FINC 225-1203A-03: Financial Statement Analysis
Phase V IP: Ethics and the SEC
Stacye Bolden-Gunner (13319239)

According to Tidewater Marine, LLC which is viewed as a leader in the oil and gas service industry, Tidewater recognizes its responsibility to give back to the community, and encourages its employees to make a difference in the neighborhoods where they live. The company supports a broad range or organizations that are working to build a safer and healthier future; we salute the work of these groups and urge everyone to get involved in building a better tomorrow on land and at sea.

Some of the most popular organizations that has benefited from Tidewater, LLC’s support are: * The American Cancer Society * Boys Hope Girls Hope * Coast Guard Foundation * Crimestoppers, Inc. * National Multiple Sclerosis Society * Spindletop Charities, Inc. * The Salvation Army * United Way

I feel that listing Tidewater’s stance on helping communities both domestic and worldwide gives a good example of how promoting not only the company’s stance on volunteering both as a company as well as encouraging each employee to do their part to help the community. This shows how committed Tidewater is to complying with the Company’s Code of Business Conduct and Ethics.

On the company’s website, Tidewater directs its employees to report compliance issues and violations of the Company’s Code of Business Conduct and Ethics as follows: * Employee’s are encouraged to direct questions or report violations to your supervisor. * If you believe your questions or concerns have not been addressed satisfactorily by your supervisor or if you are uncomfortable discussing questions or concerns with or reporting violations to your supervisor, you should contact the Company’s Chief Compliance Officer, Bruce Lundstrom, by either phone or email. * The employee can also submit a report at the Company’s multi-language compliance website which can be submitted anonymously at www.tdwcompliance.com. All communications with the Chief Compliance Officer will be handled with discretion.

The website also states that complaints or concerns regarding accounting, internal accounting controls or auditing matters will be reviewed by auditing matters will be reviewed by the Audit Committee of the Company’s Board of Directors, in consultation with the Company’s Chief Compliance Officer. Employees are expected to cooperate in internal investigations of misconduct and violations of this Code. Company policy prohibits retaliation against person making reports in good faith.

From a personal standpoint, I feel that safety should be viewed as the most important of Corporate Social Responsibility. Taking the recent BP tragedy, I feel that as a whole the oil and gas industry failed to exhibit strong Corporate Social Responsibility. Although there was failure on other company’s Transocean and Halliburton, the main focus was placed on BP and when the oil spill is brought up in general conversation, the only company named when it comes to fault is BP. Even from the standpoint of restitution, BP is the only corporation that has publically offered to “right the wrong” by issuing financial assistance to anyone effected by the spill. Claims for financial assistance were not only accepted from oil and gas workers, but also from fishermen, and tourist based jobs that lost revenue due to the impact of the oil spill. To this day the economy is still affected by the tragedy and though some improvement has been made, it will be years before the economy will be in a position to actually stimulate a strong amount of growth that can be deemed as economic recovery.

Tidewater Marine, LLC’s website states that the company’s goal is to provide exceptional service to its customers while maintaining safe and environmentally responsible operations for its employees. And this proven by looking at the many awards the company has received over the years. A timeline of these awards are: * 2011 – Tidewater Marine, LLC was presented with an outstanding achievement award from the United States Eighth Coast Guard District. This award was given to crew of M/V Damon Bankston for their heroic search and rescue efforts immediately following the catastrophic explosion and fire onboard the Deepwater Horizon. * 2010 – The Chamber of Shipping of America presented Tidewater Marine, LLC with the 2010 Top Honor Safety Achievement Award. * 2010 – McDermott presented Tidewater Marine, LLC with the best third party vessel operator for its safest and most reliable vessels with impeccable services for two of its vessels, M/V Carlson Tide and M/V Hanks Tide. * 2010 – Tidewater Marine, LLC’s Captain Alwin Landry received the Shipmaster of the Year Award for his life saving action during the Deepwater Horizon tragedy presented by Lloyd’s List. The purpose of the Shipmaster of the Year Award is to recognize and value the ultimate responsibility of the Master for the safety of the ship, her crew and her cargo as well as the safety of life at sea. * 2010 – Tidewater Marine, LLC was presented with an Award of Excellence for its conceptual design and key messaging to its target audience, investors, presented by the Business Marketing Association (BMA) – Houston, Texas chapter.

For many years Tidewater Marine, LLC has shown numerous levels of improvement and leadership in the field of safety and communication with its employees and customers. Having this strong background in employee safety and security as well as being a dependable and economical structure for its current and future clients and future investors shows that commitment to CSR is a goal that Tidewater Marine, LLC will always meets.

Viewing the company from a financial standpoint you can see that the company is very profitable. Tidewater Marines maintains a financial position that coincides with the strict SEC guidelines. A direct quite from the company’s website states:

“Capitalizing on the turning tide, Tidewater will be navigating a more favorable environment than we experienced during the past three years. Having remained disciplined throughout that rough period, Tidewater is well positioned to grow by adhering to its long-term strategy and core values the company has held for decades. Our strategy and value include focusing on safe operations, expanding and diversifying our vessel fleet, upgrading our capabilities and global reach and maintain a solid financial foundation. The successful execution of our strategy, together with the more favorable industry trends we see ahead, should allow Tidewater to continue delivering premier service to our clients; provide a safe working environment for our employees; and generate superior returns for our shareholders.
The company’s letter to its shareholders states:

The tide is turning for Tidewater. We are on the cusp of a turnaround for our industry and our business. We anticipated that the offshore vessel industry, and Tidewater’s financial results, would bottom in the first half of last year and rebound off the bottom during the second half. Mariners and sailors know that when the tide turns there is first a slack tide before an ebbing tide changes to a flood tide. We are at slack tide, with the positive turn at hand.

Tidewater faces continuing challenges – among them increased demand by host countries for greater “local content.” Some are often beyond our control, be they geopolitical, economic, or environmental.

As we demonstrated over the past industry cycle that was marked by many challenges – the Arab Spring, the Macondo disaster with the resulting Gulf of Mexico moratorium, and the worst economic crisis since the Great Depression – we were and are prepared to adjust our business plans in order to deliver superior financial performance for the times at hand. During the past year, our safety performance was the second best year in company history. Our vessel revenues exceeded $1 billion for the sixth consecutive year, and importantly, revenue increased over the prior year, though marginally. Our fleet utilization rate improved and average fleet day rates also increased. Our cash vessel operating margin of $422.3 million also exceeded that of the prior year. Among other things, these results reflect improving business fundamentals. The number of working offshore rigs improved last year by 13 percent. During the year, Tidewater added 24 new vessels to our industry-leading, newly-constructed fleet, setting the stage for continued earnings growth. These new vessels, plus the 25 in our delivery pipeline, reflect our confidence in the growth prospects for our industry and our commitment to continue to be able to earn a meaningful share of that future work. Recapping our efforts to promote Tidewater’s future, we have added well over 200 new vessels to our fleet since the year 2000, which contributed 85.9 percent of our total vessel revenue and 91.4 percent of our cash vessel operating margin in fiscal 2012. We are not done yet. Additional fleet expansion will provide future earnings growth potential.

During the past year, Tidewater directly entered the Saudi Arabian offshore market, a new growth opportunity for the company. We are performing well there now after some start-up issues and are optimistic that entry into this market provides significant opportunity for an expanded presence within it. We also continue following our oil and gas company clients into new areas of hydrocarbon exploration activity, such as East Africa with its significant new discoveries, where we have quickly established an important position. We maintain our strong presence in most of the more mature markets, which, too, seem poised for increased activity.

Tidewater’s focus is solidly on earnings growth. We are encouraged by our global clients’ planned E&P spending increase this year and what should be additional increases in the future. That spending has boosted the working offshore rig count to a high level and has encouraged the drilling industry to accelerate building new offshore rigs, employment of which should boost future global vessel demand. For the better part of the last decade, Tidewater has been replacing and enhancing the earnings power of its revenue generating fleet of vessels. While maintaining our strong financial position with a 20 percent net debt to net capitalization ratio and over $750 million of liquidity available at fiscal year end, Tidewater now stands prepared to grow earnings significantly by incremental investment, either in vessels, fleets, our own shares, or other opportunities.

As we transition our executive leadership team, I thank you for the privilege of playing a part in constructing the future of this entity, and I am optimistic that the future, built by our employees, their planning, dedication and hard work, will enable Tidewater to deliver outstanding operational and financial results for our clients and shareholders. The company’s best days are ahead, as the tide turns.

DEAN E. TAYLOR
Chairman, President and
Chief Executive Officer
Dean E. Taylor
Chairman, President and Chief Executive Officer

References:

www.tdwcompliance.com
www.tdw.com