•	fluctuations in weather, which can lead to declines in energy consumption and resulting declines in oil or gas prices;
•	changes in laws and regulations affecting the tankers industry, including any possible weakening of theJones Act, which could result in increased competition from non-U.S. companies in our domestic offshore energy support, towing, and petroleum and chemical product tanker businesses;
•	changes in environmental laws and regulations, including any possible weakening of the U.S. Oil Pollution Act of 1990 (“OPA 90”), which could result in increased competition for the petroleum and chemical product transportation services provided by our modern double-hull fleet;
•	risks associated with potential oil spills or other environmental pollution incidents, which, although believed to be covered by liability insurance, may result in adverse market reaction and loss of business; and
•	terrorist attacks or hijackings, which could disable or destroy one of our vessels and result in significant loss of hire and revenue.

     Additional information regarding these and other factors affecting our business appears elsewhere in this Report under “Additional Business and Corporate Risk Factors.”

C. Recent Developments

     In January 2005, the Company took delivery of theSeabulk Carmenand delivered three of the Company’s offshore crewboats and one offshore support vessel, whicheach director listed below was held for sale, to Centurion Marine Offshore, L.L.C. The transaction is a like-kind exchange of assets of equal value of approximately $4.4 million and is a tax-free transaction to the Company.

     In January 2005, the Company took delivery of theSeabulk Angra,our second newbuild vessel constructed in Brazil.

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D. Fleet Overview

     The following table lists the types of vessels, by assigned operating region or segments, which the Company owned, operated, or chartered as of March 1, 2005:

     For the year ended December 31, 2004, 11 offshore energy support vessels were sold, including five in the Gulf of Mexico, one of which was held-for-sale, four in West Africa, one in the Middle East, and one in Southeast Asia.

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     For financial information about our business segments and geographic areas of operation, see Note 13 to our consolidated financial statements.

E. Lines of Business

(1) Offshore Energy Support (Seabulk Offshore)

     The offshore energy support business accounted for approximately 46.6% of our total revenue in 2004. Offshore energy support vessels are used primarily to transport materials, supplies, equipment, and personnel to drilling rigs and to support the construction, positioning and ongoing operation of oil and gas production platforms. These vessels are hired, or “chartered,” by oil companies and others engaged in offshore exploration and production activities.

     The market for these services is fundamentally driven by the offshore exploration, development, and production activities of oil and gas companies worldwide. The level of these activities depends primarily on the capital expenditures of oil and gas producers, which has traditionally been a function of current and anticipated oil and gas prices. Oil and gas prices are influenced by a variety of factors, including worldwide demand, production levels, inventory levels, governmental policies regarding exploration and development of reserves, and political factors in producing countries.

		Offshore energy support services are provided primarily by the following types of vessels:
	•	Supply boats(also called workboats) are generally steel-hull vessels of at least 150 feet in length. They serve exploration and production facilities and support offshore construction and maintenance activities and are differentiated from other vessel types by cargo flexibility and capacity. In addition to transporting deck cargo, such as drill pipe and heavy equipment, supply boats transport liquid mud, potable and drilling water, diesel fuel, dry bulk cement, and dry bulk mud. With their relatively large liquid mud and dry bulk cement capacity and large areas of open deck space, they are generally in greater demand than other types of support vessels for exploration and workover drilling activities.
	•	Anchor handling vessels, which include anchor handling tug/supply vessels and some tugs, are more powerful than supply boats and are used to tow and position drilling rigs, production facilities and construction barges. Some of these vessels are specially equipped to assist tankers while they are loading from single-point buoy mooring systems, and others are used in place of supply boats when not performing towing and positioning functions.
	•	Crewboats(also called crew/supply boats) are faster and smaller than supply boats and are used primarily to transport personnel and light cargo, including food and supplies, to and among production platforms, rigs and other offshore installations. These vessels are chartered together with supply boats to support drilling or construction operations or, separately, to serve the various requirements of offshore production platforms. Crewboats are typically aluminum-hull vessels and generally have longer useful lives than steel-hull supply boats. Crewboats also provide a cost-effective alternative to helicopter transportation services and can operate reliably in all but the most severe weather conditions. However, our strategy is to focus on higher-value, higher-margin vessels and de-emphasize the smaller, lower-margin crewboat business. As a result, the Company sold four crewboats during 2004 and its strategy is to continue to de-emphasize its crewboat business in 2005.

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     Approximately 22.8% of our 2004 offshore revenue was derived from domestic operations under U.S.-flag vessel registration in the Gulf of Mexico, directed from offices in Amelia, Louisiana. The balance was derived from international operations, including offshore West Africa, the Arabian Gulf and adjacent areas, such as India, and Southeast Asia. We also operate offshore energy support vessels in other regions, including Brazil. Operations in the Arabian Gulf, Southeast Asia and adjacent areas are directed from facilities in Dubai, United Arab Emirates; operations in offshore West Africa and certain other international areas are directed from facilities in Nyon, Switzerland; and operations in Mexico and Brazil are directed from our Amelia, Louisiana facility. We also have sales offices and/or maintenance and other facilities in many of the countries where our vessels operate.

     The average age of our offshore energy support vessels, based on the later of the date of construction or rebuilding, is approximately 17 years. Of the offshore fleet, approximately 29% are less than 10 years old and approximately 52% are more than 20 years old. After a vessel has been in service for approximately 25-30 years, the costs of repair, vessel certification and maintenance may not be economically justifiable.

(2) Marine Transportation (Seabulk Tankers)

     The Company provides marine transportation services, principally for petroleum products and petrochemicals, in the U.S. domestic or “coastwise” trade, a market largely insulated from direct international competition under theJones Act. Tankers consists of our ten U.S.-flag tankers, five of which are double-hulled, and our two double-hull foreign-flag tankers, one of which began international service for us in the first quarter of 2004 and the other in the second quarter of 2004. Seabulk Tankers accounted for approximately 41.9% of our total revenue in 2004.

Petroleum Product Transportation.In the domestic energy transportation trade, oceangoing vessels transport fuel and other petroleum products, primarily from refineries and storage facilities along the coast of the U.S. Gulf of Mexico to utilities, waterfront industrial facilities and distribution facilities along the U.S. Gulf of Mexico, the Atlantic and Pacific coasts, as well as transportation of petroleum crude and product between Alaska, the West Coast and Hawaii. The number of U.S.-flag oceangoing vessels eligible to participate in the U.S. domestic trade and capable of transporting fuel or petroleum products has steadily decreased since 1980, as vessels have reached the end of their useful lives, the cost of constructing vessels in the United States (a requirement for U.S. domestic coastwise trade participation) has substantially increased, and single-hull tanker vessels are being retired due to the age requirements of OPA 90.

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     At March 1, 2005, the Company operated the following U.S.-flag petroleum product tankers:

     TheSeabulk Energy, Seabulk Arctic, Seabulk Mariner, Seabulk Pride,andBrenton Reefare our five double-hull carriers. These vessels are the newest and most technologically advanced product carriers in theJones Actmarket.

     The Company acquired theSeabulk Powerin March 1998. Under OPA 90, this vessel cannot be used to transport petroleum and petroleum products in U.S. coastwise commerce after 2008. The Company acquired theSeabulk Challengeand Seabulk Traderin August 1996. Their OPA 90 retirement date is 2011. The double-hulls have no retirement date under OPA 90.

     At March 1, 2005, seven of the Company’s U.S.-flag petroleum product tankers were operating under time charters, and one vessel trades under a consecutive voyage charter in foreign commerce.

Chemical Transportation.In the U.S. domestic coastwise chemical transportation trade, vessels carry chemicals, primarily from chemical manufacturing plants and storage tank facilities along the coast of the U.S. Gulf of Mexico to industrial users in and around Atlantic and Pacific coast ports. The chemicals transported consist primarily of caustic soda, paraxylene, alkylates, toluene and lubricating oils. Some of the chemicals transported must be carried in vessels with specially coated or stainless steel cargo tanks; many of them are very sensitive to contamination and require special cargo-handling equipment.

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     At March 1, 2005, the Company operated the following U.S.-flag chemical product tankers:

     TheSeabulk Magnachemand theSeabulk Americahave full double bottoms (as distinct from double hulls). Double bottoms provide increased protection over single-hull vessels in the event of grounding. TheSeabulk America’sstainless steel tanks were constructed without internal structure, which greatly reduces cargo residue from transportation and results in less cargo degradation. Stainless steel tanks, unlike epoxy-coated tanks, also do not require periodic sandblasting and recoating, which the Company deems to be a competitive advantage. Delivered in 1977, theSeabulk Magnachemis a catamaran tug (“CATUG”) or integrated tug and barge (“ITB”) which has a higher level of dependability, propulsion efficiency and performance than an ordinary tug and barge.

     The chemical carriers have from 13 to 24 cargo segregations which are configured and coated to handle various sized parcels of a wide variety of industrial chemical and petroleum products, giving them the ability to handle a broader range of chemicals than chemical-capable product carriers. Many of the chemicals we transport are hazardous substances. Current voyages are generally conducted from the Houston and Corpus Christi (Texas), and Lake Charles (Louisiana) areas to such ports as New York, Philadelphia (Pennsylvania), Baltimore (Maryland), Wilmington (North Carolina), Charleston (South Carolina), Los Angeles and San Francisco (California), and Kalama (Washington). The chemical carriers are also suitable for transporting other cargoes.

     Pursuant to OPA 90, theSeabulk AmericaandSeabulk Magnachemcannot be used to transport petroleum and petroleum products in U.S. coastwise commerce after 2015 and 2007, respectively. The two chemical carriers,Seabulk AmericaandSeabulk Magnachem,can also be used as petroleum tankers until 2015 and 2007, respectively.Seabulk Americais among the last independently owned product tankers scheduled to be retired under OPA 90.

     The Company operates theSeabulk Magnachemunder a bareboat charter expiring in February 2007 with a purchase option. In December 2004, the Company purchased the minority interest in a partnership that owns theSeabulk America.The Company owned a 67% equity interest and purchased the 33% interest owned by Stolt Tankers (U.S.A.), Inc. for $2.4 million.

     For vessels not operating under time charters or consecutive voyage charters, the Company books cargoes either on a spot (movement-by-movement) or contract of affreightment basis. Approximately 60.0% of contracts for cargo are committed on a 12- to 24-month basis, with minimum and maximum cargo tonnage specified over the period at fixed or escalating rates per ton.

     At March 1, 2005, the Company’s chemical product tankers were operating under contracts of affreightment.

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     At March 1, 2005, the Company operated the following foreign-flag product tankers:

     Acquired in 2004, theSeabulk Reliantand theSeabulk Trustare our two foreign-flag tankers, operating in foreign trade, carrying petroleum products. The two five-year-old, foreign-flag product tankers are modern double-hull vessels suitable for world-wide trading. Both vessels are operating under time charters in an international product tanker pool.

(3) Marine Towing (Seabulk Towing)

     Towing is the smallest of the Company’s three businesses and represented approximately 11.5% of our total revenue in 2004. Our harbor operations consist of four ports in Florida, with six tugs in Tampa (including Port Manatee), four tugs in Port Everglades, and three tugs in Port Canaveral. The towing division also has three tugs in Mobile, Alabama, two tugs in Lake Charles, Louisiana, and four tugs in Port Arthur, Texas. Our tugs assist petroleum and chemical product tankers, barges, container ships and other cargo vessels in docking and undocking and in proceeding within the port areas and harbors. We also operate three tugs with offshore towing capabilities that conduct a variety of offshore towing services in the Gulf of Mexico and the Atlantic Ocean. Demand for towing services depends on vessel traffic and oilfield activity, which is in turn generally dependent on local, national and international economic conditions, including the volume of world trade.

     Our tug fleet consists of 16 conventional tugs and 10 tractor tugs, including four Ship Docking Module tractor tugs, known as SDMs. SDMs are innovative ship docking vessels, designed and patented by us, that are more maneuverable, efficient, and flexible and require fewer crew members than conventional harbor tugs.

     In August 2004, the two-year term bareboat-charter of the tugHollywoodto Signet Maritime ended operations in the port of Brownsville, Texas. In January 2004, the tugEagle IIwas bareboated to Exxon/SeaRiver for one year with renewable options for service in San Francisco, California. As of March 1, 2005, theEagle IIremained bareboated to Exxon/SeaRiver.

Harbor Tug Operations.In most U.S. ports, competition is unregulated. Rates are unregulated in all ports that we serve, including the franchised ports. Generally, harbor tugs can be moved from port to port. However, Port Everglades grants non-exclusive franchises to harbor tug operators, which limit tug mobility from that port.

Port Everglades. Port Everglades is the second largest non-refining petroleum storage and distribution center in the United States, providing substantially all of the petroleum products for South Florida. Seabulk’s Towing franchise requires it to maintain a minimum of three tractor tugs in the port. The franchise is not exclusive and expires in 2007. While the Company is regarded as a high-standards operator, there is no assurance the franchise will be renewed. As of December 31, 2004, the Company operated four tugs in Port Everglades.

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Tampa. The Tampa port is comprised of three “sub-ports” (including Port Manatee) and a distant sea buoy, a greater number of tugs is required to be a competitive operator in Tampa than in other ports of similar size. As of December 31, 2004, we operated six tugs, including three tractor tugs, one SDM, and two conventional tugs in the port (including Port Manatee). The Company is conducting outside harbor services in addition to normal harbor operations.

Port Canaveral. In Port Canaveral, the Company had been the sole franchise holder for harbor-docking services until May 2003 when the Canaveral Port Authority terminated its franchise system. The Company began to face competition by another operator in Port Canaveral in June 2004. We provide docking services for commercial cargo vessels serving central Florida and, on a very limited basis, for cruise ships, as well as for Navy vessels. Currently, the Company operates three tugs in Port Canaveral.

Mobile. At Mobile, the Company provides docking services primarily to commercial cargo vessels, including vessels transporting coal and other bulk exports. The Company operates three tugs at this port. There is a competing provider. During 2004, Mobile had an increase in revenue due to increased port traffic and advanced operations including an increase in in-bound coal and cruise ship docking in the port.

Port Arthur and Lake Charles. At Port Arthur and Lake Charles the Company operates six tugs. Currently, four of these tugs serve Port Arthur, Texas and two serve Lake Charles, Louisiana. Each of these ports has a competing provider. Revenue increased due to increased bulk and tanker traffic during 2004.

Offshore and Bareboat Towing Operations.The Company currently has three tugs working in the offshore towing market conducting a variety of offshore towing services in the Gulf of Mexico and the Atlantic Ocean, and one tug working on a bareboat charter in San Francisco, California.

F. Customers and Charter Terms

     The Company offers offshore energy support services primarily to oil and gas companies and large drilling companies. Consistent with industry practice, our U.S. Gulf of Mexico operations are conducted primarily in the “term” market pursuant to short-term (less than six months) charters at varying day rates. Generally, such short-term charters can be terminated either by us or our customers upon notice of five days or less. Charters in our international markets have terms ranging from a few days to several years.

     The primary purchasers of petroleum product transportation services are utilities, oil and gas companies, and large industrial consumers of fuel with waterfront facilities. The primary purchasers of chemical transportation services are chemical and oil companies. Both services are generally contracted for on the basis of short-term or long-term time charters, voyage charters, contracts of affreightment, or other transportation agreements tailored to the shipper’s requirements. Tesoro and Citgo each accounted for 7% of our 2004 revenue and were our largest customers.

     The Company’s towing services are offered to vessel owners and operators and their agents. Our rates for harbor towing services are set forth in published tariffs and may be modified at any time, subject to competitive factors. The Company also grants volume discounts to major users of harbor services. Offshore towing services are priced based upon the service required on anad hoc basis.

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G. Competition

     The Company operates in a competitive environment in all our operations. Although we are insulated from foreign vessel operators in theJones Act U.S. coastwise trade in our businesses, we are subject to U.S. citizen competitors in these trades. The principal competitive factors in these markets are suitability, reliability and capability of equipment, safety record, personnel, price, service, and reputation. Competitive factors in the offshore energy support segment also include operating conditions and intended vessel use (both of which determine the suitability of vessel type), shallow water versus deepwater needs, the complexity of maintaining logistical support and the cost of transferring equipment from one market to another. Our vessels compete with other vessel and barge operators and, in some areas and markets, with alternative modes of transportation, such as pipelines, rail tank cars, and tank trucks. Moreover, the customers of such services are placing increased emphasis on safety, the environment and quality, partly due to heightened liability for the cargo owner in addition to the vessel owner/operator under OPA 90. With respect to towing services, we compete with other providers of tug services in all of the ports in which we operate. Additional competitors may enter our markets in the future. While U.S.-flag, coastwise-operated vessels are protected under theJones Actand theOuter Continental Shelf Act, foreign-built, foreign-manned and foreign-owned vessels could be eligible to compete with our vessels operating in the domestic trade if theJones Actwere repealed or waived. There are no current indications that this will occur, although there are continuing attempts by foreign operators to undermine theJones Actthrough exceptions and by interpretation.

H. Environmental and Other Regulations

     The Company’s business and operations are subject to significant federal, state, local and international laws and regulations. The principal laws affecting us are described below.

Environmental.The Company’s business and operations are subject to federal, state, local and international laws and regulations relating to environmental protection and occupational safety and health, including those relating to the generation, storage, handling, emission, transportation and discharge of oil and hazardous and non-hazardous materials, the remediation of contamination and liability for damages to natural resources. The recent trend in environmental legislation and regulation is generally toward stricter standards, and this trend will likely continue.

     Governmental authorities have the power to enforce compliance with applicable environmental protection and operational safety and health laws and regulations, and violators are subject to penalties, fines, injunctions, and other sanctions. The Company believes that our operations currently are in substantial compliance with applicable environmental laws and regulations. The Company does not expect that it will be required in the near future to make capital expenditures that are material to the financial condition or operations by reason of environmental laws and regulations; however, because such laws and regulations are frequently changed and may impose increasingly stricter requirements, the Company cannot predict the ultimate cost of complying with these laws and regulations.

OPA 90.OPA 90 established an extensive regulatory and liability regime for the protection of the environment from oil spills. OPA 90 affects owners and operators of facilities operating near navigable waters and owners and operators of vessels operating in U.S. waters, which include the navigable waters of the United States and the 200-mile exclusive economic zone of the United States. Although it applies in general to all vessels, for purposes of its liability limits and financial-responsibility and response-planning requirements, OPA 90 differentiates between tank vessels (which include our chemical and petroleum product vessels) and “other vessels” (which include our tugs and offshore energy support vessels).

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     Under OPA 90, owners and operators of regulated facilities and owners, operators and certain charterers of vessels are “responsible parties” and are jointly, severally and strictly liable for removal costs and damages arising from oil spills relating to their facilities and vessels, unless the spill results solely from the act or omission of certain third parties under specified circumstances, an act of God or an act of war. Damages are defined broadly to include (i) natural resources damages and the costs of remediation thereof; (ii) damages for injury to, or economic losses resulting from the destruction of, real and personal property; (iii) the net loss of taxes, royalties, rents, fees and profits by the U.S. government, a state or political subdivision thereof; (iv) lost profits or impairment of earning capacity due to property or natural resources damage; (v) the net costs of providing increased or additional public services necessitated by a spill response, such as protection from fire, safety or other hazards; and (vi) the loss of subsistence use of natural resources.

     For facilities, the statutory liability of responsible parties is limited to $350.0 million. For tank vessels, the statutory liability of responsible parties is limited to the greater of $1,200 per gross ton or $10.0 million ($2.0 million for a vessel of 3,000 gross tons or less) per vessel; for any “other vessel,” such liability is limited to the greater of $600 per gross ton or $500,000 per vessel. Such liability limits do not apply, however, to an incident caused by the responsible party’s violation of federal safety, construction or operating regulations or by the responsible party’s gross negligence or willful misconduct, or if the responsible party fails to report the incident or provide reasonable cooperation and assistance as required by a responsible official in connection with oil removal activities or fails to comply with certain governmental orders. Although we currently maintain maximum available pollution liability insurance, a catastrophic spill or a failure or refusal of the insurance carrier to provide coverage could result in material liability in excess of available insurance coverage, resulting in a material adverse effect on our business results of operations or financial condition.

     Under OPA 90, with certain limited exceptions, all newly built or converted oil tankers carrying crude oil and petroleum products in U.S. waters must be built with double-hulls, and existing single-hull, double-side or double-bottom vessels must be phased out of service at some point, depending upon their size, age and place of discharge, through 2015 unless retrofitted with double-hulls. As a result of this phase-out requirement, as interpreted by the U.S. Coast Guard, our five single-hull chemical and petroleum product tankers will be required to cease transporting petroleum products by 2015, with the first vessel phased out in 2007 and the last vessel phased out in 2015, unless they are modified to install double hulls.

     OPA 90 expanded pre-existing financial responsibility requirements and requires vessel owners and operators to establish and maintain with the U.S. Coast Guard evidence of insurance or qualification as a self-insurer or other evidence of financial responsibility sufficient to meet their potential liabilities under OPA 90. Coast Guard regulations require evidence of financial responsibility demonstrated by insurance, surety bond, self-insurance, or guaranty. The regulations also implement the financial responsibility requirements of theComprehensive Environmental Response, Compensation and Liability Act of 1980(“CERCLA”), which imposes liability for discharges of hazardous substances such as chemicals, in an amount equal to $300 per gross ton, thus increasing the overall amount of financial responsibility from $1,200 to $1,500 per gross ton. We have obtained Certificates of Financial Responsibility pursuant to the Coast Guard regulations for our product and chemical carriers through self-insurance and commercial insurance.

     OPA 90 also amended the federalWater Pollution Control Actto require the owner or operator of certain facilities or the owner or operator of a tank vessel to prepare facility or vessel response plans and to contract with oil spill removal organizations to remove to the maximum extent practicable a worst-case discharge. We have complied with these requirements. As is customary, our oil spill response contracts

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are executory in nature and are not activated unless required. Once activated, we expect our pollution liability insurance to cover the cost of spill removal subject to overall coverage limitations of $1.0 billion; however a failure or refusal of the insurance carrier to provide coverage in the event of a catastrophic spill could result in material liability in excess of available insurance coverage, resulting in a material adverse effect on our business, results of operations or financial condition.

     OPA 90 does not prevent individual states from imposing their own liability regimes with respect to oil pollution incidents occurring within their boundaries, and many states have enacted legislation providing for unlimited liability for oil spills. Some states have issued implementing regulations addressing oil spill liability, financial responsibility, and vessel and facility response planning requirements. We do not anticipate that such legislation or regulations will have any material impact on our operations.

     In addition to OPA 90, the following are examples of environmental and occupational health and safety laws that relate to our business and operations:

Clean Water Act.The federalWater Pollution Control Act, also referred to as theClean Water Act,imposes restrictions on the discharge of pollutants into navigable waters of the United States. TheClean Water Actprovides for civil, criminal and administrative penalties for any unauthorized discharges and imposes substantial potential liability for the costs of removal, remediation, and damages. State laws for the control of water pollution also provide varying civil, criminal and administrative penalties and liabilities in the case of a discharge of petroleum or hazardous materials into state waters. In addition, the federalCoastal Zone Management Actauthorizes state development and implementation of programs to manage non-point source pollution to restore and protect coastal waters.

     The Company manages our exposure to losses from potential discharges of pollutants through the use of well-maintained, well-managed and equipped facilities and vessels and development of safety and environmental programs, including a maritime compliance program and our insurance program; and we believe we will be able to accommodate reasonably foreseeable environmental regulatory changes. There can be no assurance, however, that any new regulations or requirements or any discharge of pollutants by the Company will not have a material effect on us.

RCRA.The Company’s operations may generate and result in the transportation, treatment and disposal of both hazardous and non-hazardous solid wastes that are subject to the requirements of the federalResource Conservation and Recovery Act(“RCRA”) and comparable state and local laws.

CERCLA.The federalComprehensive Environmental Response, Compensation, and Liability Act (“CERCLA”) and comparable state laws establish strict and, under certain circumstances, joint and several liabilities for specified parties in connection with liability for the investigation and remediation of releases of hazardous materials to the environment and damages to natural resources. The Company has agreed to remediate certain shoreside portions of our former Sun State Marine facility in Green Cove Springs, Florida in cooperation with the state of Florida Department of Environmental Protection and the current owner of the property. The Company has expended approximately $140,000 to date in remediation expenses and anticipates approximately another $40,000 to complete the project over the remainder of 2005. Also, the Company may have certain limited clean-up responsibilities regarding a replacement tenantelected at the facility.

Clean Air Act.The federalClean Air Actrequires the U.S. Environmental Protection Agency (“EPA”) to promulgate, among other things, standards applicable to the emission2004 annual meeting of volatile organic compounds and other air pollutants. The Company’s chemical and petroleum product carrier vessels are subject to such vapor control and recovery requirements when loading, unloading, ballasting, cleaning,

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and conducting other operations in certain ports and are equipped with vapor control systems that satisfy these requirements in all material respects. In addition, the EPA has issued regulations addressing air emission requirements applicable to marine engines. These standards will require modifications to new or replacement marine diesel engines in some cases.

Coastwise Laws.A substantial portion of the Company’s operations is conducted in the U.S. domestic trade, which is governed by the coastwise laws of the United States (commonly referred to as theJones Act). The coastwise laws reserve tankers (including harbor tug services) operating between points in the United States (including drilling rigs fixed to the ocean floor on the U.S. outer continental shelf, under theOuter Continental Shelf Act) to vessels built in and documented under the laws of the United States (U.S.-flag) and owned and manned by U.S. citizens, with an exception to the ownership requirement with respect to foreign owned financial entities which own and lease U.S. vessels to U.S. citizen operators. Generally, a corporation is deemed a U.S. citizen so long as (i) it is organized under the laws of the United States or a state, (ii) each of its president or other chief executive officer and the chairman of its board of directors is a citizen, (iii) no more than a minority of the number of its directors necessary to constitute a quorum for the transaction of business are non-citizens, and (iv) 75.0% of the interest and voting power in the corporation are held by U.S. citizens.

     Under the citizenship provisions of theU.S. Merchant Marine Act of 1920(“Jones Act”) and theShipping Act of 1916, the Company would lose the privilege of engaging in U.S. coastwise trade if more than 25% of the Company’s outstanding stock was owned by non-U.S. citizens. The Company has a dual stock certificate system to prevent non-U.S. citizens from owning more than 25% of the Company’s common stock. In addition, the Company’s charter provides the Company with certain remedies with respect to any transfer or purported transfer of shares of the Company’s common stock that would result in the ownership by non-U.S. citizens of more than 25% of its common stock.

     The laws of the United States provide that once a vessel is registered under a foreign-flag it cannot thereafter engage in the U.S. coastwise trade. Therefore, the Company’s non-U.S.-flag vessels must continue to be operated abroad, and if the Company was not able to secure charters or contracts abroad for them, and work would otherwise have been available for them in the United States, its operations would be adversely affected. Of the total vessels owned or operated by the Company at December 31, 2004, 76 were registered under the U.S. flag and 72 were registered under foreign flags.

     The Company’s offshore vessels and foreign-flag tankers are subject to international safety and classification standards. U.S.-flag tanker and offshore support vessels operating in the United States are required to undergo periodic inspections and to be recertified under drydock examination at least every five years. Vessels registered under flags other than the United States are subject to similar regulations as governed by the laws of the applicable jurisdictions.

     There have been repeated efforts aimed to repeal or significantly change theJones Act. Although we believe it is unlikely that theJones Actwill be substantially modified or repealed, there can be no assurance that Congress will not substantially modify or repeal it or that Coast Guard interpretations of it may weaken it. Such changes could have a material adverse effect on our operations and financial condition.

Occupational Health Regulations and Safety Act.The Company’s shoreside facilities and, as of 2001, the Company’s U.S.-based vessels, are subject to occupational safety and health regulations issued by the U.S. Occupational Safety and Health Administration (OSHA) and comparable state programs. Such regulations currently require the Company to maintain a workplace free of recognized hazards, observe safety and health regulations, maintain records and keep employees informed of safety and health practices and duties. The Company’s vessel operations are also subject to occupational safety and health

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regulations issued by the U.S. Coast Guard and, to an extent, OSHA. Such regulations currently require the Company to perform monitoring, medical testing and record keeping with respect to mariners engaged in the handling of the various cargoes transported by our chemical and petroleum product vessels."

Vessel Condition.The Company’s chemical and petroleum product tankers, offshore energy support vessels, and certain of the Company’s tugs are subject to periodic inspection and survey by, and drydocking and maintenance requirements of, the Coast Guard and/or the American Bureau of Shipping and other marine classification societies.

     The Company believes it is currently in compliance in all material respects with environmental and other laws and regulations, including health and safety requirements, to which the Company’s business and operations are subject. The Company is unaware of any pending or threatened material litigation or other material judicial, administrative or arbitration proceedings against us based on any alleged non-compliance with or liability under such laws or regulations,stockholders, with the exception of Mr. Clare, who was appointed in October 2004, to replace Ari Benacerraf who resigned in September 2004. Pursuant to the potential for a dispute, claim or litigationStockholders’ Agreement (see Item 13), Nautilus Acquisition, L.P. (which we refer to as Nautilus in connection withthis report) has designated Messrs. Clare, Durkin, Huseman and Webster as directors and C/R Marine Domestic Partnership, L.P., C/R Marine Non-U.S. Partnership, L.P., C/R Marine Coinvestment , L.P., and C/R Marine Coinvestment II, L.P. (which we refer to collectively as the Sun State remediation matter referred to above. The risks of substantial costs, liabilities, penaltiesC/R Entities in this report) collectively have designated Messrs. Lapeyre and other sanctions for releases of oil or hazardous materials intoLeuschen as directors. Both Nautilus and the environment or non-complianceC/R Entities are however, inherent in marine operations, and there can be no assurance that significant costs, liabilities, penalties or other sanctions will not be incurred by or imposed on us in the future.

International Laws and Regulations.The Company’s vessels that operate internationally are subject to various international conventions, including certain safety, environmental and construction standards, as well as foreign local laws. Among the more significantaffiliates of the conventions applicableCompany. Pursuant to the fleet are: (i)terms of the International Convention forMerger Agreement, upon consummation of the PreventionMerger, all the directors will resign from serving on our board of Pollution from Ships, 1973, 1978 Protocol, (ii) the International Conventiondirectors and none of them will serve on the Safetyboard of Life at Sea, 1978 Protocol, including the International Management Code for the Safe Operation of Ships and for Pollution Prevention, which went into effect for tank vessels on July 1, 1998, and (iii) the International Convention on Standards of Training, Certification and Watchkeeping for Seafarers, 1978, as amended in 1995. These conventions govern oil spills and other matters of environmental protection, worker health and safety, and the manning, construction and operation of vessels. Generally, surveys and inspections are performed by internationally recognized classification societies. The vessels that operate internationally are registered primarily in the Marshall Islands, Liberia and Panama.

     Although the Company believes it is in substantial compliance with all applicable requirements, the risks of incurring substantial compliance costs and liabilities and penalties for noncompliance are inherent in marine operations and there can be no assurance that significant costs, liabilities, penalties and other sanctions will not be incurred by us or imposed on us in the future.

I. Insurance

     The Company’s operations are subject to the normal hazards associated with operating vessels carrying large volumes of cargo and rendering services in a marine environment. These hazards include the risk of loss of or damage to the Company’s vessels, damage to third parties as a result of collision, loss, or contamination of cargo, personal injury of employees and third parties, and pollution and other environmental damages. The Company maintains insurance coverage against these hazards with certain deductibles for which we are responsible. Risk of loss of or damage to the Company’s vessels is insured through hull and machinery insurance policies in amounts that approximate fair market value, also subject to certain deductibles. Vessel operating liabilities, such as collision, cargo, environmental, and personal injury, are insured primarily through our participation in a mutual insurance association, the West of England Association (“West of England”).

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     As of February 20, 2004, the Company switched its protection and indemnity (“P&I”) marine insurance club from Steamship Mutual (“Steamship”) to West of England Association (“West of England”). The premium for 2005 is approximately $223,000 greater than the premium for 2004. The per incident deductible for U.S. Gulf offshore claims decreased from $375,000 to $250,000 for 2005. Because the Company maintains mutual insurance, the Company is subject to potential additional premiums for prior years due to funding requirements and coverage shortfalls of the clubs in the event claims exceed available funds, reserves and reinsurance, and to future premium increases based on prior underwriting loss experience. In order to cover potential future additional insurance calls which might be made by Steamship Mutual for 2002 and 2003, the Company was required to post a letter of credit in the amount of approximately $1.9 million to support such potential additional calls as a condition to its departure from Steamship. The letter of credit will be returned if no additional insurance calls are made. Potential claims liabilities are recorded as insurance expense reserves when they become probable and can be reasonably estimated.

     The Company carries workers’ compensation, maritime employer’s liability, general liability, directors and officer liability, and other insurance customary in the industry. The Company also carries War Risk insurance for all of its vessels for both hull and machinery damage to the vessels and protection and indemnity liability. This insurance provides coverage for marine perils including war, terrorism, sabotage, riots, seizure and piracy.

     The terrorist attacks on the United States on September 11, 2001, and the continued threat of terrorist activity, together with uncertain investment performance for future years, have created uncertainty in the insurance markets. It is also possible that acts of terrorism could be directed against U.S. companies such as ours. These uncertainties have contributed to significant increases in the premiums quoted for our insurance coverages, which in turn has also contributed to substantial increases in the Company’s insurance deductibles and self-insured retention levels.

     P&I insurance expense decreased by approximately $1.8 million from $9.3 million in 2003 to $7.5 million in 2004. Over the last several years, premiums of both marine and non-marine insurers have been adversely impacted by the erosion of reserves, underwriting losses and increased reinsurance costs. The Company’s hull and machinery insurance was renewed in October 2004. We maintain high levels of self-insurance for P&I and hull and machinery risks through the use of substantial deductibles and self-insured retentions, which may increase in the future. In 2004 we increased our U.S. Gulf offshore segment deductible to $375,000 per incident but eliminated the self-insurance layer we had in prior years. In 2005 that deductible was reduced to $250,000 per incident. We carry coverage related to loss of earnings subject to deductibles ranging from 14 to 30 days for our tanker operations, but not for our offshore and tug operations. Insurance costs represented approximately 6.2% of vessel and voyage costs in 2004.

J. Security

     Heightened awareness of security needs brought about by the events of September 11, 2001 has caused the U.S. Coast Guard, the International Maritime Organization, and the states and local ports to adopt heightened security procedures relating to ports and vessels. The Company has updated its procedures in light of the new requirements.

     In 2002 Congress passed theMaritime Transportation Security Act(the Act) which, together with the International Maritime Organization’s recent security proposals (collectively known as The International Ship and Port Facility Security Code), requires specific security plans for our vessels and more rigorous crew identification requirements. The Company has implemented vessel security plans and procedures for each of its U.S.-flag vessels pursuant to rules implementing the Act which have been

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issued by the U.S. Coast Guard. The Company anticipates that the costs of security for our business will continue to increase. In addition, both the Company’s U.S.-flag and foreign-flag vessels have been certified under the International Ship and Port Facility Security (ISPS) Code effective July 1, 2004.

K. Risks of Operating Internationally

     The Company’s international offshore vessel support operations are subject to the usual risks inherent in doing business in countries other than the United States. Such risks include changing political conditions, local cabotage and content laws, possible vessel seizure, company nationalization and other governmental actions, currency restrictions and revaluations, import/export restrictions, increases in duty taxes and royalties, war, and terrorist attacks, all of which are beyond the control of the Company.

     In Nigeria there has recently been legislation enacted which will provide for certain Nigerian ownership and crew requirements for offshore vessel support operators such as the Company operating in Nigeria. Waivers of these laws may be obtained in Nigeria through the annual payment of prescribed vessel fees. It is expected that such fees will increase our costs in Nigeria, where we have 20 offshore vessels. The Company has entered into a joint venture with Nigerian interests to operate Nigerian-flag crewboats in Nigeria, partially in response to Nigerian cabotage and local content laws. Although it is impossible to fully predict the effect of any of these developments on the Company, the Company believes these risks to be within acceptable limits and, in view of the mobile nature of the Company’s principal revenue producing assets, does not consider them at this time to constitute a factor materially adverse to the conduct of its international offshore vessel support operations as a whole.

L. Employees

     As of February 1, 2005, the Company had 2,502 employees. Management considers relations with employees to be satisfactory. Renegotiations of labor contracts are on-going. The Company has various collective bargaining arrangements in its towing and tanker segments with expiration dates through December 31, 2007. The Company has approximately 500 members of national maritime labor unions, with approximately 90 members of unions with collective bargaining arrangements expiring by March 31, 2005.

M. Executive Officers of the Registrant

     The following table provides information on the Company’s current executive officers.SEACOR Holdings, Inc.

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          Mr. Kurzwas elected Chief Executive Officer and a Director of the Company in April 2000, President in September 2000, and Chairman in September 2002. He formerly served as President of Mobil Shipping and Transportation Company (MOSAT), a Mobil Oil-affiliated company from which he retired in March 2000. Mr. Kurz joined Mobil in London in 1964 as a Chartering Assistant. In 1965 he was transferred to Mobil’s Marine Division in New York. After a series of assignments, he was named Vice President of Planning, Middle East and Marine Transportation, and then President of MOSAT in 1989. Mr. Kurz is past Chairman of the Marine Preservation Association and the Oil Companies International Marine Forum. He serves on the Board of Directors of the American Bureau of Shipping and chairs its Audit Committee. He previously chaired its Finance and Nominating Committees. He also serves on the Boards of the Seamen’s Church Institute and the Coast Guard Foundation. He is a founding member and Chairman of the Massachusetts Maritime Academy’s International Business Advisory Council and a member of the International Advisory Board to the Panama Canal Authority.

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          Mr. Twaitshas been Senior Vice President, General Counsel and Secretary since November 2000. He was previously Senior Vice President, General Counsel and Secretary of Premier Cruise Lines.

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	•	weather conditions;
	•	environmental regulation; and
	•	the ability of oil and natural gas companies to generate or otherwise obtain funds for capital.

     We expect levels of oil and natural gas exploration, development and production activity to continue to be volatile and affect the demand for and rates of our offshore energy support services and, to a lesser extent, tanker services.

     A prolonged material downturn in oil and natural gas prices is likely to cause a substantial decline in expenditures for exploration, development and production activity. Lower levels of expenditure and activity would result in a decline in the demand and lower rates for our offshore energy support services and tanker services. Moreover, approximately 25% of our offshore energy support services are currently conducted in the Gulf of Mexico and are therefore dependent on levels of activity in that region, which may differ from levels of activity in other regions of the world.

Excess vessel supply could depress day rates, charter or spot market rates, and adversely affect our operating results.

     Increases in oil and natural gas prices and higher levels of expenditure by oil and natural gas companies for exploration, development and production may not result in increased demand for our offshore energy support services and tanker services. For example, our offshore energy support segment is affected by the supply of and demand for offshore energy support vessels. During periods when supply exceeds demand, there is significant downward pressure on the rates we can obtain for our vessels. Because vessel operating costs cannot be completely reduced, any reduction in rates adversely affects our results of operations. Currently, demand for our offshore energy support vessels in the important Gulf of Mexico market has improved somewhat, a trend that began in the second half of 2004, particularly in the deep water areas. A significant increase in the capacity of the offshore energy support industry through new construction could not only potentially lower day rates, which would adversely affect our revenues and profitability, but could also worsen the impact of any downturn in oil and natural gas prices on our results of operations and financial condition. Similarly, should our competitors in the domestic petroleum and chemical product tankers industry construct a significant number of new tankers or large capacity integrated or articulated tug and barges, demand for our tanker assets could be negatively impacted. During 2004 there were no newly built U.S.-flagJones Actproduct tankers, and no comparably sized tug and barge tank vessels have been announced or delivered in the domestic industry.

The consolidation or loss of companies that charter our offshore energy support and tanker vessels could adversely affect demand for our vessels and reduce our revenues.

     Oil and natural gas companies, energy companies and drilling contractors have undergone substantial consolidation in the last few years and additional consolidation is likely. Consolidation results in fewer companies to charter or contract for our vessels. Also, merger activity among both major and independent oil and natural gas companies affects exploration, development and production activity as the consolidated companies integrate operations to increase efficiency and reduce costs. Less promising exploration and development projects of a combined company may be dropped or delayed. Such activity may result in an exploration and development budget for a combined company that is lower than the total budget of both companies before consolidation, adversely affecting demand for our offshore energy support vessels and tankers, thereby reducing our revenues.

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Intense competition in our lines of business could result in reduced profitability and loss of market share for us.

     Contracts for our vessels are generally awarded on a competitive basis, and competition in the offshore energy support segment is intense. The most important factors determining whether a contract will be awarded include:

	•	suitability, reliability and capability of equipment;
	•	safety record;
	•	age of equipment;
	•	personnel;
	•	price;
	•	service; and
	•	reputation.

     Many of our major competitors are much larger companies with substantially greater financial resources and substantially larger operating staffs than we have. They may be better able to compete in making vessels available more quickly and efficiently or in constructing new vessels, meeting customers scheduling needs, and withstanding the effect of downturns in the market. As a result, we could lose customers and market share to these competitors.

Acquisitions of vessels and businesses involve risks that could adversely affect our results of operations.

     From time to time we consider possible acquisitions of vessels, vessel fleets and businesses that complement our existing operations. Consummation of such acquisitions is typically subject to the negotiation of definitive agreements. We can give no assurance that we will be able to identify desirable acquisition candidates or that we will be successful in entering into definitive agreements on terms we regard as favorable or satisfactory. Moreover, even if we do enter into a definitive acquisition agreement, the related acquisition may not thereafter be completed. We may be unable to integrate any particular acquisition into our operations successfully or realize the anticipated benefits of the acquisition. The process of integrating acquired operations into our own may result in unforeseen operating difficulties, may absorb significant management attention and may require significant financial resources that would otherwise be available for the ongoing development or expansion of our existing operations. Future acquisitions could result in the incurrence of additional indebtedness and liabilities which could have a material adverse effect on our financial condition and results of operations.

We conduct international operations, which involve additional risks.

     We operate vessels worldwide. Operations outside the U.S. involve additional risks, including the possibility of:

	•	restrictive actions by foreign governments, including vessel seizure;
	•	foreign taxation and changes in foreign tax laws;
	•	limitations on repatriation of earnings;
	•	changes in currency exchange rates;
	•	local cabotage and local ownership laws and requirements;
	•	nationalization and expropriation;

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	•	loss of contract rights; and
	•	political instability, war and civil disturbances or other risks that may limit or disrupt markets.

     Our ability to compete in the international offshore energy support market may be adversely affected by foreign government regulations that favor or require the awarding of contracts to local persons, or that require foreign persons to employ citizens of, or purchase supplies from, a particular jurisdiction. Further, our foreign subsidiaries may face governmentally imposed restrictions on their ability to transfer funds to their parent company.

Revenue from our tanker segment and towing segment could be adversely affected by a decline in demand for domestic refined petroleum products, crude oil or chemical products, or a change in existing methods of delivery in response to certain conditions that may develop.

     A reduction in domestic consumption of refined petroleum products, crude oil or chemical products may adversely affect revenue from our tanker segment and towing segment and therefore our financial condition and results of operations. Weather conditions also affect demand for our tanker services and towing services. For example, a mild winter may reduce demand for heating oil in our areas of operation. Moreover, alternative methods of delivery of refined petroleum, natural gas or crude oil may develop as a result of:

Construction of additional refined petroleum product, natural gas or crude oil pipelines, which could have a material adverse effect on our tanker and towing revenues.

     Long-haul transportation of refined petroleum products, crude oil and natural gas is generally less costly by pipeline than by tanker. Existing pipeline systems are either insufficient to meet demand in, or do not reach all of, the markets served by our tankers. New pipeline segments are being planned and approved for the Florida market. Such activity could have an adverse effect on the volume of our tanker and towing businesses.

Our offshore energy support fleet includes many older vessels.

     The average age of our offshore energy support vessels, based on the later of the date of construction or rebuilding, is approximately 17 years. Approximately 52% of these vessels are more than 20 years old. We believe that after a vessel has been in service for approximately 30 years, repair, vessel certification and maintenance costs may not be economically justifiable. We may not be able to maintain our fleet by extending the economic life of existing vessels through major refurbishment or by acquiring new or used vessels. Some of our competitors have newer fleets and may be able to compete more effectively against us.

We are subject to complex laws and regulations, including environmental laws and regulations that can adversely affect the cost, manner or feasibility of doing business.

     Increasingly stringent federal, state, local and international laws and regulations governing worker safety and health and the manning, construction and operation of vessels significantly affect our operations. Many aspects of the marine industry are subject to extensive governmental regulation by the U.S. Coast Guard, Occupational Safety and Health Administration, the National Transportation Safety Board and the U.S. Customs Service and to regulation by port states and class society organizations such as the American Bureau of Shipping, as well as to international regulations from international treaties such as the Safety of Life at Sea (“SOLAS”) convention administered by port states and class societies. The U.S. Coast Guard, Occupational Safety and Health Administration, and the National Transportation Safety Board set safety standards and are authorized to investigate vessel accidents and recommend improved safety standards. The U.S. Customs Service is authorized to inspect vessels at will.

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Item 4.Submission of Matters to a Vote of Security Holders.

     None.

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PART II

Item 5. Market for Registrant’s Common Equity, Related Stockholder Matters and Issuer Purchases of Equity Securities.

     The Common Stock of Seabulk International, Inc. trades on the NASDAQ National Market under the symbol SBLK.

     Warrants issued to former noteholders (the Noteholder Warrants) have an exercise price of $0.01 per share. These warrants expire on June 30, 2007. As of March 1, 2005 there were 157,570 Noteholder Warrants outstanding.

     The Company has not paid and does not expect to pay any dividends on its Common Stock. The Company declared no dividends in 2004 and 2003.

Item 12.	Security Ownership of Certain Beneficial Owners and Management and Related Stockholder Matters.

     The following tables settable sets forth the high and low closing pricescertain information regarding beneficial ownership of the Company’s Common Stock as reportedof April 1, 2005 by (i) each person who is known by the NASDAQ National Market.

     AsCompany to be the beneficial owner of March 1, 2005, there were 230 holders of recordmore than five percent of the Company’s outstanding Common Stock.

     The Company’s abilityStock, (ii) each director of the Company, (iii) each Named Executive, and (iv) all directors and executive officers of the Company as a group. Except as otherwise indicated, the Company believes that the beneficial owners of the Common Stock listed, based on information furnished by such owners, have sole investment and voting power with respect to pay dividends in the future issuch shares, subject to certain limitations, contained in the Company’s amended credit facility and the senior notes indenture. Information concerning the Company’s plans, which may involve the issuance of equity required by Item 5, “Market for Registrant’s Common Equity and Related Stockholder Matters,” will be incorporated by reference to Item 12, “Security Ownership of Certain Beneficial Owners and Management and Related Stockholder Matters,” of this Form 10-K and included in the Proxy Statement for the 2005 Annual Stockholders Meeting.

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