Tidewater Inc. · NYSE:TDW
Tidewater — Bank of America 38th Annual Investment Conference (September 2008)
40 slides from Tidewater's conference presentation, Sep 17, 2008
Slide 1: Bank of America 38th Annual Investment Conference
September 15, 2008 Exhibit 99.1 J. J. Keith Keith Lousteau Lousteau – – CFO, CFO, Executive Executive Vice Vice President President and and Treasurer Treasurer Joseph Joseph M. M. Bennett Bennett – – Executive Executive Vice Vice President President and and Chief Chief Investor Investor Relations Of
Slide 2: Forward-Looking Statements
In accordance with the safe harbor provisions of the Private Securities Litigation Reform Act of 1995, the Company notes that certain statements set forth in this presentation provide other than historical information and are forward looking. The actual achievement of any forecasted results, or the
Slide 3: Our Workplace
OUR WORKPLACE OUR WORKPLACE
Slide 4: Safety Record Rivals Leading Companies
0.00 0.25 0.50 0.75 1.00 2001 2002 2003 2004 2005 2006 Calendar Years TIDEWATER DOW CHEMICAL DUPONT EXXON/MOBIL BP 2007 SAFETY RECORD RIVALS SAFETY RECORD RIVALS LEADING COMPANIES LEADING COMPANIES Total Recordable Incident Rates Total Recordable Incident Rates Calendar Years
Slide 5: Tidewater Today
Solid safety record Entire fleet earning great returns Aggressively investing in new vessels Unmatched global footprint Strong balance sheet Disciplined in regards to investment and capital management TIDEWATER TODAY TIDEWATER TODAY
Slide 6: Tidewater Tomorrow
Fleet with expanded capabilities Increased international presence Generating solid returns regardless of market cycle Financially strong Growing earnings and solid returns tied to new vessel deliveries TIDEWATER TOMORROW TIDEWATER TOMORROW
Slide 7: Our Strategy
Deploy cash to renew fleet with expanded capabilities Push dayrates and utilization to grow profits and cash flow Balance long-term and spot market opportunities Right acquisitions, right price, right time Opportunistically utilize balance sheet strength Focus on creating shareholder value OUR STRAT
Slide 8: Continued Positive Outlook
Favorable commodity price environment International E&P spending up 20% in 2008 (Lehman Bros.) More vessels needed - High rig utilization - New rigs (~187) and FPSO’s (~89) coming - Strong seismic and construction markets Largest new fleet in the industry Traditional vessels earning excellent return
Slide 9: Vessel Population by Owner
292 84 67 66 61 Tidewater Competitor #1 Competitor #2 Competitor #3 Competitor #4 Avg. All Others (1,468 total vessels for 300+ owners) 5 VESSEL POPULATION VESSEL POPULATION BY OWNER BY OWNER (Includes AHTS and PSV’s (Includes AHTS and PSV’s only) only) E Estimated as of June Source: ODS-Petrodata a
Slide 10: Basic Rig Facts
601 Working Rigs 119 Inactive Rigs 187 New Rigs (37 in 2008, 64 in 2009, 50 in 2010, 26 in 2011, 10 in 2012) BASIC RIG FACTS BASIC RIG FACTS In yard getting repaired Warm stacked/Standby Hot stacked Cold stacked/other Source: ODS-Petrodata Estimated as of June 2008 Estimated as of June 2008
Slide 11: Floating Production System Facts
279 Active 11 Inactive 89 Under construction (27 in 2008, 36 in 2009, 16 in 2010, 10 thereafter) FLOATING PRODUCTION FLOATING PRODUCTION SYSTEM FACTS SYSTEM FACTS Source: ODS-Petrodata (Includes FPSO, FSO, Spars, TLP, Other) (Includes FPSO, FSO, Spars, TLP, Other) Estimated as of June 2008 Estimated
Slide 12: Global Vessel Fleet by Age
0 20 40 60 80 100 120 140 160 180 1965 1970 1975 1980 1985 1990 1995 2000 2005 2,038 active vessels GLOBAL VESSEL FLEET BY AGE (Includes AHTS and PSV’s only) As of 6/30/08, there are As of 6/30/08, there are approximately 736 additional AHTS approximately 736 additional AHTS and PSV’s and PSV’s unde
Slide 13: Global Vessel Fleet by Age
0 20 40 60 80 100 120 140 160 180 1965 1970 1975 1980 1985 1990 1995 2000 2005 Of the total 2,038 vessels, 299 vessels are 30+ yrs old . GLOBAL VESSEL FLEET BY AGE (Includes AHTS and PSV’s only) Source: ODS-Petrodata and Tidewater As of 6/30/08, there are As of 6/30/08, there are approximately 736 a
Slide 14: Global Vessel Fleet by Age
0 20 40 60 80 100 120 140 160 180 1965 1970 1975 1980 1985 1990 1995 2000 2005 Of the total 2,038 vessels, GLOBAL VESSEL FLEET BY AGE (Includes AHTS and PSV’s only) Source: ODS-Petrodata and Tidewater As of 6/30/08, there are As of 6/30/08, there are approximately 736 additional AHTS approximately 7
Slide 15: Global Vessel Fleet by Age
0 20 40 60 80 100 120 140 160 180 1965 1970 1975 1980 1985 1990 1995 2000 2005 Of the total 2,038 vessels, 299 vessels are 30+ yrs old , GLOBAL VESSEL FLEET BY AGE (Includes AHTS and PSV’s only) Source: ODS-Petrodata and Tidewater As of 6/30/08, there are As of 6/30/08, there are approximately 736 a
Slide 16: Vessel / Rig Ratio
2,038 Global Vessel Count (AHTS & PSV only) 601 Global Working Rigs 3.4 Vessel to Rig Ratio 48 Older rigs in yards getting prepared for work 187 New rigs under construction VESSEL / RIG RATIO VESSEL / RIG RATIO Current Vessel Demand Dynamics: Incremental Vessel Demand: Source: ODS-Petrodata and Tide
Slide 17: International Presence Driving Earnings
Unique global footprint; 50+ years of Int’l experience For 1Q FY ‘09, Int’l was 88% of revenues & 90% of profits Growing industry’s largest international fleet Longer contracts, better utilization, higher dayrates for new & traditional vessels operating in Int’l markets 2008 Int’l E&P spending up fa
Slide 18: International Presence Driving Earnings
90% International 10% Domestic (vs. 57% International and 43% Domestic ten years ago) Active Vessel Count By Region (excludes stacked vessels) North America 37 (10%) (10%) Central/South America 100 (27%) (27%) West Africa 147 (40%) (40%) Far East 49 (13%) (13%) Europe/M.E. 36 (10%) (10%) 90% Interna
Slide 19: International Vessel Dayrates
Growth Total Dayrate Growth from FY‘04 +71%, New vessels +81%, Traditional vessels +44% 0% 10% 20% 30% 40% 50% 60% 70% 80% Fiscal 2005 Fiscal 2006 Fiscal 2007 Fiscal 2008 INTERNATIONAL INTERNATIONAL VESSEL DAYRATES VESSEL DAYRATES Growth Total Dayrate Growth from FY‘04 +71%, New vessels +81%, Tradit
Slide 20: Growing Industry's Largest New Fleet
Ability to support $1 billion per year for fleet renewal and growth (Fiscal 2008 CapEx of $354 MM) Funding with internal cash flow and available credit Always weigh build vs. buy criteria Strive for a Balance Between Performance, Growth and Financial Strength GROWING INDUSTRY’S GROWING INDUSTRY’S LA
Slide 21: Largest New Fleet in the Industry
$1,353m 72 PSV’s $2,867m (2) 201 TOTALS: (1) $260m 63 Crewboats & Tugs $1,254m 66 AHTS Estimated Cost Vessel Count (1) Includes vessels added to the fleet financed by bareboat charter. (2) $1,971m funded through 6/30/08. *Excludes ENSCO fleet acquisition effected April 1, 2003. Vessel Commitments Ja
Slide 22: Largest New Fleet in the Industry... and Counting
59 Total 28 PSV 6 Crew and Tug 25 AHTS Count Vessels Under Construction As of June 30, 2008 Building vessels worldwide Due diligence focused on yards Tidewater staff supervise on site Estimated delivery schedule – 17 in FY ’09, 22 in FY ’10 and 20 thereafter LARGEST NEW FLEET IN THE LARGEST NEW FLEE
Slide 23: Fleet Cash Operating Margins
$0 $100 $200 $300 $400 $500 $600 $700 2000 2001 2002 2003 2004 2005 2006 2007 2008 Fiscal Years New Vessels Traditional Vessels Note: Cash operating margins are defined as vessel revenue less vessel operating expenses. FLEET CASH FLEET CASH OPERATING MARGINS OPERATING MARGINS 60% 50% 40% 30% 20% 10%
Slide 24: Fleet Cash Operating Margins
$0 $100 $200 $300 $400 $500 $600 $700 2000 2001 2002 2003 2004 2005 2006 2007 2008 Fiscal Years New Vessels Traditional Vessels Note: Cash operating margins are defined as vessel revenue less vessel operating expenses. FLEET CASH FLEET CASH OPERATING MARGINS OPERATING MARGINS 60% 50% 40% 30% 20% 10%
Slide 25: Largest New Fleet in the Industry
0 100 200 300 400 500 Active Fleet Dispositions * Net vessels added to the fleet since January 2000, including 59 vessels under construction at 6/30/08. * Since 4/01/05, 28 vessels have been scrapped and 123 have been sold. * Total fleet count excludes 51 stacked vessels. Out With the Old – In With
Slide 26: Strong Balance Sheet
$300 $300 Long-term Debt* $1,930 $1,958 Stockholders’ Equity 1.5% 5.5% Net Debt* to Total Cap $270 $185 Cash March 2008 June 2008 Further Proof of Our Discipline and Sound Business Strategy (in Millions) * Excludes $9.8 million at June 2008, and $10.1 million at March 31, 2008, of total capitalized
Slide 27: Selected Financial Highlights
Quarter Ended $1.55 $1.64 Earnings Per Share $87,542 $84,776 Net Earnings $121,158 $92,717 Net Cash from Operations $111,543 $129,657 Capital Expenditures $305,482 $340,054 Revenues 6/30/07 6/30/08 (in Thousands, Except Per Share Data) SELECTED FINANCIAL SELECTED FINANCIAL HIGHLIGHTS HIGHLIGHTS (in
Slide 28: Significant Earnings Growth
$0.00 $2.00 $4.00 $6.00 $8.00 Fiscal 2004 Fiscal 2005 Fiscal 2006 Fiscal 2007 Fiscal 2008 58% Four-Year Compounded Annual Earnings Growth Rate $1.03 $1.78 $3.33 $5.94 ** EPS in Fiscal 2004 is exclusive of the $.30 per share after tax impairment charge. EPS in Fiscal 2006 is exclusive of the $.74 per
Slide 29: Returning Value to Shareholders
Current repurchase authority of $200 MM Since 8/05, have repurchased 9.5 MM shares for $516.2 MM, ($54.57 per share) Recent dividend declaration increased from $.15/share/quarter to $.25/share/quarter One of eight OSX companies paying dividends Current 1.8% yield (highest among OSX companies) RETURN
Slide 30: Financial Strategy
Renew Fleet Maintain Financial Strength Deliver Results Financial Strategy Financial Strategy Focused on Long Term Shareholder Value Focused on Long Term Shareholder Value Renew Fleet Maintain Financial Strength Deliver Results
Slide 31: Bank of America 38th Annual Investment Conference
September 15, 2008 September 15, 2008 Bank of America 38 Annual Bank of America 38 Annual Investment Conference Investment Conference th th J. J. Keith Keith Lousteau Lousteau – – CFO, CFO, Executive Executive Vice Vice President President and and Treasurer Treasurer Joseph Joseph M. M. Bennett Benn
Slide 32: Appendix
APPENDIX APPENDIX
Slide 33: International Vessels Dayrates and Utilization
6/05 9/05 12/05 3/06 6/06 9/06 12/06 3/07 6/07 9/07 12/07 3/08 6/08 $100 change in dayrate = $10.4M in revenue 1% change in utilization = $14.6M in revenue * Dayrate and utilization information is for all classes of vessels operating international. 40% 50% 60% 70% 80% 90% $4,000 $5,000 $6,000 $7,000
Slide 34: International Vessels Dayrates
$4,000 $5,000 $6,000 $7,000 $8,000 $9,000 $10,000 $11,000 $12,000 $13,000 $14,000 $15,000 $16,000 $17,000 3/05 6/05 9/05 12/05 3/06 6/06 9/06 12/06 3/07 6/07 9/07 12/07 3/08 6/08 * Dayrate information is for all classes of vessels operating international. Traditional Vessels New Vessels INTERNATIONA
Slide 35: Domestic Vessel Dayrates
0% 20% 40% 60% 80% 100% 120% 140% Fiscal 2005 Fiscal 2006 Fiscal 2007 Fiscal 2008 Total Growth Percentage From FY’04 through FY’08 Total Growth 136% DOMESTIC VESSEL DOMESTIC VESSEL DAYRATES DAYRATES Total Growth Percentage From FY’04 through FY’08 Total Growth 136%
Slide 36: Domestic Vessels Dayrates and Utilization
$100 change in dayrate = $1.2M in revenue 1% change in utilization = $2.4M in revenue * Dayrate and utilization information is for all classes of vessels operating in the U.S. 3/05 6/05 9/05 12/05 3/06 6/06 9/06 12/06 3/07 6/07 9/07 12/07 3/08 6/08 DOMESTIC VESSELS DOMESTIC VESSELS Dayrates and Util
Slide 37: Domestic Vessel Dayrates
$3,000 $5,000 $7,000 $9,000 $11,000 $13,000 $15,000 $17,000 3/05 6/05 9/05 12/05 3/06 6/06 9/06 12/06 3/07 6/07 9/07 12/07 3/08 6/08 * Dayrate information is for all classes of vessels operating in the U.S. Traditional Vessels New Vessels DOMESTIC VESSEL DOMESTIC VESSEL DAYRATES DAYRATES
Slide 38: Superior Operating Capabilities Drive Our Competitive Advantage
– Safety-oriented culture – Deep knowledge of customer needs – Worldwide market presence (over 60 countries) – Long-term relationships with major operators (Over 200 customers) – Most new vessels in industry – Wide range of equipment types – “Lean” operations and overhead – Aggressive construction c
Slide 39: Vessel Acquisition Alternatives
Considerations : : Built to Tidewater quality standards 18 + months to delivery Potential shipyard backlog Contract terms (e.g., fixed price, LDs, etc.) Resource requirements to oversee construction Considerations : : Quality of equipment Existing contracts Potential synergies Potential divestiture
Slide 40: Considerations in Designing Our Optimal Vessel Mix
Custom/ Specialized Standardized Small Ultra big Renew existing Expand to niche markets Drilling, production Cycle timers Invest across cycle *Arrows are illustrative of Tidewater’s current views; they should not be interpreted as excluding other points on the continuums in the future. Subsea, main-
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