FORWARD-LOOKING STATEMENT





In accordance with the safe harbor provisions of the Private Securities
Litigation Reform Act of 1995, this Quarterly Report on Form 10-Q and the
information incorporated herein by reference contain certain forward-looking
statements which reflect our current view with respect to future events and
future financial performance. Forward-looking statements are all statements
other than statements of historical fact. All such forward-looking statements
are subject to risks and uncertainties, many of which are beyond the control of
the Company, and our future results of operations could differ materially from
our historical results or current expectations reflected by such forward-looking
statements. Some of these risks and uncertainties include, without limitation,
the risks related to fluctuations in worldwide energy demand and oil and natural
gas prices, and continuing depressed levels of oil and natural gas prices
without a clear indication of if, or when, prices will recover to a level to
support renewed offshore exploration activities; fleet additions by competitors
and industry overcapacity; our limited capital resources available to replenish
our asset base as needed, including through acquisitions or vessel construction,
and to fund our capital expenditure needs; uncertainty of global financial
market conditions and potential constraints in accessing capital or credit if
and when needed with favorable terms, if at all; changes in decisions and
capital spending by customers in the energy industry and the industry
expectations for offshore exploration, field development and production;
consolidation of our customer base; loss of a major customer; changing customer
demands for vessel specifications, which may make some of our older vessels
technologically obsolete for certain customer projects or in certain markets;
rapid technological changes; delays and other problems associated with vessel
maintenance; the continued availability of qualified personnel and our ability
to attract and retain them; the operating risks normally incident to our lines
of business, including the potential impact of liquidated counterparties; our
ability to comply with covenants in our indentures and other debt instruments;
acts of terrorism and piracy; the impact of regional or global public health
crises or pandemics; the impact of potential information technology,
cybersecurity or data security breaches; integration of acquired businesses and
entry into new lines of business; disagreements with our joint venture partners;
natural disasters or significant weather conditions; unsettled political
conditions, war, civil unrest and governmental actions, such as expropriation or
enforcement of customs or other laws that are not well developed or consistently
enforced; the risks associated with our international operations, including
local content, local currency or similar requirements especially in higher
political risk countries where we operate; interest rate and foreign currency
fluctuations; labor changes proposed by international conventions; increased
regulatory burdens and oversight; changes in laws governing the taxation of
foreign source income; retention of skilled workers; enforcement of laws related
to the environment, labor and foreign corrupt practices; the potential liability
for remedial actions or assessments under existing or future environmental
regulations or litigation; the effects of asserted and unasserted claims and the
extent of available insurance coverage; and the resolution of pending legal
proceedings.



Forward-looking statements, which can generally be identified by the use of such
terminology as "may," "can," "potential," "expect," "project," "target,"
"anticipate," "estimate," "forecast," "believe," "think," "could," "continue,"
"intend," "seek," "plan," and similar expressions contained in this Quarterly
Report on Form 10-Q, are not guarantees or assurances of future performance or
events. Any forward-looking statements are based on our assessment of current
industry, financial and economic information, which by its nature is dynamic and
subject to rapid and possibly abrupt changes, which we may or may not be able to
control. Further, we may make changes to our business plans that could or will
affect our results. While management believes that these forward-looking
statements are reasonable when made, there can be no assurance that future
developments that affect us will be those that we anticipate and have
identified. The forward-looking statements should be considered in the context
of the risk factors listed above, discussed in this Quarterly Report on Form
10-Q, and discussed in our Annual Report on Form 10-K for the year ended
December 31, 2019, filed with the SEC on March 2, 2020, as updated by subsequent
filings with the SEC. Investors and prospective investors are cautioned not to
rely unduly on such forward-looking statements, which speak only as of the date
hereof. Management disclaims any obligation to update or revise any
forward-looking statements contained herein to reflect new information, future
events or developments.



In certain places in this Quarterly Report on Form 10-Q, we may refer to reports
published by third parties that purport to describe trends or developments in
energy production and drilling and exploration activity and we specifically
disclaim any responsibility for the accuracy and completeness of such
information and have undertaken no steps to update or independently verify such
information.

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The following information contained in this Quarterly Report on Form 10-Q should
be read in conjunction with the unaudited condensed consolidated financial
statements and notes thereto included in Part 1, Item 1 of this Quarterly Report
on Form 10-Q and related disclosures and our Annual Report on Form 10-K for the
year ended December 31, 2019, filed with the SEC on March 2, 2020.

About Tidewater





Our vessels and associated vessel services provide support for all phases of
offshore oil and natural gas exploration, field development and production.
These services include towing of, and anchor handling for, mobile offshore
drilling units; transporting supplies and personnel necessary to sustain
drilling, workover and production activities; offshore construction and seismic
and subsea support; and a variety of specialized services such as pipe and cable
laying. In addition, we have one of the broadest geographic operating footprints
in the offshore vessel industry. Our global operating footprint allows us to
react quickly to changing local market conditions and to be responsive to the
changing requirements of the many customers with which we believe we have strong
relationships. We are also one of the most experienced international operators
in the offshore energy industry with a history spanning over 60 years.

At June 30, 2020, we owned 192 vessels (excluding 3 joint venture vessels), 146
of which are available to serve the global energy industry and 46 of which are
available for immediate sale. The average age of our 146 active vessels at June
30, 2020 is 10.1 years.

Principal Factors That Drive Our Results



Our revenues, net earnings and cash flows from operations are largely dependent
upon the activity level of our offshore marine vessel fleet. As is the case with
the numerous other vessel operators in our industry, our business activity is
largely dependent on the level of exploration, field development and production
activity of our customers. Our customers' business activity, in turn, is
dependent on current and expected crude oil and natural gas prices, which
fluctuate depending on expected future levels of supply and demand for crude oil
and natural gas, and on estimates of the cost to find, develop and produce crude
oil and natural gas reserves.

Our revenues in all segments are driven primarily by our fleet size, vessel utilization and day rates. Because a sizeable portion of our operating and depreciation costs do not change proportionally with changes in revenue, our operating profit is largely dependent on revenue levels.





Operating costs consist primarily of crew costs, repair and maintenance costs,
insurance costs, fuel, lube oil and supplies costs and other vessel operating
costs. Fleet size, fleet composition, geographic areas of operation, supply and
demand for marine personnel, and local labor requirements are the major factors
which affect overall crew costs in all segments. In addition, our newer, more
technologically sophisticated vessels generally require a greater number of
specially trained, more highly compensated fleet personnel than our older,
smaller and less sophisticated vessels. Crew costs may increase if competition
for skilled personnel intensifies, though a weaker offshore energy market should
somewhat mitigate any potential inflation of crew costs.



Costs related to the recertification of vessels are deferred and amortized over
30 months on a straight-line basis. Maintenance costs incurred at the time of
the recertification drydocking that are not related to the recertification of
the vessel are expensed as incurred. Costs related to vessel improvements that
either extend the vessel's useful life or increase the vessel's functionality
are capitalized and depreciated.



Insurance costs are dependent on a variety of factors, including our safety
record and pricing in the insurance markets, and can fluctuate over time. Our
vessels are generally insured for up to their estimated fair market value in
order to cover damage or loss. We also purchase coverage for potential
liabilities stemming from third-party losses with limits that we believe are
reasonable for our operations, but do not generally purchase business
interruption insurance or similar coverage. Insurance limits are reviewed
annually, and third-party coverage is purchased based on the expected scope of
ongoing operations and the cost of third-party coverage.



Fuel and lube costs can also fluctuate in any given period depending on the
number and distance of vessel mobilizations, the number of active vessels off
charter, drydockings, and changes in fuel prices. We also incur vessel operating
costs that are aggregated as "other" vessel operating costs. These costs consist
of brokers' commissions, including commissions paid to unconsolidated joint
venture companies, training costs, satellite communication fees, agent fees,
port fees and other miscellaneous costs. Brokers' commissions are incurred
primarily in our non-United States operations where brokers

                                       19

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sometimes assist in obtaining work. Brokers generally are paid a percentage of
day rates and, accordingly, commissions paid to brokers generally fluctuate in
accordance with vessel revenue.



Sonatide Joint Venture (Angola)





We previously disclosed the significant financial and operational challenges
that we confront with respect to operations in Angola, as well as steps that we
have taken to address or mitigate those risks. Most of our attention has been
focused in three areas: (i) reducing the net receivable balance due from
Sonatide, our Angolan joint venture with Sonangol, for vessel services; (ii)
reducing the foreign currency risk created by virtue of provisions of Angolan
law that require that payment for a portion of the services provided by Sonatide
be paid in Angolan kwanza; and (iii) optimizing opportunities, consistent with
Angolan law, for services provided by us to be paid for directly in U.S.
dollars. The amounts due from Sonatide are denominated in U.S. dollars; however,
the underlying third-party customer payments to Sonatide were satisfied, in
part, in Angolan kwanzas. We and Sonangol, our partner in Sonatide, have had
discussions regarding how the net losses from the devaluation of certain Angolan
kwanza denominated accounts should be shared. In late 2019, we were informed
that, as part of a broad privatization program, Sonangol intends to seek to
divest itself from the Sonatide joint venture.



In the second quarter of 2020, Sonatide declared a $35.0 million dividend. On
June 22, 2020, Sonangol received $17.9 million and we received $17.1
million. All of our share of the dividend is reflected as dividend income from
unconsolidated company in the consolidated statement of operations because (i)
our investment in the Sonatide joint venture had previously been written down to
zero, (ii) the distributions are not refundable and (iii) we are not liable for
the obligations of or committed to provide financial support to the Sonatide
joint venture. In addition, as a result of the aforementioned dividend payment,
the cash balances of the joint venture were significantly reduced and we
determined that, as a result, a significant portion of our net due from Sonatide
balance was compromised. On June 30, 2020, we recorded a $41.5 million affiliate
credit loss impairment expense.



Refer to Note (7) of Notes to Unaudited Condensed Consolidated Financial Statements included in Part I, Item 1 of this Quarterly Report on Form 10-Q for further details on the Sonatide joint venture.





DTDW Joint Venture (Nigeria)



We own 40% of the DTDW joint venture in Nigeria. Our partner, who owns 60%, is a
Nigerian national. DTDW owns one offshore service vessel and has long term debt
of $5.6 million which is secured by the vessel and guarantees from the DTDW
partners. We also operate company owned vessels in Nigeria for which our partner
receives a commission. As of June 30, 2020, we had only one company owned vessel
operating in Nigeria and the DTDW owned vessel was not employed. At the
beginning of 2020 we had expected that we would be operating numerous vessels in
Nigeria, but in the second quarter of 2020 the Covid pandemic and resulting oil
price reduction caused our primary customer in Nigeria to eliminate all planned
operations for 2020. As a result, the near term cash flow projections indicate
that DTDW does not have sufficient funds to meet its obligations to us or to the
holder of its long term debt. In the June 2020 DTDW board meeting neither of the
DTDW partners indicated willingness to contribute additional funds to DTDW to
meet its obligations. Therefore, we have recorded an affiliate credit loss
impairment expense for the entire net due from DTDW balance as of June 30, 2020
totaling $12.1 million. In addition, based on our analysis we have determined
that DTDW will be unable to pay its debt obligation and the debt will not be
satisfied by liquidating the vessel and, as a result, we recorded additional
impairment expense of $2.0 million for our expected share of the obligation
guarantee.



Refer to Note (7) of Notes to Unaudited Condensed Consolidated Financial Statements included in Part I, Item 1 of this Quarterly Report on Form 10-Q for further details on the Nigeria joint venture.

Industry Conditions and Outlook





Our business is directly impacted by the level of activity in worldwide offshore
oil and natural gas exploration, development and production, which in turn is
influenced by trends in oil and natural gas prices. In addition, oil and natural
gas prices are affected by a host of geopolitical and economic forces, including
the fundamental principles of supply and demand. In particular, the oil price is
significantly influenced by actions of the Organization of Petroleum Exporting
Countries, or OPEC. Prices are subject to significant uncertainty and, as a
result, are extremely volatile. The industry experienced a severe downturn
beginning in late 2014 that lasted through 2018 with prices falling into the
high $20's per barrel before recovering to average between $50.00 and $65.00 per
barrel in 2019. We had expected to begin to experience consistent operating cash
flow in 2020.

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In early 2020, it became evident that a novel coronavirus originating in Asia
(COVID-19) could become a pandemic with worldwide reach. By mid-March, when the
World Health Organization declared the outbreak to be a pandemic (the "COVID-19
pandemic"), much of the industrialized world had initiated severe measures to
lessen its impact. The ongoing COVID-19 pandemic has created significant
volatility, uncertainty, and economic disruption during the first half of 2020.

With respect to our particular sector, the COVID-19 pandemic has resulted in a
much lower demand for oil as national, regional, and local governments impose
travel restrictions, border closings, restrictions on public gatherings, stay at
home orders, and limitations on business operations in order to contain its
spread. During this same time period, oil-producing countries have struggled to
reach consensus on worldwide production levels, resulting in both a market
oversupply of oil and a precipitous fall in oil prices.

Combined, these conditions adversely affected our operations and business
beginning in late March 2020 and continuing through the second quarter of 2020
and we expect our operations and business during the remainder of 2020 to be
negatively impacted. The reduction in demand for hydrocarbons together with an
unprecedented decline in the price of oil has resulted in our primary customers,
the oil and gas companies, making material reductions to their planned spending
on offshore projects, compounding the effect of the virus on offshore
operations. Further, these conditions, separately or together, are expected to
continue to impact the demand for our services, the utilization and/or rates we
can achieve for our assets and services, and the outlook for our industry in
general.

As the pandemic has spread throughout the world, its impact on one or more of
our locations, including our vessels, has affected our operations. We have
implemented various protocols for both onshore and offshore personnel in efforts
to limit this impact, but there is no assurance that those efforts will be fully
successful. The spread of COVID-19 to our onshore workforce could prevent us
from supporting our offshore operations, we may experience reduced productivity
as our onshore personnel continue to work remotely, and any spread to our key
management personnel may disrupt our business. Any outbreak on our vessels may
result in the vessel, or some or all of a vessel crew, being quarantined and
therefore impede the vessel's ability to generate revenue. We have experienced
challenges in connection with our offshore crew changes due to health and travel
restrictions related to COVID-19, and those challenges and/or restrictions are
expected to continue despite our efforts at mitigating them. To the extent the
COVID-19 pandemic adversely affects our operations and business, it may also
have the effect of heightening many of the other risks set forth in our SEC
filings.

The effect on our business includes lockdowns of shipyards where we have vessels
performing drydocks which will delay vessels returning to service and the
cancellation and/or temporary delay of certain revenue vessel contracts allowed
either under the contract provisions or by mutual agreement with our customers.
These cancellations and delays affect approximately 19% of our 2020 contracts
with durations in excess of three months which typically comprise over 90% of
our contractual revenue. It is possible that there will be additional
cancellations or delays.



As a company, we have undertaken the following temporary measures to assist us in weathering the COVID 19 pandemic and allow us to recover as soon as possible:

• Planned capital and dry dock expenditures tied to contracts referenced above

will be temporarily delayed or cancelled. As a result of the ongoing

contract cancellations and delays we have postponed drydocks expected to

cost approximately $28.0 million in 2020. It is possible that additional

planned drydocks will be cancelled or delayed due to contract cancellations


      or delays. We cannot predict the number or cost of any additional
      cancellations or delays.

• We have the ability to rapidly respond to contract cancellations and

delays. We have or will remove the crews and shut down all operations,

depending on contract terms, on vessels associated with cancelled or delayed

contracts. We are also in the process of evaluating our general and

administrative costs to reflect the current demand for our offshore support

vessels.




The full impact of the COVID-19 pandemic is unknown and is rapidly evolving. The
extent to which it impacts our business and operations will depend on the
severity, location, and duration of the effects and spread of the pandemic
itself, the actions undertaken by national, regional, and local governments and
health officials to contain the virus or treat its effects, and how quickly and
to what extent economic conditions improve and normal business and operating
conditions resume. As we cannot predict the duration or scope of this pandemic,
the anticipated negative financial impact to our operating results cannot be
reasonably estimated but could be both material and long-lasting.

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We consider these events to be indicators that the value of our offshore vessel
fleet may be impaired. As a result, in the first quarter of 2020 we performed a
Step 1 evaluation of our offshore fleet under FASB Accounting Standards
Codification 360, which governs the methodology for identifying and recording
impairment of long-lived assets to determine if any of our asset groups have net
book value in excess of undiscounted future net cash flows. Our evaluation did
not indicate impairment of any of our asset groups. Our evaluation did, however,
identify one asset group with a net book value of approximately $40.0 million
where the undiscounted future net cash flows total was within 10% of the net
book value of that asset group as of March 31, 2020. In the second quarter of
2020, we identified 22 vessels in our active fleet that were designated as
assets held for sale. Several of the identified vessels were in the asset group
that had indications of potential impairment at March 31, 2020. In conjunction
with reclassifying the vessels to assets held for sale and revaluing the
vessels' carrying value to net realizable value, we recorded $49.9 million of
impairment expense. In addition, at June 30, 2020, we performed another Step 1
impairment evaluation of our offshore fleet and did not identify any asset
groups that had carrying values in excess of undiscounted future net cash flows.
We also did not identify any asset group that had undiscounted future net cash
flows within 10% of the net book value of that asset group. The eventual impact
of the oil price reduction and the COVID 19 pandemic on our future operations is
not known. Depending on the severity of the impact, our expected cash flows in
future periods could indicate impairment of one or more asset groups in our
vessel fleet. We will continue to monitor the expected future cash flows and the
fair market value of our asset groups for impairment.

Results of Operations - Three Months Ended June 30, 2020 compared to June 30, 2019





Revenues for the quarters ended June 30, 2020 and 2019, were $102.3 million and
$125.9 million, respectively. The decrease in revenue is primarily due to
decreases in our West Africa segment, with 8 less active vessels and our
Europe/Mediterranean segment, with 14 less active vessels. Both segments were
significantly affected by the decrease in demand caused by the
pandemic. Overall, we had 25 less average active vessels in the second quarter
of 2020 than in the second quarter of 2019. Active utilization decreased from
79.3% in 2019 compared to 74.5% in 2020.



Vessel operating costs for the quarters ended June 30, 2020 and 2019, were $64.8
million and $80.4 million, respectively. The decrease is primarily due to a
decrease in vessel activity, as we have 25 less active vessels in our fleet in
the first quarter 2020 largely due to the downturn caused by the pandemic.



Depreciation and amortization expense for the quarters ended June 30, 2020 and
2019, was $28.1 million and $25.0 million, respectively. The decrease in
depreciation from the sale in 2019 of over 40 vessels and the reclassification
of an additional 46 vessels at year end 2019 from property and equipment to
assets held for sale was more than offset by the increase in amortization
expense related to deferred drydock expenditures.



General and administrative expenses for the quarters ended June 30, 2020 and
2019, were $17.6 million and $23.7 million, respectively. The decrease is
primarily due to decreased personnel and benefit costs related to the
significant restructuring of our executive management and corporate
administrative functions in 2019 and cost cutting measures being implemented due
to the current downturn.



Included in gain on asset dispositions, net for the quarter ended June 30, 2020,
are $1.7 million of net gains from the disposal of 16 vessels and other assets.
During the quarter ended June 31, 2019, we recognized losses of $0.5 million
related to the disposal of 18 vessels and other assets.



In the three months ended June 30, 2020 we recorded $55.5 million of impairment
expense related to valuation of our assets held for sale, $53.6 million
affiliate credit loss impairment expense relating to the valuation of our net
receivables from our joint ventures in Africa and $2.0 million of impairment
related to a guarantee of long term debt of one of our African joint ventures.



We recorded $17.1 million of dividend income from one of our African joint ventures in the three months ended June 30, 2020.





In November 2019, we paid down $125.0 million of our Senior Notes. This reduced
our interest expense by $1.6 million for the three months ended June 30. 2020
compared to the three months ended June 30, 2019. In addition, the reduction in
cash plus a reduction in interest rates received on our cash balances reduced
our interest income by $1.2 million for the same period.



During the quarter ended June 30, 2020 we recognized foreign exchange losses of
$2.0 million and during the quarter ended June 30, 2019 we recognized de minimis
foreign exchange gains.

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The tax expense for the three months ending June 30, 2020 was $2.7 million compared to $5.5 million for the three months ending June 30,2019. The decrease is due to lower income.

Results of Operations - Six Months Ended June 30, 2020 compared to June 30, 2019





Revenues for the six months ended June 30, 2020 and 2019, were $218.7 million
and $248.0 million, respectively. The decrease in revenue is primarily due to
decreases in our West Africa segment, with 9 less active vessels and our
Europe/Mediterranean segment, with 10 less active vessels. Both segments were
significantly affected by the decrease in demand caused by the pandemic.
Overall, we had 20 less average active vessels in the six months ended June 30,
2020 than in the six months ended June 30, 2019. Active utilization decreased
from 79.9% in 2019 compared to 76.6% in 2020.



Vessel operating costs for the six months ended June 30, 2020 and 2019, were
$143.6 million and $162.6 million, respectively. decrease is primarily due to a
decrease in vessel activity, as we have 20 less active vessels in our fleet in
the six months of 2020.



Depreciation and amortization expense for the six months ended June 30, 2020 and
2019, was $55.3 million and $48.0 million, respectively. The decrease in
depreciation from the sale in 2019 of over 40 vessels and the reclassification
at year end 2019 of an additional 46 vessels from property and equipment to
assets held for sale was more than offset by the increase in amortization
expense related to deferred drydock expenditures.



General and administrative expenses for the six months ended June 30, 2020 and
2019, were $39.0 million and $50.8 million, respectively. The decrease is
primarily due to decreased personnel and benefit costs related to the
significant restructuring of our executive management and corporate
administrative functions in 2019 and cost cutting measures being implemented due
to the current downturn.



Included in gain on asset dispositions, net for the six months ended June 30,
2020, are $7.0 million of net gains from the disposal of 25 vessels and other
assets. During the six months ended June 31, 2019, we recognized net gains of
$0.8 million related to the disposal of 34 vessels and other assets.



In the six months ended June 30, 2020 we recorded $65.7 million of impairment
expense related to valuation of our assets held for sale, $53.6 million
affiliate credit loss impairment expense relating to the valuation of our net
receivables from our joint ventures in Africa and $2.0 million of impairment
related to a guarantee of long term debt of one of our African joint ventures.



We recorded $17.1 million of dividend income from one of our African joint ventures in the six months ended June 30, 2020.





In November 2019, we paid down $125.0 million of our Senior Notes. This reduced
our interest expense by $3.2 million for the six months ended June 30. 2020
compared to the six months ended June 30, 2019. In addition, the reduction in
cash plus a reduction in interest rates received on our cash balances reduced
our interest income by $3.5 million for the same period.



During the six months ended June 30, 2020 we recognized foreign exchange losses of $1.2 million and during the six months ended June 30, 2019 we recognized foreign exchange losses of $0.5 million.

The tax benefit for the six months ending June 30, 2020 was $2.4 million compared to a tax expense of $11.4 million for the six months ending June 30,2019. The decrease in expense is related to changes in tax laws (primarily Cares Act refund) and also change in income.







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The following table compares vessel revenues and vessel operating costs by geographic segment for our owned and operated vessel fleet and the related percentage of vessel revenue for the periods indicated:






                          Three Months Ended            Three Months Ended             Six Months Ended            Six Months Ended
                             June 30, 2020                 June 30, 2019                 June 30, 2020               June 30, 2019

(In thousands)                                 %                             %                            %                           %
Vessel revenues:
Americas               $     34,044           34 %   $     35,199           28 %    $    65,903          31 %   $    70,477          29 %
Middle East/Asia
Pacific                      23,983           24 %         20,449           17 %         48,811          23 %        40,905          17 %
Europe/Mediterranean         20,620           20 %         35,027           28 %         50,111          24 %        63,585          26 %
West Africa                  22,328           22 %         32,966           27 %         48,124          23 %        68,336          28 %
Total vessel
revenues               $    100,975          100 %   $    123,641          100 %    $   212,949         100 %   $   243,303         100 %
Vessel operating
costs:
Americas:
Crew costs             $     13,138           39 %   $     16,008           45 %    $    27,324          41 %   $    33,107          47 %
Repair and
maintenance                   1,703            5 %          2,328            7 %          3,874           6 %         5,948           8 %
Insurance                       427            1 %         (1,118 )         (3 )%           844           1 %          (378 )        (1 )%
Fuel, lube and
supplies                      1,373            4 %          2,115            6 %          3,988           6 %         4,561           7 %
Other                         1,956            6 %          2,772            8 %          4,629           7 %         5,543           8 %
                       $     18,597           55 %   $     22,105           63 %    $    40,659          62 %   $    48,781          69 %
Middle East/Asia
Pacific:
Crew costs             $      8,726           36 %   $      8,986           44 %    $    18,811          39 %   $    17,613          43 %
Repair and
maintenance                   2,196            9 %          1,673            8 %          4,782          10 %         3,254           8 %
Insurance                       739            3 %            186            1 %          1,330           3 %           776           2 %
Fuel, lube and
supplies                      1,405            6 %          2,350           12 %          4,070           8 %         4,685          11 %
Other                         2,412           10 %          1,844            9 %          4,108           8 %         3,577           9 %
                       $     15,478           55 %   $     15,039           74 %    $    33,101          68 %   $    29,905          73 %
Europe/Mediterranean
:
Crew costs             $      9,707           47 %   $     13,001           37 %    $    21,403          43 %   $    26,060          41 %
Repair and
maintenance                   1,278            6 %          3,914           11 %          4,419           9 %         6,491          10 %
Insurance                       420            2 %            693            2 %            851           2 %         1,253           2 %
Fuel, lube and
supplies                        924            4 %          1,314            4 %          2,022           4 %         3,205           5 %
Other                         1,547            8 %          2,902            8 %          4,069           8 %         5,897           9 %
                       $     13,876           67 %   $     21,824           62 %    $    32,764          65 %   $    42,906          67 %
West Africa:
Crew costs             $      7,120           32 %   $      9,196           28 %    $    15,640          32 %   $    18,555          27 %
Repair and
maintenance                   1,479            7 %          2,996            9 %          4,179           9 %         4,919           7 %
Insurance                       424            2 %            989            3 %            770           2 %         1,277           2 %
Fuel, lube and
supplies                      2,681           12 %          2,672            8 %          6,055          13 %         5,346           8 %
Other                         5,119           23 %          5,618           17 %         10,431          22 %        10,953          16 %
                       $     16,823           75 %   $     21,471           65 %    $    37,075          77 %   $    41,050          60 %
Vessel operating
costs:
Crew costs             $     38,691           38 %   $     47,191           38 %    $    83,178          39 %   $    95,335          39 %
Repair and
maintenance                   6,656            7 %         10,911            9 %         17,254           8 %        20,612           9 %
Insurance                     2,010            2 %            750            1 %          3,795           2 %         2,928           1 %
Fuel, lube and
supplies                      6,383            6 %          8,451            7 %         16,135           8 %        17,797           7 %
Other                        11,034           11 %         13,136           10 %         23,237          11 %        25,970          11 %
Total vessel
operating costs        $     64,774           64 %   $     80,439           65 %    $   143,599          67 %   $   162,642          67 %




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The following table presents general and administrative expenses in our four
geographic segments both individually and in total and the related general and
administrative expenses as a percentage of the vessel revenues of each segment
and in total for the three and six months ended June 30, 2020 and 2019:



                                     Three Months Ended                                   Six Months Ended
                           June 30, 2020             June 30, 2019             June 30, 2020             June 30, 2019
(In thousands)                             %                         %                         %                         %
Segment general and
administrative
expenses:
Americas               $   2,869           8 %   $   3,679          10 %   $   6,334          10 %   $   7,051          10 %
Middle East/Asia
Pacific                    2,261           9 %       2,218          11 %       4,795          10 %       4,521          11 %
Europe/Mediterranean       1,700           8 %       2,638           8 %       3,938           8 %       5,984           9 %
West Africa                2,741          12 %       3,297          10 %       6,742          14 %       6,529          10 %
Total segment
general and
administrative
expenses               $   9,571           9 %   $  11,832          10 %   $  21,809          10 %   $  24,085          10 %




The following table presents segment depreciation and amortization expense by
our four geographic segments, the related segment vessel depreciation and
amortization expense as a percentage of segment vessel revenues, total segment
depreciation and amortization expense and the related total segment depreciation
and amortization expense as a percentage of total vessel revenues for the three
and six months ended June 30, 2020 and 2019:



                                     Three Months Ended                                   Six Months Ended
                           June 30, 2020             June 30, 2019             June 30, 2020             June 30, 2019
(In thousands)                             %                         %                         %                         %
Segment depreciation
and amortization
expense:
Americas               $   8,073          24 %   $   6,515          19 %   $  15,569          24 %   $  12,776          18 %
Middle East/Asia
Pacific                    5,645          24 %       5,319          26 %      11,172          23 %       9,769          24 %
Europe/Mediterranean       6,793          38 %       7,741          22 %      13,612          27 %      15,187          24 %
West Africa                6,750          24 %       5,100          15 %      13,154          27 %       9,543          14 %
Total segment
depreciation and
amortization expense   $  27,261          27 %   $  24,675          20 %   $  53,507          25 %   $  47,275          19 %




The following table compares operating loss and other components of loss and its
related percentage of total revenue for the three and six months ended June 30,
2020 and 2019:



                                          Three Months Ended                                      Six Months Ended
                               June 30, 2020               June 30, 2019              June 30, 2020               June 30, 2019
(In thousands)                                  %                          %                           %                          %
Vessel operating profit
(loss):
Americas                   $    4,505           4 %    $   2,900           2 %    $    3,341           2 %    $   1,870           1 %
Middle East/Asia Pacific          599           1 %       (2,127 )        (1 )%         (257 )         0 %       (3,289 )        (1 )%
Europe/Mediterranean           (1,750 )        (2 %)       2,824           2 %          (203 )         0 %         (493 )         0 %
West Africa                    (3,984 )        (4 %)       3,099           3 %        (8,847 )        (4 %)      11,214           5 %
Other operating profit          1,198           1 %        1,625           1 %         2,919           1 %        3,330           1 %
                                  568           1 %        8,321           7 %        (3,047 )        (1 %)      12,632           5 %
Corporate expenses             (8,910 )        (9 %)     (12,221 )       (10 )%      (18,952 )        (9 %)     (27,422 )       (11 )%
Gain on asset
dispositions, net               1,660           2 %         (494 )         0 %         6,991           3 %          776           0 %
Affiliate credit loss
impairment expense            (53,581 )       (52 %)           -           0 %       (53,581 )       (24 %)           -           0 %
Affiliate guarantee
obligation                     (2,000 )        (2 %)           -           0 %        (2,000 )        (1 %)           -           0 %
Long-lived asset
impairments                   (55,482 )       (54 %)           -           0 %       (65,689 )       (30 %)           -           0 %
Operating loss             $ (117,745 )      (115 %)   $  (4,394 )        (3 %)   $ (136,278 )       (62 %)   $ (14,014 )        (6 %)






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Results for three months ended June 30, 2020 compared to June 30, 2019





Americas Segment Operations. Vessel revenues in the Americas segment decreased
3%, or $1.2 million, during the quarter ended June 30, 2020, as compared to the
quarter ended June 30, 2019. This decrease is primarily the result of less
demand due to the pandemic. We had 5 less active vessels in the quarter ended
March 31, 2020 than the comparable prior year period.



Vessel operating profit for the Americas segment for the quarter ended June 30,
2020 was $4.5 million, which was $1.6 million more than the operating profit for
the quarter ended June 30, 2019. The higher operating profit was due to a $3.5
million decrease in operating expenses, resulting from intensive cost saving
measures taken in the second quarter of 2020 in response to the effect of the
pandemic and a $0.8 million reduction in general and administrative costs
primarily due to our ongoing cost saving initiatives as we react to the current
downturn.



Middle East/Asia Pacific Segment Operations. Vessel revenues in the Middle
East/Asia Pacific segment increased 17%, or $3.5 million, during the quarter
ended June 30, 2020, as compared to the quarter ended June 30, 2019. Active
utilization for the quarter ended June 30, 2020 increased to 75.9% from 74.7%,
average day rates increased almost 10% and average active vessels in the segment
increased by two vessels.


The Middle East/Asia Pacific segment reported an operating profit of $0.6 million for the quarter ended June 30, 2020, compared to an operating loss of $2.1 million for the quarter ended June 30, 2019 primarily due to increased revenue. The current downturn to this point has not impacted this segment's results.

Europe/Mediterranean Segment Operations. Vessel revenues in the
Europe/Mediterranean segment decreased 41%, or $14.4 million, during the quarter
ended June 30, 2020, as compared to the quarter ended June 30, 2019. The
decreased revenue was primarily attributable to 14 less active vessels. Average
day rates during these same periods decreased 2% because of decreased demand,
effected by the pandemic, for vessels in the North Sea and Mediterranean. Active
utilization increased two percentage points during the quarter ended June 30,
2020 compared to the quarter ended June 30, 2019.



The Europe/Mediterranean segment reported an operating loss of $1.8 million for
the quarter ended June 30, 2020, compared to an operating profit of $2.8 million
for the quarter ended June 30, 2019 due to decreased revenue partially offset by
$7.9 million in decreased operating costs, primarily due to lower personnel and
repair and maintenance costs.



West Africa Segment Operations. Vessel revenues in the West Africa segment
decreased 32% or $10.6 million, during the quarter ended June 30, 2020, as
compared to the quarter ended June 30, 2019. The West Africa active vessel fleet
decreased by 8 vessels during the comparative periods. West Africa segment
active utilization decreased as well from 76% during the second quarter of 2019
to 55% during the second quarter of 2020. Average day rates increased 13 percent
due to the change in the mix of remaining contracts. The decreases in revenue
are almost entirely the result of lower demand caused by the effect of the
pandemic.



Vessel operating profit for the West Africa segment decreased from $3.1 million
for the quarter ended June 30, 2019 to an operating loss of $4.0 million in the
quarter ended June 30, 2020 primarily due to decreased revenue, partially offset
by lower operating costs.


Results for six months ended June 30, 2020 compared to June 30, 2019





Americas Segment Operations. Vessel revenues in the Americas segment decreased
6%, or $4.6 million, during the six months ended June 30, 2020, as compared to
the six months ended June 30, 2019. This decrease is primarily the result of
lower demand caused by the effect of the pandemic. The segment has four less
vessels operating in the first six months of 2020 compared to the same period in
2019.



Vessel operating profit for the Americas segment for the six months ended June
30, 2020 was $3.3 million, which was $1.5 million more than the operating profit
for the six months ended June 30, 2019. This was primarily due to $8.1 million
less operating costs resulting from the decrease in vessel activity due to the
pandemic and $0.7 million lower general and administrative costs due to ongoing
cost saving efforts.



Middle East/Asia Pacific Segment Operations. Vessel revenues in the Middle
East/Asia Pacific segment increased 19%, or $7.9 million, during the six months
ended June 30, 2020, as compared to the six months ended June 30, 2019. This
segment had three more vessels operating in the first six months of 2020
compared to the same period in 2019. Active

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utilization for the six months ended June 30, 2020 increased from 75.6% to 76.8%, and average day rates increased by nine percent.





The Middle East/Asia Pacific segment reported an operating loss of $0.3 million
for the six months ended June 30, 2020, compared to an operating loss of $3.3
million for the six months ended June 30, 2019 primarily due to increased
revenue.





Europe/Mediterranean Segment Operations. Vessel revenues in the
Europe/Mediterranean segment decreased 21%, or $13.5 million, during the six
months ended June 30, 2020, as compared to the six months ended June 30,
2019. The segment has 10 less vessels operating in the first six months of 2020
compared to the same period in 2019. The reduction is due mainly to the effects
of the pandemic. Average day rates during these same periods increased 5% and
active utilization increased three percentage points during the six months ended
June 30, 2020 compared to the six months ended June 30, 2019.



The Europe/Mediterranean segment reported an operating loss of $0.2 million for
the six months ended June 30, 2020, compared to an operating loss of $0.5
million for the six months ended June 30, 2019. This is due mainly to the lower
revenue offset somewhat with lower operating costs associated with the lower
vessel activity and lower general and administrative costs resulting from our
ongoing cost reduction efforts.



West Africa Segment Operations. Vessel revenues in the West Africa segment
decreased 30% or $20.2 million, during the six months ended June 30, 2020, as
compared to the six months ended June 30, 2019. The West Africa active vessel
fleet decreased by 9 vessels during the comparative periods. West Africa segment
active utilization decreased as well from 76.4% to 61.5% primarily due to the
effects of the pandemic, but day rates increased by five percent due to the
change in the mix of contracts.



The West Africa segment reported an operating loss of $8.8 million for the six
months ended June 30, 2020 compared to an operating profit of $11.2 million in
the six months ended June 30, 2019 primarily due to decreased revenue. This
segment had the most negative impact from the pandemic due to significant
contract cancellations.



Vessel Utilization and Average Day Rates by Segment





Vessel utilization is determined primarily by market conditions and to a lesser
extent by drydocking requirements. Vessel day rates are determined by the demand
created largely through the level of offshore exploration, field development and
production spending by energy companies relative to the supply of offshore
support vessels. Specifications of available equipment and the scope of service
provided may also influence vessel day rates. Vessel utilization rates are
calculated by dividing the number of days a vessel works during a reporting
period by the number of days the vessel is available to work in the reporting
period. As such, stacked vessels depress utilization rates because stacked
vessels are considered available to work and are included in the calculation of
utilization rates. Average day rates are calculated by dividing the revenue a
vessel earns during a reporting period by the number of days the vessel worked
in the reporting period.

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Total vessel utilization is calculated on all vessels in service (which includes
stacked vessels, vessels held for sale and vessels in drydock) but do not
include vessels owned by joint ventures (3 and 4 vessels at June 30, 2020 and
2019, respectively). Active utilization is calculated on active vessels (which
excludes vessels held for sale). Average day rates are calculated based on total
vessel days worked.

The following tables compare day-based utilization percentages, average day rates and average total, active and stacked vessels by segment for the three and six months ended June 30, 2020 and 2019:






                                          Three Months Ended                       Six Months Ended
                                   June 30, 2020       June 30, 2019       June 30, 2020       June 30, 2019
SEGMENT STATISTICS:
Americas fleet:
Utilization                                  58.3 %              54.5 %              57.7 %              51.1 %
Active utilization                           88.6 %              82.3 %              87.1 %              84.8 %
Average vessel day rates                   12,865              12,341              12,355              11,871
Average total vessels                          50                  58                  51                  64
Average stacked vessels                       (17 )               (20 )               (17 )               (26 )
Average active vessels                         33                  38                  34                  38

Middle East/Asia Pacific fleet:
Utilization                                  63.0 %              61.6 %              63.0 %              61.5 %
Active utilization                           75.9 %              74.7 %              76.8 %              75.6 %
Average vessel day rates                    8,009               7,293               7,934               7,249
Average total vessels                          52                  50                  54                  51
Average stacked vessels                        (9 )                (9 )               (10 )               (10 )
Average active vessels                         43                  41                  44                  41

Europe/Mediterranean fleet:
Utilization                                  48.6 %              62.7 %              56.5 %              61.4 %
Active utilization                           88.6 %              86.5 %              87.8 %              85.3 %
Average vessel day rates                   12,689              13,010              12,586              12,004
Average total vessels                          37                  47                  39                  48
Average stacked vessels                       (17 )               (13 )               (14 )               (13 )
Average active vessels                         20                  34                  25                  35

West Africa fleet:
Utilization                                  36.5 %              52.3 %              41.2 %              50.8 %
Active utilization                           55.0 %              76.0 %              61.5 %              76.4 %
Average vessel day rates                   10,711               9,439              10,049               9,535
Average total vessels                          63                  73                  64                  78
Average stacked vessels                       (21 )               (23 )               (21 )               (26 )
Average active vessels                         42                  50                  43                  52

Worldwide fleet:
Utilization                                  50.9 %              57.0 %              53.7 %              55.2 %
Active utilization                           74.5 %              79.3 %              76.6 %              79.9 %
Average vessel day rates                   10,799              10,442              10,513              10,119
Average total vessels                         202                 228                 208                 241
Average stacked vessels                       (64 )               (65 )               (62 )               (75 )
Average active vessels                        138                 163                 146                 166




Average active vessels exclude stacked vessels. We consider a vessel to be
stacked if the vessel crew is furloughed or substantially reduced and limited
maintenance is being performed on the vessel. We reduce operating costs by
stacking vessels when management does not foresee opportunities to profitably or
strategically operate the vessels in the near future. Vessels are stacked when
market conditions warrant and they are no longer considered stacked when they
are returned to active service, sold or otherwise disposed. When economically
practical marketing opportunities arise, the stacked vessels can be returned to
active service by performing any necessary maintenance on the vessel and either
rehiring or returning fleet personnel to operate the vessel. Although not
currently fulfilling charters, stacked vessels are included in the calculation

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of utilization statistics. We had 63 and 60 stacked vessels at June 30, 2020 and
2019, respectively. Total stacking costs for the three and six months ended June
30, 2020 were $4.8 million and $8.7 million, respectively.



Vessel Dispositions



We seek opportunities to sell and/or scrap our older vessels when market
conditions warrant and opportunities arise. The majority of our vessels are sold
to buyers who do not compete with us in the offshore energy industry. Vessels
sales in 2020 included 22 vessels that were classified as assets held for sale
and 3 vessels from our active fleet.



Liquidity, Capital Resources and Other Matters





Availability of Cash



At June 30, 2020, we had $206.4 million in cash and cash equivalents (excluding
$19.9 million of restricted cash), including amounts held by foreign
subsidiaries, the majority of which is available to us without adverse tax
consequences. Included in foreign subsidiary cash are balances held in U.S.
dollars and foreign currencies that await repatriation due to various currency
conversion and repatriation constraints, or partner or tax related matters,
prior to the cash being made available for remittance to our domestic accounts.
We currently intend that earnings by foreign subsidiaries will be indefinitely
reinvested in foreign jurisdictions in order to fund strategic initiatives (such
as investment, expansion and acquisitions), fund working capital requirements
and repay debt (both third-party and intercompany) of our foreign subsidiaries
in the normal course of business. Moreover, we do not currently intend to
repatriate earnings of our foreign subsidiaries to the U. S. because cash
generated from our domestic businesses and the repayment of intercompany
liabilities from foreign subsidiaries are currently deemed to be sufficient to
fund the cash needs of our operations in the  U. S. Restricted cash of $19.9
million represents the portion of proceeds from vessel sales reserved for a cash
tender of Senior Notes that may be required if certain conditions in the
underlying indenture are satisfied.



During the first quarter of 2020, the industry was impacted by a world-wide
pandemic that had the effect of isolating people across the world and
significantly reducing the demand and price for crude oil. See a detailed
discussion under "Industry Conditions and Outlook" above. The reduced oil price
will impact our industry in the near term and if it is prolonged could impact us
beyond this year. We have significant cash on hand and the substantial portion
of our debt is not due until 2022. As a company, we have undertaken the
following temporary measures to assist us in weathering the pandemic and allow
us to recover as soon as possible:



• Planned capital and dry dock expenditures tied to contracts referenced in

"Industry Conditions and Outlook" above will be temporarily delayed or

cancelled. As a result of the ongoing contract cancellations and delays we

have postponed drydocks expected to cost approximately $28.0 million in

2020. It is possible that additional planned drydocks will be cancelled or


      delayed due to contract cancellations or delays. We cannot predict the
      number or cost of such possible cancellations or delays.



• We have the ability to rapidly respond to contract cancellations and

delays. We have or will remove the crews and shut down all operations,

depending on contract terms on vessels associated with cancelled or delayed

contracts. We continue to dispose of vessels and their related stacking


      cost. We have also been reducing our general and administrative costs to
      reflect the current demand for our offshore support vessels.




Our objective in financing our business is to maintain adequate financial
resources and access to sufficient levels of liquidity. We do not have a
revolving credit facility. Cash and cash equivalents and net cash provided by
operating activities provide us, in our opinion, with sufficient liquidity to
meet our liquidity requirements.





Debt


Refer to Note (9) of Unaudited Condensed Consolidated Financial Statements included in Part I, Item 1 of this Quarterly Report on Form 10-Q for further details on our indebtedness.



We may from time to time seek to retire or purchase our outstanding debt through
cash purchases and/or exchanges for equity securities, in open market purchases,
privately negotiated transactions or otherwise. Such repurchases or

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exchanges, if any, will depend on prevailing market conditions, our liquidity
requirements, contractual restrictions and other factors. The amounts involved
may be material.



Operating Activities


Net cash used in operating activities for the six months ended June 30, 2020 and 2019, was $12.8 million and $20.7 million, respectively.





Net cash used in operations for the six months ended June 30, 2020, reflects a
net loss of $129.4 million, which includes non-cash depreciation and
amortization of $55.3 million, net gains on asset dispositions of $7.0 million,
an affiliate credit loss impairment expense of $53.6 million and long-lived
asset impairments of $65.7 million. Combined changes in operating assets and
liabilities and in amounts due to/from affiliate, net used $28.3 million in cash
and cash paid for deferred drydocking and survey costs was $29.0 million.



Net cash used in operations for the six months ended June 30, 2019 reflects a
net loss of $36.8 million, which includes non-cash depreciation and amortization
of $48.0 million, gain on asset dispositions, net of $0.8 million and
stock-based compensation expense of $9.2 million. Combined charges in operating
assets and liabilities and in amounts due to/from affiliate, net, used $11.0
million of cash and cash paid for deferred drydock and survey costs of $28.7
million.



Investing Activities



Net cash provided by in investing activities for the six months ended June 30,
2020 and 2019, was $16.8 million and $11.7 million, respectively. Net cash
provided by investing activities for the six months ended June 30, 2020
primarily reflects the receipt of $20.9 million related to the sale or scrapping
of 25 vessels. Additions to properties and equipment were comprised of
approximately $2.8 million in capitalized upgrades to existing vessels and
equipment and $1.3 million for other property and equipment purchases.



Net cash provided by investing activities for the six months ended June 30, 2019
primarily reflects the receipt of $20.6 million related to the sale or scrapping
of 34 vessels. Additions to properties and equipment were comprised of
approximately $8.0 million in capitalized upgrades to existing vessels and
equipment and $0.8  million for other property and equipment purchases.



Financing Activities



Net cash used in financing activities for the six months ended June 30, 2020 and
2019, was $5.4 million and $5.6 million, respectively. Net cash used in
financing activities for the six months ended June 30, 2020 included $4.7
million of scheduled semiannual principal payments on Troms offshore debt and
$0.6 million of taxes paid to related share-based compensation.



Net cash used in financing activities for the six months ended June 30, 2019
included $3.6 million of scheduled semiannual principal payments on Troms
offshore debt, $1.8 million of taxes paid to related share-based compensation
and the repurchase of $0.2 million of New Secured Notes resulting from a tender
offer.



Other Liquidity Matters


Contractual Obligations and Other Contingent Commitments





We did not have any material changes in our contractual obligations and
commercial commitments since the end of fiscal year 2019. Refer to Part II, Item
7 in our Annual Report on Form 10-K for the year ended December 31, 2019, for
information regarding our contractual obligations and other contingent
commitments.



Application of Critical Accounting Policies and Estimates





Our Annual Report on Form 10-K for the year ended December 31, 2019, filed with
the SEC on March 2, 2020, describes the accounting policies that are critical to
reporting our financial position and operating results and that require
management's most difficult, subjective or complex judgments. This Quarterly
Report on Form 10-Q should be read in conjunction with the discussion contained
in our Annual Report on Form 10-K for the year ended December 31, 2019,
regarding these critical accounting policies.



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New Accounting Pronouncements

For information regarding the effect of new accounting pronouncements, refer to Notes (2) and (3) of Notes to Unaudited Condensed Consolidated Financial Statements included in Part I, Item 1 of this Quarterly Report on Form 10-Q.

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