##### 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 March 31, 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
    
    72-1252405(State or other jurisdiction of
    
    (I.R.S. Employerincorporation or organization)
    
    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
    
    Smaller Reporting Company o(Do not Check if a Smaller Reporting Company)
 o þ
 þ o




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##### 



TRICO MARINE SERVICES, INC.
REPORT FORM 10-Q
FOR THE QUARTER ENDED MARCH 31, 2009
 TABLE OF CONTENTS
 PagePart I.Financial InformationItem 1. Financial Statements (Unaudited)Condensed Consolidated Balance Sheets  March 31, 2009 and December 31, 2008
    
    
    1Condensed Consolidated Statements of Income  Three Months Ended March 31, 2009 and 2008
    
    
    2Condensed Consolidated Statements of Cash Flows  Three Months Ended March 31, 2009 and 2008
    
    
    3Notes to the Condensed Consolidated Financial Statements
    
    
    4Item 2. Managements Discussion and Analysis of Financial Condition and Results of Operations
    
    
    24Item 3. Quantitative and Qualitative Disclosures About Market Risk
    
    
    40Item 4. Controls and Procedures
    
    
    41Part II.Other Information
    
    
    41Item 1. Legal Proceedings
    
    
    41Item 1A. Risk Factors
    
    
    41Item 2. Unregistered Sales of Equity Securities and Use of Proceeds
    
    
    43Item 3. Defaults upon Senior Securities
    
    
    43Item 4. Submission of Matters to a Vote of Security Holders
    
    
    43Item 5. Other Information
    
    
    43Item 6. Exhibits
    
    
    43Signature
    
    
    46EX-10.1EX-31.1EX-31.2EX-32.1




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PART I  FINANCIAL INFORMATION
 
 Item 1. Financial Statements
 TRICO MARINE SERVICES, INC. AND SUBSIDIARIES
 
 CONDENSED CONSOLIDATED BALANCE SHEETS
 (Unaudited)
(In thousands, except share amounts)
 March 31,
    
    
    December 31,2009
    
    
    2008As adjusted, seeNotes 4 and 12ASSETSCurrent assets:Cash and cash equivalents
    
    $
    60,504
    
    
    $
    94,613Restricted cash
    
    
    3,035
    
    
    
    3,566Accounts receivable, net
    
    
    127,320
    
    
    
    165,152Prepaid expenses and other current assets
    
    
    11,200
    
    
    
    3,375Total current assets
    
    
    202,059
    
    
    
    266,706Property and equipment:Marine vessels
    
    
    513,750
    
    
    
    502,417Subsea equipment
    
    
    156,431
    
    
    
    153,003Construction-in-progress
    
    
    282,608
    
    
    
    260,069Transportation and other
    
    
    5,098
    
    
    
    4,902957,887
    
    
    
    920,391Less accumulated depreciation and amortization
    
    
    (133,408
    )
    
    
    (115,981
    )Net property and equipment, net
    
    
    824,479
    
    
    
    804,410Intangible assets
    
    
    107,659
    
    
    
    106,983Other assets
    
    
    23,853
    
    
    
    24,637Total assets
    
    $
    1,158,050
    
    
    $
    1,202,736LIABILITIES AND STOCKHOLDERS EQUITYCurrent liabilities:Short-term and current maturities of long-term debt
    
    $
    210,942
    
    
    $
    82,982Accounts payable
    
    
    22,830
    
    
    
    53,872Accrued expenses
    
    
    84,358
    
    
    
    85,656Accrued interest
    
    
    12,532
    
    
    
    10,383Foreign taxes payable
    
    
    2,189
    
    
    
    4,000Income taxes payable
    
    
    14,295
    
    
    
    18,133Total current liabilities
    
    
    347,146
    
    
    
    255,026Long-term debt
    
    
    552,297
    
    
    
    687,098Long-term derivative
    
    
    180
    
    
    
    1,119Foreign taxes payable
    
    
    31,415
    
    
    
    47,508Deferred income taxes
    
    
    3,983
    
    
    
    5,104Other liabilities
    
    
    6,821
    
    
    
    6,001Total liabilities
    
    
    941,842
    
    
    
    1,001,856Commitments and contingencies (See Note 13)
    
    
    
    
    
    
    Stockholders equity:Common stock, $.01 par value, 50,000,000 shares
authorized and 16,767,772 and
16,199,980 shares issued at March 31, 2009
and December 31, 2008, respectively
    
    
    166
    
    
    
    160Warrants
    
    
    1,640
    
    
    
    1,640Additional paid-in capital
    
    
    322,662
    
    
    
    316,694Retained earnings
    
    
    24,450
    
    
    
    25,197Accumulated other comprehensive loss, net of tax
    
    
    (189,494
    )
    
    
    (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
    
    
    197,408
    
    
    
    178,994Noncontrolling interest
    
    
    18,800
    
    
    
    21,886Total equity
    
    
    216,208
    
    
    
    200,880Total liabilities and stockholders equity
    
    $
    1,158,050
    
    
    $
    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 March 31,2009
    
    
    2008As adjusted, seeNotes 4 and 12Revenues
    
    $
    121,819
    
    
    $
    59,175Operating expenses:Direct operating expenses
    
    
    98,488
    
    
    
    32,994General and administrative
    
    
    21,439
    
    
    
    10,767Depreciation and amortization
    
    
    18,072
    
    
    
    6,747Gain on sales of assets
    
    
    (9
    )
    
    
    (2,837
    )Total operating expenses
    
    
    137,990
    
    
    
    47,671Operating income (loss)
    
    
    (16,171
    )
    
    
    11,504Interest expense, net of amounts capitalized
    
    
    (10,914
    )
    
    
    (1,152
    )Interest income
    
    
    1,072
    
    
    
    1,578Unrealized gain on mark-to-market of embedded derivative
    
    
    939
    
    
    
    Gain on conversion of debt
    
    
    10,779
    
    
    
    Other expense, net
    
    
    (730
    )
    
    
    1,167Income (loss) before income taxes
    
    
    (15,025
    )
    
    
    13,097Income tax (benefit) expense
    
    
    (15,028
    )
    
    
    1,950Net income
    
    
    3
    
    
    
    11,147Less: Net (income) attributable to the noncontrolling interest
    
    
    (750
    )
    
    
    (841
    )Net income (loss) attributable to Trico Marine Services, Inc.
    
    $
    (747
    )
    
    $
    10,306Earnings (loss) per common share:Basic
    
    $
    (0.04
    )
    
    $
    0.72Diluted
    
    $
    (0.04
    )
    
    $
    0.69Weighted average shares outstanding:Basic
    
    
    16,711
    
    
    
    14,411Diluted
    
    
    16,711
    
    
    
    14,919
 The accompanying notes are an integral part of these condensed consolidated financial statements.
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TRICO MARINE SERVICES, INC. AND SUBSIDIARIES
 
 CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS
 (Unaudited)
 (In thousands)
 Three Months Ended March 31,2009
    
    
    2008As adjusted, seeNotes 4 and 12Cash flows from operating activities:Net income
    
    $
    3
    
    
    $
    11,147Adjustments to reconcile net income (loss) to net cash provided by
operating activities:Depreciation and amortization
    
    
    18,072
    
    
    
    6,747Amortization of non-cash deferred revenues
    
    
    (140
    )
    
    
    (89
    )Amortization of deferred financing costs
    
    
    580
    
    
    
    Noncash benefit related to change in Norwegian tax law
    
    
    (18,568
    )
    
    
    Accretion of debt discount
    
    
    3,404
    
    
    
    1,293Deferred income taxes
    
    
    2,470
    
    
    
    1,769Change in fair value of embedded derivative
    
    
    (939
    )
    
    
    Gain on conversion of 6.5% Debentures
    
    
    (10,779
    )
    
    
    Cash paid for make-whole premium related to conversion of
6.5% Debentures
    
    
    (6,574
    )
    
    
    Gain (loss) on sales of assets
    
    
    (9
    )
    
    
    (2,837
    )Provision on doubtful accounts
    
    
    493
    
    
    
    Stock based compensation
    
    
    724
    
    
    
    844Change in operating assets and liabilities
    
    
    (4,155
    )
    
    
    (12,955
    )Net cash provided by (used in) operating activities
    
    
    (15,418
    )
    
    
    5,919Cash flows from investing activities:Purchases of property and equipment
    
    
    (19,557
    )
    
    
    (32,203
    )Proceeds from sales of assets
    
    
    155
    
    
    
    5,123Decrease in restricted cash
    
    
    659
    
    
    
    3,661Net cash used in investing activities
    
    
    (18,743
    )
    
    
    (23,419
    )Cash flows from financing activities:Net proceeds from exercises of warrants and options
    
    
    
    
    
    
    11,901Proceeds from issuance of debt
    
    
    
    
    
    
    12,000Proceeds and repayments of revolving credit facilities, net
    
    
    2,529
    
    
    
    Contribution from noncontrolling interest
    
    
    2,284
    
    
    
    Dividend to noncontrolling partner
    
    
    (6,120
    )
    
    
    Debt issuance costs
    
    
    
    
    
    
    (273
    )Net cash provided by (used in) financing activities
    
    
    (1,307
    )
    
    
    23,628Effect of exchange rate changes on cash and cash equivalents
    
    
    1,359
    
    
    
    5,562Net increase (decrease) in cash and cash equivalents
    
    
    (34,109
    )
    
    
    11,690Cash and cash equivalents at beginning of period
    
    
    94,613
    
    
    
    131,463Cash and cash equivalents at end of period
    
    $
    60,504
    
    
    $
    143,153
 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
   4




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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
 5




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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 6.5% 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.
   3. Acquisition
   6




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CustomerRelationshipsBalance at December 31, 2007
    
    $
    Intangible assets acquired in connection with DeepOcean
acquisition
    
    
    118,057Amortization
    
    
    (5,040
    )Foreign currency translation adjustment
    
    
    (32,459
    )Balance at December 31, 2008
    
    $
    80,558Amortization
    
    
    (1,641
    )Foreign currency translation adjustment
    
    
    1,601Balance at March 31, 2009
    
    $
    80,518
     Pro forma Information
  Three Months EndedMarch 31, 2008Historical
    
    Pro FormaAs adjusted, seeNotes 4 and 12Revenues
    
    $
    59,175
    
    
    $
    144,834Operating income a
    
    
    11,504
    
    
    
    11,837Income before income taxes b
    
    
    13,097
    
    
    
    1,562Net income (loss) attributable to Trico Marine Services, Inc.
    
    $
    10,306
    
    
    $
    (425
    )Diluted net income (loss) per share of common stock
    
    $
    0.69
    
    
    $
    (0.03
    )Diluted weighted average shares outstanding
    
    
    14,919
    
    
    
    14,411
 
 a.
    
    Pro forma amounts for the three months ended March 31, 2008 include the effect of
non-recurring transactions that occurred 7




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at DeepOcean prior to its acquisition by the Company.
These charges include a $3.6 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.b.
    
    Pro forma amounts include acquisition-related debt costs ($16.3 million), including the
amortization of debt discount on the 6.5% Debentures (Note 4). The Company determined that
approximately 50% of its acquisition related interest expense would be capitalized in the 2008
pro forma periods. 4. Debt
  March 31,
    
    
    December 31,2009
    
    
    2008As adjustedNOK 350 million Revolving Credit Facility(1), maturing January 1, 2010
    
    $
    61,534
    
    
    $
    61,531NOK 230 million Revolving Credit Facility(1), maturing January 1, 2010
    
    
    22,045
    
    
    
    21,233NOK 150 million Additional Term Loan(1), maturing January 1, 2010
    
    
    10,115
    
    
    
    10,398NOK 200 million Overdraft Facility(1), maturing January 1, 2010
    
    
    23,826
    
    
    
    3,20723.3 million Euro Revolving Credit Facility(1), maturing March 31, 2010
    
    
    18,720
    
    
    
    19,717NOK 260 million Short Term Credit Facility interest at 9.9%, maturing on
February 1, 2009
    
    
    
    
    
    
    11,631$254.7 million and $278.0 million face amount, 6.5% Senior Convertible
Debentures(2),
net of unamortized discount of $39.4 million and $45.0 million as of March 31, 2009
and December 31, 2008, respectively, interest payable semi-annually in arrears,
maturing on May 15, 2028
    
    
    215,336
    
    
    
    232,998$150.0 million face amount, 3.0% Senior Convertible Debentures(2), net of
unamortized
discount of $34.4 million and $35.9 million as of March 31, 2009 and December 31,
2008,
respectively, interest payable semi-annually in arrears, maturing on January 15,
2027
    
    
    115,562
    
    
    
    114,150$200 million Revolving Credit Facility(1),maturing in May 2013
    
    
    166,657
    
    
    
    160,563$100 million Revolving Credit Facility(1), maturing no later than December 2017
    
    
    25,055
    
    
    
    15,000$50 million U.S. Revolving Credit Facility Agreement(1), maturing in January 2011
    
    
    31,509
    
    
    
    46,4606.11% Notes, principal and interest due in 30 semi-annual installments, maturing April 2014
    
    
    6,915
    
    
    
    6,915$18 million Revolving Credit Facility(1), maturing December 5, 2011
    
    
    15,500
    
    
    
    16,0008 million Sterling Overdraft Facility, maturity 364 days after drawdown
    
    
    12,112
    
    
    
    9,81224.2 million Sterling Asset Financing Revolving Credit Facility(1), maturing
no later than January 31, 2015
    
    
    16,019
    
    
    
    17,286Finance lease obligations assumed in the acquisition of DeepOcean, maturing from
October 2009 to November 2015
    
    
    14,064
    
    
    
    14,172Other debt assumed in the acquisition of DeepOcean, maturing from July 2009
to August 2014
    
    
    7,973
    
    
    
    8,695Fresh-start debt premium
    
    
    297
    
    
    
    312Total debt
    
    
    763,239
    
    
    
    770,080Less current maturities
    
    
    (210,942
    )
    
    
    (82,982
    )Long-term debt
    
    $
    552,297
    
    
    $
    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 1.75%
to 3.25%. The three month LIBOR rate was 1.3% and 1.8% and the three month NIBOR rate was
2.97% and 3.97% for the periods ending March 31, 2009 and December 31, 2008, respectively.(2)
    
    Holders of the Companys debentures have the right to require it to repurchase the 6.5%
Debentures on each of May 15, 2013, May 15, 2015, May 15, 2018 and May 15, 2023 and the 3%
Debentures on each of January 15, 2014, January 15, 2017 and January 15, 2022. 8




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Quarter ending March 31,
    
    AmountDue in one year
    
    $
    210,942
    aDue in two years
    
    
    65,016Due in three years
    
    
    43,280Due in four years
    
    
    30,822Due in five years
    
    
    50,806Due in over five years
    
    
    435,893
    b836,759Fresh-start debt premium
    
    
    297Unamortized discount on 6.5% and 3.0% Debentures
    
    
    (73,817
    )Total debt
    
    $
    763,239
 
 a.
    
    Potential make-whole payments under the Companys 6.5% Debentures are not included.b.
    
    Includes the $254.7 million of 6.5% Debentures and the $150.0 million of 3% Debentures that
may be converted earlier but have stated maturity terms in excess of five years. 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.
 9




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23.3 million Euro Revolving Credit Facility.
 NOK 260 million Short Term Credit Facility.
  6.5% Convertible Debentures.
  10




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3% Senior Convertible Debentures.
     11




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Three Months EndedMarch 31, 2009Net incremental non-cash interest expense
    
    $
    1,359Less: tax effect
    
    
    (489
    )Net incremental non-cash interest expense, net of tax
    
    $
    870Net decrease to earnings per common share:Basic
    
    $
    0.05Diluted
    
    $
    0.05
   Three Months Ended March 31, 2008
    
    Twelve Months Ended December 31, 2008As Reported
    
    APB 14-1
    
    Adjusted
    
    As Reported
    
    APB 14-1
    
    Adjusted3/31/2008
    
    Adjustment
    
    3/31/08
    
    12/31/2008
    
    Adjustment
    
    12/31/08Interest expense, net of amounts capitalized
    
    $
    (223
    )
    
    $
    (929
    )
    
    $
    (1,152
    )
    
    $
    (31,943
    )
    
    $
    (3,893
    )
    
    $
    (35,836
    )Income tax expense
    
    
    2,284
    
    
    
    (334
    )
    
    
    1,950
    
    
    
    14,823
    
    
    
    (1,401
    )
    
    
    13,422Net income (loss) attributable to Trico
Marine Services, Inc.
    
    
    10,901
    
    
    
    (595
    )
    
    
    10,306
    
    
    
    (111,163
    )
    
    
    (2,492
    )
    
    
    (113,655
    )Earnings (loss) per common share:Basic
    
    $
    0.76
    
    
    $
    (0.04
    )
    
    $
    0.72
    
    
    $
    (7.45
    )
    
    $
    (0.17
    )
    
    $
    (7.62
    )Diluted
    
    
    0.73
    
    
    
    (0.04
    )
    
    
    0.69
    
    
    
    (7.45
    )
    
    
    (0.17
    )
    
    
    (7.62
    )Weighted average shares outstanding:Basic
    
    
    14,411
    
    
    
    14,411
    
    
    
    14,411
    
    
    
    14,924
    
    
    
    14,924
    
    
    
    14,924Diluted
    
    
    14,919
    
    
    
    14,919
    
    
    
    14,919
    
    
    
    14,924
    
    
    
    14,924
    
    
    
    14,924As Reported
    
    APB 14-1
    
    Adjusted
    
    As Reported
    
    APB 14-1
    
    Adjusted12/31/2008
    
    Adjustment
    
    12/31/2008
    
    12/31/2007
    
    Adjustment
    
    12/31/2007ASSETSConstruction-in-progress
    
    $
    258,826
    
    
    $
    1,243
    
    
    $
    260,069
    
    
    $
    255,749
    
    
    $
    
    
    
    $
    255,749Other assets
    
    
    25,720
    
    
    
    (1,083
    )
    
    
    24,637
    
    
    
    15,858
    
    
    
    (1,297
    )
    
    
    14,561Total assets
    
    
    1,202,576
    
    
    
    160
    
    
    
    1,202,736
    
    
    
    681,744
    
    
    
    (1,297
    )
    
    
    680,447LIABILITIES AND
STOCKHOLDERS EQUITYLong-term debt
    
    $
    722,948
    
    
    $
    (35,850
    )
    
    $
    687,098
    
    
    $
    157,287
    
    
    $
    (41,200
    )
    
    $
    116,087Total liabilities
    
    
    1,037,706
    
    
    
    (35,850
    )
    
    
    1,001,856
    
    
    
    278,644
    
    
    
    (41,200
    )
    
    
    237,444Additional paid-in capital
    
    
    275,433
    
    
    
    41,261
    
    
    
    316,694
    
    
    
    245,134
    
    
    
    42,662
    
    
    
    287,796Retained earnings
    
    
    30,448
    
    
    
    (5,251
    )
    
    
    25,197
    
    
    
    141,611
    
    
    
    (2,759
    )
    
    
    138,852Total Trico Marine Services, Inc.
stockholders equity
    
    
    142,984
    
    
    
    36,010
    
    
    
    178,994
    
    
    
    390,222
    
    
    
    39,903
    
    
    
    430,125Total liabilities and stockholders equity
    
    
    1,202,576
    
    
    
    160
    
    
    
    1,202,736
    
    
    
    681,744
    
    
    
    (1,297
    )
    
    
    680,447
  12




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##### Table of Contents



$200 million Revolving Credit Facility.
  $100 million Revolving Credit Facility.
  $50 million U.S. Credit Facility.
 13




---



##### Table of Contents



6.11% Notes.
 $18 million Revolving Credit Facility.
 8 million Sterling Overdraft Facility.
 24.2 million Sterling Asset Financing Facilities.
   5. Derivative Instrument
  14




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##### Table of Contents



Fair Values of Derivative Instruments
 Liability DerivativeMarch 31, 2009
    
    
    December 31, 2008Derivatives Not Designated as Hedging
    
    Balance Sheet
    
    
    Fair
    
    
    Balance Sheet
    
    
    FairInstruments under Statement 133
    
    Location
    
    Value
    
    
    Location
    
    ValueOther contract
    
    Long-term derivative
    
    $
    180
    
    
    Long-term derivative
    
    $
    1,119Total derivatives
    
    
    
    
    
    $
    180
    
    
    
    
    
    
    $
    1,119
 The Effect of Derivatives Instruments on the Statements of Income
for the Periods Ended March 31, 2009 and 2008
 Derivatives Not
    
    
    
    
    
    Amount of GainDesignated as Hedging
    
    Location of Gain
    
    
    Recognized in IncomeInstruments under
    
    Recognized in Income
    
    
    on DerviativeStatement 133
    
    on Derivative
    
    
    March 31, 2009
    
    
    March 31, 2008Other contract
    
    Unrealized gain on mark-to-market of embedded derivative
    
    $
    939
    
    
    $
    $
    939
    
    
    $
    
 6. 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.
  15




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##### Table of Contents



Fair Value Measurementsat 3/31/09 Using Fair ValueHierarchyFair Value as of3/31/09
    
    
    Level 1
    
    
    Level 2
    
    
    Level 3AssetsCash and cash equivalents
    
    $
    60,504
    
    
    $
    60,504
    
    
    $
    
    
    
    $
    Accounts receivable, net
    
    
    127,320
    
    
    
    127,320
    
    
    
    
    
    
    
    $
    187,824
    
    
    $
    187,824
    
    
    $
    
    
    
    $
    LiabilitiesAccounts payable
    
    $
    22,830
    
    
    $
    22,830
    
    
    $
    
    
    
    $
    Long-term derivative
    
    
    180
    
    
    
    
    
    
    
    
    
    
    
    180$
    23,010
    
    
    $
    22,830
    
    
    $
    
    
    
    $
    180
 Fair Value Measurementsat 12/31/08 Using Fair ValueHierarchyFair Value as of12/31/08
    
    
    Level 1
    
    
    Level 2
    
    
    Level 3AssetsCash and cash equivalents
    
    $
    94,613
    
    
    $
    94,613
    
    
    $
    
    
    
    $
    Accounts receivable, net
    
    
    165,152
    
    
    
    165,152
    
    
    
    
    
    
    
    $
    259,765
    
    
    $
    259,765
    
    
    $
    
    
    
    $
    LiabilitiesAccounts payable
    
    $
    53,872
    
    
    $
    53,872
    
    
    $
    
    
    
    $
    Long-term derivative
    
    
    1,119
    
    
    
    
    
    
    
    
    
    
    
    1,119$
    54,991
    
    
    $
    53,872
    
    
    $
    
    
    
    $
    1,119
  Balance on May 14, 2008
    
    $
    53,772Unrealized gain for the period May 14, 2008
through December 31, 2008
    
    
    (52,653
    )Balance on December 31, 2008
    
    $
    1,119Unrealized gain for the first quarter of 2009
    
    
    (939
    )Balance on March 31, 2009
    
    $
    180
  7. Earnings (Loss) per Share
  16




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##### Table of Contents



Three Months Ended March 31,2009
    
    
    2008As adjusted, seeNotes 4 and 12Net income (loss) attributable to Trico Marine Services,
Inc.
    
    $
    (747
    )
    
    $
    10,306Weighted-average shares of common stock outstanding:Basic
    
    
    16,711
    
    
    
    14,411Add dilutive effect of:Stock options and nonvested restricted stock
    
    
    
    
    
    
    133Warrants
    
    
    
    
    
    
    375Total
    
    
    16,711
    
    
    
    14,919Earnings (Loss) per Share:Basic
    
    $
    (0.04
    )
    
    $
    0.72Diluted
    
    $
    (0.04
    )
    
    $
    0.69
  8. Other Comprehensive Income
  Three Months Ended March 31,2009
    
    
    2008Shareholders
    
    
    
    
    
    
    
    
    
    
    Shareholdersof Trico Marine
    
    
    Noncontrolling
    
    
    
    
    
    
    of Trico Marine
    
    
    NoncontrollingServices, Inc.
    
    
    Interests
    
    
    Total
    
    
    Services, Inc.
    
    
    Interests
    
    
    TotalAs adjusted, see Notes 4 and 12Net income (loss)
    
    $
    (747
    )
    
    $
    750
    
    
    $
    3
    
    
    $
    10,306
    
    
    $
    841
    
    
    $
    11,147Foreign currency translation gain
    
    
    13,090
    
    
    
    
    
    
    
    13,090
    
    
    
    26,361
    
    
    
    
    
    
    
    26,361Amortization of unrecognized
actuarial gains
    
    
    97
    
    
    
    
    
    
    
    97
    
    
    
    85
    
    
    
    
    
    
    
    85Total comprehensive income
    
    $
    12,440
    
    
    $
    750
    
    
    $
    13,190
    
    
    $
    36,752
    
    
    $
    841
    
    
    $
    37,593
 9. Stock-Based Compensation
   17




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##### Table of Contents



Number ofGrants
    
    Vesting Period
    
    
    SharesSARs
    
    Ratably over three years
    
    
    170,724SARs
    
    Vest 100% on third anniversary of grant date
    
    
    130,144Stock options
    
    Ratably over three years
    
    
    170,724
  SARs
    
    Stock(Vested Ratably)
    
    (Cliff Vested)
    
    OptionsGrant-Date Fair Value
    
    $
    1.02
    
    
    $
    1.00
    
    
    $
    1.02Expected Term
    
    
    4.5
    
    
    
    5.0
    
    
    
    4.5Expected Volatility
    
    
    60.0
    %
    
    
    55.0
    %
    
    
    60.0
    %Risk-Free Interest Rate
    
    
    1.74
    %
    
    
    1.87
    %
    
    
    1.74
    %Expected Dividend Distributions
    
    
    N/A
    
    
    
    N/A
    
    
    
    N/A
 10. Taxes
     18




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##### Table of Contents



11. Employee Benefit Plans
  Three Months Ended March 31,2009
    
    
    2008Service cost
    
    $
    1,022
    
    
    $
    216Interest cost
    
    
    251
    
    
    
    73Return on plan assets
    
    
    (286
    )
    
    
    (90
    )Social security contributions
    
    
    148
    
    
    
    31Recognized net actuarial loss
    
    
    97
    
    
    
    18Net periodic benefit cost
    
    $
    1,232
    
    
    $
    248
   19




---



##### Table of Contents



12. 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
    
    
    3,519
    
    
    
    
    
    
    
    3,519Distribution to NAMESE Partner
    
    
    (244
    )
    
    
    
    
    
    
    (244
    )Adjustment to carrying value of NAMESE assets
    
    
    (824
    )
    
    
    
    
    
    
    (824
    )Foreign currency translation
    
    
    (222,507
    )
    
    
    (222,273
    )
    
    
    (234
    )Other
    
    
    84,797
    
    
    
    84,797
    
    
    
    Balance, December 31, 2008
    
    
    200,880
    
    
    
    178,994
    
    
    
    21,886Net income (loss)
    
    
    3
    
    
    
    (747
    )
    
    
    750Contribution to noncontrolling interest venture
    
    
    2,284
    
    
    
    
    
    
    
    2,284Distribution to EMSL
    
    
    (6,120
    )
    
    
    
    
    
    
    (6,120
    )Foreign currency translation
    
    
    13,187
    
    
    
    13,187
    
    
    
    Other
    
    
    5,974
    
    
    
    5,974
    
    
    
    Balance, March 31, 2009
    
    $
    216,208
    
    
    $
    197,408
    
    
    $
    18,800
 
 (1)
    
    Reflects adoption of APB 14-1 for Trico Marine Service, Inc. as discussed in Note 4
Debt. 13. Commitments and Contingencies
  Plan of Reorganization Proceeding 
 General 
 20




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##### Table of Contents



Brazilian Tax Assessments 
   14. Segment Information
   21




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##### Table of Contents



SubseaTrenching and
    
    Towing andSubsea Services
    
    Protection
    
    Supply
    
    Corporate
    
    Total(In thousands)Three Months Ended:March 31, 2009Revenues from Unaffiliated Customers
    
    $
    58,647
    
    
    $
    26,050
    
    
    $
    37,122
    
    
    $
    
    
    
    $
    121,819Intersegment Revenues
    
    
    685
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    685Operating (Loss)
    
    
    (5,478
    )
    
    
    (3,236
    )
    
    
    (459
    )
    
    
    (6,998
    )
    
    
    (16,171
    )Income (Loss) Before Income Taxes and Noncontrolling Interests
    
    
    (7,509
    )
    
    
    (4,021
    )
    
    
    (64
    )
    
    
    (3,431
    )
    
    
    (15,025
    )March 31, 2008Revenues from Unaffiliated Customers
    
    $
    8,441
    
    
    $
    
    
    
    $
    50,734
    
    
    $
    
    
    
    $
    59,175Intersegment Revenues
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    Operating Income (Loss)
    
    
    2,612
    
    
    
    
    
    
    
    10,393
    
    
    
    (1,501
    )
    
    
    11,504Income (Loss) Before Income Taxes and Noncontrolling Interests, as adjusted
    
    
    2,613
    
    
    
    
    
    
    
    13,044
    
    
    
    (2,560
    )
    
    
    13,097
 15. Recent Accounting Standards
     22




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##### Table of Contents



16. Subsequent Events
 Sale of Vessel.
 Kistefos Lawsuit.
 Withdrawal from Partnership.
 23




---



##### Table of Contents



Item 2. Managements Discussion and Analysis of Financial Condition and Results of Operations
  Cautionary 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, including our obligation to pay make-whole amounts upon any conversion of our
convertible debentures due 2028;
    
    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
  24




---



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Our Outlook
   25




---



##### Table of Contents



Reduce our debt level, and carefully manage liquidity and cash flow
 Maximize our vessel utilization and our service spreads.
 Expand our presence in additional subsea services markets.
 Invest in growth of our service offerings on our subsea fleet.
 Focus on growing markets.
 Market Outlook  Demand for our Vessels and Services
  Subsea Services.
 26




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##### Table of Contents



Subsea Protection and Trenching.
 Towing and Supply.
 Market Outlook  Credit Environment
  Acquisition of DeepOcean and CTC Marine
   Proxy Contest
   27




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##### Table of Contents



Non-GAAP Financial Measures
      Three Months Ended March 31,2009
    
    
    2008As adjusted, seeNotes 4 and 12Net Income (Loss) attributable to Trico Marine
Services, Inc.
    
    $
    (747
    )
    
    $
    10,306Depreciation and Amortization
    
    
    18,072
    
    
    
    6,747Amortization of Non-Cash Deferred Revenue
    
    
    (140
    )
    
    
    (87
    )Interest Income
    
    
    (1,072
    )
    
    
    (1,578
    )Interest Expense, Net of Amounts Capitalized
    
    
    10,914
    
    
    
    1,152Unrealized Gain on Mark-to-Market of
Embedded Derivative
    
    
    (939
    )
    
    
    Gain on Conversion of Debt
    
    
    (10,779
    )
    
    
    Other (Income) Expense, Net
    
    
    730
    
    
    
    (1,167
    )Stock-Based Compensation
    
    
    724
    
    
    
    844(Gain) Loss on Sale of Assets
    
    
    (9
    )
    
    
    (2,837
    )Income Tax Expense (Benefit)
    
    
    (15,028
    )
    
    
    1,950Noncontrolling Interest of Consolidated Subsidiaries
    
    
    750
    
    
    
    841Adjusted EBITDA
    
    $
    2,476
    
    
    $
    16,171
  Three Months Ended March 31,2009
    
    
    2008As adjustedAdjusted EBITDA
    
    $
    2,476
    
    
    $
    16,171Depreciation and Amortization
    
    
    (18,072
    )
    
    
    (6,747
    )Amortization of Non-Cash
Deferred
Revenue
    
    
    140
    
    
    
    87Stock-Based Compensation
    
    
    (724
    )
    
    
    (844
    )(Gain) Loss on Sale of Assets
    
    
    9
    
    
    
    2,837Operating Income (Loss)
    
    $
    (16,171
    )
    
    $
    11,504
 28




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##### Table of Contents



Results of Operations
  Three Months Ended March 31, 2009 Compared to the Three Months Ended March 31, 2008
 Three Months Ended March 31,2009
    
    
    2008
    
    
    $ Change
    
    
    % ChangeAs adjusted, seeNotes 4 and 12Revenues:Subsea Services
    
    $
    58,647
    
    
    $
    8,441
    
    
    $
    50,206
    
    
    
    595
    %Subsea Trenching and Protection
    
    
    26,050
    
    
    
    
    
    
    
    26,050
    
    
    
    100
    %Towing & Supply
    
    
    37,122
    
    
    
    50,734
    
    
    
    (13,612
    )
    
    
    (27
    )%Total Revenues
    
    
    121,819
    
    
    
    59,175
    
    
    
    62,644
    
    
    
    106
    %Operating Income (Loss):Subsea Services
    
    
    (5,478
    )
    
    
    2,612
    
    
    
    (8,090
    )
    
    
    (310
    )%Subsea Trenching and Protection
    
    
    (3,236
    )
    
    
    
    
    
    
    (3,236
    )
    
    
    100
    %Towing & Supply
    
    
    (459
    )
    
    
    10,393
    
    
    
    (10,852
    )
    
    
    (104
    )%Corporate
    
    
    (6,998
    )
    
    
    (1,501
    )
    
    
    (5,497
    )
    
    
    366
    %Total Operating Income (Loss)
    
    
    (16,171
    )
    
    
    11,504
    
    
    
    (27,675
    )
    
    
    (241
    )%Interest Income
    
    
    1,072
    
    
    
    1,578
    
    
    
    (506
    )
    
    
    (32
    )%Interest Expense, Net of Amounts Capitalized
    
    
    (10,914
    )
    
    
    (1,152
    )
    
    
    (9,762
    )
    
    
    847
    %Unrealized Gain on Mark to Market of
Embedded Derivative
    
    
    939
    
    
    
    
    
    
    
    939
    
    
    
    100
    %Gain on Conversion of Debt
    
    
    10,779
    
    
    
    
    
    
    
    10,779
    
    
    
    100
    %Other Income (Expense), Net
    
    
    (730
    )
    
    
    1,167
    
    
    
    (1,897
    )
    
    
    (163
    )%Income (Loss) from Operations
    
    
    (15,025
    )
    
    
    13,097
    
    
    
    (28,122
    )
    
    
    (215
    )%Income Tax (Benefit) Expense
    
    
    (15,028
    )
    
    
    1,950
    
    
    
    (16,978
    )
    
    
    (871
    )%Net Income (Loss)
    
    
    3
    
    
    
    11,147
    
    
    
    (11,144
    )
    
    
    (100
    )%Less: Net (Income) Loss Attributable to the
Noncontrolling
Interest
    
    
    (750
    )
    
    
    (841
    )
    
    
    91
    
    
    
    (11
    )%Net Income (Loss) Attributable to Trico
Marine Services, Inc.
    
    $
    (747
    )
    
    $
    10,306
    
    
    $
    (11,053
    )
    
    
    (107
    )%
  29




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##### Table of Contents



Month Ended
    
    Three Months EndedApril 30,
    
    March 31,2009
    
    2009
    
    2008Average Day Rates:SubseaSPSVs (1)
    
    $
    23,252
    
    
    $
    21,104
    
    
    $
    18,709MSVs (2)
    
    
    70,722
    
    
    
    68,051
    
    
    
    N/ASubsea Trenching and Protection
    
    
    106,751
    
    
    
    91,120
    
    
    
    N/ATowing and SupplyAHTSs (3)
    
    $
    14,859
    
    
    $
    25,012
    
    
    $
    39,373PSVs (4)
    
    
    16,828
    
    
    
    15,364
    
    
    
    17,959OSVs (5)
    
    
    6,857
    
    
    
    7,168
    
    
    
    7,163Utilization:SubseaSPSVs
    
    
    75
    %
    
    
    68
    %
    
    
    94
    %MSVs
    
    
    94
    %
    
    
    73
    %
    
    
    N/ASubsea Trenching and Protection
    
    
    100
    %
    
    
    90
    %
    
    
    N/ATowing and SupplyAHTSs
    
    
    71
    %
    
    
    70
    %
    
    
    87
    %PSVs
    
    
    81
    %
    
    
    90
    %
    
    
    91
    %OSVs
    
    
    65
    %
    
    
    67
    %
    
    
    77
    %Average number of Vessels:SubseaSPSVs
    
    
    7.0
    
    
    
    7.0
    
    
    
    5.0MSVs
    
    
    9.7
    
    
    
    9.1
    
    
    
    N/ASubsea Trenching and Protection
    
    
    4.3
    
    
    
    3.5
    
    
    
    N/ATowing and SupplyAHTSs
    
    
    6.0
    
    
    
    6.0
    
    
    
    6.0PSVs
    
    
    6.9
    
    
    
    7.0
    
    
    
    7.0OSVs
    
    
    38.0
    
    
    
    38.0
    
    
    
    38.2
 
 (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
   30




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Segment Results
 Subsea Services
   Subsea Trenching and Protection
  Towing and Supply
   Corporate
  31




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Other Items
 Interest Income.
 Interest Expense.
 Unrealized Gain on Mark-to-Market of Embedded Derivative.
 Gain on Conversion of Debt.
 Other (Expense) Income, Net.
 Income Tax (Benefit) Expense.
 Noncontrolling Interest.
 Liquidity and Capital Resources
  32




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33




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34




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March 31,
    
    
    December 31,2009
    
    
    2008As adjustedNOK 350 million Revolving Credit Facility(1), maturing January 1, 2010
    
    $
    61,534
    
    
    $
    61,531NOK 230 million Revolving Credit Facility(1), maturing January 1, 2010
    
    
    22,045
    
    
    
    21,233NOK 150 million Additional Term Loan(1), maturing January 1, 2010
    
    
    10,115
    
    
    
    10,398NOK 200 million Overdraft Facility(1), maturing January 1, 2010
    
    
    23,826
    
    
    
    3,20723.3 million Euro Revolving Credit Facility(1), maturing March 31, 2010
    
    
    18,720
    
    
    
    19,717NOK 260 million Short Term Credit Facility interest at 9.9%, maturing on
February 1, 2009
    
    
    
    
    
    
    11,631$254.7 million and $278.0 million face amount, 6.5% Senior Convertible Debentures(2),
net of unamortized discount of $39.4 million and $45.0 million as of March 31, 2009
and December 31, 2008, respectively, interest payable semi-annually in arrears,
maturing on May 15, 2028
    
    
    215,336
    
    
    
    232,998$150.0 million face amount, 3.0% Senior Convertible Debentures(2), net of unamortized
discount of $34.4 million and $35.9 million as of March 31, 2009 and December 31, 2008,
respectively, interest payable semi-annually in arrears, maturing on January 15, 2027
    
    
    115,562
    
    
    
    114,150$200 million Revolving Credit Facility(1), maturing in May 2013
    
    
    166,657
    
    
    
    160,563$100 million Revolving Credit Facility(1), maturing no later than December 2017
    
    
    25,055
    
    
    
    15,000$50 million U.S. Revolving Credit Facility Agreement (1), maturing in January 2011
    
    
    31,509
    
    
    
    46,4606.11% Notes, principal and interest due in 30 semi-annual installments, maturing April 2014
    
    
    6,915
    
    
    
    6,915$18 million Revolving Credit Facility(1), maturing December 5, 2011
    
    
    15,500
    
    
    
    16,0008 million Sterling Overdraft Facility, maturity 364 days after drawdown
    
    
    12,112
    
    
    
    9,81224.2 million Sterling Asset Financing Revolving Credit Facility(1), maturing
no later than January 31, 2015
    
    
    16,019
    
    
    
    17,286Finance lease obligations assumed in the acquisition of DeepOcean, maturing from
October 2009 to November 2015
    
    
    14,064
    
    
    
    14,172Other debt assumed in the acquisition of DeepOcean, maturing from July 2009
to August 2014
    
    
    7,973
    
    
    
    8,695Fresh-start debt premium
    
    
    297
    
    
    
    312Total debt
    
    
    763,239
    
    
    
    770,080Less current maturities
    
    
    (210,942
    )
    
    
    (82,982
    )Long-term debt
    
    $
    552,297
    
    
    $
    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 1.75% to
3.25%. The three month LIBOR rate was 1.3% and 1.8% and the three month NIBOR was 2.97% and
3.97% for the periods ending March 31, 2009 and December 31, 2008, respectively(2)
    
    Holders of our debentures have the right to require us to repurchase the 6.5% Debentures on
each of May 15, 2013, May 15, 2015, May 15, 2018 and May 15, 2023 and the 3% Debentures on
each of January 15, 2014, January 15, 2017 and January 15, 2022. 35




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##### Table of Contents



Facility
    
    Lender (s)
    
    Borrower
    
    Guarantor
    
    Financial Covenants6.5% 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 US 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
    
    Deep Ocean Shipping II
    
    Deep Ocean AS
    
    (7) (8), (9)NOK 230m Revolving Credit Facility
    
    Sparebank 1 SR-Bank
    
    Deep Ocean AS
    
    None
    
    (7) (8), (9)23.3 Revolving
Credit Facility
    
    Nordea Bank Norge ASA
    
    Deep Ocean Shipping III
    
    Trico Supply AS
    
    (1), (2), (3)NOK 150m Additional Term Loan
    
    Sparebank 1 SR-Bank
    
    Deep Ocean Shipping II
    
    Deep Ocean AS
    
    (7) (8), (9)$18m Revolving Credit Facility
    
    Nordea Bank Norge PLC
    
    Deep Ocean Shipping
    
    Trico Supply AS
    
    (1), (2), (3)£8m Overdraft Facility
    
    Barclays Bank PLC
    
    CTC Marine Projects Limited
    
    Deep Ocean AS
(partial up to 100m
NOK)
    
    None£24.2m Asset Financing Revolving
Credit Facility
    
    Barclays Bank PLC
    
    CTC Marine Projects Limited
    
    Deep Ocean AS
(partial up to 100m
NOK)
    
    NoneNOK 200m Overdraft Facility
    
    Sparebank 1 SR-Bank
    
    Deep Ocean AS
    
    None
    
    (7) (8), (9)Finance Leases
    
    Sparebank 1 SR-Bank
    
    Deep Ocean 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 quarters ending March 31, 2009, June 30, 2009, September 30, 2009, or December 31,
2009, and 4.00 for any quarter 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 36




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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 March 31,
    
    March 31,
    
    on June 30,Facility
    
    Covenant
    
    2009
    
    2009 results
    
    2009 (1)NOK 350m
Revolving Credit Facility; NOK 230m Revolving Credit Facility; NOK 150m Additional Term Loan; NOK 200m Overdraft Facility
    
    Leverage Ratio
    
    Net Interest Bearing Debt to EBITDA must be lower than 3:1
    
    3.17:1 (2)
    
    Net Interest Bearing Debt to EBITDA must be lower than 3:1$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
    
    3.46:1
    
    Net Debt to 12 month rolling EBITDA less than or equal to 3.50:1$200 million Revolving Credit Facility and $100 million Revolving
Credit Facility
    
    Consolidated Net Worth million (equal to 80% of net worth on commencement date)
    
    Net Worth must exceed $161.2
    
    $186.0 million
    
    Net Worth must exceed $161.2 million (equal to 80% of net worth on commencement date)
 
 (1)
    
    We expect to be in compliance with the covenants at June 30, 2009.(2)
    
    We are in compliance with our debt covenants at March 31, 2009 except, for the Leverage
Ratio under the NOK 350 million Revolving Credit Facility, NOK 230 million Revolving Credit
Facility, NOK 150 million Additional Term Loan and the NOK 200 million Overdraft Facility
for which we received a waiver subsequent to quarter end. In return for the waiver, we
agreed to, among other things, increase the margin on NOK 350 million Revolving Credit
Facility, NOK 230 million Revolving Credit Facility, NOK 150 million Additional Term Loan,
and the NOK 200 million Overdraft Facility to 275 bps, to make an additional prepayment of
NOK 25 million prior to June 30, 2009, and to pay a waiver fee. 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 March 31, 2009.   Cross Default Provisions.
 
    
    The 6.5% Debentures and the 3.0% Debentures contain provisions where the
debt holders may
 37




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##### Table of Contents



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. Revolving 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 Revolving Credit Facility and the $200 million Revolving Credit Facility
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.
    
    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
  38




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##### Table of Contents



Payments Due by PeriodLess than
    
    
    2-3
    
    
    4-5
    
    
    More thanTotal
    
    
    1 year
    
    
    years
    
    
    years
    
    
    5 years(In thousands)Debt obligations (1) (2) (3)
    
    $
    836,759
    
    
    $
    210,942
    
    
    $
    108,296
    
    
    $
    81,628
    
    
    $
    435,893Interest on fixed rate debt (4)
    
    
    397,785
    
    
    
    21,425
    
    
    
    42,621
    
    
    
    42,314
    
    
    
    291,425Interest on variable rate debt (5)
    
    
    65,845
    
    
    
    24,225
    
    
    
    22,649
    
    
    
    12,048
    
    
    
    6,923Vessel construction obligations (6)
    
    
    177,366
    
    
    
    122,032
    
    
    
    55,334
    
    
    
    
    
    
    
    Time charter and equipment leases
    
    
    359,334
    
    
    
    126,051
    
    
    
    149,703
    
    
    
    54,026
    
    
    
    29,554Operating lease obligations
    
    
    11,622
    
    
    
    3,749
    
    
    
    4,011
    
    
    
    2,561
    
    
    
    1,301Taxes payable (7)
    
    
    33,605
    
    
    
    2,189
    
    
    
    7,854
    
    
    
    7,854
    
    
    
    15,708Pension obligations
    
    
    6,048
    
    
    
    530
    
    
    
    1,136
    
    
    
    1,174
    
    
    
    3,208Total
    
    $
    1,888,364
    
    
    $
    511,143
    
    
    $
    391,604
    
    
    $
    201,605
    
    
    $
    784,012
 
 (1)
    
    Excludes fresh-start debt premium of $0.3 million and unamortized discount on 3.0% Debentures
and 6.5% Debentures of $34.4 million and $39.4 million, respectively, at March 31, 2009.(2)
    
    Does not assume any early conversions or redemption of the 6.5% Debentures and 3% Debentures
as each is assumed to reach its originally stated maturity date. Holders of our debentures
have the right to require us to repurchase the 6.5% Debentures on each of May 15, 2013, May
15, 2015, May 15, 2018 and May 15, 2023 and the 3% Debentures on each of January 15, 2014,
January 15, 2017 and January 15, 2022. If the remaining holders of the 6.5% Debentures convert
their debentures, we would be required to pay approximately $72 million in cash related to the
make-whole provision. Please see Note 2 in our condensed consolidated financial statements for Risks and Uncertainties.(3)
    
    If maturities of certain debt agreements with SR Bank are amended in accordance with the
agreed term sheet, approximately $117.5 million would be due on January 1, 2010. Managements
intent is to pay the outstanding balances by January 1, 2010.(4)
    
    Includes the semi-annual interest payments on the 6.5% Debentures and the 3% Debentures to
their maturities of 2028 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 March 31, 2009, throughout the life of the
obligation.(6)
    
    Reflects committed expenditures, of which approximately $100.4 million will be covered
through increases of the available capacity under our existing credit facilities when the
vessels are delivered ($72.4 million and $28.0 million of this amount relates to expenditures
in the annual periods ending March 31, 2010 and 2011, respectively), and does not reflect the
future capital expenditures budgeted for periods presented which are discretionary. Subsequent
to March 31, 2009, we have withdrawn from our partnership related to the construction of the
Deep Cygnus vessel and we are no longer obligated to fulfill our financial commitment
reflected in the table above. The change will reduce 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, $33.6
million, to be paid in equal installments over the next 9 years prior to March 31, 2009. 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 $2.2 million at March 31, 2009
which has not been included in the table above due to the uncertain timing of settlement. 39




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##### Table of Contents



Cash Flows
  Three Months Ended March 312009
    
    2008As adjustedCash flow (used in) provided by operations
    
    $
    (15,418
    )
    
    $
    5,919Cash flow used in investing
    
    
    (18,743
    )
    
    
    (23,419
    )Cash flow (used in) provided by financing
    
    
    (1,307
    )
    
    
    23,628Effects of foreign exchange rate changes on cash
    
    
    1,359
    
    
    
    5,562
     Critical Accounting Policies
  Recent Accounting Standards
  
 Item 3. Quantitative and Qualitative Market Risk Disclosures
  40




---



##### Table of Contents



Item 4. Controls and Procedures
   
 PART II  OTHER INFORMATION
 
 Item 1. Legal Proceedings
 Plan of Reorganization Proceeding
   
 Item 1A. Risk Factors
  41




---



##### Table of Contents



PART II  OTHER INFORMATION (continued)
 
 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
  
 Item 5. Other Information
  
 Item 6. EXHIBITS
  ExhibitNumber3.1
    
    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).
 43




---



##### Table of Contents



ExhibitNumber3.3
    
    Certificate of Designation of Series A Junior Participating
Preferred Stock of the Company (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 the Company (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 the Company 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
    
    Rights Agreement dated as of April 9, 2007, between Trico Marine
Services, Inc. and Mellon Investor Services LLC, as Rights Agent,
including the form of Certificate of Designation of Series A
Junior Participating Preferred Stock of Trico Marine Services,
Inc. attached thereto as Exhibit A, the form of Rights Certificate
attached thereto as Exhibit B and the Summary of Rights to
Purchase Preferred Shares attached thereto as Exhibit C
(incorporated by reference to Exhibit 4.1 to our Current Report on
Form 8-K filed April 10, 2007).4.8
    
    First Amendment to Rights Agreement dated April 28, 2008, between
Trico Marine Services, Inc. and Mellon Investor Services LLC
(incorporated by reference to Exhibit 4.1 to our Current Report on
Form 8-K filed April 29, 2008).4.9
    
    Indenture of Trico Marine Services, Inc. and Wells Fargo Bank,
National Association, as Trustee, dated May 16, 2008 (incorporated
by reference to Exhibit 4.2 to our Current Report on Form 8-K/A
filed May 19, 2008).4.10
    
    Registration Rights Agreement, dated May 16, 2008, among Trico
Marine Services, Inc. and the purchasers named therein
(incorporated by reference to Exhibit 4.3 to our Current Report on
Form 8-K filed May 16, 2008).4.11
    
    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).4.12
    
    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).4.13
    
    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).4.14
    
    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 of DeepOcean (incorporated by
reference to Exhibit 2.2 to our Current Report on Form 8-K filed
May 16, 2008).
 44




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##### Table of Contents



ExhibitNumber4.15
    
    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).4.16
    
    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).10.1
    
    Second Amendment to Credit
Agreement; Amendment to Assignments of Earnings and Assignments of
Insurances, dated as of May 8, 2009, among Trico Marine Services,
Inc., a Delaware corporation, Trico Marine Assets Inc., a Delaware
corporation, and Trico Marine Operators, Inc., a Louisiana corporation,
the Lenders party hereto and Nordea Bank Finland PLC, New York
Branch, as Administrative Agent and Collateral Agent.(1)31.1
    
    Chief Executive Officers Certification under Section 302 of the
Sarbanes-Oxley Act of 2002. (1)31.2
    
    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. 45




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##### Table of Contents



TRICO MARINE SERVICES, INC.
(Registrant)By:
    /s/  Geoff JonesGeoff JonesChief Financial Officer
(Authorized Signatory and
Principal Financial Officer)
Date: May 11, 2009 46