EXHIBIT 99.1
OSG
OVERSEAS SHIPHOLDING GROUP, INC. | PRESS RELEASE |
FOR IMMEDIATE RELEASE
OVERSEAS SHIPHOLDING GROUP REPORTS
FOURTH QUARTER AND FISCAL 2008 RESULTS
• | Full year 2008 TCE revenues1 of $1,545 million increased 49% year-over-year, the highest TCE revenues recorded in the Company’s history |
• | Full year 2008 net income was $317.7 million or $10.65 per diluted share, compared with $211.3 million, or $6.16 per share in the same period of 2007 |
• | Fiscal 2008 net income and diluted EPS were reduced by a goodwill impairment charge on the Company’s U.S. Flag unit and asset write-down charges of $168.0 million or $5.04 per diluted share, on four ATBs under construction at Bender Shipbuilding & Repair Co., Inc. (Bender), among other items |
• | Fourth quarter TCE revenues of $348.7 million were up 39% from $251.8 million quarter-over-quarter |
• | Fourth quarter net loss, including special items, was $79.5 million, or $2.89 per diluted share compared with net income of $21.0 million, or $0.67 per diluted share in the same period of 2007 |
• | Regular quarterly dividend of $0.4375 per share announced February 11, 2009 |
• | 1.6 million shares repurchased during the quarter at an average price of $36.26 per share |
New York – March 2, 2009 – Overseas Shipholding Group, Inc. (NYSE: OSG), a market leader in providing energy transportation services, today reported results for the fourth quarter and fiscal year ended December 31, 2008.
For the fiscal year ended December 31, 2008, the Company reported time charter equivalent (TCE) revenues of $1,545 million, a $506 million or 49% increase over $1,039 million in 2007, the highest TCE revenues recorded in the Company’s history. Year-over-year growth in TCE revenues was principally due to an additional 4,090 revenue days and a significant increase in daily TCE rates earned by the Company’s crude oil tankers. Year-over-year spot charter rates for VLCCs increased more than 110% to $92,351 per day and Aframaxes increased by 47% to $44,374 per day. Net income for the fiscal year 2008 increased 50% to $317.7 million, or $10.65 per diluted share, compared with $211.3 million, or $6.16 per diluted share, a year ago. Fiscal year 2008 earnings included special items that reduced net income by $131.2 million, or $3.18 per share (see discussion later in this release). In 2007, gains on vessel sales and sale of securities added $48.3 million, or $0.99 per diluted share to net income. Period-over-period diluted EPS benefited from the Company’s repurchase of 14.4% of total shares outstanding since December 31, 2007.
The Company reported a net loss in the fourth quarter of 2008 of $79.5 million, or $2.89 per diluted share, compared with net income of $21.0 million or $0.67 per diluted share, for the same period a year ago. Results for the fourth quarter of 2008 were negatively impacted by noncash goodwill and asset impairment charges associated with the Company’s U.S. Flag unit and other items that reduced net income by $170.6 million, or $5.42 per share.
Morten Arntzen, President and CEO said, "OSG had strong financial performance in the crude and products units in 2008, along with the best commercial and technical fleet performance since I joined the Company five years ago. The extraordinary volatility and unpredictability of the year reinforced our long-held view that balanced growth, active asset management, strong in-house technical and commercial management capabilities, and a tenacious focus on the balance sheet are critical to long-term success. As we face headwinds in the coming year, cash flow visibility, financial flexibility, an undiminished commitment to quality and broad cost management efforts will further differentiate OSG from our peers.”
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1 See Appendix 1 for a reconciliation of TCE revenues to shipping revenues and EBITDA to net income.
Regarding the ATB newbuild program, Mr. Arntzen stated, "The problems associated with our U.S. Flag unit are extremely disappointing. It is evident that Bender cannot meet the terms of its contracts to deliver the vessels. We are taking decisive actions to manage the situation and are working on an agreement that will enable us to complete two of the ATB units and two tugs at alternative yards in order to meet our customer commitments without interruption."
Noncash charges in the fourth quarter 2008 associated with the Company’s U.S. Flag unit, aggregating $176.8 million, or $5.66 per share, included:
• | $105.1 million, or $3.18 per share, related to write-downs associated with the nondelivery of four ATBs |
• | $62.9 million, or $2.28 per share, related to goodwill impairment |
• | $8.8 million, or $0.20 per share, related to additional write-downs associated with two older U.S. Flag vessels, the M300 and Integrity, assets held for sale since September 30, 2008 |
Other items impacting reported results in the fourth quarter 2008, aggregating $6.1 million, or $0.23 per share, included:
• | $8.3 million positive change, or $0.30 per share, in the mark-to-market balance of unrealized freight derivative positions |
• | $2.2 million loss, or $0.07 per share, on vessel sales and sale of securities |
Supplemental information detailing specific items affecting net income, as indicated above, for the fourth quarters and fiscal years 2008 and 2007 is available in the Investor Relations Webcasts and Presentations section of www.osg.com.
TCE revenues for the fourth quarter ended December 31, 2008 were $348.7 million, a $96.9 million, or 39% increase from $251.8 million for the same period of 2007. The growth in TCE revenues reflects an increase in spot charter rates across the Company’s International Flag crude tanker and product carrier vessel classes. In addition, there were 1,240 more revenue days in the quarter compared with the same period a year ago.
TCE revenues in the fourth quarter of 2008 for the International Crude Oil segment were $204.4 million, an increase of $69.6 million, or 52%, from $134.8 million in the same period of 2007. The increase was principally due to significant increases in average rates earned by VLCCs and Aframaxes. Quarter-over-quarter spot charter rates for VLCCs increased 60% to $56,559 per day and Aframaxes increased by 38% to $34,062 per day. In addition, the Company’s expansion into Suezmaxes late in 2007 added more than $11.0 million to the segment’s TCE revenues in the fourth quarter. TCE revenues for the International Product Carrier segment were $79.5 million, up $20.1 million, or 34%, from $59.4 million in the year earlier period. The growth was principally attributable to an increase in spot rates earned by both LR1s and MRs and an increase in revenue days. TCE revenues from the U.S. segment were $62.8 million, an increase of 24% from $50.6 million in the same quarter a year earlier, principally due to the addition of three vessels since September 2007.
Income from vessel operations, excluding noncash vessel impairment and goodwill charges, was $56.0 million in the fourth quarter of 2008, a 93% increase from $29.1 million in the same period a year earlier. During the period, total operating expenses, excluding the impairment charges, increased 36%, or $89.4 million, to $337.1 million from $247.7 million in the corresponding quarter in 2007. Voyage expenses increased by $19.3 million, principally due to higher fuel expenses. Vessel expenses increased $16.9 million quarter-over-quarter primarily due to an increase of 411 operating days for owned and bareboat chartered-in vessels, and higher crew costs, damage repairs and insurance premiums and a $6.7 million increase in costs incurred on seven tankers under fixed rate management agreements for DHT Maritime, Inc. These management agreements were renewed in January 2009 on market terms, which will eliminate the subsidy under the fixed rate management agreement. Charter hire expense increased 68% to $120.5 million from $71.9 million in the fourth quarter of 2007 principally due to 10 additional ships being chartered-in during the comparable period. In addition, profit share, a component of charter hire expense, more than tripled to $12.8 million in the fourth quarter of 2008 from the same period a year earlier due to significantly higher TCE rates achieved for VLCCs and Aframaxes. Depreciation and amortization expense of $47.8 million in the fourth quarter of 2008 reflects the impact of an increase in estimated salvage value of the Company’s owned fleet effective January 1, 2008. This change in estimate reduced depreciation by approximately $2.7 million per quarter commencing in the first quarter of 2008. A tax benefit in the fourth quarter of $32.2 million reflects the carryback of 2008 tax losses against nonshipping income of the Company’s foreign subsidiaries generated in 2007. In addition, the vessel write-downs recorded in the fourth quarter of 2008 gave rise to the reversal of previously established deferred tax liabilities.
Asset Write-down – During the fourth quarter of 2008 and in early 2009, repeated delivery delays caused concerns that Bender Shipbuilding & Repair Co., Inc. (Bender) would not be able to complete six ATBs and two tug boats within contract terms, due to Bender’s lack of performance under such agreements, its lack of liquidity and poor financial condition. In early 2009, OSG began negotiations with Bender to end construction agreements covering the eight units associated with the Company’s U.S. Flag expansion plans. The Company intends to complete two of the six ATBs and two tug boats at alternative shipyards.
OSG continues to pursue negotiations with Bender regarding termination of its contracts. There is no assurance that OSG and Bender will reach an agreement on the termination of their existing contracts and the transfer of the vessels to OSG in their current state of completion or that Bender’s liquidity and financial condition will not significantly worsen.
The Company reviewed the six ATBs and two tug boats for impairment based upon the information that was known to it as of December 31, 2008. Accordingly, OSG recorded impairment charges aggregating $105.1 million in the fourth quarter of 2008 related to four of such ATBs. Based on accounting rules that provide guidance with respect to contract terminations and the impairment of long-lived assets such as the ATBs, the Company expects to record additional impairment charges and contract termination costs against earnings in the first quarter of 2009 of between $20 million and $35 million. Should these matters not be resolved to OSG’s satisfaction, OSG may have to take an additional impairment charge. The book value of the two remaining ATBs and the two tugs was $265 million at December 31, 2008.
Goodwill Impairment – In the fourth quarter, the economic downturn resulted in a number of market-related events that are expected to negatively impact the Company’s U.S. Flag operations in the near and medium-term. Lower demand for refined petroleum products in North America has resulted in a number of major refining companies reducing capital expenditures and deferring or eliminating projects that would have increased refining capacity throughout the Gulf of Mexico, thereby decreasing future volumes of clean products that had been forecast to move on Jones Act tankers. As a result, and because of the reduction in OSG’s U.S. Flag newbuilding program, the Company reduced its estimates of future cash flows to measure fair value and accordingly, recorded an impairment charge of $62.9 million, representing the entire value of goodwill related to the U.S. Flag segment.
Settlement with American Shipping Company ( OSG and American Shipping Company ASA (formerly known as Aker American Shipping ASA) (Oslo: AMSC) have agreed to stop temporarily the arbitration previously disclosed in the Company’s filings with the Securities and Exchange Commission and have signed a Nonbinding Agreement in principle to settle all of their outstanding commercial disagreements, including the arbitration. The Nonbinding Agreement provides for the dismissal with prejudice of all the claims in the arbitration and contains a number of provisions materially altering the prior agreements between the parties. There is no assurance that AMSC and OSG will enter into the definitive agreements on these terms or on any terms.
FINANCIAL HIGHLIGHTS, LIQUIDITY AND KEY METRICS
Liquidity and Credit Metrics ( At December 31, 2008, stockholders’ equity was approximately $1.7 billion and liquidity, including undrawn bank facilities, was $1.5 billion. Total debt as of December 31, 2008 was $1.42 billion, down $142 million from December 31, 2007. Liquidity-adjusted debt to capital2 was 36.8% as of December 31, 2008, a slight increase from 32.6% as of December 31, 2007. OSG’s disciplined financial strategy, its balance sheet strength and superior financial condition has enabled it to be a predominantly unsecured borrower with only 28% of net book value of vessels pledged as collateral. In 2006 OSG obtained commitments from a group of major banks to provide a $1.8 billion seven-year unsecured credit line and as of December 31, 2008, had $1,051 million available in borrowing capacity under that facility. In November 2007, OSG America L.P. obtained commitments from a group of banks to provide a $200 million five-year secured credit facility and as of December 31, 2008, $155 million was available in borrowing capacity. Principal debt repayment obligations are less than $35 million per annum through 2011.
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2 Liquidity-adjusted debt is defined as long-term debt reduced by cash and the Capital Construction Fund.
Fixed Revenue ( Aggregate future revenues associated with noncancelable term charters as of December 31, 2008 totaled $1.5 billion, down from $1.8 billion at fiscal year ended 2007. Fiscal year 2009 fixed revenue totals $362 million and comprises of $331 million of time charter revenues and $31 million from time charters entered into by certain of the Company’s commercial pools. OSG’s share of future revenues from term contracts related to its Gas segment and the Floating Storage Offloading (FSO) project aggregate approximately $1.8 billion, and in 2009, are expected to result in approximately $77 million, recognized in affiliated companies accounted for by the equity method. The Company’s level of fixed revenue positions it well to meet lease, debt, capital and other commitments from cash generated from operations and announced asset sales in 2009.
Share Repurchase Program ( From October 1, 2008 through December 31, 2008, OSG repurchased 1,622,300 shares at an average purchase price of $36.26 per share. The current $250 million program, announced June 9, 2008, has a total of $37.2 million remaining. Since authorizing a share repurchase program on June 9, 2006, OSG has repurchased 13.1 million shares, or 33% of total shares outstanding, at a total cost of approximately $826.5 million.
$500 Million Credit Facility – On October 15, 2008, OSG and Euronav NV (EURONEXT: EURN) jointly announced a $500 million senior secured term loan owned equally by Euronav and OSG and the conversion of two ULCCs, the TI Asia and the TI Africa, into FSO service vessels. Once converted, the vessels will commence eight-year charters with Maersk Oil Qatar in July and September 2009, respectively. Conversion costs for the two vessels are approximately $160 million each. On January 27, 2009, the joint venture borrowed $50 million in connection with the purchase of the TI Africa and distributed such amount to OSG. The sale of the TI Africa into the joint venture generated a gain on vessel sale of approximately $52 million in the first quarter of 2009. OSG holds a 50% interest in the joint venture, which owns the TI Asia and the TI Africa.
QUARTERLY EVENTS AND OTHER ACTIVITIES
Crude Oil Tankers
OSG redelivered two 2008-built Aframaxes, the Wind, on January 9, and Peak, on January 29. The time chartered-in vessels were sold by the owner to a third party and OSG consented to the termination of the charter-in contracts. The contract termination reduced the Company’s minimum time charter-in commitments by approximately $25 million.
On November 26, 2008, OSG exercised one-year extension options on the Overseas Chris, Overseas Ann, Overseas Regal, Overseas Cathy and Overseas Sophie, and 18-month extension options on the Overseas Rebecca and Overseas Ania. All seven VLCC and Aframaxes are chartered in from DHT Maritime, Inc. (NYSE: DHT).
Product Carriers
On November 20, 2008, OSG signed an agreement to time charter-in a newbuild chemical carrier. The vessel, a 19,900 dwt chemical carrier, will have IMO II classification and will be capable of transporting a broad range of organic and inorganic chemicals. The vessel will be constructed at Fukuoka Shipbuilding in Japan and is expected to deliver in the third quarter of 2011.
On December 12, 2008, Ya-Sa Shipping Industry and Trading S.A., a privately held shipping company based in Istanbul, Turkey, joined the Clean Products International (CPI) pool as an associate member contributing two newbuild vessels that delivered in January 2009. The additions bring CPI to 12 operating vessels that concentrate on trading in South America.
U.S. Fleet
Vessel Delivery ( On February 19, 2009, OSG took delivery of the Overseas Boston, a 46,815 dwt U.S. Flag Jones Act Product Carrier. The vessel is bareboat chartered-in for five years and the Company has extension options for the life of the vessel. The vessel has been chartered-out to Tesoro for three years.
Previously Announced Fleet Activity
Fourth quarter 2008 and first quarter 2009 fleet activity that has been previously announced, including vessel deliveries, asset sales, sale/leaseback transactions and redeliveries, is summarized in the table below.
Vessel Type | Vessel Name | Trade | Delivery Date | Sale Date | Other | Ownership Profile |
ULCC | TI Africa | Crude | | | 1/14/2009 (a) | |
VLCC | Overseas Donna | Crude | | 1/8/2009 | | |
Suezmax | Hull H1022 (TBN) Profit | Crude | | | Charter-in commitment cancelled | |
Suezmax | Hull H1023 (TBN) Pipe | Crude | | | Charter-in commitment cancelled | |
Aframax | Overseas Acadia | Crude | 10/8/2008 | | Sold and leased back | TC-in 9/2018 |
Aframax | Overseas Everglades | Crude | 12/16/2008 | | Sold and leased back | BB-in 12/2020 |
Aframax | Overseas Palawan | Products | 11/7/2008 | | Sold and leased back | BB-in 11/2020 |
Aframax | Overseas Yellowstone | Crude | 1/4/2009 | | | Owned |
Handysize | Blue Emerald | Products | 1/20/2009 | | | TC-in 1/2012 |
Handysize | Overseas Delphina | Products | | | Redelivered 1/5/2009 | |
Handysize | Overseas Vega | Products | | | Redelivered 1/9/2009 | |
TC = time charter; BB = bareboat charter; (a) Undergoing conversion to FSO and scheduled to re-enter the fleet in September 2009.
SPOT AND FIXED TCE RATES ACHIEVED AND REVENUE DAYS
The following tables provide a breakdown of TCE rates achieved for the three months and fiscal year ended December 31, 2008 and 2007 for the International Crude Oil and Product Carrier segments between spot and fixed charter rates and the related revenue days. The Company has entered into FFAs and related bunker swaps as hedges for reducing the volatility of earnings from operating the Company’s VLCCs and Aframaxes in the spot market. These derivative instruments seek to create synthetic time charters. The impact of these derivatives, which qualify for hedge accounting treatment under FAS 133, are reported together with time charters entered in the physical market under “Fixed Earnings.” The information in these tables is based in part on information provided by the pools or commercial joint ventures in which the segment’s vessels participate.
Revenue days in the quarter ended December 31, 2008 totaled 10,527 compared with 9,287 in the same period a year earlier. The increase principally reflects the addition of 11 vessels since September 30, 2007. A detailed fleet list by vessel class can be found in Fleet Information later in this press release.
| Three Months Ended Dec. 31, 2008 | Three Months Ended Dec. 31, 2007 |
| Spot
Earnings | Fixed
Earnings | Total | Spot Earnings | Fixed Earnings | Total |
Business Unit – Crude Oil | | | | | | |
VLCC1 | | | | | | |
Average TCE Rate | $56,559 | $56,171 | | $35,165 | $ 45,344 | |
Number of Revenue Days | 945 | 525 | 1,470 | 1,289 | 193 | 1,482 |
Suezmax | | | | | | |
Average TCE Rate | $46,574 | $ — | | $38,310 | $ — | |
Number of Revenue Days | 237 | — | 237 | 27 | — | 27 |
Aframax | | | | | | |
Average TCE Rate | $34,062 | $34,857 | | $24,701 | $27,036 | |
Number of Revenue Days | 879 | 424 | 1,303 | 797 | 335 | 1,132 |
Aframax – Lightering | | | | | | |
Average TCE Rate | $31,151 | $ — | | $28,025 | $ — | |
Number of Revenue Days | 933 | — | 933 | 563 | — | 563 |
Panamax2 | | | | | | |
Average TCE Rate | $36,445 | $26,417 | | $29,780 | $27,194 | |
Number of Revenue Days | 639 | 416 | 1,055 | 546 | 460 | 1,006 |
Other Crude Oil Revenue Days | 183 | — | 183 | 184 | — | 184 |
Total Crude Oil Revenue Days | 3,816 | 1,365 | 5,181 | 3,406 | 988 | 4,394 |
Business Unit – Refined Petroleum Products | | | | | |
Panamax (LR1) | | | | | | |
Average TCE Rate | $44,795 | $18,781 | | $29,959 | $19,068 | |
Number of Revenue Days | 237 | 184 | 421 | 184 | 184 | 368 |
Handysize (MR) | | | | | | |
Average TCE Rate | $25,559 | $19,997 | | $20,968 | $18,665 | |
Number of Revenue Days | 1,138 | 1,866 | 3,004 | 726 | 2,063 | 2,789 |
Total Refined Pet. Products Rev. Days | 1,375 | 2,050 | 3,425 | 910 | 2,247 | 3,157 |
Business Unit – U.S. Flag | | | | | | |
Number of Revenue Days | 863 | 966 | 1,829 | 670 | 837 | 1,507 |
Other – Number of Revenue Days | — | 92 | 92 | — | 229 | 229 |
Total Revenue Days | 6,054 | 4,473 | 10,527 | 4,986 | 4,301 | 9,287 |
1Excludes ULCCs. The revenue days for the ULCCs are included in Other Crude Oil.
2Includes one vessel performing a bareboat charter-out during the three months ended December 31, 2008 and 2007.
| Year Ended Dec. 31, 2008 | Year Ended Dec. 31, 2007 |
| Spot
Earnings | Fixed
Earnings | Total | Spot Earnings | Fixed Earnings | Total |
Business Unit – Crude Oil | | | | | | |
VLCC1 | | | | | | |
Average TCE Rate | $92,351 | $73,632 | | $43,179 | $44,887 | |
Number of Revenue Days | 4,044 | 1,795 | 5,839 | 5,497 | 193 | 5,690 |
Suezmax | | | | | | |
Average TCE Rate | $49,550 | $ — | | $38,324 | $ — | |
Number of Revenue Days | 772 | — | 772 | 27 | — | 27 |
Aframax | | | | | | |
Average TCE Rate | $44,374 | $31,765 | | $30,263 | $30,516 | |
Number of Revenue Days | 3,390 | 1,452 | 4,842 | 3,197 | 1,524 | 4,721 |
Aframax – Lightering | | | | | | |
Average TCE Rate | $31,354 | $ — | | $29,595 | $ — | |
Number of Revenue Days | 2,846 | — | 2,846 | 1,646 | — | 1,646 |
Panamax2 | | | | | | |
Average TCE Rate | $36,311 | $26,687 | | $32,268 | $26,076 | |
Number of Revenue Days | 2,387 | 1,778 | 4,165 | 1,795 | 1,982 | 3,777 |
Other Crude Oil Revenue Days | 703 | — | 703 | 711 | — | 711 |
Total Crude Oil Revenue Days | 14,142 | 5,025 | 19,167 | 12,873 | 3,699 | 16,572 |
Business Unit – Refined Petroleum Products | | | | | |
Panamax (LR1) | | | | | | |
Average TCE Rate | $39,189 | $18,653 | | $28,352 | $19,471 | |
Number of Revenue Days | 785 | 730 | 1,515 | 316 | 730 | 1,046 |
Handysize (MR) | | | | | | |
Average TCE Rate | $26,718 | $19,851 | | $28,167 | $18,761 | |
Number of Revenue Days | 4,025 | 7,534 | 11,559 | 2,775 | 8,082 | 10,857 |
Total Refined Pet. Products Rev. Days | 4,810 | 8,264 | 13,074 | 3,091 | 8,812 | 11,903 |
Business Unit – U.S. Flag | | | | | | |
Number of Revenue Days | 2,920 | 3,757 | 6,677 | 2,768 | 3,603 | 6,371 |
Other – Number of Revenue Days | — | 791 | 791 | — | 773 | 773 |
Total Revenue Days | 21,872 | 17,837 | 39,709 | 18,732 | 16,887 | 35,619 |
1Excludes ULCCs. The revenue days for the ULCCs are included in Other Crude Oil.
2Includes one vessel performing a bareboat charter-out during the years ended December 31, 2008 and 2007.
CONSOLIDATED STATEMENTS OF OPERATIONS
($ in thousands, except per share amounts) | Three Months Ended | | Fiscal Year Ended |
| Dec. 31, 2008 | | Dec. 31, 2007 | | Dec. 31, 2008 | | Dec. 31, 2007 |
Shipping Revenues: | | | | | | | |
Pool revenues | $179,045 | | $116,823 | | $906,291 | | $500,300 |
Time and bareboat charter revenues | 91,066 | | 91,045 | | 366,629 | | 361,431 |
Voyage charter revenues | 123,014 | | 68,975 | | 431,777 | | 267,574 |
| 393,125 | | 276,843 | | 1,704,697 | | 1,129,305 |
Operating Expenses: | | | | | | | |
Voyage expenses | 44,422 | | 25,087 | | 159,312 | | 90,094 |
Vessel expenses | 84,504 | | 67,566 | | 314,553 | | 267,947 |
Charter hire expenses | 120,498 | | 71,882 | | 429,808 | | 258,116 |
Depreciation and amortization | 47,821 | | 50,374 | | 189,163 | | 185,499 |
General and administrative | 39,839 | | 32,831 | | 144,063 | | 127,211 |
Goodwill impairment charge | 62,874 | | - | | 62,874 | | - |
Loss on write-down of vessels, net of (gain) on disposal | 114,946 | | 106 | | 59,738 | | (7,134) |
Total Operating Expenses | 514,904 | | 247,846 | | 1,359,511 | | 921,733 |
Income/(Loss) from Vessel Operations | (121,779) | | 28,997 | | 345,186 | | 207,572 |
Equity in Income of Affiliated Companies | 3,341 | | 1,602 | | 12,292 | | 8,876 |
Operating Income/(Loss) | (118,438) | | 30,599 | | 357,478 | | 216,448 |
Other Income/(Expense) | 4,097 | | 8,999 | | (28,847) | | 75,434 |
| (114,341) | | 39,598 | | 328,631 | | 291,882 |
Interest Expense | (9,600) | | (21,186) | | (57,449) | | (74,696) |
Income/(Loss) before Minority Interest and Income Taxes | (123,941) | | 18,412 | | 271,182 | | 217,186 |
Minority Interest | 12,234 | | (1,049) | | 12,479 | | (1,049) |
Credit/(Provision) for Income Taxes | 32,162 | | 3,674 | | 34,004 | | (4,827) |
Net Income/(Loss) | ($79,545) | | $21,037 | | $317,665 | | $211,310 |
| | | | | | | |
Weighted Average Number of Common Shares Outstanding: | | | | | | | |
Basic | 27,517,038 | | 31,152,356 | | 29,648,230 | | 34,135,672 |
Diluted | 27,539,053 | | 31,349,280 | | 29,814,221 | | 34,326,741 |
Per Share Amounts: | | | | | | | |
Basic net income | ($2.89) | | $0.68 | | $10.71 | | $6.19 |
Diluted net income | ($2.89) | | $0.67 | | $10.65 | | $6.16 |
Cash dividends declared | -- | | -- | | $1.50 | | $1.125 |
TCE REVENUE BY SEGMENT
The following table reflects TCE revenues generated by the Company’s three reportable segments for the three months and fiscal year ended December 31, 2008 and 2007 and excludes the Company’s proportionate share of TCE revenues of affiliated companies. See Appendix 1 for reconciliations of time charter equivalent revenues to shipping revenues.
| Three Months Ended Dec. 31, | Fiscal Year Ended Dec. 31, |
($ in thousands) | 2008 | % of Total | 2007 | % of Total | 2008 | % of Total | 2007 | % of Total |
International Flag | | | | | | | | |
Crude Tankers | $204,423 | 58.6 | $134,811 | 53.6 | $1,003,331 | 64.9 | $569,264 | 54.8 |
Product Carriers | 79,539 | 22.8 | 59,402 | 23.6 | 298,132 | 19.3 | 243,451 | 23.4 |
Other | 1,978 | 0.6 | 6,932 | 2.8 | 22,102 | 1.4 | 23,676 | 2.3 |
U.S. | 62,763 | 18.0 | 50,611 | 20.0 | 221,820 | 14.4 | 202,820 | 19.5 |
Total TCE Revenues | $348,703 | 100.0 | $251,756 | 100.0 | $1,545,385 | 100.0 | $1,039,211 | 100.0 |
INCOME FROM VESSEL OPERATIONS BY SEGMENT
The following table reflects income from vessel operations for the three months and fiscal year ended December 31, 2008 and 2007 accounted for by each reportable segment. Income from vessel operations is before general and administrative expenses, vessel and goodwill impairment charges, gain on disposal of vessels and the Company’s share of income from affiliated companies.
| Three Months Ended Dec. 31, | Fiscal Year Ended Dec. 31, |
($ in thousands) | 2008 | % of Total | 2007 | % of Total | 2008 | % of Total | 2007 | % of Total |
International Flag | | | | | | | | |
Crude Tankers | $71,800 | 74.9 | $42,503 | 68.6 | $508,367 | 83.0 | $226,812 | 69.3 |
Product Carriers | 17,413 | 18.2 | 10,214 | 16.5 | 69,577 | 11.4 | 57,669 | 17.6 |
Other | (667) | (0.7) | 1,261 | 2.0 | 4,714 | 0.8 | 3,794 | 1.1 |
U.S. | 7,334 | 7.6 | 7,956 | 12.9 | 29,203 | 4.8 | 39,374 | 12.0 |
Total Income from Vessel Operations | $95,880 | 100.0 | $61,934 | 100.0 | $611,861 | 100.0 | $327,649 | 100.0 |
| | | | | | | | |
Reconciliations of income from vessel operations of the segments to income before income taxes as reported in the consolidated statements of operations follow:
| Three Months Ended Dec. 31, | Fiscal Year Ended Dec. 31, |
($ in thousands) | 2008 | | 2007 | 2008 | | 2007 |
Total income from vessel operations of all segments | $95,880 | | $61,934 | $611,861 | | $327,649 |
General and administrative expenses | (39,839) | | (32,831) | (144,063) | | (127,211) |
Impairment charges, net of gain on disposals | (177,820) | | (106) | (122,612) | | 7,134 |
Consolidated income from vessel operations | (121,779) | | 28,997 | 345,186 | | 207,572 |
Equity in income of affiliated companies | 3,341 | | 1,602 | 12,292 | | 8,876 |
Other income/(expense) | 4,097 | | 8,999 | (28,847) | | 75,434 |
Interest expense | (9,600) | | (21,186) | (57,449) | | (74,696) |
Minority Interest | 12,234 | | (1,049) | 12,479 | | (1,049) |
Income before federal income taxes | ($111,707) | | $17,363 | $283,661 | | $216,137 |
| | | | | | |
CONSOLIDATED BALANCE SHEETS
($ in thousands) | Dec. 31,
2008 | | Dec. 31,
2007 |
ASSETS | | | |
Current Assets: | | | |
Cash and cash equivalents | $343,609 | | | $502,420 | |
Voyage receivables | 219,500 | | | 180,406 | |
Federal income taxes recoverable | 30,366 | | | 23,181 | |
Other receivables | 34,407 | | | 61,446 | |
Inventories | 6,627 | | | 9,195 | |
Prepaid expenses and other current assets | 43,780 | | | 28,105 | |
Total Current Assets | 678,289 | | | 804,753 | |
Capital Construction Fund | 48,681 | | | 151,174 | |
Vessels and other property, less accumulated depreciation | 2,683,147 | | | 2,691,005 | |
Vessels under capital leases, less accumulated amortization | 1,101 | | | 24,399 | |
Vessels held for sale | 53,975 | | | - | |
Deferred drydock expenditures, net | 79,837 | | | 81,619 | |
Total Vessels, Deferred Drydock and Other Property | 2,818,060 | | | 2,797,023 | |
Investments in Affiliated Companies | 98,620 | | | 131,905 | |
Intangible Assets, less accumulated amortization | 106,585 | | | 114,077 | |
Goodwill | 9,589 | | | 72,463 | |
Other Assets | 130,237 | | | 87,522 | |
Total Assets | $3,890,061 | | | $4,158,917 | |
LIABILITIES AND STOCKHOLDERS' EQUITY | | | |
Current Liabilities: | | | |
Accounts payable, sundry liabilities and accrued expenses | $167,615 | | | $178,837 | |
Current installments of long-term debt | 26,231 | | | 26,058 | |
Current obligations under capital leases | 1,092 | | | 8,406 | |
Total Current Liabilities | 194,938 | | | 213,301 | |
Long-term Debt | 1,396,135 | | | 1,506,396 | |
Obligations under Capital Leases | - | | | 24,938 | |
Deferred Gain on Sale and Leaseback of Vessels | 143,948 | | | 182,076 | |
Deferred Income Taxes and Other Liabilities | 330,407 | | | 281,711 | |
Minority Interest | 101,766 | | | 132,470 | |
Stockholders’ Equity | 1,722,867 | | | 1,818,025 | |
Total Liabilities and Stockholders' Equity | $3,890,061 | | | $4,158,917 | |
CONSOLIDATED STATEMENTS OF CASH FLOWS
($ in thousands) | Fiscal Year Ended Dec. 31, |
| | 2008 | | 2007 |
Cash Flows from Operating Activities: | | | |
Net income | $317,665 | | $211,310 |
Items included in net income not affecting cash flows: | | | |
Depreciation and amortization | 189,163 | | 185,499 |
Goodwill impairment charge | 62,874 | | — |
Loss on write-down of vessels | 137,708 | | — |
Amortization of deferred gain on sale and leasebacks | (47,971) | | (47,303) |
Minority Interest | (12,479) | | 1,049 |
Deferred compensation relating to restricted stock and stock option grants | 12,674 | | 9,519 |
Credit for deferred income taxes | (26,136) | | (1,081) |
Unrealized (gains)/losses on forward freight agreements and bunker swaps | (2,137) | | 2,010 |
Undistributed earnings of affiliated companies | (6,445) | | 5,110 |
Other – net | 12,628 | | (1,899) |
Items included in net income related to investing and financing activities: | | | |
(Gain)/loss on sale of securities – net | 1,284 | | | (41,173) |
Gain on disposal of vessels | (77,970) | | | (7,134) |
Payments for drydocking | (53,560) | | | (69,892) |
Distributions from subsidiaries to minority owners | (9,660) | | — |
Increase in receivables | (16,043) | | (50,039) |
Net change in prepaid items and accounts payable, sundry liabilities and accrued expenses | (114,918) | | (28,352) |
Net cash provided by operating activities | 366,677 | | 167,624 |
Cash Flows from Investing Activities: | | | |
Purchases of marketable securities | (15,112) | | — |
Proceeds from sales of marketable securities | 7,208 | | — |
Expenditures for vessels | (608,271) | | (545,078) |
Withdrawals from Capital Construction Fund | 105,700 | | 175,950 |
Proceeds from disposal of vessels | 461,872 | | 224,019 |
Acquisition of Heidmar Lightering | — | | (38,471) |
Expenditures for other property | (10,809) | | (15,864) |
Investments in and advances to affiliated companies | (37,871) | | (31,083) |
Proceeds from disposal of investments in affiliated companies | — | | 194,706 |
Distributions from affiliated companies | 20,148 | | — |
Other – net | 113 | | 926 |
Net cash used in investing activities | (77,022) | | (34,895) |
Cash Flows from Financing Activities: | | | |
Net proceeds from sale of OSG America L.P. units | — | | 129,256 |
Purchases of treasury stock | (258,747) | | (551,001) |
Issuance of debt, net of issuance costs | 77,812 | | 261,000 |
Payments on debt and obligations under capital leases | (220,165) | | (37,238) |
Cash dividends paid | (44,856) | | (38,038) |
Issuance of common stock upon exercise of stock options | 970 | | 566 |
Other – net | (3,480) | | (1,612) |
Net cash used in financing activities | (448,466) | | (237,067) |
Net decrease in cash and cash equivalents | (158,811) | | (104,338) |
Cash and cash equivalents at beginning of year | 502,420 | | 606,758 |
Cash and cash equivalents at end of period | $343,609 | | $502,420 |
FLEET INFORMATION
As of December 31, 2008, OSG’s owned, operated and newbuild fleet totaled 154 International Flag and U.S. Flag vessels compared with 156 at December 31, 2007. Fifty-one percent, or 77 vessels, were owned as of December 31, 2008, with the remaining vessels bareboat or time chartered-in. Adjusted for OSG’s participation interest in joint ventures and chartered-in vessels, the fleet totaled 142 vessels. OSG’s newbuild program totaled 32 vessels (18 owned and 14 chartered-in) 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 on www.osg.com.
Vessel Type | Vessels Owned | Vessels Chartered-in | Total at Dec. 31, 2008 |
Operating Fleet | Number | Weighted by
Ownership | Number | Weighted by
Ownership | Total Vessels | Vessels
Weighted by
Ownership | Total
Dwt |
VLCC (including ULCC) | 9 | 9.0 | 10 | 7.5 | 19 | 16.5 | 5,962,867 |
Suezmax | - | - | 3 | 2.5 | 3 | 2.5 | 465,017 |
Aframax | 4 | 4.0 | 16 | 11.0 | 20 | 15.0 | 2,195,837 |
Panamax | 9 | 9.0 | 2 | 2.0 | 11 | 11.0 | 764,083 |
Lightering | 2 | 2.0 | 3 | 2.0 | 5 | 4.0 | 441,772 |
International Flag Crude Tanker | 24 | 24.0 | 34 | 25.0 | 58 | 49.0 | 9,829,576 |
Panamax (LR1) | 4 | 4.0 | 1 | 1.0 | 5 | 5.0 | 364,323 |
Handysize1 (MR) | 10 | 10.0 | 23 | 23.0 | 33 | 33.0 | 1,482,555 |
International Flag Product Carrier | 14 | 14.0 | 24 | 24.0 | 38 | 38.0 | 1,846,878 |
Car Carrier | 1 | 1.0 | - | - | 1 | 1.0 | 16,101 |
Total Int’l Flag Operating Fleet | 39 | 39.0 | 58 | 49.0 | 97 | 88.0 | 11,692,555 |
Handysize | 5 | 5.0 | 5 | 5.0 | 10 | 10.0 | 461,127 |
ATB | 7 | 7.0 | - | - | 7 | 7.0 | 204,150 |
Lightering: | 4 | 4.0 | - | - | 4 | 4.0 | 152,770 |
Total U.S. Flag Operating Fleet2 | 16 | 16.0 | 5 | 5.0 | 21 | 21.0 | 818,047 |
LNG Fleet | 4 | 2.0 | - | - | 4 | 2.0 | 864,800 cbm |
TOTAL OPERATING FLEET | 59 | 57.0 | 63 | 54.0 | 122 | 111.0 | 12,510,602 |
Newbuild/Conversion Fleet | | | |
International Flag | | | | | | | |
VLCC | 3 | 3.0 | - | - | 3 | 3.0 | 893,000 |
FSO | 2 | 1.5 | - | - | 2 | 1.5 | 883,548 |
Aframax | 2 | 2.0 | - | - | 2 | 2.0 | 226,010 |
Panamax (LR1) | 7 | 7.0 | - | - | 7 | 7.0 | 514,000 |
Handysize (MR) | 2 | 2.0 | 6 | 6.0 | 8 | 8.0 | 390,350 |
Chemical Tanker | - | - | 1 | 1.0 | 1 | 1.0 | 19,900 |
U.S. Flag | | | | | | | |
Product Carrier | - | - | 7 | 7.0 | 7 | 7.0 | 327,705 |
Lightering ATB | 2 | 2.0 | - | - | 2 | 2.0 | 91,112 |
TOTAL NEWBUILD FLEET | 18 | 17.5 | 14 | 14.0 | 32 | 31.5 | 3,345,625 |
TOTAL OPERATING & NEWBUILD FLEET | 77 | 74.5 | 77 | 68.0 | 154 | 142.5 | 15,856,227 |
| | | | | | | | | | |
1Includes two owned U.S. Flag Product Carriers that trade internationally with associated revenue included in the Product Carrier segment
2Overseas Integrity and OSG 300 were in layup as of December 31, 2008
Average Age of International Operating Fleet
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 12/31/08 | Average Age of
OSG’s Owned Fleet at 12/31/07 | Average Age of
World Fleet at 12/31/08* |
VLCC (including ULCC) | 8.1 years | 7.0 years | 8.4 years |
Aframax | 9.5 years | 9.2 years | 8.4 years |
Panamax** | 5.3 years | 4.3 years | 8.1 years |
Handysize | 6.4 years | 6.2 years | 8.6 years |
*Source: Clarkson database as of January 1, 2009.
**Includes Panamax tankers that trade crude oil and refined petroleum products.
Off hire and Scheduled Drydock
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 fourth quarter of 2008 and anticipated days off hire for the above-mentioned events by class for 2009.
| Actual Days Off Hire | Projected Days Off Hire |
| Q408 | Q109 | Q209 | Q309 | Q409 |
Trade – Crude Oil |
VLCC | 24 | 23 | 59 | 28 | 22 |
Suezmax | — | 2 | 25 | 4 | 4 |
Aframax | — | 71 | 45 | 25 | 12 |
Panamax | 49 | 29 | 8 | 7 | 5 |
Trade – Refined Petroleum Products |
Panamax | 2 | 3 | 5 | 6 | 5 |
LR2 | — | — | 3 | — | 3 |
Handysize | 32 | 79 | 136 | 78 | 41 |
Trade – U.S. Flag |
Product Carrier | 12 | 19 | 15 | 16 | 11 |
ATB | 26 | 9 | 9 | 77 | 57 |
Other | 8 | 3 | 2 | 4 | — |
Total | 153 | 238 | 307 | 245 | 160 |
| | | | | | | | |
Excludes 112 days in the fourth quarter of 2008 that two U.S. Flag vessels, the Integrity and M300, were in layup.
APPENDIX 1 - RECONCILIATION TO NON-GAAP FINANCIAL INFORMATION
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 Dec. 31, | Fiscal Year Ended Dec. 31, |
($ in thousands) | 2008 | 2007 | 2008 | 2007 |
Time charter equivalent revenues | $348,703 | $251,756 | $1,545,385 | $1,039,211 |
Add: Voyage Expenses | 44,422 | 25,087 | 159,312 | 90,094 |
Shipping revenues | $393,125 | $276,843 | $1,704,697 | $1,129,305 |
Consistent with general practice in the shipping industry, the Company uses time charter equivalent revenues, which represents shipping revenues less voyage expenses, as a measure to compare revenue generated from a voyage charter to revenue generated from a time charter. Time charter equivalent revenues, a non-GAAP measure, provides additional meaningful information in conjunction with shipping revenues, the most directly comparable GAAP measure, because it assists Company management in making decisions regarding the deployment and use of its vessels and in evaluating their financial performance.
EBITDA Reconciliation
The following table shows reconciliations of net income, as reflected in the consolidated statements of operations, to EBITDA:
| Three Months Ended Dec. 31, | Fiscal Year Ended Dec. 31, |
($ in thousands) | 2008 | 2007 | 2008 | 2007 |
Net income/(loss) | ($79,545) | $21,037 | $317,665 | $211,310 |
(Credit)/provision for income taxes | (32,162) | (3,674) | (34,004) | 4,827 |
Interest expense | 9,600 | 21,186 | 57,449 | 74,696 |
Depreciation and amortization | 47,821 | 50,374 | 189,163 | 185,499 |
EBITDA | ($54,286) | $88,923 | $530,273 | $476,332 |
EBITDA represents operating earnings, which is before interest expense and income taxes, plus other income and depreciation and amortization expense. EBITDA is presented to provide investors with meaningful additional information that management uses to monitor ongoing operating results and evaluate trends over comparative periods. EBITDA should not be considered a substitute for net income or cash flow from operating activities prepared in accordance with accounting principles generally accepted in the United States or as a measure of profitability or liquidity. While EBITDA is frequently used as a measure of operating results and performance, it is not necessarily comparable to other similarly titled captions of other companies due to differences in methods of calculation.
APPENDIX 2 - CAPITAL EXPENDITURES
The following table presents information with respect to OSG’s capital expenditures for the three months and fiscal year ended December 31, 2008 and 2007:
| Three Months Ended Dec. 31, | Fiscal Year Ended Dec. 31, |
($ in thousands) | 2008 | 2007 | 2008 | 2007 |
Expenditures for vessels | $150,090 | $147,689 | $608,271 | $545,078 |
Investments in and advances to affiliated companies | 32,107 | 1,370 | 37,871 | 31,083 |
Payments for drydockings | 12,828 | 16,916 | 53,560 | 69,892 |
| $195,025 | $165,975 | $699,702 | $646,053 |
APPENDIX 3 -FIRST QUARTER 2009 TCE RATES
The Company has achieved the following average estimated TCE rates for the first quarter of 2009 for the percentage of days booked for vessels operating through February 13, 2009. 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. In addition, information presented for VLCCs as fixed includes management’s expectations with respect to the synthetic time charters entered into by the Company.
| | | First Quarter Revenue Days | |
Vessel Class and Charter Type | Average TCE Rate | Fixed as of 2/13/09 | Open as of 2/13/09 | Total | % Days Booked |
Business Unit – Crude Oil | | | | | |
VLCC – Spot | $50,500 | 382 | 238 | 620 | 62% |
VLCC – Fixed | $46,000 | 450 | 280 | 730 | 62% |
Suezmax – Spot | $44,000 | 124 | 105 | 229 | 54% |
Aframax – Spot | $37,500 | 573 | 432 | 1,005 | 57% |
Aframax – Fixed | $41,000 | 306 | — | 306 | 100% |
Aframax Lightering – Spot | $31,000 | 441 | 336 | 777 | 57% |
Panamax – Spot | $31,000 | 337 | 267 | 604 | 56% |
Panamax – Time | $28,000 | 447 | — | 447 | 100% |
Business Unit – Refined Petroleum Products | | | | |
Panamax – Spot | $29,0001 | 242 | 120 | 362 | 67% |
Panamax – Time | $19,000 | 180 | — | 180 | 100% |
Handysize – Spot | $21,000 | 765 | 410 | 1,176 | 65% |
Handysize – Time | $20,000 | 1,714 | — | 1,714 | 100% |
Business Unit – U.S. Flag | | | | |
Product Carrier – Spot | $32,500 | 48 | 71 | 119 | 40% |
Product Carrier – Time | $41,500 | 733 | — | 733 | 100% |
ATB – Spot | $33,000 | 248 | 103 | 351 | 71% |
ATB – Time | $31,500 | 360 | — | 360 | 100% |
1 Includes one LR2 for 81 fixed days at $23,000/day.
APPENDIX 4 - 2009 FIXED TCE RATES
The following table shows average estimated TCE rates and associated days booked for 2009 as of February 13, 2009.
| Fixed Rates and Revenue Days as of 2/13/09 |
| Q209 | Q309 | Q409 |
Business Unit – Crude Oil | | | |
Aframax | | | |
Average TCE Rate | $41,500 | $40,500 | $29,500 |
Number of Revenue Days | 246 | 169 | 36 |
Panamax1 | | | |
Average TCE Rate | $27,500 | $27,500 | $27,000 |
Number of Revenue Days | 344 | 276 | 230 |
Business Unit – Refined Petroleum Products |
Panamax | | | |
Average TCE Rate | $19,000 | $ — | $ — |
Number of Revenue Days | 93 | — | — |
Handysize | | | |
Average TCE Rate | $19,500 | $21,500 | $21,500 |
Number of Revenue Days | 1,653 | 990 | 920 |
Business Unit – U.S. Flag | | | |
Product Carrier | | | |
Average TCE Rate | $44,000 | $44,500 | $45,500 |
Number of Revenue Days | 670 | 736 | 827 |
ATB | | | |
Average TCE Rate | $31,500 | $31,500 | $32,000 |
Number of Revenue Days | 364 | 368 | 337 |
1Includes one vessel on bareboat charter.
Due to the recent high volatility in both freight rates and bunker rates and due to short-term differences between pool earnings and FFA settlements, quarterly average synthetic TCE rates for VLCCs are not provided since actual TCE rates achieved for these synthetic time charters may differ, possibly substantially, from the expected rates.
# # #
EARNINGS CONFERENCE CALL INFORMATION
OSG has scheduled a conference call for today at 11:00 a.m. ET. Call-in information is (800) 762-8779 (domestic) and (480) 248-5081 (international). The conference call and supporting presentation can also be accessed by webcast, 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 March 9, 2009; the number for the replay is (800) 406-7325 (domestic) and (303) 590-3030 (international). The passcode for the replay is 3961182.
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, the outcome of negotiations with Aker and Bender, 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 and synthetic TCE rates achieved for 2009, projected drydock and repair schedule, timely delivery of newbuildings in accordance with contractual terms, credit risks of counterparties including charterers, suppliers and shipyards and the impact this may have on OSG 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 2008 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.
