Annual Report for Fiscal Year Ending 12-31, 2025 (Form 10-K)

MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS

The following Management's Discussion and Analysis of Financial Condition and Results of Operations (MD&A) should be read in conjunction with the accompanying Consolidated Financial Statements included in Item 8 of this Form 10-K. The following discussion and analysis contain forward-looking statements that involve risks and uncertainties. Our future results of operations could differ materially from our historical results or those anticipated in our forward-looking statements as a result of certain factors, including those set forth under "Risk Factors" in Item 1A and elsewhere in this Form 10-K. With respect to this section, the cautionary language applicable to such forward-looking statements described under "Forward-Looking Statements" found before Item 1 of this Form 10-K is incorporated by reference into this Item 7.

EXECUTIVE SUMMARY AND CURRENT BUSINESS OUTLOOK

Tidewater

We are one of the most experienced international operators in the offshore energy industry with a history spanning over 65 years. Our vessels and associated vessel services provide support for all phases of offshore oil and gas exploration, development and production as well as windfarm development and maintenance. These services include towing and anchor handling for mobile offshore drilling units; transporting supplies and personnel necessary to sustain drilling, workover and production activities; providing offshore construction and seismic and subsea support; delivering geotechnical survey support for windfarm construction, and offering a variety of other specialized services such as pipe laying and cable laying. In addition, we believe we have the broadest geographic operating footprint in the offshore vessel industry. Our global operating footprint allows us to react quickly to changing local market conditions and to be responsive to the changing requirements of the many customers with which we believe we have strong relationships.

On February 22, 2026, we entered into a definitive agreement to acquire all outstanding shares of Wilson Sons Ultratug Participações S.A and its affiliate Atlantic Offshore Services S.A. (collectively, the Wilson Companies) from Wilson Sons S.A., Ultranav International II, S.A. and Remolcadores Ultratug Limitada (collectively, the Wilson Sellers). The Wilson Companies own 22 platform supply vessels operating in Brazil. We will pay the Wilson Sellers an aggregate cash purchase price of $500.0 million on a debt free, cash free basis, subject to adjustments, including a reduction for the assumption of the Wilson Companies' debt which was approximately $261.0 million as of September 30, 2025. The final debt amount will be determined upon completion of this transaction. The transaction is subject to customary closing conditions, including approval from the Brazilian Antitrust Authority and the consent of the lenders to the Wilson Companies, and is expected to close late in the second quarter of 2026.

In the fourth quarter of 2025, we completed a strategic internal restructuring of our vessel ownership (Vessel Realignment) to consolidate a significant portion of the fleet into a single, wholly owned U.S. entity. As a result, we recognized a one-time, non-cash deferred tax benefit in the Consolidated Income Statement for the year ended December 31, 2025.

On July 7, 2025, we issued $650.0 million in 9.125% Senior Notes that mature in July 2030 (2030 Notes). With the proceeds of the offering, we redeemed most of our outstanding debt as of June 30, 2025, including accrued interest and early redemption premiums. Also on July 7, 2025, we executed the $250.0 million Revolving Credit Facility that replaced our previous $25.0 million credit facility. As of the date of this filing, no amounts have been drawn under the Revolving Credit Facility.

On March 7, 2023, we entered into an Agreement for the Sale and Purchase of Vessels, Charter Parties and Other Assets, which was amended on June 30, 2023 (the Acquisition Agreement), with certain subsidiaries of Solstad Offshore ASA, a Norwegian public limited company (collectively, the Sellers), pursuant to which we agreed to acquire from the Sellers (the Solstad Acquisition): (i) 37 platform supply vessels owned by the Sellers (the Solstad Vessels); and (ii) the charter parties governing certain of the Solstad Vessels. At closing, these vessels operated primarily in the North Sea, Australia and Brazil. On July 5, 2023, we completed the Solstad Acquisition for an aggregate cash purchase price of approximately $594.2 million, consisting of the $577.0 million base purchase price plus an initial $3.0 million purchase price adjustment; $3.2 million for working capital items comprised of fuel and lubricants; and $11.0 million in estimated transaction costs, consisting primarily of advisory and legal fees. The purchase price was funded through a combination of cash on hand and net proceeds from both the Senior Secured Term Loan and the 10.375% Senior Unsecured Notes due July 2028.

Prior to August 1, 2023, we had outstanding Series A Warrants, with an exercise price of $57.06 and Series B Warrants, with an exercise price of $62.28, both with an expiration date of July 31, 2023. During July 2023, an aggregate of approximately 2.0 million Series A Warrants and Series B Warrants were exercised, and we issued 1.9 million shares of common stock in exchange for $111.5 million in cash proceeds. All remaining unexercised Series A Warrants and Series B Warrants, approximately 3.1 million in the aggregate, expired according to their terms on July 31, 2023.

At December 31, 2025, we owned 208 vessels with an average age of 13.1 years available to serve the global offshore energy industry.

MD&A Objective and Principal Factors That Drive Our Results, Cash Flows and Liquidity

Our MD&A is designed to provide information about our financial condition and results of operations from management's perspective.

Our revenues, net earnings and cash flows from operations are largely dependent upon the activity level of our offshore marine vessel fleet. Our business activity is largely dependent on the level of oil and gas exploration, development and production activity of our customers. Our customers' business activity, in turn, is dependent on current and expected oil and gas prices, which fluctuate depending on expected future levels of supply and demand for oil and gas, and on estimates of the cost to find, develop and produce oil and gas reserves. Our objective throughout MD&A is to discuss how these factors affected our historical results and, where applicable, how we expect these factors to impact our future results and future liquidity.

Our revenues are driven primarily by our active fleet size, active vessel utilization and day rates. Because a sizeable portion of our operating and depreciation costs do not change proportionally with changes in revenue, our operating profit is largely dependent on revenue levels.

Operating costs consist primarily of crew costs, repair and maintenance costs, insurance costs, fuel, lube oil and supplies costs and other vessel operating costs. Fleet size, fleet composition, geographic areas of operation, supply and demand for marine personnel, and local labor requirements are the major factors impacting overall crew costs in all segments. In addition, our newer, more technologically sophisticated vessels generally require a greater number of specially trained, more highly compensated fleet personnel than our older, smaller and less sophisticated vessels. Crew costs may increase if competition for skilled personnel intensifies.

Costs related to the recertification of vessels are deferred and amortized over a 30-month period on a straight-line basis. Maintenance costs incurred at the time of the recertification drydocking not related to the recertification of the vessel are expensed as incurred. Costs related to vessel improvements that either extend the vessel's useful life or increase the vessel's functionality are capitalized and depreciated.

Insurance costs are dependent on a variety of factors, including our safety record and pricing in the insurance markets, and can fluctuate over time. Our vessels are generally insured for up to their estimated fair market value in order to cover damage or loss. We also purchase coverage for potential liabilities stemming from third-party losses and cybersecurity breaches with limits that we believe are reasonable for our business and operations, but do not generally purchase business interruption insurance or similar coverage. During the past three years, we have not incurred any material costs, fines or penalties due to a direct or third-party vendor cybersecurity breach. Insurance limits are reviewed annually, and third-party coverage is purchased based on the expected scope of ongoing operations and the cost of third-party coverage.

Fuel and lube costs can fluctuate in any given period depending on the number and distance of vessel mobilizations, the number of active vessels off-hire, drydockings, and changes in fuel prices. Generally, our customers are responsible for fuel costs when our vessels are on-hire, and we are responsible for fuel costs when our vessels are off-hire or in drydock. We also incur vessel operating costs aggregated as "other" vessel operating costs. These costs consist of brokers' commissions, training costs, satellite communication fees, agent fees, port fees, freight and other miscellaneous costs.

We discuss our liquidity in terms of cash on hand and cash flow that we generate from our operations. Our primary sources of capital have been our cash on hand, internally generated funds including operating cash flow, vessel sales and long-term debt financing. From time to time, we also issue stock or stock-based financial instruments either in the open market or as currency in acquisitions. This ability is impacted by existing market conditions.

Industry Conditions and Outlook

Our business is exposed to numerous macro factors that influence our outlook and expectations. Our outlook and expectations described herein are based solely on the market as we see it today, and therefore, subject to various changing conditions that impact the oil and gas industry.

Our outlook is largely driven by expectations for the worldwide demand for hydrocarbons, and expectations surrounding the demand for and the global supply of vessels that support the offshore energy industry. Our business is directly impacted by the level of activity in worldwide offshore oil and gas exploration, development and production, which in turn is influenced by trends in oil and gas prices and the condition of the energy markets, and in particular, the willingness of energy companies to spend on offshore operational activities and capital projects. This activity includes demand for offshore drilling rigs, which also directly impacts our industry. Oil and gas prices are affected by geopolitical and economic forces, including the fundamental principles of supply and demand. Offshore oil and gas exploration and development activities generally require higher oil or gas prices to justify the expenditure levels of offshore activities. Prices are subject to significant uncertainty and, as a result, are extremely volatile.

Over the past several years, oil and gas commodity pricing and the overall supply of and demand for oil and gas have been affected by (i) a global pandemic, which included lock downs by major oil consuming nations; (ii) ongoing global conflicts, notably in eastern Europe between Russia and Ukraine, in Venezuela, and numerous conflicts in the Middle East; (iii) Organization of Petroleum Exporting Countries Plus (OPEC+) production quotas, market share expectations and pricing considerations; (iv) resource growth in non-OPEC+ nations; (v) a capital allocation focus on returning capital to shareholders within the major oil and gas companies, thereby limiting funds previously available for resource development; (vi) economies of and monetary policies in major consuming nations; (vii) increased activism related to the perceived responsibility of the oil and gas sector for climate change; and (viii) U.S. trade policies that include substantial tariffs, causing increased market uncertainty and volatility. These factors have at various times caused or exacerbated significant swings in oil and gas pricing, which in turn has affected the capital budgets of oil and gas companies. Despite the volatility in spot oil prices seen in recent years, our customers tend to consider less volatile medium and long-term prices in making offshore investment decisions. In the medium term, we continue to see positive upstream investment momentum in both the international and domestic markets. We believe these markets are driven by resilient long-cycle offshore developments, production capacity expansions and increased resource exploitation activities. However, sustained oil prices in the low $60s per barrel may delay some drilling projects initially expected to commence in 2026.

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.

Total vessel utilization is calculated on all vessels in service (which includes stacked vessels, vessels held for sale and vessels in drydock or down for repair). Active utilization is calculated on all owned and bareboat chartered vessels except vessels held for sale and stacked vessels. 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. We consider a vessel to be stacked if the vessel crew is furloughed or substantially reduced and limited maintenance is performed on the vessel. Although not currently fulfilling charters, stacked vessels are considered in service and included in the calculation of our utilization statistics but excluded in the calculation of our active utilization statistics. We had eight stacked vessels at December 31, 2025 and one stacked vessel at December 31, 2024.

Vessel day rates are determined by the demand created largely through the level of offshore exploration, 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. 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. Vessel operating cost per active days is calculated based on total available days less stacked days.

Total vessels in service may also include vessels not owned by us and under bareboat charter agreements. We had three in 2023, 2024 and at the beginning of 2025, but one of the vessels was purchased by us in the third quarter of 2025 and is included in our owned vessel count. We gave notice to acquire both of the remaining vessels under bareboat charter, reclassifying them as finance leases, also now included in our owned vessel count. These vessels were included in all vessel statistics whether or not owned.

This section of this Form 10-K generally discusses activity in the years 2025, 2024 and 2023 and year-to-year comparisons between 2025 and 2024 and between 2024 and 2023.

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

Years Ended December 31, 2025 and 2024

		Year Ended December 31,
(In Thousands except for statistics)		2025				2024				Change				% Change
Total revenue		$	1,352,786			$	1,345,835			$	6,951				1	%
Costs and expenses:
Vessel operating costs:
Crew costs			402,290				416,276				13,986				3	%
Repair and maintenance			103,903				98,376				(5,527	)			(6	)%
Insurance			10,389				11,027				638				6	%
Fuel, lube and supplies			61,153				65,371				4,218				6	%
Other			102,847				102,057				(790	)			(1	)%
Total vessel operating costs			680,582				693,107				12,525				2	%
Costs of other operating revenues			6,420				3,555				(2,865	)			(81	)%
General and administrative			134,531				110,817				(23,714	)			(21	)%
Depreciation and amortization			262,339				242,770				(19,569	)			(8	)%
Gain on asset dispositions, net			(13,682	)			(15,762	)			(2,080	)			(13	)%
Total costs and expenses			1,070,190				1,034,487				(35,703	)			(3	)%
Other income (expense):
Foreign exchange gain (loss)			22,683				(15,276	)			37,959				248	%
Interest income and other, net			8,169				6,383				1,786				28	%
Loss on early extinguishment of debt			(27,113	)			-				(27,113	)			100	%
Interest and other debt costs, net			(66,090	)			(72,967	)			6,877				9	%
Total other expense			(62,351	)			(81,860	)			19,509				24	%
Income before income taxes			220,245				229,488				(9,243	)			(4	)%
Income tax expense (benefit)			(113,208	)			50,216				163,424				325	%
Net income		$	333,453			$	179,272			$	154,181				86	%
Select operating statistics:
Utilization			76.1	%			79.0	%			(2.9	)%
Active utilization			78.7	%			79.2	%			(0.5	)%
Average vessel day rates		$	22,573			$	21,273			$	1,300				6.1	%
Vessel operating cost per active day		$	9,002			$	8,760			$	(242	)			(2.8	)%
Average total vessels			213				217				(4	)
Average stacked vessels			(7	)			(1	)			(6	)
Average active vessels			206				216				(10	)

Revenue:

	o	Increase primarily driven by higher average day rates partially offset by lower utilization and lower vessel count.
	o	Slight decrease in active utilization primarily due to higher idle time between contracts offset by reduced drydock and repair days.

Vessel operating costs:

o

Decrease primarily due to lower crew costs in Asia Pacific and Americas segments; and lower fuel and supplies costs in Americas and Europe/Mediterranean segments. These cost reductions were partially offset by higher repair costs in the West Africa segment.

General and administrative:

o

Increase primarily due to higher personnel costs, higher stock compensation and charges associated with a transition and separation agreement. We also incurred higher professional fees in 2025 compared to 2024. In 2024, we had a significant recovery of bad debt expense that did not recur in 2025.

Depreciation and amortization:

o

Increase primarily due to higher amortization of drydock costs.

Gain on asset dispositions, net:

o

During 2025, we sold 12 vessels for approximately $17.6 million in proceeds and recognized a net gain of $13.6 million on the dispositions. During 2024, we sold or recycled six vessels and other assets.

Interest income and other, net:

o

Increase primarily due to a Brazil legal case recovery, which included an interest component.

Loss on early extinguishment of debt:

o

Increase primarily due to the early redemption premiums incurred and the write off of unamortized debt issuance costs in conjunction with the redemption of the Senior Secured Term Loan, the 10.375% Senior Unsecured Notes due July 2028 and the 8.5% Senior Secured Notes due November 2026.

Interest expense:

o

Decrease primarily due to lower average debt levels and interest rates in 2025 compared to 2024 as a result of significant principal payments made in the latter part of 2024 and during the first six months of 2025.

Foreign exchange gains/losses:

o

Our foreign exchange gains in 2025 and losses in 2024 were primarily the result of the settlement and revaluation of various foreign currency balances due to a weakening/strengthening of the U.S. Dollar against the Central African CFA Franc, West African CFA Franc, Norwegian Kroner, Brazilian Real, Angola Kwanza, British Pound and Euro.

Income tax expense:

o

We are subject to taxes on our income in many jurisdictions worldwide and our actual tax expense can vary disproportionally to overall net income due to the mix of profits and losses in these foreign tax jurisdictions. Our tax benefit for 2025 is primarily related to the effect of the Vessel Realignment and release of valuation allowance against certain U.S. deferred tax assets, reduced by the impact from Pillar Two taxes and taxes on our operations in foreign countries. Tax expense for 2024 is mainly attributable to taxes on our operations in foreign countries.

Americas Segment Operations.

		Year Ended December 31,
(In Thousands except for statistics)		2025				2024				Change				% Change
Vessel revenues:		$	270,229			$	261,929			$	8,300				3	%
Vessel operating costs:
Crew costs			82,155				87,545				5,390				6	%
Repair and maintenance			20,732				20,677				(55	)			(0	)%
Insurance			2,032				2,034				2				0	%
Fuel, lube and supplies			10,035				13,635				3,600				26	%
Other			26,567				24,391				(2,176	)			(9	)%
Total vessel operating costs			141,521				148,282				6,761				5	%
General and administrative expense			14,927				14,046				(881	)			(6	)%
Depreciation and amortization			48,506				44,822				(3,684	)			(8	)%
Vessel operating profit		$	65,275			$	54,779			$	10,496				19	%
Select operating statistics:
Utilization			72.6	%			76.3	%			(3.7	)%
Active utilization			77.8	%			76.9	%			0.9	%
Average vessel day rates		$	29,839			$	27,128			$	2,711				10.0	%
Vessel operating cost per active day		$	12,134			$	11,846			$	(288	)			(2.4	)%
Average total vessels			34				34				-
Average stacked vessels			(2	)			-				(2	)
Average active vessels			32				34				(2	)

Vessel revenue:

	o	Increase primarily driven by higher average day rates and the almost 1% increase in active utilization.
	o	Active vessels decreased primarily due to stacking two vessels in 2025.

Vessel operating costs:

o

Decrease primarily due to lower crew costs associated with lower activity in Mexico, reduced manning levels resulting from higher idle and stacked days, and the sale of a vessel in 2025. We also experienced lower fuel costs in 2025 due to lower drydock days. These decreases were partially offset by an increase due to a legal claim accrual.

General and administrative expense:

o

Increase primarily due to a credit to bad debt expense in 2024.

Depreciation and amortization expense:

o

Increase primarily due to higher amortization of drydock costs.

Asia Pacific Segment Operations.

		Year Ended December 31,
(In Thousands except for statistics)		2025				2024				Change				% Change
Vessel revenues		$	189,747			$	210,328			$	(20,581	)			(10	)%
Vessel operating costs:
Crew costs			74,040				88,968				14,928				17	%
Repair and maintenance			12,904				13,999				1,095				8	%
Insurance			1,161				1,197				36				3	%
Fuel, lube and supplies			7,889				8,834				945				11	%
Other			9,572				10,311				739				7	%
Total vessel operating costs			105,566				123,309				17,743				14	%
General and administrative expense			9,080				8,544				(536	)			(6	)%
Depreciation and amortization			21,894				18,606				(3,288	)			(18	)%
Vessel operating profit		$	53,207			$	59,869			$	(6,662	)			(11	)%
Select operating statistics:
Utilization			72.9	%			79.8	%			(6.9	)%
Active utilization			72.9	%			79.8	%			(6.9	)%
Average vessel day rates		$	37,102			$	34,646			$	2,456				7.1	%
Vessel operating cost per active day		$	15,089			$	16,299			$	1,210				7.4	%
Average total vessels			19				21				(2	)
Average stacked vessels			-				-				-
Average active vessels			19				21				(2	)

Vessel revenue:

	o	Decrease primarily driven by a lower vessel count in Australia and lower utilization, partially offset by higher average day rates.
	o	Active utilization decreased primarily due to higher idle days between contracts.

Vessel operating costs:

o

Decrease primarily due to lower crew costs resulting from a lower proportion of vessels working in Australia where operating costs are significantly higher.

General and administrative expense:

o

Increase primarily due to higher personnel costs.

Depreciation and amortization expense:

o

Increase primarily due to higher amortization due to increased drydock activity partially offset by a decrease in depreciation due to fewer vessels operating in the segment.

Middle East Segment Operations.

		Year Ended December 31,
(In Thousands except for statistics)		2025				2024				Change				% Change
Vessel revenues		$	172,573			$	152,187			$	20,386				13	%
Vessel operating costs:
Crew costs			54,330				53,390				(940	)			(2	)%
Repair and maintenance			19,070				17,595				(1,475	)			(8	)%
Insurance			1,819				1,882				63				3	%
Fuel, lube and supplies			10,995				10,019				(976	)			(10	)%
Other			18,061				24,076				6,015				25	%
Total vessel operating costs			104,275				106,962				2,687				3	%
General and administrative expense			11,208				11,320				112				1	%
Depreciation and amortization			33,174				30,135				(3,039	)			(10	)%
Vessel operating profit		$	23,916			$	3,770			$	20,146				534	%
Select operating statistics:
Utilization			81.8	%			83.7	%			(1.9	)%
Active utilization			81.8	%			83.7	%			(1.9	)%
Average vessel day rates		$	13,316			$	11,527			$	1,789				15.5	%
Vessel operating cost per active day		$	6,585			$	6,783			$	198				2.9	%
Average total vessels			43				43				-
Average stacked vessels			-				-				-
Average active vessels			43				43				-

Vessel revenue:

	o	Increase primarily driven by higher day rates, partially offset by lower utilization.
	o	Utilization decreased primarily due to higher drydock days.

Vessel operating costs:

o

Decrease primarily due to lower mobilization and training costs partially offset by higher repair costs.

General and administrative expense:

o

No significant variances.

Depreciation and amortization expense:

o

Increase primarily due to higher amortization of drydock costs in 2025.

Europe/Mediterranean Segment Operations.

		Year Ended December 31,
(In Thousands except for statistics)		2025				2024				Change				% Change
Vessel revenues		$	343,627			$	333,081			$	10,546				3	%
Vessel operating costs:
Crew costs			116,489				109,178				(7,311	)			(7	)%
Repair and maintenance			27,195				28,288				1,093				4	%
Insurance			2,868				3,171				303				10	%
Fuel, lube and supplies			12,020				14,650				2,630				18	%
Other			20,988				18,864				(2,124	)			(11	)%
Total vessel operating costs			179,560				174,151				(5,409	)			(3	)%
General and administrative expense			14,259				12,726				(1,533	)			(12	)%
Depreciation and amortization			92,114				92,331				217				0	%
Vessel operating profit		$	57,694			$	53,873			$	3,821				7	%
Select operating statistics:
Utilization			88.2	%			85.5	%			2.7	%
Active utilization			88.2	%			85.5	%			2.7	%
Average vessel day rates		$	21,188			$	20,855			$	333				1.6	%
Vessel operating cost per active day		$	9,790			$	9,411			$	(379	)			(4.0	)%
Average total vessels			50				51				(1	)
Average stacked vessels			-				-				-
Average active vessels			50				51				(1	)

Vessel revenue:

	o	Increase primarily driven by higher utilization and higher average day rates that was partially offset by a lower vessel count.
	o	Active utilization increased due to lower drydock and repair days.

Vessel operating costs:

o

Increase primarily due to higher crew costs associated with higher payroll tax expense. We also incurred higher other costs resulting from unplanned charges incidental to vessels being down for repair and higher training costs. Fuel costs decreased due to lower drydock and repair days.

General and administrative expense:

o

Increase primarily due to higher personnel costs and professional fees.

Depreciation and amortization expense:

o

Increase due to higher amortization of drydock costs.

West Africa Segment Operations.

		Year Ended December 31,
(In Thousands except for statistics)		2025				2024				Change				% Change
Vessel revenues		$	362,755			$	380,112			$	(17,357	)			(5	)%
Vessel operating costs:
Crew costs			75,276				77,195				1,919				2	%
Repair and maintenance			24,002				17,817				(6,185	)			(35	)%
Insurance			2,509				2,743				234				9	%
Fuel, lube and supplies			20,214				18,233				(1,981	)			(11	)%
Other			27,659				24,415				(3,244	)			(13	)%
Total vessel operating costs			149,660				140,403				(9,257	)			(7	)%
General and administrative expense			11,528				9,495				(2,033	)			(21	)%
Depreciation and amortization			62,894				53,782				(9,112	)			(17	)%
Vessel operating profit		$	138,673			$	176,432			$	(37,759	)			(21	)%
Select operating statistics:
Utilization			65.9	%			72.2	%			(6.3	)%
Active utilization			71.1	%			72.6	%			(1.5	)%
Average vessel day rates		$	22,723			$	21,173			$	1,550				7.3	%
Vessel operating cost per active day		$	6,543			$	5,664			$	(879	)			(15.5	)%
Average total vessels			66				68				(2	)
Average stacked vessels			(5	)			(1	)			(4	)
Average active vessels			61				67				(6	)

Vessel revenue:

	o	Decrease primarily driven by a lower vessel count and lower utilization because of increased idle and stacked days partially offset by higher average day rates.
	o	We took delivery of six new crew boats in 2025 and stacked some older crew boats, nine of which were sold.

Vessel operating costs:

o

Increase primarily due to higher repair costs and increased repair days; higher fuel costs associated with increased idle and stacked days; and higher other costs associated with a relief vessel engaged as a substitute for another vessel in drydock.

General and administrative expense:

o

Increase due to higher personnel costs and professional fees and a credit to bad debt expense in 2024.

Depreciation and amortization expense:

o

Increase primarily due to higher amortization of drydock costs.

Years Ended December 31, 2024 and 2023

		Year Ended December 31,
(In Thousands except for statistics)		2024				2023				Change				% Change
Total revenue		$	1,345,835			$	1,009,985			$	335,850				33	%
Costs and expenses:
Vessel operating costs:
Crew costs			416,276				329,473				(86,803	)			(26	)%
Repair and maintenance			98,376				78,716				(19,660	)			(25	)%
Insurance			11,027				9,297				(1,730	)			(19	)%
Fuel, lube and supplies			65,371				60,548				(4,823	)			(8	)%
Other			102,057				78,481				(23,576	)			(30	)%
Total vessel operating costs			693,107				556,515				(136,592	)			(25	)%
Costs of other operating revenues			3,555				4,342				787				18	%
General and administrative			110,817				95,283				(15,534	)			(16	)%
Depreciation and amortization			242,770				180,331				(62,439	)			(35	)%
Gain on asset dispositions, net			(15,762	)			(8,701	)			7,061				81	%
Total costs and expenses			1,034,487				827,770				(206,717	)			(25	)%
Other income (expense):
Foreign exchange loss			(15,276	)			(1,370	)			(13,906	)			(1015	)%
Equity in net earnings of unconsolidated companies			-				39				(39	)			100	%
Interest income and other, net			6,383				6,517				(134	)			(2	)%
Interest and other debt costs, net			(72,967	)			(48,472	)			(24,495	)			(51	)%
Total other expense			(81,860	)			(43,286	)			(38,574	)			(89	)%
Income before income taxes			229,488				138,929				90,559				(65	)%
Income tax expense			50,216				43,308				(6,908	)			(16	)%
Net income		$	179,272			$	95,621			$	83,651				(87	)%
Select operating statistics:
Utilization			79.0	%			79.1	%			(0.1	)%
Active utilization			79.2	%			81.2	%			(2.0	)%
Average vessel day rates		$	21,273			$	16,802			$	4,471				26.6	%
Vessel operating cost per active day		$	8,760			$	7,615			$	(1,145	)			(15.0	)%
Average total vessels			217				205				12
Average stacked vessels			(1	)			(5	)			4
Average active vessels			216				200				16

Revenue:

	o	Increase primarily driven by higher average day rates and the full year effect of the Solstad Acquisition, which added 37 vessels to our fleet on July 5, 2023.
	o	The Solstad vessels added $269.3 million to revenue in 2024 and $115.1 million in 2023, contributing $154.2 million to the revenue variance.
	o	Slight decrease in active utilization due to higher idle time between contracts and increased drydock days.

Vessel operating costs:

o

Increase primarily due to the additional active vessels in our fleet from the Solstad Acquisition, coupled with higher overall crew costs and higher repair costs associated with slightly higher repair days. In addition, there was higher other operating costs associated with increased brokerage commissions due to higher revenues; higher contract fines and penalties due to extended delayed drydocks; higher training costs; and increased amortization of mobilization costs.

General and administrative:

o

Increase primarily due to higher salaries and benefits due to additions in corporate and segment personnel and higher professional fees. This increase was partially offset by lower bad debt and transaction costs.

Depreciation and amortization:

o

Increase primarily due to depreciation and amortization of drydock costs related to the additional vessels acquired in the Solstad Acquisition.

Gain on asset dispositions, net:

o

During 2024, we sold or recycled six vessels and other assets. During 2023, we sold or recycled 15 vessels and other assets. We recognized significantly higher gains per vessel sold in 2024 due to a more favorable market for vessel sales.

Interest expense:

o

Increase primarily due to the addition of $575.0 million in long term debt, bearing interest of approximately 10.0%, to fund the Solstad vessel acquisition effective July 5, 2023.

Interest income and other, net:

	o	Interest income and other consists primarily of interest received on invested balances.
	o	During 2023, we recorded a $1.1 million charge resulting from a reduction in certain indemnification assets related to assumed tax liabilities acquired from Swire Pacific Offshore Holdings Limited (SPO) that were adjusted to reflect the expiration of the statute of limitations. This charge was offset by a corresponding decrease in income tax expense, which resulted in no impact on net income.
	o	During 2023, we recognized a $2.3 million settlement gain from our pension plan as we significantly reduced the number of plan participants and related pension liabilities.

Foreign exchange losses:

o

In 2024 and 2023, we experienced foreign currency exchange losses. The 2024 losses were significant due to a strengthening of the U.S. Dollar against the Mexican Peso, Norwegian Kroner, Brazilian Real, Australian Dollar and certain African currencies.

Income tax expense:

o

We are subject to taxes on our income in many jurisdictions worldwide and our actual tax expense can vary disproportionally to overall net income due to the mix of profits and losses in these foreign tax jurisdictions. Our tax expense for 2024 and 2023 is mainly attributable to taxes on our operations in foreign countries.

Americas Segment Operations.

		Year Ended December 31,
(In Thousands except for statistics)		2024				2023				Change				% Change
Vessel revenues		$	261,929			$	237,205			$	24,724				10	%
Vessel operating costs:
Crew costs			87,545				86,328				(1,217	)			(1	)%
Repair and maintenance			20,677				17,295				(3,382	)			(20	)%
Insurance			2,034				1,891				(143	)			(8	)%
Fuel, lube and supplies			13,635				13,175				(460	)			(3	)%
Other			24,391				19,232				(5,159	)			(27	)%
Total vessel operating costs			148,282				137,921				(10,361	)			(8	)%
General and administrative expense			14,046				15,105				1,059				7	%
Depreciation and amortization			44,822				41,215				(3,607	)			(9	)%
Vessel operating profit		$	54,779			$	42,964			$	11,815				27	%
Select operating statistics:
Utilization			76.3	%			82.0	%			(5.7	)%
Active utilization			76.9	%			84.4	%			(7.5	)%
Average vessel day rates		$	27,128			$	22,174			$	4,954				22.3	%
Vessel operating cost per active day		$	11,846			$	10,916			$	(930	)			(8.5	)%
Average total vessels			34				36				(2	)
Average stacked vessels			-				(1	)			1
Average active vessels			34				35				(1	)

Vessel revenue:

	o	Increase primarily driven by higher average day rates that was partially offset by lower utilization largely resulting from substantially higher drydock days.
	o	Solstad Acquisition added four vessels in 2024 and six vessels during the last six months in 2023 and contributed $19.2 million to the revenue variance.
	o	Active vessels decreased primarily due to vessel transfers to other segments.

Vessel operating costs:

o

Increase primarily due to higher repairs from substantially higher routine repairs performed while the vessels were in drydock. Crew costs increased due to the addition of Solstad Acquisition vessels. Certain contract fines and penalties related to delayed drydocks increased other operating costs.

General and administrative expense:

o

Decrease primarily due to higher bad debt expense in 2023.

Depreciation and amortization expense:

o

Increase primarily due to higher drydock activity that was partially offset by lower depreciation resulting from the lower vessel count.

Asia Pacific Segment Operations.

		Year Ended December 31,
(In Thousands except for statistics)		2024				2023				Change				% Change
Vessel revenues		$	210,328			$	122,235			$	88,093				72	%
Vessel operating costs:
Crew costs			88,968				41,940				(47,028	)			(112	)%
Repair and maintenance			13,999				9,212				(4,787	)			(52	)%
Insurance			1,197				794				(403	)			(51	)%
Fuel, lube and supplies			8,834				5,251				(3,583	)			(68	)%
Other			10,311				7,751				(2,560	)			(33	)%
Total vessel operating costs			123,309				64,948				(58,361	)			(90	)%
General and administrative expense			8,544				8,147				(397	)			(5	)%
Depreciation and amortization			18,606				10,669				(7,937	)			(74	)%
Vessel operating profit		$	59,869			$	38,471			$	21,398				56	%
Select operating statistics:
Utilization			79.8	%			82.3	%			(2.5	)%
Active utilization			79.8	%			83.0	%			(3.2	)%
Average vessel day rates		$	34,646			$	24,968			$	9,678				38.8	%
Vessel operating cost per active day		$	16,299			$	11,057			$	(5,242	)			(47.4	)%
Average total vessels			21				16				5
Average stacked vessels			-				-				-
Average active vessels			21				16				5

Vessel revenue:

	o	Increase primarily driven by higher average day rates; the full year effect of the Solstad Acquisition; and the larger proportion of vessels working in Australia where average day rates are higher.
	o	Solstad Acquisition added four vessels in 2024 and during the last six months of 2023 and contributed $18.7 million to the revenue variance.
	o	Active utilization decreased due to higher drydock days and higher idle days between contracts.
	o	Active vessels increased primarily due to the Solstad vessel acquisitions.

Vessel operating costs:

o

Increase primarily due to the additional active vessels and by the increased proportion of vessels working in Australia where crew costs are higher.

General and administrative expense:

o

Increase primarily due to higher personnel costs.

Depreciation and amortization expense:

o

Increase primarily due to additional vessels and higher drydock activity.

Middle East Segment Operations.

		Year Ended December 31,
(In Thousands except for statistics)		2024				2023				Change				% Change
Vessel revenues		$	152,187			$	135,375			$	16,812				12	%
Vessel operating costs:
Crew costs			53,390				53,416				26				0	%
Repair and maintenance			17,595				16,187				(1,408	)			(9	)%
Insurance			1,882				1,784				(98	)			(5	)%
Fuel, lube and supplies			10,019				12,092				2,073				17	%
Other			24,076				17,127				(6,949	)			(41	)%
Total vessel operating costs			106,962				100,606				(6,356	)			(6	)%
General and administrative expense			11,320				9,254				(2,066	)			(22	)%
Depreciation and amortization			30,135				26,566				(3,569	)			(13	)%
Vessel operating profit (loss)		$	3,770			$	(1,051	)		$	4,821				459	%
Select operating statistics:
Utilization			83.7	%			80.9	%			2.8	%
Active utilization			83.7	%			80.9	%			2.8	%
Average vessel day rates		$	11,527			$	10,394			$	1,133				10.9	%
Vessel operating cost per active day		$	6,783			$	6,253			$	(530	)			(8.5	)%
Average total vessels			43				44				(1	)
Average stacked vessels			-				-				-
Average active vessels			43				44				(1	)

Vessel revenue:

o

Increase primarily driven by higher average day rates and higher active utilization largely due to substantially fewer mobilization days in 2024.

Vessel operating costs:

o

Increase primarily due to the accelerated amortization of deferred mobilization costs due to cancelled contracts; higher repair costs due to an increase in vessel repair days; and increased training costs.

General and administrative expense:

o

Increase primarily due to higher personnel costs.

Depreciation and amortization expense:

o

Increase primarily due to higher drydock activity and higher depreciation due to additional equipment on several vessels.

Europe/Mediterranean Segment Operations.

		Year Ended December 31,
(In Thousands except for statistics)		2024				2023				Change				% Change
Vessel revenues		$	333,081			$	230,217			$	102,864				45	%
Vessel operating costs:
Crew costs			109,178				78,613				(30,565	)			(39	)%
Repair and maintenance			28,288				17,029				(11,259	)			(66	)%
Insurance			3,171				2,218				(953	)			(43	)%
Fuel, lube and supplies			14,650				11,697				(2,953	)			(25	)%
Other			18,864				13,758				(5,106	)			(37	)%
Total vessel operating costs			174,151				123,315				(50,836	)			(41	)%
General and administrative expense			12,726				10,063				(2,663	)			(26	)%
Depreciation and amortization			92,331				63,152				(29,179	)			(46	)%
Vessel operating profit		$	53,873			$	33,687			$	20,186				60	%
Select operating statistics:
Utilization			85.5	%			87.4	%			(1.9	)%
Active utilization			85.5	%			87.4	%			(1.9	)%
Average vessel day rates		$	20,855			$	18,514			$	2,341				12.6	%
Vessel operating cost per active day		$	9,411			$	8,758			$	(653	)			(7.5	)%
Average total vessels			51				38				13
Average stacked vessels			-				-				-
Average active vessels			51				38				13

Vessel revenue:

	o	Increase primarily driven by higher average day rates and an increase in active vessels in the area resulting primarily from the Solstad Acquisition.
	o	Solstad Acquisition added 26 vessels in 2024 and 24 vessels during the last six months of 2023 and contributed $86.4 million to the revenue variance.
	o	Active utilization decreased due to higher drydock days and increased idle time between contracts.
	o	Active vessels increased primarily due to the Solstad vessel acquisition.

Vessel operating costs:

	o	Increase primarily due to the additional vessels in the segment.
	o	Solstad Vessels added $86.7 million and $37.8 million to operating costs in 2024 and 2023, respectively.

General and administrative expense:

o

Increase primarily due to higher personnel costs as a result of the addition of onshore personnel from the Solstad Acquisition.

Depreciation and amortization expense:

o

Increase primarily due to the significant depreciation associated with the additional vessels acquired from Solstad plus higher amortization related to an increase in drydock activity.

West Africa Segment Operations.

		Year Ended December 31,
(In Thousands except for statistics)		2024				2023				Change				% Change
Vessel revenues		$	380,112			$	273,961			$	106,151				39	%
Vessel operating costs:
Crew costs			77,195				69,176				(8,019	)			(12	)%
Repair and maintenance			17,817				18,993				1,176				6	%
Insurance			2,743				2,610				(133	)			(5	)%
Fuel, lube and supplies			18,233				18,333				100				1	%
Other			24,415				20,613				(3,802	)			(18	)%
Total vessel operating costs			140,403				129,725				(10,678	)			(8	)%
General and administrative expense			9,495				9,281				(214	)			(2	)%
Depreciation and amortization			53,782				36,508				(17,274	)			(47	)%
Vessel operating profit		$	176,432			$	98,447			$	77,985				79	%
Select operating statistics:
Utilization			72.2	%			71.1	%			1.1	%
Active utilization			72.6	%			75.8	%			(3.2	)%
Average vessel day rates		$	21,173			$	14,917			$	6,256				41.9	%
Vessel operating cost per active day		$	5,664			$	5,302			$	(362	)			(6.8	)%
Average total vessels			68				71				(3	)
Average stacked vessels			(1	)			(4	)			3
Average active vessels			67				67				-

Vessel revenue:

	o	Increase primarily driven by the increase in average day rates.
	o	Solstad Acquisition added three vessels in 2024 and 2023, respectively, and contributed $29.3 million to the revenue increase.
	o	Active utilization decreased due to higher idle time between contracts.

Vessel operating costs:

	o	Increase primarily due to higher crew wages and a nonrecurring customs duty settlement in the second quarter of 2024.
	o	Solstad Vessels added $8.7 million and $4.4 million to operating costs for 2024 and 2023, respectively.

General and administrative expense:

o

No significant variances.

Depreciation and amortization expense:

o

Increase primarily due to significantly increased drydock activity and higher depreciation.

Vessel Dispositions

We seek opportunities to sell and/or recycle our older vessels when market conditions warrant and opportunities arise. Most of our vessels are sold to buyers who do not compete with us in the offshore energy industry. During 2025, we sold 12 vessels from our active fleet, nine of which were crew vessels. During 2024, we sold six vessels from our active fleet. During 2023, we sold or recycled eight vessels designated as held for sale and sold seven vessels from our active fleet. The number of vessel dispositions by segment were as follows:

		Year Ended				Year Ended				Year Ended
		December 31, 2025				December 31, 2024				December 31, 2023
Number of vessel dispositions by segment:
Americas			1				1				1
Asia Pacific			1				-				1
Middle East			-				-				1
Europe/Mediterranean			-				1				-
West Africa			10				4				12
Total			12				6				15

General and Administrative Expenses

Consolidated general and administrative expenses and the related percentage of each component to total revenues are as follows:

(In Thousands)		Year Ended								Year Ended								Year Ended
		December 31, 2025								December 31, 2024								December 31, 2023
Personnel		$	75,995				5	%		$	67,156				5	%		$	50,343				5	%
Office and property			19,126				1	%			17,480				1	%			20,998				2	%
Professional services			24,188				2	%			19,264				1	%			16,498				2	%
Transaction or restructuring charges (A)			8,345				1	%			716				0	%			1,090				0	%
Other			6,877				1	%			6,201				1	%			6,354				1	%
		$	134,531				10	%		$	110,817				8	%		$	95,283				10	%

(In Thousands)		Year Ended								Year Ended								Year Ended
		December 31, 2025								December 31, 2024								December 31, 2023
Vessel operations:
Continuing operations		$	61,002				45	%		$	55,492				50	%		$	50,785				53	%
Transaction or restructuring charges (A)			-				0	%			639				1	%			1,065				1	%
Total vessel operations			61,002				45	%			56,131				51	%			51,850				54	%
Corporate:
Continuing operations			65,184				49	%			54,609				49	%			43,408				46	%
Transaction or restructuring charges (A)			8,345				6	%			77				0	%			25				0	%
Total corporate			73,529				55	%			54,686				49	%			43,433				46	%
Total		$	134,531				100	%		$	110,817				100	%		$	95,283				100	%

(A)

Transaction or restructuring charges for the years ended December 31, 2025, 2024 and 2023 include $8.3 million, $0.7 million and $1.1 million, respectively, of transaction or severance and termination benefits.

General and administrative expenses for the year ended December 31, 2025 increased compared to the year ended December 31, 2024 primarily due to higher compensation costs and professional fees. General and administrative expenses for the year ended December 31, 2024 increased compared to the year ended December 31, 2023 primarily due to higher compensation costs and professional fees.

Liquidity, Capital Resources and Other Matters

Our objective in financing our business is to maintain and preserve adequate financial resources and sufficient levels of liquidity. As of December 31, 2025, we had $581.6 million in cash and cash equivalents, and a borrowing capacity under our Revolving Credit Facility of $250.0 million for which any future borrowings would be due April 2030. On July 7, 2025, we issued $650.0 million in 9.125% Senior Notes that mature in July 2030 (2030 Notes). With the proceeds of the offering, we redeemed most of our outstanding debt as of June 30, 2025, including accrued interest and early redemption premiums. Also on July 7, 2025, we executed the $250.0 million Revolving Credit Facility that replaced our previous $25.0 million credit facility. As of the date of this filing, no amounts have been drawn under the Revolving Credit Facility.

In addition, on February 22, 2026, we entered into a definitive agreement to acquire all outstanding shares of Wilson Sons Ultratug Participações S.A and its affiliate Atlantic Offshore Services S.A. (collectively, the Wilson Companies) from Wilson Sons S.A., Ultranav International II, S.A. and Remolcadores Ultratug Limitada (collectively, the Wilson Sellers). The Wilson Companies own 22 platform supply vessels operating in Brazil. We will pay the Wilson Sellers an aggregate cash purchase price of $500.0 million on a debt free, cash free basis, subject to adjustments, including a reduction for the assumption of the Wilson Companies' debt which was approximately $261.0 million as of September 30, 2025. The final debt amount will be determined upon completion of this transaction. The transaction is subject to customary closing conditions, including approval from the Brazilian Antitrust Authority and the consent of the lenders to the Wilson Companies, and is expected to close late in the second quarter of 2026.

We believe cash and cash equivalents and net cash provided by operating activities, supplemented with our revolving credit capacity, provides us with sufficient liquidity to fund our obligations and meet our liquidity requirements, including the acquisition of the Wilson Companies.

Our cash and cash equivalents include restricted cash and other amounts held by foreign subsidiaries, the majority of which is available to us without adverse tax consequences. As of December 31, 2025 approximately 24% of our cash balance held in foreign subsidiaries is awaiting U.S. dollar conversion.

We currently expect earnings by our foreign subsidiaries will be indefinitely reinvested in foreign jurisdictions to fund strategic initiatives (such as investment, expansion and acquisitions), fund working capital requirements and repay intercompany liabilities of our foreign subsidiaries in the normal course of business. Moreover, we do not currently intend to repatriate earnings of our foreign subsidiaries to the U.S. because cash generated from our domestic businesses and the repayment of intercompany liabilities from foreign subsidiaries are currently sufficient to fund the cash needs of our U.S. operations.

A key component of our growth strategy is expanding our business and fleet through acquisitions, joint ventures and other strategic transactions. We would expect to finance any strategic transactions through the sale of our securities or through debt financing.

Working capital, which includes cash on hand, was $598.9 million at December 31, 2025, and included $5.8 million of current maturities on long term debt. During the year ended December 31, 2025, we reported $333.5 million in net income and generated $379.1 million in cash flows from operating activities, which includes our interest payments and drydock costs.

During the fourth quarter of 2025, we received several overdue payments aggregating approximately $54.0 million from our primary customer in Mexico, which reduced its outstanding receivable balance to $12.4 million as of December 31, 2025. We have not historically had, and we do not expect to have, any material write-offs due to the non-collectability of our receivables.

We signed agreements for the construction of two ocean going tugs and eight crew boats, all of which have been delivered as of December 31, 2025. We entered into Facility Agreements to finance a portion of the construction and delivery costs for approximately EUR 24.9 million ($26.7 million). Each of the ten Facility Agreements bears interest at fixed rates ranging from 2.7% to 6.3% and are payable in ten equal principal semi-annual installments, with the first installment commencing approximately six months following delivery of the respective vessel. Each Facility Agreement is secured by the respective vessel, guaranteed by Tidewater as parent guarantor and has no financial covenants.

Please refer to Note (4) - "Debt" to the accompanying Consolidated Financial Statements for further details on our indebtedness.

Share Repurchases

On February 27, 2025, our Board of Directors (Board) approved a $90.3 million share repurchase program, and then on August 1, 2025, our Board approved a new $500.0 million share repurchase program. During the year ended December 31, 2025, we repurchased and retired 2,290,204 shares for approximately $90.0 million, excluding commissions and a 1% excise tax. During 2024, our Board approved several share repurchase programs aggregating $90.7 million. During the year ended December 31, 2024, we repurchased and retired 1,384,186 shares for approximately $90.7 million, excluding commissions and a 1% excise tax. On November 5, 2023, our Board approved a $35.0 million share repurchase program, pursuant to which we repurchased and retired 590,499 shares for approximately $35.0 million, excluding commissions and a 1% excise tax, during the fourth quarter of 2023. Please refer to Item 5 of this Form 10-K - Market for Registrant's Common Equity, Related Stockholder Matters, and Issuer Purchases of Equity Securities for additional information regarding repurchases of our common stock. Also refer to Note (10) - "Stockholders' Equity" to the accompanying Consolidated Financial Statements.

Dividends

We declared no dividends during the years ended December 31, 2025, 2024 and 2023. Please refer to Note (10) - "Stockholders' Equity" to the accompanying Consolidated Financial Statements.

Operating Activities

Net cash provided by operating activities for any period will fluctuate according to the level of business activity for the applicable period. Net cash provided by operating activities is as follows:

(In Thousands)		Year Ended				Year Ended
		December 31, 2025				December 31, 2024
Net income		$	333,453			$	179,272
Depreciation and amortization			151,095				156,166
Amortization of deferred drydocking and survey costs			111,244				86,604
Amortization of debt premiums and discounts			5,379				6,741
Amortization of below market contracts			(1,200	)			(5,000	)
Unrealized foreign exchange loss (gain)			(23,398	)			14,275
Deferred income taxes benefit			(195,816	)			(2,807	)
Gain on asset dispositions, net			(13,682	)			(15,762	)
Loss on debt extinguishment			27,113				-
Stock based compensation expense			14,483				13,681
Deferred drydocking and survey costs			(98,575	)			(133,258	)
Changes in operating assets and liabilities			69,012				(17,440	)
Net cash provided by operating activities		$	379,108			$	282,472

Net cash provided by operating activities for the year ended December 31, 2025 was $379.1 million reflecting net income of $333.5 million, non-cash depreciation and amortization of $262.3 million, loss on extinguishment of debt of $27.1 million, unrealized foreign exchange gain of $23.4 million, a deferred income tax benefit of $195.8 million and stock-based compensation expense of $14.5 million. Changes in operating assets and liabilities provided $69.0 million in cash, reflecting improved receivable collections including from our primary customer in Mexico. We paid $98.6 million for regulatory drydocks in 2025.

Net cash provided by operating activities for the year ended December 31, 2024 was $282.5 million reflecting net income of $179.3 million, non-cash depreciation and amortization of $242.8 million, unrealized foreign exchange loss of $14.3 million and stock-based compensation expense of $13.7 million. Changes in operating assets and liabilities used $17.4 million in cash, reflecting additional investments in working capital due to an increase in business activity relating to the Solstad Acquisition. We paid $133.3 million for regulatory drydocks in 2024.

Investing Activities

Net cash used in investing activities is as follows:

(In Thousands)		Year Ended				Year Ended
		December 31, 2025				December 31, 2024
Proceeds from asset dispositions		$	17,619			$	19,338
Proceeds from sale of notes			660				8,054
Additions to properties and equipment			(25,761	)			(27,580	)
Net cash used in investing activities		$	(7,482	)		$	(188	)

Net cash used in investing activities for the year ended December 31, 2025 was $7.5 million, reflecting proceeds of $17.6 million related to the disposal of 12 vessels and $0.7 million related to the sale of a PEMEX note receivable. Additions to property and equipment was $25.8 million and primarily included upgrades to our existing fleet and continued enhancements to our current enterprise software system.

Net cash used in investing activities for the year ended December 31, 2024 was $0.2 million, reflecting proceeds of $19.3 million related to the disposal of six vessels and $8.1 million related to the sale of a PEMEX note receivable. Additions to property and equipment was $27.6 million and primarily included upgrades to our existing fleet and continued enhancements to our current enterprise software system.

Financing Activities

Net cash used in financing activities is as follows:

(In Thousands)		Year Ended				Year Ended
		December 31, 2025				December 31, 2024
Exercise of warrants		$	-			$	4
Issuance of long-term debt			650,000				-
Principal payments on long-term debt			(641,942	)			(103,030	)
Purchase of common stock			(90,089	)			(90,742	)
Payments on finance leases			(6,432	)			-
Debt extinguishment premium			(19,601	)			-
Debt issuance costs			(19,829	)			(213	)
Share based awards reacquired to pay taxes			(8,066	)			(28,614	)
Net cash used in financing activities		$	(135,959	)		$	(222,595	)

Financing activities for the year ended December 31, 2025 used $136.0 million of cash. We received proceeds of $650.0 million from the issuance of long-term debt, made $641.9 million in principal payments on long-term debt and paid $19.6 million in debt extinguishment premiums while incurring $19.8 million of debt issuance costs. In addition, we purchased 2,290,204 shares of our common stock for $90.1 million and paid $8.1 million in taxes on behalf of our employees related to the vesting of share-based awards.

Financing activities for the year ended December 31, 2024 used $222.6 million of cash. We made $103.0 million in principal payments on long-term debt while incurring $0.2 million of debt issuance costs. In addition, we purchased 1,384,186 shares of our common stock for $90.7 million and paid $28.6 million in taxes on behalf of our employees related to the vesting of share-based awards.

Legal Proceedings

We are named defendants or parties in certain lawsuits, claims or proceedings incidental to or arising in the ordinary course of business. Although the outcome of such lawsuits or other proceedings cannot be predicted with certainty and the amount of any liability that could arise with respect to such lawsuits or other proceedings cannot be predicted accurately, we do not expect these matters to have a material adverse effect on our financial position, operating results and cash flows. Please refer to Note (11) - "Commitments and Contingencies" to the accompanying Consolidated Financial Statements.

Application of Critical Accounting Policies and Estimates

The preparation of our consolidated financial statements in accordance with accounting principles generally accepted in the United States of America requires us to make estimates and assumptions that affect the reported amounts of assets, liabilities, revenues and expenses and related disclosures and disclosures of any contingent assets and liabilities at the date of the financial statements. We evaluate the reasonableness of these estimates and assumptions continually based on a combination of historical experience and other assumptions and information that comes to our attention that may vary the outlook for the future. Estimates and assumptions about future events and their effects are subject to uncertainty, and accordingly, these estimates may change as new events occur, as more experience is acquired, as additional information is obtained and as the business environment in which we operate changes. As a result, actual results may differ from estimates under different assumptions.

The significant accounting policies as described in Note (1) - "Nature of Operations and Summary of Significant Accounting Policies" to the Consolidated Financial Statements, should be read in conjunction with this "Management's Discussion and Analysis of Financial Condition and Results of Operations." We have defined a critical accounting estimate as one that is important to the portrayal of our financial condition or results of operations and requires us to make difficult, subjective or complex judgments or estimates about matters that are uncertain. We believe the following critical accounting policies that affect our more significant judgments and estimates used in the preparation of our consolidated financial statements are described below. There are other items within our consolidated financial statements that require estimation and judgment, but they are not deemed critical as defined above.

Receivables and Allowance for Credit Losses

In the normal course of business, we extend credit to our customers on a short-term basis. Our principal customers are major oil and gas exploration, field development and production companies. We routinely review and evaluate our accounts receivable balances for collectability. The determination of the collectability of amounts due from our customers requires us to use estimates and make judgments regarding future events and trends, including monitoring our customers' payment history and current credit worthiness to determine that collectability is reasonably assured, as well as consideration of the overall business climate in which our customers operate. Expected credit losses are recorded on the initial recognition of our primary financial assets, which are trade accounts receivable and contract assets. We believe that our allowance for credit losses is adequate to cover potential bad debt losses under current conditions; however, uncertainties regarding changes in the financial condition of our customers, either adverse or positive, could impact the amount and timing of any additional provisions for credit losses that may be required.

Impairment of Long-Lived Assets

We review the vessels in our active fleet for impairment whenever events occur or changes in circumstances indicate that the carrying amount of an asset group may not be recoverable. In such evaluation, the estimated future undiscounted cash flows generated by an asset group are compared with the carrying amount of the asset group to determine if a write-down may be required. We group vessels with similar operating and marketing characteristics together for impairment testing purpose.

We estimate future cash flows based upon historical data adjusted for our best estimate of expected future market performance, which, in turn, is based on industry trends. The primary estimates and assumptions used in reviewing active vessel groups for impairment and estimating undiscounted cash flows include utilization rates, average day rates and average daily operating expenses. These estimates are based on recent actual trends in utilization, day rates and operating costs and reflect management's best estimate of expected market conditions during the period of future cash flows. These assumptions and estimates have changed considerably in the past as market conditions have changed, and they are reasonably likely to continue to change if and when market conditions change in the future. Although we believe our assumptions and estimates are reasonable, deviations from the assumptions and estimates could produce materially different results. Management estimates may vary considerably from actual outcomes due to future adverse market conditions or poor operating results that could result in the inability to recover the current carrying value of an asset group, thereby possibly requiring an impairment charge in the future.

As our fleet continues to age, management closely monitors the estimates and assumptions used in the impairment analysis in order to properly identify evolving trends and changes in market conditions that could impact the results of the impairment evaluation.

If an asset group fails the undiscounted cash flow test, we estimate the fair value of each asset group and compare such estimated fair value to the carrying value of each asset group in order to determine if impairment exists.

We record an impairment charge when the carrying value of an asset group exceeds its estimated fair value. We often dispose of our older vessels when market conditions warrant and opportunities arise. As a result, vessel dispositions vary from year to year, and gains (losses) on sales of assets fluctuate significantly from period to period. Most of our vessels are sold to buyers with whom we do not compete in the offshore energy industry. When circumstances warrant, we review our fleet and make decisions to remove assets that are not considered to be part of our long-term plans. In these circumstances, we will reclassify the identified vessels as held for sale and, if necessary, we will revalue these vessels to net realizable value. Management estimates the fair value of each vessel in an asset group by considering items such as the vessel's age, length of time stacked, likelihood of a return to active service and actual recent sales of similar vessels, among others. We consider the valuation approach for our vessels to be Level 3, as defined by ASC 820, Fair Value Measurements and Disclosures, fair value measurements due to the level of estimation involved in valuing vessels for impairment purposes or for consideration for sale or recycling. We estimate the net realizable value for assets held for sale using various methodologies including third party appraisals, sales comparisons, sales agreements and recycle yard tonnage prices. Estimates generally fall in ranges rather than exact numbers due to the nature of sales of offshore vessels and industry conditions. Our value ranges depend on our expectation of the ultimate disposition of the vessel.

We will, in all circumstances, attempt to achieve maximum value for our vessels, but we also recognize that certain vessels are more likely to be recycled, especially given the time and effort required to achieve a sale and the costs incurred to maintain a vessel while searching for a buyer. We establish ranges that in many cases have scrap value as the low end of the range and an expected open market sale value at the top of the range. When there is no expectation within the range that is considered more likely than any other, we apply equal probability weighting to the low and high ends of the valuation range.

Income Taxes

The asset-liability method is used for determining our income tax provisions, under which current and deferred tax liabilities and assets are recorded in accordance with enacted tax laws and rates. Under this method, the amounts of deferred tax liabilities and assets at the end of each period are determined using the tax rate expected to be in effect when taxes are actually paid or recovered. In addition, we determine our effective tax rate by estimating our permanent differences resulting from differing treatment of items for tax and accounting purposes.

As a global company, we are subject to the jurisdiction of taxing authorities in the United States and by the respective tax agencies in the countries in which we operate internationally, as well as to tax agreements and treaties among these governments. Our operations in these different jurisdictions are taxed on various bases: actual income before taxes, deemed profits (which are generally determined using a percentage of revenue rather than profits) and withholding taxes based on revenue. Determination of taxable income in any tax jurisdiction requires the interpretation of the related tax laws and regulations and the use of estimates and assumptions regarding significant future events such as the amount, timing and character of deductions, permissible revenue recognition methods under the tax law and the sources and character of income and tax credits. Changes in tax laws, regulations, agreements and treaties, foreign currency exchange restrictions or our level of operations or profitability in each taxing jurisdiction could have an impact on the amount of income taxes that we provide during any given year. We are periodically audited by various taxing authorities in the United States and by the respective tax agencies in the countries in which we operate internationally. The tax audits generally include questions regarding the calculation of taxable income. Audit adjustments affecting permanent differences could have an impact on our effective tax rate.

The carrying value of our net deferred tax assets is based on our present belief in our ability to generate sufficient future taxable income in certain tax jurisdictions to utilize such deferred tax assets, based on current estimates and assumptions. If these estimates and related assumptions change in the future, we may be required to adjust valuation allowances against our deferred tax assets resulting in additional income tax expense or benefit in our Consolidated Income Statements. Management evaluates the realizability of the deferred tax assets and assesses the need for changes to valuation allowances on a quarterly basis. Should we determine that we would not be able to realize all or part of our net deferred tax asset in the future, an adjustment to the deferred tax asset would be charged to income in the period such determination was made.

Deferred taxes are not provided on undistributed earnings of certain non-U.S. subsidiaries and business ventures because we consider those earnings to be permanently invested abroad.

We record uncertain tax positions on the basis of a two-step process in which (1) we determine whether it is more likely than not that the tax positions would be sustained on the basis of the technical merits of the position and (2) for those tax positions that meet the more-likely-than-not recognition threshold, we recognize the largest amount of tax benefit that was more than 50 percent likely to be realized upon ultimate settlement with the related tax authority. The recognition and measurement of tax liabilities for uncertain tax positions in any tax jurisdiction requires the interpretation of the related tax laws and regulations as well as the use of estimates and assumptions regarding significant future events. Changes in tax laws, regulations, agreements and treaties, foreign currency exchange restrictions or our level of operations or profitability in each taxing jurisdiction could have an impact on the amount of income taxes during any given year.

New Accounting Pronouncements

For information regarding the effect of new accounting pronouncements, please refer to Note (1) - "Nature of Operations and Summary of Significant Accounting Policies" to the accompanying Consolidated Financial Statements.