UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, DC 20549
 ________________________________________
FORM 10-Q
________________________________________ 
(Mark One)
ý
QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934
For the quarterly period ended September 30, 2014              or             
¨
TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934
For the transition period from              to             
Commission file number 1-12289
SEACOR Holdings Inc.
(Exact Name of Registrant as Specified in Its Charter)
________________________________________ 
Delaware
 
13-3542736
(State or Other Jurisdiction of
Incorporation or Organization)
 
(IRS Employer
Identification No.)
 
 
2200 Eller Drive, P.O. Box 13038,
 
 
Fort Lauderdale, Florida
 
33316
(Address of Principal Executive Offices)
 
(Zip Code)
954-523-2200
(Registrant’s Telephone Number, Including Area Code)
Not Applicable
(Former Name, Former Address and Former Fiscal Year, if Changed Since Last Report)
________________________________________ 
Indicate by check mark whether the registrant: (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days. Yes  ý    No  ¨
Indicate by check mark whether the registrant has submitted electronically and posted on its corporate Web site, if any, every Interactive Data File required to be submitted and posted pursuant to Rule 405 of Regulation S-T (§232.405 of this chapter) during the preceding 12 months (or for such shorter period that the registrant was required to submit and post such files). Yes  ý     No  ¨
Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, or a smaller reporting company. See definitions of “large accelerated filer,” “accelerated filer,” and “smaller reporting company” in Rule 12b-2 of the Exchange Act. (Check one):
Large accelerated filer  x
 
Accelerated filer  ¨
 
Non-accelerated filer  ¨
(Do not check if a smaller
reporting company)
 
Smaller reporting company  ¨
Indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Exchange Act). Yes  ¨    No  ý
The total number of shares of common stock, par value $.01 per share, outstanding as of October 24, 2014 was 18,577,133. The Registrant has no other class of common stock outstanding.



SEACOR HOLDINGS INC.
Table of Contents
 
Part I.
 
 
 
 
Item 1.
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Item 2.
 
 
 
 
Item 3.
 
 
 
 
Item 4.
 
 
 
Part II.
 
 
 
 
Item 1.
 
 
 
 
 
Item 1A.
 
 
 
 
 
Item 2.
 
 
 
 
 
Item 3.
 
 
 
 
 
Item 4.
 
 
 
 
 
Item 5.
 
 
 
 
 
Item 6.


i


PART I—FINANCIAL INFORMATION

ITEM 1.
FINANCIAL STATEMENTS
SEACOR HOLDINGS INC.
CONDENSED CONSOLIDATED BALANCE SHEETS
(in thousands, except share data, unaudited)
 
September 30,
2014
 
December 31,
2013
ASSETS
 
 
 
Current Assets:
 
 
 
Cash and cash equivalents
$
449,632

 
$
527,435

Restricted cash
13,656

 
12,175

Marketable securities
43,286

 
24,292

Receivables:
 
 
 
Trade, net of allowance for doubtful accounts of $3,047 and $1,162 in 2014 and 2013, respectively
215,191

 
215,768

Other
57,621

 
48,181

Inventories
20,896

 
27,615

Deferred income taxes
116

 
116

Prepaid expenses and other
11,431

 
6,701

Total current assets
811,829

 
862,283

Property and Equipment:
 
 
 
Historical cost
2,166,509

 
2,199,183

Accumulated depreciation
(889,993
)
 
(866,330
)
 
1,276,516

 
1,332,853

Construction in progress
284,362

 
143,482

Net property and equipment
1,560,878

 
1,476,335

Investments, at Equity, and Advances to 50% or Less Owned Companies
444,826

 
440,853

Construction Reserve Funds & Title XI Reserve Funds
321,278

 
261,739

Goodwill
62,904

 
17,985

Intangible Assets, Net
34,306

 
12,423

Other Assets
55,049

 
44,615

 
$
3,291,070

 
$
3,116,233

LIABILITIES AND EQUITY
 
 
 
Current Liabilities:
 
 
 
Current portion of long-term debt
$
50,785

 
$
45,323

Accounts payable and accrued expenses
90,704

 
85,477

Other current liabilities
139,999

 
123,619

Total current liabilities
281,488

 
254,419

Long-Term Debt
831,163

 
834,118

Deferred Income Taxes
459,039

 
457,827

Deferred Gains and Other Liabilities
185,950

 
144,441

Total liabilities
1,757,640

 
1,690,805

Equity:
 
 
 
SEACOR Holdings Inc. stockholders’ equity:
 
 
 
Preferred stock, $.01 par value, 10,000,000 shares authorized; none issued nor outstanding

 

Common stock, $.01 par value, 60,000,000 shares authorized; 37,461,053 and 37,219,201 shares issued in 2014 and 2013, respectively
375

 
372

Additional paid-in capital
1,485,342

 
1,394,621

Retained earnings
1,155,309

 
1,095,270

Shares held in treasury of 18,416,771 and 16,837,113 in 2014 and 2013, respectively, at cost
(1,213,267
)
 
(1,088,219
)
Accumulated other comprehensive loss, net of tax
(1,891
)
 
(1,192
)
 
1,425,868

 
1,400,852

Noncontrolling interests in subsidiaries
107,562

 
24,576

Total equity
1,533,430

 
1,425,428

 
$
3,291,070

 
$
3,116,233



The accompanying notes are an integral part of these condensed consolidated financial statements
and should be read in conjunction herewith.

1


SEACOR HOLDINGS INC.
CONDENSED CONSOLIDATED STATEMENTS OF INCOME
(in thousands, except share data, unaudited)
 
Three Months Ended September 30,
 
Nine Months Ended September 30,
 
2014
 
2013
 
2014
 
2013
Operating Revenues
$
338,936

 
$
336,784

 
$
977,177

 
$
919,411

Costs and Expenses:
 
 
 
 
 
 
 
Operating
237,676

 
239,540

 
688,558

 
680,566

Administrative and general
46,655

 
31,463

 
119,418

 
101,826

Depreciation and amortization
33,604

 
33,503

 
100,216

 
100,834

 
317,935

 
304,506

 
908,192

 
883,226

Gains on Asset Dispositions and Impairments, Net
29,869

 
19,230

 
38,842

 
33,550

Operating Income
50,870

 
51,508

 
107,827

 
69,735

Other Income (Expense):
 
 
 
 
 
 
 
Interest income
4,463

 
4,280

 
14,536

 
10,665

Interest expense
(11,124
)
 
(10,520
)
 
(32,985
)
 
(31,282
)
Marketable security gains (losses), net
9,693

 
(1,149
)
 
15,494

 
9,403

Derivative losses, net
(2,538
)
 
(303
)
 
(2,681
)
 
(3,235
)
Foreign currency gains (losses), net
(3,059
)
 
2,230

 
(1,538
)
 
(2,697
)
Other, net
111

 
477

 
6,669

 
675

 
(2,454
)
 
(4,985
)
 
(505
)
 
(16,471
)
Income from Continuing Operations Before Income Tax Expense and Equity in Earnings of 50% or Less Owned Companies
48,416

 
46,523

 
107,322

 
53,264

Income Tax Expense
15,610

 
15,984

 
34,985

 
21,306

Income from Continuing Operations Before Equity in Earnings of 50% or Less Owned Companies
32,806

 
30,539

 
72,337

 
31,958

Equity in Earnings of 50% or Less Owned Companies, Net of Tax
972

 
230

 
2,681

 
7,071

Income from Continuing Operations
33,778

 
30,769

 
75,018

 
39,029

Loss from Discontinued Operations, Net of Tax

 

 

 
(10,325
)
Net Income
33,778

 
30,769

 
75,018

 
28,704

Net Income attributable to Noncontrolling Interests in Subsidiaries
6,315

 
478

 
14,979

 
130

Net Income attributable to SEACOR Holdings Inc.
$
27,463

 
$
30,291

 
$
60,039

 
$
28,574

 
 
 
 
 
 
 
 
Net Income (Loss) attributable to SEACOR Holdings Inc.:
 
 
 
 
 
 
Continuing operations
$
27,463

 
$
30,291

 
$
60,039

 
$
38,799

Discontinued operations

 

 

 
(10,225
)
 
$
27,463

 
$
30,291

 
$
60,039

 
$
28,574

 
 
 
 
 
 
 
 
Basic Earnings (Loss) Per Common Share of SEACOR Holdings Inc.:
 
 
 
 
 
 
Continuing operations
$
1.43

 
$
1.52

 
$
3.04

 
$
1.96

Discontinued operations

 

 

 
(0.52
)
 
$
1.43

 
$
1.52

 
$
3.04

 
$
1.44

 
 
 
 
 
 
 
 
Diluted Earnings (Loss) Per Common Share of SEACOR Holdings Inc.:
 
 
 
 
 
 
Continuing operations
$
1.28

 
$
1.36

 
$
2.85

 
$
1.92

Discontinued operations

 

 

 
(0.51
)
 
$
1.28

 
$
1.36

 
$
2.85

 
$
1.41

 
 
 
 
 
 
 
 
Weighted Average Common Shares Outstanding:
 
 
 
 
 
 
 
Basic
19,196,121

 
19,964,695

 
19,761,620

 
19,843,778

Diluted
25,627,742

 
24,601,584

 
24,374,918

 
20,198,449


The accompanying notes are an integral part of these condensed consolidated financial statements
and should be read in conjunction herewith.

2


SEACOR HOLDINGS INC.
CONDENSED CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME
(in thousands, unaudited)
 
 
Three Months Ended September 30,
 
Nine Months Ended September 30,
 
 
2014
 
2013
 
2014
 
2013
Net Income
 
$
33,778

 
$
30,769

 
$
75,018

 
$
28,704

Other Comprehensive Income (Loss):
 
 
 
 
 
 
 
 
Foreign currency translation gains (losses)
 
(3,968
)
 
4,050

 
(1,730
)
 
(488
)
Reclassification of foreign currency translation gains to foreign currency gains (losses), net
 

 

 
(11
)
 

Derivative gains on cash flow hedges
 
171

 
192

 
148

 
572

Reclassification of derivative (gains) losses on cash flow hedges to equity in earnings of 50% or less owned companies
 
120

 
(65
)
 
335

 
253

 
 
(3,677
)
 
4,177

 
(1,258
)
 
337

Income tax (expense) benefit
 
1,139

 
(1,311
)
 
376

 
(125
)
 
 
(2,538
)
 
2,866

 
(882
)
 
212

Comprehensive Income
 
31,240

 
33,635

 
74,136

 
28,916

Comprehensive Income attributable to Noncontrolling Interests in Subsidiaries
 
5,893

 
910

 
14,796

 
110

Comprehensive Income attributable to SEACOR Holdings Inc.
 
$
25,347

 
$
32,725

 
$
59,340

 
$
28,806



















The accompanying notes are an integral part of these condensed consolidated financial statements
and should be read in conjunction herewith.

3


SEACOR HOLDINGS INC.
CONDENSED CONSOLIDATED STATEMENT OF CHANGES IN EQUITY
(in thousands, unaudited)
 
 
SEACOR Holdings Inc. Stockholders’ Equity
 
Non-
Controlling
Interests In
Subsidiaries
 
Total
Equity
 
 
Common
Stock
 
Additional
Paid-In
Capital
 
Retained
Earnings
 
Shares
Held In
Treasury
 
Accumulated
Other
Comprehensive
Loss
 
December 31, 2013
 
$
372

 
$
1,394,621

 
$
1,095,270

 
$
(1,088,219
)
 
$
(1,192
)
 
$
24,576

 
$
1,425,428

Issuance of common stock:
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Employee Stock Purchase Plan
 

 

 

 
2,165

 

 

 
2,165

Exercise of stock options
 
1

 
5,034

 

 

 

 

 
5,035

Director stock awards
 

 
153

 

 

 

 

 
153

Restricted stock
 
2

 
200

 

 
21

 

 

 
223

Purchase of treasury shares
 

 

 

 
(127,151
)
 

 

 
(127,151
)
Amortization of share awards
 

 
11,683

 

 

 

 

 
11,683

Cancellation of restricted stock
 

 
83

 

 
(83
)
 

 

 

Purchase of subsidiary shares from noncontrolling interests
 

 
(1,242
)
 

 

 

 
(1,868
)
 
(3,110
)
Issuance of noncontrolling interests, net of issue costs
 

 
74,810

 

 

 

 
71,114

 
145,924

Dividends paid to noncontrolling interests
 

 

 

 

 

 
(1,056
)
 
(1,056
)
Net income
 

 

 
60,039

 

 

 
14,979

 
75,018

Other comprehensive loss
 

 

 

 

 
(699
)
 
(183
)
 
(882
)
Nine months ended September 30, 2014
 
$
375

 
$
1,485,342

 
$
1,155,309

 
$
(1,213,267
)
 
$
(1,891
)
 
$
107,562

 
$
1,533,430































The accompanying notes are an integral part of these consolidated financial statements
and should be read in conjunction herewith.

4


SEACOR HOLDINGS INC.
CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS
(in thousands, unaudited)
 
Nine Months Ended September 30,
 
2014
 
2013
Net Cash Provided by Operating Activities of Continuing Operations
$
165,711

 
$
134,698

Cash Flows from Investing Activities of Continuing Operations:
 
 
 
Purchases of property and equipment
(311,094
)
 
(146,483
)
Proceeds from disposition of property and equipment
187,907

 
205,735

Investments in and advances to 50% or less owned companies
(58,343
)
 
(91,492
)
Return of investments and advances from 50% or less owned companies
31,549

 
10,642

(Issuances of) payments received on third party leases and notes receivable, net
(8,173
)
 
2,604

Net (increase) decrease in restricted cash
(1,481
)
 
7,392

Net increase in construction reserve funds and Title XI reserve funds
(59,539
)
 
(33,392
)
Business acquisitions, net of cash acquired
(35,000
)
 
(10,540
)
Net cash used in investing activities of continuing operations
(254,174
)
 
(55,534
)
Cash Flows from Financing Activities of Continuing Operations:
 
 
 
Payments on long-term debt and capital lease obligations
(18,969
)
 
(13,129
)
Net (repayments) borrowings under inventory financing arrangements
(3,116
)
 
4,183

Proceeds from issuance of long-term debt
11,464

 
10

Common stock acquired for treasury
(127,151
)
 

Share award settlements for Era Group employees and directors

 
(357
)
Proceeds and tax benefits from share award plans
7,403

 
17,195

Issuance of noncontrolling interests, net of issue costs
145,350

 
40

Purchase of subsidiary shares from noncontrolling interests
(2,090
)
 

Dividends paid to noncontrolling interests
(1,056
)
 
(3,822
)
Net cash provided by financing activities of continuing operations
11,835

 
4,120

Effects of Exchange Rate Changes on Cash and Cash Equivalents
(1,175
)
 
(643
)
Net Increase (Decrease) in Cash and Cash Equivalents from Continuing Operations
(77,803
)
 
82,641

Cash Flows from Discontinued Operations:
 
 
 
Operating Activities

 
24,298

Investing Activities

 
(8,502
)
Financing Activities

 
(14,017
)
Effects of Exchange Rate Changes on Cash and Cash Equivalents

 
143

Net Increase in Cash and Cash Equivalents from Discontinued Operations

 
1,922

Net Increase (Decrease) in Cash and Cash Equivalents
(77,803
)
 
84,563

Cash and Cash Equivalents, Beginning of Period
527,435

 
248,204

Cash and Cash Equivalents, End of Period
$
449,632

 
$
332,767






The accompanying notes are an integral part of these condensed consolidated financial statements
and should be read in conjunction herewith.

5


SEACOR HOLDINGS INC.
NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
(unaudited)
1.
BASIS OF PRESENTATION AND ACCOUNTING POLICY
The condensed consolidated financial information for the three and nine months ended September 30, 2014 and 2013 has been prepared by the Company and has not been audited by its independent registered public accounting firm. The condensed consolidated financial statements include the accounts of SEACOR Holdings Inc. and its consolidated subsidiaries. In the opinion of management, all adjustments (consisting of normal recurring adjustments) have been made to fairly present the Company’s financial position as of September 30, 2014, its results of operations for the three and nine months ended September 30, 2014 and 2013, its comprehensive income for the three and nine months ended September 30, 2014 and 2013, its changes in equity for the nine months ended September 30, 2014, and its cash flows for the nine months ended September 30, 2014 and 2013. Results of operations for the interim periods presented are not necessarily indicative of operating results for the full year or any future periods.
Certain information and footnote disclosures normally included in financial statements prepared in accordance with generally accepted accounting principles in the United States have been condensed or omitted. These condensed consolidated financial statements should be read in conjunction with the financial statements and related notes thereto included in the Company’s Annual Report on Form 10-K for the year ended December 31, 2013.
Unless the context otherwise indicates, any reference in this Quarterly Report on Form 10-Q to the “Company” refers to SEACOR Holdings Inc. and its consolidated subsidiaries and any reference in this Quarterly Report on Form 10-Q to “SEACOR” refers to SEACOR Holdings Inc. Capitalized terms used and not specifically defined herein have the same meaning given those terms in the Company's Annual report on Form 10-K for the year ended December 31, 2013.
Discontinued Operations (see Note 15). The Company reports disposed businesses as discontinued operations when it has no continuing interest in the business. Discontinued operations includes the historical financial position, results of operations and cash flows of the operations previously reported as discontinued in the Company's Annual Report on Form 10-K for the year ended December 31, 2013.
Revenue Recognition. The Company recognizes revenue when it is realized or realizable and earned. Revenue is realized or realizable and earned when persuasive evidence of an arrangement exists, delivery has occurred or services have been rendered, the price to the buyer is fixed or determinable, and collectability is reasonably assured. Revenue that does not meet these criteria is deferred until the criteria are met. Deferred revenues, included in other current liabilities, for the nine months ended September 30 were as follows (in thousands):
 
2014
 
2013
Balance at beginning of period
$
6,592

 
$
6,592

Revenues deferred during the period
202

 

Balance at end of period
$
6,794

 
$
6,592

As of September 30, 2014 and 2013, the Company's deferred revenues related to the time charter of several offshore support vessels scheduled to be paid through the conveyance of an overriding royalty interest (the "Conveyance") in developmental oil and gas producing properties operated by a customer in the U.S. Gulf of Mexico. Payments under the Conveyance, and the timing of such payments, were contingent upon production and energy sale prices. On August 17, 2012, the customer filed a voluntary petition for chapter 11 bankruptcy, which was converted to chapter 7 in June 2014. The Company is vigorously defending its interest in connection with the bankruptcy filing; however, payments received under the Conveyance subsequent to August 17, 2012 and during the 90 days prior to the filing are subject to bankruptcy court approval. The Company will recognize revenues as approved by the bankruptcy court. All costs and expenses related to these charters were recognized as incurred.

6


Accumulated Other Comprehensive Loss. The components of accumulated other comprehensive loss were as follows:
 
 
SEACOR Holdings Inc. Stockholders' Equity
 
Noncontrolling
Interests
 
 
 
 
Foreign
Currency
Translation
Adjustments
 
Derivative
Gains (Losses) on
Cash Flow
Hedges, net
 
Other
 
Total
 
Foreign
Currency
Translation
Adjustments
 
Other
 
Other
Comprehensive
Loss
December 31, 2013
 
$
(927
)
 
$
(257
)
 
$
(8
)
 
$
(1,192
)
 
$
395

 
$
(5
)
 
 
Other comprehensive income (loss)
 
(1,558
)
 
483

 

 
(1,075
)
 
(183
)
 

 
$
(1,258
)
Income tax (expense) benefit
 
545

 
(169
)
 

 
376

 

 

 
376

Nine months ended September 30, 2014
 
$
(1,940
)
 
$
57

 
$
(8
)
 
$
(1,891
)
 
$
212

 
$
(5
)
 
$
(882
)
New Accounting Pronouncement. On May 28, 2014, the Financial Accounting Standards Board issued a comprehensive new revenue recognition standard that will supersede nearly all existing revenue recognition guidance under generally accepted accounting principles in the United States. The core principal of the new standard is that a company will recognize revenue when it transfers promised goods or services to customers in an amount that reflects the consideration to which the company expects to be entitled in exchange for those goods or services. The new standard is effective for annual and interim periods beginning after December 15, 2016 and early adoption is prohibited. The Company has not yet determined what impact, if any, the adoption of the new standard will have on its consolidated financial position, results of operations or cash flows.
Reclassifications. Certain reclassifications of prior period information have been made to conform to the presentation of the current period information. These reclassifications had no effect on net income as previously reported.
2.
FAIR VALUE MEASUREMENTS
The fair value of an asset or liability is the price that would be received to sell an asset or transfer a liability (an exit price) in the principal or most advantageous market for the asset or liability in an orderly transaction between market participants on the measurement date. The Company utilizes a fair value hierarchy that maximizes the use of observable inputs and minimizes the use of unobservable inputs when measuring fair value and defines three levels of inputs that may be used to measure fair value. Level 1 inputs are quoted prices in active markets for identical assets or liabilities. Level 2 inputs are observable inputs other than quoted prices included in Level 1 that are observable for the asset or liability, either directly or indirectly, including quoted prices for similar assets or liabilities in active markets, quoted prices in markets that are not active, inputs other than quoted prices that are observable for the asset or liability, or inputs derived from observable market data. Level 3 inputs are unobservable inputs that are supported by little or no market activity and are significant to the fair value of the assets or liabilities.
The Company’s financial assets and liabilities as of September 30, 2014 that are measured at fair value on a recurring basis were as follows (in thousands):
 
Level 1
 
Level 2
 
Level 3
ASSETS
 
 
 
 
 
Marketable securities(1)
$
43,286

 
$

 
$

Derivative instruments (included in other receivables)
1,419

 
5,958

 

Construction reserve funds and Title XI reserve funds
321,278

 

 

LIABILITIES
 
 
 
 
 
Short sale of marketable securities (included in other current liabilities)
10,351

 

 

Derivative instruments (included in other current liabilities)
3,268

 
864

 

 ______________________
(1)
Marketable security gains (losses), net include unrealized gains of $9.7 million and unrealized losses of $1.2 million for the three months ended September 30, 2014 and 2013, respectively, related to marketable security positions held by the Company as of September 30, 2014. Marketable security gains (losses), net include unrealized gains of $15.3 million and $9.4 million for the nine months ended September 30, 2014 and 2013, respectively, related to marketable security positions held by the Company as of September 30, 2014.

7


The estimated fair values of the Company’s other financial assets and liabilities as of September 30, 2014 were as follows (in thousands):
 
 
 
Estimated Fair Value
 
Carrying
Amount
 
Level 1
 
Level 2
 
Level 3
ASSETS
 
 
 
 
 
 
 
Cash, cash equivalents and restricted cash
$
463,288

 
$
463,288

 
$

 
$

Investments, at cost, in 50% or less owned companies (included in other
  assets)
13,728

 
see below
 
 
 
 
Notes receivable from third parties (included in other receivables and other assets)
22,592

 
see below
 
 
 
 
LIABILITIES
 
 
 
 
 
 
 
Long-term debt, including current portion(1)
881,948

 

 
1,015,744

 

______________________
(1)
The estimated fair value includes the conversion options on the Company's 2.5% and 3.0% Convertible Senior Notes.
The carrying value of cash, cash equivalents and restricted cash approximates fair value. The fair value of the Company’s long-term debt was estimated based upon quoted market prices or by using discounted cash flow analyses based on estimated current rates for similar types of arrangements. It was not practicable to estimate the fair value of the Company’s investments, at cost, in 50% or less owned companies because of the lack of quoted market prices and the inability to estimate fair value without incurring excessive costs. It was not practicable to estimate the fair value of the Company’s notes receivable from third parties as the overall returns are uncertain due to certain provisions for additional payments contingent upon future events. Considerable judgment was required in developing certain of the estimates of fair value and, accordingly, the estimates presented herein are not necessarily indicative of the amounts that the Company could realize in a current market exchange.
The Company’s non-financial assets and liabilities that were measured at fair value during the nine months ended September 30, 2014 were as follows (in thousands):
 
 
Level 1
 
Level 2
 
Level 3
ASSETS
 
 
 
 
 
 
Long-lived assets held for sale(1)
 
$

 
$
11,700

 
$

Investment in Witt O'Brien's LLC(2)
 

 
50,569

 

______________________
(1)
During the nine months ended September 30, 2014, the Company recognized impairment charges of $3.9 million related to two aircraft following the adjustment of their carrying value to fair value based on the expected sales price of each.
(2)
During the nine months ended September 30, 2014, the Company marked its equity investment in Witt O'Brien's LLC ("Witt O'Brien's") to fair value following its acquisition of a controlling interest (See Note 4). The investment's fair value was based on the Company's purchase price of the acquired interest.
3.
DERIVATIVE INSTRUMENTS AND HEDGING STRATEGIES
Derivative instruments are classified as either assets or liabilities based on their individual fair values. Derivative assets and liabilities are included in other receivables and other current liabilities, respectively, in the accompanying condensed consolidated balance sheets. The fair values of the Company’s derivative instruments as of September 30, 2014 were as follows (in thousands):
 
Derivative
Asset
 
Derivative
Liability
 
 
 
 
Forward currency exchange, option and future contracts
$

 
$
60

Interest rate swap agreements

 
744

Commodity swap, option and future contracts:
 
 
 
Exchange traded
1,418

 
3,268

Non-exchange traded
5,959

 
60

 
$
7,377

 
$
4,132

    

8


Cash Flow Hedges. As of September 30, 2014, the Company had no interest rate swap agreements designated as cash flow hedges. As of September 30, 2014, SCFCo, one of the Company’s Inland River Services 50% or less owned companies, had two interest rate swap agreements with maturities in 2015 that have been designated as cash flow hedges. These instruments call for this company to pay fixed rates of interest ranging from 1.53% to 1.62% on the aggregate amortized notional value of $16.9 million and receive a variable interest rate based on LIBOR on the aggregate amortized notional value. As of September 30, 2014, SeaJon, one of the Company’s Shipping Services 50% or less owned companies, had an interest rate swap agreement maturing in 2017 that has been designated as a cash flow hedge. The instrument calls for this company to pay a fixed interest rate of 2.79% on the amortized notional value of $35.6 million and receive a variable interest rate based on LIBOR on the amortized notional value. Subsequent to September 30, 2014, Sea-Cat Crewzer and Sea-Cat Crewzer II, two of the Company's Offshore Marine Services 50% or less owned companies, entered into interest rate swap agreements designated as cash flow hedges that mature in 2019. The first instrument calls for Sea-Cat Crewzer to pay a fixed rate of interest of 1.52% on the amortized notional value of $24.8 million and receive a variable interest rate based on LIBOR on the amortized notional value. The second instrument calls for Sea-Cat Crewzer II to pay a fixed rate of interest of 1.52% on the amortized notional value of $28.0 million and receive a variable interest rate based on LIBOR on the amortized notional value. By entering into these interest rate swap agreements, the Company's 50% or less owned companies have converted the variable LIBOR component of certain of their outstanding borrowings to a fixed interest rate.
Other Derivative Instruments. The Company recognized gains (losses) on derivative instruments not designated as hedging instruments for the nine months ended September 30 as follows (in thousands):
 
2014
 
2013
Options on equities and equity indices
$
22

 
$
(4,132
)
Forward currency exchange, option and future contracts
62

 
(439
)
Interest rate swap agreements
(169
)
 
253

Commodity swap, option and future contracts:
 
 
 
Exchange traded
(2,996
)
 
368

Non-exchange traded
400

 
715

 
$
(2,681
)
 
$
(3,235
)
The Company holds positions in publicly traded equity options that convey the right or obligation to engage in a future transaction on the underlying equity security or index. The Company’s investment in equity options primarily includes positions in energy, marine, transportation and other related businesses. These contracts are typically entered into to mitigate the risk of changes in the market value of marketable security positions that the Company is either about to acquire, has acquired or is about to dispose of.
The Company enters and settles forward currency exchange, option and future contracts with respect to various foreign currencies. As of September 30, 2014, the outstanding forward currency exchange contracts translated into a net purchase of foreign currencies with an aggregate U.S. dollar equivalent of $3.5 million. These contracts enable the Company to buy currencies in the future at fixed exchange rates, which could offset possible consequences of changes in currency exchange rates with respect to the Company’s business conducted outside of the United States. The Company generally does not enter into contracts with forward settlement dates beyond twelve to eighteen months.
The Company and certain of its 50% or less owned companies have entered into interest rate swap agreements for the general purpose of providing protection against increases in interest rates, which might lead to higher interest costs. As of September 30, 2014, the interest rate swaps held by the Company or its 50% or less owned companies were as follows:
The Company has various interest rate swap agreements with maturities ranging from 2014 through 2018 that call for the Company to pay fixed interest rates ranging from 3.00% to 3.05% on an aggregate amortized notional value of $32.3 million and receive a variable interest rate based on LIBOR or Euribor on these aggregate amortized notional values.
Dynamic Offshore, an Offshore Marine Services 50% or less owned company, has an interest rate swap agreement maturing in 2018 that calls for this company to pay a fixed interest rate of 1.30% on the amortized notional value of $95.8 million and receive a variable interest rate based on LIBOR on the amortized notional value.
OSV Partners, an Offshore Marine Services 50% or less owned company, has two interest rate swap agreements maturing in 2020 that call for this company to pay fixed interest rates ranging from 1.89% to 2.27% on the aggregate amortized notional value of $32.6 million and receive a variable interest rate based on LIBOR on the amortized notional value.

9


Sea-Cat Crewzer, an Offshore Marine Services 50% or less owned company, has an interest rate swap agreement maturing in 2015 that was dedesignated as a cash flow hedge in July 2014. This instrument calls for this company to pay a fixed interest rate of 1.48% on the amortized notional value of $15.7 million and receive a variable interest rate based on LIBOR on the amortized notional value.
Dorian, a Shipping Services 50% or less owned company, has six interest rate swap agreements with maturities ranging from 2018 to 2020 that call for this company to pay fixed rates of interest ranging from 2.96% to 5.40% on the aggregate amortized notional value of $122.6 million and receive a variable interest rate based on LIBOR on the aggregate amortized notional value.
The Company enters and settles positions in various exchange and non-exchange traded commodity swap, option and future contracts. ICP enters into exchange traded positions (primarily corn) to protect its raw material and finished goods inventory balance from market changes. In the Company’s agricultural commodity trading and logistics business, fixed price future purchase and sale contracts for sugar are included in the Company’s non-exchange traded derivative positions. The Company enters into exchange traded positions to protect these purchase and sale contracts as well as its inventory balances from market changes. As of September 30, 2014, the net market exposure to corn and sugar under these contracts was not material. The Company also enters into exchange traded positions (primarily natural gas, heating oil, crude oil, gasoline, corn and sugar) to provide value to the Company should there be a sustained decline in the price of commodities that could lead to a reduction in the market values and cash flows of the Company’s Offshore Marine Services, Inland River Services and Shipping Services businesses. As of September 30, 2014, none of these types of positions were outstanding.
4.
BUSINESS ACQUISITIONS
C-Lift Acquisition. On June 6, 2013, the Company acquired a controlling interest in C-Lift through the acquisition of its partner's 50% equity interest for $13.3 million in cash. C-Lift owned and operated two liftboats in the U.S. Gulf of Mexico. The Company performed a fair value analysis and the purchase price was allocated to the acquired assets and liabilities based on their fair values resulting in no goodwill being recorded. The preliminary fair value analysis was finalized in March 2014.
Witt O'Brien's. On July 11, 2014, the Company acquired a controlling interest in Witt O'Brien's, a global leader in preparedness, crisis management, and disaster response and recovery, through the acquisition of its partner's 45.8% equity interest for $35.4 million (see Note 6). The Company performed a fair value analysis and the purchase price was allocated to the acquired assets and liabilities based on their fair values resulting in $45.0 million of goodwill being recorded. The preliminary fair value analysis is pending completion of a final valuation for the acquired assets and liabilities.
Purchase Price Allocation. The allocation of the purchase price for the Company’s acquisition for the nine months ended September 30, 2014 was as follows (in thousands):
 
 
2014
Trade and other receivables
 
$
31,079

Other current assets
 
1,925

Property and Equipment
 
519

Investments, at Equity, and Advances to 50% or Less Owned Companies
 
(49,968
)
Goodwill
 
44,967

Intangible Assets (primarily customer relationships)
 
24,901

Other Assets
 
111

Accounts payable
 
(1,709
)
Other current liabilities
 
(12,274
)
Long-Term Debt
 
(3,266
)
Deferred Income Taxes
 
91

Other Liabilities
 
(1,376
)
Purchase price(1)
 
$
35,000

______________________
(1)
Purchase price is net of cash acquired of $0.4 million.

10


5.
EQUIPMENT ACQUISITIONS, DISPOSITIONS AND DEPRECIATION AND IMPAIRMENT POLICIES
During the nine months ended September 30, 2014, capital expenditures were $311.1 million, including $151.0 million of progress payments toward the construction of three U.S.-flag product tankers. Equipment deliveries during the period included three crew boats, two supply boats, one wind farm utility vessel, 65 inland river dry-cargo barges, one inland river towboat and one foreign-flag short-sea container/RORO vessel.
During the nine months ended September 30, 2014, the Company sold six crew boats, four supply boats, one liftboat, one wind farm utility vessel, 60 dry-cargo barges, three inland river towboats, one U.S.-flag product tanker, which was leased back, one foreign-flag short-sea container/RORO vessel and other property and equipment for net proceeds of $207.7 million ($182.1 million in cash and $25.6 million in seller financing) and gains of $93.0 million, of which $39.2 million were recognized currently and $53.8 million were deferred. In addition, the Company recognized previously deferred gains of $3.5 million. The Company also received deposits of $5.8 million related to future dry-cargo barge sales.
The Company has sold certain equipment to its 50% or less owned companies, entered into vessel sale-leaseback transactions with finance companies, and provided seller financing on sales of its equipment to third parties and its 50% or less owned companies. A portion of the gains realized from these transactions were deferred and recorded in deferred gains and other liabilities in the accompanying condensed consolidated balance sheets. Deferred gain activity related to these transactions for the nine months ended September 30 was as follows (in thousands):
 
2014
 
2013
Balance at beginning of period
$
124,763

 
$
111,514

Adjustments to deferred gains arising from asset sales
53,832

 
14,609

Amortization of deferred gains included in operating expenses as a reduction to rental expense
(12,196
)
 
(7,707
)
Amortization of deferred gains included in gains on asset dispositions and impairments, net
(3,484
)
 
(2,146
)
Balance at end of period
$
162,915

 
$
116,270

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 assets that have already exceeded the Company’s useful life policy, in which case the Company depreciates such assets based on its best estimate of remaining useful life, typically the next survey or certification date.
As of September 30, 2014, the estimated useful life (in years) of each of the Company’s major categories of new equipment was as follows:
Offshore support vessels (excluding wind farm utility)
20
Wind farm utility vessels
10
Inland river dry-cargo and deck barges
20
Inland river liquid tank barges
25
Inland river towboats
25
U.S.-flag product tankers
25
Short-sea Container/RORO(1) vessels
20
Harbor tugs
25
Ocean liquid tank barges
25
Terminal and manufacturing facilities
20
______________________ 
(1)
Roll on/Roll off ("RORO").
The Company performs an impairment analysis of long-lived assets used in operations, including intangible assets, when indicators of impairment are present. If the carrying value of the assets is not recoverable, as determined by the estimated undiscounted cash flows, the carrying value of the assets is reduced to fair value. Generally, fair value is determined using valuation techniques, such as expected discounted cash flows or appraisals, as appropriate. During the nine months ended September 30, 2014, the Company recognized impairment charges of $3.9 million related to two aircraft.

11


6.
INVESTMENTS, AT EQUITY, AND ADVANCES TO 50% OR LESS OWNED COMPANIES
Mexmar. Mexmar operates offshore support vessels in Mexico. During the nine months ended September 30, 2014, Mexmar purchased two offshore support vessels from the Company for $32.0 million ($6.4 million in cash and $25.6 million in seller financing). During the nine months ended September 30, 2014, Mexmar repaid $6.7 million of the seller financing.
SEA-Cat Crewzer II. Sea-Cat Crewzer II was formed to own and operate two high speed catamaran crew boats. During the nine months ended September 30, 2014, the Company received distributions of $14.0 million.
SEA-Cat Crewzer. Sea-Cat Crewzer was formed to own and operate two high speed catamaran crew boats. During the nine months ended September 30, 2014, the Company received distributions of $3.2 million.
OSV Partners. OSV Partners was formed to own and operate six offshore support vessels. During the nine months ended September 30, 2014, the Company contributed additional capital of $3.5 million to fund certain capital acquisitions. During the nine months ended September 30, 2014, OSV Partners purchased two offshore support vessels from the Company for $27.7 million in cash.
SCFCo Holdings. SCFCo Holdings was established to operate towboats and dry-cargo barges on the Parana-Paraguay Rivers in South America and a terminal facility at Port Ibicuy, Argentina. During the nine months ended September 30, 2014, the Company and its partner each contributed additional capital of $16.2 million and provided shareholder loans of $23.1 million. As of September 30, 2014, the Company had outstanding loans to SCFCo Holdings of $27.9 million. During the nine months ended September 30, 2014, SCFCo Holdings purchased 60 dry-cargo barges and three inland river towboats from the Company for $41.4 million and repaid $1.0 million of working capital advances.
SeaJon. SeaJon owns an articulated tug-barge operating in the Great Lakes trade. During the nine months ended September 30, 2014, the Company and its partner each contributed additional capital of $2.3 million to fund certain capital acquisitions.
Avion. Avion is a distributor of aircraft and aircraft related parts. During the nine months ended September 30, 2014, Avion repaid $4.0 million of outstanding notes to the Company.
Witt-O'Brien's. Witt-O'Brien's is a global leader in preparedness, crisis management, and disaster response and recovery. During the nine months ended September 30, 2014, the Company received distributions of $0.4 million from Witt-O'Brien's. On July 11, 2014, the Company acquired a controlling interest in Witt-O'Brien's through the acquisition of its partner's 45.8% equity interest for $35.4 million (see Note 4).
Cleancor. On August 20, 2013, CLEANCOR Energy Solutions LLC ("Cleancor") was established to be a full service solution provider delivering clean fuel to end users. During the nine months ended September 30, 2014, the Company contributed capital of $4.8 million to Cleancor to fund its start-up operations and provide capital for future investments.
Other. During the nine months ended September 30, 2014, the Company received a capital distribution of $2.1 million from one of Inland River Services' 50% or less owned companies, made capital contributions of $1.2 million, received distributions of $0.2 million and loaned $0.7 million to certain Offshore Marine Services' 50% or less owned companies and contributed capital of $0.2 million and loaned $1.5 million to certain of its industrial aviation businesses in Asia.
Guarantees. The Company has guaranteed the payment of amounts owed by one of its 50% or less owned companies under a vessel charter, has guaranteed amounts owed under banking facilities by certain of its 50% or less owned companies, and has guaranteed a construction contract for one of its 50% or less owned companies. As of September 30, 2014, the total amount guaranteed by the Company under these arrangements was $109.1 million. In addition, as of September 30, 2014, the Company had uncalled capital commitments to two of its 50% or less owned companies for a total of $2.3 million.
7.
COMMITMENTS AND CONTINGENCIES
As of September 30, 2014, the Company's unfunded capital commitments were $520.5 million and included: $201.6 million for 18 offshore support vessels; $1.3 million for two inland river tank barges; $3.3 million for four inland river towboats; $230.2 million for three U.S.-flag product tankers; $71.3 million for one U.S.-flag articulated tug-barge; and $12.8 million for other equipment and improvements. These commitments are payable as follows: $48.0 million is payable during the remainder of 2014; $426.0 million is payable during 2015-2016; and $46.5 million is payable during 2017-2018.
On July 20, 2010, two individuals purporting to represent a class commenced a civil action in the Civil District Court for the Parish of Orleans in the State of Louisiana, John Wunstell, Jr. and Kelly Blanchard v. BP, et al., No. 2010-7437 (Division K) (the “Wunstell Action”), in which they assert, among other theories, that Mr. Wunstell suffered injuries as a result of his exposure to certain noxious fumes and chemicals in connection with the provision of remediation, containment and response services by ORM during the Deepwater Horizon oil spill response and clean-up in the U.S Gulf of Mexico. The action now is part of the overall multi-district litigation, In re Oil Spill by the Oil Rig "Deepwater Horizon", MDL No. 2179 filed in the U.S. District Court

12


for the Eastern District of Louisiana ("MDL"). The complaint also seeks to establish a “class-wide court-supervised medical monitoring program” for all individuals “participating in BP's Deepwater Horizon Vessels of Opportunity Program and/or Horizon Response Program” who allegedly experienced injuries similar to those of Mr. Wunstell. The Company believes this lawsuit has no merit and will continue to vigorously defend the action and pursuant to contractual agreements with the responsible party, the responsible party has agreed, subject to certain potential limitations, to indemnify and defend ORM in connection with the Wunstell Action and claims asserted in the MDL, discussed further below. Although the Company is unable to estimate the potential exposure, if any, resulting from this matter, the Company does not expect it will have a material effect on the Company's consolidated financial position, results of operations or cash flows.
On December 15, 2010, NRC, a subsidiary of the Company prior to the SES Business Transaction, and ORM were named as defendants in one of the several consolidated “master complaints” that have been filed in the overall MDL. The "B3" master complaint naming ORM and NRC asserts various claims on behalf of a putative class against multiple defendants concerning the clean-up activities generally, and the use of dispersants specifically. By court order, the Wunstell Action has been stayed as a result of the filing of the referenced master complaint. The Company believes that the claims asserted against ORM and NRC in the master complaint have no merit and on February 28, 2011, ORM and NRC moved to dismiss all claims against them in the master complaint on legal grounds. On September 30, 2011, the Court granted in part and denied in part the motion to dismiss that ORM and NRC had filed (an amended decision was issued on October 4, 2011 that corrected several grammatical errors and non-substantive oversights in the original order). Although the Court refused to dismiss the referenced master complaint in its entirety at that time, the Court did recognize the validity of the “derivative immunity” and “implied preemption” arguments that ORM and NRC advanced and directed ORM and NRC to (i) conduct limited discovery to develop evidence to support those arguments and (ii) then re-assert the arguments. The Court did, however, dismiss all state-law claims and certain other claims that had been asserted in the referenced master complaint, and dismissed the claims of all plaintiffs that have failed to allege a legally-sufficient injury. A schedule for limited discovery and motion practice was established by the Court and, in accordance with that schedule, ORM and NRC filed for summary judgment re-asserting their derivative immunity and implied preemption arguments on May 18, 2012. Those motions were argued on July 13, 2012 and are still pending decision. On July 17, 2014, the Court issued a pretrial order that established a protocol for disclosures clarifying the basis for the “B3” claims asserted against the Clean-Up Responder Defendants, including ORM and NRC, in the MDL. Under this protocol, Plaintiffs who satisfy certain criteria and believe they have specific evidence in support of their claims, including that any Clean-Up Responder Defendant(s) failed to act pursuant to the authority and direction of the federal government in conducting Deepwater Horizon oil spill remediation and clean-up operations, must submit a sworn statement or face dismissal. Plaintiffs’ deadline to serve such sworn statements in support of their claims was September 22, 2014, with the exception of several Plaintiffs who were granted an extension until October 10, 2014. The Clean-Up Responder Defendants’ deadline to work with the Plaintiffs’ Steering Committee in the MDL and provide the Court with a detailed listing regarding compliance with the pretrial order is November 14, 2014. In addition to the indemnity provided to ORM, pursuant to contractual agreements with the responsible party, the responsible party has agreed, subject to certain potential limitations, to indemnify and defend ORM and NRC in connection with these claims in the MDL. Although the Company is unable to estimate the potential exposure, if any, resulting from this matter, the Company does not expect it will have a material effect on the Company's consolidated financial position, results of operations or cash flows.
Subsequent to the filing of the referenced master complaint, ten additional individual civil actions have been filed in or removed to the U.S. District Court for the Eastern District of Louisiana concerning the clean-up activities generally, which name the Company, ORM and/or NRC as defendants or third-party defendants and are part of the overall MDL. By court order, all of these additional individuals' cases have been stayed until further notice. On April 8, 2011, ORM was named as a defendant in Johnson Bros. Corporation of Louisiana v. BP, PLC, et al., No. 2:11-CV-00781 (E.D. La.), which is a suit by an individual business seeking damages allegedly caused by a delay on a construction project alleged to have resulted from the clean-up operations. On April 13, 2011, the Company was named as a defendant in Mason v. Seacor Marine, LLC, No. 2:11-CV-00826 (E.D. La.), an action in which plaintiff, a former employee, alleges sustaining personal injuries in connection with responding to the explosion and fire, but also in the months thereafter in connection with the clean-up of oil and dispersants while a member of the crew of the M/V Seacor Vanguard. Although the case is subject to the MDL Court’s stay of individual proceedings, the employee moved to sever his case from the MDL on July 16, 2012, which the Court denied on March 5, 2013. The employee filed a motion asking the Court to reconsider, which was denied on May 3, 2013, and the employee filed a Notice of Appeal to the U.S. Court of Appeals for the Fifth Circuit (“Fifth Circuit”) on May 22, 2013. On July 24, 2013, the Company filed a motion to dismiss for lack of appellate jurisdiction, which was granted on August 16, 2013. The same company employee has also brought a claim in the M/V Seacor Vanguard vessel’s limitation action in the MDL which relates to any actions that may have been taken by vessels owned by the Company to extinguish the fire. On October 20, 2014, the Company moved for summary judgment, seeking dismissal with prejudice of all of the company employee’s claims in the MDL in light of the Court’s prior rulings. On April 15, 2011, ORM and NRC were named as defendants in James and Krista Pearson v. BP Exploration & Production, Inc. ("BP Exploration"), et al., No. 2:11-CV-00863 (E.D. La.), which is a suit by a husband and wife, who allegedly participated in the clean-up effort and are seeking damages for personal injury, property damage to their boat, and amounts allegedly due under contract. On April 15, 2011, ORM and NRC were named as defendants in Thomas Edward Black v. BP Exploration, et al., No. 2:11-CV-00867 (E.D. La.), which is a suit by an individual who is seeking damages for lost income because he allegedly could not find work in the fishing industry

13


after the oil spill. On April 20, 2011, a complaint was filed in Darnell Alexander, et al. v. BP, PLC, et al., No. 2:11-CV-00951 (E.D. La.) on behalf of 117 individual plaintiffs that seek to adopt the allegations made in the referenced master complaint against ORM and NRC (and the other defendants). Plaintiffs in this matter have since been granted leave to amend their complaint to include 410 additional individual plaintiffs. On October 3, 2012, ORM and NRC were served with a Rule 14(c) Third-Party Complaint by Jambon Supplier II, L.L.C. and Jambon Marine Holdings L.L.C. in their Limitation of Liability action, In the Matter of Jambon Supplier II, L.L.C., et al., No. 2:12-CV-00426 (E.D. La.). This Third-Party Complaint alleges that if claimant David Dinwiddie, who served as a clean-up crewmember aboard the M/V JAMBON SUPPLIER II vessel during the clean-up efforts, was injured as a result of his exposure to dispersants and chemicals during the course and scope of his employment, then said injuries were caused by the third-party defendants. On November 25, 2012, ORM was named as a defendant in Victoria Sanchez v. American Pollution Control Corp. et al., No. 2:12-CV-00164 (E.D. La.), a maritime suit filed by an individual who allegedly participated in the clean-up effort and sustained personal injuries during the course of such employment. On December 17, 2012, the Court unsealed a False Claims Act lawsuit naming ORM as a defendant, Dillon v. BP, PLC et al., No. 2:12-CV-00987 (E.D. La.)., which is a suit by an individual seeking damages and penalties arising from alleged false reports and claims made to the federal government with respect to the amount of oil burned and dispersed during the clean-up. The federal government has declined to intervene in this suit. On April 8, 2013, the Company, ORM, and NRC were named as defendants in William and Dianna Fitzgerald v. BP Exploration et al., No. 2:13-CV-00650 (E.D. La.), which is a suit by a husband and wife whose son allegedly participated in the clean-up effort and became ill as a result of his exposure to oil and dispersants. Finally, on April 17, 2013, ORM was named as a defendant in Danos et al. v. BP America Production Co. et al., No. 2:13-CV-03747 (removed to E.D. La.), which is a suit by eight individuals seeking damages for dispersant exposure either as a result of their work during clean-up operations or as a result of their residence in the Gulf. The Company is unable to estimate the potential exposure, if any, resulting from these matters but believes they are without merit and does not expect that they will have a material effect on its consolidated financial position, results of operations or cash flows.
On February 18, 2011, Triton Asset Leasing GmbH, Transocean Holdings LLC, Transocean Offshore Deepwater Drilling Inc., and Transocean Deepwater Inc. (collectively “Transocean”) named ORM and NRC as third-party defendants in a Rule 14(c) Third-Party Complaint in Transocean's own Limitation of Liability Act action, which is part of the overall MDL, tendering to ORM and NRC the claims in the referenced master complaint that have already been asserted against ORM and NRC. Transocean, Cameron International Corporation, Halliburton Energy Services, Inc., and M-I L.L.C. also filed cross-claims against ORM and NRC for contribution and tort indemnity should they be found liable for any damages in Transocean's Limitation of Liability Act action and ORM and NRC have asserted counterclaims against those same parties for identical relief. Weatherford U.S., L.P. and Weatherford International, Inc. (collectively "Weatherford") had also filed cross-claims against ORM and NRC, but moved to voluntarily dismiss these cross-claims without prejudice on February 8, 2013. The Court granted Weatherford's motion that same day. Transocean's limitation action, and thus the remainder of the aforementioned cross-claims, remains pending. As indicated above, the Company is unable to estimate the potential exposure, if any, resulting from these actions but believes they are without merit and does not expect that these matters will have a material effect on its consolidated financial position, results of operations or cash flows.
On November 16, 2012, 668 individuals who served as beach clean-up workers in Escambia County, Florida during the Deepwater Horizon oil spill response commenced a civil action in the Circuit Court for the First Judicial Circuit of Florida, in and for Escambia County, Abney et al. v. Plant Performance Services, LLC et al., No. 2012-CA-002947, in which they allege, among other things, that ORM and other defendants engaged in the contamination of Florida waters and beaches in violation of Florida Statutes Chapter 376 and injured the plaintiffs by exposing them to dispersants during the course and scope of their employment. The case was removed to the U.S. District Court for the Northern District of Florida on January 13, 2013, Abney et al. v. Plant Performance Services, LLC et al., No. 3:13-CV-00024 (N.D. Fla.), and on January 16, 2013, the United States Judicial Panel on Multidistrict Litigation (“JPML”) issued a Conditional Transfer Order (“CTO”) transferring the case to the MDL, subject to any timely-filed notice of objection from the plaintiffs. Upon receipt of a notice of objection from the plaintiffs, a briefing schedule was set by the JPML, and so a stay of proceedings and suspension of deadlines was sought and obtained by the Court in the U.S. District Court for the Northern District of Florida. Following briefing before the JPML, the case was transferred to the U.S. District Court for the Eastern District of Louisiana and consolidated with the MDL on April 2, 2013. On April 22, 2013, a companion case to this matter was filed in the U.S. District Court for the Northern District of Florida, Abood et al. v. Plant Performance Services, LLC et al., No. 3:13-CV-00284 (N.D. Fla.), which alleges identical allegations against the same parties but names an additional 174 plaintiffs, all of whom served as clean-up workers in various Florida counties during the Deepwater Horizon oil spill response. A CTO was issued by the JPML on May 2, 2013, no objection was filed by the plaintiffs, and the case was transferred to the U.S. District Court for the Eastern District of Louisiana and consolidated with the MDL on May 10, 2013. By court order, both of these matters have been stayed until further notice. The Company is unable to estimate the potential exposure, if any, resulting from these matters but believes they are without merit and does not expect that these matters will have a material effect on its consolidated financial position, results of operations or cash flows.
Separately, on March 2, 2012, the Court announced that BP Exploration and BP America Production Company ("BP America") (collectively "BP") and the plaintiffs had reached an agreement on the terms of two proposed class action settlements

14


that will resolve, among other things, plaintiffs' economic loss claims and clean-up related claims against BP. The parties filed their proposed settlement agreements on April 18, 2012 along with motions seeking preliminary approval of the settlements. The Court held a hearing on April 25, 2012 to consider those motions and preliminarily approved both settlements on May 2, 2012. A final fairness hearing took place on November 8, 2012. The Court granted final approval to the Economic and Property Damages Class Action Settlement ("E&P Settlement") on December 21, 2012, and granted final approval to the Medical Benefits Class Action Settlement ("Medical Settlement") on January 11, 2013. Both class action settlements were appealed to the Fifth Circuit. The Fifth Circuit affirmed the MDL Court's decision concerning the E&P Settlement on January 10, 2014, and also affirmed the MDL Court's decision concerning the interpretation of the E&P Settlement with respect to business economic loss claims on March 3, 2014. The appeal of the Medical Settlement, on the other hand, was voluntarily dismissed and the Medical Settlement became effective on February 12, 2014. The deadline for bringing a claim to the Medical Benefits Claims Administrator is one year from the effective date of the Settlement. Although neither the Company, ORM, or NRC are parties to the settlement agreements, the Company, ORM, and NRC are listed as released parties on the releases accompanying both settlement agreements. Consequently, barring any further successful appeal, class members who did not file timely requests for exclusion will be barred from pursuing economic loss, property damage, personal injury, medical monitoring, and/or other released claims against the Company, ORM, and NRC. The Company believes these settlements have reduced the Company and ORM's potential exposure, if any, from some of the pending actions described above, and continues to evaluate the settlements' impacts on these cases.
On January 29, 2013, HEPACO, LLC ("HEPACO"), served a demand for arbitration upon ORM, in which HEPACO claimed that ORM owed HEPACO an additional fee of $20,291,178.92 under the parties' Management Services Agreement (“MSA”), dated June 1, 2010. HEPACO claimed that the MSA required ORM to pay HEPACO an additional fee of 30% of total charges paid under the MSA ("Surcharge") to compensate HEPACO for U.S. Longshoremen's and Harbor Workers' insurance or Jones Act insurance and related risks attendant to the work when a contract requires labor to be performed over, adjoining and/or in water. On June 23, 2014, ORM and HEPACO entered into an agreement to settle HEPACO's claims in the arbitration without a material impact to the Company's results of operations or cash flows and, on July 2, 2014, the HEPACO arbitration was dismissed with prejudice.
ORM is defending against two collective action lawsuits, each asserting failure to pay overtime with respect to individuals who provided service on the Deepwater Horizon oil spill response (the “DPH FLSA Actions”) under the Fair Labor Standards Act (“FLSA”). These cases, Dennis Prejean v. O'Brien's Response Management Inc. (E.D. La., Case No.: 2:12-cv-01045) (the “Prejean Action”) and Himmerite et al. v. O'Brien's Response Management Inc. et al. (E.D. La., Case No.: 2:12-cv-01533) (the “Himmerite Action”), were each brought on behalf of certain individuals who worked on the Deepwater Horizon oil spill response and who were classified as independent contractors. The Prejean and Himmerite Actions were each filed in the United States District Court for the Eastern District of Louisiana and then subsequently consolidated with the overall MDL, in which the Himmerite Action was stayed pursuant to procedures of the MDL. However, both the Prejean and Himmerite Actions were severed from the MDL on September 19, 2013, and referred to a Magistrate Judge for pretrial case management, including issuing a scheduling order, overseeing discovery, and any other preliminary matters. On October 31, 2013, ORM filed an answer in the Himmerite Action. In the Himmerite Action, pursuant to an earlier tolling order entered by the Court, the limitations periods for potential plaintiffs to opt-in to the action has been tolled pending further action by the Court. In the Prejean Action, ORM has answered the complaint and a scheduling order has been issued. On November 6, 2013, the Court conditionally certified a collective class in the Prejean Action. On December 9, 2013 the Court approved a jointly-submitted form notice and authorized the issuance of notice to all members of the conditionally certified class in the Prejean Action. On December 20, 2013, ORM served plaintiffs’ counsel with a list containing information for approximately 330 potential class members in the Prejean Action. The deadline for plaintiffs to file executed consent forms with the Court has expired. As of February 28, 2014 the Court-ordered deadline for potential class members to opt into the class, 142 individuals have opted in. Although the Court has conditionally certified the Prejean class, the Court has not made a final ruling on whether a class exists. The Company intends to vigorously defend its position that a class should not be certified, and intends on filing a motion to decertify the Prejean class. The Court has also not yet ruled on any of the merits of Plaintiffs’ claims. The Company does not expect the potential exposure, if any, resulting from these DPH FLSA Actions will have a material impact on the Company's results of operations or cash flows, but believes the actions are without merit and will continue to vigorously defend against them.
In a related action, Baylor Singleton et. al. v. O'Brien's Response Management Inc. et. al. (E.D. La., Case No.: 2:12-cv-01716) (the “Singleton Action”), which was also filed in the United States District Court for the Eastern District of Louisiana and in which plaintiffs alleged claims similar to those alleged in the Prejean and Himmerite Actions, the parties reached a full and final settlement agreement on February 13, 2014 with respect to all of the Plaintiff’s individual claims for an undisclosed amount. On April 11, 2014, the Court approved the parties’ settlement and dismissed the Singleton Action with prejudice in its entirety. The Court also ordered that the tolling order which had been entered in the Singleton Action expired as of April 11, 2014.
    

15


In the course of the Company's business, it may agree to indemnify the counterparty to an agreement. If the indemnified party makes a successful claim for indemnification, the Company would be required to reimburse that party in accordance with the terms of the indemnification agreement. Indemnification agreements generally are subject to threshold amounts, specified claim periods and other restrictions and limitations.
In connection with the SES Business Transaction, the Company remains contingently liable for certain obligations, including potential liabilities relating to work performed in connection with the Deepwater Horizon oil spill response. Such potential liabilities may not exceed the consideration received by the Company for the SES Business Transaction and the Company currently is indemnified under contractual agreements with BP.
During the nine months ended September 30, 2014, the Company received net litigation settlement proceeds of $14.7 million from an equipment supplier relating to the May 2008 mechanical malfunction and fire onboard the SEACOR Sherman, an anchor handling towing supply vessel then under construction. Upon settlement of the litigation, the Company recognized a gain of $14.7 million, which is included in other income (expense) in the accompanying condensed consolidated statements of income.
In the normal course of its business, the Company becomes involved in various other litigation matters including, among other things, 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.
8.
MULTI-EMPLOYER PENSION PLANS
During the nine months ended September 30, 2014, the Company received notification from the American Maritime Officers Pension Plan (the "AMOPP”) that the Company's withdrawal liability as of September 30, 2013 was $46.5 million based on an actuarial valuation performed as of that date. That liability may change in future years based on various factors, primarily employee census. As of September 30, 2014, the Company has no intention to withdraw from the AMOPP and no deficit amounts have been invoiced. Depending upon the results of the future actuarial valuations and the ten-year rehabilitation plan, it is possible that the AMOPP will experience further funding deficits, requiring the Company to recognize additional payroll related operating expenses in the periods invoices are received or contribution levels are increased.
9.
LONG-TERM DEBT
As of September 30, 2014, the Company had outstanding letters of credit totaling $18.2 million with various expiration dates through 2018.
During the nine months ended September 30, 2014, the Company made scheduled payments on long-term debt of $9.6 million and made net repayments of $3.1 million under inventory financing arrangements. In addition, Witt O'Brien's received advances of $11.5 million and made repayments of $9.4 million on its revolving credit facility (see Note 4).
SEACOR’s Board of Directors has previously authorized the Company to purchase any or all of its 7.375% Senior Notes due 2019, which may be acquired through open market purchases, privately negotiated transactions or otherwise, depending on market conditions. During the nine months ended September 30, 2014, the Company did not repurchase any of its 7.375% Senior Notes due 2019.
10.
STOCK REPURCHASES
SEACOR’s Board of Directors previously approved a securities repurchase plan that authorizes the Company to acquire shares of SEACOR common stock, par value $0.01 per share (“Common Stock”), which may be acquired through open market purchases, privately negotiated transactions or otherwise, depending on market conditions. During the nine months ended September 30, 2014, the Company acquired 1,609,496 shares of Common Stock for treasury for an aggregate purchase price of $127.2 million. During the nine months ended September 30, 2014, SEACOR’s Board of Directors increased the Company's authority to repurchase Common Stock to $150.0 million. As of September 30, 2014, the remaining authority under the repurchase plan was $90.5 million.
On September 23, 2014, the Company executed a purchase agreement whereby the Company appointed Goldman, Sachs & Co. as broker to purchase Common Stock in compliance with the requirements of Rule 10b5-1(c)(l)(i) for the period October 1, 2014 through October 28, 2014. Subsequent to September 30, 2014 and through October 24, 2014, the Company purchased 472,200 shares of Common Stock for treasury for an aggregate purchase price of $35.7 million.

16


11.
NONCONTROLLING INTERESTS IN SUBSIDIARIES
Noncontrolling interests in the Company's consolidated subsidiaries were as follows (in thousands):
 
Noncontrolling Interests
 
September 30, 2014
 
December 31, 2013
Offshore Marine Services:
 
 
 
 
 
 
 
Windcat Workboats Ltd.
25%
 
$
7,610

 
$
7,541

Other
1.8
%
33.3%
 
1,341

 
1,600

Inland River Services:
 
 
 
 
 
 
 
Other
3.0
%
51.8%
 
954

 
2,612

Shipping Services:
 
 
 
 
 
 
 
Sea-Vista
49%
 
77,222

 

Illinois Corn Processing
30%
 
18,413

 
10,894

Other
5.0
%
18.9%
 
2,022

 
1,929

 
 
 
 
 
$
107,562

 
$
24,576

Windcat Workboats. Windcat Workboats Holdings Ltd. (“Windcat Workboats”) owns and operates the Company’s wind farm utility vessels that are primarily used to move personnel and supplies in the major offshore wind markets of Europe. As of September 30, 2014, the net assets of Windcat Workboats were $30.4 million. During the nine months ended September 30, 2014, the net income of Windcat Workboats was $1.0 million, of which $0.2 million was attributable to noncontrolling interests. During the nine months ended September 30, 2013, the net loss of Windcat Workboats was $0.9 million, of which $0.2 million was attributable to noncontrolling interests.
SEA-Vista. On May 2, 2014, the Company issued a 49% noncontrolling interest to a financial investor in certain of its subsidiaries (collectively "SEA-Vista") that own and operate the Company's fleet of U.S.-flag product tankers used in the U.S. coastwise trade of crude oil, petroleum and specialty chemical products for $145.7 million, net of $3.2 million in issue costs. SEA-Vista also holds the Company's contracts for the construction of three 50,000 DWT (deadweight tonnage) product tankers with expected deliveries in May 2016, October 2016 and March 2017, as well as its Title XI bonds payable and reserve funds and certain other working capital. The Company has evaluated the noncontrolling interest's protective rights in SEA-Vista, its ownership interest, and the underlying terms and conditions that govern SEA-Vista's operations and determined that the Company controls SEA-Vista. As a result, the Company has consolidated the financial position, operating results and cash flows of SEA-Vista. As of September 30, 2014, the net assets of SEA-Vista were $157.6 million. From May 2, 2014 through September 30, 2014, the net income of SEA-Vista was $12.9 million, of which $6.3 million was attributable to noncontrolling interests.
Illinois Corn Processing. Illinois Corn Processing LLC (“ICP”) owns and operates an alcohol manufacturing, storage and distribution facility located in Pekin, IL. As of September 30, 2014, the net assets of ICP were $67.7 million. During the nine months ended September 30, 2014, the net income of ICP was $29.0 million, of which $7.5 million was attributable to noncontrolling interests. During the nine months ended September 30, 2013, the net loss of ICP was $4.4 million, of which $1.6 million was attributable to noncontrolling interests.
For the twelve months ending March 31, 2014, the noncontrolling member of ICP had invoked a plant shutdown election that is available to each LLC member under certain circumstances; however, under its member rights, the Company elected to keep the plant in operation. As a result, the earnings and losses of ICP were disproportionately allocated to its members during the plant shutdown election period. Effective April 1, 2014, the noncontrolling member of ICP withdrew its plant shutdown election.
Inland River Services. During the nine months ended September 30, 2014, the Company acquired the noncontrolling interest in one of its Inland River Services partnerships for $3.1 million ($2.1 million in cash and $1.0 million through the distribution of an inland river towboat to the noncontrolling interest holder).
12.
EARNINGS PER COMMON SHARE OF SEACOR
Basic earnings per common share of SEACOR are computed based on the weighted average number of common shares issued and outstanding during the relevant periods. Diluted earnings per common share of SEACOR are computed based on the weighted average number of common shares issued and outstanding plus the effect of potentially dilutive securities through the application of the treasury stock and if-converted methods. Dilutive securities for this purpose assumes restricted stock grants have vested, common shares have been issued pursuant to the exercise of outstanding stock options and common shares have been issued pursuant to the conversion of all outstanding convertible notes.

17


Computations of basic and diluted earnings per common share of SEACOR were as follows (in thousands, except share data):
 
Three Months Ended September 30,
 
Nine Months Ended September 30,
 
Net Income Attributable to SEACOR
 
Average O/S Shares
 
Per Share
 
Net Income Attributable to SEACOR
 
Average O/S Shares
 
Per Share
2014
 
 
 
 
 
 
 
 
 
 
 
Basic Weighted Average Common Shares Outstanding
$
27,463

 
19,196,121

 
$
1.43

 
$
60,039

 
19,761,620

 
$
3.04

Effect of Dilutive Share Awards:
 
 
 
 
 
 
 
 
 
 
 
Options and Restricted Stock(1)

 
405,770

 
 
 

 
412,773

 
 
Convertible Notes(2)
5,320

 
6,025,851

 
 
 
9,481

 
4,200,525

 
 
Diluted Weighted Average Common Shares Outstanding
$
32,783

 
25,627,742

 
$
1.28

 
$
69,520

 
24,374,918

 
$
2.85

2013
 
 
 
 
 
 
 
 
 
 
 
Basic Weighted Average Common Shares Outstanding
$
30,291

 
19,964,695

 
$
1.52

 
$
28,574

 
19,843,778

 
$
1.44

Effect of Dilutive Share Awards:
 
 
 
 
 
 
 
 
 
 
 
Options and Restricted Stock(1)

 
436,364

 
 
 

 
354,671

 
 
Convertible Notes(3)
3,086

 
4,200,525

 
 
 

 

 
 
Diluted Weighted Average Common Shares Outstanding
$
33,377

 
24,601,584

 
$
1.36

 
$
28,574

 
20,198,449

 
$
1.41

______________________ 
(1)
For the three months ended September 30, 2014 and 2013, diluted earnings per common share of SEACOR excluded 457,651 and 115,832 of certain share awards, respectively, as the effect of their inclusion in the computation would be anti-dilutive. For the nine months ended September 30, 2014 and 2013, diluted earnings per common share of SEACOR excluded 330,918 and 303,313 of certain share awards, respectively, as the effect of their inclusion in the computation would be anti-dilutive.
(2)
For the nine months ended September 30, 2014, diluted earnings per common share of SEACOR excluded 1,825,326 common shares issuable pursuant to the Company's 3.0% Convertible Senior Notes as the effect of their inclusion in the computation would be anti-dilutive.
(3)
For the nine months ended September 30, 2013, diluted earnings per common share of SEACOR excluded 4,200,525 common shares issuable pursuant to the Company's 2.5% Convertible Senior Notes as the effect of their inclusion in the computation would be anti-dilutive.
13.
SHARE BASED COMPENSATION
Transactions in connection with the Company’s share based compensation plans during the nine months ended September 30, 2014 were as follows:
Director stock awards granted
1,875

Employee Stock Purchase Plan (“ESPP”) shares issued
30,622

Restricted stock awards granted
147,645

Restricted stock awards canceled
1,000

Shares released from Deferred Compensation Plan
216

Stock Option Activities:
 
Outstanding as of December 31, 2013
1,481,280

Granted
151,350

Exercised
(92,332
)
Outstanding as of September 30, 2014
1,540,298

Shares available for future grants and ESPP purchases as of September 30, 2014
1,178,003


18


14.    SEGMENT INFORMATION
Accounting standards require public business enterprises to report information about each of their operating business segments that exceed certain quantitative thresholds or meet certain other reporting requirements. Operating business segments have been defined as components of an enterprise about which separate financial information is available and is evaluated regularly by the chief operating decision maker in deciding how to allocate resources and in assessing performance. The Company’s segment presentation and basis of measurement of segment profit or loss are as previously described in the Company’s Annual Report on Form 10-K for the year ended December 31, 2013.
The following tables summarize the operating results, capital expenditures and assets of the Company's reportable segments.
 
Offshore
Marine
Services
$’000
 
Inland
River
Services
$’000
 
Shipping
Services
$’000
 
ICP
$’000
 
Other
$’000
 
Corporate
and
Eliminations
$’000
 
Total
$’000
For the three months ended
September 30, 2014
 
 
 
 
 
 
 
 
 
 
 
 
 
Operating Revenues:
 
 
 
 
 
 
 
 
 
 
 
 
 
External customers
135,143

 
59,297

 
51,659

 
53,813

 
39,024

 

 
338,936

Intersegment
35

 
635

 

 

 

 
(670
)
 

 
135,178

 
59,932

 
51,659

 
53,813

 
39,024

 
(670
)
 
338,936

Costs and Expenses:
 
 
 
 
 
 
 
 
 
 
 
 
 
Operating
90,736

 
43,947

 
29,068

 
44,461

 
30,099

 
(635
)
 
237,676

Administrative and general
14,514

 
3,520

 
5,883

 
463

 
8,629

 
13,646

 
46,655

Depreciation and amortization
16,269

 
7,841

 
6,730

 
1,055

 
649

 
1,060

 
33,604

 
121,519

 
55,308

 
41,681

 
45,979

 
39,377

 
14,071

 
317,935

Gains (Losses) on Asset Dispositions
3,219

 
26,429

 
(2
)
 

 

 
223

 
29,869

Operating Income (Loss)
16,878

 
31,053

 
9,976

 
7,834

 
(353
)
 
(14,518
)
 
50,870

Other Income (Expense):
 
 
 
 
 
 
 
 
 
 
 
 
 
Derivative gains (losses), net
(33
)
 

 

 
(2,674
)
 
205

 
(36
)
 
(2,538
)
Foreign currency losses, net
(1,870
)
 
(450
)
 
(27
)
 

 
(121
)
 
(591
)
 
(3,059
)
Other, net

 

 
123

 

 
42

 
(54
)
 
111

Equity in Earnings (Losses) of 50% or Less Owned Companies, Net of Tax
2,529

 
(95
)
 
(2,188
)
 

 
726

 

 
972

Segment Profit
17,504

 
30,508

 
7,884

 
5,160

 
499

 
 
 
 
Other Income (Expense) not included in Segment Profit
 
3,032

Less Equity Earnings included in Segment Profit
 
(972
)
Income Before Taxes and Equity Earnings
 
48,416


19



 
Offshore
Marine
Services
$’000
 
Inland
River
Services
$’000
 
Shipping
Services
$’000
 
ICP(1)(2)
$’000
 
Other
$’000
 
Corporate
and
Eliminations
$’000
 
Total
$’000
For the nine months ended
September 30, 2014
 
 
 
 
 
 
 
 
 
 
 
 
 
Operating Revenues:
 
 
 
 
 
 
 
 
 
 
 
 
 
External customers
402,314

 
171,508

 
157,635

 
185,267

 
60,453

 

 
977,177

Intersegment
112

 
2,390

 

 

 

 
(2,502
)
 

 
402,426

 
173,898

 
157,635

 
185,267

 
60,453

 
(2,502
)
 
977,177

Costs and Expenses:
 
 
 
 
 
 
 
 
 
 
 
 
 
Operating
278,534

 
128,668

 
84,083

 
148,164

 
51,499

 
(2,390
)
 
688,558

Administrative and general
43,100

 
11,692

 
17,200

 
1,568

 
15,189

 
30,669

 
119,418

Depreciation and amortization
49,021

 
22,775

 
21,599

 
3,055

 
816

 
2,950

 
100,216

 
370,655

 
163,135

 
122,882

 
152,787

 
67,504

 
31,229

 
908,192

Gains (Losses) on Asset Dispositions
  and Impairments, Net
14,483

 
28,092

 
(43
)
 

 
(409
)
 
(3,281
)
 
38,842

Operating Income (Loss)
46,254

 
38,855

 
34,710

 
32,480

 
(7,460
)
 
(37,012
)
 
107,827

Other Income (Expense):
 
 
 
 
 
 
 
 
 
 
 
 
 
Derivative gains (losses), net
(164
)
 

 

 
(3,475
)
 
972

 
(14
)
 
(2,681
)
Foreign currency losses, net
(441
)
 
(303
)
 
(36
)
 

 
(59
)
 
(699
)
 
(1,538
)
Other, net
14,739

 
(38
)
 
(3,652
)
 
493

 
(4,796
)
 
(77
)
 
6,669

Equity in Earnings (Losses) of 50% or Less Owned Companies, Net of Tax
7,414

 
(3,842
)
 
129

 

 
(1,020
)
 

 
2,681

Segment Profit (Loss)
67,802

 
34,672

 
31,151

 
29,498

 
(12,363
)
 
 
 
 
Other Income (Expense) not included in Segment Profit (Loss)
 
 
 
 
 
 
 
 
 
(2,955
)
Less Equity Earnings included in Segment Profit (Loss)
 
 
 
 
 
 
 
 
 
(2,681
)
Income Before Taxes and Equity Earnings
 
 
 
 
 
 
 
107,322

 
 
 
 
 
 
 
 
 
 
 
 
 
 
Capital Expenditures
63,377

 
48,402

 
180,736

 
2,485

 
148

 
15,946

 
311,094

 
 
 
 
 
 
 
 
 
 
 
 
 
 
As of September 30, 2014
 
 
 
 
 
 
 
 
 
 
 
 
 
Property and Equipment:
 
 
 
 
 
 
 
 
 
 
 
 


Historical cost
1,124,701

 
501,594

 
455,765

 
47,155

 
7,133

 
30,161

 
2,166,509

Accumulated depreciation
(495,272
)
 
(159,003
)
 
(207,482
)
 
(14,423
)
 
(3,827
)
 
(9,986
)
 
(889,993
)
 
629,429

 
342,591

 
248,283

 
32,732

 
3,306

 
20,175

 
1,276,516

Construction in progress
71,880

 
29,793

 
181,953

 
195

 
235

 
306

 
284,362

 
701,309

 
372,384

 
430,236

 
32,927

 
3,541

 
20,481

 
1,560,878

Investments, at Equity, and Advances to 50% or Less Owned Companies
110,648

 
90,356

 
204,580

 

 
39,242

 

 
444,826

Inventories
4,755

 
2,389

 
1,173

 
10,076

 
2,503

 

 
20,896

Goodwill
13,367

 
2,718

 
1,852

 

 
44,967

 

 
62,904

Intangible Assets
2,350

 
6,797

 
434

 

 
24,725

 

 
34,306

Other current and long-term assets, excluding cash and near cash assets(3)
140,805

 
58,476

 
19,959

 
12,426

 
86,119

 
21,623

 
339,408

Segment Assets
973,234

 
533,120

 
658,234

 
55,429

 
201,097

 
 
 
 
Cash and near cash assets(3)
 
 
 
 
 
 
 
 
 
 
 
 
827,852

Total Assets
 
 
 
 
 
 
 
 
 
 
 
 
3,291,070

______________________
(1)
Operating revenues includes $177.2 million of tangible product sales and operating expenses includes $139.9 million of costs of goods sold.
(2)
Inventories includes raw materials of $1.8 million and work in process of $1.3 million.
(3)
Cash and near cash assets includes cash, cash equivalents, restricted cash, marketable securities, construction reserve funds and Title XI reserve funds.

20