Third Quarter 2006 Earnings Results




HIGHLIGHTS

 -- TCE revenues increased 31% to $255 million, compared with the same
    quarter last year
 -- Diluted EPS of $2.29 per share reflects strong rates in both Crude
    Transportation and Product Carrier segments and an increase in legal
    reserves of $27.0 million, or $0.68 per diluted share
 -- Gains on vessel sales and sale of securities added $15.8 million, or
    $0.39 per diluted share
 -- Hart-Scott-Rodino approval received on pending Maritrans acquisition
 -- Three Product Carrier charter-in commitments announced

NEW YORK, Nov. 2, 2006 (PRIMEZONE) -- Overseas Shipholding Group, Inc. (NYSE:OSG), a market leader in providing energy transportation services, today reported results for the third quarter of 2006.

For the quarter ended September 30, 2006, Time Charter Equivalent(1) revenues increased by 31% to $254.8 million from $194.8 million in the third quarter of 2005. TCE revenue performance was the result of strong rates across the Company's VLCC, Aframax, Panamax and Handysize Product Carrier fleets. EBITDA(1) for the third quarter was $135.6 million compared with $135.4 million in the third quarter of 2005. Net income for the quarter ended September 30, 2006 was $90.8 million, or $2.29 per diluted share, compared with $72.1 million, or $1.82 per diluted share, for the third quarter of 2005. The current quarter benefited from gains on vessel sales and sale of securities of $15.8 million or $0.39 per diluted share, compared with $22.4 million, or $0.46 per diluted share, in the same period a year ago. In addition, the current quarter reflects the impact of a $27.0 million, or $0.68 per diluted share, increase in the reserve related to the U.S. Department of Justice investigation as more fully described later in this press release.

For the first nine months ended September 30, 2006, the Company reported a 9% increase in TCE revenues to $751.2 million from $690.5 million in the comparable period of 2005. EBITDA for the first nine months of 2006 decreased to $424.8 million from $535.1 million in the first nine months of 2005 and included the above mentioned increase in the reserve. Net income for the nine month period ended September 30, 2006 was $279.4 million, or $7.06 per diluted share, compared with $351.1 million or $8.89 per diluted share in the comparable 2005 period. The first nine months of 2006 benefited from gains on vessel sales and sale of securities of $21.1 million, or $0.44 per diluted share, compared with $60.7 million, or $1.31 per diluted share, in the comparable period of 2005. In addition, the first nine months of 2006 reflects the impact of a $27.0 million, or $0.68 per diluted share, increase in the reserve related to the U.S. Department of Justice investigation, compared with $4.0 million, or $0.10 per diluted share, in the comparable period of 2005.

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

Morten Arntzen, President and Chief Executive Officer, stated, "Third quarter TCE revenues were largely the result of a strong spot rate environment in both the crude and product transportation sectors and additions to our product carrier fleet. The increase in operating income before gains and special charges reflects the benefits from OSG's diverse fleet and chartering strategy." Arntzen continued, "Our objective to achieve a market leadership position in the U.S. Flag sector will be realized upon the completion of the Maritrans acquisition. This is another example of our ongoing efforts to transform OSG which began nearly three years ago. Our shareholders will continue to benefit from OSG's leadership position, fleet diversification and spot/time-charter mix that will ensure competitive returns not only in a strong rate environment but throughout all market cycles."

TCE revenues in the third quarter of 2006 for the International Crude Tanker segment were $175.9 million, an increase of 42% quarter-over-quarter, principally due to increases in the daily TCE rates earned on all classes of the segment's vessels. The higher daily rates were partially offset by a decrease in revenue days for VLCCs as a result of increased drydocking and repair days and the sale of three older Aframax tankers. TCE revenues for the International Product Carriers segment increased 25% to $55.0 million from $44.2 million in the year earlier period, principally as a result of an increase in the average TCE rates earned by the Handysize and Panamax Product Carriers, partially offset by an increase in drydocking and repair days. U.S. segment TCE revenues decreased 7% quarter-over-quarter to $19.0 million from $20.4 million in the same period a year ago, principally due to the sale of two crude oil tankers in the fourth quarter of 2005.

Income from vessel operations was $88.9 million in the third quarter of 2006, compared with $82.9 million in the same period a year earlier. For the quarter ended September 30, 2006, total ship operating expenses increased $56.6 million to $176.9 million from $120.3 million in the corresponding quarter in 2005, of which $27.0 million relates to the reserve taken for the U.S. Department of Justice investigation. As a result of the Company expanding its fleet in a capital-efficient manner through sale and leaseback arrangements and time and bareboat charters-in, time and bareboat charter hire expenses increased quarter-over-quarter. Vessel expenses increased quarter-over-quarter principally due to higher crew costs. General and administrative expenses increased principally due to an increase in compensation associated with additional personnel and the change in recognition of targeted cash incentive compensation from an annual to a quarterly basis, expenses incurred in connection with the U.S. Department of Justice investigation and increases in legal, accounting and consulting services.



 RECENT ACTIVITIES AND QUARTERLY HIGHLIGHTS

 -- On September 25, 2006, OSG announced a definitive merger agreement
    with Maritrans Inc. (NYSE:TUG), a leading U.S. Flag crude oil and
    petroleum product shipping company that owns and operates one of the
    largest fleets of double hull vessels serving the East Coast and U.S.
    Gulf Coast trades.  Under the terms of the merger agreement, OSG will
    acquire Maritrans in an all-cash transaction for $37.50 per share.
    On October 16, 2006, the transaction was granted early termination of
    the Hart-Scott-Rodino waiting period.  Consummation of the transaction
    remains subject to other customary conditions, including approval of
    Maritrans' stockholders at a meeting to be held November 28, 2006.

 -- The Company entered into a number of transactions during the quarter
    in furtherance of its strategy to balance the mix of owned and
    chartered-in tonnage and to capitalize on the strong market for
    second-hand tonnage. Fleet acquisition and disposition activity
    during the period resulted in proceeds of vessel sales of $169 million
    resulting in gains taken during the period of $14.3 million.

    -- The Pacific Sapphire, a 1994-built Aframax, was sold on
       July 13, 2006 and the Overseas Keymar, a 1993-built Aframax tanker,
       was sold on August 25, 2006.

    -- On September 6, 2006, the Overseas Crown, a 1996-built VLCC, was
       sold and chartered back.  The gain from the sale was deferred and
       is being recognized over the term of the charter.

    -- The Overseas Hercules and the Overseas Orion, two 2006-built 51,000
       dwt Handysize Product Carriers time chartered-in from Parakou
       Shipping, were delivered on August 16, 2006 and September 14, 2006,
       respectively.  Both vessels immediately commenced time
       charters-out through August 2008 and September 2009, respectively.

    -- On August 16, 2006, the Company agreed to bareboat charter-in three
       50,000 dwt Handysize Product Carriers from Capital Maritime and
       Trading, Inc. for 10 years.  The Overseas Serifos, the Overseas
       Sifnos and the Overseas Kimolos will be constructed at the STX
       Shipyard in Chinhae, South Korea.  The vessels are slated for
       delivery in 2008.

    -- The sale of the Majestic Unity, previously announced on
       June 28, 2006, is expected to close in late November or early
       December 2006, at which time the Company will recognize a gain of
       approximately $28.0 million.

    -- The October 17, 2006 announcement of two Jones Act Product Carriers
       chartered out to Tesoro, brings the total number of OSG's 10-ship
       fleet being built at the Aker Philadelphia Shipyard that have been
       chartered by major oil and refinery companies, to eight.

 -- Future revenues associated with time and bareboat charters as of
    September 30, excluding the Gas segment, totaled $899.8 million up
    from $746.1 million as of December 31, 2005. This amount represented
    30,497 revenue days.

 -- OSG has purchased no shares as of today's earnings release date under
    the $300 million share repurchase program authorized by the Company's
    Board of Directors in June 2006.

 -- On September 12, 2006, the Board declared a $0.25 per share dividend
    to shareholders of record on November 7, 2006, payable on
    November 28, 2006.

 FLEET METRICS AND STATISTICS

 -- As of September 30, 2006, OSG had an operating fleet of 91
    International Flag and U.S. Flag vessels. Fifty-two percent, or 47
    vessels, were owned, compared with 64%, or 59 vessels, as of
    September 30, 2005.

 -- Revenue days in the quarter totaled 7,329, a decrease of 8% over the
    same period a year earlier, principally due to the sale of older
    tankers and an increase in drydock and repair days.

                            Three Months Ended     Nine Months Ended 
                                  Sept.30,              Sept. 30,
                      ------------------------------------------------
 Revenue Days                 2006        2005        2006       2005
 ---------------------------------------------------------------------
 Crude Tankers               3,849       4,225       11,869     12,249
 Product Carriers            2,671       2,721        7,896      7,640
 U.S.                          625         824        1,759      2,587
 Other                         184         188          546        549
                      ------------------------------------------------
    Total                    7,329       7,958       22,070     23,025


 -- OSG's newbuild program of chartered-in and owned vessels totals 27
    and spans all lines of business and includes four International Flag
    Aframax tankers; nine International Flag Product Carriers; 10 Jones
    Act Product Carriers (collectively representing 1.4 million deadweight
    tons), and four LNG carriers (representing 864,800 cubic meters).
    Updates on most vessels under construction can be found in the
    Fleet section of www.osg.com.

FINANCIAL PROFILE

During 2006, shareholders' equity increased by $242.1 million to $2.1 billion and liquidity, including undrawn bank facilities, increased to more than $2.27 billion. Total long-term debt as of September 30, 2006 was $799.4 million compared with $965.7 million at December 31, 2005. Liquidity adjusted debt to capital was 9.7% as of September 30, 2006, an improvement from 24.5% as of December 31, 2005.

UPDATE ON THE U.S. DEPARTMENT OF JUSTICE INVESTIGATION

In 2004 and the first quarter of 2005, the Company made provisions totaling $10 million for anticipated fines and contributions to environmental protection programs associated with a possible settlement of the U.S. Department of Justice investigation. In the third quarter of 2006, the Company, based on discussions with the U.S. Department of Justice that resumed in August 2006, made an additional $27 million provision for such items. The Company continues to cooperate with the government with the goal of reaching a comprehensive settlement of the investigation. Negotiations with the U.S. Department of Justice are continuing but there can be no assurance that a satisfactory settlement can be achieved. While management believes that the total fines and contributions associated with a possible settlement of the investigation will approximate the total provision of $37 million, no assurance can be given that the provision will be sufficient to cover such items.

AVERAGE TCE RATES ACHIEVED

The following table shows time charter equivalent revenues per day and revenue days (defined as ship operating days less lay-up, repair and drydock days) for the Company's International Flag fleet for the three and nine months ended September 30, 2006 compared with the same periods of 2005.



                                Three Months Ended  Nine Months Ended 
                                    Sept. 30,            Sept. 30,
                                --------------------------------------
                                  2006      2005      2006      2005
 ---------------------------------------------------------------------
 Trade - Crude Oil
 ---------------------------------------------------------------------
 VLCC
  Average TCE Rate(a,b)         $68,433   $34,676   $65,295   $54,285
  Number of Revenue Days          1,519     1,714     4,785     4,720
 Aframax
  Average TCE Rate(a)           $33,560   $24,973   $32,651   $30,812
  Number of Revenue Days          1,350     1,508     4,191     4,592
 Panamax
  Average TCE Rate(a)           $26,939   $24,090   $27,210   $25,157
  Number of Revenue Days            980     1,003     2,893     2,769
 ---------------------------------------------------------------------
 Trade - Refined Petroleum Products
 ---------------------------------------------------------------------
 Panamax
  Average TCE Rate(a)           $18,308   $16,335   $21,194   $28,600
  Number of Revenue Days            184       184       543       594
 Handysize
  Average TCE Rate(a,b)         $21,167   $17,194   $20,683   $17,564
  Number of Revenue Days          2,487     2,537     7,353     7,046

 (a) Includes vessels operating on voyage charters and period 
     charters.

 (b) Includes the effect of forward freight agreements, which are 
     used to create synthetic time charters.

SPOT AND TIME CHARTER TCE RATES ACHIEVED

The following table provides a breakdown of TCE rates achieved for the third quarters of 2006 and 2005 between spot and time charter rates. The information is based, in part, on information provided by the pools or commercial joint ventures in which the vessels participate.



                               Three Months Ended   Three Months Ended
                                  Sept. 30, 2006      Sept. 30, 2005
                               ---------------------------------------
                                 Spot      Time      Spot      Time 
                                Charter   Charter   Charter   Charter
 ---------------------------------------------------------------------
 Trade - Crude Oil
 ---------------------------------------------------------------------
 VLCC
  Average TCE Rate              $68,433        --   $34,676        --
  Number of Revenue Days          1,519        --     1,714        --
 Aframax
  Average TCE Rate              $34,743   $29,925   $26,371   $21,760
  Number of Revenue Days          1,018       332     1,051       457
 Panamax
  Average TCE Rate              $29,263   $25,093   $27,801   $21,033
  Number of Revenue Days            434       546       453       550
 ---------------------------------------------------------------------
 Trade - Refined Petroleum Products
 ---------------------------------------------------------------------
 Panamax
  Average TCE Rate                   --   $18,308        --   $16,335
  Number of Revenue Days             --       184        --       184
 Handysize
  Average TCE Rate              $27,173   $18,763   $23,901   $16,318
  Number of Revenue Days            711     1,776       293     2,244

2006 TCE RATES

The Company has achieved the following average estimated TCE rates for the percentage of days booked for vessels operating through October 20, 2006. 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.



                               Fourth Quarter Revenue Days
                          --------------------------------------
                                 Fixed     Open  
 Vessel Class and    Average     as of     as of               % Days
  Charter Type      TCE Rates   10/20/06  10/20/06   Total     Booked
 ---------------------------------------------------------------------
 Trade - Crude Oil
 ---------------------------------------------------------------------
 VLCC - Spot         $68,000       879       676     1,555        57%
 Aframax - Spot      $32,500       291       727     1,018        29%
 Aframax - Time      $30,500       297        --       297       100%
 Panamax - Spot      $29,500       171       252       423        40%
 Panamax - Time      $25,000       533        --       533       100%
 ---------------------------------------------------------------------
 Trade - Refined Petroleum Products
 ---------------------------------------------------------------------
 Panamax - Time      $19,000       184        --       184       100%
 Handysize - Spot    $22,000       317       456       773        41%
 Handysize - Time    $18,000     1,848        --     1,848       100%

The following table shows average estimated time charter TCE rates and associated days booked as of October 20, 2006 for 2007.



                                      Fixed Rates and Revenue Days
                                            as of 10/20/06
                                  ------------------------------------
                                   Q107      Q207      Q307      Q407
 ---------------------------------------------------------------------
 Trade - Crude Oil
 ---------------------------------------------------------------------
 VLCC
  Average TCE Rate                   --        --        --        --
  Number of Revenue Days             --        --        --        --
 Aframax
  Average TCE Rate              $29,000   $29,000   $29,000   $28,500
  Number of Revenue Days            266       234       233       188
 Panamax
  Average TCE Rate              $25,500   $25,500   $29,500   $29,500
  Number of Revenue Days            540       389       184       135
 ---------------------------------------------------------------------
 Trade - Refined Petroleum Products
 ---------------------------------------------------------------------
 Panamax
  Average TCE Rate              $19,000   $19,000   $19,000   $19,000
  Number of Revenue Days            180       182       184       184
 Handysize
  Average TCE Rate              $18,000   $18,000   $18,000   $17,500
  Number of Revenue Days          1,810     1,638     1,633     1,413


 SUMMARY CONSOLIDATED STATEMENTS OF OPERATIONS

                          Three Months Ended       Nine Months Ended
                        ----------------------  ----------------------
 ($ in thousands,
  except per share
  amounts)               Sept. 30,   Sept. 30,   Sept. 30,   Sept. 30,
                           2006        2005        2006         2005
                        ----------  ----------  ----------  ----------
 Shipping Revenues:

 Pool revenues            $165,849    $104,879    $491,956    $420,938
 Time and bareboat
  charter revenues          70,353      80,203     209,453     235,248
 Voyage charter
  revenues                  29,662      18,121      86,234      60,808
                        ----------  ----------  ----------  ----------
                           265,864     203,203     787,643     716,994
                        ----------  ----------  ----------  ----------
 Operating Expenses:

 Voyage expenses            11,056       8,443      36,422      26,449
 Vessel expenses            52,255      42,866     155,046     126,938
 Provision for
  settlement                27,000          --      27,000       4,000
 Time and bareboat
  charter hire
  expenses                  46,022      26,403     127,249      78,226
 Depreciation and
  amortization              33,981      39,995     104,195     116,444
 General and
  administrative            20,871      13,495      67,952      45,032
 Gain on disposal
  of vessels               (14,270)    (10,869)    (10,651)    (36,945)
                        ----------  ----------  ----------  ----------
 Total Operating
  Expenses                 176,915     120,333     507,213     360,144
                        ----------  ----------  ----------  ----------
 Income from Vessel
  Operations                88,949      82,870     280,430     356,850
 Equity in Income
  of Affiliated
  Companies                  5,585       1,851      16,913      32,188
                        ----------  ----------  ----------  ----------
 Operating Income           94,534      84,721     297,343     389,038
 Other Income                7,048      10,683      23,234      29,577
                        ----------  ----------  ----------  ----------
                           101,582      95,404     320,577     418,615
 Interest Expense           14,552      22,639      52,293      71,039
                        ----------  ----------  ----------  ----------
 Income before
  Federal Income
  Taxes                     87,030      72,765     268,284     347,576
 Provision/(Credit)
  for Federal
  Income Taxes              (3,800)        700     (11,141)     (3,569)
                        ----------  ----------  ----------  ----------
 Net Income                $90,830     $72,065    $279,425    $351,145
                        ==========  ==========  ==========  ==========
 Weighted Average
  Number of Common
  Shares Outstanding:

  Basic                 39,538,118  39,445,347  39,530,097  39,442,633
  Diluted               39,630,655  39,513,752  39,596,964  39,508,564
 Per Share
  Amounts:

  Basic net income           $2.30       $1.83       $7.07       $8.90
  Diluted net
   income                    $2.29       $1.82       $7.06       $8.89
  Cash dividends
   declared                  $0.25          --      $0.925      $0.525


 2005 has been reclassified to conform with the 2006 presentation.

TCE REVENUE BY SEGMENT

The following table reflects TCE revenues generated by the Company's three reportable segments for the three and nine months ended September 30, 2006 and 2005, respectively, and excludes the Company's proportionate share of TCE revenues of joint ventures. See Appendix 1 for reconciliations of Time Charter Equivalent Revenues to Shipping Revenues.



                               Three Months Ended September 30,         
                         ---------------------------------------------
 ($ in thousands)          2006       % of          2005      % of      
                                      Total                   Total    
 ---------------------------------------------------------------------
 International Flag

   Crude Tankers          $175,878        69.0     $124,074     63.7    
   Product Carriers         55,048        21.6       44,181     22.7    
   Other                     4,893         1.9        6,120      3.1    
   U.S.                     18,989         7.5       20,385     10.5    
                          --------------------------------------------
 Total TCE Revenues       $254,808       100.0     $194,760    100.0    




                                Nine Months Ended September 30,
                         ---------------------------------------------  
 ($ in thousands)          2006       % of        2005         % of
                                      Total                    Total
 ---------------------------------------------------------------------  
International Flag

   Crude Tankers          $528,726        70.4     $472,885     68.5
   Product Carriers        160,938        21.4      136,856     19.8
   Other                    14,495         1.9       19,249      2.8
   U.S.                     47,062         6.3       61,555      8.9
                          -------------------------------------------- 

 Total TCE Revenues       $751,221       100.0     $690,545    100.0

INCOME FROM VESSEL OPERATIONS BY SEGMENT

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



                            Three Months Ended September 30,            
                          --------------------------------------------  
                            
 ($ in thousands)           2006       % of         2005       % of     
                                       Total                   Total    
 ---------------------------------------------------------------------  

 International Flag

    Crude Tankers         $102,091       106.8     $58,226        68.1  
    Product Carriers        15,896        16.6      16,850        19.7  
    Other(a)               (26,111)      (27.3)      2,334         2.7  
    U.S.                     3,674         3.9       8,086         9.5  
                          --------------------------------------------  
 
 Total Income from 
  Vessel Operations        $95,550       100.0     $85,496       100.0  
                          ============================================ 
                        
 (a) Reflects reserves related to a Department of Justice
     investigation and the settlement of certain crew benefits.





                                 Nine Months Ended September 30,
                           -------------------------------------------
 ($ in thousands)           2006       % of        2005       % of
                                       Total                  Total
 ---------------------------------------------------------------------

 International Flag

    Crude Tankers         $306,348        90.7    $281,666        77.2
    Product Carriers        49,998        14.8      57,734        15.8
    Other(a)               (25,353)       (7.5)      2,630         0.7
    U.S.                     6,738         2.0      22,907         6.3
                          --------------------------------------------
 
 Total Income from 
  Vessel Operations       $337,731       100.0    $364,937       100.0
                          
                        
 (a) Reflects reserves related to a Department of Justice
     investigation and the settlement of certain crew benefits.

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



                           Three Months Ended      Nine Months Ended 
                                Sept. 30,              Sept. 30,
                          --------------------------------------------
 ($ in thousands)           2006        2005        2006        2005
 ---------------------------------------------------------------------
 Total income from 
  vessel operations 
  of all segments          $95,550     $85,496    $337,731    $364,937
 General and 
  administrative 
  expenses                 (20,871)    (13,495)    (67,952)    (45,032)
 Gain on disposal 
  of vessels                14,270      10,869      10,651      36,945
                          -------------------------------------------- 
 Consolidated
  income from 
  vessel operations         88,949      82,870     280,430     356,850
 Equity in income 
  of affiliated 
  companies                  5,585       1,851      16,913      32,188
 Other income                7,048      10,683      23,234      29,577
 Interest expense          (14,552)    (22,639)    (52,293)    (71,039)
                      
                          -------------------------------------------- 
Income before 
 federal income 
 taxes                     $87,030     $72,765    $268,284    $347,576
                          ============================================


 CONSOLIDATED BALANCE SHEETS

                                               Sept. 30,   December 31,
 ($ in thousands)                                 2006         2005
                                              ----------    ----------
                                              (Unaudited)
 ASSETS

 Current Assets:

 Cash and cash equivalents                      $403,428      $188,588
 Voyage receivables                              146,225       157,334
 Other receivables                                72,340        22,202
 Inventories and prepaid expenses                 22,615        16,763
                                              ----------    ----------
      Total Current Assets                       644,608       384,887
 Capital Construction Fund                       302,032       296,126
 Vessels and other property                    2,070,069     2,288,481
 Vessels held for sale                            60,479            --
 Vessels under Capital Leases                     32,542        36,267
 Deferred drydock expenditures,  
  net                                             33,635        19,805
                                              ----------    ----------
      Total Vessels, Deferred 
       Drydock and Other Property              2,196,725     2,344,553
                                              ----------    ----------

 Investments in Affiliated
   Companies                                     275,007       269,657
 Other Assets                                     66,710        53,457
                                              ----------    ----------
      Total Assets                            $3,485,082    $3,348,680
                                              ==========    ==========
                                              
 LIABILITIES AND SHAREHOLDERS' EQUITY

 Current Liabilities:

 Accounts payable, sundry 
  liabilities and accrued            
  expenses                                      $167,304      $105,173
 Short-term debt and current 
  installments of long-term debt                  23,224        20,066
 Current obligations under 
  capital leases                                   7,473         6,968
                                              ----------    ----------
      Total Current Liabilities                  198,001       132,207
 Long-term Debt                                  763,348       923,612
 Obligations under Capital Leases                 36,008        42,043
 Deferred Gain on Sale and 
  Leaseback of Vessels                           230,301       233,456
 Deferred Federal Income Taxes 
  and Other Liabilities                          139,319       141,334

 Shareholders' Equity                          2,118,105     1,876,028
                                              ----------    ----------
      Total Liabilities and 
       Shareholders' Equity                   $3,485,082    $3,348,680
                                              ==========    ==========


CONSOLIDATED STATEMENTS OF CASH FLOWS

 ($ in thousands)                         Nine Months Ended Sept. 30,
                                          --------------------------
                                              2006           2005
                                          -----------    -----------
 Cash Flows from Operating Activities:

 Net income                                  $279,425       $351,145
 Items included in net income not
  affecting cash flows:
  Depreciation and amortization               104,195        116,444
  Amortization of deferred gain on
   sale and leasebacks                        (31,611)        (2,356)
  Deferred compensation relating to
   restricted stock and stock option
   grants                                       2,915          1,521
  Deferred federal income tax credit           (4,700)        (2,732)
  Undistributed earnings of affiliated
   companies                                    7,095         (8,380)
  Other - net                                  (9,465)       (16,322)

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

  Gain on sale of securities - net            (10,420)       (23,714)
  Gain on disposal of vessels                 (10,651)       (36,945)
 Payments for drydocking                      (27,402)        (9,945)
 Changes in operating assets and
  liabilities                                  10,200        (29,775)
                                          -----------    -----------
  Net cash provided by operating
   activities                                 309,581        338,941
                                          -----------    -----------
 Cash Flows from Investing Activities:

 Expenditures for vessels                     (52,014)        (1,905)
 Proceeds from disposal of vessels            168,969        434,641
 Acquisition of interest in affiliated
  company that owned four V-Pluses                 --        (69,145)
 Acquisition of Stelmar Shipping Ltd.              --       (742,433)
 Expenditures for other property               (6,292)        (6,395)
 Investments in and advances to
  affiliated companies                         (7,071)        (8,439)
 Distributions from affiliated
  companies                                     1,573         20,853
 Purchases of other investments                  (660)          (709)
 Proceeds from dispositions of other
  investments                                     905         15,946
 Other - net                                   (1,207)          (680)
                                          -----------    -----------
  Net cash provided by/(used in)
   investing activities                       104,203       (358,266)
                                          -----------    -----------
 Cash Flows from Financing Activities:

 Issuance of debt, net of issuance
  costs                                        83,642        781,268
 Payments on debt and obligations
  under capital leases                       (246,296)    (1,080,061)
 Cash dividends paid                          (26,691)       (20,710)
 Issuance of common stock upon
  exercise of stock options                       237            187
 Other - net                                   (9,836)          (420)
                                          -----------    -----------
  Net cash (used in) financing
   activities                                (198,944)      (319,736)
                                          -----------    -----------
 Net increase/(decrease) in cash and
  cash equivalents                            214,840       (339,061)
 Cash and cash equivalents at beginning
  of year                                     188,588        479,181
                                          -----------    -----------
 Cash and cash equivalents at end of
  period                                     $403,428       $140,120
                                          ===========    ===========


 2005 has been reclassified to conform with the 2006 presentation.

FLEET

On September 30, 2006, OSG was the second largest publicly traded oil tanker company in the world as measured by number of vessels. OSG's fleet of 118 vessels, including newbuilds, aggregates 12.9 million deadweight tons and 865,000 cbm. Adjusted for OSG's participation interest in joint ventures and chartered-in vessels, the fleet totaled 109.85 vessels. For current fleet information, which is updated on a quarterly basis, refer to the Company's website at www.osg.com.



                      Vessels   Vessels            Total at 
                       Owned  Chartered-in    September 30, 2006
                    --------------------------------------------------

                                            Total  Vessels   Total
 Vessel Type         No.  WBO   No.  WBO   Vessels   WBO      Dwt
 ---------------------------------------------------------------------

 VLCC (including
  V-Plus)             11   11   11   7.25    22     18.25  6,994,410
 Aframax               7    7   10   7.60    17     14.60  1,776,413
 Panamax               9    9    2   2.00    11     11.00    764,083
 Summary
  International
  Flag Crude
  Tankers             27   27   23  16.85    50     43.85  9,534,906
 Panamax               2    2    0      0     2      2.00    140,626
 Handysize            12   12   15  15.00    27     27.00  1,176,834
 Summary
  International
  Flag Product
  Carriers            14   14   15  15.00    29     29.00  1,317,460

 International
  Flag Dry Bulk
  Carriers             0    0    2   2.00     2      2.00    319,843
 Total
  International
  Flag
  Operating
   Fleet              41   41   40  33.85    81     74.85 11,172,209
 U.S. Flag
  Operating
  Fleet(a)             6    6    4   4.00    10     10.00    386,047
 Total Operating
  Fleet               47   47   44  37.85    91     84.85 11,558,256
 Newbuild Fleet

 International
  Flag
  Aframax Crude
   Tankers             4    4    0      0     4      4.00    456,000
  Handysize
   Product
   Carriers            0    0    9   9.00     9      9.00    440,000
 U.S. Flag
  Product
  Carriers             0    0   10  10.00    10     10.00    460,000
 Subtotal of
  Crude Tankers,
 Product Carriers
  and Dry Bulk
  Carriers            51   51   63  56.85   114    107.85 12,914,256
 Newbuild LNG
  Carriers             4    2    0      0     4      2.00    864,800 
                                                                 cbm
 Total Operating
  and Newbuild
  Fleet               55   53   63  56.85   118    109.85         --

 WBO = Weighted by Ownership

 (a) Includes three owned Product Carriers that trade 
     internationally, thus the associated revenue is included in the 
     Product Carrier segment.

Average Age of International Flag Operating Fleet

OSG has one of the youngest International Flag fleets in the industry. The Company believes its modern, well maintained fleet is a significant competitive advantage in the global market. The table below reflects the average age of the Company's owned International Flag fleet compared with the world fleet.



                             Average Age of         Average Age of
                               OSG's Owned            World Fleet
        Vessel Class        Fleet at 9/30/06         at 9/30/06(a)
 
  --------------------------------------------------------------------
   VLCC                          6.1 years             8.8 years
   Aframax                       7.9 years             9.0 years
   Panamax(b)                    3.5 years             9.9 years
   Handysize                     5.7 years            12.3 years


 (a) Source: Clarkson database as of October 1, 2006.
 
 (b) Includes Panamax tankers that trade crude oil and refined
     petroleum products.

Drydock Schedule

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 anticipated days off-hire for these events by class for the Company's owned and bareboat chartered-in vessels.



                                          Q406              Q306
                                       ------------------------------
                                        Actual    Projected  
                                          Days       Days     No. of
                                      Off-Hire     Off-Hire   Vessels

 --------------------------------------------------------------------
         Trade - Crude Oil
 --------------------------------------------------------------------
 VLCC                                      123        83        3
 Aframax                                    39        25        2
 Panamax                                    32        55        3
 -------------------------------------------------------------------- 
 Trade - Refined 
  Petroleum Products      
 --------------------------------------------------------------------
 Panamax                                     0         0        0
 Handysize                                 241       209        6
 U.S.                                       20        30        3
 --------------------------------------------------------------------
                          Total            455       402       17

MARKET OVERVIEW

Worldwide oil demand during the third quarter of 2006 was approximately 84.2 million barrels per day ("b/d"), an increase of 1.0 million barrels per day, or 1.2%, compared with the third quarter of 2005. This pickup in demand reflects a 3.3% increase in non-OECD countries, partially offset by a decrease of 0.3% in OECD areas. China's energy demand continues to grow, especially in transportation fuels, with third quarter demand increasing by approximately 7.2%, or 480,000 b/d, compared with the year earlier quarter. Middle East demand continued to grow with a third quarter increase of 320,000 b/d, or 5.1%, primarily due to fuel subsidies that have kept prices in Middle East countries significantly below world prices. North American oil demand increased by 0.2% against a third quarter 2005 demand base that reflected the adverse impact from the hurricanes that hit the U.S. Gulf Coast area, dampening demand in both the third and fourth quarters of 2005. Third quarter OECD Europe and OECD Asia demand declined, however, 0.9% and 0.4%, respectively. High prices and bad weather in Japan reduced diesel and gasoline demand while higher natural gas liquid imports, due to lower prices, resulted in a reduction in fuel oil usage. The decline in European demand reflects reduced transportation fuel use, mainly gasoline, as well as a reduction in fuel oil requirements in Italy as power generation needs were met by an increase in lower cost alternatives.

Worldwide oil demand for the first nine months of 2006 increased by 0.8% compared with the first nine months of 2005. Demand declined in all OECD areas by 0.8%, as fuel substitutions combined with lower transportation fuel demand did not offset increases in demand for aviation gasoline. Therefore, non-OECD demand growth of 3% accounted for the growth in worldwide oil consumption during the first nine months of 2006. The non-OECD increase was led by growth of 6.6% in China, 5.4% in the Middle East and 1.2% in Brazil.

Tanker supply has increased by 4.4%, or 13.4 million dwt (4.1 million dwt during the first quarter, 4.6 million dwt in the second quarter and 4.7 million dwt in the third quarter of 2006) from year-end 2005 levels. The largest percentage increase occurred in the Panamax sector, where tonnage has increased by 11.8% since the beginning of the year. VLCCs, on the other hand, experienced the lowest percentage growth at 2.9%. The additional tonnage in each vessel category exerted downward pressure on TCE rates during the first nine months of 2006.

Changing supply patterns in the crude oil market during 2006 have had a favorable impact on tonne-mile demand and fleet utilization rates. Venezuela has reduced its exports to the U.S. by almost 6% through the third quarter, redirecting them to Asia. Crude oil movements from the Atlantic Basin to Asia have also risen significantly this year. Deliveries to Asia from Central and South America increased from 80,000 b/d to about 150,000 b/d. Exports from West Africa to Asia in the first nine months of 2006 increased by almost 30% relative to the same 2005 period, with China accounting for much of this increase. These changes in supply patterns are likely to persist as Venezuela seeks to expand its presence in Asia while continuing to reduce its dependence on the U.S. and as additional investments are made in Africa and South America by Asian national oil companies desiring a secure access to crude supplies.

Third quarter 2006 rates in all vessel categories were higher than rates realized during the same quarter of 2005. Rates in the VLCC and Aframax sectors were favorably impacted by the August announcement of BP's partial shutdown of production in the Prudhoe Bay fields in Alaska due to pipeline corrosion problems. Some U.S. West Coast refineries that utilize Alaskan North Slope ("ANS") crude began to source alternative supplies from the Middle East, increasing demand for VLCCs. New Caspian Sea production transported through the Baku-Tbilisi-Ceyhan ("B-T-C") pipeline to the port of Ceyhan boosted the utilization of Aframaxes operating in the Mediterranean. Third quarter product carrier rates were positively influenced by higher aviation gasoline imports into China, increased movement of products from Asia to the U.S. West Coast and arbitrage opportunities for diesel exports from the U.S. to Europe. Panamax rates benefited from increases in crude oil shipments from the Caribbean to the U.S. West Coast to replace shut-in ANS crude oil production.

Newbuilding vessel prices continued to strengthen during the third quarter of 2006, with increases ranging from 1% for VLCCs and Panamaxes to 4% for Aframaxes relative to the previous quarter. Relative to a year ago, current newbuilding prices have increased 4% for VLCCs, 2% for Aframaxes, 8% for Panamaxes and 10% for Handysize Product Carriers. Prices for second hand vessels also remained strong, with prices for some modern vessels exceeding newbuilding prices as buyers continued to be willing to pay premiums for prompt delivery. Newbuilding prices are likely to remain high as shipyards operate at or near full capacity with orderbooks extending out as far as three to three and one-half years.

EARNINGS CONFERENCE CALL INFORMATION

The Company plans to host a conference call at 12:00 p.m. ET on November 2, 2006 to discuss results for the third quarter. All shareholders and other interested parties are invited to call into the conference call, which may be accessed by calling +1 866-425-6195 within the United States, or +1 973-935-8752 for international participants. A live webcast of the conference call and accompanying slide presentation will be available on Overseas Shipholding Group's website at www.osg.com in the Investor Relations Webcasts and Presentations section or via www.viavid.net. The webcast will be available for 90 days and requires Windows Media Player.

An audio replay of the conference call will be available from 2:00 p.m. ET on Thursday, November 2, through midnight ET on Thursday, November 9, 2006 by calling +1 877-519-4471 within the United States or +1 973-341-3080 for international callers. The password for the replay is 7959321.

ABOUT OSG

Overseas Shipholding Group, Inc. (NYSE:OSG) is one of the largest publicly traded tanker companies in the world with a combined owned, operated and newbuild fleet of 118 vessels aggregating 12.9 million dwt and 865,000 cbm, as of today's date. 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, with offices in Athens, London, Manila, Montreal, Newcastle, New York City and Singapore. 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 markets, changing oil trading patterns, prospects for certain strategic alliances and investments, the likelihood of closing the acquisition of Maritrans Inc. and integrating its operations with OSG's operations, estimated TCE rates achieved for the fourth quarter of 2006, anticipated levels of newbuilding and scrapping, projected drydock schedule, the projected growth of the world tanker fleet and the forecast of world economic activity and world oil demand. 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 on Form 10-K.

APPENDIX 1 -- TCE RECONCILIATION

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



                           Three Months Ended      Nine Months Ended 
                                Sept. 30,              Sept. 30,
                           -----------------------------------------

 ($ in thousands)            2006       2005       2006       2005
 -------------------------------------------------------------------
 Time charter equivalent
  revenues                 $254,808   $194,760   $751,221   $690,545
 Add: Voyage expenses        11,056      8,443     36,422     26,449
                           ------------------------------   --------   
 Shipping revenues         $265,864   $203,203   $787,643   $716,994
                           =========================================

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

APPENDIX 2 -- EBITDA RECONCILIATION

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



                           Three Months Ended      Nine Months Ended 
                                Sept. 30,              Sept. 30,
                          --------------------------------------------
 ($ in thousands)           2006        2005       2006        2005
 ---------------------------------------------------------------------
 Net income                $90,830     $72,065   $279,425    $351,145
 Provision/(credit) for
  federal income taxes      (3,800)        700    (11,141)     (3,569)
 Interest expense           14,552      22,639     52,293      71,039
 Depreciation and
  amortization              33,981      39,995    104,195     116,444
                          --------------------------------------------
 EBITDA                   $135,563    $135,399   $424,772    $535,059
                          ============================================

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

APPENDIX 3 -- CAPITAL EXPENDITURES

The following table presents information with respect to OSG's capital expenditures for the three and nine months ended September 30, 2006 and 2005.



                                Three Months Ended   Nine Months Ended 
                                     Sept. 30,           Sept. 30,
                                --------------------------------------
 ($ in thousands)                 2006      2005      2006      2005
 ---------------------------------------------------------------------
 Expenditures for vessels       $46,620      $690   $52,014    $1,905

 Acquisition of interests
  in affiliated companies            --        --        --    69,145

 Investments in and advances
  to affiliated companies         7,071       953     7,071     8,439
 Payments for drydockings         6,123     2,353    27,402     9,945
                                --------------------------------------
                                $59,814    $3,996   $86,487   $89,434
                                ======================================


            

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