Years ended March 31, 2010, 2009, and 2008  (9) SALE/LEASBACK ARRANGEMENTS Fiscal 2010 Sale/Leaseback  In June 2009, the company sold five vessels to four unrelated third-party companies, and simultaneously  entered into bareboat charter agreements with the respective companies. In July 2009, the company sold  an additional vessel to an unrelated third-party company, and simultaneously entered into bareboat charter  agreements with the respective company.  The sale/leaseback transactions resulted in proceeds of approximately $101.8 million and a deferred gain of  $39.6 million. The carrying value of the six vessels was $62.2 million at the dates of sale. The leases on the  five vessels sold in June 2009 will expire on June 30, 2014, and the lease on the vessel sold in July 2009  will expire on July 30, 2014. The company is accounting for the transactions as sale/leaseback transactions  with operating lease treatment and will expense periodic lease payments over the five year charter hire  operating lease terms. Under the sale/leaseback agreements, the company has the option to purchase the six vessels at 75% of  the original sales price or cause the owners to sell the vessels whereby the company guarantees  approximately 84% of the original lease value to the third-party companies. The company may repurchase  the vessels prior to the end of the charter term with penalties of up to 5% assessed if purchased in years  one and two of the five year lease. The company will recognize the deferred gain as income if it does not  exercise its option to purchase the six vessels at the end of the operating lease term. If the company  exercises its option to purchase these vessels, the deferred gain will reduce the vessel’s stated cost after  exercising the purchase option.  In March 2006, the company entered into agreements to sell five of its vessels that were under construction  at the time to Banc of America Leasing & Capital LLC (BOAL&C), an unrelated third party, for $76.5 million  and simultaneously enter into bareboat charter agreements with BOAL&C upon the vessels’ delivery to the  market. Construction on these five vessels was completed at various times between March 2006 and  March 2008, at which time the company sold the respective vessels and simultaneously entered into  bareboat charter agreements.  The company accounted for all five transactions as sale/leaseback transactions with operating lease  treatment. Accordingly, the company did not record the assets on its books and the company is expensing  periodic lease payments. The bareboat charter agreements on the first two vessels expire in calendar year 2014 unless extended.  The company has the option to extend the respective bareboat charter agreements three times, each for a  period of 12 months, which would provide the company the opportunity to extend the operating leases  through calendar year 2017. The bareboat charter agreements on the third and fourth vessels expire in  2015 and the company has the option to extend the bareboat charter agreements three times, each for a  period of 12 months, which would provide the company the opportunity to extend the operating leases  through calendar year 2018. The bareboat charter agreements on the fifth vessel expires in 2016 and the  company has the option to extend the bareboat charter agreements three times, each for a period of  12 months, which would provide the company the opportunity to extend the operating leases through  calendar year 2019. At the end of the basic term (or extended option periods), the company has an option to  purchase each of the vessels at its then fair market value or to redeliver the vessel to its owner. The  company may also purchase each of the vessels at their fixed amortized values, as outlined in the bareboat  charter agreements, at the end of the fifth year, and again at the end of the seventh year, from the  commencement dates of the respective charter agreements.  Fiscal 2006 Sale/Leaseback  F-33 TIDEWATER INC. NOTES TO CONSOLIDATED FINANCIAL STATEMENTS