XML 51 R34.htm IDEA: XBRL DOCUMENT v3.10.0.1
FRESH-START ACCOUNTING (Tables)
 12 Months Ended
Dec. 31, 2018
Fresh Start Balance Sheet [Abstract]  
Reconciliation of Enterprise Value to Estimated Fair Value of Successor's Common Stock

The following table reconciles our Enterprise Value to the estimated fair value of the Successor’s common stock as of July 31, 2017:

 

(In thousands)

 

July 31, 2017

 

Enterprise Value

 

$

1,050,000

 

  Add: Cash and cash equivalents

 

 

560,866

 

  Less: Amounts due to General Unsecured Creditors

 

 

(102,193

)

  Less: Fair value of debt

 

 

(451,589

)

  Less: Fair value of New Creditor, Series A and B warrants

 

 

(299,045

)

  Less: Fair value of noncontrolling interests

 

 

(1,675

)

Fair Value of Successor common stock

 

$

756,364

 
Reconciliation of Enterprise Value to its Reorganization Value

The following table reconciles our Enterprise Value to our Reorganization Value as of July 31, 2017:

 

 

 

July 31, 2017

 

Enterprise Value

 

$

1,050,000

 

  Add: Cash and cash equivalents

 

 

560,866

 

  Less: Amounts payable to General Unsecured Creditors

 

 

(102,193

)

  Add: Other working capital liabilities

 

 

439,377

 

Reorganization value of Successor assets

 

$

1,948,050

 
Summary of Consolidated Balance Sheet

The following presents the effects on our consolidated balance sheet due to the reorganization and fresh-start accounting adjustments. The explanatory notes following the table below provide further details on the adjustments, including our assumptions and methods used to determine fair value for our assets and liabilities.

 

(In thousands)

As of July 31, 2017

 

 

Predecessor Company

 

 

 

Reorganization Adjustments

 

 

 

 

 

Fresh-Start Adjustments

 

 

 

 

 

Successor Company

 

ASSETS

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Current Assets

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Cash and cash equivalents

$

 

683,673

 

 

 

 

 

(122,807

)

 

(1

)

 

 

 

-

 

 

 

 

 

 

 

560,866

 

Trade and other receivables, net

 

 

116,976

 

 

 

 

 

-

 

 

 

 

 

 

 

(480

)

 

(10

)

 

 

 

116,496

 

Due from affiliate

 

 

252,393

 

 

 

 

 

-

 

 

 

 

 

 

 

-

 

 

 

 

 

 

 

252,393

 

Marine operating supplies

 

 

30,495

 

 

 

 

 

-

 

 

 

 

 

 

 

1,594

 

 

(11

)

 

 

 

32,089

 

Other current assets

 

 

33,243

 

 

 

 

 

(12,438

)

 

(2

)

 

 

 

(278

)

 

(12

)

 

 

 

20,527

 

       Total current assets

 

 

1,116,780

 

 

 

 

 

(135,245

)

 

 

 

 

 

 

836

 

 

 

 

 

 

 

982,371

 

Investments in, at equity, and advances to unconsolidated companies

 

 

49,367

 

 

 

 

 

-

 

 

 

 

 

 

 

(24,683

)

 

(13

)

 

 

 

24,684

 

Net properties and equipment

 

 

2,625,848

 

 

 

 

 

-

 

 

 

 

 

 

 

(1,731,257

)

 

(14

)

 

 

 

894,591

 

Other assets

 

 

92,674

 

 

 

 

 

-

 

 

 

 

 

 

 

(46,270

)

 

(15

)

 

 

 

46,404

 

               Total assets

$

 

3,884,669

 

 

 

 

 

(135,245

)

 

 

 

 

 

 

(1,801,374

)

 

 

 

 

 

 

1,948,050

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

LIABILITIES AND EQUITY

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Current liabilities

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Accounts payable

$

 

39,757

 

 

 

 

 

-

 

 

 

 

 

 

 

-

 

 

 

 

 

 

 

39,757

 

Accrued expenses

 

 

71,824

 

 

 

 

 

-

 

 

 

 

 

 

 

(160

)

 

(16

)

 

 

 

71,664

 

Due to affiliate

 

 

123,899

 

 

 

 

 

-

 

 

 

 

 

 

 

-

 

 

 

 

 

 

 

123,899

 

Accrued property and liability losses

 

 

2,761

 

 

 

 

 

-

 

 

 

 

 

 

 

-

 

 

 

 

 

 

 

2,761

 

Current portion of long-term debt

 

 

10,409

 

 

 

 

 

(5,204

)

 

(3

)

 

 

 

-

 

 

 

 

 

 

 

5,205

 

Other current liabilities

 

 

20,483

 

 

 

 

 

102,193

 

 

(4

)

 

 

 

(963

)

 

(17

)

 

 

 

121,713

 

         Total current liabilities

 

 

269,133

 

 

 

 

 

96,989

 

 

 

 

 

 

 

(1,123

)

 

 

 

 

 

 

364,999

 

Long-term debt

 

 

80,233

 

 

 

 

 

355,204

 

 

(5

)

 

 

 

10,946

 

 

(18

)

 

 

 

446,383

 

Deferred income taxes

 

 

-

 

 

 

 

 

-

 

 

 

 

 

 

 

-

 

 

 

 

 

 

 

-

 

Accrued property and liability losses

 

 

2,789

 

 

 

 

 

-

 

 

 

 

 

 

 

-

 

 

 

 

 

 

 

2,789

 

Other liabilities and deferred credits

 

 

80,902

 

 

 

 

 

-

 

 

 

 

 

 

 

(4,107

)

 

(17

)

 

 

 

76,795

 

Liabilities subject to compromise

 

 

2,326,122

 

 

 

 

 

(2,326,122

)

 

(6

)

 

 

 

-

 

 

 

 

 

 

 

-

 

         Total liabilities

 

 

2,759,179

 

 

 

 

 

(1,873,929

)

 

 

 

 

 

 

5,716

 

 

 

 

 

 

 

890,966

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Commitments and Contingencies

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Equity:

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

-

 

Common stock (Predecessor)

 

 

4,712

 

 

 

 

 

(4,712

)

 

(7

)

 

 

 

-

 

 

 

 

 

 

 

-

 

Additional paid-in capital (Predecessor)

 

 

166,867

 

 

 

 

 

(166,867

)

 

(7

)

 

 

 

-

 

 

 

 

 

 

 

-

 

Common stock (Successor)

 

 

-

 

 

 

 

 

18

 

 

(8

)

 

 

 

-

 

 

 

 

 

 

 

18

 

Additional paid-in capital (Successor)

 

 

-

 

 

 

 

 

1,055,391

 

 

(8

)

 

 

 

-

 

 

 

 

 

 

 

1,055,391

 

Retained earnings

 

 

951,749

 

 

 

 

 

854,854

 

 

(9

)

 

 

 

(1,806,603

)

 

(19

)

 

 

 

-

 

Accumulated other comprehensive loss

 

 

(12,779

)

 

 

 

 

-

 

 

 

 

 

 

 

12,779

 

 

(20

)

 

 

 

-

 

Total stockholders' equity

 

 

1,110,549

 

 

 

 

 

1,738,684

 

 

 

 

 

 

 

(1,793,824

)

 

 

 

 

 

 

1,055,409

 

Noncontrolling interests

 

 

14,941

 

 

 

 

 

-

 

 

 

 

 

 

 

(13,266

)

 

(21

)

 

 

 

1,675

 

Total equity

 

 

1,125,490

 

 

 

 

 

1,738,684

 

 

 

 

 

 

 

(1,807,090

)

 

 

 

 

 

 

1,057,084

 

Total liabilities and equity

$

 

3,884,669

 

 

 

 

 

(135,245

)

 

 

 

 

 

 

(1,801,374

)

 

 

 

 

 

 

1,948,050

 

 


Reorganization Adjustments

 

 

(1)

The table below reconciles cash payments and amounts payable as of July 31, 2017 to the terms of the Plan as previously described.

 

(In thousands)

 

 

 

 

Payment made to holders of General Unsecured Claims upon emergence

$

 

122,807

 

Amounts payable to holders of General Unsecured Claims at July 31, 2017

 

 

102,193

 

Total payments pursuant to the Plan

$

 

225,000

 

 

Based on the terms contemplated in the Plan, we would have had $458.7 million of cash upon emergence subsequent to the full payment of the $225 million.

 

 

(2)

Represents the recognition of expenses paid prior to the Effective Date of $12.4 million for Plan support and other reorganization-related professional fees.  

 

 

(3)

Reflects the reclassification from current to long-term of $5.2 million of Troms Offshore debt, consistent with the terms of the amended Troms Offshore credit agreement.

 

 

(4)

Reflects the establishment of a liability related to the unpaid pro rata cash distribution to the General Unsecured Claims.

 

 

(5)

Reflects the issuance of the $350 million Secured Notes to the General Unsecured Creditors as provided for in the Plan and the reclassification from current to long-term of $5.2 million of Troms Offshore debt (see (3) above).

 

 

(6)

Gain on settlement of liabilities subject to compromise is as follows:

 

(In thousands)

 

 

 

 

Revolving Credit Facility

$

 

(600,000

)

Term Loan Facility

 

 

(300,000

)

September 2013 senior unsecured notes

 

 

(500,000

)

August 2011 senior unsecured notes

 

 

(165,000

)

September 2010 senior unsecured notes

 

 

(382,500

)

Accrued interest payable

 

 

(23,736

)

Make-whole provision - Senior notes

 

 

(94,726

)

Lessor claims - sale leaseback agreements

 

 

(260,160

)

Total liabilities subject to compromise

$

 

(2,326,122

)

Fair value of equity and warrants issued to General Unsecured Creditors

 

 

983,482

 

Issuance of 8% Secured Notes

 

 

350,000

 

Cash payment to General Unsecured Creditors

 

 

122,807

 

Amounts payable to General Unsecured Creditors

 

 

102,193

 

Gain on settlement of Liabilities subject to compromise

$

 

(767,640

)

 

 

(7)

Reflects the cancellation of Predecessor's equity to retained earnings.

 

 

(8)

Represents the issuance of Successor equity. The Successor issued approximately 18.5 million shares of New Common Stock including approximately 17.0 million shares of New Common Stock to General Unsecured Creditors and 1.5 million to holders of Predecessor stock. Approximately 7.7 million New Creditor Warrants were issued upon emergence to the General Unsecured Creditors and approximately 3.9 million New Creditor Warrants were reserved for with respect to the unresolved sale leaseback claims.  Additionally, 2.4 million Series A Warrants and 2.6 million Series B Warrants were issued to the holders of Predecessor stock with exercise prices of $57.06 and $62.28, respectively. Based on a Black-Scholes-Merton valuation and an estimated fair value of the underlying New Common Stock of $25 per share, the value of each New Creditor Warrant was estimated at $25, the value of each Series A Warrant was estimated at $2.27 and the value of each Series B Warrant was estimated at $1.88.  

 


The table below reflects the components of Additional paid-in capital (Successor) upon emergence:

 

(In thousands)

 

 

 

 

Additional paid-in capital attributable to common shares

 

$

756,346

 

Series A Warrants (2,432,432 Warrants at $1.88 per warrant)

 

 

5,510

 

Series B Warrants (2,629,657 Warrants at $2.27 per warrant)

 

 

4,945

 

Issued Creditor Warrants (7,684,453 Warrants at $25 per warrant)

 

 

192,108

 

Reserved Creditor Warrants (3,859,361 Warrants at $25 per warrant)

 

 

96,482

 

Fair Value of Successor additional paid-in capital

 

$

1,055,391

 

 

 

 

(9)

Reflects the cumulative effect of the reorganization adjustments discussed above.

 

Fresh-start Accounting Adjustments

 

 

(10)

Represents fair value adjustments on outstanding warranty claims.

 

 

(11)

Reflects the adjustment to record fuel inventory held as marine and operating supplies at fair value.    

 

 

(12)

Reflects adjustments to deferred tax items as a result of the change in vessel values from the application of fresh-start accounting.

 

 

(13)

Reflects the adjustment to decrease the carrying value of our equity method investments to their estimated fair values which were determined using a discounted cash flow analysis.                                                 

 

 

(14)

In estimating the fair value of the vessels and related equipment, we used a combination of discounted cash flow method (income approach), the guideline public company method (market approach) and vessel specific liquidation value analyses.  A discount rate of 12% was used for the discounted cash flow method. In estimating the fair value of the other property and equipment, we used a combination of asset, income, and market-based approaches.                              

 

 

(15)

Reflects fair value adjustments of (i) $41.7 million to reduce the carrying value of a vessel under construction that is currently the subject of an arbitration proceeding in the United States and (ii) $3.8 million to reduce the carrying value of a receivable related to a vessel under construction in Brazil, which is also the subject of pending arbitration (the carrying value of receivable after such fair value adjustment is approximately $1.8 million).  Also reflects adjustments to deferred tax items of $0.8 million as a result of the change in vessel values from the application of fresh-start accounting.

                    

 

(16)

Reflects the write-off of deferred rent liabilities and an increase in a market-value based fuel related liabilities in Brazil.

 

 

(17)

Reflects the write-off of $1.3 million of accrued losses in excess of investment related to an unconsolidated subsidiary, an unrecognized deferred gain on the sale of a vessel to an unconsolidated subsidiary of $3.8 million, $0.4 million of which was reflected as current and adjustments to deferred tax items as a result of the change in vessel values from the application of fresh-start accounting of which $0.9 million is current and $1.3 million is long-term. Offsetting these items is the recognition of an intangible liability of approximately $2.1 million, $0.4 million of which is recorded as current, to adjust our office lease contracts to fair value as of July 31, 2017.  The intangible liability will be amortized over the remaining life of the contracts through 2023.

 

 

(18)

Reflects a $15.4 million premium recorded in relation to the $350 million Secured Notes, an aggregate $5.4 million discount recorded in relation to the modified Troms Offshore borrowings, and the write-off of historical unamortized debt issuance costs related to the Troms Offshore borrowings of $0.9 million.      

 

 

(19)

Reflects the cumulative effects of the fresh-start accounting adjustments.

 

 

(20)

Represents the elimination of Predecessor accumulated other comprehensive loss.

 

 

(21)

Reflects a $13.3 million adjustment to decrease the carrying value of the noncontrolling interests to the estimated fair value.