Maritrans Reports Third Quarter 2006 Earnings

Maritrans Inc. (NYSE:TUG), a leading U.S. flag marine petroleum transport company, today announced its third quarter financial results. Net income for the quarter ended September 30, 2006 was $4.0 million, or $0.33 diluted earnings per share, on revenues of $49.2 million. This compares with net income of $6.4 million, or $0.74 diluted earnings per share, on revenues of $44.9 million for the quarter ended September 30, 2005. For the third quarter ended September 30, 2006, net income included the reversal of an income tax reserve of $1.3 million, or $0.11 diluted earnings per share. In the prior year, net income for the quarter ended September 30, 2005 included a reversal of an income tax reserve of $1.2 million, or $0.14 diluted earnings per share. As of April 1, 2006, the Company changed its method of accounting for planned major maintenance activities from the accrual method to the deferral method. An appendix is included at the end of this release that details the effect of the accounting change on Maritrans’ results from January 1, 2004 and each period thereafter. Operating income for the quarter ended September 30, 2006, was $3.6 million compared to $8.7 million for the quarter ended September 30, 2005. Operating expenses increased to $45.6 million in the third quarter of 2006 from $36.2 million for the third quarter of 2005 primarily due to charter hire costs related to the charters of the vessels SEABROOK and SEA SWIFT, which charters did not exist in 2005. Additionally, the Company’s vessel insurance expenses increased $1.3 million compared to the same period of 2005 due to additional premiums for open policy periods from 2004 through 2006 due to a general call on all policyholders by the Company’s mutual insurance club. During the third quarter, rates in the U.S. Jones Act spot market increased compared to the second quarter of 2006, as a result of fewer vessels available in the market and higher refinery output. During the third quarter of 2006 the Company delivered 23 million barrels of crude oil to lightering customers compared to 21 million barrels delivered during the second quarter of 2006, which was primarily a result of increased production from a Delaware River refinery that was undergoing maintenance during the second quarter of 2006. On a Time Charter Equivalent ("TCE”) basis, a commonly used industry measure where direct voyage costs are deducted from voyage revenue, TCE revenue was $35.0 million for the quarter ended September 30, 2006 compared to $34.8 million for the quarter ended September 30, 2005, an increase of $0.2 million, or 0.6%. TCE revenue is a non-GAAP financial measure and a reconciliation of TCE revenue to revenue calculated in accordance with GAAP is attached hereto. During the third quarter of 2006, the Company experienced lower overall utilization than in the third quarter of 2005. Utilization for the third quarter of 2006 was 77.2% compared to 83.8% in the third quarter of 2005. In the quarter ended September 30, 2006, the Company experienced 203 days of out of service time for capital projects, including barge rebuilding, and vessel maintenance. This compares to out of service time for maintenance and capital projects, including barge rebuilding, of 123 days in the third quarter of 2005. The Company expects to have at least 92 days out of service time during the fourth quarter of 2006 for capital projects, including barge rebuilding. In the quarter ended September 30, 2006, the Company did not experience any days out of service due to weather related events. In the quarter ended September 30, 2005, the Company experienced four significant storms that resulted in approximately 49 days of out of service time. In the quarter ended September 30, 2006, the Company did not experience any idle days in its spot fleet, compared to 17 days in the comparable period in 2005. In the quarter ended September 30, 2006, the Company experienced 63 idle days for the ALLEGIANCE and PERSEVERANCE while awaiting orders for grain voyages. The Company had no vessels in grain service in the comparable period in 2005. PENDING TRANSACTION WITH OVERSEAS SHIPHOLDING GROUP INC. On September 25, 2006, the Company and Overseas Shipholding Group Inc., or OSG, announced that OSG had entered into a definitive agreement pursuant to which OSG will acquire all of the outstanding stock of Maritrans Inc. for $37.50 per share. The transaction is valued at approximately $455 million based on approximately 12 million shares outstanding and the assumption of net debt outstanding as of June 30, 2006. The transaction, which is expected to close by year-end 2006, is subject to approval by a majority of Maritrans’ stockholders and other customary closing conditions, including regulatory approvals. On October 17, 2006, the Federal Trade Commission, on behalf of itself and the Antitrust Division of the Department of Justice, granted early termination of the waiting period under the Hart-Scott-Rodino Antitrust Improvement Acts of 1976 with respect to the proposed acquisition. The special meeting of Maritrans’ stockholders to consider the proposed transaction has been scheduled for November 28, 2006. Stockholders of record at the close of business on October 20, 2006 will be entitled to vote at the meeting. FLEET AND MARKET REPORT Maritrans operates a fleet of oil tankers and oceangoing married tug/barge units. In the third quarter of 2006, the Company operated its fleet at approximately 35% spot and 65% contract and intends to maintain similar spot market exposure in the fourth quarter of 2006. In September, the ALLEGIANCE entered into a charter to transport grain from Portland, Oregon to Kenya. The vessel is scheduled to complete this voyage in mid-December. The current grain cargo is the vessel’s fourth charter since being removed from petroleum transportation service in December 2005 in accordance with the Oil Pollution Act of 1990 ("OPA”). In July 2006, the Company’s tanker PERSEVERANCE reached its mandatory oil retirement date. In September 2006, the PERSEVERANCE entered into a charter to transport grain from Corpus Christi, Texas to Djibouti and Georgia. The vessel is scheduled to complete this voyage in November. The Company expects to incur approximately 15 days of idle time on each of these tankers in the fourth quarter of 2006. FLEET REBUlLDING AND CONSTRUCTION PROGRAM Since 1998, Maritrans has been actively engaged in a double-hull rebuilding program aimed at ensuring that the Company’s Jones Act fleet is compliant with the Oil Pollution Act of 1990. Maritrans’ patented barge rebuilding process enables the Company to convert its vessels for significantly less cost than building new vessels. During 2006, the Company has continued to successfully implement its rebuilding program. The rebuild of the Company’s seventh barge, the M 210, commenced on January 26, 2006. The M 210 rebuild is expected to have a total cost of approximately $30 million. The rebuild of the Company’s eighth barge, the OCEAN 211, is expected to commence following the return to service of the M 210. The OCEAN 211’s rebuild is also expected to have a total cost of approximately $30 million. The rebuilds of the M 210 and OCEAN 211 will also include the insertions of mid-bodies that will increase each of their respective capacities by approximately 38,000 barrels, or 17%. The rebuilds of the M 210 and the OCEAN 211 are expected to be completed early in 2007 and in the late summer of 2007, respectively. Upon completion of their double-hulling, and reflecting their larger carrying capacities, the M 210 and OCEAN 211 will be renamed the M 242 and M 243, respectively. The Company has three 350,000 barrel articulated tug-barge units under construction, with deliveries scheduled for the fourth quarter of 2007, the second quarter of 2008 and the fourth quarter of 2008, respectively. The cost of each ATB is expected to be approximately $77.5 million. The Company also has two 8,000-horsepower tugboats under construction. One tugboat is expected to be delivered in the fourth quarter of 2008 with the second delivered in the first quarter of 2009. The cost of each tugboat is expected to be approximately $16 million. ABOUT MARITRANS Maritrans Inc. is a U.S.-based company with a 78-year commitment to building and operating petroleum transport vessels for the U.S. domestic trade. Maritrans employs a fleet of 11 tug/barge units and 5 tankers. Two of these tankers were redeployed to the transportation of non-petroleum cargo. Approximately 75 percent of our oil carrying fleet capacity is double-hulled. Our current oil carrying fleet capacity aggregates approximately 3.4 million barrels, 79 percent of which is barge capacity. Maritrans is headquartered in Tampa, Florida, and maintains an office in the Philadelphia area. SAFE HARBOR STATEMENT Certain statements in this news release are forward-looking statements within the meaning of Section 27A of the Securities Act of 1933, as amended and Section 21E of the Securities Exchange Act of 1934, as amended, including statements made with respect to present or anticipated utilization, future revenues and customer relationships, capital expenditures, future financings, and other statements regarding matters that are not historical facts, and involve predictions. These statements involve known and unknown risks, uncertainties and other factors that may cause actual results, levels of activity, growth, performance, earnings per share or achievements to be materially different from any future results, levels of activity, growth, performance, earnings per share or achievements expressed in or implied by such forward-looking statements. In some cases you can identify forward-looking statements by terminology such as "may," "seem," "should," "believe," "future," "potential," "estimate," "offer," "opportunity," "quality," "growth," "expect," "intend," "plan," "focus," "through," "strategy," "provide," "meet," "allow," "represent," "commitment," "create," "implement," "result," "seek," "increase," "establish," "work," "perform," "make," "continue," "can," "will," "include," or the negative of such terms or comparable terminology. These forward-looking statements inherently involve certain risks and uncertainties, although they are based on our current plans or assessments that are believed to be reasonable as of the date of this prospectus supplement. The forward-looking statements are subject to a number of risks and uncertainties and include the following: satisfaction of conditions to closing of the proposed merger with OSG, demand for, or level of consumption of, oil and petroleum products; future spot market charter rates; ability to attract and retain experienced, qualified and skilled crewmembers; competition that could affect our market share and revenues; risks inherent in marine transportation; the cost and availability of insurance coverage; delays or cost overruns in the building of new vessels, the double-hulling of our remaining single hulled vessels and scheduled shipyard maintenance; decrease in demand for lightering services; environmental and regulatory conditions; reliance on a limited number of customers for revenue; the continuation of federal law restricting United States point-to-point maritime shipping to US vessels (the Jones Act); asbestos-related lawsuits; fluctuating fuel prices; high fixed costs; capital expenditures required to operate and maintain a vessel may increase due to government regulations; reliance on unionized labor; federal laws covering our employees that may subject us to job-related claims; and significant fluctuations of our stock price. Given these uncertainties, you should not place undue reliance on these forward-looking statements. You should read this news release completely and with the understanding that our actual future results may be materially different from what the Company expects. These forward-looking statements represent our estimates and assumptions only as of the date of this news release. Except for our ongoing obligations to disclose material information under the federal securities laws, the Company is not obligated to update these forward-looking statements, even though our situation may change in the future. The Company qualifies all of its forward-looking statements by these cautionary statements. RECONCILIATION OF NON-GAAP FINANCIAL MEASURES ($ Thousands)   Three Months Ended Nine Months Ended September 30, September 30, 2006  2005  2006  2005    Revenue $ 49,161  $ 44,930  $ 140,448  $ 134,800  Voyage Costs   14,210    10,095    36,219    30,691  Time Charter Equivalent $ 34,951  $ 34,835  $ 104,229  $ 104,109      UNAUDITED CONDENSED CONSOLIDATED STATEMENTS OF INCOME ($ Thousands, Except Per Share Amounts)   Three Months Ended Nine Months Ended September 30, September 30, 2006  2005  2006  2005    Revenue $ 49,161  $ 44,930  $ 140,448  $ 134,800  Operations expense Operations expense 14,210  10,095  36,219  30,691  Charter hire 3,087  --  8,624  --  Voyage costs 15,765  13,138  44,289  39,827  Maintenance expense 2,072  1,804  5,894  4,623  General and administrative expense 2,231  2,208  6,823  10,017  Depreciation and amortization expense 8,209  8,963  25,267  27,179  Gain on sale of assets --  --  (2,868) (647) Operating Income 3,587  8,722  16,200  23,110  Other Income 738  173  2,316  4,432  Interest Expense (43) (838) (425) (2,259) Pre-tax income 4,282  8,057  18,091  25,283  Income Tax Provision 272  1,654  5,122  7,941  Net Income $ 4,010  $ 6,403  $ 12,969  $ 17,342    Diluted Earnings Per Share $ 0.33  $ 0.74  $ 1.08  $ 2.03  Diluted Shares Outstanding 12,068  8,596  12,049  8,562  Capital Expenditures $ 11,843  $ 25,824  $ 38,407  $ 39,828  Utilization of Calendar days 77.2% 83.8% 78.0% 82.5% Barrels carried (in millions) 41.6  42.5  126.0  132.1  Available days 1,253  1,250  3,869  3,642  NOTE: All periods presented are conformed to the new major maintenance accounting treatment.  See also Appendix I. UNAUDITED CONDENSED CONSOLIDATED BALANCE SHEET INFORMATION ($ Thousands)   September 30, 2006 December 31, 2005   Cash and cash equivalents $42,782  $58,794  Other current assets 35,603  29,522  Net vessels and equipment 255,562  233,641  Other assets 22,972  24,479  Total assets $356,919  $346,436    Current portion of debt $4,144  $3,973  Total other current liabilities 25,556  21,311  Long-term debt 52,271  55,400  Deferred other liabilities 8,552  9,435  Deferred income taxes 43,481  42,321  Stockholders' equity 222,915  213,996  Total liabilities and stockholders' equity $356,919  $346,436  NOTE: All periods presented are conformed to the new major maintenance accounting treatment. See also Appendix I.       UNAUDITED CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS INFORMATION ($ Thousands) Nine Months Ended September 30, 2006  2005    Cash flows from operating activities: Net income $12,969  $17,342  Depreciation and amortization 25,267  27,179  Other (13,073) (6,797) Total adjustments to net income 12,194  20,382  Net cash provided by operating activities 25,163  37,724    Net cash used in investing activities (34,407) (39,181)   Net cash used in financing activities (6,768) (4,079)   Net increase in cash and cash equivalents (16,012) (5,536) Cash and cash equivalents at beginning of period 58,794  6,347  Cash and cash equivalents at end of period $42,782  $811  NOTE: All periods presented are conformed to the new major maintenance accounting treatment. See also Appendix I. Barges/Tugs Capacity in Barrels(1) Double-Hull Barge or Tanker Initial Construction/ Rebuild Date   M 400/Constitution 410,000  Yes  1981  Originally built with double-hull M 300/Liberty 263,000  Yes  1979  Originally built with double-hull M 254/Intrepid 250,000  Yes  2002  Double-hull rebuild M 252/Navigator 250,000  Yes  2002  Double-hull rebuild M 244/Seafarer 240,000  Yes  2000  Double-hull rebuild M 215/Sea Swift (5) 214,000  No  1975  Decision to rebuild has not yet been made(2) Ocean 211/Freedom 212,000  No  2007  Scheduled double-hull delivery(3) M 210/Columbia 213,000  No  2006  Scheduled double-hull delivery(3) M 214/Honour 208,000  Yes  2004  Double-hull rebuild(4) M 209/Enterprise 206,000  Yes  2005  Double-hull rebuild(4) M 192/Independence 172,000  Yes  1998  Double-hull rebuild Total oil carrying capacity 2,638,000    Oil Tankers         Integrity 270,000  Yes  1975  Originally built with double-hull Diligence 270,000  Yes  1977  Originally built with double-hull Seabrook (6) 224,000  No  1983  Total oil carrying capacity 764,000    Other         Allegiance 251,000  No  1980  Redeployed in transport of grain Perseverance 251,000  No  1981  Prepared to transport grain 502,000    Total capacity 3,904,000    (1) Represents 98% capacity, which is the effective carrying capacity of a tank vessel. (2) If rebuilt, the Company anticipates that a 30,000 barrel mid-body would be inserted. (3) Vessels are being rebuilt with 38,000 barrel mid-body insertions. (4) Completion of the double-hull rebuild included a 30,000 barrel mid-body insertion. (5) Sea Swift chartered in from Crowley Maritime Corporation. (6) Chartered in from Seabrook Carriers Inc. APPENDIX I ACCOUNTING CHANGE FOR PLANNED MAJOR MAINTENANCE ACTIVITIES As of April 1, 2006, the Company changed its method of accounting for planned major maintenance activities from the accrual method to the deferral method. Previously, the Company made provisions for the cost of upcoming major periodic overhauls of vessels and equipment in advance of performing the related maintenance and repairs. The costs expected to be paid in the upcoming year were included in accrued shipyard costs as a current liability with the remainder classified as a long-term liability. Under the deferral method, costs actually incurred are amortized on a straight-line basis over the period beginning at the completion of the maintenance event and ending at the commencement of the next scheduled regulatory drydocking. Management believes the deferral method is the preferable method for accounting for planned major maintenance activities because (i) it better matches the expenses incurred with the revenues generated, (ii) the deferral method improves comparability with the Company’s industry since the majority of the Company’s competitors use this method and (iii) the deferral method best fits the Company’s business circumstances because the Company has a small fleet of vessels, the expenditures for planned major maintenance activities are not continuous and the expenditures are not consistent across periods due to the timing of regulatory drydockings. The Company recorded this change in accounting principle in accordance with SFAS No. 154, Accounting Changes and Error Corrections, which provides guidance on the accounting for and the reporting of accounting changes, including changes in accounting principles. SFAS 154 is effective for accounting changes made in fiscal years beginning after December 15, 2005. This statement requires retrospective application of accounting changes which is defined as the application of a different accounting principle to prior accounting periods as if that principle had always been used. Pursuant to SFAS No. 154, the Company is required to apply the new accounting principle to all prior periods that the Company will report upon in the Annual Report on Form 10-K for the year ended December 31, 2006. Therefore, this accounting principle was retrospectively applied to the period of January 1, 2004 and to each period thereafter. The cumulative effect of the retrospective change to this accounting principle as of January 1, 2004 was a $17.9 million increase in total assets, a $2.7 million decrease in total liabilities and a $20.6 million increase in retained earnings. The following presents the effect of the retrospective application of this change in accounting principle on the Company’s income statement and balance sheet as of and for the respective periods. Three Months Ended Sept. 30, 2006 Pre Adoption Effect of Change in Accounting Principle Three Months Ended Sept. 30, 2006 as Reported   Revenues $ 49,161  $ 49,161  Costs and expenses: Operation expense 33,062  33,062  Maintenance expense 5,457  (3,385) 2,072  General and administrative 2,231  2,231  Depreciation and amortization 5,154  3,055  8,209  Total operating expenses 45,904  (330) 45,574  Operating income 3,257  330  3,587  Interest expense (43) (43) Interest income 680  680  Other income, net 58    58  Income before income taxes 3,952  330  4,282  Income tax provision 153  119  272  Net income $ 3,799  $ 211  $ 4,010    Basic earnings per share $ 0.32  $ 0.02  $ 0.34  Diluted earnings per share $ 0.31  $ 0.02  $ 0.33  Three Months Ended June 30, 2006 Pre Adoption Effect of Change in Accounting Principle Three Months Ended June 30, 2006 as Reported   Revenues $ 43,903  $ 43,903  Costs and expenses: Operation expense 27,094  27,094  Maintenance expense 4,931  (3,282) 1,649  General and administrative 2,287  2,287  Depreciation and amortization 4,958  3,098  8,056  Total operating expenses 39,270  (184) 39,086  Operating income 4,633  184  4,817  Interest expense (108) (108) Interest income 761  761  Other income, net 63    63  Income before income taxes 5,349  184  5,533  Income tax provision 1,862  66  1,928  Net income $ 3,487  $ 118  $ 3,605    Basic earnings per share $ 0.29  $ 0.01  $ 0.30  Diluted earnings per share $ 0.29  $ 0.01  $ 0.30  Three Months Ended March 31, 2006 as Reported Effect of Change in Accounting Principle Three Months Ended March 31, 2006 as Adjusted   Revenues $ 47,384  $ 47,384  Costs and expenses: Operation expense 28,976  28,976  Maintenance expense 5,277  (3,103) 2,174  General and administrative 2,305  2,305  Depreciation and amortization 5,244  3,759  9,003  Gain on involuntary conversion of assets (2,868)   (2,868) Total operating expenses 38,934  656  39,590  Operating income 8,450  (656) 7,794  Interest expense (273) (273) Interest income 678  678  Other income, net 76    76  Income before income taxes 8,931  (656) 8,275  Income tax provision 3,157  (236) 2,921  Net income $ 5,774  $ (420) $ 5,354    Basic earnings per share $ 0.49  $ (0.04) $ 0.45  Diluted earnings per share $ 0.48  $ (0.03) $ 0.45  Nine Months Ended Sept. 30, 2006 Pre Adoption Effect of Change in Accounting Principle Nine Months Ended Sept. 30, 2006 as Reported   Revenues $ 140,448  $ 140,448  Costs and expenses: Operation expense 89,132  89,132  Maintenance expense 15,664  (9,770) 5,894  General and administrative 6,823  6,823  Depreciation and amortization 15,355  9,912  25,267  Gain on involuntary conversion of assets (2,868) -  (2,868) Total operating expenses 124,106  142  124,248  Operating income 16,342  (142) 16,200  Interest expense (425) (425) Interest income 2,119  2,119  Other income, net 197    197  Income before income taxes 18,233  (142) 18,091  Income tax provision 5,173  (51) 5,122  Net income $ 13,060  $ (91) $ 12,969    Basic earnings per share $ 1.10  $ (0.01) $ 1.09  Diluted earnings per share $ 1.09  $ (0.01) $ 1.08  Three Months Ended Sept. 30, 2005 as Reported Effect of Change in Accounting Principle Three Months Ended Sept. 30, 2005 as Adjusted   Revenues $ 44,930  $ 44,930  Costs and expenses: Operation expense 23,233  23,233  Maintenance expense 5,221  (3,417) 1,804  General and administrative 2,208  2,208  Depreciation and amortization 5,947  3,016  8,963  Total operating expenses 36,609  (401) 36,208  Operating income 8,321  401  8,722  Interest expense (838) (838) Interest income 114  114  Other income, net 59    59  Income before income taxes 7,656  401  8,057  Income tax provision 1,510  144  1,654  Net income $ 6,146  $ 257  $ 6,403    Basic earnings per share $ 0.73  $ 0.03  $ 0.76  Diluted earnings per share $ 0.71  $ 0.03  $ 0.74  Nine Months Ended Sept. 30, 2005 as Reported Effect of Change in Accounting Principle Nine Months Ended Sept. 30, 2005 as Adjusted   Revenues $ 134,800  $ 134,800  Costs and expenses: Operation expense 70,518  70,518  Maintenance expense 15,312  (10,689) 4,623  General and administrative 10,017  10,017  Depreciation and amortization 17,162  10,017  27,179  Gain on sale of assets (647)   (647) Total operating expenses 112,362  (672) 111,690  Operating income 22,438  672  23,110  Interest expense (2,259) (2,259) Interest income 281  281  Other income, net 4,151    4,151  Income before income taxes 24,611  672  25,283  Income tax provision 7,699  242  7,941  Net income $ 16,912  $ 430  $ 17,342    Basic earnings per share $ 2.02  $ 0.05  $ 2.07  Diluted earnings per share $ 1.98  $ 0.05  $ 2.03  Sept. 30, 2006 Pre Adoption Effect of Change in Accounting Principle Sept. 30, 2006 as Reported   ASSETS Current assets $ 84,387  $ (6,002) $ 78,385  Vessels and equipment, net 255,562  255,562  Deferred costs, net -  19,913  19,913  Goodwill 2,863  2,863  Other 1,372  (1,176) 196  Total assets $ 344,184  $ 12,735  $ 356,919    LIABILITIES AND STOCKHOLDERS’ EQUITY Current liabilities $ 34,812  $ (5,112) $ 29,700  Non-current liabilities 105,264  (960) 104,304  Stockholders’ equity 204,108  18,807  222,915  Total liabilities and stockholders’ equity $ 344,184  $ 12,735  $ 356,919  Dec. 31, 2005 as Reported Effect of Change in Accounting Principle Dec. 31 2005 as Adjusted   ASSETS Current assets $ 94,474  $ (6,158) $ 88,316  Vessels and equipment, net 233,572  69  233,641  Deferred costs, net -  21,405  21,405  Goodwill 2,863  2,863  Other 1,094  (883) 211  Total assets $ 332,003  $ 14,433  $ 346,436    LIABILITIES AND STOCKHOLDERS’ EQUITY Current liabilities $ 31,867  $ (6,583) $ 25,284  Non-current liabilities 106,153  1,003  107,156  Stockholders’ equity 193,983  20,013  213,996  Total liabilities and stockholders’ equity $ 332,003  $ 14,433  $ 346,436  Nine Months Ended Sept. 30, 2006 Pre Adoption Effect of Change in Accounting Principle Nine Months Ended Sept. 30, 2006 as Reported   Cash flows from operating activities: Net income $ 13,060  $ (91) $ 12,969  Total adjustments to net income 12,172  22  12,194  Net cash provided by operating activities 25,232  (69) 25,163  Cash flows from investing activities: Net cash used in investing activities (34,476) 69  (34,407) Cash flows from financing activities: Net cash used in financing activities (6,768) --  (6,768)   Net increase in cash and cash equivalents (16,012) (16,012) Cash and cash equivalents at beginning of period 58,794  --  58,794  Cash and cash equivalents at end of period $ 42,782  $ --  $ 42,782  Nine Months Ended Sept. 30, 2005 as Reported Effect of Change in Accounting Principle Nine Months Ended Sept. 30, 2005 as Adjusted   Cash flows from operating activities: Net income $ 16,912  $ 430  $ 17,342  Total adjustments to net income 20,812  (430) 20,382  Net cash provided by operating activities 37,724  --  37,724  Cash flows from investing activities: Net cash used in investing activities (39,181) (13,357) Cash flows from financing activities: Net cash used in financing activities (4,079) --  (3,694)   Net increase in cash and cash equivalents (5,536) (5,536) Cash and cash equivalents at beginning of period 6,347  --  6,347  Cash and cash equivalents at end of period $ 811  $ --  $ 811  Twelve Months Ended Dec. 31, 2005 as Reported Effect of Change in Accounting Principle Twelve Months Ended Dec. 31, 2005 as Adjusted   Revenues $ 180,710  $ 180,710  Costs and expenses: Operation expense 98,701  98,701  Maintenance expense 20,320  (14,075) 6,245  General and administrative 12,478  12,478  Depreciation and amortization 23,201  12,711  35,912  Gain on sale of assets (628)   (628) Total operating expenses 154,072  (1,364) 152,708  Operating income 26,638  1,364  28,002  Interest expense (2,846) (2,846) Interest income 393  393  Other income, net 4,203    4,203  Income before income taxes 28,388  1,364  29,752  Income tax provision 8,509  491  9,000  Net income $ 19,879  $ 873  $ 20,752    Basic earnings per share $ 2.33  $ 0.10  $ 2.43  Diluted earnings per share $ 2.28  $ 0.10  $ 2.38  Twelve Months Ended Dec. 31, 2005 as Reported Effect of Change in Accounting Principle Twelve Months Ended Dec. 31, 2005 as Adjusted   Cash flows from operating activities: Net income $ 19,879  $ 873  $ 20,752  Total adjustments to net income 19,731  (804) 18,927  Net cash provided by operating activities 39,610  69  39,679  Cash flows from investing activities: Net cash used in investing activities (64,222) (69) (64,291) Cash flows from financing activities: Net cash provided by financing activities 77,059  --  77,059    Net increase in cash and cash equivalents 52,447  52,447  Cash and cash equivalents at beginning of year 6,347  --  6,347  Cash and cash equivalents at end of year $ 58,794  $ --  $ 58,794  Twelve Months Ended Dec. 31, 2004 as Reported Effect of Change in Accounting Principle Twelve Months Ended Dec. 31, 2004 as Adjusted   Revenues $ 149,718  $ 149,718  Costs and expenses: Operation expense 80,517  80,517  Maintenance expense 20,761  (13,073) 7,688  General and administrative 11,709  11,709  Depreciation and amortization 22,193  15,582  37,775  Total operating expenses 135,180  2,509  137,689  Operating income 14,538  (2,509) 12,029  Interest expense (2,318) (2,318) Interest income 254  254  Other income, net 333    333  Income before income taxes 12,807  (2,509) 10,298  Income tax provision 2,975  (903) 2,072  Net income $ 9,832  $ (1,606) $ 8,226    Basic earnings per share $ 1.20  $ (0.20) $ 1.00  Diluted earnings per share $ 1.16  $ (0.19) $ 0.97  Twelve Months Ended Dec. 31, 2004 as Reported Effect of Change in Accounting Principle Twelve Months Ended Dec. 31, 2004 as Adjusted   Cash flows from operating activities: Net income $ 9,832  $ (1,606) $ 8,226  Total adjustments to net income 18,578  1,606  20,184  Net cash provided by operating activities 28,410  --  28,410  Cash flows from investing activities: Net cash used in investing activities (25,111) (25,111) Cash flows from financing activities: Net cash provided by in financing activities (566) --  (566)   Net increase in cash and cash equivalents 2,733  2,733  Cash and cash equivalents at beginning of year 3,614  --  3,614  Cash and cash equivalents at end of year $ 6,347  $ --  $ 6,347