Seacor (CKH) 10-Q 2010 Q3 Quarterly report

UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

WASHINGTON, DC 20549

FORM 10-Q

(Mark One)

x QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934

For the quarterly period ended September 30, 2010              or             

¨ TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934

For the transition period from              to             

Commission file number 1-12289

SEACOR Holdings Inc.

(Exact Name of Registrant as Specified in Its Charter)

Delaware	13-3542736
(State or Other Jurisdiction of Incorporation or Organization)	(IRS Employer Identification No.)
2200 Eller Drive, P.O. Box 13038,	33316
Fort Lauderdale, Florida	(Zip Code)
(Address of Principal Executive Offices)

954-523-2200

(Registrant’s Telephone Number, Including Area Code)

Not Applicable

(Former Name, Former Address and Former Fiscal Year, if Changed Since Last Report)

Indicate by check mark whether the registrant: (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days. Yes  x    No  ¨

Indicate by check mark whether the registrant has submitted electronically and posted on its corporate Web site, if any, every Interactive Data File required to be submitted and posted pursuant to Rule 405 of Regulation S-T (§232.405 of this chapter) during the preceding 12 months (or for such shorter period that the registrant was required to submit and post such files). Yes  x    No  ¨

Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, or a smaller reporting company. See definitions of “large accelerated filer,” “accelerated filer,” and “smaller reporting company” in Rule 12b-2 of the Exchange Act. (Check one):

Large accelerated filer  x Accelerated filer  ¨ Non-accelerated filer  ¨ (Do not check if a smaller reporting company) Smaller reporting company  ¨

Indicate by check mark whether the registrant is a shell company (as defined in Rule 12b 2 of the Exchange Act). Yes  ¨    No  x

The total number of shares of common stock, par value $.01 per share, outstanding as of October 25, 2010 was 21,241,915. The Registrant has no other class of common stock outstanding.

SEACOR HOLDINGS INC.

Table of Contents

Part I.	Financial Information		3
	Item 1.	Financial Statements (Unaudited)	3
		Condensed Consolidated Balance Sheets as of September 30, 2010 and December 31, 2009	3
		Condensed Consolidated Statements of Income for the Three and Nine Months Ended September 30, 2010 and 2009	4
		Condensed Consolidated Statement of Changes in Equity for the Nine Months Ended September 30, 2010	5
		Condensed Consolidated Statements of Cash Flows for the Nine Months Ended September 30, 2010 and 2009	6
		Notes to Condensed Consolidated Financial Statements	7
	Item 2.	Management’s Discussion and Analysis of Financial Condition and Results of Operations	24
	Item 3.	Quantitative and Qualitative Disclosures About Market Risk	49
	Item 4.	Controls and Procedures	49
Part II.	Other Information		50
	Item 1A.	Risk Factors	50
	Item 2.	Unregistered Sales of Equity Securities and Use of Proceeds	51
	Item 6.	Exhibits	52

2

PART I—FINANCIAL INFORMATION

ITEM 1. FINANCIAL STATEMENTS

SEACOR HOLDINGS INC.

CONDENSED CONSOLIDATED BALANCE SHEETS

(in thousands, except share data, unaudited)

	September 30, 2010			December 31, 2009
ASSETS
Current Assets:
Cash and cash equivalents	$	662,278		$	465,904
Restricted cash		14,823			34,014
Marketable securities		103,150			68,139
Receivables:
Trade, net of allowance for doubtful accounts of $3,838 and $3,608 in 2010 and 2009, respectively		512,131			301,143
Other		44,550			78,689
Inventories		66,024			76,949
Deferred income taxes		3,354			3,354
Prepaid expenses and other		17,570			15,725
Total current assets		1,423,880			1,043,917
Property and Equipment		2,899,150			2,833,011
Accumulated depreciation		(850,428	)		(754,263	)
Net property and equipment		2,048,722			2,078,748
Investments, at Equity, and Receivables from 50% or Less Owned Companies		148,334			186,814
Construction Reserve Funds & Title XI Reserve Funds		272,259			289,750
Goodwill		54,764			54,571
Intangible Assets		21,627			23,554
Other Assets, net of allowance for doubtful accounts of $1,870 and $2,301 in 2010 and 2009, respectively		52,846			46,265
	$	4,022,432		$	3,723,619
LIABILITIES AND EQUITY
Current Liabilities:
Current portion of long-term debt	$	13,809		$	36,436
Current portion of capital lease obligations		1,014			966
Accounts payable and accrued expenses		336,968			135,425
Other current liabilities		237,738			142,285
Total current liabilities		589,529			315,112
Long-Term Debt		681,268			748,704
Capital Lease Obligations		5,783			6,624
Deferred Income Taxes		586,466			575,440
Deferred Gains and Other Liabilities		88,130			111,848
Total liabilities		1,951,176			1,757,728
Equity:
SEACOR Holdings Inc. stockholders’ equity:
Preferred stock, $.01 par value, 10,000,000 shares authorized; none issued nor outstanding		—			—
Common stock, $.01 par value, 60,000,000 shares authorized; 35,823,148 and 35,550,934 shares issued in 2010 and 2009, respectively		358			356
Additional paid-in capital		1,196,445			1,182,023
Retained earnings		1,764,202			1,546,581
Shares held in treasury of 14,592,224 and 12,938,108 in 2010 and 2009, respectively, at cost		(891,887	)		(768,438	)
Accumulated other comprehensive loss:
Cumulative translation adjustments, net of tax		(3,417	)		(3,056	)
Derivative losses on cash flow hedges, net of tax		(4,151	)		(204	)
		2,061,550			1,957,262
Noncontrolling interests in subsidiaries		9,706			8,629
Total equity		2,071,256			1,965,891
	$	4,022,432		$	3,723,619

The accompanying notes are an integral part of these condensed consolidated financial statements

and should be read in conjunction herewith.

3

SEACOR HOLDINGS INC.

CONDENSED CONSOLIDATED STATEMENTS OF INCOME

(in thousands, except share data, unaudited)

	Three Months Ended September 30,						Nine Months Ended September 30,
	2010			2009			2010			2009
Operating Revenues	$	979,833		$	446,079		$	2,068,984		$	1,234,828
Costs and Expenses:
Operating		683,219			327,602			1,480,266			832,145
Administrative and general		50,627			41,926			137,626			120,666
Depreciation and amortization		41,312			40,272			124,317			119,364
		775,158			409,800			1,742,209			1,072,175
Gains on Asset Dispositions and Impairments, Net		23,896			5,783			41,953			22,528
Operating Income		228,571			42,062			368,728			185,181
Other Income (Expense):
Interest income		2,562			789			5,788			2,410
Interest expense		(10,274	)		(14,267	)		(33,862	)		(42,679	)
Debt extinguishment gains (losses), net		—			2,787			(368	)		4,072
Marketable security gains (losses), net		(54	)		6,948			(3,499	)		14,796
Derivative gains (losses), net		1,648			2,328			(297	)		9,704
Foreign currency gains (losses), net		7,585			(939	)		(2,616	)		6,566
Other, net		10			(57	)		656			132
		1,477			(2,411	)		(34,198	)		(4,999	)
Income Before Income Tax Expense and Equity In Earnings of 50% or Less Owned Companies		230,048			39,651			334,530			180,182
Income Tax Expense		87,709			15,751			127,424			66,866
Income Before Equity in Earnings of 50% or Less Owned Companies		142,339			23,900			207,106			113,316
Equity in Earnings of 50% or Less Owned Companies, Net of Tax		7,933			2,340			11,678			9,358
Net Income		150,272			26,240			218,784			122,674
Net Income (Loss) attributable to Noncontrolling Interests in Subsidiaries		334			(42	)		1,163			1,090
Net Income attributable to SEACOR Holdings Inc.	$	149,938		$	26,282		$	217,621		$	121,584
Basic Earnings Per Common Share of SEACOR Holdings Inc.	$	7.21		$	1.32		$	10.08		$	6.13
Diluted Earnings Per Common Share of SEACOR Holdings Inc.	$	7.14		$	1.23		$	9.99		$	5.53
Weighted Average Common Shares Outstanding:
Basic		20,786,721			19,867,226			21,590,917			19,824,913
Diluted		21,000,565			23,458,195			21,785,292			23,374,644

The accompanying notes are an integral part of these condensed consolidated financial statements

and should be read in conjunction herewith.

4

SEACOR HOLDINGS INC.

CONDENSED CONSOLIDATED STATEMENT OF CHANGES IN EQUITY

(in thousands, unaudited)

	SEACOR Holdings Inc. Stockholders’ Equity													Non- Controlling Interests In Subsidiaries			Total Equity			Comprehensive Income
	Common Stock		Additional Paid-In Capital			Retained Earnings		Shares Held In Treasury			Accumulated Other Comprehensive Loss
December 31, 2009	$	356	$	1,182,023		$	1,546,581	$	(768,438	)	$	(3,260	)	$	8,629		$	1,965,891
Issuance of common stock:
Employee Stock Purchase Plan		—		—			—		2,552			—			—			2,552
Exercise of stock options		—		2,169			—		—			—			—			2,169
Director stock awards		—		234			—		—			—			—			234
Restricted stock and restricted stock units		2		(5	)		—		154			—			—			151
Purchase of treasury shares		—		—			—		(125,982	)		—			—			(125,982	)
Amortization of share awards		—		11,844			—		—			—			—			11,844
Cancellation of restricted stock		—		173			—		(173	)		—			—
Purchase of subsidiary shares from noncontrolling interests		—		7			—		—			—			(46	)		(39	)
Dividends paid to noncontrolling interests		—		—			—		—			—			(450	)		(450	)
Cash received from noncontrolling interests		—		—			—		—			—			410			410
Comprehensive income:
Net income		—		—			217,621		—			—			1,163			218,784		$	218,784
Other comprehensive loss		—		—			—		—			(4,308	)		—			(4,308	)		(4,308	)
Nine months ended September 30, 2010	$	358	$	1,196,445		$	1,764,202	$	(891,887	)	$	(7,568	)	$	9,706		$	2,071,256		$	214,476

The accompanying notes are an integral part of these consolidated financial statements

and should be read in conjunction herewith.

5

SEACOR HOLDINGS INC.

CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS

(in thousands, unaudited)

	Nine Months Ended September 30,
	2010			2009
Net Cash Provided by Operating Activities	$	416,060		$	276,946
Cash Flows from Investing Activities:
Purchases of property and equipment		(173,729	)		(129,157	)
Proceeds from disposition of property and equipment		172,993			95,033
Cash settlements on derivative transactions, net		(1,585	)		(771	)
Investments in and advances to 50% or less owned companies		(41,262	)		(10,061	)
Return of investments and advances from 50% or less owned companies		22,125			1,774
Proceeds on sale of investments in 50% or less owned companies		—			136
Principal payments (advances) on third party notes receivable, net		1,367			(2,031	)
Net decrease (increase) in restricted cash		19,191			(8,566	)
Net decrease in construction reserve funds and Title XI reserve funds		17,491			14,886
Net increase in escrow deposits on like-kind exchanges		(738	)		—
Investments in leases, net		(16,366	)		(1,803	)
Business acquisitions, net of cash acquired		1,203			(1,955	)
Cash disposed on sale of subsidiary, net of cash proceeds on sale		—			(154	)
Net cash provided by (used in) investing activities		690			(42,669	)
Cash Flows from Financing Activities:
Payments on long-term debt and capital lease obligations		(72,166	)		(222,691	)
Net payments on inventory financing arrangements		(19,613	)		(16,789	)
Proceeds from issuance of long-term debt, net of offering costs		—			349,297
Common stock acquired for treasury		(125,982	)		—
Proceeds and tax benefits from share award plans		4,776			2,870
Purchase of subsidiary shares from noncontrolling interests		(39	)		(1,210	)
Dividends paid to noncontrolling interests, net		(40	)		(1,627	)
Net cash provided by (used in) financing activities		(213,064	)		109,850
Effects of Exchange Rate Changes on Cash and Cash Equivalents		(7,312	)		476
Net Increase in Cash and Cash Equivalents		196,374			344,603
Cash and Cash Equivalents, Beginning of Period		465,904			275,442
Cash and Cash Equivalents, End of Period	$	662,278		$	620,045

The accompanying notes are an integral part of these condensed consolidated financial statements

and should be read in conjunction herewith.

6

SEACOR HOLDINGS INC.

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

(unaudited)

1. Basis of Presentation and Accounting Policy

The condensed consolidated financial information for the three and nine months ended September 30, 2010 and 2009 has been prepared by the Company and has not been audited by its independent registered public accounting firm. The condensed consolidated financial statements include the accounts of SEACOR Holdings Inc. and its consolidated subsidiaries. In the opinion of management, all adjustments (consisting of normal recurring adjustments) have been made to present fairly the Company’s financial position as of September 30, 2010, its results of operations for the three and nine months ended September 30, 2010 and 2009, its changes in equity for the nine months ended September 30, 2010, and its cash flows for the nine months ended September 30, 2010 and 2009. Results of operations for the interim periods presented are not necessarily indicative of operating results for the full year or any future periods.

Certain information and footnote disclosures normally included in financial statements prepared in accordance with generally accepted accounting principles in the United States of America have been condensed or omitted. These condensed consolidated financial statements should be read in conjunction with the financial statements and related notes thereto included in the Company’s Annual Report on Form 10-K for the year ended December 31, 2009.

Unless the context otherwise indicates, any reference in this Quarterly Report on Form 10-Q to the “Company” refers to SEACOR Holdings Inc. and its consolidated subsidiaries and any reference in this Quarterly Report on Form 10-Q to “SEACOR” refers to SEACOR Holdings Inc.

Revenue Recognition.As of September 30, 2010, the Company had deferred $19.7 million of vessel charter hire scheduled to be paid through the conveyance of a limited net profit interest in developmental oil and gas producing properties owned by a customer. Of this amount, $9.5 million was deferred during the nine months ended September 30, 2010. The Company expects to defer an additional $1.5 million of vessel charter hire under this arrangement through November 2010. The customer has provided payout estimates indicating the Company will receive future payments of $3.3 million in 2010 and $17.9 million in 2011. Such payments are contingent upon future production. Production from the properties commenced in April 2010 and payments totaling $0.8 million were received and recognized as revenue during the nine months ended September 30, 2010. The Company will continue to recognize revenues as cash is received or earlier should future payments become determinable.

2. Fair Value Measurements

The fair value of an asset or liability is the price that would be received to sell an asset or transfer a liability (an exit price) in the principal or most advantageous market for the asset or liability in an orderly transaction between market participants on the measurement date. The Company utilizes a fair value hierarchy that maximizes the use of observable inputs and minimizes the use of unobservable inputs when measuring fair value and defines three levels of inputs that may be used to measure fair value.Level 1 inputs are quoted prices in active markets for identical assets or liabilities.Level 2 inputs are observable inputs other than quoted prices included inLevel 1 that are observable for the asset or liability, either directly or indirectly, including quoted prices for similar assets or liabilities in active markets, quoted prices in markets that are not active, inputs other than quoted prices that are observable for the asset or liability, or inputs derived from observable market data.Level 3 inputs are unobservable inputs that are supported by little or no market activity and are significant to the fair value of the assets or liabilities.

7

The Company’s financial assets and liabilities as of September 30, 2010 that are measured at fair value on a recurring basis were as follows (in thousands):

	Level 1		Level 2		Level 3
ASSETS
Marketable securities(1)	$	92,534	$	10,616	$	—
Derivative instruments (included in other receivables)		721		11,214		—
Construction reserve funds and Title XI reserve funds		272,259		—		—
LIABILITIES
Short sale of marketable securities (included in other current liabilities)		17,809		—		—
Derivative instruments (included in other current liabilities)		6,494		11,998		—

(1) Marketable security gains (losses), net include losses of $0.1 million and gains of $0.3 million for the three months ended September 30, 2010 and 2009, respectively, related to marketable security positions held by the Company as of September 30, 2010. Marketable security gains (losses), net include losses of $1.9 million and gains of $0.1 million for the nine months ended September 30, 2010 and 2009, respectively, related to marketable security positions held by the Company as of September 30, 2010.

The estimated fair value of the Company’s other financial assets and liabilities as of September 30, 2010 were as follows (in thousands):

	Carrying Amount		Estimated Fair Value
ASSETS
Cash, cash equivalents and restricted cash	$	677,101	$	677,101
Investments, at cost, in 50% or less owned companies (included in other assets)		7,847		see below
Notes receivable from other business ventures (included in other assets)		6,504		see below
LIABILITIES
Long-term debt, including current portion		695,077		724,956

The carrying value of cash, cash equivalents and restricted cash approximates fair value. The fair value of the Company’s long-term debt was estimated based upon quoted market prices or by using discounted cash flow analyses based on estimated current rates for similar types of arrangements. It was not practicable to estimate the fair value of the Company’s investments, at cost, in 50% or less owned companies because of the lack of quoted market prices and the inability to estimate fair value without incurring excessive costs. It was not practicable to estimate the fair value of the Company’s notes receivable from other business ventures because the timing of settlement of these notes is not certain. Considerable judgment was required in developing certain of the estimates of fair value and, accordingly, the estimates presented herein are not necessarily indicative of the amounts that the Company could realize in a current market exchange.

8

The Company’s non-financial assets and liabilities that were measured at fair value during the nine months ended September 30, 2010 were as follows (in thousands):

	Level 1		Level 2		Level 3
ASSETS
Investment in Seaspraie(1)	$	—	$	56,255	$	—
Seabulk America (included in property and equipment)(2)		—		5,000		—
Investment in SES-Kazakhstan(3)		—		1,000		—

(1) During the three months ended September 30, 2010, the Company marked its investment in its Seaspraie joint venture to fair value following the acquisition of a controlling interest (see note 4). The investment’s fair value, consisting of barges and financial assets, was primarily based on the sale of similar equipment to an unrelated third party.

(2) During the three months ended September 30, 2010, the Company recorded an impairment charge of $18.7 million to reduce the carrying value of one of its tankers, theSeabulk America, to its fair value (see note 5). Fair value was determined by an independent market valuation based on the sale of similar equipment.

(3) During the three months ended September 30, 2010, the Company marked its investment in its SES-Kazakhstan joint venture to fair value following the acquisition of a controlling interest (see note 4). The investment’s fair value was determined based on the Company’s purchase price of the non-controlling interest.

3. Derivative Instruments and Hedging Strategies

Derivative instruments are classified as either assets or liabilities based on their individual fair values. Derivative assets and liabilities are included in other receivables and other current liabilities, respectively, in the accompanying condensed consolidated balance sheets. The fair values of the Company’s derivative instruments as of September 30, 2010 were as follows (in thousands):

	Derivative Asset		Derivative Liability
Derivatives designated as hedging instruments:
Forward currency exchange contracts (fair value hedges)	$	2,743	$	86
Interest rate swap agreements (cash flow hedges)		—		6,810
		2,743		6,896
Derivatives not designated as hedging instruments:
Options on equities and equity indices		48		2,379
Forward currency exchange, option and future contracts		2,367		624
Interest rate swap agreements		—		3,359
Commodity swap, option and future contracts:
Exchange traded		338		3,773
Non-exchange traded		6,439		1,461
U.S. treasury notes and bond future and option contracts		—		—
		9,192		11,596
	$	11,935	$	18,492

Fair Value Hedges. As of September 30, 2010, the Company has designated certain of its forward currency exchange contracts with notional values of €75.8 million as fair value hedges in respect of capital commitments denominated in euros for assets scheduled to be delivered in 2010 through 2013. By entering into these forward currency exchange contracts, the Company has fixed a portion of its euro capital commitments in U.S. dollars to protect against currency fluctuations. During the nine months ended September 30, 2010, the Company designated €68.0 million notional value of its forward currency exchange contracts as fair value hedges, in addition to €16.0 million previously so designated as of December 31, 2009. During the nine months ended September 30, 2010, the Company dedesignated €8.2 million notional value of these contracts as fair value hedges. Subsequent to September 30, 2010, forward currency exchange contracts with an aggregate notional value of €8.0 million matured.

9

The Company recognized gains (losses) on derivative instruments designated as fair value hedges for the nine months ended September 30 as follows (in thousands):

	Derivative gains (losses),  net
	2010			2009
Forward currency exchange contracts, effective and ineffective portions	$	(1,102	)	$	587
Increase (decrease) in fair value of hedged items included in property and equipment corresponding to effective portion of derivative (gains) losses		1,011			(354	)
	$	(91	)	$	233

Cash Flow Hedges.As of September 30, 2010, the Company is a party to various interest rate swap agreements with maturities ranging from 2013 to 2014 that have been designated as cash flow hedges. These agreements call for the Company to pay fixed interest rates ranging from 2.25% to 2.85% on aggregate notional values of $125.0 million and receive a variable interest rate based on LIBOR on these notional values. During the nine months ended September 30, 2010, one of the Company’s Offshore Marine Services 50-50 joint ventures entered into an interest rate swap agreement maturing in 2015 that has been designated as a cash flow hedge. This instrument calls for the joint venture to pay a fixed interest rate of 1.48% on the amortized notional value of $21.3 million as of September 30, 2010 and receive a variable interest rate based on LIBOR on the amortized notional value. By entering into these interest rate swap agreements, the Company and its joint venture have converted the variable LIBOR component of certain of its outstanding borrowings to a fixed interest rate. During the nine months ended September 30, 2010, another of the Company’s Offshore Marine Services 50-50 joint ventures dedesignated its interest rate swap as a cash flow hedge.

The Company recognized gains (losses) on derivative instruments designated as cash flow hedges for the nine months ended September 30 as follows (in thousands):

	Other comprehensive income (loss)						Derivative gains (losses), net
	2010			2009			2010		2009
Interest rate swap agreements, effective portion	$	(8,323	)	$	(1,490	)	$	—	$	—
Interest rate swap agreements, ineffective portion		—			—			24		(255	)
Reclassification of derivative losses to interest expense or equity in earnings of 50% or less owned companies		2,251			256			—		—
	$	(6,072	)	$	(1,234	)	$	24	$	(255	)

Other Derivative Instruments.The Company recognized gains (losses) on derivative instruments not designated as hedging instruments for the nine months ended September 30 as follows (in thousands):

	Derivative gains (losses), net
	2010			2009
Options on equities and equity indices	$	1,434		$	2,894
Forward currency exchange, option and future contracts		505			3,847
Interest rate swap agreements		(4,035	)		(594	)
Commodity swap, option and future contracts:
Exchange traded		898			(55	)
Non-exchange traded		3,048			3,489
U.S. treasury notes and bond future and option contracts		(2,080	)		145
	$	(230	)	$	9,726

10

The Company holds positions in publicly traded equity options that convey the right or obligation to engage in a future transaction on the underlying equity security or index. The Company’s investment in equity options primarily includes positions in energy, marine, transportation and other related businesses. These contracts are typically entered into to mitigate the risk of changes in market value of marketable security positions that the Company is either about to acquire, has acquired or is about to dispose of.

The Company has entered into and settled forward currency exchange, option and future contracts with respect to various foreign currencies. As of September 30, 2010, the outstanding forward currency exchange contracts translated into a net purchase of foreign currencies with an aggregate U.S. dollar equivalent of $62.0 million. These contracts enable the Company to buy currencies in the future at fixed exchange rates, which could offset possible consequences of changes in foreign exchange rates with respect to the Company’s business conducted in Europe, Africa, Mexico, Central and South America, the Middle East and Asia. The Company generally does not enter into contracts with forward settlement dates beyond twelve to eighteen months. Subsequent to September 30, 2010, forward currency exchange contracts with an aggregate U.S. dollar equivalent of $39.5 million matured and the Company entered into new forward currency exchange contracts with an aggregate U.S. dollar equivalent of $41.2 million.

The Company has entered into various interest rate swap agreements maturing in 2012 and 2013 that call for the Company to pay fixed interest rates ranging from 1.79% to 2.59% on aggregate notional values of $73.7 million and receive a variable interest rate based on LIBOR on these notional values. In addition, one of the Company’s Offshore Marine Services 50-50 joint ventures has entered into an interest rate swap agreement maturing in 2014. This instrument calls for the joint venture to pay a fixed interest rate of 3.05% on the amortized notional value of $27.6 million and receive a variable interest rate based on LIBOR on the notional value. The general purpose of these interest rate swap agreements is to provide protection against increases in interest rates, which might lead to higher interest costs for the Company or its joint venture.

The Company has entered into and settled positions in various exchange and non-exchange traded commodity swap, option and future contracts. In the Company’s commodity trading and logistics business, fixed price future purchase and sale contracts of ethanol and sugar are included in the Company’s non-exchange traded derivative positions. The Company enters into exchange traded positions to protect these purchase and sale contracts as well as its inventory balances from market changes. As of September 30, 2010, the net market exposure to ethanol and sugar under these positions was not material. The Company also enters into exchange traded positions (primarily natural gas, crude oil, gasoline, ethanol and rice) to provide value to the Company should there be a sustained decline in the price of commodities that could lead to a reduction in the market values and cash flows of the Company’s offshore marine and inland river businesses. As of September 30, 2010, these positions were not material.

The Company has entered into and settled various positions in U.S. treasury notes and bonds through futures or options on futures tied to U.S. treasury notes. The general purpose of these transactions is to provide value to the Company should the price of U.S. treasury notes and bonds decline, leading to generally higher interest rates, which might lead to higher interest costs for the Company. Subsequent to September 30, 2010, the Company entered into a one-year rate-lock agreement with a notional value of $100.0 million based on the ten-year U.S. Treasury Note.

4. Business Acquisitions

SES-Kazakhstan Acquisition. On August 31, 2010, the Company obtained a 100% controlling interest in SES-Borkit LLP through the acquisition of its partner’s interest for $1.0 million (cash of $0.3 million, a short-term note payable of $0.3 million and contingent consideration of $0.4 million). Upon acquisition, SES-Borkit LLP was renamed SES-Kazakhstan LLP (“SES-Kazakhstan”). The selling partner has the opportunity to receive additional consideration of up to $0.4 million based on certain performance measures over the period from the date of acquisition through August 2013. As a consequence of the acquisition of a controlling interest, the Company adjusted its investment in SES- Kazakhstan to fair value resulting in the recognition of a $0.5 million gain, net of tax, which is included in equity in earnings of 50% or less owned companies. Following the change

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in control, the Company consolidated SES-Kazakhstan’s financial position and its results of operations. The Company performed a preliminary fair value analysis and the purchase price was allocated to the acquired assets and liabilities based on their fair values resulting in no goodwill being recorded. The preliminary fair value analysis is pending the completion of a final valuation for the acquired assets and liabilities.

SEASPRAIE Acquisition. On July 31, 2010, the Company obtained a 100% controlling interest in Seaspraie Holdings LLC (“Seaspraie”) through the redemption of its partner’s interest by distributing financial assets and equipment totaling $56.1 million from the joint venture. As a consequence of the acquisition of a controlling interest, the Company adjusted its investment in Seaspraie to fair value resulting in the recognition of a $2.5 million gain, net of tax, which is included in equity in earnings of 50% or less owned companies. In addition, the Company recognized previously deferred gains on asset dispositions of $12.2 million. Following the change in control, the Company consolidated Seaspraie’s financial position and its results of operations. The Company performed a fair value analysis and the purchase price was allocated to the acquired assets and liabilities based on their fair values resulting in no goodwill being recorded.

PIER Acquisition. On December 1, 2009, the Company acquired all of the issued and outstanding shares of PIER Systems Inc. (“PIER”), a provider of crisis communication consulting services and software in the United States and abroad, for $2.3 million ($1.7 million paid in 2009 and accrued contingent consideration of $0.6 million). The selling stockholders of PIER have the opportunity to receive additional consideration of up to $1.3 million based upon certain performance measures over the period from the date of acquisition through May 2011. The Company performed a preliminary fair value analysis and the purchase price was allocated to the acquired assets and liabilities based on their fair values resulting in no goodwill being recorded. The preliminary fair value analysis is pending the completion of a final valuation for the acquired assets and liabilities.

RMA Acquisition.On October 1, 2006, the Company acquired all of the issued and outstanding shares of Response Management Associates, Inc. (“RMA”), a provider of environmental consulting services, for $12.5 million. The selling stockholder of RMA has the opportunity to receive additional consideration of up to $8.5 million based upon certain performance measures over the period from the date of the acquisition through September 30, 2012, which will be recognized by the Company as additional cost of the acquisition when the contingency is resolved and when any additional consideration is distributable. During the nine months ended September 30, 2010, the Company paid $0.2 million of additional consideration in accordance with the acquisition agreement. As of September 30, 2010, the Company has paid $2.3 million, in the aggregate, of additional consideration, which was recorded as additional goodwill.

Purchase Price Allocation.The following table summarizes the allocation of the purchase price for the Company’s business acquisitions during the nine months ended September 30, 2010 (in thousands):

Accounts receivable	$	302
Other current assets		492
Investments, at equity, in 50% or less owned companies		(57,255	)
Property and equipment		54,113
Goodwill		210
Intangible assets		1,596
Other assets		230
Accounts payable and other current liabilities		(867	)
Deferred income taxes		(24	)
Purchase price(1)	$	(1,203	)

(1) Purchase price is net of $1.7 million in cash acquired.

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5. Equipment Acquisitions, Dispositions and Depreciation and Impairment Policies

During the nine months ended September 30, 2010, capital expenditures were $173.7 million. Equipment deliveries during the period included one offshore support vessel, 113 inland river dry cargo barges, 17 liquid tank barges, three helicopters and one tractor tug.

During the nine months ended September 30, 2010, the Company sold six offshore support vessels, two helicopters, one ocean liquid tank barge, 60 dry cargo barges and other equipment. In addition, the Company received insurance proceeds related to the nationalization of one of its offshore support vessels and the total constructive loss of another offshore support vessel under construction. The Company received $173.0 million on the disposition of these assets, including the insurance proceeds, and recognized net gains of $42.0 million. Equipment dispositions included one offshore support vessel and the 60 dry cargo barges that were sold to noncontrolled joint ventures of the Company for net proceeds of $59.1 million and gains of $20.7 million.

Subsequent to September 30, 2010, the Company received net proceeds of $89.0 million upon entering into a sale leaseback transaction with a financial institution involving one of its tankers, with a carrying value of $55.9 million, that is on a long-term bareboat charter with a customer.

During the nine months ended September 30, 2010, the Company acquired two aircraft, spare engines and other equipment for $19.0 million. Upon acquisition, the assets were leased to third parties for various terms expiring through 2014. The Company has accounted for the leases as sales type leases because ownership of the assets transfers to the lessees at the end of the lease terms.

Equipment, stated at cost, is depreciated using the straight-line method over the estimated useful life of the asset to an estimated salvage value. With respect to each class of asset, the estimated useful life is based upon a newly built asset being placed into service and represents the point at which it is typically not justifiable for the Company to continue to operate the asset in the same or similar manner. From time to time, the Company may acquire older assets that have already exceeded the Company’s useful life policy, in which case the Company depreciates such assets based on its best estimate of remaining useful life, typically the next survey or certification date.

As of September 30, 2010, the estimated useful life (in years) of each of the Company’s major categories of new equipment was as follows:

Offshore support vessels	20
U.S.-flag tankers(1)	25
Inland river dry cargo and deck barges	20
Inland river liquid tank barges	25
Inland river towboats	25
Helicopters	12
Harbor and offshore tugs	25
Ocean liquid tank barges	25

(1) Subject to Oil Pollution Act of 1990 (“OPA 90”) requirements.

The Company performs an impairment analysis of long-lived assets used in operations, including intangible assets, when indicators of impairment are present. If the carrying value of the assets is not recoverable, as determined by the estimated undiscounted cash flows, the carrying value of the assets is reduced to fair value. Generally, fair value is determined using valuation techniques, such as expected discounted cash flows or appraisals, as appropriate.

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The Company believes theSeabulk America is one of six vessels designed and certified to carry complicated chemical cargoes in the domestic coastwise trade. As previously reported, theSeabulk America had been scheduled to undergo a regulatory drydocking during the three months ended September 30, 2010, a requirement for continued operation. Given the prevailing market conditions, the Company deferred the drydocking, laid–up the vessel and recognized an impairment charge of $18.7 million reducing the vessel’s carrying value to its fair value of $5.0 million. TheSeabulk Americacontributed operating revenues of $5.2 million from the beginning of the year through her lay-up in August 2010.

6. Investments at Equity and Receivables from 50% or Less Owned Companies

ICP. On November 20, 2009, the Company and an ingredients and distillery product manufacturer formed Illinois Corn Processing LLC (“ICP”), a 50-50 joint venture to own and operate an alcohol manufacturing facility dedicated to the production of alcohol for beverage, industrial and fuel applications. The Company provided a $10.0 million five-year term loan and a $20.0 million three-year revolving line of credit to ICP subject to certain borrowing restrictions. During the nine months ended September 30, 2010, the Company and its joint venture partner each contributed an additional $1.0 million to acquire equipment. During the nine months ended September 30, 2010, the Company advanced $20.9 million and received repayments of $10.0 million under the term loan and revolving line of credit. As of September 30, 2010, the outstanding balances under the term loan and revolving line of credit were $9.1 million and $4.3 million, respectively.

SCFCo. On February 20, 2007, the Company and a third party in South America formed SCFCo Holdings LLC (“SCFCo”), a 50-50 joint venture, to operate towboats and dry cargo barges on the Parana-Paraguay Rivers. During the nine months ended September 30, 2010, SCFCo agreed to further expand its operation to include three additional towboats, 60 additional dry cargo barges and make improvements to certain of its terminal operations. In order to purchase the additional equipment and make the improvements, SCFCo expanded its bank financing and each joint venture partner funded additional capital of $10.2 million and a temporary working capital advance of $3.2 million. As of September 30, 2010, $0.3 million of the temporary working capital advance remained outstanding.

Sea-Cat Crewzer. On July 27, 2009, the Company and another offshore support vessel operator formed Sea-Cat Crewzer LLC (“Sea-Cat Crewzer”), a 50-50 joint venture to own and operate two high speed offshore catamaran crew boats. During the nine months ended September 30, 2010, Sea-Cat Crewzer entered into a $22.0 million five year term loan secured by a first preferred mortgage on the two crew boats owned by Sea-Cat Crewzer. The term loan calls for quarterly principal and interest payments with a balloon payment of $15.4 million due at maturity. As a result of an interest rate swap agreement entered into with the loan provider, the term loan bears an effective fixed interest rate of 4.23%. The Company is a guarantor of 50% of Sea-Cat Crewzer’s debt. The amount of the guarantee declines as principal payments are made and will terminate when the debt is repaid. Upon funding of the term loan, Sea-Cat Crewzer distributed $9.0 million to each of its partners.

7. Commitments and Contingencies

The Company’s unfunded capital commitments as of September 30, 2010 consisted primarily of offshore support vessels, helicopters, an interest in a dry-bulk articulated tug-barge, inland river dry cargo barges and other equipment. These commitments totaled $279.8 million, of which $69.4 million is payable during the remainder of 2010 with the balance payable through 2013. Of the total unfunded capital commitments, $2.8 million may be terminated without further liability. Subsequent to September 30, 2010, the Company committed to purchase additional equipment for $4.1 million.

The Company has guaranteed the payment of amounts owed by one of its joint ventures under a vessel charter agreement that expires in 2011 and has guaranteed amounts owed under banking facilities by certain of its joint ventures with expirations through 2015. As of September 30, 2010, the total amount guaranteed by the Company under these arrangements was $26.9 million. Additionally, as of September 30, 2010, the Company had an uncalled capital commitment to two of its joint ventures for $2.4 million.

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Under United States law, “United States persons” are prohibited from business activities and contracts in certain countries, including Sudan and Iran. Relating to these prohibitions, Seabulk International, Inc., (“Seabulk”) a subsidiary of SEACOR acquired in July 2005, filed three reports with and submitted documents to the Office of Foreign Asset Control (“OFAC”) of the U.S. Department of Treasury in December 1999 and January and May 2002. One of the reports was also filed with the Bureau of Export Administration of the U.S. Department of Commerce. The reports and documents related to certain limited charters with third parties involving three Seabulk vessels that called in Sudan for several months in 1999 and January 2000 and charters with third parties involving several of Seabulk’s vessels that called in Iran in 1998. In March 2003, Seabulk received notification from OFAC that the case has been referred to its Civil Penalties Division. Should OFAC determine that these activities constituted violations of the laws or regulations, civil penalties, including fines, could be assessed against Seabulk or certain individuals who knowingly participated in such activity. The Company cannot predict the extent of such penalties; however, management does not believe the outcome of these matters will have a material impact on its consolidated financial position or its results of operations.

During 2006 and 2007, Marine Transportation Services (“MTS”) had two of its tankers retrofitted to a double-hull configuration in a foreign shipyard to enable each of them to continue to transport crude oil and petroleum products beyond their OPA 90 mandated retirement dates in 2011. Both vessels operate in the U.S. coastwise trade that, under the Shipping Acts, is restricted to vessels built or rebuilt in the United States. In May 2005, MTS received a determination from the U.S. Coast Guard (“USCG”), which administers the United States build requirements of the Shipping Acts, concluding the retrofit work would not constitute a foreign rebuilding and therefore would not jeopardize the tankers’ eligibility to operate in the U.S. coastwise trade. MTS completed the retrofit work in the foreign shipyard in reliance upon the USCG’s determination, which MTS believes was correct and in accord with the USCG’s long-standing regulations and interpretations. On July 9, 2007, a U.S. shipbuilders trade association and two operators of tankers in the U.S. coastwise trade (“Shipbuilders”) commenced a civil action in the U.S. District Court for the Eastern District of Virginia, Shipbuilders Council of America, Inc., et al. v. U.S. Department of Homeland Security, et al. , No. 1:07cv665 (E.D. Va.) (the “SB Trader Litigation”), in which they sought to have the court set aside the USCG’s determination and direct the USCG to revoke the coastwise license of one of the two retrofitted tankers, the Seabulk Trader. MTS intervened in the action to assist the USCG in defending its determination. On April 24, 2008, the Court issued a Memorandum Opinion granting a motion for summary judgment by Shipbuilders setting aside the USCG’s determination and remanding the matter to the USCG for further proceedings with instructions to revoke the coastwise endorsement of theSeabulk Trader. On April 30, 2008, MTS appealed the decision to the U.S. Court of Appeals for the Fourth Circuit (the “Court of Appeals”), and the lower court’s decision was stayed pending appeal, subject to certain terms (which MTS has also separately appealed). Those terms required that MTS pay to the plaintiffs 12.5% of the revenue generated by theSeabulk Trader from November 7, 2008 in the event that the Court of Appeals affirms the lower court’s decision to revoke its coastwise endorsement (the “Undertaking”). On July 2, 2008, Shipbuilders commenced a second civil action in the U.S. District Court for the Eastern District of Virginia, entitled Shipbuilders Council of America, Inc., et al. v. U.S. Department of Homeland Security, et al., No. 1:08cv680 (E.D. Va.) (the “SB Challenge Litigation”), alleging essentially identical claims as those asserted in the SB Trader Litigation against MTS’s second retrofitted tanker, the Seabulk Challenge.MTS has intervened in the SB Challenge Litigation that was stayed pending the decision of the Court of Appeals in the SB Trader Litigation. In September 2009, the Court of Appeals reversed the District Court, holding that the USCG’s interpretation was correct and that the District Court erred in requiring MTS to provide the Undertaking. On January 19, 2010, the District Court vacated its April 24, 2008 Order to the extent it directed the USCG to revoke the coastwise endorsement for theSeabulk Trader and remanded the matter to the USCG with instructions to (i) provide a fuller explanation of one aspect of its rebuild decision and (ii) consider further whether certain work relating to the vessel’s segregated ballast tanks constituted a prohibited foreign installation of required segregated ballast tanks. On August 31, 2010, the USCG issued a further determination further explaining its rebuild decision and concluding that the work relating to the vessel’s segregated ballast tanks did not constitute the installation of a required segregated ballast tank. One of the three plaintiffs in the District Court litigation urged the USCG to reach a contrary result with respect to the segregated ballast work, and it is possible that that plaintiff will ask the District Court to set aside this aspect of the USCG’s decision as well. The loss of coastwise

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eligibility for its two retrofitted tankers could adversely affect the Company’s financial condition and its results of operations. The aggregate carrying value of the Company’s two retrofitted tankers was $47.8 million as of September 30, 2010 and such tankers contributed operating revenues of $14.3 million during the nine months ended September 30, 2010.

Certain subsidiaries of the Company are participating employers in an industry-wide, multi-employer, defined benefit pension fund, the United Kingdom Merchant Navy Officers Pension Fund (“MNOPF”). Under the direction of a court order, any deficit of the MNOPF is to be remedied through funding contributions from all participating employers. The Company’s participation relates to officers employed between 1978 and 2002 by SEACOR’s Stirling group of companies (which had been acquired by SEACOR in 2001) and its predecessors. Based on an actuarial valuation of the MNOPF in 2003, the Company was invoiced and expensed $4.4 million in 2005, representing the Company’s allocated share of a total funding deficit of $412.0 million. Subsequent to this invoice, the pension fund trustees determined that $49.0 million of the $412.0 million deficit was deemed uncollectible due to the non-existence or liquidation of certain participating employers and the Company was invoiced and expensed $0.6 million in March 2007 for its allocated share of the uncollectible deficit. Based on an actuarial valuation of the MNOPF in 2006, the Company was invoiced and expensed $3.9 million in September 2007, representing the Company’s allocated share of an additional funding deficit of $332.6 million. The results of the most recent actuarial valuation of the MNOPF in 2009 indicated that an additional net funding deficit of $645.0 million (£408.0 million) had developed since the previous actuarial valuation in 2006 and the Company estimates its allocated share of the deficit to be $7.9 million (£5.0 million). When the Company is invoiced for its share, it will recognize payroll related operating expenses in the periods invoices are received. Depending on the results of future actuarial valuations, it is possible that the MNOPF will experience further funding deficits, requiring the Company to recognize payroll related operating expenses in the periods invoices are received.

A subsidiary of the Company is a participating employer in an industry-wide, multi-employer, defined benefit pension fund, the United Kingdom Merchant Navy Ratings Pension Fund (“MNRPF”). The Company’s participation relates to ratings employed between 1978 and 2001 by SEACOR’s Stirling group of companies (which had been acquired by SEACOR in 2001) and its predecessors. Based on an actuarial valuation in March 2008, the MNRPF has an accumulated funding deficit of $320.9 million (£203.0 million). No decision has yet been reached as to how the deficit will be recovered, but the Company expects it is likely that participating employers will be invoiced for their allocated share, at which time the Company would recognize payroll related operating expenses. The Company estimates its allocated share of the uninvoiced deficit to be approximately $1.1 million (£0.7 million). Depending on the results of the most recent and future actuarial valuations, it is possible that the MNRPF will experience further funding deficits, requiring the Company to recognize payroll related operating expenses in the periods invoices are received.

On June 12, 2009, a purported civil class action was filed against SEACOR, Era Group Inc., Era Aviation, Inc., Era Helicopters LLC and two other defendants (collectively the “Defendants”) in the U.S. District Court for the District of Delaware,Superior Offshore International, Inc. v. Bristow Group Inc., et al., No. 09-CV-438 (D.Del.). SEACOR acquired Era Group Inc., Era Aviation, Inc., and Era Helicopters LLC in December 2004. The complaint alleges that the Defendants violated federal antitrust laws by conspiring with each other to raise, fix, maintain or stabilize prices for offshore helicopter services in the U.S. Gulf of Mexico during the period January 2001 to December 2005. The purported class of plaintiffs includes all direct purchasers of such services and the relief sought includes compensatory damages and treble damages. On September 14, 2010, the District Court entered an order dismissing the complaint. On September 28, 2010, the plaintiffs filed a motion for reconsideration and amendment and motion for re-argument (the “Motions”). On October 12, 2010, Defendants opposed the Motions. The District Court has yet to rule on the Motions. The Company is unable to estimate the potential exposure, if any, resulting from these claims but believes they are without merit and intends to vigorously defend the action.

On July 14, 2010, a group of individuals and entities purporting to represent a class commenced a civil action in the U.S. District Court for the Eastern District of Louisiana,Terry G. Robin, et al. v. Seacor Marine,

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L.L.C., et al. , No. 2:10-cv-01986 (E.D. La.), in which they assert that support vessels, including vessels owned by the Company, responding to the explosion and resulting fire that occurred aboard the semi-submersible drilling rig, the Deepwater Horizon, were negligent in their efforts to save lives and put out the fire and contributed to the sinking of the Deepwater Horizon and subsequent oil spill. The action now is part of the overall multi-district litigation,In re Oil Spill by the Oil Rig “Deepwater Horizon”, MDL No. 2179. The complaint seeks compensatory, punitive, exemplary, and other damages. The Company believes that this lawsuit brought by class action lawyers targeting emergency responders acting under the direction of the U.S. Coast Guard has no merit and will seek its dismissal.

On July 20, 2010, two individuals purporting to represent a class commenced a civil action in the Civil District Court for the Parish of Orleans in the State of Louisiana,John Wunstell, Jr. and Kelly Blanchard v. BP, et al., No. 2010-7437 (Division K) (the “Wunstell Action”), in which they assert, among other theories, that Mr. Wunstell suffered injuries as a result of his exposure to certain noxious fumes and chemicals in connection with the provision of remediation, containment and response services by O’Brien’s Response Management Inc., a subsidiary of SEACOR. The action now is part of the overall multi-district litigation,In re Oil Spill by the Oil Rig “Deepwater Horizon”, MDL No. 2179. The complaint also seeks to establish a “class-wide court-supervised medical monitoring program” for all individuals “participating in BP’s Deepwater Horizon Vessels of Opportunity Program and/or Horizon Response Program” who allegedly experience injuries similar to Mr. Wunstell. The Company believes this lawsuit has no merit and will seek its dismissal.

In the normal course of its business, the Company becomes involved in various other litigation matters including, among other things, claims by third parties for alleged property damages and personal injuries. Management has used estimates in determining the Company’s potential exposure to these matters and has recorded reserves in its financial statements related thereto where appropriate. It is possible that a change in the Company’s estimates of that exposure could occur, but the Company does not expect that any such change in estimated costs would have a material effect on the Company’s consolidated financial position or its results of operations.

8. Long-Term Debt and Capital Lease Obligations

As of September 30, 2010, the Company had $125.0 million of outstanding borrowings under its revolving credit facility. The remaining availability under this facility was $323.5 million, net of issued letters of credit of $1.5 million. In addition, the Company had other outstanding letters of credit totaling $44.8 million with various expiration dates through 2014.

During the nine months ended September 30, 2010, the Company made scheduled payments on long-term debt and capital lease obligations of $6.7 million and made net payments on inventory financing arrangements of $19.6 million.

During the nine months ended September 30, 2010, the Company redeemed all of the outstanding bonds on two of the Company’s double hull product tankers, in principal amount of $61.9 million, for an aggregate purchase price of $63.0 million, including a make-whole premium, resulting in a loss on debt extinguishment of $0.2 million.

SEACOR’s Board of Directors has previously authorized the Company to purchase any or all of its 5.875% Senior Notes due 2012 and its 7.375% Senior Notes due 2019, which may be acquired through open market purchases, privately negotiated transactions or otherwise, depending on market conditions. During the nine months ended September 30, 2010, the Company purchased $2.4 million, in principal amount, of its 5.875% Senior Notes due 2012, for an aggregate purchase price of $2.5 million, resulting in a loss on debt extinguishment of $0.2 million.

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9. Stock Repurchases

SEACOR’s Board of Directors previously approved a securities repurchase plan that authorizes the Company to acquire shares of SEACOR common stock, par value $0.01 per share (“Common Stock”), which may be acquired through open market purchases, privately negotiated transactions or otherwise, depending on market conditions. During the nine months ended September 30, 2010, the Company acquired for treasury 1,693,100 shares of Common Stock at an average price of $74.36 for an aggregate purchase price of $126.0 million. On February 18, 2010, SEACOR’s Board of Directors increased the repurchase authority up to $250.0 million and, as of September 30, 2010, the remaining authority under the repurchase plan was $124.1 million. Subsequent to September 30, 2010, the Company acquired for treasury 68,400 shares of Common Stock for an aggregate purchase price of $6.3 million.

10. Earnings Per Common Share of SEACOR

Basic earnings per common share of SEACOR are computed based on the weighted average number of common shares issued and outstanding during the relevant periods. Diluted earnings per common share of SEACOR are computed based on the weighted average number of common shares issued and outstanding plus the effect of potentially dilutive securities through the application of the treasury stock and if-converted methods. Dilutive securities for this purpose assumes restricted stock grants have vested, common shares have been issued pursuant to the exercise of outstanding stock options and common shares have been issued pursuant to the conversion of outstanding convertible debentures. For the three and nine months ended September 30, 2010, diluted earnings per common share of SEACOR excluded 939,071 and 872,748, respectively, of certain share awards as the effect of their inclusion in the computation would have been antidilutive. For the three and nine months ended September 30, 2009, diluted earnings per common share of SEACOR excluded 715,985 and 818,364, respectively, of certain share awards as the effect of their inclusion in the computation would have been antidilutive.

Computations of basic and diluted earnings per common share of SEACOR for the three and nine months ended September 30 were as follows (in thousands, except per share data).

	Three Months Ended						Nine Months Ended
	Net Income		Average O/S Shares		Per Share		Net Income		Average O/S Shares		Per Share
2010
Basic Earnings Per Common Share of SEACOR Holdings Inc.	$	149,938		20,787	$	7.21	$	217,621		21,591	$	10.08
Effect of Dilutive Securities, net of tax:
Options and Restricted Stock		—		214				—		194
Diluted Earnings Per Common Share of SEACOR Holdings Inc.	$	149,938		21,001	$	7.14	$	217,621		21,785	$	9.99
2009
Basic Earnings Per Common Share of SEACOR Holdings Inc.	$	26,282		19,867	$	1.32	$	121,584		19,825	$	6.13
Effect of Dilutive Securities, net of tax:
Options and Restricted Stock		—		225				—		165
Convertible Securities		2,563		3,366				7,651		3,385
Diluted Earnings Per Common Share of SEACOR Holdings Inc.	$	28,845		23,458	$	1.23	$	129,235		23,375	$	5.53

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11. Comprehensive Income

For the three months ended September 30, 2010 and 2009, total comprehensive income was $150.5 million and $20.3 million, respectively. For the nine months ended September 30, 2010 and 2009, total comprehensive income was $214.5 million and $124.1 million, respectively. The components of other comprehensive income (loss) and allocated income tax (expense) benefit for the three and nine months ended September 30 were as follows (in thousands):

	Three Months Ended									Nine Months Ended
	Before-Tax Amount			Tax (Expense) Benefit			After-Tax Amount			Before-Tax Amount			Tax (Expense) Benefit			After-Tax Amount
2010
Foreign currency translation adjustments	$	2,506		$	(877	)	$	1,629		$	(556	)	$	195		$	(361	)
Derivative losses on cash flow hedges (see Note 3)		(2,089	)		731			(1,358	)		(6,072	)		2,125			(3,947	)
Other comprehensive income (loss)	$	417		$	(146	)	$	271		$	(6,628	)	$	2,320		$	(4,308	)
2009
Foreign currency translation adjustments	$	(6,734	)	$	2,357		$	(4,377	)	$	3,492		$	(1,222	)	$	2,270
Derivative losses on cash flow hedges (see Note 3)		(2,336	)		818			(1,518	)		(1,234	)		432			(802	)
Other comprehensive income (loss)	$	(9,070	)	$	3,175		$	(5,895	)	$	2,258		$	(790	)	$	1,468

12. Share Based Compensation

The following transactions have occurred in connection with the Company’s share based compensation plans during the nine months ended September 30, 2010:

Director stock awards granted	3,250
Employee Stock Purchase Plan (“ESPP”) shares issued	39,231
Restricted stock awards granted	229,162
Restricted stock awards cancelled	2,158
Shares released from Deferred Compensation Plan	2,206
Restricted Stock Unit Activities:
Outstanding as of December 31, 2009	1,070
Granted	63
Converted to shares and issued to Deferred Compensation Plan	(295	)
Outstanding as of September 30, 2010	838
Stock Option Activities:
Outstanding as of December 31, 2009	1,220,601
Granted	189,685
Exercised	(39,506	)
Forfeited	(6,100	)
Expired	(4,325	)
Outstanding as of September 30, 2010	1,360,355
Shares available for future grants and ESPP purchases as of September 30, 2010	1,114,966

19

13. Segment Information

Accounting standards require public business enterprises to report information about each of their operating business segments that exceed certain quantitative thresholds or meet certain other reporting requirements. Operating business segments have been defined as a component of an enterprise about which separate financial information is available and is evaluated regularly by the chief operating decision maker in deciding how to allocate resources and in assessing performance. The Company’s basis of measurement of segment profit or loss is as previously described in the Company’s Annual Report on Form 10-K for the year ended December 31, 2009.

The following tables summarize the operating results, capital expenditures and assets of the Company’s reportable segments.

	Offshore Marine Services $’000		Marine Transportation Services $’000			Inland River Services $’000		Aviation Services $’000			Environmental Services $’000		Commodity Trading and Logistics $’000			Other $’000			Corporate and Eliminations $’000			Total $’000
For the three months ended September 30, 2010
Operating Revenues:
External customers		150,981		18,540			38,148		67,117			468,226		216,896			19,925			—			979,833
Intersegment		9,935		—			3,233		19			—		—			106			(13,293	)		—
		160,916		18,540			41,381		67,136			468,226		216,896			20,031			(13,293	)		979,833
Costs and Expenses:
Operating		79,205		8,754			26,535		37,492			329,497		204,467			10,559			(13,290	)		683,219
Administrative and general		12,378		1,087			2,898		7,274			11,508		3,716			2,803			8,963			50,627
Depreciation and amortization		12,758		7,320			5,415		10,889			2,249		13			2,224			444			41,312
		104,341		17,161			34,848		55,655			343,254		208,196			15,586			(3,883	)		775,158
Gains (Losses) on Asset Dispositions and Impairments, Net		12,717		(18,677	)		29,445		412			—		—			—			(1	)		23,896
Operating Income (Loss)		69,292		(17,298	)		35,978		11,893			124,972		8,700			4,445			(9,411	)		228,571
Other Income (Expense):
Derivative gains (losses), net		—		—			—		(29	)		—		(5,307	)		—			6,984			1,648
Foreign currency gains (losses), net		977		61			—		(81	)		3		190			34			6,401			7,585
Other, net		—		—			—		50			—		—			—			(40	)		10
Equity in Earnings (Losses) of 50% or Less Owned Companies, Net of Tax		2,300		—			3,522		663			533		1,042			(127	)		—			7,933
Segment Profit (Loss)		72,569		(17,237	)		39,500		12,496			125,508		4,625			4,352
Other Income (Expense) not included in Segment Profit																							(7,766	)
Less Equity Earnings included in Segment Profit																							(7,933	)
Income Before Taxes and Equity Earnings																							230,048

20

	Offshore Marine Services $’000		Marine Transportation Services $’000			Inland River Services $’000		Aviation Services $’000			Environmental Services $’000			Commodity Trading and Logistics $’000			Other $’000		Corporate and Eliminations $’000			Total $’000
For the nine months ended September 30, 2010
Operating Revenues:
External customers		400,035		59,255			99,827		179,873			711,013			562,952			56,029		—			2,068,984
Intersegment		15,190		—			9,586		(29	)		—			—			411		(25,158	)		—
		415,225		59,255			109,413		179,844			711,013			562,952			56,440		(25,158	)		2,068,984
Costs and Expenses:
Operating		232,980		31,101			67,636		110,059			476,942			555,213			31,493		(25,158	)		1,480,266
Administrative and general		37,758		2,962			7,577		18,756			24,070			10,251			8,441		27,811			137,626
Depreciation and amortization		39,481		23,336			15,249		32,064			6,331			48			6,514		1,294			124,317
		310,219		57,399			90,462		160,879			507,343			565,512			46,448		3,947			1,742,209
Gains (Losses) on Asset Dispositions and Impairments, Net		27,332		(18,688	)		31,231		881			(53	)		—			1,203		47			41,953
Operating Income (Loss)		132,338		(16,832	)		50,182		19,846			203,617			(2,560	)		11,195		(29,058	)		368,728
Other Income (Expense):
Derivative gains (losses), net		—		—			—		(91	)		—			3,612			—		(3,818	)		(297	)
Foreign currency gains (losses), net		1,776		35			—		(1,677	)		10			(557	)		1		(2,204	)		(2,616	)
Other, net		—		—			10		50			—			6			34		556			656
Equity in Earnings (Losses) of 50% or Less Owned Companies, Net of Tax		6,264		—			4,229		(54	)		625			7			607		—			11,678
Segment Profit (Loss)		140,378		(16,797	)		54,421		18,074			204,252			508			11,837
Other Income (Expense) not included in Segment Profit																							(31,941	)
Less Equity Earnings included in Segment Profit																							(11,678	)
Income Before Taxes and Equity Earnings																							334,530
Capital Expenditures		31,909		4,233			20,547		86,079			4,176			—			12,602		14,183			173,729
As of September 30, 2010
Property and Equipment		610,088		333,462			317,214		577,880			35,331			168			155,221		19,358			2,048,722
Investments, at Equity, and Receivables from 50% or Less Owned Companies		40,029		—			40,390		26,367			2,071			15,577			23,900		—			148,334
Goodwill		13,367		—			1,743		353			37,999			—			1,302		—			54,764
Intangible Assets		8,566		2,036			1,186		—			9,282			—			557		—			21,627
Other current and long-term assets, excluding cash and near cash assets(1)		169,112		3,152			47,770		78,415			248,497			80,821			43,439		25,269			696,475
Segment Assets		841,162		338,650			408,303		683,015			333,180			96,566			224,419
Cash and near cash assets(1)																							1,052,510
Total Assets																							4,022,432

(1) Cash and near cash assets include cash, cash equivalents, restricted cash, marketable securities, construction reserve funds and Title XI reserve funds.

21

	Offshore Marine Services $’000			Marine Transportation Services $’000		Inland River Services $’000		Aviation Services $’000			Environmental Services $’000			Commodity Trading and Logistics $’000			Other $’000			Corporate and Eliminations $’000			Total $’000
For the three months ended September 30, 2009
Operating Revenues:
External customers		128,785			21,737		31,192		64,259			33,827			150,866			15,413			—			446,079
Intersegment		1,054			—		3,122		—			—			—			161			(4,337	)		—
		129,839			21,737		34,314		64,259			33,827			150,866			15,574			(4,337	)		446,079
Costs and Expenses:
Operating		76,982			11,420		20,144		39,659			23,206			150,983			9,544			(4,336	)		327,602
Administrative and general		13,128			953		2,443		5,624			6,090			3,705			2,378			7,605			41,926
Depreciation and amortization		13,608			8,003		4,785		9,706			1,846			7			2,049			268			40,272
		103,718			20,376		27,372		54,989			31,142			154,695			13,971			3,537			409,800
Gains (Losses) on Asset Dispositions and Impairments, Net		3,852			—		813		1,062			(1	)		—			58			(1	)		5,783
Operating Income (Loss)		29,973			1,361		7,755		10,332			2,684			(3,829	)		1,661			(7,875	)		42,062
Other Income (Expense):
Derivative gains (losses), net		—			—		—		(80	)		—			1,689			—			719			2,328
Foreign currency gains, net		(1,174	)		7		—		296			—			177			10			(255	)		(939	)
Other, net		14			—		—		—			—			—			(1	)		(70	)		(57	)
Equity in Earnings (Losses) of 50% or Less Owned Companies, Net of Tax		2,322			—		140		(186	)		34			—			30			—			2,340
Segment Profit (Loss)		31,135			1,368		7,895		10,362			2,718			(1,963	)		1,700
Other Income (Expense) not included in Segment Profit																								(3,743	)
Less Equity Earnings included in Segment Profit																								(2,340	)
Income Before Taxes and Equity Earnings																								39,651

22

	Offshore Marine Services $’000			Marine Transportation Services $’000			Inland River Services $’000		Aviation Services $’000			Environmental Services $’000		Commodity Trading and Logistics $’000		Other $’000			Corporate and Eliminations $’000			Total $’000
For the nine months ended September 30, 2009
Operating Revenues:
External customers		437,705			72,369			93,253		181,336			101,178		301,221		47,766			—			1,234,828
Intersegment		3,383			—			8,238		8			58		—		395			(12,082	)		—
		441,088			72,369			101,491		181,344			101,236		301,221		48,161			(12,082	)		1,234,828
Costs and Expenses:
Operating		237,430			39,983			57,392		117,288			70,939		292,019		29,462			(12,368	)		832,145
Administrative and general		34,261			3,079			6,627		15,424			19,297		9,012		7,211			25,755			120,666
Depreciation and amortization		41,099			24,001			14,601		27,482			5,339		9		5,974			859			119,364
		312,790			67,063			78,620		160,194			95,575		301,040		42,647			14,246			1,072,175
Gains (Losses) on Asset Dispositions and Impairments, Net		18,659			—			3,470		3			11		—		388			(3	)		22,528
Operating Income (Loss)		146,957			5,306			26,341		21,153			5,672		181		5,902			(26,331	)		185,181
Other Income (Expense):
Derivative gains (losses), net		(18	)		—			—		233			—		3,226		—			6,263			9,704
Foreign currency gains (losses), net		670			(2	)		—		1,662			20		449		141			3,626			6,566
Other, net		182			—			—		—			—		26		(54	)		(22	)		132
Equity in Earnings (Losses) of 50% or Less Owned Companies, Net of Tax		8,093			—			2,014		(190	)		135		187		(881	)		—			9,358
Segment Profit		155,884			5,304			28,355		22,858			5,827		4,069		5,108
Other Income (Expense) not included in Segment Profit																							(21,401	)
Less Equity Earnings included in Segment Profit																							(9,358	)
Income Before Taxes and Equity Earnings																							180,182
Capital Expenditures		21,062			124			7,722		65,521			4,508		3		29,310			907			129,157
As of September 30, 2009
Property and Equipment		728,751			372,653			269,679		511,628			33,514		131		155,246			3,716			2,075,318
Investments, at Equity, and Receivables from 50% or Less Owned Companies		46,805			—			81,707		26,946			1,966		—		9,454			—			166,878
Goodwill		13,367			—			1,493		353			37,475		—		1,302			—			53,990
Intangible Assets		10,825			2,429			1,516		—			9,326		—		666			—			24,762
Other current and long-term assets, excluding cash and near cash assets(1)		180,555			10,565			32,354		76,476			34,771		61,253		23,992			49,656			469,622
Segment Assets		980,303			385,647			386,749		615,403			117,052		61,384		190,660
Cash and near cash assets(1)																							993,166
Total Assets																							3,783,736

(1) Cash and near cash assets include cash, cash equivalents, restricted cash, marketable securities, construction reserve funds and Title XI reserve funds.

23

ITEM 2. MANAGEMENT’S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS

This Form 10-Q includes “forward-looking statements” within the meaning of the Private Securities Litigation Reform Act of 1995. Such forward-looking statements concerning management's expectations, strategic objectives, business prospects, anticipated economic performance and financial condition and other similar matters involve known and unknown risks, uncertainties and other important factors that could cause the actual results, performance or achievements of results to differ materially from any future results, performance or achievements discussed or implied by such forward-looking statements. Such risks, uncertainties and other important factors include, among others: decreased demand and loss of revenues as a result of the recently lifted U.S. government implemented moratoriums directing operators to cease certain drilling activities (the “Moratoriums”), weakening demand for the Company’s services as a result of unplanned customer suspensions, cancellations, rate reductions or non-renewals of vessel charters and aviation equipment or failures to finalize commitments to charter vessels and aviation equipment in response to Moratoriums, increased government legislation and regulation of the Company’s businesses could increase cost of operations, increased competition if the Jones Act is repealed, liability, legal fees and costs in connection with providing spill and emergency response services, including the Company’s involvement in response to the oil spill as a result of the sinking of the Deepwater Horizon in April 2010, decreased demand for the Company’s services as a result of declines in the global economy, declines in valuations in the global financial markets and illiquidity in the credit sectors, including, interest rate fluctuations, availability of credit, inflation rates, change in laws, trade barriers, commodity prices and currency exchange fluctuations, the cyclical nature of the oil and gas industry, loss of U.S. coastwise endorsement for the retro-fitted double-hull tankers, Seabulk Trader and Seabulk Challenge, if the Company is unsuccessful in litigation instructing the U.S. Coast Guard to revoke their coastwise charters, activity in foreign countries and changes in foreign political, military and economic conditions, changes in foreign and domestic oil and gas exploration and production activity, safety record requirements related to Offshore Marine Services, Marine Transportation Services and Aviation Services, decreased demand for Marine Transportation Services and Harbor and Offshore Towing Services due to construction of additional refined petroleum products, natural gas or crude oil pipelines or due to decreased demand for refined petroleum products, crude oil or chemical products or a change in existing methods of delivery, compliance with U.S. and foreign government laws and regulations, including environmental laws and regulations, the dependence of Offshore Marine Services, Marine Transportation Services and Aviation Services on several customers, consolidation of the Company's customer base, the ongoing need to replace aging vessels and aircraft, industry fleet capacity, restrictions imposed by the Shipping Acts and Aviation Acts on the amount of foreign ownership of the Company's Common Stock, operational risks of Offshore Marine Services, Marine Transportation Services, Harbor and Offshore Towing Services and Aviation Services, effects of adverse weather conditions and seasonality, future phase-out of Marine Transportation Services' double-bottom tanker, dependence of spill response revenue on the number and size of spills and upon continuing government regulation in this area and Environmental Services' ability to comply with such regulation and other governmental regulation, changes in National Response Corporation's Oil Spill Removal Organization classification, liability in connection with providing spill response services, the level of grain export volume, the effect of fuel prices on barge towing costs, variability in freight rates for inland river barges, the effect of international economic and political factors in Inland River Services' operations, adequacy of insurance coverage, the attraction and retention of qualified personnel by the Company and various other matters and factors, many of which are beyond the Company's control. In addition, these statements constitute the Company's cautionary statements under the Private Securities Litigation Reform Act of 1995. It is not possible to predict or identify all such factors. Consequently, the following should not be considered a complete discussion of all potential risks or uncertainties. The words "estimate," "project," "intend," "believe," "plan" and similar expressions are intended to identify forward-looking statements. Forward-looking statements speak only as of the date of the document in which they are made. The Company disclaims any obligation or undertaking to provide any updates or revisions to any forward-looking statement to reflect any change in the Company's expectations or any change in events, conditions or circumstances on which the forward-looking statement is based. The forward-looking statements in this Form 10-Q should be evaluated together with the many uncertainties that affect the Company’s businesses, particularly those mentioned under “Forward-Looking Statements” in Item 7 on the Company’s Form 10-K and SEACOR’s periodic reporting on Form 8-K (if any), which are incorporated by reference.

24

Overview

The Company’s operations are divided into six main business segments – Offshore Marine Services, Marine Transportation Services, Inland River Services, Aviation Services, Environmental Services, and Commodity Trading and Logistics. The Company also has activities that are referred to and described under Other that primarily includes Harbor and Offshore Towing Services, various other investments in joint ventures and lending and leasing activities.

Deepwater Horizon Oil Spill Response

The Company’s operating results for the three and nine months ended September 30, 2010 were significantly impacted by oil spill response activities relating to the BP Macondo well incident in the U.S. Gulf of Mexico following the sinking of the semi-submersible drilling rigDeepwater Horizon in April 2010 (the “Oil Spill Response”). At the height of the Oil Spill Response, four of the Company’s business segments were actively providing support. Environmental Services provided (i) equipment and people to support clean-up activities on-shore, (ii) professional assistance, consulting services and software systems in support of incident management activities at various strategic locations, and (iii) assistance in the provision of manpower for clean-up operations throughout the region. Offshore Marine Services provided (i) vessels for a variety of functions including vessel decontamination, skimming, lightering, offshore traffic control and accommodation, and (ii) technical and video equipment on vessels engaged in the Oil Spill Response to allow for instant tracking of assets and surveillance of operations. Aviation Services provided (i) helicopters for air support to U.S. Coast Guard observers undertaking oil spotting and assessment missions, (ii) transportation for various other officials requiring overflights to assess the Oil Spill Response and recovery efforts, and (iii) a flight tracking system to monitor the movement of all marine and aviation assets involved in the Oil Spill Response. Harbor and Offshore Towing Services provided tugs engaged in the decontamination of vessels transiting the region. Oil Spill Response activity has diminished since September 30, 2010 resulting in reduced demand for the Company’s assets and services. For additional information, see “Consolidated Results of Operations” included below.

As an active party to the Oil Spill Response, the Company has been named in individual and class action litigations involving environmental damage, business and personal injury claims that may result in financial exposure. In reaction to the Deepwater Horizon/BP Macondo well incident, the U.S. Department of the Interior issued an order on May 28, 2010 imposing a six month moratorium on all offshore deepwater drilling projects. A preliminary injunction was issued on June 22, 2010 blocking enforcement of the moratorium; however, the U.S. Department of Interior issued a new moratorium on July 12, 2010 that was lifted on October 12, 2010. The U.S. Department of Interior has also implemented additional safety and certification requirements for drilling activities, imposed additional requirements for the approval of development and production activities, and delayed the approval of applications to drill in both deepwater and shallow-water areas. The Company’s results, in particular those of its Offshore Marine Services and Aviation Services segments, could be adversely impacted as a consequence of reduced drilling activities in the U.S. Gulf of Mexico. For additional information, see “Contingencies” included below and “Item 1A. Risk Factors” included in Part II.

25

Consolidated Results of Operations

The sections below provide an analysis of the Company’s operations by business segment for the three months (“Current Year Quarter”) and nine months (“Current Nine Months”) ended September 30, 2010, compared with the three months (“Prior Year Quarter”) and nine months (“Prior Nine Months”) ended September 30, 2009. See “Item 1. Financial Statements—Note 13. Segment Information” included in Part I for consolidating segment tables for each period presented.

Offshore Marine Services

	For the Three  Months Ended September 30,										For the Nine Months Ended September 30,									Change ’10/’09
	2010				2009						2010				2009					3 Mos		9 Mos
	$’000		%		$’000			%			$’000		%		$’000			%		%		%
Operating Revenues:
United States, primarily U.S. Gulf of Mexico		90,722		56		37,705			29			209,733		51		165,927			38
Africa, primarily West Africa		19,541		12		26,889			21			58,125		14		85,167			19
Middle East		13,326		8		19,354			15			39,727		9		62,797			14
Mexico, Central and South America		12,396		8		19,190			15			38,110		9		53,735			12
United Kingdom, primarily North Sea		17,447		11		17,653			13			48,782		12		49,365			11
Asia		7,484		5		9,048			7			20,748		5		24,097			6
Total Foreign		70,194		44		92,134			71			205,492		49		275,161			62
		160,916		100		129,839			100			415,225		100		441,088			100		24		(6	)
Costs and Expenses:
Operating		79,205		49		76,982			59			232,980		56		237,430			54
Administrative and general		12,378		8		13,128			10			37,758		9		34,261			8
Depreciation and amortization		12,758		8		13,608			11			39,481		10		41,099			9
		104,341		65		103,718			80			310,219		75		312,790			71
						��
Gains on Asset Dispositions and Impairments, Net		12,717		8		3,852			3			27,332		7		18,659			4
Operating Income		69,292		43		29,973			23			132,338		32		146,957			33		131		(10	)
Other Income (Expense):
Derivative losses, net		—		—		—			—			—		—		(18	)		—
Foreign currency gains (losses), net		977		1		(1,174	)		(1	)		1,776		—		670			—
Other, net		—		—		14			—			—		—		182			—
Equity in Earnings of 50% or Less Owned Companies, Net of Tax		2,300		1		2,322			2			6,264		2		8,093			2
Segment Profit		72,569		45		31,135			24			140,378		34		155,884			35		133		(10	)

26

Operating Revenues by Type. The table below sets forth, for the periods indicated, the amount of operating revenues by type.

	For the Three  Months Ended September 30,								For the Nine Months Ended September 30,								Change ’10/’09
	2010				2009				2010				2009				3 Mos			9 Mos
	$’000		%		$’000		%		$’000		%		$’000		%		%			%
Operating Revenues:
Time charter:
United States, primarily U.S. Gulf of Mexico		81,004		50		36,031		28		193,050		46		159,639		36		125			21
Africa, primarily West Africa		14,667		9		22,181		17		47,683		11		71,735		16		(34	)		(34	)
Middle East		10,755		7		12,908		10		31,611		8		43,237		10		(17	)		(27	)
Mexico, Central and South America		10,096		6		12,763		10		32,125		8		37,814		9		(21	)		(15	)
United Kingdom, Primarily North Sea		17,445		11		17,663		13		48,712		12		49,138		11		(1	)		(1	)
Asia		4,235		3		8,602		7		15,890		4		23,139		5		(51	)		(31	)
Total time charter		138,202		86		110,148		85		369,071		89		384,702		87		25			(4	)
Bareboat charter		3,277		2		1,412		1		4,771		1		7,618		2		132			(37	)
Brokered vessel activity		4,488		3		8,677		7		11,912		3		25,162		6		(48	)		(53	)
Other marine services		14,949		9		9,602		7		29,471		7		23,606		5		56			25
		160,916		100		129,839		100		415,225		100		441,088		100

27

Time Charter Operating Data. The table below sets forth the average rates per day worked, utilization and available days data for each group of Offshore Marine Services’ vessels operating under time charters for the periods indicated. The rate per day worked is the ratio of total time charter revenues to the aggregate number of days worked. Utilization is the ratio of aggregate number of days worked to total calendar days available for work. Available days represents the total calendar days during which owned and chartered-in vessels are operated by the Company.

	For the Three Months Ended September 30,						For the Nine Months Ended September 30,
	2010			2009			2010			2009
Rates Per Day Worked:
Anchor handling towing supply	$	41,619		$	31,993			38,291		$	39,091
Crew		6,522			7,615			6,592			7,491
Mini-supply		9,850			6,822			9,051			6,213
Standby safety		8,574			8,795			8,250			8,362
Supply		16,337			15,244			14,698			15,449
Towing supply		10,798			12,202			11,137			11,908
Specialty		7,330			13,038			7,258			14,008
Overall Average Rates Per Day Worked		13,667			11,880			13,028			12,261
Utilization:
Anchor handling towing supply		82	%		57	%		78	%		65	%
Crew		80	%		60	%		73	%		70	%
Mini-supply		90	%		54	%		69	%		63	%
Standby safety		88	%		91	%		88	%		90	%
Supply		86	%		66	%		81	%		76	%
Towing supply		73	%		84	%		77	%		91	%
Specialty		88	%		91	%		72	%		91	%
Overall Fleet Utilization		83	%		67	%		77	%		75	%
Available Days:
Anchor handling towing supply		1,675			1,673			5,114			4,725
Crew		4,542			5,796			13,569			17,892
Mini-supply		1,012			1,046			3,003			3,743
Standby safety		2,300			2,208			6,682			6,552
Supply		1,748			1,834			5,187			5,454
Towing supply		560			828			2,059			2,518
Specialty		275			368			969			1,220
Overall Fleet Available Days		12,112			13,753			36,583			42,104

Current Year Quarter compared with Prior Year Quarter

Operating Revenues.Time charter revenues were $28.1 million higher. Overall fleet utilization was 83% compared with 67%. The number of days available for charter was 12,112 compared with 13,753, a 1,641 or 12% reduction, due to net fleet dispositions, including the return of twelve vessels to lessors. Overall average day rates

28

were $13,667 per day compared with $11,880 per day, an increase of $1,787 per day or 15%. Improvements in utilization increased time charter revenues by $14.8 million while net fleet dispositions, the impact of vessels mobilizing between geographic regions, and other changes in fleet mix combined to reduce time charter revenues by $7.7 million. In overall terms, improvements in average day rates increased time charter revenues by $22.0 million while the impact of unfavorable changes in currency exchange rates decreased time charter revenues by $1.0 million.

In the U.S. Gulf of Mexico, time charter revenues were $45.0 million higher primarily due to higher average day rates and improved utilization as a result of demand for vessels to support the Oil Spill Response. During the Current Year Quarter, Offshore Marine Services had as many as 22 vessels supporting the Oil Spill Response. As of October 25, 2010, 15 of these vessels had been redelivered with the remaining seven expected to be redelivered shortly. Time charter revenues also improved by $6.7 million due to the contribution of two vessels that were operating under bareboat charter arrangements in another region in the Prior Year Quarter. As of September 30, 2010, seven of the Company’s vessels were cold-stacked in this region compared with 26 as of September 30, 2009.

In Africa, time charter revenues were $7.5 million lower of which $3.5 million was due to net fleet dispositions and $2.3 million was due to vessel mobilizations to other regions. The remaining difference was primarily due to a 9% reduction in average day rates and lower utilization due to softer market conditions and vessel drydockings.

In Asia, time charter revenues were $4.4 million lower of which $3.3 million was due to fleet dispositions and $0.9 million due to the mobilization of one vessel out of the region.

Other marine services revenues were $5.3 million higher primarily due to billings for the provision of technical and video equipment on vessels engaged in the Oil Spill Response to allow for tracking of assets and surveillance of operations.

Costs and Expenses.Operating expenses were $2.2 million higher primarily due to $7.3 million of incremental expenditures related to the Oil Spill Response. Net fleet dispositions reduced overall operating expenses by $3.3 million and chartered-in vessel expenses were $3.4 million lower due to reductions in brokered vessel activity.

Gains on Asset Dispositions and Impairments, net. During the Current Year Quarter, the Company sold four vessels and other equipment for net proceeds of $88.5 million and recognized gains on disposition of $12.7 million, including one offshore support vessel sold to a noncontrolled joint venture for net proceeds of $33.3 million and a gain of $4.2 million. During the Prior Year Quarter, the Company sold three vessels and other equipment for net proceeds of $21.3 million and recognized gains on dispositions of $3.9 million.

Current Nine Months compared with Prior Nine Months

Operating Revenues.Time charter revenues were $15.6 million lower. Overall fleet utilization was 77% compared with 75%. The number of days available for charter was 36,583 compared with 42,104, a 5,521 or 13% reduction, due to net fleet dispositions, including the return of twelve vessels to lessors. Overall average day rates were $13,028 per day compared with $12,261 per day, an increase of $767 per day or 6%. Improvements in utilization increased time charter revenues by $1.2 million while net fleet dispositions, the impact of vessels mobilizing between geographic regions, and other changes in fleet mix combined to reduce time charter revenues by $18.9 million. In overall terms, improvements in average day rates increased time charter revenues by $2.4 million while the impact of unfavorable changes in currency exchange rates decreased time charter revenues by $0.3 million.

In the U.S. Gulf of Mexico, time charter revenues were $33.4 million higher primarily due to higher average day rates and improved utilization as a result of demand for vessels to support the Oil Spill Response. Net fleet dispositions reduced time charter revenues by $6.4 million. Time charter revenues were also lower due to a softer market particularly for the Company’s AHTS fleet due to a reduction in rig moving activities.

29

In Africa, time charter revenues were $24.1 million lower of which $4.8 million was due to net fleet dispositions and $8.3 million was due to vessel mobilizations to other regions. The remaining difference was primarily due to lower utilization due to softer market conditions and vessel drydockings.

In the Middle East, time charter revenues were $11.6 million lower of which $3.1 million was due to fleet dispositions, $6.1 million was due to a change in contract status for one vessel from time charter to bareboat charter, $2.5 million was due to out-of-service time for one vessel undergoing conversion to safety standby configuration and $6.7 million was due to lower average day rates and utilization reflecting softer market conditions. Vessels mobilizing from other geographic regions contributed an additional $6.8 million of time charter revenues.

In Mexico, Central and South America, time charter revenues were $5.7 million lower. Time charter revenues were $9.8 million lower due to fleet dispositions, partially offset by additional revenues contributed by one vessel that mobilized to the region at the end of the Prior Year Quarter.

In Asia, time charter revenues were $7.2 million lower of which $6.0 million was due to net fleet dispositions. The remaining difference was primarily due to an 8% reduction in average day rates and lower utilization due to softer market conditions.

Revenues from international brokered vessel activity were $13.2 million lower primarily due to reduced activity in the Middle East. Other marine services revenues were $5.9 million higher primarily due to billings for the provision of technical and video equipment on vessels engaged in the Oil Spill Response to allow for tracking of assets and surveillance of operations.

Costs and Expenses.Operating expenses were $4.5 million lower. Operating expenses were $21.6 million lower due to net fleet dispositions and the impact of vessels mobilizing to geographic regions with lower daily operating costs. The reductions were partially offset by incremental expenditures attributable to the Oil Spill Response and increased drydocking costs.

Gains on Asset Dispositions and Impairments, net. During the Current Nine Months, the Company sold six vessels and other equipment for net proceeds of $137.3 million and recognized gains on disposition of $27.3 million, including one offshore support vessel sold to a noncontrolled joint venture for net proceeds of $33.3 million and a gain of $4.2 million. During the Prior Nine Months, the Company sold 17 vessels and other equipment for net proceeds of $53.2 million and recognized gains on dispositions of $18.7 million.

30

Fleet Count

The composition of Offshore Marine Services’ fleet as of September 30 as follows:

	Owned		Joint Ventured		Leased-in		Pooled or Managed		Total
2010
Anchor handling towing supply		16		2		2		—		20
Crew		40		2		10		2		54
Mini-supply		6		1		5		—		12
Standby safety		25		1		—		—		26
Supply		11		—		8		8		27
Towing supply		4		1		2		1		8
Specialty		4		5		—		3		12
		106		12		27		14		159
2009
Anchor handling towing supply		18		1		1		1		21
Crew		43		2		22		1		68
Mini-supply		6		—		5		—		11
Standby safety		24		—		—		—		24
Supply		11		—		8		8		27
Towing supply		7		3		2		1		13
Specialty		4		5		—		—		9
		113		11		38		11		173

Marine Transportation Services

	For the Three  Months Ended September 30,										For the Nine Months Ended September 30,											Change ’10/’09
	2010						2009				2010						2009					3 Mos			9 Mos
	$’000			%			$’000		%		$’000			%			$’000			%		%			%
Operating Revenues:
United States		18,540			100			21,737		100		59,255			100			72,369			100		(15	)		(18	)
Costs and Expenses:
Operating		8,754			47			11,420		53		31,101			53			39,983			56
Administrative and general		1,087			6			953		4		2,962			5			3,079			4
Depreciation and amortization		7,320			39			8,003		37		23,336			39			24,001			33
		17,161			92			20,376		94		57,399			97			67,063			93
Losses on Asset Dispositions and Impairments		(18,677	)		(101	)		—		—		(18,688	)		(31	)		—			—
Operating Income		(17,298	)		(93	)		1,361		6		(16,832	)		(28	)		5,306			7		(1,371	)		(417	)
Other Income (Expense):
Foreign currency gains (losses), net		61			—			7		—		35			—			(2	)		—
Segment Profit (Loss)		(17,237	)		(93	)		1,368		6		(16,797	)		(28	)		5,304			7		(1,360	)		(417	)

31

Operating Revenues by Charter Arrangement. The table below sets forth, for the periods indicated, the amount of operating revenues by charter arrangement.

	For the Three  Months Ended September 30,								For the Nine Months Ended September 30,								Change ’10/’09
	2010				2009				2010				2009				3 Mos			9 Mos
	$’000		%		$’000		%		$’000		%		$’000		%		%			%
Operating Revenues:
Time charter		10,206		55		13,402		62		35,487		60		38,697		54		(24	)		(8	)
Bareboat charter		7,594		41		4,416		20		20,136		34		13,104		18		72			54
Contract of affreightment and other		740		4		3,919		18		3,632		6		20,568		28		(81	)		(82	)
		18,540		100		21,737		100		59,255		100		72,369		100

Current Year Quarter compared with Prior Year Quarter

Operating Revenues.Time charter revenues decreased by $3.2 million primarily due to changes in contract status of two vessels from time charter to long-term bareboat charter, one effective January 21, 2010 and the other effective August 21, 2010. Another tanker incurred off-hire time while repositioning to the U.S. Gulf of Mexico before commencing a new time charter. These decreases were partially offset by less out-of-service days for a tanker that had been in temporary lay-up during the Prior Year Quarter. Bareboat charter revenues increased by $3.2 million due to the change in contract status of the two time charter vessels to long-term bareboat charter. Contract of affreightment and other revenues were $3.2 million lower primarily due to softer spot market conditions and the lay-up of theSeabulk America. As of September 30, 2010, the Company had four vessels on long-term bareboat charters, three vessels on time charters and one vessel was laid-up.

Costs and Expenses.Operating expenses were $2.7 million lower, primarily due to the lay-up of theSeabulk America and the change in contract status of two vessels from time charter to long-term bareboat charter, partially offset by the cost of a short handover drydocking for one of these vessels.

Depreciation and amortization expenses were $0.7 million lower due to a reduction in depreciation expense following the impairment of theSeabulk America as discussed below.

Gains on Asset Dispositions and Impairments. As previously reported, theSeabulk America had been scheduled to undergo a regulatory drydocking in the Current Year Quarter, a requirement for continued operation. Given the prevailing market conditions, the Company deferred the drydocking, laid–up the vessel and recognized an impairment charge of $18.7 million which reduced the vessels carrying value to its fair value of $5.0 million. TheSeabulk Americacontributed operating revenues of $5.2 million from the beginning of the year through its lay-up in August 2010.

Current Nine Months compared with Prior Nine Months

Operating Revenues.Operating revenues were $13.1 million lower. Time charter revenues decreased by $3.2 million due to a change in contract status of two vessels from time charter to long-term bareboat charter and more out-of-service time for drydockings. Bareboat charter revenues increased by $7.0 million due to the change in contract status of two vessels from time charter to long-term bareboat charter. Contract of affreightment and other revenues were $16.9 million lower due to fewer vessels operating in the spot market, reduced spot market demand and the lay-up of theSeabulk America.

Costs and Expenses.Operating expenses were $8.9 million lower in the Current Nine Months consistent with more vessels operating under bareboat charters and fewer vessels operating in the spot market. Drydocking expenses were $5.4 million during the Current Nine Months as two tankers underwent regulatory drydockings

32

and two others underwent short handover drydockings prior to commencing long term bareboat charters. Drydocking expenses were $3.5 million in the Prior Nine Months as only one tanker underwent a regulatory drydocking.

Gains on Asset Dispositions and Impairments. See Current Year Quarter discussion above related to the impairment charge for theSeabulk America.

Fleet Count

As of September 30, 2010 and 2009, Marine Transportation Services owned eight U.S.-flag product tankers operating in the domestic coastwise trade.

Subsequent to September 30, 2010, the Company received proceeds of $89.0 million upon entering into a sale leaseback transaction with a financial institution involving one of its tankers, with a carrying value of $55.9 million, that is on a long-term bareboat charter with a customer.

Inland River Services

	For the Three  Months Ended September 30,								For the Nine Months Ended September 30,								Change ’10/’09
	2010				2009				2010				2009				3 Mos		9 Mos
	$’000		%		$’000		%		$’000		%		$’000		%		%		%
Operating Revenues:
United States		41,381		100		34,314		100		109,413		100		101,491		100		21		8
Costs and Expenses:
Operating		26,535		64		20,144		59		67,636		62		57,392		56
Administrative and general		2,898		7		2,443		7		7,577		7		6,627		7
Depreciation and amortization		5,415		13		4,785		14		15,249		14		14,601		14
		34,848		84		27,372		80		90,462		83		78,620		77
Gains on Asset Dispositions		29,445		71		813		2		31,231		29		3,470		3
Operating Income		35,978		87		7,755		22		50,182		46		26,341		26		364		91
Other Income (Expense):
Other, net		—		—		—		—		10		—		—		—
Equity in Earnings of 50% or Less Owned Companies, Net of Tax		3,522		8		140		1		4,229		4		2,014		2
Segment Profit		39,500		95		7,895		23		54,421		50		28,355		28		400		92

33

Operating Revenues by Service Line. The following table presents, for the periods indicated, operating revenues by service line.

	For the Three  Months Ended September 30,								For the Nine Months Ended September 30,								Change ’10/’09
	2010				2009				2010				2009				3 Mos			9 Mos
	$’000		%		$’000		%		$’000		%		$’000		%		%			%
Operating Revenues:
Dry cargo barge pools		22,711		55		16,385		48		56,700		52		48,413		48		39			17
Liquid unit tow operations		7,297		18		7,561		22		22,491		21		22,563		22		(3	)		—
Charter-out of dry cargo barges		2,124		5		2,374		7		6,491		6		7,149		7		(11	)		(9	)
10,000 barrel liquid tank barge operations		2,919		7		1,926		6		6,801		6		5,884		6		52			16
Inland river towboat operations and other activities		6,330		15		6,068		17		16,930		15		17,482		17		4			(3	)
		41,381		100		34,314		100		109,413		100		101,491		100

Dry Cargo Barge Pools Operating Data. The following table presents, for the periods indicated, Inland River Services’ interest in tons moved and its available barge days in the dry cargo barge pools. Available barge days represents the total calendar days during which the Company’s owned and chartered-in barges were in the pool.

	For the Three  Months Ended September 30,								For the Nine Months Ended September 30,								Change ’10/’09
	2010				2009				2010				2009				3 Mos		9 Mos
	Tons		%		Tons		%		Tons		%		Tons		%		%		%
Tons Moved (in thousands):
Grain		811		76		669		73		2,179		69		1,706		68		21		28
Non-Grain		257		24		249		27		978		31		794		32		3		23
		1,068		100		918		100		3,157		100		2,500		100		16		26
	Days				Days				Days				Days
Available Barge Days		42,743				36,084				123,071				103,540				18		19

The increase in available barge days in the Current Year Quarter and Current Nine Months was primarily due to the addition of newly constructed barges, the return of barges previously chartered-out, and the addition of equipment previously included in a joint venture.

Current Year Quarter compared with Prior Year Quarter

Operating Revenues. Operating revenues were $7.1 million higher of which $6.3 million was due to an increase in revenues from dry cargo barge pools primarily due to an increase in available barge days, generally higher freight rates and near perfect operating conditions on the river system that allowed for loadings to full drafts.

Costs and Expenses. Operating expenses were $6.4 million higher primarily due to a $4.0 million increase in fleeting, towing and switching costs as a result of higher activity levels in the dry cargo barge pools and a 12% increase in fuel prices.

34

Gains on Asset Dispositions. During the Current Year Quarter, the Company sold 60 dry cargo barges to its South American joint venture for net proceeds of $25.8 million and recognized gains on dispositions of $16.5 million. In addition, the Company recognized $12.2 million of previously deferred gains following the acquisition of a controlling interest in another of its joint ventures.

Equity in Earnings of 50% or Less Owned Companies.Equity in Earnings of 50% or Less Owned Companies was $3.4 million higher primarily due to a gain from the Company marking its investment in a joint venture to fair value as a consequence of obtaining a controlling interest.

Current Nine Months compared with Prior Nine Months

Operating Revenues.Operating revenues were $7.9 million higher. Revenues from dry cargo barge pools were $8.3 million higher primarily due to an increase in available barge days, generally higher freight rates and very good operating conditions on the river system.

Costs and Expenses.Operating expenses were $10.2 million higher primarily due to a $7.0 million increase in fleeting, towing and switching costs as a result of higher activity levels in the dry cargo barge pools and a 20% increase in fuel prices.

Gains on Asset Dispositions.See Current Year Quarter discussion above for Current Nine Months activity. During the Prior Nine Months, the Company sold five dry cargo barges, three towboats and other equipment for net proceeds of $20.3 million and recognized gains on disposition of $3.5 million.

Equity in Earnings of 50% or Less Owned Companies.See Current Year Quarter discussion above.

Fleet Count

The composition of Inland River Services’ fleet as of September 30 was as follows:

	Owned		Joint Ventured		Leased-in		Pooled or Managed		Total
2010
Inland river dry cargo barges		634		172		2		586		1,394
Inland river liquid tank barges		68		—		2		16		86
Inland river deck barges		26		—		—		—		26
Inland river towboats		17		15		—		—		32
Dry cargo vessels(1)		—		1		—		—		1
		745		188		4		602		1,539
2009
Inland river dry cargo barges		581		262		2		540		1,385
Inland river liquid tank barges		51		34		2		—		87
Inland river deck barges		26		—		—		—		26
Inland river towboats		16		12		—		—		28
Dry cargo vessels(1)		—		1		—		—		1
		674		309		4		540		1,527

(1) Argentine-flag.

35

Aviation Services

	For the Three  Months Ended September 30,										For the Nine Months Ended September 30,											Change ’10/’09
	2010					2009					2010						2009					3 Mos		9 Mos
	$’000			%		$’000			%		$’000			%			$’000			%		%		%
Operating Revenues:
United States		52,339			78		54,742			85		138,863			77			156,944			87
Foreign		14,797			22		9,517			15		40,981			23			24,400			13
		67,136			100		64,259			100		179,844			100			181,344			100		4		(1	)
Costs and Expenses:
Operating		37,492			56		39,659			62		110,059			61			117,288			65
Administrative and general		7,274			11		5,624			9		18,756			10			15,424			8
Depreciation and amortization		10,889			16		9,706			15		32,064			18			27,482			15
		55,655			83		54,989			86		160,879			89			160,194			88
Gains (Losses) on Asset Dispositions and Impairments, Net		412			1		1,062			2		881			—			3			—
Operating Income		11,893			18		10,332			16		19,846			11			21,153			12		15		(6	)
Other Income (Expense):
Derivative gains (losses), net		(29	)		—		(80	)		—		(91	)		—			233			—
Foreign currency gains (losses), net		(81	)		—		296			—		(1,677	)		(1	)		1,662			1
Other, net		50			—		—			—		50			—			—			—
Equity in Earnings (Losses) of 50% or Less Owned Companies, Net of Tax		663			1		(186	)		—		(54	)		—			(190	)		—
Segment Profit		12,496			19		10,362			16		18,074			10			22,858			13		21		(21	)

Operating Revenues by Service Line. The following tables set forth, for the periods indicated, the amount of operating revenues by service line.

	For the Three  Months Ended September 30,											For the Nine Months Ended September 30,										Change ’10/’09
	2010					2009						2010					2009					3 Mos			9 Mos
	$’000			%		$’000			%			$’000			%		$’000			%		%			%
Operating Revenues:
U.S. Gulf of Mexico, primarily from oil and gas activities		30,172			45		30,783			48			86,201			48		94,142			52		(2	)		(8	)
Alaska, primarily from oil and gas activities		9,904			15		8,264			13			22,547			12		18,779			10		20			20
Leasing		14,972			22		9,692			15			41,645			23		24,925			14		54			67
Air Medical Services		5,994			9		8,485			13			16,523			9		29,811			16		(29	)		(45	)
Flightseeing		4,133			6		4,187			7			6,438			4		6,937			4		(1	)		(7	)
FBO		2,049			3		3,188			5			6,774			4		7,713			4		(36	)		(12	)
Intersegment Eliminations		(88	)		—		(340	)		(1	)		(284	)		—		(963	)		—		74			71
		67,136			100		64,259			100			179,844			100		181,344			100

36

Operating Data. The following tables set forth, for the periods indicated, flight hours flown by service line.

	For the Three  Months Ended September 30,								For the Nine Months Ended September 30,								Change ’10/’09
	2010				2009				2010				2009				3 Mos			9 Mos
	Hours		%		Hours		%		Hours		%		Hours		%		%			%
U.S. Gulf of Mexico		8,946		47		9,691		52		26,898		55		30,741		59		(8	)		(13	)
Alaska		1,934		10		1,686		9		3,758		8		3,684		7		15			2
Leasing		3,919		21		2,178		12		8,803		18		4,891		9		80			80
Air Medical Services		2,330		12		3,015		16		6,282		13		9,781		19		(23	)		(36	)
Flightseeing		1,826		10		1,927		11		2,778		6		3,103		6		(5	)		(10	)
		18,955		100		18,497		100		48,519		100		52,200		100		2			(7	)

Current Year Quarter compared with Prior Year Quarter

Operating Revenues. In the U.S. Gulf of Mexico, operating revenues were $0.6 million lower. Demand for equipment in support of oil and gas activities was lower as a consequence of the moratorium on certain types of deepwater drilling that adversely affected offshore activity levels throughout the Current Year Quarter. For Aviation Services, the impact was offset by $6.2 million in additional operating revenues for equipment contracted to the U.S. Coast Guard in support of Oil Spill Response efforts. During the Current Year Quarter, as many as seven helicopters were providing air support and, as of October 25, 2010, three helicopters continued to provide support.

Operating revenues from leasing activities were $5.3 million higher as the Company continues to place additional aircraft on short and long-term leases in international markets. As of September 30, 2010, 38 aircraft were dedicated to the leasing market compared with 28 aircraft as of September 30, 2009.

Operating revenues for air medical services were $2.5 million lower due to the conclusion of low margin contracts that were not renewed.

Costs and Expenses. Operating expenses were $2.2 million lower primarily due to a $1.5 million reduction in repair and maintenance expense primarily due to a reduction in the number of air medical services contracts. General and administrative expenses were $1.7 million higher primarily due to higher wage and benefit costs. Depreciation and amortization expense was $1.2 million higher due to the continued modernization of the fleet as older helicopters were replaced with new and more complex equipment.

Current Nine Months compared with Prior Nine Months

Operating Revenues.In the U.S. Gulf of Mexico, operating revenues were $7.9 million lower. Demand for equipment in support of oil and gas activities was lower as a consequence of the moratorium on certain types of deepwater drilling that adversely affected offshore activity levels during parts of the Current Nine Months. For Aviation Services, the impact was offset by $8.9 million in additional operating revenues for equipment contracted to the U.S. Coast Guard in support of Oil Spill Response efforts.

Operating revenues from leasing activities were $16.7 million higher as the Company continues to place additional aircraft on short and long-term leases in international markets.

Operating revenues for air medical services were $13.3 million lower due to the conclusion of low margin contracts that were not renewed.

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Costs and Expenses.Operating expenses were $7.2 million lower primarily due to a reduction in the number of air medical services contracts which resulted in a $4.1 million reduction in wage and benefit costs and a $5.5 million reduction in repair and maintenance expense partially offset by the receipt of insurance proceeds related to the damage incurred from Hurricanes Gustav and Ike in the Prior Nine Months. General and administrative expenses were $3.3 million higher primarily due to higher wage and benefit costs and the reversal in the Prior Nine Months of a $1.5 million provision for doubtful accounts following its collection. Depreciation and amortization expense was $4.6 million higher due to the continued modernization of the fleet as older helicopters were replaced with new and more complex equipment.

Fleet Count

The composition of Aviation Services’ fleet as of September 30 was as follows:

	Owned(1)		Joint Ventured		Leased-in(2)		Managed		Total
2010
Light helicopters – single engine		51		6		3		—		60
Light helicopters – twin engine		30		—		6		9		45
Medium helicopters		54		—		2		3		59
Heavy helicopters		9		—		—		—		9
		144		6		11		12		173
2009
Light helicopters – single engine		51		6		3		—		60
Light helicopters – twin engine		35		—		6		9		50
Medium helicopters		52		—		3		3		58
Heavy helicopters		8		—		1		—		9
		146		6		13		12		177

(1) Excludes one helicopter removed from service as of September 30, 2010 and 2009, respectively, and excludes three helicopters removed from service and disassembled for spare parts as of September 30, 2010.

(2) Excludes three helicopters removed from service as of September 30, 2010 and 2009, respectively.

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Environmental Services

	For the Three  Months Ended September 30,									For the Nine Months Ended September 30,									Change ’10/’09
	2010				2009					2010					2009				3 Mos		9 Mos
	$’000		%		$’000			%		$’000			%		$’000		%		%		%
Operating Revenues:
United States		462,160		99		28,779			85		692,921			97		86,030		85
Foreign		6,066		1		5,048			15		18,092			3		15,206		15
		468,226		100		33,827			100		711,013			100		101,236		100		1,284		602
Costs and Expenses:
Operating		329,497		70		23,206			69		476,942			67		70,939		70
Administrative and general		11,508		2		6,090			18		24,070			3		19,297		19
Depreciation and amortization		2,249		1		1,846			5		6,331			1		5,339		5
		343,254		73		31,142			92		507,343			71		95,575		94
Gains (Losses) on Asset Dispositions		—		—		(1	)		—		(53	)		—		11		—
Operating Income		124,972		27		2,684			8		203,617			29		5,672		6		4,556		3,490
Other Income (Expense):
Foreign currency gains, net		3		—		—			—		10			—		20		—
Equity in Earnings of 50% or Less Owned Companies, Net of Tax		533		—		34			—		625			—		135		—
Segment Profit		125,508		27		2,718			8		204,252			29		5,827		6		4,518		3,405

Operating Revenue by Service Line. The table below sets forth, for the periods indicated, the amount of operating revenues by service line.

	For the Three  Months Ended September 30,								For the Nine Months Ended September 30,								Change ’10/’09
	2010				2009				2010				2009				3 Mos			9 Mos
	$’000		%		$’000		%		$’000		%		$’000		%		%			%
Operating Revenues:
Response Services		427,488		91		4,395		13		617,075		87		21,824		22		9,627			2,728
Retainer Services		7,552		2		7,713		23		20,632		3		20,752		21		(2	)		(1	)
Standby Services		2,358		—		1,926		6		5,812		—		4,480		4		22			30
Professional Services		4,576		1		5,031		15		11,503		2		15,304		15		(9	)		(25	)
Software Services		1,426		—		—		—		2,216		—		—		—		—			—
Project Management		21,684		5		13,391		39		47,375		7		33,351		33		62			42
Equipment Sales and Leasing		3,142		1		1,371		4		6,400		1		5,525		5		129			16
		468,226		100		33,827		100		711,013		100		101,236		100

Summary.Operating revenues and operating margins for Environmental Services can vary materially between comparable periods depending upon the number and magnitude of emergency responses. Operating margins from response services vary depending on whether Environmental Services uses its own personnel and

39

equipment resources as opposed to the use of third-party personnel and equipment. As discussed above in “Overview” on page 25, operating results in the Current Year Quarter and Current Nine Months were significantly impacted by the Oil Spill Response. While certain Oil Spill Response activities continue, the level of equipment and services being provided has diminished since the end of the Current Year Quarter. While Environmental Services may still be engaged in the Oil Spill Response beyond 2010, the extent of these activities is uncertain but expected to be significantly less than the levels reached during the Current Year Quarter and Current Nine Months.

Commodity Trading and Logistics

	For the Three  Months Ended June 30,												For the Nine Months Ended September 30,										Change ’10/’09
	2010						2009						2010						2009				3 Mos		9 Mos
	$’000			%			$’000			%			$’000			%			$’000		%		%		%
Operating Revenues:
United States		204,945			94			109,045			72			515,090			91			211,035		70
Foreign		11,951			6			41,821			28			47,862			9			90,186		30
		216,896			100			150,866			100			562,952			100			301,221		100		44		87
Costs and Expenses:
Operating		204,467			94			150,983			100			555,213			99			292,019		97
Administrative and general		3,716			2			3,705			2			10,251			2			9,012		3
Depreciation		13			—			7			—			48			—			9		—
		208,196			96			154,695			102			565,512			101			301,040		100
Operating Income (Loss)		8,700			4			(3,829	)		(2	)		(2,560	)		(1	)		181		—		327		(1,514	)
Other Income (Expense):
Derivative gains (losses), net(1)		(5,307	)		(2	)		1,689			1			3,612			1			3,226		1
Foreign currency gains (losses), net		190						177			—			(557	)		—			449		—
Other, net		—			—			—			—			6			—			26		—
Equity in Earnings of 50% or Less Owned Companies, Net of Tax		1,042			—			—			—			7			—			187		—
Segment Profit (Loss)		4,625			2			(1,963	)		(1	)		508			—			4,069		1		336		(88	)

(1) In the Company’s energy and sugar trading businesses, fixed price future purchase and sale contracts for ethanol and sugar are included in derivative positions at fair value. The Company routinely enters into exchange traded positions to offset its net commodity market exposure on these purchase and sale contracts as well as its inventory balances. As a result, derivative gains (losses), net recognized during any period are predominately offset by fair value adjustments included in operating revenues and expenses on completed transactions, subject to certain timing differences on the delivery of physical inventories. As of September 30, 2010, the net market exposure to ethanol and sugar under its contracts and inventory balances was not material.

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Operating Revenues and Segment Profit (Loss) by Commodity Type. The table below sets forth, for the periods indicated, the amount of operating revenues and segment profit (loss) by commodity type.

	For the Three  Months Ended September 30,												For the Nine Months Ended September 30,												Change ’10/’09
	2010						2009						2010						2009						3 Mos			9 Mos
	$’000			%			$’000			%			$’000			%			$’000			%			%			%
Operating Revenues:
Energy		165,966			77			82,767			55			426,270			76			166,272			55			101			156
Sugar		38,979			18			38,135			25			85,373			15			41,691			14			2			105
Rice		11,951			5			29,964			20			51,309			9			93,258			31			(60	)		(45	)
		216,896			100			150,866			100			562,952			100			301,221			100
Segment Profit (Loss):
Energy		5,831			126			2,154			110			8,036			1,582			4,967			122			171			62
Sugar		10			0			(2,150	)		(110	)		1,387			273			(1,671	)	��	(41	)		100			183
Rice		(1,216	)		(26	)		(1,967	)		(100	)		(8,915	)		(1,755	)		773			19			38			(1,253	)
		4,625			100			(1,963	)		(100	)		508			100			4,069			100

Energy.Segment profit improved in the Current Year Quarter and Current Nine Months compared with the Prior Year Quarter and Prior Nine Months primarily due to higher renewable fuel sales volumes and increased sales of clean products. The Current Year Quarter also improved due to equity in earnings from the Company’s alcohol manufacturing facility joint venture, which became fully operational during the Current Year Quarter.

Sugar. Sugar reported segment income in the Current Year Quarter compared with a segment loss in the Prior Year Quarter. Results in the Prior Year Quarter were negatively impacted by a $2.2 million provision for doubtful accounts. In addition, segment profit improved in the Current Nine Months compared with the Prior Nine Months primarily due to higher sales volumes and margins from sugar activities.

Rice. Segment losses from rice activities in the Current Year Quarter and the Current Nine Months were primarily due to costs incurred during the winding down of trading activities and market write-downs of rice inventories. As previously reported, the Company has decided to reduce its rice activities and continues to liquidate its rice inventories. As of September 30, 2010, rice inventory balances were $1.8 million compared with $12.9 million at the end of the Prior Year Quarter.

Other Segment Profit

	For the Three Months Ended September 30,						For the Nine Months Ended September 30,						Change ’10/’09
	2010			2009			2010			2009			3 Mos			9 Mos
	$’000			$’000			$’000			$’000			%			%
Harbor and Offshore Towing Services		4,296			2,016			11,951			6,970			113			71
Other Activities		183			(346	)		(721	)		(981	)		153			27
Equity in Earnings (Losses) of 50% or Less Owned Companies		(127	)		30			607			(881	)		(523	)		169
Segment Profit		4,352			1,700			11,837			5,108			156			132

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Harbor and Offshore Towing Services.Segment profit increased by $2.3 million in the Current Year Quarter compared with the Prior Year quarter and by $5.0 million in the Current Nine Months compared with the Prior Nine Months primarily due to incremental work related to the Oil Spill Response.

Corporate and Eliminations

	For the Three Months Ended September 30,						For the Nine Months Ended September 30,						Change ’10/’09
	2010			2009			2010			2009			3 Mos			9 Mos
	$’000			$’000			$’000			$’000			%			%
Corporate Expenses		(9,408	)		(7,874	)		(29,058	)		(26,637	)		(19	)		(9	)
Eliminations		(3	)		(1	)		—			306			—			(100	)
Operating Loss		(9,411	)		(7,875	)		(29,058	)		(26,331	)		(20	)		(10	)
Other Income (Expense):
Derivative gains (losses), net		6,984			719			(3,818	)		6,263			871			(161	)
Foreign currency gains (losses), net		6,401			(255	)		(2,204	)		3,626			2,610			(161	)
Other, net		(40	)		(70	)		556			(22	)		43			2,627

Derivative gains (losses), net.Derivative gains, net of $7.0 million in the Current Year Quarter were primarily due to gains on forward currency exchange, option and future contracts resulting from the weakening of the U.S. dollar against the euro. Derivative losses, net of $3.8 million in the Current Nine Months were primarily due to losses on interest rate swaps and losses on U.S. treasury notes and bond future and option contracts resulting from declines in market interest rates.

Foreign currency gains (losses), net.Foreign currency gains (losses), net primarily arise from the revaluation of certain of the Company’s foreign currency positions in cash, intercompany notes receivable and marketable securities denominated in pound sterling and euros. In the Current Year Quarter, a weakening of the U.S. dollar resulted in foreign currency gains, net; however, overall the U.S. dollar strengthened against the pound sterling and euro in the Current Nine Months resulting in foreign currency losses, net.

Other Income (Expense) not included in Segment Profit (Loss)

	For the Three Months Ended September 30,						For the Nine Months Ended September 30,						Change ’10/’09
	2010			2009			2010			2009			3 Mos			9 Mos
	$’000			$’000			$’000			$’000			%			%
Interest income		2,562			789			5,788			2,410			225			140
Interest expense		(10,274	)		(14,267	)		(33,862	)		(42,679	)		28			21
Debt extinguishment gains (losses), net		—			2,787			(368	)		4,072			(100	)		(109	)
Marketable security gains (losses), net		(54	)		6,948			(3,499	)		14,796			(101	)		(124	)
		(7,766	)		(3,743	)		(31,941	)		(21,401	)		(107	)		(49	)

Interest Expense.Interest expense decreased in the Current Year Quarter and Current Nine Months compared with the Prior Year Quarter and Prior Nine Months primarily due to the reduction in principal balances following the purchase, maturity or redemption of certain of the Company’s Senior Notes, Convertible Debentures and Title XI Bonds, partially offset by the issuance in September 2009 of the Company’s 7.375% Senior Notes due 2019.

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Marketable security gains (losses), net.Marketable security losses, net in the Current Nine Months and marketable security gains, net in the Prior Year Quarter and Prior Nine Months were primarily attributable to the Company’s investments in long marketable securities positions.

Liquidity and Capital Resources

Overview

The Company’s ongoing liquidity requirements arise primarily from working capital needs, meeting its capital commitments and the repayment of debt obligations. In addition, the Company may use its liquidity to fund acquisitions, repurchase shares of SEACOR common stock, par value $0.01 per share (“Common Stock”), for treasury or to make other investments. Sources of liquidity are cash balances, marketable securities, construction reserve funds, Title XI reserve funds, cash flows from operations and borrowings under the Company’s revolving credit facility. From time to time, the Company may secure additional liquidity through the issuance of debt, shares of Common Stock, preferred stock or a combination thereof.

The Company’s unfunded capital commitments as of September 30, 2010 consisted primarily of offshore support vessels, helicopters, an interest in a dry-bulk articulated tug-barge and other equipment. These commitments totaled $279.8 million, of which $69.4 million is payable during the remainder of 2010 with the balance payable through 2013. Of the total unfunded capital commitments, $2.8 million may be terminated without further liability.

As of September 30, 2010, construction reserve funds of $262.7 million were classified as non-current assets in the accompanying condensed consolidated balance sheets as the Company has the intent and ability to use the funds to acquire equipment.

SEACOR’s Board of Directors previously approved a securities repurchase plan that authorizes the Company to acquire Common Stock, which may be acquired through open market purchases, privately negotiated transactions or otherwise, depending on market conditions. On February 18, 2010, SEACOR’s Board of Directors increased the repurchase authority up to $250.0 million and, as of September 30, 2010, the remaining authority under the repurchase plan was $124.1 million.

SEACOR’s Board of Directors has previously authorized the Company to purchase any or all of its 5.875% Senior Notes due 2012 and its 7.375% Senior Notes due 2019, which may be acquired through open market purchases, privately negotiated transactions or otherwise, depending on market conditions.

As of September 30, 2010, the Company had $125.0 million of outstanding borrowings under its revolving credit facility. The remaining availability under this facility as of September 30, 2010 was $323.5 million, net of issued letters of credit of $1.5 million. In addition, the Company had other outstanding letters of credit totaling $44.8 million with various expiration dates through 2014.

Summary of Cash Flows

	For the Nine Months Ended September 30,
	2010			2009
	$’000			$’000
Cash flows provided by or (used in):
Operating Activities		416,060			276,946
Investing Activities		690			(42,669	)
Financing Activities		(213,064	)		109,850
Effect of Exchange Rate Changes on Cash and Cash Equivalents		(7,312	)		476
Net Increase in Cash and Cash Equivalents		196,374			344,603

43

Operating Activities

Cash flows provided by operating activities increased by $139.1 million in the Current Nine Months compared with the Prior Nine Months. The components of cash flows provided by (used in) operating activities during the Current Nine Months and Prior Nine Months were as follows:

	For the Nine Months Ended September 30,
	2010			2009
	$’000			$’000
Operating income before depreciation and gains on asset dispositions and impairments, net	$	451,092		$	282,017
Changes in operating assets and liabilities before interest and income taxes		55,516			26,317
Purchases of marketable securities		(66,865	)		(20,058	)
Proceeds from sale of marketable securities		29,849			51,020
Dividends received from 50% or less owned companies		17,125			15,531
Interest paid, excluding capitalized interest		(38,981	)		(34,737	)
Income taxes paid, net of refunds		(33,287	)		(44,948	)
Other		1,611			1,804
Total Cash flows provided by Operating Activities	$	416,060		$	276,946

Operating income before depreciation and gains on asset dispositions and impairments, net increased by $169.1 million primarily due to the impact of the Oil Spill Response. See “Consolidated Results of Operations” included above for a discussion of the results for each of the Company’s business segments.

During the Current Nine Months, changes in operating assets and liabilities before interest and income taxes provided cash flows of $55.5 million primarily due to the timing of collections associated with the Oil Spill Response and the liquidation of rice inventories in Commodity Trading and Logistics.

During the Current Nine Months, cash used in operating activities included $61.7 million to purchase marketable security long positions and $5.2 million to cover marketable security short positions. During the Prior Nine Months, cash used in operating activities included $19.0 million to purchase marketable security long positions and $1.1 million to cover marketable security short positions.

During the Current Nine Months, cash provided by operating activities included $25.0 million received from the sale of marketable security long positions and $4.8 million received upon entering into marketable security short positions. During the Prior Nine Months, cash provided by operating activities included $39.1 million received from the sale of marketable security long positions and $11.9 million received upon entering into marketable security short positions.

Investing Activities

During the Current Nine Months, net cash provided by investing activities was $0.7 million primarily as follows:

• Capital expenditures were $173.7 million. Equipment deliveries included one offshore support vessel, 113 inland river dry cargo barges, 17 liquid tank barges, three helicopters and one tractor tug.

• Proceeds from the disposition of property and equipment were $173.0 million. The Company sold six offshore support vessels, two helicopters, one ocean liquid tank barge, 60 dry cargo barges and other equipment. In addition, the Company received insurance proceeds related to the nationalization of one of its offshore support vessels and the total constructive loss of another offshore support vessel under construction.

44

• The Company made net investments in, and advances to, 50% or less owned companies of $19.2 million.

• The Company released $19.2 million of restricted cash and $7.0 million of Title XI reserve funds into general purpose funds primarily due to the redemption of all of the outstanding Title XI Bonds on two of the Company’s double-hull product tankers (as noted below).

• Construction reserve fund account transactions included withdrawals of $56.7 million and deposits of $46.2 million

• The Company made net investments in leases of $16.4 million.

During the Prior Nine Months, net cash used in investing activities was $42.7 million primarily as follows:

• Capital expenditures were $129.2 million. Equipment deliveries included three offshore support vessels, two inland river towboats, six helicopters and three ocean liquid tank barges.

• Proceeds from the dispositions of property and equipment were $95.0 million. The Company sold 17 offshore support vessels, five inland river dry cargo barges, three inland river towboats, four harbor tugs and other equipment. In addition, two helicopters were scrapped and one leased helicopter was a total loss after an accident in the North Sea.

• The Company made net investments in, and advances to, 50% or less owned companies of $8.3 million.

• Construction reserve fund account transactions included withdrawals of $62.1 million and deposits of $48.5 million.

Financing Activities

During the Current Nine Months, net cash used in financing activities was $213.1 million. During the Current Nine Months, the Company:

• redeemed of all of the outstanding bonds on two of its double hull product tankers, in principal amount of $61.9 million, for an aggregate purchase price of $63.0 million including a make-whole premium;

• repurchased $2.4 million, in principal amount, of its 5.875% Senior Notes due 2012 for an aggregate purchase price of $2.5 million;

• made scheduled payments on long-term debt and capital lease obligations of $6.7 million;

• made net payments on inventory financing arrangements of $19.6 million; and

• acquired for treasury 1,693,100 shares of its Common Stock for an aggregate purchase price of $126.0 million.

During the Prior Nine Months, net cash provided by financing activities was $109.9 million. During the Prior Nine Months, the Company:

• redeemed $18.4 million, in principal amount, of its 5.875% Senior Notes due 2012 for an aggregate purchase price of $18.4 million;

• redeemed $37.0 million, in principal amount, of its 7.2% Senior Notes due 2009 for an aggregate purchase price of $37.4 million;

• redeemed $20.2 million, in principal amount, of its 9.5% Senior Notes due 2013 for an aggregate purchase price of $20.1 million;

• redeemed $81.7 million of the remaining principal balance outstanding of its 9.5% Senior Notes due 2013 for $84.3 million;

45

• retired at maturity $32.8 million, in principal amount of its 7.2% Senior Notes for $32.8 million;

• repurchased $3.8 million, in principal amount, of its 2.875% Convertible Debentures due 2024 for $3.7 million;

• made scheduled payments on long-term debt and capital lease obligations of $26.0 million;

• made net payments on inventory financing arrangements of $16.8 million;

• issued $250.0 million in aggregate principal amount of its 7.375% Senior Notes due October 1, 2019 for proceeds of $245.9 million;

• borrowed $58.5 million under its revolving credit facility; and

• issued other secured debt in an aggregate principal amount of $45.2 million for proceeds of $44.9 million.

Effect of Exchange Rate Changes on Cash and Cash Equivalents

During the Current Nine Months, the effect of exchange rate changes reduced cash and cash equivalents by $7.3 million, primarily due to the strengthening of the U.S. dollar against the euro and pound sterling.

Short and Long-Term Liquidity Requirements

The Company anticipates it will continue to generate positive cash flows from operations in the near term and that these cash flows will be adequate to meet the Company’s working capital requirements. In support of the Company’s capital expenditure program or other liquidity requirements, the Company may use its cash balances, sell securities, utilize construction reserve funds, sell additional vessels or other equipment, enter into sale and leaseback transactions for equipment, and borrow under its revolving credit facility, issue debt or a combination thereof.

The Company’s long-term liquidity is dependent upon its ability to generate operating profits sufficient to meet its requirements for working capital, capital expenditures and a reasonable return on shareholders’ investment. The Company believes that earning such operating profits will permit it to maintain its access to favorably priced debt, equity or off-balance sheet financing arrangements. Management will continue to closely monitor the Company’s liquidity and the credit and capital markets.

Contingencies

Under United States law, “United States persons” are prohibited from business activities and contracts in certain countries, including Sudan and Iran. Relating to these prohibitions, Seabulk International, Inc., (“Seabulk”) a subsidiary of SEACOR acquired in July 2005, filed three reports with and submitted documents to the Office of Foreign Asset Control (“OFAC”) of the U.S. Department of Treasury in December 1999 and January and May 2002. One of the reports was also filed with the Bureau of Export Administration of the U.S. Department of Commerce. The reports and documents related to certain limited charters with third parties involving three Seabulk vessels that called in Sudan for several months in 1999 and January 2000 and charters with third parties involving several of Seabulk’s vessels that called in Iran in 1998. In March 2003, Seabulk received notification from OFAC that the case has been referred to its Civil Penalties Division. Should OFAC determine that these activities constituted violations of the laws or regulations, civil penalties, including fines, could be assessed against Seabulk or certain individuals who knowingly participated in such activity. The Company cannot predict the extent of such penalties; however, management does not believe the outcome of these matters will have a material impact on its consolidated financial position or its results of operations.

During 2006 and 2007, Marine Transportation Services (“MTS”) had two of its tankers retrofitted to a double-hull configuration in a foreign shipyard to enable each of them to continue to transport crude oil and

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petroleum products beyond their OPA 90 mandated retirement dates in 2011. Both vessels operate in the U.S. coastwise trade that, under the Shipping Acts, is restricted to vessels built or rebuilt in the United States. In May 2005, MTS received a determination from the U.S. Coast Guard (“USCG”), which administers the United States build requirements of the Shipping Acts, concluding the retrofit work would not constitute a foreign rebuilding and therefore would not jeopardize the tankers’ eligibility to operate in the U.S. coastwise trade. MTS completed the retrofit work in the foreign shipyard in reliance upon the USCG’s determination, which MTS believes was correct and in accord with the USCG’s long-standing regulations and interpretations. On July 9, 2007, a U.S. shipbuilders trade association and two operators of tankers in the U.S. coastwise trade (“Shipbuilders”) commenced a civil action in the U.S. District Court for the Eastern District of Virginia, Shipbuilders Council of America, Inc., et al. v. U.S. Department of Homeland Security, et al. , No. 1:07cv665 (E.D. Va.) (the “SB Trader Litigation”), in which they sought to have the court set aside the USCG’s determination and direct the USCG to revoke the coastwise license of one of the two retrofitted tankers, the Seabulk Trader. MTS intervened in the action to assist the USCG in defending its determination. On April 24, 2008, the Court issued a Memorandum Opinion granting a motion for summary judgment by Shipbuilders setting aside the USCG’s determination and remanding the matter to the USCG for further proceedings with instructions to revoke the coastwise endorsement of the Seabulk Trader. On April 30, 2008, MTS appealed the decision to the U.S. Court of Appeals for the Fourth Circuit (the “Court of Appeals”), and the lower court’s decision was stayed pending appeal, subject to certain terms (which MTS has also separately appealed). Those terms required that MTS pay to the plaintiffs 12.5% of the revenue generated by theSeabulk Trader from November 7, 2008 in the event that the Court of Appeals affirms the lower court’s decision to revoke its coastwise endorsement (the “Undertaking”). On July 2, 2008, Shipbuilders commenced a second civil action in the U.S. District Court for the Eastern District of Virginia, entitled Shipbuilders Council of America, Inc., et al. v. U.S. Department of Homeland Security, et al., No. 1:08cv680 (E.D. Va.) (the “SB Challenge Litigation”), alleging essentially identical claims as those asserted in the SB Trader Litigation against MTS’s second retrofitted tanker, the Seabulk Challenge.MTS has intervened in the SB Challenge Litigation that was stayed pending the decision of the Court of Appeals in the SB Trader Litigation. In September 2009, the Court of Appeals reversed the District Court, holding that the USCG’s interpretation was correct and that the District Court erred in requiring MTS to provide the Undertaking. On January 19, 2010, the District Court vacated its April 24, 2008 Order to the extent it directed the USCG to revoke the coastwise endorsement for theSeabulk Trader and remanded the matter to the USCG with instructions to (i) provide a fuller explanation of one aspect of its rebuild decision and (ii) consider further whether certain work relating to the vessel’s segregated ballast tanks constituted a prohibited foreign installation of required segregated ballast tanks. On August 31, 2010, the USCG issued a further determination further explaining its rebuild decision and concluding that the work relating to the vessel’s segregated ballast tanks did not constitute the installation of a required segregated ballast tank. One of the three plaintiffs in the District Court litigation urged the USCG to reach a contrary result with respect to the segregated ballast work, and it is possible that that plaintiff will ask the District Court to set aside this aspect of the USCG’s decision as well. The loss of coastwise eligibility for its two retrofitted tankers could adversely affect the Company’s financial condition and its results of operations. The aggregate carrying value of the Company’s two retrofitted tankers was $47.8 million as of September 30, 2010 and such tankers contributed operating revenues of $14.3 million during the nine months ended September 30, 2010.

Certain subsidiaries of the Company are participating employers in an industry-wide, multi-employer, defined benefit pension fund, the United Kingdom Merchant Navy Officers Pension Fund (“MNOPF”). Under the direction of a court order, any deficit of the MNOPF is to be remedied through funding contributions from all participating employers. The Company’s participation relates to officers employed between 1978 and 2002 by SEACOR’s Stirling group of companies (which had been acquired by SEACOR in 2001) and its predecessors. Based on an actuarial valuation of the MNOPF in 2003, the Company was invoiced and expensed $4.4 million in 2005, representing the Company’s allocated share of a total funding deficit of $412.0 million. Subsequent to this invoice, the pension fund trustees determined that $49.0 million of the $412.0 million deficit was deemed uncollectible due to the non-existence or liquidation of certain participating employers and the Company was invoiced and expensed $0.6 million in March 2007 for its allocated share of the uncollectible deficit. Based on an actuarial valuation of the MNOPF in 2006, the Company was invoiced and expensed $3.9 million in

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September 2007, representing the Company’s allocated share of an additional funding deficit of $332.6 million. The results of the most recent actuarial valuation of the MNOPF in 2009 indicated that an additional net funding deficit of $645.0 million (£408.0 million) had developed since the previous actuarial valuation in 2006 and the Company estimates its allocated share of the deficit to be $7.9 million (£5.0 million). When the Company is invoiced for its share, it will recognize payroll related operating expenses in the periods invoices are received. Depending on the results of future actuarial valuations, it is possible that the MNOPF will experience further funding deficits, requiring the Company to recognize payroll related operating expenses in the periods invoices are received.

A subsidiary of the Company is a participating employer in an industry-wide, multi-employer, defined benefit pension fund, the United Kingdom Merchant Navy Ratings Pension Fund (“MNRPF”). The Company’s participation relates to ratings employed between 1978 and 2001 by SEACOR’s Stirling group of companies (which had been acquired by SEACOR in 2001) and its predecessors. Based on an actuarial valuation in March 2008, the MNRPF has an accumulated funding deficit of $320.9 million (£203.0 million). No decision has yet been reached as to how the deficit will be recovered, but the Company expects it is likely that participating employers will be invoiced for their allocated share, at which time the Company would recognize payroll related operating expenses. The Company estimates its allocated share of the uninvoiced deficit to be approximately $1.1 million (£0.7 million). Depending on the results of the most recent and future actuarial valuations, it is possible that the MNRPF will experience further funding deficits, requiring the Company to recognize payroll related operating expenses in the periods invoices are received.

On June 12, 2009, a purported civil class action was filed against SEACOR, Era Group Inc., Era Aviation, Inc., Era Helicopters LLC and two other defendants (collectively the “Defendants”) in the U.S. District Court for the District of Delaware,Superior Offshore International, Inc. v. Bristow Group Inc., et al., No. 09-CV-438 (D.Del.). SEACOR acquired Era Group Inc., Era Aviation, Inc., and Era Helicopters LLC in December 2004. The complaint alleges that the Defendants violated federal antitrust laws by conspiring with each other to raise, fix, maintain or stabilize prices for offshore helicopter services in the U.S. Gulf of Mexico during the period January 2001 to December 2005. The purported class of plaintiffs includes all direct purchasers of such services and the relief sought includes compensatory damages and treble damages. On September 14, 2010, the District Court entered an order dismissing the complaint. On September 28, 2010, the plaintiffs filed a motion for reconsideration and amendment and motion for re-argument (the “Motions”). On October 12, 2010, Defendants opposed the Motions. The District Court has yet to rule on the Motions. The Company is unable to estimate the potential exposure, if any, resulting from these claims but believes they are without merit and intends to vigorously defend the action.

On July 14, 2010, a group of individuals and entities purporting to represent a class commenced a civil action in the U.S. District Court for the Eastern District of Louisiana,Terry G. Robin, et al. v. Seacor Marine, L.L.C., et al. , No. 2:10-cv-01986 (E.D. La.), in which they assert that support vessels, including vessels owned by the Company, responding to the explosion and resulting fire that occurred aboard the semi-submersible drilling rig, the Deepwater Horizon, were negligent in their efforts to save lives and put out the fire and contributed to the sinking of the Deepwater Horizon and subsequent oil spill. The action now is part of the overall multi-district litigation,In re Oil Spill by the Oil Rig “Deepwater Horizon”, MDL No. 2179. The complaint seeks compensatory, punitive, exemplary, and other damages. The Company believes that this lawsuit brought by class action lawyers targeting emergency responders acting under the direction of the U.S. Coast Guard has no merit and will seek its dismissal.

On July 20, 2010, two individuals purporting to represent a class commenced a civil action in the Civil District Court for the Parish of Orleans in the State of Louisiana,John Wunstell, Jr. and Kelly Blanchard v. BP, et al., No. 2010-7437 (Division K) (the “Wunstell Action”), in which they assert, among other theories, that Mr. Wunstell suffered injuries as a result of his exposure to certain noxious fumes and chemicals in connection with the provision of remediation, containment and response services by O’Brien’s Response Management Inc., a subsidiary of SEACOR. The action now is part of the overall multi-district litigation,In reOil Spill by the Oil

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Rig “Deepwater Horizon”, MDL No. 2179. The complaint also seeks to establish a “class-wide court-supervised medical monitoring program” for all individuals “participating in BP’s Deepwater Horizon Vessels of Opportunity Program and/or Horizon Response Program” who allegedly experience injuries similar to Mr. Wunstell. The Company believes this lawsuit has no merit and will seek its dismissal.

In the normal course of its business, the Company becomes involved in various other litigation matters including, among other things, claims by third parties for alleged property damages and personal injuries. Management has used estimates in determining the Company’s potential exposure to these matters and has recorded reserves in its financial statements related thereto where appropriate. It is possible that a change in the Company’s estimates of that exposure could occur, but the Company does not expect that any such change in estimated costs would have a material effect on the Company’s consolidated financial position or its results of operations.

ITEM 3. QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK

For discussion of the Company’s exposure to market risk, refer to Item 7A, Quantitative and Qualitative Disclosures about Market Risk, contained in the Company’s Annual Report on Form 10-K for the year ended December 31, 2009. There has been no significant change in the Company’s exposure to market risk during the Current Nine Months, except as described below.

The Company has entered into and settled various positions in forward currency exchange, option and future contracts which could offset possible consequences of changes in foreign exchange rates with respect to the Company’s business conducted in Europe, Africa, Latin America, the Middle East and Asia. As of September 30, 2010, the outstanding forward currency exchange contract positions translate to a net purchase of foreign currencies with an aggregate U.S. dollar equivalent of $162.7 million. As of September 30, 2010, the Company had capital purchase commitments of €129.9 million and had designated €75.8 million ($103.2 million) of its forward currency exchange contracts as fair value hedges. For those forward currency exchange contract positions not designated as fair value hedges, an adverse change of 10% in the underlying foreign currency exchange rates would reduce income by $4.1 million net of tax. In addition, the Company maintained cash balances of €58.4 million as of September 30, 2010.

Subsequent to September 30, 2010, forward currency exchange contracts with an aggregate U.S. dollar equivalent of $49.9 million matured and the Company entered into new forward currency exchange contracts with an aggregate U.S. dollar equivalent of $41.2 million. Additionally, the Company entered into a one-year rate-lock agreement with a notional value of $100.0 million based on the ten-year U.S. Treasury Note.

ITEM 4. CONTROLS AND PROCEDURES

With the participation of the Company’s principal executive officer and principal financial officer, management evaluated the effectiveness of the Company’s disclosure controls and procedures (as defined in Rules 13a-15(e) and 15d-15(e) under the Securities Exchange Act of 1934, as amended (the “Exchange Act”)), as of September 30, 2010. Based on their evaluation, the Company’s principal executive officer and principal financial officer concluded that the Company’s disclosure controls and procedures were effective as of September 30, 2010.

There have been no changes in the Company’s internal control over financial reporting (as defined in Rules 13a-15(f) and 15d-15(f) under the Exchange Act) that occurred during the Current Year Quarter that has materially affected, or is reasonably likely to materially affect, the Company’s internal control over financial reporting.

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PART II—OTHER INFORMATION

ITEM 1A. RISK FACTORS

The Company’s operations in the Gulf of Mexico may be adversely impacted by the recent Deepwater Horizon drilling rig accident and resulting oil spill. On April 22, 2010, the Deepwater Horizon, a semi-submersible deepwater drilling rig operating in the U.S. Gulf of Mexico, sank after an apparent blowout and fire resulting in a significant flow of hydrocarbons from the BP Macondo well (the “Deepwater Horizon/BP Macondo Well Incident”). The Company’s Offshore Marine Services and Aviation Services segments have extensive operations in the U.S. Gulf of Mexico, which, along with those of certain of its customers, may be adversely impacted by, among other factors:

• the recently lifted drilling moratorium issued by the U.S. Department of the Interior that directed lessees and operators to cease drilling all new deepwater wells on federal leases in the U.S. Gulf of Mexico, the additional safety and certification requirements for drilling activities imposed for the approval of development and production activities and the delayed approval of applications to drill in both deep and shallow-water areas;

• the suspension, stoppage or termination by customers of existing contracts and the demand by customers for new or renewed contracts in the U.S. Gulf of Mexico and other affected regions;

• unplanned customer suspensions, cancellations, rate reductions or non-renewals of commitments to charter vessels and aviation equipment or failures to finalize commitments to charter vessels and aviation equipment;

• new or additional government regulations or laws concerning drilling operations in the U.S. Gulf of Mexico and other regions; and

• the cost or availability of relevant insurance coverage.

Any one or a combination of these factors could reduce revenues, increase operating costs and have a material adverse effect on the Company’s financial position and its results of operations.

The Company could incur liability in connection with providing spill response services. The Company may incur increased legal fees and costs in connection with providing spill and emergency response services, including the Company's involvement in response to the Deepwater Horizon/BP Macondo Well Incident. Several of the Company’s business segments are currently subject to litigation arising from the Deepwater Horizon/BP Macondo Well Incident and the Company expects it may be named in additional litigation regarding its response services. Although companies are generally exempt in the United States from liability under the Clean Water Act (“CWA”) for their own actions and omissions in providing spill response services, this exemption might not apply if a company were found to have been grossly negligent or to have engaged in willful misconduct, or if it were to have failed to provide these services consistent with applicable regulations and directives under the CWA. In addition, the exemption under the federal CWA would not protect a company against liability for personal injury or wrongful death, or against prosecution under other federal or state laws. Although most of the states within the United States in which the Company provides services have adopted similar exemptions, several states have not. If a court or other applicable authority were to determine that the Company does not benefit from federal or state exemptions from liability in providing emergency response services, the Company could be liable together with the local contractor and the responsible party for any resulting damages, including damages caused by others, subject to the indemnification provisions and other liability terms and conditions negotiated with its domestic clients. In the international market, the Company does not benefit from the spill response liability protection provided by the CWA and, therefore, is subject to the liability terms and conditions negotiated with its international clients.

Negative publicity may adversely impact the Company. Media coverage and public statements that insinuate improper actions by the Company, regardless of their factual accuracy or truthfulness, may result in

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negative publicity, litigation or governmental investigations by regulators. Addressing negative publicity and any resulting litigation or investigations may distract management, increase costs and divert resources. Negative publicity may have an adverse impact on the Company’s reputation and the morale of its employees, which could adversely affect the Company’s financial position and its results of operations.

Increased domestic and international laws and regulations may adversely impact the Company. Changes in laws or regulations regarding offshore oil and gas exploration and development activities, including the recently lifted drilling moratorium issued by the U.S. Department of the Interior directing lessees and operators to cease drilling all new deepwater wells on federal leases in the U.S. Gulf of Mexico, may increase the cost or availability of insurance coverage and may influence decisions by customers or other industry participants that could reduce demand for the Company’s services, which would have a negative impact on the Company’s Offshore Marine Services and Aviation Services segments.

A change in oil spill regulation could reduce demand for Environmental Services’ emergency response services.Environmental Services is dependent upon regulations promulgated under OPA 90, international conventions and, to a lesser extent, local regulations. A change in emergency regulations and/or increased competition from non-profit competitors could decrease demand for Environmental Services’ emergency response services and/or increase costs without a commensurate increase in revenue.

ITEM 2. UNREGISTERED SALES OF EQUITY SECURITIES AND USE OF PROCEEDS

(c) This table provides information with respect to purchases by the Company of shares of its Common Stock during the Current Year Quarter:

Period	Total Number Of Shares Purchased		Average  Price Paid Per Share(1)		Total Number of Shares Purchased as Part of Publicly  Announced Plans or Programs		Maximum Value of Shares that may Yet be Purchased under the Plans or Programs(2)
July 1 – 31, 2010		—	$	—		—	$	130,096,823
August 1 – 31, 2010		77,200	$	77.63		—	$	124,103,527
September 1 – 30, 2010		—	$	—		—	$	124,103,527

(1) Excludes commissions of $3,965 or $0.05 per share.

(2) Since February 1997, SEACOR’s Board of Directors authorized the repurchase of Common Stock, certain debt or a combination thereof and, from time to time thereafter, increased such authority. On February 18, 2010, SEACOR’s Board of Directors increased the authority to purchase Common Stock up to a total authorized expenditure of $250.0 million.

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ITEM 6. EXHIBITS

31.1	Certification by the Principal Executive Officer pursuant to Rule 13a-14(a) and Rule 15d-14(a) of the Securities Exchange Act, as amended.
31.2	Certification by the Principal Financial Officer pursuant to Rule 13a-14(a) and Rule 15d-14(a) of the Securities Exchange Act, as amended.
32.1	Certification by the Principal Executive Officer pursuant to 18 U.S.C. Section 1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002.
32.2	Certification by the Principal Financial Officer pursuant to 18 U.S.C. Section 1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002.
101.INS**	XBRL Instance Document
101.SCH**	XBRL Taxonomy Extension Schema
101.CAL**	XBRL Taxonomy Extension Calculation Linkbase
101.DEF**	XBRL Taxonomy Extension Definition Linkbase
101.LAB**	XBRL Taxonomy Extension Label Linkbase
101.PRE**	XBRL Taxonomy Extension Presentation Linkbase

** Pursuant to Rule 406T of Regulation S-T, these interactive data files are deemed not filed or part of a registration statement or prospectus for purposes of Sections 11 or 12 of the Securities Act of 1933 or Section 18 of the Securities Exchange Act of 1934 and otherwise are not subject to liability.

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SIGNATURES

Pursuant to the requirements 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.

	SEACOR Holdings Inc. (Registrant)
DATE: October 28, 2010	By:	/S/ CHARLES FABRIKANT
		Charles Fabrikant, Executive Chairman of the Board
		(Principal Executive Officer)
DATE: October 28, 2010	By:	/S/ RICHARD RYAN
		Richard Ryan, Senior Vice Presidentand Chief Financial Officer (Principal Financial Officer)

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EXHIBIT INDEX

31.1	Certification by the Principal Executive Officer pursuant to Rule 13a-14(a) and Rule 15d-14(a) of the Securities Exchange Act, as amended.
31.2	Certification by the Principal Financial Officer pursuant to Rule 13a-14(a) and Rule 15d-14(a) of the Securities Exchange Act, as amended.
32.1	Certification by the Principal Executive Officer pursuant to 18 U.S.C. Section 1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002.
32.2	Certification by the Principal Financial Officer pursuant to 18 U.S.C. Section 1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002.
101.INS**	XBRL Instance Document
101.SCH**	XBRL Taxonomy Extension Schema
101.CAL**	XBRL Taxonomy Extension Calculation Linkbase
101.DEF**	XBRL Taxonomy Extension Definition Linkbase
101.LAB**	XBRL Taxonomy Extension Label Linkbase
101.PRE**	XBRL Taxonomy Extension Presentation Linkbase

** Pursuant to Rule 406T of Regulation S-T, these interactive data files are deemed not filed or part of a registration statement or prospectus for purposes of Sections 11 or 12 of the Securities Act of 1933 or Section 18 of the Securities Exchange Act of 1934 and otherwise are not subject to liability.

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