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INVESTMENT IN UNCONSOLIDATED COMPANIES | 12 Months Ended
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Dec. 31, 2018
Equity Method Investments And Joint Ventures [Abstract] |
INVESTMENT IN UNCONSOLIDATED COMPANIES |
(7) | INVESTMENT IN UNCONSOLIDATED COMPANIES
Investments in unconsolidated affiliates, generally 50% or less owned partnerships and corporations, are accounted for by the equity method. Under the equity method, the assets and liabilities of the unconsolidated joint venture companies are not consolidated in our consolidated balance sheet. Investments in, at equity, and advances to unconsolidated joint venture companies were as follows:
|  |  |  |  |  | Successor |
|  | Percentage |  |  | December 31, |  |  | December 31, |
(In thousands) |  | Ownership |  |  | 2018 |  |  | 2017 |
Sonatide Marine, Ltd. (Angola) |  | 49% |  |  | $ | — |  |  |  | 26,935 |
DTDW Holdings, Ltd. (Nigeria) |  | 40% |  |  |  | 1,033 |  |  |  | 2,281 |
GulfMark Marine, Ltd. (Trinidad) |  | 49% |  |  |  | 6 |  |  |  | — |
Investments in, at equity, and advances to unconsolidated companies |  |  |  |  |  | $ | 1,039 |  |  |  | 29,216 |
As a result of fresh-start accounting our investment in Sonatide Marine, Ltd. and DTDW Holdings, Ltd. were assigned a fair value based on the discounted cash flows of their respective operations. This resulted in a difference between the carrying value of our investment balance and our share of the net assets of the joint ventures of $27.7 million and $4.2 million for Sonatide Marine, Ltd. and DTDW Holdings, Ltd, respectively, which will be accreted to the investments in, at equity, and advances to unconsolidated companies over ten years. We maintained the following balances with their unconsolidated affiliates as of December 31, 2018 and December 31, 2017:
|  | Successor |
|  | December 31, |  |  | December 31, |
(in thousands) |  | 2018 |  |  | 2017 |
Due from related parties: |  |  |  |  |  |  |  |
Sonatide (Angola) |  | $ | 109,176 |  |  |  | 230,315 |
DTDW (Nigeria) |  |  | 23,775 |  |  |  | 33,353 |
Due to related parties: |  |  |  |  |  |  |  |
Sonatide (Angola) |  | $ | 29,347 |  |  |  | 99,448 |
DTDW (Nigeria) |  |  | 5,625 |  |  |  | 9,645 |
Due from related parties, net of due to related parties |  | $ | 97,979 |  |  |  | 154,575 |
Amounts due from and due to DTDW and related entities of $33.4 million and $9.6 million, respectively, are included in trade and other receivables, net, and accounts payable line items at December 31, 2017. Amounts due from Sonatide Amounts due from Sonatide (included in Due from affiliate in the consolidated balance sheets) at December 31, 2018 and December 31, 2017 of approximately $109 million and $230 million, respectively, represent cash received by Sonatide from customers and due to us, amounts due from customers that are expected to be remitted to us through Sonatide and costs incurred by us on behalf of Sonatide.
|  | Successor |  |  |  | Predecessor |
|  |  |  |  |  | Period from |  |  |  | Period from |
|  | Twelve Months |  |  | August 1, 2017 |  |  |  | April 1, 2017 |
|  | Ended |  |  | through |  |  |  | through |
(In thousands) |  | December 31, 2018 |  |  | December 31, 2017 |  |  |  | July 31, 2017 |
Due from Sonatide at beginning of year |  | $ | 230,315 |  |  |  | 252,393 |  |  |  |  | 262,652 |
Revenue earned by the company through Sonatide |  |  | 56,916 |  |  |  | 40,303 |  |  |  |  | 34,397 |
Less amounts received from Sonatide |  |  | (76,878 | ) |  |  | (28,264 | ) |  |  |  | (21,019 | )
Less amounts used to offset Due to Sonatide obligations (A) |  |  | (78,993 | ) |  |  | (33,607 | ) |  |  |  | (21,453 | )
Less impairment of due from affiliate |  |  | (20,083 | ) |  |  | — |  |  |  |  | — |
Other |  |  | (2,101 | ) |  |  | (510 | ) |  |  |  | (2,184 | )
|  | $ | 109,176 |  |  |  | 230,315 |  |  |  |  | 252,393 |
| (A) | We reduced the respective due from affiliates and due to affiliates balances each period through netting transactions based on agreement with the joint venture.
The obligation to us from Sonatide is denominated in U.S. dollars; however, the underlying third-party customer payments to Sonatide were satisfied, in part, in Angolan kwanzas. We and Sonangol, our partner in Sonatide, have had discussions regarding how the net losses from the devaluation of certain Angolan kwanza denominated accounts should be shared After offsetting the amounts due to Sonatide and prior to impairment, the net amount due from Sonatide was approximately $100 million. Sonatide had approximately $58 million of cash on hand at December 31, 2018 plus approximately $23 million of net trade accounts receivable, providing approximately $75 million of working capital to satisfy the net due from Sonatide. Given prior discussions with our partner regarding how the net losses from the devaluation of certain Angolan kwanza denominated accounts should be shared, we continue to evaluate our net due from Sonatide balance for potential impairment based on available liquidity held by Sonatide. Based on our most recent analysis, we determined that a portion of our net due from balance is compromised and we have taken an approximate $20 million asset impairment charge at December 31, 2018. We will continue to monitor the net due from Sonatide balance for possible additional impairment in future periods. Sonatide has approximately $58 million of cash of which approximately $20 million is denominated in Angolan kwanzas. During the twelve months ended December 31, 2018, the Angolan kwanza devalued versus the U.S. dollar by approximately 84% from a ratio of approximately 168 to 1 to a ratio of approximately 309. Amounts due to Sonatide Amounts due to Sonatide (Due to affiliate in the consolidated balance sheets) at December 31, 2018 and 2017 of approximately $29 million and $99 million, respectively, represents commissions payable and other costs paid by Sonatide on behalf of us. Approximately $28 million represents commissions due to Sonatide.
|  | Successor |  |  |  | Predecessor |
|  |  |  |  |  | Period from |  |  |  | Period from |
|  | Twelve Months |  |  | August 1, 2017 |  |  |  | April 1, 2017 |
|  | December 31, |  |  | through |  |  |  | through |
(In thousands) |  | 2018 |  |  | December 31, 2017 |  |  |  | July 31, 2017 |
Due to Sonatide at beginning of year |  | $ | 99,448 |  |  |  | 123,899 |  |  |  |  | 132,857 |
Plus commissions payable to Sonatide |  |  | 5,502 |  |  |  | 3,928 |  |  |  |  | 3,330 |
Plus amounts paid by Sonatide on behalf of the company |  |  | 14,778 |  |  |  | 12,044 |  |  |  |  | 9,458 |
Less commissions paid to Sonatide |  |  | (13,906 | ) |  |  | (5,023 | ) |  |  |  | — |
Less amounts used to offset Due from Sonatide obligations (A) |  |  | (78,993 | ) |  |  | (33,607 | ) |  |  |  | (21,453 | )
Other |  |  | 2,518 |  |  |  | (1,793 | ) |  |  |  | (293 | )
|  | $ | 29,347 |  |  | $ | 99,448 |  |  |  |  | 123,899 |
| (A) | We reduced the respective due from affiliates and due to affiliates balances each period through netting transactions based on agreement with the joint venture.
Sonatide Operations Sonatide’s principal earnings are from the commissions paid by us to the joint venture for company vessels chartered in to Angola. In addition, Sonatide owns four vessels (two of which are currently stacked) that may generate operating income and cash flow. Company operations in Angola For the twelve months ended December 31, 2018, our Angolan operations generated vessel revenues of approximately $59 million, or 15%, of our consolidated vessel revenue, from an average of approximately 37 company-owned vessels that are marketed through the Sonatide joint venture (16 of which were stacked on average during the twelve months ended December 31, 2018). For the period from August 1, 2017 through December 31, 2017, our Angolan operations generated vessel revenues of approximately $34 million, or 20%, of our consolidated vessel revenue, from an average of approximately 43 company-owned vessels that are marketed through the Sonatide joint venture (16 of which were stacked on average during the period from August 1, 2017 through December 31, 2017). For the period from April 1, 2017 through July 31, 2017, ours Angolan operations generated vessel revenues of approximately $34 million, or 23%, of our consolidated vessel revenue, from an average of approximately 50 company-owned vessels that are marketed through the Sonatide joint venture (21 of which were stacked on average during the period from April 1, 2017 through July 31, 2017). For the year ended March 31, 2017, our Angolan operations generated vessel revenues of approximately $127 million, or 22%, of our consolidated vessel revenue, from an average of approximately 58 company-owned vessels that are marketed through the Sonatide joint venture (20 of which were stacked on average during the year ended March 31, 2017). Investment in, at equity, and advances to Sonatide (an unconsolidated company) Sonatide is a joint venture owned 49% by us. As of December 31, 2018 and 2017, the carrying value of our investment in the Sonatide joint venture, which is included in “Investments in, at equity, and advances to unconsolidated companies,” was approximately zero and $27 million, respectively. During the twelve months ended December 31, 2018, we received a dividend from Sonatide of approximately $12 million which reduced the carrying value of our investment in Sonatide to zero.

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- Definition The entire disclosure for equity method investments and joint ventures. Equity method investments are investments that give the investor the ability to exercise significant influence over the operating and financial policies of an investee. Joint ventures are entities owned and operated by a small group of businesses as a separate and specific business or project for the mutual benefit of the members of the group. + References Reference 1: http://fasb.org/us-gaap/role/ref/legacyRef -Publisher FASB -Name Accounting Standards Codification -Topic 323 -URI http://asc.fasb.org/topic&trid=2196965 + Details
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