Hello, and welcome to the Fiscal Year 2015 Second Quarter Earnings Conference Call. My name is Joe, and I will be your operator for today's call. [Operator Instructions] Please note that this conference is being recorded. I will now turn the conference over to Mr. Joe Bennett. Mr. Bennett, you may begin.

Thanks, Joe. Good morning, everyone, welcome to Tidewater's Second Quarter Fiscal 2015 Earnings Results Conference Call for the Period Ended September 30, 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, Executive Vice President and CFO; and Bruce Lundstrom, our Executive Vice President, General Counsel and Secretary. We'll 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 final wrap-up comments, and we'll then open the call for your questions. During today's conference call, we may make certain comments that are forward-looking, and not 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. With that, I'll turn the call over to Jeff.

Thank you, Joe, and good morning to everyone. Yesterday, after the market closed, we reported fully diluted earnings per share for the second quarter of our fiscal 2015 year of $1.22, compared to adjacent net earnings per share of $1.15 in the corresponding quarter last year and $0.88 in the preceding quarter. The financial results reflected a solid operating quarter. As Quinn will detail for you shortly, we generated revenues at the high end of our prior guidance and operating expenses at the lower end. As usual, there were a mix of positives and negatives during the quarter that impacted our bottom line, but on balance, our revenue gain was driven principally by a roughly $700 a day increase in the global fleet average day rate from the rate earned in the June quarter. That increase came without significant help from vessel mobilization and demobilization revenues. Overall, our fleet utilization rate declined marginally, although our global deepwater fleet enjoyed a strong 87% utilization rate, partially offset by a small drop on our towing-supply/supply fleet to around 76%. Our operational earnings performance was driven primarily by the day rate gain, coupled with reduced expenses sequentially, including reduction in repair and maintenance expense and G&A costs. In light of the turbulent conditions in the oil market today and the uncertain outlook for the offshore business due to possible reductions and expiration of production activity in certain geographic markets, we are pleased with this quarter's results. They reflect the hard work and dedication of our 9,000-plus employees worldwide. Equally as important, these results confirm the strength of the Tidewater franchise, something which shouldn't be overlooked as we enter a period of business uncertainty. In fact, we believe the strength of our franchise will be more important in the upcoming periods. What are our…

Thank you, Jeff. Good morning, everyone. As Jeff mentioned, we issued our earnings press release after the market closed last evening. We expect to file our quarterly report on Form 10-Q through the EDGAR filing service some time before the close of business today. Turning to financial results. We reported diluted earnings per common share of $1.22 for the September quarter, which again is our second quarter of fiscal 2015. EPS was up 39% relative to June quarter, in which we've reported EPS of $0.88 and up 6% relative to September quarter of fiscal 2014, in which we reported adjusted EPS of $1.15. Adjusted EPS for last year September quarter excludes a $4.1 million or $0.06 per share after-tax loss on early retirement of debt and was inherited in the Troms transaction. Vessel revenue at $391 million was up about 2.5% quarter-over-quarter and up about 7.5% year-over-year and as Jeff noted, came in at the high end of the guidance that I provided in early August. Relative to the June quarter, Vessel revenue for the quarter just completed reflects a reduction in loss revenues from vessels in drydock and pure vessels in transit, or otherwise, off hire for nontechnical reasons. Offsetting these 2 positive dynamics in the September quarter was a smaller contribution from lump sum mobilization fees and our stacking of a couple of vessels that contributed vessel revenue in the June quarter. Looking at key geographic markets, again, relative to the June quarter. Activity levels for Tidewater were higher offshore Australia and across the entire Americas region and lower in the U.K. sector of the North Sea and the Arabian Gulf. Vessel operating expense at approximately $230 million was down about 2% quarter-over-quarter and up about 9% year-over-year. Vessel OpEx for the September quarter was in the middle…

Thanks, Quinn. Our financial results for the quarter reflected solid operational performance within what we continue to believe will be an overall extended offshore industry up cycle. However, the path ahead will no doubt be bumpy due to the crosscurrents of lower global oil prices and a likely more conservative stance by our clients toward their capital spending plans in the near term. Our financial performance may be lumpy over the next few quarters, as Quinn just explained, but the variability in earnings that we see ahead is not because we see our clients pulling back on their activity in a big way, but rather more due to the timing of delivery of our new build vessels and drydockings for some of our large deepwater vessels. Since these timing issues involve some of our more expensive vessels, there will be the negative -- there will be a negative revenue effect from the lost vessel time at high day rates and also, the R&M expense associated with the drydockings, which will be meaningful, but transitory. Our operating margins will likely be squeezed over the next few quarters. And thus our near-term guidance is relatively cautious. For the longer-term, I suspect we are significantly more bullish than the majority of the analysts and investors. During these somewhat in certain times, we will continue to focus on improved business practices, cost control and operational execution in order to extract maximum value from our business activities. Behind the scenes, we have recently invested in improved information technology and business process upgrades, and we are fully expecting to reap benefits from these improvements in the coming quarters. While investors are concerned about trends in certain high profile markets, such as the Gulf of Mexico, the North Sea and Southeast Asia, let me point out that…

[Operator Instructions] Our first question here comes from Mr. Gregory Lewis from Crédit Suisse. Gregory Lewis - Crédit Suisse AG, Research Division: Jeff, as you guys went through the prepared remarks, for subsea, Sahara, Europe, you definitely -- you went out of your way to split out the North Sea. As we think about what's going on in the North Sea and realized you're still building out that business, but just given some of the softness that we're seeing in the North Sea. Does it make sense for Tidewater to maybe reposition a vessel here or a vessel there away from the North Sea, maybe down to West Africa, where the market seems like it's holding in tighter?

Gregory, you're 100% right. And we've been doing that, we do that with all of our areas, not just the North Sea. We have moved some vessels out onto other term projects with better opportunities. So it's an ongoing process, and the answer is yes. Gregory Lewis - Crédit Suisse AG, Research Division: Okay, great. And -- okay. So then, when we think about -- okay, so when I think about the revenue guidance that you're -- it sounds like you're embedding those potential vessel moves.

Absolutely. That's certainly part of the forecasting plan, Gregory. Gregory Lewis - Crédit Suisse AG, Research Division: Okay. Okay, great. And then just as I think about it longer term, I mean, clearly, you guys are generating a good hunk of cash and you're always posed with the investment propositions that you have whether it's ROVs, you mentioned maybe something else. How should we think about the deployment of that capital? Is that something -- I mean, is it just simply an IR analysis or is it -- what can Tidewater due to maybe break the mold of the traditional supply book company and potentially try to move to, let's call it, higher quality type revenues?

Gregory, those discussions we have internally with the Board, certainly getting the franchise with the investments we've made. That was an absolute must before we start moving on to the enhancement of the franchise. But we certainly are looking for ways to pull through the existing fleet. We certainly understand, I think, what our strengths and capabilities are. We've got to play to those strengths. And pretty excited about the opportunity set that's in front of us. And as I said in my prepared remarks, if this uncertain period turns out to be somewhat of a downturn, and I'm not projecting any length to it or shortness to it, certainly, there's going to be opportunities, I think, within our space, and adjacent spaces, where some people have gotten in over their heads, highly levered and really can't stand a whole lot of stress to them in what might be a pull back. So I think there's going to be some opportunities, as I mentioned before. But we're looking at again, trying to grow the franchise, grow on our strengths. And at the same time, move a little upscale in some of the service offerings that we do than just a conventional time chartering of vessels.

And our next question here comes from George O'Leary from Tudor, Pickering, Holt. George O'Leary - Tudor, Pickering, Holt & Co. Securities, Inc., Research Division: On the -- looking at your results, the shallow water rates, at least versus our expectations, were stronger than we had forecasted. Looking out going forward, do you think there's more upside to shallow water relative to your deepwater expectations from here?

Again, it's going to depend how the jack-up market unfolds. We had a little bit of benefit in that average day rate, where in the Saudi markets, some of the lower spec to supply vessels have rotated of some Saudi contracts. So that actually had effect of moving up the day rate averages. Those vessels are going on and have going on to new contracts at rates that were more commensurate with the specification of those vessels. See, you might actually see that average day rate pull back a little bit from the gains that we've received. But overall, it's going to depend on how the jack-up market continues to unfold. Certainly, that segment of vessels has not performed as well as we would have liked certainly not as well as the deepwater market, but it's all going to be dependent on the shallow activity levels. If in fact the -- a portion of the jack-ups coming in and being delivered to the market are incremental, and up, certainly not 100%, then that will tighten that market out. And when you look at the OSVs under construction, there's a much lesser percent of those that are really targeted to the shelf market. So again, it's going to come back to that supply/demand. The supply is not as bad on the new vessels coming in, but it's just going to depend on what the jack-up market does. Long-winded answer, I'm sorry. George O'Leary - Tudor, Pickering, Holt & Co. Securities, Inc., Research Division: No, that's helpful color. And then your strong Americas results, both on utilization and just the operating profit margin side. You mentioned 2 years backlog coverage for that segment. Can we expect to see utilization kind of hold in around these levels going forward? And then can you keep up the operating margin performance in that segment as well?

I think the 2-year comment was specific to the Gulf of Mexico. But in general, when you look at what makes up the Americas, you have the U.S. market, which we just talked about having that kind of term. Mexico and Brazil are the other 2 big drivers. They tend to be term contracts that have pretty good length to it. We made some nice moves, I believe, in Brazil over the last year to go back into contracts. We've increased our vessel count with, primarily Petrobras and at good day rates, we believe. So I think the Americas utilization should hold pretty well. And those day rates, again, were locked in. I think, at relatively favorable term for us. So you will have, as you have major R&M, you're going to see some margin issues there. Those are expensive big day rate boats. But if you sort of take out that cost of the maintenance and repair on it on the major, on the docking side, I think that the Americas segment should hold up quite nicely.

Just comment regarding the contract coverage that's correct the specific comments we made were regarding U.S. Gulf of Mexico. But it's also true that Americas region probably has the best contract cover of the entire business. And again, margins are expected to remain good I know with potential quarter-to-quarter volatility largely driven by timing and drydocks.

And our next question comes from Jon Donnel from Howard Weil.

I had a question regarding the vessel count guidance. Just trying to kind of reconcile between the expected newbuild deliveries versus maybe some sales. Looks like for the September quarter, I had -- there was supposed to be 5 deepwater boats delivered. Sounded like there are some delays there, but the deepwater fleet stayed relatively flat. I was wondering were there any sales of active deepwater boats during the quarter? And should we expect any of those going forward? And maybe the same question applying to the towing-supply class as well?

Now, we have no plans to dispose deepwater vessels and that's not embedded in the guidance. You're correct that timing of vessel deliveries is fuzzy at times, and we've had some delays in our disruption projects. But the trend that I would expect is that deepwater will, at a minimum, be stable in terms of vessel count and likely growing by the end of the fiscal year, actual timing of those deliveries and ultimately, the time to get on contract is less easy to predict. But in regards to towing-supply vessels, that may be moving in the opposite direction very modestly as a result of a couple of vessels that we would stack, that I'd telegraphed. And those again are older PSVs that are generally supporting shallow water activity.

Okay, that's helpful there. And then, also, regarding the kind of just the status in Angola. It looked like the -- again, with the overall fleet, active fleet count down in that segment, I guess, could you just give us an idea of kind of what the fleet count stands there? Maybe how that's been changing and whether -- yes, there is any we should be expecting any other big changes? It doesn't sound like it based on you prepared commentary, but I know that's always a big question.

Yes. You'll see, when we file this afternoon, there is an extended discussion of Sonatide and Angola, including vessel trends over the last couple of quarters. But I wouldn't interpret that to mean that we've got some massive exodus of equipment out of Angola. We have selectively redeployed equipment as we talked about in prior calls. We evaluate all opportunities when we've got a vessel available and obviously, the risk profile of Angola has changed over the last couple of years. And as a result, tides are frequently going to other areas or other regions and that's what gets reflected in the redeployment decisions. But no, we've had no massive pullout in Angola and don't plan one, either.

Our next question here comes from Matthias Detjen from Morgan Stanley.

My first question is about the Middle East region. You said that utilization would probably come back up next quarter, it seemed like you signed those contracts. I was wondering, have you seen a large number of vessels coming in from other regions, area sort of, flooding in from other regions? Or do you have seen a supply that being relatively stable?

No, I think the supply has been relatively stable. We have moved vessels back over the last couple of years, primarily from Southeast Asia. We've made that move into the Middle East and primarily into the Saudi market. So I don't see a big ramp-up of entrance into that region. What you have is Saudi rationalizing their fleet. And in fact, upgrading the technical specifications, which has benefited Tidewater. We've upgraded the vessels that we have working for Saudi and that's kind of pushed out maybe some of the lower spec vessels. And those are the ones that I've made reference to that we see came off the Saudi that have been picked up on other contracts.

Okay, that's interesting. And then on the subsea segments and your ROV venture. Can you maybe give us some more color on how you're integrating that with your current business and how that's sort of coming along with...

Well, first of all, we have 6 ROVs. So it's not -- but it is a -- it's a global effort, and we've had success-ed in the Americas. And we've now got success though beyond going in the Far East as well. So it's global. We're outfitting some vessels that we have in our fleet to be able to do some IMR-type of work, and we're in the process of signing up contracts in Africa, too. So actually, it's picking up steam and going quite nicely.

Our next question comes from Mr. Turner Holm from RS Platou.

Yes, you mentioned in the prepared remarks that you have -- you had exposure to some of the better markets, I think you pointed out Brazil, Mexico, West Africa, in particular, as opposed to, say, North Sea or the Gulf of Mexico. But can you just give us an idea of what's happening to leading edge day rates in those and sort of what you might call the better market?

Well, say, that the utilization is still strong, obviously. The leading edge day rates certainly in the deepwater is, I think, we've reported over the last couple of quarters while we've had some upticks. It's basically flat. So it's stable and flat. And then on the tow-supply, it's probably again ticking modestly upwards, but again, not a whole lot to write home about. I mean, we've had some gains on the tow-supply. We say it's been flat. But if you kind of look back over the last 18 months, 2 years, we actually have had a little bit of increase there, certainly not to the extent of the deepwater, but I'd say, today, leading edge day rates are pretty flat.

Okay. So nothing like, I guess, what you've seen in the North Sea then?

Not at all. And again, it's a different market, different players. So you don't have near the size of the spot market that you do. You don't have the winter season causing a slowdown period. So it's 2 entirely different operating dynamics for the market.

I think the only thing I'd add is that leading-edge day rates are flat, as Jeff indicated, but they've been flat for some time. So you haven't seen in the last couple of quarters, as you saw in the prior 6 to 8 quarters, is a lagging up of average day rates, as contracts rolled over and vessels went to current market rates. And so we've seen as both stability and leading-edge rates and stability in regards to average day rates as well.

At all-time high.

Sure. Yes, yes, Totally. Agreed. So just I know you guys mentioned that you're probably a little bit more bullish than a lot of the investors out there. I'm curious, I'd be curious to hear what you had to say about maybe what you might be hearing from your customers or what you guys might be seeing that gives you a little bit more confident? And then, I guess, related to that, if it doesn't, I guess, play out as well as is what we're expecting now on how do you guys think about stacking vessels. And I guess, where would you do that?

Well, right now, we've got virtually a new fleet at very high utilization. So you -- where you would think about stacking, and I'm not saying that we are thinking about stacking, but the question where obviously, it's when you have a portion of the fleet that has reduced or greatly reduced utilization, that's what you think about. You try to foresee, if you could move it to another market to keep the vessel working, where the numbers work out. But if not, then you look at potentially trying to reduce your running costs by doing that. And I'm not saying we have any plans for that. To the contrary, our utilization numbers, I'm pretty doggone happy with what we've been running these boats at and continue to. And what is it that I'm talking to my clients about? I can tell you even when in the good times and the bad times and I guess, it depends if it's a very bullish market, we can go in and we can increase day rates, they try to beat the hell out of us to put day rates down. That's the way it is. They never welcome you with open arms. So certainly, this slowdown, just pretended slowdown when you see in the day rigs and drilling rigs take a tremendous reduction, it doesn't get any easier when you talk to the client. But at the end of the day, Quinn made a comment about our bidding activity. And while it's down a little bit and then this is just a subjective that we take the rounds within the company, it's still at a very pretty robust rate. And that's sort of, at least an indicator internally we have a feel for what the market's doing. So what makes it bullish,…

Sure. Understand. If I could just sneak in one last quick one. It's just that it's really interesting to know, I guess, what you guys are saying with regards to use of cash. I mean, I think if you look at your 2 years appears they're very much talking about share buyback. You guys mentioned that you are, call it, maybe relatively more bullish than others. Talking a little bit more about acquisitions. But I'm just curious how that, the timeline of that thinking plays out? Are you going to sit around and kind of wait out the market if see if there's a distress in the event that maybe there's a little downturn? Or do you go ahead and start deploying that cash relatively so you can just -- you're thinking around shareholder returns versus acquisition?

Turner, we're thinking about all those things. Okay? We're trying to see again what the capabilities are of the company. This is a cyclical capital intensive business. If the downturn does turn into a major downturn, I'm not suggesting that it will, then again, I think our conservative bent has served Tidewater well over the years and will continue to do so. What I've tried to state is that, certainly, when you look at the price of our shares, when we look at that and we try to use that against the metrics that we have, it makes us a pretty compelling case that the stock is undervalued. I think almost every company that's in the space has probably made that same evaluation and they're certainly saying the same things. And you have to certainly look at that and value that and weigh that against other investment opportunities that you have. And as I said, we'll continue to do that. And I think, certainly creating shareholder value and growing the franchise, that's the intention.

But I wouldn't interpret our comments regarding share buyback see they're either on absolute or relative basis. Jeff made the comment that the stock is undervalued and significantly so from our perspective. And if you look at an investment opportunity whether it's in iron or in shares, we'll be looking at those same relative valuation dynamics. And obviously, with our own stock trading at 80% of tangible book value, an opportunity to invest in ships will be viewed similarly. So it doesn't make sense to spend dollars to buy dollars when you can spend dollars to buy quarters. And that's the same way we've always looked at it. So I wouldn't interpret our views on share buybacks as being different than anybody else's commentary regarding what the recent equity markets have done and how that's created a different slate of investment opportunities for issuers.

Our next question here comes from Richard Sanchez from IHS.

My question is regarding the future and your potential plans and strategies for the opening up of Mexico.

Richard, the good news for Tidewater, we've been in Mexico a long time. So we're not new to the market. We certainly have a very nice business in Mexico. We have had over the years. We view the opening as something that's certainly positive. And it's going to unfold, probably a little bit slower paced than what a lot of people, what a lot of others have said. But again, we fully intend to capitalize on our business there and grow with the Mexican market.

Our next question comes from Mr. Mark Brown from Global Hunter Securities.

Just wondering, you mentioned in your discussion that turbulent markets present attractive investment opportunities. And are you focusing on distressed assets in the shipyard? Or are there adjacent markets or adjacent lines of business that you would consider investing at this stage?

Mark, all of the above. I mean, if that's what you're looking at. You try to see where that best value presents itself and then how does that fit in the overall strategy for the company on a go forward.

Okay. Got it, got it. And then I was wondering if -- just not for Tidewater specifically, but for the industry in general, if you've seen vessel stacking increasing in recent months or if you expect that to accelerate going forward. I know you've mentioned in the past that there are 700 or so vessels that are in the global population that are 25 years or more. And did you see those being removed from the fleet in an accelerated manner going forward?

Well, I think, certainly, if there is a bit of more supply being given the OSV fleet, it's not that people purposely take them out, the market pushes them out. And as I said, the space where we operate in, really on a worldwide basis, we're not losing jobs to old equipment. And again maybe others that have commented they don't seem to go the way our. I'm just telling you, we're not losing much of any work to a 30-year-old boat. So a lot of that equipment, I think, is at least left at least the space that we occupy. I've seen some stacking, others have reported here in the Gulf of Mexico because of the kind of timing issues with rigs coming on where some of our competitors had some smaller vessels and they tend -- they're stacking those and working some of their bigger, new vessels in those slots. But that's just listening to the same earnings calls that you are recently.

The only thing I'd add, Richard, is don't misinterpret my comments regarding potential vessel stackings. And we've pulled a couple hundred vessels out of the active fleet over the 6 years that I've been with Tidewater and our flag stack fleet peaked to about 100 vessels. And today, it's, I believe, averaging 13 in the quarter. And it may get up to 15 or 16 or 17 or something like that. But we're not planning a significant number of stackings in part because it's already taken place at Tidewater.

It's an all new fleet that's out there.

Yes, that's right.

Our next question comes from Haithum Nokta from Clarkson Capital Markets.

Apologize if you gave this already. But do you still expect your R&M expense to be flat to up mid- to high-single digits this year?

I actually don't have it in front of me. I'd have to circle back to you on that. I should say we haven't significantly revised our annual R&M spending plan. It's just the pattern of occurrence quarter-by-quarter certainly was changed as the year progressed. So I don't have a specific number in front of me, but I wouldn't say that we've had any significant upward revision our overall expected R&M expense.

At this time, showing we have no further questions from the audience.

All right, Joe, thank you very much. Thank, everyone, for their participation on this busy day, this day of voting nationally. So again, thanks for your interest in Tidewater. Have a great day.