Seacor (CKH) 10-Q 2011 Q2 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 June 30, 2011            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,
Fort Lauderdale, Florida	33316
(Address of Principal Executive Offices)	(Zip Code)

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 July 22, 2011 was 21,692,899. 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 June 30, 2011 and December 31, 2010	3
		Condensed Consolidated Statements of Income for the Three and Six Months Ended June 30, 2011 and 2010	4
		Condensed Consolidated Statement of Changes in Equity for the Six Months Ended June 30, 2011	5
		Condensed Consolidated Statements of Cash Flows for the Six Months Ended June 30, 2011 and 2010	6
		Notes to Condensed Consolidated Financial Statements	7
	Item 2.	Management’s Discussion and Analysis of Financial Condition and Results of Operations	26
	Item 3.	Quantitative and Qualitative Disclosures About Market Risk	53
	Item 4.	Controls and Procedures	53
Part II.	Other Information		54
	Item 2.	Unregistered Sales of Equity Securities and Use of Proceeds	54
	Item 4.	Submission of Matters to a Vote of Security Holders	54
	Item 6.	Exhibits	55

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PART I—FINANCIAL INFORMATION

ITEM 1. FINANCIAL STATEMENTS

SEACOR HOLDINGS INC.

CONDENSED CONSOLIDATED BALANCE SHEETS

(in thousands, except share data, unaudited)

	June 30, 2011			December 31, 2010
ASSETS
Current Assets:
Cash and cash equivalents	$	366,813		$	370,028
Restricted cash		12,976			12,651
Marketable securities		105,608			147,409
Receivables:
Trade, net of allowance for doubtful accounts of $3,502 and $4,212 in 2011 and 2010, respectively		321,244			450,912
Other		48,825			72,448
Inventories		87,131			67,498
Deferred income taxes		5,442			5,442
Prepaid expenses and other		24,979			18,414
Total current assets		973,018			1,144,802
Property and Equipment		2,942,637			2,803,754
Accumulated depreciation		(900,979	)		(835,032	)
Net property and equipment		2,041,658			1,968,722
Investments, at Equity, and Advances to 50% or Less Owned Companies		210,372			182,387
Construction Reserve Funds & Title XI Reserve Funds		314,679			323,885
Goodwill		62,467			61,779
Intangible Assets		18,448			21,169
Other Assets, net of allowance for doubtful accounts of $1,830 in 2011 and 2010		85,118			57,645
	$	3,705,760		$	3,760,389
LIABILITIES AND EQUITY
Current Liabilities:
Current portion of long-term debt	$	20,568		$	14,618
Current portion of capital lease obligations		1,064			1,030
Accounts payable and accrued expenses		212,357			322,785
Other current liabilities		232,309			197,080
Total current liabilities		466,298			535,513
Long-Term Debt		690,774			697,427
Capital Lease Obligations		4,901			5,493
Deferred Income Taxes		561,477			567,880
Deferred Gains and Other Liabilities		146,853			156,711
Total liabilities		1,870,303			1,963,024
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; 36,361,232 and 36,110,719 shares issued in 2011 and 2010, respectively		363			361
Additional paid-in capital		1,239,502			1,225,296
Retained earnings		1,491,824			1,471,623
Shares held in treasury of 14,682,418 and 14,711,211 in 2011 and 2010, respectively, at cost		(901,460	)		(903,004	)
Accumulated other comprehensive loss:
Cumulative translation adjustments, net of tax		(2,861	)		(3,995	)
Derivative losses on cash flow hedges, net of tax		(3,871	)		(2,933	)
Other, net of tax		(111	)		(111	)
		1,823,386			1,787,237
Noncontrolling interests in subsidiaries		12,071			10,128
Total equity		1,835,457			1,797,365
	$	3,705,760		$	3,760,389

The accompanying notes are an integral part of these condensed consolidated financial statements and should be read in conjunction herewith.

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SEACOR HOLDINGS INC.

CONDENSED CONSOLIDATED STATEMENTS OF INCOME

(in thousands, except share data, unaudited)

	Three Months Ended June 30,						Six Months Ended June 30,
	2011			2010			2011			2010
Operating Revenues	$	536,446		$	694,576		$	1,008,710		$	1,089,151
Costs and Expenses:
Operating		428,671			484,742			799,682			797,047
Administrative and general		45,937			46,108			92,331			86,999
Depreciation and amortization		41,070			41,608			81,129			83,005
		515,678			572,458			973,142			967,051
Gains on Asset Dispositions and Impairments, Net		10,282			4,398			17,537			18,057
Operating Income		31,050			126,516			53,105			140,157
Other Income (Expense):
Interest income		3,307			1,863			7,045			3,226
Interest expense		(10,465	)		(11,264	)		(20,506	)		(23,588	)
Debt extinguishment losses, net		—			(364	)		(48	)		(368	)
Marketable security losses, net		(4,754	)		(5,406	)		(3,220	)		(3,445	)
Derivative losses, net		(6,601	)		(4,721	)		(9,919	)		(1,945	)
Foreign currency gains (losses), net		1,520			(7,500	)		6,579			(10,201	)
Other, net		(56	)		46			(234	)		646
		(17,049	)		(27,346	)		(20,303	)		(35,675	)
Income Before Income Tax Expense and Equity in Earnings of 50% or Less Owned Companies		14,001			99,170			32,802			104,482
Income Tax Expense		5,638			37,399			13,004			39,715
Income Before Equity in Earnings of 50% or Less Owned Companies		8,363			61,771			19,798			64,767
Equity in Earnings of 50% or Less Owned Companies, Net of Tax		1,004			2,876			1,038			3,745
Net Income		9,367			64,647			20,836			68,512
Net Income attributable to Noncontrolling Interests in Subsidiaries		336			565			635			829
Net Income attributable to SEACOR Holdings Inc.	$	9,031		$	64,082		$	20,201		$	67,683
Basic Earnings Per Common Share of SEACOR Holdings Inc.	$	0.43		$	2.95		$	0.96		$	3.08
Diluted Earnings Per Common Share of SEACOR Holdings Inc.	$	0.42		$	2.93		$	0.94		$	3.05
Weighted Average Common Shares Outstanding:
Basic		21,166,037			21,733,003			21,135,557			21,999,905
Diluted		21,517,725			21,905,401			21,478,759			22,187,114

The accompanying notes are an integral part of these condensed consolidated financial statements and should be read in conjunction herewith.

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SEACOR HOLDINGS INC.

CONDENSED CONSOLIDATED STATEMENT OF CHANGES IN EQUITY

(in thousands, unaudited)

	SEACOR Holdings Inc. Stockholders’ Equity
	Common Stock		Additional Paid-In Capital			Retained Earnings		Shares Held In Treasury			Accumulated Other Comprehensive Loss			Non- Controlling Interests In Subsidiaries			Total Equity			Comprehensive Income
December 31, 2010	$	361	$	1,225,296		$	1,471,623	$	(903,004	)	$	(7,039	)	$	10,128		$	1,797,365
Issuance of common stock:
Employee Stock Purchase Plan		—		—			—		1,672			—			—			1,672
Exercise of stock options		—		4,456			—		—			—			—			4,456
Director stock awards		—		180			—		—			—			—			180
Restricted stock and restricted stock units		2		98			—		1			—			—			101
Amortization of share awards		—		9,757			—		—			—			—			9,757
Cancellation of restricted stock		—		129			—		(129	)		—			—			—
Dividends paid to noncontrolling interests		—		—			—		—			—			(1,443	)		(1,443	)
Cash received from noncontrolling interests		—		—			—		—			—			1,040			1,040
Acquisition of subsidiary with noncontrolling interests		—		—			—		—			—			2,322			2,322
Purchase of subsidiary shares from noncontrolling interests		—		(414	)		—		—			—			(735	)		(1,149	)
Sale of subsidiary shares to noncontrolling interests		—		—			—		—			—			124			124
Comprehensive income:
Net income		—		—			20,201		—			—			635			20,836		$	20,836
Other comprehensive income		—		—			—		—			196			—			196			196
Six months ended June 30, 2011	$	363	$	1,239,502		$	1,491,824	$	(901,460	)	$	(6,843	)	$	12,071		$	1,835,457		$	21,032

The accompanying notes are an integral part of these consolidated financial statements and should be read in conjunction herewith.

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SEACOR HOLDINGS INC.

CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS

(in thousands, unaudited)

	Six Months Ended June 30,
	2011			2010
Net Cash Provided by Operating Activities	$	161,479		$	153,034
Cash Flows from Investing Activities:
Purchases of property and equipment		(131,391	)		(115,001	)
Proceeds from disposition of property and equipment		25,082			58,252
Cash settlements on derivative transactions, net		4,052			446
Investments in and advances to 50% or less owned companies		(26,503	)		(24,740	)
Return of investments and advances from 50% or less owned companies		5,100			10,290
Net advances on revolving credit line to 50% or less owned companies		(8,916	)		(5,450	)
Principal payments (advances) on third party notes receivable, net		(20,323	)		2,786
Net decrease (increase) in restricted cash		(325	)		24,593
Net decrease in construction reserve funds and title XI reserve funds		9,206			62,566
Net increase in escrow deposits on like-kind exchanges		(3,396	)		(289	)
Repayments on (investments in) leases, net		2,777			(17,665	)
Business acquisitions, net of cash acquired		(28,696	)		(227	)
Net cash used in investing activities		(173,333	)		(4,439	)
Cash Flows from Financing Activities:
Payments on long-term debt and capital lease obligations		(7,509	)		(70,835	)
Net borrowings (payments) on inventory financing arrangements		5,793			(19,268	)
Common stock acquired for treasury		—			(119,985	)
Proceeds and tax benefits from share award plans		6,251			2,958
Purchase of subsidiary shares from noncontrolling interests		(1,149	)		(39	)
Cash received from (dividends paid to) noncontrolling interests, net		(403	)		185
Net cash provided by (used in) financing activities		2,983			(206,984	)
Effects of Exchange Rate Changes on Cash and Cash Equivalents		5,656			(9,017	)
Net Decrease in Cash and Cash Equivalents		(3,215	)		(67,406	)
Cash and Cash Equivalents, Beginning of Period		370,028			465,904
Cash and Cash Equivalents, End of Period	$	366,813		$	398,498

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

and should be read in conjunction herewith.

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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 six months ended June 30, 2011 and 2010 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 June 30, 2011, its results of operations for the three and six months ended June 30, 2011 and 2010, its changes in equity for the six months ended June 30, 2011, and its cash flows for the six months ended June 30, 2011 and 2010. 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 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, 2010.

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.The Company recognizes revenue when it is realized or realizable and earned. Revenue is realized or realizable and earned when persuasive evidence of an arrangement exists, delivery has occurred or services have been rendered, the price to the buyer is fixed or determinable, and collectability is reasonably assured. Revenue that does not meet these criteria is deferred until the criteria are met. Deferred revenues, included in other current liabilities, for the six months ended June 30 were as follows (in thousands):

	2011			2010
Balance at beginning of period	$	29,322		$	15,015
Revenues deferred during the period		4,351			7,782
Revenues recognized during the period		(10,880	)		(3,493	)
Balance at end of period	$	22,793		$	19,304

As of June 30, 2011, deferred revenues included $15.3 million relating to the time charter of several offshore support vessels operating in the U.S. Gulf of Mexico that are scheduled to be paid through the conveyance of a limited net profit interest in developmental oil and gas producing properties owned by a customer. Payments from the conveyance of the limited net profit interest, and the timing of such payments, are contingent upon production and energy sale prices. Based on the current production payout estimate, the deferred revenues are expected to be paid through mid-2012. The Company expects to defer an additional $3.6 million of vessel charter hire under this arrangement through December 2011. The Company will continue to recognize revenues as cash is received or earlier should future payments become determinable. All costs and expenses related to these charters were recognized as incurred.

As of June 30, 2011, deferred revenues also included $6.1 million related to audit provisions in certain Environmental Services’ response service contracts. The amount of revenues ultimately recognized following the completion of the billing audits or the expiration of the audit period could differ from the amounts billed and those differences may be material.

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Reclassifications. Certain reclassifications of prior period information have been made to conform to the presentation of the current period information. These reclassifications had no effect on net income as previously reported.

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.

The Company’s financial assets and liabilities as of June 30, 2011 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)	$	64,011	$	41,597	$	—
Derivative instruments (included in other receivables)		7,939		8,567		—
Construction reserve funds and Title XI reserve funds		314,679		—		—
LIABILITIES
Short sale of marketable securities (included in other current liabilities)		74,914		—		—
Derivative instruments (included in other current liabilities)		6,521		10,775		—

⁽¹⁾  Marketable security losses, net include losses of $4.1 million and $2.9 million for the three months ended June 30, 2011 and 2010, respectively, related to marketable security positions held by the Company as of June 30, 2011. Marketable security losses, net include losses of $6.2 million and $0.8 million for the six months ended June 30, 2011 and 2010, respectively, related to marketable security positions held by the Company as of June 30, 2011.

The estimated fair value of the Company’s other financial assets and liabilities as of June 30, 2011 were as follows (in thousands):

	Carrying Amount		Estimated Fair Value
ASSETS
Cash, cash equivalents and restricted cash	$	379,789	$	379,789
Investments, at cost, in 50% or less owned companies (included in other assets)		8,315		see below
Notes receivable from other business ventures (included in other assets)		39,808		see below
LIABILITIES
Long-term debt, including current portion		711,342		734,294

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

8

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.

The Company’s non-financial assets and liabilities that were measured at fair value during the six months ended June 30, 2011 were as follows (in thousands):

	Level 1		Level 2		Level 3
ASSETS
Investment in Avion Logistics Limited (included in Investments, at Equity, and Advances 50% or Less Owned Companies)(1)	$	—	$	1,000	$	—
LIABILITIES
Lease Obligations for Helicopters (included in other current liabilities)(2)		—		—		395

⁽¹⁾  During the three months ended June 30, 2011, the Company marked its investment in its Avion Logistics Limited joint venture to fair value following the acquisition of a controlling interest (see Note 6). The investment’s fair value was determined based on the Company’s purchase price of the noncontrolling interest.

⁽²⁾  During the six months ended June 30, 2011, the Company recorded a gain of $0.2 million to decrease the carrying value of its exit obligations for three leased-in helicopters.

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 June 30, 2011 were as follows (in thousands):

	Derivative Asset		Derivative Liability
Derivatives designated as hedging instruments:
Forward currency exchange contracts (fair value hedges)	$	3,005	$	—
Interest rate swap agreements (cash flow hedges)		—		5,566
		3,005		5,566
Derivatives not designated as hedging instruments:
Options on equities and equity indices		960		1,746
Forward currency exchange, option and future contracts		1,022		781
Interest rate swap agreements		—		3,016
Commodity swap, option and future contracts:
Exchange traded		3,987		3,565
Non-exchange traded		3,629		1,673
U.S. treasury notes, rate-locks and bond future and option contracts		3,903		949
		13,501		11,730
	$	16,506	$	17,296

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Fair Value Hedges. As of June 30, 2011, the Company has designated certain of its forward currency exchange contracts with notional values of €50.1 million as fair value hedges in respect of capital commitments denominated in euros for assets scheduled to be delivered in 2011 through 2012. 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 six months ended June 30, 2011, the Company designated €55.1 million notional value of its forward currency exchange contracts as fair value hedges, in addition to €56.0 million previously so designated as of December 31, 2010. During the six months ended June 30, 2011, the Company dedesignated €1.4 million notional value of these contracts as fair value hedges and €59.6 million notional value matured. Subsequent to June 30, 2011, the Company dedesignated and liquidated the remaining €50.1 million notional value of these contracts.

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

	Derivative losses, net
	2011			2010
Forward currency exchange contracts, effective and ineffective portions	$	6,484		$	(11,503	)
Increase (decrease) in fair value of hedged items included in property and equipment corresponding to effective portion of derivative (gains) losses		(6,522	)		11,441
	$	(38	)	$	(62	)

Cash Flow Hedges.As of June 30, 2011, the Company is a party to various interest rate swap agreements, with maturities ranging from 2013 to 2014, which 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 London Interbank Offered Rate (“LIBOR”) on these notional values. As of June 30, 2011, one of the Company’s Offshore Marine Services 50% or less owned companies had 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 $20.3 million and receive a variable interest rate based on LIBOR on the amortized notional value. In addition, as of June 30, 2011, one of the Company’s Inland River Services 50% or less owed companies had four interest rate swap agreements with maturities ranging from 2013 to 2015 that have been designated as cash flow hedges. These instruments call for the joint venture to pay fixed rates of interest ranging from 1.53% to 4.16% on the aggregate amortized notional value of $60.1 million and receive a variable interest rate based on LIBOR on the aggregate amortized notional value. By entering into these interest rate swap agreements, the Company and its joint ventures have converted the variable LIBOR component of certain of their outstanding borrowings to a fixed interest rate.

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

	Other comprehensive loss						Derivative losses, net
	2011			2010			2011			2010
Interest rate swap agreements, effective portion	$	(2,294	)	$	(5,875	)	$	—		$	—
Interest rate swap agreements, ineffective portion		—			—			(27	)		(60	)
Reclassification of derivative losses to interest expense or equity in earnings of 50% or less owned companies		851			1,892			—			—
	$	(1,443	)	$	(3,983	)	$	(27	)	$	(60	)

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

	Derivative losses, net
	2011			2010
Options on equities and equity indices	$	332		$	613
Forward currency exchange, option and future contracts		1,812			(6,675	)
Interest rate swap agreements		(1,276	)		(2,753	)
Commodity swap, option and future contracts:
Exchange traded		(3,547	)		8,734
Non-exchange traded		250			338
U.S. treasury notes, rate-locks and bond future and option contracts		(7,425	)		(2,080	)
	$	(9,854	)	$	(1,823	)

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 June 30, 2011, the outstanding forward currency exchange contracts translated into a net purchase of foreign currencies with an aggregate U.S. dollar equivalent of $87.7 million. These contracts enable the Company to buy currencies in the future at fixed exchange rates, which could offset possible consequences of changes in currency exchange rates with respect to the Company’s business conducted outside of the United States. The Company generally does not enter into contracts with forward settlement dates beyond twelve to eighteen months. Subsequent to June 30, 2011, forward currency exchange contracts with an aggregate U.S. dollar equivalent of $3.2 million were liquidated.

The Company has entered into various interest rate swap agreements with maturities ranging from 2012 through 2015 that call for the Company to pay fixed interest rates ranging from 1.67% to 2.59% on aggregate amortized notional values of $98.6 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 $26.4 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 for 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 June 30, 2011, the net market exposure to ethanol and sugar under these contracts was not material. The Company also enters into exchange traded positions (primarily natural gas, heating oil, crude oil, gasoline, ethanol and sugar) 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 June 30, 2011, these positions were not material.

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The Company has entered into and settled various positions in U.S. treasury notes and bonds through rate locks, 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. As of June 30, 2011, these positions consisted primarily of treasury futures and options with a notional value of $134.6 million and a one-year rate-lock agreement with a notional value of $100.0 million. The treasury rate-lock agreement provides for a net cash settlement in October 2011 based on the then current rate on the ten-year U.S. Treasury Note versus the agreement rate of 2.845%.

4. Business Acquisitions

G&G Shipping Acquisition.On April 13, 2011, the Company acquired certain real property, eight foreign flag Roll-on/Roll-off (“RORO”) vessels and a 70% interest in an operating company engaged in the shipping trade between the United States, the Bahamas and the Caribbean. The operating company leases-in the real property and the RORO vessels from the Company. The Company’s purchase price of $33.5 million included cash consideration of $30.3 million and the contribution of a $3.2 million note receivable. 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 $0.6 million of goodwill being recorded. The fair value analysis was finalized in April 2011.

SES Kazakhstan Acquisition. On August 31, 2010, the Company obtained a 100% controlling interest in SES-Borkit LLP through its acquisition of its partner’s interest for $1.0 million (cash of $0.6 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. 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 completion of a final valuation for the acquired assets and liabilities. No additional consideration has been earned by the selling partner through June 30, 2011.

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. The selling stockholders of PIER had the opportunity to receive additional consideration of up to $1.3 million, of which $0.7 million was accrued at acquisition, based upon certain performance measures over the period from the date of acquisition through May 2011. During the five months ended May 31, 2011, no additional consideration was earned by the selling stockholders. As of June 30, 2011, the Company had paid $0.2 million, in the aggregate, of additional consideration and reduced its accrued contingent liability.

Rivers Edge Acquisition.On November 15, 2007, the Company acquired all of the issued and outstanding shares of Rivers Edge Services, Inc. and Kemp’s Rivers Edge Vactor Services, Inc. (collectively referred to as “Rivers Edge”), providers of remediation, demolition, and environmental services in the pacific northwestern United States. The selling stockholder of Rivers Edge has the opportunity to receive additional consideration of up to $4.8 million based upon certain performance measures over the period from the date of acquisition through December 31, 2011, which will be recognized by the Company as compensation expense in the period earned. As of June 30, 2011, no additional consideration had been earned by the selling stockholder.

SRI Acquisition.On September 7, 2007, the Company acquired all of the issued and outstanding shares of Solid Resources, Inc. and Solid Resources, LLC (collectively referred to as “SRI”), providers of environmental services in the southeastern United States. The selling stockholder of SRI has the opportunity to receive additional consideration of up to $39.5 million based upon certain performance measures over the period from the date of acquisition through September 30, 2011, 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.

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During the six months ended June 30, 2011, no additional consideration was earned by the selling stockholder. As of June 30, 2011, the Company had paid $6.0 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 six months ended June 30, 2011 (in thousands):

Receivables	$	(3,178	)
Property and equipment		33,390
Goodwill		606
Other assets		200
Noncontrolling interests in subsidiaries		(2,322	)
Purchase price(1)	$	28,696

(1) Purchase price is net of cash acquired of $1.6 million.

5. Equipment Acquisitions, Dispositions and Depreciation and Impairment Policies

During the six months ended June 30, 2011, capital expenditures were $131.4 million. Equipment deliveries during the period included one offshore support vessel, 55 inland river dry cargo barges, two liquid tank barges and five helicopters. In addition, the Company acquired a controlling interest in an offshore support vessel.

During the six months ended June 30, 2011, the Company sold five offshore support vessels, four helicopters, one inland river towboat, one harbor tug and other equipment for net proceeds of $25.1 million and gains of $19.4 million.

From time to time, the Company enters into vessel sale-leaseback transactions with finance companies, provides seller financing on sales of its vessels to third parties and sells vessels, helicopters and barges to its 50% or less owned companies. A portion of the gains realized from these transactions was not immediately recognized in income and has been recorded in the accompanying condensed consolidated balance sheets in deferred gains and other liabilities. Deferred gain activity related to these transactions for the six months ended June 30 was as follows (in thousands):

	2011			2010
Balance at beginning of period	$	131,836		$	93,231
Deferred gains arising from asset sales		4,597			1,240
Amortization of deferred gains included in operating expenses as a reduction to rental expense		(11,194	)		(8,293	)
Amortization of deferred gains included in gains on asset dispositions and impairments, net		(2,461	)		(6,651	)
Balance at end of period	$	122,778		$	79,527

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. During the six months ended June 30, 2011, impairment charges recognized by the Company related to long-lived assets held for use were not material.

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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 June 30, 2011, the estimated useful life (in years) of each of the Company’s major categories of new equipment was as follows:

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

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

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

Avion Logistics Limited.On June 1, 2011, the Company acquired a 100% controlling interest in Avion Logistics Limited (“ALL”) through its acquisition of its partner’s interest for $1.0 million in cash. Upon acquisition, the Company adjusted its investment in ALL to fair value resulting in the recognition of a gain of $0.3 million, net of tax, which is included in equity in earnings of 50% or less owned companies. Following this change in control, the Company contributed its ownership interest in ALL to Hawker Pacific Airservices Limited (“Hawker Pacific”) for an additional 1.7% interest in Hawker Pacific.

Dynamic Offshore Drilling.On April 4, 2011, the Company acquired a 20% interest in Dynamic Offshore Drilling Ltd. (“Dynamic”), a company established to construct and operate jack-up drilling rigs, for $10.0 million. The first jack-up drilling rig is currently under construction in Singapore and is scheduled for delivery in the first quarter of 2013. Dynamic has an option, which must be exercised before September 2011, to build one additional jack-up drilling rig.

Dart. On February 28, 2011, the Company made an additional investment of $5.0 million in Dart Helicopter Services LLC (“Dart”), a sales, marketing and parts manufacturing organization based in North America that engineers and manufactures after-market parts and equipment for sale to helicopter manufacturers and operators. On July 31, 2011 the Company contributed its ownership in Dart, and the Company’s partner contributed its ownership in Dart along with certain other assets, into a newly formed entity in which each partner owned a 50% interest.

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Hawker Pacific. On December 15, 2010, the Company acquired a 32.5% interest in Hawker Pacific, an aviation sales and support organization and a distributor of aviation components, for $25.0 million in cash. In June 2011, the Company contributed its ownership in ALL to Hawker Pacific valued at $2.0 million for an additional 1.7% ownership interest bringing its total ownership percentage to 34.2%. The Company has performed a preliminary fair value analysis of Hawker Pacific as of the acquisition date and the date of its additional contribution of ALL. The excess of the purchase price over the Company’s interest in Hawker Pacific’s net assets has been initially allocated to intangible assets in the amount of $7.8 million. Finalization of the preliminary fair value analysis may result in revisions to this allocation.

Bunge-SCF Grain. On September 29, 2010, the Company and a global agribusiness and food company formed Bunge-SCF Gain, LLC (“Bunge-SCF Grain”) a 50-50 joint venture to construct and own a river grain terminal on the Mississippi River in Illinois, which is expected to be completed in 2012. During the six months ended June 30, 2011, the Company and its partner each made cash contributions of $2.5 million to the joint venture to fund construction costs.

Illinois Corn Processing. Illinois Corn Processing LLC (“ICP”), is a 50-50 joint venture that owns and operates an alcohol manufacturing facility dedicated to the production of alcohol for beverage, industrial and fuel applications. Upon ICP’s formation, the Company provided a $10.0 million term loan with a maturity in November 2014 and a $20.0 million revolving line of credit with a maturity in November 2012 subject to certain borrowing restrictions. During the six months ended June 30, 2011, the Company made net advances of $8.9 million under the revolving line of credit and received repayments of $0.9 million on the term loan. As of June 30, 2011, the outstanding balances under the term loan and revolving line of credit were $7.1 million and $18.3 million, respectively, inclusive of unpaid and accrued interest.

Avion Pacific Limited. Avion Pacific Limited (“Avion”) is a joint venture that distributes aircraft and aircraft-related parts in the Far East and China. During the six months ended June 30, 2011, the Company made advances of $5.5 million to Avion and received repayments of $4.5 million. As of June 30, 2011, the Company had outstanding loans to Avion totaling $5.8 million.

Era Training Center. Era Training Center LLC (“ETC”) is a joint venture that operates flight training devices and provides training services to the Company and third party customers. During the six months ended June 30, 2011, the Company made advances of $1.2 million to ETC. As of June 30, 2011, the Company had outstanding loans to ETC totaling $4.4 million.

Subsequent Events.On July 1, 2011, the Company acquired a 50% economic interest and a 20% voting interest in Aeroleo Taxi Aereo S/A (“Aeroleo”), a Brazilian entity that provides helicopter transport services to the Brazilian offshore oil and gas industry, for $4.8 million in cash. The Company also loaned Aeroleo $6.0 million at an interest rate of 6% per annum. The note requires monthly interest payments and matures in June 2013. Also on July 1, 2011, the Company and its partner contributed $4.8 million each to Era do Brazil LLC, a 50/50 joint venture. Era do Brazil LLC then immediately acquired a helicopter, subject to a lease to Aeroleo, from the Company for $11.5 million ($9.5 million in cash and a $2.0 million note payable). The note payable bears an interest rate of 7.0% per annum, requires 60 monthly principal and interest payments, and is secured by the aircraft and the Aeroleo lease.

7. Third Party Notes Receivable

From time to time, the Company engages in lending and leasing activities involving various types of equipment. During the six months ended June, 30, 2011, the Company advanced $22.4 million for two notes receivable secured by fixed wing aircraft and certain spare parts. Both notes receivable are for five years, one of which requires 59 monthly principal and interest payments and a final balloon payment, and the other requires quarterly payments of principal and interest, subject to certain prepayment provisions based on the sale of spare parts.

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8. Commitments and Contingencies

As of June 30, 2011, the Company’s unfunded capital commitments consisted primarily of offshore support vessels, helicopters, an interest in a dry-bulk articulated tug-barge, inland river dry cargo barges, an interest in a river grain terminal and other property and equipment. These commitments totaled $318.2 million, of which $153.0 million is payable during the remainder of 2011 with the balance payable through 2013. Of the total unfunded capital commitments, $48.2 million may be terminated without further liability other than the payment of liquidated damages of $1.4 million.

The Company has issued a performance guarantee on behalf of one of its joint ventures that expires in 2011 and the Company has guaranteed the payment of amounts owed by one of its joint ventures under a vessel charter agreement that expires in 2012. In addition, the Company has guaranteed amounts owed under banking facilities by certain of its joint ventures. As of June 30, 2011, the total amount guaranteed by the Company under these arrangements was $25.7 million. In addition, as of June 30, 2011, the Company had uncalled capital commitments to two of its joint ventures for a total of $2.6 million.

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 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 2007, representing the Company’s allocated share of an additional funding deficit of $332.6 million. Based on an actuarial valuation of the MNOPF in 2009, the Company was invoiced and expensed $7.8 million in 2010, representing the Company’s allocated share of an additional funding deficit of $636.9 million. 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 Company was advised that its share of a $281.0 million (£175.0 million) accumulated funding deficit was $1.0 million (£0.6 million). The accumulated funding deficit is being recovered by additional annual contributions from current employers and is subject to adjustment following the results of future tri-annual actuarial valuations. As of June 30, 2011, $0.2 million, in the aggregate, of the Company’s funding deficit had been invoiced and expensed. Depending on the results of the future actuarial valuations, it is possible that the MNRPF will experience further funding deficits, requiring the Company to recognize additional payroll related operating expenses in the periods invoices are received.

On June 12, 2009, a purported civil class action was filed against the Company, Era Group Inc., Era Helicopters LLC and three 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.). The Complaint alleges that the Defendants violated federal antitrust law 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. The Company believes that

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the claims set forth in the Complaint are without merit and intends to vigorously defend the action. On September 4, 2009, the Defendants filed a motion to dismiss the Complaint. On September 14, 2010, the Court entered an order dismissing the Complaint. On September 28, 2010, the plaintiffs filed a motion for reconsideration and amendment and a motion for re-argument (the “Motions”). On November 30, 2010, the Court granted the Motions, amended the Court’s September 14, 2010 Order to clarify that the dismissal was without prejudice, permitted the filing of an Amended Complaint, and authorized limited discovery with respect to the new allegations in the Amended Complaint. Following the completion of such limited discovery, on February 11, 2011, the Defendants filed a motion for summary judgment to dismiss the Amended Complaint with prejudice. On June 23, 2011, the Court granted summary judgment for the Defendants. On July 22, 2011, the plaintiffs filed a notice of appeal to the U.S. Court of Appeals for the Third Circuit. The Company is unable to estimate the potential exposure, if any, resulting from these claims but believes they are without merit and will continue 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, theDeepwater Horizon, were negligent in their efforts to save lives and put out the fire and contributed to the sinking of theDeepwater Horizon and subsequent oil spill. The action now is part of the overall multi-district litigation (“MDL”), 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. The Company also recently filed petitions seeking exoneration from, or limitation of liability in relation to, any actions that may have been taken by vessels owned by the Company to extinguish the fire. Pursuant to the Limitation of Liability Act, those petitions impose an automatic stay on the Robin case, and the court set a deadline of April 20, 2011 for individual claimants to assert claims in the limitation cases. Approximately 66 claims were submitted by the deadline in all of the limitation actions. On June 8, 2011, the Company moved to dismiss these claims (with the exception of one claim filed by a Company employee) on various legal grounds. Oral argument on the motion is scheduled for August 24, 2011.

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. (“O’Brien’s), 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’sDeepwater 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. Pursuant to contractual agreements with the responsible party, the responsible party has agreed, subject to certain potential limitations, to indemnify and defend O’Brien’s in connection with the Wunstell Action and claims asserted in the MDL.

On December 15, 2010, SEACOR subsidiaries O’Brien’s and National Response Corporation (“NRC”) were named as defendants in one of the several consolidated “master complaints” that have been filed in the overall multi-district litigation, In re Oil Spill by the Oil Rig “Deepwater Horizon”, MDL No. 2179. The master complaint naming O’Brien’s and NRC asserts various claims on behalf of a punitive class against multiple defendants concerning the clean-up activities generally, and the use of dispersants specifically. By court order, the Wunstell Action has been stayed as a result of the filing of the referenced master complaint. The Company believes that the claims asserted against its subsidiaries in the master complaint have no merit and will seek dismissal of the master complaint against both O’Brien’s and NRC. In addition to the indemnity provided to O’Brien’s, pursuant to contractual agreements with the responsible party, the responsible party has agreed,

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subject to certain potential limitation, to indemnify and defend O’Brien’s and NRC in connection with these claims in the MDL. On February 28, 2011, O’Brien’s and NRC moved to dismiss all claims against them in the master complaint on various legal grounds. The motions were argued before the Court on May 26, 2011 and a decision on the motions is pending.

Subsequent to the filing of the referenced master complaint, four additional individual civil actions have been filed in the U.S. District Court for the Eastern District of Louisiana concerning the clean-up activities generally, which name the Company, O’Brien’s and/or NRC as defendants and are part of the overall multi-district litigation, In re Oil Spill by the Oil Rig “Deepwater Horizon”, MDL No. 2179. On April 8, 2011, O’Brien’s was named as a defendant inJohnson Bros. Corporation of Louisiana v. BP, PLC, et al., No. 2:11-cv-00781 (E.D. La.), which is a suit by an individual business seeking damages allegedly caused by a delay on a construction project alleged to have resulted from the clean-up operations. On April 15, 2011, O’Brien’s and NRC were named as defendants inJames and Krista Pearson v. BP Exploration & Production, Inc., et al., No. 2:11-cv-00863 (E.D. La.), which is a suit by a husband and wife, who allegedly participated in the clean-up effort and are seeking damages for personal injury, property damage to their boat, and amounts allegedly due under contract. On April 15, 2011, O’Brien’s and NRC were named as defendants inThomas Edward Black v. BP Exploration & Production, Inc., et al., No. 2:11-cv-00867 (E.D. La.), which is a suit by an individual who is seeking damages for lost income because he allegedly could not find work in the fishing industry after the oil spill. On April 20, 2011, a complaint was filed inDarnell Alexander, et al. v. BP, PLC, et al., No. 2:11-cv-00951 (E.D. La.) on behalf of 117 individual plaintiffs that seek to adopt the allegations made in the referenced master complaint against O’Brien’s and NRC (and the other defendants). By court order, all four of these additional individual cases have been stayed as a result of the filing of the referenced master complaint.

On February 18, 2011, Triton Asset Leasing GmbH, Transocean Holdings LLC, Transocean Offshore Deepwater Drilling Inc., and Transocean Deepwater Inc. (collectively “Transocean”) named O’Brien’s and NRC as third-party defendants in a Rule 14(c) Third-Party Complaint in Transocean’s own Limitation of Liability Act action, which is part of the overall multi-district litigation, In re Oil Spill by the Oil Rig “Deepwater Horizon”, MDL No. 2179, tendering to O’Brien’s and NRC the claims in the referenced master complaint that have already been asserted against O’Brien’s and NRC. Transocean, Cameron International Corporation, and Halliburton Energy Services, Inc. have also filed cross-claims against O’Brien’s and NRC for contribution should they be found liable for any damages in Transocean’s Limitation of Liability Act action. Furthermore, certain defendants in the Transocean limitation action asserted cross-claims against O’Brien’s and NRC for contribution and tort indemnity and O’Brien’s and NRC asserted counterclaims against those same parties for identical relief.

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 such exposure could occur, but the Company does not expect that any change in estimated exposure would have a material effect on the Company’s consolidated financial position or its results of operations.

During the year ended December 31, 2010, the Company received notice from the Internal Revenue Service of $12.6 million in proposed penalties regarding Marine Transportation Services’ informational excise tax filings for prior years. The Company intends to vigorously defend its position that the proposed penalties are erroneous and believes the resolution of this matter will not have a material effect on the Company’s consolidated financial position or its results of operations.

During the six months ended June 30, 2011, the Company received a Notice of Infringement (the “Notice”) from the Brazilian Federal Revenue Office. The Notice alleged the Company had imported a number of vessels into Brazil without properly completing the required importation documents and levied an assessment of $25.7 million. The Company intends to vigorously defend its position that the proposed assessment is erroneous and

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believes the resolution of this matter will not have a material effect on the Company’s consolidated financial position or its results of operations. Of the levied assessment, $19.3 million relates to managed vessels whose owner would be responsible for any potential payment.

9. Long-Term Debt and Capital Lease Obligations

As of June 30, 2011, 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 $45.1 million with various expiration dates through 2014.

During the six months ended June 30, 2011, the Company made scheduled payments on long-term debt and capital lease obligations of $6.5 million and made net borrowings on inventory financing arrangements of $5.8 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 six months ended June 30, 2011, the Company purchased $1.0 million, in principal amount, of its 5.875% Senior Notes due 2012, for an aggregate purchase price of $1.0 million.

10. 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 six months ended June 30, 2011, the Company did not acquire any Common Stock for treasury. As of June 30, 2011, the remaining authority under the repurchase plan was $113.0 million.

11. 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 method. Dilutive securities for this purpose assumes restricted stock grants have vested and common shares have been issued pursuant to the exercise of outstanding stock options. For the three and six months ended June 30, 2011, diluted earnings per common share of SEACOR excluded 333,819 and 254,230, respectively, of certain share awards as the effect of their inclusion in the computation would have been antidilutive. For the three and six months ended June 30, 2010, diluted earnings per common share of SEACOR excluded 894,714 and 878,807, respectively, of certain share awards as the effect of their inclusion in the computation would have been antidilutive.

A reconciliation of basic and diluted weighted average outstanding common shares of SEACOR was as follows:

	Three Months Ended June 30,				Six Months Ended June 30,
	2011		2010		2011		2010
Basic Weighted Average Common Shares Outstanding		21,166,037		21,733,003		21,135,557		21,999,905
Effect of Dilutive Share Awards:
Options and Restricted Stock		351,688		172,398		343,202		187,209
Diluted Weighted Average Common Shares Outstanding		21,517,725		21,905,401		21,478,759		22,187,114

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12. Comprehensive Income

For the three months ended June 30, 2011 and 2010, total comprehensive income was $8.2 million and $62.7 million, respectively. For the six months ended June 30, 2011 and 2010, total comprehensive income was $21.0 million and $63.9 million, respectively. The components of other comprehensive income (loss) and allocated income tax (expense) benefit for the three and six months ended June 30 were as follows (in thousands):

	Three Months Ended									Six Months Ended
	Before-Tax Amount			Tax (Expense) Benefit			Net-of-Tax Amount			Before-Tax Amount			Tax (Expense) Benefit			Net-of-Tax Amount
2011
Foreign currency translation adjustments	$	371		$	(130	)	$	241		$	1,745		$	(611	)	$	1,134
Derivative losses on cash flow hedges (see Note 3)		(2,092	)		732			(1,360	)		(1,443	)		505			(938	)
Other comprehensive income (loss)	$	(1,721	)	$	602		$	(1,119	)	$	302		$	(106	)	$	196
2010
Foreign currency translation adjustments	$	(635	)	$	223		$	(412	)	$	(3,062	)	$	1,072		$	(1,990	)
Derivative losses on cash flow hedges (see Note 3)		(2,407	)		842			(1,565	)		(3,983	)		1,394			(2,589	)
Other comprehensive loss	$	(3,042	)	$	1,065		$	(1,977	)	$	(7,045	)	$	2,466		$	(4,579	)

20

13. Share Based Compensation

Transactions in connection with the Company’s share based compensation plans during the six months ended June 30, 2011 were as follows:

Director stock awards granted	2,000
Employee Stock Purchase Plan (“ESPP”) shares issued	30,151
Restricted stock awards granted	182,000
Restricted stock awards cancelled	1,370
Shares released from Deferred Compensation Plan	63
Restricted Stock Unit Activities:
Outstanding as of December 31, 2010	531
Granted	650
Converted to shares and issued to Deferred Compensation Plan	(51	)
Outstanding as of June 30, 2011	1,130
Stock Option Activities:
Outstanding as of December 31, 2010	1,130,356
Granted	159,575
Exercised	(66,462	)
Forfeited	—
Expired	—
Outstanding as of June 30, 2011	1,223,469
Shares available for future grants and ESPP purchases as of June 30, 2011	684,712

14. 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. An operating business segment has 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, 2010.

21

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

	Offshore Marine Services $’000			Aviation Services $’000			Inland River Services $’000			Marine Transportation Services $’000		Environmental Services $’000			Commodity Trading and Logistics $’000			Other $’000			Corporate and Eliminations $’000			Total $’000
For the three months ended June 30, 2011
Operating Revenues:
External customers		93,336			68,475			38,682			24,249		48,462			245,321			17,921			—			536,446
Intersegment		50			18			2,760			87		4			—			—			(2,919	)		—
		93,386			68,493			41,442			24,336		48,466			245,321			17,921			(2,919	)		536,446
Costs and Expenses:
Operating		68,242			42,457			28,717			13,584		31,662			237,644			9,158			(2,793	)		428,671
Administrative and general		11,078			6,229			3,166			2,146		10,322			2,202			3,210			7,584			45,937
Depreciation and amortization		12,205			12,390			5,791			5,728		2,238			12			2,237			469			41,070
		91,525			61,076			37,674			21,458		44,222			239,858			14,605			5,260			515,678
Gains (Losses) on Asset Dispositions and Impairments, Net		3,607			6,172			(22	)		—		(19	)		—			544			—			10,282
Operating Income (Loss)		5,468			13,589			3,746			2,878		4,225			5,463			3,860			(8,179	)		31,050
Other Income (Expense):
Derivative gains (losses), net		—			(811	)		—			—		—			828			—			(6,618	)		(6,601	)
Foreign currency gains (losses), net		(408	)		338			—			6		97			(16	)		(24	)		1,527			1,520
Other, net		—			—			3			56		2			—			—			(117	)		(56	)
Equity in Earnings (Losses) of 50% or Less Owned Companies, Net of Tax		200			1,054			666			—		132			(1,051	)		3			—			1,004
Segment Profit		5,260			14,170			4,415			2,940		4,456			5,224			3,839
Other Income (Expense) not included in Segment Profit																									(11,912	)
Less Equity Earnings included in Segment Profit																									(1,004	)
Income Before Taxes and Equity Earnings																									14,001

22

	Offshore Marine Services $’000		Aviation Services $’000			Inland River Services $’000		Marine Transportation Services $’000		Environmental Services $’000			Commodity Trading and Logistics $’000			Other $’000			Corporate and Eliminations $’000			Total $’000
For the six months ended June 30, 2011
Operating Revenues:
External customers		173,659		124,630			82,610		41,473		111,548			439,333			35,457			—			1,008,710
Intersegment		71		18			5,301		175		4			—			—			(5,569	)		—
		173,730		124,648			87,911		41,648		111,552			439,333			35,457			(5,569	)		1,008,710
Costs and Expenses:
Operating		131,262		75,922			56,601		22,563		75,706			424,662			18,300			(5,334	)		799,682
Administrative and general		22,848		13,249			5,863		3,563		17,873			4,862			5,830			18,243			92,331
Depreciation and amortization		24,738		24,309			11,413		10,706		4,469			25			4,526			943			81,129
		178,848		113,480			73,877		36,832		98,048			429,549			28,656			13,852			973,142
Gains (Losses) on Asset Dispositions and Impairments, Net		7,971		8,366			675		—		(19	)		—			544			—			17,537
Operating Income (Loss)		2,853		19,534			14,709		4,816		13,485			9,784			7,345			(19,421	)		53,105
Other Income (Expense):
Derivative losses, net		—		(501	)		—		—		—			(3,922	)		—			(5,496	)		(9,919	)
Foreign currency gains (losses), net		317		691			—		22		46			(21	)		(23	)		5,547			6,579
Other, net		—		—			4		56		2			—			(1	)		(295	)		(234	)
Equity in Earnings (Losses) of 50% or Less Owned Companies, Net of Tax		935		955			410		—		124			(1,000	)		(386	)		—			1,038
Segment Profit		4,105		20,679			15,123		4,894		13,657			4,841			6,935
Other Income (Expense) not included in Segment Profit																							(16,729	)
Less Equity Earnings included in Segment Profit																							(1,038	)
Income Before Taxes and Equity Earnings																							32,802
Capital Expenditures		33,025		50,233			33,137		8,315		4,009			—			1,498			1,174			131,391
As of June 30, 2011
Property and Equipment		620,146		629,619			338,289		249,818		35,388			131			148,929			19,338			2,041,658
Investments, at Equity, and Receivables from 50% or Less Owned Companies		57,697		35,341			42,378		—		2,351			12,929			59,676			—			210,372
Goodwill		13,367		352			1,743		606		45,097			—			1,302			—			62,467
Intangible Assets		6,992		—			908		1,732		8,342			—			474			—			18,448
Other current and long-term assets, excluding cash and near cash assets(1)		134,505		88,430			44,054		5,673		84,274			125,374			63,181			27,248			572,739
Segment Assets		832,707		753,742			427,372		257,829		175,452			138,434			273,562
Cash and near cash assets(1)																							800,076
Total Assets																							3,705,760

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

23

	Offshore Marine Services $’000		Aviation Services $’000			Inland River Services $’000		Marine Transportation Services $’000			Environmental Services $’000			Commodity Trading and Logistics $’000			Other $’000			Corporate and Eliminations $’000			Total $’000
For the three months ended June 30, 2010
Operating Revenues:
External customers		142,825		62,433			31,544		21,263			214,629			203,064			18,818			—			694,576
Intersegment		4,298		—			3,052		—			—			—			151			(7,501	)		—
		147,123		62,433			34,596		21,263			214,629			203,064			18,969			(7,501	)		694,576
Costs and Expenses:
Operating		80,011		40,541			21,547		8,915			127,108			203,374			10,895			(7,649	)		484,742
Administrative and general		12,931		6,091			2,618		1,038			6,525			3,791			2,793			10,321			46,108
Depreciation and amortization		13,245		10,728			4,958		8,008			2,099			15			2,107			448			41,608
		106,187		57,360			29,123		17,961			135,732			207,180			15,795			3,120			572,458
Gains (Losses) on Asset Dispositions and Impairments, Net		1,964		379			899		(11	)		(36	)		—			1,203			—			4,398
Operating Income (Loss)		42,900		5,452			6,372		3,291			78,861			(4,116	)		4,377			(10,621	)		126,516
Other Income (Expense):
Derivative gains (losses), net		—		38			—		—			—			4,611			—			(9,370	)		(4,721	)
Foreign currency gains (losses), net		425		(1,731	)		—		(41	)		(23	)		(30	)		(15	)		(6,085	)		(7,500	)
Other, net		—		—			—		—			—			6			34			6			46
Equity in Earnings (Losses) of 50% or Less Owned Companies, Net of Tax		1,713		(442	)		805		—			54			(13	)		759			—			2,876
Segment Profit		45,038		3,317			7,177		3,250			78,892			458			5,155
Other Income (Expense) not included in Segment Profit																								(15,171	)
Less Equity Earnings included in Segment Profit																								(2,876	)
Income Before Taxes and Equity Earnings																								99,170

24

	Offshore Marine Services $’000		Aviation Services $’000			Inland River Services $’000		Marine Transportation Services $’000			Environmental Services $’000			Commodity Trading and Logistics $’000			Other $’000			Corporate and Eliminations $’000			Total $’000
For the six months ended June 30, 2010
Operating Revenues:
External customers		249,054		112,756			61,679		40,715			242,787			346,056			36,104			—			1,089,151
Intersegment		5,255		(48	)		6,353		—			—			—			305			(11,865	)		—
		254,309		112,708			68,032		40,715			242,787			346,056			36,409			(11,865	)		1,089,151
Costs and Expenses:
Operating		153,775		72,567			41,101		22,347			147,445			350,746			20,934			(11,868	)		797,047
Administrative and general		25,380		11,482			4,679		1,875			12,562			6,535			5,638			18,848			86,999
Depreciation and amortization		26,723		21,175			9,834		16,016			4,082			35			4,290			850			83,005
		205,878		105,224			55,614		40,238			164,089			357,316			30,862			7,830			967,051
Gains (Losses) on Asset Dispositions and Impairments, Net		14,615		469			1,786		(11	)		(53	)		—			1,203			48			18,057
Operating Income (Loss)		63,046		7,953			14,204		466			78,645			(11,260	)		6,750			(19,647	)		140,157
Other Income (Expense):
Derivative gains (losses), net		—		(62	)		—		—			—			8,919			—			(10,802	)		(1,945	)
Foreign currency gains (losses), net		799		(1,596	)		—		(26	)		7			(747	)		(33	)		(8,605	)		(10,201	)
Other, net		—		—			10		—			—			6			34			596			646
Equity in Earnings (Losses) of 50% or Less Owned Companies, Net of Tax		3,964		(717	)		707		—			92			(1,035	)		734			—			3,745
Segment Profit (Loss)		67,809		5,578			14,921		440			78,744			(4,117	)		7,485
Other Income (Expense) not included in Segment Profit																								(24,175	)
Less Equity Earnings included in Segment Profit																								(3,745	)
Income Before Taxes and Equity Earnings																								104,482
Capital Expenditures		15,864		62,725			18,780		99			3,543			—			—			13,990			115,001
As of June 30, 2010
Property and Equipment		672,114		576,030			277,088		349,025			36,275			181			144,814			19,609			2,075,136
Investments, at Equity, and Receivables from 50% or Less Owned Companies		34,659		25,138			93,506		7,450			2,251			13,974			24,496			—			201,474
Goodwill		13,367		353			1,743		—			37,888			—			1,302			—			54,653
Intangible Assets		9,119		—			1,279		2,135			8,078			—			584			—			21,195
Other current and long-term assets, excluding cash and near cash assets(1)		188,349		67,975			50,156		9,541			178,894			87,624			44,536			25,797			652,872
Segment Assets		917,608		669,496			423,772		368,151			263,386			101,779			215,732
Cash and near cash assets(1)																								721,560
Total Assets																								3,726,890

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

25

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 U.S. government implemented moratoriums directing operators to cease certain drilling activities and any extension of such moratoriums (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, 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.

26

Overview

The Company’s operations are divided into six main business segments – Offshore Marine Services, Aviation Services, Inland River Services, Marine Transportation 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.

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 six months (“Current Six Months”) ended June 30, 2011, as compared with the three months (“Prior Year Quarter”) and six months (“Prior Six Months”) ended June 30, 2010. See “Item 1. Financial Statements – Note 14. Segment Information” included in Part I for consolidating segment tables for each period presented.

Offshore Marine Services

	For the Three  Months Ended June 30,									For the Six Months Ended June 30,								Change ’11/’10
	2011					2010				2011				2010				3 Mos			6 Mos
	$’000			%		$’000		%		$’000		%		$’000		%		%			%
Operating Revenues:
United States, primarily U.S. Gulf of Mexico		32,842			35		79,527		54		52,003		30		119,011		47
Africa, primarily West Africa		13,254			14		19,708		13		32,721		19		38,583		15
Middle East		10,670			12		12,867		9		22,428		13		26,400		11
Mexico, Central and South America		14,336			15		13,547		9		26,245		15		25,714		10
United Kingdom, primarily North Sea		18,784			20		15,313		11		35,530		20		31,336		12
Asia		3,500			4		6,161		4		4,803		3		13,265		5
Total Foreign		60,544			65		67,596		46		121,727		70		135,298		53
		93,386			100		147,123		100		173,730		100		254,309		100		(37	)		(32	)
Costs and Expenses:
Operating
Personnel		34,216			37		35,300		24		66,668		38		72,960		28
Repairs and maintenance		10,610			11		14,265		10		19,361		11		24,640		10
Drydocking		5,305			6		6,925		5		9,968		6		13,841		5
Insurance and loss reserves		3,467			4		3,806		2		6,233		4		6,981		3
Fuel, lubes and supplies		5,534			6		6,472		4		10,699		6		11,899		5
Leased-in equipment		3,687			4		3,888		3		7,123		4		7,051		3
Brokered vessel activity		273			—		3,590		2		2,743		2		5,733		2
Other		5,150			5		5,765		4		8,467		5		10,670		4
		68,242			73		80,011		54		131,262		76		153,775		60
Administrative and general		11,078			12		12,931		9		22,848		13		25,380		10
Depreciation and amortization		12,205			13		13,245		9		24,738		14		26,723		11
		91,525			98		106,187		72		178,848		103		205,878		81
Gains on Asset Dispositions and Impairments, Net		3,607			4		1,964		1		7,971		5		14,615		6
Operating Income		5,468			6		42,900		29		2,853		2		63,046		25		(87	)		(95	)
Other Income (Expense):
Foreign currency gains (losses), net		(408	)		—		425		1		317		—		799		—
Equity in Earnings of 50% or Less Owned Companies, Net of Tax		200			—		1,713		1		935		—		3,964		2
Segment Profit		5,260			6		45,038		31		4,105		2		67,809		27		(88	)		(94	)

27

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

	For the Three  Months Ended June 30,								For the Six Months Ended June 30,								Change ’11/’10
	2011				2010				2011				2010				3 Mos			6 Mos
	$’000		%		$’000		%		$’000		%		$’000		%		%			%
Operating Revenues:
Time charter:
United States, primarily U.S. Gulf of Mexico		30,153		32		74,319		50		47,532		27		112,046		44		(59	)		(58	)
Africa, primarily West Africa		12,182		13		15,916		11		28,496		17		33,016		13		(23	)		(14	)
Middle East		8,808		10		9,864		7		18,237		11		20,856		8		(11	)		(13	)
Mexico, Central and South America		12,782		14		11,460		8		23,269		13		22,029		9		12			6
United Kingdom, primarily North Sea		18,735		20		15,317		10		35,431		20		31,267		12		22			13
Asia		3,546		4		4,718		3		4,866		3		11,654		5		(25	)		(58	)
Total time charter		86,206		93		131,594		89		157,831		91		230,868		91		(34	)		(32	)
Bareboat charter		209		—		1,243		1		416		—		1,494		—		(83	)		(72	)
Brokered vessel activity		301		—		4,732		3		3,669		2		7,425		3		(94	)		(51	)
Other marine services		6,670		7		9,554		7		11,814		7		14,522		6		(30	)		(19	)
		93,386		100		147,123		100		173,730		100		254,309		100

28

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 June 30,						For the Six Months Ended June 30,
	2011			2010			2011			2010
Rates Per Day Worked:
Anchor handling towing supply	$	32,179		$	40,592		$	31,215		$	36,524
Crew		6,334			6,586			6,477			6,632
Mini-supply		7,494			9,641			7,578			8,413
Standby safety		9,180			7,861			9,031			8,080
Supply		13,561			14,402			13,406			13,780
Towing supply		8,484			10,467			9,804			11,255
Specialty		9,351			6,187			8,077			7,220
Overall Average Rates Per Day Worked		11,142			13,906			10,655			12,672
Utilization:
Anchor handling towing supply		53	%		89	%		44	%		75	%
Crew		70	%		72	%		68	%		70	%
Mini-supply		77	%		61	%		69	%		58	%
Standby safety		89	%		88	%		86	%		88	%
Supply		74	%		78	%		69	%		78	%
Towing supply		33	%		81	%		51	%		78	%
Specialty		63	%		64	%		68	%		65	%
Overall Fleet Utilization		71	%		77	%		68	%		74	%
Available Days:
Anchor handling towing supply		1,547			1,729			3,077			3,439
Crew		3,933			4,527			7,803			9,027
Mini-supply		728			1,001			1,507			1,991
Standby safety		2,291			2,222			4,541			4,382
Supply		1,591			1,729			3,139			3,439
Towing supply		494			690			1,034			1,499
Specialty		353			334			713			694
Overall Fleet Available Days		10,937			12,232			21,814			24,471

Current Year Quarter compared with Prior Year Quarter

Operating Revenues. Time charter revenues were $45.4 million lower. Overall fleet utilization was 71% compared with 77%. The number of days available for charter was 10,937 compared with 12,232, a 1,295 day or 11% reduction, due to net fleet dispositions. Overall average day rates were $11,142 per day compared with

29

$13,906 per day, a decrease of $2,764 per day or 20%. Lower utilization decreased time charter revenues by $18.5 million. Net fleet dispositions, the impact of vessels mobilizing between geographic regions and other changes in fleet mix combined to reduce time charter revenues by $20.3. In overall terms, lower average day rates decreased time charter revenues by $8.1 million while the impact of favorable changes in currency exchange rates increased time charter revenues by $1.5 million.

In the U.S. Gulf of Mexico, time charter revenues were $44.2 million lower due to softer market conditions attributable to the ongoing slowdown in the issuance of drilling permits by the Bureau of Ocean Energy in the aftermath of theDeepwater Horizon oil spill. During the Prior Year Quarter, incremental charters in support of the oil spill response contributed $27.1 million of additional time charter revenues. During the Current Year Quarter, lower utilization and lower average day rates reduced time charter revenues by $10.8 million and $5.2 million, respectively. Vessels that mobilized out of the region, other changes in fleet mix and net fleet dispositions decreased time charter revenues by $20.7 million and a net increase in cold-stacked vessels further decreased time charter revenues by $7.5 million. As of June 30, 2011, the Company had seven vessels cold-stacked in this region compared with four as of June 30, 2010.

In West Africa, time charter revenues were $3.7 million lower, of which $3.2 million was due to reduced utilization and $0.5 million was due to lower average day rates.

In the United Kingdom, time charter revenues were $3.4 million higher, of which $2.4 million was due to improved average day rates and favorable changes in the USD/pound sterling exchange rate, and $1.0 million was due to incremental time charter revenues from a vessel that mobilized into the region.

Revenues from brokered vessel activity were $4.4 million lower due to reduced activity in West Africa and the Middle East. Other marine services revenues were $2.9 million lower primarily due to the impact in the Prior Year Quarter of technical services provided in connection with theDeepwater Horizon oil spill response.

Costs and Expenses.Operating expenses were $4.8 million lower due to net fleet dispositions, $3.2 million lower due to a larger number of vessels being held in cold-stack status during the Current Year Quarter, and $3.3 million lower due to reduced brokered vessel activity in West Africa and the Middle East.

Personnel costs were $1.2 million lower primarily due to net fleet dispositions and additional cold-stacked vessels. Repair and maintenance expenses were $3.7 million lower due to net fleet dispositions, additional cold-stacked vessels and the impact of expenditures incurred in the Prior Year Quarter related to technical services provided in support of theDeepwater Horizon oil spill response. Drydocking expenses were $1.6 million lower primarily due to reduced activity in the U.S. Gulf of Mexico, the United Kingdom and West Africa.

Gains on Asset Dispositions and Impairments, net. During the Current Year Quarter, the Company sold four offshore support vessels for net proceeds of $11.8 million and recognized current and previously deferred gains on dispositions of $3.6 million. During the Prior Year Quarter, the Company sold one offshore support vessel for net proceeds of $1.5 million and recognized current and previously deferred gains on dispositions of $2.0 million.

Current Six Months compared with Prior Six Months

Operating Revenues. Time charter revenues were $73.0 million lower. Overall fleet utilization was 68% compared with 74%. The number of days available for charter was 21,814 compared with 24,471, a 2,657 day or 11% reduction, due to net fleet dispositions. Overall average day rates were $10,655 per day compared with $12,672 per day, a decrease of $2,017 per day or 16%. Lower utilization decreased time charter revenues by $33.8 million. Net fleet dispositions, the impact of vessels mobilizing between geographic regions and other changes in fleet mix combined to reduce time charter revenues by $27.5 million. In overall terms, lower average day rates decreased time charter revenues by $13.6 million while the impact of favorable changes in currency exchange rates increased time charter revenues by $1.9 million.

30

In the U.S. Gulf of Mexico, time charter revenues were $64.5 million lower due to softer market conditions attributable to the ongoing slowdown in the issuance of drilling permits by the Bureau of Ocean Energy in the aftermath of theDeepwater Horizon oil spill. During the Prior Six Months, incremental charters in support of the oil spill response contributed $27.1 million of additional time charter revenues. Time charter revenues were lower for all classes of vessels. During the Current Six Months, lower utilization and lower average day rates reduced time charter revenues by $19.2 million and $9.0 million, respectively. Net fleet dispositions, vessels that mobilized out of the region and other changes in fleet mix decreased time charter revenues by $24.8 million and a net increase in cold-stacked vessels further decreased time charter revenues by $11.5 million.

In West Africa, time charter revenues were $4.5 million lower, of which $3.8 million was due to reduced utilization and $1.2 million was due to lower average day rates. Net fleet dispositions, the impact of vessels mobilizing from other geographic regions and other changes in fleet mix increased time charter revenues by $0.5 million.

In the United Kingdom, time charter revenues were $4.2 million higher, of which $3.2 million was due to improved average day rates and favorable changes in the USD/pound sterling exchange rate, and $2.0 million was due to the impact of a vessel that mobilized into the region. These increases were partially offset by a $1.0 million decrease due to reduced fleet utilization.

In Asia, time charter revenues were $6.8 million lower, of which $4.9 million was due to fleet dispositions, and the impact of vessels mobilizing out of the region and other changes in fleet mix, $0.9 million was due to reduced utilization and $1.0 million was due to lower average day rates.

Revenues from brokered vessel activity were $3.8 million lower due to reduced activity in West Africa and the Middle East. Other marine services revenues were $2.7 million lower primarily due to the impact in the Prior Year Quarter of technical services provided in connection with theDeepwater Horizon oil spill response.

Costs and Expenses.Operating expenses were $8.3 million lower due to net fleet dispositions, $2.6 million lower due to the effect of vessels mobilizing between regions, $6.8 million lower due to a greater number of vessels being held in cold-stack status, and $3.0 million lower due to reduced brokered vessel activity in West Africa and the Middle East.

Personnel costs were $6.3 million lower primarily due to net fleet dispositions and additional cold-stacked vessels. Repair and maintenance expenses were $5.3 million lower due to net fleet dispositions, additional cold-stacked vessels and expenditures incurred in the Prior Year Quarter related to technical services provided in support of theDeepwater Horizon oil spill response. Drydocking expense was $3.9 million lower primarily due to reduced activity in the U.S. Gulf of Mexico, West Africa and Mexico, Central and South America. Fuel, lubes and supplies expense was $1.2 million lower primarily due to net fleet dispositions.

Gains on Asset Dispositions and Impairments, net. During the Current Six Months, the Company sold five offshore support vessels for net proceeds of $19.7 million and recognized current and previously deferred gains on dispositions of $8.0 million. During the Prior Six Months, the Company sold two vessels for net proceeds of $24.1 million and recognized current and previously deferred gains on dispositions of $14.6 million.

31

Fleet Count

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

	Owned		Joint Ventured		Leased-in		Pooled or Managed		Total
2011
Anchor handling towing supply		15		2		2		—		19
Crew		39		3		7		3		52
Mini-supply		6		—		2		—		8
Standby safety		25		1		—		—		26
Supply		10		—		9		9		28
Towing supply		3		1		2		—		6
Specialty		3		5		—		3		11
		101		12		22		15		150
2010
Anchor handling towing supply		18		1		1		—		20
Crew		41		2		11		3		57
Mini-supply		6		1		5		—		12
Standby safety		25		1		—		—		26
Supply		11		—		8		8		27
Towing supply		5		1		2		1		9
Specialty		4		5		—		3		12
		110		11		27		15		163

32

Aviation Services

	For the Three  Months Ended June 30,												For the Six Months Ended June 30,											Change ’11/’10
	2011						2010						2011					2010						3 Mos		6 Mos
	$’000			%			$’000			%			$’000			%		$’000			%			%		%
Operating Revenues:
United States		48,632			71			48,452			78			87,865			70		86,523			77
Foreign		19,861			29			13,981			22			36,783			30		26,185			23
		68,493			100			62,433			100			124,648			100		112,708			100			10		11
Costs and Expenses:
Operating
Personnel		15,382			22			14,684			24			29,998			24		28,386			25
Repairs and maintenance		12,710			18			14,087			22			22,389			18		22,720			20
Insurance and loss reserves		2,536			4			2,151			3			4,144			3		4,430			4
Fuel and supplies		6,086			9			4,939			8			10,847			9		8,769			8
Leased-in equipment		464			1			454			1			925			1		936			1
Other		5,279			8			4,226			7			7,619			6		7,326			6
		42,457			62			40,541			65			75,922			61		72,567			64
Administrative and general		6,229			9			6,091			10			13,249			11		11,482			10
Depreciation and amortization		12,390			18			10,728			17			24,309			19		21,175			19
		61,076			89			57,360			92			113,480			91		105,224			93
Gains on Asset Dispositions and Impairments, Net		6,172			9			379			1			8,366			7		469			—
Operating Income		13,589			20			5,452			9			19,534			16		7,953			7			149		146
Other Income (Expense):
Derivative gains (losses), net		(811	)		(1	)		38			—			(501	)		—		(62	)		—
Foreign currency gains (losses), net		338			—			(1,731	)		(3	)		691			—		(1,596	)		(1	)
Other, net		—			—			—			—			—			—		—			—
Equity in Earnings (Losses) of 50% or Less Owned Companies, Net of Tax		1,054			2			(442	)		(1	)		955			1		(717	)		(1	)
Segment Profit		14,170			21			3,317			5			20,679			17		5,578			5			327		271

33

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

	For the Three Months Ended June 30,										For the Six Months Ended June 30,										Change ’11/’10
	2011					2010					2011					2010					3 Mos			6 Mos
	$’000			%		$’000			%		$’000			%		$’000			%		%			%
Operating Revenues:
U.S. Gulf of Mexico, primarily from oil and gas services		31,063			45		30,349			48		57,223			46		56,029			50		2			2
Alaska, primarily from oil and gas services		6,314			9		7,393			12		11,418			9		12,643			11		(15	)		(10	)
Leasing		19,861			29		14,153			23		36,784			30		26,673			24		40			38
Air Medical Services		5,638			8		5,867			9		11,494			9		10,529			9		(4	)		9
Flightseeing		2,744			4		2,305			4		2,747			2		2,305			2		19			19
FBO		2,987			5		2,478			4		5,201			4		4,724			4		21			10
Eliminations		(114	)		—		(112	)		—		(219	)		—		(195	)		—		(2	)		(12	)
		68,493			100		62,433			100		124,648			100		112,708			100

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

	For the Three Months Ended June 30,								For the Six Months Ended June 30,								Change ’11/’10
	2011				2010				2011				2010				3 Mos			6 Mos
	Hours		%		Hours		%		Hours		%		Hours		%		%			%
U.S. Gulf of Mexico, primarily from oil and gas services		8,993		52		9,723		58		16,285		53		17,952		61		(8	)		(9	)
Alaska, primarily from oil and gas services		1,305		7		1,155		7		2,019		7		1,824		6		13			11
Leasing		4,180		24		2,757		16		7,731		25		4,884		17		52			58
Air Medical Services		1,758		10		2,266		13		3,345		11		3,952		13		(22	)		(15	)
Flightseeing		1,178		7		952		6		1,178		4		952		3		24			24
		17,414		100		16,853		100		30,558		100		29,564		100		3			3

Current Year Quarter compared with Prior Year Quarter

Operating Revenues. Operating revenues from leasing activities were $5.7 million higher primarily due to additional helicopters being placed on long-term leases in foreign jurisdictions and the impact of a full quarter of activity on maintenance support contracts for helicopters operating in Brazil, which began at various times in the first half of 2010. As of June 30, 2011, 48 aircraft were dedicated to leasing activities compared with 38 as of June 30, 2010. Operating revenues in the U.S. Gulf of Mexico were $0.7 million higher primarily due to the impact of search and rescue activities, which commenced in the third quarter of 2010 partially offset by a reduction of activity in support of theDeepwater Horizon oil spill response. As of June 30, 2011, Aviation Services had two aircraft assigned to search and rescue activities compared with none in the Prior Year Quarter. Operating revenues from Alaska were $1.1 million lower primarily due to a reduced number of aircraft on contract with a major oil and gas customer due to the completion of certain drilling activity in the fourth quarter of 2010.

34

Operating Expenses. Personnel expenses were $0.7 million higher primarily due to pilot pay scale adjustments implemented in June 2010. Repair and maintenance expenses were $1.4 million lower primarily due to the timing of aircraft repairs offset by additional helicopters placed in power-by-hour maintenance programs. Insurance and loss reserves were $0.4 million higher primarily due to fleet additions. Fuel expenses were $1.1 million higher primarily due to higher prices. Other operating expenses were $1.1 million higher primarily due to the cost of contract medical support personnel assigned to search and rescue aircraft based in the U.S. Gulf of Mexico.

Depreciation and Amortization. Depreciation and amortization expenses were $1.7 million higher due to the placement of additional helicopters into service.

Gains on Asset Dispositions and Impairments, Net. During the Current Year Quarter, the Company sold equipment for proceeds of $6.9 million and recognized current and previously deferred gains on dispositions and impairments of $6.2 million.

Current Six Months compared with Prior Six Months

Operating Revenues. Operating revenues from leasing activities were $10.1 million higher primarily due to additional helicopters being placed on long-term leases in foreign jurisdictions and the impact of a full six months of activity on maintenance support contracts for helicopters operating in Brazil, which began at various times in the first half of 2010. Operating revenues in the U.S. Gulf of Mexico were $1.2 million higher primarily due to the impact of search and rescue activities which commenced in the third quarter of 2010 partially offset by a reduction of activity in support of theDeepwater Horizon oil spill response. Operating revenues from Alaska were $1.2 million lower primarily due to a reduced number of aircraft on contract with a major oil and gas customer due to the completion of certain drilling activity in the fourth quarter of 2010.

Operating Expenses. Personnel expenses were $1.6 million higher primarily due to pilot pay scale adjustments implemented in June 2010. Repair and maintenance expenses were $0.3 million lower primarily due to the timing of aircraft repairs partially offset by additional helicopters placed in power-by-hour maintenance programs. Insurance and loss reserves were $0.3 million lower primarily due to a “good experience” premium adjustment in the first quarter partially offset by increases due to the addition of new aircraft to the fleet. Fuel expenses were $2.1 million higher primarily due to higher prices. Other operating expenses were $0.3 million higher primarily due to the cost of contract medical support personnel assigned to search and rescue aircraft based in the U.S. Gulf of Mexico and expenses related to an increase in parts sold to customers. These increases were partially offset by the first quarter receipt of insurance proceeds of $1.9 million related to hurricane damages sustained in 2005.

Administrative and General. Administrative and general expenses were $1.8 million higher primarily due to higher wage and benefit costs.

Depreciation and Amortization. Depreciation and amortization expenses were $3.1 million higher due to the placement of additional helicopters into service.

Gains on Asset Dispositions and Impairments, Net. During the Current Six Months, the Company sold equipment for proceeds of $9.7 million and recognized current and previously deferred gains on dispositions an impairments of $8.4 million.

35

Fleet Count    

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

	Owned(1)		Joint Ventured		Leased-in(2)		Managed		Total
2011
Light helicopters—single engine		52		6		3		—		61
Light helicopters—twin engine		29		—		6		9		44
Medium helicopters		60		—		2		3		65
Heavy helicopters		7		—		—		—		7
		148		6		11		12		177
2010
Light helicopters—single engine		51		6		3		—		60
Light helicopters—twin engine		31		—		6		9		46
Medium helicopters		54		—		2		3		59
Heavy helicopters		9		—		—		—		9
		145		6		11		12		174

(1) Excludes one EC120 helicopter removed from service and subsequently sold in July 2011.

(2) Excludes three EC120 helicopters removed from service and subsequently sold in July 2011.

36

Inland River Services

	For the Three  Months Ended June 30,									For the Six Months Ended June 30,								Change ’11/’10
	2011					2010				2011				2010				3 Mos			6 Mos
	$’000			%		$’000		%		$’000		%		$’000		%		%			%
Operating Revenues:
United States		41,442			100		34,596		100		87,911		100		68,032		100		20			29
Costs and Expenses:
Operating
Barge logistics		19,765			48		12,241		35		37,409		42		23,517		35
Personnel		3,291			8		3,400		10		6,681		8		6,232		9
Repairs and maintenance		1,183			3		1,313		4		2,285		3		2,495		4
Insurance and loss reserves		487			1		613		2		1,145		1		1,206		2
Fuel, lubes and supplies		460			1		662		2		1,269		1		1,719		2
Leased-in equipment		1,654			4		2,085		6		4,422		5		3,571		5
Other		1,877			4		1,233		3		3,390		4		2,361		3
		28,717			69		21,547		62		56,601		64		41,101		60
Administrative and general		3,166			8		2,618		8		5,863		7		4,679		7
Depreciation and amortization		5,791			14		4,958		14		11,413		13		9,834		15
		37,674			91		29,123		84		73,877		84		55,614		82
Gains (Losses) on Asset Dispositions		(22	)		—		899		3		675		1		1,786		3
Operating Income		3,746			9		6,372		19		14,709		17		14,204		21		(41	)		4
Other Income (Expense):
Other, net		3			—		—		—		4		—		10		—
Equity in Earnings of 50% or Less Owned Companies, Net of Tax		666			2		805		2		410		—		707		1
Segment Profit		4,415			11		7,177		21		15,123		17		14,921		22		(38	)		1

37

Operating Revenues by Service Line. The table below sets forth, for the periods indicated, operating revenues earned by service line.

	For the Three  Months Ended June 30,								For the Six Months Ended June 30,								Change ’11/’10
	2011				2010				2011				2010				3 Mos			6 Mos
	$’000		%		$’000		%		$’000		%		$’000		%		%			%
Operating Revenues:
Dry cargo barge pool participation		23,373		57		16,780		49		51,338		58		33,989		50		39			51
Liquid unit tow operations		6,321		15		7,756		22		12,998		15		15,195		22		(19	)		(14	)
Charter-out of dry cargo barges		2,249		5		2,093		6		4,282		5		4,367		6		7			(2	)
10,000 barrel liquid tank barge operations		3,692		9		2,052		6		7,364		8		3,882		6		80			90
Inland river towboat operations and other activities		5,807		14		5,915		17		11,929		14		10,599		16		(2	)		13
		41,442		100		34,596		100		87,911		100		68,032		100

Dry Cargo Barge Pool 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 June 30,								For the Six Months Ended June 30,								Change ’11/’10
	2011				2010				2011				2010				3 Mos		6 Mos
	Tons		%		Tons		%		Tons		%		Tons		%		%		%
Tons Moved (in thousands):
Grain		880		71		680		68		1,843		69		1,368		65		29		35
Non-Grain		365		29		324		32		827		31		721		35		13		15
		1,245		100		1,004		100		2,670		100		2,089		100		24		28
	Days				Days				Days				Days
Available barge days		49,686				41,663				97,040				80,240				19		21

Operating Revenues.Operating revenues were $6.8 million higher in the Current Year Quarter compared with the Prior Year Quarter and $19.9 million higher in the Current Six Months compared with the Prior Six Months primarily due to a larger fleet following the addition of newly constructed dry cargo barges and the addition of dry cargo and 10,000 barrel liquid tank barges previously included in the Seaspraie joint venture. These increases were partially offset by lower operating revenues in the liquid unit tow operation primarily due to lower contract rates and reduced utilization of equipment. Operating revenues from inland river towboat operations and other activities were $1.3 million higher in the Current Six Months primarily due to improved utilization.

38

Operating Expenses. Operating expenses were $7.2 million higher in the Current Year Quarter compared with the Prior Year Quarter and $15.5 million higher in the Current Six Months compared with the Prior Six Months primarily due to increased barge logistic expenses as a result of the larger fleet, higher fuel prices and high-water towing escalators as a result of difficult operating conditions. In the Current Year Quarter, heavy rains in the Mid-South and the lower Ohio Valley produced severe flood conditions that caused periodic river closures and restricted tow sizes.

Fleet Count

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

	Owned		Joint Ventured		Leased-in		Pooled or Managed		Total
2011
Inland river dry cargo barges		689		172		2		629		1,492
Inland river liquid tank barges		70		—		—		10		80
Inland river deck barges		26		—		—		—		26
Inland river towboats		16		15		—		—		31
Dry cargo vessels(1)		—		1		—		—		1
		801		188		2		639		1,630
2010
Inland river dry cargo barges		619		262		2		566		1,449
Inland river liquid tank barges		51		34		2		—		87
Inland river deck barges		26		—		—		—		26
Inland river towboats		17		12		—		—		29
Dry cargo vessels(1)		—		1		—		—		1
		713		309		4		566		1,592

(1) Argentine-flag.

39

Marine Transportation Services

	For the Three  Months Ended June 30,									For the Six Months Ended June 30,									Change ’11/’10
	2011				2010					2011				2010					3 Mos			6 Mos
	$’000		%		$’000			%		$’000		%		$’000			%		%			%
Operating Revenues:
United States		17,465		72		21,263			100		34,777		83		40,715			100
Foreign		6,871		28		—			—		6,871		17		—			—
		24,336		100		21,263			100		41,648		100		40,715			100		14			2
Costs and Expenses:
Operating
Personnel		4,175		17		5,645			26		8,056		19		11,689			29
Repairs and maintenance		1,145		5		564			3		1,755		4		1,395			3
Drydocking		59		—		295			1		459		1		4,531			11
Insurance and loss reserves		66		—		560			3		556		1		1,155			3
Fuel, lubes and supplies		2,047		8		1,215			6		2,369		6		2,306			6
Leased-in equipment		3,766		16		—			—		6,666		16		—			—
Other		2,326		10		636			3		2,702		7		1,271			3
		13,584		56		8,915			42		22,563		54		22,347			55
Administrative and general		2,146		9		1,038			5		3,563		8		1,875			5
Depreciation and amortization		5,728		23		8,008			38		10,706		26		16,016			39
		21,458		88		17,961			85		36,832		88		40,238			99
Losses on Asset Dispositions and Impairments		—		—		(11	)		—		—		—		(11	)		—
Operating Income		2,878		12		3,291			15		4,816		12		466			1		(13	)		933
Other Income (Expense):
Foreign currency gains (losses), net		6		—		(41	)		—		22		—		(26	)		—
Other, net		56		—							56		—
Segment Profit		2,940		12		3,250			15		4,894		12		440			1		(10	)		1012

40

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

	For the Three  Months Ended June 30,								For the Six Months Ended June 30,								Change ’11/’10
	2011				2010				2011				2010				3 Mos			6 Mos
	$’000		%		$’000		%		$’000		%		$’000		%		%			%
Operating Revenues:
Time charter		8,839		36		12,967		61		17,569		42		25,280		62		(32	)		(31	)
Bareboat charter		8,736		36		6,552		31		17,376		42		12,542		31		33			39
Contract of affreightment and other		6,761		28		1,744		8		6,703		16		2,893		7		288			132
		24,336		100		21,263		100		41,648		100		40,715		100

G&G Shipping Acquisition. In April, Marine Transportation Services acquired real property, eight foreign flag Roll-on/Roll-off (“RORO”) vessels and a 70% interest in an operating company engaged in the shipping trade between the United States, the Bahamas and the Caribbean. The operating company leases-in the real property and the RORO vessels from the Company. In the Current Year Quarter and Current Six Months, this operation contributed operating revenues of $6.8 million and reported an operating loss of $0.4 million. The operating loss was primarily due to drydocking costs for one RORO vessel and charter-in expenses to cover that vessel’s out-of-service time.

Operating Revenues. The changes in time charter and bareboat charter revenues in the Current Year Quarter and Current Six Months were primarily due to the change in contract status from time charter to long-term bareboat charter for one of the Company’s U.S.-flag product tankers effective August 2010. Excluding the revenues contributed by G&G Shipping, contract of affreightment and other revenues were lower in the Current Year Quarter and Current Six Months primarily due to the lay-up of the Seabulk America in August 2010.

Operating Expenses. Excluding the impact of G&G Shipping, operating expenses were lower in the Current Year Quarter and Current Six Months primarily due to the lay-up of the Seabulk America and an additional U.S.-flag product tanker operating under a long-term bareboat charter. Drydocking costs were lower in the Current Six Months due to the drydocking of theSeabulk Challenge andSeabulk Trader in the first quarter of 2010.

Administrative and General. Administrative and general expenses were higher in the Current Year Quarter and Current Six Months primarily due to G&G Shipping.

Depreciation and Amortization. Depreciation and amortization expenses were lower in the Current Year Quarter and Current Six Months primarily due to the sale-leaseback of two vessels during the fourth quarter of 2010 and the write-down of theSeabulk America to fair value in the third quarter of 2010, partially offset by additional depreciation expenses from G&G Shipping.

Fleet Count

As of June 30, 2011 and 2010, Marine Transportation Services’ fleet included eight U.S.-flag product tankers operating in the domestic coastwise trade. As of June 30, 2011, six of the U.S.-flag product tankers were owned and two were leased-in, of which four were operating under long-term bareboat charters, three were operating under time charters and one was laid-up. As of June 30, 2011, Marine Transportation Services’ fleet also included eight owned foreign flag RORO vessels operating in the shipping trade between the United States, the Bahamas and the Caribbean.

41

Environmental Services

	For the Three  Months Ended June 30,										For the Six Months Ended June 30,										Change ’11/’10
	2011					2010					2011					2010					3 Mos			6 Mos
	$’000			%		$’000			%		$’000			%		$’000			%		%			%
Operating Revenues:
United States		42,973			89		208,531			97		101,488			91		230,761			95
Foreign		5,493			11		6,098			3		10,064			9		12,026			5
		48,466			100		214,629			100		111,552			100		242,787			100		(77	)		(54	)
Costs and Expenses:
Operating
Subcontractors		10,692			22		111,019			52		34,516			31		116,392			48
Personnel		15,172			31		12,469			6		31,301			28		23,848			10
Repairs and maintenance		1,566			3		781			—		2,273			2		1,778			1
Insurance and loss reserves		794			2		608			—		1,402			1		1,231			—
Fuel, lubes and supplies		1,437			3		1,003			—		2,607			3		1,871			1
Other		2,001			4		1,228			1		3,607			3		2,325			1
		31,662			65		127,108			59		75,706			68		147,445			61
Administrative and general		10,322			21		6,525			3		17,873			16		12,562			5
Depreciation and amortization		2,238			5		2,099			1		4,469			4		4,082			2
		44,222			91		135,732			63		98,048			88		164,089			68
Losses on Asset Dispositions		(19	)		—		(36	)		—		(19	)		—		(53	)		—
Operating Income		4,225			9		78,861			37		13,485			12		78,645			32		(95	)		(83	)
Other Income (Expense):
Foreign currency gains (losses), net		97			—		(23	)		—		46			—		7			—
Other, net		2			—		—			—		2			—		—			—
Equity in Earnings of 50% or Less Owned Companies, Net of Tax		132			—		54			—		124			—		92			—
Segment Profit		4,456			9		78,892			37		13,657			12		78,744			32		(94	)		(83	)

42

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

	For the Three  Months Ended June 30,								For the Six Months Ended June 30,								Change ’11/’10
	2011				2010				2011				2010				3 Mos			6 Mos
	$’000		%		$’000		%		$’000		%		$’000		%		%			%
Operating Revenues:
Response Services		21,471		44		185,567		87		59,688		54		189,587		78		(88	)		(69	)
Retainer Services		7,294		15		6,584		3		14,206		13		13,080		5		11			9
Standby Services		2,781		6		1,713		1		5,127		5		3,454		2		62			48
Professional Services		4,280		9		2,898		1		7,770		7		6,927		3		48			12
Software Services		152		—		729		—		374		—		790		—		(79	)		(53	)
Project Management		11,252		23		15,088		7		21,684		19		25,691		11		(25	)		(16	)
Equipment Sales and Leasing		1,236		3		2,050		1		2,703		2		3,258		1		(40	)		(17	)
		48,466		100		214,629		100		111,552		100		242,787		100

Deepwater Horizon Oil Spill Response. Environmental Services’ operating results in the Prior Year Quarter were 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”). Environmental Services’ provided vessels, equipment and people to support clean-up activities both on shore and at sea, professional assistance, consulting services and software systems in support of incident management activities.

Operating Revenues. The reductions in operating revenues from response services and project management in the Current Year Quarter and Current Six Months were the result of a reduction in the level of services provided in support of the Oil Spill Response. Operating revenues from project management were also lower in the Current Year Quarter and Current Six Months due to the completion of a project in American Samoa during the Prior Year Quarter.

Operating Expenses. Operating expenses were lower in the Current Year Quarter and Current Six Months primarily due to the reduction in response services and project management activities as discussed above.

Administrative and General. Administrative and general expenses were higher in the Current Year Quarter and Current Six Months primarily due to higher wage and benefits costs and higher legal fees as a result of litigation arising from the Oil Spill Response.

43

Commodity Trading and Logistics

	For the Three Months Ended June 30,											For the Six Months Ended June 30,												Change ’11/’10
	2011					2010						2011						2010						3 Mos		6 Mos
	$’000			%		$’000			%			$’000			%			$’000			%			%		%
Operating Revenues:
United States		160,489			65		176,400			87			337,863			77			310,146			90
Foreign		84,832			35		26,664			13			101,470			23			35,910			10
		245,321			100		203,064			100			439,333			100			346,056			100			21		27
Costs and Expenses:
Operating		237,644			97		203,374			100			424,662			97			350,746			101
Administrative and general		2,202			1		3,791			2			4,862			1			6,535			2
Depreciation		12			—		15			—			25			—			35			—
		239,858			98		207,180			102			429,549			98			357,316			103
Operating Income (Loss)		5,463			2		(4,116	)		(2	)		9,784			2			(11,260	)		(3	)		233		187
Other Income (Expense):
Derivative gains (losses), net(1)		828			—		4,611			2			(3,922	)		(1	)		8,919			2
Foreign currency losses, net		(16	)		—		(30	)		—			(21	)		—			(747	)		—
Other, net		—			—		6			—			—			—			6			—
Equity in Losses of 50% or Less Owned Companies, Net of Tax		(1,051	)		—		(13	)		—			(1,000	)		—			(1,035	)		—
Segment Profit (Loss)		5,224			2		458			—			4,841			1			(4,117	)		(1	)		1041		218

⁽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 derivative 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 June 30, 2011 and 2010, the net market exposure to ethanol and sugar under its contracts and inventory balances was not material.

44

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

	For the Three Months Ended June 30,												For the Six Months Ended June 30,												Change ’11/’10
	2011						2010						2011						2010						3 Mos			6 Mos
	$’000			%			$’000			%			$’000			%			$’000			%			%			%
Operating Revenues:
Energy Trading		196,055			80			152,824			75			364,816			83			260,305			75			28			40
Sugar Trading		46,752			19			20,129			10			71,431			16			46,394			14			132			54
Rice Trading		2,514			1			30,111			15			3,086			1			39,357			11			(92	)		(92	)
		245,321			100			203,064			100			439,333			100			346,056			100
Segment Profit (Loss):
Energy Trading		4,589			88			3,412			745			4,547			94			2,205			54			34			106
Sugar Trading		706			13			960			210			699			14			1,377			33			(26	)		(49	)
Rice Trading		(71	)		(1	)		(3,914	)		(855	)		(405	)		(8	)		(7,699	)		(187	)		98			95
		5,224			100			458			100			4,841			100			(4,117	)		100

Segment Profit.Segment profit in the Current Year Quarter and Current Six Months improved due to lower segment losses from rice trading activities reflecting the further winding down of those activities and higher margins and activity levels from energy trading activities.

Other Segment Profit

	For the Three Months Ended June 30,						For the Six Months Ended June 30,						Change ’11/’10
	2011			2010			2011			2010			3 Mos			6 Mos
	$’000			$’000			$’000			$’000			%			%
Harbor and Offshore Towing Services		4,496			4,946			7,984			7,655			(9	)		4
Other Activities		(660	)		(550	)		(663	)		(904	)		(20	)		27
Equity in Earnings (Losses) of 50% or Less Owned Companies		3			759			(386	)		734			(100	)		(153	)
Segment Profit		3,839			5,155			6,935			7,485			(26	)		(7	)

Corporate and Eliminations

	For the Three Months Ended June 30,						For the Six Months Ended June 30,						Change ’11/’10
	2011			2010			2011			2010			3 Mos			6 Mos
	$’000			$’000			$’000			$’000			%			%
Corporate Expenses		(8,179	)		(10,769	)		(19,421	)		(19,650	)		24			1
Eliminations		—			148			—			3			(100	)		(100	)
Operating Loss		(8,179	)		(10,621	)		(19,421	)		(19,647	)		23			1
Other Income (Expense):
Derivative losses, net		(6,618	)		(9,370	)		(5,496	)		(10,802	)		29			49
Foreign currency gains (losses), net		1,527			(6,085	)		5,547			(8,605	)		125			164
Other, net		(117	)		6			(295	)		596			(2050	)		(149	)

45

Derivative losses, net.    Derivative losses, net of $6.6 million in the Current Year Quarter and $5.5 million in the Current Six Months were primarily due to losses on U.S. treasury notes, rate-locks and bond future and option contracts resulting from declines in market interest rates partially offset by gains on forward currency exchange, option and future contracts due to movements in the underlying currencies.

Foreign currency gains (losses), net.Foreign currency gains, net of $1.5 million in the Current Year Quarter and $5.5 million in the Current Six Months were primarily due to the strengthening of the euro against the U.S. dollar.

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

	For the Three Months Ended June 30,						For the Six Months Ended June 30,						Change ’11/’10
	2011			2010			2011			2010			3 Mos		6 Mos
	$’000			$’000			$’000			$’000			%		%
Interest income		3,307			1,863			7,045			3,226			78		118
Interest expense		(10,465	)		(11,264	)		(20,506	)		(23,588	)		7		13
Debt extinguishment losses, net		—			(364	)		(48	)		(368	)		100		87
Marketable security losses, net		(4,754	)		(5,406	)		(3,220	)		(3,445	)		12		7
		(11,912	)		(15,171	)		(16,729	)		(24,175	)		21		31

Interest Expense.    Interest expense decreased in the Current Year Quarter and Current Six Months compared with the Prior Year Quarter and Prior Six Months primarily due to the reduction in principal balances following the purchase or redemption of certain of the Company’s Senior Notes and Title XI Bonds.

Marketable security losses, net.    Marketable security losses, net in the Current Year Quarter were primarily the result of a reduction in the market value of the Company’s long equity positions partially offset by reductions in the market value of the equities underlying the Company’s short marketable security positions. Marketable security losses, net in the Current Six Months were primarily attributable to increases in the market value of equities underlying the Company’s short marketable security positions.

Liquidity and Capital Resources

General

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 its Common Stock, preferred stock or a combination thereof.

As of June 30, 2011, the Company’s unfunded capital commitments consisted primarily of offshore support vessels, helicopters, an interest in a dry-bulk articulated tug-barge, an interest in a river grain terminal and other property equipment. These commitments totaled $318.2 million, of which $153.0 million is payable during the remainder of 2011 with the balance payable through 2013. Of the total unfunded capital commitments, $48.2 million may be terminated without further liability other than the payment of liquidated damages on $1.4 million.

As of June 30, 2011, construction reserve funds of $305.1 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.

46

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. As of June 30, 2011, the remaining authority under the repurchase plan was $113.0 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 June 30, 2011, the Company had $125.0 million of outstanding borrowings under its revolving credit facility. The remaining availability under this facility as of June 30, 2011 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 $45.1 million with various expiration dates through 2014.

Summary of Cash Flows

	For the Six Months Ended June 30,
	2011			2010
	$’000			$’000
Cash flows provided by or (used in):
Operating Activities		161,479			153,034
Investing Activities		(173,333	)		(4,439	)
Financing Activities		2,983			(206,984	)
Effect of Exchange Rate Changes on Cash and Cash Equivalents		5,656			(9,017	)
Net Decrease in Cash and Cash Equivalents		(3,215	)		(67,406	)

Operating Activities

Cash flows provided by operating activities increased by $8.4 million in the Current Six Months compared with the Prior Six Months. The components of cash flows provided by (used in) operating activities during the Current Six Months and Prior Six Months were as follows:

	For the Six  Months Ended June 30,
	2011			2010
	$’000			$’000
Operating income before depreciation and gains on asset dispositions and impairments, net		116,697			205,105
Changes in operating assets and liabilities before interest and income taxes		(9,591	)		(40,337	)
Purchases of marketable securities		(54,643	)		(55,397	)
Proceeds from sale of marketable securities		134,127			28,199
Dividends received from 50% or less owned companies		3,058			16,042
Interest paid, excluding capitalized interest		(19,833	)		(23,524	)
Income taxes paid (refunded), net		(4,776	)		21,037
Other		(3,560	)		1,909
Total cash flows provided by operating activities		161,479			153,034

47

Operating income before depreciation and gains on asset dispositions and impairments, net was $88.4 million lower in the Current Six Months compared with the Prior Six Months primarily due to higher operating results in the Prior Six Months from Oil Spill Response activities. See “Consolidated Results of Operations” included above for a discussion of the results of each of the Company’s business segments.

During the Current Six Months, changes in operating assets and liabilities before interest and income taxes used cash flows of $9.6 million. Increases in working capital employed by Commodity Trading and Logistics due to higher trading activities were offset by decreases by Environmental Services from the reduction in the level of services provided in support of the Oil Spill Response. During the Prior Six Months, changes in operating assets and liabilities before interest and income taxes used cash flows of $40.3 million primarily due to a general increase in working capital employed across the Company’s Offshore Marine Services, Inland River Services, Marine Transportation Services and Environmental Services business segments.

During the Current Six Months, cash used in operating activities included $21.2 million to purchase marketable security long positions and $33.4 million to cover marketable security short positions. During the Current Six Months, cash provided by operating activities included $65.5 million received from the sale of marketable security long positions and $68.6 million received upon entering into marketable security short positions.

During the Prior Six Months, cash used in operating activities included $50.3 million to purchase marketable security long positions and $5.1 million to cover marketable security short positions. During the Prior Six Months, cash provided by operating activities included $24.5 million received from the sale of marketable security long positions and $3.7 million received upon entering into marketable security short positions.

Investing Activities

During the Current Six Months, net cash used in investing activities was $173.3 million primarily as follows:

• Capital expenditures were $131.4 million. Equipment deliveries included one offshore support vessel, 55 inland river dry cargo barges, two liquid tank barges and five helicopters. In addition, the Company acquired a controlling interest in an offshore support vessel.

• Proceeds from the disposition of property and equipment were $25.1 million. The Company sold five offshore support vessels, four helicopters, one inland river towboat, one harbor tug and other equipment.

• The Company made net investments in its 50% or less owned companies of $30.3 million.

• The Company made net advances on third party notes receivable of $20.3 million.

• Construction reserve fund account transactions included withdrawals of $17.2 million and deposits of $8.0 million.

• The Company acquired certain real property, eight foreign flag RORO vessels and a 70% interest in an operating company engaged in the shipping trade between the United States, the Bahamas and the Caribbean for $33.5 million, which included cash consideration of $30.3 million and the contribution of a $3.2 million note receivable. The acquired company had $1.6 million in cash at the time of acquisition.

During the Prior Six Months, net cash used in investing activities was $4.4 million primarily as follows:

• Capital expenditures were $115.0 million. Equipment deliveries included one offshore support vessel, 38 inland river dry cargo barges and three helicopters.

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• Proceeds from the disposition of property and equipment were $58.3 million. The Company sold two offshore support vessels, one helicopter, one ocean liquid tank barge 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 made net investments in leases of $17.7 million.

• The Company made net investments in its 50% or less owned companies of $19.9 million.

• Construction reserve fund account transactions included withdrawals of $55.6 million.

• The Company redeemed all of the outstanding Title XI Bonds on two of the Company’s double-hull product tankers (as noted below) and released $18.8 million of restricted cash into general purpose funds.

Financing Activities

During the Current Six Months, net cash provided by financing activities was $3.0 million. The Company:

• purchased $1.0 million, in principal amount, of its 5.875% Senior Notes due 2012 for an aggregate purchase price of $1.0 million;

• made scheduled payments on long-term debt and capital lease obligations of $6.5 million; and

• had net borrowings on inventory financing arrangements of $5.8 million.

During the Prior Six Months, net cash used in financing activities was $207.0 million. 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;

• made scheduled payments on long-term debt and capital lease obligations of $5.3 million;

• made net payments on inventory financing arrangements of $19.3 million;

• 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; and

• acquired for Treasury 1,615,900 shares of Common Stock for an aggregate purchase price of $120.0 million.

Effect of Exchange Rate Changes on Cash and Cash Equivalents

During the Current Six Months, the effect of exchange rate changes increased cash and cash equivalents by $5.7 million, primarily due to the strengthening of the U.S. dollar against the euro and pound sterling.

Short and Long-Term Liquidity Requirements

The recent economic conditions have created an unprecedented disruption in the credit and capital markets. To date, the Company’s liquidity has not been materially impacted and management does not expect that it will be materially impacted in the near future. The Company anticipates it will continue to generate positive cash flows from operations 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.

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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

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 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 2007, representing the Company’s allocated share of an additional funding deficit of $332.6 million. Based on an actuarial valuation of the MNOPF in 2009, the Company was invoiced and expensed $7.8 million in 2010, representing the Company’s allocated share of an additional funding deficit of $636.9 million. 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 Company was advised that its share of a $281.0 million (£175.0 million) accumulated funding deficit was $1.0 million (£0.6 million). The accumulated funding deficit is being recovered by additional annual contributions from current employers and is subject to adjustment following the results of future tri-annual actuarial valuations. As of June 30, 2011, $0.2 million, in the aggregate, of the Company’s funding deficit had been invoiced and expensed. Depending on the results of the future actuarial valuations, it is possible that the MNRPF will experience further funding deficits, requiring the Company to recognize additional payroll related operating expenses in the periods invoices are received.

On June 12, 2009, a purported civil class action was filed against the Company, Era Group Inc., Era Helicopters LLC and three 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.). The Complaint alleges that the Defendants violated federal antitrust law 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. The Company believes that the claims set forth in the Complaint are without merit and intends to vigorously defend the action. On September 4, 2009, the Defendants filed a motion to dismiss the Complaint. On September 14, 2010, the Court entered an order dismissing the Complaint. On September 28, 2010, the plaintiffs filed a motion for reconsideration and amendment and a motion for re-argument (the “Motions”). On November 30, 2010, the Court granted the Motions, amended the Court’s September 14, 2010 Order to clarify that the dismissal was without prejudice, permitted the filing of an Amended Complaint, and authorized limited discovery with respect to the new allegations in the Amended Complaint. Following the completion of such limited discovery, on February 11, 2011, the Defendants filed a motion for summary judgment to dismiss the Amended Complaint

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with prejudice. On June 23, 2011, the Court granted summary judgment for the Defendants. On July 22, 2011, the plaintiffs filed a notice of appeal to the U.S. Court of Appeals for the Third Circuit. The Company is unable to estimate the potential exposure, if any, resulting from these claims but believes they are without merit and will continue 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, theDeepwater Horizon, were negligent in their efforts to save lives and put out the fire and contributed to the sinking of theDeepwater Horizon and subsequent oil spill. The action now is part of the overall multi-district litigation (“MDL”), 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. The Company also recently filed petitions seeking exoneration from, or limitation of liability in relation to, any actions that may have been taken by vessels owned by the Company to extinguish the fire. Pursuant to the Limitation of Liability Act, those petitions impose an automatic stay on the Robin case, and the court set a deadline of April 20, 2011 for individual claimants to assert claims in the limitation cases. Approximately 66 claims were submitted by the deadline in all of the limitation actions. On June 8, 2011, the Company moved to dismiss these claims (with the exception of one claim filed by a Company employee) on various legal grounds. Oral argument on the motion is scheduled for August 24, 2011.

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. (“O’Brien’s), 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’sDeepwater 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. Pursuant to contractual agreements with the responsible party, the responsible party has agreed, subject to certain potential limitations, to indemnify and defend O’Brien’s in connection with the Wunstell Action and claims asserted in the MDL.

On December 15, 2010, SEACOR subsidiaries O’Brien’s and National Response Corporation (“NRC”) were named as defendants in one of the several consolidated “master complaints” that have been filed in the overall multi-district litigation, In re Oil Spill by the Oil Rig “Deepwater Horizon”, MDL No. 2179. The master complaint naming O’Brien’s and NRC asserts various claims on behalf of a punitive class against multiple defendants concerning the clean-up activities generally, and the use of dispersants specifically. By court order, the Wunstell Action has been stayed as a result of the filing of the referenced master complaint. The Company believes that the claims asserted against its subsidiaries in the master complaint have no merit and will seek dismissal of the master complaint against both O’Brien’s and NRC. In addition to the indemnity provided to O’Brien’s, pursuant to contractual agreements with the responsible party, the responsible party has agreed, subject to certain potential limitation, to indemnify and defend O’Brien’s and NRC in connection with these claims in the MDL. On February 28, 2011, O’Brien’s and NRC moved to dismiss all claims against them in the master complaint on various legal grounds. The motions were argued before the Court on May 26, 2011 and a decision on the motions is pending.

Subsequent to the filing of the referenced master complaint, four additional individual civil actions have been filed in the U.S. District Court for the Eastern District of Louisiana concerning the clean-up activities generally, which name the Company, O’Brien’s and/or NRC as defendants and are part of the overall

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multi-district litigation, In re Oil Spill by the Oil Rig “Deepwater Horizon”, MDL No. 2179. On April 8, 2011, O’Brien’s was named as a defendant inJohnson Bros. Corporation of Louisiana v. BP, PLC, et al., No. 2:11-cv-00781 (E.D. La.), which is a suit by an individual business seeking damages allegedly caused by a delay on a construction project alleged to have resulted from the clean-up operations. On April 15, 2011, O’Brien’s and NRC were named as defendants inJames and Krista Pearson v. BP Exploration & Production, Inc., et al., No. 2:11-cv-00863 (E.D. La.), which is a suit by a husband and wife, who allegedly participated in the clean-up effort and are seeking damages for personal injury, property damage to their boat, and amounts allegedly due under contract. On April 15, 2011, O’Brien’s and NRC were named as defendants inThomas Edward Black v. BP Exploration & Production, Inc., et al., No. 2:11-cv-00867 (E.D. La.), which is a suit by an individual who is seeking damages for lost income because he allegedly could not find work in the fishing industry after the oil spill. On April 20, 2011, a complaint was filed inDarnell Alexander, et al. v. BP, PLC, et al., No. 2:11-cv-00951 (E.D. La.) on behalf of 117 individual plaintiffs that seek to adopt the allegations made in the referenced master complaint against O’Brien’s and NRC (and the other defendants). By court order, all four of these additional individual cases have been stayed as a result of the filing of the referenced master complaint.

On February 18, 2011, Triton Asset Leasing GmbH, Transocean Holdings LLC, Transocean Offshore Deepwater Drilling Inc., and Transocean Deepwater Inc. (collectively “Transocean”) named O’Brien’s and NRC as third-party defendants in a Rule 14(c) Third-Party Complaint in Transocean’s own Limitation of Liability Act action, which is part of the overall multi-district litigation, In re Oil Spill by the Oil Rig “Deepwater Horizon”, MDL No. 2179, tendering to O’Brien’s and NRC the claims in the referenced master complaint that have already been asserted against O’Brien’s and NRC. Transocean, Cameron International Corporation, and Halliburton Energy Services, Inc. have also filed cross-claims against O’Brien’s and NRC for contribution should they be found liable for any damages in Transocean’s Limitation of Liability Act action. Furthermore, certain defendants in the Transocean limitation action asserted cross-claims against O’Brien’s and NRC for contribution and tort indemnity and O’Brien’s and NRC asserted counterclaims against those same parties for identical relief.

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 such exposure could occur, but the Company does not expect that any change in estimated exposure would have a material effect on the Company’s consolidated financial position or its results of operations.

During the year ended December 31, 2010, the Company received notice from the Internal Revenue Service of $12.6 million in proposed penalties regarding Marine Transportation Services’ informational excise tax filings for prior years. The Company intends to vigorously defend its position that the proposed penalties are erroneous and believes the resolution of this matter will not have a material effect on the Company’s consolidated financial position or its results of operations.

During the six months ended June 30, 2011, the Company received a Notice of Infringement (the “Notice”) from the Brazilian Federal Revenue Office. The Notice alleged the Company had imported a number of vessels into Brazil without properly completing the required importation documents and levied an assessment of $25.7 million. The Company intends to vigorously defend its position that the proposed assessment is erroneous and believes the resolution of this matter will not have a material effect on the Company’s consolidated financial position or its results of operations. Of the levied assessment, $19.3 million relates to managed vessels whose owner would be responsible for any potential payment.

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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, 2010. There has been no significant change in the Company’s exposure to market risk during the Current Six Months, except as described below.

As of June 30, 2011, the Company maintained cash balances of €13.9 million. An adverse change of 10% in the underlying foreign currency exchange rate on euro denominated cash balances would reduce net income by $1.3 million, net of tax.

The Company has entered into and settled positions in euro based forward currency exchange contracts designated as fair value hedges for capital purchase commitments. As of June 30, 2011, the Company had capital purchase commitments of €129.1 million ($185.8 million) and forward currency exchange contracts designated as fair value hedges of €50.1 million ($72.1 million). An adverse change of 10% in the underlying foreign currency exchange rate would increase the U.S. dollar equivalent of the non-hedged purchase commitment by $11.3 million. Subsequent to June 30, 2011, the foreign currency exchange contracts designated as fair value hedges of €50.1 million were dedesignated and liquidated.

As of June 30, 2011, the Company held marketable securities with a fair value of $105.6 million, including $66.7 million in fixed income investments consisting of corporate debt securities, municipal bonds, and foreign government bonds, and $38.9 million in equity securities. As of June 30, 2011, a 10% decline in the value of the Company’s investments in marketable securities would reduce income by $6.9 million, net of tax.

As of June 30, 2011, the Company held positions in short sales of marketable equity securities with a fair value of $74.9 million. The Company’s short sales of marketable equity securities primarily include positions in energy, marine, transportation and other related businesses. A 10% increase in the value of equity securities underlying the short sale positions of the Company as of June 30, 2011 would reduce income by $4.9 million, net of tax.

The Company has entered into and settled various positions in U.S. treasury notes and bonds through rate locks, futures or options on futures tied to U.S. treasury notes. As of June 30, 2011, these positions consist primarily of treasury futures with a notional value of $134.6 million and a one-year rate lock agreement with a notional value of $100.0 million. The treasury rate lock agreement provides for a net cash settlement in October 2011 based on the then current rate on the ten-year U.S. Treasury Note versus the agreement rate of 2.845%. As of June 30, 2011, the fair value of these positions was a recorded asset of $3.0 million. An adverse change of 10% in the underlying treasury rate would reduce income by $3.8 million, net of tax.

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 June 30, 2011. 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 June 30, 2011.

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 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		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(1)
April 1 – 30, 2011		—	$	—		—	$	113,024,228
May 1 – 31, 2011		—	$	—		—	$	113,024,228
June 1 – 30, 2011		—	$	—		—	$	113,024,228

(1) 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.

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

The annual meeting of stockholders of SEACOR was held on May 24, 2011. A brief description of each matter voted upon at that meeting and the voting results were as follows:

Description of Matter	For		Against		Withheld		Abstentions		Broker Non-Votes
1. Election of Directors:
Charles Fabrikant		18,141,302		N/A		200,345		N/A		N/A
Pierre de Demandolx		18,202,218		N/A		139,429		N/A		N/A
Richard Fairbanks		16,985,915		N/A		1,355,732		N/A		N/A
Blaine V. Fogg		18,021,557		N/A		320,090		N/A		N/A
John C. Hadjipateras		16,743,499		N/A		1,598,148		N/A		N/A
Oivind Lorentzen		18,195,246		N/A		146,401		N/A		N/A
Andrew R. Morse		14,772,398		N/A		3,569,249		N/A		N/A
Christopher Regan		18,079,639		N/A		262,008		N/A		N/A
Steven Webster		15,335,845		N/A		3,005,802		N/A		N/A
Steven J. Wisch		18,259,748		N/A		81,899		N/A		N/A
2. The approval of the compensation paid by the Company to the named executive officers.		14,995,584		2,748,038		N/A		598,025		1,041,708
4. The appointment of Ernst & Young LLP as the Company’s independent registered public accounting firm for the fiscal year ending December 31, 2011		19,227,095		151,068		N/A		5,192		N/A
	1 Year		2 Years		3 Years		Abstentions		Broker Non-Votes
3. The approval of the frequency of a shareholder vote to approve the compensation of the named executive officers.		10,890,053		46,307		6,796,992		608,296		1,041,707

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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: August 1, 2011	By:	/S/ CHARLES FABRIKANT
		Charles Fabrikant,Executive Chairman of the Board (Principal Executive Officer)
DATE: August 1, 2011	By:	/S/ RICHARD RYAN
		Richard Ryan, Senior Vice President andChief 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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