F-35 TIDEWATER INC. NOTES TO CONSOLIDATED FINANCIAL STATEMENTS Years ended March 31, 2010, 2009, and 2008  opportunities and uses of cash, including the current share repurchase authorization, and in the context of  current conditions in the credit and capital markets. The company has experienced occasional delays in the expected deliveries of equipment for vessels  currently under construction (as has the offshore supply vessel industry in general). While the frequency of  these equipment delays has abated, similar delays in the future are possible. Currently, the company is  experiencing more pronounced delays in vessel construction progress at shipyards in Brazil (two crewboats  vessels under construction) and India (one platform supply vessel under construction). The company  continues to work diligently to ensure as timely delivery as possible of these vessels, but further delay is  possible. The shipyard in India has previously completed and delivered three vessels for the company.  The company generally requires shipyards to provide third party credit support in the event that vessels are  not ultimately completed and delivered. That third party credit support typically guarantees the return of  amounts paid by the company, and generally takes the form of refundment guarantees issued by major  financial institutions located in the country of the shipyard. While the company endeavors to reduce its  shipyard credit risk by requiring these instruments, the ultimate return of amounts paid by the company in  the event of shipyard default is still subject to the creditworthiness of the shipyard and the provider of the  credit support, as well as the company’s ability to successfully pursue legal action to compel payment of  these instruments. When third party credit support is not available or cost effective, the company endeavors  to limit its credit risk through payment and other contract terms with the shipyard and other counterparties. Certain of the company’s vessels under construction are committed to work under customer contracts that  provide for the payment of liquidated damages by the company or its subsidiaries in certain cases of late  delivery. Delays in the expected deliveries of any of these vessels could result in penalties being imposed  by our customers. In the opinion of management, the amount of ultimate liability, if any, with respect to these  penalties, will not have a material adverse effect on the company’s financial position, results of operations,  or cash flows.  Certain current and former subsidiaries of the company are, or have been, participating employers in an  industry-wide multi-employer retirement fund in the United Kingdom, the Merchant Navy Officers Pension  Fund (MNOPF). The company has been informed of a fund deficit that will require contributions from the  participating employers. The amount and timing of the company's share of the fund's deficit will depend  ultimately on a number of factors, including updated calculations of the total fund deficit, theories of  contribution imposed as determined by and within the scope of the Trustee's authority, the number of then  participating solvent employers, and the final method used in allocating the required contribution among  such participating employers. While there were no amounts expensed in fiscal years 2010 and 2008 related  to this matter, the company recorded an additional liability of $1.2 million during fiscal 2009. As of  March 31, 2010, $4.0 million remains payable to MNOPF based on current assessments, all of which has  been fully accrued. In the future, the fund's trustee will likely claim that the company owes additional  amounts for various reasons, including negative fund investment returns in a depressed global market as  reflected in a preliminary future actuarial valuation, and the inability of other assessed parties to contribute  their share of respective allocations, failing which, the company and other solvent participating employers  will be asked for additional contributions. The company anticipates receiving a final evaluation from  actuaries during the second quarter of fiscal 2011. Merchant Navy Officers Pension Fund  Currency Devaluation and Fluctuation Risk  Due to the company’s international operations, the company is exposed to foreign currency exchange rate  fluctuations and exchange rate risks on all charter hire contracts denominated in foreign currencies. The  company generally does not hedge against any foreign currency rate fluctuations associated with foreign  currency contracts that arise in the normal course of business. To minimize the financial impact of these  items the company attempts to contract a significant majority of its services in U.S. dollars. The company  continually monitors the currency exchange risks associated with all contracts not denominated in U.S. 