OSG Reports Second Quarter Fiscal 2007 Results

Overseas Shipholding Group, Inc. (NYSE: OSG), a market leader in providing energy transportation services, today reported results for the second fiscal quarter of 2007. For the quarter ended June 30, 2007, Time Charter Equivalent1 (TCE) revenues were $274.2 million, an increase of 27% from $216.3 million for the same period of 2006. The increase reflects the acquisitions of Maritrans in November 2006 and the Heidmar Lightering business in April 2007 and an increase in average daily TCE rates for VLCCs and Handysize Product Carriers. EBITDA1 for the quarter increased 36% to $148.5 million from $109.1 million in the comparable period of 2006. Net income for the period increased 31% to $79.0 million, and diluted EPS increased 50% to $2.28 per share compared with $60.2 million, or $1.52 per diluted share, for the same period a year ago. Net income in the current quarter benefited from the sale of the remaining 8.7 million shares of Double Hull Tankers, Inc. (NYSE: DHT), in which OSG held a minority interest, which resulted in a gain of approximately $26.3 million, or $0.49 per diluted share, versus a gain on sale of securities of $3.9 million, or $0.06 per diluted share, in the same period a year ago. In addition, net income in the second quarter of 2007 reflected a gain on vessel sales of $5.6 million, or $0.16 per diluted share, compared with a loss a $3.5 million, or $0.07 per diluted share, in the comparable period of 2006. Period-over-period diluted EPS also benefited from the Company’s repurchase of 17.4% of total shares outstanding since September 2006. For the first six months ended June 30, 2007, the Company reported a 7% increase in TCE revenues to $533.4 million from $496.4 million in the comparable period of 2006. EBITDA for the first six months of 2007 increased 2% to $294.6 million from $289.2 million in the first six months of 2006. Net income declined 13% to $163.6 million for the first six months of 2007 compared with $188.6 million in the comparable first half of 2006. Diluted earnings per share declined 7% to $4.44 from $4.76 in the first half of 2007 compared with the same period a year ago. The first six months of 2007 benefited from gains on sales of securities of $41.3 million, or $0.73 per diluted share, compared with $8.9 million, or $0.15 per diluted share, in the comparable period of 2006. In addition, the results for the first six months of 2007 reflect a gain on vessel sales of $5.6 million, or $0.15 per diluted share, compared with a loss of $3.6 million, or $0.07 per diluted share, in the comparable period of 2006. TCE revenues in the second quarter of 2007 for the International Crude Tanker segment were $160.3 million, an increase of $14.7 million, or 10%, from $145.6 million, in the same period of 2006. The increase was principally due to the inclusion of the results of Heidmar Lightering from April 1, 2007. TCE revenues for the International Product Carrier segment were $59.2 million, up 20% from $49.3 million in the year earlier period. The increase was principally due to increases in the average daily rates earned by Handysize Product Carriers trading both spot and on time charters and an increase in revenue days attributable to the delivery of four time chartered-in Handysize Product carriers subsequent to June 30, 2006. TCE revenues from the U.S. segment were $48.8 million, up $33.7 million, or 223%, from $15.1 million in the same quarter a year earlier reflecting the acquisition of Maritrans and the delivery of the Overseas Houston late in the first quarter of 2007. The balance of TCE revenues were derived from the Company’s two International Flag dry bulk carriers. Morten Arntzen, President and CEO of OSG, commented, "We had an exceptional second quarter, with notable contributions from our VLCC and Product Carrier segments. At the same time as we further enhanced shareholder value by increasing our dividend by 25% and by augmenting our share buyback program, we continued to invest in global technical operations and to execute our balanced growth strategy. During the quarter we enhanced our commercial footprint by increasing our presence in the larger product carrier sector (LR1s) and establishing OSG Lightering in the U.S. Gulf. These activities fit perfectly into our existing global shipping platforms." Income from vessel operations was $67.3 million in the second quarter of 2007, a 9% increase from $61.9 million in the same period a year earlier. For the quarter ended June 30, 2007, total operating expenses increased 38%, or $63.9 million, to $232.7 million from $168.8 million in the corresponding quarter in 2006. The increase in operating expenses was principally a result of the inclusion of the Maritrans and the Heidmar Lightering acquisitions and an increase in chartered-in tonnage. As of June 30, 2007, OSG chartered in 50 vessels compared with 41 a year earlier. General and administrative expenses increased $8.6 million, or 37%, in the second quarter of 2007 principally due to expenses of the Tampa, Philadelphia and Houston offices associated with the Maritrans and Heidmar Lightering acquisitions. FINANCIAL HIGHLIGHTS Share Repurchase From April 1, 2007 through June 30, 2007, OSG purchased 5,521,191 shares at an average price of $66.13 per share. Since the initial announcement of its share repurchase program on June 9, 2006, the Company has repurchased 17.4% of total shares outstanding at a total cost of $446.1 million. The Company currently has a $200 million repurchase program in place under which a total of $168 million remains outstanding. Future Locked-in Revenue Future revenues associated with noncancelable term charters as of June 30, 2007, totaled $1.7 billion including time charters entered into by the Aframax International pool and fixed rate contracts of affreightment from the U.S. Flag lightering operation, respectively. Such future revenues exclude the Gas segment. DHT Sell-down During the second quarter, OSG sold 8.7 million shares of common stock of DHT. OSG recognized total gains from the transactions of approximately $26.3 million in the second quarter of 2007, which increased EPS by $0.49 per diluted share. As a result of the sales, OSG's beneficial ownership of DHT's common stock has been reduced to zero as of June 30, 2007. OSG continues to time charter-in DHT’s fleet of seven vessels that remain subject to valuable extension options. Quarterly Dividend Increased On June 6, 2007, the Board announced a 25% increase in its regular quarterly dividend to $0.3125 per share and declared a dividend to stockholders of record on August 7, 2007, payable on August 28, 2007. New Credit Framework During the quarter, OSG finalized a framework agreement with The Export-Import Bank of China for the provision of up to $800 million in fixed rate financing for the construction of new vessels in China over the next five years. RECENT ACTIVITIES AND QUARTERLY EVENTS Crude Oil Tankers Fleet Expansion and Deliveries On May 17, 2007, the Aqua, a 116,000 dwt Aframax tanker, delivered to OSG. OSG has a 50% interest in the vessel, which has been time chartered-in through May 2010. The vessel joined the Aframax International commercial pool upon delivery, bringing the pool’s aggregate vessel count to 38. OSG time chartered-in the KHK Vision, a 300,000 dwt VLCC through 2012. OSG has a 50% interest in the vessel, which began trading in the Tankers International pool in April 2007. The addition of the vessel brings the Tankers International pool aggregate vessel count to 42. Redeliveries and Charter Extensions Two Panamaxes, the Overseas Goldmar and the Overseas Silvermar, redelivered in May and June 2007, respectively, from time charters that were at a daily rate of $18,500 per day and in place since the 2005 acquisition of Stelmar. The vessels joined the Panamax International commercial pool expanding that pool to 22 vessels. The Overseas Polys was time chartered-out for two years through April 2009. The Overseas Rubymar was bareboat chartered-out through May 2010 and will be employed in the Argentinian cabotage trade. The TI Ningbo and the TI Qingdao, time chartered-in VLCCs in which OSG had a 50% ownership stake, were redelivered late in the second quarter. Fleet Diversification On April 20, 2007, OSG completed the acquisition of the Heidmar lightering business from a subsidiary of Morgan Stanley Capital Group Inc. for cash of approximately $41 million. The Houston-based operation includes a fleet of four International Flag Aframaxes (including two ships time chartered-in from the Aframax International pool) and two U.S. Flag workboats and provides crude oil lightering services to refiners, oil companies and trading companies primarily in the U.S. Gulf. The business manages a portfolio of one-to-three year fixed rate cargo contracts. Under the agreement, OSG acquired the lightering fleet, which is time chartered-in, including a 50% interest in two specialized lightering Aframaxes, the Sabine and the Brazos. The lightering operation was renamed OSG Lightering. Product Carriers Fleet Expansion and Deliveries OSG purchased two 2006-built 75,000 dwt Panamax Product Carriers, commonly referred to as LR1 tankers, for a total of $125 million. The Overseas Visayas delivered on July 18, 2007 and the Overseas Luzon is expected to deliver in August 2007. The addition of larger size vessels is part of OSG’s efforts to diversify its portfolio of Product Carriers to better compete as product trades shift and globalize. On May 17, 2007, OSG took delivery of the Overseas Sextans, which began a three-year time charter. The vessel, a 51,000 dwt IMO III Product Carrier, has been time chartered-in through May 2017. Charter Extensions The time charter-out of the Overseas Rimar was extended to December 2010, the Overseas Atalmar was chartered-out through December 2010 and the Overseas Petromar was chartered-out for three years through December 2010. The new charter-out rates were 12%, 23% and 13% higher than each vessel’s previous charter, respectively. U.S. Fleet Deliveries On June 26, 2007, OSG took delivery of the Overseas Long Beach, the second in the 10-ship order placed at the Aker Philadelphia Shipyard. The vessel, which has been chartered to BP, began trading in early July 2007. The OSG 242 rejoined the fleet in April 2007. The vessel, an Articulated Tug Barge, was double hulled using a patented methodology adding 38,000 barrels of capacity. FLEET METRICS AND CORPORATE STATISTICS As of June 30, 2007, OSG’s owned or operated fleet totaled 107 International Flag and U.S. Flag vessels compared with 91 at June 30, 2006. Fifty-three percent, or 57 vessels, were owned as of June 30, 2007, with the remaining vessels bareboat or time chartered-in. OSG’s newbuild program of chartered-in and owned vessels totaled 36 and spanned all lines of business. A detailed fleet list and updates on vessels under construction can be found in the Fleet section of www.osg.com. Revenue days in the quarter totaled 8,704, compared with 7,533 in the same period a year earlier. The increase principally reflects the addition of the former Maritrans fleet, the OSG Lightering fleet and the delivery of four Handysize Product Carriers. Revenue days by segment can be found in Spot and Time Charter TCE Rates Achieved and Revenue Days, later in this press release. FINANCIAL PROFILE At June 30, 2007, stockholders’ equity exceeded $1.9 billion and liquidity, including undrawn bank facilities, was more than $1.9 billion. Total long-term debt as of June 30, 2007 was $1.6 billion compared with $1.3 billion at December 31, 2006. Liquidity adjusted debt to capital was 23.6% as of June 30, 2007, compared with 14.8% as of December 31, 2006. Liquidity adjusted debt is defined as long-term debt reduced by cash and the Capital Construction Fund. The increase in liquidity adjusted debt reflects $427.6 million spent on share repurchases in the first six months of 2007. SPOT AND TIME CHARTER TCE RATES ACHIEVED AND REVENUE DAYS The following table provides a breakdown of TCE rates achieved for the first three and six months of fiscal 2007 and 2006 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 Jun. 30, 2007 Three Months Ended Jun. 30, 2006   Spot Charter   Time Charter   Spot Charter   Time Charter Trade – Crude Oil               VLCC Average TCE Rate $ 53,474 $ — $ 46,692 $ — Number of Revenue Days 1,559 — 1,633 — Aframax Average TCE Rate $ 32,187 $ 28,678 $ 26,590 $ 28,139 Number of Revenue Days 988 349 1,142 337 Panamax Average TCE Rate $ 34,287 $ 24,573 $ 26,946 $ 25,010 Number of Revenue Days 390 527 450 546 Lightering – Number of Revenue Days   328     —     —     — Trade – Refined Petroleum Products               Panamax Average TCE Rate $ — $ 18,761 $ — $ 20,110 Number of Revenue Days — 182 — 179 Handysize Average TCE Rate $ 35,320 $ 18,998 $ 26,661 $ 17,630 Number of Revenue Days   725     1,850     643     1,803 U.S. Flag - Number of Revenue Days   668     956     165     453 Other - Number of Revenue Days   —     182     —     182   TOTAL REVENUE DAYS   4,658     4,046     4,033     3,500 CONSOLIDATED STATEMENTS OF OPERATIONS   Three Months Ended Six Months Ended ($ in thousands, except per share amounts) Jun. 30, 2007 Jun. 30, 2006 Jun. 30, 2007 Jun. 30, 2006 Shipping Revenues: Pool revenues $ 138,973 $ 133,002 $ 276,776 $ 326,107 Time and bareboat charter revenues 90,447 68,252 175,381 139,100 Voyage charter revenues   70,577   29,499   123,124   56,572   299,997   230,753   575,281   521,779 Operating Expenses: Voyage expenses 25,763 14,449 41,863 25,366 Vessel expenses 68,858 53,876 129,672 102,791 Charter hire expenses 67,949 38,056 117,365 81,227 Depreciation and amortization 44,099 35,860 86,582 70,214 General and administrative 31,687 23,070 60,725 47,081 Loss/(gain) on disposal of vessels   (5,623)   3,498   (5,620)   3,619 Total Operating Expenses   232,733   168,809   430,587   330,298 Income from Vessel Operations 67,264 61,944 144,694 191,481 Equity in Income of Affiliated Companies   2,885   4,516   6,269   11,328 Operating Income 70,149 66,460 150,963 202,809 Other Income   34,290   6,794   57,048   16,186 104,439 73,254 208,011 218,995 Interest Expense   18,281   15,134   31,449   37,741 Income before Federal Income Taxes 86,158 58,120 176,562 181,254 Provision/(Credit) for Federal Income Taxes   7,166   (2,111)   12,918   (7,341) Net Income $ 78,992 $ 60,231 $ 163,644 $ 188,595 Weighted Average Number of Common Shares Outstanding: Basic 34,404,900 39,536,097 36,733,878 39,526,087 Diluted 34,622,798 39,590,687 36,895,084 39,580,119 Per Share Amounts: Basic net income $ 2.30 $ 1.52 $ 4.45 $ 4.77 Diluted net income $ 2.28 $ 1.52 $ 4.44 $ 4.76 Cash dividends declared $ 0.5625 $ 0.50 $ 0.8125 $ 0.675 TCE REVENUE BY SEGMENT The following table reflects TCE revenues generated by the Company’s three reportable segments for the three and six months ended June 30, 2007 and 2006 and excludes the Company’s proportionate share of TCE revenues of affiliated companies. See Appendix 1 for reconciliations of Time Charter Equivalent Revenues to Shipping Revenues.   Three Months Ended Jun. 30,   Six Months Ended Jun. 30, ($ in thousands)   2007   % of Total   2006   % of Total   2007   % of Total   2006   % of Total International Flag Crude Tankers $160,310 58.5 $145,552 67.3 $307,112 57.6 $352,643 71.0 Product Carriers 59,223 21.6 49,340 22.8 117,121 22.0 103,202 20.8 Other 5,933 2.1 6,295 2.9 10,815 2.0 12,496 2.5 U.S.   48,768   17.8   15,117   7.0   98,370 18.4 28,072 5.7 Total TCE Revenues $274,234 100.0 $216,304 100.0 $533,418 100.0 $496,413 100.0 INCOME FROM VESSEL OPERATIONS BY SEGMENT The following table reflects income from vessel operations accounted for by each reportable segment. Income from vessel operations is before general and administrative expenses, gain/(loss) on disposal of vessels and the Company’s share of income from affiliated companies.   Three Months Ended Jun. 30,   Six Months Ended Jun. 30, ($ in thousands)   2007   % of Total   2006   % of Total   2007   % of Total   2006   % of Total International Flag Crude Tankers $68,891 73.8 $74,277 83.9 $145,132 72.6 $204,052 84.3 Product Carriers 13,874 14.9 10,881 12.3 30,457 15.2 31,415 13.0 Other 1,258 1.3 1,840 2.1 1,415 0.8 3,651 1.5 U.S.   9,305   10.0   1,514   1.7   22,795   11.4   3,063   1.2 Total Income from Vessel Operations   $93,328   100.0   $88,512   100.0   $199,799   100.0   $242,181   100.0 Reconciliations of income from vessel operations of the segments to income before federal income taxes as reported in the consolidated statements of operations follow: Three Months Ended Jun. 30,   Six Months Ended Jun. 30, ($ in thousands) 2007   2006   2007   2006 Total income from vessel operations of all segments $93,328 $88,512 $199,799 $242,181 General and administrative expenses (31,687) (23,070) (60,725) (47,081) (Loss)/gain on disposal of vessels 5,623   (3,498)   5,620   (3,619) Consolidated income from vessel operations 67,264 61,944 144,694 191,481 Equity in income of affiliated companies 2,885 4,516 6,269 11,328 Other income 34,290 6,794 57,048 16,186 Interest expense (18,281)   (15,134)   (31,449)   (37,741) Income before federal income taxes $86,158   $58,120   $176,562   $181,254 CONSOLIDATED BALANCE SHEETS   ($ in thousands) Jun. 30, 2007 Dec. 31, 2006 ASSETS Current Assets: Cash and cash equivalents $742,116 $606,758 Voyage receivables 158,329 136,043 Other receivables, including federal income taxes recoverable 72,925 71,723 Inventories and prepaid expenses 40,775 30,997 Total Current Assets 1,014,145 845,521 Capital Construction Fund 215,790 315,913 Vessels and other property, less accumulated depreciation 2,469,590 2,501,846 Vessel held for sale 11,025 — Vessels under capital leases, less accumulated amortization 27,201 30,750 Deferred drydock expenditures, net 58,257 50,774 Total Vessels, Deferred Drydock and Other Property 2,566,073 2,583,370 Investments in Affiliated Companies 157,306 275,199 Intangible Assets, less accumulated amortization 117,690 92,611 Goodwill 74,526 64,293 Other Assets 69,018 53,762 Total Assets $4,214,548 $4,230,669 LIABILITIES AND STOCKHOLDERS' EQUITY Current Liabilities: Accounts payable, sundry liabilities and accrued expenses $194,051 $192,500 Short-term debt and current installments of long-term debt 27,546 27,426 Current obligations under capital leases 8,021 7,650 Total Current Liabilities 229,618 227,576 Long-term Debt 1,526,256 1,273,053 Obligations under Capital Leases 29,527 33,894 Deferred Gain on Sale and Leaseback of Vessels 205,560 218,759 Deferred Federal Income Taxes and Other Liabilities 288,406 270,076 Stockholders’ Equity 1,935,181 2,207,311 Total Liabilities and Stockholders' Equity $4,214,548 $4,230,669 CONSOLIDATED STATEMENTS OF CASH FLOWS   ($ in thousands) Six Months Ended Jun. 30 2007 2006 Cash Flows from Operating Activities: Net income $163,644 $188,595 Items included in net income not affecting cash flows: Depreciation and amortization 86,582 70,214 Amortization of deferred gain on sale and leasebacks (23,561) (20,861) Deferred compensation relating to restricted stock and stock option grants 4,606 1,900 Provision/(credit) for deferred federal income taxes 5,668 (5,400) Undistributed earnings of affiliated companies 7,717 7,045 Other – net 3,667 3,951 Items included in net income related to investing and financing activities: Gain on sale of securities – net (41,285) (8,889) Loss/(gain) on disposal of vessels (5,620) 3,619 Payments for drydocking (24,690) (21,279) Changes in operating assets and liabilities: (43,379) 18 Net cash provided by operating activities 133,349 218,913 Cash Flows from Investing Activities: Expenditures for vessels (149,991) (5,394) Withdrawals from Capital Construction Fund 106,700 — Proceeds from disposal of vessels 117,548 — Acquisition of Heidmar Lightering (38,375) — Expenditures for other property (4,848) (3,293) Investments in and advances to affiliated companies (27,934) — Proceeds from disposal of investments in affiliated companies 194,815 — Other – net 258 (936) Net cash provided by/(used in) investing activities 198,173 (9,623) Cash Flows from Financing Activities: Purchases of treasury stock (427,618) — Issuance of debt, net of issuance costs 267,000 48,663 Payments on debt and obligations under capital leases (17,680) (242,889) Cash dividends paid (18,163) (16,807) Issuance of common stock upon exercise of stock options 317 215 Other – net (20) (9,765) Net cash (used in) financing activities (196,164) (220,583) Net increase/(decrease) in cash and cash equivalents 135,358 (11,293) Cash and cash equivalents at beginning of year 606,758 188,588 Cash and cash equivalents at end of period $742,116 $177,295 FLEET On June 30, 2007 OSG was the second largest publicly traded oil tanker company in the world as measured by number of vessels. OSG’s fleet of 143 vessels, including 36 newbuilds, aggregates 14.1 million deadweight tons and 865,000 cbm of LNG carrier capacity. Adjusted for OSG’s participation interest in joint ventures and chartered-in vessels, the fleet totaled 133.1 vessels. For current fleet information, which is updated on a quarterly basis upon release of earnings, refer to the Company’s website at www.osg.com. Vessels Owned Vessels Chartered-in Total at Jun. 30, 2007 Vessel Type Number   Weighted byOwnership   Number   Weighted byOwnership   Total Vessels   VesselsWeighted byOwnership   TotalDwt Operating Fleet VLCC (including V-Plus) 10 10 10 7.5 20 17.5 6,398,415 Aframax 7 7 11 8.1 18 15.1 1,891,096 Panamax 9 9 2 2 11 11 764,083 Lightering — — 2 1 2 1 157,312 International Flag Crude Tankers 26 26 25 18.6 51 44.6 9,210,906 Panamax 2 2 — — 2 2 140,626 Handysize1 12 12 19 19 31 31 1,360,616 International Flag Product Carriers 14 14 19 19 33 33 1,501,242 International Flag Dry Bulk Carriers —   —   2   2   2   2   319,843 Total International Flag Operating Fleet 40   40   46   39.6   86   79.6   11,031,991 Handysize Product Carriers 3 3 4 4 7 7 320,682 Clean ATBs 8 8 — — 8 8 221,342 Lightering: ATBs 2 2 — — 2 2 90,908 Crude Carrier 1 1 — — 1 1 39,948 Dry Bulk Carriers and Car Carrier 3   3   —   —   3   3   77,001 Total U.S. Flag Operating Fleet 17   17   4   4   21   21   749,881 TOTAL OPERATING FLEET 57   57   50   43.6   107   100.6   11,781,872 Newbuild/Rebuild Fleet International Flag: VLCC 2 1 — — 2 1 594,000 Aframax 4 4 1 0.5 5 4.5 571,719 Handysize Product Carriers 2 2 8 8 10 10 489,350 U.S. Flag: Product Carriers — — 8 8 8 8 374,520 ATBs 4 4 — — 4 4 136,777 Lightering 3   3   —   —   3   3   136,668 TOTAL NEWBUILD FLEET 15   14   17   16.5   32   30.5   2,303,034 International and U.S. Flag Operating and Newbuild Fleet (except LNGs) 72 71 67 60.1 139 131.1 14,084,906 Newbuild LNG Carriers 4 2 — — 4 2 864,800cbm TOTAL OPERATING AND NEWBUILD FLEET 76   73   67   60.1   143   133.1   — 1Includes three owned U.S. Flag Product Carriers that trade internationally, thus associated revenue is included in the Product Carrier segment. Average Age of International Operating Fleet 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. Vessel Class   Average Age ofOSG’s OwnedFleet at6/30/07   Average Age ofOSG’s OwnedFleet at6/30/06   Average Age ofWorldFleet at6/30/07* VLCC 6.4 years 6.2 years 9.3 years Aframax 8.7 years 8.6 years 9.3 years Panamax** 4.3 years 3.3 years 9.2 years Handysize 5.6 years 5.4 years 9.7 years   *Source: Clarkson database as of July 1, 2007. **Includes Panamax tankers that trade crude oil and refined petroleum products. Off hire, Scheduled Drydock and Double Hull Rebuilds In addition to regular inspections by OSG personnel, all vessels are subject to periodic drydock, special survey and other scheduled maintenance. In addition, OSG is double hulling one ATB during 2007. The table below sets forth actual days off hire for the second quarter of 2007 and anticipated days off-hire for the above-mentioned events by class for the Company’s owned and bareboat chartered-in vessels. Q207   Q307   Q407   Actual Days Off-Hire   No. of Vessels   Projected Days Off-Hire   No. of Vessels   Projected Days Off-Hire   No. of Vessels Trade - Crude Oil                       VLCC 52 2 17 1 — — Aframax 4 1 — — — — Panamax 85   5   75   1   —   — Panamax — — — — — — Handysize 223   9   31   —   87   1 U.S. Flag                       Product Carrier 100 4 16 — — — ATB 121 4 183 3 137 1 Other 19   3   —   —   20   1 Total 604   28   322   5   244   3 When a vessel’s off-hire period extends beyond one quarter, the vessel is counted in the initial quarter only. The days are included in the respective quarters. EARNINGS CONFERENCE CALL INFORMATION OSG will host a conference call on Thursday, July 26, 2007 at 11:00 a.m. ET. All interested parties are invited to participate by calling (888) 679-8033 within the United States and (617) 213-4846 for international calls. A participant passcode number 32594878 is required. A webcast of the conference call and an accompanying slide presentation will be available on Overseas Shipholding Group’s website at www.osg.com in the Investor Relations Webcasts and Presentations section. An audio replay of the conference call will be available from 1:00 p.m. ET on Thursday July 26, 2007 through midnight ET on Thursday, August 2, 2007 by calling (888) 286-8010 within the United States or (617) 801-6888 for international callers. The passcode for the replay is 68121212. ABOUT OSG Overseas Shipholding Group, Inc. (NYSE: OSG) is one of the largest publicly traded tanker companies in the world. As a market leader in global energy transportation services for crude oil and petroleum products in the U.S. and International Flag markets, OSG is committed to setting high standards of excellence for its quality, safety and environmental programs. OSG is recognized as one of the world’s most customer-focused marine transportation companies, with offices in Athens, Houston, London, Manila, Montreal, Newcastle, New York City, Philadelphia, Singapore and Tampa. More information is available at www.osg.com. FORWARD-LOOKING STATEMENTS This release contains forward-looking statements regarding the Company's prospects, including the outlook for tanker and articulated tug barge markets, changing oil trading patterns, prospects for certain strategic alliances and investments, the ability of OSG to successfully integrate the operations of Maritrans and Heidmar Lightering with OSG’s operations, estimated TCE rates achieved for the third quarter of 2007 and estimated time charter TCE rates for the third and fourth quarters of 2007, anticipated levels of newbuilding and scrapping, projected drydock and repair schedule and prospects of OSG’s strategy of being a market leader in the segments in which it competes. Factors, risks and uncertainties that could cause actual results to differ from the expectations reflected in these forward-looking statements are described in the Company’s Annual Report on Form 10-K for 2006. 1See Appendix 1 for a reconciliation of TCE revenues to shipping revenues and Appendix 2 for a reconciliation of EBITDA to net income. 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 Jun. 30,   Six Months Ended Jun. 30, ($ in thousands) 2007   2006   2007   2006 Time charter equivalent revenues $274,234 $216,304 $533,418 $496,413 Add: Voyage expenses 25,763   14,449   41,863   25,366 Shipping revenues $299,997   $230,753   $575,281   $521,779   Consistent with general practice in the shipping industry, the Company uses time charter equivalent revenues, which represents shipping revenues less voyage expenses, as a measure to compare revenue generated from a voyage charter to revenue generated from a time charter. Time charter equivalent revenues, a non-GAAP measure, provides additional meaningful information in conjunction with shipping revenues, the most directly comparable GAAP measure, because it assists Company management in making decisions regarding the deployment and use of its vessels and in evaluating their financial performance. APPENDIX 2 – EBITDA RECONCILIATION   The following table shows reconciliations of net income, as reflected in the consolidated statements of operations, to EBITDA:   Three Months Ended Jun. 30,   Six Months Ended Jun. 30, ($ in thousands) 2007   2006   2007   2006 Net income $78,992 $60,231 $163,644 $188,595 Provision/(credit) for federal income taxes 7,166 (2,111) 12,918 (7,341) Interest expense 18,281 15,134 31,449 37,741 Depreciation and amortization 44,099   35,860   86,582   70,214 EBITDA $148,538   $109,114   $294,593   $289,209   EBITDA represents operating earnings, which is before interest expense and income taxes, plus other income and depreciation and amortization expense. EBITDA is presented to provide investors with meaningful additional information that management uses to monitor ongoing operating results and evaluate trends over comparative periods. EBITDA should not be considered a substitute for net income or cash flow from operating activities prepared in accordance with accounting principles generally accepted in the United States or as a measure of profitability or liquidity. While EBITDA is frequently used as a measure of operating results and performance, it is not necessarily comparable to other similarly titled captions of other companies due to differences in methods of calculation. APPENDIX 3 – CAPITAL EXPENDITURES   The following table presents information with respect to OSG’s capital expenditures for the three and six months ended June 30, 2007 and 2006.   Three Months Ended Jun. 30,   Six Months Ended Jun. 30, ($ in thousands) 2007   2006   2007   2006 Expenditures for vessels $92,318 $437 $149,991 $5,394 Investments in and advances to affiliated companies 2,065 — 27,934 — Payments for drydockings 16,852   12,660   24,690   21,279 $111,235   $13,097   $202,615   $26,673 APPENDIX 4 – 2007 TCE RATES   The Company has achieved the following average estimated TCE rates for the percentage of days booked for vessels operating through July 13, 2007. 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.   Third Quarter Revenue Days Vessel Class and Charter Type   Average TCERates   Fixed as of7/13/07   Open as of7/13/07   Total   % DaysBooked Trade – Crude Oil                     VLCC – Spot $44,000 655 967 1,622 40% Aframax – Spot $28,000 278 768 1,046 27% Aframax – Time $28,500 322 — 322 100% Panamax – Spot $26,000 42 405 447 9% Panamax – Time   $28,000   466   —   466   100% Trade – Refined Petroleum Products                     Panamax – Time $19,000 180 — 180 100% Handysize – Spot $28,000 264 472 736 36% Handysize – Time $18,500 2,096 — 2,096 100%       Averagetime charterrate   Time charterdays   Spot andLighteringdays Totaldays   % Timecharter Trade – U.S. Flag                   Product Carrier $39,000 510 78 588 87% ATB and Lightering Vessels $27,000 372 542 914 41% APPENDIX 5 – 2007 TCE RATES   The following table shows average estimated time charter TCE rates and associated days booked for the fourth quarter as of July 13, 2007.       Fixed Rates and Revenue Daysas of 7/13/07     Q407 Trade – Crude Oil     VLCC Average TCE Rate — Number of Revenue Days — Aframax Average TCE Rate $29,000 Number of Revenue Days 285 Panamax Average TCE Rate $28,000 Number of Revenue Days   410 Trade – Refined Petroleum Products     Panamax Average TCE Rate $19,000 Number of Revenue Days 182 Handysize Average TCE Rate $18,500 Number of Revenue Days   1,784 U.S. Flag     Product Carrier Average TCE Rate $39,500 Number of Revenue Days 613 ATB Average TCE Rate $27,500 Number of Revenue Days 268