NOTE L - SIGNIFICANT OPERATIONS

Major Customers

We have several medium to long-term contracts related to the operations of various vessels (See Note I – Commitments and Contingencies), from which revenues represent a significant amount of our total revenue. Revenues from the contracts with the MSC were $26,495,000, $34,401,000 and $32,012,000 for the years ended December 31, 2011, 2010 and 2009, respectively. In early 2009, we received notification from MSC that we had been excluded from further consideration for extending the current operating agreements on three U.S. Flag Roll-on/Roll-off vessels. Subsequently, the MSC has exercised options to extend the agreements several times with the most recent extension set to expire in February 2012 for all three vessels. The MSC reopened the bidding process, bids were submitted, and in January 2012 we were notified that we would not be awarded the contract. All three vessels operating contracts terminated in February 2012.

We have six U.S. Flag PCTCs, which carry automobiles for a Japanese charterer. Revenues from this customer were $32,766,000, $31,256,000 and $29,036,000 for the years ended December 31, 2011, 2010 and 2009, respectively. These six PCTCs and two container vessels, also qualified under the MSP. MSP Revenue was $23,441,000, $22,969,000 and $22,554,000 for the years ended December 31, 2011, 2010 and 2009, respectively. All of the aforementioned revenues are included in Time Charter – U.S. Flag segment.

These six U.S. Flag PCTCs also carry supplemental cargo for the U.S. Government. Revenues under these contracts were $39,425,000, $79,778,000, and $171,493,000 for the years ended December 31, 2011, 2010 and 2009, respectively.

We operated three International Flag PCTCs under various contracts that transport automobiles worldwide. Revenues under these contracts were $24,281,000, $25,566,000 and $25,883,000 for the years ended December 31, 2011, 2010 and 2009, respectively.All of the aforementioned revenues are included in our Time Charter-International Flag segment.

We have two Special Purpose vessels, which carry loaded rail cars between the U.S. Gulf Coast and Mexico. Revenues from this service were $36,267,000, $26,768,000 and $27,405,000 for the years ended December 31, 2011, 2010 and 2009, respectively. Revenues from these two Special Purpose vessels are included in our Rail-Ferry segment.

Concentrations

A significant portion of our traffic receivables is due from contracts with the MSC and transportation of government sponsored cargo. There are no concentrations of receivables from customers or geographic regions that exceeded 10% of stockholders' equity at December 31, 2011, 2010 or 2009.

With only minor exceptions related to personnel aboard certain International Flag vessels, all of our shipboard personnel are covered by collective bargaining agreements under multiple unions. The percentage of the Company's total work force that is covered by these agreements is approximately 78%.

Geographic Information

We have operations in several principal markets, including international service between U.S. Gulf Coast and East Coast ports and ports in Mexico, the Middle East and the Far East, and domestic transportation services along the U.S. Gulf Coast and East Coast. Revenues attributable to the major geographic areas of the world are presented in the following table. Revenues for our Time Charter Contracts-U.S. Flag, Time Charter Contracts-International Flag, Contract of Affreightment, Rail-Ferry Service, and Other segments are assigned to regions based on the location of the customer. Because we operate internationally, most of our assets are not restricted to specific locations. Accordingly, an allocation of identifiable assets to specific geographic areas is not applicable.

	Year Ended December 31,
(Amounts in thousands)	2011		2010		2009
United States	$	132,387	$	179,127	$	265,416
Asian Countries		86,342		84,146		86,000
Rail-Ferry Service Operating Between U.S. Gulf Coast and Mexico		36,422		26,768		27,405
Europe		7,341		-		-
Other Countries		704		8		1,130
Total Revenues	$	263,196	$	290,049	$	379,951

Operating Segments

Our operating segments are identified primarily based on the characteristics of the contracts or terms under which the fleet of vessels are operated. Each of the reportable segments is managed separately as each requires different resources depending on the nature of the contract or terms under which each vessel within the segment operates. Beginning in the second quarter 2010, we split Time Charter Contracts operations into two different operating segments, Time Charter Contracts – U.S. Flag and Time Charter Contracts – International Flag. Our operating segments are identified and described below.

Time Charter Contracts-U.S. Flag: Time charters are contracts by which our charterer obtains the right for a specified period to direct the movements and utilization of the vessel in exchange for payment of a specified daily rate, but we retain operating control over the vessel. Typically, we fully equip the vessel and are responsible for normal operating expenses, repairs, crew wages, and insurance, while the charterer is responsible for voyage expenses, such as fuel, port and stevedoring expenses. Our Time Charter Contracts-U.S. Flag segment includes contracts for commercial and supplementary cargo for six PCTCs, and an electric utility for a conveyor belt-equipped, self-unloading Coal Carrier. Also included in this segment are contracts under which the MSC chartered three RO/ROs under operating contracts, and contracts with another shipping company for two container vessels and one multi-purpose ice strengthened vessel. The operating contracts for the three RO/ROs expired effective February 10, 2012, February 13, 2012 and February 20, 2012, respectively, and were terminated on these dates.

Time Charter Contracts-International Flag: We operate this segment in the same manner as our Time Charter Contracts-U.S. Flag segment, except with International flagged vessels. Our Time Charter Contracts – International Flag segment includes contracts with Far Eastern and South American shipping companies for three PCTCs. Also included in this segment are two multi-purpose vessels, one tanker, and two container vessels which service ISC's long-term contract to transport supplies for a mining company's Indonesian operations. This segment also includes one Capesize Bulk Carrier that is part of a revenue sharing agreement with a European partner, and three Double Hull Handysize Bulk Carriers that are part of a revenue sharing agreement in Hong Kong.

Contract of Affreightment (“COA”): For this type of contract, we undertake to provide space on our vessel for the carriage of specified goods or a specified quantity of goods on a single voyage or series of voyages over a given period of time between named ports or within certain geographical areas in return for the payment of an agreed amount per unit of cargo carried. Generally, we are responsible for all operating and voyage expenses. Our COA segment includes one contract, which is for the transportation of molten sulphur.

Rail-Ferry Service: This service uses our two Roll-On/Roll-Off Special Purpose vessels, which carry loaded rail

cars between the U.S. Gulf Coast and Mexico. Each vessel currently has a capacity for 113 standard size rail cars. With departures every four days from Coatzacoalcos, Mexico and the U.S. Gulf Coast, it offers with each vessel a three-day transit between these ports and provides a total of 90 trips per year in each direction when both ships are operating.

Other: This segment consists of operations that include ship charter brokerage and agency services. Also included in the Other category are corporate related items, results of insignificant operations, and income and expense items not allocated to reportable segments.

The following table presents information about segment profit and loss and segment assets. We do not allocate administrative and general expenses, gains or losses on sales of investments, investment income, gains or losses on early extinguishment of debt, equity in net loss/income of unconsolidated entities, income taxes, or losses from discontinued operations to our segments. Intersegment revenues are based on market prices and include revenues earned by our subsidiaries that provide specialized services to the operating segments. Expenditures for segment assets represent cash outlays during the periods presented, including purchases of assets, improvements to assets, and drydock payments.

		Time Charter
(Amounts in thousands)	Time Charter Contracts-U.S. Flag	Contracts-International Flag	COA	Rail-Ferry Service	Other	Total
2011
Revenues from External Customers	$ 151,141	$ 55,827	$ 17,835	$ 36,422	$ 1,971	$ 263,196
Intersegment Revenues (Eliminated)	-	-	-	-	17,419	17,419
Intersegment Expenses (Eliminated)	-	-	-	-	(17,419)	(17,419)
Voyage Expenses	114,924	28,263	17,930	30,664	301	192,082
Depreciation	10,598	11,139	-	3,642	9	25,388
Gross Voyage Profit (Loss)	25,619	16,425	(95)	2,116	1,661	45,726
Interest Expense	3,423	5,778	-	721	439	10,361
Segment Profit (Loss)	22,196	10,647	(95)	1,395	1,222	35,365
Segment Assets	166,696	299,474	817	38,440	24,289	529,716
Expenditures for Segment Assets	47,538	114,305	115	4,483	99	166,540
2010
Revenues from External Customers	$ 197,311	$ 47,208	$ 16,283	$ 26,672	$ 2,575	$ 290,049
Intersegment Revenues (Eliminated)	-	-	-	-	18,642	18,642
Intersegment Expenses (Eliminated)	-	-	-	-	(18,642)	(18,642)
Voyage Expenses	139,269	29,588	16,930	22,648	912	209,347
Depreciation	9,755	2,982	-	5,181	11	17,929
Impairment Loss	-	-	-	25,430	-	25,430
Gross Voyage Profit (Loss)	48,287	14,638	(647)	(26,587)	1,652	37,343
Interest Expense	3,034	2,774	-	831	518	7,157
Segment Profit (Loss)	45,253	11,864	(647)	(27,418)	1,134	30,186
Segment Assets	136,402	195,594	1,832	40,511	24,721	399,060
Expenditures for Segment Assets	570	117,767	330	6,695	300	125,662
2009
Revenues from External Customers	$ 279,879	$ 50,966	$ 18,046	$ 27,891	$ 3,169	$ 379,951
Intersegment Revenues (Eliminated)	-	-	-	-	12,975	12,975
Intersegment Expenses (Eliminated)	-	-	-	-	(12,975)	(12,975)
Voyage Expenses	211,850	41,501	15,827	24,585	1,915	295,678
Depreciation	13,368	1,407	-	5,468	11	20,254
Impairment Loss	-	2,899	-	-	-	2,899
Gross Voyage Profit (Loss)	54,661	5,159	2,219	(2,162)	1,243	61,120
Interest Expense	3,240	892	-	1,427	551	6,110
Segment Profit (Loss)	51,421	4,267	2,219	(3,589)	692	55,010
Segment Assets	103,485	87,585	2,546	63,600	25,940	283,156
Expenditures for Segment Assets	11,726	78,305	2	4,686	1,544	96,263

Following is a reconciliation of the totals reported for the operating segments to the applicable line items in the consolidated financial statements:

(Amounts in thousands)	Year Ended December 31,
Profit or Loss:	2011			2010			2009
Total Profit for Reportable Segments	$	35,365		$	30,186		$	55,010
Unallocated Amounts:
Administrative and General Expenses		(20,961	)		(21,202	)		(22,641	)
Gain (Loss) on Sale of Other Assets		-			42			(2,209	)
Derivative Loss		(101	)		(426	)		-
(Loss) Gain on Sale of Investment		(747	)		213			980
Investment Income (Loss)		637			1,778			(72	)
Other Income from Vessel Financing		2,653			2,335			655
Foreign Exchange Loss		(3,051	)		(8,196	)		-
Gain on Dry Bulk Transaction		18,844			-			-
Income Before Provision (Benefit) for Income Taxes and
Equity in Net (Loss) Income of Unconsolidated Entities	$	32,639		$	4,730		$	31,723

(Amounts in thousands)	December 31,		December 31,
Assets:	2011		2010
Total Assets for Reportable Segments	$	529,716	$	399,060
Unallocated Amounts:
Current Assets		83,765		71,936
Investment in Unconsolidated Entities		12,800		27,261
Due from Related Parties		1,571		4,124
Other Assets		13		682
Notes Receivable		37,714		40,142
Total Assets	$	665,579	$	543,205