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Offshore Marine Services currently has vessels engaged in a variety of duties including vessel decontamination, skimming, lightering, offshore traffic control and accommodation. Offshore Marine Services is also providing technical and video equipment on vessels engaged in the response to allow for instant tracking of assets and surveillance of operations. Aviation Services currently has helicopters providing air support for United States Coast Guard observers undertaking oil spotting and assessment missions and, on an "as needed" basis, transportation for various other officials requiring overflights to assess the response and recovery efforts. Aviation Services is also providing a flight tracking system to monitor the movement of all marine and aviation assets involved in the response. Harbor and Offshore Towing Services has tugs engaged in the decontamination of vessels transiting the region. Offshore Marine Services -- Operating income in the second quarter was $42.9 million on operating revenues of $147.1 million compared with operating income of $20.1 million on operating revenues of $107.2 million in the preceding quarter. Second quarter results included $2.0 million in gains on asset dispositions compared with $12.7 million in gains in the preceding quarter. Excluding the impact of gains on asset dispositions, operating income was $33.4 million higher in the second quarter. Overall operating revenues were $39.9 million higher in the second quarter. Time charter revenues increased by $32.3 million, of which $27.6 million was due to incremental charters in support of the Deepwater Horizon oil spill response. In addition, time charter revenues for the Company's Anchor Handling Towing Supply vessels in the U.S. Gulf of Mexico improved by $7.4 million primarily due to increased spot market activity. Other operating revenues were $7.6 million higher in the second quarter primarily due to the provision of other equipment and services associated with the Deepwater Horizon oil spill response and increased vessel brokerage activity, mainly in West Africa. As of June 10, 2010, the Company had deferred $18.5 million of vessel charter hire scheduled to be paid through the conveyance of a limited net profit interest in developmental oil and gas producing properties owned by a customer. Of this amount, $2.9 million was deferred in the second quarter. The Company expects to defer an additional $3.5 million of vessel charter hire under this arrangement through August 2010. The customer has provided payout estimates, which are contingent upon production, indicating the Company will receive payments of $10.8 million in 2010 and $11.2 million in 2011. Production from the properties commenced in April 2010 and the first payment of $0.1 million was received in June 2010 and recognized as revenue. The Company will recognize revenues as cash is received or earlier should future payments become determinable. Operating expenses were $6.2 million higher in the second quarter primarily due to incremental expenditure associated with the Deepwater Horizon oil spill response, increased brokerage activity and higher repair and maintenance costs. Operating expenses in the first quarter included a $3.3 million accrual for the settlement of litigation, which is pending court approval. The number of days available for charter in the second quarter decreased by eight, or 0.1%. Overall utilization increased from 71.5% to 77.4% and overall average day rates, based on time charter revenues recognized, increased by 22.6% from $11,339 per day to $13,906 per day. As of June 30, 2010, the Company had four vessels cold-stacked in the U.S. Gulf of Mexico compared with 14 as of March 31, 2010. Marine Transportation Services -- Marine Transportation Services reported operating income in the second quarter of $3.3 million on operating revenues of $21.3 million compared with an operating loss of $2.8 million on operating revenues of $19.5 million in the preceding quarter. The increase in operating income was primarily due to a reduction in out-of-service time and expenses incurred for drydockings. During the first quarter, two of the Company's tankers underwent regulatory drydockings, one of which was completed during the quarter and the other being completed in April. A third tanker had a 5-day handover drydocking in January before commencing a long-term bareboat charter. The remaining drydocking program for 2010 consists of two drydockings in the third quarter; one regulatory and the other a short handover for a tanker prior to commencing a long-term bareboat charter. As of June 30, 2010, three of the Company's eight tankers were operating under long-term bareboat charters, four were operating under time charters and one was operating in the spot market. Inland River Services -- Operating income in the second quarter was $6.4 million on operating revenues of $34.6 million compared with operating income of $7.8 million on operating revenues of $33.4 million in the preceding quarter. The decrease in operating income was primarily due to a reduction in loadings early in the quarter resulting in idling a portion of the dry cargo barge fleet. As freight rates improved during May in response to higher demand, the idled barges returned to service and operating expenses increased due to repositioning the dry cargo barge fleet and longer trips. Aviation Services -- Operating income in the second quarter was $5.5 million on operating revenues of $62.4 million compared with operating income of $2.5 million on operating revenues of $50.3 million in the preceding quarter. Operating revenues were higher primarily due to more flight hours in support of offshore oil and gas activities in the U.S. Gulf of Mexico and Alaska, incremental work in support of the Deepwater Horizon oil spill response, increased air medical services activity and the start up of seasonal flightseeing and firefighting operations in Alaska. Revenues from leasing activities improved due to the start up of a new contract in Southeast Asia, and more aircraft, flight hours and maintenance support in South America. Operating expenses were generally in line with the increased activity levels. Environmental Services -- Operating income in the second quarter was $78.9 million on operating revenues of $214.6 million compared with an operating loss of $0.2 million on operating revenues of $28.2 million in the preceding quarter. The improvement in operating results was primarily due to the impact of activities associated with the Deepwater Horizon oil spill response. Commodity Trading and Logistics -- Commodity Trading and Logistics reported a segment profit in the second quarter of $0.5 million on operating revenues of $203.1 million compared with a segment loss of $4.6 million on operating revenues of $143.0 million in the preceding quarter. Results from energy trading activities, including the Company's equity interest in its alcohol manufacturing facility joint venture, improved by $4.6 million compared with the preceding quarter. Results from sugar trading activities also improved while results from rice trading activities were consistent with the preceding quarter. Harbor and Offshore Towing Services -- Operating income in the second quarter was $4.9 million on operating revenues of $19.0 million compared with operating income of $2.7 million on operating revenues of $17.4 million in the preceding quarter. The improvement in operating revenues was primarily due to activities associated with the Deepwater Horizon oil spill response. Operating income also benefited from gains realized on the sale of an ocean liquid tank barge. Interest Expense -- Interest expense in the second quarter was lower primarily due to the redemption of certain of the Company's Title XI Bonds in the second quarter. Marketable Securities -- Marketable security losses were $5.4 million in the second quarter compared with gains of $2.0 million in the preceding quarter. The losses in the second quarter were primarily the result of losses on long equity positions. Derivatives -- Derivative losses, net were $4.7 million in the second quarter primarily on foreign currency option and futures contracts and U.S. Treasury Note and Bond futures and option contracts. Foreign Currency Losses, net -- Foreign currency losses, net were $7.5 million in the second quarter primarily due to the weakening of the euro against the U.S. dollar. Stock Repurchases -- During the second quarter, the Company purchased 1,366,200 shares of its common stock at an average price of $73.25 per share. At the end of the quarter, 21,218,284 shares of SEACOR's common stock remained outstanding. Title XI Debt -- On April 30, 2010, the Company redeemed all of the outstanding bonds on two of the Company's double-hull product tankers for $63.0 million, including a make whole premium. Capital Commitments -- The Company's unfunded capital commitments as of June 30, 2010 consisted primarily of offshore support vessels, helicopters, an aircraft, an interest in a dry-bulk articulated tug-barge, a harbor and offshore tug and other equipment, and totaled $247.0 million, of which $115.9 million is payable during 2010 and the balance payable through 2013. Of the total unfunded capital commitments, $2.8 million may be terminated without further liability. As of June 30, 2010, the Company held balances of cash, cash equivalents, restricted cash, marketable securities, construction reserve funds and title XI reserve funds totaling $721.6 million. SEACOR is a global provider of equipment and services primarily supporting the offshore oil and gas and marine transportation industries. SEACOR offers customers a diversified suite of services including offshore marine, marine transportation, inland river, aviation, environmental, commodity trading and logistics and offshore and harbor towing. SEACOR is focused on providing highly responsive local service combined with the highest safety standards, innovative technology, modern, efficient equipment and dedicated professional employees. SEACOR Holdings |
SEACOR Holdings Announces Second Quarter Results