UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549

FORM 10-Q

☒	QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934

For the quarterly period ended ~~March 31,~~June 30, 2022

☐	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: 1-6311

Tidewater Inc.

(Exact name of registrant as specified in its charter)

Delaware	72-0487776
(State or other jurisdiction of incorporation)	(I.R.S. Employer Identification No.)

842 West Sam Houston Parkway North, Suite 400

Houston, Texas 77024

(Address of principal executive offices) (Zip code)

(713) 470-5300

Registrant’s telephone number, including area code

Not Applicable

(Former name, former address and former fiscal year, if changed since last report)

Securities registered pursuant to Section 12(b) of the Act:

Title of each class	Trading Symbol(s)	Name of each exchange on which registered
Common stock, $0.001 par value per share	TDW	New York Stock Exchange
Series A Warrants to purchase shares of common stock	TDW.WS.A	New York Stock Exchange
Series B Warrants to purchase shares of common stock	TDW.WS.B	New York Stock Exchange
Warrants to purchase shares of common stock	TDW.WS	NYSE American

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 ☒ No ☐

Indicate by check mark whether the registrant has submitted electronically every Interactive Data File required to be submitted 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 such files). Yes ☒ No ☐

Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, a smaller reporting company, or an emerging growth company. See the definitions of “large accelerated filer,” “accelerated filer,” “smaller reporting company,” and “emerging growth company” in Rule 12b-2 of the Exchange Act.

Large accelerated filer ☐

Accelerated filer ☒

Non-accelerated filer ☐

Emerging Growth Company ☐

Smaller reporting company ☐

If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act. ☐

Indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Exchange Act). Yes ☐ No ☒

Indicate by check mark whether the registrant has filed all documents and reports required to be filed by Sections 12, 13 or 15(d) of the Securities Exchange Act of 1934 subsequent to the distribution of securities under a plan confirmed by a court. Yes ☒ No ☐

~~41,814,502~~42,065,813 shares of Tidewater Inc. common stock $0.001 par value per share were outstanding on ~~April 30,~~July 31, 2022.

	March 31, 2022			December 31, 2021			June 30, 2022			December 31, 2021
ASSETS
Current assets:
Cash and cash equivalents	$	136,234		$	149,037		$	87,981		$	149,037
Restricted cash		4,958			1,240			1,240			1,240
Trade and other receivables, less allowance for credit losses of $1,987 and $1,948 at March 31, 2022 and December 31, 2021, respectively		112,953			86,503
Due from affiliates, less allowance for credit losses of $12,812 and $72,456 at March 31, 2022 and December 31, 2021, respectively		21,191			70,134
Trade and other receivables, less allowance for credit losses of $2,288 and $1,948 at June 30, 2022 and December 31, 2021, respectively								189,259			86,503
Due from affiliates, less allowance for credit losses of $12,215 and $72,456 at June 30, 2022 and December 31, 2021, respectively								0			70,134
Marine operating supplies		13,252			12,606			21,182			12,606
Assets held for sale		8,591			14,421			6,862			14,421
Prepaid expenses and other current assets		12,012			8,731			23,259			8,731
Total current assets		309,191			342,672			329,783			342,672
Net properties and equipment		677,580			688,040			838,612			688,040
Deferred drydocking and survey costs		44,362			40,734			53,661			40,734
Indemnification assets								30,269			0
Other assets		22,997			24,334			30,410			24,334
Total assets	$	1,054,130		$	1,095,780		$	1,282,735		$	1,095,780

LIABILITIES AND EQUITY
Current liabilities:
Accounts payable	$	23,696		$	20,788		$	30,537		$	20,788
Accrued expenses		55,141			51,734			109,212			51,734
Due to affiliates		21,191			61,555			0			61,555
Other current liabilities		25,471			23,865			47,872			23,865
Total current liabilities		125,499			157,942			187,621			157,942
Long-term debt		167,997			167,885			168,279			167,885
Other liabilities		70,892			68,184			85,188			68,184

Commitments and contingencies

Equity:
Common stock of $0.001 par value, 125,000,000 shares authorized, 41,716,885 and 41,307,617 shares issued and outstanding at March 31, 2022 and December 31, 2021, respectively		42			41
Common stock of $0.001 par value, 125,000,000 shares authorized, 42,029,882 and 41,307,617 shares issued and outstanding at June 30, 2022 and December 31, 2021, respectively								42			41
Additional paid-in capital		1,376,934			1,376,494			1,554,561			1,376,494
Accumulated deficit		(690,068	)		(677,900	)		(715,649	)		(677,900	)
Accumulated other comprehensive loss		2,471			2,668			1,763			2,668
Total stockholders’ equity		689,379			701,303			840,717			701,303
Noncontrolling interests		363			466			930			466
Total equity		689,742			701,769			841,647			701,769
Total liabilities and equity	$	1,054,130		$	1,095,780		$	1,282,735		$	1,095,780

The accompanying notes are an integral part of these Condensed Consolidated Financial Statements.

	Three Months Ended						Three Months Ended						Six Months Ended
	March 31, 2022			March 31, 2021			June 30, 2022			June 30, 2021			June 30, 2022			June 30, 2021
Revenues:
Vessel revenues	$	103,876		$	80,993		$	162,175		$	88,514		$	266,051		$	169,507
Other operating revenues		1,853			2,511			1,272			1,439			3,125			3,950
Total revenue		105,729			83,504			163,447			89,953			269,176			173,457
Costs and expenses:
Vessel operating costs		68,511			61,020			100,257			64,263			168,768			125,283
Costs of other operating revenues		361			1,067			483			581			844			1,648
General and administrative		18,217			16,043			27,804			16,787			46,021			32,830
Depreciation and amortization		26,657			29,727			31,766			28,549			58,423			58,276
Long-lived asset impairment credit		(500	)		0			0			0			(500	)		0
(Gain) loss on asset dispositions, net		(207	)		1,948
Affiliate credit loss impairment credit								0			(1,000	)		0			(1,000	)
Loss on asset dispositions, net								1,297			932			1,090			2,880
Total costs and expenses		113,039			109,805			161,607			110,112			274,646			219,917
Operating loss		(7,310	)		(26,301	)
Operating income (loss)								1,840			(20,159	)		(5,470	)		(46,460	)
Other income (expense):
Foreign exchange gain (loss)		946			(850	)		(1,881	)		422			(935	)		(428	)
Equity in net losses of unconsolidated companies		0			(1,849	)
Equity in net earnings (losses) of unconsolidated companies								(244	)		52			(244	)		(1,797	)
Interest income and other, net		3,486			23			349			8			3,835			31
Loss on warrants								(14,175	)		0			(14,175	)		0
Interest and other debt costs, net		(4,175	)		(4,541	)		(4,284	)		(3,944	)		(8,459	)		(8,485	)
Total other income (expense)		257			(7,217	)
Total other expense								(20,235	)		(3,462	)		(19,978	)		(10,679	)
Loss before income taxes		(7,053	)		(33,518	)		(18,395	)		(23,621	)		(25,448	)		(57,139	)
Income tax expense		5,218			2,009			6,619			6,026			11,837			8,035
Net loss	$	(12,271	)	$	(35,527	)	$	(25,014	)	$	(29,647	)	$	(37,285	)	$	(65,174	)
Net loss attributable to noncontrolling interests		(103	)		(212	)
Net income (loss) attributable to noncontrolling interests								567			(185	)		464			(397	)
Net loss attributable to Tidewater Inc.	$	(12,168	)	$	(35,315	)	$	(25,581	)	$	(29,462	)	$	(37,749	)	$	(64,777	)
Basic loss per common share	$	(0.29	)	$	(0.87	)	$	(0.61	)	$	(0.72	)	$	(0.91	)	$	(1.59	)
Diluted loss per common share	$	(0.29	)	$	(0.87	)	$	(0.61	)	$	(0.72	)	$	(0.91	)	$	(1.59	)
Weighted average common shares outstanding		41,412			40,716			41,814			40,899			41,614			40,808
Adjusted weighted average common shares		41,412			40,716			41,814			40,899			41,614			40,808

The accompanying notes are an integral part of these Condensed Consolidated Financial Statements.

	Three Months			Three Months			Six Months			Six Months
	Ended			Ended			Ended			Ended
	March 31, 2022			March 31, 2021			June 30, 2022			June 30, 2021
Operating activities:
Net loss	$	(12,271	)	$	(35,527	)	$	(37,285	)	$	(65,174	)
Adjustments to reconcile net loss to net cash provided by (used in) operating activities:
Depreciation and amortization		17,673			18,470			40,287			36,694
Amortization of deferred drydocking and survey costs		8,984			11,257			18,136			21,582
Amortization of debt premium and discounts		375			1,108			765			1,986
Provision for deferred income taxes		177			30			145			648
(Gain) loss on asset dispositions, net		(207	)		1,948
Loss on asset dispositions, net								1,090			2,880
Gain on bargain purchase		(1,300	)		0			(1,300	)		0
Loss on debt extinguishment		0			59			0			59
Affiliate credit loss impairment credit								0			(1,000	)
Long-lived asset impairment credit		(500	)		0			(500	)		0
Loss on warrants								14,175			0
Stock-based compensation expense		1,458			1,172			3,421			2,676
Changes in assets and liabilities, net of effects of business acquisition:
Trade and other receivables		(15,570	)		12,758			(35,085	)		22,394
Changes in due to/from affiliates, net		(20	)		2,738			(20	)		4,693
Accounts payable		2,825			(2,359	)		8,072			(792	)
Accrued expenses		3,207			(4,270	)		2,354			(2,074	)
Deferred drydocking and survey costs		(12,612	)		(2,722	)		(31,063	)		(6,771	)
Other, net		(3,843	)		1,054			(16,419	)		(7,234	)
Net cash provided by (used in) operating activities		(11,624	)		5,716			(33,227	)		10,567
Cash flows from investing activities:
Proceeds from asset dispositions		4,628			10,983			8,163			29,560
Acquisition of joint venture, net of cash acquired		(1,039	)		0
Acquisitions, net of cash acquired								(29,525	)		0
Additions to properties and equipment		(1,229	)		(1,196	)		(5,380	)		(1,861	)
Net cash provided by investing activities		2,360			9,787
Net cash provided by (used in) investing activities								(26,742	)		27,699
Cash flows from financing activities:
Principal payments on long-term debt		0			(26,414	)		0			(37,901	)
Debt issuance and modification costs		(263	)		(725	)		(371	)		(855	)
Debt extinguishment premium		0			(59	)		0			(59	)
Tax on share-based awards		(1,017	)		(135	)		(2,176	)		(758	)
Net cash used in financing activities		(1,280	)		(27,333	)		(2,547	)		(39,573	)
Net change in cash, cash equivalents and restricted cash		(10,544	)		(11,830	)		(62,516	)		(1,307	)
Cash, cash equivalents and restricted cash at beginning of period		154,276			155,225			154,276			155,225
Cash, cash equivalents and restricted cash at end of period	$	143,732		$	143,395		$	91,760		$	153,918

Supplemental disclosure of cash flow information:
Cash paid during the period for:
Interest, net of amounts capitalized	$	0		$	3,746		$	7,626		$	7,028
Income taxes	$	3,200		$	2,535		$	9,330		$	6,609
Supplemental disclosure of noncash investing activities:
Acquisition of SPO							$	162,648		$	0
Supplemental disclosure of noncash financing activities:
Warrants issued for SPO acquisition							$	162,648		$	0

The accompanying notes are an integral part of these Condensed Consolidated Financial Statements.

	Six Months Ended
									Accumulated
			Additional						other			Non
	Common		paid-in			Accumulated			comprehensive			controlling
	stock		capital			deficit			income (loss)			interest			Total
Balance at December 31, 2021	$	41	$	1,376,494		$	(677,900	)	$	2,668		$	466		$	701,769
Total comprehensive loss		0		0			(37,749	)		(905	)		464			(38,190	)
Issuance of common stock		1		(1	)		0			0			0			0
SPO acquisition warrants		0		176,823			0			0			0			176,823
Amortization of share-based awards		0		1,245			0			0			0			1,245
Balance at June 30, 2022	$	42	$	1,554,561		$	(715,649	)	$	1,763		$	930		$	841,647

Balance at December 31, 2020	$	41	$	1,371,809		$	(548,931	)	$	(804	)	$	1,157		$	823,272
Total comprehensive loss		0		0			(64,777	)		(278	)		(397	)		(65,452	)
Amortization of share-based awards		0		1,918			0			0			0			1,918
Balance at June 30, 2021	$	41	$	1,373,727		$	(613,708	)	$	(1,082	)	$	760		$	759,738

The accompanying notes are an integral part of the Condensed Consolidated Financial Statements.

The unaudited condensed consolidated financial statements for the interim periods presented herein have been prepared in conformity with United States generally accepted accounting principles and, in the opinion of management, include all adjustments (consisting only of normal recurring adjustments) necessary for a fair statement of the unaudited condensed consolidated financial statements at the dates and for the periods indicated as required by Rule 10-01 of Regulation S-X of the Securities and Exchange Commission (SEC). Results of operations for interim periods are not necessarily indicative of results of operations for the respective full years. These unaudited condensed consolidated financial statements should be read in conjunction with the consolidated financial statements and notes thereto in our Annual Report on Form 10-K for the year ended December 31, 2021, filed with the SEC on March 9, 2022.

The unaudited condensed consolidated financial statements include the accounts of Tidewater Inc. and its subsidiaries. Intercompany balances and transactions are eliminated in consolidation. We use the equity method to account for equity investments over which we exercise significant influence but do not exercise control and are not the primary beneficiary. Unless otherwise specified, all per share information included in this document is on a diluted earnings per share basis.

In November 2021, the Financial Accounting Standards Board (FASB) issued Accounting Standards Update (ASU) 2021-10, Disclosures by Business Entities about Government Assistance, which requires disclosures about the types of government assistance that we received, our accounting for the governmental assistance and its effect on our financial statements. The guidance is effective for annual periods beginning after December 15, 2021, with early adoption permitted, and the disclosures can be applied either prospectively at the date of initial application or retrospectively. We will adopt this standard in the annual period ending December 31, 2022, and we are currently evaluating the effects on our disclosures.

In October 2021, the FASB issued ASU 2021-08, Accounting for Contract Assets and Contract Liabilities from Contracts with Customers, which amends Topic 805, Business Combinations, to require an acquirer to recognize and measure contract assets and contract liabilities acquired in a business combination in accordance with Topic 606, Revenue from Contracts with Customers. The guidance is effective for annual and interim periods beginning after December 15, 2022 with early adoption permitted. We are currently evaluating the effect of the standard on our consolidated financial statements and related disclosures.

In July 2021, the FASB issued Accounting Standards Update (ASU) 2021-05, Lessors – Certain Leases with Variable Lease Payments, which amends Topic 842, Accounting for Leases, to require a lessor to classify a lease with entirely or partially variable payments that do not depend on an index or rate as an operating lease if another classification (i.e. sales-type or direct financing) would trigger a Day 1 loss. The guidance is effective for annual and interim periods beginning after December 15, 2021, with early adoption permitted. We adopted this standard on January 1, 2022 and it did not have a material impact on our consolidated financial statements and related disclosures.

In May 2021, the FASB issued ASU-2021-04, Issuer’s Accounting for Certain Modifications or Exchanges of Freestanding Equity-Classified Written Call Options, which clarify and reduce diversity in an issuer’s accounting for modifications or exchanges of freestanding equity-classified written call options that remain equity classified after modification or exchange. The guidance is effective for annual and interim periods beginning after December 15, 2021, with early adoption permitted. We adopted this standard on January 1, 2022 and it did not have a material impact on our consolidated financial statements and related disclosures.

On April 22, 2022 (Merger Date), we acquired Swire Pacific Offshore Holdings Ltd., a limited company organized under the laws of Bermuda (SPO) which owns 50 offshore support vessels operating primarily in West Africa, Southeast Asia and the Middle East. On the Merger Date, we paid $42.0 million in cash and issued 8,100,000 warrants, each of which is exercisable at $0.001 per share for one share of our common stock. In addition, we paid $19.6 million in cash related to pre-closing working capital adjustments for a total consideration of $223.5 million. The cash portion of the purchase price is subject to customary post-closing adjustment mechanisms related to SPO’s closing date working capital, cash and indebtedness. Revenues and net earnings of SPO from the Merger Date through June 30, 2022 included in our consolidated statements of operations were $43.2 million and $5.3 million, respectively.

Assets acquired and liabilities assumed in the business combination were recorded at their estimated fair values as of the Merger Date under the acquisition method of accounting. The fair value estimates below are subject to adjustment during the measurement period subsequent to the Merger Date, primarily consisting of the final valuation for various working capital items, tax and other liabilities existing on the Merger Date. The estimated fair values of certain assets and liabilities including long-lived assets and contingencies require judgments and assumptions. Adjustments might be made to these estimates during the measurement period and those adjustments could be material. The warrants issued in the acquisition were initially classified as liabilities subject to mark to market fair value adjustments but were reclassified to equity on June 24, 2022. See Note 6 for additional details.

The provisional amounts for assets acquired and liabilities assumed are based on estimates of their fair values as of the Merger Date and were as follows:

Business combination related costs were expensed as incurred in general and administrative expense and consisted of various advisory, legal, accounting, valuation and other professional fees totaling $7.2 million and $9.4 million for the three and six months ended June 30, 2022, respectively.

Property and equipment acquired in the business combination consisted primarily of offshore support vessels. We recorded property and equipment acquired at estimated fair value of approximately $179.7 million. The fair values of the offshore support vessels were estimated by applying both an income approach, using projected discounted cash flows, and a market approach. We estimate that the remaining useful lives for the vessels acquired fall in the range of one to 16 years, based on an original estimated useful life of 20 years. NaN goodwill was recognized in connection with this business combination.

The unaudited supplemental pro forma results present consolidated information as if the business combination were completed on January 1, 2021. The pro forma results include, among others, (i) a reduction in depreciation expense for adjustments to property and equipment and (ii) the reversal of any income or expense related to assets retained by the seller, Banyan Overseas Ltd., a limited company organized under the laws of Bermuda. The pro forma results do not include any potential synergies or non-recurring charges that may result directly from the business combination.

Expected credit losses are recognized on the initial recognition of our trade accounts receivable and contract assets. In each subsequent reporting period, even if a loss has not yet been incurred, credit losses are recognized based on the history of credit losses and current conditions, as well as reasonable and supportable forecasts affecting collectability. We developed an expected credit loss model applicable to our trade accounts receivable and contract assets that considers our historical performance and the economic environment, as well as the credit risk and its expected development for each segmented group of customers that share similar risk characteristics. It is our practice to write off receivables when all legal options for collection have been exhausted.

Activity in the allowance for credit losses for the ~~three~~six months ended ~~March 31,~~June 30, 2022 is as follows:

Refer to Note (1314) for the amount of revenue by segment and in total for the worldwide fleet.

At ~~March 31,~~June 30, 2022, we had ~~$1.5~~$2.7 million and ~~$3.0~~$3.3 million of deferred mobilization costs included within prepaid expenses and other current assets and other assets, respectively.

At ~~March 31,~~June 30, 2022, we have ~~$1.0~~$1.6 million of deferred mobilization revenue, included within accrued expenses, related to unsatisfied performance obligations which will be recognized during the remainder of 2022 and 2023.

The changes in accumulated other comprehensive income (loss) (OCI) by component, net of tax, for the three and sixmonths ended ~~March 31,~~June 30, 2022 and 2021 are as follows:

We had ~~2,631,247 and 3,171,497~~outstanding common shares, incremental "in-the-money" warrants, restricted stock units and stock options at ~~March 31,~~June 30, 2022 and 2021, respectively, ~~which are~~ as follows:

We also had “out-of-the-money” warrants outstanding exercisable for 5,923,399 shares of common stock at both ~~March 31,~~June 30, 2022 and 2021. Included in these “out-of-the-money” warrants are Series A Warrants, Series B Warrants and GLF Equity Warrants which have exercise prices of $57.06, $62.28, and $100.00, respectively, and expire on various dates in 2023 and 2024. No warrants or restricted stock units, whether in the money or out of the money, are included in our loss per share calculations because the effect of such inclusion is antidilutive.

We use a discrete effective tax rate method to calculate taxes for interim periods instead of applying the annual effective tax rate to an estimate of the full fiscal year due to the level of volatility and unpredictability of earnings in our industry, both overall and by jurisdiction.

Income tax expense for the ~~quarter~~three and six months ended ~~March 31,~~June 30, 2022,, reflects tax liabilities in various jurisdictions that are either based on revenue (deemed profit regimes) or pre-tax profits.

The tax liabilities for uncertain tax positions are primarily attributable to permanent establishment issues related to foreign jurisdictions, subpart F income inclusions and withholding taxes on foreign services. Penalties and interest related to income tax liabilities are included in income tax expense. Income tax payable is included in other current liabilities.

As of December 31, 2021, our balance sheet reflected approximately $202.8 million of net deferred tax assets prior to a valuation allowance analysis, with a valuation allowance of $204.9 million. As of ~~March 31,~~June 30, 2022, we had net deferred tax assets of approximately ~~$205.7~~$258.6 million prior to a valuation allowance analysis of ~~$208.0~~$260.9 million. The net deferred tax assets amounts as of June 30, 2022 include $55.0 million of deferred tax assets from the SPO acquisition offset by a $55.0 million valuation allowance.

Management assesses all available positive and negative evidence to permit use of existing deferred tax assets.

The Coronavirus Aid, Relief, and Economic Security Act (“CARES Act”) was enacted on March 27, 2020 in the United States. The CARES Act includes several significant business tax provisions, that ~~are available to us, that, among other things,~~ would allow ~~businesses~~us to carry back net operating losses arising after 2017 to the five prior tax years. Considering the available carryback, in ~~the~~ ~~second~~ ~~quarter of~~ 2020, we recorded an ~~account~~income tax receivable tax ~~benefit~~ totaling $6.9 million ~~related to the realization of net operating loss deferred tax assets on which a valuation allowance was previously recorded. We~~and we collected this receivable in the first quarter of 2021.

With limited exceptions, we are no longer subject to tax audits by U.S. federal, state, local or foreign taxing authorities for years prior to March 2015. We are subject to ongoing examinations by various foreign tax authorities and do not believe that the results of these examinations will have a material adverse effect on our financial position, results of operations, or cash flows.

Prior to 2022, we participated in a joint venture in Angola (Sonatide) where we owned 49% of the joint venture and our partner Sonangol Holdings, LDA (Sonangol) owned 51%. In January 2022, we acquired the 51% equity interest in ~~the~~ Sonatide ~~joint venture (Sonatide)~~ owned by ~~our former joint venture partner,~~Sonangol, pursuant to a Sale and Purchase Agreement between Sonangol ~~Holdings, LDA~~ and us for $11.2 million in cash. This acquisition gives us complete control of our operations in Angola.

The acquisition date was January 3, 2022 (Sonatide Merger Date). However, we used a convenience date of January 1, 2022 for the acquisition and have recorded activity from the beginning of the first quarter of 2022. Revenues ~~and net loss~~ of Sonatide from the Sonatide Merger Date included in our consolidated statements of operations were $1.0 million and $2.0 million for the three and six months ended June 30, 2022, respectively. The net earnings of Sonatide were $0.2 million and $0.1 million for the three and sixmonths ended ~~March 31,~~June 30, 2022, respectively.

The acquisition date fair value of the 49% equity interest in Sonatide held by us was zero and we did not recognize a significant gain or loss as a result of remeasuring to the fair value of our equity interest.

Assets acquired and liabilities assumed in the business combination have been recorded at their estimated fair values as of the Sonatide Merger Date under the acquisition method of accounting. We have not finalized the fair values of the assets acquired and liabilities assumed. The fair value estimates below are subject to adjustment during the measurement period subsequent to the Sonatide Merger Date. The estimated fair values of certain assets and liabilities including long-lived assets and contingencies require judgments and assumptions. Adjustments might be made to these estimates during the measurement period and those adjustments could be material.

The provisional amounts for assets acquired and liabilities assumed are based on estimates of their fair values as of the Sonatide Merger Date and were as follows:

The bargain purchase gain of $1.3 million is included in our consolidated statement of operations for the ~~three~~six months ended ~~March 31,~~June 30, 2022 under the caption “Interest income and other, net.” Business combination related costs were expensed as incurred in general and administrative expense and consisted of various advisory, legal, accounting, valuation and other professional fees which were not material to our consolidated results of operations for the year and ~~three~~six months ended December 31, 2021 and ~~March 31,~~June 30, 2022, respectively.

The unaudited supplemental pro forma results present consolidated information as if the business combination ~~was~~were completed on January 1, 2021. The pro forma results include, among others, (i) a reduction in depreciation expense for adjustments to property and equipment and (ii) a reduction in commission expense previously payable to the joint venture which has been eliminated. The pro forma results do not include any potential synergies or non-recurring charges that may result directly from the business combination. The pro forma revenues and net loss, assuming the acquisition had occurred on January 1, 2021, for the twelve months ended December 31, 2021 were $375.4 million and $129.2 million, respectively.

In previous years, we had substantial activity in Nigeria and conducted our business through a joint venture (DTDW). In 2020, we ceased operations in Nigeria, but have continued to maintain and manage residual receivable and payable balances. We own 40% of ~~DTDW.~~DTDW which owns 1 offshore service vessel. Our partner, who owns 60%, is a Nigerian national. ~~DTDW owns 1 offshore service vessel. We also, from time to time, operate company owned vessels in Nigeria for which~~In the second quarter of 2022, we entered into a netting arrangement with our partner ~~receives a commission. As of~~ ~~March 31, 2022~~~~, we had~~ no ~~company owned vessels operating in Nigeria and~~allowing either partner to discharge their obligations by netting these amounts against sums owed by the ~~DTDW owned vessel was~~ ~~not~~ ~~employed. As a result, the near-term cash flow projections indicate that DTDW does~~ ~~not~~ ~~have sufficient funds to meet its obligations to us or its vendors. Based on current situations, operations in Nigeria have been severely impacted and~~other partner. In accordance with this agreement, we have ~~effectively ceased activity. We have created a fully reserved position in~~the ability to net our due from affiliate balance against the due to affiliate balance on our consolidated balance ~~sheet~~sheet. The net due from balance equals the net due to ~~account for~~balance at June 30, 2022 and, as a result, there is a net zero balance in our ~~expected liabilities related~~net due to ~~certain obligations of the joint venture.~~due from accounts on our consolidated balance sheet.

We have a defined benefit pension plan (pension plan) that covers certain U.S. employees. The pension plan was frozen during 2010. We have not made contributions to the pension plan since 2019. Actuarial valuations are performed annually and an assessment of the future pension obligations and market value of the assets will determine if contributions are made in the future.

We also support a non-contributory and non-qualified defined benefit supplemental executive retirement plan (supplemental plan) which was closed to new participants during 2010. We contributed ~~$0.4~~$0.8 million during each of the ~~three~~six months ended ~~March 31,~~June 30, 2022 and 2021, respectively. We expect to contribute ~~$1.2~~$0.8 million to the supplemental plan during the remainder of 2022. Our obligations under the supplemental plan were $22.5 million and $22.7 million ~~for both~~at ~~March 31,~~June 30, 2022 and December 31, 2021, respectively, and are included in “accrued expenses” and “other liabilities” in the consolidated condensed balance sheet.

The net periodic benefit cost for our defined benefit pension plans and supplemental plan (referred to collectively as “Pension Benefits”) is comprised of the following components:

The components of the net periodic pension cost are included in the caption “Interest income and other, net.”

We also have a Super Senior Revolving Credit Facility Agreement maturing on November 16, 2026 that provides $25.0 million for general working capital purposes. NaN amounts have been drawn on this credit facility.

Due to our international operations, we are exposed to foreign currency exchange rate fluctuations against the U.S. dollar. For some of our international contracts, a portion of the revenue and local expenses are incurred in local currencies with the result that we are at risk for changes in the exchange rates between the U.S. dollar and foreign currencies. We generally do not hedge against any foreign currency rate fluctuations associated with foreign currency contracts that arise in the normal course of business, which exposes us to the risk of exchange rate losses. To minimize the financial impact of these items, we attempt to contract a significant majority of our services in U.S. dollars. In addition, we attempt to minimize the financial impact of these risks by matching the currency of our operating costs with the currency of our revenue streams when considered appropriate. We continually monitor the currency exchange risks associated with all contracts not denominated in U.S. dollars.

Our primary financial instruments consist of cash and cash equivalents, restricted cash, trade receivables and trade payables with book values that are considered to be representative of their respective fair values. The carrying value for cash equivalents is considered to be representative of its fair value due to the short duration and conservative nature of the cash equivalent investment portfolio. In ~~addition,~~the second quarter of 2022, we agreed to a transaction with PEMEX, the Mexican national oil company, to exchange $8.6 million in accounts receivable for an equal face amount of seven year 8.75% PEMEX corporate bonds (PEMEX Note). As part of this agreement, we are not allowed to sell the PEMEX Note for 90 days from issuance and have determined that it should be classified as “available for sale.” At June 30, 2022 we recorded a $0.8 million in mark-to-market loss in other comprehensive income. We disclose the fair value of our long-term debt in Note 910 and the fair value of our assets held for sale in Note ~~14.~~15.

As of ~~March 31,~~June 30, 2022, our property and equipment consist primarily of ~~138~~187 active vessels, which excludes the 129 vessels we have classified as held for sale, located around the world. As of December 31, 2021, our property and equipment consisted primarily of 135 active vessels, which excluded 18 vessels classified as held for sale.

In conjunction with the acquisition of SPO discussed in Note 3, the previous Middle East/Asia Pacific segment has been split into the Middle East segment and the Asia Pacific segment. Our previous operations in Southeast Asia and Australia, along with the legacy SPO operations in the Asia Pacific region, now form the new Asia Pacific segment. Our segment disclosures reflect the current segment alignment for all periods presented.

Each of our 5 operating segments is managed by a senior executive reporting directly to our Chief Executive Officer, the chief operating decision maker. Discrete financial information is available for each of the segments, and our Chief Executive Officer uses the results of each of the operating segments for resource allocation and performance evaluation.

The following table provides a comparison of segment revenues, vessel operating profit (loss), depreciation and amortization, and additions to properties and equipment for the three and sixmonths ended ~~March 31,~~June 30, 2022 and 2021. Vessel revenues relate to vessels owned and operated by us while other operating revenues relate to other miscellaneous marine-related businesses.

The following table provides a comparison of total assets at ~~March 31,~~June 30, 2022 and December 31, 2021:

In ~~2019,~~ ~~we made a strategic decision to reduce the size of our fleet and to remove assets that were~~ ~~not~~ ~~considered to be part of our long-term plans. Beginning in the~~ ~~first~~ ~~quarter of~~ ~~2020,~~ the industry and world economies were affected by a global pandemic and a concurrent reduction in the demand for and the price of crude oil which caused us to expand our disposal program to include more vessels. Since ~~December 2019,~~ ~~we have designated 85 vessels as assets held for sale, sold 67 and returned 6 to the active fleet.~~ During the ~~three~~six months ending ~~March 31,~~June 30, 2022, we added ~~0 vessels~~1 vessel from the SPO fleet to assets held for sale, sold 5or recycled 9 of our vessels held for sale, and re-activated 1 vessel from assets held for sale back into the active fleet, leaving 129 vessels valued at ~~$8.6~~$6.9 million remaining in the held for sale account as of ~~March 31,~~June 30, 2022. In addition, we sold 0 vessels from our active fleet in the ~~three~~six month period ending ~~March 31, 2022~~June 30, 2022. We sold 8 vessels from assets held for sale and 35 vessels from our active fleet in the ~~three~~six month period ending ~~March 31,~~June 30, 2021. The total vessel and other sales for the ~~three~~six month period ending ~~March 31,~~June 30, 2022 contributed approximately ~~$4.6~~$8.2 million in proceeds and we recognized a net ~~$0.2~~$1.1 million ~~gain~~loss on the dispositions. The vessel and other sales for the ~~three~~six month period ending ~~March 31,~~June 30, 2021 contributed ~~$11.0~~$29.4 million in proceeds and we recognized a ~~$1.9~~$2.9 million net loss on the dispositions. One of the vessel sales in the second quarter of 2021, was to a third-party operator, whose Chief Operating Officer, Matthew Rigdon, is the son of Larry Rigdon, the chairman of our Board of Directors. This vessel was sold for proceeds of $11.4 million, all of which was collected in the second quarter of 2021, and we recognized a gain of $4.3 million on the sale.

We consider the valuation approach for our assets held for sale to be a Level 3 fair value measurement due to the level of estimation involved in valuing assets to be recycled or sold. We estimate the net realizable value of our assets held for sale using various methodologies including third party appraisals, sales comparisons, sales agreements and scrap yard tonnage prices. Estimates generally fall in ranges rather than exact numbers due to the nature of sales of offshore vessels and industry conditions. Our value ranges depend on our expectation of the ultimate disposition of the vessel. We will in all circumstances attempt to achieve maximum value for our vessels, but also recognize that certain vessels are more likely to be recycled, especially given the time and effort required to achieve a sale and the costs incurred to maintain a vessel while a searching for a buyer. We establish ranges that in many cases have scrap value as the low end of the range and an expected open market sale value at the top of the range. When there is no expectation within the range that is considered more likely than any other, we apply equal probability weighting to the low and high ends of the valuation range. In addition, in conjunction with the reactivation of a vessel from assets held for sale to the active fleet in the first quarter of 2022 and the concurrent valuation of such vessel at its fair value, we recaptured $0.5 million of impairment charged to ~~expense in the~~ ~~fourth~~ ~~quarter of~~ ~~2021.~~expense. We do not separate our asset impairment expense by segment because of the significant movement of our assets between segments. During the ~~three~~six months ended ~~March 31,~~June 30, 2022 and 2021, we recorded 0 impairment related to assets held for sale.

The following table presents the activity in our asset held for sale account for the periods indicated:

On ~~March 9, 2022,~~ we entered into a definitive agreement to acquire Swire Pacific Offshore Holdings Ltd. (“SPO”) which owns 50 offshore support vessels operating primarily in West Africa, Southeast Asia and the Middle East. We closed the transaction on ~~April 22, 2022.~~ ~~At the closing of the transaction, we paid $42.0 million in cash and issued 8,100,000 warrants, each of which is exercisable at $0.001 per share for~~ ~~one~~ share of our common stock. In addition, we paid $19.6 million in cash related to pre-closing working capital adjustments. The cash portion of the purchase price is subject to customary post-closing adjustment mechanisms related to SPO’s closing date working capital, cash and indebtedness. Due to the recent closing of this acquisition, certain financial information about fair values of assets acquired and liabilities assumed and pro forma financial information are ~~not~~ ~~yet available.~~

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

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 our control, 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 levels of oil and natural gas prices including the levels to support offshore exploration and development 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; potential synergies and integration risks related to the SPO acquisition; 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, 2021, filed with the SEC on March 9, 2022, 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.

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, 2021, filed with the SEC on March 9, 2022.

Our vessels and associated vessel services provide support for all phases of offshore oil and natural gas exploration, field development and production as well as windfarm development and maintenance. 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; geotechnical survey support for windfarm construction, and a variety of other 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 65 years.

At ~~March 31,~~June 30, 2022, we owned ~~150~~196 vessels with an average age of ~~11.4~~11.3 years (excluding 1one joint venture vessel, but including 6five stacked vessels and 12nine vessels designated as assets held for sale) available to serve the global energy industry. We also have two vessels currently under construction. The average age of our ~~138~~187 active vessels at ~~March 31,~~June 30, 2022 is 11.1 years.

On April 22, 2022, we completed our previously disclosed acquisition of ~~Swire Pacific Offshore Holdings Ltd. (“SPO”)~~SPO and its 50 offshore support vessels operating primarily in West Africa, Southeast Asia and the Middle East. As consideration for the acquisition, we paid $42.0 million in cash and issued 8,100,000 warrants, each of which is exercisable at $0.001 per share for one share of our common stock. In addition, we paid $19.6 million in cash related to pre-closing working capital adjustments. The cash portion of the purchase price is subject to customary post-closing adjustment mechanisms related to SPO’s closing date working capital, cash and indebtedness. ~~Including the 50 vessels acquired, our active vessel fleet increased to 188 vessels with an average age of 10.9 years.~~

Our management’s discussion and analysis of financial condition and results of operations (MD&A) is designed to provide information about our financial condition and results of operations from management’s perspective. It includes relevant components of our financial condition and current and long-term liquidity. Primary revenue drivers include numbers of active vessels, active vessel utilization and average day rates. Our most significant operating cost drivers are generally personnel costs and repairs and maintenance. We discuss our liquidity in terms of cash flow that we generate from our operations. Our primary obligations are vessel operating costs including routine planned maintenance, general and administrative costs and long-term debt service. Our primary sources of capital have been our cash on hand, internally generated funds including operating cash flow, vessel sales and long-term debt financing. We also can issue stock or stock-based financial instruments either in the open market or as currency in acquisitions. This ability is impacted by existing market conditions. Our results are affected by the activity of our customers in the offshore oil and gas industry and the supply and demand dynamics associated with our vessels. Our objective is to discuss how all these factors have affected our historical results and, where applicable, how we expect these factors to impact our future results and future liquidity.

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.~~intensifies.

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, 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 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.

We own 40% of DTDW. Our partner, who owns 60%, is a Nigerian national. DTDW owns one offshore service vessel. We also, from time to time, operate company owned vessels in Nigeria for which our partner receives a commission. As of March 31, 2022, we had no company owned vessels operating in Nigeria and the DTDW owned vessel was not employed. As a result, the near-term cash flow projections indicate that DTDW does not have sufficient funds to meet its obligations to us or its vendors. Based on current situations, operations in Nigeria have been severely impacted and we have effectively ceased activity. We have created a fully reserved position in our consolidated balance sheet to account for our expected liabilities related to certain obligations of the joint venture.

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, and in recent times, OPEC + which is an expanded version of OPEC. ~~In addition, offshore~~Offshore oil and gas exploration and development activities have traditionally required higher oil or natural gas prices to justify the much higher expenditure levels ofand longer lead times from exploration to production associated with offshore activities compared to onshore activities. ~~Prices~~Oil and gas prices are subject to significant uncertainty, extreme price cycles and geopolitical risk, and, as a result, ~~are~~can be extremely volatile. In general, the industry considers crude oil pricing in excess of $50.0 per barrel to be required to initiate modest offshore development programs. Prices in excess of $75.0 per barrel are generally considered the level needed to support more robust offshore development and exploration programs. In late 2014 and 2015, oil prices declined significantly from levels of over ~~$100.00~~$100.0 per barrel ~~and continued~~ to ~~decline throughout 2015 and into 2016, to a point trading at~~ less than ~~$30.00~~$30.0 per barrel ~~causing~~beginning an industry-wide ~~downturn.~~downturn that lasted several years. Prices began to stabilize in the ~~$50.00~~$50.0 to ~~$60.00~~$60.0 per barrel range in 2019 and early 2020, suggesting a return to exploration and production activities for our customers. However, in the first quarter of 2020, the industry was severely impacted by a global pandemic (COVID-19) and the resulting loss of demand and decrease in oil prices. Oil prices declined severely in the second quarter ~~in this case~~of 2020, trading at below ~~$20.00~~$20.0 per barrel. Oil prices recovered in 2021 to levels greater than experienced since 2018, and in ~~early~~the first half of 2022 ~~are trading at near $100.00~~have traded in a volatile range between $90.0 and $125.0 per barrel. Natural gas prices are also at historic highs.

In the first quarter of 2022, Russia invaded Ukraine, initiating a military conflict that continues. Russia is the most significant non-OPEC member of OPEC+ and is one of the largest producers of oil and natural gas in the world. It is also a primary supplier of natural gas to the European continent. Many European countries are members of the North Atlantic Treaty Organization (NATO), which also includes the United States. NATO countries have imposed sanctions on Russia in response to the invasion, which has disrupted oil markets and threatened supplies of natural gas to European customers. All of these factors are creating uncertainty in world economies and affecting commodity pricing.

Despite the price recovery, there are lingering effects of the 2014 downturn and the subsequent COVID-19 pandemic downturn in the activity levels of our customers. In addition, there has been recent pressure from certain shareholders and other stakeholders, including governmental entities, on our customers related to environmental, social and governance (ESG) factors. A possible impact of this pressure on our business could be a gradual move away from exploration and development of fossil fuels. Many of our large international customers have recently issued statements supporting changes in their future business plans to move toward a lower environmental impact which has, coupled with the lingering COVID-19 impact, effectively delayed the recovery in our business that would be expected with current commodity price levels. Further, as our customers have responded to pressure to return capital to shareholders in the wake of the 2014 downturn and subsequent industry challenges, they have increasingly shifted their capital allocation strategy from primarily new oil and gas production and reserve additions to a mix of returns to shareholders along with new oil and gas project development. The realistic expectation of a worldwide move towards more sustainable fuels for supplying energy includes the continued use of fossil fuels for some time to come. Despite the pressure to return capital to shareholders and the ongoing social pressure to move away from fossil fuels, our customers have ~~recently made gradual moves~~started to expand exploration and development activities.

We are one of the world’s largest operators of offshore support vessels and we have operations in most of the world’s offshore oil and gas basins. We continue to believe that there will be sufficient opportunities for us to operate our vessels in this sector for many years to come. We have, however, also begun to seek and develop opportunities in the sustainability arena, including the support of offshore wind energy generation and the improvement of our fleet performance regarding emissions and environmental impact. There is current evidence of higher oil and gas demand which has resulted in increased commodity pricing and increased customer activity offshore. We are optimistic that our industry ~~may~~will experience a continued recovery over the coming years.

As COVID-19 spread throughout the world, its impact on many of our locations, including our vessels, has affected our operations. We implemented various protocols for both onshore and offshore personnel in efforts to limit this impact. The effect on our business has included lockdowns of shipyards performing drydocks which delays 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/or temporary delays reduced our year 2020 revenues by 18% and our year 2021 revenues by less than 3%. Our ~~first quarter~~revenues for the six months ended June 30, 2022 ~~revenues~~ were not significantly impacted. In addition, in the year ended December 31, 2021, and the ~~quarter~~six months ended ~~March 31,~~June 30, 2022 we incurred approximately $7.0 million and ~~$1.4~~$2.2 million, respectively, in higher operating costs, primarily related to additional crew costs, mobilization and vessel stacking costs as a result of these unplanned contract cancellations or delays. There may be additional cancellations or delays.

Climate change is expected to increase the frequency and intensity of certain adverse weather patterns, which may impact our business. Due to concern over the risk of climate change, several countries have adopted, or are considering the adoption of, regulatory frameworks to reduce the emission of carbon dioxide, methane and other gases (greenhouse gas emissions). In addition, the increased regulation of environmental emissions is expected to create greater incentives for the use of alternative energy sources. Consideration of climate change-related issues and the responses to those issues through international agreements and national, regional, or state regulatory frameworks are integrated into our strategy, planning, forecasting and risk management processes, where applicable.

Our primary business is to support the fossil fuel industry. In addition, we burn fossil fuels in operating our vessels. The fossil fuel industry is considered one of the primary contributors to the elements of global climate change. The primary source of energy in the world is fossil fuels. We believe that continued use of fossil fuels will be important as the world transitions to alternative energy sources. We are prepared to participate in the transition but also to continue to support the fossil fuel industry. We have begun to take measures to address the future of our company and our impact on climate change. Such measures include modifications to many of our vessels to reduce our carbon footprint (approximately ~~$10.3~~$10.9 million of emissions focused costs including fuel monitoring systems and batteries for supplemental power are included in our net properties and equipment amount as of ~~March 31,~~June 30, 2022); developing associations with alternative energy providers such as windfarms; and ~~creation~~publication of a written sustainability report. We have also recently formed an ESG committee within our Board of Directors. We are in the early stages on most of these measures and continue to develop our strategies and solutions. The measures we undertake will continue to evolve in compliance with new regulations and in recognition of applicable new sustainable technologies.

The SEC has recently proposed rule changes that would require registrants to include certain climate-related disclosures in their registration statements and periodic reports, including information about climate-related risks that are reasonably likely to have a material impact on their business, results of operations, or financial condition, and certain climate-related financial statement metrics in a note to their audited financial statements. The required information about climate-related risks also would include disclosure of a registrant’s greenhouse gas emissions, which have become a commonly used metric to assess a registrant’s exposure to such risks.

The proposed rule changes would require a registrant to disclose information about (i) the registrant’s governance of climate-related risks and relevant risk management processes; (ii) how any climate-related risks identified by the registrant have had or are likely to have a material impact on its business and consolidated financial statements, which may manifest over the short-, medium-, or long-term; (iii) how any identified climate-related risks have affected or are likely to affect the registrant’s strategy, business model, and outlook; and (iv) the impact of climate-related events (severe weather events and other natural conditions) and transition activities on the line items of a registrant’s consolidated financial statements, as well as on the financial estimates and assumptions used in the financial statements.

For a detailed discussion of climate change and related governmental regulation, including associated risks and possible impact on our business, financial conditions and results of operations, please see "Risk Factors" in Item 1A of our Annual Report on Form 10-K for the year ended December 31, 2021, filed with the SEC on March 9, 2022.

In conjunction with the acquisition of SPO, the previous Middle East/Asia Pacific segment has been split into the Middle East segment and the Asia Pacific segment. Our previous operations in Southeast Asia and Australia, along with the legacy SPO operations in the Asia Pacific region, now form the new Asia Pacific segment. Our segment disclosures reflect the current segment alignment for all periods presented.

Each of our five operating segments is managed by a senior executive reporting directly to our Chief Executive Officer, the chief operating decision maker. Discrete financial information is available for each of the segments, and our Chief Executive Officer uses the results of each of the operating segments for resource allocation and performance evaluation.

Results of Operations – Three Months Ended ~~March 31,~~June 30, 2022 compared to ~~March 31,~~June 30, 2021

Revenues for the quarters ended ~~March 31,~~June 30, 2022 and 2021 were ~~$105.7~~$163.4 million and ~~$83.5~~$90.0 million, respectively. The ~~$22.2~~$73.4 million increase in revenue is primarily due to the acquisition of 50 vessels in the SPO acquisition and to increases in utilization, average day rates and active vessels. Overall, we had 1554 more average active vessels in the ~~first~~second quarter of 2022 than in the ~~first~~second quarter of 2021. Average day rates ~~also~~ increased from ~~$9,993~~$10,435 per day in 2021 to ~~$10,687~~$12,544 in 2022. Active utilization increased from ~~77.6%~~78.4% in 2021 to 82.5% in 2022. The vessels acquired in the SPO acquisition accounted for 68% of the increase in average active vessels with an average day rate of $14,553 per day and average active utilization of 87.3%.

Vessel operating costs for the quarters ended ~~March 31,~~June 30, 2022 and 2021 were ~~$68.5~~$100.3 million and ~~$61.0~~$64.3 million, respectively. The increase is primarily due to the increase in vessel activity, as we have 1554 more active vessels in our fleet in the ~~first~~second quarter of 2022 compared to the ~~first~~second quarter of 2021 primarily due to the additional vessels from the SPO acquisition and also as ~~we recover~~a result of our continued recovery from the low vessel utilization levels caused by the pandemic and ~~we have~~ increased activity as ~~the~~higher crude oil ~~price~~prices has resulted in more activity from our customers.

Depreciation and amortization expense for the quarters ended ~~March 31,~~June 30, 2022 and 2021 were ~~$26.7~~$31.8 million and ~~$29.7~~$28.5 million, respectively, largely due to an increase in depreciation expense because of a ~~decrease in~~higher vessel count resulting from the SPO acquisition partially offset by lower amortization ~~expense related to~~of deferred drydock ~~expenditures and, to a lesser extent, to lower depreciation resulting from vessels sales in 2021 and 2022.~~expenditures.

General and administrative expenses for the quarters ended ~~March 31,~~June 30, 2022 and 2021 were ~~$18.2~~$27.8 million and ~~$16.0~~$16.8 million, respectively. The increase is primarily due to increased general and administrative costs associated with the Singapore and Dubai offices acquired in the SPO acquisition and professional fees and transaction costs related to ~~our~~the SPO acquisition ~~of Swire Pacific Offshore in~~which totaled $7.2 million for the ~~second quarter of 2022.~~quarter.

Included in ~~gain (loss)~~loss on asset dispositions, net for the quarter ended ~~March 31,~~June 30, 2022, are ~~$0.2~~$1.3 million of net ~~gains~~losses from the disposal of ~~five~~four vessels and other assets. During the quarter ended ~~March 31,~~June 30, 2021, we recognized losses of ~~$1.9~~$0.9 million related to the disposal of ~~six~~seven vessels and other assets.

~~Long-lived asset impairment during~~ One of the ~~quarter ended March 31, 2022~~vessel sales in 2021 was ~~$0.5~~to a third-party operator, whose Chief Operating Officer, Matthew Rigdon, is the son of Larry Rigdon, the chairman of our Board of Directors. This vessel was sold for proceeds of $11.4 million, ~~credit related to recovery~~all of ~~impairment on a vessel reclassified from assets held for sale back to the active fleet. There~~which was ~~no long lived asset impairment~~collected in the ~~quarters ended March 31, 2022 and 2021.~~

~~In the first~~second quarter of 2021, and we recognized ~~$1.8~~a gain of $4.3 million ~~in losses related to our interest in~~on the ~~Sonatide joint venture in Angola. On January 3, 2022, we acquired our partner’s 51% interest in Sonatide and ceased recording equity gains and losses.~~sale.

Interest expense for the quarters ended ~~March 31,~~June 30, 2022 and 2021, was ~~$4.2~~$4.3 million and ~~$4.5~~$3.9 million, respectively. The ~~decrease primarily~~increase reflects higher overall long-term debt balance and higher coupon rate on the ~~acceleration of debt discount amortization due~~Senior Secured Bonds issued in November 2021 compared to the ~~early payoff of $26.4 million~~Senior Secured Notes and Troms debt outstanding in the ~~first quarter of 2021. In addition, we recorded $3.4 million in interest income and other, net in the first quarter of 2022 compared to less than $0.1 million in the first~~second quarter of 2021. The ~~2022 income~~debt outstanding in 2021 was ~~primarily related~~replaced by the Senior Secured Bonds in November 2021.

We recognized a $14.2 million loss to value the ~~$1.3 million bargain~~warrant liability at fair value on the date that we amended the SPO share purchase ~~gain~~agreement to allow us to reclassify the warrants from liabilities to equity based on ~~our~~the difference in the Tidewater common stock price on amendment date and the acquisition ~~of 51% of Sonatide and $1.9 million in interest and other income related to a litigation settlement for one of our vessels.~~date closing common stock price.

During the quarter ended ~~March 31,~~June 30, 2022, we recognized foreign exchange losses of $1.9 million and during the quarter ended June 30, 2021 we recognized foreign exchange gains of ~~$0.9 million and during the quarter ended March 31, 2021 we recognized foreign exchange losses of $0.9~~$0.4 million.

The income tax expense for the three months ended ~~March 31,~~June 30, 2022 was ~~$5.2~~$6.6 million compared to an income tax expense of ~~$2.0~~$6.0 million for the three months ending ~~March 31,~~June 30, 2021. The tax expense for the three months ended ~~March 31,~~June 30, 2022 is mainly attributable to foreign taxes that are calculated on the basis of deemed profit or minimum tax regimes or withholding tax on revenue instead of taxable income or loss. Additionally, the inability to offset profits in one country with losses in a different country contributes to having a tax liability despite large consolidated pre-tax losses.

Results of Operations – Six Months Ended June 30, 2022 compared to June 30, 2021

Revenues for the six months ended June 30, 2022 and 2021 were $269.2 million and $173.5 million, respectively. The $95.7 million increase in revenue is primarily due to the acquisition of 50 vessels in the SPO acquisition which closed on April 22, 2022 and to increases in utilization, average day rates and active vessels. Overall, we had 35 more average active vessels in the first six months of 2022 than in the first six months of 2021. Average day rates also increased from $10,219 per day in 2021 to $11,738 in 2022. Active utilization increased from 78.0% in 2021 to 82.5% in 2022. The vessels acquired in the SPO acquisition are included in our results from the acquisition date and accounted for 53% of the increase in average active vessels with an average day rate of $14,553 per day and average active utilization of 87.3%.

Vessel operating costs for the six months ended June 30, 2022 and 2021 were $168.8 million and $125.3 million, respectively. The increase is primarily due to the increase in vessel activity, as we have 35 more active vessels in our fleet in the first six months of 2022 compared to the first six months of 2021 primarily due to the additional vessels from the SPO acquisition and also as a result of our continued recovery from the low vessel utilization levels caused by the pandemic and the increased activity as higher crude oil prices has resulted in more activity from our customers.

Depreciation and amortization expense for the six months ended June 30, 2022 and 2021 were $58.4 million and $58.3 million, respectively. Depreciation expense only increased slightly because the higher vessel count from the SPO acquisition was largely offset by a decrease in amortization expense related to deferred drydock expenditures.

General and administrative expenses for the six months ended June 30, 2022 and 2021 were $46.0 million and $32.8 million, respectively. The increase is primarily due to general and administrative costs associated with the Singapore and Dubai offices acquired in the SPO acquisition and professional fees and transaction costs related to the SPO acquisition which totaled $9.4 million for the six months ended June 30, 2022.

Included in loss on asset dispositions, net for the six months ended June 30, 2022, are $1.1 million of net losses from the disposal of nine vessels and other assets. During the six months ended June 30, 2021, we recognized losses of $2.9 million related to the disposal of 13 vessels and other assets. One of the vessel sales in 2021 was to a third-party operator, whose Chief Operating Officer, Matthew Rigdon, is the son of Larry Rigdon, the chairman of our Board of Directors. This vessel was sold for proceeds of $11.4 million, all of which was collected in the second quarter of 2021, and we recognized a gain of $4.3 million on the sale.

Long-lived asset impairment during the six months ended June 30, 2022 was $0.5 million credit related to recovery of impairment on a vessel reclassified from assets held for sale back to the active fleet. There was no long-lived asset impairment in the six months ended June 30, 2021.

In the first six months of 2021, we recognized $1.8 million in losses related to our interest in the Sonatide joint venture in Angola. On January 3, 2022, we acquired our partner’s 51% interest in Sonatide and ceased recording equity gains and losses.

Interest income and other, net was $3.8 million higher in the first six months of 2022 compared to the first six months of 2021. The 2022 income was primarily related to the $1.3 million bargain purchase gain on our acquisition of 51% of Sonatide and $1.9 million in interest and other income related to a litigation settlement for one of our vessels.

We recognized a $14.2 million loss to value the warrant liability at fair value on the date that we amended the SPO share purchase agreement to allow us to reclassify the warrants from liabilities to equity based on the difference in the Tidewater common stock price on amendment date and the acquisition date closing common stock price.

During the six months ended June 30, 2022 and 2021, we recognized foreign exchange losses of $0.9 million and $0.4 million, respectively.

The income tax expense for the six months ended June 30, 2022 was $11.8 million compared to an income tax expense of $8.0 million for the six months ending June 30, 2021. The tax expense for the six months ended June 30, 2022 is mainly attributable to foreign taxes that are calculated on the basis of deemed profit or minimum tax regimes or withholding tax on revenue instead of taxable income or loss. Additionally, the inability to offset profits in one country with losses in a different country contributes to having a tax liability despite large consolidated pre-tax losses.

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:

(In Thousands)	Three Months Ended									Three Months Ended									Six Months Ended
	March 31, 2022				March 31, 2021					June 30, 2022				June 30, 2021					June 30, 2022				June 30, 2021
Vessel revenues:
Americas	$	28,444	27	%	$	26,224		32	%	$	37,520	23	%	$	23,481		27	%	$	65,964	25	%	$	49,705		29	%
Middle East/Asia Pacific		25,115	24	%		24,414		30	%
Asia Pacific											16,362	10	%		4,870		6	%		21,259	8	%		8,442		5	%
Middle East											28,396	18	%		20,758		23	%		48,614	18	%		41,600		25	%
Europe/Mediterranean		23,919	23	%		14,749		18	%		32,475	20	%		22,467		25	%		56,394	21	%		37,216		22	%
West Africa		26,398	26	%		15,606		19	%		47,422	29	%		16,938		19	%		73,820	28	%		32,544		19	%
Total vessel revenues	$	103,876	100	%	$	80,993		100	%	$	162,175	100	%	$	88,514		100	%	$	266,051	100	%	$	169,507		100	%
Vessel operating costs:
Americas:
Crew costs	$	11,252	40	%	$	10,594		40	%	$	12,949	34	%	$	11,132		47	%	$	24,201	37	%	$	21,726		44	%
Repair and maintenance		2,627	9	%		2,714		10	%		2,866	8	%		2,192		9	%		5,493	8	%		4,906		10	%
Insurance		367	1	%		200		1	%		248	1	%		(30	)	(0	)%		615	1	%		170		0	%
Fuel, lube and supplies		2,385	8	%		1,774		7	%		2,326	6	%		1,952		8	%		4,711	7	%		3,726		7	%
Other		2,196	8	%		1,980		8	%		3,054	8	%		2,972		13	%		5,250	8	%		4,952		10	%
	$	18,827	66	%	$	17,262		66	%	$	21,443	57	%	$	18,218		78	%	$	40,270	61	%	$	35,480		71	%
Middle East/Asia Pacific:
Asia Pacific:
Crew costs										$	8,138	50	%	$	801		16	%	$	8,926	42	%	$	1,651		20	%
Repair and maintenance											945	6	%		268		6	%		1,229	6	%		818		10	%
Insurance											90	0	%		(10	)	(0	)%		144	1	%		30		0	%
Fuel, lube and supplies											1,590	10	%		205		4	%		1,695	8	%		615		7	%
Other											1,176	7	%		459		9	%		1,598	7	%		770		9	%
										$	11,939	73	%	$	1,723		35	%	$	13,592	64	%	$	3,884		46	%
Middle East
Crew costs	$	9,253	37	%	$	9,639		39	%	$	11,193	39	%	$	9,109		44	%	$	19,658	40	%	$	17,898		43	%
Repair and maintenance		2,408	10	%		2,659		11	%		3,429	12	%		2,364		11	%		5,553	12	%		4,473		11	%
Insurance		351	1	%		(224	)	(1	)%		325	1	%		47		0	%		622	1	%		(217	)	(1	)%
Fuel, lube and supplies		1,664	7	%		1,569		6	%		2,700	10	%		1,289		6	%		4,259	9	%		2,448		6	%
Other		2,879	11	%		2,959		12	%		2,249	8	%		2,233		11	%		4,706	10	%		4,881		12	%
	$	16,555	66	%	$	16,602		68	%	$	19,896	70	%	$	15,042		72	%	$	34,798	72	%	$	29,483		71	%
Europe/Mediterranean:
Crew costs	$	12,003	50	%	$	9,022		61	%	$	12,349	38	%	$	10,519		47	%	$	24,352	43	%	$	19,541		53	%
Repair and maintenance		2,106	9	%		1,673		11	%		2,414	7	%		2,244		10	%		4,520	8	%		3,917		11	%
Insurance		309	1	%		299		2	%		307	1	%		(131	)	(1	)%		616	1	%		168		0	%
Fuel, lube and supplies		1,077	5	%		759		5	%		1,740	5	%		864		4	%		2,817	5	%		1,623		4	%
Other		2,026	8	%		1,707		12	%		2,468	8	%		1,803		8	%		4,494	8	%		3,510		9	%
	$	17,521	73	%	$	13,460		91	%	$	19,278	59	%	$	15,299		68	%	$	36,799	65	%	$	28,759		77	%
West Africa:
Crew costs	$	8,329	32	%	$	5,907		38	%	$	16,010	34	%	$	6,124		36	%	$	24,339	33	%	$	12,031		37	%
Repair and maintenance		2,320	9	%		2,391		15	%		3,823	8	%		2,466		15	%		6,143	8	%		4,857		15	%
Insurance		357	1	%		348		2	%		396	1	%		(13	)	(0	)%		753	1	%		335		1	%
Fuel, lube and supplies		1,950	7	%		1,758		11	%		3,165	6	%		2,231		13	%		5,115	7	%		3,989		12	%
Other		2,652	10	%		3,292		21	%		4,307	9	%		3,173		19	%		6,959	10	%		6,465		20	%
	$	15,608	59	%	$	13,696		88	%	$	27,701	58	%	$	13,981		83	%	$	43,309	59	%	$	27,677		85	%
Vessel operating costs:
Crew costs	$	40,837	39	%	$	35,162		43	%	$	60,639	38	%	$	37,685		43	%	$	101,476	38	%	$	72,847		43	%
Repair and maintenance		9,461	9	%		9,437		12	%		13,477	8	%		9,534		11	%		22,938	8	%		18,971		11	%
Insurance		1,384	1	%		623		1	%		1,366	1	%		(137	)	(0	)%		2,750	1	%		486		1	%
Fuel, lube and supplies		7,076	7	%		5,860		7	%		11,521	7	%		6,541		7	%		18,597	7	%		12,401		7	%
Other		9,753	9	%		9,938		12	%		13,254	8	%		10,640		12	%		23,007	9	%		20,578		12	%
Total vessel operating costs	$	68,511	66	%	$	61,020		75	%	$	100,257	62	%	$	64,263		73	%	$	168,768	63	%	$	125,283		74	%

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 ~~March 31,~~June 30, 2022 and 2021:

The following table presents segment and total depreciation and amortization expense and the related segment and total vessel depreciation and amortization expense as a percentage of segment and total vessel revenues for the three and six months ended ~~March 31,~~June 30, 2022 and 2021:

The following table compares operating ~~loss~~income (loss) and other components of ~~loss~~income (loss) and its related percentage of total revenue for the three and six months ended ~~March 31,~~June 30, 2022 and 2021:

Results for three months ended ~~March 31,~~June 30, 2022 compared to ~~March 31,~~June 30, 2021

Americas Segment Operations. Vessel revenues in the Americas segment increased ~~8.5%~~59.8%, or ~~$2.2~~$14.0 million, during the quarter ended ~~March 31,~~June 30, 2022, as compared to the quarter ended ~~March 31,~~June 30, 2021. This increase is primarily the result of a ~~30.6%~~25.9% increase in average day rates largely due the demand recovery with higher crude oil prices and the ~~end~~reduction of COVID-19 ~~restrictions. This~~restrictions and an increase ~~was offset by a decrease~~ in average utilization from ~~87.9%~~76.4% in the ~~first~~second quarter of 2021 to ~~75.5%~~86.8% in the ~~first~~second quarter of ~~2022 due to vessels~~2022. The SPO acquisition added one average vessel in ~~drydock~~the Americas segment that contributed 77.0% utilization, $15,226 average day rate and ~~a one vessel decrease~~$0.7 million in ~~average active vessels.~~revenue.

Vessel operating ~~loss~~profit for the Americas segment for the quarter ended ~~March 31,~~June 30, 2022 was ~~$0.1~~$5.9 million, compared to a ~~$1.7~~$4.9 million operating loss for the quarter ended ~~March 31,~~June 30, 2021. The ~~decrease~~increase in operating ~~loss~~profit was largely due to the increase in revenue ~~and a $0.9 million decrease in depreciation and amortization~~ partially offset by a ~~$1.6~~$3.2 million increase in operating expenses, resulting mainly from reactivation ~~costs.~~ costs and $0.8 million from the additional SPO vessel.

Asia Pacific Segment Operations. Vessel revenues in the Asia Pacific segment increased 236.0%, or $11.5 million, during the quarter ended June 30, 2022, as compared to the quarter ended June 30, 2021. Average active vessels increased by 13, entirely as a result of the acquisition of SPO. Average day rates increased 28.4%.

The ~~decrease~~Asia Pacific segment reported an operating loss of $0.9 million for the quarter ended June 30, 2022, compared to a $1.7 million loss for the quarter ended June 30, 2021. The increase in revenue was offset by additional operating expenses of $10.2 million, general and administrative costs of $3.1 million, depreciation and amortization ~~was attributable to lower amortization~~expense of ~~deferred drydock costs. General and administrative costs remained~~$1.5 million, all as a result of the ~~same.~~SPO acquisition.

Middle ~~East/Asia Pacific~~East Segment Operations. Vessel revenues in the Middle ~~East/Asia Pacific~~East segment increased ~~2.9%~~36.8%, or ~~$0.7~~$7.6 million, during the quarter ended ~~March 31,~~June 30, 2022, as compared to the quarter ended ~~March 31,~~June 30, 2021. Average active vessels increased by nine, with five average vessels added from the SPO acquisition that contributed $6.2 million in revenue. Active utilization for the quarter ended ~~March 31,~~June 30, 2022 ~~increased~~decreased to ~~85.7%~~80.8% from ~~84.0% and~~86.8% but average day rates increased ~~1.0%~~15.5%. ~~Average active vessels remained the same.~~

The Middle ~~East/Asia Pacific~~East segment reported an operating ~~profit~~loss of $0.3 million for the quarter ended ~~March 31,~~June 30, 2022, compared to an operating loss of ~~$1.9~~$1.5 million for the quarter ended ~~March 31,~~June 30, 2021 ~~primarily due to~~as the increase in revenue was largely offset by a ~~$0.6~~$4.9 million ~~decrease~~increase in operating costs ($2.7 million attributable to the acquired vessels), a $1.1 million increase in depreciation and amortization, ~~due to lower amortization of deferred drydock costs,~~ and a ~~$0.8~~$0.5 million ~~decrease~~increase in general and administrative costs. The increase in costs were primarily ~~due to bad debt expense incurred~~a result of the five average vessels acquired in ~~2021. The pandemic downturn did not significantly impact this segment’s operations.~~the SPO acquisition and addition of the SPO Dubai office.

Europe/Mediterranean Segment Operations. Vessel revenues in the Europe/Mediterranean segment increased ~~62.2%~~44.5%, or ~~$9.2~~$10.0 million, during the quarter ended ~~March 31,~~June 30, 2022, as compared to the quarter ended ~~March 31,~~June 30, 2021. The increased revenue was attributable to ~~seven~~four more average active vessels (one from the SPO acquisition, which had revenue of $1.8 million) combined with 21.3% higher average day ~~rates and higher active utilization.~~rates. Active utilization ~~increased~~decreased slightly from ~~81.3%~~90.6% to ~~91.3% and average day rates increased 1.4%~~88.1%.

The Europe/Mediterranean segment reported an operating ~~loss~~profit of ~~$2.4~~$4.3 million for the quarter ended ~~March 31,~~June 30, 2022, compared to an operating loss of ~~$8.0~~$2.0 million for the quarter ended ~~March 31,~~June 30, 2021. The ~~lower~~higher operating ~~loss~~profit was due to ~~$4.1~~the revenue increase offset by $4.0 million in higher operating costs associated with the increase in average ~~vessels and a $0.2~~vessels. The SPO vessel incurred $1.1 million ~~increase~~ in ~~general and administrative costs. This was partially offset by higher revenue.~~operating cost for the period. Depreciation and amortization also decreased by ~~$0.7~~$0.3 million due to ~~lower total vessels related to transfers and vessel sales and~~ lower drydock amortization.

West Africa Segment Operations. Vessel revenues in the West Africa segment increased ~~69.2%~~180.0% or ~~$10.8~~$30.5 million, during the quarter ended ~~March 31,~~June 30, 2022, as compared to the quarter ended ~~March 31,~~June 30, 2021. The West Africa average active vessel fleet increased by ~~nine~~24 vessels (16 from the SPO acquisition) during the comparative periods. West Africa segment active utilization increased as well from ~~59.6%~~61.8% during the quarter ended ~~March 31,~~June 30, 2021 to ~~79.1%~~82.9% during the quarter ended ~~March 31,~~June 30, 2022. In addition, average day rates increased ~~1.4% due to the change in the mix of remaining contracts.~~25.8%. The increases in revenue are ~~almost entirely~~ the result of the additional SPO vessels, which added $19.5 million in revenue and higher demand caused by ~~lessening restriction~~reduced restrictions from the pandemic and the higher price of crude oil.

West Africa reported an operating profit of ~~$3.2~~$9.3 million for the quarter ended ~~March 31,~~June 30, 2022, compared to an operating loss of ~~$6.8~~$5.4 million for the quarter ended ~~March 31,~~June 30, 2021. The increase in operating results is largely due to the increase in revenue partially offset by ~~$1.9~~$13.7 million ($11.9 million attributable to the acquired SPO vessels) in higher operating costs primarily related to the increase in average active vessels. In addition, general and administrative costs increased by $0.7 million due to additional costs associated with the SPO acquisition and our acquisition of the remaining 51% of the Angolan joint venture in January 2022. Depreciation and amortization increased by $1.4 million due largely to the addition of the SPO vessels.

Americas Segment Operations. Vessel revenues in the Americas segment increased 32.7%, or $16.3 million, during the six months ended June 30, 2022, as compared to the six months ended June 30, 2021. This increase is primarily the result of a two average vessel increase and a 29.3% increase in average day rates largely due the demand recovery with higher crude oil prices and the reduction of COVID-19 restrictions. Average utilization decreased slightly from 82.4% in the first six months of 2021 to 81.4% in the first six months of 2022. The SPO acquisition added less than one average vessel in the Americas segment that contributed 77.0% utilization and a $15,226 average day rate. The additional vessel added $0.7 million to revenue.

Vessel operating profit for the Americas segment for the six months ended June 30, 2022 was $5.8 million, compared to a $6.6 million operating loss for the six months ended June 30, 2021. The increase in operating profit was largely due to the increase in revenue partially offset by a $4.8 million increase in operating expenses ($0.8 million from the additional SPO vessel), resulting mainly from reactivation costs. Depreciation and amortization decreased slightly due to lower amortization of deferred drydock costs.

Asia Pacific Segment Operations. Vessel revenues in the Asia Pacific segment increased 151.8%, or $12.8 million, during the six months ended June 30, 2022, as compared to the six months ended June 30, 2021. Average active vessels increased by seven, entirely as a result of the acquisition of SPO. Average day rates increased 25.4%. The vessels from the SPO acquisition added $15.0 million to revenue.

The Asia Pacific segment reported an operating profit of $1.3 million for the six months ended June 30, 2022, compared to $1.7 million for the six months ended June 30, 2021. The increase in revenue was offset by a $9.7 million increase in operating costs ($10.2 million increase attributable to SPO vessels), a $0.5 million increase in depreciation and amortization, and a $3.0 million increase in general and administrative costs primarily due to the addition of the SPO Singapore office.

Middle East Segment Operations. Vessel revenues in the Middle East segment increased 16.9%, or $7.0 million, during the six months ended June 30, 2022, as compared to the six months ended June 30, 2021. Average active vessels increased by four, with three vessels added from the SPO acquisition that added $6.2 million in revenue. Active utilization for the quarter ended June 30, 2022, decreased to 82.1% from 85.6% but average day rates increased 7.5%.

The Middle East segment reported an operating loss of $2.2 million for the six months ended June 30, 2022, compared to an operating loss of $3.3 million for the six months ended June 30, 2021 primarily due to the increase in revenue partially offset by a $5.3 million increase in operating costs ($2.7 million attributable to the acquired vessels) and a $0.9 million increase in depreciation and amortization.

Europe/Mediterranean Segment Operations. Vessel revenues in the Europe/Mediterranean segment increased 51.5%, or $19.2 million, during the six months ended June 30, 2022, as compared to the six months ended June 30, 2021. The increased revenue was attributable to six more average active vessels (less than one from the SPO acquisition, which had revenue of $1.8 million) combined with higher average day rates and higher active utilization largely due the demand recovery with higher crude oil prices and the reduction of COVID-19 restrictions. Active utilization increased from 86.5% to 89.7% and average day rates increased 11.3%.

The Europe/Mediterranean segment reported an operating profit of $1.8 million for the six months ended June 30, 2022, compared to an operating loss of $10.0 million for the six months ended June 30, 2021. The improved results are from the increase in revenue partially offset by $8.0 million in higher operating costs associated with the increase in average vessels and a $0.3 million increase in general and administrative costs. The SPO vessel incurred $1.1 million in operating costs during the period. Depreciation and amortization decreased by ~~$0.3~~$1.0 million due to lower ~~personnel~~drydock amortization.

West Africa Segment Operations. Vessel revenues in the West Africa segment increased 126.8%, or $41.3 million, during the six months ended June 30, 2022, as compared to the six months ended June 30, 2021. The West Africa average active vessel fleet increased by 16 vessels during the comparative periods. The SPO acquisition added eight vessels to the average vessel count and contributed $19.7 million in revenue. West Africa segment active utilization increased as well from 60.8% during the six months ended June 30, 2021 to 81.3% during the six months ended June 30, 2022. In addition, average day rates increased 15.7%. The increases in revenue are due to the addition of the SPO vessels, the higher demand caused by reduced restrictions from the pandemic and the higher price of crude oil.

West Africa reported an operating profit of $12.5 million for the six months ended June 30, 2022 compared to an operating loss of $12.1 million for the six months ended June 30, 2021. The increase in operating results is due to the increase in revenue partially offset by $15.6 million ($11.9 million attributable to the acquired SPO vessels) in higher operating costs primarily related to the increase in average active vessels. In addition, general and administrative costs increased by $0.4 million and depreciation and amortization ~~decreased~~increased by ~~$0.8~~$0.6 million due largely to ~~vessels designated to assets held for sale and lower drydock amortization.~~the addition of the SPO vessels.

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.

Total vessel utilization is calculated on all vessels in service (which includes stacked vessels, vessels held for sale and vessels in drydock) but dodoes not include vessels owned by joint ventures (one and three vessels at ~~both March 31,~~June 30, 2022 and 2021, respectively). Active utilization is calculated on active vessels (which excludes vessels held for sale and stacked vessels). 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 ~~March 31,~~June 30, 2022 and 2021:

	Three Months Ended						Three Months Ended						Six Months Ended
	March 31, 2022			March 31, 2021			June 30, 2022			June 30, 2021			June 30, 2022			June 30, 2021
SEGMENT STATISTICS:
Americas fleet:
Utilization		60.7	%		61.1	%		73.0	%		51.0	%		66.9	%		56.1	%
Active utilization		75.5	%		87.9	%		86.8	%		76.4	%		81.4	%		82.4	%
Average vessel day rates	$	15,501		$	11,865		$	16,569		$	13,162		$	16,091		$	12,444
Average total vessels		34			40			34			38			34			39
Average stacked vessels		(7	)		(12	)		(5	)		(13	)		(6	)		(13	)
Average active vessels		27			28			29			25			28			26

Middle East/Asia Pacific fleet:
Asia Pacific fleet:
Utilization								67.9	%		100.0	%		74.3	%		90.9	%
Active utilization								70.4	%		100.0	%		76.4	%		90.9	%
Average vessel day rates							$	13,748		$	10,704		$	12,864		$	10,260
Average total vessels								19			5			12			5
Average stacked vessels								(1	)		—			—			—
Average active vessels								18			5			12			5

Middle East fleet:
Utilization		85.1	%		77.9	%		80.8	%		83.4	%		81.8	%		80.3	%
Active utilization		85.7	%		84.0	%		80.8	%		86.8	%		82.1	%		85.6	%
Average vessel day rates	$	8,589		$	8,506		$	9,490		$	8,213		$	8,887		$	8,270
Average total vessels		38			41			41			33			37			35
Average stacked vessels		—			(3	)		—			(1	)		—			(2	)
Average active vessels		38			38			41			32			37			33

Europe/Mediterranean fleet:
Utilization		77.8	%		44.7	%		82.8	%		64.7	%		80.3	%		54.5	%
Active utilization		91.3	%		81.3	%		88.1	%		90.6	%		89.7	%		86.5	%
Average vessel day rates	$	12,124		$	11,960		$	15,776		$	13,005		$	13,989		$	12,570
Average total vessels		28			31			27			29			28			30
Average stacked vessels		(4	)		(14	)		(2	)		(8	)		(3	)		(11	)
Average active vessels		24			17			25			21			25			19

West Africa fleet:
Utilization		63.5	%		34.1	%		72.7	%		38.1	%		68.7	%		36.1	%
Active utilization		79.1	%		59.6	%		82.9	%		61.8	%		81.3	%		60.8	%
Average vessel day rates	$	8,834		$	8,711		$	10,721		$	8,521		$	9,960		$	8,611
Average total vessels		52			58			67			57			60			58
Average stacked vessels		(10	)		(25	)		(8	)		(22	)		(9	)		(23	)
Average active vessels		42			33			59			35			51			35

Worldwide fleet:
Utilization		70.9	%		52.9	%		75.5	%		57.0	%		73.5	%		55.0	%
Active utilization		82.5	%		77.6	%		82.5	%		78.4	%		82.5	%		78.0	%
Average vessel day rates	$	10,687		$	9,993		$	12,544		$	10,435		$	11,738		$	10,219
Average total vessels		152			170			188			162			171			167
Average stacked vessels		(21	)		(54	)		(16	)		(44	)		(18	)		(49	)
Average active vessels		131			116			172			118			153			118

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 of utilization statistics. We also include our assets held for sale in stacked vessels as they continue to incur stacking related costs. We had 1814 (nine held for sale) and 5240 (14 held for sale) stacked vessels at ~~March 31,~~June 30, 2022 and 2021, respectively. The decrease in stacked vessels is ~~primarily~~ attributable to vessel ~~sales.~~sales and reactivation of vessels. We also reclassified three vessels in 2021 and one vessel in 2022 from assets held for sale to the active fleet. Total stacking costs included in vessel operating costs for the three months ended ~~March 31,~~June 30, 2022 and 2021, were ~~$1.4~~$0.7 million and ~~$5.4~~$3.8 million, respectively. Total stacking costs included in vessel operating costs for the six months ended June 30, 2022 and 2021, were $2.1 million and $9.2 million, respectively.

We seek opportunities to sell and/or responsibly recycle 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 during the first ~~three~~six months of 2022 included ~~five~~nine vessels that were classified as assets held for sale.

As of ~~March 31,~~June 30, 2022, we had ~~$143.7~~$91.8 million in cash and cash equivalents (including 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, partner and 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 third-party and intercompany debt 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 U.S. operations. The SPO acquisition closed in April 2022 and decreased our net cash position by ~~$25.6 million, but is expected to increase our revenues and operating cash flows substantially post acquisition.~~$28.5 million.

Our objective in financing our business is to maintain and preserve adequate financial resources and sufficient levels of liquidity. WeIn addition to our cash on hand, we also have a $25.0 million revolving credit facility which matures in 2026. No amounts have been drawn on this facility. As of ~~March 31,~~June 30, 2022, we had $175.0 million of long-term debt on our consolidated balance sheet of which none is due until 2026. The 2026 Senior Secured Notes and the revolving credit facility contain two financial covenants: (i) a minimum free liquidity test of the obligors (as defined) equal to the greater of $20.0 million or 10% of net interest-bearing debt and (ii) a minimum equity ratio of 30%, in each case for us and our consolidated subsidiaries. We are currently in compliance and anticipate being able to maintain ongoing compliance with these two financial covenants. Cash and cash equivalents, our revolving credit facility and future net cash provided by operating activities provide us, in our opinion, with sufficient liquidity to meet our ~~liquidity~~ongoing operational requirements. In addition, we have available a “shelf” registration under which we may offer and sell up to $300.0 million of any combination of common stock, debt securities, depository shares, preferred stock or warrants from time to time in one or more classes or series or amounts, at prices and on terms that we will determine at the time of the offering. We also have an “at-the-market” offering registered with the SEC under which we may offer and sell shares of our common stock, having an aggregate offering proceeds of up to $30.0 million from time to time through the ~~Agents~~agents acting as a sales agent or directly to the ~~Agents~~agents acting as a ~~principal.~~principals. We expect to use the net proceeds from the sale of the securities covered by these offerings for general corporate purposes, which may include repayment or refinancing of indebtedness, working capital, capital expenditures, investments, additional acquisitions and other business opportunities.

Net cash provided by (used in) operating activities for the ~~three~~six months ended ~~March 31,~~June 30, 2022 and 2021 was ~~$(11.6)~~$(33.2) million and ~~$5.7~~$10.6 million, respectively.

Net cash used in operations for the ~~three~~six months ended ~~March 31,~~June 30, 2022 reflects a net loss of ~~$12.3~~$37.3 million, which includes non-cash depreciation and amortization of ~~$26.7~~$58.4 million and net ~~gains~~losses on asset dispositions of ~~$0.2~~$1.1 million. Combined changes in operating assets and liabilities used ~~$13.4~~$41.1 million in cash, and cash paid for deferred drydock and survey costs was ~~$12.6~~$31.1 million.

Net cash provided by operations for the ~~three~~six months ended ~~March 31,~~June 30, 2021 reflects a net loss of ~~$35.5~~$65.2 million, which includes non-cash depreciation and amortization of ~~$29.7~~$58.3 million and net losses on asset dispositions of ~~$1.9~~$2.9 million. Combined changes in operating assets and liabilities and in amounts due to/from affiliate provided ~~$9.9~~$17.0 million in cash, and cash paid for deferred drydock and survey costs was ~~$2.7~~$6.8 million.

Net cash provided by (used in) investing activities for the ~~three~~six months ended ~~March 31,~~June 30, 2022 and 2021, was ~~$2.4~~$(26.7) million and ~~$9.8~~$27.7 million, respectively.

Net cash ~~provided by~~used in investing activities for the ~~three~~six months ended ~~March 31,~~June 30, 2022 reflects the payments of $29.5 million for the acquisitions of SPO and a 51% equity interest in Sonatide and the receipt of ~~$4.6~~$8.2 million primarily related to the sale of ~~five~~nine vessels. Additions to properties and equipment were comprised of approximately ~~$0.6~~$3.8 million in capitalized upgrades to existing vessels and equipment and ~~$0.6~~$1.6 million for other property and Information Technology equipment purchases and development work. ~~We also purchased the 51% equity interest in Sonatide for $1.0 million, net of cash acquired.~~

Net cash used in financing activities for the ~~three~~six months ended ~~March 31,~~June 30, 2022 and 2021 was ~~$1.3~~$2.5 million and ~~$27.3~~$39.6 million, respectively.

Net cash used in financing activities for the ~~three~~six months ended ~~March 31,~~June 30, 2022 included $0.3 million of debt issuance costs and ~~$1.0~~$2.2 million in taxes paid on share-based awards.

Net cash used in financing activities for the ~~three~~six months ended ~~March 31,~~June 30, 2021 included $11.8 million of repurchases of the Secured Notes in open market transactions, ~~$14.6~~$26.1 million of scheduled semiannual principal payments and prepayments on Troms offshore debt and ~~$0.7~~$0.9 million of debt modification costs.

We did not have any material changes in our contractual obligations and commercial commitments since the end of fiscal year 2021. Refer to Part II, Item 7 in our Annual Report on Form 10-K for the year ended December 31, 2021, for information regarding our contractual obligations and other contingent commitments.

Our Annual Report on Form 10-K for the year ended December 31, 2021, filed with the SEC on March 9, 2022, 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, 2021, regarding these critical accounting policies.

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

There were no material changes in the quarter ended ~~March 31,~~June 30, 2022 to the market risk disclosures contained in Item 7A in our Annual Report on Form 10-K for the year ended December 31, 2021.

Disclosure controls and procedures are designed with the objective of ensuring that all information required to be disclosed in our reports filed under the Securities Exchange Act of 1934, as amended (Exchange Act), such as this Quarterly Report on Form 10-Q, is recorded, processed, summarized and reported, within the time periods specified in the SEC rules and forms. Disclosure controls and procedures include, without limitation, controls and procedures designed to ensure that information required to be disclosed by an issuer in the reports that it files or submits under the Exchange Act is accumulated and communicated to the issuer's management, including its principal executive officer and principal financial officer, or persons performing similar functions, as appropriate to allow timely decisions regarding required disclosure. However, any control system, no matter how well conceived and followed, can provide only reasonable, and not absolute, assurance that the objectives of the control system are met.

We evaluated, under the supervision and with the participation of our management, including our Chief Executive Officer and Chief Financial Officer, the effectiveness of the design and operation of our disclosure controls and procedures (as defined in Rule 13a-15(e) and 15d-15(e) under the Exchange Act), as of the end of the period covered by this Quarterly Report on Form 10-Q. Based on that evaluation, our Chief Executive Officer and Chief Financial Officer concluded that our disclosure controls and procedures were effective as of ~~March 31,~~June 30, 2022.

As discussed in Note 3 to our Consolidated Financial Statements herein, we completed the acquisition of SPO on April 22, 2022. We are in the process of assessing the internal controls of SPO as part of the post-close integration process but have excluded SPO from our assessment of internal control over financial reporting as of June 30, 2022. The total assets and revenues excluded from management's assessment represent 25% and 16%, respectively, of the total assets and revenues in the related consolidated financial statements as of June 30, 2022 and for the six months ended June 30, 2022.

On April 22, 2022, we completed the acquisition of SPO. Management has considered this transaction material to the results of operations, cash flows and financial position from the date of acquisition through June 30, 2022 and believes that the internal controls and procedures of the acquisition have a material effect on internal control over financial reporting. We are currently in the process of incorporating the internal controls and procedures of SPO into the internal control over financial reporting for our assessment of and report on internal control over financial reporting for December 31, 2023.

There has been no change in our internal control over financial reporting that occurred during the quarter ended ~~March 31,~~June 30, 2022, that has materially affected, or is reasonably likely to materially affect, our internal control over financial reporting.

Various legal proceedings and claims are outstanding which arose in the ordinary course of business. In the opinion of management, the amount of ultimate liability, if any, with respect to these actions, will not have a material adverse effect on our financial position, results of operations, or cash flows. Information related to various commitments and contingencies, including legal proceedings, is disclosed in Note ~~(10)~~11 of Notes to the Unaudited Condensed Consolidated Financial Statements included in Part I, Item 1 of this Quarterly Report on Form 10-Q.

The significant factors known to us that could materially adversely affect our business, financial condition, or operating results are described in Item 2 of Part I of this Quarterly Report on Form 10-Q, in Item 1A of Part I of our Annual Report on Form 10-K for the year ended December 31, 2021, filed with the SEC on March 9, 2022, and in the Current Report on Form ~~8-k,~~8-K, filed with the SEC on April 26, 2022.

Pursuant to the requirements of the Securities Exchange Act of 1934, the Registrant has duly caused this report to be signed on its behalf by the undersigned thereunto duly authorized

(In Thousands)

Assets
Cash	$	33,152
Trade and other receivables		64,621
Marine operating supplies		5,122
Assets held for sale		2,500
Prepaid expenses and other current assets		5,232
Net properties and equipment		179,707
Indemnification assets (A)		32,279
Other assets		1,153
Total assets		323,766

Liabilities
Accounts payable		1,594
Accrued expenses		54,924
Other current liabilities		26,856
Other liabilities		16,886
Total liabilities		100,260

Net assets acquired		223,506

(In Thousands)
				Period from
	Year ended			January 1, 2022
	December 31, 2021			to June 30, 2022

Revenues	$	578,506		$	336,275

Net loss		(143,509	)		(38,808	)

	Trade		Due			Trade		Due
(In Thousands)	and Other		from			and Other		from
	Receivables		Affiliates			Receivables		Affiliates
Balance at January 1, 2022	$	1,948	$	72,456		$	1,948	$	72,456
Current period provision for expected credit losses		39		0			340		0
Acquisition of Sonatide joint venture (see Note 7)		0		(59,678	)
Acquisition of Sonatide joint venture (see Note 8)							0		(59,678	)
Other		0		34			0		(563	)
Balance at March 31, 2022	$	1,987	$	12,812
Balance at June 30, 2022						$	2,288	$	12,215

Total shares outstanding including warrants, restricted stock units and stock options	March 31, 2022		March 31, 2021		June 30, 2022		June 30, 2021
Common shares outstanding		41,716,885		40,731,777		42,029,882		41,000,575
New creditor warrants (strike price $0.001 per common share)		465,398		657,203		395,401		639,354
GulfMark creditor warrants (strike price $0.01 per common share)		429,812		815,575		309,351		669,601
SPO acquisition warrants (strike price $0.001 per common share) (A)						8,100,000		0
Restricted stock units and stock options		1,736,037		1,698,719		1,627,083		1,623,635
Total		44,348,132		43,903,274		52,461,717		43,933,165

(In Thousands)
	March 31, 2022			December 31, 2021			June 30, 2022			December 31, 2021
Senior secured bonds:
8.50% Senior Secured Notes due November 2026 (A) (B)	$	175,000		$	175,000
8.50% Senior Secured Notes due November 2026 (A) (B)							$	175,000		$	175,000
Debt discount and issuance costs		(7,003	)		(7,115	)		(6,721	)		(7,115	)
Total long-term debt	$	167,997		$	167,885		$	168,279		$	167,885

(In Thousands)

Assets
Current assets	$	12,894
Net properties and equipment and other assets		2,908
Total assets		15,802
Liabilities
Current liabilities		283
Other liabilities		2,996
Total liabilities		3,279

Net assets acquired		11,223
Bargain purchase gain	$	1,300

	(A)	As of ~~March 31,~~June 30, 2022 and December 31, 2021 the fair value (Level 2) of the Senior Secured Notes was ~~$184.3~~$178.7 million and $177.6 million, respectively.
	(B)	The ~~$5.0~~$1.2 million restricted cash on the condensed consolidated balance sheet at ~~March 31,~~June 30, 2022, represents the ~~prorata~~pro rata amount due for our next semiannual interest payment obligation.

(In Thousands, except number of vessels)	Three Months Ended												Three Months Ended
	Number of Vessels			March 31, 2022			Number of Vessels			March 31, 2021			Number of Vessels			June 30, 2022			Number of Vessels			June 30, 2021
Beginning balance		18		$	14,421			23		$	34,396			12		$	8,591			20		$	31,214
Additions														1			2,500			0			0
Sales		(5	)		(4,330	)		(3	)		(3,182	)		(4	)		(4,229	)		(5	)		(11,000	)
Transfers		(1	)		(1,500	)		0			0			0			0			(1	)		(3,000	)
Ending balance		12		$	8,591			20		$	31,214			9		$	6,862			14		$	17,214

Exhibit Number		Description

2.1		Joint Prepackaged Chapter 11 Plan of Reorganization of Tidewater Inc. and its Affiliated Debtors dated May 11, 2017 (filed with the Commission as Exhibit A to Exhibit T3E.1 to the company’s application for the qualification of indentures on Form T-3 filed on May 12, 2017, File No. 22-29043).

2.2		Disclosure Statement for Joint Prepackaged Chapter 11 Plan of Reorganization of Tidewater Inc. and its Affiliated Debtors dated May 11, 2017 (filed with the Commission as Exhibit T3E.1 to the company’s application for the qualification of indentures on Form T-3 filed on May 12, 2017, File No. 22-29043).

2.3		Second Amended Joint Prepackaged Chapter 11 Plan of Tidewater Inc. and Its Affiliated Debtors dated July 13, 2017 (filed with the Commission as Exhibit 2.1 to the company’s current report on Form 8-K filed on July 18, 2017, File No. 1-6311).

2.4		Agreement and Plan of Merger by and between Tidewater Inc. and GulfMark Offshore, Inc., dated as of July 15, 2018 (filed with the Commission as Exhibit 2.1 to the company’s current report on Form 8-K filed on July 16, 2018, File No. 1-6311).

2.5+		Share Purchase Agreement, dated as of March 9, 2022, by and among Tidewater Inc., Banyan Overseas Limited and Swire Pacific Offshore Holdings Ltd. (filed with the Commission as Exhibit 2.1 to the company’s current report on Form 8-K filed on March 10, 2022, File No. 1-6311).

2.6*		Closing Agreement and Amendment to Share Purchase Agreement, dated April 22, 2022, by and among Tidewater Inc., Banyan Overseas Limited and Swire Pacific Offshore Holdings Ltd.

2.7*		Second Amendment to Share Purchase Agreement, dated as of June 27, 2022, by and among Tidewater Inc., Banyan Overseas Limited and Swire Pacific Offshore Holdings Ltd.

3.1		Amended and Restated Certificate of Incorporation of Tidewater Inc. dated July 31, 2017 (filed with the Commission as Exhibit 3.1 to the company’s current report on Form 8-K filed on July 31, 2017, File No. 1-6311).

3.2		Second Amended and Restated By-Laws of Tidewater Inc. dated November 15, 2018 (filed with the Commission as Exhibit 3.2 to the company’s registration statement on Form 8-A filed on November 15, 2018, File No. 1-6311).

3.3		Certificate of Designation of Series A Junior Participating Preferred Stock of Tidewater Inc. (filed with the Commission as Exhibit 3.1 to the company’s current report on Form 8-K filed on April 14, 2020, File No. 1-6311).

4.1		Bond Terms for 8.5% Senior Secured Notes due 2026, dated November 16, 2021, by and among Tidewater Inc. and Nordic Trustee AS, as Bond Trustee and Security Agent (filed with the Commission as Exhibit 4.1 to the company’s current report on Form 8-K on November 17, 2021, File No. 1-6311).

4.2		Credit Facility Agreement, dated November 16, 2021, by and among Tidewater Inc., DNB Bank ASA, New York Branch, as Facility Agent, Nordic Trustee AS, as Security Trustee, DNB Markets, Inc. as Bookrunner and Mandated Lead Arranger, and the lenders party thereto (filed with the Commission as Exhibit 4.2 to the company’s current report on Form 8-K on November 17, 2021, File No. 1-6311).

4.3		Intercreditor Agreement, dated November 16, 2021, by and among Tidewater Inc., certain subsidiaries thereof, DNB Bank ASA, New York Branch, as Facility Agent, Nordic Trustee AS, as Security Trustee, and certain other institutions (filed with the Commission as Exhibit 4.3 to the company’s current report on Form 8-K on November 17, 2021, File No. 1-6311).

4.4		Guarantee Agreement, dated November 16, 2021, among Tidewater Inc., Nordic Trustee AS as Security Agent, and the original guarantors named therein (filed with the Commission as Exhibit 4.4 to the company’s current report on Form 8-K on November 17, 2021, File No. 1-6311).

~~10.1~~Exhibit Number		Description
10.1		Restructuring Support Agreement, dated May 11, 2017 (filed with the Commission as Schedule 1 to Exhibit A to Exhibit T3E.1 to the company’s application for the qualification of indentures on Form T-3 filed on May 12, 2017, File No. 22-29043).

10.2		Creditor Warrant Agreement between Tidewater Inc., as Issuer and Computershare Inc. and Computershare Trust Company, N.A., collectively as Warrant Agent dated July 31, 2017 (filed with the Commission as Exhibit 10.1 to the company’s current report on Form 8-K filed on July 31, 2017, File No. 1-6311).

~~Exhibit~~ ~~Number~~		~~Description~~
10.3		Existing Equity Warrant Agreement between Tidewater Inc., as Issuer and Computershare Inc. and Computershare Trust Company, N.A., collectively as Warrant Agent dated July 31, 2017 (filed with the Commission as Exhibit 10.2 to the company’s current report on Form 8-K filed on July 31, 2017, File No. 1- 6311).

10.4		Equity Warrant Agreement, dated as of November 14, 2017, between GulfMark Offshore, Inc. and American Stock Transfer & Trust Company, LLC, as warrant agent (filed with the Commission as Exhibit 4.1 to the company’s registration statement on Form 8-A filed on November 15, 2018, File No. 1-6311).

10.5		Assignment, Assumption and Amendment Agreement, dated as of and effective November 15, 2018, by and among GulfMark Offshore, Inc., Tidewater Inc. and American Stock Transfer & Trust Company, LLC, as warrant agent (filed with the Commission as Exhibit 4.2 to the company’s registration statement on Form 8-A filed on November 15, 2018, File No. 1-6311).

10.6		Noteholder Warrant Agreement, dated as of November 14, 2017, between GulfMark Offshore, Inc. and American Stock Transfer & Trust Company, LLC, as warrant agent (filed with the Commission as Exhibit 4.1 to the company's current report on Form 8-K filed on November 16, 2018, File No. 1-6311).

10.7		Assignment, Assumption and Amendment Agreement – Jones Act Warrants, dated as of and effective November 15, 2018, by and among GulfMark Offshore, Inc., Tidewater Inc. and American Stock Transfer & Trust Company, LLC, as warrant agent (filed with the Commission as Exhibit 4.2 to the company’s current report on Form 8-K filed on November 16, 2018, File No. 1-6311).

10.8		Registration Rights Agreement, dated as of April 22, 2022, by and among Tidewater Inc. and Banyan Overseas Limited (filed with the Commission as Exhibit 10.1 to the company’s current report on Form 8-K filed on April 26, 2022, File No. 1-6311).

10.9*		First Amendment to Registration Rights Agreement, by and between Tidewater Inc. and Banyan Overseas Limited, dated as of June 27, 2022.

10.10		Warrant Agreement, dated as of April 22, 2022, by and among Tidewater Inc. and American Stock Transfer & Trust Company, LLC (filed with the Commission as Exhibit 10.2 to the company’s current report on Form 8-K filed on April 26, 2022, File No. 1-6311).

10.11		Transitional Trademark License Agreement, dated as of April 22, 2022, by and among Tidewater Inc. and Swire Pacific Limited (filed with the Commission as Exhibit 10.3 to the company’s current report on Form 8-K filed on April 26, 2022, File No. 1-6311).

10.12		Transition Services Agreement, dated as of April 22, 2022, by and among Tidewater Inc. and Banyan Overseas Limited (filed with the Commission as Exhibit 10.4 to the company’s current report on Form 8-K filed on April 26, 2022, File No. 1-6311).

31.1*		Certification of the Chief Executive Officer pursuant to Rule 13a-14(a) or 15d-14(a) of the Securities Exchange Act of 1934, as adopted pursuant to Section 302 of the Sarbanes-Oxley Act of 2002.

31.2*		Certification of the Chief Financial Officer pursuant to Rule 13a-14(a) or 15d-14(a) of the Securities Exchange Act of 1934, as adopted pursuant to Section 302 of the Sarbanes-Oxley Act of 2002.


32.1**		Certification of the Chief Executive Officer pursuant to 18 U.S.C. Section 1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002.

32.2**		Certification of the Chief Financial Officer pursuant to 18 U.S.C. Section 1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002.

101.INS*		Inline XBRL Instance Document - The instance document does not appear in the interactive data file because its XBRL tags are embedded within the Inline XBRL document.

101.SCH*		Inline XBRL Taxonomy Extension Schema.

101.CAL*		Inline XBRL Taxonomy Extension Calculation Linkbase.

101.DEF*		Inline XBRL Taxonomy Extension Definition Linkbase.

101.LAB*		Inline XBRL Taxonomy Extension Label Linkbase.

101.PRE*		Inline XBRL Taxonomy Extension Presentation Linkbase.

104		Cover Page Interactive Data File (formatted as Inline XBRL and contained in Exhibit 101).

**	Furnished with this quarterly report on Form 10-Q.

+	Schedules and similar attachments have been omitted pursuant to Item 601(a)(5) of Regulation S-K. Tidewater agrees to furnish a supplemental copy of any omitted schedule or attachment to the SEC upon request.

	TIDEWATER INC.
	(Registrant)

Date: ~~May 9,~~August 4, 2022	/s/ Samuel R. Rubio
	Samuel R. Rubio
	Executive Vice President and Chief Financial Officer
	(Principal Financial and Accounting Officer and authorized signatory)