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MarineM O N E Y

The Ship Finance Publication of Record

INTERNATIONAL

Hamburg Singapore LONDON NEW YORK OSLO PIRAEUS

June/july 2012 VOLUME 28, NUMBER

Marine Moneys Rankings of PubliclyTraded Shipping Companies 2011


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C o n t e n t s June/July 2012

The Painted Ponies Go Up and DownJim Lawrences annual tribute. page 2

Outwit, Outplay, Outlast Shippings Year of the SurvivorGeorge Weltman announces the winners. page 4

Total Return to Shareholders

Only One Way to Go!Jim Lawrence puts TRS performance in an historical perspective.

page 20

The Tip of the Iceberg

George Weltman looks underneath the surface at impairments. page 24

The Class of 2011Jim Lawrence presents the Freshman Class and updates the

performance of those that came before. page 26

The Rankings MethodologyAn explanation of the metrics behind our rankings for those

that like to look under the hood. page 30

The CompaniesAt-a-glance financial profiles of all 84 companies we ranked.

page 34

Making Money Up and Down the

Shipping CycleOur secretive author reports on the equity analysts performance

and their outlooks. page 71

The Final Word page 76

Alphabetical Index to the CompaniesAn easy way to find your company or a potential client. page 78

Cover art created by John M. Kulukundis


4/84Marine Money www.marinemoney.com

companies actually delivered

for their shareholders (See the

story on Total Return to Share-

holders, this issue). Undoubt-

edly owners, financiers and

investors alike wish they had

gotten off the carousel and now

many cannot, as it continues its

mercilessly repetitive ride. Asone owner working through the

process mentioned, maybe next

time we will get it right.

For 21 years Marine Money

editors have been pouring over

the financial reports of the

international shipping

industrys best companies. The

saga of wealth created (and

lost), the stories those numberstell of energy delivered, food

carried, and consumer goods

transported is beyond enor-

mous. No one image could ever

convey the achievements of

even a single ship, and so too

the financial results this year fail

to really tell the whole story.

The Painted PoniesGo Up and Down

By Jim Lawrence

t was 1991, the second year

of Marine Moneys Annual

Ranking of publicly traded

shipping companies, when the

Chart for the Top Ten Achievers

was a list of just eight compa-

nies, because they alone met the

Editors test for reasonable

results. Headlines from MarineMoney that year screamed

about minimum value covenant

breaches and Ownership: A

bankers nightmare re-emerges.

The industrys Median Return

on Assets was a paltry 1%. Its

Return on Equity 3%.

We live with the industry

cycles, which means the current

market is hard work, but as theJoni Mitchell ballad goes:

And the seasons they go 'round

and 'round

And the painted ponies go up and

down

We're captive on the carousel of

time

We can't return we can only look

behind

From where we cameAnd go round and round and

round

In the circle game

So here we are again, marking

the financial achievements of an

industry, in another year where

truth be told only nine public

Well, they tell a great deal. It

was a brutal year, but tell me

something I do not know

already. Well here it is, while

supply issues buffet earnings,

and liquidity focuses the minds

of the industrys sharpest CEOs

and CFOs, their ships which

carry the goods and theseafarers who work those ships,

gave us all another year of

moving the worlds cargoes

safely around the world, largely

out of sight of consumers every-

where, consumers, who have

little idea just how dependent

upon these great ships and their

crews, they really are.

You do not see the faces of themen and women who sail in

those numbers. Nor do you see

the enormous amount of

thought and engineering work

going into the ships to meet the

next and the next generation of

environmental regulation. Nor

do we see in the numbers the

technology which increasingly

links ships and their crews to

home and office, and the invest-

ment that takes to keep good

men and women coming to sea

It was a tough year for sure. But

we have been there before and

this next time I am sure will bethe last time we are where we

are today. Those painted

ponies only have one way to go

for sure!

Finally, it is enormously impor-

tant to congratulate all the men

and women who work not only

at sea but ashore ensuring this

great industry continues

forward. Our hats off to thebest of the best and my thanks

to the Editor of Marine Money,

George Weltman, Cari

Koellmer who returns from

maternity leave to complete this

issue and our superb database

guru for their superior guidance

and leadership in the project.

I


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put in the context of the macro

events discussed earlier. But

demand was easily over-

whelmed by the nagging supply

issue, which saw total fleet

growth of 8.2%, the highest

level in more than 20 years.These two numbers equate to a

total fleet utilization of 84%,

but this was largely artificially

supported by a jump in the

LNG fleet utilization. To put

this number in context, it is

above the very depressed level

of 2009, but in line with the

levels of the early 1990s which

again were not a satisfactory

period for shipping.

For the first time since the

financial crisis, gravity, at last,

had an impact on asset values,

which declined finally catching

up to and reflecting earnings.

For perspective, second hand

values dropped across the board

with five year old vessels down

around 20% for tankers and

30% for bulk carriers. Alreadylow revenues combined with

the markdowns created signifi-

cant losses for shipping in

2011.

For each of the main sectors the

story was more or less the same.

As a result of this market stability,

a relatively small number of

distressed ship sales materialized.

During the same period equity

and debt markets recovered,

enabling many owners to refi-

nance and strengthen theirbalance sheets.

That was then; this is now. In

2011, the average time charter

rates referred to earlier fell by

50% from the previous 30-

month average of $35,000/day

to about $17,500/day. Reality

Bites.

It would be hard to recall amore volatile and challenging

year for shipping than 2011. It

was a year of financial, political

and natural turmoil including

the sovereign debt crisis, the

Arab Spring and two natural

disasters, an earthquake and

tsunami in Japan, and the

flood of the century in

Austral ia, both of which

directly impacted shipping. Butwhile the macro picture was

bleak, demand growth was not

bad. While global GDP growth

did slow to 3.8%, less than the

4.4% projected, it was not a

bad year historically when

compared to a strong 2010 and

Outwit, Outplay,Outlast Shippings

Year of the SurvivorBy George WeltmanThe tanker market experienced

the double whammy of

declining demand combined

with increasing supply which

brought average rates down to

the lowest level since 1994.

The miracle of the dry bulk

sector is that it did not collapse

Average freight rates fell by

more than 40%, led by a more

than 50% drop in Capesize

rates. The culprit again was fleet

capacity growth which topped

15%, a modern day record

despite ongoing delays, slippage

and cancellations. Weighing

against this growth was strong,albeit volatile, tonnage demand

which grew at 10%, driven by

Chinese re-stocking of coal and

iron ore in the second half of

the year.

In the container sector, the

math was much the same, but

the results not so bad. Demand

growth was 7.5%, half that of

the prior year, while fleetcapacity grew by 8%. Condi-

tions were strong in the first half

of the year but much weaker in

the second half. Here the chief

protagonist was the slowdown

in the US and European

economies in the second half of

1 The factual information which follows was gleaned from that report.

IntroductionAs we put pen to paper, it often

helps if we look back at what we

wrote in the prior years intro-

duction to the rankings. It was

not a pleasant sight, serving

only as a reminder that this isthe third year of the down cycle

driven by weak economic

growth, a moribund or at least

slowing China and more ships

on the water.

Nevertheless, we need to put

2011 in context, which is what

Peter Anker does best in the

introduction to The Platou

Report 20121.

After the financial crisis reared its

ugly head in the third quarter of

2008, the shipping markets held

up surprisingly well right through

to the end of 2010. This was

mainly due to a very quick and

forceful response to the crisis by

policymakers, in general, and by

China in particular.

Time charter rates for VLCCs,

Capesizes and a 4500 TEU

Containership held steady at an

average of $35,000/day from the

third quarter of 2008 through to

the final quarter of 2010.


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the year. Overall, average freight

rates rose, as the liners managed

capacity and pushed through

rate increases, but market

performance was uneven.

As has historically been the

case, disaster portends well forshipping. Already increasing

underlying demand for LNG

spiked as a result of Japans

earthquake and nuclear disaster.

LNG and coal were needed to

replace the lost nuclear power.

With limited availabili ty of

LNG in the Pacific, the fuel was

sourced from the Atlantic,

resulting in increased ton miles.

Against supply growth of 10%,estimated tonnage demand

grew by an estimated 20%.

With tightening market funda-

mentals, freight rate rose an

estimated 93% to $93,000/day

more than double that of the

prior year.

With this as the backdrop to

this years rankings, there is

little in the way to project thewinner of this years rankings of

public shipping companies. Its

been three years and the

outlook continues to be bleak

in all the main sectors, although

containers and LNG did show

some promise. Like the televi-

sion show, this years Survivor

will have successfully outwitted,

outplayed and outlasted the

competition. Who will have aleg up? Share prices have largely

collapsed as investors fled the

market; balance sheets have

been decimated by impair-

ments and earnings were largely

negligible if positive at all. Its

anyones game.

portfolio, PST would have to

fund such new vessels through a

combination of equity, debt

and/or internal cash resources.

Any potential acquisitions will be

benchmarked against PSTs

distribution yield to ensure thatthey are accretive to Unitholders.

This places a constraint on PSTs

ability to issue new Units since its

investment decision will be

compared against its distribution

yield, which is in turn a function

of the prevailing trading prices of

the Units. At the same time, the

amount of debt that PST can

take on for each acquisition is

limited by and subject to credit,debt service and prudence consid-

erations. Taken together, this has

constrained PSTs operationa

flexibility as a listed trust, and

inhibited its business expansion.

Accordingly, the Offeror takes the

view that delisting PST would

liberate PST from these

constraints and provide more

flexibility to respond to changingdynamics in the shipping market.

The Exit Offer would therefore

provide Unitholders with an

opportunity to realise their invest-

ment in PST at the Exit Offer

Price, whilst providing the

Offeror and PST, as a nonlisted

entity, greater operational flexi-

bility to pursue opportunities and

make investment decisionswithout being constrained by

market-based yield expectations,

market sentiment and price

volatility.

This was the year that Chapter

11 reared its ugly head and

effectively erased some historic

Deletions were far more

numerous as merger and acqui-

sition activity picked up.

DryShips acquired its affiliate

OceanFreight as was the case in

the previously mentioned

acquisition of Crude Tankers by

Capital Product Partners. Lastlyin an interesting diversification

play, brown water specialist,

Kirby saw the possibilities of

the blue water business run by

K-Sea and acquired it.

Then there were public compa-

nies that went private. After its

acquisition of publicly traded

Eitzen Bulk in 2010, Ultragas

ApS made a compulsory offerfor the remaining shares as it

passed the 90% threshold. On a

less positive note, this year

Horizon Lines shares moved tothe pink sheets, as a result of the

restructuring of its balance

sheet. Frustrated and limited as

a public entity, Pacific Shipping

Trusts majority shareholder

Pacific International Lines

(Private) Limited took the

former private. Quoted below

from the offering memo-

randum, the rationale for this

decision provides an interestingperspective and a worthwhile

digression on the positives and

negatives of being public and

the nature of the trust structure:

For as long as PST remains a

listed business trust and seeks to

expand its business and vessel

Who s on first,What s onsecond, I Don tKnow is onthird...But before, we find out who

won, we need to update the

lineup. Yes, believe it or not,there was some consolidation,

but the larger trend of the year

was going private, either volun-

tarily or involuntarily. Despite

substantial changes, as compa-

nies entered or exited, our total

sample remained relatively

steady at 84 down slightly from

the 88 in last years sample.

Starting with the additions, webrought into our sample the

freshman class of 2010

consisting of Baltic Trading,

Scorpio Tankers, Costamareand Navios Acquisition, with

the latters inclusion based upon

the timing of its fleet acquisi-

tion rather than the IPO date of

this SPAC. The fifth member of

that class, Crude Tankers, never

made it, having been acquired

by its affiliate Capital Product

Partners during the year. The

SEC also provided a great

service by accelerating the filingdate for foreign filers to April

30th allowing us to recapture

many companies which histori-

cally missed our cut-off. These

included Stealthgas, Euroseas,

and Newlead among others.

...make investment decisions without beingconstrained by market-based yield expecta-tions, market sentiment and price volatility.


9/84www.marinemoney.com Marine Money

entrants. Fallen by the wayside

were General Maritime, TBS

International, Omega Naviga-

tion, Trailer Bridge and Berlian

Laju Tankers. Utilizing the legal

system effectively, General

Maritime, TBS International

and Trailer Bridge all quicklyemerged as private entities with

new ownership. Omega and

BLT remain stalled in the

process.

We also took advantage of the

overhaul to make proactive

changes. We removed Aegean

Marine Petroleum Network

and Chemoil as we felt these

businesses were not a fit as theyare more service-related than

shipping. Renamed Jason Ship-

ping, Camillo Eitzen fell upon

hard times and is only left with

its shareholding of Eitzen

Chemical making it more or

less duplicative. Lastly, we

replaced Wilh. Wilhelmsen

up to Mr. Pynes preaching, as

this year Kirby finished in the

winners circle.

Kirby is the poster child for

long-term consistent perform-

ance, with strong results

produced in each categoryannually. For example, over the

seven year period for which we

have data, Kirbys profit margin,

ROE, ROA have averaged

respectively: 25.4%, 14.9% and

14.4% with little in the way of

variation as one would expect

To earn this years top place, the

company had top ten finishes in

TRS (2nd), ROE (8th), ROA

(1st) and price/book (4th)Particularly impressive was its

2nd place finish in TRS, which

came in at 49.5%, an amazing

result given investors indiffer-

ence to the sector in general, but

still well below that of category

winner, Golar LNG, at 204%.

shipping company. Then, too,

during periods such as these, it

is an opportune time for those

forgotten industrial shippers,

who just slog cargo to and fro,

to shine. Stable earnings with

no asset play are an unexciting

strategy but sometimes the starsalign. Lastly, it didnt hurt if

you were in a recent Freshman

Class or were from a Greek

shipping family.

Every year we announce the

winners and every year we are

criticized by Kirbys Joe Pyne

for our short-sighted view and

reminded that a single year is

not a measure of financialperformance. It is how you

perform over the long-run that

matters. And, in the long

distances, slow and steady wins

the race, according to the right-

eous. Despite top ten finishes in

three of the preceding 6 years,

the market has finally caught

Additions Deletions MIA

2011 Rankings Changes

New

Freshman Class of 2010

Baltic Trading

Scorpio Tankers

Costamare

Navios Maritime Acquisition

Returning after an Absence

StealthGas

Euroseas

NewLead

MISC

Substitution

Wilh. Wilhelmsen ASA for Wilh. Wilhelmsen

Holdings

M&A

Oceanfreight acquired by DRYS

Crude Tankers Acquired by CPLP

K-Sea acquired by Kirby

Delisted

PST

Ultrabulk

Horizon Lines

Chapter 11

General Maritime

TBS International

Omega Navigation

Trailer Bridge

Berlian Laju Tankers

Dropped

Camillo Eitzen (Jason Shipping)

Aegean Marine Petroleum Network

Chemoil

Malaysian Bulk Carriers

Sinotrans

Holdings with Wilh.

Wilhelmsen ASA, the latter

being a pure shipping and logis-

tics company, as opposed to a

passive holding company.

While both companies pay a

dividend, the shares of Wilh.

Wilhelmsen ASA are moreactively traded. Hence, we

pulled the switch.

The chart below summarizes

the changes to our ranked

companies.

The Year ofthe TortoiseSo who, in fact, were the

survivors of the competition? Inactuality, if one thinks about it,

the results should not come as a

surprise. Mitigation of market

risk, participating in an

untrodden sector and a healthy

balance sheet should seal

success even in an extended

poor market for a traditional



Company TRS Turnover Profit ROE ROA Price/ 2011

Rank Rank Rank Rank Rank Book Overall

Rank Rank

Kirby Corporation 2 12 49 8 1 4 1

Costamare Inc 8 47 14 4 7 3 2

Navios Maritime Partners 20 42 5 10 5 10 3

Safe Bulkers Inc. 29 45 3 1 2 14 4

Algoma Central Corporation 5 13 51 6 4 28 5

Golar LNG Ltd. 1 68 13 21 16 1 6

AP Moller - Maersk Group 27 11 48 24 3 25 7

Teekay LNG Partners L.P. 12 81 6 17 24 6 8

Nippon Yusen Kaisha 15 8 65 12 14 33 9

U-Ming Marine Transport 26 51 27 16 17 11 10

DFDS A/S 16 9 62 14 13 35 11

Knightsbridge Tankers Limited 36 54 12 20 8 20 12

Alexander & Baldwin 7 15 61 38 28 9 13

Wilh. Wilhelmsen ASA 37 82 1 11 6 23 14

Kawasaki Kisen Kaisha, Ltd. 18 5 67 19 15 40 15

Mercator Lines Singapore 19 40 24 23 18 42 16

CMB 25 35 38 13 20 37 17

Stolt-Nielsen SA 10 16 58 28 25 34 18

Mitsui OSK Lines 30 10 60 25 11 36 19

MISC 6 33 56 22 52 8 20

Danaos Corporation 14 74 9 37 19 30 21

Teekay Offshore Partners LP 9 32 34 70 38 2 22

Precious Shipping 13 67 25 32 33 16 23

Diana Shipping Inc. 46 58 11 18 9 47 24

Rickmers Maritime 22 73 2 15 10 68 25

Capital Product Partners 32 71 18 5 34 31 26

Grindrod Limited 28 1 77 27 40 22 27

International Shipholding 24 25 55 9 31 53 28

Ship Finance International Limited 56 83 7 7 21 24 29

Seaspan Corporation 3 78 8 59 23 32 30

Seacor Holdings Inc. 17 18 66 42 43 18 31

D/S Norden A/S 35 3 71 34 27 48 32

Finnlines Plc 11 28 59 49 50 29 33

Exmar NV 4 36 52 61 61 13 34

COSCO Holdings 55 19 57 73 12 12 35

Golden Ocean Group 49 38 30 41 29 44 36

China Shipping Development 42 37 50 33 44 27 37

Navios Maritime Holdings Inc. 33 43 36 35 30 61 38

Orient Overseas International Limited 43 14 73 36 46 26 38

Odfjell ASA 38 24 68 2 60 49 40

IM Skaugen ASA 23 22 76 68 59 5 41

Concordia Maritime 40 59 32 31 39 59 42

Overall Performance Rankings





Rank Rank

Global Ship Lease, Inc. 69 57 10 39 22 63 42

Navios Maritime Acquisition Corp. 31 80 15 51 36 50 44

Jinhui Shipping&Transportation 64 41 28 26 26 79 45

Samudera Shipping Line Ltd 47 4 72 29 42 72 46

Euroseas 34 44 35 47 49 60 47

Thoresen Thai 41 30 53 46 45 55 48

Goldenport Holdings 45 49 26 45 51 57 49

Pacific Basin Shipping Limited 44 20 63 44 58 46 50

First Ship Lease 39 70 4 55 55 52 50

Teekay Corp. 21 52 39 65 56 43 52

Globus Maritime 66 65 17 30 32 71 53

Scorpio Tankers 59 50 64 3 79 39 54

Neptune Orient Lines 53 2 80 71 69 19 54

China Shipping Container Lines 50 17 81 64 67 17 56

STX Pan Ocean Co., Ltd. 52 6 79 50 65 45 57

Ultrapetrol Bahamas Limited 62 29 54 58 41 58 58

Genco Shipping & Trading Ltd. 61 75 16 43 35 75 59

Yang Ming Marine Transport 60 7 82 74 74 15 60

Frontline LTD 80 34 46 82 66 7 61

StealthGas Inc. 58 55 41 40 57 67 62

Teekay Tankers 71 72 22 52 54 51 63

Baltic Trading Ltd 54 79 33 48 53 56 64

DryShips Inc. 70 69 20 53 47 66 65

Overseas Shipholding Group 72 39 43 66 37 74 66

d'Amico International Shipping 65 27 70 57 62 65 67

Hellenic Carriers 48 61 23 75 78 62 68

Regional Container Lines PCL 67 21 83 56 72 54 69

Eagle Bulk Shipping Inc. 78 56 37 54 48 80 69

Tsakos Energy Navigation (TEN) 51 63 47 62 64 70 71

DHT Holdings, Inc. 76 46 21 72 71 73 72

Nordic Tankers 73 23 75 78 73 41 73

Euronav 74 60 40 63 63 69 74

Courage Marine Group 63 48 84 76 80 21 75

Nordic American Tanker Shipping Ltd 57 84 69 60 68 38 76

Star Bulk 68 64 31 69 75 78 77

Paragon Shipping 77 66 19 79 83 77 78

Seanergy Maritime Holdings Corp. 81 53 29 83 81 76 79

Eitzen Chemical 84 31 74 80 76 64 80

Excel Maritime Carriers Ltd 75 76 44 67 70 81 81

D/S Torm 83 26 78 77 77 83 82

Freeseas 82 62 45 81 84 82 83

NewLead Holdings Ltd 79 77 42 84 82 84 84

Overall Performance Rankings continued



Company Total Turnover Profit ROE ROA Price / EV/ Current Debt/ Debt

Returns to Rate Margin Book EBITDA Ratio Capitalization Coverage

Shareholders Ratio

Industry Mean (34.0%) 0.37 33.2% (12.1%) (0.4%) 0.79 10.43 1.65 46.9% (1.75)

Industry Median (36.8%) 0.21 31.2% 2.2% 2.3% 0.57 7.24 1.19 47.9% 1.45Industry Std. Dev. 38.3% 0.34 25.5% 61.4% 10.6% 0.80 27.98 1.50 20.4% 27.50

Coefficient of Variation (1.13) 0.91 0.77 (5.06) (26.80) 1.02 2.68 0.91 0.43 (15.68)

Alexander & Baldwin 5.1% 0.68 13.0% 3.0% 4.5% 1.52 9.81 0.99 31.1% 4.56

Algoma Central Corporation 11.0% 0.76 22.3% 15.7% 11.2% 0.85 3.79 2.98 32.6% 9.87

AP Moller - Maersk Group (22.4%) 0.83 24.5% 8.1% 12.9% 0.86 3.17 1.12 33.3% 12.05

Baltic Trading Ltd (49.1%) 0.11 43.2% (0.1%) 1.0% 0.38 10.68 5.90 26.5% 0.91

Capital Product Partners (27.0%) 0.13 55.6% 23.0% 3.6% 0.82 13.61 1.12 54.3% 1.10

China Shipping Container Lines (45.8%) 0.57 (2.8%) (9.9%) (4.5%) 1.09 (43.60) 1.05 32.8% (11.72)

China Shipping Development (36.7%) 0.26 22.9% 4.7% 2.3% 0.85 13.34 0.90 46.3% 2.50

CMB (20.7%) 0.29 33.6% 11.6% 5.5% 0.70 6.48 1.14 39.8% 4.17

Concordia Maritime (32.0%) 0.16 43.4% 4.9% 3.0% 0.35 9.45 2.01 50.3% 2.98

COSCO Holdings (49.1%) 0.55 16.2% (25.4%) 6.6% 1.38 4.11 1.31 61.5% 6.31

Costamare Inc 5.0% 0.20 63.9% 25.3% 8.3% 2.59 8.37 0.61 79.6% 7.43

Courage Marine Group (54.1%) 0.20 (32.3%) (30.8%) (22.0%) 0.89 (7.54) 1.28 0.0% (239.00)

D/S Norden A/S (29.6%) 0.99 8.2% 4.4% 4.5% 0.48 4.13 3.24 6.3% 17.97

D/S Torm (90.6%) 0.43 0.7% (51.5%) (11.1%) 0.07 (1.00) 0.18 4.4% (5.73)

d'Amico International Shipping (54.7%) 0.42 9.5% (6.5%) (1.3%) 0.27 11.43 1.70 47.2% (0.89)

Danaos Corporation (10.4%) 0.13 66.5% 3.2% 5.5% 0.83 10.70 0.40 87.2% 3.72

DFDS A/S (11.7%) 0.87 12.9% 11.0% 6.1% 0.76 4.97 1.23 30.6% 5.03

DHT Holdings, Inc. (77.0%) 0.20 52.7% (20.0%) (6.8%) 0.23 5.10 1.45 56.1% (4.57)

Diana Shipping Inc. (38.4%) 0.16 65.0% 9.2% 7.0% 0.50 3.24 9.00 22.2% 24.64

DryShips Inc. (63.6%) 0.14 52.8% (2.2%) 1.9% 0.27 7.75 0.78 54.8% 0.96

Eagle Bulk Shipping Inc. (81.1%) 0.17 33.7% (2.2%) 1.7% 0.09 10.70 0.81 61.9% 0.70

Eitzen Chemical (91.2%) 0.35 6.0% (99.5%) (9.3%) 0.29 35.62 1.57 90.1% (2.62)

Euronav (70.5%) 0.15 33.4% (9.3%) (1.4%) 0.25 9.46 1.17 54.8% (0.52)

Euroseas (29.0%) 0.21 36.1% 0.5% 1.6% 0.35 4.47 1.84 22.5% 2.31

Excel Maritime Carriers Ltd (74.2%) 0.12 30.0% (12.8%) (5.8%) 0.08 9.61 0.49 38.1% (6.71)

Exmar NV 11.5% 0.27 20.1% (9.1%) (0.7%) 1.29 13.11 1.42 72.3% (0.28)

Finnlines Plc (3.4%) 0.41 14.0% (0.6%) 1.4% 0.84 12.09 0.30 60.9% 0.77

First Ship Lease (31.6%) 0.13 77.0% (5.1%) 0.4% 0.44 6.42 0.62 57.4% 0.14

Freeseas (88.5%) 0.15 29.8% (111.4%) (42.7%) 0.08 0.28 0.53 0.0% (20.63)

Frontline LTD (82.2%) 0.29 27.8% (111.7%) (3.3%) 1.66 7.21 2.45 87.8% (0.65)

Genco Shipping & Trading Ltd. (53.1%) 0.12 63.4% 2.2% 3.6% 0.21 6.14 1.17 56.7% 1.30

Global Ship Lease, Inc. (63.4%) 0.16 65.9% 2.8% 5.1% 0.30 5.43 0.65 59.2% 2.39

Globus Maritime (56.4%) 0.15 57.9% 5.4% 3.9% 0.24 6.30 1.29 43.0% 3.64

Golar LNG Ltd. 203.7% 0.14 64.0% 8.6% 5.6% 5.26 24.02 0.41 62.0% 4.70

Golden Ocean Group (45.4%) 0.26 44.5% 2.6% 4.4% 0.55 5.19 2.00 52.3% 2.34

Goldenport Holdings (37.7%) 0.20 47.3% 0.9% 1.4% 0.37 5.99 0.98 48.5% 0.99

Grindrod Limited (23.8%) 2.09 2.4% 7.6% 2.9% 0.89 8.80 1.89 19.3% 2.24

Hellenic Carriers (42.0%) 0.15 52.5% (27.8%) (11.9%) 0.32 3.70 3.62 46.0% (5.17)

IM Skaugen ASA (19.2%) 0.45 5.2% (13.0%) 0.1% 1.93 27.20 0.84 50.0% 0.01

International Shipholding (20.5%) 0.44 19.1% 13.1% 4.1% 0.43 7.42 1.30 53.4% 2.39

Financial Results





Shareholders Ratio

Jinhui Shipping&Transportation (54.1%) 0.21 46.5% 7.8% 4.6% 0.15 3.06 2.33 38.6% 9.03

Kawasaki Kisen Kaisha, Ltd. (12.6%) 0.95 10.5% 8.9% 5.6% 0.63 5.51 1.29 52.4% 6.84Kirby Corporation 49.5% 0.78 23.7% 14.1% 13.1% 2.54 10.08 1.48 34.6% 17.45

Knightsbridge Tankers Limited (29.6%) 0.18 64.6% 8.9% 7.2% 0.93 7.17 7.33 29.4% 7.64

Mercator Lines Singapore (12.7%) 0.23 47.8% 8.2% 5.6% 0.59 5.86 0.57 36.7% 5.29

MISC 5.3% 0.31 18.3% 8.2% 1.0% 1.57 18.21 1.34 31.4% 1.20

Mitsui OSK Lines (25.7%) 0.83 13.7% 7.8% 6.6% 0.75 5.08 0.92 42.2% 10.85

Navios Maritime Acquisition Corp. (26.3%) 0.11 63.9% (1.6%) 3.6% 0.46 12.09 1.02 78.5% 0.91

Navios Maritime Holdings Inc. (27.8%) 0.21 35.7% 3.9% 4.2% 0.35 6.42 1.47 56.6% 1.37

Navios Maritime Partners (15.3%) 0.21 76.0% 12.4% 8.9% 1.46 7.46 1.12 34.1% 8.45

Neptune Orient Lines (48.6%) 1.37 (1.0%) (16.4%) (5.8%) 0.95 (43.71) 0.83 42.6% (11.95)

NewLead Holdings Ltd (81.2%) 0.12 31.5% (500.3%) (37.0%) (0.02) (0.07) 0.06 0.0% (7.00)

Nippon Yusen Kaisha (10.6%) 0.89 11.5% 11.7% 5.6% 0.79 5.56 1.40 56.3% 7.27

Nordic American Tanker Shipping Ltd (49.5%) 0.09 10.2% (7.8%) (5.0%) 0.65 80.32 4.64 21.0% (25.82)

Nordic Tankers (69.1%) 0.45 5.9% (76.6%) (8.0%) 0.61 28.88 0.74 90.9% (2.47)

Odfjell ASA (31.5%) 0.45 10.3% 30.3% (0.1%) 0.47 11.90 1.27 52.7% (0.08)

Orient Overseas International Limited (36.9%) 0.72 6.9% 3.7% 2.0% 0.85 9.20 2.45 34.3% 6.47

Overseas Shipholding Group (64.8%) 0.25 30.9% (11.5%) 3.5% 0.21 7.19 2.44 56.9% 1.80

Pacific Basin Shipping Limited (37.2%) 0.54 12.0% 2.1% 0.2% 0.51 5.42 3.73 32.5% 0.16

Paragon Shipping (79.9%) 0.15 54.1% (79.7%) (41.5%) 0.18 3.88 0.93 43.3% (27.81)

Precious Shipping (7.6%) 0.14 47.6% 4.8% 3.8% 1.10 12.82 5.75 29.2% 5.03

Regional Container Lines PCL (56.6%) 0.53 (3.9%) (6.0%) (7.1%) 0.43 (12.39) 1.08 31.0% (5.30)

Rickmers Maritime (16.2%) 0.13 79.5% 10.9% 6.6% 0.25 5.63 0.90 61.8% 1.78

Safe Bulkers Inc. (25.6%) 0.20 77.0% 31.1% 12.9% 1.28 6.51 0.74 58.4% 20.55

Samudera Shipping Line Ltd (41.3%) 0.97 7.2% 5.5% 2.3% 0.23 6.23 1.50 43.8% 3.41

Scorpio Tankers (51.6%) 0.19 11.6% 30.0% (17.6%) 0.65 30.89 3.38 33.2% (15.12)

Seacor Holdings Inc. (12.0%) 0.56 11.5% 2.3% 2.3% 1.04 9.72 2.59 35.8% 2.17

Seanergy Maritime Holdings Corp. (84.3%) 0.18 45.3% (112.5%) (32.4%) 0.21 6.33 0.74 79.6% (14.93)

Seaspan Corporation 15.7% 0.11 67.3% (7.7%) 4.9% 0.80 8.90 2.74 71.1% 4.76

Ship Finance International Limited (49.4%) 0.10 69.2% 15.6% 5.3% 0.86 11.78 1.11 67.3% 1.49

Star Bulk (59.2%) 0.15 44.3% (15.1%) (9.1%) 0.16 6.07 0.60 34.8% (12.46)

StealthGas Inc. (51.4%) 0.17 32.7% 2.7% 0.3% 0.25 9.12 1.01 50.3% 0.28

Stolt-Nielsen SA 0.0% 0.62 15.8% 7.1% 4.6% 0.77 7.27 0.62 45.1% 4.51

STX Pan Ocean Co., Ltd. (46.2%) 0.91 0.3% (0.9%) (1.9%) 0.51 231.36 1.20 55.2% (1.42)

Teekay Corp. (15.4%) 0.19 33.6% (11.1%) 0.4% 0.56 10.34 1.07 63.1% 0.29

Teekay LNG Partners L.P. (6.1%) 0.11 69.8% 9.5% 4.9% 1.89 14.65 0.58 61.6% 3.48

Teekay Offshore Partners LP 3.0% 0.32 40.0% (16.0%) 3.4% 3.88 9.22 0.81 78.8% 2.73

Teekay Tankers (64.7%) 0.13 52.6% (2.0%) 0.8% 0.45 8.63 1.66 41.5% 1.69

Thoresen Thai (36.3%) 0.36 20.1% 0.5% 2.1% 0.40 4.85 1.81 29.5% 1.41

Tsakos Energy Navigation (TEN) (46.2%) 0.15 26.0% (9.2%) (1.6%) 0.24 13.28 1.03 59.0% (0.87)

Ultrapetrol Bahamas Limited (53.7%) 0.37 19.2% (7.2%) 2.3% 0.37 9.35 1.44 66.8% 0.55

U-Ming Marine Transport (21.5%) 0.19 47.1% 10.0% 5.6% 1.44 8.00 2.67 25.4% 9.75

Wilh. Wilhelmsen ASA (30.4%) 0.11 106.8% 12.4% 8.7% 0.87 6.11 1.44 50.9% 6.05

Yang Ming Marine Transport (52.7%) 0.90 (3.0%) (26.3%) (8.0%) 1.16 (25.29) 0.79 69.3% (6.43)

Financial Results continued



Kirby is the nations largest

domestic tank barge operator,

transporting bulk liquid prod-

ucts throughout the Mississippi

river system, on the Gulf Intra-

coastal Waterway and, with the

acquisition of K-Sea along all

three U.S. coasts and in Alaskaand Hawaii. In addition, the

company owns a diesel engine

services business.

Overall, the company generated

net earnings of $183 million in

2011, an increase of 36% over

the prior years result despite

high water and flooding along

the Mississippi. This was largely

driven by top line growth asrevenues increased 67% year

over year to $1.85 billion.

Representing 65% of total

revenues, the Marine Trans-

portation segment grew

revenues by 31% and operating

income by 36% compared to

2010. This revenue growth is

attributed to the acquisition of

K-Sea as well as increased tank

barge demand and utilization asproduction volumes increased.

And most impressively, this

growth was achieved with

approximately 75% of these

revenues under term contracts

with only 25% spot. The diesel

engine services segment grew

exponentially largely as the

impact of the United acquisi-

tion was felt. Representing 35%

of total revenues, this segmentexperienced revenue and oper-

ating income growth of 237%

and 231% respectively

compared to the prior year

largely driven by the demand

for the manufacture and service

of hydraulic fracturing equip-

mare most closely followed Tor

Olav Troims dictum that a

strong balance sheet is a sign of

weak management.

The financial product for these

times must be the MLP. The

regular yield should lead tostability in share price and

accretive dropdowns to revenue

and earnings growth. Despite

the malaise of the dry bulk

sector, Navios Maritime Part-

ners finished 3rd in the rank-

ings with top ten finishes in

four categories, including profit

margin (5th), ROE (10th)

ROA (5th) and price/book

(10th). With the fleet timechartered, and a lean cost struc-

ture the profit margin was a

remarkable 76%. Unfortu-

nately, even with its stable yield,

the stock lost favor leading to a

TRS of -15.3%, which, in these

times, was strangely good

enough to place 20th in that

category. In terms of numbers,

revenues continued the

expected trend growing 31% to$187 million however higher

expenses due to the increased

fleet size limited the growth of

net income to $65 million or

approximately 8% year over

year. The company also had a

strong finish in the financial

strength rankings finishing in

17th place, reflecting low

gearing and strong coverage as

it amortizes its debt.

Its name says it all. Following

2009s 1st place finish and last

years 2nd place finish, Safe

Bulkers, based upon three top

five finishes in profit margin

(3rd), ROE (1st) and ROA

cash cows.

Without a doubt all shipping

companies have good relation-

ships with their charterers, but

Costamares appears to go

beyond the norm. This is best

exemplified by the recent vesselswap arrangements with MSC,

in which the latter agreed to re-

deliver older tonnage and

replace them with more

modern tonnage with new

extended time charters. In a

commercial sense, the two

companies are nearly symbiotic.

The company had a strong

performance in all categorieswith four top ten finishes in

TRS (8th), ROE (4th), ROA

(7th) and Price/Book (3rd).

The one major stumbling blockto a higher overall ranking was

the total asset turnover cate-

gory. Interestingly, the

companys financial measures

this year were nearly identical

with those of last years. In

terms of operating performance

voyage revenues grew 8.2% to

$382.2 million, while net

income grew 7.8% to $87.6

million.

In terms of financial strength

the company ranked 62nd

based upon its aggressive use of

leverage; nevertheless, interest

coverage remained substantial.

Of the top five finishers, Costa-

ment. Operating margin was

relatively stable.

In terms of financial strength,

Kirby fell one place in those

rankings this year to 8th place

(in a tie with Jinhui), which was

largely attributable to theacquisition of K-Sea, which

consumed liquidity and added

debt.

In its first regular appearance in

the rankings, Costamares

performance evidenced the

success of its corporate strategy

and its implementation by

taking the place or 2nd posi-

tion. Careful management offleet employment is critical to

the strategy. This involves the

careful choice of counterparties

with whom they enter intolong-term charters, generating

strong contracted cash flows.

These arrangements provide

stable earnings and downside

protection. But should the

market turn up the company

will not be left behind, as a vari-

able portion of the fleet is

employed on short-term char-

ters leaving the company able

to exploit the improving marketas the ships roll off charter. In

addition, with its focus on a

mixed age fleet, the company

differentiates itself somewhat

from its competitors. The older

vessels, with commensurately

lower capital costs are veritable

And, in the long distances,slow and steady wins the race,

according to the righteous.


15/84



(2nd), took the 4th slot. Unfor-

tunately, a declining share price

took its toll hurting its standing

in both TRS and the price to

book categories. Safe Bulkers is

an old-line, Greek shipping

company with a twist. Unlike

its compatriots, which histori-cally focused on second hand

tonnage, the company invests

in high specification, fuel effi-

cient newbuildings in the low

point of the cycle. And while,

like its predecessors, it appreci-

ates the rewards of the spot

market, it also understands the

contribution of long-term char-

ters for cash flow visibility. To

that point, the company alsoopened our eyes to the concept

of forward fixing, a concept we

were unaware of but quickly

appreciated. In terms of finan-

cial strength, the company

finished in the 43rd position

largely based upon reduced

liquidity. Its debt to capitaliza-

tion ratio at 58% remains

reasonable and is adequately

covered by the 2nd highest debtcoverage ratio calculated at 21x.

While the top line grew 7.7%

to $172 million, net income

declined to $89.7 million from

$109.6 million as charter rates

declined 5.4% and operating

costs and days increased due to

the delivery of two new vessels.

Given the overall condition of

the dry bulk market this surelyranks as a stellar performance.

Since its founding, the

company has been a leader in

these rankings and we see no

reason why that should change.

And, last but not least, we note

leader. After all, why would you

change your views? A quick

glance at the top finishers shows

the usual cast of characters

including Diana Shipping, D/S

Norden, Knightsbridge, U-

Ming, Precious Shipping

OOIL, Kirby and Jinhui.

We will again close with our

annual mantra. There are no

winners or losers here just

placeholders. This year seven

companies left the top ten while

only three remained behind as

the poor market added new

victims.

And, as we approach the halfway mark of this year, we see a

far tougher environment with

success again determined by

access to capital, liquidity and

cost management. An already

weak economy is being battered

by the continuing European

financial crisis. The Chinese

economy is slowing and recent

news depicts a weakening in

Indias economy as well. At themicro level, the over-supply of

tonnage remains a major factor

even as tonnage continues to be

absorbed. Similarly, the banks

and capital markets are open

but a natural selection process

has its favorites here too.

Uncertainty still reigns and

with that opportunity. In the

third year of the crisis, the

motto of the TV show Survivorresonates: Outwit, Outplay

Outlast. Are you ready?

Congratulations to all on a job

well done.

Wheat Board. Naturally, this

led to the refinancing of its

credit facilities in order to fund

the above.

With the switchover to IFRS

from Canadian GAAP, year

over year comparisons are diffi-cult. On a re-stated basis

revenues grew from $393.4

million to $582.7 million

which generated net earnings of

$68.8 million versus $18.6

million for the prior year. The

results for the year were driven

largely by higher utilization of

the domestic dry bulk and

tanker fleets, improved expense

ratios and the accretive impactof the ULG transaction. We

would be surprised if this is the

last time weve heard from this

company, which staged a trulyremarkable turnaround.

Rounding out the top ten

finishers are Golar LNG in 6th

place, A.P. Moeller-Maersk in

7th, TK LNG Partners in 8th,

NYK in 9th and U-Ming in

10th. This small group empha-

sizes the importance of being in

the current hot sector, diversi-

fied or simply well-managed.

Lastly, given our credit bent, we

would be remiss if we did not

point you to the financial

strength rankings that follow.

Generally, the rule of thumb

here is once a leader always a

the remarkable performance of

Algoma Central Corporation,

which finished in 5th place in

the financial performance rank-

ings and 6th in the financial

strength rankings. After middle

of the pack rankings for seven

years, this was the proverbialperfect storm. The company

had top ten finishes in TRS

(5th), helped somewhat by its

somewhat illiquid shares, ROE

(6th) and ROA (4th).

The companys president called

the year an outstanding and

game changing 2011. At the

beginning, they announced the

start of the domestic dry bulkrenewal program with an initial

order of one gearless bulk

carrier and three self-unloaders.

This was followed by the acqui-sition of Upper Lakes Groups

interest in the joint domestic

shipping operation which

included ULGs interest in

Seaway Marine Transport along

with eleven 100% owned

vessels, its interest in four

jointly owned vessels as well as

an unloader and gearless bulk

carrier on order in China for

total consideration of $88.4million. The company then

increased its domestic order to

eight new design Great Lakes

class self-unloading bulk

carriers of which six will be

wholly owned and two

managed for the Canadian

Uncertainty still reigns and with thatopportunity. In the third year of the crisis,

the motto of the TV show Survivor resonates:Outwit, Outplay, Outlast.


17/84



Financial Strength Rankings

Company Current Result Debt/Capitalization Coverage 2011 Credit

Rank Rank Rank Rank

Diana Shipping Inc. 1 8 1 1

D/S Norden A/S 9 5 3 2

Knightsbridge Tankers Limited 2 13 11 3

U-Ming Marine Transport 12 10 8 4

Precious Shipping 4 12 20 5

Algoma Central Corporation 10 20 7 6

Orient Overseas International Limited 15 25 15 7

Kirby Corporation 27 26 4 8

Jinhui Shipping&Transportation 17 31 9 8

Grindrod Limited 20 6 37 10

Baltic Trading Ltd 3 11 50 11

Euroseas 21 9 36 12

AP Moller - Maersk Group 47 23 5 13DFDS A/S 41 15 19 13

Seacor Holdings Inc. 13 28 38 15

Thoresen Thai 22 14 43 15

Navios Maritime Partners 46 24 10 17

Pacific Basin Shipping Limited 6 19 57 18

Samudera Shipping Line Ltd 26 38 29 19

Nordic American Tanker Shipping Ltd 5 7 82 20

Wilh. Wilhelmsen ASA 30 47 17 20

Concordia Maritime 18 46 30 20

Alexander & Baldwin 56 17 23 23

MISC 34 18 46 24

Teekay Tankers 24 33 41 24

Mitsui OSK Lines 59 34 6 26

Kawasaki Kisen Kaisha, Ltd. 37 49 14 27

Globus Maritime 38 36 27 28

CMB 45 32 25 29

Golden Ocean Group 19 48 35 29

Nippon Yusen Kaisha 33 57 13 31

Seaspan Corporation 11 75 21 32

Scorpio Tankers 8 22 80 33

Overseas Shipholding Group 16 60 39 34COSCO Holdings 35 66 16 35

Hellenic Carriers 7 40 70 35

International Shipholding 36 51 33 37

Courage Marine Group 39 1 84 38

Mercator Lines Singapore 77 29 18 38

Navios Maritime Holdings Inc. 28 58 44 40

d'Amico International Shipping 23 42 65 40

China Shipping Development 60 41 32 42



Financial Strength Rankings continued


Rank Rank Rank Rank

Safe Bulkers Inc. 70 62 2 43

Stolt-Nielsen SA 72 39 24 44

Regional Container Lines PCL 50 16 71 45

Capital Product Partners 48 52 47 46

Genco Shipping & Trading Ltd. 44 59 45 47

Goldenport Holdings 57 43 48 47

China Shipping Container Lines 52 21 76 49

Odfjell ASA 40 50 60 50

DHT Holdings, Inc. 29 56 69 51

StealthGas Inc. 55 45 56 52

Ultrapetrol Bahamas Limited 31 72 54 53

Euronav 43 54 62 54

Frontline LTD 14 82 63 54D/S Torm 83 4 72 54

Freeseas 78 1 81 57

NewLead Holdings Ltd 84 1 75 57

STX Pan Ocean Co., Ltd. 42 55 66 59

Ship Finance International Limited 49 73 42 60

IM Skaugen ASA 62 44 59 61

Costamare Inc 74 80 12 62

DryShips Inc. 67 53 49 63

Rickmers Maritime 61 68 40 63

Global Ship Lease, Inc. 71 64 34 63

Exmar NV 32 76 61 63

Teekay LNG Partners L.P. 76 67 28 67

Golar LNG Ltd. 80 70 22 68

Teekay Offshore Partners LP 64 78 31 69

Neptune Orient Lines 63 35 77 70

Eitzen Chemical 25 83 68 71

Teekay Corp. 51 71 55 72

Paragon Shipping 58 37 83 73

Tsakos Energy Navigation (TEN) 53 63 64 74

Star Bulk 75 27 78 74

Navios Maritime Acquisition Corp. 54 77 51 76Excel Maritime Carriers Ltd 79 30 74 77

Eagle Bulk Shipping Inc. 65 69 53 78

Danaos Corporation 81 81 26 79

First Ship Lease 73 61 58 80

Finnlines Plc 82 65 52 81

Yang Ming Marine Transport 66 74 73 82

Nordic Tankers 68 84 67 83

Seanergy Maritime Holdings Corp. 69 79 79 84



Global Maritime Industry by Equity Market Capitalization

Company Market Cap Market Cap Sector Domicile$US MM Rank

AP Moller - Maersk Group $29,087 1 Multi-Sector Denmark

MISC $10,850 2 Multi-Sector Malaysia

COSCO Holdings $7,571 3 Multi-sector PRCMitsui OSK Lines $7,518 4 Multi-Sector Japan

Nippon Yusen Kaisha $7,058 5 Multi-Sector Japan

China Shipping Container Lines $4,486 6 Container PRC

Kirby Corporation $3,670 7 Barge USA

Orient Overseas International Limited $3,655 8 Liner Bermuda

Golar LNG Ltd. $3,567 9 Tanker Bermuda

China Shipping Development $3,179 10 Multi-Sector PRC

Kawasaki Kisen Kaisha, Ltd. $3,051 11 Multi-Sector Japan

Neptune Orient Lines $2,466 12 Liner Singapore

Teekay LNG Partners L.P. $2,151 13 Gas Marhall Islands

Teekay Offshore Partners LP $1,879 14 Offshore Marsahll IslandsSeacor Holdings Inc. $1,862 15 Multi-Sector USA

Teekay Corp. $1,837 16 Tanker Marshall Islands

Alexander & Baldwin $1,702 17 Multi-Sector USA

U-Ming Marine Transport $1,281 18 Bulk Taiwan

Stolt-Nielsen SA $1,151 19 Multi-Sector Luxembourg

Yang Ming Marine Transport $1,135 20 Liner Taiwan

STX Pan Ocean Co., Ltd. $1,080 21 Multi-Sector Korea

Wilh. Wilhelmsen ASA $1,055 22 Liner Norway

Grindrod Limited $1,027 23 Multi-Sector South Africa

D/S Norden A/S $966 24 Multi-sector Denmark

Seaspan Corporation $947 25 Container Marshall Islands

DFDS A/S $920 26 Liner Denmark

Costamare Inc $854 27 Container Marshall Islands

DryShips Inc. $850 28 Bulk Marshall Islands

Navios Maritime Partners $818 29 Bulk Marshall Islands

CMB $759 30 Bulker Belgium

Pacific Basin Shipping Limited $758 31 Multi-Sector Bermuda

Ship Finance International Limited $739 32 Multi-Sector Bermuda

Diana Shipping Inc. $610 33 Bulker Marshall Islands

Nordic American Tanker Shipping Ltd $567 34 Tanker Bermuda

Precious Shipping $543 35 Bulker Thailand

Odfjell ASA $474 36 Tanker Norway

Finnlines Plc $467 37 Liner Finland

Exmar NV $444 38 Gas Belgium

Capital Product Partners $425 39 Tanker Marshall Islands

Safe Bulkers Inc. $425 40 Bulk Marshall Islands

Algoma Central Corporation $389 41 Multi-Sector Canada

Danaos Corporation $367 42 Container Marshall Islands



Global Maritime Industry by Equity Market Capitalization continued


Navios Maritime Holdings Inc. $366 43 Bulker Marshall Islands

Frontline LTD $334 44 Tanker Bermuda

Knightsbridge Tankers Limited $334 45 Tanker Bermuda Overseas Shipholding Group $332 46 Tanker USA

Thoresen Thai $329 47 Multi-Sector Thailand

Golden Ocean Group $289 48 Bulker Bermuda

Genco Shipping & Trading Ltd. $245 49 Bulker Marshall Islands

Euronav $242 50 Tanker Belgium

Mercator Lines Singapore $228 51 Bulk Singapore

Tsakos Energy Navigation (TEN) $221 52 Tanker Bermuda

Teekay Tankers $218 53 Tanker Marshall Islands

Scorpio Tankers $188 54 Tanker Marshall Islands

Regional Container Lines PCL $177 55 Liner Thailand

First Ship Lease $141 56 Multi-Sector SingaporeIM Skaugen ASA $135 57 Multi-Sector Norway

Excel Maritime Carriers Ltd $129 58 Bulker Liberia

Jinhui Shipping&Transportation $126 59 Bulker Bermuda

Navios Maritime Acquisition Corp. $109 60 Tanker Marshall Islands

Baltic Trading Ltd $108 61 Bulk Marshall Islands

International Shipholding $107 62 Multi-Sector USA

Global Ship Lease, Inc. $99 63 Container Marshall Islands

Rickmers Maritime $98 64 Container Singapore

Goldenport Holdings $96 65 Multi-sector Marshall Islands

Concordia Maritime $90 66 Tanker Bermuda

Ultrapetrol Bahamas Limited $89 67 Multi-sector Bahamas

d'Amico International Shipping $86 68 Tanker Luxembourg

StealthGas Inc. $79 69 Gas Marshall Islands

Euroseas $73 70 Multi-Sector Marshall Islands

Star Bulk $72 71 Bulk Marshall Islands

Courage Marine Group $69 72 Bulk Bermuda

Eagle Bulk Shipping Inc. $59 73 Bulker Marshall Islands

Samudera Shipping Line Ltd $54 74 Multi-Sector Singapore

DHT Holdings, Inc. $48 75 Tanker Marshall Islands

D/S Torm $47 76 Multi-Sector Denmark

Paragon Shipping $39 77 Bulk Marshall Islands

Globus Maritime $33 78 Bulk Jersey

Eitzen Chemical $30 79 Tanker Norway

Hellenic Carriers $29 80 Bulk Jersey

Seanergy Maritime Holdings Corp. $16 81 Bulk Marshall Islands

Nordic Tankers $15 82 Tanker Denmark

NewLead Holdings Ltd $4 83 Multi-Sector Bermuda

Freeseas $3 84 Bulker Marshall Islands



Total Return toShareholders

Only One Way to Go!By Jim Lawrenceempting as it may be to

focus on the absolutely

dismal general Total Return to

Shareholders figures for 2011

and wonder just who bought

shares in shipping last year and,worse, pity those who held on,

a different and more construc-

tive approach might be to

remind ourselves that what goes

down in a cyclical industry

must eventually go up!

Not to be patronizing, but

shareholder returns do reflect,

to great extent, investor interest

or lack thereof for the sectorrather more than management

skill. And, we tip our hats to

those in the Investor Relations

side of the business.

Despite an industry wide

collapse and investor apathy, it is

therefore even more appropriate

to acknowledge the ten members

of the Marine Money Rankings

who achieved positive Returns toShareholders, well actually nine

as number ten, Stolt-Nielsen had

a zero return (see the table on the

pages that follow).

The LNG sector, conservative

leverage, recurring and stable

business contracts and diversifi-

cation away from pure shipping

assets marked the superior

returns of the Top Ten. Golar

LNG which returned 204% to

its shareholders should feel

remarkably proud of itsachievement. But then so

should each company and their

management and staff. It was

after all the third year of

horrendous shipping markets.

Kirby is a regular superior

performer and this years stellar

returns helped propel the

company to the top spot in the

Rankings. Algoma has had itsups and downs, though more

ups than downs! Seaspan has

been rewardingly and positively

consistent. In 2011, Exmar

returns to the positive as does

MISC, though both companies

are historic steady performers.

Alexander and Baldwin too is a

consistent value for share-

holders though it suffered a

difficult 2006. NewcomerCostamares total return

performance helped the

companys 2nd place finish in

the overall Rankings.

It is abundantly clear that while

asset cycles are an unavoidable

reality when investing in ship-

Mean Total Return to Shareholders

2006 19%

2007 52%

2008 -55%

2009 33%

2010 10%

2011 -34%

T ping, management and manage-ments strategies can have a

materially positive impact, and,

unless one is a day trader, a look

back over a decade of Marine

Money Rankings might make agood place to begin any invest-

ment investigation.

But Look at theBright Side

While 75 of our 84 public

companies delivered negative

Returns to Shareholders, with

an industry median of -34%, it

was only a few short years ago,

in 2007, that the industryaverage was +52%. As the chart

below indicates shippings

Mean Return to Shareholder

performance has been a roller

coaster. When good it has been

very good. Whether driven by

fear and sentiment as in 2008,

when freight remained surpris-

ingly strong following Lehmans

collapse, yet shares fell precipi-

tously or 2011 when fear, senti-

ment and the freight rate facts

pounded actual performance

one must watch market senti-

ment closely when it comes to

shareholder returns.

2006 and 2007:The TippingPointIt is recent history but it

deserves mention again that the

two years 2006 and 2007 saw a

whopping 34 IPOs which it can

be argued forever shifted the

return landscape. As a small

example of how things havechanged of 2006s top two Total

Return to Shareholder winners

one is in bankruptcy and the

other was taken private

following its own collapse. But

the net gain in listed companies

should give start to dreams of

even the smallest investor that

they too, when the market

turns, can be a magnate.


23/84



Total Return to Shareholders

2011 2006

Industry Mean -34.00% Industry Mean 19.32%

Industry Median -36.80% Industry Median 14.14%

Industry Std. Dev. 38.30% Industry Std Dev 31.44%Coefficient of Variation -1.13 Coefficient of Variation 1.63

Golar LNG Ltd. 203.70% Horizon Lines, Inc. 119.90%

Kirby Corporation 49.50% American Commercial Lines Inc. 116.06%

Seaspan Corporation 15.70% Orient Overseas International Limited 110.36%

Exmar NV 11.50% DFDS A/S 79.48%

Algoma Central Corporation 11.00% Precious Shipping 75.49%

MISC 5.30% Jinhui Shipping&Transportation 75.14%

Alexander & Baldwin 5.10% Genco Shipping & Trading Ltd. 74.57%

Costamare Inc 5.00% D/S Norden A/S 70.60%

Teekay Offshore Partners LP 3.00% PT Berlian Laju Tanker 69.37%

Stolt-Nielsen SA 0.00% James Fisher & Sons, plc 61.20%Finnlines Plc -3.40% DryShips Inc. 53.93%

Teekay LNG Partners L.P. -6.10% Pacific Basin Shipping Limited 47.92%

Precious Shipping -7.60% Ship Finance International Limited 47.03%

Danaos Corporation -10.40% Trico Marine Services, Inc. 46.78%

Nippon Yusen Kaisha -10.60% Algoma Central Corporation 44.42%

DFDS A/S -11.70% Seacor Holdings Inc. 42.75%

Seacor Holdings Inc. -12.00% Solstad Offshore ASA 40.43%

Kawasaki Kisen Kaisha, Ltd. -12.60% Exmar NV 38.89%

Mercator Lines Singapore -12.70% D/S Torm 38.06%

Navios Maritime Partners -15.30% Global Oceanic Carriers 36.46%

Teekay Corp. -15.40% Nordic American Tanker Shipping Ltd 34.68%

Rickmers Maritime -16.20% Double Hull Tankers 34.31%IM Skaugen ASA -19.20% Concordia Maritime 34.29%

International Shipholding -20.50% Belships ASA 33.33%

CMB -20.70% Diana Shipping Inc. 32.24%

U-Ming Marine Transport -21.50% Kirby Corporation 30.82%

AP Moller - Maersk Group -22.40% Tsakos Energy Navigation 29.22%

Grindrod Limited -23.80% Navios Maritime Holdings Inc. 28.18%

Safe Bulkers Inc. -25.60% STX Pan Ocean Co., Ltd. 25.60%

Mitsui OSK Lines -25.70% Excel Maritime Carriers Ltd 25.19%

Navios Maritime Acquisition Corp. -26.30% Grindrod Limited 25.08%

Capital Product Partners -27.00% CMB 24.43%

Navios Maritime Holdings Inc. -27.80% Seaspan Corporation 23.37%

Euroseas -29.00% Finnlines Plc 21.95%

D/S Norden A/S -29.60% Eagle Bulk Shipping Inc. 21.68%

Knightsbridge Tankers Limited -29.60% TBS International Limited 20.05%

Wilh. Wilhelmsen ASA -30.40% Teekay LNG Partners L.P. 19.75%

Odfjell ASA -31.50% Gulfmark Offshore, Inc. 19.37%

First Ship Lease -31.60% OMI Corporation 19.20%

Thoresen Thai -36.30% Mitsui OSK Lines 16.95%

Concordia Maritime -32.00% Bourbon Offshore 17.24%



2011 2006

China Shipping Development -36.70% Quintana Maritime Limited 16.75%

Orient Overseas International Limited -36.90% Teekay Shipping Corp. 14.20%

Pacific Basin Shipping Limited -37.20% Nippon Yusen Kaisha 14.09%Goldenport Holdings -37.70% Arlington Tankers Ltd. 12.59%

Diana Shipping Inc. -38.40% Star Reefers ASA 12.14%

Samudera Shipping Line Ltd -41.30% Overseas Shipholding Group 8.75%

Hellenic Carriers -42.00% General Maritime Corp 5.38%

Golden Ocean Group -45.40% Thoresen Thai 4.95%

China Shipping Container Lines -45.80% Yang Ming Marine Transport 4.93%

STX Pan Ocean Co., Ltd. -46.20% Knightsbridge Tankers Limited 4.21%

Tsakos Energy Navigation -46.20% Tidewater, Inc. 3.88%

Neptune Orient Lines -48.60% Courage Marine Group 3.75%

Baltic Trading Ltd -49.10% Frontline LTD 2.45%

COSCO Holdings -49.10% Regional Container Lines PCL 1.88%

Ship Finance International Limited -49.40% Hornbeck Offshore Services Inc 1.74%Nordic American Tanker Shipping Ltd -49.50% Farstad Shipping ASA 1.09%

StealthGas Inc. -51.40% K-SEA Transportation Partners LP -0.23%

Scorpio Tankers -51.60% Brostrom -0.32%

Yang Ming Marine Transport -52.70% Euronav -1.54%

Genco Shipping & Trading Ltd. -53.10% Top Tankers Inc. -2.75%

Ultrapetrol Bahamas Limited -53.70% Premuda SPA -2.91%

Courage Marine Group -54.10% Camillo Eitzen & Co ASA -3.11%

Jinhui Shipping&Transportation -54.10% Kawasaki Kisen Kaisha, Ltd. -3.91%

d'Amico International Shipping -54.70% Star Cruises Ltd -4.58%

Globus Maritime -56.40% Golar LNG Ltd. -4.76%

Regional Container Lines PCL -56.60% Odfjell ASA -5.14%

Star Bulk -59.20% BW Gas -5.20%Global Ship Lease, Inc. -63.40% Wilh. Wilhelmsen ASA -5.38%

DryShips Inc. -63.60% MISC -5.71%

Teekay Tankers -64.70% Royal Caribbean Cruises Ltd -6.63%

Overseas Shipholding Group -64.80% Trailer Bridge Inc -6.83%

Nordic Tankers -69.10% StealthGas Inc. -7.43%

Euronav -70.50% Stolt-Nielsen SA -7.49%

Excel Maritime Carriers Ltd -74.20% AP Moller - Maersk Group -7.91%

DHT Holdings, Inc. -77.00% U.S. Shipping Partners L.P. -8.67%

Paragon Shipping -79.90% Carnival Corporation -9.82%

Eagle Bulk Shipping Inc. -81.10% Neptune Orient Lines -13.46%

NewLead Holdings Ltd -81.20% Noble Group -13.62%

Frontline LTD -82.20% Sinotrans Ltd -14.49%

Seanergy Maritime Holdings Corp. -84.30% Alexander & Baldwin -16.07%

Freeseas -88.50% B+H Ocean Carriers -20.59%

D/S Torm -90.60% IM Skaugen ASA -22.13%

Eitzen Chemical -91.20% Aries Maritime Transport -22.73%

Samudera Shipping Line Ltd -23.28%

MC Shipping, Inc. -30.15%

Total Return to Shareholders continued



The Tip of the Iceberg?By George Weltman

s we input data into the

rankings model this year,we noticed a disturbing trend.

The number of companies

taking impairment charges had

grown as had the sizes of these

charges. Of the 84 companies

in our sample, 30, or 36%, had

taken impairment charges

totaling $3.1 billion (see

below). Ranging from AP

Moller Maersks high of $551

million to Golar LNGs $0.5million, the average impair-

ment charge was $104 million.

Clearly, given the size of our

sample and a lack of proclivity

by many to face the reality,

there is a suggestion that there

is more under the surface. The

number, in this instance, is

large but the sample is small.

And while there have been

similar charges over the pastthree years, it is only this year

that values caught up with the

reality of freight rates. Lastly,

there are also the accountants

who have been shaken rather

than stirred to ensure compli-

ance with the accounting rules.

Why should we care? One

might even say much ado

about nothing. There is nocash flow impact from this

charge, which simply flows

through the profit and loss

statement. The banks ignore

book value in their covenants

choosing to focus on market

values for the denominator in

the LTV calculation, although

some have wisely expanded

underwater. And there is a

frightening thought. For threeyears the banks have avoided

this issue but the day of reck-

oning is fast approaching unless

the market stages an earlier

than anticipated recovery. The

ramifications are horrendous

and extend far beyond ship-

ping. Time will tell. The

creativity of bankers and the

fortitude of the central bankers

will be tested.

ants, who, at least for these

purposes, insist on the historicbasis.

The real issue of impairments

lies in the repercussions. If the

owners acknowledge the

reduced valuation, what of the

bankers whose loans are secured

by these same assets. The

domino theory would suggest

that at some point the banks

have to recognize their loans are

their covenants to include

leverage as well as minimumequity. These would in fact be

triggered as equity is consumed

by losses, whether operational

or accounting.

In accounting theory, an

acquired asset is entered into

the balance sheet at its purchase

price and then is depreciated

over its economic life to a

residual. Gains or losses wouldbe recognized only upon a sale.

Impairments are different.

These are paper losses,

reflecting changes in market

value, which raise the question

of when is a loss a loss? This is

the unresolved question which

banks, among others, have

hung their hats on to avoid or

defer write-downs, declaring

paper losses irrelevant since theassets will be held to maturity.

With the impairment, the

recorded value of the asset is

reduced from its historic basis.

Depreciation expense is like-

wise reduced going forward

leading to overstated earnings

from an historical perspective.

Similarly, the tax shelter benefit

from depreciation expensedeclines, but in an industry

which pays no taxes this is

hardly relevant. Lastly, if you

are going to ignore the historic

basis of accounting, shouldnt

assets be written up as well as

down? This takes you into fair

value accounting a subject that

is an anathema to the account-

AP Moller-Maersk $551.1

Paragon Shipping $277.3

Newlead Holdings $203.7

Seanergy Maritime Holdings $201.9

D/S TORM $200.0

Teekay $187.7

MISC $182.0

Excel Maritime Carriers $146.7

DryShips $144.7

Mitsui OSK Lines $133.0

Frontline $121.4

Teekay Offshore Partners $91.1

Golden Ocean Group $86.6

Pacific Basin $80.0

Freeseas $70.0

Scorpio Tankers Inc. $66.6

Eitzen Chemical $62.5

Star Bulk Carriers $62.0

DHT Holdings Inc. $56.0

Tsakos Energy Navigation $39.4

Hellenic Carriers $29.3

Jinhui Shipping $25.4

Dockwise $24.8

First Ship Lease $18.3

Global Ship Lease $13.6

Teekay Tankers Ltd $13.3

Nordic Tankers $13.2

StealthGas $9.9

Stolt-Nielsen $8.5

Golar LNG $0.5

$3,120.6

Impairment Charges - 2011

A


27/84



The Class of 2011By Jim Lawrence

he Class this year is inter-esting, and frankly given

the challenges 2011 posed for

shipping and the public

markets, whether New York or

Oslo, that a Class exists at all is

a testament to its principals,

bankers and investors who

could see the opportunity.

Perhaps, the LNG story was not

so difficult to sell. But the Box

for owners and investmentopportunity for retail and insti-

tutional buyers. Despite the

fact that in 2009, there was not

a single IPO, there was plenty of

follow on activity that year.

While it is tempting to gener-

alize and say the industrys expe-

rience with the public markets

and vice a versa has been all

good, the fact is some have

Ships and Diana Container-

ships stories were fine examples

of public vehicles, able to

execute despite the markets

general sentiment.

The arrival of shipping six years

ago in a big way to the public

markets seemed to promise a

future book of business for

investment banks, optionality

Company 2007 Rank 2008 Rank 2009 Rank 2010 Rank 2011 Rank

IPOs: 2006

Aegean Marine Petroleum Network Inc 21 32 11 58 -

Chemoil Energy Limited 60 65 25 60 -

Danaos Corporation 41 56 69 70 21

Eitzen Chemical ASA 97 95 100 77 80

Goldenport Holdings Inc. 13 42 80 - 57

Omega Navigation 80 63 - - -Pacific Shipping Trust 82 68 22 18 -

Teekay Offshore Partners LP 51 55 7 11 22

Ultrapetrol Bahamas Limited 55 76 75 53 58

IPOs: 2007

Capital Product Partners - 34 13 17 26

D'Amico International Shipping - 15 87 78 67

Dockwise - 91 28 - -

First Ship Lease Trust - 71 56 74 50

Gulf Navigation - 74 89 - -

Globus Maritime - 52 81 42 53

Hellenic Carriers - 44 16 21 68

Mercator Lines - 53 29 18 16Navios Maritime Partners - 13 2 3 3

Nordic Tankers - 88 97 88 73

OceanFreight - - 98 75 -

OSG Americas - 92 - - -

Paragon Shipping - 49 32 67 78

Rickmers Maritime - 75 58 81 25

Sinotrans Shipping - 62 44 - -

Star Bulk - 43 95 68 77

Teekay Tankers - 5 65 28 63

Recent IPOs

performed admirably whileothers have been horrendous.

The past two years have

brought 10 quality offerings to

the market. While we do not

integrate the Class of 2011 into

the full Ranking list, the Class

of 2010 has performed well

Costamare most notably was

one of just nine companies in

T



Company 2007 Rank 2008 Rank 2009 Rank 2010 Rank 2011 Rank

IPOs: 2008

Brittania Bulk*

Safe Bulkers - - 1 2 4

IPOs: 2009

None

IPOs: 2010

Baltic Trading 64

Costamare 2

Crude Carriers -

Navios Maritime Acquisition 44

Scorpio Tankers 54

IPOs: 2011

Box Ships -

Diana Containerships -

Golar LNG Partners -

Hoegh LNG Holdings -SinOceanic Shipping -

*Filed for bankruptcy

our Rankings universe which

delivered a positive Total

Return to Shareholders last

year. Navios Maritime Acquisi-

tion Corp and Scorpio have

been active. Crude brought

public in 2010 and taken over

in 2010, probably holds the

title for being an independent

public company for the shortest

period of time.

The Class of 2011, is made up

of public company veterans.

Golar LNG Partners, Box,

Diana Containerships have astheir principals some of the

strongest and most experienced

public company management

professionals in the business as

each of these new vehicles

expands managements public

portfolio. SinOceanic is a small

The current market environ-

ment has meant the past two

years of offerings have faced

challenges. We acknowledge

their achievements and look

forward to benchmarking their

future development.

To be filed under woulda,

coulda, shoulda, we can disclose

that 2011 freshman, Golar LNG

Partners, in its truncated year

would have outperformed the

entire rankings universe and

finished in 1st place. It was a very

good year. Unfortunatelyfreshmen dont qualify. Lets see

what happens next year, when

the company makes its first

formal appearance.

Welcome Class of 2011.

Partners LP and Hoegh LNG

Holdings, both produced

strong positive returns for their

shareholders (23% and 24%

respectively).

Bermuda with two and the

Marshall Islands with two

grabbed top domicile spots

with Bermuda breaking the

Marshall Islands monopoly on

recent public issuances.

The momentum years of 2007

and 2006, brought many

companies to the market, butwith the shipping cycle clearly

spiking the sale was compara-

tively simple. 2008s Class of

two gave us one perennial

winner, Safe Bulkers, and one,

Brittania Bulk, bankrupt before

the end of its first year.

Oslo extension of an existing

Chinese public company.

Perhaps most intriguing is

Hoegh LNG Holdings, which

marks a return to the public

markets by the venerable

Hoegh family, who were orig-

inal shipping and public

markets pioneers in the late 80s

with Leif Hoegh & Co ASA in

Oslo and the early 90s with

Bona Shipholding. While the

former was privatized in 2003

and the latter sold in the late

90s, the family knows its wayaround the public markets and

the LNG space in particular.

While not included in the

larger Rankings universe this

year, it is a singular achievement

that two of the five, Golar LNG

Recent IPOs continued



Class of 2011 Overall Performance Rankings

Class of 2011 Global Maritime Industry by Equity Market Capitalization

Class of 2011 Financial Results

Class of 2011 Financial Strength Rankings



Rank Rank

Golar LNG Partners LP 2 2 1 1 1 1 1

Box Ships Inc. 3 1 2 2 2 4 2

Diana Containerships Inc. 4 3 3 3 3 3 3

Hoegh LNG Holdings Ltd. 1 4 4 5 4 2 4

SinOceanic Shipping ASA 5 5 5 4 5 5 5



Shareholders Ratio

Industry Mean (21.8%) 0.16 46.5% 9.5% 4.9% 9.73 15.40 3.60 50.7% 4.08Industry Median (19.8%) 0.17 40.7% 2.5% 3.2% 0.61 12.82 0.73 47.5% 5.30

Industry Std. Dev. 46.1% 0.04 26.2% 32.2% 5.2% 19.41 8.81 5.91 37.8% 3.86

Coefficient of Variation (2.12) 0.23 0.56 3.39 1.06 2.00 0.57 1.64 0.75 0.95

Box Ships Inc. (19.8%) 0.19 65.5% 6.5% 8.7% 0.34 12.61 0.73 32.5% 5.30

Diana Containerships Inc. (63.2%) 0.17 40.7% 2.5% 3.2% 0.61 7.63 14.06 0.0% 8.50

Golar LNG Partners LP 23.4% 0.18 81.1% 64.6% 11.7% 44.38 12.82 0.60 97.3% 6.51

Hoegh LNG Holdings Ltd. 24.1% 0.15 24.8% (17.1%) 0.9% 3.07 30.61 2.45 76.2% 0.26

SinOceanic Shipping ASA (73.3%) 0.10 20.4% (9.0%) (0.3%) 0.23 13.30 0.16 47.5% (0.19)


Rank Rank Rank Rank

Diana Containerships Inc. 1 1 1 1

Box Ships Inc. 3 2 3 2

Hoegh LNG Holdings Ltd. 2 4 4 3

Golar LNG Partners LP 4 5 2 4

SinOceanic Shipping ASA 5 3 5 5


Golar LNG Partners LP $1,198 1 Tanker Bermuda

Hoegh LNG Holdings Ltd. $409 2 Tanker Bermuda

Box Ships Inc. $137 3 Container Marshall Islands

Diana Containerships Inc. $125 4 Container Marshall Islands

SinOceanic Shipping ASA $7 5 Container Norway


31/84



The RankingsMethodology

e keep our methodology asconsistent as possible from

year to year so that it is possible

to create a time series of data, or

to just compare one years

winner to another. Even with

this in mind, though, it is

important to update the

methodologies and improve

them over time. We constantly

examine our financial ratios in

order to better measure compa-nies performance. The measures

developed for the 2004 Rank-

ings remain unchanged and are

likely to remain so, giving us

now six years of completely

consistent comparison.

As a review, we define financial

performance as companies

ability to improve operating

efficiency and to create share-holder value. Based on this

understanding, we distinguish

between performance ratios and

financial strength ratios. The

performance ratios focus on

evaluating the operating effi-

ciency and the ability to create

value; while the financial

strength ratios emphasize

companies financial safety and

health. While we do not believethat financial strength neces-

sarily has direct impact on or is

a direct indicator of companies

performance levels, it provides a

good benchmark from a cred-

itors standpoint and ensures

the sustainability of company

operations, and we therefore

believe it is a metric very worth

calculating and considering,but also one that should be

separated from overall financial

performance.

For our rankings methodology,

we have chosen six perform-

ance ratios, namely Total

Return to Shareholders (TRS),

ROE, ROA, Profit Margin,

Price to Book and Asset

Turnover. To evaluate financial

each companys performancefor each indicator and then

compute average rank scores

based on the unweighted

average of those indicator

ranks. The overall rank is deter-

mined according to the average

rank scores, with smaller being

better, a rank of one, of course,

being the best.

Equations for the financial

strength, we look at CurrentRatio, Debt to Capitalization,

and Interest Coverage Ratio.

From a valuation point of view,

we leave the EV/EBITDA ratio

as a straightforward, standalone

benchmark.

This year again, we have ranked

and present performance and

financial strength separately. In

each of these divisions, we rank

PERFORMANCE

Change in share price + DividendTotal Return to Shareholders =

Share price at beginning of period

SalesAsset Turnover =

Total assets

EBITDAProfit Margin =

Sales

Net incomeROE = Average shareholders' equity

EBITROA =

Average total assets

Market value of equityP/B =

Book value of equity

FINANCIAL STRENGTH

Current assetsCurrent ratio =

Current liabilities

Total debtDebt to capitalization =

Debt + Equity

EBITInterest (Debt) coverage ratio =

Interest payments

VALUATION

Enterprise valueEV/EBITDA =

EBITDA

W


33/84



leverage, profit margin and

asset turnover.

Return on Assets

In our 2004 Rankings, we

changed our definition of the

return part of ROA from net

income to EBIT. That decisionstands today. The rationale

behind this adjustment was that

EBIT provides a more consis-

tent comparison between the

returns and the asset inputs. For

ROA, we want to evaluate how

efficient the firm is based on its

ability to create value using

total assets, consisting approxi-

mately of debt and equity. If we

calculate ROA using netincome, we would neglect the

difference brought about by

different levels of leverage.

When two firms show the same

level of net income over assets, a

highly levered firm creates more

EBIT with the same total assets

than a low-levered firm. In

other words, to compare apples

to apples, we use EBIT over

average total assets in calcu-lating ROA.

Although subject to much

debate, we have chosen to treat

the impact of asset sales as a

below the line item ensuring

comparable comparisons based

upon earnings from operations

rather than distortions created

by more active asset traders.

This treatment is consistentwith an on-going concern

rather than that of a trader.

Profit Margin

Regarding profit margin, we

use EBITDA over sales instead

of net income over sales,

because we believe EBITDA is

a less manipulated metric that

not consider TRS a sufficient

metric to measure public

company performance. This

year we have fine-tuned the

calculation by using the local

currency for share prices and

dividends, thereby eliminating

dollar exchange rate aberra-tions.

Price to Book Ratio

Price to book ratio naturally

makes up the deficiency of TRS

by measuring an absolute level

of performance. We believe the

P/B ratio demonstrates how

efficiently companies utilize

invested equity capital to create

value. A higher P/B ratio in thesame industry reflects a market

view of better future perform-

ance with the same amount of

equity invested, because better

performance will lead to greater

discounted cash flows and

better current valuation. Note

that the P/B ratio is often used

as a valuation multiple, and a

P/B value below the industry

average may mean the companyis undervalued. In our ranking

method, higher P/B ratios lead

to a better performance ranking

but of course it is very impor-

tant to remember that it all

depends at what value ships are

put in the book.

Return on Equity

ROE is an all-time favorite to

provide a shortcut performanceevaluation metric for equity

investors. Return on equity tells

us the percent returned for each

dollar (or other monetary unit)

invested by shareholders. It not

only directly measures the earn-

ings returned to equity holders,

but also factors in multiple

performance metrics like

ratios we use for Marine Money

Rankings are listed in Figure 1,

and in the following paragraphs

we provide detailed descrip-

tions of each metric, as well as

justifications for inclusion.

PerformanceRatiosTotal Returns to

Shareholders (TRS):

There are some who would

argue that TRS is all that

matters for public companies.

TRS measures investors total

returns, amounting to gains

from stock appreciation and

dividend income, during the

holding period. In MarineMoneys ranking system, we

measure TRS for the period of

the complete fiscal year. Not all

companies, however, report on

a calendar year, but are

included with the appropriate

fiscal year end. TRS essentially

measures how companies

actual performance beat market

expectations, based on the

belief that capital markets haveefficiently factored in compa-

nies future performance and

created value at the associated

risk levels. In our rankings, the

higher the TRS, the better the

rank.

On the other hand, TRS

demonstrates a high perform-

ance level relative to market

expectations rather than anabsolute high performance

level. For example, a fair

performance in a laggard

company will result in a good

jump of stock price. But in such

a scenario, this would not mean

the company is performing well

according to an absolute stan-

dard the reason that we do

better reflects a companys

performance outcomes. Net

income is easier to manipulate

or distort by using different

accounting and taxation poli-

marine money mag

Documents