##### Table of Contents



SECURITIES AND EXCHANGE COMMISSION Washington, D.C. 20549
 FORM 10-K/A AMENDMENT NO. 1
 ANNUAL REPORT PURSUANT TO SECTION 13 OR 15(d) OF
THE SECURITIES EXCHANGE ACT OF 1934 For the fiscal year ended December 31, 2004 Commission File Number 0-28732 SEABULK INTERNATIONAL, INC.  Delaware
    
    65-0966399(State or other jurisdiction of
    
    (I.R.S. Employerincorporation or organization)
    
    Identification Number)2200 Eller Drive, P.O. Box 13038Ft. 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 (or
for such shorter period that the registrant was required to file such reports), and (2) has been
subject to such filing requirements for the past 90 days. YES þ NO o 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. o Indicate by check mark whether the registrant is an accelerated filer (as defined in Rule
12b-2 of the Act). YES o NO þ The aggregate market value of the shares of voting stock held by non-affiliates of the
registrant is approximately $46,423,265 based upon the closing market price on June 30, 2004 of
$8.26 per share of common stock on the NASDAQ National Market as reported by the Wall Street
Journal. Indicate by check mark whether the registrant has filed all documents and reports required to
be filed by Section 12, 13 or 15(d) of the Securities Exchange Act of 1934 subsequent to the
distribution of securities under a plan confirmed by a court. YES þ NOo There
were 23,620,342 shares of the registrants common stock par value $0.01 per share
outstanding, at March 31, 2005 .




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Explanatory Note The purpose of this Amendment No. 1 on Form 10-K/A to Seabulk International, Inc.s (the
Company) Annual Report on Form 10-K for the year ended December 31, 2004, as filed with the
Securities and Exchange Commission on March 14, 2005, is to provide the information required by
Items 10, 11, 12, 13, and 14 of Part III and the certifications required by Item 15 of Part
IV of Form 10-K and to file certain additional exhibits. In addition, the Company has amended its financial statements solely to include a
Subsequent Event note relating to the Merger (as defined below). While the Company typically
incorporates this information by reference from the Companys definitive proxy statement for its
annual meeting of stockholders, the Company intends to schedule a special stockholders meeting in
the second quarter of 2005 for its stockholders to approve the merger of the Company with and into
a wholly-owned subsidiary of SEACOR Holdings, Inc. (the Merger), pursuant to the Agreement and
Plan of Merger, dated as of March 16, 2005 (the Merger Agreement). If the stockholders approve
the Merger, the Company will not hold an annual meeting of stockholders and no definitive proxy
statement will distributed or filed. This Amendment No. 1 to the Companys Annual Report on Form 10-K/A continues to speak as of
the date of such original Annual Report on Form 10-K and, except as described above, does not
change or update the previously reported financial statements or other disclosures included
therein. Each of Items 10, 11, 12, 13, and 14 is hereby amended and restated in its entirety and Item 15
is hereby amended to include the new exhibits listed herein and the financial statements,
as described above. Table of Contents Item
    
    
    
    PagePart III10
    
    Directors and Executive Officers of the Registrant
    
    
    311
    
    Executive Compensation
    
    
    912
    
    Security Ownership of Certain Beneficial Owners and Management and Related Stockholder Matters
    
    
    1313
    
    Certain Relationships and Related Transactions
    
    
    1514
    
    Principal Accounting Fees and Services
    
    
    15Part IV15
    
    Exhibits, Financial Statements Schedules
    
    
    17Financial SupplementConsolidated Financial Statements
    
    
    F-1Amendment to Amended & Restated Equity AgreementAmendment to Stock Option Plan of DirectorsAmendment to Executive Deferred Compensation PlanSpecimen Form of Amendment to Non-Qualified Stock Option PlanDirectors Compensation StatementAmendment No. 4 to Executive Employment AgreementSpecimen Form of Amendment No. 2 to Form Severance AgreementConsent of Independent Registered Public Accounting FirmSection 302 Principal Executive Officer CertificationSection 302 Principal Financial Officer CertificationSection 906 Principal Executive Officer CertificationSection 906 Principal Financial Officer Certification
  2




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Part III 
 Item 10. Directors and Executive Officers of the Registrant. (a) Board of Directors Set forth below are descriptions of the backgrounds of our directors and their principal
occupations for at least the past five years and their directorship positions as of April 1, 2005.
The term of each director is one year, and each director listed below was elected at the 2004
annual meeting of stockholders, with the exception of Mr. Clare, who was appointed in October 2004,
to replace Ari Benacerraf who resigned in September 2004. Pursuant to the Stockholders Agreement
(see Item 13), Nautilus Acquisition, L.P. (which we refer to as Nautilus in this report) has
designated Messrs. Clare, Durkin, Huseman and Webster as directors and C/R Marine Domestic
Partnership, L.P., C/R Marine Non-U.S. Partnership, L.P., C/R Marine Coinvestment , L.P., and C/R
Marine Coinvestment II, L.P. (which we refer to collectively as the C/R Entities in this report)
collectively have designated Messrs. Lapeyre and Leuschen as directors. Both Nautilus and the C/R
Entities are affiliates of the Company. Pursuant to the terms of the Merger Agreement, upon
consummation of the Merger, all the directors will resign from serving on our board of directors
and none of them will serve on the board of SEACOR Holdings, Inc. Name
    
    Age
    
    Current PositionGerhard E. Kurz
    
    65
    

Chairman
of the Board, President, Chief Executive Officer and DirectorDaniel H. Clare
    
    33
    
    DirectorPeter H. Cressy (2) (3) (4)
    
    63
    
    DirectorDavid A. Durkin (4)
    
    36
    
    DirectorKenneth V. Huseman
    
    53
    
    DirectorRobert L. Keiser(1) (2)
    
    62
    
    DirectorPierre F. Lapeyre, Jr. (1) (4)
    
    42
    
    DirectorDavid M. Leuschen (3)
    
    54
    
    DirectorThomas P. Moore, Jr. (2) (4)
    
    66
    
    DirectorSteven A. Webster (1) (3)
    
    53
    
    Director
   (1)
    
    Member of the Compensation Committee.(2)
    
    Member of the Audit Committee.(3)
    
    Member of the Nominating and Corporate Governance Committee.(4)
    
    Member of the Finance Committee. Mr. Kurzwas elected Chief Executive Officer and a Director of the Company in April 2000,
President in September 2000, and Chairman in 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. Mr. Kurz is past Chairman of the Marine Preservation Association and the Oil
Companies International Marine Forum. He serves on the Board of Directors of the American Bureau
of Shipping and chairs its Audit Committee. He previously chaired its Finance and Nominating
Committees. He also serves on the Boards of the Seamens Church Institute and the Coast Guard
Foundation. 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. 3




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Mr. Clare,a director of the Company since October 2004, is a Vice President of Credit Suisse
First Boston LLC in the Merchant Banking Group, a position he has held since January 2003. Mr.
Clare joined Credit Suisse First Boston Corporation in 1999 as an associate in its Private Equity
Division. Prior to joining CSFB, he was a management consultant at Bain & Company. Mr. Clare
holds an M.B.A. degree from Harvard Business School and a B.A. from Haverford College. He is a
director of American Ref-Fuel Holdings Corp. and several of its subsidiaries. Dr. Cressy, a director of the Company since March 2000, has been President and Chief Executive
Officer of the Distilled Spirits Council of the United States, Inc. (DISCUS) since September 1999.
Prior to joining DISCUS, he was Chancellor of the University of Massachusetts at Dartmouth for six
years. From 1991 to 1993, he was President of the Massachusetts Maritime Academy. Dr. Cressy, who
has a Ed.D. in education from the University of San Francisco and is a Yale graduate, is a retired
U.S. Navy Rear Admiral. He joined the Navy in 1963. During his 28-year career, he held senior
positions at the State Department, on Capitol Hill, at the Pentagon and held major command
assignments. He concluded his naval career as Commander, Fleet Air Mediterranean and Commander,
NATO Air Mediterranean during Operation Desert Storm. Dr. Cressy is a Director of the distilled
spirits industrys educational foundation, The Century Council. Mr. Durkin,a director of the Company since September 2002, is a Partner of Credit Suisse
First Boston LLC in the Merchant Banking Group, a position he has held since July 2004. Mr. Durkin
joined Credit Suisse First Boston Corporation in November 2000 upon the merger with Donaldson,
Lufkin & Jenrette, where he was a Principal in the Merchant Banking Group since 2000. He served as
a Vice President in the Leveraged Finance Group and other roles within investment banking since
1996. Mr. Durkin serves on the board of directors of Merrill Corporation and Prometheus
Laboratories, Inc. Mr. Durkin holds an M.B.A. degree from the Wharton School at the University of
Pennsylvania. Mr. Huseman,a director of the Company since September 2002, serves as the President and Chief
Executive Officer of BASiC Energy Services, a position he has held since April 1999. Prior to
that, Mr. Huseman held several executive roles at Key Energy Services and its predecessors,
including serving as Chief Operating Officer between 1996 and 1999. From 1978 through 1993, Mr.
Huseman held several senior operational positions at Pool Energy Services. Mr. Huseman received a
B.B.A. in Accounting from Texas Tech University. Mr. Keiserhas served as a director since March 2000. He is former Chairman of the Board of
the Kerr-McGee Corporation, an international energy company, from which he retired in 1999. Mr.
Keiser was previously Chairman and Chief Executive Officer of the Oryx Energy Company from 1995 to
1999, and Chief Operating Officer from 1991 to 1994. A graduate of the University of Missouri in
Rolla, he joined the Sun Company, Inc. in 1965 and became Vice President of Planning and
Development for Oryx when that company was spun off from Sun in 1988. Mr. Keiser is on the Board
of Directors of Lone Star Technologies Inc. and a member of the Society of Petroleum Engineers. Mr. Lapeyre,a director of the Company since September 2002, is a Founder and Managing
Director of Riverstone Holdings LLC, and is responsible for sourcing and negotiating investments,
as well as post-closing financial structuring and monitoring. In addition, he serves on the Funds
Managing Committee which is responsible for all portfolio activity. Prior to founding Riverstone
in 2000, Mr. Lapeyre was a Managing Director at Goldman Sachs & Co., where he spent 14 years in the
Global Energy and Power Group. Mr. Lapeyre currently serves on the board of directors of Legend
Natural Gas, CDM Resources, Frontier Holdings, Mariner Energy, Stallion Oil Field Services,
SemGroup and Topaz Power. Mr. Lapeyre received his B.S. degree in Finance/Economics from The
University of Kentucky, and his M.B.A. from The University of North Carolina. 4




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Mr. Leuschen,a director of the Company since September 2002, is a Founder and Managing
Director of Riverstone Holdings LLC, and is responsible for sourcing and negotiating investments,
as well as post-closing portfolio-company monitoring. In addition, he serves on the Funds
Managing Committee responsible for all portfolio activity. Prior to founding Riverstone in 2000,
Mr. Leuschen spent 22 years with Goldman Sachs. He joined the firm in 1977, founded the firms
Global Energy and Power Group in 1982, became a Partner in 1986, and remained a Partner with the
firm until leaving to found Riverstone in 2000. Mr. Leuschen has served as a Director of Frontier
Drilling ASA, Legend Natural Gas, Buckeye Pipeline Partners, Mariner Energy, Inc., Belden and
Blake, SemGroup, and Mega Energy LLC, as well as a significant number of other industry-related
business and nonprofit Boards of Directors. He is also owner and President of Switchback Ranch
LLC, an integrated cattle ranching operation in the western U.S. Mr. Leuschen received his A.B.
degree from Dartmouth College, and his M.B.A. from Dartmouths Amos Tuck School of Business. Mr. Moore,a director of the Company since December 1999, is a Senior Principal of State
Street Global Advisors, the head of Global Fundamental Strategies, and a member of the Senior
Management Group. From 1986 through 2001, he was a Senior Vice President of State Street Research &
Management Company and was head of the State Street Research International Equity Team. From 1977
to 1986 he served in positions of increasing responsibility with Petrolane, Inc., including
Administrative Vice President (1977-1981), President of Drilling Tools, Inc., an oilfield equipment
rental subsidiary (1981-1984), and President of Brinkerhoff-Signal, Inc., an oil well contract
drilling subsidiary (1984-1986). Mr. Moore is a Chartered Financial Analyst and a Director of
First Community Bank in Woodstock, Vermont. Mr. Moore holds an M.B.A. degree from Harvard Business
School. Mr. Webster, a director of the Company since September 2002, is Chairman of Global Energy
Partners, a merchant banking affiliate of CSFB Private Equity that makes investments in energy
companies, and has served in that capacity since 2000. From 1998 to 1999, Mr. Webster served as
Chief Executive Officer and President of R&B Falcon Corporation, and from 1988 to 1997, Mr. Webster
served as Chairman and Chief Executive Officer of Falcon Drilling Corporation, both offshore
drilling contractors. Mr. Webster is on the boards of directors of Brigham Exploration Company,
Carrizo Oil & Gas, Inc., Goodrich Petroleum Corporation, Grey Wolf Inc., Camden Property Trust,
Crown Resources Corporation, and Geokinetics, Inc. Mr. Webster also serves on the boards of
several privately held companies, primarily in the energy industry. In addition, Mr. Webster
serves as Chairman of Carrizo Oil & Gas, Crown Resources and BASiC Energy Services, Inc., a
privately held oil and gas service company. Mr. Webster is the founder and an original shareholder
of Falcon Drilling Company, Inc., a predecessor to Transocean, Inc., and is a co-founder and
original shareholder of Carrizo Oil & Gas, Inc. Mr. Webster holds a B.S.I.M. from Purdue
University and an M.B.A. from Harvard Business School. Mr. Webster serves on the Deans Advisory
Board for Purdue. (b) Executive Officers The following table provides information on the Companys current executive officers, all of
whom were serving in the indicated capacities at April 1, 2005. 5




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Name
    
    Age
    
    Current PositionGerhard E. Kurz
    
    65
    
    Chairman of the Board, President, Chief Executive Officer and DirectorVincent deSostoa
    
    60
    
    Senior Vice President and Chief Financial OfficerLarry D. Francois
    
    62
    
    Senior Vice President and PresidentSeabulk OffshoreMichael J. Pellicci
    
    41
    
    Senior Vice PresidentFinance & Planning, Treasurer and Chief Accounting OfficerKenneth M. Rogers
    
    49
    
    Senior Vice President and PresidentSeabulk TowingAlan R. Twaits
    
    57
    
    Senior Vice President, General Counsel and SecretaryL. Stephen Willrich
    
    52
    
    Senior Vice President and PresidentSeabulk TankersHubert E. Thyssen
    
    57
    
    Vice President Seabulk Offshore
 Set forth below are descriptions of the backgrounds of the executive officers and their
principal occupations for at least the past five years. For a description of the background of Mr.
Kurz, see Board of Directors above. We are not aware of any family relationships between any of
the foregoing executive officers or between any executive officer and any director. Mr. deSostoahas 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. Previously, Mr. deSostoa 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., a public accounting firm, which he joined in 1973. Mr. Francoishas been Senior Vice President since February 2003 and President, Seabulk
Offshore since January 2003. He previously served as Area Manager of domestic offshore marine
operations for Tidewater Inc. Previously, Mr. Francois 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 War veteran, Mr. Francois served in
the United States Air Force with the rank of Captain. Mr. Pelliccihas been Senior Vice PresidentFinance and Planning, and Treasurer since January
2005. He was previously Vice PresidentFinance and Corporate Controller of the Company, which he
joined in January 2001. Mr. Pellicci also continues to serve as Chief Accounting Officer, to which
he was appointed in March 2002. 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. Rogershas 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. Previously, Mr. Rogers 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 as a deck officer with Texaco Inc. Mr. Twaitshas 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. 6




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Previously, Mr. Twaits 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, and the American Corporate Counsel
Association. Mr. Willrichhas 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. Previously, 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 28 years of experience in the management of Jones Actproduct
tankers. Mr. Thyssenhas 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. Mr. Thyssen
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. Controlled Company Status NASDAQ marketplace rules require that the board of directors of NASDAQ-listed companies
consist of a majority of directors who are independent within the meaning of the rules. These
rules also impose additional independence requirements on members of certain committees of the
board. The Company has determined that, except with respect to the required independence of
members of the Audit Committee, it is exempt from the application of these rules as a controlled
company, as defined in the rules. The Company believes it qualifies as a controlled company under
NASDAQ rules because more than 50% of the voting power of its capital stock is held by Nautilus and
the C/R Entities. Committees of the Board The Board of Directors supervises the management of the Company as provided by Delaware law.
The Board of Directors has four committees: the Audit Committee, the Compensation Committee, the
Nominating and Corporate Governance Committee, and the Finance Committee. Audit Committee. The Audit Committee hires the Companys independent registered public accounting firm;
oversees the Companys financial reporting process and reports the results of its activities to the
Board; reviews the work of, and approves audit services performed by, the independent registered public accounting firm; oversees the work of the Companys internal audit department; makes recommendations to
the Board relating to the Companys reporting and control processes; and administers the Companys
policy with respect to transactions with affiliated persons and with respect to grievances relating
to accounting and controls. Its current members are Messrs. Moore (Chairman), Cressy and Keiser.
The Board of Directors has determined that each member is independent as defined by the rules of
the Securities and Exchange Commission and NASDAQ Stock Market. The Board of Directors has also
determined that Mr. Moore is an audit committee financial expert as defined by the rules of the
Securities and Exchange Commission and NASDAQ. The Companys Code of Business Conduct includes a
hotline number for accounting and controls grievances. The Chairman of the Audit Committee can be
contacted directly about such grievances through procedures described in the Code of Business
Conduct. 7




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Compensation Committee. The Compensation Committee reviews and recommends to the Board of
Directors the compensation and benefits of all executive officers of the Company and general policy
matters relating to compensation and benefits of employees of the Company. The Compensation
Committee supervises the administration of the Companys Management Annual Incentive Compensation
Plan by reviewing and recommending for approval by the Board bonuses consistent with that Plan. The
Compensation Committee has oversight responsibility for the Amended and Restated Equity Ownership
Plan and reviews and approves grants under that Plan for review and ratification by the Board.
Together with the CEO, the Compensation Committee is also responsible for executive succession
planning. Its current members are Messrs. Keiser (Chairman), Lapeyre and Webster. Finance Committee. The Finance Committee reviews and advises the Board and the Companys
management on the Companys financial policies, plans and programs, capital structure, and tax
policies, as well as the Companys credit facilities, credit ratings, insurance programs,
investment management of the Companys benefit plans and related matters. Its current members are
Messrs. Moore (Chairman), Cressy, Durkin and Lapeyre. Nominating and Corporate Governance Committee. The Nominating and Corporate Governance
Committee reviews and advises the Board and the Companys management on the Companys external
affairs programs, such as legal and regulatory compliance, communications and crisis planning
programs, as well as the Companys strategic initiatives. It also monitors the Companys investor
relations initiatives, corporate governance procedures, and internal, non-accounting grievance
procedures. Its Chairman can be contacted directly through procedures in the Code of Business
Conduct for ethics and conflicts of interest grievances. The Committee monitors compliance with
SEC and NASDAQ governance policies. The Committee also reviews director qualifications and
performance, and recommends candidates for appointment and election to the Board of Directors,
subject to the terms of the Stockholders Agreement among the Company and the Investors dated as of
September 13, 2002. The Committee also nominates members to the committees of the Board, and
monitors committee performance of members. Its current members are Messrs. Cressy (Chairman),
Leuschen and Webster. Code of Business Conduct The Board of Directors has a Code of Business Conduct that is applicable to all directors,
officers and employees of the Company, including our principal executive officer, principal
financial officer and principal accounting officer. The Code of Business Conduct is intended,
among other things, to promote ethical conduct and deter wrongdoing as set forth in Item 406(b) of
Regulation S-K of the rules of the Securities and Exchange Commission. The Code of Business
Conduct is posted on the Companys website at www.seabulkinternational.com. If the Company makes any amendments to the Code of Business Conduct that relate to the
standards enumerated in Item 406(b) of Regulation S-K of the rules of the Securities and Exchange
Commission, other than technical, administrative, or other nonsubstantive amendments, or grants any
waivers from such provisions of the Code to the Companys principal executive officer, principal
financial officer and principal accounting officer, the Company will disclose the nature of the
amendment or waiver, its effective date and to whom it applies on our website within five business
days or as otherwise required by the SEC or NASDAQ. Section 16(a) Beneficial Ownership Reporting Compliance Section 16(a) of the Securities Exchange Act of 1934 requires directors, executive officers
and persons who beneficially own more than 10% of the Companys common stock to file reports of
ownership and subsequent changes with the Securities and Exchange Commission. Based only on a 8




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review of copies of such reports and written representations delivered to the Company by such
persons, the Company believes that there were no violations of Section 16(a) by such persons during
2004. Required Certifications We have filed as exhibits to this Form 10-K/A for the year ended December 31, 2004, the
certifications of our Chief Executive Officer and Chief Financial Officer required pursuant to
Sections 302 and 906 of the Sarbanes-Oxley Act of 2004. 
 Item 11. Executive Compensation. Summary Compensation Table The following table sets forth, with respect to the Chief Executive Officer and each of the
four other most highly compensated individuals serving as executive officers whose annual
remuneration exceeded $100,000 (the Named Executives), the compensation earned for services
rendered during the years 2002 through 2004. Long-Term CompensationAnnual Compensation


    
    
    Restricted
    
    
    SecuritiesOther Annual
    
    
    Stock
    
    
    Underlying
    
    
    All OtherName and Position in 2004
    
    Year
    
    
    Salary
    
    
    Bonus
    
    
    Compensation(1)
    
    
    Awards(2)
    
    
    Options
    
    
    Compensation(4)Gerhard E. Kurz
    
    
    2004
    
    
    $
    500,000
    
    
    $
    584,000
    
    
    $
    970
    
    
    $
    
    
    
    
    
    
    
    $
    14,738President and
    
    
    2003
    
    
    $
    500,000
    
    
    $
    100,000
    
    
    $
    1,167
    
    
    $
    746,750
    (3)
    
    
    100,000
    
    
    $
    13,920
    (5)Chief Executive Officer
    
    
    2002
    
    
    $
    394,327
    
    
    $
    500,000
    
    
    $
    1,114
    
    
    $
    
    
    
    
    
    
    
    $
    12,920Hubert E. Thyssen
    
    
    2004
    
    
    $
    285,000
    
    
    $
    90,000
    
    
    $
    352
    
    
    $
    
    
    
    
    
    
    
    $
    17,435Vice President -
    
    
    2003
    
    
    $
    285,000
    
    
    $
    46,000
    
    
    $
    332
    
    
    $
    96,900
    (3)
    
    
    55,000
    
    
    $
    16,714Offshore Division
    
    
    2002
    
    
    $
    256,045
    
    
    $
    60,000
    
    
    $
    420
    
    
    $
    
    
    
    
    
    
    
    $
    17,127Vincent J. deSostoa
    
    
    2004
    
    
    $
    221,667
    
    
    $
    101,000
    
    
    $
    
    
    
    $
    
    
    
    
    
    
    
    $
    14,111Senior Vice President,
    
    
    2003
    
    
    $
    215,000
    
    
    $
    46,000
    
    
    $
    167
    
    
    $
    96,900
    (3)
    
    
    70,000
    
    
    $
    12,896
    (5)Chief Financial Officer
    
    
    2002
    
    
    $
    116,458
    
    
    $
    41,000
    
    
    $
    12,000
    
    
    $
    
    
    
    
    
    
    
    $
    and TreasurerAlan R. Twaits
    
    
    2004
    
    
    $
    188,500
    
    
    $
    75,000
    
    
    $
    1,145
    
    
    $
    
    
    
    
    
    
    
    $
    13,895Senior Vice President,
    
    
    2003
    
    
    $
    181,000
    
    
    $
    36,000
    
    
    $
    432
    
    
    $
    92,900
    (3)
    
    
    60,000
    
    
    $
    15,781
    (5)General Counsel and
    
    
    2002
    
    
    $
    180,250
    
    
    $
    44,000
    
    
    $
    1,190
    
    
    $
    
    
    
    
    
    
    
    $
    11,768SecretaryKenneth M. Rogers
    
    
    2004
    
    
    $
    187,500
    
    
    $
    75,000
    
    
    $
    
    
    
    $
    
    
    
    
    20,000
    
    
    $
    13,939Senior Vice President 
    
    
    2003
    
    
    $
    175,000
    
    
    $
    40,000
    
    
    $
    
    
    
    $
    20,000
    (3)
    
    
    12,000
    
    
    $
    10,341Towing Division
    
    
    2002
    
    
    $
    155,000
    
    
    $
    38,000
    
    
    $
    
    
    
    $
    
    
    
    
    
    
    
    $
    544
   (1)
    
    For 2004, reflects club dues in the amount of $970 for Mr. Kurz, $352 for Mr. Thyssen and
professional dues of $1,145 for Mr. Twaits. For 2003, reflects club dues in the amount of
$1,167 for Mr. Kurz, $332 for Mr. Thyssen and professional dues of $167 for Mr. deSostoa and
$432 for Mr. Twaits. For 2002, reflects dues in the amount of $1,114 for Mr. Kurz and $420
for Mr. Thyssen, $12,000 relocation expenses for Mr. deSostoa, and professional dues of $1,190
for Mr. Twaits.(2)
    
    The number and value of the aggregate restricted stock holdings of the Named Executives as
of December 31, 2004 was 208,800 shares and $2,528,560, respectively, based on the stock price
as of December 31, 2004. Of the aggregate, 28,800 shares of restricted stock will become
non-forfeitable ratably in thirds on March 2, 2005, March 2, 2006, and March 7, 2007; 105,000
shares will become non-forfeitable on February 25, 2008; and 75,000 are non-forfeitable. At
the effective time of the Merger, all restricted stock will become non-forfeitable and will be
exchanged for shares of common stock of SEACOR 9




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##### Table of Contents



Holdings, Inc. subject to the exchange ratio of (i) 0.2694 shares of SEACOR common stock for
each share of Company common stock and (ii) $4.00 in cash.(3)
    
    For 2003, in lieu of a portion of cash bonuses, bonuses in the form of restricted stock were
granted to the Named Executives as set forth below. For Mr. Kurz, 20,000 bonus shares become
non-forfeitable ratably on March 2, 2005, 2006, and 2007. For each of Messrs. Thyssen and
deSostoa, 2,400 bonus shares become non-forfeitable ratably on March 2, 2005, 2006, and 2007,
respectively. For Mr. Twaits, and Mr. Rogers, 2,000 bonus shares become non-forfeitable
ratably on March 2, 2005, 2006, and 2007, respectively. In addition, in 2003 grants of
restricted stock for longer term compensation, becoming non-forfeitable on February 25, 2008,
were made as follows: 75,000 shares for Mr. Kurz, and 10,000 shares for each of Messrs.
Thyssen, deSostoa and Twaits. At the effective time of the Merger, all restricted stock will
become non-forfeitable and will be exchanged for shares of common stock of SEACOR Holdings,
Inc. subject to the exchange ratio of (i) 0.2694 shares of SEACOR common stock for each share
of Company common stock and (ii) $4.00 in cash.(4)
    
    For 2004, reflects 401(k) contributions of $13,000 each for Messrs. Kurz, deSostoa and
Rogers, $12,952 for Mr. Twaits, retirement plan contributions of $17,435 for Mr. Thyssen and
life insurance premiums of $1,738 for Mr. Kurz, $1,111 for Mr. deSostoa, $939 for Mr. Rogers
and $944 for Mr. Twaits. For 2003, reflects 401(k) contributions of $12,000 each for Messrs.
Kurz and Twaits, $10,750 for Mr. deSostoa, retirement plan contributions of $16,714 for Mr.
Thyssen and life insurance premiums of $1,920 for Mr. Kurz, $896 for Mr. deSostoa, and $768
for Mr. Twaits. For 2002, reflects 401(k) contributions of $11,000 each for Messrs. Kurz and
Twaits, retirement plan contribution of $17,127 for Mr. Thyssen and life insurance premium
payments of $1,920 for Mr. Kurz and $768 for Mr. Twaits.(5)
    
    Includes employer contributions to the deferred compensation plan of $1,250 for Mr.
deSostoa, and $3,013 for Mr. Twaits. Stock Option Grants in 2004 The following table contains information concerning stock options granted to each of the Named
Executives in 2004. Individual GrantsNumber of
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    Potential Realizable Value atShares
    
    
    Percent of
    
    
    
    
    
    
    
    
    
    
    Assumed Annual RatesUnderlying
    
    
    Options
    
    
    
    
    
    
    
    
    
    
    of Stock Appreciation forOptions
    
    
    Granted
    
    
    Per Share
    
    
    Expiration
    
    
    Option Term(1)Name
    
    Granted
    
    
    to Employees
    
    
    Exercise Price
    
    
    Date
    
    
    5%
    
    
    10%Gerhard E. Kurz
    
    
    
    
    
    
    
    %
    
    $
    
    
    
    
    
    
    
    $
    
    
    
    $
    Hubert E. Thyssen
    
    
    
    
    
    
    
    %
    
    $
    
    
    
    
    
    
    
    $
    
    
    
    $
    Vincent J. deSostoa
    
    
    
    
    
    
    

    %
    
    $
    
    
    
    
    
    
    
    $
    
    
    
    $
    Alan R. Twaits
    
    
    
    
    
    
    
    %
    
    $
    
    
    
    
    
    
    
    $
    
    
    
    $
    Kenneth M. Rogers
    
    
    20,000
    
    
    
    13.6
    %
    
    $
    10.00
    
    
    
    3/02/14
    
    
    $
    125,778.49
    
    
    $
    318,748.49
   (1)
    
    The dollar amounts are the result of calculations at specified rates of
appreciation and are not intended to forecast possible futureappreciation. 10




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##### Table of Contents



Year-end Option Values The following table contains information concerning year-end value of unexercised options for
each of the Named Executives. No options were exercised in 2004 by any of the Named Executives. Number of Securities UnderlyingUnexercised Options
    
    
    Value of Unexercised In-the-Moneyat December 31, 2004
    
    
    Options at December 31, 2004Name
    
    Exercisable
    
    
    Unexercisable
    
    
    Exercisable
    
    
    UnexercisableGerhard E. Kurz
    
    
    250,000
    
    
    
    75,000
    
    
    $
    1,421,250
    
    
    $
    308,250Hubert E. Thyssen
    
    
    46,750
    
    
    
    41,250
    
    
    $
    217,392
    
    
    $
    169,537Vincent J. deSostoa
    
    
    17,500
    
    
    
    52,500
    
    
    $
    71,925
    
    
    $
    215,775Alan R. Twaits
    
    
    37,000
    
    
    
    45,000
    
    
    $
    203,170
    
    
    $
    184,950Kenneth M. Rogers
    
    
    4,000
    
    
    
    28,000
    
    
    $
    19,280
    
    
    $
    80,760
 Upon a qualified termination within two years after the effective time of the Merger, all
outstanding options will vest and become exercisable for shares of common stock of SEACOR Holdings,
Inc., subject to the exchange ratio of (1) 0.2694 shares of SEACOR common stock for each share of
Company common stock and (ii) $4.00 in cash. Stock Grants in 2005 On January 19, 2005 the Compensation Committee granted stock options for 54,000 shares at a
market value of $12.70 per share that vest ratably over three years and restricted stock for 63,000
shares that become non-forfeitable ratably over three years, to the five Named Executives under the
Companys Amended and Restated Equity Ownership Plan. The Board of Directors ratified the grants
on January 20, 2005. Employment and Severance Agreements The Company has an Employment Agreement, as amended, with Mr. Kurz to serve as President and
Chief Executive Officer. The Agreement, which expires September 13, 2007, provides for an annual
base salary of $500,000, subject to annual review by the Board of Directors for possible upward
adjustment based on Company policy and contributions made by Mr. Kurz. Mr. Kurz is eligible for a
bonus targeted to 100% of his base salary, based upon the Companys achievement of performance
targets agreed upon annually. If Mr. Kurzs employment is terminated by the Company without
cause or for good reason (each as defined in the agreement), he is entitled to an amount equal
to the sum of two times his annual base salary plus two times his annual maximum bonus for the year
in which termination occurs. During 2004 the Employment Agreement was amended to provide that (1)
his stock options and restricted stock become exercisable and non-forfeitable, respectively, in
full upon termination within two years after a change of control, as defined; (2) such options
remain exercisable for thirty-six months after termination; (3) any excess parachute excise tax
imposed is subject to a gross-up payment provision payable by the Company; and (4) his severance
payment for termination within two years after a change of control shall be in a single lump sum.
In April 2005 the Employment Agreement was further amended to provide for payment of 100% of the 2005 maximum incentive award for 2005 performance under
the Companys Management Annual Incentive Compensation Plan
for the 2005 calendar year, pro rata to date of termination should he terminate in 2005; and for payment of unused
vacation days accrued during the year of termination. In April, 2003 the Company entered into Severance Agreements with four executive officers 
Vincent deSostoa, Senior Vice President and Chief Financial Officer, Larry Francois, Senior Vice
President and President  Seabulk Offshore, Hubert Thyssen, Senior Vice President Seabulk
Offshore, and Alan R. Twaits, Senior Vice President, General Counsel and Secretary; and in May 2004
entered into 11




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##### Table of Contents



Severance Agreements with three other executive officers  Michael Pellicci, Senior Vice
President  Finance and Planning, Treasurer and Chief Accounting Officer; Kenneth Rogers, Senior
Vice President and President  Seabulk Towing; and L. Stephen Willrich, Senior Vice President and
President  Seabulk Tankers. These Severance Agreements provide for severance payments in the
amount of one years base salary and one years bonus based on the last full years bonus.
The executive also receives the gross-up of certain payments which
may be subject to excise taxes under the
Internal Revenue Code as parachute payments so that the executive receives the same amount he
would have received had there been no applicable excise taxes; and medical plan coverage for one
year with the same employee contribution requirements as prior to any involuntary termination
without cause. The Agreements also provide that all outstanding options become exercisable upon
termination after a change of control, and that such options remain exercisable for thirty-six
months after termination. The Agreements have an initial term of two years, with renewals for
additional two-year terms unless terminated by the Company before expiration of the renewal period.
In April 2005 the Severance Agreements were amended to provide for payment of 100% of the 2005 maximum incentive award specified for each
executive for 2005 performance under the Companys Management Annual Incentive Compensation
Plan for the 2005 calendar year, pro rata to date of termination should he terminate in
2005; and for payment of unused vacation days accrued during the year of termination.
The Severance Agreements do not require shareholders approval. Other Amendments in 2005 In April 2005 the Amended and Restated Equity Ownership Plan was
amended to eliminate a provision which could potentially limit the
vesting of stock options already granted in order to avoid potential gross up payments by the Company for
excess parachute excise taxes under the Internal Revenue Code upon termination of certain executives. In April 2005 the Stock Option Agreements for employees with stock options were amended to eliminate a provision which could potentially limit the vesting of stock options already
granted in order to avoid potential gross up payments by the Company for excess
parachute excise taxes under the Internal Revenue Code upon termination of certain executives; and to eliminate a provision permitting the Company to repurchase the shares acquired by an employee after exercise of his options upon termination of the employee. In April 2005 the Stock Option Plan for Directors was amended to permit appropriate adjustments of options to convert
to options and stock of the company with which the Company is merging. In April 2005 the Executive Deferred Compensation Plan was revised to permit stock units in the Plan
to be converted into the stock of the company with which the Company is merging. Director Compensation Directors not employed by the Company are paid an annual retainer of $24,000 plus $1,500 per
Board meeting and $1,000 per Committee meeting ($750 and $500, respectively, if telephonic)
attended. They are reimbursed by the Company for reasonable out-of-pocket expenses incurred for
attendance at such meetings in accordance with Company policy. All Committee chairmen not employed
by the Company are also paid an annual retainer of $5,000. Under the Stock Option Plan for Directors, each non-employee director is granted annual stock
options exercisable for 4,000 shares on every Annual Meeting date. The Chairman of the Board of
Directors, if a non-employee, is entitled to receive annual stock options for 8,000 shares. In
2004 each non-employee director was granted options to purchase 4,000 shares. In his initial year,
a director is granted options to purchase 10,000 shares on the date of the Annual Meeting. All
director options vest on the anniversary of each grant. Therefore, all director options will have
vested before the effective time of the merger. 12




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##### Table of Contents



Item 12.
    Security Ownership of Certain Beneficial Owners and Management and Related
Stockholder Matters. The following table sets forth certain information regarding beneficial ownership of the
Companys Common Stock as of April 1, 2005 by (i) each person who is known by the Company to be the
beneficial owner of more than five percent of the Companys outstanding Common Stock, (ii) each
director of the Company, (iii) each Named Executive, and (iv) all directors and executive officers
of the Company as a group. Except as otherwise indicated, the Company believes that the beneficial
owners of the Common Stock listed, based on information furnished by such owners, have sole
investment and voting power with respect to such shares, subject to community property laws where
applicable. Shares
    
    
    PercentName and Address of
    
    Beneficially
    
    
    BeneficiallyBeneficial Owner(1)
    
    Owned(2)(3)
    
    
    Owned(2)Nautilus Acquisition, L.P(4)
    
    
    11,820,195
    
    
    
    49.7
    %c/o DLJ Merchant Banking Partners
11 Madison Avenue
New York, New York 10010C/R Marine Non-U.S. Partnership, L.P.(5)
    
    
    3,757,560
    
    
    
    15.8
    %c/o Riverstone Holdings LLC
712 Fifth Avenue, 19th Floor
New York, New York 10019Dimensional Fund Advisors, Inc.
    
    
    1,587,695
    
    
    
    6.7
    %1299 Ocean Ave., 11th Floor
Santa Monica, CA 90401C/R Marine Domestic Partnership, L.P.(5)
    
    
    1,218,937
    
    
    
    5.1
    %c/o Riverstone Holdings LLC
712 Fifth Avenue, 19th Floor
New York, New York 10019C/R Marine Coinvestment, L.P.(5)
    
    
    512,899
    
    
    
    2.2
    %c/o Riverstone Holdings LLC
712 Fifth Avenue, 19th Floor
New York, New York 10019Gerhard E. Kurz
    
    
    470,000
    
    
    
    2.0
    %C/R Marine Coinvestment II, L.P.(5)
    
    
    368,435
    
    
    
    1.6
    %c/o Riverstone Holdings LLC
712 Fifth Avenue, 19th Floor
New York, New York 10019Hubert E. Thyssen
    
    
    82,900
    
    
    
    *Alan R. Twaits
    
    
    73,000
    
    
    
    *Vincent J. deSostoa
    
    
    57,400
    
    
    
    *Robert L. Keiser
    
    
    31,000
    
    
    
    *Thomas P. Moore, Jr.
    
    
    30,000
    
    
    
    *Peter H. Cressy
    
    
    26,000
    
    
    
    *Kenneth M. Rogers
    
    
    25,667
    
    
    
    *David A. Durkin
    
    
    14,000
    
    
    
    *c/o DLJ Merchant Banking Partners
11 Madison Avenue
New York, New York 10010Kenneth V. Huseman
    
    
    14,000
    
    
    
    *Pierre F. Lapeyre, Jr.
    
    
    14,000
    
    
    
    *
 13




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##### Table of Contents



Shares
    
    
    PercentName and Address of
    
    Beneficially
    
    
    BeneficiallyBeneficial Owner(1)
    
    Owned(2)(3)
    
    
    Owned(2)David M. Leuschen
    
    
    14,000
    
    
    
    *Steven A. Webster
    
    
    14,000
    
    
    
    *Daniel H. Clare
    
    
    
    
    
    
    *c/o DLJ Merchant Banking Partners
11 Madison Avenue
New York, New York 10010All executive officers and directors
as a group (14 persons)
    
    
    861,967
    
    
    
    3.6
    %
   *
    
    Less than one percent(1)
    
    Unless otherwise indicated, the address of each of the persons whose name appears in
the table above is: c/o Seabulk International, Inc., 2200 Eller Drive, P.O. Box 13038, Fort
Lauderdale, Florida 33316.(2)
    
    Includes shares issuable upon the exercise of options that have vested and are
exercisable within 60 days of the date of the filing of this Form 10-K/A. The shares
underlying such options are deemed to be outstanding for the purpose of computing the
percentage of outstanding stock owned by such persons individually and by each group of which
they are a member, but are not deemed to be outstanding for the purpose of computing the
percentage of any other person.(3)
    
    Includes shares of all restricted stock issued, some of which become non-forfeitable in the future.(4)
    
    Includes 11,737,830 shares of our common stock owned by Nautilus. Also includes
82,365 shares of our common stock issuable upon exercise of our Common Stock Purchase Warrants
held by Nautilus, which warrants have an exercise price of $0.01 per share. Nautilus
Intermediary, L.P., Nautilus sole general partner (which we refer to as Nautilus Intermediary
in this 10-K/A), Nautilus AIV, L.P., Nautilus Intermediarys sole general partner (which we
refer to as Nautilus AIV in this 10-K/A) and Nautilus GP, LLC, Nautilus AIVs managing general
partner (which we refer to as Nautilus GP in this 10-K/A), may be deemed to have beneficial
ownership with respect to our securities held by Nautilus. We are referring to Nautilus,
Nautilus Intermediary, Nautilus AIV and Nautilus GP collectively as the Nautilus Entities in
this 10-K/A. The partnership agreements of each of Nautilus, Nautilus Intermediary and
Nautilus AIV grant, directly or indirectly, the exclusive management and decision making
authority (including voting and dispositive power) with respect to our securities held by
Nautilus to Nautilus GP. The members of Nautilus GP are W.M. Craig, Jr., Merkur-Nautilus
Holdings, LLC, Turnham-Nautilus Holdings, LLC and Credit Suisse First Boston Private Equity,
Inc. (which we are referring to as CSFBPE in this 10-K/A). DLJ Merchant Banking Partners III,
L.P. (which we are referring to as Partners III in this 10-K/A) is a limited partner of
Nautilus Intermediary. Certain investment partnerships affiliated with Partners III (which,
collectively with Partners III, we are referring to as the CSFBPE Funds in this 10-K/A) are
the limited partners of Nautilus. DLJ Merchant Banking III, L.P. is also a general partner of
Nautilus AIV, however, it does not have any decision making authority (including voting and
dispositive power) with respect to the investment in us. Credit Suisse First Boston, a Swiss
bank (which we are referring to as the Bank in this 10-K/A) owns a majority of the voting
stock of Credit Suisse First Boston, Inc., which in turn owns all of the voting stock of
Credit Suisse First Boston (USA), Inc. (which we are referring to as CSFB-USA in this 10-K/A).
CSFBPE is a subsidiary of CSFB-USA and the CSFBPE Funds are merchant banking funds managed by
subsidiaries of CSFB-USA. While the Bank and its subsidiaries, to the extent that they
constitute part of the investment banking business (which we are collectively referring to as
the CSFB Entities in this 10-K/A) of Credit Suisse First Boston business unit, disclaim
beneficial ownership of our securities held by Nautilus, as a result of the relationship of
the CSFB Entities to, and the pecuniary interest of the CSFB Entities in, Partners III,
Nautilus AIV and CSFBPE as described above, the CSFB Entities may be deemed to beneficially
own our securities held by Nautilus. The ultimate parent company of the Bank is Credit Suisse
Group (which we are referring to as CSG in this 10-K/A). CSG disclaims beneficial ownership of
the securities owned by its direct and indirect subsidiaries, including Nautilus. Due to their
interest in Nautilus GP, Mr. Craig, Merkur-Nautilus Holdings, LLC and Turnham-Nautilus
Holdings, LLC may be deemed to beneficially own the shares of our common stock held by
Nautilus. Mr. Craig, Merkur-Nautilus Holdings, LLC and Turnham-Nautilus Holdings, LLC
disclaim any such beneficial ownership. The Nautilus Entities and the CSFB Entities may be
considered a group together with the Carlyle/Riverstone Investment Partnerships (as defined
in Note (5) below) and therefore be deemed to beneficially own the shares beneficially owned
by the Carlyle/Riverstone Investment Partnerships, but no such entity affirms the existence of
any such group. Each of the Nautilus Entities and the CSFB Entities disclaim any such
beneficial ownership.(5)
    
    The share numbers in the above table representing the shares of common stock owned
by C/R Marine Domestic Partnership, L.P., C/R Marine Non-U.S. Partnership, L.P., C/R Marine
Coinvestment L.P., and C/R Marine Coinvestment II, L.P. (collectively referred to as the
Carlyle/Riverstone Investment Partnerships), includes 5,816,649 shares of our common stock
owned by the Carlyle/Riverstone Investment Partnership and 41,182 shares of our common stock
issuable upon exercise of our common stock purchase warrants held by the Carlyle/Riverstone
Investment Partnerships, which warrants have an exercise price of $0.01 per share. C/R Marine
GP Corp. exercises investment discretion and control over the all shares held by the
Carlyle/Riverstone Investment Partnerships directly through its capacity as the sole general
partner of the Carlyle/Riverstone Investment Partnerships. William E. Conway, Jr., Daniel A.
DAniello, David M. Rubenstein, Pierre F. Lapeyre, Jr., David M. Leuschen and Jim H.
Derryberry, as the officers and directors of C/R Marine GP Corp., may be deemed to share
beneficial ownership of the shares shown as beneficially owned by the Carlyle/Riverstone
Investment Partnerships. Such persons disclaim such beneficial ownership. Each of the
Carlyle/Riverstone Investment Partnerships may be deemed to beneficially own the shares by the
other the Carlyle/Riverstone Investment Partnerships. Such partnerships disclaim such
beneficial ownership. Such entities may be considered a group together with Nautilus and
therefore be deemed to beneficially own the shares owned by Nautilus. Such entities disclaim
any such beneficial ownership. 14




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##### Table of Contents



Equity Compensation Plan Information The following table provides information as of April 1, 2005 about the shares of the Companys
common stock issuable under the equity compensation plans maintained for employees and directors. Number ofNumber of securities to
    
    
    
    
    
    
    securitiesbe issued upon
    
    
    Weighted average
    
    
    remainingexercise of
    
    
    exercise price of
    
    
    available forPlan category
    
    outstanding options
    
    
    outstanding options
    
    
    future issuanceEquity compensation
plans approved by
security holders
    
    
    1,464,831
    
    
    $
    8.53
    
    
    
    673,196Equity compensation
plans not approved
by security holders
    
    
    
    
    
    
    
    
    
    
    Total
    
    
    1,464,831
    
    
    $
    8.53
    
    
    
    673,196
 Change of Control On March 16, 2005, the Company and SEACOR Holdings, Inc. (SEACOR), entered into a merger
agreement (the Merger Agreement) with SBLK Acquisition Corp., a Delaware corporation and a
direct, wholly owned subsidiary of SEACOR (Merger Sub) and CORBULK LLC, a Delaware limited
liability company and a direct , wholly owned subsidiary of SEACOR (LLC). The Merger Agreement
provides that, upon the terms and subject to the conditions set forth in the Merger Agreement, the
Merger Sub will merge with and into the Company, with the Company continuing as the surviving
corporation and a direct, wholly owned subsidiary of SEACOR (the Merger). A special meeting of
stockholders of the Company is expected to be scheduled in June 2005 to consider and approve the
Merger. The Merger, if it is approved by the stockholders of the Company and SEACOR and it is
completed as anticipated by the Company, will constitute a change of control of the Company. 
 Item 13. Certain Relationships and Related Transactions. As part of the equity investment transaction completed in September 2002, the Company, the
investors, Nautilus, the C/R Entities and Gerhard Kurz entered into a Stockholders Agreement dated
as of September 13, 2002 which included provisions relating to the right of the investors to
designate the majority of the directors on the Board of Directors, independent director oversight
of affiliated party transactions, certain protective rights to minority shareholders, and related
amendments to the Companys Certificate of Incorporation and By-laws. 
 Item 14. Principal Accountant Fees and Services. Ernst & Young, LLP (E&Y) is the independent registered public accounting firm that audits the financial
statements of the Company and its subsidiaries and is the principal accountant for the audit of the
Company. 15




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##### Table of Contents



Aggregate fees for professional services rendered by E&Y for the Company in 2004 and 2003
were: 2004
    
    
    2003Audit Fees
    
    $
    1,018,713
    
    
    $
    1,082,173Audit-Related Fees
    
    
    75,869
    
    
    
    58,121Tax Fees
    
    
    438,390
    
    
    
    28,296All Other Fees
    
    
    n/a
    
    
    
    n/aTotal
    
    $
    1,532,972
    
    
    $
    1,168,590
 Audit fees relate to the audit services and quarterly reviews, as well as the preparation of
comfort letters, consents and review of documents filed with the SEC. Audit-related fees relate primarily to the audits of the Companys benefit plans and
accounting research and consultation. Tax fees relate to tax planning and consulting services and preparation and review of our tax
returns. All other fees relate to services not classifiable under the other categories listed in the
table above. No such services were rendered by E&Y during the last two years. The Audit Committee pre-approves all audit, audit-related, and non-audit services provided by
the Companys independent registered public accounting firm prior to the engagement of the independent registered public accounting firm with respect
to such services. In addition to separately approved services, the Audit Committees pre-approval
policy provides for pre-approval of specifically described audit, audit-related, and non-audit
services on an annual basis. The policy authorizes the Committee to delegate to one or more of its
members pre-approval authority with respect to permitted services. None of the services described
above were approved by the Audit Committee under the de minimis exception provided by Rule
2-01(c)(7)(i)(C) under Regulation S-X. 16




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##### Table of Contents



Part IV 
 Item 15. Exhibits, Financial Statement Schedules. (a)     Financial Statements and Schedules. See Index to Consolidated Financial Statements
and Schedules which appears on page F-1 herein. (b)     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/A 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. 17




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##### Table of Contents



EXHIBIT INDEX Incorporated byReference toExhibit
    
    
    
    Registration or
    
    Form orNo.
    
    Description
    
    File No.
    
    Report
    
    File Date2.1
    
    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
    
    000-28732
    
    13D/A
    
    Dec. 19993.1(a)
    
    Certificate of Incorporation
    
    
    
    10-K
    
    Apr. 20003.1(b)
    
    Certificate of Merger
    
    
    
    10-K
    
    Apr. 20003.1(c)
    
    Certificate of Merger changing the name
of the Company
    
    
    
    10-K
    
    Mar. 20023.1(d)
    
    Certificate of Amendment
    
    
    
    8-K
    
    Sept. 20023.2
    
    Amended and Restated By-Laws of the
Company
    
    
    
    8-K
    
    Sept. 20023.3
    
    Bylaws, revised effective October 5, 2004
    
    
    
    8-K
    
    Oct. 20044.1
    
    Form of Common Stock Certificate of the
Company4.1(a)
    
    Form of Common Stock Certificate
reflecting new name of the Company
    
    000-28732
    
    10-K
    
    Mar. 20014.2
    
    Form of Class A Warrant Certificate of
the Company
    
    333-30390
    
    S-3
    
    Feb. 20004.2(a)
    
    Form of Class A Warrant Certificate
reflecting new name of the Company
    
    000-28732
    
    10-K
    
    Mar. 20014.3
    
    Warrant Agreement, dated December 15,
1999, between Hvide Marine Incorporated
and State Street Bank and Trust Company
as Warrant Agent
    
    333-30390
    
    S-3/A
    
    May 20004.4
    
    Class A Warrant Agreement, dated as of
December 15, 1999, by and between Hvide Marine Incorporated and State Street
Bank and Trust Company
    
    333-30390
    
    S-3
    
    Feb. 20004.5
    
    Amended and Restated Equity Ownership
Plan
    
    000-28732
    
    14A
    
    Apr. 20034.5(a)
    
    Amendment to Amended and Restated Equity
Ownership Plan4.6
    
    Stock Option Plan for Directors
    
    000-28732
    
    14A
    
    Apr. 20034.6(a)
    
    Amendment to Stock Option Plan for
Directors4.7
    
    Indenture, dated as of August 5, 2003,
among Seabulk International, Inc., the
Guarantors named therein, and Wachovia
Bank, National Association, as Trustee
(including forms of notes)
    
    333-110138
    
    S-4
    
    Oct. 20034.8
    
    Registration Rights Agreement dated as
of August 5, 2003 between Seabulk
International, Inc. and Credit Suisse
First Boston LLC, Banc of America
Securities LLC, RBC Dominion Securities
Corporation and Merrill Lynch, Pierce,
Fenner & Smith Incorporated
    
    333-110138
    
    S-4
    
    Oct. 20034.9
    
    Supplemental Indenture, dated as of
October 3, 2003, among Seabulk
International, Inc., the Guarantors
named therein, and Wachovia Bank,
National Association, as Trustee
    
    333-110138
    
    S-4
    
    Oct. 200310.1
    
    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
    
    000-28732
    
    8-K
    
    Dec. 1999
 18




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##### Table of Contents



Incorporated byReference toExhibit
    
    
    
    Registration or
    
    Form orNo.
    
    Description
    
    File No.
    
    Report
    
    File DateCorp.,
American Empire Surplus Lines Insurance
Company, Worldwide Insurance Company and
American National Fire Insurance Company
as
Purchasers10.2*
    
    Employment Agreement dated as of April
18, 2000 between the Company and Gerhard
E. Kurz
    
    000-28732
    
    10-K
    
    Mar. 200110.3*
    
    Amendment to Employment Agreement dated
July 16, 2001 between the Company and
Gerhard E. Kurz
    
    000-28732
    
    10-K
    
    Mar. 200210.4
    
    Stock Purchase Agreement by and among
Seabulk International, Inc. and the
Investors listed on Schedule 1 thereto,
dated as of June 13, 2002
    
    000-28732
    
    8-K
    
    June 200210.5
    
    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
    
    000-28732
    
    8-K
    
    Sept. 200210.6*
    
    Amendment to Employment Agreement, dated
as of September 13, 2002, between the
Company and Gerhard E. Kurz
    
    000-28732
    
    8-K
    
    Sept. 200210.7*
    
    Severance Agreement and Release between
the Company and Andrew W. Brauninger
    
    000-28732
    
    10-Q
    
    May 200310.8
    
    Seabulk International, Inc. Executive
Deferred Compensation Plan
    
    000-28732
    
    10-Q
    
    May 200310.8(a)
    
    Amendment to Seabulk International, Inc.
Executive Deferred Compensation Plan10.9
    
    Summary Provisions of the Seabulk
International, Inc. Management Annual
Incentive Compensation Plan
    
    000-28732
    
    10-Q
    
    May 200310.10
    
    Amended and Restated Credit Agreement,
dated as of August 5, 2003, 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
    
    333-110138
    
    S-4
    
    Oct. 200310.11
    
    Supplemental Indenture, dated as of
March 22, 2004, among Seabulk
International, Inc., the Guarantors
named therein, and Wachovia Bank,
National Association, as Trustee
    
    000-28732
    
    10-K
    
    Mar. 200410.12
    
    Loan Agreement among Seabulk Global
Transport, Inc. and Seabulk Overseas
Transport, Inc., as Joint and Several
Borrowers, the Guarantors named therein,
the Banks and Financial Institutions
listed therein, Nordea Bank Finland PLC,
New York Branch, as Arranger and Agent,
Nordea Bank Finland PLC, New York
Branch, as Security Trustee, and Nordea
Bank
    
    000-28732
    
    10-K
    
    Mar. 2004
 19




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##### Table of Contents



Incorporated byReference toExhibit
    
    
    
    Registration or
    
    Form orNo.
    
    Description
    
    File No.
    
    Report
    
    File DateFinland PLC, New York Branch, as
Swap Provider10.13
    
    Amendment Number 1 to the Amended and
Restated Credit Agreement dated as of
March, 2004
    
    000-28732
    
    10-Q
    
    Apr. 200410.14*
    
    Severance Agreement between the Company
and Vincent J. deSostoa dated April 10,
2003
    
    000-28732
    
    10-Q
    
    Aug. 200410.15*
    
    Severance Agreement between the Company
and Larry D. Francois dated April 10,
2003
    
    000-28732
    
    10-Q
    
    Aug. 200410.16*
    
    Severance Agreement between the Company
and Alan R. Twaits dated April 10, 2003
    
    000-28732
    
    10-Q
    
    Aug. 200410.17*
    
    Severance Agreement between the Company
and Hubert E. Thyssen dated April 21,
2003
    
    000-28732
    
    10-Q
    
    Aug. 200410.18*
    
    Severance Agreement between the Company
and Michael J. Pellicci dated as of May
27, 2004
    
    000-28732
    
    10-Q
    
    Aug. 200410.19*
    
    Severance Agreement between the Company
and Kenneth M. Rogers dated as of May
27, 2004.
    
    000-28732
    
    10-Q
    
    Aug. 200410.20*
    
    Severance Agreement between the Company
and L. Stephen Willrich dated as of May
27, 2004
    
    000-28732
    
    10-Q
    
    Aug. 200410.21
    
    Subsidiary Guarantee Agreement dated as
of March 16, 2004, among Seabulk
International, Inc., the Subsidiary
Guarantors named therein, Fortis Capital
Corp, as Agents for the Counterparties
to the Swap Agreements, Fortis Capital
Corp., as Counterparty, NIB Capital Bank
N.V., as Counterparty, and HBOS Treasury
Services PLC, as Counterparty
    
    000-28732
    
    10-Q
    
    Aug. 200410.22
    
    Supplemental Credit Agreement dated as
of June 17, 2004 between Seabulk
International, Inc., as Borrower, and
Fortis Capital Corp., as Agent
    
    000-28732
    
    10-Q
    
    Aug. 200410.23
    
    First Supplemental Subsidiary Guarantee
Agreement dated as of June 17, 2004
between Seabulk International, Inc., as
Borrower, and Fortis Capital Corp., as
Agent
    
    000-28732
    
    10-Q
    
    Aug. 200410.24
    
    Loan Agreement in the amount of U.S.
$11,840,000 dated October 5, 2004
between Seabulk Angola, Inc., as
Borrower, and Caterpillar Financial
Services Corporation, as Lender, for the
construction and financing of the 65
meter anchor handling tug supply vessel
Seabulk Luanda
    
    000-28732
    
    8-K
    
    Oct. 200410.25*
    
    Amendment No. 1 to the Severance
Agreement between the Company and
Vincent J. deSostoa dated September 15,
2004
    
    000-28732
    
    10-Q
    
    Nov. 200410.26*
    
    Amendment No. 1 to the Severance
Agreement between the Company and Larry
D. Francois dated September 15, 2004.
    
    000-28732
    
    10-Q
    
    Nov. 200410.27*
    
    Amendment No. 1 to the Severance
Agreement between the Company and Alan
R. Twaits dated September 15, 2004
    
    000-28732
    
    10-Q
    
    Nov. 200410.28*
    
    Amendment No. 1 to the Severance
Agreement between the Company and Hubert
E. Thyssen dated September 15, 2004
    
    000-28732
    
    10-Q
    
    Nov. 2004
 20




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##### Table of Contents



Incorporated byReference toExhibit
    
    
    
    Registration or
    
    Form orNo.
    
    Description
    
    File No.
    
    Report
    
    File Date10.29*
    
    Amendment No. 1 to the Severance
Agreement between the Company and
Michael J. Pellicci dated September 15,
2004
    
    000-28732
    
    10-Q
    
    Nov. 200410.30*
    
    Amendment No. 1 to the Severance
Agreement between the Company and
Kenneth M. Rogers dated September 15,
2004
    
    000-28732
    
    10-Q
    
    Nov. 200410.31*
    
    Amendment No. 1 to the Severance
Agreement between the Company and L.
Stephen Willrich dated
September 15, 2004
    
    000-28732
    
    10-Q
    
    Nov. 200410.32*
    
    Amendment No. 3 to Executive Employment
Agreement by and between Gerhard E. Kurz
and Seabulk International, Inc
    
    000-28732
    
    10-Q
    
    Nov. 200410.33
    
    Loan Agreement in the amount of
Singapore $14,384,000 dated July 15,
2004 between Seabulk Angola, Inc., as
Borrower, and Caterpillar Financial
Services Corporation, as Lender, for the
construction and acquisition of the 162
terminal support vessel Seabulk Angola
    
    000-28732
    
    10-Q
    
    Nov. 200410.34
    
    Second Supplemental Credit Agreement
dated August 6, 2004 between Seabulk
International, Inc., as Borrower, and
Fortis Capital Corp., as Agent
    
    000-28732
    
    10-Q
    
    Nov. 200410.35
    
    Second Supplemental Subsidiary Guarantee
Agreement dated August 6, 2004 between
Seabulk International, Inc., as
Borrower, and Fortis Capital Corp., as
Agent
    
    000-28732
    
    10-Q
    
    Nov. 200410.36
    
    Shipbuilding Contract dated October 26,
2004 between Seabulk Angola, Inc. and
Labroy Shipbuilding and Engineering Pte
Ltd. (Hull T145)
    
    000-28732
    
    10-Q
    
    Nov. 200410.37
    
    Shipbuilding Contract dated October 26,
2004 between Seabulk Angola, Inc. and
Labroy Shipbuilding and Engineering Pte
Ltd. (Hull T146)
    
    000-28732
    
    10-Q
    
    Nov. 200410.38
    
    Shipbuilding Contract dated October 26,
2004 between Seabulk Angola, Inc. and
Labroy Shipbuilding and Engineering Pte
Ltd. (Hull T147)
    
    000-28732
    
    10-Q
    
    Nov. 200410.39
    
    Shipbuilding Contract dated October 26,
2004 between Seabulk Angola, Inc. and
Labroy Shipbuilding and Engineering Pte
Ltd. (Hull T148)
    
    000-28732
    
    10-Q
    
    Nov. 200410.40
    
    Agreement for the Purchase and Sale of
Selected Assets between Seabulk
Transport, Inc. and Stolt-Nielsen
Transportation Group, Inc. dated
December 15, 2004
    
    000-28732
    
    8-K
    
    Dec. 200410.41*
    
    Specimen form of Non-Qualified Stock
Option Agreement
    
    000-28732
    
    8-K
    
    Jan. 200510.41(a)*
    
    Specimen form of Amendment to
Non-Qualified Stock Option Agreement10.42*
    
    Specimen form of Restricted Stock
Agreement
    
    000-28732
    
    8-K
    
    Jan. 200510.43*
    
    Severance Agreement between the Company
and
Bryn D. Jones dated November 18, 2004
    
    000-28732
    
    10-K
    
    Mar. 2005
 21




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##### Table of Contents



Incorporated byReference toExhibit
    
    
    
    Registration or
    
    Form orNo.
    
    Description
    
    File No.
    
    Report
    
    File Date10.44
    
    Third Supplemental Credit Agreement
dated December 10, 2004 between Seabulk
International, Inc., as Borrower, and
Fortis Capital Corp., as Agent
    
    000-28732
    
    10-K
    
    Mar. 200510.45
    
    Third Supplemental Subsidiary Guarantee
Agreement dated December 10, 2004
between Seabulk International, Inc., as
Borrower, and Fortis Capital Corp., as
Agent
    
    000-28732
    
    10-K
    
    Mar. 200510.46
    
    Directors Compensation Statement10.47*
    
    Amendment No. 4 to Executive Employment
Agreement between Gerhard E. Kurz and
Seabulk International, Inc. dated as of
April 18, 200510.48*
    
    Specimen form of Amendment No. 2 to Form
Severance Agreement21.
    
    List of Subsidiaries
    
    000-28732
    
    10-K
    
    Mar. 200523.1
    
    Consent of Independent Registered Public
Accounting Firm31.1
    
    Certification of Principal Executive
Officer pursuant to Rule 13a-14(a) of
the Securities Exchange Act of 193431.2
    
    Certification of Principal Financial
Officer pursuant to Rule 13a-14(a) of
the Securities Exchange Act of 193432.1
    
    Certification of Principal Executive
Officer pursuant to 18 U.S.C. §1350, as
adopted pursuant to Section 906 of the
Sarbanes-Oxley Act of 2002 and Rule
13a-14(b) of the Securities Exchange Act
of 1934 (furnished herewith)32.2
    
    Certification of Principal Financial
Officer pursuant to 18 U.S.C. §1350, as
adopted pursuant to Section 906 of the
Sarbanes-Oxley Act of 2002 and Rule
13a-14(b) of the Securities Exchange Act
of 1934 (furnished herewith)99.1
    
    Order dated December 9, 1999 of the
United States Bankruptcy Court for the
District of Delaware 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)]
    
    000-28732
    
    8-K
    
    Dec. 1999
   *
    
    Indicates a management contract or compensation arrangement 22




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##### Table of Contents



SIGNATURES Pursuant to the requirements of Section 13 or 15(d) of the Securities Exchange Act of 1934,
this report has been signed on behalf of the registrant by the undersigned, thereunto duly
authorized, on the 20th day of April, 2005. SEABULK INTERNATIONAL, INC.By:
    
    /s/ GERHARD E. KURZGerhard E. KurzChairman, President, and Chief Executive Officer
 Pursuant to the requirements of the Securities Exchange Act of 1934, this report has been
signed below by the following persons on behalf of the registrant and in the capacities and on the
dates indicated. Signature
    
    Title
    
    Date/s/ GERHARD E. KURZ
    
    Chairman, President,
    
    April 20, 2005and Chief Executive OfficerGerhard E. Kurz
    
    (Principal Executive Officer)/s/ VINCENT J. deSOSTOA
    
    Senior Vice President and
    
    April 20, 2005Chief Financial OfficerVincent J. deSostoa
    
    (Principal Financial Officer)/s/ MICHAEL J. PELLICCI
    
    Senior Vice President  Finance
    
    April 20, 2005and Planning, Treasurer andMichael J. Pellicci
    
    Chief Accounting Officer(Principal Accounting Officer)/s/ DANIEL H. CLARE
    
    Director
    
    April 20, 2005Daniel H. Clare/s/ PETER H. CRESSY
    
    Director
    
    April 20, 2005Peter H. Cressy/s/ DAVID A. DURKIN
    
    Director
    
    April 20, 2005David A. Durkin/s/ KENNETH V. HUSEMAN
    
    Director
    
    April 20, 2005Kenneth V. Huseman/s/ ROBERT L. KEISER
    
    Director
    
    April 20, 2005Robert L. Keiser/s/ PIERRE F. LAPEYRE, JR.
    
    Director
    
    April 20, 2005Pierre F. Lapeyre, Jr./s/ DAVID M. LEUSCHEN
    
    Director
    
    April 20, 2005David M. Leuschen/s/ THOMAS P. MOORE, JR.
    
    Director
    
    April 20, 2005Thomas P. Moore, Jr./s/ STEVEN A. WEBSTER
    
    Director
    
    April 20, 2005Steven A. Webster
 23




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##### Table of Contents



Seabulk International, Inc. and Subsidiaries Index to Consolidated Financial Statements Report of Independent Registered Public Accounting Firm
    
    
    F-2Consolidated Financial Statements:Consolidated Balance Sheets as of December 31, 2004 and 2003
    
    
    F-3Consolidated Statements of Operations for the years ended December 31, 2004, 2003, and 2002
    
    
    F-4Consolidated Statements of Cash Flows for the years ended December 31, 2004, 2003, and 2002
    
    
    F-5Consolidated Statements of Changes in Stockholders Equity for the years ended December 31,
2004, 2003, and 2002
    
    
    F-7Notes to Consolidated Financial Statements
    
    
    F-9
 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




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##### Table of Contents



REPORT OF INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM 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, 2004 and 2003, and the related consolidated statements of
operations, cash flows, and changes in stockholders equity, for each of the three years in the
period ended December 31, 2004. 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 the standards of the Public Company Accounting
Oversight Board (United States). Those standards require that we plan and perform the audit to
obtain reasonable assurance about whether the financial statements are free of material
misstatement. An audit includes consideration of internal control over financial reporting as a
basis for designing audit procedures that are appropriate in the circumstances, but not for the
purpose of expressing an opinion on the effectiveness of the Companys internal control over
financial reporting. Accordingly, we express no such opinion. An audit also includes examining, on
a test basis, evidence supporting the amounts and disclosures in the financial statements,
assessing the accounting principles used and significant estimates made by management, and
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, 2004 and 2003, and the consolidated results of their operations and their cash flows
for each of the three years in the period ended December 31,
2004, in conformity with U.S. generally
accepted accounting principles. As described in Note 2, the Company restated the accompanying consolidated statements of cash
flows for the years ended December 31, 2003 and 2002. /s/ Ernst & Young LLPCertified Public Accountants
 
 F-2




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##### Table of Contents



SEABULK INTERNATIONAL, INC. AND SUBSIDIARIES
CONSOLIDATED BALANCE SHEETS
(in thousands, except par value data) December 31,2004
    
    
    2003AssetsCurrent assets:Cash and cash equivalents
    
    $
    18,949
    
    
    $
    7,399Restricted cash
    
    
    35,681
    
    
    
    28,458Trade accounts receivable net of allowance for doubtful accounts of $5,649 in 2004
an and $4,321 in 2003, respectively
    
    
    55,209
    
    
    
    49,599Other receivables
    
    
    3,784
    
    
    
    10,730Marine operating supplies
    
    
    7,868
    
    
    
    8,155Prepaid expenses and other current assets
    
    
    3,627
    
    
    
    3,045Total current assets
    
    
    125,118
    
    
    
    107,386Vessels and equipment, net
    
    
    598,793
    
    
    
    527,026Deferred costs, net
    
    
    45,053
    
    
    
    48,486Other
    
    
    17,824
    
    
    
    11,542Total assets
    
    $
    786,788
    
    
    $
    694,440Liabilities and Stockholders EquityCurrent liabilities:Accounts payable
    
    $
    14,918
    
    
    $
    18,805Current maturities of long-term debt
    
    
    16,653
    
    
    
    11,037Current obligations under capital leases
    
    
    3,708
    
    
    
    3,521Accrued interest
    
    
    4,875
    
    
    
    5,812Accrued liabilities and other
    
    
    35,321
    
    
    
    37,363Total current liabilities
    
    
    75,475
    
    
    
    76,538Long-term debt
    
    
    325,965
    
    
    
    258,217Senior notes
    
    
    152,906
    
    
    
    151,472Obligations under capital leases
    
    
    28,568
    
    
    
    32,246Other liabilities
    
    
    4,879
    
    
    
    3,136Total liabilities
    
    
    587,793
    
    
    
    521,609Commitments and contingenciesMinority interest
    
    
    
    
    
    
    476Stockholders equity:Preferred stock, no par value-authorized 5,000; issued and outstanding, none
    
    
    
    
    
    
    Common stock-$.01 par value, authorized 40,000 shares; 23,446 and 23,347 shares
issued and outstanding in 2004 and
2003, respectively
    
    
    234
    
    
    
    233Additional paid-in capital
    
    
    259,843
    
    
    
    259,134Accumulated other comprehensive income
    
    
    55
    
    
    
    Unearned compensation
    
    
    (758
    )
    
    
    (699
    )Accumulated deficit
    
    
    (60,379
    )
    
    
    (86,313
    )Total stockholders equity
    
    
    198,995
    
    
    
    172,355Total liabilities and stockholders equity
    
    $
    786,788
    
    
    $
    694,440
 See notes to consolidated financial statements. F-3




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##### Table of Contents



SEABULK INTERNATIONAL, INC. AND SUBSIDIARIES
CONSOLIDATED STATEMENTS OF OPERATIONS
(in thousands, except per share data) Year Ended December 31,2004
    
    
    2003
    
    
    2002Revenue
    
    $
    352,328
    
    
    $
    316,558
    
    
    $
    323,997Vessel and voyage expenses:Crew payroll and benefits
    
    
    88,893
    
    
    
    86,409
    
    
    
    88,473Charter hire
    
    
    13,848
    
    
    
    9,575
    
    
    
    7,607Repairs and maintenance
    
    
    26,560
    
    
    
    27,282
    
    
    
    30,345Insurance
    
    
    11,915
    
    
    
    13,285
    
    
    
    11,385Fuel and consumables
    
    
    30,316
    
    
    
    25,405
    
    
    
    28,365Port charges and other
    
    
    20,912
    
    
    
    17,720
    
    
    
    16,383192,444
    
    
    
    179,676
    
    
    
    182,558General and administrative
    
    
    37,526
    
    
    
    38,043
    
    
    
    38,657Depreciation, amortization and drydocking
    
    
    66,132
    
    
    
    65,373
    
    
    
    66,376Write-down of assets held for sale
    
    
    
    
    
    
    1,219
    
    
    
    Gain on disposal of assets
    
    
    (4,116
    )
    
    
    (1,463
    )
    
    
    (1,364
    )Income from operations
    
    
    60,342
    
    
    
    33,710
    
    
    
    37,770Other income (expense):Interest expense
    
    
    (33,888
    )
    
    
    (33,853
    )
    
    
    (44,715
    )Interest income
    
    
    309
    
    
    
    355
    
    
    
    475Minority interest in (gains) losses of subsidiaries
    
    
    (419
    )
    
    
    147
    
    
    
    219Loss on early extinguishment of debt
    
    
    
    
    
    
    (1,567
    )
    
    
    (27,823
    )Other, net
    
    
    4,624
    
    
    
    481
    
    
    
    (154
    )Total other income (expense), net
    
    
    (29,374
    )
    
    
    (34,437
    )
    
    
    (71,998
    )Income (loss) before provision for income taxes
    
    
    30,968
    
    
    
    (727
    )
    
    
    (34,228
    )Provision for income taxes
    
    
    5,034
    
    
    
    4,238
    
    
    
    4,642Net income (loss)
    
    $
    25,934
    
    
    $
    (4,965
    )
    
    $
    (38,870
    )Net income (loss) per common share:Net income (loss) per common share  basic
    
    $
    1.11
    
    
    $
    (0.21
    )
    
    $
    (2.72
    )Net income (loss) per common share  diluted
    
    $
    1.09
    
    
    $
    (0.21
    )
    
    $
    (2.72
    )Weighted average common shares outstanding  basic
    
    
    23,264
    
    
    
    23,176
    
    
    
    14,277Weighted average common shares outstanding 
diluted
    
    
    23,761
    
    
    
    23,176
    
    
    
    14,277
 See notes to consolidated financial statements. F-4




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##### Table of Contents



SEABULK INTERNATIONAL, INC. AND SUBSIDIARIES
CONSOLIDATED STATEMENTS OF CASH FLOWS
(in thousands) As of December 31,2004
    
    
    2003
    
    
    2002(as restated, see Note 2)Operating activities:Net income (loss)
    
    $
    25,934
    
    
    $
    (4,965
    )
    
    $
    (38,870
    )Adjustments to reconcile net income (loss) to net cash provided by
operating activities:Depreciation and amortization of vessels and equipment
    
    
    40,537
    
    
    
    42,330
    
    
    
    43,711Expenditures for drydocking
    
    
    (22,931
    )
    
    
    (31,539
    )
    
    
    (23,441
    )Amortization of drydocking costs
    
    
    25,595
    
    
    
    23,043
    
    
    
    22,665Amortization of discount on long-term debt and deferred
financing costs
    
    
    1,701
    
    
    
    1,531
    
    
    
    4,249Amortization of unearned compensation
    
    
    255
    
    
    
    238
    
    
    
    99Provision for (recovery of) bad debts
    
    
    1,774
    
    
    
    (79
    )
    
    
    (93
    )Gain on disposal of assets
    
    
    (4,116
    )
    
    
    (1,463
    )
    
    
    (1,364
    )Loss on early extinguishment of debt
    
    
    
    
    
    
    1,567
    
    
    
    27,823Minority interest in gains (losses) of subsidiaries
    
    
    419
    
    
    
    (147
    )
    
    
    (219
    )Write-down of assets held for sale
    
    
    
    
    
    
    1,219
    
    
    
    Senior and notes payable issued for payment of interest and fees
    
    
    
    
    
    
    
    
    
    
    626Other non-cash items
    
    
    60
    
    
    
    
    
    
    
    551Changes in operating assets and liabilities:Trade accounts and other receivables
    
    
    (438
    )
    
    
    (8,404
    )
    
    
    12,043Other current and long-term assets
    
    
    (3,517
    )
    
    
    1,099
    
    
    
    (4,129
    )Accounts payable and other liabilities
    
    
    (6,128
    )
    
    
    13,893
    
    
    
    (6,039
    )Net cash provided by operating activities
    
    
    59,145
    
    
    
    38,323
    
    
    
    37,612Investing activities:Purchases of vessels and equipment
    
    
    (112,740
    )
    
    
    (30,683
    )
    
    
    (3,753
    )Proceeds from disposals of assets
    
    
    6,363
    
    
    
    9,425
    
    
    
    12,675Investment in joint venture
    
    
    (300
    )
    
    
    (400
    )
    
    
    Acquisition of minority interest
    
    
    (2,410
    )
    
    
    
    
    
    
    Net cash (used in) provided by investing activities
    
    
    (109,087
    )
    
    
    (21,658
    )
    
    
    8,922
 F-5




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##### Table of Contents



SEABULK INTERNATIONAL, INC. AND SUBSIDIARIES
CONSOLIDATED STATEMENTS OF CASH FLOWS
(in thousands) Year Ended December 31,2004
    
    
    2003
    
    
    2002(as restated, see Note 2)Financing activities:Net payments of revolving credit facility
    
    
    
    
    
    
    
    
    
    
    (9,000
    )Payments of prior credit facility
    
    
    
    
    
    
    (148,179
    )
    
    
    (125
    )Proceeds from prior credit facility
    
    
    
    
    
    
    
    
    
    
    178,800Payments of prior Senior notes
    
    
    
    
    
    
    
    
    
    
    (101,499
    )Proceeds from 2003 Senior Notes
    
    
    
    
    
    
    150,000
    
    
    
    Proceeds of Private placement, net of issuance costs
    
    
    
    
    
    
    
    
    
    
    90,901Payments on Amended Credit Facility
    
    
    (1,483
    )
    
    
    
    
    
    
    Proceeds from Amended Credit Facility
    
    
    20,000
    
    
    
    
    
    
    
    Payments of long-term debt
    
    
    (7,856
    )
    
    
    (7,408
    )
    
    
    (165,817
    )Proceeds from long-term debt
    
    
    69,851
    
    
    
    8,622
    
    
    
    Payments of Title XI bonds
    
    
    (7,148
    )
    
    
    (7,378
    )
    
    
    (7,166
    )Retirement of Title XI bonds
    
    
    
    
    
    
    (11,181
    )
    
    
    Payments of deferred financing costs under prior credit facility
    
    
    
    
    
    
    (88
    )
    
    
    (4,128
    )Payments of deferred financing costs under Senior notes
and amended credit facility
    
    
    (285
    )
    
    
    (5,458
    )
    
    
    Payments of other deferred financing costs
    
    
    (1,269
    )
    
    
    (226
    )
    
    
    Net proceeds from sale leaseback
    
    
    
    
    
    
    13,274
    
    
    
    Payments of obligations under capital leases
    
    
    (3,491
    )
    
    
    (9,422
    )
    
    
    (2,986
    )Proceeds from exercise of stock options
    
    
    396
    
    
    
    307
    
    
    
    42Proceeds from exercise of warrants
    
    
    
    
    
    
    2
    
    
    
    1Increase in restricted cash
    
    
    (7,223
    )
    
    
    (9,675
    )
    
    
    (12,435
    )Net cash provided by (used in) financing activities
    
    
    61,492
    
    
    
    (26,810
    )
    
    
    (33,412
    )Change in cash and cash equivalents
    
    
    11,550
    
    
    
    (10,145
    )
    
    
    13,122Cash and cash equivalents at beginning of period
    
    $
    7,399
    
    
    $
    17,544
    
    
    $
    4,422Cash and cash equivalents at end of period
    
    $
    18,949
    
    
    $
    7,399
    
    
    $
    17,544Supplemental schedule of non-cash investing and financing
activities:Obligation for fair market value of interest rate swap
    
    $
    1,434
    
    
    $
    1,472
    
    
    $
    Vessels exchanged for drydock expenditures
    
    $
    
    
    
    $
    
    
    
    $
    900Senior and notes payable issued for payment of accrued interest
and fees
    
    $
    
    
    
    $
    
    
    
    $
    626Issuance of restricted common stock
    
    $
    314
    
    
    $
    838
    
    
    $
    Supplemental disclosures:Interest paid
    
    $
    33,315
    
    
    $
    27,780
    
    
    $
    40,085Income taxes paid
    
    $
    3,646
    
    
    $
    4,169
    
    
    $
    4,537
 See notes to consolidated financial statements. F-6




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##### Table of Contents



SEABULK INTERNATIONAL, INC. AND SUBSIDIARIES
CONSOLIDATED STATEMENTS OF CHANGES IN STOCKHOLDERS EQUITY
(in thousands) AdditionalCommon Stock
    
    
    Paid-InShares
    
    
    Amount
    
    
    CapitalBalance at December 31, 2001
    
    
    10,506
    
    
    $
    105
    
    
    $
    167,259Comprehensive loss:Net loss
    
    
    
    
    
    
    
    
    
    
    Translation adjustment
    
    
    
    
    
    
    
    
    
    
    Total comprehensive loss
    
    
    
    
    
    
    
    
    
    
    Common stock issued upon Private Placement, net
of issuance costs of $9,160
    
    
    12,500
    
    
    
    125
    
    
    
    90,715Common stock issued upon exercise of warrants
    
    
    112
    
    
    
    1
    
    
    
    Common stock issued upon exercise of options
    
    
    6
    
    
    
    
    
    
    
    42Amortization of unearned compensation
    
    
    
    
    
    
    
    
    
    
    Balance at December 31, 2002
    
    
    23,124
    
    
    $
    231
    
    
    $
    258,016Comprehensive loss:Net loss
    
    
    
    
    
    
    
    
    
    
    Translation adjustment
    
    
    
    
    
    
    
    
    
    
    Total comprehensive loss
    
    
    
    
    
    
    
    
    
    
    Issuance costs related to Private Placement
    
    
    
    
    
    
    
    
    
    
    (27
    )Common stock issued upon exercise of warrants
    
    
    51
    
    
    
    
    
    
    
    2Common stock issued upon exercise of options
    
    
    57
    
    
    
    1
    
    
    
    306Restricted common stock issued to officers
    
    
    115
    
    
    
    1
    
    
    
    837Amortization of unearned compensation
    
    
    
    
    
    
    
    
    
    
    Balance at December 31, 2003
    
    
    23,347
    
    
    $
    233
    
    
    $
    259,134Comprehensive income:Net income:
    
    
    
    
    
    
    
    
    
    
    Foreign currency item
    
    
    
    
    
    
    
    
    
    
    Total comprehensive income:
    
    
    
    
    
    
    
    
    
    
    Common stock issued upon exercise of warrants
    
    
    1
    
    
    
    
    
    
    
    Common stock issued upon exercise of options
    
    
    67
    
    
    
    1
    
    
    
    395Restricted common stock issued to officers
    
    
    31
    
    
    
    
    
    
    
    314Amortization of unearned compensation
    
    
    
    
    
    
    
    
    
    
    Other comprehensive income
    
    
    
    
    
    
    
    
    
    
    Balance at December 31, 2004
    
    
    23,446
    
    
    $
    234
    
    
    $
    259,843
 See notes to consolidated financial statements. F-7




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##### Table of Contents



SEABULK INTERNATIONAL, INC. AND SUBSIDIARIESCONSOLIDATED STATEMENTS OF CHANGES IN STOCKHOLDERS EQUITY(in thousands)
 AccumulatedOtherComprehensive
    
    
    Unearned
    
    
    (AccumulatedIncome (Loss)
    
    
    Compensation
    
    
    Deficit)
    
    
    TotalBalance at December 31, 2001
    
    $
    (1
    )
    
    $
    (198
    )
    
    $
    (42,478
    )
    
    $
    124,687Comprehensive loss:Net loss
    
    
    
    
    
    
    
    
    
    
    (38,870
    )
    
    
    (38,870
    )Translation adjustment
    
    
    1
    
    
    
    
    
    
    
    
    
    
    
    1Total comprehensive loss
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    (38,869
    )Common Stock issued upon Private Placement, net
of issuance costs of $9,160
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    90,840Common stock issued upon exercise of warrants
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    1Common stock issued upon exercise of options
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    42Amortization of unearned compensation
    
    
    
    
    
    
    99
    
    
    
    
    
    
    
    99Balance at December 31, 2002
    
    $
    
    
    
    $
    (99
    )
    
    $
    (81,348
    )
    
    $
    176,800Comprehensive loss:Net loss
    
    
    
    
    
    
    
    
    
    
    (4,965
    )
    
    
    (4,965
    )Translation adjustment
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    Total comprehensive loss
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    (4,965
    )Issuance costs related to Private Placement
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    (27
    )Common stock issued upon exercise of warrants
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    2Common stock issued upon exercise of options
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    307Restricted common stock issued to officers
    
    
    
    
    
    
    (838
    )
    
    
    
    
    
    
    Amortization of unearned compensation
    
    
    
    
    
    
    238
    
    
    
    
    
    
    
    238Balance at December 31, 2003
    
    $
    
    
    
    $
    (699
    )
    
    $
    (86,313
    )
    
    $
    172,355Comprehensive income:Net income:
    
    
    
    
    
    
    
    
    
    
    25,934
    
    
    
    25,934Foreign currency item
    
    
    55
    
    
    
    
    
    
    
    
    
    
    
    55Total comprehensive income:
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    25,989Common stock issued upon exercise of warrants
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    Common stock issued upon exercise of options
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    396Restricted common stock issued to officers
    
    
    
    
    
    
    (314
    )
    
    
    
    
    
    
    Amortization of unearned compensation
    
    
    
    
    
    
    255
    
    
    
    
    
    
    
    255Balance at December 31, 2004
    
    $
    55
    
    
    $
    (758
    )
    
    $
    (60,379
    )
    
    $
    198,995
 See notes to consolidated financial statements. F-8




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##### Table of Contents



SEABULK INTERNATIONAL, INC. AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS 1. Organization and Basis of Presentation Seabulk International, Inc. and subsidiaries (collectively, the Company) provide marine
support, tanker and towing 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, Southeast Asia, and South America. The Companys fleet of
tankers transports petroleum products, specialty chemicals and crude oil primarily in the U.S.
domestic trade, with two foreign-flag product tankers in foreign trade. The Company also provides
commercial tug services in several ports primarily 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. 2. Summary of Significant Accounting Policies Restatement.The Company recently reviewed its financial statement presentation and
disclosure in response to comments received from the staff of the Securities and Exchange
Commission (the SEC) in a normal periodic review of the Companys filings. As a result, the
Company is restating the accompanying 2003 and 2002 consolidated statements of cash flows to
classify expenditures for drydocking, $31.5 million and $23.4 million, respectively, as an
operating activity rather than an investing activity. 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 tankers segment, revenue
is earned under time charters, bareboat charters, consecutive voyage charters or
affreightment/voyage contracts. Revenue from time charters and bareboat 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 the affreightment contracts and consecutive voyage charters 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 F-9




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##### Table of Contents



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, 2004 and 2003, restricted cash consisted of cash generated
from the operations of our five U.S.-flag double-hull tankers (see Note 3) and 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. The
Company reclassified approximately $27.0 million from cash and cash equivalents to restricted cash
in the consolidated balance sheet as of December 31, 2003, related to the five U.S.-flag
double-hull tankers, to conform to the 2004 presentation. Additionally, the Company has a
certificate of deposit in the amount of $2.2 million as of December 31, 2004 and 2003, which was
required in the financing of a Brazilian vessel acquired in October 2004 (see Note 6). The
certificate of deposit is classified as long-term restricted cash and is included in other assets
in the accompanying consolidated balance sheets. The Company reclassified $2.2 million related to
the certificate of deposit from restricted cash to other assets in the consolidated balance sheet
as of December 31, 2003 to conform to the 2004 presentation. Accounts Receivable.Substantially all of the Companys accounts receivable are due from
international oil companies and their subcontractors in the drilling 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 Two
customers each accounted for 7% of the Companys total revenue for the years ended December 31,
2004 and 2003. During the years ended December 31, 2004, 2003 and 2002, the Company wrote off
accounts receivable of approximately $0.4 million, $2.4 million and $0.6 million, respectively. Insurance Claims Receivable.Insurance claims receivable represent costs incurred in
connection with insurable incidents for which the Company expects it is probable it will be
reimbursed by the insurance carriers, 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 the 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, included in other receivables in the accompanying consolidated balance sheets,
approximated $1.2 million and $4.0 million at December 31, 2004 and 2003, respectively. Marine Operating Supplies.Such amounts consist of fuel and supplies that are recorded at
cost less a reserve for obsolescence and are 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) SFAS No. 144,
Accounting for the Impairment or Disposal of Long-Lived Assets(SFAS 144), which requires
impairment losses to be recorded on long-lived assets used in operations when indicators of
impairment are present and the estimated undiscounted cash flows to be generated by those assets
are less than the assets carrying value. 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. The Company did
not recognize an impairment loss in 2004 and 2002 related to assets held for use or sale. An
impairment loss of $1.2 million was recognized in 2003 related to assets held for sale. F-10




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##### Table of Contents



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 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 discontinued at the time of the
reclassification. Total assets held for sale (primarily assets in the offshore energy segment)
were approximately $0.3 million and $0.4 million at December 31, 2004 and 2003, 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 recorded in operating
income. Major renewals and betterments that extend the life of the vessels and equipment are
capitalized. Interest incurred on debt related to newbuild vessels is 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. Included in vessels and equipment at December 31, 2004 and 2003 are
vessels under capital leases of approximately $48.1 million and
$55.4 million, net of accumulated
amortization of approximately $5.7 million and $6.4 million, respectively. Listed below are the estimated useful lives of vessels and equipment at December 31, 2004: Useful Lives(in years)Supply boats
    
    6-25Crewboats
    
    6-25Anchor handling tug/supply vessels
    
    5-25Other
    
    6-25Tankers (1)
    
    7-30Tugboats
    
    7-40Furniture and equipment
    
    5-10
   (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 inspections to
maintain their operating classification, as mandated by maritime regulations. Costs incurred to
drydock the vessels are deferred and amortized over the period to the next drydocking, generally 24
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, 2004 and
2003, deferred costs included unamortized drydocking costs of approximately $32.4 million and $35.2
million, respectively, and net deferred financing costs of $12.7 million and $13.2 million,
respectively. Accrued Liabilities and Other.Accrued liabilities included in current liabilities at
December 31 consist of the following (in thousands): F-11




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2004
    
    
    2003Voyage operating expenses
    
    $
    8,135
    
    
    $
    7,756Foreign taxes
    
    
    9,661
    
    
    
    8,541Payroll and benefits
    
    
    7,796
    
    
    
    6,803Deferred voyage revenue
    
    
    1,499
    
    
    
    1,990Professional services
    
    
    374
    
    
    
    552Litigation, claims and settlements
    
    
    263
    
    
    
    608Insurance
    
    
    4,012
    
    
    
    6,101Other
    
    
    3,581
    
    
    
    5,012Total
    
    $
    35,321
    
    
    $
    37,363
 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 (APB)
Opinion No. 25, Accounting for Stock Issued to Employees(APB 25) and related interpretations in
accounting for its employee stock-based transactions. Under APB 25, compensation expense is
calculated at the time of option grant based upon the difference between the exercise price of the
option and the fair market value of the Companys common stock at the date of grant recognized
over the vesting period. Had compensation expense for stock option grants been determined based on the fair value at
the grant date for awards consistent with the methods of SFAS 123, the Companys net income (loss)
would have decreased/(increased) to the pro forma amounts presented below for 2004, 2003 and 2002: Year Ended December 31,2004
    
    
    2003
    
    
    2002Net income (loss):As reported
    
    $
    25,934
    
    
    $
    (4,965
    )
    
    $
    (38,870
    )Compensation expense
    
    
    (1,437
    )
    
    
    (1,106
    )
    
    
    (1,147
    )Pro forma
    
    $
    24,497
    
    
    $
    (6,071
    )
    
    $
    (40,017
    )Net income (loss) per common share:As reported  basic
    
    $
    1.11
    
    
    $
    (0.21
    )
    
    $
    (2.72
    )As reported  diluted
    
    $
    1.09
    
    
    $
    (0.21
    )
    
    $
    (2.72
    )Pro forma  basic
    
    $
    1.05
    
    
    $
    (0.26
    )
    
    $
    (2.80
    )Pro forma  diluted
    
    $
    1.03
    
    
    $
    (0.26
    )
    
    $
    (2.80
    )
 Income Taxes.The Company files a consolidated tax return with substantially all corporate
subsidiaries. In addition, subsidiaries doing business in foreign countries file separate income
tax returns in foreign jurisdictions, where applicable. Each subsidiary organized as a 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. F-12




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Income Tax Contingencies. Our future effective tax rate is based on estimates of expected
income, statutory tax rates and tax planning strategies. Significant judgment is required in
determining our effective tax rate and the ultimate resolution of our tax return positions.
Despite our belief that our tax return positions are correct, our policy is to establish accruals
for tax contingencies that may arise in future years as a result of examination by tax authorities.
Our tax accruals are analyzed periodically and adjustments are made as events occur to warrant
such adjustment. Net Income (Loss) Per Share. Net income (loss) per common share is computed in accordance
with SFAS No. 128, Earnings Per Share(SFAS 128), which requires the reporting of both net income
(loss) per common share and diluted net income (loss) per common share. The calculation of net
income (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 income
(loss) per common share includes the dilutive effect of all applicable stock options and warrants. Foreign Currency Translation. In accordance with SFAS No. 52, Foreign Currency Translation
(SFAS 52), 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. Substantially all of 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. For 2002 translation adjustments were
deferred in accumulated other comprehensive loss, which is a separate component of stockholders
equity. Transaction gains and losses resulting from changes in exchange rates for 2004, 2003 and
2002 were insignificant and are included in other, net in the accompanying consolidated statements
of operations. 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 may differ
from those estimates. Comprehensive Income (Loss).SFAS No. 130, Reporting Comprehensive Income(SFAS 130),
establishes standards for the reporting and display of comprehensive income (loss), which is
defined as the change in equity arising from non-owner sources. Comprehensive income (loss) is
reflected in the consolidated statement of changes in stockholders equity. In addition to net
income (loss), total comprehensive income (loss) includes a gain on a foreign currency forward
contract of approximately $55,000 in 2004 (see Note 6) and a foreign currency translation
adjustment of approximately $1,000 in 2002. Reclassifications.Certain previously reported amounts have been reclassified to conform to
the 2004 presentation. Derivative Instruments.The Company follows the provisions of SFAS No. 133, Accounting for
Derivative Instruments and Hedging Activities, (SFAS 133) which establishes accounting and
reporting standards for derivative instruments and hedging activities. The statement requires that
derivative instruments be measured at fair value and recognized as either assets or liabilities on
the balance sheet (see Note 14). F-13




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##### Table of Contents



Fair Value of Financial Instruments. The estimated fair values of financial instruments
recognized in the accompanying consolidated balance sheets or disclosed within these notes to the
consolidated financial statements have been determined using available market information,
information from unrelated third party financial institutions and appropriate valuation
methodologies, primarily discounted projected cash flows. However, considerable judgment is
required when interpreting market information and other data to develop estimates of fair value.
Accordingly, the estimates presented are not necessarily indicative of the amounts that could be
realized in a current market exchange. Recent Pronouncements.In December 2004, the Financial Accounting Standards Board (FASB)
issued SFAS No. 123R, a revised Share-Based Payment(SFAS 123R), a revision effective for the
Companys third quarter of fiscal 2005. SFAS 123R requires companies to expense in their
consolidated statement of operations the estimated fair value of employee stock options and similar
awards. The Company currently uses the intrinsic value method to value stock options, and
accordingly, no compensation expense has been recognized for stock options since the Company grants
stock options with exercise prices equal to or greater than the Companys common stock market price
on the date of the grant. The Company will adopt the provisions of SFAS 123R using a modified
prospective application. Under the modified prospective application, Statement 123R will apply to
new awards and to awards that are outstanding on the effective date and are subsequently modified
or cancelled. Compensation expense for unvested stock-based awards will be recognized over the
remaining vesting period. Depending on the model used to calculate stock-based compensation
expense in the future, the implementation of certain other requirements of SFAS 123R and additional
option grants expected to be made in the future, the pro forma disclosure discussed previously may
not be indicative of the stock-based compensation expense that will be recognized in the Companys
future consolidated financial statements. The Company is in the process of determining the impact
adopting SFAS 123R will have on its consolidated financial position and consolidated results of
operations. In December 2004, the FASB issued SFAS No. 153, Exchanges of Nonmonetary Assets(SFAS 153),
an amendment of APB Opinion No. 29, Accounting for NonMonetary Transactions(APB 29). APB 29 is
based on the principle that exchanges of nonmonetary assets should be measured based on the fair
value of assets exchanged, however certain exceptions apply. SFAS 153 amends APB 29 to eliminate
the exception for nonmonetary exchanges of similar productive assets that do not have commercial
substance. A nonmonetary exchange has commercial substance if the future cash flows of the entity
are expected to change significantly as a result of the exchange. SFAS 153 is effective for
nonmonetary exchanges occurring in fiscal periods beginning after June 15, 2005. The Companys
adoption of SFAS 153 is not expected to have a material impact on the Companys consolidated
financial position and consolidated results of operations. In June 2001, the Accounting Standards Executive Committee (AcSEC) of the American Institute
of Certified Public Accountants (AICPA) 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 be prohibited from deferring cost of a planned maintenance activity. Currently, the
costs incurred to drydock the Companys vessels are deferred and amortized on a straight-line basis
over the period of the next drydocking, generally 24 to 36 months. At its April 14, 2004 meeting,
the FASB voted not to clear the AcSECs proposed SOP. In February 2005, the FASB asked its staff
to further research the issue, specifically with regard to how the projects scope could be
limited. F-14




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##### Table of Contents



3. Long-Term Debt Long-term debt at December 31 consists of the following (in thousands): 2004
    
    
    2003Senior notes, including related interest rate swap
    
    $
    152,906
    
    
    $
    151,472Amended credit facility
    
    
    48,517
    
    
    
    30,000Title XI debt
    
    
    208,969
    
    
    
    216,117Notes payable
    
    
    85,132
    
    
    
    23,137495,524
    
    
    
    420,726Less: current maturities
    
    
    (16,653
    )
    
    
    (11,037
    )Long-term debt, including senior notes
    
    $
    478,871
    
    
    $
    409,689
 On August 5, 2003, the Company completed the offering of $150.0 million of Senior Notes
(the 2003 Senior Notes) due 2013 through a private placement to institutional investors eligible
for resale under Rule 144A and Regulation S. The net proceeds of the offering were used to repay a
portion of the Companys indebtedness under a prior $180.0 million credit facility. Interest on
the 2003 Senior Notes is payable semi-annually in arrears. The 2003 Senior Notes are senior
unsecured obligations guaranteed by certain of the Companys U.S. subsidiaries. The 2003 Senior
Notes are subject to certain covenants, including, among other things, limiting the Parents and
certain U.S. subsidiaries ability to incur additional indebtedness or issue preferred stock, pay
dividends to stockholders, and make investments or sell assets under certain conditions. On
October 31, 2003, the Company filed a registration statement with the SEC to register substantially
identical senior notes to be exchanged for the 2003 Senior Notes pursuant to a registration rights
agreement, so that the 2003 Senior Notes may be eligible for trading in the public markets. On
November 13, 2003, the registration statement was declared effective and the Company completed the
exchange offer on December 16, 2003. In October 2003, the Company entered into an interest rate
swap agreement related to the 2003 Senior Notes (see Note 14). As of December 31, 2004 and 2003,
the market value of the interest rate swap was approximately $2.9 million and $1.5 million,
respectively, and is included in other assets in the accompanying consolidated balance sheets. In connection with the 2003 Senior Notes offering, the Company amended and restated its $180.0
million credit facility. The amended credit facility consists of a revolving credit facility with
an original amount available of $80.0 million and has a five-year maturity (the Amended Credit
Faciltiy). The Amended Credit Facility is subject to semi-annual reductions commencing February
5, 2004. The principal reductions on the Amended Credit Facility are as follows: $4.0 million each
February and August from 2004 through 2007, and $48.0 million in 2008. As of December 31, 2004 and
2003 the outstanding borrowings on the Amended Credit Facility were $70.9 million and $33.9 million,
respectively, including outstanding letters of credit of $22.4 million and $3.9 million,
respectively. Available borrowings under the Amended Credit Facility
were approximately $1.1
million as of December 31, 2004. Interest on the Amended Credit Facility is payable monthly, with
a variable interest rate. The rate is either LIBOR or a base rate plus a margin based upon certain
financial ratios of the Company (6.21% at December 31, 2004). It is secured by first liens on
certain of the Companys vessels (excluding vessels financed with Title XI financing and some of
its other vessels), second liens on two vessels, and stock of certain subsidiaries and is
guaranteed by certain subsidiaries (see Note 17). The Amended Credit Facility is subject to
various financial covenants, including minimum ratios of adjusted EBITDA to adjusted interest
expense and a minimum ratio of adjusted funded debt to adjusted EBITDA, minimum adjusted tangible
net worth, and minimum fair market value of the Companys vessels. F-15




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##### Table of Contents



Early Extinguishment of Debt In connection with amending and restating its prior $180.0 million credit facility in 2003,
the Company wrote off approximately 45% of the unamortized financing costs of the prior credit
facility. The total amount written off was approximately $1.1 million. In connection with the
2003 Senior Notes offering, the Company paid $11.2 million to retire the debt of certain towing
vessels financed with Title XI financing. As a result of this early retirement, the Company wrote
off $400,000 of unamortized financing costs and paid an early retirement premium of $226,000. The
Company recorded a gain on extinguishment of debt of $125,000 related to the refinancing of two
offshore vessels in December 2003. Title XI Financing Bonds 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 $206.0 million and $211.0 million at December 31,
2004 and 2003, respectively. Principal payments during 2004, 2003 and 2002 were $5.0 million, $4.7
million and $4.4 million, respectively, and interest payments
were $14.5 million, $14.8 million and
$15.1 million, respectively. Covenants under the Title XI Bond agreements contain financial tests which, if not met by the
five double-hull tanker companies, 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 five
double-hull tanker companies from making certain investments or acquiring additional fixed assets.
The five double-hull vessels have a net book value of $208.7 million as of December 31, 2004. In
the event of default, all of the vessels, in addition to the assignment of earnings on one vessel,
serve as collateral on the United States Government guarantee of the Title XI Bonds. The five double-hull vessel companies are 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 financial 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 double-hull
companies 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 were made in the amount of
$3.8 million, and in the first quarter
of 2004, the second deposits to the reserve fund were made in the amount of $4.7 million. These
deposits are included in other assets in the accompanying balance sheets. According to the Title
XI financial agreement, the Company is restricted from distributing excess cash from the five
double-hull tankers until certain working capital levels have been reached and maintained.
Accordingly, at December 31, 2004 and 2003, the Company had approximately $32.9 million and $27.0
million in restricted cash, which is 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. In 2004,
the five double-hull tankers distributed approximately $3.9 million to the Company for general
working capital purposes. The Company expects to receive $10.0 million during the first quarter of
2005 from the double-hull tankers for working capital purposes. As of December 31, 2004 and 2003, other Title XI debt of approximately $3.0 million and $5.1
million, respectively, was collateralized by first preferred mortgages on two non-double-hull
product tankers and bears interest at rates ranging from 5.9% to 10.1%. The debt is due in
semi-annual principal and interest payments through December 2006. Under the terms of this 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 2004, 2003 and 2002, $2.2 million, $13.7
million and $2.8 million, F-16




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##### Table of Contents



respectively, in principal and $0.4 million, $1.4 million and $1.7 million, respectively, in
interest were paid on this debt. The debt on one of the vessels will be completely paid off in
March 2005. Notes Payable The Company has one promissory note relating to the purchase of equity interests in the
double-hull product tankers. The note bears interest at 8.5%. Quarterly principal and interest
payments are due through January 2006. The promissory note is collateralized by securities of
certain subsidiaries. The outstanding balance of the promissory note was $2.6 million and $4.7
million as of December 31, 2004 and 2003, respectively. In March 2004, the Company obtained two notes payable in the amount of $24.8 million each, the
proceeds of which were used to purchase two four-year old, foreign-flagged, double-hulled product
tankers. Each note payable is divided into two tranches. Tranche A, in the principal amount of
$21.7 million, bears interest at LIBOR, which is reset monthly, plus 1.75% (4.0% at December 31,
2004) and requires quarterly principal and interest payments through March 2011. Tranche B, in the
principal amount of $3.1 million, bears interest at LIBOR, which is reset monthly, plus 4.0% (6.2%
at December 31, 2004) and requires quarterly principal and interest payments through March 2007.
The notes payable are collateralized by first mortgages on the tankers. The notes payable contain
certain restrictive financial covenants that, among other things, require minimum levels of EBITDA
and tangible net worth, as defined in the notes payable agreements. As of December 31, 2004, the
Company was in compliance with such covenants. The outstanding balance of the notes payable was
approximately $45.5 million as of December 31, 2004. During 2004, approximately $4.1 million in
principal and approximately $1.3 million in interest were paid on the notes payable. In July 2004, the Company entered into a loan agreement for the Singapore dollar equivalent of
$10.8 million with an unrelated financial services company to finance the construction of the
Seabulk Angola(see Note 6). During the construction of the vessel the Company is required to make
monthly interest payments based on the one month LIBOR rate plus 4.0% (6.6% as of December 31,
2004). At the time of vessel completion and acceptance, the construction loan will convert to a
permanent loan whereby the Company will be required to make monthly interest and principal payments
in 120 installments. The permanent loan bears interest at the one month LIBOR rate plus 3.68%. As
of December 31, 2004, the outstanding balance under the loan agreement was approximately $4.3
million. In October 2004, the Company entered into a loan agreement for $14.3 million with an
unrelated financial services company to finance the construction of the Seabulk Luanda(see Note
6). During the construction of the vessel the Company is required to make monthly interest
payments based on the one month LIBOR rate plus 4.0% (6.6% as of December 31, 2004). At the time
of vessel completion and acceptance, the construction loan will convert to a permanent loan whereby
the Company will be required to make monthly interest and principal payments in 120 installments.
The permanent loan bears interest at the one month LIBOR rate plus 3.68%. As of December 31, 2004,
the outstanding balance under the loan agreement was approximately $3.0 million. In July 2004, the Company entered into a loan agreement with Banco Nacional de Desenvolvimento
Economico e Social (BNDES) of Brazil, a government-owned company, to finance the construction of
the Seabulk Brasiland Seabulk Angra(see Note 6). The loan in the principal amount of $29.9
million is divided into two Subcredits, A and
B, in the amounts of $15.0 million and $14.9 million,
respectively. Progress payments for Subcredits A and B are demandable at various dates monthly for
sixteen year terms with final installments due May 2021 and August 2021, respectively. The loan
bears interest at the rate of 4.0% per annum and as of December 31, 2004 the outstanding balance under the
loan agreement was $13.0 million. F-17




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##### Table of Contents



The Company has various promissory notes relating to the previous acquisition and construction
of various vessels. The promissory notes are collateralized by mortgages on certain vessels and
bear interest at rates ranging from 4.0% to 8.1%. The debt is due in monthly installments of
principal and interest through December 2018. The outstanding balance of the notes was $16.7
million and $18.4 million as of December 31, 2004 and 2003, respectively. The Company has letters of credit outstanding in the amount of approximately $22.4 million and
$3.9 million as of December 31, 2004 and 2003, respectively, which expire on various dates through
December 2025. The aggregate annual future principal payments due on the long-term debt are as follows (in
thousands): Years ending December 31:2005
    
    $
    16,6532006
    
    
    15,5782007
    
    
    12,6672008
    
    
    68,2042009
    
    
    11,531Thereafter
    
    
    370,891$
    495,524
 F-18




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##### Table of Contents



4. Capital Leases The Company operates certain vessels and other equipment under leases that are classified as
capital leases. The future minimum lease payments under capital leases, including obligations
under sale-leaseback transactions, together with the present value of the net minimum lease
payments are as follows (in thousands): Years ending December 31:2005
    
    $
    5,9482006
    
    
    4,9912007
    
    
    4,9912008
    
    
    6,2962009
    
    
    6,063Thereafter
    
    
    18,966Total minimum lease payments
    
    
    47,255Less: amount representing interest
    
    
    (14,979
    )Present value of minimum lease payments (including
current portion of
$3,708)
    
    $
    32,276
 F-19




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##### Table of Contents



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. Certain leases include escalation clauses for
adjusting rentals to reflect changes in price indicies. Rent expense
was approximately $9.0 million, $6.3 million and $4.5 million for the years ended December 31, 2004, 2003 and 2002,
respectively. The aggregate annual future payments due under non-cancelable operating leases with
remaining terms in excess of one year are as follows (in thousands): Years ending December 31:2005
    
    $
    9,1032006
    
    
    8,8662007
    
    
    7,5212008
    
    
    4,8502009
    
    
    1,365Thereafter
    
    
    745$
    32,450
 Sublease The Company subleases certain office space in Tampa, Florida. The sublease in Tampa is
expected to terminate in December 2006. There are no renewal or escalation clauses relating to the
sublease. The future minimum receipts under the sublease are as follows (in thousands): Years ending December 31:2005
    
    $
    982006
    
    
    98$
    196
 F-20




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##### Table of Contents



Contingencies Under United States law, United States persons are prohibited from business activities and
contracts in certain countries, including Sudan and Iran. Relating to the prohibitions, the
Company has filed three reports with and submitted documents to the Office of Foreign Asset Control
(OFAC) of the U.S. Department of Treasury. One of the reports was also filed with the Bureau of
Export Administration of the U.S. Department of Commerce. The reports and documents related to
certain limited charters with third parties involving three of the Companys vessels which called
in 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 had been referred to its Civil Penalties Division. Should
OFAC determine that these activities constituted violations of 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 the Companys consolidated balance sheets or consolidated results of operations. The Company was sued by Maritime Transport Development Corporation (MTDC) in January 2002 in
Florida state court in Broward County alleging broker commissions due since 1998 from charters on
three of its vessels, the Seabulk Magnachem, Seabulk Challengeand Seabulk Pride,under an alleged
broker commission agreement. MTDC was controlled by the founders of our predecessor company. The
claim allegedly continues to accrue. The amount alleged to be due is over $800,000, but is subject
to offset claims and defenses by the Company. The Company is vigorously defending such charges,
but the Company cannot predict the ultimate outcome. As of February 20, 2004, the Company switched its mutual protection and indemnity (P&I)
marine insurance policies from Steamship Mutual (Steamship) to West of England Association (West
of England). Under the Companys P&I policies, the Company could be liable for additional
premiums to cover any investment losses and reserve shortfalls experienced by its marine insurance
clubs; however, additional premiums can only be assessed for open policy years. Steamship and West
of England close a policy year three years after the policy year has ended. Completed policy years
2002 and 2003 are still open for Steamship, and policy year 2004 is open for West of England.
There have been no additional premiums assessed for these policy
years, and the Company believes it
is unlikely that additional premiums for those policy years will be assesed. The Company will
record a liability for any such additional premiums if and when they are assessed and the amount
can be reasonably estimated. In order to cover potential future additional insurance calls made by Steamship for 2002 and
2003, the Company was required to post a letter of credit in the amount of $1.9 million to support
such potential additional calls as a condition to its departure from Steamship. The letter of
credit will be returned if no additional insurance calls are made. Potential claims liabilities
are recorded as insurance expense reserves when they become probable and can be reasonably
estimated. P&I insurance premiums were approximately $7.5 million, $9.3 million and $7.0 million for the
years ended December 31, 2004, 2003 and 2002, respectively. The Companys hull and machinery
insurance renewed in October 2004. The Company maintains high levels of self-insurance for P&I and
hull and machinery risks through the use of substantial deductibles and self-insured retentions. 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 substantial
deductibles and, for 2002 and
2003, substantial self-insured retentions. F-21




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##### Table of Contents



At December 31, 2004 and 2003, approximately 20% and 19%, respectively, 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. In March 2004, the Company received $400,000 from the settlement of litigation over a previous
joint venture partner and $4.5 million from the settlement of litigation against two of its
suppliers. The settlement against its suppliers represents reimbursement for certain direct
expenses and economic losses that adversely affected operating results. The $4.5 million in
proceeds is recorded in other, net in the accompanying consolidated statement of operations.  6.
    Vessels and Equipment Vessels and equipment are summarized below (in thousands): December 31,2004
    
    
    2003Vessels and improvements
    
    $
    800,986
    
    
    $
    697,358Furniture and
equipment
    
    
    10,065
    
    
    
    9,848811,051
    
    
    
    707,206Less: accumulated depreciation and
amortization
    
    
    (212,258
    )
    
    
    (180,180
    )Vessels and equipment,
net
    
    $
    598,793
    
    
    $
    527,026
 During
2004, the Company sold 11 offshore energy support vessels, including one which had been
held-for-sale, for an aggregate total of $6.4 million and a gain of approximately $4.1 million. The
Company sold 18 offshore energy support vessels and three tugs during 2003 for an aggregate total of
$9.0 million and a gain of approximately $1.5 million. During 2002, the Company sold 17 vessels
for a total of $6.8 million and a gain of approximately $55,000. During 2004, the Company incurred interest cost of $34.9 million, of which approximately $1.0
million was capitalized. During 2003, the Company incurred interest cost of $33.9 million, of
which approximately $90,000 was capitalized. Vessel Acquisitions In January 2004, the Company entered into a contract with Labroy Shipbuilding and Engineering
Pte. Ltd. of Singapore for the construction of a terminal support tug to be named Seabulk Angola
for delivery in March 2005 for the Singapore dollar equivalent of U.S. $10.8 million. The Company
also entered into a forward exchange contract intended to fully hedge its foreign currency
commitment (see Note 2). Under the forward contract, the Company will purchase Singapore dollars
at various rates from February 2004 through March 2005 in conjunction with the progress payment
dates as required by the construction agreement. In July 2004, the Company entered into a loan
agreement to finance the construction of the vessel (see Note 3). The vessel will be employed on a
long-term contract in Angola. In March 2004, the Company completed the purchase of two four-year-old, foreign-flag,
double-hull product tankers from World-Wide Shipping of Singapore for a total purchase price of
approximately $62.0 million. The purchase price was funded by a combination of bank borrowings and available cash F-22




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##### Table of Contents



(see Note 3). The tankers are modern double-hull vessels suitable for worldwide
trading. The Company took delivery of the two vessels in March and April 2004. Both vessels have been placed in an
international product tanker pool. In May 2004, the Company entered into a contract with Labroy Shipbuilding and Engineering Pte.
Ltd. for the construction of an anchor handling tug supply vessel to be named Seabulk Luandafor
delivery in mid-2005. In October 2004, the Company entered into a loan agreement to finance the
construction of the anchor handling tug supply vessel (see Note 3). The vessel will be employed on
a long-term contract in Angola. In May 2004, the Company entered into a contract with Jaya Shipbuilding and Engineering Pte.
Ltd. of Singapore for the construction of a multi-purpose offshore
supply vessel with a four-point
mooring system. The vessel, named Seabulk Advantage,was delivered in December  2004. The vessel
cost was $8.6 million. The purchase price was paid with available cash. In July 2004, the Company entered into a loan agreement with Banco Nacional de Desenvolvimento
Economico e Social (BNDES) of Brazil, a government-owned company, to finance the construction of
two offshore supply vessels (see Note 3). The vessels were constructed by Estaleiro Promar I
Reparos Navais Ltda (Promar) and are on charter with Petrobas in Brazil. The Company took
delivery of the Seabulk Brasilin October 2004 and the Seabulk Angrain January 2005. In October 2004, the Company entered into a contract with Labroy Shipbuilding and Engineering
Pte. Ltd. of Singapore for the construction of four anchor handling tug supply vessels with an
option for four additional vessels. The four vessels are to be built at a combined cost of
approximately $43.7 million with delivery scheduled in 2006. The vessels are expected to work
under long-term contracts in West Africa and Southeast Asia. In October 2004, the Company entered into a contract with Centurion Marine Offshore, L.L.C. to
exchange four of the Companys offshore vessels for one offshore energy support vessel. The
transaction is a like-kind exchange of assets of equal value and is a tax-free transaction to the
Company. The Company delivered the four vessels, at a combined market value of approximately $4.4
million and simultaneously took delivery of the Seabulk Carmenin January 2005. In December 2004, the Company purchased the minority interest in a partnership that owns the
Seabulk America,a chemical product carrier. The Company owned a 67% equity interest and purchased
the 33% interest owned by Stolt Tankers (U.S.A.), Inc. for $2.4 million. The minority interest
acquisition was accounted for under the purchase method of accounting
and, accordingly, the excess
of the purchase price over the minority interest acquired of $1.5 million was allocated to vessels
and equipment.  7.
    Joint Venture Agreements In March 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
has a 40% interest in Modant Seabulk Nigeria Limited. The Company also sold five of its crewboats
operating in Nigeria to joint venture vessel-owning companies related to CTC International in April
2003 for $2 million. The Company invested $400,000 of the sale proceeds and acquired a 20%
interest in these joint venture vessel-owning companies. In July 2003, the five crewboats were
reflagged into the Nigerian registry. The Company has not guaranteed any debt of the joint
venture, nor is the Company required to provide additional funding. As of December 31, 2004 and
2003, the Companys investment in the joint venture was $0.5 million and is included in other
assets in the accompanying consolidated balance sheets. F-23




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##### Table of Contents



In September 2003, the Company entered into a joint venture agreement called Angobulk Sarl
with Angola Drilling Company. The agreement has since been terminated by the parties.  8.
    Stock Option and Equity Ownership 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 1999 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. In
February 2003, the Compensation Committee increased the number of shares eligible for grants to
2,300,000 shares. The Committees action was approved by the shareholders at the Companys Annual
Meeting of Shareholders held on May 16, 2003. 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 147,000 and 530,000
options granted under the Plan in 2004 and 2003, respectively, and no options were granted in 2002.
In addition, there were 31,400 and 115,000 shares of restricted stock granted in 2004 and 2003,
respectively. The Company amortizes the value of the restricted stock over the three-year vesting
period. The Company recognized stock compensation expense of approximately $255,000, $238,000 and
$99,000 in 2004, 2003 and 2002, respectively, related to restricted stock. On June 15, 2000, the Company also adopted the Stock Option Plan for Directors (the Directors
Plan). Pursuant to the Directors Plan, as of December 31, 2004, an aggregate of 360,000 shares of
common stock are authorized and reserved for issuance, subject to adjustments to reflect stock
dividends, reorganizations, and other changes in the capital structure of the Company. Under the
Stock Option Plan for Directors, each director not employed by the Company is granted annual stock
options exercisable for 4,000 shares. The Chairman of the Board of Directors, if not an employee
of the Company, is entitled to receive annual stock options for 8,000 shares. In 2002 each of the
continuing outside directors was granted options to purchase 4,000 shares, and each of the four
previous directors who resigned upon the Companys equity transaction in September 2002 were also
granted options to purchase 4,000 shares, with the exception of the former chairman, who was
granted 8,000 shares. In his initial year, a director is granted options to purchase 10,000
shares. The six new directors were eligible for initial grants of options to purchase 10,000
shares on the Annual Meeting date in 2004 and the continuing directors, with the exception of Mr.
Kurz, were eligible for grants of options to purchase 4,000 shares. Under the Directors Plan, the
option price for each option granted is required to be 100% of the fair market value of common
stock on the day of grant. Options granted under the Directors Plan totaled 36,000, 72,000 and
32,000 during 2004, 2003 and 2002, respectively. F-24




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##### Table of Contents



The following table of data is presented in connection with the stock option plans: Year Ended December 31,2004
    
    
    2003
    
    
    2002Weighted
    
    
    
    
    
    
    Weighted
    
    
    
    
    
    
    Weightedaverage
    
    
    
    
    
    
    average
    
    
    
    
    
    
    averageNumber of
    
    
    exercise
    
    
    Number of
    
    
    exercise
    
    
    Number of
    
    
    exerciseoptions
    
    
    price
    
    
    options
    
    
    price
    
    
    options
    
    
    priceOptions outstanding at beginning of period
    
    
    1,203,000
    
    
    $
    7.35
    
    
    
    774,502
    
    
    $
    6.84
    
    
    
    822,000
    
    
    $
    6.91Granted
    
    
    183,000
    
    
    
    9.78
    
    
    
    602,000
    
    
    
    7.85
    
    
    
    32,000
    
    
    
    6.19Exercised
    
    
    (66,170
    )
    
    
    5.98
    
    
    
    (57,169
    )
    
    
    5.37
    
    
    
    (6,667
    )
    
    
    6.31Cancelled
    
    
    (40,332
    )
    
    
    9.10
    
    
    
    (116,333
    )
    
    
    7.49
    
    
    
    (72,831
    )
    
    
    7.48Options outstanding at end of period
    
    
    1,279,498
    
    
    
    7.71
    
    
    
    1,203,000
    
    
    
    7.35
    
    
    
    774,502
    
    
    
    6.84Options exercisable at end of period
    
    
    733,086
    
    
    
    7.16
    
    
    
    571,513
    
    
    
    7.00
    
    
    
    562,856
    
    
    
    7.30Options available for future grants at end of
period
    
    
    1,029,096
    
    
    
    
    
    
    
    1,203,164
    
    
    
    
    
    
    
    618,831
    
    
    
    
 Summarized information about stock options outstanding as of December 31, 2004 is as
follows: Weighted
    
    
    
    
    
    
    WeightedNumber of
    
    
    Remaining
    
    
    Average
    
    
    Number of
    
    
    AverageOptions
    
    
    Life
    
    
    Exercise
    
    
    Options
    
    
    ExerciseExercise Price Range
    
    
    Outstanding
    
    
    (In Years)
    
    
    Price
    
    
    Exercisable
    
    
    PriceUnder $6.25
    
    
    
    97,832
    
    
    
    7.03
    
    
    $
    4.50
    
    
    
    97,832
    
    
    $
    4.50$6.25 to $7.29
    
    
    
    446,333
    
    
    
    6.42
    
    
    
    6.60
    
    
    
    341,671
    
    
    
    6.40$7.30 to $8.00
    
    
    
    422,333
    
    
    
    7.81
    
    
    
    7.92
    
    
    
    163,583
    
    
    
    7.80$8.01 to $10.00
    
    
    
    255,000
    
    
    
    8.98
    
    
    
    9.45
    
    
    
    72,000
    
    
    
    8.61Over $10.00
    
    
    
    58,000
    
    
    
    1.96
    
    
    
    12.47
    
    
    
    58,000
    
    
    
    12.47
 The weighted average fair value of options granted under the Companys stock option plans
during 2004, 2003 and 2002 was $7.85, $5.58, and $4.91 respectively. F-25




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##### Table of Contents



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 2004, 2003 and 2002: 2004
    
    
    2003
    
    
    2002Dividend yield
    
    
    0.0
    %
    
    
    0.0
    %
    
    
    0.0
    %Expected volatility factor
    
    
    0.73
    
    
    
    0.58
    
    
    
    0.72Approximate risk-free interest rate
    
    
    4.32
    %
    
    
    4.27
    %
    
    
    4.25
    %Expected life (in years)
    
    
    10
    
    
    
    10
    
    
    
    10
 The Black-Scholes option 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. Effective October 14, 2004, the Company amended the stock option agreements for all of the
vested and unvested awards, whereby the option exercise period was extended from 12 months to 36
months in the event of termination within two years of a change in control, as defined in the plan.
In accordance with FASB Interpretation No. 44 Accounting for Certain Transactions involving Stock
Compensation, the amendment to the agreements is considered a modification of the award and
accordingly the intrinsic value of the option award shall be measured at the date of the
modification and any intrinsic value in excess of the amount measured at the original measurement
date shall be recognized as compensation cost if the separation event occurs. As of December 31,
2004 the intrinsic value in excess of the amount measured at the original measurement date was $4.1
million and, if a separation event occurred within two years of a change in control, would be
recognized as compensation expense in the accompanying consolidated statement of operations.  9.
    Employee Benefit 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 contributes to various union-sponsored, collectively bargained pension plans for certain
crew members in the tankers 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 $4.0 million, $3.7 million and $3.5 million for the years ended December 31, 2004,
2003 and 2002, respectively. In February 2003, the Company established an Executive Deferred Compensation Plan for highly
compensated employees. Under the Plan, such employees may elect to defer up to 50% of their salary
and 100% of bonuses and grants of restricted Company stock for periods of at least five years or
until retirement. Income tax on deferred amounts is payable when distributed to the employee after
such deferral periods. The Company is permitted to make contributions to the Plan. Salary, bonus
and restricted stock deferred under the Plan are funded by the Company into a trust for the benefit
of the eligible employees, which together with an outside consultant/administrator, administers the
Plan. F-26




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##### Table of Contents



10. Income Taxes The United States and foreign components of income (loss) before provision for income taxes
are as follows (in thousands): Year Ended December 31,2004
    
    
    2003
    
    
    2002United States
    
    $
    12,497
    
    
    $
    (3,959
    )
    
    $
    (35,578
    )Foreign
    
    
    18,471
    
    
    
    3,232
    
    
    
    1,350Total
    
    $
    30,968
    
    
    $
    (727
    )
    
    $
    (34,228
    )
 Foreign income taxes are levied on gross receipts. The
components of the provision for income tax expense (benefit) are as follows (in thousands): Year Ended December 31,2004
    
    
    2003
    
    
    2002Current:Federal
    
    $
    
    
    
    $
    
    
    
    $
    (1,520
    )Foreign
    
    
    5,034
    
    
    
    4,238
    
    
    
    6,162Total current
    
    
    5,034
    
    
    
    4,238
    
    
    
    4,642Deferred
    
    
    
    
    
    
    
    
    
    
    Total income tax expense
    
    $
    5,034
    
    
    $
    4,238
    
    
    $
    4,642
 A reconciliation of U.S. Federal income tax attributable to continuing operations
computed at the U.S. federal statutory tax rates to income tax expense (benefit) is: Year Ended December 31,2004
    
    
    2003
    
    
    2002Income tax expense (benefit) computed at theFederal statutory rate
    
    
    35
    %
    
    
    (35
    )%
    
    
    (35
    )%State income taxes, net of federal benefit
    
    
    1
    
    
    
    (1
    )
    
    
    (1
    )Change in valuation allowance
    
    
    (37
    )
    
    
    35
    
    
    
    31Permanent, non deductible items
    
    
    1
    
    
    
    1
    
    
    
    10
    %
    
    
    0
    %
    
    
    (4
    )%
 F-27




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##### Table of Contents



The tax effect of temporary differences that give rise to deferred tax assets and
liabilities are as follows (in thousands): As of December 31,2004
    
    
    2003Deferred income tax assets:Allowance for doubtful accounts
    
    $
    2,019
    
    
    $
    919Goodwill
    
    
    11,853
    
    
    
    13,321Accrued compensation
    
    
    929
    
    
    
    698Foreign tax credit carryforwards
    
    
    28,987
    
    
    
    21,967Accrued supplemental insurance premiums
    
    
    71
    
    
    
    71Net operating loss carryforwards
    
    
    145,350
    
    
    
    147,300Other
    
    
    543
    
    
    
    1,662Total deferred income tax assets
    
    
    189,752
    
    
    
    185,938Less: valuation allowance
    
    
    (62,374
    )
    
    
    (78,311
    )Net deferred income tax assets
    
    
    127,378
    
    
    
    107,627Deferred income tax liabilities:Property differences
    
    
    114,280
    
    
    
    94,060Deferred drydocking costs
    
    
    11,574
    
    
    
    12,364Other
    
    
    1,524
    
    
    
    1,203Total deferred income tax liabilities
    
    
    127,378
    
    
    
    107,627Net deferred income tax assets
    
    $
    
    
    
    $
    
 SFAS No. 109, Accounting for Income Taxes(SFAS 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 $62.4 million and $78.3 million was necessary at December 31,
2004, and 2003, 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 were zero at December 31, 2004 and 2003. The net change in the total
valuation allowance was a decrease of approximately $15.9 million in 2004 and an increase of
approximately $3.1 million and $9.9 million in 2003 and 2002, respectively. In 2002, the Job Creation and Worker Assistance Act of 2002 was signed into law, which allowed
a 2001 federal net operating loss to be carried back five years instead of two years. This new law
allowed the Company to carry back its 2001 federal net operating loss into the five-year carryback
period. The Company received a refund of approximately $2.0 million related to the net operating
loss carryback in 2004. The Company has a basis for tax purposes in excess of its basis for financial reporting
purposes that will generate additional income tax deductions in future periods. As of December 31,
2004, the Company had net operating loss carryforwards of approximately $406.6 million, which are
available to offset future federal taxable income through the year 2023. The Company also has
foreign tax credit carryforwards, due to expire in years 2005 through 2008, of approximately $29.0
million, which are available to reduce future federal income tax liability. F-28




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##### Table of Contents



Section 382 of the Internal Revenue Code outlines restrictions on the utilization of net
operating losses. When a change of ownership occurs, as broadly defined by Section 382, the
Company is subject to an annual limitation on the usage of its net operating loss carryforwards
that existed before that date. In September 2002, the issuance of stock resulted in a change of
ownership under Section 382. The Company believes these annual limitations are significantly
large enough as to not restrict its ability to utilize the majority of its net operating loss
carryforwards against future earnings to reduce its future federal income tax liability. The Company estimates its income tax expense and liabilities annually. These liabilities
generally are not finalized with the individual taxing authorities until several years after the
end of the annual period for which income taxes have been estimated. Settlement of open tax years,
as well as tax issues in other countries where the Company conducts its businesses, is not expected
to have a material effect on the consolidated financial position or liquidity of the Company, and
in the opinion of management, adequate provision has been made for income and franchise taxes for
all years under examination or subject to future examination. 11. Stockholders Equity Pursuant to the articles of incorporation of the Company, as amended in 2002, there are 40
million shares of common stock authorized for issuance. 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,
2004 and 2003, approximately 1,000 and 51,000 Noteholder Warrants were exercised. The amount of
outstanding Noteholder Warrants amounted to approximately 158,000 at December 31, 2004 and 159,000
at December 31, 2003. The weighted average contractual life is 2.5 years at December 31, 2004. 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, 2004, approximately 1,279,000 shares of Common Stock were outstanding and
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 F-29




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##### Table of Contents



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 &
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 was restructured to permit the new investors
to hold a majority of seats on the Board and to give minority shareholders certain minority rights. 12. Net Income (Loss) Per Share The following table sets forth the computation of basic and diluted net income (loss) per
share (in thousands, except per share amounts): Year Ended December 31,2004
    
    
    2003
    
    
    2002Numerator:Numerator for basic and diluted income (loss) per share  net income (loss) available to common shareholders
    
    $
    25,934
    
    
    $
    (4,965
    )
    
    $
    (38,870
    )Denominator:Denominator weighted average income (loss) per share  basic
    
    
    23,264
    
    
    
    23,176
    
    
    
    14,277Denominator weighted average income (loss) per share  diluted
    
    
    23,761
    
    
    
    23,176
    
    
    
    14,277Net income (loss) per common share  basic
    
    $
    1.11
    
    
    $
    (0.21
    )
    
    $
    (2.72
    )Net income (loss) per common share  diluted
    
    $
    1.09
    
    
    $
    (0.21
    )
    
    $
    (2.72
    )
 The weighted average diluted common shares outstanding for fiscal 2004 includes
approximately 283,000 stock options, 158,000 warrants and 56,000 shares of restricted stock. The
weighted average diluted common shares outstanding for fiscal 2003 and 2002 excludes 1,203,000 and
774,502 stock options, respectively, and 409,000 and 406,000 warrants in 2003 and 2002,
respectively. The common stock equivalents in 2003 and 2002 are excluded as they are anti-dilutive
due to the Companys net losses for 2003 and 2002. 13. 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 for the consolidated financial statements (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. F-30




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##### Table of Contents



Marine Transportation Services(Seabulk Tankers)  Tankers include 10 U.S.-flag
product tankers and two foreign-flag product tankers. The U.S.-flag oceangoing
vessels are used to transport petroleum, chemicals, and crude products, primarily
from chemical manufacturing plants, refineries and storage facilities along the U.S.
Gulf coast to industrial users and distribution facilities in and around the Gulf of
Mexico, Atlantic and Pacific coast ports. Certain of the vessels also transport
crude oil within Alaska and among Alaska, the Pacific coast and Hawaiian ports. One
U.S.-flag vessel and the two foreign-flag vessels operate in the foreign trade. Towing(Seabulk Towing)  Harbor and offshore towing services are provided by tugs
to vessels utilizing the ports in which the tugs operate, and to vessels at sea to
the extent required by offshore commercial contract opportunities and by
environmental regulations, casualty or other emergencies. The Company evaluates performance by operating segment. Within the offshore energy support
segment, the Company conducts 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 consolidated 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. Unallocated expenses are primarily comprised of general and administrative expenses of
corporate nature. Identifiable assets represent those assets used in the operations of each
segment or geographic area, and unallocated assets generally include corporate assets. F-31




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##### Table of Contents



The following schedule presents segment information about the Companys operations (in
thousands): Year Ended December 31,2004
    
    
    2003
    
    
    2002RevenueOffshore energy support
    
    $
    164,360
    
    
    $
    160,716
    
    
    $
    171,479Tankers
    
    
    147,828
    
    
    
    119,002
    
    
    
    121,371Towing
    
    
    40,582
    
    
    
    37,257
    
    
    
    31,475Eliminations(1)
    
    
    (442
    )
    
    
    (417
    )
    
    
    (328
    )Total
    
    $
    352,328
    
    
    $
    316,558
    
    
    $
    323,997Vessel and voyage expensesOffshore energy support
    
    $
    96,791
    
    
    $
    100,001
    
    
    $
    99,572Tankers
    
    
    72,765
    
    
    
    59,371
    
    
    
    64,151Towing
    
    
    23,330
    
    
    
    20,721
    
    
    
    18,909General corporate
    
    
    
    
    
    
    
    
    
    
    254Eliminations (1)
    
    
    (442
    )
    
    
    (417
    )
    
    
    (328
    )Total
    
    $
    192,444
    
    
    $
    179,676
    
    
    $
    182,558Depreciation, amortization,
drydocking and write-down of
assets held for saleOffshore energy support
    
    $
    37,674
    
    
    $
    41,701
    
    
    $
    43,305Tankers
    
    
    24,416
    
    
    
    19,455
    
    
    
    18,159Towing
    
    
    3,766
    
    
    
    3,793
    
    
    
    3,222General corporate
    
    
    276
    
    
    
    1,643
    
    
    
    1,690Total
    
    $
    66,132
    
    
    $
    66,592
    
    
    $
    66,376Income from operationsOffshore energy support
    
    $
    15,789
    
    
    $
    990
    
    
    $
    10,209Tankers
    
    
    46,957
    
    
    
    36,267
    
    
    
    35,669Towing
    
    
    8,667
    
    
    
    7,678
    
    
    
    4,847General corporate
    
    
    (11,071
    )
    
    
    (11,225
    )
    
    
    (12,955
    )Total
    
    $
    60,342
    
    
    $
    33,710
    
    
    $
    37,770Net income (loss)Offshore energy support
    
    $
    (1,710
    )
    
    $
    (16,097
    )
    
    $
    (16,912
    )Tankers
    
    
    28,123
    
    
    
    19,354
    
    
    
    17,346Towing
    
    
    5,533
    
    
    
    4,511
    
    
    
    (151
    )General corporate
    
    
    (6,012
    ) (3)
    
    
    (12,733
    ) (2)
    
    
    (39,153
    )(2)Total
    
    $
    25,934
    
    
    $
    (4,965
    )
    
    $
    (38,870
    )
   (1)  Elimination of intersegment towing revenue and intersegment tankers
operating expenses of $0.4 million, $0.4 million and
$0.3 million for      the years
ended December 31, 2004, 2003 and 2002, respectively. (2)  Includes loss on early extinguishment of debt of $1.7 million and $27.8
million in 2003 and 2002, respectively (see Note 3). (3)  Includes proceeds from the settlement of litigation, in which the
Company received a total of $4.5 million from two of its
suppliers in 2004
      (see Note 5). F-32




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##### Table of Contents



Consolidated Balance Sheet Informationas of December 31,2004
    
    
    2003Identifiable assetsOffshore energy support
    
    $
    298,259
    
    
    $
    288,760Tankers
    
    
    393,409
    
    
    
    327,911Towing
    
    
    59,082
    
    
    
    60,594Unallocated
    
    
    36,038
    
    
    
    17,175Total
    
    $
    786,788
    
    
    $
    694,440Vessels and equipmentOffshore energy support
    
    $
    305,441
    
    
    $
    287,972Tankers
    
    
    405,409
    
    
    
    341,572Towing
    
    
    61,106
    
    
    
    60,924Total
    
    
    771,956
    
    
    
    690,468Construction in progress
    
    
    30,140
    
    
    
    7,856General corporate
    
    
    8,955
    
    
    
    8,882Gross vessels and equipment
    
    
    811,051
    
    
    
    707,206Less accumulated depreciation
    
    
    (212,258
    )
    
    
    (180,180
    )Total
    
    $
    598,793
    
    
    $
    527,026
 Year Ended December 31,2004
    
    
    2003Capital expenditures and drydockingOffshore energy support
    
    $
    64,241
    
    
    $
    47,720Tankers
    
    
    69,622
    
    
    
    11,283Towing
    
    
    1,675
    
    
    
    3,179Unallocated
    
    
    133
    
    
    
    40Total
    
    $
    135,671
    
    
    $
    62,222
 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, Mexico, and South America with
assets that are highly mobile. These operations are subject to risks inherent in operating in such
locations. The foreign-flag offshore vessels and the two foreign-flag tankers 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, Disclosures
about Segments of an Enterprise and Related Information(SFAS 131). There were no individual customers from whom the Company derived more than 10% of its total
revenue for the years ended December 31, 2004, 2003, and 2002. F-33




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The following table presents selected financial information pertaining to the Companys
geographic operations for 2004, 2003 and 2002 (in thousands): Year Ended December 31,2004
    
    
    2003
    
    
    2002RevenueDomestic
    
    $
    225,503
    
    
    $
    197,612
    
    
    $
    200,008ForeignWest Africa
    
    
    85,498
    
    
    
    79,680
    
    
    
    84,576Middle East
    
    
    26,255
    
    
    
    24,650
    
    
    
    23,683Southeast Asia
    
    
    15,072
    
    
    
    14,616
    
    
    
    15,730Consolidated revenue
    
    $
    352,328
    
    
    $
    316,558
    
    
    $
    323,997
 Consolidated Balance Sheet Informationas of December 31,2004
    
    
    2003Identifiable assetsDomestic
    
    $
    600,175
    
    
    $
    516,773ForeignWest Africa
    
    
    117,303
    
    
    
    123,918Middle East
    
    
    27,064
    
    
    
    28,164Southeast Asia
    
    
    6,208
    
    
    
    8,410Other
    
    
    36,038
    
    
    
    17,175Total
    
    $
    786,788
    
    
    $
    694,440Vessels and equipmentDomestic
    
    $
    648,214
    
    
    $
    544,370ForeignWest Africa
    
    
    121,022
    
    
    
    120,049Middle East
    
    
    17,770
    
    
    
    16,637Southeast Asia
    
    
    15,090
    
    
    
    17,268802,096
    
    
    
    698,324General corporate
    
    
    8,955
    
    
    
    8,882811,051
    
    
    
    707,206Less: accumulated depreciation
    
    
    (212,258
    )
    
    
    (180,180
    )Total
    
    $
    598,793
    
    
    $
    527,026
 F-34




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##### Table of Contents



14. 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. Amended Credit Facility and Title XI.The amended 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. Interest Rate Swap and Related 2003 Senior Notes.In October 2003, the Company entered into a
ten-year interest rate swap agreement with its Amended Credit Facility lender and other members of
its lending group. The Company entered into the swap transaction at-market, and as a result
there was no exchange of a premium at the initial date of the transaction. Through this derivative
instrument, which covers a notional amount of $150.0 million, the Company effectively converted the
interest rate on its outstanding 2003 Senior Notes due August 2013 to a floating rate based on
LIBOR. The Company designated the interest rate swap as a fair-value hedge of fixed-rate
interest-bearing debt, and is accounting for the change in fair value of the interest rate swap in
accordance with the shortcut method outlined in SFAS 133, whereby the carrying amount of the 2003
Senior Notes are adjusted by the same amount as the change in fair value of the interest rate swap
(see Note 3). As of December 31, 2004, the effective floating interest rate was 6.79% and
increased to 7.88% effective February 15, 2005. The floating rate is adjusted semi-annually in
February and August of each year. The swap agreement is secured by a second lien on the assets
that secure the Companys amended and restated credit facility. Notes Payable and Capital Lease Obligations. The carrying amounts reported in the balance
sheet approximate fair value as the interest rates either adjust
based on LIBOR, or in the case of fixed rate borrowings, are consistent
with the Companys current borrowing rate. The following table presents the carrying value and fair value of the financial instruments at
December 31 (in millions): As of December 31,2004
    
    
    2003Issue
    
    Carrying Value
    
    
    Fair Value
    
    
    Carrying Value
    
    
    Fair ValueAmended credit facility
    
    $
    48.5
    
    
    $
    48.5
    
    
    $
    30.0
    
    
    $
    30.0Title XI
    
    $
    209.0
    
    
    $
    223.4
    
    
    $
    216.1
    
    
    $
    227.2Interest Rate Swap
    
    $
    2.9
    
    
    $
    2.9
    
    
    $
    1.5
    
    
    $
    1.5
 15. Liquidity At December 31, 2004, the Company had cash and cash equivalents on hand of $18.9 million and
working capital of approximately $49.6 million which includes $35.7 million in restricted cash (see
Note 2). The Companys main sources of liquidity are from operations, borrowings under our Amended
Credit Facility, and proceeds from the sale of vessels with marginal operating performance. In
2004, cash from operations totaled $59.1 million, which was $20.8 million greater than 2003. At
December 31, 2004, availability under our Amended Credit Facility was approximately $1.1 million
(see Note 3). Additionally, the Company received $6.4 million from the sale of vessels during 2004
(see Note 6). The F-35




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##### Table of Contents



Company believes cash from operations will continue to be a meaningful source of liquidity.
Furthermore the Company relies on external financing to fund a substantial portion of the purchase
price of new vessels to its fleet. The Company believes it will obtain commitments from various
lenders to fund at least 80% of the cost of vessels it has contracted to purchase. The Companys capital requirements arise primarily from its need to service debt, fund working
capital, maintain and improve its vessels, and make vessel acquisitions. The Company expects that
cash flow from operations will continue to be a significant source of funds for its working capital
and capital requirements. During 2004, the Company incurred $135.7 million in capital improvements for drydocking costs
and fleet additions. Approximately $22.9 million was for drydockings and approximately $112.7
million was for fleet additions including newbuild vessels and vessel acquisitions. The Company
incurred approximately $12.9 million for the construction of the Seabulk Angolaand the Seabulk
Luanda, approximately $27.6 million for the construction of the Seabulk Brasiland the Seabulk
Angra, approximately $9.4 million for the construction of the Seabulk Advantage,and approximately
$62.0 million for the purchase of the Seabulk Reliantand the Seabulk Trust,the two new
international tankers added to our fleet in March and April 2004. The vessels were funded by a
combination of borrowings and available cash. The Companys expected 2005 capital requirements for drydocking costs is $30.7 million. The
Companys expected 2005 capital requirements for newbuild vessels and fleet improvements is $20.3
million, which includes $6.6 million for four anchor handling tug supply vessels the Company agreed
to construct for approximately $43.7 million (see Note 6). The Companys Amended Credit Facility contains certain restrictive financial covenants that,
among other things, require minimum levels of EBITDA, as defined in the credit agreement, and
tangible net worth. A covenant was amended as of February 26, 2004 to allow the Company a greater
degree of flexibility under the debt/EBITDA ratio. The Company is in compliance with all such
covenants at December 31, 2004. F-36




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##### Table of Contents



16. Selected Quarterly Financial Information (unaudited) The following information is presented as supplementary financial information for 2004 and
2003 (in thousands, except per share information): First
    
    
    Second
    
    
    Third
    
    
    FourthYear Ended December 31, 2004
    
    Quarter
    
    
    Quarter
    
    
    Quarter
    
    
    QuarterRevenue
    
    $
    82,534
    
    
    $
    87,203
    
    
    $
    89,361
    
    
    $
    93,230Income from operations
    
    
    10,400
    
    
    
    12,548
    
    
    
    16,791
    
    
    
    20,603Net income(a)
    
    
    5,650
    
    
    
    2,721
    
    
    
    6,813
    
    
    
    10,750Net income per common share -
basic and diluted (b):Net income  basic
    
    $
    0.24
    
    
    $
    0.12
    
    
    $
    0.29
    
    
    $
    0.46Net income  diluted
    
    $
    0.24
    
    
    $
    0.12
    
    
    $
    0.29
    
    
    $
    0.45
 First
    
    
    Second
    
    
    Third
    
    
    FourthYear Ended December 31, 2003
    
    Quarter
    
    
    Quarter
    
    
    Quarter
    
    
    QuarterRevenue
    
    $
    77,229
    
    
    $
    79,924
    
    
    $
    79,670
    
    
    $
    79,735Income from operations(c)
    
    
    10,830
    
    
    
    12,378
    
    
    
    9,477
    
    
    
    1,025Net income (loss)(d)
    
    
    1,586
    
    
    
    2,660
    
    
    
    (1,876
    )
    
    
    (7,335
    )Net income (loss) per common share
basic and diluted(b)Net income (loss)  basic
    
    $
    0.07
    
    
    $
    0.11
    
    
    $
    (0.08
    )
    
    $
    (0.32
    )Net income (loss)  diluted
    
    $
    0.07
    
    
    $
    0.11
    
    
    $
    (0.08
    )
    
    $
    (0.32
    )
   (a)
    
    Includes $4.5 million in proceeds from the settlement of litigation in the
first quarter of 2004 (see Note 5).(b)
    
    The sum of the four quarters income (loss) per share may not equal
the annual earnings per share, as the quarterly
quarterly computations are independent of the annual computation.(c)
    
    Includes write-down of assets held for sale of $1.2 million, an increase in repairs
and maintenance of $1.8 million related to drydockings and
the write-off of bad debts of approximately $1.9 million in the fourth quarter of 2003.(d)
    
    Includes loss on early extinguishment of debt of $1.7 million in the third quarter
of 2003 (see Note 3). 17. Supplemental Condensed Consolidated Financial Information The Restricted Subsidiaries as to which financial information is included in the table below
are subsidiaries of the Company that are subject to the terms and conditions of the Indenture
governing the Senior Notes. Only certain of the Restricted Subsidiaries (representing the domestic
restricted subsidiaries and referred to in the Indenture as the Guarantor Subsidiaries), jointly
and severally guarantee the Notes on a senior unsecured basis. The Non-guarantor Unrestricted
Subsidiaries as to which financial information is included in the table below are the subsidiary
entities that own the five U.S.-flag double hull tankers which are financed by the Title XI debt
with recourse to the tankers and the subsidiaries that own them. These entities are designated as
Non-Recourse or Unrestricted subsidiaries under the Indenture and do not guarantee the Notes. F-37




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##### Table of Contents



Supplemental financial information for the Company and its guarantor restricted subsidiaries,
non-guarantor restricted subsidiaries and non-guarantor unrestricted subsidiaries for the notes is
presented below. Condensed Consolidating Balance Sheet(in thousands)As of December 31, 2004Wholly
    
    
    Non-WhollyOwned
    
    
    Owned
    
    
    Non-
    
    
    Non-Guarantor
    
    
    Guarantor
    
    
    Guarantor
    
    
    GuarantorRestricted
    
    
    Restricted
    
    
    Restricted
    
    
    Unrestricted
    
    
    
    
    
    
    ConsolidatedParent
    
    
    Subsidiaries
    
    
    Subsidiaries(a)
    
    
    Subsidiaries
    
    
    Subsidiaries
    
    
    Eliminations
    
    
    TotalAssetsCurrent assets:Cash and cash equivalents
    
    $
    8,265
    
    
    $
    4,983
    
    
    $
    
    
    
    $
    5,701
    
    
    $
    
    
    
    $
    
    
    
    $
    18,949Restricted cash
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    2,756
    
    
    
    32,925
    
    
    
    
    
    
    
    35,681Trade accounts receivable, net
    
    
    35
    
    
    
    17,797
    
    
    
    
    
    
    
    32,207
    
    
    
    5,170
    
    
    
    
    
    
    
    55,209Other receivables
    
    
    1,003
    
    
    
    2,430
    
    
    
    
    
    
    
    204
    
    
    
    147
    
    
    
    
    
    
    
    3,784Marine operating supplies
    
    
    79
    
    
    
    2,503
    
    
    
    
    
    
    
    2,700
    
    
    
    2,586
    
    
    
    
    
    
    
    7,868Due from affiliates
    
    
    
    
    
    
    66,330
    
    
    
    
    
    
    
    119,375
    
    
    
    3,372
    
    
    
    (189,077
    )
    
    
    Prepaid expenses and other
    
    
    2,005
    
    
    
    285
    
    
    
    
    
    
    
    1,239
    
    
    
    98
    
    
    
    
    
    
    
    3,627Total current assets
    
    
    11,387
    
    
    
    94,328
    
    
    
    
    
    
    
    164,182
    
    
    
    44,298
    
    
    
    (189,077
    )
    
    
    125,118Vessels and equipment, net
    
    
    46,072
    
    
    
    216,200
    
    
    
    
    
    
    
    127,848
    
    
    
    208,673
    
    
    
    
    
    
    
    598,793Deferred costs, net
    
    
    14,546
    
    
    
    6,625
    
    
    
    
    
    
    
    15,438
    
    
    
    8,444
    
    
    
    
    
    
    
    45,053Investments in affiliates
    
    
    525,588
    
    
    
    14,644
    
    
    
    
    
    
    
    364
    
    
    
    82,611
    
    
    
    (623,207
    )
    
    
    Other
    
    
    7,231
    
    
    
    813
    
    
    
    
    
    
    
    1,177
    
    
    
    8,603
    
    
    
    
    
    
    
    17,824Total assets
    
    $
    604,824
    
    
    $
    332,610
    
    
    $
    
    
    
    $
    309,009
    
    
    $
    352,629
    
    
    $
    (812,284
    )
    
    $
    786,788Liabilities and Stockholders
EquityCurrent liabilities:Accounts payable
    
    $
    4,802
    
    
    $
    1,159
    
    
    $
    
    
    
    $
    8,957
    
    
    $
    
    
    
    $
    
    
    
    $
    14,918Current maturities of
long-term debt
    
    
    3,799
    
    
    
    7,065
    
    
    
    
    
    
    
    436
    
    
    
    5,353
    
    
    
    
    
    
    
    16,653Current obligations under
capital leases
    
    
    1,093
    
    
    
    2,615
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    3,708Accrued interest
    
    
    4,008
    
    
    
    159
    
    
    
    
    
    
    
    5
    
    
    
    703
    
    
    
    
    
    
    
    4,875Due to affiliates
    
    
    161,144
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    (161,144
    )
    
    
    Accrued liabilities and other
    
    
    8,854
    
    
    
    4,676
    
    
    
    
    
    
    
    17,929
    
    
    
    3,862
    
    
    
    
    
    
    
    35,321Total current liabilities
    
    
    183,700
    
    
    
    15,674
    
    
    
    
    
    
    
    27,327
    
    
    
    9,918
    
    
    
    161,144
    )
    
    
    75,475Long-term debt
    
    
    57,544
    
    
    
    53,275
    
    
    
    
    
    
    
    14,480
    
    
    
    200,666
    
    
    
    
    
    
    
    325,965Senior notes
    
    
    152,906
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    152,906Obligations under capital leases
    
    
    10,476
    
    
    
    18,092
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    28,568Due to affiliates
    
    
    
    
    
    
    27,935
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    (27,935
    )
    
    
    Other liabilities
    
    
    2,851
    
    
    
    242
    
    
    
    
    
    
    
    1,740
    
    
    
    46
    
    
    
    
    
    
    
    4,879Total liabilities
    
    
    407,477
    
    
    
    115,218
    
    
    
    
    
    
    
    43,547
    
    
    
    210,630
    
    
    
    (189,079
    )
    
    
    587,793Commitments and contingenciesMinority interest
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    Total stockholders equity
    
    
    197,347
    
    
    
    217,392
    
    
    
    
    
    
    
    265,462
    
    
    
    141,999
    
    
    
    (623,205
    )
    
    
    198,995Total liabilities and
stockholders equity
    
    $
    604,824
    
    
    $
    332,610
    
    
    $
    
    
    
    $
    309,009
    
    
    $
    352,629
    
    
    $
    (812,284
    )
    
    $
    786,788
    F-38




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##### Table of Contents



Condensed Consolidating Balance Sheet(in thousands)As of December 31, 2003Wholly
    
    
    Non-WhollyOwned
    
    
    Owned
    
    
    Non-
    
    
    Non-Guarantor
    
    
    Guarantor
    
    
    Guarantor
    
    
    GuarantorRestricted
    
    
    Restricted
    
    
    Restricted
    
    
    Unrestricted
    
    
    
    
    
    
    ConsolidatedParent
    
    
    Subsidiaries
    
    
    Subsidiaries
    
    
    Subsidiaries
    
    
    Subsidiaries
    
    
    Eliminations
    
    
    TotalAssetsCurrent assets:Cash and cash equivalents
    
    $
    217
    
    
    $
    452
    
    
    $
    1,030
    
    
    $
    5,700
    
    
    $
    
    
    
    $
    
    
    
    $
    7,399Restricted cash
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    1,478
    
    
    
    26,980
    
    
    
    
    
    
    
    28,458Trade accounts receivable, net
    
    
    (296
    )
    
    
    13,686
    
    
    
    822
    
    
    
    34,161
    
    
    
    1,226
    
    
    
    
    
    
    
    49,599Other receivables
    
    
    3,739
    
    
    
    3,338
    
    
    
    16
    
    
    
    2,799
    
    
    
    838
    
    
    
    
    
    
    
    10,730Marine operating supplies
    
    
    121
    
    
    
    1,575
    
    
    
    482
    
    
    
    3,504
    
    
    
    2,473
    
    
    
    
    
    
    
    8,155Due from affiliates
    
    
    
    
    
    
    73,837
    
    
    
    
    
    
    
    120,556
    
    
    
    3,377
    
    
    
    (197,770
    )
    
    
    Prepaid expenses and other
    
    
    960
    
    
    
    365
    
    
    
    19
    
    
    
    1,505
    
    
    
    196
    
    
    
    
    
    
    
    3,045Total current assets
    
    
    4,741
    
    
    
    93,253
    
    
    
    2,369
    
    
    
    169,703
    
    
    
    35,090
    
    
    
    (197,770
    )
    
    
    107,386Vessels and equipment, net
    
    
    34,998
    
    
    
    138,211
    
    
    
    29,893
    
    
    
    106,401
    
    
    
    217,523
    
    
    
    
    
    
    
    527,026Deferred costs, net
    
    
    13,869
    
    
    
    9,347
    
    
    
    1,022
    
    
    
    14,202
    
    
    
    10,046
    
    
    
    
    
    
    
    48,486Investments in affiliates
    
    
    506,250
    
    
    
    2,214
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    (508,464
    )
    
    
    Due from affiliates
    
    
    30,069
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    (30,069
    )
    
    
    Other
    
    
    3,907
    
    
    
    2,234
    
    
    
    
    
    
    
    1,562
    
    
    
    3,839
    
    
    
    
    
    
    
    11,542Total assets
    
    $
    593,834
    
    
    $
    245,259
    
    
    $
    33,284
    
    
    $
    291,868
    
    
    $
    266,498
    
    
    $
    (736,303
    )
    
    $
    694,440Liabilities and Stockholders
EquityCurrent liabilities:Accounts payable
    
    $
    5,256
    
    
    $
    2,658
    
    
    $
    
    
    
    $
    9,504
    
    
    $
    1,387
    
    
    $
    
    
    
    $
    18,805Current maturities of
long-term debt
    
    
    4,250
    
    
    
    1,650
    
    
    
    
    
    
    
    139
    
    
    
    4,998
    
    
    
    
    
    
    
    11,037Current obligations under
capital leases
    
    
    1,039
    
    
    
    2,482
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    3,521Accrued interest
    
    
    5,079
    
    
    
    100
    
    
    
    
    
    
    
    
    
    
    
    633
    
    
    
    
    
    
    
    5,812Due to affiliates
    
    
    194,184
    
    
    
    
    
    
    
    63
    
    
    
    
    
    
    
    
    
    
    
    (194,247
    )
    
    
    Accrued liabilities and other
    
    
    11,395
    
    
    
    3,010
    
    
    
    415
    
    
    
    20,293
    
    
    
    2,250
    
    
    
    
    
    
    
    37,363Total current liabilities
    
    
    221,203
    
    
    
    9,900
    
    
    
    478
    
    
    
    29,936
    
    
    
    9,268
    
    
    
    (194,247
    )
    
    
    76,538Long-term debt
    
    
    35,575
    
    
    
    14,665
    
    
    
    
    
    
    
    1,958
    
    
    
    206,019
    
    
    
    
    
    
    
    258,217Senior Notes
    
    
    151,472
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    151,472Obligations under capital leases
    
    
    11,569
    
    
    
    20,677
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    32,246Due to affiliates
    
    
    
    
    
    
    
    
    
    
    30,069
    
    
    
    
    
    
    
    
    
    
    
    (30,069
    )
    
    
    Other liabilities
    
    
    1,660
    
    
    
    273
    
    
    
    
    
    
    
    1,157
    
    
    
    46
    
    
    
    
    
    
    
    3,136Total liabilities
    
    
    421,479
    
    
    
    45,515
    
    
    
    30,547
    
    
    
    33,051
    
    
    
    215,333
    
    
    
    (224,316
    )
    
    
    521,609Commitments and contingenciesMinority interest
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    476
    
    
    
    476Total stockholders equity
    
    
    172,355
    
    
    
    199,744
    
    
    
    2,737
    
    
    
    258,817
    
    
    
    51,165
    
    
    
    (512,463
    )
    
    
    172,355Total liabilities and
stockholders equity
    
    $
    593,834
    
    
    $
    245,259
    
    
    $
    33,284
    
    
    $
    291,868
    
    
    $
    266,498
    
    
    $
    (736,303
    )
    
    $
    694,440
 F-39




---



##### Table of Contents



Condensed Consolidating Statement of Operations(in thousands)Year Ended December 31, 2004Wholly
    
    
    Non-WhollyOwned
    
    
    Owned
    
    
    Non-
    
    
    Non-Guarantor
    
    
    Guarantor
    
    
    Guarantor
    
    
    GuarantorRestricted
    
    
    Restricted
    
    
    Restricted
    
    
    Unrestricted
    
    
    
    
    
    
    ConsolidatedParent
    
    
    Subsidiaries
    
    
    Subsidiaries(a)
    
    
    Subsidiaries
    
    
    Subsidiaries
    
    
    Eliminations
    
    
    TotalRevenue
    
    $
    44,565
    
    
    $
    105,237
    
    
    $
    
    
    
    $
    128,773
    
    
    $
    74,195
    
    
    $
    (442
    )
    
    $
    352,328Vessel and voyage expenses
    
    
    26,591
    
    
    
    60,547
    
    
    
    
    
    
    
    71,508
    
    
    
    34,240
    
    
    
    (442
    )
    
    
    192,444General and administrative
    
    
    11,994
    
    
    
    9,297
    
    
    
    
    
    
    
    14,708
    
    
    
    1,527
    
    
    
    
    
    
    
    37,526Depreciation, amortization
and drydocking
    
    
    8,191
    
    
    
    19,864
    
    
    
    
    
    
    
    27,144
    
    
    
    10,933
    
    
    
    
    
    
    
    66,132Gain on disposal of assets
    
    
    
    
    
    
    (605
    )
    
    
    
    
    
    
    (3,511
    )
    
    
    
    
    
    
    
    
    
    
    (4,116
    )Income (loss) from
operations
    
    
    (2,211
    )
    
    
    16,134
    
    
    
    
    
    
    
    18,924
    
    
    
    27,495
    
    
    
    
    
    
    
    60,342Other (expense) income, net
    
    
    4,348
    
    
    
    (10,068
    )
    
    
    
    
    
    
    (7,850
    )
    
    
    (15,385
    )
    
    
    (419
    )
    
    
    (29,374
    )Income before income taxes
    
    
    2,137
    
    
    
    6,066
    
    
    
    
    
    
    
    11,074
    
    
    
    12,110
    
    
    
    (419
    )
    
    
    30,968Provision for income taxes
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    5,034
    
    
    
    
    
    
    
    
    
    
    
    5,034Net income
    
    $
    2,137
    
    
    $
    6,066
    
    
    $
    
    
    
    $
    6,040
    
    
    $
    12,110
    
    
    $
    (419
    )
    
    $
    25,934
   (a)  In December 2004, the Company purchased the minority interest in a
partnership that owns the Seabulk America (see Note 6). Subsequent to the acquisition, all
Guarantor Restricted Subsidiaries are wholly-owned subsidiaries of the Company. Condensed Consolidating Statement of Operations(in thousands)Year Ended December 31, 2003Wholly
    
    
    Non-WhollyOwned
    
    
    Owned
    
    
    Non-
    
    
    Non-Guarantor
    
    
    Guarantor
    
    
    Guarantor
    
    
    GuarantorRestricted
    
    
    Restricted
    
    
    Restricted
    
    
    Unrestricted
    
    
    
    
    
    
    ConsolidatedParent
    
    
    Subsidiaries
    
    
    Subsidiaries
    
    
    Subsidiaries
    
    
    Subsidiaries
    
    
    Eliminations
    
    
    TotalRevenue
    
    $
    44,264
    
    
    $
    78,637
    
    
    $
    13,662
    
    
    $
    119,466
    
    
    $
    60,946
    
    
    $
    (417
    )
    
    $
    316,558Vessel and voyage expenses
    
    
    25,453
    
    
    
    54,459
    
    
    
    8,616
    
    
    
    66,264
    
    
    
    25,301
    
    
    
    (417
    )
    
    
    179,676General and administrative
    
    
    10,912
    
    
    
    10,206
    
    
    
    894
    
    
    
    14,349
    
    
    
    1,682
    
    
    
    
    
    
    
    38,043Depreciation, amortization
and drydocking
    
    
    8,250
    
    
    
    15,710
    
    
    
    2,988
    
    
    
    28,629
    
    
    
    9,796
    
    
    
    
    
    
    
    65,373Write-down of assets held for
sale
    
    
    
    
    
    
    1,219
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    1,219Gain on disposal of assets
    
    
    
    
    
    
    (1,136
    )
    
    
    
    
    
    
    (327
    )
    
    
    
    
    
    
    
    
    
    
    (1,463
    )Income (loss) from operations
    
    
    (351
    )
    
    
    (1,821
    )
    
    
    1,164
    
    
    
    10,551
    
    
    
    24,167
    
    
    
    
    
    
    
    33,710Other expense, net
    
    
    (1,268
    )
    
    
    (8,588
    )
    
    
    (1,616
    )
    
    
    (7,428
    )
    
    
    (15,684
    )
    
    
    147
    
    
    
    (34,437
    )Income (loss) before income
taxes
    
    
    (1,619
    )
    
    
    (10,409
    )
    
    
    (452
    )
    
    
    3,123
    
    
    
    8,483
    
    
    
    147
    
    
    
    (727
    )Provision for income taxes
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    4,238
    
    
    
    
    
    
    
    
    
    
    
    4,238Net income (loss)
    
    $
    (1,619
    )
    
    $
    (10,409
    )
    
    $
    (452
    )
    
    $
    (1,115
    )
    
    $
    8,483
    
    
    $
    147
    
    
    $
    (4,965
    )
 F-40




---



##### Table of Contents



Condensed Consolidating Statement of Operations(in thousands)Year Ended December 31, 2002Wholly
    
    
    Non-WhollyOwned
    
    
    Owned
    
    
    Non-
    
    
    Non-Guarantor
    
    
    Guarantor
    
    
    Guarantor
    
    
    GuarantorRestricted
    
    
    Restricted
    
    
    Restricted
    
    
    Unrestricted
    
    
    
    
    
    
    ConsolidatedParent
    
    
    Subsidiaries
    
    
    Subsidiaries
    
    
    Subsidiaries
    
    
    Subsidiaries
    
    
    Eliminations
    
    
    TotalRevenue
    
    $
    43,604
    
    
    $
    82,881
    
    
    $
    12,352
    
    
    $
    123,989
    
    
    $
    61,284
    
    
    $
    (113
    )
    
    $
    323,997Vessel and voyage expenses
    
    
    26,398
    
    
    
    54,329
    
    
    
    7,783
    
    
    
    67,546
    
    
    
    26,615
    
    
    
    (113
    )
    
    
    182,558General and administrative
    
    
    12,257
    
    
    
    10,333
    
    
    
    885
    
    
    
    13,534
    
    
    
    1,648
    
    
    
    
    
    
    
    38,657Depreciation, amortization
and
drydocking
    
    
    7,952
    
    
    
    17,453
    
    
    
    2,313
    
    
    
    29,127
    
    
    
    9,531
    
    
    
    
    
    
    
    66,376(Gain) loss on disposal of
assets, net
    
    
    
    
    
    
    (1,901
    )
    
    
    
    
    
    
    537
    
    
    
    
    
    
    
    
    
    
    
    (1,364
    )Income (loss) from operations
    
    
    (3,003
    )
    
    
    2,667
    
    
    
    1,371
    
    
    
    13,245
    
    
    
    23,490
    
    
    
    
    
    
    
    37,770Other expense, net
    
    
    (30,576
    )
    
    
    (11,474
    )
    
    
    (2,043
    )
    
    
    (11,895
    )
    
    
    (16,010
    )
    
    
    
    
    
    
    (71,998
    )Income (loss) before
provision
for income taxes
    
    
    (33,579
    )
    
    
    (8,807
    )
    
    
    (672
    )
    
    
    1,350
    
    
    
    7,480
    
    
    
    
    
    
    
    (34,228
    )Provision (benefit) for
income
taxes
    
    
    (1,520
    )
    
    
    
    
    
    
    
    
    
    
    6,162
    
    
    
    
    
    
    
    
    
    
    
    4,642Net income (loss)
    
    $
    (32,059
    )
    
    $
    (8,807
    )
    
    $
    (672
    )
    
    $
    (4,812
    )
    
    $
    7,480
    
    
    $
    
    
    
    $
    (38,870
    )
 F-41




---



##### Table of Contents



Condensed Consolidating Statement of Cash Flows(in thousands)Year Ended December 31, 2004Wholly
    
    
    Non-WhollyOwned
    
    
    OwnedGuarantor
    
    
    GuarantorRestricted
    
    
    RestrictedParent
    
    
    Subsidiaries
    
    
    Subsidiaries(a)Operating activities:Net cash provided by operating
activities
    
    $
    8,330
    
    
    $
    11,375
    
    
    $
    Investing activities:Purchases of vessels and equipment
    
    
    (20,220
    )
    
    
    (62,706
    )
    
    
    Proceeds from disposals of assets
    
    
    
    
    
    
    1,011
    
    
    
    Investment in joint venture
    
    
    
    
    
    
    
    
    
    
    Acquisition of minority interest
    
    
    
    
    
    
    
    
    
    
    Net cash used in investing activities
    
    
    (20,220
    )
    
    
    (61,695
    )
    
    
    Financing activities:Payments on Amended Credit Facility
    
    
    (1,483
    )
    
    
    
    
    
    
    Proceeds from Amended Credit Facility
    
    
    20,000
    
    
    
    
    
    
    
    Payments of long-term debt
    
    
    (2,100
    )
    
    
    (5,756
    )
    
    
    Proceeds from long-term debt
    
    
    7,252
    
    
    
    62,599
    
    
    
    Payments of Title XI bonds
    
    
    (2,142
    )
    
    
    
    
    
    
    Payments of other deferred financing
costs
    
    
    (661
    )
    
    
    (570
    )
    
    
    Payments of deferred financing costs
under
2003 Senior Notes and Amended Credit
Facility
    
    
    (285
    )
    
    
    
    
    
    
    Payments of obligations under
capital leases
    
    
    (1,039
    )
    
    
    (2,452
    )
    
    
    Proceeds from exercise of stock options
    
    
    396
    
    
    
    
    
    
    
    Proceeds from exercise of warrants
    
    
    
    
    
    
    
    
    
    
    Increase in restricted cash
    
    
    
    
    
    
    
    
    
    
    Net cash provided by (used in)
financing activities
    
    
    19,938
    
    
    
    53,821
    
    
    
    Change in cash and cash equivalents
    
    
    8,048
    
    
    
    3,501
    
    
    
    Cash and cash equivalents at beginning of
period
    
    $
    217
    
    
    $
    1,482
    
    
    $
    Cash and cash equivalents at end of
period
    
    $
    8,265
    
    
    $
    4,983
    
    
    $
    
   (a)  In December 2004, the Company purchased the minority interest in a
partnership that owns the Seabulk America (see Note 6). Subsequent to the acquisition, all
Guarantor Restricted Subsidiaries are wholly-owned subsidiaries of the Company. F-42




---



##### Table of Contents



Condensed Consolidating Statement of Cash Flows(in thousands)Year Ended December 31, 2004Non-
    
    
    Non-Guarantor
    
    
    GuarantorRestricted
    
    
    Unrestricted
    
    
    
    
    
    
    ConsolidatedSubsidiaries
    
    
    Subsidiaries
    
    
    Eliminations
    
    
    TotalOperating activities:Net cash provided by operating activities
    
    $
    26,044
    
    
    $
    13,396
    
    
    $
    
    
    
    $
    59,145Investing activities:Purchases of vessels and equipment
    
    
    (29,779
    )
    
    
    (35
    )
    
    
    
    
    
    
    (112,740
    )Proceeds from disposal of assets
    
    
    5,352
    
    
    
    
    
    
    
    
    
    
    
    6,363Investment in joint venture
    
    
    (300
    )
    
    
    
    
    
    
    
    
    
    
    (300
    )Acquisition of minority interest
    
    
    
    
    
    
    (2,410
    )
    
    
    
    
    
    
    (2,410
    )Net cash used in investing activities
    
    
    (24,727
    )
    
    
    (2,445
    )
    
    
    
    
    
    
    (109,087
    )Financing activities:Payments on Amended Credit Facility
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    (1,483
    )Proceeds from Amended Credit Facility
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    20,000Payments of long-term debt
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    (7,856
    )Proceeds from long-term debt
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    69,851Payments of Title XI bonds
    
    
    
    
    
    
    (5,006
    )
    
    
    
    
    
    
    (7,148
    )Payments of other deferred financing
costs
    
    
    (38
    )
    
    
    
    
    
    
    
    
    
    
    (1,269
    )Payments of deferred financing costs
under 2003 Senior Notes and Amended Credit
Facility
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    (285
    )Payments of obligations under capital
leases
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    (3,491
    )Proceeds from exercise of stock options
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    396Proceeds from exercise of warrants
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    Increase in restricted cash
    
    
    (1,278
    )
    
    
    (5,945
    )
    
    
    
    
    
    
    (7,223
    )Net cash provided by (used in)
financing activities
    
    
    (1,316
    )
    
    
    (10,951
    )
    
    
    
    
    
    
    61,492Change in cash and cash equivalents
    
    
    1
    
    
    
    
    
    
    
    
    
    
    
    11,550Cash and cash equivalents at beginning of
period
    
    $
    5,700
    
    
    $
    
    
    
    $
    
    
    
    $
    7,399Cash and cash equivalents at end of
period
    
    $
    5,701
    
    
    $
    
    
    
    $
    
    
    
    $
    18,949
 F-43




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##### Table of Contents



Condensed Consolidating Statement of Cash Flows(in thousands)Year Ended December 31, 2003Wholly
    
    
    Non-WhollyOwned
    
    
    OwnedGuarantor
    
    
    GuarantorRestricted
    
    
    RestrictedParent
    
    
    Subsidiaries
    
    
    SubsidiariesOperating activities:Net cash provided by (used in) operating
activities
    
    $
    (9,958
    )
    
    $
    12,850
    
    
    $
    1,028Investing activities:Purchases of vessels and equipment
    
    
    (1,388
    )
    
    
    (1,314
    )
    
    
    (11
    )Proceeds from disposals of assets
    
    
    
    
    
    
    4,380
    
    
    
    Investment in joint venture
    
    
    
    
    
    
    
    
    
    
    Net cash provided by (used in)
investment activities
    
    
    (1,388
    )
    
    
    3,066
    
    
    
    (11
    )Financing activities:Payments of prior credit facility
    
    
    (148,179
    )
    
    
    
    
    
    
    Proceeds from 2003 Senior Notes
    
    
    150,000
    
    
    
    
    
    
    
    Payments of long-term debt
    
    
    (5,436
    )
    
    
    (1,972
    )
    
    
    Proceeds from long-term debt
    
    
    
    
    
    
    6,525
    
    
    
    Payment of other deferred financing costs
    
    
    
    
    
    
    (106
    )
    
    
    Payments of Title XI bonds
    
    
    (2,150
    )
    
    
    (549
    )
    
    
    Retirement of Title XI bonds
    
    
    
    
    
    
    (11,181
    )
    
    
    Payment of deferred financing costs
under prior credit facility
    
    
    (88
    )
    
    
    
    
    
    
    Payments of deferred financing costs
under
2003 Senior Notes and Amended Credit
Facility
    
    
    (5,458
    )
    
    
    
    
    
    
    Net proceeds from sale leaseback
    
    
    13,274
    
    
    
    
    
    
    
    Payments of obligations under capital
leases
    
    
    (828
    )
    
    
    (8,594
    )
    
    
    Proceeds from exercise of stock options
    
    
    307
    
    
    
    
    
    
    
    Proceeds from exercise of warrants
    
    
    2
    
    
    
    
    
    
    
    Increase in restricted cash
    
    
    (2,197
    )
    
    
    
    
    
    
    Net cash provided by (used in) financing
activities
    
    
    (753
    )
    
    
    (15,877
    )
    
    
    Change in cash and cash equivalents
    
    
    (12,099
    )
    
    
    39
    
    
    
    1,017Cash and cash equivalents at beginning of
period
    
    $
    12,316
    
    
    $
    413
    
    
    $
    13Cash and cash equivalents at end of
period
    
    $
    217
    
    
    $
    452
    
    
    $
    1,030
 F-44




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##### Table of Contents



Condensed Consolidating Statement of Cash Flows(in thousands)Year Ended December 31, 2003Non-
    
    
    Non-Guarantor
    
    
    GuarantorRestricted
    
    
    Unrestricted
    
    
    
    
    
    
    ConsolidatedSubsidiaries
    
    
    Subsidiaries
    
    
    Eliminations
    
    
    TotalOperating activities:Net cash provided by (used in) operating
activities
    
    $
    22,216
    
    
    $
    12,187
    
    
    $
    
    
    
    $
    38,323Investing activities:Purchases of vessels and equipment
    
    
    (27,798
    )
    
    
    (172
    )
    
    
    
    
    
    
    (30,683
    )Proceeds from disposals of assets
    
    
    5,045
    
    
    
    
    
    
    
    
    
    
    
    9,425Investment in joint venture
    
    
    (400
    )
    
    
    
    
    
    
    
    
    
    
    (400
    )Net cash provided by (used in) investing
activities
    
    
    (23,153
    )
    
    
    (172
    )
    
    
    
    
    
    
    (21,658
    )Financing activities:Payments of prior credit facility
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    (148,179
    )Proceeds from 2003 Senior Notes
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    150,000Payments of long-term debt
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    (7,408
    )Proceeds from long-term debt
    
    
    2,097
    
    
    
    
    
    
    
    
    
    
    
    8,622Payments of other deferred financing costs
    
    
    (120
    )
    
    
    
    
    
    
    
    
    
    
    (226
    )Payments of Title XI bonds
    
    
    
    
    
    
    (4,679
    )
    
    
    
    
    
    
    (7,378
    )Retirement of Title XI bonds
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    (11,181
    )Payments of deferred financing costs under
prior credit facility
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    (88
    )Payments of deferred financing costs under
2003 Senior Notes and Amended Credit
Facility
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    (5,458
    )Net proceeds from sale leaseback
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    13,274Payments of obligations under capital leases
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    (9,422
    )Proceeds from exercise of stock options
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    307Proceeds from exercise of warrants
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    2Increase in restricted cash
    
    
    (142
    )
    
    
    (7,336
    )
    
    
    
    
    
    
    (9,675
    )Net cash provided by (used in) financing
activities
    
    
    1,835
    
    
    
    (12,015
    )
    
    
    
    
    
    
    (26,810
    )Change in cash and cash
equivalents
    
    
    898
    
    
    
    
    
    
    
    
    
    
    
    (10,145
    )Cash and cash equivalents at beginning of
period
    
    $
    4,802
    
    
    $
    
    
    
    $
    
    
    
    $
    17,544Cash and cash equivalents at end of period
    
    $
    5,700
    
    
    $
    
    
    
    $
    
    
    
    $
    7,399
 F-45




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##### Table of Contents



Condensed Consolidating Statement of Cash Flows(in thousands)Year Ended December 31, 2002Wholly
    
    
    Non-WhollyOwned
    
    
    OwnedGuarantor
    
    
    GuarantorRestricted
    
    
    RestrictedParent
    
    
    Subsidiaries
    
    
    SubsidiariesOperating activities:Net cash provided by (used in) operating
activities
    
    $
    23,811
    
    
    $
    (2,144
    )
    
    $
    248Investing activities:Purchases of vessels and equipment
    
    
    (315
    )
    
    
    (2,837
    )
    
    
    (249
    )Proceeds from disposals of assets
    
    
    252
    
    
    
    10,049
    
    
    
    Net cash provided by (used in) investing
activities
    
    
    (63
    )
    
    
    7,212
    
    
    
    (249
    )Financing activities:Net payments of revolving credit facility
    
    
    (9,000
    )
    
    
    
    
    
    
    Payments of prior credit facility
    
    
    (125
    )
    
    
    
    
    
    
    Proceeds from prior credit facility
    
    
    178,800
    
    
    
    
    
    
    
    Payments of prior Senior Notes
    
    
    (101,499
    )
    
    
    
    
    
    
    Payments of long-term debt
    
    
    (164,524
    )
    
    
    (1,293
    )
    
    
    Proceeds of Private Placement, net of
issuance costs
    
    
    90,901
    
    
    
    
    
    
    
    Payments of Title XI bonds
    
    
    (2,150
    )
    
    
    (646
    )
    
    
    Payments of deferred financing costs under
prior credit facility
    
    
    (4,128
    )
    
    
    
    
    
    
    Payments of obligations under capital
leases
    
    
    
    
    
    
    (2,986
    )
    
    
    Proceeds from exercise of warrants
    
    
    1
    
    
    
    
    
    
    
    Proceeds from exercise of stock options
    
    
    42
    
    
    
    
    
    
    
    Increase in restricted cash
    
    
    
    
    
    
    
    
    
    
    Net cash used in financing activities
    
    
    (11,682
    )
    
    
    (4,925
    )
    
    
    Change in cash and cash
equivalents
    
    
    12,066
    
    
    
    143
    
    
    
    (1
    )Cash and cash equivalents at beginning of
period
    
    $
    250
    
    
    $
    270
    
    
    $
    14Cash and cash equivalents at end of
period
    
    $
    12,316
    
    
    $
    413
    
    
    $
    13
 F-46




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##### Table of Contents



Condensed Consolidating Statement of Cash Flows(in thousands)Year Ended December 31, 2002Non-
    
    
    Non-Guarantor
    
    
    GuarantorRestricted
    
    
    Unrestricted
    
    
    
    
    
    
    ConsolidatedSubsidiaries
    
    
    Subsidiaries
    
    
    Eliminations
    
    
    TotalOperating activities:Net cash provided by (used in) operating
activities
    
    $
    (1,108
    )
    
    $
    16,805
    
    
    $
    
    
    
    $
    37,612Investing activities:Purchases of vessels and equipment
    
    
    (352
    )
    
    
    
    
    
    
    
    
    
    
    (3,753
    )Proceeds from disposals of assets
    
    
    2,374
    
    
    
    
    
    
    
    
    
    
    
    12,675Net cash provided by (used in) investing
activities
    
    
    2,022
    
    
    
    
    
    
    
    
    
    
    
    8,922Financing activities:Net payments of revolving credit facility
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    (9,000
    )Payments of prior credit facility
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    (125
    )Proceeds for prior credit facility
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    178,800Payments of prior Senior Notes
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    (101,499
    )Payments of long-term debt
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    (165,817
    )Proceeds of Private Placement, net of
issuance costs
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    90,901Payments of Title XI bonds
    
    
    
    
    
    
    (4,370
    )
    
    
    
    
    
    
    (7,166
    )Payments of deferred financing costs
under prior credit facility
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    (4,128
    )Payments of obligations under capital
leases
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    (2,986
    )Proceeds from exercise of warrants
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    1Proceeds from exercise of stock options
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    42Increase in restricted cash
    
    
    
    
    
    
    (12,435
    )
    
    
    
    
    
    
    (12,435
    )Net cash used in financing activities
    
    
    
    
    
    
    (16,805
    )
    
    
    
    
    
    
    (33,412
    )Change in cash and cash equivalents
    
    
    914
    
    
    
    
    
    
    
    
    
    
    
    13,122Cash and cash equivalents at beginning of
period
    
    $
    3,888
    
    
    $
    
    
    
    $
    
    
    
    $
    4,422Cash and cash equivalents at end of
period
    
    $
    4,802
    
    
    $
    
    
    
    $
    
    
    
    $
    17,544
 F-47




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##### Table of Contents



18. Subsequent Event (unaudited) On March 16, 2005, Seabulk announced that it had signed a definitive merger agreement with
SEACOR Holdings, Inc. (SEACOR). The Boards of Directors of both companies have unanimously
approved the transaction. Under the terms of the merger agreement, Seabulks stockholders will,
subject to limited adjustments, receive 0.2694 of a share of SEACOR common stock plus cash of $4.00
for each issued and outstanding share of Seabulk common stock. In certain circumstances, the
portion of the merger consideration payable in cash may be reduced and shares of SEACOR common
stock, having a value on the closing date equal to the cash reduction, may be substituted therefor. The merger is expected to close by the end of the second quarter of 2005, subject to approval
by Seabulks stockholders of the merger and SEACORs stockholders of the issuance of shares of its
common stock in the merger, the receipt of certain regulatory approvals and the satisfaction of
customary closing conditions, in accordance with terms of the merger agreement. F-48