Note 1 - Nature of Operations and Accounting Policies
|12 Months Ended|
Dec. 31, 2018
|Notes to Financial Statements|
|Basis of Accounting [Text Block]||
The consolidated financial statements include the accounts of SEACOR Marine and its consolidated subsidiaries (collectively referred to as the "Company"). The Company provides global marine and support transportation services to offshore oil, natural gas and windfarm facilities worldwide. The Company and its joint ventures operate a diverse fleet of offshore support and specialty vessels that (i) deliver cargo and personnel to offshore installations, (ii) handle anchors and mooring equipment required to tether rigs to the seabed, (iii) tow rigs and assist in placing them on location and moving them between regions, (iv) provide construction, well work-over and decommissioning support and (v) carry and launch equipment used underwater in drilling and well installation, maintenance, inspection and repair. Additionally, the Company's vessels provide accommodations for technicians and specialists, safety support and emergency response services. The Company's fleet also features crew transfer vessels used primarily in windfarm operations.
Nature of Operations and Segmentation.
Accounting standards require public business enterprises to report information about each of their operating business segments that exceed certain quantitative thresholds or meet certain other reporting requirements. Operating business segments have been defined as a component of an enterprise about which separate financial information is available and is evaluated regularly by the chief operating decision maker in assessing performance. The Company has identified the following
fiveprincipal geographic regions as its reporting segments:
United States, primarily Gulf of Mexico.The Company's vessels in this market support deepwater anchor handling, fast cargo transport, general cargo transport, well intervention, work-over, decommissioning, and diving operations.
Africa, primarily West Africa.The Company's vessels in this area generally support projects for major oil companies, primarily in Angola.
Middle East and Asia.The Company's vessels in this area generally support exploration, personnel transport and seasonal construction activities in Egypt, Israel, Malaysia, Vietnam, Thailand and countries along the Arabian Gulf and Arabian Sea, such as Saudi Arabia, the United Arab Emirates and Qatar.
Brazil, Mexico, Central and South America.As of
34vessels were located in this region, including
27joint-ventured through the Company's
49%noncontrolling interest in Mantenimiento Express Maritimo, S.A.P.I. de C.V. ("MexMar") and through a subsidiary of the Company's
49%noncontrolling interest in MEXMAR Offshore International LLC ("MEXMAR Offshore"). These vessels, consisting of a fleet of FSVs, supply, specialty and liftboat vessels, provide support for exploration and production activities in Mexico, Brazil and Guyana. From time to time, the Company's vessels work in Trinidad and Tobago, Colombia and Venezuela.
Europe, primarily North Sea.Demand for standby services developed in
1991after the United Kingdom passed legislation requiring offshore operators to maintain higher specification standby safety vessels. The legislation requires a vessel to "stand by" to provide a means of evacuation and rescue for platform and rig personnel in the event of an emergency at an offshore installation. In addition,
40vessels were located in this region supporting the construction and maintenance of offshore wind turbines, including
SEACOR Marine was previously a subsidiary of SEACOR Holdings Inc. (along with its consolidated subsidiaries, other than SEACOR Marine, collectively referred to as "SEACOR Holdings"). On
June 1, 2017,SEACOR Holdings completed a spin-off of SEACOR Marine by way of a pro rata dividend of SEACOR Marine's Common Stock, all of which was then held by SEACOR Holdings, to SEACOR Holdings' shareholders of record as of
May 22, 2017 (the "Spin-off"). SEACOR Marine entered into certain agreements with SEACOR Holdings to govern SEACOR Marine's relationship with SEACOR Holdings following the Spin-off, including a Distribution Agreement,
twoTransition Services Agreements, an Employee Matters Agreement and a Tax Matters Agreement. Immediately following the Spin-off, SEACOR Marine began to operate as an independent, publicly traded company.
The consolidated financial statements include the accounts of SEACOR Marine and its controlled subsidiaries. Control is generally deemed to exist if the Company has greater than
Basis of Consolidation.
50%of the voting rights of a subsidiary. All significant intercompany accounts and transactions are eliminated in the combination and consolidation.
Noncontrolling interests in consolidated subsidiaries are included in the consolidated balance sheets as a separate component of equity. The Company reports consolidated net income (loss) inclusive of both the Company's and the noncontrolling interests' share, as well as the amounts of consolidated net income (loss) attributable to each of the Company and the noncontrolling interests. If a subsidiary is deconsolidated upon a change in control, any retained noncontrolled equity investment in the former controlled subsidiary is measured at fair value and a gain or loss is recognized in net income (loss) based on such fair value. If a subsidiary is consolidated upon a change in control, any previous noncontrolled equity investment in the subsidiary is measured at fair value and a gain or loss is recognized in net income (loss) based on such fair value.
The Company employs the equity method of accounting for investments in
50%or less owned companies that it does
notcontrol but has the ability to exercise significant influence over the operating and financial policies of the business venture. Significant influence is generally deemed to exist if the Company has between
50%of the voting rights of a business venture, but
mayexist when the Company's ownership percentage is less than
20%.In certain circumstances, the Company
mayhave an economic interest in excess of
notcontrol and consolidate the business venture. Conversely, the Company
mayhave an economic interest less than
maycontrol and consolidate the business venture. The Company reports its investments in and advances to these business ventures in the accompanying consolidated balance sheets as investments, at equity, and advances to
50%or less owned companies. The Company reports its share of earnings from investments in
50%or less owned companies in the accompanying consolidated statements of loss as equity in earnings (losses) of
50%or less owned companies, net of tax.
The Company employs the cost method of accounting for investments in
50%or less owned companies it does
notcontrol or exercise significant influence. These investments in private companies are carried at cost and are adjusted only for capital distributions and other-than-temporary declines in fair value.
The preparation of financial statements in conformity with accounting principles generally accepted in the United States requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities and disclosure of contingent assets and liabilities at the date of the financial statements and the reported amounts of revenues and expenses during the reporting period. Such estimates include those related to deferred revenues, allowance for doubtful accounts, useful lives of property and equipment, impairments, income tax provisions and certain accrued liabilities. Actual results could differ from estimates and those differences
Use of Estimates.
The Company contracts with various customers to carry out management services for vessels as agents for and on behalf of ship owners. These services include crew management, technical management, commercial management, insurance arrangements, sale and purchase of vessels, provisions and bunkering. As the manager of the vessels, the Company undertakes to use its best endeavors to provide the agreed management services as agents for and on behalf of the owners in accordance with sound ship management practice and to protect and promote the interest of the owners in all matters relating to the provision of services hereunder. The Company also contracts with various customers to carry out management services regarding engineering for vessel construction and vessel conversions. The vast majority of the ship management agreements span over the length of
threeyears and are typically billed on a monthly basis. The Company transfers control of the service to the customer and satisfies its performance obligation over the term of the contract, and therefore recognized revenue over the term of the contact while related costs are expensed as incurred (see Note
Revenue that does
notmeet these criteria is deferred until the criteria is met and such revenue is considered a contract liability. Contract liabilities, which are included in other current liabilities in the accompanying consolidated balance sheets, for the years ended
December 31were as follows (in thousands):
2018,the Company recognized deferred revenues
ofillion related to the time charter of several offshore support vessels scheduled to be paid through the conveyance of an overriding royalty interest (the "Conveyance") in developmental oil and natural gas producing properties operated by a customer in the U.S. Gulf of Mexico. Payments under the Conveyance, and the timing of such payments, were contingent upon production and energy sale prices. On
August 17, 2012,the customer filed a voluntary petition for Chapter
11bankruptcy. The Company recognized these revenues in the quarter ending
December 31, 2018after receiving notification of a judgment in its favor. All costs and expenses related to these charters were recognized as incurred.
Also, as of
December 31, 2018,the Company deferred revenues of
$1.3million related to the time charter of offshore support vessels to customers from which collection was
notreasonably assured. The Company will recognize revenues when collected or when collection is reasonably assured under ASC
noright of return. All costs and expenses related to these charters were recognized as incurred.
The Company earns revenue primarily from the time charter and bareboat charter of vessels to customers. Since the Company charges customers based upon daily rates of hire, vessel revenues are recognized on a daily basis throughout the contract period. Under a time charter, the Company provides a vessel to a customer and is responsible for all operating expenses, typically excluding fuel. Under a bareboat charter, the Company provides a vessel to a customer and the customer assumes responsibility for all operating expenses and assumes all risks of operation. In the U.S. Gulf of Mexico, time charter durations and rates are typically established in the context of master service agreements that govern the terms and conditions of the charter. From time to time, the Company
mayalso participate in pooling arrangements. In a pooling arrangement, the time charter revenues of certain of the Company's vessels are shared with the time charter revenues of certain vessels of similar type owned by non-affiliated vessel owners based upon an agreed formula.
Contract or charter durations
mayrange from several days to several years. Longer duration charters are more common where equipment is
notas readily available or specific equipment is required. In the North Sea, multi-year charters have been more common and constitute a significant portion of the North Sea market. Time charters in Asia have historically been less common and generally contracts or charters have terms of less than
twoyears. In the Company's other operating areas, charters vary in length from short-term to multi-year periods, many with cancellation clauses and without early termination penalties. As a result of options and frequent renewals, the stated duration of charters
mayhave little correlation with the length of time the vessel is contracted to provide services to a particular customer.
The Company considers all highly liquid investments with an original maturity of
threemonths or less, when purchased, to be cash equivalents. Cash equivalents consist of U.S. treasury securities, money market instruments, time deposits and overnight investments.
Restricted cash primarily relates to banking facility requirements.
For the year ended
December 31,cash, cash equivalents and restricted cash consists of:
Marketable equity securities with readily determinable fair values and debt securities are reported in the accompanying consolidated balance sheets as marketable securities. These investments are stated at fair value, as determined by their market observable prices, with both realized and unrealized gains and losses reported in the accompanying consolidated statements of loss as marketable security losses, net. Short sales of marketable securities are stated at fair value in the accompanying consolidated balance sheets with both realized and unrealized losses reported in the accompanying consolidated statements of loss as marketable security gains (losses), net. Marketable securities are classified as trading securities for financial reporting purposes with gains and losses reported as operating activities in the accompanying consolidated statements of cash flows.
Customers are primarily major integrated national and international oil companies and large independent oil and natural gas exploration and production companies. Customers are granted credit on a short-term basis and the related credit risks are minimal. Other receivables consist primarily of operating expenses the Company incurs in relation to vessels it manages for other entities, as well as insurance and income tax receivables. The Company routinely reviews its receivables and makes provisions for probable doubtful accounts; however, those provisions are estimates and actual results
Trade and Other Receivables.
maymaterially differ from those estimates. Trade receivables are deemed uncollectible and are removed from accounts receivable and the allowance for doubtful accounts when collection efforts have been exhausted.
The Company accounts for derivatives through the use of a fair value concept whereby all of the Company's derivative positions are stated at fair value in the accompanying consolidated balance sheets. Realized and unrealized gains and losses on derivatives
notdesignated as hedges are reported in the accompanying consolidated statements of loss as Derivative gains (losses), net. Realized and unrealized gains and losses on derivatives designated as fair value hedges are recognized as corresponding increases or decreases in the fair value of the underlying hedged item to the extent they are effective, with any ineffective portion reported in the accompanying consolidated statements of loss as Derivative gains (losses), net. Realized and unrealized gains and losses on derivatives designated as cash flow hedges are reported as a component of other comprehensive loss in the accompanying consolidated statements of comprehensive loss to the extent they are effective and reclassified into earnings on the same line item associated with the hedged transaction and in the same period the hedged transaction affects earnings. Any ineffective portions of cash flow hedges are reported in the accompanying consolidated statements of loss as Derivative gains (losses), net. Realized and unrealized gains and losses on derivatives designated as cash flow hedges that are entered into by the Company's
50%or less owned companies are also reported as a component of the Company's other comprehensive loss in proportion to the Company's ownership percentage, with reclassifications and ineffective portions being included in Equity in earnings (losses) of
50%or less owned companies, net of tax, in the accompanying consolidated statements of loss.
The Company is exposed to concentrations of credit risk associated with its cash and cash equivalents, restricted cash, construction reserve funds and derivative instruments. The Company minimizes its credit risk relating to these positions by monitoring the financial condition of the financial institutions and counterparties involved and by primarily conducting business with large, well-established financial institutions and diversifying its counterparties. The Company does
Concentrations of Credit Risk.
notcurrently anticipate nonperformance by any of its significant counterparties. The Company is also exposed to concentrations of credit risk relating to its receivables due from customers described above. The Company does
notgenerally require collateral or other security to support its outstanding receivables. The Company minimizes its credit risk relating to receivables by performing ongoing credit evaluations and, to date, credit losses have
Inventories, which consist of fuel and supplies, are stated at the lower of cost (using the
first-out method) or market. The Company records write-downs, as needed, to adjust the carrying amount of inventories to the lower of cost or market. In the year ended
December 31, 2018,the Company recorded
$0.2million in inventory reserves. There were
noinventory reserves during the years ended
Equipment, stated at cost, is depreciated using the straight-line method over the estimated useful life of the asset to an estimated salvage value. With respect to offshore support vessels, the estimated useful life is typically based upon a newly built vessel being placed into service and represents the point at which it is typically
Property and Equipment.
notjustifiable for the Company to continue to operate the vessel in the same or similar manner. From time to time, the Company
mayacquire older vessels that have already exceeded the Company's useful life policy, in which case the Company depreciates such vessels based on its best estimate of remaining useful life, typically the next regulatory survey or certification date.
2018,the estimated useful life (in years) of each of the Company's major categories of new offshore support vessels was as follows:
The Company's property and equipment as of
December 31was as follows (in thousands):
Depreciation and amortization expense totaled
Equipment maintenance and repair costs and the costs of routine overhauls, drydockings and inspections performed on vessels and equipment are charged to operating expense as incurred. Expenditures that extend the useful life or improve the marketing and commercial characteristics of vessels, as well as major renewals and improvements to other properties, are capitalized.
Certain interest costs incurred during the construction of vessels are capitalized as part of the vessels' carrying values and are amortized over such vessels' estimated useful lives. Capitalized interest totaled
During the year ended
2016,the Company wrote-off its intangible assets as part of recognized impairment charges associated with its liftboat fleet (see
Impairment of Long-Lived Assetsbelow). During the year ended
2016,the Company recognized amortization expense of
The Company performs an impairment analysis of long-lived assets used in operations, including intangible assets, when indicators of impairment are present. These indicators
Impairment of Long-Lived Assets.
mayinclude a significant decrease in the market price of a long-lived asset or asset group, a significant adverse change in the extent or manner in which a long-lived asset or asset group is being used or in its physical condition, or a current period operating or cash flow loss combined with a history of operating or cash flow losses or a forecast that demonstrates continuing losses associated with the use of a long-lived asset or asset group. If the carrying values of the assets are
notrecoverable, as determined by their estimated future undiscounted cash flows, the estimated fair value of the assets or asset groups are compared to their current carrying values and impairment charges are recorded if the carrying value exceeds fair value.
As a result of the difficult conditions experienced in the offshore oil and natural gas markets beginning in the
2014and the corresponding reductions in utilization and rates per day worked of its fleet, the Company identified indicators of impairment and recognized impairment charges primarily associated with its AHTS fleet, its liftboat fleet, certain specialty vessels, vessels removed from service and goodwill. When reviewing its fleet for impairment, the Company groups vessels with similar operating and marketing characteristics, including cold-stacked vessels expected to return to active service, into vessel classes. All other vessels, including vessels retired and removed from service, are evaluated for impairment on a vessel by vessel basis.
During the year ended
December 31, 2018,the Company recorded non-cash impairment charges of
$14.6million primarily associated with its AHTS fleet (
fourowned vessels and
threeleased-in vessels) and
onespecialty vessel. During the year ended
December 31, 2017,the Company recorded non-cash impairment charges of
$27.5million primarily associated with its AHTS vessels,
oneleased-in supply vessel removed from service as it is
notexpected to be marketed prior to the expiration of its lease,
oneowned FSV removed from service and
twoowned in-service specialty vessels. During the year ended
December 31, 2016,the Company recorded non-cash impairment charges of
$119.7million primarily associated with its AHTS fleet, its liftboat fleet and
onespecialty vessel. Estimated fair values for the Company's owned vessels were established by independent appraisers and other market data such as recent sales of similar
vessels (see Notemarket conditions further decline from the depressed utilization and rates per day worked experience over the last
threeyears, fair values based on future appraisals could decline significantly.
The Company's other vessel classes and other individual vessels in active service and cold-stacked status, for which
noimpairment was deemed necessary, have generally experienced a less severe decline in utilization and rates per day worked based on specific market factors. The market factors include vessels with more general utility to a broad range of customers (e.g., FSVs), vessels required for customers to meet regulatory mandates and operating under multiple year contracts (e.g., standby safety vessels) or vessels that service customers outside of the offshore oil and natural gas market (e.g., crew transfer vessels).
For vessel classes and individual vessels with indicators of impairment but
notrecently impaired as of
December 31, 2018,the Company has estimated that their future undiscounted cash flows exceed their current carrying values. The Company's estimates of future undiscounted cash flows are highly subjective as utilization and rates per day worked are uncertain, including the timing of an estimated market recovery in the offshore oil and natural gas markets and the timing and cost of reactivating cold-stacked vessels. If market conditions decline further, changes in the Company's expectations on future cash flows
mayresult in recognizing additional impairment charges related to its long-lived assets in future periods.
50%or Less Owned Companies.
50%or less owned companies are reviewed periodically to assess whether there is an other-than-temporary decline in the carrying value of the investment. In its evaluation, the Company considers, among other items, recent and expected financial performance and returns, impairments recorded by the investee and the capital structure of the investee. When the Company determines the estimated fair value of an investment is below carrying value and the decline is other-than-temporary, the investment is written down to its estimated fair value. Actual results
mayvary from the Company's estimates due to the uncertainty regarding projected financial performance, the severity and expected duration of declines in value, and the available liquidity in the capital markets to support the continuing operations of the investee, among other factors. Although the Company believes its assumptions and estimates are reasonable, the investee's actual performance compared with the estimates could produce different results and lead to additional impairment charges in future periods. During the years ended
2016,the Company recognized impairment charges of
$6.9million, respectively, net of tax, related to its
50%or less owned companies (see Note
The Company recognizes
100%of the fair value of assets acquired, liabilities assumed, and noncontrolling interests when the acquisition constitutes a change in control of the acquired entity. Shares issued in consideration for a business combination, contingent consideration arrangements and pre-acquisition loss and gain contingencies are all measured and recorded at their acquisition-date fair value. Subsequent changes to fair value of contingent consideration arrangements are generally reflected in earnings. Acquisition-related transaction costs are expensed as incurred and any changes in an acquirer's existing income tax valuation allowances and tax uncertainty accruals are recorded as an adjustment to income tax expense. The operating results of entities acquired are included in the accompanying consolidated statements of loss from the date of acquisition (see Note
Debt Discount and Issue Costs
.Debt discounts and costs incurred in connection with the issuance of debt are amortized over the life of the related debt using the effective interest rate method for term loans and straight-line method for revolving credit facilities and are included in interest expense in the accompanying consolidated statements of loss.
.The Company maintains marine hull, liability and war risk, general liability, workers compensation and other insurance customary in the industry in which it operates. Both the marine hull and liability policies have annual aggregate deductibles. Marine hull annual aggregate deductibles are accrued as claims are incurred while marine liability annual aggregate deductibles are accrued based on historical loss experience. Exposure to the health benefit plans are limited by maintaining stop-loss and aggregate liability coverage. To the extent that estimated self-insurance losses, including the accrual of annual aggregate deductibles, differ from actual losses realized, the Company's insurance reserves could differ significantly and
mayresult in either higher or lower insurance expense in future periods.
.Deferred income tax assets and liabilities have been provided in recognition of the income tax effect attributable to the book and tax basis differences of assets and liabilities reported in the accompanying consolidated financial statements. Deferred tax assets or liabilities are provided using the enacted tax rates expected to apply to taxable income in the periods in which they are expected to be settled or realized. Interest and penalties relating to uncertain tax positions are recognized in interest expense and administrative and general, respectively, in the accompanying consolidated statements of loss. The Company records a valuation allowance to reduce its deferred tax assets if it is more likely than
notthat some portion or all of the deferred tax assets will
The Global Intangible Low Taxed Income ("GILTI") regime effectively imposes a minimum tax on worldwide foreign earnings and subjects U.S. shareholders of controlled foreign corporations ("CFCs") to current taxation on certain income earned through a CFC. The Company has made the policy election to record any liability, associated with GILTI in the period in which it is incurred.
Prior to the Spin-off, SEACOR Marine was included in the consolidated U.S. federal income tax return of SEACOR Holdings. SEACOR Holdings' policy for allocation of U.S. federal income taxes required its domestic subsidiaries included in the consolidated U.S. federal income tax return to compute their provision for U.S. federal income taxes on a separate company basis and settle with SEACOR Holdings.
In the normal course of business, the Company or SEACOR Holdings
maybe subject to challenges from tax authorities regarding the amount of taxes due for the Company. These challenges
mayalter the timing or amount of taxable income or deductions. As part of the calculation of income tax expense, the Company determines whether the benefits of its tax positions are at least more likely than
notof being sustained based on the technical merits of the tax position. For tax positions that are more likely than
notof being sustained, the Company accrues the largest amount of the tax benefit that is more likely than
notof being sustained. Such accruals require management to make estimates and judgments with respect to the ultimate outcome of its tax benefits and actual results could vary materially from these estimates.
Deferred Gains - Vessel Sale-Leaseback Transactions and Financed Vessel Sales
.From time to time, the Company enters into vessel sale-leaseback transactions with finance companies or provides seller financing on sales of its vessels to
third-parties or to
50%or less owned companies. A portion of the gains realized from these transactions is
notimmediately recognized in income but rather is recorded in the accompanying consolidated balance sheets in deferred gains and other liabilities. In sale-leaseback transactions, gains are deferred to the extent of the present value of future minimum lease payments and are amortized as reductions to rental expense over the applicable lease terms (see Note
6). When we determine that future cash inflows do
notsupport future lease cash obligations, the Company records an impairment expense for the amount of the cash flow shortage of all future lease costs, costs to maintain the vessel to the end of the lease term, and costs to return the vessel to its owner, less the amount of any unamortized deferred gains. In financed vessel sales, gains are deferred to the extent that the repayment of purchase notes is dependent on the future operations of the sold vessels and are amortized based on cash received from the buyers. Deferred gain activity related to these transactions for the years ended
31was as follows (in thousands):
A portion of the gains realized from non-financed sales of the Company's vessels to its
Deferred Gains - Vessel Sales to the Company's
50%or Less Owned Companies.
50%or less owned companies has been deferred and recorded in the accompanying consolidated balance sheets in deferred gains and other liabilities. In most instances, the sale of a Company vessel to a
50%or less owned company is considered a sale of a business in which the Company relinquishes control to its
50%or less owned company resulting in gain recognition; however, the Company defers gains to the extent of any uncalled capital commitment it has with the
50%or less owned company. Deferred gain activity related to these transactions for the years ended
31was as follows (in thousands):
The assets, liabilities and results of operations of certain consolidated subsidiaries are measured using their functional currency, which is the currency of the primary foreign economic environment in which they operate. Upon consolidating these subsidiaries with the Company, their assets and liabilities are translated to U.S. dollars at currency exchange rates as of the consolidated balance sheet dates and their revenues and expenses are translated at the weighted average currency exchange rates during the applicable reporting periods. Translation adjustments resulting from the process of translating these subsidiaries' financial statements are reported in other comprehensive loss in the accompanying consolidated statements of comprehensive loss.
Foreign Currency Translation.
Certain consolidated subsidiaries enter into transactions denominated in currencies other than their functional currency. Gains and losses resulting from changes in currency exchange rates between the functional currency and the currency in which a transaction is denominated are included in foreign currency losses, net in the accompanying consolidated statements of loss in the period in which the currency exchange rates change.
Foreign Currency Transactions.
The components of accumulated other comprehensive loss were as follows (in thousands):
Accumulated Other Comprehensive Loss.
Loss Per Share.
Basic loss per common share of the Company is computed based on the weighted average number of common shares issued and outstanding during the relevant periods. Diluted loss per common share of the Company is computed based on the weighted average number of common shares issued and outstanding plus the effect of potentially dilutive securities through the application of the treasury stock and if-converted methods. Dilutive securities for this purpose assumes restricted stock grants have vested, common shares have been issued pursuant to the exercise of outstanding stock options and common shares have been issued pursuant to the conversion of the Convertible Senior Notes. For the years ended
December 31, 2018,
2016,diluted loss per common share of the Company excluded
4,070,500shares, respectively, issuable upon the conversion of the Convertible Senior Notes as the effect of their inclusion in the computation would be anti-dilutive or were contingent upon the Spin-off. In addition, for the years ended
December 31, 2018and
2017,diluted loss per common share of the Company excluded
121,693shares, respectively, of restricted stock and
613,700outstanding stock options as the effect of their inclusion in the computation would be anti-dilutive.
New Accounting Pronouncements.
May 28, 2014,the Financial Accounting Standards Board ("FASB") issued Accounting Standards Update ("ASU")
"Revenue from Contracts with Customers (Topicto clarify the principles for recognizing revenue and to develop a common revenue standard and disclosure requirements. The new standard supersedes current revenue recognition requirements and industry-specific guidance. Under the new standard, revenue is recognized when a customer obtains control of promised goods or services in an amount that reflects the consideration the entity expects to receive in exchange for those goods or services. The Company adopted this new standard on
January 1, 2018using the modified retrospective approach by recognizing the cumulative effect of initially applying the new standard as an adjustment to the opening balance of retained earnings. The Company implemented the necessary changes to its business processes, systems and controls to support recognition and disclosure of this ASU upon adoption. The Company's revenues are primarily based on leases or rental agreements with customers which are
notaddressed in the new standard. As a result, the adoption of the new accounting standard did
nothave a material effect on the Company's consolidated financial position, results of operations or cash flows, but did result in increased disclosures related to revenue recognition policies.
February 25, 2016,the FASB issued a comprehensive new leasing standard meant to improve transparency and comparability among companies by requiring lessees to recognize a lease liability and a corresponding lease asset for virtually all lease contracts. It also requires additional disclosures about leasing arrangements. The Company will adopt the new standard on
January 1, 2019and will apply the transition provisions of the new standard at its adoption date with recognition of a cumulative-effect adjustment to the opening balance of retained earnings. The adoption of the new standard will have a material impact on the Company's consolidated financial position, results of operations and cash flows. The adjustment to the Company's balance sheet on
January 1, 2019will include the addition of
$33.9million of right-of-use assets,
n in lease liability, and a cumulative-effect adjustment to the opening balance of retained earnings of
$1.8million for certain of its equipment, office and land leases. In addition, unamortized deferred gains for
fourvessels leased under sale-leaseback arrangements will be fully recognized as an adjustment to the opening balance of retained earnings of
$8.7million, net of tax.
October 24, 2016,the FASB issued a new accounting standard, which requires companies to account for the income tax effects of intercompany sales and transfers of assets other than inventory. The Company adopted the new standard on
January 1, 2018,resulting in a reduction of
$12.1million to the Company's opening retained earnings.
2018,the FASB issued ASU
Fair Value Measurement (Topic
. This new guidance modifies the disclosure requirements related to fair value measurement. The new guidance is effective for fiscal years beginning after
December 15, 2019.The effects of this standard on our financial position or reporting is
notexpected to be material.
2018,the FASB issued ASU
Intangibles-Goodwill and Other-Internal-Use Software (Subtopic. The new guidance reduces complexity for the accounting for costs of implementing a cloud computing service arrangement and aligns the requirements for capitalizing implementation costs incurred in a hosting arrangement that is a service contract with the requirements for capitalizing implementation costs incurred to develop or obtain internal-use software (and hosting arrangements that include an internal use software license). For public companies, the amendments in this ASU are effective for fiscal years, and interim periods within those fiscal years, beginning after
December 15, 2019,with early adoption permitted. Implementation should be applied either retrospectively or prospectively to all implementation cost incurred after the date of adoption. The effects of this standard on our financial position, results of operations or cash flows are
notexpected to be material.
The entire disclosure for the basis of accounting, or basis of presentation, used to prepare the financial statements (for example, US Generally Accepted Accounting Principles, Other Comprehensive Basis of Accounting, IFRS).
Reference 1: http://fasb.org/us-gaap/role/ref/legacyRef