In March 2001, the Company entered into agreements to sell two of its crewboats. The sale of one crewboat was closed in March 2001, and the sale of the second crew boat was closed in April 2001. The Company recognized a gain of approximately $568,000 in the first quarter on the sale of the first crewboat and recognized a gain of approximately $374,000 in the second quarter on the sale of the second crewboat. The proceeds from both sales were used for working capital. 

The provisions of SFAS 141 and SFAS 142 will be effective for fiscal years beginning after December 15, 2001. SFAS 142 must be adopted at the beginning of a fiscal year. Accordingly, the Company will no longer amortize goodwill effective January 1, 2002. Amortization of goodwill for the three and six month periods ended June 30, 2001 was $641,000 and $1,301,000, respectively, and for the year ended December 31, 2000 was $2,671,000. The Company is currently evaluating the impact of the adoption of these Statements. Based on the Company's initial interpretations of the Statements, the Company does not believe the implementation of these Statements will have a material impact on the Company's cash flow or financial condition. However, a change in the fair value of the Company's relevant businesses could materially change this preliminary determination.

This discussion and analysis of financial condition and results of operations should be read in conjunction with the unaudited consolidated financial statements and the related disclosures included elsewhere herein.

Revenues for the second quarter and six months ended June 30, 2001 were $50.0 million and $93.3 million, respectively, compared to the $29.5 million and $55.9 million in revenues for the second quarter and first six months of 2000, respectively. This increase in revenues was due to the increase in average vessel day rates and utilization for all our vessel classes, particularly the increase in day rates for the Gulf supply boats. Favorable oil and gas prices in 2000 and 2001 has resulted in increases in offshore drilling activity which, in turn, has resulted in improved demand for our vessels. The table below sets forth by vessel class, the average day rates and utilization of the Company's vessels and the average number of vessels owned during the periods indicated.

Depreciation and amortization expense decreased to $8.2 million and $16.5 million for the second quarter and first six months of 2001, respectively, down from $8.5 million and $17.1 million for the year-ago periods as a result of the sale of our lift boats in the second quarter of 2000 and the sale of two crew boats during the first half of 2001. Amortization of marine inspection costs decreased to $3.4 million and $6.6 million for the quarter and six month period ended June 30, 2001, respectively, from $3.5 million and $7.4 million in the comparable 2000 periods, due to decreased dry-docking and marine inspection costs. 

General and administrative expenses increased to $3.2 million (6.4% of revenues) and $6.3 million (6.8% of revenues) in the second quarter and first six months of 2001, respectively, from $2.8 million (9.4% of revenues) and $5.3 million (9.5% of revenues) for the 2000 periods. General and administrative expenses, as a percentage of revenues, decreased in the 2001 periods due to the increase in utilization and average day rates for our vessels. 

Interest expense decreased to $6.6 million for the second quarter of 2001 from $7.7 million for the second quarter of 2000 due to the reduction of our debt. 

In the second quarter and first six months of 2001, we had income tax expense of $2.4 million and $3.4 million, respectively, compared to income tax benefits of $2.3 million and $6.2 million in the 2000 periods. Our effective income tax rate for the three-month period ended June 30, 2001 was 31%. 

Our on-going capital requirements arise primarily from our need to service debt and acquire, maintain or improve equipment. During the first six months of 2001, $22.2 million in funds were provided by operating activities, net of $6.1 million of dry-docking and vessel inspection costs, a significant improvement from the comparable period of last year when we used $5.5 million in funds for operating activities, net of $3.1 million of dry-docking and vessel inspection costs. This improvement in funds generated from operating activities is principally due to the increase in net income resulting from the increase in vessel utilization and day rates compared to the first six months of 2000. During the first six months of 2001, $6.6 million in funds were used in financing activities, which was primarily due to our repayment of debt. This compares to the first six months of 2000 when $16.6 million in funds were provided by financing activities, which was principally due to our issuing $39.0 million of common stock and $28.4 million of long-term debt, offset in part by the repayment of $50.1 million of debt. During the first six months of 2001, $5.7 million of funds were used in investing activities, primarily due to capital expenditures of $7.0 million, reduced by the proceeds from the cash sale of two crew boats for $1.8 million. This compares to $10.8 million provided by investing activities in the first six months of 2000, which was due principally to $14.0 million in proceeds from the sale of assets, offset in part by $2.9 million of capital expenditures. 

We have outstanding approximately $247.9 million in 8½% senior notes due 2005. The senior notes are unsecured and are required to be guaranteed by all of our significant subsidiaries, Beginning August 1, 2001, the senior notes may be prepaid, at our option, in whole or in part, at a redemption price equal to 104.25% plus accrued and unpaid interest, with the redemption price declining ratably on August 1 of each of the succeeding three years. The indenture governing the senior notes contains certain covenants that, among other things, limit our ability to incur additional debt, pay dividends or make other distributions, create certain liens, sell assets, or enter into certain mergers or acquisitions.

We maintain a bank credit facility that provides a $45.0 million revolving line of credit that can be used for acquisitions and general corporate purposes. The bank credit facility is collateralized by a mortgage on substantially all of our vessels other than those located in the North Sea and Brazil. Amounts borrowed under the bank credit facility mature on July 19, 2003 and bear interest at a Eurocurrency rate plus a margin that depends on our leverage ratio. As of August 1, 2001, we had no outstanding borrowings under the bank credit facility. The bank credit facility requires us to maintain certain financial ratios and limits our ability to incur additional indebtedness, make capital expenditures, pay dividends or make certain other distributions, create certain liens, sell assets or enter into certain mergers or acquisitions. Although the bank credit facility does impose some limitations on the ability of our subsidiaries to make distributions to us, it expressly permits distributions to us by our significant subsidiaries for scheduled principal and interest payments on the senior notes. 

We also maintain a Norwegian revolving credit facility in the amount of NOK 400 million ($42.9 million). The commitment amount for this Norwegian bank facility reduces by NOK 50 million ($5.4 million) every six months, with the balance of the commitment to expire in June 2003. As of August 1, 2001, we had NOK 305 million ($33.4 million) of debt outstanding under the facility. In April 2000, we executed a new loan agreement for an additional Norwegian bank facility in the amount of NOK 125 million ($13.7 million). The commitment amount for this additional facility reduces by NOK 12.5 million ($1.3 million) every six months beginning June 2001, with the balance of the commitment to expire June 2003. As of August 1, 2001, this additional facility had been prepaid and reduced to NOK 100.0 million ($10.7 million). Amounts borrowed under these credit facilities bear interest at NIBOR (Norwegian Interbank Offered Rate) plus a margin. The weighted average interest rate for our Norwegian bank facilities was 8.3% as of June 30, 2001. Our Norwegian bank facilities are collateralized by mortgages on certain of our North Sea vessels, require that our North Sea operating unit maintain certain financial ratios and limit its ability to create liens, or merge or consolidate with other entities. 

In June 2001 we signed definitive agreements to acquire two 279-foot platform supply vessels for a cost of approximately NOK 388.7 million in total ($41.7 million) payable in Norwegian Kroner. The two state-of-the-art, UT 745 design vessels, equipped with DP2 (dynamic positioning) systems, are currently under construction in Norway and are slated for delivery in April and August 2002. Payment terms for each of the vessels call for payments equal to 20% during construction and 80% upon delivery. Also in the second quarter of 2001, we executed agreements to build three 150-foot crew boats in the U.S. Gulf for a total cost of approximately $10.9 million with vessel deliveries expected during the fourth quarter of 2002. Payment terms on the new crew boats call for progress payments throughout the construction period. Upon signing the agreements for the five new vessels in the second quarter, we paid approximately $2.2 million of the construction costs. Expenditures for these vessels are expected to total approximately $3.8 million during the second half of 2001. 

We believe that cash generated from our operations, together with borrowings under our bank credit facilities, will be sufficient to fund our working capital requirements and our planned capital expenditures. However, it is our objective to continue to position ourselves to pursue acquisitions and opportunities to selectively build new vessels that enhance our capabilities and enable us to enter new market areas. Depending upon the size of such investments, we may require additional equity or debt financing. We can give no assurances regarding the availability or terms of any possible transactions and the related debt and equity financing.

Our market risk exposures primarily include interest rate and exchange rate fluctuations on derivative and financial instruments as detailed below. Our market risk sensitive instruments are classified as "other than trading." Trico's exposure to market risk as discussed below is based on estimates of possible changes in fair values, future earnings or cash flows that would occur assuming hypothetical future movements in foreign currency exchange rates or interest rates. Our views on market risk are not necessarily indicative of actual results that may occur and do not represent the maximum possible gains and losses that may occur, since actual gains and losses will be based upon actual fluctuations in foreign currency exchange rates, interest rates and the timing of transactions, which will differ from those estimated. 

We have entered into a number of variable and fixed rate debt obligations, demoninated in both the U.S. Dollar and the Norwegian Kroner (Norwegian debt payable in Norwegian Kroner). The instruments are subject to interest rate risk. We manage this risk by monitoring our ratio of fixed and variable rate debt obligations in view of changing market conditions and from time to time altering that ratio. We also enter into interest rate swap agreements, when considered appropriate, in order to manage our interest rate exposure. 

Our foreign subsidiaries collect revenues and pay expenses in several different foreign currencies. We monitor the exchange rate of our foreign currencies and, when deemed appropriate, enter into hedging transactions in order to mitigate the risk from foreign currency fluctuations. We also manage our foreign currency risk by attempting to contract foreign revenue in U.S. Dollars whenever practicable. 

Our market risk estimates have not changed materially from those disclosed in our 2000 Form 10-K, incorporated herein by reference.

(a) Exhibits: 

 (b) Reports on Form 8-K: 

________________________ 

Pursuant to the requirements of the Securities Exchange Act of 1934, the Registrant has duly caused this report to be signed on its behalf by the undersigned thereunto duly authorized.