The accompanying unaudited Condensed Consolidated Financial Statements reflect the financial position, results of operations, comprehensive income, cash flows, and changes in stockholders’ equity of Tidewater Inc., a Delaware corporation, and its consolidated subsidiaries, collectively referred to as the “company”, “Tidewater”, “we”, “our”, or “us”.

The accompanying unaudited Condensed Consolidated Financial Statements have been prepared in accordance with United States (U.S.) generally accepted accounting principles (GAAP) for interim financial information and pursuant to the rules and regulations of the Securities and Exchange Commission (SEC) for interim financial information. Accordingly, certain information and disclosures normally included in our annual financial statements have been condensed or omitted. These unaudited Condensed Consolidated Financial Statements should be read in conjunction with the audited Consolidated Financial Statements and notes thereto included in our Annual Report on Form 10-K for the year ended December 31, 2025, filed with the SEC on March 2, 2026. In the opinion of management, the accompanying financial information reflects all normal recurring adjustments necessary to fairly state our results of operations, financial position and cash flows for the periods presented and are not indicative of the results that may be expected for a full year.

Our financial statements have been prepared on a consolidated basis. Under this basis of presentation, our financial statements consolidate all subsidiaries (entities in which we have a controlling financial interest), and all intercompany accounts and transactions have been eliminated. We use the equity method to account for equity investments over which we exercise significant influence but do not exercise control and are not the primary beneficiary.

Certain prior year amounts have been reclassified to conform to the current year presentation.

In November 2024, the Financial Accounting Standards Board (FASB) issued Accounting Standards Update (ASU) 2024-03, Income Statement-Reporting Comprehensive Income-Expense Disaggregation Disclosures to improve disclosures about certain types of expenses including purchases of inventory, employee compensation and depreciation, depletion and amortization included in commonly presented captions in the Consolidated Statements of Operations. This guidance is effective for annual periods beginning after December 15, 2026 and interim periods beginning after December 15, 2027. We are currently evaluating the effect of the standard on our disclosures in our consolidated financial statements.

In September 2025, the FASB issued ASU 2025-06, Intangibles-Goodwill and Other-Internal-Use Software to modernize the accounting for software costs to better align the accounting with how software is currently developed. Under this standard, software costs are capitalized once management (i) has authorized and committed to funding the software project and (ii) it is probable that the project will be completed and the software will be used to perform the intended function. This guidance is effective for annual and interim periods beginning after December 15, 2027. We are currently evaluating the effect of the standard on our consolidated financial statements.

In December 2025, the FASB issued ASU 2025-10, Government Grants to establish the accounting for government grants received by a business entity. Under this standard, a government grant is not recognized until (i) it is probable that the company will comply with the conditions attached to the grant and that the grant will be received; and (ii) the company meets the recognition guideline for the grant. This guidance is effective for annual and interim periods beginning after December 15, 2028. We are currently evaluating the effect of the standard on our consolidated financial statements.

In December 2025, the FASB issued ASU 2025-11, Interim Reporting to clarify interim disclosure requirements and the applicability of Topic 270. The objective of this standard is to provide clarity about the current requirements under generally accepted accounting principles rather than expanding or reducing the interim disclosure requirements. This guidance is effective for interim periods within annual reporting periods beginning after December 15, 2027. We are currently evaluating the effect of the standard on our consolidated interim financial statements.

In December 2025, the FASB issued ASU 2025-12, Codification Improvements to make various changes to the codification that either clarify or correct errors or make minor improvements to generally accepted accounting principles that are not expected to have a significant effect on current accounting practice. This guidance is effective for annual and interim periods beginning after December 15, 2026. We are currently evaluating the effect of the standard on our consolidated financial statements but do not believe it will have any impact on our consolidated financial statements and related disclosures.

In May 2026, the FASB issued ASU 2026-02, Environmental Credits and Environmental Credit Obligations to improve financial accounting for and disclosure of environmental credits and environmental credit obligations. It provides recognition, measurement, presentation, and disclosure requirements for all entities that generate, purchase, or receive environmental credits or have a regulatory compliance obligation that may be settled with environmental credits. This guidance is effective for annual and interim periods beginning after December 31, 2027. We are currently evaluating the effect of this standard on our consolidated financial statements.

On August 31, 2026 (Closing Date), we completed the acquisition (Wilson Acquisition) of all outstanding capital stock of Wilson, Sons Ultratug Participações S.A. (now known as Tidewater Offshore do Brasil S.A., WSUT) and Atlantic Offshore Services S.A. (together with WSUT, the Wilson Companies). We believe this acquisition significantly expands our presence in Brazil’s robust offshore market and strengthens our competitive position by adding Brazilian-built tonnage to our fleet. The Wilson Companies were managed under the common control of their previous owners and are presented here on an aggregate basis. As a result of the Wilson Acquisition, we acquired assets and assumed liabilities owned by the Wilson Companies and their wholly owned subsidiaries, which include a fleet of 22 platform supply vessels (Wilson Vessels). At the Closing Date, we paid an aggregate cash purchase price of $283.1 million, which was the original base purchase consideration of $500.0 million adjusted for the Wilson Companies' debt (net of cash), working capital and other adjustments as set forth in the Amended and Restated Sale and Purchase Agreement (SPA). The purchase price is subject to customary post-closing adjustments.

Assets acquired and liabilities assumed in the Wilson Acquisition were recorded at their estimated fair values as of the Closing Date under the acquisition method of accounting. The fair value estimates below are subject to adjustment during the post-closing measurement period, primarily consisting of the final valuation for various working capital items, tax and other liabilities existing on the Closing Date. The estimated fair values of certain assets and liabilities including long-lived assets and contingencies require judgment and assumptions. Adjustments may be made to these estimates during the post-closing measurement period, and those adjustments could be material. 

Property and equipment acquired in the business combination consisted primarily of offshore support vessels. We recorded property and equipment acquired at estimated fair value of approximately $513.4 million. The fair values of the offshore support vessels were estimated by applying both an income approach, using projected discounted cash flows, and a market approach. We estimate that the remaining useful lives for the vessels acquired fall in the range of one to 10 years, based on an original estimated useful life of 20 years. No goodwill was recognized in connection with this business combination.

Debt assumed in the business combination consisted primarily of construction and conversion loans. We recorded the debt assumed at estimated fair value of approximately $214.8 million after a net discount provision of approximately $14.2 million.

Business combination related costs for the Wilson Acquisition were expensed as incurred in general and administrative expense and consist of various advisory, legal, accounting, valuation and other professional fees totaling $10.2 million and $14.4 million for the three and nine months ended September 30, 2026, respectively.

The provisional amounts for assets acquired and liabilities assumed are based on estimates of their fair values as of the Closing Date and were as follows:

Revenue and net loss for the Wilson Companies since the Closing Date were $17.1 million and $1.6 million, respectively, for both the three and nine months ended  September 30, 2026.

The unaudited supplemental pro forma results present consolidated information as if the business combination were completed on January 1, 2025. The pro forma results include, among others, (i) an increase in depreciation expense for adjustments to property and equipment and (ii) the amortization of the discount on the debt measured at fair value. The pro forma results do not include any potential synergies or non-recurring charges that may result directly from the business combination.

Expected credit losses are recognized on the initial recognition of our trade accounts receivable and contract assets. In each subsequent reporting period, even if a loss has not yet been incurred, credit losses are estimated and recognized based on the history of credit losses and current conditions, as well as reasonable and supportable forecasts affecting collectability. We utilize a model to estimate the expected credit losses applicable to our trade accounts receivable and contract assets. This model considers our historical performance and the economic environment, as well as the credit risk and its expected development for each segmented group of customers that share similar risk characteristics. In addition, we establish specific allowances for credit losses for certain customer balances that we deem uncollectable. It is our practice to write off receivables when all legal options for collection have been exhausted.

Activity in the allowance for credit losses for the nine months ended September 30, 2026 and 2025 is as follows:

See Note (14) - “Segment and Geographic Distribution of Operations” for revenue by segment and in total for the worldwide fleet.

Contract Balances

At September 30, 2026, we had $0.5 million of deferred mobilization costs included within Prepaid expenses and other current assets and $0.7 million of deferred mobilization costs included in Other assets. At December 31, 2025, we had $0.8 million of deferred mobilization costs included with Prepaid expenses and other current assets and $1.1 million of deferred mobilization costs included in Other assets.

At September 30, 2026, we had $1.4 million of deferred mobilization revenue included within Accrued expenses and $0.8 million of deferred mobilization revenue included in Other liabilities that will be recognized from 2026 through 2028. At December 31, 2025, we had $4.8 million of deferred mobilization revenue included within Accrued expenses and $3.6 million of deferred mobilization revenue included in Other liabilities.

During the nine months ended September 30, 2026 and 2025, the amount of revenue recognized that was included in deferred mobilization revenue at the beginning of the period was $6.9 million and $8.6 million, respectively.

Earnings per share

For the nine months ended September 30, 2026 and 2025, we reported net income from operations. Our diluted earnings per share for these periods is based on our weighted average common shares outstanding and is computed using the treasury stock method for our outstanding “in-the-money” warrants and restricted stock grants (both time and performance based) awarded as part of our share-based compensation and incentive plans.

Accumulated Other Comprehensive Income

The following tables present the changes in accumulated other comprehensive income (OCI) by component, net of tax:

Dilutive Equity Instruments

The following table presents the outstanding number of common shares, “in-the-money” warrants and restricted stock units:

No warrants, restricted stock awards or restricted stock units, whether in the money or out of the money, are included in our earnings per share calculations if the effect of such inclusion is antidilutive.

Common Stock 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 three and nine months ended September 30, 2026, we repurchased and retired 95,018 shares for approximately $7.9 million, excluding commissions and a 1% excise tax. No shares were repurchased during the three months ended September 30, 2025. During the nine months ended September 30, 2025, we repurchased and retired 2,290,204 shares for approximately $90.0 million, excluding commissions and a 1% excise tax.

Income tax rates and taxation systems in the jurisdictions where we and our subsidiaries conduct business vary and our subsidiaries are frequently subjected to minimum taxation regimes. In some jurisdictions, tax liabilities are based on gross revenues, statutory deemed profits or other factors, rather than on net income. We use a discrete effective tax rate method to calculate taxes for interim periods instead of applying the annual effective tax rate to an estimate of the full fiscal year due to the level of volatility and unpredictability of earnings in our industry, both overall and by jurisdiction. 

For the nine months ended September 30, 2026, income tax expense differs from the tax effect of the U.S. rate due to tax liabilities in various jurisdictions based on either revenue (deemed profit regimes) or pre-tax profits, international activity that generated income subject to U.S. tax, and the impact of Pillar Two.

During the nine months ended September 30, 2026, a gain on sale of a vessel was recognized in connection with an internal restructuring to reposition the vessel for strategic opportunities. This transaction resulted in $2.9 million of Pillar Two top-up tax and was included as Subpart F income and subject to U.S. taxation. Due to the internal nature of this transaction, this gain is not reflected in the consolidated financial statements leading to a higher effective tax rate. The total expense accrual related to Pillar Two is approximately $13.6 million. We also generated U.S. tax expense of $22.6 million, primarily related to Net CFC Tested Income (NCTI) and Subpart F income.

During the nine months ended September 30, 2025, after assessing relevant positive and negative evidence, we released our valuation allowance against our entire U.S. net operating loss (NOL) balance totaling approximately $27.0 million.

The tax liabilities for uncertain tax positions are primarily attributable to permanent establishment considerations related to foreign jurisdictions, subpart F income inclusions and withholding taxes on foreign services. Penalties and interest related to income tax liabilities are included in income tax expense. Income tax payable is included in other current liabilities.

As of December 31, 2025, our balance sheet reflected approximately $528.4 million of net deferred tax assets prior to a valuation allowance of $332.0 million. As of September 30, 2026, we had net deferred tax assets of approximately $465.2 million prior to a valuation allowance of $348.1 million. The net deferred tax assets amount as of September 30, 2026, include $58.4 million of deferred tax liabilities from the Wilson Acquisition, consisting of a deferred tax asset of $1.7 million offset by a valuation allowance of $1.7 million and $58.4 million of deferred tax liabilities.

Management assesses all available positive and negative evidence to permit use of existing deferred tax assets.

With limited exceptions, we are no longer subject to tax audits by U.S. federal, state, local or foreign taxing authorities for years prior to December 2021. We are subject to ongoing examinations by various foreign tax authorities and do not believe the results of these examinations will have a material adverse effect on our consolidated financial position, results of operations or cash flows.

U.S. Defined Benefit Pension Plan

We sponsor a defined benefit pension plan (pension plan) that was frozen in 2010 covering certain U.S. employees. Actuarial valuations are performed annually. We contributed $0.3 million and $0.9 million to the pension plan during the nine months ended September 30, 2026 and 2025, respectively, and expect to contribute an additional $0.1 million to the pension plan during the remainder of 2026.

Supplemental Executive Retirement Plan

We support a non-contributory and non-qualified defined benefit supplemental executive retirement plan (supplemental plan) that was closed to new participants in 2010. We contributed $0.9 million and $0.9 million to the supplemental plan for the nine months ended September 30, 2026 and 2025, respectively, and expect to contribute $0.3 million during the remainder of 2026. Our estimated obligations under the supplemental plan were $14.1 million and $14.0 million at September 30, 2026 and  December 31, 2025, respectively, and are included in “accrued expenses” and “other liabilities” in the Condensed Consolidated Balance Sheets.

Net Periodic Benefit Costs

The net periodic benefit cost for our pension plans and supplemental plan (collectively, Pension Benefits) is comprised of the following components:

The components of the net periodic pension cost are included in the caption “Interest income and other, net.”

The following is a summary of all debt outstanding:

9.125% Senior Notes due July 2030

On July 7, 2025, we, certain of our subsidiaries (Guarantors), and Wilmington Trust, National Association, as trustee (Trustee), entered into an indenture (Indenture), pursuant to which we issued $650.0 million in aggregate principal amount of 9.125% Senior Notes due 2030 (2030 Notes). The 2030 Notes are unconditionally guaranteed on a senior unsecured basis by the Guarantors.

The 2030 Notes mature on July 15, 2030. Interest on the 2030 Notes is payable semi-annually in arrears on each January 15 and July 15, commencing January 15, 2026, to holders of record on the January 1 and July 1 immediately preceding the related interest payment date, at a rate of 9.125% per annum.

At any time prior to July 15, 2027, we may redeem the 2030 Notes, at a redemption price equal to 100% of the principal amount of the 2030 Notes redeemed, plus an applicable make-whole premium and accrued and unpaid interest, if any. At any time on or after July 15, 2027, we may redeem the 2030 Notes, at the redemption price of 104.563%, which declines to 100% on or after July 15, 2029, plus accrued and unpaid interest.

The Indenture contains covenants that, among other things and subject to certain exceptions, limit our ability, and the ability of our restricted subsidiaries to: (i) incur, assume or guarantee additional indebtedness or issue certain preferred stock; (ii) create liens to secure indebtedness; (iii) pay distributions on equity interests, repurchase equity securities, make investments or redeem subordinated indebtedness; (iv) restrict distributions, loans or other asset transfers; (v) consolidate with or merge with or into, or sell substantially all of our assets to, another person; (vi) sell or otherwise dispose of assets, including equity interests in subsidiaries; (vii) designate a subsidiary as an Unrestricted Subsidiary (as defined in the Indenture); and (viii) enter into transactions with affiliates.

Revolving Credit Facility

On July 7, 2025, we and the Guarantors entered into a credit agreement with DNB Bank ASA, New York Branch, as facility agent and security trustee, and a syndicate of lenders providing for a $250.0 million senior secured revolving credit facility (Revolving Credit Facility). Amounts borrowed under the Revolving Credit Facility, which matures on April 15, 2030, are subject to an interest rate per annum equal to (i) for Term Secured Overnight Financing Rate (Term SOFR) advances, the aggregate of (a) the Term SOFR for the relevant interest period, plus (b) an applicable margin ranging from 250 to 350 basis points, depending on our total net leverage ratio (Margin); or (ii) for Alternate Base Rate (ABR) advances, the aggregate of (a) the ABR Rate, which equals the highest of (1) the Prime Rate in effect on such day, (2) the Federal Funds Rate in effect on such day plus 0.50%, (3) Term SOFR plus 1.00%, and (4) 1.00%. The Revolving Credit Facility also requires payment of quarterly customary unused commitment fees and if utilized, certain letter of credit and fronting fees.

The Revolving Credit Facility contains customary affirmative and negative covenants, representations and warranties, and events of default, along with the following three financial covenants: (i) a minimum liquidity test that the sum of consolidated cash and available commitments under the Revolving Credit Facility shall not be less than the greater of $20.0 million or 10% of net interest-bearing debt as defined in the agreement; (ii) the ratio of net interest bearing debt to consolidated earnings before depreciation and amortization, interest and other debt costs, net and income tax expense shall be equal to or less than 3 to 1; and (iii) the aggregate fair market value of the collateral vessels divided by the total outstanding debt shall be at least 2.5 to 1. We are currently in compliance with these financial covenants.

BNDES Vessel Construction Loans

As of August 31, 2026 (Closing Date), the Wilson Companies had outstanding borrowings under certain Credit Facility Agreements with Banco Nacional de Desenvolvimento Econômico e Social (BNDES) (collectively, the BNDES Vessel Construction Loan Agreements and the borrowings thereunder, the BNDES Vessel Construction Loans). The BNDES Vessel Construction Loan Agreements were entered into between 2007 and 2012 and subsequently amended. The agreements are among BNDES, as lender, Wilson Sons Offshore S.A. (WSO), a wholly owned subsidiary of WSUT (now known as Tidewater do Brasil S.A.), as borrower, and certain previous owners of the Wilson Companies (or their affiliates), as guarantors. The loans were used to finance the construction of vessels and remained outstanding following completion of construction. Each BNDES Vessel Construction Loan Agreement, as amended on October 1, 2026, provides for a secured loan facility with interest rates ranging from 3.21% to 3.77% per annum (2.64% to 3.43% per annum at the Closing Date) and a maturity date ranging from December 2026 to December 2035. The principal currently amortizes in aggregate monthly installments and interest is payable monthly. As of September 30, 2026, the BNDES Vessel Construction Loans had an aggregate outstanding principal amount, excluding discount, of approximately $167.7 million.

The obligations under the BNDES Vessel Construction Loan Agreements are secured by eleven vessels which must maintain an aggregate appraised value equal to at least 130% of the outstanding loan balance (collateral coverage ratio). Immediately prior to the October 1, 2026 amendments, the required minimum collateral coverage ratio was either 110% or 130% depending on the applicable BNDES Vessel Construction Loan Agreement.

On September 21, 2026, Tidewater Inc. entered into a Guarantee Agreement with BNDES, pursuant to which Tidewater Inc. guaranteed the full and timely payment of all of the borrower’s obligations under the BNDES Vessel Construction Loans. Effective October 1, 2026, upon satisfaction of the applicable conditions, the BNDES Vessel Construction Loan Agreements were amended to replace the existing guarantors with Tidewater Inc. and release the former guarantors from their obligations.

The BNDES Vessel Construction Loan Agreements contain customary covenants, including requirements to comply with the “Provisions Applicable to BNDES Contracts”. These covenants generally require WSO (subject to variations among the individual loan agreements), to: (i) use the loan proceeds within a specified period; (ii) grant BNDES certain rights under the insurance policies covering the collateral vessels; (iii) comply with laws applicable to persons with disabilities; (iv) offer a reemployment training program in the event of workforce reductions; (v) adopt environmental protection, occupational safety, and occupational health measures; (vi) comply with environmental laws; (vii) demonstrate a domestic content percentage of at least 60% and engage an auditor to verify local content; and (viii) notify BNDES if any person holding a paid position with WSO or any of its owners, controlling shareholders or directors is elected or sworn in as a member of the National Congress of Brazil.

Effective October 1, 2026, under the amended BNDES Vessel Construction Loan Agreements and subject to variations among the individual loan agreements, BNDES may declare all of the outstanding loan balance under a BNDES Vessel Construction Loan immediately due and payable upon the occurrence of certain events, including: (i) any of the circumstances specified in Articles 39 and 40 of the “Provisions Applicable to BNDES Contracts”; (ii) the borrower’s or its controlling entities’ organizational documents include a provision that restricts the borrower’s growth, access to new markets, or ability to pay its financial obligations under the applicable loan; (iii) a final and non-appealable judgment holding the borrower liable for certain labor or environmental violations; (iv) the borrower being included in the Registry of Employers that have violated certain labor regulations; (v) the borrower violating any anti-bribery, anti-terrorism, anti-money laundering, or certain other laws; (vi) the borrower petitioning for or declaring bankruptcy or liquidation; (vii) any person holding a paid position at the borrower or any of its owners, controlling shareholders or directors is elected or sworn in as a member of the National Congress of Brazil; (viii) the borrower failing to offer a reemployment training program in the event of workforce reductions; (ix) the borrower undergoing a change in control without the lender’s consent; or (x) the borrower using the loan proceeds for unauthorized purposes.

BNDES Vessel Conversion & Drydock Loans

As of the Closing Date, the Wilson Companies had outstanding borrowings under certain other Credit Facility Agreements with BNDES (collectively, the BNDES C&D Loan Agreements and the borrowings thereunder, the BNDES C&D Loans). The BNDES C&D Loan Agreements were entered into between December 2022 and July 2026 and subsequently amended. The agreements are among BNDES, as lender, and WSO or Magallanes Navegação Brasileira S.A. (MNB), a wholly owned subsidiary of WSUT (now known as Tidewater Navegação Brasileira S.A.), as borrower. Each BNDES C&D Loan Agreement provides for a loan facility with an interest rate of 2.4% or 3% per annum. Maturity dates range from February 2027 to July 2035. The principal currently amortizes in aggregate monthly installments and interest is payable monthly. As of September 30, 2026, the BNDES C&D Loans had an aggregate outstanding principal amount, excluding discount, of approximately $34.8 million.

The BNDES C&D Loan Agreements contain customary covenants, including requirements to comply with the “Provisions Applicable to BNDES Contracts”. Subject to variations among the individual loan agreements, these covenants generally require the applicable borrower to: (i) complete the projects within a specified period; (ii) comply with certain environmental obligations related to the projects and notify BNDES of environmental damages that may compromise the projects; (iii) notify BNDES of certain lawsuits and proceedings involving the borrower, its affiliates, employees, agents or representatives, or suppliers essential to the projects; (iv) deliver audited annual financial statements; (v) not incur indebtedness, subject to certain exceptions; (vi) not sell or encumber assets, subject to certain exceptions; (vii) not undergo any change in control; (viii) notify BNDES if any person holding a paid position at the borrower or any of its owners, controlling shareholders or directors is elected or sworn in as a member of the National Congress of Brazil; and (ix) not use the loan proceeds in any country or territory in violation of applicable sanctions.

Under the BNDES C&D Loan Agreements and subject to variations among the individual loan agreements, BNDES may declare the outstanding balance of a BNDES C&D Loan immediately due and payable upon the occurrence of certain events, including: (i) any of the circumstances specified in Articles 39 and 40 of the “Provisions Applicable to BNDES Contracts”; (ii) a final and non-appealable judgment holding the borrower liable for certain labor or environmental violations; (iii) any of the borrower’s representations being inaccurate; (iv) the borrower petitioning for or declaring bankruptcy or liquidation; (v) the borrower breaching its obligations relating to the guarantees; (vi) the borrower violating any anti-bribery, anti-terrorism, anti-money laundering, or certain other laws; (vii) the borrower’s or its controlling entities’ organizational documents include a provision that restricts the borrower’s growth, access to new markets, or ability to pay its financial obligations under the applicable loan; (viii) the borrower using the loan proceeds for unauthorized purposes; or (ix) any person holding a paid position at the borrower or any of its owners, controlling shareholders or directors being elected or sworn in as a member of the National Congress of Brazil.

The obligations under the BNDES C&D Loan Agreements are secured by bank guarantees provided by various banks.

Banco do Brasil (BB) Vessel Construction Loans

As of the Closing Date, the Wilson Companies had outstanding borrowings under a Fixed Credit Facility with Banco do Brasil S.A. (BB) (the BB Vessel Construction Loan Agreement and the borrowings thereunder, the BB Vessel Construction Loan). The BB Vessel Construction Loan Agreement was entered into on December 18, 2008 and subsequently amended. The agreement is among BB, as lender, MNB, as borrower, Tidewater Inc., as guarantor, WSUT, as depositary intervenor, and WSO, as assigning intervenor. The BB Vessel Construction Loan Agreement provides for a secured loan with an interest rate of 3.1% per annum and a maturity date of December 18, 2030. The principal currently amortizes in equal monthly installments and interest is payable monthly. As of September 30, 2026, the BB Vessel Construction Loan had an aggregate outstanding principal amount, excluding discount, of approximately $22.0 million.

On the Closing Date, upon satisfaction of all conditions precedent, Tidewater Inc. replaced a previous owner of the Wilson Companies and its affiliate as guarantors of the BB Vessel Construction Loan. The obligations under the BB Vessel Construction Loan Agreement are secured by four vessels owned by MNB. As of the Closing Date, MNB also delivered to BB, as additional security for MNB’s obligations under the BB Vessel Construction Loan Agreement, a bank guarantee issued by Banco Bradesco S.A. in an amount equal to 20% of the outstanding balance.

The BB Vessel Construction Loan Agreement contains customary covenants and events of default including requirements to: (i) maintain a ratio of EBITDA to debt service payments (comprised of principal amortization and interest) of at least 1.1 to 1; (ii) maintain an aggregate appraised value of the collateral vessels equal to at least 130% of the outstanding loan balance; (iii) not change the vessels’ primary activities without the lender’s consent; (iv) enter into contracts at market prices; (v) permit the lender to inspect the vessels; (vi) obtain BB's consent before effecting any change in control; and (vii) comply with environmental laws.

BB may declare all outstanding loan balances immediately due and payable upon the occurrence of certain events, including: (i) failure to timely pay any obligation under the BB Vessel Construction Loan Agreement; (ii) failure to pay any other debt exceeding R$500,000 within 30 days after notice; (iii) petitioning or filing for bankruptcy; (iv) failure to make timely defense of judicial or tax proceedings; (v) providing incomplete or falsified information to the lender; (vi) failure to disclose material information; (vii) defaulting on another obligation with BB exceeding R$500,000; (viii) committing fraud involving the collateral; (ix) failure to maintain required insurance on the collateral; (x) failure to supplement collateral when required; (xi) failure to make timely defense against any government assessments; or (xii) governmental seizure, expropriation or nationalization of all or a substantial part of borrower's assets, properties or shares.

Vessel Facility Agreements (Facility Agreements)

We signed agreements for the construction of ten new vessels and all have been delivered as of September 30, 2026. We entered into Facility Agreements to finance a portion of the construction and delivery costs totaling approximately EUR 24.9 million ($26.7 million). Each of the ten Facility Agreements bears interest at a fixed rate ranging from 2.7% to 6.3% and is payable in ten equal principal semi-annual installments. The Facility Agreements are secured by the vessels, guaranteed by Tidewater as parent guarantor and contain no financial covenants.

The Company’s scheduled principal long-term maturities as of September 30, 2026, were as follows:

Currency Devaluation and Fluctuation Risk

Due to our international operations, we are exposed to foreign currency exchange rate fluctuations against the U.S. dollar. For some of our international contracts, a portion of the revenue and local expenses are incurred in local currencies with the result that we are at risk for changes in the exchange rates between the U.S. dollar and foreign currencies. To minimize the financial impact of these items, we attempt to contract a significant majority of our services in U.S. dollars. In addition, we attempt to minimize the financial impact of these risks by matching the currency of our operating costs with the currency of our revenue streams when considered appropriate. We continually monitor the currency exchange risks associated with all contracts not denominated in U.S. dollars. In recent years, laws impacting our operations in certain African countries require our customers to pay us onshore in local currency rather than offshore in U.S. dollars, subjecting us to heightened currency risk and restrictions on the repatriation of cash. As a result, we have accumulated cash in these countries. We continue to take steps to mitigate this additional foreign currency and repatriation risk with a focus on reducing cash balances denominated in currencies other than the U.S. dollar. Despite our efforts to mitigate currency risk, we may report significant realized and unrealized currency-related gains or losses in our statement of operations. Beginning in the second quarter of 2025, we entered into derivative contracts to assist us in managing our foreign currency risk. See Note (11) - “Fair Value Measurements” and Note (13) - “Derivative Instruments and Hedging Activities” for activity and disclosure related to our foreign currency derivative contracts.

Legal Proceedings

In 2009, on behalf of the Venezuelan government, Petróleos de Venezuela, S.A. (PDVSA), the national oil company of Venezuela, took possession of our assets and operations in Venezuela. In connection with this expropriation, we fully wrote-down our Venezuelan assets and initiated international arbitration. In 2019, we converted our final international award into a U.S. federal court judgment, which we perfected pursuant to a writ of attachment against the shares held by PDVSA in PDV Holding, Inc. (PDVH), the parent company of CITGO Petroleum Corporation. The Delaware District Court (Court) ordered a public sale of the PDVH shares (the PDVH Sale) to satisfy the various judgments against Venezuela in Crystallex International Corp. v. Bolivarian Republic of Venezuela, No. 17-mc-151-LPS (D. Del.). On July 2, 2025, the Court appointed Special Master filed its final recommendation for the winning bid for the PDVH Sale, which included listing the Tidewater subsidiaries holding judgment as the second most senior creditor. On  November 25, 2025, the Court approved the Special Master’s recommended purchaser; however, an appeal is pending before the U.S. Court of Appeals for the Third Circuit, with a hearing held on October 21, 2026.

Closing of the PDVH Sale and the collection of our judgment, if at all, are highly uncertain and present significant practical and legal challenges, including, without limitation, satisfaction of numerous closing conditions, including regulatory approval by the Office of Foreign Assets Control, and the positive final outcome of numerous claims filed by other parties opposing the PDVH Sale. We can provide no assurances regarding the timing or ultimate outcome of this case. As of September 30, 2026, the value of our judgment, including interest and $4.6 million of reimbursable fees we have paid to the Special Master, was approximately $87.0 million. However, given the collection uncertainty, no amount had been recorded in our financial statements related to this gain contingency.

In addition to the foregoing, we are named defendants or parties in certain lawsuits, claims or proceedings incidental to our business and involved from time to time as parties to governmental investigations or proceedings 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 or gain 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 or cash flows.

Other Financial Instruments

Our primary financial instruments consist of cash and cash equivalents, restricted cash, trade receivables and trade payables with book values that are considered to be representative of their respective fair values. The carrying value for cash equivalents is considered to be representative of its fair value due to the short duration and conservative nature of the cash equivalent investment portfolio. 

We periodically enter into derivative contracts to manage our exposure to foreign currency risk. These derivative contracts, which are placed with major financial institutions, generally take the form of forward contracts with a duration of less than 12 months. We report derivative instruments on the balance sheet as either assets or liabilities measured at fair value. Changes in fair value are recognized currently in earnings unless specific hedge accounting criteria are met. We generally do not designate our derivative instruments as hedges for accounting purposes, therefore, any gains or losses resulting from changes in fair value of outstanding derivative financial instruments and from the settlement of derivative financial instruments are recognized in earnings and included as a component of foreign exchange gain (loss) in the Condensed Consolidated Statements of Operations. 

We held derivative instruments related to foreign exchange contracts recorded as current assets, which were measured at their approximate fair value of $1.3 million (Level 2) as of September 30, 2026. We held derivative instruments related to foreign exchange contracts recorded as other current assets and current liabilities, which were measured at their approximate fair value of $0.1 million and $1.3 million, respectively, (Level 2) as of December 31, 2025. See Note (13) - “Derivative Instruments and Hedging Activities” for activity and disclosure related to our foreign currency derivative contracts.

As of September 30, 2026, our property and equipment consisted primarily of 226 owned vessels located around the world, including the 22 vessels from the Wilson Acquisition. As of  December 31, 2025, our property and equipment consisted primarily of 208 owned vessels, two of which were owned under finance leases that are included in Other assets in the December 31, 2025 Consolidated Balance Sheet in the amount of $24.4 million. In the first quarter of 2026, we exercised our option under the bareboat lease agreements to purchase these two leased vessels. During the nine months ended  September 30, 2026, we sold four vessels and other assets for approximately $14.9 million in proceeds and recognized a net gain of $3.2 million on the dispositions. During the nine months ended  September 30, 2025, we sold 10 vessels and other assets for approximately $12.3 million in proceeds and recognized a net gain of $8.6 million on the dispositions.

A summary of properties and equipment is as follows:

A summary of accrued expenses is as follows:

A summary of other current liabilities is as follows:

A summary of other liabilities is as follows:

Beginning in the second quarter of 2025, we entered into foreign currency contracts to sell Euros at future defined dates and at fixed exchange rates, to limit our exposure to losses related to the revaluation of non-USD cash balances held in certain African currencies that are marked to the Euro. We did not designate these contracts as hedges for accounting purposes.

Derivative instruments are classified as either assets or liabilities based on their individual fair values. The fair value of our derivative instruments was as follows:

We recognized realized and unrealized gains on derivative instruments not designated as hedging instruments of $0.5 million and $2.8 million for the three and nine months ended  September 30, 2026. We recognized unrealized (gains) losses on derivative instruments not designated as hedging instruments of ($0.4) million and $2.9 million for the three and nine months ended September 30, 2025.

Each of our five operating segments is led by senior management ultimately reporting to our Chief Executive Officer, the chief operating decision maker (CODM). Our operating segments comprise the structure used by our CODM to make key operating decisions and assess performance. Discrete financial information is available for each of the segments, and our CODM uses the results of each of the operating segments for resource allocation and performance evaluation. Our CODM evaluates the segments’ operating performance based on segment operating income. Segment operating income is defined as segment revenues less segment costs and expenses. The CODM primarily considers segment operating income for evaluating performance of each segment and making decisions about allocating capital and other resources to each segment.

The following tables provide a comparison of revenues, vessel operating profit, depreciation and amortization, additions to properties and equipment and assets by segment and in total for the three and nine months ended September 30, 2026 and 2025. Vessel operating profit is calculated as vessel revenues less vessel operating costs, segment depreciation expenses, and segment general and administrative costs. Vessel revenues and operating costs relate to our owned and operated vessels while other operating revenues relate to the activities of our other miscellaneous marine-related businesses.