strength in diversity

aircraft operating in the United States must be registered in the United States. In order to register such aircraft
under the Aviation Acts, the Company must be owned or controlled by U.S. citizens. Although the Company’s
Certificate of Incorporation and by-laws contain provisions intended to assure compliance with these provisions
of the Shipping Acts, and also comply with the Aviation Acts, the Company would be prohibited from operating
vessels in the U.S. coastwise trade and helicopters in the United States during any period in which the Company
did not comply with these regulations.
Repeal, Amendment, Suspension or Failure to Enforce the Jones Act would result in additional
competition for Offshore Marine Services, Marine Transportation Services and Inland River Services. A
substantial portion of Offshore Marine Services’, Marine Transportation Services’ and Inland River Services’
operations are conducted in the U.S. coastwise trade. Under the Jones Act, this trade is restricted to vessels built
in the United States, owned and manned by U.S. citizens and registered under United States law. There have
been attempts to repeal or amend the Jones Act, and these attempts are expected to continue in the future. Repeal
of the Jones Act could result in additional competition from vessels built in lower-cost foreign shipyards and
owned and manned by foreign nationals with promotional foreign tax incentives and with lower wages and
benefits than U.S. citizens, which could have a material adverse effect on the Company’s business, results of
operations and financial condition.
The Outer Continental Shelf Lands Act, as amended, provides the federal government with broad
discretion in regulating the leasing of offshore resources for the production of oil and gas. Because Offshore
Marine Services’ operations rely on offshore oil and gas exploration and production, the government’s exercise
of authority under the provisions of the Outer Continental Shelf Lands Act to restrict the availability of offshore
oil and gas leases could have a material adverse effect on the Company’s financial condition and results of
operations.
Failure to maintain an acceptable safety record may have an adverse impact on the Company’s ability to
retain customers. The Company’s customers consider safety and reliability a primary concern in selecting a
service provider. The Company must maintain a record of safety and reliability that is acceptable to its
customers. Should this not be achieved, the ability to retain current customers and attract new customers may be
adversely affected.
Operational risks could disrupt operations and expose the Company to liability. The operation of offshore
support vessels, tankers, tugs, helicopters and emergency response vessels and barges is subject to various risks,
including catastrophic disaster, adverse weather, mechanical failure and collision. Additional risks relating to the
operation of helicopters include harsh weather and marine conditions, mechanical failures, crashes and collisions,
which may result in personal injury, loss of life, damage to property and equipment and suspension or reduction
of operations. The Company’s aircraft have been involved in accidents in the past, some of which have included
loss of life and property damage. The Company may experience similar accidents in the future. Additional risks
to vessels include adverse sea conditions, capsizing, grounding, oil and hazardous substance spills and navigation
errors. These risks could endanger the safety of the Company’s personnel, equipment, cargo and other property,
as well as the environment. If any of these events were to occur, the Company could be held liable for resulting
damages, including loss of revenues from or termination of charter contracts, higher insurance rates, and damage
to the Company’s reputation and customer relationships. In addition, the affected vessels or helicopters could be
removed from service and would not be available to generate revenues.
Revenues from Aviation Services are subject to adverse weather conditions and seasonality. A significant
portion of the Company’s revenues from Aviation Services is dependent on actual flight hours. Prolonged
periods of adverse weather, storms and the effect of fewer hours of daylight adversely impact Aviation Services.
Winter months generally have more days of adverse weather conditions than the other months of the year with
poor visibility, high winds, heavy precipitation and fewer daylight hours, all of which adversely affect helicopter
operations. June through November is tropical storm season in the U.S. Gulf of Mexico; during tropical storms,
helicopters are unable to operate in the area of a storm. In addition, many of Aviation Services’ facilities are
located along the U.S. Gulf of Mexico coast, and tropical storms may cause damage to its property.
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