Company PresentationJune 2020
American Shipping Company ASA
Important information
This Company Presentation is current as of June 2020. Nothing herein shall create any implication that
there has been no change in the affairs of American Shipping Company ASA ("AMSC" or the
"Company") since such date. This Company Presentation contains forward-looking statements relating
to the Company's business, the Company's prospects, potential future performance and demand for
the Company's assets, the Jones Act tanker market and other forward-looking statements. Forward-
looking statements concern future circumstances and results and other statements that are not
historical facts, sometimes identified by the words "believes", "expects", "predicts", "intends", "projects",
"plans", "estimates", "aims", "foresees", "anticipates", "targets", and similar expressions. The forward-
looking statements contained in this Company Presentation, including assumptions, opinions and views
of the Company or cited from third party sources, are solely opinions and forecasts which are subject to
risks, uncertainties and other factors that may cause actual events to differ materially from any
anticipated development.
2
Table of contents
AMSC FINANCIAL OVERVIEW2
MARKET OVERVIEW3
APPENDIXA
COMPANY OVERVIEW1
4
Introduction to AMSC Fleet overview
* Market cap. based on closing share price of NOK 24.00 per June 2st, 2020
▪ Established in 2005
▪ Oslo listed with market capitalization of USD ~150m*
o OSE ticker: AMSC
o U.S. OTC ticker: ASCJF
o Bond ticker: AMTI01
▪ Pure play Jones Act tanker owner with a modern tanker fleet
▪ Long-term bareboat contracts generate stable, predictable cash flow
▪ Fleet well positioned to reap upside in a rising Jones Act tanker market
▪ Solid balance sheet with no debt maturities before 2022
# Vessel Design Type Built
1 Overseas Houston Veteran Class MT 46 MR 2007
2 Overseas Long Beach Veteran Class MT 46 MR 2007
3 Overseas Los Angeles Veteran Class MT 46 MR 2007
4 Overseas New York Veteran Class MT 46 MR 2008
5 Overseas Texas City Veteran Class MT 46 MR 2008
6 Overseas Boston Veteran Class MT 46 MR 2009
7 Overseas Nikiski Veteran Class MT 46 MR 2009
8 Overseas Martinez Veteran Class MT 46 MR 2010
9 Overseas Anacortes Veteran Class MT 46 MR 2010
10 Overseas Tampa Veteran Class MT 46 Shuttle tanker 2011
American Shipping Company (AMSC)
Charters
include
S&P
rating
A+
A-
AA-
BBB+
BBB-
TC
TC
TC
TC
TC
TC
TC
TC
TC
TC
Firm BBC with Evergreen Extensions
BBC exp. Dec 2022
BBC exp. Dec 2022
BBC exp. Dec 2022
BBC exp. Dec 2022
BBC exp. Dec 2022
BBC exp. Dec 2023
BBC exp. Dec 2023
BBC exp. Dec 2023
BBC exp. Dec 2023
BBC Options
BBC Options
BBC Options
BBC Options
BBC Options
BBC Options
BBC Options
BBC Options
BBC Options
OptionsBBC exp. Jun 2025
Variety of TC Durations
Bareboat charter to OSGAmerican Shipping Company OSG time charters to blue chip end users
Long term contracts returning stable cash flow
5
Houston
Long Beach
Los Angeles
New York
Texas City
Boston
Nikiski
Martinez
Anacortes
Tampa
Long term charters with evergreen extension options offers AMSC downside protection with upside potential
through a profit share mechanism with OSG
Normalized EBITDA (USD millions) Normalized EBITDA per quarter (USD millions)
6
▪ Normalized EBITDA of USD 22.2 million every quarter is mainly based on contracted bareboat charter hire
▪ USD 1 million is repayments from OSG on a deferred payment obligation
85 85 85 84 85
3 4 411 10
0
10
20
30
40
50
60
70
80
90
100
20182015 20172016
4 4
2019
DPOProfit Share Reported EBITDA
21 21 21 21 21 21 22 21
0
2
4
6
8
10
12
14
16
18
20
22
24
Q2 18
1 1
Q1 18 Q4 18
1
Q3 18
1 1
Q1 19
1
Q2 19
1
Q3 19
1
Q4 19
Reported EBITDADPO
History of stable and predictable EBITDA
Diversified business across multiple segments
OSG - leading Jones Act operator and strong counterpart
1923
10
22
2
4
4
0
5
10
15
20
25
AMSCowned MRs
OSG ownedMRs
ATBs LighteringATBs
MSPtankers
ATCTankers
Total OSGcontrolled
# v
essels
7
▪ Q1 2020 demonstrated substantially improved revenue and
EBITDA, which is expected to continue for the remainder of the
year
OSG financial overview
OSG is a well capitalized and strong counterparty with a diversified U.S. Flag and Jones Act tanker operation
▪ OSG’s business is spanning across multiple Jones Act tanker and ATB segments as well as US Flag and Alaska crude tankers
▪ Overall diversified business with strong cash flow generation expected for 2020, as more than 90% of fleet has TC contract cover for the year to high credit quality end users
▪ AMSC’s 10 vessels are a core part of OSG’s Jones Act tanker fleet accounting for 50% of revenue
Source: OSG Q1 2020 earnings presentation
Breakdown of OSG’s fleet
Jones Act tanker & ATB ownership based on carrying capacity
8
Source: Navigistics’ Wilson Gillette Report and AMSC AnalysisNote: Measured as carrying capacity by barrels and excludes 11 large Alaska Crude Tankers, but includes 2x newbuild ATS for delivery in Q2 and Q4 2020
AMSC fleet
AMSC fleet is a major component of the Jones Act tanker fleet
0%
5%
10%
15%
20%
25%
OSG Kinder Morgan Crowley Seacor US Shipping Bouchard Kirby Moran Genesis Keystone Reinauer
AMSC enjoys a key position in the
Jones Act tanker market with a fleet
which represents ~28% of all modern
tanker below 20 years (36 in total)
AMSC has the most cost-efficient fleet …
Strong competitive position reduces re-chartering risk
Notes: 1) Based on Philly Tankers. 2) Based on newbuild cost for the tankers delivered to American Petroleum Tankers. 3) Based on total consideration for 9 vessels, including additional
expenses incurred by Kinder Morgan for taking delivery of newbuilds. 4) Based on average price for 4 vessels.
Source: Company materials
Newbuild delivered costs 2015-2017
S&P transaction values 2013-2015
9
…due to substantially lower delivered cost
Annual bareboat costs given various total capital IRRs with
newbuild cost @ USD 134m and USD 150m
135
130 3)
107
142 4
157
1341) 1342)
150
▪ AMSC has an average delivered cost of USD107m per vessel
▪ Considerable lower than its peers which have either built or bought vessel at prices ranging from USD130-157m
▪ Current estimated newbuild cost at Philly or NASSCO would be around USD150m assuming an order for multiple vessels, with earliest delivery in 2025
▪ AMSC’s bareboat rate reflects the low delivered cost
▪ Provides AMSC with the lowest bareboat breakeven levels in the modern Jones Act tanker fleet
▪ Current average bareboat rate of $24,050 per day represents at least $10,000 per day cost advantage compared to competitors
Estimated newbuild delivered cost in 2025
Table of contents
AMSC FINANCIAL OVERVIEW2
MARKET OVERVIEW3
APPENDIXA
COMPANY OVERVIEW1
All debt is fully supported by entire AMSC business
11
ASC Leasing
I
ASC Leasing
II
ASC Leasing
III
ASC Leasing
IV
ASC Leasing
V
ASC Leasing
VI
ASC Leasing
VII
ASC Leasing
IX
Overseas
Houston
Overseas
Long Beach
Overseas
Los Angeles
Overseas
New York
Overseas
Texas City
Overseas
Boston
Overseas
Nikiski
Overseas
Anacortes
American Shipping
Corporation
CIT
FacilityEuropean Facility
American Shipping
Company ASA
American Tanker
Holding Company
American Tanker IncUSD220m Senior
Unsecured Bond
ASC Leasing
VIII
Overseas
Martinez
ASC Leasing
X
Overseas
Tampa
U.S. Facility
Guarantors
Year End 2019 debt structure Current debt structure
Enhanced debt structure and reduced debt service
12
69
237
46
220Bond
Q4 2019
Tampa Facility
BNP Facility
Martinez Facility
66
132
143
220
Est Q2 2020
Tampa Facility
NEW European Facility
with ~25m undrawn RCF
NEW U.S. Facility
AMSC successfully closed its bank debt refinancing in April 2020 at much improved terms and increased flexibility
Libor swapped for 5 years at an average rate of 0.49% for USD 220 million of the bank debt
FRN 9.25%
L+3.95%
L+3.95%
L+2.90%
FRN 9.25%
L+3.25%
L+3.95%
L+2.70%
Total debt USD 572m
Annual debt service USD 68mTotal debt USD 561m
Annual debt service ~USD 60m
Bond
(USD ~11m lower)
(USD ~8m lower)
0
200
400
600
800
1000
1200
2020 2021 2022 2023 2024 2025
Secured Bank Debt Unsecured Bond Debt Replacement cost parity
Delevering through debt amortization
13*USD 150m replacement cost per vessel, 30 years useful economic life, depreciation to 0, and 11 years average fleet age in 2020
Ample headroom between total debt and replacement cost parity value of fleet
Year-end
USDm
Debt / EBITDA (x) EBITDA / interest (x)
FFO / debt (%)
Improved credit metrics
14
7.9x 7.8x
7.4x7.1x
6.7x6.4x
5.8x
0.0x
1.0x
2.0x
3.0x
4.0x
5.0x
6.0x
7.0x
8.0x
9.0x
2015 2016 2017 2018 2019 2020E 2021E
1.8x
2.3x
1.9x2.0x 2.0x
2.7x2.8x
0.0x
0.5x
1.0x
1.5x
2.0x
2.5x
3.0x
2015 2016 2017 2018 2019 2020E 2021E
6%
7%6%
7% 7%
10%
11%
0%
2%
4%
6%
8%
10%
12%
2015 2016 2017 2018 2019 2020E 2021E
Notes: Calculations assume USD 25m undrawn RCF capacity. Bank debt interest pro-forma for refinancing calculated assuming LIBOR = 0.493% (agreed swap rate for USD ~220m of the outstanding bank debt)
for all bank debt. FFO defined as EBITDA less interest expense. Source: Company
Track record of delevering and estimated improving credit metrics going forward –
impact of bank refinancing only from 2020 onwards
Illustrative cash flow waterfall
15
Pro-forma post bank refinancing
TTM (1Q20)
88
4
89
2029
3
28
20
20
27
13
20
0
10
20
30
40
50
60
70
80
90
100
TT
M F
ixe
d B
BC
Re
ven
ue
TT
M D
efe
rre
d C
ha
rte
r H
ire
(DP
O) TT
M S
G&
A
TT
M N
orm
aliz
ed E
BIT
DA
TT
M B
ank D
ebt
Am
ort
iza
tio
n
TT
M N
et
Inte
rest E
xp
en
se
(excl. b
on
d)
TT
M B
ond
Co
upo
n
TT
M F
ree
Ca
sh
Flo
w
Ba
nk D
ebt
Am
ort
iza
tio
n
Ba
nk I
nte
rest
Bo
nd
Co
upo
n
Fre
e C
ash
Flo
w
US
Dm
▪ Bareboat charters and DPO (less SG&A) provides a comfortable cash flow for debt service
- Stable, low risk from fully
chartered fleet
▪ Figures pro-forma for the bank refinancing are based on a full year of debt service following the refinancing, and assumes that the RCF is fully drawn
Note: Cash flow illustration excludes profit share. Bank debt interest pro-forma for refinancing calculated assuming LIBOR = 0.493% (agreed swap rate for USD ~220m of the outstanding bank debt) for all bank
debt, and USD 25m RCF capacity undrawn. Source: Company
Bank debt refinancing increases free cash flow substantially and allows AMSC to service Bond Coupon with ease
Simplified cash flow waterfall TTM and pro-forma for recent bank debt refinancing
Solid market
fundamentals
Credit metrics
Business model
providing stability and
long-term visibility
Largest listed pure play
Jones Act tanker owner –
with strong revenue
backlog
Investment highlights: Q1 2020 vs Q1 2017
16
▪ Fleet of 9x MR tankers + 1x shuttle tanker, operating in the US Jones Act market
▪ Average age of 8.4 years across the fleet
▪ USD 314m secured bareboat revenue backlog
▪ Average contract duration of 3.6 years
▪ Stable cash flow from bareboat contracts at fixed rates and DPO from OSG, with attractive evergreen extension options
▪ Upside potential from profit share arrangement
▪ Pro-forma debt to TTM EBITDA of 8.0x
▪ Pro-forma net debt to TTM EBITDA of 7.3x
▪ TTM EBITDA to interest expense of 2.2x
▪ Substantial fleet growth coming to an end in 2017. Some scrapping of older tonnage
▪ JA tanker market at a through early 2017, but with promising outlook
▪ Fleet of 9x MR tankers + 1x shuttle tanker, operating in the US Jones Act market
▪ Average age of 11.4 years across the fleet
▪ USD 300m secured bareboat revenue backlog
▪ Average contract duration of 3.4 years
▪ Pro-forma debt to TTM EBITDA of 6.6x
▪ Pro-forma net debt to TTM EBITDA of 6.1x
▪ TTM EBITDA to interest expense 2.6x
▪ Continued scrapping with orderbook close to zero added to market tightening in 2019
▪ Jones Act tanker rates on the rise – TC rates reached USD 60,000 per day in 2019, well above the AMSC vessels’ cash breakeven for OSG
ChangeQ1 2020Q1 2017
▪ Announced exercise of extension options by OSG on all 10x vessels in the last two years, providing 100% utilization until end of 2022
▪ Distributed stable dividend of USD 0.08/quarter unchanged for the last three years
Source:Company filings
Table of contents
AMSC FINANCIAL OVERVIEW2
JONES ACT MARKET OVERVIEW3
APPENDIXA
COMPANY OVERVIEW1
Jones Act – a Vital Part of the US Economy
▪ The Jones Act generally restricts the marine transportation of
cargo and passengers between points in the United States to
vessels that meet the following criteria:
- Built in the United States
- Registered under the U.S. flag
- Manned predominately by U.S. crews
- At least 75% owned and controlled by U.S. citizens
- AMSC’s presence in the Jones Act market is made
possible by the lease finance exception of the Jones
Act
▪ The Jones Act is an essential feature in U.S. national security
- Ensuring non- dependency of ships controlled by
foreign nations
- Maintaining critical domestic shipbuilding capacity
- Supporting a domestic pool of highly skilled mariners
▪ The Jones Act is a significant contributor to the US economy
- Large U.S. employer
- Substantial amounts of capital invested
Source: American Maritime Partnership and U.S. Maritime Administration 18
The Jones Act has been in place since 1920… … and is a vital part of the US economy
100,000,000,000USD 100bn contribution to the US
domestic economy
30,000,000,000USD 30bn total investment in
over 40,000 vessels
400,000Number of jobs directly and indirectly
impacted by the US maritime industry
Delaware Bay Lightening (Crude)
Shuttle tankers from deep water U.S. Gulf to Gulf Coast Refineries (Crude)
Crude from Corpus Christi, TX to LOOP (not shown)
Crude from Corpus Christie and Beaumont to Northeast
Jones Act crude oil & products primary trade routes
A Critical Part of Oil Majors’ Transportation Logistics
19
Jones Act Tanker Routes:
Gulf Coast refineries to Florida and East Coast (Clean)
Mid-Atlantic to New England (Clean)
Alaska and Intra-west coast movements (Clean/Dirty)
Cross-Gulf movements (Dirty)
1
2
3
4
5
6
7
6
4
2
5
3
EAGLE
FORD
PERMIAN
1
Patoka, IL
1US GULF
Key US Oilfields
Clean Pipeline
Barges
Crude Pipeline
8
8
Source: Navigistics’ Wilson Gillette Report Apr 2020
BAKKEN
Cushing, OK
Majority of Fleet Carry Clean Products - highly stable trade over time
20
Fleet deployment by main trades (Tankers and ATBs) US Clean Product Demand stable over time
Source: Navigistics’ Wilson Gillette Report Apr 2020, EIA and AMSC analysis, EIA Weekly Petroleum Status Report May 27, 2020. Note: 1) Idle capacity refers only to ATBs mostly approaching scrapping
3%5%
21%
22%
42%
West Coast
ChemicalsMSC
6%
Idle1)
Crude Oil
Clean USG
April 2020
Total capacity: ~22.9 mbbls
▪ Total clean products demand in the US is very stable over time
▪ Highly inelastic to price, as only very low (below $2pg) or very high prices(above $4.5pg) seems to have impact on demand
▪ Currently fuel demand is severely impacted by “stay at home policies” across the US, caused by the Covid-19 pandemic
▪ EIA is forecasting a gradual return to normal demand by the end of 2020
10000
12000
14000
16000
18000
20000
22000
24000
Demand for Clean Products (mbbls per day)
Short term dip in clean product demand expected to be followed by gradual recovery in 2H 2020
▪ Demand for clean products in the USA decreased by 35% in April
▪ Recovery has already started as the US economy is gradually opening up
Source: EIA Weekly Petroleum Status Report May 27 2020
21
Drop in clean products demand already recovering EIA forecast gradual recovery in 2020
▪ Pick up in demand for gasoline will be driven by:
- Less interest in public transportation, less mass airline
travelling, less cruise vacation
- All leading to “Staycation” in the USA involving more
automobile driving
▪ Demand for diesel is less impacted due its industrial nature being consumed by trucks, buses, machinery, etc.
▪ Demand for Jet fuel will likely suffer until commercial air traffic is back in favour
6000
8000
10000
12000
14000
16000
18000
4-J
an
8-F
eb
8-M
ar
5-A
pr
3-M
ay
31
-Ma
y
28
-Ju
n
26
-Ju
l
23
-Au
g
20-S
ep
18
-Oct
15-N
ov
13
-Dec
Total demand for Gasoline, Diesel and Jet fuel
Range 2015-2019 2020
Increasing seaborn transportation of clean products from US Gulf to East Coast
Gulf Coast to Florida Trade Lane
Steady long term growth in clean product shipments to Florida
22
1
PADD 1
PADD 3
PADD 2
Jacksonville
Port Everglades
Tampa
Corpus
Christi
HoustonBeaumont
New
Orleans
Pascagoula
Mbbls per month
▪ As Florida has no pipeline connection nor any refineries, all clean products consumed are supplied by sea
▪ Florida is sourcing 90% of its clean products demand on a Jones Act tanker from US Gulf refineries
▪ Florida consumption is split 65-70% Gasoline, 15-20% Diesel and 10-15% Jet fuel
▪ Increasing consumption of clean products in Florida is driving demand for Jones Act tanker shipments cross US Gulf
▪ Over the past 10 years this trade has grown with a CAGR of about 3.5%
▪ Demand impact from Covid-19 mitigating measures expected to reduce shipments in 2020, but return to normal in 2021
12.5
17.5
22.5
27.5
Ma
r-2
01
0
Jun
-20
10
Sep
-20
10
De
c-2
01
0
Ma
r-2
01
1
Jun
-20
11
Sep
-20
11
De
c-2
01
1
Ma
r-2
01
2
Jun
-20
12
Sep
-20
12
De
c-2
01
2
Ma
r-2
01
3
Jun
-20
13
Sep
-20
13
De
c-2
01
3
Ma
r-2
01
4
Jun-
2014
Sep
-20
14
De
c-2
01
4
Ma
r-2
01
5
Jun-
2015
Sep
-20
15
De
c-2
01
5
Ma
r-2
01
6
Jun
-20
16
Sep
-20
16
De
c-2
01
6
Ma
r-2
01
7
Jun
-20
17
Sep
-20
17
De
c-2
01
7
Ma
r-2
01
8
Jun
-20
18
Sep
-20
18
De
c-2
01
8
Ma
r-2
01
9
Jun-
2019
Sep
-20
19
De
c-2
01
9
Ma
r-2
02
0
Mb
bl
PADD 1 Receipts of Products by Tanker and Barge from PADD 3 Trendline 3.5% CAGR
PADD 3 to PADD 1 Crude Oil Moves by Tanker and Barge Trade lane carrying Crude from Gulf Coast to U.S. Northeast
23Source: EIA, Marine Traffic and AMSC analysis
PADD 1
6
PADD 3
PADD 2
Jacksonville
Port Everglades
Tampa
Corpus
Christi
HoustonBeaumont
New
Orleans
Pascagoula
Washington
New YorkPhiladelphia
Boston
Crude trade to Northeast has remained strong despite current oil market volatility
▪ Historically, volumes have been driven by spread in pricing of
U.S. Crude Oil vs international alternatives
▪ Low crude oil price and falling US oil production is potentially
increasing oil price spread volatility going forward
0
1
2
3
4
Jan
-20
13
May
-20
13
Sep
-20
13
Jan
-20
14
May
-20
14
Sep
-201
4
Jan
-20
15
May
-201
5
Sep
-201
5
Jan
-20
16
May
-201
6
Sep
-201
6
Jan
-20
17
May
-201
7
Sep
-201
7
Jan
-20
18
May
-201
8
Sep
-201
8
Jan
-20
19
May
-20
19
Sep
-20
19
Jan
-20
20
May
-20
20
Mb
bl
Padd 3 to Padd 1 'PADD 3 to PADD 1 Crude Movements by Tanker
Fleet profile by vessel ageConsiderable fleet growth in past years, but scrapping has already reduced active fleet to 2015 levels
0
1
2
3
4
5
6
7
8
9
10
11
12
3540 14550 30 25 20 15 10 5
Scrap/lay up
ATBs AMSC
Tankers
24
Source: Navigistics’ Wilson Gillette Report Apr 2020, broker reports and AMSC analysis
Fleet Reduction as Scrapping Continues
Number of vessels
Candidates for
scrapping
Kbbls capacity
0
5000
10000
15000
20000
25000
30000
2012 2013 2014 2015 2016 2017 2018 2019 2020 2021
Fleet Scrapping
Actual Projected
2015 levels
Net capacity reduction driven by scrapping and limited orderbook
25
Source: Navigistics’ Wilson Gillette Report Apr 2020, broker reports and AMSC analysis
Negative Fleet Growth
0% 0%
15%
12%
6%
-7%
-4%-2%
-5%
-10%
-5%
0%
5%
10%
15%
20%
2013 2014 2015 2016 2017 2018 2019 2020 2021
▪ Since 2016, five tankers and thirteen ATBs has been
scrapped, sold for operations outside the Jones Act
market or gone into definite lay-up
▪ The entire JA tanker orderbook consist of two small
barges for delivery in 2020 and no new tankers
expected in the next five years
▪ Yard capacity for tankers are limited with NASSCO
mainly building navy ships and Philly Shipyard building
MARAD Training Ships
▪ Likely delivered cost for a newbuild is now around
USD150m with first available delivery slot in 2025
▪ Sustainable multi-year TC rates of ~USD70,000 per
day required to justify newbuilds
26
Summary – long term stable business model despite short term volatility imposed by Covid-19
INCREASING DEMAND
IN KEY TRADES
▪ Continued strong crude trade from U.S. Gulf to the U.S. Northeast
▪ Growing clean trade into Florida and to U.S. Northeast
▪ Jones Act tanker market expected to remain stable despite current volatility
REDUCING FLEET
CAPACITY WITH NO YARD
AVAILABILTY
▪ Slim orderbook with only two replacement barges for delivery in 2020
▪ No available yard capacity to build Jones ACT tankers until 2025 or later
▪ Negative fleet growth expected next two years as scrapping of old tonnage continues
STRONG AND IMPROVING
CREDIT METRICS
▪ Modest secured loan to value, leaving substantial equity support for unsecured lenders
▪ Contracted cash flow providing solid debt service coverage
▪ Significant free cash flow generation offer further liquidity buffer for creditors
LONG TERM CONTRACTS
PROVIDE STABLE CASH FLOW
▪ Bareboat contracts provide strong and stable cash flows
▪ Likely to continue with OSG for many years through evergreen extension options
▪ Most cost competitive fleet reduces re- chartering risk