-----BEGIN PRIVACY-ENHANCED MESSAGE----- Proc-Type: 2001,MIC-CLEAR Originator-Name: webmaster@www.sec.gov Originator-Key-Asymmetric: MFgwCgYEVQgBAQICAf8DSgAwRwJAW2sNKK9AVtBzYZmr6aGjlWyK3XmZv3dTINen TWSM7vrzLADbmYQaionwg5sDW3P6oaM5D3tdezXMm7z1T+B+twIDAQAB MIC-Info: RSA-MD5,RSA, L/AU7TNnwXPEYtpQ0zXhjcuG1FE43e1mE+cwqSz9KbDo0ObJB7nztkrUrk8hJjpt hTt7GBeAtuOihDRb4n1CQA== 0000278041-00-000002.txt : 20000515 0000278041-00-000002.hdr.sgml : 20000515 ACCESSION NUMBER: 0000278041-00-000002 CONFORMED SUBMISSION TYPE: 10-Q PUBLIC DOCUMENT COUNT: 2 CONFORMED PERIOD OF REPORT: 20000331 FILED AS OF DATE: 20000512 FILER: COMPANY DATA: COMPANY CONFORMED NAME: INTERNATIONAL SHIPHOLDING CORP CENTRAL INDEX KEY: 0000278041 STANDARD INDUSTRIAL CLASSIFICATION: DEEP SEA FOREIGN TRANSPORTATION OF FREIGHT [4412] IRS NUMBER: 362989662 STATE OF INCORPORATION: DE FISCAL YEAR END: 1231 FILING VALUES: FORM TYPE: 10-Q SEC ACT: SEC FILE NUMBER: 001-10852 FILM NUMBER: 628536 BUSINESS ADDRESS: STREET 1: 650 POYDRAS ST STE 1700 CITY: NEW ORLEANS STATE: LA ZIP: 70130 BUSINESS PHONE: 5045295461 10-Q 1 FIRST QUARTER 2000 FORM 10-Q 1 INTERNATIONAL SHIPHOLDING CORPORATION AND SUBSIDIARIES UNITED STATES SECURITIES AND EXCHANGE COMMISSION WASHINGTON, D.C. 20549 FORM 10-Q (Mark One) X QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 For the quarterly period ended March 31, 2000 ------------------ __ TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 For the transition period from to ----------- ----------- Commission file number 2-63322 --------------------------------------- INTERNATIONAL SHIPHOLDING CORPORATION - ------------------------------------------------------------------- (Exact name of registrant as specified in its charter) Delaware 36-2989662 - ------------------------------- --------------------------------------- (State or other jurisdiction of (I.R.S. Employer Identification Number) incorporation or organization) 650 Poydras Street New Orleans, Louisiana 70130 - ---------------------------------------------------------------------------- (Address of principal executive offices) (Zip Code) (504) 529-5461 - ---------------------------------------------------------------------------- (Registrant's telephone number, including area code) Indicate by check mark whether the registrant (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the registrant was required to file such reports), and (2) has been subject to such filing for the past 90 days. YES X NO -------- --------- Indicate the number of shares outstanding of each of the issuer's classes of common stock, as of the latest practicable date. Common Stock $1 Par Value 6,082,887 shares (March 31, 2000) ------------------------- 2 PART I - FINANCIAL INFORMATION ITEM 1-FINANCIAL STATEMENTS INTERNATIONAL SHIPHOLDING CORPORATION CONSOLIDATED CONDENSED STATEMENTS OF INCOME (All Amounts in Thousands Except Share Data) (Unaudited)
Three Months Ended March 31, 2000 1999 ------------ ------------ Revenues $ 85,349 $ 84,789 Subsidy Revenue 3,675 3,640 ------------ ------------ 89,024 88,429 ------------ ------------ Operating Expenses: Voyage Expenses 69,907 66,209 Vessel and Barge Depreciation 9,942 9,642 ------------ ------------ Gross Voyage Profit 9,175 12,578 ------------ ------------ Administrative and General Expenses 5,706 6,014 Gain on Sale of Land - 2,408 ------------ ------------ Operating Income 3,469 8,972 ------------ ------------ Interest: Interest Expense 8,524 7,569 Investment Income (259) (375) ------------ ------------ 8,265 7,194 ------------ ------------ (Loss) Income Before (Benefit) Provision for Income Taxes and Equity in Net Loss of Unconsolidated Entities (4,796) 1,778 ------------ ------------ (Benefit) Provision for Income Taxes: Current 649 450 Deferred (2,275) 181 State 84 124 ------------ ------------ (1,542) 755 ------------ ------------ Equity in Net Loss of Unconsolidated Entities (Net of Applicable Taxes) (45) - ------------ ------------ Net (Loss) Income $ (3,299) $ 1,023 ============ ============ Basic and Diluted Earnings Per Share: Net (Loss) Income $ (0.54) $ 0.16 ============ ============ The accompanying notes are an integral part of these statements.
3 INTERNATIONAL SHIPHOLDING CORPORATION CONSOLIDATED CONDENSED BALANCE SHEETS (All Amounts in Thousands) (Unaudited)
March 31, December 31, ASSETS 2000 1999 ------------ ------------ Current Assets: Cash and Cash Equivalents $ 23,963 $ 18,661 Marketable Securities 10,474 11,337 Accounts Receivable, Net of Allowance for Doubtful Accounts of $413 and $294 in 2000 and 1999, Respectively: Traffic 39,843 47,855 Agents' 5,236 6,660 Claims and Other 11,857 7,174 Federal Income Taxes Receivable 7 583 Deferred Income Taxes 60 60 Net Investment in Direct Financing Leases 3,377 3,137 Other Current Assets 4,305 4,134 Material and Supplies Inventory, at Lower of Cost or Market 12,932 12,726 ------------ ------------ Total Current Assets 112,054 112,327 ------------ ------------ Marketable Equity Securities 195 234 ------------ ------------ Investment in Unconsolidated Entities 2,736 2,805 ------------ ------------ Net Investment in Direct Financing Leases 110,744 112,032 ------------ ------------ Vessels, Property, and Other Equipment, at Cost: Vessels and Barges 775,526 775,001 Other Marine Equipment 7,981 7,897 Terminal Facilities 18,479 18,470 Land 1,230 1,230 Furniture and Equipment 17,247 17,222 ------------ ------------ 820,463 819,820 Less - Accumulated Depreciation (390,231) (379,588) ------------ ------------ 430,232 440,232 ------------ ------------ Other Assets: Deferred Charges, Net of Accumulated Amortization of $40,582 and $49,880 in 2000 and 1999, Respectively 37,398 39,692 Acquired Contract Costs, Net of Accumulated Amortization of $15,973 and $15,609 in 2000 and 1999, Respectively 14,552 14,916 Due from Related Parties 561 580 Other 9,657 12,185 ------------- ------------ 62,168 63,373 ------------- ------------ $ 718,129 $ 735,003 ============= ============ The accompanying notes are an integral part of these statements.
4 INTERNATIONAL SHIPHOLDING CORPORATION CONSOLIDATED CONDENSED BALANCE SHEETS (All Amounts in Thousands Except Share Data) (Unaudited)
March 31, December 31, 2000 1999 LIABILITIES AND STOCKHOLDERS' ------------ ------------ INVESTMENT Current Liabilities: Current Maturities of Long-Term Debt $ 24,329 $ 23,137 Current Maturities of Capital Lease Obligations 3,572 3,231 Accounts Payable and Accrued Liabilities 54,903 50,388 ------------ ------------ Total Current Liabilities 82,804 76,756 ------------ ------------ Billings in Excess of Income Earned and Expenses Incurred 3,461 5,083 ------------ ------------ Long-Term Capital Lease Obligations, Less Current Maturities 5,530 8,853 ------------ ------------ Long-Term Debt, Less Current Maturities 376,509 391,589 ------------ ------------ Other Long-Term Liabilities: Deferred Income Taxes 42,655 45,124 Claims and Other 28,502 25,114 ------------ ------------ 71,157 70,238 ------------ ------------ Commitments and Contingent Liabilities Stockholders' Investment: Common Stock 6,756 6,756 Additional Paid-In Capital 54,450 54,450 Retained Earnings 126,760 130,440 Less - Treasury Stock (8,704) (8,654) Accumulated Other Comprehensive Loss (594) (508) ------------ ------------ 178,668 182,484 ------------ ------------ $ 718,129 $ 735,003 ============ ============ The accompanying notes are an integral part of these statements.
5 INTERNATIONAL SHIPHOLDING CORPORATION CONSOLIDATED STATEMENTS OF CHANGES IN STOCKHOLDERS' INVESTMENT (All Amounts in Thousands) (Unaudited)
Accumulated Additional Other Common Paid-In Retained Treasury Comprehensive Stock Capital Earnings Stock Income (Loss) Total ------- -------- --------- -------- ------------ -------- Balance at December 31, 1998 $6,756 $54,450 $117,399 ($1,422) ($75) $177,108 Comprehensive Income: Net Income for Year Ended December 31, 1999 - - 14,623 - - 14,623 Other Comprehensive Income: Unrealized Holding Loss on Marketable Securities,Net of Deferred Taxes of ($233) - - - - (433) (433) --------- Total Comprehensive Income 14,190 Treasury Stock - - - (7,232) - (7,232) Cash Dividends - - (1,582) - - (1,582) ------- -------- --------- -------- ------------ --------- Balance at December 31, 1999 $6,756 $54,450 $130,440 ($8,654) ($508) $182,484 ======= ======== ========= ======== ============ ========= Comprehensive Income: Net Loss for the Period Ended March 31, 2000 - - (3,299) - - (3,299) Other Comprehensive Income: Unrealized Holding Loss on Marketable Securities, Net of Deferred Taxes of ($46) - - - - (86) (86) --------- Total Comprehensive Income (3,385) Treasury Stock - - - (50) (50) Cash Dividends - - (381) - - (381) ------- -------- --------- -------- ------------ --------- Balance at March 31, 2000 $6,756 $54,450 $126,760 ($8,704) ($594) $178,668 ======= ======== ========= ======== ============ ========= The accompanying notes are an integral part of these statements.
6 INTERNATIONAL SHIPHOLDING CORPORATION CONSOLIDATED STATEMENTS OF CASH FLOWS (All Amounts in Thousands) (Unaudited)
For Three Months Ended March 31, 2000 1999 ------------ ------------ Cash Flows from Operating Activities: Net (Loss) Income $ (3,299) $ 1,023 Adjustments to Reconcile Net (Loss) Income to Net Cash Provided by Operating Activities: Depreciation 10,704 10,491 Amortization of Deferred Charges and Other Assets 4,905 4,438 (Benefit) Provision for Deferred Income Taxes (2,275) 181 Equity in Net Loss of Unconsolidated Entities (45) - Loss (Gain) on Sale of Vessels and Other Property 5 (2,405) Changes in: Accounts Receivable 5,145 578 Inventories and Other Current Assets (377) 544 Other Assets 2,518 (112) Accounts Payable and Accrued Liabilities 4,512 (2,727) Federal Income Taxes Payable 542 137 Unearned Income (1,622) (2,193) Other Long-Term Liabilities 1,505 733 ------------ ------------ Net Cash Provided by Operating Activities 22,218 10,688 ------------ ------------ Cash Flows from Investing Activities: Net Investment in Direct Financing Lease 1,088 1,920 Purchase of Vessels and Other Property (897) (1,183) Additions to Deferred Charges (710) (2,863) Proceeds from Sale of Vessels and Other Property 104 3 Purchase of and Proceeds from Short- Term Investments 781 (1,078) Other Investing Activities 19 19 ------------ ----------- Net Cash Provided (Used) by Investing Activities 385 (3,182) ------------ ----------- Cash Flows from Financing Activities: Proceeds from Issuance of Debt 5,000 3,000 Reduction of Debt and Capital Lease Obligations (21,870) (18,326) Additions to Deferred Financing Charges - (2) Purchase of Treasury Stock (50) (2,619) Common Stock Dividends Paid (381) (406) ------------ ----------- Net Cash Used by Financing Activities (17,301) (18,353) ------------ ----------- Net Increase (Decrease) in Cash and Cash Equivalents 5,302 (10,847) Cash and Cash Equivalents at Beginning of Period 18,661 32,008 ----------- ----------- Cash and Cash Equivalents at End of Period $ 23,963 $ 21,161 =========== =========== The accompanying notes are an integral part of these statements.
7 NOTES TO CONSOLIDATED CONDENSED FINANCIAL STATEMENTS MARCH 31, 2000 (Unaudited) Note 1. Basis of Preparation The accompanying unaudited interim financial statements have been prepared pursuant to the rules and regulations of the Securities and Exchange Commission. Certain information and footnote disclosures required by generally accepted accounting principles for complete financial statements have been omitted. It is suggested that these interim statements be read in conjunction with the financial statements and notes thereto included in the Form 10-K of International Shipholding Corporation for the year ended December 31, 1999. Certain reclassifications have been made to prior period financial information in order to conform to current year presentations. Interim statements are subject to possible adjustments in connection with the annual audit of the Company's accounts for the full year 2000. In the opinion of management, all adjustments (consisting of only normal recurring adjustments) necessary for a fair presentation of the information shown have been included. The foregoing 2000 interim results are not necessarily indicative of the results of operations for the full year 2000. The Company's policy is to consolidate all subsidiaries in which it holds greater than 50% voting interest. All significant intercompany accounts and transactions have been eliminated. The Company uses the cost method to account for investments in entities in which it holds less than 20% voting interest and in which the Company cannot exercise significant influence over operating and financial activities. The Company uses the equity method to account for investments in entities in which it holds a 20% to 50% voting interest. Note 2. Operating Segments The Company's three operating segments, LINER SERVICES, TIME CHARTER CONTRACTS, and CONTRACTS OF AFFREIGHTMENT, are identified primarily based on the characteristics of the contracts and terms under which its fleet of vessels and barges are operated. The Company also reports an OTHER category that includes results of several of the Company's subsidiaries that provide ship charter brokerage, agency, barge fleeting and other specialized services primarily to 8 the Company's operating segments described below. Each of the reportable segments is managed separately as each requires different resources depending on the nature of the contract or terms under which each vessel within the segment operates. The following table presents information about segment profit and loss for the three months ended March 31, 2000 and 1999. The Company does not allocate interest income, administrative and general expenses, equity in unconsolidated entities, or income taxes to its segments. Intersegment revenues are based on market prices and include revenues earned by subsidiaries of the Company that provide specialized services to the operating segments.
Time Liner Charter Contracts of (All Amounts in Thousands) Services Contracts Affreightment Other Total -------- --------- ------------- ------ ------ 2000 Revenues from external customers $44,918 $34,313 $ 7,669 $2,124 $89,024 Intersegment revenues - - - 8,994 8,994 Gross voyage profit before depreciation 858 14,787 3,032 440 19,117 Depreciation 3,825 4,402 1,647 68 9,942 Interest expense 1,418 5,164 1,784 158 8,524 Segment (loss) profit before interest income, administrative and general expenses, equity in unconsolidated entities and taxes (4,385) 5,221 (399) 214 651 - ------------------------------------------------------------------------------ 1999 Revenues from external customers $45,450 $31,370 $ 7,804 $2,222 $86,846 Net revenue from contract settlement - accrual - - 1,583 - 1,583 Intersegment revenues - - - 9,131 9,131 Gross voyage profit before depreciation 5,146 11,692 4,483 899 22,220 Depreciation 3,552 4,255 1,648 187 9,642 Interest expense 1,469 3,680 2,139 281 7,569 Gain on sale of land - - - 2,408 2,408 Segment profit before interest income, administrative and general expenses and taxes 125 3,757 696 2,839 7,417 - ------------------------------------------------------------------------------
Following is a reconciliation of the totals reported for the operating segments to the applicable line items in the consolidated financial statements:
(All Amounts in Thousands) Three Months Ended March 31, 2000 1999 ------------ ----------- Total profit for reportable segments $ 651 $ 7,417 Unallocated amounts: Interest income 259 375 Administrative and general expenses 5,706 6,014 ----------- ----------- (Loss) income before income taxes and equity in unconsolidated entities $ (4,796) $ 1,778 =========== =========== 9 Note 3. Subsequent Events The Company has entered into an agreement, subject to Maritime Administration approval, to sell one of its smaller and older Pure Car Carriers ("PCC"), the GREEN BAY, and to replace it with a larger and newer Pure Car/Truck Carrier ("PCTC"). Upon purchase of the PCTC, the vessel will enter into a long-term contract with a major Japanese ship operator. 10 ITEM 2. MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS Certain statements made in this report or elsewhere by, or on behalf of, the Company that are not based on historical facts are intended to be forward-looking statements within the meaning of the safe harbor provisions of the Private Securities Litigation Reform Act of 1995. Forward-looking statements are based on assumptions about future events and are therefore subject to risks and uncertainties. The Company cautions readers that certain important factors have affected and may affect in the future the Company's actual consolidated results of operations and may cause future results to differ materially from those expressed in or implied by any forward-looking statements made in this report or elsewhere by, or on behalf of, the Company. A description of certain of these important factors is contained in the Company's Form 10-K filed with the Securities and Exchange Commission for the year ended December 31, 1999. The Company's vessels are operated under a variety of charters, liner services, and contracts. The nature of these arrangements is such that, without a material variation in gross voyage profits (total revenues less voyage expenses and vessel and barge depreciation), the revenues and expenses attributable to a vessel deployed under one type of charter or contract can differ substantially from those attributable to the same vessel if deployed under a different type of charter or contract. Accordingly, depending on the mix of charters or contracts in place during a particular accounting period, the Company's revenues and expenses can fluctuate substantially from one period to another even though the number of vessels deployed, the number of voyages completed, the amount of cargo carried and the gross voyage profit derived from the vessels remain relatively constant. As a result, fluctuations in voyage revenues and expenses are not necessarily indicative of trends in profitability, and management believes that gross voyage profit is a more appropriate measure of performance than revenues. Accordingly, the discussion below addresses variations in gross voyage profits rather than variations in revenues. 11 FIRST QUARTER ENDED MARCH 31, 2000 COMPARED TO FIRST QUARTER ENDED MARCH 31, 1999 Gross Voyage Profit - ------------------- Gross voyage profit decreased from $12.6 Million in the first quarter of 1999 to $9.2 Million in the first quarter of 2000. The first quarter of 1999 included a pro-rata accrual for the anticipated receipt of lost profits in connection with the 1999 termination of a coal transportation contract as discussed in the Company's December 31, 1999 Form 10-K. After excluding this accrual from the first quarter 1999 results, gross voyage profit decreased in the first quarter of 2000 as compared to the same period in 1999 by 16.6%. The decrease occurred primarily in the Company's LINER SERVICES segment, where gross voyage profit before depreciation decreased 83.3% from $5.1 Million in the first quarter of 1999 to $0.9 Million for the first quarter of 2000. The decrease resulted in part because of the necessity to substitute one of the segment's LASH vessels, the SAM HOUSTON, for the LASH vessel, RHINE FOREST, while the latter was in a shipyard for over 75 days to undergo planned maintenance during the quarter. Additionally, the cost of bunker fuel has risen significantly in the past six months. In the first quarter of 2000, the Company paid $3.7 Million more for fuel for its LINER SERVICES segment than in the first quarter of 1999. This increased bunker fuel cost was incurred even though less voyage days were incurred in the first quarter of 2000 because of the out-of-service time for the RHINE FOREST. The decrease in gross voyage profit for the LINER SERVICES segment was partially offset by improved results for the TIME CHARTER CONTRACTS. The gross voyage profit before depreciation for the TIME CHARTER CONTRACTS segment increased 26.5% from $11.7 Million in the first quarter of 1999 to $14.8 Million for the same period in 2000 due to the acquisition and commencement of operations of the Company's U.S. Flag PCTC, the GREEN DALE, in September of 1999. In addition, the Company's PCTC, the ASIAN EMPEROR, that delivered to the Company and commenced operations in May of 1999, showed improved results over the older and smaller vessel it replaced. The CONTRACTS OF AFFREIGHTMENT segment's gross profit before depreciation and after the aforementioned elimination of the 1999 first quarter contract termination accrual, increased 4.6% from $2.9 Million in the first quarter of 1999 to $3.0 Million for the same period in 2000 due to a slight increase in revenue tons carried. Vessel and barge depreciation for the first quarter of 2000 increased 3.1% to $9.9 Million as compared to $9.6 Million in the same period of 1999 primarily due to the commencement of operations of the GREEN DALE as discussed above. 12 Other Income and Expenses - ------------------------- Administrative and general expenses decreased from $6.0 Million in the first quarter of 1999 to $5.7 Million in the same period in 2000 due to a continuing cost reduction program. Earnings in 1999 included a gain of $2.4 Million recognized on the sale of a parcel of land no longer required in the Company's operations. Interest expense was $8.5 Million for the first quarter of 2000 as compared to $7.6 Million for the same period in 1999. The increase resulted primarily from the financing associated with the acquisition of the ASIAN EMPEROR early in the second quarter of 1999 and the acquisition of the GREEN DALE at the end of the third quarter of 1999. Investment income decreased from $375,000 for the first quarter of 1999 to $259,000 for the first quarter of 2000 due to a lower average balance of invested funds. Income Taxes - ------------ In the first quarter of 2000, the Company had an income tax benefit of $1.6 Million compared to income tax expense of $631,000 in the same period in 1999, at the statutory rate of 35% for both periods. 13 LIQUIDITY AND CAPITAL RESOURCES The Company's working capital decreased from $35.6 Million at December 31, 1999, to $29.3 Million at March 31, 2000, after provision for current maturities of long-term debt and capital lease obligations of $27.9 Million. Cash and cash equivalents increased during the first three months of 2000 by $5.3 Million to a total of $24.0 Million. This increase, which resulted from cash provided by operating activities of $22.2 Million, was partially offset by cash used for financing activities of $17.3 Million. The major source of cash from operations was net loss adjusted for non-cash provisions such as depreciation and amortization. Investing activities during the period included returns from investments in direct financing leases of approximately $1.0 Million and investments in short-term marketable securities of $0.8 Million, which were approximately offset by costs incurred to upgrade and drydock two of the Company's vessels. The net cash used for financing activities of $17.3 Million included reductions of debt and capital lease obligations of $21.9 Million stemming from regularly scheduled principal payments and repayments of amounts drawn under lines of credit. New draws under lines of credit totaled $5.0 Million during the quarter, which were repaid early in the second quarter. At March 31, 2000, $14.0 Million was outstanding on the Company's $48.0 Million revolving credit facility, of which $5.0 Million was repaid early in the second quarter. Management believes that normal operations will provide sufficient working capital and cash flows to meet debt service and dividend requirements during the foreseeable future. The Company is expected to finance approximately $22 Million on the purchase of the new PCTC as discussed earlier. The possible sale of the Company's PCC and purchase of this PCTC is subject to Maritime Administration approval. The Company has not been notified that it is a potentially responsible party in connection with any environmental matters. At a regular meeting held April 12, 2000, the Board of Directors declared a quarterly dividend of 6.25 cents per Common Share payable on June 16, 2000, to shareholders of record on June 2, 2000. 14 STOCK REPURCHASE PROGRAM In October of 1998, the Company's Board of Directors approved a stock repurchase program to buy up to 500,000 shares of its common stock. In October of 1999, the Company had completed the program. In October of 1999, the Company's Board of Directors approved another stock repurchase program to buy up to 1,000,000 shares of its common stock, based on the Board's belief that the current market value of the Company's common stock does not adequately reflect the Company's inherent value. The repurchases are expected to be made in the open market or in privately negotiated transactions at the discretion of the Company's management, depending upon financial and market conditions. As of March 31, 2000, 600,000 shares had been repurchased under these two programs for a total cost of $7,571,000 at an average market price of $12.68 per share, of which 4,300 shares had been repurchased during 2000. NEW ACCOUNTING PRONOUNCEMENTS During 1998, the Financial Accounting Standards Board ("FASB") issued Statement of Financial Accounting Standard ("SFAS") No. 133, "Accounting for Derivative Instruments and Hedging Activities." SFAS No. 133 establishes accounting and reporting standards for derivative instruments, including certain derivative instruments embedded in other contracts, and for hedging activities. It requires that an entity recognize all derivatives as either assets or liabilities in the statement of financial position and measure those instruments at fair value. SFAS No. 133 is effective for all fiscal quarters of fiscal years beginning after June 15, 1999. In June of 1999, the FASB issued SFAS No. 137, "Accounting for Derivative Instruments and Hedging Activities - Deferral of the Effective Date of FASB Statement No. 133." SFAS No. 137 is an amendment of SFAS No. 133 and defers the effective date of SFAS No. 133 to fiscal years beginning after June 15, 2000. The Company has not chosen early adoption and, as it is not possible to predict the Company's derivative position at the time this standard will be applied, it is unknown what effect, if any, SFAS No. 133 will have on its financial statements once adopted. While the Company has not yet quantified the impact on its financial statements, the Company does not believe adoption will have a material impact on net income, although adoption is likely to increase volatility of comprehensive income and accumulated other comprehensive income. 15 MARKET-SENSITIVE INSTRUMENTS AND RISK MANAGEMENT In the ordinary course of its business, the Company is exposed to foreign currency, interest rate, and commodity price risk. The Company utilizes derivative financial instruments including forward exchange contracts, interest rate swap agreements and commodity swap agreements to manage certain of these exposures. The Company hedges only firm commitments or anticipated transactions and does not use derivatives for speculation. The Company neither holds nor issues financial instruments for trading purposes. There were no material changes in market risk exposure for the foreign currency risk described in the Company's Form 10-K filed with the Securities and Exchange Commission for the year ended December 31, 1999. The fair value of long-term debt at March 31, 2000, including current maturities, was estimated to be $397.7 Million compared to a carrying value of $400.8 Million. The potential increase in fair value resulting from a hypothetical 10% increase in the average interest rates applicable to the Company's long-term debt at March 31, 2000, would be approximately $18.1 Million or 4.5% of the carrying value. The fair value of the interest rate swap agreements at March 31, 2000, as discussed in the Form 10-K, estimated based on the amount that the banks would receive or pay to terminate the swap agreements at the reporting date taking into account current market conditions and interest rates, was an asset of $4.2 Million. A hypothetical 10% decrease in interest rates as of March 31, 2000, would have resulted in a $1.6 Million decrease in the fair value of the asset. The fair value of the commodity swap agreements at March 31, 2000, as discussed in the Form 10-K, estimated based on the difference between first quarter price per ton of fuel and the contract delivery price per ton of fuel times the quantity applicable to the agreements, was an asset of $766,000. A hypothetical 10% decrease in the first quarter fuel price per ton of fuel as of March 31, 2000, would have resulted in a liability of $32,000. 16 PART II - OTHER INFORMATION ITEM 4. SUBMISSION OF MATTERS TO A VOTE OF SECURITY HOLDERS The Annual Meeting of Shareholders was held April 12, 2000. The matters voted upon and the results of the voting were as follows: (1) Election of Board of Directors: Nominee Shares Voted For Withheld Authority - ------------------ -------------------- -------------------- Niels W. Johnsen 5,459,326 178,065 Erik F. Johnsen 5,459,326 178,065 Niels M. Johnsen 5,459,816 177,575 Erik L. Johnsen 5,459,816 177,575 Harold S. Grehan, Jr. 5,459,816 177,575 Raymond V. O'Brien, Jr. 5,459,559 177,832 Edwin Lupberger 5,459,816 177,575 Edward K. Trowbridge 5,459,816 177,575 (2) Ratification of Arthur Andersen LLP, certified public accountants, as independent auditors for the Corporation for the fiscal year ending December 31, 2000: Shares Voted For 5,616,657 Shares Voted Against 297 Abstentions 20,437 ITEM 6. EXHIBITS AND REPORTS ON FORM 8-K (a) EXHIBIT INDEX Exhibit Number Description -------------- ------------ Part I Exhibits: 27 Financial Data Schedule Part II Exhibits: 3 Restated Certificate of Incorporation as amended, and By-Laws of the Registrant (filed with the Securities and Exchange Commission as Exhibit 3 to the Registrant's Form 10-Q for the quarterly period June 30, 1996, and incorporated herein by reference) (b) No reports on Form 8-K were filed for the three month period ended March 31, 2000. 17 SIGNATURES Pursuant to the requirements of the Securities and Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned thereunto duly authorized. INTERNATIONAL SHIPHOLDING CORPORATION /S/ Gary L. Ferguson ____________________________________________ Gary L. Ferguson Vice President and Chief Financial Officer Date May 12, 2000 --------------------------
EX-27 2 FINANCIAL DATA SCHEDULE
5 THIS SCHEDULE CONTAINS SUMMARY FINANCIAL INFORMATION EXTRACTED FROM FINANCIAL STATEMENTS FOR THE PERIOD ENDED MARCH 31, 2000 AND IS QUALIFIED IN ITS ENTIRETY BY REFERENCE TO SUCH FINANCIAL STATEMENTS. 3-MOS DEC-31-2000 MAR-31-2000 23,963 10,474 56,936 413 12,932 112,054 820,463 390,231 718,129 82,804 382,039 0 0 6,756 171,912 718,129 0 89,024 0 85,555 8,524 0 8,524 (4,796) (1,542) (3,299) 0 0 0 (3,299) (0.54) (0.54) AMOUNTS INAPPLICABLE OR NOT DISCLOSED AS A SEPARATE LINE ON THE BALANCE SHEET OR STATEMENT OF INCOME ARE REPORTED AS 0 HEREIN. NOTES AND ACCOUNTS RECEIVABLE-TRADE ARE REPORTED NET OF ALLOWANCES FOR DOUBTFUL ACCOUNTS IN THE BALANCE SHEET.
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