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INDEBTEDNESS | 12 Months Ended
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Mar. 31, 2016
Debt Disclosure [Abstract] |
INDEBTEDNESS |
(5) | INDEBTEDNESS
Please refer to Note (2) of Notes to Consolidated Financial Statements included in Item 8 of this Annual Report on Form 10-K for additional information regarding the company’s compliance with debt covenants and classification of all outstanding debt as a current liability. Bank Loan Agreement In May 2015, the company amended and extended its existing bank loan agreement. The amended bank loan agreement matures in June 2019 (the “Maturity Date”) and provides for a $900 million, five-year credit facility (“credit facility”) consisting of a (i) $600 million revolving credit facility (the “revolver”) and a (ii) $300 million term loan facility (“term loan”). Borrowings under the credit facility are unsecured and bear interest at the company’s option at (i) the greater of prime or the federal funds rate plus 0.25 to 1.00%, or (ii) Eurodollar rates, plus margins ranging from 1.25 to 2.00% based on the company’s consolidated funded debt to capitalization ratio. Commitment fees on the unused portion of the facilities range from 0.15 to 0.30% based on the company’s funded debt to total capitalization ratio. The credit facility requires that the company maintain a ratio of consolidated debt to consolidated total capitalization that does not exceed 55%, and maintain a consolidated interest coverage ratio (essentially consolidated earnings before interest, taxes, depreciation and amortization, or EBITDA, for the four prior fiscal quarters to consolidated interest charges, including capitalized interest, for such period) of not less than 3.0 to 1.0. All other terms, including the financial and negative covenants, are customary for facilities of its type and consistent with the prior agreement in all material respects. The company had $300 million in term loan borrowings and $600 million of revolver borrowings outstanding at March 31, 2016 (whose fair value approximates the carrying value because the borrowings bear interest at variable rates). The company had no available capacity under the revolver at March 31, 2016 and $580 million available under the revolver at March 31, 2015. Senior Debt Notes The determination of fair value includes an estimated credit spread between our long term debt and treasuries with similar matching expirations. The credit spread is determined based on comparable publicly traded companies in the oilfield service segment with similar credit ratings. These estimated fair values are based on Level 2 inputs. September 2013 Senior Notes On September 30, 2013, the company executed a note purchase agreement for $500 million and issued $300 million of senior unsecured notes to a group of institutional investors. The company issued the remaining $200 million of senior unsecured notes on November 15, 2013. A summary of these outstanding notes at March 31, is as follows:
(In thousands, except weighted average data) |  | 2016 |  |  | 2015 |
Aggregate debt outstanding |  | $ | 500,000 |  |  |  | 500,000 |
Weighted average remaining life in years |  |  | 7.4 |  |  |  | 8.4 |
Weighted average coupon rate on notes outstanding |  |  | 4.86 | % |  |  | 4.86 | %
Fair value of debt outstanding |  |  | 342,746 |  |  |  | 516,879 |
The multiple series of notes totaling $500 million were issued with maturities ranging from approximately seven to 12 years. The notes may be retired before their respective scheduled maturity dates subject only to a customary make-whole provision. The terms of the notes require that the company maintain a ratio of consolidated debt to consolidated total capitalization that does not exceed 55% and maintain a ratio of consolidated EBITDA to consolidated interest charges, including capitalized interest, of not less than 3.0 to 1.0. August 2011 Senior Notes On August 15, 2011, the company issued $165 million of senior unsecured notes to a group of institutional investors. A summary of these outstanding notes at March 31, is as follows:
(In thousands, except weighted average data) |  | 2016 |  |  | 2015 |
Aggregate debt outstanding |  | $ | 165,000 |  |  |  | 165,000 |
Weighted average remaining life in years |  |  | 4.6 |  |  |  | 5.6 |
Weighted average coupon rate on notes outstanding |  |  | 4.42 | % |  |  | 4.42 | %
Fair value of debt outstanding |  |  | 127,148 |  |  |  | 167,910 |
The multiple series of notes were originally issued with maturities ranging from approximately eight to 10 years. The notes may be retired before their respective scheduled maturity dates subject only to a customary make-whole provision. The terms of the notes require that the company maintain a ratio of consolidated debt to consolidated total capitalization that does not exceed 55%. September 2010 Senior Notes In fiscal 2011, the company completed the sale of $425 million of senior unsecured notes. A summary of the aggregate amount of these outstanding notes at March 31, is as follows:
(In thousands, except weighted average data) |  | 2016 |  |  | 2015 |
Aggregate debt outstanding |  | $ | 382,500 |  |  |  | 425,000 |
Weighted average remaining life in years |  |  | 4.1 |  |  |  | 4.6 |
Weighted average coupon rate on notes outstanding |  |  | 4.35 | % |  |  | 4.25 | %
Fair value of debt outstanding |  |  | 302,832 |  |  |  | 431,296 |
The multiple series of these notes were originally issued with maturities ranging from five to 12 years. The notes may be retired before their respective scheduled maturity dates subject only to a customary make-whole provision. The terms of the notes require that the company maintain a ratio of consolidated debt to consolidated total capitalization that does not exceed 55%. Included in accumulated other comprehensive income at March 31, 2016 and 2015, is an after-tax loss of $1.5 million ($2.4 million pre-tax), and $1.8 million ($2.6 million pre-tax), respectively, relating to the purchase of interest rate hedges, which are cash flow hedges, in July 2010 in connection with the September 2010 senior notes offering. The interest rate hedges settled in August 2010 concurrent with the pricing of the senior unsecured notes. The hedges met the effectiveness criteria and their acquisition costs are being amortized to interest expense over the term of the individual notes matching the term of the hedges to interest expense. July 2003 Senior Notes In July 2003, the company completed the sale of $300 million of senior unsecured notes. A summary of the aggregate amount of these outstanding notes at March 31, is as follows:
(In thousands, except weighted average data) |  | 2016 |  |  | 2015 |
Aggregate debt outstanding |  | $ | — |  |  |  | 35,000 |
Weighted average remaining life in years |  |  | — |  |  |  | 0.3 |
Weighted average coupon rate on notes outstanding |  |  | — |  |  |  | 4.61 | %
Fair value of debt outstanding |  |  | — |  |  |  | 35,197 |
The multiple series of notes were originally issued with maturities ranging from seven to 12 years. These notes can be retired in whole or in part prior to maturity for a redemption price equal to the principal amount of the notes redeemed plus a customary make-whole premium. The terms of the notes require that the company maintain a ratio of consolidated debt to consolidated total capitalization that does not exceed 55%. Troms Offshore Debt In May 2015, Troms Offshore entered into a $31.3 million, U.S. dollar denominated, 12 year unsecured borrowing agreement which matures in April 2027 and is secured by a company guarantee. The loan requires semi-annual principal payments of $1.3 million (plus accrued interest) and bears interest at a fixed rate of 2.92% plus a premium based on Tidewater Inc.’s consolidated funded indebtedness to total capitalization ratio (currently equal to 1.30% for a total all-in rate of 4.22%). As of March 31, 2016, $30 million is outstanding under this agreement. In March 2015, Troms Offshore entered into a $29.5 million, U.S. dollar denominated, 12 year unsecured borrowing agreement which matures in January 2027 and is secured by a company guarantee. The loan requires semi-annual principal payments of $1.2 million (plus accrued interest) and bears interest at a fixed rate of 2.91% plus a premium based on Tidewater Inc.’s consolidated funded indebtedness to total capitalization ratio (currently equal to 1.30% for a total all-in rate of 4.21%). As of March 31, 2016, $27 million is outstanding under this agreement. A summary of U.S. dollar denominated Troms Offshore borrowings outstanding at March 31, is as follows:
(In thousands) |  | March 31, 2016 |  |  | March 31, 2015 |
May 2015 notes (A) |  |  |  |  |  |  |  |
Amount outstanding |  | $ | 30,033 |  |  |  | — |
Fair value of debt outstanding (Level 2) |  |  | 30,062 |  |  |  | — |
March 2015 notes (A) |  |  |  |  |  |  |  |
Amount outstanding |  | $ | 27,030 |  |  |  | 29,488 |
Fair value of debt outstanding (Level 2) |  |  | 27,027 |  |  |  | 29,501 |
| (A) | Note requires semi-annual principal payments.
In January 2014, Troms Offshore entered into a 300 million NOK, 12 year unsecured borrowing agreement which matures in January 2026 and is secured by a company guarantee. The loan requires semi-annual principal payments of 12.5 million NOK (plus accrued interest) and bears interest at a fixed rate of 2.31% plus a premium based on Tidewater Inc.’s consolidated funded indebtedness to total capitalization ratio (currently equal to 1.50% for a total all-in rate of 3.81%). As of March 31, 2016, 250 million NOK (approximately $30.2 million) is outstanding under this agreement. In May 2012, Troms Offshore entered into a 204.4 million NOK denominated borrowing agreement which matures in May 2024. The loan requires semi-annual principal payments of 8.5 million NOK (plus accrued interest), bears interest at a fixed rate of 6.38% and is secured by certain guarantees and various types of collateral, including a vessel. In January 2014, the loan was amended to, among other things, change the interest rate to a fixed rate equal to 3.88% plus a premium based on Tidewater’s funded indebtedness to capitalization ratio (currently equal to 1.50% for a total all-in rate of 5.38%), change the borrower, change the export creditor guarantor, and to replace the vessel security with a company guarantee. As of March 31, 2016, 144.8 million NOK (approximately $17.5 million) is outstanding under this agreement. A summary of Norwegian Kroner (NOK) denominated Troms Offshore borrowings outstanding at March 31, and their U.S. dollar equivalents is as follows:
(In thousands) |  | March 31, 2016 |  |  | March 31, 2015 |
3.81% January 2014 notes (A): |  |  |  |  |  |  |  |
NOK denominated |  |  | 250,000 |  |  |  | 275,000 |
U.S. dollar equivalent |  | $ | 30,207 |  |  |  | 34,234 |
Fair value in U.S. dollar equivalent (Level 2) |  |  | 30,199 |  |  |  | 34,226 |
5.38% May 2012 notes (A): |  |  |  |  |  |  |  |
NOK denominated |  |  | 144,840 |  |  |  | 161,880 |
U.S. dollar equivalent |  | $ | 17,500 |  |  |  | 20,152 |
Fair value in U.S. dollar equivalent (Level 2) |  |  | 17,479 |  |  |  | 19,924 |
Variable rate borrowings: |  |  |  |  |  |  |  |
June 2013 borrowing agreement (B) |  |  |  |  |  |  |  |
NOK denominated |  |  | — |  |  |  | 25,000 |
U.S. dollar equivalent |  | $ | — |  |  |  | 3,112 |
May 2012 borrowing agreement (B) |  |  |  |  |  |  |  |
NOK denominated |  |  | — |  |  |  | 20,000 |
U.S. dollar equivalent |  | $ | — |  |  |  | 2,490 |
| (A) | Note requires semi-annual principal payments.
| (B) | Fair values approximate carrying values because the borrowings bear interest at variable rates. The notes were repaid in fiscal 2016.
Each of the four Troms Offshore Debt tranches (two U.S. dollar denominated and two NOK denominated) require that the company maintain a ratio of consolidated debt to consolidated total capitalization that does not exceed 55%, and maintain a consolidated interest coverage ratio (essentially consolidated earnings before interest, taxes, depreciation and amortization, or EBITDA, for the four prior fiscal quarters to consolidated interest charges, including capitalized interest, for such period) of not less than 3.0 to 1.0. During the second quarter of fiscal 2014, the company repaid prior to maturity 500 million Norwegian Kroner (NOK) denominated (approximately $82.1 million) public bonds (plus accrued interest) that had been issued by Troms Offshore in April 2013. The repayment of these bonds, at an average price of approximately 105.0% of par value, resulted in the recognition of a loss on early extinguishment of debt of approximately 26 million NOK (approximately $4.1 million). Summary of Long-Term Debt Outstanding The following table summarizes debt outstanding at March 31:
(In thousands) |  | 2016 |  |  | 2015 |
4.61% July 2003 senior notes due fiscal 2016 |  | $ | — |  |  |  | 35,000 |
3.28% September 2010 senior notes due fiscal 2016 |  |  | — |  |  |  | 42,500 |
3.90% September 2010 senior notes due fiscal 2018 |  |  | 44,500 |  |  |  | 44,500 |
3.95% September 2010 senior notes due fiscal 2018 |  |  | 25,000 |  |  |  | 25,000 |
4.12% September 2010 senior notes due fiscal 2019 |  |  | 25,000 |  |  |  | 25,000 |
4.17% September 2010 senior notes due fiscal 2019 |  |  | 25,000 |  |  |  | 25,000 |
4.33% September 2010 senior notes due fiscal 2020 |  |  | 50,000 |  |  |  | 50,000 |
4.51% September 2010 senior notes due fiscal 2021 |  |  | 100,000 |  |  |  | 100,000 |
4.56% September 2010 senior notes due fiscal 2021 |  |  | 65,000 |  |  |  | 65,000 |
4.61% September 2010 senior notes due fiscal 2023 |  |  | 48,000 |  |  |  | 48,000 |
4.06% August 2011 senior notes due fiscal 2019 |  |  | 50,000 |  |  |  | 50,000 |
4.54% August 2011 senior notes due fiscal 2022 |  |  | 65,000 |  |  |  | 65,000 |
4.64% August 2011 senior notes due fiscal 2022 |  |  | 50,000 |  |  |  | 50,000 |
4.26% September 2013 senior notes due fiscal 2021 |  |  | 123,000 |  |  |  | 123,000 |
5.01% September 2013 senior notes due fiscal 2024 |  |  | 250,000 |  |  |  | 250,000 |
5.16% September 2013 senior notes due fiscal 2026 |  |  | 127,000 |  |  |  | 127,000 |
NOK denominated notes due fiscal 2025 |  |  | 17,500 |  |  |  | 20,152 |
NOK denominated notes due fiscal 2026 |  |  | 30,207 |  |  |  | 34,234 |
NOK denominated borrowing agreement due fiscal 2016 |  |  | — |  |  |  | 2,490 |
NOK denominated borrowing agreement due fiscal 2019 |  |  | — |  |  |  | 3,112 |
USD denominated notes due fiscal 2027 |  |  | 27,030 |  |  |  | 29,488 |
USD denominated notes due fiscal 2028 |  |  | 30,033 |  |  |  | — |
Bank term loan due fiscal 2020 |  |  | 300,000 |  |  |  | 300,000 |
Revolving line of credit due fiscal 2020 |  |  | 600,000 |  |  |  | 20,000 |
|  | $ | 2,052,270 |  |  |  | 1,534,476 |
Less: Current maturities of long-term debt |  |  | 2,052,270 |  |  |  | 10,181 |
Total long-term debt |  | $ | — |  |  |  | 1,524,295 |
Debt Costs The company capitalizes a portion of its interest costs incurred on borrowed funds used to construct vessels. Interest and debt costs incurred, net of interest capitalized, for the years ended March 31, are as follows:
(In thousands) |  | 2016 |  |  | 2015 |  |  | 2014 |
Interest and debt costs incurred, net of interest capitalized |  | $ | 53,752 |  |  |  | 50,029 |  |  |  | 43,814 |
Interest costs capitalized |  |  | 10,451 |  |  |  | 13,673 |  |  |  | 11,497 |
Total interest and debt costs |  | $ | 64,203 |  |  |  | 63,702 |  |  |  | 55,311 |

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- Definition The entire disclosure for information about short-term and long-term debt arrangements, which includes amounts of borrowings under each line of credit, note payable, commercial paper issue, bonds indenture, debenture issue, own-share lending arrangements and any other contractual agreement to repay funds, and about the underlying arrangements, rationale for a classification as long-term, including repayment terms, interest rates, collateral provided, restrictions on use of assets and activities, whether or not in compliance with debt covenants, and other matters important to users of the financial statements, such as the effects of refinancing and noncompliance with debt covenants. + References Reference 1: http://www.xbrl.org/2003/role/presentationRef -Publisher FASB -Name Accounting Standards Codification -Topic 505 -SubTopic 10 -Section 50 -Paragraph 3 -URI http://asc.fasb.org/extlink&oid=6928386&loc=d3e21475-112644 Reference 2: http://www.xbrl.org/2003/role/presentationRef -Publisher FASB -Name Accounting Standards Codification -Topic 210 -SubTopic 10 -Section S99 -Paragraph 1 -Subparagraph (SX 210.5-02.19,20,22) -URI http://asc.fasb.org/extlink&oid=6877327&loc=d3e13212-122682 + Details
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