Top Tankers NASDAQ: TOPT Industrial Sector Marine Shipping

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1 Analysts: Chase Spirito Kent Sowell Recommendation: Hold Industry favorite in growth Young, but capable management Strong demand for crude oil and petroleum products worldwide ensures maximum fleet utilization Entire fleet is comprised of doublehulled ships, a requirement of all oil tankers by 2015 TOPT has entered into a five-year profitsharing employment agreement with Glencore SA, one of the world's largest oil traders Recently acquired 4 Suezmax tankers to be delivered by early December, 2005, financed with the Company's cash reserves and secured bank credit lines Top Tankers NASDAQ: TOPT Industrial Sector Marine Shipping Date of valuation 11/28/05 Market Cap (millions) week high week low Beta Current Market Price per share: $

2 Company Profile: TOP Tankers is looking to rise through the ranks of the world's shipping companies. Operating a fleet of 12 double-hull Handymax tankers and 15 double-hull Suezmax tankers, Top Tankers transports refined petroleum products and crude oil on a time charter and spot charter basis for oil companies and oil traders. Eighteen of the Company's 27 tankers are be on time charter contracts with an average term of over three years with all but one of the time charters including profit sharing agreements. Founded in 2000 by its young CEO Evangelos Pistiolis, Top Tankers experienced exponential growth after purchasing eight Handymax and two Suezmax tankers with proceeds from the company's 2004 IPO. TOP Tankers' customers include Vitol (29% of revenue) and Glencore SA (15%). (Hoover s) Management: Title Name Age Chairman Thomas F. Jackson 56 President, CEO, and Director Evangelos J. Pistiolis 32 CFO and Director Stamatios N. Tsantanis 33 CTO, TOP Tanker Management Secretary George Goumopoulos Eirini Alexandropoulou EVP and Director Vangelis G. Ikonomou 40 COO, TOP Tanker Management Stavros Emmanuel 63 We are confident in the management team, despite the young age of its members. Each member of the team began their careers in the shipping industry in some capacity ranging from investment banking to serving in the Greek navy. In addition, each member has management experience with a variety of shipping companies in Europe and the United States allowing each of them to contribute to successful operations of Top Tankers. Performance: Purchased last year on 3/24, TOPT was added to the portfolio as a short-term play on the imbalance on demand for tankers and supply. Last year s analysts recommended holding TOPT for only 8-12 months, as we are in the 8 th month, it is apparent that the bet has not yet played out. TOPT $ $ % $ $65, $25, % 11/28/2005 3:59pm 2

3 Comparables Top Tankers is not best of breed relative to its peers. However, is the firm with the greatest potential for growth in the next 5 years (based on historical numbers). During the course of 2005, TOPT has moved with its peer group, suggesting that the industry s underperformance this year is due to macro economic factors. Many in TOPT s peer group have instituted share buybacks, which the CEO has considered dependent of course on what is available to buy and where the stock price is. TOPT FRO TK TNP Industry Market Cap: M 3.03B 3.11B M M Employees: N/A 40 5,500 N/A 490 Qtrly Rev Growth (yoy): % % % % 23.00% Revenue (ttm): M 1.72B 2.09B M M Gross Margin (ttm): 63.52% 69.13% 47.11% 59.77% 47.11% EBITDA (ttm): M 1.24B M M 99.22M Oper Margins (ttm): 32.18% 59.76% 29.16% 39.95% 25.17% Net Income (ttm): 59.94M M M M 62.51M EPS (ttm): P/E (ttm): PEG (5 yr expected): N/A N/A N/A N/A 1.72 P/S (ttm): FRO = Frontline Ltd. TK = Teekay Shipping Corp. TNP = Tsakos Energy Navigation Ltd. Industry = Shipping 3

4 Growth TOP Tankers Frontline Teekay Tsakos Energy Navigation Industry 2 Market 3 12-Month Revenue Growth 638.5% 22.4% 7.3% 23.9% 11.4% 20.7% 12-Month Net Income Growth 3,531.3% 112.8% 171.4% 88.2% 77.2% 37.7% 12-Month EPS Growth 966.7% 110.1% 166.5% 66.1% 39.9% 31.0% 12-Month Dividend Growth % (16.0%) 65.0% 328.0% 34.1% 36-Month Revenue Growth 117.2% 63.1% 48.1% % 11.0% 36-Month Net Income Growth 318.0% 281.8% 117.2% % 69.8% 36-Month EPS Growth 205.5% 269.1% 111.1% % 68.9% 36-Month Dividend Growth % (2.4%) % 8.6% Key Statistics: Market Cap (intraday): M Enterprise Value (29-Nov-05) 3 : M Trailing P/E (ttm, intraday): 5.86 Forward P/E (fye 31-Dec-06) 1 : 6.11 PEG Ratio (5 yr expected): N/A Price/Sales (ttm): 1.82 Price/Book (mrq): 1.06 Enterprise Value/Revenue (ttm) 3 : 3.21 Enterprise Value/EBITDA (ttm) 3 : Bet: TOPT with a low P/E and high dividend yield of 6.4% makes it a definite value play. Furthermore, TOPT s management is capable of making the coming quarter s earnings estimates and improving EPS. Stamatis Tsantanis, CFO, commented during their Q3 earnings conference call, we have secured approximately 66% of our estimated operating days with long-term employment contracts. At the same time, the nine Suezmaxes operating in the spot market, 4

5 together with the profit sharing component of the time charter contracts, expose approximately 64% of the company's estimated operating days for '06 to potentially higher spot rates. We feel that TOPT should be held at least until Q1 06, at that time we should reevaluate TOPT s position relative to its competitors and its growth prospects. Frankly, the upside in holding TOPT for another 4 months outweighs a sell recommendation now. Financials: Income Statement Dec 04 Dec 03 Dec 02 Revenue Cost of Goods Sold Gross Profit Gross Profit Margin 64.8% 37.7% 30.7% SG&A Expense Depreciation & Amortization Operating Income Operating Margin 39.2% 11.3% 0.9% Nonoperating Income Nonoperating Expenses Income Before Taxes Income Taxes Net Income After Taxes Continuing Operations Discontinued Operations Total Operations Total Net Income Net Profit Margin 35.0% 6.9% 1.8% Diluted EPS from Continuing Operations ($)

6 Diluted EPS from Discontinued Operations ($) Diluted EPS from Total Operations ($) Diluted EPS from Total Net Income ($) Dividends per Share Balance Sheet Dec 04 Dec 03 Dec 02 Assets Current Assets Cash Net Receivables Inventories Other Current Assets Total Current Assets Net Fixed Assets Other Noncurrent Assets Total Assets Liabilities and Shareholders' Equity Current Liabilities Accounts Payable Short-Term Debt Other Current Liabilities Total Current Liabilities Long-Term Debt Other Noncurrent Liabilities Total Liabilities

7 Shareholders' Equity Preferred Stock Equity Common Stock Equity Total Equity Shares Outstanding (mil.) Cash Flow Statement Dec 04 Dec 03 Dec 02 Net Operating Cash Flow Net Investing Cash Flow (344.9) (20.0) (18.3) Net Financing Cash Flow Net Change in Cash (1.7) Depreciation & Amortization Capital Expenditures (328.1) (19.6) (18.5) Cash Dividends Paid (2.3) (0.6) (0.8) 7

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