<PAGE>
________________________________________________________________________________


                       SECURITIES AND EXCHANGE COMMISSION
                             Washington, D.C. 20549

                                    FORM 10-K
                ANNUAL REPORT PURSUANT TO SECTION 13 OR 15(d) OF
                       THE SECURITIES EXCHANGE ACT OF 1934

                   For the fiscal year ended December 31, 2002

                         Commission File Number 0-28732

                           SEABULK INTERNATIONAL, INC.
             (Exact name of registrant as specified in its charter)

                Delaware                                       65-0966399
     (State or other jurisdiction of                         (I.R.S. Employer
     incorporation or organization)                       Identification Number)

    2200 Eller Drive, P.O. Box 13038
         Ft. Lauderdale, Florida                                  33316
(Address of principal executive offices)                       (Zip Code)


     Registrant's telephone number, including area code: (954) 523-2200

     Securities registered pursuant to Section 12(b) of the Act: None

     Securities registered pursuant to Section 12(g) of the Act: Common Stock,
$.01 par value

     Indicate by check mark whether the registrant (1) has filed all reports
required to be filed by Section 13 or 15(d) of the Securities Exchange Act of
1934 during the preceding 12 months and (2) has been subject to such filing
requirements for the past 90 days. YES [X]     NO ....

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

     Indicate by check mark whether the registrant is an accelerated filer (as
defined in Rule 12b-2 of the Act). YES ....   NO [X]

     The aggregate market value of the voting stock held by non-affiliates of
the Registrant is approximately $22,886,512 based upon the closing market price
on June 28, 2002 of $7.84 per share of common stock on the NASDAQ National
Market as reported by the Wall Street Journal.

     At March 1, 2003 there were 23,123,938 shares of the registrant's Common
Stock outstanding.

                       DOCUMENTS INCORPORATED BY REFERENCE

DOCUMENT                                              WHERE INCORPORATED
--------                                              ------------------
Proxy Statement for Annual Meeting
to be held May 16, 2003 (specified portions)          Part III

________________________________________________________________________________
<PAGE>

                           SEABULK INTERNATIONAL, INC.

                                 2002 FORM 10-K

                                TABLE OF CONTENTS

<TABLE>
<CAPTION>

ITEM                                                                                                           PAGE

<S>      <C>                                                                                                   <C>
                                                       PART I

1        Business.............................................................................................    2
2        Properties...........................................................................................   20
3        Legal Proceedings....................................................................................   20
4        Submission of Matters to a Vote of Security Holders..................................................   20
4A       Executive Officers of the Registrant.................................................................   21

                                                       PART II

5        Market for Registrant's Common Equity and Related Stockholder Matters................................   23
6        Selected Financial Data..............................................................................   24
7        Management's Discussion and Analysis of Financial Condition and Results of
         Operations...........................................................................................   27
7A       Quantitative and Qualitative Disclosures About Market Risk...........................................   45
8        Financial Statements and Supplementary Data..........................................................   45
9        Changes in and Disagreements With Accountants on Accounting and Financial
         Disclosure...........................................................................................   45

                                                      PART III

10       Directors and Executive Officers of the Registrant...................................................   46
11       Executive Compensation...............................................................................   46
12       Security Ownership of Certain Beneficial Owners and Management.......................................   46
13       Certain Relationships and Related Transactions.......................................................   46
14       Controls and Procedures..............................................................................   46

                                                       PART IV

15       Exhibits, Financial Statement Schedules, and Reports on Form 8-K.....................................   47


                                                  FINANCIAL SUPPLEMENT

         Consolidated Financial Statements and Schedules......................................................  F-1

</TABLE>

<PAGE>

                                     PART I

ITEM 1. BUSINESS

A. GENERAL

      Seabulk International, Inc. is a competitor in each of its three main
businesses - offshore energy support, marine transportation, and towing. Our
offshore energy services fleet, numbering 129 vessels, is one of the world's
largest and provides services to operators of offshore oil and gas exploration,
development and production facilities in the Gulf of Mexico, the Arabian Gulf,
offshore West Africa, South America and Southeast Asia. Our marine
transportation fleet, numbering ten tankers, carries petroleum products, crude
oil, and specialty chemicals in the U.S. domestic trade and includes five
double-hull petroleum product and chemical carriers delivered in 1998 and 1999.
Our towing fleet numbers 30 vessels and is one of the largest and most modern in
the United States. We are the sole provider of commercial tug services at Port
Canaveral, Florida; and a leading provider of those services in Port Everglades,
Florida; Tampa, Florida; Mobile, Alabama; Lake Charles, Louisiana; and Port
Arthur, Texas. We also provide offshore towing services primarily in the Gulf of
Mexico. In March 2002, we sold the eight towboats and 14 barges in our marine
transportation fleet, which was part of our Jacksonville, Florida-based Sun
State Marine Services subsidiary. In March 2001, the Company changed its name
from Hvide Marine Incorporated to Seabulk International, Inc. symbolizing the
Company's transformation into new management and new ownership in 2000.

     As used in this Report, the terms "we" and "the Company" refer to Seabulk
International, Inc., a Delaware corporation, and its subsidiaries. Our principal
executive offices are located at 2200 Eller Drive, P.O. Box 13038, Fort
Lauderdale, Florida 33316, and our telephone number is (954) 523-2200.

B. PROJECTIONS AND OTHER FORWARD-LOOKING INFORMATION

     This Report contains, and other communications by us may contain,
projections or other "forward-looking" information. Forward-looking information
includes all statements regarding our expected financial position, results of
operations, cash flows, financing plans, business strategy, budgets, capital and
other expenditures, competitive position, growth opportunities for existing or
new services, management plans and objectives, and markets for securities. Like
other businesses, we are subject to risks and other uncertainties that could
cause our actual results to differ materially from any projections or that could
cause other forward-looking information to prove incorrect. In addition to
general economic and business risks, some of the specific risks to which our
business is subject are:

o    declines in oil or gas prices, which tend to cause reductions in
     exploration, development and production activities and, in turn, reductions
     in the use of offshore energy support vessels and in the rates paid for
     their use;

o    increased construction of new offshore energy support vessels or
     construction of new Jones Act tankers by competitors, which can cause
     oversupply in the market and consequent reductions in the use of our
     offshore energy support vessels and Jones Act tankers and reductions in the
     rates paid for their use;

o    international political instability, which can lead to reductions in
     exploration, development and production activities, particularly in less
     developed regions;

                                       2

<PAGE>

o    fluctuations in weather, which can lead to declines in energy consumption
     and resulting declines in oil or gas prices;

o    changes in laws and regulations affecting the marine transportation
     industry, including any possible weakening of the Jones Act, which could
     result in increased competition from non-U.S. companies in our domestic
     offshore energy support, towing, and petroleum and chemical product
     transportation businesses;

o    changes in environmental laws and regulations, including any possible
     weakening of the U.S. Oil Pollution Act of 1990 ("OPA 90"), which could
     result in increased competition for the petroleum and chemical product
     transportation services provided by our modern double-hull fleet;

o    risks associated with potential oil spills or other environmental pollution
     incidents, which, although believed to be covered by liability insurance,
     may result in adverse market reaction and loss of business; and

o    terrorist attacks or hijackings, which could disable or destroy one of our
     vessels and result in significant loss of hire and revenue.

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


C. LIQUIDITY

     At December 31, 2002, the Company had working capital of approximately
$26.3 million. Day rates and utilization for offshore vessels working in the
Gulf of Mexico continued to be weak, a trend that began in September 2001. The
slowdown in the domestic offshore market was offset in part by continued
strength in the Company's international offshore operations, where day rates
remained strong during the year and contributed to increased revenue in West
Africa and the Middle East, and in part by the improved performance of the
marine transportation segment. The increased revenue in the offshore business in
West Africa and the Middle East was driven by exploration and production
spending as major oil companies continued to proceed with oil exploration and
development programs outside the U.S. Since the September 11, 2001 attacks, the
subsequent war on terrorism and then commencement of the war in Iraq, the U.S.
economy continues to be subject to pressure. As we enter 2003, the timing of a
recovery in the domestic offshore segment is still not certain. However, the
increases in oil and natural gas prices during the fourth quarter of 2002 and
the early part of 2003 reinforce the potential for an upturn in domestic
exploration and development activity in the latter half of 2003. We do expect
earnings in 2003 from the offshore segment to improve compared to 2002. The
Company also expects to benefit in 2003 from higher earnings in its marine
transportation business as a result of a full year of higher time charter rates
for certain tankers.

     The Company's capital requirements arise primarily from its need to service
debt, fund working capital and maintain and improve its vessels. The Company
anticipates capital requirements for debt service, vessel maintenance and fleet
improvements in 2003 to total approximately $98 million and expects that cash
flow from operations will continue to be a significant source of funds for its
working capital and capital requirements.

    The Company's credit agreement contains certain restrictive financial
covenants that among other things requires minimum levels of EBITDA and
tangible net worth. The Company is in compliance with such covenants at
December 31, 2002 and expects to be in compliance through the balance of 2003
based on current financial projections. However, the Company's financial
projections contain assumptions with respect to economic recovery beginning in
the second quarter of 2003 in the underperforming U.S. Gulf offshore market. If
the economic recovery does not occur or occurs later or to a lesser extent than
the current forecast, the Company will need to reduce operating expenses to
maintain compliance.

    Management continues implementation of certain initiatives in an effort to
improve profitability and liquidity. These initiatives include (1) selective
acquisitions and charters of additional vessels, (2) repositioning certain
vessels to take advantage of higher day rates, (3) selling unprofitable vessels,
and (4) eliminating non-essential operating and overhead expenses. Management
believes that its expense reduction initiatives will be sufficient to meet its
financial covenants if the forecasted U.S. Gulf is other than expected.

     Management recognizes that unforeseen events or business conditions,
including unexpected deterioration in its markets, could prevent the Company
from having sufficient liquidity to fund its operation or meeting targeted
financial covenants.

        If unforeseen events or business conditions prevent the Company from
having sufficient liquidity to fund its operations, the Company has alternative
sources including additional asset sales, and deferral of capital expenditures,
which should enable it to satisfy essential capital requirements. If the
Company does not meet its financial covenants, the Company  would be required
to seek an amendment or waiver to avoid default. While the Company believes it
could successfully implement alternative plans, if necessary, there can be no
assurance that such alternatives would be available or that the Company would
be successful in their implementation.

                                       3

<PAGE>

D. RECENT DEVELOPMENTS

     In January 2003, the Company took delivery of the Seabulk Africa, a
newbuild, state-of-the-art, 236-foot, 5500 horsepower UT-755L platform supply
vessel. The vessel is expected to join the Company's West African fleet. The
Seabulk Africa was acquired for cash of approximately $16 million and will be
financed in April 2003 by means of a sale leaseback arrangement with
TransAmerica Capital for a lease term of 10 years, after which the Company will
have an option to acquire the vessel.

     The Company also took delivery of two newbuild vessels as bareboat
charterer in February and March 2003. The Seabulk Badamyar is a 3800-horsepower
anchor handling tug/supply vessel and Seabulk Nilar is a 3800-horsepower
platform supply vessel. The Company is bareboat chartering the vessels from the
shipbuilder, the Labroy Group in Indonesia, for deployment under time charters
with a major international oil company in the Southeast Asia market. The term of
each bareboat charter is three years with an option to purchase.

     On March 7, 2003, the Company formed a joint venture company in Nigeria,
named Modant Seabulk Nigeria Limited, with CTC International, Inc., a company
owned by Nigerian interests. The Company will have a minority interest in the
joint venture. The Company will sell five of its crewboats operating in Nigeria
to a related joint venture with CTC International in April 2003. Modant Seabulk
Nigeria Limited will operate crewboats in Nigeria. The Company will provide
certain management services for the joint venture.

     In March 2003, the Company signed a memorandum of agreement to purchase a
Brazilian flag line handling vessel for operations in Brazil. The purchase,
which is subject to certain conditions, is expected to close by July 2003. The
Company is also in discussions with a Brazilian shipyard for the construction of
a modern platform supply vessel for offshore energy support operations in
Brazil. In anticipation of such operations, the Company is establishing a
Brazilian subsidiary called Seabulk Offshore do Brazil S.A.

     In January 2003, Larry D. Francois succeeded Andrew W. Brauninger as
President of Seabulk Offshore. In February 2003 Mr. Francois was also named a
corporate Senior Vice President of the Company. Also in March 2003, John Teague
and Gerald Gray were hired as Senior Vice President -

                                       4

<PAGE>

Seabulk Offshore Americas, and Senior Vice President - Seabulk Offshore
International Operations, respectively.

     On March 27, 2003, the Canaveral Port Authority served a sixty day notice
of termination of the exclusive franchise to Port Canaveral Towing. Port
Canaveral Towing intends to continue its operations on a non-exclusive basis at
Port Canaveral.

E. FLEET OVERVIEW

     The following table lists the types of vessels we owned, operated, or
chartered as of March 1, 2003:

<Table>
<Caption>
                                                           VESSELS
                                                           IN FLEET
                                                        -------------
<S>                                                      <C>
OFFSHORE ENERGY SUPPORT

   Domestic Offshore Energy Support:
     Anchor Handling Tug Supply/Supply Boats ........         21
     Crew/Utility Boats .............................         27
     Geophysical Boats ..............................          2
                                                             ---
          Total Domestic Offshore Energy Support ....         50

   International Offshore Energy Support:
     Anchor Handling Tug Supply/Supply Boats ........         46
     Anchor Handling Tugs/Tugs ......................         11
     Crew/Utility Boats .............................         14
     Other ..........................................          8
                                                             ---
         Total International Offshore Energy Support.         79
                                                             ---

         Total Offshore Energy Support .............         129

MARINE TRANSPORTATION

     Petroleum/Chemical Product Carriers ............         10

TOWING ..............................................         30
                                                             ---
             TOTAL VESSELS ..........................        169
                                                             ===
</Table>

     For financial information about our business segments and geographic areas
of operation, see Note 12 to our consolidated financial statements.

                                       5

<PAGE>

F. LINES OF BUSINESS

     (1) OFFSHORE ENERGY SUPPORT (SEABULK OFFSHORE)

     The offshore energy support business accounted for approximately 53% of our
total revenue in 2002. Offshore energy support vessels are used primarily to
transport materials, supplies, equipment, and personnel to drilling rigs and to
support the construction, positioning and ongoing operation of oil and gas
production platforms. These vessels are hired, or "chartered," by oil companies
and others engaged in offshore exploration and production activities.

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

     Offshore energy support services are provided primarily by the following
types of vessels:

o    Supply boats (also called workboats) are generally steel-hull vessels of at
     least 150 feet in length. They serve exploration and production facilities
     and support offshore construction and maintenance activities and are
     differentiated from other vessel types by cargo flexibility and capacity.
     In addition to transporting deck cargo, such as drill pipe and heavy
     equipment, supply boats transport liquid mud, potable and drilling water,
     diesel fuel, dry bulk cement, and dry bulk mud. With their relatively large
     liquid mud and dry bulk cement capacity and large areas of open deck space,
     they are generally in greater demand than other types of support vessels
     for exploration and workover drilling activities.

o    Anchor handling vessels, which include anchor handling tug/supply vessels
     and some tugs, are more powerful than supply boats and are used to tow and
     position drilling rigs, production facilities and construction barges. Some
     of these vessels are specially equipped to assist tankers while they are
     loading from single-point buoy mooring systems, and others are used in
     place of supply boats when not performing towing and positioning functions.

o    Crewboats (also called crew/supply boats) are faster and smaller than
     supply boats and are used primarily to transport personnel and light cargo,
     including food and supplies, to and among production platforms, rigs and
     other offshore installations. These vessels are chartered together with
     supply boats to support drilling or construction operations or, separately,
     to serve the various requirements of offshore production platforms.
     Crewboats are typically aluminum-hull vessels and generally have longer
     useful lives than steel-hull supply boats. Crewboats also provide a
     cost-effective alternative to helicopter transportation services and can
     operate reliably in all but the most severe weather conditions. However,
     the Company's strategy is to focus on higher-value, higher-margin vessels
     and reduce the smaller, lower-margin crewboat business. As a result, the
     Company sold nine crewboats during 2002 and its strategy is to continue to
     de-emphasize its crewboat business in 2003.

     About 28% of our 2002 offshore revenue was derived from domestic operations
under U.S.-flag vessel registration in the Gulf of Mexico, directed from offices
in Lafayette, Louisiana. The balance was derived from international operations,
including offshore West Africa, the Arabian Gulf and adjacent areas, and
Southeast Asia. We also operate offshore energy support vessels in other
regions, including Central and South America and, to a limited extent, Europe.
Operations in the Arabian Gulf, Southeast Asia and adjacent areas are directed
from facilities in Dubai, United Arab Emirates; operations in offshore

                                       6

<PAGE>

West Africa and certain other international areas are directed from facilities
in Nyon, Switzerland; and operations in Mexico are directed from our Lafayette,
Louisiana facilities. We also have sales offices and/or maintenance and other
facilities in many of the countries where our vessels operate.

     The following table shows the deployment of our offshore energy support
fleet at March 1, 2003.

<Table>
<Caption>
                   LOCATION                                     VESSELS
                   --------                                     -------
<S>                                                             <C>
          Domestic Offshore Energy Support
            U.S. Gulf of Mexico .........................         49
            Other .......................................          1
                                                                 ---
                                                                  50


          International Offshore Energy Support
            West Africa .................................         40
            Middle East .................................         21
            Southeast Asia ..............................          9
            Other .......................................          9
                                                                 ---
              Total International Offshore Energy Support         79
                                                                 ---
                Total ...................................        129
                                                                 ===
</Table>

     The average age of our offshore energy support vessels, based on the later
of the date of construction or rebuilding, is approximately 17 years. About 25%
of the offshore fleet is 10 or less years old, and approximately 53% is 20 or
more years old. After a vessel has been in service for approximately 30 years,
the costs of repair, vessel certification and maintenance may not be
economically justifiable.

     (2) MARINE TRANSPORTATION (SEABULK TANKERS)

     We provide marine transportation services, principally for petroleum
products and specialty chemicals, in the U.S. domestic or "coastwise" trade, a
market largely insulated from direct international competition under the Jones
Act. Marine transportation includes our ten tankers, five of which are
double-hulled, and our inland tug-and-barge operation, Sun State Marine
Services, which was sold in March 2002. This business accounted for
approximately 37% of our total revenue in 2002.

     Petroleum Product Transportation. In the domestic energy transportation
trade, oceangoing and inland-waterway vessels transport fuel and other petroleum
products, primarily from refineries and storage facilities along the coast of
the U.S. Gulf of Mexico to utilities, waterfront industrial facilities and
distribution facilities along the U.S. Gulf of Mexico, the Atlantic and Pacific
coasts and inland rivers, as well as transportation of petroleum crude and
product between Alaska, the West Coast and Hawaii. The number of U.S.-flag
oceangoing vessels eligible to participate in the U.S. domestic trade and
capable of transporting fuel or petroleum products has steadily decreased since
1980, as vessels have reached the end of their useful lives and the cost of
constructing vessels in the United States (a requirement for U.S. domestic trade
participation) has substantially increased. The decline in the number of
available vessels has tightened the supply/demand balance and put upward
pressure on freight rates, thereby benefiting the Company and our fleet of
relatively young tankers.

                                       7

<PAGE>

     At March 1, 2003 we operated the following petroleum product carriers:

<Table>
<Caption>                                                                                    TONNAGE (IN DEAD

       NAME OF VESSEL                                       CAPACITY (IN BARRELS)          WEIGHT TONS OR "DWT")
       --------------                                       ---------------------         ----------------------
<S>                                                           <C>                             <C>
Seabulk Trader .......................................          360,000                        49,900
Seabulk Challenge                                               360,000                        49,900
S/R Bristol Bay (formerly known as Ambrose Channel) ..          341,000                        45,000
Seabulk Arctic .......................................          340,000                        46,000
Seabulk Mariner ......................................          340,000                        46,000
Seabulk Pride ........................................          340,000                        46,000
Defender .............................................          260,000                        36,600
</Table>

     Since January 2002, the S/R Bristol Bay has been operated by a major oil
company on a bareboat charter.

     The S/R Bristol Bay, Seabulk Arctic, Seabulk Mariner and Seabulk Pride are
four of our five double-hull carriers. These vessels are the newest and most
technologically advanced product carriers in the Jones Act market. The fifth
double-hull, Brenton Reef, is listed below under chemical tankers.

     We acquired the Defender in March 1998. Under OPA 90, this vessel cannot be
used to transport petroleum and petroleum products in U.S. commerce after 2008.
We acquired the Seabulk Challenge and Seabulk Trader in August 1996. Their OPA
90 retirement date is 2011. The four double-hulls have no retirement date under
OPA 90.

     At March 1, 2003, six of our petroleum product carriers were operating
under time charters and one under a bareboat charter.

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

     At March 1, 2003, we operated three vessels in the chemical trade:

<Table>
<Caption>
                                                                              TONNAGE (IN DEAD-
             NAME OF VESSEL           CAPACITY (IN BARRELS)                 WEIGHT TONS OR "DWT")
             --------------           ---------------------                 ---------------------
<S>                                        <C>                                  <C>
     Brenton Reef ...................       341,000                               45,000
     Seabulk Magnachem ..............       297,000                               39,300
     Seabulk America ................       297,000                               46,300
</Table>

     Delivered in 1999, the Brenton Reef is a double-hull carrier in which we
have a 100% equity interest. We operate the Seabulk Magnachem under a bareboat
charter expiring in February 2007. We own a 67% equity interest in the Seabulk
America; the remaining 33% interest is owned by Stolt Tankers (U.S.A.), Inc.

     The Seabulk Magnachem and Seabulk America have full double bottoms (as
distinct from double hulls). Double bottoms provide increased protection over
single-hull vessels in the event of a grounding.

                                       8

<PAGE>

Delivered in 1977, the Seabulk Magnachem is a CATUG (or catamaran tug)
integrated tug and barge, or ITB, which has a higher level of dependability,
propulsion efficiency and performance than an ordinary tug and barge. The
Seabulk America's stainless steel tanks were constructed without internal
structure, which greatly reduces cargo residue from transportation and results
in less cargo degradation. Stainless steel tanks, unlike epoxy-coated tanks,
also do not require periodic sandblasting and recoating, which the Company deems
to be a competitive advantage.

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

     Pursuant to OPA 90, the Seabulk America and Seabulk Magnachem cannot be
used to transport petroleum and petroleum products in U.S. commerce after 2015
and 2007, respectively. The Brenton Reef has no retirement date under OPA 90.

     We believe that the total capacity of these carriers represents a
substantial portion of the capacity of the domestic specialty chemical carrier
fleet. The two chemical carriers, Seabulk America and Seabulk Magnachem, can
also be used as petroleum tankers. They are among the last independently owned
carriers scheduled to be retired under OPA 90.

     We book cargoes either on a spot (movement-by-movement) or contract of
affreightment basis. Approximately 75.0% of contracts for cargo are committed on
a 12- to 30-month basis, with minimum and maximum cargo tonnage specified over
the period at fixed or escalating rates per ton. We are often able to generate
additional revenue by chartering cargo space on competitors' vessels.

     Sun State. Our Sun State Marine Services subsidiary owned and operated a
petroleum transportation fleet of eight towboats and 14 barges, all of which
were primarily engaged in fuel transportation along the Atlantic intracoastal
waterway and the St. Johns River in Florida.

     The majority of Sun State's revenue was derived from a fuel transportation
contract with Colonial Oil Industries (Colonial) (formerly known as Steuart
Petroleum Company). In March 2002, Colonial acquired the eight tow boats and 14
barges, in which Sun State was responsible for handling all marine deliveries
including the servicing of Colonial's paper mill, electric utility and vessel
bunker customers. The remainder of Sun State's marine transportation revenue was
derived from fuel transportation and towing contracts with other customers along
with its marine maintenance, repair, drydocking and construction facility.

OTHER SERVICES

     Sun State owned and operated a small vessel maintenance, repair and
construction drydocking facility in Green Cove Springs, Florida, which was
engaged principally in the maintenance and construction of tugs and barges,
offshore support vessels, and other small vessels. The Sun State facility was
shut down in August 2002 and equipment at the facility was sold for $450,000.

     The Company owned a 40-acre facility in Port Arthur, Texas that served as a
regional office for our towing business, storage and supply base, and a facility
for topside repairs of oceangoing vessels.

                                       9

<PAGE>

This facility was sold in May 2002. The regional office for the Port Arthur
towing business continues to operate from a portion of the facility on a rental
basis.

     (3) TOWING (SEABULK TOWING)

     Towing is the smallest of our three businesses and represents about 10% of
our total revenue in 2002. Our harbor tugs serve seven ports in Florida,
Alabama, Texas and Louisiana, where they assist petroleum product carriers,
barges, container ships and other cargo vessels in docking and undocking and in
proceeding within the port areas and harbors. We also operate four tugs with
offshore towing capabilities that conduct a variety of offshore towing services
in the Gulf of Mexico, Guayanilla, Puerto Rico, and the Atlantic Ocean. Our tug
fleet consists of 20 conventional tugs and 10 tractor tugs, including four Ship
Docking Module(TM) tractor tugs, known as SDMs(TM). SDMs(TM) are innovative ship
docking vessels, designed and patented by us, that are more maneuverable,
efficient and flexible, and require fewer crew members than conventional harbor
tugs.

     In August 2002, we bareboat-chartered the tug Hollywood for a term of one
year to Signet for operations in the port of Brownsville, Texas. The name was
subsequently changed to Signet Enterprise. In December 2002, we
bareboat-chartered the tug Condor to Moran Towing for operations in New York
harbor for a term of one year. The Signet Enterprise formerly operated in Tampa
and the Condor formerly operated in Mobile.

     Harbor Tug Operations. In most U.S. ports, competition is unregulated.
However, a few ports grant non-exclusive franchises to harbor tug operators.
These include Port Manatee (near Tampa), Florida, where we are currently the
sole franchisee, and Port Everglades, Florida, where we are currently the
leading provider of tug services and one of two franchise holders. Port
Canaveral is currently in settlement discussions with the Federal Maritime
Commission to terminate its franchise system in which Seabulk Towing has been
the sole franchise holder. Rates are unregulated in all ports that we serve,
including the franchised ports. Generally, harbor tugs can be moved from port to
port.

     Port Everglades. Port Everglades is the second largest petroleum
non-refining storage and distribution center in the United States, providing
substantially all of the petroleum products for South Florida. Between 1958,
when our tug operations commenced, and December 2001, we operated the franchise
as the sole provider of docking services in the port. In August 2001, a second
franchise was issued to a competitor by the port, who commenced operations in
the port in December 2001. Seabulk Towing's franchise was amended in January
2002 to require Seabulk Towing to maintain a minimum of three tractor tugs in
the port, rather than five tugs previously required. The franchise is not
exclusive and expires in 2007. While we are regarded as a high-standards
operator, there is no assurance the franchise will be renewed. As of March 1,
2003, we operated five tugs in Port Everglades.

     Tampa. We expanded our harbor towing services to Tampa through the October
1997 acquisition of an established operator in the port. Because the port is
comprised of three "sub-ports" (including Port Manatee) and a distant sea buoy,
a greater number of tugs is required to be a competitive operator in Tampa than
in other ports of similar size. On March 1, 2003, we operated eight tugs,
including two tractor tugs and two SDMs(TM), in the port (including Port
Manatee).

     Port Canaveral. In Port Canaveral, we have been the sole franchise holder
to provide harbor-docking services. We provide docking and undocking services
for commercial cargo vessels serving central Florida and, on a very limited
basis, for cruise ships, as well as for Navy vessels. The Canaveral Port
Authority is currently in settlement discussions with the Federal Maritime
Commission to terminate Seabulk Towing's franchise agreement as a result of a
complaint filed against the Canaveral Port Authority by the Federal Maritime
Commission, which means that Seabulk Towing may face competition

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at Port Canaveral. In March 2003, the Canaveral Port Authority served a sixty
day notice of termination of the exclusive franchise to Port Canaveral Towing.
Port Canaveral Towing intends to continue its operations on a non-exclusive
basis at Port Canaveral. We operate four tugs in Port Canaveral.

     Mobile. At this port, we provide docking and undocking services primarily
to commercial cargo vessels, including vessels transporting coal and other bulk
exports. We operate two tugs at this port. There is a competing provider.

     Port Arthur and Lake Charles. At these ports we operate seven tugs.
Currently, four of these tugs serve Port Arthur, Texas; two serve Lake Charles,
Louisiana, and one serves both harbors. Each of these ports has a competing
provider of harbor tug services.

     Offshore Towing Operations. We currently have two tugs working in the
offshore towing market that conduct a variety of offshore towing services in the
Gulf of Mexico and the Atlantic Ocean. Demand for towing services depends on
vessel traffic and oilfield activity, which is in turn generally dependent on
local, national and international economic conditions, including the volume of
world trade.

G. CUSTOMERS AND CHARTER TERMS

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

     The primary purchasers of petroleum product transportation services are
utilities, oil companies, and large industrial consumers of fuel with waterfront
facilities. The primary purchasers of chemical transportation services are
chemical and oil companies. Both services are generally contracted for on the
basis of short-term or long-term time charters, voyage charters, contracts of
affreightment, or other transportation agreements tailored to the shipper's
requirements. CITGO and TESORO each accounted for 7% of our 2002 revenue, and
represented our largest customers in 2002.

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

H. COMPETITION

     We operate in a highly competitive environment in all our operations. The
principal competitive factors in each of the markets in which we operate are
suitability and reliability of equipment, safety record, personnel, price,
service, and reputation. Competitive factors in the offshore energy support
segment also include operating conditions and intended vessel use (both of which
determine the suitability of vessel type), shallow water versus deepwater needs,
the complexity of maintaining logistical support and the cost of transferring
equipment from one market to another. Our vessels that provide marine
transportation services compete with both other vessel operators and, in some
areas and markets, with alternative modes of transportation, such as pipelines,
rail tank cars, and tank trucks. Moreover, the users of such services are
placing increased emphasis on safety, the environment and quality, partly due to
heightened liability for the cargo owner in addition to the vessel
owner/operator under OPA 90. With respect to towing services, we compete with
other providers of tug services in all but two of the ports in which we operate.
A new competitor entered the harbor tug market in Tampa in 1999, and another in

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Port Everglades at the end of 2001. In March 2003 our franchise agreement with
the Canaveral Port Authority was terminated and we may face tug competitors in
Port Canaveral. Additional competitors may enter our markets in the future.
While U.S. flag, coastwise-operated vessels are protected under the Jones Act
and the Outer Continental Shelf Act, foreign-built, foreign-manned and
foreign-owned vessels could be eligible to compete with our vessels operating in
the domestic trade if the Jones Act were repealed or waived. There are no
current indications that this will occur.

I. ENVIRONMENTAL AND OTHER REGULATIONS

     Our operations are subject to significant federal, state, and local
regulations, the principal provisions of which are described below.

     Environmental. Our operations are subject to federal, state and local laws
and regulations relating to safety and health and environmental protection,
including the generation, storage, handling, emission, transportation, and
discharge of hazardous and non-hazardous materials. The recent trend in
environmental legislation and regulation is generally toward stricter standards,
and this trend will likely continue. We believe that our operations currently
are in substantial compliance with applicable environmental regulations.

     Governmental authorities have the power to enforce compliance with
applicable regulations, and violators are subject to fines, injunction, and
consent agreements. We do not expect that we will be required in the near future
to make capital expenditures that are material to our financial condition or
operations by reason of environmental laws and regulations; however, because
such laws and regulations are frequently changed and may impose increasingly
stricter requirements, we cannot predict the ultimate cost of complying with
these laws and regulations.

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

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

     For facilities, the statutory liability of responsible parties is limited
to $350.0 million. For tank vessels, the statutory liability of responsible
parties is limited to the greater of $1,200 per gross ton or $10.0 million ($2.0
million for a vessel of 3,000 gross tons or less) per vessel; for any "other
vessel," such liability is limited to the greater of $600 per gross ton or
$500,000 per vessel. Such liability limits do not apply, however, to an incident
caused by violation of federal safety, construction or operating regulations

                                       12

<PAGE>

or by the responsible party's gross negligence or willful misconduct, or if the
responsible party fails to report the incident or provide reasonable cooperation
and assistance as required by a responsible official in connection with oil
removal activities. Although we currently maintain maximum available pollution
liability insurance, a catastrophic spill could result in liability in excess of
available insurance coverage, resulting in a material adverse effect on our
business.

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

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

     OPA 90 also amended the federal Water Pollution Control Act to require the
owner or operator of certain facilities or the owner or operator of a tank
vessel to prepare facility or vessel response plans and to contract with oil
spill removal organizations to remove to the maximum extent practicable a
worst-case discharge. We have complied with these requirements. As is customary,
our oil spill response contracts are executory in nature and are not activated
unless required. Once activated, our pollution liability insurance covers the
cost of spill removal subject to overall coverage limitations and deductibles.

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

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

     Water. The Federal Water Pollution Control Act ("FWPCA") or Clean Water Act
("CWA") imposes restrictions and strict controls on the discharge of pollutants
into navigable waters. Such discharges are typically regulated by National
Pollutant Discharge Elimination System ("NPDES") permits. The FWPCA provides for
civil, criminal and administrative penalties for any unauthorized discharges and
imposes substantial potential liability for the costs of removal, remediation,
and damages. State laws for the control of water pollution also provide varying
civil, criminal and administrative penalties and liabilities in the case of a
discharge of petroleum, its derivatives, hazardous substances, wastes and
pollutants into state waters. In addition, the Coastal Zone Management Act
authorizes state

                                       13

<PAGE>

implementation and development of programs of management measures for non-point
source pollution to restore and protect coastal waters.

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

     Solid Waste. Our operations may generate and result in the transportation,
treatment and disposal of both hazardous and non-hazardous solid wastes that are
subject to the requirements of the federal Resource Conservation and Recovery
Act ("RCRA") and comparable state and local requirements. In August 1998, the
EPA added four petroleum refining wastes to the list of RCRA hazardous wastes.

     Remediation of Sun State. We have agreed to remediate certain portions of
the former Sun State Marine facility in Green Cove Springs, Florida in
cooperation with the state of Florida Department of Environmental Protection and
the owner of the property. The Company has expended approximately $100,000 to
date in remediation expenses and anticipates approximately another $100,000 to
complete the project over the first nine months of 2003.

     Clean Air Regulations. The federal Clean Air Act of 1970, as amended by the
Clean Air Act Amendments of 1990, requires the EPA to promulgate standards
applicable to the emission of volatile organic compounds and other air
pollutants. Our vessels are subject to vapor control and recovery requirements
when loading, unloading, ballasting, cleaning and conducting other operations in
certain ports. Our chemical and petroleum product carriers are equipped with
vapor control systems that satisfy these requirements. In addition, it is
anticipated that the EPA will issue regulations addressing air emission
requirements applicable to marine engines. Adoption of such standards could
require modifications to existing marine diesel engines in some cases.

     Coastwise Laws. A substantial portion of our operations is conducted in the
U.S. domestic trade, which is governed by the coastwise laws of the United
States (commonly referred to as the Jones Act). The coastwise laws reserve
marine transportation (including harbor tug services) between points in the
United States (including drilling rigs fixed to the ocean floor on the U.S.
outer continental shelf, under the Outer Continental Shelf Act) to vessels built
in and documented under the laws of the United States (U.S. flag) and owned and
manned by U.S. citizens, with an exception to the ownership requirement with
respect to foreign owned financial entities which own and lease U.S. vessels to
U.S. citizen operators. Generally, a corporation is deemed a U.S. citizen so
long as (i) it is organized under the laws of the U.S. or a state, (ii) each of
its president or other chief executive officer and the chairman of its board of
directors is a citizen, (iii) no more than a minority of the number of its
directors necessary to constitute a quorum for the transaction of business are
non-citizens, and (iv) 75.0% of the interest and voting power in the corporation
is held by U.S. citizens. Because we could lose the privilege of operating our
vessels in the U.S. domestic trade if non-citizens were to own or control in
excess of 25.0% of our outstanding capital stock, our Certificate of
Incorporation contains restrictions concerning foreign ownership and control of
our stock.

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

                                       14

<PAGE>

transfer or purported transfer of shares of the Company's common stock that
would result in the ownership by non-U.S. citizens of more than 25% of its
common stock.

     The laws of the United States provide that once a vessel is registered
under a foreign flag it cannot thereafter engage in the U.S. coastwise trade.
Therefore, the Company's non-U.S. flag vessels must continue to be operated
abroad, and if the Company was not able to secure charters or contracts abroad
for them, and work would otherwise have been available for them in the United
States, its operations would be adversely affected. Of the total vessels owned
or operated by the Company at March 1, 2003, 78 were registered under foreign
flags and 91 were registered under the U.S. flag.

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

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

     Occupational Health Regulations. Our shoreside facilities and, as of 2001,
our U.S.-based vessels, are subject to occupational safety and health
regulations issued by the U.S. Occupational Safety and Health Administration
(OSHA) and comparable state programs. Such regulations currently require us to
maintain a workplace free of recognized hazards, observe safety and health
regulations, maintain records and keep employees informed of safety and health
practices and duties. Our vessel operations are also subject to occupational
safety and health regulations issued by the U.S. Coast Guard and, to an extent,
OSHA. Such regulations currently require us to perform monitoring, medical
testing and record keeping with respect to mariners engaged in the handling of
the various cargoes transported by our chemical and petroleum product carriers.

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

     We believe we are currently in compliance in all material respects with the
environmental and other laws and regulations, including health and safety
requirements, to which our operations are subject and are unaware of any pending
or threatened litigation or other judicial, administrative or arbitration
proceedings against us occasioned by any alleged non-compliance with such laws
or regulations. We are currently conducting remediation of certain portions of
the former Sun State Marine facility in cooperation with the State of Florida
Department of Environmental Protection. The risks of substantial costs,
liabilities, and penalties for environmental accidents and compliance are,
however, inherent in marine operations, and there can be no assurance that
significant costs, liabilities or penalties for will not be incurred by or
imposed on us in the future.

     International Laws and Regulations. Our vessels that operate
internationally are subject to various international conventions, including
certain safety, environmental and construction standards. Among the more
significant of the conventions applicable to the fleet are: (i) the
International Convention for the Prevention of Pollution from Ships, 1973, 1978
Protocol, (ii) the International Convention on the

                                       15

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Safety of Life at Sea, 1978 Protocol, including the International Management
Code for the Safe Operation of Ships and for Pollution Prevention, which went
into effect for tank vessels on July 1, 1998, and (iii) the International
Convention on Standards of Training, Certification and Watchkeeping for
Seafarers, 1978, as amended in 1995. These conventions govern oil spills and
other matters of environmental protection, worker health and safety, and the
manning, construction and operation of vessels. Generally, surveys and
inspections are performed by internationally recognized classification
societies. The vessels that operate internationally are registered primarily in
the Marshall Islands, Liberia and Panama.

     Although we believe we are in substantial compliance with all applicable
requirements, the risks of incurring substantial compliance costs and
liabilities and penalties for noncompliance are inherent in offshore energy
support operations and there can be no assurance that significant costs,
liabilities and penalties will not be incurred by us or imposed on us in the
future.

J. INSURANCE

     Our marine transportation operations are subject to the normal hazards
associated with operating vessels carrying large volumes of cargo and rendering
services in a marine environment. These hazards include the risk of loss of or
damage to our vessels, damage to third parties as a result of collision, loss,
or contamination of cargo, personal injury of employees and third parties, and
pollution and other environmental damages. We maintain insurance coverage
against these hazards with certain deductibles for which we are responsible.
Risk of loss of or damage to our vessels is insured through hull and machinery
insurance policies in amounts that approximate fair market value, also subject
to certain deductibles. Vessel operating liabilities, such as collision, cargo,
environmental, and personal injury, are insured primarily through our
participation in a mutual insurance association, the Steamship Mutual
Underwriting Association (Bermuda) Limited. Because we maintain mutual
insurance, we are subject to additional premiums for prior years due to funding
requirements and coverage shortfalls in the event claims exceed available funds,
reserves and reinsurance, and to future premium increases based on prior
underwriting loss experience. Potential claims liabilities are recorded as
insurance expense reserves when they become probable and can be reasonably
estimated.

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

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

     In December 2001, the Company was notified by Steamship Mutual, its
protection and indemnity ("P&I") marine insurance club (the "Club"), of
additional insurance calls in the projected amount of $4.1 million due to the
Club's investment losses. The Company accrued the full $4.1 million in 2001.
Actual payments of these additional calls made during 2002 were $2.1 million,
and $2.0 million is expected to be paid in 2003.

     The increase in P&I costs due to higher deductibles and higher self insured
retention levels will likely cause an increase in P&I insurance expense in 2003
of between $1.5 million and $2.5 million.

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Premiums by both marine and non-marine insurers have been adversely impacted by
the erosion of claims reserves (including our underwriters), claims underwriting
losses and increased reinsurance costs, as well as our own loss experience. No
assurance can be given that affordable and viable direct and reinsurance markets
will be available to us in the future. We maintain high levels of self-insurance
for P&I and hull and machinery risks through the use of substantial deductibles
and self insured retentions, which may increase in the future. We carry coverage
related to loss of earnings on revenues subject to fourteen day deductibles, for
our tanker operations, but not for our offshore and tug operations.

K. SECURITY

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

     In 2002 Congress passed the Maritime Transportation Security Act which,
together with the International Maritime Organization's recent security
proposals (collectively known as The International Ship and Port Security Code),
will require specific security plans for certain types of vessels and more
rigorous crew identification requirements. The Company will continue its review
and implementation of vessel security plans and procedures as rules implementing
the Act are issued by the U.S. Coast Guard and go into effect. The costs of
security are likely to rise.

L. RISKS OF OPERATING INTERNATIONALLY

     The Company's international offshore vessel support operations are subject
to the usual risks inherent in doing business in countries other than the United
States. Such risks include changing political conditions, local cabotage and
content laws, possible vessel seizure, company nationalization or other
governmental actions, currency restrictions and revaluations, import/export
restrictions, increases in duty taxes and royalties, war, and terrorist attacks,
all of which are beyond the control of the Company. In the last year, there has
been a higher than usual level of anti-Western hostility in parts of the Middle
East and Southeast Asia, where the Company has substantial operations. In
Nigeria there has recently been legislation enacted which will provide for
certain Nigerian ownership and crew requirements for offshore vessel support
operators such as the Company. The Company has entered into a joint venture with
Nigerian interests to operate Nigerian flag crewboats in Nigeria, partially in
response to such proposals. Although it is impossible to predict the effect of
any of these developments on the Company, the Company believes these risks to be
within acceptable limits and, in view of the mobile nature of the Company's
principal revenue producing assets, does not consider them at this time to
constitute a factor materially adverse to the conduct of its international
offshore vessel support operations as a whole.

M. EMPLOYEES

     As of March 1, 2003, we had 2,143 employees. Management considers relations
with employees to be satisfactory. Renegotiations of labor contracts are
on-going. The Seabulk America is manned by 38 officers and crew who are subject
to a collective bargaining arrangement that expires on December 31, 2003. In
addition, the Seabulk Trader, Seabulk Challenge, Seabulk Magnachem, Seabulk
Defender, the five double-hull tankers, and twenty-eight harbor tugs are manned
by approximately 400 members of national maritime labor unions.

     In January 2003, an election was held among tug crew employees of Seabulk
Towing, Inc. at its Mobile, Alabama facility, for the purpose of determining
whether the crew would remain non-union, or would choose to be represented by
the Marine Engineers Benevolent Association (MEBA) union or the

                                       17

<PAGE>

American Maritime Officers union. The results of the election, as certified by
the U.S. National Labor Relations Board (NLRB), was that no union collective
bargaining representative was selected. No timely objections were filed to the
election. The Company is also vigorously objecting to alleged unfair labor
practice charges filed against the Company before the NLRB by MEBA arising out
of the discharge of three employees in Mobile and the conduct of the election
campaign in Mobile.

N. ADDITIONAL BUSINESS AND CORPORATE RISK FACTORS

     The Company operates in a business environment that has many risks. Listed
below are some additional critical risk factors that affect the Company and
particularly its offshore vessel support business and that should be considered
when evaluating any forward-looking statement. The impact of any one risk factor
or a combination of several risk factors could materially impact the Company's
results of operations and financial condition and the accuracy of any
forward-looking statement made in this Form 10-K.

     Oil and Gas Prices Are Highly Volatile. Commodity prices for crude oil and
natural gas are highly volatile. Prices are extremely sensitive to
supply/demand. High demand for crude oil and natural gas and/or low inventory
levels as well as perceptions about future supply interruptions can cause
commodity prices for crude oil and natural gas to rise while, generally, low
demand and/or increases in crude oil and natural gas supplies cause commodity
prices to fall.

     Factors that affect the supply of crude oil and natural gas include but are
not limited to the following: the Organization of Petroleum Exporting Countries'
(OPEC) ability to control crude oil production levels and pricing as well as the
level of production by non-OPEC countries; political and economic instability
and uncertainties, including war or the threat of war; advances in exploration
and development technology; worldwide demand for energy resources; and
governmental restrictions placed on exploration and production of energy
resources.

     Changes in the Level of Capital Spending by Our Customers. The Company's
principal customers are major oil and natural gas exploration, development and
production companies. The Company's results of operations, particularly of its
offshore vessel support business, are dependent on the level of capital spending
by the energy industry. To the extent our customers reduce their level of
capital spending, our business would be adversely affected.

     The Offshore Vessel Support Industry is Highly Competitive. The Company's
offshore vessel support business in particular operates in a highly competitive
environment. Competitive factors include type of equipment, price and quality of
service by vessel operators, and the quality, availability and age of vessels.
Decreases in the level of offshore drilling and development activity by the
energy industry can negatively affect the demand for the Company's vessels,
consequently applying downward pressure on day rates. Extended periods of low
vessel demand and/or low day rates will reduce the Company's revenues. Day rates
for offshore support vessels also depend on the supply of vessels. Generally,
excess offshore service capacity puts downward pressure on day rates. Excess
capacity can occur when newly constructed vessels enter the market and when
vessels are mobilized between market areas. While the Company has recently
committed to the construction of several vessels, it has also sold a significant
number of vessels over the last few years.

     The Ability to Obtain Favorable Financing. The Company's ability to add
vessels both for replacement of aging equipment and for expansion is largely
dependent on its ability in the future to obtain favorable financing from
commercial sources and through government maritime finance programs. The U.S.
government maritime financing guarantee program (the Title XI Program), which
has been used

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<PAGE>

in the past to finance five of the Company's tankers and three of the Company's
tugs, has not been funded as yet for the government's current fiscal year.

     The Ability to Obtain U.S. Shipyard Construction. We believe that there are
a limited number of U.S. shipyards either interested in or capable of
constructing U.S.-flag product tankers in accordance with our standards and cost
requirements. Failure to agree with a shipyard on tanker newbuilds could
adversely affect our ability to expand our Jones Act tanker fleet or replace our
five single hull vessels, the first of which is scheduled to be retired under
OPA '90 in 2007.

     Our Controlling Shareholders Effectively Control the Outcome of Shareholder
Voting. A group of shareholders currently beneficially owns approximately 76% of
our voting power. As a result, this group of shareholders has the power to
effectively control the outcome of shareholder votes and, therefore, corporate
actions requiring such votes. Further, the existence of the controlling group of
shareholders may adversely affect the prevailing market price of our shares if
they are viewed as discouraging takeover attempts in the future.

     Holders of our Common Stock may Experience Dilution in the Value of Their
Equity Interest as a Result of the Issuance and Sale of Additional Shares of our
Common Stock. A substantial number of shares of our common stock was issued in a
private equity transaction in September 2002. They are, therefore, treated as
"restricted securities" for purposes of Rule 144 under the Securities Act and
are held by our affiliates and treated as "control securities". The controlling
shareholders currently beneficially own approximately 76% of our outstanding
common stock. No prediction can be made as to the effect, if any, that the
issuance and availability for future market sales of our common stock (including
shares issued upon the exercise of stock options) or the perception that such
sales could occur, could materially impair our future ability to raise capital
through our offering of equity securities.

     Changes in Operating and Financing Costs could have an Adverse Impact. The
impact of changes in operating and financing costs, including foreign currency,
interest rates, fuel, insurance and security costs could adversely affect
results.

     Failure to Attract and Retain Key Management and Technical Personnel. The
Company's success depends upon the continued service of its executive officers
and other key management and technical personnel, and our ability to attract,
retain, and motivate highly qualified personnel. The loss of the services of a
number of the Company's executive officers, area managers, fleet personnel or
other key employees, or our ability to recruit replacements for such personnel
or to otherwise attract, retain and motivate highly qualified personnel, could
adversely affect the Company.

O. WEBSITE ACCESS TO REPORTS

     We make available, free of charge, access to our Annual Report on Form 10-K
and our most recent Quarterly Report on Form 10-Q as soon as reasonably
practicable after such reports are electronically filed with or furnished to the
SEC through our home page at www.seabulkinternational.com. We will also, in the
near future, make all future Quarterly Reports on Form 10-Q, Current Reports on
Form 8-K, and all amendments thereto available on our home page.

                                       19

<PAGE>

ITEM 2. PROPERTIES

     The Company's fleet ownership is described in Item 1. Business.
Substantially all of the Company's vessels are mortgaged to secure the Company's
New Credit Facility or U.S. Maritime Administration Title XI financing.

     The Company's principal offices are located in Fort Lauderdale, Florida,
where the Company leases approximately 36,000 square feet of office and shop
space under a lease expiring in 2009. The Company formerly owned a 40-acre
facility in Port Arthur, Texas that served as a regional office and included
1,200 feet of dock space. This facility was sold in May of 2002. The Company
also leases office and other facilities in Lafayette, Louisiana; Dubai, the
United Arab Emirates; Nyon, Switzerland; Houston, Texas and Tampa, Florida. In
addition, the Company leases sales offices and maintenance and other facilities
in many of the locations where its vessels operate. The lease in Green Cove
Springs was terminated in April 2002 as part of the sale of the Sun State Marine
Services business. The Company believes that its facilities are generally
adequate for current and anticipated future use, although the Company may from
time to time close or consolidate facilities or lease additional facilities as
operations require.

ITEM 3. LEGAL PROCEEDINGS

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

     The Company was sued by Maritime Transportation Development Corporation in
January 2002 in Florida state court in Broward County alleging broker
commissions due since 1998 from charters on two of its vessels, the Seabulk
Magnachem and Seabulk Challenger, under an alleged broker commission agreement.
The claim allegedly continues to accrue. The amount alleged to be due is over
$500,000, but is subject to offset claims and defenses by the Company. The
Company is vigorously defending such charges and believes that it has good
defenses, but the Company cannot predict the ultimate outcome.

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

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

         None.

                                       20

<PAGE>

ITEM 4A. EXECUTIVE OFFICERS OF THE REGISTRANT

     The executive officers of the Company are:

<TABLE>
<CAPTION>

                   NAME                AGE                            CURRENT POSITIONS
                   ----                ---                            -----------------
<S>                                    <C>   <C>
       Gerhard E. Kurz ..............  63    Chairman of the Board, President and Chief Executive Officer
       Vincent J. deSostoa ..........  58    Senior Vice President and Chief Financial Officer
       Larry D. Francois ............  60    Senior Vice President and President, Seabulk Offshore
       Kenneth M. Rogers ............  47    Senior Vice President and President, Seabulk Towing
       Alan R. Twaits ...............  55    Senior Vice President, General Counsel and Secretary
       L. Stephen Willrich ..........  50    Senior Vice President and President, Seabulk Tankers
       Michael J. Pellicci ..........  39    Vice President - Finance and Corporate Controller
       Hubert E. Thyssen ............  55    Vice President - Seabulk Offshore
</TABLE>

     MR. KURZ has been Chief Executive Officer and a Director of the Company
since April 2000, President since September 2000, and Chairman of the Board
since September 2002. He formerly served as President of Mobil Shipping and
Transportation Company (MOSAT), a Mobil Oil-affiliated company from which he
retired in March 2000. Mr. Kurz joined Mobil in London in 1964 as a Chartering
Assistant. In 1965 he was transferred to Mobil's Marine Division in New York.
After a series of assignments, he was named Vice President of Planning, Middle
East and Marine Transportation, and then President of MOSAT in 1989. He serves
on the Board of Directors of the American Bureau of Shipping and previously
chaired its Finance and Nominating Committees. He also serves on the Boards of
the Seamen's Church Institute, the Coast Guard Foundation, and the Newport News
Mariners' Museum. Mr. Kurz is past Chairman of the Marine Preservation
Association and the Oil Companies International Marine Forum. He is a founding
member and Chairman of the Massachusetts Maritime Academy's International
Business Advisory Council and a member of the International Advisory Board to
the Panama Canal Authority. He is the recipient of numerous awards and honors,
including the International Maritime Hall of Fame Award, the 1999 SeaTrade
"Personality of the Year" award, the Seamen's Church Institute Silver Bell
Award, and the U. S. Coast Guard Award and Medal for Meritorious Public Service.
He holds an Honorary Doctorate Degree from Massachusetts Maritime Academy.

     MR. DESOSTOA has been Senior Vice President and Chief Financial Officer
since June 2002. He was previously President and Chief Financial Officer of
Zeosoft Corporation, a provider of mobile service networks. Prior to that, he
served as Senior Vice President and Chief Financial Officer of OMI Corporation,
an international tanker operator with interests in real estate and energy. Mr.
deSostoa was also Chief Financial Officer of the New York City Transit Authority
and a partner with Peat Marwick, Mitchell & Co., which he joined in 1973. He is
a Vietnam veteran and a recipient of the Navy Achievement Award.

     MR. FRANCOIS was appointed Senior Vice President in February 2003 and
President, Seabulk Offshore in January 2003. He previously served as Area
Manager of domestic offshore marine operations for Tidewater Inc. Prior to that,
he was Division Manager for Zapata Gulf Marine Corporation in Mexico,
International Marketing Manager in London for Western Oceanic, Inc., and Area
Executive for Tidewater in Egypt. He was also Marketing & Sales Manager for
Dillingham Maritime, a division of the Dillingham Corporation. A Vietnam
veteran, Mr. Francois served in the United States Air Force with the rank of
Captain.

                                       21

<PAGE>

     MR. ROGERS has been Senior Vice President and President, Seabulk Towing
since July 2002. He was previously Senior Vice President of Marketing for
Seabulk Towing, which he joined in October 2001. Prior to that, he was Managing
Director of Maritime Audit Services for Carnival Corporation and President of
Southern Ship Management. Mr. Rogers was successively Port Captain, Ship
Manager, Assistant Vice President of Operations and Vice President of Operations
for OMI Corporation, which he joined in 1986. He began his career, upon
graduation from the United States Merchant Marine Academy, with Texaco Inc. as a
Deck Officer.

     MR. TWAITS has been Senior Vice President, General Counsel and Secretary
since November 2000. He was previously Senior Vice President, General Counsel
and Secretary of Premier Cruise Lines. Prior to his experience at Premier, he
was in private practice and served as General Counsel and Secretary for Carnival
Corporation as well as a Director and Vice President, General Counsel and
Secretary of Carnival Air Lines. Mr. Twaits has also held senior counsel
positions with Crowley Maritime Corporation, Trusthouse Forte, Inc., United
States Lines, Inc., and a staff counsel position at Pan American World Airways.
He is a member of the Florida Bar, the District of Columbia Bar, the American
Bar Association and its International Law Section, the American Corporate
Counsel Association, and the Association of Corporate Secretaries.

     MR. WILLRICH has been Senior Vice President since June 2000 and President
of Seabulk Tankers since March 1998, when he was also elected a corporate Vice
President. He was appointed Senior Vice President of Seabulk Tankers in August
1996. He joined the Company as Vice President of Chartering in January 1988.
Prior to joining the Company, Mr. Willrich was employed by Diamond Shamrock
Chemical Company from 1975 to 1988, where he rose to Division General Manager.
Prior to his service with Diamond Shamrock, he worked for Gulf Oil Corporation
as a Third Assistant Engineer on various company tankers. He has more than 27
years of experience in the management of Jones Act product tankers.

     MR. PELLICCI has been Vice President - Finance since March 2002 and
Controller since January 2001. He previously served as Director of Corporate
Finance and Corporate Controller of Caraustar Industries, Inc. in Atlanta, which
he joined in 1989. Prior to that, he was a Senior Auditor with Arthur Andersen &
Co. He is a Certified Public Accountant.

     MR. THYSSEN has been Vice President since August 2002. He is also Senior
Vice President of Marketing & Sales for Seabulk Offshore and Managing Director
of Seabulk Offshore, S.A. He joined the Company in 1998 when it acquired Care
Offshore, where he served as Managing Director and Director of Marketing. Prior
to that, he was Manager for Saunier Maritime SARL in Marseilles, a shipbroker
and agent, which he joined in 1972. He is a member of the Association Francaise
du Petrole.

                                       22

<PAGE>

                                     PART II

ITEM 5. MARKET FOR REGISTRANT'S COMMON EQUITY AND RELATED STOCKHOLDER MATTERS

     The Common Stock of Seabulk International, Inc. trades on the NASDAQ
National Market under the symbol SBLK. Between January 2, 2001 and March 20,
2001, the stock traded on the NASDAQ National Market under the symbol HVDM. In
2000, the common stock traded on the OTC Bulletin Board under the symbol HVDM.

     The Class A Warrants trade on the OTC Bulletin Board under the symbol
SBLKW. In 2000 and through March 20, 2001, they traded under the symbol HVDMW.
The warrants expire December 14, 2003 and entitle the holder, for each warrant
held, to purchase one share of the Common Stock of the Company for $38.49.

     There is no established market for another series of warrants issued to
noteholders (the Noteholder Warrants) to purchase 723,861 shares of common stock
at an exercise price of $0.01 per share.

     The Company has not paid and does not expect to pay any dividends on its
Common Stock.

     The following tables set forth the high and low closing prices of the
Company's Common Stock and Class A Warrants, as reported by the NASDAQ National
Market and the OTC Bulletin Board.

     COMMON STOCK

<TABLE>
<CAPTION>

                                                                                      HIGH           LOW
                                                                                    --------      --------
<S>                                                                                 <C>           <C>
         2003

            First Quarter (through March 26)....................................    $   8.43      $   5.61

         2002

            First Quarter.......................................................        5.50          2.70
            Second Quarter......................................................        8.10          4.50
            Third Quarter.......................................................        7.72          5.06
            Fourth Quarter......................................................        5.71          4.38

         2001

            First Quarter ......................................................        9.06          7.75
            Second Quarter......................................................        7.80          5.00
            Third Quarter.......................................................        5.95          3.75
            Fourth Quarter......................................................        4.35          2.95

</TABLE>

                                       23

<PAGE>

     CLASS A WARRANTS

<TABLE>
<CAPTION>

                                                                                      HIGH           LOW
                                                                                    --------      --------
<S>                                                                                 <C>           <C>
         2003

            First Quarter (through March 26)....................................    $   0.12      $  0.02

         2002

            First Quarter.......................................................        0.38          0.38
            Second Quarter......................................................        0.38          0.38
            Third Quarter.......................................................        0.38          0.25
            Fourth Quarter......................................................        0.28          0.02

         2001

            First Quarter ......................................................        3.00          0.38
            Second Quarter......................................................        0.91          0.38
            Third Quarter.......................................................        2.00          0.38
            Fourth Quarter......................................................        2.00          0.38

</TABLE>

As of March 26, 2003 there were 265 holders of record of the Company's Common
Stock and 50 holders of record of the Company's Class A Warrants.

The Company declared no dividends in 2002 or in 2001.

The Company's ability to pay dividends in the future is subject to certain
limitations, contained in the Company's New Credit Facility. Information
concerning the Company's plans which may involve the issuance of equity required
by Item 5 will be incorporated by reference to Item 12 of this Form 10-K which
will be included in the Proxy Statement for the 2003 Annual Stockholders
Meeting.

ITEM 6. SELECTED FINANCIAL DATA.

     The selected consolidated financial data presented below should be read in
conjunction with the consolidated financial statements and notes thereto and
"Management's Discussion and Analysis of Financial Condition and Results of
Operations," included elsewhere in this Report.

                                       24

<PAGE>

 <Table>
<Caption>

                                                                   SUCCESSOR COMPANY                 PREDECESSOR COMPANY (1)
                                                 ------------------------------------------------  ----------------------------
                                                                                     PERIOD FROM    PERIOD FROM
                                                                                     DECEMBER 16     JANUARY 1
                                                                                          TO            TO         YEAR ENDED
                                                       YEAR ENDED  DECEMBER 31,      DECEMBER 31,   DECEMBER 15,   DECEMBER 31,
                                                 ----------------------------------- ------------   ------------   ------------
                                                   2002         2001         2000          1999       1999(3)         1998(3)
                                                 ---------    ---------   ----------    ---------    ---------       --------
                                                                                  (in thousands)
<S>                                              <C>          <C>          <C>          <C>          <C>           <C>
CONSOLIDATED STATEMENT OF OPERATIONS DATA:
  Revenue .....................................  $ 323,997    $ 346,730    $ 320,483    $  13,479    $ 328,751     $ 404,793
  Operating expenses ..........................    182,558      199,327      205,226        8,047      212,753       213,601
  Overhead expenses ...........................     38,657       37,002       39,630        1,643       47,814        43,179
  Depreciation, amortization, drydocking
   and other ..................................     66,376       61,313       50,271        2,069       79,410        64,244
                                                 ---------    ---------    ---------    ---------    ---------     ---------
  Income (loss) from operations ...............     36,406       49,088       25,356        1,720      (11,226)       83,769
  Interest expense, net(2) ....................     44,240       55,667       62,010        2,688       70,374        41,238
  Other income (expense), net .................      1,429         (172)      12,574         (597)     (32,129)       (5,692)
  Reorganization items(3) .....................         --           --           --           --     (433,273)           --
                                                 ---------    ---------    ---------    ---------    ---------     ---------
  Income (loss) before income taxes and
   extraordinary item .........................     (6,405)      (6,751)     (24,080)      (1,565)    (547,002)       36,839
  Provision for (benefit from) income taxes ...      4,642        5,210        4,872           --      (32,004)       13,489
                                                 ---------    ---------    ---------    ---------    ---------     ---------
  Income (loss) before extraordinary item .....    (11,047)     (11,961)     (28,952)      (1,565)    (514,998)       23,350
  Gain (loss) on extinguishment of debt .......    (27,823)          --           --           --      266,643        (1,602)
                                                 ---------    ---------    ---------    ---------    ---------     ---------
  Net income (loss) ...........................  $ (38,870)   $ (11,961)   $ (28,952)   $  (1,565)   $(248,355)    $  21,748
                                                 =========    =========    =========    =========    =========     =========
  Diluted earnings (loss) per common share:

     Income (loss) before extraordinary item ..  $   (0.77)   $   (1.16)   $   (2.89)   $   (0.16)   $  (33.22)    $    1.43
                                                 =========    =========    =========    =========    =========     =========
     Net income (loss) ........................  $   (2.72)   $   (1.16)   $   (2.89)   $   (0.16)   $  (16.02)    $    1.35
                                                 =========    =========    =========    =========    =========     =========
     Weighted average number of shares and
      common equivalent shares outstanding ....     14,277       10,277       10,034       10,000       15,503        19,451
                                                 =========    =========    =========    =========    =========     =========

CONSOLIDATED STATEMENT OF CASH FLOWS DATA:
  Net cash provided by (used in):
     Operating activities .....................  $  61,053    $  66,840    $  26,276    $   2,561    $  14,927     $  90,853
     Investing activities .....................    (14,519)     (31,815)       2,228       (3,021)     (14,862)     (525,652)
     Financing activities .....................    (20,977)     (37,627)     (33,317)      (1,491)      10,826       429,550

</Table>

                                       25

<PAGE>
<Table>
<Caption>
                                                                                                                       PREDECESSOR
                                                                              SUCCESSOR COMPANY                          COMPANY
                                                       ------------------------------------------------------------   -------------
                                                                              AS OF DECEMBER 31,
                                                       ------------------------------------------------------------   -------------
                                                           2002           2001              2000           1999            1998
                                                       ------------   ------------      ------------   ------------   -------------
                                                                                (IN THOUSANDS)
<S>                                                    <C>            <C>               <C>            <C>             <C>
CONSOLIDATED BALANCE SHEET DATA:
  Working capital (deficit) ......................     $    26,261     $    (7,313)     $     7,026     $    33,498     $  (216,802)
  Total assets ...................................         703,095         744,765          775,476         830,740       1,355,267
  Total long-term liabilities ....................         443,095         519,552          544,870         582,364         631,416
  Convertible preferred securities of a
     subsidiary trust ............................              --              --               --              --         115,000
  Stockholders' equity ...........................         176,800         124,687          136,514         165,326         248,035
-------------------------------------
</Table>

(1)  The Company was reorganized under section 382 of the U.S. Bankruptcy Code
     (Chapter 11) on December 15, 1999.


(2)  Interest expense for the period from January 1, 1999 through December 15,
     1999 excludes $8.8 million of contractual interest that was not accrued
     during the Company's Chapter 11 proceeding.

(3)  Reorganization items are comprised of items directly related to the
     Predecessor Company's Chapter 11 proceeding.


                                       26

<PAGE>

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

     This discussion and analysis of the Company's financial condition and
historical results of operations should be read in conjunction with the
Company's consolidated financial statements and the related notes thereto
included elsewhere in this Report.

     In August 2002, the Company restated its consolidated financial statements
as of and for the year ended December 31, 2001. The restatement was made in
order to accrue an additional $4.1 million operating expense in the fourth
quarter of 2001 related to supplemental marine insurance calls.

CRITICAL ACCOUNTING POLICIES AND ESTIMATES

     Our discussion and analysis of the Company's financial condition and
results of operations are based upon the consolidated financial statements,
which have been prepared in accordance with accounting principles generally
accepted in the United States. The preparation of these financial statements
requires the Company to make estimates and judgments that affect the reported
amounts of assets, liabilities, revenues and expenses, and related disclosure of
contingent assets and liabilities. On an on-going basis, the Company evaluates
its estimates, including those related to bad debts, useful lives of vessels and
equipment, deferred tax assets, and certain accrued liabilities. The Company
bases its estimates on historical experience and on various other assumptions
that are believed to be reasonable under the circumstances, the results of which
form the basis for making judgments about the carrying values of assets and
liabilities that are not readily apparent from other sources. Actual results may
differ from these estimates under different assumptions or conditions. The
Company believes the following critical accounting policies affect its more
significant judgments and estimates used in the preparation of its consolidated
financial statements.

Revenue Recognition.

     Revenue is generally recorded when services are rendered, the Company has a
signed charter agreement or other evidence of an arrangement, pricing is fixed
or determinable and collection is reasonably assured. For the majority of the
offshore energy and towing segments, revenues are recorded on a daily basis as
services are rendered. For the marine transportation segment, revenues are
earned under time charters or affreightment/voyage contracts. Revenue from time
charters is earned and recognized on a daily basis. Certain time charters
contain performance provisions, which provide for decreased fees based upon
actual performance against established targets such as speed and fuel
consumption. Revenue for affreightment/voyage contracts is recognized based upon
the percentage of voyage completion. The percentage of voyage completion is
based on the number of voyage days worked at the balance sheet date divided by
the total number of days expected on the voyage.

Allowance for Doubtful Accounts.

     The Company maintains allowances for doubtful accounts for estimated losses
resulting from the inability of its customers to make required payments. The
estimate of uncollectible amounts is based on the results of ongoing credit
evaluations and the Company's historical experience. If the financial condition
of our customers were to deteriorate, resulting in an impairment of their
ability to make payments, additional allowances may be required.

Asset Impairment.

     The Company records impairment losses on long-lived assets used in
operations when indications of impairment are present and the estimated
undiscounted cash flows to be generated by those assets are less than the assets
carrying amounts. If the carrying value is not recoverable, the carrying value
of the assets is reduced to estimated fair value. Undiscounted cash flows are
estimated using expected average long-term day rates and utilization based
largely on historical industry and Company experiences. If future market
conditions do not meet expectations, the Company may be required to record
impairment charges which could be material.

                                       27

<PAGE>

Useful Life Determination.

     Management determines the useful lives of the vessels and equipment based
upon regulatory requirements such as OPA 90, market conditions and operational
considerations. The Company continues to evaluate the reasonableness of the
useful lives of the vessels and equipment.

Drydocking Costs.

     Substantially all of the Company's vessels must be periodically drydocked
and pass certain inspections to maintain their operating classification, as
mandated by certain maritime regulations. Costs incurred to drydock the vessels
are deferred and amortized on a straight line basis over the period to the next
drydocking, generally 30 to 36 months. The alternative accounting policy for
drydocking costs is to expense the expenditures as incurred. The Financial
Accounting Standards Board and the American Institute of Certified Public
Accountants have proposed that the deferral method of accounting for planned
major maintenance activities such as drydocking expenditures should be
eliminated. Under the proposal, the Company would expense drydocking
expenditures as incurred. The unamortized drydocking costs were approximately
$27.2 million at December 31, 2002.

Valuation of Deferred Tax Assets.

     The Company records a valuation allowance to reduce its deferred tax assets
to the amount that is more likely than not to be realized. After application of
the valuation allowance, the Company's net deferred tax assets and liabilities
are zero at December 31, 2002 and 2001.

Stock-Based Compensation

     As permitted by SFAS No. 123, Accounting for Stock-Based Compensation, the
Company accounts for employee stock based compensation in accordance with
Accounting Principles Board Opinion No. 25 ("APB 25"). Under APB 25,
compensation expense is calculated at the time of option grant based upon the
difference between the exercise prices of the option and the fair market value
of the Company's common stock at the date of grant recognized over the vesting
period. The Company had no stock-based compensation during 2002, 2001 and 2000.

REVENUE OVERVIEW

     The Company derives its revenue from three main lines of business - Seabulk
Offshore, Seabulk Tankers, and Seabulk Towing. Seabulk Offshore, the Company's
domestic and international offshore energy support business, accounted for
approximately 52.9% and 55.1% of Company revenue in 2002 and 2001, respectively.
Marine transportation under the new name, Seabulk Tankers, consists of (1) the
Company's Jones Act tanker business, in which it operates ten petroleum product
and chemical carriers in the U.S. coastwise trade, and (2) its inland tug and
barge operation and shipyard, Sun State Marine Services. Sun State's tug and
barge assets were sold in March 2002, and the shipyard assets were sold in July
2002. Together, they accounted for approximately 37.5% and 35.2% of Company
revenue in 2002 and 2001, respectively. Seabulk Towing, the Company's domestic
harbor and offshore towing business, accounted for approximately 9.6% and 9.7%
of the Company's 2002 and 2001 revenue, respectively.

SEABULK OFFSHORE

     Revenue from the Company's offshore energy support operations is primarily
a function of the size of the Company's fleet, vessel day rates or charter
rates, and fleet utilization. Rates and utilization are primarily a function of
offshore exploration, development, and production activities, which are in turn
heavily dependent upon the price of crude oil and natural gas. Further, in
certain areas where the Company conducts offshore energy support operations
(particularly the U.S. Gulf of Mexico), contracts for the utilization of
offshore energy support vessels commonly include termination provisions with
three- to five-day notice requirements and no termination penalty. As a result,
companies engaged in offshore energy support operations (including the Company)
are particularly sensitive to changes in market demand.

     As the Company's offshore energy support fleet gets older, the Company's
strategy is to look for opportunities to upgrade its offshore fleet to higher
value, newer vessels and to reduce the number of

                                       28

<PAGE>
older and smaller crewboats in its fleet. The Company sold 17 offshore energy
support vessels during 2002 for an aggregate total of $6.8 million and a gain of
approximately $55,000.

     Periods for collection of receivables in certain foreign areas of operation
in the offshore business tend to be longer than is usual for the United States.
The Company regularly monitors all such receivables accounts and believes that
it has accrued adequate reserves where necessary.

     The following table represents revenue for Seabulk Offshore by major
operating area as of December 31 (in thousands):

<Table>
<Caption>
                                                  YEAR ENDED DECEMBER 31,
                                      ------------------------------------------
                                        2002             2001             2000
                                      --------         --------         --------
<S>                                  <C>               <C>              <C>
Domestic(1) .................         $ 47,490         $ 83,686         $ 54,491
West Africa .................           84,576           69,305           48,268
Middle East .................           23,683           22,450           34,242
Southeast Asia ..............           15,730           15,737           14,394
                                      --------         --------         --------
Total .......................         $171,479         $191,178         $151,395
                                      ========         ========         ========
</Table>

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

                                       29

<PAGE>

     The following tables set forth, by primary area of operation, average day
rates achieved by the offshore energy fleet owned or operated by the Company and
average utilization for the periods indicated. Average day rates are calculated
by dividing total revenue by the number of days worked. Utilization percentages
are based upon the number of working days over a 365/366-day year and the number
of vessels in the fleet on the last day of the quarter.

<Table>
<Caption>
                                         -----------------------------------     ---------------------------------
                                                      Q1 2002                                  Q2 2002
                                          AHTS/     AHT/    Crew/      Other      AHTS/     AHT/    Crew/    Other
                                         Supply     Tugs   Utility               Supply     Tugs   Utility
                                         -----------------------------------     ---------------------------------
<S>                                     <C>        <C>     <C>        <C>      <C>         <C>      <C>      <C>
DOMESTIC(1)

Vessels(2)(3)(4)(8)(9)...............       24       --       30         2          21        --        31      2
Bareboat-out(4) .....................       --       --       --        --          --        --        --     --
Laid-Up .............................       --       --       --         1          --        --        --      1
Effective Utilization(5).............       59%      --       65%       --          63%       --        58%    --
Day Rate ............................   $6,687       --   $2,666        --      $6,005        --    $2,469     --


WEST AFRICA

Vessels(2)(3)(6)(7)(8)...............       29        5        7         1          30         5         6       1
Laid-Up .............................       --        1       --        --          --         1        --      --
Effective Utilization(5).............       84%      86%      89%       97%         85%       97%       84%     --
Day Rate.............................   $7,368   $6,613   $3,124        --      $8,042    $6,522    $2,722      --


MIDDLE EAST

Vessels(2) ..........................        6        8        8         5           6         8         8       5
Laid-Up .............................       --        1        1         1          --         1         1       1
Effective Utilization(5).............       83%      75%      81%       77%         79%       62%       85%     66%
Day Rate.............................   $3,265   $4,571   $1,649    $4,502      $3,250    $5,048    $1,668  $4,475


SOUTHEAST ASIA

Vessels(2)(7)(10)....................        8       --        5         2           8        --        --        2
Laid-Up .............................       --       --       --        --          --        --        --       --
Effective Utilization(5).............       59%      --       53%       44%         68%       --        --       --
Day Rate.............................   $5,510       --   $1,472        --      $6,320        --        --       --
</Table>

<Table>
<Caption>
                                         -----------------------------------     ---------------------------------
                                                      Q3 2002                                  Q4 2002
                                          AHTS/     AHT/    Crew/      Other      AHTS/     AHT/    Crew/    Other
                                         Supply     Tugs   Utility               Supply     Tugs   Utility
                                         -----------------------------------     ---------------------------------
<S>                                     <C>        <C>     <C>        <C>      <C>         <C>      <C>      <C>
DOMESTIC(1)(13)

Vessels(2)(3)(4)(8)(9)...............       21       --       31         2          21        --        28      2
Bareboat-out(4) .....................       --       --       --        --          --        --        --     --
Laid-Up .............................       --       --       --         1          --        --        --      1
Effective Utilization(5).............       63%      --       62%       --          65%       --        65%    --
Day Rate ............................   $5,581       --   $2,530        --      $5,252        --    $2,315     --


WEST AFRICA

Vessels(2)(3)(6)(7)(8)(12)...........       30        5        6         1          30         4         6       1
Laid-Up .............................       --        1       --        --          --        --        --      --
Effective Utilization(5).............       80%      87%      76%       --          79%       71%       68%     --
Day Rate.............................   $7,787   $6,234   $2,976        --      $7,316    $5,891    $2,878      --


MIDDLE EAST

Vessels(2)(11) ......................        6        8        8         5           6         7         7       5
Laid-Up(11)..........................       --        1        1         1          --        --        --       1
Effective Utilization(5).............       92%      49%      88%       65%         86%       71%       95%     57%
Day Rate.............................   $3,496   $4,556   $1,646    $4,181      $3,684    $3,991    $1,666  $4,197


SOUTHEAST ASIA

Vessels(2)(7)(10)....................        8       --       --         2           8        --        --        2
Laid-Up .............................       --       --       --        --          --        --        --       --
Effective Utilization(5).............       66%      --       --        --          61%       --        --       --
Day Rate.............................   $5,584       --       --        --      $6,484        --        --       --
</Table>
-------------------------------------

(1)  Domestic consists of vessels operating in the United States, the U.S. Gulf
     of Mexico and Mexico.

(2)  Held-for-sale and bareboat-out vessels are excluded from the vessel count.

(3)  During Q1 2002, two Anchor Handling Tug Supply Vessels were transferred
     from Domestic to West Africa.

(4)  During Q1 2002, a bareboat contract for one Geophysical Vessel in the
     Domestic operating region expired and the vessel was returned to the
     Company.

(5)  Effective utilization excludes laid-up vessels.

(6)  During Q1 2002, the Company reactivated one AHT from "held-for-sale"
     status. This vessel was placed into service in West Africa.

(7)  During Q1 2002, the Company reactivated one Anchor Handling Tug Supply
     Vessel from "held-for-sale" status and placed the vessel into service in
     Southeast Asia. Additionally during Q1 2002, the Company transferred one
     utility boat from Southeast Asia to West Africa.

(8)  During Q2 2002, two Anchor Handling Tug Supply Vessels were sold.
     Additionally during Q2 2002, the Company transferred one supply vessel to
     West Africa.

(9)  During Q2 2002, one Crewboat was returned to Domestic from Trinidad.

(10) During Q2 2002, five Crewboats in Southeast Asia were sold.

(11) During Q4 2002, two Anchor Handling Tugs and one Crewboat in the Middle
     East were sold.

(12) During Q4 2002, one Anchor Handling Tug in West Africa was sold.

(13) During Q4 2002, three Crewboats were moved to held-for-sale. They were
     subsequently sold in January 2003.

                                       30

<PAGE>

<Table>
<Caption>
                                         -----------------------------------     ---------------------------------
                                                      Q1 2001                                  Q2 2001
                                          AHTS/     AHT/    Crew/      Other      AHTS/     AHT/    Crew/    Other
                                         Supply     Tugs   Utility               Supply     Tugs   Utility
                                         -----------------------------------     ---------------------------------
<S>                                     <C>        <C>     <C>        <C>      <C>         <C>      <C>      <C>
DOMESTIC(1)

Vessels(2)(3)(4).....................       26       --       31         1          26        --        33      1
Bareboat-out(4) .....................       --       --        2         1          --        --         2      1
Laid-Up .............................        1       --       --         1           1        --        --      1
Effective Utilization(5).............       75%      --       87%       --          90%       --        87%    --
Day Rate ............................   $6,946       --   $2,709        --      $7,397        --    $2,929     --


WEST AFRICA

Vessels(2)(3)(6).....................       27        3        6         1          27         4         5       1
Laid-Up .............................       --       --       --        --          --        --        --      --
Effective Utilization(5).............       83%      46%      85%       --          86%       41%       77%     84%
Day Rate.............................   $6,325   $4,491   $2,754        --      $6,988    $5,528    $2,774  $6,160


MIDDLE EAST

Vessels(2)(3)(7).....................        5        8       11         7           5         8        11       7
Laid-Up..............................       --       --       --        --          --        --        --      --
Effective Utilization(5).............       77%      24%      66%       56%         92%       50%       59%     69%
Day Rate.............................   $3,003   $4,129   $1,421    $5,197      $2,855    $3,889    $1,434  $5,393


SOUTHEAST ASIA

Vessels(2)(6)(10)....................        8        1        5         1           8         1         5        1
Laid-Up .............................       --       --        1        --          --        --         1       --
Effective Utilization(5).............       87%      37%      89%       33%         83%       46%       73%      71%
Day Rate.............................   $5,347   $3,929   $1,429    $6,614      $4,277    $4,255    $1,443   $6,630
</Table>

<Table>
<Caption>
                                         -----------------------------------     ---------------------------------
                                                      Q3 2001                                  Q4 2001
                                          AHTS/     AHT/    Crew/      Other      AHTS/     AHT/    Crew/    Other
                                         Supply     Tugs   Utility               Supply     Tugs   Utility
                                         -----------------------------------     ---------------------------------
<S>                                     <C>        <C>     <C>        <C>      <C>         <C>      <C>      <C>
DOMESTIC(1)

Vessels(2)(3)(4).....................       26       --       32         1          26        --        32      1
Bareboat-out(4) .....................       --       --       --         1          --        --        --      1
Laid-Up .............................       --       --       --         1          --        --        --      1
Effective Utilization(5).............       83%      --       83%       --          63%       --        72%    --
Day Rate ............................   $7,486       --   $3,061        --      $7,141        --    $2,928     --


WEST AFRICA

Vessels(2)(3)(6)(8)..................       27        4        6         1          27         4         6       1
Laid-Up..............................       --       --       --        --          --        --        --      --
Effective Utilization(5).............       82%      63%      64%       84%         76%       86%       80%     96%
Day Rate.............................   $7,644   $6,097   $2,715    $7,363      $7,829    $8,041    $3,358  $9,246


MIDDLE EAST

Vessels(2)(3)(7)(9)(11)(12)..........        5        8        9         6           6         8         8       5
Laid-Up(12)..........................       --       --       --        --          --         1         1       1
Effective Utilization(5).............       86%      48%      65%       43%         81%       60%       86%     64%
Day Rate.............................   $2,954   $4,443   $1,611    $5,399      $3,121    $4,937    $1,671  $3,986


SOUTHEAST ASIA

Vessels(2)(6)(10)(11)................        8       --        6         2           7        --         6        2
Laid-Up .............................       --       --       --        --          --        --        --       --
Effective Utilization(5).............       79%      --       69%      100%         69%       --        51%      52%
Day Rate.............................   $4,762       --   $1,708    $8,298      $5,285        --    $1,674   $7,302
</Table>
-------------------------------------

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


(2)  Held-for-sale and bareboat-out vessels are excluded from the vessel count.

(3)  During Q1 2001, one AHTS, one supply boat, and one specialty vessel (Other)
     transferred from the Middle East to West Africa. During Q2 2001, the
     Company purchased a crewboat and transferred one vessel in the Crew/Utility
     category from Trinidad to Domestic.

(4)  Bareboat-out chartered vessels are not included in the day rate and
     utilization statistics. During Q3 2001, bareboat contracts for two
     crewboats in the Domestic operating region were terminated and the vessels
     were returned to the Company.

(5)  Effective utilization excludes laid-up vessels.

(6)  One vessel in the AHT/Tugs category worked in West Africa and Southeast
     Asia during Q2 2001 and earned sufficient revenue to be included in the
     statistics for both regions.

(7)  The Middle East - Other category includes a vessel that is in a 50/50 joint
     venture and not included in the day rate and utilization statistics.

(8)  During Q3 2001, one crewboat and one utility boat in Domestic region were
     transferred to "held-for-sale" status. Additionally, the Company
     transferred one crewboat from Domestic to West Africa. The reduction in the
     Domestic Crew/Utility vessel count was offset in part by the addition of
     two crewboats as bareboat-out contracts were terminated during Q3 2001.

(9)  During Q3 2001, the Company transferred one crewboat and one specialty
     vessel (Other) from the Middle East to Southeast Asia. Additionally, one
     crewboat was transferred to "held-for-sale" status.

(10) During Q3 2001, one crewboat and one specialty vessel (Other) were
     transferred from West Africa to Southeast Asia. Also, one vessel in the
     AHT/Tugs category that worked in West Africa and Southeast Asia during Q2
     2001 did not work in Southeast Asia during Q3. Additionally, the Company
     reactivated one crewboat from laid-up status during Q3 2001.

(11) During Q4 2001, one supply vessel was transferred from Southeast Asia to
     Middle East. Also, one vessel in the AHT/Tugs category that worked in West
     Africa and Southeast Asia during Q2 2001 did not work in Southeast Asia
     during Q3. Additionally, the Company reactivated one crewboat from laid-up
     status during Q3 2001.

(12) During Q4 2001, the Company transferred one crewboat to "held-for-sale"
     status. Additionally, three vessels were laid-up during Q4 2001.

                                       31

<PAGE>
<Table>
<Caption>
                                         -----------------------------------     ---------------------------------
                                                      Q1 2000                                  Q2 2000
                                          AHTS/     AHT/    Crew/      Other      AHTS/     AHT/    Crew/    Other
                                         Supply     Tugs   Utility               Supply     Tugs   Utility
                                         -----------------------------------     ---------------------------------
<S>                                     <C>        <C>     <C>        <C>      <C>         <C>      <C>      <C>
DOMESTIC(1)

Vessels(3)...........................       25       --       33         2          26        --        33      2
Bareboat-out(4) .....................       --       --        6         1          --        --         2      1
Laid-Up .............................        3       --        1         2           5        --         2      2
Effective Utilization(5).............       80%      --       79%       --          79%       --        81%    --
Day Rate ............................   $3,663       --   $1,894        --      $4,024        --    $1,921     --


WEST AFRICA

Vessels(3)...........................       24        4        5         1          25         4         5       1
Laid-Up .............................        2        1        1         1           2         1         1       1
Effective Utilization(5).............       85%      57%      53%       --          83%       60%       59%     --
Day Rate.............................   $5,304   $4,289   $2,450        --      $5,618    $5,200    $2,460      --


MIDDLE EAST

Vessels(6)...........................       24       21       29         8          21        21        29       8
Laid-Up..............................       10        5       15        --          10         5        12      --
Effective Utilization(5).............       62%      72%      69%       69%         83%       74%       61%     70%
Day Rate.............................   $2,899   $2,809   $1,373    $6,988      $2,995    $2,960    $1,446  $6,302


SOUTHEAST ASIA

Vessels..............................        9        2        5         2           9         2         5        2
Laid-Up .............................        3       --       --         1           2         1        --       --
Effective Utilization(4).............       49%       7%      46%       33%         90%       96%       66%      85%
Day Rate.............................   $4,031   $8,516   $1,540    $8,086      $4,358    $4,569    $1,549   $5,268
</Table>

<Table>
<Caption>
                                         -----------------------------------     ---------------------------------
                                                      Q3 2000                                  Q4 2000
                                          AHTS/     AHT/    Crew/      Other      AHTS/     AHT/    Crew/    Other
                                         Supply     Tugs   Utility               Supply     Tugs   Utility
                                         -----------------------------------     ---------------------------------
<S>                                     <C>        <C>     <C>        <C>      <C>         <C>      <C>      <C>
DOMESTIC(1)

Vessels(2)(3)........................       26       --       31         2          26        --        32      2
Bareboat-out(4) .....................       --       --        2         1          --        --         2      1
Laid-Up .............................        3       --       --         2           2        --        --      2
Effective Utilization(5).............       76%      --       86%       --          68%       --        86%    --
Day Rate ............................   $4,821       --   $2,117        --      $6,174        --    $2,403     --


WEST AFRICA

Vessels(3)...........................       26        4        6         1          26         4         6       1
Laid-Up .............................        1        2        1         1           1         2         1       1
Effective Utilization(5).............       85%      81%      62%       --          87%       95%       84%     --
Day Rate.............................   $5,887   $5,122   $2,809        --      $5,820    $5,103    $2,978      --


MIDDLE EAST

Vessels(6)...........................       18       21       24         8          12        16        19       8
Laid-Up..............................       10        6       12        --           6         5         8      --
Effective Utilization(5).............       83%      50%      61%       55%         69%       45%       63%     55%
Day Rate.............................   $2,634   $3,345   $1,483    $5,510      $3,544    $3,841    $1,543  $5,669


SOUTHEAST ASIA

Vessels..............................       10        2        5         2          10         2         5        2
Laid-Up .............................        2        1       --        --           2         1        --       --
Effective Utilization(4).............       85%      60%      69%       83%         68%       41%       83%      61%
Day Rate.............................   $3,765   $7,364   $1,330    $5,474      $5,380    $4,775    $1,655   $5,085
</Table>
-------------------------------------

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

(2)  One vessel was sold in Q4 2000 from the Crew/Utility category. Since the
     vessel earned substantial revenue during the quarter, it was included in
     the statistics.

(3)  One vessel in the Crew/Utility category changed reporting area from
     Domestic to West Africa after Q2 2000. The statistics reflected this move.

(4)  Bareboat-out chartered vessels are not included in the day rate and
     utilization statistics.

(5)  Effective utilization excludes laid-up vessels.

(6)  The Middle East-AHT/Tugs and Other categories include a vessel that is a
     44-foot harbor tug and in a 50/50 joint venture, respectively, which are
     not included in the day rate and utilization statistics.

                                       32

<PAGE>

     Domestic revenue for 2002 was adversely affected by the slowdown in natural
gas drilling activity in the U.S. Gulf of Mexico as a result of somewhat lower
natural gas prices and high inventories. The lower level of natural gas prices
resulted from above-average inventory buildups and reduced demand due to one of
the mildest winters on record in 2001/2002 and a general slowdown in economic
activity. Exploration and production companies in the U.S. Gulf of Mexico
responded by cutting back their level of spending as evidenced by the
significant drop in offshore rig fleet utilization rates during the last half of
calendar year 2001 and in 2002. Although there is still uncertainty in the
market, the rise in both crude oil and natural gas prices that began in the
fourth quarter of 2002, driven by concern over a potential Middle East conflict,
the temporary shutoff of Iraqi and Venezuelan imports, dwindling inventories of
both crude oil and natural gas as the winter of 2002/2003 turned out to be much
colder than expected, and other factors, should eventually aid a recovery in the
Gulf of Mexico offshore vessel market.

     As the demand for vessels in the domestic market is primarily driven by
natural gas exploration and production, it is difficult to predict what effect
the current high level of natural gas prices and the uncertainty in the economic
environment will have on demand for the Company's vessels in the domestic
market. In the meantime, the Company is exploring charter opportunities in
Mexico which remains a healthy market. As noted earlier, however, we anticipate
an eventual upturn in offshore drilling activity and hence in the demand for our
vessels.

     The outbreak of war in Iraq in March 2003 is a further complicating factor,
although it is not expected to have a material impact on the Company's
operations. Depending on the length of the conflict, the cessation of
hostilities is expected to produce a measure of moderation and stability in
commodity prices and may eventually lead to the opening of the Iraqi market to
U.S. companies.

     International offshore revenues for 2002 benefited from increases in vessel
count and utilization. In West Africa, the demand for vessels, and hence
utilization, remained strong as this is an oil-driven market with longer time
horizons and increasing exploration and production budgets primarily from oil
company majors. The Company redeployed five vessels to its West African
operations during 2002.

     International vessel demand is primarily driven by crude oil production.
During the fourth quarter crude oil prices and demand remained firm. The Company
expects international exploration and production spending to continue to
increase in West Africa, which should strengthen vessel demand in that area.
Revenue and utilization were also up for the Company's Middle East operations.
In Southeast Asia, revenue remained substantially the same as the year-earlier
period.

     Average day rates and utilization for the Company's anchor handling tug
supply vessels and supply boats at March 1, 2003 for Domestic, West Africa, the
Middle East and Southeast Asia were approximately $5,500/33%, $6,800/81%,
$3,200/100% and $5,800/63%, respectively.

     The Company had five offshore vessels in "held-for-sale" status as of
December 31, 2002. The majority of these vessels were previously laid up.
Subsequent to December 31, 2002, the Company sold three crewboats in the
held-for-sale category.

SEABULK TANKERS

     Revenue from the Company's marine transportation services is derived
principally from the operations of 10 tankers carrying crude oil, petroleum
products and chemical products in the Jones Act trade and, to a lesser extent,
from the Sun State towboat and fuel barge operations in Green Cove Springs,
Florida, which were sold in March 2002.

                                       33

<PAGE>

     The Company's tanker fleet operates on either long-term time charters,
bareboat charters, or pursuant to contracts of affreightment. The Company
currently has six tankers operating under long-term charters, three on contracts
of affreightment and one under a bareboat charter.

     The following table sets forth the number of vessels and revenue for the
Company's petroleum and chemical product carriers:

<Table>
<Caption>
                                                     YEAR ENDED DECEMBER 31,
                                               ---------------------------------
                                                  2002        2001      2000(1)
                                               ---------    --------   ---------
<S>                                            <C>          <C>        <C>
Number of vessels owned at end of period ...          10          10          10
Revenue (in thousands) .....................    $117,486    $112,694    $126,670
</Table>

(1)  During 2000, the Company scrapped one tanker that was at the end of its OPA
     90-mandated useful life and terminated a charter-in contract for another
     tanker.

     Tanker revenue increased by 4.3% in 2002 as a result of improved rates for
the Company's three chemical carriers operating under contracts of
affreightment, as well as higher rates on the long-term time charters.

     Petroleum Tankers. Demand for crude oil and petroleum product
transportation services is dependent both on production and refining levels as
well as on consumer and commercial consumption of petroleum products and
chemicals. The Company owned eight petroleum product tankers at December 31,
2002. Five of these are double-hull, state-of-the-art vessels, of which two have
chemical-carrying capability. At the end of December 2001, voyage charters for
three vessels expired and were replaced by two multi-year time charters at time
charter-equivalent rates 55% above the returns achieved for these vessels in
2001. For the third vessel, the Company entered into a ten-year bareboat charter
agreement with a major oil company. Beginning in January 2002, the oil company
charterer has exclusive possession and control of the vessel and is responsible
for all operating and drydocking expenses of the vessel. The Company also
entered into a time charter securing a fourth vessel, in the fourth quarter of
2001 at a 25% increase over the expiring rate. In the third quarter of 2002, a
vessel previously trading under a voyage charter entered into a three-year time
charter with a major oil company, and two of our existing time charters were
extended through July 10, 2010. Under a time charter, fuel and port charges are
borne by the charterer customer and are therefore not reflected in the charter
rates. Consequently, both the revenue and cost side of time charter vessels are
reduced by the amount of the fuel and port charges. Our Jones Act fleet is
benefiting from a tightening domestic tanker market, which should see a further
strengthening as OPA 90 forces out older, single-hull vessels. None of our
single-hull vessels is scheduled for retirement under OPA 90 before 2007.

     Chemical Tankers. Demand for industrial chemical transportation services
generally coincides with overall economic activity. The Company operated two
chemical tankers and one of the five double-hull vessels in the chemical trade
as of December 31, 2002. The chemical tankers are double-bottom ships. The
higher day rate environment for petroleum tankers is carrying over into the
chemical tanker market as charterers look for quality tonnage to replace older
single-hull vessels.

     Inland Tugs and Barges. Revenue from the Company's Sun State Marine
Services subsidiary was derived primarily from contracts of affreightment with
Colonial Oil Industries (formerly known as Steuart Petroleum Co.) and Florida
Power & Light (FPL) and from ship maintenance, repair, drydocking and
construction activities. Revenue from all of Sun State's operations totaled $3.9
and $9.4 million, respectively, for the year ended December 31, 2002 and 2001.
The decrease in Sun State revenue is due to the sale of its marine
transportation tug and barge assets in March 2002. In July 2002, the Company
also closed on the sale of drydock and related shipyard equipment of Sun State
for $450,000, resulting in a gain of approximately $88,000.

                                       34

<PAGE>

SEABULK TOWING

     Revenue derived from the Company's tug operations is primarily a function
of the number of tugs available to provide services, the rates charged for their
services, the volume of vessel traffic requiring docking and other ship-assist
services and competition. Vessel traffic, in turn, is largely a function of the
general trade activity in the region served by the port.

     The following table summarizes certain operating information for the
Company's tugs.

<Table>
<Caption>
                                                  YEAR ENDED DECEMBER 31,
                                           -------------------------------------
                                              2002          2001          2000
                                           ----------     --------       -------
<S>                                        <C>            <C>            <C>
Number of tugs at end of period ......            31            31            33
Towing revenue (in thousands) ........       $31,147       $33,493       $33,106
</Table>

     Towing revenue decreased 7% to $31.1 million in 2002 from $33.5 million in
2001 primarily due to reduced vessel traffic in certain of the Company's ports
reflecting the slowdown in international trade, increased competition, and
reduced demand for towing services in the offshore market.

     The Company has been the sole provider of docking services in Port
Canaveral, the smallest of its harbor towing markets. As a result of the recent
proceeding before the Federal Maritime Commission, the Company may soon have a
competitor in Port Canaveral.

OVERVIEW OF OPERATING EXPENSES AND CAPITAL EXPENDITURES

     The Company's operating expenses are primarily a function of fleet size and
utilization. The most significant expense categories are crew payroll and
benefits, depreciation and amortization, fuel, maintenance and repairs, and
insurance. During periods of decreased demand for vessels, the Company
temporarily ceases using certain vessels, i.e., lays up vessels, to reduce
expenses for marine operating supplies, crew payroll and maintenance. At
December 31, 2002, seven of the Company's offshore energy support vessels were
laid up or held for sale.

     The crews of Company-manned chemical and product tankers are paid on a
time-for-time basis under which they receive paid leave in proportion to time
served aboard a vessel. The crews of offshore energy support vessels and certain
tugs and towboats are paid only for days worked.

        The Company provides for depreciation on a straight-line basis over the
estimated useful lives of the related assets. OPA 90 mandates the useful life
of the Company's product and chemical carriers, except for the five double-hull
carriers.

     The Company overhauls main engines and key auxiliary equipment in
accordance with a continuous planned maintenance program. Under applicable
regulations, the Company's chemical and product carriers and offshore service
vessels and its four largest tugs are required to be drydocked twice in each
five-year period for inspection and routine maintenance and repairs. These
vessels are also required to undergo special surveys every five years involving
comprehensive inspection and corrective measures to insure their structural
integrity and the proper functioning of their cargo and ballast tanks and
piping systems, critical machinery and equipment, and coatings. The Company's
harbor tugs generally are not required to be drydocked on a specific schedule.
During the years ended December 31, 2002, 2001 and 2000, the Company drydocked
54, 66 and 62 vessels, respectively, at an aggregate cost (exclusive of lost
revenue) of $23.4 million, $29.4 million and $14.4 million, respectively. The
Company

                                       35

<PAGE>

accounts for its drydocking costs under the deferral method, under which
capitalized drydocking costs are expensed over the period preceding the next
scheduled drydocking. See Note 2 to the Company's consolidated financial
statements.

     The Company had capital expenditures, including drydocking costs, in the
years ended December 31, 2002, 2001 and 2000 of $27.2 million, $38.7 million and
$26.4 million, respectively.

     The cost of fuel is an item which has significant impact on the Company's
operating results. Its cost was relatively stable in 2002, but has risen
considerably during the first quarter of 2003. During 2002 fuel and consumables
costs represented approximately 15.5% of operating costs.

     Insurance costs consist primarily of premiums paid for (i) protection and
indemnity insurance for the Company's marine liability risks, which are insured
by a mutual insurance association of which the Company is a member and through
the commercial insurance markets; (ii) hull and machinery insurance and other
maritime-related insurance, which are provided through the commercial marine
insurance markets; and (iii) general liability and other traditional insurance,
which is provided through the commercial insurance markets. Insurance costs,
particularly costs of marine insurance, are directly related to overall
insurance market conditions and industry and individual loss records, which vary
from year to year.

     The increase in P&I costs due to higher deductibles and higher self insured
retention levels will likely cause an increase in P&I insurance expense in 2003
of between $1.5 million and $2.5 million. Premiums by both marine and non-marine
insurers have been adversely impacted by the erosion of claims reserves
(including our underwriters), claims underwriting losses and increased
reinsurance costs, as well as our own loss experience. No assurance can be given
that affordable and viable direct and reinsurance markets will be available to
us in the future. We maintain high levels of self-insurance for P&I and hull and
machinery risks through the use of substantial deductibles and self insured
retentions which may increase in the future. We carry coverage related to loss
of earnings on revenues subject to fourteen day deductibles, for our tanker
operations, but not for our offshore and tug operations. Insurance costs
represented approximately 6.2% of operating costs in 2002.

                                       36

<PAGE>
RESULTS OF OPERATIONS

     The following table sets forth certain selected financial data and
percentages of net revenue for the periods indicated:

<Table>
<Caption>
                                                                               YEAR ENDED DECEMBER 31,
                                                            ---------------------------------------------------------------
                                                                   2002                   2001                  2000
                                                            -------------------    ------------------    ------------------
                                                                               (DOLLARS IN MILLIONS)
<S>                                                         <C>         <C>        <C>         <C>        <C>         <C>
Revenue ................................................    $ 324.0      100.0%    $ 346.7     100.0%     $ 320.5     100.0%
Operating expenses .....................................      182.6       56.0%      199.3      57.0%       205.2      64.0%
Overhead expenses ......................................       38.6       12.0%       37.0      11.0%        39.6      12.0%
Depreciation, amortization, drydocking and other .......       66.4       21.0%       61.3      18.0%        50.3      16.0%
                                                            -------    --------    -------     ------     -------      -----
Income from operations .................................    $  36.4       11.0%    $  49.1      14.0%     $  25.4       8.0%
                                                            =======    ========    =======     ======     =======      =====

Interest expense, net ..................................    $  44.2       14.0%    $  55.7      16.0%     $  62.0      19.0%
                                                            =======    ========    =======     ======     =======      =====

Other income (expense), net ............................    $   1.4        0.0%    $  (0.2)      0.0%     $  12.6       4.0%
                                                            =======    ========    =======     ======     =======      =====

Net loss before income taxes and extraordinary item.....    $  (6.4)     (2.0)%    $  (6.8)    (2.0)%     $ (24.0)     (8.0)%
                                                            =======    ========    =======     ======     =======      =====
Net loss ...............................................    $ (38.9)   $(12.0)%    $ (12.0)    (3.0)%     $ (29.0)     (9.0)%
                                                            =======    ========    =======     ======     =======      =====
</Table>

2002 COMPARED WITH 2001

     Revenue. Revenue decreased 6.6% to $324.0 million for 2002 from $346.7
million for 2001 due to decreased revenue from the Company's offshore energy
support segment.

     Offshore energy support revenue decreased 10.3% to $171.5 million for 2002
from $191.2 million for the same period in 2001, primarily due to reduced
revenue from the U.S. Gulf of Mexico. This was offset in part by higher revenue
from the West Africa operating region. Revenue from the U.S. Gulf of Mexico
decreased during 2002 compared to the same period in 2001 primarily due to
reduced exploration and production activity in response to average natural gas
prices, high inventories and reduced demand for energy. The increase in West
Africa revenue was driven by higher day rates and an expanded vessel count as
offshore exploration and production activity remained strong. The Company took
advantage of the expanding West Africa market by (1) mobilizing three of its
Gulf of Mexico supply boats and one Southeast Asia utility boat for redeployment
to West Africa and (2) reactivating one anchor-handling tug from "held-for-sale"
status to active status in West Africa during the first half of 2002.

     Marine transportation revenue remained substantially the same at $121.4
million for 2002 as compared to $122.1 million for 2001. Tanker revenue
increased by 4.3% as a result of improved rates for the Company's three chemical
carriers operating under contracts of affreightments, as well as better rates on
long-term time charters. This was offset by a decrease in revenue for Sun State
as a result of discontinuing operations in March 2002.

                                       37

<PAGE>

     Towing revenue decreased by 7.0% to $31.1 million for 2002 from $33.5
million for 2001. The decrease in revenue was due to reduced vessel traffic in
certain of the Company's ports, reflecting the slowdown in international trade,
as well as reduced demand for towing services in the offshore market.

     Operating Expenses. Operating expenses decreased 8.4% to $182.6 million
from $199.3 million for 2001 primarily due to the change from voyage charters to
time charters for two tankers, the bareboat charter of a third tanker, and the
sale of Sun State's marine transportation assets in the first quarter. Since two
tankers were changed from voyage charters to time charters in 2002, fuel and
port charges significantly decreased as these expenses are the responsibility of
the charterer under time charters. Under a bareboat contract, the charterer is
responsible for crewing and operating the vessel. Operating expenses for 2001
were also adversely affected by a $4.1 million charge reflecting current and
anticipated investment losses sustained by the Company's protection and
indemnity marine insurance club.

     Overhead Expenses. Overhead expenses increased 4.5% to $38.7 million in
2002 as compared to $37.0 million for the same period in 2001. The increase was
primarily due to an increase in insurance expenses as a result of purchasing a
$1.2 million D&O policy for the departing Board members due to the
recapitalization in September 2002. Other overhead also increased due to higher
bad debt reserve in our West African operations. As a percentage of revenue,
overhead expenses increased to 11.9% for 2002 compared to 10.8% for the same
period in 2001.

     Depreciation, Amortization, Drydocking and Other Expenses. Depreciation,
amortization, drydocking and other expenses increased 8.3% to $66.4 million for
2002 from $61.3 million for 2001, primarily due to higher planned drydocking
expenditures for offshore energy support vessels and tankers during the second
half of 2001 and in 2002. As a result, drydock amortization expense is also
higher as drydock costs are amortized on a straight-line basis over the period
to the next drydocking (generally 30 months).

     Net Interest Expense. Net interest expense decreased 20.5% to $44.2 million
for 2002 from $55.7 million for the same period in 2001. The decrease was
primarily due to the combination of lower interest rates on variable rate debt
and lower outstanding debt balances under our term loans and revolving credit
facility. Interest expense also decreased as a result of the recapitalization in
September 2002 (see Note 3 to the Company's consolidated financial statements).
The interest rate on the New Credit Facility is substantially less than the rate
on the Company's Senior Notes, which were redeemed on October 15, 2002. In
November 2002, the interest rate under the New Credit Facility was increased by
100 basis points (1%) in accordance with the terms of the commitment letter with
the lending banks to syndicate the New Credit Facility by November 13, 2002.

     Other Income, Net. Other income, net increased to $1.4 million in 2002
compared to other expense of ($0.2) million in 2001. This increase in other
income is primarily due to a gain on asset sales in 2002 of $1.4 million.

2001 COMPARED WITH 2000

     Revenue. Revenue increased 8.2% to $346.7 million for 2001 from $320.5
million for 2000 primarily due to increased revenue from the Company's offshore
energy support segment offset in part by decreased revenue from the Company's
marine transportation segment.

     Offshore energy support revenue increased 26.3% to $191.2 million for 2001
from $151.4 million for 2000 primarily due to the significant increases in day
rates for both supply and crew boats in the Gulf of Mexico and West Africa
operating regions offset in part by decreased revenue from the Middle East

                                       38

<PAGE>

region. Additionally, the Company purchased two crewboats in December 2000 and
May 2001 and placed those vessels into service in the Gulf of Mexico. During the
first eight months of 2001, day rates and utilization for all vessels working in
the Gulf of Mexico rose due to increased exploration and production activities.
During the last four months of 2001, day rates and utilization for the Company's
Gulf of Mexico-based vessels decreased as drilling activity fell sharply on the
heels of lower natural gas prices and reduced energy demand. Nevertheless, the
strong first half of fiscal 2001 resulted in a significant increase in full-year
revenue for the Gulf of Mexico operating region. In the West Africa operating
region, average day rates rose across all vessel classes and utilization
remained strong throughout 2001 as the market continued to expand in what is
primarily an oil-driven, deepwater business. The Company mobilized two of its
Gulf of Mexico-based supply boats for redeployment to West Africa during the
first quarter of 2002. The decline in Middle East revenue in 2001 is
attributable to fewer vessels (average of 72 vessels in 2000 compared to 30
vessels in 2001) as the Company sold a significant number of underperforming
vessels that were working in the Middle East region in 2000 and 1999. The
reduction in the number of vessels working in the Middle East is a direct result
of the lack of profitability stemming from production cutbacks by the
Organization of Petroleum Exporting Countries. During 2001, a total of 25
offshore energy support vessels were sold, most of which were based in the
Middle East.

     Marine transportation services revenue decreased $13.9 million, or 10.2%,
to $122.1 million for 2001 from $136.0 million for 2000. This decrease was
primarily due to the mandated retirement of one of the Company's Jones Act
tankers in the third quarter of 2000 and the termination of the Company's
chartering-in of one tanker in the first quarter of 2000 through October 2000.
Total 2000 revenue relating to the two additional tankers amounted to $14.5
million. The decrease from the two tankers was offset in part by increased
transportation activity with tankers working under various voyage contracts.

     Towing revenue increased 1.2% to $33.5 million in 2001 from $33.1 in 2000
primarily due to increased port activity during the fourth quarter of 2001.

     Operating Expenses. Operating expenses decreased 2.9% to $199.3 million
from $205.2 million for 2000 primarily due to the lease termination and
retirement of two tankers and the change of three tankers from spot trading to
time charters in the Company's marine transportation services operations. This
decrease was offset in part by higher crew salaries and benefits and consumables
and supplies expenses in offshore energy support operations. Total 2000
operating expenses (primarily charter hire, fuel and port charges) relating to
the two tankers noted above amounted to $13.6 million. Since three tankers were
changed from spot trading to time charters in 2001, fuel and port charges
significantly decreased as these expenses are the responsibility of the
charterer under time charters. Operating expenses for 2001 were also adversely
affected by a $4.1 million charge reflecting current and anticipated investment
losses sustained by the Company's protection and indemnity marine insurance
club. The increase in offshore crew salaries and benefits was primarily due to
additional maritime staff resulting from (1) purchase of two crewboats in
December 2000 and May 2001, (2) termination of a bareboat-out contract for two
crewboats and (3) increased utilization of vessels in the Gulf of Mexico and
West Africa. Under a bareboat contract, the charterer is responsible for crewing
and operating the vessel. Additionally, expenses for consumables and supplies
increased in the West Africa operating region due to increased operating
activity.

     In November 2001, the Company entered into a three-year e-procurement
contract with an outside vendor. The contract consolidated the purchasing
activity of the Company's three segments into one common platform and standard.
Additionally, the contract included spare parts and consumable data base
rationalization to reduce on-board and warehouse inventory and procurement
costs, automated tendering to increase competitive quoting, sourcing
enhancements to increase the number of qualified suppliers quoting, automated
contract management to increase utilization of pre-negotiated contracts, and

                                       39

<PAGE>

automated supplier connectivity via the Internet to reduce transaction cost and
time. Management expects that the contract will be a significant step toward our
ongoing efforts to further reduce various operating costs such as supplies and
consumables, and maintenance and repair. However, management cannot estimate the
amount of the savings at this time.

     Overhead Expenses. Overhead expenses decreased 6.6% to $37.0 million in
2001 from $39.6 million for 2000 primarily due to a decrease in professional
fees and other overhead expenses offset in part by increases in salaries and
benefits. Higher headcount and related salary expense for corporate activity
resulted in savings on third-party consulting fees and services. The decrease in
other overhead expenses is primarily due to lower charges for rent and other
miscellaneous items as a result of the elimination of non-essential services and
consolidation of administrative functions.

     Depreciation, Amortization, Drydocking and Other Expenses. Depreciation,
amortization, drydocking and other expenses increased 22.0% to $61.3 million in
2001 from $50.3 million in 2000 primarily due to higher planned drydocking
expenditures for offshore energy support vessels and tankers and the write-down
of the book value of vessels and equipment and deferred drydocking costs of Sun
State Marine Services, Inc. Drydocking amortization expense increased 117.1% to
$14.7 million in 2001 from $6.8 million in 2000. In response to increased
activity in the offshore energy support segment in 2001, the Company increased
the level of drydocking expenditures. Additionally, the Company had to drydock
five tankers in 2001. Tanker drydocking expenditures are generally higher than
expenditures for offshore vessels and tugs.

     During the fourth quarter of fiscal 2001, management decided to sell the
fixed assets (mostly tug barges) of Sun State Marine Services, Inc. The sale of
the tug and barge assets was consummated in March 2002. The shipyard assets were
sold in July 2002. Upon reclassifying Sun State's assets to assets held for
sale, management considered recent appraisals, offers and bids and its estimate
of future cash flows related to the fixed assets. As a result, the Company
recorded a write-down of $1.4 million.

     Income from Operations. Income from operations increased 93.6% to $49.1
million in 2001 compared to $25.4 million in 2000 as a result of higher day
rates in the Company's offshore energy support business and lower operating and
overhead expenses.

     Net Interest Expense. Net interest expense decreased 10.2% to $55.7 million
in 2001 from $62.0 million in 2000 primarily due to lower interest rates on
variable rate debt and lower outstanding balances under our term loans and
revolving credit facility. The Eurodollar Rate for the term loans and revolving
line of credit decreased from 6.7% at December 31, 2000 to 1.9% at December 31,
2001. The decline in the Eurodollar Rate resulted from the series of interest
rate cuts by the Federal Reserve and the general slowdown of the global economy
during 2001. This decrease was offset in part by interest expense on additional
borrowings in 2001 for the remaining 24.25% interest in the five double-hull
tankers and the purchase of two crewboats (financed through borrowings under the
Company's revolving line of credit).

     Other Income (expense). Other expense totaled $(0.2) million in 2001
compared to other income of $12.6 million in 2000. The decrease in other income
was primarily due to a net loss of $(0.1) million on vessel sales in 2001
compared to a net gain of $3.9 million on vessel sales and a $7.0 million
favorable settlement of a disputed liability in 2000.

     Net Loss. The Company's net loss decreased 58.7% to $12.0 million in 2001
from $29.0 million for 2000 as a result of higher revenue and lower operating
and interest expenses. The provision for income taxes increased from $4.8
million in 2000 to $5.2 million in 2001 primarily due to higher foreign revenue.
As of December 31, 2001 and 2000, management believes that it was more likely
than not that

                                       40

<PAGE>

the deferred tax assets would not be realized. Therefore, a full valuation
allowance is recorded reducing the net deferred tax assets to zero.

LIQUIDITY AND CAPITAL RESOURCES

     At December 31, 2002, the Company had working capital of approximately
$26.3 million. Day rates and utilization for offshore vessels working in the
Gulf of Mexico continued to be weak, a trend that began in September 2001. The
slowdown in the domestic offshore market was offset in part by continued
strength in the Company's international offshore operations, where day rates
remained strong during the year and contributed to increased revenue in West
Africa and the Middle East, and in part by the improved performance of the
marine transportation segment. The increased revenue in the offshore business in
West Africa and the Middle East was driven by exploration and production
spending as major oil companies continued to proceed with oil exploration and
development programs outside the U.S. Since the September 11, 2001 attacks, the
subsequent war on terrorism and then commencement of the war in Iraq, the U.S.
economy continues to be subject to pressure. As we enter 2003, the timing of a
recovery in the domestic offshore segment is still not certain. However, the
increases in oil and natural gas prices during the fourth quarter of 2002 and
the early part of 2003 reinforce the potential for an upturn in domestic
exploration and development activity in the latter half of 2003. We do expect
earnings in 2003 from the offshore segment to improve compared to 2002. The
Company also expects to benefit in 2003 from higher earnings in its marine
transportation business as a result of a full year of higher time charter rates
for certain tankers.

     The Company's capital requirements arise primarily from its need to service
debt, fund working capital and maintain and improve its vessels. The Company
anticipates capital requirements for debt service, vessel maintenance and fleet
improvements in 2003 to total approximately $98 million and expects that cash
flow from operations will continue to be a significant source of funds for its
working capital and capital requirements.

    The Company's credit agreement contains certain restrictive financial
covenants that among other things requires minimum levels of EBITDA and
tangible net worth. The Company is in compliance with such covenants at
December 31, 2002 and expects to be in compliance through the balance of 2003
based on current financial projections. However, the Company's financial
projections contain assumptions with respect to economic recovery beginning in
the second quarter of 2003 in the underperforming U.S. Gulf offshore market. If
the economic recovery does not occur or occurs later or to a lesser extent than
the current forecast, the Company will need to reduce operating expenses to
maintain compliance.

    Management continues implementation of certain initiatives in an effort to
improve profitability and liquidity. These initiatives include (1) selective
acquisitions and charters of additional vessels, (2) repositioning certain
vessels to take advantage of higher day rates, (3) selling unprofitable vessels,
and (4) eliminating non-essential operating and overhead expenses. Management
believes that its expense reduction initiatives will be sufficient to meet its
financial covenants if the forecasted U.S. Gulf is other than expected.

     Management recognizes that unforeseen events or business conditions,
including unexpected deterioration in its markets, could prevent the Company
from having sufficient liquidity to fund its operation or meeting targeted
financial covenants.

        If unforeseen events or business conditions prevent the Company from
having sufficient liquidity to fund its operations, the Company has alternative
sources including additional asset sales, and deferral of capital expenditures,
which should enable it to satisfy essential capital requirements. If the
Company does not meet its financial covenants, the Company  would be required
to seek an amendment or waiver to avoid default. While the Company believes it
could successfully implement alternative plans, if necessary, there can be no
assurance that such alternatives would be available or that the Company would
be successful in their implementation.

     Recapitalization. On September 13, 2002, the Company completed the private
placement of 12.5 million shares of newly issued Seabulk common stock at a cash
price of $8.00 per share (the "Private Placement") to a group of investors
including an entity associated with DLJ Merchant Banking Partners III, L.P., an
affiliate of CSFB Private Equity, and entities associated with
Carlyle/Riverstone Global Energy and Power Fund I, L.P., an affiliate of The
Carlyle Group of Washington, D.C. The stock issuance was previously approved by
the Company's shareholders at a Special Meeting held on September 5, 2002.

     The new investors also purchased, for $8.00 per share, 5.1 million of the
Company's common stock and common stock purchase warrants previously
beneficially owned by accounts managed by Loomis, Sayles & Co., L.P., an
SEC-registered investment advisor. Taken together, the two transactions give the
new investors approximately 76% of the Company's outstanding common stock.
Pursuant to the agreement with the investors, the Company's Board of Directors
has been restructured to permit the new investors to hold a majority of seats on
the Board.

     On September 13, 2002, the Company completed an agreement with Fortis
Capital Corp. and NIB Capital Bank N.V., as arrangers, for a $180 million senior
secured credit facility (the "New Credit Facility"), which replaced the
Company's existing facility. The New Credit Facility consists of an $80 million
term loan and a $100 million revolving credit facility and has a five-year
maturity.

        The revolving portion of the New Credit Facility is subject to
semi-annual reductions commencing six months after closing. The principal
reductions on the revolving loan are as follows: $10 million each in 2003 and
2004, $20 million in 2005, $25 million in 2006, and $33.7 million in 2007. The
term loan portion is subject to semi-annual reductions commencing 36 months
after closing. The principal reductions on the term loan are as follows: $2.5
million in 2005, $14.5 million in 2006, and $63 million in 2007. Interest on
the loans is payable monthly, with a variable interest rate. The rate is either
a LIBOR or base rate plus a margin based upon certain financial ratios of the
Company (5.42% and 5.92% for the revolving loan and term loan, respectively, at
December 31, 2002). In November 2002, the interest rate under the New Credit
Facility was increased by 100 basis points (1%) in accordance with the terms of
the commitment letter with the lending banks to syndicate the New Credit
Facility by November 13, 2002.

     The New Credit Facility is secured by first ship mortgages on substantially
all of the Company's vessels (excluding vessels financed with U.S. Maritime
Administration Title XI financing) and is guaranteed by most of the subsidiaries
of the Company. The New Credit Facility is also secured by second ship mortgages
on two of the Company's tankers and three of the Company's tugs.

     The New Credit Facility is subject to various financial covenants,
including minimum adjusted tangible net worth requirements, minimum ratios of
adjusted EBITDA to adjusted interest expense, and a maximum ratio of adjusted
funded debt to adjusted EBITDA. The Company is required to maintain a minimum
fair market value of collateralized assets of at least 175% of outstanding
borrowings under the New Credit Facility, based upon appraisals which may be
requested not more than once during any 12-month period.

     In November 2002, the Company and the lending banks entered into Amendment
No. 1 to the Credit Agreement which permitted the Company to change the
commercial and technical managers of its vessels to different Company
subsidiaries and to transfer ownership of its vessels to different subsidiaries
of the Company as part of the Company's reorganization into more distinctive
business groups.

                                       41

<PAGE>

     Proceeds from the Private Placement and New Credit Facility of
approximately $266.1 million, net of $12.7 million of fees and expenses of the
transaction, were used primarily to repay the Company's prior bank debt of
approximately $151.5 million and redeem its outstanding Senior Notes for
approximately $101.5 million.

     On September 13, 2002, the Company deposited $101.5 million to State Street
Bank & Trust as Paying Agent for the redemption of the Senior Notes. As a
result, the Company was released and discharged from all of its obligations
under the Notes and they were effectively discharged at that date. The Senior
Notes were administratively discharged on October 15, 2002.

     Cash Flows. Net cash provided by operating activities totaled $61.1 million
for the year ended December 31, 2002 compared to $66.8 million for the same
period in 2001. The decrease in cash provided by operating activities was the
result of an increase in net loss before extraordinary item of $1.4 million from
2001 to 2002, as well as a reduction in accounts payable in 2002.

     Net cash used in investing activities was $14.5 million for the year ended
December 31, 2002 compared to $31.8 million for the same period in 2001. The
reduction of cash used in investing activities was due primarily to a larger
amount of proceeds from asset sales. In particular, in March 2002, the Company
closed on the sale of the towboat/barge assets of Sun State for $3.9 million in
cash. In addition, there were higher planned drydock expenditures in 2001 as
compared to 2002.

     Net cash used in financing activities for the year ended December 31, 2002
was $21.0 million compared to $37.6 million for the same period in 2001. The
decrease in cash used in financing activities is attributable to excess cash
generated from the recapitalization and refinancing completed in September 2002.

     Recent Expenditures and Future Cash Requirements. The Company's current and
future capital needs relate primarily to debt service and maintenance and
improvements of its fleet. Excluding the five double-hull product and chemical
tankers, the Company's principal debt obligations for 2002 were $114.9 million
(including debt retired as part of recapitalization) and cash interest
obligations were $25.0 million. Excluding the five double-hull product and
chemical tankers, the Company's principal debt obligations for 2003 are
estimated to be approximately $22.6 million and cash interest obligations will
be approximately $13.9 million.

     During 2002, the Company paid $4.4 million in principal and $15.1 million
in interest on the five double-hull tankers. For 2003, an estimated $4.7 million
of principal and $14.8 million in interest payments are due on the Title XI ship
financing bonds associated with the five double-hull product and chemical
tankers.

     The Company is required to make deposits to a Title XI reserve fund based
on a percentage of net income attributable to the operations of the five
double-hull tankers, as defined by the Title XI bond agreement. Cash held in a
Title XI reserve fund is invested by the trustee of the fund, and any income
earned thereon is either paid to the Company or retained in the reserve fund.
Withdrawals from the Title XI reserve fund may be made for limited purposes,
subject to prior approval from MARAD. In the second quarter of 2003, the first
deposits to the reserve fund are expected to be made. Additionally, according to
the Title XI Financial Agreement, the Company is restricted from formally
distributing excess cash from the operations of the five double-hull tankers
until certain working capital ratios have been reached and maintained.
Accordingly, at December 31, 2002, the Company had approximately $19.5 million
in cash and cash equivalents that are restricted for use for the operations of
the five double-hull tankers and cannot be used to fund the Company's general
working capital requirements, but has approximately $4.3 million which is
available for distribution and is expected to be available for general working
capital purposes of the consolidating Company.

                                       42

<PAGE>

     During 2002, the Company incurred $27.2 million in capital improvements to
its fleet, including drydock expenditures for 54 vessels. For 2003, these
improvements are expected to aggregate $46.1 million, including approximately
$16 million for the purchase of the Seabulk Africa in January 2003 (see Note
17).

     The following summarizes the Company's contractual obligations at December
31, 2002, and the effect such obligations are expected to have on its liquidity
and cash flow in future periods.
<Table>
<Caption>
                                                                      PAYMENTS DUE BY PERIOD
                                 -------------------------------------------------------------------------------------------------
          CONTRACTUAL                                   LESS THAN 1
          OBLIGATIONS                   TOTAL               YEAR           1 - 3 YEARS          4 - 5 YEARS          OVER 5 YEARS
          -----------                   -----               ----           -----------          -----------          ------------
<S>                              <C>                  <C>                 <C>                 <C>                  <C>
Long-term debt .............     $ 435.2 million      $ 24.3 million      $ 55.4 million      $ 154.9 million      $ 200.6 million
Capital lease obligations...        43.1 million         5.1 million         9.8 million          7.9 million         20.3 million
Operating leases ...........        18.6 million         3.7 million         7.0 million          4.5 million          3.4 million
                                 ---------------      --------------      --------------       ---------------      --------------
Total contractual cash
 obligations ...............     $ 496.9 million      $ 33.1 million      $ 72.2 million       $ 167.3 million      $ 224.3 million
                                 ===============      ==============      ==============       ===============      ===============
</Table>

     Long-term debt consisted of the following at December 31, 2002:
<Table>
<Caption>
                                                                    OUTSTANDING BALANCE
                                                      2002                  AS OF                              INTEREST RATE AS OF
            FACILITY                                PAYMENTS          DECEMBER 31, 2002        MATURITY           MARCH 1, 2003
            --------                                --------          -----------------        --------           -------------
<S>                                              <C>                   <C>                    <C>                 <C>
Fortis Tranche A revolver ..................      $0.1 million          $98.7 million              2007                     5.37%
Fortis Tranche B term loan .................      $0.0 million          $80.0 million              2007                     5.87%
Title XI Financing Bonds ...................      $7.2 million         $234.5 million          2005 to 2024       5.86% to 10.10%
Other notes payable ........................     $10.8 million          $22.0 million          2003 to 2011        8.09% to 8.50%
</Table>

     In addition to the revolver balance of $98.7 million, there are $1.3
million in outstanding letters of credit as of December 31, 2002. The Company is
required to make semi-annual principal repayments of the revolver commencing six
months after closing with the final payment due in September 2007. The Company
is also required to make semi-annual principal repayments on the term loan
commencing 36 months after closing with the final payment due 54 months after
closing.

     The Company's capital requirements arise primarily from its need to service
debt, fund working capital and maintain and improve its vessels. The Company's
expected 2003 capital requirements for debt service, vessel maintenance and
fleet improvements total approximately $98 million. The Company expects that
cash flow from operations will continue to be a significant source of funds for
our working capital and capital requirements.

     Management continues implementation of certain initiatives in an effort to
improve profitability and liquidity. These initiatives include (1) selective
acquisitions and charters of additional vessels, (2) repositioning certain
vessels to take advantage of higher day rates, (3) selling unprofitable vessels,
(4) eliminating non-essential operating and overhead expenses. As a result of
the expanding market in West Africa and softening in the Gulf of Mexico, the
Company mobilized two of its Gulf of Mexico supply boats for redeployment to
West Africa during the first quarter of 2002. In August 2002, time charters for

                                       43

<PAGE>

two of the double-hull tankers were extended for five and six years and the
rates were increased, commencing in July 2002 and July 2003, respectively.

     In March 2002, the Company closed on the sale of the marine transportation
assets of Sun State Marine for $3.9 million in cash. In May 2002, the Company
sold its Port Arthur facility for $3 million, $1.5 million in cash and $1.5
million in credits and cash over the next three years.

     Management recognizes that unforeseen events or business conditions,
including deterioration in its markets, could prevent the Company from meeting
targeted operating results.

     If unforeseen events or business conditions prevent the Company from
meeting targeted operating results, the Company has alternative means including
additional asset sales, additional reductions in operating expenses and deferral
of capital expenditures, which should enable it to satisfy essential capital
requirements. While the Company believes it could successfully complete
alternative plans, if necessary, there can be no assurance that such
alternatives would be available or that the Company would be successful in their
implementation.

EFFECTS OF INFLATION

     The rate of inflation has not had a material impact on our operations.
Moreover, if inflation remains at its recent levels, it is not expected to have
a material impact on our operations for the foreseeable future.

PROSPECTIVE ACCOUNTING CHANGES

     In April 2002, the FASB issued SFAS No. 145, Rescission of FASB Statements
No. 4, 44 and 64, Amendment of FASB Statement No. 14, and Technical Corrections,
which eliminates the requirement that gains and losses from the extinguishment
of debt be aggregated and, if material, classified as an extraordinary item, net
of the related income tax effect, and eliminates an inconsistency between the
accounting for sale-leaseback transactions and certain lease modifications that
have economic effects that are similar to sale-leaseback transactions.
Subsequent to the January 1, 2003 adoption date of the standard, the Company
will be required to reclassify to continuing operations amounts previously
reported as extinguishments of debt.

     In June 2002, the FASB issued SFAS No. 146, Accounting for Costs Associated
with Exit or Disposal Activities, which addresses the financial accounting and
reporting for costs associated with exit or disposal activities. SFAS No. 146 is
effective for fiscal years beginning after December 31, 2002. The adoption of
the standard is not expected to have a significant impact on the Company.

     In June 2001, the Accounting Executive Committee of the American Institute
of Certified Public Accountants issued an exposure draft of a proposed Statement
of Position ("SOP") entitled Accounting for Certain Costs and Activities Related
to Property, Plant and Equipment. Under the proposed SOP, the Company would
expense major maintenance costs as incurred and prohibit the use of the deferral
of the entire cost of a planned major maintenance activity. Currently, the costs
incurred to drydock the Company's vessels are deferred and amortized on a
straight-line basis over the period to the next drydocking, generally 30 to 36
months. The proposed SOP would be effective for fiscal years beginning after
June 15, 2002. Management has determined that this SOP, if issued as proposed,
would have a material effect on the consolidated financial statements. In the
year of adoption, the Company would write off the net book value of the deferred
drydocking costs and record the write-off as a change in accounting principle
($27.2 million as of December 31, 2002). Additionally, all drydock expenditures
incurred after the adoption of the SOP would be expensed as incurred.

                                       44

<PAGE>

ITEM 7A. QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK

     The Company is exposed to market risk from changes in interest rates, which
may adversely affect its results of operations and financial condition. The
Company's policy is not to use financial instruments for trading or other
speculative purposes, and the Company is not a party to any leveraged financial
instruments. Except as set forth below, the Company manages market risk by
restricting the use of derivative financial instruments to infrequent purchases
of forward contracts for the purchase of fuel oil for its carrier fleet. These
contracts have been terminated as of December 31, 2001. A discussion of the
Company's credit risk and the fair value of financial instruments is included in
Notes 2 and 13 of the Company's consolidated financial statements.

     The Jones Act restricts the U.S. coastwise trade to vessels owned, operated
and crewed substantially by U.S. citizens. The Jones Act continues to be in
effect and supported by Congress and the Administration. However, it is possible
that the Company's advantage as a U.S. citizen operator of Jones Act vessels
could be somewhat eroded over time as there continue to be periodic efforts and
attempts by foreign interests to circumvent certain aspects of the Jones Act.

     Exposure To Short-Term Interest Rates. Short-term variable rate debt,
primarily borrowings under the New Credit Facility, comprised approximately
$178.7 million of the Company's total debt at December 31, 2002. The Company's
variable rate debt had an average interest rate of 5.67% at December 31, 2002. A
hypothetical 2.0% increase in interest rates on $178.7 million of debt would
cause the Company's interest expense to increase on average approximately $2.4
million per year over the term of the loans, with a corresponding decrease in
income before taxes.

ITEM 8. FINANCIAL STATEMENTS

     The Company's consolidated financial statements are listed in Item 15(a),
included at the end of this Report on Form 10-K beginning on page F-1, and
incorporated herein by reference.

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

     None

                                       45

<PAGE>

                                    PART III

ITEM 10. DIRECTORS AND EXECUTIVE OFFICERS OF THE REGISTRANT

     The information required by Item 10 is incorporated herein by reference to
our Proxy Statement for the 2003 Annual Meeting of Shareholders under the
captions "Directors and Nominees" and "Compliance with Section 16(a) of the
Securities Exchange Act of 1934," to be filed with the Commission not later than
120 days after the close of the fiscal year, except for information presented in
Item 4A of this Report on Form 10-K.

ITEM 11. EXECUTIVE COMPENSATION

     The information required by Item 11, including information concerning
grants under the Company's employees' and directors' stock compensation plans,
is incorporated by reference to our Proxy Statement for the 2003 Annual Meeting
of Shareholders under the caption "Executive Compensation" to be filed with the
Commission not later than 120 days after the close of the fiscal year.

ITEM 12. SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND MANAGEMENT

     The information required by Item 12, including information concerning
ownership and options under the Company's employees' and directors' stock
compensation plans, is incorporated by reference to our Proxy Statement for the
2003 Annual Meeting of Shareholders under the caption "Common Stock Ownership of
Certain Beneficial Owners and Management" to be filed with the Commission not
later than 120 days after the close of the fiscal year.

ITEM 13. CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS

     The information required by Item 13 is incorporated by reference to our
Proxy Statement for the 2003 Annual Meeting of Shareholders under the caption
"Certain Transactions" to be filed with the Commission not later than 120 days
after the close of the fiscal year.

ITEM 14. CONTROLS AND PROCEDURES

     EVALUATION OF DISCLOSURE CONTROLS AND PROCEDURES.

     Within the 90-day period prior to the filing of this annual report on Form
10-K, the Company performed an evaluation, under the supervision and
participation of management, of the effectiveness of the design and operation of
its disclosure controls and procedures pursuant to Exchange Act Rule 13a-14.
Based upon that evaluation, the Chief Executive Officer and the Chief Financial
Officer have concluded that these disclosure controls are effective in providing
them with material information relating to the Company as required to be
disclosed in the Company's periodic filings with the Commission.

     Appearing immediately following the signatures section of this annual
report are certifications by our Chief Executive Officer and Chief Financial
Officer, which are required by Section 302 of the Sarbanes-Oxley Act of 2002.
The information set forth in this Item 14 should be read in conjunction with
these Section 302 certifications. Additionally, our Chief Executive Officer and
Chief Financial Officer have provided certain certifications to the Commission
pursuant to Section 906 of Sarbanes-Oxley. These certifications are filed as
exhibits to this annual report.

                                       46

<PAGE>

     CHANGES IN INTERNAL CONTROLS.

     There were no significant changes in the Company's internal controls or in
other factors that could significantly affect these controls subsequent to the
date of our most recent evaluation.

                                     PART IV

ITEM 15. EXHIBITS, FINANCIAL STATEMENT SCHEDULES AND REPORTS ON FORM 8-K.

     (A) FINANCIAL STATEMENTS AND SCHEDULES. See Index to consolidated financial
statements and Schedules which appears on page F-1 herein.

     (B) REPORTS ON FORM 8-K. The following reports on Form 8-K were filed
during the quarter ended December 31, 2002:

          1.   The Company filed a Current Report on Form 8-K dated October 3,
               2002. Item 5 was reported and no financial statements were filed.

          2.   The Company filed a current Report on Form 8-K dated October 31,
               2002. Item 5 was reported and no financial statements were filed.

     (C) LISTS OF EXHIBITS. The following is a list of exhibits furnished.
Copies of exhibits will be furnished upon request of any stockholder at a charge
of $0.25 per page plus postage. The Company hereby files as part of this Form
10-K the exhibits required by Item 15(c) listed below. Exhibits which are
incorporated herein by reference can be inspected and copied at the public
reference facilities maintained by the Commission, 450 Fifth Street N.W., Room
1024, Washington, D.C. 29549 and at the Commission's regional office at CitiCorp
Center, 500 West Madison Street, Suite 1400, Chicago, IL 60661-2511. Copies of
such material can also be obtained from the Public Reference Section of the
Commission, 450 Fifth Street N.W., Washington, D.C. 29549, at prescribed rates.

<TABLE>

<CAPTION>

EXHIBIT
NUMBER                                      EXHIBITS

<S>       <C>
2.1*      Debtor's First Amended Joint Plan of Reorganization, dated November 1,
          1999 and related Disclosure Statement filed with the U.S. Bankruptcy
          Court for the District of Delaware [incorporated by reference to
          Exhibits 1 and 2 to the Schedule 13D/A filed with the Commission on
          December 29, 1999 by Loomis Sales & Company, L.P. (Commission File No.
          000-28732)].

3.1(a)*   Certificate of Incorporation (incorporated by reference to the
          Company's Form 10-K for the fiscal year ended December 31, 1999).

3.1(b)*   Certificate of Merger (incorporated by reference to the Company's Form
          10-K for the fiscal year ended December 31, 1999).

3.1(c)    Certificate of Merger changing the name of the Company.

3.1(d)    Certificate of Amendment to the Certificate of Incorporation
          (incorporated by reference to the Company's Form 8-K filed with the
          Commission on September 16, 2002).

3.2*      By-laws of the Company.

3.2(a)    Amended and Restated By-Laws of the Company (incorporated by reference
          to the Company's Form 8-K filed with the Commission on September 16,
          2002).

4.1*      Form of Common Stock Certificate of the Company.

4.1(a)*   Form of Common Stock Certificate reflecting new name of the Company.

4.2*      Form of Class A Warrant Certificate of the Company.

4.2(a)*   Form of Class A Warrant Certificate reflecting new name of the
          Company.

4.3*      Indenture for the 12.5% Senior Secured Notes due 2007, dated December
          15, 1999 among Hvide Marine Incorporated as the Issuer, the Subsidiary
          Guarantors named therein, State Street Bank and

</TABLE>

                                       47

<PAGE>

<TABLE>
<S>       <C>

          Trust Company as the Trustee and Bankers Trust Company as the
          Collateral Agent [incorporated by reference to Exhibit 4.1 to the
          Company's Form 8-K filed with the Commission on December 27, 1999
          (Commission File No. 000-28732)].

4.4*      Warrant Agreement dated December 15, 1999 between Hvide Marine
          Incorporated and State Street Bank and Trust Company as Warrant Agent
          [incorporated by reference to Exhibit 4.2 to the Company's Form 8-K
          filed with the Commission on December 27, 1999 (Commission File No.
          000-28732)].

4.5*      Class A Warrant Agreement dated as of December 15, 1999 by and between
          Hvide Marine Incorporated and State Street Bank and Trust Company
          (incorporated by reference to the Company's Form 10-K for the fiscal
          year ended December 31, 1999).

4.6*      Amended and Restated Equity Ownership Plan (incorporated by reference
          to the Company's definitive Proxy Statement dated May 15, 2000).

4.7*      Stock Option Plan for Directors (incorporated by reference to the
          Company's definitive Proxy Statement dated May 15, 2000).

4.8       Notice of Redemption of 12-1/2% Senior Notes due 2007, Series B, dated
          as of September 13, 2002 (incorporated by reference to the Company's
          Form 8-K filed with the Commission on September 16, 2002).

4.9       Amended and Restated Equity Ownership Plan (incorporated by reference
          to the Company's Definitive Proxy Statement dated April 12, 2002).

10.1*     Credit Agreement dated December 15, 1999 among Hvide Marine
          Incorporated, Bankers Trust Company as Administrative Agent, Deutsche
          Bank Securities, Inc. as Lead Arranger and Book Manager, Meespierson
          Capital Corp. as Syndication Agent and Co-Arranger and the various
          persons from time to time parties to the Agreement as Lenders
          [incorporated by reference to Exhibit 10.1 of the Company's Form 8-K
          filed with the Commission on December 27, 1999 (Commission File No.
          000-28732)].

10.2*     Common Stock Registration Rights Agreement dated December 15, 1999
          among Hvide Marine Incorporated, Bankers Trust Corporation and Great
          American Life Insurance Company, Great American Insurance Company, New
          Energy Corp., American Empire Surplus Lines Insurance Company,
          Worldwide Insurance Company and American National Fire Insurance
          Company as Purchasers [incorporated by reference to Exhibit 10.2 of
          the Company's Form 8-K filed with the Commission on December 27, 1999
          (Commission File No. 000-28732)].

10.3*     Registration Rights Agreement for the 12.5% Senior Secured Notes due
          2007 dated December 15, 1999 among Hvide Marine Incorporated, Bankers
          Trust Corporation and Great American Life Insurance Company, Great
          American Insurance Company, New Energy Corp., American Empire Surplus
          Lines Insurance Company, Worldwide Insurance Company and American
          National Fire Insurance Company as Purchasers [incorporated by
          reference to Exhibit 10.3 of the Company's Form 8-K filed with the
          Commission on December 27, 1999 (Commission File No. 000-28732)].

10.4*     Registration Rights Agreement by and between Loomis, Sayles &
          Company, L.P. and Hvide Marine Incorporated dated as of December 15,
          1999 [incorporated by reference to Exhibit 4 of the Schedule 13D/A
          filed with the Commission on December 29, 1999 by Loomis, Sayles &
          Company, L.P. (Commission File No. 005-46833)].

10.5*     First Amendment dated as of April 13, 2000 among Hvide Marine
          Incorporated, the financial institutions party to the credit agreement
          and Bankers Trust Company as Administrative Agent (incorporated by
          reference to the Company's Form 10-K for the fiscal year ended
          December 31, 1999).

10.6*     Second Amendment dated June 29, 2000 among Hvide Marine Incorporated,
          the financial institutions party to the credit agreement and Bankers
          Trust Company, as Administrative Agent (incorporated by reference to
          the Company's Form 10-K for the fiscal year ended December 31, 2000).

10.7*     Third Amendment dated August 30, 2000 among Hvide Marine Incorporated,
          the financial institutions party to the credit agreement and Bankers
          Trust Company, as Administrative Agent (incorporated by reference to
          the Company's Form 10-K for the fiscal year ended December 31, 2000).

10.8*     Fourth Amendment dated December 22, 2000 among Hvide Marine
          Incorporated, the financial institutions party to the credit agreement
          and Bankers Trust Company, as Administrative Agent

</TABLE>

                                       48

<PAGE>

<TABLE>
<S>       <C>

          (incorporated by reference to the Company's Form 10-K for the fiscal
          year ended December 31, 2000).

10.9*     Fifth Amendment dated November 8, 2001 among Seabulk International
          Incorporated, the financial institutions party to the credit agreement
          and Bankers Trust Company, as Administrative Agent.

10.10*    Sixth Amendment dated March 15, 2002 among Seabulk International
          Incorporated, the financial institutions party to the credit agreement
          and Bankers Trust Company, as Administrative Agent.

10.11* ** Employment Agreement dated as of April 18, 2000 between the
          Company and Gerhard E. Kurz.

10.12**   Amendment to Employment Agreement dated July 16, 2001 between the
          Company and Gerhard E. Kurz.

10.13     Stock Purchase Agreement by and among Seabulk International, Inc. and
          the Investors listed on Schedule 1 thereto, dated as of June 13, 2002
          (incorporated by reference to the Company's Form 8-K filed with the
          Commission on June 19, 2002).

10.14     Stockholders' Agreement, dated as of September 13, 2002, among
          Seabulk International, Inc., Nautilus Acquisition, L.P., C/R Marine
          Domestic Partnership, L.P., C/R Marine Non-U.S. Partnership, L.P., C/R
          Marine Coinvestment, L.P., C/R Marine Coinvestment II, L.P. and
          Gerhard Kurz (incorporated by reference to the Company's Form 8-K
          filed with the Commission on September 16, 2002).

10.15**   Amendment to Employment Agreement, dated as of September 13, 2002,
          between the Company and Gerhard E. Kurz (incorporated by reference to
          the Company's Form 8-K filed with the Commission on September 16,
          2002).

10.16     Credit Agreement, dated as of September 13, 2002, among Seabulk
          International, Inc., each Subsidiary Guarantor, Fortis Capital Corp.,
          NIB Capital Bank N.V. and each other financial institution which may
          become a party to the Agreement as a Lender, Fortis Capital Corp., as
          administrative agent on behalf of the Lenders, and as book runner and
          as an arranger, and NIB Capital Bank N.V., as an arranger
          (incorporated by reference to the Company's Form 8-K filed with the
          Commission on September 16, 2002).

10.17     Amendment No. 1 dated November 22, 2002 to Credit Agreement, dated as
          of September 13, 2002, among Seabulk International, Inc., each
          Subsidiary Guarantor, Fortis Capital Corp., NIB Capital Bank N.V. and
          each other financial institution which may become a party to the
          Agreement as a Lender, Fortis Capital Corp., as administrative agent
          on behalf of the Lenders, and as book runner and as an arranger, and
          NIB Capital Bank N.V., as an arranger.

21        Subsidiary List.

23.1      Consent of Ernst & Young LLP.

99.1*     Order dated December 9, 1999 of the United States Bankruptcy Court
          for the District of Delaware confirming the First Amended Joint Plan
          of Reorganization in In re: Hvide Marine Incorporated, et al., Case
          No. 99-3024 (PJW), including the Supplement to such Plan [incorporated
          by reference to Exhibit 99.1 of the Company's Form 8-K filed with the
          Commission on December 27, 1999 (Commission File No. 000-28732)].

99.2      Certification of Principal Executive Officer

99.3      Certification of Principal Financial Officer

</TABLE>

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

* Incorporated herein by reference.

** Indicates a management contract or compensation arrangement.

                                       49
<PAGE>

                                   SIGNATURES

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

                              SEABULK INTERNATIONAL, INC.

                              By: /S/ GERHARD E. KURZ
                                  ----------------------
                              Gerhard E. Kurz
                              Chairman, President, and Chief Executive Officer

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


<TABLE>
<CAPTION>

              SIGNATURE                              TITLE                                 DATE
<S>                                     <C>                                        <C>
/s/ GERHARD E. KURZ                       Chairman, President,                        March 28, 2003
----------------------------------------- and Chief Executive Officer
           Gerhard E. Kurz                (Principal Executive Officer)


/s/ VINCENT J. deSOSTA                    Senior Vice President and                   March 28, 2003
----------------------------------------- Chief Financial Officer
         Vincent J. deSostoa              (Principal Financial Officer)


/s/ MICHAEL J. PELLICCI                   Vice President - Finance and                March 28, 2003
----------------------------------------- Corporate Controller
         Michael J. Pellicci              (Principal Accounting Officer)


/s/ ARI J. BENACERRAF                     Director                                    March 28, 2003
-----------------------------------------
           Ari J. Benacerraf

/s/ PETER H. CRESSY                       Director                                    March 28, 2003
-----------------------------------------
            Peter H. Cressy

/s/ DAVID A. DURKIN                       Director                                    March 28, 2003
-----------------------------------------
           David A.Durkin

/s/ KENNETH V. HUSEMAN                    Director                                    March 28, 2003
-----------------------------------------
           Kenneth V. Huseman

/s/ ROBERT L. KEISER                      Director                                    March 28, 2003
-----------------------------------------
           Robert L. Keiser

/s/ PIERRE F. LAPEYRE, JR..               Director                                    March 28, 2003
-----------------------------------------
           Pierre F. Lapeyre, Jr.

/s/ DAVID M. LEUSCHEN                     Director                                    March 28, 2003
-----------------------------------------
           David M. Leuschen

/s/ THOMAS P. MOORE, JR.                  Director                                    March 28, 2003
-----------------------------------------
           Thomas P. Moore, Jr.

/s/ STEVEN A. WEBSTER                     Director                                    March 28, 2003
-----------------------------------------
           Steven A. Webster
</TABLE>

                                       50

<PAGE>




                                CERTIFICATION OF

                  GERHARD E. KURZ, PRINCIPAL EXECUTIVE OFFICER

                         OF SEABULK INTERNATIONAL, INC.

                         PURSUANT TO 18 U.S.C. SS.1350

1.   I, Gerhard E. Kurz, certify that I have reviewed this annual report on Form
     10-K of Seabulk International, Inc.

2.   Based on my knowledge, this annual report does not contain any untrue
     statement of a material fact or omit to state a material fact necessary to
     make the statements made, in light of the circumstances under which such
     statements were made, not misleading with respect to the period covered by
     this annual report;

3.   Based on my knowledge, the financial statements, and other financial
     information included in this annual report, fairly present in all material
     respects the financial condition, results of operations and cash flows of
     the registrant as of, and for, the periods presented in this annual report;

4.   The registrant's other certifying officers and I are responsible for
     establishing and maintaining disclosure controls and procedures (as defined
     in Exchange Act Rules 13a-14 and 15d-14) for the registrant and we have:

     a)   designed such disclosure controls and procedures to ensure that
          material information relating to the registrant, including its
          consolidated subsidiaries, is made known to us by others within those
          entities, particularly during the period in which this annual report
          is being prepared;

     b)   evaluated the effectiveness of the registrant's disclosure controls
          and procedures as of a date within 90 days prior to the filing date of
          this annual report (the "Evaluation Date"); and

     c)   presented in this annual report our conclusions about the
          effectiveness of the disclosure controls and procedures based on our
          evaluation as of the Evaluation Date;

5.   The registrant's other certifying officers and I have disclosed, based on
     our most recent evaluation, to the registrant's auditors and the audit
     committee of registrant's board of directors (or persons performing the
     equivalent function):

     (a)  all significant deficiencies in the design or operation of internal
          controls which could adversely affect the registrant's ability to
          record, process, summarize and report financial data and have
          identified for the registrant's auditors any material weaknesses in
          internal controls; and

     (b)  any fraud, whether or not material, that involves management or other
          employees who have a significant role in the registrant's internal
          controls; and

6.   The registrant's other certifying officers and I have indicated in this
     annual report whether or not there were significant changes in internal
     controls or in other factors that could significantly affect internal
     controls subsequent to the date of our most recent evaluation, including
     any corrective actions with regard to significant deficiencies and material
     weaknesses.

Date:  March 28, 2003
                                     /s/ GERHARD E. KURZ
                                     -------------------
                                     Name:  Gerhard E. Kurz
                                     Title: Chairman, President and
                                     Chief Executive Officer


                                      51
<PAGE>




                                CERTIFICATION OF

                VINCENT J. DESOSTOA, PRINCIPAL FINANCIAL OFFICER

                         OF SEABULK INTERNATIONAL, INC.

                        PURSUANT TO 18 U.S.C. SS.1350

1.   I, Vincent J. deSostoa, certify that I have reviewed this annual report on
     Form 10-K of Seabulk International, Inc.

2.   Based on my knowledge, this annual report does not contain any untrue
     statement of a material fact or omit to state a material fact necessary to
     make the statements made, in light of the circumstances under which such
     statements were made, not misleading with respect to the period covered by
     this annual report;

3.   Based on my knowledge, the financial statements, and other financial
     information included in this annual report, fairly present in all material
     respects the financial condition, results of operations and cash flows of
     the registrant as of, and for, the periods presented in this annual report;

4.   The registrant's other certifying officers and I are responsible for
     establishing and maintaining disclosure controls and procedures (as defined
     in Exchange Act Rules 13a-14 and 15d-14) for the registrant and we have:

     (a)  designed such disclosure controls and procedures to ensure that
          material information relating to the registrant, including its
          consolidated subsidiaries, is made known to us by others within those
          entities, particularly during the period in which this annual report
          is being prepared;

     (b)  evaluated the effectiveness of the registrant's disclosure controls
          and procedures as of a date within 90 days prior to the filing date of
          this annual report (the "Evaluation Date"); and

     (c)  presented in this annual report our conclusions about the
          effectiveness of the disclosure controls and procedures based on our
          evaluation as of the Evaluation Date;

5.   The registrant's other certifying officers and I have disclosed, based on
     our most recent evaluation, to the registrant's auditors and the audit
     committee of registrant's board of directors (or persons performing the
     equivalent function):

     (a)  all significant deficiencies in the design or operation of internal
          controls which could adversely affect the registrant's ability to
          record, process, summarize and report financial data and have
          identified for the registrant's auditors any material weaknesses in
          internal controls; and

     (b)  any fraud, whether or not material, that involves management or other
          employees who have a significant role in the registrant's internal
          controls; and

6.   The registrant's other certifying officers and I have indicated in this
     annual report whether or not there were significant changes in internal
     controls or in other factors that could significantly affect internal
     controls subsequent to the date of our most recent evaluation, including
     any corrective actions with regard to significant deficiencies and material
     weaknesses.

Date:  March 28, 2003
                                         /s/ VINCENT J. deSOSTOA
                                         ------------------------
                                         Name: Vincent J. deSostoa
                                         Title: Senior Vice President and
                                         Chief Financial Officer




                                      52
<PAGE>


                  SEABULK INTERNATIONAL, INC. AND SUBSIDIARIES

            INDEX TO CONSOLIDATED FINANCIAL STATEMENTS AND SCHEDULES

<Table>
<S>                                                                                                                         <C>
Report of Independent Certified Public Accountants.........................................................................   F-2

Consolidated Financial Statements:

Consolidated Balance Sheets as of December 31, 2002 and 2001...............................................................   F-3

Consolidated Statements of Operations for the years ended December 31, 2002, 2001, and 2000................................   F-4

Consolidated Statements of Cash Flows for the years ended December 31, 2002, 2001, and 2000................................   F-5

Consolidated Statements of Changes in Stockholders' Equity for the years ended December 31, 2002, 2001, and 2000 ..........   F-7

Notes to Consolidated Financial Statements.................................................................................   F-9
</Table>

All schedules have been omitted because the information is not applicable or is
not material or because the information required is included in the consolidated
financial statements or the notes thereto.


                                      F-1

<PAGE>

               REPORT OF INDEPENDENT CERTIFIED PUBLIC ACCOUNTANTS

Board of Directors and Stockholders
Seabulk International, Inc. and Subsidiaries

     We have audited the accompanying consolidated balance sheets of Seabulk
International, Inc. and Subsidiaries as of December 31, 2002 and 2001, and the
related consolidated statements of operations, stockholders' equity, and cash
flows for each of the three years in the period ended December 31, 2002. These
financial statements are the responsibility of the Company's management. Our
responsibility is to express an opinion on these financial statements based on
our audits.

     We conducted our audits in accordance with auditing standards generally
accepted in the United States. Those standards require that we plan and perform
the audit to obtain reasonable assurance about whether the financial statements
are free of material misstatement. An audit includes examining, on a test basis,
evidence supporting the amounts and disclosures in the financial statements. An
audit also includes assessing the accounting principles used and significant
estimates made by management, as well as evaluating the overall financial
statement presentation. We believe that our audits provide a reasonable basis
for our opinion.

     In our opinion, the financial statements referred to above present fairly,
in all material respects, the consolidated financial position of Seabulk
International, Inc. and Subsidiaries at December 31, 2002 and 2001, and the
consolidated results of their operations and their cash flows for each of the
three years in the period ended December 31, 2002, in conformity with accounting
principles generally accepted in the United States.



                                                     /s/ Ernst & Young LLP
Miami, Florida
February 25, 2003, except for the second
and third paragraphs of Note 17, as to
which the dates are March 7, 2003 and
March 27, 2003, respectively

                                      F-2


<PAGE>


                  SEABULK INTERNATIONAL, INC. AND SUBSIDIARIES
                           CONSOLIDATED BALANCE SHEETS
                      (IN THOUSANDS, EXCEPT PAR VALUE DATA)

<Table>
<Caption>

                                                                                                                DECEMBER 31,
                                                                                                          -------------------------
                                                                                                            2002            2001
                                                                                                          ---------       ---------
<S>                                                                                                      <C>             <C>
ASSETS
Current assets:
   Cash and cash equivalents .......................................................................      $  37,188       $  11,631
   Restricted cash..................................................................................          1,337           1,337
   Trade accounts receivables net of allowance for doubtful accounts of $5,243 in 2002
     and $5,919 in 2001, respectively ..............................................................         45,987          50,088
   Other receivables ...............................................................................         13,485          16,282
   Marine operating supplies .......................................................................          8,139          10,049
   Prepaid expenses and other ......................................................................          2,702           2,984
                                                                                                          ---------       ---------
Total current assets ...............................................................................        108,838          92,371

Vessels and equipment, net .........................................................................        545,169         589,371
Deferred costs, net ................................................................................         38,228          48,899
Other ..............................................................................................         10,860          14,124
                                                                                                          ---------       ---------
     Total assets ..................................................................................      $ 703,095       $ 744,765
                                                                                                          =========       =========

LIABILITIES AND STOCKHOLDERS' EQUITY
Current liabilities:
   Accounts payable ................................................................................      $  11,343       $  18,171
   Current maturities of long-term debt ............................................................         24,315          38,367
   Current obligations under capital leases ........................................................          3,005           2,972
   Accrued interest ................................................................................          1,733           1,455
   Accrued liabilities and other ...................................................................         42,181          38,719
                                                                                                          ---------       ---------
     Total current liabilities .....................................................................         82,577          99,684

Long-term debt .....................................................................................        410,858         399,974
Obligations under capital leases ...................................................................         28,748          31,768
Senior notes .......................................................................................             --          81,635
Other liabilities ..................................................................................          3,489           6,175
                                                                                                          ---------       ---------
     Total liabilities .............................................................................        525,672         619,236

Commitments and contingencies

Minority interest ..................................................................................            623             842

Stockholders' equity:
   Preferred stock, no par value--authorized 5,000; issued and outstanding, none ...................             --              --
   Common stock--$.01 par value, authorized 40,000 shares; 23,124 and 10,506 shares issued and
    outstanding in 2002 and 2001, respectively .....................................................            231             105
   Additional paid-in capital ......................................................................        258,016         167,259
   Accumulated other comprehensive loss ............................................................             --              (1)
   Unearned compensation ...........................................................................            (99)           (198)
   Accumulated deficit .............................................................................        (81,348)        (42,478)
                                                                                                          ---------       ---------
   Total stockholders' equity ......................................................................        176,800         124,687
                                                                                                          ---------       ---------
     Total liabilities and stockholders' equity ....................................................      $ 703,095       $ 744,765
                                                                                                          =========       =========
</Table>

See notes to consolidated financial statements



                                      F-3
<PAGE>


                  SEABULK INTERNATIONAL, INC. AND SUBSIDIARIES
                      CONSOLIDATED STATEMENTS OF OPERATIONS
                      (IN THOUSANDS, EXCEPT PER SHARE DATA)

<Table>
<Caption>

                                                                                 YEAR ENDED DECEMBER 31,
                                                                       -----------------------------------------
                                                                          2002           2001            2000
                                                                       ---------       ---------       ---------
<S>                                                                    <C>             <C>             <C>
Revenue .........................................................      $ 323,997       $ 346,730       $ 320,483
Operating expenses:
   Crew payroll and benefits ....................................         88,473          96,431          90,370
   Charter hire .................................................          7,607           6,326          12,802
   Repairs and maintenance ......................................         30,345          25,810          24,522
   Insurance ....................................................         11,385          15,809          12,645
   Fuel and consumables .........................................         28,365          34,955          40,605
   Port charges and other .......................................         16,383          19,996          24,282
                                                                       ---------       ---------       ---------
     Total operating expenses ...................................        182,558         199,327         205,226
Overhead expenses:
   Salaries and benefits ........................................         22,237          21,531          22,083
   Office .......................................................          5,123           5,993           6,113
   Professional fees ............................................          3,392           3,429           4,629
   Other ........................................................          7,905           6,049           6,805
                                                                       ---------       ---------       ---------
     Total overhead expenses ....................................         38,657          37,002          39,630
Depreciation, amortization and drydocking .......................         66,376          59,913          50,271
Write-down of assets held for sale ..............................             --           1,400              --
                                                                       ---------       ---------       ---------
Income from operations ..........................................         36,406          49,088          25,356
Other (expense) income:
   Interest expense .............................................        (44,715)        (55,907)        (62,714)
   Interest income ..............................................            475             240             704
   Minority interest in losses (gains) of subsidiaries ..........            219              35           1,639
   Gain (loss) on disposal of assets ............................          1,364            (134)          3,863
   Other ........................................................           (154)            (73)          7,072
                                                                       ---------       ---------       ---------
     Total other expense, net ...................................        (42,811)        (55,839)        (49,436)
                                                                       ---------       ---------       ---------
Loss before income taxes and
    extraordinary item ..........................................         (6,405)         (6,751)        (24,080)
Provision for income taxes ......................................          4,642           5,210           4,872
                                                                       ---------       ---------       ---------
Loss before extraordinary item ..................................        (11,047)        (11,961)        (28,952)
Extraordinary loss on early extinguishment of debt ...............        27,823              --              --
                                                                       ---------       ---------       ---------
     NET LOSS ...................................................      $ (38,870)      $ (11,961)      $ (28,952)
                                                                       =========       =========       =========

Net loss per common share - basic and diluted:
Loss before extraordinary item ..................................      $   (0.77)      $   (1.16)      $   (2.89)
Extraordinary loss on early extinguishment of debt ..............          (1.95)             --              --
                                                                       ---------       ---------       ---------
   Net loss per common share ....................................      $   (2.72)      $   (1.16)      $   (2.89)
                                                                       =========       =========       =========

Weighted average common shares outstanding ......................         14,277          10,277          10,034
                                                                       =========       =========       =========
</Table>

          See notes to consolidated financial statements.


                                      F-4
<PAGE>


                  SEABULK INTERNATIONAL, INC. AND SUBSIDIARIES
                      CONSOLIDATED STATEMENTS OF CASH FLOWS
                                 (IN THOUSANDS)

<Table>
<Caption>
                                                                                        YEAR ENDED DECEMBER 31,
                                                                                  ------------------------------------
                                                                                     2002          2001         2000
                                                                                  ---------     ---------    ---------
<S>                                                                              <C>           <C>           <C>
OPERATING ACTIVITIES:
  Net loss ..................................................................     $(38,870)     $(11,961)     $(28,952)
  Adjustments to reconcile net loss to net cash provided by operating
     activities:
       Accrued reorganization expenses ......................................           --            --        (4,494)
       Depreciation and amortization of vessels and equipment ...............       43,711        45,212        43,498
       Amortization of drydocking costs .....................................       22,665        14,701         6,773
       Provision for bad debts ..............................................          (93)          228         1,021
       (Gain) loss on disposal of assets ....................................       (1,364)          134        (3,863)
       Loss on early extinguishment of debt .................................       27,823            --            --
       Amortization of discount on long-term debt and financing costs .......        4,249         5,324         5,672
       Minority interest in (losses) gains of subsidiaries ..................         (219)          (35)       (1,639)
       Write-down of assets held for sale ...................................           --         1,400            --
       Senior and notes payable issued for payment of interest and fees .....          626         1,752         1,493
       Other non-cash items .................................................          650           459           (75)
       Changes in operating assets and liabilities:
           Trade accounts and other receivables .............................        8,790         3,210       (13,394)
           Other current and long-term assets ...............................       (4,129)       (5,485)       20,349
           Accounts payable and other liabilities ...........................       (2,786)       11,901          (113)
                                                                                  --------      --------      --------
             Net cash provided by operating activities ......................       61,053        66,840        26,276

INVESTING ACTIVITIES:
  Expenditures for drydocking ...............................................      (23,441)      (29,449)      (14,366)
  Proceeds from disposals of assets .........................................       12,675         6,575        25,710
  Purchases of vessels and equipment ........................................       (3,753)       (9,282)      (12,047)
  Acquisition of minority interest ..........................................           --          (524)           --
  Redemption of restricted investments ......................................           --         2,542         2,931
  Purchase of restricted investments ........................................           --        (1,677)           --
                                                                                  --------      --------      --------
     Net cash (used in) provided by investing activities ....................      (14,519)      (31,815)        2,228
</Table>


                                      F-5
<PAGE>


                  SEABULK INTERNATIONAL, INC. AND SUBSIDIARIES
                      CONSOLIDATED STATEMENTS OF CASH FLOWS
                                 (IN THOUSANDS)

<Table>
<Caption>
                                                                                                   YEAR ENDED DECEMBER 31,
                                                                                          -----------------------------------------
                                                                                             2002           2001            2000
                                                                                          ----------      ---------       ---------
<S>                                                                                      <C>              <C>            <C>
FINANCING ACTIVITIES:
  Net payments of revolving credit facility ........................................         (9,000)         (5,250)         14,250
  Proceeds of New Credit Facility ..................................................        178,800              --              --
  Payments of New Credit Facility ..................................................           (125)             --              --
  Payments of long-term debt .......................................................       (165,817)        (19,504)        (33,390)
  Payments of Senior Notes .........................................................       (101,499)             --              --
  Proceeds of Private Placement, net of issuance costs .............................         90,901              --              --
  Payments of Title XI bonds .......................................................         (7,166)         (8,312)         (9,282)
  Redemption of restricted cash ....................................................             --          (1,006)             --
  Payments of other deferred financing costs .......................................             --              --            (596)
  Payments of obligations under capital leases .....................................         (2,986)         (3,558)         (4,300)
  Payment of deferred financing costs for New Credit Facility ......................         (4,128)             --              --
  Proceeds from exercise of warrants ...............................................              1               3               1
  Proceeds from exercise of stock options ..........................................             42              --              --
                                                                                          ---------       ---------       ---------
      Net cash used in financing activities ........................................        (20,977)        (37,627)        (33,317)
                                                                                          ---------       ---------       ---------
  Change in cash and cash equivalents ..............................................         25,557          (2,602)         (4,813)
  Cash and cash equivalents at beginning of period .................................         11,631          14,233          19,046
                                                                                          ---------       ---------       ---------
  CASH AND CASH EQUIVALENTS AT END OF PERIOD .......................................      $  37,188       $  11,631       $  14,233
                                                                                          =========       =========       =========

Supplemental schedule of noncash investing and financing activities:
  Note payable issued for amendment fee to credit facility .........................      $      --       $      --       $   4,500
                                                                                          =========       =========       =========
  Vessels exchanged for drydock expenditures .......................................      $     900       $      --       $      --
                                                                                          =========       =========       =========
  Capital lease obligations for the acquisition of vessels and equipment ...........      $      --         $    --       $   5,332
                                                                                          =========       =========       =========
  Senior and notes payable issued for payment of accrued interest and fees .........      $     626       $   1,752       $   1,493
                                                                                          =========       =========       =========
  Notes payable issued for the acquisition of minority interest ....................      $      --       $  10,500       $      --
                                                                                          =========       =========       =========
Supplemental disclosures:
  Interest paid ....................................................................      $  40,085       $  47,279       $  56,219
                                                                                          =========       =========       =========
  Income taxes paid ................................................................      $   4,537       $   3,304       $   4,478
                                                                                          =========       =========       =========
</Table>
  See notes to consolidated financial statements.


                                      F-6
<PAGE>


                  SEABULK INTERNATIONAL, INC. AND SUBSIDIARIES
           CONSOLIDATED STATEMENTS OF CHANGES IN STOCKHOLDERS' EQUITY

                                 (IN THOUSANDS)
<Table>
<Caption>

                                                                                         CLASS A
                                                                                      COMMON STOCK          ADDITIONAL
                                                                                ------------------------      PAID-IN
                                                                                 SHARES         AMOUNT        CAPITAL
                                                                                ---------      ---------     ---------

<S>                                                                             <C>            <C>           <C>
      BALANCE AT DECEMBER 31, 1999 .......................................         10,000      $     100     $ 166,791
      Comprehensive loss:
         Net loss ........................................................             --             --            --
         Translation adjustment ..........................................             --             --            --
              Total comprehensive loss....................................
      Common stock issued to employees ...................................             28             --           172
      Common stock issued upon exercise of warrants ......................             89              1            --
                                                                                ---------      ---------     ---------
      BALANCE AT DECEMBER 31, 2000 .......................................         10,117            101       166,963
      Comprehensive loss:
         Net loss ........................................................             --             --            --
         Translation adjustment ..........................................             --             --            --
              Total comprehensive loss
      Common stock issued upon exercise of warrants ......................            314              3            --
      Restricted common stock issued to officer ..........................             75              1           296
                                                                                ---------      ---------     ---------
      BALANCE AT DECEMBER 31, 2001 .......................................         10,506      $     105     $ 167,259
                                                                                =========      =========     =========
      Comprehensive loss:
         Net loss ........................................................             --             --            --
         Translation adjustment ..........................................             --             --            --
              Total comprehensive loss ...................................             --             --            --
      Common stock issued upon Private Placement, net of
          issuance costs of $9,160 .......................................         12,500            125        90,715
      Common stock issued upon exercise of warrants ......................            112              1            --
      Common stock issued upon exercise of options .......................              6             --            42
      Amortization of unearned compensation ..............................             --             --            --
                                                                                ---------      ---------     ---------
      BALANCE AT DECEMBER 31, 2002 .......................................         23,124      $     231     $ 258,016
                                                                                =========      =========     =========
</Table>


                                      F-7
<PAGE>

                  SEABULK INTERNATIONAL, INC. AND SUBSIDIARIES
           CONSOLIDATED STATEMENTS OF CHANGES IN STOCKHOLDERS' EQUITY
                                 (IN THOUSANDS)

<Table>
<Caption>
                                                            ACCUMULATED                     RETAINED
                                                               OTHER                        EARNINGS
                                                           COMPREHENSIVE     UNEARNED     (ACCUMULATED
                                                               LOSS        COMPENSATION     DEFICIT)        TOTAL
                                                         ---------------   ------------   ------------    ----------
<S>                                                      <C>               <C>            <C>             <C>
BALANCE AT DECEMBER 31, 1999 ........................      $      --       $      --        $  (1,565)    $  165,326
Comprehensive loss:
  Net loss ..........................................             --              --          (28,952)       (28,952)
  Translation adjustment ............................            (33)             --               --            (33)
                                                                                                           ---------
       Total comprehensive loss .....................             --              --               --        (28,985)
Common stock issued to employees ....................             --              --               --            172
Common stock issued upon exercise of warrants .......             --              --               --              1
                                                           ---------       ---------        ---------      ---------
BALANCE AT DECEMBER 31, 2000 ........................            (33)             --          (30,517)       136,514
Comprehensive loss:
  Net loss ..........................................             --              --          (11,961)       (11,961)
  Translation adjustment.............................             32              --               --             32
                                                           ---------       ---------        ---------      ---------
        Total comprehensive loss ....................             --              --               --        (11,929)
Common stock issued upon exercise of warrants .......             --              --               --              3
Restricted common stock issued to officer ...........             --            (198)              --             99
                                                           ---------       ---------        ---------       ---------
BALANCE AT DECEMBER 31, 2001 ........................      $      (1)      $    (198)       $ (42,478)      $ 124,687
                                                           =========       =========        =========       =========
Comprehensive loss:
   Net loss .........................................             --              --         (38,870)        (38,870)
   Translation adjustment ...........................              1              --              --               1
                                                                                                           ---------
        Total comprehensive loss ....................             --              --              --         (38,869)
Common Stock issued upon Private Placement, net of
   issuance costs of $9,160 .........................             --              --              --          90,840
Common stock issued upon exercise of warrants .......             --              --              --               1
Common stock issued upon exercise of options ........             --              --              --              42
Amortization of unearned compensation ...............             --              99              --              99
                                                           ---------       ---------       ---------       ---------
BALANCE AT DECEMBER 31, 2002 ........................      $      --       $     (99)      $ (81,348)      $ 176,800
                                                           =========       =========       =========       =========
</Table>

   See notes to consolidated financial statements.



                                      F-8
<PAGE>


                  SEABULK INTERNATIONAL, INC. AND SUBSIDIARIES

                   NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

1.   ORGANIZATION AND BASIS OF PRESENTATION

     Seabulk International, Inc. and subsidiaries (f/k/a Hvide Marine
Incorporated)(collectively, the "Company") provides marine support and
transportation services, serving primarily the energy and chemical industries.
The Company operates offshore energy support vessels, principally in the U.S.
Gulf of Mexico, the Arabian Gulf, offshore West Africa, and Southeast Asia. The
Company's fleet of tankers transports petroleum products and specialty chemicals
in the U.S. domestic trade. The Company also provides commercial tug services in
several ports in the southeastern U.S.

     The Company derives substantial revenue from international operations,
primarily under U.S. dollar-denominated contracts with major international oil
companies. Risks associated with operating in international markets include
vessel seizure, foreign exchange restrictions, foreign taxation, political
instability, nationalization, civil disturbances, and other risks that may limit
or disrupt markets.

     The accompanying consolidated financial statements include the accounts of
Seabulk International, Inc. and its subsidiaries, both majority and
wholly-owned. All intercompany transactions and balances have been eliminated in
the consolidated financial statements.

                                      F-9
<PAGE>
2.   SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES

     Revenue. Revenue is generally recorded when services are rendered, the
Company has a signed charter agreement or other evidence of an arrangement,
pricing is fixed or determinable and collection is reasonably assured. For the
majority of the offshore energy and towing segments, revenues are recorded on a
daily basis as services are rendered. For the marine transportation segment,
revenue is earned under time charters or affreightment/voyage contracts. Revenue
from time charters is earned and recognized on a daily basis. Certain time
charters contain performance provisions, which provide for decreased fees based
upon actual performance against established targets such as speed and fuel
consumption. Recorded revenue is based on actual performance.
Affreightment/voyage contracts are contracts for cargoes that are committed on a
12 to 30 month basis, with minimum and maximum cargo tonnages specified over the
period at fixed or escalating rates per ton. Revenue and voyage expenses for
these affreightment contracts are recognized based upon the percentage of voyage
completion. The percentage of voyage completion is based on the number of voyage
days worked at the balance sheet date divided by the total number of days
expected on the voyage.

     Cash and Cash Equivalents. The Company considers all highly liquid
investments with an original maturity of three months or less to be cash
equivalents. Cash equivalents consist of money market instruments and overnight
investments. The credit risk associated with cash and cash equivalents is
considered low due to the high credit quality of the financial institutions.

    Restricted Cash. At December 31, 2002 and 2001, restricted cash
consisted of fixed deposits required in our foreign locations that allow our
banks to issue short-term tender bonds. The bonds are issued during the process
of securing contracts and have expiration dates ranging from three months to
one year. Upon expiration of the bonds, the funds are returned to the Company.

     Accounts Receivable. Substantially all of the Company's accounts receivable
are due from entities that operate in the oilfield industry. The Company
performs ongoing credit evaluations of its trade customers and generally does
not require collateral. Expected credit losses are provided for in the
consolidated financial statements and have been within management's
expectations. Two customers each accounted for 7.0% and one customer accounted
for 11.0% of the Company's total revenue for the years ended December 31, 2002
and 2001, respectively. During the years ended December 31, 2002, 2001, and
2000, the Company wrote off accounts receivable of approximately $0.6 million,
$0.7 million and $0.6 million, respectively.


                                      F-10
<PAGE>

     Insurance Claims Receivable. Insurance claims receivable represents costs
incurred in connection with insurable incidents for which the Company expects
are probable of being reimbursed by the insurance carrier(s), subject to
applicable deductibles. Deductible amounts related to covered incidents are
generally expensed in the period of occurrence of the incident. Expenses
incurred for insurable incidents in excess of deductibles are recorded as
receivables pending the completion of all repair work and administrative claims
process. The credit risk associated with insurance claims receivable is
considered low due to the high credit quality and funded status of the insurance
clubs in which the Company participates. Insurance claims receivable
approximated $4.1 million and $12.0 million at December 31, 2002 and 2001,
respectively, and is included in Other Receivables.

     Marine Operating Supplies. Such amounts consist of fuel and supplies that
are recorded at cost and charged to operating expenses as consumed.

     Impairment of Long-Lived Assets. The Company accounts for the impairment of
long-lived assets under the provisions of Statement of Financial Accounting
Standards ("SFAS") No. 144, Accounting For the Impairment or Disposal of
Long-Lived Asset, which requires impairment losses to be recorded on long-lived
assets used in operations when indications of impairment are present and the
estimated undiscounted cash flows to be generated by those assets are less than
the assets' carrying value. It also establishes one accounting model to be used
for long-lived assets to be disposed of by sale and broadens the presentation of
discontinued operations to include more disposal transactions. If the carrying
value of the assets will not be recoverable, as determined by the estimated
undiscounted cash flows, the carrying value of the assets is reduced to fair
value. Generally, fair value will be determined using valuation techniques such
as expected discounted cash flows or appraisals, as appropriate.

     Assets Held for Sale. It is Company policy to make available for sale
vessels and equipment considered by management as excess and no longer necessary
for the operations of the Company. In accordance with SFAS No. 144, these assets
are valued at the lower of carrying value or fair value less costs to sell.
Also, depreciation expense for these assets is terminated at the time of the
reclassification. Total assets held for sale (primarily assets in the offshore
energy segment) were approximately $2.2 million and $11.4 million at December
31, 2002 and 2001, respectively, and are included in other assets in the
accompanying consolidated balance sheets.

     Vessels and Equipment. Vessels and equipment are stated at cost less
accumulated depreciation. Depreciation is computed using the straight-line
method over the estimated useful lives of the assets. At the time property is
disposed of, the assets and related accumulated depreciation are removed from
the accounts, and any resulting gain or loss is charged to other income. Major
renewals and betterments that extend the life of the vessels and equipment are
capitalized. Maintenance and repairs are expensed as incurred except for
drydocking expenditures.

     Vessels under capital leases are amortized over the lesser of the lease
term or their estimated useful lives and included in depreciation expense.
Included in vessels and equipment at December 31, 2002 and 2001 are vessels
under capital leases of approximately $36.0 million and $45.4 million, net of
accumulated amortization of approximately $3.7 million and $3.3 million,
respectively.


                                      F-11
<PAGE>

     Listed below are the estimated remaining useful lives of vessels and
equipment at December 31, 2002:

<Table>
<Caption>
                                                                  REMAINING
                                                                 USEFUL LIVES
                                                                 ------------
                                                                  (IN YEARS)
<S>                                                               <C>
               Supply boats ....................................     3-24
               Crewboats .......................................     2-23
               Anchor handling tug/supply vessels ..............     1-13
               Other ...........................................     1-8
               Tankers(1) ......................................     3-26
               Tugboats ........................................     1-37
               Furniture and equipment .........................     1-8
</Table>
               ------------------------
               (1)  Range in years is determined by the Oil Pollution Act of
                    1990 and other factors

     Deferred Costs. Deferred costs primarily represent drydocking and financing
costs. Substantially all of the Company's vessels must be periodically drydocked
and pass certain inspections to maintain their operating classification, as
mandated by certain maritime regulations. Costs incurred to drydock the vessels
are deferred and amortized over the period to the next drydocking, generally 30
to 36 months. Drydocking costs are comprised of painting the vessel hull and
sides, recoating cargo and fuel tanks, and performing other engine and equipment
maintenance activities to bring the vessels into compliance with classification
standards. Deferred financing costs are amortized over the term of the related
borrowings using the effective interest method. At December 31, 2002 and 2001,
deferred costs included unamortized drydocking costs of approximately $27.2
million and $29.4 million, respectively, and net deferred financing costs of
$11.0 million and $19.6 million, respectively.

     Accrued Liabilities. Accrued liabilities included in current liabilities
consist of the following at December 31, (in thousands):

<Table>
<Caption>
                                                        2002          2001
                                                      --------     --------
<S>                                                   <C>          <C>
     Voyage operating expenses ..................      $10,320      $ 9,892
     Foreign taxes ..............................       14,966       10,626
     Payroll and benefits .......................        6,848        8,068
     Deferred voyage revenue ....................          933        1,451
     Professional services ......................          473        1,267
     Litigation, claims and settlements .........          106          200
     Insurance ..................................        4,703        3,667
     Other ......................................        3,832        3,548
                                                       -------      -------
       Total ....................................      $42,181      $38,719
                                                       =======      =======
</Table>
                                      F-12
<PAGE>


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

     On December 31, 2002, the FASB issued SFAS No. 148, Accounting for
Stock-Based Compensation -- Transition and Disclosure. SFAS No. 148 amends SFAS
123 to provide alternative methods of transition to the fair value method of
accounting for stock-based employee compensation. In addition, this statement
amends the disclosure provisions of SFAS 123 to require expanded disclosure of
the effects of an entity's accounting policy with respect to stock-based
employee compensation on reported net income and earnings per share in annual
and interim financial statements.

     Had compensation expense for the stock option grants been determined based
on the fair value at the grant date for awards consistent with the methods of
SFAS No. 123, the Company's net loss would have increased to the pro forma
amounts presented below for 2002, 2001 and 2000:
<Table>
<Caption>

                                                        2002          2001          2000
                                                    ----------    ----------     ---------
<S>                                                 <C>           <C>           <C>
     Net loss per common share--assuming dilution:
     As reported .................................   $   (2.72)     $  (1.16)     $  (2.89)
     Pro forma ...................................   $   (2.80)        (1.27)        (3.16)

</Table>

     Income Taxes. The Company files a consolidated tax return with
substantially all corporate subsidiaries; the other subsidiaries file separate
income tax returns. Each partnership files a separate tax return. Deferred
income tax assets and liabilities are determined based on differences between
financial reporting and tax bases of assets and liabilities, and are measured
using the enacted tax rates and laws in effect when the differences are expected
to reverse. The effect on deferred tax assets and liabilities of a change in tax
rates is recognized in income in the period that includes the enactment date.

     Net Loss Per Share. Net loss per common share is computed in accordance
with SFAS No. 128, Earnings Per Share, which requires the reporting of both net
loss per common share and diluted net loss per common share. The calculation of
net loss per common share is based on the weighted average number of common
shares outstanding and therefore excludes any dilutive effect of stock options
and warrants while diluted net loss per common share includes the dilutive
effect of stock options and warrants, unless the effects are antidilutive.

     Foreign Currency Translation. In accordance with SFAS No. 52, Foreign
Currency Translation, assets and liabilities denominated in foreign currencies
are translated into U.S. dollars at the rate of exchange at the balance sheet
date, while revenue and expenses are translated at the weighted average rates
prevailing during the respective years. Components of stockholders' equity are
translated at historical rates. Translation adjustments are deferred in
accumulated other comprehensive loss, which is a separate component of
stockholders' equity. The Company's foreign subsidiaries use the U.S. dollar as
their functional currency and substantially all external transactions are
denominated in U.S. dollars. Gains and losses resulting from changes in exchange
rates from year to year are insignificant for all years presented and are
included in the accompanying consolidated statements of operations.

     Reorganization Items. Upon emergence from Chapter 11 Bankruptcy Protection
on December 15, 1999, the Company adopted Fresh Start Reporting pursuant to
the provisions of SOP 90-7.

     Estimates. The preparation of financial statements in conformity with
generally accepted accounting principles in the United States requires
management to make estimates and assumptions that affect the reported amounts of
assets and liabilities, the disclosure of assets and liabilities at the date of
the financial statements, and the reported amounts of revenue and expenses
during the periods. Significant estimates have been made by management,
including the allowance for doubtful accounts, useful lives and valuation of
vessels and equipment, realizability of deferred tax assets and certain accrued
liabilities. Actual results will differ from those estimates.

     Comprehensive Loss. SFAS No. 130, Reporting Comprehensive Income,
establishes standards for reporting and the display of comprehensive loss, which
is defined as the change in equity arising from non-owner sources. Comprehensive
loss consists of net loss and foreign currency translation adjustments.
Comprehensive loss is reflected in the consolidated statement of changes in
stockholders' equity.

     Recent Pronouncements. In April 2002, the FASB issued SFAS No. 145,
Rescission of FASB Statements No. 4, 44 and 64, Amendment of FASB Statement No.
14, and Technical Corrections, which



                                      F-13
<PAGE>

eliminates the requirement that gains and losses from the extinguishment of debt
be aggregated and, if material, classified as an extraordinary item, net of the
related income tax effect, and eliminates an inconsistency between the
accounting for sale-leaseback transactions and certain lease modifications that
have economic effects that are similar to sale-leaseback transactions.
Subsequent to the January 1, 2003 adoption date of the standard, the Company
will be required to reclassify to continuing operations amounts previously
reported as extinguishments of debt.

     In June 2002, the FASB issued SFAS No. 146, Accounting for Costs Associated
with Exit or Disposal Activities, which addresses the financial accounting and
reporting for costs associated with exit or disposal activities. SFAS No. 146 is
effective for fiscal years beginning after December 31, 2002. The adoption of
the standard is not expected to have a significant impact on the Company.

     In June 2001, the Accounting Executive Committee of the American Institute
of Certified Public Accountants issued an exposure draft of a proposed Statement
of Position ("SOP") entitled Accounting for Certain Costs and Activities Related
to Property, Plant and Equipment. Under the proposed SOP, the Company would
expense major maintenance costs as incurred and prohibit the use of the deferral
of the entire cost of a planned major maintenance activity. Currently, the costs
incurred to drydock the Company's vessels are deferred and amortized on a
straight-line basis over the period to the next drydocking, generally 30 to 36
months. The proposed SOP would be effective for fiscal years beginning after
June 15, 2002. Management has determined that this SOP, if issued as proposed,
would have a material effect on the consolidated financial statements. In the
year of adoption, the Company would write-off the net book value of the deferred
drydocking costs and record the write off as a change in accounting principle
($27.2 million as of December 31, 2002). Additionally, all drydock expenditures
incurred after the adoption of the SOP would be expensed as incurred.

3.   LONG-TERM DEBT

     Long-term debt consists of the following at December 31 (in thousands):
<Table>
<Caption>
                                                   2002            2001
                                                ---------        ---------
<S>                                             <C>              <C>
     New Credit Facility  ...............       $ 178,675        $      --
     Revolving line of credit ...........              --            9,000
     Term loan ..........................              --          154,996
     Title XI debt ......................         234,450          241,616
     Notes payable ......................          22,048           32,729
                                                ---------        ---------
                                                  435,173          438,341
     Less:  current maturities ..........         (24,315)         (38,367)
                                                ---------        ---------
                                                $ 410,858        $ 399,974
                                                =========        =========
</Table>


     On September 13, 2002, the Company completed an agreement with Fortis
Capital Corp. and NIB Capital Bank N.V., as arrangers, for a $180 million senior
secured credit facility (the "New Credit Facility"), which replaced the
Company's existing facility. The New Credit Facility consists of an $80 million
term loan and a $100 million revolving credit facility and has a five-year
maturity. The New Credit Facility replaced the Company's prior bank debt and
Senior Notes.

     The revolving portion of the New Credit Facility is subject to
semi-annual reductions commencing six months after closing. The principal
reductions on the revolving loan are as follows: $10 million each in 2003 and
2004, $20 million in 2005, $25 million in 2006, and $33.7 million in 2007.
The term loan portion is subject to semi-annual reductions commencing 36 months
after closing. The principal reductions on the term loan are as follows: $2.5
million in 2005, $14.5 million in 2006, and $63 million in 2007. Interest on
the loans is payable monthly, with a variable interest rate. The rate is either
a LIBOR or base rate plus a margin based upon certain financial ratios of the


                                      F-14
<PAGE>
Company (5.42% and 5.92% for the revolving loan and term loan, respectively, at
December 31, 2002). In November 2002, the interest rate under the New Credit
Facility was increased by 100 basis points (1%) in accordance with the terms of
the commitment letter with the lending banks to syndicate the New Credit
Facility by November 13, 2002.

     The New Credit Facility is secured by first ship mortgages on substantially
all of the Company's vessels (excluding vessels financed with U.S. Maritime
Administration Title XI financing) and is guaranteed by most of the subsidiaries
of the Company. The New Credit Facility is also secured by second ship mortgages
on two of the Company's tankers and three of the Company's tugs.

     The New Credit Facility is subject to various financial covenants,
including minimum adjusted tangible net worth requirements, minimum ratios of
adjusted EBITDA to adjusted interest expense, and a maximum ratio of adjusted
funded debt to adjusted EBITDA. The Company is required to maintain a minimum
fair market value of collateralized assets of at least 175% of outstanding
borrowings under the New Credit Facility, based upon appraisals which may be
requested not more than once during any 12-month period.

     The Company's five double-hull product and chemical tankers are financed
through Title XI Government Guaranteed Ship Financing Bonds. There are a total
of seven bonds with interest rates ranging from 6.50% to 7.54% that require
principal amortization through June 2024. The aggregate outstanding principal
balance of the bonds was $215.7 million and $220.1 million at December 31, 2002
and 2001, respectively. Principal payments during 2002 and 2001 were $4.4
million and $4.1 million, respectively, and interest payments were $15.1 million
and $15.4 million, respectively.

     Covenants under the Title XI Bond agreements contain financial tests which,
if not met, among other things (1) restrict the withdrawal of capital; (2)
restrict certain payments, including dividends, increases in employee
compensation and payments of other indebtedness; (3) limit the incurrence of
additional indebtedness; and (4) prohibit the Company from making certain
investments or acquiring additional fixed assets. Vessels with a net book value
of $235.1 million, and all contract rights thereof, have been secured as
collateral in consideration of the United States Government guarantee of the
Title XI Bonds.

     The Company is required to make deposits to a Title XI reserve fund based
on a percentage of net income attributable to the operations of the five
double-hull tankers, as defined by the Title XI Bond agreement. Cash held in a
Title XI reserve fund is invested by the trustee of the fund, and any income
earned thereon is either paid to the Company or retained in the reserve fund.
Withdrawals from the Title XI reserve fund may be made for limited purposes,
subject to prior approval from MARAD. In the second quarter of 2003, the first
deposits to the reserve fund are expected to be made. Additionally, according to
the Title XI Financial Agreement, the Company is restricted from formally
distributing excess cash from the operations of the five double-hull tankers
until certain working capital ratios have been reached and maintained.
Accordingly, at December 31, 2002, the Company has approximately $19.5 million
in cash and cash equivalents that are restricted for use for the operations of
the five double-hull tankers and cannot be used to fund the Company's general
working capital requirements, but has approximately $4.3 million which is
available for distribution and is expected to be available for general working
capital purposes of the consolidating Company during the second quarter of 2003.

     As of December 31, 2002 and 2001, other Title XI debt of approximately
$18.8 million and $21.5 million, respectively, was collateralized by first
preferred mortgages on certain vessels and bears interest at rates ranging from
5.4% to 10.1%. The debt is due in semi-annual principal and interest payments
through June 2021. Under the terms of the Other Title XI debt, the Company is
required to maintain a minimum level of working capital, as defined, and comply
with certain other financial covenants. During




                                      F-15
<PAGE>

2002 and 2001, $2.8 million and $4.2 million, respectively, in principal and
$1.7 million and $2.0 million, respectively, in interest were repaid on this
debt.

     The Company has two promissory notes aggregating approximately $19.6
million relating to the purchase of equity interests in the double-hull product
and chemical carriers. The notes bear interest at 8.5%. Semi-annual interest
and principal payments are due through December 2003 on one note and quarterly
principal and interest payments are due through January 2006 on the other. The
promissory notes are collateralized by securities of certain subsidiaries. The
outstanding balance of the notes was $10.2 million and $14.8 million as of
December 31, 2002 and 2001, respectively.

     The Company has various promissory notes relating to the acquisitions of
various vessels. The promissory notes are collateralized by mortgages on certain
vessels and bear interest at rates ranging from 8.1% to 8.5%. The debt is due in
monthly installments of principal and interest through November 2011. The
outstanding balance of the notes was $11.9 million and $13.1 million as of
December 31, 2002 and 2001, respectively.

     At December 31, 2002, the Company had letters of credit outstanding in the
amount of approximately $1.3 million, which expire on various dates through
December 2025.

     The aggregate annual future payments due on the long-term debt as of
December 31, 2002 are as follows (in thousands):

<TABLE>
<CAPTION>

 Years ending December 31:
 -------------------------
<S>                                                                <C>
     2003 .........................................                $ 24,315
     2004 .........................................                  21,431
     2005 .........................................                  33,967
     2006 .........................................                  49,463
     2007 .........................................                 105,425
     Thereafter ...................................                 200,572
                                                                   --------
                                                                   $435,173
                                                                   ========
</TABLE>


                                      F-16
<PAGE>

4.   CAPITAL LEASES

     The Company operates certain vessels and other equipment under leases that
are classified as capital leases. The following is a schedule of future minimum
lease payments under capital leases, including obligations under sale-leaseback
transactions, together with the present value of the net minimum lease payments
as of December 31, 2002 (in thousands):

<TABLE>
<CAPTION>

 Years ending December 31:
--------------------------
<S>                                                                     <C>
     2003 ..........................................               $  5,103
     2004 ..........................................                  4,908
     2005 ..........................................                  4,891
     2006 ..........................................                  3,933
     2007 ..........................................                  3,933
     Thereafter ....................................                 20,292
                                                                   --------
     Total minimum lease payments ..................                 43,060
     Less: amount representing interest ............                (11,307)
                                                                   --------
     Present value of minimum lease payments
      (including current portion of $3,005) ........               $ 31,753
                                                                   ========
</TABLE>


5.   COMMITMENTS AND CONTINGENCIES

LEASE COMMITMENTS

     The Company leases its office facilities and certain vessels under
operating lease agreements, which expire at various dates through 2013. Rent
expense was approximately $4.5 million, $4.9 million and $4.4 million for the
years ended December 31, 2002, 2001 and 2000, respectively. Aggregate annual
future payments due under non-cancelable operating leases with remaining terms
in excess of one year as of December 31, 2002 are as follows (in thousands):

<TABLE>
<CAPTION>

 Years ending December 31:
--------------------------
<S>                                                                 <C>
     2003 ..........................................                $ 3,714
     2004 ..........................................                  3,577
     2005 ..........................................                  3,451
     2006 ..........................................                  2,918
     2007 ..........................................                  1,565
     Thereafter ....................................                  3,368
                                                                    -------
                                                                    $18,593
                                                                    =======
</TABLE>


BAREBOAT CHARTER AND SUBLEASE

     During 2001, the Company entered into a ten-year non-cancelable bareboat
charter agreement for a double-hull tanker with a third party (the "charterer").
Beginning in January 2002 (commencement of contract), the charterer has
exclusive possession and control of the vessel. As a result, the charter party
will incur and pay all operating costs during the charter period. The Company
receives a fixed amount per day for the charter of the vessel. Also, the Company
subleases certain office space in Houston, Texas and Tampa, Florida. The
sublease in Houston is expected to terminate in January 2004 and the Tampa
sublease is expected to terminate in December 2006. There are no renewal or
escalation clauses relating to the bareboat charter or subleases.


                                      F-17
<PAGE>

     Future minimum lease receipts under the bareboat charter and sublease as of
December 31, 2002 (in thousands) are as follows:

<TABLE>
<CAPTION>

 Years ending December 31:
--------------------------
<S>                                                                 <C>
     2003 ..........................................                $ 7,132
     2004 ..........................................                  7,041
     2005 ..........................................                  7,033
     2006 ..........................................                  7,033
     2007 ..........................................                  6,935
     Thereafter ....................................                 28,291
                                                                    -------
                                                                    $63,465
                                                                    =======
</TABLE>

CONTINGENCIES

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

     The Company was sued by Maritime Transportation Development Corporation in
January 2002 in Florida state court in Broward County alleging broker
commissions due since 1998 from charters on two of its vessels, the Seabulk
Magnachem and Seabulk Challenger, under an alleged broker commission agreement.
The claim allegedly continues to accrue. The amount alleged to be due is over
$500,000, but is subject to offset claims and defenses by the Company. The
Company is vigorously defending such charges and believes that it has good
defenses, but the Company cannot predict the ultimate outcome.

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

     At December 31, 2002, approximately 20% of the Company's employees were
members of national maritime labor unions, or are subject to collective
bargaining agreements. Management considers relations with employees to be
satisfactory; however, the deterioration of these relations could have an
adverse effect on the Company's operating results.




                                      F-18
<PAGE>

6.   VESSELS AND EQUIPMENT

         Vessels and equipment are summarized below (in thousands):

<Table>
<Caption>
                                                        YEAR ENDED DECEMBER 31,
                                                        -----------------------
                                                           2002          2001
                                                        ---------     ---------
<S>                                                    <C>            <C>
     Vessels and improvements ......................    $ 678,617     $ 681,599
     Furniture and equipment .......................        9,842        11,729
                                                        ---------     ---------
                                                          688,459       693,328
     Less: accumulated depreciation and amortization     (143,290)     (103,957)
                                                        ---------     ---------
     Vessels and equipment, net ....................    $ 545,169     $ 589,371
                                                        =========     =========
</Table>

     The Company did not acquire any vessels in 2002. In 2001, the Company
acquired one vessel for approximately $2.5 million in cash.

     The Company sold 17 offshore energy support vessels during 2002 for
an aggregate total of $6.8 million and a gain of approximately $55,000. In
2001, the Company sold 25 vessels for proceeds of $6.6 million.

7.   STOCK OPTION PLANS

     In December 1999, the Company adopted the Hvide Marine Incorporated Stock
Option Plan (the "1999 Plan"), a stock option plan which provided certain key
employees of the Company the right to acquire shares of common stock. Pursuant
to the plan, 500,000 shares of the Company's common stock were reserved for
issuance to the participants in the form of nonqualified stock options. The
options expire no later than 10 years from the date of the grant.

     On June 15, 2000, the Company adopted the Amended and Restated Equity
Ownership Plan (the "Plan"). The Plan amends and restates in its entirety the
1999 Plan. Pursuant to the Plan, 800,000 shares of the Company's stock were
reserved for issuance to participants in the form of nonqualified or incentive
stock options, restricted stock grants and other stock related instruments,
subject to adjustment to reflect stock dividends, recapitalizations,
reorganizations and other changes in the capital structure. In December 2001,
the Compensation Committee agreed to amend the Plan by authorizing and reserving
for issuance an additional 500,000 shares to be eligible for grants under the
Plan, bringing the total under the Plan to 1,300,000 shares. The Committee's
action was approved by the shareholders at the Company's Annual Meeting of
Shareholders held on May 14, 2002. The vesting period and certain other terms of
stock options granted under the Plan are determined by the Compensation
Committee. The Plan requires that the option price may not be less than 100% of
the fair market value on the date of grant. The options expire no later than 10
years from the date of grant. There were no options granted under the Plan in
2002, and 283,000 options were granted in 2001. In addition, there were 75,000
shares of restricted stock granted in 2001 under the Plan.


                                      F-19
<PAGE>

     On June 15, 2000, the Company also adopted the Stock Option Plan for
Directors (the "Directors Plan"). Pursuant to the Directors Plan, an aggregate
of 175,000 shares of common stock are authorized and reserved for issuance,
subject to adjustments to reflect stock dividends, recapitalizations,
reorganizations, and other changes in the capital structure of the Company.
Eligible directors as of the effective date of the Plan were granted options to
purchase 10,000 shares of common stock on the first option date, and the
Chairman of the Board received 20,000 options, for a total granted of 80,000.
Eligible directors receive 4,000 and the Chairman receives 8,000 options to
purchase shares of common stock annually, effective as of each Annual Meeting of
Shareholders of the Company commencing May 17, 2001. Under the Plan, the option
price for each option granted is required to be 100% of the fair market value of
common stock on the day after the date of grant. Options granted under the
Director's Plan totaled 32,000 and 32,000 during 2002 and 2001, respectively.

     The following table of data is presented in connection with the stock
option plans:

<Table>
<Caption>

                                                                                YEAR ENDED DECEMBER 31,
                                                 ------------------------------------------------------------------------------
                                                          2002                       2001                      2000
                                                 ------------------------   -----------------------   -------------------------
                                                                WEIGHTED                   WEIGHTED                   WEIGHTED
                                                   NUMBER       AVERAGE       NUMBER       AVERAGE       NUMBER       AVERAGE
                                                     OF         EXERCISE        OF         EXERCISE        OF         EXERCISE
                                                  OPTIONS         PRICE       OPTIONS       PRICE        OPTIONS       PRICE
<S>                                               <C>          <C>           <C>           <C>          <C>           <C>
Options outstanding at beginning of period ....    822,000       $  6.91      604,000       $  8.27      200,000       $  12.47
Granted .......................................     32,000          6.19      315,000          5.61      495,000           7.16
Exercised .....................................     (6,667)         6.31           --            --           --             --
Cancelled .....................................    (72,831)         7.48      (97,000)        10.80      (91,000)         11.33
                                                  --------                    -------                   --------
Options outstanding at end of period ..........    774,502       $  6.84      822,000       $  6.91      604,000       $   8.27
                                                  ========       =======      =======       =======     ========       ========

Options exercisable at end of period ..........    562,856       $  7.30      333,837       $  8.38      207,000       $  12.11
Options available for future grants at end
 of period ....................................    618,831            --      153,000            --      371,000             --

</Table>

                                      F-20
<PAGE>

Summarized information about stock options outstanding as of December 31, 2002
is as follows:
<Table>
<Caption>

                                                                       WEIGHTED                           WEIGHTED
                                    NUMBER OF          REMAINING       AVERAGE           NUMBER OF         AVERAGE
                                     OPTIONS             LIFE          EXERCISE           OPTIONS          EXERCISE
EXERCISE PRICE RANGE               OUTSTANDING        (IN YEARS)        PRICE           EXERCISABLE         PRICE
--------------------               -----------        ----------     -----------        ------------      ----------
<S>                                <C>                 <C>           <C>                <C>               <C>
      Under $6.25                    181,834             9.00        $     4.34            50,844         $     3.95
   $6.25 to $6.31                    366,334             7.49        $     6.26           346,338         $     6.25
   $6.32 to $7.30                     32,000             8.38        $     7.30            32,000         $     7.30
   $7.31 to $7.75                     94,334             8.24        $     7.75            33,674         $     7.75
       Over $7.75                    100,000             3.96        $    12.47           100,000         $    12.47

</Table>

     The weighted average fair value of options granted under the Company's
stock option plans during 2002, 2001 and 2000 was $4.91, $5.54 and $6.65,
respectively. These values are based on the Black-Scholes option valuation
model. Had compensation expense for the stock option grants been determined
based on the fair value at the grant date for awards consistent with the methods
of SFAS No. 123, the Company's net loss would have increased to the pro forma
amounts presented below for 2002, 2001 and 2000 (in thousands, except per share
amounts):
<Table>
<Caption>

                                                        2002          2001          2000
                                                    ----------    ----------     ---------
<S>                                                 <C>           <C>           <C>
     Net loss:
     As reported .................................   $ (38,870)    $ (11,961)    $ (28,952)
     Pro forma ...................................     (39,930)      (13,067)      (31,676)

     Net loss per common share--assuming dilution:
     As reported .................................   $   (2.72)     $  (1.16)     $  (2.89)
     Pro forma ...................................   $   (2.80)        (1.27)        (3.16)

</Table>
     The fair value of each option is estimated on the date of the grant using
the Black-Scholes option-pricing model with the following assumptions applied to
grants in 2002, 2001 and 2000.

<Table>
<Caption>
                                                           2002          2001          2000
                                                           ----         -----         -----
<S>                                                        <C>           <C>           <C>
     Dividend yield .............................          0.0%          0.0%          0.0%
     Expected volatility factor .................         0.72          3.21          1.21
     Approximate risk-free interest rate                  4.25%          5.0%          5.0%
     Expected life (in years) ...................           10            10            10

 </Table>

     The Black-Scholes options valuation model was developed for use in
estimating the fair value of traded options that have no vesting restrictions
and are fully transferable. In addition, option valuation models require the
input of highly subjective assumptions including the expected stock price
volatility. Because changes in the subjective input assumptions can materially
affect the fair value estimate, the existing models, in management's opinion, do
not necessarily provide a reliable single measure of the fair value of the
Company's stock options.


                                      F-21
<PAGE>
8.   EMPLOYEE BENEFIT AND STOCK PLANS

     The Company sponsors a retirement plan and trust (the "Plan") established
pursuant to Section 401(k) of the Internal Revenue Code, which covers
substantially all administrative and non-union employees. Subject to certain
dollar limitations, employees may contribute a percentage of their salaries to
this Plan, and the Company will match a portion of the employees' contributions.
Profit sharing contributions by the Company to the Plan are discretionary.
Additionally, the Company contributed to various union-sponsored, collectively
bargained pension plans for certain crew members in the marine transportation
and towing segments. The plans are not administered by the Company, and
contributions are determined in accordance with provisions of negotiated labor
contracts. The expense resulting from Company contributions to the Plan and
various union-sponsored plans amounted to approximately $3.5 million, $2.9
million and $2.0 million for the years ended December 31, 2002, 2001 and 2000,
respectively.

9.  INCOME TAXES

     The United States and foreign components of income (loss) before income
taxes and extraordinary item are as follows (in thousands):

<Table>
<Caption>
                                                            YEAR ENDED DECEMBER 31,
                                                     -------------------------------------
                                                         2002         2001        2000
                                                     -----------  -----------  -----------
<S>                                                 <C>           <C>          <C>
     United States................................    $(7,755)     $(3,849)     $ (1,502)
     Foreign .....................................      1,350       (2,902)      (22,578)
                                                      -------      -------      --------
       Total .....................................    $(6,405)     $(6,751)     $(24,080)
                                                      =======      =======      ========
</Table>

     The components of the provision for income tax expense (benefit) are as
follows (in thousands):

<Table>
<Caption>
                                                            YEAR ENDED DECEMBER 31,
                                                     -------------------------------------
                                                         2002         2001        2000
                                                     -----------  -----------  -----------
<S>                                                 <C>           <C>          <C>
     Current:
       Federal ..................................     $(1,520)     $    --      $     --
       Foreign ..................................       6,162        5,210         4,872
                                                      -------      -------      --------
          Total current .........................       4,642        5,210         4,872
                                                      -------      -------      --------

     Deferred ...................................          --           --            --
                                                      -------      -------      --------
       Total income tax expense                       $ 4,642      $ 5,210       $ 4,872
                                                      =======      =======      ========
</Table>

                                      F-22
<PAGE>
     A reconciliation of income tax attributable to continuing operations
computed at the U.S. federal statutory tax rates to income tax expense is:

<Table>
<Caption>
                                                               YEAR ENDED DECEMBER 31,
                                                        -----------------------------------
                                                           2002        2001         2000
                                                        ----------   ---------   ---------
<S>                                                     <C>          <C>          <C>
     Income tax expense computed at the
       federal statutory rate.......................       (35)%       (35)%       (35)%
     State income taxes, net of Federal benefit ....        (1)         (1)         (1)
     Foreign taxes in excess of credits recognized..        96          77          20
     Reduction of tax attributes ...................        --          --          --
     Change in valuation allowance .................        11          35          35
     Permanent, non deductible items ...............         1           1           1
                                                          ----        ----        ----
                                                            72%         77%         20%
                                                          ====        ====        ====
</Table>

     The tax effect of temporary differences that give rise to significant
portions of the deferred tax assets and liabilities are as follows (in
thousands):

<Table>
<Caption>
                                                             YEAR ENDED DECEMBER 31,
                                                          --------------------------
                                                             2002             2001
                                                          ---------        ---------
<S>                                                      <C>              <C>
       Deferred income tax assets:
       Allowances for doubtful accounts ............      $   1,606        $     828
       Goodwill ....................................         14,785           17,882
       Accrued compensation ........................            627              733
       Foreign tax credit carryforwards ............         17,809           16,548
       Accrued supplemental insurance premiums .....          1,534               --
       Net operating loss carryforwards ............        123,114           61,509
       Other .......................................          1,783            1,351
                                                          ---------        ---------
          Total deferred income tax assets .........        161,258           98,851
          Less:  valuation allowance ...............        (75,177)         (65,263)
                                                          ---------        ---------
          Net deferred income tax assets ...........         86,081           33,588

     Deferred income tax liabilities:
       Property differences ........................         75,192           28,885
       Deferred drydocking costs ...................          9,489            3,768
       Other .......................................          1,400              935
                                                          ---------        ---------
          Total deferred income tax liabilities.....         86,081           33,588
                                                          ---------        ---------
          Net deferred income tax assets ...........      $      --        $      --
                                                          =========        =========
</Table>

     SFAS No. 109 requires a valuation allowance to reduce the deferred tax
assets reported if, based on the weight of the evidence, it is more likely than
not that some portion or all of the deferred tax assets will not be realized.
After consideration of all the evidence, both positive and negative, management
determined that a valuation allowance of approximately $75.2 million and $65.3
million was necessary at December 31, 2002, and 2001, respectively, to reduce
the deferred tax assets to the amount that will more likely than not be
realized. After application of the valuation allowance, the Company's net
deferred tax assets and liabilities are zero at December 31, 2002 and 2001. The
net change in the total valuation allowance was an increase of approximately
$9.9 million and $7.9 million in 2002 and 2001, respectively.


                                      F-23
<PAGE>

     Subsequently, recognized tax benefits relating to the valuation
allowance for deferred tax assets as of December 31, 2002 will be allocated as
follows (in thousands):

<TABLE>
<S>                                                                                           <C>
     Income tax benefit that would be reported in the consolidated statement of operations    $31,925
     Additional paid-in capital ..........................................................     43,252
                                                                                              -------
          Total ..........................................................................    $75,177
                                                                                              =======
</TABLE>


     The Company has recognized a deferred tax asset of $1.5 million for a 2001
federal net operating loss carryback. On March 9, 2002, the Job Creation and
Worker Assistance Act of 2002 was signed into law, which allows a 2001 federal
net operating loss to be carried back five years instead of two years. This new
law converted the 2001 federal net operating loss carryforward into a federal
net operating loss that will be fully absorbed within the five-year carryback
period.

     The stock issuance in September 2002 (see Note 10) resulted in an
"ownership change" as broadly defined in Section 382 of the Internal Revenue
Code. As the result of the ownership change, utilization of net operating loss
carryforwards under federal income tax laws and certain other beneficial tax
attributes will be subject to an annual limitation. The limitation of net
operating losses that can be utilized annually will equal the product of
applicable interest rate mandated under federal income tax laws and the value at
the time of the ownership change.

     At December 31, 2002, the Company had a net operating loss carryforward of
approximately $350.5 million, which is available to offset future federal
taxable income through 2022. The Company also has foreign tax credit
carryforwards, expiring in years 2003 through 2007, of approximately $17.7
million, which are available to reduce future federal income tax liabilities.
The annual limitation under Section 382 would limit utilization of the Company's
pre- September net operating losses to a maximum of approximately $4.2 million
annually through their expiration date. A substantial portion of net operating
loss carryforwards and tax credits may not be utilized due to this annual
limitation.

     The Company has a tax basis in its assets in excess of its basis for
financial reporting purposes that will generate tax deductions in future
periods. As a result of a "change in ownership" in December 1999, under the
Internal Revenue Code Section 382, the Company's ability to utilize
depreciation, amortization and other tax attributes will be limited to
approximately $9.5 million per year through 2004. This limitation is applied to
all net built-in losses, which existed on the "change of ownership" date
(December 15, 1999), including all items giving rise to a deferred tax asset.

10.  STOCKHOLDERS' EQUITY

        In December 1999, all classes of the Predecessor Company's equity
securities were canceled. Pursuant to a previous, pre-1999 Equity Ownership
Plan, prior to December 1999, shares of the Predecessor Company's Class B
common stock were converted to Class A common stock. Holders of Predecessor
Company Class A common stock and holders of certain rights to obtain common
stock under the Predecessor Company's compensation plans were issued 125,000
Class A warrants to purchase common stock of the Company on a pro rata basis.
The warrants have a four-year term and an exercise price of $38.49 per share.

     Pursuant to the articles of incorporation of the Company, as amended in
2002, there are 40 million shares of common stock authorized for issuance.


                                      F-24
<PAGE>

     In December 1999, holders of the Predecessor Company's Preferred Securities
received 200,000 shares of Company common stock and 125,000 Class A warrants.
The warrants have a four-year term and an exercise price of $38.49 per share.
There were no Class A warrant exercises during 2002 and 2001. The remaining
weighted average contractual life is one year at December 31, 2002.

     In December 1999, as part of the Company's reorganization under Chapter 11
bankruptcy, the holders of the Predecessor Company's Senior Notes received 9.8
million shares of Company common stock. The holders of Senior Notes received
536,193 common stock purchase warrants ("the Noteholder Warrants"). The warrants
have a seven and one-half year term and an exercise price of $0.01 per warrant.
Also in connection with the former Senior Notes, the Company issued an
additional 187,668 Noteholder Warrants to an investment advisor. The warrants
have a seven and one-half year term and an exercise price of $0.01 per warrant.
During the years ended December 31, 2002 and 2001, 112,000 and 313,000
Noteholder Warrants were exercised, respectively. The amount of outstanding
Noteholder Warrants amounted to approximately 210,000 at December 31, 2002. The
weighted average contractual life is 4.5 years at December 31, 2002.

     All of the Company's outstanding warrants contain customary anti-dilution
provisions for issuances of common stock, splits, combinations and certain other
events, as defined. In addition, the outstanding warrants have certain
registration rights, as defined.

     The Company is authorized to issue 5 million shares of preferred stock, no
par value per share. The Company has no present plans to issue such shares.

     At December 31, 2002 approximately 619,000 shares of Common Stock were
reserved for issuance under the Company's Amended and Restated Equity Ownership
Plan and the Stock Option Plan for Directors.

     On September 13, 2002, the Company completed the private placement of 12.5
million shares of newly issued Seabulk common stock at a cash price of $8.00 per
share (the "Private Placement") to a group of investors including an entity
associated with DLJ Merchant Banking Partners III, L.P., an affiliate of CSFB
Private Equity, and entities associated with Carlyle/Riverstone Global Energy
and Power Fund I, L.P., an affiliate of The Carlyle Group of Washington, D.C.
The stock issuance was previously approved by the Company's Shareholders at a
Special Meeting held on September 5, 2002.

     The new investors also purchased, for $8.00 per share, 5.1 million of the
Company's common stock and common stock purchase warrants beneficially owned by
accounts managed by Loomis, Sayles



                                      F-25
<PAGE>

& Co., L.P., an SEC-registered investment advisor. Taken together, the two
transactions gave the new investors approximately 76% of the Company's
outstanding common stock. Pursuant to the agreement with the investors, the
Company's Board of Directors has been restructured to permit the new investors
to hold a majority of seats on the Board and to give minority shareholders
certain minority rights.

11.  NET LOSS PER SHARE

     The following table sets forth the computation of basic and diluted net
loss per share before extraordinary items (in thousands, except per share
amounts):
<Table>
<Caption>

                                                                                  YEAR ENDED DECEMBER 31,
                                                                      ---------------------------------------------
                                                                         2002              2001             2000
                                                                      ----------        ----------       ----------
<S>                                                                   <C>               <C>               <C>
Numerator:
Numerator for basic and diluted loss per share--net loss before
   extraordinary item available to common shareholders............    $  (38,870)       $  (11,961)       $  (28,952)
                                                                      ==========        ==========        ==========

Denominator:
Denominator for basic and diluted loss per share--weighted
   average shares.................................................        14,277            10,277            10,034
                                                                      ==========        ==========        ==========

Net loss per common share before extraordinary item...............    $    (2.72)       $    (1.16)       $    (2.89)
                                                                      ==========        ==========        ==========
Net loss per common share before extraordinary item--assuming
  Dilution........................................................    $    (2.72)       $    (1.16)       $    (2.89)
                                                                      ==========        ==========        ==========
</Table>

     The weighted average diluted common shares outstanding for fiscal 2002,
2001 and 2000 excludes 774,502, 822,000 and 604,000 stock options, respectively.
Additionally, 460,000, 572,000 and 885,000 warrants in 2002, 2001 and 2000,
respectively, are excluded from the weighted average diluted common shares
outstanding. These common stock equivalents are antidilutive because the Company
incurred net losses for 2002, 2001 and 2000.

12.  SEGMENT AND GEOGRAPHIC DATA

     The Company organizes its business principally into three segments. The
accounting policies of the reportable segments are the same as those described
in Note 2. The Company does not have significant intersegment transactions.

     These segments and their respective operations are as follows:

     Offshore Energy Support (Seabulk Offshore) - Offshore energy support
     includes vessels operating in U.S. and foreign locations used primarily to
     transport materials, supplies, equipment and personnel to drilling rigs and
     to support the construction, positioning and ongoing operations of oil and
     gas production platforms.

     Marine Transportation Services (Seabulk Tankers) - Marine transportation
     services includes oceangoing vessels used to transport chemicals, fuel and
     other petroleum products, primarily from chemical manufacturing plants,
     refineries and storage facilities



                                      F-26
<PAGE>

     along the U.S. Gulf of Mexico coast to industrial users and distribution
     facilities in and around the Gulf of Mexico, Atlantic and Pacific coast
     ports. Certain of the vessels also transport crude oil within Alaska and
     among Alaska, Pacific coast and Hawaiian ports.

     Towing (Seabulk Towing) - Harbor and offshore towing services are provided
     by tugs to vessels utilizing the ports in which the tugs operate, and to
     vessels at sea to the extent required by offshore commercial contract
     opportunities and by environmental regulations, casualty or other
     emergency.

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

     Revenue by segment and geographic area consists only of services provided
to external customers, as reported in the Statements of Operations. Income from
operations by geographic area represents net revenue less applicable costs and
expenses related to that revenue. Unallocated expenses are primarily comprised
of general and administrative expenses of a corporate nature. Identifiable
assets represent those assets used in the operations of each segment or
geographic area, and unallocated assets include corporate assets.




                                      F-27
<PAGE>

     The following schedule presents information about the Company's operations
in these segments (in thousands):

<Table>
<Caption>
                                                                                                   YEAR ENDED DECEMBER 31,
                                                                                         -----------------------------------------
                                                                                           2002            2001            2000
                                                                                         ---------       ---------       ---------
<S>                                                                                      <C>             <C>            <C>
REVENUE
  Offshore energy support ..........................................................     $ 171,479       $ 191,178       $ 151,395
  Marine transportation services ...................................................       121,371         122,059         135,982
  Towing ...........................................................................        31,147*         33,493*         33,106*
                                                                                         ---------       ---------       ---------
     TOTAL .........................................................................     $ 323,997       $ 346,730       $ 320,483
                                                                                         =========       =========       =========

OPERATING EXPENSES
  Offshore energy support ..........................................................     $  99,572       $  98,549       $  94,331
  Marine transportation services ...................................................        63,823*         76,555*         91,104*
  Towing ...........................................................................        18,909          20,130          19,791
  General corporate ................................................................           254           4,093              --
                                                                                         ---------       ---------       ---------
     TOTAL .........................................................................     $ 182,558       $ 199,327       $ 205,226
                                                                                         =========       =========       =========

DEPRECIATION, AMORTIZATION, DRYDOCKING AND WRITE-DOWN OF ASSETS HELD FOR SALE
  Offshore energy support ..........................................................     $  43,305       $  37,550       $  31,478
  Marine transportation services ...................................................        18,159          19,311          14,417
  Towing ...........................................................................         3,222           2,910           2,919
  General corporate ................................................................         1,690           1,542           1,457
                                                                                         ---------       ---------       ---------
     TOTAL .........................................................................     $  66,376       $  61,313       $  50,271
                                                                                         =========       =========       =========

INCOME (LOSS) FROM OPERATIONS
  Offshore energy support ..........................................................     $  10,156       $  39,151       $  10,389
  Marine transportation services ...................................................        34,686          20,952          23,893
  Towing ...........................................................................         4,519           6,169           5,096
  General corporate ................................................................       (12,955)        (17,184)        (14,022)
                                                                                         ---------       ---------       ---------
     TOTAL .........................................................................     $  36,406       $  49,088       $  25,356
                                                                                         =========       =========       =========

NET INCOME (LOSS)

  Offshore energy support ..........................................................     $ (16,912)      $   5,566       $ (30,920)
  Marine transportation services ...................................................        17,346            (278)          7,200
  Towing ...........................................................................          (151)            396           2,906
  General corporate ................................................................       (39,153)**      (17,645)         (8,138)
                                                                                         ---------       ---------       ---------
     TOTAL .........................................................................     $ (38,870)      $ (11,961)      $ (28,952)
                                                                                         =========       =========       =========
</Table>

     *   Net of elimination of intersegment towing revenue and intersegment
         marine transportation operating expenses of $0.3 million, $2.1 million
         and 2.6 million for the years ended December 31, 2002 and 2001 and
         2000, respectively.

    **   Includes loss on early extinguishment of debt of $27.8 million in the
         third quarter of 2002 (see Note 14).


                                      F-28
<PAGE>
<Table>
<Caption>
                                                   CONSOLIDATED BALANCE SHEET INFORMATION
                                                             AS OF DECEMBER 31,
                                                    -------------------------------------
                                                       2002                      2001
                                                    ---------                  ---------
<S>                                                <C>                        <C>
     IDENTIFIABLE ASSETS
       Offshore energy support .........            $ 286,609                  $ 326,608
       Marine transportation services ..              323,611                    334,272
       Towing ..........................               64,511                     64,931
       Unallocated .....................               28,364                     18,954
                                                    ---------                  ---------
          TOTAL ........................            $ 703,095                  $ 744,765
                                                    =========                  =========

     VESSELS AND EQUIPMENT
       Offshore energy support .........            $ 277,208                  $ 281,933
       Marine transportation services ..              341,069                    341,087
       Towing ..........................               61,241                     61,317
                                                    ---------                  ---------
          Total ........................              679,518                    684,337
       Construction in progress ........                   99                        837
       General corporate ...............                8,842                      8,154
                                                    ---------                  ---------
       Gross vessels and equipment .....              688,459                    693,328
          Less accumulated depreciation              (143,290)                  (103,957)
                                                    ---------                  ---------
            TOTAL ......................            $ 545,169                  $ 589,371
                                                    =========                  =========

     CAPITAL EXPENDITURES AND DRYDOCKING
       Offshore energy support .........            $  19,532                  $  30,959
       Marine transportation services ..                6,313                      6,597
       Towing ..........................                1,315                        951
       Unallocated .....................                   34                        224
                                                    ---------                  ---------
          TOTAL ........................            $  27,194                  $  38,731
                                                    =========                  =========
</Table>

     The Company is engaged in providing marine support and transportation
services in the United States and foreign locations. The Company's foreign
operations are conducted on a worldwide basis, primarily in West Africa, the
Arabian Gulf, Southeast Asia and Mexico, with assets that are highly mobile.
These operations are subject to risks inherent in operating in such locations.

     The vessels generating revenue from offshore and marine transportation
services move regularly and routinely from one country to another, sometimes in
different continents depending on the charter party. Because of this asset
mobility, revenue and long-lived assets attributable to the Company's foreign
operations in any one country are not material, as defined in SFAS No. 131.

     There were no customers from which the Company derived more than 10% of its
total revenue for the year ended December 31, 2002. One customer, CITGO
Petroleum, accounted for 11.0% and 12.0% of the Company's total revenue for the
years ended December 31, 2001 and 2000. The revenue received from CITGO was
approximately $38.0 million and $38.6 million in 2001 and 2000, respectively,
which related to the marine transportation services segment.


                                      F-29
<PAGE>
     The following table presents selected financial information pertaining to
the Company's geographic operations for 2002, 2001 and 2000 (in thousands):

<Table>
<Caption>
                                                      YEAR ENDED DECEMBER 31,
                                                ------------------------------------
                                                  2002          2001          2000
                                                --------      --------      --------
<S>                                            <C>           <C>           <C>
     REVENUE

       Domestic ...........................     $200,008      $239,238      $223,579
       Foreign
          West Africa .....................       84,576        69,305        48,268
          Middle East .....................       23,683        22,450        34,242
          Southeast Asia ..................       15,730        15,737        14,394
                                                --------      --------      --------
     CONSOLIDATED REVENUE .................     $323,997      $346,730      $320,483
                                                ========      ========      ========
</Table>

<Table>
<Caption>
                                               CONSOLIDATED BALANCE SHEET INFORMATION
                                                         AS OF DECEMBER 31,
                                              --------------------------------------
                                                    2002                     2001
                                                 ---------                 ---------
<S>                                             <C>                       <C>
     IDENTIFIABLE ASSETS

       Domestic ...........................      $ 510,483                 $ 551,915
       Foreign
          West Africa .....................        107,909                   117,725
          Middle East .....................         44,912                    40,955
          Southeast Asia ..................         11,427                    15,216
       Other ..............................         28,364                    18,954
                                                 ---------                 ---------
          TOTAL ...........................      $ 703,095                 $ 744,765
                                                 =========                 =========

     VESSELS AND EQUIPMENT

       Domestic ...........................      $ 542,003                 $ 545,613
       Foreign
          West Africa .....................         94,645                    94,285
          Middle East .....................         31,542                    27,887
          Southeast Asia ..................         11,427                    16,771
                                                 ---------                 ---------
                                                   679,617                   684,556
       General corporate ..................          8,842                     8,772
                                                 ---------                 ---------
                                                   688,459                   693,328
       Less: accumulated depreciation .....       (143,290)                 (103,957)
                                                 ---------                 ---------
          TOTAL ...........................      $ 545,169                 $ 589,371
                                                 =========                 =========
</Table>

13.  FAIR VALUE OF FINANCIAL INSTRUMENTS

     The following methods and assumptions were used to estimate the fair value
of financial instruments included in the following categories:

     Cash, Cash Equivalents, Restricted Cash, Accounts Receivable, Accounts
Payable and Accrued Liabilities. The carrying amounts reported in the balance
sheet approximate fair value due to the short-term nature of such instruments.


                                      F-30
<PAGE>

     New Credit Facility and Title XI. The New Credit Facility and Title XI
obligations provide for interest and principal payments at various rates and
dates as discussed in Note 3. The Company estimates the fair value of such
obligations using a discounted cash flow analysis at estimated market rates. The
following table presents the carrying value and fair value of the financial
instruments at December 31, 2002 and 2001 (in millions):

<Table>
<Caption>
                                                                               DECEMBER 31,
                                                   ---------------------------------------------------------------
                                                                2002                              2001
                                                   -----------------------------     -----------------------------
                       ISSUE                       CARRYING VALUE     FAIR VALUE     CARRYING VALUE     FAIR VALUE
     ------------------------------------------    --------------     ----------     --------------     ----------
 <S>                                               <C>                <C>            <C>                 <C>
    New Credit Facility ......................        $ 178.7          $ 178.7          $    --          $    --
    Title XI .................................          234.5            257.5            241.6            246.5

</Table>

     Notes Payable and Capital Lease Obligations. The carrying amounts reported
in the balance sheet approximate fair value determined using a discounted cash
flow analysis at estimated market rates.

14.  EXTRAORDINARY ITEMS

     In connection with the closing of the new equity investment and New Credit
Facility in September 2002, the Company redeemed all of its 12.5% Secured Notes
due 2007 and repaid its then existing bank debt.

     The carrying value of the Senior Notes and bank debt at the time of the
redemption and repayment was $225.2 million, net of unamortized discount and
unamortized financing costs. The price paid to retire the Senior Notes and bank
debt was $253.0 million. As a result, $27.8 million was recorded as a loss on
early extinguishment of debt, consisting of the write-off of the unamortized
financing costs on the Senior Notes and bank debt of $9.7 million, unamortized
original issue discount on the Senior Notes of $14.1 million and contractual
redemption premiums on the Senior Notes of $4.0 million. The tax benefit, net of
the recorded valuation allowance, was zero.

15.  SALE OF ASSETS OF SUN STATE AND PORT ARTHUR

     On March 22, 2002, the Company closed on the sale of the marine
transportation assets and trade name of Sun State for $3.9 million in cash. The
assets consisted of tugs, barges and fuel inventory with a carrying value of
$4.3 million. The name of this company was subsequently changed to Seabulk
Marine Services, Inc. The Company recognized a loss on the disposal of these
assets of approximately $440,000.

     On May 20, 2002, the Company closed on the sale of the marine terminal
facility assets at Port Arthur, Texas for $3.0 million. Fifty percent of the
proceeds ($1.5 million) were received at closing in cash and the remainder will
be deferred and received over the next three years in the form of either cash or
shipyard repair credits from the buyer. The assets consisted of land, an office
building, docks and parking and warehouse storage facilities with a carrying
value of $1.3 million. As a result, the Company recognized a gain of $1.7
million.

     On July 9, 2002, the Company closed on the sale of the drydock and related
shipyard equipment assets of Seabulk Marine Services, Inc. (formerly Sun State
Marine Services, Inc.) for $450,000. The Company has no remaining operations at
the Sun State location.


                                      F-31
<PAGE>

16.  LIQUIDITY

     At December 31, 2002, the Company had working capital of approximately
$26.3 million. Day rates and utilization for offshore vessels working in the
Gulf of Mexico continued to be weak, a trend that began in September 2001. The
slowdown in the domestic offshore market was offset in part by continued
strength in the Company's international offshore operations, where day rates
remained strong during the year and contributed to increased revenue in West
Africa and the Middle East, and in part by the improved performance of the
marine transportation segment. The increased revenue in the offshore business in
West Africa and the Middle East was driven by exploration and production
spending as major oil companies continued to proceed with oil exploration and
development programs outside the U.S. Since the September 11, 2001 attacks, the
subsequent war on terrorism and then commencement of the war in Iraq, the U.S.
economy continues to be subject to pressure. As we enter 2003, the timing of a
recovery in the domestic offshore segment is still not certain. However, the
increases in oil and natural gas prices during the fourth quarter of 2002 and
the early part of 2003 reinforce the potential for an upturn in domestic
exploration and development activity in the latter half of 2003. We do expect
earnings in 2003 from the offshore segment to improve compared to 2002. The
Company also expects to benefit in 2003 from higher earnings in its marine
transportation business as a result of a full year of higher time charter rates
for certain tankers.

     The Company's capital requirements arise primarily from its need to service
debt, fund working capital and maintain and improve its vessels. The Company
anticipates capital requirements for debt service, vessel maintenance and fleet
improvements in 2003 to total approximately $98 million and expects that cash
flow from operations will continue to be a significant source of funds for its
working capital and capital requirements.

    The Company's credit agreement contains certain restrictive financial
covenants that among other things requires minimum levels of EBITDA and
tangible net worth. The Company is in compliance with such covenants at
December 31, 2002 and expects to be in compliance through the balance of 2003
based on current financial projections. However, the Company's financial
projections contain assumptions with respect to economic recovery beginning in
the second quarter of 2003 in the underperforming U.S. Gulf offshore market. If
the economic recovery does not occur or occurs later or to a lesser extent than
the current forecast, the Company will need to reduce operating expenses to
maintain compliance.

    Management continues implementation of certain initiatives in an effort to
improve profitability and liquidity. These initiatives include (1) selective
acquisitions and charters of additional vessels, (2) repositioning certain
vessels to take advantage of higher day rates, (3) selling unprofitable vessels,
and (4) eliminating non-essential operating and overhead expenses. Management
believes that its expense reduction initiatives will be sufficient to meet its
financial covenants if the forecasted U.S. Gulf is other than expected.

     Management recognizes that unforeseen events or business conditions,
including unexpected deterioration in its markets, could prevent the Company
from having sufficient liquidity to fund its operation or meeting targeted
financial covenants.

        If unforeseen events or business conditions prevent the Company from
having sufficient liquidity to fund its operations, the Company has alternative
sources including additional asset sales, and deferral of capital expenditures,
which should enable it to satisfy essential capital requirements. If the Company
does not meet its financial covenants, the Company would be required to seek an
amendment or waiver to avoid default. While the Company believes it could
successfully implement alternative plans, if necessary, there can be no
assurance that such alternatives would be available or that the Company would be
successful in their implementation.

17.  SUBSEQUENT EVENTS

     In January 2003, the Company took delivery of the Seabulk Africa, a
newbuild, state-of-the-art, 236-foot, 5500 horsepower UT-755L platform supply
vessel. The vessel is expected to join the Company's West African fleet. The
Seabulk Africa was acquired for cash of approximately $16 million and will be
financed in April



                                      F-32
<PAGE>

2003 by means of a sale leaseback arrangement with TransAmerica Capital for a
lease term of 10 years, after which the Company will have an option to acquire
the vessel.

     On March 7, 2003, the Company formed a joint venture company in Nigeria,
named Modant Seabulk Nigeria Limited, with CTC International, Inc., a company
owned by Nigerian interests. The Company will sell five of its crewboats
operating in Nigeria to a related joint venture with CTC International in April
2003. Modant Seabulk Nigeria Limited will operate crewboats in Nigeria. Seabulk
Offshore will provide certain management services for the joint venture.

     On March 27, 2003, the Canaveral Port Authority served a sixty day notice
of termination of the exclusive franchise to Port Canaveral Towing. Port
Canaveral Towing intends to continue its operations on a non-exclusive basis at
Port Canaveral.


                                      F-33
<PAGE>

18.  SELECTED QUARTERLY FINANCIAL INFORMATION (UNAUDITED)

     The following information is presented as supplementary financial
information for 2002 and 2001 (in thousands, except per share information):

<Table>
<Caption>
                                                                   FIRST           SECOND           THIRD          FOURTH
      YEAR ENDED DECEMBER 31, 2002                                QUARTER          QUARTER         QUARTER         QUARTER
      ----------------------------                            ---------------  ---------------  ---------------  -----------
     <S>                                                        <C>               <C>              <C>           <C>
     Revenue ............................................        $ 83,199         $ 81,639         $ 80,369      $    78,790
     Income from operations .............................          11,968            8,540           10,025            5,873
     Loss before extraordinary item .....................          (2,286)          (4,367)          (2,757)          (1,637)
     Net loss(a) ........................................          (2,286)          (4,367)         (30,580)          (1,637)
     Net loss per common share - basic and diluted (b):
        Loss before extraordinary item ..................        $  (0.22)        $  (0.41)        $  (0.21)     $     (0.07)
        Net loss ........................................        $  (0.22)        $  (0.41)        $  (2.37)     $     (0.07)


                                                                   FIRST           SECOND           THIRD          FOURTH
      YEAR ENDED DECEMBER 31, 2001                                QUARTER          QUARTER         QUARTER         QUARTER
      ----------------------------                            ---------------  ---------------  ---------------  -----------


     Revenue ............................................        $ 81,420         $ 91,424         $ 89,720      $    84,166
     Income from operations .............................           8,409           18,903           18,565            3,211
     Net (loss) income ..................................          (7,233)           2,750            2,907          (10,385)
     Net (loss) earnings per common share--basic(b) .....        $  (0.71)        $   0.27         $   0.28      $     (0.99)
     Net (loss) earnings per common share--assuming
      dilution(b) .......................................        $  (0.71)        $   0.27         $   0.28      $     (0.99)

--------
(a)  Includes loss on early extinguishment of debt of $27.8 million in the third
     quarter of 2002 (see Note 14).
(b)  The sum of the four quarters' (loss) earnings per share will not
     necessarily equal the annual earnings per share, as the computations for
     each quarter are independent of the annual computation.
     </Table>

                                      F-34