Company: TDDWW
Filing Date: 2025-05-05
Form Type: 10-Q
Source: 0001437749-25-014565
Chunk: 41

Company: TIDEWATER INC
Filing Date: 2025-05-05
Form: 10-Q
Item: Part I, Item 1
Chunk 41
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 global economy and our business. After the end of the first quarter of 2025, two events emerged that could impact our future operations. First, in early April, OPEC+ announced plans to increase production starting in May, which caused oil prices to drop to the low $60s per barrel, compared to the first quarter 2025 range of $66 to $80 per barrel. Simultaneously, the U.S. imposed worldwide tariffs, further reducing oil prices and significantly lowering values across virtually every stock market globally. Within a week, these tariffs were rescinded for at least 90 days, except for those on Chinese imports, leading to a partial recovery in both the market and oil prices. These actions have injected considerable uncertainty into our business and the global economy. While offshore drilling projects are typically long-cycle and do not immediately react to moderate declines in oil and gas prices, sustained Brent oil prices in the low $60s per barrel may delay drilling projects that were initially expected to commence in late 2025 and early 2026.

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RESULTS OF OPERATIONS

Each of our five operating segments is led by senior management, the results are reviewed and resources are allocated by our Chief Executive Officer, the chief operating decision maker. Discrete financial information is available for each of the segments, and our Chief Executive Officer uses the results of each of the operating segments for resource allocation and performance evaluation.

The results of operations tables included below for the total company and the individual segments disclose financial results supplemented with average total vessels, vessel utilization and average day rates.

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

Total vessel utilization is calculated on all vessels in service (which includes stacked vessels, vessels held for sale and vessels in drydock). Active utilization is calculated