Eagle Bulk Shipping Inc. JPMorgan Aviation ...library.corporate-ir.net/library/18/189/189576/items/284393/JP... · JPMorgan Aviation & Transportation Conference. 1 ... Finance : -

Eagle Bulk Shipping Inc.

19 March 2008

JPMorgan Aviation & Transportation

Conference

1Eagle Bulk Shipping Inc. QUALITY - CONSISTENCY - TRANSPARENCY

Forward Looking Statements Forward Looking Statements

This presentation contains certain statements that may be deemed to be “forward-looking statements” within the meaning of the Securities Acts. Forward-looking statements reflect management’s current views with respect to future events and financial performance and may include statements concerning plans, objectives, goals, strategies, future events or performance, and underlying assumptions and other statements, which are other than statements of historical facts. The forward-looking statements in this presentation are based upon various assumptions, many of which are based, in turn, upon further assumptions, including without limitation, management's examination of historical operating trends, data contained in our records and other data available from third parties. Although Eagle Bulk Shipping Inc. believes that these assumptions were reasonable when made, because these assumptions are inherently subject to significant uncertainties and contingencies which are difficult or impossible to predict and are beyond our control, Eagle Bulk Shipping Inc. cannot assure you that it will achieve or accomplish these expectations, beliefs or projections. Important factors that, in our view, could cause actual results to differ materially from those discussed in the forward-looking statements include the strength of world economies and currencies, general market conditions, including changes in charterhire rates and vessel values, changes in demand that may affect attitudes of time charterers to scheduled and unscheduled drydocking, changes in our vessel operating expenses, including dry-docking and insurance costs, or actions taken by regulatory authorities, ability of our counterparties to perform their obligations under sales agreements and charter contracts on a timely basis, potential liability from future litigation, domestic and international political conditions, potential disruption of shipping routes due to accidents and political events or acts by terrorists. Risks and uncertainties are further described in reports filed by Eagle Bulk Shipping Inc. with the US Securities and Exchange Commission.


Agenda Agenda

Investment Thesis

The Fleet

Industry View

Financial Review

Conclusion

Investment Thesis


Eagle Bulk – A Clear, Focused Investment StoryEagle Bulk – A Clear, Focused Investment Story

We are one of the largest Supramax owners in the world

Delivering Sustainable Growth

Strong contract coverage with upside — $1.1 bn in contracts— 19 profit-sharing charters— 18 open vessels

Best long term prospects

Stable and increasing cash flows for sustainable dividends

— Target $0.50 per quarter — Intent to grow

$70m acquisition in 3Q-05$105m acquisition in 2Q-06$67m acquisition in 4Q-06$205m acquisition in 1Q-07$1.1 bn acquisition in 3Q-07$169m acquisition in 1Q-08

Proven growth strategy — 43 vessels — $1.7 billion worth of acquisitions


Eagle Bulk – A Growth StoryEagle Bulk – A Growth Story

Dec 2005 Dec 2006 Mar 2008Growth

2005-2008

Fleet Size 13 Vessels 16 Vessels 53 Vessels 4.1x

- Supramax 9 Vessels 12 Vessels 50 Vessels 5.6x

- DWT 0.64 m tons 0.80 m tons 2.92 m tons 4.6x

Finance :

- Market Capitalization $528 million $623 million $1,245 million 2.4x

- Enterprise Value $668 million $862 million $1,842 million 2.8x

- Dividends Paid to Date $5.10 per share


Capital Investment Program of $1.5 Billion Capital Investment Program of $1.5 Billion

Acquired 3 modern Supramax vessels for $138.7 million

Expanded Japanese newbuilding program from 2 to 5 vessels at an average contract price of $33.5 million per vessel

1st vessel delivery in 4Q-2008; vessel is charter free

Completed fleet acquisition of 26 newbuild Supramax vessels for $1.1 billion

1st vessel delivery in 3Q-2008

Recently exercised options to build additional 4 Supramax sistervessels for $169 million

Fleet Triples to 53 Vessels

Last 12 Months:


Eagle On a Solid Growth TrajectoryEagle On a Solid Growth Trajectory

Fleet CAGR of > 20% ● 3x increase in Owned Days

2005 2006 2007 2008 2009 2010 2011 2012(6,000)

(4,000)

(2,000)

-

2,000

4,000

6,000

8,000

10,000

12,000

14,000

16,000

18,000

20,000♦ Owned Days$ m EBITDA

44

83

100

The Fleet


Modern, High Quality Geared Fleet of Supramax VesselsModern, High Quality Geared Fleet of Supramax Vessels

35 New Vessels with 2 million dwt of Capacity Coming Online

On-the-Water FleetNo. of Vessels Deadweight Tons (dwt) Vessel Type Delivery

18 Vessels 0.92 million dwt 15 Supramaxes3 Handymaxes

Supramax Newbuilding - 3 Groups of Sister Vessels

5 Vessels 0.26 million dwt 53,100 dwt Series 2008-09




Open Days Provide Revenue Upside . . . .Open Days Provide Revenue Upside . . . .

Open days provide significant revenue upside

18 Open vessels to charter between now and 2009*

19 Profit-sharing charters available to take advantage of market

-

200

400

600

800

1,000

1,200

1,400

1,600

2008 2009-Q1 2009-Q2 2009-Q3 2009-Q4

Open Days

* Basis earliest deliveries


. . . . Contracted Revenue Provide Stability. . . . Contracted Revenue Provide Stability

Contracted Gross Revenues in Excess of $1.1 billion Supports Dividend

♦ No. of ships

-

20

40

60

80

100

120

140

2007 2008 2009 2010 2011 2012 2013 2014 2015 2016 2017 2018-

5,000

10,000

15,000

20,000

25,000

$ m Owned DaysContracted Revenues

18

30

21

38

46

53

53

53

53 53 53 53

Industry View


China Settles Into Sustained Growth China Settles Into Sustained Growth

Chinese capital investments continue to expand – up almost 30% in 2007

Construction growth up almost 40% in 2007

Coal shortages in China: after net imports of 20 million tons in 2007, Chinese coal imports expected to double in 2008 to 40 million tons

Chinese coastal trade hits 400 million tons in 2007 – Chinese Coastal Bulk Freight Index* up 60% in 2007

Surging coastal trade draws more smaller vessels - COSCO announces reallocation of vessels from international trade to meet domestic needs

Chinese overseas investments (e.g., stake in Rio Tinto) to secure stable supplies assures ton miles

Source: ICAP Hyde, Reuters, Financial Times, Clarksons

Demand Sustains Increase in Ton Miles


Increasing Indian Trade Requires Geared VesselsIncreasing Indian Trade Requires Geared Vessels

India expected to grow at a sustained 8-9%

Coal imports into India surge, as nation sharply expands power supply

29 GW or 45% on power units at low or critical inventory levels

64 GW of coal fired power units to be added from 2008-2012

1 GW of power requires 2-3.5 million tons of coal

Indian companies invest overseas to secure critical coal supplies – assures ton miles

Weak Indian port infrastructure results in more geared vessels bringing in major bulk cargoes

Source: ICAP Hyde, Reuters, Financial Times, Clarksons

3/4ths of Eagle’s 2007 Voyages Required Vessel Gear


Charterers Attracted by Versatility of Supramax VesselsCharterers Attracted by Versatility of Supramax Vessels

Eagle vessels carried 6.7 million tons of cargo in 2007. MISC. cargoes include Phosrock, Sugar, HBI, and Concentrates

45% of Eagle’s Cargoes were “Capesize and Panamax cargoes”

Handymax/Supramax

Panamax

CapesizeIRON ORE COAL GRAINS

OTHER ORES CEMENT COKE STEELS

SCRAP IRON AGGREGATES MISC.

In m tons 1,121,200 983,119 901,790 865,714 542,118 529,858 617,589 - 58,750 1,049,858

Cardinal Condor Falcon Griffon Harrier Hawk I Heron Kite Merlin Osprey I Peregrine Shikra Sparrow Kestrel I Tern Jaeger


Drybulk Order Book:

51% Capesize ; 22% Panamax

21% Supramax ; 6% Handy

Attractive Supply Fundamentals for Supramax MarketAttractive Supply Fundamentals for Supramax Market

Source: Clarksons as of February 2008

Aging Handymax fleet — 33% of capacity > 20 years old

Greenfield yards- likely slippage?

8 million dwt of vessels due in 2007 miss delivery schedules – trend increasing

World Dry Bulk Fleet

Orderbook and Fleet Age

32%23% 19%

53%44%

89%

0%

10%

20%

30%

40%

50%

60%

70%

80%

90%

Handymax Panamax Capesize

Flee

t Age

and

Ord

erbo

ok (d

wt)

% of Fleet > 20 years

Orderbook as % of Fleet

113

29.4

62.3

131.4

57.5

0

20

40

60

80

100

120

140

Handy (10,000/34,999

dwt)

Handymax (35,000/49,999

dwt)

Supramax (50,000/59,999

dwt)

Panamax (60,000/99,999

dwt)

Capesize (>100,000 dwt)

Flee

t DW

T (M

illio

n To

ns)

2,354 Vsls

552 Vsls

768 Vsls

1,565 Vsls

1,458 Vsls

Eagle’s focus

Financial Review


4Q 2007 and Year 2007 Results4Q 2007 and Year 2007 Results

4Q Net Income of $16.3 million or $0.35 per share

Gross Time Charter Revenues of $38 million, up 23% Q-on-Q

EBITDA1 of $27.9 million, up 26% Q-on-Q

Fleet Utilization of 99.3%

1 EBITDA, as defined by our credit agreement, is Net Income plus Interest Expense, Depreciation and Amortization, and Exceptional Items.

Declares 4Q Dividend of $0.50 per share

2007 Net Income of $52.2 million, up 54% Y-on-Y

Gross Time Charter Revenues of $135.4 million, up 19% Y-onY

Fleet Utilization of 99.4%

EBITDA1 of $99.4 million, up 20% Y-on-Y

Paid $82.1 million in Cash Dividends or $1.98 per share


Low Breakeven Cost StrategyLow Breakeven Cost Strategy

Vessel expenses include crew wages and related costs, the cost of insurance including credit risk insurance, expenses relating to repairs and maintenance, the cost of spares and consumable stores and related inventory, tonnage taxes, pre-operating costs associated with the delivery of acquired vessels including providing the newly acquired vessels with initial provisions and stores, and other miscellaneous expenses. The Company is anticipating higher crewing costs and higher costs for oil based supplies including lubes and paints. The Company is also making allowance for constraints in yard drydocking capacity which has driven up drydocking costs.

548

4,414296

1,400

1,338Dry-Dock Vessel ExpensesTechnical Mgt Fees G&ACash Interest (net)


Strong Balance SheetStrong Balance Sheet

1 Construction finance costs (interest, deferred finance charges, supervision, etc.) are capitalizedeliminating any impact on current cash flows and income statement.

2 Net Debt is pro forma after taking into effect 4Q-07 Dividend payment of $23.4 million.

Quarterly Dividend Cash Flow Maintained

Dec. 31, 2007(in $ 000's)

Cash $152,904Other Current Assets 4,550 Vessels, net 605,245 Advances for Vessel Construction 1 344,855 Restricted Cash 9,125 Other Assets 19,330 TOTAL ASSETS 1,136,009 Current Liabilities 10,263 Long-term Debt 597,243 Other Liabilities 13,532 Stockholders' Equity 514,971

Book Capitalization 1,112,214 Net Debt 2 / Capitalization 41.2%Liquidity 1,141,422

Conclusion


Conclusion - Accretive Growth Strategy Conclusion - Accretive Growth Strategy

Eagle Bulk – Delivering Sustainable Growth

CLEAR BENEFITS TO SHAREHOLDERS

Secure dividend over long term.

Pay down debt

Declared Dividends of $5.10 per share to date. Intent to grow dividend over time

AFFIRMS EAGLE BULK AS CONSOLIDATOR IN DRYBULK INDUSTRY

Grows fleet to 53 vessels

Increases cargo carrying capacity to 2.9 million dwt

Lowers average age to 2 years

Improves operating efficiencies with 45 sister vessels

HEALTHY DRYBULK MARKET FUNDAMENTALS CONTINUE

Increase contracted revenues with 18 open vessels available to charter through 2009 and 19 profit sharing charters

Eagle Bulk Shipping Inc.

Documents

Eagle Bulk Shipping Inc. JPMorgan Aviation ...library.corporate-ir.net/library/18/189/189576/items/284393/JP... · JPMorgan Aviation & Transportation Conference. 1 ... Finance : -