UNITED STATES
                       SECURITIES AND EXCHANGE COMMISSION
                              Washington, DC 20549
                                    FORM 10-Q

(Mark One)

 X    Quarterly Report Pursuant to Section 13 or 15(d) of the Securities
---
      Exchange Act of 1934

For the Quarterly Period ended June 30, 2002
                               -------------

                                       or

___   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 1-9063
                       ------

                                 MARITRANS INC.
                                 --------------
             (Exact name of registrant as specified in its charter)

           DELAWARE                                             51-0343903
-------------------------------                                 ----------
(State or other jurisdiction of                            (Identification No.
 incorporation or organization)                              I.R.S. Employer)

                                TWO HARBOUR PLACE
                             302 KNIGHTS RUN AVENUE
                                   SUITE 1200
                              TAMPA, FLORIDA 33602
                              --------------------
                    (Address of principal executive offices)
                                   (Zip Code)

                                 (813) 209-0600
                                 --------------
               Registrant's telephone number, including area code

              (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 requirements
for the past 90 days.

                                    Yes  X  No
                                        ---

       Common Stock $.01 par value, 8,194,576 shares outstanding as of August 9,
2002

                                        1



                                 MARITRANS INC.
                                      INDEX



                                                                                                       Page
                                                                                                       ----
                                                                                                    
PART I.     FINANCIAL INFORMATION

Item 1.     Financial Statements (Unaudited)

            Condensed Consolidated Balance Sheets - June 30, 2002 and December 31, 2001                  3

            Condensed Consolidated Statements of Income - Three months ended June 30, 2002
              and 2001                                                                                   4

            Condensed Consolidated Statements of Income - Six months ended June 30, 2002
              and 2001                                                                                   5

            Condensed Consolidated Statements of Cash Flows - Six months ended June 30, 2002
              and 2001                                                                                   6

            Notes to Condensed Consolidated Financial Statements                                         7

Item 2.     Management's Discussion and Analysis of Financial Condition and Results of Operations       10

Item 3.     Qualitative and Quantitative Disclosures About Market Risk                                  18

PART II.    OTHER INFORMATION

Item 1.     Legal Proceedings                                                                           19

Item 4.     Submission of Matters to a Vote of Security Holders                                         19

Item 6.     Exhibits and Reports on Form 8-K                                                            20

SIGNATURES                                                                                              21


                                        2



                          PART I: FINANCIAL INFORMATION

                                 MARITRANS INC.
                      CONDENSED CONSOLIDATED BALANCE SHEETS
                                     ($000)



                                                                      June 30,             December 31,
                                                                       2002                   2001
                                                                  ---------------------------------------
                                                                    (Unaudited)             (Note 1)
                                                                                     
ASSETS

Current assets:
     Cash and cash equivalents                                       $   1,658              $   3,558
     Trade accounts receivable                                           8,701                  8,703
     Other accounts receivable                                           4,016                  3,620
     Inventories                                                         2,684                  2,453
     Deferred income tax benefit                                         7,258                  7,258
     Prepaid expenses                                                    2,958                  2,659
                                                                     ---------              ---------
          Total current assets                                          27,275                 28,251

Vessels and equipment                                                  319,546                307,540
     Less accumulated depreciation                                     153,116                144,223
                                                                     ---------              ---------
          Net vessels and equipment                                    166,430                163,317

Note receivable                                                          4,026                  4,271
Goodwill                                                                 2,863                  2,863
Other                                                                    1,273                  1,725
                                                                     ---------              ---------
          Total assets                                               $ 201,867              $ 200,427
                                                                     =========              =========

LIABILITIES AND STOCKHOLDERS' EQUITY

Current liabilities:
     Debt due within one year                                        $   5,250              $  10,738
     Trade accounts payable                                              1,983                    681
     Accrued shipyard costs                                              4,099                  6,370
     Accrued wages and benefits                                          3,001                  2,098
     Other accrued liabilities                                           5,431                  2,353
                                                                     ---------              ---------
          Total current liabilities                                     19,764                 22,240

Long-term debt                                                          59,500                 32,250
Deferred shipyard costs                                                  6,149                  9,555
Other liabilities                                                        3,715                  3,527
Deferred income taxes                                                   44,791                 44,791

Stockholders' equity:
     Common stock                                                          135                    133
     Capital in excess of par value                                     81,034                 79,781
     Retained earnings                                                  34,060                 29,983
     Unearned compensation                                              (1,100)                  (855)
     Less: Cost of shares held in treasury                             (46,181)               (20,978)
                                                                     ---------              ---------
          Total stockholders' equity                                    67,948                 88,064
                                                                     ---------              ---------
          Total liabilities and stockholders' equity                 $ 201,867              $ 200,427
                                                                     =========              =========


     See notes to financial statements.

                                        3



                                 MARITRANS INC.
                   CONDENSED CONSOLIDATED STATEMENTS OF INCOME
                                   (Unaudited)
                        ($000, except per share amounts)



                                                      April 1 to                April 1 to
                                                     June 30, 2002            June 30, 2001
                                                 --------------------------------------------
                                                                        
Revenues                                               $32,468                   $31,834

Costs and expenses:
  Operation expense                                     17,287                    16,325
  Maintenance expense                                    3,634                     3,780
  General and administrative                             2,058                     1,911
  Depreciation and amortization                          4,751                     4,482
                                                       -------                   -------

  Total operating expense                               27,730                    26,498
                                                       -------                   -------

Operating income                                         4,738                     5,336

Interest expense                                          (555)                   (1,392)
Other income                                               232                       820
                                                       -------                   -------

Income before income taxes                               4,415                     4,764

Income tax provision                                     1,656                     1,810
                                                       -------                   -------

Net income                                             $ 2,759                   $ 2,954
                                                       =======                   =======

Basic earnings per share                               $  0.35                   $  0.29
Diluted earnings per share                             $  0.32                   $  0.28
Dividends declared per share                           $  0.10                   $  0.10


See notes to financial statements.

                                        4



                                 MARITRANS INC.
                   CONDENSED CONSOLIDATED STATEMENTS OF INCOME
                                   (Unaudited)
                        ($000, except per share amounts)

                                            January 1 to         January 1 to
                                           June 30, 2002        June 30, 2001
                                           ----------------------------------

Revenues                                   $      63,791        $      63,401

Costs and expenses:
  Operation expense                               32,919               32,966
  Maintenance expense                              7,458                7,488
  General and administrative                       3,993                3,801
  Depreciation and amortization                    9,372                8,913
                                           -------------        -------------

  Total operating expense                         53,742               53,168
                                           -------------        -------------

Operating income                                  10,049               10,233

Interest expense                                  (1,361)              (2,987)
Other income, net                                    458                1,809
                                           -------------        -------------

Income before income taxes                         9,146                9,055

Income tax provision                               3,430                3,441
                                           -------------        -------------

Net income                                 $       5,716        $       5,614
                                           =============        =============

Basic earnings per share                   $        0.70        $        0.55
Diluted earnings per share                 $        0.64        $        0.52
Dividends declared per share               $        0.20        $        0.20

See notes to financial statements.

                                        5



                                 MARITRANS INC.
                 CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS
                                   (Unaudited)
                                     ($000)



                                                                                            Six Months Ended June 30,
                                                                                          2002                 2001
                                                                                    -------------------------------------
                                                                                                        
Cash flows from operating activities:
     Net income                                                                         $  5,716             $  5,614
     Adjustments to reconcile net income to net cash
     provided by (used in) operating activities:
          Depreciation and amortization                                                    9,372                8,913
          Stock compensation                                                                  76                  311
          Changes in receivables, inventories and prepaid expenses                          (924)                (406)
          Changes in current liabilities, other than debt                                  3,012               (4,427)
          Non-current changes, net                                                        (3,041)              (1,756)
          (Gain) loss on sale of fixed assets                                                  -                 (172)
                                                                                        --------             --------
                                                                                           8,495                2,463
                                                                                        --------             --------

          Net cash provided by operating activities                                       14,211                8,077

Cash flows from investing activities:
     Release of cash and cash equivalents - restricted                                         -                9,043
     Collections on notes receivable                                                         520                  233
     Cash proceeds from sale of equipment                                                      -                  175
     Purchase of vessels and equipment                                                   (12,485)              (3,177)
                                                                                        --------             --------

          Net cash provided by (used in) investing activities                            (11,965)               6,274
                                                                                        --------             --------

Cash flows from financing activities:
     Borrowings under long term debt                                                       9,000                    -
     Payment of long-term debt                                                            (8,238)             (13,180)
     Net borrowings under revolving credit facilities                                     21,000                    -
     Purchase of treasury stock                                                          (25,147)              (5,826)
     Proceeds from exercise of stock options                                                 879                    4
     Dividends declared and paid                                                          (1,640)              (2,113)
                                                                                        --------             --------

          Net cash used in financing activities                                           (4,146)             (21,115)
                                                                                        --------             --------

Net decrease in cash and cash equivalents                                                 (1,900)              (6,764)
Cash and cash equivalents at beginning of period                                           3,558               36,598
                                                                                        --------             --------

Cash and cash equivalents at end of period                                              $  1,658             $ 29,834
                                                                                        ========             ========


     See notes to financial statements

                                       6



                                 MARITRANS INC.
              NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
                                  JUNE 30, 2002

1.      Basis of Presentation/Organization

        Maritrans Inc. owns Maritrans Operating Partners L.P. ("the Operating
        Partnership"), Maritrans General Partner Inc., Maritrans Tankers Inc.,
        Maritrans Barge Co., Maritrans Holdings Inc. and other Maritrans
        entities (collectively, the "Company"). These subsidiaries, directly and
        indirectly, own and operate oil tankers, tugboats and oceangoing
        petroleum tank barges principally used in the transportation of oil and
        related products, along the Gulf and Atlantic coasts.

        In the opinion of management, the accompanying condensed consolidated
        financial statements of Maritrans Inc., which are unaudited (except for
        the Condensed Consolidated Balance Sheet as of December 31, 2001, which
        is derived from audited financial statements), include all adjustments
        (consisting of normal recurring accruals) necessary to present fairly
        the financial statements of the consolidated entities.

        The preparation of financial statements in conformity with accounting
        principles generally accepted in the United States requires management
        to make estimates and assumptions that affect the amounts reported in
        the financial statements and accompanying notes. Actual results could
        differ from those estimates.

        Pursuant to the rules and regulations of the Securities and Exchange
        Commission, the unaudited condensed consolidated financial statements do
        not include all of the information and notes normally included with
        annual financial statements prepared in accordance with generally
        accepted accounting principles. These financial statements should be
        read in conjunction with the consolidated historical financial
        statements and notes thereto included in the Company's Form 10-K for the
        period ended December 31, 2001.

                                       7



2.   Earnings per Common Share

     The following data shows the amounts used in computing basic and diluted
earnings per share ("EPS"):




                                                     Three Months Ended              Six Months Ended
                                                          June 30,                       June 30,
                                                    2002            2001            2002           2001
                                                    ----            ----            ----           ----
                                                           (000's)                       (000's)
                                                                                     
     Income available to common stockholders
       used in basic EPS                          $  2,759        $  2,954        $ 5,716        $ 5,614

     Weighted average number of common
       shares used in basic EPS                      7,889          10,023          8,205         10,175

     Effect of dilutive securities:
       Stock options and restricted shares             699             537            678            598

     Weighted number of common shares
       and dilutive potential common
       stock used in diluted EPS                     8,588          10,560          8,883         10,773


3.   Income Taxes

     The Company's effective tax rate differs from the federal statutory rate
     due primarily to state income taxes and certain nondeductible items.

4.   Share Buyback Program

     On February 9, 1999, the Board of Directors authorized a share buyback
     program for the acquisition of up to one million shares of the Company's
     common stock. In February 2000 and again in February 2001, the Board of
     Directors authorized the acquisition of an additional one million shares in
     the program. The total authorized shares under the program is three
     million. As of June 30, 2002, 2,398,700 shares have been repurchased under
     the plan and were financed from internally generated funds, leaving 601,300
     shares authorized for repurchase.

5.   Tender Offer

     In December 2001, the Company announced a self-tender offer (the "Offer")
     to purchase up to 2,000,000 shares of its common stock. On January 18,
     2002, the Offer closed, and the Company subsequently purchased 2,176,296
     shares of common stock for a purchase price of $11.50 per share, or
     approximately $25.0 million, on January 29, 2002. The purchase price was
     funded through borrowings under the Company's Credit Facility (as defined
     in Item II).

                                       8



6.   Impact of Recent Accounting Pronouncements

     In June 2001, the Financial Accounting Standards Board issued Statements of
     Financial Accounting Standards No. 141, Business Combinations, and No. 142,
     Goodwill and Other Intangible Assets, effective for fiscal years beginning
     after December 15, 2001. Under the new rules, goodwill is no longer
     amortized but is subject to the annual impairment tests in accordance with
     the Statements. Other intangible assets continue to be amortized over their
     useful lives. The Company adopted the new rules on accounting for goodwill
     and other intangible assets on January 1, 2002. A reconciliation of net
     income for the three and six months ended June 30, 2001 had goodwill not
     been amortized pursuant to FASB No. 142 is as follows:



                                                         Three Months Ended    Six Months Ended
                                                           June 30, 2001         June 30, 2001
                                                           -------------         -------------
                                                                          ($000)
                                                                         

          Net income as reported                              $2,954                $5,614
          Elimination of goodwill amortization                    70                   140
                                                              ------                ------
          Adjusted net income                                 $3,024                $5,754
                                                              ======                ======
          Adjusted basic earnings per share                   $  .30                $  .57
                                                              ======                ======
          Adjusted diluted earnings per share                 $  .29                $  .53
                                                              ======                ======


     The Company has completed the first of the required impairment tests of
     goodwill as of January 1, 2002 and the Company has concluded that there is
     no impairment of goodwill recorded on the accompanying balance sheet.

                                       9



ITEM 2. MANAGEMENT'S DISCUSSION AND ANALYSIS OF
FINANCIAL CONDITION AND RESULTS OF OPERATIONS

Forward Looking Information

Some of the statements in this Form 10-Q (this "10-Q") constitute
forward-looking statements under 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.

The forward-looking statements included in this 10-Q relate to future events or
the Company's future financial performance. 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 the Company's current plans or
assessments that are believed to be reasonable as of the date of this 10-Q.
Factors that may cause actual results, goals, targets or objectives to differ
materially from those contemplated, projected, forecasted, estimated,
anticipated, planned or budgeted in such forward-looking statements include,
among others, the factors outlined in this 10-Q, changes in oil companies'
operating and sourcing decisions, competition for marine transportation,
domestic oil consumption, the continuation of federal law restricting United
States point-to-point maritime shipping to U.S. vessels (the Jones Act), demand
for petroleum products, future spot market rates, out of service time for vessel
maintenance, increased expenses due to regulatory and customer requirements,
changes in interest rates, the effect of terrorists activities and the general
financial, economic, environmental and regulatory conditions affecting the oil
and marine transportation industry in general. Given such uncertainties, current
or prospective investors are cautioned not to place undue reliance on any such
forward-looking statements. These factors may cause the Company's actual results
to differ materially from any forward-looking statement.

Although the Company believes that the expectations in the forward-looking
statements are reasonable, the Company cannot guarantee future results, levels
of activity, performance, growth, earnings per share or achievements. However,
neither the Company nor any other person assumes responsibility for the accuracy
and completeness of such statements.

                                       10



The Company is under no duty to update any of the forward-looking statements
after the date of this 10-Q to conform such statements to actual results.

The following discussion should be read in conjunction with the unaudited
financial statements and notes thereto included in Part I Item 1 of this Form
10-Q and the audited financial statements and notes thereto and Management's
Discussion and Analysis of Financial Condition and Results of Operations for the
year ended December 31, 2001 contained in the Company's Annual Report on Form
10-K for the year ended December 31, 2001.

Results of Operations

Time Charter Equivalent ("TCE") is a commonly used industry measure where direct
voyage costs are deducted from revenue. Maritrans enters into various types of
charters, some of which involve the customer paying substantially all voyage
costs, while other types of charters involve Maritrans paying some or
substantially all of the voyage costs. The Company monitors the TCE basis
because it essentially nets the voyage costs and voyage revenue to yield a
measure that is comparable between periods regardless of the types of charters
utilized. The Company began reporting on the TCE basis in the first quarter of
2002. For comparison purposes, the following table lists the TCE revenue for all
quarters in 2002 and 2001:



                              6/30/02    3/31/02    12/31/01    9/30/01    6/30/01    3/31/01
                              -------    -------    --------    -------    -------    -------
                                                                    
Voyage revenue                $32,468    $31,323     $31,716    $28,276    $31,826    $31,558
Voyage costs                    4,970      4,381       4,803      4,995      5,707      5,997
                              -------    -------     -------    -------    -------    -------
Time Charter Equivalent       $27,498    $26,942     $26,913    $23,281    $26,119    $25,561
                              =======    =======     =======    =======    =======    =======



Three Month Comparison

TCE revenue for the quarter ended June 30, 2002 compared to the quarter ended
June 30, 2001 is as follows:

                                      6/30/02     6/30/01
                                      -------     -------

Voyage revenue                        $32,468     $31,826
Voyage costs                            4,970       5,707
                                      -------     -------
Time Charter Equivalent               $27,498     $26,119
                                      =======     =======

TCE revenue increased from $26.1 million in the second quarter of 2002 to $27.5
million, or 5 percent, over the comparable quarter in 2001. Vessel utilization,
as measured by revenue days divided by calendar days available,

                                       11



decreased from 87.1 percent in the second quarter of 2001 to 82.6 percent in the
second quarter of 2002. Utilization decreased due to more vessel out of service
time in the second quarter of 2002 compared to the second quarter of 2001 as a
result of vessel maintenance and the OCEAN 250 rebuild. In late May 2002, the
OCEAN 250 went out of service for her double hull rebuild and is scheduled to
re-enter service in the fourth quarter 2002.

Term contract rates renewed with customers in 2001 were renewed at higher levels
than those experienced in 2000 on long-term contracts. The increase in these
rates resulted from a more stable supply/demand relationship in the Jones Act
trade. These rate increases had a positive impact on the second quarter of 2002
revenue. Spot market rates were significantly lower in the second quarter of
2002 than the same period in 2001 due to high gasoline inventories and a
decreased demand for jet fuel. The Company believes the spot market continues to
be weak due to the decrease in demand for distillate, particularly jet fuel, and
to an increase in the amount of gasoline imported into the United States, which
results in less demand for the Company's services. The Company currently expects
spot rates to continue to be depressed for the remainder of 2002. Barrels of
cargo transported decreased from 48.9 million in the second quarter of 2001 to
43.3 million in the second quarter of 2002, due to decreases in demand and
utilization during the quarter (as discussed above).

Voyage costs decreased from $5.7 million in the second quarter of 2001 to $5.0
million in the second quarter of 2002, a decrease of $0.7 million or 12 percent.
The primary decrease in voyage costs was in fuel costs, which resulted from the
downturn in the economy in the later part of 2001. The average price per gallon
of fuel decreased approximately 14 percent compared to the same quarter in 2001.

Operating expenses, excluding voyage costs discussed above, increased from $10.6
million in the second quarter of 2001 to $12.3 million in the second quarter of
2002, an increase of $1.7 million or 16 percent. Insurance costs increased in
the second quarter of 2002 compared to the second quarter of 2001 as the result
of increased premiums charged by the insurance companies on policies renewed and
to additional incidents in the current quarter. Charter hire expense increased
in the second quarter of 2002 compared to the second quarter of 2001 as the
result of the Company chartering in equipment from third parties to replace a
tug/barge unit that was out of service for scheduled maintenance. In the second
quarter of 2002, the Company engaged in a synthetic rope replacement program for
most of the tugboats, resulting in an increase in supplies expense compared to
the second quarter of 2001. Routine maintenance expenses incurred during voyages
and in port have declined in the second quarter of 2002 compared to the second
quarter of 2001, while expenditure levels for maintenance incurred in shipyards
has increased. This reflects efforts being made to meet increased regulatory and
customer vetting requirements. These expenses are expected to continue to
increase and result in higher maintenance accruals in 2002 compared to 2001.
Professional fees increased in the second quarter 2002 compared to the second
quarter 2001 for consulting fees incurred to review port security and other
security issues. Seagoing salary increases, which took effect early in 2002,
increased crew costs in the second quarter of 2002 compared to the second
quarter of 2001.

                                       12



General and administrative fees increased due to increased professional fees
including higher litigation costs in the second quarter 2002 compared to the
second quarter 2001. These litigation costs arose from both immaterial
litigation arising in the ordinary course of business and the proceedings
described in Part II Item I of this Form 10-Q.

Operating income decreased as a result of the aforementioned changes in revenue
and expenses.

Interest expense in the second quarter of 2002 of $0.6 million decreased
compared to $1.4 million in the second quarter of 2001 as a result of the
refinancing of debt that took place in the fourth quarter of 2001. The new debt
has a variable interest rate, which is lower than the fixed interest rate of
9.25 percent on most of the previously held debt and therefore resulted in
decreased interest expense when compared to the second quarter of 2001.

Other income in the second quarter of 2002 was $0.2 million compared to other
income in the second quarter of 2001 of $0.8 million. Other income is made up
primarily of interest income. Interest income decreased due to a lower amount of
cash invested in the second quarter of 2002 compared to the second quarter of
2001. The decrease in the average cash balance is primarily the result of the
debt refinancing discussed above.

Net income for the quarter ended June 30, 2002 decreased compared to the quarter
ended June 30, 2001 due to the aforementioned changes in revenue and expenses.

Six Month Comparison

TCE revenue for the six months ended June 30, 2002 compared to the six months
ended June 30, 2001 is as follows:

                                     6/30/02       6/30/01
                                     -------       -------

Voyage revenue                       $63,791       $63,384
Voyage costs                           9,351        11,704
                                     -------       -------
Time Charter Equivalent              $54,440       $51,680
                                     =======       =======

TCE revenue increased from $51.7 million in the six months ended June 30, 2001
to $54.4 million in the six months ended June 30, 2002, or 5 percent. Vessel
utilization, as measured by revenue days divided by calendar days available,
decreased from 87.4 percent in the six months ended June 30, 2001 to 82.8
percent in the six months ended June 30, 2002. Utilization decreased due to more
vessel out of service time in the six months ended June 30, 2002 compared to the
six

                                       13



months ended June 30, 2001 as a result of vessel maintenance and the OCEAN 250
rebuild. In late May 2002, the OCEAN 250 went out of service for her double hull
rebuild and is scheduled to re-enter service in the fourth quarter 2002.

Term contract rates renewed with customers in 2001 were renewed at higher levels
than those experienced in 2000 on long-term contracts. The increase in these
rates resulted from a more stable supply/demand relationship in the Jones Act
trade. These rate increases had a positive impact on 2002 revenue. Spot market
rates were significantly lower in the six months ended June 30, 2002 than in the
same period in 2001 due to high gasoline inventories and a decreased demand for
jet fuel. In addition, warm weather in the Northeast reduced the demand for
heating oil. The Company believes the spot market continues to be weak due to
the decrease in demand for distillate, particularly jet fuel, and to an increase
in the amount of gasoline imported into the United States, which results in less
demand for the Company's services. The Company currently expects spot rates to
continue to be depressed in the remainder of 2002. Barrels of cargo transported
decreased from 95.1 million in the six months ended June 30, 2001 to 86.2
million in the six months ended June 30, 2002, due to decreases in demand and
utilization (as discussed above).

Voyage costs decreased from $11.7 million in the six months ended June 30, 2001
to $9.4 million in the six months ended June 30, 2002, a decrease of $2.3
million or 20 percent. The primary decrease in voyage costs was in fuel costs,
which resulted from the downturn in the economy in the later part of 2001. The
average price per gallon of fuel decreased approximately 28 percent compared to
the same six months in 2001. Slightly offsetting the decrease in fuel costs, was
an increase in port charges. During the first quarter of 2002, one of the
Company's tankers made numerous trips through the Panama Canal, which resulted
in increased port charges.

Operating expenses, excluding voyage costs discussed above, increased from $21.3
million in the six months ended June 30, 2001 to $23.6 million in the six month
ended June 30, 2002, an increase of $2.3 million or 11 percent. Insurance costs
increased in the six months ended June 30, 2002 compared to the six months ended
June 30, 2001 as the result of increased premiums charged by the insurance
companies on policies renewed and to additional incidents in the current year.
Charter hire expense increased in the six months ended June 30, 2002 compared to
the six months ended June 30, 2001 as the result of the Company chartering in
equipment in the second quarter of 2002 from third parties to replace a
tug/barge that was out of service for scheduled maintenance. In the six months
ended June 30, 2002, the Company engaged in a synthetic rope replacement program
for most of the tugboats resulting in an increase in supplies expense compared
to the same period in 2001. Routine maintenance expenses incurred during voyages
and in port have declined in the six months ended June 30, 2002 compared to the
six months ended June 30, 2001, while expenditure levels for maintenance
incurred in shipyards has increased. This reflects efforts being made to meet
increased regulatory and customer vetting requirements. These expenses are
expected to continue to increase and result in higher maintenance accruals in
2002 compared to 2001. Professional fees increased in the six months ended June
30, 2002 compared to the six months ended June 30, 2001 for consulting fees
incurred to review port security and other security issues. Seagoing salary
increases, which took effect

                                       14



early in 2002, increased crew costs in the six months ended June 30, 2002
compared to the six month ended June 30, 2001.

General and administrative fees increased due to increased professional fees
including higher litigation costs in the six months ended June 30, 2002 compared
to the six months ended June 30, 2001. These litigation costs arose from both
immaterial litigation arising in the ordinary course of business and the
proceedings described in Part II Item I of this Form 10-Q.

Operating income decreased as a result of the aforementioned changes in revenue
and expenses.

Interest expense in the six months ended June 30, 2002 of $1.4 million decreased
compared to $3.0 million in the six months ended June 30, 2001 as a result of
the refinancing of debt that took place in the fourth quarter of 2001. The new
debt has a variable interest rate, which is lower than the fixed interest rate
of 9.25 percent on most of the previously held debt and therefore resulted in
decreased interest expense when compared to the same period in 2001.

Other income in the six months ended June 30, 2002 was $0.5 million compared to
other income in the six months ended June 30, 2001 of $1.8 million. Other income
is made up primarily of interest income. Interest income decreased due to a
lower amount of cash invested in the first half of 2002 compared to the first
half of 2001. The decrease in the average cash balance is primarily the result
of the debt refinancing discussed above.

Net income for the six months ended June 30, 2002 increased compared to the six
months ended June 30, 2001 due to the aforementioned changes in revenue and
expenses.

Liquidity and Capital Resources

For the six months ended June 30, 2002, net cash provided by operating
activities was $14.2 million. These funds, augmented by the Company's Credit
Facility, were sufficient to meet debt service obligations and loan agreement
restrictions, to make capital acquisitions and improvements and to allow
Maritrans Inc. to pay a dividend in the current quarter. Management believes
funds provided by operating activities, augmented by the Company's Credit
Facility, described below, and investing activities, will be sufficient to
finance operations, anticipated capital expenditures, lease payments and
required debt repayments in the foreseeable future. While dividends have been
made quarterly in each of the last three years, there can be no assurances that
the dividend will continue. The ratio of total debt to capitalization is .49:1
at June 30, 2002.

                                       15



On February 9, 1999, the Board of Directors authorized a share buyback program
for the acquisition of up to one million shares of the Company's common stock,
which represented approximately 8 percent of the 12.1 million shares outstanding
at that time. In February 2000 and again in February 2001, the Board of
Directors authorized the acquisition of an additional one million shares in the
program. The total authorized shares under the buyback program is three million.
As of June 30, 2002, 2,398,700 shares had been purchased under the plan and
financed by internally generated funds. The Company intends to hold the majority
of the repurchased shares as treasury stock; although some shares will be used
for employee compensation plans and others may be used for acquisition currency
and/or other corporate purposes.

In August 2000, the Company awarded a contract to rebuild a third large single
hull barge, the OCEAN CITIES, to a double hull configuration. In February 2002,
this vessel was completed and put back into service as the MARITRANS 252. The
total cost of the rebuild and other improvements made while in the shipyard was
$17.5 million. The Company financed this project from internally generated
funds.

In September 2001, the Company awarded a contract to rebuild a fourth large
single hull barge, the OCEAN 250, to a double hull configuration. The Company
expects the total cost of the rebuild and other improvements will be
approximately $18.0 million. As of June 30, 2002, $8.2 million has been paid to
the shipyard contractor for prefabrication and other advance design work. The
Company has financed, and expects to continue the financing of, this project
from a combination of internally generated funds and borrowings under the
Company's Credit Facility.

In October 2001, the Company repaid $33.0 million of its long-term debt in
advance of its due date. The Company recorded an extraordinary charge of
approximately $2.5 million, net of taxes, or approximately $0.24 per share, in
prepayment penalties and the write-off of unamortized financing costs in the
fourth quarter of 2001 as a result of the repayment.

In December 2001, the Company announced a self-tender offer (the "Offer") to
purchase up to 2,000,000 shares of its common stock at a price between $11.00
and $12.50. On January 18, 2002, the Offer closed, and the Company subsequently
purchased 2,176,296 shares of common stock for a purchase price of $11.50 per
share, or approximately $25.0 million. The purchase price was funded through
borrowings under the Company's Credit Facility.

In July 2002, the Company received a $0.5 million litigation award that will be
recorded as other income in the third quarter. Also, in July, the Company
entered into an agreement to sell property not currently used in operations,
which would result in an after tax gain of approximately $0.8 million. There are
various closing conditions that need to be met before this sale is completed,
therefore it will be recorded in other income in the period the transaction is
consummated.

                                       16



Debt Obligations and Borrowing Facility

In November 2001, the Company entered into an $85 million credit and security
agreement ("Credit Facility") with Citizens Bank (formerly Mellon Bank N.A.) and
a syndicate of other financial institutions ("Lenders"). Pursuant to the terms
of the Credit Facility, the Company can borrow up to $45 million of term loans
and up to $40 million under a revolving credit facility. Interest is variable
based on either the LIBOR rate or prime rate plus an applicable margin (as
defined in the loan documents). Principal payments on the term loans are
required on a quarterly basis. The Credit Facility expires in January 2007. The
Company has granted first preferred ship mortgages and a first security interest
in certain vessels and other collateral to the Lenders as a guarantee of the
debt. At June 30, 2002, there was $43.8 million of term loans outstanding under
the Credit Facility and $21 million outstanding under the revolving Credit
Facility.

Critical Accounting Policies

Accounting policies that management believes are most critical to the Company's
financial condition and operating results pertain to the valuation of accounts
receivable, notes receivable, goodwill and the accrual for maintenance and
repairs (discussed below). In developing estimates management considered
available information and used judgment.

Maintenance and Repairs

Provision is made for the cost of upcoming major periodic overhauls of vessels
and equipment in advance of performing the related maintenance and repairs. The
current portion of this estimated cost is included in accrued shipyard costs
while the portion of this estimated cost not expected to be incurred within one
year is classified as long-term. Although the shipyard costs have fluctuated,
particularly as a result of changes in the size of the fleet, the provision has
been in line with the actual disbursements over time. The Company believes that
providing for such overhauls in advance of performing the related maintenance
and repairs provides a more appropriate view of the financial position of the
Company at any point in time.

In June 2001, the AICPA issued an Exposure Draft on a Proposed Statement of
Position regarding Accounting for Certain Costs and Activities Related to
Property, Plant, and Equipment. The Proposed Statement, if issued, would require
the Company to modify its accounting policy for maintenance and repairs. Such
costs would no longer be accrued in advance of performing the related
maintenance and repairs; rather, the Proposed Statement would require these
costs to be capitalized and amortized over their estimated useful life. The
Company has not yet quantified the impact of adopting this Proposed Statement on
its financial statements; however, the Company's preliminary assessment is that
the adoption of this pronouncement would increase the recorded value of vessels
and equipment and stockholders' equity of the Company.

                                       17



Impact of Recent Accounting Pronouncements

The Company adopted Statement of Financial Accounting Standards ("SFAS") No. 142
"Goodwill and Intangible Assets" as of January 1, 2002. SFAS No. 142 provides
that goodwill and intangible assets with indefinite lives will not be amortized.
As such, the Company did not record goodwill amortization for the three months
and six months ended June 30, 2002. Rather, the Company performed an impairment
test on its net carrying value as of January 1, 2002, its initial test, as
required by SFAS No. 142. The Company was not required to record an impairment
charge based on its test. The test required estimates, assumptions and judgments
and results could be materially different if different estimates, assumptions
and judgments had been used.

ITEM 3. QUALITATIVE AND QUANTITATIVE DISCLOSURES ABOUT MARKET RISK

The principal market risk to which the Company is exposed is a change in
interest rates on debt instruments. The Company manages its exposure to changes
in interest rate fluctuations by optimizing the use of fixed and variable rate
debt. The table below presents principal cash flows and the related interest
rates by year of maturity. Variable interest rates disclosed fluctuate with the
LIBOR and federal fund rates and represent the weighted average rate at June 30,
2002.

EXPECTED YEARS OF MATURITY

(Dollars in $000's)



                                          2002*     2003     2004     2005       2006        2007      Total
                                          ----      ----     ----     ----       ----        ----      -----
                                                                                 
Long-term debt, including current
   portion:
Variable rate                            2,500     5,750    7,500   11,000     13,500      24,500     64,750
Average interest rate (%)                 3.99      3.99     3.99     3.99       3.99        3.99


*for the period July 1, 2002 to December 31, 2002.

                                       18



Part II: OTHER INFORMATION

ITEM 1.   Legal Proceedings

          In 1996, Maritrans filed suit against the United States government
          under the Fifth Amendment to the U.S. Constitution for "taking"
          Maritrans' tank barges without just compensation. The Fifth Amendment
          specifically prohibits the United States government from taking
          private property for public use without just compensation. Maritrans
          asserts that its vessels were taken by Section 4115 of the Oil
          Pollution Act of 1990 ("OPA"), which prohibits all existing
          single-hull tank vessels from operating in U.S. waters under a
          retirement schedule that began January 1, 1995, and ends on January 1,
          2015. This provision will force Maritrans to remove its single-hull
          barges from service commencing on January 1, 2005 or rebuild them,
          thus depriving the Company of their continued use for a significant
          portion of their remaining economic lives. In December 2001, the
          United States Court of Federal Claims ruled that the OPA double hull
          requirement did not constitute a taking of Maritrans' vessels. The
          Company is currently appealing the decision.

          The Company is engaged in litigation instituted by a competitor to
          challenge its double-hull patent. Penn Maritime, Inc. v. Maritrans
          Inc., was filed in the U.S. District Court for the Eastern District of
          New York on September 6, 2001. The Plaintiff is seeking damages of $3
          million and an injunction restraining Maritrans from enforcing its
          patent, which if awarded, would have a material adverse effect on the
          Company. However, management believes the suit to be without merit.
          Maritrans is challenging the jurisdiction of the Court to hear the
          matter in New York and upon resolution of the jurisdictional issue,
          intends to seek affirmative damages from Penn Maritime, Inc. for
          infringement of its patent as well as other claims arising from the
          conduct of Penn Maritime, Inc.'s double hull program.

ITEM 4.   Submission of Matters to a Vote of Security Holders

          The Annual Meeting of Stockholders of the Company (the "Meeting") was
          held on May 14, 2002. At the Meeting, the following nominees were
          re-elected as directors of the Company to serve until the Annual
          Meeting of Stockholders in 2005 and until their successors shall have
          been elected and qualified and received the votes set forth after
          their names below:

          Name of Nominee                For             Against
          ---------------                ---             -------
          Dr. Craig E. Dorman         7,152,840          289,980
          Mr. Brent A. Stienecker     7,152,840          289,980

          The terms of office of the following directors continued after the
          meeting in accordance with the Company's Certificate of Incorporation:
          Mr. Stephen A. Van Dyck, Dr. Robert E. Boni, Mr. Fred Haab and Mr.
          Robert J. Lichtenstein.

                                       19



ITEM 6.   Exhibits and Reports on Form 8-K

(a)       Exhibits

          99.1 - Certification of Chief Executive Officer
          99.2 - Certification of Chief Financial Officer

(b)       Reports on Form 8-K

          On June 27, 2002, Maritrans Inc. filed a report on Form 8-K. In that
          Form 8-K under Item 5 "Other Events", the Company reported on the
          adoption of a new shareholder rights plan to be effective August 1,
          2002.

                                       20



                                   SIGNATURES

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.


                                 MARITRANS INC.
                                  (Registrant)


By:   /s/ Walter T. Bromfield                            Dated: August 14, 2002
   -------------------------------
          Walter T. Bromfield
        Chief Financial Officer
     (Principal Financial Officer)


By:   /s/ Judith M. Cortina                              Dated: August 14, 2002
   -------------------------------
          Judith M. Cortina
              Controller
    (Principal Accounting Officer)

                                       21