Quarterly Report for Quarter Ending September 30, 2026 (Form 10-Q)

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

Forward-Looking Statements

Certain of the statements included in this Quarterly Report on Form 10-Q (Form 10-Q) constitute forward-looking statements within the meaning of the U.S. Private Securities Litigation Reform Act of 1995, which includes any statements that are not historical facts. Such statements often contain words such as "expect," "believe," "think," "anticipate," "predict," "plan," "assume," "estimate," "forecast," "goal," "target," "projections," "intend," "should," "will," "shall" and other similar words. Forward-looking statements are made based on management's current expectations and beliefs concerning future developments and their potential effects upon Tidewater Inc. and its subsidiaries. There can be no assurance that future developments affecting Tidewater Inc. and its subsidiaries will be those anticipated by management. These forward-looking statements are not a guarantee of future performance and involve risks and uncertainties, and there are certain important factors that could cause actual results to differ, possibly materially, from expectations or estimates reflected in such forward-looking statements, including, among others: fluctuations in worldwide energy demand and oil and natural gas prices; fluctuations in macroeconomic and market conditions (including risks related to recession, inflation, supply chain constraints or disruptions, interest rates, and exchange rates); global trade trends, including evolving impacts from implementation of new tariffs and potential retaliatory measures; industry overcapacity; limited capital resources available to replenish our asset base as needed, including through acquisitions or vessel construction, and to fund our capital expenditure needs; uncertainty of global financial market conditions and potential constraints in accessing capital or credit if and when needed with favorable terms, if at all; changes in decisions and capital spending by customers in the energy industry and the industry expectations for offshore exploration, field development and production; consolidation of our customer base; loss of a major customer; changing customer demands for vessel specifications, which may make some of our older vessels technologically obsolete for certain customer projects or in certain markets; rapid technological changes; delays and other problems associated with vessel maintenance; the continued availability of qualified personnel and our ability to attract and retain them; the operating risks normally incident to our lines of business, including the potential impact of liquidated counterparties; our ability to comply with covenants in our indenture and other debt agreements; acts of terrorism and piracy; the impact of regional or global public health crises or pandemics; the impact of potential information technology, cybersecurity or data security breaches; uncertainty around the use and impacts of artificial intelligence (AI) applications; our ability to identify and complete future acquisitions; our ability to integrate the Wilson Companies and other acquired businesses; our ability to enter into new lines of business, through acquisition or otherwise; disagreements with our joint venture partners; natural disasters or significant weather conditions; unsettled political conditions, war, civil unrest and governmental actions, including expropriation or enforcement of customs or other laws that are not well developed or consistently enforced, the conflict between Russia and Ukraine, the ongoing conflict in the Middle East and the global response to these hostilities; the risks associated with our international operations, including local content, local currency or similar requirements especially in higher political risk countries where we operate; labor changes proposed by international conventions; increased regulatory burdens and oversight; changes in laws governing the taxation of foreign source income; retention of skilled workers; our participation in industry wide, multi-employer, defined pension plans; enforcement of laws related to the environment, labor and foreign corrupt practices; increased global concern, regulation and scrutiny regarding climate change; increased stockholder activism; the potential liability for remedial actions or assessments under existing or future environmental regulations or litigation; the effects of asserted and unasserted claims and the extent of available insurance coverage; the resolution of pending legal proceedings; and other risks and uncertainties detailed in this Form 10-Q and other filings we make with the SEC. If one or more of these or other risks or uncertainties materialize (or the consequences of any such development changes), or should our underlying assumptions prove incorrect, actual results or outcomes may vary materially from those reflected in our forward-looking statements. Forward-looking and other statements in this Form 10-Q regarding our environmental, social and other sustainability plans, goals or activities are not an indication that these statements are necessarily material to investors or required to be disclosed in our filings with the SEC. In addition, historical, current, and forward-looking environmental, social and sustainability-related statements may be based on standards still developing, internal controls and processes that will continue to evolve, and assumptions subject to change in the future. Statements in this Form 10-Q are made as of the date of this filing, and Tidewater disclaims any intention or obligation to update publicly or revise such statements, whether as a result of new information, future events or otherwise. In addition, see "Risk Factors" included in our Annual Report on Form 10-K, filed with the SEC on March 2, 2026 (2025 Annual Report) and in this Form 10-Q for a discussion of certain risks relating to our business and investment in our securities.

In certain places in this Form 10-Q, we may refer to reports published by third parties that purport to describe trends or developments in energy production and drilling and exploration and we specifically disclaim any responsibility for the accuracy and completeness of such information and have undertaken no steps to update or independently verify such information.

The forward-looking statements should be considered in the context of the risk factors listed above, discussed in this Form 10-Q, and discussed in our 2025 Annual Report as updated by subsequent filings with the SEC. Investors and prospective investors are cautioned not to rely unduly on such forward-looking statements, which speak only as of the date hereof. Management disclaims any obligation to update or revise any forward-looking statements contained herein to reflect new information, future events, or developments.

Management's Discussion and Analysis of Financial Condition and Results of Operations (MD&A) should be read in conjunction with the accompanying unaudited condensed consolidated financial statements and related notes thereto included in "Item 1. Financial Statements" and with our 2025 Annual Report. The following discussion and analysis contain forward-looking statements that involve risks and uncertainties. Our actual results may differ materially from those anticipated in these forward-looking statements as a result of certain factors, including those set forth under "Risk Factors" in Item 1A of our 2025 Annual Report and elsewhere in this Form 10-Q.

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 70 years. Our vessels and associated services support all phases of offshore crude oil and natural gas (also referred to as oil and gas) exploration activities, field development, production and maintenance, as well as windfarm development and maintenance. Our 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. 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 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). 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 purchase amount 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.

At September 30, 2026, we owned 226 vessels with an average age of 14.0 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 exploration, field development and production activity of our customers. Our customers' business activity, in turn, is dependent on current and expected crude oil and natural gas prices, which fluctuate depending on expected future levels of supply and demand for crude oil and natural gas, and on estimates of the cost to find, develop and produce crude oil and natural 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 in all segments are driven primarily by our active fleet size, active vessel utilization and day rates. Because a sizeable portion of our vessel 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, the more technologically sophisticated vessels generally require a greater number of specially trained and more highly compensated fleet personnel. Crew costs may increase if competition for skilled personnel intensifies.

Costs related to the recertification of vessels are deferred and amortized over 30 months 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 cyber security 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. Brokers' commissions are incurred primarily in our non-U.S. operations where brokers sometimes assist in obtaining work. Brokers generally are paid a percentage of day rates and, accordingly, commissions paid to brokers generally fluctuate in accordance with vessel revenue.

We discuss our liquidity in terms of 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 ongoing oil and gas production from offshore platforms and floating facilities, demand for offshore drilling rigs and related offshore and subsea construction and infrastructure projects which directly drive demand for our vessels. 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. Oil and gas prices are subject to significant uncertainty and, as a result, tend to be 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. Additionally, effective May 1, 2026, the United Arab Emirates (UAE), a member of OPEC, officially ended its OPEC membership.

On February 28, 2026, the United States (U.S.) and Israel initiated a military conflict with Iran that caused significant damage to Iranian infrastructure and resulted in the partial closure of the Strait of Hormuz (Strait) in the Middle East. The Strait is the transit route for approximately 20% of global crude oil and a significant percentage of LNG supplies. Iran responded to the attacks by targeting not only U.S. and Israeli assets in the region, but also a number of Middle Eastern countries including Saudi Arabia, Qatar, Dubai, Kuwait and Bahrain causing additional widespread infrastructure damage and limiting access to transportation routes for crude oil out of the Middle East. The disruption of production from the Middle East resulted in the crude oil futures prices spiking to over $100 per barrel. Cash prices have been even more volatile. The conflict is ongoing with periodic spikes in military activity and threats of expanding the conflict beyond the Persian Gulf.

The impact of the conflict in Iran has been borne primarily by our Middle East segment. The conflict has limited some customers' ability to operate at full capacity in the segment, creating some softness in market demand. However, while our activity has not been significantly interrupted to date as a result of the conflict, we have incurred increased insurance rates, higher crew wages and travel costs and higher fuel costs for vessels operating near the conflict. Specifically, beginning in March 2026, our Middle East segment experienced increased crew wages and travel costs of approximately $5.4 million, increased vessel insurance of approximately $1.8 million and increased fuel cost of approximately $1.8 million. Should the conflict continue, we anticipate similar increases in future costs. We cannot estimate the duration, nor can we predict all possible impacts of this conflict.

Based on the existing demand for oil and gas, we continue to have a positive outlook in the offshore energy industry. Although the ongoing conflict in the Middle East has introduced near-term uncertainty, we believe it underscores the strategic importance of energy security and the need for sustained upstream investment to support a reliable and affordable global energy supply. We expect offshore developments, given their scale, long reserve lives, and attractive economics, to play an important role and we believe these dynamics bode well for us, given our global operating footprint, high-specification fleet, and disciplined strategy.

RESULTS OF OPERATIONS

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

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

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. As such, stacked vessels depress utilization rates because stacked vessels are considered available to work and are included in the calculation of utilization rates. We had five stacked vessels at September 30, 2026 and eight stacked vessels at December 31, 2025.

Vessel day rates are determined by the demand created largely through the level of offshore exploration, field development and production spending by energy companies relative to the supply of offshore support vessels. Specifications of available equipment and the scope of service provided may also influence vessel day rates. 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 day is calculated based on total available days less stacked days.

Total vessels in service include vessels not owned by us and under bareboat charter agreements. We had two such vessels to begin the year, but purchased both of the vessels in the first quarter of 2026 and they are now included in our owned vessel count.

Consolidated Results - Three Months Ended September 30, 2026 compared to June 30, 2026

(In Thousands except for statistics)		Three Months Ended
		September 30, 2026				June 30, 2026				Change				% Change
Total revenue		$	360,416			$	342,287			$	18,129				5	%
Costs and expenses:
Vessel operating costs:
Crew costs			110,769				105,225				(5,544	)			(5	)%
Repair and maintenance			31,694				28,953				(2,741	)			(9	)%
Insurance			2,948				2,939				(9	)			(0	)%
Fuel, lube and supplies			19,817				21,046				1,229				6	%
Other			25,013				22,583				(2,430	)			(11	)%
Total vessel operating costs			190,241				180,746				(9,495	)			(5	)%
Costs of other operating revenues			1,350				1,072				(278	)			(26	)%
General and administrative			43,777				34,845				(8,932	)			(26	)%
Depreciation and amortization			74,707				66,412				(8,295	)			(12	)%
Loss (gain) on asset dispositions, net			8				(3,316	)			(3,324	)			100	%
Total costs and expenses			310,083				279,759				(30,324	)			(11	)%
Operating income			50,333				62,528				(12,195	)			(20	)%
Other income (expense):
Foreign exchange loss			(3,674	)			(688	)			(2,986	)			434	%
Interest income and other, net			4,842				730				4,112				563	%
Interest and other debt costs, net			(16,075	)			(16,426	)			351				2	%
Total other expense			(14,907	)			(16,384	)			1,477				9	%
Income before income taxes			35,426				46,144				(10,718	)			(23	)%
Income tax expense			18,195				25,062				6,867				27	%
Net income			17,231				21,082				(3,851	)			(18	)%
Net loss attributable to noncontrolling interests			(283	)			(580	)			297				51	%
Net income attributable to Tidewater Inc.		$	17,514			$	21,662			$	(4,148	)			(19	)%
Select operating statistics:
Utilization			77.4	%			79.2	%			(1.8	)%
Active utilization			79.2	%			81.4	%			(2.2	)%
Average vessel day rates		$	23,775			$	22,938			$	837				3.6	%
Vessel operating cost per active day		$	9,997			$	9,886			$	(111	)			(1.1	)%
Average total vessels			211				206				5
Average stacked vessels			(5	)			(6	)			1
Average active vessels			206				200				6

Revenue:

	●	Increase primarily due to the addition of the 22 Wilson Vessels acquired effective August 31, 2026.
	●	Increase in day rates was primarily due to increases in demand in Europe/Mediterranean.

Vessel operating costs:

●

Increase primarily due to the 22 Wilson Vessels in the third quarter which drove $7.8 million of incremental costs.

General and administrative:

●

Increase primarily due to higher transaction expenses associated with the Wilson Acquisition and incremental costs from the shore-based personnel from the Wilson Acquisition.

Depreciation and amortization:

●

Increase primarily due to the 22 Wilson Vessels acquired effective August 31, 2026.

Loss (gain) on asset dispositions, net:

●

During the third quarter of 2026, we had no vessel sales. During the second quarter of 2026, we sold two vessels and other assets for approximately $11.5 million in proceeds and recognized a net gain of $3.3 million on the dispositions.

Interest income and other, net:

●

Increase primarily due to interest income resulting from higher cash balances.

Interest expense:

●

No significant variances.

Foreign exchange losses:

●

Our foreign exchange losses in the third quarter of 2026 was primarily the result of the settlement and revaluation of various foreign currency balances due to the strengthening of the U.S. Dollar against the Central African Franc, West African Franc, Norwegian Kroner, Brazilian Real, Angola Kwanza, British Pound and Euro.

Income tax expense:

●

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. The decrease in income taxes for the three months ended September 30, 2026, compared to the three months ended June 30, 2026, is mainly attributable to taxes on our operations in foreign countries. Tax expense will vary disproportionally to overall net income due to the mix of profits and losses in these foreign tax regimes.

Segment results for three months ended September 30, 2026 compared to June 30, 2026

Americas Segment Operations.

(In Thousands except for statistics)		Three Months Ended
		September 30, 2026				June 30, 2026				Change				% Change
Total revenue		$	71,997			$	53,969			$	18,028				33	%
Costs and expenses:
Vessel operating costs:
Crew costs			24,255				17,972				(6,283	)			(35	)%
Repair and maintenance			7,081				5,706				(1,375	)			(24	)%
Insurance			499				429				(70	)			(16	)%
Fuel, lube and supplies			3,533				3,252				(281	)			(9	)%
Other			6,287				5,276				(1,011	)			(19	)%
Total vessel operating costs			41,655				32,635				(9,020	)			(28	)%
General and administrative			6,247				4,143				(2,104	)			(51	)%
Depreciation and amortization			19,335				9,806				(9,529	)			(97	)%
Vessel operating profit		$	4,760			$	7,385			$	(2,625	)			(36	)%
Select operating statistics:
Utilization			72.1	%			68.0	%			4.1	%
Active utilization			80.8	%			78.5	%			2.3	%
Average vessel day rates		$	29,194			$	29,056			$	138				0.5	%
Vessel operating cost per active day		$	13,569			$	13,678			$	109				0.8	%
Average total vessels			37				30				7
Average stacked vessels			(4	)			(4	)			-
Average active vessels			33				26				7

Revenue:

	●	Increase primarily driven by one month of revenue from the 22 Wilson Vessels.
	●	Utilization increased due to the addition of the Wilson Vessels.

Vessel operating costs:

●

Increase primarily due to higher number of vessels in the segment associated with the Wilson Acquisition.

General and administrative expense:

●

Increase primarily due to incremental costs associated with the Wilson Acquisition.

Depreciation and amortization expense:

●

Increase primarily due to the additional vessels in the segment.

Asia Pacific Segment Operations.

(In Thousands except for statistics)		Three Months Ended
		September 30, 2026				June 30, 2026				Change				% Change
Total revenue		$	44,538			$	47,948			$	(3,410	)			(7	)%
Costs and expenses:
Vessel operating costs:
Crew costs			18,516				17,630				(886	)			(5	)%
Repair and maintenance			3,407				3,136				(271	)			(9	)%
Insurance			273				283				10				4	%
Fuel, lube and supplies			2,112				3,048				936				31	%
Other			1,857				2,095				238				11	%
Total vessel operating costs			26,165				26,192				27				0	%
General and administrative			2,340				2,442				102				4	%
Depreciation and amortization			5,598				6,207				609				10	%
Vessel operating profit		$	10,435			$	13,107			$	(2,672	)			(20	)%
Select operating statistics:
Utilization			69.9	%			74.9	%			(5.0	)%
Active utilization			69.9	%			74.9	%			(5.0	)%
Average vessel day rates		$	37,858			$	37,013			$	845				2.3	%
Vessel operating cost per active day		$	15,556			$	15,148			$	(407	)			(2.7	)%
Average total vessels			18				19				(1	)
Average stacked vessels			-				-				-
Average active vessels			18				19				(1	)

Revenue:

	●	Decrease primarily driven by one less vessel in the segment and lower utilization, partially offset by higher average day rates.
	●	Utilization decreased due to higher idle days.

Vessel operating costs:

●

No significant variances.

General and administrative expense:

●

No significant variances.

Depreciation and amortization expense:

●

Decrease primarily due to a lower vessel count.

Middle East Segment Operations.

(In Thousands except for statistics)		Three Months Ended
		September 30, 2026				June 30, 2026				Change				% Change
Total revenue		$	46,418			$	48,483			$	(2,065	)			(4	)%
Costs and expenses:
Vessel operating costs:
Crew costs			15,450				17,314				1,864				11	%
Repair and maintenance			5,713				4,514				(1,199	)			(27	)%
Insurance			871				852				(19	)			(2	)%
Fuel, lube and supplies			3,548				3,548				-				0	%
Other			4,732				4,044				(688	)			(17	)%
Total vessel operating costs			30,314				30,272				(42	)			(0	)%
General and administrative			2,345				2,316				(29	)			(1	)%
Depreciation and amortization			9,963				9,711				(252	)			(3	)%
Vessel operating profit		$	3,796			$	6,184			$	(2,388	)			(39	)%
Select operating statistics:
Utilization			76.0	%			81.3	%			(5.3	)%
Active utilization			77.1	%			81.3	%			(4.2	)%
Average vessel day rates		$	14,758			$	14,555			$	203				1.4	%
Vessel operating cost per active day		$	7,416			$	7,392			$	(23	)			(0.3	)%
Average total vessels			45				45				-
Average stacked vessels			(1	)			-				(1	)
Average active vessels			44				45				(1	)

Revenue:

	●	Decrease primarily driven by lower utilization and lower active vessel count partially offset by higher average day rates
	●	Utilization decreased due to higher dry dock and repair days.

Vessel operating costs:

●

Increase primarily due to higher repair costs as a result of higher repair days, largely offset by lower crew costs.

General and administrative expense:

●

No significant variances.

Depreciation and amortization expense:

●

No significant variances.

Europe/Mediterranean Segment Operations.

(In Thousands except for statistics)		Three Months Ended
		September 30, 2026				June 30, 2026				Change				% Change
Total revenue		$	121,546			$	112,076			$	9,470				8	%
Costs and expenses:
Vessel operating costs:
Crew costs			35,282				34,312				(970	)			(3	)%
Repair and maintenance			9,051				9,419				368				4	%
Insurance			770				810				40				5	%
Fuel, lube and supplies			4,152				5,229				1,077				21	%
Other			6,920				5,981				(939	)			(16	)%
Total vessel operating costs			56,175				55,751				(424	)			(1	)%
General and administrative			3,547				3,401				(146	)			(4	)%
Depreciation and amortization			24,882				26,075				1,193				5	%
Vessel operating profit		$	36,942			$	26,849			$	10,093				38	%
Select operating statistics:
Utilization			90.4	%			88.5	%			1.9	%
Active utilization			90.4	%			88.5	%			1.9	%
Average vessel day rates		$	25,748			$	24,341			$	1,407				5.8	%
Vessel operating cost per active day		$	10,762			$	10,713			$	(49	)			(0.5	)%
Average total vessels			57				57				-
Average stacked vessels			-				-				-
Average active vessels			57				57				-

Revenue:

	●	Increase primarily driven by higher utilization and higher average day rates, primarily in the U.K. sector of the North Sea.
	●	Active utilization increased due to lower drydock and mobilization days.

Vessel operating costs:

●

Increase primarily due to higher crew costs as a result of reduced credit received from government payroll reimbursement in the third quarter compared to the second quarter.

General and administrative expense:

●

No significant variances.

Depreciation and amortization expense:

●

Decrease primarily due to the vessel depreciable value mix in the segment.

West Africa Segment Operations.

(In Thousands except for statistics)		Three Months Ended
		September 30, 2026				June 30, 2026				Change				% Change
Total revenue		$	73,048			$	77,255			$	(4,207	)			(5	)%
Costs and expenses:
Vessel operating costs:
Crew costs			17,266				17,997				731				4	%
Repair and maintenance			6,442				6,178				(264	)			(4	)%
Insurance			535				565				30				5	%
Fuel, lube and supplies			6,472				5,969				(503	)			(8	)%
Other			5,217				5,187				(30	)			(1	)%
Total vessel operating costs			35,932				35,896				(36	)			(0	)%
General and administrative			2,914				3,254				340				10	%
Depreciation and amortization			13,776				13,493				(283	)			(2	)%
Vessel operating profit		$	20,426			$	24,612			$	(4,186	)			(17	)%
Select operating statistics:
Utilization			71.1	%			75.3	%			(4.2	)%
Active utilization			71.1	%			77.5	%			(6.4	)%
Average vessel day rates		$	20,692			$	20,751			$	(59	)			(0.3	)%
Vessel operating cost per active day		$	7,235			$	7,355			$	120				1.6	%
Average total vessels			54				55				(1	)
Average stacked vessels			-				(2	)			2
Average active vessels			54				53				1

Revenue:

	●	Decrease primarily driven by lower utilization and lower average day rates.
	●	Utilization decreased primarily due to higher idle and drydock days.

Vessel operating costs:

●

No significant variances.

General and administrative expense:

●

Decrease primarily due to lower personnel costs and lower professional fees.

Depreciation and amortization expense:

●

Increase primarily due to higher number of vessels.

Consolidated Results - Nine months ended September 30, 2026 compared to September 30, 2025

(In Thousands except for statistics)		Nine Months Ended
		September 30, 2026				September 30, 2025				Change				% Change
Total revenue		$	1,028,925			$	1,015,988			$	12,937				1	%
Costs and expenses:
Vessel operating costs:
Crew costs			314,881				302,118				(12,763	)			(4	)%
Repair and maintenance			85,451				74,527				(10,924	)			(15	)%
Insurance			8,547				7,566				(981	)			(13	)%
Fuel, lube and supplies			57,317				45,926				(11,391	)			(25	)%
Other			70,978				78,326				7,348				9	%
Total vessel operating costs			537,174				508,463				(28,711	)			(6	)%
Costs of other operating revenues			3,183				5,790				2,607				45	%
General and administrative			112,181				95,563				(16,618	)			(17	)%
Depreciation and amortization			207,738				196,150				(11,588	)			(6	)%
Gain on asset dispositions, net			(3,196	)			(8,598	)			(5,402	)			(63	)%
Total costs and expenses			857,080				797,368				(59,712	)			(7	)%
Operating income			171,845				218,620				(46,775	)			(21	)%
Other income (expense):
Foreign exchange gain (loss)			(7,765	)			20,549				(28,314	)			(138	)%
Interest income and other, net			7,761				4,715				3,046				65	%
Loss on early extinguishment of debt			-				(27,101	)			27,101				(100	)%
Interest and other debt costs, net			(49,392	)			(49,375	)			(17	)			(0	)%
Total other expense			(49,396	)			(51,212	)			1,816				4	%
Income before income taxes			122,449				167,408				(44,959	)			(27	)%
Income tax expense			78,160				53,404				(24,756	)			(46	)%
Net income			44,289				114,004				(69,715	)			(61	)%
Net loss attributable to noncontrolling interests			(1,027	)			(773	)			(254	)			(33	)%
Net income attributable to Tidewater Inc.		$	45,316			$	114,777			$	(69,461	)			(61	)%
Select operating statistics:
Utilization			78.1	%			75.3	%			2.8	%
Active utilization			80.4	%			77.8	%			2.6	%
Average vessel day rates		$	23,007			$	22,753			$	254				1.1	%
Vessel operating cost per active day		$	9,694			$	8,918			$	(776	)			(8.7	)%
Average total vessels			208				214				(6	)
Average stacked vessels			(6	)			(7	)			1
Average active vessels			202				207				(5	)

Revenue:

●

Increase primarily due to one month of revenue from the Wilson Acquisition that closed on August 31, 2026.

Vessel operating costs:

●

Increase primarily due to higher repair and maintenance costs, higher crew costs and higher fuel costs. The increase in repair costs was primarily due to higher repair days and several high-cost repairs. In addition, the Wilson Acquisition added incremental vessel operating costs totaling $7.8 million. The crew costs increase was primarily driven by war premium bonuses and crew travel costs in the Middle East related to the Iran conflict. The increase in fuel costs is primarily due to higher vessel mobilization days and increase in fuel prices as a result of the Iran conflict. These increases were partially offset by lower other costs due to lower deductibles on insured claims and lower relief vessel costs in 2026 compared to 2025.

General and administrative:

●

Increase primarily due to higher transaction expenses associated with the Wilson Acquisition. The Wilson Acquisition also added incremental costs of $2.4 million.

Depreciation and amortization:

●

Increase primarily due to the Wilson Acquisition which added incremental costs of $9.1 million.

Gain on asset dispositions, net:

●

During the first nine months of 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 first nine months of 2025, we sold ten vessels and other assets for approximately $12.3 million in proceeds and recognized a net gain of $8.6 million on the dispositions.

Interest income and other, net:

●

Increase due to interest income from higher cash balances, partially offset by transaction costs associated with the conversion of Central African Franc to U.S. Dollar.

Loss on early extinguishment of debt:

●

Decrease primarily due to the early redemption premiums incurred in 2025 as a result of the redemption of the 10.375% Senior Unsecured Notes due July 2028 and the 8.5% Senior Secured Notes due 2026.

Interest expense:

●

No significant variances.

Foreign exchange gain (loss):

●

Our foreign exchange losses in 2026 and gains in 2025, were primarily the result of the settlement and revaluation of various foreign currency balances due to the strengthening or weakening of the U.S. Dollar against the Central African Franc, West African Franc, Norwegian Kroner, Brazilian Real, Angola Kwanza, British Pound and Euro.

Income tax expense:

●

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. The increase in income taxes for the nine months ended September 30, 2026, compared to the nine months ended September 30, 2025, was primarily driven by the tax benefit, totaling approximately $27.0 million, from the release of valuation allowance in the U.S. on net operating losses during the nine months ended September 30, 2025. Additionally, during the nine months ended September 30, 2026, we recognized a gain on sale of a vessel which resulted in $2.9 million of Pillar Two top-up tax and was included as Subpart F income and subject to U.S. taxation.

Segment results for nine months ended September 30, 2026 compared to September 30, 2025

Americas Segment Operations.

(In Thousands except for statistics)		Nine Months Ended
		September 30, 2026				September 30, 2025				Change				% Change
Total revenue		$	184,492			$	200,523			$	(16,031	)			(8	)%
Costs and expenses:
Vessel operating costs:
Crew costs			61,956				59,726				(2,230	)			(4	)%
Repair and maintenance			18,015				14,446				(3,569	)			(25	)%
Insurance			1,390				1,492				102				7	%
Fuel, lube and supplies			9,672				7,296				(2,376	)			(33	)%
Other			17,127				20,692				3,565				17	%
Total vessel operating costs			108,160				103,652				(4,508	)			(4	)%
General and administrative			14,141				11,047				(3,094	)			(28	)%
Depreciation and amortization			40,479				36,033				(4,446	)			(12	)%
Vessel operating profit		$	21,712			$	49,791			$	(28,079	)			(56	)%
Select operating statistics:
Utilization			68.9	%			73.4	%			(4.5	)%
Active utilization			78.9	%			77.1	%			1.8	%
Average vessel day rates		$	29,250			$	29,661			$	(411	)			(1.4	)%
Vessel operating cost per active day		$	13,424			$	11,808			$	(1,616	)			(13.7	)%
Average total vessels			34				33				1
Average stacked vessels			(5	)			(2	)			(3	)
Average active vessels			29				31				(2	)

Revenue:

	●	Decrease primarily driven by lower active vessel count and lower average day rates partially offset by higher active utilization.
	●	Active utilization increased due to lower idle days.

Vessel operating costs:

●

Increase primarily due to the Wilson Acquisition, which added $7.8 million, partially offset by a legal claim accrual recorded in 2025.

General and administrative expense:

●

Increase primarily due to $2.4 million of incremental costs associated with the Wilson Acquisition and higher personnel costs.

Depreciation and amortization expense:

●

Increase primarily due to $9.1 million costs associated with the Wilson Acquisition, partially offset by lower drydock amortization as a result of vessel transfers out of the segment.

Asia Pacific Segment Operations.

(In Thousands except for statistics)		Nine Months Ended
		September 30, 2026				September 30, 2025				Change				% Change
Total revenue		$	139,050			$	147,710			$	(8,660	)			(6	)%
Costs and expenses:
Vessel operating costs:
Crew costs			52,013				59,736				7,723				13	%
Repair and maintenance			9,500				9,477				(23	)			(0	)%
Insurance			810				830				20				2	%
Fuel, lube and supplies			7,673				5,999				(1,674	)			(28	)%
Other			5,706				7,203				1,497				21	%
Total vessel operating costs			75,702				83,245				7,543				9	%
General and administrative			7,007				6,832				(175	)			(3	)%
Depreciation and amortization			17,329				16,845				(484	)			(3	)%
Vessel operating profit		$	39,012			$	40,788			$	(1,776	)			(4	)%
Select operating statistics:
Utilization			74.3	%			71.8	%			2.5	%
Active utilization			74.3	%			71.8	%			2.5	%
Average vessel day rates		$	37,434			$	37,739			$	(305	)			(0.8	)%
Vessel operating cost per active day		$	15,137			$	15,314			$	176				1.2	%
Average total vessels			18				20				(2	)
Average stacked vessels			-				-				-
Average active vessels			18				20				(2	)

Revenue:

	●	Decrease driven by a lower number of vessels, primarily from vessels transferring out of Australia, and lower average day rates.
	●	Utilization increased due to lower drydock and repair days.

Vessel operating costs:

●

Decrease primarily due to lower crew costs associated with vessels leaving Australia which is a high operating cost area. This decrease was partially offset by higher fuel costs associated with higher fuel prices and an increase in fuel consumption from higher mobilization days.

General and administrative expense:

●

No significant variances.

Depreciation and amortization expense:

●

Increase primarily due to the vessel depreciable value mix in the segment.

Middle East Segment Operations.

(In Thousands except for statistics)		Nine Months Ended
		September 30, 2026				September 30, 2025				Change				% Change
Total revenue		$	140,470			$	125,552			$	14,918				12	%
Costs and expenses:
Vessel operating costs:
Crew costs			48,291				40,123				(8,168	)			(20	)%
Repair and maintenance			14,083				12,917				(1,166	)			(9	)%
Insurance			2,486				1,356				(1,130	)			(83	)%
Fuel, lube and supplies			9,780				8,205				(1,575	)			(19	)%
Other			12,851				13,491				640				5	%
Total vessel operating costs			87,491				76,092				(11,399	)			(15	)%
General and administrative			6,938				8,470				1,532				18	%
Depreciation and amortization			29,433				23,539				(5,894	)			(25	)%
Vessel operating profit		$	16,608			$	17,451			$	(843	)			(5	)%
Select operating statistics:
Utilization			78.7	%			82.5	%			(3.8	)%
Active utilization			79.1	%			82.5	%			(3.4	)%
Average vessel day rates		$	14,535			$	12,957			$	1,578				12.2	%
Vessel operating cost per active day		$	7,152			$	6,482			$	(670	)			(10.3	)%
Average total vessels			45				43				2
Average stacked vessels			-				-				-
Average active vessels			45				43				2

Revenue:

	●	Increase primarily driven by higher average day rates and higher vessel count, partially offset by lower utilization.
	●	Utilization decreased primarily due to higher idle days.

Vessel operating costs:

●

Increase primarily due to higher crew costs from war risk bonuses and crew travel costs; insurance; and fuel costs directly related to the Iran conflict. This increase was offset by lower other costs primarily due to lower training costs and lower mobilization costs.

General and administrative expense:

●

Decrease primarily due to lower personnel costs in 2026.

Depreciation and amortization expense:

●

Increase primarily due to higher number of vessels.

Europe/Mediterranean Segment Operations.

(In Thousands except for statistics)		Nine Months Ended
		September 30, 2026				September 30, 2025				Change				% Change
Total revenue		$	320,567			$	261,225			$	59,342				23	%
Costs and expenses:
Vessel operating costs:
Crew costs			101,293				86,557				(14,736	)			(17	)%
Repair and maintenance			26,036				19,928				(6,108	)			(31	)%
Insurance			2,279				2,062				(217	)			(11	)%
Fuel, lube and supplies			14,032				8,769				(5,263	)			(60	)%
Other			18,667				15,730				(2,937	)			(19	)%
Total vessel operating costs			162,307				133,046				(29,261	)			(22	)%
General and administrative			10,710				10,527				(183	)			(2	)%
Depreciation and amortization			75,714				69,695				(6,019	)			(9	)%
Vessel operating profit		$	71,836			$	47,957			$	23,879				50	%
Select operating statistics:
Utilization			86.4	%			88.6	%			(2.2	)%
Active utilization			86.4	%			88.6	%			(2.2	)%
Average vessel day rates		$	24,129			$	21,530			$	2,599				12.1	%
Vessel operating cost per active day		$	10,558			$	9,736			$	(822	)			(8.4	)%
Average total vessels			56				50				6
Average stacked vessels			-				-				-
Average active vessels			56				50				6

Revenue:

	●	Increase primarily driven by higher day rates and an increase in the vessel count as we had vessels transfer into the segment. This was partially offset by a decrease in utilization.
	●	Active utilization decreased due to higher drydock and mobilization days.

Vessel operating costs:

●

Increase primarily due to higher crew costs as a result of increased vessel count and higher fuel costs largely related to higher fuel prices and an increase in fuel consumption from higher mobilization days. The increase in repair and maintenance costs was primarily due to vessels transferring into the segment and high-cost repairs.

General and administrative expense:

●

No significant variances.

Depreciation and amortization expense:

●

Increase primarily due to higher depreciation and amortization of drydock costs from higher number of vessels.

West Africa Segment Operations.

(In Thousands except for statistics)		Nine Months Ended
		September 30, 2026				September 30, 2025				Change				% Change
Total revenue		$	236,117			$	271,038			$	(34,921	)			(13	)%
Costs and expenses:
Vessel operating costs:
Crew costs			51,328				55,976				4,648				8	%
Repair and maintenance			17,817				17,759				(58	)			(0	)%
Insurance			1,582				1,826				244				13	%
Fuel, lube and supplies			16,160				15,657				(503	)			(3	)%
Other			16,627				21,210				4,583				22	%
Total vessel operating costs			103,514				112,428				8,914				8	%
General and administrative			9,139				8,267				(872	)			(11	)%
Depreciation and amortization			41,196				47,295				6,099				13	%
Vessel operating profit		$	82,268			$	103,048			$	(20,780	)			(20	)%
Select operating statistics:
Utilization			76.0	%			62.9	%			13.1	%
Active utilization			78.0	%			68.2	%			9.8	%
Average vessel day rates		$	20,726			$	23,137			$	(2,411	)			(10.4	)%
Vessel operating cost per active day		$	7,007			$	6,436			$	(571	)			(8.9	)%
Average total vessels			55				68				(13	)
Average stacked vessels			(1	)			(5	)			4
Average active vessels			54				63				(9	)

Revenue:

	●	Decrease primarily driven by lower vessel count as we had vessels transfer out of the segment, and lower day rates, partially offset by much higher utilization.
	●	Utilization increased primarily due to lower idle and drydock days.

Vessel operating costs:

●

Decrease primarily due to lower crew costs as a result of lower number of vessels in the segment and lower other costs as a result of lower relief vessel costs in 2026 compared to 2025.

General and administrative expense:

●

Increase primarily due to higher professional fees, salaries and benefits and travel costs.

Depreciation and amortization expense:

●

Decrease due to lower amortization of drydock costs largely related to lower vessel count.

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 September 30, 2026, we had $395.0 million in cash and cash equivalents and restricted cash, and a borrowing capacity under our Revolving Credit Facility of $250.0 million for which any future borrowings would be due April 2030. As of the date of this filing, no amounts have been drawn under the Revolving Credit Facility. As of September 30, 2026, we had $650.0 million in 9.125% Senior Notes that mature in July 2030 (2030 Notes). In addition, we acquired the Wilson Companies subject to their existing debt totaling approximately $224.5 million at September 30, 2026. Please refer to Note (9) - "Debt" to the accompanying Condensed Consolidated Financial Statements for further details on our indebtedness. Working capital, which includes cash on hand, was $435.4 million at September 30, 2026, and included $58.7 million of current maturities on long term debt.

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). 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 purchase amount 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.

As of September 30, 2026, the Wilson Companies' total outstanding debt consisted of (i) the vessel construction loans from Banco Nacional de Desenvolvimento Econômico e Social (BNDES), totaling approximately $167.7 million in aggregate principal amount and maturing between December 2026 and December 2035 (BNDES Vessel Construction Loans), (ii) the vessel conversion and drydock loans from BNDES, totaling approximately $34.8 million in aggregate principal amount and maturing between February 2027 and July 2035 (BNDES C&D Loans), and (iii) the vessel construction loan from Banco do Brasil S.A. (BB), totaling approximately $22.0 million in aggregate principal amount and maturing in December 2030 (BB Vessel Construction Loan). The BNDES Vessel Construction Loans and the BB Vessel Construction Loan were originally used to fund the construction of new vessels. As of the date of this filing, all the relevant construction has been completed, and the vessels serve as collateral securing the Wilson Companies' obligations.

We believe cash and cash equivalents and net cash provided by operating activities, supplemented with our revolving credit capacity, provide us with sufficient liquidity to fund our obligations and meet our liquidity requirements. We do not expect any significant liquidity issues to arise from the Iran conflict, but we will continue to monitor this situation.

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 September 30, 2026, approximately 21% 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 cash on hand, the sale of our securities or through debt financing.

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 as defined in the agreement 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 and anticipate maintaining ongoing compliance with these financial covenants.

The Wilson Companies' loan agreements contain affirmative and negative covenants, representations and warranties, and events of default customary for loans of similar nature. Among its other covenants, the BB Vessel Construction Loan requires Magallanes Navegação Brasileira S.A. (now known as Tidewater Navegação Brasileira S.A.), the borrower and a wholly owned subsidiary of WSUT, to maintain (i) a ratio of EBITDA to debt service payments (comprised of principal amortizations and interest) at 1.1 to 1 or higher and (ii) an aggregate appraised value of at least 130% of the outstanding loan balance for vessels serving as collateral. The BNDES Vessel Construction Loans require Wilson Sons Offshore S.A. (now known as Tidewater do Brasil S.A.), the borrower and a wholly owned subsidiary of WSUT, to maintain an aggregate appraised value of at least 130% of the outstanding loan balance for vessels serving as collateral. The Wilson Companies are currently in compliance and anticipate maintaining ongoing compliance with these financial covenants.

During the nine months ended September 30, 2026, we generated $44.3 million in net income and $161.4 million in cash flow from operating activities, which is net of our interest payments and drydock costs.

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 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. Please refer to Item 5 of our 2025 Annual Report - Market for Registrant's Common Equity, Related Stockholder Matters, and Issuer Purchases of Equity Securities for additional information regarding repurchases of our common stock.

Dividends

No dividends were declared for the nine months ended September 30, 2026 and 2025. See also Note (6) - "Stockholders' Equity and Dilutive Equity Instruments" to the accompanying Condensed Consolidated Financial Statements.

Operating Activities

Net cash provided by operating activities for the nine months ended September 30, 2026 and 2025 was $161.4 million and $226.1 million, respectively.

Net cash provided by operating activities for the nine months ended September 30, 2026 reflects net income of $44.3 million, which includes non-cash depreciation and amortization of $207.7 million and net gains on asset dispositions of $3.2 million. Combined changes in operating assets and liabilities used $35.9 million in cash, and cash paid for deferred drydock and survey costs was $87.9 million.

Net cash provided by operating activities for the nine months ended September 30, 2025 reflects net income of $114.0 million, which includes non-cash depreciation and amortization of $196.2 million and net gains on asset dispositions of $8.6 million. Combined changes in operating assets and liabilities provided $0.9 million in cash, and cash paid for deferred drydock and survey costs was $84.7 million.

Investing Activities

Net cash used in investing activities for the nine months ended September 30, 2026 and 2025 was $297.3 million and $7.7 million, respectively.

Net cash used in investing activities for the nine months ended September 30, 2026 reflects $273.0 million related to the Wilson Acquisition and the receipt of $14.9 million primarily related to the sale of four vessels. Additions to properties and equipment were comprised of approximately $34.2 million in capitalized upgrades to existing vessels and equipment and $5.0 million primarily for other property and information technology equipment purchases and development work.

Net cash used in investing activities for the nine months ended September 30, 2025 reflects receipt of $12.3 million primarily related to the sale of 10 vessels. Additions to properties and equipment were comprised of approximately $15.2 million in capitalized upgrades to existing vessels and equipment and $5.4 million primarily for other property and information technology equipment purchases and development work.

Financing Activities

Net cash used in financing activities for the nine months ended September 30, 2026 and 2025 was $48.0 million and $132.4 million, respectively.

Net cash used in financing activities for the nine months ended September 30, 2026 included payments of long-term debt of $8.5 million, share repurchases of $7.9 million, debt issuance costs of $0.1 million, finance lease payments of $24.9 million related to the acquisition of two vessels previously under bareboat charters and $6.6 million in shares acquired to pay employee taxes on share-based awards.

Net cash used in financing activities for the nine months ended September 30, 2025 included proceeds from long-term debt of $650.0 million, payments of long-term debt of $640.1 million, the purchase of 2,290,204 shares of our common stock for $90.1 million, debt issuance costs of $19.0 million, early redemption premiums of $19.6 million reflecting the retirement of the senior notes, finance lease payments of $5.5 million and the acquisition of $8.0 million in shares to pay employee taxes on share-based awards.

Application of Critical Accounting Policies and Estimates

Our 2025 Annual Report filed with the SEC on March 2, 2026, describes the accounting policies that are critical to reporting our financial position and operating results and that require management's most difficult, subjective or complex judgments. This Quarterly Report on Form 10-Q should be read in conjunction with the discussion contained in our 2025 Annual Report regarding these critical accounting policies. In addition, we are emphasizing the accounting policies and estimates associated with our business acquisitions as follows:

Business Combinations

On August 31, 2026 (Closing Date), we completed the acquisition of the Wilson Companies. Assets acquired and liabilities assumed in the business combination have been recorded at their estimated fair values as of the Closing Date under the acquisition method of accounting. The estimated fair values of certain assets and liabilities require judgments and assumptions. Adjustments might be made to these estimates during the measurement period (typically up to one year) subsequent to the Closing Date. These adjustments could be material. Please refer to Note (3) - "Acquisitions" to the accompanying Condensed Consolidated Financial Statements included in Part I, Item 1 of this Form 10-Q for further details on the impact of this business combination on our consolidated financial statements.

New Accounting Pronouncements

For information regarding the effect of new accounting pronouncements, see "Note (2) - Recently Issued or Adopted Accounting Pronouncements" to the accompanying Condensed Consolidated Financial Statements included in Part I, Item 1 of this Form 10-Q.