SECURITIES AND EXCHANGE COMMISSION
                             Washington, D.C. 20549

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

                    For the fiscal year ended December 31, 2000

                         Commission File Number 0-28732

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

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

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

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

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

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

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

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

         The  aggregate  market value of the  registrant's  Common Stock held by
non-affiliates of the registrant at March 1, 2001 (based on the closing price of
such stock on the Nasdaq National Market) was $85,525,469.

         At March 1, 2001  there  were  10,145,370  shares  of the  registrant's
Common Stock outstanding.

                       DOCUMENTS INCORPORATED BY REFERENCE

 DOCUMENT                                                 WHERE INCORPORATED

 Proxy Statement for Annual Meeting
 to be held May 17, 2001 (specified portions)               Part III





<PAGE>








                           SEABULK INTERNATIONAL, INC.

                                 2000 FORM 10-K


                                Table of Contents
<TABLE>
<CAPTION>

Item                                                                                                           Page
----                                                                                                           ----
<S>      <C>                                                                                                <C>
                                     Part I

1        Business...........................................................................................   3
2        Properties.........................................................................................  17
3        Legal Proceedings..................................................................................  17
4        Submission of Matters to a Vote of Security Holders................................................  18
4A       Executive Officers of the Registrant...............................................................  18

                                     Part II

5        Market for Registrant's Common Equity and Related Stockholder Matters..............................  21
6        Selected Financial Data............................................................................  22
7        Management's Discussion and Analysis of Financial Condition and Results of
         Operations.........................................................................................  25
7A       Quantitative and Qualitative Disclosures About Market Risk.........................................  38
8        Financial Statements...............................................................................  38
9        Changes in and Disagreements With Accountants on Accounting and Financial
         Disclosure.........................................................................................  38

                                    Part III

10       Directors and Executive Officers of the Registrant.................................................  39
11       Executive Compensation.............................................................................  39
12       Security Ownership of Certain Beneficial Owners and Management.....................................  39
13       Certain Relationships and Related Transactions.....................................................  39

                                     Part IV

14       Exhibits, Financial Statement Schedules, and Reports on Form 8-K...................................  40


                              Financial Supplement

         Consolidated Financial Statements and Schedules.................................................... F-1
</TABLE>

<PAGE>




                                     PART I

Item 1.  Business

General

         Seabulk   International,   Inc.  is  the  new  name  for  Hvide  Marine
Incorporated.  The  change  was  effective  March 19,  2001 and  symbolizes  the
Company's  transformation  under new  management and new ownership into a strong
competitor  in each of its three  main  businesses  - offshore  energy  support,
marine  transportation,  and towing. We have been an active consolidator in each
of the markets in which we operate, increasing our fleet from 23 vessels in 1993
to 238 vessels at year-end 2000. Our offshore energy  services fleet,  numbering
173 vessels, is one of the world's largest and provides services to operators of
offshore oil and gas exploration,  development and production  facilities in the
Gulf of Mexico, the Arabian Gulf,  offshore West Africa, and Southeast Asia. Our
marine transportation fleet, numbering ten tankers, eight towboats, and fourteen
barges,  carries petroleum  products,  crude oil, and specialty chemicals in the
U.S.  domestic  trade and includes five new  double-hull  petroleum  product and
chemical  carriers  delivered  in 1998 and 1999.  Our  towing  fleet  numbers 33
vessels and is one of the largest and most modern in the United  States.  We are
the sole  provider  of  commercial  tug  services  at Port  Everglades  and Port
Canaveral,  Florida; and a leading provider of those services in Tampa, Florida;
Mobile,  Alabama;  Lake  Charles,  Louisiana;  and Port Arthur,  Texas.  We also
provide offshore towing services primarily in the Gulf of Mexico.

         From September 9 to December 15, 1999, we operated under the protection
of the reorganization  provisions of Chapter 11 of the U.S. Bankruptcy Code. For
more  information  on this subject,  see "Our  Reorganization."  As used in this
Report, the terms "we" and "the Company" refer to Seabulk International, Inc., a
Delaware  corporation,  formerly  known as Hvide  Marine  Incorporated,  and its
subsidiaries.  Our principal  executive offices are located at 2200 Eller Drive,
P.O. Box 13038,  Fort  Lauderdale,  Florida 33316,  and our telephone  number is
(954) 523-2200.

Projections and Other Forward-Looking Information

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

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

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

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

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

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

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

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

         Additional  information regarding these and other factors affecting our
business appears elsewhere in this Report.

Our Reorganization

         Under our  reorganization  plan, which became effective on December 15,
1999 ("Effective Date"):

o    the holders of the $300.0 million of senior notes received 9,800,000 shares
     of our common  stock  (representing  98.0% of our  then-outstanding  common
     stock) in exchange for their notes;

o    the holders of the $115.0 million of trust  preferred  securities  received
     200,000   shares   of  our   common   stock   (representing   2.0%  of  our
     then-outstanding  common stock), as well as Class A Warrants to purchase an
     additional  125,000  shares at $38.49  per  share,  in  exchange  for those
     securities;

o    our former  stockholders  received  Class A Warrants to  purchase a total
     of 125,000  shares of our common stock;

o    claims of general and trade creditors were unaffected; and

o    we reincorporated from Florida to Delaware.

         We also  obtained  new  credit  facilities  from a group  of  financial
institutions.  The new facilities,  totaling  $320.0 million,  consist of $200.0
million in term loans,  a $25.0 million  revolving  credit  facility,  and $95.0
million in aggregate  principal  amount at maturity of new 12.5% senior  secured
notes due 2007. As  consideration  for the purchase of the senior  secured notes
and as compensation for certain financial services,  we issued to the purchasers
of the notes and to the  investment  advisors  Noteholder  Warrants  to purchase
723,861  shares of our  common  stock at an  exercise  price of $.01 per  share.
Substantially  all of the proceeds from these  facilities were used to repay all
outstanding  borrowings under our prior bank loans and to pay administrative and
other fees and  expenses.  The balance of the proceeds,  $7.8  million,  and the
$25.0 million  revolving  credit facility were designated to be used for working
capital and general corporate purposes.

         The  Reorganized  Company.  Although our  reorganization  significantly
reduced our debt, we still have substantial debt and debt service  requirements,
both in absolute terms and in relation to stockholders'  equity.  Our ability to
meet our debt service obligations depends on a number of factors,  including our
ability to maintain  operating  cash flow,  which in turn  depends in large part
upon day rates and utilization in the offshore energy support business.  Despite
substantial  increases in oil and gas prices over the last eighteen months,  day
rates for our offshore energy services fleet did not improve significantly until
the second half of 2000,  resulting in a series of  amendments  to the Company's
credit agreement, as follows:

1)   In April 2000, anticipating that we would not be in compliance with certain
     covenants in our credit  agreement as of March 31, 2000, we entered into an
     amendment to the credit  agreement under which the relevant  covenants were
     modified  through March 31, 2001, and we were  required to repay  principal
     under the term loans  aggregating $10.0 million before June 30, 2000, $35.0
     million  before August 31, 2000,  and $60.0 million before January 1, 2001.
     The amended credit agreement further provided that, in the event we did not
     make the required principal payments as scheduled or achieve certain target
     levels of EBITDA for the third and fourth  quarters  of 2000,  the  lending
     banks could require us to sell  additional  vessels,  to be selected by the
     lending  banks,  with an aggregate  fair market value of $35.0 million on a
     timetable specified by the lending banks. Additionally,  we are required to
     obtain  the  consent  of the  lending  banks to  borrow  in excess of $17.5
     million  under the  revolving  loan  portion  of the credit  facility.  The
     Company paid a fee of $4.5 million to the lending banks in connection  with
     the  amendment of the credit  agreement  in the form of a  promissory  note
     accruing  interest  quarterly  at 15.0% per annum,  due the  earlier of (i)
     April 2002 or (ii) the date on which the ratio of our  funded  indebtedness
     to EBITDA for any quarter is less than four to one.

2)   In June 2000, the Company entered into an amendment to the credit agreement
     that provided the Company with  additional  flexibility in selecting  which
     vessels it could sell and extended the first  prepayment date from June 30,
     2000 to July 17, 2000.  The Company  complied  with this revised  repayment
     date.

3)   In August 2000, as industry conditions in the offshore segment continued to
     improve,  the  Company  entered  into a  further  amendment  to the  credit
     agreement that reduced the year-end repayment obligation from $60.0 million
     to $40.0  million and expanded the  Company's  flexibility  in  determining
     which assets to sell.

4)   In December  2000,  the Company  entered  into a further  amendment  to the
     credit agreement whereby the obligation to repay $40.0 million of term loan
     debt by  year-end  was  eliminated.  The  Company  repaid  a total of $25.3
     million in 2000 from the sale of 39 surplus or underutilized vessels.

         In addition, the senior secured notes did not receive by April 15, 2000
the rating from the rating  agencies  required  under the note  indenture.  As a
result,  the interest rate for the notes increased from 12.5% to 13.5% effective
December 15, 1999. The indenture  requires that the additional  interest be paid
in the form of  additional  notes,  of which  notes in the  amount of  $514,583;
$238,786;  and $239,383  were issued on June 30,  September 30, and December 31,
2000,  respectively.  The Company is currently seeking the required ratings that
would return the interest rate to 12.5%.

Recent Developments

         New Name and Stock Symbol:  On March 19, 2001, the Company  changed its
name to Seabulk International, Inc. from Hvide Marine Incorporated. On March 21,
2001, the Company's  stock symbol on the Nasdaq  National Market changed to SBLK
from HVDM. Throughout 2000, the Company's stock traded on the OTC Bulletin Board
under the  symbol  HVDM.  On January  2,  2001,  it began  trading on the Nasdaq
National Market.

         New Warrant  Symbol:  On March 21, 2001,  the symbol for the  Company's
Class A Warrants  changed to SBLKW from HVDMW. The Class A Warrants trade on the
OTC Bulletin Board.

         Lightship  Tankers LLC: On January 15, 2001, the Company  completed the
purchase of the remaining  24.25%  interest in Lightship  Tankers I - V LLC, the
vessel-owning  companies of the five double-hull  tankers (formerly known as the
Lightship   Tankers),   previously  held  by  Newport  News   Shipbuilding   for
approximately  $11.0  million,  of which $0.5  million  was paid in cash and the
balance  was paid by a  promissory  note of $10.5  million.  The Company now has
100.0% equity ownership of these five double-hull tankers.

Fleet Overview

         The following table lists the types of vessels we owned,  operated,  or
chartered as of March 1, 2001:

                                                                    Vessels
                                                                   in Fleet
                                                                  ------------
     Offshore Energy Support
        Domestic Offshore Energy Support:
          Anchor Handling Tug Supply/Supply Boats..............      26
            Crew/Utility Boats.................................      34
            Geophysical Boats..................................       3
                                                                  -----
               Total Domestic Offshore Energy Support..........      63
                                                                   ----
        International Offshore Energy Support:
            Anchor Handling Tug Supply/Supply Boats............      47
            Anchor Handling Tugs/Tugs..........................      22
            Crew/Utility Boats.................................      27
            Other..............................................      11
                                                                   ----
               Total International Offshore Energy Support.....     107
                                                                    ---

               Total Offshore Energy Support...................     170
                                                                    ---

     Marine Transportation
          Petroleum/Chemical Product Carriers..................      10
          Fuel Barges..........................................      14
          Towboats.............................................       8
                                                                  -----
               Total Marine Transportation.....................      32
                                                                   ----

     Towing....................................................      31
                                                                   ----

                              Total vessels....................     233
                                                                    ===

         The total vessels referred to above include 229 vessels that we own and
operate;  one vessel that we own but is operated by others; two vessels owned by
others but operated by us, under various chartering and operating  arrangements;
and one vessel  chartered to a third party that is neither owned nor operated by
us. We are actively marketing 10 of the offshore energy support vessels, located
in the Middle East, for sale.

         For financial  information  about our business  segments and geographic
areas of operation, see Note 13 to our consolidated financial statements.


<PAGE>



Lines of Business

         (1) Offshore Energy Support

         This is our biggest business, accounting for approximately 47.0% of our
total revenues in 2000.  Offshore  energy support  vessels are used primarily to
transport materials,  supplies, equipment, and personnel to drilling rigs and to
support  the  construction,  positioning  and ongoing  operation  of oil and gas
production platforms. Offshore energy support vessels are hired, or "chartered,"
by oil  companies  and others  engaged in offshore  exploration  and  production
activities.

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

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

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

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

o    Crewboats  (also  called  crew/supply  boats) are faster and  smaller  than
     supply boats and are used primarily to transport personnel and light cargo,
     including food and supplies,  to and among production  platforms,  rigs and
     other offshore installations. They are chartered together with supply boats
     to support drilling or construction operations or, separately, to serve the
     various  requirements  of  offshore  production  platforms.  Crewboats  are
     typically aluminum-hull vessels and generally have longer useful lives than
     steel-hull   supply  boats.   Crewboats   also  provide  a   cost-effective
     alternative to helicopter  transportation services and can operate reliably
     in all but the most severe weather conditions.

         About   one-third  of  offshore   revenues  is  derived  from  domestic
operations under U.S.-flag vessel  registration in the Gulf of Mexico,  directed
from offices in Lafayette,  Louisiana. The balance is derived from international
operations, including offshore West Africa, the Arabian Gulf and adjacent areas,
Southeast Asia and Mexico.  We also operate  offshore  energy support vessels in
other  regions,  including  Central and South America and, to a limited  extent,
Europe.  Operations in the Arabian Gulf,  Southeast  Asia and adjacent areas are
directed from facilities in Dubai, United Arab Emirates;  operations in offshore
West Africa and certain other  international  areas are directed from facilities
in Nyon, Switzerland;  and operations in Mexico are directed from our Lafayette,
Louisiana  facilities.  We also have sales offices and/or  maintenance and other
facilities in many of the countries where our vessels operate.

         The following table shows the deployment of our offshore energy support
fleet at March 1, 2001.

                          Location                                Vessels
                          --------                                -------
          Domestic Offshore Energy Support
            U.S. Gulf of Mexico                                      57
            Mexico                                                    3
            Other                                                     3
                                                                   ----
              Total Domestic Offshore Energy Support                 63
                                                                   ----

          International Offshore Energy Support
            Middle East                                              51
            West Africa                                              31
            Southeast Asia                                           20
            Other                                                     5
                                                                   ----
              Total International Offshore Energy Support           107
                                                                   ----
                Total                                               170
                                                                   ====

         The average age of our offshore  energy support  vessels,  based on the
later of the date of construction or rebuilding,  is approximately 19 years, and
approximately  40.0% of them are more than 20 years old. After a vessel has been
in service for approximately 30 years, the costs of repair, vessel certification
and maintenance may not be economically justifiable.

         (2) Marine Transportation

         We provide marine  transportation  services,  principally for petroleum
products and specialty  chemicals,  in the U.S. domestic or "coastwise" trade, a
market largely  insulated from  international  competition  under the Jones Act.
Marine transportation includes our ten tankers, five of which are double-hulled,
and our inland tug-and-barge  operation,  Sun State Marine Services. This is our
second  largest  business,  accounting  for  approximately  43.0%  of our  total
revenues in 2000.

         Petroleum Product Transportation. In the domestic energy transportation
trade, oceangoing and inland-waterway vessels transport fuel and other petroleum
products,  primarily from refineries and storage  facilities  along the coast of
the U.S.  Gulf of Mexico to  utilities,  waterfront  industrial  facilities  and
distribution  facilities along the U.S. Gulf of Mexico, the Atlantic and Pacific
coasts and inland rivers. The inventory of U.S.-flag oceangoing vessels eligible
to participate in the U.S.  domestic trade and capable of  transporting  fuel or
petroleum  products has steadily  decreased  since 1980, as vessels have reached
the end of their useful lives and the cost of constructing vessels in the United
States (a requirement for U.S. domestic trade  participation)  has substantially
increased.

         At March 1, 2001 we operated the following petroleum product carriers:
<TABLE>
<CAPTION>

                                                                                     Tonnage (in dead
              Name of Vessel                Capacity (in barrels)                  weight tons or "dwt")
              --------------                ---------------------                 ----------------------
<S>                                     <C>                                       <C>
         HMI Dynachem                               360,000                             49,900
         HMI Petrochem                              360,000                             49,900
         HMI Ambrose Channel                        341,000                             45,000
         HMI Cape Lookout Shoals                    340,000                             46,000
         HMI Diamond Shoals                         340,000                             46,000
         HMI Nantucket Shoals                       340,000                             46,000
         HMI Defender                               260,000                             36,600
</TABLE>


         The HMI Ambrose Channel,  HMI Cape Lookout Shoals,  HMI Diamond Shoals,
and  HMI  Nantucket  Shoals  are  four of our  five  new  double-hull  carriers.
Delivered in 1998 (HMI Cape Lookout Shoals, HMI Diamond Shoals and HMI Nantucket
Shoals) and 1999 (HMI Ambrose  Channel,  which is also  capable of  transporting
chemicals),  these are the  newest  and most  technologically  advanced  product
carriers in the Jones Act market.  We own a 100.0%  equity  interest in the five
carriers.  The fifth  double-hull,  HMI  Brenton  Reef,  is listed  below  under
chemical carriers.

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

         Our petroleum  product  carriers operate under short-term spot charters
or longer-term charters,  depending upon market conditions.  Cape Lookout Shoals
began a  three-year  charter  commencing  in the  second  quarter of 2000 with a
subsidiary of Tesoro Petroleum  Corporation to transport crude oil and petroleum
products in Alaska and other locations.

         Chemical  Transportation.  In the U.S. domestic chemical transportation
trade, vessels carry chemicals, primarily from chemical manufacturing plants and
storage tank facilities along the coast of the U.S. Gulf of Mexico to industrial
users in and around Atlantic and Pacific coast ports. The chemicals  transported
consist primarily of caustic soda, alcohol,  chlorinated  solvents,  paraxylene,
alkylates,  toluene,  methyl  tertiary butyl ether (MTBE),  phosphoric  acid and
lubricating  oils.  Coastwise  chemical  tonnage  demand has increased in recent
years as a result of the general  expansion of the U.S.  economy and as gasoline
additives have begun to move coastwise.  Some of the chemicals  transported must
be carried in vessels with specially coated or stainless steel cargo tanks; many
of them are very sensitive to contamination  and require special  cargo-handling
equipment.

         At March 1, 2001, we operated three vessels in the chemical trade:

<TABLE>
<CAPTION>

                                                                               Tonnage (in dead
             Name of Vessel           Capacity (in barrels)                 weight tons or "dwt")
             --------------           ---------------------                 ---------------------
<S>                                <C>                                    <C>
         HMI Brenton Reef                   341,000                             45,000
         Seabulk Magnachem                  298,000                             39,300
         Seabulk America                    297,000                             46,300
</TABLE>


         Delivered in 1999, the HMI Brenton Reef is a new double-hull carrier in
which we have a 100.0% equity interest. We operate the Seabulk Magnachem under a
bareboat  charter  expiring in February 2002. We have both a purchase  option at
fair market  value and yearly  extension  options at fair market value under the
bareboat  charter.  We own a 67.0% equity interest in the Seabulk  America;  the
remaining 33.0% interest is owned by Stolt Tankers (U.S.A.), Inc.

         The Seabulk  Magnachem and Seabulk America have full double bottoms (as
distinct from double hulls).  Double bottoms provide  increased  protection over
single-hull vessels in the event of a grounding.  Delivered in 1977, the Seabulk
Magnachem is a CATUG (or catamaran tug)  integrated tug and barge, or ITB, which
has a higher level of dependability,  propulsion efficiency and performance than
an ordinary tug and barge.  Delivered in 1990,  the Seabulk  America is the only
vessel in the U.S.  domestic trade capable of carrying large cargoes of acid, as
a result of its large  high-grade alloy stainless steel tanks, and the only such
vessel  strengthened  to carry  relatively  heavy cargoes such as phosphoric and
other  acids.  The Seabulk  America's  stainless  steel  tanks were  constructed
without   internal   structure,   which  greatly   reduces  cargo  residue  from
transportation  and results in less cargo  degradation.  Stainless  steel tanks,
unlike  epoxy-coated  tanks,  also  do not  require  periodic  sandblasting  and
recoating.

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

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

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

         We book cargoes either on a spot  (movement-by-movement) or time basis.
Approximately  75.0% of contracts  for cargo 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.  We are often able to  generate  additional
revenues by chartering cargo space on competitors' vessels.

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

         The   majority  of  Sun  State's   revenue  is  derived   from  a  fuel
transportation contract with Steuart Petroleum Company ("Steuart"), in which Sun
State is responsible for handling all marine deliveries  including the servicing
of Steuart's paper mill, electric utility and vessel bunker customers. Sun State
renewed  the  contract  with  Steuart on January 31, 2001 for four years with an
additional  seven-year  renewal  option.  This renewal  option is  contingent on
Steuart's  ability to renew a related  contract.  The  remainder  of Sun State's
marine  transportation  revenue is derived from fuel  transportation  and towing
contracts  with  other  customers  along with its  marine  maintenance,  repair,
drydocking and construction facility.

         OPA 90 requires all  single-hull  barges,  including those owned by Sun
State, to discontinue  transporting  fuel and other petroleum  products in 2015.
Eight of Sun State's 14 barges are single-hulled.

Other Services

         Sun State also owns and operates a small vessel maintenance, repair and
construction  drydocking  facility  in Green  Cove  Springs,  Florida,  which is
engaged  principally in the  maintenance  and  construction  of tugs and barges,
offshore support vessels,  and other small vessels.  The lease for the facility,
including  optional  renewals,  expires  in 2005.  This  facility  is capable of
drydocking  vessels up to 300 feet in length  for  repair and can make  dockside
repairs on vessels up to 320 feet in length.  Since 1994,  when we acquired  Sun
State,  the  facility  has been  utilized to overhaul or rebuild a number of our
harbor tugs and offshore energy support vessels.  It also services vessels owned
by  others.  The  facility  (originally  a  U.S.  government  naval  repair  and
operations  station) has covered  steel  fabrication  facilities,  workshops and
office spaces adjacent to a 1,840-foot finger pier and mooring basins, where the
facility's three floating drydocks are located. Sun State also maintains another
yard,  primarily  for use in new  construction  projects  and vessels  requiring
long-term  repairs.  The  yard has a  marine  railway  capable  of  lifting  and
launching  vessels  weighing  up to 600 tons,  and a 600-foot  finger  pier with
adjacent covered steel fabrication facilities, workshops and office space.

         We also own a 40-acre  facility in Port Arthur,  Texas that serves as a
regional office,  storage and supply base, and a facility for topside repairs of
ocean going vessels.

         (3) Towing

         Towing is the  smallest  of our three  businesses,  representing  about
10.0% of our total  revenues.  Our harbor  tugs serve  seven  ports in  Florida,
Alabama,  Texas and Louisiana,  where they assist  petroleum  product  carriers,
barges,  container  ships,  other cargo  vessels and cruise ships in docking and
undocking and in proceeding  within the port areas and harbors.  We also operate
three tugs with offshore towing  capabilities that conduct a variety of offshore
towing services in the Gulf of Mexico, Guayanilla, Puerto Rico, and the Atlantic
Ocean.  Our tug fleet consists of 20 conventional  tugs, seven tractor tugs, and
four Ship Docking Modules(TM),  known as SDMs(TM).  SDMs(TM) are innovative ship
docking  vessels,  designed  and  patented  by us,  that are more  maneuverable,
efficient and flexible, and require fewer crew members, than conventional harbor
tugs.

         Harbor Tug Operations.  In most U.S. ports, competition is unregulated.
However,  a few ports grant  non-exclusive  franchises to harbor tug  operators;
these  include  Port  Canaveral  and  Port  Everglades,  Florida,  where  we are
currently the sole franchisee,  and Port Manatee (near Tampa), Florida, where we
are  currently  a  leading  provider  of  commercial  tug  services.  Rates  are
unregulated  in all ports that we serve,  including the franchised  ports.  Each
port is generally a distinct market for harbor tugs, even though harbor tugs can
be moved from port to port.

         Port  Everglades.  Port  Everglades  has the second  largest  petroleum
         ----------------
non-refining  storage and  distribution  center in the United States,  providing
substantially all of the petroleum products for South Florida.  Since 1958, when
our tug  operations  commenced,  we have  operated  the  franchise  as the  sole
provider of docking services in the port. The franchise  specifies,  among other
things, that four tugs serve the port with a fifth available if needed, and that
three be less than 90 feet in length  because of the  narrowness of slips in the
port, and that tugs have firefighting capability. The franchise is not exclusive
and expires in 2007. While we are regarded as a high-standard operator, there is
no assurance that it will be renewed. At March 1, 2001, we operated five tugs in
Port Everglades and were the port's sole provider of harbor towing services.

         Tampa.  We expanded  our harbor  towing  services to Tampa  through the
         -----
October 1997  acquisition  of an established  operator in the port.  Because the
port is comprised of three  "sub-ports"  (including  Port Manatee) and a distant
sea buoy, a greater  number of tugs is required to be a competitive  operator in
Tampa than in other ports of similar size. At March 1, 2001, we operated 8 tugs,
including  two  tractor  tugs  and two  SDMs(TM),  in the port  (including  Port
Manatee).  We were the sole harbor tug operator in the port until  October 1999,
when another  company began  operations  in the port.  We currently  maintain an
approximate 70.0% market share in Tampa.

         Port Canaveral.  In Port Canaveral,  like Port Everglades,  we have the
         --------------
sole  franchise to provide  harbor  docking  services.  In this port, we provide
docking and undocking  services for  commercial  cargo vessels  serving  central
Florida  and  for  cruise  ships  visiting  the  Orlando/Kennedy   Space  Center
attractions. Our franchise can be canceled with 60 days notice, and there can be
no assurance that we will be able to retain our franchise in Port Canaveral.  At
March 1, 2001, we operated four tugs in Port  Canaveral and were the port's sole
provider of harbor towing services.

         Mobile.  At this  port,  we  provide  docking  and  undocking  services
         ------
primarily to commercial cargo vessels,  including vessels  transporting coal and
other bulk  exports.  We believe  that we provide  about 50.0% of the harbor tug
business in this port, where we operated three tugs at March 1, 2001.

         Port Arthur and Lake  Charles.  At these ports we operate  eight harbor
         -----------------------------
tugs.  Currently,  five of these tugs serve Port Arthur,  Texas;  two serve Lake
Charles,  Louisiana,  and one serves  both  harbors.  Each of these  ports has a
competing provider of harbor tug services.  We estimate our market share in both
ports at 50.0%.

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

Customers and Charter Terms

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

         The primary purchasers of petroleum product transportation services are
utilities, oil companies, and large industrial consumers of fuel with waterfront
facilities.  The primary  purchasers  of chemical  transportation  services  are
chemical and oil  companies.  Both services are generally  contracted for on the
basis of short- or  long-term  time  charters,  voyage  charters,  contracts  of
affreightment,  or other  transportation  agreements  tailored to the  shipper's
requirements.  CITGO,  which  accounted  for  12.0%  of our  2000  revenues,  is
currently  our  largest  single  customer  with  a  contract  of   affreightment
commitment  utilizing up to three  tankers of their  choosing  through  December
2001.

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

         On a segment basis in 2000,  National  Petroleum  Construction  Company
(NPCC)  accounted  for  6.3% of our  offshore  energy  support  revenues;  CITGO
accounted for 28.4%,  ARCO Products for 10.0%, and SeaRiver  Maritime for 10.0%,
respectively, of our marine transportation services revenues; Oceanografia, S.A.
accounted for 5.7% of our towing revenues.

Competition

         We operate in a highly  competitive  environment in all our operations.
The principal competitive factors in each of the markets in which we operate are
suitability  and  reliability  of equipment,  safety record,  personnel,  price,
service,  and  reputation.  Competitive  factors in the offshore  energy support
segment also include operating conditions and intended vessel use (both of which
determine the suitability of vessel type), shallow water versus deepwater needs,
the complexity of maintaining  logistical  support and the cost of  transferring
equipment  from  one  market  to  another.   Our  vessels  that  provide  marine
transportation  services  compete with both other vessel  operators and, in some
areas and markets, with alternative modes of transportation,  such as pipelines,
rail tank  cars,  and tank  trucks.  Moreover,  the users of such  services  are
placing increased emphasis on safety, the environment and quality, partly due to
heightened   liability   for  the  cargo   owner  in   addition  to  the  vessel
owner/operator  under OPA 90. With  respect to towing  services,  we compete not
only with other providers of tug services in the ports in which we operate,  but
with the providers of tug services in nearby ports. Many of our competitors have
substantially greater financial and other resources than we do. A new competitor
entered the harbor tug market in Tampa in 1999, and additional  competitors  may
enter our  markets  in the  future.  Moreover,  should  U.S.  coastwise  laws be
repealed,  foreign-built,  foreign-manned  and  foreign-owned  vessels  could be
eligible to compete with our vessels operating in the domestic trade.

Environmental and Other Regulation

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

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

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

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

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

         For  facilities,  the  statutory  liability of  responsible  parties is
limited  to  $350.0  million.  For tank  vessels,  the  statutory  liability  of
responsible  parties is limited to the  greater of $1,200 per gross ton or $10.0
million ($2.0 million for a vessel of 3,000 gross tons or less) per vessel;  for
any "other  vessel," such  liability is limited to the greater of $600 per gross
ton or $500,000 per vessel.  Such liability limits do not apply,  however, to an
incident  proximately  caused by violation of federal  safety,  construction  or
operating  regulations or by the responsible party's gross negligence or willful
misconduct,  or if the responsible party fails to report the incident or provide
reasonable  cooperation and assistance as required by a responsible  official in
connection with oil removal  activities.  Although we currently maintain maximum
available  pollution liability  insurance,  a catastrophic spill could result in
liability in excess of  available  insurance  coverage,  resulting in a material
adverse effect on our business.

         Under OPA 90,  with  certain  limited  exceptions,  all newly  built or
converted  oil  tankers  operating  in United  States  waters must be built with
double hulls, and existing  single-hull,  double-side or  double-bottom  vessels
must be phased out at some point,  depending  upon their size,  age and place of
discharge,  through 2015 unless  retrofitted  with double hulls.  As a result of
this  phase-out  requirement,  as  interpreted  by the  U.S.  Coast  Guard,  our
single-hull  chemical and petroleum  product  carriers will be required to cease
transporting petroleum products over the next 14 years, and our "single-skinned"
fuel barges will cease transporting fuel in 2015.

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

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

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

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

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

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

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

         Clean Air Regulations. The federal Clean Air Act of 1970, as amended by
the Clean Air Act Amendments of 1990,  requires the EPA to promulgate  standards
applicable  to  the  emission  of  volatile  organic  compounds  and  other  air
pollutants.  Our vessels are subject to vapor control and recovery  requirements
when loading, unloading, ballasting, cleaning and conducting other operations in
certain  ports.  Our chemical and petroleum  product  carriers are equipped with
vapor control systems that satisfy these  requirements.  The fuel barges are not
equipped  with,  and are not operated in areas that require,  such  systems.  In
addition,  it is anticipated that the EPA will issue regulations  addressing air
emission requirements  applicable to marine engines.  Adoption of such standards
could require modifications to existing marine diesel engines in some cases.

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

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

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

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

         Oil Tanker  Escort  Requirements.  Implementation  of oil tanker escort
requirements  of OPA 90 and pending state  legislation are expected to introduce
certain  performance or  engineering  standards on tugs to be employed as tanker
escorts. We believe our tractor tugs will be able to comply with any existing or
currently  anticipated  requirements  for  escort  tugs.  Adoption  of such  new
standards could require  modification or refitting of the  conventional  tugs we
currently operate to the extent they are employed as tanker escorts.

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

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

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

Insurance

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

Employees

         As of March 1,  2001,  we had  2,604  employees.  Management  considers
relations with  employees to be  satisfactory.  The Seabulk  America and Seabulk
Magnachem  are manned by  approximately  80 officers and crew who are subject to
two  collective  bargaining  arrangements  that expire on December  31, 2003 and
2001, respectively.  In addition, the HMI Dynachem, HMI Petrochem, HMI Defender,
the five new  double-hull  carriers,  and  thirty-one  harbor tugs are manned by
approximately  418  members  of  national   maritime  labor  unions.   The  five
double-hull  carriers are crewed by a third party  employer until June 21, 2001,
at which  time the  Company  will  assume  crewing  responsibility  for all five
vessels.

Item 2.  Properties

         The  Company's  principal  offices  are  located  in  Fort  Lauderdale,
Florida, where the Company leases approximately 36,000 square feet of office and
shop space under a lease expiring in 2009.  The Company owns a 40-acre  facility
in Port Arthur,  Texas that serves as a regional  office and includes 1,200 feet
of dock space. The Company also leases office and other facilities in Lafayette,
Louisiana;  Green Cove Springs,  Florida;  the United Arab  Emirates;  and Nyon,
Switzerland.  In addition,  the Company leases sales offices and/or  maintenance
and other  facilities in many of the locations  where its vessels  operate.  The
Company  believes that its  facilities  are  generally  adequate for current and
anticipated  future  use,  although  the  Company may from time to time close or
consolidate facilities or lease additional facilities as operations require.

Item 3.  Legal Proceedings

         Under United States law,  "United States  persons" are prohibited  from
performing contracts in support of an industrial,  commercial, public utility or
governmental  project in the Republic of Sudan, or facilitating such activities.
During  several  months in 1999,  three  vessels  owned by  subsidiaries  of the
Company  performed  services for third parties in support of energy  exploration
activities in Sudan; one of these vessels  performed such services until January
31, 2000. The Company has filed a report of these  activities with the Office of
Foreign  Asset Control of the United  States  Department  of the  Treasury.  The
Company  had  also   reported   these   activities   to  the  Bureau  of  Export
Administration of the U.S. Department of Commerce. Should either of the agencies
determine  that  these  activities   constituted   violations  of  the  laws  or
regulations  administered by them,  civil and/or criminal  penalties,  including
fines,  could be assessed  against the Company  and/or certain  individuals  who
knowingly  participated in such  activities.  The Company cannot predict whether
any such penalties will be imposed or the nature or extent of such penalties.

         In J. Erik Hvide and Betsy  Hvide v.  Hvide  Marine  Incorporated,  No.
5640-02,  a civil  action  filed in March 2000 in the  Circuit  Court of Broward
County,  Florida,  the  Company's  former chief  executive  officer and his wife
alleged  that the Company had  breached an  agreement  to provide Mr. Hvide with
severance  benefits valued at approximately $1.0 million.  In addition,  Mr. and
Mrs. Hvide alleged that the Company engaged in conduct  calculated to cause them
emotional  and public  humiliation  for which they sought  unspecified  punitive
damages. In January 2001, the Company and Mr. and Mrs. Hvide settled the lawsuit
for an amount which the Company does not believe to be material.

         From time to time the  Company is also party to  litigation  arising in
the  ordinary  course of its  business,  most of which is covered by  insurance,
subject  to  certain  deductibles.  We do  not  believe  such  litigation  to be
material.

Item 4.  Submission of Matters to a Vote of Security Holders.

         None.

Item 4A.  Executive Officers of the Registrant

         The executive officers of the Company are:

<TABLE>
<CAPTION>

                   Name                Age              Current Positions
                   ----                ---              -----------------
<S>                                 <C>      <C>
       Gerhard E. Kurz                 61    President & Chief Executive Officer
       J. Stephen Nouss                46    Senior Vice President & Chief Financial Officer
       Alan R. Twaits                  53    Senior Vice President, General Counsel & Secretary
       Andrew W. Brauninger            54    Senior Vice President - Offshore
       William R. Ludt                 53    Senior Vice President - Towing
       John J. O'Connell, Jr.          57    Senior Vice President - Corporate Communications and Investor
                                             Relations & Assistant Secretary
       L. Stephen Willrich             48    Senior Vice President - Marine Transportation
       A. Thomas Denning               46    Vice President - Engineering
       Kevin S. Boyle                  27    Treasurer
       Michael J. Pellicci             37    Controller
</TABLE>


         Mr. Kurz has been Chief Executive Officer and a director of the Company
since April 2000 and was  appointed  President  in September  2000.  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
promotions,  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  previously  served on the Board of Directors of the American
Bureau of  Shipping  and  chaired its  Finance  and  Nominating  Committees.  He
currently serves on the Boards of the Seamen's Church Institute, the Coast Guard
Foundation,  and the Newport News  Mariners'  Museum.  He is the Chairman of the
Massachusetts  Maritime Academy's  International Business Advisory Council and a
member of the International Advisory Board to the Panama Canal Authority.  He is
the  recipient  of  numerous  awards and  honors,  including  the  International
Maritime Hall of Fame Award, the 1999 SeaTrade  "Personality of the Year" award,
the Seamen's Church Institute Silver Bell Award, and the U. S. Coast Guard Award
and Medal for Meritorious Public Service.  He holds an Honorary Doctorate Degree
from Massachusetts Maritime Academy.

         Mr. Nouss has been Senior Vice  President and Chief  Financial  Officer
since  August  2000.   He  was   previously   Vice   President  of  Finance  and
Administration  for Certified  Vacations Group,  Inc. Prior to that he served on
the management  teams of two Fortune 500 companies - W. R. Grace & Co., where he
was Assistant Vice President,  and Ryder System, Inc., in International Finance.
He is a  Certified  Public  Accountant  and has 16  years of  public  accounting
experience  with Price  Waterhouse  LLP and Coopers & Lybrand  LLP. Mr. Nouss is
President-Elect of the Florida Institute of Certified Public Accountants; serves
on the Council for the American  Institute of CPAs, and is a former  Director of
the University of Florida  Athletic  Association,  Inc., where he also served as
Vice  President.  He is a past President of the Mental Health  Resource  Center,
Inc. and the University of Florida National Alumni Association.

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

         Mr. Brauninger has been Senior Vice President - Offshore Division since
August 1997. He was Vice President - Offshore Division from 1990 until July 1997
and has been President of Seabulk Offshore,  Ltd., the Company's offshore energy
services  subsidiary,  since  September  1994. He was Vice President of Offshore
Operations  from 1990 to September  1994 and Vice  President - Development  from
1989 to 1990.  From 1987 to 1989,  Mr.  Brauninger was President of OMI Offshore
Services,  Inc., an operator of offshore  service  vessels.  Previously,  he was
employed by Sabine Towing and Transportation Company, where he held a variety of
posts including Vice President - Harbor Division.

         Mr.  Ludt has been  Senior  Vice  President  -  Towing  Division  since
February  2000  and the  President  of Sun  State  Marine  Services,  Inc.,  the
Company's  inland  tug and barge  subsidiary  and  shipyard,  since  1994.  From
September 1998 to February 2000, he was managing  director of Seabulk  Offshore,
Ltd. He was  elected  Vice  President  of the  Company in January  1995.  He was
Director - Fleet  Operations of the Company from 1982 to 1994. Since joining the
Company in 1979,  he has also  served as Fleet  Manager  and Port  Engineer.  He
served as President of the Chemical  Carriers  Association from 1989 to 1990 and
as its Vice  President  from 1990 to 1992.  Mr.  Ludt has also served on various
working groups within the U.S. Coast Guard's  Chemical  Transportation  Advisory
Committee concerning issues such as vapor control and marine occupational safety
and health.  Mr. Ludt holds a dual  license as a Third Mate and Third  Assistant
Engineer, Steam and Motor Vessels.

         Mr. O'Connell has been Senior Vice President - Corporate Communications
and Investor Relations since January 2000 and Assistant Secretary since February
2000. He was elected Vice President - Corporate  Communications upon joining the
Company in August 1996. From September 1995 to August 1996 he was an independent
consultant.  Previously,  he served in a variety of management positions with W.
R. Grace & Co. for 20 years, most recently as Director of Public Affairs.  Prior
to that,  he was  Instructor  in English at George  Washington  University.  Mr.
O'Connell was a member of the President's  Private Sector Survey on Cost Control
in the Federal Government (Grace Commission) from 1982 to 1984.

         Mr.  Willrich has been Senior Vice  President - Tankers since June 2000
and  President of Ocean  Specialty  Tankers  Corporation  (OSTC),  the Company's
marine  transportation  subsidiary,  since March 1998,  when he was also elected
Vice President.  He was appointed  Senior Vice President of OSTC in August 1996.
He joined the Company as Vice  President of Chartering for OSTC in January 1988.
Prior to joining the Company,  Mr.  Willrich  was  employed by Diamond  Shamrock
Chemical  Company from 1975 to 1988,  where he rose to Division General Manager.
Prior to his service with Diamond  Shamrock,  he worked for Gulf Oil Corporation
as a Third Assistant  Engineer on various company  tankers.  He has more than 25
years of experience in the management of Jones Act product tankers.

         Mr. Denning has been Vice President - Engineering since August 1997. He
previously  served as Director of  Engineering of the Company from November 1994
to July 1997,  and as  Superintendent  Engineer from  September  1986 to October
1994.

         Mr. Boyle has been  Treasurer  since January  2000.  He was  previously
Director - Finance  and  Treasury.  He joined the Company as Manager - Corporate
Development  in March  1998.  Prior to that,  he served as an  Associate  in the
Investment  Banking  division  of  Parker/Hunter,  an  investment  bank based in
Pittsburgh.  Mr. Boyle graduated with a J.D. from the University of Pennsylvania
and a B.S. from Carnegie Mellon  University.  He is a member of the Pennsylvania
Bar and the American Bar Association.

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


<PAGE>



                                     PART II

Item 5.  Market for Registrant's Common Equity and Related Stockholder Matters

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

         In 1999,  the Class A Common  Stock of Hvide Marine  Incorporated  (the
predecessor  company) traded on the Nasdaq National Market under the symbol HMAR
until September 28, when it was delisted.  Between September 29 and December 15,
when the Company emerged from Chapter 11 under its Plan of  Reorganization,  the
Class A Common Stock traded on the OTC  Bulletin  Board under the symbol  HMARQ.
Pursuant to the Plan of Reorganization, the Class A Common Stock was canceled as
of December 15, 1999, and shareholders  received Class A Warrants at the rate of
approximately one warrant for every 124 shares previously held.

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

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

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

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

         Common Stock
                                                             High         Low
                                                             ----         ---
         2001
            First Quarter (through March 1)............    $   9.06    $   7.75

         2000
            First Quarter .............................       16.00        9.75
            Second Quarter.............................       12.50        4.88
            Third Quarter..............................        8.25        5.44
            Fourth Quarter.............................       12.44        7.19

         1999
                           Predecessor Company
            First Quarter..............................        6.13        3.94
            Second Quarter.............................        3.50        1.59
            Third Quarter..............................        2.34        0.53
            Fourth Quarter (through December 15).......        0.47        0.11
                           Successor Company
            Fourth Quarter (after December 15).........          --          --



<PAGE>



         Class A Warrants
                                                             High         Low
                                                             ----         ---
         2001
            First Quarter (through March 1)............    $   3.00    $   0.38

         2000
            First Quarter .............................        5.00        0.25
            Second Quarter.............................        3.50        1.50
            Third Quarter..............................        2.75        1.75
            Fourth Quarter.............................        4.00        0.38

         1999
            Fourth Quarter (after December 15).........          --          --

         As of March 1, 2001 there were 284  holders of record of the  Company's
Common Stock.

Item 6.  Selected Financial Data.

         Upon emergence from its Chapter 11 proceeding the Company adopted Fresh
Start   Accounting,   see  "---  Fresh  Start  Reporting."  Thus  the  Company's
consolidated  balance  sheets and  statements of operations and cash flows after
the  Effective  Date reflect a new reporting  Company and are not  comparable to
periods prior to the Effective Date.

          The  financial  data  presented  below  include  the  results  of  the
Predecessor  Company for the periods through December 15, 1999 and the Successor
Company  for  the  periods  subsequent  to  December  15,  1999.  The  principal
differences  between these  periods  relate to reporting  changes  regarding the
Company's capital structure, changes in indebtedness, and the revaluation of the
Company's  long-term  assets to reflect  reorganization  value at the  Effective
Date.

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



<PAGE>


<TABLE>
<CAPTION>

                                                         Successor Company                               Predecessor Company
                                                                   Period from    Period from
                                                                   December 16     January 1
                                                     Year Ended          to            to
                                                    December 31,   December 31,   December 15,         Year Ended December 31,
                                                   -------------   ------------   ------------    ----------------------------------
                                                        2000            1999        1999(6)     1998(5)       1997          1996
                                                                                          (in thousands)
<S>                                               <C>             <C>          <C>           <C>          <C>          <C>

Consolidated Statement of Operations Data:
  Revenue.....................................       $   320,483   $    13,479   $   328,751  $  404,793  $  210,257    $  109,356
  Operating expenses..........................           205,226         8,047       212,753     213,601     104,933        60,720
  Overhead expenses...........................            39,630         1,643        47,814      43,179      24,791        14,979
  Depreciation, amortization and drydocking...            50,271         2,069        79,410      64,244      25,200        12,887
                                                     -----------   -----------   -----------  ----------  ----------    ----------
  Income (loss) from operations...............            25,356         1,720       (11,226)     83,769      55,333        20,770
  Interest expense, net(1)....................            62,010         2,688        70,374      41,238       7,024        11,631
  Other income (expense)......................            12,574          (597)      (32,129)     (5,692)     (3,704)          437
  Reorganization items(2).....................                --            --      (433,273)         --          --            --
                                                     -----------   -----------   -----------  ----------  ----------    ----------
  Income (loss) before income taxes and
     extraordinary item.......................           (24,080)       (1,565)     (547,002)     36,839      44,605         9,576
  Provision for (benefit from) income taxes...             4,872            --       (32,004)     13,489      16,950         3,543
                                                     -----------   -----------   -----------  ----------  ----------    ----------
  Income (loss) before extraordinary item.....           (28,952)       (1,565)     (514,998)     23,350      27,655         6,033
  Gain (loss) on extinguishment of debt(3)....                --            --       266,643      (1,602)     (2,132)       (8,108)
                                                     -----------   -----------   -----------  ----------  ----------    ----------
  Net income (loss)...........................       $   (28,952)  $    (1,565)  $  (248,355) $   21,748  $   25,523    $   (2,075)
                                                     ===========   ===========   ===========  ==========  ==========    ==========
  Diluted earnings (loss) per common share:
     Income (loss) before extraordinary item..       $    (2.89)   $     (0.16)  $    (33.22) $     1.43  $     1.75    $     0.99
                                                     ==========    ===========   ===========  ==========  ==========    ==========
     Net income (loss)........................       $    (2.89)   $     (0.16)  $    (16.02) $     1.35  $     1.63    $    (0.24)
                                                     ===========   ===========   ===========  ==========  ==========    ===========
     Weighted average number of shares and
       common equivalent shares outstanding...            10,034        10,000        15,503      19,451      17,120         6,590
                                                     ===========   ===========   ===========  ==========  ==========    ==========
  Other Financial Data:
     EBITDA(4)................................       $    75,627   $     3,789   $    68,184  $  148,013  $   80,533    $   33,657
                                                     ===========   ===========   ===========  ==========  ==========    ==========
Consolidated Statement of Cash Flows Data:
  Net cash provided by (used in):
     Operating activities.....................       $    26,276   $     2,561   $    14,927  $   90,853  $   42,596    $  23,140
     Investing activities.....................             2,228        (3,021)      (14,862)   (525,652)   (263,897)     (84,910)
     Financing activities.....................           (33,317)       (1,491)       10,826     429,550     226,636       68,337
</TABLE>




<PAGE>


<TABLE>
<CAPTION>

                                                        Successor Company                    Predecessor Company
                                                   ----------------------------  ------------------------------------------
                                                                              As of December 31,
                                                   ------------------------------------------------------------------------
                                                        2000        1999(5)(6)       1998(5)         1997          1996
                                                   ------------   ---------------------------   ------------  -------------
<S>                                                <C>            <C>            <C>            <C>           <C>
Consolidated Balance Sheet Data:
  Working capital (deficit)...................         $   8,686  $      33,498  $   (216,802)  $     25,790  $     (8,704)
  Total assets................................           775,476        830,740     1,355,267        604,561       273,473
  Total long-term obligations.................           544,870        582,364       631,416        217,217       124,454
  Convertible preferred securities of a
     subsidiary trust.........................                --             --       115,000        115,000            --
  Stockholders' equity........................           136,514        165,326       248,035        224,987       101,091

</TABLE>


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

(1)Interest  expense for the period from  January 1, 1999  through  December 15,
   1999  excludes  $8.8  million of  contractual  interest  that was not accrued
   during  the  Company's  Chapter  11  proceeding.  See Notes to the  Company's
   consolidated financial statements.
(2)Reorganization   items  are  comprised  of  items  directly  related  to  the
   Predecessor  Company's  Chapter  11  proceeding.  See Notes to the  Company's
   consolidated financial statements.
(3)Reflects gains and losses on the  extinguishment  of debt,  net of applicable
     income  taxes  of $413,  $1,252,  and  $1,474,  in 1998,  1997,  and  1996,
     respectively.
(4)EBITDA (net income from continuing operations before interest expense, income
     tax  expense,   depreciation  expense,   amortization   expense,   minority
     interests, and other non-operating income) is frequently used by securities
     analysts and is presented here to provide additional  information about the
     Company's EBITDA operations. EBITDA is not recognized by generally accepted
     accounting  principles,  should not be considered as an  alternative to net
     income as an  indicator of the  Company's  operating  performance  or as an
     alternative  to cash flows from  operations as a measure of liquidity,  and
     does not represent  funds  available for  management's  use.  Further,  the
     Company's  EBITDA  may  not be  comparable  to  similarly  titled  measures
     reported by other companies.
(5)Reflects  the  acquisition  of a 50.0%  ownership  interest  in 1998,  and an
     additional  25.0% interest in 1999, of five newly  constructed  double-hull
     tankers. See Notes to the Company's consolidated financial statements.
(6)  Reflects the Chapter 11  reorganization  and the application of fresh-start
     accounting. See Notes to the Company's consolidated financial statements.




<PAGE>



Item 7.  Management's Discussion and Analysis of Financial Condition and Results
         of Operations

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

         On December 15, 1999 (the "Effective  Date"),  the Company emerged from
its Chapter 11 proceeding and adopted Fresh Start Accounting. Thus the Company's
balance  sheets and  statements of operations and cash flows after the Effective
Date reflect a new reporting  Company and are not comparable to periods prior to
the Effective Date.

         For purposes of comparative analysis,  the twelve months ended December
31,  1999  include the  results of the  Predecessor  Company for the period from
January 1, 1999 to December 15, 1999,  and the Successor  Company for the period
from December 16, 1999 to December 31, 1999. The principal  differences  between
these  periods  relate to reporting  changes  regarding  the  Company's  capital
structure,  changes  in  indebtedness,  and  the  revaluation  of the  Company's
long-term  assets to reflect the  reorganization  value at the  Effective  Date.
These  changes  primarily  affect  depreciation  and  amortization  expense  and
interest expense in the Company's results of operations.

Revenue Overview

         The Company  derives  its  revenue  from three main lines of business -
offshore energy support,  marine  transportation,  and towing. Seabulk Offshore,
the Company's  domestic and  international  offshore  energy  support  business,
accounted  for   approximately   47.0%  of  Company  revenues  in  2000.  Marine
transportation  under the new name Seabulk Tankers consists of (1) the Company's
Jones Act tanker  business,  in which it  operates  ten  petroleum  product  and
chemical  carriers  in the  coastwise  trade,  and (2) its  inland tug and barge
operation and shipyard, Sun State Marine Services.  Together, they accounted for
approximately  43.0% of Company revenues in 2000.  Seabulk Towing, the Company's
domestic harbor and offshore towing business,  accounted for approximately 10.0%
of the Company's 2000 revenues.

Offshore Energy Support

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

         The following table represents revenues for the Offshore Energy Support
by major operating area as of December 31 (in thousands):

<TABLE>
<CAPTION>

                                                    2000            1999            1998
                                               -------------   -------------   -------------
<S>                                            <C>             <C>             <C>
Domestic(1)...............................     $      54,491   $      50,188   $      90,979
West Africa...............................            48,268          46,953          69,736
Middle East...............................            34,242          40,335          55,878
Southeast Asia............................            14,394          12,836          26,062
                                               -------------   -------------   -------------
  Total Offshore Revenues.................     $     151,395   $     150,312   $     242,655
                                               =============   =============   =============
</TABLE>

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

<PAGE>



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

                 -------------------------------------------------------------------------------------------------------------------
                         Q1 2000                       Q2 2000                       Q3 2000                     Q4 2000
                 AHTS/  AHT/   Crew/          AHTS/  AHT/    Crew/          AHTS/  AHT/    Crew/          AHTS/  AHT/  Crew/
                 Supply  Tugs  Utility Other  Supply  Tugs   Utility Other  Supply  Tugs   Utility Other  Supply Tugs  Utility Other
                 -------------------------------------------------------------------------------------------------------------------
<S>           <C>      <C>      <C>    <C>   <C>     <C>   <C>      <C>    <C>   <C>     <C>     <C>     <C>    <C>   <C>   <C>
Domestic(1)
Vessels(2)(3)      25      -      33      2     26       -     33       2     26       -     31       2     26     -     32     2

Bareboat-out(4)     -      -       6      1      -       -      2       1      -       -      2       1      -     -      2     1

Laid-Up             3      -       1      2      5       -      2       2      3       -      -       2      2     -      -     2
Effective
Utilization(5)    80%      -     79%      -    79%       -    81%       -    76%       -    86%       -    68%     -    86%     -
Fleet
Utilization(5)    74%      -     76%      -    67%       -    76%       -    67%       -    86%       -    62%     -    86%     -
                                                                           $
Day Rate       $3,663      -  $1,894      - $4,024       - $1,921       -  4,821       - $2,117       - $6,174     - $2,403     -


West Africa
Vessels(3)         24      4       5      1     25       4      5       1     26       4      6       1     26     4      6     1
Laid-Up             2      1       1      1      2       1      1       1      1       2      1       1      1     2      1     1
Effective
Utilization(5)    85%    57%     53%      -    83%     60%    59%       -    85%     81%    62%       -    87%   95%    84%     -
Fleet
Utilization(5)    79%    43%     44%      -    76%     45%    48%       -    82%     44%    51%       -    83%   48%    70%     -

 Day Rate      $5,304 $4,289  $2,450      - $5,618  $5,200 $2,460       - $5,887  $5,122 $2,809       - $5,820 $5,103$2,978     -


Middle East
Vessels(6)(7)      24     21      29      8     21      21     29       8     18      21     24       8     12    16     19     8
Laid-Up            10      5      15      -     10       5     12       -     10       6     12       -      6     5      8     -
Effective
Utilization(5)    62%    72%     69%    69%    83%     74%    61%     70%    83%     50%    61%     55%    69%   45%    63%   55%
Fleet
Utilization(5)    36%    54%     38%    69%    45%     55%    36%     70%    39%     35%    31%     55%    36%   31%    34%   55%

 Day Rate      $2,899 $2,809  $1,373 $6,988 $2,995  $2,960 $1,446  $6,302 $2,634  $3,345 $1,483  $5,510 $3,544 $3,841$1,543 $5,669


Southeast Asia
Vessels             9      2       5      2      9       2      5       2     10       2      5       2     10     2      5     2
Laid-Up             3      -       -      1      2       1      -       -      2       1      -       -      2     1      -     -
Effective
Utilization(4)    49%     7%     46%    33%    90%     96%    66%     85%    85%     60%    69%     83%    68%   41%    83%   61%
Fleet
Utilization(4)    38%     7%     46%    17%    70%     48%    66%     85%    73%     30%    69%     83%    55%   21%    83%   61%

 Day Rate      $4,031 $8,516  $1,540 $8,086 $4,358  $4,569 $1,549  $5,268 $3,765  $7,364 $1,330  $5,474 $5,380 $4,775$1,655 $5,085
</TABLE>



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

(1)  Domestic consists of vessels operating in the United States,  the U.S. Gulf
     of Mexico, Mexico, the Caribbean, and South America.
(2)  One vessel was sold in Q4 2000 from the  Crew/Utility  category.  Since she
     earned  substantial  revenues  during the quarter,  she was included in the
     statistics.
(3)  One  vessel  in the  Crew/Utility  category  changed  reporting  area  from
     Domestic to West Africa after Q2 2000. The statistics reflected this move.
(4)  Bareboat-out  chartered  vessels  are  not  included  in the day  rate  and
     utilization statistics.
(5)  Fleet  utilization  includes laid-up vessels of which 10 are being actively
     marketed for a sale in the Middle East and effective  utilization  excludes
     laid-up vessels.
(6)  As of March 1,  2001,  the  Company  sold one vessel  from the  AHTS/Supply
     category and two vessels from the Crew/Utility category.  These vessels are
     included in the Fleet Utilization as of December 31, 2000.
(7)  The Middle East Other and AHT/Tugs categories include a vessel that is in a
     50/50 joint venture and a 44-foot harbor tug,  respectively,  which are not
     included in the day rate and utilization statistics.



<PAGE>

<TABLE>
<CAPTION>

              -------------------------------------------------------------------------------------------------------------------
                       Q1 1999                       Q2 1999                       Q3 1999                     Q4 1999
               AHTS/  AHT/   Crew/          AHTS/  AHT/    Crew/          AHTS/  AHT/    Crew/          AHTS/  AHT/  Crew/
              Supply  Tugs  Utility Other  Supply  Tugs   Utility Other  Supply  Tugs   Utility Other  Supply Tugs  Utility Other
              -------------------------------------------------------------------------------------------------------------------
<S>           <C>      <C>      <C>    <C>   <C>     <C>   <C>      <C>    <C>   <C>     <C>     <C>     <C>    <C>   <C>   <C>
Domestic(1)
Vessels            25       -     35      2     24      -      34      3     25      -     34       2     25      -     34      2
Bareboat-out(2)     1       -      5      -      1      -       5      -      -      -      5       1      -      -      5      1
Laid-Up(3)          1       -      1      1      2      -       1      2      2      -      2       2      2      -      2      2
Effective
Utilization(4)    73%       -    68%    77%    81%      -     75%    50%    84%      -    78%    100%    83%      -    91%      -
Fleet
Utilization(4)    70%       -    66%    77%    74%      -     73%    33%    77%      -    73%     43%    77%      -    85%      -

Day Rate       $4,842       - $2,142 $5,765 $4,027      -  $1,881 $5,259 $3,392      - $1,755  $1,317 $3,520      - $1,823      -


West Africa
Vessels            24       4      5      1     25      4       5      1     24      4      5       1     24      4      5      1
Laid-Up             -       -      -      -      -      -       -      -      -      -      -       1      1      1      -      1
Effective
Utilization(4)    74%     89%    71%      -    61%    88%     44%    41%    52%    60%    49%       -    66%    67%    77%      -
Fleet
Utilization(4)    74%     89%    71%      -    61%    88%     44%    41%    52%    60%    49%       -    63%    50%    77%      -

Day Rate       $7,838  $6,414 $2,910      - $7,189 $5,508  $2,622 $5,218 $6,056 $5,094 $2,675       - $6,145 $4,734 $2,351      -


Middle East
Vessels(5)(6)      24      23     29     10     24     23      30      9     24     21     30       8     24     21     29      8
Laid-Up             5       2     12      1      7      2      13      -      8      4     13       -      8      5     13      -
Effective
Utilization(4)    53%     50%    87%    60%    46%    39%     74%    72%    47%    61%    70%     68%    44%    51%    78%    64%
Fleet
Utilization(4)    42%     46%    52%    54%    33%    36%     42%    72%    31%    49%    40%     68%    29%    38%    43%    64%

Day Rate       $4,127  $2,905 $1,385 $7,127 $3,382 $2,889  $1,364 $6,383 $3,308 $2,822 $1,407  $5,828 $3,304 $3,193 $1,629 $6,048


Southeast Asia
Vessels             9       2      4      2      9      2       4      2      9      2      4       2      9      2      5      2
Laid-Up             2       -      -      -      2      -       -      -      3      -      -       -      3      -      -      -
Effective
Utilization(4)    59%     73%   100%    39%    63%    40%    100%    76%    61%    54%    99%     50%    48%    37%    81%      -
Fleet
Utilization(4)    46%     73%   100%    39%    49%    40%    100%    76%    43%    54%    99%     50%    32%    37%    81%      -

Day Rate       $5,565  $5,308 $1,577 $5,029 $4,593 $7,042  $1,586 $7,079 $4,753 $6,546 $1,645  $4,295 $3,187 $8,227 $1,549      -
</TABLE>


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

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

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

(3)  One vessel in the Other category was laid-up during 1999 after her contract
     was terminated.  She continued to collect charter hire,  which was included
     in the day rate and utilization statistics.

(4)  Fleet  utilization  includes  laid-up  vessels  and  effective  utilization
     excludes laid-up vessels.

(5)  The Middle East AHTS/Supply  category  includes two vessels in Q1 1999 that
     were on  bareboat-out  charter.  They are not  included in the day rate and
     utilization statistics.

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


<PAGE>



<TABLE>
<CAPTION>

                -------------------------------------------------------------------------------------------------------------------
                        Q1 1998                       Q2 1998                       Q3 1998                     Q4 1998
                AHTS/  AHT/   Crew/          AHTS/  AHT/    Crew/          AHTS/  AHT/    Crew/          AHTS/  AHT/  Crew/
                Supply  Tugs  Utility Other  Supply  Tugs   Utility Other  Supply  Tugs   Utility Other  Supply Tugs  Utility Other
               -------------------------------------------------------------------------------------------------------------------
<S>           <C>      <C>      <C>    <C>   <C>     <C>   <C>      <C>    <C>   <C>     <C>     <C>     <C>    <C>   <C>   <C>
Domestic(1)
Vessels            28       -     42      3     28      -      42      4     26      -     40       4     25      -     38      4
Bareboat-out(2)     -       -      -      -      -      -       1      -      -      -      2       -      -      -      3      -
Laid-Up             -       -      -      -      -      -       -      -      -      -      -       -      -      -      -      -
Effective
Utilization(3)    85%       -    89%    93%    79%      -     91%    76%    54%      -    78%     95%    70%      -    83%    82%
Fleet
Utilization(3)    85%       -    89%    93%    79%      -     91%    76%    54%      -    78%     95%    70%      -    83%    82%
Day Rate       $8,264       - $2,348 $5,885 $8,378      -  $2,446 $5,824 $7,235      - $2,397  $5,957 $5,638      - $2,375 $6,027


West Africa
Vessels            21       5      3      1     21      5       3      1     21      5      3       1     24      5      5      1
Laid-Up             -       -      -      -      -      -       -      -      -      -      -       -      -      -      -      -
Effective
Utilization(3)    76%     92%    72%    66%    86%    92%     65%    80%    90%    78%    77%     65%    80%    92%    60%    36%
Fleet
Utilization(3)    76%     92%    72%    66%    86%    92%     65%    80%    90%    78%    77%     65%    80%    92%    60%    36%
Day Rate       $6,873  $4,453 $3,252 $6,976 $8,973 $6,625  $4,126 $6,952 $9,185 $6,844 $3,607  $6,048 $8,571 $5,986 $2,951 $6,801


Middle East
Vessels(4)         19      20     27      9     19     20      27      9     22     20     28       9     23     22     28      9
Laid-Up             -       -      -      -      -      -       -      -      -      -      -       -      -      -      -      -
Effective
Utilization(3)    54%     71%    69%    41%    72%    66%     73%    39%    81%    61%    67%     47%    61%    71%    63%    44%
Fleet
Utilization(3)    54%     71%    69%    41%    72%    66%     73%    39%    81%    61%    67%     47%    61%    71%    63%    44%
Day Rate       $3,596  $3,319 $1,303 $6,129 $4,136 $3,687  $1,362 $7,826 $3,393 $3,635 $1,449  $6,406 $3,883 $3,129 $1,398 $7,872


Southeast Asia
Vessels(5)         10       2      4      2     10      2       4      2      9      2      4       2      9      2      4      2
Laid-Up             -       -      -      -      -      -       -      -      -      -      -       -      -      -      -      -
Effective
Utilization(3)    76%     74%    83%    55%    83%    77%     99%    74%    79%    77%   100%     95%    85%    79%   100%    82%
Fleet
Utilization(3)    76%     74%    83%    55%    83%    77%     99%    74%    79%    77%   100%     95%    85%    79%   100%    82%
Day Rate       $5,343  $5,185 $1,557 $5,843 $7,041 $7,481  $1,590 $7,571 $6,296 $7,030 $1,592  $7,507 $6,645 $7,105 $1,570 $5,484
</TABLE>


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

(1)  Domestic consists of vessels operating in the United States,  the U.S. Gulf
     of Mexico, Mexico, the Caribbean, and South America.
(2)  Bareboat-out  chartered  vessels  are  not  included  in the day  rate  and
     utilization statistics.
(3)  Fleet  utilization  includes  laid-up  vessels  and  effective  utilization
     excludes laid-up vessels.
(4)  The Middle East Other and AHT/Tugs categories include a vessel that is in a
     50/50 joint venture and a 44-foot harbor tug,  respectively,  which are not
     included in the day rate and utilization statistics.
(5)  The  Southeast  Asia  AHTS/Supply  categoary in Q1 and Q2 1998 includes two
     vessels on bareboat-out charter.  These vessels are not included in the day
     rate and utilization statistics.

         As  indicated  in the above  tables,  average  day  rates for  Domestic
operating  area  improved  steadily  in 2000 due to  sharply  higher oil and gas
prices  and  a  resulting  increase  in  offshore   exploration  and  production
activities.  These  rates are now  approaching  levels  last  seen in 1998.  The
Company took delivery of a 1996-built,  152-foot  crewboat in the fourth quarter
of 2000 and expects  delivery of a similar vessel in the second quarter of 2001.
Demand for these larger  crewboats is increasing as  exploration  companies move
farther and farther offshore.

         Average day rates for the Company's fleet operated in overseas  markets
have steadily  rebounded,  with the  exception of the Middle East.  The rebound,
while not as dramatic as the Domestic,  was led by improved  performance in West
Africa  and,  to a lesser  extent,  Southeast  Asia.  The Middle  East  remained
depressed.  Continued  low  utilization  reflects  the large  number of  laid-up
vessels  (including  10 vessels  held for sale)  primarily  in the Middle  East.
Average day rates for the Company's  anchor handling tug supply and supply boats
at March 1, 2001 for Domestic,  West Africa, the Middle East, and Southeast Asia
were $7,100, $6,400, $2,600, and $5,000, respectively.

Marine Transportation

         Revenues from the Company's marine transportation  services are derived
principally  from the operations of petroleum  product and chemical  carriers in
the U.S.  Jones Act Trade,  and to a lesser  extent from  towboat and fuel barge
operations in Jacksonville, Florida.

         Petroleum Product Tankers.  Demand for petroleum product transportation
services is dependent both on the level of production  and refining,  as well as
consumer use of petroleum-based  products.  The Company operated seven petroleum
tankers at December 31, 2000. Four of the Company's petroleum tankers (including
one that is also a  chemical  carrier)  are  newly  built,  double-hull  vessels
delivered in late 1998 and the first half of 1999.

         Chemical   Tankers.   Generally,   demand   for   industrial   chemical
transportation  services coincides with overall economic  activity.  The Company
operated two chemical tankers and one multipurpose  vessel in the chemical trade
as  of  December  31,  2000.   This  tanker  is  a  newly  built,   double-hull,
state-of-the-art  vessel  delivered in the first half of 1999. The other two are
double-bottom ships.

         The Company's tanker fleet operates on either long-term voyage and time
charters  or pursuant  to  short-term  arrangements.  During  2000,  five of the
Company's tankers operated under long-term contracts.

         The  following  table sets forth the number of vessels and revenues for
the Company's chemical and product carriers:
<TABLE>
<CAPTION>

                                                                                     Year Ended December 31,
                                                                                2000(1)(4)      1999(2)(4)     1998(3)(4)
<S>                                                                           <C>            <C>            <C>
Number of vessels owned......................................................         10              11             11
Revenues (in thousands)......................................................   $126,670        $143,401        $98,930
</TABLE>


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

(1)  During 2000, the Company scrapped one tanker that was at the end of its OPA
     90-mandated useful life.
(2)  During  1999,  the  Company  took  delivery  of the final  two newly  built
     double-hull tankers,  scrapped one tanker that was at the end of its useful
     life,  and returned one tanker to the lessor  pursuant to the expiration of
     the lease.
(3)  During 1998, the Company acquired two tankers and took delivery of three of
     the newly built double-hull tankers.
(4)  Includes revenues from chartered in vessels of $9.7 million, $15.9 million,
     and $26.2 million in 2000, 1999, and 1998, respectively.

         Inland Tugs and Barges.  Revenue  from the  Company's  Sun State Marine
Services  subsidiary has been derived  primarily from contracts of affreightment
with Steuart Petroleum Co. and FPL that require the Company to transport fuel as
needed.  Revenue is also derived from Sun State's ship  construction  and repair
activities.  Revenues from these  operations  were $9.3 million in 2000 and $8.6
million in 1999.  The  increase  in revenue  was due  mainly to  increased  ship
construction  and repair activity in 2000 and a decline in revenues in 1999 from
the FPL contract.

Towing

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

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

                                                    Year Ended December 31,
                                           -------------------------------------
                                              2000        1999        1998

Number of tugs at end of period.............      33          37          41
Total towing revenue (in thousands).........$ 33,106    $ 42,959    $ 46,368

         Towing  revenues  declined  in  2000  due  mainly  to the  sale of five
vessels,  the  proceeds  from which were used to pay down debt.  The decrease in
revenues was also  partially due to increased  competition  in the Port of Tampa
and  lower  revenues  in Port  Everglades.  In  November  1999,  certain  of the
Company's former personnel began a competing harbor towing operation in the Port
of Tampa.  The Company took delivery of its fourth SDM(TM),  the Suwannee River,
during the year.  Revenues in 1999  reflected the sale of certain  underutilized
tugboats,  decreased offshore towing opportunities and less shipping activity in
ports served by the Company.

Overview of Operating Expenses and Capital Expenditures

         The Company's operating expenses are primarily a function of fleet size
and utilization.  The most significant  expense  categories are crew payroll and
benefits,  depreciation and  amortization,  fuel,  maintenance and repairs,  and
insurance.  During periods of decreased demand for vessels,  such as during 1999
and early 2000,  the Company  temporarily  ceases using certain  vessels,  i.e.,
stacks, to minimize  investments in marine operating supplies,  crew payroll and
maintenance costs. At December 31, 2000, 31 of the Company's 173 offshore energy
support  vessels  were  stacked or held for sale.  The Company  took other steps
during 2000 to reduce  operating  costs,  including  the shutdown of the Sharjah
shipyard;  the  relocation  and  downsizing  of the  Lausanne  office  to  Nyon,
Switzerland;  the consolidation of certain  international  offshore functions in
Dubai,  United Arab  Emirates;  and the  consolidation  of tanker and purchasing
functions in Port Arthur, Texas.

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

         In addition to variable expenses associated with vessel operations, the
Company  incurs fixed  charges to depreciate  its vessels and other assets.  The
Company  provides for  depreciation on a straight-line  basis over the estimated
useful  lives of the  related  assets.  OPA 90  mandates  the useful life of the
Company's  product  and  chemical  carriers,  except  for the newly  constructed
double-hull carriers.  The Company evaluates the expected remaining useful lives
of its assets when changes occur in current and  anticipated  market  conditions
and customer  demand.  During 2000, the Company reduced the estimated  remaining
useful lives of certain of its offshore  energy and support  vessels in response
to changes in customer demand and  marketability  of the vessels.  See Note 2 to
the Company's Consolidated Financial Statements.

         The Company  overhauls  main  engines and key  auxiliary  equipment  in
accordance  with a continuous  planned  maintenance  program.  Under  applicable
regulations,  the Company's  chemical and product  carriers and offshore service
vessels and its four largest  tugs are  required to be  drydocked  twice in each
five-year  period for  inspection  and routine  maintenance  and repairs.  These
vessels are also required to undergo  special surveys every five years involving
comprehensive  inspection  and  corrective  measures to insure their  structural
integrity  and proper  functioning  of their cargo and ballast  piping  systems,
critical  machinery  and  equipment,  and coatings.  The Company's  fuel barges,
because  they are operated in fresh  water,  are  required to be drydocked  only
twice in each ten-year period.  The Company's harbor tugs and towboats generally
are not required to be drydocked on a specific schedule.  During the years ended
December 31, 2000, 1999, and 1998, the Company drydocked 62, 47, and 90 vessels,
respectively, at an aggregate cost (exclusive of lost revenue) of $14.4 million,
$7.6 million,  and $21.3  million,  respectively.  The Company  accounts for its
drydocking costs under the deferral method,  under which capitalized  drydocking
costs are expensed  over the period  preceding  the next  scheduled  drydocking.
Amortization  primarily  represents  drydocking and finance costs. See Note 2 to
the Company's consolidated financial statements.

         The Company had capital  expenditures  in the years ended  December 31,
2000 and 1999 of $31.5 million and $64.2 million, respectively.

         The cost of fuel is an item having  significant impact on the Company's
operating results. Although market conditions can significantly impact the price
of fuel, at present, these conditions have not resulted in an inadequate supply.

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

Results of Operations

         Results for 2000 reflect the first full year of  operation  under Fresh
Start Accounting, which the Company adopted following its emergence from Chapter
11 on  December  15,  1999 (the  Effective  Date).  See Note 3 to the  Company's
consolidated  financial  statements.  Thus  the  Company's  balance  sheets  and
statements of operations  and cash flows after the Effective  Date reflect a new
reporting Company and are not comparable to periods prior to the Effective Date.

         The twelve  months  ended  December 31, 1999 include the results of the
Predecessor Company for the period from January 1, 1999 to December 15, 1999 and
the  Successor  Company for the period from  December  16, 1999 to December  31,
1999.  The  principal  differences  between  these  periods  relate to reporting
changes regarding the Company's capital structure, changes in indebtedness,  and
the  revaluation  of the Company's  long-term  assets to reflect  reorganization
value at the Effective Date.  These changes  primarily  affect  depreciation and
amortization   expense  and  interest  expense  in  the  Company's   results  of
operations.



<PAGE>



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

                                                                            Year Ended December 31,
                                                    ----------------------------------------------------------------------
                                                             2000                    1999                    1998
                                                    ----------------------  ----------------------  ----------------------
<S>                                                 <C>         <C>         <C>          <C>        <C>        <C>
                                                                            (Dollars in millions)
Net revenues...................................     $    320.5      100.0%  $    342.2      100.0%  $    404.8      100.0%
Operating expenses.............................          205.2       64.0%       220.8       65.0%       213.6       53.0%
Overhead expenses..............................           39.6       12.0%        49.4       14.0%        43.2       10.0%
Depreciation, amortization and drydocking......           50.3       16.0%        81.5       24.0%        64.2       16.0%
                                                    ----------  ----------  ----------  ----------  ----------  ----------
Income (loss) from operations..................     $     25.4          8%  $    (9.5)      (3.0)%  $     83.8       21.0%
                                                    ==========  ==========  ==========  ==========  ==========  ==========

Interest expense, net..........................     $     62.0       19.0%  $     73.1       21.0%  $     41.2       10.0%
                                                    ==========  ==========  ==========  ==========  ==========  ==========

Other income (expense).........................     $     12.6        4.0%  $   (32.7)     (10.0)%  $    (5.7)      (1.0)%
                                                    ==========  ==========  ==========  ==========  ==========  ==========

Reorganization items...........................     $       --          --  $  (433.3)    (127.0)%          --          --
                                                    ==========  ==========  ==========  ==========  ==========  ==========
Net income (loss)..............................     $   (29.0)      (9.0)%  $  (249.9)     (73.0)%  $     21.7        5.0%
                                                    =========   ==========  ==========  ==========  ==========  ==========
</TABLE>

2000 Compared with 1999

         Net Revenue. Net revenue decreased 6.0% to $320.5 million for 2000 from
$342.2  million for 1999  primarily due to decreased  revenue from the Company's
marine transportation services and towing operations.

         Offshore  energy support  revenue  increased 1.0% to $151.4 million for
2000 from $150.3 million for 1999 primarily due to the increase in day rates for
both supply and crew boats. This increase began in the first quarter of 2000 and
continued  throughout  the year as a result of an increase in energy  prices and
exploration and production activity.  During 2000, a total of 29 offshore energy
support  vessels  were sold of which six were sold  during the first half of the
year and 23 during the second half of the year.

         Marine  transportation  services  revenue  decreased $12.9 million,  or
9.0%, to $136.0 million for 2000 from $148.9 million for 1999.  This decrease is
primarily due to the mandated  retirement  of three of the  Company's  Jones Act
tankers,  two in the last quarter of 1999 and one in the third  quarter of 2000.
Additionally,  the Company had  chartered  in two tankers in 1999 and one tanker
through  October  2000.  Revenue  from these  tankers was $28.9  million in 1999
compared to $9.7  million in 2000.  This  decrease was  partially  offset by the
operation of two of the Company's  double-hull tankers for the entire year 2000.
The HMI Ambrose Channel and HMI Brenton Reef were placed in service in March and
June of 1999, respectively. Revenue from these two double-hull tankers was $14.9
million in 1999 compared to $27.2 million in 2000.

         Towing  revenue  decreased  23.0% to $33.1  million for 2000 from $43.0
million for 1999. This decrease is primarily due to the sale of five tugs during
2000  and  increased  competition  in the  Port of  Tampa  as well as  decreased
activity in some of the other remaining ports in which the Company operates.

         Operating Expenses. Operating expenses decreased 7.0% to $205.2 million
for 2000 from $220.8  million for 1999,  primarily  due to  decreases in charter
hire expenses and port charges in the Company's marine  transportation  services
operations and crew payroll  expenses in the Company's  offshore  energy support
operations, offset in part by increased fuel expense.

         Overhead  Expenses.  Overhead expenses decreased 20.0% to $39.6 million
for 2000 from $49.4 million for 1999 primarily due to a decrease in professional
fees related to the Company's Chapter 11 proceeding in 1999.

         Depreciation,   Amortization  and  Drydocking  Expenses.  Depreciation,
amortization  and drydocking  expenses  decreased 38.0% to $50.3 million in 2000
from $81.5 million in 1999  primarily due to the write-down of the book value of
property  and  deferred  drydocking  costs,  and the  write-off of goodwill as a
result of the reorganization in 1999. Drydocking expense decreased 41.0% to $6.8
million in 2000 from $11.5 million in 1999. The reduction in drydocking  expense
was a direct result of reduced drydocking  expenditures in late 1998 and through
1999 as  drydocking  expenditures  were  deferred  on  non-working  vessels.  In
response to  increased  activity in the  offshore  segment in 2000,  the Company
increased the level of  drydocking  expenditures,  which will  increase  through
2001. The Company expects that drydocking  amortization expense will increase in
the future as a result of the additional  level of  expenditures.  As previously
indicated,  the Company revised the estimated  remaining useful lives of certain
offshore energy and support vessels. As a result of this change,  offset in part
by the impact of vessels sold in 2000,  total  depreciation  expense for 2001 is
expected  to increase  by  approximately  $4.0  million to  approximately  $46.4
million in 2001 versus $42.4 million in 2000.

         Income (loss) from Operations.  Income (loss) from operations increased
367.0%  to income  of $25.4  million  in 2000 from a loss of $(9.5) in 1999 as a
result of the factors noted above.

         Net Interest  Expense.  Net interest  expense  decreased 15.0% to $62.0
million in 2000 from $73.0 million in 1999  primarily due to the  reorganization
and  conversion  of  the  Predecessor   Company's  senior  notes  and  preferred
securities to shares in the Successor Company's common stock.

         Other Income  (expense).  Other income  totaled  $12.6  million in 2000
compared to other expense of $(32.7) million in 1999 primarily due to a net gain
of $3.9  million on vessel sales and a $7.0 million  favorable  settlement  of a
disputed  liability in 2000 compared to a net loss of $(25.7)  million on vessel
sales in 1999.

         Net Income  (loss).  The  Company's  net loss  decreased 88% to $(29.0)
million for 2000 compared to a loss of $(249.9)  million for 1999 as a result of
the factors noted above and reorganization items incurred in 1999.

1999 Compared with 1998

         Net Revenue. Net revenue decreased 15.0% to $342.2 for 1999 from $404.8
for 1998 primarily due to decreased  revenue from the Company's  offshore energy
support operations.

         Offshore energy support  revenue  decreased 38.0% to $150.3 million for
1999 from $242.7 million for 1998 due primarily to the worldwide decrease in day
rates and utilization for both supply and crewboats.  This decline, as described
above,  began in 1998 and  continued  in 1999 as a result of a steep  decline in
energy prices and exploration and production  activity.  During 1999, a total of
four offshore energy support vessels were sold.

         Marine  transportation  services  revenue  increased  29.0%  to  $148.9
million for 1999 from $115.8 million for 1998 primarily due to revenue earned by
the five new  double-hull  tankers,  which were  brought  into  service  between
October 1998 and June 1999.  These new tankers  operate more  efficiently and in
some cases demand higher rates than the Company's  other  tankers.  Revenue from
the  double-hull  tankers was $49.5 million in 1999 compared to $3.2 million for
the three  months in 1998.  These  increases  were  offset in part  because  the
Company  returned the Seabulk  Challenger to the lessor at the expiration of the
lease in October  1999 and  scrapped  the HMI  Astrachem,  in  November  1999 in
anticipation of its OPA 90-mandated retirement date. Combined revenues for these
tankers were $14.9 million in 1999 compared to $17.2 million in 1998.

         Towing  revenue  decreased  7.0% to $43.0  million  for 1999 from $46.4
million for 1998 due to reduced shipping  activity in the ports that the Company
serves,  decreased  offshore towing activities and increased  competition in the
Port of Tampa, as described above.

         Operating Expenses. Operating expenses increased 3.0% to $220.8 million
for 1999 from $213.6 million for 1998, primarily due to increases in maintenance
and repairs of $7.0  million.  As a percentage  of revenue,  operating  expenses
increased to 65.0% for 1999 from 53.0% for 1998 due  primarily to the decline in
revenue from the offshore energy support  operations and the other factors noted
above.

         Overhead  Expenses.  Overhead expenses increased 14.0% to $49.4 million
for 1999 from $43.2 for 1998  primarily  due to an  increase in  consulting  and
professional  fees of 53.0%  in 1999  over  1998  incurred  as a  result  of the
Company's Chapter 11 proceeding.  As a percentage of revenue,  overhead expenses
were  14.0%  and  11.0%  for 1999 and  1998,  respectively.  The  increase  as a
percentage of revenue  reflects the combined  effects of increased  expenditures
and lower revenues.

         Depreciation,   Amortization  and  Drydocking  Expenses.  Depreciation,
amortization  and drydocking  expenses  increased 27.0% to $81.5 million in 1999
from $64.2  million in 1998.  Approximately  $7.7  million  of the  increase  is
attributable  to an increase in the marine  transportation  operation  resulting
from the addition of the  double-hull  tankers.  Also,  the Company  acquired 37
offshore  energy support vessels in the first quarter of 1998 and the results of
operations  for 1999  reflect  a full  year of  depreciation  expense  for those
acquired  vessels,  which had the effect of increasing  depreciation  expense by
approximately  $9.6 million.  Drydocking expense increased 1.0% to $11.5 million
in 1999 from $11.4 million in 1998.

         Income (loss) from Operations.  Income (loss) from operations decreased
117.0% to $(9.5)  million in 1999 from $83.8 million in 1998, as a result of the
factors indicated above.

         Net Interest Expense. Net interest expense increased $31.8 million from
$41.2  million  in 1998 to  $73.0  million  in 1999 as a  result  of  additional
borrowings under the Company's revolving credit facility and additional interest
payable at default  rates of interest  from March 31, 1999 through the September
8, 1999 bankruptcy  filing date.  Besides these  increases,  the Company did not
accrue  approximately  $8.8 million of  contractual  interest  subsequent to the
bankruptcy filing on debt that was ultimately extinguished at the Effective Date
of the Plan of Reorganization. Interest expense was partially offset by interest
income of $0.9 million and $8.5 million in 1999 and 1998, respectively. Interest
income in 1998 primarily  reflects  earnings on the proceeds of the  double-hull
tankers Title XI ship  financing  bonds that were invested  pursuant to Maritime
Administration   (MARAD)  regulations  and  restricted  to  fund  the  remaining
construction costs of the double-hull tankers.

         Other  Expenses.  Other expenses  increased  $27.0  million,  from $5.7
million in 1998 to $32.7 million in 1999.  The increase was primarily the result
of the loss on the sale of vessels.

         Reorganization  Items.  Reorganization  items in 1999  represent  items
directly related to the Company's Chapter 11 proceeding.  These expenses consist
primarily  of the  write-down  of  long-term  assets and goodwill to reflect the
reorganization value of the Company and professional fees.

         Net Income (loss).  The Company had a net loss of $(249.9)  million for
1999 compared to net income of $21.7 million for 1998 as a result of the factors
noted above.

Seasonality

         The Company has experienced some slight  seasonality in its operations.
The first half of the year is generally  not as strong as the second half due to
lower  activity  in offshore  energy  support  services  and  petroleum  product
transportation during the months of February, March, and April.

Liquidity and Capital Resources

         Background. The Company's capital requirements arise primarily from its
need to service  debt,  fund  working  capital,  and  maintain  and  improve its
vessels.  Historically, the Company's principal sources of cash have been equity
and debt financing and cash provided by operations.  As a result of the declines
in rates and  utilization of its offshore energy support vessels that led to its
Chapter 11  reorganization,  operating income was substantially  reduced in 1999
and the first nine months of 2000 as compared to previous  years,  reducing  the
availability of cash from operations to fund the Company's capital requirements.

         Cash Flows. During 2000, the Company generated $26.3 million of cash in
operating  activities,  primarily  reflecting net income  adjusted by changes in
working capital and normal recurring  non-cash items such as depreciation.  Cash
provided by investing  activities was approximately $2.2 million for the period,
resulting  primarily  from  the  disposal  of  vessels  and  the  redemption  of
investments  from restricted MARAD accounts used for the final outfitting of the
double-hull  tankers.  Cash used in financing activities was approximately $33.3
million, consisting primarily of principal payments under the loan agreement and
capital lease obligations, offset by borrowings under the revolver.

         During  1999,  the  Company   generated  $17.5  million  of  cash  from
operations before  reorganization  items,  primarily reflecting the net loss for
the period,  after elimination of  reorganization  expense of $433.3 million and
non-cash  items.  Cash used in  investing  activities  was  approximately  $17.9
million for the period,  primarily  reflecting  the  disposal of vessels and the
redemption of restricted investments, offset by the costs of construction of and
capital  improvements to other vessels.  Cash generated by financing  activities
was  approximately  $9.3  million,  consisting  primarily of payments  under the
existing loan agreement, offset by borrowings.

         Recent  Expenditures and Future Cash Requirements.  After the Company's
emergence from bankruptcy in December 1999,  covenants set forth in the new bank
credit agreement  restricted the purchase of any additional vessels or equipment
over a set principal  amount  without prior bank  permission.  In June 2000, the
Company had its fourth  tractor tug delivered as  settlement  of an  outstanding
claim by the builder.  A cash deposit of $750,000 was paid in February 2000 with
the  remaining  balance of $4.6 million  financed  under a capital lease through
April 2008.

         With the market  upswing  during the second  half of 2000,  the Company
elected to purchase two modern 152' crewboats for a total price of $5.0 million.
Deposits  totaling $175,000 were made during October 2000. In December 2000, the
first crewboat was delivered and the remaining  balance of $2.4 million was paid
at the time of delivery.  The expected  delivery date for the second crewboat is
April 2001, along with a cash payment for the remaining balance of $2.5 million.

         The Company's current and future capital needs relate primarily to debt
service  and  maintenance  and  improvements  of its fleet.  Excluding  the five
double-hull product and chemical tankers,  the Company's  principal  obligations
for 2000 were $42.4 million; cash interest obligations were $40.2 million of the
$45.8 million in total interest  expense,  which includes  amortization  of bank
fees and discounts on notes.  Operating lease  obligations  were $4.4 million in
2000. Excluding the five double-hull product and chemical tankers, the Company's
principal  obligations for 2001 are estimated to be approximately $20.6 million;
cash interest  obligations will be approximately  $37.8 million of the estimated
$42.4 million in total interest  expense,  and operating  lease  obligations for
2001 are estimated to be $4.3 million.

         During  2000,  the Company  paid $3.8  million in  principal  and $15.7
million in interest on the five double-hull tankers. For 2001, an estimated $4.1
million of principal and $15.4 million in interest payments are due on the Title
XI ship  financing  bonds  associated  with the  five  double-hull  product  and
chemical tankers.

         During 2000, the Company incurred $22.8 million in capital improvements
to its fleet,  including  drydock  expenditures for 62 vessels.  For 2001, these
improvements are expected to aggregate $25.4 million.

         In December  2000,  the Company  signed an  agreement  to purchase  the
remaining 24.25% equity interest in its five 45,300 dwt double-hull  product and
chemical tankers.  The purchase was completed in January 2001, and was funded by
$0.5 million in cash and a promissory  note in the amount of $10.5 million at an
interest rate of 8.5%. The aggregate cost of the five carriers was approximately
$280.0 million, a substantial portion of which was financed with the proceeds of
U.S. government-guaranteed Title XI ship financing bonds.

         The Reorganization.  The Company's reorganization plan became effective
on December 15, 1999.  The details of the plan are  summarized  in Note 3 to the
Financial Statements.

         In connection with the restructuring, 10,000,000 shares of common stock
were issued.  The 9,800,000  shares  received by the holders of the  Predecessor
Company's  senior notes represent 96.9% of the Company's  currently  outstanding
common stock and 89.3% of its common stock, assuming exercise of all outstanding
warrants.  The 200,000 shares received by holders of the  Predecessor  Company's
trust preferred securities represent 2.0% of the Company's currently outstanding
common stock and 1.8% of its common stock, assuming exercise of the warrants.

         The  Company  also  obtained  new  credit  facilities  from a group  of
financial institutions. The new facilities,  totaling $320.0 million, consist of
$200.0 million in term loans, a $25.0 million  revolving  credit  facility,  and
$95.0 million in aggregate  principal amount at maturity of 12.5% senior secured
notes due 2007.  A portion of the  proceeds  from these  facilities  was used to
repay all outstanding  borrowings under the Predecessor Company's bank loans and
to pay administrative  and other fees and expenses.  The balance of the proceeds
is being used for working capital and general corporate purposes.

         The terms of the term loans and revolving credit facility are contained
in a credit agreement  between the Company and the financial  institutions.  The
credit agreement provides for the following facilities:
<TABLE>
<CAPTION>

                                                                                Interest Rate as of
         Facility                           Amount            Maturity             March 26, 2001
         --------                           ------            --------             --------------
<S>                                <C>                    <C>                      <C>
     Tranche A term loan            $75 million               2004                       8.67%
     Tranche B term loan            $30 million               2005                       9.17%
     Tranche C term loan            $95 million               2006                       9.67%
     Revolving credit facility      $25 million               2004                       8.67%
</TABLE>

         The interest rate for borrowings under the credit agreement is set from
time to time at the Company's option, subject to certain conditions set forth in
the  credit   agreement,   at  either:

o    the higher of the rate that the administrative agent announces from time to
     time as its prime  lending  rate (9.5% as of December  31,  2000) or 1/2 of
     1.0% in excess of the overnight  federal funds rate,  plus a margin ranging
     from 2.25% to 3.25% or

o    a rate based on a percentage  of the  administrative  agent's  quotation to
     first-class  banks in the New York interbank  Eurodollar  market for dollar
     deposits (LIBOR:  6.7% as of December 31, 2000), plus a margin ranging from
     3.25% to 4.25%.

         During  the  twelve  months of 2000,  the  Company  made the  following
principal  payments under the term loans:  Tranche A, $14.0 million,  Tranche B,
$4.1 million and Tranche C, $13.0 million.  Interest  payments on the term loans
for 2000 were:  Tranche A, $7.1 million,  Tranche B, $3.0 million and Tranche C,
$10.1 million.  At December 31, 2000,  $14.3 million was  outstanding  under the
revolving credit facility,  although this balance was completely paid down as of
March 1, 2001.  In addition to the revolver  balance,  there are $1.7 million in
outstanding letters of credit as of March 1, 2001.

         Borrowings  under the credit  agreement  are secured by first  priority
perfected security interests in substantially all of the equity of the Company's
subsidiaries and by first priority  perfected  security  interests in certain of
the vessels and other  assets  owned by the  Company  and its  subsidiaries.  In
addition,  certain of the Company's subsidiaries have guaranteed its obligations
under the credit agreement.  The credit agreement contains  customary  covenants
that require the Company,  among other things,  to meet certain financial ratios
and that  prohibit it from taking  certain  actions and  entering  into  certain
transactions.

         Recent  Developments.  The senior  secured  notes did not  receive  the
rating from the rating agencies required under the note indenture,  to have been
received  by April  15,  2000.  As a  result,  the  interest  rate for the notes
increased  from  12.5% to 13.5%  effective  December  15,  1999.  The  indenture
requires that such additional  interest be paid in the form of additional notes,
of which notes in aggregate principal amount of $514,583,  $238,786 and $239,383
were  issued  on June 30,  2000,  September  30,  2000 and  December  31,  2000,
respectively.  The Company is currently  seeking the required ratings that would
return the interest rate to 12.5%.

         In connection  with the first  amendment of the credit  agreement,  the
Company  paid a fee of  $4.5  million  to the  lending  banks  in the  form of a
promissory  note,  accruing  interest at 15.0% per annum, due the earlier of (i)
April 2002 or (ii) the date on which the ratio of funded  indebtedness to EBITDA
for any quarter is less than four to one. Additionally,  the Company is required
to obtain the consent of the lending  banks to borrow in excess of $17.5 million
under the revolving credit portion of the credit facility.

         The first amendment to the credit agreement,  entered into during April
2000,  required a cumulative $60.0 million prepayment of the term loans prior to
January 1, 2001,  reduced the  available  revolver  withdraw  without prior bank
permission  from  $25.0  million  to $17.5  million,  and  lowered  the  minimum
quarterly EBITDA  requirements  through March 2001. The second amendment changed
the first  prepayment  date from June 30, 2000 to July 17, 2000 and gave greater
flexibility to the asset sale process.  In August 2000, the Company entered into
a third  amendment  to the credit  agreement  that  reduced  the January 1, 2001
prepayment obligation from $60.0 million to $40.0 million. The Company finalized
its fourth  amendment to the credit  agreement in December 2000.  This amendment
eliminated  the  requirement of the Company to prepay $40.0 million of term loan
debt by  January  1, 2001 and  reduced  the fixed  charge  coverage  ratio  from
1.00:1.00 to 0.75:1.00  through December 31, 2001, at which time the ratio would
adjust to a minimum of 1.00:1.00 thereafter. In addition, the amendment modified
certain  definitions with regard to the calculation of the fixed charge coverage
ratio.

         The Company  believes that  operating  cash flow and amounts  available
under its revolving  credit facility will be sufficient to meet its debt service
obligations  and other  capital  requirements  through  2001.  As the  Company's
operating  cash flow is  dependent  on  factors  beyond the  Company's  control,
however, including general economic conditions and conditions in the markets the
Company serves,  there can be no assurance that actual  operating cash flow will
meet expectations.

Effects of Inflation

         The Company does not consider inflation a significant  business risk in
the current and foreseeable  future,  although the Company has experienced  some
cost increases, most have been offset by charter hire escalation clauses.

Prospective Accounting Changes

         In September  1998,  the Financial  Accounting  Standards  Board issued
Statement No. 133, Accounting for Derivative Instruments and Hedging Activities,
as amended by  statement  No. 137 which is required to be adopted by the Company
in fiscal 2001. Because of the Company's minimal use of derivatives,  management
does  not  anticipate  that  the  adoption  of the  new  Statement  will  have a
significant effect on the Company's earnings or financial position.

Item 7A.  Quantitative and Qualitative Disclosures About Market Risk

         The  Company is exposed to market risk from  changes in interest  rates
which may adversely  affect its results of operations  and financial  condition.
The Company's  policy is not to use financial  instruments  for trading or other
speculative  purposes and the Company is not a party to any leveraged  financial
instruments.  Except as set forth  below,  the  Company  manages  market risk by
restricting the use of derivative financial  instruments to infrequent purchases
of forward  contracts  for the purchase of fuel oil for its carrier  fleet.  The
Company does not have any open  contracts at December 31, 2000. A discussion  of
the  Company's  credit  risk and the  fair  value of  financial  instruments  is
included in Notes 2 and 14 of the Company's consolidated financial statements.

         Exposure To Short-Term  Interest Rates.  Short-term variable rate debt,
primarily borrowings under the credit agreement,  comprised approximately $183.1
million of the Company's total debt at December 31, 2000. The Company's variable
rate debt had an  average  interest  rate of  10.42% at  December  31,  2000.  A
hypothetical  2.0%  increase in interest  rates on $183.1  million of debt would
cause the Company's interest expense to increase  approximately $3.7 million per
year, with a corresponding decrease in income before taxes.

Item 8.  Financial Statements

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

Item 9.  Changes in and Disagreements with Accountants on Accounting and
         Financial Disclosure

         None







                                    Part III

Item 10.  Directors and Executive Officers of the Registrant

         The information required by Item 10 is contained in the Company's Proxy
Statement  for the 2001  Annual  Meeting  of  Shareholders  under  the  captions
"Directors  and Nominees" and  "Compliance  with Section 16(a) of the Securities
Exchange  Act of  1934,"  and in Item 4a of this  Report  on Form  10-K,  and is
incorporated herein by reference.

Item 11.  Executive Compensation

         The information required by Item 11 is contained in the Company's Proxy
Statement  for the  2001  Annual  Meeting  of  Shareholders  under  the  caption
"Executive Compensation," and is incorporated herein by reference.

Item 12.  Security Ownership of Certain Beneficial Owners and Management

         The information required by Item 12 is contained in the Company's Proxy
Statement for the 2001 Annual Meeting of Shareholders  under the caption "Common
Stock  Ownership  of  Certain   Beneficial   Owners  and   Management,"  and  is
incorporated herein by reference.

Item 13.  Certain Relationships and Related Transactions

         The information required by Item 13 is contained in the Company's Proxy
Statement  for the  2001  Annual  Meeting  of  Shareholders  under  the  caption
"External Affairs Committee  Interlocks and Insider  Participation" and "Certain
Transactions," and is incorporated herein by reference.



<PAGE>



                                     Part IV

Item 14.  Exhibits, Financial Statement Schedules and Reports on Form 8-K.

(a) Financial  Statements and  Schedules.  See Index to  Consolidated  Financial
Statements and Schedules which appear on page F-1 herein.

(b)  Reports on Form 8-K.  The  Company did not file any reports on Form 8-K for
the fourth quarter ended December 31, 2000.

(c) Lists of Exhibits. The following is a list of exhibits furnished.  Copies of
exhibits will be furnished upon request of any  stockholder at a charge of $0.25
per page plus  postage.  The Company  hereby files as part of this Form 10-K the
exhibits listed in Item 14(c) 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 and Seven World Trade Center,
Suite 1300,  New York,  NY 10048.  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.


Exhibit
Number                                      Exhibit

2.1* Debtor's First Amended Joint Plan of Reorganization, dated November 1, 1999
     and related Disclosure  Statement filed with the U.S.  Bankruptcy Court for
     the District of Delaware  [incorporated by reference to Exhibits 1 and 2 to
     the Schedule 13D/A filed with the Commission on December 29, 1999 by Loomis
     Sales & Company, L.P. (Commission File No. 000-28732)].
3.1(a)* Certificate of Incorporation (incorporated by reference to the Company's
     Form 10-K for the fiscal year ended December 31, 1999).
3.1(b)* Certificate of Merger  (incorporated  by reference to the Company's Form
     10-K for the fiscal year ended December 31, 1999).
3.1(c) Certificate of Merger changing the name of the Company.
3.2* By-laws of the Company.
4.1* Form of Common Stock Certificate of the Company.
4.1(a) Form of Common Stock Certificate reflecting new name of the Company.
4.2* Form of Class A Warrant Certificate of the Company.
4.2(a) Form of Class A Warrant Certificate reflecting new name of the Company.
4.3* Indenture for the 12.5% Senior  Secured Notes due 2007,  dated December 15,
     1999  among  Hvide  Marine  Incorporated  as  the  Issuer,  the  Subsidiary
     Guarantors  named  therein,  State  Street  Bank and Trust  Company  as the
     Trustee and Bankers Trust Company as the Collateral Agent  [incorporated by
     reference  to  Exhibit  4.1  to the  Company's  Form  8-K  filed  with  the
     Commission on December 27, 1999 (Commission File No. 000-28732)].
4.4* Warrant Agreement dated December 15, 1999 between Hvide Marine Incorporated
     and State Street Bank and Trust Company as Warrant Agent  [incorporated  by
     reference  to  Exhibit  4.2  to the  Company's  Form  8-K  filed  with  the
     Commission on December 27, 1999 (Commission File No. 000-28732)].
4.5* Class A Warrant  Agreement  dated as of  December  15,  1999 by and between
     Hvide  Marine   Incorporated  and  State  Street  Bank  and  Trust  Company
     (incorporated  by reference to the Company's  Form 10-K for the fiscal year
     ended December 31, 1999).
4.6* Amended and Restated Equity  Ownership Plan  (incorporated  by reference to
     the Company's definitive Proxy Statement dated May 15, 2000).
4.7* Stock Option Plan for Directors (incorporated by reference to the Company's
     definitive Proxy Statement dated May 15, 2000).
10.1*Credit  Agreement dated December 15, 1999 among Hvide Marine  Incorporated,
     Bankers Trust Company as  Administrative  Agent,  Deutsche Bank Securities,
     Inc. as Lead  Arranger  and Book  Manager,  Meespierson  Capital  Corp.  as
     Syndication Agent and Co-Arranger and the various persons from time to time
     parties to the Agreement as Lenders  [incorporated  by reference to Exhibit
     10.1 of the  Company's  Form 8-K filed with the  Commission on December 27,
     1999 (Commission File No. 000-28732)].
10.2*Common Stock  Registration  Rights  Agreement dated December 15, 1999 among
     Hvide Marine  Incorporated,  Bankers Trust  Corporation  and Great American
     Life Insurance Company, Great American Insurance Company, New Energy Corp.,
     American  Empire  Surplus  Lines  Insurance  Company,  Worldwide  Insurance
     Company  and  American   National  Fire  Insurance  Company  as  Purchasers
     [incorporated  by reference to Exhibit 10.2 of the Company's Form 8-K filed
     with the Commission on December 27, 1999 (Commission File No. 000-28732)].
10.3*Registration  Rights  Agreement for the 12.5% Senior Secured Notes due 2007
     dated  December 15, 1999 among Hvide  Marine  Incorporated,  Bankers  Trust
     Corporation  and Great  American Life  Insurance  Company,  Great  American
     Insurance  Company,  New  Energy  Corp.,   American  Empire  Surplus  Lines
     Insurance Company,  Worldwide  Insurance Company and American National Fire
     Insurance Company as Purchasers  [incorporated by reference to Exhibit 10.3
     of the  Company's  Form 8-K filed with the  Commission on December 27, 1999
     (Commission File No. 000-28732)].
10.4*Registration  Rights  Agreement  by and between  Loomis,  Sayles & Company,
     L.P.  and  Hvide  Marine   Incorporated  dated  as  of  December  15,  1999
     [incorporated  by reference  to Exhibit 4 of the Schedule  13D/A filed with
     the  Commission  on  December  29, 1999 by Loomis,  Sayles & Company,  L.P.
     (Commission File No. 005-46833)].
10.5*First   Amendment   dated  as  of  April  13,  2000  among   Hvide   Marine
     Incorporated,  the financial institutions party to the credit agreement and
     Bankers Trust Company as Administrative Agent (incorporated by reference to
     the Company's Form 10-K for the fiscal year ended December 31, 1999).
10.6 Second Amendment dated June 29, 2000 among Hvide Marine  Incorporated,  the
     financial  institutions  party to the credit  agreement  and Bankers  Trust
     Company, as Administrative Agent.
10.7 Third Amendment dated August 30, 2000 among Hvide Marine Incorporated,  the
     financial  institutions  party to the credit  agreement  and Bankers  Trust
     Company, as Administrative Agent.
10.8 Fourth  Amendment dated December 22, 2000 among Hvide Marine  Incorporated,
     the financial  institutions party to the credit agreement and Bankers Trust
     Company, as Administrative Agent.
10.9 Employment  Agreement  dated as of April 18,  2000  between the Company and
     Gerhard E. Kurz.
21*  Subsidiary List.
21(a) Revised Subsidiary List.
23.1* Consent of Ernst & Young LLP.
99.1*Order dated December 9, 1999 of the United States  Bankruptcy Court for the
     District  of  Delaware   confirming   the  First   Amended  Joint  Plan  of
     Reorganization  in In re:  Hvide  Marine  Incorporated,  et al.,  Case  No.
     99-3024  (PJW),  including  the  Supplement to such Plan  [incorporated  by
     reference  to  Exhibit  99.1 of the  Company's  Form  8-K  filed  with  the
     Commission on December 27, 1999 (Commission File No. 000-28732)].


--------------------------
*        Incorporated herein by reference.


<PAGE>



                                   SIGNATURES

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

                                  SEABULK INTERNATIONAL, INC.

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

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

<TABLE>
<CAPTION>

              Signature                              Title                                 Date
<S>                                      <C>                                        <C>
  /s/ JAMES J. GAFFNEY                   Chairman of the Board, and                   March 30, 2001
--------------------------------------
          James J. Gaffney               Director


  /s/ GERHARD E. KURZ                    Chief Executive Officer,                     March 30, 2001
--------------------------------------
           Gerhard E. Kurz               President, and Director


  /s/ J. STEPHEN NOUSS                   Senior Vice President and                    March 30, 2001
--------------------------------------
          J. Stephen Nouss               Chief Financial Officer


 /s/ JEAN FITZGERALD                     Director                                     March 30, 2001
--------------------------------------
           Jean Fitzgerald


  /s/ THOMAS P. MOORE, JR.               Director                                     March 30, 2001
--------------------------------------
        Thomas P. Moore, Jr.


  /s/ DONALD R. SHEPHERD                 Director                                     March 30, 2001
--------------------------------------
         Donald R. Shepherd


  /s/ PETER H. CRESSY                    Director                                     March 30, 2001
--------------------------------------
           Peter H. Cressy


 /s/ JOHN F. MCGOVERN                    Director                                     March 30, 2001
--------------------------------------
          John F. McGovern


 /s/ ROBERT KEISER                       Director                                     March 30, 2001
--------------------------------------
         Robert Keiser

</TABLE>

<PAGE>



                  Seabulk International, Inc. and Subsidiaries

            Index to Consolidated Financial Statements and Schedules

<TABLE>
<CAPTION>

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

Consolidated Financial Statements:

Consolidated  Statements of Operations for the year ended December 31, 2000, the
period from  December 16, 1999 to December  31, 1999  (Successor  Company),  the
period from January 1, 1999 to December 15, 1999 and the year ended
December 31, 1998 (Predecessor Company)........................................................................F-3

Consolidated  Statements of Cash Flows for the year ended December 31, 2000, the
period from  December 16, 1999 to December  31, 1999  (Successor  Company),  the
period from January 1, 1999 to December 15, 1999 and the year
ended December 31, 1998 (Predecessor Company)..................................................................F-4

Consolidated Balance Sheets as of December 31, 2000 and December 31, 1999
(Successor Company)............................................................................................F-6

Consolidated  Statements of Changes in  Stockholders'  Equity for the year ended
December  31,  2000,  the period from  December  16,  1999 to December  31, 1999
(Successor Company), the period from January 1, 1999 to December 15, 1999
and the year ended December 31, 1998 (Predecessor Company).....................................................F-7

Notes to Consolidated Financial Statements.....................................................................F-8
</TABLE>



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




<PAGE>



               REPORT OF INDEPENDENT CERTIFIED PUBLIC ACCOUNTANTS

Board of Directors and Stockholders
Seabulk International, Inc.

         We have audited the accompanying consolidated balance sheets of Seabulk
International, Inc. (formerly known as Hvide Marine Incorporated) as of December
31, 2000 and 1999 (Successor Company),  and the related consolidated  statements
of  operations,  changes in  stockholders'  equity,  and cash flows for the year
ended  December  31, 2000 and for the period from  December 16, 1999 to December
31, 1999 (Successor Company) and for the period from January 1, 1999 to December
15,  1999 and the year  ended  December  31,  1998  (Predecessor  Company).  The
Predecessor Company and the Successor Company are hereinafter referred to as the
Company.  These  financial  statements are the  responsibility  of the Company's
management.  Our  responsibility  is to express  an  opinion on these  financial
statements based on our audits.

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

         In our opinion,  the  financial  statements  referred to above  present
fairly, in all material respects, the consolidated financial position of Seabulk
International,  Inc. at December 31, 2000 and 1999  (Successor  Company) and the
consolidated  results  of its  operations  and its cash flows for the year ended
December 31, 2000 and for the period from December 16, 1999 to December 31, 1999
(Successor  Company),  and for the period from  January 1, 1999 to December  15,
1999 and the year ended December 31, 1998 (Predecessor  Company),  in conformity
with accounting principles generally accepted in the United States of America.



                                                 /s/ Ernst & Young LLP
Miami, Florida
February 22, 2001








<PAGE>



                   SEABULK INTERNATIONAL, INC. AND SUBSIDIARIES
                       CONSOLIDATED STATEMENTS OF OPERATIONS
                       (in thousands, except per share data)
<TABLE>
<CAPTION>

                                                                         Successor Company               Predecessor Company
                                                                                   Period from
                                                                                   December 16       Period from
                                                                     Year Ended        to            January 1 to      Year Ended
                                                                    December 31,  December 31,       December 15,     December 31,
                                                                  --------------  --------------   --------------   --------------
                                                                       2000            1999             1999             1998
                                                                  --------------  --------------   --------------   --------------
<S>                                                               <C>             <C>              <C>              <C>
Revenue.......................................................    $      320,483  $       13,479   $      328,751   $      404,793
Operating expenses:
   Crew payroll and benefits..................................            90,370           4,155           91,374           92,483
   Charter hire and Title XI guarantee fee....................            12,802             554           15,791           19,679
   Repairs and maintenance....................................            24,522             719           26,045           19,807
   Insurance..................................................            12,645             532           12,716           12,718
   Consumables................................................            40,605           1,660           35,966           39,628
   Rent and utilities.........................................            24,282             427           30,861           29,286
                                                                  --------------  --------------   --------------   --------------
     Total operating expenses.................................           205,226           8,047          212,753          213,601
Overhead expenses:
   Salaries and benefits......................................            22,083             870           18,048           21,062
   Office.....................................................             6,113             220            6,563            5,827
   Professional fees..........................................             4,629             211           10,447            6,963
   Other......................................................             6,805             342           12,756            9,327
                                                                  --------------  --------------   --------------   --------------
     Total overhead expenses..................................            39,630           1,643           47,814           43,179
Depreciation, amortization and drydocking.....................            50,271           2,069           79,410           64,244
                                                                  --------------  --------------   --------------   --------------
Income (loss) from operations.................................            25,356           1,720          (11,226)          83,769
Other income (expense):
   Interest expense...........................................           (62,714)         (2,756)         (71,215)         (49,723)
   Interest income............................................               704              68              841            8,485
   Minority interest and equity in earnings of subsidiaries...             1,639            (408)          (2,596)          (5,848)
   Gain (loss) on disposal of assets..........................             3,863              --          (25,658)              --
   Other......................................................             7,072            (189)          (3,875)             156
                                                                  --------------  --------------   --------------   --------------
     Total other expense, net.................................           (49,436)         (3,285)        (102,503)         (46,930)
                                                                  --------------  --------------   --------------   --------------
Income (loss) before reorganization items, income taxes, and
   extraordinary item.........................................           (24,080)         (1,565)        (113,729)          36,839
Reorganization items:
   Professional fees..........................................                --              --           (8,535)              --
   Write down of goodwill and property........................                --              --         (419,998)              --
   Other, net.................................................                --              --           (4,740)              --
                                                                  --------------  --------------   --------------   --------------
     Total reorganization items...............................                --              --         (433,273)              --
                                                                  --------------  --------------   --------------   --------------
Income (loss) before income taxes and extraordinary item......           (24,080)         (1,565)        (547,002)          36,839
Provision for (benefit from) income taxes.....................             4,872              --          (32,004)          13,489
                                                                  --------------  --------------   --------------   --------------
Income (loss) before extraordinary item.......................           (28,952)         (1,565)        (514,998)          23,350
Gain (loss) on early extinguishment of debt, net of applicable
   income taxes...............................................                --              --          266,643           (1,602)
                                                                  --------------  --------------   --------------   --------------
     Net income (loss)........................................    $      (28,952) $       (1,565)  $     (248,355)  $       21,748
                                                                  ==============  ==============   ==============   ==============

Earnings per common share:
Income (loss) before extraordinary item.......................    $        (2.89) $        (0.16)  $       (33.22)  $         1.52
Gain (loss) on early extinguishment of debt...................                --              --            17.20            (0.10)
                                                                  --------------  --------------   --------------   --------------
   Net income (loss) per common share.........................    $        (2.89) $        (0.16)  $       (16.02)  $         1.42
                                                                  ==============  ==============   ==============   ==============

Earnings per common share--assuming dilution:
Income (loss) before extraordinary item.......................    $        (2.89) $        (0.16)  $       (33.22)  $         1.43
Gain (loss) on early extinguishment of debt...................                --               --           17.20            (0.08)
                                                                  --------------  ---------------  --------------   --------------
   Net income (loss) per common share.........................    $        (2.89) $        (0.16)  $       (16.02)  $         1.35
                                                                  ==============  ==============   ==============   ==============

Weighted average common shares outstanding....................            10,034          10,000           15,503           15,324
                                                                  ==============  ==============   ==============   ==============
Weighted average common and common equivalent shares
   outstanding--assuming dilution.............................             10,034          10,000           15,503           19,451
                                                                   ==============  ==============   ==============   ==============
</TABLE>

See notes to consolidated financial statements.


<PAGE>



                           SEABULK INTERNATIONAL, INC. AND SUBSIDIARIES
                              CONSOLIDATED STATEMENTS OF CASH FLOWS
                                          (In thousands)
<TABLE>
<CAPTION>

                                                                        Successor Company            Predecessor Company
                                                                                  Period from
                                                                                  December 16     Period from
                                                                    Year Ended        to         January 1 to     Year Ended
                                                                   December 31,   December 31,   December 15,    December 31,
                                                                  -------------  -------------  -------------   -------------
                                                                       2000           1999           1999            1998
                                                                  ------------   ------------   ------------    -------------
<S>                                                              <C>            <C>            <C>            <C>
Operating activities:
  Net income (loss)..........................................    $    (28,952)  $     (1,565)  $    (248,355)  $    21,748
  Adjustments to reconcile net income (loss) to
     net cash provided by operating activities:
       Reorganization items:
         Write-off of goodwill...............................              --             --          88,052            --
         Revaluation of property and related assets..........              --             --         331,946            --
         Accrued reorganization expenses.....................          (4,494)            --           5,828            --
         Revaluation of other liabilities and assets.........              --             --           2,872            --
       Loss (gain) on early extinguishment of debt...........              --             --        (266,643)        1,602
       Depreciation and amortization of property.............          43,498          1,801          64,220        49,106
       Provision for bad debts...............................           1,021             56           6,180         1,087
       Loss (gain) on disposal of assets.....................          (3,863)            --          25,658           (26)
       Amortization of drydocking costs......................           6,773            268          11,249        11,354
       Amortization of goodwill..............................              --             --           3,940         3,784
       Amortization of discount on long-term debt
         and financing costs.................................           5,672            180           2,777         1,489
       Deferred income tax provision (benefit)...............              --             --         (32,004)       10,189
       Minority partners' equity in (earnings)
         loss of subsidiaries, net...........................          (1,639)           408          (2,596)       (1,627)
       Undistributed losses of affiliates....................              --             --              --          (395)
       Other non-cash items..................................           1,418             --            (164)          217
       Changes in operating assets and
         liabilities, net of the effects
         of acquisitions:
           Accounts receivable...............................         (13,394)         1,172          20,000       (41,110)
           Marine operating supplies.........................             994            239             232        (4,270)
           Other current and long-term assets................          19,355          1,306          (1,349)        6,432
           Accounts payable and other liabilities............            (113)        (1,304)          3,084        31,273
                                                                 ------------   ------------   -------------   -----------
             Net cash provided by operating activities.......          26,276          2,561          14,927        90,853

Investing activities:
  Purchases of property......................................         (12,047)          (597)        (57,144)     (114,521)
  Acquisitions of businesses, net of
    escrow deposits utilized of $6,349.......................              --             --              --      (373,535)
  Expenditures for drydocking................................         (14,366)        (1,424)         (5,060)      (23,935)
  Payments on vessels under construction.....................              --             --          (5,102)     (155,980)
  Purchases of restricted investments........................              --             --         (45,790)     (369,629)
  Redemption of restricted investments.......................           2,931             --          65,382       515,584
  Capital contribution to unconsolidated affiliates..........              --             --              --        (3,233)
  Proceeds from disposals of assets..........................          25,710             --          32,852            --
  Purchase of minority interest in subsidiary................              --         (1,000)             --            --
                                                                 ------------   ------------   -------------   -----------
     Net cash provided by (used in)
       investing activities..................................           2,228         (3,021)        (14,862)     (525,249)

Financing activities:
  Proceeds from revolving credit facility,
     net of repayments.......................................          14,250             --              --            --
  Proceeds from Debtor-in-Possession (DIP)
     credit facility.........................................              --             --          26,690            --
  Proceeds from long-term borrowings.........................              --             --         245,208       431,700
  Repayment of long-term borrowings..........................         (33,390)           (80)       (288,205)     (313,938)
  Proceeds from issuance of Senior notes and warrants........              --             --              --       292,500
  Proceeds from issuance of Successor Company
     senior secured notes and warrants.......................              --             --          85,500            --
  Proceeds from issuance of Title XI bonds...................              --             --           5,428       139,023
  Repayment of Title XI bonds................................          (9,282)        (1,252)         (6,643)     (137,250)
  Escrow of restricted cash..................................              --             --         (15,217)           --
  Payments of financing costs................................            (596)            --         (12,678)      (10,819)
  Proceeds from sale/lease back of vessels...................              --             --              --        32,622
  Payments of obligations under capital leases...............          (4,300)          (159)         (2,820)       (5,088)
  Proceeds from issuance of common stock.....................               1             --             253           800
  Repayment of DIP credit facility...........................              --             --         (26,690)           --
                                                                 ------------   ------------   -------------   -----------
     Net cash provided by (used in)
       financing activities..................................         (33,317)        (1,491)         10,826       429,550
                                                                 ------------   ------------   -------------   -----------
  Change in cash and cash equivalents........................          (4,813)        (1,951)         10,891        (4,846)
  Cash and cash equivalents at beginning of period...........          19,046         20,997          10,106        14,952
                                                                 ------------   ------------   -------------   -----------
  Cash and cash equivalents at end of period.................    $     14,233   $     19,046   $      20,997   $    10,106
                                                                 ============   ============   =============   ===========

Supplemental schedule of noncash investing
    and financing activities:
  Note payable issued for amendment fee to
    credit facility..........................................    $      4,500   $         --   $          --   $        --
                                                                 ============   ============   =============   ===========
  Notes payable issued for the acquisition of vessels........    $         --   $      8,586   $          --   $        --
                                                                 ============   ============   =============   ===========
  Capital lease obligations for the
    acquisition of vessels and equipment.....................    $      5,332   $         --   $          --   $    32,621
                                                                 ============   ============   =============   ===========
Supplemental disclosures:
  Interest paid, net of interest capitalized.................    $     56,219   $        739   $      57,821   $    44,972
                                                                 ============   ============   =============   ===========
  Income taxes paid, net.....................................    $      4,478   $         --   $         734   $     3,214
                                                                 ============   ============   =============   ===========
  Cash paid for professional fees in
    connection with Chapter 11 proceeding....................    $         --   $         --   $       4,575   $        --
                                                                 ============   ============   =============   ===========
</TABLE>

  See notes to consolidated financial statements.


<PAGE>



                         SEABULK INTERNATIONAL, INC. AND SUBSIDIARIES
                                   CONSOLIDATED BALANCE SHEETS
                             (in thousands, except par value data)
<TABLE>
<CAPTION>

                                                                                            December 31, 2000     December 31, 1999
<S>                                                                                          <C>                  <C>
Assets
Current assets:
   Cash and cash equivalents............................................................     $      14,233         $      19,046
   Restricted cash......................................................................               331                15,217
   Accounts receivable:
     Trade, net of allowance for doubtful accounts of $6,398 in
       2000 and $5,799 in 1999..........................................................            53,526                47,555
     Insurance claims and other.........................................................            13,176                 9,628
   Marine operating supplies............................................................             9,638                10,632
   Prepaid expenses.....................................................................             3,055                 4,013
                                                                                             -------------         -------------
     Total current assets...............................................................            93,959               106,091

Vessels and equipment, net..............................................................           639,896               689,880
Deferred costs, net.....................................................................            38,159                29,464
Restricted investments..................................................................               865                 3,752
Other...................................................................................             2,597                 1,553
                                                                                             -------------         -------------
     Total assets.......................................................................     $     775,476         $     830,740
                                                                                             =============         =============
Liabilities and stockholders' equity
Current liabilities:
   Accounts payable.....................................................................     $      12,906         $      10,895
   Current maturities of long-term debt.................................................            33,270                17,775
   Current obligations under capital leases.............................................             3,580                 3,332
   Accrued interest.....................................................................             1,677                 3,102
   Accrued liabilities and other........................................................            33,840                37,489
                                                                                             -------------         -------------
     Total current liabilities..........................................................            85,273                72,593

Long-term debt..........................................................................           426,849               465,769
Obligations under capital leases........................................................            34,718                33,934
Senior notes............................................................................            79,108                76,709
Other liabilities.......................................................................             4,195                 5,952
                                                                                             -------------         -------------
     Total liabilities..................................................................           630,143               654,957

Commitments and contingencies

Minority interest.......................................................................             8,819                10,457

Stockholders' equity:
   Preferred stock, no par value--authorized 5,000; issued and outstanding, none........                --                    --
   Class A common stock--$.01 par value, authorized 20,000 shares; 10,117 and 10,000 ...
     shares issued and outstanding, respectively........................................               101                   100
   Additional paid-in capital...........................................................           166,930               166,791
   Accumulated deficit..................................................................           (30,517)               (1,565)
                                                                                             -------------         -------------
   Total stockholders' equity...........................................................           136,514               165,326
                                                                                             -------------         -------------
     Total liabilities and stockholders' equity.........................................     $     775,476         $     830,740
                                                                                             =============         =============
</TABLE>

See notes to consolidated financial statements.




<PAGE>



                      SEABULK INTERNATIONAL, INC. AND SUBSIDIARIES
               CONSOLIDATED STATEMENTS OF CHANGES IN STOCKHOLDERS' EQUITY
                                     (in thousands)
<TABLE>
<CAPTION>

                                                  Class A                 Class B                        Retained
                                               Common Stock            Common Stock         Additional   Earnings
                                           ---------------------  --------------------       Paid-In    (Accumulated
                                            Shares      Amount      Shares      Amount       Capital       Deficit)         Total
                                           ----------  ---------  ---------  ----------    -----------  ------------   -----------
<S>                                      <C>         <C>          <C>       <C>           <C>         <C>            <C>
PREDECESSOR COMPANY
Balance at December 31, 1997.............     12,382  $       12       2,906  $        3  $  195,522    $   29,450      $  224,987
Conversion of common stock...............        360           1        (359)         (1)         --            --              --
Common stock issued upon exercise
   of stock options......................          1          --          --          --           1            --               1
Common stock issued pursuant to
   employee stock purchase plan..........        112          --          --          --         889            --             889
Common stock issued to directors.........         18          --          --          --         216            --             216
Stock compensation pursuant to
   key employee stock plan...............         --          --          --          --         194            --             194
Net income...............................         --          --          --          --          --        21,748          21,748
                                          ----------  ----------  ----------  ----------  ----------    ----------      ----------
Balance at December 31, 1998.............     12,873          13       2,547           2     196,822        51,198         248,035
Common stock issued pursuant to
  employee stock purchase plan...........         79          --          --          --         253            --             253
Stock compensation pursuant to
  key employee stock plan................         --          --          --          --         104            --             104
Common stock issued to directors.........         55          --          --          --         130            --             130
Other....................................         --          --          --          --        (167)           --            (167)
Conversion of common stock...............      2,020           2      (2,020)         (2)         --            --              --
Cancellation of Predecessor Company
  common stock and elimination of
  existing stockholders' equity
  upon emergence from bankruptcy.........    (15,027)        (15)       (527)         --    (197,142)      197,157              --
Issuance of Successor Company
  common stock...........................     10,000         100          --          --     154,881            --         154,981
Warrants issued in connection
  with exit financing....................         --          --          --          --      11,910            --          11,910
    Net loss.............................         --          --          --          --          --      (248,355)       (248,355)
                                          ----------  ----------  ----------  ----------  ----------    ----------      ----------

SUCCESSOR COMPANY
Balance at December 15, 1999.............     10,000         100          --          --     166,791            --         166,891
Net loss.................................         --          --          --          --          --        (1,565)         (1,565)
                                          ----------  ----------  ----------  ----------  ----------    ----------      ----------
Balance at December 31, 1999.............     10,000         100          --          --     166,791        (1,565)        165,326
Common stock issued to employees.........         28          --          --          --         177            --             177
Common stock issued upon
  exercise of warrants...................         89           1          --          --          --            --               1
Translation adjustment...................         --          --          --          --         (38)           --             (38)
  Net loss...............................         --          --          --          --          --       (28,952)        (28,952)
                                          ----------  ----------  ----------  ----------  ----------    ----------      ----------
Balance at December 31, 2000.............     10,117  $      101          --  $       --  $  166,930    $  (30,517)     $  136,514
                                          ==========  ==========  ==========  ==========  ==========    ==========      ==========
</TABLE>

See notes to consolidated financial statements.



<PAGE>



                  SEABULK INTERNATIONAL, INC. AND SUBSIDIARIES
                   NOTES TO CONSOLIDATED FINANCIAL STATEMENTS


1.       Organization and Basis of Presentation

         On March 12, 2001,  Hvide Marine  Incorporated  (the "Issuer")  filed a
"Certificate  of Ownership  and Merger" with the Secretary of State of the State
of Delaware that merged the Issuer's newly  organized,  wholly-owned  subsidiary
Seabulk  International,  Inc. into the Issuer. This Certificate of Ownership and
Merger  provided that from and after the effective date of the merger,  the name
of the merged companies would be Seabulk International, Inc. The merger and name
change became  effective on March 19, 2001, and the Issuer's  common stock began
trading on the Nasdaq  National  Market under its new symbol "SBLK" on March 21,
2001.  The Company's  Class A Warrants  began trading on the OTC Bulletin  Board
under their new symbol "SBLKW" on March 21, 2001.

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

         The Company derives substantial revenue from international  operations,
primarily under U.S.  dollar-denominated  contracts with major international oil
companies.  Risks  associated  with operating in  international  markets include
vessel seizure,  foreign  exchange  restrictions,  foreign  taxation,  political
instability,  nationalization,  and 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 majority-owned subsidiaries. All material
intercompany  transactions and balances have been eliminated in the consolidated
financial statements.

         The  Predecessor  Company  and  substantially  all of its  wholly-owned
subsidiaries filed voluntary petitions for relief under Chapter 11 of the United
States  Bankruptcy Code (the "Bankruptcy  Code") in the United States Bankruptcy
Court for the District of Delaware (the "Bankruptcy Court") on September 8, 1999
(the "Petition  Date").  The Bankruptcy Court confirmed the Company's Joint Plan
of  Reorganization  (the  "Plan")  on  December  9,  1999,  and the Plan  became
effective on December 15, 1999 (the "Effective  Date"). The Company emerged from
bankruptcy on December 15, 1999; See Note 3 for additional information.

         The consolidated financial statements reflect accounting principles and
practices  set forth in  American  Institute  of  Certified  Public  Accountants
Statement  of  Position  ("SOP")  90-7,   Financial  Reporting  by  Entities  in
Reorganization  under the Bankruptcy Code, which provides guidance for financial
reporting by entities that have filed voluntary  petitions for relief under, and
have reorganized in accordance  with, the Bankruptcy Code. As discussed  further
in Note 3, the  assets  and  liabilities  of the  Company  were  restated  as of
December 15, 1999 in  accordance  with SOP 90-7,  and  therefore  the results of
operations  and  cash  flows  for  periods  prior  to  December  15,  1999  (the
"Predecessor  Company") are not comparable to the results of operations and cash
flows of the Company  subsequent to emergence  from  bankruptcy  for the periods
subsequent to December 15, 1999 (the "Successor Company").

         The first amendment to the credit agreement,  entered into during April
2000,  required a $60.0 million prepayment of the term loans prior to January 1,
2001,  reduced  the  available  revolving  line of  credit  without  prior  bank
permission  from  $25.0  million  to $17.5  million,  and  lowered  the  minimum
quarterly EBITDA  requirements  through March 2001. The second amendment changed
the first  payment  requirement  date from June 30,  2000 to July 17,  2000.  In
August 2000, the Company entered into a third amendment to the credit  agreement
that reduced the January 1, 2001  prepayment  obligation  from $60.0  million to
$40.0  million.  The  Company  finalized  the  fourth  amendment  to the  credit
agreement in December  2000.  This amendment  eliminated the  requirement of the
Company to prepay $40.0 million of term loan debt by January 1, 2001 and reduced
the fixed charge coverage ratio from 1.00:1.00 to 0.75:1.00 through December 31,
2001, at which time the ratio would adjust to a minimum of 1.00:1.00 thereafter.
In addition,  the  amendment  modified  certain  definitions  with regard to the
calculation of the fixed charge coverage ratio.

         In June 1998,  the Company  paid $18.5  million to increase  its equity
interest in five double-hull tankers from 0.8% to 50.8%. Three of these carriers
were  delivered  in the fourth  quarter of 1998,  and two others were  delivered
during 1999. The Successor  Company  increased its ownership in the  double-hull
tankers at December  30,  1999 from 50.8% to 75.8%.  On January  15,  2001,  the
Company  purchased the remaining 24.2% equity interest for  approximately  $11.0
million (See Note 16). The  double-hull  tankers were not a party to the Chapter
11 proceeding.

2.       Summary of Significant Accounting Policies

         Revenues.  Revenues from time  charters are earned and  recognized on a
daily basis.  Time charter rates are adjusted  periodically  based on changes in
specified price indices and market conditions.  Revenues on voyage contracts are
recognized based upon the percentage of voyage completion.

         Cash and Cash  Equivalents.  The Company  considers  all highly  liquid
investments  with a maturity of three  months or less when  purchased to be cash
equivalents.  The  credit  risk  associated  with cash and cash  equivalents  is
considered low due to the credit quality of the financial institutions.

         Restricted  Cash.  At December 31, 2000,  restricted  cash  consists of
fully funded letters of credit. At December 31, 1999,  restricted cash primarily
represented  proceeds  from the exit  financing  deposited  into  escrow to fund
certain of the Company's contractual interest payments in 2000.

         Accounts  Receivable.  Substantially  all  of  the  Company's  accounts
receivable  are due from  entities  that operate in the oilfield  industry.  The
Company performs ongoing credit evaluations of its trade customers and generally
does not require collateral.  Credit losses are provided for in the consolidated
financial  statements  and  have  been  within  management's  expectations.   No
significant  customer or group of customers within a certain geographical region
represents a significant  concentration of credit risks.  During the years ended
December 31, 2000, 1999, and 1998, the Company wrote off accounts  receivable of
approximately $0.6 million, $2.6 million, and $0.2 million, respectively.

         Insurance  Claims  Receivable.  Insurance claims  receivable  represent
costs  incurred in  connection  with  insurable  incidents for which the Company
expects to be  reimbursed  by the  insurance  carrier(s),  subject to applicable
deductibles. Deductible amounts related to covered incidents are expensed in the
period of occurrence of the incident.  The credit risk associated with insurance
claims  receivable is considered low due to the credit quality and funded status
of the insurance clubs in which the Company participates.

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

         Impairment  of  Long-Lived   Assets.   The  Company  accounts  for  the
impairment of long-lived  assets under the  provisions of Statement of Financial
Accounting  Standards  ("SFAS")  No.  121,  Accounting  For  the  Impairment  of
Long-Lived  Assets and for  Long-Lived  Assets to be disposed of, which requires
impairment  losses to be recorded on long-lived  assets used in operations  when
indications of impairment are present and the estimated  undiscounted cash flows
to be generated by those assets are less than the assets  carrying  amounts.  If
the carrying value of the assets will not be recoverable, as determined based on
the  estimated  undiscounted  cash flows,  the carrying  value of the assets are
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 has not recorded any impairment losses.

         Vessels and  Equipment.  Vessels and  equipment are stated at cost less
accumulated  depreciation.  Depreciation is computed on the straight-line method
over the estimated useful lives of the assets.

         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, 2000 and 1999 are vessels  under  capital  leases of  approximately
$44.4  million  and  $36.1   million,   net  of  accumulated   amortization   of
approximately $1.6 million and $0.1 million, respectively.

         During 2000, the Company  increased  capital  expenditures  on formerly
laid-up  vessels in response to an  increase in market  demand and sold  certain
other  non-operating  vessels to meet debt  payment  requirements.  Through this
process,  the Company  determined that the useful lives  previously  assigned to
certain offshore vessels were in excess of the expected  remaining  service life
because of changes in customer demands and deterioration of the vessels while in
laid-up   status.   Based  on  this   information,   the  Company   performed  a
vessel-by-vessel analysis to evaluate the remaining useful lives of its offshore
fleet.  The analysis was completed in the fourth quarter of 2000 and the average
remaining  useful  life of the  Company's  offshore  supply and  crewboat  fleet
decreased  from  approximately  16 years to 9 years.  Management  believes these
changes more accurately  reflect the remaining  economic lives of these vessels.
As a result of the change in estimated  remaining useful lives,  depreciation in
2000 increased $0.9 million. On a pro forma basis,  depreciation expense in 2001
will increase by $5.4 million.

         Listed below are the  estimated  remaining  useful lives of vessels and
equipment at December 31, 2000:

                                                                    Remaining
                                                                   Useful Lives
                                                              -----------------
                                                                    (in years)
               Supply boats                                              5-26
               Crewboats                                                 2-22
               Anchor handling tug/supply vessels                        3-15
               Other                                                     1-12
               Tankers(1)                                                6-28
               Tugboats and barges                                       4-39
               Furniture and equipment                                   3-10
                --------------------------
               (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   certain   inspections   to  maintain   their   operating
classification,  as mandated by certain maritime regulations.  Costs incurred to
drydock the  vessels  are  deferred  and  amortized  over the period to the next
drydocking,  generally  30 to 36  months.  Drydocking  costs  are  comprised  of
painting  the  vessel  hull and  sides,  recoating  cargo  and fuel  tanks,  and
performing  other  engine  and  equipment  maintenance  activities  to bring the
vessels into compliance with classification standards.  Deferred financing costs
are amortized over the term of the related borrowings using the interest method.
At December 31, 2000 and 1999,  deferred  costs include  unamortized  drydocking
costs of  approximately  $14.8 million and $7.2 million,  respectively,  and net
deferred financing costs of $23.4 million and $22.3 million, respectively.

         Restricted  Investments.  Pursuant  to  the  Title  XI  Bond  Financing
Agreements for the Company's five double-hull  petroleum  product  tankers,  the
Company is required  to deposit  all  proceeds  from the bond  issuance  into an
escrow  account  (restricted  investments)  with  MARAD.  Funds  from the escrow
account are disbursed for qualifying expenses related to the construction of the
vessels after documentation is received and approved by MARAD.

         Restricted  investments  primarily  consists of U.S. Treasury bills and
notes  stated  at  their  amortized  cost as  they  are  expected  to be held to
maturity.  The maturity date of such investments range from March 2001 to August
2001.  The average  interest  rates on these  investments  in 2000 and 1999 were
consistent  with  short-term  U.S.  Treasury  note rates  during  such  periods.
Interest earned on the investments is not restricted and may be used for general
working capital purposes for the double-hull tankers.

         Accrued   Liabilities.   Accrued   liabilities   included   in  current
liabilities consist of the following at December 31 (in thousands):
<TABLE>
<CAPTION>

                                                                                   2000             1999
                                                                              --------------   --------------
<S>                                                                         <C>               <C>
       Payroll and benefits.............................................     $         7,492  $         6,134
       Professional services............................................               1,231            1,098
       Reorganization items.............................................                  --            4,437
       Voyage operating expenses........................................               8,099            7,218
       Litigation, claims and settlements...............................               2,672            8,146
       Foreign taxes....................................................               9,408            4,890
       Deferred voyage revenues.........................................               3,466            2,587
       Other............................................................               1,472            2,979
                                                                             ---------------  ---------------
         Total..........................................................     $        33,840  $        37,489
                                                                             ===============  ===============
</TABLE>


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

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

         Foreign Currency  Translation.  In accordance with SFAS No. 52, Foreign
Currency Translation,  assets and liabilities  denominated in foreign currencies
are  translated  into  U.S.  dollars  at the rate of  exchange  in effect at the
balance sheet date,  while  revenue and expenses are  translated at the weighted
average  rates   prevailing   during  the   respective   years.   Components  of
shareholders'  equity are translated at historical  rates. The Company's foreign
subsidiaries use the U.S. dollar as their functional  currency and substantially
all external  transactions  are  denominated in U.S.  dollars.  Gains and losses
resulting from changes in exchange rates from year to year are insignificant for
all years presented.

         Reorganization  Items.  In  accordance  with SOP 90-7,  costs  incurred
directly related to the bankruptcy  proceeding are classified as  Reorganization
Items in the accompanying statement of operations for the period from January 1,
1999 to December 15, 1999.

         Estimates.  The preparation of financial  statements in conformity with
accounting  principles  generally  accepted  in the  United  States  of  America
requires  management to make estimates and  assumptions  that affect the amounts
reported in the financial statements and accompanying notes. Actual results will
differ from those estimates.

         Comprehensive  Income (loss).  SFAS No. 130  establishes  standards for
reporting  and the  display  of  comprehensive  income,  which is defined as the
change in equity arising from non-owner sources.  Comprehensive income (loss) is
not significantly different from net income (loss) for all periods presented.

         Recent Pronouncements. In June 1999, the Financial Accounting Standards
Board (FASB) issued SFAS 137, Accounting for Derivative  Instruments and Hedging
Activities--Deferral  of the Effective Date of FASB Statement 133. The Statement
defers the effective  date of SFAS 133 to fiscal 2001. The Company does not have
any derivative  financial  instruments and does not believe that adoption of the
Statement will have a material impact in the Company's financial statements.

         Reclassifications.  Certain  amounts from prior  periods'  consolidated
financial statements have been reclassified to conform with the current period's
presentation.

3.       Joint Plan of Reorganization and Fresh Start Reporting

         In September 1999, the Company filed the Plan with the Bankruptcy Court
which set forth a plan for  repaying or  otherwise  compensating  the  Company's
creditors  in order of  relative  seniority  of their  respective  claims  while
seeking to  maintain  the  Company  as a going  concern.  The Plan  specifically
provided  for the  conversion  of the  Predecessor  Company's  senior  notes and
Preferred   Securities  to  equity  interests  in  the  Successor   Company  and
cancellation  of all of the  prepetition  equity  interests  in the  Predecessor
Company, as more fully described in the Plan. Substantially all of the Company's
other pre- and post petition unsecured liabilities were unaffected by the Plan.

         On the  Effective  Date,  the  Predecessor  Company's  Senior Notes and
Preferred  Securities  were converted into 9.8 million and 0.2 million shares of
the  Successor  Company's  common  stock,  respectively.  As  a  result  of  the
transactions which occurred on the Effective Date, indebtedness of approximately
$266.6  million  was  discharged  and  is  reflected  as a  gain  on  the  early
extinguishment of debt in the accompanying consolidated statements of operations
for the 1999 Predecessor Company.  This gain was not recognized for tax purposes
to the extent the Company was insolvent at the date of discharge.  However,  the
Company's net operating loss carry forwards, alternative minimum tax credits and
tax basis in fixed  assets at the  Effective  Date were reduced by the amount of
the gain.

         On the Effective Date, the Company raised an aggregate of approximately
$295.0  million  through the  issuance of term loans and 12.5% Senior Notes (the
"Senior Notes") with  detachable  common stock purchase  warrants,  resulting in
approximately  $263.0  million of net  proceeds to the Company  after  deducting
related offering costs and discount on the Senior Notes (the "Exit  Financing").
The  proceeds  were  used to repay  the  Company's  debtor-in-possession  credit
facilities,  the Predecessor  Company's  Credit Facility and certain  bankruptcy
administrative  claims and reorganization  costs incurred in connection with the
Company's bankruptcy proceeding.

         Upon  emergence  from  Chapter  11  Bankruptcy  Protection  as  of  the
Effective  Date,  the  Company  adopted  Fresh Start  Reporting  pursuant to the
provisions of SOP 90-7. In accordance  with SOP 90-7,  assets of the entities in
Chapter 11 proceeding have been restated as of the Effective Date to reflect the
reorganization  value of the Company,  and liabilities have been recorded at the
present  value of the future  amounts  expected  to be paid.  In  addition,  the
accumulated  deficit  of  the  Company  through  the  Effective  Date  has  been
eliminated,  and the debt  and  capital  structure  of the  Predecessor  Company
reflects the application of the provisions of the Plan.  Thus, the balance sheet
as of December 31, 1999 reflects  reporting of the Successor  Company and is not
comparable to the balance sheets of the Predecessor  Company.  Furthermore,  the
accompanying  consolidated  statements  of  operations  and  cash  flows  of the
Predecessor  Company  reflect  operations  prior to the  Effective  Date and the
effect of adopting Fresh Start  Reporting and are thus not  comparable  with the
results of operations and cash flows of the Successor Company.

         The reorganization value of the Company of approximately $587.6 million
(excluding  the  double-hull  tankers  which  were  not part of the  Chapter  11
proceeding)  was  determined  by the Company  with the  assistance  of financial
advisors.  These advisors (1) reviewed certain historical financial  information
of the Company;  (2) reviewed  certain  internal  operating  reports,  including
management-prepared financial projections and analyses; (3) discussed historical
and projected financial performance with senior management and industry experts;
(4) reviewed  industry trends and operating  statistics and analyzed the effects
of  certain  economic  factors  on  the  industry;   (5)  analyzed  the  capital
structures,  financial  performance  and  market  valuations  of  the  Company's
competitors,  and (6) prepared such other  analyses as they deemed  necessary to
their valuation determination.  Based upon the foregoing, the financial advisors
developed  a range of  values  for the  Company  as of the  Effective  Date.  In
developing this valuation estimate, the advisors,  using a rate of approximately
14.0%,  discounted  the Company's  five year  forecasted  free cash flows and an
estimate of sales proceeds  assuming the Company would be sold at the end of the
five year  period.  In  addition  to relying on  management's  projections,  the
valuation analysis included a number of assumptions  including,  but not limited
to, a successful and timely  reorganization  of the Company's  capital structure
and the continuation of current market conditions through the forecast period.

         The  difference  between  the  Company's  reorganization  value and the
historical  carrying value of the Company's net assets resulted in the recording
of  reorganization  items of  approximately  $420.0 million for the period ended
December 15, 1999, which consisted of a write down of goodwill and property.




<PAGE>



         The effects of the Plan, Exit Financing, and fresh start adjustments on
the Company's condensed  consolidated balance sheet at the Effective Date are as
follows (in thousands):
<TABLE>
<CAPTION>

                                                        Pre-          Discharge                                    Reorganized
                                                      Emergence          of            Exit       Fresh Start        Balance
                                                    Balance Sheet     Debt (1)      Financing(2) Adjustments(3)       Sheet
                                                  ---------------  -------------   ------------  -------------    -------------
<S>                                              <C>              <C>             <C>            <C>              <C>
                           Assets
Current assets:
   Cash and cash equivalents...................    $     13,229    $        --     $      7,768   $         --    $     20,997
   Restricted cash.............................             190              --          15,027             --          15,217
   Accounts receivable, net....................          55,557              --              --             --          55,557
   Marine operating supplies...................          13,525              --              --         (2,654)         10,871
   Prepaid expenses............................           5,832              --             125             --           5,957
                                                   ------------    ------------    ------------   ------------    ------------
     Total current assets......................          88,333              --          22,920         (2,654)        108,599
   Vessels and equipment, net..................       1,017,600              --              --       (325,555)        692,045
   Deferred costs, net.........................          32,309         (10,399)         11,194         (4,679)         28,425
   Restricted investments......................           3,752              --              --             --           3,752
   Goodwill, net...............................          88,052              --              --        (88,052)             --
   Other.......................................           3,996              --              --           (220)          3,776
                                                   ------------    ------------    ------------   ------------    ------------
                                                   $  1,234,042    $    (10,399)   $     34,114   $   (421,160)   $    836,597
                                                   ============    ============    ============   ============    ============

        Liabilities and Stockholders' Equity
Current liabilities:
   Accounts payable............................    $     10,998    $         --    $         --   $         --    $     10,998
   Current maturities of long-term debt........          30,041              --         (13,269)            --          16,772
   Current obligations under capital leases....           3,326              --              --             --           3,326
   Accrued interest............................          21,073         (19,337)           (322)            --           1,414
   Accrued liabilities and other...............          40,625              --            (145)            --          40,480
                                                   ------------    ------------    ------------   ------------    ------------
     Total current liabilities.................         106,063         (19,337)        (13,736)            --          72,990

Long-term debt.................................         497,909              --         (38,390)            --         459,519
Obligations under capital leases...............          34,098              --              --             --          34,098
Senior notes...................................         300,000        (300,000)         76,644             --          76,644
Other..........................................           3,743              --              --          2,109           5,852

Company-obligated mandatorily redeemable
  preferred securities of subsidiary trust
  holding solely debentures issued by the
   Predecessor Company.........................         115,000        (115,000)             --             --              --
Minority interest..............................          20,603              --              --             --          20,603

Stockholders' equity:
   (Predecessor Company)
       Class A common stock....................              13              --              --            (13)             --
     Class B common stock......................               2              --              --             (2)             --
   (Successor Company)
     Class A common stock......................              --             100              --             --             100

Additional paid-in capital.....................         197,142         154,881          11,910       (197,142)        166,791
Retained earnings (accumulated deficit)........         (40,531)        268,957          (2,314)      (226,112)             --
                                                   ------------    ------------    ------------   ------------    ------------
     Total stockholders' equity................         156,626         423,938           9,596       (423,269)        166,891
                                                   ------------    ------------    ------------   ------------    ------------
                                                   $  1,234,042    $    (10,399)   $     34,114   $   (421,160)   $    836,597
                                                   ============    ============    ============   ============    ============
</TABLE>

(1)  To record the discharge of prepetition obligations pursuant to the Plan.
(2)  To record the repayment of the debtor-in-possession credit facility and the
     issuance of the Exit Financing and related issuance costs.
(3)  To record the assets and liabilities  pursuant to fresh start reporting and
     to eliminate the Predecessor Company historical equity accounts.

<PAGE>



4.       Debt

         The  Company's  five  double-hull  product  and  chemical  tankers  are
financed through Title XI Government Guaranteed Ship Financing Bonds. There is 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  $224.2  million  at  December  31,  2000.
Principal  payments  during 2000 were $3.8  million and interest  payments  were
$15.7 million.

         Covenants  under the Title XI Bond agreements  contain  financial tests
which,  if not met,  among other things (1) restrict the  withdrawal of capital;
(2)  restrict  certain  payments,  including  dividends,  increases  in employee
compensation  and payments of other  indebtedness;  (3) limit the  incurrence of
additional  indebtedness;  and (4)  prohibit  the Company  from  making  certain
investments or acquiring additional fixed assets.  Vessels with a net book value
of $243.0  million,  and all  contract  rights  thereof,  have been  secured  as
collateral in  consideration  of the United States  Government  guarantee of the
Title XI Bonds.

         The  Company is required  to make  deposits to a Title XI reserve  fund
based on a percentage of net income  attributable  to the operations of the five
double-hull  tankers, as defined by the Title XI Bond agreement.  Cash held in a
Title XI reserve  fund is invested  by the  trustee of the fund,  and any income
earned  thereon is either paid to the  Company or retained in the reserve  fund.
Withdrawals  from the Title XI reserve  fund may be made for  limited  purposes,
subject to prior approval from MARAD. To date, no deposits have been required.

         As of December 2000, other Title XI debt of approximately $25.8 million
was  collateralized  by first  preferred  mortgages on certain vessels and bears
interest  at rates  ranging  from 5.4% to 10.1%.  The debt is due in semi-annual
principal and interest  payments through June 2021. Under the terms of the Other
Title XI debt,  the Company is  required to maintain a minimum  level of working
capital, as defined, and comply with certain other financial  covenants.  During
2000,  $5.5 million in principal and $2.4 million in interest was repaid on this
debt.

         In December 1999, the Company issued a promissory note of approximately
$8.6  million to increase  its equity  interest in its  double-hull  product and
chemical  carriers  from  50.8% to  75.75%.  The note  bears  interest  at 8.5%.
Semi-annual  interest and principal  payments are due through  December 2003. In
December 2000, the Company signed an agreement to purchase the remaining  24.25%
equity  interest.  The purchase was completed in January 2001, and was funded by
$0.5  million in cash and a note  payable  in the amount of $10.5  million at an
interest rate of 8.5%. Quarterly principal and interest payments are due through
January 2006.

         In December  1999,  the Company  entered into a Credit  Facility  ("the
Credit  Facility"),  consisting  of  $200.0  million  of term  loans and a $25.0
million revolving line of credit,  and issued Senior Notes (see below). The term
loans consist of three  facilities of $75.0 million,  $30.0  million,  and $95.0
million  maturing over 5, 6, and 7 years,  respectively.  The revolving  line of
credit  is  subject  to a  commitment  fee of 0.5% on the  unused  portion.  The
revolving  line of credit  matures on December 15, 2004.  The $75.0 million term
loan and the  revolving  line of credit  accrue  interest  at the Base Rate,  as
defined, of 6.65% plus 3.25% (9.90% at December 31, 2000). The $30.0 million and
$95.0 million term loans accrue  interest at the Base Rate plus 3.75% (10.40% at
December  31,  2000) and Base Rate plus 4.25%  (10.90% at  December  31,  2000),
respectively.

         At December 31, 2000, the Company had letters of credit  outstanding in
the amount of approximately $1.7 million,  which expire on various dates through
December  2002.  This  amount  is  collateralized  against  the  maximum  amount
available  under the  revolving  line of  credit.  The amount  available  to the
Company under the revolving  line of credit,  without prior approval of the bank
group,  was  decreased  from $25.0 million to $17.5 million as part of the first
amendment to the credit agreement.

         Covenants under the Credit  Facility,  among other things,  (i) require
the Company to meet certain  financial  tests,  including  tests  requiring  the
maintenance  of minimum  leverage  ratios,  debt service  coverage  ratios,  and
indebtedness to tangible worth ratios;  (ii) limit the creation or incurrence of
certain liens; (iii) limit the incurrence of additional indebtedness; (iv) limit
the Company from making  certain  investments;  (v) limit sales of assets;  (vi)
require  maintenance of certain appraised market collateral values;  (vii) limit
transactions  with affiliates and changes in business;  and (viii) limit mergers
and consolidations.

         The  Company  was not in  compliance  at March 31,  2000  with  certain
covenants contained in its Credit Facility. An amendment to the credit agreement
was executed in April 2000 which  required the Company to prepay an aggregate of
$60.0 million in principal  under the term loans by the end of 2000. The Company
paid a fee of $4.5 million to the lending banks in connection with the amendment
in the  form  of a  promissory  note,  accruing  interest  at  15.0%  compounded
quarterly, due the earlier of (i) April 2002 or (ii) the date on which the ratio
of funded  indebtedness  to EBITDA for any quarter is less then four to one. The
$4.5 million loan fee was  capitalized to deferred  financing costs and is being
amortized  over the  remaining  term of the Credit  Facility  using the interest
method.  Subsequent  amendments  throughout  the  year  reduced  the  prepayment
requirements  and then  abolished  them all together.  At December 31, 2000, the
Company was in compliance with the covenants contained in its Credit Facility.

         Long-term debt consists of the following at December 31 (in thousands):
<TABLE>
<CAPTION>

                                                                                    2000             1999
                                                                               ---------------  ---------------
<S>                                                                            <C>              <C>
     Revolving line of credit.............................................     $        14,250  $            --
     Term loan............................................................             168,861          200,000
     Title XI debt........................................................             249,928          259,206
     Notes payable........................................................              27,080           24,338
                                                                               ---------------  ---------------
                                                                                       460,119          483,544
     Less:  Current maturities............................................              33,270           17,775
                                                                               ---------------  ---------------
                                                                               $       426,849  $       465,769
                                                                               ===============  ===============
</TABLE>

Senior Notes

         In December 1999, the Company issued $95.0 million face amount of 12.5%
senior secured lien notes, Series A (the "Senior Notes") with 536,193 detachable
common stock  purchase  warrants and an original issue discount of $9.5 million.
As determined by the  Company's  management,  the fair value of the warrants was
estimated to be  approximately  $8.9  million and was recorded as an  additional
discount on the Senior Notes.  The Senior Notes were  recorded at  approximately
$76.6  million,  net of discounts  and  offering  costs of  approximately  $18.4
million.  The discount is being  amortized  through the maturity  date using the
effective  interest method  (amortization of $1.4 million in 2000).  Interest on
the Senior Notes is payable quarterly in arrears.

         Of the  proceeds,  approximately  $69.8  million  was  used to  repay a
portion  of the  Predecessor  Company's  indebtedness  and  approximately  $15.2
million  was used to  establish  an  interest  escrow  account to fund  interest
payments through December 2000.

         The Senior Notes mature in June 2007 and are redeemable, in whole or in
part, at the Company's option at the redemption amount, as defined, plus accrued
and unpaid  interest.  In addition,  upon a change in control,  as defined,  the
Company must redeem the Senior Notes at 101.0% of the stated  principal  amount,
plus accrued and unpaid interest.

         In April 2000, the Company had not yet received a necessary rating from
the rating  agencies  required under the  indenture,  thus the interest rate was
increased  from 12.5% to 13.5%.  The  incremental  interest is to be paid by the
issuance of $514,583,  $238,786, and $239,383 of additional Senior Notes on June
30, September 30, and December 31, 2000, respectively.  The Company is currently
seeking the appropriate ratings, which would return the interest rate to 12.5%.

         In August 2000,  the Company  consummated an exchange offer pursuant to
which the holders of the Senior Notes had the right to exchange  them for Series
B Senior Notes that are  registered  under the  Securities Act in like principal
amount and with identical terms.

         The Senior  Notes are  secured by  substantially  all the assets of the
Company (See Note 17).  Covenants  require the Company to meet certain financial
tests  and,  among  other  things,   (1)  limit  the  incurrence  of  additional
indebtedness;  (2) limit the  creation  or  incurrence  of  certain  liens;  (3)
restrict certain payments and investments;  and (4) restrict certain asset sales
and affiliate transactions.

         The aggregate  annual future  payments due on the Debt and Senior Notes
as of December 31, 2000 are as follows (in thousands):

      2001...............................................    $        33,270
      2002...............................................             27,942
      2003...............................................             32,915
      2004...............................................             34,388
      2005...............................................             35,034
      Thereafter.........................................            392,563
                                                             ---------------
                                                                     556,112
      Less discount on Senior Notes......................             16,885
                                                             ---------------
                                                             $       539,227
                                                             ===============

5.       Capital Leases

         The Company  operates  certain vessels and other equipment under leases
that are  classified  as capital  leases.  The following is a schedule of future
minimum  lease  payments  under  capital  leases,  including  obligations  under
sale-leaseback transactions,  together with the present value of the net minimum
lease payments as of December 31, 2000 (in thousands):

      2001..................................................... $         6,117
      2002.....................................................           5,269
      2003.....................................................           5,128
      2004.....................................................           4,897
      2005.....................................................           4,876
      Thereafter...............................................          27,551
                                                                ---------------
      Total minimum lease payments.............................          53,838
      Less amount representing interest........................          15,540
                                                                ---------------
      Present value of minimum lease payments (including
           current portion of $3,580).......................... $        38,298
                                                                ===============
6.       Commitments and Contingencies

Commitments

         The Company  leases its office  facilities  and certain  vessels  under
operating  lease  agreements  which expire at various dates  through 2013.  Rent
expense was  approximately  $4.4 million,  $5.6 million and $5.9 million for the
years ended December 31, 2000,  1999 and 1998,  respectively.  Aggregate  annual
future payments due under  non-cancelable  operating leases with remaining terms
in excess of one year are as follows (in thousands):

      2001...............................     $             4,254
      2002...............................                   3,224
      2003...............................                   2,180
      2004...............................                   2,109
      2005...............................                   1,996
      Thereafter.........................                   6,364
                                              -------------------
                                              $            20,127
                                              ===================

Contingencies

         Under United States law,  "United States  persons" are prohibited  from
performing contracts in support of an industrial,  commercial, public utility or
governmental  project in the Republic of Sudan, or facilitating such activities.
During  several  months in 1999,  three  vessels  owned by  subsidiaries  of the
Company  performed  services for third parties in support of energy  exploration
activities in Sudan; one of these vessels  performed such services until January
31, 2000. The Company has filed a report of these  activities with the Office of
Foreign  Assets  Control of the United States  Department  of the Treasury.  The
Company  had  also   reported   these   activities   to  the  Bureau  of  Export
Administration of the U.S. Department of Commerce. Should either of the agencies
determine  that  these  activities   constituted   violations  of  the  laws  or
regulations  administered by them,  civil and/or criminal  penalties,  including
fines,  could be assessed  against the Company  and/or certain  individuals  who
knowingly  participated in such  activities.  The Company cannot predict whether
any such penalties will be imposed or the nature or extent of such penalties.

         In J. Erik Hvide and Betsy  Hvide v.  Hvide  Marine  Incorporated,  No.
5640-02,  a civil  action  filed in March 2000 in the  Circuit  Court of Broward
County,  Florida,  the  Company's  former chief  executive  officer and his wife
alleged  that the Company had  breached an  agreement  to provide Mr. Hvide with
severance  benefits valued at approximately $1.0 million.  In addition,  Mr. and
Mrs. Hvide alleged that the Company's conduct, constituted an intentional course
of conduct  calculated to cause them emotional and public  humiliation for which
they sought unspecified  punitive damages.  In January 2001, the Company and Mr.
and Mrs. Hvide settled the lawsuit,  which did not have a material impact on the
Company's financial condition or results of operations.

         The Company is sometimes  named as a defendant in  litigation,  usually
relating to claims for bodily injuries or property damage. The Company maintains
insurance  coverage  against  such  claims  to  the  extent  deemed  prudent  by
management  and  applicable  deductible  amounts  are accrued at the time of the
incident.  The  Company  believes  that  there  are  no  existing  claims  of  a
potentially  material  adverse  nature  for  which it has not  already  provided
appropriate accruals.

         At December 31, 2000,  approximately  16.0% 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.

7.       Vessels and Equipment

         Vessels and equipment are summarized below (in thousands):
<TABLE>
<CAPTION>

                                                                          Year ended December 31,
                                                                       2000                    1999
                                                              ---------------------   --------------------
<S>                                                         <C>                     <C>
     Vessels and improvements............................     $            691,006    $            700,324
     Furniture and equipment.............................                   12,516                  11,643
                                                              --------------------    --------------------
                                                                           703,522                 711,967
     Less accumulated depreciation and amortization......                   63,626                  22,087
                                                              --------------------    --------------------
     Vessels and equipment, net..........................     $            639,896    $            689,880
                                                              ====================    ====================
</TABLE>

         In 2000,  the Company  acquired two vessels;  one under a cash purchase
agreement and the other under a capital lease agreement, for total consideration
of approximately $7.6 million. The Company is also under contract to purchase an
additional vessel for approximately $2.5 million.

         In 2000, the Company sold 39 vessels,  and scrapped one tanker pursuant
to its OPA 90 mandated  retirement  date,  for proceeds of  approximately  $25.7
million.  The proceeds  were used  primarily to repay a portion of the Company's
term loans.

         In 1999, the Predecessor Company sold ten vessels for net cash proceeds
of  approximately  $32.9  million.  The proceeds  were  primarily  used to repay
amounts outstanding under the Predecessor  Company's Credit Facility.  For 1999,
loss on disposal of assets  includes loss on vessels sold and the  forfeiture of
deposits and progress  payments on, and  settlement  of,  canceled  shipbuilding
contracts.

         During  1999 and  1998,  the  Company  capitalized  approximately  $1.9
million and $5.4 million,  respectively, in interest related to the construction
of vessels. There was no interest capitalized during 2000.

8.       Stock Option Plans

         In August 1996, the  Predecessor  Company  adopted an Equity  Ownership
Plan (the  "EOP"),  which  provided  for the  issuance of a maximum of 2,000,000
shares of the Predecessor Company's Class A Common Stock. Under the terms of the
EOP,  options were  generally  granted to employees at exercise  prices not less
than the fair market value of the underlying  common stock at the date of grant.
Option terms ranged from 5 to 10 years.

         The Stock  Option Plan for  Directors  provided  for the  issuance of a
maximum of 70,000 shares of the  Predecessor  Company's  Class A common stock to
directors of the  Predecessor  Company.  The exercise  price for all options was
equal to the fair market  value of the  underlying  common  stock at the date of
grant, and the term of the options was 10 years.

          On the Effective Date, all rights and awards granted under the EOP and
Stock  Option  Plan for  Directors  were  canceled.  The  holders  of options to
purchase  common stock  issuable  under these plans received a pro rata share of
the 125,000 Class A warrants issued by the Successor Company (See Note 11).

         On the Effective Date, the Successor Company adopted a new stock option
plan, which provides certain key employees of the Successor Company the right to
acquire  shares of common  stock.  Pursuant to the plan,  500,000  shares of the
Successor  Company's  common stock are reserved for issuance to the participants
in the form of nonqualified stock options. Options may be granted at an exercise
price not less than 100.0% of the fair  market  value of the  underlying  common
stock on the date of grant.  The options  expire no later than 10 years from the
date of the grant.

         Pursuant to the Successor plan,  options to purchase  200,000 shares of
the Successor Company's common stock were granted to certain senior employees on
the  Effective  Date.  One-half of these  options  vested  automatically  on the
Effective Date, and the remaining  options vested 91 days  thereafter.  On March
13, 2000,  the  Compensation  Committee  approved  the  exercise  price of these
options at $12.47 per share.

         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
Hvide Marine  Incorporated Stock Option Plan, which was adopted in December 1999
(the "1999 Plan").  Pursuant to the Plan,  800,000 shares of the Company's stock
are reserved  for issuance to  participants  in the form of  nonqualified  stock
options.  The vesting and certain other terms of the stock options granted under
the Plan  will be  determined  by the  Compensation  Committee  of the  Board of
Directors  (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.  Options
granted under this Plan totaled 415,000 at December 31, 2000.

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


<PAGE>



         The following  table of data is presented in connection  with the stock
option plans:
<TABLE>
<CAPTION>

                                             Successor Company                              Predecessor Company
                                                           Period from              Period from
                                     Year Ended            December 16,              January 1               Year Ended
                                    December 31,          to December 31,          to December 15,          December 31,
                                        2000                   1999                     1999                    1998
                               ---------------------  ---------------------    ---------------------   ---------------------
                                           Weighted                Weighted                 Weighted              Weighted
                                  Number   average        Number   average         Number   average      Number    average
                                   of      exercise       of       exercise        of       exercise       of      exercise
                                 options     price      options      price       options      price      options     price
                               ---------- ----------  ----------  ----------   ----------  ----------  ---------- ----------
<S>                          <C>         <C>         <C>         <C>         <C>          <C>        <C>          <C>
Options outstanding at
  beginning of period........     200,000 $   12.47           --  $      --       987,675  $   12.60      894,025 $    14.83

  Granted....................     495,000      7.16      200,000       12.47      379,441       6.06      221,350      13.61

  Exercised..................          --        --           --         --            --          --        (100)     12.00
  Canceled...................     (91,000)    11.33           --         --    (1,367,116)     10.78     (127,600)     29.35
                               ---------- ---------   ----------  ---------    ----------  ---------   ---------- ----------
Options outstanding
  at end of period...........     604,000 $    8.27      200,000  $    12.47           --  $       --     987,675 $    12.60
                               ========== =========   ==========  ==========   ==========  ==========  ========== ==========


Options exercisable
  at end of period...........    207,000     12.11      100,000         --            --          --     228,325      12.73
Options available for
  future grants at end of
  period.....................     371,000        --     300,000         --            --          --     891,700        --
</TABLE>


Exercise prices for options outstanding as of December 31, 2000 range from $6.25
to $12.47.

         The weighted  average fair value of options granted under the Successor
Company's stock option plans during 2000 were $6.65.  The weighted  average fair
value of options  granted  under the  Predecessor  Company's  stock option plans
during the period from  January 1, 1999  through  December 15, 1999 and for 1998
were $5.72 and $7.98, respectively.  These values are based on the Black-Scholes
option valuation  model.  Had  compensation  expense for the stock option grants
been determined based on the fair value at the grant date for awards  consistent
with the methods of SFAS No. 123,  the  Company's  net income  (loss) would have
decreased to the pro forma  amounts  presented  below for 2000,  the period from
January 1, 1999 to December  15, 1999 and 1998 (in  thousands,  except per share
amounts):

<TABLE>
<CAPTION>

                                                                              January 1 to
                                                                2000        December 15, 1999          1998
                                                           ------------     ---------------------  ------------
<S>                                                      <C>              <C>                      <C>
    Net income (loss):
    As reported........................................   $     (28,952)   $          (248,355)    $     21,748
    Pro forma..........................................         (31,823)              (250,863)          20,261

    Earnings (loss) per share--assuming dilution:
    As reported........................................           (2.89)                (16.02)            1.35
    Pro forma..........................................           (3.17)                (16.18)            1.27
</TABLE>









         The fair  value of each  option is  estimated  on the date of the grant
using the  Black-Scholes  option-pricing  model with the  following  assumptions
applied to grants in 2000, the period from January 1, 1999 to December 15, 1999,
and 1998:
<TABLE>
<CAPTION>

                                                                         January 1 to
                                                         2000          December 15, 1999         1998
                                                     ------------   --------------------    ------------
<S>                                                  <C>            <C>                     <C>
    Dividend yield..............................             0.0%                   0.0%           0.0%
    Expected volatility factor..................           1.21                   1.39           0.68
    Approximate risk-free interest rate.........             5.0%                   6.5%           4.5%
    Expected life (in years)....................             10                      6              6
</TABLE>

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

9.       Employee Benefit and Stock Plans

         The  Company   sponsors  a  retirement  plan  and  trust  (the  "Plan")
established  pursuant to Section  401(k) of the  Internal  Revenue  Code,  which
covers  substantially  all  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.  For 2000, 1999, and
1998 the Company contributed  approximately $2.0 million,  $1.9 million and $2.7
million, respectively, to the Plan.

         The 1996 Stock Purchase Plan (the "1996 Plan") provided for the sale of
a maximum of 500,000 shares of the Predecessor Company's Class A common stock to
employees  of the Company at a price  equal to 85.0% of the market  value of the
Predecessor  Company's  common stock at the  beginning  or end of each  purchase
period,  whichever was lower.  Participants  under the 1996 Plan received 79,678
and  112,319  shares of  Predecessor  Company's  common  stock in 1999 and 1998,
respectively.

         The Key Employee Stock Compensation Plan provided for the issuance of a
maximum of 65,000 shares of the  Predecessor  Company's  Class A common stock to
key employees.  Key employees could elect to receive up to 50.0% of their annual
incentive compensation denominated in shares of the Predecessor Company's common
stock at the fair  value of the  shares  at the date of  issuance.  No shares of
common stock were issued under the Key Employee Stock Compensation Plan.

         The Board of Directors Stock Compensation Plan was approved in 1997 and
provided  for the  issuance  of a maximum  of 30,000  shares of the  Predecessor
Company's common stock to non-employee  directors.  Each eligible director could
elect to  convert  all or a portion of their  fees for  attendance  at Board and
committee  meetings into shares of the Predecessor  Company's  common stock at a
20.0% discount from the fair value of the shares at the date of issuance. Shares
issued  pursuant  to  the  plan  were  14,374  and  55,048  in  1998  and  1999,
respectively.

         On the  Effective  Date,  all rights and awards  granted under the 1996
Stock Purchase Plan, the Key Employee Stock  Compensation  Plan and the Board of
Directors  Stock  Compensation  Plan were canceled.  The holders of common stock
issuable under these plans received a pro rata share of 125,000 Class A warrants
issued by the Successor Company (See Note 11).

10.      Income Taxes

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

<TABLE>
<CAPTION>

                                                        Successor Company                     Predecessor Company
                                                                      Period from       Period from
                                                  Year Ended        December 16 to     January 1 to         Year Ended
                                                 December 31,        December 31,      December 15,        December 31,
                                              -----------------   -----------------  -----------------  -----------------
                                                     2000                1999              1999                1998
                                              -----------------   -----------------  -----------------  -----------------
<S>                                          <C>                 <C>                <C>                <C>
United States............................     $          (1,502)  $            (855) $        (314,447) $          (2,525)
Foreign..................................               (22,578)               (710)          (232,555)            39,364
                                              -----------------   -----------------  -----------------  -----------------
  Total..................................     $         (24,080)  $          (1,565) $        (547,002) $          36,839
                                              =================   =================  =================  =================
</TABLE>


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

                                                        Successor Company                     Predecessor Company
                                                                      Period from       Period from
                                                  Year Ended        December 16 to     January 1 to         Year Ended
                                                 December 31,        December 31,      December 15,        December 31,
                                              -----------------   -----------------  -----------------  -----------------
                                                     2000                1999              1999                1998
                                              -----------------   -----------------  -----------------  -----------------
<S>                                           <C>                <C>                <C>                <C>
Current:
  Federal................................     $              --   $              --  $          (2,234) $              --
  Foreign................................                 4,872                  --              2,234              4,603
                                              -----------------   -----------------  -----------------  -----------------
     Total current.......................                 4,872                  --                 --              4,603
                                              -----------------   -----------------  -----------------  -----------------

Deferred.................................                    --                  --            (32,004)             8,886
                                              -----------------   -----------------  -----------------  -----------------
  Total income tax expense (benefit).....     $           4,872   $              --  $         (32,004) $          13,489
                                              =================   =================  =================  =================
</TABLE>


         A reconciliation  of income tax  attributable to continuing  operations
computed at the U.S. federal statutory tax rates to income tax expense is:

<TABLE>
<CAPTION>

                                                             Successor Company                 Predecessor Company
                                                                         Period from        Period from
                                                        Year Ended     December 16 to      January 1 to        Year Ended
                                                       December 31,     December 31,       December 15,       December 31,
                                                    ---------------- -----------------   -----------------  --------------
                                                           2000             1999               1999               1998
                                                    ---------------- -----------------   -----------------  --------------
<S>                                                 <C>              <C>                 <C>                <C>
Income tax expense computed at the
  federal statutory rate.........................            (35)%             (35)%                 (35)%             35%
State income taxes, net of Federal benefit.......             (1)               (1)                   (1)               1
Foreign taxes in excess of credits recognized....             20                --                     --              --
Reduction of tax attributes......................             --                --                    20               --
Change in valuation allowance....................             35                36                     8               --
Permanent, non deductible items..................              1                --                     2                1
                                                    ------------     -------------       ---------------    -------------
                                                              20%                0%                   (6)%             37%
                                                    ============     =============       ===============    =============
</TABLE>




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

                                                                                Year Ended December 31,
                                                                               2000               1999
                                                                         -----------------  -----------------
<S>                                                                     <C>                 <C>
       Deferred income tax assets:
         Allowances for doubtful accounts............................    $           2,347  $           1,978
         Goodwill....................................................               19,560             22,752
         Property differences........................................                   --             12,804
         Accrued compensation........................................                   --                840
         Foreign tax credit carryforwards............................               11,338              5,448
         Net operating loss carryforwards............................               53,068                 --
         Other.......................................................                2,939              4,007
                                                                         -----------------  -----------------
            Total deferred income tax assets.........................               89,252             47,829
            Less:  valuation allowance...............................               57,396             43,252
                                                                         -----------------  -----------------
            Net deferred income tax assets...........................               31,856              4,577

       Deferred income tax liabilities:
         Property differences........................................               25,445                 --
         Deferred drydocking costs...................................                5,284              2,569
         Other.......................................................                1,127              2,008
                                                                         -----------------  -----------------
            Total deferred income tax liabilities....................               31,856              4,577
                                                                         -----------------  -----------------
            Net deferred income tax assets...........................    $              --  $              --
                                                                         =================  =================
</TABLE>

         SFAS No. 109 requires a valuation  allowance to reduce the deferred tax
assets reported if, based on the weight of the evidence,  it is more likely than
not that some  portion or all of the  deferred  tax assets will not be realized.
After consideration of all the evidence, both positive and negative,  management
determined that a valuation  allowance of approximately  $57.4 million and $43.2
million was necessary at December 31, 2000 and 1999, respectively, to reduce the
deferred  tax assets to the amount that will more  likely than not be  realized.
After  application  of the valuation  allowance,  the Company's net deferred tax
assets and liabilities are zero at December 31, 2000 and 1999. The net change in
the total  valuation  allowance for the years ended  December 31, 2000 and 1999,
was an increase of approximately $14.1 million and $43.2 million, respectively.

         Subsequently,   recognized  tax  benefits  relating  to  the  valuation
allowance  for  deferred tax assets as of December 31, 2000 will be allocated as
follows (in thousands):
<TABLE>
<CAPTION>

<S>                                                                                                 <C>
Income tax benefit that would be reported in the consolidated statement of operations...........       $   14,144
Additional paid-in capital......................................................................           43,252
                                                                                                       ----------
     Total......................................................................................       $   57,396
                                                                                                       ==========
</TABLE>


         At December 31, 2000, the Company has a net operating loss carryforward
of  approximately  $148.5  million,  which is available to offset future federal
taxable   income   through  2020.  The  Company  also  has  foreign  tax  credit
carryforwards,  expiring in years 2002  through  2005,  of  approximately  $11.3
million, which are available to reduce future federal income tax liabilities.

         In 1999, the Company  reported a gain of $266.6 million  resulting from
the  extinguishment of indebtedness that occurred from the bankruptcy  discharge
on the  Effective  Date.  Pursuant to Section 108 of the Internal  Revenue Code,
this gain was excluded  from income  taxation and certain tax  attributes of the
Company were  eliminated  or reduced,  up to the amount of such income  excluded
from taxation.  As a result,  the Company's net operating  loss and  alternative
minimum  tax credit and  capital  loss  carryforwards  in the  amounts of $242.5
million,  $2.0 million and $2.7 million,  respectively,  were eliminated and the
tax basis in the Company's assets was reduced by $15.3 million, representing the
Company's  discharge of indebtedness income in excess of its net operating loss,
alternative  minimum  tax  credit  and  cpaital  loss  carryforwards  as of  the
Effective Date.

         As of December 31,  1999,  the Company had a tax basis in its assets in
excess of its basis for  financial  reporting  purposes  that will  generate tax
deductions in future periods.  As a result of a "change in ownership"  under the
Internal   Revenue  Code  Section   382,  the   Company's   ability  to  utilize
depreciation,   amortization  and  other  tax  attributes  will  be  limited  to
approximately  $9.5 million per year through 2004. This limitation is applied to
all net built-in  losses which  existed on the "change of  ownership"  date (the
Effective Date), including all items giving rise to a deferred tax asset.

11.      Stockholder's Equity

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

         Pursuant to the articles of incorporation  of the Successor,  there are
20 million shares of common stock  authorized for issuance,  of which 10 million
were  granted  at  the  Effective  Date  in  exchange  for  Predecessor  Company
liabilities, as discussed in Note 3.

         At the Effective Date, holders of the Predecessor  Company's  Preferred
Securities  received 0.2 million  shares of Successor  Company  common stock and
125,000  Class A warrants.  The warrants  have a four-year  term and an exercise
price of $38.49 per share.

         At the Effective Date, the holders of the Predecessor  Company's Senior
Notes,  discussed in Note 3,  received 9.8 million  shares of Successor  Company
common stock.

         As discussed in Note 4, the holders of Senior  Notes  received  536,193
common stock purchase warrants ("the Noteholder Warrants").  The warrants have a
six and  one-half  year  term and an  exercise  price of $0.01 per  warrant.  As
determined  by the  Company's  management,  the fair value of the  warrants  was
approximately $8.9 million and was recorded as a component of additional paid-in
capital of the Successor.

         Also in connection with the issuance of the Senior Notes, the Successor
Company  issued an  additional  187,668  Noteholder  Warrants  to an  investment
advisor.  They have a six and one-half year term and an exercise  price of $0.01
per warrant. As determined by the Company's management,  the fair value of these
warrants  was  estimated  to be  approximately  $3.5 million and was recorded as
deferred  financing  costs.  During the year ended  December  31,  2000,  89,000
Noteholder Warrants were exercised.

         All of the Successor 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  Successor  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, 2000,  1,859,712  shares of Common Stock were  reserved
for issuance under the Successor Company's Amended and Restated Equity Ownership
Plan, the Stock Option Plan for Directors and outstanding warrants.

         During 2000,  the Company  granted  28,200 shares of restricted  common
stock to certain key employees. Compensation expense for this award was recorded
in salaries and benefits for approximately $174,000.

12.      Earnings Per Share

         The  following  table sets forth the  computation  of basic and diluted
earnings (loss) per share before  extraordinary  item (in thousands,  except per
share amounts):
<TABLE>
<CAPTION>

                                                               Successor Company                   Predecessor Company
                                                                            Period from       Period from
                                                         Year Ended       December 16 to      January 1 to     Year Ended
                                                        December 31,       December 31,       December 15,    December 31,
                                                     ---------------    ---------------   ----------------- ----------------
                                                            2000               1999             1999               1998
                                                     ----------------   ----------------  ----------------- ----------------
<S>                                                 <C>                 <C>              <C>                <C>
Numerator:
Numerator for basic earnings per
  share--income (loss) before
  extraordinary item available
  to common shareholders..........................   $        (28,952)  $         (1,565) $       (514,998) $         23,350

Effect of dilutive securities:
Payments on convertible preferred securities......                 --                 --                --             4,635
                                                     ----------------   ----------------  ----------------  ----------------
Numerator for diluted earnings per share--income
  (loss) available to common shareholders
  after assumed conversions.......................            (28,952)  $         (1,565) $       (514,998) $         27,985
                                                     ================   ================  ================  ================

Denominator:
Denominator for basic earnings per
  share--weighted average shares..................             10,034             10,000            15,503            15,324

Effect of dilutive securities:
Convertible preferred securities..................                 --                 --                --             4,035
Deferred compensation(a)..........................                 --                 --                --                14
Stock options(b)..................................                 --                 --                --                78
Warrants(c).......................................                 --                 --                --                --
                                                     ----------------   ----------------  ----------------  ----------------
Dilutive potential common shares..................                 --                 --                --             4,127
                                                     ----------------   ----------------  ----------------  ----------------
Denominator for diluted earnings
  per share--adjusted weighted
  average shares and assumed conversions..........             10,034             10,000            15,503            19,451
                                                     ================   ================  ================  ================

Earnings (loss) per share before
  extraordinary item..............................   $         (2.89)   $         (0.16)  $        (33.22)  $          1.52
                                                     ===============    ===============   ===============   ===============
Earnings (loss) per share before
  extraordinary item--assuming
  dilution........................................   $         (2.89)   $         (0.16)  $        (33.22)  $          1.43
                                                     ===============    ===============   ===============   ===============
</TABLE>


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

(a)  Includes shares contingently issuable pursuant to the Predecessor Company's
     Key Employee Stock Plan (See Note 9).
(b)  Does not  include  604,000  and  200,000  stock  options  in 2000 and 1999,
     respectively, as these would be antidilutive.
(c)  Does  not  include   884,712  and  973,861   warrants  in  2000  and  1999,
     respectively, as these would be antidilutive.


<PAGE>



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 described
in Note 2. The Company does not have significant intersegment transactions.

         These segments and their respective operations are as follows:

         Offshore  Energy  Support - 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 productions platforms.

         Marine  Transportation   Services  -  Marine  transportation   services
         included  oceangoing  and  inland-waterway  vessels  used to  transport
         chemicals,  fuel and other petroleum products,  primarily from chemical
         manufacturing plants,  refineries and storage facilities along the U.S.
         Gulf of Mexico coast to industrial users and distribution facilities in
         and around the Gulf of Mexico,  Atlantic  and  Pacific  coast ports and
         inland  rivers.  Marine  transportation  services  also  includes  work
         performed in the Company's  shipyard  facilities at Greencove  Springs,
         Florida.

         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 environmental regulations, casualty or
         other emergency.

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

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


<PAGE>



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

                                                              Successor Company                    Predecessor Company
                                                                           Period from       Period from
                                                        Year Ended       December 16 to     January 1 to         Year Ended
                                                       December 31,       December 31,      December 15,        December 31,
                                                    -----------------  -----------------  -----------------  ----------------
                                                           2000               1999              1999                1998
                                                    -----------------  -----------------  -----------------  ----------------
<S>                                                 <C>                <C>                <C>                <C>
Revenues
  Offshore energy support......................     $        151,395   $          5,610   $        144,702   $        242,655
  Marine transportation services...............              135,982              6,341            142,618            115,770
  Towing.......................................               33,106              1,528             41,431             46,368
                                                    ----------------   ----------------   ----------------   ----------------
     Total.....................................     $        320,483   $         13,479   $        328,751   $        404,793
                                                    ================   ================   ================   ================

Operating expenses
  Offshore energy support......................     $         94,331   $          4,168   $         95,811   $        114,369
  Marine transportation services...............               91,104              3,134             96,993             77,674
  Towing.......................................               19,791                745             19,949             21,558
                                                    ----------------   ----------------   ----------------   ----------------
     Total.....................................     $        205,226   $          8,047   $        212,753   $        213,601
                                                    ================   ================   ================   ================

Depreciation, amortization and drydocking
  Offshore energy support......................     $         31,478   $          1,236   $         49,893   $         41,547
  Marine transportation services...............               14,417                623             22,855             16,876
  Towing.......................................                2,919                150              4,991              4,750
  General corporate............................                1,457                 60              1,671              1,071
                                                    ----------------   ----------------   ----------------   ----------------
     Total.....................................     $         50,271   $          2,069   $         79,410   $         64,244
                                                    ================   ================   ================   ================

Income (loss) from operations
  Offshore energy support......................     $         10,389   $           (429)  $        (20,686)  $         72,032
  Marine transportation services...............               23,893              2,385             15,354             12,951
  Towing.......................................                5,096                394             11,106             14,532
  General corporate............................              (14,022)              (630)           (17,000)           (15,746)
                                                    ----------------   ----------------   ----------------   ----------------
     Total.....................................     $         25,356   $          1,720   $        (11,226)  $         83,769
                                                    ================   ================   ================   ================
</TABLE>


<PAGE>


<TABLE>
<CAPTION>

                                                                  Consolidated Balance Sheet Information
                                                                             as of December 31,

                                                                        2000                   1999
                                                               --------------------   -------------------
<S>                                                           <C>                    <C>
      Identifiable assets
        Offshore energy support............................    $           334,614    $           386,444
        Marine transportation services.....................                347,466                325,936
        Towing.............................................                 68,446                 81,364
        Unallocated........................................                 24,950                 36,996
                                                               -------------------    -------------------
           Total...........................................    $           775,476    $           830,740
                                                               ===================    ===================

      Vessels and equipment
        Offshore energy support............................    $           284,652    $           326,934
        Marine transportation services.....................                345,005                302,767
        Towing.............................................                 61,100                 69,278
                                                               -------------------    -------------------
           Total Vessels...................................                690,757                698,979
        Construction in progress...........................                    249                  1,345
        General corporate..................................                 12,516                 11,643
                                                               -------------------    -------------------
        Gross vessels and equipment........................                703,522                711,967
           Less accumulated depreciation...................                 63,626                 22,087
                                                               -------------------    -------------------
             Total.........................................    $           639,896    $           689,880
                                                               ===================    ===================

      Capital expenditures and drydocking
        Offshore energy support............................    $            17,596    $            33,060
        Marine transportation services.....................                  8,341                 29,035
        Towing.............................................                  5,530                  1,992
        Unallocated........................................                     26                    138
                                                               -------------------    -------------------
           Total...........................................    $            31,493    $            64,225
                                                               ===================    ===================
</TABLE>

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

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

         One  customer,  CITGO  Petroleum,  accounted for 12.0% of the Company's
total revenue for the year ended  December 31, 2000.  The revenue  received from
CITGO  was   approximately   $38.6   million,   which   related  to  the  marine
transportation services segment.




<PAGE>

         The following table presents selected financial information  pertaining
to the Company's geographic operations for 2000, 1999 and 1998 (in thousands):

<TABLE>
<CAPTION>

                                                              Successor Company                    Predecessor Company
                                                                           Period from       Period from
                                                        Year Ended       December 16 to     January 1 to         Year Ended
                                                       December 31,       December 31,      December 15,        December 31,
                                                    -----------------  -----------------  -----------------  ----------------
                                                           2000               1999              1999                1998
                                                    -----------------  -----------------  -----------------  ----------------
<S>                                                 <C>                <C>              <C>                 <C>
Revenues
  Domestic....................................      $        223,579   $         10,039   $        232,067   $        253,117
  Foreign
     West Africa..............................                48,268              1,658             45,295             69,736
     Middle East..............................                34,242              1,524             38,811             55,878
     Southeast Asia...........................                14,394                258             12,578             26,062
                                                    ----------------   ----------------   ----------------   ----------------
Consolidated revenues.........................      $        320,483   $         13,479   $        328,751   $        404,793
                                                    ================   ================   ================   ================
</TABLE>

<TABLE>
<CAPTION>

                                                                  Consolidated Balance Sheet Information
                                                                                as of December 31,

                                                                            2000                   1999
                                                                  --------------------   -------------------
<S>                                                              <C>                     <C>
         Identifiable assets
           Domestic..........................................     $           566,862    $           544,317
           Foreign
              West Africa....................................                 102,926                113,174
              Middle East....................................                  50,728                102,160
              Southeast Asia.................................                  30,009                 34,093
           Other.............................................                  24,951                 36,996
                                                                  -------------------    -------------------
              Total..........................................     $           775,476    $           830,740
                                                                  ===================    ===================

         Vessels and equipment
           Domestic..........................................     $           544,631    $           491,641
           Foreign
              West Africa....................................                  85,942                 94,349
              Middle East....................................                  34,903                 81,749
              Southeast Asia.................................                  25,530                 32,585
                                                                  -------------------    -------------------
                                                                              691,006                700,324
           General corporate.................................                  12,516                 11,643
                                                                  -------------------    -------------------
                                                                              703,522                711,967
           Less accumulated depreciation.....................                  63,626                 22,087
                                                                  -------------------    -------------------
              Total..........................................     $           639,896    $           689,880
                                                                  ===================    ===================
</TABLE>

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 approximates fair value due to the current maturity of such instruments.

         Senior Notes,  Term Loan, and Title XI. The Senior Notes, Term Loan and
Title XI  obligations  provide for  interest and  principal  payments at various
rates and dates as discussed in Note 4. The Company  estimates the fair value of
such  obligations  using a discounted  cash flow  analysis at  estimated  market
rates.  The following  table  presents the carrying  value and fair value of the
financial instruments at December 31, 2000 and 1999:
<TABLE>
<CAPTION>

                                                                            December 31,
                                                           2000                                       1999
                                        -----------------------------------------  ----------------------------------------
                Issue                    Carrying Value           Fair Value        Carrying Value           Fair Value
-----------------------------------     -------------------  -------------------   -------------------  -------------------
<S>                                   <C>                   <C>                   <C>                   <C>
Senior notes.......................     $             79.1   $             99.9    $             76.7   $             95.0
Term loans.........................                  168.9                168.9                 200.0                200.0
Title XI...........................                  249.9                262.8                 259.2                252.4
</TABLE>


         Revolving Line of Credit.  Amounts outstanding under the revolving line
of credit provide for interest at variable rates that are periodically  adjusted
to reflect changes in overall market rates and therefore approximate fair value.

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

         Interest  Rate Cap.  In February  2000,  the  company  entered  into an
interest rate cap as a requirement of its Credit Agreement.  The notional amount
of the cap was $75.0  million  with a term of three years and a strike  price of
8.5% based on an underlying index,  which was the three-month LIBOR. At December
31, 2000, the Company determined that the interest rate cap was impaired and the
unamortized premium of $0.4 million was written off.

15.      Extraordinary Items

         In February 1998, the Predecessor  Company repaid $268.0 million of its
outstanding  debt.  As a  result,  the  Company  recorded  a loss  on the  early
extinguishment  of approximately  $0.7 million,  net of an income tax benefit of
$0.4 million.

         In 1999, the Predecessor  Company was relieved of approximately  $421.6
million of  outstanding  debt and  related  accrued  interest  in  exchange  for
approximately  $155.0  million in equity  interests in the Successor  Company in
connection with the Plan. As a result,  the Predecessor  Company recorded a gain
on the early extinguishment of debt of approximately $266.6 million.

16.      Subsequent Events

         The Company  completed the acquisition of the remaining 24.25% interest
in its five double-hull tankers on January 15, 2001, pursuant to the exercise of
its  option  with  Newport  News  Shipbuilding,  Inc.  The  purchase  price  was
approximately  $11.0 million, of which $523,544 was paid in cash and the balance
was paid by a promissory  note in the principal  amount of $10.5 million payable
over five years in twenty  quarterly  installments of principal in the amount of
$525,000 each, plus accrued interest at 8.5% per annum. The Note is secured by a
pledge of certain  securities  of  subsidiaries  of the Company  relating to the
ownership  of the five tankers  pursuant to an Amended and  Restated  Pledge and
Security Agreement.


<PAGE>




17.      Supplemental Condensed Consolidating Financial Information

         The  Senior  Notes  described  in Note 4 are fully and  unconditionally
guaranteed on a joint and several basis by certain of the Company's consolidated
subsidiaries. A substantial portion of the Company's cash flows are generated by
its  subsidiaries.  As a  result,  the  funds  necessary  to meet the  Company's
obligations are provided in substantial  part by  distributions or advances from
its   subsidiaries.   Under   certain   circumstances,   contractual   or  legal
restrictions,  as  well  as the  financial  and  operating  requirements  of the
Company's  subsidiaries,  could limit the Company's  ability to obtain cash from
its  subsidiaries  for the purpose of meeting  its  obligations,  including  the
payments of principal and interest on the Senior Notes.

         The  following  is   summarized   condensed   consolidating   financial
information for the Company,  segregating  the Parent,  the domestic and foreign
guarantor   subsidiaries,    the   combined   non-guarantor   subsidiaries   and
eliminations.





<PAGE>



               Condensed Consolidating Statement of Operations
                              (in thousands)
<TABLE>
<CAPTION>

                                                                      Year Ended December 31, 2000
                                      -----------------------------------------------------------------------------------------
                                                        Domestic        Foreign          Non-                       Condensed
                                                        Guarantor      Guarantor       Guarantor                  Consolidated
                                         Parent       Subsidiaries   Subsidiaries    Subsidiaries  Eliminations       Total
                                      -------------  -------------  -------------   -------------  -------------  -------------
<S>                                   <C>            <C>            <C>             <C>           <C>             <C>
Revenue  .........................    $      36,763  $     163,680  $      99,380   $      70,716  $     (50,056) $     320,483

Operating expenses................           26,877        119,086         61,557          41,797        (44,091)       205,226
Overhead expenses.................           14,120         12,387         12,923           4,879         (4,679)        39,630
Depreciation, amortization
  and drydocking..................            3,667         16,002         19,679          10,923             --         50,271
                                      -------------  -------------  -------------   -------------  -------------  -------------
Income (loss) from operations.....           (7,901)        16,205          5,221          13,117         (1,286)        25,356

Other expense, net................          (16,179)       (19,903)       (32,817)        (24,475)        43,938        (49,436)
                                      -------------  -------------  -------------   -------------  -------------  -------------
Loss before income taxes..........          (24,080)        (3,698)       (27,596)        (11,358)        42,652        (24,080)
Provision for income taxes........            4,872             --             --              --             --          4,872
                                      -------------  -------------  -------------   -------------  -------------  -------------
Net loss..........................    $     (28,952) $      (3,698) $     (27,596)  $     (11,358) $      42,652  $     (28,952)
                                      =============  =============  ============= = =============  =============  =============
</TABLE>



<PAGE>






                Condensed Consolidating Statement of Operations
                           (in thousands)

<TABLE>
<CAPTION>

                                                     For the Period from December 16, 1999 to December 31, 1999
                                    -------------------------------------------------------------------------------------------
                                                      Domestic        Foreign          Non-                       Condensed
                                                      Guarantor      Guarantor       Guarantor                  Consolidated
                                       Parent       Subsidiaries   Subsidiaries    Subsidiaries  Eliminations       Total
                                    -------------  -------------  -------------   -------------  -------------  -------------
<S>                                 <C>           <C>             <C>            <C>            <C>            <C>
Revenue  .........................  $       2,118  $       7,050  $       3,466   $       3,203  $      (2,358) $      13,479

Operating expenses................          1,385          5,272          2,717             993         (2,320)         8,047
Overhead expenses.................            625            396            664             194           (236)         1,643
Depreciation, amortization
  and drydocking..................            222            663            782             402             --          2,069
                                    -------------  -------------  -------------   -------------  -------------  -------------
Income (loss) from operations.....           (114)           719           (697)          1,614            198          1,720

Other expense, net................         (1,451)         2,735         (1,080)            (90)        (3,399)        (3,285)
                                    -------------  -------------  -------------   -------------  -------------  -------------
Net income (loss).................  $      (1,565) $       3,454  $      (1,777)  $       1,524  $      (3,201) $      (1,565)
                                    =============  =============  =============   =============  =============  =============
</TABLE>



<PAGE>



              Condensed Consolidating Statement of Operations
                            (in thousands)
<TABLE>
<CAPTION>

                                                      For the Period from January 1, 1999 to December 15, 1999
                                    -------------------------------------------------------------------------------------------
                                                      Domestic        Foreign          Non-                       Condensed
                                                      Guarantor      Guarantor       Guarantor                  Consolidated
                                       Parent       Subsidiaries   Subsidiaries    Subsidiaries  Eliminations       Total
<S>                                <C>            <C>            <C>             <C>            <C>            <C>
Revenue  .........................  $      48,598  $     177,476  $     101,879   $      60,999  $     (60,201) $     328,751

Operating expenses................         30,122        138,469         65,204          33,666        (54,708)       212,753
Overhead expenses.................         16,842         13,210         16,879           6,499         (5,616)        47,814
Depreciation, amortization
   and drydocking.................         12,105         23,945         33,848           9,524            (12)        79,410
                                    -------------  -------------  -------------   -------------  -------------  -------------
Income (loss) from operations.....        (10,471)         1,852        (14,052)         11,310            135        (11,226)

Other expense, net................       (445,072)      (331,884)       (36,067)        (17,963)       728,483       (102,503)
                                    -------------  -------------  -------------   -------------  -------------  -------------
Income (loss) before
  reorganization items,
  income taxes....................       (455,543)      (330,032)       (50,119)         (6,653)       728,618       (113,729)

Reorganization items:
  Professional fees...............         (8,535)            --             --              --             --         (8,535)
  Write down of goodwill
   and property...................        (79,868)      (123,900)      (209,099)         (2,730)        (4,401)      (419,998)
  Other, net......................         (4,154)          (586)            --              --             --         (4,740)
                                    -------------  -------------  -------------   -------------  -------------  -------------
     Total reorganization items...        (92,557)      (124,486)      (209,099)         (2,730)        (4,401)      (433,273)
                                    -------------  -------------  -------------   -------------  -------------  -------------
Loss before income taxes and
  extraordinary item..............       (548,100)      (454,518)      (259,218)         (9,383)       724,217       (547,002)
Provision for income taxes........        (32,004)            --             --              --             --        (32,004)
                                    -------------  -------------  -------------   -------------  -------------  -------------
Loss before extraordinary item....       (516,096)      (454,518)      (259,218)         (9,383)       724,217       (514,998)
Gain (loss) on early
  extinguishment of debt, net
  of applicable income taxes......        267,741         (1,098)            --              --             --        266,643
                                    -------------  -------------  -------------   -------------  -------------  -------------
Net loss..........................  $    (248,355) $    (455,616) $    (259,218)  $      (9,383) $     724,217  $    (248,355)
                                    =============  =============  =============   =============  =============  =============
</TABLE>



<PAGE>



              Condensed Consolidating Statement of Operations
                            (in thousands)
<TABLE>
<CAPTION>

                                                                       Year Ended December 31, 1998
                                       -------------------------------------------------------------------------------------------
                                                         Domestic        Foreign          Non-                        Condensed
                                                         Guarantor      Guarantor       Guarantor                   Consolidated
                                          Parent       Subsidiaries   Subsidiaries    Subsidiaries  Eliminations        Total
                                       -------------  -------------  -------------   -------------  -------------  -------------
<S>                                   <C>            <C>            <C>            <C>             <C>             <C>
Revenue  ...........................   $      69,616  $     232,130  $     220,133   $      16,822  $    (133,908) $     404,793

Operating expenses..................          40,444        156,121         71,038           5,858        (59,860)       213,601
Overhead expenses...................          17,846         10,862         14,487           5,626         (5,642)        43,179
Depreciation, amortization
  and drydocking....................          13,690         20,928         26,120           3,506             --         64,244
                                       -------------  -------------  -------------   -------------  -------------  -------------
Income (loss) from operations.......          (2,364)        44,219        108,488           1,832        (68,406)        83,769

Other expense, net..................          38,335         58,636        (94,447)            (99)       (49,355)       (46,930)
                                       -------------  -------------  -------------   -------------  -------------  -------------
Income before income taxes and
  extraordinary item................          35,971        102,855         14,041           1,733       (117,761)        36,839
Provision for income taxes..........          13,489             --             --              --             --         13,489
                                       -------------  -------------  -------------   -------------  -------------  -------------
Income before extraordinary item....          22,482        102,855         14,041           1,733       (117,761)        23,350
Loss on early extinguishment
  of debt, net of applicable
  income taxes......................            (734)            --             --            (868)            --         (1,602)
                                       -------------  -------------  -------------   -------------  -------------  -------------
Net income..........................   $      21,748  $     102,855  $      14,041   $         865  $    (117,761) $      21,748
                                       =============  =============  =============   =============  =============  =============
</TABLE>



<PAGE>



        Condensed Consolidating Statement of Cash Flows
                       (in thousands)
<TABLE>
<CAPTION>

                                                                           Year Ended December 31, 2000
                                               ------------------------------------------------------------------------------------
                                                             Domestic        Foreign        Non-                         Condensed
                                                             Guarantor      Guarantor     Guarantor                    Consolidated
                                                 Parent    Subsidiaries  Subsidiaries   Subsidiaries  Eliminations         Total
                                               ---------   ----------    ------------  ------------   ------------    -------------
<S>                                          <C>           <C>          <C>           <C>            <C>            <C>
Net cash provided by (used in)
  operating activities.......................  $  46,864   $   18,743    $    (55,387) $     16,056   $         --    $      26,276

Investing activities:
 Purchases of property.......................    (29,323)     (34,559)         54,174        (2,339)            --          (12,047)
 Expenditures for drydocking.................     (2,251)      (6,110)         (4,788)       (1,217)            --          (14,366)
 Redemption of restricted investments........         --           --              --         2,931             --            2,931
 Proceeds from disposals of assets...........         --       21,146           4,564            --             --           25,710
                                               ---------   ----------    ------------  ------------   ------------    -------------
  Net cash provided by (used in)
    investing activities.....................    (31,574)     (19,523)         53,950          (625)            --            2,228

Financing activities:
Repayments of short-term borrowings..........     14,250           --              --            --             --           14,250
Repayment of long-term borrowings............    (32,390)          --              --        (1,000)            --          (33,390)
Repayment of Title XI bonds..................         --           --              --        (9,282)            --           (9,282)
Payments of financing costs..................         --         (596)             --            --             --             (596)
Proceeds from sale/leaseback of vessels......         --           --              --            --             --               --
Payments of obligations under
   capital leases............................       (579)      (3,721)             --            --             --           (4,300)
Proceeds from issuance of common stock.......          1           --              --            --             --                1
                                               ---------   ----------    ------------  ------------   ------------    -------------
  Net cash used in financing activities......    (18,718)      (4,317)             --       (10,282)            --          (33,317)
                                               ---------   ----------    ------------  ------------   ------------    -------------
Change in cash and cash equivalents..........     (3,428)      (5,097)         (1,437)        5,149             --           (4,813)
Cash and cash equivalents at
   beginning of year.........................      4,830        2,907           7,817         3,492             --           19,046
                                               ---------   ----------    ------------  ------------   ------------    -------------
Cash and cash equivalents at
   end of year...............................  $   1,402   $   (2,190)   $      6,380  $      8,641   $         --    $      14,233
                                               =========   ==========    ============  ============   ============    =============

</TABLE>




<PAGE>

                 Condensed Consolidating Statement of Cash Flows
                                (in thousands)
<TABLE>
<CAPTION>

                                                     For the Period from December 16, 1999 to December 31, 1999
                                      ------------------------------------------------------------------------------------------
                                                        Domestic        Foreign         Non-                         Condensed
                                                        Guarantor      Guarantor      Guarantor                    Consolidated
                                         Parent       Subsidiaries   Subsidiaries   Subsidiaries   Eliminations        Total
                                      ------------   ------------   ------------   ------------    ------------   -------------
<S>                                  <C>            <C>            <C>            <C>             <C>           <C>
Net cash provided by (used in)
  operating activities..............  $     21,151   $       (538)  $      1,971   $      1,084    $    (21,107)  $       2,561

Investing activities:
Purchases of property...............            --             42           (500)          (139)             --            (597)
Acquisitions of businesses..........        (1,000)            --             --             --              --          (1,000)
Expenditures for drydocking.........            65           (833)          (656)            --              --          (1,424)
                                      ------------   ------------   ------------   ------------    ------------   -------------
 Net cash used in investing
   activities.......................          (935)          (791)        (1,156)          (139)             --          (3,021)

Financing activities:
Proceeds from long-term borrowings..            --            (80)            --             --              --             (80)
Repayment of Title XI bonds.........        (1,252)            --             --             --              --          (1,252)
Payments of obligations under
  capital leases....................           (36)          (123)            --             --              --            (159)
Capital contribution (to)
 from consolidated
 affiliates.........................       (21,707)           279             --            321          21,107              --
                                      ------------   ------------   ------------   ------------    ------------   -------------
  Net cash used in financing
    activities......................       (22,995)            76             --            321          21,107          (1,491)
                                      ------------   ------------   ------------   ------------    ------------   -------------
Change in cash and cash equivalents.        (2,779)        (1,253)           815          1,266              --          (1,951)
Cash and cash equivalents
 at beginning of period.............         7,609          4,160          7,002          2,226              --          20,997
                                      ------------   ------------   ------------   ------------    ------------   -------------
Cash and cash equivalents
  at end of period..................  $      4,830   $      2,907   $      7,817   $      3,492    $         --   $      19,046
                                      ============   ============   ============   ============    ============   =============
</TABLE>





<PAGE>



              Condensed Consolidating Statement of Cash Flows
                               (in thousands)
<TABLE>
<CAPTION>

                                                          For the Period from January 1, 1999 to December 15, 1999
                                          ------------------------------------------------------------------------------------------
                                                            Domestic        Foreign         Non-                         Condensed
                                                            Guarantor      Guarantor      Guarantor                   Consolidated
                                             Parent       Subsidiaries   Subsidiaries   Subsidiaries   Eliminations        Total
                                          ------------   ------------   ------------   ------------    ------------   -------------
<S>                                      <C>            <C>            <C>            <C>             <C>           <C>
Net cash provided by (used in)
  operating activities..................  $    193,780   $    (47,750)  $     21,953   $     (2,925)   $   (150,131)  $      14,927

Investing activities:
Purchases of property...................       (13,043)           171        (27,755)       (13,672)         (2,845)        (57,144)
Expenditures for drydocking.............        (1,481)        (2,054)        (1,305)          (220)             --          (5,060)
Payments on vessels under construction..            --         (5,102)            --             --              --          (5,102)
Purchases of restricted investments.....            --             --             --        (45,790)             --         (45,790)
Redemption of restricted investments....            --             --             --         65,382              --          65,382
Proceeds from disposal of assets........        15,045          8,700          9,107             --              --          32,852
                                          ------------   ------------   ------------   ------------    ------------   -------------
 Net cash provided by (used in)
   investing activities.................           521          1,715        (19,953)         5,700          (2,845)        (14,862)

Financing activities:
Proceeds from DIP credit facility.......        26,690             --             --             --              --          26,690
Proceeds from long-term borrowings......       231,008         14,200             --             --              --         245,208
Repayment of long-term borrowings.......      (287,299)          (906)            --             --              --        (288,205)
Proceeds from issuance of Senior
 Notes and warrants.....................        85,500             --             --             --              --          85,500
Proceeds from issuance of
 Title XI bonds.........................            --             --             --          5,428              --           5,428
Repayment of Title XI bonds.............        (3,670)          (539)                       (2,434)             --          (6,643)
Escrow of restricted cash...............       (15,027)          (190)            --             --              --         (15,217)
Payments of financing costs.............       (12,186)            --             --           (492)             --         (12,678)
Payments of obligations
 under capital leases...................          (563)        (2,257)            --             --              --          (2,820)
Proceeds from issuance of
 common stock...........................           253             --             --             --              --             253
Repayment of DIP credit facility........       (26,690)            --             --             --              --         (26,690)
Capital contribution (to)
 from consolidated affiliates...........      (186,109)        37,788             --         (4,655)        152,976              --
                                          ------------   ------------   ------------   ------------    ------------   -------------
  Net cash provided by (used in)
    financing activities................      (188,093)        48,096             --         (2,153)        152,976          10,826
                                          ------------   ------------   ------------   ------------    ------------   -------------
Change in cash and cash equivalents.....         6,208          2,061          2,000            622              --          10,891
Cash and cash equivalents at
 beginning of period....................         1,401          2,099          5,002          1,604              --          10,106
                                          ------------   ------------   ------------   ------------    ------------   -------------
Cash and cash equivalents at
 end of period..........................  $      7,609   $      4,160   $      7,002   $      2,226    $         --   $      20,997
                                          ============   ============   ============   ============    ============   =============
</TABLE>








<PAGE>



                Condensed Consolidating Statement of Cash Flows
                              (in thousands)
<TABLE>
<CAPTION>

                                                                         Year Ended December 31, 1998
                                           ----------------------------------------------------------------------------------------
                                                             Domestic        Foreign         Non-                         Condensed
                                                             Guarantor      Guarantor      Guarantor                    Consolidated
                                              Parent       Subsidiaries   Subsidiaries   Subsidiaries   Eliminations        Total
                                           ------------   ------------   ------------   ------------    ------------   ------------
<S>                                       <C>            <C>            <C>             <C>            <C>            <C>
Net cash provided by (used in)
 operating activities....................  $    (34,283)  $     72,508   $     23,671   $     29,495    $       (538)  $     90,853

Investing activities:
Purchases of property....................       (15,803)       (31,140)       (44,917)       (23,479)            818       (114,521)
Acquisitions of businesses...............      (341,442)       (61,070)      (299,917)            44         328,850       (373,535)
Expenditures for drydocking..............        (9,019)        (8,379)        (5,611)          (640)           (286)       (23,935)
Payments on vessels under construction...            --             --             --       (155,980)             --       (155,980)
Purchases of restricted investments......            --             --             --       (369,629)             --       (369,629)
Redemption of restricted investments.....            --             --             --        515,584              --        515,584
Capital contributions to
 consolidated affiliates.................        (3,233)            --             --             --              --         (3,233)
                                           ------------   ------------   ------------   ------------    ------------   ------------
 Net cash used in investing activities...      (369,497)      (100,589)      (350,445)       (34,100)        329,382       (525,249)

Financing activities:
Proceeds from long-term borrowings.......       431,700             --             --             --              --        431,700
Repayment of long-term borrowings........      (313,746)          (192)            --             --              --       (313,938)
Proceeds from issuance of Senior
 Notes and warrants......................       292,500             --             --             --              --        292,500
Proceeds from issuance of
 Title XI bonds..........................            --             --             --        139,023              --        139,023
Repayment of Title XI bonds..............        (6,693)          (647)            --       (129,910)             --       (137,250)
Payments of financing costs..............        (2,760)            --             --         (8,059)             --        (10,819)
Proceeds from sale-leaseback
 of vessels..............................        10,025         22,597             --             --              --         32,622
Payments of obligations under
 capital leases..........................          (552)        (4,536)            --             --              --         (5,088)
Proceeds from issuance of
 common stock............................           800             --             --             --              --            800
Capital contribution (to) from
 consolidated affiliates.................        (8,603)         8,193        324,117          5,137        (328,844)            --
                                           ------------   ------------   ------------   ------------    ------------   ------------
  Net cash provided by financing
   activities............................       402,671         25,415        324,117          6,191        (328,844)       429,550
                                           ------------   ------------   ------------   ------------    ------------   ------------
Change in cash and cash equivalents......        (1,109)        (2,666)        (2,657)         1,586              --         (4,846)
Cash and cash equivalents at
 beginning of year.......................         2,510          4,185          8,239             18              --         14,952
                                           ------------   ------------   ------------   ------------    ------------   ------------
Cash and cash equivalents at
 end of year.............................  $      1,401   $      1,519   $      5,582   $      1,604    $         --   $     10,106
                                           ============   ============   ============   ============    ============   ============

</TABLE>

<PAGE>



                  Condensed Consolidating Balance Sheet
                              (in thousands)
<TABLE>
<CAPTION>

                                                                         As of December 31, 2000
                                       -----------------------------------------------------------------------------------------
                                                         Domestic        Foreign          Non-                       Condensed
                                                         Guarantor      Guarantor       Guarantor                  Consolidated
                                          Parent       Subsidiaries   Subsidiaries    Subsidiaries  Eliminations       Total
                                       -------------  -------------  -------------   -------------  -------------  -------------
<S>                                    <C>           <C>            <C>            <C>             <C>            <C>
Assets
Current assets:
  Cash and cash equivalents..........  $       1,402  $      (2,190) $       6,380   $       8,641  $          --  $      14,233
  Restricted cash....................            331             --             --              --             --            331
  Accounts receivable:
     Trade, net......................          1,607         24,011         24,298           4,314           (704)        53,526
     Insurance claims and other......          1,029          3,060          8,751             336             --         13,176
  Marine operating supplies..........           (695)         2,466          3,503           4,364             --          9,638
  Prepaid expenses...................            568            920          1,177             390             --          3,055
                                       -------------  -------------  -------------   -------------  -------------  -------------
     Total current assets............          4,242         28,267         44,109          18,045           (704)        93,959
Vessels and equipment, net...........         47,349        186,174        129,344         277,029             --        639,896
Deferred costs, net..................         17,268          7,926          4,427           8,538             --         38,159
Restricted investments...............             --             --             --             865             --            865
Due from affiliates..................       (141,953)        63,892        117,788         (36,247)        (3,480)            --
Other................................        509,352        327,407          1,771          37,435       (873,368)         2,597
                                       -------------  -------------  -------------   -------------  -------------  -------------
  Total assets.......................  $     436,258  $     613,666  $     297,439   $     305,665  $    (877,552) $     775,476
                                       =============  =============  =============   =============  =============  =============

Liabilities and Stockholders'
Equity
Current liabilities:
  Accounts payable...................  $         976  $       4,847  $       6,300   $         783  $          --  $      12,906
  Current maturities of
   long-term debt....................         27,226          1,960             --           4,084             --         33,270
  Current obligations under
    capital leases...................             --          3,580             --              --             --          3,580
  Accrued interest...................            454            492             --             731             --          1,677
  Accrued liabilities and other......          7,552          4,676         17,719           4,597           (704)        33,840
                                       -------------  -------------  -------------   -------------  -------------  -------------
     Total current liabilities.......         36,208         15,555         24,019          10,195           (704)        85,273

Long-term debt.......................        181,451         25,333             --         220,065             --        426,849
Obligations under capital leases.....             --         34,718             --              --             --         34,718
Senior notes.........................         79,108             --             --              --             --         79,108
Other liabilities....................          2,944            424            785              42             --          4,195
                                       -------------  -------------  -------------   -------------  -------------  -------------
  Total liabilities..................        299,711         76,030         24,804         230,302           (704)       630,143

Commitment and contingencies

Minority interest....................             --             --             --              --          8,819          8,819

Total stockholders' equity...........        136,547        537,636        272,635          75,363       (885,667)       136,514
                                       -------------  -------------  -------------   -------------  -------------  -------------
  Total liabilities and
    stockholders' equity.............  $     436,258  $     613,666  $     297,439   $     305,665  $    (877,552) $     775,476
                                       =============  =============  =============   =============  =============  =============
</TABLE>


<PAGE>



                    Condensed Consolidating Balance Sheet
                                (in thousands)
<TABLE>
<CAPTION>

                                                                         As of December 31, 1999
                                       -----------------------------------------------------------------------------------------
                                                         Domestic        Foreign          Non-                       Condensed
                                                         Guarantor      Guarantor       Guarantor                  Consolidated
                                           Parent      Subsidiaries   Subsidiaries    Subsidiaries  Eliminations       Total
                                       -------------  -------------  -------------   -------------  -------------  -------------
<S>                                   <C>            <C>            <C>            <C>             <C>           <C>
Assets
Current assets:
  Cash and cash equivalents........... $       4,830  $       2,907  $       7,817   $       3,492  $          --  $      19,046
  Restricted cash.....................        15,027            190             --              --             --         15,217
  Accounts receivable:
     Trade, net.......................         1,804         23,728         17,579           5,132           (688)        47,555
     Insurance claims and other.......         1,866          2,150          5,881             516           (785)         9,628
  Marine operating supplies...........          (465)         2,481          3,810           4,806             --         10,632
  Prepaid expenses....................           933            918          1,675             487             --          4,013
                                       -------------  -------------  -------------   -------------  -------------  -------------
     Total current assets.............        23,995         32,374         36,762          14,433         (1,473)       106,091
Vessels and equipment, net............        14,918        180,997        208,892         285,073             --        689,880
Deferred costs, net...................        14,962          4,615          1,454           8,433             --         29,464
Restricted investments................            --             --             --           3,752             --          3,752
Due from affiliates...................       (82,320)        52,899         67,633         (34,733)        (3,479)            --
Other.................................       537,880        353,694            400          43,038       (933,459)         1,553
                                       -------------  -------------  -------------   -------------  -------------  -------------
  Total assets........................ $     509,435  $     624,579  $     315,141   $     319,996  $    (938,411) $     830,740
                                       =============  =============  =============   =============  =============  =============

Liabilities and Stockholders' Equity
Current liabilities:
  Accounts payable.................... $       1,383  $       4,236  $       4,329   $         947  $          --  $      10,895
  Current maturities of
   long-term debt.....................        12,065          1,891             --           3,819             --         17,775
  Current obligations under
   capital leases.....................           555          2,777             --              --             --          3,332
  Accrued interest....................         2,418             --             --             684             --          3,102
  Accrued liabilities and other.......        18,685          7,579          9,635           3,063         (1,473)        37,489
                                       -------------  -------------  -------------   -------------  -------------  -------------
     Total current liabilities........        35,106         16,483         13,964           8,513         (1,473)        72,593

Long-term debt........................       214,212         27,410             --         224,147             --        465,769
Obligations under capital leases......        13,662         20,272             --              --             --         33,934
Senior notes..........................        76,709             --             --              --             --         76,709
Other liabilities.....................         4,425            561            738             228             --          5,952
                                       -------------  -------------  -------------   -------------  -------------  -------------
  Total liabilities...................       344,114         64,726         14,702         232,888         (1,473)       654,957

Commitment and contingencies

Minority interest.....................            --             --             --              --         10,457         10,457

Total stockholders' equity............       165,321        559,853        300,439          87,108       (947,395)       165,326
                                       -------------  -------------  -------------   -------------  -------------  -------------
  Total liabilities and
    stockholders' equity.............. $     509,435  $     624,579  $     315,141   $     319,996  $    (938,411) $     830,740
                                       =============  =============  =============   =============  =============  =============
</TABLE>


<PAGE>



18.      Selected Quarterly Financial Information (unaudited)

         The  following  information  is  presented as  supplementary  financial
information for 2000 and 1999 (in thousands, except per share information):
<TABLE>
<CAPTION>

                                                                         Successor Company
                                             ----------------------------------------------------------------------
                                                  First             Second              Third           Fourth
      Year Ended December 31, 2000               Quarter            Quarter            Quarter          Quarter
      ----------------------------           ---------------    ---------------    ---------------  ---------------
<S>                                       <C>                 <C>                <C>                <C>
Revenues.................................    $      78,607      $      80,211      $      81,623    $      80,042
Income from operations...................            2,013              5,976              9,307            8,060
Net loss(1)(2)(3)........................          (12,909)            (3,251)            (3,142)          (9,650)
Earnings per share--basic:
  Loss before extraordinary item.........    $       (1.29)     $       (0.33)     $       (0.31)   $       (0.96)
  Net loss...............................            (1.29)             (0.33)             (0.31)           (0.96)
Earnings per share--assuming dilution(4):
  Loss before extraordinary item.........    $       (1.29)     $       (0.33)     $       (0.31)   $       (0.96)
  Net loss...............................            (1.29)             (0.33)             (0.31)           (0.96)
</TABLE>

<TABLE>
<CAPTION>

                                                                                                                         Successor
                                                                        Predecessor Company                               Company
                                             ----------------------------------------------------------------------   --------------
                                                                                                       Period from      Period from
                                                   First            Second             Third          October 1 to    December 16 to
      Year Ended December 31, 1999                Quarter           Quarter           Quarter         December 15,      December 31,
      ----------------------------           ---------------   ---------------   ---------------   -----------------  --------------
<S>                                         <C>              <C>               <C>                <C>               <C>
Revenues.................................    $      90,400     $      89,004     $      85,989     $        63,358    $      13,479
Income (loss) from operations............            4,431              (250)           (1,846)            (13,561)           1,720
Loss before extraordinary item(5)........           (9,064)          (23,718)          (20,107)           (462,109)          (1,565)
Gain on early extinguishment of debt(5)..               --                --                --             266,643               --
Net loss.................................           (9,064)          (23,718)          (20,107)           (195,466)          (1,565)
Earnings per share--basic:
  Loss before extraordinary item.........    $       (0.59)    $       (1.53)    $       (1.29)    $        (29.81)   $       (0.16)
  Net loss...............................            (0.59)            (1.53)            (1.29)             (12.61)           (0.16)
Earnings per share--assuming dilution(4):
  Loss before extraordinary item.........    $       (0.59)    $       (1.53)    $       (1.29)    $        (29.81)   $       (0.16)
  Net loss...............................    $       (0.59)            (1.53)            (1.29)             (12.61)           (0.16)
</TABLE>


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

(1)  Includes gains (losses) on the disposal of assets of $(0.2)  million,  $0.5
     million,  $4.0 million, and $(0.4) million in the first, second, third, and
     fourth quarters of 2000, respectively.

(2)  Includes gain of $7.0 million on the  settlement of a contingent  liability
     in the third quarter of 2000.

(3)  Includes  approximately $0.9 million in additional  depreciation expense in
     the fourth  quarter of 2000 as a result of the change in  estimated  useful
     lives of certain vessels (See Note 2).

(4)  The sum of the four quarters' earnings per share will not necessarily equal
     the annual  earnings per share,  as the  computations  for each quarter are
     independent of the annual computation.

(5)  Reflects  the  application  of Fresh  Start  Accounting  in the period from
     January 1, 1999 to December 15, 1999 (See Note 3).