2001 Maritime

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GULF OFFSHORE 2001 event
Biloxi, MS, June 5 & 6

May 8, 2001

Another construction vessel for Horizon Offshore
Horizon Offshore, Inc. subsidiary Horizon Vessels has bought the bury barge Atchafalaya Bay. The barge will undergo conversion to a combination lay/bury barge at Horizon's Port Arthur, Texas, facility and will be renamed the Pecos Horizon.

The Pecos Horizon will be capable of laying pipelines up to 20 inches in diameter and operating in water depths up to 500 feet. The vessel will also be capable of burying pipelines up to 60 inches in diameter to depths of 16 feet below the seafloor. The vessel is scheduled for deployment later this year.

Horizon president and CEO Bill J. Lam said acquisition of the vessel, "further expands our fleet of construction vessels and will enhance our strategic position both domestically and internationally enabling Horizon to further capitalize on the increased demand in the marine construction market.''

AMCV earnings hit by price competition
American Classic Voyages Co. today announced results for the first quarter ended March 31, 2001. Revenues for the first quarter were $64.2 million, an increase of $23.5 million, or 58%, over the first quarter of 2000. Net loss for the first quarter was $12.7 million,as compared to a net loss of $6.4 million and diluted share in the first quarter of 2000.

CEO Phil Calian said first quarter performance was adversely affected by the downturn in the general economy and competitive pricing in the leisure industry. "These factors." he said, "occurred at the same time that we increased our Hawaii capacity by 140% with American Hawaii's Independence showing the greatest decline in yields.''

Steps taken action to improve its future business, says Calian, include aggressive pricing in Hawaii, expansion of AMCV's distribution channel, continued product improvement at United States Lines and a reduction in the company's overall cost structure.

In the first quarter of 2001, the company reported yields on American Hawaii cruises of $130 per passenger night, a decrease of 39% from the comparable period of a year ago. For the full year 2001, the company estimated yields at American Hawaii to be $105 and yields at United States Lines 25% to 30% higher. For the full year 2001, yields at Delta Queen are expected to be 8% to 12% lower in 2001 than in 2000.

"On a positive note, we seem to have reached bottom with pricing and have experienced positive booking momentum in Hawaii during the past month, as well as significantly increased group allotments for 2002,'' Calian said.

On May 5, Delta Queen Coastal Voyages' cv Cape May Light set sail from Norfolk, VA on its inaugural seven-day coastal cruise. The vessel is the first of two 224-passenger ships, with destinations along the eastern seaboard of the United States,.

The first quarter of 2001 includes $2.0 million in pre-marketing costs for vessels that were not yet in service during the quarter and $0.9 million in start-up costs related to the introduction of the cv Cape May Light and cv Cape Cod Light, the second Delta Queen coastal vessel currently under construction. The first quarter of 2000 did not include any start-up expenses, but did include $1.1 million in marketing costs for vessels not yet in service during the quarter.

On March 24, the ss Independence was removed from service for one week while its bow thruster was repaired. The cost of the repair was approximately $500,000. On February 20, the Patriot interrupted its seven-day cruise for unscheduled repairs, resulting in refunds issued to passengers of approximately $1.6 million, and travel credits for a future cruise expected to cost approximately $0.5 million.

$42.2 million contract mod for EB
The U.S. Navy has awarded General Dynamics' Electric Boat a $42.2-million contract modification for Virginia-class submarine lead- yard services.
Under the terms of the contract, Electric Boat will maintain, update and support the Virginia-class design and related drawings and data for each submarine, including technology insertion, throughout its construction and post-delivery maintenance period. Electric Boat will also provide all engineering and related services for maintenance and support of Virginia-class ship specifications. The work is expected to be completed by May 2002.