EX-99 2 earn8kx.htm

Exhibit 99.1

OSG

Overseas Shipholding Group, Inc.                                                                            Press Release

For Immediate Release

OVERSEAS SHIPHOLDING GROUP REPORTS FIRST QUARTER 2008 RESULTS

Highest Ever First Quarter TCE Revenues Driven by Strong Crude Oil Rates;
67% Quarter-over-Quarter EPS Increase Further Enhanced by Share Repurchase Program

Highlights

-      TCE revenues were $375.8 million, a 45% increase from $259.2 million quarter-over-quarter
-      Net income was $112.4 million, a 33% increase from $84.7 million quarter-over-quarter
-      Diluted EPS was $3.60 per share, a 67% increase from $2.16 quarter-over-quarter
-      Shares repurchased during the first quarter totaled 400,000
-      Bond redemption announced to repurchase all $176,115,000 outstanding of 8.25% Senior Notes due March 2013

New York – April 29, 2008 – Overseas Shipholding Group, Inc. (NYSE: OSG), a market leader in providing energy transportation services, today reported results for the first quarter of fiscal 2008.
 

For the q uarter ended March 31, 2008, TCE revenues 1were $ 375.8 million, a 45% increase from $2 59. 2 million for the same period of 2007 . The growth in TCE revenues reflects an increase of 1,052 revenue days primarily in the International Crude Oil and Product Carrier segments, and a more than 100% increase quarter-over-quarter in VLCC spot charter rates. EBITDA for the quarter increased 22% to $178.4 million from $ 146.1 million in the comparable period of 2007. Net income for the period increased 33% to $ 112.4 million , and diluted EPS increased 67% to $ 3.60 per share compared with $ 84.7 million, or $ 2.16 per share, for the same period a year ago. Net income in the first quarter of 2007 benefited from a gain on sale of securities of $15.0 million, or $0.25 per diluted share. Period-over-period diluted EPS also benefited from the Company’s repurchase of 19.3% of total shares outstanding since March 31, 2007.

Morten Arntzen, President and CEO of OSG, commented, “As anticipated, superior first quarter results reflect the strength of the crude oil tanker market and the strong performance of our product tanker business. We are building long-term sustainable value for shareholders by taking a portfolio approach to running this business. While we have continued to strengthen and grow our spot-oriented crude transportation business, we have diversified our fleet, built a substantial book of locked-in future revenue and expanded in businesses providing for earnings and cash flow stability.” Arntzen continued, “It is based on OSG’s quality, scalable platform that we are able to expand into new, higher margin businesses and win projects such as the U.S. Gulf shuttle tanker business and the FSO charter for one of our ULCCs. Embarking on my fifth year at OSG, I’ve never felt better about how the business looks than I do today. Looking at what we’ve achieved and seeing the commercial and technical platform we have in place to support our growth plans makes me confident about what OSG can achieve going forward and the results we can deliver for our shareholders.”

1 See Appendix 1 for a reconciliation of TCE revenues to shipping revenues and Appendix 2 for a reconciliation of EBITDA to net income.

TCE revenues in the first quarter of 2008 for the International Crude Oil segment were $248.9 million, an increase of $102.1 million, or 70%, from $146.8 million, in the same period of 2007. The increase was principally due to increases in rates earned by VLCCs as OPEC increased their quota production by 500,000 barrels per day, resulting in additional long-haul movements from the Middle East to both the Far East and the United States. Revenue days in the International Crude Oil unit increased by 767. OSG Lightering, a unit of the International Crude Oil segment, added $18.7 million or 508 revenue days in the period. TCE revenues for the International Product Carrier segment were $66.4 million, up $8.5 million, or 15%, from $ 57.9 million in the year earlier period. The growth was principally attributable to an increase in revenue days from the delivery of four vessels after January 1, 2007. TCE revenues from the U.S. segment were $52.8 million, up $3.2 million, or 6%, from $49.6 million in the same quarter a year earlier. This reflects the delivery of the Overseas Houston, Overseas Long Beach and the Overseas Los Angeles in 2007, offset by the sale of two dry bulk carriers and the reflagging of one car carrier under the Marshall Islands flag in 2007. The balance of TCE revenues were derived from the Company’s two International Flag dry bulk carriers and, in 2008, one car carrier.

Income from vessel operations was $127.4 million in the first quarter of 2008, a 65% increase from $77.4 million in the same period a year earlier. For the quarter ended March 31, 2008, total operating expenses increased 43%, or $85.4 million, to $283.3 million from $197.9 million in the corresponding quarter in 2007. The increase in operating expenses was principally the result of the acquisition of the Heidmar lightering business effective April 2007, and an increase in chartered-in tonnage in the International Crude Oil and Product Carrier segments. As of March 31, 2008, OSG chartered in 56 vessels compared with 48 at March 31, 2007. Voyage expenses increased by $18.7 million quarter-over-quarter, principally a result of higher fuel expenses. Vessel expenses increased $12.0 million quarter-over-quarter primarily due to crew costs associated with the Company’s continuing efforts to attract and retain high quality crews. In addition, the Company increased the estimated salvage value of its owned fleet effective January 1, 2008. This change in estimate reduces depreciation by approximately $2.7 million per quarter commencing in the first quarter of 2008.

Financial Highlights

Share Repurchase. From January 1 through March 31, 2008, OSG repurchased 400,000 shares at an average price per share of $57.33. Since the initial announcement of its share repurchase program on June 9, 2006, the Company has repurchased 9.0 million shares at an average price of $65.90 per share, or 22.7% of total shares outstanding, at a total cost of $592.0 million. The Company’s current $200 million share repurchase program has a total of $21.8 million that remains outstanding.
 

Bond Redemption. On April 7, 2008, OSG announced the redemption of all $176,115,000 principal outstanding of its 8.25% Senior Notes due 2013. The redemption price is 104.125% of the principal amount of the Notes together with accrued and unpaid interest as of the redemption date, which is May 15, 2008. This redemption will reduce the Company’s interest expense by approximately $7.0 million per annum through March 2013.

Future Locked-in Revenue. Future revenues associated with noncancelable term charters as of March 31, 2008, totaled $1.7 billion including time charters entered into by the Aframax International pool and fixed rate contracts of affreightment from the U.S. Flag lightering operation. Additionally, future revenues from term contracts of the Gas segment and the FSO project total approximately $1.8 billion and will be recognized in equity in income from affiliated companies.

Recent Activities and Quarterly Events

Crude Oil Tankers

Vessel Delivery

On January 28, 2008, OSG took delivery of the Overseas London, a 2000-built 153,000 dwt Suezmax tanker that has been bareboat chartered-in for ten years.


New Markets
On February 28, 2008, OSG announced that Maersk Oil Qatar AS had awarded two time-charter contracts to a joint venture between OSG and Euronav NV for a term of eight years. The contracts provide for two ULCCs, the TI Africa (currently owned by OSG) and the TI Asia (currently owned by Euronav), to be converted to FSOs (Floating Storage and Offloading service vessels) and commence service in July 2009 and September 2009, respectively.

Vessel Sale
On April 9, 2008, the Company entered into an agreement to sell the Pacific Ruby, a 1994-built Aframax tanker. The sale is expected to close in the second quarter of 2008 and the Company will recognize a gain of approximately $13.0 million at the time of sale.

Product Carriers
Fleet Activity
On January 9, 2008, the Company sold and bareboat chartered back the 1998-built Overseas Rimar, a Handysize Product Carrier. The $12 million gain from the sale was deferred and will be amortized over the 7 ½ year term of the charter back as a reduction of charter hire expense. OSG has an option to purchase the vessel at the end of the charter-in period.

Vessel Sale
On January 24, 2008, the Company entered into an agreement to sell the Overseas Aquamar, a 1998-built Handysize Product Carrier. The sale closed on April 17, 2008 and the Company will recognize a gain of approximately $10.5 million in the second quarter of 2008.

Vessel Delivery
On January 29, 2008, OSG took delivery of the Overseas Serifos, a 50,000 dwt Product Carrier, under a 10-year bareboat charter-in arrangement.

U.S.

Fleet Deliveries

On April 11, 2008, OSG America L.P., a master limited partnership in which the Company owns a 75.5% interest, took delivery of the Overseas New York, a 46,817 dwt U.S. Flag Jones Act Product Carrier. The vessel is on a seven-year bareboat charter-in arrangement and the Company has extension options for the life of the vessel. The vessel has been chartered-out to Shell for three years and began trading on April 21, 2008.

On April 24, 2008, OSG America took delivery of the OSG 243, an ATB that has been converted from single hull to double hull.
 

Gas

As of March 31, 2008, all four Q-Flex LNG carriers have delivered and commenced trading, each on a 25-year time charter. OSG has a 49.9% ownership interest in the joint venture entity that owns the LNG carriers. During the first quarter, OSG’s proportionate share of revenue days was 135 days, which generated $1.6 million and was recorded in equity in income of affiliated companies.
 

Fleet Metrics and Corporate Statistics

As of March 31, 2008, OSG’s owned or operated fleet totaled 116 International Flag and U.S. Flag vessels compared with 104 at March 31, 2007. Fifty-two percent, or 60 vessels, were owned as of March 31, 2008, with the remaining vessels bareboat or time chartered-in. OSG’s newbuild program of chartered-in and owned vessels totaled 41 vessels across its Crude Oil, Product and U.S. Flag lines of business. A detailed fleet list and updates on vessels under construction can be found in the Fleet section of www.osg.com.

Revenue days in the quarter ended March 31, 2008 totaled 9,561 compared with 8,509 in the same period a year earlier. The increase principally reflects the addition of the OSG Lightering fleet in April 2007, the delivery of two Suezmax tankers and two Panamax Product Carriers since June 30, 2007, and two Handysize Product Carriers since January 1, 2007. Revenue days by segment can be found in Spot and Time Charter TCE Rates Achieved and Revenue Days, later in this press release.

Financial Profile

At March 31, 2008, stockholders’ equity exceeded $1.85 billion and liquidity, including undrawn bank facilities, exceeded $1.9 billion. Total long-term debt as of March 31, 2008 was $1.6 billion, substantially unchanged from December 31, 2007. Liquidity adjusted debt to capital was 30.8% as of March 31, 2008, compared with 32.6% as of December 31, 2007. Liquidity adjusted debt is defined as long-term debt reduced by cash and the Capital Construction Fund.

Spot and Time Charter TCE Rates Achieved and Revenue Days

The following tables provide a breakdown of TCE rates achieved for the first quarter of fiscal 2008 and 2007 between spot and time charter rates. The information is based, in part, on information provided by the pools or commercial joint ventures in which the vessels participate.

 

Three Months Ended Mar. 31, 2008

Three Months Ended Mar. 31, 2007
 

Spot
Charter1

Time
Charter

Total

Spot Charter1

Time Charter

Total

Business Unit – Crude Oil

            

VLCC 2

            

Average TCE Rate

$98,565

$ —

  

$47,861

$ —

  

Number of Revenue Days

1,471

—

1,471

1,376

—

1,376

Suezmax

            

Average TCE Rate

$31,788

$ —

  

$ —

$ —

  

Number of Revenue Days

154

—

154

—

—

—

Aframax

            

Average TCE Rate

$35,859

$30,825

  

$42,172

$29,140

  

Number of Revenue Days

1,543

233

1,776

954

319

1,273

Panamax 3

            

Average TCE Rate

$35,289

$26,638

  

$31,634

$25,059

  

Number of Revenue Days

543

451

994

419

538

957

Other Crude Oil Revenue Days

158

—

158

180

—

180

Total Crude Oil Revenue Days

3,869

684

4,553

2,929

857

3,786

Business Unit – Refined Petroleum Products

          

Panamax

            

Average TCE Rate

$35,099

$18,640

  

$ —

$17,654

  

Number of Revenue Days

182

182

364

—

180

180

Handysize

            

Average TCE Rate

$24,500

$19,417

  

$27,495

$18,092

  

Number of Revenue Days

832

1,957

2,789

723

1,978

2,701

Total Refined Pet. Products Rev. Days

1,014

2,139

3,153

723

2,158

2,881

Business Unit – U.S. Flag

            

Number of Revenue Days

707

876

1,583

805

857

1,662

Other – Number of Revenue Days

—

272

272

—

180

180

Total Revenue Days

5,590

3,971

9,561

4,457

4,052

8,509


1TCE rates include the effect of forward freight agreements, which are used to create synthetic time charters. 2Excludes ULCCs. The revenue days for the ULCCs are included in Other Crude Oil. 3 Includes one vessel performing a bareboat charter out during the three months ended March 31, 2008.

Consolidated Statements of Operations

( $ in thousands, except per share amounts)

Three Months Ended
 

Mar. 31,

2008

  

Mar. 31,

2007

Shipping Revenues:

      

Pool revenues

$ 225,000

  

$ 137,803

Time and bareboat charter revenues

92,487

  

84 , 934

Voyage charter revenues

93,189

  

52,547
 

410,676

  

275,284

Operating Expenses:

      

Voyage expenses

34,842

  

16 , 100

Vessel expenses

72,869

  

60 , 814

C harter hire expenses

90,671

  

49,416

Depreciation and amortization

47,591

  

42,483

General and administrative

37,285

  

29 , 038

(Gain)/loss on disposal of vessels

(5)

  

3

Total Operating Expenses

283,253

  

197 , 854

Income from Vessel Operations

127,423

  

77,430

Equity in Income of Affiliated Companies

1,329

  

3,384

Operating Income

128,752

  

80,814

Other Income

2,969

  

22,758
 

131,721

  

103,572

Interest Expense

(18,363)

  

(13,168)

Income before Minority Interest and Federal Income Taxes

113,358

  

90,404

Minority interest

(923)

  

--

Income before Federal Income Taxes

112,435

  

90,404

Provision for Federal Income Taxes

--

  

(5,752)

Net Income

$ 112,435

  

$ 84,652
       

Weighted Average Number of Common Shares Outstanding:

      

Basic

31,107,499

  

3 9,062,855

Diluted

31,250,086

  

39 ,167,371

Per Share Amounts:

      

Basic net income

$ 3.61

  

$ 2.17

Diluted net income

$ 3.60

  

$ 2.16

Cash dividends declared

$0.3125

  

$0.25


T CE Revenue by Segment

The following table reflects TCE revenues generated by the Company’s three reportable segments for the quarters ended March 31, 2008 and 2007 and excludes the Company’s proportionate share of TCE revenues of affiliated companies. See Appendix 1 for reconciliations of Time Charter Equivalent Revenues to Shipping Revenues .

Three Months Ended Mar . 3 1,

($ in thousands)

2008

% of Total

2007

% of Total

International Flag

        

     Crude Tankers

$248,860

66.2

$146,802

56.7

     Product Carriers

66,406

17.7

57, 898

22. 3

     Other

7,780

2.1

4, 882

1.9

U.S.

52,788

14.0

49, 602

19.1

Total TCE Revenues

$375,834

100.0

$259 ,184

100.0


Income from Vessel Operations by Segment

The following table reflects income from vessel operations accounted for by each reportable segment. Income from vessel operations is before general and administrative expenses, gain on disposal of vessels and the Company’s share of income from affiliated companies.

Three Months Ended Mar . 3 1,

($ in thousands)

2008

% of Total

2007

% of Total

International Flag

        

     Crude Tankers

$136,505

82.9

$76,241

71.6

     Product Carriers

15,375

9.3

16,583

15. 6

      Other

2,381

1.5

157

0.1

U.S.

10,442

6.3

13,490

12.7

Total Income from Vessel Operations

$164,703

100.0

$106,471

10 0.0


Reconciliations of income from vessel operations of the segments to income before federal income taxes as reported in the consolidated statements of operations follow:

 

Three Months Ended Mar . 31 ,

($ in thousands)

2008

  

200 7

Total income from vessel operations of all segments

$ 164,703

  

$106 , 471

General and administrative expenses

(37,285 )

  

(29,038 )

G ain /(loss) on disposal of vessels

5

  

(3)

Consolidated income from vessel operations

127,423

  

77,430

Equity in income of affiliated companies

1,329

  

3 , 384

Other income

2,969

  

22 , 758

Interest expense

(18,363)

  

(1 3, 168)

Minority Interest

(923)

  

-

Income before federal income taxes

$ 112,435

  

$ 90,404
       


Consolidated Balance Sheets

($ in thousands)

Mar. 31,
2008

  

Dec. 31,
2007

ASSETS

      

Current Assets:

      

Cash and cash equivalents

$578,646

  

$502,420

Voyage receivables

190,731

  

180,406

Other receivables, including federal income taxes recoverable

74,635

  

84,627

Inventories, prepaid expenses and other current assets

57,506

  

37,300

Total Current Assets

901,518

  

804,753

Capital Construction Fund

137,556

  

151,174

Vessels and other property, less accumulated depreciation

2,656,440

  

2,691,005

Vessels under capital leases, less accumulated amortization

22,554

  

24,399

Vessels held for sale

33,779

  

-

Deferred drydock expenditures, net

85,830

  

81,619

Total Vessels, Deferred Drydock and Other Property

2,798,603

  

2,797,023

Investments in Affiliated Companies

110,736

  

131,905

Intangible Assets, less accumulated amortization

112,195

  

114,077

Goodwill

72,463

  

72,463

Other Assets

79,334

  

87,522

Total Assets

$4,212,405

  

$4,158 , 917

LIABILITIES AND STOCKHOLDERS' EQUITY

      

Current Liabilities:

      

Accounts payable, sundry liabilities and accrued expenses

$151,741

  

$178,837

Current installments of long-term debt

26,100

  

26,058

Current obligations under capital leases

8,599

  

8,406

Total Current Liabilities

186,440

  

213,301

Long-term Debt

1,529,049

  

1,506,396

Obligations under Capital Leases

22,572

  

24,938

Deferred Gain on Sale and Leaseback of Vessels

181,904

  

182,076

Deferred Federal Income Taxes and Other Liabilities

287,413

  

281,711

Minority Interest

131,928

  

132,470

Stockholders’ Equity

1,873,099

  

1,818,025

Total Liabilities and Stockholders' Equity

$4,212,405

  

$4,158 , 917


Consolidated Statements of Cash Flows

($ in thousands)

Three Months Ended March 31,
 

2008

  

2007

Cash Flows from Operating Activities:

      

Net income

$112,435

  

$84,652

Items included in net income not affecting cash flows:

      

Depreciation and amortization

47,591

  

42,483

Amortization of deferred gain on sale and leasebacks

(12,236)

  

(11,689)

Deferred compensation relating to restricted stock and

      

stock option grants

3,035

  

2,033

Provision/(credit) for deferred federal income taxes

(283)

  

2,834

Undistributed earnings of affiliated companies

4,427

  

7,277

Other – net

(530)

  

386

Items included in net income related to investing and financing activities:

      

Gain on sale of securities – net

—

  

(15,015)

(Gain)/loss on disposal of vessels

(5)

  

3

Payments for drydocking

(16,058)

  

(7,838)

Distributions from subsidiaries to minority owners

(1,407)

  

—

Changes in operating assets and liabilities

(39,751)

  

(26,862)

Net cash provided by operating activities

97,218

  

78,264

Cash Flows from Investing Activities:

      

Purchases of marketable securities

(8,690)

  

—

Expenditures for vessels

(144,442)

  

(57,673)

Withdrawals from Capital Construction Fund

15,050

  

98,500

Proceeds from disposal of vessels

135,110

  

79,664

Expenditures for other property

(3,390)

  

(2,392)

Investments in and advances to affiliated companies

(1,183)

  

(25,869)

Proceeds from disposal of investments in affiliated companies

—

  

69,276

Other – net

(14)

  

749

Net cash provided by/(used in) investing activities

(7,559)

  

162,255

Cash Flows from Financing Activities:

      

Purchases of treasury stock

(24,238)

  

(62,511)

Issuance of debt, net of issuance costs

30,000

  

—

Payments on debt and obligations under capital leases

(9,480)

  

(183,113)

Cash dividends paid

(9,757)

  

(9,853)

Issuance of common stock upon exercise of stock options

281

  

180

Other – net

(239)

  

2

Net cash used in financing activities

(13,433)

  

(255,295)

Net increase/(decrease) in cash and cash equivalents

76,226

  

(14,776)

Cash and cash equivalents at beginning of year

502,420

  

606,758

Cash and cash equivalents at end of period

$578,646

  

$591,982


Fleet

On March 31, 2008, OSG’s fleet totaled 157 vessels, including 41 newbuilds, aggregating 15.6 million deadweight tons and 865,000 cbm of LNG carrier capacity. Adjusted for OSG’s participation interest in joint ventures and chartered-in vessels, the fleet totaled 146 vessels. See the Company’s website at www.osg.com for a detailed fleet list, which is updated on a quarterly basis upon release of earnings.

Vessel Type

Vessels Owned

Vessels Chartered-in

Total at Mar. 31, 2008

Operating Fleet

Number

Weighted by
Ownership

Number

Weighted by
Ownership

Total Vessels

Vessels
Weighted by
Ownership

Total
Dwt

VLCC (including ULCC)

10

10

10

7.5

20

17.5

6,398,415

Suezmax

—

—

2

2

2

2

317,000

Aframax

5

5

12

8.6

17

13.6

1,818,341

Panamax

9

9

2

2

11

11

764,083

Lightering

2

2

2

1

4

3

346,924

International Flag Crude Tankers

26

26

28

21.1

54

47.1

9,644,763

Panamax Product Carriers

4

4

—

—

4

4

290,527

Handysize Product Carriers1

11

11

21

21

32

32

1,410,616

International Flag Product Carriers

15

15

21

21

36

36

1,701,143

Car Carrier

1

1

—

—

1

1

16,101

International Bulk Carriers

—

—

2

2

2

2

319,843

International Flag Other

1

1

2

2

3

3

335,944

Total Int’l Flag Operating Fleet

42

42

51

44.1

93

86.1

11,681,850

Handysize Product Carriers

3

3

5

5

8

8

367,497

Clean ATBs

8

8

—

—

8

8

221,341

Lightering:

              

Crude Carrier

1

1

—

—

1

1

39,948

ATBs

2

2

—

—

2

2

90,908

Total U.S. Flag Operating Fleet

14

14

5

5

19

19

719,694

LNG Carriers

4

2

—

—

4

2

864, 800 cbm

TOTAL OPERATING FLEET

60

58

56

49.1

116

107.1

12,401,544

864,800cbm

Newbuild Fleet

      

International Flag

              

VLCC

2

1

—

—

2

1

594,000

Suezmax

—

—

2

2

2

2

312,000

Aframax

4

4

2

1

6

5

686,000

Panamax Product Carriers

6

6

—

—

6

6

441,000

Handysize Product Carriers

2

2

7

7

9

9

439,350

U.S. Flag

              

Product Carriers

—

—

9

9

9

9

421,335

Clean ATBs

4

4

—

—

4

4

142,009

Lightering ATBs

3

3

—

—

3

3

136,668

TOTAL NEWBUILD FLEET

21

20

20

19

41

39

3,172,362

TOTAL OPERATING AND NEWBUILD FLEET

81

78

76

68.1

157

146.1

15,573,906
864,800 cbm


1Includes three owned U.S. Flag Product Carriers that trade internationally, thus associated revenue is included in the Product Carrier segment.

Average Age of International Operating Fleet

The Company believes its modern, well-maintained fleet is a significant competitive advantage in the global market. The table below reflects the average age of the Company’s owned International Flag fleet compared with the world fleet.

Vessel Class

Average Age of
OSG’s Owned Fleet at 3/31/08

Average Age of
OSG’s Owned Fleet at 3/31/07

Average Age of
World Fleet

at 3/31/08*

VLCC (including ULCC)

7.2 years

6.2 years

8.5 years

Aframax

9.4 years

8.4 years

8.6 years

Panamax**

4.6 years

3.0 years

8.7 years

Handysize

6.1 years

5.2 years

9.1 years


*Source: Clarkson database as of April 1, 2008.
**Includes Panamax tankers that trade crude oil and refined petroleum products.

Off hire, Schedule d Drydock and Double Hull Rebuilds

In addition to regular inspections by OSG personnel, all vessels are subject to periodic drydock, special survey and other scheduled maintenance. The table below sets forth actual days off hire for the first quarter of 2008 and anticipated days off hire for the above-mentioned events by class for the Company’s owned and bareboat chartered-in vessels for the second, third and fourth quarters of 2008. OSG recently completed double hulling an ATB the OSG 243, detailed in the U.S. section of Recent Activities and Quarterly Events earlier in this press release.

 

Actual Days Off-Hire

Projected Days

Off-Hire
 

Q108

Q208

Q308

Q408

Business Unite – Crude Oil

VLCC (including ULCC)

29

51

23

18

Suezmax

—

2

2

9

Aframax

—

75

151

41

Panamax

7

7

7

28

Business Unit – Refined Petroleum Products

Panamax

—

5

—

7

Handysize

94

97

46

78

Business Unit – U.S. Flag

Product Carrier

12

124

5

81

ATB1

133

98

60

5

Other

—

—

—

—

Total

275

459

294

267


1 Excludes 91 days in the first quarter of 2008 and 30 days in the second quarter of 2008 that the company’s single-hull ATB, M 215, was or is expected to be in lay-up.

Appendix 1 – TCE Reconciliation

Reconciliations of time charter equivalent revenues of the segments to shipping revenues as reported in the consolidated statements of operations follow:

 

Three Months Ended Mar. 31,

($ in thousands)

2008

2007

Time charter equivalent revenues

$375,834

$259,184

Add: Voyage expenses

34,842

16,100

Shipping revenues

$410,676

$275,284
     


Consistent with general practice in the shipping industry, the Company uses time charter equivalent revenues, which represents shipping revenues less voyage expenses, as a measure to compare revenue generated from a voyage charter to revenue generated from a time charter. Time charter equivalent revenues, a non-GAAP measure, provides additional meaningful information in conjunction with shipping revenues, the most directly comparable GAAP measure, because it assists Company management in making decisions regarding the deployment and use of its vessels and in evaluating their financial performance.

Appendix 2 – EBITDA Reconciliation

The following table shows reconciliations of net income, as reflected in the consolidated statements of operations, to EBITDA:

 

Three Months Ended Mar . 3 1 ,

($ in thousands)

200 8

200 7

Net income

$ 112,435

$ 84 ,652

Provision for federal income taxes

-

  

5 , 752

Interest expense

18 , 363

  

13,168

Depreciation and amortization

47,591

42 , 483

EBITDA

$ 178,389

$ 146 ,055
     


EBITDA represents operating earnings, which is before interest expense and income taxes, plus other income and depreciation and amortization expense. EBITDA is presented to provide investors with meaningful additional information that management uses to monitor ongoing operating results and evaluate trends over comparative periods. EBITDA should not be considered a substitute for net income or cash flow from operating activities prepared in accordance with accounting principles generally accepted in the United States or as a measure of profitability or liquidity. While EBITDA is frequently used as a measure of operating results and performance, it is not necessarily comparable to other similarly titled captions of other companies due to differences in methods of calculation.

Appendix 3 – Capital Expenditures

The following table presents information with respect to OSG’s capital expenditures for the three months ended March 31, 2008 and 2007:

 

 

Three Months Ended Mar. 31,

($ in thousands)

2008

2007

Expenditures for vessels

$144,442

$57,673

Investments in and advances to affiliated companies

1,183

25,869

Payments for drydockings

16,058

7,838
 

$161,683

$91,380
     


Appendix 4 – Second Quarter 2008 TCE Rates

The Company has achieved the following average estimated TCE rates for the second quarter of 2008 for the percentage of days booked for vessels operating through April 18, 2008. The information is based, in part, on information provided by the pools or commercial joint ventures in which the vessels participate. All numbers provided are estimates and may be adjusted for a number of reasons, including the timing of any vessel acquisitions or disposals and the timing and length of drydocks and repairs.

   

Second Quarter Revenue Days

  

Vessel Class and Charter Type

Average TCE Rates

Fixed as of 4/18/08

Open as of 4/18/08

Total

% Days Booked

Business Unit – Crude Oil

          

VLCC – Spot

$78,000

970

483

1,453

67%

Suezmax – Spot

$45,000

103

77

180

57%

Aframax – Spot

$48,500

488

1,122

1,610

30%

Aframax – Time

$33,000

227

—

227

100%

Panamax – Spot

$33,500

50

528

578

9%

Panamax – Time

$28,000

419

—

419

100%

Business Unit – Refined Petroleum Products

        

Panamax – Spot

$33,500

17

162

179

9%

Panamax – Time

$19,000

186

—

186

100%

Handysize – Spot

$23,000

310

710

1,020

31%

Handysize – Time

$19,000

1,885

—

1,885

100%

Business Unit – U.S. Flag

          

Product Carrier – Spot

—

—

78

78

—

Product Carrier – Time

$ 39,500

569

—

569

100%

ATB – Spot

$ 29,000

60

275

335

18%

ATB – Time

$ 29,000

334

—

334

100%

Lightering Vessels – Spot

$ 37,500

54

189

243

22%


Appendix 5 – 2008 Time Charter TCE Rates

The following table shows average estimated time charter TCE rates and associated days booked as of April 18, 2008 for the third and fourth quarters of 2008.

 

 

 

Fixed Rates and Revenue Days
as of 4/18/08
 

Q308

Q408

Business Unit – Crude Oil

    

VLCC

    

Average TCE Rate

—

—

Number of Revenue Days

—

—

Suezmax

    

Average TCE Rate

—

—

Number of Revenue Days

—

—

Aframax

    

Average TCE Rate

$29,500

$29,000

Number of Revenue Days

137

145

Panamax

    

Average TCE Rate

$28,000

$28,000

Number of Revenue Days

368

323

Business Unit – Refined Petroleum Products

Panamax

    

Average TCE Rate

$19,000

$19,000

Number of Revenue Days

184

184

Handysize

    

Average TCE Rate

$18,500

$18,500

Number of Revenue Days

1,496

1,433

Business Unit – U.S. Flag

    

Product Carrier

    

Average TCE Rate

$39,500

$40,500

Number of Revenue Days

606

643

ATB

    

Average TCE Rate

$29,500

$31,000

Number of Revenue Days

368

199


# # #

Earnings Conference Call Information

OSG has scheduled a conference call for Wednesday, April 30 , 2008 at 11:00 a.m. ET. Dial-in information for the call is (800) 762 -8932 (domestic) and (480 ) 629-9031 (international). The conference call and supporting presentation can also be accessed by web- cast, which will be available at www.osg.com in the Investor Relations Webcasts and Presentations section. Additionally, a replay of the call will be available by telephone until May 7 , 2008; the dial-in number for the replay is (800) 406-7325 (domestic) and (303) 590-3030 (international). The passcode is 3866165 .

About OSG

Overseas Shipholding Group, Inc. (NYSE: OSG), a Dow Jones Transportation Index company, is one of the largest publicly traded tanker companies in the world. As a market leader in global energy transportation services for crude oil and petroleum products in the U.S. and International Flag markets, OSG is committed to setting high standards of excellence for its quality, safety and environmental programs. OSG is recognized as one of the world’s most customer-focused marine transportation companies and is headquartered in New York City, NY. More information is available at www.osg.com.

Forward-Looking Statements

This release contains forward-looking statements regarding the Company's prospects, including the outlook for tanker and articulated tug barge markets, changing oil trading patterns, anticipated levels of newbuilding and scrapping, prospects for certain strategic alliances and investments, prospects for the growth of the OSG Gas transport business, estimated TCE rates achieved for the second quarter of 2008 and estimated time charter TCE rates for the third and fourth quarters of 2008, projected drydock and repair schedule, timely delivery of newbuildings and prospects of OSG’s strategy of being a market leader in the segments in which it competes. Factors, risks and uncertainties that could cause actual results to differ from the expectations reflected in these forward-looking statements are described in the Company’s Annual Report for 2007 on Form 10-K.

Contact Information


For more information contact: Jennifer L. Schlueter, Vice President Corporate Communications and Investor Relations, OSG Ship Management, Inc. at +1 212.578.1634 or jschlueter@osg.com