2004  OU T L OO acq u ire d ow n ers h i p p ar t ici p a t io n i n t h e  M e d u sa S p ar, a n d t h e acq u isi t io n i n Febr u ary 2004 of S t ol t O ffs h ore’s  d rill s u pp or t R O V flee t . Ear n i n gs are ex p ec t e d t o i n crease  t o $1.55 - $1.65  p er s h are  p re d ica t e d o n i mp rovi n g  d e m a n d for o u r s u bsea  p ro d u c t s a n d a co n t i n u a t io n  of c u rre n t m arke t  co n d i t io n s or si m ilar  d e m a n d t re n d s for o u r o t h er b u si n ess seg m e n t s.  T h is i n cl u d es  t h e  p rojec t e d fi n a n cial  be n efi t s  of  o u r  a nn o u n ce d 2004  u m bilical  m a n u fac t u ri n g ca p aci t y ex p a n sio n , o u r rece n t ly  SUBSEA PROJECTS INSPECTION ADVANCED TECHNOLOGIES N ear-recor d p erfor m a n ce  was ac h ieve d  o n t h e s t re n g t h  of i n crease d work for  t h e  U .S.  N avy rela t e d t o s u b m ari n e,  p ier,  a n d m oori n g re p airs a d t h e co n t rib u t io n of  t h e N a u t icos acq u isi t io . O u r s p ace  sys t e m s  d ivisio n wo n a  m l t i-year co n t rac t t o s u pp or t as t ro n a u a n d flig h t co n t roller  rai n i n g a t t h e Jo n so n  S p ace  C e n t er.  Recor d fi n a n cial  res u l t s  were ac h ieve d d u e  t o  t h e  O I S acq u isi t io n i n  Ja n u ary, w h ic m o r e  t h a n t ri p le d o u r i t er n a t io n al i n s p e c io services  m arke p rese n ce. Reve n u e  d ecli n e d  so m ew h a t  al t h o u g h we co n t i n u e d t o be s u ccessf u l i n fi n d i n g  work  i n a n ex t re m ely  co mp e t i t ive m arke t .  G ross  m argi n n seq u e n t ly  d e t eriora t e d d u e  t o  p rici n g  p ress u re a n d t h e abse n ce of a very  p rofi t able e n gi eeri n g a d d ivi n g services co n t rac t  o n  a  p ro d u c t io n  s p ar co mp le t e d d u ri n g 2002. W e are ex p ec t i n g a n o t h er goo d year ge n erally for all of o u r services. F u r t h er m ore, we are aggressively p rs u i n g  n ew co n t rac t  o pp or t u n i t ies rela t e d t o co mm ercial a n d  gover m e n t co mp u er si m u la t io a pp lica t io s, a dd i t io n al vessel rela t e d  work for  t h e N avy, a d N ASA  p rogra m s associa e d wi t h t h e re t u r n t o flig h t  of  t h e s p ace s h u tt les. Profi t abili t y is ex p ec t e d t o co n t i n u e t o rise as we  m ark t t ec h ically a d va n ce d i n s p ec t io n ca p abili t ies  t o  o u r  p reexis i g C u s t o m er  base a n d realize a d d i t io n al cos t co n soli d a t io n  be n efi t s . Perfor m a n ce of  t h ese o p era t io n s is ex p ec t e d t o be co mp arable i n  lig h t  of t h e  p ersis e n ce of very co mp e t i ive m arke t co d i t io n s i n t h e  G u lf of M exico for o u r vessel-base d services a n d m a nn e d d ivi n g o p era t io n s. 2003AnnualRepo r t O ceanee r ing  I n t e r na t ional P a ge 5