SEACOR HOLDINGS INC /NEW/ (Form: 10-K, Received: 03/03/2014 17:11:00)

United States

SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549

FORM 10-K

ANNUAL REPORT

PURSUANT TO SECTIONS 13 OR 15(d) OF THE

SECURITIES EXCHANGE ACT OF 1934

(Mark One)

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

For the fiscal year ended December 31, 2013

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)		(I.R.S. Employer Identification No.)

2200 Eller Drive, P.O. Box 13038, Fort Lauderdale, Florida		33316
(Address of Principal Executive Offices)		(Zip Code)

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

Securities registered pursuant to Section 12(b) of the Act:

Title of Each Class		Name of Each Exchange on Which Registered
Common Stock, par value $.01 per share		New York Stock Exchange

Securities registered pursuant to Section 12(g) of the Act:

None

(Title of Class)

Indicate by check mark if the registrant is a well-known seasoned issuer, as defined in Rule 405 of the Securities Act. ý Yes ¨ No

Indicate by check mark if the registrant is not required to file reports pursuant to Section 13 or Section 15(d) of the Act. ¨ Yes ý No

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 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. ý Yes ¨ 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). ý Yes ¨ No

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

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 ý No

The aggregate market value of the voting stock of the registrant held by non-affiliates as of June 30, 2013 was approximately $1,564,670,305 based on the closing price on the New York Stock Exchange on such date. The total number of shares of Common Stock issued and outstanding as of February 26, 2014 was 20,388,850 .

DOCUMENTS INCORPORATED BY REFERENCE

Portions of the Registrant’s definitive proxy statement for its 2014 Annual Meeting of Stockholders to be filed with the Securities and Exchange Commission (the “Commission”) pursuant to Regulation 14A within 120 days after the end of the Registrant’s last fiscal year is incorporated by reference into Part III of this Annual Report on Form 10-K.

Table of Contents

SEACOR HOLDINGS INC.

FORM 10-K

TABLE OF CONTENTS




	PART I

Item 1.	Business	1

	General	1

	Segment and Geographic Information	1

	Offshore Marine Services	2

	Inland River Services	8

	Shipping Services	12

	Illinois Corn Processing	15

	Other	15

	Government Regulation	16

	Industry Hazards and Insurance	26

	Employees	26

Item 1A.	Risk Factors	26

Item 1B.	Unresolved Staff Comments	35

Item 2.	Properties	36

Item 3.	Legal Proceedings	36

Item 4.	Mine Safety Disclosures	39

	Executive Officers of the Registrant	39

	PART II

Item 5.	Market for Registrant’s Common Equity, Related Stockholder Matters and Issuer Purchases of Equity Securities	40

	Market for the Company’s Common Stock	40

	Performance Graph	41

	Issuer Repurchases of Equity Securities	42

Item 6.	Selected Financial Data	43

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Item 7.	Management’s Discussion and Analysis of Financial Condition and Results of Operations	44

	Consolidated Results of Operations	44

	Liquidity and Capital Resources	63

	Effects of Inflation	68

	Contingencies	68

	Related Party Transactions	72

	Critical Accounting Policies and Estimates	72

Item 7A.	Quantitative and Qualitative Disclosures About Market Risk	75

Item 8.	Financial Statements and Supplementary Data	76

Item 9.	Changes in and Disagreements with Accountants on Accounting and Financial Disclosure	76

Item 9A.	Controls and Procedures	76

Item 9B.	Other Information	77

	PART III

Item 10.	Directors, Executive Officers and Corporate Governance	78

Item 11.	Executive Compensation	78

Item 12.	Security Ownership of Certain Beneficial Owners and Management and Related Stockholder Matters	78

Item 13.	Certain Relationships and Related Transactions, and Director Independence	78

Item 14.	Principal Accounting Fees and Services	79

	PART IV

Item 15.	Exhibits, Financial Statement Schedules	79

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FORWARD-LOOKING STATEMENTS

Certain statements discussed in Item 1 (Business), Item 1A (Risk Factors), Item 3 (Legal Proceedings), Item 7 (Management’s Discussion and Analysis of Financial Condition and Results of Operations), Item 7A (Quantitative and Qualitative Disclosures About Market Risk) and elsewhere in this Annual Report on Form 10-K as well as in other materials and oral statements that the Company releases from time to time to the public constitute “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 significant 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 are discussed in Item 1A (Risk Factors). In addition, these statements constitute the Company’s cautionary statements under the Private Securities Litigation Reform Act of 1995. It should be understood that it is not possible to predict or identify all such factors. Consequently, the following should not be considered to be a complete discussion of all potential risks or uncertainties. The words “anticipate,” “estimate,” “expect,” “project,” “intend,” “believe,” “plan,” “target,” “forecast” 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. It is advisable, however, to consult any further disclosures the Company makes on related subjects in its Quarterly Reports on Form 10-Q and Current Reports on Form 8-K filed with the Securities and Exchange Commission.

PART I



ITEM 1.	BUSINESS

General

Unless the context indicates otherwise, the terms “we,” “our,” “ours,” “us” and the “Company” refer to SEACOR Holdings Inc. and its consolidated subsidiaries. “SEACOR” refers to SEACOR Holdings Inc., incorporated in 1989 in Delaware. “Common Stock” refers to the common stock, par value $.01 per share, of SEACOR. The Company’s fiscal year ended on December 31, 2013 .

SEACOR’s principal executive office is located at 2200 Eller Drive, P.O. Box 13038, Fort Lauderdale, Florida 33316, and its telephone number is (954) 523-2200. SEACOR’s website address is www.seacorholdings.com . The reference to SEACOR’s website is not intended to incorporate the information on the website into this Annual Report on Form 10-K.

The Company’s Corporate Governance policies, including the Board of Directors’ Audit Committee, Compensation Committee and Nominating and Corporate Governance Committee charters are available, free of charge, on SEACOR’s website or in print for stockholders.

All of the Company’s periodic report filings with the Securities and Exchange Commission (“SEC”) pursuant to Section 13(a) or 15(d) of the Securities Exchange Act of 1934, as amended, are available, free of charge, on SEACOR’s website, including its Annual Reports on Form 10-K, Quarterly Reports on Form 10-Q, Current Reports on Form 8-K and any amendments to those reports. These reports and amendments are available on SEACOR’s website as soon as reasonably practicable after the Company electronically files the reports or amendments with the SEC. They are also available at the SEC’s Public Reference Room at 100 F Street, N.E., Washington, D.C. 20549. Information as to the operation of the SEC’s Public Reference Room can be obtained by calling the SEC at 1-800-SEC-0330. The SEC maintains a website (www.sec.gov) that contains reports, proxy and information statements and other information.

Segment and Geographic Information

SEACOR and its subsidiaries are in the business of owning, operating, investing in and marketing equipment, primarily in the offshore oil and gas, shipping and logistics industries. The Company conducts its activities in the following reporting segments:


•	Offshore Marine Services


•	Inland River Services


•	Shipping Services


•	Illinois Corn Processing


•	Other

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Discontinued Operations

SEACOR Environmental Services Inc. ("SES") included National Response Corporation ("NRC"), a provider of oil spill response services in the United States; NRC Environmental Services Inc., a provider of environmental and industrial services on the West Coast of the United States; SEACOR Response Ltd., a provider of oil spill response and emergency response services to customers in international markets; and certain other subsidiaries (collectively the “SES Business”). On March 16, 2012, the Company sold the SES Business (the "SES Business Transaction") to J.F. Lehman & Company ("JFL"), a leading, middle-market private equity firm. For all periods presented herein, the Company has reported the historical financial position, results of operations and cash flows of the SES Business as discontinued operations.

On December 31, 2012, the Company sold SEACOR Energy Inc. ("SEI"), its energy commodity and logistics business, to Par Petroleum Corporation. For all periods presented herein, the Company has reported the historical financial position, results of operations and cash flows of SEI as discontinued operations.

In prior annual filings, the Company reported its helicopter operations under Aviation Services. On January 31, 2013, the Company completed the spin-off ("Spin-off") of Era Group Inc. ("Era Group"), the company that operated SEACOR's Aviation Services business segment, by means of a dividend to SEACOR's stockholders of all the issued and outstanding common stock of Era Group. Era Group filed a Registration Statement on Form 10 with the SEC, describing the Spin-off, that was declared effective on January 14, 2013. Prior to the Spin-off, SEACOR and Era Group entered into a Distribution Agreement and several other agreements that govern the post-Spin-off relationship. Era Group is an independent company whose common stock is listed on the New York Stock Exchange under the symbol "ERA." For all periods presented herein, the Company has reported the historical financial position, results of operations and cash flows of Era Group as discontinued operations.

Offshore Marine Services

Business

Offshore Marine Services operates a diverse fleet of support vessels primarily servicing offshore oil and gas exploration, development and production facilities worldwide. The vessels deliver cargo and personnel to offshore installations; handle anchors and mooring equipment required to tether rigs to the seabed; tow rigs and assist in placing them on location and moving them between regions; and carry and launch equipment such as remote operated vehicles or “ROVs” used underwater in drilling, well-completion and emergencies. In addition to supporting drilling activities, Offshore Marine Services' vessels support offshore construction and maintenance work, provide accommodations for technicians and specialists, and provide standby safety support and emergency response services. Offshore Marine Services also operates a fleet of lift boats in the U.S. Gulf of Mexico supporting well intervention, work-over, decommissioning and diving operations and has a controlling interest in a business that owns and operates vessels primarily used to move personnel and supplies to offshore wind farms. In addition, Offshore Marine Services offers logistics services in support of offshore oil and gas exploration, development and production operations, including shore bases, marine transport and other supply chain management services. Offshore Marine Services contributed 45% , 40% and 36% of consolidated operating revenues in 2013 , 2012 and 2011 , respectively.

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Equipment and Services

The following tables identify the types of vessels that comprise Offshore Marine Services’ fleet as of December 31 for the indicated years. “Owned” are majority owned by the Company. “Joint Ventured” are owned by entities in which the Company does not have a controlling interest. “Leased-in” may either be vessels contracted from leasing companies to which the Company may have sold such vessels, or vessels chartered-in from other third party owners. “Pooled” are owned by entities not affiliated with Offshore Marine Services with the revenues or results of operations of these vessels being shared with the revenues or results of operations of certain vessels of similar type owned by Offshore Marine Services based upon an agreed formula. “Managed” are owned by entities not affiliated with the Company but operated by Offshore Marine Services for a fee. See Glossary of Vessel Types below for an explanation of the services they perform.



						Owned Fleet
	Owned	Joint Ventured	Leased-in	Pooled or Managed	Total	Average Age	U.S.- Flag	Foreign- Flag
2013
Anchor handling towing supply	14	1	3	—	18	13	11	3
Crew	25	7	7	3	42	12	10	15
Mini-supply	4	2	2	—	8	13	—	4
Standby safety	24	1	—	—	25	33	—	24
Supply	9	5	9	4	27	11	4	5
Towing supply	2	1	—	—	3	11	—	2
Specialty	3	5	—	4	12	18	1	2
Liftboats	14	—	1	—	15	11	14	—
Wind farm utility	32	2	—	—	34	5	—	32
	127	24	22	11	184	14	40	87
2012
Anchor handling towing supply	14	2	3	—	19	12	11	3
Crew	30	7	7	3	47	13	15	15
Mini-supply	5	2	2	—	9	12	1	4
Standby safety	24	1	—	—	25	32	—	24
Supply	10	2	9	5	26	9	4	6
Towing supply	2	1	—	—	3	10	—	2
Specialty	4	3	—	3	10	16	1	3
Liftboats	18	2	—	—	20	15	18	—
Wind farm utility	29	—	1	—	30	4	—	29
	136	20	22	11	189	14	50	86
2011
Anchor handling towing supply	14	2	3	—	19	11	12	2
Crew	32	7	7	3	49	12	17	15
Mini-supply	5	1	2	—	8	11	1	4
Standby safety	25	1	—	—	26	31	—	25
Supply	10	—	10	10	30	9	6	4
Towing supply	2	1	2	—	5	9	—	2
Specialty	3	3	—	3	9	15	—	3
Liftboats	—	2	—	—	2	—	—	—
Wind farm utility	28	—	1	—	29	3	—	28
	119	17	25	16	177	14	36	83

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Glossary of Vessel Types

Anchor handling towing supply (“AHTS”) vessels are used primarily to support offshore drilling activities in the towing, positioning and mooring of drilling rigs and other marine equipment. AHTS vessels are also used to transport supplies and equipment from shore bases to offshore drilling rigs, platforms and other installations. The defining characteristics of AHTS vessels are horsepower (“bhp”), size of winch in terms of “line pull” and wire storage capacity. Offshore Marine Services’ fleet of AHTS vessels has varying capabilities and supports offshore mooring activities in water depths ranging from 300 to 8,000 feet. Most modern AHTS vessels are equipped with dynamic positioning (“DP”) systems ¹ to enable them to maintain a fixed position in close proximity to a rig or platform. As of December 31, 2013 , eight of the 14 owned AHTS vessels were equipped with DP-2 and two were equipped with DP.

Crew boats are used primarily to move cargo and personnel to and from offshore drilling rigs, platforms and other installations. Historically, crew boats transported people and were also used to deliver “light” cargo such as personal effects, small machinery and small quantities of fuel and water. These boats also served as field standby vessels, moving personnel between platforms and providing emergency stand-by services. Older crew boats are generally 100 to 130 feet in length and are capable of 20 knots speed in light conditions and calm seas. Vessels built since 1998, also referred to as Fast Support Vessels (“FSVs”), range from 130 to 200 feet in length and are capable of speeds between 25 and 35 knots and have enhanced cargo carrying capacities enabling them to support both drilling operations and production services. Newer FSVs support deepwater drilling and production and are equipped with DP-2, firefighting equipment and ride control systems for greater comfort and performance. As of December 31, 2013 , five of the 25 owned crew vessels were equipped with DP-2 and five were equipped with DP.

Mini-supply vessels are approximately 145 to 165 feet in length and typically carry deck cargo, liquid mud, methanol, diesel fuel and water. These vessels are typically used to support construction projects, maintenance work, certain drilling support activities and production support. In this vessel class, the new generation of vessels is also equipped with DP capability. As of December 31, 2013 , three of the four owned mini-supply vessels were equipped with DP.

Standby safety vessels typically remain on location proximate to offshore rigs and production facilities to respond to emergencies. These vessels carry special equipment to rescue personnel and are equipped to provide first aid and shelter. These vessels sometimes perform a dual role, also functioning as supply vessels.

Supply vessels and towing supply vessels are generally more than 200 feet in length and are used to deliver cargo to rigs and platforms where drilling and work-over activity is underway or to support construction work by delivering pipe to vessels performing underwater installations. Supply vessels are distinguished from other vessels by the total carrying capacity (expressed as deadweight: “dwt”), available area of clear deck space, below-deck capacity for storage of mud and cement used in the drilling process and tank storage for water and fuel oil. Larger supply vessels usually have deck fittings to assist in handling cargo and are often fitted with a crane. The ability to hold station in open water and moderately rough seas is a key factor in differentiating supply vessels. To improve station keeping ability, most modern supply vessels have DP capabilities. Accommodations are also an important feature of supply vessels. As drilling becomes more complex, supply vessels often house third-parties who are specialists in various phases of the drilling process. Towing supply vessels perform similar cargo delivery functions to those handled by supply vessels. They are, however, equipped with more powerful engines (4,000 – 8,000 bhp) and winches, giving them the added capability to perform general towing functions, buoy setting and limited anchor handling work. As of December 31, 2013 , four of the eleven owned supply and towing vessels were equipped with DP-2 and three were equipped with DP.

Specialty vessels include anchor handling tugs, accommodation, line handling and other vessels. These vessels generally have specialized features adapting them to specific applications including offshore maintenance and construction services, freight hauling services and accommodation services.

Liftboats provide a self-propelled, stable platform to perform production platform construction, inspection, maintenance and removal; well intervention and work-over; well plug and abandonment; pipeline installation and maintenance; and diving operations . Lift boats are categorized by the length of their jacking legs (160 ft. to 265 ft. for the Company's lift boats), which determines the water depth in which these vessels can work. Secondary features are crane lifting capacity and reach, clear deck area, electrical generating power and accommodation capacity.

Wind farm utility vessels are used primarily to move personnel and supplies to offshore wind farms. There are two main types of vessels; Windcats and Windspeeds. The Windcat series feature a catamaran hull with flush foredeck, providing a stable platform from which personnel can safely transfer to turbine towers, and are capable of speeds between 25 and 31 knots. The Windspeed series are rapid response vessels with a maximum speed of 38 knots, which are used for light work during the construction and operational periods of offshore wind farms. All the wind farm utility vessels have been built since 2004.

______________________



1		The most technologically advanced DP systems have enhanced redundancy in the vessel’s power, electrical, computer and reference systems enabling vessels to maintain accurate position-keeping even in the event of failure of one of those systems (“DP-2”) and, in some cases, additionally in the event of fire and flood (“DP-3”).

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As of December 31, 2013 , in addition to its existing fleet, Offshore Marine Services had new construction projects in progress including eleven U.S.-flag, DP-2 FSVs scheduled for delivery between the first quarter of 2014 and the first quarter of 2016; three U.S.-flag, DP-2 supply vessels for delivery between the second quarter of 2014 and second quarter of 2015, which are to be sold to SEACOR OSV Partners I LP, a 50% or less owned company, upon delivery; and two foreign-flag wind farm utility vessels scheduled for delivery during the first half of 2014.

Markets

The demand for vessels supporting the offshore oil and gas industry is affected by the level of exploration and drilling activities, which in turn is influenced by a number of factors including:


•	expectations as to future oil and gas commodity prices;


•	customer assessments of offshore drilling prospects compared with land-based opportunities;


•	customer assessments of cost, geological opportunity and political stability in host countries;


•	worldwide demand for oil and natural gas;


•	the ability of The Organization of Petroleum Exporting Countries (“OPEC”) to set and maintain production levels and pricing;


•	the level of production of non-OPEC countries;


•	the relative exchange rates for the U.S. dollar; and


•	various United States and international government policies regarding exploration and development of oil and gas reserves.

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Offshore Marine Services operates vessels in six principal geographic regions. From time to time, vessels are relocated between these regions to meet customer demand for equipment. The table below sets forth vessel types by geographic market as of December 31 for the indicated years. Offshore Marine Services sometimes participates in joint venture arrangements in certain geographical locations in order to enhance marketing capabilities and facilitate operations in certain foreign markets allowing for the expansion of its fleet and operations while diversifying risks and reducing capital outlays associated with such expansion.



	2013	2012	2011
United States, primarily U.S. Gulf of Mexico:
Anchor handling towing supply	8	12	12
Crew	16	21	24
Mini-supply	2	3	3
Supply	12	9	9
Towing supply	—	—	2
Specialty	1	1	2
Liftboats	15	20	—
	54	66	52
Africa, primarily West Africa:
Anchor handling towing supply	5	5	5
Crew	8	8	8
Mini-supply	2	2	2
Supply	3	3	3
Towing supply	2	2	2
Specialty	3	2	2
	23	22	22
Middle East:
Anchor handling towing supply	1	1	—
Crew	7	7	7
Mini-supply	2	2	2
Supply	3	3	3
Specialty	4	2	2
	17	15	14
Brazil, Mexico, Central and South America:
Anchor handling towing supply	3	—	1
Crew	7	7	6
Mini-supply	2	2	1
Supply	8	9	14
Specialty	3	4	4
	23	22	26
Europe, primarily North Sea:
Standby safety	25	25	26
Wind farm utility	34	30	29
	59	55	55
Asia:
Anchor handling towing supply	1	1	1
Crew	4	4	4
Supply	1	2	1
Towing Supply	1	1	1
Specialty	1	1	1
	8	9	8
Total Foreign Fleet	130	123	125
Total Fleet	184	189	177

United States, primarily U.S. Gulf of Mexico. As of December 31, 2013 , 54 vessels were operating in the U.S. Gulf of Mexico, including 33 owned, 17 leased-in, two joint ventured and two pooled. Offshore Marine Services’ expertise in this market is deepwater anchor handling with its fleet of AHTS vessels and exploration and production support with its fleet of crew and mini-supply vessels. Over the last few years, the market has split between the traditional shallow water shelf and the deepwater markets. In both markets, customers focus on price once they have identified a reliable operator who can provide available vessels with suitable capabilities for the job. Offshore Marine Services also operates a fleet of lift boats in the U.S. Gulf of Mexico supporting well intervention, work-over, decommissioning and diving operations.

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Africa, primarily West Africa. As of December 31, 2013 , 23 vessels were operating in West Africa, including twelve owned, three leased-in, five joint ventured, one pooled and two managed. Offshore Marine Services' vessels operating in this area generally support large-scale, multi-year projects for major oil companies, primarily in Angola and Ghana. The other vessels in this region operate from ports in the Republic of the Congo and Gabon.

Middle East. As of December 31, 2013 , 17 vessels were operating in the Middle East region, including twelve owned, three joint ventured and two managed. Offshore Marine Services’ vessels operating in this area generally support activities in Azerbaijan, Egypt and countries along the Arabian Gulf and Arabian Sea, including the United Arab Emirates and Qatar.

Brazil, Mexico, Central and South America. As of December 31, 2013 , eight vessels were operating in Brazil, including four owned and four managed and 13 vessels were operating in Mexico, including two owned, two leased-in and nine joint ventured. In addition, two owned vessels were operating in Venezuela.

Europe, primarily North Sea. As of December 31, 2013 , 59 vessels were operating in the North Sea, including 56 owned and three joint ventured. The North Sea fleet provides standby safety and supply services. Demand in the North Sea market for standby services developed in 1991 after the United Kingdom passed legislation requiring offshore operators to maintain higher specification standby safety vessels. The legislation requires a vessel to “stand by” to provide a means of evacuation and rescue for platform and rig personnel in the event of an emergency at an offshore installation. Demand for wind farm utility vessels has developed as a result of the recent growth in offshore wind turbines in the North Sea.

Asia. As of December 31, 2013 , eight vessels were operating in Asia, including six owned and two joint ventured. Offshore Marine Services’ vessels operating in this area generally support exploration programs. To date, Offshore Marine Services’ largest markets in this area have been Vietnam and Indonesia.

Seasonality

The demand for Offshore Marine Services' liftboat fleet is seasonal with peak demand normally occurring during the summer months. As a consequence of this seasonality, the Company typically schedules drydockings or other repair and maintenance activity during the winter months.

Customers and Contractual Arrangements

The Offshore Marine Services segment earns revenues primarily from the time charter and bareboat charter of vessels to customers based upon daily rates of hire. Under a time charter, Offshore Marine Services provides a vessel to a customer and is responsible for all operating expenses, typically excluding fuel. Under a bareboat charter, Offshore Marine Services provides a vessel to a customer and the customer assumes responsibility for all operating expenses and all risk of operation. Vessel charters may range from several days to several years. In the U.S. Gulf of Mexico, time charter durations and rates are typically established in the context of master service agreements that govern the terms and conditions of charter.

Offshore Marine Services’ principal customers are major integrated oil companies, large independent oil and gas exploration and production companies and emerging independent companies. Consolidation of oil and gas companies through mergers and acquisitions over the past several years has reduced Offshore Marine Services’ customer base. In 2013 , no single customer of Offshore Marine Services was responsible for 10% or more of consolidated operating revenues. The ten largest customers of Offshore Marine Services accounted for approximately 55% of Offshore Marine Services’ operating revenues in 2013 . The loss of one or a few of these customers could have a material adverse effect on Offshore Marine Services’ results of operations.

Competitive Conditions

Each of the markets in which Offshore Marine Services operates is highly competitive. The most important competitive factors are pricing and the availability and specifications of equipment to fit customer requirements. Other important factors include service, reputation, flag preference, local marine operating conditions, the ability to provide and maintain logistical support given the complexity of a project and the cost of moving equipment from one geographical location to another.

Offshore Marine Services has numerous competitors in each of the geographical regions in which it operates, ranging from international companies that operate in many regions to smaller local companies that typically concentrate their activities in one specific region.

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Risks of Foreign Operations

For the years ended December 31, 2013 , 2012 and 2011 , 52% , 56% and 69% , respectively, of Offshore Marine Services’ operating revenues were derived from its foreign operations.

Foreign operations are subject to inherent risks, which, if they materialize, could have a material adverse effect on Offshore Marine Services’ financial position and its results of operations. See the risk factor regarding “Risks from the Company’s international operations” in “Item 1A. Risk Factors.”

Inland River Services

Business

Inland River Services owns, operates, invests in and markets river transportation equipment primarily used for moving agricultural and industrial commodities and chemical and petrochemical products, on the U.S. Inland River Waterways, primarily the Mississippi River, Illinois River, Tennessee River, Ohio River and their tributaries and the Gulf Intracoastal Waterways. Internationally, Inland River Services has operations on the Magdalena River in Colombia and noncontrolling interests in operations on the Parana-Paraguay River Waterways and in a transshipment terminal at the Port of Ibicuy, Argentina. In addition to its primary barge business, Inland River Services also owns, operates and invests in high-speed multi-modal terminal facilities for both dry and liquid commodities and provides a broad range of services including machine shop, gear and engine repairs and the repair and drydocking of barges and towboats at strategic locations on the U.S. Inland River Waterways. Inland River Services contributed 17% , 17% and 18% of consolidated operating revenues in 2013 , 2012 and 2011 , respectively.

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Equipment and Services

The following tables identify the types of equipment that comprise Inland River Services’ fleet as of December 31 for the indicated years. “Owned” are majority owned by the Company. “Joint Ventured” are owned by entities in which the Company does not have a controlling interest. “Leased-in” are leased-in under operating leases. “Pooled or Managed” are owned by entities not affiliated with Inland River Services with operating revenues and voyage expenses pooled with certain barges of similar type owned by Inland River Services and the net results allocated to participants based upon the number of days the barges participate in the pool or are owned by entities not affiliated with the Company but operated by Inland River Services for a fee. For “Pooled” barges, each barge owner is responsible for the costs of insurance, maintenance and repair as well as for capital and financing costs of its own equipment in the pool.



	Owned ⁽¹⁾	Joint Ventured	Leased-in	Pooled or Managed	Total
2013
Inland river dry cargo barges	667	172	2	564	1,405
Inland river liquid tank barges	65	—	8	1	74
Inland river deck barges	20	—	—	—	20
Inland river towboats
4,000 hp - 6,250 hp	4	13	—	—	17
3,300 hp - 3,900 hp	1	—	—	—	1
Less than 3,200 hp	12	2	—	—	14
Dry cargo vessel ⁽²⁾	—	1	—	—	1
	769	188	10	565	1,532
2012
Inland river dry cargo barges	683	172	2	587	1,444
Inland river liquid tank barges	73	—	—	8	81
Inland river deck barges	20	—	—	—	20
Inland river towboats
4,000 hp - 6,250 hp	3	13	—	—	16
3,300 hp - 3,900 hp	1	—	—	—	1
Less than 3,200 hp	12	2	—	—	14
Dry cargo vessel ⁽²⁾	—	1	—	—	1
	792	188	2	595	1,577
2011
Inland river dry cargo barges	689	172	2	633	1,496
Inland river liquid tank barges	69	—	—	8	77
Inland river deck barges	20	—	—	—	20
Inland river towboats
4,000 hp - 6,250 hp	3	13	—	—	16
3,300 hp - 3,900 hp	1	—	—	—	1
Less than 3,200 hp	12	2	—	—	14
Dry cargo vessel ⁽²⁾	—	1	—	—	1
	794	188	2	641	1,625

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(1)	Excludes three dry cargo barges and two towboats delivered in 2011 but not operational until 2012.


(2)	Argentine-flag.

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The table below sets forth equipment types by geographic market as of December 31 for the indicated years.



	2013	2012	2011
United States:
Inland river dry cargo barges	1,227	1,266	1,318
Inland river liquid tank barges	70	77	73
Inland river deck barges	20	20	20
Inland river towboats
4,000 hp – 6,250 hp	10	9	9
3,300 hp – 3,900 hp	1	1	1
Less than 3,200 hp	10	10	12
	1,338	1,383	1,433
South America:
Inland river dry cargo barges	178	178	178
Inland river liquid tank barges	4	4	4
Inland river towboats
4,000 hp – 6,250 hp	7	7	7
1,700 hp – 3,200 hp	3	3	2
Less than 3,200 hp	1	1	—
Dry-cargo vessel	1	1	1
	194	194	192
	1,532	1,577	1,625

As of December 31 of the indicated year, the average age (in years) of Inland River Services’ owned and joint ventured fleet was as follows:



	2013	2012	2011
Dry cargo barges	9	7	6
Liquid tank barges – 10,000 barrel	15	14	15
Liquid tank barges – 30,000 barrel	11	9	11
Deck barges	6	5	4
Towboats ⁽¹⁾	39	37	37

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(1)	Towboats have been upgraded and maintained to meet or exceed current industry standards.

Inland barges are unmanned and are moved by towboats. The combination of a towboat and dry cargo barges is commonly referred to as a “tow.” The Inland River Services dry cargo fleet consists of hopper barges, which can be “open tops” for the transport of commodities that are not sensitive to water such as coal, aggregate and scrap, or covered for the transport of products such as grain, ores, alloys, cements and fertilizer. Each dry cargo barge in the Inland River Services’ fleet is capable of transporting approximately 1,500 to 2,000 tons (1,350 to 1,800 metric tons) of cargo. The carrying capacity of a barge at any particular time is determined by water depth in the river channels and hull depth of the barge. Adverse river conditions, such as high water resulting from excessive rainfall or low water caused by drought, can also impact operations by limiting the speed at which tows travel, the number of barges included in tows and the quantity of cargo that is loaded in the barges.

A typical dry cargo voyage begins by shifting a clean, empty barge from a fleeting location to a loading facility. The barge is then moved from the loading location and assembled into a tow before proceeding to its discharge destination. After unloading, it is shifted to a fleeting area for cleaning and service, if needed, before being placed again at a load facility. Typically, grain cargoes move southbound and non-grain cargoes move northbound. Generally, Inland River Services attempts to coordinate the logistical match-up of northbound and southbound movements of cargo to minimize repositioning costs.

Inland River Services’ fleet of 10,000 barrel liquid tank barges transport liquid bulk commodities such as lube oils and chemical products. The operations of these barges are similar to those of the dry cargo barges described above. Inland River Services’ fleet of 30,000 barrel liquid tank barges transport refined petroleum products and heavy and light petroleum products and are normally chartered-out as “unit tows” consisting of two to three barges along with a towboat working in patterns prescribed by the customer. Inland River Services is responsible for providing manpower for the towboats working in such operations.

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As of December 31, 2013 , in addition to its existing fleet, Inland River Services had new construction projects in progress for six 30,000 barrel liquid tank barges, five inland river towboats and 80 covered hopper barges all scheduled for delivery in 2014 and the first quarter of 2015.

Markets

The market for Inland River Services is driven by supply and demand economics, which impacts prices, utilization and margins achieved by Inland River Services’ assets. The relationship between supply and demand reflects many factors, including:


•	the level of domestic and international production of the basic agricultural products to be transported (in particular, the yield from grain harvests);


•	the level of domestic and international consumption of agricultural products and the effect of these levels on the volumes of products that are physically moved into the export markets;


•	the level of domestic and worldwide demand for iron ore, steel, steel by-products, coal, ethanol, petroleum and other bulk commodities;


•	the strength or weakness of the U.S. dollar;


•	the cost of ocean freight and fuel; and


•	the potential for epidemic like viruses that impact food stock movements on the inland waterways.

Within the United States and international markets, other local factors also have an effect on pricing and margins, including:


•	the supply of barges available to move the products;


•	the availability of qualified wheelhouse personnel;


•	the ability to position the barges to maximize efficiencies and utility in moving cargoes both northbound and southbound;


•	the cost of alternative forms of transportation (primarily rail) and capacities at export facilities;


•	general operating logistics on the river network including size and operating status of locks and dams;


•	the effect of river levels on the loading capacities of the barges in terms of draft restrictions; and


•	foreign and domestic laws and regulations.

Seasonality

During harsh winters the upper Mississippi River usually closes to barge traffic from mid-December to mid-March. Ice often hinders the navigation of barge traffic on the mid-Mississippi River, the Illinois River and the upper Ohio River during the same period. The volume of grain transported from the Midwest to the U.S. Gulf of Mexico, which is primarily for export, is greatest during the harvest season from mid-August through late November. The harvest season is particularly significant to Inland River Services because pricing tends to peak during these months in response to higher demand for equipment.

Customers and Contractual Arrangements

The principal customers for Inland River Services are major agricultural companies, major integrated oil companies and industrial companies. In 2013 , no single customer of Inland River Services was responsible for 10% or more of consolidated operating revenues. The ten largest customers of Inland River Services accounted for approximately 60% of Inland River Services’ revenues in 2013 . The loss of one or a few of its customers could have a material adverse effect on Inland River Services’ results of operations.

Most of Inland River Services’ dry cargo barges are employed under contracts of affreightment that can vary in duration, ranging from one voyage to several years. For longer term contracts, base rates may be adjusted in response to changes in fuel prices and operating expenses. Some longer term contracts provide for the transport of a minimum number of tons of cargo or specific transportation requirements for a particular customer. Some barges are bareboat chartered-out to third parties for a fixed payment of hire per day for the duration of the charter. These contracts tend to be longer, ranging in term from one to five years.

Inland River Services generally charges a price per ton for point to point transportation of dry bulk commodities. Customers are permitted a specified number of days to load and discharge the cargo and thereafter pay a per diem demurrage rate for extra time. From time to time, dry cargo barges may be used for storage for a period prior to delivery.

Inland River Services’ 10,000 barrel liquid tank barges are either chartered-out on term contracts ranging from one to five years or marketed in the spot market.

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Inland River Services’ 30,000 barrel liquid tank barges are either marketed as unit tows under term contracts ranging from one to two years or in the spot market.

Inland River Services' tank farm and dry-bulk handling facilities and its noncontrolling interest in a transshipment terminal at the Port of Ibicuy, Argentina are marketed on a tariff system driven by throughput volume.

Inland River Services' fleeting operations generally charge a day rate for fleeting and a per shift fee for handling to and from docks and cleaning and repair facilities.

Inland River Services' machine shop, gear and engine repairs, and repairs of towboats and barges are charged either on an hourly basis or on a fixed fee basis depending on the scope and nature of work.

Competitive Conditions

Generally, Inland River Services believes the primary barriers to effective competitive entry into the U.S. Inland River Waterways markets are the complexity of operations, the consolidation of the inland river towing industry and the difficulty in assembling a large enough fleet and an experienced staff to execute voyages efficiently and re-position barges effectively to optimize their use. The primary competitive factors among established operators are price, availability and reliability of barges and equipment of a suitable type and condition for a specific cargo.

Inland River Services’ main competitors are other barge lines. Railroads and liquid pipelines also compete for traffic that might otherwise move on the U.S. Inland River Waterways.

The Company believes that 70% of the domestic dry cargo fleet is controlled by five companies and 57% of the domestic liquid barge industry fleet is controlled by five companies.

Risks of Foreign Operations

Inland River Services’ foreign operations primarily consist of its operations on the Magdalena River in Colombia and noncontrolling interests in operations on the Parana-Paraguay River Waterways and in a transshipment terminal at the Port of Ibicuy, Argentina.

Foreign operations are subject to inherent risks, which, if they materialize, could have a material adverse effect on Inland River Services’ financial position and its results of operations. See the risk factor regarding “Risks from the Company’s international operations” in “Item 1A. Risk Factors.”

Shipping Services

Business

Shipping Services invests in, operates and leases a diversified fleet of U.S.-flag and foreign-flag marine transportation related assets, including deep-sea cargo vessels primarily servicing the U.S. coastwise petroleum trade, harbor tugs servicing vessels docking in the U.S. Gulf and East Coast ports and foreign-flag Very Large Gas Carriers ("VLGC's") through its noncontrolling investment in Dorian LPG. Additional assets and services include liner and short-sea transportation to and from ports in Florida, Puerto Rico, the Bahamas and Western Caribbean, a terminal support and bunkering operation in St. Eustatius, a U.S.-flag articulated tug and dry-bulk barge operating on the Great Lakes and technical ship management services. Shipping Services contributed 16% , 14% and 16% of consolidated operating revenues in 2013 , 2012 and 2011 , respectively.

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Equipment and Services

The following tables identify the types of equipment that comprise Shipping Services' fleet as of December 31 for the indicated years. "Owned” are owned by Shipping Services. “Joint Ventured” are owned by entities in which Shipping Services does not have a controlling interest. “Leased-in” are leased-in under operating leases.



	Owned	Joint Ventured	Leased-in	Total
2013
U.S.-flag:
Product tanker ⁽¹⁾	5	—	2	7
RORO/Deck barges	—	7	—	7
Dry bulk articulated tug-barge	—	1	—	1
Harbor tugs	15	—	9	24
Ocean liquid tank barges	5	—	—	5
Foreign-flag:
Harbor tugs	4	—	—	4
Very large gas carriers	—	3	—	3
Short Sea Container/RORO	8	—	—	8
	37	11	11	59
2012
U.S.-flag:
Product tanker ⁽¹⁾	5	—	2	7
RORO/Deck barges	—	7	—	7
Dry bulk articulated tug-barge	—	1	—	1
Harbor tugs	19	—	3	22
Ocean liquid tank barges	5	—	—	5
Foreign-flag:
Harbor tugs	4	—	—	4
Very large gas carriers	—	—	—	—
Short Sea Container/RORO	7	—	—	7
	40	8	5	53
2011
U.S.-flag:
Product tanker ⁽¹⁾	5	—	2	7
RORO/Deck barges	—	—	—	—
Dry bulk articulated tug-barge	—	—	—	—
Harbor tugs	24	—	—	24
Ocean liquid tank barges	5	—	—	5
Foreign-flag:
Harbor tugs	4	—	—	4
Very large gas carriers	—	—	—	—
Short Sea Container/RORO	8	—	—	8
	46	—	2	48

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(1)	As of December 31, 2013 , 2012 and 2011 , four were operating under long-term bareboat charters and three were operating under time charters.

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The table below sets forth Shipping Services’ fleet of owned and leased-in U.S.-flag double-hull product tankers as of December 31, 2013 .



Name of Vessel	Capacity in barrels	Tonnage in “dwt” ⁽¹⁾	OPA 90 Retirement date	Type
Seabulk Trader	294,000	48,700	None	Double-hull
Seabulk Challenge	294,000	48,700	None	Double-hull
California Voyager ⁽²⁾	341,000	45,000	None	Double-hull
Oregon Voyager ⁽²⁾	341,000	45,000	None	Double-hull
Seabulk Arctic	340,000	46,000	None	Double-hull
Mississippi Voyager	340,000	46,000	None	Double-hull
Florida Voyager	340,000	46,000	None	Double-hull

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(1)	Deadweight tons or “dwt”.


(2)	Leased-in vessel.

As of December 31, 2013 , in addition to its existing fleet, Shipping Services had three U.S.-flag product tankers under construction, which are scheduled for delivery in 2016 and 2017. Subsequent to December 31, 2013 , Shipping Services committed to construct one U.S.-flag chemical and petroleum articulated tug-barge scheduled for delivery in the first half of 2016.

Markets

Petroleum and Gas Transportation. In the domestic energy trade, oceangoing vessels transport crude oil and petroleum products primarily from production areas, refineries and storage facilities along the coast of the U.S. Gulf of Mexico to refineries, utilities, waterfront industrial facilities and distribution facilities along the U.S. Gulf of Mexico and the U.S. Atlantic and Pacific coasts. The number of U.S.-flag oceangoing vessels eligible to participate in the U.S. domestic trade and capable of transporting crude or petroleum products has fluctuated in recent years as vessels have reached the end of their useful lives or have been retired due to the requirements of the Oil Pollution Act of 1990 ("OPA 90") and newbuilds are placed into service. In the foreign Liquefied Petroleum Gas ("LPG") trade, oceangoing vessels greater than 70,000 Cubic Meters ("cbm") of cargo capacity are described as VLGC’s. VLGC’s operate in long-haul international trades moving large LPG cargoes from geographic areas of excess production such as the Arabian Gulf or U.S. Gulf of Mexico to areas of demand such as Asia Pacific and Europe/Mediterranean. There are approximately 75 VLGC’s currently on order at various international shipyards with deliveries scheduled through 2016.

Harbor Towing and Bunkering. In the domestic harbor towing trade, harbor tugs operate alongside oceangoing vessels during their docking and undocking procedures. As of December 31, 2013 , Shipping Services' tugs were operating in various ports including three in Port Everglades, Florida, four in the Port of Tampa, Florida, two in Port Canaveral, Florida, five in Port Arthur, Texas, three in Mobile, Alabama and four in Lake Charles, Louisiana. In addition, four tugs and five liquid tank barges were operating in St. Eustatius and three tugs were operating under a bareboat charter arrangement.

Liner and Short-Sea Transportation. Roll on/Roll off ("RORO") barges and deck barges operated by Trailer Bridge, Inc., a noncontrolling investment of the Company, and RORO vessels operated by G&G Shipping, a wholly owned investment of the Company, provide cargo transportation services to and from ports in Florida, Puerto Rico, the Bahamas and the Western Caribbean for the shipment of containers, vehicles and project cargoes.

Customers and Contractual Arrangements

The primary purchasers of petroleum and gas transportation services are multinational oil and gas companies, refining companies, oil trading companies and large industrial consumers of crude, petroleum and LPG. Services are generally contracted on the basis of short-term or long-term time charters, voyage charters and contracts of affreightment or other transportation agreements tailored to the shipper's requirements. The primary purchasers of harbor towing and bunkering services are vessel owners and charterers including multi-national oil companies, major grain houses and private and public shipping companies. Services are contracted using prevailing port tariff terms on a per-use basis. The primary purchasers of liner and short-sea transportation services are individuals and businesses retailing or consuming U.S. export goods in Puerto Rico, the Bahamas and Western Caribbean. Shipping Services also provides technical ship management services to ship owners. In 2013 , no single customer of Shipping Services was responsible for 10% or more of consolidated operating revenues. The ten largest customers of Shipping Services accounted for approximately 60% of its operating revenues in 2013 . The loss of one or a few of these customers could have a material adverse effect on Shipping Services' results of operations.

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Under a time charter, Shipping Services provides a vessel to a customer and is responsible for all operating expenses, typically excluding fuel and port charges. Under a bareboat charter, Shipping Services provides a vessel to a customer and the customer assumes responsibility for all operating expenses and risks of operation. Vessel charters may range from several days to several years. Voyage contracts are contracts to carry cargoes on a single voyage basis regardless of time to complete. Contracts of affreightment are contracts for cargoes that are committed on a multi-voyage basis for various periods of time, with minimum and maximum cargo tonnages specified over the period at a fixed or escalating rate per ton.

Competitive Conditions

Each of the markets in which Shipping Services operates is highly competitive. Primary direct competitors for U.S.-flag petroleum transportation are other operators of U.S.-flag oceangoing tank vessels, operators of articulated tug-barge units and operators of refined product pipelines. Primary direct competitors of foreign-flag gas transportation are other owners and operators of foreign built VLGC's. Primary direct competitors for harbor towing and bunkering are operators of U.S.-flagged harbor tugs. The U.S. “Jones Act” shipping market is a trade that is not available to foreign-based competition. The most important competitive factors are pricing, vessel age and vessel availability to fit customer requirements. Primary direct competition for cargo liner transportation are other operators of cargo vessels operating between Florida ports, Puerto Rico, the Bahamas and the Western Caribbean.

Risks of Foreign Operations

Shipping Services' foreign operations consist of its liner transportation activities, terminal support and bunkering operations and its noncontrolling interest in Dorian LPG, which commenced operations in July 2013.

For the years ended December 31, 2013 , 2012 and 2011 , 16% , 17% and 15% , respectively, of Shipping Services’ operating revenues were derived from its foreign operations.

Foreign operations are subject to inherent risks, which, if they materialize, could have a material adverse effect on Shipping Services’ financial position and its results of operations. See the risk factor regarding “Risks from the Company’s international operations” in “Item 1A. Risk Factors.”

Illinois Corn Processing

Business

Illinois Corn Processing LLC ("ICP") operates an alcohol manufacturing, storage and distribution facility located in Pekin, Illinois. The Company owns a 70% interest in ICP. A flexible production platform and infrastructure enables ICP to produce, store and distribute a variety of high quality alcohol used in the food, beverage, industrial and petrochemical end-markets as well as fuel grade ethanol. The capability to produce these specialized streams differentiates ICP from other fuel ethanol plants and positions it as a key supply partner to a broad customer base. ICP contributed 16% and 14% of consolidated operating revenues in 2013 and 2012 .

Products and Services

The Pekin dry mill facility has an optimum production capacity of 82.5 million gallons per year. The plant can operate in a wide variety of production scenarios in which product mix and run rates vary significantly. This flexibility enables ICP to adjust its operations to prevailing market conditions and customer demands and maximize the value of its product portfolio.

ICP's location generally provides efficient access to raw materials and a variety of end-markets via barge, rail and truck. Located on the banks of the Illinois River, ICP operates a river terminal that provides efficient transportation of bulk alcohol and Dried Distiller Grains with Solubles ("DDGS") to desirable markets. The Pekin campus is serviced by a local short-line railroad giving ICP access to multiple Class 1 rail transportation options. Incoming and outgoing trucks have easy access to key Interstate corridors, placing several major metropolitan areas within economic reach of the facility. Additionally, Pekin is centrally located in the U.S Corn Belt, providing ample and cost-effective access to feedstock. Corn can also be brought in from other markets by rail or barge when the need arises.

Markets

The facility's distinctive production capabilities differentiate ICP and enable it to produce grades of alcohol that target markets that only a few other producers can service. ICP's customers include manufacturers in the food, beverage, household products and petrochemical industries. These customers require alcohols which meet very individual specifications and formulations, often unique to the end-product. Some of these product streams are less commoditized than basic fuel ethanol, which enables ICP to realize higher margins and profitability.

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Customers and Contractual Arrangements

The principal customers of ICP are major agricultural companies, major integrated oil companies and industrial companies. In 2013 , no single customer of ICP was responsible for 10% or more of consolidated operating revenues. The ten largest customers of ICP accounted for approximately 87% of its revenues in 2013 . The loss of one or a few of its customers would be unlikely to have a material adverse effect on ICP's results of operations due to its flexibility to produce a wide range of products including fuel ethanol and DDGS, both of which are sold into widely-traded markets.

Competitive Conditions

ICP believes the primary barriers to effective competitive entry are the high capital cost of new facilities and the mature market in which it competes. ICP is positioned as a valued industrial ingredient supplier to a broad range of blue-chip customers in the beverage, food and chemical markets. For these customers, high quality alcohol is a significant input to their manufacturing processes and end products. These customers demand tight product specifications which only high quality alcohol producers can meet. These capabilities create entrenched customer relationships and provide a competitive barrier against fuel ethanol producers that want to compete in these markets due to the consistent product quality and customer service.

Risks of Foreign Operations

For the years ended December 31, 2013 and 2012 , none of ICP's operating revenues were derived from foreign operations.

Other

The Company has other activities that primarily include:

Noncontrolling investment in emergency and crisis services. On December 31, 2012, the Company contributed its interest in O'Brien's Response Management Inc. ("ORM"), an emergency and crisis service provider, to Witt Group Holdings, LLC ("Witt") in exchange for an equity interest in Witt Group Holdings, LLC, which was renamed Witt O'Brien's, LLC (the "ORM Transaction"). Witt provides emergency preparedness and crisis response management services to oil, chemical and marine transportation clients, and government agencies in the United States and abroad. In the United States, these services are generally rendered to those clients who store, transport, produce or handle petroleum and certain non-petroleum oils that are subject to the provisions of OPA 90 and various other federal, state and municipal regulations. Internationally, these services may be required by legislation and regulations of countries, international maritime conventions and environmental covenants placed on clients by their lending institutions. Emergency and crisis services also provides emergency preparedness and response management services to governmental agencies arising from natural disasters and homeland security issues.

Agricultural commodity trading and logistics. Agricultural commodity trading and logistics is primarily focused on the global origination, trading and merchandising of sugar, rice and industrial salt. The group's involvement in these commodities pairs producers and buyers and arranges for the transportation and logistics of the product.

Lending and leasing activities. Lending and leasing activities primarily involve the secured financing of various types of equipment that require scheduled lease payments or periodic principal and interest payments.

Noncontrolling investments in various other businesses . These investments primarily include industrial aviation services businesses in Asia.

Government Regulation

Regulatory Matters

The Company’s operations are subject to significant United States federal, state and local regulations, as well as international conventions and the laws of foreign jurisdictions where the Company operates its equipment or where the equipment is registered. The Company’s domestically registered vessels are subject to the jurisdiction of the United States Coast Guard ("USCG"), the National Transportation Safety Board (“NTSB”), the U.S. Customs and Border Protection ("CBP"), the U.S. Environmental Protection Agency ("EPA") and state environmental protection agencies for those jurisdictions in which the company operates, and the U.S. Maritime Administration, as well as to the rules of private industry organizations such as the American Bureau of Shipping. The Company's operations in Offshore Marine Services may, from time to time, fall under the jurisdiction of the U.S. Bureau of Safety and Environmental Enforcement ("BSEE") and its Safety and Environmental Management System regulations, and the Company is also required to certify that its maritime operations adhere to those regulations. These agencies and organizations establish safety standards and are authorized to investigate vessels and accidents and to recommend improved maritime safety standards.

Offshore Marine Services, Shipping Services and Inland River Services are subject to U.S. cabotage laws that impose certain restrictions on the ownership and operation of vessels in the U.S. coastwise trade (i.e., trade between points in the United States), including the transportation of cargo. These laws are principally contained in 46 U.S.C. § 50501 and 46 U.S.C. Chapter 551 and related regulations and are commonly referred to collectively as the “Jones Act.” Subject to limited exceptions, the Jones Act requires that vessels engaged in U.S. coastwise trade be built in the United States, registered under the U.S. flag, manned by predominantly U.S. crews, and owned and operated by U.S. citizens within the meaning of the Jones Act. For purposes of the Jones Act, a corporation, for example, must satisfy the following requirements to be deemed a U.S. citizen: (i) the corporation

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must be organized under the laws of the United States or of a state, territory or possession thereof; (ii) each of the chief executive officer and the chairman of the board of directors of such corporation must be a U.S. citizen; (iii) no more than a minority of the number of directors of such corporation necessary to constitute a quorum for the transaction of business can be non-U.S. citizens; and (iv) at least 75% of each class or series of stock in such corporation must be owned by U.S. citizens within the meaning of the Jones Act. Should the Company fail to comply with the U.S. citizenship requirements of the Jones Act, it would be prohibited from operating its vessels in the U.S. coastwise trade during the period of such non-compliance. In addition, the Company could be subject to fines and its vessels could be subject to seizure and forfeiture for violations of the Jones Act and the related U.S. vessel documentation laws.

To facilitate compliance with the Jones Act, SEACOR’s Restated Certificate of Incorporation: (i) limits the aggregate percentage ownership by non-U.S. citizens of any class of SEACOR’s capital stock (including Common Stock) to 22.5% of the outstanding shares of each such class to ensure that such foreign ownership will not exceed the maximum percentage permitted by applicable maritime law (presently 25%) but authorizes SEACOR’s Board of Directors, under certain circumstances, to increase the foregoing percentage to 24%; (ii) requires institution of a dual stock certification system to help determine such ownership; (iii) provides that any issuance or transfer of shares in excess of such permitted percentage shall be ineffective as against the Company and that neither the Company nor its transfer agent shall register such purported issuance or transfer of shares or be required to recognize the purported transferee or owner as a stockholder of the Company for any purpose whatsoever except to exercise the Company’s remedies; (iv) provides that any such excess shares shall not have any voting or dividend rights; (v) permits the Company to redeem any such excess shares; and (vi) permits the Board of Directors to make such determinations as reasonably may be necessary to ascertain such ownership and implement such limitations. In addition, SEACOR’s by-laws provide that the number of non-U.S. citizen directors shall not exceed a minority of the number necessary to constitute a quorum for the transaction of business and restrict any non-U.S. citizen officer from acting in the absence or disability of the Chairman of the Board of Directors, the Chief Executive Officer or the President.

Offshore Marine Services, Inland River Services and Shipping Services operate vessels that are registered in the United States. Offshore Marine Services, Shipping Services and Inland River Services operate vessels registered in a number of foreign jurisdictions. Vessels registered in these jurisdictions are subject to the laws of the applicable jurisdiction as to ownership, registration, manning and safety. In addition, the Company's vessels are subject to the requirements of a number of international conventions that are applicable to vessels depending on their jurisdiction of registration. Among the more significant of these conventions are: (i) the International Convention for the Prevention of Pollution from Ships, 1973, as modified by the Protocol of 1978 relating thereto ("MARPOL"); (ii) the International Convention on the Safety of Life at Sea, 1974 and 1978 Protocols ("SOLAS"); and (iii) the International Convention on Standards of Training, Certification and Watchkeeping for Seafarers (“STCW”). Major revisions to STCW and its associated code went into effect on January 1, 2012 with a five-year transition period until January 1, 2017. The Company believes that its vessels registered in foreign jurisdictions are in compliance with all applicable material regulations and have all licenses necessary to conduct their business. In addition, vessels operated as standby safety vessels in the North Sea are subject to the requirements of the Department of Transport of the United Kingdom pursuant to the United Kingdom Safety Act.

The Maritime Labour Convention, 2006 (the “MLC”), which consolidates almost all of the 70 existing International Labour Organization maritime labour instruments in a single modern, globally applicable, legal instrument, went into effect on August 20, 2013. The MLC establishes comprehensive minimum requirements for working conditions of seafarers including, among other things, conditions of employment, hours of work and rest, grievance and complaints procedures, accommodations, recreational facilities, food and catering, health protection, medical care, welfare, and social security protection. The MLC also provides a new definition of seafarer that now includes all persons engaged in work on a vessel in addition to the vessel's crew. Under this MLC definition, the Company may be responsible for proving that customer and contractor personnel aboard its vessels have contracts of employment that comply with the MLC requirements. The Company could also be responsible for salaries and/or benefits of third parties that may board once of the Company's vessels. The MLC requires certain vessels that engage in international trade to maintain a valid Maritime Labour Certificate issued by their flag administration. The Company is developing and intends to implement a fleetwide action plan to comply with the MLC to the extent applicable to its vessels. Although the United States is not a party to the MLC, U.S.-flag vessels operating internationally must comply with the MLC when visiting a port in a country that is a party to the MLC.

All of Shipping Services’ vessels, certain of Offshore Marine Services’ vessels and all of Inland River Services’ liquid tank barges are subject to periodic inspection and survey by, and drydocking and maintenance requirements of, the USCG and/or the American Bureau of Shipping and other marine classification societies. Moreover, to ensure compliance with applicable safety regulations, the USCG is authorized to inspect vessels at will.

In addition to the USCG, the EPA, the Office of Pipeline Safety, the BSEE and certain individual states regulate vessels, facilities and pipelines in accordance with the requirements of Oil Pollution Act of 1990 ("OPA 90") or under analogous state law. There is currently little uniformity among the regulations issued by these agencies.

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When responding to third-party oil spills, emergency and crisis activities (which consisted of the SES Business that was sold pursuant to the SES Business Transaction and ORM, the ownership of which was transferred to Witt pursuant to the ORM Transaction) enjoys immunity from liability under federal law and all U.S. coastal state laws for any spills arising from its response efforts, except in the event of death or personal injury or as a result of its gross negligence or willful misconduct. It should be noted, however, that as a result of the Deepwater Horizon incident in 2010, some gaps have been identified in this responder immunity regime and actions are being taken by the response industry to seek modifications to existing law to remedy these gaps.

Environmental Compliance

As more fully described below, all of the Company’s businesses are, to some degree, subject to federal, state, local and international laws and regulations, as well as those of individual countries in which the Company operates, relating to environmental protection and occupational safety and health, including laws that govern the discharge of oil and pollutants into navigable and other U.S. waters. Violations of these laws may result in civil and criminal penalties, fines, injunctions or other sanctions.

The Company believes that its operations are currently in compliance with all material environmental laws and regulations. It does not expect that it will be required to make capital expenditures in the near future that are material to its financial position or operations to comply with environmental laws and regulations; however, because such laws and regulations frequently change and may impose increasingly strict requirements, the Company cannot predict the ultimate cost of complying with these laws and regulations. The recent trend in environmental legislation and regulation is generally toward stricter standards, and it is the Company’s view that this trend is likely to continue.

OPA 90 establishes a regulatory and liability regime for the protection of the environment from oil spills. OPA 90 applies to owners and operators of facilities operating near navigable waters and owners and operators of vessels operating in U.S. waters, which include the navigable waters of the United States and the 200-mile Exclusive Economic Zone of the United States. For purposes of its liability limits and financial responsibility and response planning requirements, OPA 90 differentiates between tank vessels (which include the Company’s chemical and petroleum product vessels and liquid tank barges) and “other vessels” (which include the Company’s tugs, offshore support vessels and dry cargo barges).

Under OPA 90, owners and operators of regulated facilities and owners and operators or bareboat charterers of vessels are “responsible parties” and are jointly, severally and strictly liable for removal costs and damages arising from facility and vessel oil spills or threatened spills up to their limits of liability (except if the limits are broken as discussed below) unless the spill results solely from the act or omission of certain third parties under specified circumstances, an act of God or an act of war. In addition, Section 713 of the Coast Guard Authorization Act of 2010, enacted on October 15, 2010, amended OPA 90 to include as a responsible party the owner of oil being transported in a tank vessel with a single hull after December 31, 2010. Damages are defined broadly to include: (i) injury to natural resources and the costs of remediation thereof; (ii) injury to, or economic losses resulting from the destruction of, real and personal property; (iii) net loss by the United States government, a state or political subdivision thereof, of taxes, royalties, rents, fees and profits; (iv) lost profits or impairment of earning capacity due to property or natural resources damage; (v) net costs of providing increased or additional public services necessitated by a spill response, such as protection from fire, safety or other hazards; and (vi) loss of subsistence use of available natural resources.

Effective July 31, 2009, the OPA 90 regulations were amended to increase the liability limits for responsible parties for non-tank vessels to $1,000 per gross ton or $854,400, whichever is greater, and for tank vessels the maximum limits of liability are the greater of $3,200 per gross ton or $23,496,000. These liability limits do not apply (a) if an incident is caused by the responsible party’s violation of federal safety, construction or operating regulations or by the responsible party’s gross negligence or willful misconduct, (b) if the responsible party fails to report the incident or to provide reasonable cooperation and assistance in connection with oil removal activities as required by a responsible official or (c) if the responsible party fails to comply with an order issued under OPA 90.

Under OPA 90, with certain limited exceptions, all newly-built oil tankers carrying crude oil and petroleum products in U.S. waters must have double-hulls. Existing single-hull, double-side or double-bottom tank vessels, unless retrofitted with double-hulls, must be phased out of service by January 1, 2015, depending upon the vessel’s size, age and place of discharge.

OPA 90 expanded pre-existing financial responsibility requirements and requires tank vessel owners and operators to establish and maintain with the USCG evidence of insurance or qualification as a self-insurer or other evidence of financial responsibility sufficient to meet their potential liabilities under OPA 90. Under OPA, an owner or operator of a fleet of vessels may demonstrate evidence of financial responsibility in an amount sufficient to cover the vessels in the fleet having the greatest maximum liability under OPA 90. The Company has satisfied USCG regulations by providing evidence of financial responsibility demonstrated by commercial insurance and self-insurance. The regulations also implement the financial responsibility requirements of the Comprehensive Environmental Response, Compensation and Liability Act (“CERCLA”), which imposes liability for discharges of hazardous substances such as chemicals, similar to OPA 90, and provides compensation for cleanup, removal and natural resource damages. Liability per vessel under CERCLA is limited to the greater of $300 per gross ton or $5 million, unless the incident is caused by gross negligence, willful misconduct, or a violation of certain regulations, in which case liability is unlimited.

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As a result of the Delaware River Protection Act, which was enacted by Congress in 2006, the OPA 90 limits of liability must be adjusted not less than every three years to reflect significant increases in the Consumer Price Index. The USCG, however, did not raise these limits in 2012 and it is unclear when it will take action to raise these liability limits.

OPA 90 amended the Clean Water Act (“CWA”), described below, to require the owner or operator of certain facilities or of a tank vessel to prepare facility or vessel response plans and to contract with oil spill removal organizations to remove, to the maximum extent practicable, a worst-case discharge. The Company has complied with these requirements. The Company expects its pollution liability insurance to cover any cost of spill removal subject to overall coverage limitations of $1.0 billion; however, a failure or refusal of the insurance carrier to provide coverage in the event of a catastrophic spill could result in material liability in excess of available insurance coverage, resulting in a material adverse effect on the Company’s business, financial position, results of operations or cash flows.

On September 30, 2013, the USCG issued a Final Rule, which became effective October 30, 2013, requiring owners and operators of nontank vessels to prepare and submit Nontank Vessel Response Plans ("NTVRPs") by January 30, 2014. The Final Rule implements a 2004 statutory mandate expanding oil spill response planning standards from tank vessels (implemented in 1993) to self-propelled nontank vessels of 400 gross tons or greater, that carry oil of any kind as fuel for main propulsion and that operate on the navigable waterways of the United States. The requirements for nontank vessels are generally similar to those for tank vessels. The Company has developed and submitted NTVRP's to meet this new requirement.

OPA 90 allows states to impose their own liability regimes with respect to oil pollution incidents occurring within their boundaries and many states have enacted legislation providing for unlimited liability for oil spills. Some states have issued regulations addressing financial responsibility and vessel and facility response planning requirements. The Company does not anticipate that state legislation or regulations will have any material impact on its operations.

Congress enacted the Coast Guard and Maritime Transportation Act of 2012 on December 20, 2012. This represents the first major piece of maritime legislation enacted by Congress since 2010. However, with regard to notable oil pollution legislation, it contained only one provision related to the investment amounts of certain funds in the Oil Spill Liability Trust Fund. It is unclear whether Congress will undertake new spill legislation in 2014 as a result of lessons learned from the Deepwater Horizon incident in 2010. If Congress passes spill legislation in 2014, the Company could be subject to greater potential liability or penalties if any of the Company's vessels has an incident or the Company could be required to comply with other requirements thereby increasing the Company's operating costs.

In addition to OPA 90, the following are examples of environmental laws that relate to the Company’s business and operations:

MARPOL is the main international convention covering prevention of pollution of the marine environment by vessels from operational or accidental causes. It has been updated by amendments through the years and is implemented in the United States pursuant to the Act to Prevent Pollution from Ships. MARPOL has six specific annexes and Annex I governs oil pollution.

Since the 1990s, the Department of Justice ("DOJ") has been aggressively enforcing U.S. criminal laws against vessel owners, operators, managers, crewmembers, shoreside personnel, and corporate officers for actions related to violations of MARPOL Annex I. Prosecutions generally involve violations related to pollution prevention devices, such as the oil-water separator, and include falsifying the Oil Record Book, obstruction of justice, false statements and conspiracy. Over the past eleven years, the DOJ has imposed significant criminal penalties in vessel pollution cases and the vast majority of such cases did not actually involve pollution in the United States, but rather efforts to conceal or cover up pollution that occurred elsewhere. In certain cases, responsible shipboard officers and shoreside officials have been sentenced to prison. In addition, the DOJ has required defendants to implement a comprehensive environmental compliance plan (“ECP”). If the Company is subjected to a DOJ criminal prosecution, it could face significant criminal penalties and defense costs as well as costs associated with the implementation of an ECP.

The CWA, enacted in 1972, prohibits the discharge of “pollutants,” which includes oil or hazardous substances, into navigable waters of the United States and imposes civil and criminal penalties for unauthorized discharges. The CWA complements the remedies available under OPA 90 and CERCLA.

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The CWA also established the National Pollutant Discharge Elimination System (“NPDES”) permitting program, which governs discharges of pollutants into navigable waters of the United States. Pursuant to the NPDES, EPA issued a Vessel General Permit (“2008 VGP”), which was in effect from February 6, 2009 to December 19, 2013, covering 26 types of discharges incidental to normal vessel operations. On April 12, 2013, the EPA published its formal Notice of Final Permit Issuance in the Federal Register announcing that the 2008 VGP, would be replaced by a Phase II VGP Regine ("2013 VGP") effective on December 19, 2013. Like the 2008 VGP applies to U.S. and foreign-flag commercial vessels that are at least 79 feet in length, and therefore applies to the Company’s vessels.

On February 11, 2011, the EPA and the USCG entered into a Memorandum of Understanding (“MOU”) outlining the steps the agencies will take to better coordinate efforts to implement and enforce the Vessel General Permit. Under the MOU, the USCG will identify and report to EPA detected Vessel General Permit deficiencies as a result of its normal boarding protocols for U.S.-flag and foreign-flag vessels. However, EPA retains responsibility and enforcement authority to address Vessel General Permit violations. Failure to comply with the Vessel General Permit may result in civil or criminal penalties.

Like the 2008 VGP, the 2013 VGP requires vessel owners and operators to adhere to “best management practices” to manage the covered discharges, including ballast water, that occur normally in the operation of a vessel. In addition, again like the 2008 VGP, the 2013 VGP requires vessel owners and operators to implement various training, inspection, monitoring, recordkeeping, and reporting requirements, as well as corrective actions upon identification of each deficiency. The 2013 VGP, however, has implemented more stringent requirements than the 2008 VGP. For example, with regard to ballast water discharge standards, the 2008 VGP requirements for ballast water were minimal, whereas the 2013 VGP implements numeric technology-based effluent limitations that replace the non-numeric based best management practice requirements in the 2008 VGP. The purpose of these limitations is to reduce the number of living organisms discharged via ballast water into waters regulated by the 2013 VGP. The Company has filed a Notice of Intent to be covered by the 2013 VGP for each of the Company’s ships. The 2013 VGP also contains more stringent effluent limits for oil-to-sea interfaces and exhaust gas scrubber washwater, which seeks to improve environmental protection of U.S. waters, by requiring all vessels to use an Environmentally Acceptable Lubricant (EAL) in all oil-to-sea interfaces, unless not technically feasible.

Section 401(d) of the CWA permits individual states to attach additional limitations and requirements to federal permits, including the VGP and 2013 VGP, that are necessary to assure that the permit will comply with any applicable CWA-based effluent limitations and other limitations, standards of performance, prohibitions, effluent standards, or pretreatment standards, and with any other appropriate requirements of that state. Pursuant to this authority, several states have specified significant, additional requirements that became a condition of the 2013 VGP. As a result, in addition to the 2013 VGP requirements, a permit may not be issued until the owners and operators of the vessel have met state specific state conditions in accordance with Section 401 of the CWA, if applicable. The 2013 VGP has resulted in increased requirements and may lead to increased enforcement by the EPA and the USCG that could result in an increase in the Company’s operating costs.

Many countries have ratified and are thus subject to liability scheme adopted by the International Maritime Organization (the “IMO”) and set out in the International Convention on Civil Liability for Oil Pollution Damage of 1969 (the "1969 Convention"). Some of these countries have also adopted the 1992 Protocol to the 1969 Convention (the "1992 Protocol"). Under both the 1969 Convention and the 1992 Protocol, a vessel's registered owner is strictly liable for pollution damage caused in the territorial waters of a contracting state by discharge of persistent oil, subject to certain complete defenses. These conventions also limit the liability of the shipowner under certain circumstances. As these conventions calculate liability in terms of a basket of currencies, the figures in this section are converted into U.S. dollars based on currency exchange rates as of October 2012, but those rates fluctuate daily and are approximate.

Under the 1969 Convention, except where the owner is guilty of actual fault, its liability is limited to $205 per gross ton (a unit of measurement for the total enclosed spaces within a vessel) with a maximum liability of $21.6 million. Under the 1992 Protocol, the owner's liability is limited except where the pollution damage results from its personal act or omission, committed with the intent to cause such damage, or recklessly and with knowledge that such damage would probably result. Under the 2000 amendments to the 1992 Protocol, which became effective on November 1, 2003, liability is limited to $6.9 million plus $646.80 for each additional gross ton over 5,000 for vessels of 5,000 to 140,000 gross tons, and $137.9 million for vessels over 140,000 gross tons, subject to the exceptions discussed above for the 1992 Protocol.

Vessels trading to countries that are parties to these conventions must provide evidence of insurance covering the liability of the owner. The Company believes that its P&I insurance will cover any liability under the plan adopted by the IMO. See the discussion of Insurance below.

The United States is not a party to the 1969 Convention or the 1992 Protocol, and OPA 90, CERCLA, CWA and other federal and state laws apply in the United States as discussed above. In other jurisdictions where the 1969 Convention has not been adopted, various legislative schemes or common law govern, and liability is imposed either on the basis of fault or in a manner similar to that convention.

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The International Convention on Civil Liability for Bunker Oil Pollution Damage, 2001, which was adopted on March 23, 2001 and became effective on November 21, 2008, is a separate convention adopted to ensure that adequate, prompt and effective compensation is available to persons who suffer damage caused by spills of oil when used as fuel by vessels. The convention applies to damage caused to the territory, including the territorial sea, and in its exclusive economic zones, of countries that are party to it. While the United States has not yet ratified this convention, U.S.-flag vessels operating internationally would be subject to it, if they sail within the territories of those countries that have implemented its provisions. The Company believes that its vessels comply with these requirements.

The United States National Invasive Species Act (“NISA”) was enacted in 1996 in response to growing reports of harmful organisms being released into United States waters through ballast water taken on by vessels in foreign ports. The USCG adopted regulations under NISA in July 2004 that impose mandatory ballast water management practices for all vessels equipped with ballast water tanks entering United States waters. These requirements can be met by performing mid-ocean ballast exchange, by retaining ballast water onboard the vessel, or by using environmentally sound ballast water treatment methods approved by the USCG. Mid-ocean ballast exchange is the primary method for compliance with the USCG regulations; alternative methods for ballast water treatment are still under development. Vessels that are unable to conduct mid-ocean ballast exchange due to voyage or safety concerns may discharge minimum amounts of ballast water, provided that they comply with record-keeping requirements and document the reasons they could not follow the required ballast water management requirements.

The USCG published a final rule on ballast water standards on March 23, 2012, which became effective on June 21, 2012. In most cases vessels will be required to install and operate a ballast water management system (“BWMS”) that has been type-approved by the USCG. A vessel's compliance date varies based upon the date of construction and ballast water capacity. All new vessels constructed on or after December 1, 2013, regardless of ballast water capacity, must comply with these requirements on delivery from the shipyard. Existing vessels with a ballast water capacity between 1500 and 5000 cubic meters must comply by their first scheduled drydocking after January 1, 2014. Existing vessels with a ballast water capacity less than 1500 cubic meters or greater than 5000 cubic meters must comply by their first scheduled drydocking after January 1, 2016. If a vessel intends to install a BWMS prior to the applicable compliance date and the USCG has not yet approved systems appropriate for the vessel's class or type, the vessel may install an Alternate Management System (“AMS”) that has been approved by a foreign-flag administration pursuant to the IMO's International Convention for the Control and Management of Ships Ballast Water and Sediments, which was adopted on February 13, 2004 (the “BWM Convention”), if the USCG determines that it is at least as effective as ballast water exchanges. If an AMS is installed prior to the applicable compliance date, it may be used until five years after the compliance date, which should provide sufficient time for the manufacturer to obtain USCG approval. At present, however, no USCG-approved BWMS is available.

In lieu of the AMS option, vessel owners and operators may request an extension of the BWMS requirements. Extension requests, with certain exceptions, must be submitted no later than 12 months before the vessel’s compliance date. The EPA and the USCG, have taken different positions regarding BWMS extensions. While the USCG is formally granting extensions to vessels that are unable to install the BWMS technology because it has not yet been type-approved, the EPA has declined to grant extensions its ballast water requirements under the 2013 VGP, which went into effect on December 19, 2013. Therefore, even if a vessel obtains a USCG extension, it will still not be in compliance with the 2013 VGP. Pursuant to a joint letter issued by the USCG and the EPA dated December 24, 2013 and a letter of non-enforcement issued by the EPA dated December 27, 2013, the EPA has clarified that non-compliance with the 2013 VGP standards will be considered a violation, but that it will take into account extensions granted by the USCG and other factors and in such cases will consider the violation a low enforcement priority. It is unclear how EPA will actually enforce this provision and whether its interpretation will be challenged by lawsuits.

In addition, states have enacted legislation or regulations to address invasive species through ballast water and hull cleaning management, and permitting requirements, which in many cases have also become part of the state’s 2013 VGP certification. For instance, California requires vessels to comply with state ballast water discharge and hull fouling requirements. On October 1, 2013, the California legislature delayed implementation of California’s ballast water discharge performance standards, effective January 1, 2014, for a two-year period. Although not yet implemented, California’s ballast water discharge performance standards are stronger than those scheduled to be implemented at the federal level. The federal government and the state of California permit the use of shipboard ballast water treatment systems to meet the discharge standards; however, the USCG requires that systems be type-approved by the USCG before they are installed on board vessels. California does not require advanced system approval, nor does the EPA under the 2013 VGP. As noted above, there are currently no type-approved systems by the USCG. Installation of AMS on board vessels will satisfy California’s ballast water discharge performance standards. It is unclear whether the California legislature will continue to extend the BWMS compliance deadline to match the USCG extension program. In addition, under the 2013 VGP, oceangoing vessels covered by the VGP are prohibited from discharging ballast water in Michigan waters unless the vessel meets Michigan state requirements and obtains a Michigan permit. New York has also imposed more stringent ballast water discharge standards, which became effective December 19, 2013 under the 2013 VGP. Currently, 25 states have added more stringent requirements to their certification of the 2013 VGP. Other states may proceed with the enactment of similar requirements that could increase the Company’s costs of operating in state waters.

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The Company's vessels are also subject to international ballast water management regulations including those contained in the BWM Convention. The Company complies with these regulations through ballast water management plans implemented on each of the vessels it operates. To meet existing and anticipated ballast water treatment requirements, the Company is developing and intends to implement a fleetwide action plan to comply with IMO, EPA, USCG and possibly more stringent U.S. state mandates which may require the installation and use of costly control technologies.

The United States Clean Air Act (as amended by the Clean Air Act Amendments of 1977 and 1990, the “CAA”) was enacted in 1970 and required the EPA to promulgate standards applicable to emissions of volatile organic compounds and other air contaminants. The CAA also requires states to submit State Implementation Plans (“SIPs”), which are designed to attain national health-based air quality standards throughout the United States, including major metropolitan and/or industrial areas. Several SIPs regulate emissions resulting from vessel loading and unloading operations by requiring the installation of vapor control equipment. The EPA and some states have each proposed more stringent regulations of air emissions from propulsion and auxiliary engineers on oceangoing vessels. For example, the California Air Resources Board of the State of California (“CARB”) has published regulations requiring oceangoing vessels visiting California ports to reduce air pollution through the use of marine distillate fuels once they sail within 24 miles of the California coastline effective July 1, 2009. CARB expanded the boundaries of where these requirements apply and began enforcing these new requirements on December 1, 2011. More stringent fuel oil requirements for marine gas oil went into effect on August 1, 2012.

The State of California also began on January 1, 2010, implementing regulations on a phased-in basis that require vessels to either shut down their auxiliary engines while in port in California and use electrical power supplied at the dock or implement alternative means to significantly reduce emissions from the vessel’s electric power generating equipment while it is in port. Generally, a vessel will run its auxiliary engines while in port in order to power lighting, ventilation, pumps, communication and other onboard equipment. The emissions from running auxiliary engines while in port may contribute to particulate matter in the ambient air. The purpose of the regulations is to reduce the emissions from a vessel while it is in port. The cost of reducing vessel emissions while in port may be substantial if the Company determines that it cannot use or the ports will not permit the Company to use electrical power supplied at the dock. Alternatively, the ports may pass the cost of supplying electrical power at the port to the Company, and the Company may incur additional costs in connection with modifying the Company’s vessels to use electrical power supplied at the dock.

Annex VI of MARPOL, which addresses air emissions from vessels, came into force in the United States on January 8, 2009 and requires the use of low sulfur fuels worldwide in both auxiliary and main propulsion diesel engines on vessels. By July 1, 2010, amendments to MARPOL required all diesel engines on vessels built between 1990 and 2000 to meet a Nitrous Oxide (“NOx”) standard of 17.0g-NOx/kW-hr. On January 1, 2011, the NOx standard was lowered to 14.4 g-NOx/kW-hr and on January 1, 2016, it will be further lowered to 3.4 g-NOx/kW-hr, for vessels operating in a designated Emission Control Area (“ECA”).

In addition, the current global sulfur cap of 4.5% sulfur was reduced to 3.5% effective January 1, 2012 and will be further reduced to as low as 0.5% sulfur in 2020. The recommendations made in connection with a MARPOL fuel availability study scheduled for 2018 at IMO may cause this date to slip to 2025. The current 1.0% maximum sulfur emissions permitted in designated ECAs around the world will be reduced to 0.1% sulfur on January 1, 2015. These sulfur limitations will be applied to all subsequently approved ECAs.

With respect to North America, the EPA received approval of the IMO, in coordination with Environment Canada, to designate all waters, with certain limited exceptions, within 200 nautical miles of Hawaii and the U.S. and Canadian coasts as ECAs. The North American ECA went into effect on August 1, 2012 limiting the sulfur content in fuel that is burned as described above. Beginning in 2016, NOx after-treatment requirements become applicable in this ECA as well. Furthermore, on July 15, 2011, the IMO officially adopted amendments to MARPOL to designate certain waters around Puerto Rico and the U.S. Virgin Islands as the United States – Caribbean ECA, where stringent international emission standards will also apply to ships. For this area, the effective date of the first-phase fuel sulfur standard is January 2014, and the second phase begins in 2015. Stringent NOx engine standards begin in 2016.

After the August 1, 2012 effective date of the North American ECA, ships operating within 200 miles of the U.S. coast are required to burn 1% sulfur content fuel oil as of August 1, 2012 (when the ECA became effective) and they will be required to burn 0.1% sulfur content fuel oil as of January 1, 2015. The Company has three U.S.-flag product tankers that cannot safely burn 0.1% fuel oil without minor modification to its fuel system. EPA has received approval from the IMO to exempt and has exempted steamships from the 0.1% sulfur content fuel oil requirement until 2020.

Annex VI of MARPOL contains requirements with respect to the prevention of air pollution by vessels and the issuance of International Air Pollution Prevention (“IAPP”) certificates to reflect compliance with those requirements. In July 2011, the IMO’s Marine Environment Protection Committee adopted amendments to MARPOL Annex VI that went into effect in the United States on January 1, 2013. These amendments created a new Chapter 4 to Annex VI, which established Regulations on Energy Efficiency for Ships that generally apply to all new and existing vessels of 400 or more gross tons, subject to certain exceptions.

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These regulations mandate that all new vessels have an Energy Efficiency Design Index (“EEDI”) as well as a Ship Energy Efficiency Management Plan (“SEEMP”). The EEDI, which is required for certain types of vessels that are newly constructed or undergo a major conversion after January 1, 2013, is a measure of the efficiency of a particular vessel’s power plant and its hull form that will be expressed in grams of carbon dioxide (CO ² ) produced per the vessel’s capacity mile, which will be based on a formula using a factor of the distance travelled by the vessel times the cargo weight. It is expected that vessels that are currently excluded from these regulations will be included in the future when new formulas are developed. The EEDI requires a minimum energy efficiency level per capacity mile (tonnage mile) for different ship types, which is expected to be reduced incrementally every five years. As long as the required energy level is attained, ship designers and builders may use the most cost-effective measures of their choice to comply with these regulations. The SEEMP is an operational plan that establishes a mechanism to improve the energy efficiency of a vessel in a cost-effective manner. A SEEMP is required for all vessels in operation and does not have a required format, but it must be developed by the vessel operator taking into account guidelines adopted by the IMO in March 2012. The amendments to Annex VI also added requirements for the International Energy Efficiency (“IEE”) Certificate. For existing vessels, IEE Certificates are required to be issued no later than their first intermediate or renewal survey for their existing IAPP Certificate after January 1, 2013. Compliance with the SEEMP must also be demonstrated and verified at that time.

The International Convention on the Control of Harmful Anti-fouling Systems on Ships (the “AFS Convention”) , which was adopted by the IMO on October 5, 2001 and went into effect on September 17, 2008, prohibits the use of certain harmful substances, known as organotins, in anti-fouling paints used on vessels. Effective November 21, 2012, vessels registered under the U.S. flag must comply with the AFS Convention. The AFS Convention bans the application or use of tributyltin (an anti-fouling agent used on the hulls of vessels to prevent the growth of marine organisms), calls for its removal from existing anti-fouling systems and establishes a detailed and science-based mechanism to consider future restrictions of harmful substances in anti-fouling systems. The AFS Convention generally applies to vessels of 400 or more gross tons that are engaged in international voyages (excluding fixed or floating platforms, floating storage units (FSUs) and floating production, storage and offloading units (FPSOs)). Vessels subject to the AFS Convention must demonstrate compliance with the AFS through possession of an International Anti-fouling System (“IAFS”) Certificate. For U.S.-flag vessels subject to the AFS Convention, the USCG or a recognized class society will verify compliance and issue the IAFS Certificate. In addition to the United States, approximately 61 countries representing approximately 80 percent of the world’s tonnage have ratified the AFS Convention.

The Company’s operations occasionally generate and require the transportation, treatment and disposal of both hazardous and non-hazardous solid wastes that are subject to the requirements of the United States Resource Conservation and Recovery Act (“RCRA”) or comparable state, local or foreign requirements. From time to time the Company arranges for the disposal of hazardous waste or hazardous substances at offsite disposal facilities. With respect to the Company’s marine operations, EPA has a longstanding policy that RCRA only applies after wastes are “purposely removed” from the vessel. As a general matter, with certain exceptions, vessel owners and operators are required to determine if their wastes are hazardous, obtain a generator identification number, comply with certain standards for the proper management of hazardous wastes, and use hazardous waste manifests for shipments to disposal facilities. The degree of RCRA regulation will depend on the amount of hazardous waste a generator generates in any given month. Moreover, vessel owners and operators may be subject to more stringent state hazardous waste requirements in those states where they land hazardous wastes. If such materials are improperly disposed of by third parties that the Company contracts with, the Company may still be held liable for cleanup costs under applicable laws.

Under MARPOL Annex V, which governs the discharge of garbage from ships, the special area for the Wider Caribbean region including the Gulf of Mexico and the Caribbean Sea went into effect on May 1, 2011. MARPOL defines certain sea areas as “special areas,” in which, for technical reasons relating to their oceanographical and ecological condition and to their sea traffic, the adoption of special mandatory methods for the prevention of sea pollution is required. Under MARPOL, these special areas are provided with a higher level of protection than other areas of the sea.

In addition, new regulations addressing garbage management went into effect on January 1, 2013 pursuant to action taken by the IMO's Marine Environment Protection Committee in July 2011 after a comprehensive review of MARPOL Annex V. The new regulations impose stricter garbage management procedures and documentation requirements for all vessels and fixed and floating platforms, which will potentially have major implications for industry, as discussed below. The most significant change in the new regulations is its general approach to garbage management. Under the prior regulations, discharge of garbage into the sea was generally allowed unless specifically prohibited or limited. This concept is reversed in the new regulations, which impose a general prohibition on the discharge of all garbage unless the discharge is expressly provided for under the regulations. The new regulations allow the limited discharge of only four categories: food waste, cargo residues and certain operational wastes not harmful to the marine environment, and carcasses of animals carried as cargo. Combined with the general prohibition on the discharge of garbage outside these limited categories, the new regulations greatly reduce the amount of garbage that vessels will be able to dispose of at sea and will increase the Company's costs of disposing garbage remaining on board vessels at their port calls. The USCG published an interim rule on February 28, 2013 to implement these new requirements in the United States effective April 1, 2013.

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The Endangered Species Act, federal conservation regulations and comparable state laws protect species threatened with possible extinction. Protection of endangered and threatened species may include restrictions on the speed of vessels in certain ocean waters and may require the Company to change the routes of the Company’s vessels during particular periods. For example, in an effort to prevent the collision of vessels with the North Atlantic right whale, federal regulations restrict the speed of vessels to ten knots or less in certain areas along the Atlantic Coast of the United States during certain times of the year. The reduced speed and special routing along the Atlantic Coast results in the use of additional fuel, which affects the Company’s results of operations.

With regard to the regulation of emissions of certain gases, generally referred to as greenhouse gases, international conventions and federal, state and local laws and regulations have been considered or implemented to address the effects of such emissions on the environment. At the international level, the United Nations Framework Convention on Climate Change (the “Climate Change Convention”) went into effect on March 21, 1994 and provides an international framework for countries to negotiate specific international accords or protocols to establish binding limitations on greenhouse gas emissions. Pursuant to the Kyoto Protocol to the Climate Change Convention, which was adopted in Kyoto, Japan in December 1997 and went into effect on February 6, 2005 (the "Kyoto Protocol"), countries that are parties to the Climate Change Convention are required to implement national programs to reduce emissions of greenhouse gases. The detailed rules for the implementation of the Kyoto Protocol were adopted in Marrakesh, Morocco in 2001 and provided for an initial commitment period of 2008 to 2012, during which its parties were committed to achieving certain emission reduction targets.

At various United Nations climate change conferences, working groups have generally sought to establish emission reduction targets for developed countries, formulate a new climate change treaty and secure an extension of the Kyoto Protocol emissions limits to the extent that such a treaty is not yet achievable. On December 8, 2012, in Doha, Qatar, the Doha Amendment to the Kyoto Protocol ("Doha Amendment") was adopted to add a second commitment period running from January 1, 2013 to December 31, 2020, during which the parties will be committed to certain reduction targets for greenhouse gas emissions. Once it is in force, the Doha Amendment will continue the Kyoto Protocol as a transitional measure and will establish a proposal for a more comprehensive international agreement for the post-2020 period to be agreed by 2015.

The IMO's second study of greenhouse gas emissions from the global shipping fleet, which was concluded in 2009, predicted that, in the absence of appropriate policies, greenhouse emissions from ships may increase by 150% to 200% by 2050 due to expected growth in international seaborne trade. The IMO has announced its intention to develop limits on greenhouse gases from international shipping and is working on proposed mandatory technical and operational measures to achieve these limits.

The European Union (“EU”) had indicated its intention to propose an expansion of the existing EU emissions trading scheme to include emissions of greenhouse gases from vessels, particularly if no international maritime emissions reduction targets were agreed to through the IMO or the Climate Change Convention by the end of 2011. In 2011, the European Commission established a working group on shipping to provide input to the European Commission in its work to develop and assess options for the inclusion of international maritime transport in the EU's greenhouse gas reduction commitment. In June 2013, the European Commission proposed legislation and established a strategy for progressively integrating maritime emissions into the EU’s policy for reducing domestic greenhouse emissions. The proposed legislation, which would establish, as an initial step, an EU system for monitoring, reporting and verifying emissions from large ships calling at EU ports that would apply beginning on January 1, 2018, is currently subject to approval by the European Parliament and the EU Council.

In the United States, pursuant to an April 2007 decision of the U.S. Supreme Court, the EPA was required to consider whether carbon dioxide should be considered a pollutant that endangers public health and welfare, and thus subject to regulation under the CAA. In October 2007, the California Attorney General and a coalition of environmental groups petitioned the EPA to regulate greenhouse gas emissions from oceangoing vessels under the CAA. On January 1, 2009, the EPA began, for the first time, to require large emitters of greenhouse gases to collect and report data with respect to their greenhouse gas emissions. On December 1, 2009, the EPA issued an “endangerment finding” regarding greenhouse gases under the CAA. While this finding in itself does not impose any requirements on industry or other entities, the EPA is in the process of promulgating regulations of greenhouse gas emissions. To date, the regulations proposed and enacted by the EPA have not involved oceangoing vessels.

Any future adoption of climate control treaties, legislation or other regulatory measures by the United Nations, IMO, EU, United States or other countries where the Company operates that restrict emissions of greenhouse gases could result in financial and operational impacts on the Company's business (including potential capital expenditures to reduce such emissions) that the Company cannot predict with certainty at this time. In addition, there may be significant physical effects of climate change from such emissions that have the potential to negatively impact the Company's personnel and physical assets and reduce the demand for the services offered by the Company.

The Company manages exposure to losses from the above-described laws through its efforts to use only well-maintained, well-managed and well-equipped facilities and vessels and its development of safety and environmental programs, including a maritime compliance program and its insurance program. The Company believes it will be able to accommodate reasonably

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foreseeable environmental regulatory changes subject to the comments above. There can be no assurance, however, that any future regulations or requirements or that any discharge or emission of pollutants by the Company will not have a material adverse effect on the Company's business, financial position, results of operations or cash flows.

Security

Heightened awareness of security needs brought about by the events of September 11, 2001 has caused the USCG, the IMO, states and local ports to adopt heightened security procedures relating to ports and vessels.

Specifically, on November 25, 2002, the Maritime Transportation Security Act of 2002 (“MTSA”) was signed into law. To implement certain portions of MTSA, in July 2003, the USCG issued regulations requiring the implementation of certain security requirements aboard vessels operating in waters subject to the jurisdiction of the United States. Similarly, in December 2002, the IMO adopted amendments to the SOLAS, known as the International Ship and Port Facilities Security Code (the “ISPS Code”), creating a new chapter dealing specifically with maritime security. The new chapter came into effect in July 2004 and imposes various detailed security obligations on vessels and port authorities. Among the various requirements under MTSA and/or the ISPS Code are:


•	onboard installation of automatic information systems to enhance vessel-to-vessel and vessel-to-shore communications;


•	onboard installation of ship security alert systems;


•	the development of vessel and facility security plans;


•	the implementation of a Transportation Worker Identification Credential program; and


•	compliance with flag state security certification requirements.

The USCG regulations, which are intended to align with international maritime security standards, generally deem foreign-flag vessels to be in compliance with MTSA vessel security measures provided such vessels have onboard a valid International Ship Security Certificate that attests to the vessel’s compliance with SOLAS security requirements and the ISPS Code. However, U.S.-flag vessels that are engaged in international trade must comply with all of the security measures required by MTSA, as well as SOLAS and the ISPS Code.

We believe that the Company has implemented the various security measures required by the MTSA, SOLAS and the ISPS Code in light of the new requirements. Specifically, the Company has implemented security plans and procedures for each of its U.S.-flag vessels and its terminal operation in Sauget, Illinois pursuant to rules implementing the MTSA that have been issued by the USCG. The Company’s U.S.-flag vessels subject to the requirements of the ISPS Code and its foreign-flag vessels are currently in compliance with ISPS Code requirements.

The International Safety Management Code (“ISM Code”), as promulgated by the IMO, provides international standards for the safe management and operation of ships and for the prevention of marine pollution from ships. The United States is bound to enforce the ISM Code for all U.S.-flag vessels and those foreign-flag vessels that call at U.S. ports. All of the Company’s vessels that are 500 or more gross tons are required to be certified under the standards set forth in the ISM Code’s safety and pollution protocols. The Company also voluntarily complies with these protocols for some vessels that are under the mandatory 500-gross tons threshold. Under the ISM Code, vessel operators are required to develop an extensive safety management system (“SMS”) that includes, among other things, the adoption of a written system of safety and environmental protection policies setting forth instructions and procedures for operating their vessels subject to the ISM Code, and describing procedures for responding to emergencies. The Company has developed such a safety management system. These SMS policies apply to both the vessel and shore-side personnel and are vessel specific. The ISM Code also requires a Document of Compliance (“DOC”) to be obtained for the vessel manager and a Safety Management Certificate (“SMC”) to be obtained for each vessel subject to the ISM Code that it operates or manages. Vessels and companies subject to the ISM Code are inspected regularly to ensure that the SMS is in place and effective. Upon successful inspection and verification of an effective SMS, a vessel is issued an SMC. No vessel can obtain such an SMC unless its operator or manager has been issued a DOC by the administration of that vessel's flag state or as otherwise permitted under SOLAS. The Company has obtained DOCs for its shore side offices that have responsibility for vessel management and SMCs for each of the vessels that such offices operate or manage. These DOCs and SMCs must be verified or renewed periodically (annually or less frequently, depending on the type of document) in accordance with the ISM Code.

IMO regulations also require owners and operators of vessels to adopt Shipboard Oil Pollution Emergency Plans (SOPEPs"). Periodic training and drills for response personnel and for vessels and their crews are required. To the extent that Company vessels carry noxious liquid substances, the Company has adopted Shipboard Marine Pollution Emergency Plans ("SMPEPs"), which cover potential releases not only of oil but also of any noxious liquid substances. A SMPEP under Regulation 17 of Annex II of MARPOL requires all vessels of 150 or more gross tons transporting noxious liquid substances in bulk to carry on board an approved marine pollution emergency plan for noxious liquid substances.

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Noncompliance with the ISM Code and other IMO regulations may subject the shipowner or charterer to increased liability, may lead to decreases in available insurance coverage for affected vessels and may result in the denial of access to, or detention in, some ports. For example, the USCG authorities have indicated that vessels not in compliance with the ISM Code will be prohibited from trading to United States ports.

Industry Hazards and Insurance

Vessel operations involve inherent risks associated with carrying large volumes of cargo and rendering services in a marine environment. Hazards include adverse weather conditions, collisions, fire and mechanical failures, which may result in death or injury to personnel, damage to equipment, loss of operating revenues, contamination of cargo, pollution and other environmental damages and increased costs. The Company maintains hull, liability and war risk, general liability, workers compensation and other insurance customary in the industries in which the Company operates. The Company also conducts training and safety programs to promote a safe working environment and minimize hazards.

Employees

As of December 31, 2013 , the Company employed 4,653 individuals directly and indirectly through crewing or manning agreements. Substantially all indirect employees support Offshore Marine Services’ vessel operations.

As of December 31, 2013 , Offshore Marine Services employed 934 seafarers in the North Sea and Brazil, some of whom were members of a union under the terms of an ongoing agreement. In the United States, a total of 453 employees in Inland River Services and Shipping Services were unionized under collective bargaining agreements that expire at varying times through September 30, 2017.

Management considers relations with its employees to be satisfactory.



ITEM 1A.	RISK FACTORS

Risks, Uncertainties and Other Factors That May Affect Future Results

The Company’s results of operations, financial condition and cash flow may be adversely affected by numerous risks. Carefully consider the risks described below, which represent some of the more critical risk factors that affect the Company, as well as the other information that has been provided in this Annual Report on Form 10-K. The risks described below include all known material risks faced by the Company. Additional risks not presently known may also impair the Company’s business operations.

Difficult economic conditions could materially adversely affect the Company. The success of the Company’s business is both directly and indirectly dependent upon conditions in the global financial markets and economic conditions throughout the world that are outside its control and difficult to predict. Continued uncertainty about global economic conditions may lead businesses to postpone spending in response to tighter credit and reductions in income or asset values. These factors may also adversely affect the Company’s liquidity and financial condition and the liquidity and financial condition of the Company’s customers. Factors such as interest rates, availability of credit, inflation rates, economic uncertainty, changes in laws (including laws relating to taxation), trade barriers, commodity prices, currency exchange rates and controls, and national and international political circumstances (including wars, terrorist acts or security operations) can have a material negative impact on the Company’s business and investments, which could reduce its revenues and profitability. Although the Company has some ongoing exposure to credit risks on its accounts receivable balances, these risks are heightened during periods when economic conditions worsen. The Company has procedures that are designed to monitor and limit exposure to credit risk on its receivables; however, there can be no assurance that such procedures will effectively limit its credit risk and avoid losses that could have a material adverse effect on the Company’s financial position and its results of operations. Unstable economic conditions may also increase the volatility of the Company’s stock price.

There are risks associated with the Company’s debt structure. The Company’s ability to meet its debt service obligations is dependent upon its future operating results, which are subject to general economic conditions, industry cycles and financial, business and other factors, many of which are beyond its control. The Company’s debt levels and the terms of its indebtedness may limit its liquidity and flexibility in obtaining additional financing and pursuing other business opportunities. In addition, the Company’s overall debt level and/or market conditions could lead the credit rating agencies to lower the Company’s corporate credit ratings, which could limit its ability to issue additional debt in amounts and/or on terms that it considers reasonable.

Demand for many of the Company’s services is impacted by the level of activity in the offshore oil and natural gas exploration, development and production industry. The level of offshore oil and natural gas exploration, development and production activity has historically been volatile and that volatility is likely to continue. The level of activity is subject to large fluctuations in response to relatively minor changes in a variety of factors that are beyond the Company’s control, including:


•	general economic conditions;

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•	prevailing oil and natural gas prices and expectations about future prices and price volatility;


•	assessments of offshore drilling prospects compared with land-based opportunities;


•	the cost of exploring for, producing and delivering oil and natural gas offshore;


•	worldwide demand for energy, other petroleum products and chemical products;


•	availability and rate of discovery of new oil and natural gas reserves in offshore areas;


•	federal, state, local and international political and economic conditions, and policies including cabotage and local content laws;


•	technological advances affecting exploration, development, energy production and consumption;


•	weather conditions;


•	environmental regulation;


•	regulation of drilling activities and the availability of drilling permits and concessions; and


•	the ability of oil and natural gas companies to generate or otherwise obtain funds for capital projects.

A prolonged material downturn in oil and natural gas prices is likely to cause a substantial decline in expenditures for exploration, development and production activity, which would result in a decline in demand and lower rates for the Company’s offshore energy support services and petroleum product transportation services. Moreover, for the year ended December 31, 2013 , approximately 48% of Offshore Marine Services’ operating revenues were earned in the U.S. Gulf of Mexico and are therefore dependent on levels of activity in that region, which may differ from levels of activity in other regions of the world.

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.

Adverse results of legal proceedings could materially adversely affect the Company. The Company is subject to and may in the future be subject to a variety of legal proceedings and claims that arise out of the ordinary conduct of its business. Results of legal proceedings cannot be predicted with certainty. Irrespective of its merits, litigation may be both lengthy and disruptive to the Company’s operations and may cause significant expenditure and diversion of management attention. The Company may be faced with significant monetary damages or injunctive relief against it that could materially adversely affect a portion of its business operations or materially and adversely affect the Company’s financial position and its results of operations should the Company fail to prevail in certain matters.

The Company may undertake one or more significant corporate transactions that may not achieve their intended results, may adversely affect the Company’s financial condition and its results of operations, and may result in additional risks to its businesses. The Company continuously evaluates the acquisition of operating businesses and assets and may in the future undertake significant transactions. Any such transaction could be material to the Company’s business and could take any number of forms, including mergers, joint ventures, investments in new lines of business and the purchase of equity interests or assets. The form of consideration for such transactions may include, among other things, cash, common stock or equity interests in the Company’s subsidiaries. The Company also evaluates the disposition of its operating businesses and assets, in whole or in part, which could take the form of asset sales, mergers or sales of equity interests in its subsidiaries (privately or through a public offering), or the spin-off of equity interests of the Company’s subsidiaries to its stockholders.

These types of significant transactions may present significant risks and uncertainties, including distraction of management from current operations, insufficient revenue to offset liabilities assumed, potential loss of significant revenue and income streams, unexpected expenses, inadequate return of capital, potential acceleration of taxes currently deferred, regulatory or compliance issues, the triggering of certain covenants in the Company’s debt instruments (including accelerated repayment) and other unidentified issues not discovered in due diligence. As a result of the risks inherent in such transactions, the Company cannot guarantee that any such transaction will ultimately result in the realization of the anticipated benefits of the transaction or that significant transactions will not have a material adverse impact on the Company’s financial condition or its results of operations. If the Company were to complete such an acquisition, disposition, investment or other strategic transaction, it may require additional debt or equity financing that could result in a significant increase in its amount of debt or the number of outstanding shares of its Common Stock.

Investment in new business strategies and initiatives present risks not originally contemplated. The Company has invested, and in the future may again invest, in new business plans or acquisitions, some of which may not be directly linked to existing business lines or activities. These activities may involve significant risks and uncertainties, including distraction of management from current operations, insufficient revenue to offset liabilities assumed and expenses associated with the plans or

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acquisitions, inadequate return of capital, and unidentified issues not discovered in due diligence. Investments in these positions also may involve securities that are not very liquid. As a result of the risks inherent in new ventures, there can be no assurance that any such venture will be successful, or that new ventures will not have a material adverse impact on the Company’s financial position and its results of operations.

The Company engages in hedging activities which expose it to risks. The Company for corporate purposes and also as part of its trading activities, may use futures and swaps to hedge risks, such as escalation in fuel costs, the cost of agricultural materials, movements in foreign exchange rates and interest rates. The Company may also purchase inventory in larger than usual levels to lock in costs when it believes there may be large increases in the price of raw materials or other materials used in its businesses. Such purchases expose the Company to risks of meeting margin calls and drawing on its capital, counterparty risk due to failure of an exchange or institution with which it has done a swap, incurring higher costs than competitors or similar businesses that do not engage in such strategies, and losses on its investment portfolio. Such strategies can also cause earnings to be volatile.

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


•	the additional safety and certification requirements for drilling activities imposed for the approval of development and production activities and the delayed approval of applications to drill in both deep and shallow-water areas;


•	the possibility that a drilling moratorium may be imposed in the event of another significant drilling rig accident or oil spill similar to the drilling moratorium imposed by the U.S. Department of the Interior that directed lessees and operators to cease drilling all new deepwater wells on federal leases in the U.S. Gulf of Mexico;


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


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


•	the cost or availability of relevant insurance coverage.

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

The Company could incur liability in connection with its provision of spill response services. Prior to the disposition of the SES Business and the ORM Transaction, the Company provided spill and emergency response services, including in response to the Deepwater Horizon /BP Macondo Well Incident. Several of the Company’s business segments are currently defendants in litigation arising from the Deepwater Horizon /BP Macondo Well Incident and the Company expects it may be named in additional litigation regarding its response services. Although companies are generally exempt in the United States from liability under the CWA for their own actions and omissions in providing spill response services, this exemption might not apply if a company were found to have been grossly negligent or to have engaged in willful misconduct, or if it were to have failed to provide these services consistent with the National Contingency Plan or as otherwise directed under the CWA. In addition, the exemption under the federal CWA would not protect a company against liability for personal injury or wrongful death claims, or against prosecution under other federal or state laws. All of the coastal states of the United States in which the Company provides services have adopted similar exemptions, however, several inland states have not. If a court or other applicable authority were to determine that the Company does not benefit from federal or state exemptions from liability in providing emergency response services, or if the other defenses asserted by the Company and its business segments are rejected, the Company could be liable together with the local contractor and the responsible party for any resulting damages, including damages caused by others, subject to the indemnification provisions and other liability terms and conditions negotiated with its domestic clients. In the international market, the Company does not benefit from the spill response liability protection provided by the CWA and, therefore, is subject to the liability terms and conditions negotiated with its international clients, in addition to any other defenses available to the Company and its business segments. In connection with claims relating to clean-up operations following the Deepwater Horizon /BP Macondo Well Incident, the responsible party acknowledged and agreed to indemnify and defend one of the Company’s business segments pursuant and subject to certain contractual agreements.

If Congress repeals the $75.0 million cap for non-reclamation liabilities under OPA 90 or otherwise scales back the protections afforded to contractors thereunder, there may be increased exposure for remediation work and the cost for securing insurance for such work may become prohibitively expensive. Without affordable insurance and appropriate legislative regulation

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limiting liability, drilling, exploration, remediation and further investment in oil and gas exploration in the U.S. Gulf of Mexico may be discouraged and thus reduce the demand for the Company’s services.

The Company could incur liability in connection with certain obligations relating to the Deepwater Horizon incident. In connection with the Deepwater Horizon /BP Macondo Well Incident, BP Exploration & Production, Inc. and BP America Production Company engaged the services of ORM and NRC, each of which was a subsidiary of the Company at the time operating in the Company's now discontinued Environmental Services segment. ORM and NRC were subsequently made defendants in litigation arising from the Deepwater Horizon /BP Macondo Well Incident and the Company expects that these entities may be named in additional litigation regarding their response services. In connection with claims relating to clean-up operations following the Deepwater Horizon /BP Macondo Well Incident, the responsible party acknowledged and agreed to indemnify and defend ORM and NRC pursuant and subject to certain contractual agreements and potential limitations. On December 31, 2012, the Company contributed its interest in ORM to Witt in exchange for an equity interest in Witt. In connection with this transaction, the Company entered into an indemnification agreement pursuant to which it agreed to indemnify Witt and certain of its affiliates for damages relating to specified claims arising from the Deepwater Horizon /BP Macondo Well Incident to the extent the responsible party breaches its indemnity obligations or is not obligated to indemnify ORM, and certain claims under the Fair Labor Standards Act asserting failure to pay overtime with respect to individuals who provided service on the spill response to such incident, subject to a negotiated cap. On March 16, 2012, the Company sold NRC to JFL. In connection with this transaction, the Company entered into an indemnification agreement pursuant to which it agreed to indemnify JFL and certain of its affiliates for damages relating to specified claims arising from the Deepwater Horizon /BP Macondo Well Incident to the extent the responsible party breaches its indemnity obligations or is not obligated to indemnify NRC, subject to a negotiated cap subject to a post-closing working capital adjustment and contingent consideration equal to a portion of the revenue generated by any extraordinary oil spill response that occurs within three years following the closing. As a result of these arrangements, the Company may be faced with significant monetary payments that could materially and adversely affect the Company's financial position and its results of operations.

Negative publicity may adversely impact the Company. Media coverage and public statements that insinuate improper actions by the Company, regardless of their factual accuracy or truthfulness, may result in negative publicity, litigation or governmental investigations by regulators. Addressing negative publicity and any resulting litigation or investigations may distract management, increase costs and divert resources. Negative publicity may have an adverse impact on the Company’s reputation and the morale of its employees, which could adversely affect the Company’s financial position, results of operations or cash flows.

Increased domestic and international laws and regulations may adversely impact the Company. Changes in laws or regulations regarding offshore oil and gas exploration and development activities and technical and operational measures, including those imposed in the aftermath of the Deepwater Horizon /BP Macondo Well Incident, may increase the Company's costs and the costs of its customers' operations and may influence decisions by customers or other industry participants that could reduce the demand for the Company’s services, which would have a negative impact on the Company’s Offshore Marine Services segment.

Risks from the Company’s international operations. The Company operates vessels and transacts other business worldwide. Its ability to compete in international markets may be adversely affected by foreign government regulations that favor or require the awarding of contracts to local competitors, or that require foreign persons to employ citizens of, or purchase supplies from, a particular jurisdiction. Further, the Company’s foreign subsidiaries may face governmentally imposed restrictions on their ability to transfer funds to their parent company.

Activity outside the United States involves additional risks, including the possibility of:


•	United States embargoes or restrictive actions by U.S. and foreign governments that could limit the Company’s ability to provide services in foreign countries;


•	a change in, or the imposition of, withholding or other taxes on foreign income, tariffs or restrictions on foreign trade and investment;


•	limitations on the repatriation of earnings or currency exchange controls and import/export quotas;


•	local cabotage and local ownership laws and requirements;


•	nationalization, expropriation, asset seizure, blockades and blacklisting;


•	limitations in the availability, amount or terms of insurance coverage;


•	loss of contract rights and inability to enforce contracts;


•	political instability, war and civil disturbances or other risks that may limit or disrupt markets, such as terrorist attacks, piracy and kidnapping;


•	fluctuations in currency exchange rates, hard currency shortages and controls on currency exchange that affect demand for the Company’s services and its profitability;

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•	potential noncompliance with a wide variety of laws and regulations, such as the U.S. Foreign Corrupt Practices Act of 1977 (the “FCPA”), and similar non-U.S. laws and regulations, including the U.K. Bribery Act 2010;


•	labor strikes;


•	changes in general economic and political conditions; and


•	difficulty in staffing and managing widespread operations.

Unstable political, military and economic conditions in foreign countries where a significant proportion of Offshore Marine Services’ operations are conducted could adversely impact the Company’s business. During the year ended December 31, 2013 , approximately 52% of Offshore Marine Services’ operating revenues resulted from its foreign operations. These operations are subject to risks, including potential vessel seizure, terrorist attacks, piracy, kidnapping, nationalization of assets, currency restrictions, import or export quotas and other forms of public and government regulation, all of which are beyond the Company’s control. Economic sanctions or an oil embargo, for example, could have significant impact on activity in the oil and gas industry and, correspondingly, on the Company should Offshore Marine Services operate vessels in a country subject to any sanctions or embargo, or in the surrounding region to the extent any sanctions or embargo disrupts its operations.

Offshore Marine Services, Inland River Services and Shipping Services rely on several customers for a significant share of their revenues, the loss of any of which could adversely affect each of their businesses and operating results. The portion of Offshore Marine Services’, Inland River Services and Shipping Services’ revenues attributable to any single customer may change over time, depending on the level of relevant activity by any such customer, the segment’s ability to meet the customer’s needs and other factors, many of which are beyond the Company’s control. The loss of any large customer or several mid-size customers could have a material and adverse effect on such segment’s or the Company’s financial position or its results of operations.

Consolidation of the Company’s customer base could adversely affect demand for its services and reduce its revenues. In recent years, oil and natural gas companies, energy companies and drilling contractors have undergone substantial consolidation and additional consolidation is possible. Consolidation results in fewer companies to charter or contract for the Company’s services. Also, merger activity among both major and independent oil and natural gas companies affects exploration, development and production activity as the consolidated companies integrate operations to increase efficiency and reduce costs. Less promising exploration and development projects of a combined company may be dropped or delayed. Such activity may result in an exploration and development budget for a combined company that is lower than the total budget of both companies before consolidation, which could adversely affect demand for the Company’s Offshore Marine Services’ vessels and Shipping Services’ tankers thereby reducing the Company’s revenues.

The improved economics of producing natural gas and oil from shale may result in a decrease in offshore oil and gas drilling that could adversely affect the Company. The rise in production of natural gas and oil, particularly from onshore shale, as a result of improved drilling efficiencies that are lowering the costs of extraction, may result in a reduction of capital invested in offshore oil and gas exploration. Because Offshore Marine Services provides vessels servicing offshore oil and gas exploration, a significant reduction in investments in offshore exploration and development would have a material adverse effect on the Company's operations and financial position.

The Company may be unable to maintain or replace its offshore support vessels as they age. As of December 31, 2013 , the average age of the Company’s Offshore Marine Services’ vessels, excluding its standby safety and wind farm utility vessels, was approximately twelve years. The Company believes that after an offshore support vessel has been in service for approximately 20 years, the expense (which typically increases with age) necessary to satisfy required marine certification standards may not be economically justifiable. The Company may be unable to carry out drydockings of its vessels or may be limited by insufficient shipyard capacity, which could adversely affect its ability to maintain its vessels. In addition, market conditions may not justify these expenditures or enable the Company to operate its older vessels profitably during the remainder of their economic lives. There can be no assurance that the Company will be able to maintain its fleet by extending the economic life of existing vessels, or that its financial resources will be sufficient to enable it to make expenditures necessary for these purposes or to acquire or build replacement vessels.

An increase in the supply of offshore support vessels or U.S.-flag product tankers could have an adverse impact on the charter rates earned by the Company’s offshore support vessels and U.S.-flag product tankers. Expansion of the supply of the worldwide offshore support vessel fleet would increase competition in the markets in which Offshore Marine Services operates. The refurbishment of disused or “mothballed” vessels, conversion of vessels from uses other than oil and gas exploration and production support and related activities or construction of new vessels could all add vessel capacity to current worldwide levels. A significant increase in vessel capacity could lower charter rates and result in lower operating revenues. Similarly, should competitors in the domestic petroleum and chemical product tanker industry construct a significant number of new tankers or large capacity integrated or articulated tug and barge units, demand for tanker assets could be adversely affected.

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If the Company does not restrict the amount of foreign ownership of its Common Stock, it could be prohibited from operating offshore support vessels, inland river vessels and barges and tankers in the United States, which would adversely impact its business and operating results. The Company is subject to the Jones Act, which governs, among other things, the ownership and operation of offshore support vessels, tankers and barges used to carry cargo between U.S. ports. Subject to limited exceptions, the Jones Act requires that vessels engaged in the U.S. coastwise trade be built in the United States, registered under the U.S. flag, manned by predominantly U.S. crews, and owned and operated by U.S. citizens within the meaning of the Jones Act. Although SEACOR’s Restated Certificate of Incorporation and by-laws contain provisions intended to assure compliance with these provisions of the Jones Act, a failure to maintain compliance would adversely affect the Company’s financial position and its results of operations and the Company would be prohibited from operating vessels in the U.S. coastwise trade during any period in which the Company does not comply or cannot demonstrate to the satisfaction of the relevant governmental authorities the Company’s compliance with the Jones Act. In addition, the Company could be subject to fines and its vessels could be subject to seizure and forfeiture for violations of the Jones Act and the related U.S. vessel documentation laws.

Repeal, Amendment, Suspension or Non-Enforcement of the Jones Act would result in additional competition for Offshore Marine Services, Shipping Services and Inland River Services and could have a material adverse effect on the Company’s business. A substantial portion of the operations of Offshore Marine Services, Shipping Services and Inland River Services are conducted in the U.S. coastwise trade. Subject to limited exceptions, the Jones Act requires that vessels engaged in U.S. coastwise trade be built in the United States, registered under the U.S. flag, manned by predominantly U.S. crews, and owned and operated by U.S. citizens within the meaning of the Jones Act. There have been attempts to repeal or amend such provisions, and such attempts are expected to continue in the future. Repeal, substantial amendment or waiver of such provisions would result in additional competition from vessels built in lower-cost foreign shipyards, 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, financial position and its results of operations. In addition, the Company’s advantage as a U.S.-citizen operator of Jones Act vessels could be eroded by periodic efforts and attempts by foreign interests to circumvent certain aspects of the Jones Act. If maritime cabotage services were included in the General Agreement on Trade in Services, the North American Free Trade Agreement or other international trade agreements, or if the restrictions contained in the Jones Act were otherwise altered, the shipping of maritime cargo between covered U.S. ports could be opened to foreign-flag or foreign-built vessels. Because foreign vessels may have lower construction costs and operate at significantly lower costs than companies operating in the U.S. coastwise trade, such a change could significantly increase competition in the U.S. coastwise trade, which could have a material adverse effect on our business, results of operations and financial condition.

The Company's investment in Jones Act product carriers could be negatively impacted if the current rules restricting export of crude oil are changed, or if the Jones Act is suspended or repealed, or if the price of natural gas increase to levels that reduce the competitiveness of US refineries. The investment in Jones Act product carriers could also be improvident if all existing tankers and tank barges are replaced with additional newly built equipment when they come to the end of their economic life. The Company has also committed to a significant investment in VLGC's for use in the foreign Liquefied Petroleum Gas ("LPG") trade. If the expected rise in production of LPG in the U.S. does not occur, or if most of the production of LPG is consumed domestically in petrochemical plants, or if the price of propane and butane increases to levels that lower demand, this investment may prove unprofitable. The investment could also be unprofitable due to excessive ordering of VLGC’s.

Restrictions on foreign ownership of the Company’s vessels could limit its ability to sell off any portion of its business or result in the forfeiture of its vessels. Compliance with the Jones Act requires that non-U.S. citizens own no more than 25% in the entities that directly or indirectly own the vessels that the Company operates in the U.S. coastwise trade. If the Company were to seek to sell any portion of its business that owns any of these vessels, it would have fewer potential purchasers, since some potential purchasers might be unable or unwilling to satisfy the U.S. citizenship restrictions described above. As a result, the sales price for that portion of the Company’s business may not attain the amount that could be obtained in an unregulated market. Furthermore, if at any point the Company or any of the entities that directly or indirectly own its vessels cease to satisfy the requirements to be a U.S. citizen within the meaning of the Jones Act, the Company would become ineligible to operate in the U.S. coastwise trade and may become subject to penalties and risk forfeiture of its vessels.

SEACOR’s certificate of incorporation limits the ownership of Common Stock by individuals and entities that are not U.S. citizens within the meaning of the Jones Act. These restrictions may affect the liquidity of SEACOR’s Common Stock and may result in non-U.S. citizens being required to sell their shares at a loss or relinquish their voting, dividend and distribution rights. Under the Jones Act, at least 75% of the outstanding shares of each class or series of SEACOR’s capital stock must be owned and controlled by U.S. citizens within the meaning of the Jones Act. Certain provisions of SEACOR’s certificate of incorporation are intended to facilitate compliance with this requirement and may have an adverse effect on holders of shares of the Common Stock. In addition, the 2.5% Convertible Senior Notes due 2027 and the 3.0% Convertible Notes due 2028 issued by the Company have controls in place that are designed to ensure compliance with the Jones Act.

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Under the provisions of SEACOR’s Restated Certificate of Incorporation, the aggregate percentage of ownership by non-U.S. citizens of any class of SEACOR’s capital stock (including Common Stock) is limited to 22.5% of the outstanding shares of each such class to ensure that such foreign ownership will not exceed the maximum percentage permitted by the Jones Act, which is presently 25%. The Restated Certificate of Incorporation authorizes SEACOR’s Board of Directors, under certain circumstances, to increase the foregoing permitted percentage to 24%. The Restated Certificate of Incorporation further provides that any issuance or transfer of shares to non-U.S. citizens in excess of such permitted percentage shall be ineffective as against the Company and that neither the Company nor its transfer agent shall register such purported issuance or transfer of shares to non-U.S. citizens or be required to recognize the purported transferee or owner as a stockholder of the Company for any purpose whatsoever except to exercise the Company’s remedies. Any such excess shares in the hands of a non-U.S. citizen shall not have any voting or dividend rights and are subject to redemption by the Company in its discretion. The liquidity or market value of the shares of common stock may be adversely impacted by such transfer restrictions.

As a result of the above provisions, a proposed transferee of the Common Stock that is a non-U.S. citizen may not receive any return on its investment in shares it purportedly purchases or owns, as the case may be, and it may sustain a loss. The Company, in its discretion, is entitled to redeem all or any portion of such shares most recently acquired (as determined by its Board of Directors in accordance with guidelines that are set forth in its Restated Certificate of Incorporation), by non-U.S. citizens, in excess of such maximum permitted percentage for such class or series at a redemption price based on a fair market value formula that is set forth in the Company’s Restated Certificate of Incorporation, which may be paid in cash or promissory notes at the discretion of the Company. Such excess shares shall also not be accorded any voting, dividend or distribution rights until they have ceased to be excess shares, provided that they have not been already redeemed by the Company. As a result of these provisions, a purported stockholder who is a non-U.S. citizen may be required to sell its shares of Common Stock at an undesirable time or price and may not receive any return on its investment in such shares. Further, the Company may have to incur additional indebtedness, or use available cash (if any), to fund all or a portion of such redemption, in which case the Company’s financial condition may be materially weakened.

So that the Company may ensure its compliance with the Jones Act, its Restated Certificate of Incorporation permits it to require that owners of any shares of its capital stock provide confirmation of their citizenship. In the event that a person does not submit such documentation to the Company, its Restated Certificate of Incorporation provides the Company with certain remedies, including the suspension of the payment of dividends and distributions with respect to those shares and deposit of any such dividends and distributions into an escrow account. As a result of non-compliance with these provisions, an owner of the shares of the Company’s Common Stock may lose significant rights associated with those shares.

In addition to the risks described above, the foregoing foreign ownership restrictions could delay, defer or prevent a transaction or change in control that might involve a premium price for the Company’s Common Stock or otherwise be in the best interest of the Company’s stockholders.

If non-U.S. citizens own more than 22.5% of SEACOR’s Common Stock, the Company may not have the funds or the ability to redeem any excess shares and it could be forced to suspend its operations in the U.S. coastwise trade. SEACOR’s Restated Certificate of Incorporation contains provisions prohibiting ownership of its Common Stock by non-U.S. citizens, in the aggregate, in excess of 22.5% of such shares. In addition, the Restated Certificate of Incorporation permits the Company to redeem such excess shares. The per share redemption price may be paid, as determined by the Company’s Board of Directors, by cash or promissory notes. However, the Company may not be able to redeem such excess shares for cash because its operations may not have generated sufficient excess cash flow to fund such redemption. If, for any reason, the Company is unable to effect such a redemption when such ownership of shares by non-U.S. citizens is in excess of 25.0% of the Common Stock, or otherwise prevent non-U.S. citizens in the aggregate from owning shares in excess of 25.0% of any such class or series of the Company’s capital stock, or fail to exercise its redemption rights because it is unaware that such ownership exceeds such percentage, the Company will likely be unable to comply with the Jones Act and will likely be required by the applicable governmental authorities to suspend its operations in the U.S. coastwise trade. Any such actions by governmental authorities would have a severely detrimental impact on the Company’s financial position, results of operations and cash flows.

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 position, results of operations and cash flows.

Operational risks could disrupt operations and expose the Company to liability. The operation of offshore support vessels, tankers, roll-on/roll-off vessels, inland river towboats, tugs and barges is subject to various risks, including catastrophic disaster, adverse weather, mechanical failure and collision. 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

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rates, increased operating costs, increased governmental regulation and reporting and damage to the Company’s reputation and customer relationships. In addition, the affected vessels could be removed from service and would then not be available to generate revenues.

Revenues from Shipping Services could be adversely affected by a decline in demand for domestic refined petroleum products, crude oil or chemical products, or a change in existing methods of delivery. A reduction in domestic consumption of refined petroleum products, crude oil or chemical products, the development of alternative methods of delivery of refined petroleum products or crude oil, or a reduction in domestic refining capacity could reduce demand for the Company’s services.

Construction of additional refined petroleum product, natural gas or crude oil pipelines could have a material adverse effect on Shipping Services’ revenues. Long-haul transportation of refined petroleum products, crude oil and natural gas is generally less costly by pipeline than by tanker. Existing pipeline systems are either insufficient to meet demand in, or do not reach, all of the markets served by Shipping Services’ tankers. The construction and operation of new pipeline segments to the Florida market could have a material and adverse effect on Shipping Services’ business.

The Company is subject to complex laws and regulations, including environmental laws and regulations that can adversely affect the cost, manner or feasibility of doing business. Increasingly stringent federal, state, local and international laws and regulations governing worker safety and health and the manning, construction and operation of vessels significantly affect the Company’s operations. Many aspects of the marine industry are subject to extensive governmental regulation by the USCG, Occupational Safety and Health Administration (“OSHA”), NTSB, EPA, IMO, the U.S. Department of Homeland Security, the U.S. Maritime Administration, and the CBP, and to regulation by port states and class society organizations, such as the American Bureau of Shipping, as well as to international regulations from international treaties, such as the International Convention for the Safety of Life at Sea administered by port states and class societies. The USCG, OSHA and NTSB set safety standards and are authorized to investigate marine casualties and recommend improved safety standards. The CBP and USCG are authorized to inspect vessels at will.

The Company’s business and operations are also subject to federal, state, local and international laws and regulations that control the discharge of oil and hazardous materials into the environment or otherwise relate to environmental protection and occupational safety and health. Compliance with such laws and regulations may require installation of costly equipment or operational changes, and the phase-out of certain product tankers. Failure to comply with applicable laws and regulations may result in administrative and civil penalties, criminal sanctions or the suspension or termination of the Company’s operations. Some environmental laws impose strict and, under certain circumstances, joint and several liability for remediation of spills and releases of oil and hazardous materials and damage to natural resources, which could subject the Company to liability without regard to whether it was negligent or at fault. Under OPA 90, owners, operators and bareboat charterers are jointly and severally strictly liable for the removal costs and damages resulting from the discharge of oil within the 200 mile exclusive economic zone around the United States. In addition, an oil spill could result in significant liability, including fines, penalties, criminal liability and costs for natural resource and other damages under other federal and state laws and civil actions. These laws and regulations may expose the Company to liability for the conduct of or conditions caused by others, including charterers. Moreover, these laws and regulations could change in ways that substantially increase the Company’s costs. The Company cannot be certain that existing laws, regulations or standards, as currently interpreted or reinterpreted in the future, or future laws and regulations will not have a material adverse effect on its business, results of operations and financial condition. Regulation of the shipping industry will likely continue to become more stringent and more expensive for the Company. In addition, a serious marine incident occurring in U.S. waters that results in significant oil pollution could result in additional regulation. Additional environmental and other requirements, as well as more stringent enforcement policies, may be adopted that could limit the Company’s ability to operate, require the Company to incur substantial additional costs or otherwise have a material adverse effect on the Company’s business, results of operations or financial condition. For more information, see Item 1. “Government Regulation - Environmental Compliance.”

Inland River Services could experience variation in freight rates. Freight transportation rates may fluctuate as the volume of cargo and availability of barges change. The volume of freight transported on the Inland River Waterways may vary as a result of various factors, such as global economic conditions and business cycles, domestic and international agricultural production and demand, and foreign currency exchange rates. Barge participation in the industry can also vary year-to-year and is dependent on the number of barges built and retired from service. Extended periods of high barge availability and low cargo demand could adversely impact Inland River Services.

Inland River Services’ results of operations could be adversely affected by the decline in U.S. grain exports. Inland River Services’ business is significantly affected by the volume of grain exports handled through ports in the U.S. Gulf of Mexico. Grain exports can vary due to a number of factors including crop harvest yield levels in the United States and abroad, and the demand for grain in the United States. A shortage of available grain overseas can increase demand for U.S. grain. Conversely, an abundance of grain overseas can decrease demand for U.S. grain. A decline in exports could result in excess barge capacity, which would likely lower freight rates earned by Inland River Services.

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Inland River Services’ results of operations could be adversely affected by international economic and political factors. The actions of foreign governments could affect the import and export of the dry-bulk commodities typically transported by Inland River Services. Foreign trade agreements and each country’s adherence to the terms of such agreements can raise or lower demand for U.S. imports and exports of the dry-bulk commodities that Inland River Services transports. National and international boycotts and embargoes of other countries’ or U.S. imports or exports together with the raising or lowering of tariff rates could affect the demand for the transportation of cargoes handled by Inland River Services. These actions or developments could have an adverse impact on Inland River Services.

Inland River Services’ results of operations are affected by seasonal activity. Inland River Services’ business is seasonal, and its quarterly revenues and profits have historically been lower in the first and second quarters of the year and higher in the third and fourth quarters, during the grain harvest.

Inland River Services’ results of operations are affected by adverse weather and river conditions. Weather patterns can affect river levels and cause ice conditions during winter months, which can hamper barge navigation. Locks and dams on river systems may be closed for maintenance or other causes, which may delay barge movements. These conditions could adversely impact Inland River Services.

The aging infrastructure on the U.S. Inland River Waterways may lead to increased costs and disruptions in Inland River Services’ operations. Many of the locks and dams on the U.S. Inland River Waterways were built early in the last century, and their age makes them costly to maintain and susceptible to unscheduled maintenance outages. Delays caused by malfunctioning locks and dams could increase Inland River Services’ operating costs and delay the delivery of cargoes. Moreover, in the future, increased diesel fuel user taxes could be imposed to fund necessary infrastructure improvements, and such increases may not be recoverable by Inland River Services through pricing increases. The foregoing risks could also make inland barge transport less competitive than rail.

Inland River Services’ results of operations could be materially and adversely affected by fuel price fluctuations. For the most part, Inland River Services purchases towboat and fleeting services from third party vendors. The price of these services can rise when fuel prices escalate and could adversely impact Inland River Services’ results of operation.

The Company’s insurance coverage may be inadequate to protect it from the liabilities that could arise in its businesses. Although the Company maintains insurance coverage against the risks related to its businesses, risks may arise for which the Company may not be insured. Claims covered by insurance are subject to deductibles, the aggregate amount of which could be material. Insurance policies are also subject to compliance with certain conditions, the failure of which could lead to a denial of coverage as to a particular claim or the voiding of a particular insurance policy. There also can be no assurance that existing insurance coverage can be renewed at commercially reasonable rates or that available coverage will be adequate to cover future claims. If a loss occurs that is partially or completely uninsured, the Company could be exposed to substantial liability.

The Company’s global operations are subject to certain foreign currency, interest rate, fixed-income, equity and commodity price risks. The Company is exposed to certain foreign currency, interest rate, fixed-income, equity and commodity price risks. Some of these risks may be hedged, but fluctuations could impact the Company’s financial position and its results of operations. The Company has, and anticipates that it will continue to have, contracts denominated in foreign currencies. It is often not practicable for the Company to effectively hedge the entire risk of significant changes in currency rates during a contract period. The Company’s financial position and its results of operations have been negatively impacted for certain periods and positively impacted for other periods, and may continue to be affected to a material extent by the impact of foreign currency exchange rate fluctuations. The Company’s financial position and its results of operations may also be affected by the cost of hedging activities that the Company undertakes. The Company holds a large proportion of its net assets in cash equivalents and short-term investments, including a variety of public and private debt and equity instruments. Such investments subject the Company to risks generally inherent in the capital markets. Given the relatively high proportion of the Company’s liquid assets relative to its overall size, its financial position and its results of operations may be materially affected by the results of the Company’s capital management and investment activities and the risks associated with those activities. Volatility in the financial markets and overall economic uncertainty also increase the risk that the actual amounts realized in the future on the Company’s debt and equity instruments could differ significantly from the fair values currently assigned to them. In addition, changes in interest rates may have an adverse impact on the Company’s financial position and its results of operations.

The Company’s inability to attract and retain qualified personnel could have an adverse effect on its business. Attracting and retaining skilled personnel across all of the Company’s business segments is an important factor in its future success. The market for the personnel employed is highly competitive and the Company cannot be certain that it will be successful in attracting and retaining qualified personnel in the future.

The failure to successfully complete construction or conversion of the Company’s vessels, repairs, maintenance or routine drydockings on schedule and on budget could adversely affect the Company’s financial position and its results of operations. From time to time, the Company may have a number of vessels under conversion and may plan to construct or convert other vessels in response to current and future market conditions. The Company also routinely engages shipyards to drydock

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vessels for regulatory compliance and to provide repair and maintenance. Construction and conversion projects and drydockings are subject to risks of delay and cost overruns, resulting from shortages of equipment, lack of shipyard availability, unforeseen engineering problems, work stoppages, weather interference, unanticipated cost increases, inability to obtain necessary certifications and approvals and shortages of materials or skilled labor. A significant delay in either construction or drydockings could have a material adverse effect on contract commitments and revenues with respect to vessels under construction, conversion or undergoing drydockings. Significant cost overruns or delays for vessels under construction, conversion or retrofit could also adversely affect the Company’s financial position, results of operations and cash flows.

A violation of the Foreign Corrupt Practices Act may adversely affect the Company’s business and operations. In order to effectively compete in certain foreign jurisdictions, the Company seeks to establish joint ventures with local operators or strategic partners. As a U.S. corporation, the Company is subject to the regulations imposed by the FCPA, which generally prohibits U.S. companies and their intermediaries from making improper payments to foreign officials for the purpose of obtaining or maintaining business. The Company has adopted stringent procedures to enforce compliance with the FCPA, but it may be held liable for actions taken by its strategic or local partners even though these partners may not be subject to the FCPA. Any determination that the Company has violated the FCPA could have a material adverse effect on its business, financial position, results of operations and cash flows.

An outbreak of any contagious disease, such as H1N1 Flu, may adversely affect the Company’s business and operations. The outbreak of diseases, such as H1N1 Flu, commonly referred to as Swine Flu, has curtailed and may curtail travel to and from certain countries, or geographic regions. Restrictions on travel to and from these countries or other regions due to additional incidences for diseases, such as Swine Flu, could have a material adverse effect on the Company’s business, financial position, results of operations and cash flows.

There are risks associated with climate change and environmental regulations. Governments around the world have, in recent years, placed increasing attention on matters affecting the environment and this could lead to new laws or regulations pertaining to climate change, carbon emissions or energy use that in turn could result in a reduction in demand for hydrocarbon-based fuel. Governments could also pass laws or regulations encouraging or mandating the use of alternative energy sources such as wind power and solar energy, which may reduce demand for oil and natural gas and therefore the services provided by the Company. In addition, new environmental or emissions control laws or regulations may require an increase in the Company's operating costs and/or in the Company's capital spending for additional equipment to comply with such requirements and could also result in a reduction in revenues due to downtime required for the installation of such equipment. Such initiatives could have a material adverse effect on the Company’s financial position, results of operations and cash flows.

The Company's business and stock price may be adversely affected if its internal control over financial reporting is not effective. Under Section 404 of the Sarbanes-Oxley Act of 2002 and rules promulgated by the SEC, companies are required to conduct a comprehensive evaluation of their internal control over financial reporting. As part of this process, the Company is required to document and test its internal control over financial reporting; management is required to assess and issue a report concerning the Company's internal control over financial reporting; and the Company's independent registered public accounting firm is required to attest on the effectiveness of the Company's internal control over financial reporting. The Company’s internal control over financial reporting may not prevent or detect misstatements because of its inherent limitations, including the possibility of human error, the circumvention or overriding of controls, or fraud. Even effective internal controls can provide only reasonable assurance with respect to the preparation and fair presentation of financial statements. Management’s assessment of the Company's internal control over financial reporting as of December 31, 2013, identified a material weakness related to the application and monitoring of the accounting for income taxes as it did not have controls in place to provide effective oversight of work performed by, and the accuracy of financial information provided by third party tax advisors for significant transactions. As described in "Item 9A Controls and Procedures - Management’s Report on Internal Control Over Financial Reporting," the Company is taking steps to remediate the material weakness. The existence of a material weakness could result in errors in the Company's financial statements that could result in a restatement of financial statements, which could cause the Company to fail to meet its reporting obligations, lead to a loss of investor confidence and have a negative impact on the trading price of the Company's common stock.



ITEM 1B.	UNRESOLVED STAFF COMMENTS

None.

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ITEM 2.	PROPERTIES

Offshore support vessels, inland river towboats and barges, tankers, harbor and offshore towboats, RORO vessels, terminals and manufacturing and servicing facilities are the principal physical properties owned by the Company and are more fully described in "Offshore Marine Services," "Inland River Services," "Shipping Services" and "Illinois Corn Processing" in "Item 1. Business."



ITEM 3.	LEGAL PROCEEDINGS

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 ORM, a subsidiary of the Company prior to the ORM Transaction, during the Deepwater Horizon oil spill response and clean-up in the U.S Gulf of Mexico. The action now is part of the overall multi-district litigation, In re Oil Spill by the Oil Rig "Deepwater Horizon", MDL No. 2179 filed in the U.S. District Court for the Eastern District of Louisiana ("MDL"). The complaint also seeks to establish a “class-wide court-supervised medical monitoring program” for all individuals “participating in BP's Deepwater Horizon Vessels of Opportunity Program and/or Horizon Response Program” who allegedly experienced injuries similar to those of Mr. Wunstell. The Company believes this lawsuit has no merit and will continue to vigorously defend the action and pursuant to contractual agreements with the responsible party, the responsible party has agreed, subject to certain potential limitations, to indemnify and defend ORM in connection with the Wunstell Action and claims asserted in the MDL, discussed further below. Although the Company is unable to estimate the potential exposure, if any, resulting from this matter, the Company does not expect it will have a material effect on the Company's consolidated financial position, results of operations or cash flows.

On December 15, 2010, ORM and NRC, subsidiaries of the Company prior to the ORM Transaction and SES Business Transaction (see Note 1), respectively, were named as defendants in one of the several consolidated “master complaints” that have been filed in the overall MDL. The master complaint naming ORM and NRC asserts various claims on behalf of a putative 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 ORM and NRC in the master complaint have no merit and on February 28, 2011, ORM and NRC moved to dismiss all claims against them in the master complaint on legal grounds. On September 30, 2011, the Court granted in part and denied in part the motion to dismiss that ORM and NRC had filed (an amended decision was issued on October 4, 2011 that corrected several grammatical errors and non-substantive oversights in the original order). Although the Court refused to dismiss the referenced master complaint in its entirety at that time, the Court did recognize the validity of the “derivative immunity” and “implied preemption” arguments that ORM and NRC advanced and directed ORM and NRC to (i) conduct limited discovery to develop evidence to support those arguments and (ii) then re-assert the arguments. The Court did, however, dismiss all state-law claims and certain other claims that had been asserted in the referenced master complaint, and dismissed the claims of all plaintiffs that have failed to allege a legally-sufficient injury. A schedule for limited discovery and motion practice was established by the Court and, in accordance with that schedule, ORM and NRC filed for summary judgment re-asserting their derivative immunity and implied preemption arguments on May 18, 2012. Those motions were argued on July 13, 2012 and are still pending decision. In addition to the indemnity provided to ORM, pursuant to contractual agreements with the responsible party, the responsible party has agreed, subject to certain potential limitations, to indemnify and defend ORM and NRC in connection with these claims in the MDL. Although the Company is unable to estimate the potential exposure, if any, resulting from this matter, the Company does not expect it will have a material effect on the Company's consolidated financial position, results of operations or cash flows.

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by the Company to extinguish the fire. On April 15, 2011, ORM and NRC were named as defendants in James and Krista Pearson v. BP Exploration & Production, Inc. ("BP Exploration"), 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, ORM and NRC were named as defendants in Thomas Edward Black v. BP Exploration, 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 in Darnell 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 ORM and NRC (and the other defendants). Plaintiffs in this matter have since been granted leave to amend their complaint to include 410 additional individual plaintiffs. On October 3, 2012, ORM and NRC were served with a Rule 14(c) Third-Party Complaint by Jambon Supplier II, L.L.C. and Jambon Marine Holdings L.L.C. in their Limitation of Liability action, In the Matter of Jambon Supplier II, L.L.C., et al., No. 2:12-CV-00426 (E.D. La.). This Third-Party Complaint alleges that if claimant David Dinwiddie, who served as a clean-up crewmember aboard the M/V JAMBON SUPPLIER II vessel during the clean-up efforts, was injured as a result of his exposure to dispersants and chemicals during the course and scope of his employment, then said injuries were caused by the third-party defendants. On November 25, 2012, ORM was named as a defendant in Victoria Sanchez v. American Pollution Control Corp. et al., No. 2:12-CV-00164 (E.D. La.), a maritime suit filed by an individual who allegedly participated in the clean-up effort and sustained personal injuries during the course of such employment. On December 17, 2012, the Court unsealed a False Claims Act lawsuit naming ORM as a defendant, Dillon v. BP, PLC et al., No. 2:12-CV-00987 (E.D. La.)., which is a suit by an individual seeking damages and penalties arising from alleged false reports and claims made to the federal government with respect to the amount of oil burned and dispersed during the clean-up. The federal government has declined to intervene in this suit. On April 8, 2013, the Company, ORM, and NRC were named as defendants in William and Dianna Fitzgerald v. BP Exploration et al., No. 2:13-CV-00650 (E.D. La.), which is a suit by a husband and wife whose son allegedly participated in the clean-up effort and became ill as a result of his exposure to oil and dispersants. Finally, on April 17, 2013, ORM was named as a defendant in Danos et al. v. BP America Production Co. et al., No. 2:13-CV-03747 (removed to E.D. La.), which is a suit by eight individuals seeking damages for dispersant exposure either as a result of their work during clean-up operations or as a result of their residence in the Gulf. The Company is unable to estimate the potential exposure, if any, resulting from these matters but believes they are without merit and does not expect that they will have a material effect on its consolidated financial position, results of operations or cash flows.

On February 18, 2011, Triton Asset Leasing GmbH, Transocean Holdings LLC, Transocean Offshore Deepwater Drilling Inc., and Transocean Deepwater Inc. (collectively “Transocean”) named ORM 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 MDL, tendering to ORM and NRC the claims in the referenced master complaint that have already been asserted against ORM and NRC. Transocean, Cameron International Corporation, Halliburton Energy Services, Inc., and M-I L.L.C. also filed cross-claims against ORM and NRC for contribution and tort indemnity should they be found liable for any damages in Transocean's Limitation of Liability Act action and ORM and NRC have asserted counterclaims against those same parties for identical relief. Weatherford U.S., L.P. and Weatherford International, Inc. (collectively "Weatherford") had also filed cross-claims against ORM and NRC, but moved to voluntarily dismiss these cross-claims without prejudice on February 8, 2013. The Court granted Weatherford's motion that same day. Transcoean's limitation, and thus the remainder of the aforementioned cross-claims, remains pending. As indicated above, the Company is unable to estimate the potential exposure, if any, resulting from these actions but believes they are without merit and does not expect that these matters will have a material effect on its consolidated financial position, results of operations or cash flows.

On November 16, 2012, 668 individuals who served as beach clean-up workers in Escambia County, Florida during the Deepwater Horizon oil spill response commenced a civil action in the Circuit Court for the First Judicial Circuit of Florida, in and for Escambia County, Abney et al. v. Plant Performance Services, LLC et al., No. 2012-CA-002947, in which they allege, among other things, that ORM and other defendants engaged in the contamination of Florida waters and beaches in violation of Florida Statutes Chapter 376 and injured the plaintiffs by exposing them to dispersants during the course and scope of their employment. The case was removed to the U.S. District Court for the Northern District of Florida on January 13, 2013, Abney et al. v. Plant Performance Services, LLC et la., No. 3:13-CV-00024 (N.D. Fla.), and on January 16, 2013, the United States Judicial Panel on Multidistrict Litigation (“JPML”) issued a Conditional Transfer Order (“CTO”) transferring the case to the MDL, subject to any timely-filed notice of objection from the plaintiffs. Upon receipt of a notice of objection from the plaintiffs, a briefing schedule was set by the JPML, and so a stay of proceedings and suspension of deadlines was sought and obtained by the Court in the U.S. District Court for the Northern District of Florida. Following briefing before the JPML, the case was transferred to the U.S. District Court for the Eastern District of Louisiana and consolidated with the MDL on April 2, 2013. On April 22, 2013, a companion case to this matter was filed in the U.S. District Court for the Northern District of Florida, Abood et al. v. Plant Performance Services, LLC et al., No. 3:13-CV-00284 (N.D. Fla.), which alleges identical allegations against the same parties but names an additional 174 plaintiffs, all of whom served as clean-up workers in various Florida counties during the Deepwater Horizon oil spill response. A CTO was issued by the JPML on May 2, 2013, no objection was filed by the plaintiffs, and the case was transferred to the U.S. District Court for the Eastern District of Louisiana and consolidated with the MDL on May 10, 2013. By court order, both of these matters have been stayed until further notice. The Company is unable to estimate the potential exposure, if any,

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resulting from these matters but believes they are without merit and does not expect that these matters will have a material effect on its consolidated financial position, results of operations or cash flows.

Separately, on March 2, 2012, the Court announced that BP Exploration and BP America Production Company ("BP America") (collectively "BP") and the plaintiffs had reached an agreement on the terms of two proposed class action settlements that will resolve, among other things, plaintiffs' economic loss claims and clean-up related claims against BP. The parties filed their proposed settlement agreements on April 18, 2012 along with motions seeking preliminary approval of the settlements. The Court held a hearing on April 25, 2012 to consider those motions and preliminarily approved both settlements on May 2, 2012. A final fairness hearing took place on November 8, 2012. The Court granted final approval to the Economic and Property Damages Class Action Settlement ("E&P Settlement") on December 21, 2012, and granted final approval to the Medical Benefits Class Action Settlement ("Medical Settlement") on January 11, 2013. Both class action settlements were appealed to the Fifth Circuit. Following briefing and remand to the MDL court concerning a specific issue, the Medical Settlement appellants moved to voluntarily dismiss their appeals, which the Fifth Circuit granted on December 4, 2013. The Fifth Circuit affirmed the MDL Court's decision concerning the E&P Settlement on January 10, 2014. Although neither the Company, ORM, or NRC are parties to the settlement agreements, the Company, ORM, and NRC are listed as released parties on the releases accompanying both settlement agreements. Consequently, barring any further appeal, class members who did not file timely requests for exclusion will be barred from pursuing economic loss, property damage, personal injury, medical monitoring, and/or other released claims against the Company, ORM, and NRC. The Company believes these settlements have reduced the Company and ORM's potential exposure, if any, from some of the pending actions described above, and continues to evaluate the settlements' impacts on these cases.

On January 29, 2013, HEPACO, LLC ("HEPACO"), served a demand for arbitration upon ORM, in which HEPACO claims that ORM owes HEPACO an additional fee of $20,291,178.92 under the parties' Management Services Agreement (“MSA”), dated June 1, 2010. According to HEPACO, the MSA requires ORM to pay HEPACO an additional fee of 30% of total charges paid under the MSA ("Surcharge") to compensate HEPACO for U.S. Longshoremen's and Harbor Workers' insurance or Jones Act insurance and related risks attendant to the work when a contract requires labor to be performed over, adjoining and/or in water. ORM denies liability for the Surcharge, intends to vigorously defend against the claim, and has sought indemnity for any resulting judgment and related attorneys' fees from BP America and BP Exploration. ORM has advised BP that, pursuant to the Bridge Agreement HOU-WL4-3066 between BP and ORM, effective as of June 1, 2010, under which ORM managed and oversaw, for BP, subcontractors, such as HEPACO, in connection with on-shore services related to the BP Deepwater Horizon oil spill, BP ultimately is responsible for the payment of the Surcharge should HEPACO be determined to be entitled to recover it under the MSA.

ORM is defending against three collective action lawsuits, each asserting failure to pay overtime with respect to individuals who provided service on the Deepwater Horizon oil spill response (the “DPH FLSA Actions”) under the Fair Labor Standards Act (“FLSA”). These cases - Dennis Prejean v. O'Brien's Response Management Inc. (E.D. La., Case No.: 2:12-cv-01045) (the “Prejean Action”); Baylor Singleton et. al. v. O'Brien's Response Management Inc. et. al. (E.D. La., Case No.: 2:12-cv-01716) (the “Singleton Action”); and Himmerite et al. v. O'Brien's Response Management Inc. et al. (E.D. La., Case No.: 2:12-cv-01533) (the “Himmerite Action”) - were each brought on behalf of certain individuals who worked on the Deepwater Horizon oil spill response and who were classified as independent contractors. The Prejean, Himmerite and Singleton Actions were each filed in the United States District Court for the Eastern District of Louisiana and then subsequently consolidated with the overall MDL, in which the Himmerite and Singleton Actions were stayed pursuant to procedures of the MDL. However, all three cases were severed from the MDL on September 19, 2013, and referred to a Magistrate Judge for pretrial case management, including issuing a scheduling order, overseeing discovery, and any other preliminary matters. On October 31, 2013, ORM filed an answer in both the Himmerite and Singleton Actions. In the Himmerite and Singleton Actions, pursuant to an earlier tolling order entered by the Court, the limitations periods for potential plaintiffs to opt-in to those actions have been tolled pending further action by the Court. In the Prejean Action, ORM has answered the complaint and a scheduling order has been issued. On November 6, 2013, the Court conditionally certified a collective class in the Prejean Action. On December 9, 2013 the Court approved a jointly-submitted form notice and authorized the issuance of notice to all members of the conditionally certified class in the Prejean Action. On December 20, 2013, ORM served plaintiffs’ counsel with a list containing information for approximately 330 potential class members in the Prejean Action. Pursuant to the schedule entered by the Court, potential class members have until February 28, 2014 to opt into the class by submitting consent forms to their attorneys. Plaintiffs’ counsel has until March 10, 2014 to file all executed consent forms with the Court. Although the Court has conditionally certified the Prejean class, the Court has not made a final ruling on whether a class exists. The Company intends to vigorously defend its position that a class should not be certified, and intends on filing a motion to decertify the Prejean class. The Court has also not yet ruled on any of the merits of Plaintiffs’ claims. On February 11, 2014, the parties in the Singleton Action reached a full and final settlement agreement with respect to all of the Plaintiff’s individual claims, which is pending final execution by certain parties. Once executed, the settlement agreement will be filed with the Court for approval. The Company is unable to estimate the potential exposure, if any, resulting from any of these DPH FLSA Actions, but believes they are without merit and will continue to vigorously defend against them.

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In the course of the Company's business, it may agree to indemnify a party. If the indemnified party makes a successful claim for indemnification, the Company would be required to reimburse that party in accordance with the terms of the indemnification agreement. Indemnification agreements generally are subject to threshold amounts, specified claim periods and other restrictions and limitations.

In connection with the SES Business Transaction and the ORM Transaction, the Company remains contingently liable for certain obligations, including potential liabilities relating to work performed in connection with the Deepwater Horizon oil spill response. In the case of the SES Business Transaction, such potential liabilities may not exceed the purchase consideration received by the Company for the SES Business Transaction and in the case of the ORM Transaction are subject to a negotiated cap. The Company currently is indemnified under contractual agreements with BP.

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



ITEM 4.	MINE SAFETY DISCLOSURES

Not applicable.

EXECUTIVE OFFICERS OF THE REGISTRANT

Officers of SEACOR serve at the pleasure of the Board of Directors. The name, age and offices held by each of the executive officers of SEACOR as of December 31, 2013 were as follows:



Name	Age	Position
Charles Fabrikant	69	Executive Chairman of the Board and an officer and director of SEACOR and several of its subsidiaries. Effective September 2010, Mr. Fabrikant resigned as President and Chief Executive Officer of the Company and was designated Executive Chairman of the Board. Mr. Fabrikant is a Director of Diamond Offshore Drilling, Inc., a contract oil and gas driller, and Hawker Pacific Airservices, Limited, an aviation sales product support company. In addition, he is President of Fabrikant International Corporation, a privately owned corporation engaged in marine investments. Fabrikant International Corporation may be deemed an affiliate of SEACOR.
Oivind Lorentzen	63	Chief Executive Officer since September 2010. From June 1990 to September 2010, Mr. Lorentzen was President of Northern Navigation America, Inc., an investment management and ship-owning agency company concentrating in specialized marine transportation and ship finance. Mr. Lorentzen is also a director of Genessee & Wyoming Inc., an owner of short line and regional freight railroads, and a director of Blue Danube, Inc., an inland marine service provider.
Dick Fagerstal	53	Senior Vice President, Corporate Development and Finance of SEACOR since February 2003. Mr. Fagerstal served as Treasurer from May 2000 to November 2008. From August 1997 to February 2003, he served as Vice President of Finance. In addition, Mr. Fagerstal is an officer and director of certain SEACOR subsidiaries.
Paul Robinson	46	Senior Vice President, General Counsel and Corporate Secretary of SEACOR since November 2007. From 1999 through June 2007, Mr. Robinson held various positions at Comverse Technology, Inc., including Chief Operating Officer, Executive Vice President, General Counsel and Corporate Secretary. In addition, Mr. Robinson is an officer and director of certain SEACOR subsidiaries.
Richard Ryan	59	Senior Vice President of SEACOR since November 2005 and, from September 2005 to November 2005, was Vice President. Mr. Ryan has been Chief Financial Officer since September 2005. From December 1996, when he joined SEACOR, until June 2002, Mr. Ryan was International Controller and, from July 2002 until becoming Chief Financial Officer, served as Managing Director of SEACOR Marine (International) Ltd. In addition, Mr. Ryan is an officer and director of certain SEACOR subsidiaries.
Matthew Cenac	48	Vice President and Chief Accounting Officer of SEACOR since September 2005. From June 2003 to August 2005, Mr. Cenac was Corporate Controller of SEACOR. In addition, Mr. Cenac is an officer and director of certain SEACOR subsidiaries.

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PART II



ITEM 5.	MARKET FOR REGISTRANT’S COMMON EQUITY, RELATED STOCKHOLDER MATTERS AND ISSUER PURCHASES OF EQUITY SECURITIES

Market for the Company’s Common Stock

SEACOR’s Common Stock trades on the New York Stock Exchange (“NYSE”) under the trading symbol “CKH.” Set forth in the table below for the periods presented are the high and low sale prices for SEACOR’s Common Stock.



	HIGH		LOW
Fiscal Year Ending December 31, 2014:
First Quarter (through February 26, 2014)	$	92.42	$	81.22
Fiscal Year Ending December 31, 2013:
First Quarter	$	91.38	$	67.76
Second Quarter	$	84.21	$	69.78
Third Quarter	$	92.62	$	82.25
Fourth Quarter	$	99.00	$	89.19
Fiscal Year Ending December 31, 2012:
First Quarter	$	100.00	$	85.88
Second Quarter	$	96.65	$	79.78
Third Quarter	$	93.50	$	82.78
Fourth Quarter	$	91.30	$	81.90

As of February 26, 2014 , there were 230 holders of record of Common Stock.

On December 7, 2012, SEACOR’s Board of Directors declared a Special Cash Dividend of $5.00 per common share payable to shareholders of record on December 17, 2012, which was paid on or about December 26, 2012. Any payment of future dividends will be at the discretion of SEACOR’s Board of Directors and will depend upon, among other factors, the Company’s earnings, financial condition, current and anticipated capital requirements, plans for expansion, level of indebtedness and contractual restrictions, including the provisions of the Company’s other then-existing indebtedness. The payment of future cash dividends, if any, would be made only from assets legally available.

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Performance Graph

Set forth in the graph below is a comparison of the cumulative total return that a hypothetical investor would have earned assuming the investment of $100 over the five-year period commencing on December 31, 2008 in (i) the Common Stock of the Company, (ii) the Standard & Poor’s 500 Stock Index (“S&P 500”) and (iii) the Simmons Offshore Transportation Services Index, an index of oil service companies published by Simmons and Company International Limited (the “Simmons Peer Index”).



	December 31,
	2008	2009	2010	2011	2012	2013
Company ⁽¹⁾	100	114	174	154	153	215
S&P 500 ⁽¹⁾	100	126	146	149	172	228
Simmons Peer Index ⁽²⁾	100	140	163	153	161	207

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(1)	Assumes the reinvestment of dividends.


(2)	Simmons Peer Index is calculated as a simple average percentage in share prices and includes the following companies: Bourbon S.A., Bristow Group Inc., PHI Inc., Tidewater Inc., GulfMark Offshore, Inc., Kirby Corporation, Hornbeck Offshore Services, Inc., Solstad Offshore ASA, Farstad Shipping ASA, DOF ASA, Dockwise Ltd., and SEACOR Holdings Inc.

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Issuer Repurchases of Equity Securities

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. During the year ended December 31, 2013 , the Company acquired no shares of Common Stock for treasury. During the years ended December 31, 2012 and 2011 , the Company acquired for treasury 1,377,798 and 843,400 shares of Common Stock, respectively, for an aggregate purchase price of $119.6 million and $71.3 million , respectively. As of December 31, 2013 , SEACOR had authorization to repurchase $100.0 million of Common Stock.

This following table provides information with respect to purchases by the Company of shares of its Common Stock during the three months ended December 31, 2013 :



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⁾
10/01/13 – 10/31/13	—	$	—	—	$	100,000,000
11/01/13 – 11/30/13	—	$	—	—	$	100,000,000
12/01/13 – 12/31/13	—	$	—	—	$	100,000,000

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(1)	Since February 1997, SEACOR’s Board of Directors has authorized the repurchase of Common Stock, certain debt or a combination thereof. From time to time thereafter, and most recently on February 26, 2013, SEACOR’s Board of Directors increased the authority to repurchase Common Stock.

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ITEM 6.	SELECTED FINANCIAL DATA

SELECTED HISTORICAL FINANCIAL INFORMATION.

The following table sets forth, for the periods indicated, selected historical consolidated financial data for the Company (in thousands, except per share data). Such financial data should be read in conjunction with “Item 7. Management’s Discussion and Analysis of Financial Condition and Results of Operations” and “Item 8. Financial Statements and Supplementary Data” included in Parts II and IV, respectively, of this Annual Report on Form 10-K.



	Years Ended December 31,
	2013			2012			2011			2010			2009
Operating Revenues:
Offshore Marine Services	$	567,263		$	519,817		$	376,788		$	515,856		$	562,291
Inland River Services	215,613			226,561			187,657			161,697			155,098
Shipping Services	194,184			180,036			161,307			147,632			156,708
Illinois Corn Processing	193,682			188,650			—			—			—
Other ⁽¹⁾	79,532			195,731			306,867			350,716			240,547
Eliminations and Corporate	(3,002		)	(2,498		)	(122		)	(2,399		)	(5,003		)
	$	1,247,272		$	1,308,297		$	1,032,497		$	1,173,502		$	1,109,641
Operating Income	$	100,042		56,405			$	67,138		$	243,099		$	195,131
Other Income (Expenses):
Net interest expense	$	(27,125	)	(20,531		)	$	(26,880	)	$	(35,036	)	$	(54,791	)
Other ⁽²⁾	(5,285		)	18,698			(36,489		)	2,331			32,573
	$	(32,410	)	$	(1,833	)	$	(63,369	)	$	(32,705	)	$	(22,218	)
Net Income (Loss) attributable to SEACOR Holdings Inc.:
Continuing operations	$	47,195		$	25,383		$	9,273		$	141,962		$	117,978
Discontinued operations	(10,225		)	35,832			31,783			102,762			25,832
	$	36,970		$	61,215		$	41,056		$	244,724		$	143,810
Basic Earnings (Loss) Per Common Share of SEACOR Holdings Inc.:
Continuing operations	$	2.37		$	1.24		$	0.44		$	6.63		$	5.91
Discontinued operations	(0.51		)	1.76			1.50			4.80			1.30
	$	1.86		$	3.00		$	1.94		$	11.43		$	7.21
Diluted Earnings (Loss) Per Common Share of SEACOR Holdings Inc.:
Continuing operations	$	2.32		$	1.22		$	0.43		$	6.52		$	5.47
Discontinued operations	(0.50		)	1.73			1.48			4.73			1.10
	$	1.82		$	2.95		$	1.91		$	11.25		$	6.57
Statement of Cash Flows Data – provided by (used in):
Operating activities:
Continuing operations	$	185,026		$	81,487		$	114,628		$	217,348		$	226,833
Discontinued operations	24,298			189,216			21,305			181,467			66,603
Investing activities:
Continuing operations	(130,768		)	(138,629		)	(174,810		)	157,669			(31,398		)
Discontinued operations	(8,502		)	(7,665		)	(157,146		)	(138,441		)	(70,302		)
Financing activities:
Continuing operations	222,574			(247,528		)	(25,277		)	(544,681		)	(5,926		)
Discontinued operations	(14,017		)	(12,919		)	246,260			38,170			(401		)
Effects of exchange rate changes on cash and cash equivalents:
Continuing operations	477			2,087			1,517			(6,314		)	2,169
Discontinued operations	143			673			442			(1,696		)	(1,298		)
Capital expenditures of continuing operations	(195,901		)	(239,350		)	(165,264		)	(112,629		)	(82,407		)
Balance Sheet Data (at period end):
Cash and cash equivalents, restricted cash, marketable securities and Title XI and construction reserve funds	$	825,641		$	493,786		$	729,635		$	838,508		$	842,944
Total assets	3,116,233			3,700,794			3,928,134			3,760,389			3,723,619
Long-term debt, less current portion	834,118			655,309			710,352			661,542			748,503
Total SEACOR Holdings Inc. stockholders’ equity	1,400,852			1,713,654			1,789,607			1,787,237			1,957,262

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(1)	Other primarily includes the operations of the Company's emergency and crisis services activities prior to the ORM Transaction and its agricultural commodity trading and logistics activities.


(2)	Other principally includes gains and losses from debt extinguishment, marketable security, derivative and foreign currency transactions.

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FORWARD-LOOKING STATEMENTS

Management’s Discussion and Analysis of Financial Condition and Results of Operations below presents the Company’s operating results for each of the three years in the period ended December 31, 2013 , and its financial condition as of December 31, 2013 . Except for the historical information contained herein, this Annual Report on Form 10-K and other written and oral statements that the Company makes from time to time contain forward-looking statements, which involve substantial 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 expressed or implied by such forward-looking statements. The Company has tried, wherever possible, to identify such statements by using words such as “anticipate,” “estimate,” “expect,” “project,” “intend,” “believe,” “plan,” “target,” “forecast” and similar expressions in connection with any discussion of future operating or financial performance. Among the factors that could cause actual results to differ materially are those discussed in “Risks, Uncertainties and Other Factors That May Affect Future Results” in Item 1A of this Annual Report on Form 10-K. In addition, the following Management’s Discussion and Analysis of Financial Condition and Results of Operations should be read in connection with the information presented in the Company’s consolidated financial statements and the related notes to its consolidated financial statements included in Part IV of this Annual Report on Form 10-K.



ITEM 7.	MANAGEMENT’S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS

Overview

The Company’s operations are divided into four main business segments – Offshore Marine Services, Inland River Services, Shipping Services, and Illinois Corn Processing. The Company also has activities that are referred to and described under Other that primarily includes emergency and crisis services activities, agricultural commodity trading and logistics activities, lending and leasing activities and various other investments in 50% or less owned companies.

Discontinued Operations. On January 31, 2013, the Company completed the spin-off ("Spin-off") of Era Group Inc. (“Era Group”), the company that operated SEACOR's Aviation Services business segment, by means of a dividend to SEACOR's stockholders of all the issued and outstanding common stock of Era Group. Era Group filed a Registration Statement on Form 10 with the Securities and Exchange Commission, describing the Spin-off, that was declared effective on January 14, 2013. Era Group is now an independent company whose common stock is listed on the New York Stock Exchange under the symbol "ERA." Discontinued operations includes the historical financial position, results of operations and cash flows of Era Group as well as the operations previously reported as discontinued in prior filings of the Company's Annual Report on Form 10-K. During the year ended December 31, 2013, the Company made a determination to provide for income taxes of $10.1 million relating to the spin-off of Era Group effective as of January 31, 2013, the date of the spin-off.

Consolidated Results of Operations

Consolidated financial data for segment and geographic areas is reported in Part IV “Note 15. Major Customers and Segment Information” of this Annual Report on Form 10-K.

Offshore Marine Services

The market for offshore oil and gas drilling has historically been cyclical. Demand tends to be linked to the price of oil and gas and those prices tend to fluctuate based on many factors, including global economic activity and levels of reserves. Price levels for oil and gas can in themselves influence demand. In addition to the price of oil and gas, the availability of acreage, local tax incentives or disincentives, and requirements for maintaining interests in leases affect activity in the oil and gas industry. The cyclicality of the market is further exacerbated by the tendency in the industry to order capital assets as demand grows, often resulting in new capacity becoming available just as demand for oil and gas is peaking and activity is about to decline.

Offshore market conditions in the U.S. Gulf of Mexico were generally much improved in 2013 compared with 2012, however operating results for Offshore Marine Services were weighed down by a sluggish market for its AHTS vessels in premium services. Market conditions in international regions were stable during 2013. Offshore Marine Services continues to closely monitor the delivery of newly built vessels, which is creating situations of oversupply in the North Sea, Asia, Middle East and West Africa regions. Margins continue to be pressured by escalating operating costs, in particular the market for qualified and experienced crew has become more competitive resulting in higher wage rates.

Over the last several years, Offshore Marine Services has disposed of its old generation equipment while taking delivery of new vessels specifically designed to meet the changing requirements of the market. Since December 31, 2005, the average age of the fleet, excluding standby safety and wind farm utility vessels, has been reduced from 16 years to 12 years as of December 31, 2013. Offshore Marine Services entered 2014 with an increased order book for new equipment and believes its diverse fleet and broad geographical distribution of vessels will assist in capitalizing on opportunities created by increased activity levels. The Company's strong financial position should enable Offshore Marine Services to purchase, mobilize or upgrade vessels to meet changing market conditions.

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As of December 31, 2013, in addition to its existing fleet, Offshore Marine Services had new construction projects in progress including eleven U.S.-flag, DP-2 FSVs scheduled for delivery between the first quarter of 2014 and the first quarter of 2016; three U.S.-flag, DP-2 supply vessels scheduled for delivery between the second quarter of 2014 and the second quarter of 2015, which are to be sold to SEACOR OSV Partners I LP, a 50% or less owned company, upon delivery; and two foreign-flag wind farm utility vessels scheduled for delivery during the first half of 2014.

The number and type of vessels operated, their rates per day worked and their utilization levels are the key determinants of Offshore Marine Services' operating results and cash flows. Unless a vessel is cold-stacked (removed from operational service), there is little reduction in daily running costs and, consequently, operating margins are most sensitive to changes in rates per day worked and utilization.

The aggregate cost of Offshore Marine Services' operations depends primarily on the size and asset mix of the fleet. Offshore Marine Services' operating costs and expenses are grouped into the following categories:


•	personnel (primarily wages, benefits, payroll taxes, savings plans and travel for marine personnel);


•	repairs and maintenance (primarily routine repairs and maintenance and main engine overhauls which are performed in accordance with planned maintenance programs);


•	drydocking (primarily the cost of regulatory drydockings performed in accordance with applicable regulations);


•	insurance and loss reserves (primarily the cost of Hull and Machinery and Protection and Indemnity insurance premiums and loss deductibles);


•	fuel, lubes and supplies;


•	leased-in equipment (includes the cost of leasing vessels from lessors under bareboat charter arrangements and leasing equipment employed on vessels);


•	brokered vessel activity (the cost of chartering-in third party vessels under time charter arrangements to fulfill a customer requirement that cannot be filled by a vessel in the Company's fleet); and


•	other (communication costs, expenses incurred in mobilizing vessels between geographic regions, third party ship management fees, freight expenses, customs and importation duties, and other).

The Company expenses drydocking, engine overhaul and vessel mobilization costs as incurred. If a disproportionate number of drydockings, overhauls or mobilizations are undertaken in a particular fiscal year or quarter, operating expenses may vary significantly when compared with the prior year or prior quarter.

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Results of Operations



	2013			2012			2011
	Amount		Percent	Amount		Percent	Amount		Percent
	$ ’000		%	$ ’000		%	$ ’000		%
Operating Revenues:
United States, primarily U.S Gulf of Mexico	275,027		48	228,205		44	117,912		31
Africa, primarily West Africa	65,156		12	67,419		13	64,619		17
Middle East	51,263		9	49,804		9	46,590		13
Brazil, Mexico, Central and South America	48,676		9	51,836		10	57,659		15
Europe, primarily North Sea	101,946		18	102,611		20	74,663		20
Asia	25,195		4	19,942		4	15,345		4
	567,263		100	519,817		100	376,788		100
Costs and Expenses:
Operating:
Personnel	190,059		34	177,964		34	137,529		36
Repairs and maintenance	50,854		9	54,171		11	38,167		10
Drydocking	46,944		8	27,743		5	13,806		4
Insurance and loss reserves	16,950		3	15,654		3	12,972		3
Fuel, lubes and supplies	30,252		5	30,366		6	24,825		7
Leased-in equipment	28,956		5	21,850		4	18,114		5
Brokered vessel activity	93		—	461		—	3,262		1
Other	17,937		3	21,471		4	20,528		5
	382,045		67	349,680		67	269,203		71
Administrative and general	60,279		11	59,253		11	47,201		13
Depreciation and amortization	65,424		12	61,542		12	48,477		13
	507,748		90	470,475		90	364,881		97
Gains on Asset Dispositions	28,664		5	14,876		3	14,661		4
Operating Income	88,179		15	64,218		13	26,568		7
Other Income (Expense):
Derivative gains (losses), net	83		—	(243	)	—	—		—
Foreign currency gains (losses), net	(2,209	)	—	1,077		—	(3,102	)	(1	)
Other, net	3		—	2		—	278		—
Equity in Earnings of 50% or Less Owned Companies	13,522		2	5,214		1	9,189		3
Segment Profit	99,578		17	70,268		14	32,933		9

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



	2013			2012		2011
	Amount		Percent	Amount	Percent	Amount	Percent
	$ ’000		%	$ ’000	%	$ ’000	%
Operating Revenues:
Time charter:
United States, primarily U.S. Gulf of Mexico	262,303		46	215,023	41	109,005	29
Africa, primarily West Africa	61,449		11	65,544	12	59,465	16
Middle East	44,539		8	42,726	8	36,608	10
Brazil, Mexico, Central and South America	41,211		7	44,543	9	51,039	14
Europe, primarily North Sea	100,389		18	101,826	20	74,501	20
Asia	21,534		4	19,404	4	14,354	3
Total time charter	531,425		94	489,066	94	344,972	92
Bareboat charter	3,587		1	3,170	1	1,050	—
Brokered vessel activity	(2	)	—	660	—	4,219	1
Other marine services	32,253		5	26,921	5	26,547	7
	567,263		100	519,817	100	376,788	100

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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.



	2013			2012			2011			Q4 2013			Q4 2012
Rates Per Day Worked:
Anchor handling towing supply	$	26,539		$	26,158		$	28,874		$	26,773		$	25,059
Crew	8,108			7,350			6,712			8,627			7,231
Mini-supply	7,814			7,551			7,670			7,805			7,664
Standby safety	9,945			9,678			9,159			10,584			10,001
Supply	16,585			16,091			14,632			16,906			16,599
Towing supply	9,548			6,202			9,368			8,744			9,573
Specialty	28,876			18,872			11,753			31,856			20,635
Overall Average Rates Per Day Worked (excluding liftboats and wind farm utility)	13,131			12,032			11,234			13,934			12,121
Liftboats	22,998			19,407			—			26,072			20,673
Overall Average Rates Per Day Worked (excluding wind farm utility)	14,370			12,816			11,234			15,355			13,306
Wind farm utility	2,303			2,702			—			2,427			2,653
Overall Average Rates Per Day Worked	11,609			10,642			11,234			12,279			11,160
Utilization:
Anchor handling towing supply	74		%	65		%	52		%	74		%	63		%
Crew	88		%	87		%	72		%	84		%	91		%
Mini-supply	90		%	92		%	80		%	94		%	85		%
Standby safety	88		%	87		%	88		%	88		%	87		%
Supply	78		%	81		%	73		%	82		%	87		%
Towing supply	86		%	58		%	48		%	84		%	94		%
Specialty	53		%	56		%	64		%	81		%	57		%
Overall Fleet Utilization (excluding liftboats and wind farm utility)	83		%	81		%	72		%	83		%	84		%
Liftboats	72		%	77		%	—		%	73		%	80		%
Overall Fleet Utilization (excluding wind farm utility)	81		%	81		%	72		%	82		%	83		%
Wind farm utility	90		%	91		%	—		%	90		%	88		%
Overall Fleet Utilization	83		%	83		%	72		%	84		%	84		%
Available Days:
Anchor handling towing supply	6,205			6,290			6,205			1,564			1,632
Crew	11,701			13,091			14,708			2,740			3,220
Mini-supply	2,298			2,562			2,795			552			644
Standby Safety	8,760			8,886			9,288			2,208			2,208
Supply	6,247			6,641			6,685			1,564			1,656
Towing supply	730			1,092			1,771			184			184
Specialty	1,327			1,151			1,265			276			329
Overall Fleet Available Days (excluding liftboats and wind farm utility)	37,268			39,713			42,717			9,088			9,873
Liftboats	6,158			4,968			—			1,380			1,656
Overall Fleet Available Days (excluding liftboats and wind farm utility)	43,426			44,681			42,717			10,468			11,529
Wind farm utility	11,616			10,897			—			2,959			2,760
Overall Fleet Available Days	55,042			55,578			42,717			13,427			14,289

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2013 compared with 2012

Operating Revenues. Operating revenues were $47.4 million higher for the year ended December 31, 2013 compared with the year ended December 31, 2012. Time charter revenues were $42.4 million higher in 2013 compared with 2012. Results for 2013 included a full year’s contribution from the Company’s liftboat fleet that was acquired on March 30, 2012. During the first quarter of 2013, the liftboats contributed $20.8 million of operating revenues, of which $19.3 million was time charter revenues with an average day rate of $18,573 per day and a utilization rate of 64%.

Excluding the contribution of the wind farm utility vessels, fleet utilization was 81% in both periods and average day rates were $14,370 per day in 2013 compared with $12,816 per day in 2012, an increase of $1,554 per day, or 12%. The number of days available for charter was 43,426 in 2013 compared with 44,681 in 2012, a 1,255 day or 3% reduction.

In the U.S. Gulf of Mexico, time charter revenues were $47.3 million higher in 2013 compared with 2012, of which $19.3 million was due to the contribution of the liftboat fleet during the first quarter of 2013. Time charter revenues were $25.2 million higher due to an increase in average day rates, $12.5 million higher due to the repositioning of vessels between geographic regions, and $1.6 million higher due to net fleet additions and other changes in fleet mix. Time charter revenues were $5.8 million lower due to a decline in utilization, and $5.5 million lower due to the net effect of cold-stacking vessels, primarily two anchor handling towing supply vessels. As of December 31, 2013, the Company had no vessels cold-stacked in this region compared with two as of December 31, 2012.

In Africa, time charter revenues were $4.1 million lower in 2013 compared with 2012 primarily due to lower utilization.

In the Middle East, time charter revenues were $1.8 million higher in 2013 compared with 2012. Time charter revenues were $0.7 million higher due to improved utilization and $1.5 million higher due to increased average day rates. The repositioning of vessels between geographic regions and vessel dispositions reduced time charter revenues by $0.3 million and $0.1 million, respectively.

In Brazil, Mexico and Central and South America, time charter revenues were $3.3 million lower in 2013 compared with 2012. Time charter revenues were $4.2 million higher due to net fleet additions, $0.2 million higher due to the repositioning of vessels between geographic regions and $0.4 million higher due to increased average day rates. Lower utilization decreased time charter revenues by $8.1 million.

In Europe, excluding wind farm utility vessels, time charter revenues were $1.1 million higher in 2013 compared with 2012. Time charter revenues were $2.8 million higher due to improved average day rates. Lower utilization, vessel dispositions and unfavorable changes in currency exchange rates decreased time charter revenues by $0.1 million, $0.6 million and $1.0 million, respectively. For the wind farm utility vessels, time charter revenues were $2.5 million lower. Lower average day rates, lower utilization and unfavorable changes in currency exchange rates reduced time charter revenues for the wind farm utility vessels by $3.6 million, $0.3 million and $0.2 million, respectively. These decreases were partially offset by net fleet acquisitions, which increased time charter revenues by $1.6 million.

In Asia, time charter revenues were $2.1 million higher in 2013 compared with 2012. Time charter revenues were $0.9 million higher due to improved utilization and $3.7 million higher due to improved average day rates. Fleet dispositions reduced time charter revenues by $2.5 million.

Operating Expenses. Operating expenses were $32.4 million higher for the year ended December 31, 2013 compared with the year ended December 31, 2012, of which $16.4 million was attributable to the liftboat fleet during the first quarter of 2013.

Excluding the impact of the liftboat fleet during the first quarter of 2013, operating expenses were $16.0 million higher in 2013 compared with 2012. Personnel costs were $5.5 million higher primarily due to the recognition during 2013 of a $2.7 million charge for the Company’s share of a funding deficit arising from the March 2012 actuarial valuation of the United Kingdom Merchant Navy Officers’ Pension Fund, and increased seafarer compensation costs. Repair and maintenance expenses were $5.6 million lower primarily due to decreased expenditure in Africa, the Middle East, Brazil, Mexico, Central and South America and Asia. Drydocking expenses were $14.3 million higher primarily due to an increase in drydocking activity in the U.S. Gulf of Mexico, Africa and Europe. Fuel, lube and supply expenses were $1.3 million lower primarily due to a decrease in fuel consumption related to vessels repositioning between geographic regions. Leased-in equipment expense was $7.1 million higher primarily due to the expiration of amortized deferred gains upon the extension of leases for vessels previously sold and leased back and an increase in bareboat charter expense in the Middle East. Other operating expenses were $3.7 million lower primarily due to fewer vessels repositioning between geographic regions.

Administrative and General. Administrative and general expenses were $1.0 million higher for the year ended December 31, 2013 compared with the year ended December 31, 2012 primarily due to the acquisition of the liftboat fleet on March 30, 2012.

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Depreciation . Depreciation expenses were $3.9 million higher in the year ended December 31, 2013 compared with the year ended December 31, 2012 primarily due to the acquisition of the liftboat fleet on March 30, 2012.

Gains on Asset Dispositions. During the year ended December 31, 2013, the Company sold 19 offshore support vessels and other equipment for net proceeds of $174.1 million and gains of $40.3 million, of which $28.6 million was recognized currently and $11.7 million was deferred. In addition, the Company recognized previously deferred gains of $0.1 million. During the year ended December 31, 2012, the Company sold seven offshore support vessels and other equipment for net proceeds of $126.0 million and gains of $24.5 million, of which $5.5 million was recognized currently and $19.0 million was deferred. In addition, the Company recognized previously deferred gains of $9.4 million.

Operating Income. Excluding the impact of gains on asset dispositions and the impact of brokered vessel activity, operating income as a percentage of operating revenues was 10% in 2013 compared with 9% in 2012. The increase was primarily due to improved results in the U.S. Gulf of Mexico.

Equity in Earnings of 50% or Less Owned Companies, Net of Tax. Equity in earnings of 50% or less owned companies, net of tax, was $8.3 million higher for the year ended December 31, 2013 compared with the year ended December 31, 2012. During 2013, the Company acquired a controlling interest in C-Lift LLC through the acquisition of its partner’s 50% interest and recognized a $4.2 million gain, net of tax, included in equity in earnings of 50% or less owned companies upon marking its investment to fair value. In addition, equity earnings, net of tax, in the Company’s Mexican 50% or less owned company increased by $3.3 million during 2013.

2012 compared with 2011

Operating Revenues. Operating revenues were $143.0 million higher for the year ended December 31, 2012 compared with the year ended December 31, 2011. Results for 2012 included the contributions of the Company's wind farm utility vessels and liftboats that were acquired on December 22, 2011 and March 30, 2012, respectively. The wind farm utility vessels contributed $26.7 million of time charter revenues with an average day rate of $2,702 per day and a utilization rate of 91%. The liftboats contributed $80.4 million of operating revenues of which $74.5 million was time charter revenue with an average day rate of $19,407 per day and a utilization rate of 77%.

Excluding the contribution of the wind farm utility vessels and liftboats, time charter revenues were $42.9 million higher in 2012 compared with 2011. Overall fleet utilization was 81% compared with 72% in 2011. The number of days available for charter was 39,713 compared with 42,717 in 2011, a reduction of 3,004 days or 7%, due to net fleet dispositions. Overall average day rates were $12,032 per day compared with $11,234 per day in 2011, an increase of $798 per day or 7%. In overall terms, time charter revenues were $22.9 million higher due to improved utilization, $26.0 million higher due to higher average day rates and $0.1 million higher due to the impact of vessels mobilizing between geographic regions and other changes in fleet mix. Time charter revenues were $5.2 million lower due to net fleet dispositions and $0.9 million lower due to the impact of unfavorable changes in currency exchange rates.

In the U.S. Gulf of Mexico, time charter revenues were $106.0 million higher in 2012 compared with 2011 primarily due to the liftboat acquisition. Excluding the contribution of the liftboats, time charter revenues were $31.6 million higher of which $20.2 million was due to improved utilization, $13.9 million was due to higher average day rates and $2.9 million was due to the repositioning of vessels between geographic regions and other changes in fleet mix. Time charter revenues were $5.1 million lower due to the net effect of cold-stacking vessels and $0.3 million lower due to net fleet dispositions. As of December 31, 2012, the Company had two offshore support vessels cold-stacked in this region compared with four offshore support vessels as of December 31, 2011.

In Africa, time charter revenues were $6.1 million higher in 2012 compared with 2011. Time charter revenues were $4.7 million higher due to improved utilization, $1.7 million higher due to improved average day rates, and $1.1 million higher due to the repositioning of vessels between geographic regions. Time charter revenues were $1.4 million lower due to fleet dispositions.

In the Middle East, time charter revenues were $6.1 million higher in 2012 compared with 2011. Time charter revenues were $1.0 million higher due to improved utilization, $1.1 million higher due to improved average day rates, $1.6 million higher due to the repositioning of vessels between geographic regions, and $2.4 million higher due to net fleet additions.

In Brazil, Mexico and Central and South America, time charter revenues were $6.5 million lower in 2012 compared with 2011. Lower utilization, net fleet dispositions and the repositioning of vessels between geographic regions reduced time charter revenues by $4.6 million, $5.6 million and $2.3 million, respectively. Higher average day rates increased time charter revenues by $6.0 million.

In Europe, excluding the $26.7 million contribution of the wind farm utility vessels, time charter revenues were $0.6 million higher in 2012 compared with 2011. Time charter revenues were $4.0 million higher due to improved average day rates, and $2.1 million higher due to the repositioning of a vessel into the region. Lower utilization, vessel dispositions and unfavorable changes in currency exchange rates reduced time charter revenues by $1.9 million, $2.8 million and $0.8 million, respectively.

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In Asia, time charter revenues were $5.1 million higher in 2012 compared with 2011. Time charter revenues were $2.0 million higher due to improved utilization, $0.9 million higher due to improved average day rates, and $2.5 million higher due to fleet additions. The repositioning of vessels between geographic regions reduced time charter revenues by $0.3 million.

Operating Expenses. Operating expenses were $80.5 million higher for the year ended December 31, 2012 compared with the year ended December 31, 2011, of which $63.8 million was attributable to fleet additions including the wind farm utility vessels and liftboats. Excluding the impact of fleet additions, operating expenses were $16.7 million higher in 2012 compared with 2011. Personnel costs were $13.9 million higher primarily due to the return to service of previously cold-stacked vessels, increased activity levels, and inflationary pressures on rates of pay; repair and maintenance expenses were $4.8 million higher, primarily due to increased activity levels in the U.S Gulf of Mexico; drydocking expenses were $8.0 million higher, primarily due to increased drydocking activity in international regions; insurance and loss reserves expense was $1.9 million lower; fuel, lubes and supplies expenses were $1.8 million higher primarily due to increased activity levels in the U.S. Gulf of Mexico; leased-in equipment expense was $3.7 million higher primarily due to an increase in vessel charter-in expense for vessels operating in the U.S. Gulf of Mexico and Africa; and brokered vessel activity was $2.8 million lower due to reduced activity in West Africa.

Administrative and General. Administrative and general expenses were $12.1 million higher for the year ended December 31, 2012 compared with the year ended December 31, 2011, of which $11.1 million was attributable to administrative and general expenses associated with the wind farm utility vessels and liftboat businesses. In addition, the acceleration of restricted stock awards from 2013 and 2014 into 2012 added incremental expenses of $3.2 million in 2012 compared with 2011; salary and benefit expense were $0.9 million lower primarily due to reductions in head count; and legal fees decreased by $0.8 million primarily due to costs incurred during the year ended December 31, 2011 associated with business acquisitions.

Depreciation . Depreciation expenses were $13.1 million higher in the year ended December 31, 2012 compared with the year ended December 31, 2011 primarily due to the addition of the liftboat and wind farm utility vessel fleets.

Gains on Asset Dispositions. During the year ended December 31, 2012, the Company sold seven offshore support vessels and other equipment for net proceeds of $126.0 million and gains of $24.5 million, of which $5.5 million was recognized currently and $19.0 million was deferred. In addition, the Company recognized previously deferred gains of $9.4 million. During the year ended December 31, 2011, the Company sold eleven offshore support vessels and other equipment for net proceeds of $65.2 million and gains of $26.1 million, of which $13.8 million was recognized currently and $12.3 million was deferred. In addition, the Company recognized previously deferred gains of $0.9 million.

Operating Income. Excluding the impact of gains on asset dispositions and the impact of brokered vessel activity, operating income as a percentage of operating revenues was 9% in 2012 compared with 3% in 2011. The increase was primarily due to the contribution of the Company's liftboat fleet.

Equity in Earnings of 50% or Less Owned Companies, Net of Tax. Equity in earnings of 50% or less owned companies, net of tax, was $4.0 million lower for the year ended December 31, 2012 compared with the year ended December 31, 2011. During 2011, Offshore Marine Services' Mexican joint venture executed a business reorganization plan and issued an additional equity interest to an unrelated third party. Subsequent to the reorganization and issuance of the additional equity interest, the Company recognized an $8.4 million gain, net of tax. Earnings from another joint venture were $2.0 million higher in 2012 primarily due to the return to service of its vessel from cold-stack upon the commencement of a long-term charter in November 2011.

Inland River Services

Historically, activity levels for grain exports and non-grain imports are the key drivers in determining freight rates. The drought of 2012 and subsequent drop in U.S. grain and oilseed production had a negative impact on grain exports for the first three quarters of 2013 during which time cumulative exports through the U.S. Gulf of Mexico were down by seven million metric tons ("MMT"), or 22% compared with the same period in 2012. Earnings for the dry cargo barge fleet were negatively impacted by a weak pricing environment and lower utilization rates during the first eight months of 2013. In contrast to 2012, weather conditions were near ideal for the U.S. major grain/oilseed growing regions in 2013. Corn production improved by 29% in the U.S. and corn exports are projected to be nearly double for the 2013/14 crop year. As a result, fourth quarter U.S. Gulf of Mexico grain exports were up almost five MMT, or 29%, compared with the fourth quarter of 2012. The strong demand led to improved pricing and utilization rates for the last four months of 2013. River conditions were better in 2013 compared with 2012, allowing for operational efficiencies and decreased towing costs.

The market for liquid barge transportation continued to be driven by high refinery production and domestic demand for refined products. Crude oil transportation through the U.S. Inland River Waterways into the U.S. Gulf of Mexico continued to grow in 2013 and barge demand remained strong. Increased demand for the movement of chemicals, clean oil feedstock, blending components and finished products also supported utilization of the fleet. The water-borne market was further strengthened by the fact that alternatives such as domestic pipelines and rail were operated at high capacity levels throughout the year.

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During 2012, the Company’s high-speed multi-modal liquid terminal facility ("Gateway Terminals") was converted to accommodate crude oil transfer and storage. The conversion was completed in the fourth quarter of 2012 but throughput was limited for much of 2013 by the use of alternative distribution channels, primarily rail, for the movement of Bakken crude oil to U.S. East and West coast refineries. In addition, Gateway Terminals was impacted by delays in the construction of Canadian infrastructure projects to facilitate the loading of unit trains that were not completed until December 2013.

On December 31, 2011, the Company acquired certain terminal and fleeting assets and certain related affiliates from Lewis & Clark Marine, Inc. (“Lewis & Clark”). During 2013, the terminal operation in the St. Louis area was negatively impacted by lower volumes of grain and grain products primarily due to the drought of 2012. Shipments of imported fertilizer and industrial products were higher in 2013 compared with 2012. During 2013, the major rail carriers offered competitive pricing for shipments to St. Louis compared with the Pacific Northwest and the Center Gulf Region (New Orleans-Houston) thus maintaining St. Louis as a competitive delivery point for Lewis & Clark customers.

The Lewis & Clark fleeting operation benefited from the high level of barge traffic to terminals, higher refining activity and greater volumes of crude being transloaded from rail or pipeline to barges in St. Louis Harbor in 2013. The region's competitive transportation advantages both from a cost perspective and its flexibility in offering different shipping options has attracted companies to build more river terminals and upgrade existing facilities and refineries. Agricultural, industrial products, coal, crude oil and chemicals are the main commodities moving through the region.

At the end of 2013, the average age of the Inland River Services' dry cargo barge fleet was nine years old, which the Company believes is among the youngest fleets operating on the U.S. Inland River Waterways system. Inland River Services believes that approximately 23% of the dry cargo barge fleet operating on the U.S. Inland River Waterways is over 20 years old. Inland River Services believes the relatively young age of its dry cargo barge fleet enhances its availability and reliability, reduces downtime for repairs and obviates, for the immediate future, the necessity of replacement capital expenditures to maintain its fleet size and revenue generating capacity.

The aggregate cost of Inland River Services' operations depends primarily on the size and mix of its fleet. Inland River Services' operating costs and expenses are grouped into the following categories:


•	barge logistics (primarily towing, switching, fleeting and cleaning costs);


•	personnel (primarily wages, benefits, payroll taxes, savings plans and travel for marine personnel);


•	repairs and maintenance (primarily repairs and maintenance on towboats, which are performed in accordance with planned maintenance programs);


•	insurance and loss reserves (primarily the cost of Hull and Machinery, Protection and Indemnity and Cargo insurance premiums and loss deductibles);


•	fuel, lubes and supplies;


•	leased-in equipment (includes the cost of leasing equipment, including bought-in freight and towboats); and


•	other (rail car logistics, property taxes and other).

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Results of Operations



	2013				2012				2011
	Amount		Percent		Amount		Percent		Amount	Percent
	$ ’000		%		$ ’000		%		$ ’000	%
Operating Revenues:
United States	213,661		99		225,205		99		187,657	100
Foreign	1,952		1		1,356		1		—	—
	215,613		100		226,561		100		187,657	100
Costs and Expenses:
Operating:
Barge logistics	80,501		37		90,391		40		80,506	43
Personnel	23,532		11		22,868		10		13,255	7
Repairs and maintenance	9,879		5		8,256		4		4,443	3
Insurance and loss reserves	3,715		2		3,639		2		2,392	1
Fuel, lubes and supplies	6,327		3		6,424		3		2,320	1
Leased-in equipment	16,105		7		14,550		6		10,370	6
Other	12,468		6		12,468		5		6,213	3
	152,527		71		158,596		70		119,499	64
Administrative and general	15,410		7		15,924		7		11,339	6
Depreciation and amortization	28,461		13		28,270		12		23,494	12
	196,398		91		202,790		89		154,332	82
Gains on Asset Dispositions	6,555		3		7,666		3		2,964	1
Operating Income	25,770		12		31,437		14		36,289	19
Other Income (Expense):
Foreign currency gains (losses), net	(167	)	—		84		—		—	—
Other, net	—		—		(1	)	—		4	—
Equity in Earnings (Losses) of 50% or Less Owned Companies	(7,626	)	(4	)	(3,310	)	(1	)	4,136	2
Segment Profit	17,977		8		28,210		13		40,429	21

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



	2013				2012				2011
	Amount		Percent		Amount		Percent		Amount		Percent
	$ ’000		%		$ ’000		%		$ ’000		%
Operating Revenues:
Dry cargo barge pools	97,819		45		112,961		50		111,801		59
Charter-out of dry cargo barges	5,846		3		7,686		3		9,255		5
Liquid unit tow operation	42,258		20		36,990		16		36,532		19
10,000 barrel liquid tank barge operations	23,740		11		19,704		9		16,447		9
Terminal operations	18,234		8		21,161		9		5,536		3
Fleeting operations	20,826		10		19,092		9		1,277		1
Inland river towboat operations and other activities	19,490		9		22,522		10		18,016		10
Inland river eliminations	(12,600	)	(6	)	(13,555	)	(6	)	(11,207	)	(6	)
	215,613		100		226,561		100		187,657		100

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Dry Cargo Barge Pools Operating Data. The following table presents, for the years 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.



	2013		2012		2011
	Tons	%	Tons	%	Tons	%
Tons Moved (in thousands):
Grain	3,731	63	3,963	65	4,691	74
Non-Grain	2,193	37	2,097	35	1,627	26
	5,924	100	6,060	100	6,318	100

	Days		Days		Days
Available Barge Days	207,166		208,630		196,820

2013 compared with 2012

Operating Revenues. Operating revenues were $10.9 million lower for the year ended December 31, 2013 compared with the year ended December 31, 2012. Operating revenues from the dry cargo barge pools were $15.1 million lower in 2013 compared with 2012. During 2013, the dry cargo markets were negatively affected by the drought conditions of 2012, which resulted in reduced demand for barge freight and a weaker pricing environment for most of the year. Operating revenues from the charter-out of dry cargo barges were $1.8 million lower primarily due to the expiration of certain charter contracts and the return of equipment to the dry cargo barge pools. Operating revenues from the liquid unit tow operations were $5.3 million higher primarily due to higher rates in response to the continued strong demand for water-borne movements of crude oil, refined products, chemicals and blending components. Operating revenues from 10,000 barrel liquid tank barge operations were $4.0 million higher primarily due to increased demand and the placement of additional equipment in service. Operating revenues from terminal operations were $2.9 million lower, of which $1.5 million was due to reduced throughput at Gateway Terminals following its conversion to accommodate crude oil transfer and storage. The remaining shortfall was attributable to decreased volumes of corn and grain products through the St. Louis Harbor in 2013 primarily due to the 2012 drought. Operating revenues from fleeting operations were $1.7 million higher primarily due to increased volumes of petroleum products flowing through the St. Louis Harbor. Operating revenues from inland river towboat operations and other activities were $3.0 million lower primarily due to lower activity levels at the Company's machine shop, gear and engine, and barge and towboat repair facilities ("SCF Services") and the conclusion of a boat charter arrangement.

Operating Expenses. Operating expenses were $6.1 million lower in the year ended December 31, 2013 compared with the year ended December 31, 2012. Barge logistics expenses were $9.9 million lower primarily due to lower towing and switching expenses as a result of decreased demand for dry cargo barge freight, partially offset by increased activity in the 10,000 barrel liquid tank barge operation. Repairs and maintenance expenses were $1.6 million higher primarily due to mandatory five-year United States Coast Guard inspections and related repairs in the liquid unit tow operation. Leased-in equipment expenses were $1.6 million higher primarily due to the cost of additional equipment and leasing-in equipment that had been sold under sale and leaseback agreements.

Administrative and General. Administrative and general expenses were $0.5 million lower in the year ended December 31, 2013 compared with the year ended December 31, 2012 primarily due to the acceleration of restricted stock awards from 2013 and 2014 into 2012.

Gains on Asset Dispositions . During the year ended December 31, 2013, the Company sold 16 dry cargo barges, eight 30,000 barrel tank barges and other equipment for net proceeds of $30.1 million and gains of $6.6 million, of which $3.7 million was recognized currently and $2.9 million was deferred. In addition, the Company recognized previously deferred gains of $2.9 million. During the year ended December 31, 2012, the Company sold nine dry cargo barges, one liquid tank barge, two towboats and other equipment for net proceeds of $13.2 million and gains of $5.1 million, of which $4.9 million was recognized currently and $0.2 million was deferred. In addition, the company recognized previously deferred gains of $2.8 million.

Operating Income. Excluding the impact of gains on sale of asset dispositions, operating income as a percentage of operating revenues was 9% for the year ended December 31, 2013 compared with 11% for the year ended December 31, 2012. The decrease was primarily due to lower earnings from dry cargo barge pool operations and a reduction in throughput at Gateway Terminals as a result of the conversion to accommodate crude oil transfer and storage.

Equity in Earnings of 50% or Less Owned Companies, Net of Tax. During the year ended December 31, 2013, the Company recognized $7.6 million of equity in losses of 50% or less owned companies, net of tax, primarily from losses relating to the structural failure of a terminal facility at the Port of Ibicuy, Argentina. In addition, the results of the Company's grain handling and inland river towboat investments were both lower compared with the prior year due to the impact of the 2012 drought

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on the crop harvest and difficult river operating conditions for a portion of 2013. During the year ended December 31, 2012, the Company recognized $3.3 million of equity in losses of 50% or less owned companies, net of tax, primarily as a result of difficult operating conditions and provisions for uncertain insurance recoveries related to the structural failure of a terminal facility at the Port of Ibicuy, Argentina.

2012 compared with 2011

Operating Revenues. Operating revenues were $38.9 million higher for the year ended December 31, 2012 compared with the year ended December 31, 2011. Excluding the impact of the Lewis & Clark acquisition which occurred on December 31, 2011 and accounted for a $19.5 million and $15.9 million increase in fleeting and terminal operating revenues, respectively, operating revenues were $3.5 million higher. Operating revenues from the dry cargo barge pools were $1.2 million higher in 2012 compared with 2011. The dry cargo markets were negatively affected by drought conditions throughout 2012, impacting crop yields and causing river closures and restricted tow sizes. The resulting reductions in operating revenues were offset by increased non-grain tonnage movements. Operating revenues from the liquid unit tow and 10,000 barrel liquid tank barge operations were $3.7 million higher primarily due to increased demand and the deployment of additional equipment. Operating revenues from inland river towboat operations and other activities were $4.5 million higher primarily due to higher activity levels for SCF Services and the Company's acquisition of a controlling interest in Naviera in December 2011. These increases were partially offset by a $1.6 million reduction in operating revenues from the charter-out of dry cargo barges primarily due to the expiration of charter contracts and the return of the equipment to the dry cargo barge pools, and a $1.4 million reduction in operating revenues at Gateway Terminals primarily due to lower ethanol throughput activity.

Operating Expenses. Operating expenses were $39.1 million higher in the year ended December 31, 2012 compared with the year ended December 31, 2011. Excluding the impact of the Lewis & Clark acquisition and the Company's acquisition of Naviera, which collectively accounted for $24.3 million of the increase, operating expenses were $14.8 million higher. Barge logistics expenses were $9.9 million higher primarily due to higher towing and switching expenses as a result of low water and poor operating conditions and higher fuel prices. Operating expenses in the unit tow operations were $3.8 million higher primarily due to costs incurred for mandatory five-year United States Coast Guard inspections and related repairs, an increase in towing charter-in expense as a consequence of the additional equipment and higher repair and maintenance costs. Operating expenses were $0.6 million higher at Gateway Terminals primarily due to dredging costs incurred as a consequence of low water levels and were $0.5 million higher for inland river towboat operations primarily due to higher fuel prices.

Administrative and General. Administrative and general expenses were $4.6 million higher in the year ended December 31, 2012 compared with the year ended December 31, 2011. Excluding the impact of the Lewis & Clark acquisition and the Company's acquisition of a controlling interest in Naviera, which collectively accounted for $3.9 million of the increase, administrative and general expenses were $0.7 million higher primarily due to the acceleration of restricted stock awards from 2013 and 2014 into 2012.

Depreciation and Amortization. Depreciation and amortization expenses were $4.8 million higher in the year ended December 31, 2012 compared with the year ended December 31, 2011. Excluding the impact of the Lewis & Clark acquisition and the Company's acquisition of a controlling interest in Naviera, which collectively accounted for $3.8 million of the increase, depreciation and amortization was $1.0 million higher primarily due to additional equipment following the acquisition of a controlling interest in Soylutions LLC in July 2011.

Gains on Asset Dispositions . During the year ended December 31, 2012, the Company sold nine dry cargo barges, one liquid tank barge, two towboats and other equipment for net proceeds of $13.2 million and gains of $5.1 million, of which $4.9 million was recognized currently and $0.2 million was deferred. In addition, the company recognized previously deferred gains of $2.8 million. During the year ended December 31, 2011, the Company sold seven barges, one towboat and other equipment for net proceeds of $5.1 million and gains of $0.2 million. In addition, the Company recognized previously deferred gains of $2.8 million.

Operating Income. Excluding the impact of gains on sale of asset dispositions, operating income as a percentage of operating revenues was 11% for the year ended December 31, 2012 compared with 18% for the year ended December 31, 2011. The decrease was primarily due to higher operating costs in the Company's dry cargo barge pools as a result of poor operating conditions, a reduction in activity levels at Gateway Terminals and the inclusion of losses from Naviera.

Equity in Earnings of 50% or Less Owned Companies, Net of Tax. During the year ended December 31, 2012, the Company recognized $3.3 million of equity in losses of 50% or less owned companies, net of tax, primarily as a result of difficult operating conditions and provisions for uncertain insurance recoveries related to the structural failure of a terminal facility at the Port of Ibicuy, Argentina. During the year ended December 31, 2011 , the Company recognized $4.1 million of equity in earnings of 50% or less owned companies, net of tax, primarily due to the recognition of a $2.3 million gain, net of tax, following the acquisition of a controlling interest in Soylutions LLC.

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Shipping Services

Demand for the Company’s U.S-flag petroleum transportation services is dependent on several factors, including crude oil and petroleum production, refining activity levels in the United States, domestic consumer and commercial consumption of petroleum products and chemicals and competition from pipelines and foreign imports of oil products.

As of December 31, 2013 , the Company believes that third parties have contracted to build approximately twelve U.S.-flag tank vessels with deliveries commencing in 2015 that could compete with Shipping Services’ equipment.

The demand for Dorian LPG's gas transportation services is dependent on several factors, including available supply of VLGC's, global LPG production levels and global demand for LPG.

As of December 31, 2013 , the Company believes that third parties have contracted to build approximately 56 foreign-flag VLGC's with deliveries commencing in 2014 that could compete with Dorian LPG's equipment.

The demand for harbor towing and bunkering services is affected by the volume, size and type of vessels calling within the U.S. ports where the Company's tugs are deployed. Bunkering services are provided under a long term, fixed price contract serving a single customer who markets bunkers within the Netherlands Antilles. The number of U.S.-flag harbor tugs in service is hard to ascertain. Operators continue to upgrade their fleets with newly built, larger horsepower azimuth drive tugs to service changing customer requirements.

The demand for liner and short-sea shipping services is dependent on several factors, including the volume of new development projects, demand for consumer and durable goods and tourism trends within the Caribbean.

G&G Shipping Acquisition. In April 2011, Shipping 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. Effective December 31, 2012, the Company became the sole shareholder of the operating company.

Shipping Services’ operating costs and expenses are grouped into the following categories:


•	personnel (primarily wages, benefits, payroll taxes, savings plans and travel for marine personnel);


•	repairs and maintenance (primarily routine repairs and maintenance and overhauls which are performed in accordance with planned maintenance programs);


•	drydocking (primarily the cost of regulatory drydockings performed in accordance with applicable regulations);


•	insurance and loss reserves (primarily the cost of Hull and Machinery and Protection and Indemnity insurance premiums and loss deductibles);


•	fuel, lubes and supplies;


•	leased-in equipment (includes the cost of leasing tankers from lessors under bareboat charter arrangements); and


•	other (port charges, freight, vessel inspection costs and other).

Vessel drydockings are performed regularly in accordance with applicable regulations and the Company expenses drydocking costs as incurred. If a disproportionate number of drydockings are undertaken in a particular fiscal year or quarter, operating expenses may vary significantly when compared with a prior year or prior quarter.

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Results of Operations



	2013				2012				2011
	Amount		Percent		Amount		Percent		Amount		Percent
	$ ’000		%		$ ’000		%		$ ’000		%
Operating Revenues:
United States	163,364		84		149,733		83		137,416		85
Foreign	30,820		16		30,303		17		23,891		15
	194,184		100		180,036		100		161,307		100
Costs and Expenses:
Operating:
Personnel	34,664		18		32,880		18		32,287		20
Repairs and maintenance	10,035		5		10,995		6		6,285		4
Drydocking	14,721		8		7,229		4		3,804		2
Insurance and loss reserves	3,785		2		3,913		2		3,988		2
Fuel, lubes and supplies	17,037		9		17,643		10		13,924		9
Leased-in equipment	18,531		9		18,168		10		15,567		10
Other	18,510		9		21,297		12		14,853		9
	117,283		60		112,125		62		90,708		56
Administrative and general	22,073		11		22,553		13		18,301		11
Depreciation and amortization	31,299		16		30,635		17		30,214		19
	170,655		87		165,313		92		139,223		86
Gains on Asset Dispositions and Impairments, Net	240		—		3,128		2		1,355		1
Operating Income (Loss)	23,769		13		17,851		10		23,439		15
Other Income (Expense):
Foreign currency gains (losses), net	(14	)	—		6		—		(30	)	—
Other, net	760		—		7,452		4		307		—
Equity in Losses of 50% or Less Owned Companies	(2,945	)	(2	)	(4,148	)	(2	)	(74	)	—
Segment Profit	21,570		11		21,161		12		23,642		15

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



	2013		2012		2011
	Amount	Percent	Amount	Percent	Amount	Percent
	$ ’000	%	$ ’000	%	$ ’000	%
Operating Revenues:
Petroleum transportation:
Time charter	46,693	24	37,086	21	35,378	22
Bareboat charter	34,689	18	34,785	19	34,690	22
Harbor towing and bunkering	76,539	39	73,401	41	68,521	42
Short-sea transportation	35,788	19	34,349	19	22,518	14
Technical management services	475	—	415	—	200	—
	194,184	100	180,036	100	161,307	100

2013 compared with 2012

Operating Revenues. Operating revenues were $14.1 million higher for the year ended December 31, 2013 compared with the year ended December 31, 2012. Time charter revenues for petroleum transportation were $9.6 million higher primarily due to an increase in time charter rates for three vessels, partially offset by increased out-of-service days for drydocking. Operating revenues for harbor towing and bunkering were $3.1 million higher primarily due to a 7% increase in the number of tug jobs. Operating revenues for short-sea transportation were $1.4 million higher primarily due to increased cargo shipping demand.

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Operating Expenses. Operating expenses were $5.2 million higher for the year ended December 31, 2013 compared with the year ended December 31, 2012. Personnel costs were $1.8 million higher primarily due to union wage rate increases. Repair and maintenance costs were $1.0 million lower primarily due to the impact of topside repair costs for one U.S.-flag product tanker in 2012, partially offset by major repair costs for one harbor tug in 2013. Drydocking costs were $7.5 million higher primarily due to regulatory drydockings for two U.S.-flag product tankers and more drydocking activity for harbor towing and bunkering. Other operating expenses were $2.8 million lower primarily due to a reduction in stevedoring expenses for short-sea transportation vessels and lower mobilization costs for harbor tugs.

Administrative and General. Administrative and general expenses were $0.5 million lower for the year ended December 31, 2013 compared with the year ended December 31, 2012 primarily due to a legal settlement and associated fees in 2012, partially offset by higher wage and benefit costs.

Depreciation and Amortization. Depreciation and amortization expenses were $0.7 million higher for the year ended December 31, 2013 primarily due to capital improvements to certain of the Company's bunkering and petroleum transportation equipment, the addition of one foreign-flag RORO vessel and placing one harbor tug in service prior to being sold and leased back.

Gain on Asset Dispositions and Impairments, Net. During the year ended December 31, 2013, the Company sold eight harbor tugs and other equipment for net proceeds of $62.2 million and gains of $15.4 million, of which $3.2 million was recognized currently and $12.2 million was deferred. In addition, the Company recognized an impairment charge of $3.0 million related to two U.S.-flag harbor tugs while under construction, which were sold and leased back upon their completion. During the year ended December 31, 2012, the Company sold one foreign-flag RORO vessel and five harbor tugs for net proceeds of $20.3 million and gains of $7.1 million, of which $3.1 million was recognized and $4.0 million was deferred.

Operating Income. Excluding the impact of gains on asset dispositions and impairments, operating income as a percentage of operating revenues was 12% in 2013 compared with 8% in 2012. The increase was primarily due to the improvements in operating revenues, partially offset by higher drydocking costs noted above.

Other, net. Other, net was $6.7 million lower primarily due to a $7.0 million termination payment from a customer following the cancellation of a long-term charter in 2012.

Equity in Earnings of 50% or Less Owned Companies, Net of Tax. Equity in earnings for both periods reflects losses incurred by the Company's Jones Act liner transportation 50% or less owned company, partially offset in 2013 by earnings from the Company's VLGC 50% or less owned company.

2012 compared with 2011

Operating Revenues. Operating revenues were $18.7 million higher for the year ended December 31, 2012 compared with the year ended December 31, 2011. Time charter revenues for petroleum transportation were $1.7 million higher, primarily due to an increase in time charter rates for three vessels. Operating revenues for harbor towing and bunkering were $4.9 million higher primarily due to more traffic, tariff increases in certain ports and short-term charter revenues. Operating revenues for short-sea transportation were $11.8 million higher reflecting the G&G Shipping Acquisition discussed above.

Operating Expenses. Operating expenses were $21.4 million higher for the year ended December 31, 2012 compared with the year ended December 31, 2011. Repair and maintenance expenses were $4.7 million higher primarily due to topside repairs on one U.S.-flag product tanker, increased expenses for harbor tugs and a full year of activity for the foreign-flag RORO vessels. Drydocking costs were $3.4 million higher primarily due to a regulatory drydocking for one U.S.-flag product tanker, and more drydocking activity for harbor tugs. Fuel, lubes and supplies were $3.7 million higher primarily due to a full year of activity for the foreign-flag RORO vessels. Leased-in equipment was $2.6 million higher primarily due to the requirement to charter-in third party vessels to cover tug out-of-service time due to drydockings, repositionings and repairs. Other operating expenses were $6.4 million higher primarily due to a full year of activity for the foreign-flag RORO vessels.

Administrative and General. Administrative and general expenses were $4.3 million higher for the year ended December 31, 2012 compared with the year ended December 31, 2011 primarily due to a full year of activity for G&G Shipping and the acceleration of restricted stock awards from 2013 and 2014 into the current year.

Depreciation and Amortization. Depreciation and Amortization expenses were $0.4 million higher for the year ended December 31, 2012 primarily due to a full year of activity for the assets acquired in the G&G Shipping Acquisition, partially offset by a decrease in depreciation expense from the sale of a product tanker during 2011.

Gain on Asset Dispositions and Impairments, Net. During the year ended December 31, 2012, Shipping Services sold one foreign-flag RORO vessel and five harbor tugs for net proceeds of $20.3 million and gains of $7.1 million, of which $3.1 million was recognized currently and $4.0 million was deferred. During the year ended December 31, 2011, Shipping Services sold one U.S -flag product tanker and two harbor tugs for net proceeds of $11.5 million and gains of $1.4 million.

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Operating Income. Excluding the impact of gains (losses) on asset dispositions and impairments, operating income as a percentage of operating revenues was 8% in 2012 compared with 14% in 2011. The reduction was primarily due to the increases in repairs and maintenance expenses, more drydocking activity and higher leased-in equipment costs noted above.

Other, net. Other, net was $7.1 million higher primarily due to a $7.0 million termination payment from a customer following the cancellation of a long-term charter.

Equity in Earnings of 50% or Less Owned Companies, Net of Tax. Equity in earnings for the year ended December 31, 2012 reflects losses incurred by the Company's liner transportation joint venture, an operator of U.S.-flag deck and RORO barges, partially offset by earnings from the Company's joint venture that began operating a U.S.-flag articulated tug-barge on the Great Lakes in April 2012.

Illinois Corn Processing

Illinois Corn Processing LLC ("ICP") owns and operates an alcohol production facility in Pekin, Illinois that produces a sales product mix including fuel grade ethanol and various high quality alcohol grades used in the food, beverage, industrial and petrochemical end-markets. The profitability of ICP is affected by the availability and market prices of energy and agricultural commodities and the availability and cost of transportation and logistics services, including truck, barge, rail and ocean freight. On February 1, 2012, the Company obtained a controlling interest in ICP through its acquisition of a portion of its partner's interest following which, the Company owned 70%.

In recent years, the fuel ethanol industry in the U.S. has grown significantly producing 13.0 billion gallons of ethanol in the twelve months ending October 2013, according to the U.S. Energy Information Administration. The Renewable Fuels Association ("RFA"), an industry trade association, in its 2014 Ethanol Industry Outlook , reported there are 211 existing ethanol production facilities in the U.S. with nameplate capacity to produce 14.9 billion gallons of ethanol per year. The RFA reports that currently operating ethanol facilities have a combined capability of producing 13.8 billion gallons per year, with another 0.2 billion gallons per year of capacity under construction. Approximately 1.1 billion gallons per year of U.S. ethanol production capacity is currently idled.

In the U.S., fuel grade ethanol is principally used in the domestic gasoline market as an octane enhancer to help refiners meet federal and state air emission standards, and as an alternative fuel extender. U.S. ethanol is produced mainly from corn and primarily competes globally with Brazilian ethanol, which is produced mainly from sugar.

Through the first three quarters of 2013, U.S.-produced ethanol was more expensive than Brazilian-produced ethanol, due to the high price of corn, which had risen significantly following the severe 2012 U.S. drought and consequent poor corn crop. In contrast, the 2013 U.S. corn crop was abundant, causing the price of corn to fall significantly and by the fourth quarter of 2013, U.S.-produced ethanol had become cost competitive with Brazilian sugar-based ethanol. In the fourth quarter of 2013, Brazilian ethanol imports to the U.S. dropped significantly and U.S. exports to Brazil and other countries rose. This shift in price resulted in an increase in the volume of U.S. exports in the fourth quarter of 2013, which in turn kept U.S. stock levels of ethanol at historically tight volumes. Consequently, beginning in the fourth quarter of 2013, profit margins for the U.S. ethanol industry improved significantly. The Company expects U.S. ethanol margins to remain positive through at least the first half of 2014.

Other high quality grades of alcohol produced and sold by ICP have historically been sold at premiums to fuel ethanol pricing and typically provide higher margins than fuel ethanol. ICP has the flexibility in its production capabilities to change its production and sales mix in order to maximize profit margins between several grades of alcohol.

The improved cost competitiveness of U.S.-produced alcohol resulted in improved margins in the fourth quarter of 2013. ICP expects to be able to take advantage of continued strong demand for sales of high quality alcohol destined for both domestic and export markets and also expects to see positive fuel ethanol margins through at least the first half of 2014.

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Results of Operations



	2013				2012				2011
	Amount		Percent		Amount		Percent		Amount		Percent
	$ '000		%		$ '000		%		$ '000		%
Operating Revenues:
United States	193,682		100		188,650		100		—		—
Costs and Expenses:
Operating	184,649		95		183,442		97		—		—
Administrative and general	2,031		1		1,920		1		256		—
Depreciation and amortization	5,797		3		5,757		3		—		—
	192,477		99		191,119		101		256		—
Operating Income (Loss)	1,205		1		(2,469	)	(1	)	(256	)	—
Other Income (Expense):
Derivative losses, net ⁽¹⁾	(2,078	)	(1	)	(856	)	(1	)	—		—
Foreign currency gains (losses), net	—		—		—		—		—		—
Other, net	—		—		—		—		—		—
Equity in Earnings (Losses) of 50% or Less Owned Companies	—		—		6,154		3		(1,815	)	—
Segment Profit (Loss)	(873	)	—		2,829		1		(2,071	)	—

______________________


(1)	ICP routinely enters into exchange traded positions (primarily corn futures) to offset its net commodity market exposure on raw material and finished goods inventory balances. As of December 31, 2013 , the net market exposure to corn under its contracts and its raw material and inventory balances was not material.

2013 compared with 2012

Operating Revenues. Operating revenues were $5.0 million higher in the year ended December 31, 2013 compared with the eleven months ended December 31, 2012. Operating revenues from alcohol sales and other revenues were $1.4 million higher in 2013 compared with 2012. The Company sold 57.3 million alcohol gallons at an average price of $2.47 per gallon in 2013 compared with 58.2 million gallons at an average price of $2.43 per gallon in 2012. In addition, the Company had DDGS sales of $51.6 million in 2013 compared with $48.0 million in the eleven months of 2012, an increase of $3.6 million.

Segment Profit (Loss). Segment loss was $0.9 million in the year ended December 31, 2013 compared with a segment profit of $2.8 million in year ended December 31, 2012. Segment profit in 2012 included a $6.0 million gain, net of tax, arising from the Company's acquisition of a controlling interest in ICP. Excluding this gain, segment results improved by $2.3 million in 2013 compared with 2012 primarily due to improved U.S. fuel ethanol margins and increased sales of high quality alcohol.

2012 compared with 2011

On February 1, 2012, the Company obtained a controlling interest in ICP through its acquisition of a portion of its partner's interest following which, the Company owned 70% and began consolidating ICP.

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Other

For the years ended December 31, the operating revenues and segment profit of the Company's Other activities was as follows:



	2013			2012			2011
	$ ’000			$ ’000			$ ’000
Operating Revenues:
Emergency and crisis services	$	250		$	40,613		$	80,951
Agricultural commodity trading and logistics	79,276			153,604			224,524
Other activities	6			1,514			1,392
	$	79,532		$	195,731		$	306,867
Segment Profit (Loss):
Emergency and crisis services	$	2,710		$	(13,640	)	$	20,013
Agricultural commodity trading and logistics	(1,310		)	(585		)	(668		)
Other activities ⁽¹⁾	2,304			(2,988		)	(2,124		)
	$	3,704		$	(17,213	)	$	17,221

______________________


(1)	The components of segment profit do not include interest income, which is a significant component of the Company's lending and leasing activities.

Emergency and Crisis Services. Operating results and operating margins for emergency and crisis services can vary materially between comparable periods depending upon the number and magnitude of emergency responses.

Segment loss for the year ended December 31, 2012 included equity in losses of 50% or less owned companies of $9.7 million, net of tax, upon the contribution of ORM in exchange for an equity interest in Witt O'Brien's, LLC, a response management 50% or less owned company. The equity in losses was primarily related to the one-time recognition of deferred tax liabilities associated with the deconsolidation of non-deductible goodwill. In addition, ORM reported operating losses from continuing operations of $4.2 million for the year ended December 31, 2012.

Segment profit in the year ended December 31, 2011 was materially 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 rig Deepwater Horizon in April 2010. Emergency and crisis services primarily provided professional assistance, consulting services and software systems in support of incident management activities at various strategic locations in support of the oil spill response.

Agricultural Commodity Trading and Logistics. The segment loss in 2013 was primarily due to market write-downs of inventories.

Other Activities. Segment profit in 2013 was primarily due to gains on the sale of real property. Segment loss in 2012 was primarily due to the impairment of a fixed wing aircraft sold in December 2012 following its return by a leasing customer upon the scheduled completion of the lease. Segment loss in 2011 was primarily due to equity in losses of the Company's industrial aviation joint ventures in Asia.

Corporate and Eliminations



	2013		2012		2011
	$ ’000		$ ’000		$ ’000
Corporate Expenses	(38,392	)	(46,231	)	(37,404	)
Eliminations	—		50		—
Operating Loss	(38,392	)	(46,181	)	(37,404	)
Other Income (Expense):
Derivative losses, net	(6,538	)	(2,623	)	(29,075	)
Foreign currency gains (losses), net	(619	)	462		3,395
Other, net	(189	)	(305	)	(521	)

Corporate Expenses. Corporate expenses were $7.8 million lower in 2013 compared with 2012 primarily due to the acceleration of restricted stock awards into 2012 that were scheduled to lapse in 2013 and 2014, partially offset by higher management bonus award accruals. Corporate expenses were $8.8 million higher in 2012 compared with 2011 primarily due to the acceleration of restricted stock awards into 2012 that were scheduled to lapse in 2013 and 2014.

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Derivative losses, net. Derivative losses, net in 2013 were primarily due to losses from equity indices of $5.2 million and losses on forward exchange, option and future contracts of $1.1 million. Derivative losses, net in 2012 were primarily due to losses on interest rate swaps of $3.6 million and losses from equity index and options of $0.6 million, partially offset by gains on forward exchange option and future contracts of $0.7 million and exchange traded commodity swap option and future contracts of $1.0 million. Derivative losses, net in 2011 were primarily due to losses on U.S. Treasury note, rate lock and bond future and option contracts of $28.3 million.

Foreign currency gains (losses), net. Foreign currency gains, net in 2011 were primarily due to a strengthening of the U.S. dollar against the euro underlying certain of the Company’s marketable securities and cash balances.

Other Income (Expense) not included in Segment Profit



	2013		2012		2011
	$’000		$’000		$’000
Interest income	15,467		17,360		12,879
Interest expense	(42,592	)	(37,891	)	(39,759	)
Debt extinguishment gains (losses), net	—		(160	)	(99	)
Marketable security gains (losses), net	5,803		12,891		(7,893	)
	(21,322	)	(7,800	)	(34,872	)

Interest income. Interest income was $1.9 million lower in 2013 compared with 2012 primarily due to a prepayment penalty received in 2012 following the early redemption of a note receivable in the Company's lending and leasing portfolio, partially offset by higher interest earned in 2013 on advances to the Company's 50% or less owned companies. Interest income was $4.7 million higher in 2012 compared with 2011 primarily due to a prepayment penalty received in 2012 following the early redemption of a note receivable in the Company's lending and leasing portfolio and interest earned on advances to the Company's 50% or less owned companies.

Interest expense. Interest expense was $4.7 million higher in 2013 compared with 2012 primarily due to the issuance of the Company's 2.5% Convertible Senior Notes on December 11, 2012 and the issuance of the Company's 3.0% Convertible Senior Notes on November 13, 2013. These increases were partially offset by lower interest on the Company's 5.875% Senior Notes which matured October 1, 2012, lower interest on borrowings under the Company's revolving credit facility, which was terminated on August 9, 2013, and higher capitalized interest. Interest expense was $1.9 million lower in 2012 compared with 2011 primarily due to lower interest on the Company's 5.875% Senior Notes which matured October 1, 2012.

Marketable security gains (losses), net. In 2013, marketable security gains, net were due to gains on long marketable security positions of $8.2 million, partially offset by losses on short marketable security positions of $2.4 million. In 2012, marketable security gains, net were due to gains on long marketable security positions of $13.2 million, partially offset by losses on short sales of marketable securities of $0.3 million. In 2011, marketable security losses, net were due to losses on the Company’s long marketable security positions of $13.4 million, partially offset by gains on short sales of marketable securities of $5.5 million.

Income Taxes

The Company’s effective income tax rate in 2013 , 2012 and 2011 was 39.6% , 44.3% and 87.8% , respectively. The effective tax rate in 2011 was primarily due to losses incurred by foreign subsidiaries.

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Liquidity and Capital Resources

General

The Company’s ongoing liquidity requirements arise primarily from working capital needs, capital commitments, and its obligations to repay debt. 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 and cash flows from operations. From time to time, the Company may secure additional liquidity through asset sales or the issuance of debt, shares of Common Stock or common stock of its subsidiaries, preferred stock or a combination thereof.

As of December 31, 2013 , the Company's unfunded capital commitments were $547.0 million and included: 16 offshore support vessels for $112.7 million ; 80 inland river dry cargo barges for $40.2 million ; six inland river tank barges for $4.7 million ; five inland river towboats for $4.7 million ; three U.S.-flag product tankers for $374.1 million ; and other equipment and improvements for $10.6 million . Of these commitments, $304.9 million is payable during 2014; $232.8 million is payable during 2015-2016 and $9.3 million is payable in 2017. Subsequent to December 31, 2013 , the Company committed to purchase one U.S.-flag articulated tug-barge and additional equipment for $94.1 million .

SEACOR’s Board of Directors has previously authorized the Company to purchase any or all of 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 2013, the Company did not purchase any of its 7.375% Senior Notes due 2019.

On August 9, 2013, the Company voluntarily terminated the SEACOR revolving credit facility.

As of December 31, 2013 , the Company had outstanding letters of credit totaling $27.1 million with various expiration dates through 2016 and outstanding debt of $879.4 million .

As of December 31, 2013 , the Company held balances of cash, cash equivalents, restricted cash, marketable securities, construction reserve funds and Title XI reserve funds totaling $825.6 million . As of December 31, 2013 , construction reserve funds of $252.1 million were classified as non-current assets in the accompanying consolidated balance sheets as the Company has the intent and ability to use the funds to acquire equipment.

Summary of Cash Flows



	2013		2012		2011
	$ ’000		$ ’000		$ ’000
Cash provided by or (used in):
Operating Activities - Continuing Operations	185,026		81,487		114,628
Operating Activities - Discontinued Operations	24,298		189,216		21,305
Investing Activities - Continuing Operations	(130,768	)	(138,629	)	(174,810	)
Investing Activities - Discontinued Operations	(8,502	)	(7,665	)	(157,146	)
Financing Activities - Continuing Operations	222,574		(247,528	)	(25,277	)
Financing Activities - Discontinued Operations	(14,017	)	(12,919	)	246,260
Effect of Exchange Rate Changes on Cash and Cash Equivalents - Continuing Operations	477		2,087		1,517
Effect of Exchange Rate Changes on Cash and Cash Equivalents - Discontinued Operations	143		673		442
Net Increase (Decrease) in Cash and Cash Equivalents	279,231		(133,278	)	26,919

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Operating Activities

Cash flows provided by operating activities decreased by $61.4 million during 2013 compared with 2012. Cash flows provided by operating activities increased by $134.8 million during 2012 compared with 2011. The components of cash flows provided by (used in) operating activities during the years ended December 31 were as follows:



	2013		2012		2011
	$ ’000		$ ’000		$ ’000
Operating income from continuing operations before depreciation, amortization and gains on asset dispositions and impairments, net	197,053		164,085		155,172
Operating income from discontinued operations before depreciation, amortization and gains on asset dispositions and impairments, net	6,163		77,065		91,036
Changes in operating assets and liabilities before interest and income taxes	16,529		53,863		(119,670	)
Purchases of marketable securities	(7,387	)	(40,396	)	(117,145	)
Proceeds from sales of marketable securities	12,791		36,537		178,016
Dividends received from 50% or less owned companies	9,490		6,590		9,582
Interest paid, excluding capitalized interest	(32,388	)	(46,457	)	(39,559	)
Income taxes paid, net of refunds	(1,546	)	(13,061	)	(5,899	)
Other	8,619		32,477		(15,600	)
Total cash flows provided by operating activities	209,324		270,703		135,933

During 2013, operating income from continuing operations before depreciation, amortization and gains on asset dispositions and impairments, net increased by $33.0 million compared with 2012 primarily due to improvements in Offshore Marine Services' U.S. Gulf of Mexico operations, higher rates partially offset by increased drydocking activities in Shipping Services, and lower corporate expenses resulting from the acceleration of restricted stock awards into 2012 that were scheduled to lapse in 2013 and 2014. During 2012, operating income from continuing operations before depreciation, amortization and gains on asset dispositions and impairments, net increased by $8.9 million compared with 2011 primarily due to improvements in Offshore Marine Services due to increased demand derived from offshore drilling and exploration activities offset by a decline in emergency and crisis services which depend upon the number and magnitude of emergency responses each year. See “Consolidated Results of Operations” included above for a discussion of the results for each of the Company’s business segments.

During 2013, operating income from discontinued operations before depreciation, amortization and gains on asset dispositions and impairments, net decreased by $70.9 million compared with 2012 as a result of the sale of the SES business on March 16, 2012, the sale of SEI on December 31, 2012 and the Spin-off of Era Group on January 31, 2013.

During 2011, changes in operating assets and liabilities before interest and income taxes used cash flows of $119.7 million primarily due to final settlements with a customer and certain subcontractors in respect of oil spill response activities and increased working capital employed in Era Group and agricultural commodity trading and logistics activities.

During 2013, cash used in operating activities included $7.4 million to purchase marketable security long positions. During 2013, cash provided by operating activities included $12.8 million received from the sale of marketable security long positions.

During 2012, cash used in operating activities included $23.3 million to purchase marketable security long positions and $17.1 million to cover marketable security short positions. During 2012, cash provided by operating activities included $34.0 million received from the sale of marketable security long positions and $2.5 million received upon entering into marketable security short positions.

During 2011, cash used in operating activities included $26.5 million to purchase marketable security long positions and $90.6 million to cover marketable security short positions. During 2011, cash provided by operating activities included $95.4 million received from the sale of marketable security long positions and $82.6 million received upon entering into marketable security short positions.

Investing Activities

During 2013 , net cash used in investing activities of continuing operations was $130.8 million primarily as follows:


•	Capital expenditures were $195.9 million . Equipment deliveries included eight offshore support vessels, two inland river liquid tank barges, one inland river towboat, one RORO vessel and four U.S.flag harbor tugs.


•	The Company sold 19 offshore support vessels, 16 inland river dry cargo and deck barges, eight inland river liquid tank barges, eight U.S.-flag harbor tugs and other property and equipment for net proceeds of $274.3 million ( $263.9 million in cash and $10.4 million in seller financing).

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•	The Company made investments in, and advances to, 50% or less owned companies of $171.5 million including $112.5 million in Dorian LPG Ltd, $23.9 million in Sea-Cat Crewzer II LLC, $7.6 million in Mantenimiento Express Maritimo, S.A.P.I. de C.V. ("MexMar"), $9.2 million in SCFCo Holdings LLC and $4.1 million to SEACOR OSV Partners I LP.


•	The Company received $18.3 million from its 50% or less owned companies.


•	The Company received net payments of $16.4 million on third party leases and notes receivable.


•	The Company released restricted cash of $15.3 million.


•	Construction reserve fund account transactions included withdrawals of $65.5 million and deposits of $131.6 million.


•	On June 6, 2013, the Company acquired a controlling interest in C-Lift LLC through its acquisition of its partner's interest for $11.1 million, net of cash acquired.

During 2013, net cash used by investing activities of discontinued operations of $8.5 million was primarily due to Era Group's capital expenditures of $8.7 million.

During 2012 , net cash used in investing activities of continuing operations was $138.6 million million primarily as follows:


•	Capital expenditures were $239.4 million . Equipment deliveries included six offshore support vessels, three inland river dry cargo barges, five inland river liquid tank barges and two inland river towboats.


•	The Company sold seven offshore support vessels, nine inland river dry cargo barges, two inland river towboats, one inland river liquid tank barge, one RORO vessel, five harbor tugs and other equipment for net proceeds of $114.0 million . Total net proceeds of $167.5 million on equipment sold included $5.0 million in cash deposits previously received and $48.5 million in seller financing.


•	The Company made investments in its 50% or less owned companies of $45.6 million including $20.8 million of bridge financing to Trailer Bridge, Inc., $11.0 million in advances to Avion Pacific Limited ("Avion") and $5.0 million to Bunge-SCF Grain LLC.


•	The Company received $87.3 million from its 50% or less owned companies including $45.0 million of repayments on short-term notes from MexMar, $20.0 million from SeaJon LLC as a capital distribution and $15.7 million from Avion as a repayment of advances.


•	Construction reserve fund account transactions included withdrawals of $122.7 million and deposits of $58.4 million.


•	The Company received net payments of $36.0 million on third party leases and notes receivable.


•	The Company acquired 18 lift boats, real property and working capital from Superior Energy Inc. for $142.6 million .


•	The Company obtained a controlling interest in ICP through its acquisition of a portion of its partner's interest for $9.1 million in cash.

During 2012, net cash used by investing activities of discontinued operations was $7.7 million primarily as follows:


•	The Company sold the SES Business for a net sales price of $99.9 million. Net cash proceeds received were $90.3 million.


•	On December 31, 2012, the Company sold SEI to Par Petroleum Corporation for a net sales price of $15.1 million. Net cash proceeds received during 2012 were $17.8 million.


•	Era Group's investing activities included capital expenditures of $113.0 million and $5.2 million in proceeds from the sale of 18 helicopters and other equipment.

During 2011 , net cash used in investing activities of continuing operations was $174.8 million primarily as follows:


•	Capital expenditures were $165.3 million . Equipment deliveries included three offshore support vessels, 55 inland river dry cargo barges, two inland river liquid tank barges and one harbor tug. In addition, the Company acquired a controlling interest in an offshore support vessel.


•	The Company sold 11 offshore support vessels, one US-flagged product tanker, one inland river towboat, one inland river liquid tank barge, six inland river dry cargo and deck barges, two harbor tugs and other equipment for net proceeds of $75.7 million , including $36.3 million in proceeds upon entering into a sale-leaseback transaction.

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•	The Company received $22.4 million from its 50% or less owned companies.


•	The Company made investments in its 50% or less owned companies of $41.3 million.


•	The Company had net issuances of $26.7 million on third party leases and notes receivable.


•	Construction reserve fund account transactions included withdrawals of $82.5 million and deposits of $18.6 million.


•	The Company acquired certain assets and liabilities of Lewis & Clark and certain related affiliates for $29.6 million.


•	The Company acquired 75% of the issued and outstanding shares in Windcat Workboats Holdings Ltd. for $21.5 million. The acquired company had $3.3 million in cash at the time of acquisition.

•

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.


•	The Company obtained a controlling interest in Soylutions LLC through its acquisition of its partner’s interest for $11.9 million in cash. The acquired company had $0.2 million in cash at the time of acquisition.

During 2011, net cash used by investing activities of discontinued operations was $157.1 million primarily as follows:


•	Era Group's investing activities included capital expenditures of $158.9 million for nine helicopters and $26.0 million in proceeds from the sale of ten helicopters and other equipment.

Financing Activities

During 2013 , net cash provided by financing activities of continuing operations was $222.6 million . The Company:


•	issued $230.0 million in principal amount of its 3.0% Convertible Senior Notes due 2028 for proceeds of $223.7 million, net of issue costs of $6.3 million;


•	made scheduled payments on long-term debt of $18.2 million;


•	had net borrowings on inventory financing arrangements of $1.5 million; and


•	received $20.0 million from share award plans.

During 2013, net cash used in financing activities of discontinued operations was $14.0 million primarily due to Era Group's cash balance distributed in the Spin-off.

During 2012 , net cash used in financing activities of continuing operations was $247.5 million . The Company:


•	purchased $5.5 million, in principal amount, of its 5.875% Senior Notes due 2012 for an aggregate purchase price of $5.7 million;


•	retired at maturity $171.0 million of the remaining principal balance outstanding of its 5.875% Senior Notes due 2012 for $171.0 million;


•	issued $350.0 million in principal amount of its 2.5% Convertible Senior Notes due 2027 for proceeds of $340.6 million, net of issue costs of $9.4 million;


•	borrowed $115.0 million and repaid $290.0 million under the SEACOR revolving credit facility;


•	issued other debt of $6.6 million;


•	made scheduled payments on long-term debt and capital lease obligations of $13.6 million;


•	had borrowings of $0.1 million and made repayments of $0.7 million on other working capital lines;


•	repaid $3.2 million of acquired debt;


•	made net repayments on inventory financing arrangements of $14.6 million;


•	paid a $5.00 per share dividend on Common Stock of $100.4 million to shareholders; and


•	acquired for treasury 1,377,798 shares of Common Stock for an aggregate purchase price of $119.6 million.

During 2012, net cash used in financing activities of discontinued operations was $12.9 million . The Company:

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•	issued $200.0 million in principal amount of the Era Group Inc. 7.75% Senior Notes due 2022 for proceeds of $191.9 million, net of issue costs of $4.7 million; and


•	borrowed $88.0 million and repaid $290.0 million under the Era Group senior secured revolving credit facility.

During 2011 , net cash used in financing activities of continuing operations was $25.3 million . The Company:


•	purchased $2.2 million, in principal amount, of its 5.875% Senior Notes due 2012 for an aggregate purchase price of $2.3 million;


•	had borrowings of $50.0 million under the SEACOR revolving credit facility and issued other debt of $2.9 million;


•	repaid $22.8 million for the redemption of facility financing;


•	made scheduled payments on long-term debt and capital lease obligations of $11.8 million;


•	had net borrowings on inventory financing arrangements of $20.2 million ;


•	received $11.9 million for share award plans; and


•	acquired for treasury 843,400 shares of Common Stock for an aggregate purchase price of $71.3 million .

During 2011, net cash provided by financing activities of discontinued operations was $246.3 million primarily due to borrowings under Era Group's senior secured revolving credit facility.

Short and Long-Term Liquidity Requirements

To date, the Company’s liquidity has not been materially impacted by the current credit environment 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 cash balances; sell securities; utilize construction reserve funds; sell assets; enter into sale and leaseback transactions for equipment; issue debt, shares of Common Stock or common stock of its subsidiaries or preferred stock; or a combination thereof. On August 9, 2013, the Company voluntarily terminated the SEACOR revolving credit facility.

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.

Off-Balance Sheet Arrangements

On occasion, the Company and its partners will guarantee certain obligations on behalf of their 50% or less owned companies. As of December 31, 2013 , the Company had the following guarantees in place:

•

The Company is a party to two international offshore marine 50% or less owned companies that obtained bank debt to finance the acquisition of offshore support vessels from the Company. The debt is secured by, among other things, a first preferred mortgage on the vessels. The bank also has the authority to require the parties to the joint ventures to fund uncalled capital commitments, as defined in the joint ventures’ partnership agreements. In such event, the Company would be required to contribute its allocable share of uncalled capital, which was $2.4 million, in the aggregate, as of December 31, 2013 . The Company manages these vessels on behalf of the joint ventures and guarantees the outstanding charter receivables of one of the joint ventures if a customer defaults in payment and the Company either fails to take enforcement action against the defaulting customer or fails to assign its right of recovery against the defaulting customer. As of December 31, 2013 , the Company’s contingent guarantee of the joint venture’s outstanding charter receivables was $1.1 million.


•	The Company is guarantor of 50% of the outstanding debt for a 50% or less owned company that owns two offshore high speed catamaran crew boats. The amount of the guarantees decline as principal payments are made and will terminate when the debt is repaid. The debt matures in 2015. As of December 31, 2013 , the amount of the Company’s guarantee was $8.4 million.


•	The Company is guarantor of 50% of the outstanding debt for a Shipping Services 50% or less owned company that owns a U.S.-flag articulated tug-barge, up to a maximum of $5.0 million. The debt matures in 2017. As of December 31, 2013 , the amount of the Company’s guarantee was $5.0 million.

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Contractual Obligations and Commercial Commitments

The following table summarizes the Company’s contractual obligations and other commercial commitments and their aggregate maturities as of December 31, 2013 (in thousands):



	Payments Due By Period
	Total	Less than 1 Year	1-3 Years	3-5 Years	After 5 Years
	$ ’000	$ ’000	$ ’000	$ ’000	$ ’000
Contractual Obligations:
Long-term Debt ⁽¹⁾	1,347,659	84,781	110,504	103,189	1,049,185
Capital Purchase Obligations ⁽²⁾	547,033	304,887	232,831	9,315
Operating Leases ⁽³⁾	293,706	43,940	78,170	68,676	102,920
Purchase Obligations ⁽⁴⁾	76,134	76,134	—	—	—
Other ⁽⁵⁾	2,067	1,904	20	—	143
	2,266,599	511,646	421,525	181,180	1,152,248
Other Commercial Commitments:
Joint Venture Guarantees ⁽⁶⁾	16,853	700	8,550	7,603	—
Letters of Credit	27,066	26,072	994	—	—
	43,919	26,772	9,544	7,603	—
	2,310,518	538,418	431,069	188,783	1,152,248

______________________


(1)	Maturities of the Company’s borrowings and interest payments pursuant to such borrowings are based on contractual terms.


(2)	Capital purchase obligations represent commitments for the purchase of property and equipment. These commitments are not recorded as liabilities on the Company’s consolidated balance sheet as of December 31, 2013 as the Company has not yet received the goods or taken title to the property.


(3)	Operating leases primarily include leases of vessels, barges, tankers and other property that have a remaining term in excess of one year.


(4)	Purchase obligations primarily include future commodity purchase commitments for the Company's agriculture commodity trading activities as of December 31, 2013 . These commitments are for goods and services to be acquired in the ordinary course of business and are fulfilled by the Company’s vendors within a short period of time.


(5)	Other primarily includes deferred compensation arrangements, refundable deposits and statutorily defined severance obligations.


(6)	See “Off-Balance Sheet Arrangements” above.

Effects of Inflation

The Company’s operations expose it to the effects of inflation. In the event that inflation becomes a significant factor in the world economy, inflationary pressures could result in increased operating and financing costs.

Contingencies

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and denied in part the motion to dismiss that ORM and NRC had filed (an amended decision was issued on October 4, 2011 that corrected several grammatical errors and non-substantive oversights in the original order). Although the Court refused to dismiss the referenced master complaint in its entirety at that time, the Court did recognize the validity of the “derivative immunity” and “implied preemption” arguments that ORM and NRC advanced and directed ORM and NRC to (i) conduct limited discovery to develop evidence to support those arguments and (ii) then re-assert the arguments. The Court did, however, dismiss all state-law claims and certain other claims that had been asserted in the referenced master complaint, and dismissed the claims of all plaintiffs that have failed to allege a legally-sufficient injury. A schedule for limited discovery and motion practice was established by the Court and, in accordance with that schedule, ORM and NRC filed for summary judgment re-asserting their derivative immunity and implied preemption arguments on May 18, 2012. Those motions were argued on July 13, 2012 and are still pending decision. In addition to the indemnity provided to ORM, pursuant to contractual agreements with the responsible party, the responsible party has agreed, subject to certain potential limitations, to indemnify and defend ORM and NRC in connection with these claims in the MDL. Although the Company is unable to estimate the potential exposure, if any, resulting from this matter, the Company does not expect it will have a material effect on the Company's consolidated financial position, results of operations or cash flows.

Subsequent to the filing of the referenced master complaint, ten additional individual civil actions have been filed in or removed to the U.S. District Court for the Eastern District of Louisiana concerning the clean-up activities generally, which name the Company, ORM and/or NRC as defendants or third-party defendants and are part of the overall MDL. By court order, all of these additional individuals cases have been stayed until further notice. On April 8, 2011, ORM was named as a defendant in Johnson 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 13, 2011, the Company was named as a defendant in Mason v. Seacor Marine, LLC, No. 2:11-CV-00826 (E.D. La.), an action in which plaintiff, a former employee, alleges sustaining personal injuries in connection with responding to the explosion and fire, but also in the months thereafter in connection with the clean-up of oil and dispersants while a member of the crew of the M/V Seacor Vanguard. Although the case is subject to the MDL Court’s stay of individual proceedings, the employee moved to sever his case from the MDL on July 16, 2012, which the Court denied on March 5, 2013. The employee filed a motion asking the Court to reconsider, which was denied on May 3, 2013, and the employee filed a Notice of Appeal to the U.S. Court of Appeals for the Fifth Circuit (“Fifth Circuit”) on May 22, 2013. On July 24, 2013, the Company filed a motion to dismiss for lack of appellate jurisdiction, which was granted on August 16, 2013. The same company employee has also brought a claim in the M/V Seacor Vanguard vessel’s limitation action in the MDL which relates to any actions that may have been taken by vessels owned by the Company to extinguish the fire. On April 15, 2011, ORM and NRC were named as defendants in James and Krista Pearson v. BP Exploration & Production, Inc. ("BP Exploration"), 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, ORM and NRC were named as defendants in Thomas Edward Black v. BP Exploration, 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 in Darnell 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 ORM and NRC (and the other defendants). Plaintiffs in this matter have since been granted leave to amend their complaint to include 410 additional individual plaintiffs. On October 3, 2012, ORM and NRC were served with a Rule 14(c) Third-Party Complaint by Jambon Supplier II, L.L.C. and Jambon Marine Holdings L.L.C. in their Limitation of Liability action, In the Matter of Jambon Supplier II, L.L.C., et al., No. 2:12-CV-00426 (E.D. La.). This Third-Party Complaint alleges that if claimant David Dinwiddie, who served as a clean-up crewmember aboard the M/V JAMBON SUPPLIER II vessel during the clean-up efforts, was injured as a result of his exposure to dispersants and chemicals during the course and scope of his employment, then said injuries were caused by the third-party defendants. On November 25, 2012, ORM was named as a defendant in Victoria Sanchez v. American Pollution Control Corp. et al., No. 2:12-CV-00164 (E.D. La.), a maritime suit filed by an individual who allegedly participated in the clean-up effort and sustained personal injuries during the course of such employment. On December 17, 2012, the Court unsealed a False Claims Act lawsuit naming ORM as a defendant, Dillon v. BP, PLC et al., No. 2:12-CV-00987 (E.D. La.)., which is a suit by an individual seeking damages and penalties arising from alleged false reports and claims made to the federal government with respect to the amount of oil burned and dispersed during the clean-up. The federal government has declined to intervene in this suit. On April 8, 2013, the Company, ORM, and NRC were named as defendants in William and Dianna Fitzgerald v. BP Exploration et al., No. 2:13-CV-00650 (E.D. La.), which is a suit by a husband and wife whose son allegedly participated in the clean-up effort and became ill as a result of his exposure to oil and dispersants. Finally, on April 17, 2013, ORM was named as a defendant in Danos et al. v. BP America Production Co. et al., No. 2:13-CV-03747 (removed to E.D. La.), which is a suit by eight individuals seeking damages for dispersant exposure either as a result of their work during clean-up operations or as a result of their residence in the Gulf. The Company is unable to estimate the potential exposure, if any, resulting from these matters but believes they are without merit and does not expect that they will have a material effect on its consolidated financial position, results of operations or cash flows.

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ORM and NRC the claims in the referenced master complaint that have already been asserted against ORM and NRC. Transocean, Cameron International Corporation, Halliburton Energy Services, Inc., and M-I L.L.C. also filed cross-claims against ORM and NRC for contribution and tort indemnity should they be found liable for any damages in Transocean's Limitation of Liability Act action and ORM and NRC have asserted counterclaims against those same parties for identical relief. Weatherford U.S., L.P. and Weatherford International, Inc. (collectively "Weatherford") had also filed cross-claims against ORM and NRC, but moved to voluntarily dismiss these cross-claims without prejudice on February 8, 2013. The Court granted Weatherford's motion that same day. Transcoean's limitation, and thus the remainder of the aforementioned cross-claims, remains pending. As indicated above, the Company is unable to estimate the potential exposure, if any, resulting from these actions but believes they are without merit and does not expect that these matters will have a material effect on its consolidated financial position, results of operations or cash flows.

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Certain subsidiaries of the Company are participating employers in industry-wide, multi-employer, defined benefit pension funds in the United Kingdom, the United Kingdom Merchant Navy Officers Pension Fund (“MNOPF”) and the United Kingdom Merchant Navy Ratings Pension Fund (“MNRPF”). The Company’s participation in the MNOPF relates to officers employed between 1978 and 2002 and its participation in the MNRPF 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. Both of these plans are in deficit positions and depending upon the results of future actuarial valuations, it is possible that the plans could experience further funding deficits, requiring the Company to recognize payroll related operating expenses in the periods invoices are received. The Company has one active employee participating in the MNOPF plan and none in the MNRPF plan.

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 has been invoiced and expensed its allocated share of the cumulative funding deficits, including portions deemed uncollectible due to the non-existence or liquidation of certain participating employers.

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deficit had increased to $359.3 million ( £217.0 million ) of which the Company’s share is $0.3 million ( £0.2 million ). The recovery plans for the additional funding deficit are still being considered.

AMOPP. Certain subsidiaries of the Company are participating employers in industry-wide, multi-employer defined benefit pension plans in the United States, specifically the American Maritime Officers Pension Plan (the "AMOPP"). The Company’s participation in this plan relates to certain employees of the Company’s Shipping Services business segment.

Under federal pension law, the AMOPP was deemed in critical status for the 2009 and 2010 plan years. The AMOPP was frozen in January 2010 and a ten year rehabilitation plan was adopted by the AMOPP trustees in February 2010 whereby benefit changes and increased contributions by participating employers were expected to improve the funded status of the AMOPP. On December 28, 2012, the AMOPP was elevated to endangered status primarily as a result of favorable investment performance and the rehabilitation plan adopted by the AMOPP trustees. Based on an actuarial valuation performed as of September 30, 2012, the latest period for which an actuarial valuation is available, if the Company had chose to withdraw from the AMOPP at that time, its withdrawal liability would have been $45.6 million . That liability may change in future years based on various factors, primarily employee census. As of December 31, 2013 , the Company has no intention to withdraw from the AMOPP and no deficit amounts have been invoiced. Depending upon the results of the future actuarial valuations and the ten year rehabilitation plan, it is possible that the AMOPP will experience further funding deficits, requiring the Company to recognize additional payroll related operating expenses in the periods invoices are received or contribution levels are increased.

Related Party Transactions

The Company manages barge pools as part of its Inland River Services segment. Pursuant to the pooling agreements, operating revenues and expenses of participating barges are combined and the net results are allocated on a pro-rata basis based on the number of barge days contributed by each participant. Mr. Charles Fabrikant, the Executive Chairman of SEACOR, companies controlled by Mr. Fabrikant, and trusts for the benefit of Mr. Fabrikant’s children, own barges that participate in the barge pools managed by the Company. Mr. Fabrikant and his affiliates were participants in the barge pools prior to the acquisition of SCF Marine Inc. by SEACOR in 2000. In the years ended December 31, 2013 , 2012 and 2011 , Mr. Fabrikant and his affiliates earned $0.9 million , $0.8 million and $1.1 million , respectively, of net barge pool results (after payment of $0.2 million , $0.1 million and $0.1 million , respectively, in management fees to the Company). As of December 31, 2013 and 2012 , the Company owed Mr. Fabrikant and his affiliates $0.6 million and $0.4 million , respectively, for undistributed net barge pool results. Mr. Fabrikant and his affiliates participate in the barge pools on the same terms and conditions as other pool participants who are unrelated to the Company.

ICP sells certain non-ethanol alcohol finished goods to ICP's minority interest holder. During the year ended December 31, 2012, ICP's minority interest holder operated under a marketing agreement with ICP for non-ethanol alcohol production, which expired on January 1, 2013. During the year ended December 31, 2013, ICP continued to sell non-ethanol alcohol finished goods to ICP's minority interest holder for resale purposes and also independently sold non-ethanol alcohol finished goods directly to unrelated third party customers. During the years ended December 31, 2013 and 2012 , the Company sold $6.6 million and $44.8 million , respectively to ICP's minority interest holder. As of December 31, 2013 and 2012 , ICP had accounts receivable of $1.8 million and $4.7 million from its minority interest holder. ICP's minority interest holder has payment terms comparable to other ICP customers purchasing the same types of non-ethanol alcohol finished goods.

Mr. Fabrikant is also a director of Diamond Offshore Drilling, Inc. (“Diamond”), which is also a customer of the Company. The total amount earned from business conducted with Diamond did not exceed $5.0 million in any of the years ended December 31, 2013 , 2012 and 2011 .

Mr. Fabrikant and Mr. Lorentzen are also directors of Era Group, which is also customer of the Company. Furthermore, following the Spin-Off the Company has provided certain transition services to Era Group. The total amount earned from business conducted with Era, including transition services provided, did not exceed $5.0 million during the year ended December 31, 2013 .

Critical Accounting Policies and Estimates

Use of Estimates. The preparation of financial statements in conformity with accounting principles generally accepted in the United States of America requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities and disclosure of contingent assets and liabilities at the date of the financial statements and the reported amounts of revenues and expenses during the reporting period. Such estimates include those related to deferred revenues, allowance for doubtful accounts, useful lives of property and equipment, impairments, income tax provisions and certain accrued liabilities. Actual results could differ from those estimates and those differences may be material.

Revenue Recognition. The Company’s Offshore Marine Services segment earns and recognizes revenues primarily from the time charter and bareboat charter of vessels to customers based upon daily rates of hire. Under a time charter, Offshore Marine Services provides a vessel to a customer and is responsible for all operating expenses, typically excluding fuel. Under a bareboat charter, Offshore Marine Services provides the vessel to the customer and the customer assumes responsibility for all operating expenses and risk of operation. Vessel charters may range from several days to several years. Revenues from time charters and bareboat charters are recorded and recognized as services are provided. In the U.S. Gulf of Mexico, time charter durations and rates are typically established in the context of master service agreements that govern the terms and conditions of charter.

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The Company’s Inland River Services segment earns revenues primarily from voyage affreightment contracts whereby customers are charged an established rate per ton to transport cargo from point to point. Revenues from voyage affreightment contracts are generally recognized over the progress of the voyage while the related costs are expensed as incurred. Certain of Inland River Services’ barges are operated in barge pools with other barges owned by third parties from whom Inland River Services earns and recognizes a management fee as the services are rendered. Pursuant to the pooling agreements, operating revenues and expenses of participating barges are combined and the net results are allocated on a pro-rata basis based on the number of barge days contributed by each participant. In addition, revenues are earned from equipment chartered to third parties and from the storage and demurrage of cargoes associated with affreightment activities. In both of these cases, revenues are recognized as services are rendered. Inland River Services’ tank farm and handling facility earns revenues through rental and throughput charges. Rental revenues are recognized ratably over the rental period while throughput charges are recognized as product volume moves through the facility.

The Company’s Shipping Services segment earns revenue from the time charter, bareboat charter and voyage charter of vessels, contracts of affreightment, ship assist services and ship management agreements with vessel owners. Under a time charter, Shipping Services provides a vessel to a customer and is responsible for all operating expenses, typically excluding fuel. Under a bareboat charter, Shipping Services provides the vessel to a customer and the customer assumes responsibility for all operating expenses and risk of operation. Revenues from time charters and bareboat charters are recognized as services are provided. Voyage contracts are contracts to carry cargoes on a single voyage basis regardless of time to complete. Contracts of affreightment are contracts for cargoes that are committed on a multi-voyage basis for various periods of time with minimum and maximum cargo tonnages specified over the period at a fixed or escalating rate per ton. Revenues for voyage contracts and contracts of affreightment are recognized over the progress of the voyage while the related costs are expensed as incurred. Ship assist services are provided by the Company's harbor towing fleet to docking and undocking cargo vessels in various ports in the U.S. Gulf of Mexico and Atlantic Coast. Revenues from ship assist services are recognized as the services are performed. Ship management agreements typically provide for technical services over a specified period of time, typically a year or more. Revenues from ship management agreements are recognized ratably over the service period.

ICP earns revenues from the sale of alcohol, co-products and by-products. Revenues and related costs from these sales are recorded when title transfers to the buyer.

Trade Receivables. Customers of Offshore Marine Services and Shipping Services are primarily major and independent oil and gas exploration and production companies. Customers of Inland River Services are primarily major agricultural and industrial companies based within the United States. Customers of ICP include petrochemical, agricultural and industrial companies based within the United States. Customers of the Company's other business activities primarily include industrial companies and distributors. All customers are granted credit on a short-term basis and related credit risks are considered minimal. The Company routinely reviews its trade receivables and makes provisions for probable doubtful accounts; however, those provisions are estimates and actual results could differ from those estimates and those differences may be material. Trade receivables are deemed uncollectible and removed from accounts receivable and the allowance for doubtful accounts when collection efforts have been exhausted.

Derivative Instruments. The Company accounts for derivatives through the use of a fair value concept whereby all of the Company’s derivative positions are stated at fair value in the accompanying consolidated balance sheets. Realized and unrealized gains and losses on derivatives not designated as hedges are reported in the accompanying consolidated statements of income as derivative losses, net. Realized and unrealized gains and losses on derivatives designated as cash flow hedges are reported as a component of other comprehensive income (loss) in the accompanying consolidated statements of comprehensive income to the extent they are effective and reclassified into earnings on the same line item associated with the hedged transaction and in the same period the hedged transaction affects earnings. Any ineffective portions of cash flow hedges are reported in the accompanying consolidated statements of income as derivative losses, net. Realized and unrealized gains and losses on derivatives designated as cash flow hedges that are entered into by the Company’s 50% or less owned companies are also reported as a component of the Company’s other comprehensive income (loss) in proportion to the Company’s ownership percentage, with reclassifications and ineffective portions being included in equity in earnings (losses) of 50% or less owned companies, net of tax, in the accompanying consolidated statements of income.

Inventories. Inventories are stated at the lower of cost (using the first-in, first-out and average cost methods) or market. Inventories consist primarily of fuel and fuel oil in the Company’s Offshore Marine Services, Shipping Services and Inland River Services segments. Inventories in ICP consist primarily of corn, high quality alcohol and fuel alcohol. Inventories in the Company's other business activities consist of sugar, rice and salt. The Company records write-downs, as needed, to adjust the carrying amount of inventories to the lower of cost or market.

Property and Equipment. 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 typically 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

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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 December 31, 2013 , the estimated useful life (in years) of each of the Company’s major classes of new equipment was as follows:



Offshore support vessels (excluding wind farm utility)	20
Wind farm utility vessels	10
Inland river dry cargo and deck barges	20
Inland river liquid tank barges	25
Inland river towboats	25
U.S.-flag product tankers	25
RORO ⁽¹⁾ vessels	20
Harbor tugs	25
Ocean liquid tank barges	25
Terminal and manufacturing facilities	20

______________________


(1)	Roll on/Roll off ("RORO").

Equipment maintenance and repair costs and the costs of routine overhauls, drydockings and inspections performed on vessels and equipment are charged to operating expense as incurred. Expenditures that extend the useful life or improve the marketing and commercial characteristics of equipment as well as major renewals and improvements to other properties are capitalized.

Impairment of Long-Lived Assets. 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 values of the assets are not recoverable, as determined by the estimated undiscounted cash flows, the carrying values of the assets are reduced to fair value. Generally, fair value is determined using valuation techniques, such as expected discounted cash flows or appraisals, as appropriate.

Impairment of 50% or Less Owned Companies. The Company performs regular reviews of each 50% or less owned company's financial condition, the business outlook for its products and services, and its present and projected results and cash flows. When a 50% or less owned company has experienced consistent declines in financial performance or difficulties in raising capital to continue operations, and when the Company expects the decline to be other-than-temporary, the investment is written down to fair value. Actual results may vary from estimates due to the uncertainty regarding the projected financial performance of 50% or less owned companies, the severity and expected duration of declines in value, and the available liquidity in the capital markets to support the continuing operations of the 50% or less owned company.

Goodwill. Goodwill is recorded when the purchase price paid for an acquisition exceeds the fair value of net identified tangible and intangible assets acquired. The Company performs an annual impairment test of goodwill and further periodic tests to the extent indicators of impairment develop between annual impairment tests. The Company’s impairment review process compares the fair value of the reporting unit to its carrying value, including the goodwill related to the reporting unit. To determine the fair value of the reporting unit, the Company uses a discounted future cash flow approach that uses estimates for revenues, costs and appropriate discount rates, among other things. These estimates are reviewed each time the Company tests goodwill for impairment and are typically developed as part of the Company’s routine business planning and forecasting process. While the Company believes its estimates and assumptions are reasonable, variations from those estimates could produce materially different results.

Business Combinations. The Company recognizes, with certain exceptions, 100 percent of the fair value of assets acquired, liabilities assumed, and noncontrolling interests when the acquisition constitutes a change in control of the acquired entity. Shares issued in consideration for a business combination, contingent consideration arrangements and pre-acquisition loss and gain contingencies are all measured and recorded at their acquisition-date fair value. Subsequent changes to fair value of contingent consideration arrangements are generally reflected in earnings. Any in-process research and development assets acquired are capitalized as are certain acquisition-related restructuring costs if the criteria related to exit or disposal cost obligations are met as of the acquisition date. Acquisition-related transaction costs are expensed as incurred and any changes in an acquirer’s existing income tax valuation allowances and tax uncertainty accruals are recorded as an adjustment to income tax expense. The operating results of entities acquired are included in the accompanying consolidated statements of income from the date of acquisition.

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Income Taxes. Deferred income tax assets and liabilities have been provided in recognition of the income tax effect attributable to the book and tax basis differences of assets and liabilities reported in the accompanying consolidated financial statements. Deferred tax assets or liabilities are provided using the enacted tax rates expected to apply to taxable income in the periods in which they are expected to be settled or realized. Interest and penalties relating to uncertain tax positions are recognized in interest expense and administrative and general, respectively, in the accompanying consolidated statements of income. The Company records a valuation allowance to reduce its deferred tax assets if it is more likely than not that some portion or all of the deferred tax assets will not be realized.

In the normal course of business, the Company may be subject to challenges from tax authorities regarding the amount of taxes due. These challenges may alter the timing or amount of taxable income or deductions. As part of the calculation of income tax expense, the Company determines whether the benefits of its tax positions are at least more likely than not of being sustained based on the technical merits of the tax position. For tax positions that are more likely than not of being sustained, the Company accrues the largest amount of the tax benefit that is more likely than not of being sustained. Such accruals require management to make estimates and judgments with respect to the ultimate outcome of its tax benefits and actual results could vary materially from these estimates.



Item 7A.	Quantitative and Qualitative Disclosures about Market Risk

The Company enters and settles forward currency exchange, option and future contracts with respect to various foreign currencies that are not designated as fair value hedges. As of December 31, 2013 , the outstanding forward currency exchange contracts translated into a net purchase of foreign currencies with an aggregate U.S. dollar equivalent of $25.9 million. These contracts enable the Company to buy currencies in the future at fixed exchange rates, which could offset possible consequences of changes in foreign exchange rates with respect to the Company’s business conducted in Europe, Africa, Brazil, Mexico, Central and South America, the Middle East and Asia. The Company generally does not enter into contracts with forward settlement dates beyond twelve to eighteen months. An adverse change of 10% in the underlying foreign currency exchange rates would reduce income by $0.8 million, net of tax.

As of December 31, 2013 , the Company advanced intercompany loans of £6.0 million ($10.0 million) to a United Kingdom subsidiary. A 10% weakening in the exchange rate of the pound sterling against the U.S. dollar as of December 31, 2013 would result in foreign currency losses of $0.7 million, net of tax.

The Company has foreign currency exchange risks related to its operations where its functional currency is the pound sterling, primarily related to vessel operations that are conducted from ports located in the United Kingdom. Net consolidated assets of £39.4 million ($63.1 million) are included in the Company’s consolidated balance sheets as of December 31, 2013 . A 10% weakening in the exchange rate of the pound sterling against the U.S. dollar as of December 31, 2013, would increase other comprehensive loss by $4.1 million, net of tax, due to translation. In addition, the Company has long-term debt of €21.7 million (£18.1 million). A 10% weakening in the exchange rate of the Euro against the pound sterling as of December 31, 2013 would result in foreign currency losses of $1.9 million, net of tax. SEACOR also provided $8.2 million (£4.9 million) U.S. dollar denominated loans to a United Kingdom subsidiary. A 10% weakening in the exchange rate of the pound sterling against the U.S. dollar as of December 31, 2013 would result in foreign currency losses of $0.6 million, net of tax.

As of December 31, 2013 , the Company held marketable securities with a fair value of $24.3 million, consisting of equity securities. As of December 31, 2012 , the Company held marketable securities with a fair value of $21.7 million, including $9.0 million in fixed income investments consisting of corporate debt securities and foreign government bonds, and $12.7 million in equity securities. From time to time, the Company may increase its level of investment in fixed income securities including U.S. government bonds, foreign government bonds, state and municipal bonds, and corporate notes with maturities ranging from a few months to many years. The fair value of such investments fluctuates based on market interest rates and the creditworthiness of the issuers of the securities. When making substantial investments in fixed income securities, the Company manages its risk associated with these investments by analyzing the creditworthiness of issuers and utilizing other techniques that may include maintaining a ladder of maturities. The Company’s investment in equity securities primarily includes positions in energy, marine, transportation and other related businesses. A 10% decline in the value of the Company’s investments in marketable securities as of December 31, 2013 , would reduce income by $1.5 million, net of tax.

The Company held positions in short sales of marketable equity securities with a fair value of $10.7 million and $8.3 million as of December 31, 2013 and 2012 , respectively. 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 December 31, 2013 would reduce income by $0.7 million, net of tax.

The Company held positions in publicly traded equity options that may convey to the Company a right or obligation to engage in a future transaction with respect to the underlying equity security. The Company’s investment in equity options primarily includes positions in energy, marine, transportation and other related businesses. These investments have short-term maturities and their market values fluctuate based on changes in the price and volatility of the underlying security, the strike price of the

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option and the time to expiration. As of December 31, 2013 , the Company had an asset of $0.2 million having marked to market its positions in these publicly traded equity options.

The Company’s outstanding debt is primarily in fixed interest rate instruments. Although the fair value of these debt instruments will vary with changes in interest rates, the Company’s operations are not significantly affected by interest rate fluctuations.

As of December 31, 2013 , the Company had other variable rate debt instruments (due 2018 through 2023) totaling $22.4 million that call for the Company to pay interest based on LIBOR or Euribor plus applicable margins. The interest rates reset either monthly or quarterly. As of December 31, 2013 , the average interest rate on these borrowings was 2.4%.

As of December 31, 2013 , the Company had interest rate swap agreements with an amortized notional value of $88.2 million. These agreements call for the Company to pay a fixed interest rate ranging from 2.25% to 3.05% and receive interest payments based on LIBOR or Euribor. As of December 31, 2013 , the Company had a liability of $1.6 million having marked to market its positions in these interest rate swap agreements.

The Company enters and settles positions in various exchange and non-exchange traded commodity swap, option and future contracts. ICP routinely enters into exchange traded positions (primarily corn futures) to offset its net commodity market exposure on raw material and finished goods inventory balances. Agricultural commodity trading and logistics business includes its fixed price future purchase and sale contracts of sugar in the Company’s non-exchange traded derivative positions and enters into exchange traded positions to protect these purchase and sales contracts from market changes. As of December 31, 2013, the net market exposure to corn and sugar under these positions was not material. The Company also enters into exchange traded positions (primarily natural gas, crude oil, gasoline, corn 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 December 31, 2013 , these positions were not material. As of December 31, 2013 , the fair value of these exchange and non-exchange commodity contracts was an asset of $5.7 million, net.

The Company enters and settles 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 December 31, 2013 , there were no positions outstanding.



ITEM 8.	FINANCIAL STATEMENTS AND SUPPLEMENTARY DATA

The consolidated financial statements and related notes are included in Part IV of this Form 10-K and incorporated herein by reference.



ITEM 9.	CHANGES IN AND DISAGREEMENTS WITH ACCOUNTANTS ON ACCOUNTING AND FINANCIAL DISCLOSURE

None.



ITEM 9A.	CONTROLS AND PROCEDURES

Evaluation of Disclosure 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 December 31, 2013 . The Company’s disclosure controls and procedures have been designed to ensure that the Company records, processes, accumulates and communicates information to management, including the Company’s principal executive officer and principal financial officer, to allow timely decisions regarding required disclosures and submission within the time periods specified in the SEC’s rules and forms. All internal control systems, no matter how well designed, have inherent limitations. Therefore, even those determined to be effective can provide only a level of reasonable assurance with respect to financial statement preparation and presentation.

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With respect to the Company’s controls over the application and monitoring of the accounting for income taxes, the Company did not have controls designed and in place to provide effective oversight of the work performed by, and the accuracy of financial information provided by, third-party tax advisors for significant non-routine business transactions. This control deficiency, which was discovered in late February 2014, resulted in a misstatement of the provision of income taxes within the condensed consolidated financial statements in the Company’s Quarterly Reports on Form 10-Q for the fiscal quarters ended March 31, June 30 and September 30, 2013. This control deficiency could result in further misstatement on future non-routine business transactions that would result in material misstatement to the annual or interim consolidated financial statements that would not be prevented or detected. The Company’s principal executive officer and principal financial officer concluded that the Company’s disclosure controls and procedures were not effective as of December 31, 2013 because of the material weakness in internal control over financial reporting described in Management’s Report on Internal Control over Financial Reporting .

Plan of Remediation of Material Weakness

Management is taking steps to remediate the material weakness, including the development of enhanced policies and procedures governing oversight and evaluation of the accounting for income taxes over significant non-routine business transactions. Management believes the additional control procedures, when implemented and validated, will fully remediate this material weakness.

Changes in Internal Control Over Financial Reporting

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 three months ended December 31, 2013 that have materially affected, or are reasonably likely to materially affect, the Company’s internal control over financial reporting.

Set forth in Part IV of this Annual Report and incorporated herein by reference are: Management’s Report on Internal Control over Financial Reporting and the Report of Independent Registered Public Accounting Firm on Internal Control over Financial Reporting.



ITEM 9B.	OTHER INFORMATION

None.

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PART III



ITEM 10.	DIRECTORS, EXECUTIVE OFFICERS AND CORPORATE GOVERNANCE

The information required to be disclosed pursuant to this Item 10 is incorporated in its entirety herein by reference to the Company’s definitive proxy statement to be filed with the Commission pursuant to Regulation 14A within 120 days after the end of the Company’s last fiscal year.

NYSE Annual Certification. The Chief Executive Officer of the Company has previously submitted to the NYSE the annual certification required by Section 303A.12(a) of the NYSE Listed Company Manual, and there were no qualifications to such certification. SEACOR Holdings Inc. has filed the certifications of its Chief Executive Officer and Chief Financial Officer required by Section 302 of the Sarbanes-Oxley Act of 2002 with the SEC as exhibits to this Form 10-K.



ITEM 11.	EXECUTIVE COMPENSATION

The information required to be disclosed pursuant to this Item 11 is incorporated in its entirety herein by reference to the “Compensation Disclosure and Analysis” and “Information Relating to the Board of Directors and Committees Thereof” portions of the Company’s definitive proxy statement to be filed with the Commission pursuant to Regulation 14A within 120 days after the end of the Company’s last fiscal year.



ITEM 12.	SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND MANAGEMENT AND RELATED STOCKHOLDER MATTERS

The information required to be disclosed pursuant to this Item 12 is incorporated in its entirety herein by reference to the "Security Ownership of Certain Beneficial Owners and Management" portion of the Company’s definitive proxy statement to be filed with the Commission pursuant to Regulation 14A within 120 days after the end of the Company’s last fiscal year.



ITEM 13.	CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS, AND DIRECTOR INDEPENDENCE

The information required to be disclosed pursuant to this Item 13 is incorporated in its entirety herein by reference to the "Certain Relationships and Related Transactions" portion of the Company’s definitive proxy statement to be filed with the Commission pursuant to Regulation 14A within 120 days after the end of the Company’s last fiscal year.



ITEM 14.	PRINCIPAL ACCOUNTING FEES AND SERVICES

The information required to be disclosed pursuant to this Item 14 is incorporated in its entirety herein by reference to the "Ratification or Appointment of Independent Auditors" portion of the Company’s definitive proxy statement to be filed with the Commission pursuant to Regulation 14A within 120 days after the end of the Company’s last fiscal year.

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PART IV



ITEM 15.	EXHIBITS, FINANCIAL STATEMENT SCHEDULES


(a)	Documents filed as part of this report:

1. and 2. Financial Statements and Financial Statement Schedules – See Index to Consolidated Financial Statements and Financial Statement Schedule of this Form 10-K

3. Exhibits



Exhibit Number		Description
3.1*		Restated Certificate of Incorporation of SEACOR Holdings, Inc. (incorporated herein by reference to Exhibit 3.1 (a) of the Company’s Quarterly Report on Form 10-Q for the fiscal quarter ended March 31, 1997 and filed with the Commission on May 15, 1997).
3.2*		Certificate of Amendment to the Restated Certificate of Incorporation of SEACOR Holdings, Inc. (incorporated herein by reference to Exhibit 3.1(b) of the Company’s Quarterly Report on Form 10-Q for the fiscal quarter ended March 31, 1997 and filed with the Commission on May 15, 1997).
3.3*		Certificate of Amendment to the Restated Certificate of Incorporation of SEACOR Holdings Inc. (incorporated herein by reference to Exhibit 4.4 of the Company’s Registration Statement on Form S-8 (No. 333-126613) filed with the Commission on July 15, 2005).
3.4*		Fourth Amended and Restated Bylaws of SEACOR Holdings Inc. (incorporated by reference to Exhibit 3.1 of the Company’s Current Report on Form 8-K filed with the Commission on September 20, 2010).
4.1*		Form of Indenture, dated as of January 10, 2001, among SEACOR SMIT Inc. and U.S. Bank Trust National Association as trustee (incorporated herein by reference to Exhibit 4.2 to Amendment No. 1 of the Company’s Registration Statement on Form S-3/A (No. 333-53326) filed with the Commission on January 18, 2001).
4.2*		Form of Indenture, dated as of January 10, 2001, among SEACOR SMIT Inc. and U.S. Bank Trust National Association as trustee (incorporated herein by reference to Exhibit 4.3 to Amendment No. 1 of the Company’s Registration Statement on Form S-3/A (No. 333-53326) filed with the Commission on January 18, 2001).
4.3*		First Supplemental Indenture, dated as of September 27, 2002, to Indenture, dated as of January 10, 2001, between SEACOR SMIT Inc. and U.S. Bank National Association (incorporated herein by reference to Exhibit 4.1 of the Company’s Current Report on Form 8-K filed with Commission on October 1, 2002).
4.4*		Indenture, dated as of August 5, 2003, among Seabulk International, Inc., the Guarantors named therein, and Wachovia Bank, National Association, as Trustee (including forms of notes) (incorporated herein by reference to Exhibit 4.7 of Seabulk International, Inc.’s Registration Statement on Form S-4 (No. 333-110138) filed with the Commission on October 31, 2003).
4.5*		Supplemental Indenture, dated September 24, 2009, between SEACOR Holdings Inc. and U.S. Bank National Association, as trustee (including therein Form of Global Note 7.375% Senior Notes Due 2019) (incorporated by reference to Exhibit 4.1 of the Company’s Current Report on Form 8-K filed with Commission on September 24, 2009).
10.1*+		SEACOR Holdings Inc. 1996 Share Incentive Plan (incorporated herein by reference to Annex A of the Company’s Proxy Statement on DEF 14-A filed with the Commission on March 18, 1996).
10.2*+		SEACOR SMIT Inc. 2000 Stock Option Plan for Non-Employee Directors (incorporated herein by reference to Exhibit 10.1 of the Company’s Quarterly Report on Form 10-Q for the period ended June 30, 2000 and filed with the Commission on August 14, 2000).
10.3*		Form of Management Agreement (incorporated herein by reference to Exhibit 10.4 of the Company’s Current Report on Form 8-K filed with the Commission on December 24, 1996).
10.4*		License Agreement, dated December 19, 1996, between SEACOR Holdings Inc., certain subsidiaries of SEACOR Holdings Inc. and Smit Intenationale N.V. (incorporated herein by reference to Exhibit 10.6 of the Company’s Current Report on Form 8-K filed with the Commission on December 24, 1996).
10.5*+		Form of Type A Restricted Stock Grant Agreement (incorporated herein by reference to Exhibit 10.35 of the Company’s Annual Report on Form 10-K for the fiscal year ended December 31, 1999 filed with the Commission on March 30, 2000).
10.6*+		Form of Type B Restricted Stock Grant Agreement (incorporated herein by reference to Exhibit 10.36 of the Company’s Annual Report on Form 10-K for the fiscal year ended December 31, 1999 filed with the Commission on March 30, 2000).
10.7*+		Form of Option Agreement for Officers and Key Employees Pursuant to the SEACOR SMIT Inc. 1996 Share Incentive Plan (incorporated herein by reference to Exhibit 10.37 of the Company’s Annual Report on Form 10-K for the fiscal year ended December 31, 1999 filed with the Commission on March 30, 2000).

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Exhibit Number		Description
10.8*+		SEACOR SMIT Inc. 2003 Non-Employee Director Share Incentive Plan (incorporated herein by reference to Exhibit 10.25 of the Company’s Annual Report on Form 10-K for the fiscal year ended December 31, 2003 filed with the Commission on March 15, 2004).
10.9*+		SEACOR SMIT Inc. 2003 Share Incentive Plan (incorporated herein by reference to Exhibit 10.26 of the Company’s Annual Report on Form 10-K for the fiscal year ended December 31, 2003 filed with the Commission on March 15, 2004).
10.10*+		Form of Option Agreement for Officers and Key Employees Pursuant to the SEACOR Holdings Inc. 2003 Share Incentive Plan (incorporated herein by reference to Exhibit 10.1 of the Company’s Current Report on Form 8-K filed with the Commission on November 24, 2004).
10.11*+		Form of Restricted Stock Grant Agreement under the Company’s 2003 Share Incentive Plan (incorporated herein by reference to Exhibit 10.2 of the Company’s Current Report on Form 8-K filed with the Commission on November 24, 2004).
10.12*		Form of Warrant Exchange Agreement (incorporated herein by reference to Exhibit 10.32 of the Company’s Registration Statement (No. 333-124232) on Form S-4/A filed with the Commission on May 25, 2005).
10.13*+		SEACOR Nonqualified Deferred Compensation Plan, dated as of October 15, 2005 (incorporated herein by reference to Exhibit 99.1 of the Company’s Current Report on Form 8-K filed with the Commission on October 28, 2005).
10.14*		Revolving Credit Facility Agreement, dated November 3, 2006, between SEACOR Holdings Inc. as Borrower, and DNB Nor, ASA, as Agent (incorporated herein by reference to Exhibit 10.1 of SEACOR’s Quarterly Report on Form 10-Q for the fiscal quarter ended September 30, 2006 filed with the Commission on November 7, 2006).
10.15*+		SEACOR SMIT Inc. 2000 Employee Stock Purchase Plan, as amended February 14, 2001 (incorporated herein by reference to Exhibit 4.4 of the Company’s Registration Statement on Form S-8 (No. 333-56714) filed with the Commission on March 8, 2001).
10.16*+		SEACOR Holdings Inc. 2007 Share Incentive Plan (incorporated herein by reference to Annex A of the Company’s Proxy Statement on DEF 14-A filed with the Commission on April 13, 2007).
10.17*		Amendment No. 1 to Revolving Credit Facility Agreement dated as of November 3, 2006 (incorporated herein by reference to Exhibit 10.1 of the Company’s Current Report on Form 8-K filed with the Commission on July 10, 2007).
10.18*+		Form of Non-Employee Director Annual Share Incentive Grant Agreement (incorporated herein by reference to Exhibit 10.1 of the Company’s Current Report on Form 8-K filed with the Commission on May 8, 2008).
10.19*+		Form of Stock Option Grant Agreement for Officers and Key Employees Pursuant to the SEACOR Holdings Inc. 2007 Share Incentive Plan (incorporated herein by reference to Exhibit 10.2 of the Company’s Current Report on Form 8-K filed with the Commission on May 8, 2008).
10.20*+		Form of Restricted Stock Grant Agreement (incorporated herein by reference to Exhibit 10.3 of the Company’s Current Report on Form 8-K filed with the Commission on May 8, 2008).
10.21*+		SEACOR Holdings Inc. 2009 Employee Stock Purchase Plan effective March 11, 2009 (incorporated herein by reference to Appendix A of the Company’s Proxy Statement on DEF 14-A filed with the Commission on April 7, 2009).
10.22*+		SEACOR Holdings Inc. 2007 Share Incentive Plan (as amended through March 11, 2009) (incorporated herein by reference to Appendix B of the Company’s Proxy Statement on DEF 14-A filed with the Commission on April 7, 2009).
10.23*+		SEACOR Holdings Inc. Management Incentive Plan (incorporated herein by reference to Appendix C of the Company’s Proxy Statement on DEF 14-A filed with the Commission on April 7, 2009).
10.24*+		Form of Restricted Stock Grant Agreement Pursuant to the SEACOR Holdings Inc. Amended 2007 Share Incentive Plan (incorporated herein by reference to Exhibit 10.31 of the Company’s Annual Report on Form 10-K for the fiscal year ended December 31, 2010 filed with the Commission on February 25, 2011).
10.25		Senior Secured Revolving Credit Facility Agreement by and among (1) Era Group Inc., (2) Wells Fargo Securities, LLC, JP Morgan Chase Bank, N.A., Deutsche Bank Securities Inc., Suntrust Robinson Humphrey, Inc. and Regions Bank, as mandated lead arrangers, (3) Wells Fargo Securities, LLC, JP Morgan Chase Bank, N.A., Deutsche Bank Securities Inc., Suntrust Robinson Humphrey, Inc. and Regions Bank, as bookrunners, (4) Wells Fargo Bank, National Association (“Wells Fargo”), as administrative agent, (5) JP Morgan Chase Bank, N.A., as syndication agent, (6) Deutsche Bank Securities Inc., Suntrust Bank and Regions Bank, as co-documentation agents, (7) Compass Bank, Whitney Bank, Goldman Sachs Bank USA, Comerica Bank and The Northern Trust Company, as managing agents, (8) Wells Fargo, as swing line bank, and (9) banks and financial institutions whose names and addresses are set out in Schedule A to the agreement.
10.26+		Compensation Arrangements for the Executive Officers.

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Exhibit Number		Description
10.27+		Compensation of Non-Employee Directors.
21.1		List of Registrant’s Subsidiaries.
23.1		Consent of Independent Registered Public Accounting Firm.
31.1		Certification by the Principal Executive Officer Pursuant to Rule 13a-14(a) or Rule 15d-14(a) of the Exchange Act.
31.2		Certification by the Principal Financial Officer Pursuant to Rule 13a-14(a) or Rule 15d-14(a) of the Exchange Act.
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



*	Incorporated herein by reference as indicated.



+	Management contracts or compensatory plans or arrangements required to be filed as an Exhibit pursuant to Item 15 (b) of the rules governing the preparation of this Annual Report on Form 10-K.



**	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 Section 13 of the Securities Exchange Act of 1934, the registrant has duly caused this annual report on Form 10-K for the fiscal year ended December 31, 2013 , to be signed on its behalf by the undersigned, and in the capacities indicated, thereunto duly authorized.



SEACOR Holdings Inc. (Registrant)

By:		/ S / R ICHARD R YAN
		Richard Ryan, Senior Vice President and Chief Financial Officer (Principal Financial Officer)

Date: March 3, 2014

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



Signer	Title	Date

/S/ RICHARD RYAN	Senior Vice President and	March 3, 2014
Richard Ryan	Chief Financial Officer (Principal Financial Officer)
/S/ MATTHEW CENAC	Vice President and	March 3, 2014
Matthew Cenac	Chief Accounting Officer (Principal Accounting Officer)
/S/ CHARLES FABRIKANT	Executive Chairman and Director	March 3, 2014
Charles Fabrikant	(Principal Executive Officer)
/S/ OIVIND LORENTZEN	President, Chief Executive Officer	March 3, 2014
Oivind Lorentzen	and Director
/S/ DAVID BERZ	Director	March 3, 2014
David Berz
/S/ PIERRE DE DEMANDOLX	Director	March 3, 2014
Pierre De Demandolx
/S/ ANDREW R. MORSE	Director	March 3, 2014
Andrew R. Morse
/S/ CHRISTOPHER REGAN	Director	March 3, 2014
Christopher Regan
/S/ STEVEN J. WISCH	Director	March 3, 2014
Steven J. Wisch

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INDEX TO CONSOLIDATED FINANCIAL STATEMENTS AND

FINANCIAL STATEMENT SCHEDULE




		Page
Management’s Report on Internal Control Over Financial Reporting		84

Report of Independent Registered Public Accounting Firm on Internal Control Over Financial Reporting		85

Report of Independent Registered Public Accounting Firm		86

Consolidated Financial Statements:

Consolidated Balance Sheets as of December 31, 2013 and 2012		87

Consolidated Statements of Income for the years ended December 31, 2013, 2012 and 201 1		88

Consolidated Statements of Comprehensive Income for the years ended December 31, 2013, 2012 and 201 1		89

Consolidated Statements of Changes in Equity for the years ended December 31, 2013, 2012 and 2011		90

Consolidated Statements of Cash Flows for the years ended December 31, 2013, 2012 and 2011		92

Notes to Consolidated Financial Statements		94

Financial Statement Schedule:

Schedule II – Valuation and Qualifying Accounts for the years ended December 31, 2013, 2012 and 2011		136

Except for the Financial Statement Schedule set forth above, all other required schedules have been omitted since the information is either included in the consolidated financial statements, not applicable or not required.

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MANAGEMENT’S REPORT ON INTERNAL CONTROL OVER FINANCIAL REPORTING

SEACOR Holdings Inc.’s (“SEACOR”) management is responsible for establishing and maintaining adequate internal control over financial reporting (as defined in Rule 13a-15(f) under the Securities Exchange Act of 1934).

Management conducted an evaluation of the effectiveness of its internal control over financial reporting as of December 31, 2013 based on the framework in Internal Control – Integrated Framework (1992 framework) issued by the Committee of Sponsoring Organizations of the Treadway Commission. Internal control over financial reporting is a process designed to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles (“GAAP”). Internal control over financial reporting includes those policies and procedures that (a) pertain to the maintenance of records that, in reasonable detail, accurately and fairly reflect the transactions and dispositions of the assets of the Company; (b) provide reasonable assurance that transactions are recorded as necessary to permit preparation of financial statements in accordance with GAAP, and that receipts and expenditures of the Company are being made only in accordance with authorizations of management and directors of the Company; and (c) provide reasonable assurance regarding prevention or timely detection of unauthorized acquisition, use, or disposition of the Company’s assets that could have a material effect on the consolidated financial statements. Because of its inherent limitations, internal control over financial reporting may not prevent or detect misstatements. Also, projections of any evaluation of effectiveness to future periods are subject to the risk that controls may become inadequate because of changes in conditions, or that the degree of compliance with the policies and procedures may deteriorate.

Based on the evaluation performed, management identified the material weakness described below in the Company’s internal control over financial reporting (as defined in Rule 13a-15(f) under the Securities Exchange Act of 1934, as amended) as of December 31, 2013 . A material weakness is a deficiency, or a combination of deficiencies, in internal control over financial reporting, such that there is a reasonable possibility that a material misstatement of the annual or interim financial statements will not be prevented or detected on a timely basis.

With respect to the Company’s controls over the application and monitoring of the accounting for income taxes, the Company did not have controls designed and in place to provide effective oversight of the work performed by, and the accuracy of financial information provided by, third-party tax advisors for significant non-routine business transactions. This control deficiency, which was discovered in late February 2014, resulted in a misstatement of the provision of income taxes within the condensed consolidated financial statements in the Company’s Quarterly Reports on Form 10-Q for the fiscal quarters ended March 31, June 30 and September 30, 2013. This control deficiency could result in further misstatement on future non-routine business transactions that would result in material misstatement to the annual or interim consolidated financial statements that would not be prevented or detected. Accordingly, management has concluded that this control deficiency constitutes a material weakness.

Because of the above described material weakness in internal control over financial reporting, management, including the Company’s principal executive officer and principal financial officer, concluded, that as of December 31, 2013 , the Company's internal control over financial reporting was not effective based on those criteria.

SEACOR’s internal control over financial reporting as of December 31, 2013 has been audited by Ernst & Young LLP, the independent registered public accounting firm that has also audited SEACOR’s consolidated financial statements included in this Annual Report on Form 10-K. Ernst & Young LLP’s report on SEACOR’s internal control over financial reporting is included elsewhere herein.

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REPORT OF INDEPENDENT REGISTERED CERTIFIED PUBLIC ACCOUNTING FIRM

ON INTERNAL CONTROL OVER FINANCIAL REPORTING

The Board of Directors and Stockholders of SEACOR Holdings Inc.

We have audited SEACOR Holdings Inc.’s internal control over financial reporting as of December 31, 2013 , based on criteria established in Internal Control - Integrated Framework issued by the Committee of Sponsoring Organizations of the Treadway Commission (1992 framework) (the COSO criteria). SEACOR Holdings Inc.’s management is responsible for maintaining effective internal control over financial reporting, and for its assessment of the effectiveness of internal control over financial reporting included in the accompanying Management’s Report on Internal Control over Financial Reporting . Our responsibility is to express an opinion on the company’s internal control over financial reporting based on our audit.

We conducted our audit in accordance with the standards of the Public Company Accounting Oversight Board (United States). Those standards require that we plan and perform the audit to obtain reasonable assurance about whether effective internal control over financial reporting was maintained in all material respects. Our audit included obtaining an understanding of internal control over financial reporting, assessing the risk that a material weakness exists, testing and evaluating the design and operating effectiveness of internal control based on the assessed risk, and performing such other procedures as we considered necessary in the circumstances. We believe that our audit provides a reasonable basis for our opinion.

A company’s internal control over financial reporting is a process designed to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles. A company’s internal control over financial reporting includes those policies and procedures that (1) pertain to the maintenance of records that, in reasonable detail, accurately and fairly reflect the transactions and dispositions of the assets of the company; (2) provide reasonable assurance that transactions are recorded as necessary to permit preparation of financial statements in accordance with generally accepted accounting principles, and that receipts and expenditures of the company are being made only in accordance with authorizations of management and directors of the company; and (3) provide reasonable assurance regarding prevention or timely detection of unauthorized acquisition, use, or disposition of the company’s assets that could have a material effect on the financial statements.

Because of its inherent limitations, internal control over financial reporting may not prevent or detect misstatements. Also, projections of any evaluation of effectiveness to future periods are subject to the risk that controls may become inadequate because of changes in conditions, or that the degree of compliance with the policies or procedures may deteriorate.

A material weakness is a deficiency, or combination of deficiencies, in internal control over financial reporting, such that there is a reasonable possibility that a material misstatement of the company’s annual or interim financial statements will not be prevented or detected on a timely basis. The following material weakness has been identified and included in management’s assessment. A material weakness exists in internal control resulting from design control deficiencies over the oversight of the work performed by, and the accuracy of financial information provided by, third-party tax advisors for significant non-routine business transactions. We also have audited, in accordance with the standards of the Public Company Accounting Oversight Board (United States), the consolidated balance sheets of SEACOR Holdings Inc. as of December 31, 2013 and 2012 , and the related consolidated statements of income, comprehensive income, changes in equity and cash flows for each of the three years in the period ended December 31, 2013 . This material weakness was considered in determining the nature, timing and extent of audit tests applied in our audit of the 2013 financial statements, and this report does not affect our report dated March 3, 2014 , which expressed an unqualified opinion on those financial statements.

In our opinion, because of the effect of the material weakness described above on the achievement of the objectives of the control criteria, SEACOR Holdings Inc. has not maintained effective internal control over financial reporting as of December 31, 2013 , based on the COSO criteria.

/s/ Ernst & Young LLP

Boca Raton, Florida

March 3, 2014

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REPORT OF INDEPENDENT REGISTERED CERTIFIED PUBLIC ACCOUNTING FIRM

The Board of Directors and Stockholders of SEACOR Holdings Inc.

We have audited the accompanying consolidated balance sheets of SEACOR Holdings Inc. as of December 31, 2013 and 2012 , and the related consolidated statements of income, comprehensive income, changes in equity and cash flows for each of the three years in the period ended December 31, 2013 . Our audits also included the financial statement schedule listed in the Index at Item 15(a). These financial statements and schedule are the responsibility of the Company’s management. Our responsibility is to express an opinion on these financial statements and schedule based on our audits.

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

In our opinion, the financial statements referred to above present fairly, in all material respects, the consolidated financial position of SEACOR Holdings Inc. at December 31, 2013 and 2012 , and the consolidated results of its operations and its cash flows for each of the three years in the period ended December 31, 2013 , in conformity with U.S. generally accepted accounting principles. Also, in our opinion, the related financial statement schedule, when considered in relation to the basic financial statements taken as a whole, presents fairly in all material respects the information set forth therein.

We also have audited, in accordance with the standards of the Public Company Accounting Oversight Board (United States), SEACOR Holdings Inc.’s internal control over financial reporting as of December 31, 2013 , based on criteria established in Internal Control – Integrated Framework issued by the Committee of Sponsoring Organizations of the Treadway Commission (1992 framework) and our report dated March 3, 2014 , expressed an adverse opinion thereon.

/s/ Ernst & Young LLP

Boca Raton, Florida

March 3, 2014

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SEACOR HOLDINGS INC.

CONSOLIDATED BALANCE SHEETS

(in thousands, except share data)



	December 31,
	2013			2012
ASSETS
Current Assets:
Cash and cash equivalents	$	527,435		$	248,204
Restricted cash	12,175			28,285
Marketable securities	24,292			21,668
Receivables:
Trade, net of allowance for doubtful accounts of $1,162 and $1,201 in 2013 and 2012, respectively	215,768			224,944
Other	48,181			45,334
Inventories	27,615			25,787
Deferred income taxes	116			3,530
Prepaid expenses and other	6,701			12,719
Discontinued operations	—			108,153
Total current assets	862,283			718,624
Property and Equipment:
Historical cost	2,199,183			2,238,383
Accumulated depreciation	(866,330		)	(763,803		)
	1,332,853			1,474,580
Construction in progress	143,482			110,296
Net property and equipment	1,476,335			1,584,876
Investments, at Equity, and Advances to 50% or Less Owned Companies	440,853			272,535
Construction Reserve Funds & Title XI Reserve Funds	261,739			195,629
Goodwill	17,985			17,978
Intangible Assets, Net	12,423			15,305
Other Assets	44,615			55,123
Discontinued Operations	—			840,724
	$	3,116,233		$	3,700,794
LIABILITIES AND EQUITY
Current Liabilities:
Current portion of long-term debt	$	45,323		$	21,920
Accounts payable and accrued expenses	85,477			107,892
Accrued wages and benefits	29,510			19,303
Accrued interest	5,849			5,226
Accrued income taxes	17,733			8,089
Short sales of marketable securities	10,697			8,277
Accrued capital, repair and maintenance expenditures	19,975			8,013
Deferred revenues	6,592			6,592
Other current liabilities	33,263			40,493
Discontinued operations	—			39,836
Total current liabilities	254,419			265,641
Long-Term Debt	834,118			655,309
Deferred Income Taxes	457,827			426,027
Deferred Gains and Other Liabilities	144,441			120,401
Discontinued Operations	—			490,741
Total liabilities	1,690,805			1,958,119
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; 37,219,201 and 36,740,324 shares issued in 2013 and 2012, respectively	372			367
Additional paid-in capital	1,394,621			1,330,324
Retained earnings	1,095,270			1,473,509
Shares held in treasury of 16,837,113 and 16,852,391 in 2013 and 2012, respectively, at cost	(1,088,219		)	(1,088,560		)
Accumulated other comprehensive loss, net of tax	(1,192		)	(1,986		)
	1,400,852			1,713,654
Noncontrolling interests in subsidiaries	24,576			29,021
Total equity	1,425,428			1,742,675
	$	3,116,233		$	3,700,794

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.

CONSOLIDATED STATEMENTS OF INCOME

(in thousands, except share data)



	For the years ended December 31,
	2013			2012			2011
Operating Revenues	$	1,247,272		$	1,308,297		$	1,032,497
Costs and Expenses:
Operating	908,871			977,469			745,553
Administrative and general	141,348			166,743			131,772
Depreciation and amortization	134,518			131,667			106,873
	1,184,737			1,275,879			984,198
Gains on Asset Dispositions and Impairments, Net	37,507			23,987			18,839
Operating Income	100,042			56,405			67,138
Other Income (Expense):
Interest income	15,467			17,360			12,879
Interest expense	(42,592		)	(37,891		)	(39,759		)
Debt extinguishment losses, net	—			(160		)	(99		)
Marketable security gains (losses), net	5,803			12,891			(7,893		)
Derivative losses, net	(8,323		)	(2,812		)	(30,055		)
Foreign currency gains (losses), net	(3,351		)	1,631			540
Other, net	586			7,148			1,018
	(32,410		)	(1,833		)	(63,369		)
Income from Continuing Operations Before Income Tax Expense (Benefit) and Equity in Earnings (Losses) of 50% or Less Owned Companies	67,632			54,572			3,769
Income Tax Expense (Benefit):
Current	16,176			47,582			30,569
Deferred	10,571			(23,401		)	(27,259		)
	26,747			24,181			3,310
Income from Continuing Operations Before Equity in Earnings (Losses) of 50% or Less Owned Companies	40,885			30,391			459
Equity in Earnings (Losses) of 50% or Less Owned Companies, Net of Tax	7,264			(5,764		)	9,908
Income from Continuing Operations	48,149			24,627			10,367
Income (Loss) from Discontinued Operations, Net of Tax	(10,325		)	35,832			31,783
Net Income	37,824			60,459			42,150
Net Income (Loss) attributable to Noncontrolling Interests in Subsidiaries	854			(756		)	1,094
Net Income attributable to SEACOR Holdings Inc.	$	36,970		$	61,215		$	41,056

Net Income (Loss) attributable to SEACOR Holdings Inc.:
Continuing operations	$	47,195		$	25,343		$	9,273
Discontinued operations	(10,225		)	35,872			31,783
	$	36,970		$	61,215		$	41,056

Basic Earnings (Loss) Per Common Share of SEACOR Holdings Inc.:
Continuing operations	$	2.37		$	1.24		$	0.44
Discontinued operations	(0.51		)	1.76			1.50
	$	1.86		$	3.00		$	1.94
Diluted Earnings (Loss) Per Common Share of SEACOR Holdings Inc.:
Continuing operations	$	2.32		$	1.22		$	0.43
Discontinued operations	(0.50		)	1.73			1.48
	$	1.82		$	2.95		$	1.91
Weighted Average Common Shares Outstanding:
Basic	19,893,954			20,426,770			21,119,461
Diluted	20,293,287			20,775,896			21,466,843
Special Cash Dividend Declared and Paid Per Common Share of SEACOR Holdings Inc.	$	—		$	5.00		$	—

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.

CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME

(in thousands)



	For the years ended December 31,
	2013			2012			2011
Net Income	$	37,824		$	60,459		$	42,150
Other Comprehensive Income (Loss):
Foreign currency translation gains (losses)	859			4,477			(1,089		)
Reclassification of foreign currency translation (gains) losses to foreign currency gains (losses), net	(222		)	833			342
Derivative gains (losses) on cash flow hedges	109			(1,710		)	(4,532		)
Reclassification of derivative losses on cash flow hedges to interest expense	—			2,000			2,867
Reclassification of derivative losses on cash flow hedges to equity in earnings (losses) of 50% or less owned companies	622			724			765
Reclassification of net derivative losses on cash flow hedges to derivative losses, net upon dedesignation	—			3,272			—
Other	17			21			116
	1,385			9,617			(1,531		)
Income tax (expense) benefit	(457		)	(3,216		)	494
	928			6,401			(1,037		)
Comprehensive Income	38,752			66,860			41,113
Comprehensive Income (Loss) attributable to Noncontrolling Interests in Subsidiaries	933			(327		)	976
Comprehensive Income attributable to SEACOR Holdings Inc.	$	37,819		$	67,187		$	40,137

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. CONSOLIDATED STATEMENTS OF CHANGES IN EQUITY (in thousands)

	SEACOR Holdings Inc. Stockholders’ Equity
	Common Stock		Additional Paid-in Capital			Retained Earnings			Treasury Stock			Accumulated Other Comprehensive Loss			Non - controlling Interests in Subsidiaries			Total Equity
Year Ended 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	—		—			—			2,971			—			—			2,971
Exercise of stock options	1		8,776			—			—			—			—			8,777
Director stock awards	—		363			—			—			—			—			363
Restricted stock and restricted stock units	2		123			—			1			—			—			126
Purchase of treasury shares	—		—			—			(71,290		)	—			—			(71,290		)
Amortization of share awards	—		21,589			—			—			—			—			21,589
Cancellation of restricted stock	—		365			—			(365		)	—			—			—
Purchase of subsidiary shares from noncontrolling interests	—		(303		)	—			—			—			(2,092		)	(2,395		)
Acquisition of a subsidiary with noncontrolling interests	—		—			—			—			—			10,284			10,284
Disposition of subsidiary with noncontrolling interests	—		—			—			—			—			(49		)	(49		)
Issuance of noncontrolling interests	—		—			—			—			—			1,853			1,853
Dividends paid to noncontrolling interests	—		—			—			—			—			(2,644		)	(2,644		)
Net Income	—		—			41,056			—			—			1,094			42,150
Other comprehensive loss	—		—			—			—			(919		)	(118		)	(1,037		)
Year Ended December 31, 2011	364		1,256,209			1,512,679			(971,687		)	(7,958		)	18,456			1,808,063
Issuance of common stock:
Employee Stock Purchase Plan	—		—			—			2,963			—			—			2,963
Exercise of stock options	2		8,250			—			—			—			—			8,252
Director stock awards	—		359			—			—			—			—			359
Restricted stock and restricted stock units	1		443			—			(96		)	—			—			348
Windcat Acquisition	—		585			—			—			—			—			585
Issuance of conversion option in convertible debt, net of tax	—		31,359			—			—			—			—			31,359
Special Cash Dividend	—		—			(100,385		)	—			—			—			(100,385		)
Purchase of treasury shares	—		—			—			(119,551		)	—			—			(119,551		)
Amortization of share awards	—		32,930			—			—			—			—			32,930
Cancellation of restricted stock	—		189			—			(189		)	—			—			—
Acquisition of a subsidiary with noncontrolling interests	—		—			—			—			—			13,710			13,710
Issuance of noncontrolling interests	—		—			—			—			—			83			83
Dividends paid to noncontrolling interests	—		—			—			—			—			(2,901		)	(2,901		)
Net Income (Loss)	—		—			61,215			—			—			(756		)	60,459
Other comprehensive income	—		—			—			—			5,972			429			6,401
Year Ended December 31, 2012	367		1,330,324			1,473,509			(1,088,560		)	(1,986		)	29,021			1,742,675

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SEACOR HOLDINGS INC. CONSOLIDATED STATEMENTS OF CHANGES IN EQUITY (continued) (in thousands)

	SEACOR Holdings Inc. Stockholders’ Equity
	Common Stock		Additional Paid-in Capital			Retained Earnings			Treasury Stock			Accumulated Other Comprehensive Loss			Non - controlling Interests in Subsidiaries			Total Equity
Issuance of common stock:
Employee Stock Purchase Plan	—		—			—			1,770			—			—			1,770
Exercise of stock options	3		18,222			—			—			—			—			18,225
Director stock awards	—		210			—			—			—			—			210
Restricted stock and restricted stock units	2		(24		)	—			135			—			—			113
Issuance of conversion option in convertible debt, net of tax	—		30,652			—			—			—			—			30,652
Distribution of Era Group stock to shareholders	—		—			(415,209		)	—			(55		)	(107		)	(415,371		)
Share award settlements for Era Group employees and directors	—		(631		)	—			—			—			—			(631		)
Amortization of share awards	—		14,304			—			—			—			—			14,304
Cancellation of restricted stock	—		1,564			—			(1,564		)	—			—			—
Disposition of subsidiary with noncontrolling interests	—		—			—			—			—			(1,125		)	(1,125		)
Issuance of noncontrolling interests	—		—			—			—			—			40			40
Dividends paid to noncontrolling interests	—		—			—			—			—			(4,186		)	(4,186		)
Net Income	—		—			36,970			—			—			854			37,824
Other comprehensive income	—		—			—			—			849			79			928
Year Ended December 31, 2013	$	372	$	1,394,621		$	1,095,270		$	(1,088,219	)	$	(1,192	)	$	24,576		$	1,425,428

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. CONSOLIDATED STATEMENTS OF CASH FLOWS (in thousands)

	For the years ended December 31,
	2013			2012			2011
Cash Flows from Operating Activities of Continuing Operations:
Income from Continuing Operations	$	48,149		$	24,627		$	10,367
Adjustments to reconcile income from continuing operations to net cash provided by operating activities of continuing operations:
Depreciation and amortization	134,518			131,667			106,873
Amortization of deferred gains on sale and leaseback transactions	(10,687		)	(16,652		)	(22,191		)
Debt discount amortization, net	10,551			1,266			828
Amortization of share awards	14,304			32,930			21,589
Director stock awards	211			357			359
Bad debt expense (income)	170			1,311			(56		)
Gains on asset dispositions and impairments, net	(37,507		)	(23,987		)	(18,839		)
Debt extinguishment losses, net	—			160			99
Marketable security (gains) losses, net	(5,803		)	(12,891		)	7,893
Purchases of marketable securities	(7,387		)	(40,396		)	(117,145		)
Proceeds from sale of marketable securities	12,791			36,537			178,016
Derivative losses, net	8,323			2,812			30,055
Cash settlements on derivative transactions, net	(11,398		)	(11,868		)	(20,636		)
Foreign currency (gains) losses, net	3,351			(1,631		)	(540		)
Deferred income tax expense (benefit)	10,571			(23,401		)	(27,259		)
Equity in (earnings) losses of 50% or less owned companies, net of tax	(7,264		)	5,764			(9,908		)
Dividends received from 50% or less owned companies	9,490			6,606			8,346
Other, net	1,528			542			484
Changes in operating assets and liabilities:
(Increase) decrease in receivables	8,873			18,775			(18,562		)
(Increase) decrease in prepaid expenses and other assets	(2,597		)	6,655			(1,672		)
Increase (decrease) in accounts payable, accrued expenses and other liabilities	4,839			(57,696		)	(13,473		)
Net cash provided by operating activities of continuing operations	185,026			81,487			114,628
Cash Flows from Investing Activities of Continuing Operations:
Purchases of property and equipment	(195,901		)	(239,350		)	(165,264		)
Proceeds from disposition of property and equipment	263,854			114,032			75,733
Investments in and advances to 50% or less owned companies	(171,476		)	(45,572		)	(41,313		)
Return of investments and advances from 50% or less owned companies	18,268			87,275			22,422
Net advances on revolving credit line to 50% or less owned companies	—			(300		)	(4,339		)
(Issuances of) payments received on third party leases and notes receivable, net	16,423			36,033			(26,742		)
Net (increase) decrease in restricted cash	15,301			(7,004		)	(8,630		)
Net (increase) decrease in construction reserve funds and title XI reserve funds	(66,110		)	64,345			63,911
Business acquisitions, net of cash acquired	(11,127		)	(148,088		)	(90,588		)
Net cash used in investing activities of continuing operations	(130,768		)	(138,629		)	(174,810		)

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SEACOR HOLDINGS INC. CONSOLIDATED STATEMENTS OF CASH FLOWS (continued) (in thousands)

	For the years ended December 31,
	2013			2012			2011
Cash Flows from Financing Activities of Continuing Operations:
Payments on long-term debt and capital lease obligations	(18,164		)	(484,153		)	(36,898		)
Net borrowings (repayments) under inventory financing arrangements	1,526			(14,600		)	20,210
Proceeds from issuance of long-term debt, net of offering costs	176,586			414,051			52,877
Proceeds from issuance of conversion option in convertible debt, net of offering costs	47,157			48,245			—
Special Cash Dividend	—			(100,385		)	—
Common stock acquired for treasury	—			(119,551		)	(71,290		)
Share award settlements for Era Group employees and directors	(357		)	—			—
Proceeds and tax benefits from share award plans	19,972			11,683			11,888
Purchase of subsidiary shares from noncontrolling interests	—			—			(1,149		)
Dividends paid to noncontrolling interests, net	(4,146		)	(2,818		)	(915		)
Net cash provided by (used in) financing activities of continuing operations	222,574			(247,528		)	(25,277		)
Effects of Exchange Rate Changes on Cash and Cash Equivalents	477			2,087			1,517
Net Increase (Decrease) in Cash and Cash Equivalents from Continuing Operations	277,309			(302,583		)	(83,942		)
Cash Flows from Discontinued Operations:
Operating Activities	24,298			189,216			21,305
Investing Activities	(8,502		)	(7,665		)	(157,146		)
Financing Activities	(14,017		)	(12,919		)	246,260
Effect of Exchange Rate Changes on Cash and Cash Equivalents	143			673			442
Net Increase in Cash and Cash Equivalents from Discontinued Operations	1,922			169,305			110,861
Net Increase (Decrease) in Cash and Cash Equivalents	279,231			(133,278		)	26,919
Cash and Cash Equivalents, Beginning of Year	248,204			381,482			354,563
Cash and Cash Equivalents, End of Year	$	527,435		$	248,204		$	381,482

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.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS



1.	NATURE OF OPERATIONS AND ACCOUNTING POLICIES

Nature of Operations and Segmentation. SEACOR Holdings Inc. (“SEACOR”) and its subsidiaries (collectively referred to as the “Company”) are in the business of owning, operating, investing in and marketing equipment, primarily in the offshore oil and gas, shipping and logistics industries. Accounting standards require public business enterprises to report information about each of their operating business segments that exceed certain quantitative thresholds or meet certain other reporting requirements. Operating business segments have been defined as a component of an enterprise about which separate financial information is available and is evaluated regularly by the chief operating decision maker in deciding how to allocate resources and in assessing performance. The Company has identified the following reporting segments:

Offshore Marine Services. Offshore Marine Services operates a diverse fleet of support vessels primarily servicing offshore oil and gas exploration, development and production facilities worldwide. The vessels deliver cargo and personnel to offshore installations; handle anchors and mooring equipment required to tether rigs to the seabed; tow rigs and assist in placing them on location and moving them between regions; and carry and launch equipment such as remote operated vehicles or “ROVs” used underwater in drilling, well-completion and emergencies. In addition to supporting drilling activities, Offshore Marine Services' vessels support offshore construction and maintenance work, provide accommodations for technicians and specialists, and provide standby safety support and emergency response services. Offshore Marine Services also operates a fleet of lift boats in the U.S. Gulf of Mexico supporting well intervention, work-over, decommissioning and diving operations and has a controlling interest in a business that owns and operates vessels primarily used to move personnel and supplies to offshore wind farms. In addition, Offshore Marine Services offers logistics services in support of offshore oil and gas exploration, development and production operations, including shore bases, marine transport and other supply chain management services. Offshore Marine Services contributed 45% , 40% and 36% of consolidated operating revenues in 2013 , 2012 and 2011 , respectively.

Inland River Services. Inland River Services owns, operates, invests in and markets river transportation equipment primarily used for moving agricultural and industrial commodities, and chemical and petrochemical products, on the U.S. Inland River Waterways, primarily the Mississippi River, Illinois River, Tennessee River, Ohio River and their tributaries, and the Gulf Intracoastal Waterways. Internationally, Inland River Services has operations on the Magdalena River in Colombia and noncontrolling interests in operations on the Parana-Paraguay River Waterways and in a transshipment terminal at the Port of Ibicuy, Argentina. In addition to its primary barge business, Inland River Services also owns, operates and invests in high-speed multi-modal terminal facilities for both dry and liquid commodities and provides a broad range of services including machine shop, gear and engine repairs, and the repair and drydocking of barges and towboats at strategic locations on the U.S. Inland River Waterways. Inland River Services contributed 17% , 17% and 18% of consolidated operating revenues in 2013 , 2012 and 2011 , respectively.

Shipping Services. Shipping Services invests in, operates and leases a diversified fleet of U.S.-flag and foreign-flag marine transportation related assets, including deep-sea cargo vessels primarily servicing the U.S. coastwise petroleum trade, harbor tugs servicing vessels docking in the U.S. Gulf and East Coast ports and foreign-flag Very Large Gas Carriers ("VLGC's") through its noncontrolling investment in Dorian LPG. Additional assets and services include liner and short-sea transportation to and from ports in Florida, Puerto Rico, the Bahamas and Western Caribbean, a terminal support and bunkering operation in St. Eustatius, a U.S.-flag articulated tug and dry-bulk barge operating on the Great Lakes and technical ship management services. Shipping Services contributed 16% , 14% and 16% of consolidated operating revenues in 2013 , 2012 and 2011 , respectively.

Illinois Corn Processing. Illinois Corn Processing LLC ("ICP") operates an alcohol manufacturing, storage and distribution facility located in Pekin, IL. A flexible production platform and infrastructure enables ICP to produce, store, and distribute a variety of high quality alcohol used in the food, beverage, industrial, and petrochemical end-markets as well as fuel grade ethanol. The capability to produce these specialized streams differentiates ICP from other fuel ethanol plants and positions it as a key supply partner to a broad customer base. The Company obtained a controlling interest in ICP on February 1, 2012 through the acquisition of a portion of its partner's interest. ICP contributed 16% and 14% of consolidated operating revenues in 2013 and 2012 , respectively.

Other. The Company also has activities that are referred to and described under Other, which primarily include a noncontrolling investment in emergency and crisis services activities, agricultural commodity trading and logistics activities, lending and leasing activities and noncontrolling interests in various other businesses, primarily industrial aviation services businesses in Asia.

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Discontinued Operations (see Note 16). The Company reports the historical financial position, results of operations and cash flows of disposed businesses as discontinued operations when it has no continuing interest in the business. On March 16, 2012, the Company sold National Response Corporation ("NRC"), NRC Environmental Services Inc., SEACOR Response Ltd., and certain other subsidiaries (collectively the “SES Business”) to J.F. Lehman & Company, a leading, middle-market private equity firm (the "SES Business Transaction"). On December 31, 2012, the Company sold SEACOR Energy Inc. ("SEI") to Par Petroleum Corporation. On January 31, 2013, the Company completed the spin-off ("Spin-off") of Era Group Inc. (“Era Group”)by means of a dividend to SEACOR's shareholders of all the issued and outstanding common stock of Era Group.

Basis of Consolidation. The consolidated financial statements include the accounts of SEACOR and its controlled subsidiaries. Control is generally deemed to exist if the Company has greater than 50% of the voting rights of a subsidiary. All significant intercompany accounts and transactions are eliminated in consolidation.

Noncontrolling interests in consolidated subsidiaries are included in the consolidated balance sheets as a separate component of equity. The Company reports consolidated net income inclusive of both the Company’s and the noncontrolling interests’ share, as well as the amounts of consolidated net income attributable to each of the Company and the noncontrolling interests. If a subsidiary is deconsolidated upon a change in control, any retained noncontrolled equity investment in the former controlled subsidiary is measured at fair value and a gain or loss is recognized in net income based on such fair value. If a subsidiary is consolidated upon a change in control, any previous noncontrolled equity investment in the subsidiary is measured at fair value and a gain or loss is recognized based on such fair value.

The Company employs the equity method of accounting for investments in 50% or less owned companies that it does not control but has the ability to exercise significant influence over the operating and financial policies of the business venture. Significant influence is generally deemed to exist if the Company has between 20% and 50% of the voting rights of a business venture. In certain circumstances, the Company may have an economic interest in excess of 50% but may not control and consolidate the business venture. Conversely, the Company may have an economic interest less than 50% but may control and consolidate the business venture. The Company reports its investments in and advances to these business ventures in the accompanying consolidated balance sheets as investments, at equity, and advances to 50% or less owned companies. The Company reports its share of earnings or losses from investments in 50% or less owned companies in the accompanying consolidated statements of income as equity in earnings (losses) of 50% or less owned companies, net of tax.

The Company employs the cost method of accounting for investments in 50% or less owned companies it does not control or exercise significant influence. These investments in private companies are carried at cost and are adjusted only for capital distributions and other-than-temporary declines in fair value.

Use of Estimates. The preparation of financial statements in conformity with accounting principles generally accepted in the United States requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities and disclosure of contingent assets and liabilities at the date of the financial statements and the reported amounts of revenues and expenses during the reporting period. Such estimates include those related to deferred revenues, allowance for doubtful accounts, useful lives of property and equipment, impairments, income tax provisions and certain accrued liabilities. Actual results could differ from those estimates and those differences may be material.

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 this criteria is deferred until the criteria are met. Deferred revenues for the years ended December 31 were as follows (in thousands):



	2013		2012			2011
Balance at beginning of year	$	6,592	$	9,845		$	20,829
Revenues deferred during the year	—		3,806			7,402
Revenues recognized during the year	—		(7,059		)	(18,386		)
Balance at end of year	$	6,592	$	6,592		$	9,845

As of December 31, 2013 , deferred revenues included $6.6 million relating to the time charter of several offshore support vessels scheduled to be paid through the conveyance of an overriding royalty interest (the "Conveyance") in developmental oil and gas producing properties operated by a customer in the U.S. Gulf of Mexico. Payments under the Conveyance, and the timing of such payments, were contingent upon production and energy sale prices. On August 17, 2012, the customer filed a voluntary petition for Chapter 11 bankruptcy. The Company is vigorously defending its interest in connection with the bankruptcy filing; however, payments received under the Conveyance subsequent to August 17, 2012 are subject to bankruptcy court approval. The Company will recognize revenues as approved by the bankruptcy court. All costs and expenses related to these charters were recognized as incurred.

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The Company’s Offshore Marine Services segment earns and recognizes revenues primarily from the time charter and bareboat charter of vessels to customers based upon daily rates of hire. Under a time charter, Offshore Marine Services provides a vessel to a customer and is responsible for all operating expenses, typically excluding fuel. Under a bareboat charter, Offshore Marine Services provides the vessel to the customer and the customer assumes responsibility for all operating expenses and risk of operation. Vessel charters may range from several days to several years. Revenues from time charters and bareboat charters are recorded and recognized as services are provided. In the U.S. Gulf of Mexico, time charter durations and rates are typically established in the context of master service agreements that govern the terms and conditions of charter.

ICP earns revenues from the sale of alcohol, co-products and by-products. Revenues and related costs from these sales are recorded when title transfers to the buyer.

Cash Equivalents. The Company considers all highly liquid investments with an original maturity of three months or less when purchased to be cash equivalents. Cash equivalents consist of U.S treasury securities, money market instruments, time deposits and overnight investments.

Restricted Cash. Restricted cash, primarily relates to income generated from the operations of certain of Shipping Services’ U.S.-flag product tankers and consists primarily of U.S. treasury securities (see Note 9).

Marketable Securities. Marketable equity securities with readily determinable fair values and debt securities are reported in the accompanying consolidated balance sheets as marketable securities. These investments are stated at fair value with both realized and unrealized gains and losses reported in the accompanying consolidated statements of income as marketable security gains (losses), net. Short sales of marketable securities are stated at fair value in the accompanying consolidated balance sheets with both realized and unrealized gains and losses reported in the accompanying consolidated statements of income as marketable security gains (losses), net.

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Concentrations of Credit Risk. The Company is exposed to concentrations of credit risk associated with its cash and cash equivalents, restricted cash, marketable securities and derivative instruments. The Company minimizes its credit risk relating to these positions by monitoring the financial condition of the financial institutions and counterparties involved and by primarily conducting business with large, well-established financial institutions and diversifying its counterparties. The Company does not currently anticipate nonperformance of its significant counterparties. The Company is also exposed to concentrations of credit risk relating to its receivables due from customers in the industries described above. The Company does not generally require collateral or other security to support its outstanding receivables. The Company minimizes its credit risk relating to receivables by performing ongoing credit evaluations and, to date, credit losses have not been material.

As of December 31, 2013 , the estimated useful life (in years) of each of the Company’s major classes of new equipment was as follows:



Offshore support vessels (excluding wind farm utility)	20
Wind farm utility vessels	10
Inland river dry cargo and deck barges	20
Inland river liquid tank barges	25
Inland river towboats	25
U.S.-flag product tankers	25
RORO ⁽¹⁾ vessels	20
Harbor tugs	25
Ocean liquid tank barges	25
Terminal and manufacturing facilities	20

______________________


(1)	Roll on/Roll off ("RORO").

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The Company’s major classes of property and equipment as of December 31 were as follows (in thousands):



	Historical Cost ⁽¹⁾		Accumulated Depreciation			Net Book Value
2013
Offshore support vessels (excluding wind farm utility)	$	1,047,119	$	(438,528	)	$	608,591
Wind farm utility vessels	65,094		(14,121		)	50,973
Inland river dry cargo and deck barges	241,210		(80,772		)	160,438
Inland river liquid tank barges	85,639		(18,138		)	67,501
Inland river towboats	61,407		(22,454		)	38,953
U.S.-flag product tankers	318,497		(173,278		)	145,219
RORO vessels	18,328		(3,995		)	14,333
Harbor tugs	101,762		(34,017		)	67,745
Ocean liquid tank barges	39,238		(7,335		)	31,903
Terminal and manufacturing facilities	120,601		(33,594		)	87,007
Other ⁽²⁾	100,288		(40,098		)	60,190
	$	2,199,183	$	(866,330	)	$	1,332,853
2012
Offshore support vessels (excluding wind farm utility)	$	1,074,170	$	(398,050	)	$	676,120
Wind farm utility vessels	58,484		(6,887		)	51,597
Inland river dry cargo and deck barges	239,896		(70,407		)	169,489
Inland river liquid tank barges	106,541		(18,605		)	87,936
Inland river towboats	53,895		(20,054		)	33,841
U.S.-flag product tankers	317,894		(154,288		)	163,606
RORO vessels	15,674		(2,492		)	13,182
Harbor tugs	114,974		(32,965		)	82,009
Ocean liquid tank barges	39,073		(5,914		)	33,159
Terminal and manufacturing facilities	120,164		(20,906		)	99,258
Other ⁽²⁾	97,618		(33,235		)	64,383
	$	2,238,383	$	(763,803	)	$	1,474,580

______________________


(1)	Includes property and equipment acquired in business acquisitions and recorded at fair value as of the date of the acquisition.


(2)	Includes land and buildings, leasehold improvements, fixed-wing aircraft, vehicles and other property and equipment.

Depreciation expense totaled $130.2 million , $126.1 million and $102.1 million in 2013 , 2012 and 2011 , respectively.

Certain interest costs incurred during the construction of equipment are capitalized as part of the assets’ carrying values and are amortized over such assets’ estimated useful lives. Capitalized interest totaled $6.4 million , $4.3 million and $5.8 million in 2013 , 2012 and 2011 , respectively.

Intangible Assets. The Company’s intangible assets primarily arose from business acquisitions (see Note 4) and consist of non-compete agreements, trademarks and tradenames, customer relationships, software and technology, and acquired contractual rights. These intangible assets are amortized over their estimated useful lives ranging from two to ten years. During the years ended December 31, 2013 , 2012 , and 2011 , the Company recognized amortization expense of $4.3 million , $5.6 million and $4.8 million , respectively.

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The Company’s intangible assets by type were as follows (in thousands):



	Non-Compete Agreements			Trademark/ Tradenames			Customer Relationships			Software/ Technology			Acquired Contractual Rights			Total
	Gross Carrying Value
Year Ended December 31, 2011	$	901		$	9,136		$	36,350		$	590		$	5,787		$	52,764
Acquired intangible assets	—			—			1,621			—			2,436			4,057
Foreign currency translation	—			—			—			—			152			152
Fully amortized intangible assets	(561		)	—			—			—			—			(561		)
ORM Transaction (see Note 5)	(300		)	(712		)	(11,384		)	(590		)	—			(12,986		)
Year Ended December 31, 2012	40			8,424			26,587			—			8,375			43,426
Acquired intangible assets	—			74			1,525			—			—			1,599
Foreign currency translation	—			—			—			—			(132		)	(132		)
Fully amortized intangible assets	—			(437		)	—						(4,772		)	(5,209		)
Year Ended December 31, 2013	$	40		$	8,061		$	28,112		$	—		$	3,471		$	39,684

	Accumulated Amortization
Year Ended December 31, 2011	$	(719	)	$	(3,722	)	$	(22,476	)	$	(246	)	$	(4,073	)	$	(31,236	)
Amortization expense	(135		)	(611		)	(3,739		)	(118		)	(1,026		)	(5,629		)
Fully amortized intangible assets	561			—			—			—			—			561
ORM Transaction (see Note 5)	268			350			7,201			364			—			8,183
Year Ended December 31, 2012	(25		)	(3,983		)	(19,014		)	—			(5,099		)	(28,121		)
Amortization expense	(8		)	(984		)	(2,454		)	—			(903		)	(4,349		)
Fully amortized intangible assets	—			437			—			—			4,772			5,209
Year Ended December 31, 2013	$	(33	)	$	(4,530	)	$	(21,468	)	$	—		$	(1,230	)	$	(27,261	)
Weighted average remaining contractual life, in years	0.92			6.42			4.79			0.00			4.10			5.13

Future amortization expense of intangible assets for each of the years ended December 31 is as follows (in thousands):



2014	$	3,579
2015	2,410
2016	1,385
2017	1,251
2018	989
Years subsequent to 2018	2,809
	$	12,423

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Deferred Financing Costs. Deferred financing costs incurred in connection with the issuance of debt are amortized over the life of the related debt using the effective interest rate method for term loans and straight line method for revolving credit facilities. Amortization of deferred financing costs totaled $1.9 million , $0.5 million and $0.5 million for the years ended December 31, 2013 , 2012 and 2011 , respectively, and is included in interest expense in the accompanying consolidated statements of income.

Self-insurance Liabilities. The Company maintains hull, liability and war risk, general liability, workers compensation and other insurance customary in the industries in which it operates. Most of the insurance is obtained through SEACOR sponsored programs, with premiums charged to participating businesses based on insured asset values. Both the marine hull and liability policies have significant annual aggregate deductibles. Marine hull annual aggregate deductibles are accrued as claims are incurred by participating businesses and proportionately shared among the participating businesses. Marine liability annual aggregate deductibles are accrued based on historical loss experience and actual claims incurred. The Company also maintains self-insured health benefit plans for its participating employees. Exposure to the health benefit plans are limited by maintaining stop-loss and aggregate liability coverage. To the extent that estimated self-insurance losses, including the accrual of annual aggregate deductibles, differ from actual losses realized, the Company’s insurance reserves could differ significantly and may result in either higher or lower insurance expense in future periods.

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Deferred Gains – Equipment Sale-Leaseback Transactions and Financed Equipment Sales. From time to time, the Company enters into equipment sale-leaseback transactions with finance companies or provides seller financing on sales of its equipment to third parties or 50% or less owned companies. A portion of the gains realized from these transactions is not immediately recognized in income and has been recorded in the accompanying consolidated balance sheets in deferred gains and other liabilities. In sale-leaseback transactions (see Note 4), gains are deferred to the extent of the present value of future minimum lease payments and are amortized as reductions to rental expense over the applicable lease terms. In financed equipment sales (see Note 4), gains are deferred to the extent that the repayment of purchase notes is dependent on the future operations of the sold equipment and are amortized based on cash received from the buyers. Deferred gain activity related to these transactions for the years ended December 31 was as follows (in thousands):



	2013			2012			2011
Balance at beginning of year	$	96,447		$	101,155		$	113,871
Deferred gains arising from equipment sales	26,881			23,183			12,319
Amortization of deferred gains included in operating expenses as reduction to rental expense	(10,687		)	(16,652		)	(22,191		)
Amortization of deferred gains included in gains on asset dispositions and impairments, net	(2,099		)	(11,239		)	(2,834		)
Reductions of deferred gains on repurchased equipment and other	—			—			(10		)
Balance at end of year	$	110,542		$	96,447		$	101,155

Deferred Gains – Equipment Sales to the Company’s 50% or Less Owned Companies. A portion of the gains realized from non-financed sales of the Company’s vessels and barges to its 50% or less owned companies is not immediately recognized in income and has been recorded in the accompanying consolidated balance sheets in deferred gains and other liabilities. Effective January 1, 2009, the Company adopted new accounting rules related to the sale of its equipment to its 50% or less owned companies. For transactions occurring subsequent to the adoption of the new accounting rules, gains are deferred only to the extent of the Company's uncalled capital commitments and amortized as those commitments lapse or funded amounts are returned by the 50% or less owned companies. For transactions occurring prior to the adoption of the new accounting rules, gains were deferred and are being amortized based on the Company's ownership interest, the Company's uncalled capital commitments, cash received and the applicable equipment's useful lives. Deferred gain activity related to these transactions for the years ended December 31 was as follows (in thousands):



	2013			2012			2011
Balance at beginning of year	$	15,066		$	16,036		$	16,881
Amortization of deferred gains included in gains on asset dispositions and impairments, net	(845		)	(970		)	(845		)
Balance at end of year	$	14,221		$	15,066		$	16,036

Stock Based Compensation. Stock based compensation is amortized to compensation expense on a straight line basis over the requisite service period of the grants using the Black-Scholes valuation model. The Company will reconsider its use of this model if additional information becomes available in the future that indicates another model would be more appropriate or if grants issued in future periods have characteristics that cannot be reasonably estimated using this model. The Company does not estimate forfeitures in its expense calculations as forfeiture history has been minor. The Company presents the excess tax benefits from the exercise of stock options as a financing cash flow in the accompanying consolidated statements of cash flows.

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Accumulated Other Comprehensive Income (Loss). The components of accumulated other comprehensive income (loss) were as follows:



	SEACOR Holdings Inc. Stockholders Equity												Noncontrolling Interests
	Foreign Currency Translation Adjustments			Derivative Losses on Cash Flow Hedges, net			Other			Total			Foreign Currency Translation Adjustments			Other			Other Comprehensive Income (Loss)
Year ended December 31, 2010	$	(3,995	)	$	(2,933	)	$	(111	)	$	(7,039	)	$	—		$	—
Other comprehensive income (loss)	(629		)	(900		)	116			(1,413		)	(118		)	—			$	(1,531	)
Income tax (expense) benefit	220			315			(41		)	494			—			—			494
Year ended December 31, 2011	(4,404		)	(3,518		)	(36		)	(7,958		)	(118		)	—			$	(1,037	)
Other comprehensive income (loss)	4,871			4,286			31			9,188			439			(10		)	$	9,617
Income tax (expense) benefit	(1,705		)	(1,500		)	(11		)	(3,216		)	—			—			(3,216		)
Year ended December 31, 2012	(1,238		)	(732		)	(16		)	(1,986		)	321			(10		)	$	6,401
Distribution of Era Group stock to shareholders	(55		)	—			—			(55		)	—			—
Other comprehensive income (loss)	563			731			12			1,306			74			5			$	1,385
Income tax (expense) benefit	(197		)	(256		)	(4		)	(457		)	—			—			(457		)
Year ended December 31, 2013	$	(927	)	$	(257	)	$	(8	)	$	(1,192	)	$	395		$	(5	)	$	928

Foreign Currency Translation. The assets, liabilities and results of operations of certain SEACOR subsidiaries are measured using their functional currency which is the currency of the primary foreign economic environment in which they operate. Upon consolidating these subsidiaries with SEACOR, their assets and liabilities are translated to U.S. dollars at currency exchange rates as of the balance sheet dates and their revenues and expenses are translated at the weighted average currency exchange rates during the applicable reporting periods. Translation adjustments resulting from the process of translating these subsidiaries’ financial statements are reported in other comprehensive income (loss) in the accompanying consolidated statements of comprehensive income.

Foreign Currency Transactions. Certain SEACOR subsidiaries enter into transactions denominated in currencies other than their functional currency. Gains and losses resulting from changes in currency exchange rates between the functional currency and the currency in which a transaction is denominated are included in foreign currency gains (losses), net in the accompanying consolidated statements of income in the period in which the currency exchange rates change.

Earnings Per Share. Basic earnings per common share of SEACOR are computed based on the weighted average number of common shares issued and outstanding during the relevant periods. Diluted earnings per common share of SEACOR are computed based on the weighted average number of common shares issued and outstanding plus the effect of potentially dilutive securities through the application of the treasury stock and if-converted methods. Dilutive securities for this purpose assumes restricted stock grants have vested, common shares have been issued pursuant to the exercise of outstanding stock options and common shares have been issued pursuant to the conversion of all outstanding convertible notes.

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Computations of basic and diluted earnings per common share of SEACOR for the years ended December 31 were as follows (in thousands, except share data):



	Net Income		Average o/s Shares	Per Share
2013
Basic Weighted Average Common Shares Outstanding	$	36,970	19,893,954	$	1.86
Effect of Dilutive Securities:
Options and Restricted Stock ⁽¹⁾	—		399,333
Convertible Securities ⁽²⁾⁽³⁾	—		—
Diluted Weighted Average Common Shares Outstanding	$	36,970	20,293,287	$	1.82
2012
Basic Weighted Average Common Shares Outstanding	$	61,215	20,426,770	$	3.00
Effect of Dilutive Securities:
Options and Restricted Stock ⁽¹⁾	—		349,126
Convertible Securities ⁽²⁾	—		—
Diluted Weighted Average Common Shares Outstanding	$	61,215	20,775,896	$	2.95
2011
Basic Weighted Average Common Shares Outstanding	$	41,056	21,119,461	$	1.94
Effect of Dilutive Securities:
Options and Restricted Stock ⁽¹⁾	—		347,382
Diluted Weighted Average Common Shares Outstanding	$	41,056	21,466,843	$	1.91

______________________


(1)	For the years ended December 31, 2013 , 2012 and 2011 , diluted earnings per common share of SEACOR excluded 133,315 , 549,223 and 338,920 , respectively, of certain share awards as the effect of their inclusion in the computation would be anti-dilutive.


(2)	For the years ended December 31, 2013 and 2012 , diluted earnings per common share of SEACOR excluded 4,200,525 and 176,609 shares, respectively, issuable pursuant to the Company's 2.5% Convertible Senior Notes (see Note 9) as the effect of their inclusion in the computation would be anti-dilutive.


(3)	For the year ended December 31, 2013 , diluted earnings per common share of SEACOR excluded 240,043 shares issuable pursuant to the Company's 3.0% Convertible Senior Notes (see Note 9) as the effect of their inclusion in the computation would be anti-dilutive.

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.

Restatement of Prior Period Interim Financial Results. In February 2014, the Company discovered an error in its accounting for taxes related to the Era Group Spin-Off, which occurred on January 31, 2013. As a result, the Company will restate the condensed consolidated financial statements included in its Quarterly Reports on Form 10-Q for the fiscal quarters ended March 31, June 30 and September 30, 2013, together with an explanation of the restatements, as soon as reasonably practicable (see Note 18).



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 in Level 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.

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The Company’s financial assets and liabilities as of December 31 that are measured at fair value on a recurring basis were as follows (in thousands):



	Level 1		Level 2		Level 3
2013
ASSETS
Marketable securities ⁽¹⁾	$	24,292	$	—	$	—
Derivative instruments (included in other receivables)	185		6,072		—
Construction reserve funds and Title XI reserve funds	261,739		—		—
LIABILITIES
Short sales of marketable securities	10,697		—		—
Derivative instruments (included in other current liabilities)	1,511		1,828		—
2012
ASSETS
Marketable securities ⁽¹⁾	$	21,688	$	—	$	—
Derivative instruments (included in other receivables)	2,840		4,696		—
Construction reserve funds and Title XI reserve funds	195,629		—		—
LIABILITIES
Short sales of marketable securities	8,277		—		—
Derivative instruments (included in other current liabilities)	840		6,140		—

______________________

(1)

Marketable security gains (losses), net include gains of $5.8 million and losses of $0.7 million and $7.5 million for the years ended December 31, 2013 , 2012 and 2011 , respectively, related to marketable security positions held by the Company as of December 31, 2013 . Marketable security gains (losses), net include losses of $0.9 million and $7.7 million for the years ended December 31, 2012 and 2011 , respectively, related to marketable security positions held by the Company as of December 31, 2012 . During the years ended December 31, 2013 , 2012 and 2011 , the Company recorded net dividend expense on marketable securities of $0.2 million , $0.5 million and $0.8 million , respectively. During the year ended December 31, 2013 , net interest income on marketable securities was not material. During the years ended December 31, 2012 and 2011 , the Company recorded net interest income on marketable securities of $0.2 million and $2.8 million , respectively.

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The estimated fair value of the Company’s other financial assets and liabilities as of December 31 were as follows (in thousands).



			Estimated Fair Value
	Carrying Amount		Level 1		Level 2		Level 3
2013
ASSETS
Cash, cash equivalents and restricted cash	$	539,610	$	539,610	$	—	$	—
Investments, at cost, in 50% or less owned companies (included in other assets)	9,315		see below
Notes receivable from third parties (included in other receivables and other assets)	13,544		see below
LIABILITIES
Long-term debt, including current portion ⁽¹⁾	879,441		—		1,094,193		—
2012
ASSETS
Cash, cash equivalents and restricted cash	276,489		276,489		—		—
Investments, at cost, in 50% or less owned companies (included in other assets)	9,315		see below
Notes receivable from third parties (included in other receivables and other assets)	26,063		see below
LIABILITIES
Long-term debt, including current portion ⁽²⁾	677,229		—		747,973		—

______________________


(1)	The estimated fair value includes the conversion option on the Company's 2.5% and 3.0% Convertible Notes.


(2)	The estimated fair value includes the conversion option on the Company's 2.5% Convertible Notes.

The carrying value of cash, cash equivalents and restricted cash approximates fair value. The fair value of the Company’s long-term debt was estimated based upon quoted market prices or by using discounted cash flow analyses based on estimated current rates for similar types of arrangements. It was not practicable to estimate the fair value of the Company’s investments, at cost, in 50% or less owned companies because of the lack of quoted market prices and the inability to estimate fair value without incurring excessive costs. It was not practicable to estimate the fair value of the Company’s notes receivable from third parties as the overall returns are uncertain due to certain provisions for additional payments contingent upon future events. 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.

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The Company’s non-financial assets and liabilities that were measured at fair value during the years ended December 31 were as follows (in thousands):



	Level 1		Level 2		Level 3
2013
ASSETS
Long-lived assets under construction ⁽¹⁾	$	17,494	$	—	$	—
Investment in C-Lift LLC ⁽²⁾	—		13,290		—
Contribution of non-cash consideration to Dorian LPG Ltd. ⁽³⁾	—		14,989		—
Investment in Zhuhai SEACOR/Avion Logistics Company Limited (included in Investments, at Equity, and Advances to 50% or Less Owned Companies) ⁽⁴⁾	—		924		—
2012
ASSETS
Investment in ICP ⁽⁵⁾	$	—	$	30,916	$	—
Long-lived assets held for sale ⁽⁶⁾	—		8,400		—
Investment in Witt O'Brien's (included in Investments, at Equity, and Advances to 50% or Less Owned Companies) ⁽⁷⁾	—		50,261		—

______________________


(1)	During the year ended December 31, 2013, the Company recognized impairment charges of $3.0 million related to two of Shipping Services' harbor tugs while under construction, which were sold and leased back upon their completion (see Note 4).


(2)	During the year ended December 31, 2013, the Company marked its equity investment in C-Lift LLC ("C-Lift") to fair value following its acquisition of a controlling interest (see Note 4). The investment's fair value was determined based on the Company's purchase price of the acquired interest.


(3)	During the year ended December 31, 2013, the Company marked to fair value the non-cash consideration contributed to Dorian LPG Ltd. ("Dorian") in exchange for an equity investment (see Note 5). The fair value was determined based on the value of the equity investment the Company received.

(4)

During the year ended December 31, 2013, the Company marked its equity investment in Zhuhai SEACOR/Avion Logistics Company Limited, an Asian industrial aviation company, to fair value upon the deconsolidation of the previously controlled subsidiary following the sale of a portion of the Company's ownership to a third party. The investment's fair value was determined based on the purchase price of the Company's interest sold.


(5)	On February 1, 2012, the Company marked its equity investment in its ICP to fair value following the acquisition of a controlling interest (see Note 5). The investment's fair value was determined based on a fair value analysis of the assets and liabilities of ICP.


(6)	During the year ended December 31, 2012, the Company recorded an impairment loss of $1.2 million to reduce the carrying value of one of its fixed-wing aircraft used in its lending and leasing activities following the conclusion of a lease.


(7)	On December 31, 2012, the Company marked its equity investment in Witt O'Brien's LLC, a response management company, to fair value following the ORM Transaction (see Note 5). The investment's fair value was determined based the Company's interest in the fair value of the assets and liabilities of Witt O'Brien's.



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 consolidated balance sheets. The fair values of the Company’s derivative instruments as of December 31 were as follows (in thousands):



	2013				2012
	Derivative Asset		Derivative Liability		Derivative Asset		Derivative Liability
Derivatives not designated as hedging instruments:
Options on equities and equity indices	$	224	$	7	$	351	$	1
Forward currency exchange, option and future contracts	349		213		11		160
Interest rate swap agreements	—		1,615		—		5,884
Commodity swap, option and future contracts:
Exchange traded	185		1,504		2,826		736
Non-exchange traded	5,499		—		4,348		199
	$	6,257	$	3,339	$	7,536	$	6,980

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Cash Flow Hedges. As of December 31, 2013 and December 31, 2012 , there were no interest rate swap agreements designated as cash flow hedges. As of December 31, 2013 , 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 this company to pay a fixed interest rate of 1.48% on the amortized notional value of $16.8 million and receive a variable interest rate based on LIBOR on the amortized notional value. As of December 31, 2013 , one of the Company’s Inland River Services 50% or less owned companies had three interest rate swap agreements with maturities ranging from 2014 to 2015 that have been designated as cash flow hedges. These instruments call for this company to pay fixed rates of interest ranging from 1.53% to 4.16% on the aggregate amortized notional value of $28.6 million and receive a variable interest rate based on LIBOR on the aggregate amortized notional value. Additionally, as of December 31, 2013 , one of the Company's Shipping Services 50% or less owned companies had an interest rate swap agreement maturing in 2017 that has been designated as a cash flow hedge. This instrument calls for this company to pay a fixed interest rate of 2.79% on the amortized notional value of $37.3 million and receive a variable interest rate based on LIBOR on the amortized notional value. By entering into these interest rate swap agreements, the Company's 50% or less owned companies 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 years December 31 as follows (in thousands):



	Other comprehensive income (loss)
	2013		2012			2011
Interest rate swap agreements, effective portion	$	109	$	(1,710	)	$	(4,532	)
Reclassification of derivative losses to interest expense or equity in earnings (losses) of 50% or less owned companies	622		2,724			3,632
Reclassification of net derivative losses on cash flow hedges to derivative losses, net upon dedesignation	—		3,272			—
	$	731	$	4,286		$	(900	)



	Derivative gains (losses), net
	2013		2012			2011
Interest rate swap agreements, ineffective portion	$	—	$	(58	)	$	(46	)

Other Derivative Instruments. The Company recognized gains (losses) on derivative instruments not designated as hedging instruments for the years ended December 31 as follows (in thousands):



	Derivative gains (losses), net
	2013			2012			2011
Options on equities and equity indices	$	(5,270	)	$	(680	)	$	1,693
Forward currency exchange, option and future contracts	(451		)	837			(621		)
Interest rate swap agreements	(37		)	(3,778		)	(1,103		)
Commodity swap, option and future contracts:
Exchange traded	(3,915		)	(1,020		)	(2,008		)
Non-exchange traded	1,350			1,887			331
U.S. treasury notes, rate locks and bond future and option contracts	—			—			(28,301		)
	$	(8,323	)	$	(2,754	)	$	(30,009	)

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.

The Company enters and settles forward currency exchange, option and future contracts with respect to various foreign currencies. As of December 31, 2013 , the outstanding forward currency exchange contracts translated into a net purchase of foreign currencies with an aggregate U.S. dollar equivalent of $25.9 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.

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The Company has entered into various interest rate swap agreements with maturities ranging from 2014 through 2018 that call for the Company to pay fixed interest rates ranging from 2.25% to 3.05% on aggregate amortized notional values of $88.2 million and receive a variable interest rate based on LIBOR or Euribor on these notional values. As of December 31, 2013 , one of the Company’s Offshore Marine Services 50% or less owned companies had an interest rate swap agreement maturing in 2018 that calls for this company to pay a fixed interest rate of 1.30% on the amortized notional value of $103.1 million and receive a variable interest rate based on LIBOR on the amortized notional value. As of December 31, 2013 , one of the Company’s Shipping Services 50% or less owned companies had entered into six interest rate swap agreements with maturities ranging from 2018 to 2020 that call for this company to pay fixed rates of interest ranging from 2.96% to 5.40% on the aggregate amortized notional value of $130.7 million and receive a variable interest rate based on LIBOR on the aggregate amortized 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 and its 50% or less owned companies.

The Company enters and settles positions in various exchange and non-exchange traded commodity swap, option and future contracts. ICP enters into exchange traded positions (primarily corn) to protect its raw material and finished goods inventory balances from market changes. In the Company’s agricultural business, fixed price future purchase and sale contracts for 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 December 31, 2013 , the net market exposure to corn and sugar under these contracts was not material. The Company also enters into exchange traded positions (primarily natural gas, heating oil, crude oil, gasoline, corn 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 Services, Inland River Services and Shipping Services businesses. As of December 31, 2013 , none of these types of positions were outstanding.

The Company enters and settles 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 December 31, 2013 , none of these types of positions were outstanding.



4.	ACQUISITIONS AND DISPOSITIONS

C-Lift Acquisition. On June 6, 2013, the Company acquired a controlling interest in C-Lift through the acquisition of its partner's 50% interest for $13.3 million in cash (see Note 5). C-Lift owns and operates two liftboats in the U.S. Gulf of Mexico. 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.

Pantagro Acquisition. On June 25, 2012, the Company acquired a 95% controlling interest in Pantagro-Pantanal Produtos Agropecuarious Ltda. ("Pantagro") for $0.4 million ( $0.2 million in cash and $0.2 million in a note payable). Pantagro is an Argentine agricultural trading company focusing primarily on salt. The Company performed a fair value analysis and the purchase price was allocated to the acquired assets and liabilities based on their fair values resulting in no goodwill being recorded. The fair value analysis was finalized in March 2013.

Superior Lift Boats Acquisition. On March 30, 2012, the Company acquired 18 lift boats, real property and working capital from Superior Energy Inc. (“Superior”) for $142.5 million . The Company performed a fair value analysis and the purchase price was allocated to the acquired assets and liabilities based on their fair values resulting in no goodwill being recorded. The fair value analysis was finalized in March 2013.

ICP Acquisition. On February 1, 2012, the Company acquired a controlling interest in ICP through its acquisition of a portion of its partner's interest for $9.1 million in cash, following which the Company owned 70% (see Note 5). ICP owns and operates an alcohol manufacturing facility dedicated to the production of alcohol for beverage, industrial and fuel applications. The Company performed a fair value analysis and the purchase price was allocated to the acquired assets and liabilities based on their fair values resulting in no goodwill being recorded. The fair value analysis of assets and liabilities acquired was finalized in June 2012.

Lewis & Clark Acquisition. On December 31, 2011, the Company acquired certain terminal and fleeting assets from Lewis & Clark Marine, Inc. and certain related affiliates (“Lewis & Clark”) for $29.6 million . The Company performed a fair value analysis and the purchase price was allocated to the acquired assets based on their fair values resulting in no goodwill being recorded. The fair value analysis of assets and liabilities was finalized in December 2012.

Windcat Acquisition. On December 22, 2011, the Company acquired 75% of the issued and outstanding shares in Windcat Workboats Holdings Ltd. (“Windcat”) for $22.1 million (including $21.5 million in cash during 2011 and 6,374 shares of SEACOR common stock, par value $0.01 per share (“Common Stock”) valued at $0.6 million for a final working capital settlement in 2012).

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Windcat, based in the United Kingdom and the Netherlands, is an operator of 29 wind farm utility vessels operating in the main offshore wind markets of Europe. The Company performed a fair value analysis and the purchase price was allocated to the acquired assets and liabilities based on their fair values resulting in no goodwill being recorded. The fair value analysis of assets and liabilities was finalized in December 2012.

Naviera Acquisition. On December 21, 2011, the Company acquired a 70% controlling interest in SEACOR Colombia Fluvial (MI) LLC for $1.9 million in cash. SEACOR Colombia Fluvial (MI) LLC's wholly-owned subsidiary, Naviera Central S.A. (“Naviera”), is a provider of inland river barge and terminal services in Colombia. 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 $1.0 million in goodwill being recorded. The fair value analysis of assets and liabilities was finalized in December 2012.

Soylutions Acquisition. On July 29, 2011, the Company acquired a controlling interest in Soylutions LLC (“Soylutions”) through the acquisition of its partner’s interest for $11.9 million in cash, following which the Company owned 100% (see Note 5). The Company performed a fair value analysis and the purchase price was allocated to the acquired assets and liabilities based on their fair values resulting in no goodwill being recorded. The fair value analysis was finalized in March 2012.

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 controlling 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.

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 year ended December 31, 2011, the Company paid $0.6 million of additional consideration. During the year ended December 31, 2011, the Company accrued additional contingent consideration of $0.1 million as general and administrative expenses in the accompanying consolidated financial statements. As of December 31, 2011, the Company had paid $0.8 million , in the aggregate, of additional consideration. PIER was a wholly-owned subsidiary of ORM and was contributed to Witt-O'Brien's as part of the ORM Transaction (see Note 5).

Purchase Price Allocation. The allocation of the purchase price for the Company’s acquisitions for the years ended December 31 was as follows (in thousands):



	2013			2012			2011
Trade and other receivables	$	3,250		$	17,356		$	2,882
Other current assets	32			16,282			1,105
Investments, at Equity, and Advances to 50% or Less Owned Companies	(13,290		)	(42,358		)	(11,920		)
Property and Equipment	43,521			178,025			137,533
Goodwill	—			(1,586		)	3,264
Intangible Assets	1,599			4,057			6,602
Other Assets	—			(332		)	3,500
Accounts payable	(264		)	(4,701		)	(3,060		)
Other current liabilities	(1,053		)	(4,093		)	(518		)
Long-Term Debt	(22,668		)	(946		)	(37,400		)
Deferred Income Taxes	—			—			(1,116		)
Other Liabilities	—			(166		)	—
Accumulated other comprehensive loss, net of tax	—			9			—
Noncontrolling interests in subsidiaries	—			(13,459		)	(10,284		)
Purchase price ⁽¹⁾	$	11,127		$	148,088		$	90,588

______________________


(1)	Purchase price is net of cash acquired (totaling $2.2 million , $3.7 million and $5.3 million in 2013 , 2012 and 2011 , respectively) and includes issued Common Stock valued at $0.6 million in 2012 .

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Equipment Additions. The Company’s capital expenditures from continuing operations were $195.9 million , $239.4 million and $165.3 million in 2013 , 2012 and 2011 , respectively. Major equipment placed in service for the years ended December 31 were as follows (unaudited):



	2013 ⁽¹⁾	2012 ⁽²⁾	2011 ⁽³⁾
Offshore Support Vessels:
Anchor handling towing supply	—	2	—
Crew	—	—	2
Mini-Supply	—	—	1
Supply	1	2	—
Specialty	2	1	—
Wind farm utility	5	1	—
	8	6	3
Inland River dry cargo and deck barges	—	3	55
Inland River liquid tank barges	2	5	2
Inland River towboats	1	2	—
RORO vessels	1	—	—
Harbor Tugs:
Azimuth drive	4	—	1

______________________


(1)	Excludes two liftboats acquired in the C-Lift acquisition.


(2)	Excludes 18 liftboats acquired in the Superior Liftboat acquisition and excludes an interest in one U.S.-flagged articulated tug barge acquired and immediately contributed to SeaJon (see Note 5).


(3)	Excludes eight foreign-flag RORO vessels acquired in the G&G Shipping Acquisition and 28 wind farm utility vessels acquired in the Windcat Acquisition.

Equipment Dispositions. During the year ended December 31, 2013 , the Company sold property and equipment for net proceeds of $274.3 million ( $263.9 million in cash and $10.4 million in seller financing) and gains of $64.5 million , of which $37.6 million were recognized currently and $26.9 million were deferred (see Note 1). Equipment dispositions included the sale of one liftboat, eight liquid tank barges and seven harbor tugs for $116.3 million with leaseback terms ranging from 60 months to 120 months. Gains of $26.4 million related to these sale-leasebacks were deferred and are being amortized over their respective minimum lease periods. In addition, the Company recognized previously deferred gains of $2.9 million .

During the year ended December 31, 2012 , the Company sold property and equipment for net proceeds of $167.5 million ( $114.0 million in cash, $5.0 million in cash deposits previously received and $48.5 million in seller financing) and gains of $36.2 million , of which $13.0 million were recognized currently and $23.2 million were deferred (see Note 1). Equipment dispositions included the sale of two anchor handling towing supply vessels and two harbor tugs for $84.5 million with leaseback terms ranging from 48 months to 96 months. Gains of $15.7 million related to these sale-leasebacks were deferred and are being amortized over their respective minimum lease periods. The Company also financed the sale of two offshore support vessels to certain of the Company’s 50% or less owned companies for $48.9 million , in the aggregate (see Note 5). Gains of $0.5 million from these sales were recognized currently and $7.3 million from these sales were deferred and will be recognized as payments are received under the terms of the financing. In addition, the Company recognized previously deferred gains of $12.2 million .

During the year ended December 31, 2011 , the Company sold property and equipment for net proceeds of $81.8 million ( $70.7 million in cash, $2.5 million in cash deposits previously received, $7.4 million in seller financing and $1.2 million in an investment in a 50% or less owned company) and gains of $27.5 million , of which $15.2 million were recognized currently and $12.3 million were deferred (see Note 1). Equipment dispositions included the sale of one anchor handling towing supply vessel for $36.3 million with a leaseback term of 84 months. Gains of $7.7 million related to the sale-leaseback were deferred and are being amortized over the minimum lease period. The Company also financed the sale of one offshore support vessel to certain of the Company's 50% or less owned companies for $7.6 million , in the aggregate (see Note 5). Gains of $4.6 million from this sale were deferred and will be recognized as payments are received under the terms of the financing. In addition, the Company received $5.0 million in deposits on future property and equipment sales and recognized previously deferred gains of $3.7 million .

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Major equipment dispositions for the years ended December 31 were as follows (unaudited):



	2013	2012 ⁽¹⁾	2011 ⁽²⁾
Offshore Support Vessels:
Anchor handling towing supply	—	2	1
Crew	5	2	6
Mini-supply	1	—	—
Standby Safety	—	1	1
Supply	2	2	1
Towing supply	—	—	1
Specialty	3	—	1
Liftboats	6	—	—
Wind farm utility	2	—	—
	19	7	11
Inland River dry cargo and deck barges	16	9	6
Inland River liquid tank barges	8	1	1
Inland River towboats	—	2	1
U.S.-flag product tankers	—	—	1
Foreign-flag RORO vessels	—	1	—
Harbor Tugs:
Azimuth drive	7	3	1
Conventional drive	1	2	1
	8	5	2

______________________


(1)	Excludes one U.S.-flag articulated tug-barge contributed to SeaJon (see Note 5).


(2)	Excludes four crew and one mini-supply vessel operated by Mexmar (see Note 5).

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5.	INVESTMENTS, AT EQUITY, AND ADVANCES TO 50% OR LESS OWNED COMPANIES

Investments, at equity, and advances to 50% or less owned companies as of December 31 were as follows (in thousands):



	Ownership				2013		2012
Offshore Marine Services:
MexMar	49.0%				28,564		18,162
Sea-Cat Crewzer II	50.0%				22,900		—
Dynamic Offshore Drilling	19.0%				11,622		10,483
Sea-Cat Crewzer	50.0%				7,833		7,183
Nautical Power	50.0%				6,399		11,060
OSV Partners	30.4%				3,951		—
C-Lift	50.0%				—		5,445
Other	20.0%	–	50.0%		17,891		14,472
					99,160		66,805
Inland River Services:
SCFCo Holdings	50.0%				27,710		25,351
Bunge-SCF Grain	50.0%				17,697		19,315
SCF Bunge Marine	50.0%				6,158		5,604
Other	50.0%				3,846		3,574
					55,411		53,844
Shipping Services:
Dorian	21.8%				129,785		—
Trailer Bridge	47.3%				57,881		60,224
SeaJon	50.0%				9,479		6,799
					197,145		67,023
Other:
Witt O'Brien's ⁽¹⁾	54.2%				52,289		50,261
Hawker Pacific	34.2%				21,596		23,004
Avion	39.1%				13,127		11,152
Other	34.0%	–	50.0	%	2,125		446
					89,137		84,863
					$	440,853	$	272,535

______________________


(1)	The Company's ownership represents its economic interest in the noncontrolled company.

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Combined Condensed Financials. Summarized financial information for the Company’s investments, at equity, as of and for the years ended December 31 was as follows (in thousands):



	2013		2012
Current assets	$	749,369	$	458,758
Noncurrent assets	1,387,601		726,034
Current liabilities	345,260		371,597
Noncurrent liabilities	682,348		371,550



	2013			2012		2011
Operating Revenues	$	1,087,637		$	774,912	$	691,189
Costs and Expenses:
Operating and administrative	955,583			699,061		643,612
Depreciation	61,813			40,440		29,859
	1,017,396			739,501		673,471
Loss on Asset Dispositions	(397		)	—		—
Operating Income	$	69,844		$	35,411	$	17,718
Net Income (Loss)	$	17,312		$	4,640	$	(3,252	)

As of December 31, 2013 and 2012 , cumulative undistributed net earnings of 50% or less owned companies accounted for by the equity method included in the Company’s consolidated retained earnings were $23.9 million and $24.6 million , respectively.

MexMar. On July 1, 2011, Mantenimiento Express Maritimo, S.A.P.I. de C.V. (“MexMar”), a Mexican company that operates offshore support vessels in Mexico, executed a business reorganization plan and issued an additional equity interest to an unrelated third party for $17.1 million in cash. Subsequent to the reorganization and issuance of the additional equity interest, the Company recognized an $8.4 million gain, net of tax, which is included in equity in earnings in 50% or less owned companies in the accompanying consolidated statements of income, and received $14.9 million on the net repayment of outstanding advances from MexMar. Following the reorganization, the Company has a 49.0% interest in MexMar. During the year ended December 31, 2012, MexMar purchased two offshore support vessels from the Company and financed a portion of the vessels' mobilization costs with the Company totaling $50.0 million ( $5.0 million in cash and two short-term notes totaling $45.0 million ). During the year ended December 31, 2012, MexMar repaid these notes. During the year ended December 31, 2013, the Company contributed additional capital of $5.9 million and Mexmar purchased one offshore support vessel from the Company for $36.4 million ( $30.4 million in cash and $6.0 million in seller financing). During the year ended December 31, 2013, MexMar repaid the $6.0 million of seller financing and and the Company provided an additional $1.7 million advance for the purchase of another offshore support vessel from a third party, which was also repaid. During the years ended December 31, 2013 , 2012 and 2011 , the Company received $0.3 million , $0.3 million and $0.1 million , respectively, of vessel management fees from MexMar.

Sea-Cat Crewzer II. On January 23, 2013, the Company and another offshore support vessel operator formed Sea-Cat Crewzer II LLC (“Sea-Cat Crewzer II”) to own and operate two high speed offshore catamaran crew boats. The Company and its partner each contributed capital of $23.9 million in cash. Sea-Cat Crewzer II then purchased two high speed offshore catamaran crew boats from the Company for $47.3 million ( $44.5 million in cash and $2.8 million in seller financing). During the year ended December 31, 2013 , Sea-Cat Crewzer II repaid the seller financing and the Company received $0.2 million of vessel management fees from Sea-Cat Crewzer II.

Dynamic Offshore Drilling. On April 4, 2011, the Company acquired a 19.0% 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 was delivered in the first quarter of 2013.

Sea-Cat Crewzer. Sea-Cat Crewzer LLC (“Sea-Cat Crewzer”) owns and operates two high speed offshore catamaran crew boats. The Company is a guarantor of its proportionate share of Sea-Cat Crewzer’s debt and the amount of the guarantee declines as principal payments are made and will terminate when the debt is repaid. As of December 31, 2013 , the Company’s guarantee was $8.4 million . During the year ended December 31, 2013 , the Company received dividends of $1.3 million from Sea-Cat Crewzer. During the years ended December 31, 2013 , 2012 and 2011 , the Company received $0.8 million , $0.8 million and $0.8 million , respectively, of vessel management fees from Sea-Cat Crewzer. During the years ended December 31, 2013 , 2012 and 2011 , the Company paid $4.8 million , $2.2 million and $2.2 million , respectively, to Sea-Cat Crewzer to bareboat one of its vessels.

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Nautical Power. The Company and another offshore operator formed Nautical Power, LLC (“Nautical Power”) to operate one offshore support vessel. Nautical Power bareboat chartered the vessel from a leasing company and that charter terminated in 2013. During the year ended December 31, 2013 , the Company received dividends of $5.3 million from Nautical Power.

OSV Partners. On August 13, 2013, the Company and Breem Transportation Services LLC formed SEACOR OSV Partners GP LLC and SEACOR OSV Partners I LP (collectively "OSV Partners") to own and operate six offshore support vessels, two of which were acquired during the year ended December 31, 2013 . During the year ended December 31, 2013 , OSV Partners closed on a private placement equity offering with third party limited partner members, including the Company, and secured a bank financing arrangement. During the year ended December 31, 2013 , the Company contributed $4.1 million in capital in exchange for a 30.4% ownership interest in OSV Partners In addition, the Company provided and was repaid bridge financing of $7.6 million . During the year ended December 31, 2013, the Company sold one offshore support vessel for $14.5 million to OSV Partners. During the year ended December 31, 2013 , the Company received $0.2 million of vessel management fees from OSV Partners.

C-Lift. C-Lift was established to construct and operate liftboats. On June 6, 2013, the Company acquired a controlling interest in C-Lift through the acquisition of its partner's 50% interest for $13.3 million in cash (see Note 4). Upon the acquisition, the Company adjusted its investment in C-Lift to fair value resulting in the recognition of a gain of $4.2 million , net of tax, which is included in equity in earnings (losses) of 50% or less owned companies in the accompanying consolidated statements of income.

Other. The Company’s other Offshore Marine Services 50% or less owned companies operate ten vessels, nine owned and one bareboat chartered-in. During the year ended December 31, 2013 , the Company received dividends of $0.9 million and made additional capital contributions and advances of $2.1 million to these 50% or less owned companies. During the years ended December 31, 2012 and 2011, the Company made no additional capital contributions to these 50% or less owned companies. Certain of these 50% or less owned companies obtained bank debt to finance the acquisition of offshore support vessels from the Company. Under the terms of the debt, the bank has the authority to require the parties of these 50% or less owned companies to fund uncalled capital commitments, as defined in the 50% or less owned companies’ partnership agreements, under certain circumstances. In such event, the Company would be required to contribute its allocable share of uncalled capital, which was $2.4 million , in the aggregate, as of December 31, 2013 . During the year ended December 31, 2013, the Company sold two offshore support vessels to one of its 50% or less owned companies for $5.4 million . During the year ended December 31, 2011, the Company sold one offshore marine vessel to one of its 50% or less owned companies for $7.6 million . The Company manages certain vessels on behalf of the 50% or less owned companies and guarantees the outstanding charter receivables of one of the 50% or less owned companies if a customer defaults in payment and the Company either fails to take enforcement action against the defaulting customer or fails to assign its right of recovery against the defaulting customer. As of December 31, 2013 , the Company’s contingent guarantee of outstanding charter receivables was $1.1 million . During the years ended December 31, 2013 , 2012 and 2011 , the Company received $0.6 million , $0.6 million and $0.6 million , respectively, of vessel management fees from these 50% or less owned companies.

SCFCo Holdings. SCFCo Holdings LLC (“SCFCo”) was established to operate towboats and dry cargo barges on the Parana-Paraguay Rivers and a terminal facility at Port Ibicuy, Argentina. During the years ended December 31, 2013 , 2012 and 2011 , the Company contributed additional capital in SCFCo of $6.1 million , $3.0 million and $0.8 million , respectively. Additionally, during the year ended December 31, 2013 , the Company provided working capital advances of $3.1 million and received repayments on working capital advances of $1.8 million . As of December 31, 2013 , $1.3 million of working capital advances remained outstanding.

Bunge-SCF Grain. Bunge-SCF Grain LLC (“Bunge-SCF”) operates a terminal grain elevator in Fairmont City, Illinois. During the years ended December 31, 2013 and 2012 , the Company and its partner each made a working capital advances to Bunge-SCF of $2.5 million and $5.0 million , respectively. During the year ended December 31, 2013 , the Company received $0.5 million of repayments of working capital advances. During the year ended December 31, 2011, the Company and its partner each contributed $17.3 million in cash to Bunge-SCF Grain. As of December 31, 2013 , the total outstanding balance of working capital advances was $7.0 million . In addition, beginning July 29, 2011, Bunge-SCF Grain began operating and managing the Company’s grain storage and handling facility in McLeansboro, Illinois and the Company received $1.0 million , $1.0 million and $0.3 million in rental income for the years ended December 31, 2013 , 2012 and 2011 , respectively.

SCF Bunge Marine. SCF Bunge Marine LLC (“SCF Bunge Marine”) provides towing services on the U.S. Inland River Waterways, primarily the Mississippi River, Illinois River, Tennessee River and Ohio River. The Company bareboat charters inland river towboats from a third-party leasing company and time charters the equipment to SCF Bunge Marine. The Company's obligations under the bareboat charter are guaranteed by SEACOR and its partner in SCF Bunge Marine. Pursuant to the time charter, the Company received charter fees of $40.8 million , $40.9 million and $41.0 million for the years ended December 31, 2013 , 2012 and 2011 , respectively. In addition, during the years ended December 31, 2013 , 2012 and 2011 , SCF Bunge Marine received $41.1 million , $42.6 million and $42.4 million , respectively, for towing services provided to the Company.

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Soylutions. On July 29, 2011, the Company obtained a controlling interest in Soylutions through its acquisition of its partner’s interest for $11.9 million in cash, following which the Company owned 100% (see Note 4). Upon the acquisition, the Company adjusted its investment in Soylutions to fair value resulting in the recognition of a gain of $2.3 million , net of tax, which is included in equity in earnings (losses) in 50% or less owned companies in the accompanying consolidated statements of income.

Other. The Company’s other Inland River Services 50% or less owned companies operate a dry cargo vessel and a fabrication facility. During the year ended December 31, 2012 , the Company received $0.4 million in distributions from one of these 50% or less owned companies.

Dorian. On July 25, 2013, the Company contributed $57.0 million to Dorian in exchange for a 25% ownership interest. The contribution included $42.1 million in net cash and other consideration valued at $14.9 million that included certain progress payments made toward the construction of two VLGC's, the construction contracts for the two VLGC's, and options to construct additional VLGC's. Dorian currently operates a fleet of three VLGC's in international trade. On November 18, 2013, Dorian completed a second private placement equity offering and the Company contributed an additional $70.4 million in cash. Following the completion of the second private placement equity offering, the Company's ownership percentage was diluted to a 21.8% ownership interest and the Company recognized a $1.1 million gain, net of tax, on the accretion of its investment, which is included in equity in earnings (losses) of 50% or less owned companies in the accompanying consolidated statements of income. On February 6, 2014, Dorian completed a third private placement equity offering in which the Company did not participate and was diluted to a 19.3% ownership interest.

Trailer Bridge. Trailer Bridge, Inc. (“Trailer Bridge”), an operator of U.S.-flag deck and RORO barges, offers marine transportation services between Jacksonville, Florida, San Juan, Puerto Rico and Puerto Plata, Dominican Republic. Trailer Bridge filed for bankruptcy under Chapter 11 of the U.S. Bankruptcy Code in the United States Bankruptcy Court for the Middle District of Florida (the “Bankruptcy Court”) on November 16, 2011. On April 2, 2012, Trailer Bridge approved and adopted a restructuring plan, which was confirmed by the Bankruptcy Court. Immediately prior to adopting the restructuring plan, the Company had outstanding marketable security positions in 9.25% Senior Secured Notes due from Trailer Bridge (“Old Notes”) and U.S. Government Guaranteed Ship Financing Bonds due from Trailer Bridge (“MARAD Bonds”). Upon the adoption and implementation of Trailer Bridge's restructuring plan, the Company exchanged its Old Notes for a new $33.1 million Secured Note due from Trailer Bridge and new common shares in Trailer Bridge, representing a 47.26% ownership interest valued at $9.9 million . As a result of the adoption and implementation of the restructuring plan, the Company reclassified $48.1 million from marketable securities to investments, at equity, and advances to 50% or less owned companies, representing its investment in the new Trailer Bridge securities valued at $43.0 million and the MARAD Bonds valued at $5.1 million . In addition, as part of the restructuring plan, the Company provided $20.8 million of bridge financing to Trailer Bridge. During the year ended December 31, 2012 , the Company recognized $9.8 million of marketable security gains, net related to its investments in Trailer Bridge. During the years ended December 31, 2013 and 2012 , the Company received repayments of $2.1 million and $1.1 million , respectively, on the bridge financing.

SeaJon. SeaJon LLC (“SeaJon”) owns an articulated tug-barge operating in the Great Lakes trade. Each partner contributed its ownership interest in a newly constructed articulated tug-barge, which began its charter during 2012. During December 31, 2013, the Company and its partner each made capital contributions of $1.4 million . During the year ended December 31, 2012, SeaJon entered into a $40.0 million bank term loan, secured by the articulated tug-barge and the assignment of its current charter. Upon funding, SeaJon distributed $20.0 million to each of its partners. The term loan requires monthly principal and interest payments and a balloon payment of $29.7 million due April 2017. The Company is a guarantor of its proportionate share of SeaJon's debt up to a maximum of $5.0 million .

Witt O'Brien's. On December 31, 2012, the Company contributed its interest in O'Brien's Response Management Inc. ("ORM") to Witt Group Holdings, LLC (the "ORM Transaction"), which was renamed Witt O'Brien's, LLC ("Witt O'Brien's") in exchange for a 54.2% economic interest and a 50% controlling interest in Witt O'Brien's. Witt O'Brien's is a a global leader in preparedness, crisis management, and disaster response and recovery. As a result of the change in control, the Company recognized equity in losses of 50% or less owned companies of $9.7 million , net of tax, primarily related to the one-time recognition of deferred tax liabilities associated with the deconsolidation of non-deductible goodwill. During the year ended December 31, 2013 , the Company received dividends of $2.0 million from Witt O'Brien's.

Hawker Pacific. Hawker Pacific Airservices, Limited (“Hawker Pacific”) is an aviation sales and support organization and a distributor of aviation components from leading manufacturers. On June 1, 2011, the Company contributed its ownership in Avion Logistics Limited (“ALL”), valued at $2.0 million , to Hawker Pacific for an additional 1.7% ownership interest bringing its total ownership percentage to 34.2% . During the year ended December 31, 2012, the Company advanced $3.3 million to Hawker Pacific at an interest rate of 10.0% per annum, which was repaid in December 2012.

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Avion. Avion Pacific Limited (“Avion”) is a distributor of aircraft and aircraft related parts. During the years ended December 31, 2012 and 2011 , the Company made advances of $11.0 million and $9.5 million , respectively, to Avion. During the years ended December 31, 2013 , 2012 and 2011 , the Company received repayments of $1.0 million , $15.7 million and $4.6 million , respectively, from Avion on these advances. As of December 31, 2013 and 2012 , the Company had outstanding loans to Avion totaling $4.0 million and $5.0 million , respectively.

Illinois Corn Processing. The Company provided ICP 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 January 2013 subject to certain borrowing restrictions. During the year ended December 31, 2011 , the Company received principal repayments of $1.7 million on the term loan. During January 2012 and the year ended December 31, 2011 , the Company made net advances $0.3 million and $4.3 million , respectively, under the revolving line of credit. In January 2012, the Company and its partner each made a capital contribution of $0.5 million . On February 1, 2012, the Company obtained a controlling interest in ICP through its acquisition of a portion of its partner’s interest for $9.1 million in cash, following which the Company owned 70% (see Note 4). Upon the acquisition, the Company adjusted its investment in ICP to fair value resulting in the recognition of a gain of $6.0 million , net of tax, which is included in equity in earnings (losses) in 50% or less owned companies in the accompanying consolidated statements of income.

Avion Logistics Limited. On June 1, 2011, the Company acquired a controlling interest in Avion Logistics Limited (“ALL”) through the acquisition of its partner’s interest for $1.0 million in cash, following which the Company owned 100% . 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 for an additional 1.7% interest in Hawker Pacific.

Other. The Company's other 50% or less owned companies are primarily industrial aviation businesses in Asia. During the year ended December 31, 2013 , the Company made $0.7 million of additional investments in these 50% or less owned companies. During the year ended December 31, 2012 , the Company received $1.2 million in distributions from one of these 50% or less owned companies.



6.	LEASES AND NOTES RECEIVABLE FROM THIRD PARTIES

From time to time, the Company engages in lending and leasing activities involving various types of equipment. The Company recognizes interest income as payments are due, typically monthly, and expenses all costs associated with its lending and leasing activities as incurred. These leases and notes receivable are typically collateralized by the underlying equipment and require scheduled lease payments or periodic principal and interest payments. As of December 31, 2013 and 2012 , the outstanding balance of leases and notes receivable from third parties was $14.5 million and $30.6 million , respectively. During the years ended December 31, 2013 , 2012 and 2011 , the Company made advances on notes receivable from third parties of $20.5 million , $4.1 million and $42.6 million , respectively, and received repayments on notes receivable from third parties of $33.3 million , $36.8 million and $6.8 million , respectively. During the years ended December 31, 2013 , 2012 and 2011 , the Company received net lease payments of $3.6 million , $3.4 million and $9.0 million , respectively, from third parties. As of December 31, 2013 , none of the Company’s third party leases and notes receivable are past due or in default and the Company has made no provisions for credit losses.



7.	CONSTRUCTION RESERVE FUNDS

The Company has established, pursuant to Section 511 of the Merchant Marine Act, 1936, as amended, construction reserve fund accounts subject to agreements with the Maritime Administration. In accordance with this statute, the Company is permitted to deposit proceeds from the sale of certain vessels into the construction reserve fund accounts and defer the taxable gains realized from the sale of those vessels. Qualified withdrawals from the construction reserve fund accounts are only permitted for the purpose of acquiring qualified U.S.-flag vessels as defined in the statue and approved by the Maritime Administration. To the extent that sales proceeds are reinvested in replacement vessels, the carryover depreciable tax basis of the vessels originally sold is attributed to the U.S.-flag vessels acquired using such qualified withdrawals. The construction reserve funds must be committed for expenditure within three years of the date of sale of the equipment, subject to two one-year extensions which can be granted at the discretion of the Maritime Administration, or be released for the Company’s general use as nonqualified withdrawals. For nonqualified withdrawals, the Company is obligated to pay taxes on the previously deferred gains at the prevailing statutory tax rate plus a 1.1% penalty tax and interest thereon for the period such taxes were deferred.

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As of December 31, 2013 and 2012 , the Company’s construction reserve funds of $252.1 million and $186.0 million , respectively, are classified as non-current assets in the accompanying consolidated balance sheets as the Company has the intent and ability to use the funds to acquire equipment. Construction reserve fund transactions for the years ended December 31 were as follows (in thousands):



	2013			2012			2011
Withdrawals	$	(65,493	)	$	(122,695	)	$	(82,553	)
Deposits	131,603			58,350			18,642
	$	66,110		$	(64,345	)	$	(63,911	)



8.	INCOME TAXES

Income from continuing operations before income tax expense (benefit) and equity in earnings (losses) of 50% or less owned companies derived from U.S. and foreign companies for the years ended December 31 were as follows (in thousands):



	2013			2012			2011
United States	$	71,669		$	82,383		$	14,556
Foreign	(7,596		)	(176		)	(5,886		)
Eliminations and other	3,559			(27,635		)	(4,901		)
	$	67,632		$	54,572		$	3,769

As of December 31, 2013 , cumulative undistributed net earnings of foreign subsidiaries included in the Company’s consolidated retained earnings were $120.4 million .

The Company files a consolidated U.S. federal tax return. The components of income tax expense (benefit) for the years ended December 31 were as follows (in thousands):



	2013			2012			2011
Current:
State	$	1,723		$	3,604		$	2,814
Federal	6,311			36,057			18,715
Foreign	8,142			7,921			9,040
	16,176			47,582			30,569
Deferred:
State	(985		)	(40		)	(615		)
Federal	11,532			(23,572		)	(26,569		)
Foreign	24			211			(75		)
	10,571			(23,401		)	(27,259		)
	$	26,747		$	24,181		$	3,310

The following table reconciles the difference between the statutory federal income tax rate for the Company and the effective income tax rate on continuing operations for the years ended December 31 :



	2013		2012		2011
Statutory rate	35.0	%	35.0	%	35.0	%
Non-deductible expenses	0.4	%	6.1	%	4.9	%
Reversal of valuation allowance on foreign tax credit carryforwards	—	%	(5.5	)%	—	%
Losses of foreign subsidiaries not benefited	5.1	%	4.2	%	17.2	%
State taxes	0.2	%	4.2	%	32.2	%
Other	(1.1	)%	0.3	%	(1.5	)%
	39.6	%	44.3	%	87.8	%

During the year ended December 31, 2012, the effective rate increase associated with non-deductible expenses was primarily attributable to the Company's acceleration into 2012 of restricted stock originally scheduled to vest in 2013 and 2014.

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During the year ended December 31, 2012, the Company utilized all available foreign tax credit carryforwards and reversed a previously established valuation allowance of $3.1 million . As of December 31, 2012, the Company had no remaining foreign tax credit carryforwards.

The components of the net deferred income tax liabilities for the years ended December 31 were as follows (in thousands):



	2013			2012
Deferred tax liabilities:
Property and Equipment	$	343,411		$	328,355
Long-term Debt	56,587			36,864
Unremitted earnings of foreign subsidiaries	40,321			41,382
Investments in 50% or Less Owned Companies	23,573			24,392
Other	9,050			7,235
Total deferred tax liabilities	472,942			438,228
Deferred tax assets:
Share award plans	8,347			6,920
Other	13,662			14,801
Total deferred tax assets	22,009			21,721
Valuation allowance	(6,778		)	(5,990		)
Net deferred tax assets	15,231			15,731
Net deferred tax liabilities	$	457,711		$	422,497

During the year ended December 31, 2013 , the Company increased its valuation allowance for state net operating loss carryforwards from $6.0 million to $6.8 million .

The Company records an additional income tax benefit or expense based on the difference between the fair market value of share awards at the time of grant and the fair market value at the time of vesting or exercise. For the years ended December 31, 2013 , 2012 and 2011 , an additional net income tax benefit was recorded in stockholders’ equity of $1.4 million , $2.0 million and $1.8 million , respectively.



9.	LONG-TERM DEBT

The Company’s borrowings as of December 31 were as follows (in thousands):



	2013			2012
3.0% Convertible Notes (excluding unamortized discount of $47.8 million)	$	230,000		$	—
2.5% Convertible Notes (excluding unamortized discount of $40.4 million)	350,000			350,000
7.375% Senior Notes (excluding unamortized discount of $1.0 million)	233,500			233,500
Title XI Bonds (excluding unamortized discount of $9.3 million)	85,217			90,733
Other (excluding unamortized discount of $1.3 million)	80,563			64,007
	979,280			738,240
Portion due within one year	(45,323		)	(21,920		)
Debt discount, net	(99,839		)	(61,011		)
	$	834,118		$	655,309

The Company’s long-term debt maturities for the years ended December 31 are as follows (in thousands):



2014	$	45,323
2015	18,791
2016	13,711
2017	14,119
2018	14,404
Years subsequent to 2019	872,932
	$	979,280

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3.0% Convertible Senior Notes. On November 13, 2013, SEACOR completed the sale of $230.0 million aggregate principal amount of its 3.0% Convertible Senior Notes due November 15, 2028 (the “ 3.0% Convertible Senior Notes”). Interest on the 3.0% Convertible Senior Notes is payable semi-annually on May 15 and November 15 of each year, commencing May 15, 2014. Beginning November 15, 2020, contingent interest is payable during any subsequent semi-annual interest period if the average trading price of the 3.0% Convertible Senior Notes for a defined period is greater than or equal to $1,200 per $1,000 principal amount of the 3.0% Convertible Senior Notes. The amount of contingent interest payable for any such period will be equal to 0.45% per annum of such average trading price of the 3.0% Convertible Senior Notes. After March 31, 2014 and prior to August 15, 2028, the 3.0% Convertible Senior Notes are convertible into shares of Common Stock at the initial conversion rate ("Conversion Rate") of 7.9362 if the sales price of the Common Stock for a defined period is greater than or equal to 130% of the applicable conversion price ("Conversion Price") on each trading day. The Conversion Price for each note equals $1,000 divided by the Conversion Rate in effect. After August 15, 2028, holders may elect to convert at any time at the Conversion Price. The Company has reserved the maximum number of shares of Common Stock needed upon conversion or 1,825,326 shares as of December 31, 2013. After November 19, 2018, the 3.0% Convertible Senior Notes may be redeemed, in whole or in part, at a price equal to 100% of the principal amount, plus accrued and unpaid interest to the date of redemption. On November 19, 2020 and November 20, 2023, the holders of the 3.0% Convertible Senior Notes may require SEACOR to purchase for cash all or part of the notes at a price equal to 100% of the principal amount, plus accrued and unpaid interest to the date of purchase. SEACOR incurred $6.3 million of net offering costs associated with the 3.0% Convertible Senior Notes sale for net proceeds of $223.7 million .

The Company accounts separately for the liability and equity components of the 3.0% Convertible Senior Notes and the associated underwriting fees in a manner that reflects the Company's non-convertible borrowing rate. Of the total proceeds of $230.0 million received upon issuance and $6.3 million of offering costs, the Company allocated $181.5 million and $5.0 million , respectively, to the liability component and allocated $48.5 million and $1.3 million , respectively, to the equity component. The resulting debt discount and offering costs associated with the liability component is amortized as additional non-cash interest expense over the seven year period for which the debt is expected to be outstanding (November 19, 2020) for an overall effective annual interest rate of 7.4% .

2.5% Convertible Senior Notes. On December 11, 2012, SEACOR completed the sale of $350.0 million aggregate principal amount of its 2.5% Convertible Senior Notes due December 15, 2024 (the “ 2.5% Convertible Senior Notes”). Interest on the 2.5% Convertible Senior Notes is payable semi-annually on June 15 and December 15 of each year. Beginning December 15, 2017, contingent interest is payable during any subsequent semi-annual interest period if the average trading price of the 2.5% Convertible Senior Notes for a defined period is greater than or equal to $1,200 per $1,000 principal amount of the 2.5% Convertible Senior Notes. The amount of contingent interest payable for any such period will be equal to 0.25% per annum of such average trading price of the 2.5% Convertible Senior Notes. Prior to September 15, 2017, the 2.5% Convertible Senior Notes are convertible into shares of Common Stock at the initial conversion rate ("Conversion Rate") of 8.6879 if the sales price of the Common Stock for a defined period is greater than or equal to 130% of the applicable conversion price ("Conversion Price") on each trading day. The Conversion Price for each note equals $1,000 divided by the Conversion Rate in effect. After September 15, 2017, holders may elect to convert at any time at the Conversion Price. On December 14, 2012, the Conversion Rate was adjusted to 9.2089 in connection with the Company's cash dividend of $5.00 per common share. On January 31, 2013, the Conversion Rate was adjusted to 12.0015 in connection with the Spin-off of Era Group from SEACOR (see Note 16). The Company has reserved the maximum number of shares of Common Stock needed upon conversion or 4,200,525 shares as of December 31, 2013. After December 19, 2015 and prior to December 19, 2017, the 2.5% Convertible Senior Notes may be redeemed, in whole or in part, at a price equal to 100% of the principal amount, plus accrued and unpaid interest to the date of redemption, plus $55 per $1,000 bond, provided the trading price of the Common Stock for a defined period exceeds 130% of the Conversion Price. After December 19, 2017, the 2.5% Convertible Senior Notes may be redeemed, in whole or in part, at a price equal to 100% of the principal amount, plus accrued and unpaid interest to the date of redemption plus $55 per $1,000 bond. On December 19, 2017 and December 19, 2022, the holders of the 2.5% Convertible Senior Notes may require SEACOR to purchase for cash all or part of the notes at a price equal to 100% of the principal amount, plus accrued and unpaid interest to the date of purchase. SEACOR incurred $9.4 million of net offering costs associated with the 2.5% Convertible Senior Notes sale for net proceeds of $340.6 million .

The Company accounts separately for the liability and equity components of the 2.5% Convertible Senior Notes and the associated underwriting fees in a manner that reflects the Company's non-convertible borrowing rate. Of the total proceeds of $350.0 million received upon issuance and $9.4 million of offering costs, the Company allocated $300.4 million and $8.1 million , respectively, to the liability component and allocated $49.6 million and $1.3 million , respectively, to the equity component. The resulting debt discount and offering costs associated with the liability component is amortized as additional non-cash interest expense over the five year period for which the debt is expected to be outstanding (December 19, 2017) for an overall effective annual interest rate of 6.5% .

7.375% Senior Notes. On September 24, 2009, SEACOR issued $250.0 million aggregate principal amount of its 7.375% Senior Notes due October 1, 2019 (the “ 7.375% Senior Notes”). The 7.375% Senior Notes were issued under a supplemental indenture dated as of September 24, 2009 (the “2009 Supplemental Indenture”) to the base indenture relating to

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SEACOR’s senior debt securities, dated as of January 10, 2001, between SEACOR and U.S. Bank National Association, as trustee. Interest on the 7.375% Senior Notes is payable semi-annually on April 1 and October 1 of each year. The 7.375% Senior Notes may be redeemed at any time, in whole or in part, at a price equal to the principal amount, plus accrued and unpaid interest to the date of redemption, plus a specified “make-whole” premium. The 2009 Supplemental Indenture contained covenants including, among others, limitations on liens and sale and leasebacks of certain Principal Properties, as defined, and certain restrictions on SEACOR consolidating with or merging into any other Person, as defined.

5.875% Senior Notes. In 2002, SEACOR sold $200.0 million aggregate principal amount of its 5.875% Senior Notes due October 1, 2012 (the “ 5.875% Senior Notes”). During the year ended December 31, 2012, the Company purchased $5.5 million , in principal amount, of its 5.875% Senior Notes for $5.7 million , resulting in a loss on debt extinguishment of $0.2 million . On October 1, 2012, the Company repaid the remaining outstanding principal amount of $171.0 million . During the year ended December 31, 2011, the Company purchased $2.2 million , in principal amount, of its 5.875% Senior Notes for $2.3 million , resulting in a loss on debt extinguishment of $0.1 million .

Title XI Bonds. Three double-hull product and chemical tankers (the “Title XI tankers”) owned by subsidiaries of the Company (the “Title XI companies”) were financed through the issuance of U.S. Government Guaranteed Ship Financing Bonds (the “Title XI Bonds” or “Title XI financing”) bearing interest at 6.50% with semi-annual principal and interest payments and maturing through June 2024.

A percentage of earnings attributable to each of the Title XI tankers’ operations is required to be deposited into Title XI reserve fund bank accounts. Cash held in these accounts is invested as prescribed by Title XI financing agreements. Withdrawals from these accounts are permitted for limited purposes, subject to the prior approval of the U.S. Maritime Administration. As of December 31, 2013 and 2012 , the Title XI reserve fund account balances were $9.6 million .

The Title XI financing agreements contain covenants restricting cash distributions subject to certain financial tests. Failure to meet these financial tests, among other things, restricts Title XI companies from (1) distributing capital; (2) paying dividends; (3) increasing employee compensation and paying other indebtedness; (4) incurring additional indebtedness; (5) making investments and (6) acquiring fixed assets. Cash distributions (as defined in the Title XI financing agreements) from a Title XI company are prohibited until such company achieves certain levels of working capital. As of December 31, 2013 and 2012 , the Title XI companies held $12.2 million and $27.3 million in restricted cash that was limited in use for the operation of the tankers and cannot be used to fund the Company’s general working capital requirements. As of December 31, 2013 , the Title XI companies had net assets of $60.7 million .

In the event of default (as defined in the Title XI financing agreements), all of the Title XI tankers, in addition to the assignment of earnings relating to those vessels and the funds on deposit in the Title XI reserve fund accounts, serve as collateral for the repayment of the Title XI Bonds. The aggregate net book value as of December 31, 2013 of the Title XI tankers was $119.8 million .

SEACOR Revolving Credit Facility. On August 9, 2013 the Company terminated its unsecured revolving credit facility that was scheduled to mature in November 2013. During the year ended December 31, 2013 , the Company made no borrowings or repayments on the revolving credit facility. During the year ended December 31, 2012 , the Company made net repayments of $175.0 million on the revolving credit facility. During the year ended December 31, 2011, the company drew $50.0 million on the revolving credit facility.

Other. The Company has various other obligations including ship, equipment and facility mortgages, working capital lines and short term financing for certain agriculture commodity trading and logistics’ inventories. These obligations have maturities ranging from several days through October 2021, have interest rates ranging from 1.1% to 5.0% as of December 31, 2013 , and require periodic payments of interest and principal. During the years ended December 31, 2013 , 2012 and 2011 , proceeds from the issuance of other debt was $1.5 million , $6.7 million and $23.0 million , respectively. During the years ended December 31, 2013 , 2012 and 2011 , repayments on other debt was $9.7 million , $24.5 million and $28.7 million , respectively.

As of December 31, 2013 , the Company had outstanding letters of credit totaling $27.1 million with various expiration dates through 2016 .



10.	COMMON STOCK

SEACOR’s Board of Directors declared a Special Cash Dividend of $5.00 per share of Common Stock payable to stockholders of record as of December 17, 2012. On or about December 26, 2012, the Company paid these dividends totaling $100.4 million on 20,076,762 shares of Common Stock, including dividends of $0.9 million related to 171,562 outstanding restricted share awards. The Compensation Committee of SEACOR’s Board of Directors elected, at its discretion, to pay the dividend on the restricted share awards in December 2012 rather than depositing amounts in escrow pending the lapsing of restrictions.



11.	SAVINGS AND MULTI-EMPLOYER PENSION PLANS

SEACOR Savings Plan. The Company provides a defined contribution plan (the “Savings Plan”) for its eligible U.S.-based employees. The Company’s contribution to the Savings Plan is limited to 50% of an employee’s first 6% of wages invested in the Savings Plan and is subject to annual review by the Board of Directors of SEACOR. The Company’s Savings Plan costs were $2.2 million , $3.3 million and $3.1 million for the years ended December 31, 2013 , 2012 and 2011 , respectively, including discontinued operations.

SEACOR Deferred Compensation Plan. In 2005, the Company established a non-qualified deferred compensation plan, as amended (the “Deferred Compensation Plan”) to provide certain highly compensated executives and non-employee directors the ability to defer receipt of up to 75% of their cash base salary and up to 100% of their cash bonus. Prior to a 2012 amendment, participants were eligible to defer up to 100% of their vested restricted stock (deferred in the form of Restricted Stock Units, as defined in the plan) for each fiscal year. Each participant’s compensation deferrals are credited to a bookkeeping account and, subject to certain restrictions, each participant may elect to have their cash deferrals in such account indexed against one or more investment options, solely for purposes of determining amounts payable under the Deferred Compensation Plan (the Company is not obligated to actually invest any deferred amounts in the selected investment options).

Participants may receive a distribution of deferred amounts, plus any earnings thereon (or less any losses), on a date specified by the participant or, if earlier, upon a separation from service or upon a change of control (as defined). All distributions to participants following a separation from service shall be in the form of a lump sum, except if such separation qualifies as “retirement” under the terms of the plan, in which case it may be paid in installments if previously elected by the participant. Distributions to “Key Employees” upon a separation from service (other than due to death) will not commence until at least 6 months after the separation from service. Participants are always 100% vested in the amounts that they contribute to their Deferred Compensation Plan accounts. The Company, at its option, may contribute amounts to participants’ accounts, which may be subject to vesting requirements.

The obligations of the Company to pay deferred compensation under the Deferred Compensation Plan are general unsecured obligations of the Company and rank equally with other unsecured indebtedness of the Company that is outstanding from time to time. As of December 31, 2013 and 2012 , the Company had obligations of $0.6 million and $0.5 million , respectively, related to the Deferred Compensation Plan that are included in the accompanying consolidated balance sheets as deferred gains and other liabilities. The total amount of the Company’s obligation under the Deferred Compensation Plan will vary depending upon the level of participation by participants and the amount of compensation that participants elect to defer under the plan. The duration of the Deferred Compensation Plan is indefinite (subject to the Board of Directors’ discretion to amend or terminate the plan).

MNOPF and MNRPF. Certain subsidiaries of the Company are participating employers in industry-wide, multi-employer, defined benefit pension funds in the United Kingdom, the United Kingdom Merchant Navy Officers Pension Fund (“MNOPF”) and the United Kingdom Merchant Navy Ratings Pension Fund (“MNRPF”). The Company’s participation in the MNOPF relates to officers employed between 1978 and 2002 and its participation in the MNRPF 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. Both of these plans are in deficit positions and depending upon the results of future actuarial valuations, it is possible that the plans could experience further funding deficits, requiring the Company to recognize payroll related operating expenses in the periods invoices are received. The Company has one active employee participating in the MNOPF plan and none in the MNRPF plan. During the years ended December 31, 2013 , 2012 and 2011 , contributions to the MNOPF were not material and did not exceed 5% of total contributions to the plan in any year.

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Under the direction of a court order, any deficit of the MNOPF is to be remedied through funding contributions from all participating employers. Prior to 2011, the Company was invoiced and expensed $16.7 million , representing the Company’s allocated share of the cumulative funding deficits, including portions deemed uncollectible due to the non-existence or liquidation of certain participating employers. During the year ended December 31, 2013, based on an actuarial valuation of the MNOPF in 2012, the Company was invoiced and expensed $2.7 million , representing the Company’s allocated share of an additional funding deficit based on that actuarial valuation.

Based on an actuarial valuation of the MNRPF 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. During the year ended December 31, 2011, $0.4 million , in the aggregate, of the Company’s funding deficit had been invoiced and expensed. Based on an actuarial valuation of the MNRPF in March 2011, the Company was advised that the funding deficit had increased to $359.3 million ( £217.0 million ) of which the Company’s share is $0.3 million ( £0.2 million ). The recovery plans for the additional funding deficit are still being considered.

AMOPP and SPP. Certain subsidiaries of the Company are participating employers in industry-wide, multi-employer defined benefit pension plans in the United States: the American Maritime Officers Pension Plan (EIN: 13-1936709) (the "AMOPP") and the Seafarers Pension Plan (EIN: 13-6100329) (the "SPP"). Certain subsidiaries of the Company also participates in the American Maritime Officers 401(k) Plan (EIN: 11-2978754) (the "AMO 401(k) Plan"), an industry-wide, multi-employer defined contribution plan. The Company’s participation in these plans relates to certain employees of the Company’s Shipping Services business segment.

Under federal pension law, the AMOPP was deemed in critical status for the 2009 and 2010 plan years. The AMOPP was frozen in January 2010 and a ten year rehabilitation plan was adopted by the AMOPP trustees in February 2010 whereby benefit changes and increased contributions by participating employers were expected to improve the funded status of the AMOPP. The AMOPP was replaced by the AMO 401(k) Plan. On December 28, 2012, the AMOPP was elevated to endangered status primarily as a result of favorable investment performance and the rehabilitation plan adopted by the AMOPP trustees. Based on an actuarial valuation performed as of September 30, 2012, the latest period for which an actuarial valuation is available, if the Company had chose to withdraw from the AMOPP at that time, its withdrawal liability would have been $45.6 million . That liability may change in future years based on various factors, primarily employee census. As of December 31, 2013 , the Company has no intention to withdraw from the AMOPP and no deficit amounts have been invoiced. Depending upon the results of the future actuarial valuations and the ten year rehabilitation plan, it is possible that the AMOPP will experience further funding deficits, requiring the Company to recognize additional payroll related operating expenses in the periods invoices are received or contribution levels are increased.

The SPP was neither in endangered or critical status for the 2012 plan year, the latest period for which a report is available, as the SPP was fully funded.

In accordance with collective bargaining agreements between the Company and the American Maritime Officers (“AMO”), the latest of which expires on December 31, 2015, and the Seafarers International Union (“SIU”), the latest of which expires on September 30, 2017, the Company makes periodic contributions to the AMOPP, SPP and AMO 401(k) Plan. The contributions to these plans are expensed as incurred and are included in operating expenses in the accompanying consolidated statements of income. During the years ended December 31, 2013 , 2012 and 2011 , the Company made contributions of $0.9 million , $0.9 million and $0.9 million , respectively, to the AMOPP and $1.5 million , $1.3 million and $0.6 million , respectively to the SPP. During the years ended December 31, 2013 , 2012 and 2011 , none of the Company’s contributions to the AMOPP or the SPP exceeded 5% of total contributions to the plans and the Company did not pay any material surcharges. As of December 31, 2013 , there is no required minimum future contribution to the AMOPP or the SPP. The Company’s obligations for future contributions are based upon the number of employees subject to the collective bargaining agreements, their rates of pay and the number of days worked.

Other Plans. Certain employees participate in other defined contribution plans in the United States and various international regions including the United Kingdom and Singapore. During the years ended December 31, 2013 , 2012 and 2011 , the Company incurred costs of $0.5 million , $0.4 million and $0.3 million , respectively, in the aggregate related to these plans, primarily from employer matching contributions.



12.	SHARE BASED COMPENSATION

Share Incentive Plans. SEACOR’s stockholders approved the 2007 Share Incentive Plan to provide for the grant of options to purchase shares of Common Stock, stock appreciation rights, restricted stock, stock awards, performance awards and restricted stock units to non-employee directors, key officers and employees of the Company. The 2007 Share Incentive Plan superseded the 2003 Non-Employee Director Share Incentive Plan and the 2003 Share Incentive Plan (collectively including all

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predecessor plans, the “Share Incentive Plans”). The Compensation Committee of the Board of Directors administers the Share Incentive Plans. A total of 5,650,000 shares of Common Stock have been authorized for grant under the Share Incentive Plans. All shares issued pursuant to such grants are newly issued shares of Common Stock. The exercise price per share of options granted cannot be less than 100% of the fair market value of Common Stock at the date of grant under the Share Incentive Plans. Grants to date have been limited to stock awards, restricted stock, restricted stock units and options to purchase shares of Common Stock.

Restricted stock and restricted stock units typically vest from one to five years after grant and options to purchase shares of Common Stock typically vest and become exercisable from one to five years after date of grant. Options to purchase shares of Common Stock granted under the Share Incentive Plans expire no later than the tenth anniversary of the date of grant. In the event of a participant’s death, retirement, termination by the Company without cause or a change in control of the Company, as defined in the Share Incentive Plans, restricted stock and restricted stock units vest immediately and options to purchase shares of Common Stock vest and become immediately exercisable.

Employee Stock Purchase Plans. SEACOR’s stockholders approved the 2009 Employee Stock Purchase Plan with a term of ten years (collectively including all predecessor plans, the “Employee Stock Purchase Plans”) to permit the Company to offer Common Stock for purchase by eligible employees at a price equal to 85% of the lesser of (i) the fair market value of Common Stock on the first day of the offering period or (ii) the fair market value of Common Stock on the last day of the offering period. Common Stock is made available for purchase under the Employee Stock Purchase Plans for six -month offering periods. The Employee Stock Purchase Plans are intended to comply with Section 423 of the Internal Revenue Code of 1986, as amended (the “Code”), but is not intended to be subject to Section 401(a) of the Code or the Employee Retirement Income Security Act of 1974. The Board of Directors of SEACOR may amend or terminate the Employee Stock Purchase Plans at any time; however, no increase in the number of shares of Common Stock reserved for issuance under the Employee Stock Purchase Plans may be made without stockholder approval. A total of 600,000 shares of Common Stock have been approved for purchase under the Employee Stock Purchase Plans with all shares issued from those held in treasury.

Share Award Transactions. The following transactions have occurred in connection with the Company’s share based compensation plans during the years ended December 31 :



	2013		2012		2011
Restricted stock awards granted	148,300		134,600		183,500
Restricted stock awards forfeited	(18,000	)	(2,120	)	(4,100	)
Director stock awards granted	2,500		4,000		4,000
Restricted Stock Unit Activities:
Outstanding as of the beginning of year	—		1,130		531
Granted	—		—		650
Converted to shares	—		(1,130	)	(51	)
Outstanding as of the end of year	—		—		1,130
Shares released from Deferred Compensation Plan	(1,692	)	—		(63	)
Stock Option Activities:
Outstanding as of the beginning of year	1,281,821		1,272,192		1,130,356
Granted ⁽¹⁾	529,912		173,700		290,960
Exercised	(328,077	)	(149,781	)	(146,169	)
Forfeited	(800	)	—		(1,920	)
Expired	(1,576	)	(14,290	)	(1,035	)
Outstanding as of the end of year	1,481,280		1,281,821		1,272,192
Employee Stock Purchase Plan shares issued	31,586		39,980		47,376
Shares available for issuance under Share Incentive and Employee Stock Purchase Plans as of the end of year	508,495		1,200,417		538,287

______________________


(1)	During the year ended December 31, 2013 , the Company granted 318,012 stock options to existing option holders, net of share award settlements for Era Group employees and directors, under make-whole provisions upon the Spin-off of Era Group.

During the years ended December 31, 2013 , 2012 and 2011 , the Company recognized $14.5 million , $33.3 million and $21.9 million , respectively, of compensation expense related to stock awards, stock options, employee stock purchase plan purchases, restricted stock and restricted stock units (collectively referred to as “share awards”). As of December 31, 2013 , the

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Company had approximately $27.4 million in total unrecognized compensation costs of which $10.0 million and $8.3 million are expected to be recognized in 2014 and 2015 , respectively, with the remaining balance recognized through 2018 .

The weighted average values of grants under the Company’s Share Incentive Plans were $43.74 , $58.22 and $56.57 for the years ended December 31, 2013 , 2012 and 2011 , respectively. The fair value of each option granted during the years ended December 31, 2013 , 2012 and 2011 is estimated on the date of grant using the Black-Scholes option-pricing model with the following assumptions: (a) no dividend yield, (b) weighted average expected volatility of 30.5% , 31.0% and 30.7% , respectively, (c) weighted average discount rates of 1.53% , 0.81% and 1.65% , respectively, and (d) expected lives of 5.96 years, 5.91 years and 5.73 years, respectively.

During the year ended December 31, 2013 , the number of shares and the weighted average grant price of restricted stock transactions were as follows:



	Restricted Stock
	Number of Shares		Weighted Average Grant Price
Nonvested as of December 31, 2012	180,930		$	92.85
Granted	148,300		$	68.23
Vested ⁽¹⁾⁽²⁾	(8,860	)	$	72.79
Forfeited	(18,000	)	$	81.78
Nonvested as of December 31, 2013 ⁽¹⁾	302,370		$	70.61

______________________


(1)	During the year ended December 31, 2013 , the weighted average grant prices of restricted stock outstanding at the time of the Spin-off were reduced based on a ratio of the relative market value of the Company's share price immediately prior to and after the effective date of the Spin-off.


(2)	Restricted stock vested during the year ended December 31, 2013 includes 4,940 shares transferred to Era Group as part of share award settlements for for Era Group employees and directors.

During the years ended December 31, 2013 , 2012 and 2011 , the total grant date fair value of restricted stock and restricted stock units that vested was $3.7 million , $38.1 million and $1.6 million , respectively. During the year ended December 31, 2013, the Company recognized additional compensation expense of $3.3 million as a consequence of a partial acceleration of the vesting of restricted stock upon the Company's restricted stockholders receiving one fully vested Era share for each SEACOR restricted share held on the effective date of the Spin-off by means of a dividend. During the year ended December 31, 2012 , the Company accelerated the vesting date for all restricted stock and restricted stock units that were scheduled to vest in 2013 and 2014 into 2012 resulting in additional compensation expense of $12.2 million , including discontinued operations.

During the year ended December 31, 2013 , the number of shares, the weighted average grant date fair value and the weighted average exercise price on stock option transactions were as follows:



	Nonvested Options				Vested/Exercisable Options				Total Options
	Number of Shares		Weighted Average Grant Date Fair Value		Number of Shares		Weighted Average Exercise Price		Number of Shares		Weighted Average Exercise Price
Outstanding, as of December 31, 2012	533,660		$	27.72	748,161		$	63.36	1,281,821		$	68.96
Granted ⁽¹⁾⁽²⁾	354,254		$	26.12	175,658		$	45.64	529,912		$	63.19
Vested ⁽¹⁾	(235,508	)	$	21.61	235,508		$	56.62	—		$	—
Exercised ⁽¹⁾	—		$	—	(328,077	)	$	51.17	(328,077	)	$	51.17
Forfeited ⁽¹⁾	(800	)	$	23.22	—		$	—	(800	)	$	72.84
Expired ⁽¹⁾	—		$	—	(1,576	)	$	72.04	(1,576	)	$	72.04
Outstanding, as of December 31, 2013 ⁽¹⁾	651,606		$	23.36	829,674		$	50.42	1,481,280		$	57.95

______________________


(1)	During the year ended December 31, 2013 , the weighted average grant date fair values and weighted average exercise prices of stock options outstanding at the time of the Spin-off were reduced based on a ratio of the relative market value of the Company's share price immediately prior to and after the effective date of the Spin-off.


(2)	During the year ended December 31, 2013 , the Company granted 142,354 nonvested and 175,658 vested/exercisable stock options to existing option holders, net of share award settlements for Era Group employees and directors, under make-whole provisions upon the Spin-off of Era Group.

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During the years ended December 31, 2013 , 2012 and 2011 , the aggregate intrinsic value of exercised stock options was $10.5 million , $7.0 million and $6.8 million , respectively. As of December 31, 2013 , the weighted average remaining contractual term for total outstanding stock options and vested/exercisable stock options was 5.97 and 4.53 years, respectively. As of December 31, 2013 , the aggregate intrinsic value of all options outstanding and all vested/exercisable options outstanding was $49.3 million and $33.8 million , respectively.

As a result of the Spin-off during the year ended December 31, 2013 , the Company reduced the exercise prices for all outstanding stock options and granted additional stock options to existing option holders based on a ratio of the relative market value of its share price immediately prior to and after the effective date of the Spin-off. As a result of these adjustments, both the aggregate intrinsic value and the ratio of the exercise price to the market price were approximately equal immediately prior to and after the effective date of the Spin-off. As these adjustments were made in accordance with the anti-dilution provisions of the Share Incentive Plans, no compensation expense was recognized for the adjustments.

As a result of the Special Cash Dividend (see Note 10) paid during the year ended December 31, 2012 , the Company reduced the exercise prices for all outstanding stock options as of the Special Cash Dividend record date by the dividend amount of $5.00 . As a result of this adjustment, both the aggregate intrinsic value and the ratio of the exercise price to the market price were approximately equal immediately prior to and after the Special Cash Dividend record date. As this adjustment was made in accordance with the anti-dilution provisions of the Share Incentive Plans, no compensation expense was recognized for the adjustments.



13.	RELATED PARTY TRANSACTIONS

ICP manufactures and sells certain non-ethanol alcohol finished goods to the noncontrolling interest partner in ICP. During the year ended December 31, 2012, the noncontrolling interest partner operated under a marketing agreement with ICP for non-ethanol alcohol production, which expired on January 1, 2013. During the year ended December 31, 2013, ICP continued to sell non-ethanol alcohol finished goods to the noncontrolling interest partner for resale purposes and also independently sold non-ethanol alcohol finished goods directly to unrelated third party customers. During the years ended December 31, 2013 and 2012 , the Company sold $6.6 million and $44.8 million , respectively to the noncontrolling interest partner. As of December 31, 2013 and 2012 , ICP had accounts receivable of $1.8 million and $4.7 million from the noncontrolling interest partner. The noncontrolling interest partner has payment terms comparable to other ICP customers purchasing the same types of non-ethanol alcohol finished goods.



14.	COMMITMENTS AND CONTINGENCIES

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of cash, cash equivalents, restricted cash, marketable securities, construction reserve funds and Title XI reserve funds totaling $825.6 million .

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filed in Darnell 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 ORM and NRC (and the other defendants). Plaintiffs in this matter have since been granted leave to amend their complaint to include 410 additional individual plaintiffs. On October 3, 2012, ORM and NRC were served with a Rule 14(c) Third-Party Complaint by Jambon Supplier II, L.L.C. and Jambon Marine Holdings L.L.C. in their Limitation of Liability action, In the Matter of Jambon Supplier II, L.L.C., et al., No. 2:12-CV-00426 (E.D. La.). This Third-Party Complaint alleges that if claimant David Dinwiddie, who served as a clean-up crewmember aboard the M/V JAMBON SUPPLIER II vessel during the clean-up efforts, was injured as a result of his exposure to dispersants and chemicals during the course and scope of his employment, then said injuries were caused by the third-party defendants. On November 25, 2012, ORM was named as a defendant in Victoria Sanchez v. American Pollution Control Corp. et al., No. 2:12-CV-00164 (E.D. La.), a maritime suit filed by an individual who allegedly participated in the clean-up effort and sustained personal injuries during the course of such employment. On December 17, 2012, the Court unsealed a False Claims Act lawsuit naming ORM as a defendant, Dillon v. BP, PLC et al., No. 2:12-CV-00987 (E.D. La.)., which is a suit by an individual seeking damages and penalties arising from alleged false reports and claims made to the federal government with respect to the amount of oil burned and dispersed during the clean-up. The federal government has declined to intervene in this suit. On April 8, 2013, the Company, ORM, and NRC were named as defendants in William and Dianna Fitzgerald v. BP Exploration et al., No. 2:13-CV-00650 (E.D. La.), which is a suit by a husband and wife whose son allegedly participated in the clean-up effort and became ill as a result of his exposure to oil and dispersants. Finally, on April 17, 2013, ORM was named as a defendant in Danos et al. v. BP America Production Co. et al., No. 2:13-CV-03747 (removed to E.D. La.), which is a suit by eight individuals seeking damages for dispersant exposure either as a result of their work during clean-up operations or as a result of their residence in the Gulf. The Company is unable to estimate the potential exposure, if any, resulting from these matters but believes they are without merit and does not expect that they will have a material effect on its consolidated financial position, results of operations or cash flows.

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their proposed settlement agreements on April 18, 2012 along with motions seeking preliminary approval of the settlements. The Court held a hearing on April 25, 2012 to consider those motions and preliminarily approved both settlements on May 2, 2012. A final fairness hearing took place on November 8, 2012. The Court granted final approval to the Economic and Property Damages Class Action Settlement ("E&P Settlement") on December 21, 2012, and granted final approval to the Medical Benefits Class Action Settlement ("Medical Settlement") on January 11, 2013. Both class action settlements were appealed to the Fifth Circuit. Following briefing and remand to the MDL court concerning a specific issue, the Medical Settlement appellants moved to voluntarily dismiss their appeals, which the Fifth Circuit granted on December 4, 2013. The Fifth Circuit affirmed the MDL Court's decision concerning the E&P Settlement on January 10, 2014. Although neither the Company, ORM, or NRC are parties to the settlement agreements, the Company, ORM, and NRC are listed as released parties on the releases accompanying both settlement agreements. Consequently, barring any further appeal, class members who did not file timely requests for exclusion will be barred from pursuing economic loss, property damage, personal injury, medical monitoring, and/or other released claims against the Company, ORM, and NRC. The Company believes these settlements have reduced the Company and ORM's potential exposure, if any, from some of the pending actions described above, and continues to evaluate the settlements' impacts on these cases.

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As of December 31, 2013 , the Company leases 22 offshore support vessels, ten barges, two tankers, nine azimuth drive harbor tugs and certain facilities and other equipment. These leasing agreements have been classified as operating leases for financial reporting purposes and related rental fees are charged to expense over the lease terms. The leases generally contain purchase and lease renewal options or rights of first refusal with respect to the sale or lease of the equipment. The remaining lease terms of the tankers, which are subject to subleases, have durations of 105 and 121 months. The lease terms of the other equipment range in duration from one to seven years. Certain of the equipment leases are the result of sale-leaseback transactions with finance companies (see Note 4) and certain of the gains arising from such sale-leaseback transactions have been deferred in the accompanying consolidated balance sheets and are being amortized as reductions in rental expense over the lease terms (see Note 1).

Total rental expense for the Company’s operating leases in 2013 , 2012 and 2011 was $70.9 million , $57.9 million and $44.2 million , respectively. Future minimum payments in the years ended December 31 under operating leases that have a remaining term in excess of one year as of December 31, 2013 for the Company, were as follows (in thousands):



	Total Minimum Payments		Non-cancellable Subleases ⁽¹⁾			Net Minimum Payments
2014	$	43,940	$	(17,345	)	$	26,595
2015	41,282		(17,345		)	23,937
2016	36,888		(17,392		)	19,496
2017	34,933		(17,345		)	17,588
2018	33,743		(17,345		)	16,398
Years subsequent to 2018	102,920		(76,127		)	26,793

______________________


(1)	The total minimum offsetting payments to be received under existing long-term bareboat charter-out arrangements.

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15.	MAJOR CUSTOMERS AND SEGMENT INFORMATION

Certain reclassifications of prior year information have been made to conform to the current year's reportable segment presentation as a result of the Company's presentation of discontinued operations (see Note 16). The following tables summarize the operating results, capital expenditures and assets of the Company’s reportable segments.



	Offshore Marine Services $’000		Inland River Services $’000		Shipping Services $’000		ICP ⁽¹⁾⁽²⁾ $’000		Other $’000		Corporate and Eliminations $’000		Total $’000
For the year ended December 31, 2013
Operating Revenues:
External customers	567,148		212,726		194,184		193,682		79,532		—		1,247,272
Intersegment	115		2,887		—		—		—		(3,002	)	—
	567,263		215,613		194,184		193,682		79,532		(3,002	)	1,247,272
Costs and Expenses:
Operating	382,045		152,527		117,283		184,649		75,254		(2,887	)	908,871
Administrative and general	60,279		15,410		22,073		2,031		6,296		35,259		141,348
Depreciation and amortization	65,424		28,461		31,299		5,797		378		3,159		134,518
	507,748		196,398		170,655		192,477		81,928		35,531		1,184,737
Gains on Asset Dispositions and Impairments, Net	28,664		6,555		240		—		1,907		141		37,507
Operating Income (Loss)	88,179		25,770		23,769		1,205		(489	)	(38,392	)	100,042
Other Income (Expense):
Derivative gains (losses), net	83		—		—		(2,078	)	210		(6,538	)	(8,323	)
Foreign currency losses, net	(2,209	)	(167	)	(14	)	—		(342	)	(619	)	(3,351	)
Other, net	3		—		760		—		12		(189	)	586
Equity in Earnings (Losses) of 50% or Less Owned Companies, Net of Tax	13,522		(7,626	)	(2,945	)	—		4,313		—		7,264
Segment Profit (Loss)	99,578		17,977		21,570		(873	)	3,704
Other Income (Expense) not included in Segment Profit													(21,322	)
Less Equity Earnings included in Segment Profit													(7,264	)
Income Before Taxes, Equity Earnings and Discontinued Operations													67,632

Capital Expenditures of Continuing Operations	111,517		37,360		43,713		1,115		385		1,811		195,901

As of December 31, 2013
Property and Equipment:
Historical cost	1,139,639		481,421		498,951		44,166		3,967		31,039		2,199,183
Accumulated depreciation	(471,590	)	(147,698	)	(223,667	)	(11,390	)	(662	)	(11,323	)	(866,330	)
	668,049		333,723		275,284		32,776		3,305		19,716		1,332,853
Construction in progress	102,452		28,855		11,324		738		113		—		143,482
	770,501		362,578		286,608		33,514		3,418		19,716		1,476,335
Investments, at Equity, and Advances to 50% or Less Owned Companies	99,160		55,411		197,145		—		89,137		—		440,853
Inventories	6,315		2,279		1,329		16,172		1,520		—		27,615
Goodwill	13,367		2,766		1,852		—		—		—		17,985
Intangible Assets	3,650		7,568		859		7		339		—		12,423
Other current and long-term assets, excluding cash and near cash assets ⁽³⁾	149,239		69,267		15,097		5,409		47,584		28,785		315,381
Segment Assets	1,042,232		499,869		502,890		55,102		141,998
Cash and near cash assets ⁽³⁾													825,641
Total Assets													3,116,233

______________________


(1)	Operating revenues includes $189.5 million of tangible product sales and operating expenses includes $180.5 million of costs of goods sold.


(2)	Inventories include raw materials of $1.8 million and work in process of $1.8 million .


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

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	Offshore Marine Services $’000		Inland River Services $’000		Shipping Services $’000		ICP ⁽¹⁾⁽²⁾ $’000		Other $’000		Corporate and Eliminations $’000		Total $’000
For the year ended December 31, 2012
Operating Revenues:
External customers	519,707		224,409		179,928		188,650		195,603		—		1,308,297
Intersegment	110		2,152		108		—		128		(2,498	)	—
	519,817		226,561		180,036		188,650		195,731		(2,498	)	1,308,297
Costs and Expenses:
Operating	349,680		158,596		112,125		183,442		175,957		(2,331	)	977,469
Administrative and general	59,253		15,924		22,553		1,920		23,824		43,269		166,743
Depreciation and amortization	61,542		28,270		30,635		5,757		2,874		2,589		131,667
	470,475		202,790		165,313		191,119		202,655		43,527		1,275,879
Gains (Losses) on Asset Dispositions and Impairments, Net	14,876		7,666		3,128		—		(1,527	)	(156	)	23,987
Operating Income (Loss)	64,218		31,437		17,851		(2,469	)	(8,451	)	(46,181	)	56,405
Other Income (Expense):
Derivative gains (losses), net	(243	)	—		—		(856	)	910		(2,623	)	(2,812	)
Foreign currency gains, net	1,077		84		6		—		2		462		1,631
Other, net	2		(1	)	7,452		—		—		(305	)	7,148
Equity in Earnings (Losses) of 50% or Less Owned Companies, Net of Tax	5,214		(3,310	)	(4,148	)	6,154		(9,674	)	—		(5,764	)
Segment Profit (Loss)	70,268		28,210		21,161		2,829		(17,213	)
Other Income (Expense) not included in Segment Profit													(7,800	)
Less Equity Losses included in Segment Profit													5,764
Income Before Taxes, Equity Earnings and Discontinued Operations													54,572

Capital Expenditures of Continuing Operations	168,778		28,818		31,235		96		6,576		3,847		239,350

As of December 31, 2012
Property and Equipment:
Historical cost	1,158,169		491,653		506,054		43,789		8,276		30,442		2,238,383
Accumulated depreciation	(422,564	)	(127,112	)	(198,943	)	(5,679	)	(398	)	(9,107	)	(763,803	)
	735,605		364,541		307,111		38,110		7,878		21,335		1,474,580
Construction in progress	66,088		11,122		29,972		—		3,040		74		110,296
Property and Equipment	801,693		375,663		337,083		38,110		10,918		21,409		1,584,876
Investments, at Equity, and Advances to 50% or Less Owned Companies	66,805		53,844		67,023		—		84,863		—		272,535
Inventories	6,779		2,623		1,728		11,770		2,887		—		25,787
Goodwill	13,367		2,759		1,852		—		—		—		17,978
Intangible Assets	4,086		9,214		1,410		93		502		—		15,305
Other current and long-term assets, excluding cash and near cash assets ⁽³⁾	139,757		75,661		14,183		6,533		72,123		33,393		341,650
Segment Assets	1,032,487		519,764		423,279		56,506		171,293
Cash and near cash assets ⁽³⁾													493,786
Discontinued operations													948,877
Total Assets													3,700,794

______________________


(1)	Operating revenues includes $184.9 million of tangible product sales and operating expenses includes $185.1 million of costs of goods sold.


(2)	Inventories include raw materials of $2.4 million and work in process of $1.8 million .


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

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	Offshore Marine Services $’000		Inland River Services $’000		Shipping Services $’000		ICP $’000		Other $’000		Corporate and Eliminations $’000		Total $’000
For the year ended December 31, 2011
Operating Revenues:
External customers	376,692		187,657		161,307		—		306,841		—		1,032,497
Intersegment	96		—		—		—		26		(122	)	—
	376,788		187,657		161,307		—		306,867		(122	)	1,032,497
Costs and Expenses:
Operating	269,203		119,499		90,708		—		266,168		(25	)	745,553
Administrative and general	47,201		11,339		18,301		256		19,370		35,305		131,772
Depreciation and amortization	48,477		23,494		30,214		—		2,830		1,858		106,873
	364,881		154,332		139,223		256		288,368		37,138		984,198
Gains (Losses) on Asset Dispositions and Impairments, Net	14,661		2,964		1,355		—		3		(144	)	18,839
Operating Income (Loss)	26,568		36,289		23,439		(256	)	18,502		(37,404	)	67,138
Other Income (Expense):
Derivative losses, net	—		—		—		—		(980	)	(29,075	)	(30,055	)
Foreign currency gains (losses), net	(3,102	)	—		(30	)	—		277		3,395		540
Other, net	278		4		307		—		950		(521	)	1,018
Equity in Earnings (Losses) of 50% or Less Owned Companies, Net of Tax	9,189		4,136		(74	)	(1,815	)	(1,528	)	—		9,908
Segment Profit (Loss)	32,933		40,429		23,642		(2,071	)	17,221
Other Income (Expense) not included in Segment Profit													(34,872	)
Less Equity Earnings included in Segment Profit													(9,908	)
Income Before Taxes, Equity Earnings and Discontinued Operations													3,769

Capital Expenditures of Continuing Operations	88,248		44,693		24,308		—		4,972		3,043		165,264

As of December 31, 2011
Property and Equipment
Historical cost	943,108		474,618		524,398		—		18,610		25,997		1,986,731
Accumulated depreciation	(372,213	)	(104,768	)	(175,978	)	—		(3,002	)	(9,592	)	(665,553	)
	570,895		369,850		348,420		—		15,608		16,405		1,321,178
Construction in progress	83,924		13,442		18,055		—		314		3,744		119,479
	654,819		383,292		366,475		—		15,922		20,149		1,440,657
Investments, at Equity, and Advances to 50% or Less Owned Companies	68,330		50,183		12,284		11,790		56,903		—		199,490
Inventories	6,449		2,422		1,671		—		2,416		—		12,958
Goodwill	13,367		4,345		1,852		—		37,138		—		56,702
Intangible Assets	5,971		7,324		1,945		—		6,288		—		21,528
Other current and long-term assets, excluding cash and near cash assets ⁽¹⁾	125,472		72,565		14,131		8		137,008		29,014		378,198
Segment Assets	874,408		520,131		398,358		11,798		255,675
Cash and near cash assets ⁽¹⁾													729,635
Discontinued operations													1,088,966
Total Assets													3,928,134

______________________


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

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In the years ended December 31, 2013 , 2012 and 2011 , the Company did not earn revenues that were greater than or equal to 10% of total revenues from a single customer. For the years ended December 31, 2013 , 2012 and 2011 , approximately 32% , 37% and 50% , respectively, of the Company’s operating revenues were derived from its foreign operations. The Company’s foreign revenues are primarily derived from its Offshore Marine Services fleet and certain of its Inland River and Shipping Services fleets. These assets are highly mobile and regularly and routinely move between countries within a geographical region of the world. In addition, these assets may be redeployed among the geographical regions as changes in market conditions dictate. Because of this asset mobility, revenues and long-lived assets, primarily property and equipment, in any one country are not considered material. The following represents the Company’s revenues attributed by geographical region in which services are provided to customers for the years ended December 31 (in thousands):



	2013		2012		2011
Operating Revenues:
United States	$	845,056	$	823,693	$	517,120
Africa, primarily West Africa	79,991		75,484		75,497
Europe, primarily North Sea	101,834		107,766		79,210
Asia	26,203		21,039		15,973
Middle East	51,930		49,941		46,724
Brazil, Mexico, Central and South America	142,258		229,986		297,536
Other	—		388		437
	$	1,247,272	$	1,308,297	$	1,032,497

The Company’s long-lived assets are primarily its property and equipment that are employed in various geographical regions of the world. The following represents the Company’s property and equipment based upon the assets’ physical location as of December 31 (in thousands):



	2013		2012		2011
Property and Equipment:
United States	$	1,094,370	$	1,158,038	$	986,404
Africa, primarily West Africa	73,137		77,860		89,166
Europe, primarily North Sea	93,713		97,631		96,716
Asia	21,485		25,305		25,542
Middle East	61,134		99,863		70,431
Brazil, Mexico, Central and South America	132,496		126,179		172,398
	$	1,476,335	$	1,584,876	$	1,440,657



16.	DISCONTINUED OPERATIONS

On March 16, 2012, SEACOR completed the SES Business Transaction for a net sales price of $99.9 million and recognized a gain of $18.6 million , net of tax, or $0.90 per diluted share. During the year ended December 31, 2013, the final working capital settlements were completed resulting in a $1.0 million reduction of the gain, net of tax. The SES Business included NRC, one of the largest providers of oil spill response services in the United States; NRC Environmental Services Inc., a leading provider of environmental and industrial services on the West Coast of the United States; SEACOR Response Ltd., which provides oil spill response and emergency response services to customers in international markets; and certain other subsidiaries. As a result of the sale, the Company disposed of $8.0 million of goodwill.

On December 31, 2012, SEACOR sold SEI, the Company's energy commodity and logistics business, to Par Petroleum Corporation for a net sales price of $15.1 million and recognized a gain of $7.1 million , net of tax, or $0.34 per diluted share. During the year ended December 31, 2013, the final working capital settlements were completed resulting in a $0.1 million reduction of the gain, net of tax.

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On January 31, 2013, the Company completed the Spin-off of Era Group, the company that operated SEACOR's Aviation Services business segment, by means of a dividend to SEACOR's shareholders of all the issued and outstanding common stock of Era Group. Era Group filed a Registration Statement on Form 10 with the SEC, describing the Spin-off, that was declared effective on January 14, 2013. Prior to the Spin-off, SEACOR and Era Group entered into a Distribution Agreement and several other agreements that will govern the post-Spin-off relationship. Era Group is now an independent company whose common stock is listed on the New York Stock Exchange under the symbol "ERA." During the year ended December 31, 2013, the Company made a determination to provide for income taxes of $10.1 million relating to the spin-off of Era Group effective as of January 31, 2013, the date of the spin-off.

For all periods presented herein, the Company has reported the historical financial position, results of operations and cash flows of the SES Business, SEI and Era Group as discontinued operations. Summarized selected operating results of the discontinued operations for the years ended December 31 were as follows (in thousands):



	2013			2012			2011
SES Business
Operating Revenues	$	—		$	22,387		$	131,346
Costs and Expenses:
Operating	—			18,234			90,267
Administrative and general	—			4,624			20,674
Depreciation and amortization	—			1,428			7,332
	—			24,286			118,273
Losses on Asset Dispositions	—			(71		)	(61		)
Operating Income (Loss)	—			(1,970		)	13,012
Other Income (Expense), Net (including gain on sale of business)	(1,537		)	24,971			203
Income Tax (Expense), Net	538			(6,342		)	(5,659		)
Equity in Earnings (Losses) of 50% or Less Owned Companies	—			301			(49		)
Net Income (Loss)	$	(999	)	$	16,960		$	7,507
SEI
Operating Revenues	$	—		$	515,468		$	731,164
Costs and Expenses:
Operating	—			503,294			720,791
Administrative and general	—			5,579			3,290
Depreciation and amortization	—			(3		)	7
	—			508,870			724,088
Operating Income	—			6,598			7,076
Other Income (Expense), Net (including gain on sale of business)	(143		)	8,083			(5,335		)
Income Tax (Expense), Net	50			(4,856		)	(913		)
Net Income (Loss)	$	(93	)	$	9,825		$	828
Era Group
Operating Revenues	$	22,892		$	272,921		$	258,148
Costs and Expenses:
Operating	14,076			167,195			162,707
Administrative and general	2,653			34,785			31,893
Depreciation and amortization	3,875			42,502			42,612
	20,604			244,482			237,212
Gains on Asset Dispositions	548			3,612			15,172
Operating Income	2,836			32,051			36,108
Other Income (Expense), Net	(1,316		)	(9,478		)	(1,439		)
Income Tax (Expense), Net	(10,818		)	(7,998		)	(11,303		)
Equity in Earnings (Losses) of 50% or Less Owned Companies	65			(5,528		)	82
Net Income	$	(9,233	)	$	9,047		$	23,448
Eliminations
Operating Revenues	$	—		$	(109,941	)	$	(11,213	)
Costs and Expenses:
Operating	—			(109,938		)	(11,131		)
Administrative and general	—			(3		)	(82		)
	—			(109,941		)	(11,213		)
Operating Income	$	—		$	—		$	—

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17.	SUPPLEMENTAL INFORMATION FOR STATEMENTS OF CASH FLOWS

Supplemental information for the years ended December 31 was as follows (in thousands):



	2013		2012		2011
Income taxes paid	$	4,285	$	24,378	$	8,398
Income taxes refunded	2,739		11,317		2,499
Interest paid, excluding capitalized interest	32,388		46,457		39,559
Schedule of Non-Cash Investing and Financing Activities:
Distribution of Era Group stock to shareholders	415,209		—		—
Marketable securities reclassified to investment in Trailer Bridge (see Note 5)	—		48,064		—
Company financed sale of vessels	10,263		48,848		11,889
Contribution of assets to 50% or less owned companies	—		15,123		12,361
Issuance of Common Stock on Windcat Acquisition (See Note 4)	—		585		—
Contribution of assets from noncontrolling interests	—		—		124

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18.	QUARTERLY FINANCIAL INFORMATION (UNAUDITED)

Selected financial information for interim quarterly periods is presented below (in thousands, except share data). Earnings per common share of SEACOR Holdings Inc. are computed independently for each of the quarters presented and the sum of the quarterly earnings per share may not necessarily equal the total for the year.



	Three Months Ended
	Dec. 31,			Sept. 30,		June 30,			March 31,			March 31,
2013									(As Restated) ⁽¹⁾			(As Reported) ⁽¹⁾
Operating Revenues	$	327,861		$	336,784	$	315,563		$	267,064		$	267,064
Operating Income	30,307			51,508		19,254			(1,027		)	(1,027		)
Income (Loss) from Continuing Operations	9,120			30,769		19,296			(11,036		)	(11,036		)
Loss from Discontinued Operations, Net of Tax	—			—		—			(10,325		)	(211		)
Net Income (Loss)	9,120			30,769		19,296			(21,361		)	(10,874		)
Net Income (Loss) attributable to SEACOR Holdings Inc.:
Continuing Operations	$	8,396		$	30,291	$	19,271		$	(10,763	)	$	(10,763	)
Discontinued Operations	—			—		—			(10,225		)	(111		)
	$	8,396		$	30,291	$	19,271		$	(20,988	)	$	(10,874	)
Basic Earnings (Loss) Per Common Share of SEACOR Holdings Inc.:
Continuing Operations	$	0.42		$	1.52	$	0.97		$	(0.55	)	$	(0.55	)
Discontinued Operations	—			—		—			(0.51		)	—
	$	0.42		$	1.52	$	0.97		$	(1.06	)	$	(0.55	)
Diluted Earnings (Loss) Per Common Share of SEACOR Holdings Inc.:
Continuing Operations	$	0.41		$	1.36	$	0.91		$	(0.55	)	$	(0.55	)
Discontinued Operations	—			—		—			(0.51		)	—
	$	0.41		$	1.36	$	0.91		$	(1.06	)	$	(0.55	)

	Three Months Ended
	Dec. 31,			Sept. 30,		June 30,			March 31,
2012
Operating Revenues	$	362,368		$	338,855	$	309,225		$	297,849
Operating Income (Loss)	9,332			20,058		(1,499		)	28,514
Income (Loss) from Continuing Operations	(12,295		)	9,239		6,495			21,188
Income from Discontinued Operations, Net of Tax	9,578			6,265		4,804			15,185
Net Income (Loss)	(2,717		)	15,504		11,299			36,373
Net Income (Loss) attributable to SEACOR Holdings Inc.:
Continuing Operations	$	(12,242	)	$	9,837	$	6,445		$	21,303
Discontinued Operations	9,618			6,265		4,804			15,185
	$	(2,624	)	$	16,102	$	11,249		$	36,488
Basic Earnings (Loss) Per Common Share of SEACOR Holdings Inc.:
Continuing Operations	$	(0.61	)	$	0.48	$	0.31		$	1.04
Discontinued Operations	0.48			0.31		0.24			0.74
	$	(0.13	)	$	0.79	$	0.55		$	1.78
Diluted Earnings (Loss) Per Common Share of SEACOR Holdings Inc.:
Continuing Operations	$	(0.61	)	$	0.47	$	0.31		$	1.02
Discontinued Operations	0.48			0.31		0.23			0.73
	$	(0.13	)	$	0.78	$	0.54		$	1.75

______________________

(1)

During the fourth quarter of 2013, the Company made a determination to provide for income taxes of $10.1 million relating to the spin-off of Era Group effective as of January 31, 2013, the date of the spin-off. As a result, the Company has restated its results from discontinued operations for the quarter ended March 31, 2013 in the table included herein. For the quarter ended March 31, 2013, the Company now reports a net loss of $21.0 million , or $1.06 per diluted share, compared with a previously reported net loss of $10.9 million , or $0.55 per diluted share, and now reports a net loss from discontinued operations of $10.2 million , or $0.51 per diluted share, compared with a previously reported net loss from discontinued operations of $0.1 million . Net loss from continuing operations of $10.8 million , or $0.55 per diluted share, remains as previously reported.

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SEACOR HOLDINGS INC.

SCHEDULE II – VALUATION AND QUALIFYING ACCOUNTS

For the Years Ended December 31, 2013 , 2012 and 2011

(in thousands)



Description	Balance Beginning of Year		Charges (Credits) to Cost and Expenses			Deductions ⁽¹⁾			Other ⁽²⁾		Balance End of Year
Year Ended December 31, 2013
Allowance for doubtful accounts (deducted from trade and notes receivable)	$	1,201	$	170		$	(209	)	$	—	$	1,162
Inventory allowance (deducted from inventory)	$	1,327	$	(406	)	$	—		$	—	$	921
Year Ended December 31, 2012
Allowance for doubtful accounts (deducted from trade and notes receivable)	$	2,355	$	1,311		$	(2,736	)	$	271	$	1,201
Inventory allowance (deducted from inventory)	$	—	$	971		$	—		$	356	$	1,327
Year Ended December 31, 2011
Allowance for doubtful accounts (deducted from trade and notes receivable)	$	4,196	$	(56	)	$	(1,785	)	$	—	$	2,355

______________________


(1)	Trade receivable amounts deemed uncollectible that were removed from accounts receivable and allowance for doubtful accounts.


(2)	Valuation allowances of ICP at the time of initial consolidation.

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EXHIBIT INDEX



Exhibit Number		Description
2.1*		Distribution Agreement, dated January 31, 2013, by and between SEACOR Holdings Inc. and Era Group Inc. (incorporated herein by reference to Exhibit 10.1 of the Company's Current Report on Form 8-K filed with the Commission on February 1, 2013).
3.1*		Restated Certificate of Incorporation of SEACOR Holdings, Inc. (incorporated herein by reference to Exhibit 3.1 (a) of the Company’s Quarterly Report on Form 10-Q for the fiscal quarter ended March 31, 1997 and filed with the Commission on May 15, 1997).
3.2*		Certificate of Amendment to the Restated Certificate of Incorporation of SEACOR Holdings, Inc. (incorporated herein by reference to Exhibit 3.1(b) of the Company’s Quarterly Report on Form 10-Q for the fiscal quarter ended March 31, 1997 and filed with the Commission on May 15, 1997).
3.3*		Certificate of Amendment to the Restated Certificate of Incorporation of SEACOR Holdings Inc. (incorporated herein by reference to Exhibit 4.4 of the Company’s Registration Statement on Form S-8 (No. 333-126613) filed with the Commission on July 15, 2005).
3.4*		Fifth Amended and Restated Bylaws of SEACOR Holdings Inc. (incorporated herein by reference to Exhibit 3.1 of the Company’s Current Report on Form 8-K filed with the Commission on June 28, 2013).
4.1*		Supplemental Indenture, dated September 24, 2009, between SEACOR Holdings Inc. and U.S. Bank, National Association, as trustee (including therein Form of Global Note 7.375% Senior Notes Due 2019) (incorporated herein by reference to Exhibit 4.1 of the Company's Current Report on Form 8-K filed with the Commission on September 24, 2009).
4.2*		Indenture, dated as of December 11, 2012, between SEACOR Holdings Inc. and Wells Fargo Bank, National Association, as trustee (including therein Form of 2.5% Convertible Senior Notes Due 2027) (incorporated herein by reference to Exhibit 4.5 of the Company's Annual Report on Form 10-K for the fiscal year ended December 31, 2012 originally filed with the Commission on February 28, 2013 and as amended and filed with the Commission on May 6, 2013).
4.3		Indenture dated as of November 13, 2013, between SEACOR Holdings Inc. and Wells Fargo Bank, National Association, as trustee (including therein Form of 3.00% Convertible Senior Notes due 2028).
10.1*		Form of Management Agreement (incorporated herein by reference to Exhibit 10.4 of the Company’s Current Report on Form 8-K filed with the Commission on December 24, 1996).
10.2*		License Agreement, dated December 19, 1996, between SEACOR Holdings Inc., certain subsidiaries of SEACOR Holdings Inc. and Smit Intenationale N.V. (incorporated herein by reference to Exhibit 10.6 of the Company’s Current Report on Form 8-K filed with the Commission on December 24, 1996).
10.3*+		SEACOR SMIT Inc. 2003 Non-Employee Director Share Incentive Plan (incorporated herein by reference to Exhibit 10.25 of the Company’s Annual Report on Form 10-K for the fiscal year ended December 31, 2003 filed with the Commission on March 15, 2004).
10.4*+		SEACOR SMIT Inc. 2003 Share Incentive Plan (incorporated herein by reference to Exhibit 10.26 of the Company’s Annual Report on Form 10-K for the fiscal year ended December 31, 2003 filed with the Commission on March 15, 2004).
10.5*+		Form of Option Agreement for Officers and Key Employees Pursuant to the SEACOR Holdings Inc. 2003 Share Incentive Plan (incorporated herein by reference to Exhibit 10.1 of the Company’s Current Report on Form 8-K filed with the Commission on November 24, 2004).
10.6*		Form of Warrant Exchange Agreement (incorporated herein by reference to Exhibit 10.32 of the Company’s Registration Statement (No. 333-124232) on Form S-4/A filed with the Commission on May 25, 2005).
10.7*+		SEACOR Nonqualified Deferred Compensation Plan, dated as of October 15, 2005 (incorporated herein by reference to Exhibit 99.1 of the Company’s Current Report on Form 8-K filed with the Commission on October 28, 2005).
10.8*		Revolving Credit Facility Agreement, dated November 3, 2006, between SEACOR Holdings Inc. as Borrower, and DNB Nor Bank ASA, as Agent (incorporated herein by reference to Exhibit 10.1 of the Company's Quarterly Report on Form 10-Q for the fiscal quarter ended September 30, 2006 filed with the Commission on November 7, 2006).
10.9*+		SEACOR Holdings Inc. 2007 Share Incentive Plan (incorporated herein by reference to Annex A of the Company’s Proxy Statement on DEF 14-A filed with the Commission on April 13, 2007).
10.10*		Amendment No. 1, dated July 3, 2007, to Revolving Credit Facility Agreement dated as of November 3, 2006 (incorporated herein by reference to Exhibit 10.1 of the Company’s Current Report on Form 8-K filed with the Commission on July 10, 2007).
10.11*+		Form of Non-Employee Director Annual Share Incentive Grant Agreement (incorporated herein by reference to Exhibit 10.1 of the Company’s Current Report on Form 8-K filed with the Commission on May 8, 2008).

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Exhibit Number		Description
10.12*+		Form of Stock Option Grant Agreement for Officers and Key Employees Pursuant to the SEACOR Holdings Inc. 2007 Share Incentive Plan (incorporated herein by reference to Exhibit 10.2 of the Company’s Current Report on Form 8-K filed with the Commission on May 8, 2008).
10.13*+		Form of Restricted Stock Grant Agreement (incorporated herein by reference to Exhibit 10.3 of the Company’s Current Report on Form 8-K filed with the Commission on May 8, 2008).
10.14*+		SEACOR Holdings Inc. 2009 Employee Stock Purchase Plan effective March 11, 2009 (incorporated herein by reference to Appendix A of the Company’s Proxy Statement on DEF 14-A filed with the Commission on April 7, 2009).
10.15*+		SEACOR Holdings Inc. 2007 Share Incentive Plan (as amended through March 11, 2009) (incorporated herein by reference to Appendix B of the Company’s Proxy Statement on DEF 14-A filed with the Commission on April 7, 2009).
10.16*+		SEACOR Holdings Inc. Management Incentive Plan (incorporated herein by reference to Appendix C of the Company’s Proxy Statement on DEF 14-A filed with the Commission on April 7, 2009).
10.17*+		Form of Restricted Stock Grant Agreement Pursuant to the SEACOR Holdings Inc. Amended 2007 Share Incentive Plan (incorporated herein by reference to Exhibit 10.31 of the Company’s Annual Report on Form 10-K for the fiscal year ended December 31, 2010 filed with the Commission on February 25, 2011).
10.18*+		SEACOR Holdings Inc. 2007 Share Incentive Plan (as amended through April 23, 2012) (incorporated herein by reference to Appendix A of the Company's Proxy Statement on DEF 14-A filed with the Commission on April 30, 2012).
10.19*+		Form of Stock Option Grant Agreement for Officers and Key Employees Pursuant to the SEACOR Holdings Inc. Amended 2007 Share Incentive Plan (incorporated herein by reference to Exhibit 10.1 of the Company's Current Report on Form 8-K filed with the Commission on March 6, 2013).
10.20*		Form of Indemnification Agreement for Directors and Executive Officers (incorporated herein by reference to Exhibit 10.1 of the Company's Current Report on Form 8-K filed with the Commission on July 10, 2013).
10.21*		Contract for Construction of Two Vessels for Seabulk Tankers, Inc. by National Steel and Shipbuilding Company dated September 10, 2013 (filed in redacted form pursuant to a request for confidential treatment for certain provisions thereof pursuant to Rule 24b-2 of the Securities Exchange Act of 1934, as amended, which request was granted by order of the Commission on January 17, 2014) (incorporated herein by reference to Exhibit 10.1 of the Company's Quarterly Report on Form 10-Q for the fiscal quarter ended September 30, 2013 filed with the Commission on October 28, 2013).
10.22		Amendment 1 to the Contract for Construction of Two Vessels for Seabulk Tankers, Inc. by National Steel and Shipbuilding Company dated October 21, 2013 (filed in redacted form pursuant to a request for confidential treatment for certain provisions thereof pursuant to Rule 24b-2 of the Securities Exchange Act of 1934, as amended; these provisions have been submitted separately to the Commission).
10.23		Amendment 2 to the Contract for Construction of Two Vessels for Seabulk Tankers, Inc. by National Steel and Shipbuilding Company dated effective as of November 11, 2013 (filed in redacted form pursuant to a request for confidential treatment for certain provisions thereof pursuant to Rule 24b-2 of the Securities Exchange Act of 1934, as amended; these provisions have been submitted separately to the Commission) .
10.24*		Amended and Restated Transition Services Agreement, dated January 31, 2013, by and between SEACOR Holdings Inc. and Era Group Inc. (incorporated herein by reference to Exhibit 10.2 of the Company's Current Report on Form 8-K filed with the commission on February 1, 2013).
10.25*		Tax Matters Agreement, dated January 31, 2013, by and between SEACOR Holdings Inc. and Era Group Inc. (incorporated herein by reference to Exhibit 10.3 of the Company's Current Report on Form 8-K filed with the commission on February 1, 2013).
10.26*		Employee Matters Agreement, dated January 31, 2013, by and between SEACOR Holdings Inc. and Era Group Inc. (incorporated herein by reference to Exhibit 10.4 of the Company's Current Report on Form 8-K filed with the commission on February 1, 2013).
10.27*		Purchase Agreement dated November 6, 2013, by and among SEACOR Holdings Inc. and Goldman, Sachs & Co., as representative of the Initial Purchasers named in Schedule I thereto (incorporated herein by reference to Exhibit 10.1 of the Company's Current Report on Form 8-K filed with the Commission on November 13, 2013).
10.28+		Compensation Arrangements for the Executive Officers.
10.29+		Compensation of Non-Employee Directors.
21.1		List of Registrant’s Subsidiaries.
23.1		Consent of Independent Registered Public Accounting Firm.
31.1		Certification by the Principal Executive Officer Pursuant to Rule 13a-14(a) or Rule 15d-14(a) of the Exchange Act.

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Exhibit Number		Description
31.2		Certification by the Principal Financial Officer Pursuant to Rule 13a-14(a) or Rule 15d-14(a) of the Exchange Act.
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



*	Incorporated herein by reference as indicated.



+	Management contracts or compensatory plans or arrangements required to be filed as an Exhibit pursuant to Item 15 (b) of the rules governing the preparation of this Annual Report on Form 10-K.



**	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.

139

EXECUTION VERSION

Exhibit 4.3

SEACOR Holdings Inc.

(Company)

WELLS FARGO BANK, NATIONAL ASSOCIATION

(Trustee)

3.00% Convertible Senior Notes due 2028

INDENTURE

Dated as of November 13, 2013

ARTICLE 1. DEFINITIONS AND OTHER PROVISIONS OF GENERAL APPLICATION 1

Section 1.01 Definitions 1

Section 1.02 References to Interest 14

Section 1.03 Acts of Holders 15

ARTICLE 2. THE NOTES 16

Section 2.01 Title and Terms; Payments 16

Section 2.02 Ranking 17

Section 2.03 Denominations 17

Section 2.04 Execution, Authentication, Delivery and Dating 17

Section 2.05 Temporary Notes 18

Section 2.06 Registration; Registration of Transfer and Exchange 18

Section 2.07 Transfer Restrictions 20

Section 2.08 Expiration of Restrictions 22

Section 2.09 Mutilated, Destroyed, Lost and Stolen Notes 23

Section 2.10 Persons Deemed Owners 24

Section 2.11 Transfer and Exchange 24

Section 2.12 Cancellation 27

Section 2.13 CUSIP Numbers 28

Section 2.14 Payment and Computation of Interest 28

Section 2.15 Contingent Interest 28

Section 2.16 Business Day 30

Section 2.17 Tax Treatment 30

Section 2.18 Comparable Yield and Projected Payment Schedule 30

Section 2.19 Calculation of Original Issue Discount 30

ARTICLE 3. REPURCHASE AT THE OPTION OF THE HOLDERS 31

Section 3.01 Purchase at Option of Holders upon a Fundamental Change 31

Section 3.02 Fundamental Change Company Notice 31

Section 3.03 Repurchase at Option of Holders on Specified Purchase Dates 33

Section 3.04 Specified Date Purchase Company Notice 33

Section 3.05 Repurchase Procedures 34

Section 3.06 Effect of Fundamental Change Purchase Notice or Specified Date Purchase Notice 35

Section 3.07 Withdrawal of Fundamental Change Purchase Notice or Specified Date Purchase Notice 35

Section 3.08 Deposit of Fundamental Change Purchase Price 36

Section 3.09 Notes Purchased in Whole or in Part 36

Section 3.10 Covenant To Comply with Applicable Laws upon Purchase of Notes 37

Section 3.11 Repayment to the Company 37

ARTICLE 4. CONVERSION 37

Section 4.01 Right To Convert 37

Section 4.02 Conversion Procedures 40

Section 4.03 Settlement Upon Conversion 42

Section 4.04 Jones Act Restrictions on Conversions 44

Section 4.05 Adjustment of Conversion Rate 45

Section 4.06 Discretionary and Voluntary Adjustments 56

Section 4.07 Adjustment to Conversion Rate Upon Conversion in Connection with a Make-Whole Fundamental Change 57

Section 4.08 Effect of Recapitalization, Reclassification, Consolidation, Merger or Sale 58

Section 4.09 Certain Covenants 60

Section 4.10 Responsibility of Trustee 61

Section 4.11 Notice of Adjustment to the Trustee 61

Section 4.12 Notice to Holders 62

ARTICLE 5. COVENANTS 63

Section 5.01 Payment of Principal, Interest and Fundamental Change Purchase Price and the Specified Date Purchase Price 63

Section 5.02 Maintenance of Office or Agency 63

Section 5.03 Provisions as to Paying Agent 64

Section 5.04 Reports 66

Section 5.05 Statements as to Defaults 66

Section 5.06 Additional Interest Notice 67

Section 5.07 Compliance Certificate and Opinions of Counsel 67

Section 5.08 Additional Interest 68

Section 5.09 Corporate Existence 69

Section 5.10 Restriction on Resales 69

Section 5.11 Further Instruments and Acts 69

Section 5.12 Par Value Limitation 69

Section 5.13 Company to Furnish Trustee Names and Addresses of Holders 70

ARTICLE 6. REMEDIES 70

Section 6.01 Events of Default 70

Section 6.02 Acceleration; Rescission and Annulment 71

Section 6.03 Additional Interest 72

Section 6.04 Waiver of Past Defaults 74

Section 6.05 Control by Majority 74

Section 6.06 Limitation on Suits 74

Section 6.07 Rights of Holders to Receive Payment and to Convert 75

Section 6.08 Collection of Indebtedness; Suit for Enforcement by Trustee 75

Section 6.09 Trustee May Enforce Claims Without Possession of Notes 75

Section 6.10 Trustee May File Proofs of Claim 75

Section 6.11 Restoration of Rights and Remedies 76

Section 6.12 Rights and Remedies Cumulative 76

Section 6.13 Delay or Omission Not a Waiver 76

Section 6.14 Priorities 76

Section 6.15 Undertaking for Costs 77

Section 6.16 Waiver of Stay, Extension and Usury Laws 77

Section 6.17 Notices from the Trustee 77

ARTICLE 7. SATISFACTION AND DISCHARGE 78

Section 7.01 Discharge of Liability on Notes 78

Section 7.02 Deposited Monies to Be Held in Trust by Trustee 78

Section 7.03 Paying Agent to Repay Monies Held 78

Section 7.04 Return of Unclaimed Monies 79

Section 7.05 Reinstatement 79

ARTICLE 8. SUPPLEMENTAL INDENTURES 79

Section 8.01 Supplemental Indentures Without Consent of Holders 79

Section 8.02 Supplemental Indentures With Consent of Holders 80

Section 8.03 Notice of Amendment or Supplement 81

Section 8.04 Trustee to Sign Amendments, Etc 81

ARTICLE 9. SUCCESSOR COMPANY 82

Section 9.01 Company May Consolidate, Etc. on Certain Terms 82

Section 9.02 Successor Corporation to Be Substituted 83

Section 9.03 Opinion of Counsel to Be Given to Trustee 83

ARTICLE 10. OPTIONAL REDEMPTION 84

Section 10.01 Redemption Rights 84

Section 10.02 Redemption Price 84

Section 10.03 Redemption Notice 84

Section 10.04 Payment of Notes Called for Redemption 85

Section 10.05 Redemption in Part 86

Section 10.06 Restrictions on Redemption 86

ARTICLE 11. THE TRUSTEE 86

Section 11.01 Duties and Responsibilities of Trustee 86

Section 11.02 Notice of Defaults 88

Section 11.03 Reliance on Documents, Opinions, Etc. 88

Section 11.04 No Responsibility for Recitals, Etc. 89

Section 11.05 Trustee, Paying Agents, Exchange Agents or Registrar May Own Notes 90

Section 11.06 Monies to be Held in Trust 90

Section 11.07 Compensation and Expenses of Trustee 90

Section 11.08 Officer’s Certificate as Evidence 91

Section 11.09 Conflicting Interests of Trustee 91

Section 11.10 Eligibility of Trustee 91

Section 11.11 Resignation or Removal of Trustee 91

Section 11.12 Acceptance by Successor Trustee 93

Section 11.13 Succession by Merger, Etc. 93

Section 11.14 Preferential Collection of Claims 94

Section 11.15 Trustee’s Application for Instructions from the Company 94

ARTICLE 12. MISCELLANEOUS 94

Section 12.01 Effect on Successors and Assigns 94

Section 12.02 Governing Law 94

Section 12.03 No Note Interest Created 94

Section 12.04 Trust Indenture Act 94

Section 12.05 Benefits of Indenture 95

Section 12.06 Calculations 95

Section 12.07 Execution in Counterparts 95

Section 12.08 Notices, Etc. to Trustee and Company 95

Section 12.09 No Recourse Against Others 96

Section 12.10 Tax Withholding 96

Section 12.11 Waiver of Jury Trial 96

Section 12.12 U.S.A. Patriot Act 96

Section 12.13 Force Majeure 96

INDENTURE, dated as of November 13, 2013, between SEACOR Holdings Inc., a Delaware corporation, as issuer (the “ Company ”), and Wells Fargo Bank, National Association, a national banking association, as trustee (the “ Trustee ”).

RECITALS OF THE COMPANY

WHEREAS, the Company has duly authorized the creation of an issue of the Company’s 3.00% Convertible Senior Notes due 2028 (the “ Notes ”), having the terms, tenor, amount and other provisions hereinafter set forth, and, to provide therefor, has duly authorized the execution and delivery of this Indenture; and

WHEREAS, all things necessary to make the Notes, when duly executed by the Company and authenticated and delivered hereunder and duly issued by the Company, the legal, valid and binding obligations of the Company, in accordance with the terms of the Notes and this Indenture, have been done and performed, and the execution of this Indenture and the issue hereunder of the Notes have in all respects been duly authorized;

NOW, THEREFORE, THIS INDENTURE WITNESSETH, for and in consideration of the premises and the purchases of the Notes by the Holders thereof, it is mutually agreed, for the benefit of the Company and the equal and proportionate benefit of all Holders, as follows:

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ARTICLE 1 DEFINITIONS AND OTHER PROVISIONS OF GENERAL APPLICATION

Section 1.01 Definitions . The terms defined in this Section 1.01 (except as herein otherwise expressly provided or unless the context otherwise requires) for all purposes of this Indenture and of any indenture supplemental hereto shall have the respective meanings specified in this Section 1.01. The words “herein”, “hereof”, “hereunder” and words of similar import refer to this Indenture as a whole and not to any particular Article, Section or other Subdivision. The word “or” is not exclusive and the word “including” means including without limitation. The terms defined in this Article include the plural as well as the singular.

“ Act ” has the meaning specified in Section 1.03.

2 “ Additional Interest ” means all amounts, if any, payable pursuant to Section 5.08 and Section 6.03 hereof. Unless the context otherwise requires, all references in this Indenture to interest include Additional Interest, if any. Any express reference to Additional Interest in this Indenture shall not be construed as excluding Additional Interest in any other text where no such express reference is made.

3 “ Additional Notes ” means any Notes (other than the Initial Notes) issued under this Indenture in accordance with Section 2.01 hereof, with the same terms as the Initial Notes (other than the Issue Date, issue price and first Interest Payment Date for such Notes).

4 “ Additional Shares ” has the meaning specified in Section 4.06(a) hereof.

5 “ Affiliate ” of any specified Person means any other Person directly or indirectly controlling or controlled by or under direct or indirect common control with such specified Person. For the purposes of this definition, “control” when used with respect to any specified Person means the power to direct the management and policies of such Person, directly or indirectly, whether through the ownership of voting securities, by contract or otherwise; and the terms “controlling” and “controlled” have meanings correlative to the foregoing.

6 “ Agent Members ” has the meaning specified in Section 2.06(f) hereof.

7 “ Applicable Procedures ” means, with respect to any matter at any time, the policies and procedures of a Depositary, if any, that are applicable to such matter at such time.

8 “ Authenticating Agent ” means any Person authorized by the Trustee to act on behalf of the Trustee to authenticate Notes.

9 “ Authorized Officer ” means any person (whether designated by name or office) appointed by or pursuant to a Board Resolution for the purpose, or a particular purpose, of this Indenture, provided that written notice of such appointment shall have been given to the Trustee.

10 “ Averaging Period ” has the meaning specified in Section 4.05(e) hereof.

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11 “ Bid Solicitation Agent ” means the Person appointed by the Company, from time to time, to solicit secondary market bid quotations for the Trading Price of the Notes in accordance with Section 2.15 hereof or Section 4.01(b)(2) hereof, as the case may be.

12 “ Board of Directors ” means either the board of directors of the Company or any duly authorized committee of that board.

13 “ Board Resolution ” when used with reference to the Company means a copy of a resolution certified by the Secretary or an Assistant Secretary of the Company to have been duly adopted by the Board of Directors and to be in full force and effect on the date of such certification, and delivered to the Trustee.

14 “ Business Day ” means any day other than a Saturday, a Sunday or a day on which the Federal Reserve Bank of New York is authorized or required by law or executive order to close or to be closed.

15 “ Capital Stock ” means, for any Person, any and all shares, interests, rights to purchase, warrants, options, participations or other equivalents of or interests in (however designated) the equity of such Person, but excluding any debt securities convertible into such equity.

16 “ Cash Settlement ” has the meaning specified in Section 4.03(a) hereof.

17 “ Clause A Distribution ” has the meaning specified in Section 4.05(c) hereof.

18 “ Clause B Distribution ” has the meaning specified in Section 4.05(c) hereof.

19 “ Clause C Distribution ” has the meaning specified in Section 4.05(c) hereof.

20 “ Close of Business ” means 5:00 p.m., New York City time.

21 “ Combination Settlement ” has the meaning specified in Section 4.03(a) hereof.

22 “ Commission ” means the Securities and Exchange Commission, as from time to time constituted, created under the Exchange Act, or, if at any time after the execution of this indenture such Commission is not existing and performing the duties now assigned to it under the Trust Indenture Act, then the body performing such duties at such time.

23 “ Common Equity ” of any Person means the Capital Stock of such Person that is generally entitled (a) to vote in the election of directors of such Person or (b) if such Person is not a corporation, to vote or otherwise participate in the selection of the governing body, partners, managers or others that will control the management or policies of such Person.

24 “ Common Stock ” means the shares of common stock, par value $0.01 per share, of the Company authorized at the date of this instrument as originally executed or shares of any class or classes of common stock resulting from any reclassification or reclassifications thereof; provided , however , that if at any time there shall be more than one such resulting class, the

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shares so issuable on conversion of Notes shall include shares of all such classes, and the shares of each such class then so issuable shall be substantially in the proportion which the total number of shares of such class resulting from all such reclassifications bears to the total number of shares of all such classes resulting from all such reclassifications.

25 “ common stock ” includes any stock of any class of Capital Stock which has no preference in respect of dividends or of amounts payable in the event of any voluntary or involuntary liquidation, dissolution or winding up of the issuer thereof and which is not subject to redemption by the issuer thereof.

26 “ Company ” has the meaning specified in the first paragraph of this Indenture, and subject to the provisions of Article 9, shall include its successors and assigns.

27 “ Company Order ” means a written request or order signed in the name of the Company (a) by its Chief Executive Officer, its President, its Chief Financial Officer, any of its Vice Presidents, its Treasurer, any Assistant Treasurer, its Secretary, any Assistant Secretary or any of its Vice Presidents or (b) any director of the Board of Directors, and in each case delivered to the Trustee.

28 “ Contingent Debt Regulations ” has the meaning specified in Section 2.17(a) hereof.

29 “ Contingent Interest ” has the meaning specified in Section 2.15 hereof.

30 “ Conversion Agent ” has the meaning specified in Section 5.02 hereof.

31 “ Conversion Date ” has the meaning specified in Section 4.02(b) hereof.

32 “ Conversion Notice ” has the meaning specified in Section 4.02(b) hereof.

33 “ Conversion Price ” means, in respect of each Note, as of any date, $1,000 divided by the Conversion Rate in effect on such date.

34 “ Conversion Rate ” means initially 7.9362 shares of Common Stock per $1,000 principal amount of Notes, subject to adjustment as set forth herein.

35 “ Corporate Trust Office ” means, with respect to the office of the Trustee, the designated corporate trust office of the Trustee, at which at any particular time its corporate trust business shall be principally administered, which office at the date hereof is located at Wells Fargo Bank, National Association, 625 Marquette Avenue, 11th Floor, MAC N9311-115, Minneapolis, MN 55479; Attn: SEACOR Holdings Inc. Account Manager, or such other address as the Trustee may designate from time to time by notice to the Holders and the Company, or the principal corporate trust office of any successor Trustee (or such other address as such successor Trustee may designate from time to time by notice to the Holders and the Company).

36 “ corporation ” means a corporation, association, joint stock company, limited liability company or business trust.

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37 “ Custodian ” means the Trustee, as custodian with respect to the Notes (so long as the Notes constitute Global Notes), or any successor entity.

38 “ Daily Conversion Value ” means, for each of the 50 consecutive VWAP Trading Days during any Observation Period, one-fiftieth (1/50th) of the product of (i) the Conversion Rate in effect on such VWAP Trading Day and (ii) the Daily VWAP on such VWAP Trading Day.

39 “ Daily Measurement Value ” means the Specified Dollar Amount divided by 50.

40 “ Daily Settlement Amount ” shall consist of, for each $1,000 principal amount of Notes for each of the 50 consecutive VWAP Trading Days during the Observation Period, (i) cash equal to the lesser of (A) the Daily Measurement Value and (B) the Daily Conversion Value; and (ii) if the Daily Conversion Value exceeds the Daily Measurement Value, a number of shares of Common Stock equal to (A) the difference between the Daily Conversion Value and the Daily Measurement Value, divided by (B) the Daily VWAP for such VWAP Trading Day.

41 “ Daily VWAP ” means, for each of the 50 consecutive VWAP Trading Days during the applicable Observation Period, the per share volume-weighted average price as displayed under the heading “Bloomberg VWAP” on Bloomberg page “CKH <equity> AQR” (or its equivalent successor if such page is not available) in respect of the period from the scheduled open of trading until the scheduled close of trading of the primary trading session on such VWAP Trading Day (or if such volume-weighted average price is unavailable, the market value of one share of the Common Stock on such VWAP Trading Day determined, using a volume-weighted average method, by a nationally recognized independent investment banking firm retained for this purpose by the Company). The “Daily VWAP” will be determined without regard to after-hours trading or any other trading outside of the regular trading session trading hours.

42 “ Default ” means any event that is, or with the passage of time or the giving of notice or both would be, an Event of Default.

43 “ Depositary ” means, with respect to the Notes issuable or issued in the form of a Global Note, the Person designated as Depositary by the Company until a successor Depositary shall have become such pursuant to the applicable provisions of this Indenture, and thereafter “Depositary” shall mean or include each Person who is then a Depositary hereunder. The Company has appointed The Depository Trust Company as the initial Depositary for the Notes.

44 “ Distributed Property ” has the meaning specified in Section 4.05(c) hereof.

45 “ Dollar ” or “ $ ” means a dollar or other equivalent unit in such coin or currency of the United States of America that is legal tender for the payment of public and private debts at the time of payment.

46 “ Effective Date ” means, with respect to a Fundamental Change or a Make-Whole Fundamental Change, as applicable, the date such Fundamental Change or Make-Whole Fundamental Change, as applicable, occurs or becomes effective.

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47 “ Event of Default ” has the meaning specified in Section 6.01 hereof.

48 “ Ex-Dividend Date ” means, except to the extent otherwise provided under Section 4.05(c) hereof, the first date on which shares of the Common Stock trade on the applicable exchange or in the applicable market, regular way, without the right to receive the issuance, dividend or distribution in question.

49 “ Exchange Act ” means the U.S. Securities Exchange Act of 1934, as amended, and the rules and regulations of the Commission promulgated thereunder.

50 “ Extraordinary Dividend ” has the meaning specified in Section 2.15 hereof.

51 “ Form of Assignment and Transfer ” means the “Form of Assignment and Transfer” attached as Attachment 4 to the Form of Note attached hereto as Exhibit A .

52 “ Form of Fundamental Change Purchase Notice ” means the “Form of Fundamental Change Purchase Notice” attached as Attachment 2 to the Form of Note attached hereto as Exhibit A .

53 “ Form of Notice of Conversion” means the “Form of Notice of Conversion” attached as Attachment 1 to the Form of Note attached hereto as Exhibit A .

54 " Free Trade Date " means the date that is one year after the last date of original issuance of the Notes.

55 “ Free Transferability Certificate ” means a certificate substantially in the form attached hereto as Exhibit B .

56 “ Freely Tradable ” means, with respect to any Notes, that such Notes are eligible to be sold by a Person who is not an Affiliate of the Company (within the meaning of Rule 144) and has not been an Affiliate of the Company (within the meaning of Rule 144) during the immediately preceding 90 days without any volume or manner of sale restrictions under the Securities Act.

57 “ Fundamental Change ” shall be deemed to have occurred at the time after the Notes are originally issued if any of the following occurs:

(1) any “person” or “group” (within the meaning of Section 13(d) of the Exchange Act), other than the Company or its Subsidiaries, files a Schedule TO or any schedule, form or report under the Exchange Act disclosing that such person or group has become the direct or indirect ultimate “beneficial owner,” as defined in Rule 13d-3 under the Exchange Act, of the Company’s Common Equity representing more than 50% of the voting power of the Company’s Common Equity;

(2) the consummation of (x) any consolidation, merger, amalgamation, scheme of arrangement or other binding share exchange or reclassification or similar transaction between the Company and another person (other than any of the Company’s

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Subsidiaries), in each case pursuant to which the Common Stock shall be converted into cash, securities or other property, other than a transaction (i) that results in the holders of all classes of the Company’s Common Equity immediately prior to such transaction owning, directly or indirectly, as a result of such transaction, more than 50% of the surviving corporation or transferee or the parent thereof immediately after such event, or (ii) effected solely to change the Company’s jurisdiction of incorporation or to form a holding company for the Company and that results in a share exchange or reclassification or similar exchange of the outstanding Common Stock solely into common shares of the surviving entity or (y) any sale or other disposition in one transaction or a series of transactions of all or substantially all of the assets of the Company and its Subsidiaries, on a consolidated basis, to another person (other than any of the Company's Subsidiaries).

(3) the Company’s stockholders approve any plan or proposal for the liquidation or dissolution of the Company (other than in a transaction described in clause (2) above); or

(4) the Common Stock (or other common stock into which the Notes are then convertible) ceases to be listed or quoted on any of The New York Stock Exchange, the NASDAQ Global Market or the NASDAQ Global Select Market (or their respective successors);

provided , however , that in the case of a transaction or event described in clause (1) or (2) above, if at least 90% of the consideration received or to be received by holders of the Common Stock (excluding cash payments for fractional shares) in the transaction or transactions that would otherwise constitute a “ Fundamental Change ” consists of shares of common stock or common equity interests that are traded on any of The New York Stock Exchange, the NASDAQ Global Market or the NASDAQ Global Select Market (or their respective successors) or that will be so traded when issued or exchanged in connection with the transaction that would otherwise constitute a “Fundamental Change” under clause (1) or (2) above (“ Publicly Traded Securities ”), and as a result of such transaction or transactions, the Notes become convertible into such Publicly Traded Securities, excluding cash payments for fractional shares (subject to settlement in accordance with the provisions of Sections 4.03, 4.05 and 4.07 hereof), such event shall not be a “Fundamental Change” and, for the avoidance of doubt, an event that is not considered a “Fundamental Change” pursuant to this proviso shall not be a “Fundamental Change” solely because such event could also be described by clause (1) or (2) above.

If any transaction in which the Common Stock is replaced by the securities of another entity occurs, following completion of any related Make-Whole Fundamental Change Period and any related Fundamental Change Purchase Date, references to the Company in this definition of “Fundamental Change” will apply to such other entity instead.

58 “ Fundamental Change Company Notice ” has the meaning specified in Section 3.02(a) hereof.

59 “ Fundamental Change Expiration Time ” has the meaning specified in Section 3.05(a) hereof.

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60 “ Fundamental Change Purchase Date ” has the meaning specified in Section 3.01(a) hereof.

61 “ Fundamental Change Purchase Notice ” has the meaning specified in Section 3.05(a) hereof.

62 “ Fundamental Change Purchase Price ” has the meaning specified in Section 3.01(a) hereof.

63 “ Global Note ” means a Note evidencing all or part of a series of Notes, issued to the Depositary for such series or its nominee, and registered in the name of such Depositary or nominee.

64 “ Holder ” means the Person in whose name a Note is registered in the Register.

65 “ Indenture ” means this Indenture as amended or supplemented from time to time.

66 “ Initial Notes ” has the meaning specified in Section 2.01 hereof.

67 “ Initial Purchasers ” means the “Purchasers” listed in Schedule I to the Purchase Agreement.

68 “ Interest Payment Date ” means, with respect to the payment of interest on the Notes, each May 15 and November 15 of each year, beginning on May 15, 2014.

69 “ Issue Date ” means, with respect to any Note, the first date of original issuance of such Note (and not, for the avoidance of doubt, the date of issuance of any Note issued in whole or in part upon registration or transfer of, or in exchange for, or in lieu of, other Notes pursuant to Sections 2.05, 2.06, 2.07, 2.08, 2.09, 2.11, 2.12, 3.09 or 10.05).

70 “ Jones Act ” means the U.S. cabotage laws principally contained in 46 U.S.C. § 50501 and 46 U.S.C. Chapter 551, as amended from time to time and any successor or replacement statutes, relating to the ownership and operation of U.S.-flag vessels in the U.S. coastwise trade.

71 “ Last Original Issuance Date ” means the last date of original issuance of the Initial Notes.

72 “ Last Reported Sale Price ” of the Common Stock for any Trading Day means the closing sale price per share (or, if no closing sale price is reported, the average of the last bid and last ask prices or, if more than one in either case, the average of the average last bid and the average last ask prices) on that Trading Day as reported in composite transactions for the principal U.S. national or regional securities exchange on which the Common Stock is traded. If the Common Stock is not listed for trading on a U.S. national or regional securities exchange on the relevant Trading Day, the “Last Reported Sale Price” will be the last quoted bid price for the Common Stock in the over-the-counter market on the relevant date as reported by OTC Markets

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Group Inc. or a similar organization. If the Common Stock is not so quoted, the “Last Reported Sale Price” will be the average of the mid-point of the last bid and last ask prices for the Common Stock on the relevant trading day from each of at least three nationally recognized independent investment banking firms selected by the Company for this purpose, which may include one or more of the Initial Purchasers; provided that, if such prices cannot reasonably be obtained from three such investment banking firms, but are obtained from two such investment banking firms, then the “Last Reported Sale Price"” will be the average of the mid-points of such bid and ask prices from those two investment banking firms and if such prices can reasonably be obtained from only one such investment banking firm then the “Last Reported Sale Price” will be the mid-points of such bid and ask prices from that investment banking firm. Any such determination will be conclusive absent manifest error.

73 “ Make-Whole Fundamental Change ” means any event that (i) is a Fundamental Change under clause (1) or (2) of the definition of “Fundamental Change” (subject to any exceptions or exclusions to such definition) or (ii) would be a Fundamental Change, but for the exclusion in clause (2)(x)(i) of the definition of “Fundamental Change.”

74 “ Make-Whole Fundamental Change Period ” has the meaning specified in Section 4.06(a) hereof.

75 “ Market Disruption Event ” means, if the Common Stock is listed for trading on The New York Stock Exchange or listed on another U.S. national or regional securities exchange, the occurrence or existence during the one-half hour period ending on the scheduled close of trading on any Scheduled Trading Day of any material suspension or limitation imposed on trading (by reason of movements in price exceeding limits permitted by the stock exchange or otherwise) in the Common Stock or in any options, contracts or futures contracts relating to the Common Stock.

76 “ Maturity Date ” means, with respect to any Note and the payment of the principal amount thereof, November 15, 2028.

77 “ Measurement Period ” has the meaning specified in Section 4.01(b) hereof.

78 “ Merger Event ” has the meaning specified in Section 4.08(a) hereof.

79 “ Note ” or “ Notes ” has the meaning specified in the first paragraph of the Recitals of this Indenture.

80 “ Notice of Default ” has the meaning specified in Section 6.01(f) hereof.

81 “ Observation Period ” means, with respect to any Note surrendered for conversion, (i) if the relevant Conversion Date occurs prior to the 55th Scheduled Trading Day immediately preceding the Maturity Date, the 50 consecutive VWAP Trading Days beginning on, and including, the second VWAP Trading Day after such Conversion Date; and (ii) if the relevant Conversion Date occurs on or after the 55th Scheduled Trading Day immediately preceding the

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Maturity Date, the 50 consecutive VWAP Trading Days beginning on, and including, the 52nd Scheduled Trading Day immediately preceding the Maturity Date.

82 “ Officer ” or “ officer ” shall mean, the Chairman of the Board of Directors, the Chief Executive Officer, the President, any Vice President (whether or not designated by a number or word or words added before or after the title “Vice President”) or any Director of the Company.

83 “ Offer Expiration Date ” has the meaning specified in Section 4.05(e) hereof.

84 “ Officer’s Certificate ” means a certificate signed by an Authorized Officer and delivered to the Trustee.

85 “ Open of Business ” means 9:00 a.m., New York City time.

86 “ Opinion of Counsel ” means a written opinion of counsel, who may be an employee of, or counsel for, the Company or an Affiliate of the Company.

87 “ Outstanding ” means, with respect to the Notes, any Notes authenticated by the Trustee except (i) Notes cancelled by it, (ii) Notes delivered to it for cancellation and (iii)(A) Notes replaced pursuant to Section 2.09 hereof, on and after the time such Note is replaced (unless the Trustee and the Company receive proof satisfactory to them that such Note is held by a bona fide purchaser), (B) Notes converted pursuant to Article 4 hereof, on and after their Conversion Date, (C) any and all Notes, as of the Maturity Date, if the Paying Agent holds, in accordance with this Indenture, money sufficient to pay all of the Notes then payable, and (D) any and all Notes owned by the Company or any other obligor upon the Notes or any Affiliate of the Company or of such other obligor, except that in determining whether the Trustee shall be protected in relying upon any request, demand, authorization, direction, notice, consent or waiver or other action that is to be made by a requisite principal amount of Outstanding Notes, only such Notes which a Responsible Officer of the Trustee actually knows to be so owned shall be disregarded.

88 “ Paying Agent ” means any Person authorized by the Company to pay the principal amount of, any premium on, interest on, or the Fundamental Change Purchase Price, Specified Date Purchase Price, or Redemption Price of, any Notes on behalf of the Company.

89 “ Person ” means any individual, corporation, partnership, joint venture, trust, unincorporated organization or government or any agency or political subdivision thereof.

90 “ Physical Notes ” means permanent certificated Notes in definitive, fully registered form issued in denominations of $1,000 principal amount and integral multiples of $1,000 in excess thereof.

91 “ Physical Settlement ” has the meaning set forth in Section 4.03(a) hereof.

92 “ Preliminary Offering Memorandum ” means the Preliminary Offering Memorandum dated November 5, 2013 related to the offering of the Initial Notes.

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93 “ Publicly Traded Securities ” has the meaning specified in the definition of “Fundamental Change” under this Section 1.01.

94 “ Purchase Agreement ” means that certain Purchase Agreement, dated November 6, 2013, among the Company and the representative of the Initial Purchasers, on behalf of the Initial Purchasers.

95 “ Redemption Date ” means, with respect to any Notes to be redeemed, the date fixed for redemption by the Company in accordance with Section 10.03.

96 “ Redemption Notice ” has the meaning specified in Section 10.03 hereof.

97 “ Redemption Price ” has the meaning specified in Section 10.02 hereof.

98 “ Reference Property ” has the meaning specified in Section 4.08(a) hereof.

99 “ Register ” and “ Registrar ” have the respective meanings specified in Section 2.06.

100 “ Regular Record Date ” means, with respect to any Interest Payment Date, May 1 (whether or not a Business Day) or November 1 (whether or not a Business Day), as the case may be, immediately preceding such Interest Payment Date.

101 “ Reporting Event of Default ” has the meaning specified in Section 6.03 hereof.

102 “ Resale Restriction Termination Date ” has the meaning specified in Section 2.08(b)(ii).

103 “ Responsible Officer ,” when used with respect to the Trustee, means any officer within the corporate trust department or any other successor group of the Trustee, including any vice president, assistant vice president, assistant secretary or any other officer of the Trustee customarily performing functions similar to those performed by any of the above designated officers who at the time shall be such officers, respectively, or to whom any corporate trust matter is referred because of his or her knowledge of and familiarity with the particular subject and who in each case shall have direct responsibility for the administration of this Indenture.

104 “ Restricted Global Note ” has the meaning specified in Section 2.08(b)(i).

105 “ Restricted Note ” has the meaning specified in Section 2.07(a)(i).

106 “ Restricted Notes Legend ” has the meaning specified in the Form of Note attached hereto as Exhibit A .

107 “ Restricted Stock ” has the meaning specified in Section 2.07(b)(i).

108 “ Restricted Stock Legend ” means a legend substantially in the form set forth in Exhibit C hereto.

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109 “ Rule 144 ” means Rule 144 under the Securities Act (including any successor rule thereto), as the same may be amended from time to time.

110 “ Scheduled Trading Day ” means a day that is scheduled to be a Trading Day on the principal U.S. national or regional securities exchange or market on which the Common Stock is listed or admitted for trading. If the Common Stock is not listed or admitted for trading, “Scheduled Trading Day” means a Business Day.

111 “ Securities Act ” means the U.S. Securities Act of 1933, as amended, and the rules and regulations of the Commission promulgated thereunder.

112 “ Settlement Amount ” has the meaning specified in Section 4.03(a) hereof.

113 “ Settlement Election ” has the meaning specified in Section 4.03(a) hereof.

114 “ Settlement Election Notice ” has the meaning specified in Section 4.03(a) hereof.

115 “ Settlement Method ” means, with respect to any conversion of Notes, Physical Settlement, Cash Settlement or Combination Settlement, as elected (or deemed to be elected) by the Company in accordance with Section 4.03(a)(i) hereof.

116 “ Significant Subsidiary ” means, with respect to any Person, a Subsidiary of such person that would constitute a “significant subsidiary” as such term is defined in Article 1, Rule 1-02 of Regulation S-X, promulgated pursuant to the Securities Act, as in effect on the original date of issuance of the Notes.

117 “ Specified Date Purchase Notice ” has the meaning specified in Section 3.05(a) hereof.

118 “ Specified Date Purchase Price ” has the meaning specified in Section 3.03(a) hereof.

119 “ Specified Date Purchase Company Notice ” has the meaning specified in Section 3.04(a) hereof.

120 “ Specified Purchase Date ” has the meaning specified in Section 3.03(a) hereof.

121 “ Specified Purchase Date Expiration Time ” has the meaning specified in Section 3.05(a) hereof.

122 “ Specified Dollar Amount ” means the maximum cash amount per $1,000 principal amount of Notes to be received by the Holder upon conversion as specified in the Company’s Specified Dollar Amount Election Notice (which may be part of the Settlement Election Notice).

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123 “ Specified Dollar Amount Election ” has the meaning specified in Section 4.03(a) hereof.

124 “ Specified Dollar Amount Election Notice ” has the meaning specified in Section 4.03(a) hereof.

125 “ Spin-Off ” has the meaning specified in Section 4.05(c) hereof.

126 “ Stated Maturity ,” when used with respect to any Note or any installment of principal thereof or interest thereon, means the date specified in such Note as the fixed date on which the principal of such Note or such installment of principal or interest is due and payable.

127 “ Stock Price ” has the meaning specified in Section 4.07(c) hereof.

128 “ Subsidiary ” of any Person means (a) any corporation, association or other business entity of which more than 50% of the outstanding total voting power ordinarily entitled (without regard to the occurrence of any contingency) to vote in the election of directors, managers, trustees or other voting members of the governing body thereof is at the time owned or controlled, directly or indirectly, by the Company or by one or more other Subsidiaries, or by the Company and one or more other Subsidiaries or (b) any partnership the sole general partner or the managing general partner of which is the Company or a Subsidiary of the Company or the only general partners of which are the Company or of one or more Subsidiaries of the Company (or any combination thereof).

129 “ Successor Company ” has the meaning specified in Section 9.01(a) hereof.

130 “ Trading Day ” means a Scheduled Trading Day on which (i) there is no Market Disruption Event, and (ii) trading in the Common Stock generally occurs on The New York Stock Exchange or, if the Common Stock is not then listed on The New York Stock Exchange, on the principal other U.S. national or regional securities exchange on which the Common Stock is then listed or, if the Common Stock is not then listed on a U.S. national or regional securities exchange, on the principal other market on which the Common Stock is then listed or admitted for trading. If the Common Stock is not so listed or traded, “Trading Day” means a “Business Day.”

131 “ Trading Price ” of the Notes on any Trading Day means the average of the secondary market bid quotations obtained by, at the Company's election, the Company or the Bid Solicitation Agent for $5,000,000 principal amount of the Notes at approximately 3:30 p.m., New York City time, on such Trading Day from three independent nationally recognized securities dealers selected by the Company, which may include one or more of the Initial Purchasers; provided that, if three such bids cannot reasonably be obtained by the Company or the Bid Solicitation Agent, as applicable, but two such bids are obtained, then the average of the two bids shall be used, and if only one such bid can reasonably be obtained by the Company or the Bid Solicitation Agent, as applicable, that one bid shall be used. If the Company or the Bid Solicitation Agent, as applicable, cannot reasonably obtain at least one bid for $5,000,000 principal amount of the Notes from a nationally recognized securities dealer on a Trading Day,

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then the Trading Price per $1,000 principal amount of Notes on such Trading Day will be deemed to be less than 98% of the product of (i) the Last Reported Sale Price of the Common Stock on such Trading Day and (ii) the Conversion Rate in effect on such Trading Day. Any such determination will be conclusive absent manifest error. If the Company does not, or does not instruct the Bid Solicitation Agent to, as applicable, obtain bids when required, or the Company or the Bid Solicitation Agent, as applicable, fails to solicit bids when required, the Trading Price per $1,000 principal amount of the Notes will be deemed to be less than 98% of the product of (i) the Trading Price and (ii) the Conversion Rate for each Trading Day on which the Company or the Bid Solicitation Agent fails to do so, as the case may be.

132 Notwithstanding anything above, for the purposes of determining whether Contingent Interest is payable on the Notes pursuant to Section 2.15, “Trading Price” means on any date of determination the average of the secondary market bid quotations obtained by, at the Company's election, the Company or the Bid Solicitation Agent for $5,000,000 principal amount of the Notes at approximately 3:30 p.m., New York City time, on such Trading Day from three independent nationally recognized securities dealers selected by the Company, which may include one or more of the Initial Purchasers; provided that, if three such bids cannot reasonably be obtained by the Company or the Bid Solicitation Agent, as applicable, but two such bids are obtained, then the average of the two bids shall be used, and if only one such bid can reasonably be obtained by the Company or the Bid Solicitation Agent, as applicable, that one bid shall be used. If the Company or the Bid Solicitation Agent, as applicable, cannot reasonably obtain at least one bid for $5,000,000 principal amount of the Notes from a nationally recognized securities dealer on a Trading Day, then the Trading Price per $1,000 principal amount of Notes on such Trading Day will be deemed to be equal to the greater of (i) the Upside Trigger and (ii) the product of the Last Reported Sale Price of the Common Stock and the applicable Conversion Rate on such Trading Day. Any such determination will be conclusive absent manifest error. If the Company does not, or does not instruct the Bid Solicitation Agent to, as applicable, obtain bids when required, or the Company or the Bid Solicitation Agent, as applicable, fails to solicit bids when required, the Trading Price per $1,000 principal amount of the Notes will be deemed to be equal to the greater of (i) the Upside Trigger and (ii) the product of the Last Reported Sale Price of the Common Stock and the applicable Conversion Rate on such Trading Day.

133 “ Trigger Event ” has the meaning specified in Section 4.05(c) hereof.

134 “ Trustee ” means the Person named as the “Trustee” in the first paragraph of this Indenture until a successor Trustee shall have become such pursuant to Section 11.12 hereof, and thereafter “Trustee” shall mean or include each Person who is then a Trustee hereunder.

135 “ Trust Indenture Act ” means the Trust Indenture Act of 1939 as in force at the date as of which this instrument was executed.

136 “ Upside Trigger ” means $1,200 per $1,000 principal amount of Notes.

137 “ Unit of Reference Property ” has the meaning specified in Section 4.08(a) hereof.

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138 “ U.S. ” means the United States of America.

139 “ U.S. Citizen ” means a person who is a “citizen of the United States” within the meaning of the Jones Act.

140 “ Valuation Period ” has the meaning specified in Section 4.05(c) hereof.

141 “ Vice President ,” when used with respect to the Company or the Trustee, as applicable, means any vice president, whether or not designated by a number or a word or words added before or after the title “vice president”.

142 “ VWAP Market Disruption Event ” means (i) a failure by the primary U.S. national or regional securities exchange or market on which the Common Stock is listed or admitted to trading to open for trading during its regular trading session or (ii) the occurrence or existence, prior to 1:00 p.m., New York City time, on any Scheduled Trading Day for the Common Stock for more than a one half-hour period in the aggregate during regular trading hours, of any suspension or limitation imposed on trading (by reason of movements in price exceeding limits permitted by the relevant securities exchange or otherwise) in the Common Stock or in any options, contracts or future contracts relating to the Common Stock.

143 “ VWAP Trading Day ” means a Scheduled Trading Day on which (i) there is no VWAP Market Disruption Event and (ii) trading in the Common Stock generally occurs on The New York Stock Exchange or, if the Common Stock is not then listed on The New York Stock Exchange, on the principal other U.S. national or regional securities exchange on which the Common Stock is then listed or, if the Common Stock is not then listed on a U.S. national or regional securities exchange, on the principal other market on which the Common Stock is then traded. If the Common Stock is not so listed or admitted for trading, “VWAP Trading Day” means a Business Day.

Section 1.02 References to Interest . Any reference to interest on, or in respect of, any Note in the Indenture shall be deemed to include Contingent Interest and/or Additional Interest, as applicable, if, in such context, Contingent Interest and/or Additional Interest, as applicable, is, was or would be payable pursuant hereto. Any express mention of the payment of Contingent Interest or Additional Interest, as applicable, in any provision hereof shall not be construed as excluding Contingent Interest or Additional Interest, as applicable, in those provisions hereof where such express mention is not made.

Section 1.03 Acts of Holders . (a) Any request, demand, authorization, direction, notice, consent, waiver or other action provided or permitted by this Indenture to be made, given or taken by Holders may be embodied in and evidenced by one or more instruments of substantially similar tenor signed by such Holders in person or by an agent duly appointed in writing; and, except as herein otherwise expressly provided, such action shall become effective when such instrument or instruments are delivered to the Trustee and, where it is hereby expressly required, to the Company. Such instrument or instruments (and the action embodied therein and evidenced thereby) are herein sometimes referred to as the “Act” of the Holders signing such instrument or instruments. Proof of execution of any such instrument or of a writing appointing

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any such agent, or of the holding by any Person of Notes, shall be sufficient for any purpose of this Indenture and (subject to Section 11.01 hereof) conclusive in favor of the Trustee and the Company, if made in the manner provided in this Section.

(b) The fact and date of the execution by any Person of any such instrument or writing may be proved by the affidavit of a witness of such execution or by a certificate of a notary public or other officer authorized by law to take acknowledgments of deeds, certifying that the individual signing such instrument or writing acknowledged to him the execution thereof. Where such execution is by a signer acting in a capacity other than his individual capacity, such certificate or affidavit shall also constitute sufficient proof of his authority. The fact and date of the execution of any such instrument or writing, or the authority of the Person executing the same, may also be proved in any other manner which the Trustee deems sufficient.

(c) The amount of Notes held by any Person executing any such instrument or writings as the Holder thereof, and the numbers of such Notes, and the date of his holding the same, may be proved by the production of such Notes or by a certificate executed, as depositary, by any trust company, bank, banker or member of a national securities exchange (wherever situated), if such certificate is in form satisfactory to the Trustee, showing that at the date therein mentioned such Person had on deposit with such depositary, or exhibited to it, the Notes therein described; or such facts may be proved by the certificate or affidavit of the Person executing such instrument or writing as the Holder thereof, if such certificate or affidavit is in form satisfactory to the Trustee. The Trustee and the Company may assume that such ownership of any Notes continues until (1) another certificate bearing a later date issued in respect of the same Notes is produced or (2) such Notes are produced by some other Person or (3) such Notes are no longer Outstanding.

(d) The fact and date of execution of any such instrument or writing and the amount and number of Notes held by the Person so executing such instrument or writing may also be proved in any other manner that the Trustee deems sufficient; and the Trustee may in any instance require further proof with respect to any of the matters referred to in this Section 1.03.

(e) The principal amount (except as otherwise contemplated in clause (ii) of the proviso to the definition of “Outstanding”) and serial numbers of Notes held by any Person, and the date of holding the same, shall be proved by the Registrar.

(f) Any request, demand, authorization, direction, notice, consent, election, waiver or other Act of the Holder of any Note shall bind every future Holder of the same Note and the Holder of every Note issued upon the registration of transfer thereof or in exchange therefor or in lieu thereof in respect of anything done, omitted or suffered to be done by the Trustee or the Company in reliance thereon, whether or not notation of such action is made upon such Note.

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(g) The Company may but shall not be obligated to set a record date for purposes of determining the identity of Holders of any Outstanding Notes of any series entitled to vote or consent to any action by vote or consent authorized or permitted by Section 2.11, 6.02, 6.4, 6.05, 6.06, 8.02 or 11.11. Such record date shall be not less than 10 nor more than 60 days prior to the first solicitation of such consent or the date of the most recent list of Holders of such Notes furnished to the Trustee pursuant to Section 5.13 prior to such solicitation.

(h) If the Company solicits from Holders any request, demand, authorization, direction, notice, consent, election, waiver or other Act, the Company may, at its option, fix in advance a record date for the determination of Holders entitled to give such request, demand, authorization, direction, notice, consent, election, waiver or other Act, but the Company shall have no obligation to do so. If such a record date is fixed, such request, demand, authorization, direction, notice, consent, election, waiver or other Act may be given before or after such record date, but only the Holders of record at the close of business on the record date shall be deemed to be Holders for the purposes of determining whether Holders of the requisite proportion of the Outstanding Notes have authorized or agreed or consented to such request, demand, authorization, direction, notice, consent, election, waiver or other Act, and for that purpose the Outstanding Notes shall be computed as of the record date; provided that no such authorization, agreement or consent by the Holders on such record date shall be deemed effective unless it shall become effective pursuant to the provisions of this Indenture not later than six months after the record date.

ARTICLE 2.
THE NOTES

Section 2.01 Title and Terms; Payments .

The aggregate principal amount of Notes that may be authenticated and delivered under this Indenture is initially limited to $230,000,000 (the “ Initial Notes ”), except for Notes authenticated and delivered upon registration or transfer of, or in exchange for, or in lieu of, other Notes pursuant to Sections 2.05, 2.06, 2.07, 2.08, 2.09, 2.11, 2.12 or 3.09 or 10.05. The Company may, from time to time after the execution of this Indenture, execute and deliver to the Trustee for authentication Additional Notes of an unlimited aggregate principal amount, and the Trustee shall thereupon authenticate and deliver said Additional Notes to or upon receipt of a Company Order, without any further action by the Company hereunder; provided , however , that (1) such Additional Notes will be part of the same issue as the Initial Notes for U.S. federal income tax purposes and securities laws purposes; (2) such Additional Notes must be issued pursuant to the same terms (other than the offering price, Issue Date and first Interest Payment Date) as the Initial Notes; and (3) the Trustee must receive (a) an Officer’s Certificate to the effect that such issuance of Additional Notes complies with the provisions of this Indenture, including each provision of this paragraph; and (b) an Opinion of Counsel which shall state (i) that the form of such Additional Notes has been established by a supplemental indenture or by or pursuant to a resolution of the Board of Directors in accordance with Sections 2.01 and 2.04 and

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in conformity with the provisions of this Indenture; (ii) that the terms of such Additional Notes have been established in accordance with Section 2.01 and in conformity with the other provisions of this Indenture; and (iii) that such Additional Notes, when authenticated and delivered by the Trustee and issued by the Company in the manner and subject to any conditions specified in such Opinion of Counsel, will constitute valid and legally binding obligations of the Company, enforceable in accordance with their terms, subject to bankruptcy, insolvency, reorganization and other laws of general applicability relating to or affecting the enforcement of creditors' rights and to general equity principles.

The Notes shall be known and designated as the “3.00% Convertible Senior Notes due 2028” of the Company. The principal amount shall be payable on the Maturity Date.

The principal amount of Physical Notes shall be payable at the Corporate Trust Office and at any other office or agency in the continental United States maintained by the Company for such purpose. Interest on Physical Notes will be payable (i) to Holders holding Physical Notes having an aggregate principal amount of $1,000,000 or less of Notes, by check mailed to such Holders at the address set forth in the Register and (ii) to Holders holding Physical Notes having an aggregate principal amount of more than $1,000,000 of Notes, either by check mailed to such Holders or, upon written application by a Holder to the Registrar not later than the relevant Regular Record Date for such interest payment, by wire transfer in immediately available funds to such Holder’s account within the United States, which application shall remain in effect until the Holder notifies the Registrar to the contrary in writing. The Company will pay or cause the Paying Agent to pay principal of, and interest on, Global Notes in immediately available funds to The Depository Trust Company or its nominee, as the case may be, as the registered holder of such Global Note, on each Interest Payment Date, Redemption Date, Fundamental Change Purchase Date, Specified Purchase Date or other payment date, as the case may be.

Any Notes repurchased by the Company will be retired and no longer Outstanding hereunder.

Section 2.02 Ranking . The Notes constitute direct unsecured, senior obligations of the Company.

Section 2.03 Denominations . The Notes shall be issuable only in registered form without coupons and in denominations of $1,000 and any integral multiple of $1,000 in excess thereof.

Section 2.04 Execution, Authentication, Delivery and Dating . The Notes shall be executed on behalf of the Company by its Chief Executive Officer, its President, its Chief Financial Officer, any of its Vice Presidents, its Treasurer, any Assistant Treasurer, the Secretary or Directors.

Notes bearing the manual or facsimile signatures of individuals who were at any time an Officer of the Company shall bind the Company, notwithstanding that such individual has ceased to hold such office prior to the authentication and delivery of such Notes or did not hold such office at the date of such Notes.

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At any time and from time to time after the execution and delivery of this Indenture, the Company may deliver Notes executed by the Company to the Trustee for authentication, together with a Company Order for the authentication and delivery of such Notes. The Company Order shall specify the amount of Notes to be authenticated, and shall further specify the amount of such Notes to be issued as one or more Global Notes or as one or more Physical Notes. The Trustee in accordance with such Company Order shall authenticate and deliver such Notes as in this Indenture provided and not otherwise.

Each Note shall be dated the date of its authentication.

No Note shall be entitled to any benefit under this Indenture or be valid or obligatory for any purpose unless there appears on such Note a certificate of authentication substantially in the form provided for herein executed by an authorized signatory of the Trustee by manual signature, and such certificate upon any Note shall be conclusive evidence, and the only evidence, that such Note has been duly authenticated and delivered hereunder.

Section 2.05 Temporary Notes . Pending the preparation of Physical Notes, the Company may execute, and upon Company Order the Trustee shall authenticate and deliver, temporary Notes that are printed, lithographed, typewritten, mimeographed or otherwise produced, in any authorized denomination, substantially of the tenor of the Physical Notes in lieu of which they are issued and with such appropriate insertions, omissions, substitutions and other variations as the Officer executing such Notes may determine, as evidenced by such Officer’s execution of such Notes; provided that any such temporary Notes shall bear legends on the face of such Notes as set forth in the Form of Note attached hereto as Exhibit A and/or Sections 2.07 and 2.11.

After the preparation of Physical Notes, the temporary Notes shall be exchangeable for Physical Notes upon surrender of the temporary Securities at any office or agency of the Company designated pursuant to Section 5.02, without charge to the Holder. Upon surrender for cancellation of any one or more temporary Notes, the Company shall execute and the Trustee shall, upon Company Order, authenticate and deliver in exchange therefor a like principal amount of Physical Notes of authorized denominations. Until so exchanged, the temporary Notes shall in all respects be entitled to the same benefits under this Indenture as Physical Notes.

Section 2.06 Registration; Registration of Transfer and Exchange .

(a) The Company shall cause to be kept at the applicable Corporate Trust Office of the Trustee a register (the register maintained in such office and in any other office or agency designated pursuant to Section 5.02 being herein sometimes collectively referred to as the “ Register ”) in which, subject to such reasonable regulations as it may prescribe, the Company shall provide for the registration of Notes and of transfers of Notes. The Trustee is hereby appointed “Registrar” (the “ Registrar ”) for the purpose of registering Notes and transfers of Notes as herein provided.

Upon surrender for registration of transfer of any Note at an office or agency of the Company designated pursuant to Section 5.02 for such purpose, the Company shall execute, and upon receipt of a Company Order the Trustee shall authenticate and deliver, in the name of the designated transferee or transferees, one or more new Notes of any authorized denomination and of a like aggregate principal amount and tenor, each such Notes bearing such restrictive legends as may be required by this Indenture (including the Form of Note attached hereto as Exhibit A and Sections 2.07 and 2.11).

At the option of the Holder and subject to the other provisions of Sections 2.07 and 2.11, Notes may be exchanged for other Notes of any authorized denomination and of a like aggregate principal amount and tenor, upon surrender of the Notes to be exchanged at such office or agency. Whenever any Notes are so surrendered for exchange, the Company shall execute, and the Trustee shall, upon receipt of a Company Order, authenticate and deliver, the Notes which the Holder making the exchange is entitled to receive.

All Notes issued upon any registration of transfer or exchange of Notes shall be the valid obligations of the Company, evidencing the same debt, and entitled to the same benefits under this Indenture, as the Notes surrendered upon such registration of transfer or exchange.

Every Note presented or surrendered for registration of transfer or for exchange shall (if so required by the Company or the Trustee) be duly endorsed, or be accompanied by a written instrument of transfer in form satisfactory to the Company and the Registrar duly executed, by the Holder thereof or his attorney duly authorized in writing. As a condition to the registration of transfer of any Restricted Notes, the Company or the Trustee may require evidence satisfactory to them as to the compliance with the restrictions set forth in the legend on such Notes.

No service charge shall be made for any registration of transfer or exchange of Notes, but the Company and the Registrar may require payment of a sum sufficient to cover any tax or other governmental charge that may be imposed in connection with any registration of transfer or exchange of Notes, other than exchanges pursuant to Section 2.11 not involving any transfer.

Neither the Company nor the Registrar shall be required to exchange or register a transfer of any Security in the circumstances set forth in Section 2.11(a)(iv).

(b) Neither any members of, or participants in, the Depositary (collectively, the “ Agent Members ”) nor any other Persons on whose behalf any Agent Member may act shall have any rights under this Indenture with respect to any Global Note registered in the name of the Depositary or any nominee thereof, or under any such Global Note, and the Depositary or such nominee, as the case may be, may be treated by the Company, the Trustee and any agent of the Company or the Trustee as the absolute owner and Holder of such Global Note for all purposes whatsoever. The Trustee shall have no liability, responsibility or obligation to any Agent Members or any other Person on whose behalf Agent Members may act with respect to (i) any ownership interests in the Global Note, (ii) the accuracy of the records of the Depositary or its nominee, (iii) any notice required hereunder, (iv) any payments under or with respect to the Global Note (v) or actions taken or not taken by any Agent Members.

(c) Notwithstanding the foregoing, nothing herein shall prevent the Company, the Trustee or any agent of the Company or the Trustee from giving effect to any written certification, proxy or other authorization furnished by the Depositary or such nominee, as the case may be, or impair, as between the Depositary, its Agent Members and any other Person on whose behalf an Agent Member may act, the operation of customary practices of such Persons governing the exercise of the rights of a Holder of any Note. The registered Holder of a Global Note may grant proxies and otherwise authorize any Person, including Agent Members and persons that may hold interests through Agent Members, to take any action that a Holder is entitled to take under this Indenture or the Notes.

Section 2.07 Transfer Restrictions .

(a) Restricted Notes .

(i) Every Note (and all securities issued in exchange therefor or substitution thereof) that bears, or that is required under this Section 2.07 to bear, the Restricted Notes Legend will be deemed to be a “ Restricted Note .” Each Restricted Note will be subject to the restrictions on transfer set forth in this Indenture (including in the Restricted Notes Legend) and will bear the restricted CUSIP number for the Notes unless such restrictions on transfer are eliminated or otherwise waived by written consent of the Company (including, without limitation, by the Company’s delivery of the Free Transferability Certificate as provided herein), and each Holder of a Restricted Note, by such Holder’s acceptance of such Restricted Note, will be deemed to be bound by the restrictions on transfer applicable to such Restricted Note.

(ii) Until the Resale Restriction Termination Date, any Note will bear the Restricted Notes Legend unless:

(A) such Note, since last held by the Company or an affiliate of the Company (within the meaning of Rule 144), if ever, was transferred (1) to a Person other than (x) the Company or (y) an affiliate of the Company (within the meaning of Rule 144) or a Person that was an affiliate of the Company within the 90 days immediately preceding such transfer and (2) pursuant to a registration statement that was effective under the Securities Act at the time of such transfer;

(B) such Note was transferred (1) to a Person other than (x) the Company or (y) an affiliate of the Company (within the meaning of Rule 144) or a Person that was an affiliate of the Company within the 90 days immediately preceding such transfer and (2) pursuant to the exemption from registration provided by Rule 144 or any similar provision then in force under the Securities Act; or

(C) the Company delivers written notice to the Trustee and the Registrar (including, without limitation, by the Company’s delivery of the Free Transferability Certificate as provided herein) stating that the Restricted Notes Legend may be removed from such Note and all Applicable Procedures have been complied with.

(iii) In addition, until the Resale Restriction Termination Date:

(A) no transfer of any Note will be registered by the Registrar prior to the Resale Restriction Termination Date unless the transferring Holder delivers a notice substantially in the form of the Form of Assignment and Transfer, with the appropriate box checked, to the Trustee; and

(B) the Registrar will not register any transfer of any Note that is a Restricted Note to a Person that is an affiliate of the Company or has been an affiliate of the Company (within the meaning of Rule 144) within the 90 days immediately preceding the date of such proposed transfer.

(iv) On and after the Resale Restriction Termination Date, any Note will bear the Restricted Note Legend at any time the Company determinates that, to comply with law, such Note must bear the Restricted Notes Legend.

(b) Restricted Stock .

(i) Every share of Common Stock that bears, or that is required under this Section 2.07 to bear, the Restricted Stock Legend will be deemed to be “ Restricted Stock ”. Each share of Restricted Stock will be subject to the restrictions on transfer set forth in this Indenture (including in the Restricted Stock Legend) and will bear a restricted CUSIP number unless such restrictions on transfer are eliminated or otherwise waived by written consent (including, without limitation, by the Company’s delivery of the Free Transferability Certificate as provided herein) of the Company, and each Holder of Restricted Stock, by such Holder's acceptance of Restricted Stock, will be deemed to be bound by the restrictions on transfer applicable to such Restricted Stock.

(ii) Until the Resale Restriction Termination Date, any shares of Common Stock issued upon the conversion of a Note, and any shares of Common Stock issued upon conversion of a Restricted Note, will be issued in book-entry form and will bear the Restricted Stock Legend unless the Company delivers written notice to the Trustee, the Registrar and the transfer agent for the Common Stock stating that such shares of Common Stock need not bear the Restricted Stock Legend.

(iii) On and after the Resale Restriction Termination Date, shares of Common Stock will be issued in book-entry form and will bear the Restricted Stock Legend at any time the Company reasonably determinates that, to comply with law, such shares of Common Stock must bear the Restricted Stock Legend.

(c) As used in this Section 2.07, the term “ transfer ” means any sale, pledge, transfer, loan, hypothecation or other disposition whatsoever of any Restricted Note, any interest therein or any Restricted Stock.

Section 2.08 Expiration of Restrictions .

(a) Physical Notes . Any Physical Note (or any security issued in exchange or substitution therefor) that does not constitute a Restricted Note may be exchanged for a new Note or Notes of like tenor and aggregate principal amount that do not bear the Restricted Notes Legend required by Section 2.07. To exercise such right of exchange, the Holder of such Note must surrender such Note in accordance with the provisions of Section 2.11 and deliver any additional documentation reasonably required by the Company, the Trustee or the Registrar in connection with such exchange.

(b) Global Notes; Resale Restriction Termination Date .

(i) If, on the Free Trade Date, or the next succeeding Business Day if the Free Trade Date is not a Business Day, any Notes are represented by a Global Note that is a Restricted Note (any such Global Note, a “ Restricted Global Note ”), as promptly as practicable, the Company will automatically exchange every beneficial interest in each Restricted Global Note for beneficial interests in Global Notes that are not subject to the restrictions set forth in the Restricted Notes Legend and in Section 2.07 hereof.

(ii) To effect such automatic exchange, the Company will (A) deliver to the Depositary an instruction letter for the Depositary’s mandatory exchange process at least 15 days immediately prior to the Free Trade Date and (B) deliver to each of the Trustee and the Registrar a duly completed Free Transferability Certificate promptly after the Free Trade Date. The first date on which both the Trustee and the Registrar have received the Free Transferability Certificate will be known as the “ Resale Restriction Termination Date ”.

(iii) Immediately upon receipt of the Free Transferability Certificate by each of the Trustee and the Registrar:

(A) the Restricted Notes Legend will be deemed removed from each of the Global Notes specified in such Free Transferability Certificate and the restricted CUSIP number will be deemed removed from each of such Global Notes and deemed replaced with an unrestricted CUSIP number with no further action required by the Company, the Trustee or, if applicable, the Depositary;

(B) the Restricted Stock Legend will be deemed removed from any shares of Common Stock previously issued upon conversion of the Notes; and

(C) thereafter, shares of Common Stock issued upon conversion of the Notes will be assigned an unrestricted CUSIP number and will not bear the Restricted Stock Legend (except as provided in Section 2.07(b)(iii)) or any similar legend.

(iv) Promptly after the Resale Restriction Termination Date, the Company will provide Bloomberg LLP with a copy of the Free Transferability Certificate and will use reasonable efforts to cause Bloomberg LLP to adjust its screen page for the Notes to indicate that the Notes are no longer Restricted Notes and are then identified by an unrestricted CUSIP number.

(v) Prior to the Company’s delivery of the Free Transferability Certificate and afterwards, the Company and the Trustee will comply with the Applicable Procedures and otherwise use reasonable efforts to cause each Global Note to be identified by an unrestricted CUSIP number in the facilities of the Depositary by the date the Free Transferability Certificate is delivered to the Trustee and the Registrar or as promptly as possible thereafter.

(vi) Notwithstanding anything to the contrary in Sections 2.08(b)(i), (ii) or (iii), the Company will not be required to deliver the Free Transferability Certificate if it reasonably believes that removal of the Restricted Notes Legend or the changes to the CUSIP numbers for the Notes could result in or facilitate transfers of the Notes in violation of applicable law.

Section 2.09 Mutilated, Destroyed, Lost and Stolen Notes If any mutilated Note is surrendered to the Trustee, the Company shall execute and the Trustee shall authenticate and deliver in exchange therefor a new Note of like tenor and principal amount and bearing a number not contemporaneously outstanding.

In case any such mutilated, destroyed, lost or stolen Note has become or is about to become due and payable, the Company in its discretion may, instead of issuing a new Note, pay such Note.

Upon the issuance of any new Note under this Section 2.09, the Company may require payment by the Holder of a sum sufficient to cover any tax or other governmental charge that may be imposed in relation thereto and any other expenses (including the fees and expenses of the Trustee) connected therewith.

Every new Note issued pursuant to this Section 2.09 in lieu of any destroyed, lost or stolen Note shall constitute an original additional contractual obligation of the Company, whether or not the destroyed, lost or stolen Note shall be at any time enforceable by anyone, and shall be entitled to all the benefits of this Indenture equally and proportionately with any and all other Notes duly issued hereunder.

The provisions of this Section are exclusive and shall preclude (to the extent lawful) all other rights and remedies with respect to the replacement or payment of mutilated, destroyed, lost or stolen Notes.

Section 2.10 Persons Deemed Owners . Prior to due presentment of a Note for registration of transfer, the Company, the Trustee, the Registrar and any agent of the Company, the Trustee or the Registrar may treat the Person in whose name such Note is registered in the Register as the owner of such Note for the purpose of receiving payment of the principal of such Note and for all other purposes whatsoever, whether or not such Note be overdue, and neither the Company, the Trustee, the Registrar nor any agent of the Company, the Trustee or the Registrar shall be affected by notice to the contrary.

Section 2.11 Transfer and Exchange .

(a) Provisions Applicable to All Transfers and Exchanges .

(i) Subject to the restrictions set forth in this Section 2.11, Physical Notes and beneficial interests in Global Notes may be transferred or exchanged from time to time as desired, and each such transfer or exchange will be noted by the Registrar in the Register.

(ii) All Notes issued upon any registration of transfer or exchange in accordance with this Indenture will be the valid obligations of the Company, evidencing the same debt, and entitled to the same benefits under this Indenture as the Notes surrendered upon such registration of transfer or exchange.

(iii) No service charge will be imposed on any Holder of a Physical Note or any owner of a beneficial interest in a Global Note for any exchange or registration of transfer, but each of the Company, the Trustee or the Registrar may require such Holder or owner of a beneficial interest to pay a sum sufficient to cover any transfer tax, assessment or other governmental charge imposed in connection with such registration of transfer or exchange.

(iv) Unless the Company specifies otherwise, none of the Company, the Trustee, the Registrar or any co-Registrar will be required to exchange or register a transfer of any Note (i) that has been surrendered for conversion, (ii) as to which Section 10.05 is applicable or (iii) as to which a Fundamental Change Purchase Notice or a Specified Date Purchase Notice has been delivered and not withdrawn, in each case, except to the extent any portion of such Note is not subject to the foregoing.

(v) The Trustee will have no obligation or duty to monitor, determine or inquire as to compliance with any restrictions on transfer imposed under this Indenture or under applicable law with respect to any transfer of any interest in any Note (including any transfers between or among Depositary participants or beneficial owners of interests in any Global Note) other than to require delivery of such certificates and other documentation or evidence as are expressly required by, and to do so if and when expressly required by the terms of, this Indenture, and to examine the same to determine substantial compliance as to form with the express requirements hereof.

(b) In General; Transfer and Exchange of Beneficial Interests in Global Notes. So long as the Notes are eligible for book-entry settlement with the Depositary, unless otherwise required by law, except to the extent required by Section 2.11(c):

(i) all Notes will be represented by one or more Global Notes;

(ii) every transfer and exchange of a beneficial interest in a Global Note will be effected through the Depositary in accordance with the Applicable Procedures and the provisions of this Indenture (including the restrictions on transfer set forth in Section 2.07); and

(iii) each Global Note may be transferred only as a whole and only (A) by the Depositary to a nominee of the Depositary, (B) by a nominee of the Depositary to the Depositary or to another nominee of the Depositary, or (C) by the Depositary or any such nominee to a successor Depositary or a nominee of such successor Depositary.

(i) Notwithstanding any other provision of this Indenture, each Global Note will be exchanged for Physical Notes if the Depositary delivers notice to the Company that:

(A) the Depositary is unwilling or unable to continue to act as Depositary; or

(B) the Depositary is no longer registered as a clearing agency under the Exchange Act or is otherwise no longer permitted under applicable law to continue as Depositary for such Global Note;

and, in each case, the Company promptly delivers a copy of such notice to the Trustee and the Company fails to appoint a successor Depositary within 90 days after receiving notice from the Depositary.

In each such case, each Global Note will be deemed surrendered to the Trustee for cancellation, and the Trustee will cause each Global Note to be cancelled in accordance with the Applicable Procedures and the Trustee’s applicable procedures, and the Company, in accordance with Section 2.04, will promptly execute, and, upon receipt of a Company Order, the Trustee will, in accordance with Section 2.04, will promptly authenticate and deliver, for each beneficial interest in each Global Note so exchanged, an aggregate principal amount of Physical Notes equal to the aggregate principal amount of such beneficial interest, registered in such names and in such authorized denominations as the Depositary specifies, and bearing any legends that such Physical Notes are required to bear under Section 2.07.

(ii) In addition, if (x) the Company, in its sole discretion, notifies the Trustee in writing that it wishes to terminate and exchange all or part of a Global Note for Physical Notes and the beneficial owners of the majority of the principal amount of such Global Note (or portion thereof) to be exchanged consent to such exchange, the Company may exchange all beneficial interests in such Global Note (or portion thereof) for Physical Notes by delivering a written request to the Registrar or (y) an Event of Default has occurred with regard to the Notes represented by the relevant Global Note and such Event of Default has not been cured or waived, any owner of a beneficial interest in a Global Note may deliver a written request to the Registrar to exchange such beneficial interest for Physical Notes.

In such case, (A) the Registrar will deliver notice of such request to the Company and the Trustee, which notice will identify the aggregate principal amount of such beneficial interest and the CUSIP of the relevant Global Note; (B) the Company will, in accordance with Section 2.04, promptly execute, and, upon receipt of a Company Order, the Trustee, in accordance with Section 2.04, will promptly authenticate and deliver, to such owner, for the beneficial interest so exchanged by such owner, Physical Notes registered in such owner’s name having an aggregate principal amount equal to the aggregate principal amount of such beneficial interest and bearing any legends that such Physical Notes are required to bear under Section 2.07, and (C) the Registrar, in accordance with the Applicable Procedures, will cause the principal amount of such Global Note to be decreased by the aggregate principal amount of the beneficial interest so exchanged. If all of the beneficial interests in a Global Note are so exchanged, such Global Note will be deemed surrendered to the Trustee for cancellation, and the Trustee will cause such Global Note to be cancelled in accordance with the Applicable Procedures.

(d) Transfer and Exchange of Physical Notes .

(i) If Physical Notes are issued, a Holder may transfer a Physical Note by: (A) surrendering such Physical Note for registration of transfer to the Registrar, together with any endorsements or instruments of transfer required by any of the Company, the Trustee or the Registrar; (B) if such Physical Note is a Restricted Note, delivering any documentation that the Company, the Trustee or the Registrar require to ensure that such transfer complies with Section 2.07 and any applicable securities laws; and (C) satisfying all other requirements for such transfer set forth in this Section 2.11 and Section 2.07. Upon the satisfaction of conditions (A), (B) and (C), the Company, in accordance with Section 2.04, will promptly execute and deliver to the Trustee, and the Trustee, upon receipt of a Company Order, will, in accordance with Section 2.04, promptly authenticate and deliver, in the name of the designated transferee or transferees, one or more new Physical Notes, of any authorized denomination, having like aggregate principal amount and bearing any restrictive legends required by Section 2.07 and/or the Form of Note attached hereto as Exhibit A .

(ii) If Physical Notes are issued, a Holder may exchange a Physical Note for other Physical Notes of any authorized denominations and aggregate principal amount equal to the aggregate principal amount of the Notes to be exchanged by surrendering such Notes, together with any endorsements or instruments of transfer required by any of the Company, the Trustee or the Registrar, at any office or agency maintained by the Company for such purposes pursuant to Section 5.02. Whenever a Holder surrenders Notes for exchange, the Company, in accordance with Section 2.04, will promptly execute and deliver to the Trustee, and the Trustee, upon receipt of a Company Order, will, in accordance with Section 2.04, promptly authenticate and deliver the Notes that such Holder is entitled to receive, bearing registration numbers not contemporaneously outstanding and any restrictive legends that such Physical Notes are to bear under Section 2.07.

(iii) If Physical Notes are issued, a Holder may transfer or exchange a Physical Note for a beneficial interest in a Global Security by (A) surrendering such Physical Note for registration of transfer or exchange, together with any endorsements or instruments of transfer required by any of the Company, the Trustee or the Registrar, at any office or agency maintained by the Company for such purposes pursuant to Section 5.05; (B) if such Physical Note is a Restricted Note, delivering any documentation the Company, the Trustee or the Registrar reasonably require to ensure that such transfer complies with Section 2.07 and any applicable securities laws; (C) satisfying all other requirements for such transfer set forth in this Section 2.11 and Section 2.07; and (D) providing written instructions to the Trustee to make, or to direct the Registrar to make, an adjustment in its books and records with respect to the applicable Global Note to reflect an increase in the aggregate principal amount of the Notes represented by such Global Note, which instructions will contain information regarding the Depositary account to be credited with such increase. Upon the satisfaction of conditions (A), (B), (C) and (D), the Trustee will cancel such Physical Note and cause, or direct the Registrar to cause, in accordance with the Applicable Procedures, the aggregate principal amount of Notes represented by such Global Note to be increased by the aggregate principal amount of such Physical Note, and will credit or cause to be credited the account of the Person specified in the instructions provided by the exchanging Holder in an amount equal to the aggregate principal amount of such Physical Note. If no Global Notes are then Outstanding, the Company, in accordance with Section 2.04, will promptly execute and deliver to the Trustee, and the Trustee, upon receipt of a Company Order, will, in accordance with Section 2.04, authenticate, a new Global Note in the appropriate aggregate principal amount.

Section 2.12 Cancellation . The Company at any time may deliver to the Trustee for cancellation any Notes previously authenticated and delivered hereunder that the Company may have acquired in any manner whatsoever, and may deliver to the Trustee for cancellation any Notes previously authenticated hereunder which the Company has not issued and sold. The Trustee shall cancel all Notes surrendered for registration of transfer, exchange, payment, purchase, repurchase, conversion or cancellation in accordance with its customary practices. If the Company shall acquire any of the Notes, such acquisition shall not operate as a redemption or satisfaction of the indebtedness represented by such Notes unless and until the same are delivered to the Trustee for cancellation. The Notes so acquired, while held by or on behalf of the Company or any of its Subsidiaries, shall not entitle the Holder thereof to convert the Notes. The Company may not issue new Notes to replace Notes it has paid in full or delivered to the Trustee for cancellation. The Company may from time to time repurchase Notes in open market purchases or negotiated transactions without giving prior notice to Holders.

The Registrar shall retain, in accordance with its customary procedures, copies of all letters, notices and other written communications received pursuant to this Section 2.12. The Company shall have the right to inspect and make copies of all such letters, notices or other written communications at any reasonable time upon the giving of reasonable written notice to the Registrar.

Section 2.13 CUSIP Numbers . In issuing the Notes, the Company may use “CUSIP” numbers (if then generally in use), and, if so, the Trustee shall use “CUSIP” numbers in notices of redemption as a convenience to Holders; provided that the Trustee shall have no liability for any defect in the CUSIP numbers as they appear on any Notes, notice, or elsewhere and; provided , further , that any such notice may state that no representation is made as to the correctness of such numbers either as printed on the Notes or as contained in any notice of a redemption and that reliance may be placed only on the other identification numbers printed on the Notes, and any such redemption shall not be affected by any defect in or omission of such numbers. The Company will promptly notify the Trustee in writing of any change in the “CUSIP” numbers.

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Section 2.14 Payment and Computation of Interest . The Notes will bear cash interest at a rate of 3.00% per year until maturity. Interest on the Notes will accrue from the most recent date on which interest has been paid or duly provided for or, if no interest has been paid or duly provided for, the Issue Date for such Notes. Interest will be paid to the Person in whose name a Note is registered at the Close of Business on the Regular Record Date immediately preceding the relevant Interest Payment Date semiannually in arrears on each Interest Payment Date; provided that, if any Interest Payment Date, Maturity Date, Fundamental Change Purchase Date or Specified Purchase Date of a Note falls on a day that is not a Business Day, the required payment will be made on the next succeeding Business Day and no interest on such payment will accrue in respect of the delay. Interest on the Notes shall be computed on the basis of a 360-day year consisting of twelve 30-day months; provided , however , that, for any period in which a particular interest rate is applicable for less than a full semiannual period, interest on the Notes will be computed on the basis of a 30-day month and, for periods of less than a month, the actual number of days elapsed over a 30-day month.

Section 2.15 Contingent Interest

(a) Contingent interest on the Notes (“ Contingent Interest ”) shall accrue and the Company shall pay such Contingent Interest to the Holders as follows:

(i) beginning with the six-month interest payment period commencing November 15, 2020, during any six-month interest payment period with respect to which the arithmetic average of the Trading Prices for each Trading Day during the period of 10 consecutive Trading Days beginning on, and including, the 12th Scheduled Trading Day, immediately preceding the first day of such six-month interest payment period is greater than or equal to the Upside Trigger, in which case the Contingent Interest payable on each $1,000 principal amount of Notes for such six-month interest payment period shall be equal to 0.45% per annum of such arithmetic average of the Trading Prices;

(ii) at any time Notes are Outstanding, upon the declaration by the Company’s Board of Directors of an extraordinary cash dividend or distribution to all or substantially all holders of the Common Stock that the Company’s Board of Directors designates as payable with respect to the Notes (an “ Extraordinary Dividend ”), in which case such Contingent Interest shall be payable on the same date as, and in an amount equal to, the dividend or distribution that a Holder would have received if such Holder held a number of shares of Common Stock equal to the applicable Conversion Rate, multiplied by the principal amount (expressed in thousands) of Notes held by such Holder.

The Company shall promptly notify the Trustee and the Holders in writing upon any determination that Contingent Interest on the Notes will accrue during a six-month interest payment period and upon any declaration by the Company’s Board of Directors of an Extraordinary Dividend.

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(b) The Company shall provide written notice to the Bid Solicitation Agent (if other than the Company) of the three independent nationally recognized securities dealers selected by the Company in accordance with the definition of Trading Price, along with the appropriate contact information for each. The Bid Solicitation Agent shall have no obligation to determine the Trading Price of the Notes for purposes of determining whether Contingent Interest is payable on the Notes unless the Company has requested such determination in writing and the Company shall have no obligation to determine the Trading Price of the Notes for purposes of determining whether Contingent Interest is payable or to request the Bid Solicitation Agent to determine the Trading Price on behalf of the Company unless a Holder provides the Company with reasonable evidence that the Trading Price is greater than or equal to the Upside Trigger, at which time the Company shall determine or instruct the Bid Solicitation Agent to determine, as applicable, the Trading Price of the Notes in the manner described in the definition of “Trading Price” in Section 1.01 beginning on the next Trading Day and on each successive Trading Day until the Trading Price of the Notes is less than the Upside Trigger. Neither the Trustee nor the Conversion Agent shall have any obligation to determine the Trading Price of the Notes.

(c) Payment of Contingent Interest . Contingent Interest for any six-month interest payment period shall be paid on the applicable Interest Payment Date to the Holder in whose name any Note is registered on the Register at the corresponding Regular Record Date. Contingent Interest due under this Article 2 shall be treated for all purposes of this Indenture like any other interest accruing on the Notes.

Section 2.15 Business Day

(a) If any Interest Payment Date, the Maturity Date, any Fundamental Change Purchase Date, Specified Purchase Date or Redemption Date falls on a day that is not a Business Day, the required payment will be made on the next succeeding Business Day and no interest on such payment will accrue in respect of the delay.

Section 2.17 Tax Treatment . The Company agrees, and by purchasing a beneficial interest in the Notes each Holder, and any individual or entity that acquires a direct or indirect interest in the Notes, will be deemed to have agreed:

(a) for U.S. federal income tax purposes, to treat the Notes as indebtedness of the Company that is subject to U.S. Treasury Regulations Section 1.1275-4 (the “ Contingent Debt Regulations ”);

(b) for purposes of the Contingent Debt Regulations, to treat the fair market value of any shares of Common Stock and cash received upon any conversion of the Notes as a contingent payment;

(c) to be bound by the Company’s determination that the Notes are “contingent payment debt instruments” subject to the “noncontingent bond method” within the meanings of the Contingent Debt Regulations; and

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(d) to be bound by the Company’s calculation of the comparable yield and projected payment schedule with respect to the Notes unless such person discloses to the Internal Revenue Service an alternative comparable yield or projected payment schedule pursuant to U.S. Treasury Regulations Section 1.1275-4(b)(4)(iv).

Section 2.18 Comparable Yield and Projected Payment Schedule . Solely for purposes of applying the Contingent Debt Regulations to the Notes:

(a) the Company has determined the comparable yield of the Notes to be 8.25%, compounded semi-annually and has prepared a projected payment schedule using that comparable yield; and

(b) the Company acknowledges and agrees, and each Holder and any beneficial owner of a Note, by its purchase of a Note, shall be deemed to acknowledge and agree, that (A) the comparable yield and the projected payment schedule are not determined for any purpose other than for the purpose of applying the Contingent Debt Regulations to the Notes; and (B) the comparable yield and the projected payment schedule do not constitute a projection or representation by the Company regarding the future price of the Common Stock or the actual amounts payable on the Notes.

Holders that wish to obtain the amount of original issue discount, issue price, issue date, comparable yield and projected payment schedule may do so by submitting a written request to the Company at the following address: SEACOR Holdings Inc., ATTN: Chief Financial Officer, 2200 Eller Drive, P.O. Box 13038, Fort Lauderdale, Florida 33316.

Section 2.19 Calculation of Original Issue Discount . The Company shall file with the Trustee promptly at the end of each calendar year (i) a written notice specifying the amount of original issue discount (including daily rates and accrual periods) accrued on Notes then Outstanding as of the end of such year and (ii) such other specific information relating to such original issue discount as, in the case of each of clauses (i) and (ii), may then be required to be provided to the Internal Revenue Service under the Internal Revenue Code of 1986, as amended from time; provided that failure to file any such notice or information with the Trustee shall not constitute a Default or Event of Default hereunder.

ARTICLE 3.

REPURCHASE AT THE OPTION OF THE HOLDERS

Section 3.01 Purchase at Option of Holders upon a Fundamental Change . If a Fundamental Change occurs at any time, then each Holder shall have the right, at such Holder’s option, to require the Company to purchase for cash all of such Holder’s Notes, or any portion thereof such that the remaining principal amount of each Note that is not purchased in full equals $1,000 or an integral multiple of $1,000 in excess thereof, on a date (the “ Fundamental Change Purchase Date ”) specified by the Company that is not less than 20 Business Days or more than 35 Business Days following the date on which the Company delivers the Fundamental Change Company Notice, at a purchase price equal to 100% of the principal amount thereof, plus

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accrued and unpaid interest thereon, if any, to, but excluding, the Fundamental Change Purchase Date (the “ Fundamental Change Purchase Price ”); provided , however , that, if the Company purchases a Note on a Fundamental Change Purchase Date that is after a Regular Record Date and on or prior to the Interest Payment Date corresponding to such Regular Record Date, the Company shall instead pay such accrued and unpaid interest on such Note on the Interest Payment Date to the Holder of record of such Note as of such Regular Record Date and the Fundamental Change Purchase Price shall then be equal to 100% of the principal amount of the Note the Company purchases on such Fundamental Change Purchase Date. Notwithstanding the foregoing, there shall be no purchase of any Notes pursuant to this Section 3.01 if the principal amount of the Notes has been accelerated, and such acceleration has not been rescinded, on or prior to the Fundamental Change Purchase Date (except in the case of an acceleration resulting from a Default by the Company in the payment of the Fundamental Change Purchase Price with respect to such Notes). The Paying Agent will promptly return to the respective Holders thereof any Physical Notes held by it during the acceleration of the Notes (except in the case of an acceleration resulting from a Default by the Company in the payment of the Fundamental Change Purchase Price with respect to such Notes) and shall deem to be cancelled any instructions for book-entry transfer of the Notes in compliance with the Applicable Procedures, in which case, upon such return or cancellation, as the case may be, the Fundamental Change Purchase Notice with respect thereto shall be deemed to have been withdrawn.

Section 3.02 Fundamental Change Company Notice .

(a) General . On or before the 15th calendar day after the occurrence of a Fundamental Change, the Company shall provide to all Holders of the Notes, the Trustee and the Paying Agent (in the case of any Paying Agent other than the Trustee) a written notice (the “ Fundamental Change Company Notice ”) of the occurrence of such Fundamental Change and of the purchase right at the option of the Holders arising as a result thereof. Such notice shall be sent by first class mail or, in the case of any Global Notes, in accordance with the Applicable Procedures for providing notices. Simultaneously with providing such Fundamental Change Company Notice, the Company shall publish a press release and publish such information on the Company’s website. Each Fundamental Change Company Notice shall specify:

(i) the events causing the Fundamental Change;

(ii) the Effective Date of the Fundamental Change, and whether the Fundamental Change is a Make-Whole Fundamental Change, in which case the Effective Date of the Make-Whole Fundamental Change;

(iii) the last date on which a Holder of Notes may exercise the purchase right pursuant to Section 3.01;

(iv) the Fundamental Change Purchase Price;

(v) the Fundamental Change Purchase Date;

(vi) the name and address of the Paying Agent and the Conversion Agent, if applicable;

(vii) the applicable Conversion Rate and any adjustments to the applicable Conversion Rate resulting from the Fundamental Change;

(viii) if applicable, that the Notes with respect to which a Fundamental Change Purchase Notice has been delivered by a Holder may be converted only if the Holder withdraws the Fundamental Change Purchase Notice in accordance with this Indenture;

(ix) that the Holder must exercise the purchase right prior to the Fundamental Change Expiration Time;

(x) that the Holder shall have the right to withdraw any Notes surrendered for purchase prior to the Fundamental Change Expiration Time; and

(xi) the procedures that Holders must follow to require the Company to purchase their Notes.

(b) No failure of the Company to give the foregoing notices and no defect therein shall limit the Holders’ repurchase rights or affect the validity of the proceedings for the repurchase of the Notes pursuant to Section 3.01.

(c) At the Company’s written request, the Trustee shall give such notice in the Company’s name and at the Company’s expense; provided , however , that, in all cases, the text of such Fundamental Change Company Notice shall be prepared by the Company; provided , further , that the Company shall have delivered to the Trustee, at least five (5) Business Days before the Fundamental Change Company Notice is required to be mailed (or such shorter period agreed to by the Trustee), an Officer’s Certificate requesting that the Trustee give such notice and setting forth the complete form of such notice and the information to be stated in such notice. Neither the Trustee nor the Paying Agent shall be responsible for determining if a Fundamental Change has occurred or for delivering a Fundamental Change Company Notice to Holders.

Section 3.03 Repurchase at Option of Holders on Specified Purchase Dates .

(a) On November 19, 2020 and November 20, 2023 (each a “ Specified Purchase Date ”), each Holder shall have the right, at such Holder’s option, to require the Company to repurchase for cash all of such Holder’s Notes, or any portion thereof so long as the principal amount of such Holder’s Notes not submitted for repurchase equals $1,000 or an integral multiple of $1,000 in excess thereof, at a repurchase price equal to 100% of the principal amount thereof, plus accrued and unpaid interest thereon, if any, to but excluding, the Specified Purchase Date (the “ Specified Date Purchase Price ”).

(b) Notwithstanding the foregoing, no Notes may be repurchased by the Company on any Specified Purchase Date if the principal amount of the Notes has been accelerated, and such acceleration has not been rescinded, on or prior to such date (except in the case of an acceleration resulting from a Default by the Company in the payment of the Specified Date Purchase Price with respect to such Notes). The Paying Agent will promptly return to the respective Holders thereof any Physical Notes held by it during the acceleration of the Notes (except in the case of an acceleration resulting from a Default by the Company in the payment of the Specified Date Purchase Price with respect to such Notes), or any instructions for book-entry transfer of the Notes in compliance with the Applicable Procedures shall be deemed to have been cancelled, and, upon such return or cancellation, as the case may be, the Specified Date Purchase Notice with respect thereto shall be deemed to have been withdrawn.

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Section 3.04 Specified Date Purchase Company Notice .

(a) On or before the 25th Business Day prior to each Specified Purchase Date, the Company shall give notice (the “ Specified Date Purchase Company Notice ”) to all Holders of Notes and the Trustee and the Paying Agent (in the case of a Paying Agent other than the Trustee) at the applicable address shown in the Register of the Registrar of the Specified Purchase Date and the repurchase right at the option of the Holders arising as a result thereof. Such notice shall be by first class mail or, in the case of Global Notes, in accordance with the Applicable Procedures of the Depositary. Simultaneously with providing such Fundamental Change Company Notice, the Company shall publish a press release and publish such information on the Company’s website. Each Specified Date Purchase Company Notice shall specify:

(i) the applicable Specified Purchase Date;

(ii) that Holders have the right to require the Company to purchase all or any portion of their Notes pursuant to Section 3.03;

(iii) the last date on which a Holder may exercise the repurchase right pursuant to this Article 3;

(iv) the Specified Date Purchase Price;

(v) if applicable, the name and address of the Paying Agent and the Conversion Agent;

(vi) whether the Notes are convertible at such time and the applicable Conversion Rate;

(vii) if applicable, that the Notes with respect to which a Specified Date Purchase Notice has been delivered by a Holder may be converted only if the Holder withdraws the Specified Date Purchase Notice in accordance with the terms of this Indenture; and

(viii) the procedures that Holders must follow to require the Company to repurchase their Notes.

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requesting that the Trustee give such notice and setting forth the complete form of such notice and the information to be stated in such notice. Neither the Trustee nor the Paying Agent shall be responsible for determining if a Specified Purchase Date is forthcoming or has occurred or for delivering a Specified Date Purchase Company Notice to Holders.

Section 3.05 Repurchase Procedures .

(d) Purchases of Notes under Section 3.01 or Section 3.03, as applicable, shall be made, at the option of the Holder thereof, upon:

(vii) if the Notes to be purchased are Physical Notes, delivery to the Paying Agent by the Holder of (x) a duly completed notice (the “ Fundamental Change Purchase Notice ”) or (y) duly completed notice (the “ Specified Date Purchase Notice ”), as applicable, in the form set forth in Attachment 2 , or in Attachment 3 , as applicable to the Form of Note attached hereto as Exhibit A , duly endorsed for transfer, prior to Close of Business on the Business Day immediately preceding the (x) Fundamental Change Purchase Date, (the “ Fundamental Change Expiration Time ”) or (y) the applicable Specified Purchase Date (the “ Specified Purchase Date Expiration Time ”), as applicable; and

(viii) if the Notes to be purchased are Global Notes, delivery of the Notes, by book-entry transfer, in compliance with the Applicable Procedures and the satisfaction of any other requirements of the Depositary in connection with tendering beneficial interests in a Global Note for purchase, by the Fundamental Change Expiration Time or the Specified Purchase Date Expiration Time, as applicable.

The Fundamental Change Purchase Notice or the Specified Date Purchase Notice, as applicable, in respect of any Notes to be purchased shall state:

(i) if certificated, the certificate numbers of such Notes;

(ii) the portion of the principal amount of such Notes to be purchased, which must be such that the principal amount of each Note that is not to be purchased in full equals $1,000 or an integral multiple of $1,000 in excess thereof; and

(iii) that such Notes are to be purchased by the Company pursuant to the applicable provisions of the Notes and this Indenture.

(b) Notice to Company . The Paying Agent shall promptly notify the Company of the receipt by it of any Fundamental Change Purchase Notice or Specified Date Purchase Notice or written notice of withdrawal thereof.

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Section 3.06 Effect of Fundamental Change Purchase Notice or Specified Date Purchase Notice . Upon receipt by the Paying Agent of a Fundamental Change Purchase Notice specified in Section 3.05 or a Specified Date Purchase Notice specified in Section 3.05, the Holder of the Note in respect of which such Fundamental Change Purchase Notice or such Specified Date Purchase Notice was given shall (unless such Fundamental Change Purchase Notice or such Specified Date Purchase Notice, as applicable, is withdrawn in accordance with Section 3.07) thereafter be entitled to receive solely the Fundamental Change Purchase Price or the Specified Date Purchase Price, as applicable, in cash with respect to such Note (and any previously accrued and unpaid interest on such Note). Such Fundamental Change Purchase Price or such Specified Date Purchase Price, as applicable, shall be paid to such Holder, subject to receipt of funds by the Paying Agent, on the later of (x) the applicable Fundamental Change Purchase Date (provided the conditions in this Article 3 have been satisfied, and subject to extensions to comply with applicable law) or the applicable Specified Purchase Date (provided the conditions in Article 3 have been satisfied, and subject to extensions to comply with applicable law)and (y) the time of delivery or book-entry transfer of such Note to the Paying Agent by the Holder thereof in the manner required by Section 3.01.

Section 3.07 Withdrawal of Fundamental Change Purchase Notice or Specified Date Purchase Notice . A Fundamental Change Purchase Notice or a Specified Date Purchase Notice may be withdrawn (in whole or in part) by means of a written notice of withdrawal delivered to the Paying Agent in accordance with the Fundamental Change Company Notice or the Specified Date Purchase Company Notice, as applicable, at any time prior to the Fundamental Change Expiration Time or the Specified Date Purchase Expiration Time, as applicable, specifying:

(a) the principal amount of the Notes with respect to which such notice of withdrawal is being submitted;

(b) if certificated, the certificate numbers of the withdrawn Notes; and

(c) the principal amount, if any, of each Note that remains subject to the Fundamental Change Purchase Notice or the Specified Date Purchase Notice, as applicable, which must be such that the principal amount not to be purchased equals $1,000 or an integral multiple of $1,000 in excess thereof;

provided , however , that, if the Notes are Global Notes, the notice must comply with the Applicable Procedures.

The Paying Agent will promptly return to the respective Holders thereof any Physical Notes with respect to which a Fundamental Change Purchase Notice or a Specified Date Purchase Notice, as applicable, has been withdrawn in compliance with the provisions of this Section 3.07.

Section 3.08 Deposit of Fundamental Change Purchase Price . Prior to 10:00 a.m., New York City time, on the Fundamental Change Purchase Date or the Specified Purchase Date, as applicable, the Company shall deposit with the Paying Agent (or, if the Company or a Subsidiary or an Affiliate of either of them is acting as the Paying Agent, shall segregate and hold in trust as provided herein) an amount of money (in immediately available funds if deposited on such Business Day) sufficient to pay the Fundamental Change Purchase Price or the Specified Date Purchase Price, as applicable, of all the Notes or portions thereof that are to be purchased as of the Fundamental Change Purchase Date or the Specified Purchase Date, as applicable. If the Paying Agent holds cash sufficient to pay the Fundamental Change Purchase Price or the Specified Date Purchase Price, as applicable, of the Notes for which a Fundamental Change Purchase Notice or a Specified Date Purchase Notice has been tendered and not withdrawn in accordance with this Indenture on the Fundamental Change Purchase Date or the Specified Purchase Date, as applicable, then as of such Fundamental Change Purchase Date or the Specified Purchase Date, as applicable, (a) such Notes will cease to be Outstanding and interest will cease to accrue thereon (whether or not book-entry transfer of such Notes is made or such Notes have been delivered to the Paying Agent) and (b) all other rights of the Holders in respect thereof will terminate (other than the right to receive the Fundamental Change Purchase Price or the Specified Date Purchase Price, as applicable, and any previously accrued and unpaid interest on such Notes upon delivery or book-entry transfer of such Notes).

Section 3.09 Notes Purchased in Whole or in Part . Any Note that is to be purchased pursuant to this Article 3, whether in whole or in part, shall be surrendered at the office of the Paying Agent (with due endorsement by, or a written instrument of transfer in form satisfactory to the Company and the Trustee duly executed by, the Holder thereof or such Holder’s attorney duly authorized in writing) and, to the extent that only a part of the Note so surrendered is to be purchased, the Company shall execute and, upon receipt of a Company Order, the Trustee shall authenticate and deliver to the Holder of such Note, without service charge, a new Note or Notes, of any authorized denomination as requested by such Holder in aggregate principal amount equal to, and in exchange for, the portion of the principal amount of the Note so surrendered that is not purchased.

Section 3.10 Covenant To Comply with Applicable Laws upon Purchase of Notes . In connection with any offer to purchase Notes under Sections 3.01 or 3.03, the Company shall, in each case if required by law, (i) comply with Rule 13e-4, Rule 14e-1 and any other tender offer rules under the Exchange Act that may then be applicable, (ii) file a Schedule TO or any other required schedule under the Exchange Act and (iii) otherwise comply with all U.S. federal or state securities laws applicable to the Company in connection with such purchase offer, in each case, so as to permit the rights and obligations under this Article 3 to be exercised in the time and in the manner specified this Article 3.

Section 3.11 Repayment to the Company . To the extent that the aggregate amount of cash deposited by the Company pursuant to Section 3.08 exceeds the aggregate Fundamental Change Purchase Price or the Specified Date Purchase Price, as applicable, of the Notes or portions thereof that the Company is obligated to purchase as of the Fundamental Change Purchase Date or the Specified Purchase Date, as applicable, then, following the Fundamental Change Purchase Date or the Specified Purchase Date, as applicable, the Paying Agent shall promptly return any such excess to the Company.

ARTICLE 4.
CONVERSION

Section 4.01 Right To Convert . (a) Subject to and upon compliance with the provisions of the Indenture, each Holder shall have the right, at such Holder’s option, to convert its Notes, or any portion of its Notes such that the principal amount that remains Outstanding of each Note that is not converted in full equals $1,000 or an integral multiple of $1,000 in excess thereof, into the Settlement Amount determined in accordance with Section 4.03(a)(ii) hereof, (x) prior to the Close of Business on the Business Day immediately preceding August 15, 2028, only upon satisfaction of one or more of the conditions described in Section 4.01(b) hereof, and (y) on or after August 15, 2028, at any time prior to the Close of Business on the second Scheduled Trading Day immediately preceding the Maturity Date regardless of the conditions described in Section 4.01(b) hereof.

(b) (i) A Holder may surrender Notes for conversion during any fiscal quarter commencing after March 31, 2014 (and only during such fiscal quarter) if the Last Reported Sale Price of the Common Stock for at least 20 Trading Days (whether or not consecutive) during the period of 30 consecutive Trading Days ending on the last Trading Day of the immediately preceding fiscal quarter is greater than or equal to 130% of the applicable Conversion Price in effect on each applicable Trading Day.

(ii) A Holder may surrender Notes for conversion during the five consecutive Business Day period after any five consecutive Trading Day period (the “ Measurement Period ”) in which the Trading Price per $1,000 principal amount of Notes, as determined following a request by a Holder in accordance with the procedures set forth in this Section 4.01(b)(ii), for each Trading Day of such Measurement Period was less than 98% of the product of (x) the Last Reported Sale Price of the Common Stock on such Trading Day and (y) the Conversion Rate in effect on such Trading Day. The Trading Price shall be determined by the Company or the Bid Solicitation Agent, as applicable, pursuant to this Section 4.01(b)(ii) and the definition of “Trading Price” set forth in Section 1.01 hereof. The Company shall provide written notice to the Bid Solicitation Agent (if other than the Company) of the three independent nationally recognized securities dealers selected by the Company in accordance with the definition of Trading Price, along with the appropriate contact information for each. The Bid Solicitation Agent (if other than the Company) shall have no obligation to determine the Trading Price of the Notes unless the Company has

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requested such determination in writing; and the Company shall have no obligation to make such request (or, if the Company is the Bid Solicitation Agent, to determine the Trading Price of the Notes) unless a Holder of a Note provides it with reasonable evidence that the Trading Price per $1,000 principal amount of Notes would be less than 98% of the product of (x) the Last Reported Sale Price of the Common Stock on such Trading Day and (y) the Conversion Rate in effect on such Trading Day. At such time, the Company shall instruct the Bid Solicitation Agent to determine (or, if the Company is the Bid Solicitation Agent, the Company shall determine) the Trading Price per $1,000 principal amount of the Notes beginning on the next Trading Day and on each successive Trading Day until the Trading Price per $1,000 principal amount of Notes for a Trading Day is greater than or equal to 98% of the product of (x) the Last Reported Sale Price of the Common Stock on such Trading Day and (y) the Conversion Rate in effect on such Trading Day. Whenever the condition to conversion set forth in this Section 4.01(b)(ii) has been met, the Company shall so notify the Holders, the Trustee and the Conversion Agent (if other than the Trustee) in writing. If, at any time after the condition to conversion set forth in this Section 4.01(b)(ii) has been met, the condition to conversion set forth in this Section 4.01(b) (ii) ceases to be met, the Company will so notify the Holders, the Trustee and the Conversion Agent (if other than the Trustee) in writing on the first Trading Day on which such condition ceases to be met. None of the Trustee nor the Conversion Agent shall have any obligation to determine the Trading Price of the Notes.

(iii) If the Company elects to (x) issue to all or substantially all holders of the Common Stock any rights, options or warrants entitling them for a period of not more than 45 calendar days after the date of such issuance to subscribe for or purchase shares of the Common Stock, at a price per share less than the average of the Last Reported Sale Prices of the Common Stock for the 10 consecutive Trading Day period ending on, and including, the Trading Day immediately preceding the date of announcement of such issuance; or (y) distribute to all or substantially all holders of the Common Stock the Company’s assets, debt securities or rights to purchase the Company’s securities, which distribution has a per share value, as reasonably determined by the Board of Directors, exceeding 10% of the Last Reported Sale Price of the Common Stock on the Trading Day immediately preceding the date of announcement for such distribution, then, in either case, the Company must deliver notice of such issuance or distribution, and of the Ex-Dividend Date for such issuance or distribution, to the Holders at least 60 Scheduled Trading Days prior to the Ex-Dividend Date for such issuance or distribution. After the Company has delivered such notice, Holders may surrender their Notes for conversion at any time until the earlier of (a) Close of Business on the Business Day immediately preceding such Ex-Dividend Date and (b) the Company’s announcement that such issuance or distribution will not take place, even if the Notes are not otherwise convertible at such time; provided , however , that Holders may not convert their Notes pursuant to this Section 4.01(b)(iii) if the Company provides that Holders shall

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participate, at the same time and upon the same terms as holders of the Common Stock, and as a result of holding the Notes, in the relevant issuance or distribution without having to convert their Notes as if they held a number of shares of the Common Stock equal to the Conversion Rate in effect on the Ex-Dividend Date for such issuance or distribution multiplied by the principal amount (expressed in thousands) of Notes held by such Holder .

(iv) If (x) a Make-Whole Fundamental Change occurs or (y) the Company is a party to (a) a consolidation, merger or binding share exchange, pursuant to which the Common Stock would be converted into cash, securities or other assets or (b) a sale, conveyance, transfer or lease of all or substantially all of the assets of the Company and its Subsidiaries to another person (other than any of the Company’s Subsidiaries), the Notes may be surrendered for conversion at any time from or after the date that is 55 Scheduled Trading Days prior to the anticipated effective date of such transaction (or, if later, the Business Day after the Company gives notice of such transaction) until the Close of Business (x) if such transaction or event is a Fundamental Change, on the Business Day immediately preceding the Fundamental Change Purchase Date, and (y) otherwise, on the 35th Business Day immediately following the effective date for such transaction or event. The Company shall notify the Holders and the Trustee in writing of any such transaction or event:

(A) as promptly as practicable following the date the Company publicly announces such transaction but, if the Company has knowledge of, and has publicly announced, such transaction at least 60 Scheduled Trading Days prior to the anticipated effective date of such transaction, in no event less than 60 Scheduled Trading Days prior to such anticipated effective date; or

(B) if the Company does not have knowledge of, or has not publicly announced, such transaction at least 60 Scheduled Trading Days prior to the anticipated effective date of such transaction, within three Business Days of the date upon which the Company receives notice, or otherwise becomes aware, of such transaction, but in no event later than the actual effective date of such transaction.

(v) If the Company calls the Notes for redemption pursuant to Article 10, Holders will have the right to surrender their Notes for conversion at any time prior to the Close of Business on the second Business Day immediately preceding the Redemption Date, even if the Notes are not otherwise convertible at such time, after which time the Holders will no longer have the right to convert their Notes on account of the Company’s delivery of a Redemption Notice, unless the Company defaults in the payment of the Redemption Price.

Section 4.02 Conversion Procedures .

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(a) Each Note shall be convertible at the office of the Conversion Agent and, if applicable, in accordance with the Applicable Procedures.

(b) To exercise the conversion privilege with respect to a beneficial interest in a Global Note, the Holder must comply with the Applicable Procedures for converting a beneficial interest on a Global note and pay the funds, if any, required by Section 4.02(f) and any taxes or duties if required pursuant to Section 4.02(g), and the Conversion Agent must be informed of the conversion in accordance with the customary practice of the Depositary.

To exercise the conversion privilege with respect to any Physical Notes, the Holder of such Physical Notes shall:

(i) complete and manually sign a conversion notice in the form set forth in the Form of Notice of Conversion (the “ Conversion Notice ”) or a facsimile of the Conversion Notice, and make the certification as to whether such Holder is a U.S. Citizen or not a U.S. Citizen;

(ii) deliver the Conversion Notice, which is irrevocable, and the Note to the Conversion Agent;

(iii) if required, furnish appropriate endorsements and transfer documents;

(iv) if required, pay all transfer or similar taxes as set forth in Section 4.02(g); and

(v) if required, make any payment required under Section 4.02(f).

If, upon conversion of a Note, any shares of Common Stock are to be issued to a Person other than the Holder of such Note, the related Conversion Notice shall include such other Person’s name and address and a certification by such other Person as to whether such other Person is a U.S. Citizen or not a U.S. Citizen.

If a Note has been submitted for repurchase pursuant to a Fundamental Change Purchase Notice or a Specified Date Purchase Notice, such Note may not be converted except to the extent such Note has been withdrawn by the Holder and is no longer submitted for repurchase pursuant to a Fundamental Change Purchase Notice or a Specified Date Purchase Notice, as applicable, or unless such Fundamental Change Purchase Notice or Specified Date Purchase Notice, as applicable, is withdrawn in accordance with Section 3.07 hereof prior to the relevant Fundamental Change Expiration Time or Specified Purchase Date Expiration Time, as applicable.

For any Note, the date on which the Holder of such Note satisfies all of the applicable requirements set forth above with respect to such Note shall be the “Conversion Date” with respect to such Note.

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Each conversion shall be deemed to have been effected as to any such Notes (or portion thereof) surrendered for conversion at the Close of Business on the applicable Conversion Date; provided , however , that, except to the extent required by Section 4.05 hereof, the person in whose name any shares of Common Stock shall be issuable upon conversion, if any, shall be treated as a stockholder of record (i) as of the Close of Business on the last VWAP Trading Day of the applicable Observation Period in a Combination Settlement and (ii) as of the Close of Business on the Conversion Date in a Physical Settlement unless Section 4.04 hereof provides otherwise. For the avoidance of doubt, until a Holder is deemed to become the holder of record of shares of Common Stock issuable upon conversion of such Holder’s Notes as contemplated in the immediately preceding sentence and in Section 4.04 hereof, such Holder shall not have any rights as a holder of the Common Stock with respect to the shares of Common Stock issuable upon conversion of such Notes. At the Close of Business on the Conversion Date for a Note, the converting Holder shall no longer be the Holder of such Note.

(e) Endorsement . Any Notes surrendered for conversion shall, unless shares of Common Stock issuable on conversion are to be issued in the same name as the registration of such Notes, be duly endorsed by, or be accompanied by instruments of transfer in form satisfactory to the Company duly executed by, the Holder or its duly authorized attorney.

(f) Physical Notes . If any Physical Notes in a denomination greater than $1,000 shall be surrendered for partial conversion, the Company shall execute and the Trustee shall authenticate and deliver to the Holder of the Physical Notes so surrendered, without charge, new Physical Notes in authorized denominations in an aggregate principal amount equal to the unconverted portion of the surrendered Physical Notes.

(g) Global Notes . Upon the conversion of a beneficial interest in Global Notes, the Conversion Agent shall make a notation in its records as to the reduction in the principal amount represented thereby. The Company shall notify the Trustee in writing of any conversions of Notes effected through any Conversion Agent other than the Trustee.

(h) Interest Due Upon Conversion . If a Holder converts a Note after the Close of Business on a Regular Record Date but prior to the Open of Business on the Interest Payment Date corresponding to such Regular Record Date, such Holder must accompany such Note with an amount of cash equal to the amount of interest that will payable on such Note on the corresponding Interest Payment Date; provided , however , that a Holder need not make such payment (1) if the Conversion Date follows the Regular Record Date immediately preceding the Maturity Date; (2) if the Company has specified a Fundamental Change Purchase Date, the Specified Purchase Date or a Redemption Date that is after a Regular Record Date and on or prior to the third Business Day immediately following the corresponding Interest Payment Date; or (3) to the extent of any overdue interest, if any overdue interest exists at the time of conversion with respect to such Note.

(i) Taxes Due upon Conversion . If a Holder converts a Note, the Company will pay any documentary, stamp or similar issue or transfer tax due on the issue of any

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shares of the Common Stock upon the conversion, unless the tax is due because the Holder requests that any shares be issued in a name other than the Holder’s name, in which case the Holder will pay that tax.

Section 4.03 Settlement Upon Conversion .

(d) Settlement . Subject to this Section 4.03 and Sections 4.04, 4.06 and 4.07 hereof, upon conversion of any Note, the Company shall pay or deliver, as the case may be, to Holders, in full satisfaction of its conversion obligation under Section 4.01 hereof, in respect of each $1,000 principal amount of Notes being converted, a Settlement Amount consisting of, at the election of the Company, solely cash (“ Cash Settlement ”), solely shares of Common Stock (together with cash in lieu of any fractional share of Common Stock pursuant to Section 4.03(b)) (“ Physical Settlement ”) or a combination of cash and shares of Common Stock (“ Combination Settlement ”).

(viii) Settlement Election . All conversions occurring on or after August 15, 2028 shall be settled using the same Settlement Method. Prior to August 15, 2028, the Company will use the same Settlement Method for all conversions occurring on the same Conversion Date, but the Company shall not have any obligation to use the same Settlement Method with respect to conversions that occur on different Trading Days. If the Company elects a Settlement Method (a “ Settlement Election ”) and a Specified Dollar Amount, if applicable (a “ Specified Dollar Amount Election ”), the Company shall provide to the Holders so converting through the Trustee a notice of such Settlement Method (each such notice, a “ Settlement Election Notice ”) or such Specified Dollar Amount (each such notice, a “ Specified Dollar Amount Election Notice ”), no later than the Close of Business on the Scheduled Trading Day immediately following the related Conversion Date (or, in the case of any conversions occurring on or after August 15, 2028, no later than August 15, 2028). If the Company does not timely elect a Settlement Method, the Company shall no longer have the right to elect Cash Settlement or Physical Settlement, and the Company shall be deemed to have elected Combination Settlement in respect of its Conversion Obligation, and the Specified Dollar Amount per $1,000 principal amount of Notes shall be deemed to be $1,000. If the Company elects Combination Settlement but does not timely notify converting Holders of the Specified Dollar Amount per $1,000 principal amount of Notes, such Specified Dollar Amount will be deemed to be $1,000.

(ix) Settlement Amount . The cash, shares of Common Stock or combination of cash and shares of Common Stock in respect of any conversion of Notes (the “ Settlement Amount ”) shall be computed as follows:

(A) if the Company elects Physical Settlement, the Company shall deliver to the converting Holder, in respect of each $1,000 principal amount of its Notes being converted, a number of shares of Common Stock equal to the applicable Conversion Rate, together with cash in lieu of any fractional shares of Common Stock pursuant to Section 4.03(b);

(B) if the Company elects Cash Settlement, the Company shall pay to the converting Holder, in respect of each $1,000 principal amount of its

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Notes being converted, cash in an amount equal to the sum of the Daily Conversion Values for each of the 50 consecutive VWAP Trading Days during the related Observation Period; and

(C) if the Company elects (or is deemed to have elected) Combination Settlement, the Company shall pay or deliver, as the case may be, to the converting Holder, in respect of each $1,000 principal amount of its Notes being converted, an amount of cash and number of shares of Common Stock, if any, equal to the sum of the Daily Settlement Amount for each of the 50 consecutive VWAP Trading Days during the related Observation Period.

(x) Delivery Obligation . Unless Section 4.04 hereof provides otherwise, the Company shall pay or deliver, as the case may be, the Settlement Amount due in respect of its conversion obligation under Section 4.03 hereof, (i) on the third Business Day immediately following the relevant Conversion Date, if the Company elects Physical Settlement; and (ii) on the third Business Day immediately following the last VWAP Trading Day of the related Observation Period, if the Company elects Cash Settlement or Combination Settlement.

(e) Fractional Shares . Notwithstanding the foregoing, the Company will not issue fractional shares of Common Stock as part of the Settlement Amount due with respect to any converted Note. Instead, if any Settlement Amount includes a fraction of a share of the Common Stock, the Company will, in lieu of delivering such fraction of a share of Common Stock, pay an amount of cash equal to the product of such fraction of a share and (i) in a Physical Settlement, the Daily VWAP on the relevant Conversion Date, or if such Conversion Date is not a VWAP Trading Day, the immediately preceding VWAP Trading Day or (ii) in a Cash Settlement or a Combination Settlement, the Daily VWAP on the last VWAP Trading Day of the relevant Observation Period (subject to Section 4.03(c) immediately below).

(f) Conversion of Multiple Notes by a Single Holder . If a Holder surrenders more than one Note for conversion on a single Conversion Date, the Company will calculate the amount of cash and the number of shares of Common Stock due with respect to such Notes as if such Holder had surrendered for conversion one Note having an aggregate principal amount equal to the sum of the principal amounts of each of the Notes surrendered for conversion by such Holder on such Conversion Date.

(g) Settlement of Accrued Interest and Deemed Payment of Principal . If a Holder converts a Note, the Company will not adjust the Conversion Rate to account for any accrued and unpaid interest on such Note, and the Company’s delivery or payment, as the case may be, of cash, shares of Common Stock or a combination of cash and shares of Common Stock into which a Note is convertible will be deemed to satisfy and discharge in full the Company’s obligation to pay the principal of, and accrued and unpaid interest, if any, on, such Note to, but excluding, the Conversion Date; provided , however , that, subject to Section 4.02(f), if a Holder converts a Note after the Close of

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Business on a Regular Record Date and prior to the Open of Business on the corresponding Interest Payment Date, the Company will still be obligated to pay the interest due on such Interest Payment Date to the Holder of such Note on such Regular Record Date.

As a result, except as otherwise provided in the proviso to the immediately preceding sentence, any accrued and unpaid interest with respect to a converted Note will be deemed to be paid in full rather than cancelled, extinguished or forfeited. In addition, if the Settlement Amount for any Note includes both cash and shares of the Common Stock, accrued and unpaid interest will be deemed to be paid first out of the amount of cash delivered upon such conversion.

(h) Notices . Whenever a Conversion Date occurs with respect to a Note, the Conversion Agent will, as promptly as possible, and in no event later than the Business Day immediately following such Conversion Date, deliver to the Company and the Trustee, if it is not then the Conversion Agent, notice that a Conversion Date has occurred, which notice will state such Conversion Date, the principal amount of Notes converted on such Conversion Date and the names of the Holders that converted Notes on such Conversion Date.

On the first Business Day immediately following the last VWAP Trading Day of the Observation Period applicable to any Note surrendered for conversion in a Cash Settlement or a Combination Settlement, the Company will deliver a written notice to the Conversion Agent and the Trustee (if not also the Conversion Agent) stating the amount of cash and the number of shares of Common Stock, if any, that the Company is obligated to pay or deliver, as the case may be, to satisfy its conversion obligation with respect to each Note converted on such Conversion Date.

Section 4.04 Jones Act Restrictions on Conversions

In order to facilitate the Company’s compliance with the provisions of the Jones Act related to ownership of Common Stock by non-U.S. Citizens, no Holder who cannot establish to the Company’s reasonable satisfaction that it (or, if not the Holder, the Person that the Holder has designated to receive shares of Common Stock deliverable upon conversion of the Notes) is a U.S. Citizen may receive shares of Common Stock, if any, deliverable upon conversion of the Notes to the extent receipt of such shares would cause such Person or any Person whose ownership position would be aggregated with that of such Person to exceed 4.9% of the outstanding Common Stock. If any delivery of shares of Common Stock owed to a Holder is not made, in whole or in part, as a result of the limitation in the immediately preceding sentence, such Holder's right to receive such delivery shall not be extinguished (it being understood that under no circumstances will the Company be obligated to settle such Holder's Notes through Cash Settlement, other assets or Combination Settlement in lieu of Physical Settlement pending resolution of any Jones Act restrictions on conversion) and the Company shall make such delivery as promptly as practicable after, but in no event later than one Business Day after, such Holder establishes to the Company's reasonable satisfaction that such delivery would not result in such 4.9% limit being exceeded (including, without limitation, as a result of such Holder designating a Person to receive such shares of Common Stock or transferring or assigning the right to receive such shares of Common Stock to a Person, in either case, where such Person is a U.S. Citizen).

In addition, no Holder who cannot establish to the Company’s reasonable satisfaction that it (or, if not the Holder, the Person that the Holder has designated to receive shares of Common Stock, if any, deliverable upon conversion of the Notes) is a U.S. Citizen shall receive any shares of Common Stock deliverable upon conversion of the Notes to the extent such shares would constitute “Excess Shares” (as defined in the Company’s certificate of incorporation as in effect on the date of this Indenture) if they were issued. If any delivery of shares of Common Stock owed to a Holder is not made, in whole or in part, as a result of the limitation in the immediately preceding sentence, such Holder’s right to receive such delivery shall not be extinguished (it being understood that under no circumstances will the Company be obligated to settle such Holder's Notes through Cash Settlement, other assets or Combination Settlement in lieu of Physical Settlement pending resolution of any Jones Act restrictions on conversion) and the Company shall make such delivery as promptly as practicable after the Company determines (which determination the Company shall make reasonably promptly) that such shares of Common Stock would not constitute “Excess Shares” if they were issued (including, without limitation, as a result of such Holder designating a Person to receive such shares of Common Stock or transferring or assigning the right to receive such shares of Common Stock to a Person, in either case, where such Person is a U.S. Citizen).

Notwithstanding anything to the contrary in this Indenture, a Holder (or, if not the Holder, the Person that the Holder has designated to receive the shares of Common Stock issuable upon conversion of the notes) that is not a U.S. Citizen shall not become the record or beneficial owner of any shares of Common Stock issuable upon conversion of such Holder’s Notes the settlement of which is suspended as described in the two immediately preceding paragraphs, until such time as both (i) such Holder establishes to the Company’s reasonable satisfaction that delivery of such shares would not result in such 4.9% limit being exceeded or as such shares would not constitute “Excess Shares” if they were issued (in each case after giving effect to the issuance of the shares of Common Stock deliverable upon conversion of the Notes) and (ii) such shares are issued.

Section 4.05 Adjustment of Conversion Rate . The Conversion Rate will be adjusted as described in this Section 4.05, except that the Company shall not make any adjustment to the Conversion Rate if Holders participate (other than in the case of a share split or share combination), at the same time and upon the same terms as holders of the Common Stock and as a result of holding the Notes, in any of the transactions described below without having to convert their Notes, as if they held a number of shares of Common Stock equal to the applicable Conversion Rate, multiplied by the principal amount (expressed in thousands) of Notes held by such Holder.

(d) If the Company exclusively issues shares of Common Stock as a dividend or distribution on all or substantially all shares of the Common Stock, or if the Company effects a share split or share combination, the Conversion Rate will be adjusted based on the following formula:



CR ₁ = CR0 x	OS ₁
	OS0

where,

CR ₀ = the Conversion Rate in effect immediately prior to the Open of Business on the Ex-Dividend Date of such dividend or distribution, or immediately prior to the Open of Business on the effective date of such share split or combination, as applicable;

CR ₁ = the Conversion Rate in effect immediately after the Open of Business on such Ex-Dividend Date or such effective date, as applicable;

OS ₀ = the number of shares of Common Stock outstanding immediately prior to the Open of Business on such Ex-Dividend Date or such effective date, as applicable; and

OS ₁ = the number of shares of Common Stock outstanding immediately after giving effect to such dividend, distribution, share split or share combination, as applicable.

Any adjustment made under this Section 4.05(a) shall become effective immediately after the Open of Business on the Ex-Dividend Date for such dividend or distribution, or immediately after the Open of Business on the effective date for such share split or share combination. If any dividend or distribution of the type described in this Section 4.05(a) is declared but not so paid or made, the Conversion Rate shall be immediately readjusted, effective as of the date the Board of Directors determines not to pay such dividend or distribution, to the Conversion Rate that would then be in effect if such dividend or distribution had not been declared.

(e) If the Company issues to all or substantially all holders of the Common Stock any rights, options or warrants entitling them, for a period of not more than 45 calendar days after the date of such issuance, to subscribe for or purchase shares of the Common Stock, at a price per share less than the average of the Last Reported Sale Prices of the Common Stock for the 10 consecutive Trading Day period ending on, and including, the Trading Day immediately preceding the date of announcement of such issuance, the Conversion Rate will be increased based on the following formula:



CR ₁ = CR0 x	OS0 + X
	OS0 + Y

CR ₀ = the Conversion Rate in effect immediately prior to the Open of Business on the Ex-Dividend Date for such issuance;

CR ₁ = the Conversion Rate in effect immediately after the Open of Business on such Ex-Dividend Date;

OS ₀ = the number of shares of Common Stock outstanding immediately prior to the Open of Business on such Ex-Dividend Date;

X = the total number of shares of Common Stock issuable pursuant to such rights, options or warrants; and

Y = the number of shares of Common Stock equal to the aggregate price payable to exercise such rights, options or warrants divided by the average of the Last Reported Sale Prices of the Common Stock over the 10 consecutive Trading Day period ending on, and including, the Trading Day immediately preceding the date of announcement of the issuance of such rights, options or warrants.

Any increase made under this Section 4.05(b) will be made successively whenever any such rights, options or warrants are issued and shall become effective immediately after the Open of Business on the Ex-Dividend Date for such issuance. To the extent that such rights, options or warrants are not exercised prior to their expiration or shares of Common Stock are not delivered upon the expiration of such rights, options or warrants, the Conversion Rate shall be readjusted to the Conversion Rate that would then be in effect had the increase with respect to the issuance of such rights, options or warrants been made on the basis of delivery of only the number of shares of Common Stock actually delivered. If such rights, options or warrants are not so issued, or if such rights, options or warrants are not exercised prior to their expiration, the Conversion Rate shall be decreased to be the Conversion Rate that would then be in effect if such issuance had not occurred.

For purposes of this Section 4.05(b) and Section 4.01(b)(iv) hereof, in determining whether any rights, options or warrants entitle the holders of the Common Stock to subscribe for or purchase shares of the Common Stock at a price per share less than such average of the Last Reported Sale Prices of the Common Stock for the 10 consecutive Trading Day period ending on the Trading Day immediately preceding the date of announcement for such issuance, and in determining the aggregate offering price of such shares of the Common Stock, there shall be taken into account any consideration received by the Company for such rights, options or warrants and any amount payable on exercise thereof, the value of such consideration, if other than cash, to be determined by the Board of Directors.

(f) If the Company distributes shares of its Capital Stock, evidences of its indebtedness, other assets or property of the Company (other than an extraordinary cash dividend or distribution that the Board of Directors of the Company designates as payable with respect to the Notes pursuant to Section 2.15) or rights, options or warrants to acquire its Capital Stock or other securities, to all or substantially all holders of the Common Stock, excluding:

(iv) dividends or distributions, rights options or warrants as to which an adjustment was effected pursuant to Section 4.05(a) hereof or Section 4.05(b) hereof;

(v) dividends or distributions paid exclusively in cash as to which an adjustment was effected pursuant to Section 4.05(d) hereof; and

(vi) Spin-Offs as to which the provisions set forth below in this Section 4.05(c) shall apply;

(any of such shares of Capital Stock, evidences of indebtedness, other assets or property or rights, options or warrants to acquire Capital Stock or other securities of the Company, the “ Distributed Property ”), then the Conversion Rate shall be increased based on the following formula:



CR ₁ = CR0 x	SP0
	SP0 - FMV

where,

CR ₀ = the Conversion Rate in effect immediately prior to the Open of Business on the Ex-Dividend Date for such distribution;

CR ₁ = the Conversion Rate in effect immediately after the Open of Business on such Ex-Dividend Date;

SP ₀ = the average of the Last Reported Sale Prices of the Common Stock over the 10 consecutive Trading Day period ending on, and including, the Trading Day immediately preceding the Ex-Dividend Date for such distribution; and

FMV = the fair market value (as determined by the Board of Directors) of Distributed Property with respect to each outstanding share of the Common Stock as of the Open of Business on the Ex-Dividend Date for such distribution.

If “FMV” (as defined above) is equal to or greater than the “SP ₀ ” (as defined above), in lieu of the foregoing increase, each Holder of Notes shall receive, in respect of each $1,000 principal amount of Notes it holds, at the same time and upon the same terms as holders of the Common Stock, the amount and kind of Capital Stock, evidences of the Company’s indebtedness, other assets or property of the Company or rights, options or warrants to acquire the Capital Stock or other securities that such Holder would have received as if such Holder owned a number of shares of Common Stock equal to the Conversion Rate in effect immediately prior to the record date for the distribution.

Any increase made pursuant to the formula above will become effective immediately after the Open of Business on the Ex-Dividend Date for such distribution. If such distribution (including a Spin-Off) is not so paid or made, the Conversion Rate shall be decreased to be the Conversion Rate that would then be in effect if such dividend or distribution had not been declared.

With respect to an adjustment pursuant to this Section 4.05(c) where there has been a payment of a dividend or other distribution on the Common Stock of shares of Capital Stock of any class or series, or similar equity interest, of or relating to any Subsidiaries of the Company or business units of the Company, and such Capital Stock or similar equity interest is listed or quoted (or will be listed or quoted upon the consummation of the distribution) on a U.S. national securities exchange or a reasonably comparable non-U.S. equivalent (a “ Spin-Off ”), the Conversion Rate will be increased based on the following formula:



CR ₁ = CR0 x	FMV0 + MP0
	MP0

where,

CR ₀ = the Conversion Rate in effect immediately prior to the Open of Business on the Ex-Dividend Date for such Spin-Off;

CR ₁ = the Conversion Rate in effect immediately after the Open of Business on the Ex-Dividend Date for such Spin-Off;

FMV ₀ = the average of the Last Reported Sale Prices of the Capital Stock or similar equity interest distributed to holders of Common Stock applicable to one share of Common Stock over the first 10 consecutive Trading Day period after, but excluding, the effective date of the Spin-Off (the “ Valuation Period ”); and

MP ₀ = the average of the Last Reported Sale Prices of Common Stock over the Valuation Period.

If a Holder converts a Note, Cash Settlement or Combination Settlement is applicable to such Note and the first VWAP Trading Day of the Observation Period applicable to such Note occurs after the first Trading Day of the Valuation Period for a Spin-Off, but on or before the last Trading Day of the Valuation Period for such Spin-Off, the reference in the above definition of “FMV ₀ ” to “10” Trading Days shall be deemed replaced with such lesser number of Trading Days as have elapsed since, and including, the effective date of such Spin-Off but before the first VWAP Trading Day of such Observation Period. If a Holder converts a Note, Cash Settlement or Combination Settlement is applicable to such Note and one or more VWAP Trading Days of the Observation Period for such Note occurs on or after the Ex-Dividend Date for a Spin-Off but on or prior to the first Trading Day of the Valuation Period for such Spin-Off, such Observation Period will be suspended from, and including, the first such VWAP Trading Day to, and including, the first Trading Day of the Valuation Period for such Spin-Off and will resume immediately after the first Trading Day of the Valuation Period for such Spin-Off, with the reference in the above definition of “FMV ₀ ” to “10” Trading Days deemed replaced with a reference to “one” Trading Day.

For purposes of the second adjustment formula set forth in this Section 4.05(c), (i) the Last Reported Sale Price of any Capital Stock or similar equity interest shall be calculated in a manner analogous to that used to calculate the Last Reported Sale Price of the Common Stock in the definition of “Last Reported Sale Price” set forth in Section 1.01 hereof, (ii) whether a day is a Trading Day (and whether a day is a Scheduled Trading Day and whether a Market Disruption Event has occurred) for such Capital Stock or similar equity interest shall be determined in a manner analogous to that used to determine whether a day is a Trading Day (or whether a day is a Scheduled Trading Day and whether a Market Disruption Event has occurred) for the Common Stock, and (iii) whether a day is a Trading Day to be included in a Valuation Period will be determined based on whether a day is a Trading Day for both the Common Stock and such Capital Stock or similar equity interest.

Subject to Section 4.05(g), for the purposes of this Section 4.05(c), rights, options or warrants distributed to all or substantially all holders of the Common Stock entitling them to acquire the Company’s Capital Stock or other securities, (either initially or under certain circumstances), which rights, options or warrants, until the occurrence of a specified event or events (a “ Trigger Event ”): (1) are deemed to be transferred with such shares of Common Stock; (2) are not exercisable; and (3) are also issued in respect of future issuances of Common Stock, shall be deemed not to have been distributed for purposes of this Section 4.05(c) (and no adjustment to the Conversion Rate under this Section 4.05(c) will be required) until the occurrence of the earliest Trigger Event, whereupon such rights, options or warrants shall be deemed to have been distributed and an appropriate adjustment (if any is required) to the Conversion Rate shall be made under this Section 4.05(c). If any such rights, options or warrants, distributed prior to the Issue Date are subject to events, upon the occurrence of which such rights, options or warrants become exercisable to purchase different securities, evidences of indebtedness or other assets, then the date of the occurrence of any and each such event shall be deemed to be the date of distribution and Ex-Dividend Date of such deemed distribution (in which case the original rights, options or warrants shall be deemed to terminate and expire on such date without exercise by any of the holders). In addition, in the event of any distribution or deemed distribution of rights, options or warrants, or any Trigger Event or other event (of the type described in the preceding sentence) with respect thereto that was counted for purposes of calculating a distribution amount for which an adjustment to the Conversion Rate under this Section 4.05(c) was made, (1) in the case of any such rights, options or warrants which shall all have been redeemed or purchased without exercise by any Holders thereof, upon such final redemption or purchase (x) the Conversion Rate shall be readjusted as if such rights, options or warrants had not been issued and (y) the Conversion Rate shall then again be readjusted to give effect to such distribution, deemed distribution or Trigger Event, as the case may be, as though it were a cash distribution, equal to the per share redemption or purchase price received by holders of Common Stock with respect to such rights, options or warrants (assuming each such holder had retained such rights, options or warrants), made to all holders of Common Stock as of the date of such redemption or purchase, and (2) in the case of such rights, options or warrants which shall have expired or been terminated without exercise by any holders thereof, the Conversion Rate shall be readjusted as if such rights and warrants had not been issued.

For purposes of Section 4.05(a) hereof, Section 4.05(b) hereof and this Section 4.05(c), if any dividend or distribution to which this Section 4.05(c) applies includes one or both of:

(A) a dividend or distribution of shares of Common Stock to which Section 4.05(a) hereof also applies (the “ Clause A Distribution ”); or

(B) an issuance of rights, options or warrants entitling holders of the Common Stock to subscribe for or purchase shares of the Common Stock to which Section 4.05(b) hereof also applies (the “ Clause B Distribution ”),

then (i) such dividend or distribution, other than the Clause A Distribution and the Clause B Distribution, shall be deemed to be a distribution to which this Section 4.05(c) applies (the “ Clause C Distribution ”) and any Conversion Rate adjustment required to be made under this Section 4.05(c) with respect to such Clause C Distribution shall be made, (ii) the Clause B Distribution, if any, shall be deemed to immediately follow the Clause C Distribution and any Conversion Rate adjustment required by Section 4.05(b) hereof with respect thereto shall then be made, except that, if determined by the Company, (A) the “Ex-Dividend Date” of the Clause B Distribution and the Clause A Distribution, if any, shall be deemed to be the Ex-Dividend Date of the Clause C Distribution and (B) any shares of Common Stock included in the Clause A Distribution or the Clause B Distribution shall not be deemed to be “outstanding immediately prior to the Open of Business on such Ex-Dividend Date” within the meaning of Section 4.05(b) hereof, and (iii) the Clause A Distribution, if any, shall be deemed to immediately follow the Clause C Distribution or the Clause B Distribution, as the case may be, except that, if determined by the Company, (A) the “Ex-Dividend Date” of the Clause A Distribution and the Clause B Distribution, if any, shall be deemed to be the Ex-Dividend Date of the Clause C Distribution, and (B) any shares of Common Stock included in the Clause A Distribution shall not be deemed to be “outstanding immediately prior to the Open of Business on such Ex-Dividend Date or such effective date” within the meaning of Section 4.05(a) hereof.

(g) If any cash dividend or distribution is made to all or substantially all holders of the Common Stock, other than an Extraordinary Dividend, the Conversion Rate shall be adjusted based on the following formula:



CR ₁ = CR0 x	SP0
	SP0 - C

where,

CR ₀ = the Conversion Rate in effect immediately prior to the Open of Business on the Ex-Dividend Date for such dividend or distribution;

CR ₁ = the Conversion Rate in effect immediately after the Open of Business on the Ex-Dividend Date for such dividend or distribution;

SP ₀ = the Last Reported Sale Price of the Common Stock on the Trading Day immediately preceding the Ex-Dividend Date for such dividend or distribution; and

C = the amount in cash per share that the Company distributes to holders of the Common Stock.

If “C” (as defined above) is equal to or greater than “SP ₀ ” (as defined above), in lieu of the foregoing increase, each Holder shall receive, for each $1,000 principal amount of Notes it holds, at the same time and upon the same terms as holders of shares of the Common Stock, the amount of cash that such Holder would have received if such Holder had owned a number of shares of Common Stock equal to the Conversion Rate in effect immediately prior to the record date for such cash dividend or distribution. Such increase shall become effective immediately after the Open of Business on the Ex-Dividend Date for such dividend or distribution. If such dividend or distribution is not so paid, the Conversion Rate shall be decreased, effective as of the date the Board of Directors determines not to pay such dividend or distribution, to the Conversion Rate that would then be in effect if such dividend or distribution had not been declared.

(h) If the Company or any of its Subsidiaries make a payment in respect of a tender offer or exchange offer for the Common Stock, to the extent that the cash and value of any other consideration included in the payment per share of the Common Stock exceeds the Last Reported Sale Price of the Common Stock on the Trading Day next succeeding the last date on which tenders or exchanges may be made pursuant to such tender or exchange offer (the “ Offer Expiration Date ”), the Conversion Rate shall be increased based on the following formula:



CR ₁ = CR0 x	AC + (SP ₁ x OS ₁ )
	OS0 x SP ₁

where,

CR ₀ = the Conversion Rate in effect immediately prior to the Close of Business on the Offer Expiration Date;

CR ₁ = the Conversion Rate in effect immediately after the Close of Business on the Offer Expiration Date;

AC = the aggregate value of all cash and any other consideration (as determined by the Board of Directors) paid or payable for shares of Common Stock purchased in such tender or exchange offer;

OS ₀ = the number of shares of Common Stock outstanding immediately prior to the expiration time of the tender or exchange offer on the Offer Expiration Date (prior to giving effect to the purchase of all shares accepted for purchase or exchange in such tender or exchange offer);

OS ₁ = the number of shares of Common Stock outstanding immediately after the expiration time of the tender or exchange offer on the Offer Expiration Date (after giving effect to the purchase of all shares accepted for purchase or exchange in such tender or exchange offer); and

SP ₁ = the average of the Last Reported Sale Prices of the Common Stock over the 10 consecutive Trading Day period commencing on, and including, the Trading Day next succeeding the Offer Expiration Date (the “ Averaging Period ”).

If a Holder converts a Note, Cash Settlement or Combination Settlement is applicable to such Note and the first VWAP Trading Day of the Observation Period for such Note occurs after the first Trading Day of the Averaging Period for a tender or exchange offer, but on or before the last Trading Day of the Averaging Period for such tender or exchange offer, the reference in the above definition of “SP ₁ “ to “10” shall be deemed replaced with such lesser number of Trading Days as have elapsed from, and including, the first Trading Day of the Averaging Period for such tender or exchange offer to, but excluding, the first VWAP Trading Day of such Observation Period. If a Holder converts a Note, Cash Settlement or Combination Settlement is applicable to such Note and one or more VWAP Trading Days of the Observation Period for such Note occurs on or after the Offer Expiration Date for a tender or exchange offer, but on or prior to the first Trading Day in the Averaging Period for such tender or exchange offer, such Observation Period will be suspended on the first such Trading Day and will resume immediately after the first Trading Day of the Averaging Period for such tender or exchange offer and the reference in the above definition of “SP ₁ “ to “10” shall be deemed replaced with a reference to “one.”

(i) Special Settlement Provisions . Notwithstanding anything to the contrary herein, if a Holder converts a Note in a Combination Settlement, and the Daily Settlement Amount for any VWAP Trading Day during the Observation Period applicable to such Note:

(iii) is calculated based on a Conversion Rate adjusted on account of any event described in Sections 4.05(a) through (e) hereof; and

(iv) includes any shares of Common Stock that, but for this provision, would entitle their holder to participate in such event;

then, although the Company will otherwise treat such Holder as the holder of record of such shares of Common Stock on the last VWAP Trading Day of such Observation Period, the Company will not permit such Holder to participate in such event on account of such shares of Common Stock.

In addition, notwithstanding anything to the contrary herein, if a Holder converts a Note and:

(i) Combination Settlement is applicable to such Note;

(ii) the record date, effective date or Offer Expiration Date for any event that requires an adjustment to the Conversion Rate under any of Sections 4.05(a) through (e) hereof occurs:

(A) on or after the first VWAP Trading Day of such Observation Period; and

(B) on or prior to the last VWAP Trading Day of such Observation Period; and

(v) the Daily Settlement Amount for any VWAP Trading Day in such Observation Period that occurs on or prior to such record date, effective date or Offer Expiration Date:

(A) includes shares of the Common Stock that do not entitle their holder to participate in such event; and

(B) is calculated based on a Conversion Rate that is not adjusted on account of such event;

then on account of such conversion, the Company will, on such record date, effective date or Offer Expiration Date, treat such Holder, as a result of having converted such Notes, as though it were the record holder of a number of shares of Common Stock equal to the total number of shares of Common Stock that:

(i) are deliverable as part of the Daily Settlement Amount:

(A) for a VWAP Trading Day in such Observation Period that occurs on or prior to such record date, effective date or Offer Expiration Date; and

(B) is calculated based on a Conversion Rate that is not adjusted for such event; and

(ii) if not for this provision, would not entitle such holder to participate in such event.

(j) Poison Pill . If a Holder converts a Note, to the extent that the Company has a rights plan in effect, if Physical Settlement applies to such Note, on the Conversion Date applicable to such Note, and if Combination Settlement applies to such Note on any VWAP Trading Day in the Observation Period applicable to such Note , the Holder converting such Note will receive, in addition to any shares of Common Stock otherwise received in connection with such conversion on such Conversion Date or such VWAP Trading Day, as the case may be, the rights under the rights plan, unless prior to such Conversion Date or such VWAP Trading Day, as the case may be, the rights have separated from the Common Stock, in which case, and only in such case, the Conversion Rate will be adjusted at the time of separation as if the Company distributed to all holders of the Common Stock, Distributed Property as described in Section 4.05(c) hereof, subject to readjustment in the event of the expiration, termination or redemption of such rights.

(k) Deferral of Adjustments . Notwithstanding anything to the contrary herein, except (i) on and after the first VWAP Trading Day of any Observation Period with respect to a Note and on or prior to the last VWAP Trading Day of such Observation Period and (ii) on the Conversion Date in a Cash Settlement following a replacement of Common Stock by the Reference Property consisting solely of cash or a Physical Settlement, the Company will not be required to adjust the Conversion Rate unless such adjustment would require an increase or decrease of at least one percent; provided , however , that any such minor adjustments that are not required to be made will be carried forward and taken into account in any subsequent adjustment, and provided , further , that any such adjustment of less than one percent that has not been made shall be made upon the occurrence of (x) the Effective Date for any Make-Whole Fundamental Change or redemption and (y) in the case of any Note to which Physical Settlement applies, on the Conversion Date, and, in the case of any Note to which Cash Settlement or Combination Settlement applies, the first VWAP Trading Day of the applicable Observation Period. In addition, the Company shall not account for such deferrals when determining whether any of the conditions to conversion have been satisfied or what number of shares of Common Stock a Holder would have held on a given day had it converted its Notes.

(l) Limitation on Adjustments . Except as stated in this Section 4.05, the Company will not adjust the Conversion Rate for the issuance of shares of Common Stock or any securities convertible into or exchangeable for shares of Common Stock or the right to purchase shares of Common Stock or such convertible or exchangeable securities. If, however, the application of the formulas in Sections 4.05(a) through (e) hereof would result in a decrease in the Conversion Rate, then, except to the extent of any readjustment to the Conversion Rate, no adjustment to the Conversion Rate will be made (other than as a result of a reverse share split or share combination).

In addition, notwithstanding anything to the contrary herein, the Conversion Rate will not be adjusted:

(i) on account of stock repurchases that are not tender offers referred to in Section 4.05(e) hereof, including structured or derivative transactions and open market repurchases of shares of Common Stock, or transactions pursuant to a stock repurchase program approved by the Board of Directors or otherwise;

(ii) upon the issuance of any shares of Common Stock pursuant to any present or future plan providing for the reinvestment of dividends or interest payable on the Company’s securities and the investment of additional optional amounts in shares of Common Stock under any plan;

(iii) upon the issuance of any shares of Common Stock or options or rights to purchase those shares pursuant to any present or future employee, director or consultant benefit plan, program or agreement or employee stock purchase plan of or assumed by the Company or any of its Subsidiaries;

(iv) upon the issuance of any shares of Common Stock pursuant to any option, warrant, right or exercisable, exchangeable or convertible security not described in Section 4.05(i)(iii) immediately above and outstanding as of the date the Notes were first issued;

(v) for a change in the par value of the Common Stock; or

(vi) for accrued and unpaid interest on the Notes, if any.

In addition, the Company will not undertake any transaction that would result in the Company being required, pursuant to this Indenture, to adjust the Conversion Rate such that the Conversion Price per share of Common Stock will be less than the par value of the Common Stock.

(m) For purposes of this Section 4.05, the number of shares of Common Stock at any time outstanding shall not include shares held in the treasury of the Company so long as the Company does not pay any dividend or make any distribution on shares of Common Stock held in the treasury of the Company, but shall include shares issuable in respect of scrip certificates issued in lieu of fractions of shares of Common Stock.

Section 4.06 Discretionary and Voluntary Adjustments .

(c) Discretionary Adjustments . Whenever any provision of this Indenture requires the Company to calculate the Last Reported Sale Prices, the Daily VWAPs or any function thereof over a span of multiple days (including during an Observation Period), the Company will make appropriate adjustments to each to account for any adjustment to the Conversion Rate that becomes effective, or any event requiring an adjustment to the Conversion Rate where the effective date, Ex-Dividend Date or Offer Expiration Date of the event occurs, at any time during the period when such Last Reported Sale Prices, the Daily VWAPs or function thereof is to be calculated.

(d) Voluntary Adjustments . To the extent permitted by applicable law and applicable requirements of The New York Stock Exchange, the Company is permitted to increase the Conversion Rate of the Notes by any amount for a period of at least 20 Business Days if the Board of Directors determines that such increase would be in the Company’s best interest. The Company may also (but is not required to) increase the Conversion Rate to avoid or diminish income tax to holders of Common Stock or rights to purchase shares of Common Stock in connection with a dividend or distribution of shares (or rights to acquire shares) or similar event.

Section 4.07 Adjustment to Conversion Rate Upon Conversion in Connection with a Make-Whole Fundamental Change .

(a) Increase in the Conversion Rate . If a Make-Whole Fundamental Change occurs and a Holder elects to convert its Notes in connection with such Make-Whole Fundamental Change, then the Company shall, to the extent provided herein, increase the Conversion Rate for the Notes so surrendered for conversion by a number of additional shares of Common Stock (the “ Additional Shares ”), as described in this Section 4.07. A conversion of Notes shall be deemed for these purposes to be “in connection with” a Make-Whole Fundamental Change if the relevant Conversion Notice is received by the Conversion Agent during the period from, and including, the Effective Date of the Make-Whole Fundamental Change up to, and including, the Close of Business on the Business Day immediately prior to the related Fundamental Change Purchase Date or, if such Make-Whole Fundamental Change is not also a Fundamental Change, the 35th Business Day immediately following the Effective Date for such Make-Whole Fundamental Change (such period, the “ Make-Whole Fundamental Change Period ”).

(b) Cash Mergers . Notwithstanding anything to the contrary herein, if the consideration paid to holders of the Common Stock in any Make-Whole Fundamental Change described in clause (2) of the definition of “Fundamental Change” is comprised entirely of cash, then, for any conversion of Notes following the Effective Date of such Make-Whole Fundamental Change, the payment and delivery obligations upon the conversion of a Note shall be calculated based solely on the Stock Price for such Make-Whole Fundamental Change and shall be deemed to be an amount equal to the applicable Conversion Rate (including any adjustment as described in this Section 4.07) multiplied by such Stock Price. In such event, the Company’s conversion obligation will be determined and paid to Holders in cash on the third Business Day following the applicable Conversion Date. Otherwise, the Company will settle any conversion of the Notes following the Effective Date for a Make-Whole Fundamental Change in accordance with Section 4.03 hereof (but subject to Section 4.04 and 4.05 hereof).

(c) Determining the Number of Additional Shares . The number of Additional Shares, if any, by which the Conversion Rate will be increased for a Holder that converts its Notes in connection with a Make-Whole Fundamental Change shall be determined by reference to the table attached as Schedule A hereto, based on the date on which the Make-Whole Fundamental Change occurs or becomes effective (the “ Effective Date ”) and the price (the “ Stock Price ”) paid (or deemed paid) per share of the Common Stock in the Make-Whole Fundamental Change, as determined under the two immediately following sentences. If the holders of the Common Stock receive only cash in a Make-Whole Fundamental Change described in clause (2) of the definition of “Fundamental Change,” the Stock Price shall be the cash amount paid per share of Common Stock. Otherwise, the Stock Price shall be the average of the Last Reported Sale Prices of the Common Stock over the 10 consecutive Trading Day period ending on, and including, the Trading Day immediately preceding the Effective Date of the Make-Whole Fundamental Change.

(d) Interpolation and Limits . The exact Stock Prices and Effective Dates may not be set forth in the table in Schedule A , in which case:

(vii) If the Stock Price is between two stock prices in the table or the Effective Date is between two dates in the table, the number of Additional Shares shall be determined by a straight-line interpolation between the number of Additional Shares set forth for the higher and lower stock prices and the earlier and later dates, as applicable, based on a 365-day year.

(viii) If the Stock Price is greater than $375.00 per share (subject to adjustment in the same manner as the stock prices set forth in the column headings of the table in Schedule A hereof), no Additional Shares will be added to the Conversion Rate.

(ix) If the Stock Price is less than $91.64 per share (subject to adjustments in the same manner as the stock prices set forth in the column headings of the table in Schedule A hereof), no Additional Shares will be added to the Conversion Rate.

Notwithstanding the foregoing, in no event will the Conversion Rate be increased on account of a Make-Whole Fundamental Change to exceed 10.9122 shares of Common Stock per $1,000 principal amount of Notes, subject to adjustments in the same manner as the Conversion Rate is required to be adjusted as set forth in Section 4.05 hereof.

(x) The stock prices set forth in the column headings of the table in Schedule A hereto shall be adjusted as of any date on which the Conversion Rate of the Notes is otherwise required to be adjusted. The adjusted stock prices shall equal the stock prices applicable immediately prior to such adjustment, multiplied by a fraction, the numerator of which is the Conversion Rate immediately prior to such adjustment giving rise to the stock price adjustment and the denominator of which is the Conversion Rate as so adjusted. The number of Additional Shares set forth in such table shall be adjusted in the same manner and at the same time as the Conversion Rate is required to be adjusted as set forth in Section 4.05.

(e) Notices . The Company shall notify the Holders of the Effective Date of any Make-Whole Fundamental Change and issue a press release announcing such Effective Date no later than five Business Days after such Effective Date.

Section 4.08 Effect of Recapitalization, Reclassification, Consolidation, Merger or Sale .

(a) Merger Events . In the case of:

(i) any recapitalization, reclassification or change of the Common Stock (other than a change in par value, or from par value to no par value, or from no par value to par value, or as a result of a split, subdivision or combination for which an adjustment was made pursuant to Section 4.05(a) hereof);

(ii) any consolidation, merger or combination involving the Company;

(iii) any sale, lease or other transfer to a third party of the consolidated assets of the Company and its Subsidiaries substantially as an entirety; or

(iv) any binding share exchange;

and, in each case, as a result of which the Common Stock would be converted into, or exchanged for, common stock, other securities, other property or assets (including cash or any combination thereof) (any such event, a “ Merger Event ,” any such common stock, other securities, other property or assets (including cash or any combination thereof), “ Reference Property ,” and (i) the amount and kind of Reference Property that a holder of one share of Common Stock is entitled to receive in the applicable Merger Event, or (ii) if as a result of the applicable Merger Event, each share of Common Stock is converted into, or exchanged for, the right to receive more than a single type of consideration (determined based in part upon any form of stockholder election), the per share of Common Stock weighted average of the amounts and kinds of Reference Property received by the holders of Common Stock that affirmatively make such an election, a “ Unit of Reference Property ”) then, at the effective time of such Merger Event, the right to convert each $1,000 principal amount of Notes based on a number of shares of the Common Stock equal to the Conversion Rate in effect immediately prior to such Merger Event will, without the consent of the Holders, be changed into a right to convert each $1,000 principal amount of Notes into or based on a number of Units of Reference Property equal to the Conversion Rate in effect immediately prior to such Merger Event, and, prior to or at the effective time of such Merger Event, the Company or the successor or purchasing person, as the case may be, shall execute with the Trustee a supplemental indenture (which shall comply with the Trust Indenture Act as in force at the date of execution of such supplemental indenture) providing for such change in the right to convert each $1,000 principal amount of Notes; provided , however , that, at and after the effective time of the Merger Event, (x) the Company will continue to have the right to determine the Settlement Method upon conversion of the Notes pursuant to Section 4.03(a)(i) hereof and (y) (i) any amount payable in cash upon conversion of the Notes in accordance with Section 4.03 and 4.07 hereof shall continue to be payable in cash, (ii) the number of shares of Common Stock that the Company would have been required to deliver upon conversion of the Notes in accordance with Section 4.03 and 4.07 hereof shall instead be deliverable in Units of Reference Property and (iii) the Daily VWAP and the Last Reported Sale Price will, to the extent reasonably possible, be calculated based on the value of a Unit of Reference Property and the definitions of VWAP Trading Day and VWAP Market Disruption Event shall be determined by reference to the components of a Unit of Reference Property.

The Company shall not become a party to any Merger Event unless its terms are consistent with this Section 4.08. Such supplemental indenture described in the immediately preceding paragraph shall provide for adjustments which shall be as nearly equivalent to the adjustments provided for in this Article 4 in the judgment of the Board of Directors or the board of directors of the successor person. If, in the case of any such Merger Event, the Reference Property receivable thereupon by a holder of Common Stock includes shares of stock, securities or other property or assets (including cash or any combination thereof) of a person other than the successor or purchasing person, as the case may be, in such Merger Event, then such indenture shall also be executed by such other person.

(b) Notice of Supplemental Indentures . The Company shall cause written notice of the execution of such supplemental indenture to be mailed to each Holder, at the address of such Holder as it appears on the register of the Notes maintained by the Registrar, within 20 calendar days after execution thereof. Failure to deliver such notice shall not affect the legality or validity of such supplemental indenture. The above provisions of this Section 4.08 shall similarly apply to successive Merger Events.

(c) Prior Notice . In addition, at least 20 Scheduled Trading Days before any Merger Event, the Company shall give notice to Holders of such Merger Event, or, if the Company has not publicly announced such Merger Event at such time, as promptly as practicable after publicly announcing such Merger Event. In any such notice, the Company shall also specify the composition of the Unit of Reference Property for such Merger Event, or, if the Company has not determined the composition of such Unit of Reference Property at such time, the Company will provide an additional written notice to Holders that states the composition of such Unit of Reference Property as promptly as practicable after determining its composition.

Section 4.09 Certain Covenants .

(e) Reservation of Shares . To the extent necessary to satisfy its obligations under this Indenture, prior to issuing any shares of Common Stock, the Company will reserve out of its authorized but unissued shares of Common Stock a sufficient number of shares of Common Stock to permit the conversion of the Notes.

(f) Certain other Covenants . The Company covenants that all shares of Common Stock that may be issued upon conversion of Notes shall be newly issued shares or treasury shares, shall be duly authorized, validly issued, fully paid and non-assessable and shall be free from preemptive rights and free from any tax, lien or charge (other than those created by the Holder or due to a change in registered owner). The Company shall list or cause to have quoted any shares of Common Stock to be issued upon conversion of Notes on each national securities exchange or over-the-counter or other domestic market on which the Common Stock is then listed or quoted.

(g) Listing Standards. The Company shall not enter into any transaction, or take any other action, that would require an increase of the Conversion Rate (whether under Sections 4.05(b) through 4.05(e) or Section 4.07) that would result, in the aggregate, in the Notes becoming convertible into a number of shares of Common Stock in excess of any limitations imposed by the continued listing standards of The New York Stock Exchange, without complying, if applicable, with the shareholder approval rules contained in such listing standards.

Section 4.10 Responsibility of Trustee . The Trustee and any Conversion Agent shall not at any time be under any duty or responsibility to any Holder of Notes to determine or calculate the Conversion Rate (or any adjustment thereto), to determine whether any facts exist which may require any adjustment of the Conversion Rate, or to confirm the accuracy of any such adjustment when made or the appropriateness of the method employed, or herein or in any supplemental indenture provided to be employed, in making the same. The Trustee and any other Conversion Agent shall not be accountable with respect to the validity or value (or the kind or amount) of any shares of Common Stock or of any other securities or property that may at any time be issued or delivered upon the conversion of any Notes; and the Trustee and the Conversion Agent make no representations with respect thereto. Neither the Trustee nor any Conversion Agent shall be responsible for any failure of the Company to issue, transfer or deliver any shares of Common Stock or stock certificates or other securities or property or cash upon the surrender of any Notes for the purpose of conversion or to comply with any of the duties, responsibilities or covenants of the Company contained in this Article 4. The rights, privileges, protections, immunities and benefits given to the Trustee, including without limitation its right to be compensated, reimbursed and indemnified, are extended to, and shall be enforceable by, the Trustee in each of its capacities hereunder, including its capacity as Conversion Agent and as Bid Solicitation Agent. Without limiting the generality of the foregoing, neither the Trustee nor any Conversion Agent shall be under any responsibility to determine the correctness of any provisions contained in any supplemental indenture entered into pursuant to Section 4.08 relating either to the kind or amount of shares of stock or securities or property (including cash) receivable by Holders upon the conversion of their Notes after any event referred to in Section 4.08 or to any adjustment to be made with respect thereto, but, subject to the provisions of Section 11.01, may accept (without any independent investigation) as conclusive evidence of the correctness of any such provisions, and shall be protected in relying upon, the Officer’s Certificate (which the Company shall be obligated to file with the Trustee prior to the execution of any such supplemental indenture) with respect thereto. Neither the Trustee nor the Conversion Agent shall be responsible for determining whether any event contemplated by Section 4.01(b) has occurred that makes the Notes eligible for conversion or no longer eligible therefor until the Company has delivered to the Trustee and the Conversion Agent the notices referred to in Section 4.01(b) with respect to the commencement or termination of such conversion rights, on which notices the Trustee and the Conversion Agent may conclusively rely, and the Company agrees to deliver such notices to the Trustee and the Conversion Agent promptly after the occurrence of any such event or at such other times as shall be provided for in Section 4.01(b).

Section 4.11 Notice of Adjustment to the Trustee . Whenever the Conversion Rate is adjusted as herein provided, the Company shall promptly file with the Trustee and any Conversion Agent (if other than the Trustee) an Officer’s Certificate setting forth the Conversion Rate after such adjustment and setting forth a brief statement of the facts requiring such adjustment. Unless and until a Responsible Officer of the Trustee shall have received such Officer’s Certificate, the Trustee shall not be deemed to have knowledge of any adjustment of the Conversion Rate and may assume that the last Conversion Rate of which it has knowledge is still in effect. Promptly after delivery of such certificate, the Company shall prepare a notice of such adjustment of the Conversion Rate setting forth the adjusted Conversion Rate and the date as of which each adjustment becomes effective and shall deliver such notice of such adjustment of the Conversion Rate to the Holder of each Note at his or her last address appearing on the Register provided for in Section 2.06 of this Indenture, within 20 days after execution thereof. Failure to deliver such notice shall not affect the legality, effectiveness or validity of any such adjustment and shall not be an Event of Default under this Indenture.

Section 4.12 Notice to Holders .

(a) Notice to Holders Prior to Certain Actions . The Company shall deliver written notices of the events specified below at the times specified below and containing the information specified below unless, in each case, (i) pursuant to this Indenture, the Company is already required to deliver notice of such event containing at least the information specified below at an earlier time or (ii) the Company, at the time it is required to deliver a notice, does not have knowledge of all of the information required to be included in such notice, in which case, the Company shall (A) deliver notice at such time containing only the information that it has knowledge of at such time (if it has knowledge of any such information at such time), and (B) promptly upon obtaining knowledge of any such information not already included in a notice delivered by the Company, deliver notice to each Holder containing such information. In each case, the failure by the Company to give such notice, or any defect therein, shall not affect the legality or validity of such event.

(iv) Issuances, Distributions, and Dividends and Distributions . If the Company (A) announces any issuance of any rights, options or warrants that would require an adjustment in the Conversion Rate pursuant to Section 4.04(b) hereof; (B) authorizes any distribution that would require an adjustment in the Conversion Rate pursuant to Section 4.04(c) hereof (including any separation of rights from the Common Stock described in Section 4.04(g) hereof); or (C) announces any dividend or distribution that would require an adjustment in the Conversion Rate pursuant to Section 4.04(d) hereof, then the Company shall deliver to the Holders, as promptly as practicable after the holders of the Common Stock are notified of such event, notice describing such issuance, distribution, dividend or distribution, as the case may be, and stating the expected Ex-Dividend Date and record date for such issuance, distribution, dividend or distribution, as the case may be. In addition, the Company shall deliver to the Holders written notice if the consideration included in such issuance, distribution, dividend or distribution, or the Ex-Dividend Date or record date of such issuance, distribution, dividend or distribution, as the case may be, changes.

(v) Tender and Exchange Offers . If the Company announces any tender or exchange offer that could require an adjustment in the Conversion Rate pursuant to Section 4.04(e) hereof, the Company shall deliver to the Holders on the day it announces such tender or exchange offer, and, if the Company is required to file with the Commission a Schedule TO in connection with such tender or exchange offer, an additional written notice (i) when the Company first files such Schedule TO, which notice shall include the address at which such Schedule TO is available on the Commission’s EDGAR system (or any successor thereto), and (ii) whenever the Company files an amendment to such Schedule TO, which notice shall include the address at which such amendment is available on the Commission’s EDGAR system (or any successor thereto).

(vi) Voluntary Increases . If the Company increases the Conversion Rate pursuant to Section 4.05(b), the Company shall deliver notice to the Holders at least 15 calendar days prior to the date on which such increase will become effective, which notice shall state the date on which such increase will become effective and the amount by which the Conversion Rate will be increased.

(vii) Dissolutions, Liquidations and Winding-Ups . If there is a voluntary or involuntary dissolution, liquidation or winding-up of the Company, the Company shall deliver notice to the Holders at promptly as possible, but in any event at least 60 Scheduled Trading Days prior to the earlier of (i) the date on which such dissolution, liquidation or winding-up, as the case may be, is expected to become effective or occur, and (ii) the date as of which it is expected that holders of Common Stock of record shall be entitled to exchange their Common Stock for securities or other property deliverable upon such dissolution, liquidation or winding-up, as the case may be, which notice shall state the expected effective date and record date for such event, as applicable, and the amount and kind of property that a holder of one share of the Common Stock is expected to be entitled, or may elect, to receive in such event. The Company shall deliver an additional written notice to Holders, as promptly as practicable, whenever the expected effective date or record date, as applicable, or the amount and kind of property that a holder of one share of the Common Stock is expect to be entitled to receive in such event, changes.

(b) Notices After Certain Actions and Events . Whenever an adjustment to the Conversion Rate becomes effective pursuant to Sections 4.05, 4.06 or 4.07 hereof, the Company will (i) file with the Trustee an Officer’s Certificate stating that such adjustment has become effective, the Conversion Rate, and the manner in which the adjustment was computed and (ii) deliver written notice to the Holders stating that such adjustment has become effective and the Conversion Rate or conversion privilege as adjusted. Failure to give any such notice, or any defect therein, shall not affect the validity of any such adjustment.

ARTICLE 5.
COVENANTS

Section 5.01 Payment of Principal, Interest and Fundamental Change Purchase Price and the Specified Date Purchase Price .

The Company covenants and agrees that it will cause to be paid the principal of (including the Fundamental Change Purchase Price, the Specified Date Purchase Price and the Redemption Price), premium, if any, on and accrued and unpaid interest, if any, on each of the Notes at the places, at the respective times and in the manner provided herein and in the Notes.

Section 5.02 Maintenance of Office or Agency .

The Company will maintain in the continental United States an office of the Paying Agent, an office of the Registrar and an office or agency where Notes may be surrendered for conversion (“ Conversion Agent ”) and where notices and demands to or upon the Company in respect of the Notes and this Indenture may be served. The Company will give prompt written notice to the Trustee of the location, and any change in the location, of such office or agency. If at any time the Company shall fail to maintain any such required office or agency or shall fail to furnish the Trustee with the address thereof, such presentations, surrenders, notices and demands may be made or served at the Corporate Trust Office or the office or agency of the Trustee.

The Company may also from time to time designate as co-registrars one or more other offices or agencies where the Notes may be presented or surrendered for any or all such purposes and may from time to time rescind such designations; provided that no such designation or rescission shall in any manner relieve the Company of its obligation to maintain an office or agency in the continental United States for such purposes. The Company will give prompt written notice to the Trustee of any such designation or rescission and of any change in the location of any such other office or agency. The terms “Paying Agent” and “Conversion Agent” include any such additional or other offices or agencies, as applicable.

The Company hereby initially designates the Trustee as the Paying Agent, Registrar, Custodian, Conversion Agent and Bid Solicitation Agent, and its Corporate Trust Office, which shall be in the continental United States, shall be considered as one such office or agency of the Company for each of the aforesaid purposes. The Company or its Affiliates may act as Paying Agent or Registrar.

With respect to any Global Note, the Corporate Trust Office of the Trustee or any Paying Agent shall be the place of payment where such Global Note may be presented or surrendered for payment or conversion or for registration of transfer or exchange, or where successor Notes may be delivered in exchange therefor; provided , however , that any such payment, conversion, presentation, surrender or delivery effected pursuant to the Applicable Procedures for such Global Note shall be deemed to have been effected at the place of payment for such Global Note in accordance with the provisions of this Indenture.

Section 5.03 Provisions as to Paying Agent .

(e) If the Company shall appoint a Paying Agent other than the Trustee, the Company will cause such Paying Agent to execute and deliver to the Trustee an instrument in which such agent shall agree with the Trustee, subject to the provisions of this Section 5.03:

(v) that it will hold all sums held by it as such agent for the payment of the principal of, any premium on, accrued and unpaid interest, if any, on, Fundamental Change Purchase Price for, the Specified Date Purchase Price for, and Redemption Price for, the Notes in trust for the benefit of the holders of the Notes;

(vi) that it will give the Trustee prompt written notice of any failure by the Company to make any payment of the principal of, any premium on, accrued and unpaid interest, if any, on, Fundamental Change Purchase Price for, the Specified Date Purchase Price or Redemption Price for, the Notes when the same shall be due and payable; and

(vii) that at any time during the continuance of an Event of Default, upon request of the Trustee, it will forthwith pay to the Trustee all sums so held in trust.

The Company shall, on or before each due date of the principal of, any premium on, accrued and unpaid interest, if any, on, Fundamental Change Purchase Price for, the Specified Date Purchase Price for, and Redemption Price for, the Notes, deposit with the Paying Agent a sum sufficient to pay such principal, premium, accrued and unpaid interest, Fundamental Change Purchase Price, the Specified Date Purchase Price for, or Redemption Price, as the case may be, and (unless such Paying Agent is the Trustee) the Company will promptly notify the Trustee in writing of any failure to take such action; provided that, if such deposit is made on the due date, such deposit must be received by the Paying Agent by 10:00 a.m., New York City time, on such date.

(f) If the Company shall act as its own Paying Agent, it will, on or before each due date of the principal of, any premium on, accrued and unpaid interest, if any, on, Fundamental Change Purchase Price for, the Specified Date Purchase Price for, or Redemption Price for, the Notes, set aside, segregate and hold in trust for the benefit of the Holders of the Notes a sum sufficient to pay such principal, any premium, accrued and unpaid interest, if any, Fundamental Change Purchase Price, the Specified Date Purchase Price for, or Redemption Price, as the case may be, so becoming due and will promptly notify the Trustee in writing of any failure to take such action and of any failure by the Company to make any payment of the principal of, premium on, accrued and unpaid interest on, Fundamental Change Purchase Price for, the Specified Date Purchase Price for, or Redemption Price for, the Notes when the same shall become due and payable.

(g) Anything in this Section 5.03 to the contrary notwithstanding, the Company may, at any time, for the purpose of obtaining a satisfaction and discharge of this Indenture, or for any other reason, pay or cause to be paid to the Trustee all sums held in trust by the Company or any Paying Agent hereunder as required by this Section 5.04, such sums to be held by the Trustee upon the trusts herein contained and upon such payment by the Company or any Paying Agent to the Trustee, the Company or such Paying Agent shall be released from all further liability with respect to such sums.

(h) Any money deposited with the Trustee or any Paying Agent, or then held by the Company, in trust for the payment of the principal of, any premium on, accrued and unpaid interest, if any, on, Fundamental Change Purchase Price for, the Specified Date Purchase Price, or Redemption Price for, any Note and remaining unclaimed for two years after such principal, premium, accrued and unpaid interest, Fundamental Change Purchase Price, the Specified Date Purchase Price, or Redemption Price has become due and payable shall be paid to the Company on request of the Company contained in an Officer’s Certificate, or (if then held by the Company) shall be discharged from such trust; and the Holder of such Note shall thereafter, as an unsecured general creditor, look only to the Company for payment thereof, and all liability of the Trustee or such Paying Agent with respect to such trust money, and all liability of the Company as trustee thereof, shall thereupon cease; provided , however , that, before the Trustee or such Paying Agent are required to make any such repayment, the Company shall cause to be published once, in a newspaper published in the English language, customarily published on each Business Day and of general circulation in The Borough of Manhattan, The City of New York, New York, notice that such money remains unclaimed and that, after a date specified therein, which shall not be less than 30 calendar days from the date of such publication, any unclaimed balance of such money then remaining will be repaid to the Company.

Section 5.04 Reports .

The Company will file with the Trustee, within 15 calendar days after it is required to file the same with the Commission (after giving effect to any grace period provided by Rule 12b-25 under the Exchange Act or any other applicable grace period provided by the SEC), copies of the quarterly and annual reports and of the information, documents and other reports, if any, that it is required to file with the Commission pursuant to Section 13 or 15(d) of the Exchange Act. Any such report, information or document that the Company files with the Commission through the EDGAR system (or any successor thereto) will be deemed to be delivered to the Trustee for the purposes of this Section 5.04 at the time of such filing through the EDGAR system (or such successor thereto); provided , however , that the Trustee shall have no responsibility to determine whether such filings have been made.

Delivery of any such reports, information and documents to the Trustee shall be for informational purposes only, and the Trustee’s receipt of such reports, information and documents shall not constitute constructive notice of any information contained therein or determinable from information contained therein, including the Company’s compliance with any of its covenants hereunder (as to which the Trustee is entitled to rely exclusively on Officer’s Certificates).

At any time the Company is not subject to Section 13 or 15(d) of the Exchange Act, the Company will, so long as any of the Notes or the shares of Common Stock delivered upon conversion of the Notes will, at such time, constitute “restricted securities” within the meaning of Rule 144(a)(3) under the Securities Act, promptly provide to the Trustee and will, upon written request, provide to any Holder, beneficial owner or prospective purchaser of such Notes or such shares of Common Stock the information required to be delivered pursuant to Rule 144A(d)(4) under the Securities Act to facilitate the resale of such Notes or such shares of Common Stock pursuant to Rule 144A under the Securities Act. The Company will take such further action as any Holder or beneficial owner of such Notes or such shares of Common Stock may reasonably request from time to time to enable such Holder or beneficial owner to sell such Notes or such shares of Common Stock in accordance with Rule 144A under the Securities Act, as such rule may be amended from time to time.

Section 5.05 Statements as to Defaults . The Company is required to deliver to the Trustee, within 120 days after the end of each fiscal year, an Officer’s Certificate from its principal executive officer, principal financial officer or principal accounting officer, stating whether or not to the knowledge of the signers thereof the Company is in default in the performance and observance of any of the terms, provisions and conditions of this Indenture (without regard to any period of grace or requirement of notice provided under this Indenture) and, if the Company is in default, specifying all such Default or Event of Defaults and the nature and the status thereof of which they may have knowledge. In addition, the Company shall deliver to the Trustee, as soon as possible, and in any event within 30 calendar days after the Company becomes aware of the occurrence of any Default or Event of Default, an Officer’s Certificate setting forth the details of such Default or Event of Default, its status and the action that the Company proposes to take with respect thereto. Such Officer’s Certificate shall also comply with any additional requirements set forth in Section 5.07 hereof. The Trustee shall not be deemed to have notice of any default or event of default unless a Responsible Officer of the Trustee has actual knowledge thereof.

Section 5.06 Additional Interest Notice . If Additional Interest is payable by the Company pursuant to Section 5.08 hereof or Section 6.04 hereof or if Contingent Interest is payable by the Company pursuant to Section 2.15 hereof, the Company shall deliver to the Trustee an Officer’s Certificate, prior to the Regular Record Date for each applicable Interest Payment Date, to that effect stating (a) the amount of such Additional Interest or Contingent Interest, as the case may be, that is payable and (b) the date on which such interest is payable. Unless and until a Responsible Officer of the Trustee receives at the Corporate Trust Office such a certificate, the Trustee may assume without inquiry that no such Additional Interest or Contingent Interest, as the case may be, is payable. If the Company has paid Additional Interest or Contingent Interest, as the case may be, directly to the Persons entitled to it, the Company shall deliver to the Trustee an Officer’s Certificate setting forth the particulars of such payment. If the Trustee has not received such Officer’s Certificate, the Trustee shall be fully protected in assuming no Additional Interest or Contingent Interest, as the case may be, is payable.

Section 5.07 Compliance Certificate and Opinions of Counsel .

(d) Except as otherwise expressly provided in this Indenture, upon any application or request by the Company to the Trustee to take any action under any provision of this Indenture, the Company shall furnish to the Trustee an Officer’s Certificate stating that all conditions precedent, if any, provided for in this Indenture relating to the proposed action have been complied with and an Opinion of Counsel stating that in the opinion of such counsel all such conditions precedent, if any, have been complied with, except that in the case of any such application or request as to which the furnishing of such documents is specifically required by any provision of this Indenture relating to such particular application or request, no additional certificate or opinion need be furnished; provided that no Opinion of Counsel shall be required to be delivered in connection with the Notes in the aggregate principal amount of $230,000,000 issued on the date hereof and dated as of the date hereof under this Indenture.

(e) Every certificate or opinion with respect to compliance with a condition or covenant provided for in this Indenture shall include:

(viii) a statement that each individual signing such certificate or opinion has read such covenant or condition and the definitions herein relating thereto;

(ix) a brief statement as to the nature and scope of the examination or investigation upon which the statements or opinions contained in such certificate or opinion are based;

(x) a statement that, in the opinion of each such individual, he has made such examination or investigation as is necessary to enable him to express an informed opinion as to whether or not such covenant or condition has been complied with; and

(xi) a statement as to whether, in the opinion of each such individual, such condition or covenant has been complied with.

(f) All applications, requests, certificates, statements or other instruments given under this Indenture shall be without personal recourse to any individual giving the same and may include an express statement to such effect.

Section 5.08 Additional Interest .

(h) If, at any time during the six-month period beginning on, and including, the date which is six months after the Last Original Issuance Date, the Company fails to timely file any periodic report that the Company is required to file with the Commission pursuant to Section 13 or 15(d) of the Exchange Act, as applicable (after giving effect to all applicable grace periods thereunder and other than current reports on Form 8-K), or the Notes are not otherwise Freely Tradable, including pursuant to Rule 144 under the Securities Act, by Holders other than “affiliates” (within the meaning of Rule 144) of the Company or Holders that were “affiliates” (within the meaning of Rule 144) of the Company during the 90 days immediately preceding the date of the proposed transfer (as a result of restrictions pursuant to U.S. securities laws or the terms of this Indenture or the Notes) the Company shall pay Additional Interest that will accrue on the Notes at the rate of 0.50% per annum of the principal amount of Notes then Outstanding for each day during such period for which the Company’s failure to file has occurred and is continuing or for which the restrictions on transfer are applicable; provided that such period shall end on the date that is one year from the Last Original Issuance Date.

(i) Notwithstanding the foregoing, no Additional Interest will accrue pursuant to Section 5.08(a) for each day on which the Company makes available to Holders an effective registration statement under the Securities Act permitting the resale of the Notes and the shares of Common Stock issuable upon conversion thereof. From and after the Company having made available such an effective shelf registration statement for the six-month period described in Section 5.08(a), no further Additional Interest will accrue under this Section 5.08(a) for so long as such effective shelf registration statement remains available.

(j) Further, if, and for so long as, the Restricted Notes Legend has not been removed from the Notes, the Notes are assigned a restricted CUSIP number or the Notes are not otherwise Freely Tradable by Holders other than “affiliates” (within the meaning of Rule 144) of the Company or Holders that were “affiliates” (within the meaning of Rule 144) of the Company during the 90 days immediately preceding the date of the proposed transfer (without restrictions pursuant to U.S. securities laws or the terms of this Indenture or the Notes) as of the 370th day after the Last Original Issuance Date, the Company will pay Additional Interest on the Notes that will accrue on the Notes at the rate of 0.50% per annum of the principal amount of Notes then Outstanding until such Restricted Notes Legend is removed, the Notes are assigned an unrestricted CUSIP number and the Notes are Freely Tradable.

(k) In no event shall Additional Interest accruing pursuant to this Section 5.08 (excluding, for the avoidance of doubt, any Contingent Interest that may accrue pursuant to Section 2.15 and, subject to the proviso in the immediately following sentence, any Additional Interest that may accrue pursuant to Sections 6.03(a) and 6.03(c)) accrue at a rate per annum in excess of 0.50%, regardless of the number of events or circumstances giving rise to requirements to pay such Additional Interest. Such Additional Interest that is payable shall be payable in arrears on each Interest Payment Date following accrual in the same manner as regular interest on the Notes and will be separate and distinct from, and in addition to, any Additional Interest that may accrue pursuant to Section 6.03; provided that, notwithstanding the foregoing, in no event shall Additional Interest accruing pursuant to Section 5.08(a) (excluding, for the avoidance of doubt, any Contingent Interest that may accrue pursuant to Section 2.15 and any Additional Interest that may accrue pursuant to Section 5.08(c)), when aggregated with any Additional Interest that may accrue pursuant to Section 6.03, accrue at a rate per annum in excess of 0.50%, regardless of the number of events or circumstances giving rise to requirements to pay such Additional Interest pursuant to Section 5.08(a) and/or pursuant to Sections 6.03(a) and 6.03(c).

Section 5.09 Corporate Existence . Subject to Article 9, the Company will do or cause to be done all things necessary to preserve and keep in full force and effect its corporate existence, rights (charter and statutory) and franchises; provided , however , that the Company shall not be required to preserve any such right or franchise if, in the judgment of the Company, the preservation thereof is no longer desirable in the conduct of the business of the Company.

Section 5.10 Restriction on Resales . The Company shall not, and shall procure that no Affiliate of the Company shall, resell any of the Notes that have been reacquired by the Company or any of such Affiliate.

Section 5.11 Further Instruments and Acts . Upon request of the Trustee, the Company will execute and deliver such further instruments and do such further acts as may be reasonably necessary or proper to carry out more effectively the purposes of this Indenture.

Section 5.12 Par Value Limitation . The Company shall not take any action that, after giving effect to any adjustment pursuant to Article 4, would result in the issuance of shares of Common Stock for less than the par value of such shares of Common Stock.

Section 5.13 Company to Furnish Trustee Names and Addresses of Holders . The Company will furnish or cause to be furnished to the Trustee

(e) semi-annually, not later than the 15th day after each Regular Record Date, a list, in such form as the Trustee may reasonably require, containing all the information in the possession or control of the Company, or any of its Paying Agents other than the Trustee, of the names and addresses of the Holders, as of such preceding Regular Record Date, and

(f) at such other times as the Trustee may request in writing, within 30 days after the receipt by the Company of any such request, a list of similar form and content as of a date not more than 15 days prior to the time such list is furnished.

ARTICLE 6.
REMEDIES

Section 6.01 Events of Default . Each of the following events shall be an “ Event of Default ” with respect to the Notes:

(i) default in any payment of interest on any Note when due and payable, and the default continues for a period of 30 calendar days;

(j) default in the payment of the principal of or any premium, if any, on any Note (including the Fundamental Change Purchase Price, the Specified Date Purchase Price and the Redemption Price) when due and payable on the Maturity Date, upon required repurchase, upon any redemption, upon declaration of acceleration or otherwise;

(k) failure by the Company to comply with its obligations under Article 4 hereof to convert the Notes into cash, shares of Common Stock or a combination of cash and shares of Common Stock, as applicable, upon exercise of a Holder’s conversion right and such failure continues for a period of five (5) calendar days;

(l) failure by the Company to comply with its obligations under Article 9 hereof;

(m) failure by the Company to issue a notice in accordance with the provisions of Section 3.02 hereof, Section 3.04 hereof, Section 4.01(b)(iii) hereof, or Section 4.01(b)(iv) hereof, in each case, for a period of five (5) calendar days after any such notice becomes due;

(n) failure by the Company for 60 days after written notice from the Trustee or the Holders of at least 25% in principal amount of the Notes then Outstanding (a copy of which notice, if given by Holders, must also to be given to the Trustee) has been received by the Company to comply with any of its other agreements contained in the Notes or this Indenture (other than a covenant or warranty a default in whose performance or whose breach is elsewhere in this Section 6.01 specifically provided for or that is not applicable to the Notes), which notice shall state that it is a “ Notice of Default ” hereunder;

(o) default by the Company or any of its Subsidiaries with respect to any mortgage, agreement or other instrument under which there may be outstanding, or by which there may be secured or evidenced any indebtedness for money borrowed in excess of $45,000,000 (or its foreign currency equivalent at the time) in the aggregate of the Company and/or any of the Subsidiaries of the Company, whether such indebtedness now exists or shall hereafter be created (i) resulting in such indebtedness becoming or being declared due and payable or (ii) constituting a failure to pay the principal of any such indebtedness when due and payable at its stated maturity, upon redemption, upon required repurchase, upon declaration of acceleration or otherwise; provided that no Event of Default will be deemed to occur under this clause (g) with respect to any such acceleration or any such failure to pay principal if such indebtedness is fully paid or otherwise fully acquired or retired within ten (10) calendar days after such acceleration or failure to pay principal;

(p) the Company or any Significant Subsidiary of the Company shall commence a voluntary case or other proceeding seeking the liquidation, reorganization or other relief with respect to the Company or such Significant Subsidiary or its debts under any bankruptcy, insolvency or other similar law now or hereafter in effect or seeking the appointment of a trustee, receiver, liquidator, custodian or other similar official of the Company or such Significant Subsidiary of the Company or any substantial part of the Company’s or such Significant Subsidiary of the Company’s property, or shall consent to any such relief or to the appointment of or taking possession by any such official in an involuntary case or other proceeding commenced against it, or shall make a general assignment for the benefit of creditors, or shall fail generally to pay its debts as they become due; or

(q) an involuntary case or other proceeding shall be commenced against the Company or any Significant Subsidiary of the Company seeking liquidation, reorganization or other relief with respect to the Company or such Significant Subsidiary of the Company or its debts under any bankruptcy, insolvency or other similar law now or hereafter in effect or seeking the appointment of a trustee, receiver, liquidator, custodian or other similar official of the Company or such Significant Subsidiary of the Company or any substantial part of its property, and such involuntary case or other proceeding shall remain undismissed and unstayed for a period of sixty consecutive days.

Section 6.02 Acceleration; Rescission and Annulment .

(i) If an Event of Default (other than an Event of Default specified in Section 6.01(h) hereof or Section 6.01(i) hereof with respect to the Company) occurs and is continuing, the Trustee by notice to the Company, or the Holders of at least 25% in principal amount of the Notes then Outstanding by written notice to the Company and the Trustee, may, and the Trustee at the request of such Holders shall, declare 100% of the principal of, premium, if any, and accrued and unpaid interest, if any, on all the Notes then Outstanding to be due and payable immediately. If an Event of Default specified in Section 6.01(h) or Section 6.01(i) with respect to the Company occurs and is continuing, 100% of the principal of, premium, if any, and accrued and unpaid interest, if any, on all Notes shall automatically become due and payable.

(j) Notwithstanding anything to the contrary herein, the provisions of Section 6.02(a), however, are subject to the conditions that if, at any time after the principal of, and accrued and unpaid interest, if any, on, the Notes shall have been so declared due and payable, and before any judgment or decree for the payment of the monies due shall have been obtained as herein; provided that:

(vi) the Company pays or delivers, as the case may be, or deposits with the Trustee an amount of cash and the number of shares of Common Stock, if any (solely to settle outstanding conversions), sufficient to pay all matured installments of interest upon all the Notes, all cash and shares of Common Stock, if any, due upon the conversion of any and all converted Notes, and the principal of and accrued and unpaid interest, if any, on all Notes which shall have become due otherwise than by acceleration (with interest on such principal and, to the extent that payment of such interest is enforceable under applicable law, on overdue installments of interest, at the rate or rates, if any, specified in the Notes to the date of such payment or deposit), and such amount as shall be sufficient to cover all amounts owing under the Indenture to the Trustee and its agents and counsel;

(vii) rescission would not conflict with any judgment or decree of a court of competent jurisdiction; and

(viii) any and all Events of Default under this Indenture, other than the non-payment of the principal of the Notes that became due because of the acceleration, shall have been cured, waived or otherwise remedied as provided herein,

then, the Holders of a majority of the aggregate principal amount of Notes then Outstanding, by written notice to the Company and to the Trustee, may waive all Defaults and Events of Default with respect to the Notes (other than a Default or an Event of Default resulting from the failure to pay the Fundamental Change Purchase Price, the Specified Date Purchase Price or the Redemption Price of a Note, to pay or deliver, as the case may be, the amount of cash, the number of shares of Common Stock or combination of cash and shares of Common Stock, if any, as the case may be, due upon conversion of a Note, or with respect to another covenant or provision of the Indenture that cannot be modified or amended without the consent of each affected Holder) and may rescind and annul the declaration of acceleration resulting from such Defaults or Events of Default (other than those resulting from the failure to pay the Fundamental Change Purchase Price, the Specified Date Purchase Price or the Redemption Price of a Note, to pay or deliver, as the case may be, the amount of cash, the number of shares of Common Stock or the combination of cash and shares of Common Stock, if any, as the case may be, due upon conversion of a Note, or with respect to another covenant or provision of the Indenture that cannot be modified or amended without the consent of each affected Holder) and their consequences; provided that no such rescission or annulment will extent to or will affect any subsequent Default or shall impair any right consequent on such Default.

Section 6.03 Additional Interest .

(n) Notwithstanding Section 6.02 hereof, to the extent the Company elects, the sole remedy for an Event of Default under Section 6.01(f) relating to the Company’s failure to comply with Section 5.04 hereof (such Event of Default, a “ Reporting Event of Default ”), will consist exclusively of the right to receive additional interest on the Notes (“ Additional Interest ”) at a rate per annum equal to 0.50% of the principal amount of the Notes then Outstanding for each day during the 180 days after the occurrence of such Reporting Event of Default, payable semiannually in arrears at the same time and in the same manner as regular interest on the Notes for each day during the 180-day period beginning on, and including, the day on which such Reporting Event of Default occurs during which such Reporting Event of Default is continuing (and has neither been waived nor cured).

(o) On the 181st day after the date on which the Reporting Event of Default occurred (if such Reporting Event of Default has not been cured or waived prior to such 181st day), the Notes will be subject to acceleration as provided in Section 6.02(a) hereof and Additional Interest will cease to accrue pursuant to this Section 6.03.

(p) In order to elect to pay the Additional Interest as the sole remedy during the first 180 days after the occurrence of a Reporting Event of Default, the Company must notify all Holders of Notes, the Trustee and the Paying Agent in writing of such election prior to the beginning of such 180-day period. Upon the Company’s failure to timely give such notice, the Notes shall be immediately subject to acceleration as provided in Section 6.03 hereof. In the event the Company does not elect to pay Additional Interest following a Reporting Event of Default or the Company elected to pay Additional Interest but does not pay the Additional Interest when due, the Notes will be subject to acceleration as provided in Section 6.02 hereof. Nothing in this Section 6.03 shall affect the rights of Holders of Notes in the event of the occurrence of any other Event of Default.

(q) In no event shall Additional Interest accruing pursuant to Sections 6.03(a) and 6.03(c) (excluding, for the avoidance of doubt, any Contingent Interest that may accrue pursuant to Section 2.15 and, subject to the proviso in the immediately following sentence, any Additional Interest that may accrue pursuant to Section 5.08) accrue at a rate per annum in excess of 0.50%, regardless of the number of events or circumstances giving rise to requirements to pay such Additional Interest pursuant to Sections 6.03(a) and 6.03(c). Such Additional Interest will be payable in arrears on each Interest Payment Date following accrual in the same manner as regular interest on the Notes and will be separate and distinct from, and in addition to, any Additional Interest that may accrue pursuant to Section 5.08; provided that, notwithstanding the foregoing, in no event shall Additional Interest accruing pursuant to Sections 6.03(a) and 6.03(c) (excluding, for the avoidance of doubt, any Contingent Interest that may accrue pursuant to Section 2.15 and any Additional Interest that may accrue pursuant to Section 5.08(c)), when aggregated with any Additional Interest that may accrue pursuant to Section 5.08(a), accrue at a rate per annum in excess of 0.50%, regardless of the number of events or circumstances giving rise to requirements to pay such Additional Interest pursuant to Section 5.08(a) and/or pursuant to Sections 6.03(a) and 6.03(c).

Section 6.04 Waiver of Past Defaults . The Holders of a majority in principal amount of the Notes then Outstanding may waive all past defaults (except with respect to nonpayment of the principal of, premium, if any, or interest on, or Fundamental Change Purchase Price, Specified Date Purchase Price or Redemption Price with respect to, any Notes when due, or the failure to pay or deliver as the case may be, the amount of cash, the number of shares of Common Stock or combination of cash and shares of Common Stock, if any, as the case may be, due upon conversion of a Note) and rescind any such acceleration with respect to the Notes and its consequences if (x) rescission would not conflict with any judgment or decree of a court of competent jurisdiction and (y) all existing Events of Default, other than the nonpayment of the principal of and interest on the Notes that have become due solely by such declaration of acceleration, have been cured or waived.

Section 6.05 Control by Majority . At any time, the Holders of a majority of the aggregate principal amount of the then Outstanding Notes may direct in writing the time, method and place of conducting any proceeding for any remedy available to the Trustee or of exercising any trust or power conferred on the Trustee. However, the Trustee may refuse to follow any direction that conflicts with law or this Indenture or, subject to the Trustee’s duties under Article 11 hereof and the Trust Indenture Act, that the Trustee determines to be unduly prejudicial to the rights of a Holder or to the Trustee, or that would potentially involve the Trustee in personal liability unless the Trustee is offered indemnity or security satisfactory to it against any loss, liability or expense to the Trustee that may result from the Trustee’s instituting such proceeding as the Trustee. Prior to taking any action hereunder, the Trustee will be entitled to indemnification and security satisfactory to it against all losses and expenses caused by taking or not taking such action.

Section 6.06 Limitation on Suits . Subject to Section 6.07 hereof, no Holder may pursue a remedy with respect to this Indenture or the Notes unless:

(g) such Holder has previously delivered to the Trustee written notice that an Event of Default has occurred and is continuing;

(h) the Holders of at least 25% of the aggregate principal amount of the then Outstanding Notes deliver to the Trustee a written request that the Trustee pursue a remedy with respect to such Event of Default;

(i) such Holder or Holders have offered and, if requested, provided to the Trustee indemnity or security satisfactory to the Trustee against any loss, liability or other expense of compliance with such written request;

(j) the Trustee has not complied with such written request within 60 days after receipt of such written request and offer of indemnity or security; and

(k) during such 60-day period, the Holders of a majority of the aggregate principal amount of the then Outstanding Notes did not deliver to the Trustee a direction inconsistent with such written request.

Section 6.07 Rights of Holders to Receive Payment and to Convert . Notwithstanding anything to the contrary elsewhere in this Indenture, the right, which is absolute and unconditional, of any Holder to receive payment of the principal of, premium, if any, interest on, Fundamental Change Purchase Price for, the Specified Date Purchase Price for, or Redemption Price for its Notes, on or after the respective due date, and to convert its Notes and receive the payment or delivery of cash, shares of Common Stock or combination of cash and shares of Common Stock, if any, as the case may be, due with respect to such Notes in accordance with Article 4 hereof, or to bring suit for the enforcement of any such payment or conversion rights, will not be impaired or affected without the consent of such Holder and will not be subject to the requirements of Section 6.06 hereof.

Section 6.08 Collection of Indebtedness; Suit for Enforcement by Trustee . If an Event of Default specified in Section 6.01(a), 6.01(b) or 6.01(c) hereof occurs and is continuing, the Trustee is authorized to recover judgment in its own name and as trustee of an express trust against the Company for the whole amount of principal of, premium on, interest on, Fundamental Change Purchase Price for, the Specified Date Purchase Price for, Redemption Price for, and the amount of cash, the number of shares of Common Stock or the combination of cash and shares of Common Stock, if any, as the case may be, due upon the conversion of, the Notes, as the case may be, and such further amount as is sufficient to cover the costs and expenses of collection, including the reasonable compensation, expenses, disbursements and advances of the Trustee, its agents and counsel, as well as any other amounts that may be due under Section 11.07 hereof.

Section 6.09 Trustee May Enforce Claims Without Possession of Notes . All rights of action and claims under this Indenture or the Notes may be prosecuted and enforced by the Trustee without the possession of any of the Notes or the production thereof in any proceeding relating thereto, and any such proceeding instituted by the Trustee shall be brought in its own name as trustee of an express trust, and any recovery of judgment shall, after provision for the payment of the compensation, and reasonable expenses, disbursements and advances of the Trustee, its agents and counsel, be for the ratable benefit of the Holders in respect of which such judgment has been recovered.

Section 6.10 Trustee May File Proofs of Claim . The Trustee is authorized to file such proofs of claim and other papers or documents as may be necessary or advisable to have the claims of the Trustee and the Holders allowed in any judicial proceedings relative to the Company, its creditors or its property and, unless prohibited by law or applicable regulations, will be entitled to collect, receive and distribute any money or other property payable or deliverable on any such claims, and any custodian in any such judicial proceeding is hereby authorized by each Holder to make such payments to the Trustee, and, in the event that the Trustee consents to the making of such payments directly to the Holders, to pay to the Trustee any amount due to it for the reasonable compensation, expenses, disbursements and advances of the Trustee, its agents and counsel, and any other amounts due the Trustee under Section 11.07 hereof. To the extent that the payment of any such compensation, expenses, disbursements and advances of the Trustee, its agents and counsel, and any other amounts due the Trustee under Section 11.07 hereof out of the estate in any such proceeding, will be denied for any reason, payment of the same will be secured by a lien on, and is paid out of, any and all distributions, dividends, money, securities and other properties that the Holders may be entitled to receive in such proceeding, whether in liquidation or under any plan of reorganization or arrangement or otherwise. Nothing herein contained will be deemed to authorize the Trustee to authorize or consent to, or to accept or to adopt on behalf of any Holder, any plan of reorganization, arrangement, adjustment or composition affecting the Notes or the rights of any Holder, or to authorize the Trustee to vote in respect of the claim of any Holder in any such proceeding.

Section 6.11 Restoration of Rights and Remedies . If the Trustee or any Holder has instituted any proceeding to enforce any right or remedy under this Indenture and such proceeding has been discontinued or abandoned for any reason, or has been determined adversely to the Trustee or to such Holder, then and in every such case, subject to any determination in such proceeding, the Company, the Trustee and the Holders shall be restored severally and respectively to their former positions hereunder and thereafter all rights and remedies of the Trustee and the Holders shall continue as though no such proceeding had been instituted.

Section 6.12 Rights and Remedies Cumulative . Except as otherwise provided with respect to the replacement or payment of mutilated, destroyed, lost or stolen Notes in Section 2.09 hereof, no right or remedy herein conferred upon or reserved to the Trustee or to the Holders is intended to be exclusive of any other right or remedy, and every right and remedy shall, to the extent permitted by law, be cumulative and in addition to every other right and remedy given hereunder or now or hereafter existing at law or in equity or otherwise. The assertion or employment of any right or remedy hereunder, or otherwise, shall not prevent the concurrent assertion or employment of any other appropriate right or remedy.

Section 6.13 Delay or Omission Not a Waiver . No delay or omission of the Trustee or of any Holder to exercise any right or remedy accruing upon any Event of Default shall impair any such right or remedy or constitute a waiver of any such Event of Default or an acquiescence therein. Every right and remedy given by this Article 6 or by law to the Trustee or to the Holders may be exercised from time to time and as often as may be deemed expedient by the Trustee (subject to the limitations contained in this Indenture) or by the Holders, as the case may be.

Section 6.14 Priorities . If the Trustee collects any money pursuant to this Article 6, it will pay out the money in the following order:

FIRST: to the Trustee, its agents and attorneys for amounts due under Section 11.07 hereof, including payment of all compensation, expenses and liabilities incurred, and all advances made, by the Trustee and the costs and expenses of collection;

SECOND: to the Holders, for any amounts due and unpaid on the principal of, premium on, accrued and unpaid interest on, Fundamental Change Purchase Price for, the Specified Date Purchase Price for, Redemption Price for, and any cash due upon conversion of, any Note, without preference or priority of any kind, according to such amounts due and payable on all of the Notes; and

THIRD: the balance, if any, to the Company or to such other party as a court of competent jurisdiction directs.

The Trustee may fix a record date and payment date for any payment to the Holders pursuant to this Section 6.14. If the Trustee so fixes a record date and a payment date, at least 15 calendar days prior to such record date, the Trustee will deliver to each Holder a written notice, which notice will state such record date, such payment date and the amount of such payment.

Section 6.15 Undertaking for Costs . All parties to this Indenture agree, and each Holder, by such Holder’s acceptance of a Note, shall be deemed to have agreed, that any court may in its discretion require, in any suit for the enforcement of any right or remedy under this Indenture, or in any suit against the Trustee for any action taken or omitted by it as Trustee, the filing by any party litigant in such suit of an undertaking to pay the costs of such suit, and that such court may in its discretion assess reasonable costs, including reasonable attorneys’ fees, against any party litigant in such suit, having due regard to the merits and good faith of the claims or defenses made by such party litigant; provided , however , that the provisions of this Section 6.15 shall not apply to any suit instituted by the Trustee, to any suit instituted by any Holder, or group of Holders, holding in the aggregate more than 10% in aggregate principal amount of the Notes then Outstanding, or to any suit instituted by any Holder for the enforcement of the payment of the principal of, any premium on, accrued and unpaid interest, if any, on, Fundamental Change Purchase Price for, the Specified Date Purchase Price for, or Redemption Price for any Note on or after the due date expressed or provided for in this Indenture or to any suit for the enforcement of the right to convert any Note in accordance with the provisions of Article 4 hereof.

Section 6.16 Waiver of Stay, Extension and Usury Laws . The Company covenants that, to the extent that it may lawfully do so, it will not at any time insist upon, plead, or in any manner whatsoever claim or take the benefit or advantage of, any stay, extension or usury law wherever enacted, now or at any time hereafter in force, that may affect the covenants or the performance of this Indenture; and the Company, to the extent that it may lawfully do so, hereby expressly waives all benefit or advantage of any such law, and covenants that it will not, by resort to any such law, hinder, delay or impede the execution of any power herein granted to the Trustee, but will instead suffer and permit the execution of every such power as though no such law has been enacted.

Section 6.17 Notices from the Trustee . Whenever a Default occurs and is continuing and is known to the Trustee, the Trustee must deliver notice of such Default to each Holder within 90 calendar days after the date on which such Default first occurred. Except in the case of a Default in the payment of the principal (including the Fundamental Change Purchase Price, the Specified Date Purchase Price and the Redemption Price) of, premium, if any, or interest on any Note or of a Default in the payment or delivery, as the case may be, of the amount of cash, the number of shares of Common Stock or the combination of cash and shares of Common Stock, if any, as the case may be, due upon conversion of a Note, the Trustee shall be protected in withholding such notice if and so long as the Trustee in good faith determines that the withholding of such notice is in the interests of the Holders.

ARTICLE 7.
SATISFACTION AND DISCHARGE

Section 7.01 Discharge of Liability on Notes . When (a) the Company shall deliver to the Registrar for cancellation all Notes theretofore authenticated (other than any Notes that have been destroyed, lost or stolen and in lieu of or in substitution for which other Notes shall have been authenticated and delivered) and not theretofore canceled, or (b) all the Notes not theretofore canceled or delivered to the Trustee for cancellation shall have become due and payable (whether on the Maturity Date, on any Fundamental Change Purchase Date, Specified Purchase Date, Redemption Date, upon conversion or otherwise) and the Company shall deposit with the Trustee, in trust, or deliver to the Holders, as applicable, an amount of cash, a number of shares of Common Stock, or a combination of cash and shares of Common Stock, if any, as the case may be (solely to settle amounts due with respect to outstanding conversions), sufficient to pay all amounts due on all of such Notes (other than any Notes that shall have been mutilated, destroyed, lost or stolen and in lieu of or in substitution for which other Notes shall have been authenticated and delivered) not theretofore canceled or delivered to the Trustee for cancellation, including principal and interest due, accompanied, except in the event the Notes are due and payable solely in cash at the Maturity Date or upon an earlier Fundamental Change Purchase Date, the Specified Date Purchase Price or a Redemption Date, by a verification report as to the sufficiency of the deposited amount from an independent certified accountant or other financial professional reasonably satisfactory to the Trustee, and if the Company shall also pay or cause to be paid all other sums payable hereunder by the Company, then this Indenture shall cease to be of further effect (except as to (i) rights hereunder of Holders to receive all amounts owing upon the Notes and the other rights, duties and obligations of Holders, as beneficiaries hereof with respect to the amounts, if any, so deposited with the Trustee and (ii) the rights, obligations and immunities of the Trustee hereunder), and the Trustee, on written demand of the Company accompanied by an Officer’s Certificate and an Opinion of Counsel and at the cost and expense of the Company, shall execute proper instruments acknowledging satisfaction and discharge of this Indenture; the Company, however, hereby agrees to reimburse the Trustee for any costs or expenses thereafter reasonably and properly incurred by the Trustee, including the fees and expenses of its counsel, and to compensate the Trustee for any services thereafter reasonably and properly rendered by the Trustee in connection with this Indenture or the Notes.

Section 7.02 Deposited Monies to Be Held in Trust by Trustee . Subject to Section 7.04 hereof, all monies and shares of Common Stock, as the case may be, deposited with the Trustee pursuant to Section 7.01 hereof shall be held in trust for the sole benefit of the Holders of the Notes, and such monies and shares of Common Stock shall be applied by the Trustee to the payment, either directly or through any Paying Agent (including the Company if acting as its own Paying Agent), to the Holders of the particular Notes for the payment, settlement or redemption of which such monies or shares of Common Stock, or both, as the case may be, have been deposited with the Trustee, of all sums or amounts due and to become due thereon for principal and interest, if any.

Section 7.03 Paying Agent to Repay Monies Held . Upon the satisfaction and discharge of this Indenture, all monies and shares of Common Stock, as the case may be, then held by any Paying Agent (if other than the Trustee) shall, upon written request of the Company, be repaid to it or paid to the Trustee, and thereupon such Paying Agent shall be released from all further liability with respect to such monies and shares of Common Stock, or both, as the case may be.

Section 7.04 Return of Unclaimed Monies . Subject to the requirements of applicable law, any monies and shares of Common Stock deposited with or paid to the Trustee for payment of the principal of or interest, if any, on the Notes and not applied but remaining unclaimed by the Holders of the Notes for two (2) years after the date upon which the principal of or interest, if any, on such Notes, as the case may be, shall have become due and payable, shall be repaid to the Company by the Trustee on written demand, and all liability of the Trustee shall thereupon cease with respect to such monies and shares of Common Stock; and the Holder shall thereafter look only to the Company for any payment or delivery that such Holder may be entitled to collect unless an applicable abandoned property law designates another person.

Section 7.05 Reinstatement . If the Trustee or the Paying Agent is unable to apply any money or shares of Common Stock, or both, as the case may be, in accordance with Section 7.02 hereof by reason of any order or judgment of any court or governmental authority enjoining, restraining or otherwise prohibiting such application, the Company’s obligations under the Indenture and the Notes shall be revived and reinstated as though no deposit had occurred pursuant to Section 7.01 hereof until such time as the Trustee or the Paying Agent is permitted to apply all such money and shares of Common Stock in accordance with Section 7.02 hereof; provided , however , that, if the Company makes any payment of interest on, principal of or payment or delivery in respect of any Note following the reinstatement of its obligations, the Company shall be subrogated to the rights of the Holders of such Notes to receive such payment from the money or shares of Common Stock, if any, held by the Trustee or Paying Agent.

ARTICLE 8.
SUPPLEMENTAL INDENTURES

Section 8.01 Supplemental Indentures Without Consent of Holders .

Without the consent of any Holder, the Company and the Trustee, at any time and from time to time, may enter into one or more indentures supplemental hereto, in form satisfactory to the Trustee, for any of the following purposes:

(r) to cure any ambiguity, omission, defect or inconsistency in this Indenture or the Notes that does not adversely affect Holders of the Notes;

(s) to conform the terms of this Indenture or the Notes to the description thereof in the Preliminary Offering Circular, as supplemented by the pricing term sheet related to the offering of the Notes as evidenced by an Officer’s Certificate from the Company to the Trustee;

(t) to evidence the succession by a Successor Company and to provide for the assumption by a Successor Company of the Company’s obligations under the Indenture;

(u) to add guarantees with respect to the Notes;

(v) to secure the Notes;

(w) to add to the Company’s covenants such further covenants, restrictions or conditions for the benefit of the Holders or surrender any right or power conferred upon the Company by the Indenture;

(x) to make any other change that does not adversely affect the rights of any Holder (other than any Holder that consents to such change);

(y) to provide for a successor Trustee;

(z) to comply with the Applicable Procedures; or

(aa) to irrevocably elect a Settlement Method or eliminate, in the aggregate, any one or two Settlement Methods or, in the case of Combination Settlement, irrevocably elect a Specified Dollar Amount.

Section 8.02 Supplemental Indentures With Consent of Holders .

With the consent of the Holders of not less than a majority in principal amount of the Outstanding Notes affected by such supplemental indenture (including, without limitation, consents obtained in connection with a purchase of, or tender or exchange offer for, Notes) and by Act of said Holders delivered to the Company and the Trustee, the Company, and the Trustee may enter into an indenture or indentures supplemental hereto for the purpose of adding any provisions to or changing in any manner or eliminating any of the provisions of this Indenture or of modifying in any manner the rights of the Holders under this Indenture; provided , however , that no such supplemental indenture shall, without the consent of the Holder of each Outstanding Note affected thereby:

(e) reduce the percentage in aggregate principal amount of Notes then Outstanding necessary to waive any past Default or Event of Default;

(f) reduce the rate of interest on any Note or change the time for payment of interest on any Note;

(g) reduce the principal of or premium, if any, on any Note or change the Maturity Date of any Note;

(h) change the place or currency of payment on any Note;

(i) make any change that impairs or adversely affects the conversion rights of any Notes;

(j) reduce the Fundamental Change Purchase Price or the Specified Date Purchase Price of any Note or amend or modify in any manner adverse to the rights of the Holders of the Notes the Company’s obligation to pay the Fundamental Change Purchase Price or the Specified Date Purchase Price, whether through an amendment or waiver of provisions in the covenants, definitions or otherwise;

(k) impair the right of any Holder of Notes to receive payment of principal of, premium, if any, and interest, if any, on, its Notes, or the right to receive payment or delivery, as the case may be, of the amount of cash, the number of shares of Common Stock or the combination of cash and shares of Common Stock, if any, as the case may be, due upon conversion of its Notes on or after the due dates therefor or to institute suit for the enforcement of any such payment or delivery, as the case may be, with respect to such Holder’s Notes;

(l) modify the provisions with respect to the Company’s redemption rights as described under Article 10 hereof in a manner that is adverse to the rights of the Holders of the Notes (other than the date by which a Redemption Notice must be given);

(m) modify the ranking provisions of this Indenture in a manner that is adverse to the rights of the Holders of the Notes;

(n) modify the provisions with respect to the obligation of the Company to pay Contingent Interest in a manner adverse to Holders of the Notes; or

(o) make any change to the provisions of this Article 8 that requires each Holder’s consent or in the waiver provisions in Section 6.04 of this Indenture if such change is adverse to the rights of Holders of the Notes.

It shall not be necessary for any Act or consent of Holders under this Section 8.02 to approve the particular form of any proposed supplemental indenture, but it shall be sufficient if such Act or consent shall approve the substance thereof. The Company may, but shall not be obligated to, fix a record date for the purpose of determining the Persons entitled to consent to any indenture supplemental hereto. If a record date is fixed, the Holders on such record date, or their duly designated proxies, and only such Persons, shall be entitled to consent to such supplemental indenture, whether or not such Holders remain Holders after such record date; provided that, unless such consent shall have become effective by virtue of the requisite percentage having been obtained prior to the date which is 90 calendar days after such record date, any such consent previously given shall automatically and without further action by any Holder be cancelled and of no further effect.

Section 8.03 Notice of Amendment or Supplement . After an amendment or supplement under this Article 8 becomes effective, the Company shall provide to the Holders a written notice briefly describing such amendment or supplement. However, the failure to give such notice to all the Holders, or any defect in the notice, shall not impair or affect the validity of the amendment or supplement.

Section 8.04 Trustee to Sign Amendments, Etc . The Trustee shall sign any amendment or supplement authorized pursuant to this Article 8 if the amendment or supplement does not adversely affect the rights, duties, liabilities or immunities of the Trustee. If it does, the Trustee may, but need not, sign it. In signing or refusing to sign such amendment or supplement, the Trustee shall receive, and, shall be fully protected in conclusively relying upon, an Officer’s Certificate and an Opinion of Counsel provided at the expense of the Company providing that such amendment or supplement is authorized or permitted by the Indenture and such amendment or supplement is a legal, valid and binding obligation of the Company enforceable against the Company in accordance with its terms.

ARTICLE 9.
SUCCESSOR COMPANY

Section 9.01 Company May Consolidate, Etc. on Certain Terms . Subject to the provisions of Section 9.03, the Company shall not amalgamate or consolidate with, merge with or into or convey, transfer or lease its properties and assets substantially as an entirety to another Person, unless:

(p) the resulting, surviving transferee or successor Person (the “ Successor Company ”), if not the Company, shall be (and, if the Company will remain a party to the Notes and this Indenture after giving effect to such transaction and the requirements in respect thereof under this Indenture, is) a corporation organized and existing under the laws of the United States of America, any State thereof or the District of Columbia, and the Successor Company (if not the Company) shall expressly assume, by supplemental indenture, executed and delivered to the Trustee, in form satisfactory to the Trustee, all of the obligations of the Company under the Notes and this Indenture as applicable to the Notes;

(q) immediately after giving effect to such transaction, no Default or Event of Default shall have occurred and be continuing under this Indenture with respect to the Notes;

(r) if, upon the occurrence of any such transaction, (x) the Notes would become convertible pursuant to the terms of this Indenture into securities issued by an issuer other than the resulting, surviving, transferee or successor corporation, and (y) such resulting, surviving, transferee or successor corporation is a wholly owned subsidiary of the issuer of such securities into which the Notes have become convertible, such other issuer shall fully and unconditionally guarantee on a senior basis the resulting, surviving, transferee or successor corporation’s obligations under the Notes; and

(s) all the conditions specified in this Article 9 are met.

Upon any such amalgamation, consolidation, merger, conveyance, transfer or lease, the Successor Company (if not the Company) shall succeed to, and may exercise every right and power of the Company under this Indenture, and the Company shall be discharged from its obligations under the Notes and the Indenture except in the case of any such lease.

For purposes of this Section 9.01, the conveyance, transfer or lease of the properties and assets of one or more Subsidiaries of the Company substantially as an entirety to another Person, which properties and assets, if held by the Company instead of such Subsidiary or Subsidiaries, would constitute the properties and assets of the Company substantially as an entirety on a consolidated basis, shall be deemed to be the transfer of the properties and assets of the Company substantially as an entirety to another Person.

Section 9.02 Successor Corporation to Be Substituted . In case of any such amalgamation, consolidation, merger, conveyance, transfer or lease and upon the assumption by the Successor Company (if other than the Company), by supplemental indenture, executed and delivered to the Trustee and satisfactory in form to the Trustee, of the due and punctual payment of the principal of and premium (including any Fundamental Change Purchase Price, Specified Date Purchase Price, and Redemption Price), if any, accrued and unpaid interest, if any, on all of the Notes, the due and punctual delivery or payment, as the case may be, of any Settlement Amount due upon conversion of the Notes and the due and punctual performance of all of the covenants and conditions of this Indenture to be performed by the Company under this Indenture, such Successor Company shall succeed to and be substituted for, and may exercise every right and power of, the Company under this Indenture, with the same effect as if it had been named herein as the party of the first part; provided , however , that, in the case of a conveyance, transfer or lease to one or more of its Subsidiaries of all or substantially all of the properties and assets of the Company, the Notes will remain convertible based on the Common Stock and into cash, shares of Common Stock, or a combination of cash and shares of Common Stock, if any, as the case may be, in accordance with Section 4.03 hereof, but subject to adjustment (if any) in accordance with Section 4.07 hereof. Such Successor Company thereupon may cause to be signed, and may issue either in its own name or in the name of the Company any or all of the Notes issuable hereunder which theretofore shall not have been signed by the Company and delivered to the Trustee; and, upon the order of such Successor Company instead of the Company and subject to all the terms, conditions and limitations in this Indenture prescribed, the Trustee shall authenticate and shall deliver, or cause to be authenticated and delivered, any Notes that previously shall have been signed and delivered by the officers of the Company to the Trustee for authentication, and any Notes that such Successor Company thereafter shall cause to be signed and delivered to the Trustee for that purpose. All the Notes so issued shall in all respects have the same legal rank and benefit under this Indenture as the Notes theretofore or thereafter issued in accordance with the terms of this Indenture as though all of such Notes had been issued at the date of the execution hereof. In the event of any such amalgamation, consolidation, merger, conveyance or transfer (but not in the case of a lease), the Person named as the “Company” in the first paragraph of this Indenture or any successor that shall thereafter have become such in the manner prescribed in this Article 9 may be dissolved, wound up and liquidated at any time thereafter and, except in the case of a lease, such Person shall be released from its liabilities as obligor and maker of the Notes and from its obligations under this Indenture.

In case of any such amalgamation, consolidation, merger, conveyance, transfer or lease, such changes in phraseology and form (but not in substance) may be made in the Notes thereafter to be issued as may be appropriate.

Section 9.03 Opinion of Counsel to Be Given to Trustee . In the case of any such amalgamation, merger, consolidation, conveyance, transfer or lease the Trustee shall receive an Officer’s Certificate and an Opinion of Counsel stating that any such amalgamation, consolidation, merger, conveyance, transfer or lease and any such assumption and, if a supplemental indenture is required in connection with such transaction, such supplemental indenture, complies with the provisions of this Indenture.

ARTICLE 10.
OPTIONAL REDEMPTION

Section 10.01 Redemption Rights .

The Company shall not redeem the Notes prior to November 19, 2018, and no sinking fund is provided for the Notes.

(f) On or after November 19, 2018, the Company may at any time or from time to time redeem any or all of the Notes, except for the Notes that the Company is required to purchase under Section 3.01 or Section 3.03, as the case may be, in cash at the applicable Redemption Price.

(g) The Company may elect to redeem any or all of the Notes pursuant to this Section 10.01 by providing a Redemption Notice pursuant to Section 10.03 hereof, not more than 60 calendar days but not less than 30 calendar days prior to the Redemption Date. Simultaneously with providing such Redemption Notice, the Company shall publish a press release and publish such information on the Company’s website. The Company shall provide written notice to the Trustee 35 calendar days prior to the Redemption Date or such shorter period agreed to by the Trustee.

Section 10.02 Redemption Price . The “ Redemption Price ” for the Notes to be redeemed on any Redemption Date shall be an amount equal to 100% of the principal amount of the Notes being redeemed, plus any accrued and unpaid interest, to, but excluding, the Redemption Date. If the Redemption Date falls after a Regular Record Date for the payment of interest and on or prior to the corresponding Interest Payment Date, the Company shall pay the full amount of accrued and unpaid interest, if any, payable on such Interest Payment Date to the holder of record as of the Close of Business on such Regular Record Date and the Redemption Price shall be an amount equal to 100% of the principal amount of the Notes being redeemed.

Section 10.03 Redemption Notice . Notice of redemption (a “ Redemption Notice ”) shall be given by first-class mail, postage prepaid, to each Holder of Notes to be redeemed at their addresses set forth in the Register.

(l) The Redemption Notice shall state:

(i) the date on which the Redemption Price will become due and payable upon each such Note (the “ Redemption Date ”) (which must be a Business Day);

(ii) the Redemption Price;

(iii) that on the Redemption Date, the Redemption Price will become due and payable upon each such Note, and that interest thereon, if any, shall cease to accrue on and after said date;

(iv) the place or places where such Notes are to be surrendered for payment of the Redemption Price;

(v) that Holders have a right to convert the Notes called for redemption upon satisfaction of the requirements set forth in the Indenture;

(vi) the time at which the Holders’ right to convert the Notes called for redemption will expire, which will be the Close of Business on the second Business Day immediately preceding the Redemption Date;

(vii) the procedures a converting Holder must follow to convert its Notes;

(viii) the Conversion Rate and, if applicable, the number of Additional Shares under Section 4.07 hereof; and

(ix) the CUSIP, ISIN or other similar numbers, if any, assigned to such Notes.

(m) A Redemption Notice shall be given by the Company or, at the Company’s request, by the Trustee in the name and at the expense of the Company; provided that the Company shall have delivered to the Trustee, at least five (5) Business Days before the Redemption Notice is required to be mailed (or such shorter period agreed to by the Trustee), an Officer’s Certificate requesting that the Trustee give such notice and setting forth the complete form of such notice and the information to be stated in such notice.

(n) A Redemption Notice shall be irrevocable.

(o) A Redemption Notice, if mailed in the manner herein provided, shall be conclusively presumed to have been duly given, whether or not a Holder receives such notice. In any case, a failure to give such Redemption Notice by mail or any defect in the Redemption Notice to the Holder of any Notes shall not affect the validity of the proceedings for the redemption of any other Notes.

Section 10.04 Payment of Notes Called for Redemption .

(a) If any Redemption Notice has been given in respect of the Notes in accordance with Section 10.03 hereof, the Notes shall become due and payable on the Redemption Date at the place or places stated in the Redemption Notice and at the applicable Redemption Price. On presentation and surrender of the Notes at the place or places stated in the Redemption Notice, the Notes shall be paid and redeemed by the Company at the applicable Redemption Price. Any Notes redeemed by the Company shall be paid in cash.

(b) Prior to 10:00 a.m., New York City time, on the Redemption Date, the Company shall deposit with the Paying Agent or, if the Company is acting as the Paying Agent, shall segregate and hold in trust as provided in Section 5.03 hereof, an amount of cash (in immediately available funds if deposited on the Redemption Date) sufficient to pay the Redemption Price for all of the Notes to be redeemed on such Redemption Date. Subject to receipt of funds by the Paying Agent, payment for the Notes to be redeemed shall be made promptly after the later of:

(iii) the Redemption Date for such Notes; and

(iv) the time of presentation of such Notes to the Trustee (or other Paying Agent appointed by the Company) by the Holder thereof in the manner required by this Section 10.04.

The Paying Agent shall, promptly after such payment and upon written demand by the Company, return to the Company any funds in excess of the Redemption Price.

(c) Any cash amounts due upon redemption in respect of the Notes presented for redemption shall be paid by the Company to such Holder, or such Holder’s nominee or nominees.

Section 10.05 Redemption in Part .

(a) If less than all of the Outstanding Notes are to be redeemed, the Trustee will select the Notes to be redeemed in principal amounts of $1,000 or multiples of $1,000, by lot or by another method the Trustee considers reasonable, fair and appropriate in accordance with the Applicable Procedures. If a portion of the Notes is selected for redemption and the Holder of such Notes converts a portion of its Notes, the converted portion shall be deemed to be of the portion selected for redemption, to the extent that the converted portion does not exceed the portion selected for redemption. The Trustee shall not be liable for Notes selected for redemption by it pursuant to this Section 10.05(a).

(b) In the event of any redemption in part, the Company shall not be required to (i) issue, register the transfer of or exchange any Notes during a period beginning at the Open of Business 15 calendar days before the mailing of a Redemption Notice and ending at the Close of Business on the earliest date on which the relevant Redemption Notice is deemed to have been given to all Holders of Notes to be redeemed or (ii) register the transfer of or exchange any Notes so selected for redemption, in whole or in part, except the unredeemed portion of any Notes being redeemed in part.

Section 10.06 Restrictions on Redemption . The Company may not redeem the Notes on any date if the principal amount of the Notes has been accelerated in accordance with the terms of this Indenture, and such acceleration has not been rescinded on or prior to the Redemption Date (except in the case of an acceleration resulting from a Default by the Company in the payment of the applicable Redemption Price with respect to such Notes).

ARTICLE 11.
THE TRUSTEE

Section 11.01 Duties and Responsibilities of Trustee .

(l) The Trustee, prior to the occurrence of an Event of Default and after the curing of all Events of Default which may have occurred, undertakes to perform such duties and only such duties as are specifically set forth in this Indenture and no implied covenants or obligations shall be read into this Indenture against the Trustee. In case an Event of Default has occurred (which has not been cured or waived), the Trustee shall exercise such of the rights and powers vested in it by this Indenture, and use the same degree of care in their exercise, as a prudent person would use in the conduct of his or her own affairs.

(m) No provision of this Indenture shall be construed to relieve the Trustee from liability for its own negligent action, its own negligent failure to act or its own willful misconduct, except that:

(x) prior to the occurrence of an Event of Default and after the curing or waiving of all Events of Default which may have occurred:

(A) the duties and obligations of the Trustee shall be determined solely by the express provisions of this Indenture and applicable law, and the Trustee shall not be liable except for the performance of such duties and obligations as are specifically set forth in this Indenture and no implied covenants or obligations shall be read into this Indenture against the Trustee; and

(B) in the absence of bad faith on the part of the Trustee, the Trustee may conclusively rely as to the truth of the statements and the correctness of the opinions expressed therein, upon any certificates or opinions furnished to the Trustee and conforming to the requirements of this Indenture; but, in the case of any such certificates or opinions which by any provisions hereof are specifically required to be furnished to the Trustee, the Trustee shall be under a duty to examine the same to determine whether or not they conform to the requirements of this Indenture (but need not confirm or investigate the accuracy of any mathematical calculations or other facts stated therein);

(xi) the Trustee shall not be liable for any error of judgment made in good faith by a Responsible Officer or Officers of the Trustee, unless the Trustee was negligent in ascertaining the pertinent facts;

(xii) the Trustee shall not be liable with respect to any action taken or omitted to be taken by it in good faith in accordance with the written direction of the Holders of not less than a majority in principal amount of the Notes at the time Outstanding determined as provided in Section 1.03 relating to the time, method and place of conducting any proceeding for any remedy available to the Trustee, or exercising any trust or power conferred upon the Trustee, under this Indenture;

(xiii) whether or not therein provided, every provision of this Indenture relating to the conduct or affecting the liability of, or affording protection to, the Trustee shall be subject to the provisions of this Section;

(xiv) the Trustee shall not be liable in respect of any payment (as to the correctness of amount, entitlement to receive or any other matters relating to payment) or notice effected by the Company or any Paying Agent or any records maintained by any co-Registrar with respect to the Notes; and

(xv) if any party fails to deliver a notice relating to an event the fact of which, pursuant to this Indenture, requires notice to be sent to the Trustee, the Trustee may conclusively rely on its failure to receive such notice as reason to act as if no such event occurred.

None of the provisions contained in this Indenture shall require the Trustee to expend or risk its own funds or otherwise incur any financial liability in the performance of any of its duties or in the exercise of any of its rights or powers, if there is reasonable ground for believing that the repayment of such funds or adequate indemnity against such risk or liability is not reasonably assured to it.

Section 11.02 Notice of Defaults . The Trustee shall give the Holders notice of any Default of which a Responsible Officer of the Trustee has knowledge or is deemed to have notice under Section 11.03(a) within 90 days after the occurrence thereof so long as such Default is continuing; provided that (except in the case of any Default in the payment of principal amount of, or interest on, any of the Notes or Fundamental Change Purchase Price, Specified Date Purchase Price or Redemption Price or a default in the delivery of the consideration due upon conversion), the Trustee shall be protected in withholding such notice if and so long as it in good faith determines that the withholding of such notice is in the interest of the Holders of Notes.

Section 11.03 Reliance on Documents, Opinions, Etc. Except as otherwise provided in Section 11.01:

(d) the Trustee may conclusively rely and shall be protected in acting upon any resolution, certificate, statement, instrument, opinion, report, notice, request, consent, order, bond, debenture, note, coupon or other paper or document (whether in its original or facsimile form) believed by it in good faith to be genuine and to have been signed or presented by the proper party or parties;

(e) any request, direction, order or demand of the Company mentioned herein shall be sufficiently evidenced by an Officer’s Certificate (unless other evidence in respect thereof be herein specifically prescribed); and any resolution of the Board of Directors may be evidenced to the Trustee by a Board Resolution;

(f) the Trustee may consult with counsel of its own selection and any advice or Opinion of Counsel shall be full and complete authorization and protection in respect of any action taken or omitted by it hereunder in good faith and in accordance with such advice or Opinion of Counsel;

(g) the Trustee shall be under no obligation to exercise any of the rights or powers vested in it by this Indenture at the request, order or direction of any of the Holders pursuant to the provisions of this Indenture (including upon the occurrence and during the continuance of an Event of Default), unless such Holders shall have offered to the Trustee security or indemnity reasonably satisfactory to it against any loss, expenses and liabilities which may be incurred therein or thereby;

(h) the Trustee shall not be bound to make any investigation into the facts or matters stated in any resolution, certificate, statement, instrument, opinion, report, notice, request, direction, consent, order, bond, debenture or other paper or document, but the Trustee, in its discretion, may make such further inquiry or investigation into such facts or matters as it may see fit, and, if the Trustee shall determine to make such further inquiry or investigation, it shall be entitled to examine the books, records and premises of the Company, personally or by agent or attorney (at the reasonable expense of the Company and shall incur no liability of any kind by reason of such inquiry or investigation);

(i) the Trustee may execute any of the trusts or powers hereunder or perform any duties hereunder either directly or by or through agents or attorneys and the Trustee shall not be responsible for any misconduct or negligence on the part of any agent or attorney appointed by it with due care hereunder;

(j) the Trustee shall not be liable for any action taken, suffered, or omitted to be taken by it in good faith and reasonably believed by it to be authorized or within the discretion or rights or powers conferred upon it by this Indenture;

(k) in no event shall the Trustee be responsible or liable for special, indirect, consequential or punitive loss or damage of any kind whatsoever (including, but not limited to, loss of profit) irrespective of whether the Trustee has been advised of the likelihood of such loss or damage and regardless of the form of action;

(l) the Trustee shall not be deemed to have notice of any Default or Event of Default unless a Responsible Officer of the Trustee has actual knowledge thereof or unless written notice of any event which is in fact such a default is received by the Trustee at the Corporate Trust Office of the Trustee, and such notice references the Notes and the Indenture;

(m) the rights, privileges, protections, immunities and benefits given to the Trustee, including, without limitation, its right to be indemnified, are extended to, and shall be enforceable by, the Trustee in each of its capacities hereunder, and each agent, custodian and other Person employed to act hereunder;

(n) the Trustee shall not be required to give any bond or surety in respect of the performance of its powers and duties hereunder; and

(o) the Trustee may request that the Company deliver a certificate setting forth the names of individuals and/or titles of officers authorized at such time to take specified actions pursuant to this Indenture.

Section 11.04 No Responsibility for Recitals, Etc. The recitals contained herein and in the Notes (except in the Trustee’s certificate of authentication) shall be taken as the statements of the Company, and the Trustee assumes no responsibility for the correctness of the same. The Trustee makes no representations as to the validity or sufficiency of this Indenture or of the Notes. The Trustee shall not be accountable for the use or application by the Company of any Notes or the proceeds of any Notes authenticated and delivered by the Trustee in conformity with the provisions of this Indenture.

Section 11.05 Trustee, Paying Agents, Exchange Agents or Registrar May Own Notes . The Trustee, any Paying Agent, any Conversion Agent or Registrar, in its individual or any other capacity, may become the owner or pledgee of Notes with the same rights it would have if it were not Trustee, Paying Agent, Conversion Agent or Registrar.

Section 11.06 Monies to be Held in Trust . Subject to the provisions of Section 7.06, all monies and properties received by the Trustee shall, until used or applied as herein provided, be held in trust for the purposes for which they were received. Money held by the Trustee in trust hereunder need not be segregated from other funds except to the extent required by law. The Trustee shall be under no liability for interest on any money received by it hereunder except as may be agreed in writing from time to time by the Company and the Trustee.

Section 11.07 Compensation and Expenses of Trustee . The Company covenants and agrees to pay to the Trustee from time to time, and the Trustee shall be entitled to, such compensation for all services rendered by it hereunder in any capacity (which shall not be limited by any provision of law in regard to the compensation of a trustee of an express trust) as mutually agreed to from time to time in writing between the Company and the Trustee, and the Company will pay or reimburse the Trustee upon its request for all reasonable expenses, disbursements and advances reasonably incurred or made by the Trustee in accordance with any of the provisions of this Indenture (including the reasonable compensation and the expenses and disbursements of its counsel and of all Persons not regularly in its employ) except any such expense, disbursement or advance as may arise from its negligence or willful misconduct.

The Company also covenants to indemnify the Trustee (or any officer, director or employee of the Trustee), in any capacity under this Indenture and its agents and any authenticating agent for, and to hold them harmless against, any and all loss, liability, claim or expense incurred without negligence or willful misconduct on the part of the Trustee or such officers, directors, employees and agent or authenticating agent, as the case may be, and arising out of or in connection with the acceptance or administration of this trust or in any other capacity hereunder, including the costs and expenses of defending themselves against any claim (whether asserted by the Company, a Holder or any other Person) of liability in the premises. The Trustee shall notify the Company promptly of any claim for which it may seek indemnity. Failure by the Trustee to so notify the Company shall not relieve the Company of its obligations hereunder. The Company shall defend the claim and the Trustee shall cooperate in the defense. The Trustee may have one firm of separate counsel except in the event local counsel shall be required and the Company shall pay the reasonable fees and expenses of such counsel and local counsel, as applicable. The Company need not pay for any settlement made without its consent.

The obligations of the Company under this Section 11.07 to compensate or indemnify the Trustee and to pay or reimburse the Trustee for expenses, disbursements and advances shall be secured by a lien prior to that of the Notes upon all property and funds held or collected by the Trustee as such, except funds held in trust for the benefit of the Holders of particular Notes. The obligation of the Company under this Section shall survive the satisfaction and discharge of this Indenture.

When the Trustee and its agents and any authenticating agent incur expenses or render services after an Event of Default specified in Section 6.01(h) and 6.01(i) with respect to the Company occurs, the expenses and the compensation for the services are intended to constitute expenses of administration under any bankruptcy, insolvency or similar laws.

Section 11.08 Officer’s Certificate as Evidence . Except as otherwise provided in Section 11.01, whenever in the administration of the provisions of this Indenture the Trustee shall deem it necessary or desirable that a matter be proved or established prior to taking or omitting any action hereunder, such matter (unless other evidence in respect thereof be herein specifically prescribed) may, in the absence of negligence or willful misconduct on the part of the Trustee, be deemed to be conclusively proved and established by an Officer’s Certificate delivered to the Trustee.

Section 11.09 Conflicting Interests of Trustee . If the Trustee has or shall acquire a conflicting interest within the meaning of the Trust Indenture Act, the Trustee shall either eliminate such interest or resign, to the extent and in the manner provided by, and subject to the provisions of, this Indenture.

Section 11.10 Eligibility of Trustee . There shall at all times be a Trustee hereunder which shall be a Person that is eligible pursuant to the Trust Indenture Act to act as such and has a combined capital and surplus of at least $50,000,000 (or if such Person is a member of a bank holding company system, its bank holding company shall have a combined capital and surplus of at least $50,000,000). If such Person publishes reports of condition at least annually, pursuant to law or to the requirements of any supervising or examining authority, then for the purposes of this Section the combined capital and surplus of such Person shall be deemed to be its combined capital and surplus as set forth in its most recent report of condition so published. If at any time the Trustee shall cease to be eligible in accordance with the provisions of this Section 11.10, it shall resign immediately in the manner and with the effect hereinafter specified in this Article.

Section 11.11 Resignation or Removal of Trustee .

(a) The Trustee may at any time resign by giving written notice of such resignation to the Company and to the Holders of Notes. Upon receiving such notice of resignation, the Company shall promptly appoint a successor trustee by written instrument, in duplicate, executed by an Authorized Officer, one copy of which instrument shall be delivered to the resigning Trustee and one copy to the successor trustee. If no successor trustee shall have been so appointed and have accepted appointment thirty (30) days after the mailing of such notice of resignation to the Holders, the resigning Trustee may, upon ten (10) Business Days’ notice to the Company and the Holders, appoint a successor identified in such notice or may petition, at the expense of the Company, any court of competent jurisdiction for the appointment of a successor trustee, or, if any Holder who has been a bona fide Holder of a Note or Notes for at least six (6) months may, subject to the provisions of Section 6.15, on behalf of himself and all others similarly situated, petition any such court for the appointment of a successor trustee. Such court may thereupon, after such notice, if any, as it may deem proper and prescribe, appoint a successor trustee.

(b) In case at any time any of the following shall occur:

(i) the Trustee shall fail to comply with Section 11.09 after written request therefor by the Company or by any Holder who has been a bona fide Holder of a Note or Notes for at least six (6) months; or

(ii) the Trustee shall cease to be eligible in accordance with the provisions of Section 11.10 and shall fail to resign after written request therefor by the Company or by any such Holder; or

(iii) the Trustee shall become incapable of acting, or shall be adjudged a bankrupt or insolvent, or a receiver of the Trustee or of its property shall be appointed, or any public officer shall take charge or control of the Trustee or of its property or affairs for the purpose of rehabilitation, conservation or liquidation;

then, in any such case, the Company may remove the Trustee and appoint a successor trustee by written instrument, in duplicate, executed by an Authorized Officer, one copy of which instrument shall be delivered to the Trustee so removed and one copy to the successor trustee, or, subject to the provisions of Section 6.15, any Holder who has been a bona fide Holder of a Note or Notes for at least six (6) months may, on behalf of himself and all others similarly situated, petition any court of competent jurisdiction for the removal of the Trustee and the appointment of a successor trustee; provided , however , that, if no successor Trustee shall have been appointed and have accepted appointment thirty (30) days after either the Company or the Holders has removed the Trustee, the Trustee so removed may petition, at the Company’s expense, any court of competent jurisdiction for an appointment of a successor trustee. Such court may thereupon, after such notice, if any, as it may deem proper and prescribe, remove the Trustee and appoint a successor trustee.

(c) The Holders of a majority in aggregate principal amount of the Notes at the time Outstanding may at any time remove the Trustee and nominate a successor trustee which shall be deemed appointed as successor trustee unless, within ten (10) days after notice to the Company of such nomination, the Company objects thereto, in which case the Trustee so removed or any Holder, or if such Trustee so removed or any Holder fails to act, the Company, upon the terms and conditions and otherwise as in Section 11.11(a) provided, may petition any court of competent jurisdiction for an appointment of a successor trustee.

(d) Any resignation or removal of the Trustee and appointment of a successor trustee pursuant to any of the provisions of this Section 11.11 shall become effective upon acceptance of appointment by the successor trustee as provided in Section 11.12.

Section 11.12 Acceptance by Successor Trustee . Any successor trustee appointed as provided in Section 11.11 shall execute, acknowledge and deliver to the Company and to its predecessor trustee an instrument accepting such appointment hereunder, and thereupon the resignation or removal of the predecessor trustee shall become effective and such successor trustee, without any further act, deed or conveyance, shall become vested with all the rights, powers, duties and obligations of its predecessor hereunder, with like effect as if originally named as trustee herein; but, nevertheless, on the written request of the Company or of the successor trustee, the trustee ceasing to act shall, upon payment of any amount then due it pursuant to the provisions of Section 11.07, execute and deliver an instrument transferring to such successor trustee all the rights and powers of the trustee so ceasing to act. Upon request of any such successor trustee, the Company shall execute any and all instruments in writing for more fully and certainly vesting in and confirming to such successor trustee all such rights and powers. Any trustee ceasing to act shall, nevertheless, retain a lien upon all property and funds held or collected by such trustee as such, except for funds held in trust for the benefit of Holders of particular Notes, to secure any amounts then due it pursuant to the provisions of Section 11.07.

No successor trustee shall accept appointment as provided in this Section 11.12 unless, at the time of such acceptance, such successor trustee shall be qualified under the provisions of Section 11.09 and be eligible under the provisions of Section 11.10.

Upon acceptance of appointment by a successor trustee as provided in this Section 11.12, the Company (or the former trustee, at the written direction of the Company) shall mail or cause to be mailed notice of the succession of such trustee hereunder to the Holders of Notes at their addresses as they shall appear on the Register. If the Company fails to mail such notice within ten (10) days after acceptance of appointment by the successor trustee, the successor trustee shall cause such notice to be mailed at the expense of the Company.

Section 11.13 Succession by Merger, Etc. Any corporation into which the Trustee may be merged or exchanged or with which it may be consolidated, or any corporation resulting from any merger, exchange or consolidation to which the Trustee shall be a party, or any corporation succeeding to all or substantially all of the corporate trust business of the Trustee (including any trust created by this Indenture), shall be the successor to the Trustee hereunder without the execution or filing of any paper or any further act on the part of any of the parties hereto; provided that, in the case of any corporation succeeding to all or substantially all of the corporate trust business of the Trustee, such corporation shall be qualified under the provisions of Section 11.09 and eligible under the provisions of Section 11.10.

In case at the time such successor to the Trustee shall succeed to the trusts created by this Indenture, any of the Notes shall have been authenticated but not delivered, any such successor to the Trustee may adopt the certificate of authentication of any predecessor trustee or authenticating agent appointed by such predecessor trustee, and deliver such Notes so authenticated; and in case at that time any of the Notes shall not have been authenticated, any successor to the Trustee or any authenticating agent appointed by such successor trustee may authenticate such Notes in the name of the successor trustee; and in all such cases such certificates shall have the full force that is provided in the Notes or in this Indenture; provided , however , that the right to adopt the certificate of authentication of any predecessor Trustee or authenticate Notes in the name of any predecessor Trustee shall apply only to its successor or successors by merger, exchange or consolidation.

Section 11.14 Preferential Collection of Claims . If and when the Trustee shall be or become a creditor of the Company (or any other obligor upon the Notes), the Trustee shall be subject to the provisions of the Trust Indenture Act regarding the collection of the claims against the Company (or any such other obligor).

Section 11.15 Trustee’s Application for Instructions from the Company . Any application by the Trustee for written instructions from the Company (other than with regard to any action proposed to be taken or omitted to be taken by the Trustee that affects the rights of the Holders of the Notes under this Indenture) may, at the option of the Trustee, set forth in writing any action proposed to be taken or omitted by the Trustee under this Indenture and the date on and/or after which such action shall be taken or such omission shall be effective. The Trustee shall not be liable for any action taken by, or omission of, the Trustee in accordance with a proposal included in such application on or after the date specified in such application (which date shall not be less than three (3) Business Days after the date any officer of the Company actually receives such application, unless any such officer shall have consented in writing to any earlier date) unless prior to taking any such action (or the effective date in the case of an omission), the Trustee shall have received written instructions in response to such application specifying the action to be taken or omitted.

ARTICLE 12.
MISCELLANEOUS

Section 12.01 Effect on Successors and Assigns . All agreements of the Company, the Trustee, the Registrar, the Paying Agent, the Bid Solicitation Agent and the Conversion Agent in this Indenture and the Notes will bind their respective successors.

Section 12.02 Governing Law . This Indenture and the Notes, and any claim, controversy or dispute arising under or related to this Indenture or the Notes, will be governed by, and construed in accordance with, the laws of the State of New York, without giving effect to conflicts of laws principles thereof.

Section 12.03 No Note Interest Created . Nothing in this Indenture or in the Notes, expressed or implied, shall be construed to constitute a security interest under the Uniform Commercial Code or similar legislation, as now or hereafter enacted and in effect, in any jurisdiction.

Section 12.04 Trust Indenture Act . If any provision hereof limits, qualifies or conflicts with a provision of the Trust Indenture Act that is required under such Act to be a part of and govern this Indenture, the latter provision shall control. If any provision of this Indenture modifies or excludes any provision of the Trust Indenture Act that may be so modified or excluded, the latter provision shall be deemed to apply to this Indenture as so modified or to be excluded, as the case may be.

Section 12.05 Benefits of Indenture . Nothing in this Indenture or in the Notes, expressed or implied, will give to any Person, other than the parties hereto, any Paying Agent, any Conversion Agent, any authenticating agent, any Registrar or their successors hereunder or the Holders of the Notes, any benefit or any legal or equitable right, remedy or claim under this Indenture.

Section 12.06 Calculations . Except as otherwise provided in this Indenture, the Company shall be responsible for making all calculations called for under the Indenture and the Notes. These calculations include, but are not limited to, determinations of the Last Reported Sale Prices and Daily VWAPs of the Common Stock, accrued interest payable on the Notes and the Conversion Rate. The Company shall make all these calculations in good faith and, absent manifest error, its calculations will be final and binding on Holders. The Company shall provide a schedule of its calculations to each of the Trustee and the Conversion Agent, and each of the Trustee and the Conversion Agent is entitled to rely conclusively upon the accuracy of the Company’s calculations without independent verification. The trustee shall forward the Company’s calculations to any Holders upon the written request of that Holder.

Whenever the Company is required to calculate or make adjustments to the Conversion Rate, the Company will do so to the 1/10,000th of a share of Common Stock, rounding any additional decimal places up or down in a commercially reasonable manner.

Section 12.07 Execution in Counterparts . This Indenture may be executed in any number of counterparts, each of which shall be an original, but such counterparts shall together constitute but one and the same instrument. The exchange of copies of this Indenture and of signature pages by facsimile or PDF transmission shall constitute effective execution and delivery of this Indenture as to the parties hereto and may be used in lieu of the original Indenture for all purposes. Signatures of the parties hereto transmitted by facsimile or PDF shall be deemed to be their original signatures for all purposes.

Section 12.08 Notices, Etc. to Trustee and Company . Except as otherwise provided herein, any request, demand, authorization, direction, notice, consent, election, waiver or Act of Holders or other document provided or permitted by this Indenture to be made upon, given or furnished to, or filed with,

(a) the Trustee by any Holder or by the Company shall be sufficient for every purpose hereunder if made, given, furnished or filed in writing (including facsimile or electronically in PDF format) to or with the Trustee at its Corporate Trust Office;

(b) the Company by the Trustee or by any Holder shall be sufficient for every purpose hereunder (unless otherwise herein expressly provided) if in writing and mailed, first-class postage prepaid (and, in the case of securities held in book-entry form, by electronic transmission), to the Company addressed to it at the address of its principal office at 2200 Eller Drive, P.O. Box 13038, Fort Lauderdale, Florida 33316 or at any other address furnished in writing to the Trustee by the Company prior to such mailing or electronically in PDF format;

(c) the Company or the Trustee, by notice given to the other in the manner provided in this Section 12.08, may designate additional or different addresses for subsequent notices or communications; and

(d) whenever the Company is required to deliver notice to the Holders, the Company will, by the date it is required to deliver such notice to the Holders, deliver a copy of such notice to the Trustee, the Paying Agent, the Registrar and the Conversion Agent. Each notice to the Trustee, the Paying Agent, the Registrar and the Conversion Agent shall be sufficiently given if in writing and mailed, first-class postage prepaid to the address most recently sent by the Trustee, the Paying Agent, the Registrar or the Conversion Agent, as the case may be, to the Company.

Section 12.09 No Recourse Against Others . No director, officer, employee, incorporator or stockholder of the Company shall have any liability for any obligations of the Company under the Notes, the Indenture or any claim based on, in respect of, or by reason of, such obligations or their creation. Each Holder, by accepting a Note, waives and releases all such liability. The waiver and release are part of the consideration for issuance of the Notes.

Section 12.10 Tax Withholding . Nothing herein shall preclude any tax withholding required by law or regulation. In addition, if the Company or other applicable withholding agent pays withholding taxes on behalf of a Holder or beneficial owner of a Note as a result of an adjustment to the Conversion Rate, the Company or other applicable withholding agent may, at its option, set off such payments against payments of cash and shares of Common Stock on the Note.

Section 12.11 Waiver of Jury Trial . EACH OF THE COMPANY AND THE TRUSTEE HEREBY IRREVOCABLY WAIVES, TO THE FULLEST EXTENT PERMITTED BY APPLICABLE LAW, ANY AND ALL RIGHT TO TRIAL BY JURY IN ANY LEGAL PROCEEDING ARISING OUT OF OR RELATING TO THIS INDENTURE, THE NOTES OR THE TRANSACTION CONTEMPLATED HEREBY.

Section 12.12 U.S.A. Patriot Act . The parties hereto acknowledge that in accordance with Section 326 of the U.S.A. Patriot Act, the Trustee, like all financial institutions and in order to help fight the funding of terrorism and money laundering, is required to obtain, verify, and record information that identifies each person or legal entity that establishes a relationship or opens an account with the Trustee. The parties to this Indenture agree that they will provide the Trustee with such information as it may request in order for the Trustee to satisfy the requirements of the U.S.A. Patriot Act.

Section 12.13 Force Majeure . In no event shall the Trustee be responsible or liable for any failure or delay in the performance of its obligations hereunder arising out of or caused by, directly or indirectly, forces beyond its control, including, without limitation, strikes, work stoppages, accidents, acts of war or terrorism, civil or military disturbances, nuclear or natural catastrophes or acts of God, and interruptions, loss or malfunctions of utilities, communications or computer (software and hardware) services; it being understood that the Trustee shall use reasonable efforts which are consistent with accepted practices in the banking industry to resume performance as soon as practicable under the circumstances.

IN WITNESS WHEREOF , the parties hereto have caused this Indenture to be duly executed as of the day and year first above written.

SEACOR Holdings Inc.

By:

Name:

Title:

WELLS FARGO BANK, NATIONAL ASSOCIATION, as Trustee

By:

Name:

Title:

SCHEDULE A

The following table sets forth the number of Additional Shares by which the Conversion Rate shall be increased pursuant to Section 4.07 based on the Stock Price and the Effective Date set forth below.



Effective Date	Stock Price
	$91.64	$92.50	$95.00	$100.00	$105.00	$115.00	$126.00	$150.00	$175.00	$200.00	$225.00	$250.00	$300.00	$375.00
November 13, 2013	2.9760	2.9760	2.8587	2.5503	2.2825	1.8453	1.4790	0.9566	0.6483	0.4678	0.3545	0.2752	0.1695	0.0842
November 15, 2014	2.9760	2.8746	2.6472	2.3409	2.0763	1.6479	1.2950	0.8055	0.5311	0.3799	0.2883	0.2236	0.1378	0.0687
November 15, 2015	2.9760	2.8746	2.5901	2.1220	1.8586	1.4376	1.0974	0.6435	0.4076	0.2875	0.2190	0.1697	0.1048	0.0523
November 15, 2016	2.9760	2.8746	2.5901	2.0638	1.6369	1.2147	0.8837	0.4683	0.2766	0.1937	0.1478	0.1145	0.0711	0.0353
November 15, 2017	2.9760	2.8746	2.5901	2.0638	1.5876	0.9602	0.6286	0.2618	0.1350	0.0969	0.0731	0.0564	0.0350	0.0164
November 19, 2018	2.9760	2.8746	2.5901	2.0638	1.5876	0.7595	0.0729	0.0000	0.0000	0.0000	0.0000	0.0000	0.0000	0.0000

EXHIBIT A

[FORM OF FACE OF SECURITY]

NO AFFILIATE (AS DEFINED IN RULE 144 UNDER THE SECURITIES ACT) OF THE COMPANY OR PERSON THAT HAS BEEN AN AFFILIATE (AS DEFINED IN RULE 144 UNDER THE SECURITIES ACT) OF THE COMPANY DURING THE IMMEDIATELY PRECEDING THREE MONTHS MAY PURCHASE, OTHERWISE ACQUIRE OR HOLD THIS SECURITY OR A BENEFICIAL INTEREST HEREIN.

THIS NOTE HAS BEEN ISSUED WITH ‘‘ORIGINAL ISSUE DISCOUNT’’ (WITHIN THE MEANING OF SECTION 1273 OF THE INTERNAL REVENUE CODE OF 1986, AS AMENDED). A HOLDER MAY OBTAIN THE ISSUE PRICE, AMOUNT OF ORIGINAL ISSUE DISCOUNT, ISSUE DATE, COMPARABLE YIELD AND PROJECTED PAYMENT SCHEDULE FOR SUCH NOTE BY SUBMITTING A WRITTEN REQUEST FOR SUCH INFORMATION TO: SEACOR HOLDINGS INC. ATTN: CHIEF FINANCIAL OFFICER, 2200 ELLER DRIVE, P.O. BOX 13038, FORT LAUDERDALE, FLORIDA 33316.

[For Global Notes, include the following legend (the “ Global Notes Legend ”):]

[THIS SECURITY IS A GLOBAL NOTE WITHIN THE MEANING OF THE INDENTURE HEREINAFTER REFERRED TO AND IS REGISTERED IN THE NAME OF A DEPOSITARY OR A NOMINEE THEREOF. THIS SECURITY MAY NOT BE EXCHANGED IN WHOLE OR IN PART FOR A SECURITY REGISTERED, AND NO TRANSFER OF THIS SECURITY IN WHOLE OR IN PART MAY BE REGISTERED, IN THE NAME OF ANY PERSON OTHER THAN SUCH DEPOSITARY OR A NOMINEE THEREOF, EXCEPT IN THE LIMITED CIRCUMSTANCES DESCRIBED IN THE INDENTURE.]

[For all Notes that are Restricted Notes, include the following legend (the “ Restricted Notes Legend ”):]

THIS SECURITY AND THE COMMON STOCK, IF ANY, ISSUABLE UPON CONVERSION OF THIS SECURITY HAVE NOT BEEN REGISTERED UNDER THE SECURITIES ACT OF 1933, AS AMENDED (THE “SECURITIES ACT”), AND ACCORDINGLY, PRIOR TO THE RESALE RESTRICTION TERMINATION DATE (AS DEFINED BELOW), MAY NOT BE OFFERED, SOLD, PLEDGED OR OTHERWISE TRANSFERRED EXCEPT IN ACCORDANCE WITH THE FOLLOWING SENTENCE. BY ITS ACQUISITION HEREOF OR OF A BENEFICIAL INTEREST HEREIN, THE ACQUIRER:

(1) REPRESENTS THAT IT AND ANY ACCOUNT FOR WHICH IT IS ACTING IS A “QUALIFIED INSTITUTIONAL BUYER” (WITHIN THE MEANING OF RULE 144A UNDER THE SECURITIES ACT) AND THAT IT EXERCISES SOLE INVESTMENT DISCRETION WITH RESPECT TO EACH SUCH ACCOUNT, AND

(2) AGREES FOR THE BENEFIT OF THE COMPANY THAT IT WILL NOT OFFER, SELL, PLEDGE OR OTHERWISE TRANSFER THIS SECURITY OR ANY BENEFICIAL INTEREST HEREIN PRIOR TO THE RESALE RESTRICTION TERMINATION DATE (AS DEFINED BELOW), EXCEPT:

(A) TO SEACOR HOLDINGS INC. (THE “COMPANY”) OR ANY SUBSIDIARY THEREOF, OR

(B) PURSUANT TO A REGISTRATION STATEMENT WHICH HAS BECOME EFFECTIVE UNDER THE SECURITIES ACT, OR

(D) PURSUANT TO AN EXEMPTION FROM REGISTRATION PROVIDED BY RULE 144 UNDER THE SECURITIES ACT OR ANY OTHER AVAILABLE EXEMPTION FROM THE REGISTRATION REQUIREMENTS OF THE SECURITIES ACT.

THE “RESALE RESTRICTION TERMINATION DATE” MEANS THE DATE: (A) THAT IS AT LEAST ONE YEAR AFTER THE LAST ORIGINAL ISSUANCE DATE OF THE NOTES; AND (B) ON WHICH THE COMPANY HAS INSTRUCTED THE TRUSTEE THAT THIS LEGEND WILL NO LONGER APPLY IN ACCORDANCE WITH THE PROCEDURES DESCRIBED IN THE INDENTURE.

PRIOR TO THE REGISTRATION OF ANY TRANSFER IN ACCORDANCE WITH (2)(D) ABOVE, THE COMPANY AND THE TRUSTEE RESERVE THE RIGHT TO REQUIRE THE DELIVERY OF SUCH LEGAL OPINIONS, CERTIFICATIONS OR OTHER EVIDENCE AS MAY REASONABLY BE REQUIRED IN ORDER TO DETERMINE THAT THE PROPOSED TRANSFER IS BEING MADE IN COMPLIANCE WITH THE SECURITIES ACT AND APPLICABLE STATE SECURITIES LAWS. NO REPRESENTATION IS MADE AS TO THE AVAILABILITY OF ANY EXEMPTION FROM THE REGISTRATION REQUIREMENTS OF THE SECURITIES ACT. ]

SEACOR Holdings Inc.
3.00% Convertible Senior Securities due 2028

No.: [ ]


CUSIP:	[81170Y AA7] [; provided that, at such time as the Company provides the Free Transferability Certificate to the Trustee and the Registrar, this CUSIP number will be deemed removed and replaced with the CUSIP number [81170Y AB5].]


ISIN:	[US81170YAA73] [; provided that, at such time as the Company provides the Free Transferability Certificate to the Trustee and the Registrar, this ISIN number will be deemed removed and replaced with the ISIN number [US81170YAB56].]

Principal


Amount $	[ ] [ For Global Notes, include the following : as revised by the Schedule of Increases and Decreases in the Global Note attached hereto]

SEACOR Holdings Inc., a Delaware corporation (the “ Company ”), promises to pay to [ ] [ include “Cede & Co.” for Global Security ] or registered assigns, the principal amount of [ add principal amount in words ] $[ ] on November 15, 2028 (the “ Maturity Date ”).

Interest Payment Dates: May 15 and November 15.

Regular Record Dates: May 1 and November 1.

Additional provisions of this Security are set forth on the other side of this Security.

IN WITNESS WHEREOF, SEACOR Holdings Inc. has caused this instrument to be signed manually or by facsimile by one of its duly authorized Officers.

SEACOR Holdings Inc.

By:

Name:

Title:

This is one of the Notes of the series designated herein, referred to in the within-mentioned Indenture.

Dated:

WELLS FARGO BANK, NATIONAL ASSOCIATION, as Trustee

By:

Authorized Signatory

[FORM OF REVERSE OF NOTE]

SEACOR Holdings Inc.
3.00% Convertible Senior Notes due 2028

This Note is one of a duly authorized issue of securities of the Company (herein called the “ Notes ”), issued under the Indenture dated as of November 13, 2013 by and between the Company and Wells Fargo Bank, National Association, herein called the “ Trustee ,” and reference is hereby made to the Indenture for a statement of the respective rights, limitations of rights, duties and immunities thereunder of the Company, the Trustee and the Holders of the Notes and of the terms upon which the Notes are, and are to be, authenticated and delivered.

This Note does not benefit from a sinking fund. This Note shall be redeemable at the Company’s option in accordance with Article 10 of the Indenture. This Note is not subject to redemption at the option of the Company prior to November 19, 2018. On or after November 19, 2018, the Company may redeem for cash any or all of the Notes, except for the Notes that the Company is required to repurchase at the option of the Holders at the Redemption Price specified in Section 10.02 of the Indenture.

As provided in and subject to the provisions of the Indenture, upon the occurrence of a Fundamental Change or a Specified Purchase Date, the Holder of this Note will have the right, at such Holder’s option, to require the Company to purchase this Note, or any portion of this Note such that the principal amount of this Note that is not purchased equals $1,000 or an integral multiple of $1,000 in excess thereof, on the Fundamental Change Purchase Date or on the Specified Purchase Date, as applicable at a price equal to the Fundamental Change Purchase Price for such Fundamental Change Purchase Date or the Specified Date Purchase Price for such Specified Purchase Date, as applicable.

As provided in and subject to the provisions of the Indenture, the Holder hereof has the right, at its option (i) during certain periods and upon the occurrence of certain conditions specified in the Indenture, prior to the Close of Business on the Business Day immediately preceding August 15, 2028, and (ii) on or after August 15, 2028, at any time prior to the Close of Business on the second Scheduled Trading Day immediately preceding the Maturity Date, to convert this Note or a portion of this Note such that the principal amount of this Note that is not converted equals $1,000 or an integral multiple of $1,000 in excess thereof, into an amount of cash, a number of shares of Common Stock, or a combination of cash and shares of Common Stock, if any, as the case may be, determined in accordance with Article 4 of the Indenture.

As provided in and subject to the provisions of the Indenture, the Company will make all payments in respect of the Fundamental Change Purchase Price for, the Specified Date Purchase Price for, the Redemption Price for, and the principal amount of, this Note to the Holder that surrenders this Note to the Paying Agent to collect such payments in respect of this Note. The Company will pay cash amounts in money of the United States that at the time of payment is legal tender for payment of public and private debts.

The Indenture permits, with certain exceptions as therein provided, the amendment thereof and the modification of the rights and obligations of the Company and the rights of the Holders of the Notes to be effected under the Indenture at any time by the Company and the Trustee with the consent of the Holders of a majority in principal amount of the Notes at the time Outstanding. The Indenture also contains provisions permitting the Holders of specified percentages in principal amount of the Notes at the time Outstanding, on behalf of the Holders of all Notes, to waive compliance by the Company with certain provisions of the Indenture and certain past Defaults under the Indenture and their consequences. Any such consent or waiver by the Holder of this Note shall be conclusive and binding upon such Holder and upon all future Holders of this Note and of any Note issued upon the registration of transfer hereof or in exchange herefor or in lieu hereof, whether or not notation of such consent or waiver is made upon this Note.

As provided in and subject to the provisions of the Indenture, the Holder of this Note shall not have the right to institute any proceeding with respect to the Indenture, or for the appointment of a receiver or trustee, or for any other remedy thereunder, unless such Holder shall have previously given the Trustee written notice of a continuing Event of Default with respect to the Note, the Holders of not less than 25% in principal amount of the Notes at the time Outstanding shall have made written request to the Trustee to institute proceedings in respect of such Event of Default as Trustee and offered the Trustee indemnity or security satisfactory thereto, and the Trustee shall have failed to institute any such proceeding, for 60 days after receipt of such notice, request and offer of indemnity or security, and shall not have received from the Holders of a majority in principal amount of Notes at the time Outstanding a direction inconsistent with such request. The foregoing shall not apply to any suit instituted by the Holder of this Note for the enforcement of any payment of the principal hereof, premium, if any, or interest hereon, the Fundamental Change Purchase Price, the Specified Date Purchase Price or the Redemption Price with respect to, and the amount of cash, the number of shares of Common Stock or the combination thereof, as the case may be, due upon conversion of this Note or after the respective due dates expressed in the Indenture.

No reference herein to the Indenture and no provision of this Note or of the Indenture shall alter or impair the obligation of the Company, which is absolute and unconditional, to pay or deliver, as the case may be, the principal of (including the Fundamental Change Purchase Price, the Specified Date Purchase Price, and the Redemption Price), premium, interest on and the amount of cash, a number of shares of Common Stock or a combination of cash and shares of Common Stock, if any, as the case may be, due upon conversion of, this Note at the time, place and rate, and in the coin and currency, herein prescribed.

As provided in the Indenture and subject to certain limitations therein set forth, the transfer of this Note is registrable in the Register, upon surrender of this Note for registration of transfer to the Trustee, duly endorsed by, or accompanied by a written instrument of transfer in form satisfactory to the Company and the Registrar duly executed by, the Holder hereof or its attorney duly authorized in writing, and thereupon a new Note of this series and of like tenor for the same aggregate principal amount will be issued to the designated transferee.

The Notes are issuable only in registered form without coupons in denominations of $1,000 and integral multiples of $1,000 in excess thereof. As provided in the Indenture and subject to certain limitations therein set forth, the Notes are exchangeable for a like aggregate principal amount of Notes and of like tenor of a different authorized denomination, as requested by the Holder surrendering the same.

Prior to due presentment of this Note for registration of transfer, the Company, the Trustee and any agent of the Company or Trustee may treat the Person in whose name the Note is registered as the owner hereof for all purposes, whether or not this Note be overdue, and neither the Company, the Trustee nor any such agent shall be affected by notice to the contrary.

Customary abbreviations may be used in the name of a Holder or an assignee, such as TEN COM (= tenants in common), TEN ENT (= tenants by the entirety), JT TEN (= joint tenants with rights of survivorship and not as tenants in common), CUST (= custodian) and U/G/M/A (= Uniform Gift to Minors Act).

No service charge shall be made for any such registration of transfer or exchange, but the Company may require payment of a sum sufficient to cover any tax or other governmental charge payable in connection therewith.

All defined terms used in this Note that are defined in the Indenture shall have the meanings assigned to them in the Indenture. If any provision of this Note limits, qualifies or conflicts with a provision of the Indenture, such provision of the Indenture shall control.

ATTACHMENT 1

[FORM OF NOTICE OF CONVERSION]

To: SEACOR Holdings Inc.

The undersigned owner of this Note hereby irrevocably exercises the option to convert this Note, or a portion hereof (which is such that the principal amount of the portion of this Note that will not be converted equals $1,000 or an integral multiple of $1,000 in excess thereof) below designated, into an amount of cash, a number of shares of Common Stock or a combination of cash and shares of Common Stock, if any, as the case may be, in accordance with the terms of the Indenture referred to in this Note, and directs that any cash payable and any shares of Common Stock issuable and deliverable upon conversion, together with any Notes representing any unconverted principal amount hereof, be paid and/or issued and/or delivered, as the case may be, to the registered Holder hereof unless a different name is indicated below.

Subject to certain exceptions set forth in the Indenture, if this notice is being delivered on a date after the Close of Business on a Regular Record Date and prior to the Open of Business on the Interest Payment Date corresponding to such Regular Record Date, this notice must be accompanied by payment of an amount equal to the interest payable on such Interest Payment Date on the principal amount of this Note to be converted. If any shares of Common Stock are to be issued in the name of a Person other than the undersigned, the undersigned will pay all transfer taxes payable with respect to such issuance and transfer as set forth in the Indenture.

In order to facilitate the Company’s compliance with the provisions of the Jones Act related to ownership of Common Stock by non-U.S. Citizens, the undersigned registered Holder of this Security represents and warrants as follows:

CHECK ONE BOX BELOW:



		such Holder is a U.S. Citizen (additional information may be required by the Company to confirm that the Holder is a U.S. Citizen)
		such Holder is a non-U.S. Citizen

Principal amount to be converted (if less than all):

Dated:

Signature(s)

(Sign exactly as your name appears on the other side of this Note)

Signature Guarantee

(Signature(s) must be guaranteed by an institution which is a member of one of the following recognized signature Guarantee Programs:

(i) The Notes Transfer Agent Medallion Program (STAMP); (ii) The New York Stock Exchange Medallion Program (MNSP); (iii) The Stock Exchange Medallion Program (SEMP) or (iv) another guarantee program acceptable to the Trustee.)

Fill in if a check is to be issued, or shares of Common Stock or Notes are to be registered, otherwise than to or in the name of the registered Holder.

(Name)

(Address)

Please print name and address
(including zip code)

(Social Security or other Taxpayer
Identifying Number)

In order to facilitate the Company’s compliance with the provisions of the Jones Act related to ownership of Common Stock by non-U.S. Citizens, the undersigned Person who has been designated by the registered Holder of this Security to receive the shares of Common Stock issuable and deliverable upon conversion of this Security represents and warrants as follows:

CHECK ONE BOX BELOW:



		such Person is a U.S. Citizen (additional information may be required by the Company to confirm that such Person is a U.S. Citizen)
		such Person is a non-U.S. Citizen

Dated:

Signature(s)

(Sign exactly as such Person’s name appears above)

Signature Guarantee

(Signature(s) must be guaranteed by an institution which is a member of one of the following recognized signature Guarantee Programs:

ATTACHMENT 2

[FORM OF FUNDAMENTAL CHANGE PURCHASE NOTICE]

To: SEACOR Holdings Inc.

The undersigned registered owner of this Note hereby acknowledges receipt of a notice from SEACOR Holdings Inc. (the “ Company ”) as to the occurrence of a Fundamental Change with respect to the Company and specifying the Fundamental Change Purchase Date and requests and instructs the Company to pay to the registered holder hereof in accordance with the applicable provisions of the Indenture referred to in this Note (i) the entire principal amount of this Note, or a portion thereof (that is such that the portion not to be purchased has a principal amount equal to $1,000 or an integral multiple of $1,000 in excess thereof) below designated, and (ii) if such Fundamental Change Purchase Date does not occur during the period after a Regular Record Date and on or prior to the Interest Payment Date corresponding to such Regular Record Date, accrued and unpaid interest, if any, thereon to, but excluding, such Fundamental Change Purchase Date.

Principal amount to be converted (if less than all):

Certificate number (if Notes are in certificated form)

Dated:

Signature(s)

(Sign exactly as your name appears on the other side of this Note)

Social Security or Other Taxpayer Identification Number

ATTACHMENT 3

[FORM OF SPECIFIED DATE PURCHASE COMPANY NOTICE]

To: SEACOR Holdings Inc.

The undersigned registered owner of this Note hereby acknowledges receipt of a Specified Date Purchase Company Notice from SEACOR Holdings Inc. (the “ Company ”) pursuant to Section 3.04 of the Indenture as to the occurrence of a Specified Purchase Date and specifying the Specified Purchase Date and requests and instructs the Company to pay to the registered holder hereof in accordance with the applicable provisions of the Indenture referred to in this Note (i) the entire principal amount of this Note, or a portion thereof (that is such that the portion not to be purchased has a principal amount equal to $1,000 or an integral multiple of $1,000 in excess thereof) below designated, and (ii) if such Specified Purchase Date does not occur during the period after a Regular Record Date and on or prior to the Interest Payment Date corresponding to such Regular Record Date, accrued and unpaid interest, if any, thereon to, but excluding, such Specified Purchase Date.

Principal amount to be converted (if less than all):

Certificate number (if Notes are in certificated form)

Dated:

Signature(s)

(Sign exactly as your name appears on the other side of this Note)

Social Security or Other Taxpayer Identification Number

ATTACHMENT 4

[FORM OF ASSIGNMENT AND TRANSFER]

For value received,

hereby sell(s), assign(s) and transfer(s) unto [(the “ Purchaser ”)]:

(Please insert social security or Taxpayer Identification Number of assignee)

the within Note, and hereby irrevocably constitutes and appoints to transfer the said Note on the books of the Company, with full power of substitution in the premises.

In connection with any transfer of the within Note occurring prior to the Resale Restriction Termination Date, as defined in the Indenture governing such Note, the undersigned confirms that such Note is being transferred:

To SEACOR Holdings Inc. or a subsidiary thereof; or

Pursuant to a registration statement which has become effective under the Securities Act of 1933, as amended (the “ Securities Act ”); or

To a qualified institutional buyer in compliance with Rule 144A under the Securities Act; or

Pursuant to an exemption from registration provided by Rule 144 under the Securities, or any other available exemption from the registration requirements of the Securities Act; or

[TO BE SIGNED BY PURCHASER IF THE SECOND, THIRD OR FOURTH BOX ABOVE IS CHECKED]

[ Include if the second, third or fourth box above is checked ] [The undersigned Purchaser represents and warrants that it is not an “affiliate” (as defined in Rule 144 under the Securities Act) of SEACOR Holdings Inc. and has not been an affiliate of SEACOR Holdings Inc. within the three months immediately preceding this purchase.]

[ Include if the third box above is checked ] [The undersigned Purchaser represents and warrants that it is purchasing this Note for its own account or an account with respect to which it exercises sole investment discretion and that it and any such account is a “qualified institutional buyer” within the meaning of Rule 144A under the Securities Act and is aware that the sale to it is being made in reliance on Rule 144A and acknowledges that it has received such information regarding the Company as the undersigned has requested pursuant to Rule 144A or has determined not to request such information and that it is aware that the transferor is relying upon the undersigned’s foregoing representations in order to claim the exemption from registration provided by Rule 144A.]

[Date: ______________________ Signed: ]

Unless one of the above boxes is checked, the Trustee will refuse to register any of the Notes evidenced by this certificate in the name of any Person other than the registered Holder thereof; provided that if the fourth box is checked, the Company or the Trustee may require, prior to registering any such transfer of the Notes, in its sole discretion, such legal opinions, certifications and other information as the Company or the Trustee may reasonably request to confirm that such transfer is being made pursuant to an exemption from, or in a transaction not subject to, the registration requirements of the Securities Act.

If none of the foregoing boxes is checked, the Trustee or Registrar shall not be obligated to register this Note in the name of any Person other than the Holder hereof unless and until the conditions to any such transfer of registration set forth herein and in Section 2.11 of the Indenture shall have been satisfied.

Dated:

Signature(s)

(Sign exactly as your name appears on the other side of this Note)

Signature Guarantee

(Signature(s) must be guaranteed by an institution which is a member of one of the following recognized signature Guarantee Programs: (i) The Notes Transfer Agent Medallion Program (STAMP); (ii) The New York Stock Exchange Medallion Program (MNSP); (iii) The Stock Exchange Medallion Program (SEMP) or (iv) another guarantee program acceptable to the Trustee)

ATTACHMENT 5

[ Insert for Global Note ]

SCHEDULE OF INCREASES AND DECREASES IN THE GLOBAL NOTE
Initial Principal Amount of Global Note:



Date	Amount of Increase in Principal Amount of Global Note	Amount of Decrease in Principal Amount of Global Note	Principal Amount of Global Note After Increase or Decrease	Notation by Registrar, Note Custodian or authorized signatory of Trustee

[FORM OF FREE TRANSFERABILITY CERTIFICATE]

Officer’s Certificate

[NAME OF OFFICER], the [TITLE] of SEACOR Holdings Inc., a Delaware corporation (the “ Company ”) does hereby certify, in connection with the sale of $230,000,000 of the Company’s 3.00% Convertible Senior Notes due 2028 (the “ Notes ”) pursuant to the terms of the Indenture, dated as of November 13, 2013 (as may be amended or supplemented from time to time, the “ Indenture ”), by and between the Company and Wells Fargo Bank, National Association (the “ Trustee ”), that:

1. The undersigned is permitted to sign this “Officer’s Certificate” on behalf of the Company, as the term “Officer’s Certificate” is defined in the Indenture.

2. The undersigned has read, and thoroughly examined, the Indenture and the definitions therein relating thereto.

3. In the opinion of the undersigned, the undersigned has made such examination as is necessary to enable the undersigned to express an informed opinion as to whether or not all conditions precedent to the removal of the Restricted Notes Legend described herein as provided for in the Indenture have been complied with.

4. To the best knowledge of the undersigned, all conditions precedent described herein as provided for in the Indenture have been complied with.

In accordance with Section 2.08 of the Indenture, the Company hereby instructs you as follows:

1. The Restricted Notes Legend as set forth on the Restricted Global Notes shall be deemed removed from the Global Notes in accordance with the terms and conditions of the Notes and as provided for in the Indenture, without further action on the part of the Holders.

2. The restricted CUSIP number for the Notes shall be deemed removed from the Global Notes and replaced with an unrestricted CUSIP number, which unrestricted CUSIP number shall be [81170Y AB5], in accordance with the terms and conditions of the Global Notes and as provided for in the Indenture, without further action on the part of the Holders.

[ Signature page follows. ]

IN WITNESS WHEREOF, we have signed this certificate as of [_________________].

SEACOR Holdings Inc.

By:
Name:
Title:

EXHIBIT C

[FORM OF RESTRICTED STOCK LEGEND]

THIS SECURITY HAS NOT BEEN REGISTERED UNDER THE SECURITIES ACT OF 1933, AS AMENDED (THE “SECURITIES ACT”), AND ACCORDINGLY, PRIOR TO THE RESALE RESTRICTION TERMINATION DATE (AS DEFINED BELOW), MAY NOT BE OFFERED, SOLD, PLEDGED OR OTHERWISE TRANSFERRED EXCEPT IN ACCORDANCE WITH THE FOLLOWING SENTENCE. BY ITS ACQUISITION HEREOF OR OF A BENEFICIAL INTEREST HEREIN, THE ACQUIRER:

(A) TO SEACOR HOLDINGS INC. (THE “COMPANY”) OR ANY SUBSIDIARY THEREOF, OR

(B) PURSUANT TO A REGISTRATION STATEMENT WHICH HAS BECOME EFFECTIVE UNDER THE SECURITIES ACT, OR

(D) PURSUANT TO AN EXEMPTION FROM REGISTRATION PROVIDED BY RULE 144 UNDER THE SECURITIES ACT OR ANY OTHER AVAILABLE EXEMPTION FROM THE REGISTRATION REQUIREMENTS OF THE SECURITIES ACT.

THE “RESALE RESTRICTION TERMINATION DATE” MEANS THE DATE: (A) THAT IS AT LEAST ONE YEAR AFTER THE LAST ORIGINAL ISSUANCE DATE OF THE COMPANY’S 3.00% CONVERTIBLE SENIOR NOTES DUE 2028; AND (B) ON WHICH THE COMPANY HAS INSTRUCTED THE TRUSTEE FOR THE COMPANY’S 3.00% CONVERTIBLE SENIOR NOTES DUE 2028 THAT THE RESTRICTIVE LEGEND WILL NO LONGER APPLY IN ACCORDANCE WITH THE PROCEDURES DESCRIBED IN THE INDENTURE.

PRIOR TO THE REGISTRATION OF ANY TRANSFER IN ACCORDANCE WITH (2)(D) ABOVE, THE COMPANY AND THE TRANSFER AGENT FOR THE COMMON STOCK RESERVE THE RIGHT TO REQUIRE THE DELIVERY OF SUCH LEGAL OPINIONS, CERTIFICATIONS OR OTHER EVIDENCE AS MAY REASONABLY BE REQUIRED IN ORDER TO DETERMINE THAT THE PROPOSED TRANSFER IS BEING MADE IN COMPLIANCE WITH THE SECURITIES ACT AND APPLICABLE STATE SECURITIES LAWS. NO REPRESENTATION IS MADE AS TO THE AVAILABILITY OF ANY EXEMPTION FROM THE REGISTRATION REQUIREMENTS OF THE SECURITIES ACT.

NY\6010653.5

CONFIDENTIAL TREATMENT REQUESTED. INFORMATION FOR WHICH CONFIDENTIAL TREATMENT HAS BEEN REQUESTED IS OMITTED AND MARKED WITH “[*]”. AN UNREDACTED VERSION OF THE DOCUMENT HAS ALSO BEEN FURNISHED SEPARATELY TO THE SECURITIES AND EXCHANGE COMMISSION AS REQUIRED BY RULE 24B-2 UNDER THE SECURITIES EXCHANGE ACT OF 1934, AS AMENDED.

EXHIBIT 10.22

AMENDMENT 1

to the

CONTRACT FOR CONSTRUCTION

TWO VESSELS for

SEABULK TANKERS, INC.

NATIONAL STEEL AND SHIPBUILDING COMPANY

By the signatures below, the Contract between the Parties executed on September 10, 2013 is amended as follows. Any Articles or paragraphs within Articles not shown below remain as set forth in the Contract without changes.

ARTICLE 1 STATEMENT OF WORK

(a) Contract Work . Contractor shall furnish all facilities, labor, supervision, material, supplies, machinery and equipment, and shall perform all work necessary to design, construct, launch, outfit, test and deliver two Vessels (NASSCO Hulls 552 and 557) qualified for operation in the U.S. coastwise trade in compliance with the Jones Act and in international trades to the extent identified in and in accordance with the appropriate Specifications and Vessel Drawings (as such terms are defined below in the SPECIFICATIONS AND VESSEL DRAWINGS Article 2), using only new, good quality materials, supplies, machinery and equipment. Contractor shall do everything required of it by this Contract, the Specifications, and the Vessel Drawings, including the development of Design Products (as defined below in the DESIGN RIGHTS Article 10) and the installation of any material that the Contract and/or the Specifications provides shall be furnished by Purchaser all in accordance with international standard shipbuilding and shipping practices as identified within the Specifications (all together as the “Contract Work"), for the total consideration of the Contract Price.

(e) Vessel Contract Delivery Dates .

(1) Subject to Articles 1(e)(2) and 9, Contractor shall tender each Vessel to Purchaser on the following respective date for such Vessel, which may be contracted or extended by mutual agreement of the Parties or as provided for elsewhere in this Contract (after any changes, collectively, the “Vessel Contract Delivery Dates” and each a “Vessel Contract Delivery Date”):

Vessel Contract

Vessel Number Delivery Dates

Vessel 1 (Hull552): May 1, 2016

Vessel 2 (Hull 557): March 15, 2017

ARTICLE 3 PRICING

(b) Contract Base Price and Contract Price . The “Contract Base Price” for each Vessel shall be as set out in the table below.

Vessel Number Price

Vessel 1, Hull 552 [*]

Vessel 2, Hull 557 [*]

The Contract Base Price for each Vessel set forth above shall be a firm fixed price and not subject to adjustment except as provided in this Contract.

EXHIBIT 10.23

AMENDMENT 2

to the

CONTRACT FOR CONSTRUCTION

TWO VESSELS for

SEABULK TANKERS, INC.

NATIONAL STEEL AND SHIPBUILDING COMPANY

The purpose of this Amendment 2 to the Contract for Construction of Two Vessels, effective as of September 10, 2013 (the “Contract”), is to provide Purchaser with an additional Vessel (Vessel 3) and an Option Period of 80 days to purchase a fourth Vessel (Option Vessel 1). This Amendment 2 is effective as of November 11, 2013.

The following pages are replaced in their entirety within the Contract with one or more insert pages:

Title Page

Page 2

Page 3

Page 4

Page 6

Page 7

Page 8

Page 9

Page 10

Page 12

Page 15

Page 32

Page 39

Page 40

Page 41

Page 59

Page 62

Exhibit B, first page

[ Signature page follows. ]

Amendment 2

Page 1

Except as provided herein, all terms and conditions remain unchanged and in full force and effect.

Purchaser: Seabulk Tankers, Inc.

By: /s/ Eric Fabrikant______

Eric Fabrikant

Chief Executive Officer

Date: November 11, 2013

Contractor: National Steel and Shipbuilding Company

By: /s/ Matthew S. Luxton

Matthew S. Luxton

Vice President Finance and CFO

Date: November 11, 2013

Amendment 2

Page 2

CONTRACT FOR CONSTRUCTION

UP TO FOUR VESSELS

FOR

SEABULK TANKERS, INC.

NATIONAL STEEL AND SHIPBUILDING COMPANY

TABLE OF CONTENTS

ARTICLE PAGE

1 STATEMENT OF WORK 4

2 SPECIFICATIONS AND VESSEL DRAWINGS 6

3 PRICING 7

4 PAYMENTS 8

5 ECONOMIC PRICE ADJUSTMENTS 11

6 CHANGES 11

7 VESSEL PERFORMANCE 13

8 FORCE MAJEURE 16

9 DAMAGES AND INCENTIVES FOR DELIVERY 17

10 DESIGN RIGHTS 18

11 REGULATORY BODY REQUIREMENTS 19

12 RESERVED 21

13 MATERIAL AND WORKMANSHIP 22

14 INSPECTION 22

15 SUBCONTRACTORS 26

16 ITEMS FURNISHED BY PURCHASER 26

17 TRIALS 27

18 POST-TRIAL INSPECTION AND ACCEPTANCE 28

19 CONTRACTOR’S GUARANTY AND LIMITATION OF THE PARTIES LIABILITY 29

20 MAKER'S LIST, SPARE PARTS, TOOLS, AND SUPPLIES 33

21 CONTRACTOR’S INSURANCE 34

22 PURCHASER’S INSURANCE 36

23 LOSS OR DAMAGE OF VESSEL 37

24 INDEMNIFICATION 38

25 DEFAULT OF PURCHASER AND CONTRACTOR'S REMEDIES 38

26 DEFAULT OF CONTRACTOR AND PURCHASER’S REMEDIES 42

27 TITLE, RISK OF LOSS, AND PROPERTY INTERESTS 46

28 LIENS 47

29 TAXES AND DUTIES 48

30 INDEMNIFICATION REGARDING INFRINGEMENT OF INTELLECTUAL PROPERTY RIGHTS 49

31 ASSIGNMENT 50

32 COMPLIANCE WITH LAWS AND REGULATIONS 51

33 DISPUTES 51

34 ESCROW 53

35 CERTIFICATES OF FINANCIAL RESPONSIBILITY 54

36 PURCHASER USE OF CONTRACTOR FACILITIES 54

37 COMPUTATION OF TIME 56

38 PRESS RELEASES 56

39 CONFIDENTIALITY 57

40 INDEPENDENT CONTRACTOR 57

41 SURVIVING OBLIGATIONS 58

42 AUTHORIZED PERSONS, NOTICES AND COMMUNICATIONS 59

43 OPTION VESSEL 60

44 INTERPRETATION 61

45 CONDITIONS PRECEDENT 61

46 EXHIBITS 63

47 DEFINITIONS 63

CONTRACT FOR CONSTRUCTION

UP TO FOUR VESSELS for

SEABULK TANKERS, INC.

NATIONAL STEEL AND SHIPBUILDING COMPANY

PREAMBLE

This Contract for Construction of up to Four Vessels (“Contract”) is entered into by and between Seabulk Tankers, Inc. (“Purchaser”), and National Steel and Shipbuilding Company, incorporated in the State of Nevada (“Contractor” or “NASSCO”), effective as of September 10, 2013 (“Effective Date”), including Amendment 1 for hull numbering changes effective as of October 25, 2013 and Amendment 2 for the addition of up to two Vessels effective as of November 11, 2013. Purchaser and Contractor are each a “Party” and collectively, the “Parties.”

RECITALS

WHEREAS , Purchaser desires to purchase three 49,430 DWT product tankers of the ECO MR Product Oil Tanker Design as provided in this Contract (“Vessel” or “Vessels”), for operation in the coastwise trade of the United States in compliance with the U.S. coastwise laws principally contained in 46 U.S.C. § 50501 and 46 U.S.C. Chapters 121 and 551, as amended (collectively, the "Jones Act") and in international trades to the extent identified within the Specifications, and desires a limited option to purchase a fourth Vessel;

WHEREAS , Contractor jointly owns a design for the Vessels meeting Purchaser’s requirements and has the right to license Purchaser’s use of the design, as set forth in this Contract;

WHEREAS , Contractor owns or will contract with DSEC Co., Ltd. (“DSEC”), a corporation organized and existing under the laws of the Republic of Korea, and other suppliers to purchase certain equipment, machinery and material to construct the Vessels;

WHEREAS , Contractor is capable of using Drawings and Design Data and the equipment and material provided by DSEC to construct, test and complete the Vessels;

WHEREAS , Purchaser and Contractor desire to enter into this Contract for the design and construction of the Vessels in accordance with the terms and conditions of this Contract.

NOW THEREFORE , Purchaser and Contractor agree as follows:

AGREEMENT

1 STATEMENT OF WORK

(a) Contract Work . Contractor shall furnish all facilities, labor, supervision, material, supplies, machinery and equipment, and shall perform all work necessary to design, construct, launch, outfit, test and deliver three Vessels (NASSCO Hulls 552 and 557 and 556) and, at Purchaser’s option as provided herein, one additional Vessel (Option Vessel 1, NASSCO Hull 558) qualified for operation in the U.S. coastwise trade in compliance with the Jones Act and in international trades to the extent identified in and in accordance with the appropriate Specifications and Vessel Drawings (as such terms are defined below in the SPECIFICATIONS AND VESSEL DRAWINGS Article 2), using only new, good quality materials, supplies, machinery and equipment. Contractor shall do everything required of it by this Contract, the Specifications, and the Vessel Drawings, including the development of Design Products (as defined below in the DESIGN RIGHTS Article 10) and the installation of any material that the Contract and/or the Specifications provides shall be furnished by Purchaser all in accordance with international standard shipbuilding and shipping practices as identified within the Specifications (all together as the “Contract Work"), for the total consideration of the Contract Price.

(b) Vessel Certification and Classification . Other than with respect to the ballast water management system described in the SPECIFICATIONS AND VESSEL DRAWINGS Article 2, Contractor shall obtain all requisite approvals from applicable U.S. regulatory authorities to qualify each of the Vessels for a coastwise endorsement on its Certificate of Documentation issued by the U.S. Coast Guard (“USCG”) and for qualification, to the extent permitted, under the USCG’s alternate compliance program administered by American Bureau of Shipping (“ABS”). Contractor shall obtain the services of ABS to review drawings and survey construction, and Contractor shall take all other steps necessary or appropriate to obtain, and it shall obtain, classification of the Vessels according to ABS’s rules, with the notations required by the Specifications at the sole cost and expense of the Contractor.

(c) Delivery . The Vessels shall be constructed at Contractor's shipbuilding facility located at San Diego, California ("Shipyard"). When the construction of each Vessel is Substantially Complete (as defined below) in accordance with this Contract, and the Vessel has satisfied the tests required by this Contract, each Vessel shall be tendered by Contractor and accepted by Purchaser (such tender and acceptance shall constitute “Delivery” and such Vessel shall be deemed “Delivered”) at the Shipyard in satisfaction of all requirements of ABS, free of any outstanding recommendations or conditions of class, and free and clear of all mechanics, possessory or other liens or rights in rem of every nature, whether arising by statute, common law or in admiralty, charges, encumbrances or security interests (herein collectively referred to as “Liens”), excepting, however, Liens in favor of a claimant other than Contractor arising out of the acts or omissions of Purchaser. As used in this Contract, the term "Substantially

Vessel Number Delivery Dates

Vessel 1 (Hull 552): May 1, 2016

Vessel 2 (Hull 557): March 15, 2017

Vessel 3 (Hull 556): October 14, 2016

Option Vessel 1 (Hull 558): June 1, 2017

(2) Purchaser will accept Delivery of any Vessel completed pursuant to the requirements of this Contract not more than 60 days prior to the Vessel Contract Delivery Date for such Vessel provided that the Contractor shall give Notice of such early Delivery to Purchaser not less than 120 days prior to such Vessel Contract Delivery Date.

(f) Possession of Vessel after Delivery . Purchaser shall take possession of each Vessel upon Delivery and shall remove the Vessel from the Shipyard within seven days after its date of Delivery.

(g) [*]

2 SPECIFICATIONS AND VESSEL DRAWINGS

(a) Specifications and Vessel Drawings . The Contract design requirements for construction of the Vessels are set forth in a document entitled "SPECIFICATIONS, NASSCO Number TE2013-FS-RB," dated September 10, 2013, published by DSEC and Contractor and approved by Purchaser (the "Specifications"). The Specifications shall include the General Arrangement drawing identified in Section 101 of the Specifications. In addition, Contractor shall cause DSEC to provide Basic and Detail Drawings and Production Drawings for the Vessel as provided for review and comment by Purchaser. Together, the General Arrangement drawing, Basic and Detail Drawings, the Production Drawings, and the Selected Maker’s Plan are referred to herein collectively as the “Vessel Drawings.” The Specifications are hereby incorporated by reference and made a part of this Contract with the same force and effect as though herein set out in full. Contractor shall provide Purchaser with copies of Design Products in any reasonable format, including, but not limited to, paper and electronic formats. Any reference in this Contract to the Specifications shall be deemed to include both the Specifications and the General Arrangement drawing. [*]

[*]

(b) Drawings Approval . The Vessel Drawings and, to the extent required, Design Products (as defined in the DESIGN RIGHTS Article 10) have been or will be approved by the Regulatory Bodies (as defined in the REGULATORY BODY REQUIREMENTS Article 11) having jurisdiction over the Contract Work, as identified in the Specifications, and any deficiency in the Vessel Drawings and Design Products in meeting the requirements of such agencies shall be remedied by the Contractor, except as provided in the REGULATORY BODY REQUIREMENTS Article 11.

(c) Order of Precedence . If any discrepancy, difference or conflict exists between the Specifications and any terms of this Contract, the provisions of this Contract shall prevail over the Specifications. If there is any discrepancy, difference or conflict between the Specifications and the General Arrangement drawing, the Specifications shall prevail. If there is any discrepancy, difference or conflict between the Specifications and any document referred to in the Specifications or this Contract, the Specifications shall prevail. Further, any work called for by, and any detail shown in, either the Specifications or General Arrangement drawing, but not shown on the other shall be deemed included in both and shall be performed by the Contractor as part of the Contract Work.

3 PRICING

(a) Definition of “Contract Price” All amounts stated in this Contract are in United States Dollars, and are subject to adjustment in accordance with the provisions of the ECONOMIC PRICE ADJUSTMENTS Article 5. The “Contract Price” shall be equal to the Contract Base Price as adjusted from time to time pursuant to the terms of this Contract.

(b) Contract Base Price and Contract Price . The “Contract Base Price” for each Vessel shall be as set out in the table below.

Vessel Number Price

Vessel 1, Hull 552 [*]

Vessel 2, Hull 557 [*]

Vessel 3, Hull 556 [*]

Option Vessel 1, Hull 558 [*]

The Contract Base Price for each Vessel set forth above shall be a firm fixed price and not subject to adjustment except as provided in this Contract.

4 PAYMENTS

(a) Payment of Contract Base Price . Purchaser shall pay or cause to be paid to Contractor the Contract Base Price, as may be adjusted from time to time pursuant to this Contract, in the manner provided in this Article.

(b) Reserved .

(c) Initial Payments . Purchaser shall pay to Contractor initial payments in the amounts and no later than the dates specified below:

(1) First Initial payment : For Vessel 1 and Vessel 2 within [*] of the Effective Date of this Contract, a payment of [*] per Vessel, for a total of [*], which shall be non-refundable except as provided in Articles 9(d) and 26(b) or if the requirement for the guaranty of General Dynamics Corporation is not satisfied.

(2) Second Initial Payment . No earlier than [*] and no later than [*],[*] for each of Vessel 1 and Vessel 2, for a total of [*] with the first and second initial payments totaling [*] in the aggregate.

(3) Third Initial Payment . No later than [*],[*] for each of Vessel 1 and Vessel 2, for a total of [*], with the first, second and third initial payments totaling [*] in the aggregate. The first and second initial payments shall be considered advance payments with respect to the Contract Price for each of Vessel 1 and Vessel 2.

(4) Initial Payment for Vessel 3 and Option Vessel 1 . No later than close of business on [*], Purchaser shall make a payment of [*],[*] of which shall apply to Vessel 3 and be non-refundable except as provided in Articles 9(d) and 26(b). The remaining [*] shall apply to Option Vessel 1 and is non-refundable in all cases, provided however that should Purchaser elect to execute Option Vessel 1, (i) the [*] portion of the initial payment shall be applied to Option Vessel 1, and (ii) upon exercise of Option Vessel 1, the [*] payment may be refundable as provided in Articles 9(d) and 26(b). These initial payments shall be considered advance payments with respect to the Vessel’s Contract Price and shall be liquidated against the final payment for such Vessel.

(d) Invoices and Payments for Vessels 1 and 2 .

(1) Contractor shall submit its invoice for the second initial payment under paragraph (c)(2) above, to Purchaser, by electronic mail or fax no later than [*], with the original invoice mailed the same day. Payment shall be due in immediately available funds that are received via wire transfer to a bank to be specified by Contractor, no later than [*]. Contractor shall submit its invoice for the third initial payment under paragraph (c)(3) above, to Purchaser, by electronic mail or fax no later than [*], with the original invoice mailed the same day. Payment shall be due in immediately available funds that are received via wire transfer to a bank to be specified by Contractor, no later than [*]. Late payments by Purchaser shall bear Interest (as defined in paragraph (j) of this Article).

(2) After all initial payments, the Purchaser shall make additional payments for each Vessel associated with the completion of key milestones in the shipbuilding process (“Milestone Payments”). Each Milestone Payment for a Vessel will be calculated by multiplying the Cumulative Payment Percent times the then current

Contract Price, less any previous initial payments or Milestone Payments for that Vessel.



Milestone	Cumulative Payment Percent
Start of Construction (SOC)	[*]
Keel	[*]
Launch	[*]
Delivery	[*]

Start of Construction is defined as the first cutting of steel parts in San Diego.

Keel is defined as [*].

Launch is defined as the transfer of the Vessel from its final build position to the

water.

Delivery is defined in STATEMENT OF WORK, Article 1 of the Contract.

For the avoidance of doubt, the Milestone Payment due at Delivery of any Vessel shall be subject to the withholding of amounts by Purchaser pursuant to Article 4(f).

Contractor shall submit its invoices for the payments required under the Milestone Schedule to Purchaser by electronic mail or fax, with the original invoice mailed the same day, along with a certificate signed by an executive officer of Contractor certifying Contractor’s completion of the applicable milestone in the Milestone Schedule. Payments by Purchaser shall be due in immediately available funds that are received via wire transfer no later than ten (10) Business Days after the date such invoice is received (if by electronic mail or fax or courier with confirmation of completed transmission or delivery, as the case may be), to a bank to be specified by Contractor. Late payments shall bear Interest (as defined in Article 4(j)).

(3) If Purchaser and Contractor do not agree as to whether a certain milestone in the Milestone Schedule has been achieved with respect to any Vessel, Purchaser shall be entitled to withhold [*] of the associated milestone payment until it agrees that such milestone has been achieved or the matter has been resolved pursuant to the DISPUTES Article 33. Purchaser shall deposit the [*] of the amount of the disputed milestone payment ("Disputed Milestone Payment") into an interest bearing escrow account (the "Escrow Account") with the Escrow Agent (as hereinafter defined) pending resolution. Each such Disputed Milestone Payment shall be identified as such at the time of transmission of payment. When the Disputed Milestone Payment is subsequently agreed upon by the Parties or resolved in accordance with this Contract, Contractor and Purchaser shall within [*] sign joint instructions to the Escrow Agent to release the agreed or resolved amount from escrow to the appropriate Party.

(e) Invoices and Payments for Vessel 3 and Option Vessel 1 . For Vessel 3 and Option Vessel 1, following the initial payment the Purchaser shall make quarterly payments (“Quarterly Payments”) pursuant to the Quarterly Payments Schedule below. Contractor shall submit its invoices for the payments required under the Quarterly Payments Schedule to Purchaser by electronic mail or fax, with the original invoice mailed the same day (“Quarterly Payments Schedule”). Payments by Purchaser shall be due in immediately available funds that are received via wire transfer no later than the dates set forth in the Quarterly Payment Schedule to a bank to be specified by Contractor. Late payments shall bear Interest (as defined in Article 4(j)).

Quarterly Payments Schedule



Quarterly Payment Due Date	Quarterly Payment Amount for Vessel 3	Quarterly Payment Amount for Option Vessel 1	Total Payment
1/16/2015	[*]	[*]	[*]
4/17/2015	[*]	[*]	[*]
7/17/2015	[*]	[*]	[*]
10/16/2015	[*]	[*]	[*]
1/15/2016	[*]	[*]	[*]
4/15/2016	[*]	[*]	[*]
7/15/2016	[*]	[*]	[*]
10/14/2016	[*]	[*]	[*]
1/13/2017	[*]	[*]	[*]
4/14/2017	[*]	[*]	[*]

Notwithstanding the foregoing, the final Quarterly Payment shall be due at Delivery, and Contractor shall not Deliver any Vessel unless and until all required payments have been made by Purchaser to Contractor. For the avoidance of doubt, the Quarterly Payment due at Delivery of any Vessel shall be subject to the withholding of amounts by Purchaser pursuant to Article 4(f).

(f) Withholding for Deficiencies . At the time of Delivery of each Vessel, Purchaser may withhold payment amounts as described below:

(1) As to Minor Items that require correction and/or are incomplete at Delivery, Purchaser may withhold, without prejudice to its rights under CONTRACTOR’S GUARANTY AND LIMITATION OF THE PARTIES’ LIABILITY Article 19, from final payment due under the Milestone Schedule or Quarterly Payment Schedule [*] or such other amount as mutually agreed by the Parties per Minor Item as security for correction of such items by Contractor and deposit such sum into the Escrow Account.

(2) As security for the correction of Deficiencies that may occur during the Guaranty Period, as provided in the CONTRACTOR’S GUARANTY AND LIMITATION OF THE PARTIES’ LIABILITY Article 19, Purchaser may withhold a further amount of up to [*] from final payment with respect to each Vessel, and deposit such sum into the Escrow Account.

(3) Amounts withheld for correction of Minor Items pursuant to Article 4(f)(1) shall be released from the Escrow Account on a monthly basis for all items corrected during the prior month for each Vessel as evidenced by a joint written instruction from Contractor and Purchaser confirming that such Minor Items have been corrected. Contractor and Purchaser shall within five (5) Business Days of each relevant calendar month end sign joint instructions to the Escrow Agent to release the agreed or resolved amount from escrow.

(4) The amount held as security for correction of Deficiencies pursuant to Article 4(f)(2) shall be released from the Escrow Account to Contractor upon expiration of the Guaranty Period for each Vessel, provided that amounts may be retained in the Escrow Account for correction of Deficiencies covered by the guaranty in CONTRACTOR’S GUARANTY AND LIMITATION OF THE PARTIES’ LIABILITY Article 19 but not corrected prior to the expiration of the Guaranty Period, with the aggregated amount retained in the Escrow Account for each Vessel as mutually agreed upon by Purchaser and Contractor. Such amounts retained beyond expiration of the Guaranty Period shall be released from Escrow for each Vessel on a monthly basis for all Deficiencies corrected during the prior month as evidenced by a joint written instruction from Contractor and Purchaser confirming that such Deficiencies have been corrected.

(g) Adjustments . Adjustments shall be made to the Contract Base Price for the purpose of computing milestone or quarterly payments, as appropriate, for the next invoice following the execution of a Contract Change under CHANGES Article 6 that revises the Contract Base Price.

(1) If there has been no agreement as to adjustment of the Contract Base Price resulting from a change, the affected payments shall be paid provisionally based on the amount of adjustment as estimated by Contractor for the changed Contract Work, and the resulting difference between the amount paid and payment amount as estimated by Purchaser shall be preserved for resolution pursuant to the DISPUTES Article 33. When disputed adjustments to the Contract Base Price are agreed by the Parties or resolved pursuant to this Contract, (i) in the event of underpayment by Purchaser, Purchaser shall make an appropriate adjustment in subsequent milestone or quarterly payments, as appropriate, to reflect the variance between the amount paid by Purchaser and the amount agreed or resolved, together with Interest on such variance from the date of provisional payment, or (ii) in the event of an overpayment by Purchaser, Contractor shall make an appropriate adjustment in subsequent milestone or quarterly payment invoices, as appropriate, to give a credit for or shall refund the excess of the amount paid by Purchaser over the amount agreed or resolved, together with Interest on such excess from the date of provisional payment.

(h) Withholding for Delays . In accordance with the provisions of the DAMAGES AND CANCELLATION FOR LATE DELIVERY Article 9, Purchaser shall be entitled to deduct from amounts payable pursuant to this Article any amount agreed to be due to Purchaser as liquidated damages.

(1) To the extent that such amount owed by Contractor as liquidated damages exceeds the next amount that would otherwise be payable by Purchaser to

period commencing with the month four months prior to the Start of Construction milestone for each Vessel, as adjusted from time to time in accordance with this Contract or as otherwise provided by Contractor during performance of the Contract Work. The "Current Period Index" is defined as the arithmetic average of the monthly values of the AMM Index published for the Current Period. The “Base Price Index” is [*] per hundred pounds, or centum weight ($/cwt), which is the value of the AMM Index for the 1 ^st Quarter 2013, the price used to calculate Steel $ and the Base Contract Price at the time this Contract was formed.

(2) Computation . [*] an Economic Price Adjustment for Steel shall be computed using the following formula:

Steel $ x ((Current Period Index – Base Price Index) ÷ Base Price Index).

[*]

(3) Invoicing and Payment of Economic Price Adjustment . At 30 days prior to the start of construction of each Vessel, Contractor shall compute the Economic Price Adjustment for such Vessel. If a positive adjustment results, Contractor shall invoice Purchaser, and Purchaser shall pay such adjustment within ten business days of Contractor's invoice. If a negative adjustment results, Contractor shall credit such adjustment for the Vessel against the next milestone or quarterly payment, as appropriate, to be invoiced to Purchaser. [*].

6 CHANGES

(a) No Departures from Design . Contractor shall not depart from the requirements of the Specifications or make any changes to the Contract Work ("Changes") except in accordance with the provisions of this Article, VESSEL PERFORMANCE Article 7, or REGULATORY BODY REQUIREMENTS Article 11. In addition, Contractor shall not substitute materials specified in the Specifications as they are written as of the Effective Date without the prior written consent of Purchaser.

(b) Types of Changes . For purposes of this Contract, Changes in the Contract Work shall be classified as "Essential Changes" and "Non-Essential Changes." Each Change shall require a change proposal form ("CPF"), the form of which is set out in Exhibit B hereto, and shall be proposed in writing by Contractor or Purchaser, as the case may be, to the other Party on a CPF.

(c) Essential Changes . Essential Changes shall be Changes in the Contract Work required under REGULATORY BODY REQUIREMENTS Article 11. If either Purchaser or Contractor should believe that an Essential Change is required, it shall promptly notify the other Party thereof, and in any event no later than ten days thereafter. If Contractor and Purchaser do not agree in writing that a proposed change is an Essential Change, either Party may treat the matter as a Dispute to be resolved as provided in the DISPUTES Article 33. Non-Essential Changes shall be all changes other than Essential Changes.

(3) Verification of Main Engine Fuel Consumption . The Specific Fuel Oil Consumption of main engines of each Vessel shall have been verified by the original equipment manufacturer’s (“OEM’s”) test for that model engine.

(c) Performance Below Key Performance Requirements . If any Vessel's performance does not meet any of the Key Performance Requirements set forth in paragraph (a) of this Article 7, Purchaser will suffer damages that are difficult to determine . By way of limitation of Contractor’s liability for such failure, and in lieu of actual damages and all other remedies of Purchaser for such failure (except as set forth in the provisos set forth in Articles 7(c)(1), (2) and (3)), the Contract Base Price for such Vessel shall be adjusted downward in accordance with the following:

(1) Service Speed : No liquidated damages shall be due for [*]. Liquidated damages shall be due to Purchaser in the amount of [*] for each of the [*] and in the amount of [*] for each [*]. Service Speed shall be rounded to the nearest tenth of a knot with the Main Engine Operating at [*].

(2) Deadweight : No liquidated damages shall be due for the first [*]. Liquidated damages shall be due to Purchaser in the amount of [*] for each full metric tons below [*]. Fractions of metric tons shall be rounded to the nearest metric ton.

(3) Main Diesel Engine Fuel Consumption : No liquidated damages shall be due for the [*] of specific fuel oil consumption rate above [*]. Liquidated damages shall be due to Purchaser in the amount of [*] increase in fuel consumption rate in excess of [*]. Fractions of 1% to be rounded to the nearest 1%.

(d) Reserved .

(e) Vessel Adjustments . In lieu of the Contract Price Adjustments specified in paragraph (c) of this Article 7, Contractor shall have the right, at its own expense, at any time prior to Delivery, to make reasonable adjustments or modifications to any Vessel to cause such Vessel to meet the Key Performance Requirements specified in paragraph (a) of this Article 7; provided , however , that, any such adjustments shall conform to the requirements of the Specifications and Contractor shall obtain any required Regulatory Body approval for such adjustments or modifications.

(f) Effect of Changes . The Key Performance Requirements set forth in paragraph (a) of this Article 7 are based on the Vessels as described and delineated in the Specifications, and such Requirements shall be changed to take into account any Contract Work change required or approved pursuant to the CHANGES Article 6 and/or the REGULATORY BODY REQUIREMENTS Article 11.

(g) Disagreements . If either Party claims a Contract Base Price adjustment pursuant to paragraph (c) of this Article, and if there is disagreement as to any such proposed adjustment, Contractor shall deposit one half of the disputed amount into the Escrow Account with the Escrow Agent pending resolution. Each such disputed adjustment shall be identified as such at the time of transmission of payment. When the disputed amount is subsequently agreed upon by the Parties or resolved in accordance with this Contract, Contractor and Purchaser shall within one (1) Business Day sign joint instructions to the Escrow Agent to release the agreed or resolved amount from escrow to the appropriate Party.

15a

responsible for payment of the costs of personal accident insurance, wages and repatriation costs for its Guaranty Engineer.

(k) LIMITATION OF LIABILITY .

(1) [*], NEITHER PARTY SHALL BE LIABLE TO THE OTHER PARTY FOR ANY PUNITIVE, EXEMPLARY OR OTHER SPECIAL DAMAGES OR ANY INDIRECT, INCIDENTAL, OR CONSEQUENTIAL DAMAGES (INCLUDING WITHOUT LIMITATION LOSS OF USE, INCOME, FUTURE SALES, PROFITS OR ANTICIPATED PROFITS, BUSINESS OR BUSINESS OPPORTUNITY, SAVINGS, DATA, OR BUSINESS REPUTATION), ARISING UNDER OR DIRECTLY OR INDIRECTLY RELATING TO THIS CONTRACT OR THE SUBJECT MATTER HEREOF, REGARDLESS OF WHETHER SUCH DAMAGES ARE BASED IN CONTRACT, EQUITY, OR WHEN THE DAMAGES ARE ALLEGED TO BE CAUSED BY TORTIOUS CONDUCT, BREACH OF WARRANTY OR ANY OTHER THEORY, WHATSOEVER, AND REGARDLESS OF WHETHER SUCH PARTY HAS BEEN ADVISED OF, KNEW OF, OR SHOULD HAVE KNOWN OF THE POSSIBILITY THAT SUCH DAMAGES COULD OCCUR.

(2) [*], IN NO EVENT SHALL CONTRACTOR’S TOTAL AGGREGATE LIABILITY FOR EACH VESSEL EXCEED THE GREATER OF [*] OR [*]; PROVIDED , HOWEVER , THAT THE FOREGOING LIMITATION OF LIABILITY SHALL NOT APPLY TO ANY DAMAGES CAUSED BY ANY MATERIAL MISREPRESENTATION OR FRAUDULENT CONDUCT OF CONTRACTOR. THE FOREGOING LIMITATION OF CONTRACTOR’S LIABILITY SHALL REMAIN IN FULL FORCE AND EFFECT REGARDLESS OF EITHER PARTY’S REMEDIES AVAILABLE UNDER THIS CONTRACT, AT LAW OR IN EQUITY. CONTRACTOR HEREBY REPRESENTS AND WARRANTS TO PURCHASER THAT [*].

(3) EXCEPT FOR (I) THE PAYMENT OF MILESTONE PAYMENTS FOR CONTRACT WORK THAT HAS BEEN COMPLETED BY CONTRACTOR, OR (II) THE PAYMENT OF QUARTERLY PAYMENTS, IN NO EVENT SHALL PURCHASER’S TOTAL AGGREGATE LIABILITY [*] FOR EACH VESSEL EXCEED THE GREATER OF [*] OR [*] PROVIDED , HOWEVER , THAT THE FOREGOING LIMITATION OF LIABILITY SHALL NOT APPLY TO ANY DAMAGES CAUSED BY ANY MATERIAL MISREPRESENTATION OR FRAUDULENT CONDUCT OF PURCHASER. THE FOREGOING LIMITATION OF PURCHASER’S LIABILITY SHALL REMAIN IN FULL

to implement such remedy) immediately exercise any and/or all of the following rights and remedies.

(1) Completion and Sale of Vessel . Contractor may terminate this Contract and thereafter Contractor shall be entitled to continue construction of any Vessel not previously delivered to Purchaser and to sell such Vessel while Contract Work is in process or after completion.

(i) Pending such sale, Contractor shall be entitled to retain any initial, quarterly and milestone payments already paid. Any such sale may be effected by Contractor, either by public auction or by private contract, on such terms and conditions as Contractor may see fit, but Contractor shall be bound in good faith to secure the best price obtainable under the circumstances. Upon the effective time and date of any such sale, all liens and security interests of Purchaser in the Collateral (as defined in the TITLE, RISK OF LOSS, AND PROPERTY INTERESTS Article 27) shall automatically terminate and be of no further force and effect. Purchaser hereby authorizes Contractor to file all documents necessary to evidence the release of its liens in the Collateral (and by its acceptance of any assignment of the security interest in the Collateral, any assignee of Purchaser agrees to such automatic release of liens and the filing of termination statements evidencing the same).

(ii) In the event Contractor sells a Vessel, Contractor thereafter [*].

(iii) In the event that Contractor elects to complete any Vessel, Contractor may negotiate the revival of this Contract with Purchaser at any time before the sale of the Vessel upon Purchaser’s providing evidence satisfactory to Contractor that the events causing Purchaser’s default have been remedied.

(2) Abandonment of Construction . Contractor may terminate this Contract and thereafter may abandon construction of any Vessel that has been not previously delivered to Purchaser and sell such Vessel in its state of completion at the time of abandonment of construction. Any such sale may be effected by Contractor, either by public auction or by private contract, on such terms and conditions as

Contractor may see fit, but Contractor shall be bound in good faith to secure the best price obtainable under the circumstances.

(i) Contractor shall notify Purchaser in writing of its election to abandon and sell and shall thereafter [*].

(ii) Upon the effective time and date of any such abandonment and sale, all liens and security interests of Purchaser in the Collateral (as defined in Article 27) shall automatically terminate and be of no further force and effect and Purchaser hereby authorizes Contractor to file all documents necessary to evidence the release such liens in the Collateral (and by its acceptance of any assignment of the security interest in the Collateral, any assignee of Purchaser agrees to such automatic release of liens and the filing of termination statements evidencing the same).

(3) Transfer of Purchaser’s Rights Under This Contract . Contractor may amend, transfer and assign Purchaser’s right, title and interest in and to this Contract, including the right to receive Delivery of and transfer title to such Vessels upon their Delivery, in a transaction on arm’s length terms, to a third party that will perform and assume all of the Purchaser’s obligations under this Contract as so amended, transferred or assigned, such amendment, transfer and assignment to be in accordance with provisions of this paragraph (b)(3) and otherwise in accordance with applicable law. Contractor shall be bound in good faith to secure the best price obtainable under the circumstances.

(i) Any Assignment entered into in accordance with this paragraph (b)(3) may only be effected following the consummation of an amendment, transfer or assignment process conducted in all respects in a commercially reasonable manner in accordance with applicable law, and upon consummation of any such Assignment and the payment of the proceeds referenced below to Purchaser, the

transferee shall be entitled to all rights and benefits of this Contract and the Purchaser shall not have any further interests or rights in and to this Contract as so amended by the Assignment.

(ii) Contractor shall deliver written notice to Purchaser of its intent to pursue an assignment of this Contract in accordance with the terms of this paragraph (b)(3) of this Article (the “Assignment Notice”).

(iii) [*].

(iv) Nothing contained in this paragraph (b)(3), shall prohibit Contractor at any time prior to any such Assignment from terminating this Contract and pursuing its remedies under paragraphs (b)(1) and (b)(2) of this Article to the extent available.

(vi) Upon the effective time and date of any Assignment, all liens and security interests of Purchaser in the Collateral (as defined in Article 27) shall automatically terminate and be of no further force and effect and Purchaser hereby authorizes Contractor to file all documents necessary to evidence the release of its liens in the Collateral (and by its acceptance of any assignment of the security interest in the Collateral, any assignee of Purchaser agrees to such automatic release of liens and the filing of termination statements evidencing the same).

(c) Power of Attorney . Purchaser hereby appoints Contractor as its attorney-in-fact following the occurrence and during the continuance of any event of default specified in paragraphs (a)(1) through (3) of this Article 25, solely to take all actions necessary or desirable to effect Contractor’s rights and remedies as described in paragraph (b) of this Article 25.

National Steel and Shipbuilding Company

Attention: Charles I. Zigelman

Director, Contracts and Estimating

2798 Harbor Drive

San Diego, California 92113


Telephone:	(619) 544-7608


Fax:	(619) 544-8880

or to such Party at such other address or addresses as either Party may later specify in writing to the other Party.

(c) Technical Engineering Communications . All technical engineering communications originated by Contractor, including submissions pursuant to the SUBMISSION OF DESIGN PRODUCTS Article 12, shall be transmitted by authorized Contractor personnel to personnel of Purchaser designated in writing pursuant to this Article. All technical engineering communications originated by Purchaser shall be transmitted by authorized personnel of Purchaser to personnel of Contractor designated in writing pursuant to this Article.

(1) The personnel authorized to transmit and receive such communications shall be designated in writing by each Party to the other pursuant to paragraph (a) of this Article.

(2) Technical communications shall be used for such purposes as clarification or interpretation of a requirement of the Specifications, providing design information as required by the SUBMISSION OF DESIGN PRODUCTS Article 12, or discussion of an alleged Deficiency pursuant to the INSPECTION Article 14. Such technical communications between the Parties, however, shall not be deemed to change or modify the terms of this Contract, including the Specifications.

43 OPTION VESSEL

(a) Option Vessel . Contractor hereby grants Purchaser an option to purchase one additional Vessel (“Option Vessel 1”) within 80 days of the effective date of Amendment 2 (“Option Period”). Provided Purchaser is not in default as described in the DEFAULT OF PURCHASER AND CONTRACTOR'S REMEDIES Article 25, Purchaser may, by written notice to Contractor and prior to the expiration of the Option Period, purchase Option Vessel 1 on the terms and conditions of this Contract, at the price set forth in the PRICING Article 3, and with a Vessel Contract Delivery Date set forth in the STATEMENT OF WORK Article 1. Upon Purchaser’s notification of option exercise, the initial payment set forth in the PAYMENTS Article 4(c)(4) shall be considered an advance payment with respect to the Contract Base Price and the payment terms set forth in PAYMENTS Article 4(e) will come into full force and effect.

44 INTERPRETATION

(a) Entire Agreement . This Contract, together with its Exhibits and other documents incorporated herein, including the Specifications, sets forth the entire

agreement and understanding of Purchaser and Contractor relating to the subject matter contained herein and supersedes all prior discussions and agreements between Purchaser and Contractor. This Contract may be modified or amended only in a writing signed by both Parties.

(b) Benefit of Parties . This Contract shall be binding upon the Parties hereto and shall inure to the benefit of and be enforceable by the Parties hereto and their respective successors and assigns.

(c) Interpretation . If any one or more of the provisions of this Contract is found to be invalid, the remaining provisions shall not be affected, and this Contract shall be interpreted as if not containing such invalid provisions. This Contract shall be

59a

interpreted without regard to which Party is deemed to have drafted the Contract. Article and paragraph headings are for administrative convenience only and shall not be used to interpret this Contract.

45 PARENT COMPANY GUARANTEES

(a) No later than [*] Business Days after the Effective Date Contractor shall provide to Purchaser a Guaranty by General Dynamics Corporation of Contractor’s obligations.

(b) No later than [*] Business Days after the Effective Date Purchaser shall provide to Contractor a Guaranty by SEACOR Holdings Inc. of Purchaser’s obligations.

(c) The Parties agree that their respective Parent Guarantees are applicable to all amendments to this Contract, including without limitation Amendment 2. For the avoidance of doubt, however, the Parties shall use reasonable efforts to amend their respective Parent Company Guarantees to specifically reference Amendment 2.

46 EXHIBITS

There are attached hereto and incorporated by reference as though fully set forth herein the following exhibits:

Exhibit A: RESERVED

Exhibit B: Contract Change Form

Exhibit C: Guaranty Agreements

47 DEFINITIONS

As used in this Agreement, the following terms have the meanings specified below:

“Business Day” shall have the meaning specified in Article 37(c).

“Change” shall mean a departure from the requirements of the Specifications or a change to the Contract Work as described in Article 6.

“Contract” shall have the meaning specified in the preamble of this Contract.

“Contract Base Price” shall mean the individual Vessel Contract Prices as set out in the table in Article 3(b).

“Contract Change” shall mean an adjudicated Change to the Contract as described in Article 6 and Exhibit B.

“Contract Price” shall mean a firm fixed price in U.S. Dollars that is equal to the Contract Base Price as adjusted from time to time pursuant to the terms of this Contract, which shall represent Contractor’s consideration for the Contract Work.

60a

“Guaranty Period” shall mean the 12 months following the date of Delivery of a Vessel, during which the Contractor guarantees against all Deficiencies that are discovered, as described in Article 19.

“Jones Act” shall have the meaning specified in the first recital of this Contract.

“Maker’s List” shall have the meaning specified in Article 20.

“Milestone Payment” shall have the meaning specified in Article 4(d)(2).

“Milestone Schedule” shall mean the schedule of events of Contract Work that permit invoicing by Contractor as set forth in Article 4(d)(2).

“Minor Items” shall mean items that do not affect the commercial utility or safe operation of the Vessel or prevent or otherwise limit the ability of the Vessel to trade.

“Option Vessel 1” shall have the meaning specified in Article 43(a).

“Purchaser’s Representatives” shall mean the on-site representatives who shall be and act as agents of Purchaser, and on behalf of Purchaser, having the authority to make decisions or express opinions to Contractor promptly on all problems arising during the course of, or in connection with, construction of the Vessels in a manner that ensures utmost cooperation with Contractor in the construction process.

“Quarterly Payments” shall have the meaning specified in Article 4(e).

“Regulatory Bodies” shall mean the Regulatory Requirements that are administered by federal, state and local government agencies, organizations, societies, other authoring organizations of Regulatory Requirements and ABS.

“Regulatory Requirements” shall mean the Contract Work, which is subject to certain state, federal and international conventions, statutes, regulations, classification rules, standards, interpretations, and practices.

“Selected Maker’s Plan” shall mean the list of equipment that has been selected by Contractor from the Maker’s List for use in construction of any Vessel.

“Specifications” shall mean the Contract design requirements for construction of the Vessels, including the General Arrangement drawing, entitled "SPECIFICATIONS, NASSCO Number TE2013-FS-RB," dated September 10, 2013, published by DSEC and Contractor and approved by Purchaser.

“Substantially Complete” shall mean complete within the requirements of this Contract but for Minor Items, with no outstanding regulatory or ABS requirements.

“Vessel” or “Vessels” shall have the meaning specified in the first recital of this Contract. For the avoidance of doubt, Vessel or Vessels shall include all vessels constructed under this Contract including without limitation Option Vessel 1 if the option is exercised by Purchaser.

“Vessel Contract Delivery Date” shall mean the tender of each Vessel to Purchaser on the respective delivery dates for each Vessel, which may be extended by mutual

Exhibit 10.26

Compensation Arrangements for the Executive Officers

Set forth below is a summary of the compensation by SEACOR Holdings Inc. (the “Company”) to its executive officers in their positions as of the date of filing of the Company's Annual Report on Form 10-K for the year ended December 31, 2013 (the “Form 10-K”). All of the Company's executive officers are at-will employees whose compensation and employment status may be changed at any time in the discretion of the Company's Board of Directors.

Base Salary. Effective January 1, 2014, the executive officers are scheduled to receive the following annual base salaries in their current positions:



Name and Current Position	Base Salary
Charles Fabrikant, Executive Chairman of the Board	$	700,000
Oivind Lorentzen, President and Chief Executive Officer	$	700,000
Dick Fagerstal, Senior Vice President, Corporate Development and Finance	$	350,000
Paul Robinson, Senior Vice President, General Counsel and Secretary	$	450,000
Richard Ryan, Senior Vice President and Chief Financial Officer	$	350,000
Matthew Cenac, Vice President and Chief Accounting Officer	$	300,000

Cash Bonus and Share Incentive Plan. In their current positions, the executive officers are eligible to:


•	Receive an annual cash incentive award subject to the discretion of the Compensation Committee of the Board of Directors.


•	Participate in incentive programs, which currently involve awards of restricted stock and stock options pursuant to SEACOR Holdings Inc.'s 2007 Share Incentive Plan (Exhibit 10.29 to the Company's Form 10-K for the fiscal year ended December 31, 2007).

Benefit Plans and Other Arrangements. In their current positions, the executive officers are eligible to participate in the Company's broad‑based benefit programs generally available to its salaried employees, including health, disability and life insurance programs, a qualified 401(k) plan, and the employee stock purchase plan.

Exhibit 10.27

Compensation of Non-Employee Directors

Directors who are not officers of SEACOR Holdings Inc. (the “Company”) receive an annual retainer of $52,000 and $2,000 for every regular and special Board and Committee meeting they attend via telephone and $4,000 for every regular and special Board and Committee meeting they attend in person.

Each member of the Board who is not an employee of the Company is also granted options and Common Stock pursuant to the SEACOR Holding Inc.'s 2007 Share Incentive Plan (Exhibit 10.29 to the Company's Form 10-K for the fiscal year ended December 31, 2007).

Exhibit 21.1

SEACOR HOLDINGS INC.

MAJORITY OWNED SUBSIDIARIES

AS OF DECEMBER 31, 2013



		Jurisdiction of Incorporation/Formation
Arawak Line (T&C) Ltd.		Turks & Caicos
Arctic Leasing LLC		Delaware
Boston Putford Offshore Safety Limited		England
CapSea Holdings LLC		Delaware
Caribbean Tugz LLC		Delaware
Caribship LLC		Delaware
CLEANCOR Holdings LLC		Delaware
C-Lift LLC		Delaware
C-Terms Partners d/b/a C-Term Partners		Florida
Commodity Distributors LLC		Delaware
CTV Crewing Services Ltd		England and Wales
Energy Logistics, Inc.		Delaware
Erie Trader II LLC		Delaware
F2 SEA Inc.		Delaware
G & G Shipping Holdings LLC		Delaware
G&G Payroll Management LLC		Marshall Islands
G&G Shipping, LLC		Delaware
Galaxie Offshore Barges LLC		Delaware
Galaxie Offshore L.L.C.		Louisiana
Gateway Terminals LLC		Delaware
Gem Shipping Inc.		Delaware
Gem Shipping Ltd.		Cayman Islands
Gilbert Cheramie Boats L.L.C.		Louisiana
Graham Offshore Barges LLC		Delaware
Graham Offshore LLC		Delaware
Graham Offshore Tugs LLC		Delaware
Illinois Corn Processing Holdings Inc.		Delaware
Illinois Corn Processing, LLC		Delaware
Industrial Equipment Repair, Inc.		Florida
Infraestructura Del Mar, S. de R.L. de C.V.		Mexico
Kendall 137 Avenue Holdings LLC		Delaware
Kinsman Lines, Inc.		Delaware
Liberty Services, Inc.		Louisiana
Lightship Tankers I LLC		Delaware
Lightship Tankers II LLC		Delaware
Lightship Tankers III LLC		Delaware
Lightship Tankers IV LLC		Delaware
Lightship Tankers V LLC		Delaware
Lone Star Marine Services, Inc.		Florida
Maranta S.A.		Argentina
McCall Boat Rentals Ocean Barges LLC		Delaware
McCall's Boat Rentals Barges LLC		Delaware



		Jurisdiction of Incorporation/Formation
McCall's Boat Rentals L.L.C.		Louisiana
Naviera Central S.A.		Colombia
ORM Holdings Inc.		Delaware
Pantagro-Pantanal Produtos Agropecuarios Ltda.		Brazil
Phoenix Crew Management LLC		Delaware
Port Dania Holdings I LLC		Delaware
Port Dania Holdings II LLC		Delaware
SAN Offshore Marine Inc.		Delaware
SB Erie Shipyard LLC		Delaware
SCF Barge Line LLC		Delaware
SCF Boats LLC		Delaware
SCF Colombia (MI) LLC		Marshall Islands
SCF Colombia (US) LLC		Delaware
SCF Colombia Fluvial S A S		Colombia
SCF Fleeting LLC		Delaware
SCF International LLC		Marshall Islands
SCF Investments LLC		Marshall Islands
SCF Lewis and Clark Fleeting LLC		Delaware
SCF Lewis and Clark Terminals LLC d/b/a Bulk Service Granite City d/b/a Bulk Service Tyler Street d/b/a Mid Coast Terminal		Delaware
SCF Marine Inc.		Delaware
SCF Memphis Development LLC		Delaware
SCF Real Estate LLC		Delaware
SCF Riverport LLC		Delaware
SCF Services LLC		Delaware
SCF Shipyards LLC		Delaware
SCF Terminals LLC		Delaware
SCF Towboat III, L.P.		Delaware
SCF Waxler Barge Line LLC		Delaware
SCF Waxler Marine LLC d/b/a Waxler Transportation Company d/b/a SCF Liquids		Delaware
SCF/JAR Investments LLC		Delaware
SCFM Towing LLC		Delaware
Sea Mar Offshore LLC		Delaware
Seabulk America LLC		Delaware
Seabulk Angola Holdings, Inc.		Marshall Islands
Seabulk Challenge LLC		Delaware
Seabulk Chemical Transport Inc.		Delaware
Seabulk Command, Inc.		Marshall Islands
Seabulk Congo, Inc.		Liberia
Seabulk E. G. Holdings, Inc.		Marshall Islands
Seabulk Eagle II, Inc.		Marshall Islands
Seabulk Energy Transport LLC		Delaware
Seabulk Freedom, Inc.		Marshall Islands
Seabulk General Partner LLC		Delaware
Seabulk Ghana Holdings Inc.		Marshall Islands



		Jurisdiction of Incorporation/Formation
Seabulk Global Carriers, Inc.		Marshall Islands
Seabulk Global Transport, Inc.		Marshall Islands
Seabulk International, Inc. d/b/a Port Canaveral Towing d/b/a Port Everglades Towing		Delaware
Seabulk Island Transport, Inc.		Marshall Islands
Seabulk Jasper, Inc.		Marshall Islands
Seabulk Lincoln, Inc.		Marshall Islands
Seabulk Marine International Inc.		Delaware
Seabulk Marine Services, Inc.		Florida
Seabulk Master, Inc.		Marshall Islands
Seabulk Ocean Transport, Inc.		Florida
Seabulk Offshore Dubai, Inc.		Florida
Seabulk Offshore Equatorial Guinea, S.L.		Equatorial Guinea
Seabulk Offshore Holdings, Inc.		Marshall Islands
Seabulk Offshore International FZE		United Arab Emirates
Seabulk Offshore International, Inc.		Florida
Seabulk Offshore LLC		Delaware
Seabulk Offshore Marine Management, Inc.		Liberia
Seabulk Offshore Operators Trinidad Limited		Trinidad and Tobago
Seabulk Offshore Operators, Inc.		Florida
Seabulk Offshore Venture Holdings Inc.		Marshall Islands
Seabulk Offshore Vessel Holdings Inc.		Marshall Islands
Seabulk Operators, Inc.		Florida
Seabulk Overseas Transport Investments Inc.		Marshall Islands
Seabulk Overseas Transport, Inc.		Marshall Islands
Seabulk Partners LP		Delaware
Seabulk Petroleum Transport LLC		Delaware
Seabulk South Atlantic LLC		Delaware
Seabulk Tankers, Inc.		Delaware
Seabulk Tims I, Inc.		Marshall Islands
Seabulk Towing Services, Inc. d/b/a Seabulk Towing		Florida
Seabulk Towing, Inc. d/b/a Port Canaveral Towing d/b/a Port Everglades Towing d/b/a Seabulk Towing of Port Canaveral d/b/a Seabulk Towing of Port Everglades d/b/a Seabulk Towing of Tampa d/b/a Tampa Bay Towing d/b/a Mobile Bay Towing		Delaware
Seabulk Transmarine II, Inc.		Florida
Seabulk Transport Inc.		Delaware
SEACAP (MI) Inc.		Marshall Islands
Seacap APT Leasing Inc.		Delaware
SEACAP AW LLC		Marshall Islands
SEACAP Leasing Associates LLC		Delaware
SEACAP Leasing Associates II LLC		Delaware
SEACAP Leasing Associates III LLC		Delaware
SEACAP Leasing Associates IV LLC		Delaware
SEACAP Leasing Associates V LLC		Delaware



		Jurisdiction of Incorporation/Formation
SEACAP Leasing Associates VI LLC		Delaware
SEACAP Leasing Associates VII LLC		Delaware
Seacap Leasing Associates VIII LLC		Delaware
SEACAP Leasing Associates IX LLC		Delaware
SEACAP Leasing Associates X LLC		Delaware
SEACOR (GP) KS		Norway
SEACOR Acadian Companies Inc.		Delaware
SEACOR Acadian Marine LLC		Delaware
SEACOR Asset Management LLC		Delaware
SEACOR Bulk Carriers Inc.		Marshall Islands
SEACOR Capital (Asia) Limited		Hong Kong
SEACOR Capital (Singapore) Pte. Ltd.		Singapore
SEACOR Capital (UK) Limited		England
SEACOR Capital Corporation		Delaware
SEACOR Colombia Fluvial (MI) LLC		Marshall Islands
SEACOR Commodity Trading LLC		Delaware
SEACOR Commodity Trading S.R.L.		Argentina
SEACOR Communications Inc.		Delaware
SEACOR Container Lines LLC		Delaware
SEACOR CTU Inc.		Delaware
SEACOR Eagle LLC		Delaware
SEACOR Energy Group Inc.		Delaware
SEACOR Energy Holdings Inc.		Delaware
SEACOR Environmental Services Inc.		Delaware
SEACOR Flex AS		Norway
SEACOR Gas Transport Corporation		Marshall Islands
SEACOR Hawk LLC		Delaware
SEACOR Inland River Transport Inc.		Delaware
SEACOR International Chartering Inc.		Delaware
SEACOR LB Holdings LLC		Delaware
SEACOR LB Offshore LLC		Delaware
SEACOR LB Realty LLC		Delaware
SEACOR Liftboats LLC		Delaware
SEACOR Management Services Inc.		Delaware
SEACOR Marine (Asia) Pte. Ltd.		Singapore
SEACOR Marine (Bahamas) Inc.		Marshall Islands
SEACOR Marine (Cyprus) Ltd.		Cyprus
SEACOR Marine (International) Limited		England
SEACOR Marine (Nigeria) L.L.C.		Louisiana
SEACOR Marine Australia Pty Ltd		Australia
SEACOR Marine AZ LLC		Azerbaijan
SEACOR Marine Capital Inc.		Delaware
SEACOR Marine Guernsey Ltd.		Guernsey
SEACOR Marine International 2 LLC		Delaware
SEACOR Marine International Barges LLC		Delaware
SEACOR Marine International LLC		Delaware
SEACOR Marine LLC		Delaware
SEACOR Marine Waxler Boats LLC		Delaware



		Jurisdiction of Incorporation/Formation
SEACOR Merchant LLC		Delaware
SEACOR Meridian Inc.		Delaware
SEACOR Ocean Boats Inc.		Delaware
SEACOR Ocean Investments LLC		Delaware
SEACOR Ocean Transport Inc.		Delaware
SEACOR Offshore (Marshall Islands) Ltd.		Marshall Islands
SEACOR Offshore (VZ) LLC		Delaware
SEACOR Offshore Abu Dhabi, Inc.		Florida
SEACOR Offshore Barges LLC		Delaware
SEACOR Offshore do Brasil Ltda.		Brazil
SEACOR Offshore Dubai (L.L.C.)		United Arab Emirates
SEACOR Offshore Freight Trading Ltd.		Marshall Islands
SEACOR Offshore LLC		Delaware
SEACOR Offshore Ocean Barges LLC		Delaware
SEACOR Offshore Services Inc.		Delaware
SEACOR OSV Partners GP LLC		Delaware
SEACOR OSV Investments LLC		Delaware
SEACOR Payroll Management LLC		Delaware
SEACOR Rail Management & Leasing LLC		Delaware
SEACOR Real Estate Development LLC		Delaware
SEACOR Real Estate Holdings Inc.		Delaware
SEACOR Response Inc.		Delaware
SEACOR Senegal Sarl		Senegal
SEACOR Sugar LLC		Delaware
SEACOR Supplyships 1 AS		Norway
SEACOR Tankers Holdings Inc.		Delaware
SEACOR Tankers Inc.		Delaware
SEACOR Vision Barges LLC		Delaware
SEACOR Vision Ocean Barges LLC		Delaware
SEACOR Worldwide (AZ) Inc.		Delaware
SEACOR Worldwide (Ghana) LLC		Delaware
SEACOR Worldwide Barges LLC		Delaware
SEACOR Worldwide Inc.		Delaware
SEACOR Worldwide Ocean Barges LLC		Delaware
SEACOR‑SMIT Offshore (International) Ltd.		Marshall Islands
SeaDor Holdings LLC		Delaware
Seaspraie Holdings LLC		Delaware
SEA-Vista I LLC		Delaware
SEA-Vista II LLC		Delaware
SEA-Vista III LLC		Delaware
SEA-Vista Newbuild I LLC		Delaware
SEA-Vista Newbuild II LLC		Delaware
SEA-Vista Newbuild III LLC		Delaware
SEA-Vista Newbuild IV LLC		Delaware
SIT Payroll Management LLC		Marshall Islands
Sociedad Portuaria Puerto Wilches Mutiproposito SA		Colombia
South of Fleet Street, LLC		Tennessee
South Sea Serviços Marítimos Ltda.		Brazil



		Jurisdiction of Incorporation/Formation
Southern Crewing Services Limited		England
Soylutions LLC		Illinois
Stirling Marine Limited		Scotland
Stirling Offshore Limited		Scotland
Stirling Shipping Company Limited		Scotland
Stirling Shipping Holdings Limited		Scotland
Storm Shipping Inc.		Delaware
Trailer Bridge Holdings LLC		Delaware
V & A Commodity Traders, Inc.		New York
V&A Commodity Traders Importação e Exportação do Brasil Ltda.		Brazil
V&A Commodity Traders LLC		Delaware
V&A Commodity Traders Sàrl		Geneva
VEESEA Holdings Inc.		Delaware
VENSEA Marine, S.R.L.		Venezuela
Vensea Offshore Ltd.		Bahamas
WCRY LLC		Illinois
Weston Barge Line, Inc.		Delaware
Wheeler Creek Grain LLC		Illinois
Windcat Crewing Service B.V.		The Netherlands
Windcat Workboats B.V.		The Netherlands
Windcat Workboats Holdings Ltd		England and Wales
Windcat Workboats International Limited		Guernsey
Windcat Workboats Limited		England and Wales
Yarnell Offshore (MI) Ltd.		Marshall Islands

SEACOR HOLDINGS INC.

50% OR LESS OWNED SUBSIDIARIES

AS OF DECEMBER 31, 2013



		Jurisdiction of Incorporation/Formation
Aptwater, Inc.		Delaware
AS Offshore Ghana Services Limited		Ghana
Asian Sky Group Limited		Hong Kong
Avion Pacific Limited		Hong Kong
Bunge-SCF Grain, LLC		Delaware
CLEANCOR Energy Solutions LLC		Delaware
Compania Empresarial Del Mar Y Navegacion, S.A. de C.V.		Mexico
Concord LPG Holdings LLC		Marshall Islands
Dorian LPG Ltd.		Marshall Islands
Dynamic Offshore Drilling Limited		Cyprus
Eagle Fabrication, LLC		Illinois
FRS Windcat Offshore Logistics GmbH		Germany
GEPBULK S.L.		Equatorial Guinea
GTI AW I		Republic of Mauritius
Hawker Pacific Airservices Limited		Hong Kong
Magsaysay-Seacor Inc.		Philippines
Mantenimiento Express Maritimo S.A.P.I. de C.V.		Mexico
Marine Seacor Pte. Ltd.		Singapore
Nautical Power (International) LLC		Marshall Islands
Nautical Power, L.L.C.		Delaware
SCF Bunge Marine LLC		Delaware
SCFCo Holdings LLC		Marshall Islands
Sea Treasure Shipping Ltd.		Liberia
Seabulk Offshore de Angola, Lda.		Angola
Seabulk Offshore de Mexico, S.A. de C.V.		Mexico
SEA-CAT CREWZER II LLC		Marshall Islands
SEA-CAT CREWZER LLC		Delaware
SEACOR Grant (GP) AS		Norway
SEACOR Grant DIS		Norway
SEACOR OSV Partners I LP		Delaware
SEACOR Supplyships 1 KS		Norway
SeaJon LLC		Delaware
SeaTiger Asset Management LLC		Marshall Islands
SeaTiger Holdings LLC		Marshall Islands
ShipServ Inc.		Delaware
Smit-Lloyd Matsas (Hellas) Shipping Co. S.A.		Greece
Societe de Gestion des Services Portuaires		Republic of the Congo
Svitzer Idku (S.A.E)		Egypt
Trailer Bridge, Inc.		Delaware
Witt O'Brien's, LLC		Delaware
Zhuhai SEACOR/Avion Logistics Company Limited		People's Republic of China

EXHIBIT 23.1

Consent of Independent Registered Public Accounting Firm

We consent to the incorporation by reference in the following Registration Statements:


(1)	Registration Statement (Form S-3 No. 333-05483) of SEACOR Holdings Inc.,


(2)	Registration Statement (Form S-3 No. 333-11705) of SEACOR Holdings Inc.,


(3)	Registration Statement (Form S-3 No. 333-20921) of SEACOR Holdings Inc.,


(4)	Registration Statement (Form S-3 No. 333-22249) of SEACOR Holdings Inc.,


(5)	Registration Statement (Form S-3 No. 333-37492) of SEACOR SMIT Inc.,


(6)	Registration Statement (Form S-3 No. 333-53326) of SEACOR SMIT Inc.,


(7)	Registration Statement (Form S-3 No. 333-101373) of SEACOR SMIT Inc.,


(8)	Registration Statement (Form S-4 No. 333-124232) of SEACOR Holdings Inc.,


(9)	Registration Statement (Form S-4 No. 333-38841) of SEACOR SMIT Inc.,


(10)	Registration Statement (Form S-4 No. 333-53320) of SEACOR SMIT Inc.,


(11)	Registration Statement (Form S-8 No. 333-12637) pertaining to the 1992 Non-qualified Stock Option Plan and 1996 Share Incentive Plan of SEACOR Holdings Inc.,


(12)	Registration Statement (Form S-8 No. 333-105340) pertaining to the 2003 Share Incentive Plan of SEACOR SMIT Inc.,


(13)	Registration Statement (Form S-8 No. 333-105346) pertaining to the 2003 Share Incentive Plan of SEACOR SMIT Inc.,


(14)	Registration Statement (Form S-8 No. 333-143066) pertaining to the 2007 Share Incentive Plan of SEACOR Holdings Inc.,


(15)	Registration Statement (Form S-8 No. 33-179655) pertaining to the SEACOR Holdings Inc. 2009 Employee Stock Purchase Plan,


(16)	Registration Statement (Form S-8 No. 33-179656) pertaining to the SEACOR Holdings Inc. 2007 Share Incentive Plan, and


(17)	Registration Statement (Form S-8 No. 333-182082) pertaining to the SEACOR Holdings Inc. 2007 Share Incentive Plan;

of our reports dated March 3, 2014 , with respect to the consolidated financial statements and schedule of SEACOR Holdings Inc., and the effectiveness of internal control over financial reporting of SEACOR Holdings Inc., included in this Annual Report (Form 10-K) of SEACOR Holdings Inc. for the year ended December 31, 2013 .



		/s/ Ernst & Young LLP
		Certified Public Accountants

Miami, Florida
March 3, 2014

Exhibit 31.1

CERTIFICATION

I, Charles Fabrikant, certify that:


1.	I have reviewed this annual report on Form 10-K of SEACOR Holdings Inc.;


2.	Based on my knowledge, this report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this report;


3.	Based on my knowledge, the financial statements and other financial information included in this report, fairly present in all material respects the financial condition, results of operations and cash flows of the registrant as of, and for, the periods presented in this report;


4.	The registrant's other certifying officer and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in Exchange Act Rules 13a-15(e) and 15d-15(e)) and internal control over financial reporting (as defined in Exchange Act Rules 13a-15(f) and 15d-15(f)) for the registrant and have:


a)	Designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under our supervision, to ensure that material information relating to the registrant, including its consolidated subsidiaries, is made known to us by others within those entities, particularly during the period in which this report is being prepared;


b)	Designed such internal control over financial reporting, or caused such internal control over financial reporting to be designed under our supervision, to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles;


c)	Evaluated the effectiveness of the registrant's disclosure controls and procedures and presented in this report our conclusions about the effectiveness of the disclosure controls and procedures as of the end of the period covered by this report based on such evaluation; and


d)	Disclosed in this report any change in the registrant's internal control over financial reporting that occurred during the registrant's most recent fiscal quarter (the registrant's fourth fiscal quarter in the case of an annual report) that has materially affected, or is reasonably likely to materially affect, the registrant's internal control over financial reporting; and


5.	The registrant's other certifying officer and I have disclosed, based on our most recent evaluation of internal control over financial reporting, to the registrant's auditors and the audit committee of the registrant's board of directors (or persons performing the equivalent functions):


a)	All significant deficiencies and material weaknesses in the design or operation of internal control over financial reporting which are reasonably likely to adversely affect the registrant's ability to record, process, summarize and report financial information; and


b)	Any fraud, whether or not material, that involves management or other employees who have a significant role in the registrant's internal control over financial reporting.



Date:	March 3, 2014

/ S / C HARLES F ABRIKANT
Name:	Charles Fabrikant
Title:	Executive Chairman of the Board (Principal Executive Officer)

Exhibit 31.2

CERTIFICATION

I, Richard Ryan, certify that:


1.	I have reviewed this annual report on Form 10-K of SEACOR Holdings Inc.;


2.	Based on my knowledge, this report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this report;


3.	Based on my knowledge, the financial statements and other financial information included in this report, fairly present in all material respects the financial condition, results of operations and cash flows of the registrant as of, and for, the periods presented in this report;


4.	The registrant's other certifying officer and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in Exchange Act Rules 13a-15(e) and 15d-15(e)) and internal control over financial reporting (as defined in Exchange Act Rules 13a-15(f) and 15d-15(f)) for the registrant and have:


a)	Designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under our supervision, to ensure that material information relating to the registrant, including its consolidated subsidiaries, is made known to us by others within those entities, particularly during the period in which this report is being prepared;


b)	Designed such internal control over financial reporting, or caused such internal control over financial reporting to be designed under our supervision, to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles;


c)	Evaluated the effectiveness of the registrant's disclosure controls and procedures and presented in this report our conclusions about the effectiveness of the disclosure controls and procedures as of the end of the period covered by this report based on such evaluation; and


d)	Disclosed in this report any change in the registrant's internal control over financial reporting that occurred during the registrant's most recent fiscal quarter (the registrant's fourth fiscal quarter in the case of an annual report) that has materially affected, or is reasonably likely to materially affect, the registrant's internal control over financial reporting; and


5.	The registrant's other certifying officer and I have disclosed, based on our most recent evaluation of internal control over financial reporting, to the registrant's auditors and the audit committee of the registrant's board of directors (or persons performing the equivalent functions):


a)	All significant deficiencies and material weaknesses in the design or operation of internal control over financial reporting which are reasonably likely to adversely affect the registrant's ability to record, process, summarize and report financial information; and


b)	Any fraud, whether or not material, that involves management or other employees who have a significant role in the registrant's internal control over financial reporting.



Date:	March 3, 2014

/ S / R ICHARD R YAN
Name:	Richard Ryan
Title:	Senior Vice President and Chief Financial Officer (Principal Financial Officer)

Exhibit 32.1

CERTIFICATION

PURSUANT TO 18 U.S.C. SECTION 1350,

AS ADOPTED BY SECTION 906 OF THE SARBANES-OXLEY ACT OF 2002

I, Charles Fabrikant, as Principal Executive Officer of SEACOR Holdings Inc. (the “ Company ”), certify, pursuant to 18 U.S.C. § 1350, as adopted by Section 906 of the Sarbanes-Oxley Act of 2002, that to my knowledge:

(1) the accompanying Annual Report on Form 10-K for the period ending December 31, 2013 as filed with the U.S. Securities and Exchange Commission (the “ Report ”) fully complies with the requirements of Section 13(a) or 15(d) of the Securities Exchange Act of 1934, as amended; and

(2) the information contained in the Report fairly presents, in all material respects, the financial condition and results of operations of the Company.

Dated: March 3, 2014

/ S / C HARLES F ABRIKANT

Charles Fabrikant

Executive Chairman of the Board

(Principal Executive Officer)

Exhibit 32.2

CERTIFICATION

PURSUANT TO 18 U.S.C. SECTION 1350,

AS ADOPTED BY SECTION 906 OF THE SARBANES-OXLEY ACT OF 2002

I, Richard Ryan, as Principal Financial Officer of SEACOR Holdings Inc. (the “ Company ”), certify, pursuant to 18 U.S.C. § 1350, as adopted by Section 906 of the Sarbanes-Oxley Act of 2002, that to my knowledge:

(2) the information contained in the Report fairly presents, in all material respects, the financial condition and results of operations of the Company.

Dated: March 3, 2014

/S/ RICHARD RYAN

Richard Ryan

Senior Vice President and

Chief Financial Officer

(Principal Financial Officer)