<PAGE>

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                UNITED STATES SECURITIES AND EXCHANGE COMMISSION
                             WASHINGTON, D.C. 20549

                                   FORM 10-K

<Table>
(Mark One)
<C>        <S>
   [X]     ANNUAL REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE
           SECURITIES EXCHANGE ACT OF 1934

           FOR THE FISCAL YEAR ENDED DECEMBER 31, 2005

                                  OR

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

           FOR THE TRANSITION PERIOD FROM          TO
</Table>

                        COMMISSION FILE NUMBER 000-49717

                          CROWLEY MARITIME CORPORATION
             (Exact name of registrant as specified in its charter)

<Table>
<S>                                                    <C>
                       DELAWARE                                              94-3148464
           (State or other jurisdiction of                                (I.R.S. Employer
            incorporation or organization)                              Identification No.)
                  155 GRAND AVENUE,                                            94612
                 OAKLAND, CALIFORNIA                                         (Zip Code)
       (Address of principal executive offices)
</Table>

              REGISTRANT'S TELEPHONE NUMBER, INCLUDING AREA CODE:
                                 (510) 251-7500

          SECURITIES REGISTERED PURSUANT TO SECTION 12(b) OF THE ACT:

<Table>
<Caption>
                 TITLE OF EACH CLASS                         NAME OF EACH EXCHANGE ON WHICH REGISTERED
                 -------------------                         -----------------------------------------
<S>                                                    <C>
                         None                                                   None
</Table>

          SECURITIES REGISTERED PURSUANT TO SECTION 12(g) OF THE ACT:

                     COMMON STOCK, PAR VALUE $.01 PER SHARE
                                (Title of class)

     Indicate by check mark if the registrant is a well-known seasoned issuer,
as defined in Rule 405 of the Securities Act.  [ ] Yes     [X] No

     Indicate by check mark if the registrant is not required to file reports
pursuant to Section 13 or Section 15(d) of the Act.  [ ] Yes     [X] No

     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 12 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 90 days.  [X] Yes      [ ] No

     Indicate by check mark if disclosure of delinquent filers pursuant to Item
405 of Regulation S-K is not contained herein, and will not be contained, to the
best of registrant's knowledge, in definitive proxy or information statements
incorporated by reference in Part III of this Form 10-K or any amendment to this
Form 10-K.  [X]

     Indicate by check mark whether the registrant is a large accelerated filer,
an accelerated filer, or a non-accelerated filer. See definition of "accelerated
filer and large accelerated filer" in Rule 12b-2 of the Act. (Check one):
   Large accelerated filer [ ]     Accelerated filer [ ]     Non-accelerated
                                   filer [X]

     Indicate by check mark whether the registrant is a shell company (as
defined in Rule 12b-2 of the Act).  [ ] Yes     [X] No

     The aggregate market value of the shares of the registrant's voting and
non-voting common stock held by non-affiliates of the registrant as of June 30,
2005, was $35,763,000 (based upon $1,300 per share being the average of the
closing bid and asked price on June 30, 2005, as reported in the Pink Sheets).

     As of March 10, 2006, 88,813 shares of voting common stock, par value $.01
per share, and 46,138 shares of non-voting Class N common stock, par value $.01
per share, were outstanding.

                      DOCUMENTS INCORPORATED BY REFERENCE

     Portions of the definitive proxy statement to be used by the registrant in
connection with its 2006 Annual Meeting of Stockholders are incorporated by
reference into Part III of this Form 10-K.
--------------------------------------------------------------------------------
--------------------------------------------------------------------------------
<PAGE>

                          CROWLEY MARITIME CORPORATION

                                   FORM 10-K
                      FOR THE YEAR ENDED DECEMBER 31, 2005

                               TABLE OF CONTENTS

<Table>
<Caption>
                                                                        PAGE
                                                                        ----
<S>       <C>                                                           <C>
                                   PART I
Item 1.
          Business....................................................    2
          Executive Officers of the Registrant........................   15
Item 1A.
          Risk Factors................................................   15
Item 1B.
          Unresolved Staff Comments...................................   20
Item 2.
          Properties..................................................   20
Item 3.
          Legal Proceedings...........................................   21
Item 4.
          Submission of Matters to a Vote of Security Holders.........   23

                                  PART II
Item 5.
          Market for Registrant's Common Equity, Related Stockholder
          Matters and Issuer Purchases of Equity Securities...........   23
Item 6.
          Selected Financial Data.....................................   24
Item 7.
          Management's Discussion and Analysis of Financial Condition
          and Results of Operations...................................   26
Item 7A.
          Quantitative and Qualitative Disclosures About Market
          Risk........................................................   45
Item 8.
          Financial Statements and Supplementary Data.................   47
Item 9.
          Changes in and Disagreements With Accountants on Accounting
          and Financial Disclosure....................................   84
Item 9A.
          Controls and Procedures.....................................   84
Item 9B.
          Other Information...........................................   84

                                  PART III
Item 10.
          Directors and Executive Officers of the Registrant..........   84
Item 11.
          Executive Compensation......................................   85
Item 12.
          Security Ownership of Certain Beneficial Owners and
          Management and Related Stockholder Matters..................   85
Item 13.
          Certain Relationships and Related Transactions..............   85
Item 14.
          Principal Accounting Fees and Services......................   85

                                  PART IV
Item 15.
          Exhibits, Financial Statement Schedules.....................   85
SIGNATURES............................................................   90
EXHIBIT INDEX.........................................................   92
</Table>

                                        i
<PAGE>

     Certain statements in this Form 10-K and its Exhibits ("Form 10-K")
constitute "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. The words or phrases "can be," "expects," "may affect,"
"anticipates," "may depend," "believes," "estimates," "plans," "projects" and
similar words and phrases are intended to identify such forward-looking
statements. These forward-looking statements, which reflect our expectations
based on currently available information, are subject to various known and
unknown risks and uncertainties and Crowley Maritime Corporation (the "Company")
cautions that any forward-looking information provided by or on behalf of the
Company is not a guarantee of future results, performance or achievements.
Actual results could differ materially from those anticipated in these
forward-looking statements due to a number of factors, some of which are beyond
the Company's control.

     In addition to those risks discussed under "Item 1A. Risk Factors" and in
the Company's other filings with the Securities and Exchange Commission (the
"SEC"), press releases and public statements by the Company's management,
factors that may cause the Company's actual results, performance or achievements
to differ materially from any future results, performance or achievements
expressed or implied in such forward-looking statements include:

     - changes in worldwide demand for chemicals, petroleum products and other
       cargo shipped by the Company's customers;

     - the cyclical nature of the shipping markets in which the Company's Liner
       Services segment operates;

     - changes in domestic and foreign economic, political, military and market
       conditions;

     - the effect of, and the costs of complying with, federal, state and
       foreign laws and regulations;

     - the impact on the Company's business and financial condition of recent
       and future: (a) acquisitions by the Company; and (b) joint ventures to
       which the Company is or may become a party;

     - fluctuations in fuel prices and the Company's ability to pass on
       increases in fuel costs to its customers;

     - the Company's ongoing need to be timely in replacing or rebuilding
       certain of its tankers and barges currently used to carry petroleum
       products in its Petroleum Services and carry equipment (such as
       containers, trailers and chassis) in its Liner Services;

     - competition for the Company's services in the various markets in which it
       operates;

     - risks affecting the Company's ability to operate its vessels or carry out
       scheduled voyages, such as catastrophic marine disaster, adverse weather
       and sea conditions, and oil, chemical and other hazardous substance
       spills;

     - the effect of pending asbestos or other toxic tort related litigation and
       related investigations and proceedings;

     - the state of relations between the Company and its unionized work force
       as well as the effects of possible strikes or other related job actions;
       and

     - risks associated with the Company's foreign operations.

All such forward-looking statements are current only as of the date on which
such statements were made.

     The Company does not undertake any obligation to update any forward-looking
statement to reflect events or circumstances after the date on which any such
statement is made or to reflect the occurrence of unanticipated events.

     Readers should carefully review this Form 10-K in its entirety, including,
but not limited to, Crowley Maritime Corporation's consolidated financial
statements and the notes thereto.

                                        1
<PAGE>

                                     PART I

ITEM 1.  BUSINESS.

     Unless otherwise noted, references to "the Company", "we", "our" or "us"
means Crowley Maritime Corporation, a Delaware corporation, and its
subsidiaries. Our principal executive offices are located at 155 Grand Avenue,
Oakland, California 94612, and our telephone number is (510) 251-7500. The
Company's web site is http://www.crowley.com. Information contained on the
Company's web site is not a part of this Form 10-K.

COMPANY OVERVIEW

     We provide diversified transportation services in domestic and
international markets. We also provide fuel transportation and distribution
services domestically. Our primary operations are located in the continental
United States, Alaska, Puerto Rico, Mexico, Central America, the Caribbean
Islands, Russia, and other international markets. Effective July 1, 2005, the
Company implemented a corporate reorganization. As a result of this
reorganization, the Company reevaluated its operating segments and reporting
segments and retroactively changed them to be aligned with the Company's new
structure. The Company now has four reporting segments: Liner Services;
Logistics Services; Marine Services; and Petroleum Services.

     - Liner Services provides ocean transportation services between designated
       ports, as well as a broad range of cargo transportation services
       including the carriage of containers, trailers, vehicles and oversized
       cargo.

     - Logistics Services provides freight forwarding, ocean transportation
       services, airfreight services, warehousing and distribution services,
       customs clearance, trucking and other logistics optimization activities
       intended to create efficiencies in the carriage of goods for third
       parties.

     - Marine Services provides ship assist and escort services (including ship
       assist, tanker escort, docking and related services, fire fighting,
       emergency towing and oil spill response) and specialized services on a
       worldwide basis to companies engaged in the exploration, production and
       distribution of oil and gas. In addition, Marine Services also provides
       worldwide marine salvage and marine wreck removal services as well as
       vessel management services to third parties.

     - Petroleum Services transports crude oil, petroleum products and chemicals
       among ports on the east and west coasts of the United States, Alaska, and
       the Gulf of Mexico. Petroleum Services also operates a refined petroleum
       products distribution business in Alaska which utilizes, among other
       things, owned or leased tank farms, fuel distribution centers, gas
       stations and retail delivery. Petroleum Services also provides vessel
       management services to third parties.

     The Company supports all four of its segments by providing corporate
services, supervising construction of new vessels and owning vessels which are
chartered for use in our Liner Services, Marine Services and Petroleum Services
segments. The Company arranges most of the insurance required for its operations
through its captive insurance company.

     The Company employs approximately 4,300 people and provides its services
using a fleet of more than 280 vessels, consisting of RO/RO (roll on roll off)
vessels, LO/LO (lift on lift off) vessels, tankers, tugs and barges. Our
land-based facilities and equipment include terminals and container yards,
warehouses, tank farms, office buildings, gas stations, trucks, trailers,
containers, chassis and other specialized vehicles.

     The grandfather of our current President, Mr. Thomas B. Crowley, Jr., began
our business in the San Francisco Bay in 1892. The business was incorporated in
the State of Delaware as "Crowley Maritime Corporation" on December 1, 1972. The
present structure, in which the Company is a holding company for our lines of
businesses, was put in place in 1992.

     The Company is predominantly owned by certain members of the Crowley family
and Company employees and its shares do not trade on any national securities
exchange or in any established trading market.

                                        2
<PAGE>

See "Item 5. Market for Registrant's Common Equity, Related Stockholder Matters
and Issuer Purchases of Equity Securities" and "Item 1A. Risk Factors."

     The following table lists the Company's owned, chartered and managed
vessels as of December 31, 2005:

<Table>
<Caption>
                                                                 NUMBER
CLASS OF VESSEL                                                OF VESSELS
---------------                                                ----------
<S>                                                            <C>
OWNED VESSELS
  Tank Ships................................................        2
  580' Barges...............................................        4
  730' Barges...............................................        5
  Integrated Tug/Barge units................................        2
  Articulated Tug/Barge units...............................        4
  Offshore Tugs.............................................       54
  Tractor Tugs..............................................       15
  River Tugs................................................       28
  1,000-5,999 DWT Barges....................................       46
  6,000-20,000 DWT Barges...................................       27
  Miscellaneous Barges......................................        3
                                                                  ---
                                                                  190
CHARTERED VESSELS
  Oil Spill Recovery........................................       56
  LO/LO Ships...............................................        6
  RO/RO Ships...............................................       10
  Miscellaneous Barges......................................        1
                                                                  ---
                                                                   73
MANAGED VESSELS.............................................       23
                                                                  ---
TOTAL VESSELS...............................................      286
                                                                  ===
</Table>

     From time to time, the Company may transfer vessels between the Company's
segments to meet changing business needs. Specifically, the Marine Services and
Petroleum Services use tugs and barges for their operations which, depending
upon market conditions, may be shifted and redeployed by the Company among
different geographical locations. It is the Company's practice to regularly
monitor the demands for the services of each of these segments and to transfer
tugs and barges among them based upon prevailing market conditions.

     For additional information about the Company's segments, see "Item 1.
Business -- Liner Services", "Item 1. Business -- Logistics Services", "Item 1.
Business -- Marine Services", and "Item 1. Business -- Petroleum Services"
below. For segment financial information concerning our revenues, operating
income and long-lived assets, see "Item 7. Management's Discussion and Analysis
of Financial Condition and Results of Operations" and Note 23 of the Notes to
Consolidated Financial Statements in "Item 8. Financial Statements and
Supplementary Data".

LINER SERVICES

     Liner Services provides scheduled marine transportation services between
designated ports for the carriage of cargo, including containers, trailers,
vehicles and oversized cargo. At December 31, 2005, Liner Services provided
service to the territory of Puerto Rico and approximately 19 countries in the
Caribbean and Central America with 37 ocean going ships, tugs and barges capable
of carrying approximately 12,800 twenty foot equivalent units ("TEUs"). Liner
Services owns or leases approximately 45,000 pieces of intermodal equipment
which includes containers, trailers and chassis.

                                        3
<PAGE>

                 THE PUERTO RICO AND CARIBBEAN ISLANDS SERVICE

     Our Puerto Rico and Caribbean Islands service provides scheduled liner
services between:

     - ports in the United States North Atlantic and ports in Puerto Rico; and

     - ports in the United States South Atlantic and ports in Puerto Rico, U.S.
       Virgin Islands, certain Caribbean Islands and the Bahamas.

     The Puerto Rico service uses 9 triple-deck RO/RO barges. 5 of these barges
are 730 feet in length, with an average capacity of 924 TEUs. The remaining 4
barges are 580 feet in length with an average capacity of 617 TEUs. The 9 barges
are towed by a fleet of 10 offshore tugs owned by us. This service also uses 2
barges which serve as additional dock space. Departures are normally scheduled
three or four times a week from Jacksonville, Florida and once a week from
Pennsauken, New Jersey.

     The Caribbean Islands service calls on two ports in the Virgin Islands and
three other ports in the Caribbean with 2 time chartered LO/LO vessels. The
average capacity of these vessels is 530 TEUs. Departures are scheduled from
Jacksonville and Port Everglades, Florida once a week. This service also
provides service to various other ports through connecting carriers.

     The Bahamas service uses 1 time chartered LO/LO vessel offering a capacity
of approximately 408 TEUs each week. This service has two scheduled departures a
week from Jacksonville and Port Everglades, Florida to Nassau, Bahamas.

     While the time charters for the vessels used in the services described
above expire in 2006, vessels of this type chartered by the Company have been
readily available and we do not believe that it will be difficult to charter new
vessels or renew the existing charters.

                           THE LATIN AMERICA SERVICE

     Our Latin America Service provides scheduled liner services between:

     - ports in the United States South Atlantic and ports in the Northern Zone
       of Central America, the Southern Zone of Central America, the Dominican
       Republic, Haiti, and Cuba; and

     - ports in the Gulf of Mexico and ports in the Northern Zone of Central
       America.

     The United States South Atlantic to the Northern Zone of Central America
service deploys 4 time chartered RO/RO vessels with an average capacity of 308
TEUs. This service has four weekly sailings between Port Everglades, Florida and
ports in Guatemala and Honduras with overland services to Nicaragua and El
Salvador.

     The United States South Atlantic to the Southern Zone of Central America
service deploys 3 time chartered RO/RO vessels with an average capacity of 360
TEUs that provides weekly service between Port Everglades, Florida and Costa
Rica, Panama and Guatemala.

     The United States South Atlantic to the Dominican Republic and Haiti
service deploys 2 time chartered LO/LO vessels with an average capacity of 307
TEUs. This service has one sailing a week between Port Everglades, Florida and
ports in the Dominican Republic and Haiti and one sailing a week between Port
Everglades, Florida and the Dominican Republic.

     The United States South Atlantic to Cuba service deploys 1 time chartered
LO/LO vessel with a capacity of 70 TEUs. The service has one sailing a week from
Jacksonville, Florida to Havana, Cuba.

     The Gulf of Mexico to the Northern Zone of Central America service deploys
3 time chartered RO/RO vessels, with an average capacity of 325 TEUs. This
service has three weekly sailings from Gulfport, Mississippi to Honduras and
Guatemala with overland services to Nicaragua and El Salvador.

                                        4
<PAGE>

     While the time charters for the vessels used in the services described
above expire between 2006 and 2008, vessels of this type chartered by the
Company have been readily available and we do not believe that it will be
difficult to charter new vessels or renew the existing charters.

     At December 31, 2005, Liner Services owned or leased, on a long-term basis,
marine terminals and container yards in the locations listed in the table below.
In those ports where the Company does not own or lease terminals or container
yards it utilizes common use terminals.

                      MARINE TERMINALS AND CONTAINER YARDS

<Table>
<Caption>
LOCATION                                                      ACRES
--------                                                      -----
<S>                                                           <C>
Jacksonville, Florida.......................................  89.0
San Juan, Puerto Rico.......................................  79.0
Port Everglades, Florida....................................  68.5
Pennsauken, New Jersey......................................  59.0
Panama City, Panama.........................................   9.6
San Pedro Sula, Honduras....................................   7.9
Limon, Costa Rica...........................................   7.0
Guatemala City, Guatemala...................................   6.8
St. Thomas, Virgin Islands..................................   5.0
Tegucigalpa, Honduras.......................................   4.4
San Salvador, El Salvador...................................   3.6
Puerto Cortez, Honduras.....................................   3.6
Soyapango, El Salvador......................................   3.1
Heredia, Costa Rica.........................................   2.8
Santo Tomas, Guatemala......................................   1.4
</Table>

LOGISTICS SERVICES

     Logistics Services performs transportation management and special cargo
handling services through its offices in the United States, Panama, Costa Rica,
Honduras, Guatemala, El Salvador and throughout the world with its network of
agents. These services include:

     - freight forwarding, ocean transportation and airfreight to points
       throughout the world;

     - warehousing and distribution services, customs clearance and trucking
       within the United States and Central America; and

     - full package activities intended to create efficiencies in the carriage
       of goods.

     Logistics Services leases warehouse and distribution space in several
locations in Central America and the United States, as listed in the table
below.

                        WAREHOUSE AND DISTRIBUTION SPACE

<Table>
<Caption>
LOCATION                                                      SQUARE FEET
--------                                                      -----------
<S>                                                           <C>
Miami, Florida..............................................    147,850
Guatemala City, Guatemala...................................     73,930
Jacksonville, Florida.......................................     52,000
Las Cumbres, Panama.........................................     32,293
Export Salva, El Salvador...................................     24,582
Buena Vista, Honduras.......................................     20,659
Mixco, Guatemala............................................     12,917
</Table>

                                        5
<PAGE>

MARINE SERVICES

     Marine Services provides a wide array of services on a worldwide basis.
Marine Services maintains a fleet of 163 vessels over a large geographic area in
order to respond quickly to a variety of situations. Included in its fleet are:
(a) 55 tugs ranging in length from 85 feet to 150 feet with between 470 and
10,192 brake horsepower; (b) 88 barges varying in size, capacity and capability,
including flat deck barges designed for the carriage of heavy loads; and (c) 3
crewboats. The flat deck barges are unmanned and require the use of our tugs to
be moved between job locations. Marine Services occupies approximately 15 acres
of shore side terminals located in Seattle, Washington. It also provides vessel
management services for 17 vessels belonging to third parties, including 5
container vessels owned by commercial companies and 12 vessels owned by the
United States government.

     Marine Services provides specialized services to companies engaged, on a
worldwide basis, in the exploration, production and distribution of oil and gas.
Areas of operation extend from Prudhoe Bay, Alaska to Pedernales, Venezuela and
west to the Russian Far East. These services are provided through specialized
marine transportation projects utilizing assets either owned or chartered by the
Company.

     In addition, Marine Services offers turnkey project management for major
infrastructure projects and logistics and inventory control services for the oil
and gas industry. Past projects range from the delivery of oversized modules for
oil and gas exploration and production in Africa, Asia and the Americas in 2005
to sea lifting supplies to Alaska for the Trans-Alaska oil pipeline in 2004.

     On October 1, 2005, the Company acquired Titan Maritime LLC and certain
assets of Titan Maritime Industries Inc., Karlissa Associates and Marine
Equipment Corp. (collectively "Titan"), a worldwide marine salvage and marine
wreck removal business for a purchase price of $17.7 million, net of cash
acquired. The acquisition of Titan expands the Company's marine salvage and
marine wreck removal business domestically and into international markets. For
further information, see Note 2 of the Notes to Consolidated Financial
Statements in "Item 8. Financial Statements and Supplementary Data." A portion
of Titan's marine salvage and wreck removal business is conducted under a
Lloyd's Standard Form of Salvage Agreement ("LOF") on a no cure, no pay basis.
The time period to settle these contracts, once the salvage or wreck has been
cured, can take between six months and two years. For additional information see
the Salvage Revenue Recognition critical accounting policy in "Item 7.
Management's Discussion and Analysis of Financial Condition and Results of
Operations."

     Marine Services also provides ship assist, tanker escort, docking and
related services in Oakland, San Diego, Los Angeles and Long Beach, California,
Puget Sound, Washington and Valdez, Alaska. In addition to providing ship assist
and escort services, the tugs and barges based in Valdez, Alaska are also
capable of providing fire fighting and oil spill response services and are
predominantly used for these services. The tugs operating in Oakland, San Diego,
Los Angeles and Long Beach, California and Puget Sound, Washington primarily
provide assistance to large tankers and container vessels as they enter and
depart from west coast harbors. The tugs used for ship assist and escort
services generally employ three to six crew members and are available 24 hours a
day, seven days a week to respond to calls for their services.

     We currently provide various marine services to the Alyeska Pipeline
Service Company ("Alyeska") pursuant to a long-term Master Time Charter as
Amended and Restated on January 1, 1999 (the "Master Time Charter") and other
related agreements. Alyeska is agent for the owners of the Trans-Alaska
Pipeline. Our relationship with Alyeska began in the early 1970s during
construction of the Trans-Alaska Pipeline and we have had formal agreements with
Alyeska since approximately 1991. Under the Master Time Charter, Alyeska may,
pursuant to individual charter orders which set forth the specific terms and
conditions of each time charter, time charter from us vessels either owned by us
or chartered from third parties, as required to provide tanker escort and
docking services, emergency response in the event of an actual or potential
pollution incident, firefighting and other related services needed by those oil
companies which transport crude oil by tanker from Alaska to the continental
United States. We operate each of the vessels chartered to Alyeska. Under our
agreements with Alyeska, we also provide certain oil companies with various
shore-side services. As of December 31, 2005, 17 vessels owned by us, consisting
of 10 tugs, 2 line boats and 5 barges, are under time charter to Alyeska. The
tugs currently chartered to Alyeska are also capable of providing fire fighting
and oil spill response services.

                                        6
<PAGE>

     We currently bareboat charter from Prince William Sound Corporation 8
vessels and 48 mini-barges, which are time chartered by us to Alyeska for oil
spill, oil recovery and emergency response services. A number of these vessels
are on standby throughout Prince William Sound solely for emergency response to
oil spills. Unlike the vessels that we own, the vessels owned by Prince William
Sound Corporation may only be used by Alyeska, unless authorized by Alyeska for
third-party use.

     Our tugs, line boats and barges chartered to Alyeska are capable of
performing similar services for other companies in other locations and, in the
event that Alyeska decided that it did not require some or all of these vessels
for its operations in Alaska, the Company believes that it could redeploy the
vessels not required by Alyeska to other locations.

     Marine Services also provides vessel management services to third parties
with vessels that operate throughout the world.

PETROLEUM SERVICES

     The oil, chemical and petrochemical industries based in the United States
require various forms of transportation to supply them with the raw materials
required for their plants and to distribute their finished products. While
companies engaged in these industries deploy numerous forms of transportation,
including trucks, railroads and pipelines, certain distribution patterns and
requirements make the use of ocean going vessels the most efficient means of
transportation. The ocean going vessels used by Petroleum Services consist of
tugs, barges (including articulated and integrated tug/barges) and tankers. In
each case, the vessels are made of steel and contain a series of tanks, valves,
pumps, generators and other equipment required for the carriage of liquid
cargoes. All of our barges (including articulated and integrated tug/barges) and
tankers are equipped with pumps which are capable of discharging the cargoes
which have been loaded by shore based facilities.

     While our towed barges contain the power generation systems necessary to
operate both the pumps required to discharge cargo and other equipment, they
have no means of self propulsion and depend upon our tugs to be moved between
ports. Although there are no accommodation spaces on our barges and they are not
manned while being towed between ports, our ocean going tugs used to tow these
barges are equipped with living quarters and typically employ a crew of seven.
As a general rule, and depending upon the horsepower of the tug which is being
used for the tow, our barges typically maintain sea speeds of between 7 and 12
knots.

     Petroleum Services operates numerous vessels used for the carriage of crude
oil, petroleum products and chemicals including: (a) 4 articulated tug/barge
units with capacities of up to approximately 19,650 long tons; (b) 2 integrated
tug/barge units with capacities of up to approximately 46,000 long tons; (c) 2
tankers; and (d) 43 petroleum barges with capacities of up to 16,550 long tons
which are primarily towed by 29 tugs owned by us. The tankers, barges and other
specially designed vessels carry crude oil, petroleum products and chemicals:
(a) among refineries and storage terminals on the East Coast and West Coast of
the United States, the Gulf of Mexico and Alaska; and (b) among ports in Puerto
Rico and the Gulf of Mexico. In addition, Petroleum Services provides vessel
management services for 6 ready-reserve vessels owned by the United States
government.

     Petroleum Services uses 4 articulated tug/barge units. Unlike our oil
barges which are towed by steel cables connected to tugs, our articulated
tug/barge units are powered by specially designed tug boats which, through
mechanical connections utilize two large cylindrical pins to connect to special
fittings located in notches at the rear of their respective barges. Although the
connection between these specially designed tugs and barges is not permanent and
the tugs may operate independently of their barges, once the connection has been
made, the tug and barge operate as a single unified vessel. Our articulated
tug/barge units employ a crew of eight and are capable of operating at speeds of
up to 12 knots and carrying 155,000 barrels of refined products. We are
currently constructing 6 new articulated tug/barge units which will be capable
of carrying 185,000 barrels of refined product. These new units will utilize a
design similar to the design used for the 4 units discussed above.

     Our 2 integrated tug/barge units are powered by diesel engines and are
capable of propelling themselves at speeds of up to 14 knots. Our 2 tankers are
powered by steam turbine propulsion systems and are capable of propelling
themselves at speeds of up to approximately 15 knots. Our tankers and integrated
tug/barge units

                                        7
<PAGE>

are equipped with living quarters for their crew members. Our tankers typically
employ a crew of approximately 28. Our integrated tug/barge units typically
employ a crew of approximately 18. Our tankers and integrated tug/barge units
used for the carriage of petroleum products are capable of carrying up to eleven
types of cargo simultaneously.

     Petroleum Services also owns and/or operates tank farms in Alaska. A number
of our oil barges are used to carry petroleum products purchased for our account
to and among various Alaskan ports. Many of these barges also carry, together
with the product owned by us, product owned by third parties. The fuel which is
purchased by us and carried aboard our barges is sold directly from our vessels
and tank farms to customers in Alaska who are the ultimate consumers.

     On September 6, 2005, the Company acquired all of the stock of Service Oil
and Gas, Inc. and certain assets and liabilities of Yukon Fuel Company,
Northland Vessel Leasing Company LLC, and Yutana Barge Lines (collectively
"Northland Fuel") for a purchase price of $91.6 million, net of cash acquired.
Northland Fuel operates a refined products distribution business in Alaska. The
acquisition of Northland Fuel complements the Company's existing business
engaged in the transportation, distribution and sale of fuel in Alaska. For
further information, see Note 2 of the Notes to Consolidated Financial
Statements in "Item 8. Financial Statements and Supplementary Data."

     At December 31, 2005, Petroleum Services owned or operated tank farms in
the locations listed in the table below.

                               ALASKA TANK FARMS

<Table>
<Caption>
LOCATION                                                      STORAGE CAPACITY
--------                                                      ----------------
                                                                (IN BARRELS)
<S>                                                           <C>
Bethel......................................................      370,054
Kotzebue....................................................      155,000
Nome........................................................      115,000
Captain's Bay...............................................       60,000
St. Michael.................................................       35,976
Galena......................................................       28,114
Nenana......................................................       26,483
Fort Yukon..................................................       17,575
Aniak.......................................................       15,460
St. Mary's..................................................       12,314
Hooper Bay..................................................       12,285
McGrath.....................................................        8,988
Iliamna.....................................................        6,148
Glennallen..................................................        4,667
Delta Junction..............................................        2,810
Valdez......................................................        2,619
Parks Highway...............................................        2,286
Palmer......................................................        1,857
Talkeetna...................................................        1,786
Kenai.......................................................          857
Fairbanks...................................................          714
Anchorage...................................................          429
</Table>

     In addition, Petroleum Services operates retail gas stations in Alaska with
a combined capacity of approximately 2,600 barrels of fuel.

     In November 2005, Petroleum Services sold a vessel that represented a
component of the Company, as defined in Statement of Financial Accounting
Standards ("SFAS") No. 144, Accounting for the Impairment or Disposal of
Long-Lived Assets. Accordingly, the results of operations of this vessel have
been classified as discontinued operations in the Consolidated Financial
Statements. For further information, see Note 4 of the Notes to Consolidated
Financial Statements in "Item 8. Financial Statements and Supplementary Data."

                                        8
<PAGE>

     On January 1, 2006, the Company acquired all of the stock of Columbus
Distributing, Inc. and EV-JO, Inc. (collectively "CDI"), a fuel distribution
business in Alaska, for $5.1 million cash. The acquisition of CDI further
expands the Company's Alaskan fuel distribution business. The operation of CDI
will be included in the Company's Consolidated Statement of Operations, within
the Petroleum Services segment, commencing January 1, 2006.

CORPORATE SERVICES

     Corporate services include supervising the construction of new vessels,
providing engineering services internally, owning vessels which are chartered by
our operating lines of business and providing insurance coverage. The Company's
risk management and insurance program is structured to allow it to self-insure a
variety of predictable claims based on historical loss/claim experience and to
insure more significant claims through Beacon Insurance Company Ltd., which is a
wholly owned captive insurance subsidiary. Beacon Insurance Company Ltd. retains
a layer of risk/losses and purchases reinsurance in the international insurance
markets to cover catastrophic casualties and a multiple of major claims. In
addition, the program is structured to ensure compliance with federal, state and
local insurance regulations. Corporate services also provides accounting, legal,
human resources, information technology and purchasing support.

SEASONALITY

     Revenues generated by our Puerto Rico and the Caribbean Islands Liner
Services and Logistics Services have historically increased during the latter
part of the third quarter and the early part of the fourth quarter of each year
in anticipation of increased holiday sales by our customers, and have declined
during the first quarter of each year. Revenues generated by our Latin America
Liner Services are generally not affected by seasonal factors.

     The carriage of chemicals and petroleum products by the vessels used by
Petroleum Services usually experiences a slight downturn during the summer
months because of customer inventory adjustments and refinery shutdowns. The
revenues of the transportation and distribution activities of Petroleum Services
historically increase during the second and third quarters of each year and
decline during the first and fourth quarters. It is our practice to redeploy
those barges which cannot be used in Alaska during the first and fourth quarters
of each year to other areas in which operations are not restricted by weather
conditions.

     While the activities and related revenues of Marine Services conducted in
Alaska and Russia tend to increase during the second and third quarters of each
year and decline during the first and fourth quarters, most of the other
services provided by Marine Services are generally not affected by seasonal
factors.

     For quarterly financial information concerning our revenues, operating
income, net income and earnings per share, see Note 24 of the Notes to
Consolidated Financial Statements in "Item 8. Financial Statements and
Supplementary Data."

CUSTOMERS

     Many of our services are provided in response to discrete customer requests
for short-term services. For this reason, customers that account for a
significant portion of revenues in one fiscal year may represent an immaterial
portion of revenues in subsequent years. In general, the Company does not depend
upon a single customer or a small group of customers, the loss of which would
have a material adverse effect on its consolidated financial condition, results
of operations, or cash flows.

     While Marine Services derives a material amount of its revenues from a
group of contracts with Alyeska, these revenues are not a material source of
revenue for the Company. In the event that Alyeska decided not to renew a
substantial number of these contracts and the Company was not able to
successfully redeploy the vessels used for these contracts to other locations,
the decision by Alyeska could have a material adverse effect on the operating
results of Marine Services.

     No material portion of the Company's business is subject to renegotiation
of profits by the United States government or termination of contracts or
subcontracts at the election of the United States government.

                                        9
<PAGE>

COMPETITION

     The competition faced by our segments is intense. The principal methods of
competition in the Company's business are service, price, experience, reputation
and quality of equipment. The Company believes that its pricing is competitive
and that the quality of its services, experience and equipment is among the
highest in the industry. A number of our competitors have financial resources
and operating staffs substantially larger than those of the Company and, from
time to time, may use those resources either to lower rates or acquire equipment
which, in either case, may provide a competitive advantage over the Company. See
"Item 1A. Risk Factors."

     Each of our segments participates from time to time in markets in which
there are more vessels than the market can support at a profitable level. While
we try to shift our tugs, barges, tankers and other vessels away from markets in
which there is a surplus of capacity to markets in which the supply of and
demand for vessels is more balanced, our competitors tend to engage in similar
practices. Over time, these practices by our competitors may undermine the
effectiveness of our efforts to deploy our vessels to more balanced markets.

                                 LINER SERVICES

     The services offered by Liner Services between the United States and Puerto
Rico and the Caribbean Islands currently compete with three principal carriers:
Horizon Lines, Trailer Bridge and Sea Star Line, LLC. The services offered by
Liner Services between the United States and Latin America currently compete
with three principal carriers: Maersk/Sealand, Seaboard and American President
Line. We believe our share of these markets in 2005 was substantial.

                               LOGISTICS SERVICES

     The U.S. logistics market is a highly competitive market with many public
and privately held companies competing with us domestically and internationally.
Major competitors for providing transportation management and special cargo
handling services include: Maersk Logistics, APL Logistics, Econocaribe,
Seaboard Solutions and Tropical Shipping.

                                MARINE SERVICES

     Our principal competitor for providing ship assist, tanker escort, docking
and related services on the West Coast of the United States is Foss Maritime.
Numerous other public or privately held companies are also a source of
competition, including Starlight Marine Services and Millennium Towing Company.
We believe that our share in markets on the West Coast of the United States in
2005 was substantial.

     Our principal United States based competitors for providing tug and barge
towing and project services: (a) in the Gulf of Mexico are Tidewater, Edison
Chouest, Delta Towing, Dolphin Towing, Harvey Gulf Marine, McDonough Marine
Service, Otto Candies Marine Transportation and Towing and Smith Maritime; and
(b) on the West Coast are Foss, Seacoast, Sause Brothers, Brusco and Dunlap
Towing. West Coast transportation companies such as Lynden and Northland
Services compete with us for general cargo moves and, to a lesser extent, for
general towing and emergency services. Among our principal foreign competitors
are Seacor Smit, Seaspan and Seaspan Cyprus, Ltd., Anchor Marine Transport of
Great Britain, ITC Towing of the Netherlands and Fairplay Towing. Competitors
also include segments of the heavy lift shipping industry such as Dockwise and
Blue Marlin. Further competition, primarily for government contracts, comes from
qualified small businesses. In the salvage/emergency services business, our
principal competitors on a global basis include Smit and Wijsmuller.

                               PETROLEUM SERVICES

     We are a major carrier of petroleum products in the U.S. Jones Act trades
and utilize tank vessels, tankers, towed barges, integrated tug-barge units and
articulated tug-barge units for this purpose. Major

                                        10
<PAGE>

competitors include Seabulk International, Sause Brothers, Moran Towing Corp.,
Bouchard Transportation Co., Penn Maritime Inc., Hornbeck Offshore Services,
Allied Towing Corp., American Heavylift Shipping Co., United States Shipping
Partners L.P., Maritrans Inc., Keystone Shipping Co. and K-Sea Transportation
Partners L.P. The major competitors in the Alaska petroleum transportation and
distribution market are Delta Western, Sirius Marine, Northern Transport and
some foreign tankers delivering products to the Aleutian terminals in Alaska.
Oil companies and independent owners that operate vessels and other modes of
petroleum transportation, including pipelines, also compete with our vessels for
cargoes.

GOVERNMENT REGULATION

     The operation of our vessels is subject to regulation under various federal
laws and international conventions, as interpreted and implemented by the United
States Coast Guard, as well as certain state and local laws.

     Our vessels are required to meet construction and repair standards
established by the American Bureau of Shipping, a private organization, and/or
the United States Coast Guard, and to meet operational, security and safety
standards presently established by the United States Coast Guard. The United
States Coast Guard licenses our seagoing supervisory personnel and certifies our
seamen and tankermen.

     Our United States marine operations are also subject to regulation by
various United States federal agencies or the successors of those agencies,
including the Surface Transportation Board (the successor federal agency to the
Interstate Commerce Commission), the Maritime Administration, the Customs
Service, the Federal Maritime Commission and the Coast Guard. These regulatory
authorities have broad powers over operational safety, tariff filings of freight
rates, service contracts, certain mergers, contraband, environmental
contamination, financial reporting and homeland, port and vessel security.

     Our common and contract motor carrier operations are regulated by the
United States Surface Transportation Board and various state agencies. The
Company's drivers, including owner-operators, also must comply with the safety
and fitness regulations promulgated by the United States Department of
Transportation, including certain regulations for drug and alcohol testing and
hours of service. The officers and unlicensed crew members employed aboard the
Company's vessels must also comply with numerous safety and fitness regulations
promulgated by the United States Coast Guard, including certain regulations for
drug testing and hours of service.

                                   JONES ACT

     Section 27 of the Merchant Marine Act of 1920, commonly called the Jones
Act, is a federal law that restricts maritime transportation between United
States ports to vessels built and documented in the United States and owned and
operated by United States citizens. Because we carry cargo between United States
ports, we are subject to the provisions of this law. Other cabotage laws require
all United States vessels to be manned by United States citizens.

     The United States Coast Guard and American Bureau of Shipping maintain the
most stringent process of vessel inspection in the world, which tends to result
in higher regulatory compliance costs for United States flag operators than for
owners of vessels registered under foreign flags.

     Our Liner Services, Marine Services and Petroleum Services operations,
which are conducted between United States ports including Puerto Rico, are
protected from foreign competition by the Jones Act. While there have been
unsuccessful attempts in the past to broaden access to the Jones Act trade and
to modify, limit or abolish the Jones Act, we believe it is unlikely that the
Jones Act will be rescinded or materially modified in the foreseeable future.
Nonetheless, there can be no assurance that the Jones Act will not be modified
or rescinded.

                                        11
<PAGE>

                            ENVIRONMENTAL REGULATION

     All of the Company's operations are subject to various federal, state and
local environmental laws and regulations implemented principally by the
Environmental Protection Agency, the United States Department of Transportation,
the United States Coast Guard and state environmental regulatory agencies. These
regulations govern the management of hazardous wastes, discharge of pollutants
into the air, surface and underground waters, including rivers, harbors and the
200-mile exclusive economic zone of the United States, and the disposal of
certain substances.

     We are currently involved in the remediation of twelve properties and have
estimated that approximately $3.9 million will be spent over the next ten years
on these projects. For further information on environmental liabilities, see the
critical accounting policies in "Item 7. Management's Discussion and Analysis of
Financial Condition and Results of Operations" and Notes 1 and 20 of the Notes
to Consolidated Financial Statements in "Item 8. Financial Statements and
Supplementary Data." The contamination at these properties is the result of
historic operations. We believe that our operations are in material compliance
with current environmental laws and regulations. We are currently working with
different state and federal agencies through agreed upon orders, decrees or
voluntary actions on the remediation of the impacted properties mentioned above.
We are not subject to, or aware of, any material pending any threatened
litigation or other judicial, administrative or arbitration proceedings against
us occasioned by any alleged non-compliance with such laws or regulations. The
risks of substantial costs, liabilities and penalties for federal, state or
local environmental non-compliance or alleged non-compliance are, however,
inherent in marine operations, and there can be no assurance that significant
costs, liabilities or penalties will not be incurred by or imposed on us in the
future.

                           OIL POLLUTION ACT OF 1990

     The Oil Pollution Act of 1990 ("OPA 90") established an extensive
regulatory and liability regime intended to protect the environment from oil
spills. OPA 90 applies to owners and operators of facilities operating near
navigable waters and owners, operators and bareboat charterers of vessels
operating in United States waters, which include the navigable waters of the
United States and the 200-mile exclusive economic zone of the United States.
Although it applies in general to all vessels, for purposes of establishing
liability limits, financial responsibility and response planning requirements,
OPA 90 distinguishes tank vessels (which include our petroleum product tankers,
integrated tug/barge units, articulated tug/barge units and our oil barges) from
"other vessels" (which include our tugs and the RO/RO and LO/LO vessels used by
Liner Services). As a result of certain oil spills by other shipping companies
which received international publicity, our single hulled tankers and barges are
subject to heightened scrutiny by our customers and various regulatory bodies.

     Under OPA 90, owners and operators of facilities and owners, operators and
bareboat charterers of vessels are "responsible parties" and are jointly,
severally and strictly liable for removal costs and damages arising from oil
spills relating to their facilities and vessels, unless the spill results solely
from the act or omission of a third party, an act of God or an act of war.
Damages are defined broadly to include:

     - natural resources damages and the costs of assessment thereof;

     - damages for injury to, or economic losses resulting from the destruction
       of, real and personal property;

     - the net loss of taxes, royalties, rents, fees and profits by the United
       States government, and any state or political subdivision thereof;

     - lost profits or impairment of earning capacity due to property or natural
       resources damage;

     - the net costs of providing increased or additional public services
       necessitated by a spill response, such as protection from fire, safety or
       other hazards; and

     - the loss of subsistence use of natural resources.

                                        12
<PAGE>

     For facilities, the statutory liability of responsible parties is limited
to $350 million. For tank vessels, the statutory liability of responsible
parties is limited to the greater of $1,200 per gross ton or $10 million ($2
million for a vessel of 3,000 gross tons or less) per vessel. For any "other
vessel" statutory liability is limited to the greater of $600 per gross ton or
$500,000 per vessel. However, such liability limits do not apply to an incident
proximately caused by violation of federal safety, construction or operating
regulations or by the responsible party's gross negligence or willful
misconduct, or if the responsible party fails to report the incident or provide
reasonable cooperation and assistance as required by a responsible official in
connection with oil removal activities. Although we currently maintain the
maximum available pollution liability insurance coverage that is available
through the International Group of P&I Clubs, a catastrophic spill could result
in liability in excess of available insurance coverage, as well as a material
adverse effect on our consolidated financial condition, results of operations or
cash flows.

     Under OPA 90, with certain limited exceptions, all newly built or converted
oil tankers operating in United States waters must be built with double hulls,
and existing single hull double-side or double-bottom vessels must be phased out
over time, unless retrofitted with double hulls. As a result of this phase-out
requirement, as interpreted by the United States Coast Guard, the Company has 1
vessel in 2006 and 2 vessels in 2010 that must stop carrying petroleum and
petroleum products if they are not retrofitted with double hulls. The impact on
the Company's financial condition, results of operations and cash flows would
not be materially adversely impacted if these vessels are not replaced when the
phase-out occurs. In addition, we own 34 other vessels which will need to be
retrofitted with double hulls by 2015 in order to continue to carry petroleum or
petroleum products in United States waters. While the Company has not completed
its study of what it would cost to make such vessels comply with OPA 90 or to
replace non-complying vessels with new or used complying vessels, we believe
that the cost of compliance or replacement would represent a material capital
expenditure.

     Included in the vessels discussed above are 27 barges that are not subject
to the double hull requirement of OPA 90 because they carry refined petroleum
products in or adjacent to waters of the Bering Sea, Chukcki Sea and the Arctic
Ocean and water tributaries thereto and the waters of the Aleutian Islands and
the Alaskan Peninsula west of 155 degrees west longitude.

     OPA 90 expanded pre-existing financial responsibility requirements and
requires vessel owners, operators and bareboat charterers to establish and
maintain with the United States Coast Guard evidence of insurance or
qualification as a self-insurer or other evidence of financial responsibility
sufficient to meet their potential liabilities under OPA 90. Coast Guard
regulations also implement the financial responsibility requirements of the
Comprehensive Environmental Response, Compensation and Liability Act of 1980,
which imposes liability for discharges of hazardous substances such as
chemicals, in an amount equal to $300 per gross ton, thus increasing the overall
amount of financial responsibility from $1,200 to $1,500 per gross ton. We have
obtained "Certificates of Financial Responsibility" pursuant to the Coast Guard
Regulations for our petroleum product and chemical carriers through
self-insurance and commercial insurance.

     OPA 90 also amended the federal Water Pollution Control Act to require the
owner or operator of certain facilities and tank vessels to prepare facility or
vessel response plans and to contract with oil spill removal organizations to
remove to the maximum extent practicable a worst-case discharge. We have
complied with these requirements.

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

                                    TITLE XI

     Title XI of the Merchant Marine Act of 1936 permits the Secretary of
Transportation, acting through the Maritime Administration, to provide a United
States government guarantee of the repayment of certain loans

                                        13
<PAGE>

arranged for the construction, reconstruction or reconditioning of vessels
constructed, reconstructed or reconditioned in the United States. Debt
guaranteed pursuant to Title XI can have a term of up to twenty-five years and
interest rates are generally more favorable than rates available from commercial
lenders. At December 31, 2005, the Company has $184.7 million of debt guaranteed
pursuant to Title XI collateralized by 23 vessels with a net book value of
$207.8 million.

                           CAPITAL CONSTRUCTION FUND

     Pursuant to Section 607 of the Merchant Marine Act of 1936, we have entered
into a Capital Construction Fund Agreement with the Maritime Administration
acting for the United States of America. The Capital Construction Fund program
allows United States citizens who are owners and operators of United States flag
vessels to accumulate the capital necessary to modernize and expand their fleets
by deferring federal income taxes on vessel earnings deposited into the fund.
Moneys deposited by us into our Capital Construction Fund must be used to
acquire, construct or reconstruct United States flag vessels built in United
States shipyards. Any vessel which we may acquire, construct or reconstruct
using Capital Construction Fund funds may only be used in the United States
foreign, non-contiguous domestic or Great Lakes trade. The Company has $.8
million in its Capital Construction Fund at December 31, 2005.

     Deposits to the Capital Construction Fund are considered tax deductions in
the year designated; however, they are taxable, with interest payable from the
year of deposit, if withdrawn for general corporate purposes or other
non-qualified purposes, or upon termination of the Capital Construction Fund.
Qualified withdrawals for investments in vessels and certain related equipment
do not give rise to a current tax liability, but reduce the depreciable bases of
the vessels or other assets for income tax purposes.

     At December 31, 2005, the Company has designated $41.0 million of qualified
earnings as "accrued deposits" to its Capital Construction Fund. Such accrued
deposits are reflected in the Consolidated Balance Sheets as a reduction of
current assets. Furthermore, the Company has reduced its current tax liability
and increased its deferred tax liability at December 31, 2005 for the effects of
this accrued deposit.

                                 INTERNATIONAL

     Our vessels that operate internationally are subject to various
international conventions, including certain safety, environmental and
construction standards. Among the more significant conventions are: (i) the
International Convention for the Prevention of Pollution from Ships 1973, 1978
Protocol, (ii) the International Convention on the Safety of Life at Sea, 1978
Protocol, including the International Management Code for the Safe Operation of
Ships and for Pollution Prevention, which went into effect for tank vessels on
July 1, 1998, and (iii) the International Convention on Standards of Training,
Certification and Watchkeeping for Seafarers, 1978, as amended in 1995. These
conventions govern oil spills and other matters related to environmental
protection, worker health and safety, and the manning, construction and
operation of vessels. As a general matter, surveys and inspections are performed
by internationally recognized classification societies.

     Although we believe we are in substantial compliance with all applicable
foreign law, regulation and other legal requirements, the risks of incurring
substantial compliance costs and liabilities and penalties for non-compliance
are inherent in some of our offshore operations and there can be no assurance
that such costs, liabilities and penalties will not be incurred by or imposed on
us in the future.

EMPLOYEES

     As of December 31, 2005, we had 4,257 employees, including 1,656 employed
on vessels and 2,601 employed at our domestic and foreign offices and other
land-based facilities. The Company has 2,555 employees under the terms of 35
separate collective bargaining agreements with twelve different unions which,
among other things, set forth the wages and benefits of these employees. These
agreements have expiration dates ranging from 2006 to 2015. The Company's
operations have not been affected significantly by work stoppages and, in the
opinion of management, relations with employees are good.

                                        14
<PAGE>

EXECUTIVE OFFICERS OF THE REGISTRANT

     The executive officers of the Company are as follows:

<Table>
<Caption>
                                                  PRINCIPAL OCCUPATIONS AND BUSINESS EXPERIENCE DURING THE
NAME                                        AGE                       PAST FIVE YEARS
----                                        ---   --------------------------------------------------------
<S>                                         <C>   <C>
Thomas B. Crowley, Jr. ...................  39    Chairman of the Board, President and Chief Executive
                                                  Officer of the Company since 1994.
William A. Pennella.......................  61    Vice Chairman of the Board of Directors of the Company
                                                  since September 2000; Executive Vice President of the
                                                  Company since January 1996.
Daniel L. Warner..........................  37    Senior Vice President and Treasurer of the Company since
                                                  January 1, 2006; Vice President and Treasurer of the
                                                  Company since June 2005; Finance Director of Puerto Rico
                                                  and Caribbean Islands Services from February 2005 to
                                                  June 2005; Finance Director of Logistics Services from
                                                  November 2002 to February 2005; Senior Analyst from
                                                  November 2001 to November 2002.
Arthur F. Mead III........................  39    Senior Vice President and General Counsel of the Company
                                                  since January 1, 2006; Vice President and General
                                                  Counsel to Liner Services and Logistics Services since
                                                  August 2005. Assistant General Counsel to the Company
                                                  from January 2001 through August 2005.
John C. Calvin............................  46    Senior Vice President and Controller of the Company
                                                  since January 2005; Vice President and Controller of the
                                                  Company from September 2000 to December 2004; Director
                                                  of Corporate Planning of the Company from January 1999
                                                  to September 2000.
Susan L. Rodgers..........................  56    Senior Vice President of Administration of the Company
                                                  since January 2005; Vice President, Human Resources of
                                                  the Company from January 1997 to December 2004.
</Table>

ITEM 1A.  RISK FACTORS

     Set forth below are factors that we think could cause our actual results to
differ from past results or those we currently anticipate. It is not a complete
list of all potential risks or uncertainties. If any of the following risks
actually occur, our business, financial condition, operating results or cash
flows could be materially adversely affected.

  DEMAND FOR OUR SERVICES IS DEPENDENT ON A NUMBER OF FACTORS BEYOND OUR
  CONTROL, WHICH CAN NEGATIVELY IMPACT OUR OPERATING RESULTS

     Sales of our services are tied to a number of factors beyond our control,
including:

     - worldwide demand for chemicals and petroleum products and other cargo
       shipped by our customers;

     - local and international political and economic conditions and policies;
       and

     - weather conditions.

                                        15
<PAGE>

     We have high fixed costs, and downtime or low productivity due to reduced
demand or other causes can have a significant negative effect on our operating
results.

  LINER SERVICES IS SUBJECT TO ECONOMIC FACTORS AND THE CYCLICAL NATURE OF ITS
  BUSINESS CAN CAUSE FLUCTUATIONS IN EARNINGS

     Economic factors affecting the geographic regions in which Liner Services
are provided and cyclical business patterns experienced by this part of the
maritime shipping industry have caused the earnings of Liner Services to vary in
the past and are likely to cause similar variations in the future. There is no
assurance that Liner Services will be able to redeploy its vessels from less
profitable markets into other markets or uses.

  FLUCTUATION OF FUEL PRICES MAY INFLUENCE OUR RESULTS

     Economic and political factors can affect fuel prices. The Company's
operations may be positively or adversely impacted by our ability to pass
increases in fuel prices to our customers. The extent of such impact also is
affected by the amount of time that may elapse between when we pay for higher
fuel prices and when our customers pay for the increased cost of the fuel
purchased by them.

     The cost of fuel represents a significant cost to the Company's operations.
Fuel expense, excluding the cost of fuel sold to customers, represented
approximately 11.8%, 8.5% and 8.2% of consolidated operating expenses for the
years ended December 31, 2005, 2004 and 2003, respectively. In certain cases the
Company's operating segments are able to pass these increased fuel costs to its
customers in the form of: (1) bunker surcharges as agreed to in customer
contracts or in published tariffs; (2) a direct pass through as defined in the
time charter agreements for certain vessels; and (3) adjustments to contracts as
negotiated with customers. In other cases, the increased cost is borne by the
Company.

     Fuel purchased by our Petroleum Services segment for resale is purchased at
market prices and resold at market prices plus a fixed margin.

  THE NATURE OF MARINE SERVICES CONTRACTS MAY ADD VOLATILITY TO OUR RESULTS OF
  OPERATIONS

     Marine Services frequently provides many of its services in response to
discrete customer projects or in response to emergency conditions and its
contracts are generally short-term, usually terminating within one year.
Accordingly, customers who account for a significant portion of revenues and
operating income in one fiscal year may represent an immaterial portion of
revenues in subsequent fiscal years. In addition, certain Marine Services
contracts contain clauses that do not entitle us to payment of compensation
unless certain results are achieved. As a result, it is possible that the cost
of performing those contracts could lead to losses.

  THE COMPANY FACES INTENSE COMPETITION THAT COULD ADVERSELY AFFECT ITS ABILITY
  TO INCREASE MARKET SHARE AND COULD REDUCE ITS PROFITABILITY

     Our businesses operate in highly competitive industries. These intense
levels of competition could reduce our revenues and/or increase our expenses
either of which would reduce our profitability.

     In addition to price, service, experience, reputation and quality of
equipment, important competitive factors include safety record, ability to meet
the customer's schedule, the customer's national flag preference, operating
conditions, capability and intended use, complexity of logistical support needs
and presence of equipment in the appropriate geographical locations.

     Many of our major competitors are diversified multinational companies. Some
of these companies have financial resources and operating staffs substantially
larger than ours. As a result, they may be better able to compete in making
vessels available more quickly and efficiently, meeting the customer's schedule
and withstanding the effect of declines in market prices. They may also be
better able to weather a downturn in our customers' industries. As a result, we
could lose customers and market share to these competitors.

                                        16
<PAGE>

  THE COMPANY MAY INCUR SIGNIFICANT COSTS, LIABILITIES AND PENALTIES IN
  COMPLYING WITH GOVERNMENT REGULATIONS

     Government regulation, such as international conventions, federal, state
and local laws and regulations in jurisdictions where the Company's vessels
operate or are registered, has a significant impact on our operations. These
regulations relate to worker health and safety, the manning, construction and
operation of vessels, homeland, port and vessel security, and oil spills and
other aspects of environmental protection.

     Risks of incurring substantial compliance costs and liabilities and
penalties for non-compliance, particularly with respect to environmental laws
and regulations, are inherent in the Company's business. If this happens, it
could have a substantial negative impact on the Company's profitability and
financial condition. The Company cannot predict whether it will incur such costs
or penalties in the future.

  PETROLEUM SERVICES DEPLOYS SEVERAL VESSELS WHICH, IN THEIR PRESENT CONDITION,
  WILL NOT BE PERMITTED TO CARRY PETROLEUM PRODUCTS IN UNITED STATES WATERS AS
  OF CERTAIN DATES OCCURRING WITHIN THE NEXT TEN YEARS WHICH COULD IMPACT
  PROFITABILITY

     In the event that the Company is not able to replace or retrofit those
vessels which it currently uses to carry petroleum products to double hulls, it
could become impossible for Petroleum Services to continue to transport
petroleum products at current levels for its current customers between ports in
the United States after certain dates. Should this occur it could have a
negative impact on the profitability of Petroleum Services.

  LINER SERVICES VESSELS USED IN THE PUERTO RICO AND CARIBBEAN ISLAND SERVICE
  ARE REACHING THE END OF THEIR USEFUL LIVES AND FAILURE TO REPLACE THEM COULD
  IMPACT PROFITABILITY

     The Puerto Rico and Caribbean Island Service, aggregated in our Liner
Services segment, uses five 730' Barges and four 580' Barges for its service
between the United States and Puerto Rico. These vessels are approximately 75%
through their useful lives and must be replaced. If these vessels are not
replaced, this could have a substantial negative impact on the profitability of
our Liner Services segment.

  MARINE-RELATED RISKS COULD LEAD TO THE DISRUPTION OF OUR SERVICES AND ADDED
  LIABILITIES

     The operation of our vessels is subject to various risks, including
catastrophic marine disaster, adverse weather and sea conditions, capsizing,
grounding, mechanical failure, collision, oil, chemical and other hazardous
substance spills and navigation errors. These risks could endanger the safety of
our personnel, our vessels, the cargo we carry, the equipment under tow and
other property, as well as the environment. If any of these events was to occur,
the Company could be held liable for resulting damages. In addition, the
affected vessels could be removed from service and would not be available to
generate revenue. Adverse weather and sea conditions can also result in delays
in scheduled voyages and thus affect the timing of the recognition of revenue.

  ADVERSE OUTCOMES IN OUR ASBESTOS-RELATED LAWSUITS COULD HARM OUR FINANCIAL
  CONDITION, RESULTS OF OPERATION AND CASH FLOWS

     The Company is a defendant in numerous lawsuits filed on behalf of current,
retired or deceased seamen seeking damages for unspecified asbestos-related
injuries or diseases as a result of occupational exposure to fibers emitted from
asbestos-containing products in the course of employment aboard vessels owned or
operated by the Company. See "Item 3. Legal Proceedings" and Note 21 of the
Notes to Consolidated Financial Statements in "Item 8. Financial Statements and
Supplementary Data." Additional litigation relating to these matters may be
commenced in the future. While it is not possible to predict or determine the
ultimate outcome of all pending investigations and legal proceedings or provide
reasonable ranges of potential losses, given the large and/or indeterminate
amounts sought in certain of these matters and the inherent unpredictability of
litigation, it is possible that an adverse outcome in certain matters could have
a material adverse effect on our financial condition, operating results or cash
flows.

                                        17
<PAGE>

  INSURANCE COVERAGE MAY NOT PROTECT THE COMPANY FROM ALL OF THE LIABILITIES
  THAT COULD ARISE FROM THE RISKS INHERENT IN ITS BUSINESSES

     The Company is self-insured for marine, workers' compensation, protection
and indemnity, liability, cargo and asbestos coverages and obtains reinsurance
to cover losses in excess of certain amounts. While the Company attempts to
establish adequate self-insurance reserves, unanticipated increases in the
frequency or severity of claims against the Company would have an adverse
financial impact. Further, there can be no assurance that existing insurance or
reinsurance can be renewed at commercially reasonable rates or at all. If a loss
occurs that is partially or completely uninsured or if one of the Company's
insurance carriers refuses or is unable to pay otherwise insured claims, the
Company could be exposed to substantial liability.

     A terrorist attack on one or more of our vessels anywhere in the world
could have a material adverse effect on our financial condition, results of
operations or cash flows. Although we currently maintain the maximum available
War Risk and Terrorism liability insurance coverage that is available through
the International Group of P&I Clubs, a catastrophic occurrence could result in
liability in excess of available insurance coverage, resulting in a material
adverse affect on our business.

  WE DEPEND ON ATTRACTING AND RETAINING QUALIFIED, SKILLED EMPLOYEES TO OPERATE
  OUR BUSINESSES AND PROTECT OUR KNOW-HOW

     Our results of operations depend in part upon our business know-how. We
believe that protection of our know-how depends in large part on our ability to
attract and retain highly skilled and qualified personnel. Any inability we
experience in the future to hire, train and retain a sufficient number of
qualified employees could impair our ability to manage and maintain our
businesses and to protect our know-how.

     We require skilled employees who may have to perform physically demanding
work. As a result of the volatility of our customers' industries, particularly
the oil and chemical industries, and the demanding nature of the work, potential
employees may choose to pursue employment in fields that offer a more desirable
work environment at wage rates that are competitive with ours. With a reduced
pool of workers, it is possible that we will have to raise wage rates to attract
workers from other fields and to retain our current employees. If we are not
able to increase the rates we charge our customers to compensate for wage-rate
increases, our operating results may be adversely affected.

  ACTIONS BY OUR UNIONIZED LABOR COULD HARM OUR FINANCIAL CONDITION, RESULTS OF
  OPERATION OR CASH FLOWS

     The Company's operations are heavily dependent on unionized labor, both in
the United States and in foreign markets. Maintenance of satisfactory labor
relations is important to our operations. At December 31, 2005, approximately
60% of the Company's employees were members of unions. The Company has
collective bargaining agreements with twelve different unions. These agreements
will expire between now and 2015. There is no assurance that we will be able to
negotiate new collective bargaining agreements on terms favorable to the Company
upon expiration of one or more of these agreements. If the Company is not able
to negotiate favorable terms, it may be at a competitive disadvantage. In
addition, a protracted strike or similar action by a union could have a material
adverse effect on our financial condition, results of operations or cash flows.

  OUR INTERNATIONAL OPERATIONS POSE ADDITIONAL RISKS THAT CAN NEGATIVELY IMPACT
  OUR FINANCIAL CONDITION, RESULTS OF OPERATIONS OR CASH FLOWS

     Substantial amounts of our revenues are derived from our foreign
operations. (See Note 23 of the Notes to Consolidated Financial Statements in
"Item 8. Financial Statements and Supplementary Data.") These operations are
subject to various conditions and potential events associated with and inherent
in the conduct of business with foreign nations. These include, without
limitation, political instability, vessel seizure, nationalization of assets,
fluctuating currency values, hard currency shortages, controls of currency
exchange, the repatriation of income or capital, import-export quotas, and other
forms of public and governmental regulation, all of which are beyond our
control.

                                        18
<PAGE>

     While it is not possible to predict whether any of these conditions will
develop or events will occur, the development or occurrence of any one or more
of them could have a material adverse affect on our financial condition, results
of operations or cash flows. While we do business in many countries outside of
the United States, substantially all such business is denominated in United
States dollars. Since only some of our expenses outside of the United States are
made in United States dollars our expenses in foreign countries could
effectively increase if United States dollars decline in value against the local
currency.

  OTHER BUSINESS RISKS, KNOWN AND UNKNOWN, MAY IMPACT OUR RESULTS

     Other risks which may affect our operations and revenues include our
ability to:

     - manage our costs effectively;

     - finance our operations and construct new vessels on acceptable terms;

     - charter our vessels on acceptable terms; and

     - manage these risks successfully.

  THERE IS NO ESTABLISHED PUBLIC TRADING MARKET FOR OUR STOCK SO SHARES MAY BE
  DIFFICULT TO SELL

     There is no established public trading market for our capital stock and
none is expected to develop in the foreseeable future. We do not intend to apply
for listing of any shares of our capital stock on any securities exchange. We
also will not seek to have any of our shares quoted on an inter-dealer
quotations system. Accordingly, no assurances can be given as to the liquidity
of our shares and the ability of the holders of our shares to sell them in
secondary market transactions, or as to the prices at which such shares may be
sold.

  MR. CROWLEY CAN EXERCISE CONTROL OVER ALL MATTERS REQUIRING STOCKHOLDER
  APPROVAL AND COULD MAKE DECISIONS ABOUT OUR BUSINESS THAT CONFLICT WITH OTHER
  STOCKHOLDERS' INTERESTS

     As of February 28, 2006, Thomas B. Crowley, Jr., the Chairman of the Board
of Directors, President and Chief Executive Officer of the Company, beneficially
owned approximately 65.2% of our outstanding common stock, 100% of our Class N
common stock, and approximately 99.9% of our outstanding Series A preferred
stock. This ownership gives Mr. Crowley approximately 78.1% of the total votes
attributable to our outstanding voting stock as of February 28, 2006. Because
the Series A preferred stock is entitled to vote along with the shares of common
stock, Mr. Crowley's stock ownership means that he is able to exercise control
over all matters requiring stockholder approval even if other stockholders
oppose them. As a result, Mr. Crowley controls all matters affecting the
Company, including:

     - the composition of our board of directors and, through it, any
       determination with respect to our business direction and policies,
       including the appointment and removal of officers;

     - any determinations with respect to mergers or other business
       combinations;

     - our acquisition or disposition of assets;

     - our financing arrangements; and

     - the payment of dividends on our stock.

     Mr. Crowley and his family are the beneficiaries of certain split-dollar
life insurance agreements and a related settlement agreement. As the Company has
previously disclosed, the Company and Mr. Crowley were parties to certain
split-dollar life insurance agreements. On April 6, 1992, the Company and Mr.
Crowley entered into the first of these agreements (the "1992 Agreement") and on
July 20, 1998, the Company and Mr. Crowley entered into a second agreement ("the
1998 Agreement"). Following the passage of the Sarbanes-Oxley Act of 2002 (the
"Act"), it is uncertain whether the Act prohibits the Company from continuing to
pay the annual premiums for these life insurance policies owned by Mr. Crowley
and certain trusts for the benefit of his descendants. While the Act does not
specifically address these types of insurance arrangements, it generally makes
it unlawful for an issuer to extend or maintain credit, to arrange for the

                                        19
<PAGE>

extension of credit, or to renew an extension of credit, in the form of a
personal loan to or for any director or executive officer (or equivalent
thereof) of that issuer. Since it is possible that the Act might be construed as
treating annual premium payments made after July 30, 2002 under the split-dollar
life insurance agreements as new extensions of credit which would be prohibited
by the Act, the Company has suspended making any annual premium payments for the
life insurance policies owned by Mr. Crowley and the trusts.

     On December 23, 2003, the Company and Mr. Crowley entered into an agreement
terminating and settling the parties' obligations under the 1992 Agreement (the
"Settlement Agreement"). Pursuant to the Settlement Agreement, Mr. Crowley
repaid to the Company $7.5 million, which represented the total amount of
premiums paid by the Company under the 1992 Agreement, and Mr. Crowley
relinquished all of his rights under the 1992 Agreement. In return, the Company
agreed to pay Mr. Crowley an amount equal to the interest payable by him on
financing he arranged to repay the $7.5 million to the Company plus applicable
taxes. This amount paid to Mr. Crowley is recorded as compensation expense. The
Company also suspended its premium payments under the 1998 Agreement because of
the possibility that such payments also could be treated as an extension of
credit prohibited by the Sarbanes-Oxley Act. Since July 2002, the Company has
not paid any premiums under the 1998 Agreement. Rather, premiums have been paid
out of the cash surrender value of the underlying policies. Thus, while the
Company has ceased performing its obligations under the 1998 Agreement, the
underlying policies remain in force and are pledged as security to repay to the
Company the premiums it paid under the 1998 Agreement through July 2002.

     Upon the death of Mrs. Molly M. Crowley, a director of the Company, the net
proceeds of the policies of insurance on the life of Mrs. Crowley could be used
by Mr. Crowley and the trusts under his control to purchase shares of Common
Stock held by the Thomas B. Crowley Marital Trust so that this trust can pay
applicable estate taxes. This means that the split-dollar life insurance
agreements and related settlement agreement could enable Mr. Crowley and his
family to retain ownership of shares and control of the Company under
circumstances when certain of such shares might otherwise have to be sold to a
third party to pay applicable estate taxes.

ITEM 1B.  UNRESOLVED STAFF COMMENTS

     Not applicable

ITEM 2.  PROPERTIES.

     Our corporate headquarters and executive offices are located at 155 Grand
Avenue, Oakland, California 94612, where we lease approximately 15,800 square
feet pursuant to a lease which expires in 2008. Liner Services and Logistics
Services conduct their operations from offices located at 9487 Regency Square
Boulevard, Jacksonville, Florida 32225, a 100,000 square foot building owned by
the Company.

     The operations of Marine Services are primarily conducted from offices
located at 1102 Southwest Massachusetts Street, Pier 17, Seattle, Washington
98134, where we lease approximately 40,000 square feet pursuant to a lease which
expires in 2022.

     The operations of Petroleum Services are primarily conducted from our
offices located at: (a) 100 Lighting Way, Secaucus, New Jersey 07094, where we
lease approximately 14,030 square feet pursuant to a lease which expires in
2010; and (b) 7941 Sandlewood Place, Anchorage, Alaska 99507 where we own a
9,200 square foot building.

     We also maintain additional facilities in the United States and abroad to
support our businesses, including warehouse facilities, dock facilities, tank
farms and gas stations. These facilities are located in Florida, Puerto Rico,
Alaska, Washington, New Jersey, Mississippi, Texas, Louisiana, and California.
Significant international operations are located in Far East Russia, the United
Kingdom, Costa Rica, El Salvador, Guatemala, Honduras and Panama.

     We believe that all of our facilities and equipment are in good condition,
well maintained and able to support our current operations. For additional
information concerning our properties, see the information concerning our fleet
of vessels and certain other properties as set forth in "Item 1. Business."

                                        20
<PAGE>

ITEM 3.  LEGAL PROCEEDINGS.

  GENERAL LITIGATION

     In the normal course of business, the Company is subject to legal
proceedings, lawsuits and other claims. Such matters are subject to many
uncertainties and outcomes are not predictable with assurance. Consequently, the
ultimate aggregate amount of monetary liability or financial impact with respect
to these matters at December 31, 2005, cannot be ascertained. While these
matters could affect the Company's operating results for any one quarter when
resolved in future periods and while there can be no assurance with respect
thereto, management believes, with the advice of outside legal counsel, that
after final disposition, any monetary liability or financial impact to the
Company from these matters (except as otherwise disclosed below) would not be
material to the Company's consolidated financial condition, results of
operations or cash flows.

  LITIGATION INVOLVING DIRECTORS

     A purported class action and derivative complaint was filed on November 30,
2004, in the Court of Chancery (the "Court") in the State of Delaware against
the Company and its Board of Directors alleging breaches of the fiduciary duties
owed by the director defendants to the Company and its stockholders. Among other
things, the complaint alleges that the defendants have pursued a corporate
policy of entrenching the Company's controlling stockholder, Thomas B. Crowley,
Jr., and certain members of the Crowley family by allegedly expending corporate
funds improperly. The plaintiffs seek damages and other relief. On February 25,
2005, the defendants filed a motion to dismiss the complaint. On September 30,
2005, the Court held a hearing and requested additional briefing on several
issues from the plaintiff and the Company. That motion was briefed and argued on
September 30, 2005. At oral argument, the plaintiffs proposed amending their
complaint. On December 27, 2005, plaintiffs formally moved for leave to amend
their complaint, and another purported stockholder filed a motion to intervene
in the action. On January 19, 2006, the Court ordered that defendants' motion to
dismiss is stayed pending resolution of the motion to amend and motion to
intervene. Defendants' opposition briefs to the motion to amend and motion to
intervene were filed February 27, 2006. The Company believes that there are
legal and factual defenses to these claims and intends to defend this action
vigorously. The Company believes that an adverse outcome of this case would not
have a material effect on the financial condition, results of operations or cash
flows.

  ASBESTOS LITIGATION

     The Company is currently named as a defendant with other shipowners and
numerous other defendants with respect to approximately 16,000 maritime asbestos
cases and other toxic tort cases, most of which were filed in the Federal Courts
in Cleveland, Ohio and Detroit, Michigan. Each of these cases, filed on behalf
of a seaman or his personal representative, alleges injury or illness based upon
exposure to asbestos or other toxic substances and sets forth a claim based upon
the theory of negligence under the Jones Act and on the theory of
unseaworthiness under the General Maritime Law.

     Pursuant to an order issued by the Judicial Panel on Multidistrict
Litigation dated July 29, 1991, all Ohio and Michigan cases ("the Multidistrict
Litigation") were transferred to the United States District Court for the
Eastern District of Pennsylvania for pretrial processing. On May 1, 1996, the
cases were dismissed subject to reinstatement in the future. At present, it is
not known when or how long the process will require. Approximately 31 of the
Ohio and Michigan claims which name one or more Company entities as defendants
have been reinstated, but the plaintiffs' attorneys are not actively pursuing
the cases. Although nine years have passed since the dismissal, it is not known
whether a plan can be developed that will result in settlement of the cases. If
not settled, upon reinstatement, the cases should be remanded to the Ohio and
Michigan Federal Courts.

     In addition, the Company is a defendant with others in approximately 88
asbestosis or other toxic cases pending in jurisdictions other than the Eastern
District of Pennsylvania. These other jurisdictions include state and federal
courts located in Northern California, Oregon, Texas, Louisiana, Florida,
Maryland and New York. These cases contain allegations of injury similar to
those alleged in the Multidistrict Litigation cases.

                                        21
<PAGE>

     Substantially all of the cases described above, as with other asbestos and
toxic tort cases in which the Company has been named as a party, not only
involve numerous named defendants, but also generally do not allege specific
monetary damages beyond the jurisdictional requirement. If specific damages are
sought, they would apply in various amounts against various defendants.

     In many claims that have been asserted against the Company, the plaintiffs
have been unable to establish any causal relationship to the Company. In
addition, in many asbestos cases, the plaintiffs have been unable to demonstrate
that they have suffered any injury or compensable loss that resulted from
asbestos exposure or that alleged exposure was related to the Company.

     The Company has insurance coverage that may reimburse it for a substantial
portion of: (a) the costs incurred defending against asbestos claims; and (b)
the amounts the Company pays to settle claims or honor judgments by courts. The
coverage is provided by a large number of insurance policies written by dozens
of insurance companies over a period of many years. The amount of insurance
coverage depends on the nature of the alleged exposure to asbestos, the specific
subsidiary against which an asbestos claim is asserted and the terms and
conditions of the specific policy.

     At December 31, 2005, the Company has accrued $2.8 million as its best
estimate of the liability for pending asbestos and toxic claims and has recorded
a receivable from its insurance companies of $1.1 million related to the
asbestos litigation described above. The Company does not accrue for unasserted
asbestos claims, such as in the Multidistrict Litigation, because it believes
that it is not possible to determine whether any loss is probable with respect
to such claims or even to estimate the amount or range of the loss, if any.
Among the reasons is that the claims are made by an indeterminable number of
people that include not just seamen who served on Company vessels, but
longshoreman, ship repair workers and others.

     The unpredictability of personal injury litigation makes it difficult to
accurately predict the ultimate resolution of these asbestos and toxic claims.
By their very nature, civil actions relating to toxic substances vary according
to the fact pattern of each case, including whether the plaintiff can prove
actual disease, if any, or actual exposure, if any, to asbestos on Company
vessels, the number of defendants and their relative shares of liability in each
case, the applicable jurisdiction and numerous other factors. This uncertainty
is increased by the possibility of adverse court rulings or new legislation
affecting the asbestos claim litigation or the settlement process. It is
therefore possible that an adverse outcome in some of these cases could have a
material adverse affect on the Company's consolidated financial condition,
operating results or cash flows.

     A summary of the asbestos-related claims for 2005 and 2004 is presented
below (dollars are in thousands):

<Table>
<Caption>
                                                              2005   2004
                                                              ----   ----
<S>                                                           <C>    <C>
Number of claims filed......................................    62     60
Number of claims settled....................................     6     10
Number of claims dismissed..................................     6     20
Total settlements paid......................................  $ 93   $163
Average settlement..........................................  $ 16   $ 16
Legal expenses paid.........................................  $571   $898
Insurance proceeds received.................................  $ 77   $298
</Table>

     In addition to the asbestos-related claims in the summary above, in 2004
the Company settled certain asbestos-related claims that involved seamen
employed by the Company for over 30 years. The Company expensed $2.1 million and
$4.2 million related to this litigation in the first and second quarters of
2004, respectively. Although no insurance receivable has been recorded on these
claims, the Company is aggressively pursuing reimbursement from certain
insurance companies. In October 2004, the Company submitted demand letters to
certain insurance underwriters for settlement amounts and defense costs paid. In
November 2004, the Company filed suit against the insurance underwriters. The
case is currently in discovery.

                                        22
<PAGE>

ITEM 4.  SUBMISSION OF MATTERS TO A VOTE OF SECURITY HOLDERS.

     No matters were submitted to a vote of the Company's security holders
during the fourth quarter of 2005.

                                    PART II

ITEM 5.  MARKET FOR REGISTRANT'S COMMON EQUITY, RELATED STOCKHOLDER MATTERS AND
         ISSUER PURCHASES OF EQUITY SECURITIES.

     No established public trading market exists for our common stock. Shares of
our common stock are neither listed on any national securities exchange, nor
presently traded on any inter-dealer quotation system or in any other public
market and there are no plans, proposals, arrangements or understandings with
any person with regard to the development of a public trading market in our
common stock. Although quotations for shares of our common stock may be obtained
in the Pink Sheets (a centralized quotations service that collects and publishes
market maker quotes for over-the-counter securities), because secondary market
activity for shares of our common stock has been limited and sporadic, such
quotations may not accurately reflect the price or prices at which purchasers or
sellers would currently be willing to purchase or sell such shares.

     The following table shows the range of high and low closing bid prices (in
dollars per share) for our common stock, as reported in the Pink Sheets, for the
periods indicated. The quotations reflect inter-dealer prices, without retail
mark-up, mark-down or commission and may not necessarily represent actual
transactions, if any.

<Table>
<Caption>
                                                               HIGH     LOW
                                                              ------   ------
<S>                                                           <C>      <C>
FISCAL YEAR ENDED DECEMBER 31, 2005
Fourth Quarter..............................................  $1,500   $1,419
Third Quarter...............................................  $1,419   $1,300
Second Quarter..............................................  $1,300   $1,175
First Quarter...............................................  $1,175   $1,100
FISCAL YEAR ENDED DECEMBER 31, 2004
Fourth Quarter..............................................  $1,125   $1,110
Third Quarter...............................................  $1,175   $1,100
Second Quarter..............................................  $1,160   $1,150
First Quarter...............................................  $1,150   $1,036
</Table>

     As of March 1, 2006, we had 457 stockholders of record of our voting common
stock and 1 holder of record of our Class N non-voting common stock.

     We pay no dividends on our common stock and do not anticipate declaring or
paying cash dividends on our common stock in the foreseeable future. We
currently intend to retain future earnings to finance operations and fund the
growth of our business. Any payment of future dividends on our common stock will
be at the discretion of our board of directors and will depend upon, among other
things, our earnings, financial condition, capital requirements, level of
indebtedness, contractual restrictions with respect to the payment of dividends
and other factors that our board of directors may deem relevant. Payment of cash
dividends on our common stock is currently prohibited by the terms of certain
agreements to which the Company is a party.

     The Company's financing agreements for Title XI borrowings contain
restrictive covenants which require, among other things, maintenance of annual
working capital that is equal to or greater than 50% of the total of annual
charter hire and other lease obligations with remaining terms in excess of one
year. The amount of minimum working capital so required at December 31, 2005 was
$28.3 million. The Company is also prohibited by certain other financing
agreements from repurchasing shares of any class of capital stock or declaring
or paying any dividend; however, it may repurchase common stock from employee
stock ownership plans and pay dividends in any twelve-month period so long as
the combined cost does not exceed $10.0 million. At December 31, 2005, the
Company was in compliance with these covenants. For information

                                        23
<PAGE>

concerning our restrictive covenants see Notes 14 and 15 of the Notes to
Consolidated Financial Statements in "Item 8. Financial Statements and
Supplementary Data."

     The Company sponsors the Crowley Maritime Corporation Retirement Stock Plan
(the "RSP"), which held 8,579 shares of our common stock at December 31, 2005,
all of which are fully vested. Distributions of shares allocated to RSP
participants are made as soon as practicable following the participant's death,
disability retirement, termination of Company employment after attainment of age
65 or termination of employment if the participant's account balance is less
than one share. All other vested participants are eligible for distribution on
the earlier of: (a) the third calendar quarter of the third plan year that
follows the plan year in which the participant terminates Company employment; or
(b) the attainment of age 65. All distributions to a participant are in the form
of a single, lump sum distribution of whole shares of common stock. Upon the
date of distribution and for the immediately succeeding ten days, such shares of
Company stock are subject to the Company's right to repurchase them for cash
equal to their fair value (based on a non-marketable minority basis), determined
by an independent appraisal as of the preceding calendar year-end.

     The Company also sponsors the Stock Savings Plan (the "SSP"), a profit
sharing plan which held 4,075 shares of our common stock at December 31, 2005,
all of which are fully released and vested. Upon distribution of common stock
from the SSP, each share of common stock contains a put option which provides
the participants the option to sell their stock to the Company upon retirement,
death or after a break in service at the common stock's fair value (based on a
marketable minority basis), determined by an independent appraisal as of the
preceding calendar year-end.

     A summary of the shares purchased by the Company from the RSP and SSP in
the fourth quarter of 2005 is as follows:

<Table>
<Caption>
                                                                 TOTAL NUMBER OF SHARES         MAXIMUM NUMBER (OR
                                                 AVERAGE PRICE   (OR UNITS) PURCHASED AS   APPROXIMATE DOLLAR VALUE) OF
                              TOTAL NUMBER OF      PAID PER         PART OF PUBLICLY        SHARES (OR UNITS) THAT MAY
                             SHARES (OR UNITS)       SHARE         ANNOUNCED PLANS OR       YET BE PURCHASED UNDER THE
PERIOD                           PURCHASED         (OR UNIT)            PROGRAMS                PLANS OR PROGRAMS
------                       -----------------   -------------   -----------------------   ----------------------------
<S>                          <C>                 <C>             <C>                       <C>
October 1 - 31, 2005.......         128            $1,621.61               N/A                         N/A
November 1 - 30, 2005......          18             1,473.67               N/A                         N/A
December 1 - 31, 2005......          95             1,579.79               N/A                         N/A
                                    ---            ---------
Total......................         241            $1,594.07               N/A                         N/A
                                    ===            =========
</Table>

ITEM 6.  SELECTED FINANCIAL DATA.

     The following table presents summary consolidated financial and operating
data for the Company. The data presented in this table are derived from the
audited financial statements of the Company and should be read in conjunction
with: (a) the consolidated financial statements and the notes thereto in "Item
8. Financial Statements and Supplementary Data," which provides a further
explanation of the financial data summarized here; and (b) "Item 7. Management's
Discussion and Analysis of Financial Condition and Results of Operations," which
describes a number of factors which have affected our financial results.

     In June 2005, the Company reclassified the maximum cash obligation of the
SSP stock to "Redeemable Common Stock" included in mezzanine equity from
"Stockholders' Equity" in the Consolidated Balance Sheets in accordance with
Emerging Issues Task Force 89-11, Sponsor's Balance Sheet Classification of
Capital Stock with a Put Option Held by an Employee Stock Ownership Plan. The
amount reclassified at December 31, 2004 was $8.7 million. The Company has
evaluated the impact of this reclassification on its basic and diluted earnings
per common share in its previously issued audited consolidated financial
statements and unaudited quarterly financial statements. The Company determined
the effect of this reclassification was not material to any prior periods and
therefore, has not restated any basic and diluted earnings per common share in
its audited annual and unaudited quarterly financial statements for prior
periods.

     In November 2005, the Company sold a vessel that was a component of the
Company, as defined in Statement of Financial Accounting Standard No. 144,
Accounting for the Impairment or Disposal of Long-

                                        24
<PAGE>

Lived Assets, for $4.2 million. Accordingly, all financial information in "Item
6. Selected Financial Data" and "Item 7. Management's Discussion and Analysis of
Financial Condition and Results of Operations" has been restated to present the
discontinued vessel operations separately from the Company's continuing
operations.

     As further discussed in "Item 7. Management's Discussion and Analysis of
Financial Condition and Results of Operations," the Company purchased Northland
Fuel and Titan on September 6, 2005 and October 1, 2005, respectively. The
Operations of Northland Fuel and Titan are included in the Company's
consolidated statements of operations commencing on these respective purchase
dates.

                      SELECTED CONSOLIDATED FINANCIAL DATA
                     (IN THOUSANDS, EXCEPT PER SHARE DATA)

<Table>
<Caption>
                                                        YEAR ENDED DECEMBER 31,
                                         ------------------------------------------------------
                                            2005        2004       2003       2002       2001
                                         ----------   --------   --------   --------   --------
<S>                                      <C>          <C>        <C>        <C>        <C>
STATEMENT OF OPERATIONS DATA:
Revenues...............................  $1,190,813   $990,401   $959,780   $951,243   $983,014
Operating income.......................      80,800     29,016     37,268     35,487     36,745
Income from continuing operations......      42,389      9,889     12,029     15,881     18,112
Income (loss) from discontinued
  operations,..........................                                           --         --
  including gain/loss on disposal, net
     of tax............................      (3,513)    15,026      1,212      1,391      1,969
Cumulative effect of change in
  accounting principle, net of tax.....          --         --       (420)        --         --
Net income.............................      38,876     24,915     12,821     17,272     20,081
Preferred stock dividends..............      (1,575)    (1,575)    (1,575)    (1,666)    (1,849)
Change in fair value of redeemable
  common stock.........................        (330)        --         --         --         --
Net income attributable to common
  stockholders.........................  $   36,971   $ 23,340   $ 11,246   $ 15,606   $ 18,232
Basic Earnings Per Common Share:
  Income from continuing operations....  $   300.94   $  61.45   $  77.04   $ 104.51   $ 119.65
  Income (loss) from discontinued
     operations........................      (26.11)    111.05       8.93      10.23      14.49
  Cumulative effect of change in
     accounting principle..............          --         --      (3.10)        --         --
                                         ----------   --------   --------   --------   --------
  Net income...........................  $   274.83   $ 172.50   $  82.87   $ 114.74   $ 134.14
                                         ==========   ========   ========   ========   ========
Diluted Earnings Per Common Share:
  Income from continuing operations....  $   260.54   $  61.21   $  74.28   $  97.31   $ 110.00
  Income (loss) from discontinued
     operations........................      (21.76)     93.01       7.48       8.58      12.14
  Cumulative effect of change in
     accounting principle..............          --         --      (2.59)        --         --
                                         ----------   --------   --------   --------   --------
  Net income...........................  $   238.78   $ 154.22   $  79.17   $ 105.89   $ 122.14
                                         ==========   ========   ========   ========   ========
</Table>

                                        25
<PAGE>

<Table>
<Caption>
                                                          AS OF DECEMBER 31,
                                       --------------------------------------------------------
                                          2005        2004        2003        2002       2001
                                       ----------   --------   ----------   --------   --------
<S>                                    <C>          <C>        <C>          <C>        <C>
BALANCE SHEET DATA:
Current assets.......................  $  287,779   $366,935   $  370,728   $233,293   $201,480
Non current assets...................     770,932    613,822      642,242    650,568    603,248
                                       ----------   --------   ----------   --------   --------
Total assets.........................  $1,058,711   $980,757   $1,012,970   $883,861   $804,728
                                       ==========   ========   ==========   ========   ========
Current liabilities..................  $  243,832   $203,332   $  214,372   $192,644   $200,523
Other non current liabilities........     132,127    112,210      126,488    117,392    112,395
Long-term debt, net of current
  portion............................     322,686    341,380      372,373    285,895    209,622
Redeemable stock.....................       8,183      8,700        9,259      9,618     12,279
Stockholders' equity.................     351,883    315,135      290,478    278,312    269,909
                                       ----------   --------   ----------   --------   --------
Total liabilities, redeemable stock
  and stockholders' equity...........  $1,058,711   $980,757   $1,012,970   $883,861   $804,728
                                       ==========   ========   ==========   ========   ========
</Table>

ITEM 7.  MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS
         OF OPERATIONS.

     The following discussion should be read in conjunction with our
consolidated financial statements, the accompanying notes thereto and other
financial information appearing elsewhere in this report. As explained in the
beginning of Part I of this report, in addition to historical information, the
following discussion contains forward-looking statements that involve risks and
uncertainties.

EXECUTIVE SUMMARY

  REORGANIZATION

     Crowley Maritime Corporation is a diversified transportation and fuel sales
and distribution company with global operations. Effective July 1, 2005, the
Company implemented a corporate reorganization. As a result of this
reorganization, the Company reevaluated its operating segments and reporting
segments and retroactively changed them to be aligned with the Company's new
structure. The Company is now organized and managed principally by means of five
operating segments: Puerto Rico and Caribbean Islands Liner Services, Latin
America Liner Services, Logistics Services, Marine Services and Petroleum
Services. The Company manages its business operations and evaluates performance
based upon the revenue and operating income of each of its operating segments.

     As a result of the Company's change in its organizational structure: (a)
the previously reported Ship Assist and Escort Service and Energy and Marine
Service operating segments have been combined into one operating segment called
Marine Services; and (b) certain ship management services previously reported
under Liner Services and the former Oil and Chemical Distribution and
Transportation Services are reported in Marine Services. The remaining portions
of the former Oil and Chemical Distribution and Transportation Services
(Petroleum Service and Marine Transport Corporation) are now part of an
operating segment named Petroleum Services.

     The Company has aggregated the Puerto Rico and Caribbean Islands Liner
Services and the Latin America Liner Services into one reportable segment called
Liner Services. These operating segments are aggregated based upon their
long-term financial performance and because their products, services and class
of customers are similar. Logistics Services, formerly aggregated in the Liner
Services segment, is being reported as a separate reportable segment based upon
its long-term financial performance.

     All prior year consolidated financial information has been restated to
reflect the change in segments.

                                        26
<PAGE>

  ACQUISITIONS AND DISPOSITIONS

     On September 6, 2005, the Company acquired from Northland Fuel LLC all of
the stock of Service Oil and Gas, Inc and certain assets and liabilities of
Yukon Fuel Company, Northland Vessel Leasing Company LLC, and Yutana Barge Lines
(collectively "Northland Fuel") for a purchase price of $91.6 million, net of
$1.6 million cash acquired. The purchase price was paid with cash. Northland
Fuel operates a refined products distribution business in Alaska. The
acquisition of Northland Fuel complements the Company's existing business
engaged in the transportation, distribution and sale of fuel in Alaska. The
operations of Northland Fuel are included in the Company's consolidated
statement of operations beginning September 6, 2005 and are reported under the
Petroleum Services segment. The working capital component of the purchase price
is subject to adjustment, as defined by the purchase agreement for this
transaction. The purchase price has been adjusted at December 31, 2005 by a
receivable from the seller of $.8 million of estimated additional working
capital due.

     On October 1, 2005, the Company acquired the membership interest of Titan
Maritime LLC, and certain assets of Titan Maritime Industries, Inc., Karlissa
Associates and Marine Equipment Corp. (collectively "Titan"), a worldwide marine
salvage and marine wreck removal business. The acquisition of Titan expands the
Company's marine salvage and marine wreck removal business domestically and into
international markets. The operations of Titan have been included in the
Company's consolidated statement of operations commencing October 1, 2005 and
are reported under the Marine Services segment. The purchase price of $17.7
million, net of $1.6 million cash acquired, is comprised of $12.5 million of
cash, a $5.0 million promissory note, and a working capital payable to the
sellers of $1.8 million. The working capital component of the purchase price is
subject to adjustment through September 30, 2006 based on actual revenues earned
and expenses paid. The promissory note is payable in five annual installments of
$1.0 million plus interest at the Citibank prime interest rate. In addition, the
sellers are entitled to an earn-out for five years based upon Titan's financial
performance during that period as defined by the purchase agreement.

     In April 2005, the Company purchased a vessel for $9.5 million that was
chartered by the Company pursuant to a time charter which was not scheduled to
expire until 2009. As of the date of the purchase, the Company: (a) was released
from its obligations under the time charter; and (b) became no longer obligated
to pay the $32.0 million of time charter hire which, in the absence of the
purchase of the vessel and the termination of the time charter, would have been
payable between April 11, 2005 and 2009. In September 2005, the management of
the Company approved the disposal of a vessel and as a result performed an
impairment test on the recoverability of the vessel in accordance with SFAS No.
144, Accounting for the Impairment or Disposal of Long-Lived Assets, at
September 30, 2005. The Company recorded an impairment loss of $5.6 million as a
result of this evaluation. The vessel represents a component of the Company
whose operations and cash flows were eliminated from the ongoing operations of
the Company as defined by SFAS No. 144. In October 2005, the Company met all of
the requirements to account for the disposal of the vessel as discontinued
operations; accordingly, the operations and impairment charge of the vessel were
reclassified as discontinued operations beginning in the fourth quarter of 2005
and prior year consolidated financial statements have been restated. In November
2005, the vessel was sold for $4.2 million, resulting in a gain on disposal of
$.2 million.

     We are continually looking for opportunities that will complement or
strengthen our existing businesses. As part of these efforts, we: (1) purchased
Northland Fuel in September 2005; (2) purchased Titan in October 2005; (3)
entered into a construction contract in August of 2005 for4 articulated
tug/barge units ("ATBs"); and (4) entered into a construction contract in June
of 2004 for 2 ATBs.

     To be certain that we have the financial resources required for any project
that meets our criteria, we maintain a $95.0 million revolving line of credit.
The Company had drawn $10.0 million against this revolving line of credit for
working capital at December 31, 2005. The Company also had $34.3 million of
outstanding letters of credit at December 31, 2005 which left available
borrowings of $50.7 million at December 31, 2005 under its revolving line of
credit. At December 31, 2005, the Company had cash and cash equivalents of $33.9
million, working capital of $43.9 million, and total debt in the amount of
$356.1 million.

                                        27
<PAGE>

HURRICANE KATRINA

     On August 29, 2005 Hurricane Katrina struck the Gulf Coast of the United
States causing damage to a terminal in Gulfport, Mississippi leased by the
Company's Latin America Liner Service and the destruction of approximately 1,200
pieces of leased and owned equipment. In addition, there have been certain
general liability and cargo claims filed against the Company directly related to
the storm. Furthermore, a barge owned by the Company and docked in Mobile,
Alabama was washed ashore and is considered a constructive total loss.

     As a result of this event, the Company has recorded net estimated losses of
$1.2 million as Operating Expense in its Consolidated Statement of Operations
for the year ended December 31, 2005. These losses are net of estimated
insurance proceeds of $1.2 million. Estimated insurance proceeds have been
recorded up to the amount of losses incurred on the owned and leased equipment.
As of December 31, 2005, the Company has recorded $3.0 million of insurance
claims payable and $7.0 million of receivables from reinsurers arising from this
event. The Company continues to evaluate the impact of Hurricane Katrina and
updates its estimates as facts and circumstances continue to develop.

CRITICAL ACCOUNTING POLICIES

     The preparation of the consolidated financial statements, upon which this
MD&A is based, requires management to make estimates which impact those
consolidated financial statements. The most critical of these estimates and
accounting policies relate to long-lived asset depreciation, amortization and
impairment, dry-docking, goodwill and intangibles, revenue recognition,
insurance reserves and litigation and environmental reserves. In particular, the
accounting for these areas requires significant judgments to be made by
management. Different assumptions in the application of these policies could
result in material changes in the Company's consolidated financial condition,
results of operations, or cash flows. For a more complete discussion of these
and other accounting policies, see Note 1 of the Notes to Consolidated Financial
Statements in "Item 8. Financial Statements and Supplementary Data."

  LONG-LIVED ASSET DEPRECIATION, AMORTIZATION AND IMPAIRMENT

     The Company monitors expenditures for long-lived assets to determine their
appropriate useful lives. This determination is based on historical experience
with similar assets and the assets' expected use in the Company's business. The
determination of the assets' depreciable life can significantly impact the
financial statements. In addition, the Company depreciates property and
equipment, less estimated salvage value, using the straight-line method as such
method is considered to be the most appropriate systematic and rational method
to allocate the cost of property and equipment over the period in which it is to
be in use.

     The Company assesses recoverability of the carrying value of the asset,
when indicators of impairment are present, by estimating the future net cash
flows expected to result from the asset, including eventual disposition. If the
future net cash flows are less than the carrying value of the asset, an
impairment loss is recorded equal to the difference between the asset's carrying
value and fair value.

  DRY-DOCKING

     Under U.S. Coast Guard Rules, administered through the American Bureau of
Shipping's alternative compliance program, all vessels must meet specified
seaworthiness standards to remain in service carrying cargo between U.S. marine
terminals. Vessels must undergo regular inspection, monitoring and maintenance,
referred to as dry-docking, to maintain the required operating certificates.
These dry-dockings generally occur every two and a half years, or twice every
five years. Because dry-dockings enable the vessel to continue operating in
compliance with U.S. Coast Guard requirements, the costs of these scheduled
dry-dockings for major owned vessels are deferred and amortized on the
straight-line basis until the next regularly scheduled dry-docking period.

     The Company capitalizes dry-docking costs for major owned vessels (Tank
Ships, 580' Barges, 730' Barges, Integrated Tug/Barge units and Articulated
Tug/Barge units). Vessel dry-docking costs for other

                                        28
<PAGE>

owned vessels (Offshore Tugs, Tractor Tugs, River Tugs, 1,000-5,999 DWT Barges,
6,000-20,000 DWT Barges and miscellaneous barges) are not individually
significant and are expensed as incurred as repair and maintenance expense. The
types of material costs that are incurred for dry-dockings include compliance
with regulatory and vessel classification inspection requirements, blasting and
coating of steel and steel replacement. Mobilization costs to and from the dry
docking location are expensed as incurred. During a vessel dry-docking, the
Company will occasionally replace vessel machinery or equipment and perform
procedures that materially enhance capabilities or extend the useful life of a
vessel. In these circumstances, the expenditures are capitalized and depreciated
over the estimated useful life of the vessel.

  GOODWILL AND INTANGIBLES

     Goodwill represents the costs of acquired companies in excess of the fair
value of their net tangible assets. In accordance with Statement of Financial
Accounting Standards ("SFAS") No. 142, Goodwill and Other Intangible Assets,
goodwill deemed to have an indefinite life is not amortized, but is subject to
annual impairment testing. The identification and measurement of goodwill
impairment involves the estimation of the fair value of reporting units. The
estimates of fair value of reporting units are based on the best information
available as of the date of the assessment; the assessment primarily
incorporates management assumptions about expected future cash flows and
contemplates other valuation techniques. Future cash flows can be affected by
changes in industry or market conditions or the rate and extent to which
anticipated synergies or cost savings are realized with newly acquired entities.
Although no goodwill impairment has been recorded to date, there can be no
assurances that future goodwill impairments will not occur.

     Identifiable intangible assets (either through acquisition or debt
issuance) are amortized over their estimated useful lives. The Company reviews
intangible assets for impairment whenever events or changes in circumstances
indicate that the carrying amount of the asset may not be recoverable. When an
indication of impairment is present, we estimate the future net cash flows
expected to result from the use of the asset, including eventual disposition. If
the future net cash flows are less than the carrying value of the asset, an
impairment loss is recorded equal to the difference between the asset's carrying
value and fair value.

  REVENUE RECOGNITION

     The Company's accounting policies for revenue recognition are predicated on
the type of service provided. The common carrier services included in Liner
Services are recognized on the proportional performance basis over each voyage
by load and discharge port. Revenue from the Company's Logistics Services, a
portion of the revenue generated by Marine Services and fuel sales of the
Petroleum Services are recognized as services are provided. Revenues from
Petroleum Services, except fuel sales, and a portion of Marine Services are
recognized on the proportional performance basis over the length of the
contract. Estimated losses are provided at the time such losses become evident.
The Company's recognition of revenue includes estimates of the total costs
incurred for each service and the total billings to perform the service that
impacts the estimated operating margin. While the Company has processes in place
to assist in developing these estimates, if the Company experiences
significantly higher costs or a significant decrease in estimated billings, the
Company's financial condition, results of operations and cash flows could be
materially impacted.

  SALVAGE REVENUE RECOGNITION

     Marine Services enters into certain marine salvage contracts on Lloyd's
Standard Form of Salvage Agreement ("LOF"). The LOF is administered by the
Lloyd's Salvage Arbitration Branch ("Lloyd's"). These contracts are governed by
the International Convention on Salvage, IMO 1989, and recognize two different
types of remuneration: (a) Article 13 awards, which is traditional compensation
based on the value of the salved property and other factors weighted by Lloyd's
salvage arbitrators; and (b) Article 14 awards which is special compensation
based on the salvor's costs of operations to minimize/eliminate the risk of
environmental harm.

                                        29
<PAGE>

     When conducting a marine salvage the parties that own the vessel and cargo
being salved must provide satisfactory security for the Company's claim,
including interest and costs, before obtaining possession of the salved vessel
and cargo. This security is normally a lien against the value of the vessel and
cargo.

     When the salvage is complete, all of the parties will attempt to settle the
contract based on the value of the salved property, primarily vessel and cargo,
along with other factors, including taking into account the expense and risk
undertaken by the salvor. If the parties cannot agree on the amount to be paid
to the salvor, the LOF is subject to arbitration at Lloyd's. The significant
items the arbitrator will consider when assessing what to assign as an award
are: (a) the salved value of the vessel and cargo; (b) the skill and efforts of
the salvors in preventing or minimizing damage to the environment and salving
the vessel and other property; (c) the measure of success obtained by the
salvor; (d) the nature and degree of danger; and (e) the time used and expenses
and losses incurred by salvors.

     The time period between when the salvage is completed and the award is
settled or arbitrated can be six months to two years. The Company recognizes
costs as incurred on these LOF contracts. Revenue is recognized to the extent of
costs incurred in order to appropriately match revenues with costs, provided
that the Company has earned the revenue. The Company has historically recovered
at least its costs in substantially all of its prior salvage operations.
Additional revenues in excess of costs incurred are recorded at the time the
final LOF settlement or arbitration award occurs.

  INSURANCE RESERVES

     The Company is self-insured for marine, workers compensation, protection
and indemnity, liability, cargo and asbestos coverages, subject to certain
individual and aggregate stop-loss limits. The Company records its
self-insurance liability based on claims filed and an estimate of claims
incurred but not yet reported. The estimates used by management are based on the
Company's historical experience as well as current facts and circumstances
including those for salvage and subrogation reserves. Reinsurance is obtained to
cover losses in excess of certain limits. Claims receivables are recorded when
it is determined that it is probable the costs of the insured events are
recoverable from the insurance company.

  LITIGATION AND ENVIRONMENTAL RESERVES

     The Company monitors its outstanding litigation (including unasserted
claims) and estimates the expected probable loss (if any) of each claim or
potential claim. If a range of probable loss is determined, the Company records
a reserve at the low end of the range, unless there are indications that another
amount within the range better approximates the expected loss. The determination
of whether a litigation reserve is necessary is based on internal analysis by
management, consultation with the Company's general counsel and, when necessary,
consultations with external counsel. The Company's litigation reserves are a
significant estimate that can and do change based upon management's evaluation
of the Company's existing and potential litigation liabilities.

     The Company is a defendant with respect to numerous maritime asbestos cases
and other toxic tort cases. The Company is neither able to predict the ultimate
outcome of this litigation nor provide an estimate of the amount or range of
potential loss. In addition, the Company is responsible for environmental
remediation relating to contamination of property. Undiscounted liabilities are
recorded when the responsibility for such remediation is considered probable and
the costs can be reasonably estimated. The ultimate future environmental costs,
however, will depend upon the extent of contamination and the future costs of
remediation. The ultimate resolution of these litigation and environmental
liabilities could have a material impact on the Company's financial condition,
results of operations and cash flows. See "Item 3. Legal Proceedings" and Notes
20 and 21 of the Notes to Consolidated Financial Statements in "Item 8.
Financial Statements and Supplementary Data."

                                        30
<PAGE>

RESULTS OF OPERATIONS

  COMPARISON OF CONSOLIDATED RESULTS OF OPERATIONS FOR THE YEARS ENDED DECEMBER
  31, 2005 AND 2004

     The following table sets forth the Company's Consolidated Statements of
Operations for the years ended December 31, 2005 and 2004:

                     CONSOLIDATED STATEMENTS OF OPERATIONS
                    (IN THOUSANDS, EXCEPT PER SHARE AMOUNTS)

<Table>
<Caption>
                                                              YEAR ENDED DECEMBER 31,
                                                              -----------------------
                                                                 2005         2004
                                                              -----------   ---------
<S>                                                           <C>           <C>
Revenues
  Operating revenues........................................  $  997,453    $903,517
  Fuel sales................................................     193,360      86,884
                                                              ----------    --------
                                                               1,190,813     990,401
                                                              ----------    --------
Expenses
  Operating.................................................     854,423     799,215
  Cost of fuel sold.........................................     168,543      71,932
  General and administrative................................      37,293      32,466
  Depreciation and amortization.............................      65,095      62,618
  Asset recoveries, net.....................................     (15,341)     (4,846)
                                                              ----------    --------
                                                               1,110,013     961,385
                                                              ----------    --------
Operating income............................................      80,800      29,016
Other income (expense):
  Interest income...........................................       3,335       1,987
  Interest expense..........................................     (19,635)    (20,165)
  Minority interest in consolidated subsidiaries............         (79)        127
  Other income..............................................       1,368       1,024
                                                              ----------    --------
Income from continuing operations before income taxes.......      65,789      11,989
Income tax expense..........................................     (23,400)     (2,100)
                                                              ----------    --------
Income from continuing operations...........................      42,389       9,889
Discontinued operations:
  Income (loss) from operations, including gain/loss on
     disposal (net of ($2,000) and $9,400 tax expense
     (benefit) in 2005 and 2004, respectively)..............      (3,513)     15,026
                                                              ----------    --------
Net income..................................................      38,876      24,915
Preferred stock dividends...................................      (1,575)     (1,575)
Change in fair value of redeemable common stock.............        (330)         --
                                                              ----------    --------
NET INCOME ATTRIBUTABLE TO COMMON STOCKHOLDERS..............  $   36,971    $ 23,340
                                                              ==========    ========
Basic earnings per common share.............................  $   274.83    $ 172.50
Diluted earnings per common share...........................  $   238.78    $ 154.22
</Table>

     Consolidated operating revenues increased $94.0 million, or 10.4%, to
$997.5 million in 2005 compared with $903.5 million in 2004. This increase was
primarily the result of the following events or circumstances:

     - $51.4 million generated in our Liner Services segment as a result of an
       increase in rates which was partially offset by a decrease in container
       and noncontainer volumes;

                                        31
<PAGE>

     - $14.5 million generated in our Marine Services segment by higher overall
       contract demand and utilization for the tug and barge fleet in the Gulf
       of Mexico, along the U.S. West Coast, and in Alaska;

     - $8.9 million generated in our Marine Services segment from the operations
       of Titan, a marine salvage business acquired in October 2005; and

     - $8.6 million generated in our Logistics Service segment caused by
       continued expansion of warehousing and distribution operations in Central
       America.

     Consolidated fuel sales revenues increased $106.5 million, or 122.6%, to
$193.4 million in 2005 compared with $86.9 million in 2004 due to an increase in
prices and volumes of fuel sold directly by our Petroleum Service segment. The
Company's fuel volume sold increased to 78.2 million gallons during 2005 from
44.1 million gallons during 2004, primarily due to the operations of Northland
Fuel acquired in September 2005.

     Consolidated operating expenses increased $55.2 million, or 6.9%, to $854.4
million in 2005 compared with $799.2 million in 2004. Vessel and
non-vessel-related costs increased by $34.3 million and $13.6 million,
respectively, in 2005 as compared with 2004. The increase in vessel-related
costs was mostly attributable to an increase in fuel and crew costs. The
increase in non-vessel-related costs was mostly attributable to increases in
fuel, terminal, purchased transportation and subcontracting costs. Also, direct
administrative expenses increased $7.3 million in 2005 compared to 2004 as a
result of an increase in administrative payroll expenses primarily as a result
of the acquisition of Northland Fuel.

     Consolidated cost of fuel sold increased $96.6 million to $168.5 million in
2005 compared with $71.9 million in 2004 as the result of higher volumes and
costs of fuel purchased by us for resale. The increase in volume was primarily
due to our acquisition of Northland Fuel in September 2005.

     Consolidated general and administrative expenses increased $4.8 million, or
14.8%, to $37.3 million in 2005 compared with $32.5 million in 2004. This
increase was primarily attributable to an increase in payroll and software
maintenance related costs, which was partially offset by a decrease in
professional fees.

     Consolidated depreciation and amortization expense increased $2.5 million,
or 4.0%, to $65.1 million in 2005 compared with $62.6 million in 2004. This
increase was the result of an increase in depreciation in the amount of $.9
million, dry-dock amortization in the amount of $1.3 million, and an impairment
loss of $.6 million recorded on non-compete agreements in the second quarter of
2005. The increase in depreciation was a result of assets placed in service
during 2005, including those acquired from Northland and Titan, and was
partially offset by a decrease resulting from certain assets that became fully
depreciated. Dry-dock amortization for 17 vessels was $18.7 million in 2005
compared with amortization of $17.4 million for 13 vessels during 2004.

     Consolidated asset recoveries, net increased $10.5 million to a recovery of
$15.3 million in 2005 compared with a recovery of $4.8 million in 2004. The
gains during 2005 resulted from the sale of equipment and twelve vessels. The
gains during 2004 resulted from the sale of equipment, land and 7 vessels. These
gains were partially offset by impairment charges of $1.2 million on 4 vessels
which were taken out of service and held for sale.

     As a result, our consolidated operating income increased $51.8 million to
$80.8 million in 2005 compared with $29.0 million in 2004.

     Due to higher interest rates, interest income increased $1.3 million to
$3.3 million in 2005 compared with $2.0 million in 2004. This increase was
partially offset by a decrease in the average cash and cash equivalents balance
during 2005 compared with 2004.

     Interest expense decreased $.6 million, or 3.0%, to $19.6 million in 2005
compared with $20.2 million in 2004. A $1.0 million increase in interest expense
incurred for certain vessel financings was offset by $2.1 million in higher
capitalized interest during 2005 compared with 2004.

     Income tax expense increased $21.3 million to $23.4 million in 2005
compared with $2.1 million in 2004. The effective tax rate was 35.6% and 17.5%
for 2005 and 2004, respectively. The 2004 effective tax rate was

                                        32
<PAGE>

reduced primarily due to lower vessel repairs which may be capitalized for tax
purposes and favorable Internal Revenue Service ("IRS") court case resolution.
These events did not occur in 2005 resulting in a more normalized effective tax
rate.

     Discontinued operations decreased $18.5 million to a loss of $3.5 million
for 2005 compared with income of $15.0 million for 2004. The loss in 2005 was
primarily due to the sale of a vessel during the fourth quarter that was
considered a component of the Company, as defined by SFAS No. 144. The income in
2004 resulted from the receipt of a termination payment in conjunction with the
sale of a vessel during the fourth quarter of 2004 that was considered a
component of the Company, as defined by SFAS No. 144. The Company received a
payment in the amount of $20.8 million pursuant to the termination of a series
of charters for the vessel.

     As a result, net income attributable to common stockholders increased $13.7
million to $37.0 million ($274.83 basic earnings per common share and $238.78
diluted earnings per common share) for 2005 compared with a net income
attributable to common stockholders of $23.3 million ($172.50 basic earnings per
common share and $154.22 diluted earnings per common share) for 2004.

     The following table sets forth: (a) operating revenues and operating income
for Liner Services, Logistics Services, Marine Services, and Petroleum Services
for the years ended December 31, 2005 and 2004. The Company evaluates the
performance of its reportable segments based upon the operating income of the
segment, excluding other income and expenses (which includes interest income,
interest expense, and minority interest in consolidated subsidiaries) and income
taxes. See the Company's Consolidated Financial Statements in "Item 8. Financial
Statements and Supplementary Data" for further information.

     Included in operating income of all four of our segments are allocations
for corporate services, which include vessel acquisition, engineering services,
accounting, legal, human resources, information technology, insurance services
and purchasing support. Vessel acquisition charges represent an allocation of
the utilized vessels, depreciation and amortization based on intercompany
bareboat charters. Other corporate services are allocated based upon various
assumptions, depending on the type of cost being allocated.

  COMPARISON OF SEGMENT RESULTS OF OPERATIONS FOR THE YEARS ENDED DECEMBER 31,
  2005 AND 2004

                     SEGMENT REVENUES AND OPERATING INCOME
                                 (IN THOUSANDS)

<Table>
<Caption>
                                                              YEAR ENDED DECEMBER 31,
                                                              -----------------------
                                                                 2005         2004
                                                              -----------   ---------
<S>                                                           <C>           <C>
Revenues
  Liner Services............................................  $  639,093    $587,689
  Logistics Services........................................      48,062      38,440
  Marine Services...........................................     183,915     161,426
  Petroleum Services........................................     319,743     202,846
                                                              ----------    --------
Total revenues..............................................   1,190,813     990,401
                                                              ==========    ========
Operating income (loss):
  Liner Services............................................      42,158      23,973
  Logistics Services........................................      (2,127)     (5,811)
  Marine Services...........................................      21,437        (955)
  Petroleum Services........................................      19,332      11,809
                                                              ----------    --------
Total operating income......................................  $   80,800    $ 29,016
                                                              ==========    ========
</Table>

                                        33
<PAGE>

  Liner Services

     Operating revenues from our Liner Services segment increased $51.4 million,
or 8.7%, to $639.1 million in 2005 compared with $587.7 million in 2004. The
increase was primarily attributable to a 9.5% increase in average revenue per
twenty-foot equivalent, or TEU ("average revenue"), which was partially offset
by a decrease of .7% in container and noncontainer volume. The average revenue
increase was a result of: (a) rate increases for our services between the United
States and Puerto Rico and between the United States and certain Caribbean
Islands and the Bahamas; and (b) increases in fuel surcharges in both the Puerto
Rico and Caribbean Islands Services and Latin America Services. The Company's
container and noncontainer volume decreased to 595,546 TEUs during 2005 from
599,693 TEUs during 2004.

     Operating expenses for our Liner Services segment increased $35.3 million,
or 6.6%, to $571.9 million in 2005 compared with $536.6 million in 2004. Vessel
and non-vessel-related expenses increased $26.1 million and $11.6 million,
respectively, during 2005 compared with 2004.

     Vessel-related expenses consist primarily of fuel, vessel maintenance and
repairs, crew and charter costs, while non-vessel expenses consist primarily of
costs for labor, facilities, purchased transportation, terminal, port charges,
equipment, rent and equipment repairs and maintenance. Direct administrative
expenses decreased $2.4 million in 2005 compared to 2004 primarily as a result
of decreased insurance charges.

     Depreciation and amortization for our Liner Services segment increased $2.9
million, or 25.9%, to $14.1 million in 2005 compared with $11.2 million in 2004.
Depreciation increased by $.9 million as a result of assets placed in service
during 2005. Dry-dock amortization increased $1.9 million as a result of
amortizing dry-dock costs for 9 vessels during each of 2005 and 2004. The cost
of drydocking 4 vessels in 2005 was $2.9 million higher than the cost of
dry-docking three vessels in 2004, resulting in higher amortization in 2005
compared with 2004.

     Asset recoveries, net for our Liner Services segment increased $3.8 million
to $4.5 million in 2005 compared with $.7 million in 2004. The gains during 2005
and 2004 resulted from disposals of equipment.

     As a result, the operating income from our Liner Services segment increased
$18.2 million to $42.2 million in 2005 compared with $24.0 million in 2004.

  Logistics Services

     Operating revenues from our Logistics Services segment increased $9.7
million, or 25.3%, to $48.1 million in 2005 compared with $38.4 million in 2004.
The increase was primarily attributable to an increase of $8.6 million due to
the continued expansion of warehousing and distribution operations in Central
America.

     Operating expenses for our Logistics Services segment increased $5.6
million, or 13.7%, to $46.5 million in 2005 compared with $40.9 million in 2004.
The increase was mostly due to an increase in purchased transportation to
support the continued expansion of warehousing and distribution operations in
Central America.

     As a result, the operating loss from our Logistics Services segment
decreased $3.7 million to $2.1 million in 2005 compared with $5.8 million in
2004.

  Marine Services

     Operating revenues from our Marine Services segment increased $22.5
million, or 13.9%, to $183.9 million in 2005 compared with $161.4 million in
2004. The increase in revenue is attributed to: (a) $8.9 million generated from
the operations of Titan, a marine salvage business acquired in October 2005; (b)
$3.1 million generated by an increase in rates directly attributable to a fuel
surcharge to cover rising fuel prices; (c) $5.0 million generated by our ship
management operations due to higher rates and increased levels of activity; and
(d) $14.5 million generated by higher overall contract demand and utilization
for the tug and barge fleet in the Gulf of Mexico, along the U.S. West Coast,
and in Alaska. These increases were partially offset by a decrease of: (a) $5.2
million in revenues caused by reduced activity in our Northern Alaskan land

                                        34
<PAGE>

operations; and (b) $6.5 million in revenues caused by a decrease in scope of
operations in Far East Russia. Overall vessel utilization increased to 62%
during 2005 compared with 59% during 2004.

     Operating expenses for our Marine Services segment increased $15.6 million,
or 8.3%, to $202.5 million in 2005 compared with $186.9 million in 2004. A net
increase of $16.0 million in vessel-related expenses during 2005 compared with
2004 primarily resulted from: (a) higher fuel and labor costs arising from
vessels chartered, at cost, to our Puerto Rico and Caribbean Islands Service;
(b) overall increases in fuel costs due to increased fuel prices and higher
utilization; and (c) increases in crew costs due to higher vessel utilization.
These increases in vessel expenses were partially offset by a decrease in vessel
repairs and maintenance due to a reduction in the number of vessels that were
dry-docked. A net decrease of $3.2 million in non-vessel expenses primarily
resulted from a reduction in operating materials and payroll-related costs due
to seasonal operations and changes in project work and partially offset by an
increase in subcontracting costs. Direct administrative expenses increased $2.8
million in 2005 compared to 2004 primarily as a result of increased insurance
charges.

     Asset recoveries, net for our Marine Services segment increased $6.1
million to a recovery of $10.3 million in 2005 compared with $4.2 million in
2004. The gains during 2005 resulted from the sale of 11 vessels and equipment.
During 2004, a gain of $4.5 million resulted from the sale of 5 vessels and land
improvements, which was partially offset by a $1.2 million writedown on 4
vessels.

     As a result, the operating income from our Marine Services segment
increased by $22.4 million to operating income of $21.4 million in 2005 compared
with an operating loss of $1.0 in 2004.

  Petroleum Services

     Operating revenues from our Petroleum Services segment increased $10.5
million, or 9.1%, to $126.4 million in 2005 compared with $115.9 million in
2004. The increase was primarily attributable to: (a) $5.9 million generated by
an increase in rates as a result of backhaul activity on the U.S. East Coast;
and (b) $3.5 million generated by increased rates and demand for oil
transportation services on the U.S. West Coast.

     Fuel sales revenues from our Petroleum Services segment increased $106.5
million, or 122.6%, to $193.4 million in 2005 compared with $86.9 million in
2004 due to an increase in prices and volumes of fuel sold directly by our
Petroleum Service segment. The Company's fuel volume sold increased to 78.2
million gallons during 2005 from 44.1 million gallons during 2004 primarily due
to the operations of Northland Fuel acquired in September 2005.

     Operating expenses for our Petroleum Services segment increased $11.9
million, or 12.0%, to $110.9 million in 2005 compared with $99.0 million in
2004. Vessel and non-vessel-related expenses increased $2.0 million and $3.9
million, respectively, during 2005 as compared with 2004. These increases are
attributable to an increase in the size of the vessel fleet as a result of
vessels acquired as part the acquisition of Northland Fuel. Vessel-related
expenses consist primarily of fuel, crew, vessel maintenance and repairs and
charter costs, while non-vessel expenses consist primarily of costs for labor,
facilities, purchased transportation and port charges and related costs. Direct
administrative expenses increased $6.0 million in 2005 compared to 2004
primarily as a result of the acquisition of Northland Fuel.

     Cost of fuel sold for the Petroleum Services segment increased $96.6
million to $168.5 million in 2005 compared with $71.9 million in 2004 as the
result of higher volumes and costs of fuel purchased by us for resale. The
increase in volume was primarily due to our acquisition of Northland Fuel in
September 2005.

     Depreciation and amortization for our Petroleum Services segment increased
$.8 million, or 5.1%, to $16.5 million in 2005 compared with $15.7 million in
2004. The increase was primarily attributable to a $1.3 million increase in
depreciation. The increase in depreciation was a result of depreciation recorded
on assets placed in service during 2005 and assets acquired as a result of the
Northland Fuel acquisition during the third quarter of 2005. This increase was
partially offset by a $.6 million decrease in dry-dock amortization for vessels.
Dry-dock costs for 8 vessels were amortized during 2005 and 4 vessels were
amortized during 2004.

                                        35
<PAGE>

     Asset recoveries, net for our Petroleum Services segment increased $.6
million in 2005 compared with 2004. Asset recoveries during 2005 resulted from
the sale of one vessel and equipment.

     As a result, the operating income from our Petroleum Services segment
increased $7.5 million to $19.3 million in 2005 compared with $11.8 in 2004.

  COMPARISON OF CONSOLIDATED RESULTS OF OPERATIONS FOR THE YEARS ENDED DECEMBER
  31, 2004 AND 2003

     The following table sets forth the Company's Consolidated Statements of
Operations for the years ended December 31, 2004 and 2003:

                     CONSOLIDATED STATEMENTS OF OPERATIONS
                    (IN THOUSANDS, EXCEPT PER SHARE AMOUNTS)

<Table>
<Caption>
                                                              YEAR ENDED DECEMBER 31,
                                                              -----------------------
                                                                 2004         2003
                                                              ----------   ----------
<S>                                                           <C>          <C>
Revenues
  Operating revenues........................................   $903,517     $883,440
  Fuel sales................................................     86,884       76,340
                                                               --------     --------
                                                                990,401      959,780
                                                               --------     --------
Expenses
  Operating.................................................    799,215      773,582
  Cost of fuel sold.........................................     71,932       65,106
  General and administrative................................     32,466       31,447
  Depreciation and amortization.............................     62,618       57,760
  Asset recoveries, net.....................................     (4,846)      (5,383)
                                                               --------     --------
                                                                961,385      922,512
                                                               --------     --------
Operating income............................................     29,016       37,268
Other income (expense):
  Interest income...........................................      1,987          354
  Interest expense..........................................    (20,165)     (19,729)
  Minority interest in consolidated subsidiaries............        127        1,721
  Other income..............................................      1,024          115
                                                               --------     --------
Income from continuing operations before income taxes.......     11,989       19,729
Income tax expense..........................................     (2,100)      (7,700)
                                                               --------     --------
Income from continuing operations...........................      9,889       12,029
Discontinued operations:
  Income from operations, including loss on disposal (net of
     $9,400 and $300 tax expense in 2004 and 2003,
     respectively)..........................................     15,026        1,212
                                                               --------     --------
Income before cumulative effect of change in accounting
  principle.................................................     24,915       13,241
Cumulative effect of change in accounting principle, net of
  tax benefit of $257.......................................         --         (420)
                                                               --------     --------
Net income..................................................     24,915       12,821
Preferred stock dividends...................................     (1,575)      (1,575)
                                                               --------     --------
NET INCOME ATTRIBUTABLE TO COMMON STOCKHOLDERS..............   $ 23,340     $ 11,246
                                                               ========     ========
Basic earnings per common share.............................   $ 172.50     $  82.87
Diluted earnings per common share...........................   $ 154.22     $  79.17
</Table>

                                        36
<PAGE>

     Consolidated revenues in 2004 increased $30.6 million, or 3.2%, to $990.4
million compared with $959.8 million in 2003. This increase was the result of
the following events or circumstances:

     - $43.5 million from our Liner Services segment as a result of an increase
       in rates and container and noncontainer volume;

     - $9.5 million generated by a transportation management company
       specializing in the apparel industry that was acquired in 2003 by our
       Logistics Services;

     - $10.6 million generated in our Petroleum Services segment from direct
       sales of fuel as the result of higher prices that was partially offset by
       lower volumes sold;

     - $12.8 million generated in our Marine Services segment by the vessel
       mobilization and transportation of oil exploration cargo in Far East
       Russia and Korea; and

     - $6.0 million generated in our Marine Services segment by increased
       government and commercial contract activity in the Gulf of Mexico and
       United States west coast.

     These increases were partially offset by decreases in revenues which
resulted from the following events or circumstances:

     - $36.7 million from fewer vessels operating in our Petroleum Services
       segment as a result of vessels being sold or dry-docked;

     - $7.4 million in our Petroleum Services segment as a result of reduced
       demand for oil transportation services on the U.S. West Coast; and

     - $9.0 million in our Marine Services segment from reduced activity in our
       Northern Alaskan marine and land operations.

     Consolidated operating expenses increased $25.6 million in 2004, or 3.3%,
to $799.2 million compared with $773.6 million in 2003. This increase in
consolidated operating expenses was primarily caused by:

     - $14.2 million in vessel-related costs and $19.6 million in non-vessel
       costs from our Liner Services segment as a result of an increase in
       container and noncontainer volume;

     - $10.7 million attributable to the operations of a transportation
       management company specializing in the apparel industry that we acquired
       in 2003 by our Logistics Services segment;

     - $4.4 million in vessel-related costs and $2.1 million in non-vessel costs
       due to changes in project work, mostly within our Far East Russia and
       Northern Alaska operations in our Marine Services segment; and

     - $6.3 million for a payment made by the Company during the second quarter
       of 2004 to settle certain asbestos-related claims.

     These increases were partially offset by decreased operating expenses of:

     - $37.0 million in vessel-related expenses as a result of reduced demand
       for oil transportation activities on the U.S. West Coast and fewer
       vessels operating in the Petroleum Services as a result of vessels being
       sold or dry-docked.

     Consolidated cost of fuel sold increased $6.8 million, or 10.4%, to $71.9
million in 2004 compared with $65.1 million in 2003. This increase was
attributable to higher fuel prices for fuel purchased for our direct fuel sales
that was partially offset by a decrease in volume sold.

     Consolidated general and administrative expenses increased $1.1 million, or
3.5%, to $32.5 million in 2004 compared with $31.4 million in 2003. This
increase is primarily attributable to a $.6 million increase in payroll related
costs and a $.4 million increase in insurance costs related to split-dollar
insurance and director life insurance policies.

                                        37
<PAGE>

     Consolidated depreciation and amortization expense increased $4.8 million,
or 8.3%, to $62.6 million in 2004 compared with $57.8 million in 2003. This
increase is the result of an increase in dry-dock amortization in the amount of
$8.4 million and a $.4 million impairment loss recorded on a non-compete
agreement during 2004 and was partially offset by a decrease in depreciation of
$4.2 million. Dry-dock costs for 13 vessels were amortized in 2004 compared with
10 vessels in 2003. The decrease in depreciation was mostly caused by lower
depreciation expense due to a reduction in the number of vessels in service.

     Consolidated asset recoveries, net decreased $.6 million, or 11.1%, to a
recovery of $4.8 million in 2004 compared with a recovery of $5.4 million in
2003. During 2004, gains of $6.1 million resulted from the sale of equipment,
land and 7 vessels. These gains were partially offset by impairment charges of
$1.2 million on 4 vessels which were taken out of service and held for sale.
During 2003, gains of $5.7 resulted from the sale of equipment, land, land
improvements and 10 vessels, which was partially offset by a $.3 million
writedown of vessel improvements.

     As a result, our consolidated operating income decreased $8.3 million, or
22.3% to $29.0 million in 2004 compared with $37.3 million in 2003.

     Due to an increase in the Company's average cash and cash equivalent
amounts on hand and higher interest rates in 2004, interest income increased
$1.6 million to $2.0 million in 2004 compared with $.4 million in 2003.

     Interest expense increased $.5 million, or 2.5%, to $20.2 million in 2004
compared with $19.7 million in 2003. This increase was due to a $1.1 million
increase in interest expense incurred for vessel financings which was partially
offset by a decrease of $.4 million in interest expense on our Revolving Credit
Agreement. There were no borrowings under the Revolving Credit Agreement during
2004.

     Minority interest in consolidated subsidiaries decreased $1.6 million to
$.1 million in 2004 compared with $1.7 million in 2003. This decrease is due to
the Company's acquisition in December 2003 of the remaining 25% interest in a
joint venture in which it previously owned a 75% interest.

     Other income increased $.9 million to $1.0 million in 2004 compared with
$.1 million in 2003 due to income earned on investments of the Company's
deferred compensation plan. The investments are classified as trading securities
in accordance with SFAS No. 115 "Accounting for Certain Investments in Debt and
Equity Securities."

     Income tax expense decreased $5.6 million, to $2.1 million in 2004 compared
with $7.7 million in 2003. The effective tax rate was 17.5% for 2004 and 39.0%
for 2003. The decrease in the effective tax rate is due to reduced vessel
repairs which may be capitalized for tax purposes and favorable IRS court case
resolution.

     Discontinued operations increased $13.8 million to income of $15.0 million
in 2004 from $1.2 million in 2003. This increase was due to the sale of a vessel
that was considered a component of the Company, as defined by SFAS No. 144. The
Company received a payment in the amount of $20.8 million pursuant to the
termination of a series of charters for the vessel.

     As a result, net income attributable to common stockholders increased $12.1
million to $23.3 million ($172.50 basic earnings per common share and $154.22
diluted earnings per common share) in 2004 compared with $11.2 million ($82.87
basic earnings per common share and $79.17 diluted earnings per common share) in
2003.

                                        38
<PAGE>

     The following table sets forth operating revenues and operating income for
Liner Services, Logistics Services, Marine Services, and Petroleum Services for
the years ended December 31, 2004 and 2003.

  COMPARISON OF SEGMENT RESULTS OF OPERATIONS FOR THE YEARS ENDED DECEMBER 31,
  2004 AND 2003

                     SEGMENT REVENUES AND OPERATING INCOME
                                 (IN THOUSANDS)

<Table>
<Caption>
                                                              YEAR ENDED DECEMBER 31,
                                                              -----------------------
                                                                 2004         2003
                                                              ----------   ----------
<S>                                                           <C>          <C>
Revenues
  Liner Services............................................   $587,689     $544,196
  Logistics Services........................................     38,440       27,372
  Marine Services...........................................    161,426      151,548
  Petroleum Services........................................    202,846      236,664
                                                               --------     --------
Total revenues..............................................    990,401      959,780
                                                               ========     ========
Operating income (loss)
  Liner Services............................................     23,973       25,039
  Logistics Services........................................     (5,811)      (5,505)
  Marine Services...........................................       (955)      (3,248)
  Petroleum Services........................................     11,809       20,982
                                                               --------     --------
Total operating income                                         $ 29,016     $ 37,268
                                                               ========     ========
</Table>

  Liner Services

     Revenues from our Liner Services segment increased $43.5 million, or 8.0%,
to $587.7 million in 2004 compared with $544.2 million in 2003. The increase is
primarily attributable to a 3.0% increase in container and noncontainer volume
and a 4.8% increase in average revenue. The Company's container and noncontainer
volume increased to 599,693 TEUs during 2004 from 581,955 TEUs during 2003 due
to: (a) a service from the United States to Haiti which commenced operation
during the third quarter of 2003; and (b) growth in our Central America-Gulf
service. The average revenue increase was a result of: (a) rate increases for
our services between the United States and Puerto Rico and between the United
States and certain Caribbean Islands and the Bahamas; and (b) increases in fuel
surcharges.

     Operating expenses for our Liner Services segment increased $43.6 million,
or 8.8%, to $536.6 million in 2004 compared with $493.0 million in 2003. An
increase in container and noncontainer volume and growth in our service to Haiti
and our Central America-Gulf service generated an increase of $14.2 million in
vessel and $19.6 million in non-vessel-related expenses. Vessel-related expenses
consist primarily of fuel, vessel maintenance and repairs, crew and charter
costs, while non-vessel expenses consist primarily of costs for labor,
facilities, purchased transportation, terminal, port charges, equipment, and
equipment maintenance and repairs. Allocation of certain costs arising from the
settlement in 2004 of certain asbestos-related claims resulted in an increase of
$4.0 million of operating expenses in 2004 compared with 2003.

     Depreciation and amortization for our Liner Services segment increased $1.7
million, or 17.9%, to $11.2 million in 2004 compared with $9.5 million in 2003.
The increase was directly attributable to a $2.0 million increase in dry-dock
amortization. Liner Services amortized dry-dock costs for 9 vessels during the
year ended December 31, 2004 compared with 6 vessels during the year ended
December 31, 2003.

     Asset recoveries, net for our Liner Services segment decreased $.3 million,
or 30.0%, to $.7 million in 2004 compared with $1.0 million in 2003. The gains
of $.7 million resulted from disposals of equipment during

                                        39
<PAGE>

the year ended December 31, 2004 and the gains of $1.0 million resulted from the
disposals of two vessels and equipment during the year ended December 31, 2003.

     As a result, the operating income from our Liner Services segment decreased
$1.0 million to $24.0 million in 2004 compared with $25.0 million in 2003.

  Logistics Services

     Revenues from our Logistics Services segment increased $11.0 million, or
40.1%, to $38.4 million in 2004 compared with $27.4 million in 2003. This
increase resulted from: (a) an increase of $2.3 million generated by our
expanding warehousing and distribution operations in Central America; and (b)
$9.5 million of revenue generated by a transportation management company
specializing in the apparel industry that we purchased in July 2003.

     Operating expenses for our Logistics Services segment increased $10.4
million, or 34.1%, to $40.9 million in 2004 compared with $30.5 million in 2003.
This increase resulted from $10.7 million incurred by a transportation
management company specializing in the apparel industry purchased in July 2003.

     Depreciation and amortization for our Logistics Services segment increased
$.8 million to $1.6 million in 2004 compared with $.8 million in 2003. The
increase was directly attributable to a $.4 million impairment loss recorded on
a non-compete agreement during 2004.

     As a result, the operating loss from Logistics Services segment increased
$.3 million to $5.8 million in 2004 compared with $5.5 million in 2003.

  Marine Services

     Revenues from our Marine Services segment increased $9.9 million, or 6.5%,
to $161.4 million in 2004 compared with $151.5 million for 2003. The increase
was directly attributable to an increase in 2004 revenues of: (a) $12.8 million
from vessel mobilization and transportation of oil exploration cargo in Far East
Russia and Korea; (b) $6.0 million generated by increased government and
commercial contract activity in the Gulf of Mexico and United States west coast;
and (c) a $2.1 million increase in rates, most of which was attributable to a
fuel surcharge to cover rising fuel prices. This increase was partially offset
by reduced 2004 revenues of: (a) $9.0 million caused by reduced activity in our
Northern Alaskan marine and land operations; and (b) $1.8 million from a
decrease in tug volumes, largely as a result of decreased tanker volumes in the
Puget Sound, Washington. Overall vessel utilization increased to 59% in 2004
compared to 57% in 2003.

     Operating expenses for our Marine Services segment increased $16.2 million,
or 9.5%, to $186.9 million during 2004 compared with $170.7 million in 2003.
Vessel-related costs, such as crew, fuel repairs and maintenance and charter
costs, increased by $10.9 million. Included in this increase was $6.5 million
resulting from vessels chartered, at cost, by our Marine Services segment to our
Puerto Rico and Caribbean Islands Liner Service. Non-vessel expenses increased
$2.1 million, including an increase in operating materials, contracted services
and payroll-related costs due to changes in project work and a decrease in
property taxes.

     Depreciation and amortization for our Marine Services segment decreased
$1.3 million, or 10.7%, to $10.9 million during 2004 compared with $12.2 million
during 2003. The decrease was the result of a reduction in depreciation in the
amount of $1.0 million due to fewer vessels in service and a $.3 million
depreciation adjustment made for a vessel placed in service during the first
quarter of 2003 that was previously classified as held for sale.

     Asset recoveries, net for our Marine Services segment increased $1.6
million, or 61.5%, to a recovery of $4.2 million in 2004 as compared with $2.6
million in 2003. During 2004, a gain of $4.5 million resulted from the sale of 5
vessels and land improvements, which was partially offset by a $1.2 million
writedown on 4 vessels. During 2003, a gain of $2.9 million resulted from the
sale of 5 vessels and land improvements, which were partially offset by a $.3
million writedown of vessel improvements.

     As a result, the operating loss from our Marine Services segment decreased
$2.2 million to $1.0 million for 2004 compared with $3.2 million in 2003.

                                        40
<PAGE>

  Petroleum Services

     Revenues from our Petroleum Services segment decreased $33.9 million, or
14.3%, to $202.8 million in 2004 compared with $236.7 million for 2003. The
decrease is directly attributable to: (a) a $7.4 million decrease in revenues
caused by reduced demand for oil transportation services on the U.S. West Coast;
and (b) a $36.7 million decrease in revenues caused by the absence of certain
vessels in 2004 (either due to sale or drydocking of the vessels) that were in
service during 2003. This decrease was partially offset by a $10.6 million
increase in revenues generated from direct sales of fuel as the result of higher
prices and the replacement of one large customer lost with new customers.
Overall vessel utilization decreased to 64% in 2004 compared to 69% in 2003.

     Operating expenses for our Petroleum Services segment decreased $36.3
million, or 26.8%, to $99.0 million during 2004 compared with $135.3 million
during 2003. This decrease is primarily attributable to decreased vessel costs,
including decreases in fuel, crew, and vessel maintenance and repair costs and
increases in charter hire costs. Overall vessel costs decreased due to the
absence of certain vessels in 2004 (either due to sale or drydocking of the
vessels) that were in service during 2003.

     Cost of fuel sold for our Petroleum Services segment increased $6.8
million, or 10.4%, to $71.9 million in 2004 compared with $65.1 million in 2003.
This increase was attributable to higher fuel prices for fuel purchased for our
direct fuel sales and additional volume from new customers and was partially
offset by a decrease in volume sold due to the loss of one large customer.

     Depreciation and amortization for our Petroleum Services segment increased
$4.2 million, or 36.5%, to $15.7 million during 2004 compared with $11.5 million
during 2003. The increase was directly attributable to a $7.2 million increase
in dry-dock amortization for vessels and was partially offset by a decrease in
depreciation of $3.0 million. A decrease in depreciation was caused by the
disposal of vessels during 2003. Dry-dock costs for 4 vessels were amortized
during each of the years ended December 31, 2004 and 2003. The cost of
drydocking three vessels in 2003 was $15.7 million higher than the cost of
dry-docking one vessel in 2004, resulting in higher amortization in 2004
compared with 2003.

     Asset recoveries, net for our Petroleum Services segment decreased $1.8
million during 2004 compared with 2003 due to the sale of three vessels and land
during 2003.

     As a result, the operating income from Petroleum Services segment decreased
$9.2 million to $11.8 million in 2004 compared with $21.0 million for 2003.

LIQUIDITY AND CAPITAL RESOURCES

  LIQUIDITY

     The Company's ongoing liquidity requirements arise primarily from its need
to fund working capital, to acquire, construct, or improve equipment, to make
acquisitions of businesses and other investments and to service debt. Management
believes that cash flows from operations and available borrowings will provide
sufficient working capital to fund the Company's operating needs and to finance
capital expenditures during the next twelve months. In 2005 and previous years,
the Company has used Title XI and bank financing for the acquisition,
construction and improvement of vessels. Of the Company's $356.1 million
long-term debt as of December 31, 2005: (a) $184.7 million of the Company's
outstanding indebtedness is guaranteed by the United States government pursuant
to Title XI (which obligation by the United States government does not release
the Company from its primary liability for the repayment of this indebtedness);
and (b) $141.7 million of the Company's outstanding indebtedness has been
provided by commercial banks. Management believes that funds needed for the
acquisition and construction of vessels and the acquisitions of businesses will
continue to be: (a) available through financings; (b) partially generated from
continuing operations; and (c) partially generated by the proceeds from the
regular disposition of older assets as the Company continues to modernize its
fleet. The Company generated proceeds from the disposition of assets of $30.9
million in 2005.

                                        41
<PAGE>

  Financial Condition as of December 31, 2005

     As of December 31, 2005, the Company had cash and cash equivalents of $33.9
million compared with $142.9 million at December 31, 2004. The Company generated
$113.9 million of cash from continuing operations during the year ended December
31, 2005. Net income from continuing operations before income taxes and
depreciation and amortization expense provided $130.9 million of cash. As a
result of the CCF accrued deposit for $41.0 million and the acquisition of
Northland Fuel and Titan, which required $103.4 million in cash, the Company's
working capital has decreased $119.7 million to $43.9 million at December 31,
2005 from $163.6 million at December 31, 2004. The other significant changes in
working capital are increases of $30.5 million in Receivables, net, $21.1
million in Inventory and $25.7 million in Accounts Payable and Accrued Expenses.
As a result of this decrease in working capital, the Company had borrowed $10.0
million under its Revolving Credit Agreement as described below.

     The Company used $197.5 million of cash for investing activities from
continuing operations during the year ended December 31, 2005. The Company has
paid $103.4 million, net of cash acquired for the purchase of Northland Fuel and
Titan. The Company expended $114.0 million for the construction of vessels and
the purchase of equipment. Proceeds of $30.9 million were received from asset
dispositions. Dry-docking costs of $8.7 million were incurred for 8 vessels
during the year ended December 31, 2005. During 2005, the Company deposited a
net of $.6 million of restricted cash consisting of: (a) deposits of $5.9
million for the operation of vessels that the Company manages for third parties;
and (b) withdrawals of $4.2 million from the Company's capital construction fund
and $1.1 million of escrowed Title XI Funds. These withdrawals were to reimburse
the Company for qualifying expenditures.

     The Company used cash of $26.0 million in financing activities from
continuing operations during the year ended December 31, 2005 for the following
purposes: (a) $32.8 million for scheduled principal payments of the Company's
debt; (b) $1.6 million for the payment of preferred stock dividends; and (c)
$1.6 million for the retirement of the Company's stock. As of December 31, 2005,
the Company has borrowed $10.0 million against its Revolving Credit Agreement
for working capital purposes. During the second quarter of 2005, the Company
issued $1.4 million of common stock to an Employee Stock Ownership Plan
("ESOP"), the proceeds of which were funded by a $1.4 million loan by the
Company to the ESOP.

     Net cash used by discontinued operations was $.6 million in 2005. As
further discussed in Note 4 of the Notes to Consolidated Financial Statements in
"Item 8. Financial Statements and Supplementary Data," in November 2005, the
Company sold a vessel that was a component of the Company, as defined in SFAS
No. 144, Accounting for the Impairment or Disposal of Long-Lived Assets, for
$4.2 million.

  Financial Condition as of December 31, 2004

     As of December 31, 2004, the Company had cash and cash equivalents of
$142.9 million compared with $158.8 million at December 31, 2003. The Company
generated $73.0 million of cash from continuing operations during the year ended
December 31, 2004. The net income from continuing operations before depreciation
and amortization expense and taxes provided $74.6 million of cash.

     The Company used $34.4 million of cash for investing activities from
continuing operations during the year ended December 31, 2004. Also during 2004,
the Company expended $27.6 million for the construction of vessels and the
purchase of equipment. Proceeds of $8.2 million were received in 2004 from asset
dispositions. Dry-docking costs of $11.8 million were incurred for 4 vessels
during the year ended December 31, 2004. Also during 2004, the Company was
reimbursed $1.9 million in escrowed Title XI funds used to pay certain
expenditures related to the construction of our ATB's that were placed in
service during 2003 and 2004. In November 2004, the Company invested $1.0
million in a joint venture which is accounted for under the equity method. The
Company also loaned $2.3 million to the joint venture. The Company paid $2.2
million for life insurance premiums for a director during 2004.

     In 2004, the Company used cash of $44.5 million in financing activities
from continuing operations for: (a) $41.2 million of principal payments of the
Company's debt; (b) $.8 million payments of debt issuance costs; (c) $1.6
million payment of preferred stock dividends; and (d) $.9 million retirement of
the Company's

                                        42
<PAGE>

stock. All of the principal payments were scheduled except for the redemption of
$10.4 million of Title XI bonds associated with two of the Company's vessels.

     Net cash used by discontinued operations was $9.9 million in 2004. In
February 2004, the Company sold its Logistics operations based in Venezuela for
$1.5 million. As further discussed in Note 3 of the Notes to Consolidated
Financial Statements in "Item 8. Financial Statements and Supplementary Data,"
in November 2004, the Company and the charterer of a vessel entered into a
termination agreement of various bareboat charters. Pursuant to the termination
agreement and the bareboat charters, the Company received a payment of
approximately $20.8 million in November of 2004. Simultaneously with the receipt
of this payment, the Company: (a) paid 100% of the outstanding debt associated
with the vessel in the amount of $10.4 million; and (b) sold the vessel to an
unrelated third party for $8.8 million.

  CAPITAL RESOURCES

     The following schedule summarizes contractual obligations and other
contractual commitments as of December 31, 2005:

<Table>
<Caption>
                                                   PAYMENTS DUE BY PERIOD
                                  --------------------------------------------------------
CONTRACTUAL OBLIGATIONS            TOTAL       2006     2007-2008   2009-2010   THEREAFTER
-----------------------           --------   --------   ---------   ---------   ----------
                                                       (IN THOUSANDS)
<S>                               <C>        <C>        <C>         <C>         <C>
Long-term debt..................  $356,112   $ 33,426   $ 69,514    $ 96,827     $156,345
Interest on long-term debt......   145,995     20,364     35,040      23,389       67,202
Operating leases................   174,565     56,693     64,700      25,111       28,061
Acquisitions(1).................     5,100      5,100         --          --           --
Other contractual
  commitments(2)................   245,915    114,350    130,998         567           --
                                  --------   --------   --------    --------     --------
Total contractual obligations...  $927,687   $229,933   $300,252    $145,894     $251,608
                                  ========   ========   ========    ========     ========
</Table>

---------------

(1) On January 1, 2006, the Company acquired all of the stock of Columbus
    Distributing, Inc. and Ev-Jo, Inc. (collectively "CDI"), a fuel distribution
    business in Alaska for $5.1 million cash.

(2) Other contractual commitments are related to remaining spending on the
    construction of 6 vessels, the purchase of equipment and two vessels,
    leasehold improvements under an operating lease, software maintenance
    agreements and minimum purchased transportation.

     The Company charters certain vessels and leases certain property to third
parties under long-term commitments. A summary of future lease receipts are
summarized as follows:

<Table>
<Caption>
                                                    PAYMENTS DUE BY PERIOD
                                  -----------------------------------------------------------
LEASE RECEIPTS                     TOTAL      2006      2007-2008     2009-2010    THEREAFTER
--------------                    --------   -------   -----------   -----------   ----------
                                                        (IN THOUSANDS)
<S>                               <C>        <C>       <C>           <C>           <C>
Lease receipts..................  $293,090   $97,456    $125,551       $70,083       $  --
</Table>

<Table>
<Caption>
                                           AMOUNT OF COMMITMENT EXPIRATION PER PERIOD
                                   ----------------------------------------------------------
OTHER COMMERCIAL COMMITMENTS        TOTAL     2006      2007-2008     2009-2010    THEREAFTER
----------------------------       -------   -------   -----------   -----------   ----------
                                                         (IN THOUSANDS)
<S>                                <C>       <C>       <C>           <C>           <C>
Standby letters of credit........  $34,338   $15,070       $50         $19,218       $  --
</Table>

     The Company sponsors the Stock Savings Plan (the "SSP"), a profit sharing
plan which held 4,075 shares of our common stock at December 31, 2005, all of
which are fully vested. Upon distribution of common stock from the SSP, each
share of common stock contains a put option which provides the participants the
option to sell their stock to the Company upon retirement, death or after a
break in service at the common stock's fair value (based on a marketable
minority basis), determined by an independent appraisal as of the preceding
calendar year-end. Effective January 1, 2005, the Company began sponsoring the
Crowley Maritime Corporation Employee Stock Ownership Plan (the "ESOP"). In June
2005, the ESOP was funded with a $1.4 million loan from the Company that is to
be repaid by the ESOP over a ten year period plus 5% interest. The ESOP used the
loan to purchase 1,000 shares of common stock from the Company. The

                                        43
<PAGE>

ESOP releases shares of common stock for allocation to eligible employees over
the remaining term of the ESOP loan based on the amount of principal paid by the
ESOP. Eligible employees of the Company are vested in their allocated shares
after five years of service, beginning January 1, 2005. Each share of common
stock held by the ESOP contains a put option which, upon distribution of the
common stock to a participant, entitles the participant to put the common stock
to the Company for the fair value, as defined by the ESOP.

     The common stock of both the SSP and ESOP are classified as redeemable
common stock in the Company's Consolidated Balance Sheets with a balance of $8.2
million at December 31, 2005. Since the eligible employees can put their shares
to the Company, at times defined by the SSP and ESOP, the Company is unable to
determine when it will be obligated to fund the put of these shares.

     Because many of the tugs and barges and our tankers and integrated tug
barge units used in Petroleum Services are more than two-thirds through their
estimated useful lives, management plans to continue its efforts to modernize
the Company's fleet of vessels. Also, as discussed in Government Regulations
under "Item 1. Business," federal law and regulations currently require the
phase-out of single hull oil barges and of single hull tankers. This requires
several single hull oil barges, tankers and integrated tug/barge units to be
subject to retirement within the next ten years. Accordingly, the Company is
consulting with its customers and developing plans, where justified by business
prospects, either to refurbish the existing fleet of tugs, barges and tankers,
thereby extending their useful lives, or to purchase used equipment or build new
equipment which complies with current federal law and regulations.

     During 2004 and 2005, the Company entered into contracts for the
construction of 6 ATBs at an aggregate cost of approximately $276.5 million
(including the cost of owner-furnished equipment). The units are currently under
construction and two units are expected to be delivered during each of 2006,
2007 and 2008. The Company is currently paying for the construction of these
vessels with available working capital. The Company is currently evaluating
various options for the financing of these vessels.

     For information concerning our debt, including our revolving credit
agreement and certain borrowings which we made in 2005, see Note 15 of the Notes
to Consolidated Financial Statements in "Item 8. Financial Statements and
Supplementary Data."

     The Company is responsible for environmental remediation on twelve
properties. The Company has estimated its cost of remediation to be $3.9 million
at December 31, 2005. The estimated payments for this liability is as follows:

<Table>
<Caption>
                                                         PAYMENTS BY PERIOD
                                         --------------------------------------------------
                                         TOTAL    2006   2007-2008   2009-2010   THEREAFTER
                                         ------   ----   ---------   ---------   ----------
                                                           (IN THOUSANDS)
<S>                                      <C>      <C>    <C>         <C>         <C>
Environmental costs....................  $3,874   $905    $1,273       $576        $1,120
</Table>

     For more information on environmental costs, see Government Regulation in
"Item 1. Business" and Notes 1 and 20 of the Notes to Consolidated Financial
Statements in "Item 8. Financial Statements and Supplementary Data."

     In the normal course of business, the Company is subject to legal
proceedings, lawsuits and other claims. Such matters are subject to many
uncertainties and outcomes are not predictable with assurance. Consequently, the
ultimate aggregate amount of monetary liability or financial impact with respect
to these matters at December 31, 2005, cannot be ascertained. See Note 21 of the
Notes to Consolidated Financial Statements in "Item 8. Financial Statements and
Supplementary Data."

OFF-BALANCE SHEET ARRANGEMENTS

     As of December 31, 2005, the Company did not have any off-balance sheet
arrangements as defined by Item 303(a)(4) of Securities and Exchange Commission
Regulation S-K.

                                        44
<PAGE>

RESTRICTIVE COVENANTS

     The Company is in compliance with all of the restrictive covenants in its
leasing and financing arrangements. For information concerning our restrictive
covenants see Notes 14 and 15 of the Notes to Consolidated Financial Statements
in "Item 8. Financial Statements and Supplementary Data."

TRANSACTIONS WITH SPECIAL PURPOSE ENTITY

     At December 31, 2005, the Company did not have any obligation arising out
of a variable interest, as defined by Financial Accounting Standards Board
Interpretation No. 46(R), Consolidation of Variable Interest Entities. During
2003, the Company consolidated a variable interest entity whose primary asset
was subsequently sold in 2004. For additional discussion of the variable
interest entity, refer to Note 3 of the Notes to Consolidated Financial
Statements in "Item 8. Financial Statements and Supplementary Data."

EFFECTS OF INFLATION

     The Company does not consider inflation to be a significant risk to the
cost of doing business currently or in the foreseeable future. Inflation had a
significant impact on our fuel sales operations in our Petroleum Services
segment, while our Liner Services, Logistics Services and Marine Services
segments were moderately impacted by fuel price inflation. Inflation has had a
moderate impact on all our segments on other operating expenses, including
dry-docking expenses and corporate overhead. Refer to "Item 1A. Risk Factors"
for a discussion of the risks related to fluctuation in fuel prices and "Item 7.
Management's Discussion and Analysis of Financial Condition and Results of
Operations."

RECENT ACCOUNTING PRONOUNCEMENTS

     For a complete discussion of new accounting pronouncements, see Note 1 of
the Notes to Consolidated Financial Statements in "Item 8. Financial Statements
and Supplementary Data."

ITEM 7A.  QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK.

  INTEREST RATE RISK

     The Company is exposed to market risk from changes in interest rates which
may adversely affect the results of our operations, financial condition and cash
flows. The Company's policy is not to use financial instruments for trading
purposes or other speculative purposes. A discussion of the Company's credit
risk and the fair value of financial instruments is included in Note 17 of the
Notes to Consolidated Financial Statements in "Item 8. Financial Statements and
Supplementary Data."

     The Company's debt is primarily in fixed interest rate instruments. While
the fair value of these debt instruments will vary with changes in interest
rates, the Company has fixed most of its cash flow requirements and its
operations are not significantly impacted by interest rate fluctuations.

     The Company leases certain equipment under operating leases which are
subject to interest rate risk. Payments under these leases are adjusted based on
a variable interest rate. At the end of the lease term, the Company may purchase
the equipment by paying the amount remaining under the lease, sell the equipment
and repay an amount remaining under the lease, or renegotiate the lease to
extend the term. If the Company were to purchase the equipment, the Company
would be at risk that the fair value of the equipment may be less than the
amount required to purchase it.

                                        45
<PAGE>

     The following table provides information about the Company's non-trading
financial instruments sensitive to changes in interest rates at December 31,
2005. For debt obligations, the table presents principal cash flows and for
operating leases the table presents future minimum lease payments. For fixed
rate debt obligations, the interest rates reflect the corresponding weighted
average interest rates by expected maturity dates. For variable rate debt and
lease obligations, the interest rates are based on the weighted average interest
rate swaps to fix the variable rate obligations at the reporting date.

<Table>
<Caption>
                                     EXPECTED FISCAL YEAR OF MATURITY AT DECEMBER 31, 2005:
                             ----------------------------------------------------------------------
                              2006      2007      2008      2009      2010    THEREAFTER    TOTAL     FAIR VALUE
                             -------   -------   -------   -------   ------   ----------   --------   ----------
                                                           (DOLLARS IN THOUSANDS)
<S>                          <C>       <C>       <C>       <C>       <C>      <C>          <C>        <C>
Long-term debt:
  Fixed rate..............   $14,005   $14,278   $16,394   $ 9,444   $9,041    $139,503    $202,665    $209,742
     Average interest
       rate...............       5.7%      5.7%      5.6%      5.9%     5.8%        5.8%
  Variable rate...........   $19,421   $19,421   $19,421   $75,421   $2,921    $ 16,842    $153,447    $153,447
     Average interest
       rate...............       5.1%      5.4%      5.5%      5.4%     4.9%        4.9%
Operating leases:
  Variable rate...........   $   717   $    --   $    --   $    --   $   --    $     --    $    717    $    717
     Average interest
       rate...............       6.4%
</Table>

  COMMODITY PRICES

     Our commodity price risk associated with the market price for oil is not
considered to be material. Fuel purchased by our Petroleum Services segment for
resale is purchased at market price and resold at market price plus a fixed
margin.

  FOREIGN CURRENCY RISKS

     While substantial amounts of our revenues are derived from our foreign
operations, substantially all of such business is denominated in United States
dollars. In addition, we attempt to effect as many purchases outside the United
States as we can in United States dollars. Therefore, we have only minimal
exposure to foreign currency exchange risk. We do not hedge against foreign
currency risks.

                                        46
<PAGE>

ITEM 8.  FINANCIAL STATEMENTS AND SUPPLEMENTARY DATA.

                               TABLE OF CONTENTS

<Table>
<S>                                                           <C>
Consolidated Financial Statements:
  Report of Independent Registered Public Accounting Firm...   48
  Consolidated Statements of Operations for the Years Ended
     December 31, 2005, 2004 and 2003.......................   49
  Consolidated Balance Sheets as of December 31, 2005 and
     2004...................................................   50
  Consolidated Statements of Stockholders' Equity for the
     Years Ended December 31, 2005, 2004 and 2003...........   51
  Consolidated Statements of Cash Flows for the Years Ended
     December 31, 2005, 2004 and 2003.......................   52
  Notes to Consolidated Financial Statements for the Years
     Ended December 31, 2005, 2004 and 2003.................   53
Consolidated Financial Statement Schedules:
  Schedule II -- Valuation and Qualifying Accounts for the
     Three Years Ended December 31, 2005....................   83
</Table>

                                        47
<PAGE>

            REPORT OF INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM

To the Board of Directors and Stockholders of
Crowley Maritime Corporation
Oakland, California

     We have audited the accompanying consolidated balance sheets of Crowley
Maritime Corporation and subsidiaries (the "Company") as of December 31, 2005
and 2004, and the related consolidated statements of operations, stockholders'
equity, and cash flows for each of the three years in the period ended December
31, 2005. Our audits also included the financial statement schedule listed in
the Table of Contents at "Item 8. Financial Statements and Supplementary Data."
These financial statements and financial statement schedule are the
responsibility of the Company's management. Our responsibility is to express an
opinion on the financial statements and financial statement schedule based on
our audits.

     We conducted our audits in accordance with the standards of the Public
Company Accounting Oversight Board (United States). Those standards require that
we plan and perform the audit to obtain reasonable assurance about whether the
financial statements are free of material misstatement. The Company is not
required to have, nor were we engaged to perform, an audit of its internal
control over financial reporting. An audit includes consideration of internal
control over financial reporting as a basis for designing audit procedures that
are appropriate in the circumstances, but not for the purpose of expressing an
opinion on the effectiveness of the Company's internal control over financial
reporting. Accordingly, we express no such opinion. An audit also includes
examining, on a test basis, evidence supporting the amounts and disclosures in
the financial statements, assessing the accounting principles used and
significant estimates made by management, as well as evaluating the overall
financial statement presentation. We believe that our audits provide a
reasonable basis for our opinion.

     In our opinion, such consolidated financial statements present fairly, in
all material respects, the financial condition of Crowley Maritime Corporation
and subsidiaries as of December 31, 2005 and 2004, and the results of their
operations and their cash flows for each of the three years in the period ended
December 31, 2005, in conformity with accounting principles generally accepted
in the United States of America. Also, in our opinion, such financial statement
schedule, when considered in relation to the basic consolidated financial
statements taken as a whole, presents fairly in all material respects the
information set forth therein.

DELOITTE & TOUCHE LLP
Certified Public Accountants

Jacksonville, Florida
March 17, 2006

                                        48
<PAGE>

                 CROWLEY MARITIME CORPORATION AND SUBSIDIARIES

                     CONSOLIDATED STATEMENTS OF OPERATIONS
              FOR THE YEARS ENDED DECEMBER 31, 2005, 2004 AND 2003
                    (IN THOUSANDS, EXCEPT PER SHARE AMOUNTS)

<Table>
<Caption>
                                                                 2005        2004       2003
                                                              ----------   --------   --------
<S>                                                           <C>          <C>        <C>
REVENUES:
     Operating revenues.....................................  $  997,453   $903,517   $883,440
     Fuel sales.............................................     193,360     86,884     76,340
                                                              ----------   --------   --------
                                                               1,190,813    990,401    959,780
                                                              ----------   --------   --------
EXPENSES:
     Operating..............................................     854,423    799,215    773,582
     Cost of fuel sold......................................     168,543     71,932     65,106
     General and administrative.............................      37,293     32,466     31,447
     Depreciation and amortization..........................      65,095     62,618     57,760
     Asset recoveries, net..................................     (15,341)    (4,846)    (5,383)
                                                              ----------   --------   --------
                                                               1,110,013    961,385    922,512
                                                              ----------   --------   --------
OPERATING INCOME............................................      80,800     29,016     37,268
OTHER INCOME (EXPENSE):
     Interest income........................................       3,335      1,987        354
     Interest expense.......................................     (19,635)   (20,165)   (19,729)
     Minority interest in consolidated subsidiaries.........         (79)       127      1,721
     Other income...........................................       1,368      1,024        115
                                                              ----------   --------   --------
                                                                 (15,011)   (17,027)   (17,539)
                                                              ----------   --------   --------
INCOME FROM CONTINUING OPERATIONS BEFORE INCOME TAXES.......      65,789     11,989     19,729
Income tax expense..........................................     (23,400)    (2,100)    (7,700)
                                                              ----------   --------   --------
INCOME FROM CONTINUING OPERATIONS...........................      42,389      9,889     12,029
Discontinued operations:
  Income (loss) from operations, including gain/loss on
     disposal, net of tax expense (benefit).................      (3,513)    15,026      1,212
                                                              ----------   --------   --------
INCOME BEFORE CUMULATIVE EFFECT OF CHANGE IN ACCOUNTING
  PRINCIPLE.................................................      38,876     24,915     13,241
Cumulative effect of change in accounting principle, net of
  tax benefit of $257.......................................          --         --       (420)
                                                              ----------   --------   --------
NET INCOME..................................................      38,876     24,915     12,821
Preferred stock dividends...................................      (1,575)    (1,575)    (1,575)
Change in fair value of redeemable common stock.............        (330)        --         --
                                                              ----------   --------   --------
NET INCOME ATTRIBUTABLE TO COMMON STOCKHOLDERS..............  $   36,971   $ 23,340   $ 11,246
                                                              ==========   ========   ========
Basic earnings per common share:
  Income from continuing operations.........................  $   300.94   $  61.45   $  77.04
  Income (loss) from discontinued operations................      (26.11)    111.05       8.93
  Cumulative effect of change in accounting principle.......          --         --      (3.10)
                                                              ----------   --------   --------
  Net income................................................  $   274.83   $ 172.50   $  82.87
                                                              ==========   ========   ========
Diluted earnings per common share:
  Income from continuing operations.........................  $   260.54   $  61.21   $  74.28
  Income (loss) from discontinued operations................      (21.76)     93.01       7.48
  Cumulative effect of change in accounting principle.......          --         --      (2.59)
                                                              ----------   --------   --------
  Net income................................................  $   238.78   $ 154.22   $  79.17
                                                              ==========   ========   ========
</Table>

   The accompanying notes are an integral part of the consolidated financial
                                  statements.

                                        49
<PAGE>

                 CROWLEY MARITIME CORPORATION AND SUBSIDIARIES

                          CONSOLIDATED BALANCE SHEETS
                        AS OF DECEMBER 31, 2005 AND 2004
               (IN THOUSANDS, EXCEPT SHARE AND PER SHARE AMOUNTS)

<Table>
<Caption>
                                                                 2005        2004
                                                              ----------   --------
<S>                                                           <C>          <C>
                                      ASSETS
Cash and cash equivalents...................................  $   33,948   $142,896
Receivables, net............................................     200,607    170,091
Inventory...................................................      37,744     16,611
Prepaid expenses and other current assets...................      36,276     21,707
Deferred income taxes.......................................      19,681     13,008
Current assets of discontinued operations...................         523      2,622
Accrued deposit to Capital Construction Fund................     (41,000)        --
                                                              ----------   --------
TOTAL CURRENT ASSETS........................................     287,779    366,935
Receivable from related party...............................      11,540     11,177
Goodwill....................................................      54,027     44,786
Intangibles, net............................................      19,651     14,125
Other assets................................................      36,568     44,803
Capital Construction Fund...................................      41,827      4,942
Property and equipment, net.................................     607,319    493,989
                                                              ----------   --------
TOTAL ASSETS................................................  $1,058,711   $980,757
                                                              ==========   ========

           LIABILITIES, REDEEMABLE COMMON STOCK AND STOCKHOLDERS' EQUITY
Accounts payable and accrued liabilities....................  $  122,186   $ 96,459
Accrued payroll and related expenses........................      48,710     44,221
Insurance claims payable....................................      22,311     15,797
Unearned revenue............................................      15,974     13,824
Current liabilities of discontinued operations..............       1,225      2,038
Current portion of long-term debt...........................      33,426     30,993
                                                              ----------   --------
TOTAL CURRENT LIABILITIES...................................     243,832    203,332
Deferred income taxes.......................................     110,002     92,731
Other liabilities...........................................      22,032     19,465
Minority interests in consolidated subsidiaries.............          93         14
Long-term debt, net of current portion......................     322,686    341,380
                                                              ----------   --------
TOTAL LIABILITIES...........................................     698,645    656,922
                                                              ----------   --------
COMMITMENTS AND CONTINGENCIES (Notes 14, 19, 21, 25)
Redeemable common stock, 5,075 and 4,579 shares issued and
  outstanding, repectively..................................       9,450      8,700
Unearned ESOP common stock, 896 shares......................      (1,267)        --
                                                              ----------   --------
TOTAL REDEEMABLE COMMON STOCK...............................       8,183      8,700
                                                              ----------   --------
STOCKHOLDERS' EQUITY:
Preferred class A convertible stock, $100 par value, 315,000
  shares issued, authorized and outstanding.................      31,500     31,500
Common voting stock, $.01 par value, 4,485,000 shares
  authorized; 83,738 and 84,222 shares issued and
  outstanding, respectively.................................           1          1
Class N common non-voting stock, $.01 par value, 54,500
  shares authorized; 46,138 shares outstanding..............          --         --
Additional paid-in capital..................................      64,277     64,791
Retained earnings...........................................     260,063    223,198
Accumulated other comprehensive loss, net of tax benefit of
  $2,225 and $2,449, respectively...........................      (3,958)    (4,355)
                                                              ----------   --------
TOTAL STOCKHOLDERS' EQUITY..................................     351,883    315,135
                                                              ----------   --------
TOTAL LIABILITIES, REDEEMABLE COMMON STOCK AND STOCKHOLDERS'
  EQUITY....................................................  $1,058,711   $980,757
                                                              ==========   ========
</Table>

   The accompanying notes are an integral part of the consolidated financial
                                  statements.

                                        50
<PAGE>

                 CROWLEY MARITIME CORPORATION AND SUBSIDIARIES

                CONSOLIDATED STATEMENTS OF STOCKHOLDERS' EQUITY
              FOR THE YEARS ENDED DECEMBER 31, 2005, 2004 AND 2003
                      (IN THOUSANDS, EXCEPT SHARE AMOUNTS)
<Table>
<Caption>
                                      PREFERRED CLASS A                              CLASS N
                                      CONVERTIBLE STOCK       COMMON STOCK         COMMON STOCK      ADDITIONAL
                                     -------------------   ------------------   ------------------    PAID-IN     RETAINED
                                     SHARES    PAR VALUE   SHARES   PAR VALUE   SHARES   PAR VALUE    CAPITAL     EARNINGS
                                     -------   ---------   ------   ---------   ------   ---------   ----------   --------
<S>                                  <C>       <C>         <C>      <C>         <C>      <C>         <C>          <C>
December 31, 2002..................  315,000    $31,500    84,641     $   1     46,138     $  --      $65,237     $188,679
Stock retired from employee benefit
  plans............................       --         --      (110)       --         --        --         (117)         (14)
Preferred stock dividends..........       --         --        --        --         --        --           --       (1,575)
Comprehensive Income:
  Net income.......................       --         --        --        --         --        --           --       12,821
  Other comprehensive income:
    Foreign currency translation
      adjustments, net of tax
      expense of $102..............       --         --        --        --         --        --           --           --
    Amortization of rate lock
      agreement, net of tax expense
      of $501......................       --         --        --        --         --        --           --           --
Total comprehensive income.........       --         --        --        --         --        --           --           --
                                     -------    -------    ------     -----     ------     -----      -------     --------
December 31, 2003..................  315,000     31,500    84,531         1     46,138        --       65,120      199,911
Stock retired from employee benefit
  plans............................       --         --      (309)       --         --        --         (329)         (53)
Preferred stock dividends..........       --         --        --        --         --        --           --       (1,575)
Comprehensive Income:
  Net income.......................       --         --        --        --         --        --           --       24,915
  Other comprehensive income:
    Reclassification adjustment for
      foreign currency translation
      losses included in net loss,
      net of tax expense of $729...       --         --        --        --         --        --           --           --
    Amortization of rate lock
      agreement, net of tax expense
      of $214......................       --         --        --        --         --        --           --           --
Total comprehensive income.........       --         --        --        --         --        --           --           --
                                     -------    -------    ------     -----     ------     -----      -------     --------
December 31, 2004..................  315,000     31,500    84,222         1     46,138        --       64,791      223,198
Stock retired from employee benefit
  plans............................       --         --      (484)       --         --        --         (514)        (106)
Change in fair value of redeemable
  common stock.....................       --         --        --        --         --        --           --         (330)
Preferred stock dividends..........       --         --        --        --         --        --           --       (1,575)
Comprehensive Income:
  Net income.......................       --         --        --        --         --        --           --       38,876
  Other comprehensive income:
    Amortization of rate lock
      agreement, net of tax expense
      of $224......................       --         --        --        --         --        --           --           --
Total comprehensive income.........       --         --        --        --         --        --           --           --
                                     -------    -------    ------     -----     ------     -----      -------     --------
December 31, 2005..................  315,000    $31,500    83,738     $   1     46,138     $  --      $64,277     $260,063
                                     =======    =======    ======     =====     ======     =====      =======     ========

<Caption>

                                         OTHER
                                     COMPREHENSIVE
                                         LOSS         TOTAL
                                     -------------   --------
<S>                                  <C>             <C>
December 31, 2002..................     $(7,105)     $278,312
Stock retired from employee benefit
  plans............................          --          (131)
Preferred stock dividends..........          --        (1,575)
Comprehensive Income:
  Net income.......................          --
  Other comprehensive income:
    Foreign currency translation
      adjustments, net of tax
      expense of $102..............         159
    Amortization of rate lock
      agreement, net of tax expense
      of $501......................         892
Total comprehensive income.........          --        13,872
                                        -------      --------
December 31, 2003..................      (6,054)      290,478
Stock retired from employee benefit
  plans............................          --          (382)
Preferred stock dividends..........          --        (1,575)
Comprehensive Income:
  Net income.......................          --
  Other comprehensive income:
    Reclassification adjustment for
      foreign currency translation
      losses included in net loss,
      net of tax expense of $729...       1,318
    Amortization of rate lock
      agreement, net of tax expense
      of $214......................         381
Total comprehensive income.........          --        26,614
                                        -------      --------
December 31, 2004..................      (4,355)      315,135
Stock retired from employee benefit
  plans............................          --          (620)
Change in fair value of redeemable
  common stock.....................          --          (330)
Preferred stock dividends..........          --        (1,575)
Comprehensive Income:
  Net income.......................          --
  Other comprehensive income:
    Amortization of rate lock
      agreement, net of tax expense
      of $224......................         397
Total comprehensive income.........          --        39,273
                                        -------      --------
December 31, 2005..................     $(3,958)     $351,883
                                        =======      ========
</Table>

   The accompanying notes are an integral part of the consolidated financial
                                  statements.

                                        51
<PAGE>

                 CROWLEY MARITIME CORPORATION AND SUBSIDIARIES

                     CONSOLIDATED STATEMENTS OF CASH FLOWS
              FOR THE YEARS ENDED DECEMBER 31, 2005, 2004 AND 2003
                                 (IN THOUSANDS)

<Table>
<Caption>
                                                                2005        2004       2003
                                                              ---------   --------   --------
<S>                                                           <C>         <C>        <C>
OPERATING ACTIVITIES:
  Net income................................................  $  38,876   $ 24,915   $ 12,821
  Adjustments to reconcile net income to net cash provided
    by operating activities:
    Cumulative effect of change in accounting principle,
     net....................................................         --         --        420
    Depreciation and amortization...........................     65,095     62,618     57,760
    Amortization of deferred gain on the sale and leaseback
     of vessels.............................................       (576)      (576)    (2,679)
    Asset recoveries, net...................................    (15,341)    (4,846)    (5,383)
    Change in cash surrender value of life insurance........       (542)      (704)    (1,103)
    Deferred income tax provision...........................      9,922      3,070      5,545
    Changes in current assets and liabilities, net of
     acquisitions:
      Receivables, net......................................      9,339    (13,092)    (9,049)
      Inventory, prepaid expenses and other current
       assets...............................................     (1,014)    (3,371)    (2,348)
      Accounts payable and accrued liabilities..............       (527)     4,165      5,788
      Accrued payroll and related expenses..................      3,469      3,918      1,608
    Other...................................................      5,225     (3,060)    (3,168)
                                                              ---------   --------   --------
        Net cash provided by continuing operations..........    113,926     73,037     60,212
        Net cash provided by discontinued operations........     10,064      2,443        585
                                                              ---------   --------   --------
        Net cash provided by operating activities...........    123,990     75,480     60,797
                                                              ---------   --------   --------
INVESTING ACTIVITIES:
  Acquisitions, net of cash acquired........................   (103,361)        --         --
  Property and equipment additions..........................   (113,957)   (27,594)   (19,247)
  Dry-docking costs.........................................     (8,687)   (11,816)   (30,366)
  Proceeds from asset dispositions..........................     30,899      8,178     10,451
  Proceeds from sale of businesses, net of cash sold........         --         --        500
  Withdrawals (deposits) of restricted funds................       (555)     1,944     (1,544)
  Contingent purchase price (paid) received, net............       (216)       100       (123)
  Investment in joint venture...............................         --     (1,000)        --
  Loan to joint venture.....................................         --     (2,250)        --
  Premiums paid on directors life insurance.................     (1,809)    (2,175)    (1,894)
  Receipts on receivable from related party.................         --         --      7,508
  Receipts on notes receivable, net.........................        231        214        239
                                                              ---------   --------   --------
        Net cash used in continuing operations..............   (197,455)   (34,399)   (34,476)
        Net cash provided by (used in) discontinued
        operations..........................................     (9,501)     8,687      1,915
                                                              ---------   --------   --------
        Net cash used in investing activities...............   (206,956)   (25,712)   (32,561)
                                                              ---------   --------   --------
FINANCING ACTIVITIES:
  Proceeds from issuance of debt............................         --         --    205,909
  Borrowings on Revolving Credit Agreement..................     20,000         --     20,000
  Repayments on Revolving Credit Agreement..................    (10,000)        --    (45,000)
  Payments on long-term debt................................    (32,792)   (41,198)   (78,319)
  Payment of debt issuance costs............................         --       (829)      (866)
  Payment of rate lock agreement............................         --         --     (7,967)
  Payment of preferred stock dividends......................     (1,575)    (1,575)    (1,575)
  Loan to ESOP..............................................     (1,414)        --         --
  Issuance of common stock to ESOP..........................      1,414         --         --
  Retirement of common stock................................     (1,615)      (941)      (490)
                                                              ---------   --------   --------
        Net cash provided by (used in) continuing
        operations..........................................    (25,982)   (44,543)    91,692
        Net cash used in discontinued operations............         --    (21,079)    (4,516)
                                                              ---------   --------   --------
        Net cash provided by (used in) financing
        activities..........................................    (25,982)   (65,622)    87,176
                                                              ---------   --------   --------
        Net increase (decrease) in cash and cash
        equivalents.........................................   (108,948)   (15,854)   115,412
        Cash and cash equivalents at beginning of year......    142,896    158,750     43,338
                                                              ---------   --------   --------
        Cash and cash equivalents at end of year............  $  33,948   $142,896   $158,750
                                                              =========   ========   ========
</Table>

   The accompanying notes are an integral part of the consolidated financial
                                  statements.

                                        52
<PAGE>

                 CROWLEY MARITIME CORPORATION AND SUBSIDIARIES

                   NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
              FOR THE YEARS ENDED DECEMBER 31, 2005, 2004 AND 2003
               (IN THOUSANDS, EXCEPT SHARE AND PER SHARE AMOUNTS)

NOTE 1 -- SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES

NATURE OF OPERATIONS

     Crowley Maritime Corporation, operating through its subsidiaries (the
"Company"), provides diversified transportation and fuel sales distribution
services in domestic and international markets, with primary operations located
in the continental United States, Alaska, Puerto Rico, Mexico, Central America,
the Caribbean Islands, Russia, and other international markets. The Company
operates through four reporting segments: Liner Services, Logistics Services,
Marine Services and Petroleum Services. See Note 23 for further information.

REORGANIZATION

     Effective July 1, 2005, the Company implemented a corporate reorganization.
As a result of this reorganization, the Company reevaluated its operating
segments and reporting segments and retroactively changed them to be aligned
with the Company's new structure. The Company is now organized and managed
principally by means of five operating segments: Puerto Rico and Caribbean Liner
Services, Latin America Liner Services, Logistics Services, Marine Services and
Petroleum Services. The Company has aggregated the Puerto Rico and Caribbean
Liner Services and Latin America Liner Services into one reportable segment
called Liner Services. Refer to Note 23 for further discussion of the Company's
segments.

PRINCIPLES OF CONSOLIDATION

     The consolidated financial statements include the accounts of Crowley
Maritime Corporation and all majority-owned subsidiaries. All intercompany
transactions and balances have been eliminated. The Company has joint ventures
that it maintains more than a 50% ownership interest in and maintains effective
control over their operations. Based on this, the Company consolidates these
joint ventures and records minority interests for the partners' ownership
interests in the joint ventures.

RELATED PARTY

     Thomas B. Crowley, Jr., President, Chief Executive Officer, Chairman of the
Board of Directors and principal stockholder, has the ability to control
operations through his beneficial ownership of a majority of the Company's
voting power.

RECLASSIFICATION

     Certain items in prior years' consolidated financial statements and related
notes thereto have been reclassified to conform with the current year
presentation. As discussed in Note 4, the Company has reported discontinued
operations and reclassified amounts related to those discontinued operations for
all periods presented. As discussed in Note 19, the Company reclassified its
maximum cash obligation related to its stock savings plan from equity to equity
mezzanine. As discussed in Note 23, effective July 1, 2005, the Company
completed a reorganization which affected the Company's reportable segments.

CASH AND CASH EQUIVALENTS

     The Company considers all highly liquid securities, with original
maturities of three months or less, which are primarily invested in overnight
repurchase agreements to be cash equivalents. These securities are stated at
cost which approximates fair value.

                                        53
<PAGE>
                 CROWLEY MARITIME CORPORATION AND SUBSIDIARIES

           NOTES TO CONSOLIDATED FINANCIAL STATEMENTS -- (CONTINUED)
              FOR THE YEARS ENDED DECEMBER 31, 2005, 2004 AND 2003
               (IN THOUSANDS, EXCEPT SHARE AND PER SHARE AMOUNTS)

INVENTORY

     Resale fuel inventories are stated at lower of cost or market with cost
determined on the average cost method. Provisions for slow moving inventory are
based on management's analysis of inventory levels and future usage.

GOODWILL

     Goodwill represents the costs of acquired companies in excess of the fair
value of their net tangible assets and identifiable intangible assets. In
accordance with Statement of Financial Accounting Standards ("SFAS") No. 142,
Goodwill and Other Intangible Assets, the Company performs an annual test of
goodwill unless an event occurs or circumstances change that would indicate that
the fair value of goodwill has been reduced below its carrying amount. The
Company's evaluation of impairment is based on estimated discounted cash flows
of the investment for which the goodwill is related.

INTANGIBLES

     Deferred financing costs are amortized using the effective interest method
over the terms of the related financing to Interest Expense in the accompanying
Consolidated Statements of Operations. Non-compete agreements and customer lists
are amortized using the straight-line method over their estimated lives to
Depreciation and Amortization Expense in the accompanying Consolidated
Statements of Operations. The Company evaluates its non-compete agreements and
customer lists for impairment on an annual basis or when an event occurs or
circumstances change that would indicate that the fair value of the intangible
has been reduced below its carrying amount. The Company's evaluation of
impairment is based on estimated discounted cash flows of the investment to
which the intangible is related.

DRY-DOCKING

     Dry-docking costs for major vessels are deferred and amortized over the
estimated period between dry-dockings. Vessel dry-docking costs for other owned
vessels are not individually significant and are expensed as incurred as repairs
and maintenance expense. The types of material costs that are incurred for
dry-docking include compliance with regulatory and vessel classification
inspection requirements, blastings and coatings of steel and steel replacement.
Mobilization costs to and from the dry-dock location are expensed as incurred.
Dry-docking inspections are required generally every two and a half years or
twice every five years for regulatory purposes to demonstrate that a vessel
meets standards established by the U.S. Coast Guard and the American Bureau of
Shipping. Depreciation and Amortization Expense in the accompanying Consolidated
Statements of Operations includes amortization expense of the dry-docking costs
of $18,662, $17,356 and $8,912 in 2005, 2004 and 2003, respectively. Included in
Other Assets in the accompanying Consolidated Balance Sheets are deferred
dry-docking costs of $13,126 and $23,100 at December 31, 2005 and 2004,
respectively.

ASSETS CONTAINED IN A RABBI TRUST

     Assets contained in a rabbi trust consist of investments in various funds
made by eligible individuals as part of the Company's deferred compensation
plan, see Note 19. These investments are stated at aggregate fair value, are
restricted and have been placed in a rabbi trust whereby the amounts are
irrevocably set aside to fund the Company's obligations under the deferred
compensation plan. The Company classifies these assets as trading securities and
accounts for them in accordance with SFAS No. 115, Accounting for Certain
Investments in Debt and Equity Securities. At December 31, 2005 and 2004, the
Company has classified

                                        54
<PAGE>
                 CROWLEY MARITIME CORPORATION AND SUBSIDIARIES

           NOTES TO CONSOLIDATED FINANCIAL STATEMENTS -- (CONTINUED)
              FOR THE YEARS ENDED DECEMBER 31, 2005, 2004 AND 2003
               (IN THOUSANDS, EXCEPT SHARE AND PER SHARE AMOUNTS)

$1,745 and $654 as Prepaid Assets, for the current portion of deferred
compensation and $9,926 and $9,015 as Other Assets for the long-term portion of
deferred compensation, respectively.

PROPERTY AND EQUIPMENT

     Property and equipment are stated at cost. Renewals and refurbishments
which extend asset useful lives are capitalized while normal repair and
maintenance expenditures are charged to expense as incurred. Depreciation is
computed using the straight-line method over the estimated useful lives of the
assets as follows: floating equipment (15 to 25 years); other operating
equipment (5 to 20 years); and buildings (5 to 25 years). Leasehold improvements
are depreciated over the lesser of their estimated useful lives or the remaining
lease term. Interest is capitalized in conjunction with the Company's
construction and refurbishment of vessels.

     The Company assesses recoverability of the carrying value of a long-lived
asset by estimating the future net cash flows expected to result from the asset,
including eventual disposition. If the future net cash flows are less than the
carrying value of the asset, an impairment loss is recorded equal to the
difference between the asset's carrying value and its fair value. Impairment
losses are recorded on long-lived assets used in operations when indicators of
impairment are present and the undiscounted cash flows estimated to be generated
by those assets are less than the asset's carrying amount.

INTERNAL USE SOFTWARE

     Costs related to the development of internal use software other than those
incurred during the application development stage are expensed as incurred.
Costs considered to be in the application development stage include design,
coding, installation of hardware and testing. Costs capitalized during this
stage include: external direct costs of materials and services consumed in
developing or obtaining the software; payroll and payroll-related costs for
employees directly associated with the project; and interest costs incurred
during development. Costs of $568 and $333 were capitalized to property and
equipment in 2005 and 2003, respectively.

REVENUE RECOGNITION

     The Company's accounting policies for revenue recognition are predicated on
the type of service provided. The common carrier services included in Liner
Services are recognized on the proportional performance basis over each voyage
by load and discharge port. Revenue from the Company's Logistics Services, a
portion of the revenue generated by Marine Services and fuel sales of the
Petroleum Services are recognized as services are provided. Revenues from
Petroleum Services, except fuel sales, and a portion of Marine Services are
recognized on the proportional performance basis over the length of the
contract. Estimated losses are provided at the time such losses become evident.
Costs related to the shipment of goods under long-term contracts are expensed as
incurred.

     Marine Services enters into certain marine salvage contracts on Lloyd's
Standard Form of Salvage ("LOF"). The Company recognizes costs as expenses on
these LOF contracts are incurred. Revenue is recognized to the extent of costs
incurred in order to appropriately match revenues with costs, provided the
Company has earned the revenue.

INCOME TAXES

     The Company accounts for certain income and expense items for financial
reporting differently than for income tax purposes. The deferred tax liabilities
or assets are determined based on differences between the financial statement
carrying values and the tax bases of assets and liabilities. Deferred tax assets
and liabilities

                                        55
<PAGE>
                 CROWLEY MARITIME CORPORATION AND SUBSIDIARIES

           NOTES TO CONSOLIDATED FINANCIAL STATEMENTS -- (CONTINUED)
              FOR THE YEARS ENDED DECEMBER 31, 2005, 2004 AND 2003
               (IN THOUSANDS, EXCEPT SHARE AND PER SHARE AMOUNTS)

are determined based on current enacted tax rates applicable to the period in
which the deferred tax assets or liabilities are expected to be settled or
realized. A valuation allowance would be recorded if, based on the weight of
available evidence, management believes it is more likely than not that some
portion or all of a recorded deferred tax asset would not be realized in future
periods.

EARNINGS PER COMMON SHARE

     Basic earnings per common share is computed by dividing net income
attributable to common stockholders by the weighted average number of shares of
Common Stock and Class N Common Stock outstanding during each year. Shares
issued during the year and shares reacquired during the year are weighted for
the portion of the year that they were outstanding. Diluted earnings per common
share is computed by giving effect to all potentially dilutive common shares,
which are Preferred Class A Convertible Stock, that were outstanding during the
period.

INSURANCE

     The Company is self-insured for marine, workers compensation, protection
and indemnity, liability, cargo and asbestos coverages, subject to certain
individual and aggregate stop-loss limits. The Company records its
self-insurance liability using an actuarial methodology based on claims filed,
historical development factors and an estimate of claims incurred but not yet
reported. The estimates used by management are based on the Company's historical
experience as well as current facts and circumstances including those for
salvage and subrogation reserves. Reinsurance is obtained to cover losses in
excess of certain limits. Claims receivables are recorded when it is determined
that it is probable the costs of the insured events are recoverable from the
insurance company. The determinations of such estimates and the establishment of
the self-insurance reserves are continually reviewed and updated. Any
adjustments resulting from these reviews are reflected in current operations.
The Company discounted its workers compensation protection and indemnity,
liability and cargo reserves at the risk-free rate of 4.36% and 3.61% as of
December 31, 2005 and 2004, respectively.

ENVIRONMENTAL COSTS

     Environmental costs represent reclamation costs for which the Company has
determined it is responsible to remediate. Environmental expenditures for
reclamation costs that benefit future periods are capitalized. Expenditures that
relate to remediating an existing condition caused by past operations, and which
do not contribute to current or future revenue generation, are expensed.
Undiscounted liabilities are recorded when the Company's responsibility for
environmental remedial efforts is deemed probable and the costs can be
reasonably estimated. The ultimate future environmental costs, however, will
depend on the extent of contamination of property and the Company's share of
remediation responsibility.

FOREIGN CURRENCY TRANSLATION

     For non-U.S. subsidiaries whose functional currency is not the U.S. dollar,
the results of operations are translated from local currencies into U.S. dollars
using average exchange rates during each period. Assets and liabilities are
translated using exchange rates at the end of each period. Translation gains and
losses on assets and liabilities are reported as a separate component of
stockholders' equity as other comprehensive income (loss) and are not included
in the determination of net income (loss).

DERIVATIVE FINANCIAL INSTRUMENTS

     The Company does not invest in derivatives for trading or speculative
purposes. From time to time, as part of its risk management strategy, the
Company uses derivative financial instruments, such as rate lock agreements, to
manage exposures to interest rate risk. These instruments are accounted for as
cash flow

                                        56
<PAGE>
                 CROWLEY MARITIME CORPORATION AND SUBSIDIARIES

           NOTES TO CONSOLIDATED FINANCIAL STATEMENTS -- (CONTINUED)
              FOR THE YEARS ENDED DECEMBER 31, 2005, 2004 AND 2003
               (IN THOUSANDS, EXCEPT SHARE AND PER SHARE AMOUNTS)

hedges with unrealized gains and losses recorded in other comprehensive income
(loss). The amount paid by the Company on maturity of a rate lock agreement is
recognized as an adjustment to interest expense over the term of the underlying
debt obligation. The Company recognized $621, $595 and $567 as an adjustment to
Interest Expense in 2005, 2004 and 2003, respectively.

USE OF ESTIMATES

     The preparation of financial statements in conformity with accounting
principles generally accepted in the United States of America requires
management to make estimates and assumptions. These estimates and assumptions
affect the reported amounts of assets, liabilities, redeemable common stock,
stockholders' equity, revenues, expenses, and disclosure of contingent assets
and liabilities during the reporting period. Actual results may differ from
these estimates.

NEW ACCOUNTING STANDARDS

     In March 2005, the Financial Accounting Standards Board ("FASB") issued
Interpretation No. 47 ("FIN 47"), Accounting for Conditional Asset Retirement
Obligations, an Interpretation of FASB Statement No. 143. FIN 47 is effective
for fiscal years ending after December 15, 2005; however, earlier application is
permitted.

     In March 2005, the FASB also issued Interpretation No. 46(R)-5 ("FIN
46(R)-5"), Implicit Variable Interests under FASB Interpretation No. 46 (revised
December 2003), "Consolidation of Variable Interest Entities". FIN 46(R)-5 is
effective for the first reporting period beginning after March 3, 2005; however,
earlier application is permitted for periods for which financial statements have
not yet been issued.

     In May 2005, the FASB issued SFAS No. 154, Accounting Changes and Error
Corrections, a Replacement of APB Opinion No. 20 and Statement No. 3. SFAS No.
154 is effective for fiscal years beginning after December 15, 2005.

     The Company has adopted FIN 47 and FIN 46(R)-5 during 2005 and will adopt
SFAS No. 154 January 1, 2006. The adoption of these standards did not or will
not have a material impact on the Company's consolidated financial condition,
results of operations or cash flows.

NOTE 2 -- ACQUISITIONS OF BUSINESSES

  2005 ACQUISITIONS

     On September 6, 2005, the Company acquired from Northland Fuel LLC, all of
the stock of Service Oil and Gas, Inc. and certain assets and liabilities of
Yukon Fuel Company, Northland Vessel Leasing Company LLC, and Yutana Barge Lines
(collectively "Northland Fuel"). Northland Fuel operates a refined products
distribution business in Alaska. The acquisition of Northland Fuel complements
the Company's existing business engaged in the transportation, distribution and
sale of fuel in Alaska and has been included in the Company's consolidated
statement of operations, within the Petroleum Services segment, commencing
September 6, 2005. The acquisition has been accounted for in accordance with
SFAS No. 141 "Business Combinations". The purchase price, including working
capital for Northland Fuel, was $91,610, net of $1,581 cash acquired. The
purchase price was paid with cash.

     The working capital component of the purchase price is subject to
adjustment as defined by the purchase agreement. As of December 31, 2005, the
Company has accrued a receivable of $828 from the seller as the estimated
working capital due.

                                        57
<PAGE>
                 CROWLEY MARITIME CORPORATION AND SUBSIDIARIES

           NOTES TO CONSOLIDATED FINANCIAL STATEMENTS -- (CONTINUED)
              FOR THE YEARS ENDED DECEMBER 31, 2005, 2004 AND 2003
               (IN THOUSANDS, EXCEPT SHARE AND PER SHARE AMOUNTS)

     The assets and liabilities have been recorded at estimated fair value as
determined by the Company's management based on information currently available.
The Company has received independent appraisals of the fair values of the
acquired property and equipment. The Company is currently in the process of
appraising the identified intangibles assets which the Company expects to
consist of customer lists. The Company expects that the final appraisals for
identified intangibles assets will be received before the end of the third
quarter of 2006. The Company is also in the process of determining if any
contingencies exist as of the purchase date. It is expected that the
identification of contingencies, such as environmental contingencies, will not
be completed until the second or third quarter of 2006 due to weather conditions
in Alaska. Accordingly, the allocation of the purchase price is subject to
revision based on the final determination of fair values of intangible assets
and contingencies identified. As a result of the purchase price paid and the
assignment of the estimated fair value of the assets acquired and liabilities
assumed, the Company has recorded goodwill and other intangibles of $13,483
related to this acquisition. It is expected that the incremental amortization
adjustment that results from the final intangible appraisals will not have a
material effect on the financial condition or results of operations for the year
ended December 31, 2005.

     On October 1, 2005, the Company acquired all of the membership interest of
Titan Maritime LLC, and certain assets of Titan Maritime Industries, Inc.,
Karlissa Associates and Marine Equipment Corp. (collectively "Titan"), a
worldwide marine salvage and marine wreck removal business. The acquisition of
Titan expands the Company's marine salvage and marine wreck removal business
domestically and into international markets. The operations of Titan have been
included in the Company's consolidated statement of operations commencing
October 1, 2005 and are reported under the Marine Services segment. The purchase
price of $17,707, net of $1,619 cash acquired, is comprised of $12,500 cash, a
$5,000 promissory note and a working capital payable to the sellers of $1,784.
The promissory note is payable in five annual installments of $1,000 plus
interest at the Citibank prime interest rate. The interest rate (6.75% on
December 31, 2005) is adjusted annually on October 1. The working capital
purchased is subject to adjustment for one year based on actual revenues earned
and expenses paid.

     In accordance with the purchase agreement, the sellers shall annually earn
35% of calculated earnings before interest, taxes, depreciation and amortization
("EBITDA") between $1,000 and $3,000 and shall earn 20% of calculated EBITDA
greater than $3,000 for five years. The earn-out is considered contingent
purchase price and will be accounted for as purchase price when earned.

     The Company has not completed the process of allocating the purchase price.
The assets and liabilities of Titan have been recorded at fair value as
determined by the Company's management based on information currently available.
The Company has received independent appraisals of the fair values of vessels
acquired. The Company is currently in the process of appraising the other
property and equipment acquired and identified intangibles, which the Company
expects to consist of non-compete agreements. The Company expects to receive the
final appraisals before the end of the third quarter of 2006. Accordingly, the
allocation of the purchase price is subject to revision based on the final
determination of the fair value of assets and intangibles acquired. As a result
of the purchase price paid and the assignment of the estimated fair value of the
assets acquired and liabilities assumed, the Company has recorded goodwill and
other intangibles of $3,758 related to this acquisition. It is expected that the
incremental depreciation and amortization adjustment that results from the final
appraisals will not have a material effect on the financial condition or results
of operations for the year ended December 31, 2005.

                                        58
<PAGE>
                 CROWLEY MARITIME CORPORATION AND SUBSIDIARIES

           NOTES TO CONSOLIDATED FINANCIAL STATEMENTS -- (CONTINUED)
              FOR THE YEARS ENDED DECEMBER 31, 2005, 2004 AND 2003
               (IN THOUSANDS, EXCEPT SHARE AND PER SHARE AMOUNTS)

  2003 ACQUISITION

     In July 2003, the Company purchased the stock of a transportation
management company specializing in the apparel industry for $3,357, subject to
adjustment for certain working capital adjustments and payments based on
earnings. This acquisition is included in our Logistics Services segment.

     The purchase price of the acquisitions described above consisted of the
following:

<Table>
<Caption>
                                                                2005      2003
                                                              --------   -------
<S>                                                           <C>        <C>
Assets:
  Receivables...............................................  $ 39,027   $ 2,395
  Inventory.................................................    28,074        --
  Prepaid expenses and other current assets.................       697        --
  Goodwill..................................................     9,241        --
  Intangibles...............................................     8,000        --
  Other assets..............................................       200     2,372
  Property and equipment....................................    56,338       453
Liabilities:
  Accounts payable and accrued liabilities..................   (24,466)   (1,863)
  Accrued payroll and related expenses......................    (1,020)       --
  Unearned revenue..........................................    (3,348)       --
  Current portion of long-term debt.........................      (963)       --
  Deferred income taxes.....................................    (1,342)       --
  Other long-term liabilities...............................      (553)       --
  Long-term debt............................................      (568)       --
                                                              --------   -------
     Total purchase price...................................  $109,317   $ 3,357
                                                              ========   =======
</Table>

     In December 2003, the Company entered into an agreement to assume ownership
of the 25% minority interest in a joint venture which was accounted for using
the purchase method of accounting. The Company received cash of approximately
$3,234 and recorded fair value in excess of the cost of the acquired net assets,
approximately $5,944, as a reduction to the fair value of vessels, the joint
venture's only long-term assets.

     The following unaudited pro forma results of operations for the years ended
December 31, 2005, 2004 and 2003, are presented as if the above acquisitions and
sales had been completed on January 1, 2003. The pro forma results include
estimates and assumptions which management believes are reasonable. However, pro
forma results do not include any anticipated cost savings or other effects of
the planned integration of the Company and the above acquisitions, and are not
necessarily indicative of the results which would have occurred if the business
combinations had been in effect on the dates indicated, or which may result in
the future.

<Table>
<Caption>
                                                      2005         2004         2003
                                                   ----------   ----------   ----------
<S>                                                <C>          <C>          <C>
Operating revenues...............................  $1,335,912   $1,211,915   $1,169,106
Net income.......................................  $   40,838   $   28,736   $   15,204
Basic earnings per common share..................  $   289.41   $   200.74   $   100.43
Diluted earnings per common share................  $   250.93   $   177.87   $    93.88
</Table>

                                        59
<PAGE>
                 CROWLEY MARITIME CORPORATION AND SUBSIDIARIES

           NOTES TO CONSOLIDATED FINANCIAL STATEMENTS -- (CONTINUED)
              FOR THE YEARS ENDED DECEMBER 31, 2005, 2004 AND 2003
               (IN THOUSANDS, EXCEPT SHARE AND PER SHARE AMOUNTS)

NOTE 3 -- VARIABLE INTEREST ENTITY

     In January 1997, Marine Transport Corporation ("MTC"), a wholly owned
subsidiary of the Company, arranged a transaction with an unconsolidated
Variable Interest Entity (the "VIE") by which MTC: (a) sold a vessel to the VIE;
(b) time chartered the vessel back from the VIE; and (c) time chartered the
vessel to a third party. As consideration for the sale of the vessel, MTC
received from the VIE a total of: (a) approximately $40,000 in cash; and (b) a
note receivable for $9,000. After considering certain characteristics of the
note receivable, it was subsequently recorded at its estimated net realizable
value of $3,000. In August of 1999, MTC negotiated the termination of the time
charters and arranged a series of bareboat charters for the vessel with periods
that extend through November 2006. In January of 2000, MTC received
approximately $25,000 from the VIE after the VIE borrowed certain additional
amounts from its lenders. Of the approximately $25,000, which was accounted for
as debt, $14,395 was outstanding at December 31, 2002.

     Prior to the adoption of Financial Accounting Standards Board
Interpretation No. 46, Consolidation of Variable Interest Entities (the
"Interpretation"), the Company followed: (a) EITF 90-15, Impact of
Nonsubstantive Lessors, Residual Value Guarantees, and Other Provisions in
Leasing Transactions; and (b) EITF 96-21, Implementation Issues in Accounting
for Leasing Transactions Involving Special-Purpose Entities in determining not
to consolidate the VIE. In 1997, an unrelated third party (the "Foundation")
capitalized the VIE with a substantive equity payment of $1,500, which
represented more than 3% of the total funding of the VIE, in exchange for the
beneficial interests in the VIE.

     The Interpretation clarified the accounting treatment of certain entities
in which equity investors do not have: (a) the characteristics of a controlling
financial interest; or (b) sufficient equity at risk for the entity to finance
its activities without additional subordinated financial support from other
parties. The Company adopted the Interpretation and determined that it is the
primary beneficiary of the VIE and consolidated the VIE effective January 1,
2003.

     The Company determined that the total third party equity investment in the
VIE at risk, as defined in paragraph 5 of the Interpretation, is $0. While the
Foundation capitalized the VIE with a substantive equity payment during 1997,
the $1,500 used for that payment was donated to the Foundation by MTC just
before it was invested by the Foundation in the VIE. Because the $1,500 was
donated to the Foundation, the Company concluded that the Foundation does not,
according to the Interpretation, have any equity investment at risk.

     As a result of recording the assets and liabilities of the VIE at their
fair value, a cumulative effect of change in accounting principle of $420, net
of a $257 deferred tax benefit, ($3.10 basic earnings per common share and $2.59
diluted earnings per common share) was recorded in the Consolidated Statements
of Operations during 2003. Prior year consolidated financial statements were not
restated as a result of the consolidation of the VIE.

     In June 2004, the Company exercised an option to purchase the vessel from
the VIE for consideration consisting of: (i) a cash payment in the amount of
$500; and (ii) cancellation of a note (which note had been eliminated in
consolidating the VIE). Simultaneously with the exercise of the option: (a) the
VIE assigned its remaining outstanding debt in the amount of $15,347 to the
Company and the Company assumed such outstanding debt; (b) the Company assumed
the obligations of the VIE under two bareboat charters for the vessel; and (c)
an unrelated third party that capitalized the VIE in 1997 received $2,000 as a
return of capital.

     At the request of the charterer of the vessel, the Company entered into a
termination agreement in November of 2004 which, among other things, sets forth
the terms and conditions by which: (a) the bareboat charters would be terminated
prior to their expiration dates; and (b) the Company would receive a payment
equal to the present value of the charter hire payments that, but for the
termination, would have been made

                                        60
<PAGE>
                 CROWLEY MARITIME CORPORATION AND SUBSIDIARIES

           NOTES TO CONSOLIDATED FINANCIAL STATEMENTS -- (CONTINUED)
              FOR THE YEARS ENDED DECEMBER 31, 2005, 2004 AND 2003
               (IN THOUSANDS, EXCEPT SHARE AND PER SHARE AMOUNTS)

between the date of the termination and November 16, 2006, the scheduled
expiration date of the charters. Pursuant to the termination agreement and the
bareboat charters, the Company received a payment of approximately $20,765 in
November of 2004. Simultaneously with the receipt of this payment, the Company:
(a) paid the outstanding debt associated with the vessel in the amount of
$10,430; and (b) sold the vessel for proceeds of $8,776 to an unrelated third
party at a gain of approximately $266.

     This vessel represented a component of the Company whose operations and
cash flows are eliminated from the ongoing operations of the Company, as defined
in SFAS No. 144, Accounting for the Impairment or Disposal of Long-Lived Assets,
and the Company will not have significant continuing involvement in the
operations of the vessel after it was disposed. Therefore, the vessel and its
related operations, including the operations of the VIE, have been classified as
discontinued operations in the accompanying Consolidated Statement of Operations
and prior years' consolidated financial statements have been restated. See Note
4 of the Company's consolidated financial statements for a summary of the
Company's discontinued operations.

NOTE 4 -- DISCONTINUED OPERATIONS

     In September 2005, the management of the Company approved the disposal of a
vessel and as a result performed an impairment test on the recoverability of the
vessel in accordance with SFAS No. 144, Accounting for the Impairment or
Disposal of Long-Lived Assets, at September 30, 2005. The Company recorded an
impairment loss of $5,596 as a result of this evaluation. The vessel represents
a component of the Company whose operations and cash flows were eliminated from
the ongoing operations of the Company as defined by SFAS No. 144. In October
2005, the Company met all of the requirements to account for the disposal of the
vessel as discontinued operations; accordingly, the operations and impairment
charge of the vessel were reclassified as discontinued operations beginning in
the fourth quarter of 2005 and prior year consolidated financial statements have
been restated. In November 2005, the vessel was sold for $4,227, resulting in a
gain on disposal of $215.

     As discussed in Note 3, another vessel representing a component of the
Company was disposed of in November 2004.

     In December 2003, the Company approved a plan to sell the Venezuelan
operations of its Logistics Services segment. In February 2004, the Company sold
its Venezuelan Logistics operations for $1,506.

     On April 1, 1999, the Company adopted a plan to sell its South America
trade lanes, river barging operations, related subsidiaries, vessels and certain
other assets. In conjunction with the sale, the Company adopted a strategy to
exit from several other South America operations. This was treated as
discontinued operations in accordance with APB 30, Reporting the Results of
Operations -- Reporting the Effects of Disposal of a Segment of a Business, and
Extraordinary, Unusual and Infrequently Occurring Events and Transactions. As a
result of a claims review performed quarterly, the Company adjusted its net
liabilities and recorded expenses of $42 and income of $866 for the years ended
December 31, 2005 and 2004, respectively, related to its South America
discontinued operations. Furthermore, in the fourth quarter of 2004, the Company
recorded income of $4,021 which represented the reversal of accrued liabilities
for contingencies related to the return of equipment to the lessor. These
liabilities were no longer appropriate as the Company reached an agreement in
principle to sell operating equipment in the first quarter of 2005 to the party
currently subleasing the operating equipment.

                                        61
<PAGE>
                 CROWLEY MARITIME CORPORATION AND SUBSIDIARIES

           NOTES TO CONSOLIDATED FINANCIAL STATEMENTS -- (CONTINUED)
              FOR THE YEARS ENDED DECEMBER 31, 2005, 2004 AND 2003
               (IN THOUSANDS, EXCEPT SHARE AND PER SHARE AMOUNTS)

     The above operations have been reflected as discontinued operations in the
accompanying Consolidated Statements of Operations. Discontinued operations for
the years ended December 31 are summarized as follows:

<Table>
<Caption>
                                                           2005      2004      2003
                                                          -------   -------   -------
<S>                                                       <C>       <C>       <C>
Operating revenues......................................  $ 6,950   $36,952   $22,276
                                                          =======   =======   =======
Income (loss) from discontined operations before
  taxes.................................................  $(6,234)  $24,431   $ 1,512
Gain (loss) on disposal.................................      721        (5)       --
Income tax (expense) benefit............................    2,000    (9,400)     (300)
                                                          -------   -------   -------
Net income (loss) from discontinued operations..........  $(3,513)  $15,026   $ 1,212
                                                          =======   =======   =======
</Table>

     The combined assets and liabilities of these discontinued operations
included in the Company's Consolidated Balance Sheets at December 31, 2005 and
2004 are as follows:

<Table>
<Caption>
                                                               2005     2004
                                                              ------   ------
<S>                                                           <C>      <C>
Cash and cash equivalents...................................  $   --   $    4
Receivables, net............................................     175    1,887
Prepaid expenses and other assets...........................     348      731
                                                              ------   ------
Current assets of discontinued operations...................  $  523   $2,622
                                                              ======   ======
Accounts payable and accrued liabilities....................  $1,146   $1,736
Insurance claims payable....................................      79       --
Unearned revenue............................................      --      302
                                                              ------   ------
Current liabilities of discontinued operations..............  $1,225   $2,038
                                                              ======   ======
</Table>

NOTE 5 -- HURRICANE KATRINA

     On August 29, 2005 Hurricane Katrina struck the Gulf Coast of the United
States causing damage to a terminal in Gulfport, Mississippi leased by the
Company's Latin America Liner Service and the destruction of approximately 1,200
pieces of leased and owned equipment. In addition, there have been certain
general liability and cargo claims filed against the Company directly related to
the storm. Furthermore, a barge owned by the Company and docked in Mobile,
Alabama was washed ashore and is considered a constructive total loss.

     As a result of this event, the Company has recorded net estimated losses of
$1,200 as Operating Expense in its Consolidated Statement of Operations for the
year ended December 31, 2005. These losses are net of estimated insurance
proceeds of $1,245. Estimated insurance proceeds have been recorded up to the
amount of losses incurred on the owned and leased equipment. As of December 31,
2005, the Company has recorded $3,042 of insurance claims payable and $6,985 of
receivables from reinsurers arising from this event. The Company continues to
evaluate the impact of Hurricane Katrina and updates its estimates as facts and
circumstances continue to develop.

NOTE 6 -- RESTRICTED CASH

     At December 31, 2005, the Company has cash and cash equivalents recorded in
Prepaid Expenses and Other Current Assets in the amount of $5,917 restricted for
the operation of certain vessels which the Company manages for unrelated third
parties.

                                        62
<PAGE>
                 CROWLEY MARITIME CORPORATION AND SUBSIDIARIES

           NOTES TO CONSOLIDATED FINANCIAL STATEMENTS -- (CONTINUED)
              FOR THE YEARS ENDED DECEMBER 31, 2005, 2004 AND 2003
               (IN THOUSANDS, EXCEPT SHARE AND PER SHARE AMOUNTS)

NOTE 7 -- RECEIVABLES, NET

     Receivables, net consist of the following at December 31, 2005 and 2004:

<Table>
<Caption>
                                                                2005       2004
                                                              --------   --------
<S>                                                           <C>        <C>
Trade receivables...........................................  $185,369   $146,399
  Less allowance for doubtful accounts......................   (12,380)    (8,351)
                                                              --------   --------
Trade receivables, net......................................   172,989    138,048
                                                              --------   --------
Other receivables...........................................    27,768     32,070
  Less allowance for doubtful accounts......................      (150)       (27)
                                                              --------   --------
Other receivables, net......................................    27,618     32,043
                                                              --------   --------
                                                              $200,607   $170,091
                                                              ========   ========
</Table>

     Included in trade receivables at December 31, 2005 is a receivable balance
of $191 from a retail gas station in Alaska which is owned by an employee of the
Company. The Company recorded $1,135 in Fuel Sales during 2005 related to this
retail gas station.

     Other receivables principally include insurance claims receivable from
third party reinsurance companies and rebillable charges to customers for vessel
management and other services.

NOTE 8 -- RECEIVABLE FROM RELATED PARTY

     The Company has entered into Split Dollar Life Insurance Agreements
("Agreements") with the Company's President, Chief Executive Officer, Chairman
of the Board, and principal stockholder (the "Employee") whereby the Company
paid the premiums on twelve life insurance policies ("Policies") of the Employee
and a related Director prior to 2003.

     In December 2003, the Company and the Employee reached a settlement
agreement whereby three of the Policies were cancelled and the Employee
reimbursed the Company $7,508 which represented the total amount of net premiums
paid by the Company on those Policies. In order to reimburse the Company, the
Employee obtained a personal loan. The Company is not obligated to pay this loan
and has not guaranteed repayment of this loan. However, the Company has agreed
to reimburse the Employee for the interest on the loan, which is accounted for
as compensation expense.

     Upon death of the insureds, the Company will receive the total paid for
premiums under the remaining nine Policies, net of certain payments made by or
on behalf of the Employee. If the Company and the Employee terminate the
Agreements, the Company will be paid an amount equal to the lesser of the Policy
cash surrender value or the amounts of premiums paid by the Company reduced by
certain payments made by or on behalf of the Employee. The Company has accounted
for this receivable with a balance of $11,540 and $11,177 at December 31, 2005
and 2004, respectively, at the lower of the net premium payments made or the
cash surrender value of the Policies. The receivable is non-interest bearing and
is stated at the amount the Company is entitled to receive under the Agreement.

NOTE 9 -- DIRECTOR'S LIFE INSURANCE

     In December 2003, the Company purchased life insurance policies which
insure the life of a member of the Board of Directors. The Company is the owner
and beneficiary of the policies. Accordingly, the Company has recorded the cash
surrender value of the policies of $5,778 and $3,790 in Other Assets in the
accompanying Consolidated Balance Sheets as of December 31, 2005 and 2004,
respectively.

                                        63
<PAGE>
                 CROWLEY MARITIME CORPORATION AND SUBSIDIARIES

           NOTES TO CONSOLIDATED FINANCIAL STATEMENTS -- (CONTINUED)
              FOR THE YEARS ENDED DECEMBER 31, 2005, 2004 AND 2003
               (IN THOUSANDS, EXCEPT SHARE AND PER SHARE AMOUNTS)

NOTE 10 -- GOODWILL

     The following is a summary of the carrying amount of goodwill and the
goodwill acquired for the years ended December 31, 2005 and 2004:

<Table>
<Caption>
                             DECEMBER 31,     ACQUIRED IN    DECEMBER 31,     ACQUIRED IN    DECEMBER 31,
SEGMENT                          2003            2004            2004            2005            2005
-------                     ---------------   -----------   ---------------   -----------   ---------------
<S>                         <C>               <C>           <C>               <C>           <C>
Petroleum Services........      $44,786          $  --          $44,786         $8,483          $53,269
Marine Services...........           --             --               --            758              758
                                -------          -----          -------         ------          -------
                                $44,786          $  --          $44,786         $9,241          $54,027
                                =======          =====          =======         ======          =======
</Table>

     Goodwill acquired during 2005 is more fully described in Note 2.

NOTE 11 -- INTANGIBLES

     The gross carrying amount and accumulated amortization of the Company's
intangible assets other than goodwill as of December 31, 2005 and 2004 are as
follows:

<Table>
<Caption>
                                              REMAINING
                                              WEIGHTED
                                               AVERAGE       GROSS                      NET
                                            AMORTIZATION    CARRYING   ACCUMULATED     BOOK
                                               PERIOD        AMOUNT    AMORTIZATION    VALUE
                                            -------------   --------   ------------   -------
<S>                                         <C>             <C>        <C>            <C>
2005
Deferred loan costs.......................    16.7 years    $14,571       $4,230      $10,341
Non-compete agreement.....................     4.8 years      3,000          150        2,850
Customer lists............................     7.9 years      7,932        1,472        6,460
                                                            -------       ------      -------
                                              12.1 years    $25,503       $5,852      $19,651
                                                            =======       ======      =======
2004
Deferred loan costs.......................    17.4 years    $14,571       $3,165      $11,406
Non-compete agreement.....................     2.8 years      1,646          912          734
Customer lists............................     3.5 years      2,723          738        1,985
                                                            -------       ------      -------
                                              14.7 years    $18,940       $4,815      $14,125
                                                            =======       ======      =======
</Table>

     Based on impairment evaluations performed in the second quarter of 2005 and
the fourth quarter of 2004, the Company recorded impairment losses on
non-compete agreements in its Logistics Services segment in the amounts of $623
and $380, respectively. This impairment is recorded in Depreciation and
Amortization in the accompanying Consolidated Statement of Operations.

     Amortization expense related to the intangible assets for the years ended
December 31, 2005, 2004, and 2003 was $2,683, $2,381 and $2,049, respectively.
The amortization expense for each of the five succeeding fiscal years ending
December 31 is estimated to be as follows:

<Table>
<S>                                                           <C>
2006........................................................  $2,754
2007........................................................   2,714
2008........................................................   2,197
2009........................................................   1,801
2010........................................................   1,568
</Table>

                                        64
<PAGE>
                 CROWLEY MARITIME CORPORATION AND SUBSIDIARIES

           NOTES TO CONSOLIDATED FINANCIAL STATEMENTS -- (CONTINUED)
              FOR THE YEARS ENDED DECEMBER 31, 2005, 2004 AND 2003
               (IN THOUSANDS, EXCEPT SHARE AND PER SHARE AMOUNTS)

NOTE 12 -- CAPITAL CONSTRUCTION FUND

     Under its agreement with the U.S. Government, the Company is allowed to
make deposits to the Capital Construction Fund ("CCF") of earnings and gains
from qualified operations without payment of federal taxes. CCF cash and
marketable securities are restricted to provide for the replacement of vessels,
additional vessels, or improvement of vessels within strict guidelines
established by the U.S. Maritime Administration for use of these funds. Deposits
to the CCF are considered tax deductions in the year designated; however, they
are taxable, with interest payable from the year of deposit, if withdrawn for
general corporate purposes or other non-qualified purposes, or upon termination
of the agreement. Qualified withdrawals for investments in vessels and certain
related equipment do not give rise to a current tax liability, but reduce the
depreciable bases of the vessels or other assets for income tax purposes.

     At December 31, 2005, the Company has designated $41,000 of qualified
earnings as "accrued deposits" to its CCF. Such accrued deposits are reflected
in the Consolidated Balance Sheets as a reduction of current assets.
Furthermore, the Company has reduced its current tax liability and increased its
deferred tax liability at December 31, 2005 for the effects of this accrued
deposit.

NOTE 13 -- PROPERTY AND EQUIPMENT, NET

     Property and equipment, net consists of the following at December 31, 2005
and 2004:

<Table>
<Caption>
                                                                 2005         2004
                                                              ----------   ----------
<S>                                                           <C>          <C>
Floating equipment..........................................  $  838,348   $  853,774
Other operating equipment...................................     165,867      119,206
Buildings, leasehold improvements and other.................     107,149       89,619
Construction in progress....................................      84,415       20,930
                                                              ----------   ----------
                                                               1,195,779    1,083,529
Less accumulated depreciation and amortization..............    (588,460)    (590,697)
                                                              ----------   ----------
                                                                 607,319      492,832
Restricted cash and cash equivalents........................          --        1,157
                                                              ----------   ----------
Total property and equipment................................  $  607,319   $  493,989
                                                              ==========   ==========
</Table>

     Restricted cash and cash equivalents included in property and equipment
represent funds for the future purchase of property and equipment currently
restricted by lenders. Depreciation and amortization of property and equipment
was $44,814, $43,976 and $48,207 for the years ended December 31, 2005, 2004 and
2003, respectively.

     Capitalized interest is recorded as part of the asset to which it relates
and is amortized over the estimated useful life of the asset. Interest of
$2,478, $335 and $627 was capitalized in 2005, 2004 and 2003, respectively.

     The Company has certain vessels it has designated as surplus and has
implemented a plan to dispose of them. The Company annually evaluates the
recoverability of its carrying value of these vessels and as a result recorded a
write down in its Marine Services Segment of $1,206 in 2004. The net book value
of these vessels at December 31, 2005 and 2004 is $1,516 and $10,252,
respectively.

                                        65
<PAGE>
                 CROWLEY MARITIME CORPORATION AND SUBSIDIARIES

           NOTES TO CONSOLIDATED FINANCIAL STATEMENTS -- (CONTINUED)
              FOR THE YEARS ENDED DECEMBER 31, 2005, 2004 AND 2003
               (IN THOUSANDS, EXCEPT SHARE AND PER SHARE AMOUNTS)

NOTE 14 -- LEASES AND LEASE COMMITMENTS

     The Company leases and subleases vessels on both a time charter and
bareboat charter basis. It also leases and subleases terminals, office
facilities, and operating equipment. Certain of the Company's leases contain
various options for renewals and the ability to purchase the assets leased at
fair value.

     Future minimum annual rental payments and receipts required under operating
leases that have initial or remaining noncancelable lease terms in excess of one
year, excluding renewal options, as of December 31, 2005 are summarized as
follows:

<Table>
<Caption>
                                                              PAYMENTS   RECEIPTS
                                                              --------   --------
<S>                                                           <C>        <C>
2006........................................................  $ 56,693   $ 97,456
2007........................................................    37,140     63,080
2008........................................................    27,560     62,471
2009........................................................    17,186     47,052
2010........................................................     7,925     23,031
Thereafter..................................................    28,061         --
                                                              --------   --------
                                                              $174,565   $293,090
                                                              ========   ========
</Table>

     Total rental expense for all leases, including short-term leases, was
$111,912, $105,969 and $116,080 for the years ended December 31, 2005, 2004 and
2003, respectively.

     Certain lease agreements contain restrictive covenants which require: (a)
maintenance of minimum amounts of net worth; and (b) maintenance of a net debt
(as defined in such agreements) to earnings before interest, taxes, depreciation
and amortization not to exceed 6.0 to 1. The Company was in compliance with all
covenants under its leasing agreements at December 31, 2005.

                                        66
<PAGE>
                 CROWLEY MARITIME CORPORATION AND SUBSIDIARIES

           NOTES TO CONSOLIDATED FINANCIAL STATEMENTS -- (CONTINUED)
              FOR THE YEARS ENDED DECEMBER 31, 2005, 2004 AND 2003
               (IN THOUSANDS, EXCEPT SHARE AND PER SHARE AMOUNTS)

NOTE 15 -- LONG-TERM DEBT

     Long-term debt consists of the following at December 31, 2005 and 2004:

<Table>
<Caption>
                                                                2005       2004
                                                              --------   --------
<S>                                                           <C>        <C>
United States Government-guaranteed ship-financing bonds and
  notes (Title XI), collateralized by vessels with a net
  book value of $207,831 at December 31, 2005, bearing
  interest from 4.96% to 6.75%, payable in installments
  through 2027..............................................  $184,659   $194,605
Debt collateralized by vessels with a net book value of
  $82,009 at December 31, 2005, bearing interest from 5.35%
  to 6.09%, payable in installments through 2013............   141,653    163,568
Industrial revenue bonds, with variable interest rates of
  3.1% to 3.47% at December 31, 2005, principal balance of
  $10,200 payable in installments beginning in 2006 through
  2013, and principal balance of $4,000 payable in 2014.....    14,200     14,200
Revolver, collateralized by vessels with a net book value of
  $45,266 at December 31, 2005, bearing interest of 4.25%
  based on LIBOR plus 1.375%................................    10,000         --
Other, bearing interest from 6.75% to 7.50%, payable in
  installments through 2010.................................     5,600         --
                                                              --------   --------
                                                               356,112    372,373
Less current portion........................................   (33,426)   (30,993)
                                                              --------   --------
                                                              $322,686   $341,380
                                                              ========   ========
</Table>

     The Company's $95,000 Amended and Restated Credit Agreement (the "Revolving
Credit Agreement") expires in February 2009. Borrowing rates are based on either
Eurodollar or Bank Base rates. Borrowings outstanding under the Revolving Credit
Agreement at December 31, 2005 were $10,000 which was repaid in January 2006.
Outstanding letters of credit totaled $34,338 at December 31, 2005, leaving
$50,662 borrowing capacity under the Revolving Credit Agreement.

     The Company's financing agreements, including its Revolving Credit
Agreement, contain restrictive covenants which require, among other things: (a)
maintenance of a net debt (as defined in such agreements) to stockholders'
equity ratio which shall not exceed 2.25 to 1; (b) a maximum total debt (as
defined by such agreement) to earnings before interest, taxes, depreciation,
amortization and rent expense (as defined by such agreement) not to exceed 3.0
to 1; and (c) maintenance of an interest coverage ratio of 3.5 to 1. While the
Company is prohibited from repurchasing shares of any class of capital stock or
declaring or paying any dividend, it may repurchase common stock from employee
stock ownership plans and pay dividends in any twelve-month period at a combined
cost not to exceed $10,000. At December 31, 2005, the Company was in compliance
with all covenants under its financing arrangements.

                                        67
<PAGE>
                 CROWLEY MARITIME CORPORATION AND SUBSIDIARIES

           NOTES TO CONSOLIDATED FINANCIAL STATEMENTS -- (CONTINUED)
              FOR THE YEARS ENDED DECEMBER 31, 2005, 2004 AND 2003
               (IN THOUSANDS, EXCEPT SHARE AND PER SHARE AMOUNTS)

     Annual scheduled payments for long-term debt as of December 31, 2005 are as
follows:

<Table>
<S>                                                           <C>
  2006......................................................  $ 33,426
  2007......................................................    33,699
  2008......................................................    35,815
  2009......................................................    84,865
  2010......................................................    11,962
Thereafter..................................................   156,345
                                                              --------
                                                              $356,112
                                                              ========
</Table>

     Total interest expense, including capitalized interest, for the years ended
December 31, 2005, 2004 and 2003 was $22,113, $20,500 and $20,356, respectively.

NOTE 16 -- INCOME TAXES

     The income tax provision (benefit) on income from continuing operations
includes the following for the years ended December 31, 2005, 2004 and 2003:

<Table>
<Caption>
                                                            2005      2004      2003
                                                           -------   -------   ------
<S>                                                        <C>       <C>       <C>
Current:
  Federal................................................  $ 7,416   $(3,892)  $ (979)
  State..................................................    1,016       293       37
  Foreign................................................    5,046     2,629    3,097
                                                           -------   -------   ------
     Total current.......................................   13,478      (970)   2,155
                                                           -------   -------   ------
Deferred:
  Federal................................................    9,139     2,828    5,107
  State..................................................      783       242      438
                                                           -------   -------   ------
     Total deferred......................................    9,922     3,070    5,545
                                                           -------   -------   ------
                                                           $23,400   $ 2,100   $7,700
                                                           =======   =======   ======
</Table>

     A reconciliation of the federal statutory income tax for 2005, 2004 and
2003 at a rate of 35%, and the provision for federal, foreign, and state taxes
on income is as follows for the years ended December 31, 2005, 2004 and 2003:

<Table>
<Caption>
                                                           2005      2004      2003
                                                          -------   -------   -------
<S>                                                       <C>       <C>       <C>
Federal income tax on income at the statutory rate of
  35%...................................................  $23,026   $ 4,196   $ 6,905
Excess of book over tax depreciation on assets
  constructed with CCF..................................      658       691       862
State and foreign income tax less federal income tax
  benefit...............................................    2,102       250       880
Nondeductible expenses..................................      (50)      141        77
Net change in tax reserves..............................   (3,982)   (3,516)   (1,029)
Valuation allowance on foreign losses...................    1,772        --        --
Other...................................................     (126)      338         5
                                                          -------   -------   -------
                                                          $23,400   $ 2,100   $ 7,700
                                                          =======   =======   =======
</Table>

                                        68
<PAGE>
                 CROWLEY MARITIME CORPORATION AND SUBSIDIARIES

           NOTES TO CONSOLIDATED FINANCIAL STATEMENTS -- (CONTINUED)
              FOR THE YEARS ENDED DECEMBER 31, 2005, 2004 AND 2003
               (IN THOUSANDS, EXCEPT SHARE AND PER SHARE AMOUNTS)

     The net deferred income tax assets (liabilities) shown below, both current
and noncurrent, result from the tax effects of the following temporary
differences at December 31, 2005 and 2004:

<Table>
<Caption>
                                                                2005        2004
                                                              ---------   ---------
<S>                                                           <C>         <C>
Deferred tax assets:
  Non-deductible reserves...................................  $  24,666   $  19,387
  Treasury lock agreement...................................      2,225       2,449
  Intangibles...............................................        985          --
  Other.....................................................      2,434       2,765
  Foreign losses............................................      3,143       1,790
  Tax credits...............................................         --         889
                                                              ---------   ---------
                                                                 33,453      27,280
  Valuation allowance.......................................     (3,143)     (2,260)
                                                              ---------   ---------
                                                                 30,310      25,020
                                                              ---------   ---------
Deferred tax liabilities:
  Excess of book carrying values over tax bases of
     depreciable assets.....................................    (98,519)    (95,965)
  Capital Construction Fund accrued deposits................    (15,580)         --
  Drydocking................................................     (4,988)     (8,778)
  Foreign subsidiaries......................................     (1,544)         --
                                                              ---------   ---------
                                                               (120,631)   (104,743)
                                                              ---------   ---------
  Net deferred tax liability................................    (90,321)    (79,723)
  Current asset.............................................     19,681      13,008
                                                              ---------   ---------
  Long-term liability.......................................  $(110,002)  $ (92,731)
                                                              =========   =========
</Table>

     As discussed in Note 12 above, the Company has restricted CCF funds. Taxes
on CCF deposits and earnings made prior to January 1, 1993 are being recognized
over the remaining lives of the assets purchased with qualified CCF withdrawals.
At December 31, 2005, 2004 and 2003, the difference between the book carrying
values and the tax bases of assets as a result of these past deposits for which
the Company has not provided taxes, is $12,455, $14,338 and $16,311,
respectively.

NOTE 17 -- FAIR VALUE OF FINANCIAL INSTRUMENTS

     The estimated fair value amounts of financial instruments have been
determined by the Company using available market information and valuation
methodologies. However, considerable judgment is required in interpreting market
data to develop the estimates of fair value. In addition, costs of refinancing
and/or prepayment penalties have not been considered. Accordingly, the estimates
presented are not indicative of the amounts that the Company could realize in a
current market exchange. The use of different market assumptions and/or
estimation methodologies could have a material effect on the estimated fair
value amount.

     The methods and assumptions used to estimate the fair value of each class
of financial instruments, which potentially subject the Company to
concentrations of credit risk, are set forth below:

     - Cash and cash equivalents, marketable securities, and restricted
       cash -- The Company places its temporary cash investments with high
       credit quality financial institutions and, by policy, limits the

                                        69
<PAGE>
                 CROWLEY MARITIME CORPORATION AND SUBSIDIARIES

           NOTES TO CONSOLIDATED FINANCIAL STATEMENTS -- (CONTINUED)
              FOR THE YEARS ENDED DECEMBER 31, 2005, 2004 AND 2003
               (IN THOUSANDS, EXCEPT SHARE AND PER SHARE AMOUNTS)

       amount of credit exposure to any one financial institution. The carrying
       amounts reported in the Consolidated Balance Sheets for these items
       approximate fair value at December 31, 2005 and 2004.

     - Trade receivables -- Concentrations of credit risk with respect to trade
       receivables are limited due to the large number of customers comprising
       the Company's customer base, and their dispersion across many diverse
       industries and geographies. The carrying amounts reported in the
       Consolidated Balance Sheets for trade receivables approximate fair value
       at December 31, 2005 and 2004.

     - Long-term debt -- Valuations for long-term debt are determined based on
       borrowing rates currently available to the Company for loans with similar
       terms and maturities. At December 31, 2005, the estimated fair value of
       the Company's debt, with a carrying value of $356,112 is $363,189. At
       December 31, 2004, the estimated fair value of the Company's debt, with a
       carrying value of $372,373 is $381,784.

NOTE 18 -- STOCKHOLDERS' EQUITY

PREFERRED STOCK

     Dividends on preferred class A convertible stock are cumulative at 5% per
annum, payable annually on July 1st. Cumulative dividends in arrears bear
interest at a rate determined by the Board of Directors between 8% and 12%,
inclusive, compounded annually. There are no dividends in arrears at December
31, 2005. These shares, together with unpaid cumulative dividends and interest,
if any, are convertible to common stock at a conversion price of $1,200 per
share, subject to specified anti-dilution adjustments. Shares may be redeemed,
at the Company's option, for $100 per share plus unpaid cumulative dividends and
interest.

EARNINGS PER COMMON SHARE

     The computations of the numerator and denominator for calculating basic and
diluted earnings per common share for the years ended December 31, 2005, 2004
and 2003 are as follows:

<Table>
<Caption>
                                                         2005       2004       2003
                                                       --------   --------   --------
<S>                                                    <C>        <C>        <C>
Numerator:
Income from continuing operations....................  $ 42,389   $  9,889   $ 12,029
  Less preferred stock dividends.....................    (1,575)    (1,575)    (1,575)
  Less change in fair value of redeemable common
     stock...........................................      (330)        --         --
                                                       --------   --------   --------
  Income for basic earnings per common share from
     continuing operations...........................    40,484      8,314     10,454
Income (loss) from discontinued operations...........    (3,513)    15,026      1,212
Cumulative effect of change in accounting
  principle..........................................        --         --       (420)
                                                       --------   --------   --------
  Net income for basic earnings per common share.....    36,971     23,340     11,246
  Plus preferred dividends...........................     1,575      1,575      1,575
                                                       --------   --------   --------
  Net income for diluted earnings per common share...  $ 38,546   $ 24,915   $ 12,821
                                                       ========   ========   ========
Denominator:
  Basic weighted average shares......................   134,525    135,302    135,702
  Effect of dilutive securities -- convertible
     preferred stock.................................    26,906     26,250     26,250
                                                       --------   --------   --------
  Diluted weighted average shares....................   161,431    161,552    161,952
                                                       ========   ========   ========
</Table>

                                        70
<PAGE>
                 CROWLEY MARITIME CORPORATION AND SUBSIDIARIES

           NOTES TO CONSOLIDATED FINANCIAL STATEMENTS -- (CONTINUED)
              FOR THE YEARS ENDED DECEMBER 31, 2005, 2004 AND 2003
               (IN THOUSANDS, EXCEPT SHARE AND PER SHARE AMOUNTS)

NOTE 19 -- EMPLOYEE BENEFIT PLANS

     The Company contributes to Company defined contribution pension plans
covering substantially all employees. The Company also makes contributions to
non-Company sponsored multiemployer defined benefit and defined contribution
pension and welfare plans pursuant to collective bargaining agreements with
labor unions representing the Company's sea-going personnel, in accordance with
their terms. Expenses included in operations under these benefit plans are as
follows for the years ended December 31, 2005, 2004 and 2003:

<Table>
<Caption>
                                                           2005      2004      2003
                                                          -------   -------   -------
<S>                                                       <C>       <C>       <C>
Company benefit plans...................................  $ 7,119   $ 5,416   $ 5,439
Non-Company sponored benefit plans......................   11,318    11,406     9,707
                                                          -------   -------   -------
                                                          $18,437   $16,822   $15,146
                                                          =======   =======   =======
</Table>

     The plans listed below are the Company-sponsored plans for which the
non-union salaried and administrative employees are eligible to participant.

  CROWLEY RETIREMENT INCOME SYSTEM PLAN

     The Company sponsors the Crowley Retirement Income System Plan (the
"CRISP"). The CRISP is a profit sharing plan designed to provide eligible
employees with retirement benefits. The Company contributes 3% of eligible
earnings to participants' accounts and matches 50% of employee contributions up
to 6%.

  DEFERRED COMPENSATION PLAN

     The Company has a deferred compensation plan for which the participants and
annual contributions, if any, are determined by the Compensation Committee or
the Executive Compensation Subcommittee. For each year's contribution,
participants become fully vested after five years, upon attaining age 65, upon
death, or other financial criteria as established by the Compensation Committee
or the Executive Compensation Subcommittee. Funds for each year's contribution
may be distributed, at the participant's election, upon becoming 100% vested, at
attainment of age 65 or upon retirement. If the participant dies before
receiving the distribution of his or her account, such account will be
distributed to his or her beneficiary in a lump sum cash payment as soon as
practicable after the participant's death. Contributions are placed in an
irrevocable rabbi trust available only to the participants and the Company's
creditors.

  RETIREMENT STOCK PLAN

     The Company sponsors the Crowley Maritime Corporation Retirement Stock Plan
("RSP"). Contributions to the RSP are made by the Company based on an annual
determination made by the Board of Directors. If stock is contributed, the stock
is valued at the stock's non-marketable minority interest fair value, as
determined by an independent appraisal. No contributions were made during the
years ended December 31, 2005, 2004 and 2003. At December 31, 2005, 2004 and
2003, the plan held 8,579, 9,063 and 9,372 shares of common stock, respectively.
All participant accounts are fully vested. Distribution of shares allocated to
RSP participants are made as soon as practicable following the participant's
death, disability retirement, termination of Company employment after attainment
of age 65 or termination of employment if the participants account balance is
less than one share. All other vested participants are eligible for distribution
on the earlier of: (a) the third calendar quarter of the third plan year that
follows the plan year in which the participant terminates Company employment; or
(b) the attainment of age 65. All distributions to a participant are in the form
of a single, lump sum distribution of whole shares of common stock. Upon the
date of distribution and for the immediately succeeding ten days, such shares of
Company stock shall be subject to the Company's right to

                                        71
<PAGE>
                 CROWLEY MARITIME CORPORATION AND SUBSIDIARIES

           NOTES TO CONSOLIDATED FINANCIAL STATEMENTS -- (CONTINUED)
              FOR THE YEARS ENDED DECEMBER 31, 2005, 2004 AND 2003
               (IN THOUSANDS, EXCEPT SHARE AND PER SHARE AMOUNTS)

repurchase such shares for cash equal to their fair value, (based on a
non-marketable minority basis) determined by an independent appraisal as of the
preceding calendar year-end.

  EMPLOYEE STOCK OWNERSHIP PLAN

     Effective January 1, 2005, the Company is sponsoring the Crowley Maritime
Corporation Employee Stock Ownership Plan (the "ESOP") as a vehicle to enable
participants to acquire stock ownership interests in the Company without
requiring any cash outlay, reduction in pay or other personal investment on the
part of the participant. Eligible employees of the Company, as defined by the
ESOP, who work at least 22 Weeks of Service during a Plan Year and are employed
as of December 31, or have terminated employee status during the Plan Year due
to death, disability or retirement are eligible for allocation of shares.

     In June 2005, the ESOP was funded by a $1,414 loan (the "ESOP Loan") from
the Company that bears interest at 5.0% per annum. The ESOP Loan was used to
purchase 1,000 shares of common stock from the Company. The ESOP Loan will be
repaid over a ten-year term from the Company's plan contributions. The shares of
common stock purchased with the ESOP Loan are pledged as collateral for the debt
until the shares are released for allocation to eligible employees.

     The ESOP will release shares of common stock for allocation to eligible
employees over the remaining term of the ESOP Loan based on the amount of
principal paid by the ESOP. Eligible Employees are vested in allocated shares in
5 years of service after January 1, 2005. Shares pledged as collateral
(unallocated shares) are reported in "Unearned ESOP Common Stock" in the
accompanying Consolidated Balance Sheets.

     As shares are committed to be released, the Company records compensation
expense equal to the fair value of the Company's common stock. Because the
Company's stock is not actively traded on any exchange, its fair value is
determined annually by an independent appraisal based on a non-marketable
minority interest basis. The independent appraisal is obtained during the second
quarter of each year. The shares released are treated as outstanding for
purposes of computing earnings per share. The Company has recognized $147 of
compensation expense for the year ended December 31, 2005, respectively, based
upon the shares committed to be released.

     Each share of common stock held by the ESOP contains a put option which,
upon distribution of the common stock to a participant, entitles the participant
to put the common stock to the Company for the fair value, as defined by the
ESOP. Therefore, the Company has classified the maximum cash obligation of the
common stock held by the ESOP as mezzanine equity under the caption "redeemable
common stock" in the accompanying Consolidated Balance Sheets.

     At December 31, 2005, the ESOP held the following shares:

<Table>
<S>                                                           <C>
ESOP shares committed to be released........................     104
Unearned ESOP shares........................................     896
                                                              ------
Total shares held by ESOP...................................   1,000
                                                              ======
Fair value of unearned ESOP shares..........................  $1,267
</Table>

  STOCK SAVINGS PLAN

     The Company sponsors the Stock Savings Plan (the "SSP"), a profit sharing
plan which holds 4,075 shares of the Company's common stock at December 31,
2005, all of which are fully released and vested. Upon distribution of common
stock from the SSP, each share of common stock contains a put option which
provides the participants with the option to sell their stock to the Company
upon retirement, death or

                                        72
<PAGE>
                 CROWLEY MARITIME CORPORATION AND SUBSIDIARIES

           NOTES TO CONSOLIDATED FINANCIAL STATEMENTS -- (CONTINUED)
              FOR THE YEARS ENDED DECEMBER 31, 2005, 2004 AND 2003
               (IN THOUSANDS, EXCEPT SHARE AND PER SHARE AMOUNTS)

after a break in service for the common stock's fair value (based on a
marketable minority basis) determined by an independent appraisal as of the
preceding calendar year-end.

     In the second quarter of 2005, the Company reclassified the maximum cash
obligation at December 31, 2004 of the SSP stock to "Redeemable Common Stock"
included in mezzanine equity from "Stockholders' Equity" in the accompanying
Consolidated Balance Sheets in accordance with Emerging Issues Task Force 89-11,
Sponsor's Balance Sheet Classification of Capital Stock with a Put Option Held
by an Employee Stock Ownership Plan. The amount reclassified at December 31,
2004 was $8,700. The maximum cash obligation at December 31, 2005 of the SSP
stock is $8,036.

     The Company has evaluated the impact of this reclassification on its basic
and diluted earnings per common share in its previously issued audited
consolidated financial statements and unaudited quarterly financial statements.
The Company determined the effect of this reclassification was not material to
any prior periods and therefore, has not restated any basic and diluted earnings
per common share in its audited annual and unaudited quarterly financial
statements for prior periods.

NOTE 20 -- ENVIRONMENTAL COSTS

     The Company's estimates for environmental remediation costs include labor
costs, equipment rental, engineering, consulting fees and material costs.
Estimates for environmental remediation are based on the phase of the remedial
action, the type of technology being used, the experience of the type of
technology used and on the environmental consultant's experience or personal
experience. Other costs, such as legal and regulatory oversight, are based on
experience with similar remedial projects in the same geographic region as the
site in question. The recorded liabilities for the estimated future
environmental costs at December 31, 2005 and 2004 are approximately $3,874 and
$4,399, respectively. The estimated annual payments for future environmental
costs as of December 31, 2005 are as follows:

<Table>
<S>                                                           <C>
2006........................................................  $  905
2007........................................................     849
2008........................................................     424
2009........................................................     414
2010........................................................     162
Thereafter..................................................   1,120
                                                              ------
                                                              $3,874
                                                              ======
</Table>

     The Company has classified $905 as Accounts Payable and Accrued Liabilities
and $2,969 as Other Liabilities in the accompanying Consolidated Balance Sheet
at December 31, 2005. The actual provision for environmental costs has not
differed materially from the amounts recorded.

     During 2003 and 2002, the Company reached agreements with its insurance
underwriters to settle all costs incurred to date and any future costs related
to environmental remediation resulting from occurrences prior to 1986. The
amounts of the settlements were $1,000 and $5,324, in 2003 and 2002,
respectively, net of unrecoverable amounts due to insolvency of certain
underwriters. Both of these settlements were collected during 2003. The Company
recognized $1,000 and $2,229 as a reduction to claims expense in 2003 and 2002,
respectively.

                                        73
<PAGE>
                 CROWLEY MARITIME CORPORATION AND SUBSIDIARIES

           NOTES TO CONSOLIDATED FINANCIAL STATEMENTS -- (CONTINUED)
              FOR THE YEARS ENDED DECEMBER 31, 2005, 2004 AND 2003
               (IN THOUSANDS, EXCEPT SHARE AND PER SHARE AMOUNTS)

NOTE 21 -- COMMITMENTS AND CONTINGENCIES

  GENERAL LITIGATION

     In the normal course of business, the Company is subject to legal
proceedings, lawsuits and other claims. Such matters are subject to many
uncertainties and outcomes are not predictable with assurance. Consequently, the
ultimate aggregate amount of monetary liability or financial impact with respect
to these matters at December 31, 2005, cannot be ascertained. While these
matters could affect the Company's operating results for any one quarter when
resolved in future periods and while there can be no assurance with respect
thereto, management believes, with the advice of outside legal counsel, that
after final disposition, any monetary liability or financial impact to the
Company from these matters (except as otherwise disclosed below) would not be
material to the Company's consolidated financial condition, results of
operations or cash flows.

  LITIGATION INVOLVING DIRECTORS

     A purported class action and derivative complaint was filed on November 30,
2004, in the Court of Chancery (the "Court") in the State of Delaware against
the Company and its Board of Directors alleging breaches of the fiduciary duties
owed by the director defendants to the Company and its stockholders. Among other
things, the complaint alleges that the defendants have pursued a corporate
policy of entrenching the Company's controlling stockholder, Thomas B. Crowley,
Jr., and certain members of the Crowley family by allegedly expending corporate
funds improperly. The plaintiffs seek damages and other relief. On February 25,
2005, the defendants filed a motion to dismiss the complaint. On September 30,
2005, the Court held a hearing and requested additional briefing on several
issues from the plaintiff and the Company. That motion was briefed and argued on
September 30, 2005. At oral argument, the plaintiffs proposed amending their
complaint. On December 27, 2005, plaintiffs formally moved for leave to amend
their complaint, and another purported stockholder filed a motion to intervene
in the action. On January 19, 2006, the Court ordered that defendants' motion to
dismiss is stayed pending resolution of the motion to amend and motion to
intervene. Defendants' opposition briefs to the motion to amend and motion to
intervene were filed February 27, 2006. The Company believes that there are
legal and factual defenses to these claims and intends to defend this action
vigorously. The Company believes that an adverse outcome of this case would not
have a material effect on the financial condition, results of operations or cash
flows.

  ASBESTOS LITIGATION

     The Company is currently named as a defendant with other shipowners and
numerous other defendants with respect to approximately 16,000 maritime asbestos
cases and other toxic tort cases, most of which were filed in the Federal Courts
in Cleveland, Ohio and Detroit, Michigan. Each of these cases, filed on behalf
of a seaman or his personal representative, alleges injury or illness based upon
exposure to asbestos or other toxic substances and sets forth a claim based upon
the theory of negligence under the Jones Act and on the theory of
unseaworthiness under the General Maritime Law.

     Pursuant to an order issued by the Judicial Panel on Multidistrict
Litigation dated July 29, 1991, all Ohio and Michigan cases ("the Multidistrict
Litigation") were transferred to the United States District Court for the
Eastern District of Pennsylvania for pretrial processing. On May 1, 1996, the
cases were dismissed subject to reinstatement in the future. At present, it is
not known when or how long the process will require. Approximately 31 of the
Ohio and Michigan claims which name one or more Company entities as defendants
have been reinstated, but the plaintiffs' attorneys are not actively pursuing
the cases. Although nine years have passed since the dismissal, it is not known
whether a plan can be developed that will result in settlement of the cases. If
not settled, upon reinstatement, the cases should be remanded to the Ohio and
Michigan Federal Courts.

                                        74
<PAGE>
                 CROWLEY MARITIME CORPORATION AND SUBSIDIARIES

           NOTES TO CONSOLIDATED FINANCIAL STATEMENTS -- (CONTINUED)
              FOR THE YEARS ENDED DECEMBER 31, 2005, 2004 AND 2003
               (IN THOUSANDS, EXCEPT SHARE AND PER SHARE AMOUNTS)

     In addition, the Company is a defendant with others in approximately 88
asbestosis or other toxic cases pending in jurisdictions other than the Eastern
District of Pennsylvania. These other jurisdictions include state and federal
courts located in Northern California, Oregon, Texas, Louisiana, Florida,
Maryland and New York. These cases contain allegations of injury similar to
those alleged in the Multidistrict Litigation cases.

     Substantially all of the cases described above, as with other asbestos and
toxic tort cases in which the Company has been named as a party, not only
involve numerous named defendants, but also generally do not allege specific
monetary damages beyond the jurisdictional requirement. If specific damages are
sought, they would apply in various amounts against various defendants.

     In many claims that have been asserted against the Company, the plaintiffs
have been unable to establish any causal relationship to the Company. In
addition, in many asbestos cases, the plaintiffs have been unable to demonstrate
that they have suffered any injury or compensable loss that resulted from
asbestos exposure or that alleged exposure was related to the Company.

     The Company has insurance coverage that may reimburse it for a substantial
portion of: (a) the costs incurred defending against asbestos claims; and (b)
the amounts the Company pays to settle claims or honor judgments by courts. The
coverage is provided by a large number of insurance policies written by dozens
of insurance companies over a period of many years. The amount of insurance
coverage depends on the nature of the alleged exposure to asbestos, the specific
subsidiary against which an asbestos claim is asserted and the terms and
conditions of the specific policy.

     At December 31, 2005, the Company has accrued $2,783 as its best estimate
of the liability for pending asbestos and toxic claims and has recorded a
receivable from its insurance companies of $1,081 related to the asbestos
litigation described above. The Company does not accrue for unasserted asbestos
claims, such as in the Multidistrict Litigation, because it believes that it is
not possible to determine whether any loss is probable with respect to such
claims or even to estimate the amount or range of the loss, if any. Among the
reasons is that the claims are made by an indeterminable number of people that
include not just seamen who served on Company vessels, but longshoreman, ship
repair workers and others.

     The unpredictability of personal injury litigation makes it difficult to
accurately predict the ultimate resolution of these asbestos and toxic claims.
By their very nature, civil actions relating to toxic substances vary according
to the fact pattern of each case, including whether the plaintiff can prove
actual disease, if any, or actual exposure, if any, to asbestos on Company
vessels, the number of defendants and their relative shares of liability in each
case, the applicable jurisdiction and numerous other factors. This uncertainty
is increased by the possibility of adverse court rulings or new legislation
affecting the asbestos claim litigation or the settlement process. It is
therefore possible that an adverse outcome in some of these cases could have a
material adverse affect on the Company's consolidated financial condition,
operating results or cash flows.

                                        75
<PAGE>
                 CROWLEY MARITIME CORPORATION AND SUBSIDIARIES

           NOTES TO CONSOLIDATED FINANCIAL STATEMENTS -- (CONTINUED)
              FOR THE YEARS ENDED DECEMBER 31, 2005, 2004 AND 2003
               (IN THOUSANDS, EXCEPT SHARE AND PER SHARE AMOUNTS)

     A summary of the asbestos-related claims for 2005 and 2004 is presented
below (dollars are in thousands):

<Table>
<Caption>
                                                              2005   2004
                                                              ----   ----
<S>                                                           <C>    <C>
Number of claims filed......................................    62     60
Number of claims settled....................................     6     10
Number of claims dismissed..................................     6     20
Total settlements paid......................................  $ 93   $163
Average settlement..........................................  $ 16   $ 16
Legal expenses paid.........................................  $571   $898
Insurance proceeds received.................................  $ 77   $298
</Table>

     In addition to the asbestos-related claims in the summary above, in 2004
the Company settled certain asbestos-related claims that involved seamen
employed by the Company for over 30 years. The Company expensed $2,125 and
$4,200 related to this litigation in the first and second quarters of 2004,
respectively. Although no insurance receivable has been recorded on these
claims, the Company is aggressively pursuing reimbursement from certain
insurance companies. In October 2004, the Company submitted demand letters to
certain insurance underwriters for settlement amounts and defense costs paid. In
November 2004, the Company filed suit against the insurance underwriters. The
case is currently in discovery.

  OTHER COMMITMENTS

     The Company is also party to numerous long-term contracts for shipment of
goods for other parties. Several of these contracts include clauses under which
contract prices may change if certain economic events occur, primarily increases
or decreases in certain components of vessel operating costs. These contracts
are subject to audit by the cargo owners. Management has estimated the
applicable amount of revenue to record for these contracts and, although it is
at least reasonably possible that contract prices will change in the near term,
management believes that it has accounted for these contracts appropriately. It
is management's opinion that adjustments, if any, will not have a material
adverse impact on the Company's consolidated financial condition, results of
operations or cash flows.

     During 2005, the Company has executed agreements totaling approximately
$29,303 to purchase certain equipment and two vessels that are expected to be
delivered during 2006. Payments of approximately $21,770 were made under these
commitments during the year ended December 31, 2005.

     During 2004 and 2005, the Company entered into contracts for the
construction of 6 articulated tug/barge units at an aggregate cost of
approximately $276,450 (including the cost of owner furnished equipment). The
units are currently under construction and two units are expected to be
delivered during each of 2006, 2007 and 2008. Payments of $59,263 and $16,299
were made under these contracts during the years ended December 31, 2005 and
2004, respectively.

     The Company is also obligated under contractual commitments for leasehold
improvements under an operating lease, software maintenance agreements, and
minimum purchased transportation. Payments of $18,117, $14,220 and $9,853 were
made under these commitments for the years ended December 31, 2005, 2004 and
2003, respectively.

                                        76
<PAGE>
                 CROWLEY MARITIME CORPORATION AND SUBSIDIARIES

           NOTES TO CONSOLIDATED FINANCIAL STATEMENTS -- (CONTINUED)
              FOR THE YEARS ENDED DECEMBER 31, 2005, 2004 AND 2003
               (IN THOUSANDS, EXCEPT SHARE AND PER SHARE AMOUNTS)

     The future payments under the above commitments for the next five years as
of December 31, 2005 are as follows:

<Table>
<S>                                                           <C>
2006........................................................  $114,350
2007........................................................    97,371
2008........................................................    33,627
2009........................................................       565
2010........................................................         2
                                                              --------
                                                              $245,915
                                                              ========
</Table>

NOTE 22 -- ADDITIONAL CASH FLOW INFORMATION

     Interest paid, net of amounts capitalized, and income tax payments
(refunds) for the years ended December 31, 2005, 2004 and 2003 are as follows:

<Table>
<Caption>
                                                           2005      2004      2003
                                                          -------   -------   -------
<S>                                                       <C>       <C>       <C>
Interest................................................  $19,756   $19,031   $18,022
Income taxes............................................    9,339     8,715    (4,913)
</Table>

     At December 31, 2005 and 2004, the Company has accrued $9,742 and $3,445,
respectively for the purchase of property and equipment.

NOTE 23 -- FINANCIAL INFORMATION BY SEGMENT AND GEOGRAPHIC AREA

SEGMENT INFORMATION

     Segment information has been prepared in accordance with SFAS No. 131,
Disclosures about Segments of an Enterprise and Related Information. Segments
were determined based on the types of services provided by each segment.
Accounting policies of the segments are the same as those described in the
Summary of Significant Accounting Policies in Note 1. The Company accounts for
intersegment revenue and transfers at cost.

     Effective July 1, 2005, the Company implemented a corporate reorganization.
As a result of this reorganization, the Company reevaluated its operating
segments and reporting segments and retroactively changed them to be aligned
with the Company's new structure. The Company is now organized and managed
principally by means of five operating segments: Puerto Rico and Caribbean
Islands Liner Services, Latin America Liner Services, Logistics Services, Marine
Services and Petroleum Services. The Company manages its business operations and
evaluates performance based upon the revenue and operating income of its
operating segments.

     As a result of the Company's change in its organizational structure, the
previously reported Ship Assist and Escort Service and Energy and Marine Service
operating segments have been combined into one operating segment called Marine
Services. In addition, certain ship management services previously reported
under Liner Services and the former Oil and Chemical Distribution and
Transportation Services are reported in Marine Services. The remaining portions
of the former Oil and Chemical Distribution and Transportation Services (the
Petroleum Service and Marine Transport Corporation) including certain ship
management services are now part of an operating segment named Petroleum
Services.

     The Company has aggregated the Puerto Rico and Caribbean Islands Liner
Services and the Latin America Liner Services into one reportable segment called
Liner Services. These operating segments are

                                        77
<PAGE>
                 CROWLEY MARITIME CORPORATION AND SUBSIDIARIES

           NOTES TO CONSOLIDATED FINANCIAL STATEMENTS -- (CONTINUED)
              FOR THE YEARS ENDED DECEMBER 31, 2005, 2004 AND 2003
               (IN THOUSANDS, EXCEPT SHARE AND PER SHARE AMOUNTS)

aggregated based upon their long-term financial performance and because their
products, services and class of customers are similar. The Liner Services
segment provides ocean transportation services for the carriage of cargo between
two geographic areas: (1) ports in the United States and ports in Puerto Rico
and certain eastern Caribbean islands; and (2) ports in the United States and
ports in Mexico, Central America, and certain Western Caribbean islands. The
Liner Services segment provides a broad range of cargo transportation services
including the carriage of containers, trailers, vehicles and oversized cargo.

     Logistics Services, formerly aggregated in the Liner Services segment, is
being reported as a separate reportable segment based upon its long-term
financial performance. Logistics services are provided in the United States and
Central America and include: (a) freight forwarding, ocean transportation and
airfreight to points throughout the world; (b) warehousing and distribution
services, customs clearance and trucking within the United States and Central
America; and (c) full package activities intended to create efficiencies in the
carriage of goods.

     The Marine Services segment provides ship assist and escort services
(including ship assist, tanker escort, docking and related services, fire
fighting, emergency towing and oil spill response) and specialized services to
companies on a worldwide basis engaged in the exploration, production and
distribution of oil and gas. This segment offers turnkey project management for
major infrastructure projects as well as logistics and inventory control
services for the oil and gas industry. In addition, Marine Services provides
worldwide marine salvage and marine wreck removal services as well as vessel
management services to third parties.

     Petroleum Services transports crude oil, petroleum products and chemicals
among ports on the east and west coasts of the United States, Alaska, and the
Gulf of Mexico. Petroleum Services also operates a refined petroleum products
distribution business in Alaska which includes the operations of owned or leased
tank farms and the distribution of fuel via distribution centers, gas stations
and retail delivery. Petroleum Services also provides vessel management services
to third parties.

     The Other segment includes corporate services. Corporate services provides
accounting, legal, human resources, information technology, purchasing support,
insurance services, engineering services and vessel acquisition to the Company's
operating segments and allocates 100% of their associated costs to the operating
segments. Asset charges (recoveries) are allocated to the segment that last used
the asset.

                                        78
<PAGE>
                 CROWLEY MARITIME CORPORATION AND SUBSIDIARIES

           NOTES TO CONSOLIDATED FINANCIAL STATEMENTS -- (CONTINUED)
              FOR THE YEARS ENDED DECEMBER 31, 2005, 2004 AND 2003
               (IN THOUSANDS, EXCEPT SHARE AND PER SHARE AMOUNTS)

     The table below summarizes certain financial information for each of the
Company's segments and reconciles such information to the Consolidated Financial
Statements for the years ended December 31, 2005, 2004 and 2003. The Company
does not segregate assets or expenditures for long-lived assets by reporting
segment; therefore these amounts are reported under the Other segment.
Additionally, the Company does not allocate interest expense, interest income,
other income, or income taxes to operating segments. Accordingly, such amounts
are included in the Other segment. As a result of the changes in the Company's
reportable segments during 2005, the information for prior years has been
restated to conform with the current year presentation. This information has
also been restated for discontinued operations, as discussed in Note 4.

<Table>
<Caption>
                                LINER     LOGISTICS    MARINE    PETROLEUM    SEGMENT                                CONSOLIDATED
                               SERVICES   SERVICES    SERVICES   SERVICES      TOTAL        OTHER      ELIMINATION      TOTAL
                               --------   ---------   --------   ---------   ----------   ----------   -----------   ------------
<S>                            <C>        <C>         <C>        <C>         <C>          <C>          <C>           <C>
2005
Revenues.....................  $639,093    $48,062    $183,915   $319,743    $1,190,813           --           --     $1,190,813
Intersegment revenues........     6,766         59      48,838         --        55,663   $  109,419    $(165,082)            --
Depreciation and
  amortization...............    14,064      1,581      10,447     16,517        42,609       22,486           --         65,095
Asset recoveries, net........    (4,466)       (55)    (10,257)      (563)      (15,341)          --           --        (15,341)
Operating income (loss)......    42,158     (2,127)     21,437     19,332        80,800           --           --         80,800
Income (loss) from
  discontinued operations,
  net of tax expense
  (benefit)..................       (43)        (8)        303     (3,765)       (3,513)          --           --         (3,513)
Assets.......................                                                        --    1,058,711                   1,058,711
Total expenditures for
  additions to long-lived
  assets.....................                                                        --      113,957                     113,957
2004
Revenues.....................  $587,689    $38,440    $161,426   $202,846    $  990,401           --           --     $  990,401
Intersegment revenues........     3,005        485      39,310         --        42,800   $  107,588    $(150,388)            --
Depreciation and
  amortization...............    11,236      1,605      10,895     15,675        39,411       23,207           --         62,618
Asset charges (recoveries),
  net........................      (667)        46      (4,253)        28        (4,846)          --           --         (4,846)
Operating income (loss)......    23,973     (5,811)       (955)    11,809        29,016           --           --         29,016
Income (loss) from
  discontinued operations,
  net of tax expense
  (benefit)..................     2,987     (1,809)         --     13,848        15,026           --           --         15,026
Assets.......................                                                        --      980,757                     980,757
Total expenditures for
  additions to long-lived
  assets.....................                                                        --       27,594                      27,594
2003
Revenues.....................  $544,196    $27,372    $151,548   $236,664    $  959,780           --           --     $  959,780
Intersegment revenues........     1,119        440      32,784         --        34,343   $   99,218    $(133,561)            --
Depreciation and
  amortization...............     9,503        827      12,248     11,513        34,091       23,669           --         57,760
Asset charges (recoveries),
  net........................      (997)         4      (2,602)    (1,788)       (5,383)          --           --         (5,383)
Operating income (loss)......    25,039     (5,505)     (3,248)    20,982        37,268           --           --         37,268
Income (loss) from
  discontinued operations,
  net of tax expense
  (benefit)..................        --     (1,177)         --      2,389         1,212           --           --          1,212
Assets.......................                                                        --    1,012,970                   1,012,970
Total expenditures for
  additions to long-lived
  assets.....................                                                        --       19,247                      19,247
</Table>

                                        79
<PAGE>
                 CROWLEY MARITIME CORPORATION AND SUBSIDIARIES

           NOTES TO CONSOLIDATED FINANCIAL STATEMENTS -- (CONTINUED)
              FOR THE YEARS ENDED DECEMBER 31, 2005, 2004 AND 2003
               (IN THOUSANDS, EXCEPT SHARE AND PER SHARE AMOUNTS)

GEOGRAPHIC AREA INFORMATION

     Revenues are attributed to the United States and to all foreign countries
based on the port of origin for the ocean transportation of the carriage of
cargo and the location of service provided for all other operations. Revenues
from external customers attributable to an individual country, other than the
United States, were not material for disclosure.

     Revenues from external customers and property and equipment, net
information by geographic area are summarized as follows:

<Table>
<Caption>
                                                      UNITED     ALL FOREIGN   CONSOLIDATED
                                                      STATES      COUNTRIES       TOTAL
                                                    ----------   -----------   ------------
<S>                                                 <C>          <C>           <C>
2005
Revenues..........................................  $1,011,774    $179,039      $1,190,813
Property and equipment, net.......................     596,332      10,987         607,319
2004
Revenues..........................................  $  829,279    $161,122      $  990,401
Property and equipment, net.......................     490,317       3,672         493,989
2003
Revenues..........................................  $  820,978    $138,802      $  959,780
Property and equipment, net.......................     506,936       3,921         510,857
</Table>

NOTE 24 -- QUARTERLY RESULTS OF OPERATIONS (UNAUDITED)

     Summary data relating to the consolidated results of operations for each
quarter of the years ended December 31, 2005 and 2004 are as follows:

<Table>
<Caption>
                                                                     QUARTER ENDED
                                                     ----------------------------------------------
                                                      MARCH 31      JUNE 30     SEPT. 30   DEC. 31
                                                     -----------   ----------   --------   --------
<S>                                                  <C>           <C>          <C>        <C>
2005
Revenues...........................................   $239,207      $266,926    $343,822   $340,858
Operating income...................................      7,827        14,311      29,020     29,642
Income from continuing operations..................   $  2,153      $ 10,087    $ 15,968   $ 14,181
Income (loss) from discontinued operations, net of
  tax..............................................       (313)          319      (3,301)      (218)
                                                      --------      --------    --------   --------
Net income.........................................   $  1,840      $ 10,406    $ 12,667   $ 13,963
                                                      ========      ========    ========   ========
Basic earnings per common share:
  Income from continuing operations................   $  13.04      $  69.50    $ 115.94   $ 102.80
  Income (loss) from discontinued operations, net
     of tax........................................      (2.32)         2.37      (24.57)     (1.62)
                                                      --------      --------    --------   --------
  Net income.......................................   $  10.72      $  71.87    $  91.37   $ 101.18
                                                      ========      ========    ========   ========
Diluted earnings per common share:
  Income from continuing operations................   $  13.04      $  60.62    $  99.44   $  88.07
  Income (loss) from discontinued operations, net
     of tax........................................      (2.32)         1.98      (20.56)     (1.35)
                                                      --------      --------    --------   --------
  Net income.......................................   $  10.72      $  62.60    $  78.88   $  86.72
                                                      ========      ========    ========   ========
</Table>

                                        80
<PAGE>
                 CROWLEY MARITIME CORPORATION AND SUBSIDIARIES

           NOTES TO CONSOLIDATED FINANCIAL STATEMENTS -- (CONTINUED)
              FOR THE YEARS ENDED DECEMBER 31, 2005, 2004 AND 2003
               (IN THOUSANDS, EXCEPT SHARE AND PER SHARE AMOUNTS)

<Table>
<Caption>
                                                                     QUARTER ENDED
                                                     ----------------------------------------------
                                                      MARCH 31      JUNE 30     SEPT. 30   DEC. 31
                                                     -----------   ----------   --------   --------
<S>                                                  <C>           <C>          <C>        <C>
2004
Revenues...........................................   $222,160      $250,766    $268,792   $248,683
Operating income (loss)............................     (1,456)        4,144      16,966      9,362
Income (loss) from continuing operations...........   $ (3,738)     $     62    $  7,311   $  6,254
Income (loss) from discontinued operations, net of
  tax..............................................     (1,160)          699         559     14,928
                                                      --------      --------    --------   --------
Net income (loss)..................................   $ (4,898)     $    761    $  7,870   $ 21,182
                                                      ========      ========    ========   ========
Basic income (loss) per common share:
  Income (loss) from continuing operations.........   $ (30.49)     $  (2.45)   $  51.18   $  43.41
  Income (loss) from discontinued operations, net
     of tax........................................      (8.55)         5.16        4.13     110.57
                                                      --------      --------    --------   --------
  Net income (loss)................................   $ (39.04)     $   2.71    $  55.31   $ 153.98
                                                      ========      ========    ========   ========
Diluted income (loss) per common share:
  Income (loss) from continuing operations.........   $ (30.49)     $  (2.45)   $  45.28   $  38.78
  Income (loss) from discontinued operations, net
     of tax........................................      (8.55)         5.16        3.46      92.58
                                                      --------      --------    --------   --------
  Net income (loss)................................   $ (39.04)     $   2.71    $  48.74   $ 131.36
                                                      ========      ========    ========   ========
</Table>

  FOURTH QUARTER 2005 SIGNIFICANT EVENTS:

     During the fourth quarter of 2005 a vessel, representing a component of the
Company, was disposed. The vessel and its related operations have been
classified as discontinued operations. Refer to Note 4 for additional
information.

     During the fourth quarter of 2005, the Company recorded an additional
$4,200 of insurance claims reserves primarily related to its workers
compensation and protection and indemnity self-insurance.

  FOURTH QUARTER 2004 SIGNIFICANT EVENTS:

     During the fourth quarter of 2004 a vessel, representing a component of the
Company, was disposed. The vessel and its related operations have been
classified as discontinued operations. Refer to Note 3 for additional
information.

     The Company also recorded income of $4,021 related to the Company's
discontinued South America operations. Refer to Note 4 for additional
information.

     During the fourth quarter of 2004, the Company completed a detailed
analysis of certain of its liabilities. As a result of this review the Company
recorded the following:

     - a $1,900 increase to insurance claims reserves related to workers
       compensation, asbestos claims and protection and indemnity self-insurance
       of which $1,500 relates to prior years and $400 relates to prior quarters
       of 2004; and

     - a $1,200 decrease to compensation expense related to the accrual of a
       contribution to an employee stock ownership plan during the first three
       quarters of 2004 that was not implemented. None of this related to prior
       years.

In addition, the fourth quarter of 2004 includes an accrual of $1,702 that was
recorded to properly reflect the Company's accounts payable at December 31,
2004.

                                        81
<PAGE>
                 CROWLEY MARITIME CORPORATION AND SUBSIDIARIES

           NOTES TO CONSOLIDATED FINANCIAL STATEMENTS -- (CONTINUED)
              FOR THE YEARS ENDED DECEMBER 31, 2005, 2004 AND 2003
               (IN THOUSANDS, EXCEPT SHARE AND PER SHARE AMOUNTS)

     The Company has evaluated the impact of these adjustments on the previously
issued audited consolidated financial statements and unaudited quarterly
financial statements. The Company determined the effect of these adjustments
individually and in the aggregate was not material to any prior periods and
therefore, has not restated any financial statements for prior periods.

NOTE 25 -- SUBSEQUENT EVENTS

     On January 1, 2006, the Company acquired all of the stock of Columbus
Distributing, Inc. and Ev-Jo, Inc. (collectively "CDI"), a fuel distribution
business in Alaska, for $5,100 cash. The acquisition of CDI further expands the
Company's Alaskan fuel distribution business. The operation of CDI will be
included in the Company's Consolidated Statement of Operations, within the
Petroleum Services segment, commencing January 1, 2006. The Company is in the
process of allocating the purchase price which includes obtaining independent
appraisals of the fair value of assets and intangibles acquired. The Company
will also be evaluating contingencies, such as environmental contingencies,
during the second and third quarters of 2006 due to weather conditions in
Alaska.

     During January 2006, the Company entered into a financing agreement with a
bank for equipment that was purchased during 2005. The Company received $19,235
in proceeds. Payments for principal and interest, at a fixed rate of 6.15%, is
due quarterly through October 2012 with a balloon payment of $5,437 due January
2013. The loan is collateralized by the equipment.

     During February 2006, the Company entered into a construction contract for
two heavy lift deck barges for a purchase price of $26,067. The first barge is
expected to be delivered in the first quarter of 2007 and the second barge is
expected to be delivered in the third quarter of 2007.

                                        82
<PAGE>

                SCHEDULE II -- VALUATION AND QUALIFYING ACCOUNTS
                  FOR THE THREE YEARS ENDED DECEMBER 31, 2005
                                 (IN THOUSANDS)

ALLOWANCE FOR BAD DEBTS:

<Table>
<Caption>
                                       BALANCE AT   CHARGED TO                    RECOVERIES,   BALANCE AT
                                       BEGINNING    COSTS AND        OTHER        DEDUCTIONS      END OF
YEAR(1)                                 OF YEAR      EXPENSES    ADJUSTMENTS(2)   CHARGEOFFS       YEAR
-------                                ----------   ----------   --------------   -----------   ----------
<S>                                    <C>          <C>          <C>              <C>           <C>
2003.................................    $8,837       $4,008         $1,021         $(4,979)     $ 8,887
2004.................................     9,121        2,635          1,152          (4,530)       8,378
2005.................................     8,378        3,816          3,262          (2,926)      12,530
</Table>

---------------

(1) 2004 and 2003 have been restated for discontinued operations. See Note 4 of
    the Notes to Consolidated Financial Statements in "Item 8. Financial
    Statements and Supplementary Data."

(2) Adjustments represent allowances for contractual adjustments, which are
    recorded as a reduction to revenues.

2005 COMPARED WITH 2004

     The Company's provision for doubtful accounts increased $1,181, or 44.8%,
in 2005 compared with 2004 as a result of: (1) an increase in revenues of 20.2%
during 2005 as compared with 2004 due to growth from our operations and
businesses acquired; and (2) an increase from specific customers' reserves
established. In 2005, several of the Company's customers filed for bankruptcy
causing a writeoff of the customer accounts; however, claims have been filed
with the respective bankruptcy courts.

2004 COMPARED WITH 2003

     The Company's provision for doubtful accounts decreased $1,373, or 34.3%,
to $2,635 in 2004 compared with $4,008 in 2003. The Company did not experience
major customer account bankruptcies in 2004.

                                        83
<PAGE>

ITEM 9.  CHANGES IN AND DISAGREEMENTS WITH ACCOUNTANTS ON ACCOUNTING AND
         FINANCIAL DISCLOSURE.

     None.

ITEM 9A.  CONTROLS AND PROCEDURES.

     (a) Evaluation of Disclosure Controls and Procedures

     The Company's management, including its principal executive officer (who is
the Chief Executive Officer) and the principal financial officer (who is the
Senior Vice President and Controller), have conducted an evaluation of the
effectiveness of the Company's disclosure controls and procedures (as defined in
Rule 13a-15(e) under the Securities Exchange Act of 1934, as amended (the
"Exchange Act")). Based on that evaluation, the Company's principal executive
officer and the principal financial officer concluded that such disclosure
controls and procedures are effective, as of the end of the period covered by
this Annual Report on Form 10-K, to ensure that information required to be
disclosed by the Company in reports that it files or submits under the Exchange
Act is recorded, processed, summarized and reported within the time periods
specified in Securities and Exchange Commission rules and forms.

     No change in the Company's internal control over financial reporting
identified in connection with the evaluation required by Rule 13a-15(d) under
the Exchange Act that occurred during the Company's fourth fiscal quarter has
materially affected, or is reasonably likely to materially affect, the Company's
internal control over financial reporting.

     The statements contained in Exhibit 31.1 and Exhibit 31.2 should be
considered in light of, and read together with, the information set forth in
this Item 9A.

ITEM 9B.  OTHER INFORMATION

     Not applicable

                                    PART III

ITEM 10.  DIRECTORS AND EXECUTIVE OFFICERS OF THE REGISTRANT.

     (a) Information concerning directors of the Company appears in the
Company's Proxy Statement to be filed with the Securities Exchange Commission in
connection with the Company's 2006 Annual Meeting of Stockholders (the "Proxy
Statement") under "Election of Directors." This portion of the Proxy Statement
is incorporated herein by reference.

     (b) For information with respect to our Executive Officers, see "Item 1.
Business -- Executive Officers of the Registrant" of this Form 10-K.

     (c) Information concerning Section 16(a) beneficial ownership reporting
compliance appears in the Proxy Statement under "Section 16(a) Beneficial
Ownership Reporting Compliance." This portion of the Proxy Statement is
incorporated herein by reference.

     (d) Gary L. Depolo and Leland S. Prussia, both of whom serve on the Audit
Committee of the Board of Directors of the Company, have been designated by the
Board of Directors as "audit committee financial experts" (as such term has been
defined in Item 401(h) of Regulation S-K of the Securities and Exchange
Commission). Messrs. Depolo and Prussia are "independent" as that term is used
in Rule 4200(a)(15) of the Nasdaq Stock Market's listing rules.

     (e) The Company has adopted a code of ethics that applies to our principal
executive officer, principal financial officer, principal accounting officer or
controller, or persons performing similar functions. A copy of this code of
ethics will be provided without charge, upon written request sent to our
principal executive offices which are located at 155 Grand Avenue, Oakland,
California 94612; Attention: General Counsel.

                                        84
<PAGE>

ITEM 11.  EXECUTIVE COMPENSATION.

     The information required by this item is hereby incorporated by reference
from the Proxy Statement under the captions "Compensation of Directors,"
"Compensation Committee Interlocks and Insider Participation" and "Executive
Compensation."

ITEM 12.  SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND MANAGEMENT AND
          RELATED STOCKHOLDER MATTERS.

     The information required by this item is hereby incorporated by reference
from the Proxy Statement under the caption "Security Ownership of Certain
Beneficial Owners and Management."

ITEM 13.  CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS.

     The information required by this item is hereby incorporated by reference
from the Proxy Statement under the caption "Certain Relationships and Related
Transactions."

ITEM 14.  PRINCIPAL ACCOUNTING FEES AND SERVICES.

     The information required by this item is hereby incorporated by reference
from the Proxy Statement under the caption "Independent Registered Public
Accounting Firm."

                                    PART IV

ITEM 15.  EXHIBITS, FINANCIAL STATEMENT SCHEDULES.

     (a) The following documents are filed as part of this report:

          1. Consolidated financial statements:  See Table of Contents to "Item
     8. Financial Statements and Supplementary Data."

          2. Consolidated financial statement schedules:  Schedule
     II -- Valuation and Qualifying Accounts for each of the three years in the
     period ended December 31, 2005. All other schedules are omitted because
     they are not required or the information is included in the consolidated
     financial statements.

          3. Exhibits.

          The following exhibits are either included in this Form 10-K or
     incorporated herein by reference.

<Table>
<Caption>
             EXHIBIT
              NUMBER                              DESCRIPTION
             -------                              -----------
           <S>            <C>
              2.1         Acquisition Agreement for MTL Petrolink Corp. by and among
                          Marine Transport Corporation, as Seller, American Eagle
                          Tankers Inc. Limited, as Buyer, and Crowley Maritime
                          Corporation, as Guarantor, dated April 29, 2002
                          (incorporated by reference to Exhibit No. 2.1 to the
                          registrant's Registration Statement on Form 10-12G/A filed
                          on June 4, 2002, File No. 000-49717.)



              2.2.1       Purchase and Sale of the Fuel Business of Northland Fuel LLC
                          Purchase Agreement, dated as of July 9, 2004, between
                          Crowley Marine Services, Inc., Northland Fuel LLC, Yukon
                          Fuel Company and Northland Vessel Leasing Company LLC
                          (incorporated by reference to Exhibit No. 2.1 to the
                          registrant's Form 10-Q for the quarter ended September 30,
                          2004, File No. 000-49717.)(a)



              2.2.2       Amendment No. 1 to Purchase Agreement dated as of October
                          13, 2004, by and between Crowley Marine Services, Inc.,
                          Northland Fuel LLC, Yukon Fuel Company and Northland Vessel
                          Leasing Company LLC (incorporated by reference to Exhibit
                          No. 2.3 to the registrant's Form 10-Q for the quarter ended
                          September 30, 2004, File No. 000-49717.)
</Table>

                                        85
<PAGE>

<Table>
<Caption>
             EXHIBIT
              NUMBER                              DESCRIPTION
             -------                              -----------
           <S>            <C>



              2.2.3       Amendment No. 2 to Purchase Agreement dated as of November
                          22, 2004, by and between Crowley Marine Services, Inc.,
                          Northland Fuel LLC, Yukon Fuel Company and Northland Vessel
                          Leasing Company LLC (incorporated by reference to Exhibit
                          No. 2.5 to the registrant's Form 10-K Annual Report for the
                          fiscal year ended December 31, 2004, File No. 000-49717.)



              2.2.4       Amendment No. 3 to Purchase Agreement dated as of January
                          14, 2005, by and between Crowley Marine Services, Inc.,
                          Northland Fuel LLC, Yukon Fuel Company and Northland Vessel
                          Leasing Company LLC (incorporated by reference to Exhibit
                          No. 2.6 to the registrant's Form 10-Q for the quarter ended
                          March 31, 2005, File No. 000-49717.)



              2.2.5       Amendment No. 4 to Purchase Agreement dated as of January
                          21, 2005, by and between Crowley Marine Services, Inc.,
                          Northland Fuel LLC, Yukon Fuel Company and Northland Vessel
                          Leasing Company LLC (incorporated by reference to Exhibit
                          No. 2.7 to the registrant's Form 10-Q for the quarter ended
                          March 31, 2005, File No. 000-49717.)



              2.2.6       Amendment No. 5 to Purchase Agreement dated as of January
                          28, 2005, by and between Crowley Marine Services, Inc.,
                          Northland Fuel LLC, Yukon Fuel Company and Northland Vessel
                          Leasing Company LLC (incorporated by reference to Exhibit
                          No. 2.8 to the registrant's Form 10-Q for the quarter ended
                          March 31, 2005, File No. 000-49717.)



              2.2.7       Amendment No. 6 to Purchase Agreement dated as of February
                          4, 2005, by and between Crowley Marine Services, Inc.,
                          Northland Fuel LLC, Yukon Fuel Company and Northland Vessel
                          Leasing Company LLC (incorporated by reference to Exhibit
                          No. 2.9 to the registrant's Form 10-Q for the quarter ended
                          March 31, 2005, File No. 000-49717.)



              2.2.8       Amendment No. 7 to Purchase Agreement, dated as of February
                          10, 2005, by and between Crowley Marine Services, Inc.,
                          Northland Fuel LLC, Yukon Fuel Company and Northland Vessel
                          Leasing Company LLC (incorporated by reference to Exhibit
                          No. 2.10 to the registrant's Form 10-Q for the quarter ended
                          March 31, 2005, File No. 000-49717.)



              2.2.9       Amendment No. 8 to Purchase Agreement, dated as of September
                          6, 2005, by and between Crowley Marine Services, Inc.,
                          Northland Fuel LLC, Yukon Fuel Company and Northland Vessel
                          Leasing Company LLC (incorporated by reference to Exhibit
                          No. 2.11 to the registrant's Form 8-K Current Report dated
                          as of September 6, 2005, File No. 000-49717.)(b)



              2.2.10      Amendment No. 9 to Purchase Agreement, dated as of December
                          5, 2005, by and between Crowley Marine Services, Inc., Fuel
                          Holding Company LLC (f/k/a Northland Fuel LLC), YF Company
                          and NV Fuel LLC (f/k/a Northland Vessel Leasing Company LLC)



              2.2.11      Amendment No. 10 to Purchase Agreement, dated as of January
                          18, 2006, by and between Crowley Marine Services, Inc., Fuel
                          Holding Company LLC (f/k/a Northland Fuel LLC), YF Company
                          and NV Fuel LLC (f/k/a Northland Vessel Leasing Company LLC)



              2.2.12      Amendment No. 11 to Purchase Agreement, dated as of January
                          30, 2006, by and between Crowley Marine Services, Inc., Fuel
                          Holding Company LLC (f/k/a Northland Fuel LLC), YF LLC
                          (f/k/a Yukon Fuel Company LLC) and NV Fuel LLC



              2.2.13      Post-Closing Agreement, dated as of January 30, 2006, by and
                          between Crowley Marine Services, Inc., Fuel Holding Company
                          LLC (f/k/a Northland Fuel LLC), YF LLC (f/k/a Yukon Fuel
                          Company LLC), NV Fuel LLC (f/k/a Northland Vessel Leasing
                          Company LLC) and Barge Lines LLC (f/k/a Yutana Barge Lines
                          LLC)



              2.2.14      Post-Closing Agreement, dated as of February 22, 2006, by
                          and between Crowley Marine Services, Inc., Fuel Holding
                          Company LLC (f/k/a Northland Fuel LLC), YF LLC (f/k/a Yukon
                          Fuel Company LLC), NV Fuel LLC (f/k/a Northland Vessel
                          Leasing Company LLC) and Barge Lines LLC (f/k/a Yutana Barge
                          Lines LLC)



              2.3.1       Asset Purchase Agreement dated as of July 9, 2004 by and
                          between Yutana Barge Lines, LLC and Crowley Marine Services,
                          Inc. (incorporated by reference to Exhibit No. 2.2 to the
                          registrant's Form 10-Q for the quarter ended September 30,
                          2004, File No. 000-49717.)(a)
</Table>

                                        86
<PAGE>

<Table>
<Caption>
             EXHIBIT
              NUMBER                              DESCRIPTION
             -------                              -----------
           <S>            <C>



              2.3.2       Amendment No. 1 to Asset Purchase Agreement between Crowley
                          Marine Services, Inc. and Yutana Barge Lines, LLC
                          (incorporated by reference to Exhibit No. 10.2 to the
                          registrant's Form 10-Q for the quarter ended September 30,
                          2005, File No. 000-49717.)(a)



              3.1         Certificate of Amendment of Restated Certificate of
                          Incorporation of Crowley Maritime Corporation dated as of
                          May 23, 1994 (incorporated by reference to Exhibit No. 3.1
                          to the registrant's Registration Statement on Form 10-12G
                          filed on April 1, 2002, File No. 000-49717.)



              3.2         Certificate of Amendment of Restated Certificate of
                          Incorporation of Crowley Maritime Corporation dated as of
                          July 31, 1992 (incorporated by reference to Exhibit No. 3.2
                          to the registrant's Registration Statement on Form 10-12G
                          filed on April 1, 2002, File No. 000-49717.)



              3.3         Restated Certificate of Incorporation of Crowley Maritime
                          Corporation (incorporated by reference to Exhibit No. 3.3 to
                          the registrant's Registration Statement on Form 10-12G filed
                          on April 1, 2002, File No. 000-49717.)



              3.4         Restated By-Laws of Crowley Maritime Corporation
                          (incorporated by reference to Exhibit No. 3.4 to the
                          registrant's Registration Statement on Form 10-12G filed on
                          April 1, 2002, File No. 000-49717.)



              4.1         Form of Common Stock certificate (incorporated by reference
                          to Exhibit No. 4.1 to the registrant's Registration
                          Statement on Form 10-12G filed on April 1, 2002, File No.
                          000-49717.)



             10.1         Agreement for Contract Services between Crowley Maritime
                          Corporation and William P. Verdon #



             10.2         Crowley Maritime Corporation Deferred Compensation Plan as
                          amended and restated (incorporated by reference to Exhibit
                          No. 10.2 to the registrant's Registration Statement on Form
                          10-12G filed on April 1, 2002, File No. 000-49717.)#



             10.3         Crowley Maritime Corporation Deferred Compensation Plan
                          Trust Agreement as amended (incorporated by reference to
                          Exhibit No. 10.3 to the registrant's Registration Statement
                          on Form 10-12G filed on April 1, 2002, File No. 000-49717.)#



             10.4         Individual Executive Benefit Agreement between Crowley
                          Maritime Corporation and James B. Rettig (incorporated by
                          reference to Exhibit No. 10.5 to the registrant's
                          Registration Statement on Form 10-12G filed on April 1,
                          2002, File No. 000-49717.)#



             10.5.1       Second Amendment to Split Dollar Life Insurance Agreement
                          between Crowley Maritime Corporation and Thomas B. Crowley,
                          Jr., as Trustee of the Thomas B. Crowley, Jr. Revocable
                          Trust u/t/a dtd. July 1, 1998 by and between Thomas B.
                          Crowley, Jr., as trustor and as trustee, dated as of July
                          20, 1998 (incorporated by reference to Exhibit No. 10.8 to
                          the registrant's Registration Statement on Form 10-12G filed
                          on April 1, 2002, File No. 000-49717.)#



             10.5.2       Split Dollar Life Insurance Agreement (1035 Exchange Policy)
                          between Crowley Maritime Corporation and Thomas B. Crowley,
                          Jr. dated as of July 20, 1998 (incorporated by reference to
                          Exhibit No. 10.9 to the registrant's Registration Statement
                          on Form 10-12G filed on April 1, 2002, File No. 000-49717.)#



             10.5.3       Split Dollar Life Insurance Agreement (New Policies) between
                          Crowley Maritime Corporation and Thomas B. Crowley, Jr.
                          dated as of July 20, 1998 (incorporated by reference to
                          Exhibit No. 10.10 to the registrant's Registration Statement
                          on Form 10-12G filed on April 1, 2002, File No. 000-49717.)#



             10.5.4       Split Dollar Life Insurance Agreement between Crowley
                          Maritime Corporation, Thomas B. Crowley, Jr. and Christine
                          S. Crowley, as Distributing Trustee of the 1998 Crowley
                          Family Generation -- Skipping Trust u/t/d dtd/ November 12,
                          1998 by and between Thomas B. Crowley, Jr., as trustor and
                          as trustee, dated as of November 24, 1998 (incorporated by
                          reference to Exhibit No. 10.11 to the registrant's
                          Registration Statement on Form 10-12G filed on April 1,
                          2002, File No. 000-49717.)#
</Table>

                                        87
<PAGE>

<Table>
<Caption>
             EXHIBIT
              NUMBER                              DESCRIPTION
             -------                              -----------
           <S>            <C>



             10.6         Settlement Agreement, dated as of December 23, 2003, between
                          Crowley Maritime Corporation and Thomas B. Crowley, Jr.
                          (incorporated by reference to Exhibit No. 10.14 to the
                          registrant's Form 10-K Annual Report for the fiscal year
                          ended December 31, 2003, File No. 000-49717.)#(b)



             10.7         Crowley Maritime Corporation 2004 Management Incentive Plan,
                          dated March 10, 2004 (incorporated by reference to Exhibit
                          No. 10.15 to the registrant's Form 10-K Annual Report for
                          the fiscal year ended December 31, 2003, File No.
                          000-49717.)#



             10.8         Description of Crowley Maritime Corporation Bonus Plan For
                          Executives Whose Direct Annual Compensation is Less Than
                          $1.0 Million (incorporated by reference to Exhibit No. 10.17
                          to the registrant's Form 10-K Annual Report for the fiscal
                          year ended December 31, 2004, File No. 000-49717.)#



             10.9         Summary of Named Executive Officer and Director Compensation
                          Arrangements #



             10.10.1      $115,000,000 Amended and Restated Credit Agreement Dated as
                          of November 2, 2001 (incorporated by reference to Exhibit
                          No. 10.1 to the registrant's Registration Statement on Form
                          10-12G filed on April 1, 2002, File No. 000-49717.)



             10.10.2      Letter Agreement and Consents regarding $115,000,000 Amended
                          and Restated Credit Agreement (incorporated by reference to
                          Exhibit No. 10 to the registrant's Form 10-Q for the quarter
                          ended June 30, 2002, File No. 000-49717.)



             10.10.3      Amendment No. 1 to the $115,000,000 Amended and Restated
                          Credit Agreement Dated as of September 30, 2003
                          (incorporated by reference to Exhibit No. 10.1.1 to the
                          registrant's Form 10-Q for the quarter ended September 30,
                          2003, File No. 000-49717.)



             10.11        $95,000,000 Second Amended and Restated Credit Agreement
                          Dated February 27, 2004 (incorporated by reference to
                          Exhibit No. 10.1.2 to the registrant's Form 10-K Annual
                          Report for the fiscal year ended December 31, 2003, File No.
                          000-49717.)



             10.12.1      Loan Agreement dated December 24, 2003 Providing for a
                          Secured Term Loan up to $115,000,000 between Crowley Marine
                          Services, Inc., as Borrower, the Banks and Financial
                          Institutions listed on Schedule I hereto, as Lenders, and
                          Den Norske Bank ASA, and Crowley Maritime Corporation, as
                          Guarantor, and Amendment No. 1 thereto made as of March 15,
                          2004 (incorporated by reference to Exhibit No. 4.2 to the
                          registrant's Form 10-K Annual Report for the fiscal year
                          ended December 31, 2003, File No. 000-49717.)(a)(c)



             10.12.2      Amendment No. 2 to Loan Agreement dated December 24, 2003
                          Providing for a Secured Term Loan of up to $115,000,000
                          between Crowley Marine Service Inc., as Borrower, the Banks
                          of Financial Institutions listed on Schedule 1 to the Loan
                          Agreement, as Lenders, and DNB NOR BANK ASA, and Crowley
                          Maritime Corporation, as Guarantor, dated June 30, 2004
                          (incorporated by reference to Exhibit No. 4.2 to the
                          registrant's Form 10-Q for the quarter ended June 30, 2004,
                          File No. 000-49717.)



             10.13        Vessel Construction Contract, dated as of June 2, 2004,
                          between VT Halter Marine Inc., a Delaware corporation, and
                          Vessel Management Services, Inc., a Delaware corporation
                          (incorporated by reference to Exhibit No. 10.1 to the
                          registrant's Form 10-Q for the quarter ended June 30, 2004,
                          File No. 000-49717.)



             10.14        Vessel Construction Contract entered into as of August 23,
                          2005, by and between VT Halter Marine, Inc. and Vessel
                          Management Services, Inc. (incorporated by reference to
                          Exhibit No. 10.1 to the registrant's Form 10-Q for the
                          quarter ended September 30, 2005, File No. 000-49717.)(a)



             11           Statement regarding computation of per share earnings
                          (incorporated herein by reference to Note 18 of the Notes to
                          Consolidated Financial Statements in 'Item 8. Financial
                          Statements and Supplementary Data")



             21           Subsidiaries of Crowley Maritime Corporation



             31.1         Rules 13a-14(a) and 15d-14a Certification (Principal
                          Executive Officer)



             31.2         Rules 13a-14(a) and 15d-14a Certification (Principal
                          Financial Officer)



             32.1         Section 1350 Certifications
</Table>

                                        88
<PAGE>

---------------

        (a) Schedules and exhibits listed in the table of contents for this
            agreement have been omitted. Copies thereof will be furnished
            supplementally to the Securities and Exchange Commission upon
            request.

        (b) Schedule A (Policies on Life of the Survivor of Thomas B. and Molly
            Crowley) and Schedule B (Bank Loan) have been omitted. Copies
            thereof will be furnished supplementally to the Securities and
            Exchange Commission upon request.

        (c) Neither the Company nor its subsidiaries are parties to any other
            instrument with respect to long-term debt for which the securities
            authorized thereunder exceeds 10% of the total assets of the Company
            and its subsidiaries on a consolidated basis. Copies of instruments
            with respect to long-term debt of lesser amounts will be provided to
            the Securities and Exchange Commission upon request.

         #  Management contract or compensatory plan or arrangement.

     (b) Exhibits.

        The exhibits required by Item 601 of Regulation S-K are filed herewith.

     (c) Additional Financial Statements.

             See Items 15(a)(1) and 15(a)(2) of this Form 10-K. The individual
        financial statements of the registrant's subsidiaries have been omitted
        since the registrant is primarily a holding company and all subsidiaries
        included in the consolidated financial statements are wholly owned.

                                        89
<PAGE>

                                   SIGNATURES

     Pursuant to the requirements of Section 13 or 15(d) of the Securities
Exchange Act of 1934, the registrant has duly caused this report to be signed on
its behalf by the undersigned, thereunto duly authorized.

                                          CROWLEY MARITIME CORPORATION

                                          By: /s/ Thomas B. Crowley, Jr.
                                            ------------------------------------
                                            Thomas B. Crowley, Jr.
                                            Chairman of the Board, President and
                                            Chief Executive Officer

Date: March 17, 2006

     Pursuant to the requirements of the Securities Exchange Act of 1934, this
report has been signed below by the following persons on behalf of the
registrant and in the capacities and on the dates indicated.

                                          By: /s/ Thomas B. Crowley, Jr.
                                            ------------------------------------
                                            Thomas B. Crowley, Jr.
                                            Chairman of the Board, President and
                                            Chief Executive Officer
                                            (Principal Executive Officer)

Date: March 17, 2006

                                          By: /s/ John C. Calvin
                                            ------------------------------------
                                            John C. Calvin
                                            Senior Vice President and Controller
                                            (Principal Financial and Accounting
                                              Officer)

Date: March 17, 2006

                                          By: /s/ William A. Pennella
                                            ------------------------------------
                                            William A. Pennella
                                            Vice Chairman of the Board and
                                            Executive Vice President

Date: March 17, 2006

                                          By: /s/ Philip E. Bowles
                                            ------------------------------------
                                            Philip E. Bowles
                                            Director

Date: March 17, 2006

                                        90
<PAGE>

                                          By: /s/ Molly M. Crowley
                                              ----------------------------------
                                            Molly M. Crowley
                                            Director

Date: March 17, 2006

                                          By: /s/ Gary L. Depolo
                                            ------------------------------------
                                            Gary L. Depolo
                                            Director

Date: March 17, 2006

                                          By: /s/ Earl T. Kivett
                                            ------------------------------------
                                            Earl T. Kivett
                                            Director

Date: March 17, 2006

                                          By: /s/ Leland S. Prussia
                                            ------------------------------------
                                            Leland S. Prussia
                                            Director

Date: March 17, 2006

                                          By: /s/ William P. Verdon
                                            ------------------------------------
                                            William P. Verdon
                                            Director

Date: March 17, 2006

                                          By: /s/ Cameron W. Wolfe, Jr.
                                            ------------------------------------
                                            Cameron W. Wolfe, Jr.
                                            Director

Date: March 17, 2006

                                        91
<PAGE>

                                 EXHIBIT INDEX

<Table>
<Caption>
  EXHIBIT
   NUMBER                              DESCRIPTION
  -------                              -----------
<S>            <C>
   2.1         Acquisition Agreement for MTL Petrolink Corp. by and among
               Marine Transport Corporation, as Seller, American Eagle
               Tankers Inc. Limited, as Buyer, and Crowley Maritime
               Corporation, as Guarantor, dated April 29, 2002
               (incorporated by reference to Exhibit No. 2.1 to the
               registrant's Registration Statement on Form 10-12G/A filed
               on June 4, 2002, File No. 000-49717.)

   2.2.1       Purchase and Sale of the Fuel Business of Northland Fuel LLC
               Purchase Agreement, dated as of July 9, 2004, between
               Crowley Marine Services, Inc., Northland Fuel LLC, Yukon
               Fuel Company and Northland Vessel Leasing Company LLC
               (incorporated by reference to Exhibit No. 2.1 to the
               registrant's Form 10-Q for the quarter ended September 30,
               2004, File No. 000-49717.)(a)

   2.2.2       Amendment No. 1 to Purchase Agreement dated as of October
               13, 2004, by and between Crowley Marine Services, Inc.,
               Northland Fuel LLC, Yukon Fuel Company and Northland Vessel
               Leasing Company LLC (incorporated by reference to Exhibit
               No. 2.3 to the registrant's Form 10-Q for the quarter ended
               September 30, 2004, File No. 000-49717.)

   2.2.3       Amendment No. 2 to Purchase Agreement dated as of November
               22, 2004, by and between Crowley Marine Services, Inc.,
               Northland Fuel LLC, Yukon Fuel Company and Northland Vessel
               Leasing Company LLC (incorporated by reference to Exhibit
               No. 2.5 to the registrant's Form 10-K Annual Report for the
               fiscal year ended December 31, 2004, File No. 000-49717.)

   2.2.4       Amendment No. 3 to Purchase Agreement dated as of January
               14, 2005, by and between Crowley Marine Services, Inc.,
               Northland Fuel LLC, Yukon Fuel Company and Northland Vessel
               Leasing Company LLC (incorporated by reference to Exhibit
               No. 2.6 to the registrant's Form 10-Q for the quarter ended
               March 31, 2005, File No. 000-49717.)

   2.2.5       Amendment No. 4 to Purchase Agreement dated as of January
               21, 2005, by and between Crowley Marine Services, Inc.,
               Northland Fuel LLC, Yukon Fuel Company and Northland Vessel
               Leasing Company LLC (incorporated by reference to Exhibit
               No. 2.7 to the registrant's Form 10-Q for the quarter ended
               March 31, 2005, File No. 000-49717.)

   2.2.6       Amendment No. 5 to Purchase Agreement dated as of January
               28, 2005, by and between Crowley Marine Services, Inc.,
               Northland Fuel LLC, Yukon Fuel Company and Northland Vessel
               Leasing Company LLC (incorporated by reference to Exhibit
               No. 2.8 to the registrant's Form 10-Q for the quarter ended
               March 31, 2005, File No. 000-49717.)

   2.2.7       Amendment No. 6 to Purchase Agreement dated as of February
               4, 2005, by and between Crowley Marine Services, Inc.,
               Northland Fuel LLC, Yukon Fuel Company and Northland Vessel
               Leasing Company LLC (incorporated by reference to Exhibit
               No. 2.9 to the registrant's Form 10-Q for the quarter ended
               March 31, 2005, File No. 000-49717.)

   2.2.8       Amendment No. 7 to Purchase Agreement, dated as of February
               10, 2005, by and between Crowley Marine Services, Inc.,
               Northland Fuel LLC, Yukon Fuel Company and Northland Vessel
               Leasing Company LLC (incorporated by reference to Exhibit
               No. 2.10 to the registrant's Form 10-Q for the quarter ended
               March 31, 2005, File No. 000-49717.)

   2.2.9       Amendment No. 8 to Purchase Agreement, dated as of September
               6, 2005, by and between Crowley Marine Services, Inc.,
               Northland Fuel LLC, Yukon Fuel Company and Northland Vessel
               Leasing Company LLC (incorporated by reference to Exhibit
               No. 2.11 to the registrant's Form 8-K Current Report dated
               as of September 6, 2005, File No. 000-49717.)(b)

   2.2.10      Amendment No. 9 to Purchase Agreement, dated as of December
               5, 2005, by and between Crowley Marine Services, Inc., Fuel
               Holding Company LLC (f/k/a Northland Fuel LLC), YF Company
               and NV Fuel LLC (f/k/a Northland Vessel Leasing Company LLC)

   2.2.11      Amendment No. 10 to Purchase Agreement, dated as of January
               18, 2006, by and between Crowley Marine Services, Inc., Fuel
               Holding Company LLC (f/k/a Northland Fuel LLC), YF Company
               and NV Fuel LLC (f/k/a Northland Vessel Leasing Company LLC)

   2.2.12      Amendment No. 11 to Purchase Agreement, dated as of January
               30, 2006, by and between Crowley Marine Services, Inc., Fuel
               Holding Company LLC (f/k/a Northland Fuel LLC), YF LLC
               (f/k/a Yukon Fuel Company LLC) and NV Fuel LLC
</Table>

                                        92
<PAGE>

<Table>
<Caption>
  EXHIBIT
   NUMBER                              DESCRIPTION
  -------                              -----------
<S>            <C>

   2.2.13      Post-Closing Agreement, dated as of January 30, 2006, by and
               between Crowley Marine Services, Inc., Fuel Holding Company
               LLC (f/k/a Northland Fuel LLC), YF LLC (f/k/a Yukon Fuel
               Company LLC), NV Fuel LLC (f/k/a Northland Vessel Leasing
               Company LLC) and Barge Lines LLC (f/k/a Yutana Barge Lines
               LLC)

   2.2.14      Post-Closing Agreement, dated as of February 22, 2006, by
               and between Crowley Marine Services, Inc., Fuel Holding
               Company LLC (f/k/a Northland Fuel LLC), YF LLC (f/k/a Yukon
               Fuel Company LLC), NV Fuel LLC (f/k/a Northland Vessel
               Leasing Company LLC) and Barge Lines LLC (f/k/a Yutana Barge
               Lines LLC)

   2.3.1       Asset Purchase Agreement dated as of July 9, 2004 by and
               between Yutana Barge Lines, LLC and Crowley Marine Services,
               Inc. (incorporated by reference to Exhibit No. 2.2 to the
               registrant's Form 10-Q for the quarter ended September 30,
               2004, File No. 000-49717.)(a)

   2.3.2       Amendment No. 1 to Asset Purchase Agreement between Crowley
               Marine Services, Inc. and Yutana Barge Lines, LLC
               (incorporated by reference to Exhibit No. 10.2 to the
               registrant's Form 10-Q for the quarter ended September 30,
               2005, File No. 000-49717.)(a)

   3.1         Certificate of Amendment of Restated Certificate of
               Incorporation of Crowley Maritime Corporation dated as of
               May 23, 1994 (incorporated by reference to Exhibit No. 3.1
               to the registrant's Registration Statement on Form 10-12G
               filed on April 1, 2002, File No. 000-49717.)

   3.2         Certificate of Amendment of Restated Certificate of
               Incorporation of Crowley Maritime Corporation dated as of
               July 31, 1992 (incorporated by reference to Exhibit No. 3.2
               to the registrant's Registration Statement on Form 10-12G
               filed on April 1, 2002, File No. 000-49717.)

   3.3         Restated Certificate of Incorporation of Crowley Maritime
               Corporation (incorporated by reference to Exhibit No. 3.3 to
               the registrant's Registration Statement on Form 10-12G filed
               on April 1, 2002, File No. 000-49717.)

   3.4         Restated By-Laws of Crowley Maritime Corporation
               (incorporated by reference to Exhibit No. 3.4 to the
               registrant's Registration Statement on Form 10-12G filed on
               April 1, 2002, File No. 000-49717.)

   4.1         Form of Common Stock certificate (incorporated by reference
               to Exhibit No. 4.1 to the registrant's Registration
               Statement on Form 10-12G filed on April 1, 2002, File No.
               000-49717.)

  10.1         Agreement for Contract Services between Crowley Maritime
               Corporation and William P. Verdon #

  10.2         Crowley Maritime Corporation Deferred Compensation Plan as
               amended and restated (incorporated by reference to Exhibit
               No. 10.2 to the registrant's Registration Statement on Form
               10-12G filed on April 1, 2002, File No. 000-49717.)#

  10.3         Crowley Maritime Corporation Deferred Compensation Plan
               Trust Agreement as amended (incorporated by reference to
               Exhibit No. 10.3 to the registrant's Registration Statement
               on Form 10-12G filed on April 1, 2002, File No. 000-49717.)#

  10.4         Individual Executive Benefit Agreement between Crowley
               Maritime Corporation and James B. Rettig (incorporated by
               reference to Exhibit No. 10.5 to the registrant's
               Registration Statement on Form 10-12G filed on April 1,
               2002, File No. 000-49717.)#

  10.5.1       Second Amendment to Split Dollar Life Insurance Agreement
               between Crowley Maritime Corporation and Thomas B. Crowley,
               Jr., as Trustee of the Thomas B. Crowley, Jr. Revocable
               Trust u/t/a dtd. July 1, 1998 by and between Thomas B.
               Crowley, Jr., as trustor and as trustee, dated as of July
               20, 1998 (incorporated by reference to Exhibit No. 10.8 to
               the registrant's Registration Statement on Form 10-12G filed
               on April 1, 2002, File No. 000-49717.)#

  10.5.2       Split Dollar Life Insurance Agreement (1035 Exchange Policy)
               between Crowley Maritime Corporation and Thomas B. Crowley,
               Jr. dated as of July 20, 1998 (incorporated by reference to
               Exhibit No. 10.9 to the registrant's Registration Statement
               on Form 10-12G filed on April 1, 2002, File No. 000-49717.)#

  10.5.3       Split Dollar Life Insurance Agreement (New Policies) between
               Crowley Maritime Corporation and Thomas B. Crowley, Jr.
               dated as of July 20, 1998 (incorporated by reference to
               Exhibit No. 10.10 to the registrant's Registration Statement
               on Form 10-12G filed on April 1, 2002, File No. 000-49717.)#
</Table>

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<PAGE>

<Table>
<Caption>
  EXHIBIT
   NUMBER                              DESCRIPTION
  -------                              -----------
<S>            <C>

  10.5.4       Split Dollar Life Insurance Agreement between Crowley
               Maritime Corporation, Thomas B. Crowley, Jr. and Christine
               S. Crowley, as Distributing Trustee of the 1998 Crowley
               Family Generation -- Skipping Trust u/t/d dtd/ November 12,
               1998 by and between Thomas B. Crowley, Jr., as trustor and
               as trustee, dated as of November 24, 1998 (incorporated by
               reference to Exhibit No. 10.11 to the registrant's
               Registration Statement on Form 10-12G filed on April 1,
               2002, File No. 000-49717.)#

  10.6         Settlement Agreement, dated as of December 23, 2003, between
               Crowley Maritime Corporation and Thomas B. Crowley, Jr.
               (incorporated by reference to Exhibit No. 10.14 to the
               registrant's Form 10-K Annual Report for the fiscal year
               ended December 31, 2003, File No. 000-49717.)#(b)

  10.7         Crowley Maritime Corporation 2004 Management Incentive Plan,
               dated March 10, 2004 (incorporated by reference to Exhibit
               No. 10.15 to the registrant's Form 10-K Annual Report for
               the fiscal year ended December 31, 2003, File No.
               000-49717.)#

  10.8         Description of Crowley Maritime Corporation Bonus Plan For
               Executives Whose Direct Annual Compensation is Less Than
               $1.0 Million (incorporated by reference to Exhibit No. 10.17
               to the registrant's Form 10-K Annual Report for the fiscal
               year ended December 31, 2004, File No. 000-49717.)#

  10.9         Summary of Named Executive Officer and Director Compensation
               Arrangements #

  10.10.1      $115,000,000 Amended and Restated Credit Agreement Dated as
               of November 2, 2001 (incorporated by reference to Exhibit
               No. 10.1 to the registrant's Registration Statement on Form
               10-12G filed on April 1, 2002, File No. 000-49717.)

  10.10.2      Letter Agreement and Consents regarding $115,000,000 Amended
               and Restated Credit Agreement (incorporated by reference to
               Exhibit No. 10 to the registrant's Form 10-Q for the quarter
               ended June 30, 2002, File No. 000-49717.)

  10.10.3      Amendment No. 1 to the $115,000,000 Amended and Restated
               Credit Agreement Dated as of September 30, 2003
               (incorporated by reference to Exhibit No. 10.1.1 to the
               registrant's Form 10-Q for the quarter ended September 30,
               2003, File No. 000-49717.)

  10.11        $95,000,000 Second Amended and Restated Credit Agreement
               Dated February 27, 2004 (incorporated by reference to
               Exhibit No. 10.1.2 to the registrant's Form 10-K Annual
               Report for the fiscal year ended December 31, 2003, File No.
               000-49717.)

  10.12.1      Loan Agreement dated December 24, 2003 Providing for a
               Secured Term Loan up to $115,000,000 between Crowley Marine
               Services, Inc., as Borrower, the Banks and Financial
               Institutions listed on Schedule I hereto, as Lenders, and
               Den Norske Bank ASA, and Crowley Maritime Corporation, as
               Guarantor, and Amendment No. 1 thereto made as of March 15,
               2004 (incorporated by reference to Exhibit No. 4.2 to the
               registrant's Form 10-K Annual Report for the fiscal year
               ended December 31, 2003, File No. 000-49717.) (a) (c)

  10.12.2      Amendment No. 2 to Loan Agreement dated December 24, 2003
               Providing for a Secured Term Loan of up to $115,000,000
               between Crowley Marine Service Inc., as Borrower, the Banks
               of Financial Institutions listed on Schedule 1 to the Loan
               Agreement, as Lenders, and DNB NOR BANK ASA, and Crowley
               Maritime Corporation, as Guarantor, dated June 30, 2004
               (incorporated by reference to Exhibit No. 4.2 to the
               registrant's Form 10-Q for the quarter ended June 30, 2004,
               File No. 000-49717.)

  10.13        Vessel Construction Contract, dated as of June 2, 2004,
               between VT Halter Marine Inc., a Delaware corporation, and
               Vessel Management Services, Inc., a Delaware corporation
               (incorporated by reference to Exhibit No. 10.1 to the
               registrant's Form 10-Q for the quarter ended June 30, 2004,
               File No. 000-49717.)

  10.14        Vessel Construction Contract entered into as of August 23,
               2005, by and between VT Halter Marine, Inc. and Vessel
               Management Services, Inc. (incorporated by reference to
               Exhibit No. 10.1 to the registrant's Form 10-Q for the
               quarter ended September 30, 2005, File No. 000-49717.)(a)

  11           Statement regarding computation of per share earnings
               (incorporated herein by reference to Note 18 of the Notes to
               Consolidated Financial Statements in 'Item 8. Financial
               Statements and Supplementary Data")

  21           Subsidiaries of Crowley Maritime Corporation
</Table>

                                        94
<PAGE>

<Table>
<Caption>
  EXHIBIT
   NUMBER                              DESCRIPTION
  -------                              -----------
<S>            <C>

  31.1         Rules 13a-14(a) and 15d-14a Certification (Principal
               Executive Officer)

  31.2         Rules 13a-14(a) and 15d-14a Certification (Principal
               Financial Officer)

  32.1         Section 1350 Certifications
</Table>

---------------

(a) Schedules and exhibits listed in the table of contents for this agreement
    have been omitted. Copies thereof will be furnished supplementally to the
    Securities and Exchange Commission upon request.

(b)  Schedule A (Policies on Life of the Survivor of Thomas B. and Molly
     Crowley) and Schedule B (Bank Loan) have been omitted. Copies thereof will
     be furnished supplementally to the Securities and Exchange Commission upon
     request.

(c)  Neither the Company nor its subsidiaries are parties to any other
     instrument with respect to long-term debt for which the securities
     authorized thereunder exceeds 10% of the total assets of the Company and
     its subsidiaries on a consolidated basis. Copies of instruments with
     respect to long-term debt of lesser amounts will be provided to the
     Securities and Exchange Commission upon request.

 #  Management contract or compensatory plan or arrangement.

                                        95