Good morning and welcome to the Fiscal 2014 Fourth Quarter Earnings Conference Call. My name is Brandon, and I will be your operator for today's call. At this time, all participants are in a listen-only mode. Later, we will conduct a question and answer session. Please note that this conference is being recorded. I will now turn it over to Mr. Joe Bennett. Mr. Bennett, you may begin.

Thank you, Brandon. Good morning, everyone, and welcome to Tidewater's fourth quarter and full year fiscal 2014 earnings results conference call for the period ended March 31, 2014. I'm Joe Bennett, Tidewater's Executive Vice President and Chief Investor Relations Officer, and I want to thank you for your interest in Tidewater. With me this morning on the call are our President and CEO, Jeff Platt; Jeff Gorski, our Executive Vice President and Chief Operating Officer; Quinn Fanning, our Executive Vice President and CFO and Bruce Lundstrom, our Executive Vice President, General Counsel and Secretary. We will follow our usual conference call format. Following these formalities, I'll turn the call over to Jeff for his initial comments, to be followed by Quinn's financial review. Jeff will then provide some wrap up comments and we will then open the call for your questions. During today's conference call, Jeff, Quinn, I and other Tidewater management may make certain comments that are forward-looking statements and not statements of historical fact. I know that you understand that there are risks, uncertainties and other factors that may cause the company's actual future performance to be materially different from that stated or implied by any comment that we may make during today's conference call. Additional information concerning the factors that could cause actual results to differ materially from those stated or implied by the forward-looking statements may be found in the Risk Factors section of Tidewater's most recent Form 10-K. Having said all of that, I'll turn the call over now to Jeff.

Thank you, Joe, and good morning to everyone. Last night, we reported fully diluted earnings per share for our fourth quarter of fiscal 2014 of $0.88. Adjusted earnings per diluted share for the full fiscal year was $3.80, representing a 23% improvement from the previous fiscal year. Quinn will provide you the items we are considering in comparing adjusted earnings per share between the two fiscal years. While Quinn will provide you with considerably more detail on our quarterly performance in a moment, I wanted to cover our vessel revenue performance a bit more than I normally do. Our quarterly results reflect solid operational performance during the quarter in which the investor community has expressed its concern over an impending possible pause in growth or a lower trajectory of growth for the deepwater drilling sector. Our vessel revenues of approximately $362 million in the fourth quarter were above our guidance provided on our last earnings call and reflect a strong 85% average utilization rate of our deepwater vessels along with an approximate $800 or 3% increase in our deepwater vessels' average day rates. These operational improvements occurred despite the seasonality of our North Sea fleet during the winter months. That fleet is expected to rebound nicely as we move to the spring and into the normally stronger summer season. As we have previously discussed, the continued rollover of legacy deepwater vessels contracts, along with the delivery of additional deepwater equipment has and should continue to push our average day rates at least modestly higher. With respect to our active towing supply vessel class, our global average utilization has averaged approximately 85% over the last two fiscal years, including this current quarter. While we noted in past earnings calls that the quarter-to-quarter changes in average day rate have been relatively modest.…

Thank you, Jeff. Good morning, everyone. As Jeff mentioned, we issued our earnings press release after market closed last evening. We expect to file our annual report on Form-10K through the EDGAR filing service sometime before the close of business today. Turning to financial results, we reported diluted earnings per common share of $0.88 for the March quarter versus adjusted EPS of $1.12 in the December quarter, which excludes the goodwill impairment charge related to our Asia-Pacific segment of $0.87 per share after-tax. EPS for the March quarter of fiscal 2013 was $0.95. As Jeff mentioned, diluted earnings per common share for the 12-month ended March 31, 2014, was $3.80, exclusive of the previously referenced goodwill impairment charge as well as transaction costs related to the acquisition of Troms Offshore and a loss on the early retirement of higher cost debt that was inherited in the Troms Offshore acquisitions. Adjusted EPS for fiscal 2013, which excludes a $0.07 per share lump sum pension settlement paid to our former CEO $3.10. As Jeff noted, the year-over-year increase in adjusted EPS was about 23%. As Jeff also mentioned, vessel revenue for the March quarter at $362 million was a bit higher than the guidance range for the March quarter of $350 million to $360 million. For reference, vessel revenue for the March quarter was up about 12% year-over-year. Operating cost of approximately $207 million came in modestly below the vessel OpEx guidance range of $210 million to $215 million that I provided in February. Vessel OpEx for the March quarter was up about 14% year-over-year, primarily reflecting the heavy drydocking schedule in the quarter we just completed. Looking at fiscal 2014 taken as a whole, vessel revenue and vessel operating expense were up 15% and 16%, respectively year-over-year. Vessel level cash operating…

Thanks, Quinn. Our fiscal results for the fourth quarter and for all of fiscal 2014 reflect improved operational performance within an extended offshore industry up-cycle. Nonetheless, a number of recent data points suggest that certain segments of the offshore services industry may experience a pause in their pace of long-term growth. While these data points are disconcerting to many analysts and investors, they reflect a typical pattern of development of the industry during the cycle, something we have experienced in the past and will likely experience again in the future. It is important to remember, the offshore industry is made up of multiple subsectors and not all of them move at the same time with the same pace. At various points in the expanding phase of the industry up-cycle, some subsectors may over expand temporarily resulting in a pause or even a slight dip in day rates earned by the equipment in one subsectors or another. Pauses reflect temporary imbalances between supply and demand. Operators occasionally slow their activity levels to reassess future drilling plans and as a result of political, technical or other issues, which obviously impacts demand for oilfield equipment and services. Equipment and service providers have also been known to become overly enthusiastic with their investments in manufacturing capacity and new capital equipment and the resulting excess supply then need to be worked off. From a broad perspective, we believe there are several key points to keep in mind as you consider the possible impact of the offshore drilling industry's current status. First, global energy demand continues to grow as the pace of worldwide economic activity slowly accelerates. This growth in demand supports crude oil prices, which is a primary driver for offshore exploration and development activity. The recent rebound in domestic natural gas prices is further…

Thank you. We will now begin the question and answer session. (Operator Instructions) From Clarkson Capital Markets, we have Jeff Spittel on line. Please go ahead.

Thanks. Good morning, guys.

Good morning.

Maybe if we could start of in the Americas, I think Quinn had referenced that some lump sum mobilization in prior few quarters favorably impacting day rates, yet we a nice move again this quarter on a sequential basis. Can you talk through the moving parts in Brazil, the Gulf of Mexico and then maybe from a vessel mix perspective there that drove that improvement?

In Brazil, I think, we've got everything that has moved into place pretty much that we had talked about from a year ago, on a pretty bigger award that we were very happy with Brazil. All of those parts and pieces have got into Brazil and are on contract now, so I think that's pretty much wrapped up. We do have and there has been some recent public notice that we have won another large anchor handler that we will be moving into Brazil. That will be happening probably in the September quarter, when you will see the effects of that, so our Brazil activity is at a good level. That's kind of getting to a stable state, if you will. Gulf of Mexico, we have in the past moved some equipment over. I think that there might be a little bit more of that coming up moving into some term contracts, but overall I think what you're seeing is again the increased day rates in Brazil on the contract and we also took delivery in the December quarter of two large U.S. flag vessels and you see the effect of that in the Gulf of Mexico. Those two large boats are on term contracts.

Good news. Then maybe transitioning to the North Sea, I would imagine there is a at least a lot of things we hear seem pretty favorable about the way construction season is shaping up. Maybe a refresher on what your contracting exposure is there and what your outlook is over the next couple of quarters.

We are about half and half with respect to terming and playing what is the spot market there and we kind of like that balance. Again, for Tidewater, this is the new with the Troms' acquisition and I think you're right. Everyone is pretty optimistic that it would be a good season coming up and of course that's really going to be helped by really two things that are going on. One, some of these Arctic cold water projects which is going to take a pretty large number of vessels out of the traditional market. Then again the award by Petrobras of some large anchor handlers that I think will take down a couple of anchor handlers that are currently in the North Sea as well, so you put all that together and it looks like it's shaping up at least from the beginning of what should be a nice season for us up there.

Appreciate it, Jeff. Nicely done this quarter.

Thank you.

From Howard Weil we have Jon Donnel online. Please go ahead.

Good morning, guys.

Hi, Jon.

Appreciate the update on the Angola JV. It looks like just kind of comparing the sequential movement of the day rates utilization probably got some pretty nice new contracts there as well. I was wondering if you did the new collections that you got since March 31st, and really good year-to-date have been driven more by these new contractors or is it a function of somebody the older collections that have been outstanding as well…

No…

…change on either contract terms to collect better?

No. I would say none of that collection is with new contract. That is old legacy contract that we finally are getting the process where you registered a contracts that allow you to move the dollars or turn quanza into $100 and get that out of country, so it really has nothing to do with any of the new contracts.

Okay. The new contracts are basically still being paid on the same terms as the older ones?

Well, some of the new contracts are actually new startups, so there is no legacy or trailing payment issues with those per se. Now, there are some subcontract rollovers, where we are having increases in the day rates that partially account or take up the increased cost and risk exposure with the local currencies, but I don't think we have really had seen much of that really to-date.

The preponderance of our revenue in collections in Angola will ultimately be in quanza. I mean, we on a contract-by-contract basis trying to migrate toward at least some element of dollars offshore payments, but I think as you will see with our filing, we are so waiting for clarification from Angolan Central Bank as to what contracting and payment mechanisms will be committed, so really the collections that you are seeing today result from legacy contracts and that's ultimately, I won't quite say cracked the code, but we've made some progress in terms of the documentary requirements of the Central Bank and so on and so forth as other service companies and equipment providers are doing and we are starting to see a bit of a trickling out as a result of the progress on that front.

Okay. Then in terms of just as you talked about mitigating some of that risk, I think you had mentioned the potential for moving some vessels out of that market if necessary. Do you have sort of a target for maybe a total number of vessels or total revenue exposure that you might want to limit in Angola right now or is that not on the radar screen until present time?

I think go back to our previous comments on the last call, which is the payment mechanisms, the day sales outstanding as a result of the slow payment processes introduced a new element in the Angolan market, and when we have any vessel come up on contract, we evaluate the suite of opportunities for it. Obviously, all things being equal, when you elevated the risk in one market versus another, you will start to see some ties going to other areas. I would guess just as we look in the rearview mirror, the March quarter had a handful of vessels exit Angola on a net basis which is up a bit relative to the previous three quarters, but we have no plans to dramatically roughly [out] of Angola, but my suspicion is that we would shrink that lead over time just because of the effortless return profile, but it's not a broad reaching strategy that has as a target exiting the Angolan market, which we expect to participate in for a long time.

Okay. Great. Thanks a lot. Appreciate taking my questions.

Thanks Jon.

From Morgan Stanley, we have Matthias Detjen on the line. Please go ahead.

Good morning, gentlemen. Congratulations on the good quarter. I wanted to ask you a bit more about the ROVs and you gave some updates in saying that you would be breakeven by the second fiscal quarter. I was wondering if you could maybe give us a bit more color how that's benefiting and how you plan to grow that business and if there has been any changes since the last update.

No real changes in the last update and we were continuing to scale up with our operational capabilities. There is certainly licenses and things like that you have to work through to be able to support these operations outside of the United States. That technology has - used to it. We are getting all of that lined up and again we have the six ROVs that we have talked about additionally, we placed an order for two more units to augment that. Again, it's just getting out of the gate and no real change in previous quarter.

Okay. Great. Thank you for that. Then on your expansion strategy, it looks like you - so you ordered three more vessels this time for the North Sea, is that where you currently see the best opportunities for growth or would you also consider other regions right now?

I think, if you go back, it's for the North Sea, really cold markets. We are trying to scale up. We have got the right management. We think the industry as a whole continues to have success in the cold water environments with that will fit nicely into that portfolio, so it's not the North Sea-specific, certainly North Sea is part of that, but you have other Arctic markets that we think will present nice opportunities on a go forward basis.

Beyond these, that's what you would see further growth or are you saying would this sort of like…

We are always looking for opportunities. I don't think I really want to outline exactly what our strategy is. Listen to this call, it's certainly when we purchased Troms, as we talked about, we felt with that management team in place we certainly have the ability to scale up their operations, we did do actually. Before the Troms acquisition, we bought three vessels that fit nicely into it and this is just the further development of that strategy to expand it.

That makes sense. Thank you very much for the update.

Thank you.

From Tudor, Pickering, Holt, we have George O'Leary online. Please go ahead.

Good morning, guys.

Good morning, George.

Good color on deepwater and kind of your outlook for rates moving up modestly. I was wondering if you could you expand on that a little bit and kind of quantify what you think of it as rates moving up modestly as we look at '15 and then there are also the opportunity for utilization new hire for the new hire for the overall deepwater fleet and potentially any regions driving that optimism?

We are not going to drill into any specific regions. I mean, deepwater as a whole has been great and continues across all as Quinn said. I think with respect to utilization, we are effectively at full utilization. When you get north of 85%, when you take into effect, you do have regulatory drydockings, you do have some movement between different regions. There is not a whole lot of growth to get above that. You may spike a couple of points in the quarter, but we are effectively sold out on deepwater. With respect to the day rate progression, Quinn, do you want to give any color on that or a look at that?

Yes. I think as we have said in the previous calls, that I think Jeff providing kind of a two-year retrospective on the 25. We had probably helped people understand kind of what that sector has done and [recently], but by and large, we are not seeing dramatic movements in the towing supply rates. We see full utilization effectively and stable rates. Hopefully with the rising jack-up count, we will start to see some progress there as well, but on the deepwater side, as Jeff indicated and I mentioned in my comments all of the available equipment that's not in drydock or on its way to drydock is either working or on its way to a job, but doesn't necessarily mean that we won't have the normal contract roll over quarter-to-quarter and our recent experience was that those contract rollovers provide a bit of positive trajectory in terms of average day rates, but again we are not seeing in our bidding activity significant spikes, we are also not seeing any reversals, so we remain optimistic it will be the available equipment busy at pretty decent rates.

George, understand that that we had told people for quite a while now that we expected the rollovers of legacy contracts for our deepwater vessels for the most part it to be completed by this March quarter that in fact has largely happened, so I think the quick acceleration of day rates in the deepwater fleet that you have seen over the past year or two on a quarter-to-quarter basis, we fully expected that pace to slowdown and that's exactly what we are saying now. It's not to suggest that we don't have opportunities to push day rates up, add more equipment into our fleet that was the bigger nature and therefore push that average rate up because of their size etcetera, so that's kind of what we are seeing right now.

Okay. That's very helpful color. Then over the last few quarters you guys have highlighted customers looking to lock-up vessels three to six months before they actually deliver it and just kind of given your robust new build program, has that continued or has there been any change in customer behavior?

I'll tell you over the last you know 6 to 12 months, I haven't seen a whole lot. You do have some issues. I talked about it before in the U.S. market. Last year was very good market. We took that opportunity to lockup some U.S. flagged equipment that was under construction. We didn't place the spot market for say. Some others have done, we like that, but overall with the exception of that U.S. market, I really haven't seen a whole lot of change in what we have done.

Thanks very much, guys.

From Simmons, we have Ian Macpherson on line. Please go ahead.

Hi. Thank you. Jeff, you mentioned two or three times that the analyst community isn't really square with reality in terms of the outlook for the business. At the same time, I mean, the Wall Street consensus for fiscal '15 is more than double the earnings from fiscal '14, so I know you are guiding earnings specifically, but can you kind of reconcile those comments and sort of what's baked in, in the Street expectations at this point based on steadily improving day rates?

Yes, Ian. My comments were more towards the drillers have come on and certainly there has been some softness and their future contract and I think you again, the overall rig count our thesis and our basis for our optimism is not that all of these 250 rigs that are under construction are going to be incremental. Certainly day rates on drilling rigs at least on the contracting side is have come down what have been historic highs, but from our standpoint a working rig still need support vessels, still needs all the services for, so whether that rig is at $680,000 or $650,000 a day or $450,000, we think as long as it's working, it's the key, so I think my comments were more to the very negative sentiment that started early in the quarter when some of the drillers came out and were talking really about some of the issues on the forward marketing success or locking it up. Now, recently we have seen some of the drillers have come out and added to the contracting backlog. Again, they are not increasing the day rates or going above it, but nonetheless, the working rig for us is still much better than certainly in a idle rig. I think, that was really what my sentiment is, because when you look at Tidewater, we got punched I think pretty hard even more than some of the drillers did, when the drillers came out with some of that commentary earlier in the year, so that's really where I coming from.

Got you.

At least, estimates that we are looking at on the first call was at 479 for the fiscal 2015. That looks like a relatively steep slope when you look at earnings on a non-adjusted basis, but we certainly had no expectation where we sit today of another goodwill impairment, transaction expense associated with Troms, or the early retirement of Troms that we inherited in the transaction, so if you at least go off of the creating adjusted number that Jeff used and the 479 is the first call that I see, about a 26% year-over-year improvement and we are not providing earnings guidance, but I don't see that as a doubling or even the 70% Growth that you will see on 479 relative to the unadjusted numbers we reported.

Yes. That's fair.

…the earning a little bit.

Yes. No, I was looking at the fiscal '16 against your GAAP earnings for fiscal '14, which I appreciate were subdued for the non-recurring reasons. One more if I may quickly, Quinn, you said that your total commitment in the 10-K will read 573 as of March 31st and then to 137 for the three cold water vessels will be additive to that amount?

That's correct and just remember that 573 is not a total commitment to see remaining payment on commitments made as of March 31. I think the total commitments are a $200 million higher. The difference obviously being payments that we have already made.

Right. Got it. Okay. Thank you very much.

Thank you.

From Wells Fargo, we have Matt Conlan online. Please go ahead.

Hi, guys. Also a congrats on a good operational quarter in March quarter. Just tell you, within the deepwater fleet the anchor handlers, you know, rates there had been pretty flat for the last 18 months, but they jumped 7% in the quarter. Realizing you had lower utilization than normal was this just a mix issue, where the vessels with lower rates were the ones that were down driving up the average day rate or do we actually have a new baseline of rates for this vessel class?

I think, it was the fact there was a mix issue and you are right, we had some vessels that are in our deep water anchor handling class that are the smaller vessels in that class that had some drydockings. Although we had in effect moved some of our bigger, the very bigger ones to some new contract that we'll some increases on at the end of the day, but you haven't seen the effect of that, so it's a mix issue in the quarter we just completed.

Okay, so we shouldn't extrapolate that. If you are going for if that going to come down a little bit as those smaller vessels come back.

That's correct. As those smaller vessels move onto their contracts and finish their regulatory drydockings, you will see that day rate come down, but you will see the utilization pick up as they come back on charter.

Okay. Great. Changing gears, there has been some speculation of course the majors are looking at how to improve their rates of return and in that process, with speculation that they might shift expenditures more towards development programs than exploration. My sense is that would be positive, a positive change for the vessel class, but am I my right on that?

I am not sure that it is necessarily positive. What it does is just as that rig is now instead of drilling and exploration well maybe drilling the development wells and again an offshore deepwater development, so it may not be a positive, for say, because it keeps the rig working and that's certainly the key point for us. Then obviously as the development drilling moves on, there are other knock on services pipelines, the FPSO, however the field is being developed that in fact could be a pull through to increase the overall demand, but your point is right. As they move from exploration to development drilling, it's certainly not a negative for us.

Yes. That was my point that there would be the associated construction and installation work that would take up some vessel time.

Yes. That's right.

Okay. Great. Thank you.

From Cowen and Company, we have J.B. Lowe online. Please go ahead.

Hi. Good morning, guys. I just a quick question on the towing supply business, your utilization has bounced around the mid-80s for the past couple of years, but what is a good take for day rates to really get going there? Are we looking that utilization in the high-80s or something like that?

J.B., I hate to keep saying things that we have. I think as the jack-ups are delivered and to the extent that they are incremental that's what's going to hit that inflection point on it. It's certainly not for the lack of trying and we very much want to see it move up. As I stated in my comments, while expense subdued, I mean, we have moved from that 13.3 a day up to 15,000, we could go to get to that 20,000 feet that we saw last month. That's where we are and I think as the jack-ups continue to be delivered and we are hopeful to see those be a large portion of those would be incremental that's certainly going to bolster that effort.

Okay.

We talked about in previous calls, I think, one of the things that, we believe may benefit the supply/demand dynamics in the towing supply market is that the number of towing supply type vessels that are in the construction queue relative to the number of jack-ups that are in the construction queue is pretty modes.

Correct, so for long-term purposes you guys are expecting utilization to pick up here which would be followed by rates?

Again, you are in that mid-8% JV that you could squeeze maybe a 1% or 2% out of it, but there is not a whole lot more juice on the utilization side.

Okay. I guess, that's my question then. If there is not that much more juice to be had on the utilization side then how come rates haven't really gone up that much?

That's for our feet, J.B.

Okay.

We report our numbers, where (Inaudible) is our largest competitor also reports a similar segment and they have got high. Understand the combined, we are still a small percentage of the overall numbers of the total supply, so what that suggest J.B. that we said is the rest of the operators are in that mid-operating percent

Got you. Okay. Just a quick question on new build North Sea vessels you bought. Is that going to be under the Troms' flag? Is that going to be kind of being run by those guys?

The anticipate today is will be. That is certainly our cold water expertise is under the Troms group and that's where those vessels are intended to ultimately end up. Now, not necessarily in the North Sea, that our cold water activity was going to be centered out of Troms' management team.

All right. Thanks so much. That's all I had.

Thanks, J.B.

From Credit Suisse, we have Gregory Lewis online. Please go ahead.

Thank you and Good morning. Jeff, clearly I think it was alluded to that earnings are going to be ramping up. At least that's the expectation. Is there any way we should think about the earnings going higher with potentially increased shareholder returns dividends?

I didn't quite understand the question. Could you repeat it please?

Okay. I mean, I'll ask it a different way. If we think about cash flow, as I look back over the last couple years it looks like from, let's call it, calendar year 2012 through calendar year little last like what's that, 13 quarters? It looks like the pay out of cash flow from the dividend is, let's call it, high-teens as sort of we look forward into 2015 and 2016 that the cash flow that Tidewater is going to be kicking off looks like the example not only for - building out your fleet, servicing your debt, but it also looks like there will be additional cash flow for additional dividend increases. Is that something that management is thinking about or are you just comfortable with the existing buyback that's sorted out there?

I can tell you that discussions we had with investors and internally with our board is when we get, it will be finalized your fleet build out and again we are not at the end yet, but we are much closer to the end than we have been. Certainly that free cash flow, what is the best way to return that value to the shareholders. We understand that it is shareholders' money at the end of the day. Management is not here to just play with it. Dividends are certainly an option, share buyback - I can just tell you that my feeling on that is, in the service sector, we've got lots of operational risks in the business that we do. Okay? When you increase the dividend that is something that you are very much reticent to take back. Where we are at with that dividend? I can say that today my feeling is more looking at potential share buyback or getting ahead ourselves, but it is a discussion that we have with the board on a regular basis and with investors. I can tell you sentiment with the investors is all over the place, increased the regular dividend, look at special dividends and share buyback. That discussion depending on who is in the room, you will have that many different flavors of what be the optimum way to do that. Again, we believe that we are headed to that free cash flow. We have little debt maturities on the horizon, so we are getting closer to making those decisions and being in a position where we need to implement it.

Okay. Then just real quick, I know it's [12 O'clock]. Just as we think about the opportunity the Middle East, I mean, clearly there is this expectation of a ramp up in activity in the Middle East, not only by ONGC, increased activity by ARAMCO. When we think about Tidewater's fleet in the Middle East, I mean, do you sort of view the fleet appropriately sized for the Middle East or is this an area where we could actually see some growth over the next one, two, three years.

I think, you will see growth which has been, I think, pretty tremendous. When you look at what we've done in the Middle East, and that's all new equipment, high-spec equipment. Our story in the Middle East and with ARAMCO in particular I think is one that we are very proud of. Lots of hard work to get there and it's continuing, I think, to pay dividends for us and our shareholders, but we look at that as a growth area.

Okay, guys. Thanks for the time and nice quarter.

Thank you.

Thank you. We will now turn it back to Jeff Platt for final remarks.

I want to thank everybody for their interest in Tidewater today. With that, we will end the call.

Ladies and gentlemen, this concludes today's conference. Thank you for joining. You may now disconnect.