Question-and-Answer Session
Thank you sir. (Operator Instructions). We will take our first question today from Jud Bailey at Jefferies.
Judson Bailey - Jefferies
Thank you, good morning. First of all Geoff, a quick follow-up, the $0.30 recurring number, you guys site in the press release, does that include the currency affect you mentioned earlier?
Geoff Jones
No, its Geoff, Jud, there is actually a table in the press release that should get you to the $0.30 and it's just for the impairments, the derivative and getting conversion of debt.
Judson Bailey - Jefferies
Okay. I misunderstood, sorry. And then did the backlog, did you guys have, I believe you said you have 40% of that will be kind of, however, be recognized this year. How should we think about margin associated with that backlog given the currency fluctuation, you are seeing in that business?
Joe Compofelice
This is Joe, I would say that the margins on that portion, Jud it will be the same they were in 2008. Those are either DeepOcean and CTC contracts the portion that’s executable this year and there has been no price deterioration at all if anything I would suggest little bit of a pricing increase there. And in towing and supply those are termed contracts that were already in existence, the way the OSV business has tailed off, remember we said in the last call that we had renewed five of those contracts in the second and third quarter at pretty good price increases. So if anything if we did a separate income statement for the termed out revenues it more likely than not would show slightly higher margins.
Judson Bailey - Jefferies
Okay. And on the cost side, you mentioned you are consolidating some offices, can you talk overall about from the cost trends and anything else you maybe able to do payer back costs which you would consider mass balling some of your OSVs that may not be quite as remarkable in the environment you are likely to see this year?
Joe Compofelice
Yes, I think in general because of the growth we see at DeepOcean and CTC, yes there is belt tightening but it’s not dramatic stuff and most of that belt tightening is associated with consolidating cost structures and things like that. In the OSV business I think perhaps in the Gulf of Mexico you might see us in the US Gulf excuse me, trying to take another boat to West Africa a couple of boats down to Mexico where we have a 100% utilization, but overall on the OSV side we are just trying to really focus there on cost containment because I think the supply and demand landscape not just in the Gulf of Mexico and North Sea but it could possibly extend to other areas as the overall jack-up rig count that’s the one our fleet is more sensitive to, continues to tail off.
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