Tidewater Inc. · NYSE:TDW
Tidewater — Pareto Securities Oil & Offshore Conference 2018
41 slides from Tidewater's conference presentation, Sep 13, 2018
Slide 1: Pareto Securities Oil & Offshore Conference 2018
Pareto Securities Oil & Offshore Conference 2018 John Rynd Chief Executive Officer September 13, 2018
Slide 2: Forward-Looking Statements
FORWARD-LOOKING STATEMENTS In accordance with the safe harbor provisions of the Private Securities Litigation Reform Act of 1995, Tidewater and GulfMark note that certain statements set forth in this presentation provide other than historical information and are forward looking. The unfolding of fut
Slide 3: Tidewater overview
Tidewater overview Founded in 1955 – designed the first OSV as we know it Financial restructuring completed July 31, 2017 NYSE-traded Securities (at 07 Sep 2018 close) • Common Stock – TDW $30.79 • Series A Warrants – TDW WS.A $4.15 • Series B Warrants – TDW WS.B $3.35 Market Cap (at 07 Sep 18 close
Slide 4: Best-positioned to navigate a challenging market
Best-positioned to navigate a challenging market Safety Leadership Trusted Partner • TRIR in FY2017 lower than last five years’ Committed to Compliance • 60+ years experience in global OSV average market • Highly experienced management team Cost Management Global Footprint • Vessel opex down > 50% a
Slide 5: An unwavering commitment to safety leadership
An unwavering commitment to safety leadership Total Recordable Incident Rates CY 2007-2017 (per 200,000 Man Hours) TRIR = Sum of LTA’s and Recordables x 200,000 divided by Man Hours Worked 1.00 0.90 0.5 0.80 1.0 0.0 0.70 0.14 0.60 10 year average 0.50 0.40 0.30 0.20 0.10 0.00 CY 2007 CY 2008 CY 2009
Slide 6: The largest global OSV operator
The largest global OSV operator Vessel Count (AHTS & PSVs) as of June 30, 2018 PF Tidewater 245 245 273 OSVs Total Fleet Incl. Bourbon 185 All Vessel Types Tidewater 180 Chouest 164 SolstadFarstad 113 Swire 68 Gulfmark Offshore 65 Hornbeck 63 Topaz 53 Harvey Gulf 50 Seacor 48 Maersk 44 Avg. All Othe
Slide 7: Best positioned to participate in market recovery - globally
Best positioned to participate in market recovery - globally 173 total active vessels with average vessel age of 9.2 years as of June 30, 2018. Europe & Mediterranean Sea 35 17 17 1 9.1 yrs Avg. Age Other Middle East & Asia Pacific Americas 45 38 1 10 West Africa 22 16 14 55 4 Deepwater (TDW) Tidewa
Slide 8: Financially positioned for the eventual upturn
Financially positioned for the eventual upturn Cash & Equiv.: Total Debt: Book Equity: >$464 million $444 million ~$1 billion Debt Maturity: Total Debt / Cap: Net Debt/Net Cap: A. ~$350 million senior secured notes due 2022 31% 0% B. ~$90 million export credit backed debt amortizes over ~10 yrs. As
Slide 9: Highest market cap and lowest leverage in the OSV sector
Highest market cap and lowest leverage in the OSV sector ($mm) 1,500 $1,293 1,200 900 600 $955 300 $463 $441 $394 $338 $281 $70 $51 $41 $32 $213 $211 $177 $25 -- Pro FormaTidewater Inc SEACOR PF Tidewater Marine Bourbon Corp. PACC Offshore Holdings Inc GulfMark Services Holdings Offshore, Inc. DOF A
Slide 10: Working offshore rig count remains the primary OSV market driver
Working offshore rig count remains the primary OSV market driver 450 400 Overall working rig count down 350 Jackups ~40% from 2H 2014 peak to 428 current working rigs 300 290 Consensus outlook assumes slow recovery in jackup and floater Working Rigs 250 Floaters market continuing through 2H19 200 Co
Slide 11: What will OSV market equilibrium look like?
What will OSV market equilibrium look like? Market equilibrium requires an increase in demand and a reduction in supply 4,000 9.00 Working Rigs 8.3 OSV Global Population 8.0 1,000 vessels 3,500 8.00 +15 years old OSV/Working Rig Ratio 6.6 7.00 150 New 200 vessels < 15 yrs 3,000 Without ~550 Vessel d
Slide 12: Based on adjusted supply, OSV market is likely tighter than it appears
Based on adjusted supply, OSV market is likely tighter than it appears OSV supply, demand and fleet utilization 3500 2001 - 2020E 1 94% 0.9 93% 3000 89% 91% 91% 87% 87% 88% 87% 87% 85% 86% 86% 85% 85% 0.8 2500 76% 0.7 74% OSV fleet utilization 0.6 2000 62% 63% Rig # of vessels 59% 0.5 Support Demand
Slide 13: Tidewater vessel trends suggest early stages of OSV recovery
Tidewater vessel trends suggest early stages of OSV recovery Fleet Utilization (2014 – 2018 YTD) 90% 86% 84% 83% 83% 81% 76% 77% 78% 77% 78% 80% 75% 76% 74% 73% 72% 74% 81% 80% 79% 70% 79% 69% 70% 71% 69% 60% 66% 58% 50% 56% 54% 49% 48% 40% 44% 45% 44% 43% 41% 43% 30% 20% 10% 0% Qtr 1 Qtr 2 Qtr 3 Qt
Slide 14: Go forward strategy
Go forward strategy Leadership in safety, compliance and operational excellence Protect and preserve strong liquidity position Rationalization of fleet and cost structure provide scope for margin expansion in the upturn Focused on organic growth opportunities (reactivations) and M&A Deliver best-in-
Slide 15: Tidewater Inc. Worldwide Headquarters
TIDEWATER INC. Worldwide Headquarters 6002 Rogerdale Road Suite 600 Houston, Texas 77072 USA P: +1 713 470 5300 www.tdw.com
Slide 16: Appendix I – Supporting Information
Appendix I – Supporting Information
Slide 17: Young, modern fleet compares favorably to peers
Young, modern fleet compares favorably to peers Tidewater’s Active Fleet Worldwide OSV Fleet As of June 30, 2018 Estimated as of June, 2018 30 350 141 8.7 300 3,500 16% 28% 25 Active Years Avg Approx. Vessels in Vessels Est. to be Vessels Est. to be Vessels Age the Global Fleet 25+ Years Old 15+ Yea
Slide 18: Vessel revenue & vessel operating margin, 2008-2018
Vessel revenue & vessel operating margin, 2008-2018 Prior peak period (2008) averaged quarterly revenue of $334M, quarterly operating margin of $500 $168.6M at 50.4% 54% 50.0% $400 51% 48% 48% 45% 45% 44% 42% 42% 41% $300 $300 million Millions 34% 35% 31%30% $200 25% $150 million 19% $100 $- Q1 Q2 Q
Slide 19: Tidewater vessel fleet to be largely driven by growth in offshore working rig activity
Tidewater vessel fleet to be largely driven by growth in offshore working rig activity Fleet Status vs. Offshore Working Rig Count 300 2014-2018 YTD 800 16 13 14 15 18 700 682 27 250 661 664 674 44 649 57 73 604 87 600 576 101 200 115 112 110 530 106 89 500 Tidewater Vessels 487 79 460 64 Working Ri
Slide 20: Vessel trends – deepwater PSVs
Vessel trends – deepwater PSVs Q2 2018 $60,000 300 Avg Day Rate: $11,737 Utilization: 66% $50,000 250 $40,000 200 $30,000 150 $20,000 86 89 88 90 90 91 92 92 92 91 100 81 84 77 80 80 78 69 73 75 76 76 66 62 54 55 57 49 51 44 45 47 $10,000 40 43 50 34 38 29 32 25 25 25 25 28 $0 - Q1 Q2 Q3 Q4 Q1 Q2 Q3
Slide 21: Vessel trends – AHTS
Vessel trends – AHTS Q2 2018 $60,000 300 Avg Day Rate: $12,330 Utilization: 44% $50,000 250 $40,000 200 $30,000 150 $20,000 100 $10,000 50 8 9 9 11 11 11 11 11 11 11 11 11 11 11 11 11 11 12 12 12 12 12 12 12 12 12 12 12 12 12 12 12 12 12 9 9 5 5 5 5 5 6 $0 - Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1 Q2
Slide 22: Vessel trends – towing supply
Vessel trends – towing supply $60,000 Q2 2018 300 Avg Day Rate: $9,877 Utilization: 51% $50,000 250 $40,000 200 $30,000 150 107 107 107 107 106 106 105 103 103 104 105 105 105 105 104 105 105 106 99 101 101 102 103 $20,000 88 93 94 100 83 85 85 78 81 81 68 63 59 61 51 54 57 46 47 49 $10,000 50 $0 -
Slide 23: Fleet renewal program completed in 2018
Fleet renewal program completed in 2018 Capex (USD $ in millions) ¹ 615 595 474 452 441 Final vessel under construction 354 357 364 delivered July 2018 235 194 25 4 2007 2008 2009 2010 2011 2012 2013 2014 2015 2016 2017 2018 (1) Values presented are on calendar basis Pareto Securities Oil & Offshore
Slide 24: Continuing to rationalize fleet to reduce costs and excess capacity
Continuing to rationalize fleet to reduce costs and excess capacity Tidewater Active vs Stacked Fleet Profile1 OSV Market Vessel Demolitions, AHTS and PSVs 2014 to 2018 YTD 2015 to 2018 YTD 300 140 120 16 120 250 57 Scrapping levels in 2017 the highest in at least 10 years 100 200 115 If 2018 annual
Slide 25: Fleet valuation post-fresh start accounting
Fleet valuation post-fresh start accounting Vessel NBV as of June 30, 2018 Vessel Count NBV Average Age Avg NBV / Vessel (in millions) (years) (in millions) Deepwater vessels PSVs > 3,800 DWT 41 $ 353.5 6.0 $ 8.6 PSVs < 3,800 DWT 37 $ 167.2 9.0 $ 4.5 Deepwater AHTS 9 $ 46.7 9.0 $ 5.2 87 $ 572.5 7.8
Slide 26: Appendix II – Tidewater/GulfMark Combination
Appendix II – Tidewater/GulfMark Combination
Slide 27: Tidewater / GulfMark Offshore Combination: Creates Global Offshore Leader
Tidewater / GulfMark Offshore Combination: Creates Global Offshore Leader Investor Presentation July 16, 2018
Slide 28: Forward-Looking Statements
FORWARD-LOOKING STATEMENTS In accordance with the safe harbor provisions of the Private Securities Litigation Reform Act of 1995, Tidewater and GulfMark note that certain statements set forth in this presentation provide other than historical information and are forward looking. The unfolding of fut
Slide 29: Transaction Summary
Transaction Summary Tidewater Inc. (“Tidewater”) and GulfMark Offshore, Inc. (“GulfMark”) have entered into a definitive agreement for Tidewater and GulfMark to combine in an all-stock transaction • Value to GulfMark equity holders is approximately $340 million based on TDW July 13 closing price of
Slide 30: Strong Strategic and Financial Rationale
Strong Strategic and Financial Rationale Combined company will be a global OSV leader Expands Tidewater’s position in the recovering North Sea region Accretive to fleet quality with the addition of 21 Tier 1 vessels • Combined company will own/operate 102 Tier 1 vessels* with an average age of appro
Slide 31: The Largest Global OSV Operator
The Largest Global OSV Operator Vessel Count as of March 31, 2018 PF Tidewater 245 Bourbon 185 Tidewater 180 Chouest 164 SolstadFarstad 113 Swire 68 Gulfmark Offshore 65 Hornbeck 63 Topaz 53 Harvey Gulf 50 Seacor 48 Maersk 44 Avg. All Others 5 All Others (~2,400 total vessels for 400+ owners) 0 50 1
Slide 32: Best Positioned to Participate in Market Recovery - Globally
Best Positioned to Participate in Market Recovery - Globally 173 total active vessels with average vessel age of 9.2 years as of June 30, 2018. Europe & Mediterranean Sea 35 17 17 1 9.1 yrs Avg. Age Tidewater Headquarters Other Area Operations GulfMark Headquarters Americas Area Operations 38 Middle
Slide 33: Transaction Adds High Quality, Tier 1 Assets
Transaction Adds High Quality, Tier 1 Assets 171 combined Other 102 Tier 1 vessels of which 20 are (Non-Tier 1) currently stacked Generally leveraged to Generally leveraged to drilling production & activity, with the greatest construction support opportunity for margin expansion activities Tidewater
Slide 34: Strongest Financial Position in the OSV Sector
Strongest Financial Position in the OSV Sector Combined company equity market capitalization is ~$1.25 billion, based on Tidewater’s closing stock price on July 13, 2018 Concurrent with closing, $100 mm in outstanding GulfMark debt is expected to be repaid • Transaction adjustments include impact of
Slide 35: Significant Cost Synergies
Significant Cost Synergies Relative to $145 million of Pro Forma combined LTM G&A, combined G&A Profile company’s run-rate annual G&A is expected to approximate $100 million Relative to LTM, Tidewater and GulfMark expected to achieve $33 $145 $112 $100 ongoing, stand-alone cost million million reduc
Slide 36: Significant Leverage to Offshore Recovery
Significant Leverage to Offshore Recovery ($ in millions) 1,000 Vessel Operating Margin Combined vessel operating margin of ~$127 $926 900 million for the 12 months ending March 31, 2018 800 Market recovery assumes utilization improves to 85% for the active vessels (82 700 Tier 1 and 91 active non-T
Slide 37: Highest Market Cap and Lowest Leverage in the OSV Sector
Highest Market Cap and Lowest Leverage in the OSV Sector ($mm) 1,500 $1,293 1,200 900 600 $955 300 $463 $441 $394 $338 $281 $70 $51 $41 $32 $213 $211 $177 $25 -- Pro FormaTidewater Inc SEACOR PF Tidewater Marine Bourbon Corp. PACC Offshore Holdings Inc GulfMark Services Holdings Offshore, Inc. DOF A
Slide 38: Anticipated Timing
Anticipated Timing July 16, 2018 • Announcement August 2018 • Tidewater and GulfMark to file Form S-4/Joint Proxy Statement Q4 2018 • Stockholder approval and projected transaction close Tidewater / GulfMark Offshore Combination | ©2018 Tidewater Inc. 10
Slide 39: Strong Strategic and Financial Rationale
Strong Strategic and Financial Rationale Combined company will be a global OSV leader Expands Tidewater’s position in the recovering North Sea region Accretive to fleet quality and 2019 EBITDA All-equity transaction preserves quality balance sheet and strong liquidity position Significant cost and o
Slide 40: No Offer or Solicitation; Additional Information and Where to Find It
NO OFFER OR SOLICITATION This announcement is for informational purposes only and is neither an offer to purchase, nor a solicitation of an offer to sell, any securities or the solicitation of any vote in any jurisdiction pursuant to the proposed transactions or otherwise, nor shall there be any sal
Slide 41: Tidewater Inc. Worldwide Headquarters
TIDEWATER INC. Worldwide Headquarters 6002 Rogerdale Road Suite 600 Houston, Texas 77072 USA P: +1 713 470 5300 www.tdw.com
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