General Maritime Corporation Investor/Analyst Event

Transcription

1 General Maritime Corporation 2007 Investor/Analyst Event 1

2 Today s presentation and discussion will contain forward-looking statements within the meaning of the Private Securities Litigation Reform Act of These forward-looking statements are based on management's current expectations and observations. Included among the factors that, in the Company's view, could cause actual results to differ materially from the forward looking statements contained in this press release are the following: changes in demand; a material decline or prolonged weakness in rates in the tanker market; changes in production of or demand for oil and petroleum products, generally or in particular regions; greater than anticipated levels of tanker newbuilding orders or lower than anticipated rates of tanker scrapping; changes in rules and regulations applicable to the tanker industry, including, without limitation, legislation adopted by international organizations such as the International Maritime Organization and the European Union or by individual countries; actions taken by regulatory authorities; changes in trading patterns significantly impacting overall tanker tonnage requirements; changes in the typical seasonal variations in tanker charter rates; changes in the cost of other modes of oil transportation; changes in oil transportation technology; increases in costs including without limitation: crew wages, insurance, provisions, repairs and maintenance; changes in general domestic and international political conditions; changes in the condition of the Company's vessels or applicable maintenance or regulatory standards (which may affect, among other things, the Company's anticipated drydocking or maintenance and repair costs); changes in the itineraries of the Company s vessels; delays in the construction or delivery of contracted newbuildings; and other factors listed from time to time in the Company s filings with the Securities and Exchange Commission, including, without limitation, its Annual Report on Form 10-K for the year ended December 31, 2006 and its subsequent reports on Form 10-Q and Form 8-K. For further information, please refer to such filings with the Securities and Exchange Commission. The Company s ability to pay dividends in any period will depend upon factors including applicable provisions of Marshall Islands law and the final determination by the Board of Directors each quarter after its review of the Company s financial performance. The timing and amount of dividends, if any, could also be affected by factors affecting cash flows, results of operations, required capital expenditures, or reserves. As a result, the amount of dividends actually paid may vary from the amounts currently estimated. Share repurchases may be made from time to time for cash in open market transactions at prevailing market prices or in privately negotiated transactions. The timing and amount of purchases under the Company s share repurchase program will be determined by management based upon market conditions and other factors. Purchases may be made pursuant to a program adopted under Rule 10b5-1 under the Securities Exchange Act. The program does not require the Company to purchase any specific number or amount of shares and may be suspended or reinstated at any time in the Company's discretion and without notice. Repurchases will be subject to the restrictions under the Company's existing credit facility. The Board will periodically review the program. 2

3 Agenda Overview Fleet and Customers Financial Review Financial Strategy & Dividend Policy Industry & Company Outlook Summary Questions 3

4 The General Maritime Story Young company which retains its entrepreneurial spirit Origins traced to 1991 Current corporate structure formed in 1997 History of taking advantage of opportunities in the tanker industry Significant consolidation success since going public Positioned Company to effectively operate in a dynamic regulatory environment Our strategy and mission Focus on mid-sized tanker segment Run a fully integrated high quality, safe operation Achieve profitable growth through consolidation Keep management s interests aligned with shareholders 4

5 Investment Highlights High Quality Fleet Young age profile and 100% double hull Optimized Commercial Fleet Deployment 67% of fleet on long term charters, most through 2010 Moderately Leveraged 33% loan to fleet value even after returning over $1.0 billion to shareholders Yield Plus Growth Strategy $2.00 annualized dividend Experienced Financial and Operational Management Team Track record of consolidation success and value creating transactions 5

6 Our Organization Management Team Peter Georgiopoulos Chairman, CEO & President, General Maritime Corporation John Tavlarios CEO & President, General Maritime Management, LLC and Director Jeff Pribor Executive Vice President & CFO, General Maritime Corporation John Georgiopoulos Executive Vice President, CAO & Treasurer, General Maritime Corporation Peter Bell Senior Vice President Commercial Operations Milton Gonzales Senior Vice President Technical Operations Experienced Independent Board of Directors Bill Crabtree Former Chairman, Universe Tankships Rex Harrington Former Director of Shipping, Royal Bank of Scotland John Hatab Former Partner, PriceWaterhouseCoopers Steve Kaplan Principal, Oaktree Capital Management Peter Shaerf Managing Director, AMA Capital Partners 6

7 Value-Creating Transactions Since 2006 Investor Day Dynamic Shift in commercial deployment 14 of 21 vessels on time charter or time charter equivalents of 3 year duration or longer Over $184 million in contracted revenue per annum expected to cover the majority of cash outlays Took delivery of 2 Suezmax newbuildings Kara G in April 2007 and George T in August 2007 Paid one time special dividend of $15.00 per share in March 2007 Initiated new quarterly fixed dividend target $0.50/share target underpinning our yield plus growth strategy 7

8 Agenda Overview Fleet and Customers Financial Review Financial Strategy & Dividend Policy Industry & Company Outlook Summary Questions 8

9 General Maritime s Fleet Operator of one of the largest mid-sized tanker fleets in the world with 10 Aframaxes, 10 Suezmaxes and 1 Suezmax Newbuilding to be delivered 2/08 Average age of 7.5 years 100% double-hulled Total capacity of approximately 2.8 million dwt 9

10 General Maritime - Fleet Profile Vessel Type Hull Built Genmar Agamemnon Aframax DH May-1995 Genmar Ajax Aframax DH July-1996 Genmar Alexandra Aframax DH January-1992 Genmar Constantine Aframax DH October-1992 Genmar Defiance Aframax DH June-2002 Genmar Minotaur Aframax DH November-1995 Genmar Princess Aframax DH January-1991 Genmar Progress Aframax DH January-1991 Genmar Revenge Aframax DH April-1994 Genmar Strength Aframax DH January-2003 Genmar Argus Suezmax DH January-2000 Genmar Gulf Suezmax DH January-1991 Genmar Hope Suezmax DH January-1999 Genmar Horn Suezmax DH January-1999 Genmar Orion Suezmax DH January-2002 Genmar Phoenix Suezmax DH January-1999 Genmar Spyridon Suezmax DH January-2000 Genmar Harriet G Suezmax DH March-2006 Genmar Kara G Suezmax DH January-2007 Genmar George T Suezmax DH August-2007 Genmar St. Nikolas (1) Suezmax DH February-2008 (1) Projected delivery dates 10

11 Commercial Strategy Time Charter Coverage T/C coverage currently at 67% 14 vessels or vessel equivalents fixed on 3-year time charter 13 vessels under time charter 1 synthetic time charter contracted revenue for 2008 expected to be $184 million 11

12 Third Quarter 2007 Time Charter Coverage GMM Vessel's on Time Charter (T/C) PERIOD of T/C (Months) Delivery Date Redelivery Date TC Rate GENMAR AJAX / AET (tcp 01 Dec 2006) (1) 36 12/1/ /1/2009 $34,000 GENMAR ARGUS / Eiger (tcp 04 Oct 2006) (2) /6/2006 1/6/2010 $38,500 GENMAR DEFIANCE / Westport (tcp 24 Oct 2006) (1) 36 12/25/ /25/2009 $29,500 GENMAR GEORGE T / Eiger (tcp 30 May 2007) (2) 36 8/28/2007 8/28/2010 $39,000 (2) GENMAR HARRIET G / Eiger (tcp 02 Mar 2007) *** 36 4/2/2007 6/1/2010 $38,000 (2) GENMAR HOPE / Westport (tcp 20 June 2006) 36 8/13/2006 8/13/2009 $36,500 GENMAR HORN / Eiger (tcp 03 Oct 2006) (2) /23/2006 1/23/2010 $38,500 GENMAR KARA G / Eiger (tcp 02 Mar 2007) *** (2) 36 4/9/2007 6/1/2010 $38,000 GENMAR ORION / Eiger (tcp 02 Mar 2007) *** (2) 36 3/27/2007 6/1/2010 $38,000 GENMAR PHOENIX / Eiger (tcp 19 Oct 2006) (2) /1/ /1/2009 $38,500 GENMAR PRINCESS / Eiger (tcp 03 Oct 2006) (1) 36 10/24/ /24/2009 (2) GENMAR SPYRIDON / Eiger (tcp 03 Oct 2006) /13/ /13/2009 GENMAR ST.NIKOLAS / Eiger (tcp 30 May 2007) (2) (3) 2/15/2008 E 2/15/ $27,750 $38,500 $39,000 (1) Aframax vessels (2) Suezmax vessels (3) Expected Delivery Date 12

13 Blue-Chip Customer Base 13

14 Agenda Overview Fleet and Customers Financial Review Financial Strategy & Dividend Policy Industry & Company Outlook Summary Questions 14

15 Third Quarter and 9M 2007 Highlights Q Net Income of $10.9 million EPS of $0.36 basic and $0.35 diluted Nine Month 2007 Net Income of $39.4 million EPS of $1.29 basic and $1.25 diluted Nine Month 2007 Dividends Q regular dividend of $0.50 per share Q regular dividend of $0.50 per share Q regular dividend of $0.50 per share $15.00 per share special dividend paid in March

16 Strong Balance Sheet September 30, 2007 Balance Sheet Cash $32,355 Debt $545,000 (1) Net Debt 512,645 Shareholders Equity $243,112 Liquidity Position Revolving Credit Facility $900,000 Undrawn Facilities $355,000 Cash $32,355 Total Capitalization $755,757 Total Liquidity $387,355 (1) Equals total long term debt less cash 16

17 Agenda Overview Fleet and Customers Financial Review Financial Strategy & Dividend Policy Industry & Company Outlook Summary Questions 17

18 GMR Strategy - Asset Allocation GMR seeks to maximize return to shareholders by: Acquiring assets when investments meet our return criteria Deriving highest possible returns from assets by choosing a balance of time charter and spot deployment based on market conditions Selling assets when prices available exceed best available estimates of expected daily return; and Return cash to shareholders by way of dividend and share repurchase 18

19 Value Creating Transactions Special Dividends The $15.00 per share special dividend in Q provided immediate return to investors and a more efficient capital structure Simultaneous shift to fixed quarterly dividend supported valuation based on dividend and FCF yield From GMR s closing price on December 29, 2006 through the closing price on November 29, 2007 the company stock has provided a total return of close to 32% 19

20 GMR Quarterly Dividend Policy $2.00 per share annual fixed dividend target was intended to create visible and consistent dividend stream, which management believes the market welcomed The Company expects to declare dividends on a quarterly basis in February, May, August and November. The target dividend will be fixed at $0.50 per quarter or $2.00 annually Additional long term T/C coverage helps support the dividend and reduces volatility in the event of a declining market 20

21 GMR Strategy - Dividends Dividends to date Q $1.77 Q $0.84 Q $0.25 Q $2.00 Q $1.43 Q $0.66 Q $0.71 Q $0.62 Q $0.50 Q $15.00 (Special Dividend) Q $0.50 Q $0.50 Total Dividends Declared $

22 Agenda Overview Fleet and Customers Financial Review Financial Strategy & Dividend Policy Industry & Company Outlook Summary Questions 22

23 Industry Outlook Q Market performance As anticipated Q3 tanker rates were low reflecting a return to the familiar pattern of lower crude movements reflecting seasonally lower demand Negative factors included seasonally lower oil demand, production cuts, lower refinery margins and continued higher than average inventory levels Positive factors included strong continued demand for transportation of fuel from China and the US outlook for remainder of 2007 Q represents a return to a more normal seasonal pattern where tanker rates dip with oil demand, unlike 2006 where factors such as weather and an oil price contango caused Q3 to be stronger then expected Q Performance to date and outlook The end of Q3 and beginning of Q4 saw some tightening of supply/demand and higher rates October and November loadings did not yet reflect the 500,000 bbls OPEC production increase Overall OPEC was reluctant to increase production until OECD inventories decline further Beginning week of November 19 th VLCC fixings picked up to reflect greater loading in December. Rates spiked over $100,000 per day Sector rally now spreading to Suezmax and Aframax tanker segments 23

24 Industry Outlook Continued Outlook for 2008 and beyond Demand IEA maintains a forecast of 2.4% oil demand growth in 2008 up from a revised 1.5% estimate for full year Assuming no change in ton-mile patterns management expects an estimated 4-5% increase in tanker demand Supply Absent early scrapping or conversions to floating storage or to dry bulk vessels, management s estimates of crude oil tanker supply is expected to grow 7% in 2008 suggesting a base case of slightly lower rates in 2008 vs Wild card is removals including successful conversion of 45 or more single hull tankers to dry bulk vessels and floating storage. This could lead to a tighter supply/demand balance 24

25 2008 Outlook (The amounts shown will vary based on actual results) Estimated General & Administrative Expenses (1) $41.9 million in total G&A Including $10.9 million of restricted stock compensation expense Estimated Depreciation and Amortization (2) Approximately $51.2 million on an annual basis Estimated Drydock (3) Two vessels scheduled for drydock in Aframax vessels A total of 114 offhire days are estimated for 2008 Estimated Cost of $10.7 million which also include capital improvements 1. Estimated General & Administrative Expenses are based on a budget and may vary, including as a result of actual incentive compensation. Estimated Restricted Stock Compensation Expense is based on grants made through December 10, Estimated Depreciation and Amortization are based on the acquisition value of the current fleet and depreciation of estimated drydocking costs. 3. Estimated Drydocking represents budgeted drydocking expenditure based on management estimates. 25

26 2008 Estimated Breakeven Summary Free Cash Flow After Dividend (1) Free Cash Flow (1) Net Income Direct Vessel Operating Expenses (2) $ 57,230,000 $ 57,230,000 $ 57,230,000 Cash G&A (3) 30,946,000 30,946,000 30,946,000 Amortization of Stock-Based Compensation (4) ,940,000 Net Interest Expense (5) 34,000,230 34,000,230 34,000,230 Capital Expenditures (6) 10,714,000 10,714,000 - Depreciation & Amortization (7) ,239,817 Target Cash Dividend (8) 63,500, Total $ 196,390,230 $ 132,890,230 $ 184,356,047 Contracted T/C Revenues (9) (184,332,960) (184,332,960) (184,332,960) Full Fleet Operating Days (10) Spot Fleet Operating Days (10) Full Fleet Daily Break-Even $ 26,418 $ 17,876 $ 24,799 Spot Fleet Daily Break-Even 5, Free Cash flow is defined as net income plus depreciation and amortization and other non cash items consisting of amortization of stock based compensation less capital expenditures 2. Direct Vessel Operating Expenses is based on management s estimates and budgets submitted by our technical managers. We believe DVOE are best measured for comparative purposes over a 12-month period 3. Based on 2008 calendar year budget and defined as total G&A less amortization of stock based compensation less capital expenditures 4. Through December excludes any grants for Interest Expense is calculated based on management estimate of the average total debt outstanding for the year times LIBOR plus 75 basis points over the relevant period 6. Consists only of drydock costs and excluding any other capital expenditures such as vessel purchases. Drydocking represents our total drydocking budget for 2008 including capital improvements as estimated by our technical managers 7. Depreciation is based on the acquisition value of the current fleet and amortization of drydocking costs 8. Based on the Company s current quarterly dividend target of $0.50 per share 9. Based on current time charters in effect 10. Calculations are based on an average number of vessels. The amounts shown will vary based on actual results for the year 26

27 Company Outlook With strong cash flow and ample liquidity, the Company is well positioned: To execute value enhancing acquisition opportunities Act opportunistically to repurchase shares when we believe our stock is undervalued De-leverage our debt using our cash flow Continue to return value to shareholders through dividends 27

28 Agenda Overview Fleet and Customers Financial Review Financial Strategy & Dividend Policy Industry & Company Outlook Summary Questions 28

29 Investment Highlights High Quality Fleet Young age profile and 100% double hull Optimized Commercial Fleet Deployment 67% of fleet on long term charters most through 2010 Moderately Leveraged 33% loan to fleet value even after returning over $1.0 billion to shareholders Yield Plus Growth Strategy $2.00 annualized dividend Experienced Financial and Operational Management Team Track record of consolidation success and value creating transactions 29