TIDEWATER INC. NOTES TO CONSOLIDATED FINANCIAL STATEMENTS Years ended March 31, 2010, 2009, and 2008  Internal Investigation Securities and Exchange Commission  Department of Justice  The company has previously reported that special counsel engaged by the company’s Audit Committee had  completed an internal investigation into certain FCPA matters and reported its findings to the Audit  Committee. The substantive areas of the internal investigation have been reported publicly by the company  in prior filings.  Special counsel has reported to the Department of Justice (DOJ) and the Securities and Exchange  Commission (SEC) the results of the investigation, and has engaged in a series of cooperative discussions  with the two federal agencies as to the potential legal ramifications of those findings. The following reflects  the status of those discussions:  The company has reached an agreement in principle with the staff of the SEC to resolve its previously  disclosed investigation of possible violations of the FCPA. Under the proposed resolution, the company  would consent to the filing in federal district court of a complaint (“Complaint”) by the SEC, without admitting  or denying the allegations in the Complaint, and to the imposition by the court of a final judgment against the  company, including a permanent injunction against us. The Complaint would allege civil violations of the  FCPA’s anti-bribery and accounting provisions with respect to certain previously discussed conduct  involving tax authorities in Azerbaijan, and the FCPA’s accounting provisions with respect to amounts paid  by a subsidiary of the company to a third party customs broker to procure certain permits necessary for the  company’s vessels to operate in Nigeria. The final judgment would not take effect until it is confirmed by the  court, and would permanently enjoin the company from future violations of those provisions.  The agreement in principle would require the company to pay a total of approximately $11.4 million,  consisting of the sum of $8.4 million (principally representing disgorgement of profits and prejudgment  interest) payable at the time of settlement and a contingent civil penalty of $3.0 million. The contingent civil  penalty would be payable to the SEC in 18 months, to the extent that the company had not agreed to pay  fines or penalties of at least that amount to another government authority (or authorities) in connection with  the matters covered by the internal investigation. The financial charge associated with the proposed  settlement with the SEC was recorded in the fourth quarter of fiscal 2010 and is included in general and  administrative expenses.  The agreement in principle is contingent upon the parties’ agreement on the terms of the relevant  documents, approval by the Securities and Exchange Commission, and confirmation by a federal district  court. There can be no assurance that this settlement will be finalized, or finalized on the terms set forth  above. If the settlement is not finalized, the SEC may bring an enforcement action against the company.  The company’s current tolling arrangements with the SEC extend through June 15, 2010. To date, the company has not reached any agreement with the DOJ regarding a negotiated resolution of the  previously disclosed internal investigation. Based on discussions with the DOJ regarding the possible  disposition of this matter, it appears likely that any negotiated disposition would involve charges and  sanctions imposed by the DOJ, although the company is unable to predict at this time the nature and scope  of such charges and sanctions and upon whom they would be imposed. The timeframe for resolution of  these matters is also uncertain. Given these uncertainties, the company is unable at this time to estimate  the range of any monetary exposure that might arise from such a settlement. As a result, no accrual for  potential additional liabilities associated with a negotiated resolution with the DOJ has been recorded as of  March 31, 2010. Any fines or penalties paid to the DOJ would reduce the balance of the SEC contingent  penalty referenced above under the company’s agreement in principle with the SEC. Should additional  information be obtained that any potential liability in connection with the resolution of these matters with the  DOJ is probable and reasonably estimable, the company will record such liability at that time. While  uncertain, ultimate resolution with the DOJ could have a material adverse effect on the company’s results of  F-37