SEACOR Holdings Announces Results For The Second Quarter Ended June 30, 2019
FORT LAUDERDALE, Fla., July 24, 2019 (GLOBE NEWSWIRE) -- SEACOR Holdings Inc. (NYSE:CKH) (the “Company”) today announced its results for the quarter ended June 30, 2019:
Net income attributable to stockholders was $14.6 million ($0.76 per diluted share) compared with $45.1 million ($2.14 per diluted share) for the quarter ended June 30, 2018, which benefited from a net gain of $42.6 million ($1.89 per diluted share) related to the sale of the Company's interest in Hawker Pacific Airservices.
Operating income, excluding gains on asset dispositions, was $10.4 million, a $1.1 million decrease compared with the quarter ended June 30, 2018.
“Cash Earnings” were $32.9 million compared with $2.3 million for the quarter ended June 30, 2018.
The Company uses the non-GAAP financial measures "Cash Earnings" and OIBDA in this release; a reconciliation to their closest U.S. GAAP measure is included in "Use of non-GAAP Financial Measures" in this release.
Charles Fabrikant, Executive Chairman, commented:
"The flooding on the U.S. Inland Waterways in the second quarter was historic in both duration and breadth of the river system that was affected. The lower Mississippi River at Baton Rouge, LA has been above flood stage since January and likely won't fall below flood stage until late August exceeding a record that dates to the 1920's. The immediate impact from the high water was a 26% reduction of exports through the center Gulf in the second quarter compared with a year ago. The effects will continue as corn production is expected to decline due to the delay in planting the current year crop. We have already seen a spike in corn and bean prices, which negatively impacts the export market further. The flooding also significantly impacted the upper Mississippi, Illinois and Arkansas rivers, as well as the St. Louis harbor, which was closed for 45 days. Our terminal and fleeting locations in St. Louis lost business and incurred additional costs to prepare and secure our facilities and assets to prevent damage or loss. At present, certain portions of our operations are beginning to return to "normal," however, I suspect we will be feeling the effects of the flooding for some time to come."
Operating Discussion
Ocean Transportation & Logistics Services - Operating income and OIBDA attributable to SEACOR (excluding our partner’s noncontrolling interests in SEA-Vista) were $16.1 million and $23.2 million in the current year quarter compared with $6.5 million and $14.9 million in the prior year quarter, respectively.
Operating income in the current year quarter benefited from an increase in harbor towing activities, container and project cargo activity between the U.S., the Bahamas and the Caribbean and lower dry-docking costs.
Inland Transportation & Logistics Services - Operating income (loss) and OIBDA were $(1.5) million and $4.2 million in the current year quarter compared with $2.1 million and $8.3 million in the prior year quarter, respectively. Operating income (loss) and OIBDA included gains on asset dispositions of $0.3 million and $0.5 million in the current year quarter and prior year quarter, respectively.
Operating results in the current year quarter were impacted by prolonged flooding throughout the U.S. Inland Waterways resulting in a severe disruption to bulk transportation activities. Dry-cargo barge pool revenues declined year over year but were offset by lower operating expenses, primarily towing costs. Flooding closed the St. Louis harbor for 45 days during the current year quarter and restricted activity at the Company's terminal and fleeting locations; the volumes handled by the Company's terminals in the St. Louis area were approximately 60% lower in the current year quarter compared with the prior year quarter.
Witt O’Brien’s - Operating income and OIBDA were $1.0 million and $1.2 million in the current year quarter compared with $4.6 million and $4.8 million in the preceding quarter, and $7.3 million and $7.8 million in the prior year quarter, respectively. Operating income in the current year quarter was impacted by lower revenues following the successful completion of certain major task orders related to long-term recovery programs in Texas and the U.S. Virgin Islands, and the conclusion of disaster response work for multiple city and county governments. Results were also impacted by a bad debt charge. The quarter also included increased administrative and general expenses necessary to support the significant growth following the 2017 hurricanes and development of a broader range of post-disaster services.
Capital Commitments - The Company’s capital commitments as of June 30, 2019 were $28.9 million, including the Company's interest in two foreign-flag rail ferries, two inland river towboats, other equipment and vessel and terminal improvements.
Liquidity and Debt - During the current year quarter, the Company repurchased $13.3 million in principal amount of its 3.0% Convertible Senior Notes for $13.1 million resulting in debt extinguishment losses of $0.5 million.
As of June 30, 2019, the Company’s balances of cash, cash equivalents, restricted cash, restricted cash equivalents, marketable securities and construction reserve funds totaled $183.3 million. Total outstanding debt was $312.7 million, including $77.9 million of SEA-Vista debt that is non-recourse to the Company. SEA-Vista is a consolidated joint venture with $100.0 million of borrowing capacity under its credit facility as of June 30, 2019.
During the preceding quarter ended March 31, 2019, the Company entered into a new $125.0 million revolving credit facility. As of June 30, 2019, the Company had no borrowings outstanding under this facility.
Adoption of New Accounting Standards. On January 1, 2019, the Company adopted Financial Accounting Standards Board (“FASB”) Topic 842, Leases (“Topic 842”). Upon adoption, the Company recorded operating lease right-of-use assets and lease liabilities of $174.6 million for certain of its equipment, office, real property and land leases. In addition, the Company recognized a cumulative-effect adjustment of $25.4 million, net of tax, to the opening balance of retained earnings primarily for previously deferred gains related to sale-leaseback transactions.
SEACOR Holdings Inc. (“SEACOR”) is a diversified holding company with interests in domestic and international transportation and logistics and risk management consultancy. SEACOR is publicly traded on the New York Stock Exchange (NYSE) under the symbol CKH.
Certain statements discussed in this release as well as in other reports, materials and oral statements that the Company releases from time to time to the public constitute “forward-looking statements” within the meaning of the Private Securities Litigation Reform Act of 1995. Generally, words such as “anticipate,” “estimate,” “expect,” “project,” “intend,” “believe,” “plan,” “target,” “forecast” and similar expressions are intended to identify forward-looking statements. Such forward-looking statements concern management’s expectations, strategic objectives, business prospects, anticipated economic performance and financial condition and other similar matters. Forward-looking statements are inherently uncertain and subject to a variety of assumptions, risks and uncertainties that could cause actual results to differ materially from those anticipated or expected by management of the Company. These statements are not guarantees of future performance and actual events or results may differ significantly from these statements. Actual events or results are subject to significant known and unknown risks, uncertainties and other important factors, including risks relating to weakening demand for the Company’s services as a result of unplanned customer suspensions, cancellations, rate reductions or non-renewals of vessel charters or failures to finalize commitments to charter vessels, increased government legislation and regulation of the Company’s businesses that could increase the cost of operations, increased competition if the Jones Act is repealed, liability, legal fees and costs in connection with the provision of emergency response services, decreased demand for the Company’s services as a result of declines in the global economy, declines in valuations in the global financial markets and a lack of liquidity in the credit sectors, including, interest rate fluctuations, availability of credit, inflation rates, change in laws, trade barriers, commodity prices and currency exchange fluctuations, activity in foreign countries and changes in foreign political, military and economic conditions, changes in foreign and domestic oil and gas exploration and production activity, safety record requirements related to Ocean Transportation & Logistics Services, decreased demand for Ocean Transportation & Logistics Services due to construction of additional refined petroleum product, natural gas or crude oil pipelines or due to decreased demand for refined petroleum products, crude oil or chemical products or a change in existing methods of delivery, compliance with U.S. and foreign government laws and regulations, including environmental laws and regulations and economic sanctions, the dependence of Ocean Transportation & Logistics Services and Inland Transportation & Logistics Services on several key customers, consolidation of the Company’s customer base, the ongoing need to replace aging vessels, industry fleet capacity, restrictions imposed by the Shipping Acts on the amount of foreign ownership of the Company’s Common Stock, operational risks of Ocean Transportation & Logistics Services and Inland Transportation & Logistics Services, effects of adverse weather conditions and seasonality, the level of grain export volume, the effect of fuel prices on barge towing costs, variability in freight rates for inland river barges, the effect of international economic and political factors on Inland Transportation & Logistics Services’ operations, the ability to realize anticipated benefits from acquisitions and other strategic transactions, adequacy of insurance coverage, the attraction and retention of qualified personnel by the Company, changes in U.S. and international trade policies and various other matters and factors, many of which are beyond the Company’s control as well as those discussed in Item 1A. (Risk Factors) of the Company’s Annual report on Form 10-K and other reports filed by the Company with the Securities and Exchange Commission (“SEC”). It should be understood that it is not possible to predict or identify all such factors. Consequently, the preceding should not be considered to be a complete discussion of all potential risks or uncertainties. Given these risk factors, investors and analysts should not place undue reliance on forward-looking statements. Forward-looking statements speak only as of the date of the document in which they are made. The Company disclaims any obligation or undertaking to provide any updates or revisions to any forward-looking statement to reflect any change in the Company’s expectations or any change in events, conditions or circumstances on which the forward-looking statement is based, except as required by law. It is advisable, however, to consult any further disclosures the Company makes on related subjects in its filings with the SEC, including Annual Reports on Form 10-K, Quarterly Reports on Form 10-Q and Current Reports on Form 8-K (if any). These statements constitute the Company’s cautionary statements under the Private Securities Litigation Reform Act of 1995.
For additional information, contact Investor Relations at (954) 627-5278 or visit SEACOR’s website at www.seacorholdings.com.
SEACOR HOLDINGS INC. CONDENSED CONSOLIDATED STATEMENTS OF INCOME (in thousands, except share data, unaudited)
Three Months Ended
Six Months Ended
June 30,
June 30,
2019
2018
2019
2018
Operating Revenues
$
197,023
$
216,831
$
406,547
$
401,655
Costs and Expenses:
Operating
142,871
162,168
289,982
293,945
Administrative and general
26,714
24,311
53,460
50,106
Depreciation and amortization
17,009
18,844
34,145
38,453
186,594
205,323
377,587
382,504
Gains on Asset Dispositions, Net
677
506
1,114
7,551
Operating Income
11,106
12,014
30,074
26,702
Other Income (Expense):
Interest income
1,885
2,179
3,785
4,035
Interest expense
(4,903)
(8,604)
(10,016)
(17,167)
Debt extinguishment losses, net
(503)
(5,407)
(1,296)
(5,449)
Marketable security gains (losses), net
13,284
782
16,352
(3,016)
Foreign currency gains (losses), net
(191)
(1,346)
214
344
Other, net
25
54,311
(619)
54,594
9,597
41,915
8,420
33,341
Income Before Income Tax Expense and Equity in Earnings (Losses) of 50% or Less Owned Companies
20,703
53,929
38,494
60,043
Income Tax Expense
3,390
9,853
5,595
9,572
Income Before Equity in Earnings (Losses) of 50% or Less Owned Companies
17,313
44,076
32,899
50,471
Equity in Earnings (Losses) of 50% or Less Owned Companies, Net of Tax
(312)
1,931
(2,830)
1,094
Net Income
17,001
46,007
30,069
51,565
Net Income Attributable to Noncontrolling Interests in Subsidiaries
2,448
881
7,783
5,798
Net Income Attributable to SEACOR Holdings Inc.
$
14,553
$
45,126
$
22,286
$
45,767
Basic Earnings Per Common Share of SEACOR Holdings Inc.
$
0.80
$
2.50
$
1.22
$
2.54
Diluted Earnings Per Common Share of SEACOR Holdings Inc.
$
0.76
$
2.14
$
1.17
$
2.32
Weighted Average Common Shares Outstanding:
Basic
18,288,879
18,076,944
18,260,876
18,023,752
Diluted
19,633,523
22,587,543
19,599,990
22,462,300
OIBDA(1)
$
28,115
$
30,858
$
64,219
$
65,155
OIBDA Attributable to SEACOR Holdings Inc.(1)
$
21,905
$
25,978
$
48,901
$
53,143
______________________
Non-GAAP Financial Measure. See explanation of use of non-GAAP financial measures included elsewhere in this release.
SEACOR HOLDINGS INC. CONDENSED CONSOLIDATED STATEMENTS OF INCOME (LOSS) (in thousands, except per share data, unaudited)
Three Months Ended
Jun. 30, 2019
Mar. 31, 2019
Dec. 31, 2018
Sep. 30, 2018
Jun. 30, 2018
Operating Revenues
$
197,023
$
209,524
$
213,838
$
220,257
$
216,831
Costs and Expenses:
Operating
142,871
147,111
150,374
147,529
162,168
Administrative and general
26,714
26,746
26,718
26,083
24,311
Depreciation and amortization
17,009
17,136
17,510
18,616
18,844
186,594
190,993
194,602
192,228
205,323
Gains on Asset Dispositions, Net
677
437
6,014
6,018
506
Operating Income
11,106
18,968
25,250
34,047
12,014
Other Income (Expense):
Interest income
1,885
1,900
2,245
2,450
2,179
Interest expense
(4,903)
(5,113)
(6,181)
(8,335)
(8,604)
Debt extinguishment losses, net
(503)
(793)
(6,017)
(160)
(5,407)
Marketable security gains (losses), net
13,284
3,068
(11,128)
1,713
782
Foreign currency gains (losses), net
(191)
405
(2,280)
(328)
(1,346)
Other, net
25
(644)
13
357
54,311
9,597
(1,177)
(23,348)
(4,303)
41,915
Income Before Income Tax Expense (Benefit) and Equity in Earnings (Losses) of 50% or Less Owned Companies
20,703
17,791
1,902
29,744
53,929
Income Tax Expense (Benefit)
3,390
2,205
(4,519)
3,362
9,853
Income Before Equity in Earnings (Losses) of 50% or Less Owned Companies
17,313
15,586
6,421
26,382
44,076
Equity in Earnings (Losses) of 50% or Less Owned Companies, Net of Tax
(312)
(2,518)
(1,987)
821
1,931
Net Income
17,001
13,068
4,434
27,203
46,007
Net Income attributable to Noncontrolling Interests in Subsidiaries
2,448
5,335
9,120
10,136
881
Net Income (Loss) attributable to SEACOR Holdings Inc.
$
14,553
$
7,733
$
(4,686)
$
17,067
$
45,126
Basic Earnings (Loss) Per Common Share of SEACOR Holdings Inc.
$
0.80
$
0.42
$
(0.26)
$
0.94
$
2.50
Diluted Earnings (Loss) Per Common Share of SEACOR Holdings Inc.
$
0.76
$
0.41
$
(0.26)
$
0.88
$
2.14
Weighted Average Common Shares Outstanding:
Basic
18,289
18,233
18,165
18,108
18,077
Diluted
19,634
19,571
18,165
21,193
22,588
Common Shares Outstanding at Period End
18,550
18,528
18,330
18,243
18,224
OIBDA(1)
$
28,115
$
36,104
$
42,760
$
52,663
$
30,858
OIBDA attributable to SEACOR Holdings Inc.(1)
$
21,905
$
26,996
$
29,822
$
38,630
$
25,978
______________________
Non-GAAP Financial Measure. See explanation of use of non-GAAP financial measures included elsewhere in this release.
SEACOR HOLDINGS INC. SEGMENT INFORMATION (in thousands, unaudited)
Three Months Ended
Jun. 30, 2019
Mar. 31, 2019
Dec. 31, 2018
Sep. 30, 2018
Jun. 30, 2018
Ocean Transportation & Logistics Services
Operating Revenues
$
109,681
$
109,272
$
97,366
$
109,939
$
105,155
Costs and Expenses:
Operating
71,230
69,932
64,234
64,683
75,044
Administrative and general
9,423
10,198
10,132
9,170
10,328
Depreciation and amortization
10,230
10,337
10,707
11,298
11,620
90,883
90,467
85,073
85,151
96,992
Gains on Asset Dispositions
349
17
5,496
5,505
3
Operating Income
19,147
18,822
17,789
30,293
8,166
Other Income (Expense):
Foreign currency gains (losses), net
1
(47
)
(17
)
(24
)
(76
)
Other, net
28
(651
)
(15
)
(96
)
398
Equity in Earnings (Losses) of 50% or Less Owned Companies, Net of Tax
700
111
(23
)
2,073
1,267
Segment Profit(1)
$
19,876
$
18,235
$
17,734
$
32,246
$
9,755
OIBDA(2)
$
29,377
$
29,159
$
28,496
$
41,591
$
19,786
OIBDA(2) attributable to stockholders
$
23,167
$
20,051
$
15,558
$
27,558
$
14,906
Dry-docking expenditures for U.S.-flag petroleum and chemical carriers, dry bulk carriers and PCTC’s (included in operating costs and expenses)
$
1,925
$
1,581
$
6,430
$
399
$
5,291
Out-of-service days for dry-dockings of U.S.-flag petroleum and chemical carriers, dry bulk carriers and PCTC’s
30
15
147
—
47
Dry-docking expenditures for all other equipment
$
1,447
$
1,250
$
269
$
1,489
$
2,139
Inland Transportation & Logistics Services
Operating Revenues
$
61,455
$
65,602
$
77,513
$
78,845
$
73,409
Costs and Expenses:
Operating
54,486
54,245
60,801
65,667
62,361
Administrative and general
3,133
3,356
3,381
3,230
3,216
Depreciation and amortization
5,699
5,725
5,490
6,197
6,243
63,318
63,326
69,672
75,094
71,820
Gains on Asset Dispositions
330
420
481
513
503
Operating Income (Loss)
(1,533
)
2,696
8,322
4,264
2,092
Other Income (Expense):
Foreign currency gains (losses), net
(191
)
459
(2,240
)
(282
)
(1,183
)
Other, net
—
—
37
—
14
Equity in Earnings (Losses) of 50% or Less Owned Companies, Net of Tax
(618
)
(2,472
)
(2,571
)
(1,245
)
584
Segment Profit (Loss)(1)
$
(2,342
)
$
683
$
3,548
$
2,737
$
1,507
OIBDA(2)
$
4,166
$
8,421
$
13,812
$
10,461
$
8,335
SEACOR HOLDINGS INC. SEGMENT INFORMATION (continued) (in thousands, unaudited)
Three Months Ended
Jun. 30, 2019
Mar. 31, 2019
Dec. 31, 2018
Sep. 30, 2018
Jun. 30, 2018
Witt O’Brien’s
Operating Revenues
$
23,753
$
32,943
$
37,702
$
30,267
$
37,308
Costs and Expenses:
Operating
15,691
21,772
24,258
16,240
24,399
Administrative and general
6,831
6,402
6,876
7,389
5,140
Depreciation and amortization
209
206
660
492
491
22,731
28,380
31,794
24,121
30,030
Operating Income
1,022
4,563
5,908
6,146
7,278
Other Income (Expense):
Foreign currency losses, net
—
—
(1
)
(12
)
(17
)
Other, net
(2
)
(3
)
—
—
—
Equity in Earnings (Losses) of 50% or Less Owned Companies, Net of Tax
(128
)
(67
)
113
(13
)
(32
)
Segment Profit
$
892
$
4,493
$
6,020
$
6,121
$
7,229
OIBDA(2)
$
1,231
$
4,769
$
6,568
$
6,638
$
7,769
Other
Operating Revenues
$
2,142
$
1,805
$
1,290
$
1,214
$
969
Costs and Expenses:
Operating
1,472
1,253
1,106
957
392
Administrative and general
837
839
551
606
498
Depreciation and amortization
493
489
237
202
62
2,802
2,581
1,894
1,765
952
Gains (Losses) on Asset Dispositions
(2
)
—
37
—
—
Operating Income (Loss)
(662
)
(776
)
(567
)
(551
)
17
Other Income (Expense):
Foreign currency gains (losses), net
—
—
(4
)
—
1
Other, net
—
—
(105
)
452
53,902
Equity in Earnings (Losses) of 50% or Less Owned Companies, Net of Tax
(266
)
(90
)
494
6
112
Segment Profit (Loss)(1)
$
(928
)
$
(866
)
$
(182
)
$
(93
)
$
54,032
Corporate and Eliminations
Operating Revenues
$
(8
)
$
(98
)
$
(33
)
$
(8
)
$
(10
)
Costs and Expenses:
Operating
(8
)
(91
)
(25
)
(18
)
(28
)
Administrative and general
6,490
5,951
5,778
5,688
5,129
Depreciation and amortization
378
379
416
427
428
6,860
6,239
6,169
6,097
5,529
Operating Loss
$
(6,868
)
$
(6,337
)
$
(6,202
)
$
(6,105
)
$
(5,539
)
Other Income (Expense):
Foreign currency losses, net
$
(1
)
$
(7
)
$
(18
)
$
(10
)
$
(71
)
Other, net
(1
)
10
96
1
(3
)
______________________
Includes amounts attributable to both SEACOR and noncontrolling interests.
Non-GAAP Financial Measure. See explanation of use of non-GAAP financial measures included elsewhere in this release.
SEACOR HOLDINGS INC. CONDENSED CONSOLIDATED BALANCE SHEETS (in thousands, unaudited)
Jun. 30, 2019
Mar. 31, 2019
Dec. 31, 2018
Sep. 30, 2018
Jun. 30, 2018
ASSETS
Current Assets:
Cash and cash equivalents
$
138,757
$
141,152
$
144,221
$
324,564
$
317,389
Restricted cash and restricted cash equivalents
1,221
2,992
2,991
2,990
2,989
Marketable securities
39,368
33,384
30,316
41,445
39,745
Receivables:
Trade, net of allowance for doubtful accounts
164,964
174,278
171,828
151,217
142,474
Other
38,297
32,635
38,881
45,197
41,960
Inventories
5,293
4,914
4,530
5,139
4,690
Prepaid expenses and other
5,640
5,809
5,382
6,087
5,940
Total current assets
393,540
395,164
398,149
576,639
555,187
Property and Equipment:
Historical cost
1,416,084
1,413,488
1,407,329
1,403,886
1,393,514
Accumulated depreciation
(593,168)
(577,136)
(560,819)
(545,179)
(527,814)
Net property and equipment
822,916
836,352
846,510
858,707
865,700
Operating Lease Right-of-Use Assets
161,518
167,325
—
—
—
Investments, at Equity, and Advances to 50% or Less Owned Companies
155,645
155,290
156,886
149,184
150,158
Construction Reserve Funds
3,908
3,908
3,908
5,908
16,142
Goodwill
32,714
32,720
32,708
32,767
32,774
Intangible Assets, Net
22,773
23,662
24,551
25,724
26,898
Other Assets
10,376
7,385
8,312
8,938
9,065
$
1,603,390
$
1,621,806
$
1,471,024
$
1,657,867
$
1,655,924
LIABILITIES AND EQUITY
Current Liabilities:
Current portion of long-term debt
$
78,301
$
8,308
$
8,497
$
155,737
$
8,925
Current portion of long-term operating lease liabilities
36,171
35,540
—
—
—
Accounts payable and accrued expenses
35,132
50,097
59,607
56,533
61,732
Other current liabilities
64,796
67,456
55,659
66,179
68,102
Total current liabilities
214,400
161,401
123,763
278,449
138,759
Long-Term Debt
234,445
315,303
346,128
372,657
530,909
Long-Term Operating Lease Liabilities
125,182
131,862
—
—
—
Deferred Income Taxes
99,938
97,758
94,420
99,565
97,767
Deferred Gains and Other Liabilities
20,768
20,688
52,871
60,502
70,653
Total liabilities
694,733
727,012
617,182
811,173
838,088
Equity:
SEACOR Holdings Inc. stockholders’ equity:
Preferred stock
—
—
—
—
—
Common stock
392
392
390
389
389
Additional paid-in capital
1,600,838
1,598,804
1,596,642
1,593,430
1,592,375
Retained earnings
512,618
498,065
474,809
479,495
462,428
Shares held in treasury, at cost
(1,366,432)
(1,366,267)
(1,366,773)
(1,366,773)
(1,367,433)
Accumulated other comprehensive loss, net of tax
(995)
(903)
(914)
(444)
(385)
746,421
730,091
704,154
706,097
687,374
Noncontrolling interests in subsidiaries
162,236
164,703
149,688
140,597
130,462
Total equity
908,657
894,794
853,842
846,694
817,836
$
1,603,390
$
1,621,806
$
1,471,024
$
1,657,867
$
1,655,924
Use of non-GAAP Financial Measures
The information furnished in this release includes non-GAAP financial measures that differ from measures calculated in accordance with U.S. GAAP, including OIBDA and Cash Earnings.
The Company defines OIBDA as operating income (loss) plus depreciation and amortization. The Company includes maintenance and repair costs, including major overhauls and regulatory dry-dockings, and gains or losses (or impairments) on asset dispositions in OIBDA. The Company defines Cash Earnings as OIBDA further adjusted to exclude the amortization of non-cash deferred gains and amounts attributable to its minority partner in SEA-Vista as well as the gain or loss associated with marking-to-market securities held for investment, accrued net cash expense associated with interest on debt obligations, and the Company’s estimate of cash taxes. Other companies may calculate OIBDA and Cash Earnings differently than the Company, which may limit their usefulness as comparative measures. In addition, each of these measures does not necessarily represent funds available for discretionary use and are not measures of the Company’s ability to fund its cash needs. OIBDA and Cash Earnings are each financial metrics used by management (i) as a supplemental internal measure for planning and forecasting overall expectations and for evaluating actual results against such expectations; (ii) as a criteria for annual incentive bonuses paid to Company officers and other shore-based employees; and (iii) to compare to the OIBDA and Cash Earnings of other companies when evaluating potential acquisitions. In addition, the Company believes Cash Earnings is meaningful to investors because it assists in evaluating the Company’s results of operations and net cash generated by business activities across previous and subsequent accounting periods and to better understand the long-term performance of the Company. The Company views OIBDA and Cash Earnings as measures of operating performance not liquidity.
The presentation of these non-GAAP financial measures is not intended to be considered in isolation from or as a substitute for the financial information prepared and presented in accordance with U.S. GAAP.
The following tables reconcile these non-GAAP measures to their most closely comparable U.S. GAAP measures (amounts in thousands, except per share data).
Three Months Ended June 30,
Six Months Ended June 30,
2019
2018
2019
2018
U.S. GAAP Measures
Net Income Attributable to Stockholders
$
14,553
$
45,126
$
22,286
$
45,767
Diluted Earnings Per Common Share(1)
$
0.76
$
2.14
$
1.17
$
2.32
Reconciliation of non-GAAP Financial Measures
Operating Income (U.S. GAAP)
$
11,106
$
12,014
$
30,074
$
26,702
(+) Depreciation and amortization
17,009
18,844
34,145
38,453
OIBDA(2)
28,115
30,858
64,219
65,155
(–) Amortization of deferred gains(3)
(330
)
(4,663
)
(661
)
(7,738
)
(–) OIBDA less amortization of deferred gains attributable to noncontrolling interests
(6,210
)
(3,959
)
(15,318
)
(12,012
)
(–) Cash interest expense, net(4)
(864
)
(3,708
)
(1,776
)
(7,729
)
(–) Income tax obligation
(1,112
)
(16,965
)
(3,192
)
(17,795
)
(+/–) Marketable security gains (losses), net
13,284
782
16,352
(3,016
)
Cash Earnings
$
32,883
$
2,345
$
59,624
$
16,865
______________________
Includes diluted earnings per common share of $0.53 and $0.03 for the quarter ended June 30, 2019 and 2018, respectively, related to marking-to-market the Company’s marketable security portfolio. Includes diluted earnings per common share of $0.66 and diluted loss per common share of $0.11 for the six months ended June 30, 2019 and 2018, respectively, related to marking-to-market the Company’s marketable security portfolio.
All references to OIBDA in this release are calculated in the same manner.
For the three and six months ended June 30, 2019, amortization of deferred gains is included in gains on asset dispositions. For the three and six months ended June 30, 2018, amortization of deferred gains may be included in operating expenses as a reduction to rental expense and/or included in gains on asset dispositions.
Amount is net of interest income, excludes capitalized interest, and is net of our partner’s portion of SEA-Vista interest expense of $0.5 million and $0.7 million for the three months ended June 30, 2019 and 2018, respectively, and $1.1 million and $1.4 million for the six months ended June 30, 2019 and 2018, respectively.