1
INTERNATIONAL SHIPHOLDING CORPORATION
SUMMARY OF SELECTED CONSOLIDATED FINANCIAL DATA
The following summary of selected consolidated
financial data is not covered by the auditors' report
appearing elsewhere herein. However, in the opinion of
management the summary of selected consolidated
financial data includes all adjustments necessary for a
fair presentation of each of the years presented. This
summary should be read in conjunction with the
consolidated financial statements and the notes thereto
appearing elsewhere in this annual report.
(All Amounts in Thousands Except Share, Per Share Data and Ratios)
Year Ended December 31,
1993 1992 1991 1990 1989
_________ _________ __________ __________ ________
Revenues $341,651 $324,608 $328,429 $327,453 $268,955
Gross Voyage Profits $ 64,318 $ 57,581 $ 61,303 $ 61,485 $ 56,955
Income Before Extraordinary
Item and Cumulative
Effect $ 7,645 $ 6,499 $ 15,233 $ 15,065 $ 12,597
Extraordinary Item $ (1,716) -- -- -- --
Cumulative Effect of
Accounting Change -- $ (3,218) -- -- --
Net Income $ 5,929 $ 3,281 $ 15,233 $ 15,065 $ 12,597
Earnings Per Common and
Common Equivalent Shares:
Before Extraordinary Item
and Cumulative Effect $ 1.26 $ 0.96 $ 2.66 $ 2.62 $ 2.24
Extraordinary Item $ (0.33) -- -- -- --
Cumulative Effect of
Accounting Change -- $ (0.63) -- -- --
Net Income $ 0.93 $ 0.33 $ 2.66 $ 2.62 $ 2.24
Weighted Average of Common
and Common
Equivalent Shares 5,220,207 5,138,866 5,125,546 5,156,879 4,864,542
Total Assets $ 518,700 $ 519,963 $ 496,994 $ 473,582 $ 422,264
Long-Term Debt (including
Capital Lease
Obligations) $ 240,132 $ 231,148 $ 200,472 $ 208,048 $ 192,135
Redeemable Preferred Stock -- $ 13,548 $ 13,290 $ 13,034 $ 12,778
Common Stockholders'
Investment $ 134,497 $ 124,004 $ 123,408 $ 110,789 $ 99,631
Ratio of Long-Term Debt
and Capital Lease
Obligations to Common
Stockholders' Investment 1.79:1 1.86:1 1.62:1 1.88:1 1.93:1
Working Capital $ 17,649 $ 7,920 $ 28,327 $ 11,933 $ 19,605
Cash Dividends Per Common
Share $ 0.20 $ 0.20 $ 0.20 $ 0.20 $ 0.20
2
MANAGEMENT'S DISCUSSION AND ANALYSIS OF
FINANCIAL CONDITION AND RESULTS OF OPERATIONS
The Company's vessels are operated under a variety
of charters and contracts. The nature of these
arrangements is such that, without a material variation
in gross voyage profits (total revenues less voyage
expenses and vessel and barge depreciation), the
revenues and expenses attributable to a vessel deployed
under one type of charter or contract can differ
substantially from those attributable to the same
vessel if deployed under a different type of charter or
contract. Accordingly, depending on the mix of
charters or contracts in place during a particular
accounting period, the Company's revenues and expenses
can fluctuate substantially from one period to another
even though the number of vessels deployed, the number
of voyages completed, the amount of cargo carried and
the gross voyage profit derived from the vessels remain
relatively constant. As a result, fluctuations in
voyage revenues and expenses are not necessarily
indicative of trends in profitability, and management
believes that gross voyage profit is a more appropriate
measure of operating performance than revenues.
Accordingly, the discussion below addresses variations
in gross voyage profits rather than variations in
revenues.
RESULTS OF OPERATIONS
Year Ended December 31, 1993 Compared to Year Ended
December 31, 1992
GROSS VOYAGE PROFIT. Gross voyage profit
increased 11.7% to $64.3 million in 1993 as compared to
$57.6 million in 1992. Positively affecting 1993
results was the deployment of the Jeb Stuart on charter
to the Military Sealift Command ("MSC") beginning in
late 1992. The vessel was previously named the
Atlantic Forest and was deployed on less favorable
terms through May 1992 at which time it was taken out
of service for drydocking and prepositioning to prepare
for the MSC charter. Additionally, gross voyage profit
was favorably affected by an improved volume of
westbound cargo in the Company's foreign flag LASH
Trans-Atlantic liner service during 1993 as compared to
1992. Offsetting these positive results was time lost
to perform extended maintenance on one of the Company's
foreign flag bulk carriers which caused the vessel to
be out of service for 99 days, most of which occurred
during the third quarter of 1993.
Through mid 1993, the Company also operated a roll-
on/roll-off ("Ro/Ro") vessel, the Rover. The Rover had
been operated under a time charter to the MSC since
1984. Upon expiration of this charter in June 1993,
the vessel had reached the end of its economic useful
life and was sold for demolition for $1.9 million (as
compared to a net book value of $1.8 million). A
portion of the proceeds was used to repay the remaining
$1.0 million debt that was secured by a mortgage on the
Rover.
The Company currently charters nine vessels to the
MSC. During 1993, the MSC exercised the first of two
seventeen month option periods on three of these
vessels. These option periods extend until the second
half of 1994. Three vessels are currently operating
under their initial charter period with renewal options
exercisable by the MSC in April 1994, June 1994 and
March 1995. In 1993, the Company reached agreement
with MSC for three Ro/Ro vessels on long-term charter
to make reductions in the future charter hire payments
in consideration of fixing the period of these charters
for the full twenty-five years. The charters will now
terminate in the years 2009 and 2010.
Vessel and barge depreciation expense increased by
7.3% to $23.9 million during 1993 as compared to $22.3
million in 1992 primarily due to additions to the
Company's LASH barge fleet and capitalized costs
associated with the barge refurbishment program during
1992.
OTHER INCOME AND EXPENSES. Administrative and
general expenses increased 6.3% to $28.2 million during
1993 as compared to $26.5 million in 1992. This
increase resulted primarily from the expensing of
approximately $1.0 million of costs that related to a
proposed acquisition that was not consummated. Due to
the passage of time, the Company expensed the related
costs. Bonuses paid to shoreside employees were
higher in 1993 than in 1992. The increases were
partially offset by reduced costs in other areas
stemming from continuing cost reduction efforts
throughout the Company.
Interest expense decreased to $21.2 million in
1993 as compared to $21.7 million in 1992, primarily
because of lower interest rates on variable rate loans,
regularly scheduled debt payments of $36.9 million, and
prepayment of $58.9 million of debt during 1993 from
the proceeds of the Company's $100 million, 9% Senior
Unsecured Notes issued in July, 1993. This reduction
was partially offset by interest incurred on the $100
million Senior Notes.
The Company's share of losses from unconsolidated
entities increased from $1.4 million in 1992 to $2.3
million in 1993, primarily as a result of a weakened
market for the liquified petroleum gas carriers owned
and operated by A/S Havtor and A/S Havtor Management,
which are Norwegian companies in which the Company has
an interest. During the first quarter of 1993 the
Company reported an after tax loss of $1.5 million from
these interests. However, during the first quarter of
1993, the Company sold an 18.5% direct interest in A/S
Havtor for $7.6 million, of which $2.8 million was
received in cash and $4.8 million was received in the
form of a promissory note. The transaction reduced the
Company's direct interest in A/S Havtor to 14.8% and
resulted in a gain before taxes of $1.4 million. A
provision for doubtful accounts equal to the pre-tax
gain of $1.4 million was recorded in 1993, which will
have the effect of deferring recognition of the gain
until receipt of the proceeds from the promissory note,
which matures in mid-1996. Since the Company is no
longer represented on the board of directors of A/S
Havtor or A/S Havtor Management, has no substantive
control or input regarding their operations, and holds
direct and indirect ownership interest in each that are
less than 20%, the investments have been accounted for
commencing April 1, 1993 under the cost method of
accounting which permits recognition of income only
upon distribution of dividends or sale of its interest.
INCOME TAXES. During 1993 the Company provided
$6.6 million for federal income taxes at the statutory
rate of 35% as compared to a provision of $4.4 million
at the statutory rate of 34% during 1992. The Revenue
Reconciliation Act of 1993 provided a tax rate of 35%
on taxable income in excess of $10 million per year
beginning
3
January 1, 1993. The higher tax rate resulted in an
adjustment of $764,000 as required by FASB Statement
No. 109 for tax provisions made prior to 1993. The
Company's deferred tax liabilities were increased
accordingly in the balance sheet. Income of
unconsolidated entities is shown net of applicable
taxes.
EXTRAORDINARY LOSS ON EARLY EXTINGUISHMENT OF DEBT.
During 1993 the Company recognized an
extraordinary loss of $1.7 million, net of taxes,
resulting from prepayment penalties and the write-off
of deferred loan costs associated with the early
payment of high interest debt and the redemption of
preferred stock from the proceeds of the Company's $100
million Senior Notes issued in July 1993. See
Liquidity and Capital Resources.
Year Ended December 31, 1992 Compared to Year Ended
December 31, 1991
GROSS VOYAGE PROFIT. Gross voyage profit
decreased 6.1% to $57.6 million in 1992 as compared to
$61.3 million in 1991. Results in 1992 compared
unfavorably with 1991 primarily due to the
participation of most of the Company's U.S. flag fleet
in Operation Desert Shield/Desert Storm early in 1991.
Additionally, the gross voyage profit of the Company's
foreign flag LASH vessels was below the 1991 level
primarily due to the reduced volume of westbound
cargoes and, to a lesser extent, a softening of freight
rates. Results in 1992 were also affected by the loss
of approximately 340 days, primarily due to vessel
drydocking and positioning for charters. This compared
favorably with approximately 490 drydocking and
positioning days in 1991. The increased out of service
days for drydocking and positioning in 1991 and 1992
resulted primarily from the preparation for certain MSC
charters.
During 1989, 1990, 1991 and 1992, the Company
invested an aggregate of $96.9 million in extensive
LASH barge refurbishment and LASH vessel life extension
programs. The increase in depreciation expense that
resulted from this additional capital investment was
more than offset in 1992 by the reduction in
depreciation expense caused by an extension of the
useful lives of the refurbished vessels and barges.
Accordingly, vessel and barge depreciation expense
declined by 6.2% to $22.3 million in 1992 as compared
to $23.8 million in 1991.
OTHER INCOME AND EXPENSES. Administrative and
general expense decreased 4.7% to $26.5 million in 1992
as compared to $27.8 million in 1991 primarily due to
overall cost reduction efforts, including certain
salary and wage limitations that were placed in force
in 1992.
Interest expense increased to $21.7 million in
1992 from $20.6 million in 1991, primarily reflecting
additional financing associated with the Company's LASH
barge refurbishment and vessel life extension programs.
This increase was partially offset by a reduction in
interest rates on variable rate loans and reduced
balances on other outstanding debt.
During 1992, the Company received and recorded as
income approximately $2.1 million from the settlement
of Waterman's 1981 transfer of investment tax credit
benefits.
During 1992, the Company's investment in
unconsolidated entities reflected a net loss of $1.4
million as compared to net income of $4.7 million in
1991. This reduction primarily reflected a weakened
market for the liquified petroleum gas carriers
operated by A/S Havtor and related entities. As
described above, the Company reduced its interest in
A/S Havtor during the first quarter of 1993, and,
commencing April 1, 1993, its investment in A/S Havtor
has been accounted for using the cost method.
INCOME TAXES. During 1992, the Company provided
$4.4 million for federal income taxes at the statutory
rate of 34%, as compared to a provision of $4.8 million
at the same rate in 1991. Income of unconsolidated
entities is shown net of applicable taxes.
CUMULATIVE EFFECT OF ACCOUNTING CHANGE. In
December 1990, the Financial Accounting Standards Board
issued Statement No. 106, "Employers' Accounting for
Postretirement Benefits Other Than Pensions," which
required that the expected cost of postretirement
benefits be charged to expense during the years in
which the employees render service. The Company
elected early implementation, effective January 1,
1992, which resulted in a cumulative adjustment for
years prior to 1992 of $3.2 million, net of taxes, and
was reported as a cumulative effect of a change in
accounting principle in the first quarter of 1992.
OPERATING DIFFERENTIAL SUBSIDY
For the years ended December 31, 1993, 1992 and
1991, the Company received aggregate operating
differential subsidy payments of $19.3 million, $19.7
million and $19.2 million, respectively. The Company's
subsidy agreement expires on December 31, 1996, and all
other subsidy agreements with U.S. flag liner operators
expire on December 31, 1997. It is not clear at this
point whether the subsidies will be renewed. If the
subsidy program is not renewed the Company will be
required to consider various options for its U. S. Flag
vessels receiving Operating Differential Subsidy,
including vessel modifications that would increase fuel
efficiency, reduction of crew size and wages to more
closely approximate those of non-subsidized vessels,
reduction of other operating expenses, and/or transfer
to foreign flag operations with foreign crews.
LIQUIDITY AND CAPITAL RESOURCES
The following discussion should be read in
conjunction with the more detailed Consolidated Balance
Sheets and Consolidated Statements of Cash Flows
included elsewhere herein as part of the Company's
Consolidated Financial Statements.
The Company's working capital increased from $7.9
million at December 31, 1992 to $17.6 million at
December 31, 1993, after provision for current
maturities of long-term debt of $25.9 million and
capital lease obligations of $5.0 million. Cash and
cash equivalents increased during 1993 by $1.9 million
to a total of $32.8 million. Accounts payable and
accrued expenses increased $10.5 million or 26.9%.
Approximately $6.4 million of that increase resulted
from timing differences associated with the status of
various voyages at the end of the respective periods.
Voyage expenses increase as a voyage progresses,
thereby increasing accrued liabilities while decreasing
billings in excess of income earned and expenses
incurred.
Positive cash flows were achieved from operating
activities during 1993 in the amount of $55.1 million.
The major source of cash from operations was net
income, adjusted for non-cash provisions such as
depreciation, amortization and deferred income taxes.
Net cash used for investing activities amounted to
$34.3 million during 1993.
4
Capital investments included $6.2 million for the
refurbishment of LASH barges, $1.6 million for the
purchase of river barges, $1.7 million for construction
costs of a molten sulphur carrier, and $2.5 million in
other miscellaneous items. Also, the Company added
$24.3 million of deferred charge items including $18.9
million for drydocking and prepositioning and $3.5
million incurred in transaction expenses associated
with the issue of $100 million Senior Notes in July,
1993. Net cash received from investments in and
advances to unconsolidated entities of $377,000
consisted primarily of cash received from the
aforementioned sale of an 18.5% interest in A/S Havtor
and cash distributions from the operations of the two
PROBO vessels, net of cash used to acquire an
additional 11% interest in the foreign entities that
own and operate the two PROBO vessels. See Notes K and
L of the Notes to the Company's Consolidated Financial
Statements included elsewhere herein. Cash in the
amount of $1.6 million was also utilized in 1993 for
the purchase of the remaining 50% ownership interest in
a company which operates a LASH barge intermodal
terminal located in Memphis, Tennessee. This increased
the Company's interest from 50% to 100%. Partially
offsetting these uses was $3.2 million representing the
proceeds from the sale of the Rover and some surplus
LASH barges.
Net cash used for financing activities during 1993
totalled $18.9 million. Proceeds from the issuance of
debt obligations of $146.7 million included $1.2
million received from a medium-term loan associated
with the purchase of 39 river barges, $7.0 million
received from a medium-term loan associated with the
barge refurbishment program, $100 million received from
the issuance of the 9% Senior Notes and $30 million
drawn under lines of credit. In late 1992 the Company
received $8.5 million from short-term financing for the
construction of a sulphur carrier vessel. In early
1993 this amount was repaid and $8.5 million was drawn
under an interim financing agreement. Proceeds
totalling $4.3 million were also received from the
issuance of 427,500 shares of common stock upon the
exercise of warrants previously granted to certain
holders of the Company's preferred stock. The exercise
price for these warrants was $10.12 per share. Cash
used for financing activities included regularly
scheduled principal payments of $36.9 million for debt
and capital lease obligations, prepayment of $63.8
million in term debt and repayment of $45 million drawn
under lines of credit. Additionally $1.9 million was
used to meet preferred and common stock dividend
requirements, and $13.8 million was used to redeem all
of the Company's outstanding preferred stock.
On July 9, 1993 the Company issued $100 million of
9% Senior Notes due 2003. The proceeds of this
unsecured financing were used to redeem $12.4 million
of 14% senior subordinated notes, redeem $13.8 million
of outstanding preferred stock, and repay $46.5 million
of floating rate bank debt and certain fixed rate debt
in order to more evenly distribute future amortization
requirements. The Company also placed $5.0 million in
escrow for future payments on a fixed rate note.
Additionally $6.6 million was used to pay accrued
interest and transaction expenses, including prepayment
penalties. The balance of the proceeds will be used to
finance a portion of the new molten sulphur carrier and
other potential investments.
The Company's newbuilding molten sulphur carrier,
Hull No. 294, is scheduled for delivery in late summer
1994. Through 1993 the Company had incurred $13.9
million of the estimated delivered cost of
approximately $58 million. Of these costs, $1.7
million was paid during 1993 and the balance was paid
in 1992. Capitalized interest related to this
construction totalled $918,000 in 1993. Interim
construction financing on a variable rate basis has
been arranged through a pool of commercial banks and is
expected to be repaid with permanent financing after
construction is completed. At the Company's option,
the construction loan can be converted to a three-year
term loan with the same banks when the vessel commences
operation. Draws on the construction loan total $8.7
million with additional draws anticipated in early
1994. During 1993 the Company received a commitment
for a Title XI guarantee to cover the permanent
financing of this vessel although no decision has been
made yet to use this type of financing.
The Company reacquired, as of January 1, 1993, an
11% interest in the foreign entities that own and
operate the Company's two PROBO vessels, which had been
sold in January 1991. The additional 11% was acquired
for $6.4 million, of which $3.5 million was a cash
payment and $2.9 million was paid through liquidation
of notes receivable due from the sellers. The
acquisition increased the Company's interest in such
foreign entities to 50%. As of January 1, 1993, the
Company also sold an 18.5% interest in A/S Havtor as
further discussed in the Results of Operations.
In the third quarter of 1988, the Board of
Directors declared a quarterly dividend of $.05 per
share and has continued quarterly dividends in the same
amount for each quarterly period through the first
quarter 1994. The Board has expressed its intent to
continue to declare similar quarterly dividends in the
future, subject to the ability of the Company's
operating subsidiaries to continue to achieve
satisfactory earnings. Dividends on common stock at
the current rate of $.05 per share amount to an annual
cash requirement of approximately $1.1 million.
Management believes that normal operations will
provide sufficient working capital and cash flows to
meet debt service and dividend requirements during the
foreseeable future.
During 1992, the Financial Accounting Standards
Board issued Statement No. 109, "Accounting for Income
Taxes". This statement was adopted effective January
1, 1993 and had no impact on the Company's financial
position or results of operations primarily because the
Company had adopted FASB Statement No. 96 during 1988.
The Financial Accounting Standards Board also
issued Statement No. 112, "Employers' Accounting for
Postemployment Benefits", during 1992. Adoption of the
statement which is required in 1994, is not anticipated
to have a material effect on the Company's financial
position or results of operations.
To meet short-term requirements when fluctuations
occur in working capital, the Company has available
three lines of credit totalling $15 million, which were
fully drawn on an interim basis at December 31, 1992.
This amount was repaid in early 1993. At December 31,
1993, the lines were undrawn.
The Company has not been notified that it is a
potentially responsible party in connection with any
environmental matters.
5
INTERNATIONAL SHIPHOLDING CORPORATION
CONSOLIDATED BALANCE SHEETS
December 31, December 31,
1993 1992
ASSETS ___________ ___________
(All Amounts In Thousands)
Current Assets:
Cash and Cash Equivalents $ 32,770 $ 30,879
Accounts Receivable, Net
of Allowance for Doubtful
Accounts of $470 and $475
in 1993 and 1992, Respectively:
Traffic 28,303 28,519
Agents' 8,346 7,708
Claims and Other 9,485 8,349
Net Investment in Direct
Financing Leases 2,257 2,315
Current Deferred Income Taxes 1,955 --
Other Current Assets 6,666 3,258
Material and Supplies
Inventory, At Cost 7,853 7,625
________ _______
Total Current Assets 97,635 88,653
________ _______
Investments In and Advances
to Unconsolidated Entities 30,367 34,213
________ _______
Net Investment in Direct
Financing Leases 28,775 31,031
________ _______
Vessels, Property and Other
Equipment, At Cost:
Vessels and Barges 432,429 433,617
Other Marine Equipment 3,842 4,133
Terminal Facilities 17,521 13,221
Land 2,317 2,528
Furniture and Equipment 9,676 7,861
________ ________
465,785 461,360
Less - Accumulated Depreciation (189,924) (177,455)
________ _______
275,861 283,905
________ _______
Other Assets:
Deferred Charges in Process of
Amortization 41,992 36,224
Acquired Contract Costs,
Net of Accumulated
Amortization of $ 12,122
and $9,559 in 1993 and
1992, Respectively 26,781 29,344
Due from Related Parties, Net of
Allowance for Doubtful Accounts
of $1,385 and $ 0 in 1993
and 1992, Respectively 4,360 305
Other 12,929 16,288
________ _______
86,062 82,161
________ _______
$518,700 $519,963
======== ========
[FN]
The accompanying notes are an integral part of these statements.
6
December 31, December 31,
LIABILITIES AND STOCKHOLERS' 1993 1992
INVESTMENT ___________ ___________
(All Amounts in Thousands Except Per Share Data)
Current Liabilities:
Current Maturities of
Long-Term Debt $ 25,879 $ 39,865
Current Maturities of
Capital Lease Obligations and
Redeemable Preferred Stock 5,000 6,024
Accounts Payable and
Accrued Liabilities 49,447 38,953
Current Deferred Income Tax
Liability -- 2,235
Current Liabilities to
be Refinanced (340) (6,344)
________ ________
Total Current Liabilities 79,986 80,733
________ ________
Current Liabilities to
be Refinanced 340 6,344
________ ________
Billings in Excess of Income
Earned and Expenses Incurred 4,133 10,564
________ ________
Long-Term Capital Lease
Obligations, Less Current
Maturities 27,020 32,280
________ ________
Long-Term Debt, Less Current
Maturities 213,112 198,868
________ ________
Reserves and Deferred Credits:
Deferred Income Taxes 35,613 24,057
Claims and Other 23,999 31,315
________ ________
59,612 55,372
________ ________
Commitments and Contingencies
Cumulative Redeemable Preferred
Stock, Less Current Maturities and
Excess of Redemption Value Over Fair
Value _ 11,798
________ ________
Stockholders' Investment:
Common Stock, $1.00 Par
Value, 10,000,000 Shares
Authorized, 5,405,366 and
4,977,866 Shares Issued at
December 31, 1993 and 1992,
Respectively 5,405 4,978
Additional Paid-in Capital 54,450 48,216
Retained Earnings 75,775 71,943
Less - 58,755 Shares of
Common Stock in Treasury,at
cost, at December 31, 1993
and 1992 (1,133) (1,133)
________ ________
134,497 124,004
________ ________
$518,700 $519,963
======== ========
[FN]
The accompanying notes are an integral part of these statements.
7
INTERNATIONAL SHIPHOLDING CORPORATION
CONSOLIDATED STATEMENTS OF INCOME
(Amounts in Thousands Except Per Share Data)
Year Ended December 31,
1993 1992 1991
_________ _________ _________
Revenues $322,313 $304,872 $309,270
Operating Differential Subsidy 19,338 19,736 19,159
_________ _________ _________
341,651 324,608 328,429
_________ _________ _________
Operating Expenses:
Voyage Expenses 253,386 244,711 243,344
Vessel and Barge Depreciation 23,947 22,316 23,782
_________ _________ _________
Gross Voyage Profit 64,318 57,581 61,303
Administrative and General
Expenses 28,206 26,540 27,846
Gain(Loss) on Sale of Assets 374 (106) --
_________ _________ _________
Operating Income 36,486 30,935 33,457
_________ _________ _________
Interest:
Interest Expense 21,245 21,679 20,563
Investment Income (1,748) (1,135) (2,062)
_________ _________ _________
19,497 20,544 18,501
_________ _________ _________
Other Income -- 2,059 --
_________ _________ _________
Unconsolidated Entities (Net
of Applicable Taxes):
Equity in Net Income (Loss)
of Unconsolidated Entities (2,289) (1,421) 4,697
Equity in Gain on Sale of
Vessel -- -- 806
Gain on Sale of Equity
Interests 900 -- --
Provision for Doubtful Accounts (900) -- --
_________ _________ _________
(2,289) (1,421) 5,503
_________ _________ _________
Income Before Provision for
Income Taxes, Extraordinary
Item and Cumulative Effect of
Accounting Change 14,700 11,029 20,459
_________ _________ _________
Provision for Income Taxes:
Current 714 2,841 3,004
Deferred 5,851 1,562 1,822
State 490 127 400
_________ ________ _________
7,055 4,530 5,226
_________ _________ _________
Income Before Extraordinary
Item and Cumulative Effect of
Accounting Change 7,645 6,499 15,233
_________ _________ _________
Extraordinary Loss on Early
Extinguishment of Debt (Net
of Income Tax Benefit of $924) (1,716) -- --
Cumulative Effect of Accounting
Change (Net of Income Tax
Benefit of $1,657) -- (3,218) --
_________ _________ _________
Net Income $ 5,929 $ 3,281 $ 15,233
Less:
Preferred Stock Dividends 868 1,444 1,440
Accretion of Discount on
Preferred Stock 202 257 257
_________ _________ _________
Net Income Applicable to
Common and Common Equivalent
Shares $ 4,859 $ 1,580 $ 13,536
======= ======== ========
Earnings Per Share:
Income Before Extraordinary
Loss and Cumulative Effect of
Accounting Change $ 1.26 $ .96 $ 2.66
Extraordinary Loss $ (0.33) $ -- $ --
Cumulative Effect of
Accounting Change $ -- $ (.63) $ --
-------- -------- --------
Net Income $ 0.93 $ 0.33 $ 2.66
======== ======== ========
[FN]
The accompanying notes are an integral part of these statements.
8
INTERNATIONAL SHIPHOLDING CORPORATION
CONSOLIDATED STATEMENTS OF CHANGES IN STOCKHOLDERS'INVESTMENT
Additional
Common Paid-In Retained Treasury
(All Amounts in Thousands) Stock Capital Earnings Stock Total
_________ _________ ________ ________ _______
Balance at
December 31, 1990 $ 4,978 $48,216 $58,795 $(1,200) $110,789
Net Income for Year
Ended December 31, 1991 -- -- 15,233 -- 15,233
Preferred Stock Dividends -- -- (1,440) -- (1,440)
Accretion of Discount on
Preferred Stock -- -- (257) -- (257)
Cash Dividends -- -- (984) -- (984)
Distribution of
Treasury Stock -- -- -- 67 67
_______ _______ _______ ________ ________
Balance at
December 31, 1991 $ 4,978 $48,216 $71,347 $(1,133) $123,408
Net Income for Year
Ended December 31, 1992 -- -- 3,281 -- 3,281
Preferred Stock Dividends -- -- (1,444) -- (1,444)
Accretion of Discount on
Preferred Stock -- -- (257) -- (257)
Cash Dividends -- -- (984) -- (984) (984)
_______ _______ _______ ________ ________
Balance at
December 31, 1992 $ 4,978 $48,216 $71,943 $(1,133) $124,004
Net Income for Year
Ended December 31, 1993 -- -- 5,929 -- 5,929
Preferred Stock Dividends -- -- (868) -- (868)
Accretion of Discount on
Preferred Stock -- -- (202) -- (202)
Cash Dividends -- -- (1,027) -- (1,027)
Issuance of Stock, 427,500
Shares Pursuant to
Exercise of Warrants 427 6,234 -- -- 6,661
_______ _______ _______ ________ ________
Balance at
December 31,1993 $ 5,405 $54,450 $75,775 $(1,133) $134,497
======= ======= ======= ======== ========
[FN]
The accompanying notes are an integral part of these statements.
9
INTERNATIONAL SHIPHOLDING CORPORATION
CONSOLIDATED STATEMENTS OF CASH FLOW
Year Ended December 31,
1993 1992 1991
_______ ________ ________
(All Amounts in Thousands)
Cash Flows from Operating
Activities:
Net Income $ 5,929 $ 3,281 $ 15,233
Adjustment to Reconcile Net
Income to Net Cash Provided by
Operating Activities:
Depreciation 24,895 23,172 24,679
Amortization of Deferred
Charges and Other Assets 19,785 19,043 15,346
Provision for Deferred
Income Taxes 5,851 1,562 1,822
Extraordinary Loss 1,716 -- --
Cumulative Effect of
Accounting Change -- 3,218 --
Equity in Unconsolidated
Entities 2,289 1,421 (4,697)
(Gain) Loss on Sale of
Vessels and Other Property (374) 106 (1,153)
Changes in:
Reserve for Claims and
Other Deferred Credits (5,926) (4,919) 2,948
Net Investment in Direct
Financing Leases 2,314 2,140 2,350
Unearned Income (6,431) 6,339 (1,143)
Other Assets 3,267 1,702 (2,313)
Accounts Receivable (534) (1,673) 3,470
Inventories and Other
Current Assets (1,551) 1,160 (25)
Accounts Payable and
Accrued Liabilities 3,855 (2,293) (12,533)
_________ _________ _________
Net Cash Provided by
Operating Activities 55,085 54,259 43,984
_________ _________ _________
Cash Flows from Investing
Activities:
Purchase of Vessels and
Other Property (12,044) (60,963) (31,484)
Additions to Deferred Charges (24,251) (23,614) (23,795)
Proceeds from Sale of Vessels
and Other Property 3,201 1,717 464
Investment in and Advances to
Unconsolidated Entities 377 (1,857) 5,977
Other Investing Activities -- -- (14)
Purchase of LITCO (1,606) -- --
_________ _________ _________
Net Cash Used by
Investing Activities (34,323) (84,717) (48,852)
_________ _________ _________
Cash Flows from Financing
Activities:
Proceeds from Issuance of
Debt and Capital Lease
Obligations 146,748 113,540 48,189
Reduction of Debt and
Capital Lease Obligations (154,224) (87,612) (35,946)
Redemption of Preferred Stock (13,750) -- --
Preferred and Common Stock
Dividends Paid (1,895) (2,428) (2,422)
Proceeds from Issuance of
Common Stock 4,250 -- --
_________ _________ _________
Net Cash (Used in) Provided by
Financing Activities (18,871) 23,500 9,821
_________ _________ _________
Net Increase (Decrease) in
Cash and Cash Equivalents 1,891 (6,958) 4,953
Cash and Cash Equivalents at
Beginning of Year 30,879 37,837 32,884
_________ _________ _________
Cash and Cash Equivalents at
End of Year $ 32,770 $ 30,879 $ 37,837
========= ========= =========
[FN]
The accompanying notes are an integral part of these statements.
10
NOTE A - SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES
Basis of Presentation
__________________
The accompanying financial statements include the
accounts of International Shipholding Corporation and
its consolidated subsidiaries (the Company). All
significant intercompany accounts and transactions have
been eliminated.
The Company uses the cost method to account for
investments in entities in which it holds less than a
20% voting interest and in which the Company cannot
exercise significant influence over operating and
financial activities. The Company uses the equity
method to account for investments in entities in which
it holds a 20% to 50% voting interest.
Certain reclassifications have been made to the
prior period financial information in order to conform
to current year presentation.
Voyage Accounting
________________
Revenues and expenses relating to voyages are
recorded on the percentage-of-completion method, except
that provisions for loss voyages are recorded when
contracts for the voyages are fixed or when losses
become apparent for voyages in progress.
Vessels and Other Property
_______________________
Costs of all major property additions and
betterments are capitalized. Ordinary maintenance and
repair costs are expensed as incurred. Interest and
finance costs relating to vessels, barges and other
equipment under construction are capitalized to
properly reflect the cost of assets acquired. No
interest was capitalized in 1991. Capitalized interest
totaled $918,000 and $136,000 for the years ended
December 31, 1993, and 1992, respectively.
Assets under capital leases are recorded on the
balance sheet under the caption Vessels, Property and
Other Equipment (See Note G).
For financial reporting purposes, vessels are
generally depreciated over their estimated useful life
of 25 years from construction using the straight-line
method. As a result of major capital improvements
during 1990, 1991 and early 1992, the useful lives of
the Company's LASH vessels have been extended from 25
to 30 years. The two pure car carriers are being
depreciated over estimated useful lives of 20 years.
The coal terminal is being depreciated over 22 years
and the LITCO terminal is being depreciated over 11
years. Other marine equipment is being depreciated
predominantly over a four year period.
The Company groups all LASH barges into pools with
estimated useful lives corresponding to the remaining
useful lives of the vessels with which they are
utilized. Major barge refurbishments are capitalized
and included in the aforementioned group of barge
pools. The estimated useful lives of the pools have
been extended through 2003 in accordance with the
extension of the vessel lives. The Company refurbished
a major portion of these barges during 1990 through
1992 to allow utilization through 2003.
From time to time, the Company disposes of barges
in the ordinary course of business. In these cases,
proceeds from the disposition are credited to the
remaining net book value of the respective pool and
future depreciation charges are adjusted accordingly.
Financial Instruments
__________________
A significant portion of the Company's traffic
receivables are due from the United States Government
arising primarily from contracts with the U.S. Military
Sealift Command (See Note I) and transportation of
government sponsored cargo. There are no other
concentrations of receivables from customers or
geographic regions that exceed 10% of stockholders'
investment at December 31, 1993 or 1992.
During 1993 the Company entered into interest rate
conversion agreements with two commercial banks. The
floating rate payor is the Company, and the commercial
banks are the fixed rate payors. The floating rate and
fixed rates at December 31, 1993 were 3.5% and 4.72%,
respectively. The contract amounts totaled
$100,000,000 at December 31, 1993 and will expire in
August 1996. The Company recognized $ 475,000 of
interest income associated with these agreements during
1993.
Income Taxes
____________
Deferred income taxes are provided on items of
income and expense which affect taxable income in one
period and financial income in another.
Certain foreign operations are not subject to
income taxation under pertinent provisions of the laws
of the country of incorporation or operation. However,
pursuant to existing U.S. Tax Laws, earnings from
certain foreign operations are subject to U.S. income
taxes (See Note D).
Foreign Currency Translation
________________________
All exchange adjustments are charged or credited
to income in the year incurred. Exchange losses of
$359,000, $35,000, and $466,000 were recognized for the
years ended December 31, 1993, 1992 and 1991,
respectively.
Dividend Policy
_____________
The Board of Directors declared and paid dividends
of $.05 per share for each quarter in 1993, 1992 and
1991. Subsequent to year end a dividend of $.05 per
common share was declared to be paid in the first
quarter of 1994. The payment of dividends is subject
to restrictions set forth in certain of the Company's
debt instruments. The Company paid dividends on its
common stock in the amount of $1,027,000 in 1993 and
$984,000 during both 1992 and 1991. Such amounts did
not exceed restrictions set forth in these agreements
or its other debt instruments.
Net Income per Common Share
___________________________
Primary earnings per common share are based on the
weighted average number of shares outstanding during
the period after consideration of the dilutive effect
of stock warrants based on the average market price of
common stock for the period. The primary weighted
average number of common shares outstanding were
5,220,207, 5,138,866, and 5,125,546 for the years ended
December 31, 1993, 1992 and 1991, respectively.
11
Operating Differential Subsidy Agreements
____________________________________
The Company operates a fleet of four U.S. Flag
vessels under an operating differential subsidy ("ODS")
agreement with the U.S. Maritime Administration
("MarAd"), an agency of the Department of
Transportation ("DOT") under Title VI of the Merchant
Marine Act of 1936, as amended. Under this agreement,
MarAd agrees to pay the excess of certain vessel
expenses over comparable vessel expenses of principal
foreign competitors in each respective trade route
through the scheduled termination date of December 31,
1996. These vessels are employed in a liner service
between ports on the U.S. Gulf/U.S. Atlantic Coast and
South Asia (Trade Routes 18 and 17).
Traffic accounts receivable include $3,486,000 and
$3,424,000 due from MarAd under these ODS agreements at
December 31, 1993 and 1992, respectively. Subsidy
billings are based on rates furnished by MarAd.
Self-Retention Insurance
____________________
Effective December 1, 1993, the Company became
self-insured for most Personal Injury and Cargo claims
under $ 1,000,000: and for Hull claims under $
2,500,000. The Company maintains insurance for claims
over the above amounts and maintains Stop Loss
insurance to cover claims below $ 1,000,000 and $
2,500,000. Under the Stop Loss insurance, the Company
is responsible for all claims under $ 1,000,000 and $
2,500,000 until the total amount of claims between
primary deductibles and the above amounts reach $
10,000,000 in the aggregate per year. Primary
deductibles are $25,000 for Hull, Personal Injury and
Cargo, and $1,000 for LASH barges. After the Company
has retained $10,000,000 in the aggregate, all
additional claims are recoverable from underwriters.
From February 20, 1992 until December 1, 1993, the
Company was self-insured for most personal injury and
cargo claims under $250,000. Provisions for losses are
recorded based on the Company's estimate of the
eventual settlement costs.
NOTE B - LONG-TERM DEBT
(All Amounts in Thousands)
December 31, Balance at December 31,
Description 1993 1992 Due 1993 1992
___________ ____ ____ ___ ____ ____
Unsecured Senior Notes -
Fixed Rate 9.00% -- 2003 $100,000 --
Unsecured Subordinated
Debt - Fixed Rate -- 14.00% 1997 -- $ 15,500
Fixed Rate Notes
Payable 8.25-10.50% 8.25-10.50% 1999-2002 82,374 80,915
Variable Rate Notes
Payable 4.4946-7.57% 4.41-10.0% 1994-1998 42,739 108,113
U.S. Government Guaranteed
Ship Financing Notes
and Bonds - Fixed Rate 6.58-7.50% 6.58-9.15% 2000 13,878 34,205
________ ________
238,991 238,733
Less Current Maturities (25,879) (39,865)
________ ________
$213,112 $198,868
======== ========
The aggregate principal payments required for each
of the next five years are $25,879,000 in 1994,
$23,545,000 in 1995, $33,199,000 in 1996, $18,537,000
in 1997, and $17,056,000 in 1998.
Certain of the vessels and barges owned by the
Company are mortgaged under debt agreements.
Additional collateral includes a security interest in
certain operating contracts and receivables. Most of
these agreements, among other things, impose minimum
working capital and net worth requirements, as defined,
impose restrictions on the payment of dividends (see
Note A), and prohibit the Company from incurring,
without prior written consent, additional debt or lease
obligations, except as defined. The Company has
consistently met the minimum working capital and net
worth requirements during the periods covered by the
agreements and is in compliance with these requirements
as of December 31, 1993.
Under the most restrictive of its credit
agreements, the Company cannot declare or pay dividends
unless (1) the total of (a) all dividends paid,
distributions on or other payments made with respect to
the Company's capital stock during the period beginning
October 1, 1989 and ending on the date of dividend
declaration or other payment and (b) all investments
other than Qualified Investments (as defined) of the
Company and certain designated subsidiaries will not
exceed the sum of $3,000,000 plus 50% (or, in case of a
loss, minus 100%) of the Company's consolidated net
income during the period described above plus the net
cash proceeds received from the issuance of common
stock by the Company during the above period, and (2)
no default or event of default has occurred.
Certain loan agreements also restrict the ability
of the Company's subsidiaries to make dividend
payments, loans or advances, the most restrictive of
which contain covenants that restrict payments of
dividends, loans or advances to the Company from
Central Gulf Lines, Inc. and Waterman Steamship
Corporation unless certain financial ratios are
maintained. As long as those ratios are maintained,
there is no restriction on loans or advances to the
Company from those two subsidiaries; however, dividends
generally are restricted to 40% of the most recent four
quarters' net income. Further, Sulphur Carriers, Inc.
is prohibited under a credit agreement from making any
loans or advances to ISC.
The amounts of restricted assets for unconsolidated
and consolidated subsidiaries as of December 31, were
as follows:
(In Thousands)
1993 1992
__________ _________
Central Gulf Lines, Inc. $ 49,701 $ 52,770
Waterman Steamship Corporation 53,345 53,140
New Combo, Inc. 313 839
Allied Ocean Carriers, Inc. 837 570
Sulphur Carriers, Inc. 5,965 287
_________ _________
Total restricted net assets $ 110,161 $ 107,606
========= =========
12
On July 9, 1993 the Company issued $100 million of
9% Unsecured Senior Subordinated Notes due 2003. The
proceeds of this financing have been used to redeem
$12.4 million of 14% senior subordinated notes, redeem
$13.8 million of outstanding preferred stock, and repay
$46.5 million of floating rate bank debt under which
certain vessels and barges were previously mortgaged.
Additionally, $6.6 million has been used to pay accrued
interest and transaction expenses including prepayment
penalties. The transaction expenses were capitalized
and are being written off over the life of the loan and
prepayment penalties have been recorded as an
extraordinary loss due to the early extinguishment of
debt and totaled $1.716 million, $0.33 per share, net
of a tax benefit of $0.924 million. The balance of
proceeds received from the notes issued will be used to
finance a portion of the new molten sulphur carrier and
other potential investments.
The Company has available three lines of credit
totaling $15,000,000 none of which were drawn at
December 31, 1993. These lines of credit are used to
meet short-term requirements when fluctuations occur in
working capital. The Company is required to maintain a
$375,000 compensating balance for one of the lines of
credit. This balance is included in Cash and Cash
Equivalents.
Under certain of the above described loan
agreements, deposits are made into bank retention
accounts to meet the requirements of the applicable
agreements. At December 31, 1993 and 1992 these
escrowed amounts, which are included in Cash and Cash
Equivalents, totaled $5,773,000 and $4,612,000,
respectively.
NOTE C - PENSION PLAN AND POSTRETIREMENT BENEFITS
The Company's retirement plan covers all full-time employees
of domestic subsidiaries who are not otherwise covered under
union-sponsored plans. The benefits are based on years of
service and the employee's compensation during the last five
years of employment. The Company's funding policy is based on
minimum contributions required under ERISA as determined through
an actuarial computation. Plan assets consist primarily of
investments in certain bank common trust funds of trust quality
assets and money market holdings.
The following table sets forth the plan's funded status and
pension costs recognized by the Company at December 31, 1993 and
1992.
Actuarial Present Value of Benefit Obligations:
December 31, December 31,
1993 1992
(All Amounts in Thousands) ___________ _____________
Vested Benefit Obligation $ 7,914 $ 7,199
======= =======
Accumulated Benefit Obligation $ 8,060 $ 7,297
======= =======
Projected Benefit Obligation $(9,320) $(8,232)
Plan Assets at Fair Value 10,125 8,760
_______ _______
Projected Benefit Obligation
Less Than Plan Assets $ 805 $ 528
Unrecognized Net Gain (877) (921)
Prior Service Cost Not Yet
Recognized in Net Periodic
Pension Cost 106 123
Unrecognized Net Obligation
Being Recognized
Over 15 Years 520 594
_______ _______
Accrued Pension Asset $ 554 $ 324
======= =======
Net Periodic Pension Cost:
1993 1992 1991
____ ____ ____
Service Cost $ 396 $ 387 $ 384
Interest Cost on Projected
Benefit Obligation 630 589 538
Actual Return on Plan Assets (1,033) (293) (1,460)
Net Amortization and Deferral 343 (362) 1,024
______ ______ ______
Net Periodic Pension Cost $ 336 $ 321 $ 486
====== ====== ======
Actuarial assumptions used to develop the components of
pension expense for the years ended December 31, 1993, 1992 and
1991 were as follows:
1993 1992 1991
____ ____ ____
Discount Rate 7.5% 8.0% 8.0%
Rate of Increase in Future
Compensation Levels 6.0% 6.0% 6.0%
Expected Long-term Rate of
Return on Assets 8.5% 8.5% 8.5%
Crew members on the Company's U.S. flag vessels belong to
union-sponsored pension plans. The Company contributed
approximately $2,495,000, $2,248,000 and $2,021,000 to these
plans for the years ended December 31, 1993, 1992 and 1991,
respectively. These contributions are in accordance with
provisions of negotiated labor contracts and generally are based
on the amount of straight pay received by the union members.
Information from the plans' administrators is not available to
permit the Company to determine whether there may be unfunded
vested benefits.
In December 1990, the Financial Accounting Standards Board
issued Statement No. 106, "Employers' Accounting for
Postretirement Benefits Other Than Pensions". This new standard
requires that the expected cost of these benefits must be charged
to expense during the years that the employees render service and
must be adopted for fiscal years beginning after December 15,
1992.
The Company elected early implementation effective January
1, 1992 which has resulted in a cumulative adjustment for years
prior to 1992 of $4,875,000 (with a tax benefit of $1,657,000)
and has been reported as a cumulative effect of a change in
accounting principle in 1992. This negative impact of $3,218,000
on 1992 reported financial position and results of operations
resulted from the significant change in the Company's previous
policy of recognizing these benefit costs on a cash basis rather
than when service is rendered. The change to the new accounting
standard resulted in a reported annual expense amount of $455,000
and $438,000 for 1993 and 1992, respectively. On a cash basis,
annual expenses related to the above benefits approximated
$458,000 in 1991.
13
The Company's postretirement benefit plans currently provide
medical, dental and life insurance benefits to eligible retired
employees and their eligible dependents. The following table
sets forth the plans' combined funded status reconciled with the
amount included in the Company's balance sheet classification
Reserves and Deferred Credits at December 31, 1993 and 1992 (All
Amounts in Thousands):
Accumulated Postretirement Benefit Obligation:
1993 1992
____ ____
Retirees $(3,626) $(3,241)
Fully eligible active plan participants (1,406) (1,455)
Other active plan participants (1,467) (400)
_________ _________
(6,499) (5,096)
Plan Assets at Fair Value -- --
________ _________
Accumulated Postretirement Benefit
Obligation in Excess of Plan Assets (6,499) (5,096)
Prior Service Cost not yet recognized
in expense 1,250 --
Unrecognized Transition Obligation -- --
_______ _______
Accrued Postretirement Benefit Cost
in the Balance Sheet $(5,249) $(5,096)
======== ========
Net post retirement benefit cost includes the following components:
1993 1992
____ ____
Service Cost $ 10 $ 9
Interest Cost on Accumulated
Postretirement Benefit
Obligation 445 429
Return on Assets -- --
Net Amortization -- --
______ _____
Net Postretirement
Benefit Cost $ 455 $ 438
====== ======
The accumulated postretirement benefit obligation was
computed using an assumed discount rate of 7.5%. The health care
cost trend rate was assumed to be 14% for years 1993 through
1995, then the trend rate was assumed to decline by 3.0% every
three years until the year 2002 at which time the rate remains
5.0%. The dental care cost trend rate was assumed to be 8.0% for
years 1993 through 1995, then the trend rate was assumed to
decline by 1.0% every 3 years until the year 2002 at which time
the rate remains 5.0%.
If the health and dental care cost trend rate were increased
one percent for all future years, the accumulated postretirement
benefit obligation as of December 31, 1993 would have increased
approximately $717,000 or 11%. The effect of this change on the
aggregate of service and interest cost for 1993 would have been
an increase of approximately $32,000 or 7%.
The Company continues to evaluate ways in which it can
better manage these benefits and control the costs. Any changes
in the plan or revisions to assumptions that affect the amount of
expected future benefits may have a significant effect on the
amount of the reported obligation and annual expense.
In November 1992, the Financial Accounting Standards Board
issued Statement 112, "Employers' Accounting for Postretirement
Benefits", which requires adoption for fiscal years beginning
after December 15, 1993. The new standard requires an obligation
to be recorded if the following four conditions are met: (1) the
obligation is attributable to employees' services already
rendered, (2) employees' rights to those benefits accumulate or
vest, (3) payment of the benefit is probable and (4) the amount
of the benefit can be reasonably estimated. This is a change
from the Company's current policy of recognizing these costs on a
cash basis. Adoption is not anticipated to have a material
impact on the Company's financial position or results of
operations.
NOTE D - INCOME TAXES
The Federal income tax returns of the Company are
filed on a consolidated basis and include the results
of operations of its wholly-owned U.S. subsidiaries.
Pursuant to the Tax Reform Act of 1986, the earnings of
foreign subsidiaries ($11,904 in 1993, $43,425 in 1992
and $4,249,840 in 1991) are also included.
Prior to 1987, deferred income taxes were not
provided on undistributed foreign earnings of
$6,689,245, all of which are expected to remain
invested indefinitely. In accordance with the Tax
Reform Act of 1986, commencing in 1987 earnings
generated from profitable controlled foreign
subsidiaries are subject to Federal income taxes.
In February 1992, the Financial Accounting
Standards Board issued Statement of Financial
Accounting Standards No. 109, "Accounting for Income
Taxes", which superseded accounting standards for
income taxes which the Company adopted in 1988. The
Company adopted Statement No. 109 effective January 1,
1993 and adoption had no impact on the Company's
financial position or results of operations.
Components of the net deferred tax
liability/(asset) are as follows:
December 31, December 31,
1993 1992
____________ ____________
(All Amounts in Thousands)
Gross Liabilities:
Fixed Assets $33,102 $32,630
Deferred Charges 9,465 6,880
Unterminated voyage
revenue/expense 2,603 2,639
Intangible Assets 9,373 9,977
Other liabilities 2,274 1,001
Gross Assets:
Insurance and claims
reserve (4,876) (6,240)
Net operating loss
carryforward/
unutilized
deficit (9,509) (12,540)
Valuation Allowance 879 879
Other assets (9,653) (8,934)
________ _________
Total deferred
tax liability, net $33,658 $26,292
======= =======
Deferred tax liability increased during 1993 due
to the recognition of the deferred federal income tax
expense of $5,851,000. In addition the Company
reclassified a deferred tax liability of $1,890,000
from Investments in and Advances to Unconsolidated
Entities upon the sale of an 18.5% interest in A/S
Havtor as further discussed in Note K. A deferred tax
asset of $375,000 was included in the assets acquired
from LITCO as further discussed in Note K.
14
The following is a reconciliation of the U. S.
statutory tax rate to the Company's effective tax rate
for the years ended December 31, 1993, 1992 and 1991:
Year Ended December 31,
_________________________
1993 1992 1991
____ ____ ____
Statutory Rate 35.0% 34.0% 34.0%
State Income Taxes 3.3% 1.2% 1.9%
Goodwill Amortization -- 1.8% .6%
Investment Tax Credit
Amortization -- -- (.9%)
(Income) Loss of
Unconsolidated
Entities 5.1% 3.0% (7.7%)
Gain on Sale of Vessel -- -- (2.0%)
Tax Rate Adjustment 5.2% -- --
Other (.6%) 1.1% (.4%)
----- ----- -----
48.0% 41.1% 25.5%
===== ===== =====
The Company has available at December 31, 1993,
unused operating loss carryforwards of $ 21.2 million
and unused foreign deficits of $5.9 million. The
operating loss carryforwards will expire in 2001.
On August 10, 1993, the Revenue Reconciliation
Bill of 1993 was signed by the President providing for
an effective tax rate of 35%. The effect of this
increase from 34% to 35% was to increase the deferred
tax liability by $764,000 for periods prior to January
1, 1993. This increase was recorded as an increase to
the Provision for Income Taxes for 1993 as well as an
increase to the Deferred Income Taxes shown on the
Balance Sheet.
NOTE E - TRANSACTIONS WITH RELATED PARTIES
The Company was a party to agreements with certain
corporations controlled by members of the Company's
management to charter 39 river barges owned by such
corporations for use in the Company's domestic and
international operations. The Company paid $440,000
for the period ended April 30, 1993 and $1,342,000 and
$1,338,000 for the years ended 1992 and 1991 in barge
rentals under the agreements. The Company purchased
these barges for $1.6 million in the aggregate in May
of 1993.
During 1991, the Company paid a barge operating
company approximately $767,000 to supervise its
Mississippi River towing operation in connection with
its coal transportation contract. A member of the
Company's management was a director of this corporation
through July, 1991.
During 1990, the Company sold one if its
subsidiaries to a former employee at a sales price of
$500,000. Collections on this receivable were
$101,000, $92,000 and $83,000 in 1993, 1992 and 1991,
respectively. At the end of 1993, the Company sold
another subsidiary to the same party for a sales price
of $692,000. The total receivable due from this
related party at December 31, 1993 was $965,000 and is
to be received over a 10 year period with an interest
rate of 6% for the first five years and LIBOR plus 2%
thereafter.
During 1992, the Company sold one of its
subsidiaries to a former employee at a sales price of
$250,000. No material gain or loss was recognized on
this transaction.
Since the Company's inception, the legal firm of
Jones, Walker, Waechter, Poitevent, Carrere and Denegre
has been utilized for various legal services. During
1992, a son of the President of the Company became a
partner of the firm. The Company made payments to the
firm totaling approximately $1,781,000 and $1,851,000
for the years ending 1993 and 1992, respectively.
Combined amounts due to related parties associated
with the above listed transactions were $43,000 at
December 31, 1993 and were included in Accounts Payable
and Accrued Liabilities. No amounts were due at
December 31, 1992.
Combined amounts due from related parties
associated with the above listed transactions were $
965,000 and $305,000 at December 31, 1993 and 1992,
respectively and were included in Due From Related
Parties. The total amount in Due From Related Parties
also includes a receivable in the amount of $4,780,000,
net of an allowance of $1,385,000 as further discussed
in Note K.
NOTE F - COMMITMENTS AND CONTINGENCIES
The Company has entered into a long-term
transportation contract with a natural resources
company for which it is having built a 24,000
Deadweight Ton Molten Sulphur Carrier vessel which will
be employed to carry molten sulphur from Louisiana to
Florida. The vessel, now known as Hull 294, is now
under construction in a shipyard in Louisiana and is
expected to deliver in late summer 1994 at which time
it will begin service under the aforementioned
transportation contract. The Company has received
interim financing commitments of up to $43,000,000 from
U.S. banks to fund approximately 75% of the total
construction cost of the vessel. At December 31, 1993
the Company had received $8,662,000 of interim
financing on this commitment which represented 75% of
the construction costs incurred to date.
As of December 31, 1993, 17 of the 24 ocean-going
vessels that the Company owns or operates were under
various contracts extending beyond 1993 and expiring at
various dates through 2010. Certain of these
agreements also contain options to extend the contracts
beyond their minimum terms.
The Company acts as a 10% guarantor for repayment
of funds borrowed by a limited partnership in which the
Company holds a 10% interest as further discussed in
Note K. The Company's share of the guarantee is
approximately $3,500,000.
The Company also maintains a $600,000 line of
credit to cover standby letters of credit for
membership in various shipping conferences.
The Company has an agreement with the Seamen's
Church Institute of New York and New Jersey to aid in
paying the cost of a new building. The Company is
committed to contribute annual installments of $60,000
through 1995.
15
NOTE G - LEASES
In 1988, the Company entered into direct financing
leases of two foreign flag pure car carriers expiring
in the year 2000. The schedule of future minimum
rentals to be received under these direct financing
leases in effect at December 31, 1993 is as follows:
Receivables Under
(All Amounts in Thousands) Financing Leases
--------------------
Year Ended December 31,
1994 $ 6,024
1995 5,668
1996 5,328
1997 4,972
1998 4,621
Thereafter 5,579
------
Total Minimum Lease Payments Receivable 32,192
Estimated Residual Values of
Leased Properties 18,000
Less Unearned Income (19,160)
-------
Total Net Investment in Direct
Financing Leases 31,032
Current Portion (2,257)
-------
Long-term Net Investment in Direct
Financing Leases at December 31, 1993 $ 28,775
========
The Company is also a party to a capital lease
agreement for two LASH vessels. The term of the lease
is twenty years. Upon expiration of the lease in the
Fourth Quarter of 1994, the Company has a right of
first refusal to purchase these leased capital assets
at their fair market value.
The Company entered into sale-leaseback agreements
in 1991 and 1992 for a group of the Company's LASH
barges. These leases meet the required criteria for a
capital lease and are accounted for as such. The terms
of the leases are 12 years.
The aforementioned capital leases are included in
Vessels, Property and Other Equipment as follows:
(All Amounts in Thousands)
1993 1992
______ ______
Vessels and LASH barges $ 45,779 $ 45,779
Less Accumulated Depreciation 17,341 12,319
________ ________
Total $ 28,438 $ 33,460
======== ========
The following is a schedule, by year, of future
minimum lease payments under capital leases, together
with the present value of the minimum payments as of
December 31, 1993:
Payments Under
(All Amounts in Thousands) Capital Leases
Year Ended December 31, ______________
1994 $ 12,390
1995 3,705
1996 3,705
1997 4,061
1998 4,450
Thereafter 19,687
_________
$ 47,998
Less -
Amount Representing Interest (15,978)
_________
Present Value of Future Minimum
Payments (Based on a Weighted
Average of 10.0%) $ 32,020
=========
The following is a schedule, by year, of future
minimum payments required under operating leases that
have initial or remaining non-cancellable terms in
excess of one year as of December 31, 1993:
Payments Under
(All Amounts in Thousands) Operating Leases
Year Ended December 31, ________________
1994 $ 2,503
1995 2,173
1996 2,034
1997 2,000
1998 1,382
Thereafter 2,316
________
Total Future
Minimum Payments $12,408
========
NOTE H - DEFERRED CHARGES
The Company defers certain costs related to the
acquisition of vessel operating contracts, the cost of
placing vessels in service, and the drydocking of
vessels. The costs of acquiring vessel operating
contracts and vessel prepositioning are amortized over
the applicable contract periods. Deferred drydocking
costs are amortized over the period between drydockings
(generally two to five years). Financing charges are
amortized over the life of the applicable debt
involved. Deferred costs are comprised of the
following:
Year Ended December 31,
(All Amounts in Thousands) 1993 1992
______ _______
Drydocking $32,722 $27,357
Prepositioning 832 2,168
Financing Charges and Other 8,438 6,699
_______ _______
$41,992 $36,224
======= =======
The Company amortizes acquired contract cost over
the contracts' useful lives using the straight-line
method of amortization. The acquired contract cost
represents the portion of the purchase price paid for
Waterman Steamship Corporation applicable primarily to
that company's maritime prepositioning ship contracts
and operating differential subsidy agreements. These
costs are being amortized over useful lives ranging
from seven to 21 years from the acquisition date.
16
NOTE I - SIGNIFICANT OPERATIONS
The Company has several medium to long-term
contracts regarding the operations of various vessels
(See Note F), from which revenues represent a
significant amount of the Company's total revenue.
Revenues from the contracts with the United States
Military Sealift Command were $82,239,000, $68,222,000,
and $65,607,000 for the years ended December 31, 1993,
1992 and 1991, respectively. Additionally, the Company
operates four U.S. Flag LASH vessels on subsidized
liner service between the U.S. Gulf and South Asia
(Trade Routes 18 and 17). Revenues, including ODS,
from this operation were $143,811,000, $140,671,000 and
$145,865,000 for the years ended December 31, 1993,
1992 and 1991, respectively.
NOTE J - REDEEMABLE PREFERRED STOCK
In 1987 and 1989, the Company issued 85,000 and
25,000 shares, respectively, of cumulative redeemable
preferred stock, together with warrants to purchase
shares of common stock. The coupon rate and warrants
were adjustable under certain conditions. As of 1993,
the coupon rate on the preferred stock ranged from
8.822% to 10.898%, and the number of shares of common
stock purchasable under the warrants totaled 427,500.
During 1993, the Company redeemed the remaining
preferred stock outstanding of $13.750 million at a
total redemption cost including accrued interest and
prepayment penalties of $14.178 million. The warrant
holders exercised their rights under the warrants to
purchase the 427,500 shares of common stock at an
exercise price of $10.12 per share.
NOTE K - UNCONSOLIDATED ENTITIES
At December 31, 1992, the Company held a one-third
interest in A/S Havtor, a Norwegian company that
manages and charters-out vessels specializing in the
transportation of liquid petroleum gas and various
chemical products. During the first quarter of 1993,
the Company sold an 18.5% direct interest in A/S Havtor
for a sales price of approximately $7,557,000 of which
$2,777,000 was received in cash and $4,780,000 was
received in the form of a promissory note. The
transaction reduced the Company's direct interest in
A/S Havtor to 14.8% and resulted in an after tax gain
of approximately $900,000. Payment of principal and
interest on the note receivable is due upon maturity in
mid-1996. The note is included in Due From Related
Parties, net of an allowance for doubtful accounts
equal to the after tax gain of $ 900,000, which will
have the effect of deferring recognition of the gain
until receipt of the proceeds from the promissory note.
Since the Company is no longer represented on the board
of directors of A/S Havtor or A/S Havtor Management,
has no substantive control or input regarding their
operations and its direct and indirect ownership in
both is now below 20%, the investments have been
accounted for since April 1, 1993 under the cost method
of accounting, which permits recognition of income only
upon distribution of dividends or sale of interest.
The Company's investment in A/S Havtor
approximated $3,400,000 and $8,700,000 at December 31,
1993 and 1992, respectively. Undistributed earnings for
the investment included in the Company's retained
earnings at December 31, 1993 and 1992 were $2,468,000
and $7,100,000, respectively. No dividends were
received in 1993, 1992 or 1991. The Company also
has a 14% equity interest in A/S Havtor Management, a
Norwegian ship management company affiliated with A/S
Havtor. The Company's investment in A/S Havtor
Management approximated $3,200,000 and $3,800,000 at
December 31, 1993 and 1992, respectively.
Undistributed earnings from the investment included in
the Company's retained earnings at December 31, 1993
and 1992 were $3,000,000 and $3,500,000, respectively.
No dividends were received in the years 1993, 1992 or
1991.
Following is a summary of combined financial data
of A/S Havtor and A/S Havtor Management for the periods
indicated:
September 30,
1992 1991
______ ______
(Audited)
(All Amounts in Thousands)
Current Assets $ 32,444 $ 27,825
Non-current Assets 62,013 78,314
-------- --------
Total Assets $ 94,457 $106,139
======== ========
Current Liabilities $ 1,750 $ 5,292
Non-current Liabilities 20,062 23,345
Equity 72,645 77,502
-------- --------
Total Liabilities and
Shareholder's Equity $ 94,457 $106,139
======== ========
Twelve Months Ended
September 30,
1992 1991
____ ____
(Audited)
Gross Revenues/Equity in
Earnings (Losses) of
Investees $(4,215) $42,476
======== =======
Gross Profit (Loss) $(7,266) $39,751
======== =======
Net Income (Loss) $(5,487) $20,031
======== =======
At December 31, 1992, the Company held a 39%
equity interest in a foreign entity, Bulkowner's 1984,
which was formed to construct and own two newly-built
combination dry cargo/ petroleum products PROBO vessels
which delivered in 1989. In January 1991, the Company
sold 4% of its interest in Bulkowner's 1984 to A/S
Havtor and 7% of its interest in Bulkowner's 1984 to
A/S Havtor Management for a sales price of
approximately $7,100,000. The transaction resulted in a
gain before taxes of $1,200,000 and net cash flow
before income taxes of $3,500,000. During the first
quarter of 1993, the Company reacquired this 11%
interest in Bulkowner's 1984. This additional interest
was acquired for approximately $6,359,000 of which
$3,463,000 was a cash payment and $2,896,000 was paid
through cancellation of notes receivable due from the
sellers that previously had been delivered to the
Company as partial consideration for the 1991 sale of
the 4% and 7% interests in Bulkowner's 1984 described
above. The acquisition increased the Company's
interest to 50%. The Company's investment in ($9.6
million) and advances to ($13.0 million) Bulkowner's
1984 approximated $22,600,000 at December 31, 1993.
17
Following is a summary of unaudited financial data
of Bulkowner's 1984:
October 31,
1993 1992
________ ________
(All Amounts in Thousands)
Current Assets $23,048 $22,326
Non-current Assets 45,497 48,422
______ _______
Total Assets $68,545 $70,748
======= =======
Current Liabilities $ 2,785 $14,761
Non-current Liabilities 59,226 47,053
Equity 6,534 8,934
------- -------
Total Liabilities and
Shareholder's Equity $68,545 $70,748
======= =======
Twelve Months Ended October 31,
1993 1992 1991
_________ _________ _________
Gross Revenues $8,809 $8,252 $11,132
======= ======== ========
Gross Profit $3,919 $2,792 $6,571
======== ======== ========
Net Income $1,126 $ 33 $1,975
======== ======== ========
During 1990, the Company agreed to participate in
a limited partnership (10% interest) with certain
Norwegian interests to construct and own a Liquified
Petroleum Gas (LPG) carrier which was delivered in
April 1993. The Company has contributed $ 2,092,000 in
equity funds as of December 31, 1993. The Company is
also acting as a 10% guarantor for repayment of funds
borrowed to construct the LPG carrier. The Company's
share of the guarantee is approximately $ 3,500,000.
The Company has a 50% interest in a foreign
entity, Marco Shipping Company, (PTE.), Ltd. ("Marco"),
which acts in an agent capacity on behalf of the
Company. The Company's investment in Marco at December
31, 1993 approximated $170,000.
During 1993, the Company purchased the remaining
50% interest in a LASH barge intermodal company
("LITCO") for $1.9 million. The acquisition has been
accounted for as a purchase and the results of LITCO
have been included in the accompanying consolidated
financial statements since the date of acquisition.
The cost of the acquisition has been allocated on the
basis of the estimated fair market value of the assets
acquired and the liabilities assumed. This allocation
resulted in goodwill of approximately $324,000 which is
being amortized over 10 years.
Income of foreign unconsolidated entities is
recorded net of applicable taxes of approximately
$2,586,000 in 1991. In 1992 and 1993, a loss from
unconsolidated entities is recorded net of applicable
tax benefits of approximately $701,000 and $1,405,000,
respectively. Investments in and advances to
unconsolidated entities is shown net of deferred taxes
of $4,538,000 and $8,142,000 at December 31, 1993 and
1992, respectively.
NOTE L - CASH FLOW INFORMATION
Year Ended December 31,
(All Amounts in Thousands) 1993 1992 1991
____ ____ ____
Non-Cash Investing and
Financing Activities:
Accounts Payable to
be Refinanced $ 340 $ 6,344 $33,372
Owner Financed Vessel and
Deferred Charge Acquisition -- -- 574
Cash Payments:
Interest Paid Net of
Capitalized Interest 20,510 20,005 22,527
Taxes Paid 3,087 4,596 8,590
As discussed in Note K, during 1993 the Company
reacquired an 11% interest in a foreign entity,
Bulkowner's 1984. Notes receivable from the sellers in
the amount of $2,896,000 were canceled as a part of the
purchase price. The Company also sold an interest in
A/S Havtor in 1993 for $7,557,000 of which $2,777,000
was received in cash and $4,780,000 in the form of a
promissory note which is included in Other Assets: Due
from Related Parties.
For purposes of the accompanying statement of cash
flows, the Company considers highly liquid debt
instruments purchased with a maturity of three months
or less to be cash equivalents.
NOTE M - FAIR VALUE OF FINANCIAL INSTRUMENTS
In December 1991, the Financial Accounting
Standards Board issued Statement of Financial
Accounting Standards No. 107, "Disclosures About Fair
Value of Financial Instruments", which is effective for
financial statements issued for fiscal years ending
after December 15, 1992. This statement requires all
entities to disclose the fair value of certain
financial instruments, both assets and liabilities
recognized and not recognized in the statement of
financial position, for which it is practicable to
estimate fair value.
The following methods and assumptions were used to
estimate the fair value of each class of financial
instruments for which it is practicable to estimate
that value:
Debt
____
The fair value of the Company's debt is estimated
based on the current rates offered to the Company. At
December 31, 1993 the estimated fair value of the
Company's outstanding debt is $242,416,000 as compared
to a carrying value of $238,991,000. At December 31,
1992 the estimated fair value of the Company's
outstanding debt was $241,661,000 as compared to a
carrying value of $238,733,000.
Interest Rate Swap Agreement
__________________________
The fair value of interest rate swaps is the
estimated amount that the Bank would receive or pay to
terminate the swap agreements at the reporting date,
taking into account current market conditions and
interest rates. At December 31, 1993 the carrying
value of the net unrealized gains approximated $598,000
as compared to a fair value of $633,000.
FASB 107 does not require disclosure of the fair
value of all balance sheet classifications including,
but not limited to certain vessels, property, plant and
equipment, direct financing leases or intangible assets
which may have a fair value in excess of historical
cost. Therefore, this statement does not purport to
represent the fair value of the Company.
19
NOTE N - ACCOUNTS PAYABLE AND ACCRUED LIABILITIES
Detailed below are the components of the Balance Sheet
classification Accounts Payable and Accrued Liabilities for the
periods indicated.
1993 1992
(All Amounts in Thousands) ______ ______
Trade Accounts Payable $ 5,572 $ 4,894
Accrued Salaries and Benefits 1,678 303
Accrued Voyage Expenses 34,492 28,711
Accrued Interest 7,705 5,340
Taxes Payable -- (295)
_______ _______
$49,447 $38,953
======= =======
NOTE O - QUARTERLY FINANCIAL INFORMATION - (Unaudited)
Quarter Ended
March 31 June 30 Sept. 30 Dec. 31
________ _______ ________ _______
(All amounts in thousands except per share data)
1993 Revenue $83,997 $89,843 $82,214 $85,597
Expense 68,266 72,623 66,876 69,568
Gross Voyage Profit 15,731 17,220 15,338 16,029
Income Before
Extraordinary
Item 1,056 3,184 1,465 1,940
Extraordinary Item -- (1,703) 110 (123)
Net Income 1,056 1,481 1,575 1,817
Earnings per Common
and Common
Equivalent Share:
Primary:
Income Before
Extraordinary
Item 0.12 0.54 0.24 0.36
Extraordinary
Item -- (0.33) 0.02 (0.02)
Net Income 0.12 0.21 0.26 0.34
1992 Revenue $76,627 $81,694 $82,395 $83,892
Expense 62,239 66,829 69,456 68,503
Gross Voyage Profit 14,388 14,865 12,939 15,389
Income Before
Cumulative Effect
of Accounting
Change 2,282 1,901 1,919 397
Cumulative Effect
of Accounting
Change (3,218) -- -- --
Net Income (936) 1,901 1,919 397
Earnings per Common
and Common
Equivalent Share:
Primary:
Income Before
Cumulative
Effect of
Accounting
Change 0.37 0.29 0.30 0.00
Cumulative Effect
of Accounting
Change (0.63) -- -- --
Net Income (0.26) 0.29 0.30 0.00
1991 Revenue $89,372 $82,383 $79,532 $77,142
Expense 72,004 66,108 66,277 62,737
Gross Voyage Profit 17,368 16,275 13,255 14,405
Net Income 4,713 3,573 3,422 3,525
Earnings per Common
and Common
Equivalent Share:
Primary:
Net Income 0.85 0.62 0.59 0.61
[FN]
First quarter of 1992 amounts have been restated to reflect the
cumulative effect of an accounting change.
COMMON STOCK PRICES AND DIVIDENDS FOR EACH QUARTERLY
PERIOD OF 1992 AND 1993
(Source:
New York Stock Exchange)
Cash
Dividends
1992 High Low Paid
- ------- ------- ------ ---------------
1st Quarter 24 3/4 21 1/4 .05/Share
2nd Quarter 24 7/8 20 7/8 .05/Share
3rd Quarter 21 7/8 18 .05/Share
4th Quarter 19 7/8 16 1/2 .05/Share
Cash
Dividends
1993 High Low Paid
- ------ ____ ____ _________
1st Quarter 21 1/2 18 1/8 .05/Share
2nd Quarter 23 7/8 20 7/8 .05/Share
3rd Quarter 23 1/4 19 3/8 .05/Share
4th Quarter 22 5/8 18 1/2 .05/Share
Approximate Number of Common Stockholders of Record
at March 1, 1994 - 994
20
REPORT OF INDEPENDENT PUBLIC ACCOUNTANTS
To The Stockholders of International Shipholding
Corporation:
We have audited the accompanying consolidated
balance sheets of International Shipholding Corporation
(a Delaware corporation) and subsidiaries (the Company)
as of December 31, 1993 and 1992, and the related
consolidated statements of income, changes in
stockholders' investment and cash flows for each of
the three years in the period ended December 31, 1993.
These financial statements are the responsibility of
the Company's management. Our responsibility is to
express an opinion on these financial statements based
on our audits. We did not audit the financial
statements of A/S Havtor and subsidiaries and A/S
Havtor Management and subsidiaries ("Havtor"), the
investment in which is reflected in the accompanying
financial statements using the equity method of
accounting through March 31, 1993 (see Note K). The
combined investment in Havtor represents 2.4% of
consolidated total assets as of December 31, 1992, and
the equity in the combined Havtor net income (loss)
represents (18.9%) and 30.3% of the Company's
consolidated income before extraordinary loss and
cumulative effect of accounting change, for the years
ended December 31, 1992 and 1991, respectively. The
statements of Havtor for 1992 and 1991 were audited by
other auditors whose report has been furnished to us
and our opinion, insofar as it relates to the amounts
included for Havtor, is based solely on the report of
the other auditors.
We conducted our audits in accordance with generally
accepted auditing standards. Those standards require
that we plan and perform the audit to obtain reasonable
assurance about whether the financial statements are
free of material misstatement. An audit includes
examining, on a test basis, evidence supporting the
amounts and disclosures in the financial statements.
An audit also includes assessing the accounting
principles used and significant estimates made by
management, as well as evaluating the overall financial
statement presentation. We believe that our audits
provide a reasonable basis for our opinion.
In our opinion, based on our audits and the report
of the other auditors for 1992 and 1991, the financial
statements referred to above present fairly, in all
material respects, the consolidated financial position
of International Shipholding Corporation and
subsidiaries as of December 31, 1993 and 1992, and the
consolidated results of its operations and its cash
flows for each of the three years in the period ended
December 31, 1993 in conformity with generally accepted
accounting principles.
As discussed in Note C to the financial statements,
the Company changed its method of accounting for
postretirement benefits in 1992 to comply with
provisions of Statement No. 106 of the Financial
Accounting Standards Board.
Arthur Andersen & Co.
New Orleans, Louisiana
January 18, 1994