 FILING VALUES: FORM TYPE: 10-Q SEC ACT: SEC FILE NUMBER: 001-06311 FILM NUMBER: 99668439 BUSINESS ADDRESS: STREET 1: 1440 CANAL ST STE 2100 CITY: NEW ORLEANS STATE: LA ZIP: 70112 BUSINESS PHONE: 5045681010 MAIL ADDRESS: STREET 1: 1440 CANAL STREET STREET 2: STE 2100 CITY: NEW ORLEANS STATE: LA ZIP: 70112 FORMER COMPANY: FORMER CONFORMED NAME: TIDEWATER MARINE SERVICE INC DATE OF NAME CHANGE: 19780724 10-Q 1 FORM 10-Q FOR FISCAL QUARTER ENDED JUNE 30, 1999 SECURITIES AND EXCHANGE COMMISSION WASHINGTON, D. C. 20549 FORM 10-Q /X/ QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 - For the Quarterly Period Ended June 30, 1999 ------------- TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 - For the Transition Period From ____________________________to____________________________ Commission file number 1-6311 TIDEWATER INC. - ------------------------------------------------------------------------------- (Exact name of registrant as specified in its charter) DELAWARE 72-0487776 - ------------------------------------------------------------------------------- (State or other jurisdiction of (I.R.S. Employer incorporation or organization) Identification Number) 601 Poydras Street, Suite 1900, New Orleans, Louisiana 70130 - ------------------------------------------------------------------------------- (Address of principal executive offices) (Zip Code) Registrant's telephone number, including area code: (504) 568-1010 -------------------------- _______________________________________________________________________________ Former name, former address and former fiscal year, if changed since last report. Indicate by check mark whether the registrant (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or of such shorter period that the registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days. YES X NO ----- 55,604,693 shares of Tidewater Inc. common stock $.10 par value per share were outstanding on July 20, 1999. Excluded from the calculation of shares outstanding at July 20, 1999 are 4,958,601 shares held by the Registrant's Grantor Stock Ownership Trust. Registrant has no other class of common stock outstanding. -1- PART I. FINANCIAL INFORMATION Item 1. Financial Statements -------------------- TIDEWATER INC. UNAUDITED CONDENSED CONSOLIDATED BALANCE SHEETS (In thousands)
- ---------------------------------------------------------------------------------------------------------- June 30, March 31, ASSETS 1999 1999 - ---------------------------------------------------------------------------------------------------------- Current assets: Cash and cash equivalents $ 73,698 10,422 Trade and other receivables 185,868 238,002 Marine operating supplies 26,075 27,971 Other current assets 4,300 4,483 - ---------------------------------------------------------------------------------------------------------- Total current assets 289,941 280,878 - ---------------------------------------------------------------------------------------------------------- Investments in, at equity, and advances to unconsolidated companies 15,057 17,307 Properties and equipment: Vessels and related equipment 1,499,246 1,505,441 Other properties and equipment 43,744 42,744 - ---------------------------------------------------------------------------------------------------------- 1,542,990 1,548,185 Less accumulated depreciation 917,576 910,005 - ---------------------------------------------------------------------------------------------------------- Net properties and equipment 625,414 638,180 - ---------------------------------------------------------------------------------------------------------- Goodwill, net 344,884 347,176 Other assets 116,637 110,917 - ---------------------------------------------------------------------------------------------------------- $1,391,933 1,394,458 ========================================================================================================== LIABILITIES AND STOCKHOLDERS' EQUITY - ---------------------------------------------------------------------------------------------------------- Current liabilities: Accounts payable and accrued expenses 62,497 71,256 Accrued property and liability losses 4,608 6,605 Income taxes 2,561 4,485 - ---------------------------------------------------------------------------------------------------------- Total current liabilities 69,666 82,346 - ---------------------------------------------------------------------------------------------------------- Deferred income taxes 135,953 128,826 Accrued property and liability losses 60,593 66,052 Other liabilities and deferred credits 49,332 49,527 Stockholders' equity: Common stock of $.10 par value, 125,000,000 shares authorized, issued 60,563,294 shares at June and 60,566,857 shares at March 6,056 6,057 Other stockholders' equity 1,070,333 1,061,650 - ---------------------------------------------------------------------------------------------------------- Total stockholders' equity 1,076,389 1,067,707 - ---------------------------------------------------------------------------------------------------------- $1,391,933 1,394,458 ==========================================================================================================
See Notes to Unaudited Condensed Consolidated Financial Statements. -2- TIDEWATER INC. UNAUDITED CONDENSED CONSOLIDATED STATEMENTS OF EARNINGS (In thousands, except share and per share data)
- ---------------------------------------------------------------------------------------------------------- Three Months Ended June 30, --------------------------- 1999 1998 - ---------------------------------------------------------------------------------------------------------- Revenues: Vessel revenues $ 148,277 267,633 Other marine revenues 6,253 17,244 - ---------------------------------------------------------------------------------------------------------- 154,530 284,877 - ---------------------------------------------------------------------------------------------------------- Costs and expenses: Vessel operating costs 91,892 136,069 Costs of other marine revenues 4,355 13,657 Depreciation and amortization 22,942 23,822 General and administrative 16,946 18,741 - ---------------------------------------------------------------------------------------------------------- 136,135 192,289 - ---------------------------------------------------------------------------------------------------------- 18,395 92,588 Other income (expenses): Foreign exchange gain (loss) (72) 14 Gain on sales of assets 2,359 1,653 Equity in net earnings of unconsolidated companies 1,986 1,762 Minority interests (247) (615) Interest and miscellaneous income 1,914 893 Interest and other debt costs (126) (460) - ---------------------------------------------------------------------------------------------------------- 5,814 3,247 - ---------------------------------------------------------------------------------------------------------- Earnings before income taxes 24,209 95,835 Income taxes 7,747 33,063 - ---------------------------------------------------------------------------------------------------------- Net earnings $ 16,462 62,772 ========================================================================================================== Earnings per common share $ .30 1.06 ========================================================================================================== Diluted earnings per common share $ .30 1.05 ========================================================================================================== Weighted average common shares outstanding 55,498,319 59,359,546 Incremental common shares from stock options 167,498 156,993 - ---------------------------------------------------------------------------------------------------------- Adjusted weighted average common shares 55,665,817 59,516,539 ========================================================================================================== Cash dividends declared per common share $ .15 .15 ==========================================================================================================
See Notes to Unaudited Condensed Consolidated Financial Statements. -3- TIDEWATER INC. UNAUDITED CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS (In thousands)
- ---------------------------------------------------------------------------------------------------------- Three Months Ended June 30, ------------------------------ 1999 1998 - ---------------------------------------------------------------------------------------------------------- Net cash provided by operating activities $ 80,535 104,409 - ---------------------------------------------------------------------------------------------------------- Cash flows from investing activities: Proceeds from sales of assets 3,679 2,923 Additions to properties and equipment (12,787) (9,991) Tax payments related to sale of Compression operations --- (67,810) Other 37 (118) - ---------------------------------------------------------------------------------------------------------- Net cash used in investing activities (9,071) (74,996) - ---------------------------------------------------------------------------------------------------------- Cash flows from financing activities: Principal payments on long-term debt --- (25,000) Credit facility borrowings --- 40,000 Proceeds from issuance of common stock 150 405 Common stock purchased --- (16,195) Dividends paid (8,338) (8,911) - ---------------------------------------------------------------------------------------------------------- Net cash used in financing activities (8,188) (9,701) - ---------------------------------------------------------------------------------------------------------- Net change in cash and cash equivalents 63,276 19,712 Cash and cash equivalents at beginning of period 10,422 24,977 - ---------------------------------------------------------------------------------------------------------- Cash and cash equivalents at end of period $ 73,698 44,689 ========================================================================================================== Supplemental disclosure of cash flow information: Cash paid during the period for: Interest $ 197 181 Income taxes $ 6,779 75,713 ==========================================================================================================
See Notes to Unaudited Condensed Consolidated Financial Statements. -4- TIDEWATER INC. NOTES TO UNAUDITED CONDENSED CONSOLIDATED FINANCIAL STATEMENTS - -------------------------------------------------------------------------------- (1) Interim Financial Statements The consolidated financial information for the interim periods presented herein has not been audited by independent accountants, but in the opinion of management, all adjustments (consisting only of normal recurring adjustments) necessary for a fair presentation of the condensed consolidated balance sheets and the condensed consolidated statements of earnings and cash flows at the dates and for the periods indicated have been made. Results of operations for interim periods are not necessarily indicative of results of operations for the respective full years. (2) Stockholders' Equity At June 30, 1999 and March 31, 1999, 4,960,866 and 4,985,860 shares, respectively, of common stock were held in a grantor stock ownership plan trust for the benefit of stock-based employee benefits programs. These shares are not included in common shares outstanding for earnings per share calculations and transactions between the company and the trust, including dividends paid on the company's common stock, are eliminated in consolidating the accounts of the trust and the company. (3) Income Taxes Income tax expense for interim periods is based on estimates of the effective tax rate for the entire fiscal year. The effective tax rate applicable to pre- tax earnings was 32% and 34.5% for the quarters ended June 30, 1999 and 1998, respectively. (4) Year 2000 Disclosure concerning year 2000 (Y2K) issues facing the company is included as part of management's discussion and analysis at page 13 of this report. -5- INDEPENDENT ACCOUNTANTS' REVIEW REPORT -------------------------------------- The Board of Directors and Shareholders Tidewater Inc. We have reviewed the accompanying condensed consolidated balance sheet of Tidewater Inc. and subsidiaries as of June 30, 1999 and the related condensed consolidated statements of earnings and cash flows for the three-month periods ended June 30, 1999 and 1998. These financial statements are the responsibility of the company's management. We conducted our reviews in accordance with standards established by the American Institute of Certified Public Accountants. A review of interim financial information consists principally of applying analytical procedures to financial data, and making inquiries of persons responsible for financial and accounting matters. It is substantially less in scope than an audit conducted in accordance with generally accepted auditing standards, which will be performed for the full year with the objective of expressing an opinion regarding the financial statements taken as a whole. Accordingly, we do not express such an opinion. Based on our reviews, we are not aware of any material modifications that should be made to the accompanying condensed consolidated financial statements referred to above for them to be in conformity with generally accepted accounting principles. We have previously audited, in accordance with generally accepted auditing standards, the consolidated balance sheet of Tidewater Inc. and subsidiaries as of March 31, 1999, and the related consolidated statements of earnings, stockholders' equity and cash flows for the year then ended, not presented herein, and in our report dated April 27, 1999, we expressed an unqualified opinion on those consolidated financial statements. In our opinion the information set forth in the accompanying condensed consolidated balance sheet as of March 31, 1999, is fairly stated, in all material respects, in relation to the consolidated balance sheet from which it has been derived. Ernst & Young LLP New Orleans, Louisiana July 19, 1999 -6- Item 2. Management's Discussion and Analysis ------------------------------------ The company provides services to the international offshore energy industry through the operation of a diversified fleet of marine service vessels. Revenues, net earnings and cash flows from operations are dependent upon the activity level of the vessel fleet which is ultimately dependent upon oil and natural gas prices which, in turn, are determined by the supply/demand relationship for oil and natural gas. The following discussion should be read in conjunction with the unaudited condensed consolidated financial statements and related disclosures. In accordance with the safe harbor provisions of the Private Securities Litigation Reform Act of 1995, the company notes that certain statements set forth in this Quarterly Report on Form 10-Q which provide other than historical information and which are forward looking, involve risks and uncertainties that may impact the company's actual results of operations. The company faces many risks and uncertainties, many of which are beyond the control of the company, including: fluctuations in oil and gas prices; changes in capital spending by customers in the energy industry for exploration, development and production; unsettled political conditions, civil unrest and governmental actions, especially in higher risk countries of operations; foreign currency controls; and environmental and labor laws. Readers should consider all of these risk factors as well as other information contained in this report. MARINE OPERATIONS - ----------------- Offshore service vessels provide a diverse range of services to the energy industry. Fleet size, utilization and vessel day rates primarily determine the amount of revenues and operating profit because operating costs and depreciation do not change proportionally when revenue changes. Operating costs primarily consist of crew costs, repair and maintenance, insurance, fuel, lube oil and supplies. Fleet size and utilization are the major factors which affect crew costs. The timing and amount of repair and maintenance costs are influenced by vessel age and scheduled drydockings to satisfy safety and inspection requirements mandated by regulatory agencies. Whenever possible, vessel drydockings are done during seasonally slow periods to minimize the impact on vessel operations and are only done if economically justified, given the vessel's age and physical condition. -7- The following table compares revenues and operating expenses (excluding general and administrative expense and depreciation expense) for the company's vessel fleet for the quarters ended June 30 and March 31. Vessel revenues and operating costs relate to vessels owned and operated by the company while other marine services relate to third-party activities of the company's shipyards, brokered vessels and other miscellaneous marine-related activities.
Quarter Quarter Ended Ended June 30, March 31, --------------------- (in thousands) 1999 1998 1999 - ------------------------------------------------------------------------------------- Revenues: Vessel revenues: United States $ 32,758 110,009 43,631 International 115,519 157,624 139,479 - ------------------------------------------------------------------------------------- 148,277 267,633 183,110 Other marine revenues 6,253 17,244 13,786 - ------------------------------------------------------------------------------------- $154,530 284,877 196,896 ===================================================================================== Operating costs: Vessel operating costs: Crew costs $ 53,409 67,929 60,082 Repair and maintenance 17,062 43,126 25,771 Insurance 5,297 5,833 5,678 Fuel, lube and supplies 6,984 9,997 7,360 Other 9,140 9,184 9,950 - ------------------------------------------------------------------------------------- 91,892 136,069 108,841 Cost of other marine revenues 4,355 13,657 10,322 - ------------------------------------------------------------------------------------- $ 96,247 149,726 119,163 =====================================================================================
Marine support services are conducted worldwide with assets that are highly mobile. Revenues are principally derived from offshore service vessels, which regularly and routinely move from one operating area to another, often to and from offshore operating areas in different continents. Because of this asset mobility, revenues and long-lived assets attributable to the company's international marine operations in any one country are not "material" as that term is defined by SFAS No. 131. As a result of the uncertainty of certain customers to make payment of vessel charter hire, the company has deferred the recognition of approximately $8.1 million of billings as of June 30, 1999 ($9.7 million of billings as of March 31, 1999), which would otherwise have been recognized as revenue. The company will recognize the amounts as revenue when the uncertainty has been reduced. -8- Marine operating profit and other components of earnings before income taxes for the quarters ended June 30 and March 31 consists of the following:
Quarter Quarter Ended Ended June 30, March 31, ----------------- (in thousands) 1999 1998 1999 - ----------------------------------------------------------------------------------- Vessel activity: United States $ (397) 53,487 965 International 21,047 39,052 39,025 - ----------------------------------------------------------------------------------- 20,650 92,539 39,990 Gain (loss) on sales of assets 2,357 1,653 (4,799) Other marine services 1,664 3,392 3,321 - ----------------------------------------------------------------------------------- Operating profit $24,671 97,584 38,512 - ----------------------------------------------------------------------------------- Equity in net earnings of unconsolidated companies 1,986 1,762 2,228 Interest and other debt costs (126) (460) (395) Corporate general and administrative (2,945) (3,378) (2,916) Other income 623 327 1,085 - ----------------------------------------------------------------------------------- Earnings before income taxes $24,209 95,835 38,514 ===================================================================================
Current quarter operating profit decreased significantly from the comparative amount in fiscal year 1999 due to declines in utilization, average day rates and active vessels for the worldwide fleet. Declines in revenues were somewhat offset by reductions in vessel operating costs for the worldwide fleet. Declines in utilization and average day rates are directly related to the current oil industry downturn. This downturn in activity and spending in the oil industry commenced with the drop in the price of oil in the fall of 1997 due primarily to worldwide oil surpluses. Cutbacks in customer drilling programs resulted, negatively affecting the U.S. Gulf of Mexico vessel market first as the duration of vessel contracts in this region normally range from one to three months. The number of working drilling rigs in the U.S. Gulf of Mexico declined steadily throughout fiscal year 1999 and, while oil prices have been trending upwards since the beginning of this quarter, the number of active drilling rigs has remained at a low level during the current quarter. U.S.-based vessel revenues for the current quarter have decreased by approximately 70% as compared to the same period in fiscal year 1999 resulting in a small operating loss for the current quarter. Average utilization and average day rates for the U.S.-based towing-supply/supply vessels for the current quarter have decreased by approximately 45% and 52%, respectively, as compared to the quarter ended June 30, 1998. Weak domestic activity is expected to continue for some time with the decline in the number of working drilling rigs. In addition the expected delivery of even more newly-constructed supply vessels to various industry competitors may create an even further imbalance and/or delay a recovery in the Gulf of Mexico supply vessel market thereby putting continued downward pressure on vessel utilization and day rates. Current quarter international-based vessel operating profit decreased approximately 46% as compared to the same quarter in fiscal year 1999 as international-based vessel utilization and day rates showed their most significant quarterly decrease thus far in the current oil industry downturn. International activity has not yet been as dramatically affected by the downturn as the U.S. Gulf of Mexico due primarily to the longer-term nature of international vessel contracts. However, the prolonged drop in oil prices has resulted in curtailments of customer projects, thus lowering vessel demand which will likely continue for the remainder of fiscal year 2000. In response to the oil industry downturn the following actions were taken during the previous quarter. The company began stacking and removing from its actively marketed fleet those vessels that cannot find gainful employment. Drydockings associated with the stacked vessels have been -9- deferred thus reducing repair and maintenance costs in the current quarter versus the same quarter in fiscal year 1999 and the preceding quarter. Reductions in crew personnel were also made and may continue throughout fiscal year 2000 as necessary. These personnel reductions lowered crew costs in the current quarter versus the same quarter in fiscal year 1999 and the preceding quarter. Current quarter operating profit decreased significantly as compared to the preceding quarter's amount due to continued declines in utilization and average day rates for the worldwide fleet. Declines in revenues were offset somewhat by a decrease in operating expenses for the worldwide fleet. Declines in worldwide utilization and average day rates were expected as the oil industry continues to curtail spending during this current downturn. International-based vessel operating profit for the current quarter declined approximately 46% versus the preceding quarter's amount. U.S.-based vessels incurred a small operating loss for the current quarter as compared to an operating profit of just under a million dollars in the preceding quarter. Crew costs and repair and maintenance costs decreased as the result of cost-saving measures as described earlier. Included in gain (loss) on sales of assets in the previous quarter is a writedown of $7.8 million to reduce the carrying value of certain vessels. The writedown resulted from a review of the recoverability of the values of certain vessels. The review was performed due to industry conditions and having stacked and withdrawn from the active fleet several vessels at March 31, 1999. Vessel utilization is determined primarily by market conditions and to a lesser extent by drydocking requirements. Vessel day rates are determined by the demand created through the level of offshore exploration, development and production spending by energy companies relative to the supply of offshore service vessels. Suitability of equipment and the degree of service provided also influence vessel day rates. The following tables compare day-based utilization percentages and average day rates by vessel class and in total for the quarters ended June 30 and March 31: -10-
Quarter Quarter Ended Ended June 30, March 31, --------------- 1999 1998 1999 - ------------------------------------------------------------------- UTILIZATION: - ------------ Domestic-based fleet: -------------------- Towing-supply/supply 47.2% 85.4 60.1 Crew/utility 77.3 88.8 84.1 Offshore tugs 38.9 61.1 38.1 Other 46.6 45.7 35.2 Total 49.4% 79.9 58.3 International-based fleet : ------------------------- Towing-supply/supply 71.9% 86.3 79.2 Crew/utility 89.2 80.2 89.6 Offshore tugs 65.4 76.1 70.1 Safety/standby 77.5 80.7 75.2 Other 52.1 67.9 72.1 Total 72.0% 82.2 78.5 Worldwide fleet: ---------------- Towing-supply/supply 62.6% 85.9 72.2 Crew/utility 85.2 83.6 87.7 Offshore tugs 54.1 69.6 56.8 Safety/standby 77.5 80.7 75.2 Other 50.9 62.7 63.5 Total 64.1% 81.4 71.5 =================================================================== AVERAGE VESSEL DAY RATES: - ------------------------- Domestic-based fleet: --------------------- Towing-supply/supply $3,734 7,709 4,043 Crew/utility 1,806 2,280 2,014 Offshore tugs 6,028 7,649 7,311 Other 1,345 3,449 2,006 Total 3,572 6,658 3,968 International-based fleet: -------------------------- Towing-supply/supply $5,698 6,523 6,229 Crew/utility 2,250 2,447 2,399 Offshore tugs 4,048 4,273 4,411 Safety/standby 6,094 6,541 6,014 Other 1,265 876 1,250 Total $4,676 5,330 5,024 Worldwide fleet: ---------------- Towing-supply/supply $5,143 6,975 5,555 Crew/utility 2,114 2,376 2,270 Offshore tugs 4,652 5,558 5,218 Safety/standby 6,094 6,541 6,014 Other 1,282 1,313 1,347 Total $4,377 5,806 4,725 ===================================================================
-11- The following table compares the average number of vessels by class and geographic distribution for the quarters ended June 30 and March 31:
Quarter Quarter Ended Ended June 30, March 31, ---------------- 1999 1998 1999 - --------------------------------------------------------------------------------------------- Domestic-based fleet: - --------------------- Towing-supply/supply 131 142 134 Crew/utility 26 35 28 Offshore tugs 37 40 37 Other 10 10 10 - --------------------------------------------------------------------------------------------- Total 204 227 209 - --------------------------------------------------------------------------------------------- International-based fleet: - -------------------------- Towing-supply/supply 219 228 228 Crew/utility 50 54 53 Offshore tugs 50 53 53 Safety/standby 25 29 26 Other 33 32 33 - --------------------------------------------------------------------------------------------- Total 377 396 393 - --------------------------------------------------------------------------------------------- Owned or chartered vessels included in marine revenues 581 623 602 Vessels held for sale 50 26 40 Joint-venture and other 46 48 47 - --------------------------------------------------------------------------------------------- Total 677 697 689 =============================================================================================
In July 1999 the company acquired six new-build vessels from an industry competitor for an aggregate price of approximately $22 million. Also in July 1999 the company sold all of its safety/standby vessels for approximately $40 million. Consolidated general and administrative expenses for the quarters ended June 30 and March 31 consist of the following components:
Quarter Quarter Ended Ended June 30, March 31, ----------------- (in thousands) 1999 1998 1999 - --------------------------------------------------------------------------------------------- Personnel $10,133 11,125 10,515 Office and property 2,899 3,309 3,361 Sales and marketing 1,110 1,471 1,295 Professional services 1,232 1,625 1,533 Other 1,572 1,211 (447) - --------------------------------------------------------------------------------------------- $16,946 18,741 16,257 =============================================================================================
During the quarter ended March 31, 1999 the company reversed approximately $966,000 of previously recorded bad debt expense when payment was received for an overdue receivable from one customer. LIQUIDITY, CAPITAL RESOURCES AND OTHER MATTERS - ---------------------------------------------- The company's current ratio, level of working capital and amount of cash flows from continuing operations for any year are directly related to fleet activity and vessel day rates. Fleet activity and vessel day rates are ultimately determined by the supply/demand relationship for oil and natural gas. Variations from year-to-year in these items are primarily the result of market conditions. Cash from -12- ongoing operations in combination with available lines of credit provide the company, in management's opinion, with adequate resources to satisfy present financing requirements. At June 30, 1999, all of the company's $200 million revolving line of credit was available for future financing needs. Continued payment of dividends, currently $.15 per quarter per common share, is subject to declaration by the Board of Directors. Excluding the tax payments related to the sale of Compression operations included in the three-months ended June 30, 1998, investing activities for the quarters ended June 30, 1999 and 1998 were comparable with no significant activity. Financing activities for the quarter ended June 30, 1999 included $8.3 million of cash for quarterly cash dividends of $.15 per share. INFLATION AND CURRENCY FLUCTUATIONS - ----------------------------------- Because of its significant international operations, the company is exposed to currency fluctuations and exchange risks. To minimize the financial impact of these items the company attempts to contract a majority of its services in United States dollars. Day-to-day operating costs are generally affected by inflation. However, because the energy services industry requires specialized goods and services, general economic inflationary trends may not affect the company's operating costs. The major impact on operating costs is the level of offshore exploration, development and production spending by energy exploration and production companies. As this spending increases, prices of goods and services used by the energy industry and the energy services industry will increase. Future increases in vessel day rates may mitigate the effects on the company from the inflationary effects on operating costs. ENVIRONMENTAL MATTERS - --------------------- During the ordinary course of business the company's operations are subject to a wide variety of environmental laws and regulations. The company attempts to comply with these laws and regulations in order to avoid costly accidents and related environmental damage. Compliance with existing governmental regulations which have been enacted or adopted regulating the discharge of materials into the environment, or otherwise relating to the protection of the environment, has not had, nor is expected to have, a material effect on the company. YEAR 2000 - --------- The Year 2000 (Y2K) issue is the result of computer programs written using two digits rather than four to define the applicable year. In response to the Y2K issue, the company began a program in fiscal 1997 designed to identify, assess and address significant Y2K issues in its information technology (IT) systems and non-IT systems. As of June 30, 1999, the company believes that it is on schedule to successfully implement any required systems and equipment modifications that might be necessary to make the company's critical systems Y2K compliant before December 31, 1999. The company's critical IT systems are comprised primarily of the company's mainframe computer and the software programs used on the mainframe, including general ledger accounting and financial reporting software programs and related application modules, personnel and payroll systems, and an insurance claims and accounting system. The assessment of the company's IT systems found that some of the IT systems were not Y2K compliant. Approximately 90% of the changes necessary to make these systems Y2K compliant have been completed, with the remaining changes expected to be completed well in advance of year end. Because many of the company's computer systems have been upgraded or replaced in recent years as part of the company's ongoing upgrade program, specific Y2K compliance costs have been insignificant to date (believed to be less than $100,000). Remaining compliance costs related to the IT systems are also expected to be insignificant (probably -13- less than $100,000) because the company will continue to utilize existing personnel resources to assist in the implementation of its Y2K compliance initiative. Non-IT systems are comprised primarily of computer-controlled equipment and electronic devices, including equipment with embedded microprocessors that are used to operate equipment on the company's vessels. Telephone systems and other office-based electronic equipment systems are also being considered in the assessment of non-IT systems. The company has substantially completed the process of identifying the components that are likely to have a Y2K problem and is in the process of communicating with the appropriate vendors to assess what, if any, changes are necessary to make the component Y2K compliant. The company believes that this assessment will be completed well in advance of December 31, 1999 and does not expect the costs of any required modifications or upgrades to be material with respect to the company's results of operations and financial position. The company has contacted its key vendors and financial services providers to assess their progress with their own Y2K issues and to anticipate potential risks associated with those third parties. Although there is currently no indication that these parties will not achieve their Y2K compliance plans, there can be no guarantee that the systems of other companies with whom the company transacts business will be timely converted. Additionally, there can be no guarantee that the company will not experience Y2K problems. Despite efforts to address all significant Y2K issues in advance, the company could potentially experience disruptions to some aspects of its activities or operations, including, but not limited to, delays in payments to the company from customers or payments by the company to suppliers and disruptions in shipments of equipment and supplies required to operate the company's vessels. Based upon the company's current assessment of its IT systems and non-IT systems and based upon communications to date with vendors, the company has not determined a need to develop a contingency plan for Y2K issues. The company will continue to monitor its decision on contingency planning and such a plan will be developed if and when it is considered necessary to do so. Item 3. Quantitative and Qualitative Disclosure About Market Risk --------------------------------------------------------- No change from 1999 annual report disclosure. -14- PART II. OTHER INFORMATION Item 6. Exhibits and Reports on Form 8-K -------------------------------- A. At page 17 of this report is the index for those exhibits required to be filed as a part of this report. B. The company did not file any reports during the quarter for which this report is filed. -15- SIGNATURES Pursuant to the requirements of the Securities Exchange Act of 1934, Registrant has duly caused this report to be signed on its behalf by the undersigned thereunto duly authorized. TIDEWATER INC. ------------------------------------------------------ (Registrant) Date: July 20, 1999 /s/ William C. O'Malley ------------------------------------------------------ William C. O'Malley Chairman of the Board, President and Chief Executive Officer Date: July 20, 1999 /s/ Ken C. Tamblyn ------------------------------------------------------ Ken C. Tamblyn Executive Vice President and Chief Financial Officer (Principal Accounting Officer) -16- EXHIBIT INDEX Exhibit Number - ------ 3 Amended and Restated Bylaws Dated May 20, 1999 15 Letter re Unaudited Interim Financial Information 27 Financial Data Schedule -17- EX-3 2 AMENDED & RESTATED BYLAWS DATED 05/20/1999 EXHIBIT 3 TIDEWATER INC. AMENDED AND RESTATED BYLAWS (amended and restated through May 20, 1999) ARTICLE I OFFICES Section 1. The principal office shall be in the City of Wilmington, County of New Castle, State of Delaware, and the name of the resident agent in charge thereof is The Corporation Trust Company. Section 2. The corporation may also have offices at such other places both within and without the State of Delaware as the Board of Directors may from time to time determine or the business of the corporation may require. ARTICLE II MEETING OF STOCKHOLDERS Section 1. Meetings of the stockholders for the election of directors shall be held at such time and place either within or without the State of Delaware, as shall be designated from time to time by the Board of Directors and stated in the notice of the meeting or in a duly executed waiver of notice thereof. Section 2. The Annual Meeting of Stockholders for the election of Directors and such other business as may properly be brought before the meeting shall be held on such date and at such time and place or places, within or without the State of Delaware, as shall be designated from time to time by the Board of Directors and stated in the notice of the meeting. Section 3. Written notice of the annual meeting shall be served upon or mailed to each stockholder entitled to vote thereat at such address as appears on the books of the corporation, at least ten days prior to the meeting. Section 4. At least ten days before every election of directors, a complete list of the stockholders entitled to vote at said election, arranged in alphabetical order, with the residence of each and the number of voting shares held by each, shall be prepared by the Secretary. Such list shall be open at the place where the election is to be held for said ten days, to the examination during ordinary business hours of any stockholder for any purpose germane to the meeting, and shall be produced and kept at the time and place of election during the whole time thereof, and subject to the inspection of any stockholder who may be present. 1 Section 5. Special meetings of the stockholders, for any purpose or purposes, unless otherwise prescribed by statute or by the certificate of incorporation, may be called by the Chairman of the Board and shall be called by the Chairman of the Board or Secretary at the request in writing of a majority of the Board of Directors. Such request shall state the purpose or purposes of the proposed meeting. Section 6. Written notice of a special meeting of stockholders, stating the time and place and object thereof, shall be served upon or mailed to each stockholder entitled to vote thereat at such address as appears on the books of the corporation, at least ten days before such meeting. Section 7. Business transacted at all special meetings shall be confined to the objects stated in the call. Section 8. The holders of a majority of the stock issued and outstanding and entitled to vote thereat, present in person or represented by proxy, shall be requisite and shall constitute a quorum at all meetings of the stockholders for the transaction of business except as otherwise provided by statute, by the certificate of incorporation or by these bylaws. If, however, such quorum shall not be present or represented at any meeting of the stockholders, the stockholders entitled to vote thereat, present in person or represented by proxy, shall have power to adjourn the meeting from time to time, without notice other than announcement at the meeting, until a quorum shall be present or represented. At such adjourned meeting at which a quorum shall be present or represented any business may be transacted which might have been transacted at the meeting as originally notified. Section 9. When a quorum is present at any meeting, the vote of the holders of a majority of the stock having voting power present in person or represented by proxy and entitled to vote thereat shall decide any question brought before such meeting, unless the question is one upon which by express provision of the statutes or of the certificate of incorporation or of these bylaws, a different vote is required in which case such express provision shall govern and control the decision of such question. Section 10. At any meeting of the stockholders, every stockholder having the right to vote may vote in person or by proxy appointed in the manner described in subsections (c)(1) and (c)(2) of Section 212 of the Delaware General Corporation Laws. The validity and use of any authorized proxy shall be limited to the meeting for which given. Each holder of common stock represented at a meeting of stockholders shall be entitled to one vote for each share of common stock held of record on all matters on which stockholders generally are entitled to vote. Except where the transfer books of the corporation shall have been closed or a date shall have been fixed as a record date for the determination of its stockholders entitled to vote, no share of stock shall be voted on at any election of directors which shall have been transferred on the books of the corporation within twenty days next preceding such election of directors. 2 Section 11. At an annual meeting of the stockholders, only such business shall be conducted as shall have been properly brought before the meeting. To be properly brought before an annual meeting, business must be (A) specified in the notice of the meeting (or any supplement thereto) given by or at the direction of the Board of Directors, (B) otherwise properly brought before the meeting by or at the direction the Board of Directors, or (C) otherwise properly brought before the meeting by a stockholder. For business to be properly brought before an annual meeting by a stockholder, if such business relates to the election of directors of the corporation, the procedures in Article III, Section 13 must be complied with. If such business relates to any other matter, the stockholder must have given timely notice thereof in writing to the Secretary. To be timely, a stockholders notice must be delivered or mailed and received at the principal executive offices of the corporation, not less than 75 days nor more than 100 days prior to the anniversary date of the immediately preceding annual meeting of stockholders of the corporation; provided, however, that in the event that the annual meeting is called for a date (including any change in a date designated by the Board of Directors pursuant to Section 2 of this Article II) more than 50 days prior to such anniversary date, notice by the stockholder in order to be timely must be so received not later than the close of business on the 10th day following the day on which such notice of the date of the meeting was mailed or public disclosure of the date of the meeting was made, whichever first occurs. A stockholders notice to the Secretary shall set forth as to each matter the stockholder proposes to bring before the annual meeting (A) a brief description of the business desired to be brought before the annual meeting and the reasons for conducting such business at the annual meeting, (B) the name and address, as they appear on the corporations books, of the stockholder proposing such business, (C) the class and number of shares of the corporation which are beneficially owned by the stockholder, and (D) any material interest of the stockholder in such business. Notwithstanding anything in the bylaws to the contrary, no business shall be conducted at any annual meeting except in accordance with the procedures set forth in this Section 11 and except that any stockholder proposal which complies with Rule 14a-8 of the proxy rules (or any successor provisions) promulgated under the Securities and Exchange Act of 1934, as amended, and is to be included in the corporations proxy statement for an annual meeting of the stockholders shall be deemed to comply with the requirements of this Section 11. The chairman of the meeting shall, if the facts warrant, determine and declare to the meeting that business was not properly brought before the meeting in accordance with the provisions of this Section 11, and if he should so determine, the chairman shall so declare to the meeting that any such business not properly brought before the meeting shall not be transacted. ARTICLE III BOARD OF DIRECTORS NUMBER AND CLASSIFICATION OF DIRECTORS Section 1. The number of directors of the corporation (exclusive of directors who 3 may in certain events be elected by the holders of outstanding Preferred Stock voting separately as a class) shall be not less than five (5) or more than ten (10), the exact number of directors to be determined from time to time by resolution adopted by a majority of the entire Board. As used in this Article, "entire Board" means the total number of directors which the corporation would have if there were no vacancies. In the event that the Board is increased by such a resolution, the vacancy or vacancies so resulting shall be filled by a vote of a majority of the directors then in office. No decrease in the Board shall shorten the term of any incumbent director. Directors need not be stockholders. Section 2. Commencing with the 1970 election of directors, the Board of Directors shall be divided into three classes as nearly equal in number as may be, with the term of office of one class expiring each year. At the annual meeting of stockholders in 1970, directors of the first class shall be elected to hold office for a term expiring at the next succeeding annual meeting; directors of the second class shall be elected to hold office for a term expiring at the second succeeding annual meeting; and directors of the third class shall be elected to hold office for a term expiring at the third succeeding annual meeting. If the number of directors is changed, any increase or decrease shall be apportioned among the classes so as to maintain the number of directors in each class as nearly equal as possible, and any additional director of any class elected to fill a vacancy resulting from an increase in such class shall hold office for a term that shall coincide with the remaining term of that class. Any vacancy on the Board of Directors that results from an increase in the number of directors may be filled by a majority of the Board of Directors then in office, provided that a quorum is present, and any other vacancy occurring in the Board of Directors may be filled by a majority of the Directors then in office, even if less than a quorum, or by a sole remaining director. Any director elected to fill a vacancy not resulting from an increase in the number of directors shall have the same remaining term as that of his predecessor. Notwithstanding the foregoing, whenever the holders of any outstanding shares of Preferred Stock shall be entitled, voting separately as a class, to elect directors, the terms of all directors elected by such holder shall expire at the next succeeding annual meeting of stockholders. Subject to the foregoing, at each annual meeting of stockholders, the successors to the class of directors whose term shall then expire shall be elected to hold office for a term expiring at the third succeeding annual meeting. Section 3. The property and business of the corporation shall be managed by or under the direction of its Board of Directors which may exercise all such powers of the corporation and do all such lawful acts and things as are not by statute or by the certificate of incorporation or by these bylaws directed or required to be exercised or done by the stockholders. MEETINGS OF THE BOARD Section 4. The directors of the corporation may hold their meetings, both regular and special, either within or without the State of Delaware. Section 5. Immediately following each Annual Meeting of Stockholders the Board of Directors shall hold a regular meeting for the purpose of organization, election of officers and the transaction of other business, and notice to the newly elected directors of such meeting shall not 4 be necessary in order to legally constitute the meeting so long as a quorum shall be present, or the directors may meet at such place and time as shall be fixed by the consent in writing of all the directors. Section 6. Regular meetings of the Board may be held without notice at such time and place as shall from time to time be determined by the Board. Section 7. Special meetings of the Board of Directors may be called by the Chairman of the Board, the President, or any majority of the directors then in office. Notice thereof stating the place, date and hour of the meeting shall be given to each director either by mail not less than forty-eight (48) hours before the date of the meeting, by telephone or telegram on twenty-four (24) hours' notice, or on such shorter notice as the person or persons calling such meeting may deem necessary or appropriate in the circumstances. Meetings may be held at any time without notice if all the directors are present or if all those not present waive such notice in accordance with Section 2 of Article IV of these bylaws. Section 8. A majority of the Board of Directors shall constitute a quorum for the transaction of business and the act of a majority of the directors present at any meeting at which there is a quorum shall be the act of the Board of Directors, except as may be otherwise specifically provided by statute or by the certificate of incorporation or by these bylaws. If a quorum shall not be present at any meeting of directors, the directors present thereat may adjourn the meeting from time to time without notice other than announcement at the meeting, until a quorum shall be present. COMMITTEES OF DIRECTORS Section 9. The Board of Directors may, by resolution and passed by a majority of the entire Board, designate one or more committees, each committee to consist of two or more of the directors of the corporation, which, to the extent provided in said resolution, shall have and may exercise the powers of the Board of Directors in the management of the business and affairs of the corporation, and may have power to authorize the seal of the corporation to be affixed to all papers which may require it. Such committee or committees shall have such name or names as may be determined from time to time by resolution adopted by the Board of Directors. In the absence or disqualification of a member of a committee, the member or members thereof present at any meeting and not disqualified from voting whether or not he or they constitute a quorum, may unanimously appoint another member of the Board of Directors to act at the meeting in the place of such absent or disqualified member. Section 10. No committee of the Board of Directors not in existence on June 19, 1991 may be created if the powers or responsibilities of such committee would diminish, duplicate, contravene or be otherwise inconsistent with the powers and responsibilities of any committee in existence on such date without the affirmative vote of 80% of the Board of Directors. Notwithstanding any other provision of these Bylaws, this Section 10 of Article III may not be amended without the affirmative vote of 80% of the Board of Directors. 5 Section 11. The committees shall keep regular minutes of their proceedings and report the same to the Board when required. COMPENSATION OF DIRECTORS Section 12. Directors and members of committees may receive such compensation, if any, for their services, and such reimbursement for expenses, as may be fixed or determined by the Board of Directors. Nothing herein contained shall be construed to preclude any director from serving the corporation in any other capacity as an officer, agent, employee, or otherwise and receiving compensation therefor. DIRECTORS EMERITUS Section 13. In order to publicly recognize distinguished service to or on behalf of the corporation, one or more directors may, pursuant to a majority vote of stockholders or a majority vote of the Board of Directors, be elected to serve as Director Emeritus. Candidates for designation of the title Director Emeritus shall be selected from among former Board members upon retirement or other separation from active service to the corporation. Each Director Emeritus elected shall be publicly honored by being listed or otherwise identified in the corporations annual report to stockholders for the year in which such election shall occur and thereafter at the pleasure of the Board of Directors. Each Director Emeritus shall continue to serve the corporation at the discretion of the Board of Directors. They shall be entitled to receive notice of and to attend regular meetings of the Board of Directors but shall not be entitled to vote thereat and shall not be deemed to be a Director of the corporation for any purposes whatsoever under any applicable law or under the bylaws of the corporation. There shall be paid to each Director Emeritus a regular meeting fee for each Board of Directors meeting attended by such Director Emeritus, plus reimbursement for direct expenses actually incurred by them in attending such meetings. NOMINATION OF DIRECTORS Section 14. Only persons who are nominated in accordance with the following procedures shall be eligible for election as directors. Nominations for election to the Board of Directors of the corporation at a meeting of stockholders may be made by the Board of Directors or by any stockholder of the corporation entitled to vote for the election of directors at such meeting who complies with the notice procedures set forth in this Section 13. Such nominations, other than those made by or on behalf of the Board of Directors, shall be made by notice in writing delivered or mailed by first class United States mail, postage prepaid, to the Secretary and received not less than 75 days nor more than 100 days prior to the anniversary date of the immediately preceding the annual meeting of stockholders of the corporation; provided, however, that in the event that the meeting is called for a date (including any change in a date designated by the Board pursuant to Section 2 of Article II) more than 50 days prior to such anniversary date, notice by the stockholder in order to be timely must be so received not later than the close of business on the 10th day following the day on which such notice of the date of the meeting was mailed or public disclosure of the date of 6 the meeting was made, whichever first occurs. Such notice shall set forth (A) as to each proposed nominee (i) the name, age, business addressed, and, if known, residence address of each such nominee, (ii) the principal occupation or employment of each such nominee, (iii) the number of shares of stock of the corporation which are beneficially owned by each such nominee, and (iv) any other information concerning the nominee that must be disclosed as to nominees in proxy solicitations pursuant to Regulation 14A under the Securities Exchange Act of 1934, as amended (including such person's written consent to be named as a nominee and to serve as a director if elected); and (B) as to the stockholder giving the notice (i) the name and address, as they appear on the corporation's books, of such stockholder, and (ii) the class and number of shares of the corporation which are beneficially owned by such stockholder. The corporation may require any proposed nominee to furnish such other information as may reasonably be required by the corporation to determine the eligibility of such proposed nominee to serve as a director of the corporation. The chairman of the meeting may, if the facts warrant, determine and declare to the meeting that a nomination was not made in accordance with the foregoing procedure, and if he should so determine, he shall so declare to the meeting and the defective nomination shall be disregarded. ARTICLE IV NOTICES Section 1. Whenever under the provisions of the statutes or of the certificate of incorporation or of these bylaws, notice is required to be given to any director or stockholder, it shall not be construed to mean personal notice, but such notice may be given in writing, by mail, addressed to such director or stockholder at such address as appears on the books of the corporation, and such notice shall be deemed to be given at the time when the same shall be thus mailed. Notice may also be given personally or by telegram, telex or cable and such notice shall be deemed to be given at the time of receipt thereof if given personally and at the time of transmission thereof if given by telegram, telex or cable. Section 2. Whenever any notice is required to be given under the provisions of the statutes or of the certificate of incorporation, or of these bylaws, a waiver thereof in writing signed by the person or persons entitled to said notice, whether before or after the time stated therein, shall be deemed equivalent thereto. ARTICLE V OFFICERS Section 1. The officers of the corporation shall be chosen by the Directors and shall be a Chief Executive Officer, President, one or more Vice Presidents, Secretary, Treasurer, and 7 Controller. The Board of Directors may also choose a Chairman of the Board whose duties shall be fixed by the Board of Directors from time to time. The Chairman of the Board and Chief Executive Officer shall be chosen from the members of the Board of Directors, but none of the other officers need be a member of the Board. Should the Board of Directors choose more than one Vice President, it may establish separate classifications of Vice Presidents and distinguish relative ranking among the classifications so chosen. The Board may also choose one or more Assistant Secretaries and Assistant Treasurers. Two or more offices may be held by the same person. Section 2. The Board of Directors at its first meeting after each annual meeting of stockholders shall choose the officers of the Corporation. Section 3. The Board may appoint such other officers and agents as it shall deem necessary, who shall hold their offices for such terms and shall exercise such powers and perform such duties as shall be determined from time to time by the Board. Section 4. The salaries of all officers and agents of the corporation shall be fixed by the Board of Directors or by such persons as the Board of Directors may designate. Section 5. The officers of the corporation shall hold office until their successors are chosen and qualify in their stead. Any officer elected or appointed by the Board of Directors may be removed at any time by the affirmative vote of a majority of the entire Board of Directors. If the office of any officer becomes vacant for any reason, the vacancy may be filled by the Board of Directors. THE CHIEF EXECUTIVE OFFICER Section 6. The Chairman of the Board of Directors shall be the Chief Executive Officer of the Corporation; he shall preside at all meetings of the stockholders and directors, shall be ex officio member of all standing committees, shall have general and active management of the business of the corporation, and shall see that all orders and resolutions of the Board are carried into effect. Section 7. He shall execute bonds, mortgages and other contracts requiring a seal, under the seal of the corporation, except where required or permitted by law to be otherwise signed and executed and except where the signing and execution thereof shall be expressly delegated by the Board of Directors to some other officer or agent of the corporation. PRESIDENT AND VICE PRESIDENT Section 8. The President and then Vice Presidents, in order of their classification and then in order of seniority within their classification, at the direction of the Board of Directors, in case of disability of the Chairman of the Board, or his absence from the particular place where the act is to be performed, shall perform the duties and exercise the powers of the Chairman of the Board, and shall perform such other duties as the Board of Directors shall prescribe; 8 provided, however, that a President or any Vice President who is not a citizen of the United States shall not perform any of the powers of the Chairman of the Board. THE SECRETARY AND ASSISTANT SECRETARIES Section 9. The Secretary shall attend all sessions of the Board and all meetings of the stockholders and record all votes and the minutes of all proceedings in a book to be kept for that purpose and shall perform like duties for the standing committees when required. He shall give, or cause to be given, notice of all meetings of the stockholders and special meetings of the Board of Directors, and shall perform such other duties as may be prescribed by the Board of Directors or President, under whose supervision he shall be. He shall keep in safe custody the seal of the corporation, and, when authorized by the Board, affix the same to any instrument requiring it and, when so affixed, it shall be attested by his signature or by the signature of the Treasurer or an Assistant Secretary. Section 10. The Assistant Secretaries in order of their seniority shall, in case of disability of the Secretary, or his absence from the particular place where the act is to be performed, perform the duties and exercise the powers of the Secretary and shall perform such other duties as the Board of Directors shall prescribe. THE TREASURER AND ASSISTANT TREASURER Section 11. The Treasurer shall have the custody of the corporate funds and securities and shall keep full and accurate accounts of receipts and disbursements in books belonging to the corporation and shall deposit all moneys and other valuable effects in the name and to the credit of the corporation in such depositories as may be designated by the Board of Directors. Section 12. He shall disburse the funds of the corporation as may be ordered by the Board, taking proper vouchers for such disbursements, and shall render to the President and directors, at the regular meetings of the Board, or whenever they may require it, an account of all his transactions as Treasurer and of the financial condition of the corporation. Section 13. If required by the Board of Directors, he shall give the corporation a bond (which shall be renewed every six years) in such sum and with such surety or sureties as shall be satisfactory to the Board for the faithful performance of the duties of his office and for the restoration to the corporation, in case of his death, resignation, retirement or removal from office, of all books, papers, vouchers, money and other property of whatever kind in his possession or under his control belonging to the corporation. Section 14. The Assistant Treasurers shall perform such duties as the Board of Directors shall prescribe. THE CONTROLLER Section 15. The Controller shall be responsible for the development and maintenance 9 of the accounting systems used by the corporation and its subsidiaries. The Controller shall be authorized to implement policies and procedures to ensure that the corporation and its subsidiaries maintain internal accounting control systems designed to provide reasonable assurance that the accounting records accurately reflect business transactions and that such transactions are in accordance with management's authorization. Additionally, the Controller shall be responsible for internal and external financial reporting for the corporation and its subsidiaries and shall perform such other duties as the Board of Directors shall prescribe. ARTICLE VI CERTIFICATE OF STOCK Section 1. The certificates of stock of the corporation shall be numbered and shall be entered in the books of the corporation as they are issued. They shall exhibit the holder's name and number of shares and shall be signed by the Chief Executive Officer, President or a Vice President and the Treasurer or an Assistant Treasurer or the Secretary or an Assistant Secretary. The designations, preferences and relative, participating, optional or other special rights of each class of stock or series thereof and the qualifications, limitations or restrictions of such preferences and/or rights shall be set forth in full or summarized on the face or back of the certificates which the corporation shall issue to represent such class or series of stock. Certificates may be issued for partly paid shares and in such case upon the face or back of the certificates issued to represent any such partly paid shares, the total amount of the consideration to be paid therefor, and the amount paid thereon shall be specified. LOST CERTIFICATES Section 2. The Board of Directors may direct a new certificate or certificates theretofore issued by the corporation alleged to have been lost or destroyed, upon the making of an affidavit of that fact by the person claiming the certificate of stock to be lost or destroyed. When authorizing such issue of a new certificate or certificates, the Board of Directors may, in its discretion and as a condition precedent to the issuance thereof, require the owner of such lost or destroyed certificate or certificates, or his legal representative to advertise the same in such manner as it shall require and/or give the corporation a bond in such sum as it may direct as indemnity against any claim that may be made against the corporation with respect to the certificate alleged to have been lost or destroyed. TRANSFER OF STOCK Section 3. Except as otherwise provided in the Certificate of Incorporation of the corporation, upon surrender to the corporation of a certificate for shares duly endorsed or accompanied by proper evidence of succession, assignment or authority to transfer, it shall be the duty of the corporation to issue a new certificate to the person entitled thereto, cancel the old certificate and record the transaction upon its books. 10 CLOSING OF TRANSFER BOOKS Section 4. The Board of Directors may close the stock transfer books of the corporation for a period not exceeding fifty days preceding the date of any meeting of stockholders or the date for payment of any dividend or the date for the allotment of rights or the date when any change or conversion or exchange of capital stock shall go into effect or for a period of not exceeding fifty days in connection with obtaining the consent of stockholders for any purpose. In lieu of closing the stock transfer books as aforesaid, the Board of Directors may fix in advance a date, not exceeding fifty days preceding the date of any meeting of stockholders, or the date of the payment of any dividend, or the date for the allotment of rights, or the date when any change or conversion or exchange of capital stock shall go into effect or a date in connection with obtaining such consent, as a record date for the determination of the stockholders entitled to notice of, and to vote at, any such meeting, and any adjournment thereof, or entitled to receive payment of any such dividend, or to any such allotment of rights, or to exercise the rights in respect of any such change, conversion or exchange of capital stock, or to give such consent, and in such case such stockholders and only such stockholders as shall be stockholders of record on the date so fixed shall be entitled to such notice of, and to vote at, such meeting and any adjournment thereof, or to receive payment of such dividend, or to receive such allotment of rights, or to exercise such rights, or to give such consent, as the case may be, notwithstanding any transfer of any stock on the books of the corporation after any such record date fixed as aforesaid. REGISTERED STOCKHOLDERS Section 5. The corporation shall be entitled to treat the holder of record of any share or shares of stock as the holder in fact thereof and, accordingly, shall not be bound to recognize any equitable or other claim to or interest in such share or shares on the part of any other person, whether or not it shall have express or other notice thereof, except as otherwise provided by the laws of Delaware. ARTICLE VII GENERAL PROVISIONS DIVIDENDS Section 1. Dividends upon the capital stock of the corporation, subject to the provisions of the certificate of incorporation, if any, may be declared by the Board of Directors at any regular or special meeting, pursuant to law. Dividends may be paid in cash, in property, or in shares of the capital stock, subject to the provisions of the certificate of incorporation. Section 2. Before payment of any dividend, there may be set aside out of any funds of the corporation available for dividends such sum or sums as the directors from time to time, in their absolute discretion, think proper as a reserve fund to meet contingencies, or for equalizing 11 dividends, or for repairing or maintaining any property of the corporation, or for such other purpose as the directors shall think conducive to the interest of the corporation, and the directors may modify or abolish any such reserve in the manner in which it was created. ANNUAL STATEMENT Section 3. The Board of Directors shall present at each annual meeting and when called for by vote of the stockholders at any special meeting of the stockholders, a full and clear statement of the business and condition of the corporation. CHECKS Section 4. All checks or demands for money and notes of the corporation shall be signed by such officer or officers or such other person or persons as the Board of Directors may from time to time designate. FISCAL YEAR Section 5. The fiscal year of the corporation shall be fixed by resolution of the Board of Directors. SEAL Section 6. The corporate seal shall have inscribed thereon the name of the corporation, the year of its organization and the words "Corporate Seal, Delaware". Said seal may be used by causing it or a facsimile thereof to be impressed or affixed or reproduced or otherwise. ARTICLE VIII INDEMNIFICATION Section 1. Subject to Section 3 of this Article VIII, the corporation shall indemnify any person who was or is a party or is threatened to be made a party to any threatened, pending or completed action, suit or proceeding, whether civil, criminal, administrative or investigative (other than an action by or in the right of the corporation) by reason of the fact that he is or was a director, director emeritus, officer, employee or agent of the corporation or any of its subsidiaries, or is or was serving at the request of the corporation as a director, director emeritus, officer, employee or agent of another corporation, partnership, joint venture, trust, employee benefit plan or other enterprise, against expenses (including attorneys' fees), judgments, fines and amounts paid in settlement actually and reasonably incurred by him in connection with such action, suit or proceeding if he acted in good faith and in a manner he reasonably believed to be in or not opposed to the best interests of the corporation, and, with respect to any criminal action or proceeding, had no reasonable cause to believe his conduct was unlawful. The termination of any action, suit or proceeding by judgment, order, settlement, conviction, or upon a plea of nolo 12 contendere or its equivalent, shall not, of itself, create a presumption that the person did not act in good faith and in a manner which he reasonably believed to be in or not opposed to the best interests of the corporation, and, with respect to any criminal action or proceeding, had reasonable cause to believe that his conduct was unlawful. Section 2. Subject to Section 3 of this Article VIII, the corporation shall indemnify any person who was or is a party or is threatened to be made a party to any threatened, pending or completed action or suit by or in the right of the corporation to procure a judgment in its favor by reason of the fact that he is or was a director, director emeritus, officer, employee or agent of the corporation or any of its subsidiaries, or is or was serving at the request of the corporation as a director, director emeritus, officer, employee or agent of another corporation, partnership, joint venture, trust, employee benefit plan or other enterprise against expenses (including attorneys' fees) actually and reasonably incurred by him in connection with the defense or settlement of such action or suit if he acted in good faith and in a manner he reasonably believed to be in or not opposed to the best interests of the corporation; except that no indemnification shall be made in respect of any claim, issue or matter as to which such person shall have been adjudged to be liable to the corporation unless and only to the extent that the Court of Chancery or the court in which such action or suit was brought shall determine upon application that, despite the adjudication of liability but in view of all the circumstances of the case, such person is fairly and reasonably entitled to indemnity for such expenses which the Court of Chancery or such other court shall deem proper. Section 3. Any indemnification under this Article VIII (unless ordered by a court) shall be made by the corporation only as authorized in the specific case upon a determination that indemnification of the director, director emeritus, officer, employee or agent is proper in the circumstances because he has met the applicable standard of conduct set forth in Section 1 or 2 of this Article VIII, as the case may be. Such determination shall be made (A) by the Board of Directors by a majority vote of a quorum consisting of directors who were not parties to such action, suit or proceeding, or (B) if such a quorum is not obtainable, or, even if obtainable a quorum of disinterested directors so directs, by independent legal counsel in a written opinion, or (C) by the stockholders. To the extent, however, that a director, director emeritus, officer, employee or agent has been successful on the merits or otherwise in defense of any action, suit or proceeding described above, or in defense of any claim, issue or matter therein, he shall be indemnified against expenses (including attorneys' fees) actually and reasonably incurred by him in connection therewith, without the necessity of authorization in the specific case. Section 4. For purposes of any determination under Section 3 of this Article VIII, a person shall be deemed to have acted in good faith and in manner he reasonably believed to be in or not opposed to the best interests of the corporation, or, with respect to any criminal action or proceeding, to have had no reasonable cause to believe his conduct was unlawful, if his action is based on the records or books of account of the corporation or another enterprise, or on information supplied to him by the officers of the corporation or another enterprise in the course of their duties, or on the advice of legal counsel for the corporation or another enterprise or on information or records given or reports made to the corporation or another enterprise by an independent certified public accountant or by an appraiser or other expert selected with 13 reasonable care by the corporation or another enterprise. The term "another enterprise" as used in this Section 4 shall mean any other corporation or any partnership, joint venture, trust, employee benefit plan or other enterprise of which such person is or was serving at the request of the corporation as a director, director emeritus, officer, employee or agent. The provisions of this Section 4 shall not be deemed to be exclusive or to limit in any way the circumstances in which a person may be deemed to have met the applicable standard of conduct set forth in Sections 1 or 2 of this Article VIII, as the case may be. Section 5. Notwithstanding any contrary determination in the specific case under Section 3 of this Article VIII, and notwithstanding the absence of any determination thereunder, any director, director emeritus, officer, employee or agent may apply to any court of competent jurisdiction in the State of Delaware for indemnification to the extent otherwise permissible under Sections 1 and 2 of this Article VIII. The basis of such indemnification by a court shall be a determination by such court that indemnification of the director, director emeritus, officer, employee or agent is proper in the circumstances because he has met the applicable standards of conduct set forth in Sections 1 or 2 of this Article VIII, as the case may be. Neither a contrary determination in the specific case under Section 3 of this Article VIII nor the absence of any determination thereunder shall be a defense to such application or create a presumption that the director, director emeritus, officer, employee or agent seeking indemnification has not met any applicable standard of conduct. Notice of any application for indemnification pursuant to this Section 5 shall be given to the corporation promptly upon the filing of such application. If successful, in whole or in part, the director, director emeritus, officer, employee or agent seeking indemnification shall also be entitled to be paid the expense of prosecuting such application. Section 6. Expenses incurred in defending or investigating a threatened or pending action, suit or proceeding shall be paid by the corporation in advance of the final disposition of such action, suit or proceeding upon receipt of an undertaking by or on behalf of the director, director emeritus, officer, employee or agent to repay such amount if it shall ultimately be determined that he is not entitled to be indemnified by the corporation as authorized in this Article VIII. Section 7. Without limiting any of the provisions of this Article VIII, if any action, suit or proceeding is brought against a director, director emeritus, officer, employee or agent and such director, director emeritus, officer, employee or agent is entitled to be indemnified under this Article VIII or to advancement of expenses hereunder (an "indemnified party"), (A) the indemnified party may retain counsel satisfactory to him and the corporation, (B) the corporation shall pay all reasonable fees and expenses of such counsel for the indemnified party promptly as statements therefor are received, (C) the indemnified party shall keep the corporation reasonably apprised of the status of such action, claim or proceeding, and (D) the corporation will use all reasonable efforts to assist in the vigorous defense of any such matter; provided, that the corporation shall not be liable for any settlement of any action, suit or proceeding without its prior written consent, which consent, however, shall not be unreasonably withheld. Section 8. Any indemnified party wishing to claim indemnification under this Article VIII, upon learning of any such action, suit or proceeding, shall promptly notify the corporation 14 (but the failure to so notify the corporation shall not relieve the corporation from any liability that it may have under this Article VIII except to the extent such failure prejudices the corporation). The indemnified parties as a group may retain only one law firm to represent them with respect to each matter unless there is, under applicable standards of professional conduct, a conflict on any significant issue between the positions of any two or more indemnified parties, in which case the indemnified parties as a group shall be entitled to retain only the minimum number of law firms necessary for separate representation of each conflicting position. Section 9. The indemnification and advancement of expenses provided by or granted pursuant to this Article VIII shall not be deemed exclusive of any other rights to which those seeking indemnification or advancement of expenses may be entitled under any Bylaw, agreement, contract, vote of stockholders or disinterested directors or pursuant to the direction (howsoever embodied) of any court of competent jurisdiction or otherwise, both as to action in his official capacity and as to action in another capacity while holding such office, it being the policy of the corporation that indemnification of the persons specified in Sections 1 and 2 of this Article VIII shall be made to the fullest extent permitted by law. The provisions of this Article VIII shall not be deemed to preclude the indemnification of any person who is not specified in Sections 1 or 2 of this Article VIII but whom the corporation has the power or obligation to indemnify under the provisions of the General Corporation Law of the State of Delaware, or otherwise. The indemnification and advancement of expenses provided by, or granted pursuant to, this Article VIII shall, unless otherwise provided when authorized or ratified, continue as to a person who has ceased to be a director, director emeritus, officer, employee or agent and shall inure to the benefit of the heirs, executors and administrators of such person. Section 10. The corporation may purchase and maintain insurance on behalf of any person who is or was a director, director emeritus, officer, employee or agent of the corporation, or is or was serving at the request of the corporation as a director, director emeritus, officer, employee or agent of another corporation, partnership, joint venture, trust, employee benefit plan or other enterprise against any liability asserted against him and incurred by him in any such capacity, or arising out of his status as such, whether or not the corporation would have the power or the obligation to indemnify him against such liability under the provisions of this Article VIII. Section 11. For purposes of this Article VIII, references to "the corporation" shall include, in addition to the resulting corporation, any constituent corporation (including any constituent of a constituent) absorbed in a consolidation or merger which, if its separate existence had continued, would have had power and authority to indemnify its directors, directors emirate, officers, employees and agents, so that any person who is or was a director, director emeritus, officer, employee or agent of such constituent corporation, or is or was serving at the request of such constituent corporation as a director, director emeritus, officer, employee or agent of another corporation, partnership, joint venture, trust, employee benefit plan or other enterprise, shall stand in the same position under the provisions of this Article VIII with respect to the resulting or surviving corporation as he would have with respect to such constituent corporation if its separate existence had continued. 15 For purposes of this Article VIII, references to "fines" shall include any excise taxes assessed on a person with respect to an employee benefit plan; and references to "serving at the request of the corporation" shall include any service as a director, director emeritus, officer, employee or agent of the corporation which imposes duties on, or involves services by, such person with respect to an employee benefit plan, its participants or beneficiaries; and a person who acted in good faith and in a manner he reasonably believed to be in the interest of the participants and beneficiaries of an employee benefit plan shall be deemed to have acted in a manner "not opposed to the best interests of the corporation" as referred to in this Article VIII. Section 12. The rights to indemnification provided in this Article VIII with respect to a particular threatened, pending or completed action, suit or proceeding shall vest in the indemnified party upon the occurrence of the event or chain of events giving rise to such threatened, pending or completed action, suit or proceeding, and no amendment or repeal of this Article VIII shall adversely affect any right to indemnification to which an indemnified party would have been entitled prior to the time of such amendment or repeal. ARTICLE IX AMENDMENTS Section 1. These bylaws may be altered or repealed at any regular meeting of the stockholders or at any special meeting of the stockholders at which a quorum is present or represented, provided notice of the proposed alteration or repeal be contained in the notice of such special meeting, by the affirmative vote of a majority of the stock entitled to vote at such meeting and present or represented thereat, or by the affirmative vote of a majority of the Board of Directors at any regular meeting or any special meeting of the Board if notice of the proposed alteration or repeal be contained in the notice of such special meeting. Section 2. Notwithstanding any other provisions of these bylaws (including Section 1 of this Article IX) or the Certificate of Incorporation, the adoption by stockholders of any alteration, amendment, change, addition to or repeal of all or any part of Sections 1 or 2 of Article III or this Section 2 of Article IX of these bylaws, or the adoption by stockholders of any other provision of these bylaws which is inconsistent with or in addition to such Sections of these bylaws, shall require the affirmative vote of the holders of not less than eighty percent (80%) of the votes entitled to be cast by the holders of all then outstanding stock of the Corporation entitled to vote in the election of directors, considered for purposes of this Section 2 as one class. 16 EX-15 3 LETTER RE: UNAUDITED INTERIM FINANCIAL INFORMATION EXHIBIT 15 The Board of Directors and Shareholders Tidewater Inc. We are aware of the incorporation by reference in the Registration Statements (Forms S-8 No. 33-63094, No. 33-38240, No. 333-32729 and No. 333-47687) of Tidewater Inc. of our report dated July 19, 1999 relating to the unaudited condensed consolidated interim financial statements of Tidewater Inc. that are included in its Form 10-Q for the quarter ended June 30, 1999. Pursuant to Rule 436(c) of the Securities Act of 1933, our report is not a part of the registration statements prepared or certified by accountants within the meaning of Section 7 or 11 of the Securities Act of 1933. Ernst & Young LLP New Orleans, Louisiana July 19, 1999 EX-27 4 FINANCIAL DATA SCHEDULE
5 This schedule contains summary financial information extracted from the condensed consolidated balance sheets and the condensed consolidated statements of earnings at the date and for the period indicated and is qualified in its entirety by reference to such financial statements. All amounts shown are in thousands of dollars, except per share data. 1 3-MOS MAR-31-2000 APR-01-1999 JUN-30-1999 73,698 0 197,227 11,359 26,075 289,941 1,542,990 917,576 1,391,933 69,666 0 0 0 6,056 1,070,333 1,391,933 154,530 154,530 136,135 136,135 0 0 126 24,209 7,747 16,462 0 0 0 16,462 .30 .30
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