SECURITIES AND EXCHANGE COMMISSION

WASHINGTON, D.C. 20549

FORM 10-Q

QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934

For the quarterly period ended ~~June~~September 30, 2005

Commission File Number: 0-28732

SEABULK INTERNATIONAL, INC.

(a wholly-owned subsidiary of SEACOR Holdings Inc.)


State of Incorporation: Delaware				I.R.S. Employer I.D.: 65-0966399

Address and Telephone Number:
2200 Eller Drive
P.O. Box 13038
Ft. Lauderdale, Florida 33316
(954) 523-2200

Indicate by check mark whether the registrant (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding twelve months (or for such shorter period that the registrant was required to file such reports), and (2) has been subject to such filing requirements for the past ninety days. YESþ NOo

Indicate by check mark whether the registrant is an accelerated filer (as defined in Rule 12b-2 of the Exchange Act). YESo NOþ

Indicate by check mark whether the registrant has filed all documents and reports required to be filed by Section 12, 13 or 15(d) of the Securities Act of 1934 subsequent to the distribution of securities under a plan confirmed by a court. YESþ NOo

~~There were 100 shares~~Indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of ~~Common Stock, par value $0.01 per share, outstanding at August 8, 2005.~~the Exchange Act). Yeso Noþ

The registrant meets the conditions set forth in General Instruction H(1)(a) and (b) of Form 10-Q and is therefore filing this ~~Form~~form with the reduced disclosure format.

There were 100 shares of Common Stock, par value $0.01 per share, outstanding at November 7, 2005.

PART I. FINANCIAL INFORMATION

Item 1. Condensed Consolidated Financial Statements

Seabulk International, Inc. and Subsidiaries

(a wholly-owned subsidiary of SEACOR Holdings Inc.)

Condensed Consolidated Balance Sheets (Unaudited)
(in thousands)

~~(in thousands, except par value data)~~


							September 30,			December 31,
							2005				2004
	June 30,			December 31,			Successor			Predecessor
	2005			2004			Company			Company
Assets
Current assets:
Cash and cash equivalents	$	27,442		$	18,949		$	64,863		$	18,949
Restricted cash		32,258			35,681			46,781			35,681
Trade accounts receivable, net of allowance for doubtful accounts of $6,854 and $5,649 in 2005 and 2004, respectively		51,437			55,209
Trade accounts receivable, net of allowance for doubtful accounts of $6,820 and $5,649 in 2005 and 2004, respectively								57,109			55,209
Other receivables		3,774			3,784			3,295			3,748
Marine operating supplies		7,668			7,868			4,437			7,868
Vessels held for sale								8,155			—
Prepaid expenses and other		3,929			3,627			10,948			3,627

Total current assets		126,508			125,118			195,588			125,118

Vessels and equipment, net		590,943			598,793			862,874			598,793
Deferred costs, net		40,493			45,053			—			45,053
Goodwill								59,329			—
Intangible assets, net								35,807			—
Other		26,318			17,824			19,531			17,824

Total assets	$	784,262		$	786,788		$	1,173,129		$	786,788


Liabilities and Stockholders’ Equity
Current liabilities:
Accounts payable	$	9,858		$	14,918		$	9,457		$	14,918
Current maturities of long-term debt		15,661			16,653			9,959			16,653
Current obligations under capital leases		3,354			3,708			3,170			3,708
Accrued interest		5,633			4,875			6,266			4,875
Due to affiliates								799			—
Accrued liabilities and other		33,962			35,321			41,410			35,321

Total current liabilities		68,468			75,475			71,061			75,475

Long-term debt		309,353			325,965			295,583			325,965
Senior notes		154,219			152,906			155,255			152,906
Senior notes due to affiliates								13,164			—
Obligations under capital leases		27,097			28,568			28,068			28,568
Deferred taxes, net								88,703			—
Other liabilities		6,150			4,879			5,490			4,879

Total liabilities		565,287			587,793			657,324			587,793

Commitments and contingencies

Stockholders’ equity:
Preferred stock, no par value-authorized 5,000; issued and outstanding, none		—			—
Common stock-$.01 par value, authorized 40,000 shares; 23,436 and 23,446 shares issued and outstanding in 2005 and 2004, respectively		234			234
Preferred stock, no par value-none authorized, issued or outstanding at September 30, 2005; 5,000 shares authorized, no shares issued and outstanding at December 31, 2004								—			—
Common stock–$.01 par value, 100 shares authorized and outstanding at September 30, 2005; 40,000 shares authorized, 23,410 shares issued and outstanding at December 31, 2004								—			234
Additional paid-in capital		261,799			259,843			522,698			259,843
Accumulated other comprehensive income		—			55
Unearned compensation		(1,880	)		(758	)		—			(758	)
Other comprehensive income								—			55
Accumulated deficit		(41,178	)		(60,379	)		(6,893	)		(60,379	)

Total stockholders’ equity		218,975			198,995			515,805			198,995

Total liabilities and stockholders’ equity	$	784,262		$	786,788		$	1,173,129		$	786,788

Seabulk International, Inc. and Subsidiaries
(a wholly-owned subsidiary of SEACOR Holdings, Inc.)

Condensed Consolidated Statements of Operations (Unaudited)
(in thousands)

~~(in thousands, except per share data)~~


																	Pre-Merger Period
	Three Months Ended						Six Months Ended						Three Months Ended				Ended			Three Months Ended			Three Months Ended			January 1, 2005 -			Nine Months Ended
	June 30,						June 30,						September 30, 2005				July 1, 2005			September 30, 2004			September 30, 2005			July 1, 2005			September 30, 2004
	2005			2004			2005			2004			Successor Company				Predecessor Company						Successor Company			Predecessor Company
Revenue	$	96,687		$	87,203		$	192,268		$	169,737		$	97,864			$	—		$	89,361		$	97,864		$	192,268		$	259,098
Vessel and voyage expenses:
Crew payroll and benefits		23,072			21,697			45,672			44,278			23,185				—			22,066			23,185			45,672			66,344
Charter hire		4,375			3,944			9,267			7,531			5,043				—			3,199			5,043			9,267			10,730
Repairs and maintenance		5,760			7,974			10,405			14,172			14,644				—			5,943			14,644			10,405			20,115
Insurance		3,324			3,704			6,505			6,324			2,963				—			2,929			2,963			6,505			9,253
Fuel and consumables		7,073			7,795			14,356			14,810			6,505				—			7,373			6,505			14,356			22,183
Port charges and other		6,222			5,080			11,548			9,986			4,771		��		—			5,451			4,771			11,548			15,437

		49,826			50,194			97,753			97,101			57,111				—			46,961			57,111			97,753			144,062
General and administrative		12,041			9,323			21,609			18,748			9,358				10,420			9,332			9,358			32,029			28,080
Depreciation, amortization and drydocking		16,577			17,127			33,097			32,917			27,253				—			16,723			27,253			33,097			49,640
Gain on disposal of assets, net		(453	)		(1,989	)		(323	)		(1,977	)		—				—			(446	)		—			(323	)		(2,423	)

Income from operations		18,696			12,548			40,132			22,948			4,142				(10,420	)		16,791			4,142			29,712			39,739
Other income (expense):
Interest expense		(9,259	)		(8,375	)		(18,685	)		(16,444	)		(8,244	)			—			(8,422	)		(8,244	)		(18,685	)		(24,866	)
Intercompany interest expense														(273	)			—			—			(273	)		—			—
Interest income		167			52			313			118			464				—			91			464			313			209
Minority interest in (gains) losses of subsidiaries		—			(20	)		—			58
Minority interest in gains of subsidiaries														—				—			(241	)		—			—			(183	)
Derivative loss														(4,109	)			—			—			(4,109	)		—			—
Other, net		41			52			33			4,576			5				—			63			5			33			4,639

Total other expense, net		(9,051	)		(8,291	)		(18,339	)		(11,692	)		(12,157	)			—			(8,509	)		(12,157	)		(18,339	)		(20,201	)
(Loss) income before (benefit) from provision for income taxes														(8,015	)			(10,420	)		8,282			(8,015	)		11,373			19,538
(Benefit from) provision for income taxes														(1,122	)			—			1,469			(1,122	)		2,592			4,354

Income before provision for income taxes		9,645			4,257			21,793			11,256
Provision for income taxes		1,624			1,536			2,592			2,885
Net (loss) income													$	(6,893	)		$	(10,420	)	$	6,813		$	(6,893	)	$	8,781		$	15,184

Net income	$	8,021		$	2,721		$	19,201		$	8,371

Net income per common share:
Net income per common share — basic	$	0.34		$	0.12		$	0.82		$	0.36

Net income per common share — diluted	$	0.33		$	0.12		$	0.79		$	0.35


Weighted average common shares outstanding — basic		23,366			23,261			23,347			23,255

Weighted average common shares outstanding — diluted		24,527			23,598			24,400			23,696

Seabulk International, Inc. and Subsidiaries
(a wholly-owned subsidiary of SEACOR Holdings, Inc.)

Condensed Consolidated Statements of Cash Flows (Unaudited)

(in thousands)

Six Months Ended
June 30,
2005 2004
Operating activities:

Net income $ 19,201 $ 8,371
Adjustments to reconcile net income to net cash provided by operating activities:
Depreciation of vessels and equipment 19,928 20,222
Expenditures for drydocking (9,457 ) (10,473 )
Amortization of drydocking costs 13,169 12,695
Amortization of discount on long-term debt and financing costs 825 857
Amortization of unearned compensation 388 —
Provision for bad debts 1,405 1,631
Gain on disposal of assets, net (323 ) (1,977 )
Minority interest in losses of subsidiaries — (58 )
Other — 119
Changes in operating assets and liabilities:
Trade accounts and other receivables 2,377 575
Other current and long-term assets (7,546 ) (4,172 )
Accounts payable and other liabilities (4,387 ) (6,695 )

Net cash provided by operating activities 35,580 21,095

Investing activities:

Proceeds from disposals of assets 5,128 3,145
Purchases of vessels and equipment (16,641 ) (83,533 )
Investment in Joint Venture — (240 )

Net cash used in investing activities (11,513 ) (80,628 )

Financing activities:

Proceeds from Amended Credit Facility — 20,000
Payments on Amended Credit Facility (15,500 ) —
Proceeds from long-term debt 8,130 49,600
Payments of long-term debt (4,654 ) (3,166 )
Payments of Title XI bonds (5,580 ) (3,535 )
Payments of obligations under capital leases (1,825 ) (1,725 )
Payments of deferred financing costs related to 2003 Senior Notes and Amended Credit Facility — (285 )
Payments of other deferred financing costs (14 ) (683 )
Proceeds from exercise of stock options 446 167
Decrease in restricted cash 3,423 2,043

Net cash (used in) provided by financing activities (15,574 ) 62,416

Change in cash and cash equivalents 8,493 2,883
Cash and cash equivalents at beginning of period 18,949 7,399

Cash and cash equivalents at end of period
$ 27,442 $ 10,282

Supplemental schedule of non-cash investing and financing activities:

Obligation for fair market value of interest rate swap $ 1,313 $ (3,478 )

~~See notes to condensed consolidated financial statements.~~


					Three Months Ended			January 1, 2005 -			Nine Months Ended
					September 30, 2005			July 1, 2005			September 30, 2004

					Successor Company			Predecessor Company

Operating activities:
	Net (loss) income				$	(6,893	)	$	8,781		$	15,184
		Adjustments to reconcile net (loss) income to net cash provided by operating activities:
			Depreciation of vessels and equipment			26,160			19,928			30,442
			Capitalized drydock costs			—			(9,457	)		(18,118	)
			Amortization of drydocking costs			—			13,170			19,198
			Amortization of identifiable intangible assets			1,093			—			—
			Amortization of (premium) discount on long-term debt and deferred financing costs			(748	)		825			1,280
			Amortization of unearned compensation			—			2,268			—
			(Recovery of) provision for bad debts			(13	)		1,405			2,085
			Deferred tax benefit			(2,805	)		—			—
			Minority interest in gains of subsidiaries			—			—			183
			Gain on disposal of vessels and equipment			—			(323	)		(2,423	)
			Derivative loss			4,109			—			—
			Other			—			—			187
			Changes in operating assets and liabilities, net of effects from acquisition of businesses:
			Trade accounts and other receivables			(6,272	)		2,377			2,290
			Other current and long term assets			643			(6,204	)		(3,640	)
			Due to/from affiliates			1,072			—			—
			Accounts payable and other liabilities			(151	)		2,810			(9,164	)

Net cash provided by operating activities						16,195			35,580			37,504


Investing activities:
	Proceeds from sale of vessels and equipment					—			5,128			3,770
	Proceeds from sale of vessels held for sale					87,980			—			—
	Purchases of vessels and equipment					(8,555	)		(16,641	)		(92,717	)
	Cash settlements of derivative transactions					1,202			—			—
	Acquisition of minority interest					—			—			(240	)

				Net cash provided by (used in) investing activities		80,627			(11,513	)		(89,187	)


Financing activities:
	Proceeds from amended credit facility					—			—			20,000
	Payments on amended credit facility					—			(15,500	)		(1,483	)
	Proceeds from long-term debt					44			8,130			57,193
	Payments on long-term debt					(43,986	)		(4,654	)		(5,489	)
	Payments on Title XI debt					—			(5,580	)		(3,984	)
	Principal payments on capital lease obligations					(936	)		(1,825	)		(2,600	)
	Payments of deferred financing costs on senior notes and amended credit facility					—			—			(285	)
	Payments of other deferred financing costs					—			(14	)		(823	)
	Proceeds from exercise of stock options					—			446			175
	(Increase) decrease in restricted cash					(14,523	)		3,423			(7,287	)

Net cash (used in) provided by financing activities						(59,401	)		(15,574	)		55,417


Change in cash and cash equivalents						37,421			8,493			3,734


Cash and cash equivalents, beginning of year						27,442			18,949			7,399

Cash and cash equivalents, end of year					$	64,863		$	27,442		$	11,133


Supplemental schedule of non-cash investing and financing activities:
	Obligation for fair market value of interest rate swap—				$	—		$	1,313			1,214

(a wholly-owned subsidiary of SEACOR Holdings Inc.)

Notes to Condensed Consolidated Financial Statements

~~June~~
September 30, 2005 (Unaudited)

1. Organization and Basis of Presentation

Effective July 1, 2005, a change of control occurred and Seabulk International, Inc. and Subsidiaries (the “Company”) is now a wholly-owned subsidiary of SEACOR Holdings Inc. (“SEACOR”) (see Note 2).

The accompanying unaudited condensed consolidated financial statements have been prepared in accordance with accounting principles generally accepted in the United States of America for interim financial information and with Article 10 of Regulation S-X. The consolidated balance sheet at December 31, 2004 has been derived from the audited financial statements at that date. The unaudited condensed consolidated financial statements and the consolidated balance sheet do not include all of the information and footnotes required by accounting principles generally accepted in the United States of America for complete financial statements. All adjustments which, in the opinion of management, are considered necessary for a fair presentation of the results of operations for the periods shown are of a normal recurring nature and have been reflected in the unaudited condensed consolidated financial statements. The results of operations for the periods presented are not necessarily indicative of the results expected for the full fiscal year or for any future period. The information included in these unaudited condensed consolidated financial statements should be read in conjunction with Management’s Discussion and Analysis of Financial Condition and Results of Operations contained in this report and the consolidated financial statements and accompanying notes included in the Company’s Annual Report on Form 10-K and Form 10-K/A Amendment No. 1 for the fiscal year ended December 31, 2004. For the ~~six~~three months ended ~~June~~September 30, 2005 the Company’s only component of comprehensive loss was net loss. For the period January 1, 2005 to July 1, 2005 the Company’s components of comprehensive income included net income and a foreign currency contract for approximately $55,000. For the nine months ended September 30, 2004 the Company’s components of comprehensive income ~~include~~included net income and a foreign currency forward contract for approximately ~~$55,000 and $84,000, respectively. As of June 30, 2005, the foreign currency forward contract was expired.~~$7,000.

2. Merger

On March 16, 2005, ~~SEACOR Holdings Inc., a Delaware corporation (“SEACOR”),~~the Company entered into a merger agreement (the “Merger Agreement”) with ~~Seabulk International, Inc., a Delaware corporation (“Seabulk” or the “Company”),~~SEACOR, SBLK Acquisition Corp. (“Merger Sub”), a ~~Delaware corporation and a~~ direct ~~wholly owned~~wholly-owned subsidiary of SEACOR, ~~(“Merger Sub”)~~ and CORBULK LLC ~~a Delaware limited liability company and~~(“LLC”), a direct, ~~wholly owned~~wholly-owned subsidiary of SEACOR ~~(“LLC”). The Merger Agreement provides that, upon the terms and subject~~pursuant to the conditions set forth in the Merger Agreement, the Merger Sub will merge with and into Seabulk, with Seabulk continuing as the surviving corporation and a direct, wholly owned subsidiary of SEACOR (the “Merger”). As part of the transaction, entities associated with DLJ Merchant Banking Partners III, L.P. and Carlyle/Riverstone Global Energy and Power Fund I, L.P., who collectively owned approximately 75% of Seabulk’s common shares, entered into an agreement to support the transaction.

The merger was approved by the stockholders of the Company and SEACOR, and customary conditions, including regulatory approvals, were satisfied. The effective time and completion date of the Merger was July 1, 2005. At such time, Seabulk stockholders were entitled to receive in exchange forwhich each issued and outstanding share of Seabulk common stock would be exchanged for (i) $4.00 in cash and (ii) 0.2694 shares of SEACOR common ~~stock.~~stock (the “Merger”). The Merger was approved by the stockholders of the Company on June 27, 2005. On July 1, 2005, the Company completed the Merger and became a wholly–owned subsidiary of SEACOR. Based on ~~SEACOR’s~~the $64.30 closing price of ~~$64.30~~SEACOR common stock on June 30, 2005, the Company’s stockholders received approximately $21.32 in SEACOR common stock and cash for each share of Seabulk common stock.

On July 1, 2005, in connection with, but prior to, the Merger, the Company recorded expenses of approximately $10.4 million including: 1) payment of an investment advisory fee of $1.5 million to the Company’s ~~stock. The~~investment bankers; 2) payment of severance and termination benefits of $4.5 million to certain of the Company’s ~~stock ceased trading at the close of business on June 30, 2005~~employees, in accordance with employment and severance contracts and the Company began operating as a wholly owned subsidiary of SEACOR beginning July 1, 2005. All outstanding Seabulk stock options are being assumed by SEACOR. Each such option for Seabulk common stock is exercisable for SEACOR common stock under the exchange ratio, plus the cash component.

Company’s change in control severance policy in place prior to the effective date of the Merger; 3) payment of $1.2 million for directors and officers insurance for terminated and/or resigned officers and directors; 4) a charge of $1.3 million to expense certain costs which had been capitalized related to a securities offering the Company was considering prior to the Merger; and 5) a charge of $1.9 million due to unearned compensation resulting from the accelerated vesting of restricted stock grants previously awarded to certain employees.

The Merger was accounted for as a purchase with SEACOR as the acquiror in accordance with Statement of Financial Accounting Standards No. 141,Business Combinations(“SFAS No. 141”). Accordingly, the Company performed a preliminary fair value analysis, pursuant to which the purchase price was allocated to the assets and liabilities acquired including certain identifiable intangible assets, based on their estimated fair values as of July 1, 2005, with the excess of the purchase price over the fair value of the assets and liabilities acquired recorded as goodwill. Changes to the preliminary fair value analysis are expected as valuations of assets and liabilities are finalized and additional information becomes available. The purchase price adjustments were “pushed down” to the consolidated financial statements of the Company. The accompanying condensed consolidated financial statements for the period ended on or before June 30, 2005 and the pre-merger period ended July 1, 2005 were prepared using the Company’s historical basis of accounting and are designated as “Predecessor Company”. The accompanying condensed consolidated financial statements for the period subsequent to June 30, 2005 excluding the pre-merger period ended July 1, 2005 include the effects of the Merger and are designated as “Successor Company”.

3. ~~Vessel Purchases and Operations~~Summary of Significant Accounting Policies

~~During~~As a consequence of the ~~three months ended March 31, 2005,~~Merger, the Company ~~took delivery~~conformed certain accounting policies to those of its Parent. The accounting policies contained in this report should be read in conjunction with the Company’s accounting policies contained in the consolidated financial statements and ~~began~~accompanying notes included in the Company’s Annual Report on Form 10-K and Form 10-K/A Amendment No. 1 for the fiscal year ended December 31, 2004.

The accounting policies summarized below represent those which were conformed as of July 1, 2005 to ~~operate two offshore vessels. The transaction to acquire one~~that of the ~~offshore vessels was a like-kind exchange~~Company’s Parent:

Vessels and Equipment.Vessels and equipment are stated at cost, which is equal to fair value as of ~~assets of equal value and was a tax-free transaction to~~July 1, 2005 (see Note 2), less accumulated depreciation. Depreciation is computed using the ~~Company, in which~~straight line method over the ~~Company delivered four offshore vessels in exchange for one offshore vessel.~~

Additionally, during the three months ended March 31, 2005, the Company sold two offshore vessels and exchanged a third and $550,000 for another offshore vessel and the assignment of a purchase and sale agreement. The Company subsequently sold the offshore vessel under the termsestimated useful lives of the ~~assigned purchase and sale agreement. The transaction was a like-kind exchange~~assets. Estimated useful lives are 40 years from date of ~~assets~~build for the Towing fleet, 25 years from date of ~~equal value and was a tax free-transaction to~~build or the ~~Company. Proceeds from the sales~~required retirement date of the vessels ~~were approximately $2.3 million~~as determined by the Oil Pollution Act of 1990 for the Tanker fleet, and generally 20 years from date of build for the ~~net loss on~~Offshore fleet. Estimated useful lives for all other equipment are 2 to 15 years.

Repair and maintenance costs, including drydock expenditures, which are incurred to maintain the ~~sales~~vessels’ operating classification as mandated by maritime regulations, are charged to operating expense as incurred. Major renewals or betterments that extend the useful life or improve the marketing and commercial characteristics of the vessel are capitalized. Interest incurred on debt related to newbuild vessels ~~was approximately $103,000.~~is capitalized.

~~During~~Identifiable Intangible Assets. The Company evaluates identifiable intangible assets for impairment when events or changes in circumstances indicate the ~~three months ended June~~carrying value of the intangible asset may not be recoverable in accordance with Statement of Financial Accounting Standards No. 144,Accounting for the Impairment or Disposal of Long-Lived Assets. As of September 30, 2005 the Company ~~sold four offshore vessels. Proceeds from the sales~~was not aware of ~~the vessels were approximately $2.9 million and the net gain on the sales~~any indicators of ~~the vessels was approximately 449,000.~~

~~Management continues to implement its initiative to sell unprofitable vessels and add newer more efficient vessels to its fleet in an effort to improve profitability and liquidity.~~

~~In June 2005, the Company sold the~~~~Seabulk Freedom~~, a special purpose maintenance vessel operating in Southeast Asia to an unrelated third party (the “Buying Entity”) for the purpose of establishing a presence in the Malaysian market. The Company delivered the vessel, with a carrying value of approximately $0.7 million, as of June 30, 2005, in exchange for a $3.5 million note receivable and a ship management agreement from the Buying Entity. The ship management agreement stipulates that the Company is responsible for any operating deficits and capital improvements and calls for the note receivable plus accrued interest to be paid from the vessel revenues in excess of operating costs, management fees and commissions. The Buying Entity subsequently placed the vessel under theimpairment.

~~Malaysia flag and began a charter~~Goodwill.Goodwill recorded in ~~Malaysia on June 30, 2005. Based on~~ the terms of the sale and the ship management agreement, the Company determined the Buying Entity is a variable interest entity as defined in Financial Accounting Standards Board (“FASB”) Interpretation No. 46(R)~~Consolidation of Variable Interest Entities (revised December 2003) — an interpretation of ARB No. 51~~(“FIN No. 46(R)”). Therefore, in accordance with FIN No. 46(R), the Company is required to consolidate the financial position and results of operations of the Buying Entity and is precluded from recording a gain on the sale of the vessel. The accompanying condensed consolidated financial statements ~~include~~resulted from the ~~financial position~~Merger and ~~results~~was “pushed down” to the Company (see Note 2). In accordance with Statement of ~~operations~~Financial Accounting Standards No. 142,Accounting for Goodwill, the Company tests goodwill for impairment annually, at the end of each fiscal year, or in the interim period if events or changes in circumstances indicate the carrying value of goodwill may be impaired.

Income Taxes. As a consequence of the ~~Buying Entity in accordance with FIN No. 46(R).~~

~~In May~~merger, effective July 1, 2005 the Company ~~exercised existing options at~~will file a consolidated return as a subsidiary of its Parent. The current tax benefit included in the accompanying condensed consolidated statement of operations for the three months ended September 30, 2005, is recorded as if the Company had filed a separate return.

4. Vessel Purchases and Operations

In the nine months ended September 30, 2005, the Company sold two foreign-flag double-hull product tankers, one tugboat, and eleven offshore vessels for aggregate consideration of $93.2 million.

In October 2004, the Company contracted with Labroy Shipbuilding and Engineering Pte. Ltd. for the construction of four ~~additional~~ anchor handling tug supply vessels for its international ~~offshore fleet,~~fleet. The agreement also included an option for four additional vessels at a predetermined price. In May 2005, the Company exercised the options for the four additional anchor handling tug supply vessels, bringing the total number of vessels under construction to eight. The total remaining commitment, as of ~~June~~September 30, 2005, for the eight vessel package is approximately ~~$81.9~~$76.4 million. The vessels have various delivery dates beginning in early 2006 through early 2007.

As of September 30, 2005 the Company had approximately $8.2 million of vessels designated as held for sale. For the three months ended September 30, 2005, no depreciation expense for these vessels held for sale was recorded. The Company continues to operate certain of the vessels held for sale and the results of operations of those vessels is included in the accompanying condensed consolidated statement of operations for the three months ended September 30, 2005.

4.5. Income Taxes

The current provision for income taxes for the four periods January 1, 2005 – July 1, 2005, the pre-merger period ended July 1, 2005 and the three and ~~six-month periods~~nine months ended ~~June~~September 30, ~~2005 and~~ 2004, represents expected tax obligations on foreign-source revenue. For ~~the three and six months ended June 30, 2005 and 2004,~~those periods, a domestic tax provision was computed using an estimated annual effective tax rate of 35%. A corresponding reduction in the valuation allowance was recorded resulting in no net domestic income tax provision. Management has recorded a valuation allowance at ~~June 30, 2005 and~~December 31, 2004 to reduce the net deferred tax assets to an amount that is likely to be realized. After application of the valuation allowance, the net deferred tax assets are zero.

The current benefit from income taxes for the three months ended September 30, 2005 represents a domestic tax benefit computed using an estimated annual effective tax rate of 35% offset by an expected tax obligations on foreign-source revenue. As of September 30, 2005 the Company adjusted its valuation allowance to reflect its deferred tax assets at an amount that is likely to be realized. As of September 30, 2005 the Company had short term net deferred tax assets of approximately $7.5 million which is included in prepaid expenses and other current assets in the accompanying condensed consolidated balance sheet. The Company also had a net long-term deferred tax liability of $88.7 million.

As a result of the American Jobs Creation Act of 2004, the Company believes it will be able to repatriate, for a limited time, certain accumulated foreign earnings at an effective federal tax rate of approximately 5.25%. In the event the Company’s repatriation of certain accumulated foreign earnings would result in tax obligations significantly less that the deferred taxes provided for in the Company’s accompanying condensed consolidated balance sheets, the Company will recognize the benefit in the period the Company adopts a formal repatriation plan, in accordance with FASB Staff Position 109-2.

5.6. Net Income per Common Share

The ~~following table sets forth the computation of basic and diluted net income~~Company no longer presents earnings per share ~~for~~information as the ~~periods indicated:~~Company is now a direct wholly owned subsidiary of SEACOR (see Note 2).

Three Months Ended Six Months Ended
June 30, June 30,
2005 2004 2005 2004
(in thousands, except for per share data)
Numerator for basic and diluted net income per share:
Net income available to common shareholders $ 8,021 $ 2,721 $ 19,201 $ 8,371

Denominator for basic net income per share-weighted average shares 23,366 23,261 23,347 23,255

Effects of dilutive securities:
Stock options 845 139 768 238
Warrants 155 159 156 159
Restricted shares 161 39 129 44

Dilutive potential common shares 1,161 337 1,053 441

Denominator for diluted net income per share-adjusted weighted average shares and assumed conversions 24,527 23,598 24,400 23,696

Net income per share — basic $ 0.34 $ 0.12 $ 0.82 $ 0.36

Net income per share — diluted $ 0.33 $ 0.12 $ 0.79 $ 0.35

~~The weighted average diluted common shares outstanding for the three and six months ended June 30, 2004 excludes 344,000 options as these common stock equivalents are antidilutive.~~

Marine Transportation Services(Seabulk Tankers) — Marine transportation services includes 10 U.S.-flag product tankers, and two foreign-flag product ~~tankers.~~tankers which were sold during the three months ended September 30, 2005. The U.S.-flag oceangoing vessels are used to transport petroleum, chemicals, and crude products, primarily from chemical manufacturing plants, refineries and storage facilities along the U.S. Gulf Coast to industrial users and distribution facilities in and around the Gulf of Mexico, Atlantic and Pacific Coast ports. Certain of the vessels also transport crude oil within Alaska and among Alaska, the Pacific Coast and Hawaiian ports. One U.S.-flag vessel ~~and the two foreign-flag vessels operate~~operates in ~~the~~ foreign trade.

Towing(Seabulk Towing) — Harbor and offshore towing services are provided by tugs to vessels utilizing the ports in which the tugs operate, and to vessels at sea to the extent required by offshore commercial contract opportunities and by environmental regulations, casualty or other emergencies. Harbor operations are currently performed in Port Everglades, Tampa and Port Canaveral in Florida, Mobile, Alabama, Lake Charles, Louisiana and Port Arthur, Texas. The tugs assist petroleum and chemical product tankers, barges, container ships and other cargo vessels in docking and undocking and is proceeding within the port area and harbors. In addition, three tugs with offshore towing capabilities conduct a variety of offshore towing services in the Gulf of Mexico and Atlantic Ocean.

The Company evaluates performance by operating segment. Within the offshore energy support segment, the Company conducts additional performance evaluations of vessels marketed in U.S. and foreign locations. Resources are allocated based on segment ~~profit~~income or loss from operations, before interest and taxes.

Revenue by segment and geographic area consists only of services provided to external customers as reported in the condensed consolidated statements of operations. Income from operations by geographic area represents net revenue less applicable costs and expenses related to that revenue.

The following schedule presents segment and geographic information about the Company’s operations (in thousands):


													Three Months Ended						Three Months Ended,			January 1, 2005 –			Nine Months Ended
													September 30,						September 30,			July 1,			September 30,
													2005			2004			2005			2005			2004
	Three Months Ended						Six Months Ended						Successor			Predecessor			Successor
	June 30,						June 30,						Company			Company			Company			Predecessor Company
	2005			2004			2005			2004
Revenue
Offshore energy support	$	48,843		$	41,173		$	94,190		$	80,756		$	50,935		$	40,661		$	50,935		$	94,190		$	121,417
Marine transportation services		37,062			36,408			75,721			69,870			35,723			38,067			35,723			75,721			107,937
Towing		10,894			9,759			22,548			19,337			11,343			10,742			11,343			22,548			30,079
Eliminations⁽¹⁾		(112	)		(137	)		(191	)		(226	)		(137	)		(109	)		(137	)		(191	)		(335	)

Total	$	96,687		$	87,203		$	192,268		$	169,737		$	97,864		$	89,361		$	97,864		$	192,268		$	259,098


Vessel and voyage expenses
Offshore energy support	$	24,887		$	25,595		$	49,216		$	50,800		$	24,883		$	22,495		$	24,883		$	49,216		$	73,294
Marine transportation services		18,720			18,495			36,281			35,348			24,692			18,538			24,692			36,281			53,887
Towing		6,331			6,241			12,447			11,179			7,673			6,037			7,673			12,447			17,216
Eliminations⁽¹⁾		(112	)		(137	)		(191	)		(226	)		(137	)		(109	)		(137	)		(191	)		(335	)

Total	$	49,826		$	50,194		$	97,753		$	97,101		$	57,111		$	46,961		$	57,111		$	97,753		$	144,062


Depreciation, amortization and drydocking
Offshore energy support	$	8,937		$	9,746		$	17,779		$	19,291		$	14,101		$	9,450		$	14,101		$	17,779		$	28,741
Marine transportation services		6,485			6,390			13,080			11,684			11,663			6,210			11,663			13,080			17,894
Towing		1,083			923			2,095			1,808			1,226			992			1,226			2,095			2,800
General corporate		72			68			143			134			263			71			263			143			205

Total	$	16,577		$	17,127		$	33,097		$	32,917		$	27,253		$	16,723		$	27,253		$	33,097		$	49,640


Income (loss) from operations
Offshore energy support	$	10,752		$	3,356		$	18,669		$	2,454		$	8,662		$	4,911		$	8,662		$	18,669		$	7,366
Marine transportation services		11,000			10,678			24,637			21,123			(1,337	)		12,277			(1,337	)		24,637			33,399
Towing		2,204			1,464			5,281			3,958			1,111			2,564			1,111			5,281			6,523
General corporate		(5,260	)		(2,950	)		(8,455	)		(4,587	)		(4,294	)		(2,961	)		(4,294	)		(18,875	)		(7,549	)

Total	$	18,696		$	12,548		$	40,132		$	22,948		$	4,142		$	16,791		$	4,142		$	29,712		$	39,739


Net income (loss)
Offshore energy support	$	5,447		$	(964	)	$	8,147		$	(6,077	)	$	955		$	597		$	955		$	8,147		$	(5,481	)
Marine transportation services		6,385			5,989			15,354			12,156			(3,425	)		7,365			(3,425	)		15,354			19,523
Towing		1,418			689			3,603			2,416			87			1,788			87			3,603			4,206
Generalcorporate		(5,229	)		(2,993	)		(7,903	)		(124	)
General corporate														(4,510	)		(2,937	)		(4,510	)		(18,323	)		(3,064	)

Total	$	8,021		$	2,721		$	19,201		$	8,371		$	(6,893	)	$	6,813		$	(6,893	)	$	8,781		$	15,184


Geographic revenue
Americas⁽²⁾	$	62,403		$	54,489		$	123,592		$	105,170		$	63,300		$	58,584		$	63,300		$	123,592		$	163,754
Foreign
West Africa		21,669			21,793			42,794			44,039			21,763			20,594			21,763			42,794			64,633
Middle East		7,438			7,367			15,320			13,206			6,949			6,567			6,949			15,320			19,773
Southeast Asia		5,177			3,554			10,562			7,322			5,852			3,616			5,852			10,562			10,938

Consolidated geographic revenue	$	96,687		$	87,203		$	192,268		$	169,737		$	97,864		$	89,361		$	97,864		$	192,268		$	259,098

7.8. Commitments and Contingencies

Under United States law, “United States persons” are prohibited from business activities and contracts in certain countries, including Sudan and Iran. Relating to the prohibitions, the Company has filed three reports with and submitted documents to the Office of Foreign Asset Control (“OFAC”) of the U.S. Department of Treasury. One of the reports was also filed with the Bureau of Export Administration of the U.S. Department of Commerce. The reports and documents related to certain limited charters with third parties involving three of the Company’s vessels which called in Sudan for several months in 1999 and January 2000, and charters with third parties involving several of the Company’s vessels which called in Iran in 1998. In March 2003, the Company received notification from OFAC that the case has been referred to its Civil Penalties Division. Should OFAC determine that these activities constituted violations of the laws or regulations, civil penalties, including fines, could be assessed against the Company and/or certain individuals who knowingly participated in such activities. The Company cannot predict the extent of such penalties; however, management does not believe the outcome of these matters will have a material impact on its financial position or results of operations.

The Company was sued by Maritime Transport Development Corporation (“MTDC”) in January 2002 in Florida state court in Broward County alleging broker commissions due since 1998 from charters on three of its vessels, theSeabulk Magnachem, Seabulk ChallengerandSeabulk Pride,under an alleged broker commission agreement. MTDC was controlled by the founders of our predecessor company. The claim allegedly continues to accrue. The amount alleged to be due is over $800,000, but is subject to offset claims and defenses by the Company. The Company is vigorously defending such charges, but the Company cannot predict the ultimate outcome.

As of February 20, 2004, the Company ~~switched~~elected to change its mutual protection and indemnity (“P&I”) marine insurance policies from Steamship Mutual ~~(“Steamship”)~~ to West of England ~~Association (“West~~Association. As a condition of ~~England”). Under the Company’s P&I policies, the Company could be liable for additional premiums to cover investment losses and reserve shortfalls experienced by~~ its ~~marine insurance clubs; however, additional premiums can only be assessed for open policy years.~~departure from Steamship and West of England close a policy year three years after the policy year has ended. Completed policy years 2002 and 2003 are still open for Steamship and policy year 2004 is open for West of England. There have been no additional premiums assessed for these policy years and the Company believes it is unlikely that additional premiums for those policy years will be assessed. The Company will record a liability for any such additional premiums if and when they are assessed and the amount can be reasonably estimated.

~~In order to cover potential future additional insurance calls made by Steamship for the 2002 and 2003 policy years,~~Mutual, the Company was required to post a letter of credit in the amount of approximately $1.9 million ~~to support such~~in respect of potential ~~additional calls as a condition of its departure from Steamship.~~future calls. 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.~~

~~international offshore fleet, one will insure the Company’s domestic offshore fleet and one the Company’s tanker fleet.~~

From time to time, the Company is party to personal injury and property damage claims litigation arising in the ordinary course of business. Protection and indemnity marine liability insurance covers large claims in excess of the substantial deductibles and self-insured retentions.

8.9. Stock-Based Compensation

AsEffective July 1, 2005, as a consequence of the Merger, the Company’s’ stock options were exchanged for stock options in SEACOR at the exchange rate defined in the Merger Agreement, thereby terminating the Company’s stock option plans.

Prior to the Merger, as permitted by Statement of Financial Accounting Standards No. 123,Accounting for Stock-Based Compensation(“SFAS No. 123”), the Company ~~has~~ elected to follow Accounting Principles Board Opinion No. 25,Accounting for Stock Issued to Employees(“ (“APB No. 25”) and related interpretations in accounting for its employee stock-based transactions and has complied with the disclosure requirements of SFAS No. 123. Under APB No. 25, compensation expense is calculated at the time of option grant based upon the difference between the exercise ~~prices~~price of the option and the fair market value of the Company’s common stock at the date of grant recognized over the vesting period.

The Company ~~uses~~used the Black-Scholes option valuation model to determine the fair value of options granted under the Company’s stock option plans. Had compensation expense for the stock option grants been determined based on the fair value at the grant date for awards consistent with the methods of SFAS No. 123, the Company’s net income would have decreased to the pro forma amounts presented below:

Three Months Ended Six Months Ended
June 30, June 30,
2005 2004 2005 2004
Net income, as reported $ 8,021 $ 2,721 $ 19,201 $ 8,371
Stock-based compensation expense determined under the fair value method $ (468 ) $ (194 ) $ (916 ) $ (570 )

Pro forma net income $ 7,553 $ 2,527 $ 18,285 $ 7,801

Net income per common share:
Basic-as reported $ 0.34 $ 0.12 $ 0.82 $ 0.36

Basic-pro forma $ 0.32 $ 0.11 $ 0.78 $ 0.34

Diluted-as reported $ 0.33 $ 0.12 $ 0.79 $ 0.35

Diluted-pro forma $ 0.31 $ 0.11 $ 0.75 $ 0.33


				Pre-Merger Period
	Three Months Ended			Ended			Three Months Ended			Three Months Ended			January 1, 2005 -			Nine Months Ended
	September 30, 2005			July 1, 2005			September 30, 2004			September 30, 2005			July 1, 2005			September 30, 2004

	Successor Company			Predecessor Company						Successor Company			Predecessor Company

Net income, as reported	$	(6,893	)	$	(10,420	)	$	6,813		$	(6,893	)	$	8,781		$	15,184
Stock-based compensation expense determined under the fair value method		—			—			(410	)		—			(916	)		(981	)

Pro forma net income	$	(6,893	)	$	(10,420	)	$	6,403		$	(6,893	)	$	7,865		$	14,203

Effective October 14, 2004, the Company amended the stock option agreements for all of the vested and unvested awards, whereby the option exercise period was extended from 12 months to 36 months in the event of termination within two years of a change in control, as defined in the plan. In accordance with FASB Interpretation No. 44,Accounting for Certain Transactions involving Stock Compensation, the amendment to the agreements is considered a modification of the award and accordingly the intrinsic value of the option award shall be measured at the date of the modification and any intrinsic value in excess of the amount measured at the original measurement date shall be recognized as compensation cost if the separation event occurs. As of December 31, 2004 the intrinsic value in excess of the amount measured at the original measurement date was $4.1 million and, if a separation event occurred within two years of a change in control, would be recognized as compensation expense in the accompanying condensed consolidated statement of operations.

1011

9.10. Recent Accounting Pronouncements

In December 2004, the FASB issued Statement of Financial Accounting Standards No. 123 (revised 2004),Share-Based Payment(“SFAS No. 123R”), which requires companies to expense in their consolidated statements of operations the estimated fair value of employee stock options and similar awards. The Company currently uses the intrinsic value method to value stock options, and accordingly, no compensation expense has been recognized for stock options since the Company grants stock options with exercise prices equal to or greater than the Company’s common stock market price on the date of the grant. The Company will adopt the provisions of SFAS No. 123R using the modified prospective application. Under the modified prospective application, SFAS No. 123R will apply to new awards and to awards that are outstanding on the effective date and are subsequently modified or cancelled. Compensation expense for unvested stock-based awards will be recognized over the remaining vesting period. Depending on the model used to calculate stock-based compensation expense in the future, the implementation of certain other requirements of SFAS No. 123R and additional option grants expected to be made in the future, the pro forma disclosure discussed previously may not be indicative of the stock-based compensation expense that will be recognized in the Company’s future consolidated financial statements. In April 2005, the FASB delayed the implementation of SFAS No. 123R from the next reporting period beginning after June 15, 2005 until the beginning of the Company’s next fiscal year. The Company is in the process of determining the impact adopting SFAS No. 123R will have on its consolidated financial position and consolidated results of operations.

~~In December 2004, the FASB issued Statement of Financial Accounting Standard No. 153,~~~~Exchanges of Nonmonetary Assets~~~~(“SFAS No. 153”), an amendment of APB Opinion No. 29,~~~~Accounting for Nonmonetary Transactions~~(“APB No. 29”). APB No. 29 is based on the principle that exchanges of nonmonetary assets should be measured based on the fair value of assets exchanged, however certain exceptions apply. SFAS No. 153 amends APB No. 29 to eliminate the exception for nonmonetary exchanges of similar productive assets that do not have commercial substance. A nonmonetary exchange has commercial substance if the future cash flows of the entity are expected to change significantly as a result of the exchange. SFAS No. 153 is effective for nonmonetary exchanges occurring in fiscal periods beginning after June 15, 2005. The Company’s adoption of SFAS No. 153 is not expected to have a material impact on the Company’s consolidated financial position and consolidated results of operations.

~~In May 2005, the FASB issued Statement of Financial Accounting Standard No. 154,~~~~Accounting Changes and Error Corrections~~~~(“SFAS No. 154”), a replacement of APB Opinion No. 20,~~~~Accounting Changes~~(“APB No. 20”) and SFAS No. 3. SFAS No. 154 eliminates the requirement in APB No. 20 to include the cumulative effect of a change in accounting principle in the income statement of the period of change. Instead, SFAS No. 154 requires that a change in accounting principle be retrospectively applied. Under retrospective application, the new accounting principle is applied as of the beginning of the first period presented as if that principle had always been used. The cumulative effect of the change is reflected in the carrying value of assets and liabilities as of the first period presented and the offsetting adjustments are recorded to opening retained earnings. Each period presented is adjusted to reflect the period-specific effects of applying the change. SFAS No. 154 is effective for accounting changes and corrections of an errors made in fiscal years beginning after December 15, 2005. Early adoption is permitted for accounting changes and corrections of errors made in fiscal years beginning after the date SFAS No. 154 was issued. SFAS No. 154 does not change the transition provisions of any existing accounting pronouncements, including those that are in a transition phase as of the effective date of SFAS No. 154. The Company is in the process of determining the impact adopting SFAS No. 154 will have on its consolidated financial position and consolidated results of operations.

~~10. Subsequent Events~~

In July 2005, the Company sold an offshore crew boat operating in the U.S. Gulf and a harbor tug operating in Port Canaveral. Proceeds from the sales of the vessels were $800,000. The loss on the sales of the vessels was approximately $60,000.

Effective July 1, 2005, the Company merged with SEACOR and began operations as a wholly-owned subsidiary of SEACOR (see Note 2). As of July 1, 2005, the effective date of the Merger, Gerhard Kurz, Chairman, CEO and President, and Larry D. Francois, Senior Vice President and President - Seabulk Offshore, resigned from the Company and were paid severance under their respective employment agreements. As a consequence of the Merger, certain terminations, certain employment and severance agreements and the Company’s change in control severance policy in place prior to the effective date of the Merger, were triggered. Additionally, the entire slate of directors of the Company resigned as of the effective date of the Merger, pursuant to the Merger Agreement. The Company expects severance payments of approximately $4.4 million will be incurred in the third quarter.

In addition to the severance and employee termination costs described above, the Company also expects to incur additional expenses in the third quarter as a consequence of the Merger with SEACOR including: approximately $1.3 million to expense certain costs which had been capitalized related to a public offering that the Company was considering prior to the Merger; approximately $1.9 million of unearned compensation related to the release of restrictions on previously issued restricted stock; approximately $1.5 million for investment banking fees contingent upon the completion of the Merger; and insurance premiums for director and officer coverage for approximately $1.2 million.

~~In July 2005, the Company signed agreements to sell the~~~~Seabulk Trust~~~~and the~~~~Seabulk Reliant~~~~, the Company’s two foreign-flag tankers, in separate transactions. The~~~~Seabulk Trust~~~~is expected to be delivered to its buyer in August. The~~~~Seabulk Reliant~~~~is expected to be delivered to its buyer in September. Both vessels are currently operating in an international product tanker pool.~~

~~In July 2005, the Company removed its tanker fleet and its international offshore fleet from the West of England P&I club and placed those fleets into two separate P&I insurance clubs (see Note 7).~~

11. Supplemental Condensed Consolidated Financial Information

The Restricted Subsidiaries as to which financial information is included in the tables below are subsidiaries of the Company that are subject to the terms and conditions of the Indenture governing the 2003 Senior Notes. Only certain of the Restricted Subsidiaries (representing the domestic restricted subsidiaries and referred to in the Indenture as the “Guarantor Subsidiaries”), jointly and severally guarantee the 2003 Senior Notes, on a senior unsecured basis. The Non-guarantor Unrestricted Subsidiaries as to which financial information is included in the tables below are the subsidiary entities that own the five U.S.-flag double-hull product tankers which are financed by the U.S. Maritime Administration backed Title XI debt with recourse to the five tankers and the subsidiaries that own them. These entities are designated as “Non-Recourse” or “Unrestricted” subsidiaries under the Indenture and do not guarantee the 2003 Senior ~~Notes~~Notes.

Condensed Consolidating Balance Sheet
(in thousands)
As of June 30, 2005

Wholly
Owned Non- Non-
Guarantor Guarantor Guarantor
Restricted Restricted Unrestricted Consolidated
Parent^(a) Subsidiaries^(a) Subsidiaries Subsidiaries Eliminations Total
Assets

Current assets:
Cash and cash equivalents $ 21,253 $ 2,336 $ 3,853 $ — $ — $ 27,442
Restricted cash — — 2,756 29,502 — 32,258
Trade accounts receivable, net (457 ) 18,615 32,251 1,028 — 51,437
Other receivables 214 2,549 701 310 — 3,774
Marine operating supplies (1,026 ) 3,416 2,849 2,429 — 7,668
Prepaid expenses and other 1,856 547 1,145 381 — 3,929

Total current assets 21,840 27,463 43,555 33,650 — 126,508

Vessels and equipment, net 29,442 235,848 121,422 204,231 — 590,943
Deferred costs, net 7,435 13,591 12,381 7,086 — 40,493
Investments in affiliates 562,222 — — — (562,222 ) —
Due from affiliates — 44,508 137,482 3,855 (185,845 ) —
Other 10,606 999 1,560 13,153 — 26,318

Total assets $ 631,545 $ 322,409 $ 316,400 $ 261,975 $ (748,067 ) $ 784,262

Liabilities and Stockholders’ Equity

Current liabilities:
Accounts payable $ 154 $ 3,542 $ 6,162 $ — $ — $ 9,858
Current maturities of long-term debt 2,179 7,070 875 5,537 — 15,661
Current obligations under capital leases 1,129 2,225 — — — 3,354
Accrued interest 4,825 151 5 652 — 5,633
Accrued liabilities and other 6,847 5,890 18,646 2,579 — 33,962

Total current liabilities 15,134 18,878 25,688 8,768 — 68,468

Long-term debt 47,022 49,738 14,742 197,851 — 309,353
Senior notes 154,219 — — — — 154,219
Obligations under capital leases 9,899 17,198 — — — 27,097
Due to affiliates 182,671 — — — (182,671 ) —
Other liabilities 3,625 557 1,922 46 — 6,150

Total liabilities 412,570 86,371 42,352 206,665 (182,671 ) 565,287

Commitments and contingencies

Total stockholders’ equity 218,975 236,038 274,048 55,310 (565,396 ) 218,975

Total liabilities and stockholders’ equity $ 631,545 $ 322,409 $ 316,400 $ 261,975 $ (748,067 ) $ 784,262


^(a)		In June 2005, certain vessels owned by Parent were contributed to newly created and existing entities. Subsequent to the contributions by Parent all entities which received vessels are Wholly Owned Guarantor Restricted Subsidiaries.

Condensed Consolidating Balance Sheet
(in thousands)
As of December 31, 2004
Wholly
Owned Non- Non-
Guarantor Guarantor Guarantor
Restricted Restricted Unrestricted Consolidated
Parent Subsidiaries Subsidiaries Subsidiaries Eliminations Total
Assets

Current assets:
Cash and cash equivalents $ 8,265 $ 4,983 $ 5,701 $ — $ — $ 18,949
Restricted cash — — 2,756 32,925 — 35,681
Trade accounts receivable, net 35 17,797 32,207 5,170 — 55,209
Other receivables 1,003 2,430 204 147 — 3,784
Marine operating supplies 79 2,503 2,700 2,586 — 7,868
Due from affiliates — 66,330 119,375 3,372 (189,077 ) —
Prepaid expenses and other 2,005 285 1,239 98 — 3,627

Total current assets 11,387 94,328 164,182 44,298 (189,077 ) 125,118

Vessels and equipment, net 46,072 216,200 127,848 208,673 — 598,793
Deferred costs, net 14,546 6,625 15,438 8,444 — 45,053
Investments in affiliates 525,588 14,644 364 82,611 (623,207 ) —
Other 7,231 813 1,177 8,603 — 17,824

Total assets $ 604,824 $ 332,610 $ 309,009 $ 352,629 $ (812,284 ) $ 786,788

Liabilities and Stockholders’ Equity

Current liabilities:
Accounts payable $ 4,802 $ 1,159 $ 8,957 $ — $ — $ 14,918
Current maturities of long-term debt 3,799 7,065 436 5,353 — 16,653
Current obligations under capital leases 1,093 2,615 — — — 3,708
Accrued interest 4,008 159 5 703 4,875
Due to affiliates 161,144 — — — (161,144 ) —
Accrued liabilities and other 8,854 4,676 17,929 3,862 — 35,321

Total current liabilities 183,700 15,674 27,327 9,918 (161,144 ) 75,475

Long-term debt 57,544 53,275 14,480 200,666 — 325,965
Senior notes 152,906 — — — — 152,906
Obligations under capital leases 10,476 18,092 — — — 28,568
Due to affiliates — 27,935 — — (27,935 ) —
Other liabilities 2,851 242 1,740 46 — 4,879

Total liabilities 407,477 115,218 43,547 210,630 (189,079 ) 587,793

Commitments and contingencies

Total stockholders’ equity 197,347 217,392 265,462 141,999 (623,205 ) 198,995

Total liabilities and stockholders’ equity $ 604,824 $ 332,610 $ 309,009 $ 352,629 $ (812,284 ) $ 786,788

Condensed Consolidating Statement of Operations
(in thousands)
Three Months Ended June 30, 2005

Wholly Non-Wholly
Owned Owned Non- Non-
Guarantor Guarantor Guarantor Guarantor
Restricted Restricted Restricted Unrestricted Consolidated
Parent^(b) Subsidiaries^(b) Subsidiaries^(a) Subsidiaries Subsidiaries Eliminations Total
Revenue $ 11,452 $ 31,298 $ — $ 36,780 $ 17,269 $ (112 ) $ 96,687

Vessel and voyage expenses 7,102 17,209 — 18,274 7,353 (112 ) 49,826
General and administrative 5,503 2,481 — 3,612 445 — 12,041
Depreciation, amortization and drydocking 2,130 5,156 — 6,512 2,779 — 16,577
Loss (gain) on disposal of assets, net — 603 — (1,056 ) — — (453 )

Income from operations (3,283 ) 5,849 — 9,438 6,692 18,696
Other expense, net (317 ) (2,538 ) — (2,511 ) (3,685 ) — (9,051 )

Income before provision for income taxes (3,600 ) 3,311 — 6,927 3,007 — 9,645
Provision for income taxes — — — 1,624 — — 1,624

Net income $ (3,600 ) $ 3,311 $ — $ 5,303 $ 3,007 $ — $ 8,021


	Condensed Consolidating Balance Sheet
	(in thousands)
	As of September 30, 2005
				Wholly			Non-Wholly
				Owned			Owned		Non-		Non-
				Guarantor			Guarantor		Guarantor		Guarantor
				Restricted			Restricted		Restricted		Unrestricted					Consolidated
	Seabulk^(b)			Subsidiaries^(b)			Subsidiaries^(a)		Subsidiaries		Subsidiaries		Eliminations			Total
Assets
Current assets:
Cash and cash equivalents	$	11,950		$	45,948		$	—	$	6,965	$	—	$	—		$	64,863
Restricted cash		—			—			—		2,756		44,025		—			46,781
Trade accounts receivable, net		389			22,452			—		33,249		1,019		—			57,109
Other receivables		337			2,405			—		283		270		—			3,295
Marine operating supplies		(747	)		2,986			—		2,198		—		—			4,437
Prepaid expenses and other		9,196			4,037			—		5,631		239		—			19,103

Total current assets		21,125			77,828			—		51,082		45,553		—			195,588

Vessels and equipment, net		27,064			278,651			—		214,606		342,553		—			862,874
Deferred costs, net		—			—			—		—		—		—			—
Investments in affiliates		575,483			—			—		—		—		(575,483	)		—
Due from affiliates		122,921			—			—		57,209		—		(180,130	)		—
Goodwill		59,329			—			—		—		—		—			59,329
Identifiable intangible assets		35,807			—			—		—		—		—			35,807
Other		5,089			532			—		615		13,295		—			19,531

Total assets	$	846,818		$	357,011		$	—	$	323,512	$	401,401	$	(755,613	)	$	1,173,129


Liabilities and Stockholders’ Equity

Current liabilities:
Accounts payable	$	362		$	3,625		$	—	$	5,470	$	—	$	—		$	9,457
Current maturities of long-term debt		1,771			1,667			—		983		5,538		—			9,959
Current obligations under capital leases		1,145			2,025			—		—		—		—			3,170
Accrued interest		1,895			162			—		27		4,182		—			6,266
Due to affiliates		97			478			—		224		—		—			799
Accrued liabilities and other		8,679			6,574			—		19,243		6,914		—			41,410

Total current liabilities		13,949			14,531			—		25,947		16,634		—			71,061

Long-term debt		46,645			12,689			—		13,089		223,160		—			295,583
Senior notes		155,255			—			—		—		—		—			155,255
Senior notes due to affiliate		13,164			—			—		—		—		—			13,164
Obligations under capital leases		10,006			18,062			—		—		—		—			28,068
Due to affiliates		—			87,451			—		—		104,403		(191,854	)		—
Deferred taxes		88,830			(4,604	)		—		3,830		646		1			88,703
Other liabilities		3,164			232			—		2,048		46		—			5,490

Total liabilities		331,013			128,361			—		44,914		344,889		(191,853	)		657,324


Commitments and contingencies

Total stockholders’ equity		515,805			228,650			—		278,598		56,512		(563,760	)		515,805

Total liabilities and stockholders’ equity	$	846,818		$	357,011		$	—	$	323,512	$	401,401	$	(755,613	)	$	1,173,129


^(a)		In December 2004, the Company purchased the minority interest in a partnership that owns theSeabulk America. Subsequent to the acquisition, all Guarantor Restricted Subsidiaries are wholly-owned subsidiaries of the Company.

^(b)		In June 2005, certain vessels owned by ~~Parent~~Seabulk were contributed to newly created and existing entities. Subsequent to the contributions by ~~Parent~~Seabulk all entities which received vessels are Wholly Owned Guarantor Restricted Subsidiaries.

Condensed Consolidating Statement of Operations
(in thousands)
Three Months Ended June 30, 2004
Wholly Non-Wholly
Owned Owned Non- Non-
Guarantor Guarantor Guarantor Guarantor
Restricted Restricted Restricted Unrestricted Consolidated
Parent Subsidiaries Subsidiaries Subsidiaries Subsidiaries Eliminations Total
Revenue $ 10,377 $ 21,817 $ 3,769 $ 32,981 $ 18,396 $ (137 ) $ 87,203

Vessel and voyage expenses 6,693 13,942 2,322 18,670 8,704 (137 ) 50,194
General and administrative 3,150 1,967 205 3,647 354 — 9,323
Depreciation, amortization and drydocking 2,213 4,336 822 7,051 2,705 — 17,127
Gain on disposal of assets, net — (184 ) — (1,805 ) — — (1,989 )

Income from operations (1,679 ) 1,756 420 5,418 6,633 — 12,548
Other expense, net (93 ) (2,337 ) (357 ) (1,635 ) (3,849 ) (20 ) (8,291 )

Income before provision for income taxes (1,772 ) (581 ) 63 3,783 2,784 (20 ) 4,257
Provision for income taxes — — — 1,536 — — 1,536

Net income $ (1,772 ) $ (581 ) $ 63 $ 2,247 $ 2,784 $ (20 ) $ 2,721

1513

Condensed Consolidating Statement of Operations
(in thousands)
Six Months Ended June 30, 2005

Wholly Non-Wholly
Owned Owned Non- Non-
Guarantor Guarantor Guarantor Guarantor
Restricted Restricted Restricted Unrestricted Consolidated
Parent^(b) Subsidiaries^(b) Subsidiaries^(a) Subsidiaries Subsidiaries Eliminations Total
Revenue $ 23,279 $ 61,802 $ — $ 72,020 $ 35,358 $ (191 ) $ 192,268

Vessel and voyage expenses 13,691 32,914 — 36,579 14,760 (191 ) 97,753
General and administrative 8,976 4,881 — 6,876 876 — 21,609
Depreciation, amortization and drydocking 4,424 10,238 — 12,877 5,558 — 33,097
Loss (gain) on disposal of assets, net — 585 — (908 ) — — (323 )

Income from operations (3,812 ) 13,184 — 16,596 14,164 — 40,132
Other expense, net (766 ) (5,308 ) — (4,910 ) (7,355 ) — (18,339 )

Income before provision for income taxes (4,578 ) 7,876 — 11,686 6,809 — 21,793
(Benefit) provision for income taxes (507 ) — — 3,099 — — 2,592

Net income $ (4,071 ) $ 7,876 $ — $ 8,587 $ 6,809 $ — $ 19,201


	Condensed Consolidating Balance Sheet
	(in thousands)
	As of December 31, 2004
			Wholly		Non-Wholly
			Owned		Owned		Non-		Non-
			Guarantor		Guarantor		Guarantor		Guarantor
			Restricted		Restricted		Restricted		Unrestricted					Consolidated
	Seabulk		Subsidiaries		Subsidiaries^(a)		Subsidiaries		Subsidiaries		Eliminations			Total
Assets
Current assets:
Cash and cash equivalents	$	8,265	$	4,983	$	—	$	5,701	$	—	$	—		$	18,949
Restricted cash		—		—		—		2,756		32,925		—			35,681
Trade accounts receivable, net		35		17,797		—		32,207		5,170		—			55,209
Other receivables		1,003		2,430		—		204		147		—			3,784
Marine operating supplies		79		2,503		—		2,700		2,586		—			7,868
Due from affiliates		––		66,330		—		119,375		3,372		(189,077	)		––
Prepaid expenses and other		2,005		285		—		1,239		98		—			3,627

Total current assets		11,387		94,328		—		164,182		44,298		(189,077	)		125,118

Vessels and equipment, net		46,072		216,200		—		127,848		208,673		—			598,793
Deferred costs, net		14,546		6,625		—		15,438		8,444		—			45,053
Investments in affiliates		525,588		14,644		—		364		82,611		(623,207	)		—
Other		7,231		813		—		1,177		8,603		—			17,824

Total assets	$	604,824	$	332,610	$	—	$	309,009	$	352,629	$	(812,284	)	$	786,788


Liabilities and Stockholders’ Equity

Current liabilities:
Accounts payable	$	4,802	$	1,159	$	—	$	8,957	$	—	$	—		$	14,918
Current maturities of long-term debt		3,799		7,065		—		436		5,353		—			16,653
Current obligations under capital leases		1,093		2,615		—		—		—		—			3,708
Accrued interest		4,008		159		—		5		703					4,875
Due to affiliates		161,144		—		—		—		—		(161,144	)		—
Accrued liabilities and other		8,854		4,676		—		17,929		3,862		—			35,321

Total current liabilities		183,700		15,674		—		27,327		9,918		(161,144	)		75,475

Long-term debt		57,544		53,275		—		14,480		200,666		—			325,965
Senior notes		152,906		—		—		—		—		—			152,906
Obligations under capital leases		10,476		18,092		—		—		—		—			28,568
Due to affiliates		—		27,935		—		—		—		(27,935	)		—
Other liabilities		2,851		242		—		1,740		46		—			4,879

Total liabilities		407,477		115,218		—		43,547		210,630		(189,079	)		587,793


Commitments and contingencies

Total stockholders’ equity		197,347		217,392		—		265,462		141,999		(623,205	)		198,995

Total liabilities and stockholders’ equity	$	604,824	$	332,610	$	—	$	309,009	$	352,629	$	(812,284	)	$	786,788


^(a)		In December 2004, the Company purchased the minority interest in a partnership that owns theSeabulk America. Subsequent to the acquisition, all Guarantor Restricted Subsidiaries are wholly-owned subsidiaries of the Company.

^(b)		In June 2005, certain vessels owned by Parent were contributed to newly created and existing entities. Subsequent to the contributions by Parent all entities which received vessels are Wholly Owned Guarantor Restricted Subsidiaries.

Condensed Consolidating Statement of Operations
(in thousands)
Six Months Ended June 30, 2004
Wholly Non-Wholly
Owned Owned Non- Non-
Guarantor Guarantor Guarantor Guarantor
Restricted Restricted Restricted Unrestricted Consolidated
Parent Subsidiaries Subsidiaries Subsidiaries Subsidiaries Eliminations Total
Revenue $ 22,290 $ 39,162 $ 7,088 $ 65,099 $ 36,324 $ (226 ) $ 169,737

Vessel and voyage expenses 12,750 25,793 4,512 37,154 17,118 (226 ) 97,101
General and administrative 5,002 4,531 415 8,102 698 — 18,748
Depreciation, amortization and drydocking 3,930 8,207 1,643 13,735 5,402 — 32,917
Gain on disposal of assets, net — (185 ) — (1,792 ) — — (1,977 )

Income from operations 608 816 518 7,900 13,106 — 22,948
Other expense, net 4,335 (4,237 ) (694 ) (3,387 ) (7,767 ) 58 (11,692 )

Income before provision for income taxes 4,943 (3,421 ) (176 ) 4,513 5,339 58 11,256
Provision for income taxes — — — 2,885 — — 2,885

Net income $ 4,943 $ (3,421 ) $ (176 ) $ 1,628 $ 5,339 $ 58 $ 8,371

1614

Condensed Consolidating Statement of Cash Flows
(in thousands)
Six Months Ended June 30, 2005
Wholly Owned Non-Wholly
Guarantor Owned Guarantor
Restricted Restricted
Parent^(b) Subsidiaries^(b) Subsidiaries^(a)
Net cash provided by (used in) operating activities $ 40,056 $ (155 ) $ —

Investing activities:

Proceeds from sales of vessels and equipment — 3,443 —
Purchases of vessels and equipment (14,821 ) (1,115 ) —

Net cash (used in) provided by investing activities (14,821 ) 2,328 —

Financing activities:

Payments on Amended Credit Facility (15,500 ) — —
Proceeds from long-term debt 7,362 67 —
Payments of long-term debt (1,055 ) (3,599 ) —
Payments of Title XI bonds (2,949 ) — —
Payments of obligations under capital leases (541 ) (1,284 ) —
Payment of other deferred financing costs (10 ) (4 ) —
Proceeds from exercise of stock options 446 — —
Decrease in restricted cash — — —

Net cash (used in) provided by financing activities (12,247 ) (4,820 ) —

Change in cash and cash equivalents 12,988 (2,647 ) —

Cash and cash equivalents at beginning of period 8,265 4,983 —

Cash and cash equivalents at end of period $ 21,253 $ 2,336 $ —


	Condensed Consolidating Statement of Operations
	(in thousands)
	Three Months Ended September 30, 2005
				Wholly			Non-Wholly
				Owned			Owned		Non-			Non-
				Guarantor			Guarantor		Guarantor			Guarantor
				Restricted			Restricted		Restricted			Unrestricted						Consolidated
	Seabulk^(b)			Subsidiaries^(b)			Subsidiaries^(a)		Subsidiaries			Subsidiaries			Eliminations			Total

Revenue	$	4,288		$	37,560		$	—	$	37,432		$	18,721		$	(137	)	$	97,864

Vessel and voyage expenses		2,750			28,307			—		17,777			8,414			(137	)		57,111
General and administrative		4,262			2,414			—		2,341			341			—			9,358
Depreciation, amortization and drydocking		1,183			17,456			—		3,667			4,947			—			27,253
Loss (gain) on disposal of assets, net		—			—			—		—			—			—			—

(Loss) income from operations		(3,907	)		(10,617	)		—		13,647			5,019						4,142
Other expense, net		(3,745	)		(2,537	)		—		(2,704	)		(3,172	)		—			(12,157	)

(Loss) income before provision for income taxes		(7,652	)		(13,154	)		—		10,943			1,847			—			(8,015	)
(Benefit from) provision for income taxes		(2,678	)		(4,604	)		—		5,513			646			—			(1,123	)

Net (loss) income	$	(4,974	)	$	(8,550	)	$	—	$	5,430		$	1,201		$	—		$	(6,893	)


^(a)		In December 2004, the Company purchased the minority interest in a partnership that owns theSeabulk America. Subsequent to the acquisition, all Guarantor Restricted Subsidiaries are wholly-owned subsidiaries of the Company.

^(b)		In June 2005, certain vessels owned by ~~Parent~~Seabulk were contributed to newly created and existing entities. Subsequent to the contributions by ~~Parent~~Seabulk all entities which received vessels are Wholly Owned Guarantor Restricted Subsidiaries.


	Condensed Consolidating Statement of Operations
	(in thousands)
	Three Months Ended September 30, 2004
				Wholly			Non-Wholly
				Owned			Owned			Non-			Non-
				Guarantor			Guarantor			Guarantor			Guarantor
				Restricted			Restricted			Restricted			Unrestricted						Consolidated
	Seabulk			Subsidiaries			Subsidiaries			Subsidiaries			Subsidiaries			Eliminations			Total

Revenue	$	10,924		$	23,889		$	4,690		$	31,018		$	18,950		$	(110	)	$	89,361

Vessel and voyage expenses		6,749			12,280			2,488			17,025			8,529			(110	)		46,961
General and administrative		3,232			1,956			265			3,449			430			—			9,332
Depreciation, amortization and drydocking		1,986			4,228			820			6,933			2,756			—			16,723
Gain on disposal of assets, net		—			(446	)		—			—			—			—			(446	)

(Loss) income from operations		(1,043	)		5,871			1,117			3,611			7,253						16,791
Other income (expense), net		3			(2,372	)		(382	)		(1,704	)		(3,813	)		(241	)		(8,509	)

(Loss) income before provision for income taxes		(1,040	)		3,499			735			1,907			3,422			(241	)		8,282
Provision for income taxes		—			—			—			1,469			—			—			1,469

Net (loss) income	$	(1,040	)	$	3,499		$	735		$	438		$	3,422		$	(241	)	$	6,813

1715

Condensed Consolidating Statement of Cash Flows
(in thousands)
Six Months Ended June 30, 2005
Non-
Non- Guarantor Guarantor
Restricted Unrestricted Consolidated
Subsidiaries Subsidiaries Eliminations Total
Net cash provided by (used in) operating activities $ (3,529 ) $ (792 ) $ — $ 35,580

Investing activities:

Proceeds from sales of vessels and equipment 1,685 — — 5,128
Purchases of vessels and equipment (705 ) — — (16,641 )

Net cash (used in) provided by investing activities 980 — — (11,513 )

Financing activities:

Payments on Amended Credit Facility — — — (15,500 )
Proceeds from long-term debt 701 — — 8,130
Payments of long-term debt — — — (4,654 )
Payments of Title XI bonds — (2,631 ) — (5,580 )
Payments of obligations under capital leases — — — (1,825 )
Payment of other deferred financing costs — — — (14 )
Proceeds from exercise of stock options — — — 446
Decrease in restricted cash — 3,423 — 3,423

Net cash (used in) provided by financing activities 701 792 — (15,574 )

Change in cash and cash equivalents (1,848 ) — — 8,493
Cash and cash equivalents at beginning of period 5,701 — — 18,949

Cash and cash equivalents at end of period $ 3,853 $ — $ — $ 27,442


	Condensed Consolidating Statement of Operations
	(in thousands)
	January 1, 2005 — July 1, 2005
				Wholly			Non-Wholly
				Owned			Owned		Non-			Non-
				Guarantor			Guarantor		Guarantor			Guarantor
				Restricted			Restricted		Restricted			Unrestricted						Consolidated
	Seabulk^(b)			Subsidiaries^(b)			Subsidiaries^(a)		Subsidiaries			Subsidiaries			Eliminations			Total

Revenue	$	23,279		$	61,802		$	—	$	72,020		$	35,358		$	(191	)	$	192,268

Vessel and voyage expenses		13,691			32,914			—		36,579			14,760			(191	)		97,753
General and administrative		19,396			4,881			—		6,876			876			—			32,029
Depreciation, amortization and drydocking		4,424			10,238			—		12,877			5,558			—			33,097
Loss (gain) on disposal of assets, net		—			585			—		(908	)		—			—			(323	)

(Loss) income from operations		(14,232	)		13,184			—		16,596			14,164			—			29,712
Other expense, net		(766	)		(5,308	)		—		(4,910	)		(7,355	)		—			(18,339	)

(Loss) income before provision for income taxes		(14,998	)		7,876			—		11,686			6,809			—			11,373
(Benefit from) provision for income taxes		(507	)		—			—		3,099			—			—			2,592

Net (loss) income	$	(14,491	)	$	7,876		$	—	$	8,587		$	6,809		$	—		$	8,781


^(a)		In December 2004, the Company purchased the minority interest in a partnership that owns theSeabulk America. Subsequent to the acquisition, all Guarantor Restricted Subsidiaries are wholly-owned subsidiaries of the Company.

^(b)		In June 2005, certain vessels owned by ~~Parent~~Seabulk were contributed to newly created and existing entities. Subsequent to the contributions by ~~Parent~~Seabulk all entities which received vessels are Wholly Owned Guarantor Restricted Subsidiaries.


	Condensed Consolidating Statement of Operations
	(in thousands)
	Nine Months Ended September 30, 2004
				Wholly			Non-Wholly
				Owned			Owned			Non-			Non-
				Guarantor			Guarantor			Guarantor			Guarantor
				Restricted			Restricted			Restricted			Unrestricted						Consolidated
	Seabulk			Subsidiaries			Subsidiaries			Subsidiaries			Subsidiaries			Eliminations			Total

Revenue	$	33,214		$	63,051		$	11,778		$	96,117		$	55,274		$	(336	)	$	259,098

Vessel and voyage expenses		19,499			38,073			7,000			54,179			25,647			(336	)		144,062
General and administrative		8,234			6,487			680			11,551			1,128			—			28,080
Depreciation, amortization and drydocking		5,916			12,435			2,463			20,668			8,158			—			49,640
Gain on disposal of assets, net		—			(631)			—			(1,792	)		—			—			(2,423	)

Income from operations		(435	)		6,687			1,635			11,511			20,341			—			39,739
Other expense, net		4,338			(6,609	)		(1,076	)		(5,091	)		(11,580	)		(183	)		(20,201	)

Income before provision for income taxes		3,903			78			559			6,420			8,761			(183	)		19,538
Provision for income taxes		—			—			—			4,354			—			—			4,354

Net income	$	3,903		$	78		$	559		$	2,066		$	8,761		$	(183	)	$	15,184


	Condensed Consolidating Statement of Cash Flows
	(in thousands)
	Three Months Ended September 30, 2005
				Wholly Owned			Non-Wholly
				Guarantor			Owned Guarantor
				Restricted			Restricted
	Seabulk^(b)			Subsidiaries^(b)			Subsidiaries^(a)

Net cash provided by (used in) operating activities	$	(1,085	)	$	3,599		$	—

Investing activities:
Proceeds from sales of vessels held for sale		—			83,930			—
Purchases of vessels and equipment		(8,555	)		—			—
Cash settlements of derivative transactions		1,202			—			—

Net cash (used in) provided by investing activities		(7,353	)		83,930			—

Financing activities:
Payments on Amended Credit Facility		—			—			—
Proceeds from long-term debt		—			44
Payments of long-term debt		(588	)		(43,302	)		—
Payments of Title XI bonds		—			—			—
Payments of obligations under capital leases		(277	)		(659	)
Payment of other deferred financing costs		—			—			—
Proceeds from exercise of stock options		—			—			—
Decrease in restricted cash		—			—			—

Net cash (used in) provided by financing activities		(865	)		(43,917	)		—


Change in cash and cash equivalents		(9,303	)		43,612			—

Cash and cash equivalents at beginning of period		21,253			2,336			—

Cash and cash equivalents at end of period	$	11,950		$	45,948		$	—


(a)		In December 2004, the Company purchased the minority interest in a partnership that owns theSeabulk America. Subsequent to the acquisition, all Guarantor Restricted Subsidiaries are wholly-owned subsidiaries of the Company.

(b)		In June 2005, certain vessels owned by Seabulk were contributed to newly created and existing entities. Subsequent to the contributions by Seabulk all entities which received vessels are Wholly Owned Guarantor Restricted Subsidiaries.


	Condensed Consolidating Statement of Cash Flows
	(in thousands)
	Three Months Ended September 30, 2005
				Non-
	Non- Guarantor			Guarantor
	Restricted			Unrestricted					Consolidated
	Subsidiaries			Subsidiaries			Eliminations		Total

Net cash provided by (used in) operating activities	$	(842	)	$	14,523		$	—	$	16,195

Investing activities:
Proceeds from sales of vessels held for sale		4,050			—			—		87,980
Purchases of vessels and equipment		—			—			—		(8,555	)
Cash settlements of derivative transactions		—			—			—		1,202

Net cash (used in) provided by investing activities		4,050			—			—		80,627

Financing activities:
Payments on Amended Credit Facility		—			—			—		—
Proceeds from long-term debt		—			—			—		44
Payments of long-term debt		(96	)		—			—		(43,986	)
Payments of Title XI bonds		—			—			—		—
Payments of obligations under capital leases		—			—			—		(936	)
Payment of other deferred financing costs		—			—			—		—
Proceeds from exercise of stock options		—			—			—		—
Decrease in restricted cash		—			(14,523	)		—		(14,523	)

Net cash (used in) provided by financing activities		(96	)		(14,523	)		—		(59,401	)


Change in cash and cash equivalents		3,112			—			—		37,421
Cash and cash equivalents at beginning of period		3,853			—			—		27,442

Cash and cash equivalents at end of period	$	6,965		$	—		$	—	$	64,863


(a)		In December 2004, the Company purchased the minority interest in a partnership that owns theSeabulk America. Subsequent to the acquisition, all Guarantor Restricted Subsidiaries are wholly-owned subsidiaries of the Company.

(b)		In June 2005, certain vessels owned by Seabulk were contributed to newly created and existing entities. Subsequent to the contributions by Seabulk all entities which received vessels are Wholly Owned Guarantor Restricted Subsidiaries.


	Condensed Consolidating Statement of Cash Flows
	(in thousands)
	January 1, 2005 — July 1, 2005
				Wholly Owned			Non-Wholly
				Guarantor			Owned Guarantor
				Restricted			Restricted
	Seabulk^(b)			Subsidiaries^(b)			Subsidiaries^(a)

Net cash provided by (used in) operating activities	$	40,056		$	(155	)	$	—

Investing activities:
Proceeds from sales of vessels and equipment		—			3,443			—
Purchases of vessels and equipment		(14,821	)		(1115	)		—

Net cash (used in) provided by investing activities		(14,821	)		2,328			—

Financing activities:
Payments on Amended Credit Facility		(15,500	)		—			—
Proceeds from long-term debt		7,362			67
Payments of long-term debt		(1,055	)		(3,599	)		—
Payments of Title XI bonds		(2,949	)		—			—
Payments of obligations under capital leases		(541	)		(1,284	)
Payment of other deferred financing costs		(10	)		(4	)		—
Proceeds from exercise of stock options		446			—			—
Decrease in restricted cash		—			—			—

Net cash (used in) provided by financing activities		(12,247	)		(4,820	)		—


Change in cash and cash equivalents		12,988			(2,647	)		—

Cash and cash equivalents at beginning of period		8,265			4,983			—

Cash and cash equivalents at end of period	$	21,253		$	2,336		$	—

Condensed Consolidating Statement of Cash Flows
(in thousands)
Six Months Ended June 30, 2004
Wholly Owned Non-Wholly
Guarantor Owned Guarantor
Restricted Restricted
Parent Subsidiaries Subsidiaries
Net cash (used in) provided by operating activities $ (7,836 ) $ 17,674 $ (991 )

Investing activities:

Proceeds from disposals of assets — 311 —
Purchases of vessels and equipment (6,272 ) (62,219 ) —
Investment in Joint Venture — — —

Net cash used in financing activities (6,272 ) (61,908 ) —

Financing activities:

Proceeds from Amended Credit Facility 20,000 — —
Proceeds from long-term debt — 49,600 —
Payments of long-term debt (1,050 ) (2,116 ) —
Payments of Title XI bonds (1,075 ) — —
Payments of obligations under capital leases (512 ) (1,213 ) —
Payments of deferred financing costs related to 2003 Senior Notes and Amended Credit Facility (285 ) — —
Payments of other deferred financing costs (86 ) (569 ) —
Proceeds from exercise of stock options 167 — —
Decrease in restricted cash — — —

Net cash provided by (used in) financing activities 17,159 45,702 —

Change in cash and cash equivalents 3,051 1,468 (991 )
Cash and cash equivalents at beginning of period 217 452 1,030

Cash and cash equivalents at end of period $ 3,268 $ 1,920 $ 39


(a)		In December 2004, the Company purchased the minority interest in a partnership that owns theSeabulk America. Subsequent to the acquisition, all Guarantor Restricted Subsidiaries are wholly-owned subsidiaries of the Company.

(b)		In June 2005, certain vessels owned by Seabulk were contributed to newly created and existing entities. Subsequent to the contributions by Seabulk all entities which received vessels are Wholly Owned Guarantor Restricted Subsidiaries.


	Condensed Consolidating Statement of Cash Flows											Condensed Consolidating Statement of Cash Flows
	(in thousands)											(in thousands)
	Six Months Ended June 30, 2004											January 1, 2005 — July 1, 2005
				Non-											Non-
	Non-Guarantor			Guarantor								Non- Guarantor			Guarantor
	Restricted			Unrestricted					Consolidated			Restricted			Unrestricted					Consolidated
	Subsidiaries			Subsidiaries			Eliminations		Total			Subsidiaries			Subsidiaries			Eliminations		Total
Net cash (used in) provided by operating activities	$	11,804		$	444		$	—	$	21,095

Net cash provided by (used in) operating activities												$	(3,529	)	$	(792	)	$	—	$	35,580

Investing activities:
Proceeds from disposals of assets		2,834			—			—		3,145
Proceeds from sales of vessels and equipment													1,685			—			—		5,128
Purchases of vessels and equipment		(15,015	)		(27	)		—		(83,533	)		(705	)		—			—		(16,641	)
Investment in Joint Venture		(240	)		—			—		(240	)

Net cash used in financing activities		(12,421	)		(27	)				(80,628	)
Net cash (used in) provided by investing activities													980			—			—		(11,513	)

Financing activities:
Proceeds from Amended Credit Facility		—			—			—		20,000
Payments on Amended Credit Facility													—			—			—		(15,500	)
Proceeds from long-term debt		—			—			—		49,600			701			—			—		8,130
Payments of long-term debt		—			—			—		(3,166	)		—			—			—		(4,654	)
Payments of Title XI bonds		—			(2,460	)		—		(3,535	)		—			(2,631	)		—		(5,580	)
Payments of obligations under capital leases		—			—			—		(1,725	)		––			—			—		(1,825	)
Payments of deferred financing costs related to 2003 Senior Notes and Amended Credit Facility		—			—			—		(285	)
Payments of other deferred financing costs		(28	)		—			—		(683	)
Payment of other deferred financing costs													––			––			––		(14	)
Proceeds from exercise of stock options		—			—			—		167			—			—			—		446
Decrease in restricted cash		—			2,043			—		2,043			—			3,423			—		3,423

Net cash provided by (used in) financing activities		(28	)		(417	)		—		62,416
Net cash (used in) provided by financing activities													701			792			—		(15,574	)


Change in cash and cash equivalents		(645	)		—			—		2,883			(1,848	)		—			––		8,493
Cash and cash equivalents at beginning of period		5,700			—			—		7,399			5,701			—			—		18,949

Cash and cash equivalents at end of period	$	5,055		$	—		$	—	$	10,282		$	3,853		$	—		$	—	$	27,442


	Condensed Consolidating Statement of Cash Flows
	(in thousands)
	Nine Months Ended September 30, 2004
							Non-Wholly
				Wholly Owned			Owned
				Guarantor			Guarantor
				Restricted			Restricted
	Seabulk			Subsidiaries			Subsidiaries

Net cash (used in) provided by operating activities	$	(4,121	)	$	12,944		$	182

Investing activities:
Proceeds from disposals of assets		—			311			—
Purchases of vessels and equipment		(11,787	)		(62,268	)		—
Investment in Joint Venture		—			—			—

Net cash used in financing activities		(11,787	)		(61,957	)		—

Financing activities:
Proceeds from Amended Credit Facility		20,000			—			—
Payments on Amended Credit Facility		(1,483	)		—			—
Proceeds from long-term debt		4,293			52,900	)		—
Payments of long-term debt		(4,278	)		(1,211	)		—
Payments of Title XI bonds		(1,525	)		—			—
Payments of obligations under capital leases		(774	)		(1,826	)		—
Payments of deferred financing costs related to 2003 Senior Notes and Amended Credit Facility		(285	)		—			—
Payments of other deferred financing costs		(218	)		(569	)		—
Proceeds from exercise of stock options		175			—			—
Decrease in restricted cash		—			—			—

Net cash provided by (used in) financing activities		15,905			49,294			—


Change in cash and cash equivalents		(3	)		281			182
Cash and cash equivalents at beginning of period		217			452			1,030

Cash and cash equivalents at end of period	$	214		$	733		$	1,212

2021


	Condensed Consolidating Statement of Cash Flows
	(in thousands)
	Nine Months Ended September 30, 2004
	Non-			Non-
	Guarantor			Guarantor
	Restricted			Unrestricted					Consolidated
	Subsidiaries			Subsidiaries			Eliminations		Total
Net cash (used in) provided by operating activities	$	18,718		$	9,781		$	—	$	37,504

Investing activities:
Proceeds from disposals of assets		3,459						—		3,770
Purchases of vessels and equipment		(18,627	)		(35	)		—		(92,717	)
Investment in Joint Venture		(240	)					—		(240	)

Net cash used in financing activities		(15,408	)		(35	)				(89,187	)

Financing activities:
Proceeds from Amended Credit Facility		—			—			—		20,000
Payments on Amended Credit Facility		—			—			—		(1,483	)
Proceeds from long-term debt		—			—			—		57,193
Payments of long-term debt		—			—			—		(5,489	)
Payments of Title XI bonds		—			(2,459	)		—		(3,984	)
Payments of obligations under capital leases		—			—			—		(2,600	)
Payments of deferred financing costs related to 2003 Senior Notes and Amended Credit Facility		—			—			—		(285	)
Payments of other deferred financing costs		(36	)		—			—		(823	)
Proceeds from exercise of stock options		—			—			—		175
Decrease in restricted cash		—			(7,287	)		—		(7,287	)

Net cash provided by (used in) financing activities		(36	)		(9,746	)		—		55,417


Change in cash and cash equivalents		3,274			—			—		3,734
Cash and cash equivalents at beginning of period		5,700			—			—		7,399

Cash and cash equivalents at end of period	$	8,974		$	—		$	—	$	11,133

Item 2. Management’s Discussion and Analysis of Financial Condition and Results of Operations.

The following Management’s ~~Discussion and Analysis~~narrative analysis of ~~Financial Condition and Results~~results of ~~Operations (“MD&A”~~operations provided in accordance with General Instructions H(2)(a) (the “Narrative”) should be read in conjunction with the condensed consolidated financial statements and the related notes thereto included elsewhere in this Report and the Company’s 2004 Annual Report on Form 10-K and Form 10-K/A Amendment No. 1.

The ~~MD&A~~Narrative contains “forward-looking statements” within the meaning of Section 27A of the Securities Act of 1933, as amended, and Section 21E of the Securities Exchange Act of 1934, as amended. All statements other than statements of historical fact included in the ~~MD&A~~Narrative are forward-looking statements. Although the Company believes that the expectations and beliefs reflected in such forward-looking statements are reasonable, it can give no assurance that they will prove correct. For information regarding the risks and uncertainties that could cause such forward-looking statements to prove incorrect, see “Projections and Other Forward-Looking Information” in Item 1 of the Company’s 2004 Annual Report on Form 10-K and Form 10-K/A Amendment No. 1.

Merger

On March 16, 2005, the Company entered into the Merger Agreement with SEACOR, the Merger Sub, and LLC pursuant to which each issued and outstanding share of Seabulk common stock would be exchanged for (i) $4.00 in cash and (ii) 0.2694 shares of SEACOR common stock. The Merger was approved by the stockholders of the Company on June 27, 2005. On July 1, 2005, the Company completed the Merger and became a wholly–owned subsidiary of SEACOR. Based on the $64.30 closing price of SEACOR common stock on June 30, 2005, the Company’s stockholders received approximately $21.32 in SEACOR common stock and cash for each share of Seabulk common stock.

On July 1, 2005, in connection with, but prior to, the Merger, the Company recorded expenses of approximately $10.4 million including: 1) payment of an investment advisory fee of $1.5 million to the Company’s investment bankers; 2) payment of severance and termination benefits of $4.5 million to certain of the Company’s employees, in accordance with employment contracts and the Company’s change in control severance policy in place prior to the effective date of the Merger; 3) payment of $1.2 million for directors and officers insurance for terminated and/or resigned officers and directors; 4) a charge of $1.3 million to expense certain costs which had been capitalized related to a securities offering the Company was considering prior to the Merger; and 5) a charge of $1.9 million due to the accelerated vesting of unearned compensation of restricted stock grants previously awarded to certain employees.

The Merger was accounted for as a purchase with SEACOR as the acquiror in accordance with SFAS No. 141. Accordingly, the Company performed a preliminary fair value analysis, whereby the purchase price was allocated to the assets and liabilities acquired based on their estimated fair values as of July 1, 2005 including certain identifiable intangible assets, with the excess of purchase price over the fair value of the assets and liabilities acquired recorded as goodwill. The purchase price adjustments were “pushed down” to the consolidated financial statements of the Company.

New Basis of Accounting

The estimates of fair market value and the related “push down” purchase accounting adjustments recorded at the time of Merger are preliminary and subject to change. The “push down” accounting adjustments did not impact cash flows. In addition, in connection with the Merger, the Company changed its accounting policies to adopt those of its Parent. The resulting primary changes to the balance sheet reflect (1) adjustment to the carrying values of vessels and equipment, inventory and the deferred tax valuation allowance to estimated fair value; (2) adjustments to the carrying values of debt and capital leases to estimated fair market value; (3) the reduction of deferred financing and capitalized drydocking costs, which have been subsumed into the estimated fair market value adjustment of the debt and vessels and equipment, respectively; (4) the recording of a value for our customer relationships, trademarks/trade names and non-compete agreements; (5) recording the Company’s interest rate swap as a derivative instrument no longer designated as a fair value hedge of the 2003 Senior Notes; (6) the recording of the excess of the purchase price over the fair value of the assets and liabilities acquired as goodwill; and (7) an increase to the equity section from these adjustments. The primary changes to the statement of operations include (1) an increase in repairs and maintenance as drydocking costs are expensed as incurred beginning July 1, 2005; (2) a decrease in drydock amortization as drydocking costs are expensed as incurred beginning July 1, 2005; (3) an increase in depreciation expense due to differences in fair value versus carrying value of our vessels and equipment; (4) a decrease in interest expense due to amortization of debt premiums arising from differences in fair value and carrying value of our debt instruments; (5) an increase in amortization expense due to the recording of the fair value of our customer relationships, trademarks/trade names and non-compete agreements; and (6) an increase in derivative loss due to the Company’s interest rate swap no longer being designated a fair value hedge.

Due to the impact of the changes resulting from the accounting adjustments described above, the income statement presentation separates our results into two periods: (1) the pre-merger period ending July 1, 2005 with the consummation of the Merger and (2) the period beginning after the pre-merger period ending July, 1 2005 utilizing the new basis of accounting. The results are further separated by a heavy black line to indicate the effective date of the new basis of accounting. Similarly, the current and prior period amounts reported on the Balance Sheet are separated by a heavy black line to indicate the application of a new basis of accounting between the periods presented.

Overview of Revenue

The Company derives its revenue from three main lines of business —– offshore energy support, marine transportation, and marine towing. Seabulk Offshore, the Company’s domestic and international offshore energy support business, accounted for approximately 49.0% ~~and 47.6%~~ of Company revenue for the ~~six~~period January 1, 2005 – July 1, 2005 and 52.0% for the three months ended ~~June~~September 30, 2005 ~~and 2004, respectively.~~as compared to 46.9% for the nine months ended September 30, 2004. Seabulk Tankers, our tanker business, consists of the Company’sJones ActU.S.-flag product tanker business, in which it owns nine petroleum and chemical product tankers and leases one chemical product tanker in the domestic coastwise trade and one in foreign trade. The tanker business also consists of the Company’s two foreign-flag product tankers which began operations in the international trade in March and April ~~2004.~~2004 and were sold in August and September 2005. Seabulk Tankers accounted for approximately 39.3% ~~and 41.1%~~ of Company revenue for the ~~six~~period January 1, 2005 – July 1, 2005 and 36.5% for the three months ended ~~June~~September 30, 2005 ~~and 2004, respectively.~~as compared to 41.7% for the nine months ended September 30, 2005. Seabulk Towing, the Company’s domestic harbor and offshore towing business, accounted for approximately 11.7% ~~and 11.3%~~ of Company revenue for the period January 1, 2005 — July 1, 2005 and 11.6% for the three months ended September 30, 2005 compared to 11.6% for the nine six months ended ~~June~~September 30, ~~2005 and 2004, respectively.~~2005.

Q1 2005 Q2 2005
AHTS/ AHT/ Crew/ AHTS/ AHT/ Crew/
Supply Tugs Utility Other Supply Tugs Utility Other
Americas⁽¹⁾

Vessels⁽²⁾
24 — 14 1 22 — 14 1
Effective Utilization 64 % — 77 % — 79 % — 78 % —
Average Day Rate $ 5,518 — $ 3,196 — $ 6,203 — $ 3,441 —

West Africa

Vessels⁽²⁾
29 2 3 1 29 3 2 —
Effective Utilization 87 % 79 % 92 % — 95 % 65 % 93 % —
Average Day Rate $ 7,564 $ 7,076 $ 3,653 — $ 7,419 $ 7,007 $ 3,877 —

Middle East

Vessels⁽²⁾
8 5 7 4 8 5 7 3
Effective Utilization 84 % 95 % 72 % 72 % 79 % 83 % 87 % 88 %
Average Day Rate $ 4,298 $ 4,686 $ 1,614 $ 4,095 $ 4,385 $ 4,740 $ 1,733 $ 4,642

Southeast Asia

Vessels⁽²⁾
7 — — 1 7 — — 1
Effective Utilization 94 % — — — 94 % — — —
Average Day Rate $ 6,159 — — — $ 6,136 — — —
Company’s offshore energy support vessels:


	Three Months Ended		January 1, 2005 –		Nine Months Ended
	September 30, 2005		July 1, 2005		September 30, 2004

	Successor Company		Predecessor Company

Number of vessels operated at end of period		100		103		111
Revenue (in thousands)	$	50,935	$	94,190	$	121,417


⁽¹⁾		~~Americas consists of vessels operating in the United States, the Gulf of Mexico, South America, and the Caribbean.~~

⁽²⁾		~~Held-for-sale vessels are excluded from the vessel count.~~

Q1 2004 Q2 2004 Q3 2004 Q4 2004
AHTS/ AHT/ Crew/ AHTS/ AHT/ Crew/ AHTS/ AHT/ Crew/ AHTS/ AHT/ Crew/
Supply Tugs Utility Other Supply Tugs Utility Other Supply Tugs Utility Other Supply Tugs Utility Other
Americas⁽¹⁾

Vessels⁽²⁾
21 — 22 2 21 — 21 2 21 — 18 2 22 — 18 2
Laid-Up — — — 1 — — — 1 — — — 1 — — — 1
Effective Utilization 43 % — 63 % — 52 % — 67 % — 68 % — 73 % — 69 % — 72 % —
Day Rate $ 5,001 — $ 2,410 — $ 4,879 — $ 2,442 — $ 4,768 — $ 2,705 — $ 5,421 — $ 2,958 —

West Africa

Vessels⁽²⁾
33 4 3 — 33 4 3 — 33 4 3 — 32 2 3 1
Effective Utilization 82 % 86 % 98 % — 83 % 75 % 94 % — 78 % 67 % 93 % — 77 % 70 % 84 % —
Day Rate $ 7,281 $ 6,193 $ 3,413 — $ 7,350 $ 6,831 $ 3,524 — $ 7,300 $ 6,196 $ 3,620 — $ 7,574 $ 6,329 $ 3,664 —

Middle East

Vessels⁽²⁾
6 5 7 5 6 5 7 4 6 5 7 4 6 5 7 4
Effective Utilization 89 % 80 % 79 % 43 % 97 % 84 % 92 % 78 % 83 % 75 % 93 % 95 % 86 % 64 % 80 % 99 %
Day Rate $ 3,750 $ 4,565 $ 1,740 $ 3,966 $ 3,880 $ 4,739 $ 1,712 $ 5,043 $ 3,827 $ 4,951 $ 1,659 $ 4,804 $ 3,782 $ 5,388 $ 1,580 $ 4,733

Southeast Asia

Vessels⁽²⁾
8 — — 1 7 — — 1 7 — — 1 7 — — 1
Effective Utilization 66 % — — — 77 % — — — 88 % — — — 93 % — — —
Day Rate $ 5,422 — — — $ 5,388 — — — $ 5,400 — — — $ 5,327 — — —


⁽¹⁾		~~Domestic consists of vessels operating in the United States, the Gulf of Mexico, South America, and the Caribbean.~~

⁽²⁾		~~Held-for-sale vessels are excluded from the vessel count.~~

Offshore energy support revenue in the Americas was not impacted by the accounting adjustments and for the ~~six~~nine months ended ~~June~~September 30, 2005 offshore energy support revenue in the Americas increased by ~~57.6%~~approximately 19.5% over the same period in 2004. Gulf of Mexico revenue increased ~~from the prior year due to improvement in natural gas~~through higher utilization and ~~crude oil drilling activity~~day rates due to higher ~~commodity prices and strong~~demand for offshore energy ~~demand, which resulted~~support services caused by an increase in ~~higher rates and utilization.~~drilling activity. Brazil revenues increased as ~~the~~ two ~~newbuild~~new supply boats commenced ~~their~~ long-term charters during ~~the six months ended June 30,~~ 2005.

International offshore revenues were not impacted by the accounting adjustments and for the ~~six~~nine months ended ~~June~~September 30, 2005 international offshore revenues increased by approximately ~~6.4%~~8.3% over ~~the~~ same period in 2004. International vessel demand is primarily driven by crude oil exploration and production. During the first ~~and second quarters~~nine months of 2005, crude oil prices and demand remained high. Revenues for the Middle East and Southeast Asia region increased as operations in India and Vietnam continued to be strong. The West African market had a slight decrease in revenue primarily due to vessel sales.

Seabulk Tankers

The following table sets forth the number of vessels and revenue for the Company’s U.S. and foreign-flag product carriers:

Six Months Ended June 30,
2005 2004
Number of vessels operated at end of period 12 12
Revenue (in thousands)
$ 75,721 $ 69,870


	Three Months Ended		January 1, 2005 –		Nine Months Ended
	September 30, 2005		July 1, 2005		September 30, 2004

	Successor Company		Predecessor Company

Number of vessels operated at end of period		10		12		12
Revenue (in thousands)	$	35,723	$	75,721	$	107,937

Tanker revenue was not impacted by the accounting adjustments and for the nine months ended September 30, 2005 increased by ~~8.4%~~3.3% over the same period in 2004. The revenue increase was due to improved day rates and a short term charter completed during the ~~first half of 2005~~third quarter offset by the decline in revenue as a result of ~~adding~~the sale of the two foreign-flag double-hull product tankers toduring the quarter and the drydocking of two of the Company’s ~~fleet at the end~~tankers which were out of ~~March 2004.~~service for approximately 77 days combined.

Results of Operations

The following table sets forth certain selected financial data and percentages of revenue for the periods ~~indicated:~~indicated (in millions):


												Three Months Ended					January 1, 2005 -					Nine Months Ended
	Six Months Ended June 30,											September 30, 2005					July 1, 2005					September 30, 2004
	2005						2004					Successor Company					Predecessor Company
				(in millions)
Revenue	$	192.3			100	%	$	169.7		100	%	$	97.9		100	%	$	192.3		100	%	$	259.1		100	%
Vessel and voyage expenses		97.8			51	%		97.1		57	%		57.1		58	%		97.8		51	%		144.1		57	%
General and administrative		21.6			11	%		18.8		11	%		9.4		10	%		32.0		17	%		28.1		11	%
Depreciation, amortization, and drydocking		33.1			17	%		32.9		19	%		27.3		28	%		33.1		17	%		49.6		19	%
Gain on disposal of assets, net		(0.3	)		(0	%)		(2.0	)	(1	%)		(0.0	)	(0	%)		(0.3	)	(0	%)		(2.4	)	(1	%)


Income from operations	$	40.1			21	%	$	22.9		14	%	$	4.1		4	%	$	29.7		15	%	$	39.7		14	%


Interest expense, net	$	18.4			10	%	$	16.3		10	%	$	8.1		8	%	$	18.4		10	%	$	24.7		10	%


Other income (expense), net	$	0.0			0	%	$	4.6		3	%	$	4.1		4	%	$	0.0		0	%	$	4.5		3	%

(Loss) income before provision for income taxes												$	(8.0	)	(8	)%	$	11.4		6	%	$	19.5		7	%

Income before provision for income taxes	$	21.8			11	%	$	11.3		7	%
Net (loss) income												$	(6.9	)	(7	)%	$	8.8		5	%	$	15.2		5	%

Net income	$	19.2			10	%	$	8.4		5	%

As a result of the accounting adjustments described inNew Basis of Accounting, above, the activity for the period beginning after the pre-merger period ending July 1, 2005 through September 30, 2005 (the “Successor Company” period) is reported under the new basis of accounting while the activity for the period January 1, 2005 through the pre-merger period ending July 1, 2005 (the “Predecessor Company” period) is reported on the historical basis of accounting, which was used in 2004. For the Successor Company period, the primary changes to the statement of operations reflect (1) an increase in repairs and maintenance as drydocking costs are expensed as incurred beginning July 1, 2005; (2) a decrease in drydock amortization as drydocking costs are expensed as incurred beginning July 1, 2005; (3) an increase in depreciation expense due to differences in fair value versus carrying value of our vessels and equipment; (4) a decrease in interest expense due to amortization of debt premiums arising from differences in fair value and carrying value of our debt instruments; (5) an increase in amortization expense due to the recording of the fair value of our customer relationships, trademarks/trade names and non-compete agreements; and (6) an increase in derivative loss due to the Company’s interest rate swap no longer being designated a fair value hedge.

Offshore revenue, which was not impacted by the accounting adjustments, during the ~~six~~nine months ended ~~June~~September 30, 2005 increased ~~16.6% from $80.8 million to $94.2 million~~19.5% versus the comparable period in 2004. The increase primarily reflects increases in rates and utilization for the Americas (including additions to ~~the~~ Brazil fleet), Middle East and Southeast Asia regions.

Marine transportation revenue, which was not impacted by the accounting adjustments, during the ~~six~~nine months ended ~~June~~September 30, 2005 increased ~~8.4% from $69.9 million to $75.7 million~~3.3% versus the comparable period in 2004. The increase primarily reflects an increase in day rates, and a short term charter completed during the ~~full six month operations in 2005~~third quarter at favorable rates. Those revenue gains were offset by the sale of the ~~Company’s~~ two foreign-flag double-hull product tankers which did not operate for the full quarter and the drydocking of two vessels which were ~~added to the fleet at the end~~out of ~~March 2004.~~service for approximately 77 days combined.

Towing revenue, which was not impacted by the accounting adjustments, during the ~~six~~nine months ended ~~June~~September 30, 2005 increased ~~16.6% from $19.3 million to $22.5 million~~12.7% versus the comparable period in 2004. The increase primarily reflects additional vessel traffic in certain of the Company’s ports, higher rates and improved utilization of the Company’s tug fleet.

Vessel and Voyage Expenses. Vessel and voyage expenses ~~during~~include $9.2 million of drydock expenses in the ~~six months ended June 30, 2005~~Successor Company period due to a change in accounting policy, whereby the Company conformed to SEACOR’s accounting policy of expensing drydock expenses as incurred, which the Company had previously deferred and amortized. Of the $9.2 million of drydock expense incurred in the third quarter, $6.7 million was related to the drydocking of two tankers. Excluding the accounting policy change, vessel and voyage expenses for the combined Successor Company and Predecessor Company period remained substantially the same ~~at $97.8 million versus $97.1 in~~compared to the ~~comparable period in~~nine months ended September 30, 2004.

General and Administrative Expenses. General and administrative expenses ~~during~~in the ~~six~~Predecessor Company period includes $10.4 million of charges directly related to and contingent upon the Merger which includes: 1) payment of an investment advisory fee of $1.5 million to the Company’s investment bankers; 2) payment of severance and termination benefits of $4.5 million to certain of the Company’s employees, in accordance with employment and severance contracts and the Company’s change in control severance policy in place prior to the effective date of the Merger; 3) payment of $1.2 million for directors and officers insurance for terminated and/or resigned officers and directors; 4) a charge of $1.3 million to expense certain costs which had been capitalized related to a public offering the Company was considering prior to the Merger; and 5) a charge of $1.9 million due to the accelerated vesting of unearned compensation of restricted stock grants previously awarded to certain employees. Excluding these charges general and administrative expenses for the combined Successor Company and Predecessor Company period increased 10.3% over the nine months ended ~~June~~September 30, ~~2005 increased 14.9% from $18.8 million to $21.6 million versus the comparable period in 2004. The increase is~~2004, primarily due to costs ~~incurred related to~~associated with the ~~merger with SEACOR, an~~

Gain on Disposal of Assets, Net.~~Gain~~No gain or loss on the disposal of assets ~~during~~is recognized for the ~~six~~Successor Company period as the fair values of the disposed vessels are equal to their sales price. Gain on the sale of assets in the Predecessor Company period decreased 93.3% compared to the nine months ended ~~June~~September 30, ~~2005 decreased 83.7% from a gain of $2.0 million to a gain of $0.3 million versus the comparable period in~~ 2004. The number of vessels sold or exchanged increased to 11 for the ~~six months ended June 30, 2005~~Predecessor Company period compared to three for the ~~same period in~~nine months ended September 30, 2004. However, sales in nine months ended September 30, 2004 included theSeabulk Maintainer, which had a gain of approximately $1.5 million.

Net Interest Expense.Net interest expense ~~during~~in the ~~six~~Successor Company period includes a $1.1 million reduction of interest expense due to amortization of debt premiums arising from differences in fair value and carrying value of our debt instruments. Excluding this premium amortization, interest expense for the combined Successor Company and Predecessor Company period increased 11.7% versus the nine months ended ~~June~~September 30, ~~2005 increased 12.5% from $16.3 million to $18.4 million versus the comparable period in~~ 2004. The increase is due to the debt incurred for the purchase of the two foreign-flag tankers, which entered service in late March 2004 and were sold during the third quarter of 2005 and an overall increase in the Company’s variable borrowing rates.

Other Income (Expense), Net.Other income (expense), net ~~during~~in the ~~six~~Successor Company period includes a derivative loss of $4.1 million due to the Company’s interest rate swap no longer being designated a fair value hedge as a result of the accounting adjustments. Excluding the derivative loss, other income (expense), net for the combined Successor Company and Predecessor Company period, decreased 100% versus the nine months ended ~~June~~September 30, ~~2005 decreased to $0.0 million versus income of $4.6 million in the comparable period in~~ 2004. The decrease is ~~primarily~~ due to the proceeds from the Company’s settlement of litigation, in which it received a total of $4.5 million from two of its suppliers in March 2004.

Interest Rate Risk

The Company is exposed to market risk from changes in interest rates, which may adversely affect its results of operations and financial condition. On October 20, 2003, the Company entered into a ten-year interest rate swap agreement with its Amended Credit Facility lenders and other members of its lending group. The Company entered into this transaction in order to take advantage of a lower available interest rate. ~~Through~~The swap agreement is secured by a second lien on the assets that secure the Company’s Amended Credit Facility.

Prior to the Successor Company period, through this derivative instrument, which covers a notional amount of $150.0 million, the Company effectively converted the interest rate on its outstanding 2003 Senior Notes due August 2013 to a floating rate based on LIBOR. The ~~current effective floating interest rate is 7.88%. The~~ floating rate is adjusted semi-annually in February and August of each year. ~~The~~Effective July 1, 2005, as a consequence of the Merger, the Company chose to no longer designate the interest rate swap ~~agreement is secured~~as a fair value hedge of the 2003 Senior Notes, consistent with the accounting treatment adopted by ~~a second lien on the assets that secure~~ the Company’s ~~Amended Credit Facility.~~Parent. The effect of the change is that the change in value of the interest rate swap is recorded as a derivative gain or loss in the statement of operations.

The interest rate swap was valued as ~~an asset~~a liability of ~~$4.2~~$1.1 million as of ~~June~~September 30, 2005 ~~an increase~~a decrease of ~~$1.3~~$4.0 million from the value as of December 31, 2004 and is included in other ~~assets with an offsetting increase in the 2003 Senior Notes~~current liabilities in the accompanying condensed consolidated financial statements. The Company expects the fair value of the swap to change in accordance with the movement in the ~~underlying~~forward LIBOR rate.

Item 3. Quantitative and Qualitative Disclosures About Market Risk.

N/A under General Instructions H(2)(c).

Item 4. Controls and Procedures.

Evaluation of Disclosure Controls and Procedures

The Company maintains systems of disclosure controls and procedures (as defined in Rule 13a-15(e) of the Securities Exchange Act of 1934) designed to ensure that the Company is able to record, process, summarize and report, within the applicable time periods, the information required in the Company’s annual and quarterly reports under the Securities Exchange Act of 1934. Management of the Company has evaluated the effectiveness of these disclosure controls and procedures as of the end of the period covered by this report. Based upon that evaluation, the principal executive officer and principal financial officer concluded that these disclosure controls and procedures are effective to accomplish their purpose. No changes were made during the period covered by this report to the Company’s internal control over financial reporting (as defined in Rule 13a-15(f) of the Securities and Exchange Act of 1934) that have materially affected the Company’s internal control over financial reporting or are reasonably likely to materially affect the Company’s internal control over financial reporting.

Attached as Exhibits 31.1 and 31.2 hereto are certifications by the Company’s Chief Executive Officer and Chief Financial Officer, which are required by Section 302 of the Sarbanes-Oxley Act of 2002. The information set forth in this Item 4 should be read in conjunction with these Section 302 certifications. Additionally, our Chief Executive Officer and Chief Financial Officer have provided certain certifications to the Commission pursuant to Section 906 of the Sarbanes-Oxley Act of 2002, which are ~~filed as exhibits to~~furnished with this Report on Form 10-Q.

2730

PART II. OTHER INFORMATION

Item 1. Legal Proceedings.

For information concerning certain legal proceedings see Note 78 of the financial statements.

Item 2. Changes in Securities and Use of Proceeds.

N/A under General ~~Instructions H(1)(a) and~~ Instruction H(2)(b).

Item 3. Defaults upon Senior Securities.

N/A under General ~~Instructions H(1)(a) and~~ Instruction H(2)(b).

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

N/A under General ~~Instructions H(1)(a) and~~ Instruction H(2)(b).

Item 5. Other Information.

None.

Item 6. Exhibits and Reports on Form 8-K.

(a) Exhibits

	~~10.46~~		~~Fourth Supplemental Credit Agreement dated June 10, 2005 among Seabulk International, Inc. and Fortis Capital Corp. (filed herewith).~~

	~~10.47~~		~~Fourth Supplemental Subsidiary Guarantee Agreement dated June 10, 2005 among Seabulk International Inc. and Fortis Capital Corp. (filed herewith).~~

	~~10.48~~		Fifth Supplemental Credit Agreement dated June 23, 2005 among Seabulk International, Inc., Seabulk Towing, Inc. and each of the four Additional Subsidiary Guarantors and Fortis Capital Corp. (filed herewith).

	~~10.49~~		Fifth Supplemental Subsidiary Guarantee Agreement dated June 23, 2005 among Seabulk International Inc., Seabulk Towing, Inc. and each of the four Additional Subsidiary Guarantors and Fortis Capital Corp. (filed herewith).

	~~10.50~~		~~Amendment No. 4 to Executive Employment Agreement by and between Seabulk International Inc. and Gerhard E. Kurz dated April 18, 2005 (filed herewith).~~

	~~10.51~~		~~Amendment No. 5 to Executive Employment Agreement by and between Seabulk International Inc. and Gerhard E. Kurz dated June 28, 2005 (filed herewith).~~

	~~10.52~~		~~Amendment No. 1 to Seabulk International Inc. Executive Deferred Compensation Plan dated April 18, 2005 (filed herewith).~~

	~~10.53~~		~~Amendment No. 1 to Seabulk International Inc. Stock Option Plan for Directors dated April 18, 2005 (filed herewith).~~

	~~10.54~~		~~Specimen of Amendment No. 2 to Non-Qualified Stock Option Agreement dated April 18, 2005 (filed herewith).~~

	~~10.55~~		~~Amendment No. 1 to Seabulk International Inc. Amended and Restated Equity Ownership Plan dated April 18, 2005 (filed herewith).~~

	~~10.56~~		~~Specimen of Amendment No. 2 to Severance Agreement dated April 18, 2005 (filed herewith).~~

	31.1		Certification of Principal Executive Officer pursuant to Rule 13a-14(a) of the Securities and

	32.1		Certification of Principal Executive Officer pursuant to 18 U.S.C. § 1350, as adopted pursuant to Section 906 of the ~~Sarbanes-Oxley~~Sarbanes–Oxley Act of 2002 and Rule 13a-14(b) of the Securities Exchange Act of 1934 (furnished herewith).

	32.2		Certification of Principal Financial Officer pursuant to 18 U.S.C. § 1350, as adopted pursuant to Section 906 of the ~~Sarbanes-Oxley~~Sarbanes–Oxley Act of 2002 and Rule 13a-14(b) of the Securities Exchange Act of 1934 (furnished herewith).

(b) Reports on Form 8-K

The following reports on Form 8-K were filed (other than information reported pursuant to Item 9, which was furnished to the Securities and Exchange Commission rather than filed) during the quarter ended ~~June~~September 30, 2005:


	1.		The Company filed a Current Report on Form 8-K dated ~~May 5,~~July 1, 2005. Items 2, 5 and 9 were reported and no financial statements were filed.

	2.		The Company filed a Current Report on Form ~~8-K/A dated May 5,~~8-K date August 2, 2005. Items ~~2, 8~~7 and 9 were reported and no financial statements were filed.

	3.		~~The Company filed a Current Report on Form 8-K dated May 10, 2005. Items 1, 2 and 9 were reported and no financial statements were filed.~~

	4.		~~The Company filed a Current Report on Form 8-K dated June 27, 2005. Item 8 was reported and no financial statements were filed.~~

2932


Item	Page

Part I. Financial Information

Item 1. Condensed Consolidated Financial Statements (Unaudited)		1

Condensed Consolidated Balance Sheets ~~as of June~~at September 30, 2005 and December 31, 2004		1

Condensed Consolidated Statements of Operations for the three ~~and six~~ months ended ~~June~~September 30, 2005 and 2004, the pre-merger period ended July 1, 2005, the period January 1 — July 1, 2005 and the nine months ended September 30, 2004		2

Condensed Consolidated Statements of Cash Flows for the ~~six~~three months ended ~~June~~September 30, 2005, the period January 1 — July 1, 2005 and the nine months ended September 30, 2005 and 2004		3

Notes to Condensed Consolidated Financial Statements		4

Item 2. Management’s Discussion and Analysis of Financial Condition and Results of Operations		2123

Item 3. Quantitative and Qualitative Disclosures About Market Risk		30

Item 4. Controls and Procedures		2730

Part II. Other Information

Item 1. Legal Proceedings		2831

Item 2. Changes in Securities and Use of Proceeds		2831

Item 3. Defaults upon Senior Securities		2831

Item 4. Submission of Matters to a Vote of Security Holders		2831

Item 5. Other Information		2831

Item 6. Exhibits and Reports on Form 8-K		28

~~Signature~~		3031

Certifications		3133
~~Fourth Supplemental Credit Agreement~~
~~Fourth Supplemental Subsidiary Guarantee Agreement~~
~~Fifth Supplemental Credit Agreement~~
~~Fifth Supplemental Subsidiary Guarantee Agreement~~
~~Amend No. 4 to~~Section 302 Chief Executive ~~Employment Agreement~~
~~Amend No. 5 to Executive Employment Agreement~~
~~Amend No. 1 to Executive Defferred Compensation Plan~~
~~Amend No.1 to Stock Option Plan for Directors~~
~~Specimen of Amend No. 2 - Non-Qualified Stock Option~~
~~Amend No1 to Amended & Restated Equity Ownership Plan~~
~~Specimen of Amend No.2 to Severance Agreement~~Officer Certification
Section 302 ~~Certification of Principal Executive Officer~~
~~Section 302 Certification of Principal~~Chief Financial Officer Certification
Section 906 ~~Certification of Principal~~Chief Executive Officer Certification
Section 906 ~~Certification of Principal~~Chief Financial Officer Certification


	Seabulk International Inc. (Registrant)
DATE: November 14, 2005	By:	/s/ Charles Fabrikant
		Charles Febrikant, Chairman of the Board,
		President and Chief Executive Officer (Principal Financial Officer)


DATE: November 14, 2005	By:	/s/ Richard Ryan
		Richard Ryan, Vice President and Chief Financial Officer
		(Principal Financial Officer)


⁽¹⁾		Eliminations of intersegment towing revenue and intersegment marine transportation vessel and voyage ~~expenses.~~expenses .

⁽²⁾		Americas consist of vessels operating in the United States, the Gulf of Mexico, South America and the Caribbean.


	Condensed Consolidating Balance Sheet
	(in thousands)
	As of June 30, 2005

				Wholly
				Owned		Non-		Non-
				Guarantor		Guarantor		Guarantor
				Restricted		Restricted		Unrestricted					Consolidated
	Parent^(a)			Subsidiaries^(a)		Subsidiaries		Subsidiaries		Eliminations			Total
Assets
Current assets:
Cash and cash equivalents	$	21,253		$	2,336	$	3,853	$	—	$	—		$	27,442
Restricted cash		—			—		2,756		29,502		—			32,258
Trade accounts receivable, net		(457	)		18,615		32,251		1,028		—			51,437
Other receivables		214			2,549		701		310		—			3,774
Marine operating supplies		(1,026	)		3,416		2,849		2,429		—			7,668
Prepaid expenses and other		1,856			547		1,145		381		—			3,929

Total current assets		21,840			27,463		43,555		33,650		—			126,508

Vessels and equipment, net		29,442			235,848		121,422		204,231		—			590,943
Deferred costs, net		7,435			13,591		12,381		7,086		—			40,493
Investments in affiliates		562,222			—		—		—		(562,222	)		—
Due from affiliates		—			44,508		137,482		3,855		(185,845	)		—
Other		10,606			999		1,560		13,153		—			26,318

Total assets	$	631,545		$	322,409	$	316,400	$	261,975	$	(748,067	)	$	784,262


Liabilities and Stockholders’ Equity

Current liabilities:
Accounts payable	$	154		$	3,542	$	6,162	$	—	$	—		$	9,858
Current maturities of long-term debt		2,179			7,070		875		5,537		—			15,661
Current obligations under capital leases		1,129			2,225		—		—		—			3,354
Accrued interest		4,825			151		5		652		—			5,633
Accrued liabilities and other		6,847			5,890		18,646		2,579		—			33,962

Total current liabilities		15,134			18,878		25,688		8,768		—			68,468

Long-term debt		47,022			49,738		14,742		197,851		—			309,353
Senior notes		154,219			—		—		—		—			154,219
Obligations under capital leases		9,899			17,198		—		—		—			27,097
Due to affiliates		182,671			—		—		—		(182,671	)		—
Other liabilities		3,625			557		1,922		46		—			6,150

Total liabilities		412,570			86,371		42,352		206,665		(182,671	)		565,287


Commitments and contingencies

Total stockholders’ equity		218,975			236,038		274,048		55,310		(565,396	)		218,975

Total liabilities and stockholders’ equity	$	631,545		$	322,409	$	316,400	$	261,975	$	(748,067	)	$	784,262


	Condensed Consolidating Statement of Operations
	(in thousands)
	Three Months Ended June 30, 2005

				Wholly			Non-Wholly
				Owned			Owned		Non-			Non-
				Guarantor			Guarantor		Guarantor			Guarantor
				Restricted			Restricted		Restricted			Unrestricted						Consolidated
	Parent^(b)			Subsidiaries^(b)			Subsidiaries^(a)		Subsidiaries			Subsidiaries			Eliminations			Total
Revenue	$	11,452		$	31,298		$	—	$	36,780		$	17,269		$	(112	)	$	96,687

Vessel and voyage expenses		7,102			17,209			—		18,274			7,353			(112	)		49,826
General and administrative		5,503			2,481			—		3,612			445			—			12,041
Depreciation, amortization and drydocking		2,130			5,156			—		6,512			2,779			—			16,577
Loss (gain) on disposal of assets, net		—			603			—		(1,056	)		—			—			(453	)

Income from operations		(3,283	)		5,849			—		9,438			6,692						18,696
Other expense, net		(317	)		(2,538	)		—		(2,511	)		(3,685	)		—			(9,051	)

Income before provision for income taxes		(3,600	)		3,311			—		6,927			3,007			—			9,645
Provision for income taxes		—			—			—		1,624			—			—			1,624

Net income	$	(3,600	)	$	3,311		$	—	$	5,303		$	3,007		$	—		$	8,021


	Condensed Consolidating Statement of Operations
	(in thousands)
	Three Months Ended June 30, 2004
				Wholly			Non-Wholly
				Owned			Owned			Non-			Non-
				Guarantor			Guarantor			Guarantor			Guarantor
				Restricted			Restricted			Restricted			Unrestricted						Consolidated
	Parent			Subsidiaries			Subsidiaries			Subsidiaries			Subsidiaries			Eliminations			Total
Revenue	$	10,377		$	21,817		$	3,769		$	32,981		$	18,396		$	(137	)	$	87,203

Vessel and voyage expenses		6,693			13,942			2,322			18,670			8,704			(137	)		50,194
General and administrative		3,150			1,967			205			3,647			354			—			9,323
Depreciation, amortization and drydocking		2,213			4,336			822			7,051			2,705			—			17,127
Gain on disposal of assets, net		—			(184	)		—			(1,805	)		—			—			(1,989	)

Income from operations		(1,679	)		1,756			420			5,418			6,633			—			12,548
Other expense, net		(93	)		(2,337	)		(357	)		(1,635	)		(3,849	)		(20	)		(8,291	)

Income before provision for income taxes		(1,772	)		(581	)		63			3,783			2,784			(20	)		4,257
Provision for income taxes		—			—			—			1,536			—			—			1,536

Net income	$	(1,772	)	$	(581	)	$	63		$	2,247		$	2,784		$	(20	)	$	2,721


	Condensed Consolidating Statement of Operations
	(in thousands)
	Six Months Ended June 30, 2005

				Wholly			Non-Wholly
				Owned			Owned		Non-			Non-
				Guarantor			Guarantor		Guarantor			Guarantor
				Restricted			Restricted		Restricted			Unrestricted						Consolidated
	Parent^(b)			Subsidiaries^(b)			Subsidiaries^(a)		Subsidiaries			Subsidiaries			Eliminations			Total
Revenue	$	23,279		$	61,802		$	—	$	72,020		$	35,358		$	(191	)	$	192,268

Vessel and voyage expenses		13,691			32,914			—		36,579			14,760			(191	)		97,753
General and administrative		8,976			4,881			—		6,876			876			—			21,609
Depreciation, amortization and drydocking		4,424			10,238			—		12,877			5,558			—			33,097
Loss (gain) on disposal of assets, net		—			585			—		(908	)		—			—			(323	)

Income from operations		(3,812	)		13,184			—		16,596			14,164			—			40,132
Other expense, net		(766	)		(5,308	)		—		(4,910	)		(7,355	)		—			(18,339	)

Income before provision for income taxes		(4,578	)		7,876			—		11,686			6,809			—			21,793
(Benefit) provision for income taxes		(507	)		—			—		3,099			—			—			2,592

Net income	$	(4,071	)	$	7,876		$	—	$	8,587		$	6,809		$	—		$	19,201


	Q1 2005												Q2 2005
	AHTS/			AHT/			Crew/						AHTS/			AHT/			Crew/
	Supply			Tugs			Utility			Other			Supply			Tugs			Utility			Other
Americas⁽¹⁾
Vessels⁽²⁾		24			—			14			1			22			—			14			1
Effective Utilization		64	%		—			77	%		—			79	%		—			78	%		—
Average Day Rate	$	5,518			—		$	3,196			—		$	6,203			—		$	3,441			—

West Africa
Vessels⁽²⁾		29			2			3			1			29			3			2			—
Effective Utilization		87	%		79	%		92	%		—			95	%		65	%		93	%		—
Average Day Rate	$	7,564		$	7,076		$	3,653			—		$	7,419		$	7,007		$	3,877			—

Middle East
Vessels⁽²⁾		8			5			7			4			8			5			7			3
Effective Utilization		84	%		95	%		72	%		72	%		79	%		83	%		87	%		88	%
Average Day Rate	$	4,298		$	4,686		$	1,614		$	4,095		$	4,385		$	4,740		$	1,733		$	4,642

Southeast Asia
Vessels⁽²⁾		7			—			—			1			7			—			—			1
Effective Utilization		94	%		—			—			—			94	%		—			—			—
Average Day Rate	$	6,159			—			—			—		$	6,136			—			—			—


	Q1 2004												Q2 2004												Q3 2004												Q4 2004
	AHTS/			AHT/			Crew/						AHTS/			AHT/			Crew/						AHTS/			AHT/			Crew/						AHTS/			AHT/			Crew/
	Supply			Tugs			Utility			Other			Supply			Tugs			Utility			Other			Supply			Tugs			Utility			Other			Supply			Tugs			Utility			Other
Americas⁽¹⁾
Vessels⁽²⁾		21			—			22			2			21			—			21			2			21			—			18			2			22			—			18			2
Laid-Up		—			—			—			1			—			—			—			1			—			—			—			1			—			—			—			1
Effective Utilization		43	%		—			63	%		—			52	%		—			67	%		—			68	%		—			73	%		—			69	%		—			72	%		—
Day Rate	$	5,001			—		$	2,410			—		$	4,879			—		$	2,442			—		$	4,768			—		$	2,705			—		$	5,421			—		$	2,958			—

West Africa
Vessels⁽²⁾		33			4			3			—			33			4			3			—			33			4			3			—			32			2			3			1
Effective Utilization		82	%		86	%		98	%		—			83	%		75	%		94	%		—			78	%		67	%		93	%		—			77	%		70	%		84	%		—
Day Rate	$	7,281		$	6,193		$	3,413			—		$	7,350		$	6,831		$	3,524			—		$	7,300		$	6,196		$	3,620			—		$	7,574		$	6,329		$	3,664			—

Middle East
Vessels⁽²⁾		6			5			7			5			6			5			7			4			6			5			7			4			6			5			7			4
Effective Utilization		89	%		80	%		79	%		43	%		97	%		84	%		92	%		78	%		83	%		75	%		93	%		95	%		86	%		64	%		80	%		99	%
Day Rate	$	3,750		$	4,565		$	1,740		$	3,966		$	3,880		$	4,739		$	1,712		$	5,043		$	3,827		$	4,951		$	1,659		$	4,804		$	3,782		$	5,388		$	1,580		$	4,733

Southeast Asia
Vessels⁽²⁾		8			—			—			1			7			—			—			1			7			—			—			1			7			—			—			1
Effective Utilization		66	%		—			—			—			77	%		—			—			—			88	%		—			—			—			93	%		—			—			—
Day Rate	$	5,422			—			—			—		$	5,388			—			—			—		$	5,400			—			—			—		$	5,327			—			—			—

			Exchange Act of 1934 (furnished herewith).

	31.2		Certification of Principal Financial Officer pursuant to Rule 13a-14(a) of the Securities and Exchange Act of 1934 (furnished herewith).