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UNITED STATES SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
Form 10-Q
     
(Mark One)    
þ
  QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934
 
    For the quarterly period ended March 31, 2005
 
or
 
o
   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 000-49717
Crowley Maritime Corporation
(Exact name of registrant as specified in its charter)
     
Delaware
   94-3148464
(State or other jurisdiction of
incorporation or organization)		   (I.R.S. Employer
Identification No.)
 
155 Grand Avenue,
Oakland, California
(Address of principal executive offices)		   94612
(Zip Code)
(510) 251-7500
(Registrant’s telephone number, including area code)
Not Applicable
(Former name, former address and former fiscal year, if changed since last report)
     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 for 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.     Yes þ          No o
      Indicate by check mark whether the registrant is an accelerated filer (as defined in Rule 12b-2 of the Exchange Act).     Yes o          No þ
      As of May 6, 2005, 88,801 shares of voting common stock, par value $.01 per share, and 46,138 shares of non-voting Class N common stock, par value $.01 per share, were outstanding.
 
 

TABLE OF CONTENTS
             
        Page
         
     PART I — FINANCIAL INFORMATION        
   Financial Statements     2  
     Unaudited Condensed Consolidated Statements of Operations for the Three Months Ended March 31, 2005 and 2004     2  
     Unaudited Condensed Consolidated Balance Sheets as of March 31, 2005 and December 31, 2004     3  
     Unaudited Condensed Consolidated Statement of Stockholders’ Equity for the Three Months Ended March 31, 2005     4  
     Unaudited Condensed Consolidated Statements of Cash Flows for the Three Months Ended March 31, 2005 and 2004     5  
     Notes to Unaudited Condensed Consolidated Financial Statements for the Three Months Ended March 31, 2005 and 2004     6  
   Management’s Discussion and Analysis of Financial Condition and Results of Operations     12  
   Quantitative and Qualitative Disclosures About Market Risk     25  
   Controls and Procedures     25  
 
     PART II — OTHER INFORMATION        
   Legal Proceedings     26  
   Exhibits     27  
 SIGNATURES     29  
 EX-2.6: AMENDMENT NO. 3 TO PURCHASE AGREEMENT
 EX-2.7: AMENDMENT NO. 4 TO PURCHASE AGREEMENT
 EX-2.8: AMENDMENT NO. 5 TO PURCHASE AGREEMENT
 EX-2.9: AMENDMENT NO. 6 TO PURCHASE AGREEMENT
 EX-2.10: AMENDMENT NO. 7 TO PURCHASE AGREEMENT
 EX-31.1: CERTIFICATION
 EX-31.2: CERTIFICATION
 EX-32.1: CERTIFICATIONS

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PART I — FINANCIAL INFORMATION
Item 1. Financial Statements.
CROWLEY MARITIME CORPORATION AND SUBSIDIARIES
UNAUDITED CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS
For the Three Months Ended March 31, 2005 and 2004
(In thousands, except per share amounts)
                   
    2005   2004
         
Operating revenues
   $ 241,812     $ 224,173  
Expenses:
                
 
Operating
     210,020       204,072  
 
General and administrative
     10,102       7,649  
 
Depreciation and amortization
     15,937       14,734  
 
Asset recoveries, net
     (1,746 )     (218 )
             
      234,313       226,237  
             
Operating income (loss)
     7,499       (2,064 )
Other income (expense):
                
 
Interest income
     801       395  
 
Interest expense
     (4,969 )     (5,281 )
 
Minority interest in consolidated subsidiaries
     (24 )     (18 )
 
Other income (expense)
     (82 )     22  
             
      (4,274 )     (4,882 )
             
Income (loss) from continuing operations before income taxes
     3,225       (6,946 )
Income tax (expense) benefit
     (1,300 )     2,800  
             
Income (loss) from continuing operations
     1,925       (4,146 )
Discontinued operations:
                
 
Loss from operations, including gain/loss on disposal, net of tax benefit
     (85 )     (752 )
             
Net income (loss)
     1,840       (4,898 )
Preferred stock dividends
     (394 )     (394 )
             
Net income (loss) attributable to common shareholders
   $ 1,446     $ (5,292 )
             
Basic income (loss) per common share:
                
 
Income (loss) from continuing operations
   $ 11.35     $ (33.50 )
 
Loss from discontinued operations
     (0.63 )     (5.54 )
             
 
Net income (loss)
   $ 10.72     $ (39.04 )
             
Diluted income (loss) per common share:
                
 
Income (loss) from continuing operations
   $ 11.35     $ (33.50 )
 
Loss from discontinued operations
     (0.63 )     (5.54 )
             
 
Net income (loss)
   $ 10.72     $ (39.04 )
             
The accompanying notes are an integral part of the Unaudited Condensed Consolidated Financial Statements.

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CROWLEY MARITIME CORPORATION AND SUBSIDIARIES
UNAUDITED CONDENSED CONSOLIDATED BALANCE SHEETS
As of March 31, 2005 and December 31, 2004
(In thousands, except share and per share amounts)
                 
    March 31,   December 31,
    2005   2004
         
ASSETS
Cash and cash equivalents
   $ 149,292     $ 142,896  
Receivables, net
     164,526       171,647  
Inventory
     20,829       20,542  
Prepaid expenses and other assets
     37,362       30,935  
Current assets of discontinued operations
     567       915  
             
TOTAL CURRENT ASSETS
     372,576       366,935  
Receivable from related party
     11,085       11,177  
Goodwill
     44,786       44,786  
Intangibles, net
     13,641       14,125  
Other assets
     48,682       49,745  
Property and equipment, net
     492,913       493,989  
             
TOTAL ASSETS
   $ 983,683     $ 980,757  
             
 
LIABILITIES AND STOCKHOLDERS’ EQUITY
Accounts payable and accrued liabilities
   $ 107,156     $ 96,648  
Accrued payroll and related expenses
     49,003       44,221  
Insurance claims payable
     14,287       15,797  
Unearned revenue
     7,385       14,126  
Current liabilities of discontinued operations
     1,364       1,547  
Current portion of long-term debt
     31,261       30,993  
             
TOTAL CURRENT LIABILITIES
     210,456       203,332  
Deferred income taxes
     93,072       92,731  
Other liabilities
     19,731       19,465  
Minority interests in consolidated subsidiaries
     38       14  
Long-term debt, net of current portion
     334,993       341,380  
             
TOTAL LIABILITIES
     658,290       656,922  
             
COMMITMENTS AND CONTINGENCIES
                
STOCKHOLDERS’ EQUITY:
                
Preferred class A convertible stock, $100 par value, 315,000 shares issued, authorized and outstanding
     31,500       31,500  
Common voting stock, $.01 par value, 4,485,000 shares authorized; 88,801 shares issued and outstanding
     1       1  
Class N common non-voting stock, $.01 par value, 54,500 shares authorized; 46,138 shares outstanding
     —       —  
Additional paid-in capital
     66,871       66,871  
Retained earnings
     231,264       229,818  
Accumulated other comprehensive loss, net of tax benefit of $2,386 and $2,449, respectively
     (4,243 )     (4,355 )
             
TOTAL STOCKHOLDERS’ EQUITY
     325,393       323,835  
             
TOTAL LIABILITIES AND STOCKHOLDERS’ EQUITY
   $ 983,683     $ 980,757  
             
The accompanying notes are an integral part of the Unaudited Condensed Consolidated Financial Statements.

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CROWLEY MARITIME CORPORATION AND SUBSIDIARIES
UNAUDITED CONDENSED CONSOLIDATED STATEMENT OF STOCKHOLDERS’ EQUITY
For the Three Months Ended March 31, 2005
(In thousands, except share amounts)
                                                                                     
    Preferred Class A       Class N           Accumulated    
    Convertible Stock   Common Stock   Common Stock   Additional       Other    
                Paid-In   Retained   Comprehensive    
    Shares   Par Value   Shares   Par Value   Shares   Par Value   Capital   Earnings   Loss   Total
                                         
December 31, 2004
     315,000     $ 31,500       88,801     $ 1       46,138     $ —     $ 66,871     $ 229,818     $ (4,355 )   $ 323,835  
Preferred stock dividends
     —       —       —       —       —       —       —       (394 )     —       (394 )
Comprehensive Income:
                                                                                
 
Net income
     —       —       —       —       —       —       —       1,840       —          
 
Other comprehensive income:
                                                                                
   
Amortization of rate lock agreement, net of tax expense of $63
     —       —       —       —       —       —       —       —       112          
Total comprehensive income
     —       —       —       —       —       —       —       —       —       1,952  
                                                             
March 31, 2005
     315,000     $ 31,500       88,801     $ 1       46,138     $ —     $ 66,871     $ 231,264     $ (4,243 )   $ 325,393  
                                                             
The accompanying notes are an integral part of the Unaudited Condensed Consolidated Financial Statements.

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CROWLEY MARITIME CORPORATION AND SUBSIDIARIES
UNAUDITED CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS
For the Three Months Ended March 31, 2005 and 2004
(In thousands)
                         
    2005   2004
         
OPERATING ACTIVITIES:
                
 
Net income (loss)
   $ 1,840     $ (4,898 )
 
Adjustments to reconcile net income (loss) to net cash provided by operating activities:
                
   
Depreciation and amortization
     15,937       14,734  
   
Amortization of deferred gain on the sale and leaseback of vessels
     (144 )     (144 )
   
Asset recoveries, net
     (1,746 )     (218 )
   
Change in cash surrender value of life insurance
     94       (147 )
   
Deferred income tax provision
     278       (1,415 )
   
Changes in current assets and liabilities:
                
     
Receivables, net
     7,530       (1,624 )
     
Inventory, prepaid expenses and other
     (6,714 )     6,257  
     
Accounts payable and accrued liabilities
     3,671       5,706  
     
Accrued payroll and related expenses
     4,782       (1,077 )
   
Other
     1,147       (723 )
             
       
Net cash provided by continuing operations
     26,675       16,451  
       
Net cash provided by discontinued operations
     165       3,573  
             
       
Net cash provided by operating activities
     26,840       20,024  
             
INVESTING ACTIVITIES:
                
 
Property and equipment additions
     (15,431 )     (3,905 )
 
Dry-docking costs
     (4,232 )     (3,057 )
 
Proceeds from asset dispositions
     5,338       394  
 
Withdrawals of restricted funds
     —       1,601  
 
Acquisitions, net of cash acquired
     —       100  
             
       
Net cash used in continuing operations
     (14,325 )     (4,867 )
       
Net cash provided by discontinued operations
     —       1,556  
             
       
Net cash used in investing activities
     (14,325 )     (3,311 )
             
FINANCING ACTIVITIES:
                
 
Payments on long-term debt
     (6,119 )     (16,836 )
 
Payment of debt issuance costs
     —       (732 )
             
       
Net cash used in continuing operations
     (6,119 )     (17,568 )
       
Net cash used in discontinued operations
     —       (2,844 )
             
       
Net cash used in financing activities
     (6,119 )     (20,412 )
             
       
Net increase (decrease) in cash and cash equivalents
     6,396       (3,699 )
       
Cash and cash equivalents at beginning of period
     142,896       158,750  
             
       
Cash and cash equivalents at end of period
   $ 149,292     $ 155,051  
             
The accompanying notes are an integral part of the Unaudited Condensed Consolidated Financial Statements.

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CROWLEY MARITIME CORPORATION AND SUBSIDIARIES
NOTES TO UNAUDITED CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
For the Three Months Ended March 31, 2005 and 2004
(In thousands, except share and per share amounts)
NOTE 1 — Summary of Significant Accounting Policies
      The accompanying unaudited condensed consolidated financial statements have been prepared in accordance with accounting principles generally accepted in the United States of America and the rules and regulations of the Securities and Exchange Commission which apply to interim financial statements. These unaudited condensed consolidated financial statements do not include all disclosures provided in the annual financial statements and should be read in conjunction with the financial statements and notes thereto contained in the Annual Report on Form 10-K for Crowley Maritime Corporation (the “Company”) for the year ended December 31, 2004 as filed with the Securities and Exchange Commission on March 31, 2005.
      All adjustments of a normal recurring nature which, in the opinion of management, are necessary to present a fair statement of the results of operations, financial condition and cash flows for the interim periods have been made. Results of operations for the three month period ended March 31, 2005 are not necessarily indicative of the results that may be expected for the full year.
Reclassification
      As discussed in Note 2, the Company has reported discontinued operations in 2004. Accordingly, the prior quarter’s unaudited condensed consolidated financial statements and related notes thereto have been reclassified to reflect discontinued operations.
New Accounting Standards
      In March 2005, the Financial Accounting Standards Board (“FASB”) issued Interpretation No. 47 (“FIN 47”), Accounting for Conditional Asset Retirement Obligations, an Interpretation of FASB Statement No. 143. FIN 47 is effective for fiscal years ending after December 15, 2005; however, earlier application is permitted. The Company has adopted the provisions of FIN 47; the adoption of which did not have a material impact on the Company’s consolidated financial position, results of operations or cash flows.
      In March 2005, the FASB also issued Interpretation No. 46(R)-5 (“FIN 46(R)-5”), Implicit Variable Interests under FASB Interpretation No. 46 (revised December 2003), “Consolidation of Variable Interest Entities”. FIN 46(R)-5 is effective for the first reporting period beginning after March 3, 2005; however, earlier application is permitted for periods for which financial statements have not yet been issued. The Company is currently evaluating the impact of FIN 46(R)-5.
NOTE 2 — Discontinued Operations
      In November 2004, a vessel used by the Company’s Oil and Chemical Transportation and Distribution Services segment was sold for $8,776, resulting in a gain of $266.
      In December 2003, the Company approved a plan to sell the Logistics operations of its Liner Services segment in Venezuela. In February 2004, the Company sold its Venezuelan Logistics operations for $1,506.
      The two sales of assets described above represented components of the Company whose operations and cash flows were eliminated from the ongoing operations of the Company, as defined in Statement of Financial Accounting Standards Board (“SFAS”) 144, Accounting for the Impairment or Disposal of Long-Lived Assets.
      On April 1, 1999, the Company adopted a plan to sell its South America trade lanes, river barging operations, related subsidiaries, vessels and certain other assets. In conjunction with the sale, the Company adopted a strategy to exit from several other South America operations. This was treated as discontinued

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CROWLEY MARITIME CORPORATION AND SUBSIDIARIES
NOTES TO UNAUDITED CONDENSED CONSOLIDATED FINANCIAL STATEMENTS — (Continued)
For the Three Months Ended March 31, 2005 and 2004
(In thousands, except share and per share amounts)
operations in accordance with APB 30, Reporting the Results of Operations — Reporting the Effects of Disposal of a Segment of a Business, and Extraordinary, Unusual and Infrequently Occurring Events and Transactions.
      The above operations have been reflected as discontinued operations in the accompanying Unaudited Condensed Consolidated Statements of Operations. Discontinued operations for the three months ended March 31 are summarized as follows:
                 
    Three Months
    Ended March 31
     
    2005   2004
         
Operating revenues
   $ —     $ 2,129  
             
Loss from operations before taxes
   $ (189 )   $ (883 )
Gain (loss) on disposal before taxes
     4       (269 )
Income tax benefit
     100       400  
             
Loss from discontinued operations
   $ (85 )   $ (752 )
             
      The combined assets and liabilities of these discontinued operations included in the Company’s Unaudited Condensed Consolidated Balance Sheets at March 31, 2005 and December 31, 2004 are as follows:
                 
    March 31,   December 31,
    2005   2004
         
Cash and cash equivalents
   $ —     $ 4  
Receivables, net
     53       331  
Prepaid expenses and other assets
     514       580  
             
Current assets of discontinued operations
   $ 567     $ 915  
             
Accounts payable and accrued liabilities
   $ 1,364     $ 1,547  
             
Current liabilities of discontinued operations
   $ 1,364     $ 1,547