Don Coyote is correct. JAR 25.807 defines the certification parameters for aircraft emergency exits. This document uses the term "waterline" in the way Don Coyote described. Below is an extract to illustrate this:
"(2) For aeroplanes that have a passenger seating configuration of 10 seats or more, excluding pilots seats, one exit above the waterline in a side of the aeroplane, meeting at least the dimensions of a Type III exit for each unit . . ." etc.
The above quote is taken from the paragraphs that refer to emergency egress and ditching. There are other similar references to the "waterline" in JAR 25. As Dan suggests, some aircraft have a "Ditching" pushbutton which has to be pressed as part of the ditching drills. It closes all doors and vents below the waterline to minimise water ingress following a ditching. Examples are the avionics inlet and outlet doors, the pressurisation outflow, ac pack outflows etc.
The other contributers may also be correct in their references to the nautical terms used historically in aircraft design, but I only claim any knowlege of the JAR 25 use of the term.