|
|
|
x
|
QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934
|
o
|
TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934
|
|
|
Delaware
|
|
72-1375844
|
(State or other jurisdiction of
incorporation or organization)
|
|
(I.R.S. Employer
Identification Number)
|
|
Large accelerated filer
x
|
|
Non-accelerated filer
o
|
|
|
|
Accelerated filer
o
|
|
Smaller reporting company
o
|
|
|
|
|
|
|
|
|
March 31,
2014 |
|
December 31,
2013 |
||||
|
(Unaudited)
|
||||||
ASSETS
|
|
||||||
Current assets:
|
|
|
|
||||
Cash and cash equivalents
|
$
|
349,340
|
|
|
$
|
439,291
|
|
Accounts receivable, net of allowance for doubtful accounts of $3,343 and $3,411, respectively
|
87,752
|
|
|
93,512
|
|
||
Deferred tax assets, net
|
75,165
|
|
|
72,470
|
|
||
Prepaid and other current assets
|
20,395
|
|
|
13,779
|
|
||
Current assets from discontinued operations
|
602
|
|
|
1,578
|
|
||
Total current assets
|
533,254
|
|
|
620,630
|
|
||
Property, plant and equipment, net
|
2,235,850
|
|
|
2,125,374
|
|
||
Deferred charges, net
|
77,071
|
|
|
74,075
|
|
||
Other assets
|
15,473
|
|
|
13,442
|
|
||
Long-term assets from discontinued operations
|
137
|
|
|
759
|
|
||
Total assets
|
$
|
2,861,785
|
|
|
$
|
2,834,280
|
|
LIABILITIES AND STOCKHOLDERS’ EQUITY
|
|
|
|
||||
Current liabilities:
|
|
|
|
||||
Accounts payable
|
$
|
68,617
|
|
|
$
|
52,930
|
|
Accrued interest
|
13,640
|
|
|
14,890
|
|
||
Accrued payroll and benefits
|
10,232
|
|
|
13,451
|
|
||
Deferred revenue
|
707
|
|
|
8,786
|
|
||
Other accrued liabilities
|
13,117
|
|
|
11,497
|
|
||
Current liabilities from discontinued operations
|
9
|
|
|
117
|
|
||
Total current liabilities
|
106,322
|
|
|
101,671
|
|
||
Long-term debt, net of original issue discount of $58,618 and $60,908, respectively
|
1,066,382
|
|
|
1,064,092
|
|
||
Deferred tax liabilities, net
|
377,240
|
|
|
368,416
|
|
||
Other liabilities
|
5,093
|
|
|
4,367
|
|
||
Long-term liabilities of discontinued operations
|
247
|
|
|
306
|
|
||
Total liabilities
|
1,555,284
|
|
|
1,538,852
|
|
||
Stockholders’ equity:
|
|
|
|
||||
Preferred stock: $0.01 par value; 5,000 shares authorized; no shares issued and outstanding
|
—
|
|
|
—
|
|
||
Common stock: $0.01 par value; 100,000 shares authorized; 36,247 and 36,095 shares issued and outstanding, respectively
|
362
|
|
|
361
|
|
||
Additional paid-in-capital
|
723,589
|
|
|
724,379
|
|
||
Retained earnings
|
583,249
|
|
|
571,483
|
|
||
Accumulated other comprehensive loss
|
(699
|
)
|
|
(795
|
)
|
||
Total stockholders’ equity
|
1,306,501
|
|
|
1,295,428
|
|
||
Total liabilities and stockholders’ equity
|
$
|
2,861,785
|
|
|
$
|
2,834,280
|
|
The accompanying notes are an integral part of these consolidated statements.
|
|
Three Months Ended
March 31, |
||||||
|
2014
|
|
2013
|
||||
|
(Unaudited)
|
||||||
Revenues
|
$
|
136,585
|
|
|
$
|
132,526
|
|
Costs and expenses:
|
|
|
|
||||
Operating expenses
|
68,581
|
|
|
56,294
|
|
||
Depreciation
|
16,185
|
|
|
13,196
|
|
||
Amortization
|
13,175
|
|
|
6,223
|
|
||
General and administrative expenses
|
13,685
|
|
|
12,996
|
|
||
|
111,626
|
|
|
88,709
|
|
||
Gain on sale of assets
|
69
|
|
|
—
|
|
||
Operating income
|
25,028
|
|
|
43,817
|
|
||
Other income (expense):
|
|
|
|
||||
Loss on early extinguishment of debt
|
—
|
|
|
(24,319
|
)
|
||
Interest income
|
364
|
|
|
577
|
|
||
Interest expense
|
(7,232
|
)
|
|
(13,722
|
)
|
||
Other income (expense), net
|
(77
|
)
|
|
(109
|
)
|
||
|
(6,945
|
)
|
|
(37,573
|
)
|
||
Income before income taxes
|
18,083
|
|
|
6,244
|
|
||
Income tax expense
|
6,729
|
|
|
2,316
|
|
||
Income from continuing operations
|
11,354
|
|
|
3,928
|
|
||
Income from discontinued operations, net of tax
|
412
|
|
|
2,231
|
|
||
Net income
|
$
|
11,766
|
|
|
$
|
6,159
|
|
Earnings per share:
|
|
|
|
||||
Basic earnings per common share from continuing operations
|
$
|
0.32
|
|
|
$
|
0.11
|
|
Basic earnings per common share from discontinued operations
|
0.01
|
|
|
0.06
|
|
||
Basic earnings per common share
|
$
|
0.33
|
|
|
$
|
0.17
|
|
Diluted earnings per common share from continuing operations
|
$
|
0.31
|
|
|
$
|
0.11
|
|
Diluted earnings per common share from discontinued operations
|
0.01
|
|
|
0.06
|
|
||
Diluted earnings per common share
|
$
|
0.32
|
|
|
$
|
0.17
|
|
Weighted average basic shares outstanding
|
36,169
|
|
|
35,618
|
|
||
Weighted average diluted shares outstanding
|
36,717
|
|
|
36,346
|
|
The accompanying notes are an integral part of these consolidated statements.
|
|
Three Months Ended
March 31, |
||||||
|
2014
|
|
2013
|
||||
|
(Unaudited)
|
||||||
Net income
|
$
|
11,766
|
|
|
$
|
6,159
|
|
Other comprehensive income, net of tax:
|
|
|
|
||||
Foreign currency translation income (loss)
|
96
|
|
|
(112
|
)
|
||
Total comprehensive income
|
$
|
11,862
|
|
|
$
|
6,047
|
|
The accompanying notes are an integral part of these consolidated statements.
|
|
Three Months Ended
March 31, |
||||||
|
2014
|
|
2013
|
||||
|
(Unaudited)
|
||||||
CASH FLOWS FROM OPERATING ACTIVITIES:
|
|
|
|
||||
Income from continuing operations
|
$
|
11,354
|
|
|
$
|
3,928
|
|
Adjustments to reconcile income from continuing operations to net cash provided by operating activities:
|
|
|
|
||||
Depreciation
|
16,185
|
|
|
13,196
|
|
||
Amortization
|
13,175
|
|
|
6,223
|
|
||
Stock-based compensation expense
|
2,631
|
|
|
3,307
|
|
||
Loss on early extinguishment of debt
|
—
|
|
|
24,319
|
|
||
Provision for bad debts
|
(68
|
)
|
|
(141
|
)
|
||
Deferred tax expense
|
6,084
|
|
|
220
|
|
||
Amortization of deferred financing costs
|
1,956
|
|
|
4,981
|
|
||
Gain on sale of assets
|
(69
|
)
|
|
—
|
|
||
Changes in operating assets and liabilities:
|
|
|
|
||||
Accounts receivable
|
5,843
|
|
|
(15,148
|
)
|
||
Other receivables and current assets
|
(8,815
|
)
|
|
4,035
|
|
||
Deferred drydocking charges
|
(9,915
|
)
|
|
(5,681
|
)
|
||
Accounts payable
|
12,497
|
|
|
(3,421
|
)
|
||
Accrued liabilities and other liabilities
|
(12,904
|
)
|
|
(2,902
|
)
|
||
Accrued interest
|
(1,250
|
)
|
|
(1,211
|
)
|
||
Net cash provided by operating activities
|
36,704
|
|
|
31,705
|
|
||
CASH FLOWS FROM INVESTING ACTIVITIES:
|
|
|
|
||||
Costs incurred for OSV newbuild program
|
(114,067
|
)
|
|
(86,909
|
)
|
||
Net proceeds from sale of assets
|
76
|
|
|
—
|
|
||
Vessel capital expenditures
|
(14,656
|
)
|
|
(6,626
|
)
|
||
Non-vessel capital expenditures
|
(556
|
)
|
|
(479
|
)
|
||
Net cash used in investing activities
|
(129,203
|
)
|
|
(94,014
|
)
|
||
CASH FLOWS FROM FINANCING ACTIVITIES:
|
|
|
|
||||
Tax benefit from share-based payments
|
248
|
|
|
—
|
|
||
Repayment of senior notes
|
—
|
|
|
(234,620
|
)
|
||
Proceeds from the issuance of senior notes
|
—
|
|
|
450,000
|
|
||
Redemption premium on the retirement of debt
|
—
|
|
|
(16,705
|
)
|
||
Deferred financing costs
|
—
|
|
|
(7,256
|
)
|
||
Net cash proceeds from other shares issued
|
90
|
|
|
1,828
|
|
||
Net cash provided by financing activities
|
338
|
|
|
193,247
|
|
||
CASH FLOWS FROM DISCONTINUED OPERATIONS:
|
|
|
|
||||
Net cash provided by operating activities
|
826
|
|
|
6,834
|
|
||
Net cash provided by (used in) investing activities
|
1,288
|
|
|
(288
|
)
|
||
Net cash provided by discontinued operations
|
2,114
|
|
|
6,546
|
|
||
Effects of exchange rate changes on cash
|
96
|
|
|
112
|
|
||
Net increase (decrease) in cash and cash equivalents
|
(89,951
|
)
|
|
137,596
|
|
||
Cash and cash equivalents at beginning of period
|
439,291
|
|
|
576,678
|
|
||
Cash and cash equivalents at end of period
|
$
|
349,340
|
|
|
$
|
714,274
|
|
SUPPLEMENTAL DISCLOSURES OF CASH FLOW ACTIVITIES:
|
|
|
|
||||
Cash paid for interest
|
$
|
13,882
|
|
|
$
|
14,265
|
|
Cash paid for income taxes
|
$
|
937
|
|
|
$
|
553
|
|
The accompanying notes are an integral part of these consolidated statements.
|
|
Three Months Ended
March 31, |
||||||
|
2014
|
|
2013
|
||||
Income from continuing operations (1)
|
$
|
11,354
|
|
|
$
|
3,928
|
|
Income from discontinued operations, net of tax (2)
|
412
|
|
|
2,231
|
|
||
Net income
|
$
|
11,766
|
|
|
$
|
6,159
|
|
Weighted average number of shares of common stock outstanding
|
36,169
|
|
|
35,618
|
|
||
Add: Net effect of dilutive stock options and unvested restricted stock (3)(4)(5)
|
548
|
|
|
728
|
|
||
Weighted average number of dilutive shares of common stock outstanding
|
36,717
|
|
|
36,346
|
|
||
Earnings per common share:
|
|
|
|
||||
Basic earnings per common share from continuing operations
|
$
|
0.32
|
|
|
$
|
0.11
|
|
Basic earnings per common share from discontinued operations
|
0.01
|
|
|
0.06
|
|
||
Basic earnings per common share
|
$
|
0.33
|
|
|
$
|
0.17
|
|
Diluted earnings per common share from continuing operations
|
$
|
0.31
|
|
|
$
|
0.11
|
|
Diluted earnings per common share from discontinued operations
|
0.01
|
|
|
0.06
|
|
||
Diluted earnings per common share
|
$
|
0.32
|
|
|
$
|
0.17
|
|
|
(1)
|
Income from continuing operations for the
three months ended March 31, 2013
includes a loss on early extinguishment of debt of
$24.3 million
. See Note 3 for further information regarding the Company’s debt.
|
(2)
|
On August 29, 2013, the Company closed the sale of its Downstream segment. See Note 6 for further discussion of this transaction.
|
(3)
|
For the
three months ended March 31, 2014
and 2013, the Company had no anti-dilutive stock options. Stock options are anti-dilutive when the exercise price of the options is greater than the average market price of the common stock for the period or when the results from operations are a net loss.
|
(4)
|
For the
three months ended March 31, 2014
and
2013
, the 2019 convertible senior notes were not dilutive and for the
three months ended March 31, 2013
, the 2026 convertible senior notes retired in November 2013 were not dilutive, as the average price of the Company’s stock was less than the effective
|
(5)
|
Dilutive unvested restricted stock units are expected to fluctuate from quarter to quarter depending on the Company’s performance compared to a predetermined set of performance criteria. See Note 4 to these financial statements for further information regarding certain of the Company’s restricted stock grants.
|
|
March 31,
2014 |
|
December 31,
2013 |
||||
5.875% senior notes due 2020
|
$
|
375,000
|
|
|
$
|
375,000
|
|
5.000% senior notes due 2021
|
450,000
|
|
|
450,000
|
|
||
1.500% convertible senior notes due 2019, net of original issue discount of $58,618 and $60,908
|
241,382
|
|
|
239,092
|
|
||
Revolving credit facility due 2016
|
—
|
|
|
—
|
|
||
|
1,066,382
|
|
|
1,064,092
|
|
||
Less current maturities
|
—
|
|
|
—
|
|
||
|
$
|
1,066,382
|
|
|
$
|
1,064,092
|
|
|
Semi-Annual Cash Interest Payment
|
|
Payment Dates
|
||
5.875% senior notes due 2020
|
$
|
11,000
|
|
|
April 1 and October 1
|
5.000% senior notes due 2021
|
11,300
|
|
|
March 1 and September 1
|
|
1.500% convertible senior notes due 2019
|
2,300
|
|
|
March 1 and September 1
|
|
Directors
|
|
Executive Officers
|
|
Certain Managers
|
Cash-settled phantom restricted stock units
|
|
|
X
|
|
X
|
Time-based restricted stock units
|
|
|
X
|
|
|
Performance-based restricted stock units
|
|
|
X
|
|
|
Fully-vested common stock
|
X
|
|
|
|
|
|
Three Months Ended
March 31, |
||||||
|
2014
|
|
2013
|
||||
Income before taxes
|
$
|
2,631
|
|
|
$
|
3,307
|
|
Net income
|
$
|
1,653
|
|
|
$
|
2,071
|
|
Earnings per common share:
|
|
|
|
||||
Basic earnings per common share
|
$
|
0.05
|
|
|
$
|
0.06
|
|
Diluted earnings per common share
|
$
|
0.05
|
|
|
$
|
0.06
|
|
|
Three Months Ended
March 31, |
||||||
|
2014
|
|
2013
|
||||
Revenue
|
$
|
12
|
|
|
$
|
14,990
|
|
Gain on sale of assets
|
655
|
|
|
—
|
|
||
Operating income
|
643
|
|
|
3,589
|
|
||
Income before income taxes
|
643
|
|
|
3,591
|
|
||
Income tax expense
|
231
|
|
|
1,360
|
|
||
Income from discontinued operations
|
412
|
|
|
2,231
|
|
|
As of
|
|
As of
|
||||
|
March 31,
2014 |
|
December 31,
2013 |
||||
Assets:
|
|
|
|
||||
Other current assets
|
$
|
602
|
|
|
$
|
1,578
|
|
Total current assets
|
602
|
|
|
1,578
|
|
||
Property, plant and equipment, net
|
137
|
|
|
759
|
|
||
Total assets
|
$
|
739
|
|
|
$
|
2,337
|
|
Liabilities:
|
|
|
|
||||
Accrued payroll and benefits
|
$
|
—
|
|
|
$
|
2
|
|
Other accrued liabilities
|
9
|
|
|
115
|
|
||
Total current liabilities
|
9
|
|
|
117
|
|
||
Other liabilities
|
247
|
|
|
306
|
|
||
Total liabilities
|
$
|
256
|
|
|
$
|
423
|
|
Domestic
|
|
|
GoM
|
42
|
|
Other U.S. coastlines (1)
|
5
|
|
|
47
|
|
Foreign
|
|
|
Brazil
|
4
|
|
Mexico
|
6
|
|
Middle East
|
2
|
|
|
12
|
|
Total Vessels (2)
|
59
|
|
|
|
Three Months Ended
March 31, |
||||||
|
2014
|
|
2013
|
||||
New Generation Offshore Supply Vessels:
|
|
|
|
||||
Average number of new generation OSVs (1)
|
54.2
|
|
|
51.0
|
|
||
Average new generation OSV fleet capacity (DWT)
|
157,296
|
|
|
128,190
|
|
||
Average new generation OSV capacity (DWT)
|
2,901
|
|
|
2,514
|
|
||
Average new generation OSV utilization rate (2)
|
75.3
|
%
|
|
86.7
|
%
|
||
Average new generation OSV dayrate (3)
|
$
|
26,237
|
|
|
$
|
25,142
|
|
Effective dayrate (4)
|
$
|
19,756
|
|
|
$
|
21,798
|
|
|
(1)
|
We owned 55 new generation OSVs as of
March 31, 2014
. Excluded from this data is one stacked conventional OSV that we consider to be a non-core asset. Also excluded from this data are four MPSVs owned and operated by the Company. During the first quarter of 2014, we placed in service one 300 class OSV, the
HOS Riverbend
and one 320 class OSV, the
HOS Carolina.
Subsequent to quarter-end, we placed in service one 320 class OSV, the
HOS
Claymore.
|
(2)
|
Utilization rates are average rates based on a 365-day year. Vessels are considered utilized when they are generating revenues.
|
(3)
|
Average dayrates represent average revenue per day, which includes charter hire, crewing services and net brokerage revenues, based on the number of days during the period that the OSVs generated revenue.
|
(4)
|
Effective dayrate represents the average dayrate multiplied by the average utilization rate.
|
|
Three Months Ended
March 31, |
||||||
|
2014
|
|
2013
|
||||
Components of EBITDA:
|
|
|
|
||||
Income from continuing operations
|
$
|
11,354
|
|
|
$
|
3,928
|
|
Interest expense, net
|
|
|
|
||||
Debt obligations
|
7,232
|
|
|
13,722
|
|
||
Interest income
|
(364
|
)
|
|
(577
|
)
|
||
Total interest, net
|
6,868
|
|
|
13,145
|
|
||
Income tax expense
|
6,729
|
|
|
2,316
|
|
||
Depreciation
|
16,185
|
|
|
13,196
|
|
||
Amortization
|
13,175
|
|
|
6,223
|
|
||
EBITDA from continuing operations
|
$
|
54,311
|
|
|
$
|
38,808
|
|
|
Three Months Ended
March 31, |
||||||
|
2014
|
|
2013
|
||||
EBITDA Reconciliation to GAAP:
|
|
|
|
||||
EBITDA from continuing operations
|
$
|
54,311
|
|
|
$
|
38,808
|
|
Cash paid for deferred drydocking charges
|
(9,915
|
)
|
|
(5,681
|
)
|
||
Cash paid for interest
|
(13,882
|
)
|
|
(14,265
|
)
|
||
Cash paid for taxes
|
(937
|
)
|
|
(553
|
)
|
||
Changes in working capital
|
4,633
|
|
|
(14,089
|
)
|
||
Stock-based compensation expense
|
2,631
|
|
|
3,307
|
|
||
Loss on early extinguishment of debt
|
—
|
|
|
24,319
|
|
||
Changes in other, net
|
(137
|
)
|
|
(141
|
)
|
||
Net cash flows provided by operating activities
|
$
|
36,704
|
|
|
$
|
31,705
|
|
|
Three Months Ended
March 31, |
||||||
|
2014
|
|
2013
|
||||
Loss on early extinguishment of debt
|
$
|
—
|
|
|
$
|
24,319
|
|
Stock-based compensation expense
|
2,631
|
|
|
3,307
|
|
||
Interest income
|
364
|
|
|
577
|
|
•
|
EBITDA does not reflect the future capital expenditure requirements that may be necessary to replace our existing vessels as a result of normal wear and tear,
|
•
|
EBITDA does not reflect the interest, future principal payments and other financing-related charges necessary to service the debt that we have incurred in acquiring and constructing our vessels,
|
•
|
EBITDA does not reflect the deferred income taxes that we will eventually have to pay once we are no longer in an overall tax net operating loss carryforward position, as applicable, and
|
•
|
EBITDA does not reflect changes in our net working capital position.
|
|
Three months ended March 31,
|
||||||
|
2014
|
|
2013
|
||||
Revenue
|
$
|
12
|
|
|
$
|
14,990
|
|
Gain on sale of assets
|
655
|
|
|
—
|
|
||
Operating income
|
643
|
|
|
3,589
|
|
||
Income from discontinued operations
|
412
|
|
|
2,231
|
|
|
||||||||||||
|
Total Debt
|
|
Effective Interest Rate
|
|
Semi-Annual Cash Interest Payment
|
|
Payment Dates
|
|||||
5.875% senior notes due 2020 (1)
|
$
|
375,000
|
|
|
6.08
|
%
|
|
$
|
11,000
|
|
|
April 1 and October 1
|
5.000% senior notes due 2021 (1)
|
450,000
|
|
|
5.21
|
%
|
|
11,300
|
|
|
March 1 and September 1
|
||
1.500% convertible senior notes due 2019, net of original issue discount of $58,618
|
241,382
|
|
|
6.23
|
%
|
|
2,300
|
|
|
March 1 and September 1
|
||
|
$
|
1,066,382
|
|
|
|
|
|
|
|
|
|
(1)
|
The senior notes do not require any payments of principal prior to their stated maturity dates, but pursuant to the indentures under which the 2020 and 2021 senior notes were issued, we would be required to make offers to purchase such senior notes upon the occurrence of specified events, such as certain asset sales or a change in control.
|
|
Three Months Ended March 31, 2014
|
|
Incurred Since
Inception
|
|
Estimated
Program
Totals (1)
|
|
Projected
Delivery
Dates (1)
|
||||||
Growth Capital Expenditures:
|
|
|
|
|
|
|
|
||||||
OSV newbuild program #5 (2)
|
$
|
106.7
|
|
|
$
|
823.2
|
|
|
$
|
1,250.0
|
|
|
2Q2013-4Q2016
|
|
(1)
|
Estimated Program Totals and Projected Delivery Dates are based on internal estimates and are subject to change due to delays and possible cost overruns inherent in any large construction project, including, without limitation, shortages of equipment, lack of shipyard availability, unforeseen engineering problems, work stoppages, weather interference, unanticipated cost increases, the inability to obtain necessary certifications and approvals and shortages of materials, component equipment or skilled labor. All of the above historical and budgeted capital expenditure project amounts for our newbuild program represent estimated cash outlays and do not include any allocation of capitalized construction period interest. Projected delivery dates correspond to the first and last vessels that are contracted with shipyards for construction and delivery under our currently active program, respectively.
|
(2)
|
Our fifth OSV newbuild program consists of vessel construction contracts with three domestic shipyards to build four 300 class OSVs, five 310 class OSVs, ten 320 class OSVs and five 310 class MPSVs. As of March 31, 2014, we had placed six vessels in service under such program. During the first quarter of 2014, we placed in-service one 300 class OSV, the
HOS Riverbend
and one 320 class OSV, the
HOS Carolina.
Subsequent to quarter-end, we placed in service one additional 320 class OSV, the
HOS Claymore
. The remaining 17 vessels under this 24-vessel domestic newbuild program are currently expected to be placed in service as follows: 11 in 2014, four in 2015 and two in 2016. We expect to own and operate 66 and 68 new generation OSVs as of December 31, 2014, and 2015, respectively. These vessel additions result in a projected average new generation OSV fleet complement of 58.6, 67.7 and 68.0 vessels for the fiscal years 2014, 2015 and 2016, respectively. We expect to own and operate five, seven and nine MPSVs as of December 31, 2014, 2015 and 2016 respectively. These vessel additions result in a projected average MPSV fleet complement of 4.4, 5.3, 7.8 and 9.0 vessels for the fiscal years 2014, 2015, 2016 and 2017, respectively.
|
|
Three Months Ended
March 31, |
|
Year Ended
December 31,
|
||||||||
|
2014
|
|
2013
|
|
2014
|
||||||
|
Actual
|
|
Actual
|
|
Forecast
|
||||||
Maintenance and Other Capital Expenditures:
|
|
|
|
|
|
||||||
Maintenance Capital Expenditures
|
|
|
|
|
|
||||||
Deferred drydocking charges (1)
|
$
|
9.9
|
|
|
$
|
5.7
|
|
|
$
|
43.1
|
|
Other vessel capital improvements (2)
|
7.1
|
|
|
2.3
|
|
|
11.4
|
|
|||
|
17.0
|
|
|
8.0
|
|
|
54.5
|
|
|||
Other Capital Expenditures
|
|
|
|
|
|
||||||
200 class OSV retrofit program (3)
|
0.1
|
|
|
4.2
|
|
|
0.1
|
|
|||
Commercial-related vessel improvements (4)
|
7.4
|
|
|
0.1
|
|
|
38.3
|
|
|||
Miscellaneous non-vessel additions (5)
|
0.6
|
|
|
0.5
|
|
|
6.6
|
|
|||
|
8.1
|
|
|
4.8
|
|
|
45.0
|
|
|||
Total (6)
|
$
|
25.1
|
|
|
$
|
12.8
|
|
|
$
|
99.5
|
|
|
(1)
|
Deferred drydocking charges for 2014 include the projected recertification costs for 21 OSVs and two MPSVs.
|
(2)
|
Other vessel capital improvements include costs for discretionary vessel enhancements, which are typically incurred during a planned drydocking event to meet customer specifications.
|
(3)
|
Our 200 class OSV retrofit program consisted of a vessel construction contract with a domestic shipyard to upgrade and stretch six of our Super 200 class DP-1 OSVs converting them into 240 class DP-2 OSVs. The total project costs for such program, which commenced in December 2012 and was completed in November 2013, was $50.4 million. These vessel improvement costs have resulted in higher dayrates charged to customers.
|
(4)
|
Commercial-related vessel improvements include items, such as cranes, ROVs, helidecks, living quarters, and other specialized vessel equipment which costs are typically included in and offset, in whole or in part, by higher dayrates charged to customers.
|
(5)
|
Non-vessel capital expenditures are primarily related to information technology and shoreside support initiatives.
|
(6)
|
Total Maintenance and Other Capital Expenditures in the above table exclude $2.0 million for the three months ended March 31, 2013, from discontinued operations related to our Downstream assets that were sold on August 29, 2013.
|
Exhibit
Number
|
|
Description of Exhibit
|
|
|
|
|
|
**2.1
|
|
—
|
Asset Purchase Agreement dated as of July 22, 2013, between Hornbeck Offshore Transportation, LLC and Genesis Marine, LLC (incorporated by reference to Exhibit 2.1 to the Company’s Current Report on Form 8-K filed July 25, 2013).
|
|
|
|
|
3.1
|
|
—
|
Second Restated Certificate of Incorporation of the Company, as amended (incorporated by reference to Exhibit 3.1 to the Company’s Form 10-Q for the quarter ended March 31, 2005).
|
|
|
|
|
3.2
|
|
—
|
Fourth Restated Bylaws of the Company adopted June 30, 2004 (incorporated by reference to Exhibit 3.3 to the Company’s Form 10-Q for the quarter ended June 30, 2004).
|
|
|
|
|
3.3
|
|
—
|
Amendment No. 1 to Fourth Restated Bylaws of the Company adopted June 21, 2012 (incorporated by reference to Exhibit 3.1 to the Company’s Current Report on Form 8-K filed June 27, 2012).
|
|
|
|
|
3.4
|
|
—
|
Amended and Restated Certificate of Designation of Series A Junior Participating Preferred Stock filed with the Secretary of State of the State of Delaware on July 2, 2013 (incorporated by reference to Exhibit 3.1 to the Company’s Current Report on Form 8-K filed July 3, 2013).
|
|
|
|
|
4.1
|
|
—
|
Specimen stock certificates for the Company’s common stock, $0.01 par value (for U.S. citizens and non-U.S. citizens) (incorporated by reference to Exhibit 4.4 to the Company’s Form 8-A/A filed July 3, 2013, Registration No. 001-32108).
|
|
|
|
|
4.2
|
|
—
|
Indenture dated as of November 23, 2004 between the Company, the guarantors named therein and Wells Fargo Bank, National Association (as Trustee), (including form of 6.125% Series B Senior Note due 2014 ) (incorporated by reference to Exhibit 4.1 to the Company’s Current Report on Form 8-K filed November 24, 2004).
|
|
|
|
|
4.3
|
|
—
|
Indenture dated as of November 13, 2006 by and among Hornbeck Offshore Services, Inc., the guarantors named therein, and Wells Fargo Bank, National Association, as Trustee (including form of 1.625% Convertible Senior Notes due 2026) (incorporated by reference to Exhibit 4.1 to the Company’s Current Report on Form 8-K filed November 13, 2006).
|
|
|
|
|
4.4
|
|
—
|
Confirmation of OTC Convertible Note Hedge dated as of November 7, 2006 by and between Hornbeck Offshore Services, Inc. and Jefferies International Limited (incorporated by reference to Exhibit 4.3 to the Company’s Current Report on Form 8-K filed November 13, 2006).
|
|
|
|
|
4.5
|
|
—
|
Confirmation of OTC Convertible Note Hedge dated as of November 7, 2006 by and between Hornbeck Offshore Services, Inc. and Bear, Stearns International Limited, as supplemented on November 9, 2006 (incorporated by reference to Exhibit 4.4 to the Company’s Current Report on Form 8-K filed November 13, 2006).
|
|
|
|
|
4.6
|
|
—
|
Confirmation of OTC Convertible Note Hedge dated as of November 7, 2006 by and between Hornbeck Offshore Services, Inc. and AIG-FP Structured Finance (Cayman) Limited, as supplemented on November 9, 2006 (incorporated by reference to Exhibit 4.5 to the Company’s Current Report on Form 8-K filed November 13, 2006).
|
|
|
|
|
4.7
|
|
—
|
Confirmation of OTC Warrant Confirmation dated as of November 7, 2006 by and between Hornbeck Offshore Services, Inc. and Jefferies International Limited (incorporated by reference to Exhibit 4.6 to the Company’s Current Report on Form 8-K filed November 13, 2006).
|
Exhibit
Number
|
|
Description of Exhibit
|
|
|
|
|
|
4.8
|
|
—
|
Confirmation of OTC Warrant Confirmation dated as of November 7, 2006 by and between Hornbeck Offshore Services, Inc. and Bear, Stearns International Limited, as supplemented on November 9, 2006 (incorporated by reference to Exhibit 4.7 to the Company’s Current Report on Form 8-K filed November 13, 2006).
|
|
|
|
|
4.9
|
|
—
|
Confirmation of OTC Warrant Confirmation dated as of November 7, 2006 by and between Hornbeck Offshore Services, Inc. and AIG-FP Structured Finance (Cayman) Limited, as supplemented on November 9, 2006 (incorporated by reference to Exhibit 4.8 to the Company’s Current Report on Form 8-K filed November 13, 2006).
|
|
|
|
|
4.10
|
|
—
|
Indenture dated as of August 17, 2009 by and among Hornbeck Offshore Services, Inc., the guarantors named therein, and Wells Fargo Bank, National Association, as Trustee (including form of 8% Senior Notes due 2017) (incorporated by reference to Exhibit 4.1 to the Company’s Current Report on Form 8-K filed August 18, 2009).
|
|
|
|
|
4.11
|
|
—
|
Indenture, dated March 16, 2012 among Hornbeck Offshore Services, Inc., as issuer, the guarantors party thereto and Wells Fargo Bank, National Association, as trustee (including form of 5.875% Senior Notes due 2020) (incorporated by reference to Exhibit 4.2 to the Company’s Current Report on Form 8-K filed March 21, 2012).
|
|
|
|
|
4.12
|
|
—
|
First Supplemental Indenture, dated March 30, 2012 among Hornbeck Offshore Services, Inc., the guarantors party thereto and Wells Fargo Bank, National Association, as trustee (to the indenture governing the 1.625% Convertible Senior Notes due 2026) (incorporated by reference to Exhibit 4.2 to the Company’s Current Report on Form 8-K filed April 4, 2012).
|
|
|
|
|
4.13
|
|
—
|
First Supplemental Indenture, dated March 30, 2012 among Hornbeck Offshore Services, Inc., the guarantors party thereto and Wells Fargo Bank, National Association, as trustee (to the indenture governing the 8.000% Senior Notes due 2017) (incorporated by reference to Exhibit 4.3 to the Company’s Current Report on Form 8-K filed April 4, 2012).
|
|
|
|
|
4.14
|
|
—
|
Indenture dated as of August 13, 2012 by and among Hornbeck Offshore Services, Inc., the guarantors named therein, and Wells Fargo Bank, National Association, as Trustee (including form of 1.500% Convertible Senior Notes due 2019) (incorporated by reference to Exhibit 4.1 to the Company’s Current Report on Form 8-K filed on August 13, 2012).
|
|
|
|
|
4.15
|
|
—
|
Confirmation of Base Call Option Transaction dated as of August 7, 2012 by and between Hornbeck Offshore Services, Inc. and Barclays Bank PLC (incorporated by reference to Exhibit 4.2 to the Company’s Current Report on Form 8-K filed on August 13, 2012).
|
|
|
|
|
4.16
|
|
—
|
Confirmation of Base Call Option Transaction dated as of August 7, 2012 by and between Hornbeck Offshore Services, Inc. and JPMorgan Chase Bank, National Association, London Branch (incorporated by reference to Exhibit 4.3 to the Company’s Current Report on Form 8-K filed on August 13, 2012).
|
|
|
|
|
4.17
|
|
—
|
Confirmation of Base Call Option Transaction dated as of August 7, 2012 by and between Hornbeck Offshore Services, Inc. and Wells Fargo Bank, National Association (incorporated by reference to Exhibit 4.4 to the Company’s Current Report on Form 8-K filed on August 13, 2012).
|
|
|
|
|
4.18
|
|
—
|
Confirmation of Additional Base Call Option Transaction dated as of August 8, 2012 by and between Hornbeck Offshore Services, Inc. and Barclays Bank PLC (incorporated by reference to Exhibit 4.5 to the Company’s Current Report on Form 8-K filed on August 13, 2012).
|
|
|
|
|
4.19
|
|
—
|
Confirmation of Additional Base Call Option Transaction dated as of August 8, 2012 by and between Hornbeck Offshore Services, Inc. and JPMorgan Chase Bank, National Association, London Branch (incorporated by reference to Exhibit 4.6 to the Company’s Current Report on Form 8-K filed on August 13, 2012).
|
|
|
|
Exhibit
Number
|
|
Description of Exhibit
|
|
|
|
|
|
4.20
|
|
—
|
Confirmation of Additional Base Call Option Transaction dated as of August 8, 2012 by and between Hornbeck Offshore Services, Inc. and Wells Fargo Bank, National Association (incorporated by reference to Exhibit 4.7 to the Company’s Current Report on Form 8-K filed on August 13, 2012).
|
|
|
|
|
4.21
|
|
—
|
Confirmation of Base Warrant dated as of August 7, 2012 by and between Hornbeck Offshore Services, Inc. and Barclays Bank PLC (incorporated by reference to Exhibit 4.8 to the Company’s Current Report on Form 8-K filed on August 13, 2012).
|
|
|
|
|
4.22
|
|
—
|
Confirmation of Base Warrant dated as of August 7, 2012 by and between Hornbeck Offshore Services, Inc. and JPMorgan Chase Bank, National Association, London Branch (incorporated by reference to Exhibit 4.9 to the Company’s Current Report on Form 8-K filed on August 13, 2012).
|
|
|
|
|
4.23
|
|
—
|
Confirmation of Base Warrant dated as of August 7, 2012 by and between Hornbeck Offshore Services, Inc. and Wells Fargo Bank, National Association (incorporated by reference to Exhibit 4.10 to the Company’s Current Report on Form 8-K filed on August 13, 2012).
|
|
|
|
|
4.24
|
|
—
|
Confirmation of Additional Warrants dated as of August 8, 2012 by and between Hornbeck Offshore Services, Inc. and Barclays Bank PLC (incorporated by reference to Exhibit 4.11 to the Company’s Current Report on Form 8-K filed on August 13, 2012).
|
|
|
|
|
4.25
|
|
—
|
Confirmation of Additional Warrants dated as of August 8, 2012 by and between Hornbeck Offshore Services, Inc. and Wells Fargo Bank, National Association (incorporated by reference to Exhibit 4.13 to the Company’s Current Report on Form 8-K filed on August 13, 2012).
|
|
|
|
|
4.26
|
|
—
|
Confirmation of Additional Warrants dated as of August 8, 2012 by and between Hornbeck Offshore Services, Inc. and Wells Fargo Bank, National Association (incorporated by reference to Exhibit 4.13 to the Company’s Current Report on Form 8-K filed on August 13, 2012).
|
|
|
|
|
4.27
|
|
—
|
Second Supplemental Indenture with respect to the 8.000% Notes Indenture, dated March 27, 2013 among Hornbeck Offshore Services, Inc., the guarantors party thereto and Wells Fargo Bank, National Association, as trustee (incorporated by reference to Exhibit 4.1 to the Company’s Current Report on Form 8-K filed on March 28, 2013).
|
|
|
|
|
4.28
|
|
—
|
Indenture governing the 5.000% Notes, dated March 28, 2013 among Hornbeck Offshore Services, Inc., as issuer, the guarantors party thereto and Wells Fargo Bank, National Association, as trustee (including form of 5.000% Senior Notes due 2021) (incorporated by reference to Exhibit 4.2 to the Company’s Current Report on Form 8-K filed on March 28, 2013).
|
|
|
|
|
4.29
|
|
—
|
Exchange and Registration Rights Agreement, dated as of March 28, 2013, among Hornbeck Offshore Services, Inc., the guarantors party thereto and Barclays Capital Inc., as representative of the Initial Purchasers (incorporated by reference to Exhibit 4.4 to the Company’s Current Report on Form 8-K filed on March 28, 2013).
|
|
|
|
|
4.30
|
|
—
|
Rights Agreement dated as of July 1, 2013 between Hornbeck Offshore Services, Inc. and Computershare Inc., as Rights Agent, which includes as Exhibit A the Amended and Restated Certificate of Designation of Series A Preferred Stock, as Exhibit B the form of Right Certificate and as Exhibit C the form of Summary of Rights to Purchase Shares (incorporated by reference to Exhibit 4.1 to the Company’s Current Report on Form 8-K filed July 3, 2013).
|
|
|
|
|
*10.1
|
|
—
|
Form of Amended Appendix A to Employment Agreements for Executive Officers.
|
|
|
|
|
*31.1
|
|
—
|
Certification of the Chief Executive Officer pursuant to Section 302 of the Sarbanes-Oxley Act of 2002.
|
|
|
|
|
|
Hornbeck Offshore Services, Inc.
|
|
|
|
Date: May 9, 2014
|
|
/s/ JAMES O. HARP, JR.
|
|
|
James O. Harp, Jr.
|
|
|
Executive Vice President and Chief Financial Officer
|
•
|
achievement of a component “threshold” metric earns cash incentive compensation of fifty percent (50%) of the applicable Weighted Percentage of Basic Salary;
|
•
|
achievement of a component “target” metric earns cash incentive compensation of one hundred percent (100%) of the applicable Weighted Percentage of Basic Salary; and
|
•
|
achievement of a component “maximum” metric earns cash incentive compensation of two hundred percent (200%) of the applicable Weighted Percentage of Basic Salary.
|
Component
|
Threshold Metric (50%)
|
Target Metric (100%)
|
Maximum Metric (200%)
|
Adjusted EBITDA
|
75% of the adjusted EBITDA Target
|
100% of the adjusted EBITDA Target
|
125% of the adjusted EBITDA Target
|
Operating Margin
|
Top 66.67% of the Parent’s Public Company OSV Peer Group
|
Top 50% of the Parent’s Public Company OSV Peer Group
|
Top 20% of the Parent’s Public Company OSV Peer Group
|
Safety
|
TRIR less than the average of four annual safety benchmarks for the most recent year compiled by IADC, OMSA, ISOA and IMCA
|
TRIR less than the lowest of four annual safety benchmarks for the most recent year compiled by IADC, OMSA, ISOA or IMCA
|
TRIR at least 10% less than the Parent's trailing three-year average TRIR
|
1.
|
I have reviewed this Quarterly Report on Form 10-Q of Hornbeck Offshore Services, Inc.;
|
2.
|
Based on my knowledge, this report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this report;
|
3.
|
Based on my knowledge, the financial statements, and other financial information included in this report, fairly present in all material respects the financial condition, results of operations and cash flows of the registrant as of, and for, the periods presented in this report;
|
4.
|
The registrant’s other certifying officer and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in Exchange Act Rules 13a-15(e) and 15d-15(e)) and internal control over financial reporting (as defined in Exchange Act Rules 13a-15(f) and 15d-15(f)) for the registrant and have:
|
a)
|
Designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under our supervision, to ensure that material information relating to the registrant, including its consolidated subsidiaries, is made known to us by others within those entities, particularly during the period in which this report is being prepared;
|
b)
|
Designed such internal control over financial reporting, or caused such internal control over financial reporting to be designed under our supervision, to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles;
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c)
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Evaluated the effectiveness of the registrant’s disclosure controls and procedures and presented in this report our conclusions about the effectiveness of the disclosure controls and procedures, as of the end of the period covered by this report based on such evaluation;
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d)
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Disclosed in this report any change in the registrant’s internal control over financial reporting that occurred during the registrant’s most recent fiscal quarter (the registrant’s fourth fiscal quarter in the case of an annual report) that has materially affected, or is reasonably likely to materially affect, the registrant’s internal control over financial reporting; and
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5.
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The registrant’s other certifying officer and I have disclosed, based on our most recent evaluation of internal control over financial reporting, to the registrant’s auditors and the audit committee of registrant’s board of directors (or persons performing the equivalent functions):
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a)
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All significant deficiencies and material weaknesses in the design or operation of internal control over financial reporting which are reasonably likely to adversely affect the registrant’s ability to record, process, summarize and report financial information; and
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b)
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Any fraud, whether or not material, that involves management or other employees who have a significant role in the registrant’s internal control over financial reporting.
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Date: May 9, 2014
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/s/ Todd M. Hornbeck
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Todd M. Hornbeck
|
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Chief Executive Officer
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(Principal Executive Officer)
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1.
|
I have reviewed this Quarterly Report on Form 10-Q of Hornbeck Offshore Services, Inc.;
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2.
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Based on my knowledge, this report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this report;
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3.
|
Based on my knowledge, the financial statements, and other financial information included in this report, fairly present in all material respects the financial condition, results of operations and cash flows of the registrant as of, and for, the periods presented in this report;
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4.
|
The registrant’s other certifying officer and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in Exchange Act Rules 13a-15(e) and 15d-15(e)) and internal control over financial reporting (as defined in Exchange Act Rules 13a-15(f) and 15d-15(f)) for the registrant and have:
|
a)
|
Designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under our supervision, to ensure that material information relating to the registrant, including its consolidated subsidiaries, is made known to us by others within those entities, particularly during the period in which this report is being prepared;
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b)
|
Designed such internal control over financial reporting, or caused such internal control over financial reporting to be designed under our supervision, to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles;
|
c)
|
Evaluated the effectiveness of the registrant’s disclosure controls and procedures and presented in this report our conclusions about the effectiveness of the disclosure controls and procedures, as of the end of the period covered by this report based on such evaluation;
|
d)
|
Disclosed in this report any change in the registrant’s internal control over financial reporting that occurred during the registrant’s most recent fiscal quarter (the registrant’s fourth fiscal quarter in the case of an annual report) that has materially affected, or is reasonably likely to materially affect, the registrant’s internal control over financial reporting; and
|
5.
|
The registrant’s other certifying officer and I have disclosed, based on our most recent evaluation of internal control over financial reporting, to the registrant’s auditors and the audit committee of registrant’s board of directors (or persons performing the equivalent functions):
|
a)
|
All significant deficiencies and material weaknesses in the design or operation of internal control over financial reporting which are reasonably likely to adversely affect the registrant’s ability to record, process, summarize and report financial information; and
|
b)
|
Any fraud, whether or not material, that involves management or other employees who have a significant role in the registrant’s internal control over financial reporting.
|
Date: May 9, 2014
|
|
/s/ James O. Harp, Jr
|
|
|
James O. Harp, Jr.
|
|
|
Executive Vice President and
|
|
|
Chief Financial Officer
(Principal Financial Officer)
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1.
|
The Report fully complies with the requirements of Section 13(a) or 15(d) of the Securities Exchange Act of 1934; and
|
2.
|
Information contained in the Report fairly presents, in all material respects, the financial condition and results of operations of the Company.
|
|
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Date: May 9, 2014
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/s/ Todd M. Hornbeck
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|
Todd M. Hornbeck
|
|
Chairman, President and Chief Executive Officer
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1.
|
The Report fully complies with the requirements of Section 13(a) or 15(d) of the Securities Exchange Act of 1934; and
|
2.
|
Information contained in the Report fairly presents, in all material respects, the financial condition and results of operations of the Company.
|
|
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Date: May 9, 2014
|
/s/ James O. Harp, Jr.
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|
James O. Harp, Jr.
|
|
Executive Vice President and Chief Financial Officer
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