Welcome to the Fiscal 2017 Second Quarter Earnings Conference Call. My name is Nicole, and I'll be your operator for today's call. At this time, all participants are in a listen-only mode. Later, we will conduct a question-and-answer session. Please note that this conference is being recorded. I will now turn the call over to Joe Bennett. Mr. Bennett, you may begin.

Thank you, Nicole. Good morning, everyone, and welcome to Tidewater's second quarter fiscal 2017 earnings results conference call for the period ended September 30, 2016. 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, our Executive Vice President and CFO; and Bruce Lundstrom, our Executive Vice President, General Counsel & Secretary. We will follow our usual conference call format. Following our opening 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 then we'll open the call for your questions. During today's conference call, we may make certain comments that are forward-looking 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 statement 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 markets closed, we reported a net loss for our second quarter of fiscal 2017 ended September 30, 2016, of $178.5 million, or $3.79 per common share, inclusive of a number of items highlighted in our quarterly earnings press release. The current quarter includes an after tax non-cash asset impairment charge of $2.75 per share, along with a $0.06 per share after-tax foreign exchange loss, which impact two line items as noted in the press release. Adjusted for these items, the per share loss for the quarter would have been $0.98. In a minute, Quinn will provide you details about the various factors that impacted our second fiscal quarter's results. The blizzard of negative earnings being reported by Tidewater and most of our peers throughout the offshore industry is a reflection of the severity and duration of this downturn. When the industry decline commenced in mid-2014, we commented that the industry would need to learn to live in a world characterized by lower for longer commodity prices. We recognized that offshore drilling activity would be significantly curtailed by these dramatically lower oil prices, which affected both our near-term business outlook as our customers slashed their cash outlays to match their reduced cash flow from operations, as well as our intermediate outlook as our customers began to question their ability to achieve profitability on new exploration and development projects. These conditions forced offshore E&P operators to rapidly cut their costs by stopping work and/or renegotiating vendor contracts at sharply lower prices. The operators also delayed starting new projects, which often meant deferring the contracting of new offshore drilling rigs or exercising early termination provisions on others. Despite a brief recovery in oil prices this year and growing optimism that OPEC will…

Thank you, Jeff. Good morning, everybody. As you know we issued our earnings press release after the market closed yesterday. We plan to file our quarterly report on Form 10-Q through the EDGAR filing service sometime later today. As Jeff noted, we reported loss per diluted common share of $3.79 for the September quarter, which includes non-cash asset impairment charges and foreign exchange losses totaling $2.81 per share. Despite the pre-tax loss, results for the September quarter also reflect tax expense of approximately $3.5 million, primarily due to revenue based taxes in a number of international jurisdictions in which we operate. Results for the September quarter also reflect professional services costs related to our ongoing debt negotiations of approximately $3 million. Vessel revenue for the September quarter at approximately $139 million was down approximately $23 million or approximately 14% quarter-over-quarter. Approximately $11 million or about half of the quarter-over-quarter change reflects our stacking of previously active vessels that we expect to be underutilized in the coming quarters. Consistent with my comments in early August in regards to the June quarter, the quarterly trend in vessel revenue reflects a soft and choppy global offshore vessel market with too many vessels still chasing too few jobs. As Jeff noted, the trend in commodity prices has generally been constructive since the beginning of calendar 2016. But many of our customers remained on the sidelines in regards to new exploration and development spending. For now, growth appears to be less important to our customers than is cost cutting and cash flow at the offshore market and particularly the working offshore rig count is still struggling to find the bottom. Our focus has also been on cutting costs and cash flow recognizing the sustained growth will likely require future increase in offshore drilling activity and…

Thanks, Quinn. These are certainly trying times for everyone in the energy business; but for those of us in the offshore segment, conditions are particularly challenging because our business is so capital-intensive. On the other hand, the offshore market provides about a-third of the world's oil production; meaning, we are a viable and vital market segment. There are many potentially promising prospects still to be explored that offer the potential for boosting the offshore contribution to global oil reserves and future production. Therein lies specific challenges for the offshore industry, higher investment costs and longer cycle times. In both cases, we are encouraged by the recent announcements by a number of our customers of significantly reduced project breakeven costs and faster cycle times from drilling to producing. Those trends will give our customers more opportunities to return to work as global oil and gas prices move higher. The recent trend in oil prices has been impacted by the possibility of an OPEC agreement to limit the organization's total output later this month. That would come, at the same time, oil production in numerous basins around the world is falling as a result of the cutbacks in producers' capital spending over the past two years. This is a natural response to oil price volatility and industry spending cycles, and it forms the foundation for our belief that there will be an offshore drilling industry recovery. The problem is that the timing is uncertain, which means we must continue to be operationally and financially prepared to stay the course until the recovery becomes evident. We do recognize that a number of analysts expect that improving oil prices should lead to increased E&P spending as early as calendar 2017. However, our recovery in onshore E&P spending, especially in North American region is expected…

Thank you. Our first question comes from Turner Holm from Clarksons Platou Sec. Your line is open.

Hey. Good morning, gentlemen.

Hi, Turner.

Hey, there. So, I just wanted to ask about the extension, I guess, it's the topic on everybody's mind. You've been able to get the last couple extensions it seems like – well, it hasn't happened yet. Is there something different this time around or I mean, you mentioned maybe a little bit different outlook than maybe what you had a couple months ago when you'd gotten the previous extensions. Has there been maybe a hardening of positions or any insight you can provide there would be helpful.

Turner, I think as I said in my comments, you have to be respectful. We're not negotiating in public. I think what we've put out there is what's out there. We certainly like the rest of the industry, are looking at updated forecast and trying to do projections going forward. And I think as I said that when we did that, it certainly led us to the conclusion that there was additional work to be done in the negotiations and I think that's kind of where we're at.

Yeah. I understand that and I understand that you can't negotiate in public. But to raise the question and you guys have mentioned in some of your press releases as a potential possibility, I mean, why not just file, frankly? Is that the worst outcome for the company taken as a whole? If you do that, you might be able to maybe lower some of the debt, maybe get in some new capital, maybe take advantage of the distressed asset environment that you talked about in your commentary, Jeff. Is that the worst possible outcome is I guess what I'm asking and how do you see...

Turner, you're asking me to kind of expound upon all of the contingencies and the planning that we're doing in the negotiations. And you can keep asking the question and unfortunately I think you know what I have to say back to you. We are absolutely looking at what is the best outcome for the enterprise, okay, at the end of the day and that runs the gamut of potential outcomes. But we are not going to negotiate in public. I'm not going to have it teased out. That's not the right form for it; and again, I think you can respect that. Hopefully, you will and we can kind of go to the next question maybe.

I understand, Jeff. I appreciate it. I'm sure you understand it's also our job to ask the tough questions. So, anyways, thanks.

I get it. I understand it. I understand it. Just understand, we are doing everything we can to come out with what is the best outcome in this entire situation. And I would also say that this is not a unique Tidewater problem. This is an industry problem that is affecting pretty much everybody.

For sure, yeah, totally agreed. Okay. I appreciate your time, Jeff. Thank you very much.

Thanks, Turner.

Our next question comes from Gregory Lewis from Credit Suisse. Your line is open. Gregory Lewis - Credit Suisse Securities (USA) LLC (Broker): Hey. Thanks, guys.

Hey, Greg.

Hey, Greg. Gregory Lewis - Credit Suisse Securities (USA) LLC (Broker): I'm curious on both of your guys' view on this just because it was something – clearly, you guys are working hard. You've really shaved off a lot of OpEx; sequentially it was down pretty sharply. I guess as I think about going forward, how much of that was just a function of there's that many more idle vessels in the fleet and how much more is that really just being able to negotiate, whether it's from suppliers or crew, lower? And as we think about maybe costs over the next few quarters, could we see these kind of sequential drops or is it something where we're kind of at a flattening out point here over the next couple quarters?

Greg, I think those – number one, it's an excellent question, and I guess I'd answer it two different ways. The quarter-over-quarter change in operating expense was significant. It was kind of put in motion, the latter part of the last reported quarter as we assessed, particularly on the African coasts, what is the right number of vessels to keep in the spot market, and what is the right stacking strategy in order to maintain economic utilization, which as I said on a couple of different calls is circa 70% in our view. So, those are reactionary reductions in expense that we are humping it pretty hard in order to keep up with the revenue reality, but I wouldn't want you to have the impression that cost can go down quickly as we de-man vessels or defer maintenance, and they will, likewise go up pretty quickly in a stable or improving market, Jeff Gorski and myself and the rest of the executive management team has spent a lot of time looking at structural improvements, the cost structure such that we have scope for margin expansion and some future recovery. We have undertaken very serious supply chain initiatives, where we can hopefully, lock-in multi-year pursing economies in regards to repair and maintenance and similar things. We've also looked at the structure of the organization by combining areas and in some cases, the management structure sitting on top of the regional reporting segments, such that we can eliminate redundant management layers and still create an efficient organization that is responsive to market opportunities. So, we're doing all of the above, but I think even if you just look at the crew cost line on a quarter-by-quarter basis, 80% of the drop related to de-manning of vessels during this quarter and the latter part of the last quarter in response to current market. But we have also significantly reduced staffing levels onshore and offshore, cut wages, and as I mentioned, we have a pretty serious supply chain initiative that is ongoing that we hope will result in structural improvement in cost structure and ultimately scope for margin expansion in a recovery. So, I guess the short answer is all of the above. Gregory Lewis - Credit Suisse Securities (USA) LLC (Broker): Yeah. Okay. Thanks for that. And then just, you mentioned the capital commitments that Tidewater has in the prepared remarks. Just as we think about this and you mentioned this isn't a Tidewater problem; this is an industry problem. As we think about capital and commitments, there's no reason why some of these commitments, whether it's Tidewater or other players in the industry, really can't be pushed down – forget quarters, but for years. Is that a fair statement or is it shipyards are really – and suppliers are really beating down your doors forcing the industry as a whole to take delivery of this equipment?

Greg, just as a comment. In our case, we're talking about three vessels at the end of what had been a pretty extensive recapitalization of the fleet. So, we are very, very much at the tail end. On a percentage basis, there's probably between, by estimates, somewhere over 300 vessels that are still under construction worldwide. So your question is, I think a very good one. I can only speak to Tidewater side. We're at the tail end, those projects will be wrapped up. The overall economics – every dollar is precious, but we're coming to the end, I think, as Quinn dimensioned, that that CapEx for us is, it's up $40 million, I think at the end of the day. The industry as a whole and I think when you look at the order book and the yards that those vessels are in, I think there's a bigger question that many of those ships may never, never see the industry. A lot of those, the 330 vessels that I mentioned, a majority of those are in Chinese yards. And while I don't know the specifics of each and every contract, a lot of those have sort of balloon payments at the end when they're finished. And quite frankly, I don't think you're going to see a lot of the people that placed those orders, many of which were speculators, were not necessarily real operators in the industry, showing up with that final payment. So, I think there's a real question as to whether a majority at all, and we think not, will ever see the market. Gregory Lewis - Credit Suisse Securities (USA) LLC (Broker): Okay, guys. Thank you for the time.

Also, Greg. Jeff mentioned a majority of the ships are being built in Chinese yards. I think the actual number is 75% or 76% of the vessels under construction are either in Chinese or Indian yards. You can ask, any participant in the industry, and they'll have a different view as to what number of the 330 vessels or 340 vessels see the light of day. I think our view is a substantial portion do not get delivered. And supplementing Jeff's comments, yes, many of them were committed to by speculators and another decent slug were actually built by the yards themselves in an overhead absorption play, which was probably a fool's bet in retrospect. Gregory Lewis - Credit Suisse Securities (USA) LLC (Broker): Okay, guys. Perfect. Thank you very much.

Our next question comes from Mark Brown from Seaport Global Securities. Your line is open.

Thank you. Good morning, guys.

Good morning, Mark.

Mark.

I just wanted to ask about stacking. It seems that you've stacked quite a few vessels at the end of the quarter, given that your quarter-end number was about 115 and you had around 100 as an average. But it still is only about 43% of your total active fleet or total available fleet. I was just wondering why not stack more just to reduce the cost exposure going forward, given that you are not too optimistic about a recovery in the near term?

I guess the short answer – well maybe, I'll take the first part of your question first. I mean, we stacked 32 vessels, I believe, over the course of the quarter, and obviously, if you just spread it out on a linear basis, you would have ended up with kind of a 15 vessel delta between the average and the quarter-end numbers. So, no, there was not a flurry of stackings in the last quarter or anything like that, but I don't have that at my fingertips the timing of the individual vessel stackings. I guess, the answer to your second question is the reason that we're not stacking more vessels, not to say that we won't, is that we have stacked with a broader strategy of trying to maintain plus or minus 70% utilization on what is active. As you can see from the results of the quarter, we were able to achieve that in the current quarter and that will continue to be the light by which we guide the ship. Again, we believe economic utilization based on the current day rates that are available to us is about 70% utilization and that reflects obviously manning reductions, wage reductions and all of the above. But at least, our sense is that economic utilization is around 70% and today we're achieving it. And to the extent that we see that lift as we've done in the past, we'll continue to pull vessels out of service. And to the extent that we can achieve better than 70% utilization, we'll probably feather them back into a market and will accept them. But there is a method to the madness in terms of our stacking and reactivation strategy.

Okay. No, that makes sense. And I was curious if you've been able to claw back the capital refunds from the shipyards that you had negotiated and let those options expire. Have you had any trouble getting those refunds to you?

The last piece is $14 million-some and we'll see the details around that and the filing this afternoon, I think that's – to put it in context, we had terminated select vessel construction contracts. I think the number was 8 vessels or 10 vessels, we negotiated price reductions on the remaining vessels that we did agree to take delivery on. But at the end of the day, we were able to pull out about $215 million or $220 million out of our CapEx program. And the total that we received back from the yards is about $86 million, or it will be $86 million when all is said and done, with the remaining $14 million or so, expected either this month or the early part of next month. So, we're pretty comfortable that we'll see that last slug, in part because it's backed by letter of credit issue by the Bank of China.

Okay. Thank you very much.

Thank you.

Our next question comes from Madalina Iacob from Debtwire. Your line is open.

Hello and thanks for taking the question. I'm coming back to the negotiations, but I just want to know if you can tell us for how many weeks did you offer the extension? I'm just curious this time, is it a couple of weeks or months. You said at the beginning of the call or during the call that you asked for another extension from the November 11 deadline?

No, Madalina, I think we said what we can about the request for the extension that I just think we'll leave it at that.

Okay. That was my question actually. Thank you so much.

Thank you.

Our final question comes from David Epstein from Cowen. Your line is open. David Epstein - Cowen & Co. LLC: Hi, guys. Can you tell us your expectations, whether there are going to be continued future declines in the net receivable from Sonatide, i.e., will it continue being a source of cash? And then how about other working capital swings outside of Sonatide?

I think the quarter-over-quarter improvement would be tough to extrapolate. We still have an active business in Angola. Obviously, revenue for the company overall is down substantially, but the contribution from the Angolan operations has been relatively consistent, at least in percentage terms. Yeah. So, I would actually say that the drop in the net due from Sonatide – in the past quarter, while not aberrant, was probably a better quarter than what we've seen recently. So, if you look at the 12-month performance, I think it was down $55 million or $56 million. My hope and expectation is that, the quarter-to-quarter movement up or down would be relatively modest. But we do expect to have a net due from Sonatide as long as we have a large operation in Angola (46:31) today. David Epstein - Cowen & Co. LLC: Right. So, obviously, it was a great swing in the quarter and you can't extrapolate. But would there be a gradual compression over time at a much smaller pace or we're probably where we should be?

To be honest with you, I wouldn't be surprised if next quarter we see a small bump up and the following quarter you see a small bump down. I just don't think it's going to be a driver to the balance sheet as it was historically. Maybe that's a hope as opposed to an expectation. But I don't expect a $20 million improvement in the receivable on any continuous basis. Again, we have a substantial operation there. There's revenue and there's associated receivables with it. In regards to the other working capital dynamics, I would say that there is crosscurrents of falling revenue should, all things being equal, result in lower investment or working capital in a market like we have today, customers, in part because they can, have stretched out payments on occasion and we try to manage that to the best of our ability, particularly in regards to some of NOCs that have budgetary calendars that sometime impact the timing of payments by and large working capital has been falling with revenue, with instances of extended DSO as a result of just a – cash is precious to everybody. And as a result, some will stretch out their trade credit in order to take advantage of free financing. David Epstein - Cowen & Co. LLC: Thank you very much.

Thank you.

And our final question comes from Ronald Smith (48:23), private investor. Your line is open.

Yes. You addressed earlier in your comments a way to reduction. I'm interested to know if there has been any significant change in salary reduction, have the upper management of the company taken a reduction in their salaries?

I think we detailed that in our last proxy and the answer is yes.

Would that be a significant reduction as a percentage?

I think 20% or circa-20% will be considered significant by most people.

That certainly would be significant by me. Another question, you addressed in your filing notice last night that under the negotiation, and I'll skip the negotiation part. I'm interested to know about the accounting under any negotiation. It looked to me like any negotiation would be incumbent upon an independent accounting firm. Would you address that?

I'm sorry. I'm not sure I understand the question. We obviously have.

Well, if you're in renegotiation, let me get off the speaker maybe it will be better. If you are in renegotiation, it looks like before anyone can have an accounting of the value of the company that the people who are assigning money to you or giving you money in an extension would require that there'll be an independent audit of what the assets of the company truly are before they would allow any assets to go forward, would you address this?

Yeah. We may be interchanging accounting with appraisal, if I'm understanding your question correctly. Obviously, we have an external auditor. We address quite extensively issues around the auditor's opinion as of March 31, 2016. Obviously, there's other dynamics from a financial statements, including the carrying of offsetting debt as current, given the current covenant dynamics. But I don't want to characterize what expectations are various creditor constituencies have in regards to assessing the value of assets. But I think it is reasonable to say that we have shared a significant amount of information with our lenders and noteholders as they assess for themselves how they would like to move forward in our negotiations. But one thing they are not lacking in is data.

Well, I understand that. But when you say, you're ready to or it's a possibility that you go into Chapter 11 bankruptcy, I believe there can't be too much data.

Appreciate the insight.

We have no further questions at this time.

Sorry, Nicole. Go ahead.

Nicole, (51:47).

We have no further questions at this time. I'd now like to turn the call back over to Joe Bennett for final remarks.

Okay, Nicole. Thank you for hosting us today. We appreciate everyone's time especially on this important Election Day and hope you enjoy the rest of your day. Thank you very much for your interest in Tidewater.

Thank you. Ladies and gentlemen, this concludes today's conference. Thank you for participating. You may now disconnect.