##### Table of Contents



UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
 Washington, D.C. 20549
 FORM 10-Q
  þ
    
    QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(D) OF THE SECURITIES EXCHANGE ACT OF 1934
 For the quarterly period ended June 30, 2009
 o
    
    TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(D) OF THE SECURITIES EXCHANGE ACT OF 1934
 For the transition period from  to
 Commission File Number: 1-33402
 Trico Marine Services, Inc.
  Delaware
(State or other jurisdiction of 
incorporation or organization)
    
    72-1252405
(I.R.S. Employer
Identification No.)
 10001 Woodloch Forest Drive, Suite 610,
    
    77380 (Zip code)The Woodlands, Texas(Address of principal executive offices)
  þ o
 o o
  Large accelerated filer o
    
    Accelerated filer
þ
    
    Non-accelerated filer o
(Do not check if a smaller reporting company)
    
    Smaller reporting company
o
 o þ
 þ o




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##### 



TRICO MARINE SERVICES, INC.
REPORT FORM 10-Q
FOR THE QUARTER ENDED JUNE 30, 2009
 TABLE OF CONTENTS
 PagePart I.Financial InformationItem 1. Financial Statements (Unaudited)Condensed Consolidated Balance Sheets  June 30, 2009 and December 31, 2008
    
    
    1Condensed Consolidated Statements of Income  Three and Six Months Ended June 30, 2009
and 2008
    
    
    2Condensed Consolidated Statements of Cash Flows  Six Months Ended June 30, 2009 and 2008
    
    
    3Notes to the Condensed Consolidated Financial Statements
    
    
    4Item 2. Managements Discussion and Analysis of Financial Condition and Results of Operations
    
    
    29Item 3. Quantitative and Qualitative Disclosures About Market Risk
    
    
    46Item 4. Controls and Procedures
    
    
    46Part II.Other Information
    
    
    46Item 1. Legal Proceedings
    
    
    46Item 1A. Risk Factors
    
    
    47Item 2. Unregistered Sales of Equity Securities and Use of Proceeds
    
    
    49Item 3. Defaults upon Senior Securities
    
    
    49Item 4. Submission of Matters to a Vote of Security Holders
    
    
    49Item 5. Other Information
    
    
    50Item 6. Exhibits
    
    
    51Signature
    
    
    55EX-10.24EX-10.25EX-10.26EX-31.1EX-31.2EX-32.1




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##### Table of Contents



PART I  FINANCIAL INFORMATION
 
 Item 1. Financial Statements
 TRICO MARINE SERVICES, INC. AND SUBSIDIARIES
 
 CONDENSED CONSOLIDATED BALANCE SHEETS
 (Unaudited)
 (In thousands, except share amounts)
 June 30,
    
    
    December 31,2009
    
    
    2008As adjusted, seeNotes 7 and 15ASSETSCurrent assets:Cash and cash equivalents
    
    $
    35,069
    
    
    $
    94,613Restricted cash
    
    
    3,674
    
    
    
    3,566Accounts receivable, net
    
    
    155,705
    
    
    
    165,152Prepaid expenses and other current assets
    
    
    22,028
    
    
    
    3,375Total current assets
    
    
    216,476
    
    
    
    266,706Property and equipment:Marine vessels
    
    
    509,653
    
    
    
    502,417Subsea equipment
    
    
    176,542
    
    
    
    153,003Construction-in-progress
    
    
    290,461
    
    
    
    260,069Transportation and other
    
    
    5,952
    
    
    
    4,902982,608
    
    
    
    920,391Less accumulated depreciation and amortization
    
    
    (153,126
    )
    
    
    (115,981
    )Net property and equipment, net
    
    
    829,482
    
    
    
    804,410Intangible assets
    
    
    112,403
    
    
    
    106,983Other assets
    
    
    24,323
    
    
    
    24,637Total assets
    
    $
    1,182,684
    
    
    $
    1,202,736LIABILITIES AND STOCKHOLDERS EQUITYCurrent liabilities:Short-term and current maturities of long-term debt
    
    $
    187,533
    
    
    $
    82,982Accounts payable
    
    
    42,741
    
    
    
    53,872Accrued expenses
    
    
    120,458
    
    
    
    85,656Accrued interest
    
    
    6,367
    
    
    
    10,383Foreign taxes payable
    
    
    2,289
    
    
    
    4,000Income taxes payable
    
    
    12,755
    
    
    
    18,133Other current liabilities
    
    
    362
    
    
    
    Total current liabilities
    
    
    372,505
    
    
    
    255,026Long-term debt
    
    
    517,290
    
    
    
    687,098Long-term derivative
    
    
    3,746
    
    
    
    1,119Foreign taxes payable
    
    
    33,018
    
    
    
    47,508Deferred income taxes
    
    
    2,681
    
    
    
    5,104Other liabilities
    
    
    7,327
    
    
    
    6,001Total liabilities
    
    
    936,567
    
    
    
    1,001,856Commitments and contingencies (See Note 16)
    
    
    
    
    
    
    Stockholders equity:Common stock, $.01 par value, 50,000,000 shares authorized and 19,793,138 and
16,199,980 shares issued at June 30, 2009 and December 31, 2008, respectively
    
    
    196
    
    
    
    160Warrants
    
    
    1,640
    
    
    
    1,640Additional paid-in capital
    
    
    330,472
    
    
    
    316,694Retained earnings
    
    
    28,598
    
    
    
    25,197Accumulated other comprehensive loss, net of tax
    
    
    (166,545
    )
    
    
    (202,681
    )Phantom stock
    
    
    55,588
    
    
    
    55,588Treasury stock, at cost, 570,207 shares
    
    
    (17,604
    )
    
    
    (17,604
    )Total Trico Marine Services, Inc. stockholders equity
    
    
    232,345
    
    
    
    178,994Noncontrolling interest
    
    
    13,772
    
    
    
    21,886Total equity
    
    
    246,117
    
    
    
    200,880Total liabilities and stockholders equity
    
    $
    1,182,684
    
    
    $
    1,202,736
 The accompanying notes are an integral part of these condensed consolidated financial statements.
 1




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TRICO MARINE SERVICES, INC. AND SUBSIDIARIES
 
 CONDENSED CONSOLIDATED STATEMENTS OF INCOME
 (Unaudited)
 (In thousands, except per share amounts )
 Three Months Ended June 30,
    
    
    Six Months Ended June 30,2009
    
    
    2008
    
    
    2009
    
    
    2008As adjusted, see
    
    
    
    
    
    
    As adjusted, seeNotes 7 and 15
    
    
    
    
    
    
    Notes 7 and 15Revenues
    
    $
    179,732
    
    
    $
    104,292
    
    
    $
    301,550
    
    
    $
    163,467Operating expenses:Direct operating expenses
    
    
    130,221
    
    
    
    70,846
    
    
    
    228,709
    
    
    
    103,839General and administrative
    
    
    19,390
    
    
    
    14,940
    
    
    
    40,829
    
    
    
    25,707Depreciation and amortization
    
    
    18,547
    
    
    
    12,895
    
    
    
    36,619
    
    
    
    19,642Impairment
    
    
    14,023
    
    
    
    
    
    
    
    14,023
    
    
    
    Gain on sales of assets
    
    
    (17,684
    )
    
    
    91
    
    
    
    (17,693
    )
    
    
    (2,746
    )Total operating expenses
    
    
    164,497
    
    
    
    98,772
    
    
    
    302,487
    
    
    
    146,442Operating income (loss)
    
    
    15,235
    
    
    
    5,520
    
    
    
    (937
    )
    
    
    17,025Interest expense, net of amounts capitalized
    
    
    (11,665
    )
    
    
    (7,134
    )
    
    
    (22,578
    )
    
    
    (8,286
    )Interest income
    
    
    790
    
    
    
    3,271
    
    
    
    1,862
    
    
    
    4,849Unrealized gain (loss) on mark-to-market of embedded derivative
    
    
    476
    
    
    
    (2,310
    )
    
    
    1,415
    
    
    
    (2,310
    )Gain on conversions of debt
    
    
    551
    
    
    
    
    
    
    
    11,330
    
    
    
    Refinancing costs
    
    
    (6,224
    )
    
    
    
    
    
    
    (6,224
    )
    
    
    Other
income (expense), net
    
    
    1,857
    
    
    
    (2,628
    )
    
    
    1,128
    
    
    
    (1,465
    )Income (loss) before income taxes
    
    
    1,020
    
    
    
    (3,281
    )
    
    
    (14,004
    )
    
    
    9,813Income tax (benefit) expense
    
    
    (3,641
    )
    
    
    (1,204
    )
    
    
    (18,669
    )
    
    
    746Net income (loss)
    
    
    4,661
    
    
    
    (2,077
    )
    
    
    4,665
    
    
    
    9,067Less: Net (income) attributable to noncontrolling interest
    
    
    (514
    )
    
    
    (1,541
    )
    
    
    (1,264
    )
    
    
    (2,382
    )Net income (loss) attributable to Trico Marine Services, Inc.
    
    $
    4,147
    
    
    $
    (3,618
    )
    
    $
    3,401
    
    
    $
    6,685Earnings (loss) per common share:Basic
    
    $
    0.22
    
    
    $
    (0.24
    )
    
    $
    0.19
    
    
    $
    0.46Diluted
    
    $
    0.22
    
    
    $
    (0.24
    )
    
    $
    0.19
    
    
    $
    0.43Weighted average shares outstanding:Basic
    
    
    18,601
    
    
    
    14,815
    
    
    
    17,657
    
    
    
    14,613Diluted
    
    
    26,345
    
    
    
    14,815
    
    
    
    18,011
    
    
    
    15,458
 The accompanying notes are an integral part of these condensed consolidated financial statements.
 2




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TRICO MARINE SERVICES, INC. AND SUBSIDIARIES
 
 CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS
 (Unaudited)
 (In thousands)
 Six Months Ended June 30,2009
    
    
    2008As adjusted, seeNotes 7 and 15Cash flows from operating activities:Net income
    
    $
    4,665
    
    
    $
    9,067Adjustments to reconcile net income (loss) to net cash provided by operating activities:Depreciation and amortization
    
    
    36,619
    
    
    
    19,642Amortization of non-cash deferred revenues
    
    
    (286
    )
    
    
    (184
    )Amortization of deferred financing costs
    
    
    1,437
    
    
    
    1,293Noncash benefit related to change in Norwegian tax law
    
    
    (18,568
    )
    
    
    Accretion of debt discount
    
    
    6,361
    
    
    
    3,651Deferred income taxes
    
    
    (3,156
    )
    
    
    740Impairment
    
    
    14,023
    
    
    
    Change in fair value of embedded derivative
    
    
    (1,415
    )
    
    
    2,310Gain on conversions of 6.5% Debentures
    
    
    (11,330
    )
    
    
    Cash paid for make-whole premium related to conversions of 6.5% Debentures
    
    
    (6,915
    )
    
    
    Gain on sales of assets
    
    
    (17,693
    )
    
    
    (2,746
    )Provision on doubtful accounts
    
    
    (140
    )
    
    
    9Stock based compensation
    
    
    1,787
    
    
    
    2,387Change in operating assets and liabilities
    
    
    23,286
    
    
    
    8,563Net cash provided by operating activities
    
    
    28,675
    
    
    
    44,732Cash flows from investing activities:Acquisition of DeepOcean, net of acquired cash
    
    
    
    
    
    
    (430,802
    )Purchases of property and equipment
    
    
    (48,848
    )
    
    
    (62,180
    )Proceeds from sales of assets
    
    
    30,024
    
    
    
    7,023Sale of hedge instrument
    
    
    
    
    
    
    8,151Decrease in restricted cash
    
    
    215
    
    
    
    4,650Net cash used in investing activities
    
    
    (18,609
    )
    
    
    (473,158
    )Cash flows from financing activities:Net proceeds from exercises of warrants and options
    
    
    
    
    
    
    11,615Proceeds from issuance of debt
    
    
    
    
    
    
    300,000Payment for exchange of convertible debentures
    
    
    (12,676
    )
    
    
    Proceeds and (repayments) of revolving credit facilities, net
    
    
    (49,353
    )
    
    
    161,774Dividend to noncontrolling partner
    
    
    (6,120
    )
    
    
    Debt issuance or refinancing costs
    
    
    (6,224
    )
    
    
    (16,123
    )Net cash provided by (used in) financing activities
    
    
    (74,373
    )
    
    
    457,266Effect of exchange rate changes on cash and cash equivalents
    
    
    4,763
    
    
    
    6,437Net increase (decrease) in cash and cash equivalents
    
    
    (59,544
    )
    
    
    35,277Cash and cash equivalents at beginning of period
    
    
    94,613
    
    
    
    131,463Cash and cash equivalents at end of period
    
    $
    35,069
    
    
    $
    166,740
 The accompanying notes are an integral part of these condensed consolidated financial statements.
 3




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TRICO MARINE SERVICES, INC. AND SUBSIDIARIES
 
 NOTES TO THE CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
 (Unaudited)
 1. Organization and Basis of Presentation
     2. Risks and Uncertainties
  o
    
    While its subsea services businesses met its EBITDA forecast for the second
quarter, the rates and utilization experienced in its towing and supply segment
deteriorated more than it anticipated. As a result, the Company has revised its future
EBITDA forecast to reflect its lower outlook for this segment of its business.o
    
    The further weakening of the U.S. Dollar relative to the Norwegian Kroner
during the second quarter resulted in additional cash payments required to bring the
Companys Kroner based credit facility within its contractual credit limit.
  4




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5




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(a)
    
    the consummation of any transaction that is disclosed in a Schedule 13D (or successor
form) by any person and the result of which is that such person has become the
beneficial owner (as these terms are defined in Rule 13d-3 and Rule 13d-5 under the
Exchange Act), directly or indirectly, of more than 50% of the Companys Capital Stock that
is at the time entitled to vote by the holder thereof in the election of the Board of
Directors (or comparable body); or(b)
    
    the first day on which a majority of the members of the Board of Directors are not
continuing directors of the Board; or(c)
    
    the adoption of a plan relating to the liquidation or dissolution of the Company; or(d)
    
    the consolidation or merger of the Company with or into any other Person, or the sale,
lease, transfer, conveyance or other disposition, in one or a series of related
transactions, of all or substantially all of the Companys assets and those of its
subsidiaries taken as a whole to any person (as this term is used in Section 13(d)(3) of
the Exchange Act), other than:
 (i)
    
    any transaction pursuant to which the holders of 50% or more of the total
voting power of all shares of the Companys capital stock entitled to vote generally
in elections of directors of the Company immediately prior to such transaction have
the right to exercise, directly or indirectly, 50% or more of the total voting power
of all shares of the Companys capital stock entitled to vote generally in elections
of directors of the continuing or surviving Person (or any parent thereof) immediately
after giving effect to such transaction; or(ii)
    
    any merger primarily for the purpose of changing the Companys jurisdiction
of incorporation and resulting in a reclassification, conversion or exchange of
outstanding shares of common stock solely into shares of common stock of the surviving
entity.
 (e)
    
    the termination of trading of the common stock, which will be deemed to have occurred if
the common stock or other common equity interests into which the 8.125% Debentures are
convertible is neither listed for trading on a United States national securities exchange
nor approved for listing on any United States system of automated dissemination of
quotations of securities prices, and no American Depositary Shares or similar instruments
for such common equity
interests are so listed or approved for listing in the United States.
 6




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3. Acquisition
     Pro forma Information
  Three Months Ended
    
    Six Months EndedJune 30, 2008
    
    June 30, 2008Historical
    
    Pro Forma
    
    Historical
    
    Pro FormaAs adjusted, see
    
    
    
    
    
    As adjusted, seeNotes 7 and 15
    
    
    
    
    
    Notes 7 and 15Revenues
    
    $
    104,292
    
    
    $
    166,236
    
    
    $
    163,467
    
    
    $
    312,192Operating income (1)
    
    
    5,520
    
    
    
    (2,651
    )
    
    
    17,025
    
    
    
    8,011Income (loss) before income taxes (2)
    
    
    (3,281
    )
    
    
    (15,022
    )
    
    
    9,813
    
    
    
    (11,865
    )Net income (loss)
attributable to
Trico Marine
Services, Inc.
    
    $
    (3,618
    )
    
    $
    (14,782
    )
    
    $
    6,685
    
    
    $
    (14,734
    )Diluted net income (loss) per share of common stock
    
    $
    (0.24
    )
    
    $
    (1.00
    )
    
    $
    0.43
    
    
    $
    (1.01
    )Diluted weighted average shares outstanding
    
    
    14,815
    
    
    
    14,815
    
    
    
    15,458
    
    
    
    14,613
 
 (1)
    
    Pro forma amounts for the three and six months ended June 30, 2008 include the effect of
non-recurring transactions that occurred at DeepOcean prior to its acquisition by the Company.
These charges include a $7.2 million estimated loss on a contract for services in Brazil that
resulted following a delay in delivery of a vessel to perform the contracted work, a $2.6
million disputed loss with a partner for a project in India and $4.3 million of
acquisition-related costs. 7




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(2)
    
    Pro forma amounts include acquisition-related debt costs ($16.3 million), including the
amortization of debt discount on the 6.5% Debentures (see Note 6). The Company determined that
approximately 50% of its acquisition related interest expense would be capitalized in the 2008
pro forma periods. 4. Sale of Assets
   5. Intangible Assets
   As of June 30, 2009
    
    
    As of December 31, 2008Foreign
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    ForeignGross Carrying
    
    
    Accumulated
    
    
    Currency Translation
    
    
    
    
    
    
    Gross Carrying
    
    
    Accumulated
    
    
    Currency TranslationAmount
    
    
    Amortization
    
    
    Adjustment
    
    
    Total
    
    
    Amount
    
    
    Amortization
    
    
    Adjustment
    
    
    TotalAmortized intangible assets:Customer relationships
    
    $
    118,057
    
    
    $
    (8,496
    )
    
    $
    (25,972
    )
    
    $
    83,589
    
    
    $
    118,057
    
    
    $
    (5,040
    )
    
    $
    (32,459
    )
    
    $
    80,558Total
    
    $
    118,057
    
    
    $
    (8,496
    )
    
    $
    (25,972
    )
    
    $
    83,589
    
    
    $
    118,057
    
    
    $
    (5,040
    )
    
    $
    (32,459
    )
    
    $
    80,558
 Foreign
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    ForeignGross Carrying
    
    
    
    
    
    
    Currency Translation
    
    
    
    
    
    
    Gross Carrying
    
    
    
    
    
    
    Currency TranslationAmount
    
    
    Impairment
    
    
    Adjustment
    
    
    Total
    
    
    Amount
    
    
    Impairment
    
    
    Adjustment
    
    
    TotalUnamortized intangible assets:Trade name
    
    $
    40,881
    
    
    $
    (3,114
    )
    
    $
    (8,953
    )
    
    $
    28,814
    
    
    $
    40,881
    
    
    $
    (3,114
    )
    
    $
    (11,342
    )
    
    $
    26,425Total
    
    $
    40,881
    
    
    $
    (3,114
    )
    
    $
    (8,953
    )
    
    $
    28,814
    
    
    $
    40,881
    
    
    $
    (3,114
    )
    
    $
    (11,342
    )
    
    $
    26,425
  6. Debt
  8




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June 30,
    
    
    December 31,2009
    
    
    2008As adjustedNOK 350 million Revolving Credit Facility(1), maturing January 1, 2010
    
    $
    59,790
    
    
    $
    61,531NOK 230 million Revolving Credit Facility(1), maturing January 1, 2010
    
    
    17,940
    
    
    
    21,233NOK 150 million Additional Term Loan(1), maturing January 1, 2010
    
    
    9,428
    
    
    
    10,398NOK 200 million Overdraft Facility(1), maturing January 1, 2010
    
    
    14,542
    
    
    
    3,20723.3 million Euro Revolving Credit Facility(1), maturing March 31, 2010
    
    
    19,897
    
    
    
    19,717NOK
260 million Short Term Credit Facility, interest at 9.9%, maturing
on February 1, 2009
    
    
    
    
    
    
    11,631$50 million U.S. Revolving Credit Facility Agreement(1), maturing in July 2010
    
    
    31,509
    
    
    
    46,460$202.8 million face amount, 8.125% Convertible Debentures, net of unamortized
discount of $14.6 million as of June 30, 2009, interest payable semi-annually
in arrears, maturing on February 1, 2013
    
    
    188,191
    
    
    
    $278.0 million face amount, 6.5% Senior Convertible Debentures, net of unamortized
discount of $45.0 million as of December 31, 2008, interest payable semi-annually in arrears,
exchanged in May 2009
    
    
    
    
    
    
    232,998$150.0 million face amount, 3.0% Senior Convertible Debentures(2), net of unamortized
discount of $33.0 million and $35.9 million as of June 30, 2009 and December 31, 2008,
respectively, interest payable semi-annually in arrears, maturing on January 15, 2027
    
    
    117,006
    
    
    
    114,150$200 million Revolving Credit Facility(1), maturing in May 2013
    
    
    136,335
    
    
    
    160,563$100 million Revolving Credit Facility(1), maturing no later than December 2017
    
    
    36,550
    
    
    
    15,0006.11% Notes, principal and interest due in 30 semi-annual installments, maturing April 2014
    
    
    6,286
    
    
    
    6,915$18 million Revolving Credit Facility(1), maturing December 5, 2011
    
    
    15,000
    
    
    
    16,0008 million Sterling Overdraft Facility, maturity 364 days after drawdown
    
    
    12,491
    
    
    
    9,81224.2 million Sterling Asset Financing Revolving Credit Facility(1), maturing
no later than December 13, 2014
    
    
    17,705
    
    
    
    17,286Finance lease obligations assumed in the acquisition of DeepOcean, maturing from
October 2009 to November 2015
    
    
    14,082
    
    
    
    14,172Other debt, maturing from July 2009 to August 2014
    
    
    7,789
    
    
    
    8,695Fresh-start debt premium
    
    
    282
    
    
    
    312Total debt
    
    
    704,823
    
    
    
    770,080Less current maturities
    
    
    (187,533
    )
    
    
    (82,982
    )Long-term debt
    
    $
    517,290
    
    
    $
    687,098
 
 (1)
    
    Interest on such credit facilities is at the London inter-bank offered rate (LIBOR) or
the Norwegian inter-bank offered rate (NIBOR) plus an applicable margin ranging from 1.65%
to 3.25%. The three month LIBOR rate was 0.6% and 1.8% and the three month NIBOR rate was
1.96% and 3.97% for the periods ending June 30, 2009 and December 31, 2008, respectively.(2)
    
    Holders of the Companys 3% Debentures have the right to require it to repurchase
debentures on each of January 15, 2014, January 15, 2017 and January 15, 2022.  AmountDue in one year
    
    $
    187,533Due in two years
    
    
    59,694Due in three years
    
    
    46,899Due in four years
    
    
    265,009Due in five years
    
    
    19,389Due in over five years
    
    
    173,631
    (1)752,155Fresh-start debt premium
    
    
    282Unamortized discount on 8.125% and 3.0% Debentures
    
    
    (47,614
    )Total debt
    
    $
    704,823
 
 (1)
    
    Includes the $150.0 million of 3% Debentures that may be converted earlier but have
stated maturity terms in excess of five years. 9




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##### Table of Contents



Current Maturities:
 NOK 350 million Revolving Credit Facility.
 NOK 230 million Revolving Credit Facility.
 NOK 150 million Additional Term Loan.
 NOK 200 million Overdraft Facility.
  10




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##### Table of Contents



23.3 million Euro Revolving Credit Facility.
 NOK 260 million Short Term Credit Facility.
  $50 million U.S. Credit Facility.
   8.125% Convertible Debentures.
  11




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12




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##### Table of Contents



6.5% Convertible Debentures.
  3% Senior Convertible Debentures.
   $200 million Revolving Credit Facility.
 13




---



##### Table of Contents



$100 million Revolving Credit Facility.
  6.11% Notes.
 $18 million Revolving Credit Facility.
 14




---



##### Table of Contents



8 million Sterling Overdraft Facility.
 24.2 million Sterling Asset Financing Facilities.
   7. FASB Staff Position APB 14-1
   Three Months Ended
    
    
    Six Months EndedJune 30, 2009
    
    
    June 30, 2009Net incremental non-cash interest expense
    
    $
    1,341
    
    
    $
    2,701Less: tax effect
    
    
    (483
    )
    
    
    (972
    )Net incremental non-cash interest expense, net of tax
    
    $
    858
    
    
    $
    1,729Net decrease to earnings per common share:Basic
    
    $
    0.05
    
    
    $
    0.10Diluted
    
    $
    0.03
    
    
    $
    0.10
 15




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##### Table of Contents



Three Months Ended June 30, 2008As Reported
    
    APB 14-1
    
    AdjustedJune 30, 2008
    
    Adjustment
    
    June 30, 2008Interest expense, net of amounts capitalized
    
    $
    (6,176
    )
    
    $
    (958
    )
    
    $
    (7,134
    )Income tax benefit
    
    
    (859
    )
    
    
    (345
    )
    
    
    (1,204
    )Net income (loss) attributable to Trico Marine Services, Inc.
    
    
    (3,005
    )
    
    
    (613
    )
    
    
    (3,618
    )Earnings (loss) per common share:Basic
    
    $
    (0.20
    )
    
    $
    (0.04
    )
    
    $
    (0.24
    )Diluted
    
    
    (0.20
    )
    
    
    (0.04
    )
    
    
    (0.24
    )Weighted average shares outstanding:Basic
    
    
    14,815
    
    
    
    14,815
    
    
    
    14,815Diluted
    
    
    14,815
    
    
    
    14,815
    
    
    
    14,815
 Six Months Ended June 30, 2008As Reported
    
    APB 14-1
    
    AdjustedJune 30, 2008
    
    Adjustment
    
    June 30, 2008Interest expense, net of amounts capitalized
    
    $
    (6,399
    )
    
    $
    (1,887
    )
    
    $
    (8,286
    )Income tax expense (benefit)
    
    
    1,425
    
    
    
    (679
    )
    
    
    746Net income (loss) attributable to Trico Marine Services, Inc.
    
    
    7,893
    
    
    
    (1,208
    )
    
    
    6,685Earnings (loss) per common share:Basic
    
    $
    0.54
    
    
    $
    (0.08
    )
    
    $
    0.46Diluted
    
    
    0.51
    
    
    
    (0.08
    )
    
    
    0.43Weighted average shares outstanding:Basic
    
    
    14,613
    
    
    
    14,613
    
    
    
    14,613Diluted
    
    
    15,458
    
    
    
    15,458
    
    
    
    15,458
 Twelve Months Ended December 31, 2008As Reported
    
    APB 14-1
    
    AdjustedDecember 31, 2008
    
    Adjustment
    
    December 31, 2008Interest expense, net of amounts capitalized
    
    $
    (31,943
    )
    
    $
    (3,893
    )
    
    $
    (35,836
    )Income tax expense (benefit)
    
    
    14,823
    
    
    
    (1,401
    )
    
    
    13,422Net income (loss) attributable to Trico Marine Services, Inc.
    
    
    (111,163
    )
    
    
    (2,492
    )
    
    
    (113,655
    )Earnings (loss) per common share:Basic
    
    $
    (7.54
    )
    
    $
    (0.17
    )
    
    $
    (7.71
    )Diluted
    
    
    (7.54
    )
    
    
    (0.17
    )
    
    
    (7.71
    )Weighted average shares outstanding:Basic
    
    
    14,744
    
    
    
    14,744
    
    
    
    14,744Diluted
    
    
    14,744
    
    
    
    14,744
    
    
    
    14,744
 16




---



##### Table of Contents



As Reported
    
    APB 14-1
    
    AdjustedDecember 31, 2008
    
    Adjustment
    
    December 31, 2008ASSETSConstruction-in-progress
    
    $
    258,826
    
    
    $
    1,243
    
    
    $
    260,069Other assets
    
    
    25,720
    
    
    
    (1,083
    )
    
    
    24,637Total assets
    
    
    1,202,576
    
    
    
    160
    
    
    
    1,202,736LIABILITIES AND STOCKHOLDERS EQUITYLong-term debt
    
    $
    722,948
    
    
    $
    (35,850
    )
    
    $
    687,098Total liabilities
    
    
    1,037,706
    
    
    
    (35,850
    )
    
    
    1,001,856Additional paid-in capital
    
    
    275,433
    
    
    
    41,261
    
    
    
    316,694Retained earnings
    
    
    30,448
    
    
    
    (5,251
    )
    
    
    25,197Total Trico Marine Services, Inc. stockholders equity
    
    
    142,984
    
    
    
    36,010
    
    
    
    178,994Total liabilities and stockholders equity
    
    
    1,202,576
    
    
    
    160
    
    
    
    1,202,736
 As Reported
    
    
    APB 14-1
    
    
    AdjustedDecember 31, 2007
    
    
    Adjustment
    
    
    December 31, 2007ASSETSConstruction-in-progress
    
    $
    255,749
    
    
    $
    
    
    
    $
    255,749Other assets
    
    
    15,858
    
    
    
    (1,297
    )
    
    
    14,561Total assets
    
    
    681,744
    
    
    
    (1,297
    )
    
    
    680,447LIABILITIES AND STOCKHOLDERS EQUITYLong-term debt
    
    $
    157,287
    
    
    $
    (41,200
    )
    
    $
    116,087Total liabilities
    
    
    278,644
    
    
    
    (41,200
    )
    
    
    237,444Additional paid-in capital
    
    
    245,134
    
    
    
    42,662
    
    
    
    287,796Retained earnings
    
    
    141,611
    
    
    
    (2,759
    )
    
    
    138,852Total Trico Marine Services, Inc. stockholders equity
    
    
    390,222
    
    
    
    39,903
    
    
    
    430,125Total liabilities and stockholders equity
    
    
    681,744
    
    
    
    (1,297
    )
    
    
    680,447
  8. Derivative Instruments
  17




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##### Table of Contents



Liability DerivativeJune 30, 2009
    
    
    December 31, 2008Derivatives Not Designated as Hedging
    
    Balance Sheet
    
    Fair
    
    
    Balance Sheet
    
    FairInstruments under Statement 133
    
    Location
    
    Value
    
    
    Location
    
    ValueOther contract  Warrant Liabilities (8.125% Debentures)
    
    Other current liabilities
    
    $
    362
    
    
    Other current liabilities
    
    $
    Other contract  6.5% Debentures
    
    Long-term derivative
    
    
    
    
    
    Long-term derivative
    
    
    1,119Other contract  8.125% Debentures
    
    Long-term derivative
    
    
    3,746
    
    
    Long-term derivative
    
    
    Total derivatives
    
    
    
    $
    4,108
    
    
    
    
    $
    1,119
 Derivatives NotDesignated as Hedging
    
    Location of Gain (Loss)
    
    Amount of Gain (Loss) Recognized on DerivativeInstruments under
    
    Recognized in Income
    
    Three Months Ended June 30,
    
    
    Six Months Ended June 30,Statement 133
    
    on Derivative
    
    2009
    
    
    2008
    
    
    2009
    
    
    2008Other contract
    
    Unrealized gain on mark-to-market of warrant
liabilities  8.125% Debentures
    
    $
    18
    
    
    $
    
    
    
    $
    18
    
    
    $
    Other contract
    
    Unrealized gain (loss) on mark-to-market of embedded
derivative  6.5% Debentures
    
    
    (503
    )
    
    
    (2,310
    )
    
    
    436
    
    
    
    (2,310
    )Other contract
    
    Unrealized gain on mark-to-market of embedded
derivative  8.125% Debentures
    
    
    979
    
    
    
    
    
    
    
    979
    
    
    
    $
    494
    
    
    $
    (2,310
    )
    
    $
    1,433
    
    
    $
    (2,310
    )
 9. Fair Value Measurements
  
    
    Level 1  Observable inputs such as quoted prices (unadjusted) in active markets for
identical assets or liabilities.
    
    Level 2  Inputs other than quoted prices that are observable for the asset or liability,
either directly or indirectly. These include quoted prices for similar assets or liabilities
in active markets and quoted prices for identical or similar assets or liabilities in
markets that are not active.
    
    Level 3  Unobservable inputs that reflect the reporting entitys own assumptions.Financial liabilities subject to fair value measurements on a recurring basis are as follows
(in thousands):
 18




---



##### Table of Contents



Fair Value Measurementsat June 30, 2009 Using Fair ValueHierarchyCarrying Value as
    
    
    Fair Value as ofof June 30, 2009
    
    
    June 30, 2009
    
    
    Level 1
    
    
    Level 2
    
    
    Level 3LiabilitiesWarrant liabilities (8.125% Debentures)
    
    $
    362
    
    
    $
    362
    
    
    $
    
    
    
    $
    362
    
    
    $
    Long-term derivative (8.125% Debentures)
    
    
    3,746
    
    
    
    3,746
    
    
    
    
    
    
    
    
    
    
    
    3,746$
    4,108
    
    
    $
    4,108
    
    
    $
    
    
    
    $
    362
    
    
    $
    3,746
 Fair Value Measurementsat December 31, 2008 Using Fair ValueHierarchyCarrying Value asof December 31,
    
    
    Fair Value as of2008
    
    
    December 31, 2008
    
    
    Level 1
    
    
    Level 2
    
    
    Level 3LiabilitiesWarrant Liabilities (8.125% Debentures)
    
    $
    
    
    
    $
    
    
    
    $
    
    
    
    $
    
    
    
    $
    Long-term derivative (6.5% Debentures)
    
    
    1,119
    
    
    
    1,119
    
    
    
    
    
    
    
    
    
    
    
    1,119$
    1,119
    
    
    $
    1,119
    
    
    $
    
    
    
    $
    
    
    
    $
    1,119
  Cash, cash equivalents, accounts receivable and accounts payable:
 Debt:
 June 30, 2009
    

December 31, 2008Carrying amount
    
    $
    704,823
    
    
    $
    770,080Fair value
    
    
    564,907
    
    
    
    562,783
  8.125%
    
    
    6.5%Debentures
    
    
    DebenturesBalance on
March 31, 2008
    
    $
    
    
    
    $
    Issuance of
long-term derivative (6.5% Debentures)
    
    
    
    
    
    
    53,772Unrealized gain for the period May 14, 2008 through December 31, 2008
    
    
    
    
    
    
    (52,653
    )Balance on December 31, 2008
    
    $
    
    
    
    $
    1,119Unrealized gain for 2009
    
    
    (979
    )
    
    
    (436
    )Exchange 6.5% for 8.125% Debentures
    
    
    4,725
    
    
    
    (683
    )Balance on June 30, 2009
    
    $
    3,746
    
    
    $
    
 19




---



##### Table of Contents



10. Earnings (Loss) per Share
  Three Months Ended June 30,
    
    
    Six Months Ended June 30,2009
    
    
    2008
    
    
    2009
    
    
    2008As adjusted, see
    
    
    
    
    
    
    As adjusted, seeNotes 7 and 15
    
    
    
    
    
    
    Notes 7 and 15Basic EPSNet income (loss) attributable to Trico Marine Services, Inc.
    
    $
    4,147
    
    
    $
    (3,618
    )
    
    $
    3,401
    
    
    $
    6,685Weighted-average shares of common stock outstanding:Basic
    
    
    18,601
    
    
    
    14,815
    
    
    
    17,657
    
    
    
    14,613Earnings (Loss) per share:Basic
    
    $
    0.22
    
    
    $
    (0.24
    )
    
    $
    0.19
    
    
    $
    0.46Diluted EPSNet income (loss) attributable to Trico Marine Services, Inc.
    
    $
    4,147
    
    
    $
    (3,618
    )
    
    $
    3,401
    
    
    $
    6,685Add: Interest on 8.125% convertible debentures, net of tax
    
    
    1,736
    
    
    
    
    
    
    
    
    (1)
    
    
    Net income (loss) attributable to Trico Marine Services, Inc.
with assumed conversions
    
    $
    5,883
    
    
    $
    (3,618
    )
    
    $
    3,401
    
    
    $
    6,685Weighted-average shares of common stock outstanding:Basic
    
    
    18,601
    
    
    
    14,815
    
    
    
    17,657
    
    
    
    14,613Add dilutive effect of:Phantom stock units
    
    
    229
    
    
    
    
    
    
    
    304
    
    
    
    4008.125% convertible debentures
    
    
    7,482
    
    
    
    
    
    
    
    
    (1)
    
    
    Stock options and nonvested restricted stock
    
    
    33
    
    
    
    
    
    
    
    50
    
    
    
    133Warrants
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    312Total
    
    
    26,345
    
    
    
    14,815
    
    
    
    18,011
    
    
    
    15,458Earnings (Loss) per share:Diluted
    
    $
    0.22
    
    
    $
    (0.24
    )
    
    $
    0.19
    
    
    $
    0.43
 
 (1)
    
    Does not include effect of 8.125% convertible debentures as they would be anti-dilutive.    11. Other Comprehensive Income (Loss)
  20




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##### Table of Contents



Three Months Ended June 30,2009
    
    2008Shareholders of
    
    
    
    
    
    
    
    
    
    Shareholders ofTrico Marine
    
    Noncontrolling
    
    
    
    
    
    Trico Marine
    
    NoncontrollingServices, Inc.
    
    Interests
    
    Total
    
    Services, Inc.
    
    Interests
    
    TotalAs adjusted, see Notes 7 and 15Net income (loss)
    
    $
    4,147
    
    
    $
    514
    
    
    $
    4,661
    
    
    $
    (3,618
    )
    
    $
    1,541
    
    
    $
    (2,077
    )Foreign currency translation gain (loss)
    
    
    22,862
    
    
    
    
    
    
    
    22,862
    
    
    
    (11,126
    )
    
    
    
    
    
    
    (11,126
    )Amortization of unrecognized actuarial gains
    
    
    87
    
    
    
    
    
    
    
    87
    
    
    
    
    
    
    
    
    
    
    
    Total comprehensive income (loss)
    
    $
    27,096
    
    
    $
    514
    
    
    $
    27,610
    
    
    $
    (14,744
    )
    
    $
    1,541
    
    
    $
    (13,203
    )
 Six Months Ended June 30,2009
    
    2008Shareholders of
    
    
    
    
    
    
    
    
    
    Shareholders ofTrico Marine
    
    Noncontrolling
    
    
    
    
    
    Trico Marine
    
    NoncontrollingServices, Inc.
    
    Interests
    
    Total
    
    Services, Inc.
    
    Interests
    
    TotalAs adjusted, see Notes 7 and 15Net income
    
    $
    3,401
    
    
    $
    1,264
    
    
    $
    4,665
    
    
    $
    6,685
    
    
    $
    2,382
    
    
    $
    9,067Foreign currency translation gain
    
    
    35,952
    
    
    
    
    
    
    
    35,952
    
    
    
    15,235
    
    
    
    
    
    
    
    15,235Amortization of unrecognized actuarial gains
    
    
    184
    
    
    
    
    
    
    
    184
    
    
    
    85
    
    
    
    
    
    
    
    85Total comprehensive income
    
    $
    39,537
    
    
    $
    1,264
    
    
    $
    40,801
    
    
    $
    22,005
    
    
    $
    2,382
    
    
    $
    24,387
 12. Stock-Based Compensation
   Date of
    
    
    
    
    
    Number of
    
    ExerciseGrant
    
    Grants
    
    Vesting Period
    
    Shares
    
    PriceMarch 13, 2009
    
    SARs
    
    Ratably over three years
    
    
    170,724
    
    
    $
    2.05March 13, 2009
    
    SARs
    
    Vest 100% on third anniversary of grant date
    
    
    130,144
    
    
    
    2.05March 13, 2009
    
    Stock options
    
    Ratably over three years
    
    
    170,724
    
    
    
    2.05May 13, 2009
    
    Stock options
    
    30 days from date of grant
    
    
    60,000
    
    
    
    3.57May 13, 2009
    
    Restricted stock
    
    30 days from date of grant
    
    
    60,000
    
    
    
    3.57
  21




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##### Table of Contents



May 13, 2009March 13, 2009 Grant Date
    
    Grant DateSARs
    
    Stock
    
    StockVested Ratably
    
    Cliff Vested
    
    Options
    
    OptionsGrant-Date Fair Value
    
    $
    1.02
    
    
    $
    1.00
    
    
    $
    1.02
    
    
    $
    1.68Expected Term
    
    
    4.5
    
    
    
    5.0
    
    
    
    4.5
    
    
    
    3.5Expected Volatility
    
    
    60
    %
    
    
    55
    %
    
    
    60
    %
    
    
    65
    %Risk-Free Interest Rate
    
    
    1.74
    %
    
    
    1.87
    %
    
    
    1.74
    %
    
    
    1.48
    %Expected Dividend Distributions
    
    
    N/A
    
    
    
    N/A
    
    
    
    N/A
    
    
    
    N/A
  SARsVested Ratably
    
    Cliff VestedGrant-Date Fair Value
    
    $
    2.12
    
    
    $
    2.10Expected Term
    
    
    4.3
    
    
    
    4.7Expected Volatility
    
    
    60
    %
    
    
    55
    %Risk-Free Interest Rate
    
    
    2.23
    %
    
    
    2.41
    %Expected Dividend Distributions
    
    
    N/A
    
    
    
    N/A
 13. Taxes
     22




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##### Table of Contents



14. Employee Benefit Plans
  Three Months Ended June 30,
    
    
    Six Months Ended June 30,2009
    
    
    2008
    
    
    2009
    
    
    2008Service cost
    
    $
    919
    
    
    $
    75
    
    
    $
    1,945
    
    
    $
    147Interest cost
    
    
    215
    
    
    
    195
    
    
    
    467
    
    
    
    382Return on plan assets
    
    
    (247
    )
    
    
    (81
    )
    
    
    (534
    )
    
    
    (159
    )Social security contributions
    
    
    134
    
    
    
    18
    
    
    
    283
    
    
    
    36Recognized net actuarial loss
    
    
    87
    
    
    
    13
    
    
    
    184
    
    
    
    26Net periodic benefit cost
    
    $
    1,108
    
    
    $
    220
    
    
    $
    2,345
    
    
    $
    432
   23




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##### Table of Contents



15. Noncontrolling Interest
   Trico Marine
    
    
    NoncontrollingTotal
    
    

Services, Inc. (1)
    
    
    InterestBalance, December 31, 2007
    
    $
    443,003
    
    
    $
    430,125
    
    
    $
    12,878Net income (loss)
    
    
    (106,864
    )
    
    
    (113,655
    )
    
    
    6,791Capital contribution from Volstad
    
    
    3,519
    
    
    
    
    
    
    
    3,519Distribution to NAMESE Partner
    
    
    (244
    )
    
    
    
    
    
    
    (244
    )Foreign currency translation and other
    
    
    (138,534
    )
    
    
    (137,476
    )
    
    
    (1,058
    )Balance, December 31, 2008
    
    
    200,880
    
    
    
    178,994
    
    
    
    21,886Net income
    
    
    4,665
    
    
    
    3,401
    
    
    
    1,264Capital
contribution from Volstad
    
    
    2,284
    
    
    
    
    
    
    
    2,284Distribution to EMSL
    
    
    (6,120
    )
    
    
    
    
    
    
    (6,120
    )Foreign currency translation and other
    
    
    44,408
    
    
    
    49,950
    
    
    
    (5,542
    )Balance, June 30, 2009
    
    $
    246,117
    
    
    $
    232,345
    
    
    $
    13,772
 
 (1)
    
    Reflects adoption of APB 14-1 for Trico Marine Services, Inc. as discussed in Note 7. 16. Commitments and Contingencies
 General 
 24




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##### Table of Contents



Volstad Impairment  Withdrawal from Partnership 
 Saipem 
  Performance
Bond Facility 
 Plan of Reorganization Proceeding 
 Kistefos Lawsuit 
 25




---



##### Table of Contents



Brazilian Tax Assessments 
   17. Segment Information
   26




---



##### Table of Contents



SubseaTrenchingSubsea
    
    and
    
    Towing andServices
    
    Protection
    
    Supply
    
    Corporate
    
    Total(In thousands)Three Months Ended:June 30, 2009Revenues from Unaffiliated Customers
    
    $
    78,916
    
    
    $
    68,353
    
    
    $
    32,463
    
    
    $
    
    
    
    $
    179,732Intersegment Revenues
    
    
    6,623
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    6,623Operating Income (Loss)
    
    
    (10,392
    ) (1)
    
    
    14,915
    
    
    
    17,443
    
    
    
    (6,731
    )
    
    
    15,235Income (Loss) Before Income Taxes and Noncontrolling Interests
    
    
    (7,957
    ) (1)
    
    
    9,965
    
    
    
    18,486
    
    
    
    (19,474
    )
    
    
    1,020June 30, 2008Revenues from Unaffiliated Customers
    
    $
    41,223
    
    
    $
    15,464
    
    
    $
    47,605
    
    
    $
    
    
    
    $
    104,292Intersegment Revenues
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    Operating Income (Loss)
    
    
    5,338
    
    
    
    (2,502
    )
    
    
    9,109
    
    
    
    (6,425
    )
    
    
    5,520Income (Loss) Before Income Taxes and Noncontrolling Interests, as adjusted
    
    
    2,462
    
    
    
    (2,523
    )
    
    
    10,703
    
    
    
    (13,923
    )
    
    
    (3,281
    )
 SubseaTrenchingSubsea
    
    and
    
    Towing andServices
    
    Protection
    
    Supply
    
    Corporate
    
    Total(In thousands)Six Months Ended:June 30, 2009Revenues from Unaffiliated Customers
    
    $
    137,562
    
    
    $
    94,403
    
    
    $
    69,585
    
    
    $
    
    
    
    $
    301,550Intersegment Revenues
    
    
    7,308
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    7,308Operating Income (Loss)
    
    
    (15,871
    ) (1)
    
    
    11,679
    
    
    
    16,984
    
    
    
    (13,729
    )
    
    
    (937
    )Income (Loss) Before Income Taxes and Noncontrolling Interests
    
    
    (15,466
    ) (1)
    
    
    5,944
    
    
    
    18,422
    
    
    
    (22,904
    )
    
    
    (14,004
    )June 30, 2008Revenues from Unaffiliated Customers
    
    $
    50,204
    
    
    $
    15,463
    
    
    $
    97,800
    
    
    $
    
    
    
    $
    163,467Intersegment Revenues
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    Operating Income (Loss)
    
    
    7,954
    
    
    
    (2,502
    )
    
    
    22,269
    
    
    
    (10,696
    )
    
    
    17,025Income (Loss) Before Income Taxes and Noncontrolling Interests, as adjusted
    
    
    5,075
    
    
    
    (2,523
    )
    
    
    23,747
    
    
    
    (16,486
    )
    
    
    9,813
 
  18. Recent Accounting Standards
    27




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##### Table of Contents



19. Subsequent Events
   28




---



##### Table of Contents



Item 2. Managements Discussion and Analysis of Financial Condition and Results of Operations
  Cautionary Statements Regarding Forward-Looking Statements
  
    
    our objectives, business plans or strategies, and projected or anticipated benefits or
other consequences of such plans or strategies;
    
    our ability to obtain adequate financing on a timely basis and on acceptable terms,
including with respect to refinancing debt maturing in the next twelve months;
    
    our ability to continue to service, and to comply with our obligations under, our credit
facilities and our other indebtedness;
    
    projections involving revenues, operating results or cash provided from operations, or
our anticipated capital expenditures or other capital projects;
    
    overall demand for and pricing of our vessels;
    
    changes in the level of oil and natural gas exploration and development;
    
    our ability to successfully or timely complete our various vessel construction projects;
    
    further reductions in capital spending budgets by customers;
    
    further declines in oil and natural gas prices;
    
    projected or anticipated benefits from acquisitions;
    
    increases in operating costs;
    
    the inability to accurately predict vessel utilization levels and day rates;
    
    variations in global business and economic conditions;
    
    the results, timing, outcome or effect of pending or potential litigation and our
intentions or expectations with respect thereto and the availability of insurance coverage
in connection therewith; and
    
    our ability to repatriate cash from foreign operations if and when needed.
   Overview
  29




---



##### Table of Contents



Our Outlook
  30




---



##### Table of Contents



Reduce our debt level and improve liquidity and cash flow
 Maximize our vessel utilization and our subsea service spreads and reduce exposure to a
declining offshore supply vessel business.
 Expand our presence in additional subsea services markets.
 Invest in growth of our subsea service offerings.
 Focus on growing markets.
 Market Outlook  Demand for our Vessels and Services
  31




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##### Table of Contents



Subsea Services.
 Subsea Protection and Trenching.
 Towing and Supply.
 Market Outlook  Credit Environment
  Acquisition of DeepOcean and CTC Marine
   32




---



##### Table of Contents



Proxy Contest
   6.5% Convertible Notes Exchange
  Volstad Impairment
  Non-GAAP Financial Measures
   33




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##### Table of Contents



Three Months Ended June 30,
    
    
    Six Months Ended June 30,2009
    
    
    2008
    
    
    2009
    
    
    2008As adjusted, see
    
    
    
    
    
    
    As adjusted, seeNotes 7 and 15
    
    
    
    
    
    
    Notes 7 and 15Net Income (Loss) attributable to Trico Marine Services, Inc.
    
    $
    4,147
    
    
    $
    (3,618
    )
    
    $
    3,401
    
    
    $
    6,685Depreciation and Amortization
    
    
    18,547
    
    
    
    12,895
    
    
    
    36,619
    
    
    
    19,642Amortization of Non-Cash Deferred Revenue
    
    
    (147
    )
    
    
    (97
    )
    
    
    (286
    )
    
    
    (184
    )Interest Income
    
    
    (790
    )
    
    
    (3,271
    )
    
    
    (1,862
    )
    
    
    (4,849
    )Interest Expense, Net of Amounts Capitalized
    
    
    11,665
    
    
    
    7,134
    
    
    
    22,578
    
    
    
    8,286Unrealized Gain on Mark-to-Market of
Embedded Derivative
    
    
    (476
    )
    
    
    2,310
    
    
    
    (1,415
    )
    
    
    2,310Gain on Conversions of Debt
    
    
    (551
    )
    
    
    
    
    
    
    (11,330
    )
    
    
    Refinancing Costs
    
    
    6,224
    
    
    
    
    
    
    
    6,224
    
    
    
    Other (Income) Expense, Net
    
    
    (1,857
    )
    
    
    2,628
    
    
    
    (1,128
    )
    
    
    1,465Stock-Based Compensation
    
    
    1,063
    
    
    
    1,543
    
    
    
    1,787
    
    
    
    2,387(Gain) Loss on Sale of Assets
    
    
    (17,684
    )
    
    
    91
    
    
    
    (17,693
    )
    
    
    (2,746
    )Impairment
    
    
    14,023
    
    
    
    
    
    
    
    14,023
    
    
    
    Income Tax Expense (Benefit)
    
    
    (3,641
    )
    
    
    (1,204
    )
    
    
    (18,669
    )
    
    
    746Noncontrolling Interest of Consolidated Subsidiaries
    
    
    514
    
    
    
    1,541
    
    
    
    1,264
    
    
    
    2,382Adjusted EBITDA
    
    $
    31,037
    
    
    $
    19,952
    
    
    $
    33,513
    
    
    $
    36,124
  Three Months Ended June 30,
    
    
    Six Months Ended June 30,2009
    
    
    2008
    
    
    2009
    
    
    2008As adjusted
    
    
    
    
    
    
    As adjustedAdjusted EBITDA
    
    $
    31,037
    
    
    $
    19,952
    
    
    $
    33,513
    
    
    $
    36,124Depreciation and Amortization
    
    
    (18,547
    )
    
    
    (12,895
    )
    
    
    (36,619
    )
    
    
    (19,642
    )Amortization of Non-Cash Deferred
Revenue
    
    
    147
    
    
    
    97
    
    
    
    286
    
    
    
    184Stock-Based Compensation
    
    
    (1,063
    )
    
    
    (1,543
    )
    
    
    (1,787
    )
    
    
    (2,387
    )(Gain) Loss on Sale of Assets
    
    
    17,684
    
    
    
    (91
    )
    
    
    17,693
    
    
    
    2,746Impairment
    
    
    (14,023
    )
    
    
    
    
    
    
    (14,023
    )
    
    
    Operating Income (Loss)
    
    $
    15,235
    
    
    $
    5,520
    
    
    $
    (937
    )
    
    $
    17,025
 34




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##### Table of Contents



Results of Operations
  Three Months Ended June 30,
    
    
    Six Months Ended June 30,2009
    
    
    2008
    
    
    $ Change
    
    
    % Change
    
    
    2009
    
    
    2008
    
    
    $ Change
    
    
    % ChangeAs adjusted,
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    As adjusted,see Notes 7
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    see Notes 7and 15
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    and 15Revenues:Subsea Services
    
    $
    78,916
    
    
    $
    41,223
    
    
    $
    37,693
    
    
    
    91
    %
    
    $
    137,562
    
    
    $
    50,204
    
    
    $
    87,358
    
    
    
    174
    %Subsea Trenching and Protection
    
    
    68,353
    
    
    
    15,464
    
    
    
    52,889
    
    
    
    342
    %
    
    
    94,403
    
    
    
    15,463
    
    
    
    78,940
    
    
    
    511
    %Towing & Supply
    
    
    32,463
    
    
    
    47,605
    
    
    
    (15,142
    )
    
    
    (32
    )%
    
    
    69,585
    
    
    
    97,800
    
    
    
    (28,215
    )
    
    
    (29
    )%Total Revenues
    
    
    179,732
    
    
    
    104,292
    
    
    
    75,440
    
    
    
    72
    %
    
    
    301,550
    
    
    
    163,467
    
    
    
    138,083
    
    
    
    84
    %Operating Income (Loss):Subsea Services
    
    
    (10,392
    )
    
    
    5,338
    
    
    
    (15,730
    )
    
    
    (295
    )%
    
    
    (15,871
    )
    
    
    7,954
    
    
    
    (23,825
    )
    
    
    (300
    )%Subsea Trenching and Protection
    
    
    14,915
    
    
    
    (2,502
    )
    
    
    17,417
    
    
    
    (696
    )%
    
    
    11,679
    
    
    
    (2,502
    )
    
    
    14,181
    
    
    
    (567
    )%Towing & Supply
    
    
    17,443
    
    
    
    9,109
    
    
    
    8,334
    
    
    
    91
    %
    
    
    16,984
    
    
    
    22,269
    
    
    
    (5,285
    )
    
    
    (24
    )%Corporate
    
    
    (6,731
    )
    
    
    (6,425
    )
    
    
    (306
    )
    
    
    5
    %
    
    
    (13,729
    )
    
    
    (10,696
    )
    
    
    (3,033
    )
    
    
    28
    %Total Operating Income (Loss)
    
    
    15,235
    
    
    
    5,520
    
    
    
    9,715
    
    
    
    176
    %
    
    
    (937
    )
    
    
    17,025
    
    
    
    (17,962
    )
    
    
    (106
    )%Interest Income
    
    
    790
    
    
    
    3,271
    
    
    
    (2,481
    )
    
    
    (76
    )%
    
    
    1,862
    
    
    
    4,849
    
    
    
    (2,987
    )
    
    
    (62
    )%Interest Expense, Net of Amounts Capitalized
    
    
    (11,665
    )
    
    
    (7,134
    )
    
    
    (4,531
    )
    
    
    64
    %
    
    
    (22,578
    )
    
    
    (8,286
    )
    
    
    (14,292
    )
    
    
    172
    %Unrealized
Gain (Loss) on Mark to Market of Embedded Derivative
    
    
    476
    
    
    
    (2,310
    )
    
    
    2,786
    
    
    
    (121
    )%
    
    
    1,415
    
    
    
    (2,310
    )
    
    
    3,725
    
    
    
    (161
    )%Gain on Conversions of Debt
    
    
    551
    
    
    
    
    
    
    
    551
    
    
    
    100
    %
    
    
    11,330
    
    
    
    
    
    
    
    11,330
    
    
    
    100
    %Refinancing Costs
    
    
    (6,224
    )
    
    
    
    
    
    
    (6,224
    )
    
    
    100
    %
    
    
    (6,224
    )
    
    
    
    
    
    
    (6,224
    )
    
    
    100
    %Other Income (Expense), Net
    
    
    1,857
    
    
    
    (2,628
    )
    
    
    4,485
    
    
    
    (171
    )%
    
    
    1,128
    
    
    
    (1,465
    )
    
    
    2,593
    
    
    
    (177
    )%Income (Loss) from Operations
    
    
    1,020
    
    
    
    (3,281
    )
    
    
    4,301
    
    
    
    (131
    )%
    
    
    (14,004
    )
    
    
    9,813
    
    
    
    (23,817
    )
    
    
    (243
    )%Income Tax (Benefit) Expense
    
    
    (3,641
    )
    
    
    (1,204
    )
    
    
    (2,437
    )
    
    
    202
    %
    
    
    (18,669
    )
    
    
    746
    
    
    
    (19,415
    )
    
    
    (2,603
    )%Net Income (Loss)
    
    
    4,661
    
    
    
    (2,077
    )
    
    
    6,738
    
    
    
    (324
    )%
    
    
    4,665
    
    
    
    9,067
    
    
    
    (4,402
    )
    
    
    (49
    )%Less: Net (Income) Loss Attributable to the Noncontrolling
Interest
    
    
    (514
    )
    
    
    (1,541
    )
    
    
    1,027
    
    
    
    (67
    )%
    
    
    (1,264
    )
    
    
    (2,382
    )
    
    
    1,118
    
    
    
    (47
    )%Net Income (Loss) Attributable to Trico Marine Services, Inc.
    
    $
    4,147
    
    
    $
    (3,618
    )
    
    $
    7,765
    
    
    
    (215
    )%
    
    $
    3,401
    
    
    $
    6,685
    
    
    $
    (3,284
    )
    
    
    (49
    )%
 35




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##### Table of Contents



Month
    
    Three Months Ended
    
    Six Months EndedEnded
    
    June 30,
    
    June 30,July 31, 2009
    
    2009
    
    2008
    
    2009
    
    2008Average Day Rates:SubseaSPSVs (1)
    
    $
    29,126
    
    
    $
    27,638
    
    
    $
    21,941
    
    
    $
    24,644
    
    
    $
    20,160MSVs (2)
    
    
    84,229
    
    
    
    79,164
    
    
    
    N/A
    
    
    
    74,440
    
    
    
    N/ASubsea Trenching and Protection
    
    $
    106,959
    
    
    $
    127,991
    
    
    
    N/A
    
    
    $
    113,347
    
    
    
    N/ATowing and SupplyAHTSs (3)
    
    $
    18,690
    
    
    $
    17,110
    
    
    $
    32,983
    
    
    $
    21,196
    
    
    $
    36,345PSVs (4)
    
    
    16,821
    
    
    
    16,943
    
    
    
    17,486
    
    
    
    16,101
    
    
    
    17,721OSVs (5)
    
    
    5,874
    
    
    
    6,645
    
    
    
    7,252
    
    
    
    6,909
    
    
    
    7,209Utilization:SubseaSPSVs
    
    
    78
    %
    
    
    80
    %
    
    
    77
    %
    
    
    74
    %
    
    
    85
    %MSVs
    
    
    94
    %
    
    
    92
    %
    
    
    N/A
    
    
    
    83
    %
    
    
    N/ASubsea Trenching and Protection
    
    
    100
    %
    
    
    98
    %
    
    
    N/A
    
    
    
    95
    %
    
    
    N/ATowing and SupplyAHTSs
    
    
    79
    %
    
    
    64
    %
    
    
    78
    %
    
    
    67
    %
    
    
    82
    %PSVs
    
    
    95
    %
    
    
    87
    %
    
    
    92
    %
    
    
    89
    %
    
    
    91
    %OSVs
    
    
    65
    %
    
    
    66
    %
    
    
    82
    %
    
    
    66
    %
    
    
    79
    %Average number of Vessels:SubseaSPSVs
    
    
    7.0
    
    
    
    7.0
    
    
    
    5.0
    
    
    
    7.0
    
    
    
    5.0MSVs
    
    
    10.0
    
    
    
    9.7
    
    
    
    N/A
    
    
    
    9.4
    
    
    
    N/ASubsea Trenching and Protection
    
    
    4.3
    
    
    
    4.8
    
    
    
    N/A
    
    
    
    4.1
    
    
    
    N/ATowing and SupplyAHTSs
    
    
    6.0
    
    
    
    6.0
    
    
    
    6.0
    
    
    
    6.0
    
    
    
    6.0PSVs
    
    
    6.0
    
    
    
    6.3
    
    
    
    7.0
    
    
    
    6.6
    
    
    
    7.0OSVs
    
    
    33.0
    
    
    
    37.4
    
    
    
    38.0
    
    
    
    37.7
    
    
    
    38.1
 
 (1)
    
    Subsea platform supply vessels(2)
    
    Multi-purpose service vessels(3)
    
    Anchor handling, towing and supply vessels(4)
    
    Platform supply vessels(5)
    
    Offshore supply vessels Overall Results
  36




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##### Table of Contents



Segment Results
 Subsea Services
   Subsea Trenching and Protection
  Towing and Supply
  37




---



##### Table of Contents



Corporate
  Other Items
 Interest Income.
 Interest Expense.
 Unrealized Gain on Mark-to-Market of Embedded Derivative .
 Gain on Conversions of Debt.
 Refinancing Costs.
 Other (Expense) Income, Net.
 Income Tax (Benefit) Expense.
 38




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##### Table of Contents



Noncontrolling Interest.
 Liquidity and Capital Resources
     Liquidity Sufficiency
  o
    
    While our subsea services businesses met our EBITDA forecast for the second
quarter, the rates and utilization experienced in our towing and supply segment
deteriorated more than we anticipated. As a result, we have revised our future EBITDA
forecast to reflect our lower outlook for this segment of our business.
 o
    
    The further weakening of the U.S. Dollar relative to the Norwegian Kroner
during the second quarter resulted in additional cash payments required to bring our
Kroner based credit facility within our contractual credit limit.
  39




---



##### Table of Contents



Other Liquidity Items
    40




---



##### Table of Contents



June 30,
    
    
    December 31,2009
    
    
    2008As adjustedNOK 350 million Revolving Credit Facility(1), maturing January 1, 2010
    
    $
    59,790
    
    
    $
    61,531NOK 230 million Revolving Credit Facility(1), maturing January 1, 2010
    
    
    17,940
    
    
    
    21,233NOK 150 million Additional Term Loan(1), maturing January 1, 2010
    
    
    9,428
    
    
    
    10,398NOK 200 million Overdraft Facility(1), maturing January 1, 2010
    
    
    14,542
    
    
    
    3,20723.3 million Euro Revolving Credit Facility(1), maturing March 31, 2010
    
    
    19,897
    
    
    
    19,717NOK
260 million Short Term Credit Facility, interest at 9.9%, maturing
on February 1, 2009
    
    
    
    
    
    
    11,631$50 million U.S. Revolving Credit Facility Agreement(1), maturing in July 2010
    
    
    31,509
    
    
    
    46,460$202.8 million face amount, 8.125% Convertible Debentures, net of unamortized
discount of $14.6 million as of June 30, 2009, interest payable semi-annually
in arrears, maturing on February 1, 2013
    
    
    188,191
    
    
    
    $278.0 million face amount, 6.5% Senior Convertible Debentures, net of unamortized
discount of $45.0 million as of December 31, 2008, interest payable semi-annually in
arrears,
exchanged in May 2009
    
    
    
    
    
    
    232,998$150.0 million face amount, 3.0% Senior Convertible Debentures(2), net of
unamortized
discount of $33.0 million and $35.9 million as of June 30, 2009 and December 31, 2008,
respectively, interest payable semi-annually in arrears, maturing on January 15, 2027
    
    
    117,006
    
    
    
    114,150$200 million Revolving Credit Facility(1), maturing in May 2013
    
    
    136,335
    
    
    
    160,563$100 million Revolving Credit Facility(1), maturing no later than December 2017
    
    
    36,550
    
    
    
    15,0006.11% Notes, principal and interest due in 30 semi-annual installments, maturing April
2014
    
    
    6,286
    
    
    
    6,915$18 million Revolving Credit Facility(1), maturing December 5, 2011
    
    
    15,000
    
    
    
    16,0008 million Sterling Overdraft Facility, maturity 364 days after drawdown
    
    
    12,491
    
    
    
    9,81224.2 million Sterling Asset Financing Revolving Credit Facility(1), maturing
no later than December 13, 2014
    
    
    17,705
    
    
    
    17,286Finance lease obligations assumed in the acquisition of DeepOcean, maturing from
October 2009 to November 2015
    
    
    14,082
    
    
    
    14,172Other debt, maturing from July 2009 to August 2014
    
    
    7,789
    
    
    
    8,695Fresh-start debt premium
    
    
    282
    
    
    
    312Total debt
    
    
    704,823
    
    
    
    770,080Less current maturities
    
    
    (187,533
    )
    
    
    (82,982
    )Long-term debt
    
    $
    517,290
    
    
    $
    687,098
 
 (1)
    
    Interest on such credit facilities is at London inter-bank offered rate (LIBOR) or the
Norwegian inter-bank offered rate (NIBOR) plus an applicable margin ranging from 1.65% to
3.25%. The three month LIBOR rate was 0.6% and 1.8% and the three month NIBOR was 1.96% and
3.97% for the periods ending June 30, 2009 and December 31, 2008, respectively.(2)
    
    Holders of our 3% Debentures have the right to require us to repurchase the debentures on
each of January 15, 2014, January 15, 2017 and January 15, 2022. 41




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##### Table of Contents



Facility
    
    Lender (s)
    
    Borrower
    
    Guarantor
    
    Financial Covenants8.125% Senior Convertible Debentures
    
    Various
    
    Trico Marine Services, Inc.
    
    None
    
    No maintenance covenants3.0% Senior Convertible Debentures
    
    Various
    
    Trico Marine Services, Inc.
    
    None
    
    No maintenance covenants6.11% Notes
    
    Various
    
    Trico Marine
International, Inc.
    
    Trico Marine
Services, Inc. and
U.S. Maritime
Administration
    
    No maintenance covenants$200m Revolving Credit Facility
    
    Nordea Bank Finland PLC/
Bayerische Hypo  Und
Vereinsbank AG (HVB)
    
    Trico Shipping AS
    
    Trico Supply AS
    
    (1), (2), (3), (4)$100m Revolving Credit Facility
    
    Nordea Bank Finland PLC/
Bayerische Hypo  Und
Vereinsbank AG (HVB)
    
    Trico Subsea AS
    
    Trico Supply AS
    
    (1), (2), (3), (4)$50m U.S. Revolving Credit Facility
    
    Nordea Bank Finland PLC/
Bayerische Hypo  Und
Vereinsbank AG (HVB)
    
    Trico Marine Services, Inc.
    
    Trico Marine
Assets, Inc., Trico
Marine Operators,
Inc.
    
    (5), (2), (3), (6)NOK 350m Revolving Credit Facility
    
    Sparebank 1 SR-Bank
    
    DeepOcean Shipping II
    
    DeepOcean AS
    
    (7) (8), (9)NOK 230m Revolving Credit Facility
    
    Sparebank 1 SR-Bank
    
    DeepOcean AS
    
    None
    
    (7) (8), (9)23.3 Revolving Credit Facility
    
    Nordea Bank Norge ASA
    
    DeepOcean Shipping III
    
    Trico Supply AS
    
    (1), (2), (3)NOK 150m Additional Term Loan
    
    Sparebank 1 SR-Bank
    
    DeepOcean Shipping II
    
    DeepOcean AS
    
    (7) (8), (9)$18m Revolving Credit Facility
    
    Nordea Bank Norge PLC
    
    DeepOcean Shipping
    
    Trico Supply AS
    
    (1), (2), (3)£8m Overdraft Facility
    
    Barclays Bank PLC
    
    CTC Marine Projects Limited
    
    DeepOcean AS
(partial up to 100m
NOK)
    
    None£24.2m Asset Financing Revolving
Credit Facility
    
    Barclays Bank PLC
    
    CTC Marine Projects Limited
    
    DeepOcean AS
(partial up to 100m
NOK)
    
    NoneNOK 200m Overdraft Facility
    
    Sparebank 1 SR-Bank
    
    DeepOcean AS
    
    None
    
    (7) (8), (9)Finance Leases
    
    Sparebank 1 SR-Bank
    
    DeepOcean AS
    
    None
    
    No maintenance covenants
 
 (1)
    
    Consolidated Leverage Ratio: Net Debt to 12 month rolling EBITDA* less than or equal to
3.50:1 calculated at the Guarantor level(2)
    
    Consolidated Net Worth  minimum net worth of Borrower (if Trico Marine Services) or
Guarantor(3)
    
    Free Liquidity  minimum unrestricted cash and / or unutilized loan commitments at Borrower
or Guarantor(4)
    
    Collateral coverage  appraised value of collateral (vessels) must exceed 150% of amount
outstanding and amount available(5)
    
    Consolidated Leverage Ratio: Net Debt to 12 month rolling EBITDA less than or equal to 4.50
for the quarter ending June 30, 2009. In August 2009, we received an amendment changing the
ratio to 5.00 for the quarter ending September 30, 2009. The
consolidated leverage ratios for the remaining periods were not
amended and remain at 4.50 for the quarter ending
December 31, 2009 and 4.00 for any quarters thereafter. Calculated at the
Borrower level(6)
    
    Maintenance Capital Expenditures  limits the amount of maintenance capital expenditures in
any given fiscal year(7)
    
    Book Equity Ratio  Book Equity divided by Book Assets must exceed 35%. Calculated at the
Guarantor level(8)
    
    Leverage Ratio  Net Interest Bearing Debt divided by EBITDA** must be lower than 3:1.
Calculated at the Guarantor level(9)
    
    Working Capital Ratio  Current Assets must be greater than Current Liabilities (excluding
short-term maturities of debt)*
    
    EBITDA is defined under (1) and (5) as Consolidated Net Income before deducting there from
(i) interest expense, (ii) provisions for taxes based on income included in Consolidated Net
Income, (iii) amortization and depreciation without giving any effect to (x) any extraordinary
gains or extraordinary non-cash losses and (y) any gains or losses from sales of assets other
than the sale of inventory in the ordinary course or business. Prior to December 31, 2009,
pro-forma 42




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##### Table of Contents



adjustments shall be made for any vessels delivered during the period as if such
vessels were acquired or delivered on the first day of the relevant 12 month test period**
    
    EBITDA is defined, on a consolidated basis, as the Borrowers earnings before interest,
taxes, depreciation, amortization and any gain or loss from the sale of assets or other
extraordinary gains or losses   Minimum
    
    
    
    
    
    MinimumRequirement as
    
    
    
    
    
    Requirement to be metFinancial
    
    of June 30,
    
    June 30,
    
    on September 30,Facility
    
    Covenant
    
    2009
    
    2009 Results (1)
    
    2009$50 million U.S. Revolving Credit Facility
    
    Consolidated Leverage Ratio
    
    Net Debt to 12 month rolling EBITDA less than or equal to 4:50:1
    
    
    3.54
    
    
    Net Debt to 12 month rolling
EBITDA less than or equal to 5:00:1NOK 350m Revolving Credit Facility;
NOK 230m Revolving Credit Facility;
NOK 150m Additional Term Loan; NOK
200m Overdraft Facility
    
    Working Capital
Ratio
    
    Current assets
divided by current
liabilities must be
higher than 1.1
    
    
    1.11
    
    
    Current assets
divided by current
liabilities must be
higher than 1.1$200 million Revolving Credit
Facility and $100 million Revolving
Credit Facility
    
    Consolidated
Leverage Ratio
    
    Net Debt to 12
month rolling
EBITDA less than or
equal to 3.50:1
    
    
    3.18
    
    
    Net Debt to 12 month
rolling EBITDA less
than or equal to
3.50:1$200 million Revolving Credit
Facility
    
    Free Liquidity
    
    Unrestricted cash and cash
equivalents must exceed $10 million
    
    $19.5 million

    
    Unrestricted cash and cash
equivalents must exceed $10 million
 
 (1)
    
    We are in compliance with our debt covenants at June 30, 2009. Please see Item 1A Risk
Factors located in our 2008 Form 10-K, for more details about potential risks involving
these facilities. Also, please see Item 9B. Other Information in our 2008 Form 10-K.
Amounts in this section reflecting U.S. Dollar equivalents for foreign denominated debt
amounts are translated at currency rates in effect at June 30, 2009.   Cross Default Provisions.
 
    
    The 8.125% Debentures and the 3.0% Debentures contain provisions where the debt holders may
declare an event of default and require immediate repayment if repayment of certain other
indebtedness in a principal amount in excess of $30 million or its foreign currency
equivalent has been accelerated and not remedied within 30 days after notice thereof.
    
    The $50 million U.S. Credit Facility allows the lenders to declare an event of default and
require immediate repayment if Trico Marine Services, Inc. or any of its subsidiaries were to
be in default on more than $10 million in other indebtedness.
    
    The $100 Million Credit Agreement and the $200 Million Credit Agreement allow the lenders
to declare an event of default and require immediate repayment if Trico Supply AS or any of
its Subsidiaries were to be in default on more than $10 million in other indebtedness.
    
    Under the debt facilities where Deep Ocean AS or Deep Ocean Shipping II are the borrowers,
the lender may declare an event of default and require immediate repayment if other
indebtedness becomes due and payable prior to its specified maturity as a result of an event
of default.
 43




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##### Table of Contents




    
    The $18 million revolving credit facility allows the lender to declare an event of default
and require immediate repayment if the Borrower (Deep Ocean Shipping) or the Guarantor (Trico
Supply AS) is in default on more than $1,000,000 or $5,000,000, respectively, in other
indebtedness.
    
    The 23.3 million revolving credit facility allows the lender to declare an
event of default if the borrower defaults under any other agreement and in the reasonable
opinion of the lender, this default would have a material adverse effect on the financial
condition of the Borrower.
    
    The £8 million overdraft facility and the £24.2 million asset financing revolving credit
facility contain cross default provisions where it is an event of default if Borrower (CTC)
defaults on its own debt.
 Our Capital Requirements
   Contractual Obligations
  Payments Due by PeriodLess than
    
    
    2-3
    
    
    4-5
    
    
    More thanTotal
    
    
    1 year
    
    
    years
    
    
    years
    
    
    5 years(In thousands)Debt obligations (1) (2) (3)
    
    $
    752,155
    
    
    $
    187,533
    
    
    $
    106,593
    
    
    $
    284,398
    
    
    $
    173,631Interest on fixed rate debt (4)
    
    
    127,498
    
    
    
    21,341
    
    
    
    35,675
    
    
    
    14,044
    
    
    
    56,438Interest on variable rate debt (5)
    
    
    52,324
    
    
    
    14,557
    
    
    
    19,290
    
    
    
    11,943
    
    
    
    6,534Vessel construction obligations (6)
    
    
    133,194
    
    
    
    49,224
    
    
    
    83,970
    
    
    
    
    
    
    
    Time charter and equipment leases
    
    
    372,789
    
    
    
    136,794
    
    
    
    147,784
    
    
    
    59,226
    
    
    
    28,985Operating lease obligations
    
    
    10,879
    
    
    
    3,856
    
    
    
    3,612
    
    
    
    2,275
    
    
    
    1,136Taxes payable (7)
    
    
    35,307
    
    
    
    2,289
    
    
    
    8,254
    
    
    
    8,254
    
    
    
    16,510Pension obligations
    
    
    6,048
    
    
    
    530
    
    
    
    1,136
    
    
    
    1,174
    
    
    
    3,208Total
    
    $
    1,490,194
    
    
    $
    416,124
    
    
    $
    406,314
    
    
    $
    381,314
    
    
    $
    286,442
 
 (1)
    
    Excludes fresh-start debt premium of $0.3 million and unamortized discount on 3.0% Debentures
and 8.125% Debentures of $33.0 million and $14.6 million, respectively, at June 30, 2009.(2)
    
    Does not assume any early conversions or redemption of the 8.125% Debentures and 3%
Debentures as each is assumed to reach its originally stated maturity date. Holders of our 3%
Debentures have the right to require us to repurchase the debentures on each of January 15,
2014, January 15, 2017 and January 15, 2022. Please see Note 2 in our condensed consolidated
financial statements for Risks and Uncertainties. Also, see discussion of our exchange
transaction of our
6.5% Debentures in Managements Discussion and Analysis of Financial Condition and Results of
Operation.(3)
    
    The maturities of certain debt agreements with SR Bank have been amended with approximately
$101.7 million due on January 1, 2010. Managements intent is to pay the outstanding balances
by January 1, 2010. 44




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##### Table of Contents



(4)
    
    Primarily includes the semi-annual interest payments on the 8.125% Debentures and the 3%
Debentures to their maturities of 2013 and 2027, respectively and interest payments on the
6.11% Notes maturing 2014.(5)
    
    For the purpose of this calculation amounts assume interest rates on floating rate
obligations remain unchanged from levels at June 30, 2009, throughout the life of the
obligation.(6)
    
    Reflects committed expenditures, of which approximately $45.3 million will be covered through
increases of the available capacity under our existing credit facilities when the vessels are
delivered ($27.2 million and $18.1 million of this amount relates to expenditures in the
annual periods ending June 30, 2010 and 2012, respectively), and does not reflect the future
capital expenditures budgeted for periods presented which are discretionary. In the second
quarter of 2009, we withdrew from our partnership related to the construction of the Deep
Cygnus vessel and we are no longer obligated to fulfill our financial commitment. The change
reduced our vessel construction obligations due in less than one year by $41.6 million, of
which $36.4 million was covered through increases of available capacity under our credit
facilities.(7)
    
    Norwegian tax laws allow for a portion of the accumulated untaxed shipping profits, $35.3
million, prior to June 30, 2009 to be paid in equal installments over the next 9 years. An
additional liability of $18.6 million could be satisfied through making qualifying
environmental expenditures. As a result of changes in Norwegian tax laws during the first
quarter of 2009, there is no time constraint on making any qualified environmental
expenditures in satisfaction of the $18.6 million liability. As a result, the company
recognized a one-time tax benefit in first quarter earnings of $18.6 million related to the
change. We also have liabilities for uncertain tax positions of $2.3 million at June 30, 2009
which has not been included in the table above due to the uncertain timing of settlement. Cash Flows
  Six Months Ended June 30,2009
    
    2008As adjustedCash flow provided by operations
    
    $
    28,675
    
    
    $
    44,732Cash flow used in investing
    
    
    (18,609
    )
    
    
    (473,158
    )Cash flow (used in) provided by financing
    
    
    (74,373
    )
    
    
    457,266Effects of foreign exchange rate changes
on cash
    
    
    4,763
    
    
    
    6,437
    45




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##### Table of Contents



Critical Accounting Policies
  Recent Accounting Standards
  
 Item 3.
    
    Quantitative and Qualitative Market Risk Disclosures
  
 Item 4.
    
    Controls and Procedures
   
 PART
II  OTHER INFORMATION
 
 Item 1.
    
    Legal Proceedings
  Kistefos Lawsuit 
 46




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##### Table of Contents



Item 1A.
    
    Risk Factors
   We have a substantial amount of indebtedness which may adversely affect our cash flow and our
ability to operate our business, to comply with debt covenants and to make payments on our
indebtedness.
   
    
    we may have difficulty satisfying our obligations under our senior credit facilities
or other indebtedness and, if we fail to comply with these requirements, an event of
default could result;
    
    we may be required to dedicate a substantial portion of our cash flow from operations
to required payments on indebtedness, thereby reducing the availability of cash for
working capital, capital expenditures and other general corporate activities;
    
    covenants relating to our indebtedness may limit our ability to obtain additional
financing for working capital, capital expenditures and other general corporate
activities;
    
    covenants relating to our indebtedness may limit our flexibility in planning for, or
reacting to, changes in our business and the industry in which we operate;
    
    we may be more vulnerable to the impact of economic downturns and adverse
developments in our business; and
    
    we may be placed at a competitive disadvantage against any less leveraged competitors.
   47




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##### Table of Contents



Provisions of our debentures could discourage an acquisition of us by a third party.
  A substantial number of shares of our common stock will be eligible for future sale upon
conversion of the 8.125% Debentures and exercise of the exchanged warrants and the phantom stock
units, and the sale of those shares could adversely affect our stock price.
  Our stockholders will experience substantial dilution if the 8.125% Debentures are converted
and the warrants and the phantom stock units are exercised for shares of our common stock.
  48




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##### Table of Contents



Item 2.
    
    Unregistered Sales of Equity Securities and Use of Proceeds
    
 Item 3.
    
    Defaults Upon Senior Securities
  
 Item 4.
    
    Submission of Matters to a Vote of Security Holders
  (a)
    
    At the Annual Meeting, Joseph S. Compofelice and Ben A. Guill were re-elected to
serve until the annual meeting of stockholders for the year 2012. In addition to the
directors elected at the Annual Meeting, the terms of Edward C. Hutcheson, Jr., Myles W.
Scoggins, Per Staehr, Richard A. Bachmann and Kenneth M. Burke continued after the Annual
Meeting.
 (b)
    
    At the Annual Meeting, holders of shares of the Companys common stock re-elected
Messrs. Compofelice and Guill with the number of votes cast for and withheld for such
nominees as set forth below (1):
 Name
    
    For
    
    Against
    
    AbstainJoseph S. Compofelice
    
    
    7,375,231
    
    
    
    302,295
    
    
    
    5,205,884Ben A. Guill
    
    
    12,299,529
    
    
    
    530,461
    
    
    
    53,420
 (c)
    
    At the Annual Meeting, holders of shares of the Companys common stock also ratified
the appointment of PricewaterhouseCoopers LLP, independent registered public accounting
firm, as the Companys independent auditors for the fiscal year ending December 31, 2009,
with the number of votes cast as set forth below (1): For
    
    Against
    
    Abstain12,377,682
    
    28,454
    
    477,273
 (d)
    
    At the Annual Meeting, the holders of shares of the Companys common stock failed to
approve a proposal to increase the number of directors to nine, with the number of votes
cast as set forth below (2): For
    
    Against
    
    Abstain10,124,405
    
    2,754,099
    
    4,906
 (e)
    
    At the Annual Meeting, the holders of shares of the Companys common stock failed to
approve a proposal to reduce the threshold to request a special meeting of stockholders,
with the number of votes cast as set forth below (2): 49




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##### Table of Contents



For
    
    Against
    
    Abstain6,741,857
    
    6,116,111
    
    25,442
 (f)
    
    At the Annual Meeting, the holders of shares of the Companys common stock failed to
approve a proposal to repeal all board approved bylaw amendments adopted after December
15, 2008, with the number of votes cast as set forth below (2): For
    
    Against
    
    Abstain9,782,023
    
    3,065,270
    
    36,117
 (g)
    
    At the Annual Meeting, the holders of shares of the Companys common stock voted in
favor of a proposal to recommend declassifying the Board of Directors, with the number of
votes cast as set forth below (1): For
    
    Against
    
    Abstain10,440,898
    
    699,376
    
    1,743,135
 (h)
    
    At the Annual Meeting, holders of shares of the Companys common stock failed to
approve a stockholder proposal to amend the bylaws to make ineligible for service as a
director any person who fails to receive the number of votes required to elect directors
at any meeting of stockholders at which such person is to be elected, and to create a
vacancy with respect to the directorship held by any existing director of the Company who
fails to receive the number of votes required to re-elect such existing director at any
meeting of stockholders at which such director is nominated to be re-elected, and deem
vacant such directors seat on the board, with the number of votes cast as set forth below
(2): For
    
    Against
    
    Abstain8,344,805
    
    4,481,279
    
    57,326
  
 (1)
    
    The vote required to approve this proposal under the Companys governing instruments was a
majority of the common shares present and voting at the meeting.(2)
    
    The vote required to approve this proposal under the Companys governing instruments was
two-thirds of the outstanding common shares.  
 Item 5.
    
    Other Information
  50




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##### Table of Contents



Item 6.
    
    EXHIBITS
  ExhibitNumber2.1
    
    Joint Prepackaged Plan of Reorganization of the Company, Trico
Marine Assets, Inc. and Trico Marine Operators, Inc. under
Chapter 11 of the United States Bankruptcy Code (incorporated
by reference to Exhibit 99.2 to our Current Report on Form 8-K
dated November 12, 2004).2.2
    
    Plan Support Agreement, as amended, dated September 8, 2004
(incorporated by reference to Exhibit 99.3 to our Current
Report on Form 8-K dated November 15, 2004).3.1
    
    Second Amended and Restated Certificate of Incorporation of
the Company (incorporated by reference to Exhibit 3.1 to our
Current Report on Form 8-K filed March 16, 2005).3.2
    
    Amendment No. 1 to the Second Amended and Restated Certificate
of Incorporation of the Company (incorporated by reference to
Annex A to our Schedule 14A filed July 2, 2008).3.3
    
    Certificate of Designation of Series A Junior Participating
Preferred Stock of Trico Marine Services, Inc. (incorporated
by reference to Exhibit 3.1 to our Current Report on Form 8-K
filed April 10, 2007).3.4
    
    Certificate of Elimination of Series A Junior Participating
Preferred Stock of Trico Marine Services, Inc. (incorporated
by reference to Exhibit 3.1 to our Current Report on Form 8-K
filed April 29, 2008).3.5
    
    Eighth Amended and Restated Bylaws of the Company
(incorporated by reference to Exhibit 3.1 to our Current
Report on Form 8-K dated December 9, 2008).4.1
    
    Specimen Common Stock Certificate (incorporated by reference
to Exhibit 4.1 to our Annual Report on Form 10-K filed March
16, 2005).4.2
    
    Registration Rights Agreement, dated as of March 16, 2005, by
and among Trico Marine Services, Inc. and the Holders named
therein (incorporated by reference to Exhibit 4.1 to our
Current Report on Form 8-K filed March 16, 2005).4.3
    
    Warrant Agreement, dated March 16, 2005 (incorporated by
reference to Exhibit 4.2 to the Companys Current Report on
Form 8-K filed March 16, 2005).4.4
    
    Form of Series A Warrant (incorporated by reference to Exhibit
4.3 to the Companys Current Report on Form 8-K/A filed March
21, 2005).4.5
    
    Indenture of Trico Marine Services, Inc. and Wells Fargo Bank,
National Association, as Trustee, dated February 7, 2007
(incorporated by reference to Exhibit 10.18 to our Annual
Report on Form 10-K filed March 2, 2007).4.6
    
    Registration Rights Agreement by and among Trico Marine
Services, Inc. and the Initial Purchasers, dated February 7,
2007 (incorporated by reference to Exhibit 10.19 to our Annual
Report on Form 10-K filed March 1, 2007).4.7
    
    Share Purchase Agreement, dated May 15, 2008, by and among
Trico Marine Services, Inc., Trico Shipping AS, and West
Supply IV AS (incorporated by reference to Exhibit 2.1 to our
Current Report on Form 8-K filed May 16, 2008).4.8
    
    Phantom Stock Units Agreement, dated May 22, 2008, between
Trico Marine Services, Inc. and West Supply IV AS
(incorporated by reference to Exhibit 10.3 to our Current
Report on Form 8-K filed June 16, 2008).4.9
    
    Registration Rights Agreement, dated May 22, 2008, between
Trico Marine Services, Inc. and West Supply IV AS
(incorporated by reference to Exhibit 10.4 to our Current
Report on Form 8-K filed June 16, 2008).4.10
    
    Form of Management Share Purchase Agreement, dated May 15,
2008, by and among Trico Marine Services, Inc., Trico Shipping
AS, and certain members of management
 51




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##### Table of Contents



ExhibitNumberof DeepOcean
(incorporated by reference to Exhibit 2.2 to our Current
Report on Form 8-K filed May 16, 2008).4.11
    
    Form of Phantom Stock Units Agreement, dated May 15, 2008, by
and between Trico Marine Services, Inc. and certain members of
management (and their controlled entities) of DeepOcean
(incorporated by reference to Exhibit 10.2 to our Current
Report on Form 8-K filed May 16, 2008).4.12
    
    Share Purchase Agreement, entered into on June 13, 2008, by
and between DOF ASA, as Seller, and Trico Shipping AS, as
Purchaser (incorporated by reference to Exhibit 2.1 to our
Current Report on Form 8-K filed June 13, 2008).4.13
    
    Stock Appreciation Rights Agreement by and between Trico
Marine Services, Inc. and the Participants, dated as of March
13, 2009 (incorporated by reference to Exhibit 10.3 to our
Current Report on Form 8-K dated March 17, 2009).4.14
    
    Form of Warrant (incorporated by reference to Exhibit 10.3 to
our Current Report on Form 8-K filed May 12, 2009).4.15
    
    Indenture, dated as of May 14, 2009, between Trico Marine
Services, Inc. and Wells Fargo Bank, National Association
(incorporated by reference to Exhibit 10.2 to our Current
Report on Form 8-K filed May 19, 2009).10.1
    
    Credit Agreement dated April 24, 2008, by and among Trico
Supply AS, Trico Subsea Holding AS, Trico Subsea AS, Nordea
Bank Finland PLC, New York Branch, as Administrative Agent,
Book Runner and Joint Lead Arranger, Nordea Bank Norge ASA,
Grand Cayman Branch and various lenders party thereto from
time to time (incorporated by reference to Exhibit 10.1 to our
Current Report on Form 8-K dated April 24, 2008).10.2
    
    First Amendment to Credit Agreement, dated as of June 24,
2008, to the Credit Agreement dated as of April 24, 2008
(incorporated by reference to Exhibit 10.4 to our Quarterly
Report on Form 10-Q dated November 7, 2008).10.3
    
    Second Amendment to Credit Agreement, dated November 3, 2008,
to the Credit Agreement dated as of April 24, 2008
(incorporated by reference to Exhibit 10.5 to our Quarterly
Report on Form 10-Q dated November 7, 2008).10.4
    
    Third Amendment to Credit Agreement, dated as of December 12,
2008, to the Credit Agreement, dated as of April 24, 2008
(incorporated by reference to Exhibit 10.2 to our Current
Report on Form 8-K dated December 12, 2008).10.5
    
    Fourth Amendment to Credit Agreement, dated as of March 10,
2009, to the Credit Agreement, dated as of April 24, 2008
(incorporated by reference to Exhibit 10.5 to our Annual
Report on Form 10-K dated March 12, 2009).10.6
    
    Credit Agreement, dated as of May 14, 2008, among Trico Supply
AS, Trico Subsea Holding AS, Trico Subsea AS, Trico Shipping
AS, the lenders party thereto from time to time, and Nordea
Bank Finland PLC, New York Branch, as Administrative Agent and
as Collateral Agent (incorporated by reference to Exhibit 10.4
to our Current Report on Form 8-K dated May 14, 2008).10.7
    
    First Amendment to Credit Agreement, dated November 3, 2008,
to the Credit Agreement dated as of May 14, 2008 (incorporated
by reference to Exhibit 10.7 to our Quarterly Report on Form
10-Q dated November 7, 2008).10.8
    
    Second Amendment to Credit Agreement, dated as of December 12,
2008, to the Credit Agreement dated as of May 14, 2008
(incorporated by reference to Exhibit 10.1 to our Current
Report on Form 8-K dated December 12, 2008).10.9
    
    Third Amendment to Credit Agreement, dated as of March 10,
2009, to the Credit Agreement, dated as of May 14, 2008
(incorporated by reference to Exhibit 10.9 to our Annual
Report on Form 10-K dated March 12, 2009).10.10
    
    Amended and Restated Credit Agreement, dated as of August 29,
2008, among Trico Marine Services Inc., Trico Marine Assets
Inc., and Trico Marine Operators, Inc., the Lenders party
thereto from time to time, and Nordea Bank Finland PLC, New
York Branch, as Administrative Agent and Lead Arranger for the
Lenders (incorporated by
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ExhibitNumberreference to Exhibit 10.8 to our
Quarterly Report on Form 10-Q dated November 7, 2008).10.11
    
    First Amendment to Credit Agreement, dated as of March 10,
2009, to the Amended and Restated Credit Agreement, dated as
of August 29, 2008 (incorporated by reference to Exhibit 10.11
to our Annual Report on Form 10-K dated March 12, 2009).10.12
    
    NOK 1,005,000 Facility Agreement, dated June 5, 2007, by and
between DeepOcean ASA, as borrower and Sparebank 1 SR Bank, as
Lender and Agent (incorporated by reference to Exhibit 10.7 to
our Quarterly Report on Form 10-Q dated August 8, 2008).10.13
    
    NOK 350,000,000 Loan Agreement, dated December 21, 2007, by
and between DeepOcean Shipping AS and Sparebank 1 SR Bank, as
Lender and Agent (incorporated by reference to Exhibit 10.8 to
our Quarterly Report on Form 10-Q dated August 8, 2008).10.14
    
    Credit Facility Agreement, dated November 19, 2007, by and
among DeepOcean Shipping AS, Deep Ocean ASA, Nordea Bank Norge
ASA as Agent and Arranger, and the Financial Institutions
listed therein as Banks (incorporated by reference to Exhibit
10.16 to our Annual Report on Form 10-K dated March 12, 2009).10.15
    
    First Amendment to Credit Facility Agreement, dated December
30, 2008, to the Credit Facility Agreement, dated November 19,
2007 (incorporated by reference to Exhibit 10.17 to our Annual
Report on Form 10-K dated March 12, 2009).10.16
    
    Second Amendment to Credit Facility Agreement, dated March 6,
2009, to the Credit Facility Agreement, dated November 19,
2007 (incorporated by reference to Exhibit 10.18 to our Annual
Report on Form 10-K dated March 12, 2009).10.17
    
    Form of Exchange Agreements, dated May 11, 2009, by and among
Trico Marine Services, Inc. and the Investors (incorporated by
reference to Exhibit 10.1 to our Current Report on Form 8-K/A
filed May 19, 2009).10.18
    
    Pledge Agreement, dated as of May 14, 2009, by Trico Marine
Operators, Inc. to Wells Fargo Bank, National Association
(incorporated by reference to Exhibit 10.4 to our Current
Report on Form 8-K filed May 19, 2009).10.19
    
    Guaranty, dated as of May 14, 2009, by Trico Marine Assets,
Inc., Trico Marine Operators, Inc. in favor of Wells Fargo
Bank, National Association (incorporated by reference to
Exhibit 10.5 to our Current Report on Form 8-K filed May 19,
2009).10.20
    
    Intercreditor Agreement, dated as of May 14, 2009, by and
among Trico Marine Services, Inc., Trico Marine Assets, Inc.,
Trico Marine Operators, Inc., Nordea Bank Finland plc, and
Wells Fargo Bank, National Association (incorporated by
reference to Exhibit 10.6 to our Current Report on Form 8-K
filed May 19, 2009).10.21
    
    Second Amendment to Credit Agreement, dated as of May 8, 2009,
by and among Trico Marine Services, Inc., Trico Marine Assets,
Inc., Trico Marine Operators, Inc., and Nordea Bank Finland
plc, New York Branch (incorporated by reference to Exhibit
10.7 to our Current Report on Form 8-K filed May 12, 2009).10.22
    
    Third Amendment to Credit Agreement, dated as of May 14, 2009,
by and among Trico Marine Services, Inc., Trico Marine Assets,
Inc., Trico Marine Operators, Inc., and Nordea Bank Finland
plc, New York Branch (incorporated by reference to Exhibit
10.7 to our Current Report on Form 8-K filed May 19, 2009).10.23*
    
    Trico 2009 Incentive Bonus Plan (incorporated by reference to
Exhibit 10.1 to our Current Report on Form 8-K filed May 5,
2009).10.24
    
    Addendum No. 1 to Loan Agreement, dated June 23, 2009, by and
between Deep Ocean Shipping II AS and The Banks and Financial
Institutions Participating as Lenders in the Loan Agreement,
as Lenders, and Sparebank 1 SR-Bank as Agent. (1)10.25
    
    Addendum No. 2 to Facility Agreement, dated June 23, 2009, by
and between Deep Ocean AS and The Banks and Financial
Institutions Participating as Lenders in the Facility
Agreement, as Lenders, and Sparebank 1 SR-Bank, as Agent. (1)10.26
    
    Fifth Amendment to Credit Agreement, dated as of August 4, 2009, by
and among Trico Marine Services, Inc., Trico Marine Assets, Inc., Trico
Marine Operators, Inc., and Nordea Bank Finland plc, New York Branch. (1)31.1
    
    Chief Executive Officers Certification under Section 302 of
the Sarbanes-Oxley Act of 2002. (1)
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ExhibitNumber31.2
    
    Chief Financial Officers Certification under Section 302 of
the Sarbanes-Oxley Act of 2002. (1)32.1
    
    Officers certifications pursuant to Section 906 of the
Sarbanes-Oxley Act of 2002. (1)
 
 *
    
    Management Contract or Compensation Plan or Agreement(1)
    
    Filed herewith. 54




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TRICO MARINE SERVICES, INC.(Registrant)By: /s/ Geoff Jones

Geoff JonesChief Financial Officer(Authorized Signatory andPrincipal Financial Officer)Date: August 7, 2009
 55