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services as their deepwater vessel class counterparts except they are generally chartered to customers for use in intermediate and shallow waters. 

## Crewboats and Utility Vessels 

Crewboats and utility vessels are chartered to customers for use in transporting personnel and supplies from shore bases to offshore drilling rigs, platforms and other installations. These vessels are also often equipped for oil field security missions in markets where piracy or violence present concerns. 

## Offshore Tugs 

Offshore tugs tow floating drilling rigs; assist in the docking of tankers; tow barges; assist pipe laying, cable laying and construction barges; and are used in a variety of other commercial towing operations, including towing barges carrying a variety of bulk cargoes and containerized cargo. 

## Other Vessels 

The company's vessels also include inshore tugs and production, line-handling and various other special purpose vessels. Inshore tugs, which are operated principally within inland waters, tow drilling rigs to and from their locations and tow barges carrying equipment and materials for use principally in inland waters for drilling and production operations. Barges are either used in conjunction with company tugs or are chartered to others. The company sold its remaining “other” type vessels during the first quarter of fiscal 2010. 

## Revenue Contribution of Main Classes of Vessels 

Revenues from vessel operations were derived from the main classes of vessels in the following percentages: 

<img src='content_image/273442.jpg'>

## Shipyard Operations 

Quality Shipyards, L.L.C., a wholly-owned subsidiary of the company, operates two shipyards in Houma, Louisiana, which construct, modify and repair vessels. The shipyards perform repair work and new construction work for outside customers, as well as the construction, repair and modification of the company’s own vessels. During the last three fiscal years, Quality Shipyards, L.L.C. constructed and delivered two 220-foot deepwater platform supply vessels, two 266-foot platform supply vessels, and is currently constructing one additional 266-foot platform supply vessel for the company. The two 220-foot platform supply vessels were delivered to the company during fiscal 2008, while the two 266-foot platform supply vessels were delivered in December 2009 and late March 2010. The 266-foot deepwater, platform supply vessel that is currently under construction is expected to be delivered in February 2012. 

## Customers and Contracts 

The company’s operations are materially dependent upon the levels of activity in offshore crude oil and natural gas exploration, field development and production throughout the world, which is affected by trends in worldwide crude oil and natural gas prices (including expectations of future commodity pricing) that are ultimately influenced by the supply and demand relationship for these natural resources. The activity levels of our customers are also influenced by the cost of exploring and producing crude oil and natural gas, which can be affected by environmental regulations, technological advances that affect energy production and consumption, significant weather conditions, the ability of our customers to raise capital, and local and international economic and political environments. A discussion of current market conditions and trends appears under “Macroeconomic Environment and Outlook” in Item 7 of this report. 

