The company’s principal customers are major and independent oil and natural gas exploration, field  development and production companies; foreign government-owned or-controlled organizations and companies that explore and produce oil and natural gas; drilling contractors; and companies that provide  other services to the offshore energy industry, including but not limited to, offshore construction companies,  diving companies and well stimulation companies. In recent years, consolidation of exploration, field development, and production companies has occurred  and this trend may continue in the future. Consolidation reduces the number of customers for the company’s  equipment, and may negatively affect exploration, field development and production activity as consolidated  companies generally focus on increasing efficiency and reducing costs and delay or abandon exploration  activity with less promise. Such activity could adversely affect demand for the company's vessels, and  reduce the company's revenues. In addition, consolidation could result in the absorption of an oil and gas  company with whom the company has a strong commercial relationship into another company with which  the company does not or vice-versa.  The company’s primary source of revenue is derived from time charter contracts of its vessels on a rate per  day of service basis; therefore, vessel revenues are recognized on a daily basis throughout the contract  period. As noted above, these time charter contracts are generally either on a term or “spot” basis. Vessel  revenues are recognized on a daily basis throughout the contract period. There are no material differences  in the cost structure of the company’s contracts based on whether the contracts are spot or term because  the operating costs are generally the same without regard to the length of a contract.  For the year ended March 31, 2010, Chevron Corporation (including its worldwide subsidiaries and affiliates)  accounted for approximately 18.3% and Petroleo Brasileiro SA accounted for approximately 13.1% of total  revenues. In management’s opinion, the loss of these two significant customers could, at least in the short  term, have a material adverse effect on the company’s results of operations. The five largest customers  accounted for approximately 47.3% of the company’s total revenues, while the 10 largest customers  accounted for approximately 61.8% of the company’s total revenues. The principal competitive factors for the offshore vessel service industry are the suitability and availability of  vessel equipment, price and quality of service. In addition, the ability to demonstrate a good safety record  and attract and retain qualified and skilled personnel are also important competitive factors. The company  has numerous competitors in all areas in which it operates around the world, and the business environment  in all of these markets is highly competitive. The company’s diverse, mobile asset base and the wide geographic distribution of its assets generally  enable the company to respond relatively quickly to changes in market conditions and to provide a broad  range of vessel services to its customers around the world. Management believes the company has a  competitive advantage because of the size, diversity and geographic distribution of its vessel fleet. Economies of scale and experience level in the many areas of the world in which we operate, are also  considered competitive advantages as is the company’s strong financial position.  According to ODS-Petrodata, the global offshore supply vessel market has approximately 450 new-build  offshore support vessels (platform supply vessels and anchor handlers only) that are currently estimated to  be under construction and that are expected to be delivered to the worldwide offshore vessel market over  the next three years. The current worldwide fleet of these classes of vessels is estimated at approximately  2,450 vessels. An increase in vessel capacity could have the effect of lowering charter rates, particularly in  the context of declining levels of exploration, field development and production activity. However, the  worldwide offshore marine vessel industry also has a large number of aging vessels, including more than  800 vessels that are at least 25 years old, that are nearing or exceeding original expectations of their  estimated economic lives. These older vessels could potentially be removed from the market within the next  few years if the cost of extending the vessels’ lives is not economically justifiable. Although the future  attrition rate of these aging vessels cannot be accurately predicted, the company believes that the  retirement of a sizeable portion of these aging vessels would likely mitigate the potential combined negative  effects of new-build vessels on vessel utilization and vessel pricing. Additional vessel demand could also be  created with the addition of new drilling rigs and floating production units that are expected to be delivered  and become operational over the next few years, which should help minimize the possible negative effects  -10-  Competition