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 ~~September~~June 30, ~~2021~~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.)

~~6002 Rogerdale Road,~~842 West Sam Houston Parkway North, Suite ~~600~~400

Houston, Texas ~~77072~~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
~~Preferred stock purchase rights~~	~~N/A~~	~~New York Stock Exchange~~

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 ☐

~~41,279,272~~42,065,813 shares of Tidewater Inc. common stock $0.001 par value per share were outstanding on ~~October~~July 31, ~~2021.~~2022.

~~Table of Contents~~

	September 30, 2021			December 31, 2020			June 30, 2022			December 31, 2021
ASSETS
Current assets:
Cash and cash equivalents	$	127,414		$	149,933		$	87,981		$	149,037
Restricted cash		24,092			2,079			1,240			1,240
Trade and other receivables, less allowance for credit losses of $2,134 and $1,516 at September 30, 2021 and December 31, 2020, respectively		86,015			112,623
Due from affiliates, less allowance for credit losses of $70,638 and $71,800 at September 30, 2021 and December 31, 2020, respectively		68,217			62,050
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		13,335			15,876			21,182			12,606
Assets held for sale		17,891			34,396			6,862			14,421
Prepaid expenses and other current assets		13,129			11,692			23,259			8,731
Total current assets		350,093			388,649			329,783			342,672
Net properties and equipment		709,324			780,318			838,612			688,040
Deferred drydocking and survey costs		40,510			56,468			53,661			40,734
Indemnification assets								30,269			0
Other assets		23,146			25,742			30,410			24,334
Total assets	$	1,123,073		$	1,251,177		$	1,282,735		$	1,095,780

LIABILITIES AND EQUITY
Current liabilities:
Accounts payable	$	18,042		$	16,981		$	30,537		$	20,788
Accrued expenses		52,133			52,422			109,212			51,734
Due to affiliates		59,571			53,194			0			61,555
Current portion of long-term debt		140,995			27,797
Other current liabilities		29,139			32,785			47,872			23,865
Total current liabilities		299,880			183,179			187,621			157,942
Long-term debt		14,139			164,934			168,279			167,885
Other liabilities		74,442			79,792			85,188			68,184

Commitments and contingencies

Equity:
Common stock of $0.001 par value, 125,000,000 shares authorized, 41,277,377 and 40,704,984 shares issued and outstanding at September 30, 2021 and December 31, 2020, respectively		41			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		1,375,215			1,371,809			1,554,561			1,376,494
Accumulated deficit		(639,966	)		(548,931	)		(715,649	)		(677,900	)
Accumulated other comprehensive loss		(1,289	)		(804	)		1,763			2,668
Total stockholders’ equity		734,001			822,115			840,717			701,303
Noncontrolling interests		611			1,157			930			466
Total equity		734,612			823,272			841,647			701,769
Total liabilities and equity	$	1,123,073		$	1,251,177		$	1,282,735		$	1,095,780

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

	Three Months Ended						Nine Months Ended						Three Months Ended						Six Months Ended
	September 30, 2021			September 30, 2020			September 30, 2021			September 30, 2020			June 30, 2022			June 30, 2021			June 30, 2022			June 30, 2021
Revenues:
Vessel revenues	$	91,634		$	85,395		$	261,141		$	298,344		$	162,175		$	88,514		$	266,051		$	169,507
Other operating revenues		767			1,072			4,717			6,835			1,272			1,439			3,125			3,950
		92,401			86,467			265,858			305,179
Total revenue														163,447			89,953			269,176			173,457
Costs and expenses:
Vessel operating costs		65,344			61,784			190,627			205,383			100,257			64,263			168,768			125,283
Costs of other operating revenues		355			219			2,003			3,063			483			581			844			1,648
General and administrative		18,045			17,438			50,875			56,455			27,804			16,787			46,021			32,830
Depreciation and amortization		27,980			30,777			86,256			86,028			31,766			28,549			58,423			58,276
Long-lived asset impairments		2,167			1,945			2,167			67,634
Affiliate credit loss impairment expense (credit)		0			0			(1,000	)		53,581
Affiliate guarantee obligation		0			0			0			2,000
(Gain) loss on asset dispositions, net		74			(520	)		2,954			(7,511	)
		113,965			111,643			333,882			466,633
Operating loss		(21,564	)		(25,176	)		(68,024	)		(161,454	)
Long-lived asset impairment credit														0			0			(500	)		0
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														161,607			110,112			274,646			219,917
Operating income (loss)														1,840			(20,159	)		(5,470	)		(46,460	)
Other income (expense):
Foreign exchange loss		(523	)		(1,153	)		(951	)		(2,365	)
Foreign exchange gain (loss)														(1,881	)		422			(935	)		(428	)
Equity in net earnings (losses) of unconsolidated companies		100			0			(1,697	)		0			(244	)		52			(244	)		(1,797	)
Dividend income from unconsolidated company		0			0			0			17,150
Interest income and other, net		148			272			179			1,084			349			8			3,835			31
Loss on warrants														(14,175	)		0			(14,175	)		0
Interest and other debt costs, net		(3,681	)		(6,071	)		(12,166	)		(18,172	)		(4,284	)		(3,944	)		(8,459	)		(8,485	)
		(3,956	)		(6,952	)		(14,635	)		(2,303	)
Total other expense														(20,235	)		(3,462	)		(19,978	)		(10,679	)
Loss before income taxes		(25,520	)		(32,128	)		(82,659	)		(163,757	)		(18,395	)		(23,621	)		(25,448	)		(57,139	)
Income tax expense		887			5,953			8,922			3,512			6,619			6,026			11,837			8,035
Net loss	$	(26,407	)	$	(38,081	)	$	(91,581	)	$	(167,269	)	$	(25,014	)	$	(29,647	)	$	(37,285	)	$	(65,174	)
Net loss attributable to noncontrolling interests		(149	)		(154	)		(546	)		(274	)
Net income (loss) attributable to noncontrolling interests														567			(185	)		464			(397	)
Net loss attributable to Tidewater Inc.	$	(26,258	)	$	(37,927	)	$	(91,035	)	$	(166,995	)	$	(25,581	)	$	(29,462	)	$	(37,749	)	$	(64,777	)
Basic loss per common share	$	(0.64	)	$	(0.94	)	$	(2.22	)	$	(4.15	)	$	(0.61	)	$	(0.72	)	$	(0.91	)	$	(1.59	)
Diluted loss per common share	$	(0.64	)	$	(0.94	)	$	(2.22	)	$	(4.15	)	$	(0.61	)	$	(0.72	)	$	(0.91	)	$	(1.59	)
Weighted average common shares outstanding		41,132			40,405			40,918			40,271			41,814			40,899			41,614			40,808
Adjusted weighted average common shares		41,132			40,405			40,918			40,271			41,814			40,899			41,614			40,808

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

	Nine Months			Nine Months			Six Months			Six Months
	Ended			Ended			Ended			Ended
	September 30, 2021			September 30, 2020			June 30, 2022			June 30, 2021
Operating activities:
Net loss	$	(91,581	)	$	(167,269	)	$	(37,285	)	$	(65,174	)
Adjustments to reconcile net loss to net cash provided by (used in) operating activities:
Depreciation and amortization		54,605			53,614			40,287			36,694
Amortization of deferred drydocking and survey costs		31,651			32,414			18,136			21,582
Amortization of debt premium and discounts		2,662			2,418			765			1,986
Provision for deferred income taxes		167			107			145			648
(Gain) loss on asset dispositions, net		2,954			(7,511	)
Loss on asset dispositions, net								1,090			2,880
Gain on bargain purchase								(1,300	)		0
Loss on debt extinguishment		59			0			0			59
Affiliate credit loss impairment expense (credit)		(1,000	)		53,581
Affiliate guarantee obligation		0			2,000
Long-lived asset impairments		2,167			67,634
Affiliate credit loss impairment credit								0			(1,000	)
Long-lived asset impairment credit								(500	)		0
Loss on warrants								14,175			0
Stock-based compensation expense		4,199			3,959			3,421			2,676
Changes in assets and liabilities, net:
Changes in assets and liabilities, net of effects of business acquisition:
Trade and other receivables		26,608			9,434			(35,085	)		22,394
Changes in due to/from affiliates, net		1,210			9,852			(20	)		4,693
Accounts payable		1,061			(14,548	)		8,072			(792	)
Accrued expenses		(473	)		(18,189	)		2,354			(2,074	)
Deferred drydocking and survey costs		(17,388	)		(29,499	)		(31,063	)		(6,771	)
Other, net		(8,833	)		3,809			(16,419	)		(7,234	)
Net cash provided by operating activities		8,068			1,806
Net cash provided by (used in) operating activities								(33,227	)		10,567
Cash flows from investing activities:
Proceeds from asset dispositions		33,956			31,498			8,163			29,560
Acquisitions, net of cash acquired								(29,525	)		0
Additions to properties and equipment		(2,583	)		(4,682	)		(5,380	)		(1,861	)
Net cash provided by investing activities		31,373			26,816
Net cash provided by (used in) investing activities								(26,742	)		27,699
Cash flows from financing activities:
Principal payments on long-term debt		(39,259	)		(33,520	)		0			(37,901	)
Debt modification costs		(855	)		0
Debt issuance and modification costs								(371	)		(855	)
Debt extinguishment premium		(59	)		0			0			(59	)
Tax on share-based awards		(793	)		(702	)		(2,176	)		(758	)
Net cash used in financing activities		(40,966	)		(34,222	)		(2,547	)		(39,573	)
Net change in cash, cash equivalents and restricted cash		(1,525	)		(5,600	)		(62,516	)		(1,307	)
Cash, cash equivalents and restricted cash at beginning of period		155,225			227,608			154,276			155,225
Cash, cash equivalents and restricted cash at end of period	$	153,700		$	222,008		$	91,760		$	153,918

Supplemental disclosure of cash flow information:
Cash paid during the period for:
Interest, net of amounts capitalized	$	10,083		$	16,169		$	7,626		$	7,028
Income taxes	$	14,735		$	9,940		$	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.

Nine Months Ended

Accumulated

Additional

other

Non

Common

paid-in

Accumulated

comprehensive

controlling

stock

capital

deficit

income (loss)

interest

Total

Balance at December 31, 2020
$ 41 $ 1,371,809 $ (548,931 ) $ (804 ) $ 1,157 $ 823,272
Total comprehensive loss
0 0 (91,035 ) (485 ) (546 ) (92,066 )
Amortization of share-based awards
0 3,406 0 0 0 3,406
Balance at September 30, 2021
$ 41 $ 1,375,215 $ (639,966 ) $ (1,289 ) $ 611 $ 734,612

Balance at December 31, 2019
$ 40 $ 1,367,521 $ (352,526 ) $ (236 ) $ 1,611 $ 1,016,410
Total comprehensive income (loss)
0 0 (166,995 ) 1,342 (274 ) (165,927 )
Adoption of credit loss accounting standard
0 0 (163 ) 0 0 (163 )
Amortization of share-based awards
0 3,257 0 0 0 3,257
Balance at September 30, 2020
$ 40 $ 1,370,778 $ (519,684 ) $ 1,106 $ 1,337 $ 853,577

	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, ~~2020~~2021, filed with the SEC on March ~~4, 2021,~~ ~~as amended on~~ ~~April 30, 2021.~~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 ~~July~~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. ~~Although we are presently evaluating the effect of the~~We adopted this standard ~~we do~~on January 1, 2022 and it did not ~~expect its adoption to~~ 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. ~~Although we are presently evaluating the effect of the standard, we do~~ ~~not~~ ~~expect its adoption to have a material impact on our consolidated financial statements and related disclosures.~~

In ~~December 2019,~~ ~~the FASB issued ASU~~ ~~2019~~-~~12,~~ ~~Simplifying the Accounting for Income Taxes, which simplifies the accounting for income taxes by removing certain exceptions to the general principles in Topic~~ ~~740~~ ~~and clarifying and amending existing guidance. The guidance is effective for annual and interim periods beginning after~~ ~~December 15, 2020~~ ~~with early adoption permitted.~~ We adopted this standard on January 1, ~~2021~~2022 and it did not have a material impact on our consolidated financial statements and related disclosures.

In ~~August 2018~~ ~~the FASB issued ASU~~ ~~2018~~-~~14,~~ Compensation – Retirement Benefits – Defined Benefit Plans – General, which modifies the disclosure requirements for employers that sponsor defined benefit plans or other postretirement plans. This ASU removes certain disclosures that are no longer considered cost beneficial, clarifies the specific requirements of certain other disclosures, and adds disclosure requirements identified as relevant. The guidance is effective for annual and interim periods beginning after ~~December 15, 2020~~ ~~with early adoption permitted. We adopted this standard on~~ ~~January 1, 2021~~ ~~and it did~~ ~~not~~ ~~have a material impact on our 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 ~~nine~~six months ended ~~September~~June 30, ~~2021~~2022 is as follows:

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

At ~~September~~June 30, ~~2021~~2022, we had ~~$0.9~~$2.7 million and ~~$4.1~~$3.3 million of deferred mobilization costs included within prepaid expenses and other current assets and other assets, respectively.

At ~~September~~June 30, ~~2021~~2022, we have ~~$0.7~~$1.6 million of deferred mobilization revenue, included within accrued expenses, related to unsatisfied performance obligations which will be recognized during the remainder of ~~2021~~2022 and ~~2022~~2023.

The changes in accumulated other comprehensive income (loss) (OCI) by component, net of tax, for the three and ~~nine~~six months ended ~~September~~June 30, ~~2021~~2022 and ~~2020~~2021 are as follows:

We had ~~2,648,775 and 2,488,752~~outstanding common shares, incremental "in-the-money" warrants, restricted stock units and stock options at ~~September~~June 30, ~~2021~~2022 and ~~2020~~2021, respectively, ~~which are~~ as follows:

We also had “out-of-the-money” warrants outstanding exercisable for 5,923,399 shares of ~~“out-of-the-money” warrants outstanding~~common stock at both ~~September~~June 30, ~~2021~~2022 and ~~2020~~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,~~$57.06,$62.28, and ~~$100.00, respectively.~~$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 ~~nine~~six months ended ~~September~~June 30, ~~2021~~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 a foreign ~~joint venture,~~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, ~~2020~~2021, our balance sheet reflected approximately ~~$137.0~~$202.8 million of net deferred tax assets prior to a valuation allowance analysis, with a valuation allowance of ~~$140.4~~$204.9 million. As of ~~September~~June 30, ~~2021~~2022, we had net deferred tax assets of approximately ~~$162.1~~$258.6 million prior to a valuation allowance analysis of ~~$165.7~~$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 ~~2014.~~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.

~~Amounts due from~~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 Sonatide ~~represent cash received~~owned by ~~Sonatide from customers~~Sonangol, pursuant to a Sale and ~~due to~~Purchase Agreement between Sonangol and us ~~amounts due from customers that are expected to be remitted to~~for $11.2 million in cash. This acquisition gives us ~~by Sonatide and costs incurred by us on behalf~~complete control of ~~Sonatide. The following table displays the activity~~our operations in ~~the due from affiliate account related to Sonatide for the period indicated:~~Angola.

The ~~amounts due from~~ acquisition date was January 3, 2022 (Sonatide ~~are denominated in U.S. dollars; however,~~Merger Date). However, we used a convenience date of January 1, 2022 for the ~~underlying~~ ~~third~~~~-party customer payments to Sonatide were satisfied, in part, in Angolan kwanzas. In late~~ ~~2019,~~ ~~we were informed that, as part of a broad privatization program, Sonangol, our partner in Sonatide, intends to seek to divest itself~~acquisition and have recorded activity from the ~~Sonatide joint venture.~~

Inbeginning of the ~~second~~first quarter of ~~2020,~~2022. Revenues of Sonatide ~~declared a $35.0 million dividend. On~~ ~~September 22, 2020,~~ ~~Sonangol received $17.8~~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 six months ended June 30, 2022, respectively.

The acquisition date fair value of the 49% equity interest in Sonatide held by us was zero and we ~~received $17.2 million. All~~did not recognize a significant gain or loss as a result of remeasuring to the fair value of our ~~share~~equity interest.

Assets acquired and liabilities assumed in the business combination have been recorded at their estimated fair values as of the ~~dividend~~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 ~~reflected as dividend income from unconsolidated company~~included in ~~the~~our consolidated statement of operations ~~because (i) our investment in the Sonatide joint venture had previously been written down to zero, (ii) the distributions are~~ ~~not~~ ~~refundable and (iii) we are~~ ~~not~~ ~~liable~~ for the obligations of or committed to provide financial support to the Sonatide joint venture. In addition, as a result of the aforementioned dividend payment, the cash balances of the joint venture were significantly reduced and we determined that, as a result, a significant portion of our net due from Sonatide balance was compromised. During the ~~nine~~six months ended ~~September~~June 30, ~~2020,~~2022 ~~we recorded a $41.5 million credit loss impairment expense.~~

~~After offsetting~~under the ~~amounts due~~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 ~~Sonatide,~~our consolidated results of operations for the ~~net amount due from Sonatide at~~year and ~~September 30, 2021~~ ~~was approximately $8.6 million. Sonatide had approximately $11.2 million of cash on hand at~~ ~~September 30, 2021~~ plus approximately $9.5 million of net trade accounts receivable to satisfy the net due from Sonatide. Given prior discussions with our partner regarding how the net losses from the devaluation of certain Angolan kwanza denominated accounts should be shared, we continue to evaluate our net due from Sonatide balance for possible additional changes in future periods based in part on available liquidity held by Sonatide. In the ~~nine~~six months ended ~~September~~December 31, 2021 and June 30, ~~2021,~~2022, ~~we recorded a $1.0 million credit to the credit loss impairment account.~~respectively.

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 ~~Sonatide~~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.

~~Amounts due to Sonatide represent commissions payable and other costs paid by Sonatide on our behalf. The following table displays the~~DTDW (Nigeria)

In previous years, we had substantial activity in ~~the due to affiliate account related to Sonatide for the period indicated:~~

~~Company~~Nigeria and conducted our business through a joint venture (DTDW). In 2020, we ceased operations in ~~Angola~~

~~Vessel revenues generated by our Angolan operations, percent of consolidated vessel revenues, average number of company owned vessels~~Nigeria, but have continued to maintain and ~~average number of stacked company owned vessels of our Angolan operations for the periods indicated were as follows:~~

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~~ ~~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~~ ~~September 30, 2021~~~~, 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. In the second quarter of ~~2020,~~2022, we ~~recorded an~~entered into a netting arrangement with our partner allowing either partner to discharge their obligations by netting these amounts against sums owed by the other partner. In accordance with this agreement, we have the ability to net our due from affiliate ~~credit loss impairment expense for~~balance against the ~~entire~~due to affiliate balance on our consolidated balance sheet. The net due from ~~DTDW~~ balance equals the net due to balance at June 30, 2022 and, as ofa result, there is a net ~~September 30, 2020~~ zero~~totaling $12.1 million.~~

~~Previously, DTDW had long-term debt of $4.7 million which was secured by the vessel owned by DTDW and guarantees~~ balance in our net due to due from ~~the DTDW partners (in proportion to their ownership interests). On~~ ~~April 22, 2021,~~ ~~we paid approximately $2.0 million, which was fully reserved during~~ ~~2020,~~ ~~that represented~~accounts on our ~~portion of the joint venture debt guarantee and our partner assumed the remaining joint venture debt which represented his portion of the guarantee.~~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 ~~$1.2~~$0.8 million during each of the ~~nine~~six months ended ~~September~~June 30, ~~2021~~2022 and ~~2020~~2021, respectively. We expect to contribute ~~$0.4~~$0.8 million to the supplemental plan during the remainder of ~~2021.~~2022. Our obligations under the supplemental plan were ~~$22.8~~$22.5 million ~~for both~~and $22.7 million at ~~September~~June 30, ~~2021~~2022 and December 31, ~~2020,~~2021, respectively, and are included in “accrued expenses” and “other liabilities” in the consolidated condensed ~~consolidated~~ 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, except for the service~~ cost are included in the caption “Interest income and other, net.” ~~Service cost are included in the caption “Vessel operating costs.”~~

We ~~may~~ from time to time seek to retire or purchase our outstanding debt through cash purchases and/or exchanges for equity securities, in open market purchases, privately negotiated transactions, tender offers, exchange offers, redemptions, ~~one~~ or more additional offers, or otherwise. Such repurchases or exchanges, if any, will depend on prevailing market conditions, our liquidity requirements, contractual restrictions and other factors. The amounts involved ~~may~~ ~~be material.~~

~~An amendment and restatement of the Troms Offshore credit agreement was executed in~~ ~~December 2020~~ ~~whereby the financial covenants were conformed to match the~~ ~~November 2020~~ ~~amendments to the covenants governing the~~also have a Super Senior ~~Secured Notes, and included an obligation to prepay (~~1~~) the amounts deferred in the~~ ~~2017~~ ~~amendment and restatement and (~~2~~) an additional amount that will~~ ~~not~~ ~~exceed $45 million representing a percentage of Senior Secured Notes prepayments. The prepayment associated with this amendment made during the~~ ~~nine~~ ~~months of~~ ~~2021~~ ~~totaled $23.3 million. Additional prepayment obligations of $3.4 million are due in the~~ ~~fourth~~ ~~quarter of~~ ~~2021,~~ ~~and are reflected in current portion of long-term debt on our condensed consolidated balance sheet.~~

~~During the~~ ~~third~~ ~~quarter of~~ ~~2021,~~ ~~we reclassified the Senior Secured Notes to current portion of long-term debt as the notes mature in~~ ~~August 2022.~~ ~~Our current Senior Secured Notes and Troms Offshore borrowings are expected to be redeemed with proceeds from our new Nordic Bond Offering as described below. The funding of the new notes will~~ ~~not~~ ~~take place until after the filing date of this Quarterly Report on Form~~ ~~10Q~~ ~~as noted below.~~

On ~~October 8, 2021,~~ ~~we announced the contemplated private offering of USD $175.0 million in 5-year senior secured bonds in the Nordic bond market, subject to market and other conditions (the Nordic Bond Offering). On~~ ~~October 15, 2021,~~ ~~we announced the completion of pricing and terms of the Nordic Bond Offering. We anticipate that funding of the Nordic Bond Offering will occur~~Revolving Credit Facility Agreement maturing on November 16, ~~2021,~~ ~~subject to customary closing conditions. The bonds will mature in~~ ~~November~~ 2026 and have a coupon rate of 8.5% per annum. The net proceeds from the Nordic Bond Offering will be employed to repay the existing Senior Secured Notes and the Troms Offshore borrowings in full, including contractual make-whole premiums, with any remaining part thereof, appliedthat provides $25.0 million for general ~~corporate~~working capital purposes.

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 15.

As of ~~September~~June 30, ~~2021~~2022, our property and equipment consist primarily of ~~139~~187 active vessels, which excludes the 149 vessels we have classified as held for sale, located around the world. As of December 31, ~~2020,~~2021, our property and equipment consisted primarily of ~~149~~135 active vessels, which excluded 2318 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 ~~nine~~six months ended ~~September~~June 30, ~~2021~~2022 and ~~2020~~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 ~~September~~June 30, ~~2021~~2022 and December 31, ~~2020~~2021:

~~In the~~ ~~fourth~~ ~~quarter of~~ ~~2018,~~ ~~we abandoned the duplicate office facilities in~~ ~~four~~ ~~locations in the USA and Scotland. Activity for the lease exit and severance liabilities which are included in general and administrative expense for the~~ ~~nine~~ ~~months ended~~ ~~September 30, 2021~~ ~~was as follows:~~

~~Activity for the lease exit and severance liabilities for the~~ ~~nine~~ ~~months ended~~ ~~September 30, 2020~~ ~~was as follows:~~

InDuring the ~~fourth~~six ~~quarter of~~months ending ~~2019,~~June 30, 2022, we evaluated our fleet, primarily vessels that had been stacked for an extended period, for vessels to be considered for disposal and identified 46 vessels to be classified as held for sale. Beginning late 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. The pandemic and oil price impact severely affected the oil and gas industry which caused us to re-evaluate the remainder of our stacked vessel fleet and expand our disposal program to include more vessels. In ~~2020,~~we added ~~32 vessels~~1 vessel from the SPO fleet to ~~our~~ assets held for sale, sold 53or recycled 9 of ~~the~~our vessels ~~that were classified as~~ held for sale, and ~~had 23~~re-activated 1 vessel from assets held for sale back into the active fleet, leaving 9 vessels valued at ~~$34.4~~$6.9 million remaining in the held for sale account as of ~~December 31, 2020.~~ ~~During the~~ ~~nine~~ ~~months of~~ ~~2021,~~ ~~we added~~ ~~two~~ ~~vessels to assets held for sale, sold~~ ~~nine~~ ~~of our vessels held for sale, and re-activated~~ ~~two~~ ~~vessels from assets held for sale back into the active fleet, leaving 14 vessels, valued at $17.9 million, remaining in the held for sale account as of~~ ~~September~~June 30, ~~2021~~2022. In addition, we sold 100 vessels from our active fleet in the ~~nine~~six month period ofending ~~2021~~June 30, 2022. We sold 8 vessels from assets held for sale and ~~three~~5 vessels from our active fleet in the ~~nine~~six month period ofending ~~2020.~~June 30, 2021. The total vessel and other sales for the six month period ending June 30, 2022 contributed approximately $8.2 million in proceeds and we recognized a net $1.1 million loss on the dispositions. The vessel and other sales for the six month period ending June 30, 2021 contributed $29.4 million in proceeds and we recognized a $2.9 million net loss on the dispositions. One of the ~~active~~ vessel sales in the second quarter of 2021, was to a third-party operator, ~~which has a person in senior management who~~whose Chief Operating Officer, Matthew Rigdon, is ~~an immediate family member~~the son of ~~a Director.~~Larry Rigdon, the chairman of our Board of Directors. This vessel was sold for proceeds of $11.4 million, all of which ~~has been~~was collected in the second quarter of 2021, and we recognized a gain of $4.3 million on the sale. ~~The total vessel and other sales for the~~ ~~nine~~ ~~months of~~ ~~2021~~ ~~contributed approximately $34.0 million in proceeds and we incurred a net $3.0 million loss on the dispositions. The vessel and other sales for the~~ ~~nine~~ ~~months of~~ ~~2020~~ ~~contributed $31.5 million in proceeds and we recognized a $7.5 million net gain on the dispositions.~~

~~During the~~ ~~nine~~ ~~months ended~~ ~~September 30, 2021~~ ~~and~~ ~~2020,~~ ~~we recorded $1.9 million and $65.7 million, respectively, in impairment related to assets held for 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 ~~determined~~estimate the ~~fair~~net realizable value of ~~the vessels~~our assets held for sale using various methodologies including ~~two~~third ~~methodologies depending on~~party appraisals, sales comparisons, sales agreements and scrap yard tonnage prices. Estimates generally fall in ranges rather than exact numbers due to the ~~vessel~~nature of sales of offshore vessels and industry conditions. Our value ranges depend on our ~~planned method~~expectation of ~~disposition.~~the ultimate disposition of the vessel. We ~~designated~~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 ~~valued those vessels using recycling yard pricing schedules based on dollars per ton.~~effort required to achieve a sale and the costs incurred to maintain a vessel while a searching for a buyer. We ~~generally~~establish ranges that in many cases have scrap value ~~vessels that will be sold rather than recycled~~as the low end of the range and an expected open market sale value at the ~~midpoint~~top of ~~a value~~the range. When there is no expectation within the range ~~based on sales agreements or using comparative sales in the marketplace. Subsequent~~that is considered more likely than any other, we apply equal probability weighting to the ~~original~~low and high ends of the valuation ~~we revalue individual assets held for sale if we determine that the ultimate disposition price will be below the value range used in the original estimate.~~range. In addition, in conjunction with the reactivation of a vessel from assets held for sale to the active fleet in the ~~third~~first quarter of ~~2021~~2022 and the concurrent valuation of such vessel at its fair value, we recaptured ~~$1.7~~$0.5 million of impairment charged to ~~expense in the~~ ~~second~~ ~~quarter of~~ ~~2020.~~expense. We do not separate our asset impairment expense by segment because of the significant movement of our assets between segments. During the six months ended 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:

~~We evaluated our inventory as of~~ ~~September 30, 2021~~ ~~and~~ ~~2020,~~ ~~and charged $1.9 million for each period to impairment expense for obsolete marine service and vessel supplies and parts inventory. We considered this valuation approach to be a Level~~ 3 ~~fair value measurement due to the level of estimation involved in valuing obsolete inventory.~~

~~In early~~ ~~2020,~~ ~~it became evident that a novel coronavirus originating in Asia (COVID-~~19~~) could become a pandemic with worldwide reach. By mid-~~ ~~March,~~ ~~when the World Health Organization declared the outbreak to be a pandemic (the COVID-~~19 ~~pandemic), much of the industrialized world had initiated severe measures to lessen its impact. The ongoing COVID-~~19 ~~pandemic created significant volatility, uncertainty, and economic disruption beginning in the~~ ~~first~~ ~~quarter of~~ ~~2020.~~ ~~With respect to our particular sector, the COVID-~~19 pandemic resulted in a much lower demand for oil as national, regional, and local governments imposed travel restrictions, border closings, restrictions on public gatherings, stay at home orders, and limitations on business operations in order to contain its spread. During this same time period, oil-producing countries struggled to reach consensus on worldwide production levels, resulting in both a market oversupply of oil and a precipitous fall in oil prices. Combined, these conditions adversely affected our operations and business beginning in the latter part of the ~~first~~ ~~quarter of~~ ~~2020~~ ~~and continuing throughout the remainder of~~ ~~2020~~ ~~and through the~~ ~~first~~~~nine~~ ~~months of~~ ~~2021.~~ The reduction in demand for hydrocarbons together with an unprecedented decline in the price of oil has resulted in our primary customers, the oil and gas companies, making material reductions to their planned spending on offshore projects, compounding the effect of COVID-19 on offshore operations. Further, these conditions, separately or together, have continued to impact the demand for our services, the utilization and/or rates we can achieve for our assets and services, and the outlook for our industry in general.

~~In the~~ ~~first~~ ~~and~~ ~~second~~ ~~quarters of~~ ~~2020,~~ ~~we considered these events to be indicators that the value of our active offshore vessel fleet~~ ~~may~~ ~~be impaired. As a result, as of~~ ~~March 31, 2020~~ ~~and~~ ~~June 30, 2020,~~ ~~we performed Step~~ 1 ~~evaluations of our active offshore fleet under FASB Accounting Standards Codification~~ ~~360,~~ which governs the methodology for identifying and recording impairment of long-lived assets to determine if any of our asset groups have net book value in excess of undiscounted future net cash flows. Our evaluations did ~~not~~ ~~indicate impairment of any of our asset groups. Beginning with the~~ ~~third~~ ~~quarter of~~ ~~2020,~~ ~~conditions related to the COVID-~~19 ~~pandemic and oil price environment stabilized and in the~~ ~~fourth~~ ~~quarter of~~ ~~2020~~ ~~industry conditions marginally improved. Similarly, in the~~ ~~first~~~~nine~~ ~~months of~~ ~~2021~~ ~~we have~~ ~~not~~ ~~seen indications in the industry that would indicate impairment of any of our asset groups. As a result, we did~~ ~~not~~ ~~identify additional events or conditions that would require us to perform a Step~~ 1 ~~evaluation as of~~ ~~September 30, 2021~~~~. We will continue to monitor the expected future cash flows and the fair market value of our asset groups for impairment.~~

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, ~~2020,~~2021, filed with the SEC on March ~~4, 2021,~~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, ~~2020,~~2021, filed with the SEC on March ~~4, 2021, as amended on April 30, 2021.~~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 ~~September~~June 30, ~~2021,~~2022, we owned ~~153~~196 vessels with an average age of 11.3 years (excluding 3one joint venture ~~vessels), 139 of which are~~vessel, but including five stacked vessels and nine vessels designated as assets held for sale) available to serve the global energy ~~industry and 14 of which are available for immediate sale.~~industry. We also have two vessels currently under construction. The average age of our ~~139~~187 active vessels at ~~September~~June 30, ~~2021~~2022 is ~~10.6~~11.1 years.

On April 22, 2022, we completed our previously disclosed acquisition of 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.

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

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

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 September 30, 2021, 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.

Previously, DTDW had long-term debt of $4.7 million which was secured by the vessel owned by DTDW and guarantees from the DTDW partners (in proportion to their ownership interests). On April 22, 2021, we paid approximately $2.0 million, which represented our portion of the joint venture debt guarantee and our partner assumed the remaining joint venture debt which represented his portion of the guarantee.

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. ~~Beginning~~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 causing~~less than $30.0 per barrel 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.~~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 ~~have~~declined severely in the second quarter of 2020, trading at below $20.0 per barrel. Oil prices recovered in 2021 to levels greater than experienced since 2018, ~~currently trading near $80.00~~and in the first half of 2022 have traded in a volatile range between $90.0 and $125.0 per barrel. Natural gas prices are also at historic highs.

In ~~spite~~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 started to expand exploration and development activities.

We are one of the world’s largest ~~operator~~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 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. Any spread of COVID-19 to our onshore workforce or key management personnel could prevent us from supporting our offshore operations, reduce productivity as our onshore personnel continue to work remotely, and disrupt our business. Any outbreak on our vessels may result in the vessel, or some or all of a vessel crew, being quarantined and therefore impede the vessel’s ability to generate revenue. We have experienced challenges in connection with our offshore crew changes due to health and travel restrictions related to COVID-19, and those challenges and/or restrictions are expected to continue despite our efforts at mitigating them. To the extent the COVID-19 pandemic adversely affects our operations and business, it may also have the effect of heightening many of the other risks set forth in our SEC filings.

The effect on our business 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 ~~third quarter and year-to-date~~our year 2021 revenues by less than ~~1% and 4% respectively.~~3%. Our revenues for the six months ended June 30, 2022 were not significantly impacted. In addition, in the year ended December 31, ~~2020~~2021, and the ~~nine~~six months ended ~~September~~June 30, ~~2021,~~2022 we incurred approximately ~~$18.0~~$7.0 million and ~~$5.2~~$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.~~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 ~~undertaken several~~begun to take measures to ~~allow us~~address the future of our company and our impact on climate change. Such measures include modifications to ~~recover~~many of our vessels to reduce our carbon footprint (approximately $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 ~~soon~~of June 30, 2022); developing associations with alternative energy providers such as ~~possible:~~windfarms; and 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 ~~full~~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 ~~COVID-19 pandemic~~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, will depend on the severity, location, and duration of the effects and spread of the pandemic itself, the actions undertaken by national, regional, and local governments and health officials to contain the virus or treat its effects, and how quickly and to what extent economic conditions improve and normal business and operating conditions resume. As we cannot predict the duration or scope of this pandemic, the anticipated negative financial impact to our operating results cannot be reasonably estimated but could be both material and long lasting.

~~In the first and second quarters of 2020, we considered these events to be indicators that the value~~please see "Risk Factors" in Item 1A of our ~~active offshore vessel fleet may be impaired. As a result, as of March~~Annual Report on Form 10-K for the year ended December 31, 2020 and June 30, 2020, we performed Step 1 evaluations of our active offshore fleet under FASB Accounting Standards Codification 360, which governs the methodology for identifying and recording impairment of long-lived assets to determine if any of our asset groups have net book value in excess of undiscounted future net cash flows. Our evaluations did not indicate impairment of any of our asset groups. Beginning2021, filed with the third quarter of 2020, conditions related to the pandemic and oil price environment stabilized and in the fourth quarter industry conditions marginally improved. Similarly, during the first nine months of 2021, we have not seen indications in the industry that would indicate impairment of any of our asset groups. As a result, we did not identify additional events or conditions that would require us to perform a Step 1 evaluation as of September 30, 2021. We will continue to monitor the expected future cash flows and the fair market value of our asset groups for impairment.SEC on March 9, 2022.

In conjunction with the acquisition of ~~Contents~~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 ~~September~~June 30, ~~2021~~2022 compared to ~~September~~June 30, ~~2020~~2021

Revenues for the quarters ended ~~September~~June 30, 2022 and 2021 ~~and 2020~~ were ~~$92.4~~$163.4 million and ~~$86.5~~$90.0 million, respectively. The ~~$5.9~~$73.4 million increase in revenue is primarily due to ~~an increase~~the acquisition of 50 vessels in ~~capacity, as~~the SPO acquisition and to increases in utilization, average day rates and active vessels. Overall, we ~~have six~~had 54 more average active vessels ~~working~~ in the ~~third~~second quarter of ~~2021~~2022 than ~~during~~in the ~~same~~second quarter of ~~2020. The increased capacity was supplemented by increased active utilization from 78.2% in 2020 to 81.6% in~~ 2021. Average day rates ~~decreased slightly~~increased from ~~$10,503~~$10,435 per day in ~~2020~~2021 to ~~$10,288~~$12,544 in ~~2021.~~2022. Active utilization increased from 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 ~~September~~June 30, 2022 and 2021 ~~and 2020~~ were ~~$65.3~~$100.3 million and ~~$61.8~~$64.3 million, respectively. The increase is primarily due to the increase in vessel activity, as we have ~~six~~54 more active vessels in our fleet in the ~~third~~second quarter of 2022 compared to the second quarter of 2021 ~~compared~~primarily due to the ~~third quarter of 2020. There was higher than normal repair~~additional vessels from the SPO acquisition and ~~maintenance cost in the quarter and we have~~ also ~~reactivated vessels~~ as a result of ~~new contracts.~~our continued recovery from the low vessel utilization levels caused by the pandemic and increased activity as higher crude oil prices has resulted in more activity from our customers.

Depreciation and amortization expense for the quarters ended ~~September~~June 30, 2022 and 2021 ~~and 2020~~ were ~~$28.0~~$31.8 million and ~~$30.8~~$28.5 million, respectively, ~~with the difference~~ largely due to an increase in depreciation expense because of a higher vessel count resulting from the ~~sale~~SPO acquisition partially offset by lower amortization of ~~ten vessels from our active fleet in 2021.~~deferred drydock expenditures.

General and administrative expenses for the quarters ended ~~September~~June 30, 2022 and 2021 ~~and 2020~~ were ~~$18.0~~$27.8 million and ~~$17.4~~$16.8 million, respectively. The increase is primarily due to ~~higher~~increased general and administrative costs associated with the Singapore and Dubai offices acquired in the SPO acquisition and professional ~~fees.~~fees and transaction costs related to the SPO acquisition which totaled $7.2 million for the quarter.

Included in ~~gain (loss)~~loss on asset dispositions, net for the quarter ended ~~September~~June 30, ~~2021,~~2022, are ~~$0.1~~$1.3 million of net losses from the disposal of ~~six~~four vessels and other assets. During the quarter ended ~~September~~June 30, ~~2020,~~2021, we recognized ~~gains~~losses of ~~$0.5~~$0.9 million related to the disposal of 22seven vessels and other assets.

~~Long-lived asset impairment and affiliate credit loss impairment expense during~~ One of the ~~quarters ended September 30,~~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 ~~2020, were~~we recognized a ~~$2.2~~gain of $4.3 million and $1.9 million expense, respectively. The expense in 2021 is due to $1.9 million impairment of vessels designated as assets held for sale offset by $1.7 million of recovered impairment of a vessel reactivated and added back toon the active fleet from assets held for sale and $1.9 million of impairment expense related to obsolete marine service and vessel supplies and parts inventory. In the prior year quarter we recorded $1.9 million of impairment expense related to obsolete marine service and vessel supplies and parts inventory.sale.

Interest expense for the quarters ended ~~September~~June 30, 2022 and 2021, ~~and 2020,~~ was ~~$3.7~~$4.3 million and ~~$6.1~~$3.9 million, respectively. ~~Since July 1, 2020, we paid down $134.1 million of our~~The increase reflects higher overall long-term debt balance and higher coupon rate on the Senior Secured Bonds issued in November 2021 compared to the Senior Secured Notes and ~~TROMS~~Troms debt ~~which reduced our interest expense.~~ outstanding in the second quarter of 2021. The debt outstanding in 2021 was replaced by the Senior Secured Bonds in November 2021.

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 ~~quarters~~quarter ended ~~September~~June 30, ~~2021 and 2020,~~2022, we recognized foreign exchange losses of ~~$0.5~~$1.9 million and ~~$1.2 million, respectively.~~during the quarter ended June 30, 2021 we recognized foreign exchange gains of $0.4 million.

The income tax expense for the three months ended ~~September~~June 30, ~~2021~~2022 was ~~$0.9~~$6.6 million compared to an income tax expense of $6.0 million for the three months ending ~~September~~June 30, ~~2020. The decrease of $5.1 million resulted from a benefit recognized from the resolution of an uncertain tax provision during the quarter.~~2021. The tax expense for the three months ended ~~September~~June 30, ~~2021~~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 – ~~Nine~~Six Months Ended ~~September~~June 30, ~~2021~~2022 compared to ~~September~~June 30, ~~2020~~2021

Revenues for the ~~nine~~six months ended ~~September~~June 30, 2022 and 2021 ~~and 2020~~ were ~~$265.9~~$269.2 million and ~~$305.2~~$173.5 million, respectively. The ~~$39.3~~$95.7 million ~~decrease~~increase in revenue is primarily due to ~~a decrease~~the acquisition of 50 vessels in ~~capacity, primarily as a result of contract cancellations~~the SPO acquisition which closed on April 22, 2022 and ~~reduced demand arising from the effects of COVID-19~~to increases in utilization, average day rates and ~~lower crude oil prices.~~active vessels. Overall, we had ~~17 less~~35 more average active vessels ~~during~~in the ~~nine~~first six months of ~~2021~~2022 than in the ~~nine~~first six months of ~~2020. Active utilization increased slightly from 77.0% in 2020 to 79.2% in~~ 2021. Average day rates ~~decreased slightly~~also increased from ~~$10,510~~$10,219 per day in ~~2020~~2021 to ~~$10,243~~$11,738 in ~~2021.~~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 ~~nine~~six months ended ~~September~~June 30, 2022 and 2021 ~~and 2020~~ were ~~$190.6~~$168.8 million and ~~$205.4~~$125.3 million, respectively. The ~~decrease~~increase is primarily due to ~~a decrease~~the increase in vessel activity, as we have ~~17 less~~35 more active vessels in our fleet in the ~~nine~~first six months of 2022 compared to the first six months of 2021 ~~compared to the nine months of 2020 largely~~primarily due to the ~~downturn~~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.~~pandemic and the increased activity as higher crude oil prices has resulted in more activity from our customers.

Depreciation and amortization expense for the ~~nine~~six months ended ~~September~~June 30, 2022 and 2021 ~~and 2020~~ were ~~$86.3~~$58.4 million and ~~$86.0~~$58.3 million, ~~respectively,~~respectively. Depreciation expense only increased slightly because the higher vessel count from the SPO acquisition was largely ~~due to increased depreciation due to change in estimated vessel salvage values partially~~ offset by a decrease in in amortization expense related to deferred drydock ~~expenditures resulting from the sale of vessels from the active fleet.~~expenditures.

General and administrative expenses for the ~~nine~~six months ended ~~September~~June 30, 2022 and 2021 ~~and 2020~~ were ~~$50.9~~$46.0 million and ~~$56.5~~$32.8 million, respectively. The ~~decrease~~increase is primarily due to ~~decreased personnel~~general and ~~benefit~~administrative costs associated with the Singapore and Dubai offices acquired in the SPO acquisition and professional fees and transaction costs related to the ~~significant cost cutting measures that were implemented due to~~SPO acquisition which totaled $9.4 million for the ~~COVID-19 downturn.~~six months ended June 30, 2022.

Included in ~~gain (loss)~~loss on asset dispositions, net for the ~~nine~~six months ended ~~September~~June 30, ~~2021,~~2022, are ~~$3.0~~$1.1 million of net losses from the disposal of 19nine vessels and other assets. During the ~~nine~~six months ended ~~September~~June 30, ~~2020,~~2021, we recognized ~~gains~~losses of ~~$7.5~~$2.9 million related to the disposal of 4713 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 ~~affiliate credit loss impairment expense and affiliate guarantee obligation~~ during the ~~nine~~six months ended ~~September~~June 30, ~~2021 and 2020, were $1.2~~2022 was $0.5 million ~~and $123.2 million, respectively. The expense in 2021 is due~~credit related to ~~$1.9 million~~recovery of impairment ~~of additional vessels designated as~~on a vessel reclassified from assets held for sale ~~offset by $1.7 million recovered impairment of a vessel reactivated and added~~ back to the active ~~fleet from assets held for sale; $1.9~~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 ~~of impairment expense~~in losses related to ~~obsolete marine service~~our interest in the Sonatide joint venture in Angola. On January 3, 2022, we acquired our partner’s 51% interest in Sonatide and ~~vessel supplies~~ceased recording equity gains and ~~parts inventory;~~losses.

Interest income and ~~a partial offset~~other, net was $3.8 million higher in the first six months of ~~$1.0 million affiliate credit loss impairment credit~~2022 compared to the first six months of 2021. The 2022 income was primarily related to the ~~valuation~~$1.3 million bargain purchase gain on our acquisition of ~~our net receivables from our joint ventures~~51% of Sonatide and $1.9 million in Africa. In the prior year period, we recorded $65.7 million of impairment expense related to valuation of our assets held for sale, $53.6 million affiliate credit loss impairment expense relating to the valuation of our net receivables from our joint ventures in Africainterest and ~~$2.0 million of impairment~~other income related to a ~~guarantee of long-term debt~~litigation settlement for one of our ~~Nigerian joint venture.~~vessels.

We ~~also recorded $17.2~~recognized a $14.2 million ~~of dividend income~~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 ~~one of our African joint ventures~~liabilities to equity based on the difference in the ~~nine months ended September 30, 2020.~~

~~Interest expense for~~Tidewater common stock price on amendment date and the nine months ended September 30, 2021 and 2020, was $12.2 million and $18.2 million, respectively. Since July 1, 2020, we paid down $134.1 million of our Senior Notes and TROMS debt which reduced our interest expense.acquisition date closing common stock price.

During the ~~nine~~six months ended ~~September~~June 30, ~~2021~~2022 and ~~2020,~~2021, we recognized foreign exchange losses of ~~$1.0~~$0.9 million and ~~$2.4~~$0.4 million, respectively.

The income tax expense for the ~~nine~~six months ended ~~September~~June 30, ~~2021~~2022 was ~~$8.9~~$11.8 million compared to an income tax expense of ~~$3.5~~$8.0 million for the ~~nine~~six months ~~ended September~~ending June 30, 2020. The increase of $5.4 million from the prior year period resulted from the beneficial impact of a change in the tax laws (primarily the Cares Act refund) and higher foreign tax expenses in the current period.2021. The tax expense for the ~~nine~~six months ended ~~September~~June 30, ~~2021~~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									Six Months Ended
	Three Months Ended								Nine Months Ended									June 30, 2022				June 30, 2021					June 30, 2022				June 30, 2021
(In thousands, except for percentages)	September 30, 2021				September 30, 2020				September 30, 2021					September 30, 2020
Vessel revenues:
Americas	$	24,564	27	%	$	28,705	34	%	$	74,269		29	%	$	94,608	32	%	$	37,520	23	%	$	23,481		27	%	$	65,964	25	%	$	49,705		29	%
Middle East/Asia Pacific		25,633	28	%		23,280	27	%		75,675		29	%		72,091	24	%
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		21,197	23	%		17,716	21	%		58,413		22	%		67,827	23	%		32,475	20	%		22,467		25	%		56,394	21	%		37,216		22	%
West Africa		20,240	22	%		15,694	18	%		52,784		20	%		63,818	21	%		47,422	29	%		16,938		19	%		73,820	28	%		32,544		19	%
Total vessel revenues	$	91,634	100	%	$	85,395	100	%	$	261,141		100	%	$	298,344	100	%	$	162,175	100	%	$	88,514		100	%	$	266,051	100	%	$	169,507		100	%
Vessel operating costs:
Americas:
Crew costs	$	8,535	35	%	$	11,711	41	%	$	30,261		41	%	$	39,035	41	%	$	12,949	34	%	$	11,132		47	%	$	24,201	37	%	$	21,726		44	%
Repair and maintenance		2,951	12	%		1,259	4	%		7,857		11	%		5,133	5	%		2,866	8	%		2,192		9	%		5,493	8	%		4,906		10	%
Insurance		219	1	%		426	1	%		389		1	%		1,270	1	%		248	1	%		(30	)	(0	)%		615	1	%		170		0	%
Fuel, lube and supplies		2,028	8	%		1,754	6	%		5,754		8	%		5,742	6	%		2,326	6	%		1,952		8	%		4,711	7	%		3,726		7	%
Other		3,008	12	%		2,486	9	%		7,960		11	%		7,115	8	%		3,054	8	%		2,972		13	%		5,250	8	%		4,952		10	%
	$	16,741	68	%	$	17,636	61	%	$	52,221		70	%	$	58,295	62	%	$	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	$	9,950	39	%	$	10,468	45	%	$	29,499		39	%	$	29,279	41	%	$	11,193	39	%	$	9,109		44	%	$	19,658	40	%	$	17,898		43	%
Repair and maintenance		2,944	11	%		2,385	10	%		8,235		11	%		7,167	10	%		3,429	12	%		2,364		11	%		5,553	12	%		4,473		11	%
Insurance		60	0	%		562	2	%		(127	)	(0	)%		1,892	3	%		325	1	%		47		0	%		622	1	%		(217	)	(1	)%
Fuel, lube and supplies		1,747	7	%		1,783	8	%		4,810		6	%		5,853	8	%		2,700	10	%		1,289		6	%		4,259	9	%		2,448		6	%
Other		3,334	13	%		2,057	9	%		8,985		12	%		6,165	9	%		2,249	8	%		2,233		11	%		4,706	10	%		4,881		12	%
	$	18,035	70	%	$	17,255	74	%	$	51,402		68	%	$	50,356	70	%	$	19,896	70	%	$	15,042		72	%	$	34,798	72	%	$	29,483		71	%
Europe/Mediterranean:
Crew costs	$	10,541	50	%	$	7,952	45	%	$	30,082		51	%	$	29,355	43	%	$	12,349	38	%	$	10,519		47	%	$	24,352	43	%	$	19,541		53	%
Repair and maintenance		1,754	8	%		869	5	%		5,671		10	%		5,288	8	%		2,414	7	%		2,244		10	%		4,520	8	%		3,917		11	%
Insurance		208	1	%		448	3	%		376		1	%		1,299	2	%		307	1	%		(131	)	(1	)%		616	1	%		168		0	%
Fuel, lube and supplies		846	4	%		592	3	%		2,469		4	%		2,614	4	%		1,740	5	%		864		4	%		2,817	5	%		1,623		4	%
Other		1,926	9	%		1,274	7	%		5,436		9	%		5,343	8	%		2,468	8	%		1,803		8	%		4,494	8	%		3,510		9	%
	$	15,275	72	%	$	11,135	63	%	$	44,034		75	%	$	43,899	65	%	$	19,278	59	%	$	15,299		68	%	$	36,799	65	%	$	28,759		77	%
West Africa:
Crew costs	$	6,583	33	%	$	6,555	42	%	$	18,614		35	%	$	22,195	35	%	$	16,010	34	%	$	6,124		36	%	$	24,339	33	%	$	12,031		37	%
Repair and maintenance		2,848	14	%		1,419	9	%		7,705		15	%		5,598	9	%		3,823	8	%		2,466		15	%		6,143	8	%		4,857		15	%
Insurance		325	2	%		517	3	%		660		1	%		1,287	2	%		396	1	%		(13	)	(0	)%		753	1	%		335		1	%
Fuel, lube and supplies		2,130	10	%		2,628	17	%		6,119		11	%		8,683	14	%		3,165	6	%		2,231		13	%		5,115	7	%		3,989		12	%
Other		3,407	17	%		4,639	30	%		9,872		19	%		15,070	24	%		4,307	9	%		3,173		19	%		6,959	10	%		6,465		20	%
	$	15,293	76	%	$	15,758	100	%	$	42,970		81	%	$	52,833	83	%	$	27,701	58	%	$	13,981		83	%	$	43,309	59	%	$	27,677		85	%
Vessel operating costs:
Crew costs	$	35,609	39	%	$	36,686	43	%	$	108,456		42	%	$	119,864	40	%	$	60,639	38	%	$	37,685		43	%	$	101,476	38	%	$	72,847		43	%
Repair and maintenance		10,497	11	%		5,932	7	%		29,468		11	%		23,186	8	%		13,477	8	%		9,534		11	%		22,938	8	%		18,971		11	%
Insurance		812	1	%		1,953	2	%		1,298		1	%		5,748	2	%		1,366	1	%		(137	)	(0	)%		2,750	1	%		486		1	%
Fuel, lube and supplies		6,751	7	%		6,757	8	%		19,152		7	%		22,892	8	%		11,521	7	%		6,541		7	%		18,597	7	%		12,401		7	%
Other		11,675	13	%		10,456	12	%		32,253		12	%		33,693	11	%		13,254	8	%		10,640		12	%		23,007	9	%		20,578		12	%
Total vessel operating costs	$	65,344	71	%	$	61,784	72	%	$	190,627		73	%	$	205,383	69	%	$	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 ~~nine~~six months ended ~~September~~June 30, ~~2021~~2022 and ~~2020:~~2021:

The following table presents segment and total depreciation and amortization expense ~~by our four geographic segments,~~and the related segment and total vessel depreciation and amortization expense as a percentage of segment ~~vessel revenues, total segment depreciation~~ and ~~amortization expense and the related total segment depreciation and amortization expense as a percentage of~~ total vessel revenues for the three and ~~nine~~six months ended ~~September~~June 30, ~~2021~~2022 and ~~2020:~~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 ~~nine~~six months ended ~~September~~June 30, ~~2021~~2022 and ~~2020:~~2021:

Results for three months ended ~~September~~June 30, ~~2021~~2022 compared to ~~September~~June 30, ~~2020~~2021

Americas Segment Operations. Vessel revenues in the Americas segment ~~decreased 14.4%~~increased 59.8%, or ~~$4.1~~$14.0 million, during the quarter ended ~~September~~June 30, ~~2021,~~2022, as compared to the quarter ended ~~September~~June 30, ~~2020.~~2021. This ~~decrease~~increase is primarily the result of ~~less demand due to the pandemic partially offset by~~ a 9%25.9% increase in average day ~~rates. We had six less~~rates largely due the demand recovery with higher crude oil prices and the reduction of COVID-19 restrictions and an increase in average ~~active vessels~~utilization from 76.4% in the second quarter ~~ended September 30,~~of 2021 ~~than the comparable prior year period. Active utilization for the quarter ended September 30, 2021 decreased~~ to ~~80.4% from 82.0%. Average day rates increased from $12,581 per day~~86.8% in the ~~third~~second quarter of ~~2020 to $13,742 per~~2022. The SPO acquisition added one average vessel in the Americas segment that contributed 77.0% utilization, $15,226 average day ~~during the third quarter of 2021. This increase is a result of the recent demand resulting from the commodity pricing.~~rate and $0.7 million in revenue.

Vessel operating ~~loss~~profit for the Americas segment for the quarter ended ~~September~~June 30, ~~2021~~2022 was ~~$1.8~~$5.9 million, compared to ~~$0.1~~a $4.9 million operating ~~profit~~loss for the quarter ended ~~September~~June 30, ~~2020.~~2021. The increase in operating ~~loss~~profit was largely due to the ~~decrease~~increase in revenue partially offset by ~~lower~~a $3.2 million increase in operating expenses, resulting mainly from reactivation costs and $0.8 million from the ~~decrease~~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 ~~and the cost saving measures taken in the first quarter of 2020 in response to the effect~~increased by 13, entirely as a result of the ~~pandemic~~acquisition of SPO. Average day rates increased 28.4%.

The 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 ~~a $0.8~~administrative costs of $3.1 million, ~~decrease in depreciation and amortization. The decrease in~~ depreciation and amortization ~~was primarily due to lower amortization~~expense of ~~deferred drydock costs and sales of vessels from the active fleet. General and administrative expenses decreased $0.6~~$1.5 million, ~~quarter over quarter, reflecting our immediate cost reduction efforts at the beginning~~all as a result of the ~~COVID-19 pandemic.~~SPO acquisition.

Middle ~~East/Asia Pacific~~East Segment Operations. Vessel revenues in the Middle ~~East/Asia Pacific~~East segment increased ~~10%~~36.8%, or ~~$2.4~~$7.6 million, during the quarter ended ~~September~~June 30, ~~2021,~~2022, as compared to the quarter ended ~~September~~June 30, ~~2020.~~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 ~~September~~June 30, ~~2021 increased~~2022 decreased to ~~87.3%~~80.8% from ~~76.8% and~~86.8% but average day rates increased ~~7% but were partially offset by the effect of four less average active vessels.~~15.5%.

The Middle ~~East/Asia Pacific~~East segment reported an operating loss of ~~$0.7~~$0.3 million for the quarter ended ~~September~~June 30, ~~2021,~~2022, compared to an operating loss of ~~$2.2~~$1.5 million for the quarter ended ~~September~~June 30, ~~2020.~~2021 as the increase in revenue was largely offset by a $4.9 million increase in operating costs ($2.7 million attributable to the acquired vessels), a $1.1 million increase in depreciation and amortization, and a $0.5 million increase in general and administrative costs. The ~~reduced operating loss was the~~increase in costs were primarily a result of the ~~revenue increase partially offset by increases~~five average vessels acquired in ~~operating expenses~~the SPO acquisition and addition of ~~$0.8 million, resulting largely from increased repair and maintenance cost. General and administrative expenses and depreciation and amortization costs remained relatively flat for~~ the ~~comparable periods. The downturn has not significantly impacted this segment’s operations and the revenue increase reflects the recent increases in demand.~~SPO Dubai office.

Europe/Mediterranean Segment Operations. Vessel revenues in the Europe/Mediterranean segment increased ~~20%~~44.5%, or ~~$3.5~~$10.0 million, during the quarter ended ~~September~~June 30, ~~2021,~~2022, as compared to the quarter ended ~~September~~June 30, ~~2020.~~2021. The increased revenue was ~~primarily~~ attributable to ~~six additional~~four more average active ~~vessels. Average~~vessels (one from the SPO acquisition, which had revenue of $1.8 million) combined with 21.3% higher average day ~~rates decreased from $13,361 in the third quarter of 2020 to $11,890 in the third quarter of 2021 as many longer term contracts were cancelled in the prior year due to the pandemic.~~rates. Active utilization decreased ~~in the same periods~~slightly from ~~95.1%~~90.6% to ~~90.5%~~88.1%.

The Europe/Mediterranean segment reported an operating ~~loss~~profit of ~~$2.9~~$4.3 million for the quarter ended ~~September~~June 30, ~~2021,~~2022, compared to an operating loss of ~~$3.9~~$2.0 million for the quarter ended ~~September~~June 30, ~~2020 as~~2021. The higher operating profit was due to the ~~increased~~ revenue ~~combined with $0.3 million in lower general and administrative costs and $1.4 million in lower depreciation and amortization costs were largely~~increase offset by ~~$4.1~~$4.0 million in higher operating costs ~~related~~associated with the increase in average vessels. The SPO vessel incurred $1.1 million in operating cost for the period. Depreciation and amortization also decreased by $0.3 million due to ~~higher repairs and maintenance and higher crew costs as we activated more vessels.~~lower drydock amortization.

West Africa Segment Operations. Vessel revenues in the West Africa segment increased ~~29%~~180.0% or ~~$4.5~~$30.5 million, during the quarter ended ~~September~~June 30, ~~2021,~~2022, as compared to the quarter ended ~~September~~June 30, ~~2020.~~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 ~~66.3%~~61.8% during the quarter ended ~~September~~June 30, ~~2020~~2021 to ~~71.3%~~82.9% during the quarter ended ~~September~~June 30, ~~2021. However,~~2022. In addition, average day rates ~~decreased 11% due to the change in the mix of remaining contracts.~~increased 25.8%. The increases in revenue are ~~almost entirely~~ the result of ~~recent~~the additional SPO vessels, which added $19.5 million in revenue and higher ~~demand.~~demand caused by reduced restrictions from the pandemic and the higher price of crude oil.

~~Vessel operating loss for the~~ West Africa ~~segment decreasedfrom $10.2~~reported an operating profit of $9.3 million for the quarter ended ~~September~~June 30, ~~2020~~2022, compared to ~~$3.7~~an operating loss of $5.4 million infor the quarter ended ~~September~~June 30, ~~2021 primarily~~2021. The increase in operating results is largely due to the ~~increased~~increase in revenue ~~combined with decreases~~partially offset by $13.7 million ($11.9 million attributable to the acquired SPO vessels) in ~~all major expense categories. We experienced $0.5 million in lower~~higher operating costs ~~$0.7 million~~primarily related to the increase in ~~lower depreciation and amortization costs and $0.7 million in lower~~average active vessels. In addition, general and administrative ~~costs.~~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.

Results for ~~nine~~six months ended ~~September~~June 30, ~~2021~~2022 compared to ~~September~~June 30, ~~2020~~2021

Americas Segment Operations. Vessel revenues in the Americas segment ~~decreased 21%~~increased 32.7%, or ~~$20.3~~$16.3 million, during the ~~nine~~six months ended ~~September~~June 30, ~~2021,~~2022, as compared to the ~~nine~~six months ended ~~September~~June 30, ~~2020.~~2021. This ~~decrease~~increase is primarily the result of ~~less~~a two average vessel increase and a 29.3% increase in average day rates largely due the demand ~~due to~~recovery with higher crude oil prices and the ~~pandemic. We had seven less average active vessels~~reduction of COVID-19 restrictions. Average utilization decreased slightly from 82.4% in the ~~nine~~first six months ~~ended September 30,~~of 2021 to 81.4% in the first six months of 2022. The SPO acquisition added less than one average vessel in the ~~comparable prior year period. Active~~Americas segment that contributed 77.0% utilization ~~for the nine months ended September 30, 2021 decreased~~and a $15,226 average day rate. The additional vessel added $0.7 million to 81.8% from 85.5% for the nine months ended September 30, 2020. Average day rates increased by 3% to $12,846 during the nine months ended September 30, 2021, as compared to $12,423 for the nine months ended September 30, 2020.revenue.

Vessel operating ~~loss~~profit for the Americas segment for the ~~nine~~six months ended ~~September~~June 30, ~~2021~~2022 was ~~$8.4~~$5.8 million, compared to a ~~$3.4~~$6.6 million operating ~~profit~~loss for the ~~nine~~six months ended ~~September~~June 30, ~~2020.~~2021. The increase in operating ~~loss~~profit was largely due to the ~~decrease~~increase in revenue partially offset by a ~~$6.1~~$4.8 million ~~decrease~~increase in operating expenses ~~and a $1.5~~($0.8 million ~~decrease in general and administrative expenses,~~from the additional SPO vessel), resulting mainly from ~~the decrease in active vessels and the intensive cost saving measures taken in the first half of 2020 in response to the effect of the COVID-19 pandemic. Segment depreciation~~reactivation costs. Depreciation and amortization ~~expense also~~ decreased ~~by 4% in the comparable periods~~slightly due ~~largely~~ to ~~active vessel sales.~~lower amortization of deferred drydock costs.

~~Middle East/~~Asia Pacific Segment Operations. Vessel revenues in the ~~Middle East/~~Asia Pacific segment increased 5%151.8%, or ~~$3.6~~$12.8 million, during the ~~nine~~six months ended ~~September~~June 30, ~~2021,~~2022, as compared to the ~~nine~~six months ended ~~September~~June 30, ~~2020. Active utilization for~~2021. Average active vessels increased by seven, entirely as a result of the ~~nine months ended September 30, 2021 increased to 86.6% from 76.8% and average~~acquisition of SPO. Average day rates increased ~~8% but were somewhat offset by~~25.4%. The vessels from the ~~effect of six less average active vessels.~~SPO acquisition added $15.0 million to revenue.

The ~~Middle East/~~Asia Pacific segment reported an operating ~~loss~~profit of ~~$2.3~~$1.3 million for the ~~nine~~six months ended ~~September~~June 30, ~~2021,~~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 ~~$2.5~~$3.3 million for the ~~nine~~six months ended ~~September~~June 30, ~~2020 as~~2021 primarily due to the increase in revenue ~~increase was largely~~partially offset by a ~~$2.3~~$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 due to a change in estimated vessel salvage values in the third quarter of 2020 and increased amortization of deferred drydock costs. The current downturn has not significantly impacted this segment’s operations and the revenue increase reflects the recent increases in demand.amortization.

Europe/Mediterranean Segment Operations. Vessel revenues in the Europe/Mediterranean segment ~~decreased 14%~~increased 51.5%, or ~~$9.4~~$19.2 million, during the ~~nine~~six months ended ~~September~~June 30, ~~2021,~~2022, as compared to the ~~nine~~six months ended ~~September~~June 30, ~~2020.~~2021. The ~~decreased~~increased revenue was ~~primarily~~ attributable to ~~two less~~six more average active vessels (less than one from the SPO acquisition, which had revenue of $1.8 million) combined with ~~4% lower~~higher average day rates and ~~slightly lower~~higher active ~~utilization. The decreases in revenue are almost entirely~~utilization largely due the ~~result~~demand recovery with higher crude oil prices and the reduction of ~~lower demand caused by the effect of the pandemic, although demand in this segment is beginning~~COVID-19 restrictions. Active utilization increased from 86.5% to ~~recover as evidenced by the increase in third quarter revenue of 2021.~~89.7% and average day rates increased 11.3%.

The Europe/Mediterranean segment reported an operating ~~loss~~profit of ~~$12.9~~$1.8 million for the ~~nine~~six months ended ~~September~~June 30, ~~2021,~~2022, compared to an operating loss of ~~$4.1~~$10.0 million for the ~~nine~~six months ended ~~September~~June 30, ~~2020 due to decreased~~2021. The improved results are from the increase in revenue partially offset by ~~slightly lower depreciation~~$8.0 million in higher operating costs associated with the increase in average vessels and ~~amortization and~~a $0.3 million increase in general and administrative costs. The SPO vessel incurred $1.1 million in operating costs ~~resulting primarily from~~during the ~~decrease in active vessels~~period. Depreciation and ~~the intensive cost saving measures taken in 2020 in response~~amortization decreased by $1.0 million due to ~~the effect of the pandemic~~lower drydock amortization.

West Africa Segment Operations. Vessel revenues in the West Africa segment ~~decreased 17%~~increased 126.8%, or ~~$11.0~~$41.3 million, during the ~~nine~~six months ended ~~September~~June 30, ~~2021,~~2022, as compared to the ~~nine~~six months ended ~~September~~June 30, ~~2020.~~2021. The West Africa average active vessel fleet ~~decreased~~increased by ~~two~~16 vessels during the comparative periods. ~~Average day rates decreased 14% due~~The SPO acquisition added eight vessels to the ~~change~~average vessel count and contributed $19.7 million in ~~the mix of remaining contracts.~~revenue. West Africa segment active utilization increased as well from ~~62.7%~~60.8% during the ~~nine~~six months ended ~~September~~June 30, ~~2020~~2021 to ~~64.4%~~81.3% during the ~~nine~~six months ended ~~September~~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 ~~decreases~~increase in operating results is due to the increase in revenue ~~are almost entirely~~partially offset by $15.6 million ($11.9 million attributable to the ~~result of lower demand caused by~~acquired SPO vessels) in higher operating costs primarily related to the ~~pandemic.~~

~~Vessel operating loss for the West Africa segment decreasedfrom $19.0 million for the nine months ended September 30, 2020 to $15.8 million~~increase in ~~the nine months ended September 30, 2021 primarily due to $3.6 million in lower~~average active vessels. In addition, general and administrative costs ~~resulting from intensive cost saving measures taken in the first half of 2020 in response to the effect of the pandemic. Segment~~increased by $0.4 million and depreciation and amortization ~~also decreased~~increased by ~~$0.7 million.~~$0.6 million due largely to 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 (3(one and three vessels at ~~both September~~June 30, 2022 and 2021, ~~and 2020)~~respectively). Active utilization is calculated on active vessels (which excludes vessels held for ~~sale)~~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 ~~nine~~six months ended ~~September~~June 30, ~~2021~~2022 and ~~2020:~~2021:

	Three Months Ended						Nine Months Ended						Three Months Ended						Six Months Ended
	September 30, 2021			September 30, 2020			September 30, 2021			September 30, 2020			June 30, 2022			June 30, 2021			June 30, 2022			June 30, 2021
SEGMENT STATISTICS:
Americas fleet:
Utilization		54.5	%		52.2	%		55.6	%		55.9	%		73.0	%		51.0	%		66.9	%		56.1	%
Active utilization		80.4	%		82.0	%		81.8	%		85.5	%		86.8	%		76.4	%		81.4	%		82.4	%
Average vessel day rates		13,742			12,581			12,846			12,423		$	16,569		$	13,162		$	16,091		$	12,444
Average total vessels		36			47			38			50			34			38			34			39
Average stacked vessels		(11	)		(17	)		(12	)		(17	)		(5	)		(13	)		(6	)		(13	)
Average active vessels		25			30			26			33			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		85.0	%		69.9	%		82.7	%		65.1	%		80.8	%		83.4	%		81.8	%		80.3	%
Active utilization		87.3	%		76.8	%		86.6	%		76.8	%		80.8	%		86.8	%		82.1	%		85.6	%
Average vessel day rates		8,623			8,040			8,575			7,968		$	9,490		$	8,213		$	8,887		$	8,270
Average total vessels		38			45			39			51			41			33			37			35
Average stacked vessels		(1	)		(4	)		(2	)		(8	)		—			(1	)		—			(2	)
Average active vessels		37			41			37			43			41			32			37			33

Europe/Mediterranean fleet:
Utilization		68.3	%		45.1	%		59.0	%		53.1	%		82.8	%		64.7	%		80.3	%		54.5	%
Active utilization		90.5	%		95.1	%		87.9	%		89.5	%		88.1	%		90.6	%		89.7	%		86.5	%
Average vessel day rates		11,890			13,361			12,314			12,779		$	15,776		$	13,005		$	13,989		$	12,570
Average total vessels		28			32			29			36			27			29			28			30
Average stacked vessels		(7	)		(17	)		(10	)		(15	)		(2	)		(8	)		(3	)		(11	)
Average active vessels		21			15			19			21			25			21			25			19

West Africa fleet:
Utilization		46.7	%		30.6	%		39.6	%		37.5	%		72.7	%		38.1	%		68.7	%		36.1	%
Active utilization		71.3	%		66.3	%		64.4	%		62.7	%		82.9	%		61.8	%		81.3	%		60.8	%
Average vessel day rates		8,562			9,643			8,592			9,946		$	10,721		$	8,521		$	9,960		$	8,611
Average total vessels		55			58			57			62			67			57			60			58
Average stacked vessels		(19	)		(31	)		(22	)		(25	)		(8	)		(22	)		(9	)		(23	)
Average active vessels		36			27			35			37			59			35			51			35

Worldwide fleet:
Utilization		61.7	%		48.5	%		57.1	%		52.0	%		75.5	%		57.0	%		73.5	%		55.0	%
Active utilization		81.6	%		78.2	%		79.2	%		77.0	%		82.5	%		78.4	%		82.5	%		78.0	%
Average vessel day rates		10,288			10,503			10,243			10,510		$	12,544		$	10,435		$	11,738		$	10,219
Average total vessels		157			182			163			199			188			162			171			167
Average stacked vessels		(38	)		(69	)		(46	)		(65	)		(16	)		(44	)		(18	)		(49	)
Average active vessels		119			113			117			134			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 3214 (nine held for sale) and 6040 (14 held for sale) stacked vessels at ~~September~~June 30, ~~2021~~2022 and ~~2020,~~2021, respectively. The decrease in stacked vessels is ~~primarily~~ attributable to vessel sales ~~but we have~~and reactivation of vessels. We also ~~reactivated several~~reclassified three vessels in ~~2021.~~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 ~~and nine months~~ ended ~~September~~June 30, 2022 and 2021, were ~~$2.7~~$0.7 million and ~~$11.8~~$3.8 million, respectively. Total stacking costs included in vessel operating costs for the ~~three months and nine~~six months ended ~~September~~June 30, ~~2020~~2022 and 2021, were ~~$9.8~~$2.1 million and ~~$18.0~~$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 ~~nine~~six months of ~~2021~~2022 included nine vessels that were classified as assets held for ~~sale and ten vessels from our active fleet.~~sale.

As of ~~September~~June 30, ~~2021,~~2022, we had ~~$153.7~~$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 ~~operations~~U.S. operations. The SPO acquisition closed in ~~the U. S.~~April 2022 and decreased our net cash position by $28.5 million.

Our objective in financing our business is to maintain and preserve adequate financial resources and sufficient levels of liquidity. ~~We do not~~In 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 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.

As of September 30, 2021, we had $155.1 million of debt, net of discount, on our consolidated balance sheet. Of this amount, our Senior Secured Notes total $135.2 million, which is due in August 2022 with an expected refinance in November 2021. The Senior Secured Notes have a quarterly minimum trailing year interest coverage requirement, however compliance with this covenant has been waived through December 31, 2021. Minimum liquidity requirements and other covenants are set forth in the amended Indenture. In addition, we have ~~$23.5~~available a “shelf” registration under which we may offer and sell up to $300.0 million of ~~long-term~~any combination of common stock, debt securities, depository shares, preferred stock or warrants from time to time in ~~a subsidiary~~one or more classes or series or amounts, at prices and on terms that ~~is collateralized by certain~~we will determine at the time of the ~~subsidiary’s vessels. This debt has similar covenants as~~offering. We also have an “at-the-market” offering registered with the ~~Senior Secured Notes.~~

~~During the quarter,~~SEC under which we ~~reclassified the Senior Secured Notes to current portion~~may offer and sell shares of ~~long-term debt as the notes mature in August 2022. Our current Senior Secured Notes are expected to be redeemed with~~our common stock, having an aggregate offering proceeds of ~~our new Nordic Bond offering. On October 8, 2021, we announced~~up to $30.0 million from time to time through the ~~contemplated private offering of USD $175.0 million in 5-year senior secured bonds in~~agents acting as a sales agent or directly to the ~~Nordic bond market, subject~~agents acting as a principals. We expect to ~~market and other conditions (the Nordic Bond Offering). On October 15, 2021, we announced~~use the completion of pricing and terms of the Nordic Bond Offering. We anticipate that funding of the Nordic Bond Offering will occur on November 16, 2021, subject to customary closing conditions. The new bonds will mature in November 2026 and have a coupon rate of 8.5% per annum. The net proceeds from the ~~Nordic Bond Offering will be employed to repay~~sale of the ~~existing Senior Secured Notes and the Troms Offshore borrowings in full, including contractual make-whole premiums, with any remaining part thereof, applied~~securities covered by these offerings for general corporate ~~purposes.~~

~~We believe that the $153.7 million in cash on hand, plus cash generated from our operations and asset sales in 2021 and in the future will be sufficient to meet our obligations. The contemplated~~purposes, which may include repayment or refinancing of debt outstanding at September 30, 2021 as described above will improve our liquidity position and push our major debt maturities out for several years. Refer to Notes (9) and (16) of Notes to Consolidated Financial Statements included in Part I, Item 1 of this Quarterly Report on Form 10-Q for further details on our indebtedness.

We may from time to time seek to retire or purchase our outstanding debt through cash purchases and/or exchanges for equity securities, in open market purchases, privately negotiated transactions, public tenders or otherwise. Such repurchases or exchanges, if any, will depend on prevailing market conditions, our liquidity requirements, contractual restrictionsindebtedness, working capital, capital expenditures, investments, additional acquisitions and other ~~factors. The amounts involved may be material.~~business opportunities.

Net cash provided by (used in) operating activities for the ~~nine~~six months ended ~~September~~June 30, 2022 and 2021 ~~and 2020~~ was ~~$8.1~~$(33.2) million and ~~$1.8~~$10.6 million, respectively.

Net cash ~~provided by~~used in operations for the ~~nine~~six months ended ~~September~~June 30, ~~2021~~2022 reflects a net loss of ~~$91.6~~$37.3 million, which includes non-cash depreciation and amortization of ~~$86.3~~$58.4 million and net losses on asset dispositions of ~~$3.0~~$1.1 million. Combined changes in operating assets and liabilities ~~provided $19.6~~used $41.1 million in cash, and cash paid for deferred drydock and survey costs was ~~$17.4~~$31.1 million.

Net cash provided by operations for the ~~nine~~six months ended ~~September~~June 30, ~~2020~~2021 reflects a net loss of ~~$167.3~~$65.2 million, which includes non-cash depreciation and amortization of ~~$86.0 million, long-lived asset impairments of $67.6 million, an affiliate credit loss impairment of $53.6~~$58.3 million and ~~approximately $7.5 million of gains~~net losses on asset ~~sales. Cash paid for deferred drydocking and survey costs was $29.5 million, and combined~~dispositions of $2.9 million. Combined changes in operating assets and liabilities ~~used $9.6~~and in amounts due to/from affiliate provided $17.0 million in ~~cash.~~cash, and cash paid for deferred drydock and survey costs was $6.8 million.

Net cash provided by (used in) investing activities for the ~~nine~~six months ended ~~September~~June 30, 2022 and 2021, ~~and 2020,~~ was ~~$31.4~~$(26.7) million and ~~$26.8~~$27.7 million, respectively.

Net cash ~~provided by~~used in investing activities for the ~~nine~~six months ended ~~September~~June 30, ~~2021~~2022 reflects the payments of $29.5 million for the acquisitions of SPO and a 51% equity interest in Sonatide and the receipt of ~~$34.0~~$8.2 million primarily related to the sale of ~~17 vessels and recycle of two~~nine vessels. Additions to properties and equipment were comprised of approximately ~~$1.4~~$3.8 million in capitalized upgrades to existing vessels and equipment and ~~$1.2~~$1.6 million for other property and Information Technology equipment purchases and development work.

Net cash provided by investing activities for the ~~nine~~six months ended ~~September~~June 30, ~~2020~~2021 primarily reflects the receipt of ~~$31.5~~$29.6 million primarily related to the sale ~~or recycling~~ of 4713 vessels. Additions to properties and equipment were comprised of approximately ~~$2.8~~$1.1 million in capitalized upgrades to existing vessels and equipment and ~~$1.9~~$0.8 million for other property and IT equipment ~~purchases.~~ purchases and development work.

Net cash used in financing activities for the ~~nine~~six months ended ~~September~~June 30, 2022 and 2021 ~~and 2020~~ was ~~$41.0~~$2.5 million and ~~$34.2~~$39.6 million, respectively.

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

Net cash used in financing activities for the six months ended June 30, 2021 included $11.8 million of repurchases of the ~~Senior~~ Secured Notes in open market transactions, ~~$27.5~~$26.1 million of scheduled semiannual principal payments and prepayments on Troms offshore debt and $0.9 million of debt modification costs.

Net cash used in financing activities for the nine months ended September 30, 2020 included $26.2 million of repurchases of the Senior Secured Notes in open market transactions, $7.3 million of scheduled semiannual principal payments on Troms offshore debt and $0.7 million of taxes paid to related share-based compensation.

We did not have any material changes in our contractual obligations and commercial commitments since the end of fiscal year ~~2020.~~2021. Refer to Part II, Item 7 in our Annual Report on Form 10-K for the year ended December 31, ~~2020,~~2021, for information regarding our contractual obligations and other contingent commitments.

Our Annual Report on Form 10-K for the year ended December 31, ~~2020,~~2021, filed with the SEC on March ~~4, 2021,~~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, ~~2020,~~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 ~~September~~June 30, ~~2021~~2022 to the market risk disclosures contained in Item 7A in our Annual Report on Form 10-K for the year ended December 31, ~~2020.~~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 ~~September~~June 30, ~~2021.~~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 ~~September~~June 30, ~~2021,~~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, ~~and~~ in Item 1A of Part I of our Annual Report on Form 10-K for the year ended December 31, ~~2020,~~2021, filed with the SEC on March ~~4, 2021, as amended~~9, 2022, and in the Current Report on Form 8-K, filed with the SEC on April ~~30, 2021.~~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)
				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
	and Other			from
(In thousands)	Receivables			Affiliates
Balance at January 1, 2021	$	1,516		$	71,800
Current period provision for expected credit losses		707			(1,000	)
Write offs		(89	)		0
Other		0			(162	)
Balance at September 30, 2021	$	2,134		$	70,638

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

(In Thousands)	Three Months Ended
	June 30, 2022			June 30, 2021
Balance at March 31, 2022 and 2021	$	2,471		$	(875	)
Unrealized loss on note receivable		(846	)		0
Pension benefits recognized in OCI		138			(207	)
Balance at June 30, 2022 and 2021	$	1,763		$	(1,082	)

Total shares outstanding including warrants, restricted stock units and stock options	September 30, 2021		September 30, 2020		June 30, 2022		June 30, 2021
Common shares outstanding		41,277,377		40,460,982		42,029,882		41,000,575
New creditor warrants (strike price $0.001 per common share)		635,663		761,395
GulfMark creditor warrants (strike price $0.01 per common share)		565,155		930,027
New creditor warrants (strike price $0.001 per common share)						395,401		639,354
GulfMark creditor warrants (strike price $0.01 per common share)						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		1,447,957		797,330		1,627,083		1,623,635
Total		43,926,152		42,949,734		52,461,717		43,933,165

(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)

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 ~~September~~June 30, ~~2021~~2022 and December 31, ~~2020~~2021 the fair value (Level 2) of the Senior Secured Notes was ~~$136.4~~$178.7 million and ~~$141.4~~$177.6 million, respectively.
	(B)	The ~~$24.1~~$1.2 million restricted cash on the condensed consolidated balance sheet at ~~September~~June 30, ~~2021~~2022, represents ~~approximately 65% of net proceeds from asset dispositions since~~ the ~~date of the last tender offer and is restricted by the terms of the Indenture.~~
	~~(C)~~	~~During the~~ ~~nine~~ ~~months ended~~ ~~September 30, 2021~~~~, we repurchased $11.8 million of the Senior Secured Notes at a premium of $0.1 million in open market transactions.~~
	~~(D)~~	~~We pay principal and~~pro rata amount due for our next semiannual interest ~~on these notes semi-annually. As of~~ ~~September 30, 2021~~ ~~and~~ ~~December 31, 2020,~~ ~~the aggregate fair value (Level~~ 2~~) of the Troms Offshore borrowings was $23.6 million and $51.6 million, respectively. The weighted average interest rate of the Troms Offshore borrowings as of~~ ~~September 30, 2021~~ ~~was 5.0%.~~payment obligation.

	Lease
(In thousands)	Exit Costs			Total
Balance at December 31, 2020	$	3,335		$	3,335
General and administrative charges		163			163
Cash payments		(1,800	)		(1,800	)
Balance at September 30, 2021	$	1,698		$	1,698

(In Thousands, except number of vessels)													Three Months Ended
	Three Months Ended												Number of Vessels			June 30, 2022			Number of Vessels			June 30, 2021
(In thousands, except for number of vessels data)	Number of Vessels			September 30, 2021			Number of Vessels			September 30, 2020
Beginning balance		14		$	17,214			46		$	29,064			12		$	8,591			20		$	31,214
Additions		2			4,089			0			0			1			2,500			0			0
Sales		(1	)		(1,250	)		(22	)		(9,901	)		(4	)		(4,229	)		(5	)		(11,000	)
Transfers		(1	)		(250	)		0			0			0			0			(1	)		(3,000	)
Impairment		—			(1,912	)		—			0
Ending balance		14			17,891			24		$	19,163			9		$	6,862			14		$	17,214

	•	~~Planned capital and drydock expenditures tied to contracts referenced above have been temporarily delayed or cancelled.~~
	•	We have the ability to rapidly respond to contract cancellations and delays, and have removed the crews and shut down operations, depending on contract terms, on vessels associated with cancelled or delayed contracts. We continue to evaluate our general and administrative costs to reflect the current demand for our offshore support vessels.

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		~~Indenture~~Bond Terms for ~~8.00%~~8.5% Senior Secured Notes due 2022 among Tidewater Inc., each of the Guarantors party thereto, and Wilmington Trust, National Association, as Trustee and Collateral Agent dated as of July 31, 2017 (filed with the Commission as Exhibit 4.1 to the company’s current report on Form 8-K filed on July 31, 2017, File No. 1-6311).

~~4.2~~		~~Third Supplemental Indenture,~~2026, dated November ~~22, 2019,~~16, 2021, by and among Tidewater Inc.~~, the guarantors party thereto~~ and ~~Wilmington Trust, National Association,~~Nordic Trustee AS, as ~~trustee~~Bond Trustee and ~~collateral agent~~Security Agent (filed with the Commission as Exhibit 4.1 to the company’s current report on Form 8-K on November ~~26, 2019,~~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		~~Fourth Supplemental Indenture,~~Intercreditor Agreement, dated November ~~18, 2020,~~16, 2021, by and among Tidewater Inc., ~~the guarantors party thereto~~certain subsidiaries thereof, DNB Bank ASA, New York Branch, as Facility Agent, Nordic Trustee AS, as Security Trustee, and ~~Wilmington Trust, National Association, as trustee and collateral agent~~certain other institutions (filed with the Commission as Exhibit ~~4.1~~4.3 to the company’s current report on Form 8-K on November ~~23, 2020,~~17, 2021, File No. 1-6311).

4.4		~~Tax Benefits Preservation Plan by and between the Company and Computershare Trust Company, N.A.~~Guarantee Agreement, dated November 16, 2021, among Tidewater Inc., ~~a federally chartered trust company,~~Nordic Trustee AS as ~~Rights~~Security Agent, ~~dated as of April 13, 2020, which includes the Form of Certificate of Designations as Exhibit A, Form of Right Certificate as Exhibit B~~ and the ~~Summary of Rights to Purchase Preferred Shares as Exhibit C.~~original guarantors named therein (filed with the Commission as Exhibit ~~3.1~~4.4 to the company’s current report on Form 8-K ~~filed~~ on ~~April 14, 2020,~~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		Amendment and Restatement Agreement No. 4 to the Troms Facility Agreement, dated May 11, 2017 (filed with the Commission as Exhibit C to 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).

~~10.3~~		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~~
~~10.4~~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).

~~10.5~~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).

~~10.6~~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).

~~10.7~~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).

~~10.8~~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).

~~10.9~~10.8		~~Amended~~Registration Rights Agreement, dated as of April 22, 2022, by and ~~Restated 2021 Stock Incentive Plan~~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 ~~May 21, 2021,~~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: ~~November 9, 2021~~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)