Table of Contents

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 March 31, 2016              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 April 22, 2016 was 17,306,524. The Registrant has no other class of common stock outstanding.


Table of Contents

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

Table of Contents

PART I—FINANCIAL INFORMATION

ITEM 1.
FINANCIAL STATEMENTS
SEACOR HOLDINGS INC.
CONDENSED CONSOLIDATED BALANCE SHEETS
(in thousands, except share data, unaudited)
 
March 31,
2016
 
December 31,
2015
ASSETS
 
 
 
Current Assets:
 
 
 
Cash and cash equivalents
$
496,473

 
$
530,009

Marketable securities
110,894

 
138,200

Receivables:
 
 
 
Trade, net of allowance for doubtful accounts of $2,764 and $2,483 in 2016 and 2015, respectively
130,731

 
159,076

Other
31,440

 
27,217

Inventories
18,431

 
24,768

Prepaid expenses and other
9,615

 
8,627

Total current assets
797,584

 
887,897

Property and Equipment:
 
 
 
Historical cost
2,015,205

 
2,123,201

Accumulated depreciation
(986,048
)
 
(994,181
)
 
1,029,157

 
1,129,020

Construction in progress
484,472

 
454,605

Held for sale equipment
86,332

 

Net property and equipment
1,599,961

 
1,583,625

Investments, at Equity, and Advances to 50% or Less Owned Companies
334,370

 
331,103

Construction Reserve Funds
255,350

 
255,408

Goodwill
52,376

 
52,340

Intangible Assets, Net
25,750

 
26,392

Other Assets
46,496

 
48,654

 
$
3,111,887

 
$
3,185,419

LIABILITIES AND EQUITY
 
 
 
Current Liabilities:
 
 
 
Current portion of long-term debt
$
35,688

 
$
35,531

Accounts payable and accrued expenses
50,660

 
71,952

Other current liabilities
107,811

 
92,677

Total current liabilities
194,159

 
200,160

Long-Term Debt
1,018,331

 
1,034,859

Exchange Option Liability on Subsidiary Convertible Senior Notes
5,747

 
5,611

Deferred Income Taxes
374,476

 
389,988

Deferred Gains and Other Liabilities
153,051

 
163,862

Total liabilities
1,745,764

 
1,794,480

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; 37,845,556 and 37,684,829 shares issued in 2016 and 2015, respectively
379

 
377

Additional paid-in capital
1,508,981

 
1,505,942

Retained earnings
1,099,434

 
1,126,620

Shares held in treasury of 20,550,746 and 20,529,929 in 2016 and 2015, respectively, at cost
(1,357,809
)
 
(1,356,499
)
Accumulated other comprehensive loss, net of tax
(7,764
)
 
(5,620
)
 
1,243,221

 
1,270,820

Noncontrolling interests in subsidiaries
122,902

 
120,119

Total equity
1,366,123

 
1,390,939

 
$
3,111,887

 
$
3,185,419




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

1

Table of Contents

SEACOR HOLDINGS INC.
CONDENSED CONSOLIDATED STATEMENTS OF LOSS
(in thousands, except share data, unaudited)
 
Three Months Ended March 31,
 
2016
 
2015
Operating Revenues
$
213,928

 
$
260,644

Costs and Expenses:
 
 
 
Operating
157,468

 
199,148

Administrative and general
35,704

 
38,887

Depreciation and amortization
30,989

 
31,430

 
224,161

 
269,465

Gains (Losses) on Asset Dispositions and Impairments, Net
217

 
(4,846
)
Operating Loss
(10,016
)
 
(13,667
)
Other Income (Expense):
 
 
 
Interest income
5,593

 
4,579

Interest expense
(11,935
)
 
(10,512
)
Debt extinguishment gains, net
3,223

 

Marketable security losses, net
(25,096
)
 
(9,121
)
Derivative gains (losses), net
2,620

 
(2,996
)
Foreign currency gains (losses), net
37

 
(1,993
)
Other, net
268

 
(44
)
 
(25,290
)
 
(20,087
)
Loss Before Income Tax Benefit and Equity in Earnings (Losses) of 50% or Less Owned Companies
(35,306
)
 
(33,754
)
Income Tax Benefit
(14,831
)
 
(11,954
)
Loss Before Equity in Earnings (Losses) of 50% or Less Owned Companies
(20,475
)
 
(21,800
)
Equity in Earnings (Losses) of 50% or Less Owned Companies, Net of Tax
(49
)
 
3,899

Net Loss
(20,524
)
 
(17,901
)
Net Income attributable to Noncontrolling Interests in Subsidiaries
6,662

 
1,668

Net Loss attributable to SEACOR Holdings Inc.
$
(27,186
)
 
$
(19,569
)
 
 
 
 
Basic Loss Per Common Share of SEACOR Holdings Inc.
$
(1.62
)
 
$
(1.10
)
 
 
 
 
Diluted Loss Per Common Share of SEACOR Holdings Inc.
$
(1.62
)
 
$
(1.10
)
 
 
 
 
Weighted Average Common Shares Outstanding:
 
 
 
Basic
16,817,368

 
17,777,725

Diluted
16,817,368

 
17,777,725











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

2

Table of Contents

SEACOR HOLDINGS INC.
CONDENSED CONSOLIDATED STATEMENTS OF COMPREHENSIVE LOSS
(in thousands, unaudited)
 
Three Months Ended March 31,
 
2016
 
2015
Net Loss
$
(20,524
)
 
$
(17,901
)
Other Comprehensive Income (Loss):
 
 
 
Foreign currency translation losses
(1,868
)
 
(3,734
)
Derivative losses on cash flow hedges
(1,830
)
 
(397
)
Reclassification of derivative losses on cash flow hedges to equity in earnings (losses) of 50% or less owned companies
224

 
148

Other
(5
)
 

 
(3,479
)
 
(3,983
)
Income tax benefit
1,154

 
1,255

 
(2,325
)
 
(2,728
)
Comprehensive Loss
(22,849
)
 
(20,629
)
Comprehensive Income attributable to Noncontrolling Interests in Subsidiaries
6,481

 
1,272

Comprehensive Loss attributable to SEACOR Holdings Inc.
$
(29,330
)
 
$
(21,901
)



































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

3

Table of Contents

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, 2015
 
$
377

 
$
1,505,942

 
$
1,126,620

 
$
(1,356,499
)
 
$
(5,620
)
 
$
120,119

 
$
1,390,939

Issuance of common stock:
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Employee Stock Purchase Plan
 

 

 

 
1,133

 

 

 
1,133

Exercise of stock options
 

 
483

 

 

 

 

 
483

Director stock awards
 

 
55

 

 

 

 

 
55

Restricted stock
 
2

 
(1,170
)
 

 

 

 

 
(1,168
)
Purchase of conversion option in convertible debt, net of tax
 

 
(898
)
 

 

 

 

 
(898
)
Purchase of treasury shares
 

 

 

 
(2,396
)
 

 

 
(2,396
)
Amortization of share awards
 

 
4,522

 

 

 

 

 
4,522

Cancellation of restricted stock
 

 
47

 

 
(47
)
 

 

 

Distributions to noncontrolling interests
 

 

 

 

 

 
(3,698
)
 
(3,698
)
Net income (loss)
 

 

 
(27,186
)
 

 

 
6,662

 
(20,524
)
Other comprehensive loss
 

 

 

 

 
(2,144
)
 
(181
)
 
(2,325
)
Three Months Ended March 31, 2016
 
$
379

 
$
1,508,981

 
$
1,099,434

 
$
(1,357,809
)
 
$
(7,764
)
 
$
122,902

 
$
1,366,123

































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

4

Table of Contents

SEACOR HOLDINGS INC.
CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS
(in thousands, unaudited)
 
Three Months Ended March 31,
 
2016
 
2015
Net Cash Provided by Operating Activities
$
42,446

 
$
71,117

Cash Flows from Investing Activities:
 
 
 
Purchases of property and equipment
(47,436
)
 
(47,430
)
Proceeds from disposition of property and equipment
246

 
7,228

Investments in and advances to 50% or less owned companies
(7,953
)
 
(16,734
)
Return of investments and advances from 50% or less owned companies
1,136

 
16,953

Net repayments on revolving credit line to 50% or less owned companies
3,394

 

Payments received on third party leases and notes receivable, net
2,023

 
3,965

Net increase in restricted cash

 
(461
)
Net (increase) decrease in construction reserve funds
58

 
(10,507
)
Net cash used in investing activities
(48,532
)
 
(46,986
)
Cash Flows from Financing Activities:
 
 
 
Payments on long-term debt and capital lease obligations
(32,647
)
 
(7,396
)
Net repayments under inventory financing arrangements

 
(1,219
)
Proceeds from issuance of long-term debt, net of issue costs
12,373

 
4,435

Purchase of conversion option in convertible debt
(1,382
)
 

Common stock acquired for treasury
(2,396
)
 
(5,245
)
Proceeds and tax benefits from share award plans
442

 
2,076

Distributions to noncontrolling interests
(3,698
)
 
(7
)
Net cash used in financing activities
(27,308
)
 
(7,356
)
Effects of Exchange Rate Changes on Cash and Cash Equivalents
(142
)
 
(2,947
)
Net Increase (Decrease) in Cash and Cash Equivalents
(33,536
)
 
13,828

Cash and Cash Equivalents, Beginning of Period
530,009

 
434,183

Cash and Cash Equivalents, End of Period
$
496,473

 
$
448,011






















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

5

Table of Contents

SEACOR HOLDINGS INC.
NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
(unaudited)
1.
BASIS OF PRESENTATION AND ACCOUNTING POLICIES
The condensed consolidated financial information for the three months ended March 31, 2016 and 2015 has been prepared by the Company and has not been audited by its independent registered certified 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 March 31, 2016, its results of operations for the three months ended March 31, 2016 and 2015, its comprehensive loss for the three months ended March 31, 2016 and 2015, its changes in equity for the three months ended March 31, 2016, and its cash flows for the three months ended March 31, 2016 and 2015. 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, 2015.
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, 2015.
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.
As of March 31, 2016, deferred revenues of $6.8 million, included in other current liabilities in the accompanying condensed consolidated balance sheets, 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. The Company is vigorously defending its interest in connection with the bankruptcy filing; however, payments received under the Conveyance subsequent to May 19, 2012 are subject to creditors' claims in bankruptcy court. The Company will recognize revenues when reasonably assured of a judgment in its favor. All costs and expenses related to these charters were recognized as incurred.
Property and Equipment. Equipment, stated at cost, is depreciated using the straight-line method over the estimated useful life of the asset to an estimated salvage value. With respect to each class of asset, the estimated useful life is based upon a newly built asset being placed into service and represents the time period beyond which it is typically not justifiable for the Company to continue to operate the asset in the same or similar manner. From time to time, the Company may acquire older 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.

6

Table of Contents

As of March 31, 2016, 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 barges
20
Inland river liquid tank barges
25
Inland river towboats
25
Product tankers - U.S.-flag
25
Short-sea Container/RORO(1) vessels
20
Harbor and offshore tugs
25
Ocean liquid tank barges
25
Terminal and manufacturing facilities
20
______________________
(1)
Roll on/Roll off ("RORO").
Equipment maintenance and repair costs and the costs of routine overhauls, drydockings and inspections performed on vessels and equipment are charged to operating expense as incurred. Expenditures that extend the useful life or improve the marketing and commercial characteristics of equipment as well as major renewals and improvements to other properties are capitalized.
Certain interest costs incurred during the construction of equipment are capitalized as part of the assets’ carrying values and are amortized over such assets’ estimated useful lives. During the three months ended March 31, 2016, capitalized interest totaled $5.5 million.
Impairment of Long-Lived Assets. 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 three months ended March 31, 2016 and 2015, the Company recognized impairment charges of $0.4 million and $6.6 million, respectively, related to long-lived assets held for use.
The Company had previously identified indicators of impairment for certain of its offshore support vessel classes operated by Offshore Marine Services as a result of continued weak market conditions from the decline in oil and gas prices. These indicators may include a significant decrease in the market price of a long-lived asset or asset group, a significant adverse change in the extent or manner in which a long-lived asset or asset group is being used or in its physical condition, or a current period operating or cash flow loss combined with a history of operating or cash flow losses or a forecast that demonstrates continuing losses associated with the use of a long-lived asset or asset group. As a consequence, the Company estimated the undiscounted cash flows for those asset groups and determined that the carrying value of the long-lived assets would be recovered through the future operations of those asset groups. The preparation of the undiscounted cash flows required management to make certain estimates and assumptions on expected future rates per day worked and utilization levels of the vessel classes based on anticipated future offshore oil and gas exploration and production activity in the geographical regions where the Company operates. If difficult market conditions persist and an anticipated recovery is delayed beyond the Company's expectation, revisions to management's forecasts may result in the Company recording additional impairment charges related to its long-lived assets in future periods.
Impairment of 50% or Less Owned Companies. Investments in 50% or less owned companies are reviewed periodically to assess whether there is an other-than-temporary decline in the fair value of the investment. An annual review is performed to consider, among other things, whether the carrying value of the investment is able to be recovered and whether or not the investee’s ability to sustain an earnings capacity would justify the carrying value of the investment. When the Company determines its investment in the 50% or less owned company is not recoverable or the decline in fair value is other-than-temporary, the investment is written down to fair value. Actual results may vary from the Company's estimates due to the uncertainty regarding the projected financial performance of 50% or less owned companies, the severity and expected duration of declines in value, and the available liquidity in the capital markets to support the continuing operations of the 50% or less owned company. During the three months ended March 31, 2016 and 2015, the Company did not recognize any impairment charges related to its 50% or less owned companies.
Income Taxes. During the three months ended March 31, 2016, the Company's effective tax rate of 42.0% was primarily due to taxes not provided on income attributable to noncontrolling interests (see Note 8).

7

Table of Contents

Deferred Gains. 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 three month ended March 31 was as follows (in thousands):
 
2016
 
2015
Balance at beginning of period
$
135,909

 
$
159,911

Amortization of deferred gains included in operating expenses as a reduction to rental expense
(5,658
)
 
(5,641
)
Amortization of deferred gains included in gains (losses) on asset dispositions and impairments, net
(623
)
 
(1,048
)
Deferred gains on held for sale equipment
(1,707
)
 

Balance at end of period
$
127,921

 
$
153,222

Accumulated Other Comprehensive Loss. The components of accumulated other comprehensive loss were as follows (in thousands):
 
SEACOR Holdings Inc. Stockholders' Equity
 
Noncontrolling
Interests
 
 
 
Foreign
Currency
Translation
Adjustments
 
Derivative
Losses on
Cash Flow
Hedges, net
 
Other
 
Total
 
Foreign
Currency
Translation
Adjustments
 
Other
 
Other
Comprehensive
Loss
December 31, 2015
$
(5,528
)
 
$
(116
)
 
$
24

 
$
(5,620
)
 
$
(528
)
 
$
16

 
 
Other comprehensive loss
(1,689
)
 
(1,606
)
 
(3
)
 
(3,298
)
 
(179
)
 
(2
)
 
$
(3,479
)
Income tax benefit
591

 
562

 
1

 
1,154

 

 

 
1,154

Three Months Ended March 31, 2016
$
(6,626
)
 
$
(1,160
)
 
$
22

 
$
(7,764
)
 
$
(707
)
 
$
14

 
$
(2,325
)
Loss Per Share. Basic loss per common share of SEACOR is computed based on the weighted average number of common shares issued and outstanding during the relevant periods. Diluted loss per common share of SEACOR is 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.

8

Table of Contents

Computations of basic and diluted loss per common share of SEACOR were as follows (in thousands, except share data):
 
Three Months Ended March 31,
 
Net Loss attributable to SEACOR
 
Average O/S Shares
 
Per Share
2016
 
 
 
 
 
Basic Weighted Average Common Shares Outstanding
$
(27,186
)
 
16,817,368

 
$
(1.62
)
Effect of Dilutive Share Awards:
 
 
 
 
 
Options and Restricted Stock(1)

 

 
 
Convertible Notes(2)

 

 
 
Diluted Weighted Average Common Shares Outstanding
$
(27,186
)
 
16,817,368

 
$
(1.62
)
2015
 
 
 
 
 
Basic Weighted Average Common Shares Outstanding
$
(19,569
)
 
17,777,725

 
$
(1.10
)
Effect of Dilutive Share Awards:
 
 
 
 
 
Options and Restricted Stock(1)

 

 
 
Convertible Notes(3)

 

 
 
Diluted Weighted Average Common Shares Outstanding
$
(19,569
)
 
17,777,725

 
$
(1.10
)
______________________
(1)
For the three months ended March 31, 2016, and 2015, diluted earnings per common share of SEACOR excluded 1,997,822 and 1,977,402, respectively, of certain share awards as the effect of their inclusion in the computation would be anti-dilutive.
(2)
For the three months ended March 31, 2016, diluted earnings per common share of SEACOR excluded 3,379,393 common shares issuable pursuant to the Company's 2.5% Convertible Senior Notes, 1,825,326 common shares issuable pursuant to the Company's 3.0% Convertible Senior Notes and 2,243,500 common shares issuable pursuant to the Company's 3.75% Subsidiary Convertible Senior Notes as the effect of their inclusion in the computation would be anti-dilutive.
(3)
For the three months ended March 31, 2015, diluted earnings per common share of SEACOR excluded 4,200,525 common shares issuable pursuant to the Company's 2.5% Convertible Senior Notes and 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.
New Accounting Pronouncements. On May 28, 2014, the Financial Accounting Standards Board ("FASB") 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, 2017 and early adoption is permitted. The Company has not yet selected the method of adoption or determined what impact, if any, the adoption of the new standard will have on its consolidated financial position, results of operations or cash flows.
On February 25, 2016, the FASB issued a comprehensive new leasing standard, which improves transparency and comparability among companies by requiring lessees to recognize a lease liability and a corresponding lease asset for virtually all lease contracts. It also requires additional disclosures about leasing arrangements. The new standard is effective for interim and annual periods beginning after December 15, 2018 and requires a modified retrospective approach to adoption. Early adoption is permitted. 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.
2.
EQUIPMENT ACQUISITIONS AND DISPOSITIONS
During the three months ended March 31, 2016, capital expenditures were $47.4 million. Equipment deliveries during the three months ended March 31, 2016 included one wind farm utility vessel.
During the three months ended March 31, 2016, the Company sold other property and equipment for net proceeds of $0.1 million in cash. In addition, the Company recognized previously deferred gains of $0.6 million.
Held for sale equipment. On April 15, 2016, the Company sold 20 30,000 barrel tank barges, the rights to eight leased-in 30,000 barrel tank barges and 14 inland river towboats for $90.0 million. Included in the sold equipment are one 30,000 barrel tank barge and one towboat currently under construction. The Company is obligated to complete the construction of this equipment prior to delivery, and the estimated costs of completion are included in the Company's capital commitments (see Note 11).

9

Table of Contents

3.
INVESTMENTS, AT EQUITY, AND ADVANCES TO 50% OR LESS OWNED COMPANIES
Falcon Global. Falcon Global was formed to construct and operate foreign-flag liftboats. During the three months ended March 31, 2016, the Company and its partner each contributed additional capital of $4.3 million in cash to Falcon Global.
SCFCo. SCFCo was established to operate inland river towboats and inland river dry-cargo barges on the Parana-Paraguay Rivers in South America and a terminal facility at Port Ibicuy, Argentina. During the three months ended March 31, 2016, the Company and its partner each contributed additional capital of $0.3 million in cash to SCFCo. As of March 31, 2016, the Company had outstanding loans and working capital advances to SCFCo of $26.1 million.
SEA-Access. SEA-Access owns and operates a U.S.-flag crude oil tanker. During the three months ended March 31, 2016, the Company received dividends of $1.5 million and capital distributions of $1.1 million from SEA-Access.
SeaJon. SeaJon owns an articulated tug-barge operating in the Great Lakes trade. During the three months ended March 31, 2016, the Company received dividends of $0.6 million from SeaJon.
Avion. Avion is a distributor of aircraft and aircraft related parts. During the three months ended March 31, 2016, the Company made advances of $3.0 million to Avion. As of March 31, 2016, the Company had $3.0 million of outstanding loans to Avion.
VA&E. VA&E primarily focuses on the global origination, trading and merchandising of sugar, pairing producers and buyers and arranging for the transportation and logistics of the product. The Company provides an unsecured revolving credit facility to VA&E for up to $6.0 million. During the three months ended March 31, 2016, VA&E borrowed $2.1 million and repaid $5.5 million on the revolving credit facility. As of March 31, 2016, the Company had outstanding advances of $3.6 million to VA&E.
Other. During the three months ended March 31, 2016, the Company made advances of $0.4 million to other 50% or less owned companies.
Guarantees. The Company has guaranteed the payment of amounts owed under a vessel charter, a construction contract and banking facilities by certain of its 50% or less owned companies. As of March 31, 2016, the total amount guaranteed by the Company under these arrangements was $55.2 million. In addition, as of March 31, 2016, the Company had uncalled capital commitments to two of its 50% or less owned companies totaling $1.9 million.
4.
LONG-TERM DEBT
SEACOR’s Board of Directors previously approved a securities repurchase plan that authorizes the Company to acquire its 7.375% Senior Notes, 3.0% Convertible Senior Notes, 2.5% Convertible Senior Notes and SEACOR common stock, par value $0.01 per share (“Common Stock”), (collectively the "Securities"), which may be acquired through open market purchases, privately negotiated transactions or otherwise, depending on market conditions. As of March 31, 2016, the Company's repurchase authority for the Securities was $165.9 million.
2.5% Convertible Senior Notes. During the three months ended March 31, 2016, the Company repurchased $20.2 million in principal amount of its 2.5% Convertible Senior Notes for total consideration of $18.9 million. Consideration of $17.5 million was allocated to the settlement of the long-term debt resulting in gains on debt extinguishment of $1.4 million included in the accompanying consolidated statements of loss. Consideration of $1.4 million was allocated to the purchase of the conversion option embedded in the 2.5% Convertible Senior Notes as included in the accompanying consolidated statements of changes in equity.
7.375% Senior Notes. During the three months ended March 31, 2016, the Company purchased $13.9 million in principal amount of its 7.375% Senior Notes for $11.9 million resulting in gains on debt extinguishment of $1.8 million included in the accompanying consolidated statements of loss.
SEA-Vista Credit Facility. During the three months ended March 31, 2016, SEA-Vista borrowed $5.0 million on the Revolving Loan and made scheduled repayments of $1.0 million on the Term A-1 Loan. As of March 31, 2016, SEA-Vista had $82.0 million of borrowing capacity under the SEA-Vista Credit Facility. Subsequent to March 31, 2016, SEA-Vista borrowed $32.0 million on the Revolving Loan.
ICP Revolving Credit Facility. As of March 31, 2016, ICP had no borrowings on the ICP Revolving Credit Facility and had $15.5 million of borrowing capacity.
Other. During the three months ended March 31, 2016, the Company made scheduled payments on other long-term debt of $2.2 million and received proceeds from the issuance of other long-term debt of $7.4 million, net of issuance costs of $0.1 million.

10

Table of Contents

As of March 31, 2016, the Company had outstanding letters of credit totaling $25.0 million with various expiration dates through 2019 and had other labor and performance guarantees of $2.7 million.
5.
DERIVATIVE INSTRUMENTS AND HEDGING STRATEGIES
Exchange Option Liability on Subsidiary Convertible Senior Notes. The exchange option liability is carried at fair value and relates to a bifurcated embedded derivative in the Company's 3.75% Subsidiary Convertible Senior Notes. The activity of the exchange option liability for the three months ended March 31, 2016 was as follows:
Balance as of December 31, 2015
 
$
5,611

Unrealized losses included in derivative gains (losses), net
 
136

Balance as of March 31, 2016
 
$
5,747

Cash Flow Hedges. Certain of the Company's 50% or less owned companies have interest rate swap agreements designated as cash flow hedges. 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. The Company recognized losses on derivative instruments designated as cash flow hedges of $1.8 million and $0.4 million for the three months ended March 31, 2016 and 2015, respectively, as a component of other comprehensive income (loss). As of March 31, 2016, the interest rate swaps held by the Company's 50% or less owned companies were as follows:
MexMar had four interest rate swap agreements with maturities in 2023 that call for MexMar to pay a fixed rate of interest ranging from 1.71% to 2.05% on the aggregate amortized notional value of $114.7 million and receive a variable interest rate based on LIBOR on the aggregate amortized notional value.
Sea-Cat Crewzer II had an interest rate swap agreement maturing in 2019 that calls for Sea-Cat Crewzer II to pay a fixed rate of interest of 1.52% on the amortized notional value of $25.0 million and receive a variable interest rate based on LIBOR on the amortized notional value.
Sea-Cat Crewzer had an interest rate swap agreement maturing in 2019 that calls for Sea-Cat Crewzer to pay a fixed rate of interest of 1.52% on the amortized notional value of $22.2 million and receive a variable interest rate based on LIBOR on the amortized notional value.
SeaJon had an interest rate swap agreement maturing in 2017 that calls for SeaJon to pay a fixed interest rate of 2.79% on the amortized notional value of $32.1 million and receive a variable interest rate based on LIBOR on the amortized notional value.
Other Derivative Instruments. Other derivative instruments not designated as hedging 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 March 31, 2016 were as follows (in thousands):
 
Derivative
Asset
 
Derivative
Liability
 
 
 
 
Options on equities and equity indices
$

 
$
250

Forward currency exchange, option and future contracts
228

 

Interest rate swap agreements

 
212

Commodity swap, option and future contracts:
 
 
 
Exchange traded
199

 
1,413

 
$
427

 
$
1,875


11

Table of Contents

The Company recognized gains (losses) on derivative instruments not designated as hedging instruments for the three month ended March 31 as follows (in thousands):
 
2016
 
2015
Options on equities and equity indices
$
2,904

 
$
(1,374
)
Forward currency exchange, option and future contracts
45

 
(304
)
Interest rate swap agreements
(6
)
 
(9
)
Commodity swap, option and future contracts:
 
 
 
Exchange traded
(187
)
 
(2,184
)
Non-exchange traded

 
875

 
$
2,756

 
$
(2,996
)
The Company holds positions in publicly traded equity options that convey the right or obligation to engage in future transactions in 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.
The Company enters and settles forward currency exchange, option and future contracts with respect to various foreign currencies. As of March 31, 2016, the outstanding forward currency exchange contracts translated into a net purchase of foreign currencies with an aggregate U.S. dollar equivalent of $2.0 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 March 31, 2016, the interest rate swaps held by the Company or its 50% or less owned companies were as follows:
The Company had an interest rate swap agreement maturing in 2018 that calls for the Company to pay a fixed interest rate of 3.00% on the amortized notional value of $5.8 million and receive a variable interest rate based on Euribor on the amortized notional value.
OSV Partners had two interest rate swap agreements with maturities in 2020 that call for OSV Partners to pay a fixed rate of interest ranging from 1.89% to 2.27% on the aggregate amortized notional value of $41.8 million and receive a variable interest rate based on LIBOR on the aggregate amortized notional value.
Dynamic Offshore had an interest rate swap agreement maturing in 2018 that calls for Dynamic Offshore to pay a fixed interest rate of 1.30% on the amortized notional value of $81.2 million and receive a variable interest rate based on LIBOR on the amortized notional value.
Falcon Global had an interest rate swap agreement maturing in 2022 that calls for Falcon Global to pay a fixed interest rate of 2.06% on the amortized notional value of $62.5 million and receive a variable interest rate based on LIBOR on the amortized notional value.
The Company and certain of its 50% or less owned companies 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, ethanol and natural gas) to protect its raw material and finished goods inventory balances from market changes. VA&E enters into exchange traded positions to protect its fixed price future purchase and sale contracts for sugar as well as its inventory balances from market changes. As of March 31, 2016, the net market exposure to these commodities under these contracts was not material.

12

Table of Contents

6.
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 March 31, 2016 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)
$
110,894

 
$

 
$

Derivative instruments (included in other receivables)
199

 
228

 

Construction reserve funds
255,350

 

 

LIABILITIES
 
 
 
 
 
Short sale of marketable securities(1) (included in other current liabilities)
5,053

 

 

Derivative instruments (included in other current liabilities)
1,663

 
212

 

Exchange option liability on subsidiary convertible senior notes

 

 
5,747

______________________
(1)
Marketable security losses, net include unrealized losses of $24.5 million and $0.2 million for the three months ended March 31, 2016 and 2015, respectively, related to marketable security positions held by the Company as of March 31, 2016.
Level 3 Inputs. The fair value of the exchange option liability on subsidiary convertible senior notes is estimated with significant inputs that are both observable and unobservable in the market and therefore is considered a Level 3 fair value measurement. Observable inputs include market quotes, current interest rates, benchmark yield curves, volatility, quoted prices of securities with similar characteristics and historical dividends. The significant unobservable input used in the fair value measurement is the probability assessment of a SMH Spin-off. In the fair value measurement, holding the observable inputs constant, a significant increase in the probability of a SMH Spin-off would result in a significantly lower exchange option liability.
The estimated fair values of the Company’s other financial assets and liabilities as of March 31, 2016 were as follows (in thousands):
 
 
 
Estimated Fair Value
 
Carrying
Amount
 
Level 1
 
Level 2
 
Level 3
ASSETS
 
 
 
 
 
 
 
Cash and cash equivalents
$
496,473

 
$
496,473

 
$

 
$

Investments, at cost, in 50% or less owned companies (included in other assets)
16,045

 
see below
 
 
 
 
Notes receivable from third parties (included in other receivables and other assets)
22,574

 
see below
 
 
 
 
LIABILITIES
 
 
 
 
 
 
 
Long-term debt, including current portion(1)
1,054,019

 

 
1,019,076

 

______________________
(1)
The estimated fair value includes the embedded conversion options on the Company's 2.5% and 3.0% Convertible Senior Notes.
The carrying value of cash and cash equivalents 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

13

Table of Contents

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.
7.
STOCK REPURCHASES
SEACOR’s Board of Directors previously approved a securities repurchase plan that authorizes the Company to acquire its 7.375% Senior Notes, 3.0% Convertible Senior Notes, 2.5% Convertible Senior Notes and Common Stock, (collectively the "Securities"), which may be acquired through open market purchases, privately negotiated transactions or otherwise, depending on market conditions. As of March 31, 2016, the Company's repurchase authority for the Securities was $165.9 million.
During the three months ended March 31, 2016, the Company purchased 47,455 shares of Common Stock for treasury for an aggregate purchase price of $2.4 million from its employees to cover their tax withholding obligations upon the lapsing of restrictions on share awards. These shares were purchased in accordance with the terms of the Company's Share Incentive Plans and not pursuant to the repurchase authorizations granted by SEACOR's Board of Directors.
8.
NONCONTROLLING INTERESTS IN SUBSIDIARIES
Noncontrolling interests in the Company's consolidated subsidiaries were as follows (in thousands):
 
Noncontrolling Interests
 
March 31, 2016
 
December 31, 2015
Offshore Marine Services:
 
 
 
 
 
 
 
Windcat Workboats
25%
 
$
6,682

 
$
7,484

Other
1.8
%
30%
 
267

 
470

Inland River Services:
 
 
 
 
 
 
 
Other
3.0
%
51.8%
 
960

 
1,146

Shipping Services:
 
 
 
 
 
 
 
Sea-Vista
49%
 
95,118

 
88,290

Illinois Corn Processing
30%
 
19,392

 
22,272

Other
5.0
%
14.6%
 
483

 
457

 
 
 
 
 
$
122,902

 
$
120,119

Windcat Workboats. 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 March 31, 2016, the net assets of Windcat Workboats were $26.7 million. During the three months ended March 31, 2016, the net loss of Windcat Workboats was $2.5 million, of which $0.6 million was attributable to noncontrolling interests. During the three months ended March 31, 2015, the net income of Windcat Workboats was $2.3 million, of which $0.6 million was attributable to noncontrolling interests.
SEA-Vista. SEA-Vista owns and operates 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. As of March 31, 2016, the net assets of SEA-Vista were $194.1 million. During the three months ended March 31, 2016, the net income of SEA-Vista was $13.9 million, of which $6.8 million was attributable to noncontrolling interests. During the three months ended March 31, 2015, the net loss of SEA-Vista was $0.1 million.
Illinois Corn Processing. ICP owns and operates an alcohol manufacturing, storage and distribution facility located in Pekin, IL. As of March 31, 2016, the net assets of ICP were $64.6 million. During the three months ended March 31, 2016, the net income of ICP was $1.4 million, of which $0.4 million was attributable to noncontrolling interests. During the three months ended March 31, 2015, the net income of ICP was $4.1 million, of which $1.2 million was attributable to noncontrolling interests.
9.
MULTI-EMPLOYER PENSION PLANS
AMOPP. During the three months ended March 31, 2016, the Company received notification from the AMOPP that the Company's withdrawal liability as of September 30, 2015 was $46.7 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 March 31, 2016, 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.

14

Table of Contents

10.
SHARE BASED COMPENSATION
Transactions in connection with the Company’s share based compensation plans during the three months ended March 31, 2016 were as follows:
Director stock awards granted
875

Employee Stock Purchase Plan (“ESPP”) shares issued
27,538

Restricted stock awards granted
132,758

Restricted stock awards canceled
900

Stock Option Activities:
 
Outstanding as of December 31, 2015
1,690,899

Granted
46,165

Exercised
(27,094
)
Forfeited
(18,760
)
Expired
(74,602
)
Outstanding as of March 31, 2016
1,616,608

Shares available for future grants and ESPP purchases as of March 31, 2016
651,493

11.
COMMITMENTS AND CONTINGENCIES
The Company's capital commitments as of March 31, 2016 by year of expected payment were as follows (in thousands):
 
 
2016
 
2017
 
2018
 
2019
 
Total
Shipping Services
 
$
150,476

 
$
22,630

 
$

 
$

 
$
173,106

Offshore Marine Services
 
55,545

 
38,847

 
29,199

 
10,123

 
133,714

Inland River Services
 
29,060

 
28,510

 

 

 
57,570

Illinois Corn Processing
 
3,399

 

 

 

 
3,399

Other
 
3

 

 

 

 
3

 
 
$
238,483

 
$
89,987

 
$
29,199

 
$
10,123

 
$
367,792

Shipping Services' capital commitments included three U.S.-flag product tankers, one U.S.-flag chemical and petroleum articulated tug barge and two U.S.-flag harbor tugs. Offshore Marine Services' capital commitments included eight fast support vessels, four supply vessels, two specialty offshore support vessels and one wind farm utility vessel. Inland River Services' capital commitments included 50 dry-cargo barges, one inland river 30,000 barrel liquid tank barge and five inland river towboats.
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" in the U.S. Gulf of Mexico on April 20, 2010, MDL No. 2179 filed in the U.S. District Court 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 was 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

15

Table of Contents

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 taken under advisement. 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, had to 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. On November 14, 2014, the Clean-Up Responder Defendants and the Plaintiffs’ Steering Committee ("PSC") in the MDL submitted a joint report to the Court regarding claimants’ compliance with the pretrial order. In this joint report, the parties (i) explained how they complied with the notice requirements of the Court’s July 17, 2014 pretrial order, (ii) noted that they had received 102 sworn statements in connection with this pretrial order, and (iii) provided the Court with an assessment of the sworn statements received. An additional sworn statement was received after the joint report was submitted. On January 7, 2016, the Court issued an Order to Show Cause ("OSC") as to the B3 claims against the Clean-Up Responder Defendants, including ORM and NRC. The OSC ordered any plaintiff(s) opposed to the Court entering the proposed Order & Reasons ("O&R") attached to the OSC to show cause, in writing, on or before January 28, 2016 why the Court should not dismiss their B3 claim(s) with prejudice for the reasons set forth in the O&R. The O&R addressed the pending summary judgment motions and stated, among other things, why the Clean-Up Responder Defendants are entitled to derivative immunity under the Clean Water Act and discretionary function immunity under the Federal Tort Claims Act, and why plaintiffs’ claims are preempted by the implied conflict preemption doctrine. The O&R also discussed the results of the protocol delineated in the Court’s July 17, 2014 pretrial order and concluded with the dismissal of all but eleven plaintiffs’ B3 claims against the Clean-Up Responder Defendants with prejudice. Following the issuance of the OSC, ORM and NRC complied with the same notice requirements delineated in the July 17, 2014 pretrial order and, along with the PSC, submitted a joint certification to that effect on January 15, 2016. Eight individual plaintiffs submitted responses to the OSC by the January 28, 2016 deadline, and the Clean-Up Responder Defendants submitted a response thereto on February 4, 2016. On February 16, 2016, the Court issued an order overruling the objections relayed in the eight individual Plaintiffs’ responses to the OSC, and then entered a dismissal order nearly identical to the O&R. Accordingly, the final Order & Reasons entered on February 16, 2016 dismissed all but eleven B3 claims against ORM and NRC with prejudice, whether by joinder in the master complaint, individual complaint, or otherwise (the "B3 Dismissal Order"). The deadline for Plaintiffs to appeal the B3 Dismissal Order has passed and the Company is evaluating how this ruling will impact the individual civil actions discussed below. Moreover, on April 8, 2016, the Court entered an order establishing a summary judgment briefing schedule as to the remaining eleven B3 claimants. Such summary judgment motions are to be filed by the Clean-Up Responder Defendants, including ORM and NRC, on May 9, 2016, with opposition and reply briefing to follow. This summary judgment briefing schedule pertains to several individual civil actions discussed herein, including the Wunstell Action. 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 the remaining B3 claims, the Company does not expect they 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 were stayed upon consolidation with the MDL 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 was 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

16

Table of Contents

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 May 22, 2015, the employee filed an opposition to the Company's motion as well as a motion to be recognized as an opt-out plaintiff or extend the opt-out deadline in connection with the below-referenced Medical Settlement, and on May 29, 2015, the Company filed a reply brief in further support of its motion. On June 10, 2015, the Court granted the Company's motion for summary judgment, dismissing all of the employee's claims against the Company and/or the M/V Seacor Vanguard with prejudice, and denied the employee's May 22, 2015 motion regarding his opt-out position in connection with the Medical Settlement. Final judgments for all of the employee's claims were issued by the Court on June 17, 2015, and the employee filed his Notice of Appeal on July 7, 2015. Following the docketing of the employee’s appeals with the Fifth Circuit, the Company filed a motion to consolidate these appeals, which was granted on August 21, 2015. The employee filed his appellant brief in the consolidated appeal on October 23, 2015, the Company submitted its appellee brief on November 25, 2015, and the employee filed his reply brief on January 4, 2016. On April 6, 2016, the Fifth Circuit affirmed the district court's decision dismissing all of the employee's claims with prejiduce. 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 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 sought 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 evaluating the impact of the B3 Dismissal Order and other developments in the MDL, including the settlements discussed below, on these individual actions. The Company is unable to estimate the potential exposure, if any, resulting from these matters, to the extent they remain viable, 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 ("Cameron"), Halliburton Energy Services, Inc., and M-I L.L.C. ("M-I") 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 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. The remainder of the aforementioned cross-claims in Transocean's limitation action remain pending, although the Court has found Cameron and M-I to be not liable in connection with the Deepwater Horizon incident and resultant oil spill and dismissed these parties from the MDL. 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.

17

Table of Contents

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 since they were consolidated with the MDL. The Company continues to evaluate the impact of the B3 Dismissal Order and other developments in the MDL, including the settlements discussed below, on these cases. 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 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 submitting claims in both settlements have passed. Although neither the Company, ORM, nor 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, 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's 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.
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. Pursuant to the agreement governing the sale, the Company's potential liability to the purchaser may not exceed the consideration received by the Company for the SES Business Transaction. The Company is currently indemnified under contractual agreements with BP for the potential liabilities relating to work performed in connection with the Deepwater Horizon oil spill response.
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.

18

Table of Contents

12.    SEGMENT INFORMATION
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, 2015. 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(1)(2)
$’000
 
Other
$’000
 
Corporate
and
Eliminations
$’000
 
Total
$’000
For the three months ended
March 31, 2016
 
 
 
 
 
 
 
 
 
 
 
 
 
Operating Revenues:
 
 
 
 
 
 
 
 
 
 
 
 
 
External customers
59,853

 
39,028

 
57,055

 
49,609

 
8,383

 

 
213,928

Intersegment
26

 
586

 

 

 
36

 
(648
)
 

 
59,879

 
39,614

 
57,055

 
49,609

 
8,419

 
(648
)
 
213,928

Costs and Expenses:
 
 
 
 
 
 
 
 
 
 
 
 
 
Operating
48,850

 
30,118

 
27,234

 
46,289

 
5,805

 
(828
)
 
157,468

Administrative and general
12,398

 
3,912

 
6,918

 
656

 
4,223

 
7,597

 
35,704

Depreciation and amortization
14,838

 
7,137

 
6,562

 
1,053

 
455

 
944

 
30,989

 
76,086

 
41,167

 
40,714

 
47,998

 
10,483

 
7,713

 
224,161

Gains (Losses) on Asset Dispositions and Impairments, Net
(380
)
 
605

 
(6
)
 

 
(2
)
 

 
217

Operating Income (Loss)
(16,587
)
 
(948
)
 
16,335

 
1,611

 
(2,066
)
 
(8,361
)
 
(10,016
)
Other Income (Expense):
 
 
 
 
 
 
 
 
 
 
 
 
 
Derivative gains (losses), net
2,898

 

 

 
(187
)
 

 
(91
)
 
2,620

Foreign currency gains (losses), net
(1,560
)
 
1,437

 
(3
)
 

 
(27
)
 
190

 
37

Other, net
265

 

 
1

 

 

 
2

 
268

Equity in Earnings (Losses) of 50% or Less Owned Companies, Net of Tax
2,161

 
(2,778
)
 
26

 

 
542

 

 
(49
)
Segment Profit (Loss)
(12,823
)
 
(2,289
)
 
16,359

 
1,424

 
(1,551
)
 
 
 
 
Other Income (Expense) not included in Segment Profit (Loss)
 
 
 
 
 
 
 
 
 
(28,215
)
Less Equity Losses included in Segment Profit (Loss)
 
 
 
 
 
 
 
 
 
49

Loss Before Taxes and Equity Losses
 
 
 
 
 
 
 
(35,306
)
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Capital Expenditures
20,907

 
1,970

 
23,894

 
686

 

 
(21
)
 
47,436

 
 
 
 
 
 
 
 
 
 
 
 
 
 
As of March 31, 2016
 
 
 
 
 
 
 
 
 
 
 
 
 
Property and Equipment:
 
 
 
 
 
 
 
 
 
 
 
 


Historical cost
1,099,063

 
379,310

 
451,347

 
51,341

 
3,053

 
31,091

 
2,015,205

Accumulated depreciation
(557,968
)
 
(148,779
)
 
(240,652
)
 
(20,443
)
 
(2,613
)
 
(15,593
)
 
(986,048
)
 
541,095

 
230,531

 
210,695

 
30,898

 
440

 
15,498

 
1,029,157

Construction in progress
117,809

 
9,136

 
357,296

 
2,031

 

 
(1,800
)
 
484,472

Held for sale equipment

 
86,332

 

 

 

 

 
86,332

Net property and equipment
658,904

 
325,999

 
567,991

 
32,929

 
440

 
13,698

 
1,599,961

Investments, at Equity, and Advances to 50% or Less Owned Companies
135,406

 
79,478

 
63,365

 

 
56,121

 

 
334,370

Inventories
3,199

 
1,268

 
544

 
13,325

 
95

 

 
18,431

Goodwill

 
2,400

 
1,852

 

 
48,124

 

 
52,376

Intangible Assets
1,017

 
5,744

 

 

 
18,989

 

 
25,750

Other current and long-term assets, excluding cash and near cash assets(3)
93,050

 
45,383

 
26,319

 
7,969

 
33,524

 
12,037

 
218,282

Segment Assets
891,576

 
460,272

 
660,071

 
54,223

 
157,293

 
 
 
 
Cash and near cash assets(3)
 
 
 
 
 
 
 
 
 
 
 
 
862,717

Total Assets
 
 
 
 
 
 
 
 
 
 
 
 
3,111,887

______________________
(1)
Operating revenues includes $46.6 million of tangible product sales and operating expenses includes $43.3 million of costs of goods sold.
(2)
Inventories includes raw materials of $2.5 million and work in process of $1.5 million.
(3)
Cash and near cash assets includes cash, cash equivalents, marketable securities, and construction reserve funds.

19

Table of Contents

 
 
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 three months ended
March 31, 2015
 
 
 
 
 
 
 
 
 
 
 
 
 
Operating Revenues:
 
 
 
 
 
 
 
 
 
 
 
 
 
External customers
93,421

 
55,836

 
51,407

 
39,598

 
20,382

 

 
260,644

Intersegment
35

 
771

 

 

 
70

 
(876
)
 

 
93,456

 
56,607

 
51,407

 
39,598

 
20,452

 
(876
)
 
260,644

Costs and Expenses:
 
 
 
 
 
 
 
 
 
 
 
 
 
Operating
74,355

 
41,513

 
37,131

 
33,118

 
13,830

 
(799
)
 
199,148

Administrative and general
13,559

 
3,884

 
6,289

 
562

 
7,136

 
7,457

 
38,887

Depreciation and amortization
15,366

 
6,889

 
6,735

 
980

 
500

 
960

 
31,430

 
103,280

 
52,286

 
50,155

 
34,660

 
21,466

 
7,618

 
269,465

Gains (Losses) on Asset Dispositions and Impairments, Net
(6,649
)
 
1,803

 

 

 

 

 
(4,846
)
Operating Income (Loss)
(16,473
)
 
6,124

 
1,252

 
4,938

 
(1,014
)
 
(8,494
)
 
(13,667
)
Other Income (Expense):
 
 
 
 
 
 
 
 
 
 
 
 
 
Derivative gains (losses), net
(9
)
 
82

 

 
(828
)
 
(776
)
 
(1,465
)
 
(2,996
)
Foreign currency losses, net
(17
)
 
(1,121
)
 
(12
)
 

 
(40
)
 
(803
)
 
(1,993
)
Other, net
(146
)
 

 
29

 

 
8

 
65

 
(44
)
Equity in Earnings (Losses) of 50% or Less Owned Companies, Net of Tax
2,975

 
(274
)
 
1,141

 

 
57

 

 
3,899

Segment Profit (Loss)
(13,670
)
 
4,811

 
2,410

 
4,110

 
(1,765
)
 
 
 
 
Other Income (Expense) not included in Segment Profit (Loss)
 
 
 
 
 
 
 
 
 
(15,054
)
Less Equity Earnings included in Segment Profit (Loss)
 
 
 
 
 
 
 
 
 
(3,899
)
Loss Before Taxes and Equity Earnings
 
 
 
 
 
 
 
(33,754
)
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Capital Expenditures
24,128

 
3,916

 
18,180

 
776

 
3

 
427

 
47,430

 
 
 
 
 
 
 
 
 
 
 
 
 
 
As of March 31, 2015
 
 
 
 
 
 
 
 
 
 
 
 
 
Property and Equipment:
 
 
 
 
 
 
 
 
 
 
 
 


Historical cost
1,062,061

 
485,881

 
454,039

 
47,256

 
3,521

 
30,277

 
2,083,035

Accumulated depreciation
(504,926
)
 
(162,581
)
 
(219,662
)
 
(16,468
)
 
(3,236
)
 
(11,896
)
 
(918,769
)
 
557,135

 
323,300

 
234,377

 
30,788

 
285

 
18,381

 
1,164,266

Construction in progress
92,873

 
25,605

 
218,729

 
1,494

 
234

 
455

 
339,390

Net property and equipment
650,008

 
348,905

 
453,106

 
32,282

 
519

 
18,836

 
1,503,656

Investments, at Equity, and Advances to 50% or Less Owned Companies
118,253

 
101,344

 
221,658

 

 
42,493

 

 
483,748

Inventories
5,360

 
2,171

 
977

 
13,711

 
937

 

 
23,156

Goodwill
13,367

 
2,502

 
1,852

 

 
44,967

 

 
62,688

Intangible Assets
1,515

 
6,692

 
146

 

 
23,602

 

 
31,955

Other current and long-term assets, excluding cash and near cash assets(3)
98,766

 
63,768

 
24,866

 
11,421

 
71,436

 
2,053

 
272,310

Segment Assets
887,269

 
525,382

 
702,605

 
57,414

 
183,954

 
 
 
 
Cash and near cash assets(3)
 
 
 
 
 
 
 
 
 
 
 
 
792,438

Total Assets
 
 
 
 
 
 
 
 
 
 
 
 
3,169,951

______________________
(1)
Operating revenues includes $37.2 million of tangible product sales and operating expenses includes $30.7 million of costs of goods sold.
(2)
Inventories includes raw materials of $1.6 million and work in process of $1.7 million.
(3)
Cash and near cash assets includes cash, cash equivalents, restricted cash, marketable securities, construction reserve funds and Title XI reserve funds.

20

Table of Contents

ITEM 2.
MANAGEMENT’S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS

This Form 10-Q includes “forward-looking statements” within the meaning of the Private Securities Litigation Reform Act of 1995. Certain statements discussed in this Form 10-Q as well as in other reports, materials and oral statements that the Company releases from time to time constitute “forward-looking statements” within the meaning of the Private Securities Litigation Reform Act of 1995. Generally, words such as “anticipate,” “estimate,” “expect,” “project,” “intend,” “believe,” “plan,” “target,” “forecast” and similar expressions are intended to identify forward-looking statements. Such forward-looking statements concern management's expectations, strategic objectives, business prospects, anticipated economic performance and financial condition and other similar matters. These statements are not guarantees of future performance and actual events or results may differ significantly from these statements. Actual events or results are subject to significant known and unknown risks, uncertainties and other important factors, including decreased demand and loss of revenues as a result of a decline in the price of oil and an oversupply of newly built offshore support vessels, additional safety and certification requirements for drilling activities in the U.S. Gulf of Mexico and delayed approval of applications for such activities, the possibility of U.S. government implemented moratoriums directing operators to cease certain drilling activities in the U.S. Gulf of Mexico and any extension of such moratoriums (the “Moratoriums”), weakening demand for the Company’s services as a result of unplanned customer suspensions, cancellations, rate reductions or non-renewals of vessel charters or failures to finalize commitments to charter vessels in response to a decline in the price of oil, an oversupply of newly built offshore support vessels and Moratoriums, increased government legislation and regulation of the Company’s businesses could increase cost of operations, increased competition if the Jones Act is repealed, liability, legal fees and costs in connection with the provision of emergency response services, including the Company’s involvement in response to the oil spill as a result of the sinking of the Deepwater Horizon in April 2010, decreased demand for the Company’s services as a result of declines in the global economy, declines in valuations in the global financial markets and a lack of liquidity in the credit sectors, including, interest rate fluctuations, availability of credit, inflation rates, change in laws, trade barriers, commodity prices and currency exchange fluctuations, the cyclical nature of the oil and gas industry, activity in foreign countries and changes in foreign political, military and economic conditions, changes in foreign and domestic oil and gas exploration and production activity, safety record requirements related to Offshore Marine Services and Shipping Services, decreased demand for Shipping Services due to construction of additional refined petroleum product, natural gas or crude oil pipelines or due to decreased demand for refined petroleum products, crude oil or chemical products or a change in existing methods of delivery, compliance with U.S. and foreign government laws and regulations, including environmental laws and regulations and economic sanctions, the dependence of Offshore Marine Services, Inland River Services, Shipping Services and Illinois Corn Processing on several customers, consolidation of the Company's customer base, the ongoing need to replace aging vessels, industry fleet capacity, restrictions imposed by the Shipping Acts on the amount of foreign ownership of the Company's Common Stock, operational risks of Offshore Marine Services, Inland River Services and Shipping Services, effects of adverse weather conditions and seasonality, the level of grain export volume, the effect of fuel prices on barge towing costs, variability in freight rates for inland river barges, the effect of international economic and political factors on Inland River Services' operations, the effect of the spread between the input costs of corn and natural gas compared with the price of alcohol and distillers grains on Illinois Corn Processing's operations, adequacy of insurance coverage, the potential for a material weakness in the Company's internal controls over financial reporting and the Company's ability to remediate such potential material weakness, the attraction and retention of qualified personnel by the Company, and various other matters and factors, many of which are beyond the Company's control as well as those discussed in Item 1A (Risk Factors) of the Company's Annual report on Form 10-K. It should be understood that it is not possible to predict or identify all such factors. Consequently, the preceding should not be considered to be a complete discussion of all potential risks or uncertainties. Forward-looking statements speak only as of the date of the document in which they are made. The Company disclaims any obligation or undertaking to provide any updates or revisions to any forward-looking statement to reflect any change in the Company's expectations or any change in events, conditions or circumstances on which the forward-looking statement is based, except as required by law. The forward-looking statements in this Form 10-Q should be evaluated together with the many uncertainties that affect the Company’s businesses, particularly those mentioned under “Forward-Looking Statements” in Item 7 on the Company’s Form 10-K and SEACOR’s periodic reporting on Form 8-K (if any), which are incorporated by reference. These statements constitute the Company's cautionary statements under the Private Securities Litigation Reform Act of 1995.
Overview
The Company’s operations are divided into four main business segments – Offshore Marine Services, Inland River Services, Shipping Services, and Illinois Corn Processing ("ICP"). The Company also has activities that are referred to and described under Other that primarily include emergency and crisis services, lending and leasing activities and noncontrolling investments in various other businesses.

21

Table of Contents

Consolidated Results of Operations
The sections below provide an analysis of the Company’s operations by business segment for the three months ("Current Year Quarter") ended March 31, 2016 compared with the three months ("Prior Year Quarter") ended March 31, 2015. See "Item 1. Financial Statements—Note 12. Segment Information" included in Part I of this Quarterly Report on Form 10-Q for consolidating segment tables for each period presented. Capitalized terms used and not specifically defined herein have the same meaning as such defined terms used in the Company's Annual Report on Form 10-K for the year ended December 31, 2015.
Offshore Marine Services
 
Three Months Ended March 31,
 
2016
 
2015
 
$’000
 
%
 
$’000
 
%
Operating Revenues:
 
 
 
 
 
 
 
United States, primarily U.S. Gulf of Mexico
11,954

 
20

 
29,518

 
32

Africa, primarily West Africa
11,045

 
18

 
15,825

 
17

Middle East
10,500

 
18

 
11,572

 
12

Brazil, Mexico, Central and South America
3,234

 
5

 
9,816

 
11

Europe, primarily North Sea
21,408

 
36

 
24,502

 
26

Asia
1,738

 
3

 
2,223

 
2

 
59,879

 
100

 
93,456

 
100

Costs and Expenses:
 
 
 
 
 
 
 
Operating:
 
 
 
 
 
 
 
Personnel
27,558

 
46

 
39,568

 
42

Repairs and maintenance
6,294

 
11

 
8,682

 
9

Drydocking
3,703

 
6

 
6,881

 
8

Insurance and loss reserves
1,878

 
3

 
2,570

 
3

Fuel, lubes and supplies
3,097