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## Contractual Obligations and Contingent Commitments 

## Contractual Obligations 

The following table summarizes the company’s consolidated contractual obligations as of March 31, 2010 and the effect such obligations, inclusive of interest costs, are expected to have on the company’s liquidity and cash flows in future periods. 

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(A) These amounts represent the liability for unrecognized tax benefits under FIN 48. 

## Letters of Credit and Surety Bonds 

In the ordinary course of business, the company had other commitments that the company is contractually obligated to fulfill with cash should the obligations be called. These obligations include standby letters of credit and surety bonds that guarantee our performance as it relates to our vessel contracts, insurance, customs and other obligations in various jurisdictions. While these obligations are not normally called, the obligation could be called by the beneficiaries at any time before the expiration date should the company breach certain contractual and/or performance or payment obligation. As of March 31, 2010, the company had $52.1 million of outstanding standby letters of credit and surety bonds. The obligations that are the subject of these surety bonds and standby letters of credit are geographically concentrated in Nigeria and Mexico. 

## Off-Balance Sheet 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 

