Tidewater Inc. · NYSE:TDW
Tidewater — Johnson Rice Energy Conference 2009
42 slides from Tidewater's conference presentation, Oct 8, 2009
Slide 1: Tidewater - Johnson Rice Energy Conference
TIDEWATER October 6, 2009 Dean E. Taylor Chairman, President & CEO Quinn P. Fanning Executive Vice President, CFO Joseph M. Bennett Executive Vice President and Chief Investor Relations Officer Exhibit 99.1 TIDEWATER JOHNSON RICE ENERGY CONFERENCE JOHNSON RICE ENERGY CONFERENCE Dean E. Taylor Chairm
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: Safety Record Rivals Leading Companies
0.00 0.25 0.50 0.75 1.00 2002 2003 2004 2005 2006 2007 2008 TIDEWATER DOW CHEMICAL DUPONT EXXON/MOBIL BP SAFETY RECORD RIVALS SAFETY RECORD RIVALS LEADING COMPANIES LEADING COMPANIES Total Recordable Incident Rates Calendar Years
Slide 4: A Reminder of Our Workplace
A REMINDER OF A REMINDER OF OUR WORKPLACE OUR WORKPLACE
Slide 5: Tidewater Today
5 Solid safety record – Unmatched (and growing) global footprint Entire fleet earning solid returns Strong balance sheet Continuing to invest in new vessels with expanded capabilities Track record of prudent capital management and of returning capital to shareholders TIDEWATER TIDEWATER TODAY TODAY
Slide 6: Our Strategy (Not much has changed!)
6 Culture is a competitive advantage Safety-oriented Deep knowledge of customer needs Aggressive management of operating and capital costs Maintain maximum financial flexibility to deal with uncertainties Selectively deploy cash to renew fleet with expanded capabilities Opportunistically utilize bal
Slide 7: Significant Earnings Growth
$0.00 $2.00 $4.00 $6.00 $8.00 Fiscal 2004 Fiscal 2005 Fiscal 2006 Fiscal 2007 Fiscal 2008 Fiscal 2009 50% Five-Year Compounded Annual Earnings Growth Rate ** 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 share after
Slide 8: Using Cash to Grow Our Business & Return to Shareholders
$0 $100 $200 $300 $400 $500 $600 $700 2000 2001 2002 2003 2004 2005 2006 2007 2008 2009 CAPX Dividend Share Repurchase (in millions) Over this ten year period, TDW invested $2.7 billion in CAPX ($2.3 billion in our new fleet), and paid out $355 million in dividends and $516 million through share rep
Slide 9: Strong Balance Sheet
+ $750 million of Available Liquidity at 6/30/09 (Cash plus $450m Revolver) $300 $300 Long-term Debt $2,245 $2,280 Stockholders’ Equity 2.1% 0% Net Debt to Total Cap $251 $315 Cash March 2009 June 2009 ($ in Millions) STRONG BALANCE SHEET STRONG BALANCE SHEET + $750 million of Available Liquidity at
Slide 10: Selected Financial Highlights
* Adjusted Net Earnings and Adjusted EPS for the quarter ended 6/30/09 excludes $47.7 million, or $0.93 per share, related to provision for Venezuelan operations ($ in Thousands, Except Per Share Data) Quarters Ended $1.64 $1.79 Adjusted EPS* $84,776 $92,222 Adjusted Net Earnings* $90,997 $70,350 Ne
Slide 11: Selected Financial Highlights
* Cash Operating Margin % is defined as vessel revenue less vessel OPEX, divided by vessel revenue. ($ in Thousands, Except Per Share Data) Quarters Ended 46.2% 50.5% Cash Operating Margin %* $176,728 $153,651 Vessel OPEX $35,108 $34,388 G&A expense $10,387 $12,538 Gain on asset disp. $328,371 $310,
Slide 12: Fleet Cash Operating Margins
$0 $100 $200 $300 $400 $500 $600 $700 2000 2001 2002 2003 2004 2005 2006 2007 2008 2009 Fiscal Years Note: Cash operating margins are defined as vessel revenue less vessel operating expenses. New Vessels Traditional Vessels FLEET CASH FLEET CASH OPERATING MARGINS OPERATING MARGINS 50% 40% 30% 20% 10
Slide 13: Fleet Renewal Provides Scope for Margin Growth
0 50 100 150 200 Q1FY10 Operating Margin $156.8 ($ in millions) FLEET RENEWAL FLEET RENEWAL PROVIDES SCOPE FOR PROVIDES SCOPE FOR MARGIN GROWTH MARGIN GROWTH Traditional Vessels (37%) New Vessels (63%)
Slide 14: Fleet Renewal Provides Scope for Margin Growth
0 50 100 150 200 Q1FY10 Operating Margin Vessel Disposals $156.8 Assume ~ 2/3 of traditional vessels are disposed of over the next few years ($ in millions) ($34.9) FLEET RENEWAL FLEET RENEWAL PROVIDES SCOPE FOR PROVIDES SCOPE FOR MARGIN GROWTH MARGIN GROWTH
Slide 15: Fleet Renewal Provides Scope for Margin Growth
0 50 100 150 200 Q1FY10 Operating Margin Vessel Disposals CIP $156.8 46 vessels currently under construction Analysis assumes: Average dayrate of $20,000/day Utilization of 90% Cash operating margin of 55% ($ in millions) ($34.9) +$41.5 FLEET RENEWAL FLEET RENEWAL PROVIDES SCOPE FOR PROVIDES SCOPE F
Slide 16: Fleet Renewal Provides Scope for Margin Growth
0 50 100 150 200 Q1FY10 Operating Margin Vessel Disposals CIP +5% Utilization +$1,000 Dayrate $156.8 $194.8 Near-term vessel retirements followed by market upturn should positively impact utilization and dayrates Analysis assumes +5% on utilization and +$1,000 on average dayrates for existing vessel
Slide 17: Fleet Renewal Provides Scope for Margin Growth
0 50 100 150 200 Q1FY10 Operating Margin Vessel Disposals CIP +5% Utilization +$1,000 Dayrate $156.8 $194.8 This information is not meant to be a prediction of future quarterly performance, but simply an indication of quarterly operating margin impacts resulting from future fleet additions and reduc
Slide 18: International Strength
18 Unique global footprint; 50+ years of Int’l experience Unmatched scale and scope of operations 43 of 45 of current newbuilds in Int’l yards Longer contracts, better utilization, higher dayrates for new & traditional vessels operating in Int’l markets Solid customer base of NOC’s and IOC’s INTERNA
Slide 19: International Strength: Active Vessels by Region
Active Vessel Count By Region (excludes stacked vessels) North America 19 (6%) (6%) Europe/M.E. 37 (12%) (12%) Far East 45 (14%) (14%) West Africa 136 (43%) (43%) Central/South America 81 (25%) (25%) 94% International 6% Domestic (vs. 65% International and 35% Domestic ten years ago) North America 1
Slide 20: Vessel Population by Owner
Tidewater Competitor #2 Competitor #3 Competitor #4 Competitor # 5 Competitor #1 Avg. All Others (1,589 total vessels for 300+ owners) 277 92 83 72 64 61 5 (Includes AHTS and PSV’s only) (Includes AHTS and PSV’s only) VESSEL POPULATION VESSEL POPULATION BY OWNER BY OWNER Estimated as of June 200 9 E
Slide 21: Quality of Customer Base
NOC's 23% Others 37% Super Majors 40% Our top 10 customers (5 Super Majors, 4 NOC’s and one large independent) currently account for 60% of our revenue Our top 10 customers (5 Super Majors, 4 NOC’s and one large independent) currently account for 60% of our revenue CURRENT REVENUE MIX CURRENT REVENU
Slide 22: Growing Industry's Largest Fleet
Strive for a Balance Between Performance, Growth and Financial Strength Ability to support continued fleet renewal and growth Current environment will present opportunities to utilize our financial strength Funding with internal cash flow and available credit Always weigh build vs. buy criteria Stri
Slide 23: Largest New Fleet in the Industry
Vessel Commitments Jan. ’00 – June ’0 9 (1) Includes vessels added to the fleet financed by bareboat charter. (2) $2,372m funded through 6/30/09. *Excludes ENSCO fleet acquisition effected April 1, 2003. At 6/30/09, 147 new vessels in fleet with 5.0 year average age $1,360m 72 PSV’s $2,944m (2) 207
Slide 24: ...And Counting: Vessels Under Construction
Estimated delivery schedule – 22 remaining in FY’ 10, 9 in FY’ 11, 11 in FY’ 12 and 2 thereafter. CAPX of $272m remaining in FY’ 10, $153m in FY’ 11, $135m in FY’ 12 and $12m in FY’ 13 Building vessels worldwide Due diligence focused on yards Tidewater staff supervise on site Vessels Under Construct
Slide 25: Improving Average Age of Tidewater Fleet
Assumptions: 1) Average 45 vessel disposals per year in future (averaged 47 per year last three years). 2) Include 46 vessels under construction in year delivered plus additional newbuilds/acquisitions from approximately $500 million per year of future commitments. Tidewater is not committed to spen
Slide 26: Largest New Fleet in the Industry
Out With the Traditional – In With the New 0 100 200 300 400 500 Active Fleet Dispositions (A) Net new vessels added to the fleet since January 2000, including 45 vessels under construction at 6/30/09. 363 (B) 470 (C) 192 New Vessels (A) 381 Sold 89 Scrapped (C) 470 vessel dispositions generated $61
Slide 27: Expected Retirements Exceed New Deliveries
0 50 100 150 200 250 1965 1970 1975 1980 1985 1990 1995 2000 2005 Of the total 2,238 vessels, EXPECTED RETIREMENTS EXPECTED RETIREMENTS EXCEED NEW DELIVERIES EXCEED NEW DELIVERIES (Includes AHTS and PSV’s only) Estimated as of June 200 9 As of 6/30/09, there are approximately 631 additional AHTS and
Slide 28: Financial Strategy
Deploy Capital Deliver Results Maintain Financial Strength FINANCIAL STRATEGY FINANCIAL STRATEGY Deploy Capital Deliver Results Maintain Financial Strength Focused on Long Term Shareholder Value Focused on Long Term Shareholder Value
Slide 29: Tidewater - Johnson Rice Energy Conference
TIDEWATER October 6, 2009 Dean E. Taylor Chairman, President & CEO Quinn P. Fanning Executive Vice President, CFO Joseph M. Bennett Executive Vice President and Chief Investor Relations Officer TIDEWATER JOHNSON RICE ENERGY CONFERENCE JOHNSON RICE ENERGY CONFERENCE Dean E. Taylor Chairman, President
Slide 30: Appendix
TIDEWATER TIDEWATER APPENDIX APPENDIX
Slide 31: Many Unanswered Questions at This Time
31 Impacts of current financial crisis and global recession Rig and vessel construction backlogs Financial health of shipyards and competitor Future oil and gas prices E&P spending Obama administration’s approach to energy and tax policy Vessel utilization and pricing • • MANY UNANSWERED MANY UNANSW
Slide 32: TDW's Financial Stability During Trying Times
32 Cash on the balance sheet Low debt, and no net debt at 6/30/09 Undrawn, new, expanded credit facility Manageable new construction backlog Solid customer base (large exposure to NOC ’ s and IOC’s) Good contract coverage TDW TDW ’s ’s FINANCIAL FINANCIAL STABILITY STABILITY DURING TRYING TIMES DURI
Slide 33: Vessel / Rig Ratio
33 2,238 Global Vessel Count (AHTS & PSV only) 550 Global Working Rigs 4.1 Vessel to Rig Ratio 158 New rigs under construction VESSEL / RIG RATIO VESSEL / RIG RATIO Source: ODS-Petrodata and Tidewater Estimated as of June 200 9 Current Vessel Demand Dynamics: Possible Incremental Vessel Demand: (???
Slide 34: Working Rig Counts
Jackups Semi Drillships June 2008 379 145 30 June 2009 317 151 38 Variance (62) 6 8 34 GOM accounts for 40 of the 62 working jackup count variance GOM accounts for 40 of the 62 working jackup count variance Source: ODS-Petrodata and Tidewater Source: ODS-Petrodata and Tidewater WORKING RIG COUNTS WO
Slide 35: Rigs Contracted by Our Top 10 Customers
* PEMEX alone has 31 of the 84 jackups Jackups Semi Drillships June 2009 working rigs 317 151 38 Working for top 10 customers 84 76 24 RIGS CONTRACTED BY RIGS CONTRACTED BY OUR TOP 10 CUSTOMERS OUR TOP 10 CUSTOMERS (Estimated as of June 2009) (Estimated as of June 2009) * PEMEX alone has 31 of the 8
Slide 36: International Vessels Dayrates and Utilization
6/06 12/06 6/07 12/07 6/08 12/08 6/09 36 $100 change in dayrate = $9.4M in revenue 1% change in utilization = $15.7M in revenue * Dayrate and utilization information is for all classes of vessels operating international. 50% 60% 70% 80% 90% $4,000 $6,000 $8,000 $10,000 $12,000 $14,000 INTERNATIONAL
Slide 37: International Vessel Dayrates
* Dayrate information is for all classes of vessels operating internationally. 37 $3,000 $5,000 $7,000 $9,000 $11,000 $13,000 $15,000 $17,000 $19,000 Jun- 06 Dec- 06 Jun- 07 Dec- 07 Jun- 08 Dec- 08 Jun- 09 New Vessels Traditional Vessels INTERNATIONAL INTERNATIONAL VESSEL VESSEL DAYRATES DAYRATES
Slide 38: Domestic Vessels Dayrates and Utilization
6/06 12/06 6/07 12/07 6/08 12/08 6/09 38 * Dayrate and utilization information is for all classes of vessels operating in the U.S. 40% 50% 60% 70% 80% 90% $4,000 $6,000 $8,000 $10,000 $12,000 $14,000 $16,000 DOMESTIC VESSELS DOMESTIC VESSELS Dayrates and Utilization Dayrates and Utilization Utilizat
Slide 39: Domestic Vessel Dayrates
$3,000 $5,000 $7,000 $9,000 $11,000 $13,000 $15,000 $17,000 $19,000 Jun-06 Dec-06 Jun-07 Dec-07 Jun-08 Dec-08 Jun-09 * Dayrate information is for all classes of vessels operating in the U.S. 39 New Vessels Traditional Vessels DOMESTIC VESSEL DOMESTIC VESSEL DAYRATES DAYRATES
Slide 40: Superior Operating Capabilities Drive Our Competitive Advantage
40 – 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 constructio
Slide 41: Vessel Acquisition Alternatives
41 Usually one-off purchases, often to match specific client needs Immediate delivery Entry price at “full” market rate 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
Slide 42: Considerations in Designing Our Optimal Vessel Mix
42 Custom/ Specialized Standardized Small Ultra big Renew existing Expand to niche markets Drilling, production Subsea, maintenance, LNG etc. Cycle timers Invest across cycle *Arrows are illustrative of Tidewater’s current views; they should not be interpreted as excluding other points on the contin