# SEACOR Marine Holdings Inc. (SMHI) FY 2024 MD&A

Verbatim Item 7 Management's Discussion and Analysis from SEACOR Marine Holdings Inc.'s 10-K for fiscal year 2024.

SEC filing source: https://www.sec.gov/Archives/edgar/data/1690334/000095017025027933/smhi-20241231.htm
Accession: 0000950170-25-027933
Filing date: 2025-02-26
Report date: 2024-12-31
Extracted structurally from real Item 7 body heading to real Item 7A/8 boundary.
Confidence: high

Company profile: /company/SMHI/
All MD&A years: /company/SMHI/mda/
Previous year: /company/SMHI/mda/fy2023/ (FY 2023)
Next year: /company/SMHI/mda/fy2025/ (FY 2025)

ITEM 7. MANAGEMENT’S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS

Management’s Discussion and Analysis of Financial Condition and Results of Operations (“MD&A”) below presents the Company’s operating results for each of the three years in the period ended December 31, 2024, and its financial condition as of December 31, 2024 and 2023. Certain statements in this MD&A constitute forward-looking statements. See “Forward-Looking Statements” included elsewhere in this Annual Report on Form 10-K.

The following MD&A is intended to help the reader understand the results of operations and financial condition of the Company. The MD&A is provided as a supplement to, and should be read in conjunction with, the consolidated financial statements and related notes included in Part IV of this Annual Report on Form 10-K and incorporated herein by reference.

Overview

The Company provides global marine and support transportation services to offshore energy facilities worldwide. As of December 31, 2024, the Company operated a diverse fleet of 54 support vessels, of which 51 were owned and three were managed on behalf of unaffiliated third parties. The primary users of the Company’s services are major integrated national and international oil companies, independent oil and natural gas exploration and production companies, oil field service and construction companies, as well as offshore wind farm operators and offshore wind farm installation and maintenance companies.

The Company operates and manages a diverse fleet of offshore support vessels that (i) deliver cargo and personnel to offshore installations, including offshore wind farms, (ii) assist offshore operations for production and storage facilities, (iii) provide construction, well work-over, offshore wind farm installation and decommissioning support and (iv) carry and launch equipment used underwater in drilling and well installation, maintenance, inspection and repair. Additionally, the Company’s vessels provide emergency response services and accommodations for technicians and specialists.

Recent Developments

Vessel Sales

On December 10, 2024, the Company completed the sale of two AHTS for total proceeds of $22.5 million and a gain of $15.6 million. This sale marked the Company’s exit from the AHTS asset class and the proceeds will be used to partially fund the contract price for the newbuild PSVs described below. The Company manages the two sold AHTS on behalf of the new owners.

Debt Refinancing, Maturity Extension and Newbuild Orders

On November 27, 2024, SEACOR Marine, as parent guarantor, SEACOR Marine Foreign Holdings Inc. (“SMFH”), as borrower, and certain other wholly-owned subsidiaries of SEACOR Marine, as subsidiary guarantors, entered into a credit agreement providing for a senior secured term loan of up to $391.0 million (the “2024 SMFH Credit Facility” and such agreement, the “2024 SMFH Credit Agreement”) with an affiliate of EnTrust Global, as lender, Kroll Agency Services Limited, as facility agent, and Kroll Trustee Services Limited, as security trustee.

The 2024 SMFH Credit Facility is divided into two tranches, Tranche A consists of up to $350.0 million and Tranche B consists of up to $41.0 million. Tranche A has been fully drawn with the proceeds used to, among other things, refinance $328.7 million of principal indebtedness under multiple debt facilities, including $203.7 million of secured indebtedness and $125.0 million of unsecured indebtedness due in 2026, inclusive of $35.0 million of convertible debt. The proceeds from Tranche B of the 2024 SMFH Credit Facility are available to be used to finance up to 50% of the payments to Fujian Mawei Shipbuilding Ltd. with respect to the shipbuilding contracts for the construction of two PSVs with a contract price of $41.0 million per vessel. The PSVs are each 4,650 tons deadweight with a 1,000 square meter deck area and equipped with medium speed diesel engines and an integrated battery energy storage system for higher fuel efficiency and lower running costs. The PSVs are expected to be delivered in the fourth quarter of 2026 and the first quarter of 2027, respectively. The 2024 SMFH Credit Facility matures in December 2029.

At-the-Market Program

On February 7, 2025, SEACOR Marine entered into an at-the-market sales agreement (the “Sales Agreement”) with B. Riley Securities, Inc. (the “Sales Agent”), relating to the issuance and sale from time to time by SEACOR Marine, as principal or through the Sales Agent, of shares of Common Stock having an aggregate gross sales price of up to $25.0 million (the “ATM Shares”). The sale of the ATM Shares if any, under the Sales Agreement may be made in ordinary brokers’ transactions, to or through a market maker, on or through the NYSE, the existing trading market for the Common Stock, or any other market venue where the Common Stock may be traded, in the over-the-counter market, in privately negotiated transactions, or through a combination of any such methods of sale. The Sales Agent may also sell the ATM Shares by any other method permitted by law. Upon the execution and effectiveness of the Sales Agreement, the Prior ATM Program was terminated.

43

Trends Affecting the Offshore Marine Business

Oil and Natural Gas Prices

The market for offshore oil and natural gas drilling has historically been cyclical. Demand for offshore support vessels is highly correlated to the price of oil and natural gas as those prices significantly impact the Company’s customers’ exploration and drilling activity levels. Oil and natural gas prices tend to fluctuate based on many factors, including global economic activity, levels of reserves and production activity. Price levels for oil and natural gas have and will continue to influence demand for offshore marine services. In addition to the price of oil and natural gas, the availability of acreage, local tax incentives or disincentives in significant oil and natural gas producing regions, drilling moratoriums and other regulatory actions, and requirements for maintaining interests in leases affect activity in the offshore oil and natural gas industry. Factors that influence the level of offshore exploration and drilling activities include:

•
expectations as to future oil and natural gas commodity prices;

•
customer assessments of offshore drilling prospects compared with land-based opportunities, including newer or unconventional opportunities such as shale;

•
expectations as to the future demand for oil and natural gas in the context of the transition to non-hydrocarbon based sources of energy;

•
customer assessments of cost, geological opportunity and political stability in host countries;

•
worldwide demand for oil and natural gas;

•
the ability or willingness of OPEC to set and maintain production levels and pricing;

•
military conflicts and terrorism in oil producing regions, including the Middle East and Russia;

•
the level of oil and natural gas production by non-OPEC countries;

•
transitions to and demand for non-hydrocarbon based energy sources;

•
the relative exchange rates for the U.S. dollar; and

•
various U.S. and international government policies regarding exploration and development of oil and natural gas reserves, which have been becoming increasingly unpredictable in recent years.

Offshore oil and natural gas market conditions are highly volatile. Oil prices experienced unprecedented volatility during 2020 due to the COVID-19 pandemic and the related effects on the global economy, with the price per barrel going negative for a short period of time. Oil prices steadily increased since the lows hit at the beginning of the COVID-19 pandemic and hit a multi-year high of $122 per barrel during 2022 primarily as a result of the conflict between Russia and Ukraine as well as the related economic sanctions and economic uncertainty but subsequently decreased to pre-conflict levels. During 2024, WTI oil prices reached a high of $87 per barrel and a low of $66 per barrel, ending the year at $72 per barrel.

While the Company has experienced difficult market conditions over the past few years due to low and volatile oil and natural gas prices and the focus of oil and natural gas producing companies on cost and capital spending budget reductions, the increases since the lows experienced during the COVID-19 pandemic in oil and natural gas prices has led to an increase in utilization, day rates and customer inquiries about potential new charters.

Vessel Supply Dynamics and Other Industry Drivers

The Company closely monitors the availability of vessels in the offshore support vessel market as the utilization and day rates of the Company’s fleet is dependent on the supply and demand dynamics for its vessels. For example, low oil and natural gas prices and a corresponding decline in offshore exploration may reduce demand for the Company’s vessels and in the past such declines have forced many operators in the industry to restructure, liquidate assets or consolidate with other operators. Additionally, the delivery of newly built offshore support vessels to the industry-wide fleet has in the past contributed to an oversupply of vessels in the market, thereby further decreasing the demand for the Company’s existing offshore support vessel fleet. A combination of low customer exploration and drilling activity levels, and excess supply of offshore support vessels whether from laid up fleets or newly built vessels could, in isolation or together, have a material adverse effect on the Company’s business, financial position, results of operations, cash flows and growth prospects. Alternatively, increasing activity levels and a stable supply of offshore support vessels could support higher utilization and day rates and improved financial performance of the Company’s business.

44

Certain macro drivers somewhat independent of oil and natural gas prices may support the Company’s business, including: (i) underspending by oil and natural gas producers over the last five to ten years leading to pent up demand for maintenance and growth capital expenditures; (ii) improved extraction technologies; and (iii) the need for offshore wind farm support as the industry grows. While the Company expects that alternative forms of energy will continue to develop and add to the world’s energy mix, especially as certain governments, supranational groups, institutional investors, and various other parties focus on climate change causes and concerns, the Company believes that for the foreseeable future demand for gasoline and oil will be sustained, as will demand for electricity from natural gas. Some alternative forms of energy such as offshore wind farms support some of the Company’s operations and the Company expects such support to increase as development of these forms of renewable energy expands.

The Company adheres to a strategy of cold-stacking vessels (removing from active service) during periods of weak utilization in order to reduce the daily running costs of operating the fleet, primarily personnel, repairs and maintenance costs, as well as to defer some drydocking costs into future periods. The Company considers various factors in determining which vessels to cold-stack, including upcoming dates for regulatory vessel inspections and related docking requirements. The Company may maintain class certification on certain cold-stacked vessels, thereby incurring some drydocking costs while cold-stacked. Cold-stacked vessels are returned to active service when market conditions improve, or management anticipates improvement, typically leading to increased costs for drydocking, personnel, repair and maintenance in the periods immediately preceding the vessels’ return to active service. Depending on market conditions, vessels with similar characteristics and capabilities may be rotated between active service and cold-stack. On an ongoing basis, the Company reviews its cold-stacked vessels to determine if any should be designated as retired and removed from service based on the vessel’s physical condition, the expected costs to reactivate and restore class certification, if any, and its viability to operate within current and projected market conditions. As of December 31, 2024, two of the Company’s 51 owned vessels were cold-stacked worldwide. In addition, the Company had two vessels classified as held for sale as of December 31, 2024.

Inflation

The Company’s operations expose it to the effects of inflation. Inflation has become a significant factor in the world economy post-pandemic and has led to an increased interest rate environment as well as inflationary pressures on the Company’s operations, including but not limited to increased labor, repairs and maintenance, transportation and insurance costs. The Company’s borrowings are all at fixed rates and therefore rate fluctuations no longer affect the interest costs reflected in the Company’s financial results.

Certain Components of Revenues and Expenses

The Company operates its fleet in four principal geographic regions: the U.S., primarily in the Gulf of America; Africa and Europe; the Middle East and Asia; and Latin America, primarily in Mexico and Guyana. The Company’s vessels are highly mobile and regularly and routinely move between countries within a geographic region. In addition, the Company’s vessels are redeployed among geographic regions, subject to flag restrictions, as changes in market conditions dictate. The number and type of vessels operated, their rates per day worked and their utilization levels are the key determinants of the Company’s operating results and cash flows. Unless a vessel is cold-stacked, there is little reduction in daily running costs for the vessels and, consequently, operating margins are most sensitive to changes in rates per day worked and utilization. The Company manages its fleet utilizing a global network of shore side support, administrative and finance personnel.

Time charter statistics are the key performance indicators for the Company’s time charter revenues. The rate per day worked is the ratio of total time charter revenues to the aggregate number of days worked. Utilization is the ratio of aggregate number of days worked to total available days for all vessels available for time charter. Unless vessels have been retired and removed from service, available days represents the total calendar days for which vessels available for time charter were owned or leased-in by the Company, whether marketed, under repair, cold-stacked or otherwise out-of-service.

Operating Revenues. The Company generates revenues by providing services to customers primarily pursuant to two different types of contractual arrangements: time charters and bareboat charters. Under a time charter, the Company provides a vessel to a customer and is responsible for all operating expenses, typically excluding fuel. Under a bareboat charter, the Company provides a vessel to a customer and the customer assumes responsibility for all operating expenses and all risks of operation. Vessel charters may range from several days to several years.

Direct Operating Expenses. The aggregate cost of operating the Company’s fleet depends primarily on the size and asset mix of the fleet. The Company’s direct operating costs and expenses, other than leased-in equipment expense, are grouped into the following categories:

•
personnel (primarily wages, benefits, payroll taxes, savings plans and travel for marine personnel);

•
repairs and maintenance (primarily routine repairs and maintenance and main engine overhauls that are performed in accordance with planned maintenance programs);

•
drydocking (primarily the cost of regulatory drydockings performed in accordance with applicable regulations);

45

•
insurance and loss reserves (primarily the cost of Hull and Machinery and Protection and Indemnity insurance premiums and loss deductibles);

•
fuel, lubes and supplies; and

•
other (brokers’ commissions, communication costs, expenses incurred in mobilizing vessels between geographic regions, third party ship management fees, freight expenses, customs and importation duties and other).

The Company expenses drydocking, engine overhaul and vessel mobilization costs as incurred. If a disproportionate number of drydockings, overhauls or mobilizations are undertaken in a particular fiscal year or quarter, operating expenses may vary significantly when compared with the prior year or prior quarter.

Direct Vessel Profit. Direct vessel profit (defined as operating revenues less operating expenses excluding leased-in equipment, “DVP”) is the Company’s measure of segment profitability. DVP is a critical financial measure used by the Company to analyze and compare the operating performance of its segments, without regard to financing decisions (depreciation and interest expense for owned vessels vs. lease expense for leased-in vessels). See “Note 16. Major Customers and Segment Information” in the audited consolidated financial statements included elsewhere in this Annual Report on Form 10-K.

Leased-in Equipment. In addition to the Company’s owned fleet, it operated one leased-in vessel from a lessor under a bareboat charter arrangement that expired during 2024. This vessel was previously owned and subject to a sale and leaseback transaction with the lessor.

Impairments. When reviewing its fleet for impairment, the Company groups vessels with similar operating and marketing characteristics, including cold-stacked vessels expected to return to active service, into vessel classes. All other vessels, including vessels retired and removed from service, are evaluated for impairment on a vessel by vessel basis.

During 2024, the Company recorded impairment charges of $3.7 million for other equipment. During 2023, the Company recorded impairment charges of $0.7 million for one leased-in AHTS. During 2022, the Company recorded impairment charges of $1.6 million for one FSV that was sold during the year and one leased-in AHTS. Estimated fair values for the Company’s owned vessels were established by independent appraisers and other market data such as recent sales of similar vessels. For information regarding the Company’s vessel fair value measurement determinations, see “Note 8. Fair Value Measurements” in the audited consolidated financial statements included elsewhere in this Annual Report on Form 10-K.

For vessel classes and individual vessels with indicators of impairment, but which were not impaired as of December 31, 2024, the Company has estimated that their future undiscounted cash flows exceed their current carrying values. The Company’s estimates of future undiscounted cash flows are highly subjective as utilization and rates per day worked are uncertain, including changes in the offshore oil and natural gas markets and the timing and cost of reactivating cold-stacked vessels. As markets change, the impact of vessel impairments will be evaluated.

46

Consolidated Results of Operations

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

[[GREPCENT_TABLE]]
[["","","2024","","","2023","","","2022"],["Time Charter Statistics:"],["Average Rates Per Day","","$","18,989","","","","","","$","16,375","","","","","","$","12,673"],["Fleet Utilization","","","67","%","","","","","","75","%","","","","","","75","%"],["Fleet Available Days","","","19,895","","","","","","","20,519","","","","","","","21,291"],["Operating revenues:"],["Time charter","","$","254,320","","","","94","%","","$","251,385","","","","89","%","","$","203,534","","","","93","%"],["Bareboat charter","","","1,464","","","","1","%","","","1,460","","","","1","%","","","1,374","","","","1","%"],["Other marine services","","","15,577","","","","5","%","","","26,666","","","","10","%","","","12,417","","","","6","%"],["","","","271,361","","","","100","%","","","279,511","","","","100","%","","","217,325","","","","100","%"],["Costs and Expenses:"],["Operating:"],["Personnel","","$","85,541","","","","32","%","","$","81,770","","","","29","%","","$","77,782","","","","36","%"],["Repairs and maintenance","","","40,385","","","","15","%","","","26,826","","","","10","%","","","31,496","","","","14","%"],["Drydocking","","","21,451","","","","8","%","","","6,598","","","","2","%","","","18,160","","","","8","%"],["Insurance and loss reserves","","","9,894","","","","4","%","","","9,956","","","","4","%","","","9,962","","","","5","%"],["Fuel, lubes and supplies","","","19,947","","","","7","%","","","17,187","","","","6","%","","","19,289","","","","9","%"],["Other","","","20,034","","","","7","%","","","17,313","","","","6","%","","","15,296","","","","7","%"],["","","","197,252","","","","73","%","","","159,650","","","","57","%","","","171,985","","","","79","%"],["Lease expense","","","1,678","","","","1","%","","","2,748","","","","1","%","","","3,869","","","","2","%"],["Administrative and general","","","44,713","","","","16","%","","","49,183","","","","18","%","","","40,911","","","","19","%"],["Depreciation and amortization","","","51,628","","","","19","%","","","53,821","","","","19","%","","","55,957","","","","26","%"],["","","","295,271","","","","109","%","","","265,402","","","","95","%","","","272,722","","","","125","%"],["Gains on Asset Dispositions and Impairments, Net","","","13,481","","","","5","%","","","21,409","","","","8","%","","","1,398","","","","1","%"],["Operating (Loss) Income","","","(10,429",")","","","(4",")%","","","35,518","","","","13","%","","","(53,999",")","","","(25",")%"],["Other Expense, Net","","","(72,618",")","","","(27",")%","","","(39,589",")","","","(14",")%","","","(16,079",")","","","(7",")%"],["Loss Before Income Tax (Benefit) Expense and Equity in Earnings of 50% or Less Owned Companies","","","(83,047",")","","","(31",")%","","","(4,071",")","","","(1",")%","","","(70,078",")","","","(32",")%"],["Income Tax (Benefit) Expense","","","(2,615",")","","","(1",")%","","","8,799","","","","3","%","","","8,582","","","","4","%"],["Loss Before Equity in Earnings of 50% or Less Owned Companies","","","(80,432",")","","","(30",")%","","","(12,870",")","","","(5",")%","","","(78,660",")","","","(36",")%"],["Equity in Earnings of 50% or Less Owned Companies","","","2,308","","","","1","%","","","3,556","","","","1","%","","","7,011","","","","3","%"],["Net Loss","","","(78,124",")","","","(29",")%","","","(9,314",")","","","(3",")%","","","(71,649",")","","","(33",")%"],["Net Income attributable to Noncontrolling Interests in Subsidiaries","","","\u2014","","","","\u2014","%","","","\u2014","","","","\u2014","%","","","1","","","","0","%"],["Net Loss attributable to SEACOR Marine Holdings Inc.","","$","(78,124",")","","","(29",")%","","$","(9,314",")","","","(3",")%","","$","(71,650",")","","","(33",")%"]]
[[/GREPCENT_TABLE]]

47

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

[[GREPCENT_TABLE]]
[["","","United States (primarily Gulf of America)","","","Africa and Europe","","","Middle East and Asia","","","Latin America","","","Total"],["For the year ended December 31, 2024"],["Time Charter Statistics:"],["Average Rates Per Day","","$","23,076","","","$","17,453","","","$","17,285","","","$","23,462","","","$","18,989"],["Fleet Utilization","","","38","%","","","75","%","","","78","%","","","66","%","","","67","%"],["Fleet Available Days","","","3,688","","","","7,590","","","","5,215","","","","3,402","","","","19,895"],["Operating Revenues:"],["Time charter","","$","31,991","","","$","99,410","","","$","70,346","","","$","52,573","","","$","254,320"],["Bareboat charter","","","\u2014","","","","\u2014","","","","\u2014","","","","1,464","","","","1,464"],["Other marine services","","","3,808","","","","5,272","","","","1,979","","","","4,518","","","","15,577"],["","","","35,799","","","","104,682","","","","72,325","","","","58,555","","","","271,361"],["Direct Costs and Expenses:"],["Operating:"],["Personnel","","$","24,459","","","$","21,887","","","$","24,132","","","$","15,063","","","$","85,541"],["Repairs and maintenance","","","6,618","","","","13,537","","","","13,047","","","","7,183","","","","40,385"],["Drydocking","","","8,604","","","","4,774","","","","2,796","","","","5,277","","","","21,451"],["Insurance and loss reserves","","","2,992","","","","2,329","","","","3,147","","","","1,426","","","","9,894"],["Fuel, lubes and supplies","","","3,351","","","","7,197","","","","4,184","","","","5,215","","","","19,947"],["Other","","","509","","","","12,723","","","","4,425","","","","2,377","","","","20,034"],["","","","46,533","","","","62,447","","","","51,731","","","","36,541","","","","197,252"],["Direct Vessel (Loss) Profit","","$","(10,734",")","","$","42,235","","","$","20,594","","","$","22,014","","","$","74,109"],["Other Costs and Expenses:"],["Lease expense","","$","555","","","$","507","","","$","301","","","$","315","","","","1,678"],["Administrative and general","","","","","","","","","","","","","","","44,713"],["Depreciation and amortization","","","12,334","","","","17,497","","","","13,276","","","","8,521","","","","51,628"],["","","","","","","","","","","","","","","","98,019"],["Gains on asset dispositions and impairments, net","","","","","","","","","","","","","","","13,481"],["Operating loss","","","","","","","","","","","","","","$","(10,429",")"],["As of December 31, 2024"],["Property and Equipment:"],["Historical cost","","$","195,756","","","$","325,000","","","$","240,075","","","$","139,583","","","$","900,414"],["Accumulated depreciation","","","(104,771",")","","","(121,320",")","","","(97,908",")","","","(43,449",")","","","(367,448",")"],["","","$","90,985","","","$","203,680","","","$","142,167","","","$","96,134","","","$","532,966"],["Total Assets (1)","","$","120,347","","","$","241,278","","","$","174,410","","","$","117,475","","","$","653,510"]]
[[/GREPCENT_TABLE]]

(1)
Total Assets exclude $73.6 million of corporate assets.

48

[[GREPCENT_TABLE]]
[["","","United States (primarily Gulf of America)","","","Africa and Europe","","","Middle East and Asia","","","Latin America","","","Total"],["For the year ended December 31, 2023"],["Time Charter Statistics:"],["Average Rates Per Day","","$","20,967","","","$","14,612","","","$","15,003","","","$","18,937","","","$","16,375"],["Fleet Utilization","","","45","%","","","87","%","","","76","%","","","88","%","","","75","%"],["Fleet Available Days","","","4,443","","","","6,935","","","","5,829","","","","3,312","","","","20,519"],["Operating Revenues:"],["Time charter","","$","41,850","","","$","87,729","","","$","66,407","","","$","55,399","","","$","251,385"],["Bareboat charter","","","\u2014","","","","\u2014","","","","\u2014","","","","1,460","","","","1,460"],["Other marine services","","","17,678","","","","2,582","","","","4,345","","","","2,061","","","","26,666"],["","","","59,528","","","","90,311","","","","70,752","","","","58,920","","","","279,511"],["Direct Costs and Expenses:"],["Operating:"],["Personnel","","$","26,110","","","$","20,434","","","$","20,786","","","$","14,440","","","$","81,770"],["Repairs and maintenance","","","5,146","","","","9,624","","","","7,109","","","","4,947","","","","26,826"],["Drydocking","","","2,314","","","","2,946","","","","(99",")","","","1,437","","","","6,598"],["Insurance and loss reserves","","","3,752","","","","1,727","","","","3,638","","","","839","","","","9,956"],["Fuel, lubes and supplies","","","3,697","","","","6,830","","","","3,552","","","","3,108","","","","17,187"],["Other","","","1,427","","","","10,072","","","","3,961","","","","1,853","","","","17,313"],["","","","42,446","","","","51,633","","","","38,947","","","","26,624","","","","159,650"],["Direct Vessel Profit","","$","17,082","","","$","38,678","","","$","31,805","","","$","32,296","","","$","119,861"],["Other Costs and Expenses:"],["Lease expense","","$","536","","","$","1,498","","","$","360","","","$","354","","","","2,748"],["Administrative and general","","","","","","","","","","","","","","","49,183"],["Depreciation and amortization","","","14,685","","","","15,346","","","","14,760","","","","9,030","","","","53,821"],["","","","","","","","","","","","","","","","105,752"],["Gains on asset dispositions and impairments, net","","","","","","","","","","","","","","","21,409"],["Operating income","","","","","","","","","","","","","","$","35,518"],["As of December 31, 2023"],["Property and Equipment:"],["Historical cost","","$","209,262","","","$","272,272","","","$","267,079","","","$","170,210","","","$","918,823"],["Accumulated depreciation","","","(99,137",")","","","(93,045",")","","","(94,708",")","","","(37,251",")","","","(324,141",")"],["","","$","110,125","","","$","179,227","","","$","172,371","","","$","132,959","","","$","594,682"],["Total Assets (1)","","$","142,264","","","$","215,158","","","$","199,174","","","$","152,427","","","$","709,023"]]
[[/GREPCENT_TABLE]]

(1)
Total Assets exclude $71.3 million of corporate assets.

49

[[GREPCENT_TABLE]]
[["","","United States (primarily Gulf of America)","","","Africa and Europe","","","Middle East and Asia (2)","","","Latin America","","","Total"],["For the year ended December 31, 2022"],["Time Charter Statistics:"],["Average Rates Per Day","","$","19,876","","","$","11,127","","","$","10,003","","","$","13,948","","","$","12,673"],["Fleet Utilization","","","49","%","","","85","%","","","80","%","","","91","%","","","75","%"],["Fleet Available Days","","","5,243","","","","6,351","","","","6,548","","","","3,149","","","","21,291"],["Operating Revenues:"],["Time charter","","$","51,272","","","$","60,060","","","$","52,080","","","$","40,122","","","$","203,534"],["Bareboat charter","","","\u2014","","","","\u2014","","","","\u2014","","","","1,374","","","","1,374"],["Other marine services","","","9,528","","","","(163",")","","","762","","","","2,290","","","","12,417"],["","","","60,800","","","","59,897","","","","52,842","","","","43,786","","","","217,325"],["Direct Costs and Expenses:"],["Operating:"],["Personnel","","$","25,201","","","$","16,436","","","$","22,376","","","$","13,769","","","$","77,782"],["Repairs and maintenance","","","7,049","","","","9,229","","","","8,111","","","","7,107","","","","31,496"],["Drydocking","","","8,978","","","","2,339","","","","6,569","","","","274","","","","18,160"],["Insurance and loss reserves","","","4,831","","","","1,178","","","","2,838","","","","1,115","","","","9,962"],["Fuel, lubes and supplies","","","3,345","","","","8,022","","","","5,089","","","","2,833","","","","19,289"],["Other","","","1,235","","","","7,175","","","","4,633","","","","2,253","","","","15,296"],["","","","50,639","","","","44,379","","","","49,616","","","","27,351","","","","171,985"],["Direct Vessel Profit","","$","10,161","","","$","15,518","","","$","3,226","","","$","16,435","","","$","45,340"],["Other Costs and Expenses:"],["Lease expense","","$","998","","","$","1,691","","","$","156","","","$","1,024","","","","3,869"],["Administrative and general","","","","","","","","","","","","","","","40,911"],["Depreciation and amortization","","","17,444","","","","13,708","","","","16,331","","","","8,474","","","","55,957"],["","","","","","","","","","","","","","","","100,737"],["Gains on asset dispositions and impairments, net","","","","","","","","","","","","","","","1,398"],["Operating loss","","","","","","","","","","","","","","$","(53,999",")"],["As of December 31, 2022"],["Property and Equipment:"],["Historical cost","","$","232,740","","","$","285,303","","","$","286,745","","","$","162,895","","","$","967,683"],["Accumulated depreciation","","","(101,503",")","","","(92,030",")","","","(89,444",")","","","(27,801",")","","","(310,778",")"],["","","$","131,237","","","$","193,273","","","$","197,301","","","$","135,094","","","$","656,905"],["Total Assets (1)","","$","174,081","","","$","211,371","","","$","215,497","","","$","150,650","","","$","751,599"]]
[[/GREPCENT_TABLE]]

(1)
Total Assets exclude $64.0 million of corporate assets.

(2)
In 2022, the Company removed from service one specialty vessel in this region. Regional statistics reflect the removed from service status of this vessel.

50

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

[[GREPCENT_TABLE]]
[["","","AHTS","","","FSV","","","PSV","","","Liftboats","","","Other Activity","","","Total"],["For the year ended December 31, 2024"],["Time Charter Statistics:"],["Average Rates Per Day","","$","9,156","","","$","12,901","","","$","19,888","","","$","42,665","","","$","\u2014","","","$","18,989"],["Fleet Utilization","","","60","%","","","76","%","","","62","%","","","58","%","","","\u2014","%","","","67","%"],["Fleet Available Days","","","1,240","","","","8,052","","","","7,675","","","","2,928","","","","\u2014","","","","19,895"],["Operating Revenues:"],["Time charter","","$","6,831","","","$","79,377","","","$","95,133","","","$","72,979","","","$","\u2014","","","$","254,320"],["Bareboat charter","","","\u2014","","","","\u2014","","","","1,464","","","","\u2014","","","","\u2014","","","","1,464"],["Other marine services","","","232","","","","2,070","","","","7,098","","","","4,757","","","","1,420","","","","15,577"],["","","","7,063","","","","81,447","","","","103,695","","","","77,736","","","","1,420","","","","271,361"],["Direct Costs and Expenses:"],["Operating:"],["Personnel","","$","3,685","","","$","22,193","","","$","36,188","","","$","24,586","","","$","(1,111",")","","$","85,541"],["Repairs and maintenance","","","1,052","","","","16,523","","","","15,443","","","","7,342","","","","25","","","","40,385"],["Drydocking","","","789","","","","3,200","","","","9,677","","","","7,785","","","","\u2014","","","","21,451"],["Insurance and loss reserves","","","255","","","","1,777","","","","2,686","","","","5,482","","","","(306",")","","","9,894"],["Fuel, lubes and supplies","","","800","","","","5,592","","","","9,437","","","","4,118","","","","\u2014","","","","19,947"],["Other","","","990","","","","8,193","","","","8,632","","","","2,195","","","","24","","","","20,034"],["","","","7,571","","","","57,478","","","","82,063","","","","51,508","","","","(1,368",")","","","197,252"],["Other Costs and Expenses:"],["Lease expense","","$","346","","","$","\u2014","","","$","\u2014","","","$","\u2014","","","$","1,332","","","","1,678"],["Administrative and general","","","","","","","","","","","","","","","","","","44,713"],["Depreciation and amortization","","","647","","","","18,980","","","","16,440","","","","15,463","","","","98","","","","51,628"],["","","","","","","","","","","","","","","","","","","98,019"],["Gains on asset dispositions and impairments, net","","","","","","","","","","","","","","","","","","13,481"],["Operating loss","","","","","","","","","","","","","","","","","$","(10,429",")"],["As of December 31, 2024"],["Property and Equipment:"],["Historical cost","","$","948","","","$","345,476","","","$","290,478","","","$","244,564","","","$","18,948","","","$","900,414"],["Accumulated depreciation","","","(825",")","","","(161,212",")","","","(66,540",")","","","(120,192",")","","","(18,679",")","","","(367,448",")"],["","","$","123","","","$","184,264","","","$","223,938","","","$","124,372","","","$","269","","","$","532,966"]]
[[/GREPCENT_TABLE]]

51

[[GREPCENT_TABLE]]
[["","","AHTS","","","FSV","","","PSV","","","Liftboats","","","Other Activity","","","Total"],["For the year ended December 31, 2023"],["Time Charter Statistics:"],["Average Rates Per Day","","$","9,201","","","$","11,273","","","$","18,031","","","$","37,523","","","$","\u2014","","","$","16,375"],["Fleet Utilization","","","70","%","","","84","%","","","77","%","","","50","%","","","\u2014","%","","","75","%"],["Fleet Available Days","","","1,491","","","","8,384","","","","7,392","","","","3,252","","","","\u2014","","","","20,519"],["Operating Revenues:"],["Time charter","","$","9,610","","","$","79,372","","","$","101,978","","","$","60,425","","","$","\u2014","","","$","251,385"],["Bareboat charter","","","\u2014","","","","\u2014","","","","1,460","","","","\u2014","","","","\u2014","","","","1,460"],["Other marine services","","","936","","","","1,076","","","","3,078","","","","17,801","","","","3,775","","","","26,666"],["","","","10,546","","","","80,448","","","","106,516","","","","78,226","","","","3,775","","","","279,511"],["Direct Costs and Expenses:"],["Operating:"],["Personnel","","$","4,027","","","$","20,408","","","$","35,397","","","$","20,432","","","$","1,506","","","$","81,770"],["Repairs and maintenance","","","1,498","","","","8,479","","","","12,497","","","","4,383","","","","(31",")","","","26,826"],["Drydocking","","","1,356","","","","4,050","","","","1,325","","","","(52",")","","","(81",")","","","6,598"],["Insurance and loss reserves","","","307","","","","1,363","","","","2,212","","","","6,027","","","","47","","","","9,956"],["Fuel, lubes and supplies","","","1,471","","","","5,432","","","","7,834","","","","2,442","","","","8","","","","17,187"],["Other","","","1,450","","","","6,523","","","","7,765","","","","1,542","","","","33","","","","17,313"],["","","","10,109","","","","46,255","","","","67,030","","","","34,774","","","","1,482","","","","159,650"],["Other Costs and Expenses:"],["Lease expense","","$","1,247","","","$","\u2014","","","$","\u2014","","","$","\u2014","","","$","1,501","","","","2,748"],["Administrative and general","","","","","","","","","","","","","","","","","","49,183"],["Depreciation and amortization","","","1,020","","","","19,779","","","","16,480","","","","16,395","","","","147","","","","53,821"],["","","","","","","","","","","","","","","","","","","105,752"],["Gains on asset dispositions and impairments, net","","","","","","","","","","","","","","","","","","21,409"],["Operating income","","","","","","","","","","","","","","","","","$","35,518"],["As of December 31, 2023"],["Property and Equipment:"],["Historical cost","","$","12,669","","","$","341,054","","","$","301,523","","","$","244,462","","","$","19,115","","","$","918,823"],["Accumulated depreciation","","","(5,134",")","","","(142,429",")","","","(53,162",")","","","(104,626",")","","","(18,790",")","","","(324,141",")"],["","","$","7,535","","","$","198,625","","","$","248,361","","","$","139,836","","","$","325","","","$","594,682"]]
[[/GREPCENT_TABLE]]

52

[[GREPCENT_TABLE]]
[["","","AHTS","","","FSV","","","PSV","","","Liftboats","","","Other Activity (1)","","","Total"],["For the year ended December 31, 2022"],["Time Charter Statistics:"],["Average Rates Per Day","","$","8,975","","","$","9,425","","","$","13,246","","","$","27,010","","","$","\u2014","","","$","12,673"],["Fleet Utilization","","","69","%","","","85","%","","","76","%","","","55","%","","","\u2014","%","","","75","%"],["Fleet Available Days","","","2,098","","","","8,518","","","","7,300","","","","3,285","","","","90","","","","21,291"],["Operating Revenues:"],["Time charter","","$","13,041","","","$","68,324","","","$","73,687","","","$","48,482","","","$","\u2014","","","$","203,534"],["Bareboat charter","","","\u2014","","","","\u2014","","","","1,374","","","","\u2014","","","","\u2014","","","","1,374"],["Other marine services","","","(654",")","","","(667",")","","","1,561","","","","8,009","","","","4,168","","","","12,417"],["","","","12,387","","","","67,657","","","","76,622","","","","56,491","","","","4,168","","","","217,325"],["Direct Costs and Expenses:"],["Operating:"],["Personnel","","$","4,428","","","$","20,379","","","$","33,470","","","$","19,489","","","$","16","","","$","77,782"],["Repairs and maintenance","","","1,494","","","","9,953","","","","12,722","","","","7,378","","","","(51",")","","","31,496"],["Drydocking","","","(3",")","","","3,166","","","","3,065","","","","11,932","","","","\u2014","","","","18,160"],["Insurance and loss reserves","","","253","","","","1,495","","","","2,265","","","","6,586","","","","(637",")","","","9,962"],["Fuel, lubes and supplies","","","1,017","","","","6,100","","","","8,015","","","","4,139","","","","18","","","","19,289"],["Other","","","1,385","","","","6,174","","","","5,674","","","","2,045","","","","18","","","","15,296"],["","","","8,574","","","","47,267","","","","65,211","","","","51,569","","","","(636",")","","","171,985"],["Other Costs and Expenses:"],["Lease expense","","$","1,649","","","$","\u2014","","","$","777","","","$","\u2014","","","$","1,443","","","","3,869"],["Administrative and general","","","","","","","","","","","","","","","","","","40,911"],["Depreciation and amortization","","","1,783","","","","19,899","","","","15,480","","","","18,473","","","","322","","","","55,957"],["","","","","","","","","","","","","","","","","","","100,737"],["Gains on asset dispositions and impairments, net","","","","","","","","","","","","","","","","","","1,398"],["Operating loss","","","","","","","","","","","","","","","","","$","(53,999",")"],["As of December 31, 2022"],["Property and Equipment:"],["Historical cost","","$","27,838","","","$","355,116","","","$","297,331","","","$","265,387","","","$","22,011","","","$","967,683"],["Accumulated depreciation","","","(18,695",")","","","(130,869",")","","","(36,203",")","","","(103,402",")","","","(21,609",")","","","(310,778",")"],["","","$","9,143","","","$","224,247","","","$","261,128","","","$","161,985","","","$","402","","","$","656,905"]]
[[/GREPCENT_TABLE]]

(1)
In 2022, the Company removed from service one specialty vessel in this class. Other activity statistics reflect the removed from service status of this vessel.

53

Operating Income (Loss)

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

[[GREPCENT_TABLE]]
[["","","2024","","","2023","","","2022"],["Time Charter Statistics:"],["Rates Per Day Worked:"],["AHTS","","$","\u2014","","","","","","$","\u2014","","","","","","$","\u2014"],["FSV","","","10,249","","","","","","","9,657","","","","","","","10,735"],["PSV","","","13,797","","","","","","","14,148","","","","","","","15,485"],["Liftboats","","","35,911","","","","","","","34,451","","","","","","","26,232"],["Overall","","","23,076","","","","","","","20,967","","","","","","","19,876"],["Utilization:"],["AHTS","","","\u2014","%","","","","","","\u2014","%","","","","","","\u2014","%"],["FSV","","","35","%","","","","","","57","%","","","","","","49","%"],["PSV","","","49","%","","","","","","62","%","","","","","","69","%"],["Liftboats","","","35","%","","","","","","34","%","","","","","","53","%"],["Overall","","","38","%","","","","","","45","%","","","","","","49","%"],["Available Days:"],["AHTS","","","\u2014","","","","","","","31","","","","","","","638"],["FSV","","","1,098","","","","","","","1,095","","","","","","","1,095"],["PSV","","","732","","","","","","","910","","","","","","","1,095"],["Liftboats","","","1,858","","","","","","","2,407","","","","","","","2,415"],["Overall","","","3,688","","","","","","","4,443","","","","","","","5,243"],["Operating revenues:"],["Time charter","","$","31,991","","","","89","%","","$","41,850","","","","70","%","","$","51,272","","","","84","%"],["Other marine services","","","3,808","","","","11","%","","","17,678","","","","30","%","","","9,528","","","","16","%"],["","","","35,799","","","","100","%","","","59,528","","","","100","%","","","60,800","","","","100","%"],["Direct operating expenses:"],["Personnel","","","24,459","","","","68","%","","","26,110","","","","44","%","","","25,201","","","","41","%"],["Repairs and maintenance","","","6,618","","","","18","%","","","5,146","","","","9","%","","","7,049","","","","12","%"],["Drydocking","","","8,604","","","","24","%","","","2,314","","","","4","%","","","8,978","","","","15","%"],["Insurance and loss reserves","","","2,992","","","","8","%","","","3,752","","","","6","%","","","4,831","","","","8","%"],["Fuel, lubes and supplies","","","3,351","","","","10","%","","","3,697","","","","6","%","","","3,345","","","","5","%"],["Other","","","509","","","","2","%","","","1,427","","","","2","%","","","1,235","","","","2","%"],["","","","46,533","","","","130","%","","","42,446","","","","71","%","","","50,639","","","","83","%"],["Direct Vessel (Loss) Profit","","$","(10,734",")","","","-30","%","","$","17,082","","","","29","%","","$","10,161","","","","17","%"]]
[[/GREPCENT_TABLE]]

2024 compared with 2023

Operating Revenues. Charter revenues were $9.9 million lower in 2024 compared with 2023. Charter revenues were $16.9 million lower due to the repositioning of vessels between geographic regions, as such repositioned vessels had 58 days worked at an average day rate of $60,628 in 2024 compared to 515 days worked at an average day rate of $39,741 in 2023, as well as $0.7 million lower due to the disposition of one vessel in the third quarter of 2023. Charter revenues were $7.7 million higher for the vessels included in the results of this region in both comparative periods (as applicable to each region, the “Regional Core Fleet”), which consists of nine vessels, due to higher utilization of 81% for one liftboat with a higher than average day rate of $49,914, partially offset by lower utilization of 35% for the remainder of the vessels. Other marine services were $13.9 million lower primarily due to non-recurring business interruption insurance revenue recorded in 2023 and lower mobilization revenues and management fees in 2024. As of December 31, 2024, the Company had two of 10 owned vessels (one liftboat and one FSV) cold-stacked in this region compared with two of 11 vessels as of December 31, 2023.

Direct Operating Expenses. Direct operating expenses were $4.1 million higher in 2024 compared with 2023. Direct operating expenses were $10.2 million higher for the Regional Core Fleet primarily due to the timing of drydocking and repair expenditures, $3.3 million lower due to the repositioning of vessels between geographic regions and $2.8 million lower due to net asset dispositions.

54

2023 compared with 2022

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

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

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

[[GREPCENT_TABLE]]
[["","","2024","","","2023","","","2022"],["Time Charter Statistics:"],["Rates Per Day Worked:"],["AHTS","","$","10,189","","","","","","$","10,101","","","","","","$","9,994"],["FSV","","","15,304","","","","","","","12,701","","","","","","","10,967"],["PSV","","","22,405","","","","","","","20,129","","","","","","","12,452"],["Overall","","","17,453","","","","","","","14,612","","","","","","","11,127"],["Utilization:"],["AHTS","","","48","%","","","","","","77","%","","","","","","100","%"],["FSV","","","83","%","","","","","","91","%","","","","","","88","%"],["PSV","","","73","%","","","","","","84","%","","","","","","71","%"],["Overall","","","75","%","","","","","","87","%","","","","","","85","%"],["Available Days:"],["AHTS","","","895","","","","","","","1,095","","","","","","","1,095"],["FSV","","","3,913","","","","","","","3,650","","","","","","","3,439"],["PSV","","","2,782","","","","","","","2,190","","","","","","","1,817"],["Overall","","","7,590","","","","","","","6,935","","","","","","","6,351"],["Operating revenues:"],["Time charter","","$","99,410","","","","95","%","","$","87,729","","","","97","%","","$","60,060","","","","100","%"],["Other marine services","","","5,272","","","","5","%","","","2,582","","","","3","%","","","(163",")","","","(0",")%"],["","","","104,682","","","","100","%","","","90,311","","","","100","%","","","59,897","","","","100","%"],["Direct operating expenses:"],["Personnel","","","21,887","","","","21","%","","","20,434","","","","23","%","","","16,436","","","","28","%"],["Repairs and maintenance","","","13,537","","","","13","%","","","9,624","","","","10","%","","","9,229","","","","15","%"],["Drydocking","","","4,774","","","","5","%","","","2,946","","","","3","%","","","2,339","","","","4","%"],["Insurance and loss reserves","","","2,329","","","","2","%","","","1,727","","","","2","%","","","1,178","","","","2","%"],["Fuel, lubes and supplies","","","7,197","","","","7","%","","","6,830","","","","8","%","","","8,022","","","","13","%"],["Other","","","12,723","","","","12","%","","","10,072","","","","11","%","","","7,175","","","","12","%"],["","","","62,447","","","","60","%","","","51,633","","","","57","%","","","44,379","","","","74","%"],["Direct Vessel Profit","","$","42,235","","","","40","%","","$","38,678","","","","43","%","","$","15,518","","","","26","%"]]
[[/GREPCENT_TABLE]]

55

2024 compared with 2023

Operating Revenues. Charter revenues were $11.7 million higher in 2024 compared with 2023. Charter revenues were $12.0 million higher due to the repositioning of three vessels into the region in 2024, $1.2 million higher for the Regional Core Fleet, which consists of 18 vessels, due to higher average day rates of $17,033 in 2024 compared to $14,733 in 2023, substantially offset by lower utilization of 79% in 2024 compared to 89% in 2023 and $1.5 million lower due to the disposition of one vessel in 2024. Other marine services were $2.7 million higher primarily due to higher mobilization revenues. As of December 31, 2024, the Company had no vessels cold-stacked in this region compared with one of 19 vessels that was classified as held for sale as of December 31, 2023.

Direct Operating Expenses. Direct operating expenses were $10.8 million higher in 2024 compared with 2023. Direct operating expenses were $11.3 million higher due to the repositioning of vessels between geographic regions, $0.4 million higher for the Regional Core Fleet primarily due to the timing of repair expenditures and $0.9 million lower due to net asset dispositions.

2023 compared with 2022

Operating Revenues. Charter revenues were $27.7 million higher in 2023 compared with 2022. Charter revenues were $16.4 million higher due to the repositioning of vessels between geographic regions and $12.1 million higher for the Regional Core Fleet as a result of increased day rates and utilization partially offset by a $0.8 million decrease due to net asset dispositions. Other marine services were $2.7 million higher primarily due to an immaterial change in the presentation of commission charges, which were reclassed from other marine services to other direct operating expenses. As of December 31, 2023, the Company had one of 19 owned and leased-in vessels (one AHTS) cold-stacked in this region that was classified as held for sale compared with none as of December 31, 2022.

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

56

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

[[GREPCENT_TABLE]]
[["","","2024","","","2023","","","2022"],["Time Charter Statistics:"],["Rates Per Day Worked:"],["AHTS","","$","7,734","","","","","","$","5,547","","","","","","$","5,915"],["FSV","","","8,506","","","","","","","9,095","","","","","","","7,954"],["PSV","","","15,907","","","","","","","11,826","","","","","","","9,119"],["Liftboats","","","45,801","","","","","","","42,578","","","","","","","29,385"],["Overall","","","17,285","","","","","","","15,003","","","","","","","10,003"],["Utilization:"],["AHTS","","","91","%","","","","","","57","%","","","","","","99","%"],["FSV","","","80","%","","","","","","84","%","","","","","","92","%"],["PSV","","","64","%","","","","","","59","%","","","","","","66","%"],["Liftboats","","","100","%","","","","","","98","%","","","","","","63","%"],["Overall","","","78","%","","","","","","76","%","","","","","","80","%"],["Available Days:"],["AHTS","","","345","","","","","","","365","","","","","","","365"],["FSV","","","2,309","","","","","","","2,909","","","","","","","3,254"],["PSV","","","1,829","","","","","","","1,825","","","","","","","2,109"],["Specialty","","","\u2014","","","","","","","\u2014","","","","","","","90"],["Liftboats","","","732","","","","","","","730","","","","","","","730"],["Overall","","","5,215","","","","","","","5,829","","","","","","","6,548"],["Operating revenues:"],["Time charter","","$","70,346","","","","97","%","","$","66,407","","","","94","%","","$","52,080","","","","99","%"],["Other marine services","","","1,979","","","","3","%","","","4,345","","","","6","%","","","762","","","","1","%"],["","","","72,325","","","","100","%","","","70,752","","","","100","%","","","52,842","","","","100","%"],["Direct operating expenses:"],["Personnel","","","24,132","","","","34","%","","","20,786","","","","29","%","","","22,376","","","","42","%"],["Repairs and maintenance","","","13,047","","","","18","%","","","7,109","","","","10","%","","","8,111","","","","15","%"],["Drydocking","","","2,796","","","","4","%","","","(99",")","","","(0",")%","","","6,569","","","","13","%"],["Insurance and loss reserves","","","3,147","","","","4","%","","","3,638","","","","5","%","","","2,838","","","","5","%"],["Fuel, lubes and supplies","","","4,184","","","","6","%","","","3,552","","","","5","%","","","5,089","","","","10","%"],["Other","","","4,425","","","","6","%","","","3,961","","","","6","%","","","4,633","","","","9","%"],["","","","51,731","","","","72","%","","","38,947","","","","55","%","","","49,616","","","","94","%"],["Direct Vessel Profit","","$","20,594","","","","28","%","","$","31,805","","","","45","%","","$","3,226","","","","6","%"]]
[[/GREPCENT_TABLE]]

2024 compared with 2023

Operating Revenues. Charter revenues were $3.9 million higher in 2024 compared with 2023. Charter revenues were $9.5 million higher for the Regional Core Fleet, which consists of 14 vessels, due to higher average day rates of $17,356 in 2024 compared to $15,871 in 2023, and an increase in fleet utilization from 74% in 2023 to 79% in 2024. Charter revenues were $3.5 million lower due to the disposition of one vessel in 2023 and $2.1 million lower due to the repositioning of one vessel out of the region. Other marine services were $2.4 million lower primarily due to non-recurring business interruption insurance revenue recorded in 2023. As of December 31, 2024 and December 31, 2023, the Company had no vessels cold-stacked in this region.

Direct Operating Expenses. Direct operating expenses were $12.8 million higher in 2024 compared with 2023. Direct operating expenses were $15.3 million higher for the Regional Core Fleet primarily due to the timing of drydocking and repair expenditures and insurance reimbursements related to expenses in prior periods, $1.6 million lower due to net asset dispositions and $0.9 million lower due to the repositioning of vessels between geographic regions.

57

2023 compared with 2022

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

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

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

[[GREPCENT_TABLE]]
[["","","2024","","","2023","","","2022"],["Time Charter Statistics:"],["Rates Per Day Worked:"],["FSV","","$","14,951","","","","","","$","13,636","","","","","","$","8,098"],["PSV","","","21,296","","","","","","","20,314","","","","","","","15,615"],["Liftboats","","","48,786","","","","","","","24,450","","","","","","","25,277"],["Overall","","","23,462","","","","","","","18,937","","","","","","","13,948"],["Utilization:"],["FSV","","","94","%","","","","","","90","%","","","","","","96","%"],["PSV","","","52","%","","","","","","89","%","","","","","","94","%"],["Liftboats","","","99","%","","","","","","75","%","","","","","","34","%"],["Overall","","","66","%","","","","","","88","%","","","","","","91","%"],["Available Days:"],["FSV","","","732","","","","","","","730","","","","","","","730"],["PSV","","","2,332","","","","","","","2,467","","","","","","","2,279"],["Liftboats","","","338","","","","","","","115","","","","","","","140"],["Overall","","","3,402","","","","","","","3,312","","","","","","","3,149"],["Operating revenues:"],["Time charter","","$","52,573","","","","90","%","","$","55,399","","","","94","%","","$","40,122","","","","92","%"],["Bareboat charter","","","1,464","","","","2","%","","","1,460","","","","2","%","","","1,374","","","","3","%"],["Other marine services","","","4,518","","","","8","%","","","2,061","","","","4","%","","","2,290","","","","5","%"],["","","","58,555","","","","100","%","","","58,920","","","","100","%","","","43,786","","","","100","%"],["Direct operating expenses:"],["Personnel","","","15,063","","","","26","%","","","14,440","","","","25","%","","","13,769","","","","31","%"],["Repairs and maintenance","","","7,183","","","","12","%","","","4,947","","","","8","%","","","7,107","","","","16","%"],["Drydocking","","","5,277","","","","9","%","","","1,437","","","","2","%","","","274","","","","1","%"],["Insurance and loss reserves","","","1,426","","","","2","%","","","839","","","","2","%","","","1,115","","","","3","%"],["Fuel, lubes and supplies","","","5,215","","","","9","%","","","3,108","","","","5","%","","","2,833","","","","6","%"],["Other","","","2,377","","","","4","%","","","1,853","","","","3","%","","","2,253","","","","5","%"],["","","","36,541","","","","62","%","","","26,624","","","","45","%","","","27,351","","","","62","%"],["Direct Vessel Profit","","$","22,014","","","","38","%","","$","32,296","","","","55","%","","$","16,435","","","","38","%"]]
[[/GREPCENT_TABLE]]

2024 compared with 2023

Operating Revenues. Charter revenues were $2.8 million lower in 2024 compared with 2023. Charter revenues were $3.5 million lower due to the repositioning of five vessels out of the region, partially offset by the repositioning of two vessels into the region and $0.7 million higher for the Regional Core Fleet, which consists of eight vessels, primarily due to higher average day rates of $21,468 in 2024 compared to $18,455 in 2023, substantially offset by lower utilization of 63% in 2024 compared to 85% in 2023. Other marine services were $2.5 million higher in 2024 compared with 2023 primarily due to higher catering revenues. As of December 31, 2024 and December 31, 2023, the Company had no vessels cold-stacked in this region.

58

Direct Operating Expenses. Direct operating expenses were $9.9 million higher in 2024 compared with 2023. Direct operating expenses $8.0 million higher for the Regional Core Fleet primarily due to the timing of certain drydocking and repair expenditures and $1.9 million higher due to the repositioning of vessels between geographic regions.

2023 compared with 2022

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

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

Other Operating Expenses

Lease Expense. Leased-in equipment expenses were $1.1 million lower compared with 2023 primarily due to having one leased-in vessels in 2024 compared to two in 2023. Leased-in equipment expenses were $1.1 million lower for 2023 compared with 2022 primarily due to the impairment of one leased-in vessel in 2022.

Administrative and general. Administrative and general expenses were $4.5 million lower in 2024 compared with 2023 primarily due to decreases in allowance for credit losses of $3.3 million and decreases in professional fees of $1.4 million partially offset by increases in wages and benefits expenses of $0.4 million. Administrative and general expenses were $8.3 million higher in 2023 compared with 2022 primarily due to increases in wages and benefits expenses of $3.6 million, increases in allowance for credit losses of $3.0 million and increases in professional fees of $1.3 million.

Depreciation and amortization. Depreciation and amortization expenses were $2.2 million lower in 2024 compared with 2023 and $2.1 million lower in 2023 compared with 2022 primarily due to net fleet changes.

Gains (Losses) on Asset Dispositions and Impairments, Net. During 2024, the Company sold one AHTS, previously classified as held for sale, two AHTS, not previously classified as held for sale, and other equipment for net cash proceeds of $24.9 million, after transaction costs, and a gain of $17.2 million. In addition, the Company recognized impairment charges of $3.7 million for other equipment designated for a construction project that was indefinitely deferred and will no longer be completed.

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

During 2022, gain on asset dispositions and impairments was $1.4 million, which included gains from the sale of one FSV, one liftboat previously removed from service, office space and other equipment for net cash proceeds of $6.7 million after transaction costs, and a gain of $3.1 million. In addition, the Company sold one AHTS in exchange for the remaining equity interests in SEACOR Marlin LLC (the owner of the PSV SEACOR Marlin) and recorded a gain on the sale of MexMar, OVH and other assets of $0.8 million (see “Note 3. Investments, at Equity and Advances to 50% or Less Owned Companies” in the audited consolidated financial statements included elsewhere in this Annual Report on Form 10-K). These gains were substantially offset by impairment charges of $2.9 million for one leased-in AHTS, as well as impairment charges for one FSV sold in 2022 and for other equipment classified as assets held for sale, which was subsequently sold in 2023.

59

Other Income (Expense), Net

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

[[GREPCENT_TABLE]]
[["","","2024","","","2023","","","2022"],["Other Income (Expense):"],["Interest income","","$","1,768","","","$","1,444","","","$","784"],["Interest expense","","","(40,627",")","","","(37,504",")","","","(29,706",")"],["(Losses) gains on debt extinguishment","","","(31,923",")","","","(2,004",")","","","10,429"],["Derivative (losses) gains, net","","","(908",")","","","608","","","","\u2014"],["Foreign currency (losses) gains, net","","","(1,049",")","","","(2,133",")","","","1,659"],["Other, net","","","121","","","","\u2014","","","","755"],["","","$","(72,618",")","","$","(39,589",")","","$","(16,079",")"]]
[[/GREPCENT_TABLE]]

Interest Income. Interest income in 2024 was nearly flat compared with 2023. Interest income increased in 2023 primarily due to interest received for the loan due from MexMar, which was fully repaid in 2023. Interest income decreased in 2022 primarily due to interest received from the U.S. Internal Revenue Service (“IRS”) due to delays in the payment of the CARES Act tax refunds in 2021.

Interest expense. Interest expense was higher in 2024 compared to 2023 primarily due to a higher interest rate on the 2023 SMFH Credit Facility (which bears interest at a fixed rate of 11.75%) compared to the debt retired by the facility, which was entered into on September 8, 2023. On November 27, 2024, the 2023 SMFH Credit Facility was refinanced with the 2024 SMFH Credit Facility (which bears interest at a fixed rate of 10.30%). Interest expense was higher in 2023 compared to 2022 primarily due to a higher interest rate on the 2018 SMFH Credit Facility (as defined below) (which bore interest at a variable rate), a higher interest rate due to the refinancing of the 2018 SMFH Credit Facility with the 2023 SMFH Credit Facility (which bears interest at a fixed rate of 11.75%), a higher interest rate due to the exchange of $175.0 million in aggregate principal amount of SEACOR Marine’s convertible senior notes due 2023 (the “Old Convertible Notes”) (which bore interest at a fixed rate of 4.25%) for $90.0 million in aggregate principal amount of SEACOR Marine’s 8.0% / 9.5% Senior PIK Toggle Notes due 2026 (the “Guaranteed Notes”) and $35.0 million aggregate principal amount of SEACOR Marine’s 4.25% Convertible Senior Notes due 2026 (the “New Convertible Notes”), and higher interest rates on other variable rate debt as a result of the interest rate environment.

(Losses) gains on debt extinguishment. Loss on debt extinguishment was $31.9 million in 2024 due to the payoff of multiple credit facilities with the proceeds from the 2024 SMFH Credit Facility. Loss on debt extinguishment was $2.0 million in 2023 due to the payoff of the $130.0 million loan facility with a syndicate of lenders administered by DNB Bank ASA, dated September 26, 2018 (as amended from time to time, the “2018 SMFH Credit Facility”) for the 2023 SMFH Credit Facility. Gain on debt extinguishment was $10.4 million in 2022 due to the exchange of the Old Convertible Notes for the Guaranteed Notes and the New Convertible Notes. For further information, see “Note 5. Long-Term Debt” in the audited consolidated financial statements included elsewhere in this Annual Report on Form 10-K.

Derivative (losses) gains, net. Derivative losses in 2024 compared with derivative gains in 2023 were due to the strengthening of the U.S. dollar in relation to the Norwegian Kroner for an open forward currency exchange contract, which is denominated in Norwegian Kroner. Net derivative gains increased in 2023 compared with 2022 due to the Company entering into an open forward currency exchange contract in the fourth quarter of 2023.

Foreign currency (losses) gains, net. Foreign currency losses in 2024 compared with 2023 decreased due to the strengthening of the U.S. dollar in relation to the pound sterling. Foreign currency losses in 2023 compared with foreign currency gains in 2022 were primarily due to the strengthening of the pound sterling in relation to the U.S. dollar.

Income Tax Expense

For the year ending December 31, 2024, the Company’s effective income tax rate of (3.1)% was primarily due to foreign taxes paid that are not creditable against U.S. income taxes and foreign losses for which there is no benefit in the U.S. for income tax purposes.

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

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

60

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

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

[[GREPCENT_TABLE]]
[["","","2024","","","2023","","","2022"],["SEACOR Marine Arabia","","$","3,010","","","$","3,401","","","$","1,671"],["MexMar (1)","","$","\u2014","","","$","\u2014","","","$","2,133"],["OVH (1)","","","\u2014","","","","\u2014","","","","2,571"],["Other","","","(702",")","","","155","","","","636"],["","","$","2,308","","","$","3,556","","","$","7,011"]]
[[/GREPCENT_TABLE]]

(1)
On September 29, 2022, the Company sold its ownership in this joint venture to the majority shareholder. See details below.

2024 compared with 2023

SEACOR Marine Arabia. The decrease in equity earnings in 2024 from SEACOR Marine Arabia was due to decreased utilization.

2023 compared with 2022

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

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

Liquidity and Capital Resources

General

The Company’s ongoing liquidity requirements arise primarily from working capital needs, capital commitments and its obligations to service outstanding debt and comply with covenants under its debt facilities. The Company may use its liquidity to fund capital expenditures, make acquisitions or to make other investments. Sources of liquidity are cash balances, cash flows from operations, and sales under the Company’s Prior ATM Program, which had approximately $24.9 million of authority remaining sales capacity as of December 31, 2024. From time to time, the Company may secure additional liquidity through asset sales or the issuance of debt, shares of Common Stock or common stock of its subsidiaries, preferred stock or a combination thereof.

As of December 31, 2024, the Company had unfunded capital commitments of $90.0 million consisting of $82.7 million in respect of the construction of two PSVs, $4.4 million in respect of four hybrid battery power systems and $2.9 million for miscellaneous vessel equipment. Of the unfunded capital commitments, $41.6 million is payable during 2025, $29.9 million is payable during 2026 and the remainder payable during 2027. In accordance with the terms of the 2024 SMFH Credit Facility, $18.0 million of the proceeds from the sale of two AHTS was designated to make payments on the construction of the two PSVs, of which $16.0 million remained in a restricted account as of December 31, 2024. Additionally, the 2024 SMFH Credit Facility includes a dedicated $41.0 million tranche that may be used to pay up to 50% of the purchase price of these vessels.

As of December 31, 2024, the Company had outstanding debt of $344.8 million, net of debt discount and issuance costs. The Company’s contractual long-term debt maturities as of December 31, 2024 are as follows (in thousands):

[[GREPCENT_TABLE]]
[["","","Actual"],["2025","","$","27,500"],["2026","","","30,000"],["2027","","","30,000"],["2028","","","30,000"],["2029","","","232,500"],["Years subsequent to 2029","","","\u2014"],["","","$","350,000"]]
[[/GREPCENT_TABLE]]

61

As of December 31, 2024 and December 31, 2023, the Company held balances of cash, cash equivalents and restricted cash totaling $76.1 million and $84.1 million, respectively.

For the years ended December 31, the following is a summary of the Company’s cash flows (in thousands):

[[GREPCENT_TABLE]]
[["","","2024","","","2023","","","2022"],["Cash flows provided by or (used in):"],["Operating Activities","","$","(10,262",")","","$","8,947","","","$","(14,616",")"],["Investing Activities","","","17,564","","","","49,126","","","","57,800"],["Financing Activities","","","(15,293",")","","","(16,990",")","","","(41,355",")"],["Effects of Exchange Rate Changes on Cash, Restricted Cash and Cash Equivalents","","","\u2014","","","","3","","","","(4",")"],["Net Change in Cash, Restricted Cash and Cash Equivalents","","$","(7,991",")","","$","41,086","","","$","1,825"]]
[[/GREPCENT_TABLE]]

Operating Activities

Cash flows used in operating activities was $10.3 million in 2024, a decrease of $19.2 million compared to cash flows provided by operating activities of $8.9 million in 2023, primarily due to a decrease in utilization offset by changes in working capital. For the years ended December 31, the components of cash flows provided by (used in) continuing operating activities were as follows (in thousands):

[[GREPCENT_TABLE]]
[["","","2024","","","2023","","","2022"],["DVP:"],["United States, primarily Gulf of America","","$","(10,734",")","","$","17,082","","","$","10,161"],["Africa and Europe","","","42,235","","","","38,678","","","","15,518"],["Middle East and Asia","","","20,594","","","","31,805","","","","3,226"],["Latin America","","","22,014","","","","32,296","","","","16,435"],["Operating, leased-in equipment","","","(1,841",")","","","(2,362",")","","","(2,384",")"],["Administrative and general (excluding provisions for bad debts and amortization of share awards)","","","(38,053",")","","","(39,664",")","","","(35,825",")"],["Other, net (excluding non-cash losses)","","","121","","","","\u2014","","","","755"],["Dividends received from 50% or less owned companies","","","2,916","","","","2,241","","","","3,057"],["","","","37,252","","","","80,076","","","","10,943"],["Changes in operating assets and liabilities before interest and income taxes","","","(13,214",")","","","(38,743",")","","","(1,235",")"],["Cash settlements on derivative transactions, net","","","164","","","","577","","","","(749",")"],["Interest paid, excluding capitalized interest (1)","","","(35,607",")","","","(31,446",")","","","(25,244",")"],["Interest received","","","1,768","","","","1,444","","","","784"],["Income taxes (paid) refunded, net","","","(625",")","","","(2,961",")","","","885"],["Total cash flows (used in) provided by operating activities","","$","(10,262",")","","$","8,947","","","$","(14,616",")"]]
[[/GREPCENT_TABLE]]

(1)
During 2024, 2023 and 2022, the Company had no capitalized interest.

For a detailed discussion of the Company’s financial results for the reported periods, see “Consolidated Results of Operations” included above. Changes in operating assets and liabilities before interest and income taxes are the result of the Company’s working capital requirements.

Investing Activities

During 2024, net cash provided by investing activities was $17.6 million primarily as a result of the following:

•
capital expenditures were $7.3 million; and

•
the Company sold one AHTS, previously classified as held for sale, two AHTS, not previously classified as held for sale, and other equipment for net cash proceeds of $24.9 million, after transaction costs, and a gain of $17.2 million.

During 2023, net cash provided by investing activities was $49.1 million primarily as a result of the following:

•
capital expenditures were $10.6 million;

62

•
the Company sold one liftboat, classified as held for sale, three liftboats and one specialty vessel, previously removed from service, one FSV and other equipment, previously classified as held for sale, as well as other equipment not previously classified as such, for net cash proceeds of $44.7 million, after transaction costs, and a gain of $21.1 million; and

•
the Company received $15.0 million of principal payments under that certain MexMar Third A&R Facility Agreement, dated September 29, 2022.

During 2022, net cash provided by investing activities was $57.8 million primarily as a result of the following:

•
capital expenditures were $0.5 million;

•
the Company sold one FSV, one liftboat previously removed from service, office space and other equipment for net cash proceeds of $6.7 million, after transaction costs, and a gain of $2.2 million;

•
the Company received $0.5 million from investments in, and advances to, its 50% or less owned companies for principal payments on note receivables;

•
the Company received $66.0 million of cash proceeds from the sale of investments in, and advances to, its 50% or less owned companies in the Framework Agreement Transactions; and

•
the Company deployed $28.8 million to acquire the loans under the MexMar Third A&R Facility Agreement and received $13.8 million of principal payments under such loan.

Financing Activities

During 2024, net cash used by financing activities was $15.3 million primarily as a result of the following:

•
The Company made scheduled payments on long-term debt and other obligations of $24.3 million;

•
the Company made payments for debt extinguishment of $328.7 million;

•
the Company made payments for debt extinguishment costs of $3.7 million;

•
the Company received proceeds from the issuance of long-term debt of $345.2 million;

•
the Company received $0.1 million proceeds from the exercise of stock options; and

•
the Company made payments on tax withholdings for restricted stock vesting and director share awards of $3.9 million.

During 2023, net cash used by financing activities was $17.0 million primarily as a result of the following:

•
The Company made scheduled payments on long-term debt and other obligations of $29.2 million;

•
the Company made payments for debt extinguishment of $131.6 million;

•
the Company made payments for debt extinguishment costs of $1.8 million;

•
the Company received proceeds from the issuance of long-term debt of $148.5 million;

•
the Company made payments on finance leases of $0.5 million;

•
the Company made payments on tax withholdings for restricted stock vesting and director share awards of $2.4 million; and

•
the Company received net proceeds of less than $0.1 million from the issuance and sale of Common Stock through the ATM Program.

During 2022, net cash used by financing activities was $41.4 million primarily as a result of the following:

•
The Company made scheduled payments on long-term debt and other obligations of $38.2 million;

•
the Company made payments for debt extinguishment costs of $2.3 million;

63

•
the Company received $0.2 million proceeds from the exercise of stock options;

•
the Company made payments on finance leases of $0.4 million; and

•
the Company made payments on tax withholdings for restricted stock vesting and director share awards of $0.7 million.

Short and Long-Term Liquidity Requirements and Outlook

The Company believes that a combination of cash balances on hand, cash generated from operating activities and access to the credit and capital markets, including the $25.0 million in remaining capacity under the ATM Program, will provide sufficient liquidity to meet its obligations, including to support its capital expenditures program, working capital needs, debt service requirements and covenant compliance over the short to long term. With respect to capital expenditures related to the construction of two PSVs, up to $41.0 million is available under Tranche B of the 2024 SMFH Credit Facility. The Company continually evaluates possible acquisitions and dispositions of certain businesses and assets. The Company’s sources of liquidity may be impacted by the general condition of the markets in which it operates and the broader economy as a whole, which may limit its access to or the availability of the credit and capital markets on acceptable terms. Management continuously monitors the Company’s liquidity and compliance with covenants in its credit facilities.

Future Cash Requirements

The Company’s primary future cash requirements will be to fund operations, debt service, capital expenditures, employee retirement benefit plans, and lease payment obligations. In addition, the Company may use cash in the future to make strategic acquisitions or investments. Specifically, the Company expects its primary cash requirements for fiscal year 2025 to be as follows:

•
Debt service — We expect to make principal and interest payments of approximately $64.6 million during fiscal year 2025 under our currently outstanding debt facilities based on interest rates at year end.

•
Capital expenditures — At this time, we expect capital expenditures of approximately $41.6 million for the construction of two PSVs, the installation of hybrid battery power systems and other capital expenditures.

•
Employee retirement benefit plans — We estimate we will make payments under our retirement benefit plans of approximately $1.1 million during fiscal year 2025.

•
Lease payments — We expect to make lease payments of approximately $0.8 million for our operating and finance leases during fiscal year 2025 under our effective leases as of December 31, 2024.

In addition to the matters identified above, in the ordinary course of business, the Company may be involved in litigation, claims, government inquiries, investigations and proceedings relating to commercial, employment, environmental and regulatory matters. An unfavorable resolution in this or other matters could have a material adverse effect on the Company's future cash requirements.

Debt Securities and Credit Agreements

For a discussion of the Company’s debt securities and credit agreements, see “Note 5. Long-Term Debt” in the audited consolidated financial statements included elsewhere in this Annual Report on Form 10-K.

Contingencies

MNOPF and MNRPF. Certain of the Company’s subsidiaries are participating employers in two industry-wide, multi-employer, defined benefit pension funds in the U.K.: the MNOPF and the MNRPF.

The Company’s participation in the MNOPF began with the acquisition of the Stirling group of companies (the “Stirling Group”) in 2001 and relates to certain officers employed between 1978 and 2002 by the Stirling Group and/or its predecessors. The Company’s participation in the MNRPF also began with the acquisition of the Stirling Group in 2001 and relates to ratings employed by the Stirling Group and/or its predecessors through today. Both of these plans are in deficit positions and, depending upon the results of future actuarial valuations, it is possible that the plans could experience funding deficits that will require the Company to recognize payroll related operating expenses in the periods invoices are received. As of December 31, 2024, all invoices received related to MNOPF and MNRPF have been settled in full.

On October 19, 2021, the Company was informed by the MNRPF that two issues had been identified during a review of the MNRPF by the applicable trustee that would potentially give rise to material additional liabilities for the MNRPF. On November 23, 2023, the trustee advised that following the tri-annual valuation, $1.5 million (£1.2 million) of the potential cumulative funding deficit

64

of the MNRPF was allocated to the Company as a participating employer, including the additional liabilities mentioned above. During 2023, the Company recognized payroll related operating expenses of $1.5 million (£1.2 million) for its allocated share of the potential cumulative funding deficit, which the Company anticipated being invoiced for during 2024 and 2025. On April 30, 2024, the Company was informed by the MNRPF that the Company’s allocated share of the potential cumulative funding deficit may be reduced due to changes in valuation assumptions, and on July 5, 2024, the Company was informed by the MNRPF that the Company’s final deficit share amount was $0.4 million (£0.3 million) and the Company recognized a reduction in the payroll related operating expenses of $1.2 million (£0.9 million) to reflect the decreased deficit share amount. All invoices were settled in full in October 2024.

On November 6, 2024, the Company was informed by the MNOPF that no further contributions from participating employers were required based on the results of the 2024 valuation.

Other. In the normal course of its business, the Company becomes involved in various other litigation matters including, among others, claims by third parties for alleged property damages and personal injuries. Management has used estimates in determining the Company’s potential exposure to these matters and has recorded reserves in its financial statements related thereto where appropriate. It is possible that a change in the Company’s estimates of that exposure could occur, but the Company does not expect such changes in estimated costs would have a material effect on the Company’s consolidated financial position, results of operations or cash flows.

Related Party Transactions

For a discussion of the Company’s transactions with related parties, see “Note 14. Related Party Transactions” in the audited consolidated financial statements included elsewhere in this Annual Report on Form 10-K.

Critical Accounting Policies and Estimates

The preparation of financial statements in conformity with accounting principles generally accepted in the U.S. requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities and disclosure of contingent assets and liabilities at the date of the financial statements and the reported amounts of revenues and expenses during the reporting period. Actual results could differ from estimates and those differences may be material. For a summary of the Company’s accounting policies, see “Note 1. Nature of Operations and Accounting Policies” in the audited consolidated financial statements included elsewhere in this Annual Report on Form 10-K, which should be read in conjunction with this MD&A. Management considers an accounting estimate to be critical if it is important to the Company’s financial condition or results of operations and requires the Company to make subjective or complex judgments or estimates about matters that are uncertain. The Company believes the following critical accounting policies are the ones that require significant judgments and estimates to prepare its consolidated financial statements. There are other items within our consolidated financial statements that require estimation and judgment, but they are not deemed critical as defined above.

Trade and Other Receivables and Allowance for Credit Losses. Customers are primarily major integrated national, international oil companies, large independent oil and natural gas exploration and production companies and established wind farm construction companies. Customers are granted credit on a short-term basis and the related credit risks are minimal. Other receivables consist primarily of operating expenses the Company incurs in relation to vessels it manages for other entities, as well as insurance and income tax receivables. The Company routinely reviews its receivables and makes provisions for expected credit losses utilizing the Current Expected Credit Losses model (“CECL”). The CECL model utilizes a lifetime expected credit loss measurement objective for the recognition of credit losses for loans and other receivables at the time the financial asset is originated or acquired. However, those provisions are estimates and actual results may materially differ from those estimates. After collection efforts have been exhausted, trade receivables that are deemed uncollectible are removed from both accounts receivable and the allowance for credit losses.

Property and Equipment. Equipment, stated at cost, is depreciated using the straight-line method over the estimated useful life of the asset to an estimated salvage value. With respect to each class of asset, the estimated useful life is based upon a newly built asset being placed into service and represents the time period beyond which it is typically not justifiable for the Company to continue to operate the asset in the same or similar manner. From time to time, the Company may acquire older vessels that have already exceeded the Company’s useful life policy, in which case the Company depreciates such assets based on its best estimate of the asset’s remaining useful life, typically the period until the next survey or certification date. As of December 31, 2024, the estimated useful life of the Company’s new offshore support vessels was 20 years.

Equipment maintenance and repair costs and the costs of routine overhauls, drydockings and inspections performed on vessels and equipment are charged to operating expense as incurred. Expenditures that extend the useful life or improve the marketing and commercial characteristics of equipment as well as major renewals and improvements to other properties are capitalized.

Certain interest costs incurred during the construction of equipment are capitalized as part of the assets’ carrying values and are amortized over such assets’ estimated useful lives.

65

Income Taxes. Deferred income tax assets and liabilities have been provided in recognition of the income tax effect attributable to the book and tax basis differences of assets and liabilities reported in the accompanying consolidated financial statements. Deferred tax assets or liabilities are provided using the enacted tax rates expected to apply to taxable income in the periods in which they are expected to be settled or realized. Interest and penalties relating to uncertain tax positions are recognized in interest expense and administrative and general, respectively, in the accompanying consolidated statements of income (loss). The Company records a valuation allowance to reduce its deferred tax assets if it is more likely than not that some portion or all of the deferred tax assets will not be realized.

The Global Intangible Low Taxed Income (“GILTI”) regime effectively imposes a minimum tax on worldwide foreign earnings and subjects U.S. shareholders of controlled foreign corporations (“CFCs”) to current taxation on certain income earned through a CFC. The Company has made the policy election to record any liability associated with GILTI in the period in which it is incurred.

In the normal course of business, the Company may be subject to challenges from tax authorities regarding the amount of taxes due for the Company. These challenges may alter the timing or amount of taxable income or deductions. As part of the calculation of income tax expense, the Company determines whether the benefits of its tax positions are at least more likely than not of being sustained based on the technical merits of the tax position. For tax positions that are more likely than not of being sustained, the Company accrues the largest amount of the tax benefit that is more likely than not of being sustained. Such accruals require management to make estimates and judgments with respect to the ultimate outcome of its tax benefits and actual results could vary materially from these estimates.

The Company is subject to federal and state income tax and foreign withholding tax audits from time to time that could result in proposed assessments. Management believes that the Company has appropriately accounted for income and withholding taxes for tax periods that are within the statutory period of limitations not previously audited and that are potentially open for examination by the taxing authorities. The Company cannot predict with certainty how any audits would be resolved and whether the Company will be required to make additional tax payments, which may include penalties and interest. Depending on the jurisdiction, the Company is subject to examination for up to the preceding eight years.

Impairment of Long-Lived Assets. The Company performs an impairment analysis of long-lived assets used in operations when indicators of impairment are present. These indicators may include a significant decrease in the market price of a long-lived asset or asset group, a significant adverse change in the extent or manner in which a long-lived asset or asset group is being used or in its physical condition, or a current period operating or cash flow loss combined with a history of operating or cash flow losses or a forecast that demonstrates continuing losses associated with the use of a long-lived asset or asset group. If the carrying values of the assets are not recoverable, as determined by their estimated future undiscounted cash flows, the estimated fair value of the assets or asset groups are compared to their current carrying values and impairment charges are recorded if the carrying value exceeds fair value.

Impairment of 50% or Less Owned Companies. Investments in 50% or less owned companies are reviewed periodically to assess whether there is an other-than-temporary decline in the carrying value of the investment. In its evaluation, the Company considers, among other items, recent and expected financial performance and returns, impairments recorded by the investee and the capital structure of the investee. When the Company determines the estimated fair value of an investment is below carrying value and the decline is other-than-temporary, the investment is written down to its estimated fair value. Actual results may vary from the Company’s estimates due to the uncertainty regarding projected financial performance, the severity and expected duration of declines in value, and the available liquidity in the capital markets to support the continuing operations of the investee, among other factors. Although the Company believes its assumptions and estimates are reasonable, the investee’s actual performance compared with the estimates could produce different results and lead to additional impairment charges in future periods.

66