Tidewater Reports Fourth Quarter Results and Year End Earnings For Fiscal 2011

May 19, 2011 08:05 AM Eastern Daylight Time

NEW ORLEANS--(BUSINESS WIRE)--Tidewater Inc. (NYSE:TDW) announced today fourth quarter net earnings for the period ended March 31, 2011, of $12.0 million, or $0.23 per share, on revenues of $254.0 million. For fiscal year ended March 31, 2011, net earnings were $105.6 million, or $2.05 per share, on revenues of $1,055.4 million. For fiscal year ended March 31, 2010, net earnings were $259.5 million, or $5.02 per share, on revenues of $1,168.6 million.

Included in net earnings for the March 31, 2011 quarter are:

a $6.3 million ($6.3 million after-tax, or $0.12 per common share) charge to general and administrative expenses related to a previously disclosed settlement with the Federal Government of Nigeria.
a $3.9 million ($3.0 million after-tax, or $0.06 per common share) impairment charge included in “Gain on asset disposition, net” related to a write-down to estimated fair market value of eleven vessels and related parts inventory that are expected to be sold to a scrap dealer.
an effective income tax rate for the quarter of 52.6%, in part reflecting the impact of the two previously discussed charges which have virtually no related tax benefits. The quarterly effective tax rate also reflects an increase in the Company’s estimated annual effective tax rate exclusive of discrete items (including the two discussed above) from approximately 23% to the final fiscal 2011 effective tax rate excluding discrete items of approximately 26%. The impact of this increased tax rate on fourth quarter diluted earnings per share totaled $0.10, with $0.02 per common share pertaining to fourth quarter earnings and $0.08 per common share related to the cumulative effect on income tax expense related to the three prior quarters’ earnings.

Included in net earnings for the March 31, 2010 quarter are:

a $5.4 million ($3.5 million after-tax, or $0.07 per common share) reduction of the previously recorded “Provision for Venezuelan operations, net” as a result of net collections from insurance underwriters for the insured value of the vessels seized earlier in fiscal 2010 by Petroleos de Venezuela, S.A. (PDVSA) and an affiliate of PDVSA.
an $11.0 million ($11.0 million after-tax, or $0.21 per common share) foreign exchange gain recognized as a result of the devaluation of the Venezuelan Bolivar fuerte during the quarter.
an $11.4 million ($11.4 million after-tax, or $0.22 per common share) charge to general and administrative expenses related to an agreement in principle the company reached with the staff of the Securities and Exchange Commission to resolve issues associated with the previously disclosed internal investigation.

As previously announced, Tidewater will hold a conference call to discuss March quarterly and annual earnings on Thursday, May 19, 2011, at 10:00 a.m. Central time. Investors and interested parties may listen to the teleconference via telephone by calling 1-888-388-7493 if calling from the U.S. or Canada (1-706-679-8348 if calling from outside the U.S.) and ask for the "Tidewater" call just prior to the scheduled start. A replay of the conference call will be available beginning at 12:00 p.m. Central time on May 19, 2011, and will continue until 11:59 p.m. Central time on May 21, 2011. To hear the replay, call 1-800-642-1687 or (1-706-645-9291 if calling from outside the U.S.). The conference call ID number is 52339398.

A simultaneous webcast of the conference call will be accessible online at the Tidewater Inc. website, www.tdw.com. The online replay will be available until June 19, 2011. Upon completion of the conference call, the company will also file a Form 8-K with the SEC, which will include a transcript of the conference call.

Tidewater Inc. owns 378 vessels, the world's largest fleet of vessels serving the global offshore energy industry.

Note: all per-share amounts are stated on a diluted basis.

Financial information is displayed on the next page.


TIDEWATER INC.
CONSOLIDATED STATEMENTS OF EARNINGS
(In thousands, except share and per share data)
	Quarter Ended					Year Ended
	March 31,					March 31,
	2011			2010		2011		2010
Revenues:
Vessel revenues	$	252,714		258,656		1,051,213		1,138,162
Other marine revenues		1,274		1,340		4,175		30,472
		253,988		259,996		1,055,388		1,168,634

Costs and expenses:
Vessel operating costs		153,518		145,894		638,590		605,259
Costs of other marine revenues		1,257		1,240		4,660		27,387
Depreciation and amortization		34,723		33,541		140,576		130,184
General and administrative		41,522		44,182		145,454		149,932
Provision for Venezuelan operations, net		---		(5,350	)	---		43,720
Gain on asset dispositions, net		(1,607	)	(5,115	)	(13,228	)	(28,178	)
		229,413		214,392		916,052		928,304
Operating income		24,575		45,604		139,336		240,330
Other income (expenses):
Foreign exchange gain (loss)		131		8,771		2,278		4,094
Equity in net earnings of unconsolidated companies		3,419		3,403		12,185		18,107
Interest income and other, net		1,584		2,234		5,065		6,882
Interest and other debt costs		(4,364	)	(569	)	(10,769	)	(1,679	)
		770		13,839		8,759		27,404
Earnings before income taxes		25,345		59,443		148,095		267,734
Income tax expense		13,326		2,530		42,479		8,258
Net earnings	$	12,019		56,913		105,616		259,476

Basic earnings per common share	$	.23		1.11		2.06		5.04

Diluted earnings per common share	$	.23		1.10		2.05		5.02

Weighted average common shares outstanding		51,198,831		51,456,393		51,221,800		51,447,077
Incremental common shares from stock options		366,743		253,415		265,283		241,953
Adjusted weighted average common shares		51,565,574		51,709,808		51,487,083		51,689,030

Cash dividends declared per common share	$	.25		.25		1.00		1.00


TIDEWATER INC.
CONSOLIDATED BALANCE SHEETS
March 31, 2011 and 2010
(In thousands, except share and par value data)
ASSETS	2011			2010
Current assets:
Cash and cash equivalents	$	245,720		223,070
Trade and other receivables, less allowance for doubtful accounts of $50,677 in 2011 and $38,632 in 2010		272,467		311,617
Marine operating supplies		50,748		44,237
Other current assets		10,212		6,703
Total current assets		579,147		585,627
Investments in, at equity, and advances to unconsolidated companies		39,044		40,614
Properties and equipment:
Vessels and related equipment		3,910,430		3,455,322
Other properties and equipment		85,589		82,007
		3,996,019		3,537,329
Less accumulated depreciation and amortization		1,294,239		1,283,505
Net properties and equipment		2,701,780		2,253,824
Goodwill		328,754		328,754
Other assets		99,391		84,538
Total assets	$	3,748,116		3,293,357

LIABILITIES AND STOCKHOLDERS’ EQUITY
Current liabilities:
Current maturities on long-term debt		---		25,000
Accounts payable		45,177		41,673
Accrued expenses		120,869		119,485
Accrued property and liability losses		3,846		4,809
Other current liabilities		13,697		13,745
Total current liabilities		183,589		204,712
Long-term debt		700,000		275,000
Deferred income taxes		216,735		211,504
Accrued property and liability losses		5,327		12,809
Other liabilities and deferred credits		128,521		125,302

Commitments and Contingencies

Stockholders’ equity:
Common stock of $0.10 par value, 125,000,000 shares authorized, issued 51,876,038 shares at March 31, 2011 and 51,830,048 shares at March 31, 2010		5,188		5,183
Additional paid-in capital		90,204		73,203
Retained earnings		2,436,736		2,402,575
Accumulated other comprehensive loss		(18,184	)	(16,931	)
Total stockholders’ equity		2,513,944		2,464,030
Total liabilities and stockholders’ equity	$	3,748,116		3,293,357


TIDEWATER INC.
CONSOLIDATED STATEMENTS OF CASH FLOWS
Years Ended March 31, 2011 and 2010
(In thousands)	2011			2010
Operating activities:
Net earnings	$	105,616		259,476
Adjustments to reconcile net earnings to net cash provided by operating activities:
Depreciation and amortization		140,576		130,184
Provision (benefit) for deferred income taxes		(6,849	)	569
Reversal of liabilities for uncertain tax positions		---		(36,110	)
Gain on asset dispositions, net		(13,228	)	(28,178	)
Provision for Venezuelan operations, net		---		43,720
Equity in earnings of unconsolidated companies, net of dividends		1,570		(3,336	)
Compensation expense – stock based		15,482		8,740
Excess tax benefit on stock options exercised		(1,190	)	(72	)
Changes in assets and liabilities, net:
Trade and other receivables		15,272		(20,458	)
Marine operating supplies		(4,511	)	4,490
Other current assets		(3,509	)	(338	)
Accounts payable		3,504		(12,657	)
Accrued expenses		(7,080	)	6,119
Accrued property and liability losses		(963	)	(712	)
Other current liabilities		12,675		(21,889	)
Other liabilities and deferred credits		6,219		(3,115	)
Other, net		622		1,828
Net cash provided by operating activities		264,206		328,261
Cash flows from investing activities:
Proceeds from sales of assets		37,196		51,735
Proceeds from sales/leaseback of assets		---		101,755
Proceeds from insurance settlements on Venezuela seized vessels		8,150		---
Additions to properties and equipment		(615,289	)	(451,973	)
Other		---		1
Net cash used in investing activities		(569,943	)	(298,482	)
Cash flows from financing activities:
Principal payments on debt		(190,000	)	---
Debt borrowings		590,000		---
Debt issuance costs		(10,032	)	(7,712	)
Proceeds from exercise of stock options		8,695		1,872
Cash dividends		(51,478	)	(51,734	)
Excess tax benefit on stock options exercised		1,190		72
Stock repurchases		(19,988	)	---
Net cash provided by (used in) financing activities		328,387		(57,502	)
Net change in cash and cash equivalents		22,650		(27,723	)
Cash and cash equivalents at beginning of year		223,070		250,793
Cash and cash equivalents at end of year	$	245,720		223,070
Supplemental disclosure of cash flow information:
Cash paid during the year for:
Interest	$	15,957		14,951
Income taxes	$	48,365		57,571


The company’s vessel revenues and vessel operating expenses and the related percentage of total vessel revenues for the quarters and the years ended March 31, 2011 and 2010 and for the quarter ended December 31, 2010, were as follows:

																		Quarter
	Quarter Ended									Year Ended								Ended
	March 31,									March 31,								December 31,
(In thousands)	2011			%		2010		%		2011		%		2010		%		2010		%
Vessel revenues:
International	$	234,608		93	%	236,081		91	%	962,522		92	%	1,048,553		92	%	249,190		92	%
United States		18,106		7	%	22,575		9	%	88,691		8	%	89,609		8	%	20,443		8	%
Vessel revenues		252,714		100	%	258,656		100	%	1,051,213		100	%	1,138,162		100	%	269,633		100	%
Vessel operating costs:
Crew costs	$	83,081		33	%	79,282		31	%	338,126		32	%	320,229		28	%	84,412		31	%
Repair and maintenance		25,505		10	%	22,941		9	%	110,496		11	%	104,413		9	%	26,107		10	%
Insurance and loss reserves		4,607		2	%	3,154		1	%	19,601		2	%	12,948		1	%	6,071		2	%
Fuel, lube and supplies		14,027		6	%	15,372		6	%	61,784		6	%	56,637		5	%	16,399		6	%
Vessel operating leases		4,492		2	%	4,490		2	%	17,964		2	%	15,054		1	%	4,492		2	%
Other		21,806		9	%	20,655		8	%	90,619		9	%	95,978		8	%	23,116		9	%
Total vessel operating costs		153,518		61	%	145,894		56	%	638,590		61	%	605,259		53	%	160,597		60	%
Vessel operating margin (A)	$	99,196		39	%	112,762		44	%	412,623		39	%	532,903		47	%	109,036		40	%

Note (A): The following table reconciles vessel operating margin as presented above to operating income for the quarters and the years ended March 31, 2011 and 2010 and for the quarter ended December 31, 2010:

																		Quarter
	Quarter Ended									Year Ended								Ended
	March 31,									March 31,								December 31,
(In thousands)	2011					2010				2011				2010				2010
Vessel operating margin	$	99,196				112,762				412,623				532,903				109,036
Other marine revenues		1,274				1,340				4,175				30,472				2,142
Costs of other marine revenues		(1,257	)			(1,240	)			(4,660	)			(27,387	)			(2,705	)
Depreciation and amortization		(34,723	)			(33,541	)			(140,576	)			(130,184	)			(35,058	)
General and administrative		(41,522	)			(44,182	)			(145,454	)			(149,932	)			(33,238	)
Provision for Venezuelan operations		---				5,350				---				(43,720	)			---
Gain on asset dispositions, net		1,607				5,115				13,228				28,178				2,425
Operating income	$	24,575				45,604				139,336				240,330				42,602

The company’s operating profit and other components of earnings before income taxes and its related percentage of total revenues for the quarters and the years ended March 31, 2011 and 2010 and for the quarter ended December 31, 2010, were as follows:

																		Quarter
	Quarter Ended									Year Ended								Ended
	March 31,									March 31,								December 31,
(In thousands)	2011			%		2010		%		2011		%		2010		%		2010		%
Marine operating profit:
Vessel activity:
International	$	38,984		15	%	56,979		22	%	162,051		15	%	252,354		22	%	48,937		18	%
United States		(364	)	(<1%)		3,826		1	%	11,581		1	%	9,196		1	%	1,210		<1%
		38,620		15	%	60,805		23	%	173,632		16	%	261,550		22	%	50,147		18	%
Corporate expenses		(15,546	)	(6	%)	(20,200	)	(8	%)	(46,361	)	(4	%)	(51,432	)	(4	%)	(9,188	)	(3	%)
Gain on asset dispositions, net		1,607		1	%	5,115		2	%	13,228		1	%	28,178		2	%	2,425		1	%
Other marine services		(106	)	(<1%)		(116	)	(<1%)		(1,163	)	(<1%)		2,034		<1%		(782	)	(<1%)
Operating income		24,575		10	%	45,604		18	%	139,336		13	%	240,330		21	%	42,602		16	%
Foreign exchange gain (loss)		131		<1%		8,771		3	%	2,278		<1%		4,094		<1%		973		<1%
Equity in net earnings of unconsolidated companies		3,419		1	%	3,403		1	%	12,185		1	%	18,107		2	%	3,291		1	%
Interest income and other, net		1,584		1	%	2,234		1	%	5,065		<1%		6,882		1	%	1,074		<1%
Interest and other debt costs		(4,364	)	(2	%)	(569	)	(<1%)		(10,769	)	(1	%)	(1,679	)	(<1%)		(3,646	)	(1	%)
Earnings before income taxes	$	24,345		10	%	59,443		23	%	148,095		14	%	267,734		23	%	44,294		16	%


The company’s revenues, vessel utilization percentages and average day rates by vessel class and in total for the quarters and the years ended March 31, 2011 and 2010 and the quarter ended December 31, 2010, were as follows:

							Quarter
	Quarter Ended				Year Ended		Ended
	March 31,				March 31,		December 31,
	2011			2010	2011	2010	2010
REVENUES BY VESSEL CLASS (In thousands):
International-based fleet:
Deepwater vessels	$	86,524		82,285	360,852	306,763	96,540
Towing-supply/supply		118,806		125,087	485,112	616,240	122,412
Crew/utility		20,979		19,528	80,435	87,303	20,534
Offshore tugs		8,299		9,181	36,123	37,680	9,704
Other		---		---	---	567	---
Total	$	234,608		236,081	962,522	1,048,553	249,190
United States-based fleet:
Deepwater vessels	$	9,385		15,160	55,478	55,725	12,373
Towing-supply/supply		8,721		6,990	32,020	30,778	7,738
Crew/utility		---		425	1,193	3,106	332
Total	$	18,106		22,575	88,691	89,609	20,443
Worldwide fleet:
Deepwater vessels	$	95,909		97,445	416,330	362,488	108,913
Towing-supply/supply		127,527		132,077	517,132	647,018	130,150
Crew/utility		20,979		19,953	81,628	90,409	20,866
Offshore tugs		8,299		9,181	36,123	37,680	9,704
Other		---		---	---	567	---
Total	$	252,714		258,656	1,051,213	1,138,162	269,633
UTILIZATION:
International-based fleet:
Deepwater vessels		75.2	%	78.5	78.8	78.6	79.6
Towing-supply/supply		54.5		56.7	54.7	66.6	55.1
Crew/utility		85.8		72.3	78.5	72.4	80.6
Offshore tugs		53.7		56.8	56.8	56.8	58.7
Other		---		---	---	79.2	---
Total		63.2	%	62.7	62.8	68.5	63.7
United States-based fleet:
Deepwater vessels		82.9	%	92.0	87.8	86.1	86.0
Towing-supply/supply		54.2		41.8	47.9	37.3	45.9
Crew/utility		---		14.2	23.2	23.8	25.9
Total		57.9	%	46.0	54.2	43.1	52.0
Worldwide fleet:
Deepwater vessels		75.8	%	80.2	79.8	79.6	80.2
Towing-supply/supply		54.5		55.1	54.0	63.3	54.2
Crew/utility		84.3		66.4	75.9	67.7	77.9
Offshore tugs		53.7		56.8	56.8	56.8	58.7
Other		---		---	---	79.2	---
Total		62.8	%	61.0	62.1	65.9	62.7
AVERAGE VESSEL DAY RATES:
International-based fleet:
Deepwater vessels	$	21,294		23,924	22,315	24,470	22,663
Towing-supply/supply		12,090		12,259	11,980	12,340	11,761
Crew/utility		4,850		4,856	4,810	4,926	4,829
Offshore tugs		6,601		6,769	6,520	7,062	6,665
Other		---		---	---	9,679	---
Total	$	12,048		12,411	12,195	12,251	12,230
United States-based fleet:
Deepwater vessels	$	25,163		25,799	25,480	26,511	25,425
Towing-supply/supply		9,936		7,413	8,540	8,860	8,374
Crew/utility		---		4,757	4,759	4,936	4,749
Total	$	14,477		13,936	14,357	14,441	13,806
Worldwide fleet:
Deepwater vessels	$	21,619		24,198	22,691	24,763	22,946
Towing-supply/supply		11,913		11,849	11,689	12,114	11,485
Crew/utility		4,850		4,853	4,810	4,926	4,828
Offshore tugs		6,601		6,769	6,520	7,062	6,665
Other		---		---	---	9,679	---
Total	$	12,194		12,531	12,352	12,399	12,337


The average day rates and utilization percentages for the company’s new vessels (defined as vessels acquired or constructed since calendar year 2000 as part of its new build and acquisition program) and its older, more traditional vessels for the quarters and the years ended March 31, 2011 and 2010 and for the quarter ended December 31, 2010, were as follows:

							Quarter
	Quarter Ended				Year Ended		Ended
	March 31,				March 31,		December 31,
	2011			2010	2011	2010	2010
AVERAGE VESSEL DAY RATES:
International-based fleet:
New vessels	$	13,608		15,441	14,090	15,946	14,100
Traditional vessels		7,561		7,402	7,568	8,120	7,285
Total International-based fleet	$	12,048		12,411	12,195	12,251	12,230
United States-based fleet:
New vessels	$	23,603		20,689	21,432	20,122	20,490
Traditional vessels		10,788		9,666	10,138	10,633	10,196
Total U.S.-based fleet	$	14,477		13,936	14,357	14,441	13,806
Worldwide fleet:
New vessels	$	13,851		15,705	14,381	16,165	14,317
Traditional vessels		8,047		7,678	7,939	8,332	7,712
Total Worldwide Fleet	$	12,194		12,531	12,352	12,399	12,337
UTILIZATION:
International-based fleet:
New vessels		85.8	%	85.1	86.4	86.2	87.5
Traditional vessels		36.0		43.7	37.7	55.7	37.0
Total International-based fleet		63.2	%	62.7	62.8	68.5	63.7
United States-based fleet:
New vessels		80.2	%	57.6	72.9	56.7	69.8
Traditional vessels		52.1		40.8	47.1	37.1	45.7
Total U.S.-based fleet		57.9	%	46.0	54.2	43.1	52.0
Worldwide fleet:
New vessels		85.6	%	83.1	85.8	83.9	86.8
Traditional vessels		37.7		43.3	38.8	53.5	38.1
Total Worldwide Fleet		62.8	%	61.0	62.1	65.9	62.7


The company’s actual vessel count at March 31, 2011 and the average number of vessels by class and geographic distribution for the quarters and the years ended March 31, 2011 and 2010 and for the quarter ended December 31, 2010, were as follows:

	Actual Vessel								Quarter
	Count at	Quarter Ended				Year Ended			Ended
	March 31,	March 31,				March 31,			December 31,
	2011	2011		2010		2011	2010		2010
International-based fleet:
Deepwater vessels	60		60		49	56		44		59
Towing-supply/supply	199		200		199	203		206		205
Crew/utility	56		56		62	58		67		57
Offshore tugs	26		26		27	27		26		27
Total	341		342		337	344		343		348
United States-based fleet:
Deepwater vessels	5		5		7	7		6		6
Towing-supply/supply	18		18		25	21		26		22
Crew/utility	---		1		7	3		7		3
Total	23		24		39	31		39		31
Owned or chartered vessels included in marine revenues (B)	364		366		376	375		382		379
Vessels withdrawn from service	4		5		7	5		8		5
Joint-venture and other	10		10		10	10		10		10
Total	378		381		393	390		400		394

Note (B): Included in total owned or chartered vessels at March 31, 2011 and 2010 and at December 31, 2010, were 90, 83, and 92 vessels, respectively, that were stacked by the company. These vessels were considered to be in service and are included in the calculation of the company’s utilization statistics.

The company’s vessel commitments by vessel class and type as of March 31, 2011, were as follows:

	International Built					U.S. Built
	Number			Expended		Number			Expended
	of	Total		Through		of	Total		Through
Vessel class and type	Vessels	Cost		03/31/11		Vessels	Cost		03/31/11
	(In thousands)					(In thousands)
Deepwater vessels:
Anchor handling towing supply	---		---		---	---		---		---
Platform supply vessels	17	$	482,203	$	190,676	3	$	135,972	$	46,678
Towing-supply/supply vessels:
Anchor handling towing supply	15	$	229,036	$	117,963	---		---		---
Platform supply vessels	---		---		---	---		---		---
Crewboats	1	$	9,992	$	7,708	---		---		---
Totals	33	$	721,231	$	316,347	3	$	135,972	$	46,678


The table below summarizes by vessel class and vessel type the number of vessels expected to be delivered by quarter along with the expected cash outlay (in thousands) of the various vessel commitments as discussed above:

	Quarter Period Ended

Vessel class and type	06/11		09/11	12/11	03/12	06/12	Thereafter

Deepwater vessels:
Anchor handling towing supply		---	---	---	---	---	---
Platform supply vessels		2	2	4	1	3	8
Towing-supply/supply vessels:
Anchor handling towing supply		2	4	7	2	---	---
Platform supply vessels		---	---	---	---	---	---
Crewboats		---	---	---	1	---	---
Totals		4	6	11	4	3	8
(In thousands)
Expected quarterly cash outlay	$	95,900	76,737	140,848	55,000	46,501	79,192	(C)

(C) The $79,192 of ‘Thereafter’ vessel construction obligations is expected to be paid out as follows: $63,354 in the remaining quarters of fiscal 2013 and $15,838 during fiscal 2014.

Contacts

Tidewater Inc., New Orleans
Joe Bennett, 504-566-4506
Executive Vice President and Chief Investor Relations Officer

Contacts

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