DB Dry Bulk Shipping 2013 Outlook

Deutsche Bank
Markets Research
North America
United States
Industrials
Marine

Industry
DB 2013 Shipping
Outlook

Date
30 January 2013
Recommendation
Change
Challenges Remain In 2013; 2014
Showing Some Promise
Still Defensive In 2013 As Recovery Remains At Least A Year Away

________________________________________________________________________________________________________________
Deutsche Bank Securities Inc.
Deutsche Bank does and seeks to do business with companies covered in its research reports. Thus, investors should
be aware that the firm may have a conflict of interest that could affect the objectivity of this report. Investors should
consider this report as only a single factor in making their investment decision. DISCLOSURES AND ANALYST
CERTIFICATIONS ARE LOCATED IN APPENDIX 1. MICA(P) 072/04/2012.

Justin Yagerman
Research Analyst
(+1) 212 250-5191
justin.yagerman@db.com

Joshua Katzeff
Research Associate
(+1) 212 250-8389
joshua.katzeff@db.com

Robert Salmon, CFA
Research Associate
(+1) 212 250-2812
robert.salmon@db.com

Top picks
Diana Shipping Inc (DSX.N),USD8.79 Buy
Teekay Corporation (TK.N),USD35.78 Buy
Navios Acquisition Corp.
(NNA.N),USD2.56
Buy
Companies Featured
Capital Product Prtns. (CPLP.OQ),USD8.12 Hold
DryShips Inc (DRYS.OQ),USD2.18 Hold
Diana Shipping Inc (DSX.N),USD8.79 Buy
Frontline Ltd. (FRO.N),USD3.52 Sell
Genco Shipping (GNK.N),USD3.69 Sell
Navios Partners L.P. (NMM.N),USD14.84 Hold
(NNA.N),USD2.56
Buy
Seaspan Corp (SSW.N),USD18.77 Hold
Textainer Group Holdings
(TGH.N),USD41.43
Hold
Teekay Corporation (TK.N),USD35.78 Buy
Teekay Tankers Ltd. (TNK.N),USD3.06 Hold

In 2012, the dry bulk and tanker markets faced substantial fleet growth and
lackluster demand. Last year, our shipping universe declined an average of
16.8%, underperforming the S&P 500's 13.4% gain. In 2013, fleet growth is set
to moderate, but not enough to make a significant impact on rates. We prefer
contract coverage and clean balance sheets once again as debt restructurings
and volatile rates will be an issue for many companies. We have largely kept
our universe unchanged into 2013, with only one upgrade outlined below and a
downgrade earlier this week.
Not Ready To Call 2014 A Dry Bulk Recovery, But Likely Better Than 2013
Our dry bulk supply and demand model shows recovering fleet utilization
levels from 2012 in the coming years. However, we estimate fleet utilization of
85.2% and 93.5% in 2013 and 2014 respectively. This puts 2014 roughly inline
with 2001 and 2002. During that period, the dry bulk market saw modest
earnings (Capes at roughly $12,500/day). We are therefore looking past 2014
for a more meaningful recovery. The key risk to a dry bulk recovery remains
the orderbook. Increased ordering for the largely non-existent 2015 orderbook
could delay any recovery.
Tankers Set To See A Lackluster Year As Demand Weight On The Sector
A small demand boost by China and emerging market Asia are the sole source
for the tanker sectors modest demand growth outlook (1.0% y/y) in 2013.
Despite nominal fleet growth, we expect tanker utilization to remain at weak
levels with only modest ton-mile demand expansion. Ton-mile demand should
modestly improve as we expect US long-haul imports from the Middle East to
remain flat, coupled with a modest increase in long-haul West African exports
(to Asia).
Swapping The Navios: Upgrading NNA to Buy
In our outlook we have upgraded NNA to Buy-rated from Hold based on its
exposure to product tankers and the potential for dividend raises in 2013 and
2014. We have also recently downgraded NMM to Hold-rated from Buy, in our
note published on January 28, as the company will face declining distribution
coverage in 2013 and 2014 and further capital raises.
Shipping Cheat Sheet Provides A Basic Overview Of The Shipping Segments
Included in our 2013 outlook (starting on Page 32) is what we are calling our
Shipping Cheat Sheet. This is designed as a mini-primer for the dry bulk,
tanker and container industries. Included are basics on each sectors cargos,
routes travelled and ship type as well as the primary demand drivers for each
segment.
Introducing Quarterly 2013 And FY2014 Estimates And Updated Price Targets
We are introducing our quarterly 2013 and FY2014 EPS estimates. While our
rate assumptions are up modestly from last year, expiring above-market time
charters, declining asset values and limited spot rate improvement should
weigh on corporate earnings. Our new price targets are derived using either an
EV/EBITDA multiple applied to our 2014 EBITDA estimate or NAV. Please see
Figure 1 and 2 on Page 7 for more details on our estimate revisions and rating
changes.
30 January 2013
Marine
DB 2013 Shipping Outlook

Page 2 Deutsche Bank Securities Inc.

Table Of Contents
2013 Outlook & Positioning .......................................................... 4
Investment Summary ......................................................................................................... 4
Although The Dry Bulk Sector Is Poised For A Modest 2014 Recovery, It Is Still Too
Soon To Own The Stocks ................................................................................................... 4
Tankers Plagued By Lack Of Demand, Not Fleet Growth .................................................. 5
Containership Deliveries Continue Amidst Weak Demand Growth .................................. 6
Overview Of Our Estimates, Price Targets & Ratings ........................................................ 7
Summary Of Ratings Changes ...................................................... 9
Upgrading NNA To Buy From Hold .................................................................................... 9
Downgrading NMM To Hold From Buy ............................................................................. 9
Our Top Picks .............................................................................. 10
Positioning Ourselves In Top Tier Defensive Names ....................................................... 10
Dry Bulk Outlook ......................................................................... 12
A Turnaround Is In Sight, But Not Here Yet ..................................................................... 12
Dry Bulk Supply And Demand Model .............................................................................. 12
Tanker Outlook ............................................................................ 19
Weak Global Demand Delays Tanker Recovery ............................................................... 19
Tanker Supply And Demand Model ................................................................................. 20
Container Outlook ....................................................................... 25
Liners Maintain Better Pricing Discipline Amidst Oversupply ......................................... 25
Container Demand Outlook .............................................................................................. 26
World Trade Growth Forecasts ........................................................................................ 26
Container Supply Outlook ................................................................................................ 27
Shipping Cheat Sheet .................................................................. 31
DBs Shipping Cheat Sheet ........................................................................................... 31
Dry Bulk Basics ................................................................................................................. 32
Tanker Basics .................................................................................................................... 36
Container Basics ............................................................................................................... 40
Valuation & Risks ........................................................................ 43
Dry Bulk Valuation & Risks ............................................................................................... 43
Tanker Valuation & Risks .................................................................................................. 43
Container Valuation & Risks ............................................................................................. 44
Dry Bulk Financials ...................................................................... 45
Diana Shipping (DSX) ....................................................................................................... 45
Dryships (DRYS) ............................................................................................................... 45
Genco Shipping & Trading (GNK) ..................................................................................... 45
Navios Maritime Partners (NMM) .................................................................................... 45
Tanker Financials ........................................................................ 50
Capital Product Partners (CPLP) ....................................................................................... 50
Frontline (FRO) .................................................................................................................. 50
Navios Maritime Acquisition (NNA) ................................................................................. 50
Teekay Corp (TK) .............................................................................................................. 50
Teekay Tankers (TNK) ....................................................................................................... 50
Container Financials .................................................................... 56
Seaspan (SSW) ................................................................................................................. 56
Textainer (TGH) ................................................................................................................. 56
30 January 2013
Marine

Deutsche Bank Securities Inc. Page 3

Table of Exhibits
Figure 1: Overview Of Our Dry Bulk & Tanker Estimates, Price Targets And Ratings ...... 7
Figure 2: Overview Of Our Dry Bulk & Tanker Valuations ................................................. 7
Figure 3: An Overview Of DB Estimates Vs. Consensus ................................................... 8
Figure 4: Overview Of TKs NAV ...................................................................................... 11
Figure 5: Dry Bulk Supply And Demand Outlook Overview ............................................ 13
Figure 6: Dry Bulk Contracted Orderbook Overview ....................................................... 14
Figure 7: DB Dry Bulk Demand Growth By Cargo Segment............................................ 15
Figure 8: Fleet Orderbook Delivery And Growth Assumptions ........................................ 15
Figure 9: Dry Bulk Fleet By DWT ...................................................................................... 16
Figure 10: Dry Bulk Fleet By Vessel Count ....................................................................... 16
Figure 11: Current Vessel Orderbook As % Of Delivered Fleet & Delivery Time ............. 16
Figure 12: Historic And Projected Dry Bulk Orderbook Non-Deliveries .......................... 17
Figure 13: Dry Bulk Fleet Age Profile ............................................................................... 18
Figure 14: Dry Bulk Scrap Prices (2000-Current) ............................................................. 18
Figure 15: Four-Week Rolling Average Of US Crude Imports (2010-Present) ................. 19
Figure 16: Tanker Supply And Demand Outlook Overview ............................................. 20
Figure 17: Tanker Contracted Orderbook Overview ........................................................ 21
Figure 18: DB Seaborne Crude Transportation Volume Growth By Region .................... 21
Figure 19: DB Commodities Global Oil Demand Outlook ................................................ 22
Figure 20: Current Vessel Orderbook As % Of Delivered Fleet & Delivery Time ............. 23
Figure 21: Historic And Projected Total Crude Tanker Order Non-Deliveries .................. 23
Figure 22: Tanker Fleet Age Profile .................................................................................. 24
Figure 23: Tanker Scrap Pricing (2000-Current) ............................................................... 24
Figure 24: Current Spot Container Freight Rates ............................................................. 25
Figure 25: World GDP Vs. Container Trade (2000-2012) ................................................. 26
Figure 26: DB Worldwide GDP Growth Forecasts ........................................................... 27
Figure 27: Current Orderbook Composition By Vessel Size ............................................. 27
Figure 28: Current Containership Orderbook Profile (% of Current Fleet) ....................... 28
Figure 29: Contracted Containership Fleet Growth (Gross) ............................................. 28
Figure 30: Current Fleet Profile By Size ............................................................................ 29
Figure 31: Fleet Age By Sub-Panamax and Larger Ships ................................................ 29
Figure 32: Historical Containership Scrappage (1996-2012) ........................................... 30
Figure 33: Dry Bulk Cargoes By Commodity Type ........................................................... 32
Figure 34: Major Dry Bulk Import Market Share By Region ............................................ 33
Figure 35: Major Dry Bulk Trading Patterns ..................................................................... 35
Figure 36: Crude Seaborne Import Market Share ............................................................ 36
Figure 37: Crude Seaborne Export Market Share ............................................................ 36
Figure 38: Major Crude Tanker Trade Routes .................................................................. 38
Figure 39: Global Container Trading Patterns .................................................................. 41

30 January 2013
Marine


2013 Outlook & Positioning
Investment Summary
Sidelined For Another Year From The Oversupply In The Shipping Markets
We expect 2013 to look much like 2012 across our shipping universe, although the
addition of another year of weak rates and asset prices will test the resolve of both
owners and banks. Perhaps we could see heightened activity ahead of 2014 when
fundamentals appear to begin a road to recovery. While we expect modest
improvements in both our dry bulk and tanker segments, it will not be enough to cause
a meaningful market rally. In container shipping, an oversupply of tonnage set for
delivery and modest demand growth should keep ordering in check and pressure spot
container freight rates. Therefore, as we look across our shipping universe, we continue
to favor the higher quality names; companies with low-leverage, fixed coverage or
exposure to more favorable segments (offshore, LNG and product tankers).
We have adjusted two of our ratings, upgrading NNA to BUY in this report and
downgrading NMM to HOLD (on January 28) as a result of our introduced 2014
estimates. NMM, a dry bulk synthetic MLP, will realize the expiry of several of its
above-market time charters in 2013 and 2014, calling into question the long-term
viability of the distribution.
We have upgraded NNA to a Buy given its longer-term crude tanker coverage (generally
expiring post-2014), and increasing exposure to the product tanker segment. NNAs
non-amortizing long-term debt allows for positive cash flow generation and the
potential for a distribution increase in 2013-2014.
Although The Dry Bulk Sector Is Poised For A Modest 2014
Recovery, It Is Still Too Soon To Own The Stocks
Holding Off Buying The Sector, But H2 May Offer An Entry Point
While establishing a position prior to a market recovery is the key to the most
successful shipping investments, we still feel it is too soon to own spot-exposed and
higher-leverage owners. Our supply and demand outlook for 2013 implies only a
modest improvement off of an abysmal 2012. We expect rates to remain below cash
break-even levels and breach operating expense levels at points during the year. Given
this rate outlook, bank led forced sales should continue as will scrapping, placing a
downward bias on asset values in 2013. However, shares of more speculative shipping
stocks may become more interesting in late-Q3, prior to the seasonal increase in spot
earnings into the Fall/Winter months, especially as we gain more clarity on a potential
2014 recovery.
Limited Orderbook & Demand Growth Sets Stage For Rate Recovery In 2014 & Beyond
We believe 2014 is set to be the beginning of a dry bulk market recovery. However, we
emphasize that this is just a start, and not a sustained rally back to historical averages.
The primary driver of our recovery expectations are the negligible orderbook after 2013
and the continued strength of expected iron ore and coal export growth (primarily to
Asia). We are fundamentally bullish on China, and DB expects 2013 and 2014 Chinese
GDP growth of 8.2% and 8.9%. Further, we expect steel restocking in China to help
seaborne iron ore and coking coal volumes, key dry bulk cargoes. We caution investors
that the strength of trajectory of this recovery will be highly dependent on minimal
vessel ordering.
30 January 2013
Marine


In 2014, our dry bulk fleet utilization level of less than 94% implies a market similar to
2001 or 2002, when rates average roughly $12,400/day for Capes and $8,300/day for
Panamaxes. We expect 2014 to modestly outperform 2002, but still expect spot Cape
and Panamax rates to average $13,000/day and $11,000/day, a far cry from the 10-year
historical averages of $52,000/day and $29,000/day. With little-to-no orderbook in 2014
and 2015, and our estimated mid-single digit demand growth outlook, we would expect
a more meaningful recovery in 2015.
Key Dry Bulk Stocks To Watch In 2013
With our outlook only showing modest recovery in 2014 and a more constructive
recovery post-2014, we do not believe investors need to position themselves this early
for a potential recovery. Many companies still need to negotiate with their lenders, a
task that has proven to be more difficult as the downturn has continued. Such lender
difficulty is likely to plague GNK as its current debt amortization waivers are set to
expire at the end of 2013, and renegotiations should occur prior to year-end. We expect
lenders to be less accommodating to GNK, and the rest of the dry bulk owners than we
have seen in past negotiations absent a turn in the market. Owners in similar positions
have seen varying results such as capital raises, issuance of warrants to lenders, or
more extensive in and out of court restructurings.

Tankers Plagued By Lack Of Demand, Not Fleet Growth
Any Bullish Outlook Is Clouded By Weak OECD Crude Demand
Unlike the dry bulk sector, where we can point to decent demand growth, we have
difficulty finding positive demand catalysts for the crude tanker sector. We do not
believe that the growth in Chinese and Emerging Asian demand will be enough to push
seaborne crude trade above 2% p.a. over the next three years. With mid-single digit
fleet growth this year, we see little reason to expect material rate improvement. Outside
of declining valuations and/or a material improvement in demand, we see little in the
way of upside catalysts from current levels near-term. However, the product tanker
sector may outperform given the potential for demand spikes, arbitrage opportunities,
increased refinery capacity and growing ton-mile demand.
US Near-Sourcing Is Priced-In, Where Will West African Crude Go?
We expect US imports of Middle Eastern crude to be flat with 2012, implying much of
the lost ton-mile demand from long-haul Middle EastUS cargoes has played-out. Most
of the lost Middle Eastern barrels have found a home in Asia, but what will be key to
watch is where West African output goes. Declining US and European imports from
West Africa should provide an opportunity for increased ton-mile demand as more
West African barrels are exported to Asia on VLCCs and Suezmaxes. This may be one
of the few positives for seaborne crude demand in 2013.
Key Tanker Stocks To Watch In 2013
With increased refinery capacity in Asia, and European refineries becoming less
competitive, the US and Asia have increased their product exports. We are therefore
increasingly improving our outlook for product tankers, especially relative to their crude
counterparts. Our top pick in the tanker sector remains TK. However, this is largely a
result of its expansion out of the traditional tanker sector. For more direct crude and
product tanker exposure we recommend, NNA, which we are upgrading to Buy-rated
from Hold. NNAs product tanker fleet (delivered and newbuilding) should be able to
take advantage of rate improvement, but generally has a floor on earnings with its
profit-sharing contracts. NNAs seven VLCCs, with long-term contracts, provide stable
cash flow for its distribution and de-leveraging.
30 January 2013
Marine


FRO remains our lone Sell-rated tanker stock due to its aging fleet of VLCC and
Suezmax tankers generally employed on the spot market. The company maintains a
negative NAV, and has a profit share with its charterors, whereby when rates improve,
the company must give much of the upside to its charterors. We do not expect any fleet
renewal in FRO, as its Chairman and major shareholder, John Fredriksen, has been
using Frontline 2012 (FRNT.OL, NOK39.00) as his tanker and dry bulk investment
vehicle.

Containership Deliveries Continue Amidst Weak Demand Growth
Oversupply Persists, But Liners Have Been Able To Increase Pricing
The container market faces a greater oversupply of tonnage this year with contracted
fleet growth in excess of 11% and modest demand growth of 4.5% expected in 2013.
Despite the oversupply of tonnage, the liners have been highly disciplined with pricing
this year compared to the 2011 and early 2012 fight for market share. This discipline,
along with reducing service offerings and increasing the idle fleet led to material rate
increases through much of 2012. The continued rate discipline and redelivery of
chartered-in tonnage could help the liners maintain profitability in 2013.
Liner Discipline Comes At The Charter Markets Expense
Given the liners general oversupply of available capacity in their fleets and continued
newbuilding deliveries, ship lessors continue to face weak time charter rates. Owners
with near-term market exposure will likely see rates below cash break-even levels, but
above operating expense levels. Panamax and smaller sized containerships will likely
suffer more than the fuel-efficient larger vessels. Despite the near-term headwinds,
Hold-rated SSW has little near-term market exposure. SSW has also recently
announced newbuilding orders, which should help increase its contracted revenue
backlog and sustain earnings growth.
Container Box Lessors Keep Buying Boxes (New & Old)
As the liners remain focused on their own liquidity issues (debt and newbuilding
obligations), container box lessors have increased their share of new box purchases to
roughly 70% of the market from 60%-66% at the beginning of last year. We believe this
trend will persist in 2013, coupled with further acquisitions of secondhand box
portfolios. The increased market share and acquisitions should help fuel continued
strong capex growth.

30 January 2013
Marine


Overview Of Our Estimates, Price Targets & Ratings
Figure 1: Overview Of Our Dry Bulk & Tanker Estimates, Price Targets And Ratings
Rating Price Target Q4 2012EEPS 2013EEPS 2014EEPS
Current Rating Upgrade/Downgrade New Old Old New Old New New
CPLP Hold $8.00 $8.00 $0.09 $0.08 $0.44 $0.50 $0.62
FRO Sell $2.00 $2.00 ($0.51) ($0.51) ($1.50) ($1.38) ($1.34)
NNA Buy Upgrade $5.00 $3.00 ($0.01) ($0.01) $0.60 $0.54 $0.45
TK Buy $43.00 $41.00 $0.18 $0.09 $0.73 $0.57 $1.17
TNK Hold $3.00 $3.00 ($0.04) ($0.05) ($0.07) ($0.20) ($0.09)
DRYS Hold $2.00 $1.50 ($0.09) ($0.24) ($0.39) $0.12 $0.69
DSX Buy $11.00 $9.00 $0.10 $0.10 $0.10 ($0.02) $0.24
GNK Sell $1.00 $1.00 ($0.86) ($0.86) ($2.78) ($4.27) ($2.95)
NMM Hold Downgrade
1
$14.00 $14.00 N/A N/A $0.87 N/A $0.80
TGH Hold $40.00 $35.00 $0.96 $0.96 $3.78 $4.03 $4.49
SSW Hold $18.00 $14.00 $0.29 $0.29 $1.24 $1.06 $1.37
1. NMM was downgraded in a note published on January 28,
Company
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Source: Deutsche Bank
Figure 2: Overview Of Our Dry Bulk & Tanker Valuations
Current Price
EBITDA Estimates
Target Forward Historic Average Price Target NTMDividend
1/29/2013 Q4 2012E 2013E 2014E
EV/EBITDA Multiple
1
EV/EBITDA Multiple Old New Yield
2
CPLP $8.15 $26.5 $115.9 $128.2 9.5x 9.3x $8.00 $8.00 11.4% 9.6% Hold
FRO $3.52 $11.0 $60.3 $84.4 1.2x Asset Premium
3
12.8x $2.00 $2.00 N/A -43.2% Sell
NNA $2.56 $25.4 $139.6 $139.7 9.0x 8.1x $3.00 $5.00 7.8% 103.1% Buy
TK $35.78 $211.9 $805.7 $957.7 0.95x NAV 10.9x $41.00 $43.00 3.5% 23.7% Buy
TNK $3.06 $21.0 $81.8 $90.2 9.0x 10.3x $3.00 $3.00 9.8% 7.8% Hold
DRYS $2.28 $58.2 $443.9 $943.2 0.8x NAV 5.8x $1.50 $2.00 N/A -12.3% Hold
DSX $8.79 $25.1 $65.9 $86.5 9.0x 6.9x $9.00 $11.00 N/A 25.1% Buy
GNK $3.69 $18.0 $46.1 $100.1 1.3x Asset Premium
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16.8x $1.00 $1.00 N/A -72.9% Sell
NMM $14.84 $39.4 $135.9 $117.6 9.0x 7.8x $14.00 $14.00 11.9% 6.3% Hold
SSW $18.77 $123.9 $487.4 $506.2 10.5x 14.7x $14 $18 5.3% 1.2% Hold
Current Price
EPS Estimates
Target Forward Historic Average Price Target NTMDividend
1/29/2013 Q4 2012E 2013E 2014E
P/EMultiple
1
P/EMultiple Old New Yield
2
TGH $41.43 $0.96 $4.03 $4.49 9.0x 9.1x $35 $40 4.6% 1.1% Hold
(1) Target forward P/Eand EV/EBITDA multiples are applied to our 2014 EPS and EBITDA estimates.
(2) Assumes DB dividend estimates for FY2013.
(3) We have based FRO and GNK's valuation based on 1.0xNAV, but have inflated asset values by 20%-30% to reflect optionality to a recovering market.
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Source: Deutsche Bank, Factset
30 January 2013
Marine


Figure 3: An Overview Of DB Estimates Vs. Consensus
Q4 2012E CY2013E CY2014E
Us
Consensus
1
Delta
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1
Delta
CPLP $0.08 $0.06 $0.02 $0.50 $0.39 $0.11 $0.62 $0.48 $0.14
FRO ($0.51) ($0.54) $0.03 ($1.38) ($1.43) $0.05 ($1.34) ($1.29) ($0.05)
NNA ($0.01) ($0.02) $0.01 $0.54 $0.14 $0.40 $0.45 $0.44 $0.01
TK $0.09 $0.10 ($0.01) $0.57 $0.17 $0.40 $1.17 $1.04 $0.13
TNK ($0.05) ($0.04) ($0.01) ($0.20) ($0.14) ($0.06) ($0.09) $0.20 ($0.29)
DRYS ($0.24) ($0.12) ($0.12) $0.12 $0.00 $0.12 $0.69 $0.58 $0.11
DSX $0.10 $0.09 $0.01 ($0.02) ($0.12) $0.10 $0.24 $0.03 $0.21
GNK ($0.86) ($0.81) ($0.05) ($4.27) ($2.72) ($1.55) ($2.95) ($1.35) ($1.60)
NMM N/A N/A N/A $0.87 $0.92 ($0.05) $0.80 $0.62 $0.18
TGH $0.96 $0.94 $0.02 $4.03 $4.04 ($0.01) $4.49 $4.60 ($0.11)
SSW $0.29 $0.28 $0.01 $1.06 $1.09 ($0.03) $1.19 $1.28 ($0.09)
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Source: Deutsche Bank, Factset
30 January 2013
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Summary Of Ratings Changes
Upgrading NNA To Buy From Hold
We are upgrading NNA to Buy from Hold given its contracted charter coverage,
exposure to product tankers (which we now see as relatively favorable) and the
possibility for distribution growth. With its orderbook largely delivering in 2013, NNA is
set for profitability in 2013 and 2014. NNA has employed a mixture of fixed-rate and
profit sharing time charters that provide solid earnings generation and the potential for
a distribution increase in 2013 or 2014. We estimate NNA could nearly double its
distribution by the end of 2014 to $2/share from $1/share.
While leverage remains a concern for NNA with an estimated total debt to capitalization
ratio of 75% at year-end 2012, fixed contract coverage and minimal debt amortization
reduce NNAs leverage risk. Currently, the company has 88.2% of its fleet on covered
with time charters for 2013, declining to 55.2% in 2014. However, much of the
uncovered fleet in 2014 is product tanker exposure. NNA has a fully-funded capex
program with senior secured debt already fixed for its newbuildings. Further, the
company has $505 million of secured notes with no amortization until maturity in
November 2017.
NNA, and NNAs CEO, have a solid history of making acquisitions and engaging in the
buy-side of distressed transactions. We would not be surprised by further fleet
expansion, particularly in the product tanker segment.

Valuation: We are raising our price target to $5, which is based on a 9.0x
EV/EBITDA multiple and 2014 EBTIDA estimates. Our multiple is modestly
ahead of NNAs historical average, which we believe reflects its undelivered
fleet and leverage to a recovering product market.

Risks: Downside risks include spot product tanker rates, leverage, limited share
liquidity and reliance on Navios Maritime (NM, $3.71).

Downgrading NMM To Hold From Buy
On January 28, we downgraded NMM to Hold from Buy as its long-term dividend
sustainability comes into question in our newly issued 2014 earnings estimates. NMM
has historically maintained a 1.2x distribution coverage ratio, providing ample
headroom for its payout. However, we expect the coverage to drop to 1.0x in 2013 and
0.8x in 2014. This would imply a distribution drop to $0.36/unit from the current
$0.4425/unit. Although NMMs distribution would still imply a current distribution yield
of 9.7% at the lowered rate, NMM has historically traded at a high distribution yield and
has declining contract coverage. We therefore see little upside to shares of NMM at
current levels.

Valuation: We are maintaining our price target at $14, which is based on a 9.0x
EV/EBITDA multiple and 2014 EBTIDA estimates. Our premium multiple takes
into account NNMs current contract coverage and high distribution payout.

Risks: Upside risks include a recovering time charter rate environment and
accretive acquisitions. Downside risks include dilution, weaker rates and
reduced distributions.
30 January 2013
Marine


Our Top Picks
Positioning Ourselves In Top Tier Defensive Names
Low-Leverage DSX Is Our Top Pick To Take Advantage Of Opportunistic Acquisitions
DSXs cash position of $423 million at the end of Q3 2012 and potential dry powder
(assumes increased leverage) of nearly $1 billion, positions the company as a leading
beneficiary of historically weak asset prices. The companys net cash position results in
a low cash break-even rate of roughly $13,000/day and strong contract coverage of
84% in 2013 and 40% in 2014.
While we are not expecting any large-scale acquisitions, DSX should continue to deploy
its capital, acquiring one-to-three ships every quarter through this likely low-point of the
cycle. DSX has also maintained its chartering strategy, fixing each vessel as it comes
offhire on one-to-two year time charters at prevailing rates with top tier counterparties.
Although recent time charter rates have garnered negative criticism (from us included)
due to their below market pricing, the company is willing to take a discounted rates in
order to gain creditworthy counterparties and feels it maintains ample market exposure
should the rate environment improve, (60% of DSXs book remains open).

Valuation: We are raising our price target to $11, which is based on a 9.0x
EV/EBITDA multiple and 2014 EBTIDA estimates. Our multiple represents a
29% premium to its 5-year historical average of 6.6x, given current weak
earnings as above market charters roll-off and an industry leading balance
sheet.

Risks: Downside risks include lower-than-expected rechartering rates, declining
asset values, lack of acquisition targets and continued global macroeconomic
weakness.

TKs Provides Balanced Exposure To Tankers, Offshore and LNG Sectors With Growth
Potential
TK remains our top pick in the tanker sector, based on its solid acquisitions and
diversification away from the traditional tanker segments. TK has increased its offshore
energy (FPSO and shuttle tankers) a well as LNG tanker exposure. These are market
segments with longer-term fixed-rate contracts, offering attractive risk adjusted returns.
TKs recent growth has recently been facilitated directly at the daughter company level,
allowing TK Parent to focus on continuing to reduce its asset base. Further dropdowns
in 2013 of its FPSOs should help TK de-lever its balance sheet. As TKs daughters grow,
we expect to see further distribution increases from the daughters, which are currently
at or near 50% profit share hurdles on their distributions increasing cash flow to the
parent-owned GP.

Valuation: We are raising our price target to $43, which is based on 0.95x our
estimated NAV.
30 January 2013
Marine


Figure 4: Overview Of TKs NAV
Closing Date 1/29/2013
Vessels (incl. newbuildings) $1,254
Estimated Value Of Voyageur
1
210
VLCC Loan & Sevan Marine Investment 122.4
Charter-in Commitments (72)
Estimated Asset Value $1,514
Net Debt ($MM)
2
$907
Daughter Equity $1,829
GP Interest (20x multiple)
3
$728
NAV $3,165
Diluted Shares Outstanding (MM) 69.4
Net Asset Value per share $45.62
Current Share Price $35.78
Current Price/NAV 0.78x
1. Estimated incremental investment in Voyageur plus the sale premium of $90 million.
3. We assume 20x as our GP cash flow multiple given TK daughter's higher distribution yield
to the MLP sector.
2. TK Parent net debt, excluding the Voyageur VIE.

Risks: Downside risks include operating leverage, spot market rates,
newbuilding projects, access to capital and LNG and offshore project demand.
NNA Remains Our Top Pure-Play Tanker Exposure
With contract coverage, a solid yield and increasing exposure to the product tanker
market, NNA remains our top pure-play tanker stock. See Page 9 for further details.
30 January 2013
Marine


Dry Bulk Outlook
A Turnaround Is In Sight, But Not Here Yet
Expect Continued Dry Bulk Rate Weakness In 2013, But An Improvement From 2012
Although we have moved past the 10%+ annual fleet growth seen over the past four
years, 2013 demand growth (ton-mile adjusted) is forecasted to slightly outpace supply
(7.7% vs. 6.6%). As a result, we would expect average 2013 spot earnings to be
modestly ahead of 2012 averages, with significant volatility throughout the year. Inline
with normal seasonality, we expect weak Q1 and summer spot rates with improving
rates in the Spring and Fall/Winter. With rates remaining in the doldrums, owners will
generally face earnings below cash break-evens and lenders will continue to get
tough with ship owners. These factors result in a downward bias for asset values and
our belief that it is still too soon to upgrade the sector. Our sole Buy-rated name in the
dry bulk sector, DSX, has strong contract coverage and a conservative balance sheet,
providing protection through the cyclical trough.
2014 Will Be Better, But Dont Expect The Strong Rates Seen In The 2010 Recovery
With our 2014 fleet growth projection of only 2.5% fleet growth and demand growth in
excess of 4%, 2014 should result in continued improved rates. However, our utilization
level of 93.5% puts the industry at 2002 levels, when Capes averaged just above
$12,000/day ($18,000/day adjusted for inflation). This is long way from dry bulk sectors
last decent year in 2010 when average cape rates were nearly $34,000/day. The supply
and demand dynamic should continue to improve post-2014 as long as ordering is
muted. Increased ordering is the key risk to a dry bulk recovery.
Not Buying The Sector On Uncertain Recovery And Negative Asset Trends
It is difficult for us to become more bullish on the sector amidst what we expect will be
further restructurings and lower asset prices. Many of the dry bulk owners are still over-
leveraged and negotiating covenant breaches and amortization restructurings, which
has become much more difficult with lenders. We view this as a catalyst for further
forced secondhand sales.
Dry Bulk Supply And Demand Model
2013 Will Look Similar To 2012, But A Recovery Is Set For 2014 And Beyond
Our current supply and demand model for the dry bulk sector suggests a continued
oversupply in 2013. However, we expect the balance to begin to shift in 2014 as limited
deliveries should allow demand growth to begin to absorb the excess tonnage that has
delivered over the past five years. Our outlook calls for modest net fleet growth of 6.2%
and 2.5% in 2013 and 2014, respectively with demand growth of 4.5% and 4.3%. This
growth assumes continued slippage and cancellation of vessels in the published
orderbook of 30% in 2013 and 15% in 2014. We expect scrapping to continue in the
sector although at a more modest pace of 3.75% than the 5.3% realized in 2012. The
modest increase in cargo exports is being driven by strong iron ore and coking coal
growth, which should also help expand ton-mile demand as a result of the long-haul
nature of the cargoes.
30 January 2013
Marine


Figure 5: Dry Bulk Supply And Demand Outlook Overview
2013E 2014E 2015E
Orderbook Slippage 15% 5% 5%
Orderbook
Cancellations
15% 10% 10%
Dry Bulk Demand
Growth (Millions of Tons)
% Year/Year Growth
Global Fleet (Millions of
DWT)
1
% Net Change
Year/Year
DemandIn Terms Of
Vessels
Supply In Terms Of
Vessels
ImpliedUtilization
2000 2,134 11.3% 275.2 2.9% 4,353 4,587 94.9%
2001 2,191 2.7% 287.0 4.3% 4,470 4,783 93.5%
2002 2,258 3.0% 294.4 2.6% 4,606 4,906 93.9%
2003 2,385 5.6% 301.7 2.5% 4,918 5,028 97.8%
2004 2,577 8.1% 320.7 6.3% 5,314 5,346 99.4%
2005 2,722 5.6% 343.9 7.2% 5,613 5,732 97.9%
2006 2,903 6.6% 366.0 6.4% 6,086 6,101 99.8%
2007 3,111 7.2% 390.2 6.6% 6,708 6,503 103.2%
2008 3,209 3.2% 418.1 7.2% 6,841 6,969 98.2%
2009 3,126 -2.6% 458.6 9.7% 6,741 7,644 88.2%
2010 3,519 12.6% 536.6 17.0% 7,904 8,255 95.8%
2011 3,716 5.6% 615.5 14.7% 8,499 9,469 89.8%
2012E
2, 3, 4, 5
3,877 4.3% 679.2 10.3% 8,811 10,449 84.3%
2013E
3, 4, 5
4,045 4.4% 723.7 6.6% 9,490 11,135 85.2%
2014E
3, 4, 5,
4,220 4.3% 739.6 2.2% 10,230 10,957 93.4%
2015E
3, 4, 5,
4,429 5.0% 725.8 -1.9% 10,736 10,752 99.8%
(1) Based on the Clarksons orderbook and Deustche Bank scrapping, slippage, and cancellation estimates. Scrapping estimates call for 3-4% of the 2012 global fleet on an annual basis
(2) 2012 Dry bulk fleet growth and demand is based on Clarksons' reported figures as of January 8, 2012 and DB estimates
(3) Supply and demand growth broken down by Panamaxequivalents. Demand growth converted based on 55,000 ton cargos multiplied by trips per year. Supply growth converted by
dividing fleet by 65,000 dwt
(4) A deficit of vessels indicates a positive supply and demand imbalance, which typically acts as a positive catalyst for day rates
(5) Seaborne trade estimates post-2012 based on Deutsche Bank estimates

30 January 2013
Marine


Figure 6: Dry Bulk Contracted Orderbook Overview
Type of Vessel 2007 2008 2009 2010 2011
Current WorldFleet
(December 31, 2012)
3,4 2013E
5
2014E
5
2015E
5
Capesize Vessels Global Fleet
1
771 825 956 1,165 1,366 1,505 1,682 1,738 1,747
(# of Vessels) Y/YGrowth 7.0% 15.9% 21.9% 17.3% 10.2% 11.8% 3.3% 0.5%
Orderbook
2
177 56 9
Orderbook/Fleet 11.8% 3.3% 0.5%
Panamax Vessels Global Fleet
1
1,477 1,556 1,629 1,814 2,028 2,266 2,753 2,914 2,928
Orderbook
2
487 161 14
Handymax Global Fleet
1
1,595 1,704 1,863 2,169 2,478 2,682 3,008 3,086 3,095
Orderbook
2
326 78 9
Handysize Global Fleet
1
2,812 2,859 2,821 2,996 3,030 3,037 3,314 3,401 3,429
(# of Vessels) Y/YGrowth 1.7% (1.3%) 6.2% 1.1% 0.2% 9.1% 2.6% 0.8%
Orderbook
2
277 87 28
Total Vessels Global Fleet (Vessels) 6,655 6,944 7,269 8,144 8,902 9,490 10,757 11,139 11,199
Y/YGrowth 4.3% 9.2% 12.0% 9.3% 6.6% 13.4% 3.6% 0.5%
Orderbook
2
1267 382 60
Total DWT (millions)
Global Fleet DWT
(millions)
392.0 417.6 458.6 536.6 615.5 679.2 715.5 746.7 751.1
Y/YGrowth 6.5% 17.0% 16.6% 14.7% 10.3% 16.3% 4.4% 0.6%
Global Orderbook DWT
(millions)
2
100.1 31.1 4.4
Orderbook DWT/ Fleet
DWT (Millions)
16.3% 4.4% 0.6%
(1) Global fleet as of the end of the year.
(2) Orderbook data reflects deliveries during the year specified.
(3) Year/Year growth rates under 'Current World Fleet' are estimated from YE 2011.
(4) As of January 8, 2012.
(5) Based on Clarksons's Orderbook assumes no slippage, cancellation or scrapping.
Source: Clarksons Research Services; Deutsche Bank estimates

Dry Bulk Demand Assumption Overview
Dry bulk demand will be driven by growth in iron ore as well as a material increase in
coking coal cargoes. A key change from our previous estimated demand is our reduced
thermal coal and grain growth expectations to 3.0% and 2.5% respectively in 2013,
below our average 2013 dry bulk growth rate of 4.4%.

Iron ore growth of 6.9% is driven by DBs expectation for increased production
in Australia and Brazil, particularly in H2 2013; this will be driven by Chinese
steel restocking

Increased thermal coal exports from Indonesia and Australia will likely be
mitigated by declining US exports; increased export prices could provide
upside to our thermal coal demand scenario

Coking coal exports are expected to improve by 8% on the back of increased
steel production and iron ore volumes

Grains exports are only expected to grow by 2.5% on the back of a weak 2012
crop, as US corn exports continue to disappoint early in 2013
Key risks to the upside or downside of our demand model are Chinese steel
restocking, improved Chinese GDP (8.2% in 2013 and 8.9% in 2014) and limited
weather disruptions. Figure 7 below provides an overview of our demand growth
assumptions.
30 January 2013
Marine


Figure 7: DB Dry Bulk Demand Growth By Cargo Segment
2013E 2014E 2015E
Iron ore growth Rate 6.9% 6.4% 9.0%
Thermal coal 3.0% 4.0% 4.0%
Coking coal 8.3% 5.6% 3.5%
Grain 2.5% 3.0% 3.0%
Minor bulk growth rate 3.0% 3.0% 3.0%
Cumulative dry bulk growth 4.4% 4.3% 5.0%
Source: Deutsche Bank, Clarksons Research Service
Dry Bulk Supply Overview
After the dry bulk fleet doubled between 2006 and 2012 (10.2% CAGR), growth is finally
expected to moderate in 2013 and beyond. We still expect significant slippage and
cancellation in 2013, but these figures should decline with the negligible orderbook in
2014 and 2015. Record scrapping in 2012 (5.3% of the fleet) was higher than we
expected, but should moderate in 2013 as the age profile of the fleet becomes younger.
The key risk to the supply side of our model is the possibility of a growing orderbook in
2014 and beyond. Increased orders into what we believe is a recovery in 2014 and 2015
could postpone or reduce any rate recovery and possibly send the market into another
crisis post-2015. Mitigating this risk is the lack of bank financing and limited investment
from outside capital sources. With banks unwilling to lend, or exiting shipping
altogether, it is unclear that owners will be able to finance new orders, decreasing the
risk of speculative newbuidlings. However, some high quality owners will still be able to
gain credit, but this may not be enough to spur another overbuilding super cycle.
Figure 8 below summarizes our growth, slippage, cancellation and scrapping estimates
in our model.
Figure 8: Fleet Orderbook Delivery And Growth Assumptions
Published
Orderbook Growth
1
Slippage
2
Cancellation
2
Scrapping (%
of Fleet) Net Growth
2013 14.7% 15.0% 15.0% 3.8% 6.6%
2014 4.0% 5.0% 10.0% 3.0% 2.2%
2015 0.5% 5.0% 10.0% 2.5% -1.9%
1. Implied fleet growt h assuming t he unadjusted Clarksons orderbook.
2. Slippage and cancellat ion as a percent age of t he published orderbook.
Source: Deutsche Bank, Clarksons
Overview Of The Existing Fleet
Capes and Panamaxes have dominated ordering over the past decade. As a result,
these vessel classes proportionate composition of the current fleet has grown.
However, the growth of the larger vessels has been led by iron ore and coal cargo
demand, which is most efficiently handled by the larger dry bulk vessels. Capesize ships
make up 41% of the total fleet on a carrying capacity (DWT) basis, but only 16% of the
fleet by actual number of ships.
30 January 2013
Marine


Figure 9: Dry Bulk Fleet By DWT

Figure 10: Dry Bulk Fleet By Vessel Count
Capesize
41%
Panamax
26%
Handymax
21%
Handysize
13%

Capesize
16%
Panamax
24%
Handymax
28%
Handysize
32%
Source: Clarksons Research Service

Declining Orderbook Paves Way For Uncertain Future . . .
The current contracted orderbook (excluding any slippage, cancellation or scrapping) is
currently at 20% of the existing fleet, and largely expected to deliver in the next two
years (see Figure 11 below). Panamaxes have the highest orderbook with 29% of the
fleet expected to deliver through 2015, while Capes are at a more modest 18%. The
2015 orderbook is negligible, but this could change rapidly, particularly if owners
become more bullish about 2014 and 2015 prospects or banks begin to increase credit
to the sector. The uncertain orderbook visibility past 2014 places a glaring question
mark on any longer-term supply outlook.
Figure 11: Current Vessel Orderbook As % Of Delivered Fleet & Delivery Time
13%
4%
1%
18%
22%
7%
1%
29%
12%
3%
0%
16%
11%
3%
1%
15%
15%
5%
1%
20%
0%
5%
10%
15%
20%
25%
30%
35%
2013E 2014E 2015E Total Ordebook
Capesize Panamax Handymax Handysize Dry Bulk Fleet
Non-Deliveries Expected To Remain Flat In 2013 Before Declining in 2014
We expect non-deliveries (slippage and cancellations) to remain relatively flat at 30% in
2013 before declining in 2014. Over the past two years we have seen roughly 30% non-
deliveries based on Clarksons data. This was calculated by comparing the contracted
orderbook at the beginning of each calendar year compared to actual deliveries for that
30 January 2013
Marine


year. However, while we can track non-deliveries from past years, we still do not know
what is just slippage (i.e. delayed to future years) or cancellations which will never
deliver. In 2013, we expect to see 30% of the current contracted orderbook not deliver
as a result of either (i) order overstatement out of the money vessel options counted
as firm orders by the brokers; (ii) unreported contract cancellations many orders are
placed by private owners who do not disclose cancellations; (iii) contract defaults due
in part to lack of debt funding; and (iv) delays either initiated by the yard or the
owners due to market weakness. Our non-delivery estimate drops in 2014 and 2015
based on what we believe will be a more modest nominal orderbook, more rationally
priced vessels (for todays market), and perhaps some rate recovery.
Figure 12: Historic And Projected Dry Bulk Orderbook Non-Deliveries
0.0%
5.0%
10.0%
15.0%
20.0%
25.0%
30.0%
35.0%
40.0%
2008 2009 2010 2011 2012 2013E 2014E
19.5%
39.4%
36.1%
28.3%
29.6%
30.0%
15%
Source: Clarksons Research Service, Deutsche Bank
Continued Scrapping Expected, But The Fleet Is Relatively Modern
We expect scrapping to remain elevated in 2013, although lower than record 2013
levels. In 2012, 5.3% of the dry bulk fleet or 32.9 million DWT were scrapped. Capes
and Panamaxes accounted for nearly two thirds of the demolition (on a DWT basis)
while the more modern Handymax fleet saw the least scrapping. Given the weak spot
rates expected, we expect to see continued scrapping in 2013, albeit at a more modest
pace. This is due to our belief that the easier scrapping decisions have already been
made by owners, shedding their older tonnage that was burning cash. The remaining
fleet in the target scrapping range (over 20 years) is only 11%, of which the smaller
Handysize and Handymax vessels, which have outperformed, account for over half of
the aged fleet.

30 January 2013
Marine


Figure 13: Dry Bulk Fleet Age Profile
11% 12%
11%
15%
51%
0%
10%
20%
30%
40%
50%
60%
>20 15-19 10-14 5-9 0-4
Vessel Age (Years)
Handysize Handymax Panamax Capesize Dry Bulk Fleet
Figure 14: Dry Bulk Scrap Prices (2000-Current)
0
50
100
150
200
250
300
350
400
450
500
0.0
1.0
2.0
3.0
4.0
5.0
6.0
7.0
8.0
9.0
10.0
2000 2001 2002 2003 2004 2005 2006 2007 2008 2009 2010 2011 2012
$
/
L
D
T
V
e
s
s
e
l

S
c
r
a
p

V
a
l
u
e

(
$
,

M
i
l
l
i
o
n
s
)
Capesize Scrap Value Panamax Bulker Scrap Value
Handysize Bulker Scrap Value Far East Demolition Prices
30 January 2013
Marine


Tanker Outlook
Weak Global Demand Delays Tanker Recovery
Limited Demand Growth Suggests Only Modest Rate Improvement In 2013
After a fairly lackluster 2012, 2013 is not expected to be much better for the crude
tanker market as global seaborne crude demand is forecasted to grow at 1.0% y/y.
Despite 2013 fleet growth of 3.3%, we see few catalysts for a tanker rate rally this year.
Once again, the market will look for a seasonal rally in late-Q1 and early Q2 as Chinese
crude demand increases. With limited global demand growth, seasonal trends and
external factors (weather, geopolitical events) will likely have an outsized impact for
brief periods, in what should be another lackluster year.
Ton-Mile Demand Expansion Likely As West African Exports Shift To Asia
A key theme, which we are counting on for our modestly improved forecast is for US
imports from the Middle East (primarily Saudi Arabia) to remain flat at 2012 levels.
While increased Canadian and US production have flooded the domestic market with
cheap light crude, we expect continued imports (in the US Gulf) of Middle Eastern
heavy crude. Figure 15 below outlines weekly imports to the US from the major
exporting regions.
Figure 15: Four-Week Rolling Average Of US Crude Imports (2010-Present)
-
500
1,000
1,500
2,000
2,500
3,000
3,500
Jun
04,
2010
Aug
04,
2010
Oct
04,
2010
Dec
04,
2010
Feb
04,
2011
Apr
04,
2011
Jun
04,
2011
Aug
04,
2011
Oct
04,
2011
Dec
04,
2011
Feb
04,
2012
Apr
04,
2012
Jun
04,
2012
Aug
04,
2012
Oct
04,
2012
Dec
04,
2012
1
,
0
0
0

B
b
l
/
D
a
y
Latin America Middle East Africa Canada
Source: Deutsche Bank, EIA
We expect Middle Eastern imports to remain flat given Saudi Arabias own political
interest as well as the eventual start-up of the Motiva refinery. The Motiva refinery
expansion (part owned by Saudi interests) is expected to provide an incremental
325,000 bbl/day of production, which should be sourced primarily from the Middle East.
With AG-US volumes flat, what will drive the expected ton-mile expansion is increased
West African exports to Asia, given the declining US and European import volumes. We
believe North American crude production has displaced the light sweet West African
crude, which will likely find a home in China and other Asian destinations. The longer-
haul voyages on VLCCs and Suezmaxes should help increase total ton-mile demand
helping to offset flat-to-down US long-haul demand.
30 January 2013
Marine


Tanker Supply And Demand Model
Gloomy Demand Outlook Clouds Crude Tanker Recovery Despite Supply Moderating
Our current supply and demand model for the crude tanker sector suggests only
modest improvement from 2012. While we believe we have seen a bottom in the
market, lackluster demand has resulted in an uncertain recovery horizon. With demand
growth of only 1.0% y/y, we rely on ton-mile demand expansion for the modest
increased utilization in 2013. The biggest positive is the limited fleet growth of 3.3% in
2013, which further declines through 2015. Similar to the dry bulk sector, orderbook
growth remains the key risk to the sector.
Figure 16: Tanker Supply And Demand Outlook Overview
2013E 2014E 2015E
Orderbook Slippage 15.0% 5.0% 5.0%
Orderbook Cancellations 15.0% 5.0% 5.0%
IncreasedCrude Storage
(Million DWT)
1.00 1.00 1.00
5
Total Seaborne Crude
(Millions Of
Barrels/Day)
% Year/Year Growth
Global Fleet (Millions
of DWT)
1
% Net Change
Year/Year
DemandIn Terms
Of Vessels
2
Supply In Terms
Of Vessels
2
Implied
Utilization
2000 33.4 221.6 2029 2110 96.2%
2001 33.5 0.4% 215.9 -2.5% 1940 2056 94.3%
2002 33.5 0.0% 219.9 1.8% 1940 2094 92.7%
2003 35.3 5.5% 226.3 2.9% 2096 2156 97.2%
2004 37.1 5.1% 236.7 4.6% 2258 2254 100.2%
2005 37.7 1.6% 253.0 6.9% 2354 2410 97.7%
2006 38.0 0.7% 264.5 4.5% 2371 2519 94.1%
2007 38.6 1.6% 277.4 4.8% 2410 2641 91.2%
2008 38.2 -1.1% 287.2 3.6% 2513 2735 91.9%
2009 36.2 -5.3% 306.6 6.7% 2407 2920 82.4%
2010 37.4 3.3% 319.3 4.2% 2529 3041 83.1%
2011 36.7 -2.0% 341.2 6.8% 2477 3250 76.2%
2012E
1,2
37.3 1.7% 356.9 4.6% 2668 3399 78.5%
2013E
1,2
37.6 1.0% 368.7 3.3% 2862 3512 81.5%
2014E
1,2
38.3 1.7% 373.9 1.4% 3005 3561 84.4%
2015E
1,2
39.0 1.8% 368.0 -1.6% 3060 3505 87.3%
(2) Supply/Demand broken down in Aframaxequivalents. Demand growth converted using an average laden volume of 600,000 barrels and an average of about 8.5 voyages/year.
Supply growth converted by dividing fleet by 105,000 dwt.
(1) Based on Clarkson's Orderbook and Deutsche Bank scrapping, slippage, and cancellation estimates. Excludes clean trading tankers. Total Crude Production data represents IEA, Clarksons and
DB estimates.

30 January 2013
Marine


Figure 17: Tanker Contracted Orderbook Overview
Type of Vessel 2006 2007 2008 2009 2010 2011
Current WorldFleet
(December 31, 2012)
2013E
5
2014E
5
2015
5
VLCC Global Fleet
1
483 499 510 532 539 578 610 666 689 691
(# of Vessels) Orderbook 56 23 2
Y/YGrowth 3.3% 2.2% 4.3% 1.3% 7.2% 5.5% 9.2% 3.5% 0.3%
Suezmax Global Fleet
1
341 355 357 386 410 444 470 536 546 553
(# of Vessels) Orderbook . 66 10 7
Y/YGrowth 4.1% 0.6% 8.1% 6.2% 8.3% 5.9% 14.0% 1.9% 1.3%
Aframax Global Fleet
1
698 740 779 820 836 909 912 937 958 965
(# of Vessels) Orderbook 28 21 7
Y/YGrowth 6.0% 5.3% 5.3% 2.0% 8.7% 0.3% 3.1% 2.2% 0.7%
Total Vessels Global Fleet (Vessels) 1,522 1,594 1,646 1,738 1,839 1,931 1,992 2,139 2,193 2,209
Orderbook 150 54 16
Y/YGrowth 4.7% 3.3% 5.6% 5.8% 5.0% 3.2% 7.5% 2.5% 0.7%
Total DWT (millions)
Global Fleet DWT
(millions)
264.5 277.4 287.2 306.6 319 341 357 388 399 402
Orderbook 31.1 11.1 2.5
Y/YGrowth 4.8% 3.6% 6.7% 4.2% 6.8% 4.6% 8.7% 2.9% 0.6%
(1) Global fleet as of the end of the year.
(2) Orderbook data reflects deliveries during the year specified.
(4) As of January 8, 2013.
(5) Vessel orderbook reflects contracted fleet growth net of scrapping, does not include slippage/cancellation
Source: Clarksons Research Services; Deutsche Bank estimates

Tanker Demand Assumption Overview
Crude tanker cargoes, or seaborne crude, are expected to see a modest improvement in
2013, with higher growth likely in 2014-2015. China and non-OECD Asia are the
primary drivers for growth going forward, with a modest increase in Latin America
expected. Europe is likely to remain a drag on the sector, which is a key importer of
West African crude. Further, we expect flat seaborne imports in the US. In Figure 18
below, we outline the major growth assumptions by region. As a general rule, we
assume 95% of the increased imports from these areas will be sourced from the
seaborne crude market.
Figure 18: DB Seaborne Crude Transportation Volume Growth By Region
Crude I mport Growth By Regi on ( Mbd)
Chi na
OECD
Asi a Europe
Rest of
Asi a
Lati n
Ameri ca Total
Seaborne Crude
I mport Growth ( Mbd)
Y/ Y Seaborne
Crude Growth
2013E 0.4 (0.1) (0.2) 0.2 0.1 0.4 0.4 1.0%
2014E 0.4 0.0 (0.1) 0.2 0.1 0.7 0.6 1.7%
2015E 0.5 0.0 (0.1) 0.2 0.1 0.7 0.7 1.8%
Note: Seaborne crude is assumed to represent 95% of the selected crude import growth.
In Figure 19 below, we have broken down DBs current oil consumption estimates by
region. While the US is expected to modestly increase, we believe this will be sourced
by non-seaborne domestic production and Canadian imports. The continued weak
European economy is expected to drive modest consumption declines through 2016.
China and other Asia continue to be the source of the majority of crude demand
growth.

30 January 2013
Marine


Figure 19: DB Commodities Global Oil Demand Outlook
Unit: Million bbl/day 2010 2011 2012E 2013E 2014E 2015E 2016E
CONSUMPTI ON
OECD Americas 24.1 24.1 23.8 23.9 23.9 23.9 24.0
USA 19.2 19.0 18.7 18.7 18.8 18.9 18.9
OECD Europe 14.7 14.3 13.8 13.6 13.5 13.4 13.3
Germany 2.5 2.4 2.3 2.3 2.3 2.3 2.3
OECD Asia-Pacific 8.1 8.1 8.5 8.3 8.3 8.3 8.4
Japan 4.4 4.5 4.7 4.5 4.4 4.4 4.4
TOTAL OECD 46.9 46.5 46.0 45.8 45.7 45.6 45.6
FSU 4.2 4.4 4.6 4.7 4.9 5.0 5.1
Europe 0.7 0.7 0.7 0.7 0.7 0.7 0.7
China 8.8 9.2 9.6 10.0 10.4 10.9 11.4
Other Asia 10.9 11.0 11.4 11.6 11.8 12.0 12.2
Latin America 6.0 6.3 6.5 6.6 6.7 6.8 7.0
Middle East 7.3 7.4 7.6 7.8 8.1 8.3 8.5
Africa 3.3 3.3 3.4 3.5 3.6 3.6 3.7
TOTAL NON-OECD 41.1 42.4 43.7 44.9 46.2 47.4 48.8
GLOBAL OI L DEMAND 88.0 88.9 89.7 90.6 91.8 93.1 94.3
Tanker Supply Overview
Despite only modest 6.8% and 4.6% fleet growth in 2011 and 2012, the tanker fleet
remains oversupplied. However, declining net growth to 3.3% and 1.4% next year
should modestly reduce the vessel overhang. The Suezmax sector is expected to see
the highest near-term growth with 17.7% of the fleet on order (vs. 12.5% of the total
crude fleet). We expect 30% of the contracted orderbook to not deliver in 2013. Of the
30%, we expect 15% to be driven by order cancellations with the remaining 15%
delayed until 2014. Our 2013 non-delivery estimates are inline with 2010-2012 non-
delivery figures (although the actual breakdown between historical cancellations and
slippage is unknown). After modest scrapping of 2.7% of the fleet in 2012, we are
expecting slightly lower tanker demolition of 2.5% in 2013, declining to 2.0% in 2014.
Crude Tanker Fleet Orderbook Overview
Excluding slippage, cancellation and scrapping, only 12.5% of the total crude tanker
fleet is currently on order. The largest orderbook is in the already oversupplied Suezmax
and VLCC markets with 18% and 14% of their respective operating fleets due for
delivery by 2015. However, the majority of the orderbook is due for delivery in 2013,
leaving negligible fleet growth in 2014 and beyond.
30 January 2013
Marine


Figure 20: Current Vessel Orderbook As % Of Delivered Fleet & Delivery Time
10%
4%
0%
14%
14%
2%
2%
18%
3%
2%
1%
6%
9%
3%
1%
13%
0%
2%
4%
6%
8%
10%
12%
14%
16%
18%
20%
2013E 2014E 2015E Total Ordebook
VLCC Suezmax Aframax Tanker Fleet
Excludes slippage, cancellation and scrapping
Source: Clarksons Research Services
Non-Deliveries Expected To Keep Pace In 2013
We are forecasting fairly consistent y/y non-deliveries in 2013 vs. 2012. Similar to the
dry bulk sector (see Page 17), orderbook overstatement as well as defaulting owners
are the primary driver for our cancellation estimates. Further, owners with negotiating
leverage have been successful in delaying order deliveries, resulting in our continued
high (15%) slippage estimate.
Figure 21: Historic And Projected Total Crude Tanker Order Non-Deliveries
0.0%
5.0%
10.0%
15.0%
20.0%
25.0%
30.0%
35.0%
2009 2010 2011 2012 2013E 2014E
22.1%
32.9%
30.3%
32.2%
30.0%
10%
Source: Deutsche Bank, Clarksons Research Services
Age Discrimination Continues, But We Do Not Expect A Scrapping Surge
Unlike the dry bulk sector, the tanker market is generally a young fleet. The 2010 phase-
out of single hull tankers has led to the vast majority of tankers aged less than 20 years.
Despite the modern fleet age, charterers are seeking more fuel efficient and better-
designed tankers (and in a weak market they can be selective). As a result, tankers
older than 15-years old will likely realize lower average spot earnings over the course of
the year. However, the discrimination is supply based and if the market rallies, we
expect older tankers to be more competitive. Conversely, in the weak summer months,
they may incur longer wait times between cargoes or take spot-rate discounts. This
should encourage the continued scrapping of the older fleet, but given the small pool,
scrapping will likely remain at modest levels. Figure 22 below outlines the current age
profile and Figure 23 depicts current scrap values.
30 January 2013
Marine


Figure 22: Tanker Fleet Age Profile
0.0%
5.0%
10.0%
15.0%
20.0%
25.0%
30.0%
35.0%
40.0%
45.0%
>20 15-19 10-14 5-9 0-4
Vessel Age (Years)
VLCC Suezmax Aframax Total
Figure 23: Tanker Scrap Pricing (2000-Current)
0
100
200
300
400
500
600
0
2
4
6
8
10
12
14
16
18
20
2000 2001 2002 2003 2004 2005 2006 2007 2008 2009 2010 2011 2012
$
/
L
D
T
V
e
s
s
e
l

S
c
r
a
p

V
a
l
u
e

(
$
,

M
i
l
l
i
o
n
s
)
VLCC Scrap Value Suezmax Scrap Value
Aframax Scrap Value Far East Demolition Prices

30 January 2013
Marine


Container Outlook
Liners Maintain Better Pricing Discipline Amidst Oversupply
While 2001 was a tough year for the liner trade, 2012 was the year of liner discipline.
Even as containership capacity outweighed increased demand, rates were able to rally.
The key difference was the focus on pricing and not market share. Liners decreased
active tonnage (through lay-ups and charter roll-offs), reduced service offerings and
shifted vessels to different routes all in an effort to increase spot freight rates by
keeping capacity artificially tight. The result was average 2012 spot container freight
rates up 60% and 38% from Asia to Europe, and to the US West Coast respectively.
In 2013, we expect this strategy to continue as larger vessels continue to hit the water
and demand is expected to grow in the mid-single digits. Rates are already up y/y as we
near the Chinese New Year (Figure 24 below). However, it is unclear if rates will sustain
current high levels and the options market is pricing modest downside for Q1 before a
peak season rally.
Figure 24: Current Spot Container Freight Rates
Absolute % Absolute % Absolute %
SCFI 1,228 1,246 (18) (1.5%) 1,147 81 7.1% 983 245 25.0%
Europe 1,326 1,349 (23) (1.7%) 1,237 89 7.2% 737 589 79.9%
Med 1,301 1,311 (10) (0.8%) 1,130 171 15.1% 779 522 67.0%
USWC 2,497 2,520 (23) (0.9%) 2,231 266 11.9% 1,825 672 36.8%
USEC 3,657 3,670 (13) (0.4%) 3,387 270 8.0% 2,961 696 23.5%
Last Year
Y/YVariance
SCFI 1/25/2013 1/18/2013
W/W Variance M/MVariance
Last Month
Source: Deutsche Bank, GFI
USWC and USEC rates continue to outperform the more volatile European and
Mediterranean routes. Better demand, more long-term freight contracts and better
route rationalization have helped maintain a firmer market. Key risks to the route are
port strikes and US economic growth.
Container Fleet Should Outpace Demand In 2013
Contracted fleet growth of 11.3% in 2013 will not be able to keep up with our
forecasted container demand growth of 4.5% (1.4x world GDP). As with last year, we
expect weak economic growth in Europe and modest US economic growth. These two
regions account for the majority of long haul demand due to the high dependency on
Asian exports. We expect continued strong growth in emerging Asia, which is generally
a short-haul trade (intra-Asia). We therefore believe time charter rates will remain weak
(absent continued active supply-side rationalization) and we could see further asset
value declines. However, rates may show intra-year volatility as liners could seek short-
term charters to augment peak season supply needs or if global GDP estimates prove to
be too low. If the US consumer were to materially reaccelerate, increased Asia-US
activity would not only boost demand, but also the global trade multiplier.

30 January 2013
Marine


Container Demand Outlook
Container Trade Growth Rate Slows Compared To GDP
Inline with our 2012 expectation, the global container trade multiple vs. world GDP has
materially contracted from 2010-11 levels and historical averages. In 2012, Clarksons
estimates container trade growth of 4.0%, which is 1.4x DBs GDP estimate of 2.9%.
This figure is well below the 2011 multiple of 2.2x, the historical average of 2.3x (since
2000, excluding 2009) and relatively inline with our January 2012 estimate of 1.5x.
Figure 25 below outlines historical trade growth and GDP multipliers. Given DBs
current 3.2% 2013 GDP estimate we currently forecast growth of 4.5% in 2013 (a 1.4x
multiple).
Figure 25: World GDP Vs. Container Trade (2000-2012)
0.0x
0.5x
1.0x
1.5x
2.0x
2.5x
3.0x
3.5x
4.0x
-10.00%
-5.00%
0.00%
5.00%
10.00%
15.00%
2000 2001 2002 2003 2004 2005 2006 2007 2008 2009 2010 2011 2012E
World GDP Container Trade Trade Growth Multiplier
Exacerbating the more modest trade growth multiplier is the increase in intra-Asian
trade. We expect the majority of growth this year to come from emerging markets,
particularly in Asia. Asian demand is largely regional (i.e. China-Singapore), which are
short-haul trade routes. The impact of the Asian growth is negative mix-shift for ton-
mile demand at the same time as we are set to experience strong fleet growth.
However, new North-South trades may provide longer haul demand than intra-Asia as
Latin American and African demand increases. These routes are still not as long as the
Asia-Europe or Asia-USEC voyages.
Another growing trend that is included in our total trade demand is increasing backhaul
volume. Greater volumes of containers are moving from the US and Europe to Asia.
These movements require no additional capacity as ships have ample space on return
voyages.
World Trade Growth Forecasts
DB is currently forecasting worldwide GDP growth of 3.2% and 4.0% in 2013 and 2014
respectively. This growth is driven by strong emerging market demand in non-OECD
Asia, Latin America and EMEA. US and Euroland regions are expecting more modest
GDP growth of 2.0% and (0.3%) in 2013 respectively. Figure 26 below outlines DBs
current GDP forecasts for 2012-14.
30 January 2013
Marine


Figure 26: DB Worldwide GDP Growth Forecasts
Real GDP (% Growth)
2012E 2013E 2014E
United States 2.3 2.0 2.9
Euroland -0.5 -0.3 1.1
United Kingdom -0.1 0.9 1.8
Japan 2.0 0.6 0.6
Asia (ex Japan) 5.9 6.7 7.5
India 4.6 6.8 7.1
China 7.8 8.2 8.9
Latin America 2.7 3.5 3.9
Brazil 1.0 3.5 4.2
EMEA 3.0 3.5 3.9
Russia 4.0 4.3 4.2
G7 1.5 1.2 2.0
World 2.9 3.2 4.0
Source: DB Estimates
As of 1/18/13

Container Supply Outlook
Super Post-Panamax Fleet Deliveries Drive Fleet Growth
The current containership orderbook is dominated by the new fuel-efficient super post-
Panamaxes favored by the liners (72% of the orderbook on a TEU basis). The ships
slower, long-stroke engines as well as greater capacity and can cut fuel costs by 20%
reducing total per/TEU transportation costs. The slightly smaller, yet still efficient 5,000
TEU to 8,000 TEU), compose 17% of the fleet with most deliveries set for 2013. These
vessels compose over 90% of the orderbook. Overall, the fleet is set to grow by 11.3%
and 6.4% in 2013 and 2014 excluding scrapping and non-deliveries.
Figure 27: Current Orderbook Composition By Vessel Size
Handy &
Feeder 2.9%
Sub-
Panamax
2.3%
Panamax
3.0%
Post-
Panamax
16.9%
Super Post -
Panamax
72.9%

30 January 2013
Marine


Figure 28 below outlines the current orderbook profile by ship class and delivery date.
Panamax and smaller ships have fairly negligible orderbooks (5.0% or less) while post-
Panamax and super post-Panamax ships currently have 19.3% and 53.0% of their fleets
on order.
Figure 28: Current Containership Orderbook Profile (% of Current Fleet)
4%
5%
3%
15%
3%
2%
0%
19%
24%
19%
9%
1%
53%
11%
6%
3%
0%
21%
0.0%
10.0%
20.0%
30.0%
40.0%
50.0%
60.0%
2013 2014 2015 2016 Total
Handy & Feeder Sub-Panamax Panamax Post-Panamax Super Post - Panamax Total
Super Post-Panamax vessels not only make up the
vast majoirty of the orderbook, but also imply 53%
fleet growth.
Our figures do not include any non-deliveries (slippage or cancellation) nor do they
include any scrapping. We have outlined contracted fleet growth by vessel segment in
Figure 29 below.
Figure 29: Contracted Containership Fleet Growth (Gross)
Handy &
Feeder Sub-Panamax Panamax
Post-
Panamax
Super Post -
Panamax Total
2013 3.3% 3.4% 2.4% 14.7% 23.5% 11.3%
2014 0.7% 1.2% 0.0% 2.8% 19.3% 6.4%
2015 0.0% 0.1% 0.1% 1.7% 8.8% 2.9%
2016 0.0% 0.0% 0.1% 0.1% 1.3% 0.4%
Total 3.9% 4.7% 2.6% 19.3% 53.0% 21.1%
Non Deliveries Could Help Moderate Fleet Growth
Historically, containership non-deliveries have been more modest than typically seen in
the tanker and dry bulk sectors. However, last year, with tanker and dry bulk non-
deliveries trending near 30%, while the containership sector was closer to 21% of the
2012 orderbook not delivering. Unfortunately there is no precise way to tell how much
of the orderbook that did not deliver was a result of delays or actual cancellation/false
orders. While shipyard delays are common and often can push off deliveries for months
or even years, cancellations are obviously the most beneficial to lowering supply
growth.
Current Fleet Profile
As in the dry bulk and tanker shipping sectors, the containership fleet is heavily skewed
towards larger vessels. Currently, post-Panamaxes and super post- Panamaxes account
for over 49.9% of the delivered fleet. Figure 30 below outlines the containership fleet by
vessel size.
30 January 2013
Marine


Figure 30: Current Fleet Profile By Size
4.4%
10.9%
10.5%
24.2%
21.0%
28.9%
0.0%
5.0%
10.0%
15.0%
20.0%
25.0%
30.0%
35.0%
Feeder (100-999
TEU)
Handy (1,000-1,999
TEU)
Sub - Panamax
(2,000-2,999 TEU)
Panamax (3,000-
5,000 TEU)
Post - Panamax
(5,000-7,999 TEU)
Super Post -
Panamax (8,000 TEU
& Over)
(
%

o
f

C
u
r
r
e
n
t

T
o
t
a
l

F
l
e
e
t
)
Vessel Segment
Scrapping Could Play A More Important Role As Older Ships Age
While most vessels have useful lives between 20-30 years, containerships have
historically been skewed towards the longer-end (i.e. 25-35 years). Actual vessel age
will ultimately be driven by the strength of the market as vessels enter their fourth and
fifth special surveys (at age 20 and 25). A poor near-term outlook may cause an owner
to scrap a ship rather than potentially invest millions of dollars in new steel and
equipment to keep the vessel trading for another five years. Historically, scrapping has
had a modest impact in comparison to overall fleet size. However, new fuel efficient
designs and the relative inefficiency of aging vessels could lead to higher scrapping
rates as these ships find it more difficult to compete for business and/or becomes
dilutive. Figure 31 and 32 below outline the current fleet age profile and historical
scrapping.
Figure 31: Fleet Age By Sub-Panamax and Larger Ships
12%
34%
19%
23%
8%
5%
37%
36%
15%
9%
2%
1%
31%
36%
16%
12%
4%
2%
0%
5%
10%
15%
20%
25%
30%
35%
40%
0-4 5-9 10-14 15-19 20-24 25+
%

O
f

C
u
r
r
e
n
t

F
l
e
e
t

(
b
y

D
W
T
)
Vessel Class Buy Age (Years)
Sub-Panamax Panamax & Post-Panamax Total Fleet

30 January 2013
Marine


Figure 32: Historical Containership Scrappage (1996-2012)
0.7% 0.7%
2.1%
1.2%
0.3%
0.7%
1.1%
0.4%
0.1%
0.0%
0.2%
0.2%
0.8%
2.9%
0.9%
0.5%
2.0%
0.0%
0.5%
1.0%
1.5%
2.0%
2.5%
3.0%
3.5%
-
50
100
150
200
250
300
350
400
1996 1997 1998 1999 2000 2001 2002 2003 2004 2005 2006 2007 2008 2009 2010 2011 2012
(
1
,
0
0
0

T
E
U
)
Total Scrapping Scrapping (% of Fleet)
Source: Deutsche Bank, Clarksons Research Services

30 January 2013
Marine


Shipping Cheat Sheet
DBs Shipping Cheat Sheet
Given the potential for shipping markets to turnaround post-2013 as well as increased
investor interest, we wanted to provide a cheat sheet or refresher notes, for the major
shipping segments, with each sectors key drivers in this section.
Ocean Shipping Enables Nearly All Global Trade
Ocean shipping touches nearly every part of global trade through the transportation of
raw and refined commodities and manufactured goods. Ships carry everything from
iron ore, coal, grains, oil and oil products to manufactured goods such as furniture,
components, clothing and other low-cost or large scale items. Finished goods are most
often moved in containers vs. raw materials and commodities which are often moved in
bulk (although exceptions exist). Marine shipping is the lowest cost transportation
provider and has only one competitor in the intercontinental transportation space (high-
cost, low-capacity airfreight). Marine shipping can be separated into four main
segments:

Dry Bulk specializing in break bulk dry cargoes such as coal, iron ore and
grains;

Tankers carrying crude and refined products;

Containers transport standardized containers (20ft or 40ft), generally filled
with manufactured goods and components; and

Specialized Ships which is a catch-all that includes smaller shipping segments
such as LNG, LPG, chemicals, roll-on roll-off ships and others. These vessels
are generally non-interchangeable with varied cargo types and sizes.
While demand each sector is generally sensitive to worldwide GDP or trade growth,
each individual sector has its own supply and demand fundamentals. In the public
market, we focus mostly on the three main segments (dry bulk, tankers and containers),
although LNG has become a bigger focus in the specialized segment.
The Industry Has Faced An Oversupply Of Tonnage
The key theme that has plagued most shipping markets for the past several years has
been vessel oversupply. Underinvestment in new ships leading into the first half of the
last decade (2000-2005), coinciding with strong OECD growth and Chinas entry into
the World Trade Organization, tightened the supply/demand dynamic for shipping
commodities (tanker and dry bulk cargoes) as well as manufactured products
(containerized cargo). As supply remained constrained and demand firmed, rates
materially rallied between 2005-2008. During this period, owners placed orders for new
ships to take advantage of the strong market. However, it takes at least 18-36 months
to construct a new ship. The rush to order ships and increased yard capacity in Asia
(predominately at new yards in China) led to overbuilding in the dry bulk, tanker and
containership sectors. These ships began to deliver into a weakening market (post-
credit crisis) because a ship ordered in 2005 as demand was heating-up, didnt deliver
until 2008 and by then it was too late. The shipping markets are now finally beginning
to see the pace of newbuilding deliveries moderate, and demand is forecasted to
outpace supply growth once again in some cases.
30 January 2013
Marine


Ton-Mile Demand Remains A Key Focus
In shipping, we are not only focused on total demand, or the volume of cargoes
transported, but also how far they are moved. Ton-mile demand is the measure the
quantity of cargoes and distanced the cargo is transported. Longer-haul voyages will
reduce the amount of cargoes a ship will be able to load each year (as it will spend
more time on each voyage). Fewer trips per year will reduce the effective carrying
capacity, or overall supply of a fleet. Simply, a VLCC (two-million barrel super tanker)
moving crude from the Middle East-to-Asia will have a roughly 45 day round trip
voyage. The same amount of cargo moved from the Middle East to the US Gulf will
take nearly 90 days round trip. The same VLCC moving crude to Asia will be able to
transport roughly 16 million barrels per year (two million bbl cargoes x eight trips per
year) while the US bound ships will carry only 8 million barrels per year.
Dry Bulk Basics
Dry Bulk Cargoes

Dry bulk vessels carry bulk (typically unpackaged or loose) dry cargoes in the
ships hulls. The major cargoes are iron ore, coal (thermal and coking), grain,
fertilizer and steel products. Figure 33 below outlines the market share of the
major dry bulk cargoes:

Figure 33: Dry Bulk Cargoes By Commodity Type
27.6%
19.8%
5.7%
8.8%
38.1%
Iron Thermal Coal Coking Coal Grain Minor Bulks*
*Minor Bulks compose the rest of the dry bulk cargo types and include alumina, scrap steel, bauxite, fertilizer,
pig iron cement, nickel ore etc.
Source: Clarksons Research Services

Iron ore: the largest single dry bulk commodity transported (28% of estimated
2012 dry bulk cargoes)

Exported primarily from Australia, and Brazil (with India, South America
and Canada playing more minor roles)

Imported primarily to Asia (85% of seaborne ore) and Europe (10% of
seaborne ore), however China alone accounts for 65% of worldwide
seaborne iron ore imports

Used in steel production
30 January 2013
Marine


Coal: Thermal and coking (metallurgical) coal together accounted for an
estimated 26% of the dry bulk trade in 2012, although 77% of all coal
transported is thermal coal (used for electricity generation and industrial uses)

Thermal Coal Exports: Thermal coal is primarily exported from Indonesia
and Australia (64% of the market), with Colombia, South Africa, Russia and
USA exporting minor amounts

Thermal Coal Imports: While 75% of the thermal coal is exported to Asia,
China controls less of the trade with only an 18% worldwide market share
(India, Japan and South Korea import fairly similar volumes). Europe
accounts for 19% of the market, which is primarily sourced from the
Atlantic Basin

Coking Coal Exports and Imports: Coking coal or metallurgical coal (used in
steel production) is exported from Australia (66% of the market) with the
remaining volumes sourced from the US and Canada. Asia imports 68% of
the coal (Japan, India, China and South Korea)

Grains: This cargo class accounts for 8% of total dry bulk volumes and has a
more diversified trading pattern with a greater number or export and import
regions

Grain Exports: Grain is exported from five principal countries/regions
consisting of (in order of size): USA, Australia, Canada, Europe/Russia and
Argentina

Grain Imports: While Asia is the largest importer of grain (30% of the
market), Africa, Central and South America, Middle East and Europe
(includes the FSU) all import substantial volumes

Highly seasonal: Grain volumes peak with regional harvests; the Fall for the
Northern Hemisphere (North America and Europe) and Spring for the
Southern Hemisphere (South America and Australia)

Other Cargoes: The remaining cargo base of the dry bulk sector is more
fragmented and less defined in import and export regions. These cargoes
include other minerals (nickel ore, alumina, bauxite), steel (scrap and coiled),
fertilizers, cement, aggregates and other goods

Figure 34: Major Dry Bulk Import Market Share By Region
China Asia (Incl. China) Europe North America
Iron Ore 64.9% 85.3% 10.0% 0.1%
Thermal Coal 17.5% 75.1% 18.7% 0.8%
Coking Coal 14.1% 68.0% 19.6% N/A
Grain 3.7% 30.2% 9.1% N/A


30 January 2013
Marine


Vessel Types & Cargoes

Capesize: These are generally the largest dry bulk ships in the market with
deadweight tonnage (DWT, total carrying capacity) ranging between
150,000-220,000 DWT

Given the substantial carrying capacity of the ships, the vessels are limited
to only two types of cargo, coal and iron ore, which trade in the larger lot
sizes

Capes are employed on long-haul routes; typically Australia Asia, South
America Asia, trans-Atlantic

Too big to fit through the Suez and Panama Canals, the ships traverse the
Cape of Good Hope or Cape Horn (hence, Capesize)

Capes require substantial port infrastructure including deepwater ports,
and efficient loading and unloading systems

This segment also includes Very Large Ore Carriers (VLOCs) which are
dedicated to the long-haul iron ore trade and can be in excess of 400,000
DWT

Panamaxes/Kamsarmaxes: Panamax ships and their slightly larger cousin, the
Kamsarmax, are between 60,000 92,000 DWT

They primarily carry coal, iron ore and grains

The vessel are employed on medium-to-long-haul routes; trans-Atlantic and
trans-Pacific, USG/South America Asia, intra-Asia and Australia Asia

Largest ships able to transit the Panamax Canal (except Kamsarmaxes)

Panamaxes are the work-horses of the dry bulk fleet, they mostly carry the
major bulk cargoes, as well as some smaller diversified cargoes

Supramaxes/Handymaxes: Supramaxes and the smaller Handymaxes are
smaller more versatile bulkers generally outfitted with cranes (geared) between
45,000-60,000 DWT.

Transport major bulks, but handle more minor bulks than Panamaxes

Used both for regional trades and longer-haul trades

A shallower draft (how low the ship sits in the water) allows the ships to
access shallower, more remote ports, while cranes allow for the vessel to
load and unload its own cargoes. As a result, these ships are highly flexible
offering near the carrying capacity of a Panamaxes in some cases, but
requiring significantly less port infrastructure.

Handysize: Smaller than the Supramaxes, and are similarly versatile.
Handysizes are vessels below 45,000 DWT.

In addition to the standard cargoes, Handysize ships will often transport
various project cargoes at times (odd-sized items that cannot fit in
containers)

These ships will generally travel on shorter regional routes

Access to smaller ports than Supramaxes/Handymaxes

30 January 2013
Marine


Figure 35: Major Dry Bulk Trading Patterns

Dry Bulk Demand Drivers

Steel production: Steel production, particularly in Asia and Europe is the key
driver to the seaborne iron ore and coking coal trades. The dry bulk sector can
largely be driven by Chinese steel production alone

Particularly sensitive to infrastructure spending, construction and
manufacturing

US steel production is covered by domestic iron and coal, so it is not a
material driver in the segment

Electricity generation: Thermal coal is primarily used for electricity generation
and industrial production

Industrial growth: General industrial growth and increased manufacturing will
drive minor bulk trade growth (alumina, copper, nickel etc) in addition to coal
and iron ore trade

Grain Harvests: Regional harvest yields can drive seasonal grain trades with the
North American season peaking in late-summer to early-Fall and the southern
hemisphere in late-winter and Spring

Weather: Storms or flooding can often cause mine production issues (rain
season in Q1 for Australia and Brazil) or transportation disruptions. Poor
weather can also affect grain harvests and impact total grain and fertilizer
trades

30 January 2013
Marine


Tanker Basics
Tanker Cargoes

The bulk tanker trade is dominated by the transportation of crude oil and
refined petroleum products. However, more specialized tankers are also
engaged in the transportation of vegetable oils, chemicals and other liquids
(not covered herein).

Crude: Crude is the dominant tanker cargo, and is generally transported in the
larger tankers from crude producing regions to refining centers.

Export regions: The Middle East is responsible for 48% of the estimated
37.3 million b/d of seaborne crude. Africa exports roughly 20% while the
Former Soviet Union countries and Latin America each export between
10%-15% of global seaborne volumes.

Import destinations: While Asia is the largest import region, it still
represents less than half of the market with a 48% share (China alone
imports 13.1% of the global seaborne supply). Europe imports nearly 23%
of the seaborne supply with North America declining to an 17% share
(from 22% in 2009)
Figure 36: Crude Seaborne Import Market Share

Figure 37: Crude Seaborne Export Market Share
36%
13%
17%
23%
12%
Asia (ex. China) China US EU Other

48%
12%
19%
21%
Middle East Latin America Africa Other


Products: The product tanker trade consists primarily of refined petroleum
products. Gasoline and diesel are the most transported products accounting for
roughly 70% of the global trade. Naptha (used in the production of gasoline
and plastics), fuel oil (for bunkers [ship fuel], as well as industrial and heating
purposes), jet fuel (includes kerosene) and other minor products account for the
remainder.

Exports: The export of products will depend on two factors, refinery
capacity and demand. The US, Europe and Asia are key refining regions,
but local demand factors will help determine exports. For example, the US
has become a key exporter of distillates given our weak domestic demand,
low cost crude and refinery capacity. However if domestic demand were to
30 January 2013
Marine


increase, the exports would drop. Currently, the US, Middle East, Europe
and Asia are the major export markets.

Imports: Although China is a large consumer of petroleum products, it
largely utilizes its own refining capacity for its consumption. The largest
import market for product is developing Asia, accounting for over 25% of
the 18.4 million b/d market, while Asia Pacific as a whole accounts for
40%. Europe is the next largest region, with a 30% share, consisting
primarily of diesel and other distillates. Latin America, the US and Africa
import the remainder.

Very Large Crude Carrier - VLCC (>200,000 DWT): The largest tankers in
operation, generally capable of carrying 2 million bbls of crude in a single
voyage.

VLCCs generally transport crude oil, or heavy distillates

Employed on longer-haul routes such as Arabian Gulf (AG)-Asia, AG-
Atlantic, West Africa-Asia

Too big to fit through the Suez and Panama Canals fully laden (although a
VLCC can fit through the Suez Canal partially loaded)

Requires deep water ports or offshore discharges and onshore storage
infrastructure

Suezmax (120,000-200,000 DWT): With roughly half the carrying capacity (1
million barrels), but more modest draft, Suezmaxes are more versatile than the
larger VLCCs

Similar to VLCCs, Suezmaxes will generally carry only crude or heavy
distillates

Medium-to-long-haul routes; AG-Asia, trans-Atlantic, cross-Mediterranean
and West Africa-Europe

Can traverse the Suez Canal fully laden

Aframaxes (LR2 Product Tankers) (80,000-120,000 DWT): Aframaxes are the
workhorses of the crude trade with more shallow drafts and 500,000 bbl
capacities

Aframaxes predominantly carry crude and heavy distillates, but some
tankers have coated tanks (LR2 Long-Range 2) that allow them to carry
petroleum products

When carrying crude, the ships are generally used for more regional
trades: cross-Mediterranean, cross-Caribbean, North Sea, intra-Asia and
AG-Asia

LR2s are (for the most part) the largest product tankers in operation and
are employed on long-haul voyages such as Europe-Asia, AG-Asia

Aframaxes smaller sizes allow the ships to fit into many more ports and
the cargo size allows for a more diverse customer base

Panamaxes (LR1 Product Tanker) (60,000-80,000 DWT): Over 75% of
Panamaxes are coated, allowing them to trade refined products. With a DWT of
roughly 75,000 (300,000 bbls), an LR1s smaller size favors the carriage of long-
haul products or very short-haul crude cargoes.
30 January 2013
Marine


Product LR1 trades are more biased towards the Pacific and long-haul
markets, AG-Asia or intra-Asia

Crude voyages are focused on the Caribbean and trans-Atlantic markets

Can traverse the Panama Canal fully-laden

Handysize(max) (MR Product Tanker) (30,000-60,000 DWT): The Handysize
tankers are generally referred to as MRs, or Medium Range, and are focused on
the product trades

Small cargo sizes

Modest vessel sizes allow for access to most ports

Generally employed on regional trades in the Atlantic and Asia

This segment accounts for nearly 70% of all product tankers
Figure 38: Major Crude Tanker Trade Routes

30 January 2013
Marine


Crude & Product Demand Drivers

Crude Production: Crude production, offshore or onshore, is the primary driver
of the crude and product tanker trades

If crude is being produced, it will generally be shipped (either on land or by
tanker) and will most likely be refined into products

Highly Dependent On The Geographic Location Of Demand: The caveat to
crude oil production driving tanker demand comes down to where the demand
is located and where it is sourced from. Demand needs to be sourced from
regions which do not have inland or near-sourced crude access, such as Asia
or Europe. The US used to be solidly in this camp as well. Recent trends have
shown strong growth in Middle East demand, however, this will not require
tankers for transportation. Currently, increased US demand can be served by
US and Canadian production, implying a minimal impact to the seaborne trade.

The same holds true for products, if demand for products increases,
seaborne demand will be driven by whether the region has its own refining
capacity

Not Correlated To Crude Or Gasoline Prices: Crude or gasoline prices are not
directly correlated to tanker demand. In general, the only thing that drives
tanker demand is the movement of cargoes. Speculation, geopolitical risk and
other factors can impact the price of the commodities but not the volume
transported. Demand led price increases or declines will affect tanker demand.

While product prices on average will not drive demand, price differentials
between regions encourage demand. The product markets will often
develop regional price disparities which traders and oil companies will
exploit. For example if the cost of gasoline in Singapore is more than the
cost of gasoline in Europe plus the cost of transportation, the market will
see increased Europe-Singapore voyages to close that arbitrage.

30 January 2013
Marine


Container Basics
Containerized Cargoes

Unlike the dry bulk and tanker segments, containerships do not carry bulk
goods, rather steel containers that are generally 20 or 40 feet in length (though
these containers can sometimes contain bulk goods). Containers can be filled
with virtually anything from manufactured goods to scrap metal.

We generally refer to capacity in the container sector on a twenty-foot
equivalent (TEU) basis, which is a 20ft box (a 40ft box equals 2 TEU). For
example, a 10,000 TEU ship can hold 10,000 20ft containers or 5,000 40ft
boxes.

Dry Containers: Dry boxes compose the vast majority of containership cargoes
and are generally either 20 or 40 feet in length. The versatile boxes can be filled
with nearly anything, but are generally focused on lower-value or large-scale
manufactured and retail goods such as appliances, clothing, building materials,
auto parts (and sometimes cars), scrap steel and other items.

Refrigerated Containers (Reefers): The transportation of perishable cargoes that
require refrigeration has been a fast growing trade. Fruits, vegetables and
meats used to be carried in pallets or bulk forms in refrigerated ships, but the
increase in containerized cargoes and diversification of end-markets has led to
a more efficient method through refrigerated reefer containers.

Reefers reduce the total cargo size needed for transportation (need to fill a
smaller container rather than ship hold)

Direct or close-to-direct access to more end markets with more
containership sailings

Can increase backhaul-trades for ships, when they are generally
underutilized

Specialized Containers: The smallest container segment is the specialized
segment. Included in this segment are tank containers, open tops, flat racks
and odd-sized boxes.

Tank containers are used for smaller bulk liquid cargoes (tanks are
generally 20 feet in length and can carry up to 26,000 liters depending on
its configuration

Open tops and flat racks are containers missing either the top or top and
sides which allow for odd-sized cargoes.
Trade Patterns

Unlike the dry bulk and tankers markets which follow a tramp model, the
container sector generally operates through dedicated trading routes, with
vessels operating in a loop around specific ports. The key trade lanes are Asia-
Europe, Asia-US West Coast, and intra-Asia.

Asia-Europe: This is the most important route in the container sector given
its 20% market share and the longest distance travelled (high ton-mile
demand).
30 January 2013
Marine


Asia-USWC (Transpacific): With roughly the same market share, Asia-US
West Coast is another key trade route, but at half the voyage length, has a
more modest ton-mile impact than Asia-Europe

Intra-Asia: Container transportation in the Asia-Pacific region is the highest
volume region with 40% of all container trade in 2012. However, the
voyage lengths in the region are among the shortest.

NorthSouth: Container trade between the Northern and Southern
Hemispheres is the last major trading route. This encompasses trades
between South America and North America, Africa and Europe and other
North-South voyages. It is highly emerging market driven.
Figure 39: Global Container Trading Patterns


Super Post-Panamax / Ultra Large Container Vessels (>8,000 TEU): Ultra Large
Container Vessels (ULCV), are the newest class of containerships focused on
the long-haul container trades to the US and Europe.

Large carrying capacity creates cost efficiencies, lowering the
transportation costs per TEU when fully utilized

Too large to fit through the Panama Canal (but up to 12,500 TEU can
transit the to-be-completed expanded canal)

Requires deeper draft ports and larger cranes to load and unload; the
vessels do not have cranes

Post-Panamaxes: (5,000-8,000 TEU): The Post-Panamax segment is the older
generation of large containerships, which are too big to fit through the Panama
30 January 2013
Marine


Canal, but not as large or efficient as the ULCV segment. These ships are
generally employed on the Asia-Europe and Asia-US trades

Large carrying capacity creates cost efficiencies, lowering the
transportation costs per TEU, but not as high as the ULCVs

Too large to fit through the Panama Canal

Generally do not require the same sized larger cranes as the ULCV
segment

Panamax (3,000-5,000 TEU): The most common containerships are the
Panamax vessels which can be fitted with or without its own cranes.

Employed on various trade routes from long-haul to regional trades

Able to traverse the Panama Canal

Handysize (1,000-3000 TEU): Sub-Panamax containerships, which generally
have their own cranes attached

Used in regional trades, can be used as feeder ships in a spoke and hub
model

Shallow draft and gearing allow access to limited ports and emerging
markets

Feeder (<1,000 TEU): Smallest containerships which generally have cranes and
very shallow drafts

Used for short-haul regional trades to smaller markets (emerging markets
or smaller islands

Small sizes allows for navigation up rivers or locations with little-to-no
infrastructure
Container Demand Drivers

Global GDP: We view container shipping as the most broadly correlated to
worldwide GDP. The container sector has historically grown at a 2.0x-2.5x
multiple to world GDP. Given the diverse cargo types and the reliance on both
OECD and emerging demand, it is more sensitive to macro growth trends than
the other shipping markets. However, we have seen trade growth multiple
contraction as US and European GDP has weakened. We expect weaker
growth multiples (1.4x in 2013) going forward.

Industrial Production: Since much of the containerized cargoes are
manufactured goods or components for goods, industrial production should be
a key driver to containerized demand

Retail Spending: Retail goods built overseas from end-markets are often
transported on containers. Changes in retail spending or sentiment may impact
regional trade volumes.

Emerging Market Growth: Growth in emerging markets and expanding middle
classes increases spending on retail and food goods. Emerging markets have
also served as key sources for growth in the reefer box trade as fruit and meat
imports have increase with wealth.

30 January 2013
Marine


Valuation & Risks
Dry Bulk Valuation & Risks
Genco Shipping & Trading (GNK, Sell, $3.69)

Valuation: Our price target of $1 is based on a 1.3x asset value premium. We
have applied a 30% premium to GNKs current charter-free fleet value in our
net asset value calculation. Our premium asset valuation reflects GNKs
negative net asset value on a market basis; as well its current cash-on-hand
which combined with a debt renegotiation later this year may provide some
optionality to a recovering market.

Risks: Upside risks include improving spot rates, appreciating asset values and
a longer-term debt restructuring.
Dryships (DRYS, Hold, $2.28)

Valuation: Our price target of $2 is based on our unchanged 0.8x NAV
estimate. The discount to NAV reflects the weak dry bulk and tanker markets
as well as capex and related party overhangs.

Risks: Upside risks include improving spot rates, rising asset values and Ocean
Rig (ORIG, $17.47) monetization at attractive valuations. Downside risks
include limited access to capital, declining shipping rates and values expansion
into non-core sectors.

Tanker Valuation & Risks
Capital Product Partners (CPLP, Hold, $8.15)

Valuation: Our price target of $8 is based on a 9.5x EV/EBITDA multiple applied
to our 2014 EBITDA estimate of $128 million. While our multiple is inline
CPLPs historical average of 9.3x, driven by CPLPs maintenance of its
$0.93/unit distribution.

Risks: Upside risks include higher-than-expected spot and charter rates and
increased dividend distribution. Downside risks include weak vessel charter
rates, lower demand for product tankers, a distribution cut and related party
transactions.
Frontline Ltd. (FRO, Sell, $3.52)

Valuation: Our price target of $2 is based on a 1.2x asset value premium. We
have applied a 20% premium to FROs current charter-free fleet value in our net
asset value calculation. Our premium asset valuation reflects FROs negative
net asset value on a market basis, as well its current cash-on-hand which
should provide some runway towards a potential recovery.

Risks: Upside risks include higher-than-expected spot and charter rates, asset
value appreciation, lower cash break-even levels and accretive acquisitions.

30 January 2013
Marine


Teekay Tankers (TNK, Hold, $3.06)

Valuation: Our price target of $3 is based on a 9.0x EV/EBITDA multiple applied
to our 2014 EBITDA estimate of $90 million. Our 9.0x multiple is below TNKs
historic multiple of 10.3x, which reflects the weaker market environment and
resulting lower dividend payout. TNKs multiple also reflects the mixed
spot/fixed employment fleet strategy as well as modest leverage with ample
liquidity.

Risks: Upside risks include improved spot rates, increased distributions and
accretive acquisitions. Downside risks include spot exposure and dependency
on TK for vessel operations, asset size concentration, rising operating expenses
and dividend cuts.

Container Valuation & Risks
Seaspan Corp (SSW, Hold, $18.77)

Valuation: Our price target of $18 is based on a 10.5x EV/EBITDA multiple
applied to our 2014 EBITDA estimate of $506 million. While our multiple is
above SSWs historical average of 9.0x, the companys increasing newbuilding
backlog has resulted in our premium valuation. We would highlight, prior to
2011, when SSW had a larger newbuilding book, the company had an average
multiple of 12.6x.

Risks: Upside risks include increasing dividends, accretive fleet growth
opportunities and improvement in liner freight rates. Downside risks include
SSW's ability to find accretive acquisitions, access to capital markets,
increasing operating expenses and time charter renewals.

Textainer (TGH, Hold, $41.43)

Valuation: Our price target of $40 is based on a 9.0x P/E multiple applied to our
2014 EPS estimate of $4.49. Our multiple is inline with historical averages
given TGHs strong capex spending, but uncertain longer ability to sustain such
growth.

Risks: Upside risks include increased new container orders, secondhand
acquisitions and improved per diems. Downside risks include lower yields, liner
defaults, weaker capex spending, declining utilization and access to capital
markets.

30 January 2013
Marine


Dry Bulk Financials
Diana Shipping (DSX)
Dryships (DRYS)
Genco Shipping & Trading (GNK)
Navios Maritime Partners (NMM)

30 January 2013
Marine


Model updated:29 January 2013
Running the numbers
North America
United States
Marine
Diana Shipping Inc
Reuters: DSX.N Bloomberg: DSX UN

Buy
Price (29 Jan 13) USD 8.79
Target Price USD 11.00
52 Week range USD 6.31 - 9.87
Market Cap (m) USDm 713
EURm 530

Company Profile
Diana Shipping Inc. (DSX) is an Athens based owner of dry
bulk vessels used for shipping commodities such as iron
ore, coal, and grain. DSX's fleet currently consists of 30
high quality modern Panamax and Capesize vessels, with
a portfolio approach to employment.
Price Performance
4
8
12
16
20
Feb 10 Aug 10 Feb 11 Aug 11 Feb 12 Aug 12
Diana Shipping Inc S&P 500 INDEX (Rebased)

Margin Trends
0
15
30
45
60
75
09 10 11 12E 13E 14E
EBITDA Margin EBIT Margin

Growth & Profitability
-5
0
5
10
15
-40
-30
-20
-10
0
10
20
30
09 10 11 12E 13E 14E
Sales growth (LHS) ROE (RHS)

Solvency
0
10
20
30
40
50
-15
-10
-5
0
5
09 10 11 12E 13E 14E
Net debt/equity (LHS) Net interest cover (RHS)

Justin Yagerman

+1 212 250-5191 justin.yagerman@db.com

Fiscal year end 31-Dec 2009 2010 2011 2012E 2013E 2014E

Financial Summary
DB EPS (USD) 1.55 1.59 1.33 0.70 -0.02 0.24
Reported EPS (USD) 1.55 1.59 1.33 0.70 -0.02 0.24
DPS (USD) 0.00 0.00 0.00 0.00 0.00 0.00
BVPS (USD) 12.77 14.50 14.91 15.64 15.62 15.90
Valuation Metrics
Price/Sales (x) 4.5 3.8 3.2 3.2 4.2 3.5
P/E (DB) (x) 8.8 8.2 7.6 12.5 nm 35.9
P/E (Reported) (x) 8.8 8.2 7.6 12.5 nm 35.9
P/BV (x) 1.1 0.8 0.5 0.6 0.6 0.6
FCF yield (%) 10.8 nm 11.5 nm 9.2 12.5
Dividend yield (%) 0.0 0.0 0.0 0.0 0.0 0.0
EV/Sales 4.4 3.9 3.1 3.1 3.8 2.7
EV/EBITDA 6.3 5.8 4.8 5.6 9.7 6.4
EV/EBIT 8.6 8.2 7.2 11.1 nm 31.4
Income Statement (USDm)
Sales 239 275 257 224 170 202
EBITDA 169 185 166 126 66 87
EBIT 124 132 111 64 -1 17
Pre-tax profit 121 129 107 57 -1 20
Net income 121 129 107 57 -1 20
Cash Flow (USDm)
Cash flow from operations 177 179 157 120 65 89
Net Capex -61 -180 -63 -169 0 0
Free cash flow 116 -2 93 -49 65 89
Equity raised/(bought back) 113 0 0 0 0 0
Dividends paid 0 0 0 0 0 0
Net inc/(dec) in borrowings -39 29 13 67 -48 -48
Other investing/financing cash flows 0 0 -20 0 0 0
Net cash flow 190 27 87 18 17 41
Change in working capital 6 -3 -6 1 0 0
Balance Sheet (USDm)
Cash and cash equivalents 282 345 417 432 449 490
Property, plant & equipment 1,009 1,196 1,110 1,227 1,161 1,092
Goodwill 0 0 0 0 0 0
Other assets 29 44 78 72 72 72
Total assets 1,320 1,585 1,605 1,730 1,681 1,653
Debt 276 376 394 425 377 329
Other liabilities 45 47 2 37 37 37
Total liabilities 321 423 396 462 414 366
Total shareholders' equity 999 1,170 1,209 1,268 1,267 1,287
Net debt -6 31 -23 -7 -72 -161
Key Company Metrics
Sales growth (%) -29.1 15.1 -6.8 -12.7 -24.2 18.9
DB EPS growth (%) -47.5 2.8 -16.9 -46.9 na na
Payout ratio (%) 0.0 0.0 0.0 0.0 nm 0.0
EBITDA Margin (%) 70.4 67.3 64.7 56.2 38.8 42.8
EBIT Margin (%) 51.7 48.0 43.1 28.4 -0.4 8.7
ROE (%) 13.7 11.9 9.0 4.6 -0.1 1.6
Net debt/equity (%) -0.6 2.6 -1.9 -0.6 -5.7 -12.5
Net interest cover (x) 43.5 25.9 23.3 11.6 nm 10.5
DuPont Analysis
EBIT margin (%) 51.7 48.0 43.1 28.4 -0.4 8.7
x Asset turnover (x) 0.2 0.2 0.2 0.1 0.1 0.1
x Financial cost ratio (x) 1.0 1.0 1.0 0.9 4.4 0.9
x Tax and other effects (x) 1.0 1.0 1.0 1.0 0.4 1.3
= ROA (post tax) (%) 10.2 8.9 6.7 3.4 -0.1 1.2
x Financial leverage (x) 1.3 1.3 1.3 1.3 1.3 1.3
= ROE (%) 13.7 11.9 9.0 4.6 -0.1 1.6
annual growth (%) -51.3 -13.3 -23.9 -49.0 na na
x NTA/share (avg) (x) 11.3 13.4 14.7 15.3 15.6 15.8
= Reported EPS 1.55 1.59 1.33 0.70 -0.02 0.24
annual growth (%) -47.9 2.8 -16.9 -46.9 na na

Source: Company data, Deutsche Bank estimates

30 January 2013
Marine


Running the numbers
North America
United States
Marine
DryShips Inc
Reuters: DRYS.OQ Bloomberg: DRYS US

Hold
EURm 616

Company Profile
Dryships Inc. (DRYS) is an Athens based owner of dry
bulk, tanker and deep water drilling vessels. DRYS' dry
bulk and tanker vessels are largely spot market exposed
for 2013, while its ultra deepwater (UDW) drilling rigs are
generally employed on mult-year contracts. DRYS
maintains a majority ownership stake in Ocean Rig (NSDQ:
ORIG) which holds its offshore drilling fleet.
Price Performance
2
3
5
6
8
9
Jan 10 Jul 10 Jan 11 Jul 11 Jan 12 Jul 12
DryShips Inc S&P 500 INDEX (Rebased)

Margin Trends
0
15
30
45
60
75
09 10 11 12E 13E 14E

-10
-5
0
5
10
15
0
5
10
15
20
25
30
09 10 11 12E 13E 14E

Solvency
0
2
4
6
8
0
20
40
60
80
100
120
140
09 10 11 12E 13E 14E

Justin Yagerman



Financial Summary
DB EPS (USD) 1.12 1.09 0.34 -0.41 0.12 0.69
Reported EPS (USD) -0.06 0.45 -0.06 -0.70 0.58 1.16
DPS (USD) 0.00 0.00 0.00 0.00 0.00 0.00
BVPS (USD) 13.46 14.51 11.10 10.12 10.24 10.92
Valuation Metrics
Price/Sales (x) 1.7 1.6 1.2 0.7 0.6 0.4
P/E (DB) (x) 5.9 4.7 10.9 nm 18.8 3.2
P/E (Reported) (x) nm 11.2 nm nm 3.8 1.9
P/BV (x) 0.4 0.4 0.2 0.2 0.2 0.2
FCF yield (%) 20.0 31.5 33.3 15.3 68.2 98.8
Dividend yield (%) 0.0 0.0 0.0 0.0 0.0 0.0
EV/Sales 4.0 4.3 4.9 3.9 4.0 2.9
EV/EBITDA 6.5 6.5 9.2 11.1 8.0 5.4
EV/EBIT 10.4 9.9 17.5 55.4 14.8 8.5
Sales 840 860 1,078 1,209 1,487 1,898
EBITDA 523 564 578 420 747 1,032
EBIT 326 373 304 84 405 657
Pre-tax profit 254 323 171 -137 176 397
Net income -12 126 -23 -268 220 441
Cash Flow (USDm)
Net Capex -18 20 41 73 0 0
Free cash flow 277 431 441 127 566 820
Net inc/(dec) in borrowings -1,128 -157 1,377 187 1,302 -298
Other investing/financing cash flows -157 -1,221 -1,913 -453 -1,699 -146
Net cash flow -57 -368 -94 -140 168 376
Change in working capital -39 33 127 -37 0 0
Other assets 1,718 3,426 1,826 1,790 1,808 1,897
Total assets 5,799 6,984 8,622 8,875 10,221 10,186
Debt 2,685 2,720 4,242 4,255 5,557 5,258
Total liabilities 2,994 3,085 4,683 5,026 6,328 6,030
Total shareholders' equity 2,805 3,900 3,939 3,849 3,893 4,156
Net debt 1,992 2,328 3,991 3,846 5,155 4,752
Key Company Metrics
Sales growth (%) nm 2.3 25.3 12.2 23.0 27.6
DB EPS growth (%) na -3.0 -68.7 na na 495.0
Payout ratio (%) nm 0.0 nm nm 0.0 0.0
EBITDA Margin (%) 62.3 65.6 53.7 34.8 50.2 54.4
EBIT Margin (%) 38.8 43.4 28.2 7.0 27.2 34.6
ROE (%) -0.4 3.7 -0.6 -6.9 5.7 11.0
Net debt/equity (%) 71.0 59.7 101.3 99.9 132.4 114.3
Net interest cover (x) 3.8 6.8 2.3 0.4 1.8 2.5
DuPont Analysis
EBIT margin (%) 38.8 43.4 28.2 7.0 27.2 34.6
x Financial cost ratio (x) 0.7 0.9 0.6 -1.5 0.4 0.6
x Tax and other effects (x) -0.1 0.4 -0.1 2.1 1.2 1.1
= ROA (post tax) (%) -0.2 2.0 -0.3 -3.1 2.3 4.3
= ROE (%) -0.4 3.7 -0.6 -6.9 5.7 11.0
annual growth (%) na na na -1,085.7 na 93.1
x NTA/share (avg) (x) 13.5 12.1 11.0 10.2 10.2 10.6
= Reported EPS -0.06 0.45 -0.06 -0.70 0.58 1.16
annual growth (%) na na na -999.8 na 100.5


30 January 2013
Marine


Running the numbers
North America
United States
Marine
Genco Shipping
Reuters: GNK.N Bloomberg: GNK UN

Sell
EURm 114

Company Profile
Genco Shipping & Trading Limited (GNK) is U.S.-based
owner of a diverse fleet of 49 dry bulk vessels ranging in
size from Handysize up to Capesize. GNK typically utilizes
staggered long-term charters when employing its vessels.
Price Performance
0
10
20
30
Genco Shipping S&P 500 INDEX (Rebased)

Margin Trends
-80
-40
0
40
80
120
09 10 11 12E 13E 14E

-20
-10
0
10
20
30
-60
-40
-20
0
20
40
09 10 11 12E 13E 14E

Solvency
0
1
2
3
4
0
50
100
150
200
09 10 11 12E 13E 14E

Justin Yagerman



Financial Summary
DB EPS (USD) 4.73 4.01 0.70 -3.27 -4.27 -2.95
Reported EPS (USD) 4.73 4.01 0.70 -3.27 -4.27 -2.95
DPS (USD) 0.00 0.00 0.00 0.00 0.00 0.00
BVPS (USD) 29.68 40.93 38.60 29.40 24.30 21.18
Valuation Metrics
Price/Sales (x) 1.6 1.3 0.8 0.7 0.8 0.6
P/E (DB) (x) 4.2 4.5 12.5 nm nm nm
P/E (Reported) (x) 4.2 4.5 12.5 nm nm nm
P/BV (x) 0.8 0.4 0.2 0.1 0.2 0.2
FCF yield (%) nm nm 8.2 nm nm 15.4
Dividend yield (%) 0.0 0.0 0.0 0.0 0.0 0.0
EV/Sales 4.6 4.6 4.5 6.8 8.3 6.3
EV/EBITDA 5.8 6.1 7.1 20.3 40.5 15.7
EV/EBIT 8.3 9.3 15.8 nm nm nm
Sales 380 449 392 232 193 250
EBITDA 299 337 248 77 40 101
EBIT 210 221 112 -62 -110 -49
Pre-tax profit 149 152 26 -147 -192 -132
Net income 149 144 25 -136 -183 -126
Cash Flow (USDm)
Cash flow from operations 220 283 159 -36 -39 24
Net Capex -291 -705 -133 -2 0 0
Free cash flow -71 -422 25 -38 -39 24
Net inc/(dec) in borrowings 112 627 -103 -189 0 0
Other investing/financing cash flows 20 -90 0 0 0 0
Net cash flow 61 170 -77 -227 -39 24
Change in working capital -2 14 -17 -34 -8 -5
Other assets 123 229 91 44 49 41
Total assets 2,337 3,183 3,119 2,787 2,604 2,471
Debt 1,327 1,746 1,694 1,505 1,505 1,505
Total shareholders' equity 929 1,350 1,362 1,225 1,042 909
Net debt 1,139 1,466 1,466 1,421 1,460 1,436
Key Company Metrics
Sales growth (%) -6.4 18.2 -12.6 -41.0 -16.7 29.6
DB EPS growth (%) -36.1 -15.1 -82.5 na -30.7 31.0
Payout ratio (%) 0.0 0.0 0.0 nm nm nm
EBITDA Margin (%) 78.7 75.1 63.3 33.3 20.6 40.2
EBIT Margin (%) 55.5 49.3 28.6 -26.6 -57.1 -19.7
ROE (%) 18.3 12.6 1.8 -10.5 -16.2 -13.0
Net debt/equity (%) 122.6 108.7 107.7 116.0 140.1 158.0
Net interest cover (x) 3.4 3.2 1.3 nm nm nm
DuPont Analysis
EBIT margin (%) 55.5 49.3 28.6 -26.6 -57.1 -19.7
= ROA (post tax) (%) 6.9 5.2 0.8 -4.6 -6.8 -5.0
= ROE (%) 18.3 12.6 1.8 -10.5 -16.2 -13.0
annual growth (%) 31.8 -30.9 -85.5 na -53.3 19.8
x NTA/share (avg) (x) 25.8 31.8 38.4 31.0 26.4 22.7
= Reported EPS 4.73 4.01 0.70 -3.27 -4.27 -2.95
annual growth (%) 57.2 -15.1 -82.5 na -30.7 31.0


30 January 2013
Marine


Running the numbers
North America
United States
Marine
Navios Partners L.P.
Reuters: NMM.N Bloomberg: NMM UN

Hold
52 Week range USD 11.59 - 16.94
EURm 676

Company Profile
Navios Maritime Partners L.P. (NMM) transports iron ore,
coal, grain, steel products and other dry bulk cargoes
along worldwide shipping routes. Navios Partners
currently owns a fleet of 12 dry bulk vessels consisting of
eight Panamax vessels, three Capesize vessels, and one
Handymax vessel. NMM also charters in two Panamax
vessels, creating an operating fleet of 14 dry bulk vessels
with a total carrying capacity of 1,331,291 deadweight
tons (dwt), with an average age of nearly seven years.
Price Performance
8
12
16
20
24
Navios Partners L.P.
S&P 500 INDEX (Rebased)

Margin Trends
30
40
50
60
70
80
09 10 11 12 13E 14E

0
5
10
15
20
25
30
-20
0
20
40
60
09 10 11 12 13E 14E

Solvency
0
2
4
6
8
10
12
14
0
10
20
30
40
50
60
09 10 11 12 13E 14E

Justin Yagerman


Fiscal year end 31-Dec 2009 2010 2011 2012 2013E 2014E

Financial Summary
DB EPS (USD) 1.65 1.51 1.40 1.61 0.87 0.80
Reported EPS (USD) 1.32 1.40 1.19 1.61 0.87 0.80
DPS (USD) 1.50 1.67 1.74 1.77 1.77 1.44
BVPS (USD) 7.98 11.37 10.19 10.41 9.16 8.16
Valuation Metrics
Price/Sales (x) 3.0 5.2 5.1 4.3 4.8 5.4
P/E (DB) (x) 6.5 11.5 12.4 9.1 17.0 18.6
P/E (Reported) (x) 8.1 12.4 14.6 9.1 17.0 18.6
P/BV (x) 1.9 1.7 1.4 1.2 1.6 1.8
FCF yield (%) 20.4 nm 5.4 10.4 14.0 12.1
Dividend yield (%) 14.0 9.6 10.0 12.0 11.9 9.7
EV/Sales 4.3 7.1 6.6 5.6 6.2 6.8
EV/EBITDA 6.2 9.5 8.6 7.4 8.5 9.9
EV/EBIT 8.2 15.5 15.7 13.7 18.8 20.6
Sales 93 143 187 205 188 170
EBITDA 64 107 142 155 136 118
EBIT 48 66 78 84 62 56
Pre-tax profit 40 61 69 74 53 49
Net income 34 61 65 96 53 49
Cash Flow (USDm)
Net Capex -24 -292 -76 -89 0 0
Free cash flow 57 -197 51 91 128 110
Dividends paid -39 -72 -95 -107 -110 -110
Net inc/(dec) in borrowings -40 137 -4 -48 -22 -22
Other investing/financing cash flows -45 -156 -44 -21 0 0
Net cash flow 50 -28 -3 -16 -5 -22
Property, plant & equipment 300 612 667 721 647 586
Other assets 59 177 195 201 201 210
Total assets 437 841 910 955 876 801
Debt 195 322 326 300 278 256
Total shareholders' equity 208 492 560 619 562 500
Net debt 117 270 278 268 250 251
Key Company Metrics
Sales growth (%) 23.4 54.6 30.6 9.9 -8.4 -9.7
DB EPS growth (%) 15.5 -8.7 -7.5 15.6 -45.9 -8.7
Payout ratio (%) 113.7 119.5 146.1 109.4 202.9 180.9
EBITDA Margin (%) 69.2 74.7 76.0 75.6 72.3 69.3
EBIT Margin (%) 52.0 46.0 41.8 40.7 32.8 33.2
ROE (%) 24.1 17.3 12.4 16.3 9.1 9.2
Net debt/equity (%) 56.3 55.0 49.7 43.2 44.5 50.1
DuPont Analysis
EBIT margin (%) 52.0 46.0 41.8 40.7 32.8 33.2
= ROA (post tax) (%) 9.0 9.5 7.5 10.3 5.8 5.8
= ROE (%) 24.1 17.3 12.4 16.3 9.1 9.2
annual growth (%) -56.6 -28.2 -28.1 30.8 -44.3 1.4
x NTA/share (avg) (x) 5.5 8.1 9.6 9.9 9.6 8.7
= Reported EPS 1.32 1.40 1.19 1.61 0.87 0.80
annual growth (%) -8.0 6.3 -15.0 35.5 -45.9 -8.7


30 January 2013
Marine


Tanker Financials
Capital Product Partners (CPLP)
Frontline (FRO)
Navios Maritime Acquisition (NNA)
Teekay Corp (TK)
Teekay Tankers (TNK)

30 January 2013
Marine


Running the numbers
North America
United States
Marine
Capital Product Prtns.
Reuters: CPLP.OQ Bloomberg: CPLP US

Hold
EURm 412

Company Profile
Capital Product Partners L.P. (CPLP) is an Athens-based
owner of product and crude tankers as well of
containerships. CPLP owns a total of 25 high-specification
modern vessels, generally employed on medium-to-long-
term contracts to its sponsor and third parties.
Price Performance
4
6
8
10
12
14
Jan 10 Jul 10 Jan 11 Jul 11 Jan 12 Jul 12
Capital Product Prtns.

Margin Trends
30
40
50
60
70
80
09 10 11 12E 13E 14E

0
5
10
15
20
-10
0
10
20
30
09 10 11 12E 13E 14E

Solvency
0
1
2
3
4
5
0
50
100
150
200
250
300
350
09 10 11 12E 13E 14E

Justin Yagerman



Financial Summary
DB EPS (USD) 1.15 0.45 0.14 0.14 0.50 0.62
Reported EPS (USD) 1.15 0.38 0.09 1.32 0.52 0.62
DPS (USD) 2.84 0.89 0.66 0.93 0.93 0.93
BVPS (USD) 6.62 7.22 10.99 8.97 8.27 7.60
Valuation Metrics
Price/Sales (x) 1.6 2.3 3.3 3.7 3.3 3.2
P/E (DB) (x) 7.4 19.1 60.2 56.7 16.3 13.1
P/E (Reported) (x) 7.4 22.4 87.2 6.2 15.6 13.1
P/BV (x) 1.4 1.3 0.6 0.9 1.0 1.1
FCF yield (%) 20.9 nm 7.6 14.1 20.4 20.2
Dividend yield (%) 33.3 10.4 8.0 11.5 11.5 11.5
EV/Sales 5.4 6.0 8.3 6.5 5.8 5.4
EV/EBITDA 7.6 9.1 12.8 10.3 8.6 7.8
EV/EBIT 11.1 15.0 24.8 21.2 15.1 13.1
Sales 123 119 119 150 167 175
EBITDA 89 79 77 95 112 120
EBIT 61 48 40 46 64 72
Pre-tax profit 29 14 6 21 47 56
Net income 29 14 6 101 49 56
Cash Flow (USDm)
Net Capex -26 -100 -27 0 0 0
Free cash flow 42 -55 30 78 113 112
Dividends paid -70 -34 -45 -74 -82 -82
Net inc/(dec) in borrowings -24 -3 25 -175 0 0
Other investing/financing cash flows -29 10 10 16 0 0
Net cash flow -41 24 21 -16 31 30
Property, plant & equipment 639 707 1,074 1,007 959 911
Other assets 39 14 87 60 44 29
Total assets 681 754 1,215 1,104 1,056 1,010
Debt 474 474 652 459 459 459
Net debt 470 442 599 423 406 388
Key Company Metrics
Sales growth (%) -6.0 -3.5 -0.3 26.2 11.4 5.0
DB EPS growth (%) -41.1 -61.2 -69.5 4.6 247.3 24.7
Payout ratio (%) 235.4 198.3 483.2 62.9 130.0 114.1
EBITDA Margin (%) 72.0 66.3 64.9 63.1 67.1 68.6
EBIT Margin (%) 49.1 40.2 33.5 30.8 38.2 41.2
ROE (%) 17.4 7.4 1.7 15.9 6.0 7.8
Net debt/equity (%) 299.4 189.2 115.7 69.0 71.9 74.9
DuPont Analysis
EBIT margin (%) 49.1 40.2 33.5 30.8 38.2 41.2
= ROA (post tax) (%) 4.1 2.0 0.7 7.8 3.3 4.1
= ROE (%) 17.4 7.4 1.7 15.9 6.0 7.8
annual growth (%) -38.7 -57.3 -76.9 828.5 -62.1 29.4
x NTA/share (avg) (x) 6.6 5.2 5.5 8.3 8.6 7.9
= Reported EPS 1.15 0.38 0.09 1.32 0.52 0.62
annual growth (%) -41.1 -66.8 -75.3 1,295.4 -60.5 19.1


30 January 2013
Marine


Running the numbers
North America
United States
Marine
Frontline Ltd.
Reuters: FRO.N Bloomberg: FRO UN

Sell
EURm 204

Company Profile
Frontline Ltd. (FRO) is a leader in the seaborne
transportation of oil, with a fleet of more than 80 vessels,
including 12 owned VLCCs and 12 owned Suezmaxes,
with the remainder chartered-in or leased, and an
emphasis on spot employment.
Price Performance
0
10
20
30
40
50
Frontline Ltd. S&P 500 INDEX (Rebased)

Margin Trends
-15
0
15
30
45
60
09 10 11 12E 13E 14E

-200
-150
-100
-50
0
50
-50
-40
-30
-20
-10
0
10
20
09 10 11 12E 13E 14E

Solvency
0
1
1
2
2
3
0
100
200
300
400
500
600
700
09 10 11 12E 13E 14E

Justin Yagerman



Financial Summary
DB EPS (USD) 1.32 1.75 -1.39 -1.52 -1.38 -1.34
Reported EPS (USD) 1.32 2.07 -6.80 -1.36 -1.38 -1.34
DPS (USD) 0.90 2.00 0.22 0.00 0.00 0.00
BVPS (USD) 9.52 9.60 2.58 1.24 0.26 -1.08
Valuation Metrics
Price/Sales (x) 2.0 2.6 2.2 0.8 1.1 1.0
P/E (DB) (x) 18.1 17.1 nm nm nm nm
P/E (Reported) (x) 18.1 14.4 nm nm nm nm
P/BV (x) 2.9 2.6 1.7 2.8 13.5 nm
FCF yield (%) 8.3 nm 30.9 29.1 nm 3.1
Dividend yield (%) 3.8 6.7 1.5 0.0 0.0 0.0
EV/Sales 5.0 5.7 4.7 4.1 5.8 4.8
EV/EBITDA 9.5 10.2 10.8 15.8 24.6 15.8
EV/EBIT 18.9 18.1 81.8 nm nm nm
Sales 914 883 514 359 254 285
EBITDA 477 490 225 92 60 88
EBIT 240 277 30 -24 -24 -22
Pre-tax profit 106 139 -107 -118 -107 -101
Net income 103 161 -530 -106 -107 -104
Cash Flow (USDm)
Cash flow from operations 299 317 57 34 -23 8
Net Capex -145 -518 293 45 -117 0
Free cash flow 154 -200 351 80 -140 8
Dividends paid -70 -156 -17 0 0 0
Net inc/(dec) in borrowings -268 192 -482 -83 16 16
Other investing/financing cash flows 76 258 132 13 26 0
Net cash flow -108 94 -16 9 -98 25
Change in working capital -18 -35 -41 30 0 0
Property, plant & equipment 2,833 3,082 1,348 1,199 1,090 926
Other assets 799 539 332 332 306 315
Total assets 3,715 3,798 1,841 1,700 1,467 1,337
Debt 2,750 2,895 1,527 1,437 1,361 1,285
Total shareholders' equity 751 759 213 108 32 -72
Net debt 2,667 2,718 1,366 1,267 1,289 1,189
Key Company Metrics
Sales growth (%) -39.5 -3.4 -41.7 -30.2 -29.3 12.4
DB EPS growth (%) -85.3 32.9 na -9.0 9.0 2.9
Payout ratio (%) 68.2 96.5 nm nm nm nm
EBITDA Margin (%) 52.2 55.5 43.8 25.7 23.8 30.7
EBIT Margin (%) 26.3 31.4 5.8 -6.7 -9.6 -7.7
ROE (%) 14.2 21.7 -111.7 -71.4 -184.4 nm
Net debt/equity (%) 355.3 358.1 640.0 nm nm nm
Net interest cover (x) 1.7 2.0 0.2 nm nm nm
DuPont Analysis
EBIT margin (%) 26.3 31.4 5.8 -6.7 -9.6 -7.7
x Financial cost ratio (x) 0.4 0.5 -3.6 4.9 4.4 4.6
= ROA (post tax) (%) 2.7 4.3 -18.8 -6.0 -6.8 -7.4
x Financial leverage (x) 5.4 5.0 5.9 11.9 27.2 -44.1
= ROE (%) 14.2 21.7 -111.7 -71.4 -184.4 328.0
annual growth (%) -88.3 52.4 na 36.1 -158.4 na
x NTA/share (avg) (x) 9.3 9.6 6.1 1.9 0.7 -0.4
= Reported EPS 1.32 2.07 -6.80 -1.36 -1.38 -1.34
annual growth (%) -85.3 57.2 na 80.0 -1.4 2.9


30 January 2013
Marine


Running the numbers
North America
United States
Marine
Reuters: NNA.N Bloomberg: NNA UN

Buy
EURm 77

Company Profile
Navios Maritime Acquisition Corp. is a tanker
owner/operator involved in the tranportation of liquid
chemicals, crude oil and refined petroleum products. NNA
operates its vessels worldwide with a mixture of spot and
fixed charter employment.
Price Performance
2
3
5
6
8
9
Jul 10 Jan 11 Jul 11 Jan 12 Jul 12 Jan

Margin Trends
20
30
40
50
60
70
09 10 11 12E 13E 14E

-10
-5
0
5
10
0
50
100
150
200
250
300
09 10 11 12E 13E 14E

Solvency
0
1
1
2
2
0
100
200
300
400
500
09 10 11 12E 13E 14E

Justin Yagerman



Financial Summary
DB EPS (USD) IV -0.01 -0.06 -0.10 0.54 0.45
Reported EPS (USD) IV -0.47 -0.08 -0.10 0.54 0.54
DPS (USD) IV 0.00 0.24 0.20 0.20 0.20
BVPS (USD) IV 8.31 5.76 5.62 6.42 6.63
Valuation Metrics
Price/Sales (x) IV 4.9 1.2 0.7 0.5 0.5
P/E (DB) (x) IV nm nm nm 4.7 5.7
P/E (Reported) (x) IV nm nm nm 4.7 4.7
P/BV (x) IV 0.5 0.5 0.5 0.4 0.4
FCF yield (%) IV nm nm nm nm 29,666.9
Dividend yield (%) IV 0.0 6.6 7.8 7.8 7.8
EV/Sales IV 23.8 8.0 7.0 5.0 5.1
EV/EBITDA IV 41.1 12.4 11.2 7.6 8.1
EV/EBIT IV 85.8 24.5 23.5 12.7 13.9
Sales IV 34 120 150 214 225
EBITDA IV 19 78 94 140 143
EBIT IV 9 39 45 84 83
Pre-tax profit IV 0 -3 -5 27 22
Net income IV -14 -3 -4 22 22
Cash Flow (USDm)
Cash flow from operations IV 11 68 91 78 30,922
Net Capex IV -359 -193 -222 -120 -150
Free cash flow IV -347 -125 -131 -42 30,772
Equity raised/(bought back) IV 108 0 0 0 0
Dividends paid IV 0 -10 -10 -10 -10
Net inc/(dec) in borrowings IV 148 153 143 87 106
Other investing/financing cash flows IV 152 -38 6 0 0
Net cash flow IV 61 -20 8 35 30,868
Change in working capital IV 4 29 45 0 0
Cash and cash equivalents IV 76 72 71 111 143
Property, plant & equipment IV 846 1,020 1,333 1,271 1,361
Goodwill IV 0 0 0 0 0
Other assets IV 83 103 6 6 18
Total assets IV 1,005 1,195 1,409 1,387 1,521
Debt IV 709 885 1,018 1,066 1,194
Other liabilities IV 42 71 163 61 59
Total liabilities IV 751 957 1,182 1,127 1,253
Total shareholders' equity IV 254 239 228 260 268
Net debt IV 633 813 948 955 1,051
Key Company Metrics
Sales growth (%) IV nm 257.3 25.0 42.7 5.2
DB EPS growth (%) IV 69.6 -880.6 -58.8 na -16.9
Payout ratio (%) IV nm nm nm 36.7 37.1
EBITDA Margin (%) IV 57.9 64.9 62.6 65.3 63.7
EBIT Margin (%) IV 27.7 32.7 29.8 39.1 36.9
ROE (%) IV -5.6 -1.4 -1.7 9.0 8.3
Net debt/equity (%) IV 249.5 340.6 416.5 367.0 391.4
Net interest cover (x) IV 1.0 0.9 0.9 1.5 1.4
DuPont Analysis
EBIT margin (%) IV 27.7 32.7 29.8 39.1 36.9
x Asset turnover (x) IV 0.0 0.1 0.1 0.2 0.2
x Financial cost ratio (x) IV -0.1 -0.1 -0.1 0.3 0.3
x Tax and other effects (x) IV 30.1 1.4 0.9 0.8 1.0
= ROA (post tax) (%) IV -1.4 -0.3 -0.3 1.6 1.5
x Financial leverage (x) IV 4.0 4.5 5.6 5.7 5.5
= ROE (%) IV -5.6 -1.4 -1.7 9.0 8.3
annual growth (%) IV na 75.0 -19.8 na -8.6
x NTA/share (avg) (x) IV 8.3 5.9 5.8 6.0 6.5
= Reported EPS IV -0.47 -0.08 -0.10 0.54 0.54
annual growth (%) IV na 82.1 -16.0 na -0.9


30 January 2013
Marine


Running the numbers
North America
United States
Marine
Teekay Corporation
Reuters: TK.N Bloomberg: TK UN

Buy
52 Week range USD 25.59 - 36.67
Market Cap (m) USDm 2,476
EURm 1,840

Company Profile
Teekay Corporation (TK) is a market leader in global
energy transportation services, operating a fleet of nearly
150 vessels, including crude oil tankers, product tankers,
LNG, LPG, FSO, and FPSO vessels, utilizing both spot and
long-term employment.
Price Performance
20
24
28
32
36
40
Teekay Corporation

Margin Trends
0
10
20
30
40
50
09 10 11 12E 13E 14E

-25
-20
-15
-10
-5
0
5
10
-25
-20
-15
-10
-5
0
5
10
09 10 11 12E 13E 14E

Solvency
0
1
1
2
2
0
50
100
150
200
09 10 11 12E 13E 14E

Justin Yagerman



Financial Summary
DB EPS (USD) -1.20 -1.65 -1.46 -0.74 0.57 1.17
Reported EPS (USD) 1.57 -3.65 -5.23 -0.67 0.57 1.17
DPS (USD) 1.26 3.45 1.27 1.27 1.27 1.27
BVPS (USD) 27.58 27.15 20.35 20.06 19.32 19.21
Valuation Metrics
Price/Sales (x) 0.7 1.1 1.2 1.4 1.3 1.3
P/E (DB) (x) nm nm nm nm 63.0 30.6
P/E (Reported) (x) 12.1 nm nm nm 63.0 30.6
P/BV (x) 0.8 1.2 1.3 1.8 1.9 1.9
FCF yield (%) 8.1 nm nm nm nm 21.0
Dividend yield (%) 6.6 12.7 4.2 3.5 3.5 3.5
EV/Sales 3.5 3.9 4.7 5.0 4.7 4.5
EV/EBITDA 10.8 10.4 16.0 11.7 10.8 10.4
EV/EBIT 38.9 30.1 86.0 29.1 21.4 22.7
Sales 1,873 1,823 1,777 1,787 1,863 1,944
EBITDA 604 674 527 762 806 843
EBIT 167 233 98 306 405 387
Pre-tax profit 133 -274 -365 -46 48 89
Net income 114 -267 -369 -47 39 81
Cash Flow (USDm)
Cash flow from operations 388 185 -34 380 424 520
Net Capex -275 -272 -671 -397 -717 0
Free cash flow 112 -87 -706 -17 -293 520
Equity raised/(bought back) -110 2 -122 0 0 0
Dividends paid -92 -252 -93 -83 -88 -88
Net inc/(dec) in borrowings -619 162 684 40 265 -450
Net cash flow -342 625 -229 317 -116 -17
Change in working capital 130 -380 -157 -18 0 0
Cash and cash equivalents 423 780 692 1,009 880 875
Goodwill 203 203 167 167 167 167
Other assets 2,219 2,355 2,924 3,338 3,338 3,385
Total assets 9,500 9,911 11,143 11,761 11,232 10,819
Debt 5,248 5,170 5,871 5,844 5,844 5,844
Other liabilities 1,402 1,409 1,978 2,030 1,928 1,423
Total shareholders' equity 2,850 3,332 3,293 3,887 3,459 3,553
Net debt 4,826 4,390 5,179 4,835 4,964 4,969
Key Company Metrics
Sales growth (%) -23.1 -2.7 -2.5 0.5 4.3 4.3
DB EPS growth (%) na -37.8 11.6 49.5 na 105.7
Payout ratio (%) 79.7 nm nm nm 222.8 108.3
EBITDA Margin (%) 32.2 37.0 29.6 42.6 43.2 43.4
EBIT Margin (%) 8.9 12.8 5.5 17.1 21.8 19.9
ROE (%) 5.6 -13.4 -21.6 -3.3 2.9 6.1
Net debt/equity (%) 169.3 131.8 157.2 124.4 143.5 139.9
DuPont Analysis
EBIT margin (%) 8.9 12.8 5.5 17.1 21.8 19.9
x Financial cost ratio (x) 0.3 0.5 -0.3 0.4 0.3 0.3
x Tax and other effects (x) 2.5 -2.4 12.5 -0.4 0.4 0.7
= ROA (post tax) (%) 1.2 -2.8 -3.5 -0.4 0.3 0.7
= ROE (%) 5.6 -13.4 -21.6 -3.3 2.9 6.1
annual growth (%) na na -61.2 84.6 na 110.0
x NTA/share (avg) (x) 27.9 27.2 24.2 20.3 19.7 19.3
= Reported EPS 1.57 -3.65 -5.23 -0.67 0.57 1.17


30 January 2013
Marine


Running the numbers
North America
Bermuda
Marine
Teekay Tankers Ltd.
Reuters: TNK.N Bloomberg: TNK US

Hold
Market Cap (m) EURm 174
USDm 234

Company Profile
Teekay Tankers Limited (TNK) owns a fleet of 13 oil
tankers, including Aframaxes and Suezmaxes. TNK
employs a mix between period charters and spot (pool)
employment for its vessels, and pays out all of its
distributable cash flow as dividends.
Price Performance
0
4
8
12
16
Teekay Tankers Ltd.

Margin Trends
0
15
30
45
60
75
09 10 11 12E 13E 14E

-5
0
5
10
15
0
5
10
15
20
25
30
35
09 10 11 12E 13E 14E

Solvency
0
1
2
3
4
5
6
7
0
50
100
150
200
09 10 11 12E 13E 14E

Justin Yagerman



Financial Summary
DB EPS (USD) 0.97 0.53 0.17 -0.10 -0.20 -0.09
Reported EPS (USD) 0.86 0.64 -0.15 -0.17 -0.20 -0.09
DPS (USD) 1.76 1.31 0.85 0.27 0.34 0.00
BVPS (USD) 7.21 10.47 8.05 8.57 7.34 6.76
Valuation Metrics
Price/Sales (x) 2.5 4.1 4.0 1.5 1.4 1.3
P/E (DB) (x) 10.2 22.0 48.2 nm nm nm
P/E (Reported) (x) 11.6 18.4 nm nm nm nm
P/BV (x) 1.2 1.2 0.4 0.4 0.4 0.5
FCF yield (%) 19.7 nm 10.9 13.8 19.7 27.1
Dividend yield (%) 17.7 11.2 10.6 8.8 11.2 0.0
EV/Sales 5.1 7.9 6.7 5.9 4.4 3.6
EV/EBITDA 8.2 13.2 12.8 13.2 10.0 7.7
EV/EBIT 13.9 28.2 40.0 79.3 126.0 53.5
Sales 113 119 121 157 185 191
EBITDA 70 71 64 70 82 90
EBIT 42 33 20 12 6 13
Pre-tax profit 28 22 10 -8 -17 -8
Net income 24 27 -9 -14 -17 -8
Cash Flow (USDm)
Net Capex -4 -96 -2 -5 -20 0
Free cash flow 56 -20 53 32 50 69
Dividends paid -50 -55 -51 -22 -24 -42
Net inc/(dec) in borrowings -116 -364 -105 -49 -111 -22
Net cash flow -19 20 3 56 30 121
Change in working capital 23 5 -7 -10 0 0
Property, plant & equipment 506 757 717 1,248 1,193 1,116
Other assets 23 167 150 176 60 -32
Total assets 540 937 882 1,459 1,317 1,268
Debt 305 459 349 727 627 627
Net debt 295 446 333 693 563 442
Key Company Metrics
Sales growth (%) nm 5.4 1.3 29.8 17.7 3.5
DB EPS growth (%) na -45.3 -68.8 na -112.2 53.8
Payout ratio (%) 205.7 205.5 nm nm nm nm
EBITDA Margin (%) 62.0 59.8 52.6 44.7 44.2 47.1
EBIT Margin (%) 36.7 27.9 16.9 7.4 3.5 6.8
ROE (%) 11.9 8.3 -1.9 -2.4 -2.7 -1.3
Net debt/equity (%) 142.9 100.8 68.1 105.8 91.8 78.3
DuPont Analysis
EBIT margin (%) 36.7 27.9 16.9 7.4 3.5 6.8
x Financial cost ratio (x) 0.8 0.8 0.8 -0.1 -2.3 -0.4
x Tax and other effects (x) 0.7 1.0 -0.6 11.6 1.1 1.3
= ROA (post tax) (%) 4.5 3.6 -1.0 -1.2 -1.2 -0.6
= ROE (%) 11.9 8.3 -1.9 -2.4 -2.7 -1.3
annual growth (%) na -30.2 na -23.7 -11.2 50.2
x NTA/share (avg) (x) 7.2 7.7 7.7 7.2 7.6 7.0
= Reported EPS 0.86 0.64 -0.15 -0.17 -0.20 -0.09
annual growth (%) na -25.7 na -16.0 -17.2 53.8


30 January 2013
Marine


Container Financials
Seaspan (SSW)
Textainer (TGH)

30 January 2013
Marine


Running the numbers
North America
United States
Marine
Seaspan Corp
Reuters: SSW.N Bloomberg: SSW UN

Hold
52 Week range USD 14.95 - 19.48
EURm 874

Company Profile
Seaspan Corp. (SSW) is global ocean shipping company
that owns containerships which move sea containers for
major steamship lines. SSW owns a fleet of 69 (including
newbuilds) containerships, which are chartered under
long-term contracts.
Price Performance
8
12
16
20
24
Seaspan Corp S&P 500 INDEX (Rebased)

Margin Trends
40
50
60
70
80
09 10 11 12E 13E 14E

-15
-10
-5
0
5
10
15
20
0
10
20
30
40
50
09 10 11 12E 13E 14E

Solvency
0
1
1
2
2
3
3
4
0
50
100
150
200
250
300
09 10 11 12E 13E 14E

Justin Yagerman



Financial Summary
DB EPS (USD) 0.85 1.13 1.08 1.24 1.06 1.37
Reported EPS (USD) 1.42 -1.38 -1.41 -0.19 1.06 1.37
DPS (USD) 0.61 0.45 0.53 0.76 1.00 1.00
BVPS (USD) 15.73 14.51 17.11 17.70 18.00 18.04
Valuation Metrics
Price/Sales (x) 2.0 1.9 1.8 1.8 1.8 1.7
P/E (DB) (x) 9.9 10.1 13.6 15.1 17.7 13.7
P/E (Reported) (x) 5.9 nm nm nm 17.7 13.7
P/BV (x) 0.6 0.9 0.8 1.1 1.0 1.0
FCF yield (%) nm nm nm 1.3 20.5 11.6
Dividend yield (%) 7.3 4.0 3.6 4.1 5.3 5.3
EV/Sales 9.5 7.8 6.3 6.1 5.8 5.6
EV/EBITDA 13.8 10.9 8.6 8.1 7.9 7.6
EV/EBIT 21.4 16.7 12.9 12.2 12.2 11.7
Sales 286 407 565 655 664 692
EBITDA 197 290 414 490 487 506
EBIT 127 190 276 326 317 332
Pre-tax profit 79 95 123 138 131 149
Net income 131 -115 -122 -16 92 122
Cash Flow (USDm)
Net Capex -364 -717 -632 -216 -70 -193
Free cash flow -269 -564 -371 16 239 135
Equity raised/(bought back) 198 26 216 -172 0 0
Dividends paid -45 -24 -58 -85 -120 -146
Net inc/(dec) in borrowings 162 535 686 2 -63 35
Other investing/financing cash flows -49 -72 -5 -14 0 0
Net cash flow -3 -99 469 -254 56 24
Change in working capital -3 -4 -42 -30 0 0
Other assets 46 1,151 269 469 418 413
Total assets 3,664 4,377 5,448 5,551 5,499 5,537
Debt 2,294 2,428 3,033 3,106 3,043 3,078
Other liabilities 311 959 1,231 1,337 1,337 1,337
Total shareholders' equity 1,060 990 1,183 1,108 1,120 1,122
Net debt 2,160 2,394 2,552 2,809 2,689 2,701
Key Company Metrics
Sales growth (%) 24.5 42.6 38.7 16.0 1.3 4.3
DB EPS growth (%) -28.6 32.0 -4.5 15.4 -14.5 29.5
Payout ratio (%) 31.6 nm nm nm 67.7 51.1
EBITDA Margin (%) 69.1 71.1 73.3 74.8 73.4 73.1
EBIT Margin (%) 44.6 46.6 48.9 49.8 47.8 47.9
ROE (%) 14.5 -11.3 -11.2 -1.4 8.2 10.8
Net debt/equity (%) 203.9 241.9 215.7 253.4 240.2 240.6
DuPont Analysis
EBIT margin (%) 44.6 46.6 48.9 49.8 47.8 47.9
x Tax and other effects (x) 1.5 -1.1 -0.9 -0.1 0.7 0.8
= ROA (post tax) (%) 3.8 -2.9 -2.5 -0.3 1.7 2.2
= ROE (%) 14.5 -11.3 -11.2 -1.4 8.2 10.8
annual growth (%) na na 0.0 87.6 na 31.6
x NTA/share (avg) (x) 9.8 12.3 12.6 13.6 12.9 12.7
= Reported EPS 1.42 -1.38 -1.41 -0.19 1.06 1.37


30 January 2013
Marine


Running the numbers
North America
United States
Marine
Reuters: TGH.N Bloomberg: TGH UN

Hold
52 Week range USD 27.45 - 41.87
EURm 1,565

Company Profile
Textainer (TGH) is the largest lessor of intermodal
containers, with a total fleet of more than 2.4 million TEUs
of capacity. TGH leases its fleet on a mixture of short- and
long-term leases, with over 78% of its fleet employed on
long-term leases.
Price Performance
10
20
30
40
50

Margin Trends
40
50
60
70
80
90
09 10 11 12E 13E 14E

0
5
10
15
20
25
30
35
-20
-10
0
10
20
30
40
50
09 10 11 12E 13E 14E

Solvency
0
2
4
6
8
10
0
50
100
150
200
250
300
09 10 11 12E 13E 14E

Justin Yagerman



Financial Summary
DB EPS (USD) 1.69 2.51 3.57 3.78 4.03 4.49
Reported EPS (USD) 1.88 2.35 3.77 3.83 4.03 4.49
DPS (USD) 0.92 0.99 1.28 1.63 1.89 2.10
BVPS (USD) 10.48 12.12 13.93 19.70 21.82 25.80
Valuation Metrics
Price/Sales (x) 2.4 3.9 3.4 4.3 3.9 3.3
P/E (DB) (x) 7.0 9.7 8.1 10.9 10.3 9.2
P/E (Reported) (x) 6.3 10.4 7.7 10.8 10.3 9.2
P/BV (x) 1.6 2.4 2.1 2.1 1.9 1.6
FCF yield (%) 0.1 nm nm nm nm nm
Dividend yield (%) 7.8 4.1 4.4 3.9 4.6 5.1
EV/Sales 5.3 6.9 6.7 8.4 8.8 8.5
EV/EBITDA 8.0 8.8 8.4 10.6 10.9 10.5
EV/EBIT 12.2 12.2 11.5 14.6 15.2 14.6
Sales 237 303 423 490 577 688
EBITDA 159 237 338 388 466 557
EBIT 104 171 248 283 334 399
Pre-tax profit 98 142 193 200 222 256
Net income 91 116 188 198 222 251
Cash Flow (USDm)
Net Capex -99 -344 -760 -985 -1,165 -1,125
Free cash flow 0 -180 -547 -718 -825 -731
Dividends paid -44 -48 -63 -83 -102 -115
Net inc/(dec) in borrowings -19 202 620 603 770 669
Other investing/financing cash flows 47 21 -4 12 44 44
Net cash flow -15 0 18 14 -55 -33
Change in working capital -16 -7 -50 -21 0 0
Other assets 230 251 326 364 329 291
Total assets 1,360 1,747 2,306 3,354 4,301 5,204
Debt 687 889 1,509 2,112 2,883 3,552
Total liabilities 787 1,077 1,626 2,352 3,123 3,790
Total shareholders' equity 573 671 680 1,001 1,179 1,414
Net debt 630 832 1,434 2,024 2,849 3,552
Key Company Metrics
Sales growth (%) -14.4 27.7 39.5 16.0 17.6 19.2
DB EPS growth (%) -16.6 48.0 42.6 5.9 6.5 11.4
Payout ratio (%) 48.4 41.2 33.3 41.8 46.0 46.0
EBITDA Margin (%) 67.1 78.2 79.9 79.1 80.8 81.0
EBIT Margin (%) 43.7 56.6 58.7 57.6 57.9 58.0
ROE (%) 19.1 21.3 29.7 23.5 20.3 19.3
Net debt/equity (%) 109.9 124.1 210.9 202.1 241.7 251.2
DuPont Analysis
EBIT margin (%) 43.7 56.6 58.7 57.6 57.9 58.0
= ROA (post tax) (%) 6.8 7.4 9.3 7.0 5.8 5.3
= ROE (%) 19.1 21.3 29.7 23.5 20.3 19.3
annual growth (%) 0.8 11.7 39.4 -20.8 -13.6 -4.9
x NTA/share (avg) (x) 9.9 11.0 12.7 16.3 19.8 23.2
= Reported EPS 1.88 2.35 3.77 3.83 4.03 4.49
annual growth (%) 5.7 24.6 60.6 1.5 5.3 11.4


30 January 2013
Marine


Appendix 1

Important Disclosures

Additional information available upon request

For disclosures pertaining to recommendations or estimates made on securities other than the primary subject of this
research, please see the most recently published company report or visit our global disclosure look-up page on our
website at http://gm.db.com/ger/disclosure/DisclosureDirectory.eqsr

Analyst Certification
The views expressed in this report accurately reflect the personal views of the undersigned lead analyst about the
subject issuers and the securities of those issuers. In addition, the undersigned lead analyst has not and will not receive
any compensation for providing a specific recommendation or view in this report. Justin Yagerman

Equity rating key Equity rating dispersion and banking relationships
Buy: Based on a current 12- month view of total
share-holder return (TSR = percentage change in
share price from current price to projected target price
plus pro-jected dividend yield ) , we recommend that
investors buy the stock.
Sell: Based on a current 12-month view of total share-
holder return, we recommend that investors sell the
stock
Hold: We take a neutral view on the stock 12-months
out and, based on this time horizon, do not
recommend either a Buy or Sell.
Notes:
1. Newly issued research recommendations and
target prices always supersede previously published
research.
2. Ratings definitions prior to 27 January, 2007 were:
Buy: Expected total return (including dividends)
of 10% or more over a 12-month period
Hold: Expected total return (including
dividends) between -10% and 10% over a 12-
month period
Sell: Expected total return (including dividends)
of -10% or worse over a 12-month period
47 %
51 %
2 %
48 %
42 %
37 %
0
50
100
150
200
250
300
350
400
450
500
Buy Hold Sell
North American Universe
Companies Covered Cos. w/ Banking Relationship

DB Dry Bulk Shipping 2013 Outlook

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