OMI Corporation Reports Highest Ever Fourth Quarter and Fiscal Year Ne

OMI Corporation Reports Highest Ever Fourth Quarter and Fiscal Year Net Income

    Business Editors

    STAMFORD, Conn.--(BUSINESS WIRE)--Feb. 14, 2005--OMI Corporation (NYSE: OMM):

    Highlights for the Fourth Quarter of 2004

--	Highest quarterly net income ever reported; for the fourth quarter ended December 31, 2004, $108,510,000 or $1.21 basic and diluted earnings per share ("EPS") and exceeded the highest annual net income in the Company's history.
--	Net Income excluding gain on disposals of $2,426,000 was $106,084,000 (see Reconciliation of net income before non-recurring items) or $1.18 basic and diluted EPS (compared to the analyst EPS consensus of $1.12) for the quarter.
--	Net income increased $94 million or 647% over the fourth quarter last year.
--	Revenues increased $122 million or 141% over the fourth quarter last year. OMI continues to expand its fleet size through the acquisition of modern vessels. During the fourth quarter, OMI took delivery of three 2004 built product carriers under previously announced acquisition agreements.
--	40% increase in quarterly dividend from $0.05 to $0.07 per share. The Board of Directors subsequently increased the quarterly dividend to $0.08 per share in the first quarter of 2005.
--	Repurchased 6,302,000 shares of OMI common stock at an aggregate of $125,584,000.
--	Board authorized a program to repurchase of up to 4.25 million common shares from time to time.

    OMI Corporation (NYSE: OMM) a major international tanker owner and operator today reported net income of $108,510,000 or $1.21 basic and diluted EPS for the fourth quarter ended December 31, 2004. Net income for the fourth quarter ended December 31, 2003 was $14,531,000 or $0.18 basic and diluted EPS. For the year ended December 31, 2004 net income was $245,695,000 or $2.87 basic and $2.86 diluted EPS. Net income for the year ended December 31, 2003 was $76,471,000 or $0.98 basic and diluted EPS. Net income for 2004 was higher than net income reported in any of the fiscal years from the Company's inception in 1998.
    Revenue of $207,898,000 for the three months ended December 31, 2004 increased $121,722,000 or 141 percent compared to revenue of $86,176,000 for the three months ended December 31, 2003. Revenue of $564,674,000 for the year ended December 31, 2004 increased $241,521,000 or 75 percent compared to revenue of $323,153,000 for the year ended December 31, 2003.
    Craig H. Stevenson, Jr., Chairman and Chief Executive Officer of the Company commented that "this is the highest earnings ever for us in a given quarter and fiscal year, significantly exceeding previous record quarterly earnings. Rates achieved in 2004, especially in the fourth quarter, were some of the highest historically in the oil tanker industry, as a result of higher than expected demand for oil products increasing the demand for tankers. We have fixed approximately 67% of our Suezmax days for the first quarter of 2005 at an average TCE of approximately $63,000 per day, slightly above last year's average rate for the first quarter. Rates have been trending down, however, and we expect the remainder of the quarter to be lower. We have instituted new environmental initiatives, which are costly, in order to assure our operations are as high quality and environmentally friendly as our ships are. Other costs have also been rising. Nonetheless, with a 50% larger Suezmax fleet than in the first quarter of 2004, we anticipate greater earnings in the quarter than in last year's first quarter. As we look at 2005, we see continuing growth in world oil demand, which we expect to lead to a strong year overall, though with normal seasonal declines in the second and third quarters.
    "Additionally, OMI has completed the sale of our last two non-double hull vessels in January 2005; we now have an entire fleet of double hull vessels. OMI prides itself in having a modern well maintained tanker fleet. Compliance with 2003 International Maritime Organization ("IMO") regulations for the phasing out of the majority of single hull vessels by 2010 is no longer an issue to be addressed by the Company, customers or investors. OMI currently operates the youngest large fleet of double hull vessels in the world. At year end, taking into account a vessel delivered to us in early 2005 and these last dispositions the average age of OMI's fleet was 2.6 years old. "

    RECENT ACTIVITIES AND OTHER HIGHLIGHTS

Operational

-- Acquisitions:

-- In January 2005, we took delivery of the LAUREN, a 47,000 deadweight tons ("dwt") product carrier, from the shipyard. We paid cash for the vessel which is operating in the spot market.

-- In January 2005, we also agreed to time charter in two Suezmax vessels for seven years upon the vessels' deliveries from a shipyard in the second and third quarters of 2005.

-- In December 2004, we purchased a 2004 built 1B ice-class product carrier (RUBY), contracted from another owner in September. The RUBY operates in the spot market.

-- In October 2004, we took delivery of a newbuilding product carrier (JEANETTE) (included in the Athenian acquisition of July 2004). The vessel was involved in a collision shortly following delivery and was out of service until December. The JEANETTE began a short-term time charter in December and will operate in the spot market in 2005.

-- In October 2004, we took delivery from the shipyard of a 1A ice-class product carrier (GANGES). The GANGES operates in the spot market.

-- Dispositions:

-- In January 2005, we sold our last two non-double hull vessels (TANDJUNG AYU and BANDAR AYU) The vessels were built in 1993 and were operating on time charters due to expire in mid-2005. A gain of approximately $2.8 million will be recorded in the first quarter of 2005.

-- In December 2004, OMI sold its only single hull product carrier (SHANNON). The loss on the sale of approximately $1.3 million was recorded in the fourth quarter of 2004.

-- In November 2004, OMI sold the SETTEBELLO, a 1986 built single hull ultra large crude carrier, ("ULCC"). The gain on the sale of approximately $3.5 million was recorded in the fourth quarter of 2004.

-- Vessel Performance:

-- In the fourth quarter of 2004, time charter equivalent ("TCE") rates for OMI's Suezmax fleet improved significantly, 81% over the third quarter 2004 and 156% over the comparable quarter of 2003. The following table reflects the improvement in average daily TCE rates earned in the spot market by our Suezmax fleet during the 2004 quarters compared to the 2003 quarters and year-to date ("YTD") 2004 as compared to YTD 2003:

------------------------------------------------ Daily TCE Rate Percent Period 2004 2003 Increase ------------------------------------------------ YTD- Twelve Months $63,703 $33,961 88% ----------------------------------------------- Fourth Quarter 90,062 35,174 156% ----------------------------------------------- Third Quarter 49,717 19,145 160% ----------------------------------------------- Second Quarter 43,415 38,053 14% ----------------------------------------------- First Quarter 62,285 45,222 38% -----------------------------------------------

-- Expenses to operate our vessels ("vessel expenses") during the year 2004 increased modestly for our product carriers and were comparable to 2003 expenses for our Suezmax fleet. During 2005, we expect vessel expenses to accelerate based on our additional costs for our quality program and policy for environmental compliance.

Financial

-- Issuance of Secured and Unsecured Debt

-- Unsecured Convertible Notes: On December 7, 2004, we issued $250 million of convertible senior notes due 2024 ("Convertible Senior Notes"). The notes are senior unsecured obligations of OMI Corporation and bear interest at the rate of 2.875% per annum. Interest on the notes is payable on June 1 and December 1 each year beginning June 1, 2005. In general, upon conversion, the holder of each note would receive the conversion value of the note payable in cash up to the principal amount of the note, and at OMI's option the holder will receive either common stock or cash for the conversion value in excess of such principal amount.

The initial conversion ratio is 32.5355 shares of our common stock per $1,000 principal amount of notes, which is equivalent to an initial conversion price of approximately $30.74 per share or 46.5% above our stock price of $20.98 on the issue date.

-- Refinanced Bridge Loan: During November 2004, we entered into a ten-year $375 million credit facility at LIBOR plus a margin payable semi-annually. The facility refinanced the $250 million unsecured bridge loan (obtained in July 2004 to finance the initial payments for seven vessels and seven construction contracts) and amended and restated our $245 million credit facility. This facility is secured by 13 vessels; nine of which were refinanced and four vessels of which were acquired in 2004.

-- Secured Term Loan: During November 2004, OMI obtained a ten year $142 million term loan at LIBOR plus a margin payable semi-annually. This loan is secured by four vessels acquired in 2004.

-- On November 16, 2004, the Board of Directors of OMI approved an increase in our quarterly dividend from $0.05 per share to $0.07 per share and declared the $0.07 per share dividend to shareholders of record on December 22, 2004, which was paid on January 11, 2005. Additionally, on February 10, 2005, the Board of Directors of OMI approved an increase in our quarterly dividend from $0.07 per share to $0.08 per share and declared the $0.08 per share dividend to shareholders of record on March 22, 2005 which will be paid on April 12, 2005.
    MARKET OVERVIEW

    Suezmax Tanker Overview

    The tanker market was very strong in the fourth quarter of 2004, and the average TCE for Suezmax tankers in the West Africa to U.S. trade was about double that of the preceding quarter, more than double compared to the rate in the same period of last year, and the highest since the early 1970s. In addition, the average Suezmax TCE rate in 2004 was the highest since the early 1970s. This was the result of strong world oil demand due to improving world economic activity especially in the U.S., China and Southeast Asia, slower than anticipated return of nuclear plants taken off-hire for safety inspections in Japan, and the decline of the U.S. Dollar. Furthermore, the tanker market benefited from high OPEC oil production, especially from the long-haul Middle East, which replaced the loss of Iraqi oil production through a pipeline to the Mediterranean, the persistent shortfall of oil production in Venezuela and the loss of short-haul oil supply due to hurricane activity in the Gulf of Mexico. Rates increased notwithstanding an increase in the world tanker fleet. Tanker freight rates have fallen from their very high levels thus far in the first quarter of 2005, but they are still at very profitable levels.
    The average OPEC oil production in the fourth quarter of 2004 totaled about 29.8 million barrels per day ("b/d"), an average increase of 2.0 million b/d, or 7.2% compared to the same period last year. Most of OPEC's oil production growth came from the long-haul Middle East. After a reduction to its oil production quota, beginning April 1, 2004, OPEC increased its quota three times by a total of 3.5 million b/d, during the balance of 2004, to 27 million b/d (excluding Iraq). The OPEC quota increases were the result of strong world oil demand growth, relatively low oil inventories as well as tight oil markets and very high oil prices. Last December, OPEC oil producers decided to reduce their oil production by 1.0 million b/d beginning January 1, 2005, to support weakening oil prices and to prevent oil inventory build with the seasonally low oil demand second quarter in mind. However, even after the cut, which is expected to average less than 1.0 million b/d, OPEC oil production, including Iraq, in the first quarter of 2005 is expected to be at a higher rate than the same period a year ago. In their January 30, 2005 meeting, OPEC oil producers decided to rollover last December's agreement.
    World oil demand in the fourth quarter of 2004 was higher than the preceding quarter as well as substantially higher than the same period of last year. World oil demand in 2004 was about 2.8 million b/d, or 3.5% higher than in 2003. This was due to increasing world economic activity, especially in the United States, Latin America, China and Southeast Asia. World oil demand is expected to increase further in the foreseeable future but at a slower rate as measures are taken to moderate economic activity, especially in the U.S. and China as well as expected persistent high oil prices due to low spare oil production capacity and ongoing geopolitical risks.
    Total commercial crude oil and petroleum products inventories in the United States, Western Europe and Japan at the end of 2004 were about 32 million barrels, or 1.5% higher than the year earlier level, and marginally above the average of the last five years. At the same time, crude oil inventories were 1.1% higher and petroleum products inventories were marginally below the average of the last five years, respectively. Oil inventories are expected to increase early in 2005 but decrease later in the year, and by year-end be below the level prevailing at the end of 2004.
    The world tanker fleet totaled 305.7 million dwt at the end of 2004, up by 17.0 million dwt or 5.9% from the year-end 2003 level. The tanker orderbook totaled about 82.9 million dwt, or 27.1% of the existing fleet at the end of 2004. Approximately 28.2 million dwt are for delivery in 2005, 23.4 million dwt in 2006, 25.0 million dwt in 2007 and most of the balance in 2008. The tanker orderbook includes 74 Suezmaxes of about 11.7 million dwt or 29.4% of the existing internationally trading Suezmax tanker fleet.
    The accelerated phase-out of single-hull tankers due to new IMO and European Union ("EU") regulations is expected to moderate the effect of the relatively large tanker orderbook. At the end of 2004, approximately 33.3 million dwt or 10.9% of the total tanker fleet was 20 or more years old, including 11.8 million dwt or 3.9% of the fleet which was 25 or more years old. Furthermore, 12 Suezmaxes were 20 or more years old, including 4 which were 25 or more years old. Tanker sales for scrap and for Floating Production Storage Offloading ("FPSO") conversion totaled about 10.4 million dwt in 2004, including nine Suezmaxes and 11 VLCC.
    The EU adopted new tanker regulations which commenced on October 21, 2003. In response to the EU regulations, the IMO adopted new strict tanker regulations which will commence on April 5, 2005. These regulations primarily prevent single-hull tankers of 5,000 dwt and above from carrying heavy fuel oil from early April 2005, accelerate the phase-out of single-hull tankers to 2010, in line with EU rules, and force all single-hull tankers to comply with the Condition Assessment Scheme ("CAS") from the age of 15 years, commencing in 2005. Finally, tankers with only double sides or double bottoms will be allowed to operate beyond 2010, provided that these tankers were in service on July 1, 2001. Such tankers will not be allowed to operate beyond the date on which they become 25 years of age after the date of delivery.
    At the end of 2004, there were about 104.2 million dwt of tankers or 34.1% of the total tanker fleet which will be affected by these regulations.

    Product Tanker Overview

    Freight rates in the product tanker market increased substantially in 2004 and, in the fourth quarter, the average spot TCE for handysize product tankers in the Caribbean was more than 50% higher than the preceding quarter rate and the rate prevailing in the same period of last year. In addition, the average rate in 2004 was the highest level since the early 1970's. The product tanker market strength has been the result of increasing world economic activity especially in the U.S., China and Southeast Asia, and high growth in the demand for oil, notwithstanding a substantial increase of the world product tanker fleet.
    The world product tanker fleet, (which ranges from small 10,000 dwt product carriers to larger than 100,000 dwt for coated Aframax tankers) totaled about 60.0 million dwt at the end of 2004, up by about 13.4% from the year-end 2003 level. It should be noted that about 2.6 million dwt in the "oil/chemical carrier" tanker category were added to the product tanker fleet as of September 30, 2004. These tankers have been trading in the product tanker market.
    The product tanker orderbook for delivery over the next few years totaled about 27.9 million dwt, or about 46.5% of the existing product tanker fleet at the end of 2004. It should be noted that about 2.7 million dwt in the "oil/chemical carrier" tanker category were added to the product tanker orderbook as of September 30, 2004. Approximately 9.5 million dwt are for delivery in 2005, 9.5 million dwt in 2006, 7.2 million dwt in 2007 and most of the balance in 2008. At the end of 2004, approximately 11.5 million dwt or 19.2% of the existing fleet was 20 or more years old. The orderbook for handysize and handymax product tankers at the end of 2004 totaled about 12.3 million dwt or 34.3% of the existing handysize and handymax product tanker fleet.
    Total commercial inventories of oil products in the United States, Western Europe and Japan at the end of 2004 were 16 million barrels or 1.2% higher than the same time a year ago, and marginally below the average of the last five years. At the same time, inventories of middle distillates, the seasonal product, in these areas were marginally below last year but 1.1% above the last five years average. Commercial middle distillates in the United States at the end of 2004 were approximately 6.1% and 4.5% below last year and the last five years average, respectively.
    The tanker market is expected to benefit as a result of higher world oil demand due to improving world economic activity, especially in the U.S., Latin America, China and Southeast Asia, higher oil production by the long-haul Middle East OPEC members, possible disruptions due to political instability in short-haul oil producers Venezuela and Nigeria and stricter tanker regulations by IMO and the European Union.

    FINANCIAL INFORMATION

    The following table summarizes OMI Corporation's results of operations for the fourth quarter and year ended December 31, 2004 compared to the fourth quarter and year ended December 31, 2003.

RESULTS OF OPERATIONS -------------------------------

(In thousands, except per share For The Quarter For The Year data) Ended Ended (unaudited) December 31, December 31, 2004 2003 2004 2003 --------- -------- --------- --------- Voyage and time charter revenue $207,584 $86,076 $563,749 $322,928 Voyage expense 26,617 14,592 80,183 53,756 --------- -------- --------- --------- Time charter equivalent revenue 180,967 71,484 483,566 269,172 Other revenue 314 100 925 225 Vessel expenses and charter hire expense 38,734 20,654 122,797 79,451 Depreciation and amortization 16,459 12,933 56,172 50,891 General and administrative expenses 10,059 4,689 24,867 16,603 Provision for settlement and related expenses (1) - 6,000 - 6,000 Provision for impairment loss on vessels (2) - 2,770 - 2,770 (Gain) loss on disposal of vessels-net (3) (2,426) 3,585 (1,726) 14,358 --------- -------- --------- --------- Operating income 118,455 20,953 282,381 99,324 --------- -------- --------- ---------

(Loss) gain on investments (4) - - (3,098) 618 Interest expense (10,206) (6,539) (34,460) (23,854) Interest income 261 117 872 383 --------- -------- --------- --------- Net income $108,510 $14,531 $245,695 $76,471 ========= ======== ========= =========

Basic earnings per share $1.21 $0.18 $2.87 $0.98 Diluted earnings per share $1.21 $0.18 $2.86 $0.98

Weighted average shares outstanding-basic 89,684 79,913 85,712 77,934 Weighted average shares outstanding-diluted 89,815 80,122 85,839 78,182

(1) The 2003 Provision for settlement and related expenses relates to the agreement with the Department of Justice with regards to violating certain regulations. Payment was made in August 2004.

(2) The 2003 Provision for impairment losses relates to two 1981 single hull Panamax vessels.

(3) The fourth quarter of 2004 gain on disposal of vessels-net of $2,426,000 resulted primarily from the disposal of two single hull vessels, our 1986 built ULCC vessel and our 1991 built product carrier. The year to date net gain of $1,726,000 resulted from the two vessels disposed of in the fourth quarter in addition to the disposal of three single hull Panamax vessels, built 1981-1984, and the disposal of a single hull 1988 built product carrier. The fourth quarter of 2003 loss on disposal of $3,585,000 was primarily the result of the sale of a 1988 built single hull product carrier. The loss of $14,358,000 for the year ended 2003 resulted from the loss on the disposal of the product carrier in the fourth quarter, and the sale of four single hull product carriers built 1984-1991 earlier in the year.

(4) The 2004 loss on investment of $3,098,000 resulted from expenses related to the terminated Stelmar acquisition. The 2003 gain on disposal of investment relates primarily to the final settlement of accounts for an investment that was dissolved in prior years.

    RECONCILIATION OF NET INCOME BEFORE NON-RECURRING ITEMS

    The following table is a reconciliation of Net income to Net income without non-recurring items for the fourth quarter and year ended December 31, 2004 compared to the fourth quarter and year ended December 31, 2003:

For The Quarter Ended For The Year Ended December 31, December 31, (In thousands, except per share data) 2004 2003 2004 2003 -------- -------- -------- -------- Net income $108,510 $ 14,531 $245,695 $ 76,471 Add (subtract) non-recurring items: Provision for settlement loss and related expenses - 6,000 - 6,000 Provision for impairment loss on vessels - 2,770 - 2,770 (Gain) loss on disposal of assets (2,426) 3,585 (1,726) 14,358 Loss (gain) on investment - - 3,098 (618) -------- -------- -------- -------- Net income without non-recurring items $106,084 $ 26,886 $247,067 $ 98,981 ======== ======== ======== ========

Basic EPS: Net income $ 1.21 $ 0.18 $ 2.87 $ 0.98 Add (subtract) non-recurring items: Provision for settlement loss and related expenses - 0.08 - 0.08 Provision for impairment loss on vessels - 0.03 - 0.03 (Gain) loss on disposal of assets (0.03) 0.04 (0.02) 0.18 Loss (gain) on investment - - 0.04 (0.01) -------- -------- -------- -------- Basic EPS without non-recurring items $ 1.18 $ 0.33 $ 2.89 $ 1.26 ======== ======== ======== ========

Diluted EPS without non-recurring items $ 1.18 $ 0.34 $ 2.88 $ 1.27 ======== ======== ======== ========

    Net income without non-recurring items is presented to provide additional information with respect to the Company's ability to compare from period to period vessel operating revenues and expenses, and general and administrative expenses without non-recurring losses, such as the amount written off in 2004 relating to the expenses from the proposed acquisition of Stelmar, gains and losses from dispositions of vessels, impairment adjustments, and provision for settlement loss and related expenses. While net income without non-recurring items is frequently used by management as a measure of the operating performance in a particular period it is not necessarily comparable to other similarly titled captions of other companies due to differences in methods of calculations. Net income without non-recurring items should not be considered an alternative to net income or other performance measurements under generally accepted accounting principles.

    Time Charter Equivalent Revenue

    OMI operates vessels on both voyage (or "spot") charters and on time charters ("TC"). In both 2004 and 2003, the majority of our tonnage (primarily our Suezmax vessels) operated in the spot market giving us the ability to take advantage of the strong spot market. Currently 79% of our vessels dwt or 24 vessels operate in the spot market and 17 of our 41 vessels operate on time charters (see Fleet Report), five of which have profit sharing arrangements. Our time charters with profit sharing arrangements have a floor rate and profit sharing without a cap, which enables us to benefit from strong tanker markets while protecting our downside. Revenue generated by time charters gives the Company the ability to cover certain fixed charges (vessel expenses, general and administrative expenses and interest expense) during weak periods when spot rates are not as strong. Total revenue increased significantly in the fourth quarter and for the year ended December 31, 2004 compared with the same periods in 2003 due primarily to higher rates in 2004 generated by vessels operating in the spot market. (See discussion below for the fluctuation analysis of TCE revenue and the Market Overview section for explanations for the increased rates during the periods in the spot market.)
    TCE revenue comprises revenue from vessels operating on time charters and voyage revenue less voyage expenses from vessels operating in the spot market. TCE revenue is used to measure and analyze fluctuations between financial periods and as a method of equating TCE revenue generated from a voyage charter to time charter revenue. TC revenue is earned by vessels under contract for a specific period of time with duration usually greater than one year. The Company earned TCE revenue of $180,967,000 for the fourth quarter and $483,566,000 for the year ended December 31, 2004 and $71,484,000 for the fourth quarter and $269,172,000 for the year ended December 31, 2003.
    During the fourth quarter of 2004, 83 percent or $150,364,000 of our TCE revenue was earned by vessels operating on voyage charters and 17 percent or $30,603,000 of our TCE revenue was earned by vessels operating on TC.

--	TCE revenue of $150,364,000 was earned by vessels operating in the spot market during the 2004 fourth quarter compared to the $43,032,000 earned during the fourth quarter in 2003. The increase in earnings of $107,332,000 (249%) was the result of (1) 460 more operating days in 2004 for five Suezmax vessels acquired in the third quarter of 2004 (2) higher spot rates for 10 Suezmax vessels in 2004 (operated in both 2004 and 2003 periods) compared to their performance and rates achieved in the comparable fourth quarter of 2003, (3) additional TCE revenue relating to 139 operating days generated by pool members of the Gemini Tankers Suezmax pool operated by OMI which began in December 2003, (4) additional TCE revenue from 145 more operating days from four product carriers acquired in 2004 and (5) additional TCE revenue from 100 days of revenue generated in the spot market by three product carriers whose time charter contracts expired and began operating on spot charters during the quarter.
--	TCE revenue of $30,603,000 was earned by vessels on time charter during the fourth quarter of 2004 compared to $28,452,000 earned during the fourth quarter of 2003. The increase in earnings of $2,151,000 (8%) was the result of (1) 331 more operating days in 2004 for four product carriers acquired in 2004 and (2) higher time charter revenue for two product carriers with extensions at higher rates starting in 2004. Increases in TCE revenue earned were offset in part by decreases in TC revenue as a result of the expiration of four time charters in 2004 resulting in 192 less operating days in the fourth quarter (three vessels began operating on spot charters and one vessel that terminated its time charter was sold in August 2004).

    During the year ended December 31, 2004, 73 percent or $352,996,000 of our TCE revenue was earned by vessels operating on voyage charters and 27 percent or $130,570,000 of our TCE revenue was earned by vessels operating on TC.

    -- TCE revenue of $352,996,000 was earned by vessels operating in
    the spot market during the year ended December 31, 2004
    compared to $153,575,000 earned during the year ended December
    31, 2003. The increase in earnings of $199,421,000 (130%) was
    the result of (1) 1,166 more operating days in 2004 for five
    Suezmax vessels acquired in the third quarter of 2004 and two
    Suezmax vessels acquired in August 2003 (2) higher spot rates
    for 10 Suezmax vessels in 2004 compared to their performance
    and rates achieved in the comparable period in 2003, (3)
    additional TCE revenue relating to 643 operating days
    generated by pool members of the Gemini Tankers Suezmax pool
    operated by OMI beginning in December 2003, (4) additional TCE
    revenue from 145 operating days from four product carriers
    acquired in 2004 and (5) 100 additional operating days from
    three product carriers whose TC's expired and began operating
    on spot charters.

    -- TCE revenue of $130,570,000 was earned by vessels on time
    charter during the year ended December 31, 2004 compared to
    $115,597,000 earned during the year ended December 31, 2003.
    The increase in earnings of $14,973,000 (13%) was the result
    of (1) 856 more operating days in 2004 for four product
    carriers acquired in 2004, (2) higher profit sharing recorded
    on three vessels as a result of better market conditions over
    the past twelve months for product carriers and (3) higher
    time charter revenue for two product carrier extensions with
    higher rates starting in 2004. Increases in TCE revenue earned
    were offset in part by decreases in TC revenue for the
    expiration of four time charters in 2004 resulting in 261 less
    operating days in the fourth quarter (three vessels began
    operating on spot charters and one vessel that terminated its
    time charter was sold in August 2004).

    Note: For detailed information of fluctuations by vessel type, see Breakdown by Fleet sections.

    Operating Expenses

    Vessel expenses and charter hire expense increased $18,080,000 for the fourth quarter and $43,346,000 for the year ended December 31, 2004 compared to the same periods in 2003. Charter hire expense increased $13,661,000 for the fourth quarter and $37,328,000 for the year ended December 31, 2004 compared to the same periods in 2003, primarily for the charter hire expense for the two vessels that commenced operating in the Gemini Suezmax pool (see Note below for discussion of Gemini Pool). Vessel expenses increased $4,419,000 for the fourth quarter and $6,018,000 for the year ended December 31, 2004 compared to the same periods in 2003, primarily as a result of vessels acquired offset by a reduction in vessel expenses for the disposal of the older single hull vessels, which had higher operating costs than the newbuildings acquired. Compared to the same periods in 2003, depreciation and amortization expense increased $3,526,000 during the fourth quarter and increased $5,281,000 during the year ended December 31, 2004. Increases in depreciation expense in both periods resulted from the acquisition of vessels, which were offset in part by reductions to depreciation expense relating to the five vessels disposed of in 2003 and six vessels disposed of during 2004. General and administrative expenses increased $5,370,000 for the fourth quarter and $8,264,000 for the year ended December 31, 2004 compared to the same periods in 2003, primarily as a result of increases in personnel due to increased fleet size and other additional corporate requirements, expenses of the newly formed London office (commencing in August 2004) and additional professional expenses relating to Sarbanes Oxley compliance, audit and other professional services.

    Note: In December 2003, OMI began operating Gemini Tankers ("Gemini"), which is a wholly owned subsidiary of OMI. Gemini is a pool for double hull Suezmax vessels. Currently, there are 17 Suezmax vessels (15 from OMI and two from a European shipowner) operating in the pool. The earnings of the pool are allocated to the pool members using an agreed upon formula. The gross revenues of Gemini are reflected in OMI's consolidated revenues, and the charter hire expense for the two non-OMI vessels are included in OMI's consolidated charter hire expense. Since Gemini did not commence until December 2003, there was no effect on the first eleven months of 2003.

    LIQUIDITY AND CAPITAL EXPENDITURES

    Cash and cash equivalents of $41,805,000 at December 31, 2004 decreased $6,983,000 from $48,788,000 at December 31, 2003. Net cash provided by operating activities of $266,786,000 for the year ended December 31, 2004 increased $124,265,000 compared to $142,521,000 for the year ended December 31, 2003. During 2004, we made cash payments for capital expenditures (vessel acquisitions, capital improvements and construction contracts) aggregating $675,639,000 and we paid $4,087,000 in drydock costs. Also, we paid cash in aggregate amount of $141,405,000 to repurchase 7,890,300 shares of common stock, net of commissions, which included 6,302,300 shares for an aggregate of $125,584,000 acquired in the fourth quarter of 2004. We funded our capital expenditures, including our acquisitions, with operating cash flow, issuance of debt and equity. During the fourth quarter of 2004, we issued $250,000,000 in 2.875% unsecured convertible notes (40% of the proceeds were used to repurchase common stock, mentioned above), and we amended and restated our $245,000,000 credit facility with a ten year $375,000,000 credit facility, secured a ten year $142,000,000 term loan (see Recent Activities and Other Highlights) and repaid our bridge loan of $250,000,000. We have used excess proceeds from the convertible notes to make voluntary payments on our credit facilities. As of December 31, 2004, the available debt under credit facilities was $261,150,000. Additionally, we generated cash proceeds of $137,695,000 by selling 12,204,000 shares of common stock at the end of the second quarter of 2004.
    Our debt to total capitalization (debt and stockholders' equity) at December 31, 2004 was 55 percent and net debt (total debt less cash and cash equivalents) to total net capitalization (total capitalization less cash and cash equivalents) was 54 percent. As of February 11, 2005, we have approximately $410,000,000 in available liquidity (including cash and undrawn lines of credit). We expect to use cash from operations and undrawn balances available to us through our revolving credit facilities or committed bank debt to finance capital expenditures as discussed below.

    Capital Expenditures for Vessels Under Construction Contracts and Drydock

    Vessels Under Construction Contracts

    At December 31, 2004, we had commitments to take delivery of 10 product carriers; four of which are handysize ice class 1A product carriers. The contract costs for the 10 vessels aggregated $354,160,000. As of December 31, 2004, $113,901,000 in payments have been made on these contracts, $108,197,000 of which was paid in 2004. On January 4, 2005, one of the product carriers, the LAUREN, with an original contract cost of $38,700,000 was delivered and began a short-term time charter upon delivery from the shipyard. The vessel was purchased with cash and is unencumbered. Four of the remaining vessels will be delivered in 2005 and five in 2006. Two of the vessels to be delivered in 2005 will begin five year time charters upon delivery.
    As of December 31, 2004, future construction and delivery payments (before financing, if any) are as follows:

Year Payments -------------------------- -------------- 2005 $135,844 (1) 2006 104,415

-------------- Total Remaining Payments $240,259 ==============

(1) Includes payment of $18,676,000 in January 2005 for the delivery of the LAUREN.

Note: See the Fleet Report section for the expected delivery dates of the vessels.

    2005 Drydocks

    OMI evaluates certain vessels to determine if a drydock, special survey, both a drydock combined with a special survey or a postponement is appropriate for each vessel. On a regular basis we have certain vessels inspected and evaluated in anticipation of a drydock during the year. Currently, we anticipate drydocking twelve vessels, five during the first half of 2005 (three in the first quarter) and seven during the second half of 2005, for an estimated aggregate cost of $8,050,000. The vessels are expected to incur up to approximately 260 off-hire days.
    The following is a breakdown of the estimated drydock cost (in thousands) for the first half of 2005 by quarter and the second half of 2005 with allocation of off-hire days by vessel segment and charter type (spot or TC) for product carriers:

Number of Number of Number of Projected Days Days Days First Qtr. Second Qtr. Second half Costs -2005 -2005 of 2005 ------------ ----------- ------------ ------------ Crude-Suezmax Fleet - 25 75 $3,100

Clean Fleet: Products -TC 20 20 60 2,450 Products -spot 40 - 20 2,500 ------------ ----------- ------------ ------------ Total 60 45 155 $8,050 ============ =========== ============ ============
    Contracted Time Charter Revenue

    OMI has time charter contracts currently on 19 vessels, seven with profit sharing arrangements (two contracts with profit sharing arrangements will not begin until such vessels are delivered from the shipyard in 2005) that expire at various anniversary dates related to the initial contract or renewal dates to August 2010. The contracted TC revenue schedule below does not include any estimates for profit sharing in the future periods; however, profit sharing of $10.4 million earned by five vessels during the year ended 2004 is included. We have reduced future contracted revenue for any estimated off-hire days relating to drydocks and for the sale of two product carriers sold in January 2005 that had April and July 2005 expiration dates.
    The following table reflects our actual results of 2004 and current contracted time charter revenue through 2009:

Actual 2004 2005 2006 2007 2008 2009 ------- ------ ------ ------ ------ ------ (In millions) TC Revenue $130.6 $81.5 $56.6 $38.4 $26.7 $13.9 Number of Vessels (a) 21(b) 15(c) 8(d) 7(e) 5(f) 2(g)

(a) Number of vessels at the end of each year.

(b) 25 vessels operated on time charters during 2004; four vessels began contracts upon delivery of the vessel in 2004, four vessels began new or renewal contracts and five vessels completed time charter contracts during the year.

(c) 23 vessels will operate on time charters during 2005, including two vessels that will begin time charters upon delivery, one TC contract renewal (contracted in 2004) and assuming no other extensions, 8 vessels complete time charters.

(d) 15 vessels will operate on time charters during 2006; assuming no extensions, 7 vessels complete time charters.

(e) 8 vessels will operate on time charters in 2007; assuming no extension, one vessel will complete its time charter.

(f) 7 vessels will operate on time charters in 2008; 2 vessels complete time charters.

(g) 5 vessels will operate on time charters in 2009; 3 vessels complete time charters. The remaining two charters expire in 2010.

    ABOUT OMI

    OMI is a leading seaborne transporter of crude oil and refined petroleum products operating in the international shipping markets. We believe our modern fleet of 41 vessels (including the product carrier delivered on January 4, 2005 and excluding the two handysize crude oil tankers sold in January 2005) is one of the youngest in the world, with an average age of approximately 2.6 years, (see note (1) below) which is significantly lower than the industry average. Our customers include many of the world's largest commercial and government owned oil companies and oil trading companies.

    OMI trades on the New York Stock Exchange under the symbol "OMM".

    EARNINGS CONFERENCE CALL

    OMI Corporation will hold an earnings presentation on Tuesday, February 15, 2005 at 8:30 a.m. (eastern time). The presentation will be simultaneously webcast and will be available on the Company's website, http://www.omicorp.com. A replay of the call will be available at 11:30 a.m. on February 15, 2005 at (888) 203-1112 for North America and (719) 457-0820 for International callers (Pass code 2670042).

(1) All averages referring to vessel age in this release are weighted averages based on deadweight tons ("dwt") and are calculated as of December 31, 2004, including the LAUREN, delivered January 4, 2005 and excluding the BANDAR AYU and TANDJUNG AYU sold in January 2005. Dwt, expressed in metric tons each of which is equivalent to 1000 kilograms, refers to the total weight a vessel can carry when loaded to a particular load line. Unless otherwise indicated, when we refer to our fleet of 41 vessels, we include two Suezmax tankers "chartered-in" to our fleet under long-term time charters.
    OTHER FINANCIAL INFORMATION

    CONDENSED BALANCE SHEETS

    The following are OMI's Condensed Balance Sheets as of December 31, 2004 and December 31, 2003:

CONDENSED BALANCE SHEETS December 31, December 31, (In thousands) 2004 2003 ------------- -----------

Cash and cash equivalents $41,805 $48,788 Vessel held for sale (1) - 16,514 Other current assets 87,009 46,006 Vessels and other property-net 1,487,598 991,173 Construction in progress (newbuildings) 116,895 31,584 Other assets 37,699 19,755 ------------- ----------- Total assets $1,771,006 $1,153,820 ============= ===========

Current portion of long-term debt (2) $33,200 $21,369 Other current liabilities 56,787 41,171 Long-term debt (2) 907,236 543,503 Other liabilities 6,381 10,013 Total stockholders' equity 767,402 537,764 ------------- ----------- Total liabilities and stockholders' equity $1,771,006 $1,153,820 ============= ===========

(1) The SETTEBELLO was sold in November 2004.

(2) As of December 31, 2004, the available debt under credit facilities was $261,150,000. As of February 11, 2005, the available debt under credit facilities was $346,629,000.

    CONDENSED CASH FLOW

    The following are OMI's Condensed Cash Flows for the year ended December 31, 2004 and 2003:

CONDENSED CASH FLOWS ------------------------------------- (In thousands) For The Years Ended December 31, 2004 2003 Change ------------ --------- --------- Provided (used) by: Operating Activities $266,786 $142,521 $124,265 Investing Activities (622,651) (184,651) (438,000) Financing Activities 348,882 50,028 298,854 ------------ --------- --------- Net (Decrease) Increase in Cash and Cash Equivalents (6,983) 7,898 (14,881) Cash and Cash Equivalents at the Beginning of the Year 48,788 40,890 7,898 ------------ --------- --------- Cash and Cash Equivalents at the End of the Year $41,805 $48,788 $(6,983) ============ ========= =========

    RESULTS BY FLEET

    The following discussion of Vessel Operating Income (TCE revenue less vessel expenses, charter hire expense and depreciation and amortization) for the crude and clean segments excludes (Gain) loss on disposal of vessels-net and General and administrative expenses.
    Crude Oil Fleet-Vessel Operating Income increased $84,318,000 for the fourth quarter and $159,995,000 for the year ended December 31, 2004 over the comparable periods in 2003. The net increase in Vessel Operating Income during the 2004 periods was primarily attributable to increases in the Suezmax TCE revenue resulting from improved spot rates and increased earnings for the five Suezmaxes delivered in July and August of 2004 and two in August of 2003.

BREAKDOWN BY FLEET ---------------------------------------------------------------------- (In thousands, except daily rates & expenses, number of vessels and operating days) (unaudited) For The Quarter Ended For The Year Ended December 31, December 31, CRUDE FLEET: 2004 2003 2004 2003 --------- -------- --------- --------- Suezmaxes: TCE revenue (1), (2) $140,758 $33,943 $319,247 $107,928 Vessel expenses 6,140 3,802 18,454 12,571 Charter hire expense 20,984 5,972 59,496 18,587 Depreciation and amortization 7,964 4,425 23,393 15,076 --------- -------- --------- --------- Vessel Operating Income $105,670 $19,744 $217,904 $61,694 ========= ======== ========= ========= Average daily TCE $90,062 $35,174 $63,703 $33,961 Average daily vessel expense $5,134 $5,166 $5,092 $5,125

Average number of OMI vessels for the period * (3) 15.0 10.0 11.9 8.7 Number of OMI TCE revenue days 1,379 920 4,324 3,133 Number of pool member TCE revenue days (4) 184 45 687 45

Handysize Crude Oil Carriers-on time charter (5): TCE revenue $2,981 $2,988 $11,924 $11,828 Vessel expenses 702 534 2,542 2,242 Depreciation and amortization 714 714 2,857 2,856 --------- -------- --------- --------- Vessel Operating Income $1,565 $1,740 $6,525 $6,730 ========= ======== ========= =========

Average daily TCE $16,202 $16,238 $16,290 $16,193 Average daily vessel expense $3,815 $3,424 $3,473 $3,072

Average number of vessels for the period 2 2 2 2 Number of TCE revenue days 184 184 732 730

Other Crude Carriers Sold in 2004 (6): TCE revenue $1,655 $6,583 $21,187 $25,710 Vessel expenses 255 2,114 5,131 8,611 Depreciation and amortization - 1,636 2,426 7,459 --------- -------- --------- --------- Vessel Operating Income $1,400 $2,833 $13,630 $9,640 ========= ======== ========= =========

Number of TCE revenue days 25 92 782 365

Total Vessel Operating Income $108,635 $24,317 $238,059 $78,064 ========= ======== ========= =========

Note: Average daily vessel expenses are computed using the number of days in the period which OMI owned the vessel. Number of operating or TCE revenue days used to compute Average daily TCE includes waiting days and is reduced only for the days the vessels are out of service due to drydock.

* includes two vessels chartered -in during the periods shown.

(1) Consistent with general practice in the tanker shipping industry, we use TCE revenue (defined as voyage and time charter revenues less voyage expenses) as a measure of equating revenue generated from a voyage charter to revenue generated from a time charter, which assists us in making operating decisions about the deployment of our vessels and their performance. Voyage expenses comprise all expenses relating to particular voyages, including bunker fuel expenses, port fees, canal tolls and brokerage commissions. Under time-charter contracts the charterer pays the voyage expenses, whereas under voyage charter contracts the shipowner pays the voyage expenses. TCE revenues, a non-GAAP measure, eliminates this distinction and provides more meaningful information to us than voyage revenues, the most directly comparable GAAP measure. TCE revenues are also widely used by investors and analysts in the tanker shipping industry for comparing financial performance between companies and to industry averages.

(2) TCE revenue and expenses includes revenue and expense generated by the Gemini pool. The Suezmax pool began December 2003 and includes our 15 Suezmaxes and two Suezmaxes owned by another pool member.

(3) In July and August 2004, three 2003 built and two 2004 built Suezmax vessels were acquired.

(4) Number of TCE revenue days for the two Suezmaxes owned by another pool member.

(5) In January 2005, the two handysize crude oil carriers were sold.

(6) During the fourth quarter 2004, our ULCC vessel was sold. Our three Panamax vessels were disposed of in the second and third quarters of 2004.

    Clean Fleet- Vessel Operating Income increased $2,666,000 for the fourth quarter and $6,342,000 for the year ended December 31, 2004 over the comparable periods in 2003. Increases in Vessel Operating Income in 2004 were attributable to the increases during the year ended 2004 for four product carriers acquired in 2003 and increases in both the fourth quarter and year ended 2004 for the seven product carriers acquired in 2004. Additionally, increases in profit sharing for the year ended 2004 for three of the five vessels that earned profit sharing in both 2003 and 2004 also attributed to increased Vessel Operating Income. Increases were offset by decreases in earnings for the five single hull product carriers that were disposed of in 2003 and two in 2004.

BREAKDOWN BY FLEET ------------------ (In thousands, except daily rates & expenses, number of vessels and operating days)

(unaudited) For The Quarter Ended For The Year Ended December 31, December 31, CLEAN FLEET: 2004 2003 2004 2003 -------- -------- --------- --------- TCE Revenue (1): Products-on time charter (2) $27,622 $25,464 $118,646 $103,769 Products-on spot 7,952 2,506 12,563 19,938 -------- ------------------- --------- Total TCE Revenue 35,574 27,970 131,209 123,707 Vessel expenses 11,668 8,033 37,026 33,801 Charter hire expense - 323 - 4,081 Depreciation and amortization 7,689 6,063 27,134 25,118 -------- -------- --------- --------- Vessel Operating Income $16,217 $13,551 $67,049 $60,707 ======== ======== ========= =========

Average daily vessel expense (3) $5,296 $4,188 $4,503 $4,260 Average number of vessels for the period (4)* 23.9 20.8 22.2 21.7

Products-on time charter: Average daily TCE $14,637 $14,386 $15,868 $15,572 Number of TCE revenue days 1,887 1,770 7,477 6,664

Products-on spot: Average daily TCE $28,098 $14,744 $22,555 $12,913 Number of TCE revenue days 283 170 557 1,544

Note: Average daily vessel expenses are computed using the number of days in the period which OMI owned the vessel. Number of operating or TCE revenue days used to compute Average daily TCE includes waiting days and is reduced only for the days the vessels are out of service due to drydock.

(1) Consistent with general practice in the tanker shipping industry, we use TCE revenue (defined as voyage and time charter revenues less voyage expenses) as a measure of equating revenue generated from a voyage charter to revenue generated from a time charter, which assists us in making operating decisions about the deployment of our vessels and their performance. Voyage expenses comprise all expenses relating to particular voyages, including bunker furl expenses, port fees, canal tolls and brokerage commissions. Under time-charter contracts the charterer pays the voyage expenses, whereas under voyage charter contracts the shipowner pays the voyage expenses. TCE revenues, a non-GAAP measure, eliminates this distinction and provides more meaningful information to us than voyage revenues, the most directly comparable GAAP measure. TCE revenues are also widely used by investors and analysts in the tanker shipping industry for comparing financial performance between companies and to industry averages.

(2) During the year ended December 31, 2004 OMI recognized profit sharing revenue of approximately $10,447,000 compared to $8,431,000 for the year ended December 31, 2003.

(3) During the year ended December 31, 2004, $375,000 in expense was excluded from daily vessel expenses because it relates to the settlement of a claim from 2002.

(4) In February, April, July, October and December 2004, four handysize and three handymax product carriers were acquired. In January and March of 2003, two handymax product carriers were acquired. In April and July of 2003, two Panamax product carriers were acquired. During 2004, two vessels were sold, one in the fourth quarter and one in the third quarter. During 2003, three vessels were sold in the fourth quarter and two vessels were sold in the second quarter.

    FLEET REPORT

    Our fleet is concentrated primarily into two vessel types, Suezmax tankers, which generally carry crude oil from areas of oil production to refinery areas, and product carriers ("clean" vessels), which generally carry refined petroleum products (such as gasoline and aviation fuel) from refineries to distribution areas. Our fleet currently comprises 41 vessels aggregating approximately 3.5 million dwt, (including one product carrier delivered in January 2005 designated as "(A)" in the table below and excluding the two product carriers disposed of in January 2005) consisting of 15 Suezmaxes, 24 handysize and handymax product carriers and two Panamax product carriers. Currently there are two vessels chartered-in: the OLIVER JACOB, whose charter expires June 2010 and the MAX JACOB, whose charter expires December 2006. However, we have a commitment to charter-in two additional vessels, beginning in the second half of 2005.
    The following table of OMI's Fleet includes, wholly owned vessels, chartered-in vessels (designated "(B)" in the table) and vessels to be acquired:

Name of Type of Ice Year Charter Vessel Vessel Class Built Hull(1) Dwt Expiration ------------ ------------ ----- ----- ------- --- ---------- CRUDE OIL FLEET: ---------------- ARLENE Suezmax 2003 DH 165,293 SPOT INGEBORG Suezmax 2003 DH 165,293 SPOT SOMJIN Suezmax 2001 DH 160,183 SPOT HUDSON Suezmax 2000 DH 159,999 SPOT POTOMAC Suezmax 2000 DH 159,999 SPOT DELAWARE Suezmax 2002 DH 159,452 SPOT DAKOTA Suezmax 2002 DH 159,435 SPOT ADAIR Suezmax 2003 DH 159,199 SPOT ANGELICA Suezmax 2004 DH 159,106 SPOT JANET Suezmax 2004 DH 159,100 SPOT SACRAMENTO Suezmax 1998 DH 157,411 SPOT PECOS Suezmax 1998 DH 157,406 SPOT SABINE Suezmax 1998 DH 157,332 SPOT OLIVER JACOB (B) Suezmax 1999 DH 157,327 SPOT MAX JACOB (B) Suezmax 2000 DH 157,327 SPOT ---------- 2,393,862 ---------- CLEAN FLEET: ---------------------- OTTAWA Panamax 2003 DH 70,297 Apr-08 TAMAR Panamax 2003 DH 70,362 Jul-08 NECHES Handymax 2000 DH 47,052 Oct-07 SAN JACINTO Handymax 2002 DH 47,038 Mar-05 MOSELLE Handymax 2003 DH 47,037 Feb-06 GUADALUPE Handymax 2000 DH 47,037 SPOT AMAZON Handymax 2002 DH 47,037 SPOT ROSETTA Handymax 2003 DH 47,015 Mar-06 LAUREN (A) Handymax 2005 DH 46,955 SPOT JEANETTE Handymax 2004 DH 46,955 SPOT HORIZON Handymax 2004 DH 46,955 SPOT ORONTES Handysize 1B 2002 DH 37,383 Mar-06 OHIO Handysize 1B 2001 DH 37,278 Dec-05 GARONNE Handysize 1A 2004 DH 37,278 Apr-09(P) GANGES Handysize 1A 2004 DH 37,178 SPOT RUBY Handysize 1B 2004 DH 37,384 SPOT ASHLEY Handysize 1B 2001 DH 37,270 SPOT MARNE Handysize 1B 2001 DH 37,230 SPOT LOIRE Handysize 1A 2004 DH 37,106 Feb-09(P) SAONE Handysize 1A 2004 DH 36,986 Jul-09(P) TRINITY Handysize 2000 DH 35,834 Oct-06 MADISON Handysize 2000 DH 35,828 Sep-06 RHONE Handysize 2000 DH 35,775 Apr-05 CHARENTE Handysize 2001 DH 35,751 Sep-06(P) ISERE Handysize 1999 DH 35,438 Sep-06(P) SEINE Handysize 1999 DH 35,407 Jul-05 ---------- 1,112,866 ---------- Total Current Fleet 3,506,728 ---------- (1) "DH" is double hull.

(A) Vessel acquired in January 2005.

(B) Chartered -in vessel.

(P) Time charters with profit sharing. (SEINE and RHONE received profit sharing in 2004; however, the 2004 time charter extensions were renewed at higher rates with no profit sharing)

    Currently, we have the following 9 product carriers to be delivered:

Vessels to be Acquired: Name of Type of Ice Date To Be Charter Vessel Vessel Class Delivered Hull(1) Dwt Expiration ---------------- ------- ----- --------- ------ -------- ----------

Vessels Under Construction:

BRAZOS Handymax Mar-05 DH 47,000 SPOT FOX Handysize 1A May-05 DH 37,000 Jun-10(P) THAMES Handymax 1A Aug-05 DH 47,000 SPOT TEVERE Handysize 1A Aug-05 DH 37,000 Aug-10(P) WABASH Handymax Feb-06 DH 47,000 SPOT KANSAS Handymax Mar-06 DH 47,000 SPOT RHINE Handysize 1A Mar-06 DH 37,000 SPOT REPUBLICAN Handymax Apr-06 DH 47,000 SPOT PLATTE Handymax May-06 DH 47,000 SPOT ---------- Total Vessels Under Construction 393,000 ---------- Total with Vessels to be Acquired 3,899,728 ==========

(1) "DH" is double hull.

(P) Time charters with profit sharing.

    FORWARD LOOKING INFORMATION

    This release contains forward-looking statements within the meaning of Section 27A of the Securities Act of 1933, as amended, and Section 21E of the Securities Exchange Act of 1934, as amended, and are intended to be covered by the safe harbor provided for under these sections. Wherever we use the words "believes," "estimates," "expects," "plan" "anticipates" and similar expressions identify forward-looking statements. Our forward-looking statements sometimes include, without limitation: management's current views with respect to certain future events and performance, estimates of future earnings and cash flows and the sensitivity of earnings and cash flows to charter rates; estimates of when new vessels will be delivered by shipyards to the Company and when they may be chartered by customers; estimates of when vessels may be contracted for sale and delivered to buyers; estimates of when laws, regulations or commercial decisions may remove older vessels from markets or enhance the value or earnings of double hulled vessels; statements as to the projected development of the Company's strategy and how it may act to implement its strategy; estimates of future costs and other liabilities for certain environmental matters and investigations and the expectations concerning insurance coverage therefore; estimates relating to expectations in world economic activity, growth in the demand for crude oil and petroleum products and their affect upon tanker markets; estimates of the number of drydockings of vessels, their costs and the number of related offhire days; estimates of capital requirements and the sources of the funding and other factors discussed in OMI's filings to the SEC from time to time.
    Where we express an expectation or belief as to future events or results, such expectation or belief is expressed in good faith and believed to have a reasonable basis. However, our forward-looking statements are subject to risks, uncertainties, and other factors, which could cause actual results to differ materially from future results expressed, projected, or implied by those forward-looking statements. Such risks include, but are not limited to, supply of tankers, demand for their use, world economic activity, breakdown of vessels and resultant time out of service as well as repair cost, availability and cost of insurance, governmental regulation, customer preferences and availability and cost of financing.
    All subsequent written and oral forward-looking statements attributable to persons acting on our behalf are expressly qualified in their entirety by the cautionary statements. We disclaim any intent or obligation to update publicly any forward-looking statements, whether as a result of new information, future events or otherwise, except as may be required under applicable securities laws.

--30--MW/ny*

CONTACT: OMI Corporation Fredric London, 203-602-6700

KEYWORD: CONNECTICUT INDUSTRY KEYWORD: OIL/GAS ENERGY TRANSPORTATION MANUFACTURING EARNINGS CONFERENCE CALLS SOURCE: OMI Corporation

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